A- To Our Investors
2,853
5,209
4,255
71
thereof: Attributable to shareholders
€ MN
6,616
6.3%
6,221
5,996
5,231
2,591
5,053
4,207
71
Balance sheet as of 31 December
Total assets
€ MN
Investments
Total liabilities
848,942
€ MN 509,493
€ MN 782,843
5.4%
4.7%
5.5%
5,558
805,787
486,445 411,148
6,603
6,987
10,402
10,066
9,337
7,764
8,243
7,044
70
Net income from continuing operations³
€ MN
6,987
5.8%
6,603
6,343
5,558
2,853
5,209
4,650
Net income (loss) from discontinued
operations, net of income taxes³
€ MN
(395)
Net income
€ MN
5.8%
711,079
694,411
641,322
Shareholders' equity
€ MN
63,144
3.9%
60,747
50,083
50,388
43,457
66,474
44,491
64,441
གྷ¢8 8 8
186
40,108
Non-controlling interests
€ MN
2,955
2,955
2,765
2,576
2,290
2,071
2,121
198
68,832
72,540
66,566
68,989
401,711
350,645
742,085
658,230
641,448
595,575
624,945 583,717
334,618 294,252
578,383 541,488
172
thereof: Reserves for insurance
and investment contracts
€ MN
3.2%
486,222
463,334
404,072
390,984
361,956
349,793 323,801
190
thereof: Reserves for loss and loss
adjustment expenses
€ MN
72,003
4.4%
4.9%
10,735
€ MN
Operating profit²
MANAGEMENT DISCUSSION AND ANALYSIS
Business Environment
Executive Summary of 2015 Results
Property-Casualty Insurance Operations
Life/Health Insurance Operations
67
69
74
80
86
Asset Management
90
Corporate and Other
92
Outlook 2016
98
Balance Sheet Review
105
Liquidity and Funding Resources
110
Reconciliations
RISK AND OPPORTUNITY REPORT AND FINANCIAL CONTROL
112
61 Progress in Sustainable Development
Strategy and Steering
58
53 Business Operations and Markets
Building on
Our Proud
Heritage
Allianz Group
Annual Report 2015
Allianz ⑪
CONTENT
A - To Our Investors
12
52222
19
20
Letter to the Investors
Supervisory Board Report
131
Supervisory Board
23 Allianz Share
B-Corporate Governance
27 Corporate Governance Report
wwwN
32 Statement on Corporate Management pursuant to § 289a of the HGB
Takeover-related Statements and Explanations
34
37 Remuneration Report
C-Group Management Report
52
Content
YOUR ALLIANZ
Board of Management
Share information
Risk and Opportunity Report
D-Consolidated Financial
Statements
from
More
2015
previous
year
2014
2013
2012
2011
2010
2009
details on
page
Income statement
Total revenues¹
€ MN
125,190
2.4%
122,253
110,773
106,383
103,560
106,451
97,385
70
Change
ANNUAL RESULTS
Allianz at a glance
►To go directly to any chapter,
simply click on the headline or
the page number.
134
135
136
Content
Consolidated Balance Sheets
Consolidated Income Statements
137 Consolidated Statements of Comprehensive Income
138
Consolidated Statements of Changes in Equity
139
Consolidated Statements of Cash Flows
Controls over Financial Reporting and Risk Capital
141
E – Further Information
245
Joint Advisory Council of the Allianz Companies
246
International Advisory Board
247
Mandates of the Members of the Supervisory Board
248
Mandates of the Members of the Board of Management
249
Glossary
Notes to the Consolidated Financial Statements
Basic earnings per share
6,343
Dividend per share
Allianz is one of the strongest financial communities worldwide. More than
85 million private and corporate customers insured by Allianz rely on its
knowledge, GLOBAL REACH and CAPITAL STRENGTH to protect them
and help them realize their goals in life. Allianz stands for trust based on
INTEGRITY, RESILIENCE and the DEDICATION of its 142,459 employees.
EN 63.1
€ BN
Shareholders' equity — page 98
AA Standard & Poor's rating since 2007
CBN 125.2
€
Total revenues- page 70
€7.30
Dividend per share (proposal) - page 24
€ MN
10,735
Operating profit — page 70
€ MN
6,616
Net income attributable to shareholders — page 71
200%
Conglomerate solvency ratio — page 98
TO OUR INVESTORS
A
Annual Report 2015
Allianz Group
3
Group profile
The consolidated financial statements are presented in millions of Euros (€ MN), unless otherwise stated. Due to rounding, numbers presented may not add up precisely to the totals provided and percentages may not precisely
reflect the absolute figures. Figures prior to 2013 have not been adjusted accordingly.
Disclaimer regarding roundings
9- For further information about insurer financial strength ratings of Allianz SE, please refer to page 114.
Total assets under management
as of 31 December
€ MN
1,762,896
(2.1)% 1,801,178 1,769,551 1,852,332 1,656,993 1,517,538 1,202,122
80
87
thereof: Third-party assets under
management as of 31 December
€ MN
Employees
1,275,886
142,459
A- TO OUR INVESTORS
(2.8) % 1,312,910 1,360,759 1,438,425 1,281,256 1,163,982
(3.4)% 147,425 147,627
151,338
141,938
925,699
153,203
87
65
1 - Total revenues comprise statutory gross premiums written in Property-Casualty and Life/Health, operating
revenues in Asset Management, and total revenues in Corporate and Other (Banking).
2- The Allianz Group uses operating profit as a key financial indicator to assess the performance of its business
segments and the Group as a whole.
3- Following the announcement of the sale on 31 August 2008, Dresdner Bank was classified as held for sale
and discontinued operations. Therefore, all revenue and profit figures presented for our continuing busi-
ness do not include the parts of Dresdner Bank that we sold to Commerzbank on 12 January 2009. The
results from these operations are presented in a separate net income line "Net income (loss) from dis-
continued operations, net of income taxes".
4- Proposal.
5- Total dividend reflects the treasury shares held at the time of the publication of the convocation of the
Annual General Meeting in the Federal Gazette. Such treasury shares are not entitled to the dividend
pursuant to § 71b of the German Stock Corporation Act (AktG). Should there be any change in the num-
ber of treasury shares by the date of the Annual General Meeting, the total dividend will be amended
accordingly.
6-Based on average shareholders' equity. Average shareholders' equity has been calculated based upon
the average of the current and the preceding year's shareholders' equity as of 31 December.
7- Based on net income from continuing operations after non-controlling interests.
8-Solvency according to the E.U. Financial Conglomerates Directive. Off-balance sheet reserves are accepted
by the authorities as eligible capital only upon request. Allianz SE has not submitted an application so far.
Excluding off-balance sheet reserves, the solvency ratio as of 31 December 2015 and 2014 would be 191%
and 172%, respectively.
144,094
98
Pages 4-24
Letter to the Investors
momentum.
Encouraged by the very good overall results, it is now time for us to look to the future.
Rather than take our healthy position in the insurance market and asset management
business for granted, we must adapt to the radical economic, political and global upheaval
that is taking place. We are currently affected by geopolitical instability, demographic
Annual Report 2015 Allianz Group
A- To Our Investors
5 Letter to the Investors
12 Supervisory Board Report
19 Supervisory Board
20 Board of Management
23 Allianz Share
and social change, a slowdown in growth in many markets, and persistently low interest
rates. In addition, digitalization is revolutionizing everything we do. It is fundamentally
changing the way in which people interact with companies and with each other.
In order for us to remain successful and strong in this constantly changing environment,
we - the Board of Management, together with more than 200 colleagues in different
countries and functions – have developed our Renewal Agenda. It was presented to you
and the entire investor community at our Capital Markets Day in November 2015.
Your company has defined five fields of action to secure growth in revenues and profit-
ability.
True Customer Centricity: We aim for an outstanding customer experience by gaining
a better understanding of our customers' needs and tailoring our services so as to meet
those needs. Our success is measured by our customers' willingness to recommend
Allianz, for which we use the Net Promoter Score (NPS). The results reveal the level of our
customers' satisfaction and loyalty and indicate how we can improve even more. Since
a high NPS also means accelerated revenue growth, by 2018 we would like 75% of our
businesses (currently 50%) to be loyalty leaders or at least above-market average in terms
of NPS.
Digital by Default: Digitalization can suddenly threaten business models that have been
successful in the past, as we have witnessed in other industries. But the good news for
you as an Allianz investor is that digitalization also opens up major opportunities for your
company. It allows us to transform Allianz and concentrate on the things that promote
positive customer experience and customer growth, and at the same time to increase our
productivity.
We are working throughout the Group on simplifying products and processes and on
common technologies and platforms that will fully digitalize the business step by step.
The resulting productivity gains will be invested in future business model improvements.
Our ambition is that these initiatives will bring about a sustained increase in productivity
of at least € 1 BN per year by 2018. In order to reach this goal, we will have to consistently
align business models, products, and processes across country and company borders and
minimize paper at each element of the value chain.
Annual Report 2015 Allianz Group
7
8
Technical Excellence: Our aim is to raise the quality of our insurance business to a level
that generates superior margins and growth rates by leveraging the best analytical methods
and our highly-talented experts and managers. The advantages offered by digitalization
will be used to optimize our risk-adequate pricing and to streamline and speed up claims
processing. We also seek to increase growth and effectiveness in our business with
medium-sized enterprises and commercial firms. In the Property-Casualty segment, our
goal is to achieve a combined ratio of 94% or better by 2018, with the support of the best
technical experts, and to receive consistently positive feedback from brokers and custom-
ers. In the Life/Health business segment we are targeting a return on equity of 10% or
higher and a new business margin of at least 3%. This also requires us to selectively wind
down unprofitable business.
Growth Engines: We will consolidate our leading positions in mature markets and expand
our presence in growth regions with the aim of generating stronger growth and improving
margins. Our new joint venture with the Chinese web portal Baidu, which reaches 90%
of Chinese internet users, is one good example. It puts us in a prominent position in one
of the most dynamic digital insurance markets with annual growth rates of 40% and
expected annual revenues of € 100 BN by 2020.
Inclusive Meritocracy: Our corporate culture will be refined to make not only high per-
formance matter, but also the way in which our employees go about achieving it, for
example by collaborating closely in cross-functional teams. The aim is to promote an
entrepreneurial spirit that concentrates on finding the best ideas and implementing
them productively together with others in the organization. For this to succeed, we are
adjusting our remuneration and incentive systems. The Inclusive Meritocracy Index
(IMIX), which is based on our annual employee surveys, shows the progress we have made
towards renewing our management culture. It currently stands at 68% throughout the
Group, and we aim to increase it to 72% by 2018.
-
We are implementing the Renewal Agenda together – full of optimism, ideas and con-
fidence in our own capabilities because we have excellent and in many cases unique
resources. Even in adverse conditions, our financial strength has firm foundations.
Allianz stands for trust based on competence, integrity, and resilience. That is why our
customers and shareholders place their trust in us. We have a strong brand and it is
getting even stronger - Allianz is the only insurer among the top 50 companies in the
Annual Report 2015 Allianz Group
In the case of PIMCO, although the new management team successfully stabilized the
business and outflows were reduced, net outflows have not yet ceased. Overall, flows were
significantly influenced by the macroeconomic environment and in particular by the
expectation of rising interest rates in the United States, which prompted many investors
to reduce their investments in fixed-income securities. As a consequence, PIMCO will
again be an area of focus for Allianz in 2016, with the clear goal of regaining its former
The performance of the Property-Casualty segment was again very strong: By growing
revenues by 6.8% and operating profit by 4.1%, Allianz has clearly confirmed its position
as global market leader. Another major reason for our continued success in 2015 is the
accelerating reorientation of our Life/Health insurance business towards unit-linked
and capital-efficient products. We have successfully adjusted the product offer to match
the low-yield environment in our key markets, such as Germany. The new products have
a balanced opportunity-risk profile, as lower guarantees come with a higher share of
the investment result. As a result they are in strong demand, allowing us to significantly
increase the share of these innovative products in our new business.
At the same time, I am delighted that the share price performed so strongly in 2015 with
the value of your shares increasing by 19.1%. Including the dividend payment, we are
pleased to report a return of 24.6%. As we want you to further participate in our robust per-
formance in 2015, we will propose to the Annual General Meeting to increase the dividend
by € 0.45 to € 7.30.
I am proud of this team. Allianz is a different company today from the one I joined in 2008.
Besides being more profitable, we have become more versatile, more efficient and more
responsive. This is the lasting legacy of Michael Diekmann, my predecessor as Chairman
of the Board of Management. In twelve years, many of which were plagued by crisis, he
took your company to new levels of performance and secured Allianz a place in the league
of the most reputable financial service companies worldwide. I believe I speak in your
name when I express my sincere thanks to Mr. Diekmann for his outstanding services.
2222
12
19
20
23
Supervisory Board Report
Supervisory Board
Board of Management
Allianz Share
4
Annual Report 2015 Allianz Group
5 Letter to the Investors
5
12 Supervisory Board Report
20 Board of Management
23 Allianz Share
OLIVER BÄTE
Chairman of the Board of Management
Dear
Juvestors
-
Your Allianz looks back on another successful year - a year in which we celebrated our
125th anniversary and generated record revenues of € 125.2 BN. Operating profit grew
3.2% to € 10.7 BN and net income attributable to shareholders was € 6.6 BN. These figures
show that your company is very well positioned and can deliver impressive results even
in difficult times.
The excellent results are due, above all, to our more than 142,000 highly motivated
employees, who have put all their energy into making 2015 a successful year for Allianz.
I would like to extend to them my warmest thanks for their loyalty and hard work.
Annual Report 2015 Allianz Group
5
Diluted earnings per share
19 Supervisory Board
92
6
114
4.50
4.10
24
€ MN
3,3204,5
6.7%
3,112
2,405
2,039
2,037
2,032
1,850
71
Share price as of 31 December
€
163.55
19.1%
137.35
130.35
104.80
73.91
88.93
87.15
4.50
4.50
5.30
6.85
8.
Total dividend
€
14.56
6.2%
13.71
13.23
11.56
5.74
11.20
9.33
24
231
14.55
13.64
13.05
11.48
5.58
11.12
9.30
231
€
7.304
6.6%
€
Market capitalization as of 31 December
6.6%
74,742
13.5
12.5
6.2
12.4
12.6
Conglomerate solvency
%
200
19.6%-p
181
182
197
179
173
164
AA
АА
AA
AA
AA
AA
€ MN
AA
13.0
(0.4)%-p
Standard & Poor's rating
40,419
19.1%
59,505
47,784
33,651
62,769
39,557
24
Other information
Return on equity6,7
10.7
(0.5)%-p
%
92
%
gains/losses on bonds net of shadow DAC) 6,7
Return on equity (excluding unrealized
11.2
92
12.5
12.5
5.9
11.1
11.9
11.9
Our net income attributable to shareholders increased, reaching
€ 6.6 BN in 2015. Consistent with our disclosure practice in the past and
given the susceptibility of our non-operating results to adverse capi-
tal market developments, we do not provide a precise outlook for net
income. However, since our outlook presumes no major disruptions
of capital markets, we anticipate a rather stable net income for 2016.
Although the global economy is showing signs of recovery, invest-
ment results are likely to remain under pressure due to low interest
rates. This will be offset by an increase in our operating asset base.
In 2015, our operating profit was in the upper end of our target
range, hitting € 10.7 BN. In 2016, we envisage an operating profit of
€ 10.5 BN, plus or minus € 0.5 BN, as we expect a slightly lower operating
profit in the Property-Casualty, Life/Health and Asset Management
business segments and a slight improvement in our Corporate and
Other business segment.
In 2015, our total revenues amounted to € 125.2 BN, representing a
2.4% increase and a 2.1% decrease on a nominal and internal basis,
respectively, compared to last year. We expect a rather flat revenue
development in 2016, with Property-Casualty advancing and Asset
Management revenues slightly decreasing. Life/Health revenues are
likely to be under pressure due to our selective focus on profitable
growth.
expected revenues and earnings for 2016
Management's assessment of
PROPERTY-CASUALTY INSURANCE
We expect to have steady access to financial markets at reason-
able cost in order to maintain our strong financial flexibility. This is
supported by prudent steering of our liquidity resources and a matu-
rity profile focusing on a long-dated average remaining term. Based
on current interest rate expectations, our average capital market
financing costs in 2016 should be broadly in line with 2015.
Average U.S. Dollar to Euro exchange rate of 1.11.
Level of claims from natural catastrophes at expected average
levels.
No disruptive fiscal or regulatory interference.
No major disruptions of capital markets.
- A 100 basis point increase or decrease in interest rates would,
respectively, either raise or lower operating profits by approx-
imately € 0.1 BN in the first year following the rate change. This
does not include fair value changes in interest rate-sensitive
positions that are reported in our income statement.
We expect our revenues to increase by approximately 2% in 2016
(2015: 6.8%), supported by favorable volume and - to a lesser extent
- price effects as well as external growth. This growth is expected to
be supported by the acquisition of the commercial portfolio of Aegon,
strengthening our position in the attractive Benelux Property-Casualty
market.
Subdued growth prospects for several major emerging markets.
Modest rise in interest rates expected.
Global recovery to continue.
- A 10% weakening or strengthening of the U.S. Dollar versus our
planned exchange rate of 1.11 to the Euro would have a negative
or positive impact on operating profits of approximately
€ 0.3 BN, respectively.
Premium growth in 2016 is expected mainly from our European
core markets, including the United Kingdom, Germany, and Italy. Top
line development will be further supported by positive trends at
Allianz Worldwide Partners, bundling our B2B2C business activities.
In 2016 we will focus on the new business mix as well as in-force
management in order to address customer needs in light of the
pro-
longed low yield environment and improve shareholder returns. We
will continue to move our new business mix towards unit-linked,
capital-efficient and protection products and will work on product
and distribution actions. We will actively manage in-force business
and work on expense management, asset/liability management, and
crediting strategies in order to mitigate the impacts of the difficult
market conditions, particularly low interest rates.
In 2015, our combined ratio was at 94.6%. In 2016, we expect prog-
ress towards our 2018 ambition of 94% or better. This rests on our
expectation that the aggregate effect of improvements in pricing,
claims management, and productivity will compensate for any
underlying claims inflation. Despite the high volatility of natural
catastrophes in recent years, we have assumed such claims will be in
line with their expected average level in 2016.
The Allianz Group maintains a healthy liquidity position combined
with superior financial strength and capitalization well above what
supervisory authorities currently require.
-
Our Corporate and Other business segment recorded an operating
loss of € 0.9 BN in 2015. Due to the expectation of an improving operat-
ing result of the Holding & Treasury reportable segment - mainly
attributable to lower administrative expenses - we predict an operat-
ing loss in the range of € 0.7 BN to € 0.9 BN for Corporate and Other
(including consolidation) in 2016.
CORPORATE AND OTHER
In 2016, we expect a cost income ratio of well below 65% (2015:
64.5%), supported by our focus on expense discipline and operational
excellence. Mid-term we expect our cost-income ratio to be at 60%.
Although we see a more challenging environment for the asset man-
agement industry in 2016 compared to previous years, we expect
positive net flows at PIMCO in 2016 and continued solid net inflows at
AllianzGI. Market returns are expected to contribute moderately to a
positive development of total AuM. Management and loading fees as
well as performance fees are expected to decrease slightly. Lower
operating expenses are expected to only partially offset the impact of
lower operating revenues. Therefore, we envisage our operating profit
to be in the range of € 1.9 BN and € 2.5 BN in 2016 (2015: € 2.3 BN).
ASSET MANAGEMENT
It must be noted, however, that market volatility, along with the
level of net harvesting, can significantly affect the Life/Health busi-
ness segment results and make precise predictions difficult.
As communicated at the Capital Markets Day in November 2015,
ROE¹ will be one of the major key performance indicators (KPIs) for the
steering of our Life business. In 2016 we expect RoE¹ in our Life/Health
business segment to be between 9.0% and 11.0%.
due to a higher level of net harvesting from our active portfolio de-
risking actions. This more than compensated for the loss recognition
in South Korea. For 2016, we expect operating profit in our Life/Health
business segment to be between € 3.3 BN and € 3.9 BN.
In 2015, our operating profit of € 3.8 BN exceeded our target range- development and capitalization
Financing and liquidity
LIFE/HEALTH INSURANCE
95
Annual Report 2015 Allianz Group
Overall, we expect our 2016 operating profit to be in the range of
€ 5.2 BN to € 5.8 BN (2015: € 5.6 BN).
As the low interest rate environment is likely to persist, invest-
ment income will remain under pressure due to the rather short
duration of investments in the Property-Casualty business segment.
We will continue to take measures to adapt our investment strategy
to ongoing market conditions.
We believe the overall slow rise in prices we witnessed in a num-
ber of markets in 2015 will continue in 2016. However, as in previous
years, we will keep our focus on achieving strong underwriting results
by adhering to our strict underwriting discipline and will be willing
to accept a lower top line if target margins cannot be achieved.
-
Operating profit of € 10.5 BN, plus or minus € 0.5 BN.
Protection of shareholders' investments, while continuing
to provide attractive returns and dividends.
Selective profitable growth.
Our outlook assumes no significant deviations from the following
underlying assumptions:
Growth in gross premiums written of approximately 2%.
Operating profit in the range of € 5.2 BN to € 5.8 BN.
Progress towards our combined ratio ambition of 94%
or better by 2018.
ASSET MANAGEMENT
LIFE/HEALTH
PROPERTY-CASUALTY
ALLIANZ GROUP
OUTLOOK 2016
Overview: outlook and assumptions 2016
Pressure on operating investment income (net) to continue
due to reinvestments in a consistently low interest rate
environment.
As discussed earlier, world economic growth is expected to be mod-
erately higher in 2016. Growth dynamics, however, vary significantly
across the globe and there are clear risks for 2016. Geopolitical ten-
sions, a renewed flare-up of the European sovereign debt crisis and
currency or trade wars could all jeopardize economic development.
However, the outlook provided here assumes the absence of such
shocks.
Although we see a more challenging environment for the asset
management industry in 2016, prospects for further growth in almost
all classes in the asset management industry are buoyed by these
positive economic conditions as well as trends in client demand.
However, profitability in the industry is under pressure from con-
tinuous flows into passive products and rising distribution and/or
marketing costs that are tightening operating margins. Measures
aimed at increasing regulatory oversight and reporting could also
affect profitability in the asset management sector.
However, bonds should remain attractive if longer-term trends
towards moderately higher interest rates – especially in the United
States – are coupled with global demographic trends. For the growing
number of retirees in developed countries looking for a stable stream
of income, bonds are particularly interesting. This also holds true for
liability-driven investors.
-
-
The markets widely expect the U.S. Federal Reserve to continue to
increase interest rates slowly in 2016 and to potentially start selling
the bonds accumulated in its post-crisis bond-buying program grad-
ually throughout the year. However, these actions are dependent on
the unemployment rate and inflation levels in the United States. In
addition, the extension of the policy of low interest rates and quanti-
tative easing programs in the Eurozone and Japan in 2016 is very
likely. Thus, investors will continue to try to anticipate the central
banks' moves and measures and we expect volatility to persist or
even increase in equity and fixed income markets in 2016. Global
market volatility could also be fueled by ongoing concerns about the
economic development in China, a further decrease in commodity
prices (such as crude oil) and a potential unstable geopolitical situ-
ation in certain regions. We have seen many of these factors combine
in the opening weeks of 2016 and the resulting impacts on financial
markets and policymakers worldwide.
We closely monitor the capital positions of the Group and at the
operating entity level. Additionally, we will continue to optimize our
interest rate and spread sensitivities through asset/liability manage-
ment and life product design.
Asset management industry outlook
In order to continue growing, it is vital that asset managers have
sufficient business volumes, maintain efficient operations and keep
investment results above benchmark levels.
Prioritizing profitability over growth and continuing to shift
new business mix towards unit-linked, capital efficient and
protection products. Addressing customer needs in the
prolonged low yield environment. Revenues are expected to
be in the range of € 62.0 BN to € 68.0 BN.
Operating profit between € 3.3 BN and € 3.9 BN.
ROE¹ between 9.0% and 11.0%.
ASSUMPTIONS
110 Reconciliations
98 Balance Sheet Review
105 Liquidity and Funding Resources
92 Outlook 2016
74 Property-Casualty Insurance Operations 90 Corporate and Other
86 Asset Management
80 Life/Health Insurance Operations
69 Executive Summary of 2015 Results
67 Business Environment
Management Discussion and Analysis
C Group Management Report
Annual Report 2015 Allianz Group
94
1- Excluding unrealized gains/losses on bonds net of shadow DAC.
Operating profit in the range of € 1.9 BN to € 2.5 BN.
Cost-income ratio of well below 65%.
Slight increase in total AuM due to positive market return,
supported by a return to positive net flows at PIMCO and
continued solid net inflows at AllianzGI.
Pressure on investment income due to low interest rates
and continued capital market uncertainty.
-
Expected dividend development²
Paid-in capital Retained earnings (includes foreign currency translation adjustments)
Unrealized gains/losses (net)
In the interest of dividend continuity, the objective is to keep the
dividend per share at least at the level paid in the previous year. The
dividend policy of the Allianz Group continues to aim for a healthy
balance between an attractive yield and investments in profitable
growth. To assure capital discipline, management further intends to
evaluate and pay out any unused capital budget earmarked for exter-
nal growth every three years. The first evaluation will take place at the
end of 2016. Out of a budget of € 2.4 BN for external growth (equals 20%
of the net income attributable to shareholders for the years 2013 and
2014), we have invested a total net amount (including risk capital
requirements and net of divestments) of € 0.9 BN in 2014 and 2015. The
dividend policy is subject to a sustainable Solvency II ratio above
160%. This policy is reflected in our proposed dividend of € 7.30 per
share.
40
31/12/2015
50
181%
60
28,928
200%
30
31/12/2014
28,928
20,000
30,000
€ BN
40,000
17,901
-23,296.
10,000
49.8
20
10
the rebalancing of investment portfolios will continue as well as the
shift in the product mix. New, less capital-intensive products, mixing
unit-linked product characteristics with some sort of return guaran-
tees, will increasingly replace the old-style savings products. At the
same time, mastering the digital transformation is becoming more
and more crucial. This mix of strategic challenges will not only spur
industry consolidation but could also act as a drag on overall profit-
ability.
Annual Report 2015 Allianz Group
98
1- Off-balance sheet reserves are accepted by the authorities as eligible capital only upon request. Allianz SE
has not submitted an application so far. Excluding off-balance sheet reserves, the conglomerate solvency
ratios would be 191 % and 172% as of 31 December 2015 and 31 December 2014, respectively.
2-This does not include non-controlling interests of € 2,955 MN as of 31 December 2015 and 2014, respectively.
For further information, please refer to note 25 to the consolidated financial statements. Retained earnings
include foreign currency translation adjustments of € (926) MN and € (1,977) MN as of 31 December 2015
and 31 December 2014, respectively.
As of 31 December 2015, our conglomerate solvency ratio amounted
to 200% - 19.6 percentage points higher compared to year-end 2014.
The Group's eligible capital for solvency purposes went up by € 8.1 BN
to € 58.0 BN, including off-balance sheet reserves of € 2.7 BN (31 Decem-
ber 2014: € 2.3 BN). This increase was mainly driven by our net income
1- Off-balance sheet reserves are accepted by the authorities as eligible capital only upon request. Allianz SE
has not submitted an application so far. Excluding off-balance sheet reserves, the conglomerate solvency
ratios would be 191 % and 172 % as of 31 December 2015 and 31 December 2014, respectively.
31/12/2015
Requirement
Eligible capital
31/12/2014
Conglomerate solvency ratio
0
In 2015, shareholders' equity went up by € 2,397 MN to € 63,144 MN as of
31 December 2015. Unrealized gains in shareholders' equity decreased
by € 2,998 MN, mainly due to lower fair values of debt securities follow-
ing a modest increase in interest rates. Realizations on both debt
securities and equities also contributed to this reduction. In addition,
shareholders' equity was lowered by the € 3,112 MN dividend payout
in May 2015. However, these effects were more than offset by our net
income attributable to shareholders of € 6,616 MN and the € 1,050 MN
positive foreign currency translation adjustments that predominantly
resulted from the appreciation of the U.S. Dollar against the Euro. Fur-
thermore, the recovery of actuarial losses on defined benefit plans
contributed with € 465 MN to an increase in other comprehensive
income.
29.0
58.0
| |
27.6
50,000
13,917
60,000
60,747
Management's overall assessment
110 Reconciliations
105 Liquidity and Funding Resources
98 Balance Sheet Review
92 Outlook 2016
90 Corporate and Other
74 Property-Casualty Insurance Operations
86 Asset Management
80 Life/Health Insurance Operations
69 Executive Summary of 2015 Results
67 Business Environment
Management Discussion and Analysis
C Group Management Report
2- This dividend policy represents the current intention of the Board of Management and the Supervisory
Board and may be revised in the future. Also, the dividend payment in any given year is subject to specific
dividend proposals by the Board of Management and the Supervisory Board, each of which may elect to
deviate from this dividend policy if appropriate under the then prevailing circumstances, as well as to the
decision of the Annual General Meeting.
Annual Report 2015 Allianz Group
96
1-Excluding unrealized gains/losses on bonds net of shadow DAC.
of the current economic situation of
the Allianz Group
In November 2014, the Board of Management and the Supervisory
Board of Allianz SE decided on a new allocation of net income in its
dividend policy. Starting with the financial year 2014, the proposed
regular pay-out to Allianz shareholders has been 50% of Allianz Group
net income (attributable to shareholders).
Cautionary note regarding forward-looking statements
Such deviations may arise due to, without limitation, (i) changes of the general economic
conditions and competitive situation, particularly in the Allianz Group's core business and core
markets, (ii) performance of financial markets (particularly market volatility, liquidity and
credit events), (iii) frequency and severity of insured loss events, including from natural catas-
trophes, and the development of loss expenses, (iv) mortality and morbidity levels and trends,
(V) persistency levels, (vi) particularly in the banking business, the extent of credit defaults,
(vii) interest rate levels, (viii) currency exchange rates including the Euro/u.s. Dollar exchange
rate, (ix) changes in laws and regulations, including tax regulations, (x) the impact of acquisi-
tions, including related integration issues, and reorganization measures, and (xi) general
competitive factors, in each case on a local, regional, national and/or global basis. Many of
these factors may be more likely to occur, or more pronounced, as a result of terrorist activities
and their consequences.
70,000
CONGLOMERATE SOLVENCY¹
The Allianz Group is a financial conglomerate within the scope of the
E.U. Financial Conglomerates Directive and the related German law
in force since 2005. The law requires that financial conglomerates
calculate the capital available to meet their solvency requirements
on a consolidated basis, which we refer to as “eligible capital”. From
1 January 2016 onwards, capitalization based on Solvency II will be
utilized for regulatory purposes.
Regulatory capital adequacy
10,920
63,144
+3.9%
€ MN
SHAREHOLDERS' EQUITY
Shareholders' equity²
- Conglomerate solvency ratio up 19.6 percentage points to 200%.¹
- Shareholders' equity increased by € 2.4 BN to € 63.1 BN.
Balance Sheet Review
97
Annual Report 2015 Allianz Group
The company assumes no obligation to update any information or forward-looking statement
contained herein, save for any information required to be disclosed by law.
No duty to update
The statements contained herein may include prospects, statements of future expectations
and other forward-looking statements that are based on management's current views and
assumptions and involve known and unknown risks and uncertainties. Actual results, perfor-
mance or events may differ materially from those expressed or implied in such forward-
looking statements.
associated with the low yield environment and regulation. As a result,
Overall, at the date of issuance of this Annual Report and given cur-
rent information regarding natural catastrophes and capital market
trends - in particular foreign currency, interest rates and equities –
the Board of Management has no indication that the Allianz Group is
facing any major adverse developments.
93
Business segment overview
Operating loss increased by € 124 MN to € 945 MN, due to higher centralized
pension costs.
Corporate and Other
99
89
Annual Report 2015 Allianz Group
2-Net of the impact on variable compensation.
average exchange rate of the U.S. Dollar to Euro was 1.11 (2014: 1.33).
1- Operating profit adjusted for foreign currency translation and (de-)consolidation effects. In 2015, the
1- Represents interest and similar income less interest expenses.
2- Represents operating expenses divided by operating revenues.
59.2
64.5
Corporate and Other encompasses the reportable segments
Holding & Treasury, Banking, and Alternative Investments. Hold-
ing & Treasury includes the management of and support for the
Allianz Group's businesses through its strategy, risk, corporate
finance, treasury, financial reporting, controlling, communica-
tion, legal, human resources, technology, and other functions.
Our banking products offered in Germany, Italy, France, the
Netherlands, and Bulgaria complement our insurance product
portfolio. We also provide global alternative investment man-
agement services in the private equity, real estate, renewable
energy, and infrastructure sectors, mainly on behalf of the
Allianz Group.
Cost-income ratio² in %
1,449
(967)
(817)
Net income
Income taxes
2,588
2,266
Income before income taxes
(15)
(31)
Non-operating items
2,603
1,621
Key figures
KEY FIGURES CORPORATE AND OTHER¹
€ MN
1,750
1,899
2014
2015
Operating result
Annual Report 2015 Allianz Group
90
90
refer to note 6 to the consolidated financial statements.
1- Consolidation included. For further information about our Corporate and Other business segment, please
Operating expenses
Operating revenues
ALTERNATIVE INVESTMENTS
Operating result
Operating expenses
Operating revenues
BANKING
Operating result
Operating expenses
Operating revenues
HOLDING & TREASURY
€ MN
KEY FIGURES REPORTABLE SEGMENTS
Net income (loss)
Operating result
Operating expenses
Operating revenues
2,297
Operating profit
(3,784)
(4,182)
2015
Income from financial assets and liabilities
carried at fair value through income (net)
Other income
Fee and commission expenses
Net fee and commission income
Net interest income¹
Other
Fee and commission income
Commissions
Management and loading fees
Performance fees
Other
€ MN
ASSET MANAGEMENT BUSINESS SEGMENT INFORMATION
Our net income declined by € 172 MN - or 10.6% – to € 1,449 MN. This
represents a drop of 22.6% before the effect from foreign currency
translation and is largely consistent with our operating profit devel-
opment.
Net income
Our cost-income ratio went up 5.3 percentage points to 64.5%. The
SPA contributed 2.0 percentage points² and the restructuring pro-
gram at AllianzGI contributed 0.6 percentage points of the upswing.
Restructuring charges of € 41 MN were an additional burden for
operating expenses. They were driven by a restructuring program at
AllianzGI, which started in the third quarter of 2015 and aims to posi-
tion AllianzGI as a global investment leader.
Administrative expenses rose 9.3% to € 4,141 MN. However, adjusted
for foreign currency translation effects, they went down by 5.3%. This
was mainly driven by lower personnel expenses – including a 11.2%
drop in variable compensation - and to a smaller proportion due to
lower non-personnel expenses. Nevertheless, administrative expenses
were impacted by several special items, in particular by the Special
Performance Award (SPA), which was introduced in the fourth quarter
of 2014 to secure performance and retain talent at PIMCO.
Our operating profit went down by € 306 MN – or 11.8% – to € 2,297 MN.
On an internal basis¹, the decrease was 23.5%, mainly driven by lower
third-party AuM-driven revenues due to lower average third-party
AuM and to a lesser extent - lower third-party AuM-driven margins,
partly offset by higher performance fees and lower operating expenses.
Operating profit
110 Reconciliations
105 Liquidity and Funding Resources
98 Balance Sheet Review
92 Outlook 2016
74 Property-Casualty Insurance Operations 90 Corporate and Other
86 Asset Management
80 Life/Health Insurance Operations
69 Executive Summary of 2015 Results
67 Business Environment
Management Discussion and Analysis
C Group Management Report
Looking at profitability, there is no expected relief from the pains Outlook for the Allianz Group
2014
(2,844)
7,370
607
34
Operating expenses
3
(41)
Restructuring charges
(3,787)
excluding acquisition-related expenses
Administrative expenses (net),
Operating revenues
6,388
6,479
6
4
5
(8)
(3)
(5)
6,380
6,488
(1,445)
(1,523)
(145)
(83)
(1,301)
(1,440)
7,825
8,011
46
7,505
275
(2,571)
(4,141)
(820)
Operating investment result increased 17% to € 20.4 BN, supported by high level of realized
gains from our portfolio de-risking actions.
Operating profit of € 3.8 BN - above target range - driven by higher level of net harvesting
from our portfolio de-risking actions and favorable foreign currency effects, mainly from
u.s. Dollar appreciation. This more than compensated for the loss recognition in South Korea.
Margin on reserves at 67 basis points.
Revenues at € 66.9 BN - above target range - driven by significant growth in unit-linked
premiums as a result of changes in our product strategy to shift towards unit-linked and
capital-efficient products, as well as positive foreign currency effects. This more than offset
the reduced sales of traditional products in major European countries.
Operating investment income (net) increased slightly by € 54 MN compared to the prior year.
Combined ratio was 94.6%.
Operating profit of € 5.6 BN is above the mid-point of our target range, including a higher
than expected investment income and a rather low impact from natural catastrophes, but
worse than expected results in Argentina. The progress of our turn-around programs at
Fireman's Fund and in Brazil was slower than initially expected.
Including a strong positive foreign currency impact, gross premiums written increased by
6.8% driven by both internal growth (of 2.9%) and external acquisitions.
Return on equity (ROE) at 10.7% (2014: 11.2%). ROE excluding unrealized gains/losses on
bonds, net of shadow deferred acquisition costs (DAC), amounted to 12.5% (2014: 13.0%).
Proposed dividend at € 7.30 (2014: € 6.85) per share. Stable payout ratio of 50%.
Property-Casualty with continued sound risk selection and selective external growth,
Life/Health with growing asset base and solid new business margins, but Asset Management
with net outflows.
Operating profit of € 10.7 BN.
RESULTS 2015
Underlying cost-income ratio of 60.0% or below.
Operating profit in the range of € 2.2 BN to € 2.8 BN.
Decrease of total AuM by 2.1 % driven by net outflows at PIMCO of € 132.3 BN (2014: € 229.2 BN).
Third-party net outflows at PIMCO were receding quarter by quarter, amounting to € 11.4 BN
in the fourth quarter of 2015. Overall negative market return also contributed to this
development. However, it was partially compensated for by positive foreign currency impact
and net inflows at AllianzGI.
at PIMCO.
Margin on reserves between 50 and 70 basis points.
Pressure on investment income due to low interest rates
and continued capital market uncertainty.
Combined ratio below 96% over the cycle.
Pressure on operating investment income (net) due
to reinvestments in a low interest rate environment.
Prioritizing profitability over growth, taking further
product and pricing actions to address the prolonged low
yield environment. As a result, revenues are expected to
be in the range of € 59.0 BN to € 65.0 BN.
Operating profit between € 3.0 BN and € 3.6 BN.
Operating profit in the range of € 5.2 BN to € 5.8 BN.
Growth in gross premiums written by
approximately 3.0%.
Selective profitable growth.
OUTLOOK 2015 - AS PER ANNUAL REPORT 2014
Operating profit of € 10.4 BN, plus or minus € 0.4 BN.
Protection of shareholders' investments, while
continuing to provide attractive returns and dividends.
ASSET MANAGEMENT
LIFE/HEALTH
PROPERTY-CASUALTY
ALLIANZ GROUP
2015 RESULTS VERSUS PREVIOUS YEAR OUTLOOK FOR 2015
Overview: 2015 results versus previous year outlook¹
Slight decrease in total assets under management (AuM)
due to continued, but receding, expected net outflows
Operating profit of € 2.3 BN - below the mid-point of the outlook range mainly due to lower
AuM-driven revenues, lower than expected performance fees, and a less flexible expense
base. This was partially compensated for by positive foreign currency impacts.
Cost-income ratio deteriorated 5.3 percentage points to 64.5%. Adjusted for Special
Performance Award at PIMCO and restructuring charges related to AllianzGI 2.0, underlying
cost-income ratio was 61.9%.
1- For more detailed information on the previous year outlook for 2015, please see the Annual Report 2014 starting on page 104.
Annual Report 2015 Allianz Group
93
(945)
Annual Report 2015 Allianz Group
1- The information presented in the sections Economic outlook, Insurance industry outlook and Asset
management industry outlook is based on our own estimates.
In the life sector, the overall picture is quite similar - although pre-
mium growth is much more volatile than in the property-casualty
sector. In the coming year, this volatility may be exacerbated further
by new regulations, changing government policies and ensuing shifts
in the product mix. One thing, however, is unlikely to change: The
highest premium growth is expected in emerging Asia, where coun-
tries such as China and Indonesia should continue with high, in many
cases double-digit growth. Rising incomes and social security reforms
remain strong engines for growing insurance demand. All in all, we
expect global premium revenue to rise in the 4.0-5.0% range in 2016
(in nominal terms, adjusted for foreign currency translation effects).
In the property-casualty sector, we anticipate stable premium growth
in advanced markets. While the ongoing recovery will support
demand, pricing is becoming a growing concern. Despite the region-
wide economic pickup, Western Europe is set to remain the laggard
in terms of global premium growth. On the other hand - as in previous
years - we expect very strong performances in emerging Asia. There,
government efforts – particularly in China – to raise insurance pene-
tration across the board are starting to pay off. Overall, we expect
global premium revenue to rise between 4.0% and 5.0% in 2016 (in
nominal terms, adjusted for foreign currency translation effects); a
good one percentage point of this is attributable to China alone. Due
to the challenging pricing outlook, underwriting profitability may
come under pressure, especially if financial losses resulting from
natural catastrophes return to historical averages. At the same time,
investment returns will remain weak, despite the expected rise in
interest rates.
-
-
However, that does not mean 2016 will be identical to the previ-
ous year. For example, we expect to see interest rates starting to rise
but only slightly: overall, the interest rate environment will con-
tinue to present a headwind for the industry. Another important
change is the implementation of Solvency II in Europe. This brings
more clarity on capital positions, acting as a possible catalyst for
more industry consolidation. High pent-up demand, accommodative
government policies – in particular in the life sector - and general
trends like urbanization continue to underpin relatively strong insur-
ance premium growth in emerging markets. Therefore, we expect
these markets to outgrow advanced markets in the foreseeable
future, although our outlook has become more cautious.
-
2016 is set to become another challenging year for the insurance
industry. The big picture – characterized by only modest premium
growth, low interest rates, volatile financial markets, new regulatory
burdens and digital transformation - will not change. As a conse-
quence, industry profitability will remain under pressure and restruc-
turing will gather pace.
Insurance industry outlook
Slightly rising yields on 10-year U.S. government bonds, along
with growing speculation towards year-end about the timing and
manner in which the European Central Bank exits from its bond-
purchasing program in 2017, will exert some upward pressure on
European government benchmark bond yields. However, with short-
term rates practically at zero, there are limited prospects of markedly
higher yields on longer-term bonds. We predict yields on 10-year
German and U.S. government bonds to climb modestly towards 1%
and around 2%, respectively, by the end of 2016. In the coming months
a number of factors, including the expected rate increases by the Fed-
eral Reserve, will weigh on the Euro. However, with the economic
recovery in the Eurozone on a firmer footing, the Euro will gain sup-
port. We expect the year-end U.S. Dollar to Euro exchange rate to be
marginally above last year's closing level of 1.09.
As in 2015, financial markets will primarily be driven by mone-
tary policy and geopolitical tensions, but also by economic and polit-
ical developments in major emerging market countries such as
China. On the monetary policy front, the Federal Reserve is likely to
continue to hike interest rates very cautiously this year. By contrast,
the European Central Bank is expected to keep key interest rates at
present or even lower levels throughout 2016. We also do not see any
trimming of the European Central Bank's unconventional measures
before the end of this year.
At the beginning of 2016, the global economic picture is, broadly
speaking, split between industrialized countries and emerging mar-
kets. On the one hand, economic activity in industrialized countries
is likely to remain quite solid. In the United States, domestic demand
looks set to firm up further. In the Eurozone, the economic recovery
is likely to continue, supported by improved competitiveness and
lower energy prices. With real gross domestic product expected to
increase by 1.7%, growth will be slightly higher than in 2015. Supported
by improving economic conditions in the Eurozone and a favorable
environment for private consumption, the German economy could
expand by more than 2% in 2016. On the other hand, growth prospects
for several major emerging market countries remain subdued - for
both cyclical and structural reasons. Following a severe recession in
Brazil and Russia last year, economic activity is expected to gradually
stabilize in the course of 2016. Overall, global output is likely to
expand by about 2.7% in 2016, compared with 2.4% in 2015. Industrial-
ized countries are expected to register gross domestic product
growth of 2.0%, while in emerging markets it could increase to 3.7%
from the 3.3% seen in 2015, which was the lowest economic expansion
since the great recession of 2009. At the global level, inflation is likely
to remain very low, with a few exceptions in Latin America and Eastern
Europe, where inflation rates have risen sharply for country-specific
reasons (for example in Venezuela and in Ukraine).
Economic outlook¹
110 Reconciliations
105 Liquidity and Funding Resources
98 Balance Sheet Review
92 Outlook 2016
74 Property-Casualty Insurance Operations 90 Corporate and Other
86 Asset Management
80 Life/Health Insurance Operations
69 Executive Summary of 2015 Results
67 Business Environment
Management Discussion and Analysis
C Group Management Report
€ 0.5 BN.
- Allianz Group operating profit outlook in the range of € 10.5 BN, plus or minus
92
Outlook 2016
74 Property-Casualty Insurance Operations 90 Corporate and Other
80 Life/Health Insurance Operations
86 Asset Management
69 Executive Summary of 2015 Results
67 Business Environment
Management Discussion and Analysis
C Group Management Report
30
37
176
(146)
(176)
213
94
(1,047)
(1,032)
1,114
1,127
(917)
(1,076)
(1,386)
(1,639)
469
562
2014
2015
- Global recovery is set to continue - only moderate acceleration in emerging
market growth.
(657)
(1,003)
92 Outlook 2016
98 Balance Sheet Review
105 Liquidity and Funding Resources
66
Earnings summary
91
Annual Report 2015 Allianz Group
2- Respective offsetting effects were recorded within our other business segments, mainly within Property-
Casualty. For further information on one-off effects from pension revaluation, please refer to note 6 to
the consolidated financial statements.
110 Reconciliations
1 - For further information on the adapted cost allocation scheme for the pension provisions, please refer to
note 6 to the consolidated financial statements.
ment.
Our operating profit increased by € 7 MN to € 37 MN. This was almost
entirely driven by the net effect of € 35 MN higher fee and commission
income and a € 28 MN increase in administrative expenses. Both
developments were in line with the increased assets under manage-
ALTERNATIVE INVESTMENTS
Our operating income from financial assets and liabilities carried
at fair value through income (net), which includes trading income,
was up by € 6 MN to € 16 MN. This was due primarily to a better trading
result within our German banking business.
We recorded restructuring charges of €9 MN (2014: release of
€ 3 MN) mainly related to the modernization and digitalization pro-
gram "OLB 2019" as announced by the Oldenburgische Landesbank in
October 2015.
Our net interest, fee and commission result increased by € 15 MN
to € 559 MN. Our net fee and commission result was up by € 16 MN to
€ 225 MN. This was mainly due to higher management and perfor-
mance fee income, in line with higher assets under management in
Italy. Our net interest result remained unchanged at € 334 MN (2014:
€ 335 MN). However, this result benefited from a special dividend,
whereas the low-interest yield environment put pressure on our
interest rate margin in almost all Banking units.
Administrative expenses decreased by € 29 MN to € 409 MN as a
result of reduced variable remuneration in Italy and Germany - and
to a lesser extent fewer staff.
Our operating profit increased by € 28 MN to € 94 MN, with all Banking
units contributing positive results. The increase was driven by both
lower administrative expenses and higher net fee and commission
result and was partly offset by higher loan loss provisions and restruc-
turing charges.
BANKING
Our loan loss provisions increased by € 15 MN to € 60 MN. Higher
general loan loss allowances in Bulgaria were the largest driver of this
increase.
Administrative expenses (net), excluding acquisition-related
expenses, went up by € 181 MN to € 917 MN. Most of this increase was
related to higher centralized pension costs, due to both the adapted
cost allocation scheme¹ for the pension provisions between German
subsidiaries and Allianz SE and the net effect of decreased discount
rates and other assumption changes. Various smaller effects, includ-
ing higher IT expenses and the positive effect from recharging of
expenses for the implementation of Solvency II to our operating
business segments, almost offset each other.
Operating income from financial assets and liabilities carried at
fair value through income (net) dropped from income of € 27 MN to a
loss of € 28 MN. This was due to both a negative net effect of foreign
currency movements and related hedge positions as well as lower fair
values of certain fund investments.
Our net loss deteriorated by € 346 MN to € 1,003 MN since the effect
in our non-operating result from an adapted cost allocation scheme¹
for the pension provisions was € 335 MN lower than the previous
year's one-off benefit from pension revaluation with our German sub-
sidiaries².
Our net fee and commission result improved by € 21 MN to a loss
of € 184 MN. This improvement was primarily driven by a disposal
gain from certain IT infrastructure assets.
Our operating result decreased by € 124 MN to a loss of € 945 MN.
Improvements in Banking and Alternative Investments were more
than offset by a decline in Holding & Treasury, which mainly resulted
from higher centralized pension costs.
to € 241 MN.
Our net interest result improved by € 33 MN to a loss of € 19 MN.
Interest and similar income decreased by € 43 MN to € 222 MN. This was
mainly driven by the absence of income from associated companies,
which is recognized within the insurance business segments from
2015 onwards. A drop in interest income triggered by lower interest
yields was more than offset by higher dividend income. As a result of
lower internal borrowing and interest rates, our interest expenses,
excluding interest expenses from external debt, decreased by € 76 MN
Other income increased from € 116 MN to € 148 MN. Other income
in 2014 included € 116 MN resulting from the policyholder participation
related to the pension revaluation with our German subsidiaries². In
2015, we recorded € 148 MN of other income, resulting from policy-
holder participation related to the above-mentioned adapted cost
allocation scheme for pension provisions.
Operating earnings summaries
by reportable segment
Investment expenses were up by € 4 MN to € 76 MN.
Our operating loss increased by € 159 MN to € 1,076 MN. This was largely
due to an € 181 MN increase in administrative expenses, mainly
resulting from higher centralized pension expenses – partly offset by
a related € 31 MN increase in other income.
HOLDING & TREASURY
ISIN
ISIN
5.625% bond issued by Allianz SE
Year of issue
Interest expenses
Maturity date
Total interest expenses for senior bonds
5.75% bond issued by Allianz Finance II B.V., Amsterdam
Volume
2. SUBORDINATED BONDS³
Interest expenses
Volume
Maturity date
Year of issue
Year of issue
DE 000 A1H G1J 8
ISIN
Debt securities
2015
4.5% bond issued by Allianz Finance II B.V., Amsterdam
Volume
Equities
2014
13/3/2018
Maturity date
2013
€ 62 MN
XS 027 588 026 7
23/11/2016
2006
€ 1.5 BN
Interest expenses
€ 0.5 BN
Interest expenses
4.0% bond issued by Allianz Finance II B.V., Amsterdam
Volume
Maturity date
Further potential sources of short-term funding allowing the
Allianz Group to fine-tune its capital structure are letter of credit
facilities and bank credit lines.
53.9
The Group maintained its A-1+/Prime-1 ratings for short-term issu-
ances. Thus we can continue funding our liquidity under the Euro
Commercial Paper Program at an average rate for each tranche below
Euribor and under the U.S. Dollar Commercial Paper Program at an
average rate for each tranche below U.S. Libor.
107
ALLIANZ SE BONDS' OUTSTANDING AS OF 31 DECEMBER 2015 AND INTEREST EXPENSES IN 2015
1. SENIOR BONDS2
Year of issue
Maturity date
ISIN
Interest expenses
1.375% bond issued by Allianz Finance II B.V., Amsterdam
Volume
Year of issue
Maturity date
ISIN
Interest expenses
4.75% bond issued by Allianz Finance II B.V., Amsterdam
Year of issue
3.0% bond issued by Allianz Finance II B.V., Amsterdam
Volume
Interest expenses
ISIN
Maturity date
Year of issue
ISIN
Volume
Interest expenses
ISIN
1.8
Maturity date
Year of issue
Volume
3.5% bond issued by Allianz Finance II B.V., Amsterdam
(7.2)
THE LIFE/HEALTH BUSINESS SEGMENT
(3.6)
previous years
COMPOSITION OF ASSET BASE - FAIR VALUES
Loss and loss adjustment expenses
paid in current year relating to
55.6
(6.9)
62.5
Subtotal
3.3
(0.3)
3.6
loss reserves²
Balance carryforward of discounted
52.3
(6.6)
58.9
As of 1 January 2015
Net
4- Including cash and cash equivalents, as stated in our business segment balance sheet of €3.6 BN and
€ 3.7 BN, and receivables from cash pooling amounting to € 3.5 BN and € 4.2 BN, net of liabilities from
securities lending and derivatives of € (0.1) BN and € (0.1) BN, as well as liabilities from cash pooling of
€ (2.1) BN and € (2.1) BN as of 31 December 2015 and 31 December 2014, respectively.
0.3
ABS within the Property-Casualty business segment asset base
decreased by € 0.7 BN to € 3.3 BN and represented 3.0% (31 December
2014: 3.7%) of the business segment's asset base.
1 - Net of interest expenses (excluding interest expenses from external debt).
Annual Report 2015 Allianz Group
101
(15.1)
Property-Casualty liabilities
€ BN
ASSETS AND LIABILITIES OF
Life/Health assets
The Life/Health business segment asset base increased by € 31.5 BN
to € 596.9 BN. This was largely driven by a greater volume of debt secu-
rities and financial assets for unit-linked contracts and, to a lesser
extent, higher equities.
Gross
Ceded
DEVELOPMENT OF RESERVES FOR LOSS AND LOSS ADJUSTMENT EXPENSES¹
1.3
€ 7 MN
(13.7)
(1.9)
16.4
Debt securities
Subtotal
65.1
(7.6)
18.3
57.5
Ending balance of discounted
Subtotal
loss reserves²
As of 31 December 2015
(3.9)
61.2
0.3
Other¹
Investments²
adjustment expenses in current year
Changes in reserves for loss and loss
€ BN
Loss and loss adjustment expenses
as of 31 December
incurred in previous years
(2.4)
0.5
Equities
(1.9)
Foreign currency translation
at fair value through income
adjustments and other changes
1.8
(0.5)
1.2
Financial assets and liabilities carried
3
2016
0.4
69 Executive Summary of 2015 Results
80 Life/Health Insurance Operations
86 Asset Management
74 Property-Casualty Insurance Operations 90 Corporate and Other
92 Outlook 2016
98 Balance Sheet Review
105 Liquidity and Funding Resources
110 Reconciliations
CURRENCY ALLOCATION OF ALLIANZ SE'S SENIOR AND SUBORDINATED BONDS
nominal value in € MN
Euro
Non-Euro
Total
Interest expenses on senior bonds increased to € 270 MN
(2014: € 264 MN). This was due to the appreciation of the British Pound
against the Euro. For subordinated bonds, interest expenses
increased to € 560 MN (2014: € 554 MN). This was primarily driven by
slightly higher outstanding volumes on average in 2015.
as of 31 December
2015
Senior and subordinated bonds
16,450
2,347
18,797
€ MN
€ MN
€ MN
as of 31 December
Weighted
average
interest rate²
Interest
expense
67 Business Environment
Carrying
value
18,159
2,209
15,950
Senior and subordinated bonds
SENIOR AND SUBORDINATED BONDS ISSUED OR GUARANTEED BY ALLIANZ SE¹
2014
Nominal
value
Management Discussion and Analysis
C Group Management Report
Annual Report 2015 Allianz Group
1.5
1.5
2.5
6.6
1.5
1
1.5
2
nominal value in € BN
MATURITY STRUCTURE OF ALLIANZ SE'S SENIOR AND SUBORDINATED BONDS AS OF 31 DECEMBER 2015
4
5
6
7
3
%
1.5
1.0
106
Senior bonds Subordinated bonds
2045 perpetual
2043
2027 2028 2041 2042
2025 2026
0.8
2024
2021 2022
2020
2018 2019
2017
3-These do not include affiliates of € 8.9 BN and € 8.9 BN as of 31 December 2015 and 31 December 2014,
respectively.
0.5
2023
1,041
2015
6,716
Money market securities
2014
ISSUANCES AND REDEMPTIONS OF ALLIANZ SE'S SENIOR AND SUBORDINATED BONDS
Money market securities
€ MN
Issuances¹
Redemptions¹
Issuances net of
redemptions
as of 31 December
2015
Senior bonds
Subordinated bonds
1,500
1,000
500
2014
Senior bonds
6
1,276
%
Average
interest rate
Interest
expense
€ MN
€ MN
2015
Carrying value
Funding in currencies other than the Euro enables us to diversify our
investor base or to take advantage of favorable funding costs in those
markets. Funds raised in non-Euro currencies are incorporated in our
general hedging strategy. As of 31 December 2015, approximately
12.5% (2014: 12.2%) of long-term debt was issued or guaranteed by
Allianz SE in currencies other than the Euro.
416
1,500
1,916
1- Based on nominal value.
Subordinated bonds
Annual Report 2015 Allianz Group
as of 31 December
The table below details the long-term debt issuances and redemp-
tions of Allianz SE during 2015 and 2014:
2- Based on nominal value.
Senior bonds
2014
4.5
830
18,673
18,797
Subordinated bonds
Total
560
11,962
12,080
Subordinated bonds
270
6,711
4.0
4.8
Senior bonds
Total
6,653
1 - For further information on Allianz SE debt (issued or guaranteed) as of 31 December 2015, please refer to
notes 23 and 24 to the consolidated financial statements.
Short-term funding sources available are the Medium-Term Note Pro-
gram and the Commercial Paper Program. As of 31 December 2015,
Allianz SE had money market securities outstanding with a carrying
value of € 1,276 MN, a € 235 MN increase in the use of commercial
paper compared to the previous year-end. Interest expenses on money
market securities increased to € 6 MN (2014: € 3 MN) mainly due to a
higher level of volumes outstanding on average in 2015.
Short-term debt funding
MONEY MARKET SECURITIES OF ALLIANZ SE
4.8
818
6,716
18,024
5.3
554
11,371
11,442
3.9
264
18,159
2- This comprises assets of € 0.1 BN and € 0.1 BN and liabilities of € (0.1) BN and € (0.1) BN as of 31 December
2015 and 31 December 2014, respectively.
1- Equity gearing is defined as the ratio of our equity holdings allocated to the shareholder after policyholder
participation and hedges to shareholders' equity plus off-balance sheet reserves less goodwill.
109.2
DE 000 A1Y CQ2 9
PERPETUAL
2013
€ 1.5 BN
XS 085 787 250 0
PERPETUAL
2012
USD 1.0 BN
€ 43 MN
DE 000 AOG NPZ 3
PERPETUAL
2006
€ 0.8 BN
€ 64 MN
XS 021 163 783 9
PERPETUAL
2005
Year of issue
Maturity date
ISIN
Interest expenses
Sum of interest expenses
Interest expenses from external debt
CHF 0.5 BN
not presented in the table
€ 1.5 BN
2015
7/7/2045
DE 000 A14 J9N 8
€ 25 MN
€ 1.4 BN
Total interest expenses from external debt
6.5% bond issued by Allianz Finance II B.V., Amsterdam
Volume
2014
CH 023 483 337 1
Total assets and total liabilities
(net of accrued dividends) of € 3.3 BN, the issuance of a subordinated
bond (€ 1.5 BN), and changes in deferred tax assets/liabilities and
intangibles. The required funds were up by € 1.4 BN to € 29.0 BN, mainly
because of higher aggregate policy reserves in the Life/Health busi-
ness segment, but also due to strong nominal growth in our Property-
Casualty business segment. This was only partly offset by lower
required funds for our Asset Management business segment due to
an amended calculation methodology. At year-end 2015, our eligible
capital surpassed the minimum legally stipulated level by € 29.0 BN.
110 Reconciliations
98 Balance Sheet Review
105 Liquidity and Funding Resources
92 Outlook 2016
74 Property-Casualty Insurance Operations 90 Corporate and Other
80 Life/Health Insurance Operations
86 Asset Management
69 Executive Summary of 2015 Results
67 Business Environment
Management Discussion and Analysis
C Group Management Report
Annual Report 2015 Allianz Group
108
3- The terms of the subordinated bonds do not explicitly provide for early termination rights in favor of the
bondholder.
€ 849 MN
€ 50 MN
€ 799 MN
€ 1.5 BN
2014
PERPETUAL
DE 000 A13 R7Z 7
€ 1.0 BN
2002
PERPETUAL
13/1/2025
€ 72 MN
€ 17 MN
€ 52 MN
€ 527 MN
XS 015 952 750 5
€ 2 MN
€ 53 MN
3. ISSUES REDEEMED IN 2015
Total interest expenses for subordinated bonds
Interest expenses
DE 000 A1R E1Q 3
17/10/2042
2012
€ 1.5 BN
€ 116 MN
DE 000 A1G NAH 1
8/7/2041
€ 270 MN
2011
€ 2.0 BN
€ 50 MN
DE 000 A1H G1L 4
13/3/2043
2013
GBP 0.75 BN
€ 24 MN
DE 000 A1H G1K 6
As of 31 December 2015, Allianz SE had senior and subordinated
bonds in a variety of maturities outstanding, reflecting our focus on
long-term financing. As the cost and availability of external funding
may be negatively affected by general market conditions or by matters
specific to the financial services industry or the Allianz Group, we
seek to reduce refinancing risk by actively steering the maturity profile
of our funding structure.
€ 1.5 BN
2009
22/7/2019
DE 000 A1A KHB 8
€ 74 MN
€ 86 MN
€ 1.5 BN
14/2/2022
DE 000 A1G ORU 9
€ 54 MN
€ 0.75 BN
2013
13/3/2028
2012
1- For further information on Allianz SE debt (issued or guaranteed) as of 31 December 2015, please refer
to notes 23 and 24 to the consolidated financial statements.
2- Senior bonds provide for early termination rights in case of non-payment of amounts due under the bond
(interest and principal) as well as in case of insolvency.
2.241% bond issued by Allianz SE
Volume
4.75% bond issued by Allianz SE
Volume
Year of issue
Maturity date
ISIN
Interest expenses
3.25% bond issued by Allianz SE
Interest expenses
Volume
ISIN
Interest expenses
3.375% bond issued by Allianz SE
Volume
Year of issue
Maturity date
ISIN
Year of issue
Maturity date
As of 31 December 2015, total assets amounted to € 848.9 BN and total
liabilities were € 782.8 BN. Compared to year-end 2014, total assets
and total liabilities increased by € 43.2 BN and € 40.8 BN, respectively.
ISIN
Volume
Year of issue
Maturity date
ISIN
Interest expenses
4.375% bond issued by Allianz Finance II B.V., Amsterdam
Volume
Year of issue
Year of issue
Maturity date
Maturity date
Interest expenses
5.375% bond issued by Allianz Finance II B.V., Amsterdam
Volume
Year of issue
Maturity date
ISIN
Interest expenses
5.5% bond issued by Allianz SE
ISIN
1-Loans and advances to banks and customers, held-to-maturity investments and real estate held for
investment are stated at amortized cost. Investments in associates and joint ventures are stated at either
amortized cost or equity, depending on - among other factors - our ownership percentage.
The following section mainly focuses on our financial invest-
ments in debt instruments, equities, real estate, and cash, since these
reflect the major developments in our asset base.
Our direct gross exposure to equities increased by € 4.5 BN to
€ 45.7 BN. The growth in this exposure was mainly driven by new
investments. Our equity gearing¹ remained almost unchanged at 24%
(31 December 2014: 25%) as the increase in this exposure was accom-
panied by increases in shareholders' equity and hedging of this addi-
tional exposure against share price declines.
THE PROPERTY-CASUALTY BUSINESS SEGMENT
ASSETS AND LIABILITIES OF
Our non-operating impairments of investments (net) increased
by € 72 MN - largely driven by impairments of equities – to € 268 MN.
Non-operating income from financial assets and liabilities carried
at fair value through income (net) improved by € 84 MN to a loss of
€ 219 MN. This mainly stemmed from capital hedging activities related
to our U.S. life insurance business.
Our non-operating investment income (net) more than doubled from
€ 312 MN to € 724 MN. This was almost entirely driven by higher non-
operating realized gains, which expanded by € 399 MN to € 1,211 MN
mainly as a result of higher realizations on equities.
Non-operating investment result
Investment expenses rose by € 132 MN to € 1,094 MN. This was
mainly due to higher management fees from the increased asset
base.
Our operating impairments of investments (net) increased by
€ 561 MN to € 1,258 MN. The greatest part of these impairments was
related to equities and was consistent with unfavorable develop-
ments in the respective equity markets, in particular in the third
quarter of 2015.
Operating income from financial assets and liabilities carried at
fair value through income (net) deteriorated by € 788 MN to a loss of
€ 2,089 MN. This was mainly due to losses from the net of foreign cur-
rency translation effects and financial derivatives that are used to
protect against equity and foreign currency fluctuations, as well as to
manage duration and other interest rate-related exposures.
Interest and similar income (net)1 was up by € 1,005 MN to
€ 22,033 MN, reflecting almost equal increases in income from both
debt securities and equities. The former increase benefited from
positive foreign exchange effects from our exposures denominated
in U.S. Dollar, held domestically by our U.S. life insurance business.
Operating realized gains and losses (net) more than doubled
from € 3,205 MN to € 6,726 MN. This was driven by higher realizations
on both debt securities and equities.
Our operating investment income (net) went up by € 3,045 MN to
€ 24,319 MN, as increases in realized gains as well as in interest and
similar income (net)¹ more than offset negative developments in its
other components.
Operating investment result
110 Reconciliations
105 Liquidity and Funding Resources
98 Balance Sheet Review
92 Outlook 2016
3,456
Non-operating impairments
of investments (net)
Subtotal
Total investment income (net)
1 - Net of interest expenses (excluding interest expenses from external debt).
Our total investment income (net) increased by € 3,456 MN - or 16.0%
- to € 25,042 MN. This was largely due to higher realized gains and the
increase in interest and similar income (net)¹, partly offset by
increases in operating losses from financial assets and liabilities car-
ried at fair value through income (net) and impairments (net).
100
Property-Casualty assets
Annual Report 2015 Allianz Group
C Group Management Report
Management Discussion and Analysis
67 Business Environment
69 Executive Summary of 2015 Results
80 Life/Health Insurance Operations
86 Asset Management
74 Property-Casualty Insurance Operations 90 Corporate and Other
1- Net of interest expenses (excluding interest expenses from external debt).
21,586
The Property-Casualty asset base remained almost unchanged at
€ 110.1 BN (31 December 2014: € 109.2 BN). A slight increase in debt
securities was partly offset by a decline in loans and advances to
banks and customers.
€ BN
110.1
15.0
13.8
93.8
95.8
9.5
9.2
5.6
5.0
72.4
74.8
6.3
6.7
0.5
0.5
Loans and advances to banks and customers
Property-Casualty asset base
Subtotal
as of 31 December
2015
2014
Financial assets and liabilities carried
at fair value through income
0.4
0.4
COMPOSITION OF ASSET BASE - FAIR VALUES¹
0.1
Equities
Debt securities
Other²
Subtotal
Investments³
Equities
Debt securities
Cash and cash pool assets4
Other
0.1
25,042
411
312
Operating investment result
Interest and similar income (net)1
Operating income from financial
assets and liabilities carried at fair
value through income (net)
Operating realized gains/losses (net)
€ MN
INVESTMENT INCOME (NET)
INVESTMENT RESULT
Our exposure to asset-backed securities (ABS) decreased by
€ 1.3 BN to € 21.6 BN. This exposure still accounted for 4% of our fixed
income portfolio. The largest part of our ABS portfolio was related to
mortgage-backed securities (MBS). MBS issued by U.S. agencies, which
are backed by the U.S. government, accounted for 17% of the ABS port-
folio. Overall, 98% of the ABS portfolio received an investment grade
rating, with 88% rated "AA" or better.
Our exposure to bank securities - including exposure to subordi-
nated securities in banks - decreased by € 1.1 BN to € 31.3 BN. This
exposure still represented 6% of our fixed-income portfolio. The expo-
sure to subordinated securities in banks decreased from € 5.3 BN to
€ 4.6 BN.
Our corporate bonds exposure increased by € 19.8 BN to € 164.9 BN —
in relative terms, three percentage points to 29%. This was primarily
driven by new investments. The slight regional shift from Eurozone
corporate bonds to North American ones, as reported in 2014, contin-
ued in 2015.
Our covered bond exposure decreased by € 9.0 BN to € 98.7 BN,
representing 17% (31 December 2014: 20%) of our fixed-income port-
folio. This was mainly due to matured bonds which have not been
reinvested within this asset class. 42% (31 December 2014: 44%) of this
portfolio was German Pfandbriefe, backed by either public-sector
loans or mortgage loans. Almost unchanged, another 16%, 10% and
8% of the covered bonds were attributable to France, Spain and Italy,
respectively. Covered bonds provide a cushion against real estate
price deterioration and payment defaults through minimum
required security buffers and overcollateralization.
Our government bond exposure in Portugal remained limited, with
small unrealized gains. We continued to have virtually no exposure
to Greek or Ukrainian government bonds. The respective exposure to
Russia was relatively small in the context of our overall portfolio and
the greatest part of this exposure was denominated in U.S. Dollar.
99
9
2- Excluding self-originated German private retail mortgage loans. For 2%, no ratings were available.
Annual Report 2015 Allianz Group
Our government bond exposure was up by € 8.3 BN to € 217.5 BN,
still representing 38% of our fixed income portfolio. The increase in
absolute terms was mainly driven by new investments. The alloca-
tion of our government and government-related direct bond expo-
sure showed marginal changes in the geographical portfolio weight-
ings, all of which were less than two percentage points. Our sovereign
debt exposure in Italy and Spain equaled 5.2% and 1.7% of our fixed
income portfolio, respectively. The corresponding unrealized gains
(gross) amounted to € 5,506 MN in Italy and to € 679 MN in Spain.
The allocation of our well-diversified fixed income portfolio showed
a slight increase in the share of corporate bonds and a minor reduc-
tion in the portion of covered bonds while the other components
remained virtually unchanged. About 94% of this portfolio of debt
instruments was invested in investment-grade bonds and loans.²
Compared to year-end 2014, our investment portfolio grew by € 23.7 BN
to € 638.3 BN as of 31 December 2015, with no relative change in our
overall asset allocation despite some major realizations.
Debt instruments 89 [89]
Our direct exposure to real estate was up by € 0.6 BN to € 12.0 BN
mainly due to new investments.
Our cash and other investments increased by € 0.3 BN to € 12.5 BN.
Our exposure to debt instruments grew by € 18.3 BN – mainly
driven by new investments - and amounted to € 568.1 BN. This expo-
sure still represented 89% of our total investment portfolio.
FIXED INCOME PORTFOLIO
Total fixed-income portfolio as of 31 December 2015: € 568.1 BN
[as of 31 December 2014: € 549.8 BN] in %
Banks 6[6]
Other 10 [10]
2015
Government bonds 38 [38]
Covered bonds 17 [20]
ASSET ALLOCATION
Investment portfolio as of 31 December 2015: € 638.3 BN
[as of 31 December 2014: € 614.6 BN] in %
Real estate 2 [2]
Equities 7[7]
Cash/Other 2 [2]
Other corporate bonds 29 [26]
2014
Delta
22,033
24,319
21,274
3,045
Non-operating investment result
Non-operating income from
financial assets and liabilities carried
at fair value through income (net)
Non-operating realized
gains/losses (net)
(219)
(303)
Subtotal
84
812
399
(268)
(197)
(72)
724
1,211
STRUCTURE OF INVESTMENTS - PORTFOLIO OVERVIEW
The following portfolio overview covers the Allianz Group assets held
for investment, which are mainly driven by our insurance businesses.
(132)
(1,094)
21,028
1,005
(2,089)
(1,301)
(788)
6,726
(961)
3,205
Operating impairments
of investments (net)
(1,258)
(697)
(561)
Investment expenses
3,521
Long-term debt funding
2.4
No expiry date for
Conditional Capital
2010/2014 (issuance in
case option or conversion
rights are exercised)
As of 31 December 2015
(3.4)
(3.4)
Other changes
3.2
(0.2)
3.4
adjustments
Foreign currency translation
1.2
67.9
0.3
Changes in fund value
10.3
5.9
4.4
Net premium inflows (outflows)
94.6
31.9
62.7
contracts
insurance investment
contracts
0.8
Unit-linked
105.9
1 - Financial assets for unit-linked contracts represent assets owned by, and managed on behalf of, policy-
holders of the Allianz Group, with all appreciation and depreciation in these assets accruing to the benefit
of policyholders. As a result, the value of financial assets for unit-linked contracts in our balance sheet
corresponds to the value of financial liabilities for unit-linked contracts. The International Financial Report-
ing Standards (IFRS) require the classification of any contract written by an insurance company either as
an insurance contract or as an investment contract, depending on whether an insurance component is
included. This requirement also applies to unit-linked products. In contrast to unit-linked investment
contracts, unit-linked insurance contracts include coverage for significant mortality or morbidity risk.
€ BN
COMPOSITION OF ASSET BASE - FAIR VALUES
103
Annual Report 2015 Allianz Group
2- For further information on the development of these assets, please refer to Asset Management.
1- Based on the closing rates on the respective balance sheet dates.
The Corporate and Other asset base increased from € 44.7 BN to
€ 47.5 BN. A decrease in loans and advances to banks and customers
was more than offset by an increase in debt securities and lower
negative cash and cash pool asset positions.
Corporate and Other assets
THE CORPORATE AND OTHER BUSINESS SEGMENT
ASSETS AND LIABILITIES OF
38.0
€ 0.5 BN to € 2.9 BN.
Asset Management liabilities
to € 2.2 BN.
Driven by a decrease in its largest component, cash and cash
pool assets, the business segment's asset base was down by € 0.4 BN
The Asset Management business segment's results are derived pri-
marily from asset management for third-party investors and the
Allianz Group's insurance operations.² In this section, we refer only
to the business segment's own assets.
Asset Management assets
THE ASSET MANAGEMENT BUSINESS SEGMENT
ASSETS AND LIABILITIES OF
Life/Health reserves for insurance and investment contracts
increased by € 22.7 BN - or 5.1% – to € 472.0 BN in 2015. The € 16.6 BN
growth in aggregate policy reserves and other reserves was mainly
driven by our operations in Germany (€ 8.3 BN) and the U.S. (€ 5.4 BN
before currency effects). Reserves for premium refund decreased by
€ 3.5 BN, due to lower unrealized gains to be shared with policyholders.
Currency impacts of € 9.6 BN resulted mainly from the stronger
U.S. Dollar (€ 7.8 BN) and Swiss Franc (€ 1.3 BN).¹
Life/Health liabilities
Financial assets for unit-linked contracts increased by € 11.3 BN - or
12.0% – to € 105.9 BN. Unit-linked insurance contracts were up by
€ 5.2 BN to € 67.9 BN, due to premium inflows exceeding outflows by
€ 4.4 BN and the stronger U.S. Dollar (€ 2.8 BN). This was partly offset
by fund losses of € 0.6 BN in the U.S. as well as transfers to the general
account in France (€ (0.9) BN) and the Netherlands (€ (0.5) BN). Unit-
linked investment contracts increased by € 6.1 BN to € 38.0 BN, due to
net premium inflows of € 5.9 BN and an € 0.3 BN increase in fund val-
ues. Negative foreign currency translation adjustments of € 0.2 BN
were mainly attributable to the weaker Turkish Lira.¹
Liabilities in our Asset Management business segment increased by
as of 31 December
Unit-linked
As of 1 January 2015
Loans and advances to banks and customers
Financial assets for unit-linked contracts4
Life/Health asset base
382.4
398.3
Subtotal
10.4
10.8
8.0
7.7
331.8
343.8
95.1
32.2
Cash and cash pool assets³
As of 31 December 2015, the business segment's gross reserves for
loss and loss adjustment expenses and discounted loss reserves
amounted to € 65.1 BN - an increase of € 2.5 BN compared to year-end
2014. On a net basis, our reserves – including discounted loss reserves
- increased from € 55.6 BN to € 57.5 BN. Foreign currency translation
effects and other changes contributed € 1.2 BN to this increase on a
net basis.
1 - For further information about changes in the reserves for loss and loss adjustment expenses for the
Property-Casualty business segment, please refer to note 19 to the consolidated financial statements.
2- Although discounted loss reserves have been reclassified to "Reserves for insurance and investment
contracts" in the balance sheet in 2013, the underlying business development of these Property-Casualty
reserves is still considered in the loss and loss adjustment expenses and in the loss ratio, and is therefore
included in the development of the reserves above.
(3.0)
(2.4)
(6.8)
(7.5)
2.0
2.7
Please refer to > page 35 regarding authorizations to issue and
repurchase shares.
36.0
Total
91.4
94.6
€ BN
FINANCIAL ASSETS FOR UNIT-LINKED CONTRACTS1
110 Reconciliations
105 Liquidity and Funding Resources
98 Balance Sheet Review
92 Outlook 2016
90 Corporate and Other
86 Asset Management
80 Life/Health Insurance Operations
74 Property-Casualty Insurance Operations
105.9
69 Executive Summary of 2015 Results
Management Discussion and Analysis
C Group Management Report
ABS within the Life/Health business segment asset base remained
almost flat at € 16.5 BN (31 December 2014: € 16.9 BN) and represented
a rather unchanged 2.8% of the business segment's asset base.
Annual Report 2015 Allianz Group
102
4- Financial assets for unit-linked contracts represent assets owned by, and managed on behalf of, policy-
holders of the Allianz Group, with all appreciation and depreciation in these assets accruing to the benefit
of policyholders. As a result, the value of financial assets for unit-linked contracts in our balance sheet
corresponds to the value of financial liabilities for unit-linked contracts. The International Financial Report-
ing Standards (IFRS) require the classification of any contract written by an insurance company either as
an insurance contract or as an investment contract, depending on whether an insurance component is
included. This requirement also applies to unit-linked products. In contrast to unit-linked investment
contracts, unit-linked insurance contracts include coverage for significant mortality or morbidity risk.
3- Including cash and cash equivalents, as stated in our business segment balance sheet, of € 8.5 BN and
€ 7.6 BN and receivables from cash pooling amounting to € 2.5 BN and € 3.1 BN, net of liabilities from
securities lending and derivatives of € (3.2) BN and € (2.6) BN as well as liabilities from cash pooling of
€ (0.0) BN and € (0.0) BN as of 31 December 2015 and 31 December 2014, respectively.
1- This comprises assets of € 1.4 BN and € 1.4 BN and liabilities (including the market value liability option)
of € (8.8) BN and € (8.2) BN as of 31 December 2015 and 31 December 2014, respectively.
2-These do not include affiliates of € 0.2 BN and € 0.2 BN as of 31 December 2015 and 31 December 2014,
respectively.
565.4
596.9
67 Business Environment
Financial assets and liabilities carried
Other
Equities
We receive a large part of premiums before payments of claims
or policy benefits are required, generating solid cash flows from our
insurance operations. This allows us to invest the funds in the inter-
im to create investment income.
mary and reinsurance premiums received, reinsurance receivables
collected, investment income, and proceeds generated from the
maturity or sale of investments. These funds are mainly used to pay
claims arising from the Property-Casualty insurance business and
related expenses, life policy benefits, surrenders and cancellations,
acquisition costs and operating costs.
The major sources of liquidity for our operational activities are pri- and funding of Allianz SE
Liquidity management
The major sources of liquidity in our Banking operations include cus-
tomer deposits, interbank loans and interest and similar income from
our lending transactions. The most important uses of funds are the
issuance of new loans and investments in fixed income securities. The
liquidity of our Banking operations is largely dependent on the ability
of our private and corporate customers to meet their payment obliga-
tions arising from loans and other outstanding commitments. Our
ability to retain our customers' deposits is equally important to us.
BANKING OPERATIONS
Within our Asset Management operations, the most important sour-
ces of liquidity are fees generated from asset management activities.
These are primarily used to cover operating expenses.
ASSET MANAGEMENT OPERATIONS
INSURANCE OPERATIONS
of our operating entities
Our insurance operations also carry a high proportion of liquid
investments, which can be converted into cash to pay for claims.
Generally, our investments in fixed income securities are sequenced
to mature when funds are expected to be needed.
Liquidity management
Organization
Liquidity and Funding Resources
110 Reconciliations
105 Liquidity and Funding Resources
98 Balance Sheet Review
92 Outlook 2016
74 Property-Casualty Insurance Operations 90 Corporate and Other
86 Asset Management
80 Life/Health Insurance Operations
69 Executive Summary of 2015 Results
The Allianz Group's liquidity management is based on policies and
guidelines approved by the Allianz SE Board of Management. Allianz SE
and each of the operating entities are responsible for managing their
respective liquidity positions, while Allianz SE provides central liquid-
ity pooling for the Group. Capital allocation is steered by Allianz SE for
the entire Group. This structure allows the efficient use of liquidity and
capital resources and for Allianz SE to achieve the desired liquidity
and capitalization levels for the Group and its operating units.
67 Business Environment
The overall liquidity of our insurance operations depends on
capital market developments, interest rate levels, and our ability to
realize the market value of our investment portfolio to meet insurance
claims and policyholder benefits. Other factors affecting the liquidity
of our Property-Casualty insurance operations include the timing,
frequency, and severity of losses underlying our policies and policy
renewal rates. In our Life operations, liquidity needs are generally
influenced by trends in actual mortality rates compared to the
assumptions underlying our life insurance reserves. Market returns,
crediting rates and the behavior of our life insurance clients - for
example regarding the level of surrenders and withdrawals - can also
have significant impacts.
LIQUIDITY RESOURCES AND USES
6 May 2019
(issuance of bonds)
at fair value through income
6 May 2019
6 May 2019
EXPIRY DATE OF
THE AUTHORIZATION
€ 250,000,000
(97,656,250 shares)
€ 10,000,000,000
(nominal bond value)
€ 550,000,000
(214,843,750 shares)
€ 13,720,000
(5,359,375 shares)
NOMINAL AMOUNT
Authorization to issue
bonds carrying conversion
and/or option rights
Conditional Capital
The responsibility for managing the funding needs of the Group,
maximizing access to liquidity sources and minimizing borrowing
costs lies with Allianz SE. We therefore comment on the liquidity and
funding resources of Allianz SE in the following sections. Restrictions
on the transferability of capital within the Group result mainly from
the capital maintenance rules under applicable company laws and
the regulatory solvency capital requirements for regulated group
companies.
Authorized Capital 2014/11
CAPITAL AUTHORIZATION
CAPITAL AUTHORIZATIONS OF ALLIANZ SE
Allianz SE has the option to increase its equity capital base
according to authorizations provided by our shareholders. The fol-
lowing table outlines Allianz SE's capital authorizations as of
31 December 2015:
As of 31 December 2015, the issued capital registered at the Commer-
cial Register was € 1,169,920,000. This was divided into 457,000,000
registered shares with restricted transferability. As of 31 December
2015, the Allianz Group held 2,176,362 (2014: 2,751,961) own shares.
Equity funding
Allianz SE's access to external funds depends on various factors such
as capital market conditions, access to credit facilities, credit ratings
and credit capacity. The financial resources available to Allianz SE in
the capital markets for short-, mid- and long-term funding needs are
described below. In general, mid- to long-term financing is covered
by issuing senior or subordinated bonds or ordinary shares.
FUNDING SOURCES
105
Annual Report 2015 Allianz Group
Allianz SE ensures adequate access to liquidity and capital for our
operating subsidiaries. The main sources of liquidity available for
Allianz SE are dividends received from subsidiaries and funding pro-
vided by capital markets. Liquidity resources are defined as readily
available assets - specifically cash, money market investments, and
highly liquid government bonds. Our funds are primarily used for
paying interest expenses on our debt funding, operating costs, internal
and external growth investments, and dividends to our shareholders.
Authorized Capital 2014/1
Management Discussion and Analysis
2010/2014
Annual Report 2015 Allianz Group
28.4
2.7
(0.1)
(0.5)
0.2
0.1
2014
(0.1)
(0.6)
0.1
0.3
(4.1)
2015
Loans and advances to banks and customers
Subtotal
Other
Cash and cash pool assets³
Equities
Investments²
Subtotal
Debt securities
C Group Management Report
Other¹
Corporate and Other asset base
0.3
Debt securities
31.7
2.9
1- This net effect also includes the redemption of a subordinated bond of € 400 MN issued by Allianz
France S.A., which is not listed separately in the bonds table shown on page 108.
104
In comparison to year-end 2014, other liabilities decreased by € 3.8 BN
to € 24.3 BN, resulting from lower liabilities from cash pooling and
other provisions mainly related to pension obligations. Subordinated
liabilities increased by € 0.2 BN to € 12.2 BN. This was mainly related to
the net effect of the issuance and redemptions of subordinated
bonds.¹ Certificated liabilities decreased by € 0.2 BN to € 12.1 BN.²
2- For further information on Allianz SE debt as of 31 December 2015, please refer to notes 23 and 24 to the
consolidated financial statements.
ABS within the Corporate and Other business segment asset base
decreased by € 0.3 BN to € 1.7 BN and in relative terms from 4.5% to 3.7%.
Please refer to the Risk and Opportunity Report from > page 112
onwards for a description of the main concentrations of risk and
other relevant risk positions.
The Allianz Group has also entered into contractual relation-
ships with various types of structured entities. They have been
designed in such a way that their relevant activities are directed by
means of contractual arrangements instead of voting or similar
rights. Typically, structured entities have been set up in connection
with asset-backed financings and certain investment fund products.
For more details on our involvement with structured entities, please
refer to note 45 to the consolidated financial statements.
The Allianz Group enters into various commitments including
loan and leasing commitments, purchase obligations and other com-
mitments. Please refer to note 47 to the consolidated financial state-
ments for more details.
In the normal course of business, the Allianz Group may enter into
arrangements that do not lead to the recognition of assets and liabil-
ities in the consolidated financial statements under IFRS. Since the
Allianz Group does not rely on off-balance sheet arrangements as a
significant source of revenue or financing, our off-balance sheet
exposure to loss is immaterial relative to our financial position.
Off-balance sheet arrangements
Corporate and Other liabilities
2- These do not include affiliates of € 92.4 BN and €77.2 BN as of 31 December 2015 and 31 December 2014,
respectively. The increase was triggered by the streamlining of the legal corporate structure in Italy,
which led to the move of respective opposite consolidation effects from business segment level to group
level. For further information on the streamlining, please refer to page 57.
3- Including cash and cash equivalents, as stated in our business segment balance sheet, of € 2.0 BN and
€ 2.0 BN and receivables from cash pooling amounting to € 1.6 BN and € 1.7 BN, net of liabilities from
securities lending and derivatives of € (0.2) BN and € (0.0) BN as well as liabilities from cash pooling of
€ (6.2) BN and € (7.9) BN as of 31 December 2015 and 31 December 2014, respectively.
32.1
(2.9)
15.6
47.5
27.3
17.5
44.7
1 - This comprises assets of € 0.2 BN and € 0.2 BN and liabilities of € (0.8) BN and € (0.6) BN as of 31 December
2015 and 31 December 2014, respectively.
0.3
2014
Property-Casualty
51,597
48,322
Property-Casualty
3.0
2.1
Gross premiums written
Life/Health
3.7
Life/Health
19.5
(0.4)
(0.3)
18.6
66,903
Statutory premiums
(1.4)
2.4
(0.7)
0.3
4.2
(0.6)
67,331
COMPOSITION OF TOTAL REVENUES
Asset Management
(11.4)
0.0
12.8
4.2
1.4
4.5
0.0
3.7
€ MN
2015
2014
Allianz Group
(2.1)
Corporate and Other
Asset Management
Net interest income¹
(2.5)
Income from financial assets and liabilities
carried at fair value through income (net)
(8
Other income
4
56
Corporate and Other
thereof: Total revenues (Banking)
(3)
577
consisting of:
Interest and similar income
546
590
Income from financial assets and liabilities
carried at fair value through income (net)²
0.0
Fee and commission income
556
(8.5)
(5)
6,488
0.0
(10.8)
Asset Management
Corporate and Other
(2.2)
3.2
0.0
1.0
6,380
Operating revenues
6,388
Allianz Group
10.6
0.5
(0.8)
10.4
consisting of:
Net fee and commission income
6,479
(4.9)
6,120
6.8
20141
Underwriting risk
20142
Business risk
Operational risk
Diversification
Total
20141
20142
20142
20141
20141
20142
20141
20142
Property-Casualty
6,050
2,374
Life/Health
20142
18,569
20141
20141
16
Our partial internal risk capital model expresses the potential "worst-
case" amount in economic value that we might lose at a certain con-
fidence level. However, there is statistically a low probability of 0.5%
that actual losses could exceed this threshold at Group level in the
course of one year.
We use model and scenario parameters derived from historical
data, where available, to characterize future possible risk events. If
future market conditions differ substantially from the past, for exam-
ple in an unprecedented crisis, our VaR approach may be too conser-
vative or too liberal in ways that are too difficult to predict. In order to
mitigate reliance on historical data, we complement our VaR analysis
with stress testing. Our ability to back-test the model's accuracy is
limited because of the high confidence level of 99.5%, the one-year
holding period as well as the fact that for some insurance risk events
- such as natural catastrophes - only limited data are available.
Furthermore, as historical data is used where possible to cali-
brate the model, historical data cannot be used for validation. Instead,
we validate the model and parameters through sensitivity analyses,
independent internal peer reviews and, where appropriate, external
reviews by independent consulting firms, focusing on methods for
selecting parameters and control processes. To ensure proper valida-
tion we established an Independent Validation Unit (IVU) within
Group Risk responsible for validating our partial internal model
within a comprehensive model validation process. Overall, we believe
that our validation efforts are effective and that the model adequately
assesses the risks to which we are exposed.
4-2014 risk profile figures recalculated based on model changes in 2015, as described in Model changes in
2015 from page 118.
Annual Report 2015 - Allianz Group
117
As described in a previous section, insurance liability values in
the risk calculation are derived from replicating portfolios of standard
financial market instruments in order to allow for effective risk man-
agement. This replication is subject to the set of available replicating
instruments and might, therefore, be too simple or too restrictive to
capture all factors affecting the change in value of liabilities. As with
other model components, the replications are subject to independent
validation and to suitability assessments as well as to stringent data
and process quality controls. Therefore, we believe that the liabilities
are adequately represented by the replicating portfolios.
20142
Since the partial internal risk capital model takes into account
the change in the economic fair value of our assets and liabilities, it is
crucial to estimate the market value of each item accurately. For some
assets and liabilities it may be difficult, if not impossible - notably in
distressed financial markets - to obtain either a current market price
or to apply a meaningful mark-to-market approach. For such assets
we apply a mark-to-model approach. Non-standardized derivative
instruments – such as derivatives embedded in structured financial
products - are represented by the most comparable standard deriva-
MODEL CHANGES IN 2015
In 2015, our partial internal model has been adjusted, based on both
regulatory developments and feedback received during the ongoing
consultations with regulators as part of our internal model approval
process. For the sake of clarity, all model changes and the resulting
changes to our risk profile are presented jointly within this section,
based on data as of 31 December 2014. This also comprises changes
in the model scope, for example the third-country equivalence treat-
ment of AZ Life, in order to reflect the risk profile according to the new
regulatory binding capital requirement, effective from 1 January 2016.
In all subsequent sections the figures after the model changes
will form the basis for the movement analysis of our risk profile in 2015.
ALLIANZ GROUP: IMPACT OF MODEL CHANGE, ALLOCATED RISK ACCORDING TO RISK PROFILE (TOTAL PORTFOLIO BEFORE NON-CONTROLLING INTERESTS)
€ MN
Market risk
Credit risk
as of 31 December
tive types or by means of sensitivities, because the volume of non-
standard instruments is not material at either the local or Group
level. For some of our liabilities, the accuracy of their values depends
on the quality of the actuarial cash flow estimates. Despite these
limitations, we believe the estimated fair values are appropriately
assessed.
14,290 7,817
2,379 9,619 10,109
917
5,408 1,626 1,425 4,404
987
3,646
4,634
5,146
707 (883) (784)
5,669 (18,291) (14,428)
3,417
3,354
42,607 39,139
Tax
Total Group
(4,180) (3,826)
5,321
38,427 35,313
2-2014 risk profile figures recalculated based on new model.
The change in model scope to reflect our risk profile according to the
Solvency II capital requirements was the most significant driver for
changes in the modeling of our risk capital. Thereof, the change to
include Az Life on the basis of third-country equivalence treatment
was the main contributor, with the main impact on market and cred-
it risks. In addition, Allianz Benelux and Allianz Compania de Seguros
were switched from the partial internal model to the standard model.
Finally, we included some smaller entities (Turkey, Taiwan and Brazil)
based on their standard model figures while they had previously been
taken into account by book value deduction.
Otherwise, changes to our partial internal model focused on the
following risk categories:
Market risk
Market risk was significantly affected by the change in model scope.
In addition, the modelling of how impairments within special funds
are treated was updated to better reflect the management of special
funds. Furthermore, the assumptions on dynamic lapses were
adjusted, based on updated lapse evaluations, to better reflect policy-
holder behavior in a low interest rate environment. Also the modelling
of cash flows related to Surplus funds under emergency scenarios
was enhanced to better reflect the Surplus fund value. Finally, there
are regulatory required add-ons on Group level allocated to segments
and risk types. The different model changes decreased the total market
risk by € 5.0 BN to € 23.1 BN.
118
0.7
3.2
1-2014 risk profile figures as reported previously.
645
67
11,601
11,311
1,797
2,035
Asset Management
521
146
128
26
668
2,166 (7,246) (6,751) 13,582 14,941
2,110 (10,161) (6,893) 24,291 19,986
686
1,317
857
Corporate and Other
2,891
2,663
699
701
65
Total Group
28,102
23,150
11,018
8,514
Life/Health
10
1,741
513
(115)
Definitions
112
1- From a formalistic perspective, the German Supervisory Authority deems our model to be "partial" because
it does not cover all of our operations: some of our smaller operations report under the standard model
and others under the deduction and aggregation approach.
In any case, the Solvency II regime will lead to higher volatility
in solvency ratios compared to Solvency I, due to the market value
balance sheet approach.
With the approval of our partial internal model¹ in November 2015,
the uncertainty about our future Solvency II capital requirements has
been significantly reduced. Nevertheless, some uncertainty about the
future capitalization requirements of Allianz remains, since the
future capital requirements applicable for Global Systemically
Important Insurers (so-called G-SIIs) are still not finalized. Finally, the
potential for a multiplicity of different regulatory regimes, capital
standards, and reporting requirements will increase operational
complexity and costs.
Regulatory developments
Over the past years, Allianz Group and its operating entities have
developed operational contingency plans for various crisis scenarios.
We continue to conduct scenario analysis on a regular basis to bolster
our financial and operational resilience to strong shock scenarios. In
addition, we continue to optimize our product design and pricing in
the Life/Health business segment with respect to guarantees and sur-
render conditions. Continuous monitoring as well as prudent risk
positions and contingency planning remain priorities for our man-
agement.
(134)
The persisting geopolitical risks, including the conflicts in the
Middle East, are manageable for the Allianz Group, since our direct
exposure to the affected regions remains relatively small in the context
of our overall investment portfolio. Nevertheless, we are monitoring
these developments, since a significant deterioration may lead to
spill-over effects on the global financial markets, triggering negative
impacts on our business and risk profile.
Financial markets and operating environment
The European Central Bank is continuing its expansive monetary
policy in order to fight low inflation rates and stimulate the Eurozone
economy. As a result, financial markets are characterized by histori-
cally low interest rates and risk premia, prompting investors to look
for higher-yielding – and potentially higher-risk – investments. In
addition to sustained low interest rates, the challenges of implement-
ing long-term structural reforms in key Eurozone countries and the
uncertainty about the future path of monetary policy may lead to
continued market volatility. This could be accompanied by a flight to
In the following paragraphs we provide an overview of major
developments and risks that may affect Allianz's portfolio.
Allianz's risk profile is driven by our strategic risk appetite and
steered by the risk management practices and limits which are
described later in this report. The risk profile and relative contribu-
tions have changed in 2015, due to changes in the market environ-
ment, management actions, and model changes driven by regulatory
developments and feedback Allianz received during the internal
model approval process. These model changes are described in the
section Model changes in 2015.
Property-Casualty premium and reserve risks resulting from
natural and man-made catastrophes as well as from claims
uncertainty.
Credit and credit spread risks driven by assets backing long-term
savings products;
Market risk, especially interest rate risk due to the duration
mismatch between assets and liabilities for long-term savings
products as well as equity risk, which we take to benefit from the
expected risk premium;
-
The Allianz Group is exposed to a variety of risks through its core
insurance and asset management activities. These include market,
credit, insurance, operational, business, and strategic risks. The three
largest risks in terms of their contribution to Allianz's risk profile are:
quality, combined with falling equity and bond prices due to rising
spread levels, even in the face of potentially lower interest rates. Also,
possible asset bubbles (as observed in the Chinese equity market)
might spill over to other markets, contributing to increasing volatility.
Therefore, we continue to closely monitor the political and financial
developments in the Eurozone - such as in Greece during 2015 - in
order to manage our overall risk profile to specific event risks.
RISK PROFILE AND MARKET ENVIRONMENT
Definitions
(6,942)
(4,915)
2014
(4,912)
Administrative and other expenses²
(1,695)
(1,610)
Acquisition costs incurred³
(5,262)
(1,516)
(6,134)
(5,203)
Limitations
1,904
Amortization, unlocking and true-up of DAC²
(2,073)
Administrative and other expenses²
(1,695)
(1,610)
Acquisition and administrative expenses
Capitalization of DAC²
Acquisition expenses and commissions²
and management assessment
-The Allianz Group is well capitalized and its solvency ratios are resilient.
(6,922)
4
4- Excluding one-off effects from pension revaluation. For further details, please refer to note 6 to the
consolidated financial statements.
3- As per notes to the consolidated financial statements.
1- Prior year figures changed in order to reflect the roll out of profit source reporting to Malaysia.
2- As per Group Management Report.
on reinsurance business ceded
(1,707)
4
1- Prior year figures changed in order to reflect the roll out of profit source reporting to Malaysia.
2- As per Group Management Report.
Administrative and other expenses (net) 3,4
on reinsurance business ceded
Administrative expenses
(169)
(224)
Scope
112
118
Scope
Commissions and profit received
Allianz risk profile
3-As per notes to the consolidated financial statements.
(5,860)
– The Allianz risk management approach is designed to add value by focusing
on both risk and return.
Risk and Opportunity Report
111
Annual Report 2015 Allianz Group
statement.
Policyholder participation is included within change in reserves
for insurance and investment contracts (net) in the group income
Both capitalization and amortization is included in the line item
premiums earned (net) in the group income statement.
URR amortized: Total amount of URR amortized includes scheduled
URR amortization, true-up and unlocking.
14
URR capitalized: Capitalization amount of unearned revenue
reserves (URR) and deferred profit liabilities (DPL) for FAS 97 LP.
88
115
Acquisition and administrative expenses (net)3,4
on reinsurance business ceded
Administrative expenses
(1,599)
14
4-Excluding one-off effects from pension revaluation. For further details, please refer to note 6 to the
consolidated financial statements.
Impact of change in Deferred Acquisition Costs (DAC)
Impact of change in DAC includes effects of change in DAC, unearned
revenue reserves (URR) and value of business acquired (VOBA) and is
the net impact of the deferral and amortization of acquisition costs
and front-end loadings on operating profit.
28
(319)
(379)
Scope
Management Discussion and Analysis
67 Business Environment
69 Executive Summary of 2015 Results
80 Life/Health Insurance Operations
92 Outlook 2016
86 Asset Management
98 Balance Sheet Review
74 Property-Casualty Insurance Operations 90 Corporate and Other
C Group Management Report
110 Reconciliations
Life/Health Insurance Operations
OPERATING PROFIT
The reconciling item scope comprises the effects from out-of-scope
entities in the profit sources reporting compilation. Operating profit
from operating entities that are not in-scope entities is included in
the investment margin. Currently, 20 entities comprising 96.5% of
Life/Health total statutory premiums are in scope.
Expenses
Expenses comprise acquisition expenses and commissions as well
as administrative and other expenses.
The delta shown as definitions in acquisition expenses and com-
missions represents commission clawbacks, which are allocated to the
technical margin. The delta shown as definitions in administrative
and other expenses mainly represents restructuring charges, which
are stated in a separate line item in the group income statement.
CAPITALIZATION AND AMORTIZATION OF DAC¹
€ MN
105 Liquidity and Funding Resources
Capitalization of DAC²
Annual Report 2015 Allianz Group
2-Includes trading income.
Interest expenses, excluding interest expenses
from external debt
(212)
(255)
Fee and commission expenses
(340)
(305)
Consolidation effects within Corporate
110
and Other
3
Consolidation
(365)
(344)
Allianz Group total revenues
125,190
122,253
1- Represents interest and similar income less interest expenses.
2
2015
2014
1,741
Amortization, unlocking and true-up of DAC4
(3,432)
(86)
(2,648)
1 - Prior year figures changed in order to reflect the roll out of profit source reporting to Malaysia.
2-As per Group Management Report.
3- For German Speaking Countries, policyholder participation on revaluation of DAC/URR capitalization/
amortization.
4-As per notes to the consolidated financial statements.
ACQUISITION, ADMINISTRATIVE, COMMISSIONS AND OTHER EXPENSES¹
€ MN
(105)
RECONCILIATION TO NOTES¹
2014
€ MN
Acquisition expenses and commissions²
(4,915)
(4,912)
2015
Definitions
32
2015
(1,033)
(1,006)
Definition: policyholder participation³
Scope
1,904
603
566
880
908
141
123
3,364
3,502
Definition: URR capitalized
Definition: policyholder participation³
Scope
Capitalization of DAC4
Amortization, unlocking and true-up of DAC²
(2,073)
(1,516)
Definition: URR amortized
(249)
(13)
565
For our Asset Management business segment, we assign internal
risk capital requirements based on the sectorial regulatory capital
requirements as envisaged in Solvency II. The Asset Management
business is mainly affected by operational risks. However, since most
of our Asset Management business is not located within the Euro-
zone, at the Group level it also bears foreign exchange rate risk. Our
Asset Management business is covered by adequate risk controlling
processes, including regular reporting and qualitative risk assess-
ments (such as Top Risk Assessment) to the Group. However, since it
is mainly affected by the previously mentioned two risk types (opera-
tional and foreign exchange rate), and due to the fact that the impact
on total pre-diversified risk capital is minor, risk management with
respect to Asset Management is not discussed in more detail.
158
3- Under book value deduction, the book value of the respective entity is deducted from eligible own funds
of the Group.
2015
2014
72.7
66.0
36.4
34.6
200%
191%
The Allianz Group's own funds as well as the capital requirements are
based on the market value balance sheet approach as the major eco-
nomic principle of Solvency II rules.¹ From 1 January 2016 onwards,
the Solvency II capitalization will replace the capitalization based on
Solvency I as the regulatory binding one. Our objective is to maintain
available capital at the Group level that is above the minimum indi-
cated requirements and consistent with our risk profile, risk appetite
and capital management strategy. Our capitalization based on these
Compared to year-end 2014, our Solvency II capitalization increased
9 percentage points to 200%, which was mainly driven by an increase
in own funds only partly compensated for by an increase in risk cap-
ital. The change in own funds was driven by positive contributions of
existing and new business as well as the issuance of a subordinated
bond, partially offset by negative impacts from model changes and
transferability restrictions. The change in risk capital was mainly
driven by higher exposure due to business growth and model changes
necessary in the context of our internal model application. Impacts
of model changes on our risk profile are presented in the section
Model changes in 2015. This increase in risk capital was also partially
offset by actions to reduce our sensitivity to market movements, in
particular our sensitivity to interest rates.
ALLIANZ GROUP: SOLVENCY II REGULATORY CAPITALIZATION RATIOS
%
Capitalization
ratio
31 December 30 September
2015
C Group Management Report
Management Discussion and Analysis
67 Business Environment
The following table summarizes our Solvency II regulatory capi-
talization ratios disclosed over the course of the year 2015.
69 Executive Summary of 2015 Results
SOLVENCY II REGULATORY CAPITALIZATION
1 - Includes ratings for securities issued by Allianz Finance II B.V. and Allianz Finance Corporation.
2- Rating reflects senior unsecured debt.
3- Issuer credit rating.
October
October
2015)
2015)²
A.M. Best
A+
A+
aa-
As part of the long-term financial strength rating, Standard & Poor's
has a rating for “Enterprise Risk Management” (ERM). Since 2013,
Standard & Poor's has assigned Allianz its highest possible rating -
"very strong" - for the ERM capabilities of our insurance operations.
This indicates that Standard & Poor's regards it as "unlikely that
Allianz Group will experience major losses outside its risk tolerance".
Standard & Poor's stated that the assessment is based on Allianz's
strong risk management culture, strong controls for the majority of
key risks, and strong strategic risk management. In addition, Stan-
dard & Poor's reviewed our internal risk capital framework, for the
first time in 2012 and since then on an annual basis. Based on this
review, Standard & Poor's has given further credit to the capital posi-
tion of the Allianz Group since the fourth quarter of 2012 by taking
into account the results based on our internal risk capital framework
when determining the capital requirements to meet specific rating
classes.
aa-
Not rated
Stable
outlook
(affirmed
September
2015)
Stable
outlook³
(affirmed
September
2015)
Not rated
Capitalization ratio
74 Property-Casualty Insurance Operations
86 Asset Management
90 Corporate and Other
(3,189) (2,837)
Net cash flow
used in investing
activities
Net cash flow
used in financing
activities
2,656
979
Change in cash
and cash
equivalents¹
Net cash outflow used in investing activities decreased by € 6.5 BN
to € 20.4 BN in 2015. This was mainly due to lower net cash outflows
from available-for-sale investments, especially in our Life/Health
business segment in Germany, the United States, and France. This
was partly offset by Allianz SE, Allianz Korea, and our banking activi-
ties in Italy. In addition, we recorded higher cash inflows from loans
and advances to banks and customers, primarily at Allianz Se and
Allianz Korea. This was only partly offset by our Life/Health business
segment in the Netherlands.
Net cash outflow used in financing activities amounted to € 2.8 BN
(2014: € 3.2 BN) and was mainly driven by net cash inflows from liabil-
ities to banks and customers (after net cash outflows in 2014). This
was, in particular, attributable to our Banking operations in Italy and
our Life/Health business in the United States. Higher dividend pay-
ments to our shareholders and lower net cash inflows from our refi-
nancing activities¹ partly offset these effects.
provided
by operating
activities
Cash and cash equivalents increased by € 1.0 BN to € 14.8 BN as of
31 December 2015, mainly stemming from our Life/Health business
segment in Germany.
€ MN
2015
2014
Balances with banks payable on demand
7,764
6,657
Balances with central banks
388
CASH AND CASH EQUIVALENTS
80 Life/Health Insurance Operations
Net cash flow
(20,000)
92 Outlook 2016
98 Balance Sheet Review
105 Liquidity and Funding Resources
110 Reconciliations
Allianz Group consolidated cash flows
ANNUAL CHANGES IN CASH AND CASH EQUIVALENTS
€ MN
40,000
(30,000)
32,232
23,663
20,000
10,000
0
(10,000)
11
(26,927)
(20,394)
30,000
Prime-1
Prime-1
(affirmed
October
2015)
(affirmed
as of 31 December
Eligible capital
Requirement
Solvency ratio
2015
2014
58.0
49.8
29.0
27.6
200%
€ BN
181%
The conglomerate solvency ratio increased by 19.6 percentage
points.¹
EXTERNAL RATING AGENCY CAPITAL ADEQUACY
Rating agencies apply their own methodology to evaluate the relation-
ship between the required risk capital of a company and its available
capital resources. An assessment of capital adequacy is usually an
integral part of the rating process. Moody's, Standard & Poor's and
A.M. Best affirmed their Allianz Group's rating in 2015.
The Allianz Group has one of the highest ratings amongst its
peers. The following table provides the ratings of the Allianz Group
awarded by major rating agencies.
1 - For further details on changes in eligible capital and solvency requirement, please refer to Balance Sheet
Review from page 98.
Annual Report 2015 Allianz Group
113
RATINGS OF THE ALLIANZ GROUP
requirements is shown in the following table. Our U.S.-based life busi-
ness, Allianz Life of North America (AZ Life), is included on the basis
of third-country equivalence treatment².
1-Off-balance sheet reserves are accepted by the authorities as eligible capital only upon request. Allianz SE
has not submitted an application so far. Excluding off-balance sheet reserves, the conglomerate solvency
ratios would be 191 % and 172 % as of 31 December 2015 and 31 December 2014, respectively.
Ratings¹
CONGLOMERATE SOLVENCY1
REGULATORY CAPITAL ADEQUACY
341
Annual Report 2015 Allianz Group
C Group Management Report
Risk and Opportunity Report and Financial Control
112 Risk and Opportunity Report
131 Controls over Financial Reporting and
Risk Capital
MANAGEMENT ASSESSMENT
The Allianz Group is a financial conglomerate within the scope of the
E.U. Financial Conglomerates Directive and the related German law
in force since 1 January 2005. The law requires that a financial con-
glomerate calculates the capital available to meet its solvency
requirements on a consolidated basis, which we refer to as “eligible
capital". For the 2015 financial year, the requirements for our insur-
ance business are based on Solvency I. These capital requirements,
as well as the definition and calculation of eligible capital, will be
replaced by the Solvency II rules once the new regulation becomes
binding on 1 January 2016. Allianz expects to be well capitalized also
under these future regulatory requirements.
The Allianz Group's management feels comfortable with the Group's
overall risk profile and has confidence in the effectiveness of its risk
management framework to meet the challenges of a rapidly changing
environment as well as day-to-day business needs. This confidence
is based on several factors, which are outlined in more detail in the
sections that follow and are summarized below:
Due to its effective capital management, the Allianz Group is
well capitalized and met its internal-, rating agency- and regula-
tory-solvency targets as of 31 December 2015. Allianz is also con-
fident that it will be able to meet the capital requirements under
the new regulatory regimes. Allianz remains one of the highest-
rated insurance groups in the world, as reflected by our external
rating agencies.
The Group's management also believes that Allianz is well posi-
tioned to deal with potential future adverse events, in part due
to our strong internal limit framework defined by the Group's
risk appetite and risk management practices including our
approved partial internal model.
The Group has a conservative investment profile and disciplined
business practices in the Property-Casualty, Life/Health and
Asset Management business segments, leading to sustainable
operating earnings with a well-balanced risk-return profile.
Finally, the Group has the additional advantage of being well
diversified, both geographically and across a broad range of
businesses and products.
Capitalization
For the benefit of shareholders and policyholders alike, Allianz's aim
is to ensure that the Group is adequately capitalized at all times and
that all operating entities meet their respective regulatory capital
requirements. Furthermore, risk capital and cost of capital are
important aspects taken into account in business decisions.
Our risk capital reflecting our risk profile plays a significant role
in the management of capital across the Group. In addition, we take
into account the external requirements of regulators and rating
agencies. While capital requirements imposed by regulators consti-
tute a binding constraint, meeting rating agencies' capital require-
ments and maintaining strong credit ratings are strategic business
objectives of the Allianz Group.
We closely monitor the capital position of the Group and its
operating entities along each of these dimensions, and apply regular
stress tests based on standard adverse scenarios. This allows us to
take appropriate measures to ensure our continued capital and sol-
vency strength.
-
Insurer financial
strength rating
Counterparty credit
rating
Commercial paper
(short-term) rating
December
(affirmed
December
(affirmed
2015)
Own funds
December
2015)
2015)²
outlook
Capital requirement
Aa3
Aa3
Stable
Stable
outlook outlook
Aa3
Stable
outlook
Aa3
Stable
outlook²
(affirmed
Moody's
outlook
outlook outlook
as of 31 December
2015
2014
2015
2014
2015
2014
ALLIANZ GROUP: SOLVENCY II REGULATORY CAPITALIZATION
Standard
AA
AA
& Poor's
Stable
Stable
AA
Stable
AA
Stable
A-1+
(affirmed
A-1+
€ BN
397
Risk capital related to our European banking operations is allo-
cated to the Corporate and Other business segment, based on the
approach applied by banks under the local requirements with respect
to the Basel regulation (Basel standards). Capital requirements for
banks represent an insignificant amount of approximately 1.5% (2014:
1.3%) of our total pre-diversified risk. Therefore, risk management
with respect to banking operations is not discussed in more detail.
Cash on hand
184
10,109
1,425
937
3,687
987
3,646
686
355
67
580
10,101
1,502
11,958 11,601
4,634
5,559
707 (924)
5,669 (15,371) (14,428)
Tax
Total Group
20141
2,274 2,166 (6,663) (6,751) 14,745 14,941
2,019 2,110 (7,784) (6,893) 22,081 19,986
686
857
857
3,600 3,354
41,283 39,139
(4,860) (3,826)
36,423
20141
2015
4,623
(784)
། བླ། ཆུ། * ཋ།སྐྱུ།
26
20141
2015
20141
2015
20141
2015
20141
2015
667
20141
Property-Casualty
Life/Health
5,690
16,516
6,050 2,406
14,290 6,141
Asset Management
Corporate and Other
Total Group
146
2,922
25,274
146
2,663
23,150 9,240
2015
2015
35,313
1-2014 risk profile figures recalculated based on model changes in 2014, as described in Model changes in
2015 from page 118. With Solvency II becoming the regulatory binding regime, the breakdown reflects
Allianz's regulatory capital requirements, including the third-country equivalence treatment of AZ Life.
1-As mentioned under Solvency II capitalization, AZ Life is taken into account by means of third-country
equivalence into the Group capitalization.
2-Due to late availability of the EIOPA publication, the risk-free interest rate term structure used might be
slightly different from the one published by EIOPA.
116
Annual Report 2015 Allianz Group
C Group Management Report
Risk and Opportunity Report and Financial Control
112 Risk and Opportunity Report
131 Controls over Financial Reporting and
Risk Capital
Where possible, we derive correlation parameters for each pair
of market risks through statistical analysis of historical market data,
considering quarterly observations over several years. In case historical
market data or other portfolio-specific observations are insufficient
or not available, correlations are set according to a well-defined
Group-wide process. Correlations are determined by the Correlation
Settings Committee, which combines the expertise of risk and busi-
ness experts. In general, we set the correlation parameters to represent
the joint movement of risks under adverse conditions. Based on these
correlations, we use an industry-standard approach, the Gaussian
copula approach, to determine the dependency structure of quantifi-
able sources of risk within the applied Monte Carlo simulation.
Our partial internal risk capital model also includes assumptions on
claims trends, liability inflation, mortality, longevity, morbidity, policy-
holder behavior, expense, etc. We use our own internal historical
data for actuarial assumptions wherever possible and also consider
recommendations from the insurance industry, supervisory authori-
ties, and actuarial associations. The derivation of our actuarial
assumptions is based on generally accepted actuarial methods. With-
in our internal risk capital and financial reporting framework, com-
prehensive processes and controls exist for ensuring the reliability of
these assumptions.
SCOPE
By design, our partial internal risk capital model takes into account
the following risk categories: market risk, credit risk, underwriting
risk, business risk, and operational risk – whenever these risks are
present. A further breakdown of the risk categories can be found in
the section on internal risk assessment. With the exception of the
Asset Management business segment, all business segments are
exposed to the full range of stated risk categories. By contrast, the
Asset Management business segment is mainly exposed to opera-
tional and market risk and to a lesser extent to credit risk.
Coverage of the risk capital calculations
Allianz's partial internal risk capital model covers all major insur-
ance operations¹. This includes the relevant assets (including bonds,
loans, mortgages, investment funds, equities and real estate) and
liabilities (including the cash flow run-off profile of all technical
reserves as well as deposits, issued debt, and other liabilities). For
with-profit products in the Life/Health business segment, options
and guarantees embedded in insurance contracts – including policy-
holder participation rules – are taken into account.²
Smaller entities within the European Economic Area which are
not covered by the partial internal model are reflected based on their
standard model results. At Group level, the capital requirements for
smaller insurance operating entities outside the European Economic
Area that have only an immaterial impact on the Group's risk profile
are treated with book value deduction³.
1-As mentioned under Solvency II capitalization, AZ Life is taken into account by means of third-country
equivalence into the Group capitalization.
2- For further information about participating life business, please refer to note 20 to the consolidated financial
statements.
Actuarial assumptions
Annual Report 2015 Allianz Group
We strive to diversify the risks we are exposed to in order to limit
the impact of any single source of risk and help increase the chances
that the positive developments outweigh the negative. The degree to
which diversification can be realized depends in part on the level of
relative concentration of those risks and the joint movement of
sources of risk.
Diversification and correlation assumptions
Detailed discussions of movements in respective risks are provided
in the sections that follow.
Annual Report 2015 Allianz Group
1-2014 risk profile figures recalculated based on model changes in 2015 as described in Model changes in
2015 from page 118.
2-Diversification before tax.
115
Internal risk capital framework
We define internal risk capital as the capital required to protect us
against unexpected, extreme economic losses, which forms the basis
for determining our Solvency II regulatory capitalization and the
associated risk profile. On a quarterly basis, we calculate and aggre-
gate internal risk capital across all business segments, based on a
common standard for measuring and comparing risks across the
wide range of different activities that we undertake as an integrated
financial services provider.
Our partial internal risk capital model considers concentration, accu-
mulation, and correlation effects when aggregating results at Group
level. This reflects the fact that not all potential worst-case losses are
likely to materialize at the same time. This effect is known as diversi-
fication and forms a central element of our risk management frame-
work.
GENERAL APPROACH
INTERNAL RISK CAPITAL MODEL
Our partial internal risk capital model is based on a Value-at-Risk
(VAR) approach using a Monte Carlo simulation. Following this
approach, we determine the maximum loss in the portfolio value of
our businesses in the scope of the model within a specified time-
frame ("holding period") and probability of occurrence ("confidence
level"). We assume a confidence level of 99.5% and apply a holding
period of one year. In the risk simulation, we consider risk events from
all modeled risk categories (“sources of risk”) and calculate the port-
folio value based on the net fair value of assets and liabilities under
potentially adverse conditions.
The risk capital is defined as the difference between the current
portfolio value and the portfolio value under adverse conditions
dependent on the 99.5% confidence level. Because we consider the
impact of a negative or positive event on all sources of risks and cov-
ered businesses at the same time, diversification effects across prod-
ucts and regions are taken into account. The results of our Monte
Carlo simulation allow us to analyze our exposure to each source of
risk, both separately and in aggregate. In addition, in particular for
market risks, we analyze several pre-defined stress scenarios, based
either on historically observed market movements or on hypothetical
market movement assumptions. This modeling approach, therefore,
also enables us to identify scenarios that may have a positive impact
on our solvency situation.
Yield curve and volatility adjustment assumptions
When calculating the fair values of assets and liabilities, the assump-
tions regarding the underlying risk-free yield curve are crucial in
determining and discounting future cash flows. We apply the method-
ology provided by the European Insurance and Occupational Pensions
Authority (EIOPA) within the technical documentation (EIOPA-
BOS-15/035) for the extension of the risk-free interest rate curves
beyond the last liquid tenor².
In addition, we adjust the risk-free yield curves by a volatility
adjustment for all business segments, except unit-linked business
with guarantees in most markets where a volatility adjustment is
defined by EIOPA. This is done to better reflect the underlying eco-
nomics of our business, as the cash flows of our insurance liabilities
are, to a large degree, predictable. The advantage of being a long-term
investor, therefore, is the opportunity to invest in bonds yielding
spreads over the risk-free return and earning this additional yield
component. Being a long-term investor mitigates to a great extent the
risk of forced selling of debt instruments at a loss prior to maturity.
Therefore, we reflect this mitigation using a volatility adjustment
spread risk offset, and view the more relevant risk to be default and
migration risk rather than credit spread risk.
Valuation assumption: replicating portfolios
Since efficient valuation and complex, timely analysis is required, we
replicate the liabilities of our Life/Health insurance business as well
as for our internal pension obligations. This technique enables us to
represent all options and guarantees, both contractual and discre-
tionary, by means of standard financial instruments. In the risk cal-
culation we use the replicating portfolio to determine and revalue
these liabilities under all potentially adverse Monte Carlo scenarios.
We utilize an approach for the management of our risk profile and
solvency position that reflects the forthcoming Solvency II rules. This
comprises our approved partial internal model covering all major
insurance operations¹. Other entities are reflected based on their
standard model results as well as on sectoral or local requirements,
in accordance with the Solvency II framework. Our partial internal
model is based on a best-practice technical platform with an up-to-
date methodology covering all modeled sources of quantifiable risks.
as of 31 December
Total
Diversification
2015
Internal
growth
Changes in
scope of
consolidation
Foreign
currency
translation
Nominal
growth
Property-Casualty
2.9
2015
%
30 June
2015
2014
200
200
212
192
191
The solvency ratio as of 31 December 2015 reflects regulatory model
changes necessary for the go-live of Solvency II in 2016. These changes
are described in detail in the section Model changes in 2015.
The following table presents the sensitivity of our predicted Sol-
vency II capitalization ratio under certain standard financial scenar-
ios. These are defined by reasonably possible individual movements
in key market parameters, while keeping all other parameters con-
stant, with the effects impacting both the available capital and the
internal risk capital.
31 March 31 December
2015
1- Own funds and capital requirement are calculated under consideration of volatility adjustment and yield
curve extension, as described in Yield curve and volatility adjustment assumptions on page 116.
Total revenues comprise statutory gross premiums written in Property-
Casualty and Life/Health, operating revenues in Asset Management,
and total revenues in Corporate and Other (Banking).
RECONCILIATION OF NOMINAL TOTAL REVENUE GROWTH
TO INTERNAL TOTAL REVENUE GROWTH
Treasury bills, discounted treasury notes, similar
treasury securities, bills of exchange and checks
Total cash and cash equivalents
6,465
6,625
14,842
13,863
2014 2015
1- Includes effects of exchange rate changes on cash and cash equivalents of € 548 MN and € 541 MN in 2015
and 2014, respectively.
Net cash flow provided by operating activities amounted to € 23.7 BN
in 2015, down by € 8.6 BN compared to the previous year. This consists
of net income plus adjustments for non-cash charges, credits and
other items included in net earnings and cash flows related to the net
change in operating assets and liabilities. Net income after adding
back non-cash charges and similar items went down by € 0.4 BN to
€ 10.5 BN in 2015. Operating cash flows from net changes in operating
assets and liabilities, including other items, fell by € 8.1 BN to € 13.2 BN.
This was driven by lower reserves for insurance and investment con-
tracts in our Life/Health business segment, mainly in the United
States, Germany, Italy, and France. We also recorded net cash outflows
(after net cash inflows in 2014) from our financial assets and liabilities
held for trading, stemming from our Life/Health business segment in
Germany and in the United States. This was partially offset by higher
net cash inflows from repurchase agreements and collateral received
from securities lending transactions – in particular at Allianz SE – and
by higher reserves for losses and loss adjustment expenses mainly in
our Property-Casualty business segment at Allianz SE (Reinsurance),
Italy and France.
Composition of total revenues
as of 31 December
1-Refers to cash flows from certified liabilities and subordinated liabilities.
109
Reconciliations
The previous analysis is based on our consolidated financial state-
ments and should be read in conjunction with them. In addition to
our figures stated in accordance with the International Financial
Reporting Standards (IFRS), the Allianz Group uses operating profit and
internal growth to enhance the understanding of our results. These
additional measures should be viewed as complementary to, rather
than a substitute for, our figures determined according to IFRS.
For further information, please refer to note 6 to the consolidated
financial statements.
Composition of total revenue growth
We believe that an understanding of our total revenue performance
is enhanced when the effects of foreign currency translation as well
as acquisitions, disposals, and transfers (or “changes in scope of
consolidation”) are analyzed separately. Accordingly, in addition to
presenting nominal total revenue growth, we also
growth, which excludes these effects.
present internal
Annual Report 2015 Allianz Group
2-Third-country equivalence treatment for AZ Life means that the entity is included at Group level with 150%
of the local statutory capital requirement for life insurance companies ("Company Action Level RBC").
114
Annual Report 2015 Allianz Group
190
Combined scenario:
Interest rate down by 0.5%¹
Equity prices down by 30%
176
179
1- Non-parallel interest rate shifts due to extrapolation of the yield curve beyond the last liquid point in line
with forthcoming Solvency II rules.
RISK PROFILE
Equity prices down by 30%
With Solvency II becoming the binding regulatory regime and the
approval of our partial internal model, risk is measured and steered
based on the risk profile underlying our regulatory capital require-
ment. By that we allow for a consistent view on risk steering and
capitalization under the Solvency II framework. This is supplemented
by economic business scenarios and sensitivities.
As of 31 December 2015, the group-diversified risk reflecting our
risk profile before non-controlling interests of € 36.4 BN (2014:
€ 35.3 BN¹) represented a diversification benefit² of approximately 27%
(2014: 27%¹) across risk categories and business segments. The group-
diversified risk is broken down as follows:
ALLIANZ GROUP: ALLOCATED RISK ACCORDING TO THE RISK PROFILE (TOTAL PORTFOLIO BEFORE NON-CONTROLLING INTERESTS)
€ MN
Market risk
Credit risk
Underwriting risk
Business risk
Operational risk
This Risk and Opportunity Report outlines the Group's risk fig-
ures, reflecting its risk profile based on pre-diversified risk figures and
group-diversification effects. Pre-diversified risk figures reflect the
diversification effect within each modeled risk category (i.e. market,
credit, underwriting, business, and operational risk) but does not
comprise the diversification effects across risk categories. Group-
diversified risk figures also capture the diversification effect across
all risk categories.
199
208
Equity prices up by 30%
C Group Management Report
Risk and Opportunity Report and Financial Control
112 Risk and Opportunity Report
131 Controls over Financial Reporting and
Risk Capital
ALLIANZ GROUP: SOLVENCY II REGULATORY CAPITALIZATION RATIOS
%
as of 31 December
2014
191
2015
Base capitalization ratio
200
Interest rates up by 0.5%¹
208
205
Interest rates down by 0.5%¹
185
170
225
125
32.4
128
0.8
0.9
0.6
2.0
1.7
16.8
14.6
45.6
49.8
23.1
11.4
15.5
15.8
A
125.2
141.4
0.1
0.1
1.4
1.1
2.4
0.9
94.6 104.8
BBB
52.9
7.2
9.5
1.0
0.5
2.7
3.9
BB
137.2
148.7
0.6
3.0
0.5
0.5
0.7
0.6
5.6
7.3
72.8
81.9
6.0
5.0
50.9
0.6
6.6
6.2
10.3
2014
2015
2014
2015
2014
2015
2014
2015
2014
2015
2015
31 December
Total
Other
Short-term Loan
ABS/MBS
Banks
Corporate
Covered Bond
Government &
Agency
Type of
issuer
€ BN
as of
1.6
2014
2014
11.3
20.2
23.8
84.0
95.9
AA
128.8
122.1
0.1
17.3
2015
16.0
1.1
1.1
2.4
57.2
57.7
51.8
44.8
AAA
2014
2015
1.5
RATING DISTRIBUTION OF ALLIANZ GROUP'S FIXED-INCOME PORTFOLIO¹ - FAIR VALUE
1.5
0.1
3.3
4.3
3.6
10.0
12.7
1.7
2.8
0.3
༄།ཆ།
3.0
22.9
21.6
31.3
145.1
164.9
107.6
98.7
209.3
217.5
Total
0.5
541.4
524.3
1- In accordance with the Group Management Report, figures stated include investments of Banking and
Asset Management. Table excludes private loans. Stated market values include investments not in scope
of the Solvency II framework.
Credit risk-reinsurance
6.64
0.04
2015
0.03
2014
Credit risk - credit insurance
1-Represents gross exposure broken down by reinsurer.
Total
Not assigned
Non-investment grade
0.2
BBB+ to BBB-
AA+ to AA-
AAA
as of 31 December
€ BN
REINSURANCE RECOVERABLES BY RATING CLASS¹
123
Annual Report 2015 Allianz Group
1- Additionally, 4.8% (2014: 2.4%) of our total Group pre-diversified internal credit risk is allocated to receiv-
ables, potential future exposure for derivatives and reinsurance, and other off-balance sheet exposures.
A dedicated team selects our reinsurance partners, focusing on
companies with strong credit profiles. We may also require letters of
credit, cash deposits, or other financial measures to further mitigate
our exposure to credit risk. As of 31 December 2015, 86.0% (2014: 82.9%)
of the Allianz Group's reinsurance recoverables were distributed
among reinsurers that had been assigned at least an “A-” rating by
Standard & Poor's or A.M. Best. As of 31 December 2015, non-rated
reinsurance recoverables represented 13.3% (2014: 15.7%). Reinsurance
recoverables without a Standard & Poor's rating include exposures to
brokers, companies in run-off, and pools - where no rating is available.
As of 31 December 2015, 0.4% (2014: 0.4%) of our total Group pre-diver-
sified internal credit risk was allocated to reinsurance exposures-of
which 52.0% (2014: 58.5%) was related to reinsurance counterparties
in the United States and Germany.
A+ to A-
0.4
4.3
6.2
0.3
0.4
0.1
0.1
0.3
CCC
4.3
4.8
0.1
0.1
CC
0.1
3.2
3.0
0.1
0.8
1.6
B
12.7
15.8
0.2
0.2
0.1
0.1
0.1
0.1
0.1
0.3
3.4
2.5
Not rated
0.5
0.5
0.4
0.4
0.1
0.1
0.1
0.1
0.1
0.1
0.1
0.1
C
0.3
0.2
0.2
0.1
D
4.68
As of 31 December 2015, the rating distribution based on issue
(instrument) ratings of our fixed income portfolio was as follows:
As of 31 December 2015, credit risk arising from the investment port-
folio accounted for 88.2% (2014: 92.7%) of our total Group pre-diversi-
fied internal credit risk. Credit Risk in the Life/Health business seg-
ment is primarily driven by long-term assets covering long-term
liabilities. Typical investments are government bonds, senior corpo-
rate bonds, covered bonds, self-originated mortgages and loans, as
well as a modest amount of derivatives. Due to the nature of the busi-
ness, the fixed-income securities in the Property-Casualty business
segment tend to be short- to mid-term, which explains the lower
Credit Risk consumption in this segment.¹
996
576
3,431 739
528 4,694
526 2,931
237
5,934
20
20
4,129
415
2014
2015
2014
2015
2014
2015
2014
2015
2014
2015
2014
2015
2014
914
554
544
55
86
1,272
6,011
5,690 6,050
48 16,516 14,290
86
146
146
86
20
20
20
20
977
8,078
408
3,957
221
541
4,181 5,975
2015
6,932 3,618
451
452
643
45
1,003
1,326
3,804
6,085
2,973
58
5,207
Total
Currency
Real estate
We also closely monitor concentrations and accumulation of
non-market risks on a stand-alone basis (i.e. before diversification
effects) within a global limit framework in order to avoid substantial
losses from single events such as natural catastrophes, terror or
credit events.
Furthermore, we have put in place standards for hedging activi-
ties due to exposures to fair value options embedded in life insurance
products. Life/Health operating entities carrying these exposures are
required to follow these standards, including making a conscious
decision on the amount of hedging.¹ The hedging of risks stemming
from investments is also an element applied to manage and limit
risks efficiently. For example, protective puts are used to limit the
downward exposure of certain investments².
In order to further limit the impact of any financial market
changes and to ensure that assets adequately back policyholder lia-
bilities, we have additional measures in place. One of these is asset/
liability management, linked to the internal risk capital framework,
which incorporates risks as well as return aspects stemming from our
insurance obligations. In addition, we are using derivatives mostly to
either hedge our portfolio against adverse market movements or to
reduce our reinvestment risk – for example by using forwards or
swaptions.
Our limit-setting process ensures that prevailing statutory
restrictions regarding the composition of investments are taken into
account. Most statutory restrictions apply at the local level, where the
statutory restrictions as binding constraints enter the limit-setting
processes. In addition, guidelines are derived by the Group center for
certain investments, for example concerning the use of derivatives,
and compliance with the guidelines is controlled by the respective
risk and controlling functions.
entity level. The limits comprise economic limits, in particular finan-
cial VaR and credit VaR as derived from the internal risk capital frame-
work, complemented by stand-alone interest rate and equity sensi-
tivity limits as well as by limits on foreign exchange exposures. In
addition we introduced capitalization limits, defining target Solvency
II capitalization ratios on Group as well as operating entity level after
applying shock scenarios.
With respect to investments, top-down indicators such as stra-
tegic asset allocations are defined and closely monitored to ensure
balanced investment portfolios. Furthermore, we have a limit system
in place which is defined at Group level separately for the Life/Health
and the Property-Casualty business segments as well as at operating
As we are an integrated financial services provider offering a variety
of products across different business segments and geographic
regions, diversification is key to our business model. Diversification
is a key element in managing our risks efficiently by limiting the eco-
nomic impact of any single event and by contributing to relatively
stable results and our risk profile in general. Therefore, our aim is to
maintain a balanced risk profile without any disproportionately large
risk concentrations and accumulations.
RISK PROFILE AND RISK MANAGEMENT
Internal risk assessment
Impact of model changes on Eligible Group Own Funds
Model changes in 2015 resulted in a € 0.3 BN decrease of own funds,
mainly driven by changes in unavailability deductions partly offset
by regulatory and model changes as well as scope changes. The scope
changes refer to the new in-scope entities Brazil, Turkey and Taiwan
and increased own funds by € 1.1 BN. The unavailability deductions
increased by € 1.7 BN, mainly driven by lower capital requirements
which limit the transferability. Remaining changes relate to model
changes effecting the valuation of technical provisions.
In order to manage counterparty concentration risk, we run a
Group-wide country and obligor group limit management frame-
work (CRISP³), which covers credit and equity exposures and is based
on data used by the investment and risk experts at the Group and
operating entity levels. This limit framework forms the basis for dis-
cussions on credit actions and provides notification services with a
quick and broad communication of credit-related decisions across
the Group. Clearly defined processes ensure that exposure concen-
trations and limit utilizations are appropriately monitored and man-
aged. The setting of country and obligor exposure limits from the
In 2015, a central model change regarding a more conservative defini-
tion of operational risk capital led to an overall increase in opera-
tional risk capital.
The decrease in business risk in the Life/Health business segment is
mainly due to the change in model scope and parametrization
changes for dynamic lapses.
Business Risk
The decrease in underwriting risk both in the Life/Health and the
Property-Casualty business segment is mainly due to the change in
model scope.
Underwriting risk
In 2015, no new model changes were implemented to the credit risk
model. Only annual updates of rating transition matrices and asset
correlations based on extended time series were introduced. Never-
theless, the model change related to modeling of the loss-absorbing
capacity of technical provisions in the traditional life business had
also an impact on credit risk, leading to a decrease of € 0.3 BN. In total,
credit risk decreased on a pre-diversified basis by € 2.5 BN to € 8.5 BN,
primarily driven by the changes in model scope.
Credit risk
131 Controls over Financial Reporting and
Risk Capital
112 Risk and Opportunity Report
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Operational risk
96
1 - For further information about the risk concentration in the Life/Health business segment, please refer to
note 20 to the consolidated financial statements.
statements.
Equity
Credit spread
Inflation
Interest rate
Total Group
Asset Management
Corporate and Other
Life/Health
Property-Casualty
as of 31 December
pre-diversified, € MN
2- For further information on derivatives used for hedging, please refer to note 43 to the consolidated financial
ALLIANZ GROUP: RISK PROFILE - MARKET RISK BY BUSINESS SEGMENT AND SOURCE OF RISK (TOTAL PORTFOLIO BEFORE TAX AND NON-CONTROLLING INTERESTS)
Market risk
QUANTIFIABLE RISKS
In addition, central elements of Allianz's dividend policy are
linked to the Solvency II capitalization based on our partial internal
model. This shows that the partial internal model is fully integrated
in the business steering of Allianz and that the application of the par-
tial internal model satisfies the so-called “use-test" under Solvency II.
In the following sections we explain the evolution of the risk pro-
file
per modeled risk category. All risks are presented on a pre-diver-
sified basis and concentrations of single sources of risk are discussed
accordingly.
Allianz steers its portfolio using a comprehensive view of risk and
return, i.e. results based on the partial internal risk model including
scenario-based analyses are used actively for decision making: on the
one hand, economic risk and concentrations are actively restricted
by means of limits as outlined above and on the other hand, there is
a comprehensive analysis of the return on risk capital (RORC). The
latter allows us to identify profitable lines of business and products
on a sustainable basis, which provide reasonable profits on allocated
risk capital over the life time of the products. Therefore, it is a key
criterion for capital allocation decisions.
RISK BASED STEERING
It is the ultimate responsibility of the Board of Management to
decide upon limit budgets. The Board of Management delegates
authorities for limit setting and modification to the Group Finance
and Risk Committee and Group Chief Risk Officer by clearly defining
maximum limit amounts. All limits are subject to annual review and
approval according to the delegated authorities.
Group's perspective (i.e. the maximum concentration limit) takes
into account the Allianz Group's portfolio size and structure as well
as our overall risk strategy.
119
Annual Report 2015 Allianz Group
3-Credit Risk Platform.
As an inherent part of our insurance operations, we collect premiums
from our customers and invest them in a wide variety of assets.
Thereby, the Allianz Group holds and uses many different financial
instruments. The resulting investment portfolios back the future
claims and benefits to our customers. In addition, we invest share-
holders' capital, which is required to support the risks underwritten.
As the fair values of our investment portfolios depend on financial
markets, which may change over time, we are exposed to market
risks. The following table presents our Group-wide risk figures related
to market risks by business segment and source of risk.
Allianz has a well-diversified portfolio of Exchange- and OTC-
traded derivatives that are used as part of an efficient exposure man-
agement. The counterparty credit risk arising from derivatives is low,
since the derivatives usage is governed by the Group-wide internal
guidelines for collateralization of derivatives that stipulate master
netting and collateral agreements with each counterparty and require
high quality and liquid collateral. In addition, Allianz closely moni-
tors the credit ratings of counterparties and exposure movements.
Central clearing of certain classes of OTC derivatives as required by
the European Market Infrastructure Regulation (EMIR) and additional
reporting duties will contribute to further reducing counterparty
credit risk and operational risk at Allianz.
224
1,986 1,663
8,514
9,240
2014²
2015
Total
Rating down by 1 notch
Rating down by 2 notches
LGD up by 10%
as of 31 December
Base case
ALLIANZ GROUP: IMPACT OF SELECTED CREDIT SCENARIOS ON CREDIT RISK¹
pre-diversified, € MN
The following table displays the sensitivities of credit risk to cer-
tain scenarios: a deterioration of credit quality measured by issuer
rating¹ downgrades and the decline of recovery rates in the event of a
default (Loss-Given-Default, LGD). The sensitivities are calculated by
applying each scenario to all exposures individually, but keeping all
other parameters constant.²
provisions in the traditional life business, which increased the credit
risk after policyholder participation. Additionally, for the purpose
of
asset/liability management under the low-yield environment the
amount of long-duration assets has grown, which further contrib-
uted to the increase of credit risk, particularly in the Life/Health busi-
ness segment.
8,514
15.9%
16.3%
9,240
26
701
667
26
2,379
5,408
6,141
2,406
20141
2015
10,135
9,313
11,485
10,560
Credit risk - investment
131 Controls over Financial Reporting and
Risk Capital
112 Risk and Opportunity Report
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C Group Management Report
Annual Report 2015 Allianz Group
122
2- Scenarios are applied only to investment and reinsurance exposure positions in portfolios of Allianz
operating entities.
1- Credit risk calculations are based on issuer (borrower) ratings as opposed to issue (instrument) ratings.
The difference between issue and issuer ratings is primarily due to collateralization and seniority and is
reflected in Loss-Given-Default (LGD).
Throughout 2015 the credit environment was mostly stable. There
were limited rating actions, as the economic situation and outlook
were already reflected in current rating levels, compared to the eco-
nomic disruptions of previous years. The credit risk for the Group
increased, mainly due to reduced loss-absorbing capacity of technical
Total Group
Credit risk arises from potential claim payments on limits granted by Euler Hermes to
its policyholders. Euler Hermes protects its policyholders (partially) from credit risk
associated with short-term trade credits advanced to clients of the policyholder. If the
client of the policyholder is unable to meet its payment obligations, Euler Hermes
indemnifies the loss to the policyholder.
REINSURANCE PORTFOLIO
Premiums collected from our customers and shareholders' capital, which is required
to support the risks underwritten, are invested to a great extent in fixed-income
instruments. These investment portfolios ultimately cover the future claims to our
customers. However, for certain life insurance products, losses due to credit events can
be shared with the policyholder, as described in the context of market risks.
INVESTMENT PORTFOLIO
ALLIANZ COMPONENTS OF CREDIT RISK EXPOSURE
The different components of Allianz credit risk exposure are
described in the table below:
The majority of credit risk and the impact of sensitivity analysis can
be allocated to long-term sovereign debt as well as senior unsecured
bonds with lower investment grade borrowers.
2-2014 risk profile figures recalculated based on model changes in 2015.
1 - A notch is referred to rating sub-classes, such as "AA+", "AA", "AA-" at Standard & Poor's scale or "Aa1",
"Aa2", "Aa3" at Moody's scale.
8,988
9,780
Credit risk to external reinsurers appears when insurance risk exposures are transferred
by us to external reinsurance companies to mitigate insurance risk. Potential losses can
arise either due to non-recoverability of reinsurance receivables already present at the
as-of date or default on benefits that are under reinsurance treaties in-force.
CREDIT INSURANCE PORTFOLIO
1-2014 risk profile figures recalculated based on model changes in 2015.
Share of total Group pre-diversified risk
Corporate and Other
As of 31 December 2015, our investments excluding unit-linked
business that are sensitive to changing equity markets - amounting
to a market value of € 44.2 BN2 - would have lost € 12.9 BN in value
assuming equity markets declined by 30%.
The Allianz Group's insurance operating entities usually hold equity
investments to diversify their portfolios and take advantage of
expected long-term returns. Strategic asset allocation benchmarks
and investment limits are used to manage and monitor these expo-
sures. In addition, equity investments fall within the scope of CRISP
to avoid a disproportionately large concentration of risk.
As an insurance company we are exposed to changing inflation rates,
predominantly due to our non-life insurance obligations. In addition,
internal pension obligations contribute to our exposure to inflation.
Since inflation increases both claims and costs, higher inflation rates
will lead to greater liabilities. Inflation assumptions are already taken
into account in our product development and pricing and the risk of
changing inflation rates is incorporated in our partial internal model.
Equity risk
guar-
Inflation risk
As described above, the risk related to interest rates lies in the
fact that, in the long run, yields that can be achieved by reinvesting
may not be sufficient enough to cover the guaranteed rates. In con-
trast, opportunities may materialize when interest rates increase.
This
may result in higher returns from reinvestments than the
anteed rates.
As of 31 December 2015, our interest-rate-sensitive investments
excluding unit-linked business – amounting to a market value of
€ 419.3 BN¹ - would have gained € 30.6 BN or lost € 32.8 BN in value in
case of interest rates changing by (100) and +100 basis points, respec-
tively.
-
We manage interest rate risk from a comprehensive corporate
perspective: While the potential payments related to our liabilities in
the Property-Casualty business segment are typically shorter in
maturity than the financial assets backing them, the opposite usu-
ally holds true for our Life/Health business segment due to the long-
term life insurance contracts. In part, this provides us with a natural
hedge on an economic basis at the Group level.
These risks are reflected in the risk profile and managed by
interest rate sensitivity limits. A significant part of the Life/Health
business segment's pre-diversified interest rate risk lies in Western
Europe -76.5% as of 31 December 2015 (2014: 83.4%) -, mainly to cover
traditional life insurance products with guarantees.
1- The stated market value includes all investments whose market value is sensitive to interest rate move-
ments (excluding unit-linked business) reflecting the Solvency II framework, and therefore is not based
on classifications given by accounting principles.
Risk Capital
112 Risk and Opportunity Report
Risk and Opportunity Report and Financial Control
C Group Management Report
Annual Report 2015 Allianz Group
120
As interest rates may fall below the rates guaranteed to policyholders
in some life/health markets, and given the long duration of insurance
obligations, we are specifically exposed to interest rate risk because
we have to reinvest maturing assets prior to the maturity of life con-
tracts. This interaction of our investment strategy and obligations to
policyholders forms an integral part of our internal risk capital
framework. In addition, our ALM approach is closely linked to the
internal risk capital framework and designed to achieve investment
returns over the long term in excess of the obligations related to
insurance and investment contracts.
Interest rate risk
Our total pre-diversified market risk showed an increase of € 2.1 BN
mainly driven by equity and credit spread risk in the Life/Health seg-
ment. The increase in equity risk was mainly driven by higher expo-
sure. This was partly offset by a decrease in interest rate risk, pre-
dominantly due to management actions aiming at reducing our
interest rate sensitivity by asset/liability management (ALM) mea-
sures. This, however, also contributed to some extent to the increase
in credit spread risk, for example due to some duration extension on
the asset side. The decrease in inflation risk was mainly driven by the
hedging of inflation exposure and higher discount rates, resulting in
lower market values of inflation-sensitive liabilities and internal
pension liabilities. Real estate risk increased mainly due to higher
exposure.
405 25,274 23,150
Share of total Group pre-diversified risk 44.6% 43.2%
410
131 Controls over Financial Reporting and
213 2,922 2,663
2-The stated market value includes all investments whose market value is sensitive to equity movements
(excluding unit-linked business) reflecting the Solvency II framework, and therefore is not based on clas-
sifications given by accounting principles.
Credit spread risk
Asset Management
Life/Health
Property-Casualty
as of 31 December
pre-diversified, € MN
ALLIANZ GROUP: RISK PROFILE - ALLOCATED CREDIT RISK BY BUSINESS SEGMENT
(TOTAL PORTFOLIO BEFORE TAX AND NON-CONTROLLING INTERESTS)
By managing our credit risk on the basis of our limit manage-
ment and credit risk modeling frameworks, we have composed a
well-diversified credit portfolio. Our long-term investment strategy to
hold investments through the cycle to maturity enables us to keep
our portfolio stable even under adverse market conditions. It also
gives us the opportunity to earn planned excess returns throughout
the entire holding period of the investments. In our credit insurance
business, proactive credit management offers opportunities to keep
losses from single credit events below expected levels and therefore
strongly supports writing business that contributes to a balanced
Group credit portfolio.
The loss profile of a given portfolio is obtained through a Monte-
Carlo simulation, taking into account interdependencies and expo-
sure concentrations per obligor segment. To reflect portfolio specific
diversification effects, the loss profiles are calculated at different
levels of the Allianz Group structure (pre-diversified). They are then
fed into the overall partial internal risk capital model for further
aggregation across sources of risk to derive group-diversified internal
credit risk.
The internal credit risk capital model is a state-of-the-art tool
which provides bottom-up analysis. The major drivers of credit risk
for each instrument are exposure at default, ratings, seniority, col-
lateral and maturity. Additional parameters assigned to obligors are
migration probabilities and obligor asset correlations reflecting
dependencies within the portfolio. Ratings are assigned to single obli-
gors via an internal rating approach, which is based on long-term
ratings from rating agencies. It is dynamically adjusted using market-
implied ratings and the most recently available information.
country risk. Counterparty risk arises from our fixed-income invest-
ments, cash positions, derivatives, structured transactions, receiv-
ables from Allianz agents and other debtors, as well as reinsurance
recoverables and credit insurance. Country risk exposure is calcu-
lated as cross-border exposure to all obligors domiciled abroad from
the respective operating entities' perspective.
Risks from changes in equity prices are normally associated with
decreasing share prices and increasing equity price volatilities. As
stock markets also might increase, opportunities may arise from
equity investments.
121
3-2014 figure recalculated based on model changes in 2015 as described in Model changes in 2015 from
page 118.
Credit risk is measured as the potential economic loss in the
value of our portfolio due to changes in the credit quality of our coun-
terparts (“migration risk”) or the inability or unwillingness of the
counterparty to fulfill contractual obligations (“default risk”). Our
internal credit risk modeling framework covers counterparty risk and
The Allianz Group monitors and manages credit risk exposures and
concentrations to ensure it is able to meet policyholder obligations
when they are due. This objective is supported by the internal credit
risk model and the CRisP as described under the section on the risk
profile. Group-wide credit data is collected following a centralized
process and using standard obligor and obligor group mappings.
Credit risk
Despite the risk of decreasing real estate values, real estate is a suitable
addition to our investment portfolio, due to good diversification
benefits as well as to the contribution of relatively predictable cash-
flows in the long term. As of 31 December 2015, about 3.5% (2014: 3.1%³)
of the total pre-diversified risk was related to real estate exposures.
Real estate risk
Based on our foreign exchange management limit framework, cur-
rency risk is monitored and managed at the operating entity and
Group level. As our operating entities are typically invested in assets
of the same currency as their liabilities, the major part of foreign cur-
rency risk results from the economic value of our non-Euro operating
entities. If non-Euro foreign exchange rates decline against the Euro
from a Group perspective, the Euro-equivalent net asset values also
decrease. However, at the same time the capital requirements in Euro
terms from the respective non-Euro entity also decrease, partially
mitigating the total impact on the capitalization.
Currency risk
The advantage of being a long-term investor therefore gives us
the opportunity to invest in bonds yielding spreads over the risk-free
return and earning this additional yield component.
Our internal risk capital framework fully acknowledges the risk of
declining market values for our fixed-income assets, such as bonds,
due to the widening of credit spreads. However, for our risk manage-
ment and appetite we also take into account the underlying econom-
ics of our business model; for example, the application of the volatil-
ity adjustment in our internal risk capital framework to partially
mitigate spread risk, as described in the section on yield curve
assumptions.
Annual Report 2015 Allianz Group
Annual Report 2015 Allianz Group
4.35
6.06
69.5 68.0 66.1 65.0
66.2 66.0 65.9 68.3 69.9 69.1
2015 2014 2013 2012 2011 2010 2009 2008 2007 2006
Loss ratio
Loss ratio
excluding
natural
catastrophes
%
PROPERTY-CASUALTY LOSS RATIOS¹ FOR THE PAST TEN YEARS
We face the risk that underwriting profitability is lower than
expected. The volatility of the underwriting profitability measured
over one year defines our premium risk for the Allianz Group.
As part of our Property-Casualty business operations, we receive pre-
miums from our customers and provide insurance protection in
return. Changes in profitability over time are measured based on loss
ratios and their fluctuations.²
Premium risk
Our Property-Casualty insurance businesses are exposed to premium
risk related to the current year's new and renewed business, as well
as reserve risks related to the business in force.
Underwriting risk Property-Casualty
Property-Casualty risk changes are mainly driven by exposure and
model updates as well as foreign currency translation effects. For bio-
metric risk there were only minor movements.
1-As risks are measured by an integrated approach on an economic basis, internal risk profile takes reinsur-
ance effects into account.
11,601
21.7%
11,958
21.1%
Share of total Group pre-diversified risk
1,621
67
355
67
10,109
1,425
64.6 65.1 63.0 66.6 65.5 65.9 68.4 66.3 64.1 64.4
1- Represents claims and insurance benefits incurred (net), divided by premiums earned (net).
1-2014 risk profile figures recalculated based on model changes in 2015.
2-Please refer to the section Property-Casualty Insurance Operations - Property-Casualty insurance opera-
tions by reportable segments from page 78 for a regional breakdown of loss ratios over the past two years.
In the Life/Health business segment, policyholder behavior risks
are risks related to the unpredictability and adverse behavior of policy-
holders in exercising their different contractual options: early termi-
nation of contracts, surrenders, partial withdrawals, renewals, and
annuity take-up options. Assumptions on policyholder behavior are
set in line with accepted actuarial methods and are based on our own
historical data, to the extent available. If data is not available,
assumptions are based on industry data or expert judgment.
Business risks include cost risks and policyholder behavior risks and
are mostly driven by the Life/Health business segment and to a lesser
extent by the Property-Casualty business segment. Cost risks are
associated with the risk that expenses incurred in administering
policies are higher than expected or that new business volume
decreases to a level that does not allow Allianz to absorb its fixed
costs.
Business risk
Life/Health underwriting risk arises from profitability being
lower than expected due to changes in actuarial parameters. As prof-
itability calculations are based on several parameters - such as his-
torical loss information, assumptions on inflation or on mortality,
and morbidity – the realized parameters may differ from the ones
used for calculation. For example, higher inflation than that incorpo-
rated in the calculations may lead to a loss. However, deviations can
also occur in the opposite direction and be beneficial and lead to
additional profit. For example, a lower morbidity rate than expected
will most likely result in lower claims.
Casualty or Life/Health calculation methods, and is therefore included
in the relevant Property-Casualty and Life/Health figures accordingly.
However, most of our health business is attributable to the Life/
Health business segment. Due to effective product design and the
diversity of our products, there were no significant concentrations of
underwriting risks within our Life/Health business segment as of
31 December 2015.²
1 - For further information, please refer to note 19 to the consolidated financial statements.
We measure these risks within our partial internal risk capital
model by distinguishing between the different sub-components,
whenever relevant or material: absolute level, trend, volatility around
the best estimate assumptions, and pandemic risks. Depending on
the nature and complexity of the risk involved, our health business is
represented in the partial internal model, according to Property-
Underwriting risks in our Life/Health operations (biometric risks)
include mortality, disability, morbidity, and longevity risks. Mortality,
disability, and morbidity risks are associated with the unexpected
increase in the occurrence of death, disability, or medical claims on
our insurance products. Longevity risk is the risk that due to changing
biometric assumptions, the reserves covering life annuities and
group pension products might not be sufficient.
Underwriting risk Life/Health
In general, our operating entities constantly monitor the devel-
opment of reserves for insurance claims on a line-of-business level.1
In addition, the operating entities generally conduct annual reserve
uncertainty analyses based on similar methods used for reserve risk
calculations. Allianz SE performs regular independent reviews of
these analyses and Allianz SE representatives participate in the local
reserve committees' meetings.
10,101
1,502
We estimate and hold reserves for claims resulting from past events
that have not yet been settled. If the reserves are not sufficient to
cover claims to be settled in the future due to unexpected changes,
we would experience losses. The volatility of past claims measured
over a one-year time horizon defines our reserve risk.
The top five perils contributing to the natural catastrophe risk as
of 31 December 2015 were: Europe windstorm, Germany hail, Germany
flood, U.S. hurricane and U.K. flood.
Natural disasters, such as earthquakes, storms and floods, rep-
resent a significant challenge for risk management due to their accu-
mulation potential and occurrence volatility. In order to measure
such risks and better estimate the potential effects of natural disasters,
we use special modeling techniques in which we combine portfolio
data (such as the geographic distribution and characteristics of
insured objects and their values) with simulated natural disaster sce-
narios to estimate the magnitude and frequency of potential losses.
Where such stochastic models do not exist, we use deterministic,
scenario-based approaches to estimate potential losses.
Assessing the risks as part of the underwriting process is a key ele-
ment of our risk management framework. There are clear under-
writing limits and restrictions, centrally defined and in place across
the Group. In addition to the centrally-defined underwriting limits,
the local operating entities have limits in place that take into account
their business environments. Excessive risks are mitigated by exter-
nal reinsurance agreements. All these measures contribute to a
limitation on risk accumulation.
131 Controls over Financial Reporting and
Risk Capital
112 Risk and Opportunity Report
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124
Premium risk is subdivided into natural catastrophe risk, terror risk,
and non-catastrophe risk. We calculate premium risk based on actu-
arial models that are used to derive loss distributions. Premium risk is
actively managed by the Allianz Group and its local operating entities.
Reserve risk
1,425
130
2014
2015
2014
2015
Biometric
Reserve
Premium
non-catastrophe
Premium
terror
Premium
natural catastrophe
Total Group
Corporate and Other
2014
Asset Management
Property-Casualty
as of 31 December
ALLIANZ GROUP: RISK PROFILE - ALLOCATED UNDERWRITING RISK BY BUSINESS SEGMENT AND SOURCE OF RISK (TOTAL PORTFOLIO BEFORE NON-CONTROLLING INTERESTS)¹
pre-diversified, € MN
Underwriting risk consists of premium and reserve risks in the Prop-
erty-Casualty business segment as well as biometric risks in the Life/
Health business segment. For the Asset Management business seg-
ment and our banking operations, underwriting risks are not rele-
vant. The following table presents the pre-diversified risk calculated
for underwriting risks stemming from our insurance.¹
Underwriting risk
central internal credit risk module and is reviewed by Group Risk. The
result is integrated in the Group's internal credit risk to capture the
concentration and diversification effects. As of 31 December 2015,
6.5% (2014: 4.5%) of our total Group pre-diversified internal credit risk
was allocated to Euler Hermes credit insurance exposures, for which
the relative increase is primarily driven by the re-allocation of credit
risk from the investment portfolio, where exposure size has decreased
following the reduced scope of Allianz entities in the partial internal
model.
Our credit insurance portfolio is modeled by Euler Hermes based on
a proprietary model component, which is a local adaptation of the
1.97
12.59
13.19
1.76
Life/Health
ALLIANZ GROUP: RISK PROFILE - ALLOCATED BUSINESS RISK BY BUSINESS SEGMENT
(TOTAL PORTFOLIO BEFORE TAX AND NON-CONTROLLING INTERESTS)
2015
2015
2015
2014
Total
། ། ། ་། ། ནྡྲ།
4,970
4,926
4,461
4,579
26
17
2014
523
4,970
4,926
4,461
4,579
26
17
523
543
2015
2014
543
0.17
pre-diversified, € MN
Property-Casualty
Life/Health
As a provider of financial services, we consider risk management to
be one of our core competencies. It is therefore an integral part of our
business process. Our risk management framework covers, on a risk-
based approach, all operations including IT, processes, products, and
departments/subsidiaries within the Group. The key elements of our
risk management framework are:
RISK MANAGEMENT FRAMEWORK
Risk governance
Single reputational risk management decisions are integrated in
the overall risk management framework and reputational risks are
identified and assessed as part of a yearly Top Risk Assessment, during
which senior management also decides on a risk management strat-
egy
and related actions. This is supplemented by quarterly updates.
In addition, reputational risk is managed on a case-by-case basis.
Single cases with a potential impact on other operating entities or the
Group have to be reported to the Allianz Group for pre-approval.
With the support of Group Communications, Group Compliance
and the ESG Office¹, Group Risk defines sensitive business areas and
applicable risk guidelines, which are mandatory for all operating
entities in the Allianz Group. All affected Group and operating entity
functions cooperate in the identification of reputational risk. Group
Communications is responsible for the risk assessment, based on a
Group-wide methodology. In 2015, Allianz has embedded conduct risk
triggers for products and services into the reputational risk manage-
ment process.
Allianz's reputation as a well-respected and socially aware provider
of financial services is influenced by our behavior in a range of areas
such as product quality, corporate governance, financial performance,
customer service, employee relations, intellectual capital, and corpo-
rate responsibility. Reputational risk is the risk of an unexpected drop
in the value of the Allianz SE share price, the value of the in-force busi-
ness, or the value of future business, being caused by a decline in our
reputation.
Reputational risk
In addition, we launched a project in 2015 to develop an enhanced
liquidity risk framework taking stress situations into account and
allowing for a group-wide consistent aggregation. The framework will
be rolled out to the Group during 2016 and will further strengthen the
Allianz liquidity position and resilience to stress scenarios.
Regarding our Asset Management business, forecasting and
managing liquidity is a regular process designed to meet both regula-
tory requirements and Group standards. This process is supported by
the liquidity management framework implemented in Allianz Asset
Management.
oper-
Our insurance operating entities manage liquidity risk locally,
using asset/liability management systems designed to ensure that
assets and liabilities are adequately matched. The local investment
strategies particularly focus on the quality of investments and ensure
a significant portion of liquid assets (e.g. high-rated government
bonds or covered bonds) in the portfolios. This also allows us to meet
increased liquidity requirements in the case of unlikely events. We
employ actuarial methods for estimating our liabilities arising from
insurance contracts. In the course of standard liquidity planning we
reconcile the cash flows from our investment portfolio with the esti-
mated liability cash flows. These analyses are performed at the
ating entity level and aggregated at the Group level.
The accumulated short-term liquidity forecast is updated daily
and is subject to an absolute minimum strategic cushion amount
and an absolute minimum liquidity target. Both are defined for the
Allianz SE cash pool in order to be protected against short-term
liquidity crises. As part of our strategic planning, contingent liquidity
requirements and sources of liquidity are taken into account to
ensure that Allianz SE is able to meet any future payment obligations
even under adverse conditions. Major contingent liquidity require-
ments include non-availability of external capital markets, combined
market and catastrophe risk scenarios for subsidiaries, as well as
lower-than-expected profits and dividends from subsidiaries.
The main goal of planning and managing Allianz SE's liquidity
position is to ensure that we are always able to meet payment obliga-
tions. To comply with this objective, the liquidity position of Allianz SE
is monitored and forecast on a daily basis. Strategic liquidity planning
over time horizons of 12 months and three years is reported to the
Board of Management regularly.
-
Liquidity risk is defined as the risk that requirements from current or
future payment obligations cannot be met or can only be met on the
basis of adversely altered conditions. Liquidity risk can arise primarily
if there are mismatches in the timing of cash flows on the asset and
liability side. Detailed information regarding the Allianz Group's
liquidity risk exposure, liquidity and funding – including changes in
cash and cash equivalents – is provided in Liquidity and Funding
Resources from > page 105 onwards and notes 17, 23, 24 and 43 to
the consolidated financial statements.
Liquidity risk
131 Controls over Financial Reporting and
Risk Capital
112 Risk and Opportunity Report
Risk and Opportunity Report and Financial Control
C Group Management Report
Annual Report 2015 Allianz Group
-
Promotion of a strong risk management culture, supported by a
robust risk governance structure.
Consistent application of an integrated risk capital framework
across the Group to protect our capital base and support effective
capital management.
Integration of risk considerations and capital needs into man-
agement and decision-making processes through the attribution
of risk and allocation of capital to the various business segments.
Group Risk is managed by the Group Chief Risk Officer, who reports
to the Board member responsible for Finance, Controlling and Risk.
Group Risk supports the aforementioned Allianz Group committees
Group Risk
As a general principle, the “first line of defense" rests with busi-
ness managers in the local operating entities and Allianz Investment
Management units. They are responsible, in the first instance, for
both the risks of and returns on their decisions. Our "second line of
defense" is made up of our independent, global oversight functions
such as Risk, Actuarial, Compliance and Legal. Audit forms the “third
line of defense". On a periodic basis, Group Audit independently
reviews risk governance implementation, performs quality reviews of
risk processes, and tests adherence to business standards, including
the internal control framework.
Overall risk organization and roles in risk management
A comprehensive system of risk governance is achieved by setting
standards related to organizational structure, risk strategy and appe-
tite, written policies, limit systems, documentation, and reporting.
These standards ensure the accurate and timely flow of risk-related
information and a disciplined approach towards decision-making
and execution at both the global and local level.
The Group Finance and Risk Committee (GFRC) ensures over-
sight of the Group's and Allianz SE's risk management frame-
work, acting as a primary early-warning function by monitoring
the Allianz Group's and Allianz SE's risk profiles as well as the
availability of capital. The GFRC also ensures that an adequate
relationship between return and risk is maintained. Addition-
ally, the GFRC defines risk standards, forms the limit-setting
authority within the framework set by the Board of Management
and approves major single financing and reinsurance trans-
actions.
The Group Capital Committee supports the Board of Manage-
ment with recommendations regarding the capital structure,
capital allocation, and investment strategy, including the strate-
gic asset allocation.
The Board of Management formulates business objectives and a cor-
responding, consistent risk strategy. The core elements of the risk
framework are set out in the Allianz Group Risk Policy, which is
approved by the Board of Management.
Board of Management
The Risk Committee of the Supervisory Board monitors the effective-
ness of the Allianz risk management and monitoring framework.
Furthermore, it focuses on risk-related developments as well as gen-
eral risks and specific risk exposures.
Supervisory Board
126
Supervisory Board and Board of Management
Within our risk governance system, the Supervisory Board and Board
of Management of Allianz SE have both Allianz SE and Group-wide
responsibilities and have set up committees to provide them with
support. Examples include:
RISK GOVERNANCE STRUCTURE
Communication and transparency: Finally, transparent and
robust risk disclosure provides the basis for communicating this
strategy to our internal and external stakeholders, ensuring a sustain-
able positive impact on valuation and financing. It also strengthens
the risk awareness and risk culture throughout the entire Group.
Risk strategy and risk appetite: Our risk strategy clearly defines
our risk appetite. It ensures that rewards are appropriate for the risks
taken and that the delegated authorities are in line with our overall
risk-bearing capacity. The risk-return profile is improved through the
integration of risk considerations and capital needs into decision-
making processes. This also keeps risk strategy and business objec-
tives consistent with each other and allows us to take opportunities
within our risk tolerance.
Risk reporting and monitoring: Our comprehensive qualitative
and quantitative risk reporting and monitoring framework provides
senior management with the transparency and risk indicators to help
them decide on our overall risk profile and whether it falls within del-
egated limits and authorities. For example, risk dashboards, internal
risk allocation, and limit consumption reports are regularly pre-
pared, communicated and monitored.
Risk underwriting and identification: A sound risk underwriting
and identification framework forms the foundation for adequate risk-
taking and management decisions such as individual transaction
approvals, new product approvals, and strategic asset allocations.
The framework includes risk assessments, risk standards, valuation
methods, and clear minimum standards for underwriting.
For the benefit of shareholders and policyholders alike, our risk
management framework adds value to Allianz SE and its operating
entities through the following four primary components:
This comprehensive framework ensures that risks are identified, ana-
lyzed, assessed, and managed in a consistent manner across the
Group. Our risk appetite is defined by a clear risk strategy and limit
structure. Close risk monitoring and reporting allows us to detect
potential deviations from our risk tolerance at an early stage at both
the Group and operating entity levels.
127
1 - The Allianz Environmental, Social, Governance (ESG) Board and ESG office are constituted as advisor to
the Board of Management of Allianz SE and will further elevate environmental, social, and governance
aspects in corporate governance and decision-making processes at the Allianz Group.
Annual Report 2015 Allianz Group
As a key element of our risk management framework, Allianz's
approach to risk governance enables an integrated management of
local and global risks and ensures that our risk profile remains con-
sistent with our risk strategy and our capacity to bear risks.
Strategic risks are evaluated and analyzed in the strategic and
planning dialogue between Allianz Group and its operating entities.
To ensure proper implementation of strategic goals in the current
business plan, strategic controls are carried out by monitoring
respective business targets. We also constantly monitor market and
competitive conditions, capital market requirements, regulatory
conditions, etc., to decide whether to make strategic adjustments. In
addition, strategic decisions are discussed in various Board of Man-
agement level committees (e.g. Group Capital Committee, Group
Finance and Risk Committee). The assessment of the associated risks
is a fundamental element in these discussions.
Strategic risk is the risk of an unexpected negative change in the
company's value arising from the adverse effect of management
decisions on business strategies and their implementation.
Strategic risk
The risks related to non-compliance or other misconduct are
addressed via various dedicated compliance programs. Written poli-
cies detail the Allianz Group's approach towards the management of
these areas of risk. The implementation and communication of those
compliance programs are monitored by the Group Compliance func-
tion at Allianz SE. In close cooperation with the Risk function of the
Group, the risk-mitigating measures are taken and enforced by a
global network of dedicated compliance functions throughout the
Allianz Group. With respect to financial statements, our internal con-
trol system is designed to mitigate operational risks.¹
Allianz has developed a consistent Group-wide operational risk
management framework that focuses on the early recognition and
proactive management of operational risks in all "first line of defense"-
functions. The framework defines roles and responsibilities, risk pro-
cesses, and methods and has been implemented in our operating
entities. Local risk managers as the "second line of defense" ensure
this framework is implemented in their respective operating entity.
They identify and evaluate relevant operational risks and control
weaknesses via a dialogue between the “first line of defense" and the
risk function. Furthermore, operational risk events are collected in a
central risk event database. In 2015, Allianz also delivered internal loss
data on an anonymized basis to the “Operational Riskdata exchange
Association (ORX)", a global operational loss data insurance consor-
tium, to improve its internal control system and to validate opera-
tional risk parameters in the future. An analysis of the causes of inter-
nal and external losses exceeding € 1 MN is carried out to provide
comprehensive and timely information to senior management and
to share with operating entities, so they can implement measures
aimed at avoiding or reducing future losses.
Operational risks represent losses resulting from inadequate or failed
internal processes, from personnel and systems, or from external
events - including legal and compliance risk, but excluding losses
from strategic and reputational risk.
Operational risk
As for underwriting risks, a positive deviation from the under-
lying parameters will lead to additional returns. For example, lower-
than-expected expenses in our Property-Casualty business will lead
to an improved combined ratio.
125
Annual Report 2015 Allianz Group
2- For further information about insurance risk in the Life/Health business segment, please refer to note 20
to the consolidated financial statements.
For business risk in our Life/Health business segment there were only
minor movements.
8.7%
1- For additional information regarding our internal control over financial reporting, please refer to Controls
over Financial Reporting and Risk Capital from page 131.
8.2%
4,634
4,623
Total Group
3,646
3,687
987
937
2014
2015
Asset Management
Corporate and Other
Share of total Group pre-diversified risk
as of 31 December
ALLIANZ GROUP: RISK PROFILE - ALLOCATED OPERATIONAL RISK BY BUSINESS SEGMENT
(TOTAL PORTFOLIO BEFORE TAX AND NON-CONTROLLING INTERESTS)
as of 31 December
There are certain risks that cannot be fully quantified across the
Group using our partial internal risk capital model. For these risks we
also pursue a systematic approach with respect to identification,
analysis, assessment, monitoring, and steering. In general, the risk
assessment is based on qualitative criteria or scenario analyses. The
most important of these other risks are strategic, liquidity and repu-
tational risk.
OTHER RISKS
The decrease shown in the operational risk is driven by the regular
update of local parameters.
Allianz works on a Cyber and Information Security program on
an ongoing basis, in order to better respond to current external devel-
opments and to further strengthen the internal control environment
around related operational risks.
Major failures and disasters also at our outsourcing providers, which
could cause a severe disruption to our working environment, repre-
sent significant operational risks for the Allianz Group. Our Business
Continuity and Crisis Management framework strives to protect criti-
cal business functions from these shocks and enables them to carry
out their core tasks on time and at the highest standard. Regularly
enhanced, business continuity and crisis activities are embedded in
the company's risk management processes.
10.6%
9.8%
5,669
5,559
707
pre-diversified, € MN
580
686
2,090
2,019
2,166
2,274
2014
2015
Share of total Group pre-diversified risk
Asset Management
Corporate and Other
Total Group
Property-Casualty
Life/Health
686
0.08
47 Litigation, guarantees and other contingencies and commitments
Risk and Opportunity Report and Financial Control
Notes to the Consolidated Balance Sheets
32 Income and expenses from fully consolidated
private equity investments
172
7- Cash and cash equivalents
202
33 - Claims and insurance benefits incurred (net)
172
8- Financial assets carried at fair value through income
202
172
9- Investments
176
10-Loans and advances to banks and customers
203
176
11 - Reinsurance assets
203
177
12-Deferred acquisition costs
203
178
201
31-Other income
201
6-Segment reporting
Notes to the Consolidated Income Statements
141
1 - Nature of operations and basis of presentation
199
26-Premiums earned (net)
141
2 - Summary of significant accounting policies
199
27-Interest and similar income
150
13 Other assets
3- Use of estimates and assumptions
154
4- Recently adopted and issued accounting pronouncements and
28 - Income from financial assets and liabilities carried
at fair value through income (net)
155
changes in the presentation of the consolidated financial statements
5 Consolidation
200
29-Realized gains/losses (net)
201
30- Fee and commission income
157
200
203
180
14- Non-current assets and disposal groups classified as held for sale
20 - Reserves for insurance and investment contracts
207
43 - Derivative financial instruments
193
21 - Financial liabilities for unit-linked contracts
209
44 - Financial instruments and fair value measurement
194
22-Other liabilities
218
190
45 - Interests in unconsolidated structured entities
23 Certificated liabilities
220
196
196
24-Subordinated liabilities
25 - Equity
220
223
226
46 Related party transactions
195
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Other Information
186
203
181
15- Intangible assets
204
34 Change in reserves for insurance and investment
contracts (net)
35-Interest expenses
36-Loan loss provisions
37 - Impairments of investments (net)
38-Investment expenses
19 - Reserves for loss and loss adjustment expenses
39-Acquisition and administrative expenses (net)
185
16- Financial liabilities carried at fair value through income
204
41-Other expenses
185
17- Liabilities to banks and customers
204
42 - Income taxes
186
18-Unearned premiums
40-Fee and commission expenses
C Group Management Report
General Information
Pages 134-242
and opportunities¹
The success of our business is heavily affected by a variety of global,
long-term issues. To ensure our sustainable and profitable growth,
our strategy places a high priority on monitoring, analyzing and
responding to the challenges and opportunities these issues present,
today and tomorrow.
By consistently following our Group strategy, we are confident
that the Allianz Group is in a privileged position to deal with the chal-
lenges and opportunities ahead. The most important of these are
outlined below.
CLIMATE AND DEMOGRAPHIC
CHALLENGES AND OPPORTUNITIES
Global warming could alter our climate and such changes could
result in a range of risks and opportunities that affect our entire busi-
ness. We have a Group-wide strategy covering climate-related risks
and opportunities for our business and our customers: we finance
and insure low-carbon energy projects, such as wind and solar, offer
customers a range of "green" solutions, and provide them with advice
on weather-related risk reduction. As a company we continually
reduce and offset our own carbon emissions. We also incorporate not
only environmental, but also social and governance factors into our
investment and underwriting processes as well as in asset manage-
ment.
Demographic changes are also creating both opportunities and
challenges for financial services providers. While the urban popula-
tions of Asia and Africa are expanding and their middle classes grow-
ing, Western populations are aging and their workforces shrinking.
With more people over 60 years old than ever before and declining
birth rates, social security systems are under pressure and demand
is growing for additional accumulation as well as decumulation
products. We are responding to these trends by providing integrated
insurance and asset management solutions. Our solid market posi-
tion in continental Europe and the United States as well as our strong
brand and well-diversified product portfolio put us in an excellent
position to develop solutions to meet the needs of the retirement,
health care, and assistance markets.
-
In addition, many of the world's industrialized nations are reliant
on infrastructure that is 30 to 50 years old, and yet public-sector
investments in this area have been declining across the board. In
order to upgrade this aging infrastructure, billions of Euros are
required per year – figures that most governments are not able to
cover, especially considering the increase in social security spending
due to demographic effects. At the same time, the current workforce
is faced first and foremost with the need to accumulate adequate
funds for retirement, which is proving very difficult in the sustained
low interest rate environment. We are at the forefront of bringing
1- For further information on the Cautionary note regarding forward-looking statements, please refer to
Outlook 2016 from page 92.
these two challenges together to find solutions for the long term:
bridging the public-sector infrastructure investment gap and provid-
ing profitable retirement provisions. The amendment of the Solvency II
Delegated Regulation reducing the required amount of regulatory
capital for such investments led to increased incentives for insurers
to invest in infrastructure projects. The Allianz Group has multi-year
experience within this asset class and benefits from its scale which
allows direct access to this asset class as the Allianz Group can also
invest in large transactions.
In emerging economies, the need for formal social security systems
is growing due to the weakening of traditional family ties and support
networks. From life to health and crop insurance, our growing micro-
insurance portfolio helps low-income families in developing countries
protect themselves against - and better manage – the risks in life to
build a more secure future. For example, in Asia, Allianz is working
on an insurance model for rice farmers based on satellite technology.
For more information, please refer to Progress in Sustainable
Development from > page 61.
STRATEGIC OPPORTUNITIES FROM DIGITALIZATION
Digitalization is key element of the Renewal Agenda and enables us to
completely transform our business moving forward. Digitalization is
not merely a tool through which we can innovate or streamline our
internal processes; rather, we can also leverage digital technologies
and developments to profoundly reshape the customer experience
journey design of our operations. From creating fully modular prod-
ucts that can be explored and purchased online to enabling manage-
ment of the claims process via an app, we can solidify our customer
focus and become their partner of choice. To ensure that these
advances will not compromise data security and privacy, we are
closely involved in political discussions on the update and modern-
ization of European privacy legislation.
Substantial opportunities arise from entering new digital busi-
nesses and making use of related new technologies. Our recently-
launched partnership with the Chinese company Baidu, as well as
rapidly developing relationships with sharing economy players like
the mobility solution Drivy, prove that we can build: strong alliances
in these evolving markets. We are scaling up our expertise in fields
such as telematics, robo advice, and the Internet of Things, while also
reinforcing our presence in the "FinTech” and “InsurTech" spaces.
These developments aim to make Allianz the leading digital insurer.
Internally, we are investing substantially in our digital growth,
with related investments into the digital transformation in 2015 of
roughly € 650 MN when excluding basic IT investments and main-
tenance. We project that our digital investments will continue at both
the local and global level. With these investments we are also placing
a strong emphasis on building capabilities to enable productivity
gains. By harmonizing our technology and streamlining our opera-
tions, we expect to achieve recurring productivity gains of € 1 BN by
2018 throughout the Allianz Group.
130
Annual Report 2015 Allianz Group
C Group Management Report
Risk and Opportunity Report and Financial Control
112 Risk and Opportunity Report
Further future challenges
129
Annual Report 2015 Allianz Group
Regarding regulatory developments, our second priority is to
ensure that we meet the emerging requirements for G-SII (Global Sys-
temically Important Insurers). Therefore, we will continue to partici-
pate in the capital field-testing exercise conducted by the IAIS (Inter-
national Association of Insurance Supervisors). In addition, we will
continue to further enhance and strengthen our liquidity risk man-
agement framework.
112 Risk and Opportunity Report
131 Controls over Financial Reporting and
Risk Capital
responsible for risk oversight through the analysis and communica-
tion of risk management-related information and by facilitating the
communication and implementation of committee decisions. For
example, Group Risk is operationally responsible for monitoring the
limits and accumulation of specific types of risks across business
lines, such as natural disasters and exposures to financial markets
and counterparties.
In addition, Group Risk independently supports the adequacy of
the operating entities' risk management through the development of
a common risk management framework and by monitoring adher-
ence to Group minimum requirements for methods and processes.
Group Risk strengthens the Group's risk network through regular and
close interaction with the operating entities' management and with
key areas such as the local finance, risk, actuarial and investment
departments. A strong risk network across the Group allows us to
identify risks early and bring them to the attention of management.
Operating entities
Operating entities are responsible for their own risk management,
including adherence to both external requirements (for example,
those imposed by local regulators) and internal Group-wide stan-
dards. The operating entities' Board of Management is responsible for
setting and approving a local risk strategy during the annual Strategic
and Planning Dialogues with the Group and for ensuring operating
entities' adherence to their risk strategy.
All business line management functions with a direct profit and
loss responsibility (i.e. "first line of defense”, or “risk-taking units")
are in charge of active risk-return management through adherence
to delegated limits and the operating entity's policy framework.
"Second line of defense"-functions support, challenge and have the
oversight of business functions through proactive risk management.
A risk function that is independent from the business line man-
agement is established by each operating entity. This function oper-
ates under the direction of the operating entity's Chief Risk Officer. In
addition, a local Risk Committee supports both the operating entity's
Board of Management and the Chief Risk Officer by acting as the pri-
mary risk controlling body. Group Risk is also represented on the local
Risk Committees to enhance the risk dialogue between the Group
and the operating entities.
Other functions and bodies
In addition to Group Risk and the operating entities' risk functions,
legal and compliance and actuarial functions have been established
at both the Group and operating entity level, constituting additional
components of the "second line of defense".
131 Controls over Financial Reporting and
Risk Capital
Group Legal and Compliance seeks to mitigate legal risks with
support from other departments. Legal risks include legislative
changes, litigation and disputes, regulatory proceedings and con-
tractual clauses that are unclear or construed differently by the
courts. Compliance risk is the risk of legal or regulatory sanctions,
Group Actuarial contributes towards assessing and managing
risks in line with regulatory requirements. These risks stem from the
risk-taking/mitigating activities involving professional actuarial
experience. The role includes, but is not limited to, the activities of:
-
calculation and oversight of technical reserves for accounting
and regulatory purposes,
pricing and profitability oversight,
technical actuarial support of business planning, reporting and
result monitoring,
contribution to the effective implementation of the risk manage-
ment system.
In order to adapt to a continually changing environment, the Global
Issues Forum (GIF) supports the Group in the assessment of long-
term trend changes in the risk landscape on a timely basis. As an
active participant of the Emerging Risk Initiative of the Chief Risk
Officer Forum, we monitor with other chief risk officers of major Euro-
pean insurance companies and financial conglomerates the industry-
wide risk landscape and raise awareness of major risks for the insur-
ance industry.
Risk management priorities for 2016
In addition to maintaining our high standards and practices in day-
to-day risk management and controlling, Allianz has set the following
priorities for 2016:
Our first priority is to further embed our partial internal model
into business steering, for example by providing sound information
on potential impacts of management decisions on the Allianz risk
profile.
material financial loss, or loss to reputation that an undertaking may
suffer as a result of not complying with applicable laws, regulations,
and administrative provisions. The objectives of Group Legal and
Compliance are to ensure that laws and regulations are observed,
to react appropriately to all impending legislative changes or new
court rulings, to attend to legal disputes and litigation, and to provide
legally appropriate solutions for transactions and business processes.
In addition, Group Legal and Compliance is responsible for integrity
management, which aims to protect the Allianz Group, our operating
entities and employees from regulatory risks.
Controls over Financial Reporting and Risk Capital
Statements pursuant to § 289 (5) and § 315 (2) no. 5 of the German Commercial
Code ("Handelsgesetzbuch- HGB") and explanatory report.
Internal controls over financial reporting
FURTHER CONTROL MECHANISMS
In our opinion, a strong internal control environment is key to manag-
ing our company successfully and to reinforce trust with our stake-
holders. In addition to ICOFR, for example, we have implemented an
enhanced internal control environment across our largest Life insur-
ance operating entities for the Market Consistent Embedded Value
(MCEV) reporting process.
Risk capital controls
Similar to our ICOFR framework, we have also established a robust
and comprehensive control concept in the risk capital calculation and
aggregation process, since our internal risk capital calculations
incorporate economic factors that are not fully reflected in the
accounting results. We have put in place additional controls within
our management reporting processes to ensure that these additional
estimates are adequately controlled and that the data quality is
accurate, consistent and complete.
These controls include the validation of models and assumptions
by independent reviews and continuous benchmarking to market and/
or peer assumptions and practices. We benchmark and explain our
non-market assumptions against practices in the industry, actuarial
associations and guidance from supervisory authorities.
132
Annual Report 2015 Allianz Group
CONSOLIDATED
FINANCIAL STATEMENTS
D
Subsidiaries within the scope of our control system are individu-
ally responsible for adhering to the Group's internal governance and
control policy and for creating local Disclosure Committees that are
similar to the Group-level committee. The entities' CEOS and CFOS
provide periodic sign-offs to the management of Allianz SE, certifying
the effectiveness of their local system of internal controls as well as
the completeness, accuracy and reliability of financial data reported
to the Holding.
Annual Report 2015
Allianz Group
D_CONSOLIDATED
FINANCIAL STATEMENTS
135 CONSOLIDATED BALANCE SHEETS
136
CONSOLIDATED INCOME STATEMENTS
137
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
138 CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
139 CONSOLIDATED STATEMENTS OF CASH FLOWS
133
141
The Group Disclosure Committee ensures that these board
members are made aware of all material information that could
affect our disclosures and assesses the completeness and accuracy
of the information provided in the quarterly and annual financial
reports. The committee met on a quarterly basis before the financial
reports were issued.
GOVERNANCE
In line with both our prudent approach to risk governance and com-
pliance with regulatory requirements, we have created a structure to
identify and mitigate the risk of material errors in our consolidated
financial statements. Our internal control system over financial
reporting (ICOFR) is based on the revised framework developed by the
Committee of Sponsoring Organizations of the Treadway Commission
(COSO) in 2013 and is regularly reviewed and updated. Our approach
also includes the following five interrelated components: Control
Environment, Risk Assessment, Control Activities, Information and
Communication, and Monitoring. These five components are covered
by an Entity Level Control Assessment Process (ELCA), IT General
Controls (ITGC) and controls at process levels. The ELCA framework
contains controls such as a compliance program or committee gover-
nance structure. In the ITGC framework we implemented, for example,
controls regarding access right management and project and change
management controls.
ACCOUNTING AND CONSOLIDATION PROCESSES
The accounting and consolidation processes we use to produce con-
solidated financial statements are based on a central consolidation
and reporting IT solution and local general ledger solutions. The latter
are largely harmonized throughout the Group, using standardized
processes, master data, posting logics and interfaces for data delivery
to the Holding. Access rights to accounting systems are managed
according to strict authorization procedures.
Accounting rules for the classification, valuation and disclosure
of all items in the balance sheet, income statement and related notes
of the annual and interim financial statements are primarily defined
in our Group accounting manual. Internal controls are embedded in
the accounting and consolidation processes to safeguard the accuracy,
completeness and consistency of the information provided in the
financial statements.
INTERNAL CONTROL SYSTEM APPROACH
INTERNAL CONTROL SYSTEM APPROACH
PROCESS
Scoping
Determination of significant accounts
and operating entities to be covered by
system of internal control
Identify risks
Identification of risk scenarios that
could result in a material financial
misstatement
Responsibility for ensuring the completeness, accuracy and reliability
of our consolidated financial statements rests with the Chairman of
the Board of Management and the Board member responsible for
Finance, Controlling and Risk of Allianz SE, supported by Group Center
functions, the Group Disclosure Committee and operating entities.
Implement key controls
Implementation of key controls
that prevent or detect errors or
fraud resulting from risk scenarios
Assessment of the design and operating
effectiveness of key controls
Annual Report 2015 Allianz Group
131
Our approach can be summarized as follows:
-
-
We use a top-down, risk-based approach to determine the
accounts and operating entities that should fall under the scope
of our internal control system over financial reporting. The meth-
odology is described in our ICOFR manual. During the scoping
process, materiality and susceptibility to a misstatement are
considered simultaneously. The final results are documented in
the list of operating entities under the scope of ICOFR as well as
in the list of significant accounts. In addition to the quantitative
ICOFR calculation, we also consider qualitative criteria - such as
expected increase in business volume - which are provided by
different Group Centers, Group Audit and external Audit.
Then, our local entities identify risks that could lead to material
financial misstatements including all relevant root causes (i.e.
human processing errors, fraud, system weaknesses, external
factors, etc.). After identifying and analyzing the risks, the poten-
tial impacts and occurrence probabilities are evaluated.
Preventive and detective key controls over the financial reporting
process have been put in place to reduce the likelihood and the
impact of financial misstatements. If a potential risk material-
izes, actions are taken to reduce the impact of the financial mis-
statement. Given the strong dependence of financial reporting
processes upon information technology systems, we also imple-
ment IT controls.
Finally, we focus on ensuring that controls are appropriately
designed and effectively executed to mitigate risk. We have set
consistent documentation requirements across the Allianz
Group for elements such as processes, related key controls and
their execution. We conduct an annual assessment of our control
system to maintain and continuously enhance its effectiveness.
Group Audit and local internal audit functions ensure that the
overall quality of our control system is subjected to regular con-
trol-testing, to assure reasonable design and operating effective-
ness. Internal Audit does so through a comprehensive risk-based
approach, which holistically assesses the key controls of the
company's internal procedures and processes, including local
and Group internal controls over financial reporting.
Assessment
Annual Report 2015 Allianz Group
381
50 - Restructuring plans
Items that may never be reclassified to profit or loss
Subtotal
Changes arising during the year
Reclassifications to net income
Miscellaneous
Subtotal
Changes arising during the year
Reclassifications to net income
Share of other comprehensive income of associates and joint ventures
Subtotal
Changes arising during the year
Reclassifications to net income
Cash flow hedges
Subtotal
Changes arising during the year
Reclassifications to net income
Available-for-sale investments
Subtotal
Changes arising during the year
Reclassifications to net income
Foreign currency translation adjustments
Items that may be reclassified to profit or loss in future periods
Other comprehensive income
Actuarial gains and losses on defined benefit plans
Net income
Total other comprehensive income
Total comprehensive income attributable to:
Non-controlling interests
50
(41)
34
(7)
7,176
(2,973)
7,817
(1,694)
(641)
(1,279)
1,431
1,078
1,428
993
2
85
6,603
6,987
2014
2015
Annual Report 2015 Allianz Group
For further details concerning income taxes relating to components
of the other comprehensive income, please see note 42 Income taxes.
Shareholders
Total comprehensive income
€ MN
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Income before income taxes
(94,314)
(100,640)
Total expenses
(720)
(792)
32
Expenses from fully consolidated private equity investments
(135)
(129)
41
Other expenses
(16)
(231)
50
Restructuring charges
(123)
(322)
15
Amortization of intangible assets
(3,238)
(3,777)
40
Income taxes
Net income
10,196
8,848
139 Consolidated Statements of Cash Flows
141 Notes
138 Consolidated Statements of
Changes in Equity
137 Consolidated Statements of
Comprehensive Income
135 Consolidated Balance Sheets
136 Consolidated Income Statements
D- Consolidated Financial Statements
13.64
14.55
51
13.71
14.56
51
(48)
6,221
48 - Pensions and similar obligations
371
Annual Report 2015 Allianz Group
136
Diluted earnings per share (€)
Basic earnings per share (€)
Net income attributable to:
Non-controlling interests
Shareholders
6,603
(2,245)
(3,209)
6,987
42
6,616
85
1
79
5,202
(3,001)
1,053
7,151
Total comprehensive income¹
63,702
2,955
60,747
13,917
(1,977)
19,878
28,928
Balance as of 31 December 2014
(2,716)
(311)
(2,405)
(2,405)
Dividends paid
(78)
(33)
(45)
(4)
(41)
414
5,617
Paid-in capital
Treasury shares
1- Total comprehensive income in shareholders' equity for the year ended 31 December 2015 comprises
net income attributable to shareholders of € 6,616 MN (2014: € 6,221 MN).
66,099
2,955
63,144
10,920
(926)
24,222
28,928
Balance as of 31 December 2015
(3,382)
(270)
Transactions between equity holders
(3,112)
Dividends paid
99
(144)
244
4
(3)
243
Transactions between equity holders
63
63
63
(3,112)
Fee and commission expenses
(1)
(1)
Retained
Non-
Unrealized
Foreign
currency
€ MN
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
137
534
13,056
5,202
414
13,590
5,617
6,988
(1,607)
470
(1,370)
(151)
23
(151)
23
54
80
54
Paid-in capital
earnings
translation gains and losses
adjustments
Shareholders'
Treasury shares
59
59
59
Paid-in capital
13,590
534
13,056
7,176
1,340
4,540
(1)
Total comprehensive income¹
2,765
50,083
6,742
(3,313)
17,786
28,869
Balance as of 1 January 2014
Total equity
controlling
interests
equity
(net)
52,849
229
(23,343)
39
Liabilities to banks and customers
Financial liabilities carried at fair value through income
LIABILITIES AND EQUITY
805,787
848,942
Total assets
13,755
13,443
15
Intangible assets
235
109
14
Non-current assets and assets of disposal groups classified as held for sale
37,080
38,813
13
Other assets
1,046
1,394
42
22,262
25,234
Unearned premiums
12
16
8,496
Other liabilities
4,932
4,003
42
Deferred tax liabilities
94,564
105,873
21
Financial liabilities for unit-linked contracts
463,334
486,222
20
Reserves for insurance and investment contracts
68,989
72,003
19
Reserves for loss and loss adjustment expenses
19,800
20,660
18
23,015
25,531
17
9,207
22
Deferred tax assets
Deferred acquisition costs
as of 31 December
€ MN
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS
139 Consolidated Statements of Cash Flows
141 Notes
138 Consolidated Statements of
Changes in Equity
137 Consolidated Statements of
Comprehensive Income
135 Consolidated Balance Sheets
136 Consolidated Income Statements
D- Consolidated Financial Statements
Auditor's report
242
241
Responsibility statement
List of participations of the Allianz Group as of
31 December 2015 according to § 313 (2) HGB
234
Annual Report 2015 Allianz Group
134
53 - Subsequent events
233
52 Other information
231
51-Earnings per share
231
ASSETS
Cash and cash equivalents
Financial assets carried at fair value through income
Investments
13,587
14,843
11
Reinsurance assets
94,564
105,873
Financial assets for unit-linked contracts
117,075
117,630
10
486,445
22
509,493
9
5,875
7,268
8
13,863
14,842
7
2014
2015
note
Loans and advances to banks and customers
138
38,686
38,609
Liabilities of disposal groups classified as held for sale
(52,140)
(54,472)
Claims and insurance benefits incurred (gross)
103,161
110,836
Total income
696
732
32
Income from fully consolidated private equity investments
216
476
31
Other income
10,119
10,945
30
Fee and commission income
4,017
7,937
29
Realized gains/losses (net)
(1,604)
Claims and insurance benefits incurred (ceded)
2,770
2,490
Claims and insurance benefits incurred (net)
Acquisition and administrative expenses (net)
(961)
(1,094)
38
Investment expenses
(894)
(1,526)
37
Impairments of investments (net)
(45)
(60)
(2,307)
36
(1,261)
(1,224)
35
Interest expenses
(13,929)
(14,065)
34
Change in reserves for insurance and investment contracts (net)
(49,650)
(51,702)
33
Loan loss provisions
(25,718)
28
21,443
25
2,955
2,955
60,747
63,144
Total liabilities and equity
Total equity
Non-controlling interests
Shareholders' equity
742,085
782,843
Total liabilities
12,037
12,258
24
Participation certificates and subordinated liabilities
8,207
8,383
23
Certificated liabilities
102
18
14
66,099
63,702
848,942
805,787
22,408
27
Interest and similar income
68,274
70,645
26
Premiums earned (net)
(1,146)
(543)
Change in unearned premiums
(4,463)
Income from financial assets and liabilities carried at fair value through income (net)
(5,536)
76,723
Ceded premiums written
Gross premiums written
2014
2015
note
€ MN
CONSOLIDATED INCOME STATEMENTS
CONSOLIDATED INCOME STATEMENTS
135
Annual Report 2015 Allianz Group
73,883
49 Share-based compensation plans
(6,407)
135 Consolidated Balance Sheets
136 Consolidated Income Statements
Certificated liabilities (Other liabilities)
Derivative financial instruments used for hedging that meet
the criteria for hedge accounting and firm commitments
Financial liabilities for puttable equity instruments
Financial liabilities designated at fair value through income
Liabilities to banks and customers (Other liabilities)
Financial liabilities for unit-linked contracts
Other liabilities
Financial liabilities held for trading
Financial liabilities carried at fair value through income
FINANCIAL LIABILITIES
Derivative financial instruments used for hedging that meet
the criteria for hedge accounting and firm commitments
Other assets
Financial assets for unit-linked contracts
(Loans and receivables)
Loans and advances to banks and customers
Held-to-maturity investments
Available-for-sale investments
Financial assets designated at fair value through income
Investments
Financial assets held for trading
Financial assets carried at fair value through income
Cash and cash equivalents
FINANCIAL ASSETS
IAS 39 CATEGORIES AND IFRS 7 CLASSES OF FINANCIAL INSTRUMENTS
BALANCE SHEET LINE ITEMS,
The following table summarizes the relationship between balance
sheet positions and classes of financial instruments according to
IFRS 7. The balance sheet positions are the same as the IAS 39 catego-
ries except when noted in parentheses.
Disclosures relating to financial instruments
Derivative financial instruments designated in hedge accounting
relationships are included in the line item other assets and liabilities.
Freestanding derivatives are included in the line item financial assets
or liabilities held for trading. For further information on derivatives,
please refer to note 43 Derivative financial instruments.
Subordinated liabilities (Other liabilities)
The Allianz Group discontinues hedge accounting prospectively
when the hedge is no longer expected to be highly effective, when the
derivative financial instrument or the hedged item expires, or is sold,
terminated or exercised, or when the Allianz Group decides that
hedge accounting is no longer appropriate.
Measurement basis
Fair value
Fair value
138 Consolidated Statements of
Changes in Equity
137 Consolidated Statements of
Comprehensive Income
136 Consolidated Income Statements
135 Consolidated Balance Sheets
D- Consolidated Financial Statements
Annual Report 2015 Allianz Group
144
Held-to-maturity investments are debt securities with fixed or deter-
minable payments and fixed maturities, for which the Allianz Group
has the positive intent and ability to hold to maturity. These securities
are initially recognized at fair value and subsequently measured at
amortized cost using the effective interest method.
Held-to-maturity investments
Available-for-sale investments comprise debt and equity securities
that are designated as available-for-sale or are not classified as held-
to-maturity, loans and advances, or financial assets carried at fair
value through income. Available-for-sale investments are initially
recognized and subsequently measured at fair value. Unrealized
gains and losses, which are the difference between fair value and cost
or amortized cost, are recognized as a separate component of other
comprehensive income, net of deferred taxes and the latent reserves
for premium refunds to the extent that policyholders will participate
in such gains and losses on the basis of statutory or contractual regu-
lations when they are realized. When an available-for-sale invest-
ment is derecognized or determined to be impaired, the cumulative
gain or loss previously recorded in other comprehensive income is
transferred and recognized in the consolidated income statement.
Realized gains and losses on securities are generally determined by
applying the average cost method at the subsidiary level.
Available-for-sale investments
INVESTMENTS
Financial assets and liabilities are designated at fair value
through income to eliminate or significantly reduce an accounting
mismatch. Subsidiaries must reach out to the Allianz Group Account-
ing and Reporting Department for approval before designating any
financial asset or liability as at fair value through income.
Financial assets and liabilities carried at fair value through income
include financial assets and liabilities held for trading as well as
financial assets and liabilities designated at fair value through
income. Financial assets and liabilities held for trading consist of
debt and equity securities that have been principally acquired for the
purpose of generating a profit from short-term fluctuations in price
or for the purpose of selling in the near future as well as of derivative
financial instruments, which include bifurcated embedded deriva-
tives of hybrid financial instruments and of insurance contracts.
CARRIED AT FAIR VALUE THROUGH INCOME
FINANCIAL ASSETS AND LIABILITIES
Cash and cash equivalents include balances with banks payable on
demand, balances with central banks, cash on hand, treasury bills to
the extent they are not included in financial assets held for trading,
as well as checks and bills of exchange that are eligible for refinancing
at central banks, subject to a maximum term of three months from
the date of acquisition.
CASH AND CASH EQUIVALENTS
Fair value
Redemption amount
Amortized cost
Amortized cost
Fair value
Fair value
Amortized cost
Fair value
Fair value
Amortized cost
Fair value
Fair value
Amortized cost
Nominal value
proportion of gains or losses arising from the measurement of the
derivative financial instrument is recognized in foreign currency
translation adjustments in equity, while any ineffectiveness is recog-
nized directly in income from financial assets and liabilities carried
at fair value through income (net).
143
Annual Report 2015 Allianz Group
Recognition and initial measurement
FINANCIAL INSTRUMENTS
For the purposes of the consolidated financial statements, the results
and financial position of each of the Allianz Group's subsidiaries are
expressed in Euro, the presentation currency of the Allianz Group.
Assets and liabilities of subsidiaries not reporting in Euro are trans-
lated at the closing rate on the balance sheet date and income and
expenses are translated at the quarterly average exchange rate. Any
foreign currency translation differences, including those arising from
the equity method, are recorded in other comprehensive income.
to the presentation currency
Translation from the functional currency
recorded at the exchange rate prevailing on the date of the trans-
action. At the balance sheet date, monetary assets and liabilities
denominated in foreign currencies are translated into the functional
currency using the closing exchange rate. Non-monetary assets and
liabilities denominated in foreign currencies that are measured at
historical cost are translated at historical rates and non-monetary
items that are measured at fair value are translated using the closing
rate. Foreign currency gains and losses arising from foreign currency
transactions are reported in income from financial assets and liabil-
ities carried at fair value through income (net), except when the gain
or loss on a non-monetary item measured at fair value is recognized
in other comprehensive income. In this case, any foreign exchange
component of that gain or loss is also recognized in other compre-
hensive income.
The individual financial statements of each of the Allianz Group's
subsidiaries are prepared in the prevailing currency in the primary
economic environment where the subsidiary conducts its ordinary
activities (its functional currency). Transactions recorded in curren-
cies other than the functional currency (foreign currencies) are
Translation from any foreign currency
to the functional currency
FOREIGN CURRENCY TRANSLATION
In some jurisdictions the ability of associates and joint arrange-
ments to transfer funds to the Allianz Group in the form of dividends
or to repay loans is subject to local corporate or insurance laws and
regulations and solvency requirements.
The Allianz Group accounts for all material investments in asso-
ciates and joint arrangements with a time lag of no more than three
months. Income from investments in associates and joint arrange-
ments-excluding distributions - is included in interest and similar
income. Accounting policies of associates and joint arrangements are
adjusted where necessary to ensure consistency with the accounting
policies adopted by the Allianz Group.
Joint arrangements are structures over which the Allianz Group
and one or more other parties contractually agreed of sharing con-
trol, which exists only when decisions over the relevant activities
require the unanimous consent of the parties sharing control. Joint
arrangements whereby the Allianz Group has rights to the net assets
of the arrangement (joint ventures) are generally accounted for using
the equity method.
Associates are entities over which the Allianz Group can exercise
significant influence. In general, if the Allianz Group holds 20% or more
of the voting power in an investee but does not control the investee,
it is assumed to have significant influence, unless it can be clearly
demonstrated that this is not the case. Investments in associates are
generally accounted for using the equity method.
Associates and joint arrangements
Business combinations are accounted for using the acquisition
method. Non-controlling interests in the acquiree can be measured
either at the acquisition date fair value or at the non-controlling inter-
est's proportionate share of the acquiree's identifiable net assets.
This option is exercised on a case-by-case basis.
Business combinations including acquisitions
and disposals of non-controlling interests
In some jurisdictions the ability of subsidiaries to transfer funds
to the parent company in the form of dividends or to repay loans is
subject to local corporate or insurance laws and regulations as well
as solvency requirements.
Third-party assets held in an agency or fiduciary capacity are not
assets of the Allianz Group and are not presented in these consoli-
dated financial statements.
141
Annual Report 2015 Allianz Group
Subsidiaries are consolidated as from the date on which control
is obtained by the Allianz Group, up to the date on which the Allianz
Group no longer maintains control. Accounting policies of subsidiar-
ies are adjusted where necessary to ensure consistency with the
accounting policies adopted by the Allianz Group. The effects of intra-
Allianz Group transactions are eliminated.
In line with IFRS 10, the consolidated financial statements of the
Allianz Group comprise the financial statements of Allianz SE and its
subsidiaries (including certain investment funds and structured
entities) over which the Allianz Group has control. The Allianz Group
controls a subsidiary when it is exposed to, or has rights to, variable
returns from its involvement with the subsidiary and has the ability
to affect those returns through its power over the subsidiary. Power
over a subsidiary arises when the Allianz Group has existing rights
that give it the current ability to direct the relevant activities of the
subsidiary. This is usually the case when the Allianz Group owns
more than half of the voting rights or similar rights. In order to deter-
mine whether control exists, potential voting rights that are currently
exercisable or convertible are taken into consideration. Where sub-
sidiaries have been designed so that voting or similar rights are not
the dominant factor of control, such as when any voting rights relate
to administrative tasks only and returns are directed by means of
contractual arrangements, control is assessed on the basis of the
Allianz Group's level of involvement in defining the terms and fea-
tures of these contractual arrangements, as is the case for structured
entities. In the case of investment funds managed by Allianz Group
internal asset managers, the control assessment considers whether
the Allianz Group is in a principal or agent role with a view to the
investment funds assessed. This assessment takes into account kick-
out rights held by third-party investors as well as the aggregate eco-
nomic interest of the Allianz Group in the investment funds assessed.
Scope of consolidation
Financial assets are generally recognized and derecognized on the
trade date, i.e. when the Allianz Group commits to purchase or sell
securities or incur a liability. Financial instruments are initially recog-
nized at fair value plus, in the case of financial instruments not carried
at fair value through income, directly attributable transaction costs.
Offsetting
Financial assets and liabilities are offset and the net amount is pre-
sented in the balance sheet only when there is a legally enforceable
right to offset the recognized amounts and there is an intention to
either settle on a net basis, or to realize the asset and settle the liability
simultaneously.
Derecognition
Furthermore, hedge accounting may be applied to derivative
financial instruments used to hedge the foreign currency risk asso-
ciated with a net investment in a foreign operation. The effective
Cash flow hedges offset the exposure to variability in expected
future cash flows that is attributable to a particular risk associated
with a recognized asset or liability or a highly probable forecasted
transaction. Changes in the fair value of a derivative financial instru-
ment that represent an effective hedge are recorded in unrealized
gains and losses (net) in equity and are transferred to the consoli-
dated income statement when the offsetting gain or loss associated
with the hedged item is recognized. Any ineffectiveness of the cash
flow hedge is recognized directly in income from financial assets and
liabilities carried at fair value through income (net).
Fair value hedges are hedges of a change in the fair value of a
recognized financial asset or liability or an unrecognized firm com-
mitment due to a specified risk. Changes in the fair value of a deriva-
tive financial instrument, together with the change in fair value of the
hedged item attributable to the hedged risk, are recognized in income
from financial assets and liabilities carried at fair value through
income (net).
For derivative financial instruments used in hedge transactions that
meet the criteria for hedge accounting, the Allianz Group designates
the derivative as a hedging instrument in a fair value hedge, cash flow
hedge, or hedge of a net investment in a foreign operation. The Allianz
Group documents the hedge relationship, as well as its risk manage-
ment objective and strategy for entering into the hedge transaction.
The Allianz Group assesses, both at the hedge's inception and on an
ongoing basis, whether the hedging instruments used are expected
to be highly effective in offsetting changes in fair values or cash flows
of the hedged items.
Hedge accounting
any
An available-for-sale equity security is considered to be impaired
if there is objective evidence that the cost may not be recovered.
Objective evidence that the cost may not be recovered, in addition to
qualitative impairment criteria, includes a significant or prolonged
decline in the fair value below cost. The Allianz Group's policy consid-
ers a decline to be significant if the fair value is below the weighted
average cost by more than 20%. A decline is considered to be prolonged
if the fair value is below the weighted average cost for a period of more
than nine months. If an available-for-sale equity security is impaired,
further declines in the fair value at subsequent reporting dates
are recognized as impairments. Therefore, at each reporting period,
for an equity security that was determined to be impaired, additional
impairments are recognized for the difference between the fair value
and the original cost basis, less any previously recognized impair-
ment. Reversals of impairments of available-for-sale equity securities
are not recorded through the income statement but recycled out of
other comprehensive income when sold.
to banks and customers have an investment character and valuation
allowances are reported as 'impairments of investments'.
For banking entities, valuation allowances of their loan book are
reported as loan loss allowances. For all non-banking entities, loans
A held-to-maturity or available-for-sale debt security, as well as a
loan, is impaired if there is objective evidence that a loss event has
occurred after initial recognition and up to the relevant date of the
Allianz Group's consolidated balance sheet, and that loss event has
negatively affected the estimated future cash flows, i.e. amounts due
according to the contractual terms of the security are not considered
collectible. Once impairment is triggered for an available-for-sale
debt instrument, the cumulative loss recognized in the other com-
prehensive income is reclassified to profit or loss. The cumulative
loss corresponds to the difference between amortized cost and the
current fair value of the investment. Further declines in fair value are
recognized in other comprehensive income unless there is further
objective evidence that such declines are due to a credit-related loss
event. If in subsequent periods objective evidence results in a fair
value increase after the impairment loss was recognized, the impair-
ment loss is reversed through the income statement. The reversal is
measured as the lesser of the full original impairment loss previ-
ously recognized in the income statement and the subsequent
increase in fair value. For held-to-maturity investments and loans,
the impairment loss is measured as the difference between the
amortized cost and the expected future cash flows using the original
effective interest rate. If the amount of the impairment of a held-to-
maturity debt security or a loan subsequently increases or decreases
due to an event occurring after the initial measurement of impair-
ment, the change is recorded in the income statement.
Impairments
139 Consolidated Statements of Cash Flows
141 Notes
Securities borrowing transactions generally require the Allianz
Group to deposit cash with the security's lender. Fees paid are reported
as interest expenses.
The Allianz Group enters into securities lending transactions and
repurchase agreements. If all of the risks and rewards of the securities
remain substantially with the Allianz Group these securities are not
derecognized. Cash received as collateral in securities lending trans-
actions is recognized together with a corresponding liability, whereas
securities received as collateral are not recognized under the terms
of the agreements if risks and rewards have not been transferred.
Securities lending and repurchase agreements
139 Consolidated Statements of Cash Flows
141 Notes
138 Consolidated Statements of
Changes in Equity
137 Consolidated Statements of
Comprehensive Income
136 Consolidated Income Statements
135 Consolidated Balance Sheets
D- Consolidated Financial Statements
Annual Report 2015 Allianz Group
142
A financial asset is derecognized when the contractual rights to the
cash flows from the financial asset expire or the Allianz Group trans-
fers the asset and substantially all of the risks and rewards of owner-
ship. A financial liability is derecognized when it is extinguished.
For repurchase agreements, the proceeds received from the sale
are reported under liabilities to banks or customers. Interest expenses
from such transactions are accrued over the duration of the agree-
ments and reported in interest expenses. If for reverse repo trans-
actions all of the risks and rewards of the securities remain substan-
tially with the counterparty over the entire lifetime of the agreement,
the securities concerned are not recognized as assets. The amounts
of cash disbursed are recorded under loans and advances to banks
and customers. Interest income on reverse repo agreements is
accrued over the duration of the agreements and is reported in inter-
est and similar income.
Funds held by others
under reinsurance contracts assumed
Funds held by others under reinsurance contracts assumed relate to
cash deposits to which the Allianz Group is entitled, but which the
ceding insurer retains as collateral for future obligations of the
Allianz Group. The cash deposits are recorded at face value, less any
impairment for balances that are deemed not to be recoverable.
RESERVES FOR INSURANCE AND INVESTMENT CONTRACTS
Reserves for insurance and investment contracts include aggregate
policy reserves, reserves for premium refunds and other insurance
In general, reserves for loss and loss adjustment expenses are
not discounted, except when payment amounts are fixed and timing
is reasonably determinable. Discounted loss reserves as well as their
unwinding are presented within reserves for insurance and invest-
ment contracts to better reflect the nature of the reserves and to only
reflect the net underwriting result within the key performance indi-
cator combined ratio.
IBNR reserves are established to recognize the estimated cost of
losses that have occurred but where the Allianz Group has not yet
been notified. IBNR reserves, similar to case reserves for reported
claims, are established to recognize the estimated costs, including
expenses, necessary to bring claims to final settlement. The Allianz
Group relies on its past experience, adjusted for current trends and
any other relevant factors to estimate IBNR reserves. IBNR reserves are
estimates based on actuarial and statistical projections of the
expected cost of the ultimate settlement and administration of
claims. The analyses are based on facts and circumstances known at
the time, predictions of future events, estimates of future inflation
and other societal and economic factors. Trends in claim frequency,
severity and time lag in reporting are examples of factors used in pro-
jecting the IBNR reserves. IBNR reserves are reviewed and revised peri-
odically as additional information becomes available and actual
claims are reported.
Case reserves for reported claims are based on estimates of
future payments that will be made with respect to claims, including
LAE relating to such claims. The estimates reflect the informed judg-
ment of claims personnel based on general insurance reserving
practices and knowledge of the nature and value of a specific type of
claim. These case reserves are regularly re-evaluated in the ordinary
course of the settlement process and adjustments are made as new
information becomes available.
RESERVES FOR LOSS AND LOSS ADJUSTMENT EXPENSES
Reserves are established for the payment of losses and loss adjust-
ment expenses (LAE) on claims which have occurred but are not yet
settled. Reserves for loss and loss adjustment expenses fall into two
categories: case reserves for reported claims and reserves for incurred
but not reported losses (IBNR).
Amounts charged as consideration for origination of certain
long-duration insurance contracts (i.e. initiation or front-end fees)
are reported as unearned revenue which are included in unearned
premiums. These fees are recognized using the same amortization
methodology as DAC.
For short-duration insurance contracts like most of the property and
casualty contracts, premiums to be earned in future years are recorded
as unearned premiums. These premiums are earned in subsequent
periods in relation to the insurance coverage provided.
UNEARNED PREMIUMS
For other long-duration contracts, if the present value of esti-
mated gross profits or margins plus unearned revenue liability, if
applicable, will not be sufficient to recover DAC, a premium deficiency
is recognized.
For traditional long-duration contracts and limited-payment
contracts, if actual experience regarding investment yields, mortality,
morbidity, terminations or expense indicates that existing contract
liabilities, along with the present value of future gross premiums, will
not be sufficient to cover the present value of future benefits and to
recover DAC, a premium deficiency is recognized.
Liability adequacy tests are performed for each insurance portfolio
on the basis of estimates of future claims, costs, premiums earned,
and proportionate investment income. For short-duration contracts,
a premium deficiency is recognized if the sum of expected claim
costs and claim adjustment expenses, expected dividends to policy-
holders, DAC, and maintenance expenses exceeds related unearned
premiums while considering anticipated investment income.
Liability adequacy tests
in accordance with the conditions of the reinsurance contracts, and
in consideration of the original contracts for which the reinsurance
was concluded.
139 Consolidated Statements of Cash Flows
141 Notes
138 Consolidated Statements of
Changes in Equity
137 Consolidated Statements of
Comprehensive Income
135 Consolidated Balance Sheets
136 Consolidated Income Statements
D- Consolidated Financial Statements
Annual Report 2015 Allianz Group
146
The Allianz Group's consolidated financial statements reflect the
effects of ceded and assumed reinsurance contracts. Assumed rein-
surance refers to the acceptance of certain insurance risks by the
Allianz Group that other companies have underwritten. Ceded rein-
surance refers to the transfer of insurance risk, along with the respec-
tive premiums, to one or more reinsurers who will share in the risks.
When the reinsurance contracts do not transfer significant insurance
risk, deposit accounting is applied as required under the related rein-
surance accounting provisions of US GAAP or under IAS 39. Assumed
reinsurance premiums, commissions and claim settlements, as well
as the reinsurance element of technical provisions are accounted for
Reinsurance contracts
Insurance contracts and investment contracts with discretionary
participating features are accounted for under the insurance
accounting provisions of US GAAP, as at first-time adoption of IFRS 4
on 1 January 2005, where IFRS 4 does not provide specific guidance.
Investment contracts without discretionary participation features
are accounted for as financial instruments in accordance with IAS 39.
reserves.
Aggregate policy reserves
The aggregate policy reserves for participating life insurance contracts
are calculated using the net level premium method based on assump-
tions for mortality, morbidity and interest rates that are guaranteed
in the contract or used in determining the policyholder dividends (or
premium refunds).
For traditional long-duration insurance contracts, such as tradi-
tional life and health products, aggregate policy reserves are com-
puted using the net level premium method based on best estimate
assumptions adjusted for a provision for adverse deviation for mor-
tality, morbidity, expected investment yields, surrenders, and
expenses at the policy inception date, which remain locked in there-
after unless a premium deficiency occurs.
Annual Report 2015 Allianz Group
148
The share-based compensation plans of the Allianz Group are classi-
fied as either equity-settled or cash-settled plans. Equity-settled
plans are measured at fair value on the grant date (grant-date fair
value) and the grant-date fair value is recognized as an expense over
the vesting period. Where equity-settled plans involve equity instru-
ments of Allianz SE, a corresponding increase in shareholders' equity
is recognized. Where equity-settled plans involve equity instruments
of subsidiaries of the Allianz Group, the corresponding increase is
recognized in non-controlling interests. Equity-settled plans include
a best estimate of the number of equity instruments that are expected
to vest in determining the amount of expense to be recognized. For
cash-settled plans, the Allianz Group accrues the fair value of the
award as a compensation expense over the vesting period. Upon vest-
ing, any change in the fair value of any unexercised awards is also
recognized as a compensation expense. Where expected tax deduc-
tions differ in amount and timing from the cumulative share-based
payment expense recognized in profit or loss, deferred taxes are rec-
ognized on temporary differences.
Share-based compensation plans
For defined benefit plans, the Allianz Group uses the projected unit
credit method to determine the present value of its defined benefit
obligations and the related service cost and, where applicable, past
service cost. The interest rate used to discount the defined benefit
obligation is also used to calculate the interest income on plan assets.
The resulting net interest expense or income is recognized in profit
or loss under administrative expenses in the consolidated income
statement. The interest rates for discounting are determined by refer-
ence to market yields at the end of the reporting period on high-
quality corporate bonds in the respective markets. For maturities
where no high-quality corporate bonds are available as a benchmark,
discount factors are estimated by extrapolating current market rates
along the yield curve.
Pensions and similar obligations
Other liabilities primarily consist of payables, provisions for pensions
and similar obligations, employee-related provisions, deposits
retained for reinsurance ceded, and financial liabilities for puttable
equity instruments.
OTHER LIABILITIES
FINANCIAL LIABILITIES FOR UNIT-LINKED CONTRACTS
The fair value measurement of financial liabilities for unit-linked
contracts is equal to the fair value measurement of the financial
assets for unit-linked contracts.
Reserves for premium refunds include the amounts allocated under
the relevant local statutory/contractual regulations or at the entity's
discretion to the accounts of the policyholders and the amounts
resulting from the differences between these IFRS-based financial
statements and the local financial statements (latent reserves for
premium refunds), which will reverse and enter into future profit
participation calculations. Unrealized gains and losses recognized
for available-for-sale investments are recognized in the latent reserves
for premium refunds to the extent that policyholders will participate
in such gains and losses on the basis of statutory or contractual regu-
lations when they are realized, based on and similar to shadow
accounting. The profit participation allocated to participating policy-
holders or disbursed to them reduces the reserves for premium
refunds.
Reserves for premium refunds
Insurance and investment contracts
Non-unit-linked investment contracts without discretionary
participating features are accounted for under IAS 39. The aggregate
policy reserves for those contracts are initially recognized at fair
value, or the amount of the deposit by the contract holder, net of the
transaction costs that are directly attributable to the issuance of the
contract. Subsequently, those contracts are measured at amortized
cost using the effective interest rate method.
Participating life
insurance contracts
2.2-5.0%
0.8-4.3%
2.5-6.0%
2.5-6.0%
insurance contracts
Traditional
long-duration
Deferred acquisition costs
Aggregate policy reserves
INTEREST RATE ASSUMPTIONS
The assumptions used for aggregate policy reserves are deter-
mined using current and historical client data, industry data, and in
the case of assumptions for interest reflect expected earnings on
assets, which back the future policyholder benefits. The information
used by the Allianz Group's actuaries in setting such assumptions
includes, but is not limited to, pricing assumptions, available experi-
ence studies, and profitability analyses. The interest rate assump-
tions used in the calculation of deferred acquisition costs and aggre-
gate policy reserves are as follows:
Insurance contract features which are not closely related to the
underlying insurance contracts are bifurcated from the insurance
contracts and accounted for as derivatives in line with IFRS 4 and IAS 39.
147
Annual Report 2015 Allianz Group
The aggregate policy reserves for universal life-type insurance
contracts are equal to the account balance, which represents pre-
miums received and investment return credited to the policy less
deductions for mortality costs and expense charges. The aggregate
policy reserve for universal life-type contracts includes insurance
reserves for unit-linked insurance contracts and for investment con-
tracts with discretionary participation features, as well as liabilities
for guaranteed minimum death and similar mortality and morbidity
benefits related to non-traditional contracts with annuitization
options.
The Allianz Group has recognized all rights and obligations related
to issued insurance contracts according to its accounting policies,
and thus has not separately recognized an unbundled deposit com-
ponent in respect of any of its insurance contracts.
PRINCIPLES OF CONSOLIDATION
AND REINSURANCE CONTRACTS
Goodwill is recognized for business combinations in the amount of
the consideration transferred in excess of the fair values assigned to
the identifiable assets acquired and liabilities assumed. Goodwill is
accounted for at the acquiree in the acquiree's functional currency.
Goodwill is not amortized. It is evaluated at least annually whether
the goodwill is deemed recoverable.
For insurance contracts and investment contracts with discretionary
participation features, shadow accounting is applied to DAC, PVFP and
deferred sales inducements in order to include the effect of unrealized
gains or losses in the measurement of these assets in the same way
as it is done for realized gains or losses. Accordingly, the assets are
adjusted with corresponding charges or credits recognized directly
in other comprehensive income as a component of the related unre-
alized gain or loss. When the gains or losses are realized they are
recognized in the income statement through recycling and prior
adjustments due to shadow accounting are reversed.
Shadow accounting
145
Annual Report 2015 Allianz Group
Sales inducements on insurance contracts are deferred and amor-
tized using the same methodology and assumptions as for deferred
acquisition costs when they meet the following criteria: the sales
inducements are recognized as part of the reserves, explicitly identi-
fied in the contract at inception and incremental to amounts credited
on similar contracts without sales inducements, and higher than the
contract's expected ongoing crediting rates for periods after the
inducement.
Deferred sales inducements
The value of an insurance business or an insurance portfolio acquired
is measured by the PVFP, which is the present value of net cash flows
anticipated in the future from insurance contracts in force at the date
of acquisition. It is amortized over the life of the related contracts.
Present value of future profits (PVFP)
Acquisition costs for unit-linked investment contracts without
discretionary participation features accounted for under IAS 39 at fair
value are deferred in accordance with IAS 18 if the costs are incremen-
tal. For non-unit-linked investment contracts without discretionary
participation features accounted for under IAS 39 at amortized cost,
acquisition costs that meet the definition of transaction costs under
IAS 39 are considered in the aggregate policy reserves.
For short-duration, traditional long-duration, and limited-pay-
ment insurance contracts, DAC is amortized in proportion to premium
revenue recognized. For universal life-type and participating life
insurance contracts as well as investment contracts with discretionary
participation features, DAC is generally amortized over the life of a
book of contracts based on estimated gross profits (EGP) or estimated
gross margins (EGM), respectively. EGP and EGM are based on best
estimate assumptions which are reviewed at the end of each reporting
period; the effect of changes is recognized in the reporting period's
income statement.
Costs that vary with and are directly related to the acquisition and
renewal of insurance contracts and investment contracts with dis-
cretionary participation features are deferred by recognizing a DAC
asset. DAC generally consists of commissions, underwriting expenses,
and policy issuance costs. At inception, DAC is tested to ensure that
it is recoverable over the life of the contracts. Subsequently, loss recog-
nition tests at the end of each reporting period ensure that only the
amount of DAC that is covered by future profits is carried on the con-
solidated balance sheet. Please refer to the section reserves for insur-
ance and investment contracts, where details on the corresponding
liability adequacy test are explained.
Deferred acquisition costs (DAC)
DEFERRED ACQUISITION COSTS
insurers of the Allianz Group remain liable to its policyholders for the
portion reinsured. Consequently, allowances are made for receiv-
ables on reinsurance contracts which are deemed uncollectible.
Assets and liabilities related to reinsurance are reported on a gross
basis. Reinsurance assets include balances expected to be recovered
from reinsurance companies. The amount of reserves ceded to re-
insurers is estimated in a manner consistent with the claim liability
associated with the reinsured risks. To the extent that the assuming
reinsurers are unable to meet their obligations, the respective ceding
REINSURANCE ASSETS
Financial assets for unit-linked contracts are recorded at fair value
with changes in fair value recognized in the income statement
together with the offsetting changes in fair value of the corresponding
financial liabilities for unit-linked contracts.
FINANCIAL ASSETS FOR UNIT-LINKED CONTRACTS
LOANS AND ADVANCES TO BANKS AND CUSTOMERS
Loans and advances are non-derivative financial assets with fixed or
determinable payments that are not quoted in an active market and
which are not classified as financial assets held for trading, desig-
nated at fair value through income, or designated as available for
sale. Loans and advances are initially recognized at fair value. Sub-
sequently, they are measured at amortized cost using the effective
interest method. Interest income is accrued on the outstanding carry-
ing amount, net of impairments. Using the effective interest method,
net deferred fees and premiums or discounts are recorded as an
adjustment of other interest income yield over the lives of the related
loans.
Real estate held for investment (i.e. real estate and rights equivalent
to real property and buildings, including buildings on leased land) is
carried at cost less accumulated depreciation and impairments. Real
estate held for investment is depreciated on a straight-line basis over
its useful life, with a maximum of 50 years. At each reporting date or
whenever there are any indications that the carrying amount may not
be recoverable, real estate is tested for impairment by determining
its recoverable amount. Subsequent costs are capitalized if they
extend the useful life or increase the value of the asset; otherwise they
are expensed as incurred.
Real estate held for investment
For details on the accounting for investments in associates and joint
ventures please see the section 'principles of consolidation'.
Investments in associates and joint ventures
OTHER ASSETS
Other assets primarily consist of receivables, accrued dividends,
interest and rent as well as own-used property and equipment.
Receivables are generally recorded at face value less any pay-
ments received, net of valuation allowances.
Own-used property and equipment generally is carried at cost
less accumulated depreciation and impairments. The assets are
depreciated on a straight-line basis over their estimated useful lives.
in proportion to revenue
recognized
straight-line or in relation to
customer churn rates
8-13
20-42
10-25
Amortization method
straight-line considering
contractual terms
Useful lives
Acquired business portfolios
Customer relationships
Long-term distribution agreements
ESTIMATED USEFUL LIVES (IN YEARS) AND AMORTIZATION METHODS
The amortization method reflects the pattern in which the
asset's future economic benefits are expected to be consumed. The
table below summarizes estimated useful lives and the amortization
methods for each class of intangible asset with finite useful lives.
Intangible assets with finite useful lives comprise long-term dis-
tribution agreements, acquired business portfolios and customer
relationships.
INSURANCE, INVESTMENT
The amortization period of intangible assets with finite useful lives is
reviewed at least once a year at year-end. Changes in expected useful
lives are treated as changes in accounting estimates.
max. 50
2-10
2-10
4-25
Years
INTANGIBLE ASSETS AND GOODWILL
Fixed assets of alternative investments
Equipment
Software
Real estate held for own use
ESTIMATED USEFUL LIVES (IN YEARS)
The table below summarizes estimated useful lives for real
estate held for own use, equipment, software, and fixed assets of
alternative investments.
The Allianz Group accounts for fixed assets of its fully consoli-
dated private equity investments and alternative investments as
property, plant and equipment in line with IAS 16. These assets are
carried at cost less accumulated depreciation and impairments.
Depreciation is generally computed using the straight-line method
over the estimated useful lives of the assets.
Software, which includes software purchased from third parties
or developed internally, is initially recorded at cost and amortized on
a straight-line basis over the estimated useful service lives or con-
tractual terms.
The Allianz Group distinguishes between intangible assets with finite
and with indefinite useful lives. Intangible assets with finite useful
lives are measured at cost less accumulated amortization. If neces-
sary, impairment losses are recognized. Intangible assets with indef-
inite useful lives are reviewed annually to determine whether the
indefinite-life classification is still appropriate. If not, the intangible
asset is reclassified from indefinite to finite on a prospective basis.
D- Consolidated Financial Statements
2 - Summary of significant
accounting policies
IFRS do not provide specific guidance concerning all aspects of
the recognition and measurement of insurance contracts, reinsur-
ance contracts and investment contracts with discretionary partici-
pation features. Therefore, as envisioned in IAS 8, Accounting Policies,
Changes in Accounting Estimates and Errors, to those aspects where
specific guidance is not provided by IFRS 4, Insurance Contracts, the
provisions embodied under accounting principles generally accepted
in the United States of America (US GAAP) as at first-time adoption of
IFRS 4 on 1 January 2005 have been applied.
262
Deferred tax assets/liabilities
23,036
14,031
1,039
2,040
1,120
775
(1,219)
202
(218)
(806)
466
2,365
107
(61)
375
(3,250)
Reserves for insurance and investment contracts
Reserves for loss and loss adjustment expenses
Unearned premiums
Deferred acquisition costs
Reinsurance assets
(10)
Repurchase agreements and collateral received from securities lending transactions
Other (net)
Net cash flow provided by operating activities
579
3,218
Held-to-maturity investments
124,855
1,335
1,529
151,470
Available-for-sale investments
Financial assets designated at fair value through income
Proceeds from the sale, maturity or repayment of:
CASH FLOW FROM INVESTING ACTIVITIES
2014
2015
€ MN
CONSOLIDATED STATEMENTS OF CASH FLOWS
CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED
139
Annual Report 2015 Allianz Group
32,232
23,663
25,629
16,676
(3,384)
(2,383)
Subtotal
Reverse repurchase agreements and collateral paid for securities borrowing transactions
Financial assets and liabilities held for trading
Net change in:
979
541
548
32,232
(26,927)
(3,189)
(2,837)
(20,394)
23,663
2014
2015
Cash and cash equivalents at end of period
Cash and cash equivalents at beginning of period
Change in cash and cash equivalents
Effect of exchange rate changes on cash and cash equivalents
Net cash flow used in financing activities
Net cash flow used in investing activities
Net cash flow provided by operating activities
SUMMARY
€ MN
CONSOLIDATED STATEMENTS OF CASH FLOWS
CONSOLIDATED STATEMENTS OF CASH FLOWS
139 Consolidated Statements of Cash Flows
141 Notes
138 Consolidated Statements of
Changes in Equity
137 Consolidated Statements of
Comprehensive Income
2,656
13,863
11,207
14,842
3,879
5,319
Interest credited to policyholder accounts
45
60
Loan loss provisions
1,159
1,359
Depreciation and amortization
2,537
3,460
Investments in associates and joint ventures
Other investments, mainly financial assets held for trading and designated at fair value through income
Available-for-sale and held-to-maturity investments, investments in associates and joint ventures, real estate held for investment,
loans and advances to banks and customers, non-current assets and disposal groups classified as held for sale
Realized gains/losses (net) and impairments of investments (net) of:
(196)
(290)
Share of earnings from investments in associates and joint ventures
Adjustments to reconcile net income to net cash flow provided by operating activities
6,603
6,987
Net income
CASH FLOW FROM OPERATING ACTIVITIES
13,863
(3,105)
513
709
Non-current assets and disposal groups classified as held for sale
SUPPLEMENTARY INFORMATION ON THE CONSOLIDATED STATEMENTS OF CASH FLOWS
(3,189)
(2,837)
Net cash flow used in financing activities
35
(157)
Other (net)
6
64
Net cash from sale or purchase of treasury shares
(2,716)
(78)
99
(3,382)
Dividends paid to shareholders
Transactions between equity holders
51
Cash inflow from capital increases
(3,435)
(5,044)
Repayments of certificated liabilities and subordinated liabilities
3,823
5,217
Proceeds from the issuance of certificated liabilities and subordinated liabilities
Income taxes paid
(2,609)
(3,081)
Dividends received
The consolidated financial statements of the Allianz Group have been
prepared in conformity with International Financial Reporting Stan-
dards (IFRS), as adopted under European Union (E.U.) regulations in
accordance with § 315a of the German Commercial Code (HGB). With-
in these consolidated financial statements, the Allianz Group has
applied all standards and interpretations issued by the IASB and
endorsed by the E.U. that are compulsory as of 31 December 2015. IFRS
comprise International Financial Reporting Standards (IFRS), Inter-
national Accounting Standards (IAS) and interpretations developed
by the IFRS Interpretations Committee (formerly called the IFRIC) or
the former Standing Interpretations Committee (SIC).
BASIS OF PRESENTATION
The consolidated financial statements of the Allianz Group for
the year ended 31 December 2015 were authorized for issue by the
Board of Management on 16 February 2016.
Allianz SE is a stock corporation in the form of a European Com-
pany (Societas Europaea). Allianz SE shares are listed on all German
stock exchanges and Allianz SE American Depositary Receipts (ADRS)
are traded in the U.S. over the counter on OTCQX.
Allianz SE and its subsidiaries (the Allianz Group) offer Property-Casu-
alty insurance, Life/Health insurance and Asset Management prod-
ucts and services in over 70 countries, with the largest of its opera-
tions in Europe. The Allianz Group's headquarters and Allianz SE as its
parent company are located in Munich, Germany. Allianz SE is record-
ed in the Commercial Register of the municipal court in Munich
under its registered address at Königinstrasse 28, 80802 Munich.
NATURE OF OPERATIONS
1 - Nature of operations
and basis of presentation
GENERAL INFORMATION
Notes to the Consolidated Financial Statements
139 Consolidated Statements of Cash Flows
141 Notes
138 Consolidated Statements of
Changes in Equity
(873)
137 Consolidated Statements of
Comprehensive Income
D- Consolidated Financial Statements
Annual Report 2015 Allianz Group
140
(1,326)
(1,265)
18,851
19,412
1,555
1,878
Interest paid
Interest received
135 Consolidated Balance Sheets
136 Consolidated Income Statements
The accounting policies adopted are consistent with those of
the previous financial year, except for recently adopted IFRS effective
1 January 2015 and for the change in presentation as described in
note 4 Recently adopted and issued accounting pronouncements and
changes in the presentation of the consolidated financial statements.
The consolidated financial statements are prepared as of and for
the year ended 31 December and presented in millions of Euro (€ MN),
unless otherwise stated.
365
CASH FLOW FROM FINANCING ACTIVITIES
(2,300)
Subtotal
Loans and advances to banks and customers (purchased loans)
Property and equipment
Real estate held for investment
Non-current assets and disposal groups classified as held for sale
Investments in associates and joint ventures
Held-to-maturity investments
Available-for-sale investments
Financial assets designated at fair value through income
136,416
169,032
119
127
8,345
11,465
329
522
Payments for the purchase or origination of:
Subtotal
Loans and advances to banks and customers (purchased loans)
Property and equipment
Real estate held for investment
146
187
(1,693)
(170,170)
(149,120)
(2,474)
(26,927)
(20,394)
Net cash flow used in investing activities
(665)
(708)
(2,403)
(4,142)
Change in other loans and advances to banks and customers (originated loans)
Other (net)
(200)
Acquisitions of subsidiaries, net of cash acquired
19
Net change in liabilities to banks and customers
Proceeds from sale of subsidiaries, net of cash disposed
(160,076)
(184,595)
(1,692)
(2,033)
(5,005)
(5,461)
(963)
(1,273)
(1,271)
(884)
(331)
Business combinations (note 5):
D- Consolidated Financial Statements
135 Consolidated Balance Sheets
USA (Life/Health only),
UnipolSai Assicurazioni
insurance business of
Part of Property-Casualty
2014
2
50
Reinsurance assets
48 Acquisition
Deferred tax assets
Loans and advances to banks and customers
Investments
Darwin
Insurance Office (TIO),
79
11
Financial assets carried at fair value through income
Cash and cash equivalents
business of the Territory
1 January
2015
Property-Casualty insurance
2
72
102
(183)
(13)
Other liabilities
(18)
Deferred tax liabilities
(107)
Reserves for loss and loss adjustment expenses
Other assets
1-At the date of initial consolidation.
Unearned premiums
285
Total assets
257 Acquisition
1 July 2014
S.p.A., Bologna
37
Intangible assets
(45)
2015
Fair value
PROPERTY-CASUALTY INSURANCE BUSINESS OF THE TERRITORY INSURANCE OFFICE (TIO)
- IDENTIFIABLE ASSETS AND LIABILITIES
IAS 1, Disclosure Initiative
STANDARD/INTERPRETATION
All subsidiaries, joint ventures and associates are individually listed
in the list of participations of the Allianz Group from > page 234 of
this Annual Report onwards.
Total number of fully consolidated entities
Number of joint ventures valued at equity
Number of associates valued at equity
58
62
26
33
IFRS 11, Accounting for Acquisitions
903
77
83
Subtotal
40
41
Other countries
37
42
892
of Interests in Joint Operations
Annual Improvements to IFRSS 2012-2014
IAS 16 and IAS 38, Clarification
€ MN
%
€ MN
Goodwill Transaction
Date of
initial
consoli-
dation
Equity
interest
The following table summarizes the recognized amounts of
assets acquired and liabilities assumed in the context of the TIO busi-
ness and the MAC contract:
SIGNIFICANT ACQUISITIONS
SIGNIFICANT ACQUISITIONS
155
beginning on or after 1 January 2016
beginning on or after 1 January 2016
Annual periods
Annual periods
beginning on or after 1 January 2016
beginning on or after 1 January 2016
Annual periods
Annual periods
EFFECTIVE DATE
Annual Report 2015 - Allianz Group
of Acceptable Methods of Depreciation
and Amortisation
The following section describes all significant acquisitions during the
year ended 31 December 2015.
Property-Casualty insurance business
of the Territory Insurance Office (TIO), Darwin
Effective 1 January 2015, the Allianz Group acquired the Property-
Casualty insurance business of the Territory Insurance Office (TIO busi-
ness), Darwin, and entered into a 10-year agreement to manage the
compulsory motor accidents compensation scheme (MAC contract).
The acquired TIO business includes, inter alia, all relevant insurance
assets and liabilities, operations, employees and the brand name
related to the TIO business.
The acquired TIO business represents insurance activities with
premiums equal to approximately € 88 MN (for the year 2014). As a
result of the acquisition, the Allianz Group expects to increase its
presence in the Australian market. It also expects to reduce costs
through economies of scale and through synergies in the reinsurance
Asset management activities represent a separate reportable seg-
ment. Due to differences in the nature of products, risks and capital
allocation, corporate and other activities are divided into three
reportable segments: Holding & Treasury, Banking and Alternative
Investments. In total, the Allianz Group has identified 16 reportable
segments in accordance with IFRS 8, Operating Segments.
Allianz Worldwide Partners (Property-Casualty only).
Asia Pacific,
Global Insurance Lines & Anglo Markets,
SIGNIFICANT CHANGES IN NON-CONTROLLING INTERESTS
During 2015 and 2014, no significant changes in non-controlling
interests occurred.
19
3
Disposal of subsidiaries, net of cash disposed
The types of products and services from which the reportable
segments derive revenues are described below.
Non-controlling interests
111
88
Other comprehensive income
(219)
Other liabilities
(95)
Deferred tax liabilities
(37)
Realized gains from the disposals
Property-Casualty
In the business segment Property-Casualty, reportable segments
offer a wide variety of insurance products to both private and corpo-
rate customers, including motor liability and own damage, accident,
general liability, fire and property, legal expense, credit and travel
insurance.
Life/Health
Annual Report 2015 Allianz Group
158
one-off effects from pension revaluation. Allianz SE has a joint
liability for a large part of the pension provisions of its German
subsidiaries. Service costs incurred in this context are borne by
the German subsidiaries and disbursed to Allianz SE. In the
financial year 2014, the German subsidiaries of Allianz SE
changed the application of the option provided by article 67 (1)
sentence 1 of the Introductory Act to the German Commercial
Code (EGHGB) to distribute the conversion expenses resulting
from the first-time application of the German Accounting Law
Modernization Act (BilMOG) in 2010 over a period of up to 15
years in such a way that conversion expenses were fully recog-
nized in the first quarter of 2014. Additionally, effective 1 January
2015, the cost allocation scheme for the pension provisions
between the German subsidiaries and Allianz SE was adapted to
reflect the changed interest rate environment. For both effects,
the resulting one-off expenses at the German subsidiaries and
one-off income at Allianz SE are shown as non-operating items.
In case of policyholder participation within the Life/Health
insurance business, the one-off expenses and the corresponding
one-off income at Allianz SE are presented within operating
profit. On the Allianz Group level, the one-off expenses and
income offset each other. The only impact on the Allianz Group
level is the related policyholder participation, which had a posi-
tive impact on income before income taxes of € 148 MN in 2015
and of € 116 MN in 2014.
realized capital gains and losses (net) or impairments of invest-
ments (net), as the timing of sales that would result in such real-
ized gains or losses is largely at the discretion of the Allianz
Group and impairments are largely dependent on market cycles
or issuer-specific events over which the Allianz Group has little
or no control and which can vary, sometimes materially, over
time,
income from financial assets and liabilities carried at fair value
through income (net), as this does not reflect the Allianz Group's
long-term performance,
income from fully consolidated private equity investments (net),
as this represents income from industrial holdings, which is out-
side the Allianz Group's normal scope of operating business,
interest expenses from external debt, as these relate to the capital
structure of the Allianz Group,
acquisition-related expenses and the amortization of intangible
assets, as these relate to business combinations,
To better understand the ongoing operations of the business, the
Allianz Group generally excludes the following non-operating effects:
REPORTABLE SEGMENTS MEASURE OF PROFIT OR LOSS
The Allianz Group uses operating profit to evaluate the performance
of its reportable segments as well as of the Allianz Group as a whole.
Operating profit highlights the portion of income before income
taxes that is attributable to the ongoing core operations of the Allianz
Group. The Allianz Group considers the presentation of operating
profit to be useful and meaningful to investors because it enhances
the understanding of the Allianz Group's underlying operating per-
formance and the comparability of its operating performance over
time.
Prices for transactions between reportable segments are set on an
arm's length basis in a manner similar to transactions with third par-
ties. Transactions between reportable segments are eliminated in the
Consolidation. For the reportable segment Asset Management,
interest revenues are reported net of interest expenses. Financial
information is recorded based on reportable segments. Cross-seg-
mental country-specific information is not determined.
GENERAL SEGMENT REPORTING INFORMATION
The reportable segment Holding & Treasury includes the manage-
ment and support of the Allianz Group's businesses through its
strategy, risk, corporate finance, treasury, financial reporting, con-
trolling, communication, legal, human resources, technology and
other functions. The reportable segment Banking consists of the
banking activities in Germany, France, Italy, the Netherlands and
Bulgaria. The banks offer a wide range of products for corporate and
retail clients, with a primary focus on the latter. The reportable seg-
ment Alternative Investments provides global alternative investment
management services in the private equity, real estate, renewable
energy and infrastructure sectors, mainly on behalf of the Allianz
Group's insurance operations.
Corporate and Other
The reportable segment Asset Management operates as a global pro-
vider of institutional and retail asset management products and ser-
vices to third-party investors and provides investment management
services to the Allianz Group's insurance operations. The products
for retail and institutional customers include equity and fixed-
income funds as well as alternative products. The United States and
Germany as well as France, Italy and the Asia-Pacific region represent
the primary asset management markets.
Asset Management
157
Annual Report 2015 Allianz Group
In the business segment Life/Health, reportable segments offer a
comprehensive range of life and health insurance products on both
an individual and a group basis, including annuities, endowment
and term insurance, unit-linked and investment-oriented products,
as well as full private health, supplemental health and long-term care
insurance.
Reserves for loss and loss adjustment expenses
Number of fully consolidated investment funds
Germany
(866)
645
D- Consolidated Financial Statements
None of this goodwill is expected to be deductible for income tax
purposes.
The goodwill of € 48 MN of the business combination largely reflects
the benefits associated with cost and reinsurance synergies as well as
the ability to revert to an existing infrastructure in a new geographical
market.
Annual Report 2015 Allianz Group
156
102
48
150
Fair value
135 Consolidated Balance Sheets
136 Consolidated Income Statements
Total net identifiable assets
Goodwill
€ MN
PROPERTY-CASUALTY INSURANCE BUSINESS OF THE TERRITORY INSURANCE OFFICE (TIO)
- DETERMINATION OF GOODWILL
The acquired TIO business comprises goodwill which was deter-
mined as follows as of 1 January 2015:
Intangible assets mainly consist of the fair values of the MAC contract,
the TIO brand name, the customer relationships related to the
acquired insurance portfolio and the present value of the transferred
in-force business.
Total net identifiable assets
Total liabilities
The final consideration paid in cash amounted to € 150 MN.
area.
Consideration transferred
137 Consolidated Statements of
Comprehensive Income
138 Consolidated Statements of
Changes in Equity
139 Consolidated Statements of Cash Flows
141 Notes
Intangible assets
259
Loans and advances to banks and customers
Other assets
61
Total
70
Investments
€ MN
IMPACTS OF THE DISPOSALS
German Speaking Countries and Central & Eastern Europe,
Western & Southern Europe, Middle East, Africa, India,
Iberia & Latin America,
-
-
The business activities of the Allianz Group are first organized by
product and type of service: insurance activities, asset management
activities and corporate and other activities. Due to differences in the
nature of products, risks and capital allocation, insurance activities
are further divided into the business segments Property-Casualty and
Life/Health. In accordance with the responsibilities of the Board of
Management, each of the insurance business segments is grouped
into the following reportable segments:
IDENTIFICATION OF REPORTABLE SEGMENTS
The impacts of the disposals, net of cash disposed, on the con-
solidated statement of cashflows for the year ended 31 December
2015 were as follows:
During the year ended 31 December 2015, the Allianz Group disposed
of Allianz Suisse Rückversicherungs AG, Zurich, 100% owned, and
Selecta Group S.à r.l., Luxembourg, 99.3% owned. Both entities were
deconsolidated on 11 December 2015. In total, the Allianz Group
received proceeds from the sale of € 81 MN.
SIGNIFICANT DISPOSALS AND DECONSOLIDATIONS
The impact of the acquired Property-Casualty insurance business
of the Territory Insurance Office on the Allianz Group's total revenues
and net income since the acquisition was € 82 MN and € (4) MN,
respectively.
In administrative expenses, acquisition-related costs in the 6-Segment reporting
amount of € 1 MN were included in fiscal year 2014 and in the amount
of € 3 MN in fiscal year 2015.
Liabilities to banks and customers
826
32
Subtotal
FAIR VALUE AND IMPAIRMENTS
OF FINANCIAL INSTRUMENTS
Stage two: The Allianz Group Actuarial Department forms an
opinion on the adequacy of the reserves proposed by the local entities.
The Allianz Group Actuarial Department challenges the operating
entities' selection through their continuous interaction with local
teams and quarterly attendance in the local reserve committees. The
ability to form a view on reserve adequacy is further enabled by regular
reviews of the local reserving practices. Such reviews consist of an
evaluation of the reserving process as well as of the appropriateness
and consistency of assumptions, and an analysis of movement of
reserves. Significant findings from such reviews are communicated
in the Allianz Group Reserve Committee to initiate actions where
necessary.
Stage one: Property-Casualty reserves are calculated by local
reserving actuaries in the Allianz operating entities. Reserves are set
based on a thorough analysis of historical data, enhanced by interac-
tions with other business functions (e.g. Underwriting, Claims and
Reinsurance). Actuarial judgment is applied where necessary, espe-
cially in cases where data is unreliable, scanty or unavailable. The
judgment of Property-Casualty actuaries is based on past experience
of the characteristics of each line of business, the current stage of
the underwriting cycle and the external environment in which the
subsidiary operates. The reserves are proposed to a local reserve com-
mittee, whereby the rationale of the selections are discussed and
subsequently documented. A final decision on the reserve selection
is made in the reserve committee. Local actuaries are responsible for
their compliance with the Group Actuarial Standards and Guidelines.
Property-Casualty reserves are set by leveraging the use of actu-
arial techniques and educated judgment. A two-stage process exists
for the setting of reserves in the Allianz Group:
Stage two: The Allianz Group Actuarial Department regularly
reviews the local reserving processes, including the appropriateness
and consistency of assumptions, and analyzes the movements of
reserves. Any adjustments to reserves and other insurance-related
reporting items are reported to and analyzed together with the
Allianz Group Reserve Committee.
Stage one: Life/Health reserves are calculated by qualified local
staff experienced in the business of the subsidiaries. Actuaries in the
local entities also conduct tests of the adequacy of the premiums and
reserves to cover future claims and expenses (liability adequacy
tests). The process follows group-wide standards for applying consis-
tent and plausible assumptions. The appropriateness of the reserves
and compliance with the group-wide standards is confirmed by the
local actuary.
and assumptions in the Life/Health reserving process, the Allianz
Group has designed a two-stage reserving process:
139 Consolidated Statements of Cash Flows
141 Notes
The Allianz Group carries certain financial instruments at fair value
and discloses the fair value of most other assets and liabilities. The
fair value of an asset or liability is defined as the price that would be
received to sell an asset, or paid to transfer a liability, in an orderly
transaction between market participants at the measurement date.
138 Consolidated Statements of
Changes in Equity
135 Consolidated Balance Sheets
136 Consolidated Income Statements
D- Consolidated Financial Statements
1- Please refer to note 2 Summary of significant accounting policies. For further details, please refer to note
12 Deferred acquisition costs, note 19 Reserves for loss and loss adjustment expenses and note 20 Reserves
for insurance and investment contracts.
Annual Report 2015 Allianz Group
150
Life/Health reserves are dependent on estimates and assumptions,
especially on the life expectancy and health of an insured individual
(mortality, longevity and morbidity risk) and on the development of
interest rates and investment returns (asset-liability mismatch risk).
These assumptions also have an impact on the presentation of costs
arising from the origination of insurance business (acquisition costs
and sales inducements) and the value of acquired insurance business
(PVFP). To ensure consistency in the application of actuarial methods
The oversight and monitoring of the Allianz Group's reserves
culminates in quarterly meetings of the Allianz Group Reserve Com-
mittee, which is the supervising body that governs all significant
reserves. It particularly monitors key developments across the Allianz
Group affecting the adequacy of loss reserves.
Regular quantitative and qualitative reserve monitoring: On a
quarterly basis, the Allianz Group Actuarial Department monitors
reserve levels, movements and trends across the Allianz Group. This
monitoring is conducted on the basis of quarterly data submitted
by the subsidiaries as well as through frequent dialogue with local
actuaries.
137 Consolidated Statements of
Comprehensive Income
Assets and liabilities measured or disclosed at fair value in the
consolidated financial statements are measured and classified in
accordance with the fair value hierarchy in IFRS 13, which categorizes
the inputs to valuation techniques used to measure fair value into
three levels.
The level 1 inputs of financial instruments that are traded in
active markets are based on unadjusted quoted market prices or
dealer price quotations for identical assets or liabilities on the last
exchange trading day prior to or at the reporting date, if the latter is
a trading day.
Level 2 applies if the market for a financial instrument is not
active or when the fair value is determined by using valuation tech-
niques based on observable input parameters. Such market inputs
are observable substantially over the full term of the asset or liability
and include references to formerly quoted prices for identical instru-
ments from an active market, quoted prices for identical instruments
from an inactive market, quoted prices for similar instruments from
active markets, and quoted prices for similar instruments from
inactive markets. Market observable inputs also include interest rate
yield curves, volatilities and foreign currency exchange rates.
In general, the subsidiaries assume responsibility for assessing
fair values and evaluating impairments of financial instruments.
This process is consistent with the decentralized organizational
structure and reflects the fact that local managers are often best
suited to analyze securities trading in local markets. Nevertheless,
the subsidiaries are responsible for adhering to the Allianz Group's
internal control policy regarding impairment assessment, measure-
ment and disclosure. Subsidiaries must report all impairment deci-
sions on debt securities to the Allianz Group Accounting and Reporting
department, which then reviews them for consistency and resolves
discrepancies.
The evaluation of whether a financial debt security is impaired
requires analysis of the underlying credit risk/ quality of the relevant
issuer and involves significant management judgment. In particular,
current publicly available information with regard to the issuer and
the particular security is considered relating to factors including, but
not limited to, evidence of significant financial difficulty of the issuer
and breach of contractual obligations of the security, such as a
default or delinquency on interest or principal payments. The Allianz
Group also considers other factors which could provide objective evi-
dence of a loss event, including the probability of bankruptcy and the
lack of an active market due to financial difficulty. The presence of
either a decline in fair value below amortized cost or the downgrade
of an issuer's credit rating does not by itself represent objective evi-
dence of a loss event, but may represent objective evidence of a loss
event when considered with other available information.
1- Please refer to the consolidated financial statements note 2 Summary of significant accounting policies,
note 37 Impairments of investments (net) and note 44 Financial instruments and fair value measurement
for further details regarding financial instruments and impairments.
€ 19,145 MN of the financial assets and € 8,317 MN of the financial
liabilities carried at fair value are classified as level 3 of the fair
value hierarchy (valuation techniques with significant input
being non-observable). Level 3 financial assets represent 3.2% of
the Allianz Group's total financial assets carried at fair value.
Financial liabilities classified as level 3 represent 7.0% of the
Allianz Group's total financial liabilities carried at fair value.
€ 371,770 MN of the financial assets and € 4,343 MN of the financial
liabilities carried at fair value are classified as level 2 of the fair
value hierarchy (valuation techniques with observable market
inputs)
€ 211,155 MN of the financial assets and € 105,478 MN of the financial
liabilities carried at fair value are classified as level 1 of the fair
value hierarchy (unadjusted quoted prices in active markets)
-
As of 31 December 2015, the Allianz Group reported financial
instruments carried at fair value as follows:¹
The degree of judgment used in measuring the fair value of
financial instruments closely correlates with the level of non-market
observable inputs. The Allianz Group uses a maximum of observable
inputs and a minimum of non-market observable inputs when mea-
suring fair value. Observability of input parameters is influenced by
various factors such as type of the financial instrument, whether a
market is established for the particular instrument, specific trans-
action characteristics, liquidity, and general market conditions. If the
fair value cannot be measured reliably, amortized cost is used as a
proxy for determining fair values.
In general, the subsidiaries assume responsibility for assessing
fair values and hierarchies of assets and liabilities. This is consistent
with the decentralized organizational structure of the Allianz Group
and reflects local managers' market insights. Estimates and assump-
tions are particularly significant when determining the fair value of
financial instruments for which at least one significant input is not
based on observable market data (classified within level 3 of the fair
value hierarchy). The availability of market information is determined
by the relative trading levels of identical or similar instruments in the
market, with emphasis placed on information that represents actual
market activity or binding quotations from brokers or dealers.
There is no one-to-one connection between valuation technique and
hierarchy level. Depending on whether valuation techniques are
based on significant observable or unobservable inputs, financial
instruments are classified in the fair value hierarchy.
151
Annual Report 2015 Allianz Group
Income approach: Conversion of future amounts such as cash
flows or income to a single current amount (present value tech-
nique).
Cost approach: Amount that would currently be required to
replace the service capacity of an asset (replacement cost).
Market approach: Prices and other relevant information gener-
ated by market transactions involving identical or comparable
assets or liabilities.
-
For fair value measurements categorized as level 2 and level 3,
the Allianz Group uses valuation techniques consistent with the
three widely used valuation techniques listed in IFRS 13:
Level 3 applies where not all input parameters are observable in
the market. Accordingly, the fair value is based on valuation tech-
niques using non-market observable inputs. Valuation techniques
include the discounted cash flow method, comparison to similar
instruments for which observable market prices exist and other valu-
ation models. Appropriate adjustments are made for credit risks. In
particular when observable market inputs are not available, the use
of estimates and assumptions may have a strong impact on the valu-
ation outcome.
Regular site visits: The Allianz Group Actuarial Department regu-
larly visits Allianz subsidiaries in order to ensure that they apply the
group-wide standards and guidelines. The on-site review focuses on
all significant changes in assumptions and methodologies as well as
on procedures and professional practices relevant for the reserving
process. Furthermore, these meetings are to update knowledge of the
underlying local business developments.
ASSESSMENT OF THE INCLUSION METHOD
Group-wide standards and guidelines: They define the reserving
practices that must be conducted by each subsidiary, including
aspects of assumptions and estimates. This includes organization
and structure, data, methods and reporting. The Allianz Group Actu-
arial Department monitors compliance with these standards and
guidelines.
deferred acquisition costs of € 25,234 MN.
Non-controlling interests represent equity in subsidiaries, not
attributable directly or indirectly, to Allianz as parent.
Unrealized gains and losses (net) include unrealized gains and
losses from available-for-sale investments and from derivative
financial instruments that meet the criteria for cash flow hedge
accounting.
Please refer to the above section on foreign currency translation,
where foreign currency changes that are recognized in equity are
explained. The effective portion of gains and losses of hedging instru-
ments designated as hedges of a net investment in a foreign opera-
tion is recognized in foreign currency translation adjustments.
Retained earnings comprise the net income of the current year,
earnings not yet distributed from prior years, treasury shares, and
any amounts directly recognized in equity according to IFRS. Treasury
shares are deducted from shareholders' equity. No gain or loss is rec-
ognized on the sale, issuance, acquisition or cancellation of these
shares. Any consideration paid or received is recorded directly in
shareholders' equity.
Issued capital represents the mathematical per-share value received
at the issuance of shares. Additional paid-in capital represents the
premium exceeding the issued capital received at the issuance of
shares.
EQUITY
Certificated liabilities and subordinated liabilities are subsequently
measured at amortized cost, using the effective interest method to
amortize the premium or discount to the redemption value over the
life of the liability.
AND SUBORDINATED LIABILITIES
PREMIUMS
CERTIFICATED LIABILITIES
Financial liabilities for puttable equity instruments primarily include
the non-controlling interests in the net assets of controlled mutual
funds. These interests qualify as a financial liability of the Allianz
Group, as they give the holder the right to put the instrument back
to the Allianz Group for cash or another financial asset (puttable
instrument). These liabilities are generally required to be recorded at
the redemption amount with changes recognized in the income
Financial liabilities for puttable equity instruments
Restructuring provisions are recognized when programs materially
change the scope of business performed by an operating entity or
business unit or the manner in which business is conducted, and
when the main features of a detailed formal plan have been announced
to those affected or the implementation of the restructuring plan has
started.
Restructuring provisions
139 Consolidated Statements of Cash Flows
141 Notes
138 Consolidated Statements of
Changes in Equity
137 Consolidated Statements of
Comprehensive Income
136 Consolidated Income Statements
statement.
Premiums for short-duration insurance contracts are recognized as
revenues over the period of the contract in proportion to the amount
of insurance protection provided. Unearned premiums are calculated
separately for each individual policy to cover the unexpired portion
of written premiums.
Premiums for long-duration insurance contracts are recognized
as earned when due. Long-duration insurance contracts are con-
tracts that are not cancellable by the insurance company, guaranteed
to be renewable, and expected to remain in force over an extended
period of time.
reserves for insurance and investment contracts of € 486,222 MN,
mainly for the Life/Health operations, and
reserves for loss and loss adjustments expenses of € 72,003 MN,
mainly for the Property-Casualty operations, including run-off
business and reinsurance business assumed,
RESERVES FOR LOSS AND LOSS ADJUSTMENT EXPENSES,
RESERVES FOR INSURANCE AND INVESTMENT
CONTRACTS AND DEFERRED ACQUISITION COSTS
As of 31 December 2015, the Allianz Group reported:¹
The following sections describe complex accounting areas that are
especially sensitive to the use of estimates and assumptions. Any
change in the assumptions and estimates could, in certain circum-
stances, significantly affect the reported results and values because
the range of reasonable judgment may in some cases be material.
The Allianz Group understands the degree of impact that these judg-
ments may have and has established a strong system of governance
as well as controls, procedures and guidelines to ensure consistency
and soundness of these judgments.
3-Use of estimates and assumptions
Changes in deferred tax assets and liabilities are generally rec-
ognized through profit and loss in the consolidated income state-
ment, except for changes recognized directly in equity.
Deferred tax assets or liabilities are calculated for temporary dif-
ferences between the tax bases and the financial statement carrying
amounts, including differences from consolidation, unused tax loss
carry forwards, and unused tax credits. Measurement is based on
enacted or substantively enacted tax rates and tax rules. The Allianz
Group recognizes a valuation allowance for deferred tax assets when
it is unlikely that a corresponding amount of future taxable profit will
be available against which the deductible temporary differences, tax
loss carry forwards and tax credits can be utilized.
Current income taxes are calculated based on the respective local
taxable income and local tax rules for the period. In addition, current
income taxes presented for the period include adjustments for
uncertain tax payments or tax refunds for periods not yet finally
assessed, including interest expense and penalties on the underpay-
ment of taxes. For the case that amounts included in the tax return
are considered unlikely to be accepted by the tax authorities (uncer-
tain tax positions), a provision for income taxes is recognized. The
amount is based on the best possible assessment of the expected tax
payment. Tax refund claims from uncertain tax positions are recog-
nized when it is probable that they can be realized.
INCOME TAXES
These expenses consist of claims and insurance benefits incurred
during the period, including benefit claims in excess of policy
account balances and interest credited to policy account balances.
Furthermore, it includes claim handling costs that are directly related
to the processing and settlement of claims. Reinsurance recoveries
are deducted from claims and insurance benefits.
CLAIMS AND INSURANCE BENEFITS INCURRED
149
Annual Report 2015 Allianz Group
809
INCOME FROM FINANCIAL ASSETS AND LIABILITIES
CARRIED AT FAIR VALUE THROUGH INCOME (NET)
Income from financial assets and liabilities carried at fair value
through income (net) includes all investment income as well as real-
ized and unrealized gains and losses from financial assets and liabil-
ities carried at fair value through income. In addition, commissions
attributable to trading operations and related interest expenses as
well as refinancing and transaction costs are included in this line
item. Foreign currency gains and losses on monetary items are also
reported within income from financial assets and liabilities carried
at fair value through income (net).
INTEREST AND SIMILAR INCOME AND INTEREST EXPENSES
Interest income and interest expenses are recognized on an accrual
basis. Interest income is recognized using the effective interest
method. This line item also includes dividends from available-for-
sale equity securities and income from investments in associates and
joint ventures. Dividends are recognized in income when the right to
receive the dividend is established. Share of earnings from invest-
ments in associates and joint ventures represents the share of net
income from entities accounted for using the equity method.
earned.
Premiums ceded for reinsurance are deducted from premiums
Revenues for universal life-type and investment contracts rep-
resent charges assessed against the policyholders' account balances
for the front-end loads, net of the change in unearned revenue liabil-
ities, cost of insurance, surrenders and policy administration, and are
included within premiums earned (net).
For Life/Health and for Property-Casualty, the central oversight process
includes the following key components:
The relevant criteria for determining the appropriate inclusion
method of a company are summarized in note 2 Summary of signifi-
cant accounting policies of this Annual Report. The determination of
the appropriate inclusion method of some entities involves manage-
ment judgment.
FEE AND COMMISSION INCOME
Fee and commission income primarily consists of asset manage-
ment fees that are recognized when the service is provided. Perfor-
mance fees may not be recognized as fee income before the respec-
tive benchmark period is completed, because, before its completion,
the obligation to pay the fee is conditional, the fund performance is
regularly not reliably estimable, and related service is not fully per-
formed. In any case, performance-related fees from alternative
investment products ('carried interest') should not be recognized as
revenue prior to the date of the official declaration of distribution by
the fund.
There are some companies where the Allianz Group holds a
majority stake but where management has assessed that the Allianz
Group does not control these entities because it has no majority
representation in the governing bodies and/or it requires at least
the confirmative vote of another investor to pass any decisions over
relevant activities.
Following the IASB's recent decision of deferring IFRS 15 by one
year, the new standard is now effective for periods beginning on or
after 1 January 2018; earlier application is permitted. The Allianz
Group plans to adopt the new standard on the required effective date,
after endorsement by the E.U. The Allianz Group is currently evaluat-
ing the new rules in order to determine which application method to
apply as well as to assess the financial impact from applying the new
rules. Fee and commission income, primarily related to asset man-
agement fees, is likely to be one of the areas most affected by IFRS 15,
but other transactions outside of asset management are being
explored as well.
In May 2014, the IASB issued IFRS 15, Revenue from Contracts with
Customers. IFRS 15 supersedes IAS 18, Revenue, IAS 11, Construction
Contracts, and a number of revenue-related interpretations. With the
introduction of IFRS 15, the IASB pursued the objective of developing
a single revenue standard containing comprehensive principles for
recognizing revenue.
IFRS 15, Revenue from Contracts with Customers
139 Consolidated Statements of Cash Flows
141 Notes
138 Consolidated Statements of
Changes in Equity
137 Consolidated Statements of
Comprehensive Income
136 Consolidated Income Statements
135 Consolidated Balance Sheets
IFRS 16, Leases
D- Consolidated Financial Statements
154
2-Please refer to note 2 Summary of significant accounting policies and note 50 Restructuring plans for
further details.
1- Please refer to note 2 Summary of significant accounting policies and note 48 Pensions and similar obliga-
tions for further details.
The effective date is 1 January 2018. However, the IASB decided to
propose a deferral of IFRS 9 for insurers to align the effective dates
between IFRS 9 and the new insurance contracts standard IFRS 4. The
Allianz Group will thoroughly analyze implications from the Exposure
Draft on the IFRS 9 deferral for insurers and is currently evaluating the
impact of adopting IFRS 9 on its consolidated financial statements. At
initial application it can be assumed that the main impact from IFRS 9
on the Allianz Group will arise from the new classification rules lead-
ing to more financial instruments being measured as at fair value
through profit and loss as well as the new impairment model.
IFRS 9, Financial Instruments, was issued by the IASB in July 2014 and
will replace IAS 39 with a new standard. IFRS 9 provides a new approach
on how to classify financial instruments based on their cash flow
characteristics and the business model under which they are man-
aged. Furthermore, the standard introduces a new impairment model
for debt instruments and provides new rules for hedge accounting.
IFRS 9, Financial Instruments
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
effective on or after 1 January 2016 and not adopted early
These changes had no material impact on the financial results or
financial position of the Allianz Group.
Annual Report 2015 Allianz Group
In January 2016, the IASB issued IFRS 16, Leases, which supersedes
IAS 17. IFRS 16 eliminates the classification of leases as either operating
or finance leases for a lessee. Instead, all leases are treated in a similar
way to finance leases under IAS 17. For those leases previously classi-
fied as operating leases, the most significant effect of the new require-
ments will be an increase in lease assets and financial liabilities and
a change to the nature of expenses. IFRS 16 does not require a lessee
to recognize assets and liabilities for short-term leases and leases of
low-value assets.
The effective date announced by the IASB is 1 January 2019, with
early adoption permitted if IFRS 15 is applied as well. The Allianz
Group will assess the potential impact on its consolidated financial
statements resulting from the application of IFRS 16.
Further amendments and interpretations
For some subsidiaries where the Allianz Group does not hold a
majority stake, management has assessed that the Allianz Group
controls these companies. The Allianz Group controls these entities
on the basis of distinctive rights stipulated by shareholder agree-
ments between the Allianz Group and the other shareholders in these
companies.
695
672
Other countries
131
137
2014
2015
Number of fully consolidated entities (subsidiaries)
Germany
SCOPE OF CONSOLIDATION
The number of entities by type listed in the table below is included in
the scope of consolidation in addition to the parent company
Allianz SE.
SCOPE OF CONSOLIDATION
5-Consolidation
Certain prior-period amounts have been reclassified to conform to
the current period presentation.
OTHER RECLASSIFICATIONS
CHANGE IN PRESENTATION
The amendments and interpretations are not expected to have a
material impact on the financial position and financial results of the
Allianz Group. Early adoption is generally allowed but not intended
by the Allianz Group.
FURTHER AMENDMENTS AND INTERPRETATIONS
In addition to the above-mentioned recently issued accounting pro-
nouncements, the following amendments and revisions to standards
and interpretations have been issued by the IASB but are not yet
effective for or adopted early by the Allianz Group.
IAS 19, Defined Benefit Plan: Employee Contributions,
Annual Improvements to IFRSS 2010 - 2012 Cycle,
Annual Improvements to IFRSS 2011 - 2013 Cycle.
IFRIC 21, Levies,
Since the third quarter of 2015, certain changes in U.S. life products
have been presented net in a single line item in order to provide more
relevant information. This change in presentation had no material
impact.
RECENTLY ADOPTED ACCOUNTING PRONOUNCEMENTS
effective 1 January 2015
The recoverable amounts of all cash generating units (CGUS) to which
goodwill has been allocated are typically determined on the basis of
value in use calculations. The determination of a CGU's recoverable
amount requires significant judgment regarding the selection of
appropriate valuation techniques and assumptions. These assump-
tions include the selection of appropriate discount rates, planning
horizons, capitalization requirements, and the expected future busi-
ness results. Assumptions may need to change as economic, market
€ 2,448 MN related to the business segment Property-Casualty,
€ 2,087 MN related to the business segment Life/Health, and
€ 7,566 MN related to the business segment Asset Management.
-
As of 31 December 2015, the Allianz Group reported total goodwill of
€ 12,101 MN, of which:1
GOODWILL
For further details, please refer to the explanations to the list of
participations of the Allianz Group from > page 234 of this Annual
Report onwards.
Pursuant to IFRS 11, investments in joint arrangements have to
be classified as either joint operations or joint ventures depending on
the contractual rights and obligations of each investor. The Allianz
Group has assessed the nature of all its joint arrangements and
determined them to be joint ventures.
For certain investment funds in which the Allianz Group holds a
stake of above 20%, management has assessed that the Allianz Group
has no significant influence because it is not represented in the gov-
erning bodies of these investment funds.
For certain investment funds managed by third parties where
the Allianz Group holds a majority stake, management has assessed
that the Allianz Group does not control these investment funds
because it has neither a majority representation in the governing
bodies of these investment funds nor any substantial removal rights
to replace the asset manager.
For certain investment funds managed by the Allianz Group in
which the Allianz Group holds a minority stake, management has
assessed that the Allianz Group controls these investment funds
because of its asset management role combined with its aggregate
economic interest in these investment funds.
139 Consolidated Statements of Cash Flows
141 Notes
138 Consolidated Statements of
Changes in Equity
137 Consolidated Statements of
Comprehensive Income
135 Consolidated Balance Sheets
136 Consolidated Income Statements
D- Consolidated Financial Statements
Annual Report 2015 Allianz Group
152
The following interpretation as well as the amendments to and revi-
sions of existing standards became effective for the Allianz Group's
consolidated financial statements as of 1 January 2015:
Although the Allianz Group's share in some companies is below
20%, management has assessed that the Allianz Group has signifi-
cant influence over these companies because it is represented in the
governing bodies that decide on the relevant activities of these com-
panies.
and business conditions change. As such, the Allianz Group continu-
ously evaluates external conditions and the operating performances
of the CGUS.
The Allianz Group's processes and controls around the estima-
tion of recoverable amounts are generally applied at the Allianz
Group level and are designed to minimize subjectivity. For example,
the assumptions used are required to be consistent with the para-
meters of the well-defined planning and controlling processes.
Important input factors for those calculations are the business plan,
the estimate of the sustainable returns, and eternal growth rates, as is
further explained in note 15 Intangible assets. The Allianz Group also
performs sensitivity tests with regard to key value drivers, such as
projected long-term combined ratios or discount rates. Furthermore,
the Allianz Group reviews market-based business transaction multi-
ples where available. This information is used to assess reasonable-
ness since directly comparable market value information is not gener-
ally available.
To determine control for investment funds managed by the
Allianz Group, management considers in particular the remuneration
to which the asset manager is entitled, the exposure to variability of
returns from these investments, and the rights held by other parties.
When the exposure to variability of returns is within a certain range,
significant judgment is required for the determination of the appro-
priate inclusion method of these investment funds.
As of 31 December 2015, the Allianz Group reported deferred tax
assets of € 1,394 MN. The deferred tax assets before netting with
deferred tax liabilities amounted to € 19,874 MN. € 1,614 MN thereof
resulted from tax losses which are carried forward to future periods.²
Generally, the subsidiaries undertaking the restructuring pro-
gram are responsible for determining all underlying estimates and
assumptions. For this purpose, the subsidiaries must have imple-
mented appropriate procedures in place to plan and control the
program. The respective documentation has to be submitted to the
Allianz Group Accounting and Reporting department, where qualified
staff members review all restructuring programs. This includes a
review of all estimates and assumptions, and an assessment of
whether all requirements for setting up a restructuring provision are
satisfied, including which cost components can be treated as restruc-
turing charges.
4- Recently adopted and issued
accounting pronouncements and changes
in the presentation of the consolidated
financial statements
DEFERRED TAX ASSETS
The detailed formal plan of a restructuring program necessary
for recognizing a restructuring provision is based on several esti-
mates and assumptions, such as the number of employees to be dis-
missed, amount of severance payments, impacts of onerous contracts,
possibilities of sub-leases of vacated properties, timing of the various
steps of the program and in consequence timing of the expected cash
flows.
As of 31 December 2015, the Allianz Group reported provisions for
restructuring programs of € 112 MN.²
RESTRUCTURING PROVISIONS
Due to changing market and economic conditions, the under-
lying assumptions may differ from actual developments. Potential
financial impacts from deviations in certain critical assumptions
based on respective sensitivity analyses are disclosed in note 48 Pen-
sions and similar obligations.
Liabilities for pension and similar obligations and related net
pension expenses are determined in accordance with actuarial valu-
ation models. These valuations rely on extensive assumptions. Key
assumptions including discount rates, inflation rates, compensation
increases, pension increases and rates of medical cost trends are
defined centrally at the Allianz Group level, considering the circum-
stances in the particular countries. In order to ensure their thorough
and consistent determination, all input parameters are discussed
and defined, taking into consideration economic developments, peer
reviews, and currently available market and industry data. The dis-
count rate assumptions are determined by reference to yields of high-
quality corporate bonds of appropriate duration and currency at the
reporting date. In countries where there is no deep market in such
bonds, market yields on government bonds are generally used as dis-
As of 31 December 2015, the Allianz Group reported a defined benefit
obligation for defined benefit plans of € 22,327 MN, which is offset by
the fair value of plan assets of € 13,333 MN.¹
count rates.
153
Annual Report 2015 Allianz Group
Deferred tax assets are determined based on tax loss carry for-
wards, unused tax credits, and deductible temporary differences
between the Allianz Group's carrying amounts of assets and liabili-
ties in its consolidated balance sheet and their tax bases. Deferred tax
assets are recognized only to the extent it is probable that sufficient
future taxable income will be available for their realization. Assess-
ments as to the recoverability of deferred tax assets require the use
of judgment regarding assumptions related to estimated future tax-
able profits. This includes the character and amounts of taxable
future profits, the periods in which those profits are expected to
occur, and the availability of tax planning opportunities.
2- Please refer to note 2 Summary of significant accounting policies and note 42 Income taxes for further
details.
1- Please refer to note 2 Summary of significant accounting policies and note 15 Intangible assets for further
details.
The analysis and forecasting required in this process, and as a
result the determination of the deferred tax assets, is performed for
individual jurisdictions by qualified local tax and financial profes-
sionals. Given the potential significance surrounding the underlying
estimates and assumptions, Group-wide policies and procedures
have been designed to ensure consistency and reliability around the
recoverability assessment process. Forecasted operating results are
based upon approved business plans, which are themselves subject
to a well-defined process of control. As a matter of policy, especially
strong evidence supporting the recognition of deferred tax assets is
required if an entity has suffered a loss in either the current or pre-
ceding period.
PENSION LIABILITIES AND SIMILAR OBLIGATIONS
Recognition and recoverability of all significant deferred tax
assets are reviewed by tax professionals at Group level and the Allianz
Group Tax Committee.
(18)
1
90
5,784
4,976
(12)
(497)
(41)
(18)
108
(531)
(60)
130
181
72
1,767
2,009
115
97
(406)
4
1
3
(27)
(2)
2
(2)
56
(30)
3
(1,528)
78
143
68
86
22
40
1,117
1,403
105
33
3
16
15
(1,660)
119
(1)
5
3,448
4,124
60
81
89
38
55
1,236
1,512
103
37
109
163
74
23
2
11
5,382
5,603
86
105
128
57
1,699
1,846
104
74
(43,485)
(46,407)
178
106
(3,439)
(4,157)
(423)
(469)
(15,362)
(16,261)
(3,818)
(3,878)
(45)
(34)
159
(33)
(22)
12
13
(49)
(63)
4
(2)
(13)
(17)
(2)
(2)
22
(537)
(181)
(7)
(13)
11
(168)
(31)
(47)
(2)
1
463
746
(114)
(99)
3
5
(1)
141
272
(223)
60
127,284
3,981
Other income
Fee and commission income
742
946
2,369
5,416
Operating realized gains/losses (net)
(66)
2
383
(954)
Operating income from financial assets and liabilities carried at fair value through income (net)
3,918
3,962
9,226
9,325
Interest and similar income
4,458
4,587
16,073
15,115
Premiums earned (net)
(17,779)
(18,495)
(8,599)
(8,553)
Deposits from insurance and investment contracts
Operating revenues
Claims and insurance benefits incurred (net)
209
203
(18)
(377)
(965)
Operating impairments of investments (net)
(22)
(19)
(101)
(94)
Interest expenses
(2,257)
(2,229)
(8,683)
(8,762)
(7)
22,237
Change in reserves for insurance and investment contracts (net)
(4,112)
(14,810)
(14,678)
9,604
10,303
28,387
29,281
21
27
133
169
531
778
(3,878)
60
23,082
23,668
93.5
96.5
96.5
102.6
102.9
28.3
28.4
5
31.0
34.6
30.6
32.5
29.7
29.5
28.0
28.0
66.0
66.2
65.6
62.7
64.5
61.1
66.8
67.0
74.6
74.8
3,290
95.2
97.4
96.6
5
Statutory premiums (net)
52
(344)
(257)
Change in unearned premiums
(1,022)
(561)
(159)
(133)
23,266
23,591
25,176
24,058
24,672
Ceded premiums written
2014
2015
2014
2015
Western & Southern Europe,
Middle East, Africa, India
German Speaking Countries
and Central & Eastern Europe
€ MN
REPORTABLE SEGMENTS - LIFE/HEALTH
REPORTABLE SEGMENTS - LIFE/HEALTH
165
Annual Report 2015 Allianz Group
94.3
94.6
Statutory premiums¹
(1)
91.9
(30)
2014
2015
Property-Casualty
Consolidation and Other¹
Allianz Worldwide Partners
Asia Pacific
Global Insurance Lines &
Anglo Markets
Iberia & Latin America
139 Consolidated Statements of Cash Flows
141 Notes
138 Consolidated Statements of
Changes in Equity
137 Consolidated Statements of
Comprehensive Income
135 Consolidated Balance Sheets
136 Consolidated Income Statements
D- Consolidated Financial Statements
Annual Report 2015 Allianz Group
164
4- Represents the total of acquisition and administrative expenses (net), excluding one-off effects from
pension revaluation, and claims and insurance benefits incurred (net) divided by premiums earned (net).
5-Presentation not meaningful.
91.1
90.9
(218)
92.1
28.0
27.6
26.3
25.9
63.1
63.3
65.6
2015
2014
2015
2014
4,469
5,565
(247)
(200)
(250)
(254)
(4,224)
(6,239)
(705)
(738)
48,322
51,597
(4,469)
66.2
(5,565)
3,975
722
774
19,680
21,931
4,437
4,566
2014
2015
2014
2015
2014
2015
3,341
(4,933)
3- Represents acquisition and administrative expenses (net), excluding one-off effects from pension revalu-
ation, divided by premiums earned (net).
1- The 2014 analysis of the Allianz Group's asbestos risks resulted in a reduction of reserves and a positive
run-off result of € 86 MN reflected in the operating profit for 2014.
(35)
(40)
(2)
(2)
Amortization of intangible assets
(530)
(166)
One-off effects from pension revaluation
(98)
(96)
(37)
(82)
Non-operating impairments of investments (net)
172
221
134
236
(45)
(6)
(50)
(72)
Non-operating income from financial assets and liabilities carried at fair value through income (net)
Non-operating realized gains/losses (net)
1,588
1,798
1,743
1,683
Operating profit
(87)
(485)
79
(6)
Combined ratio4 in %
Loss ratio² in %
Expense ratio³ in %
966
1,271
940
1,147
15
12
8
(1)
980
1,283
948
2- Represents claims and insurance benefits incurred (net) divided by premiums earned (net).
1,147
(595)
(309)
(449)
1,583
1,878
1,258
1,596
Shareholders
Net income attributable to:
Non-controlling interests
Net income
Income taxes
Income before income taxes
Non-operating items
(602)
(1)
(3,961)
(33)
(71)
(72)
1
(1)
(3)
(1)
(39)
(50)
(3)
(538)
(460)
(13)
(4)
(16)
(17)
(6)
(13)
(28,878)
(30,721)
86
(1,956)
(2,220)
(286)
(306)
(10,140)
(10,711)
(2,758)
(59)
(20)
(16)
(14)
(149)
(9)
(96)
(1,180)
(1,367)
79
84
(544)
(704)
(543)
(559)
(12,400)
(13,208)
(2,799)
11
(924)
(1,225)
(136)
(163)
(4,506)
(4,725)
(1,035)
(1,049)
(323)
(337)
(1)
(91)
(102)
11
(87)
48,867
(92)
སྱེ
38
45
37
43
1,241
1,249
197
195
43,759
46,430
2,981
3,538
443
501
15,176
15,994
3,699
3,741
(602)
(234)
(113)
(237)
(28)
(19)
(280)
302
3,601
3,595
14
8
(106)
3,544
4,285
480
543
17,061
18,107
3,922
3,952
60
279
206
18
52,010
2
1,474
(90)
(95)
526
706
646
667
186
252
6
(25)
(4)
(9)
1,260
(293)
24,215
(670)
298
36
10
(131)
(51)
(126)
45
(47)
3,327
3,796
(17)
(10)
105
(83)
15
47
656
841
229
231
(41,504)
(44,688)
45
46
(2,580)
(3,144)
(447)
183
(508)
(1)
(16)
132
(253)
11
47
524
839
213
215
(12)
(6)
28
(170)
(4)
(36)
(222)
(7)
(179)
(7)
(13)
(21)
(18)
(1)
(1)
(131)
(2)
(15)
(16)
(16)
(1,886)
(3,244)
(987)
(25)
(38)
(54)
(7)
(8)
(6)
(13)
(3)
(1)
(107)
(108)
41
41
(13)
(20)
(1)
(1)
(8)
(14)
(2)
(2)
(12,563)
(13,550)
(798)
(1,037)
(53)
(58)
(21)
(209)
(202)
(1,615)
(1,024)
(217)
(262)
(5)
3
(32)
8
(19)
(19)
(387)
(599)
(5,860)
(6,922)
(10)
(903)
(677)
(1,199)
11231
(1)
(24)
(24)
(70)
(100)
(653)
(956)
(85)
(117)
(1,060)
(1,013)
(17)
3,790
3,316
Non-operating items
Amortization of intangible assets
One-off effects from pension revaluation
Acquisition-related expenses
Realized gains/losses (net)
Operating profit
2,603
2,297
(3,784)
(4,182)
Operating expenses
3
(41)
Restructuring charges
(3,787)
(4,141)
Administrative expenses (net), excluding acquisition-related expenses and one-off effects from pension revaluation
6,388
6,479
Operating revenues
6
4
Other income
5
(8)
Income from financial assets and liabilities carried at fair value through income (net)
(3)
Income before income taxes
Income taxes
Net income
Net income attributable to:
Annual Report 2015 Allianz Group
168
59.2
64.5
3- Represents operating expenses divided by operating revenues.
2- Represents interest and similar income less interest expenses.
1 - Represents fee and commission income less fee and commission expenses.
Cost-income ratio³ in %
86
1,535
1,378
71
1,621
1,449
(5)
(967)
2,588
2,266
(15)
(31)
(11)
(11)
(14)
(31)
6
11
4
Shareholders
Non-controlling interests
(817)
(672)
6,380
Net interest income²
122
143
2,478
(17)
(10)
75
2,320
2,621
(17)
(10)
106
(224)
2
36
371
594
165
157
(996)
(1,169)
(27)
28
(8)
(11)
(154)
(245)
(48)
(58)
2,198
42
44
38
Net fee and commission income¹
2014
2015
€ MN
REPORTABLE SEGMENTS - ASSET MANAGEMENT
REPORTABLE SEGMENTS - ASSET MANAGEMENT
167
65
67
3
Annual Report 2015 Allianz Group
43
(30)
6,488
71
81
87
256
235
31
33
(262)
2
36
371
594
121
116
236
(1,422)
(100)
(44)
166
2- Represents operating profit divided by the average of the current and previous year-end net reserves,
where net reserves equal reserves for loss and loss adjustment expenses, reserves for insurance and
investment contracts and financial liabilities for unit-linked contracts less reinsurance assets.
3-Presentation not meaningful.
53
64
63
65
642
888
1,005
34
47
13
16
1,116
676
935
1,018
1,133
(258)
(321)
(500)
(563)
934
1,256
1,518
1,695
119
194
Annual Report 2015 Allianz Group
D- Consolidated Financial Statements
135 Consolidated Balance Sheets
136 Consolidated Income Statements
137 Consolidated Statements of
Comprehensive Income
6,774
589
634
11,840
10,475
1,844
2,037
2014
2015
2014
2015
2014
2015
(8)
2014
2014
2015
2014
2015
Life/Health
Consolidation
Asia Pacific
Anglo Markets
USA
Iberia & Latin America
Global Insurance Lines &
139 Consolidated Statements of Cash Flows
141 Notes
138 Consolidated Statements of
Changes in Equity
2015
5,736
(12)
(25)
Operating expenses
(13)
(18)
(200)
(244)
Other expenses
(4)
(2)
(1)
(29)
Restructuring charges
(19)
(19)
Operating amortization of intangible assets
(249)
(425)
(45)
(51)
Fee and commission expenses
(1,845)
(1,962)
(2,017)
(2,062)
Acquisition and administrative expenses (net), excluding one-off effects from pension revaluation
(228)
(256)
(608)
(27,574)
(26,860)
(9,241)
(8,789)
(1)
(2)
(13)
(17)
(17)
153
240
2
(5)
(4)
1- Statutory premiums are gross premiums written from sales of life and health insurance policies, as well
as gross receipts from sales of unit-linked and other investment-oriented products, in accordance with
the statutory accounting practices applicable in the insurer's home jurisdiction.
Margin on reserves² in basis points
Shareholders
(11)
Non-controlling interests
Net income (loss)
Income taxes
Income (loss) before income taxes
Non-operating items
Non-operating amortization of intangible assets
One-off effects from pension revaluation
Non-operating impairments of investments (net)
Non-operating income from financial assets and liabilities carried at fair value through income (net)
Non-operating realized gains/losses (net)
Operating profit (loss)
815
1,062
1,527
1,707
Net income (loss) attributable to:
Investment expenses
(666)
66,903
1
113
115
140
180
3,204
6,459
(3)
(4)
13
11
57
55
26
35
(1,367)
(2,050)
(15)
17,307
18,331
རྒྱུ©
(9)
(12)
(58)
(12)
(1,641)
(1,092)
51
32
(3)
(3)
(20,775)
(20,986)
(1,090)
(1,092)
(308)
(332)
(84)
(112)
(605)
(661)
44,832
48,484
(63)
32
(56)
3,061
462
555
2,542
4,085
1,215
1,255
156
198
3
1
1,017
1,331
2,685
(1,120)
27
(41)
11,717
10,357
1,828
2,021
(544)
(309)
(151)
(129)
(29)
6
(8)
22
(4)
(4)
(630)
(747)
1,120
666
(329)
(421)
(112)
(146)
(115)
(140)
(12)
(12)
67,331
494
448
6,224
5,255
728
838
71
74
3,030
3,813
374
360
24,514
(9,334)
1,910
2,172
448
(41)
494
1,193
643
653
(41,643)
(41,632)
(3,345)
(4,052)
(10,734)
(9,163)
(1,185)
(1,368)
66,157
65,847
984
108,669
138 Consolidated Statements of
Changes in Equity
Change in reserves for insurance and investment contracts (net)²
(996)
4,124
3,448
2,621
2,320
143
3,981
159
3,290
143
2,478
122
2,198
(1,169)
2- For the year ended 31 December 2015, includes expenses for premium refunds (net) in Property-Casualty
162
Annual Report 2015 Allianz Group
D- Consolidated Financial Statements
135 Consolidated Balance Sheets
136 Consolidated Income Statements
137 Consolidated Statements of
Comprehensive Income
139 Consolidated Statements of Cash Flows
141 Notes
Asset Management
2015
6,479
Corporate and Other
2014
of € (240) MN (2014: € (307) MN).
2015
(1,528)
3,316
Non-operating amortization of intangible assets
Reclassification of tax benefits
Non-operating items
(181)
(537)
(13)
(63)
(49)
(222)
(36)
181
(1,660)
(406)
(12)
Income (loss) before income taxes
Income taxes
Net income (loss)
Net income (loss) attributable to:
Non-controlling interests
Shareholders
1- Total revenues comprise statutory gross premiums written in Property-Casualty and Life/Health, operating
revenues in Asset Management and total revenues in Corporate and Other (Banking).
5,784
4,976
3,790
(6)
One-off effects from pension revaluation
6,388
Consolidation
(184)
6,726
3,205
(10)
(454)
(573)
270
346
(375)
(415)
(1,258)
15
(697)
(77)
340
342
(1,094)
(961)
(13)
2
237
259
314
183
(85)
577
(1,301)
22
2014
2015
2014
Group
2015
556
(365)
(344)
125,190
2014
122,253
(2,089)
70,645
7
790
876
(321)
(342)
22,408
21,443
5
(15)
33
9
68,274
Acquisition-related expenses
Interest expenses from external debt
Income from fully consolidated private equity investments (net)
Subtotal
Fee and commission income
Other income
(337)
(323)
(1,013)
(903)
3,360
3,373
20,421
17,457
Investment expenses
1,474
1,331
1,017
279
60
198
156
(30,721)
(28,878)
(20,986)
(20,775)
(460)
1,260
(538)
(677)
(20)
(106)
(103)
(109)
(114)
(20)
(59)
(17)
(16)
(11)
(14)
(39)
(1,199)
(39)
(387)
Investment expenses
Operating impairments of investments (net)
Interest expenses
Change in reserves for insurance and investment contracts (net)
(6,312)
(6,907)
(108)
(107)
Operating impairments of investments (net)
(59)
(464)
(13,550)
(12,563)
Claims and insurance benefits incurred (net)
3,327
Reclassification of tax benefits
Operating profit (loss)
Non-operating investment result
Non-operating income from financial assets and liabilities carried at fair value
through income (net)
(99)
(114)
(51)
(131)
Non-operating realized gains/losses (net)
746
3,796
463
183
Non-operating impairments of investments (net)
(223)
(168)
(18)
(21)
Subtotal
424
180
228
31
298
5,382
5,603
(217)
(7,512)
Loan loss provisions
Acquisition and administrative expenses (net),
excluding acquisition-related expenses and one-off effects from pension revaluation
(13,208)
(12,400)
(6,922)
(5,860)
Fee and commission expenses
(1,367)
(1,180)
(599)
(387)
Operating amortization of intangible assets
(19)
(19)
Restructuring charges
(149)
(30)
(32)
3
Other expenses
(34)
(45)
(262)
24,319
Acquisition and administrative expenses (net), excluding one-off effects from pension revaluation
21,274
7,825
1,449
1,621
(1,003)
(657)
63
(204)
890
(129)
(3,209)
6,987
8,848
(2,245)
6,603
71
1,378
86
1,535
356
Annual Report 2015 Allianz Group
(1)
371
(203)
(129)
6,616
14
(1,017)
(673)
381
6,221
163
15
REPORTABLE SEGMENTS - PROPERTY-CASUALTY
374
(817)
(11)
(8)
(8)
(304)
(104)
(62)
(901)
(62)
(901)
(31)
(15)
(967)
(432)
(250)
(929)
(539)
(1,554)
2,266
2,588
(1,377)
(1,013)
(267)
(1,020)
10,196
(192)
(11)
REPORTABLE SEGMENTS - PROPERTY-CASUALTY
German Speaking Countries
and Central & Eastern Europe
931
877
Operating income from financial assets and liabilities carried at fair value through income (net)
Operating realized gains/losses (net)
Fee and commission income
Other income
Operating revenues
Claims and insurance benefits incurred (net)
(43)
8
16
(8)
1,208
252
162
140
33
39
39
34
33
8
13,300
13,030
11,929
186
€ MN
1,149
10,915
Western & Southern Europe,
Middle East, Africa, India
2015
2014
2015
2014
Gross premiums written
Ceded premiums written
14,061
13,673
11,855
10,939
10,006
(2,209)
(856)
(829)
Change in unearned premiums
Premiums earned (net)
Interest and similar income
(111)
(44)
(83)
(104)
11,741
11,455
(2,174)
558
224
(14)
(1,489)
(1,310)
30
7
(25,729)
(23,351)
(1,523)
(1,445)
(745)
(567)
457
(3,787)
342
(3,238)
(19)
(19)
(41)
3
(9)
8
(231)
(16)
(2)
(7)
(3,777)
170
(4,141)
(60)
974
724
(845)
(707)
10,945
10,119
4
6
149
117
(154)
(45)
(124)
216
5
3
(51,702)
(49,650)
(55)
(828)
(14,065)
(13,929)
(60)
(45)
476
134
(129)
(135)
4
252
144
(181)
(47)
724
312
(52)
(42)
(8)
19
(197)
(60)
(849)
(846)
(849)
(846)
11
6
1
1
12
7
(31)
(23)
(268)
(7)
(27)
62
901
62
901
2,297
2,603
(945)
(820)
(16)
(91)
10,735
10,402
(58)
(33)
(10)
(25'
(219)
(303)
4
337
184
(170)
(22)
1,211
812
8,011
10,922
(3,039)
(3,017)
Loans and advances to banks and customers
374,589
390,785
97,129
99,649
Investments
5,238
6,431
601
643
Financial assets carried at fair value through income
13,781
7,555
3,668
3,635
Cash and cash equivalents
2014
2015
2014
2015
Life/Health
Property-Casualty
ASSETS
as of 31 December
8,467
€ MN
14,963
91,411
Non-current assets and assets of disposal groups classified as held for sale
18,723
18,792
23,494
23,489
Other assets
240
310
1,013
1,107
Deferred tax assets
95,138
17,667
4,595
4,647
Deferred acquisition costs
5,176
5,632
8,466
9,265
Reinsurance assets
94,564
105,873
Financial assets for unit-linked contracts
20,587
37
BUSINESS SEGMENT INFORMATION - CONSOLIDATED BALANCE SHEETS
159
105,873
94,564
(54)
(55)
14,843
13,587
25,234
22,262
294
177
1,395
117,075
1,782
(2,167)
1,394
1,046
2,677
2,951
9,626
8,595
(15,772)
(16,684)
38,813
37,080
(1,712)
BUSINESS SEGMENT INFORMATION - CONSOLIDATED BALANCE SHEETS
117,630
(6,980)
Annual Report 2015 Allianz Group
Previously reported information has been adjusted to reflect this
change in the composition of the Allianz Group's reportable seg-
ments. Additionally, some minor reallocations between the report-
able segments have been made.
Due to further changes in the Board of Management, effective
1 September 2015, the reportable segment Growth Markets ceased to
exist. The reallocation of its former parts has led to changes in the
structure, the renaming of other reportable segments as well as the
introduction of a new reportable segment Asia Pacific which consists
of the insurance business in that region. The insurance business in
Central & Eastern Europe has been integrated into the previous
reportable segment German Speaking Countries, which was renamed
to German Speaking Countries and Central & Eastern Europe. The
insurance business in Russia and Ukraine has been allocated to the
reportable segment Global Insurance Lines & Anglo Markets. The
insurance business in India, Middle East and North Africa has been
integrated into the previous reportable segment Western & Southern
Europe, which was renamed to Western & Southern Europe, Middle
East, Africa, India.
Effective 1 January 2015, the Allianz Group has reorganized the struc-
ture of its insurance activities to reflect the changes in the responsi-
bilities of the Board of Management. The property-casualty insurance
operations of the former reportable segment USA have been allocated
to the reportable segment Global Insurance Lines & Anglo Markets.
RECENT ORGANIZATIONAL CHANGES
Operating profit should be viewed as complementary to, and not as
a substitute for, income before income taxes or net income as deter-
mined in accordance with IFRS.
For life/health insurance business and property-casualty insur-
ance products with premium refunds, all items listed above are
included in operating profit if the profit sources are shared with
policyholders. This is also applicable to tax benefits, which are
shared with policyholders. IFRS requires that the consolidated
income statements present all tax benefits in the income taxes
line item, even when they belong to policyholders. In the seg-
ment reporting, tax benefits are reclassified and shown within
operating profit in order to adequately reflect the policyholder
participation in tax benefits.
In all reportable segments, income from financial assets and
liabilities carried at fair value through income (net) is treated as
operating profit if the income relates to operating business.
-
The following exceptions apply to this general rule:
139 Consolidated Statements of Cash Flows
141 Notes
(6,917)
138 Consolidated Statements of
Changes in Equity
136 Consolidated Income Statements
135 Consolidated Balance Sheets
D- Consolidated Financial Statements
(108,454)
(94,048)
509,493
486,445
99
72
15,591
17,547
137 Consolidated Statements of
Comprehensive Income
61
72
Intangible assets
2015
Asset Management
139 Consolidated Statements of Cash Flows
141 Notes
138 Consolidated Statements of
Changes in Equity
137 Consolidated Statements of
Comprehensive Income
135 Consolidated Balance Sheets
136 Consolidated Income Statements
D- Consolidated Financial Statements
Annual Report 2015 Allianz Group
160
587,714
625,088
Corporate and Other
112,969
Total liabilities
95
95
Subordinated liabilities
13
12
38
12
Certificated liabilities
3
15
115,702
Liabilities of disposal groups classified as held for sale
Consolidation
2014
106
230
5,875
7,268
(521)
(495)
511
625
46
64
13,863
Group
14,842
(541)
2,028
1,952
1,449
1,329
2014
2015
2014
2015
2014
2015
(838)
13,739
14,856
19,445
Liabilities to banks and customers
8,240
8,834
129
112
Financial liabilities carried at fair value through income
LIABILITIES AND EQUITY
2014
2015
2014
2015
901
Life/Health
as of 31 December
€ MN
618,318
655,086
156,710
159,034
Total assets
92
3,063
2,998
2,722
2,781
Property-Casualty
878
5,807
4,273
19,533
Other liabilities
4,226
3,137
2,681
2,482
Deferred tax liabilities
94,564
105,873
Financial liabilities for unit-linked contracts
449,263
472,010
14,276
14,407
Reserves for insurance and investment contracts
10,081
10,857
58,925
61,169
Reserves for loss and loss adjustment expenses
3,222
3,605
16,595
17,071
Unearned premiums
83
(3,012)
109
7,286
Premiums earned (net)
Property-Casualty
Life/Health
2015
2014
2015
2014
51,597
48,322
66,903
67,331
46,430
43,759
7,653
24,514
Total revenues¹
Operating investment result
€ MN
BUSINESS SEGMENT INFORMATION - TOTAL REVENUES AND RECONCILIATION OF OPERATING PROFIT (LOSS)
TO NET INCOME (LOSS)
(50)
(32,018)
(50)
12,258
12,037
(34,943)
782,843
742,085
Total equity
66,099
63,702
Total liabilities and equity
848,942
805,787
Annual Report 2015 Allianz Group
161
BUSINESS SEGMENT INFORMATION - TOTAL REVENUES AND RECONCILIATION OF OPERATING PROFIT (LOSS) TO NET INCOME (LOSS)
Interest and similar income
3,601
3,595
(21)
(23)
(17)
(4)
(4)
(49)
(39)
(33)
(134)
(154)
Operating expenses
Other expenses
Restructuring charges
Fee and commission expenses
(2,799)
(11)
(5)
(11,618)
(11,287)
18,331
17,307
Operating income from financial assets and liabilities carried at fair value
through income (net)
(25)
6
(2,050)
(1,367)
73,938
Operating realized gains/losses (net)
186
6,459
3,204
Interest expenses, excluding interest expenses from external debt
(72)
(71)
(10,131)
252
71,130
24,215
2,940
2,407
2014
2015
2014
750
648
(489)
(521)
9,207
8,496
174
174
21,777
20,749
(3,127)
2015
2014
Group
Consolidation
11
685
13,443
12,348
12,087
156,483
139,900
(3,057)
(134,008)
848,942
235
13,755
805,787
Asset Management
2015
2014
Corporate and Other
2015
(121,229)
25,531
(7,778)
(15)
(3,695)
12,231
12,054
102
18
102
38,609
(4,075)
38,686
4,932
4,003
(2,167)
80
24,256
(1,712)
189
28,028
23,015
(24,834)
8,383
(22,710)
12,213
(17)
8,207
20,660
19,800
(23)
72,003
68,989
(195)
(18)
486,222
463,334
105,873
94,564
16
2,750
(205)
11,992
2
2,231
(8)
(4)
(15)
33
149
724
117
876
974
790
565
23516
213
1,114
1,127
1
192
513
(2)
10
16
1,899
22
1,750
(45)
(255)
(305)
(745)
(567)
(9)
3
1
(9)
8
(2)
(7)
(2)
(7)
(1,032)
(1,047)
(176)
(146)
8
(2,844)
(2,571)
(340)
(212)
(1,310)
1
(2)
(2)
1
(454)
(573)
(60)
(60)
(45)
(1)
(1)
(9)
(8)
3
(85)
(77)
(409)
(438)
(165)
(137)
(1,489)
3
848
2014
(241)
(317)
Loan loss provisions
Investment expenses
(76)
(72)
Administrative expenses (net), excluding acquisition-related expenses and one-off effects from pension revaluation
(917)
(736)
Fee and commission expenses
(405)
(266)
Restructuring charges
4
Other expenses
Operating expenses
(1,639)
(1,386)
Operating profit (loss)
(1,076)
(917)
Non-operating income from financial assets and liabilities carried at fair value through income (net)
(58)
(32)
Realized gains/losses (net)
Interest expenses, excluding interest expenses from external debt
260
Operating revenues
562
D- Consolidated Financial Statements
135 Consolidated Balance Sheets
136 Consolidated Income Statements
137 Consolidated Statements of
Comprehensive Income
138 Consolidated Statements of
Changes in Equity
139 Consolidated Statements of Cash Flows
141 Notes
Annual Report 2015 Allianz Group
169
REPORTABLE SEGMENTS - CORPORATE AND OTHER
REPORTABLE SEGMENTS - CORPORATE AND OTHER
€ MN
Interest and similar income
Holding & Treasury
2015
222
2014
265
Operating income from financial assets and liabilities carried at fair value through income (net)
(28)
27
Fee and commission income
Other income
221
61
148
116
469
171
Impairments of investments (net)
(23)
Cost-income ratio¹ for the reportable segment Banking in %
1- Represents investment expenses, administrative expenses (net), excluding acquisition-related expenses
and one-off effects from pension revaluation, restructuring charges and other expenses divided by interest
and similar income, operating income from financial assets and liabilities carried at fair value through
income (net), fee and commission income, other income, interest expenses, excluding interest expenses
from external debt, and fee and commission expenses.
170
Annual Report 2015 Allianz Group
D- Consolidated Financial Statements
135 Consolidated Balance Sheets
136 Consolidated Income Statements
137 Consolidated Statements of
Comprehensive Income
138 Consolidated Statements of
Changes in Equity
139 Consolidated Statements of Cash Flows
141 Notes
Banking
2015
2014
546
590
Alternative Investments
2015
23
Consolidation
Corporate and Other
2014
2015
2014
2015
(685)
(1,110)
(685)
(1,110)
Income from fully consolidated private equity investments (net)
Interest expenses from external debt
(849)
(846)
Acquisition-related expenses
One-off effects from pension revaluation
Amortization of intangible assets
Non-operating items
Income (loss) before income taxes
Income taxes
Net income (loss)
Net income (loss) attributable to:
94
Non-controlling interests
1
1
230
563
(8)
(8)
(447)
(157)
(1,524)
(1,074)
414
389
Shareholders
(25)
66
30
110
Other insurance reserves
4,998
5,366
Aggregate policy reserves
6,947
7,712
Reserves for loss and loss adjustment expenses
1,519
1,655
1,094
4,998
5,366
Carrying amount as of 31 December
2014
2015
as of 31 December
(9)
(212)
Other changes
114
183
Changes recorded in the consolidated income
statements
€ MN
REINSURANCE ASSETS
430
397
Total
14,843
123
13,587
Changes in the reserves for loss and loss adjustment expenses ceded
to reinsurers in the business segment Property-Casualty are shown
in the respective table in note 19 Reserves for loss and loss adjust-
ment expenses.
25,234
708
1,033
870
6131
20,685
23,588
16,089
18,941
Life/Health
Subtotal
4,595
4,647
Property-Casualty
Foreign currency translation adjustments
as of 31 December
Deferred acquisition costs
2015
€ MN
DEFERRED ACQUISITION COSTS
12-Deferred acquisition costs
Reinsurance involves credit risk and is subject to aggregate loss
limits. Reinsurance does not legally discharge the respective Allianz
company from primary liability under the reinsured policies. Although
the reinsurer is liable to this company to the extent of the business
ceded, the Allianz company remains primarily liable as the direct
insurer on all the risks it underwrites, including the share that is rein-
sured. The Allianz Group monitors the financial condition of its rein-
surers on a regular basis and reviews its reinsurance arrangements
periodically in order to evaluate the reinsurer's ability to fulfill its
obligations to the Allianz Group companies under existing and
planned reinsurance contracts. The Allianz Group's evaluation crite-
ria, which include the degree of creditworthiness, capital levels and
marketplace reputation of its reinsurers, are such that the Allianz
Group believes that its reinsurance credit risk is not significant, and
historically has not experienced noteworthy difficulty in collecting
claims from its reinsurers. Additionally, and as appropriate, the
Allianz Group may also require letters of credit, deposits, or other
financial guarantees to further minimize its exposure to credit risk.
In certain cases, however, the Allianz Group does establish an allow-
ance for doubtful amounts related to reinsurance as appropriate,
although this amount was not significant as of 31 December 2015 and
2014. The Allianz Group primarily maintains business relations with
highly rated reinsurers.
The Allianz Group reinsures a portion of the risks it underwrites
in an effort to control its exposure to losses and events and to protect
its capital resources. For natural catastrophe events, the Allianz
Group maintains a centralized program that pools exposures from
its subsidiaries by internal reinsurance agreements. Allianz SE limits
exposures in this portfolio through external reinsurance. For other
risks, the subsidiaries of the Allianz Group have individual reinsur-
ance programs in place. Allianz SE participates with up to 100% on an
arm's length basis in these cessions, in line with local requirements.
The risk coming from these cessions is also limited by external retro-
cessions.
139 Consolidated Statements of Cash Flows
141 Notes
138 Consolidated Statements of
Changes in Equity
137 Consolidated Statements of
Comprehensive Income
135 Consolidated Balance Sheets
136 Consolidated Income Statements
D- Consolidated Financial Statements
Annual Report 2015 Allianz Group
176
2014
4,463
4,998
Carrying amount as of 1 January
> 3 years up to
> 1 year up to
> 3 months up
Loans and advances to customers
Total
Loans and advances to banks
as of 31 December 2015
€ MN
LOANS AND ADVANCES TO BANKS AND CUSTOMERS BY CONTRACTUAL MATURITY
LOANS AND ADVANCES TO BANKS AND CUSTOMERS BY CONTRACTUAL MATURITY
1-Primarily include covered bonds.
117,075
55,668
61,407
Greater than
117,630
55,417
Total
(298)
117,373
55,966
(298)
(307)
567
112,363
55,950
12
56,4141
555
61,407
375
117,936
62,519
(307)
Loan loss allowance
62,213
22,262
Up to 3 months
3 years
11 Reinsurance assets
2014
2015
€ MN
CHANGES IN AGGREGATE POLICY RESERVES CEDED TO REINSURERS
Changes in aggregate policy reserves ceded to reinsurers are as follows:
As of 31 December 2015, impaired loans amounted to € 515 MN (2014:
€ 728 MN). The interest income recognized on these impaired loans
amounted to € 1 MN (2014: € 2 MN).
117,936
76,449
17,045
13,226
6,411
4,804
to 1 year
62,519
8,225
5,333
3,042
2,717
55,417
33,246
8,820
7,893
3,370
2,087
Total
5 years
5 years
43,203
55,417
Present value of future profits
Deferred sales inducements
Total
DEFERRED ACQUISITION COSTS
16,163
16,349
Subtotal
(151)
Reclassifications
(693)
(647)
Less allowance for doubtful accounts
(170)
(134)
Amortization
4,711
4,340
Other
(34)
34
Changes in shadow accounting
1,951
2,264
Reinsurers
27
(6)
Foreign currency translation adjustments
4,348
4,379
Agents
1,046
Carrying amount as of 31 December
613
870
Tax receivables
Subtotal
DEFERRED SALES INDUCEMENTS
256
296
Other prepaid expenses
25
32
Interest and rent
DEFERRED SALES INDUCEMENTS
Prepaid expenses
7,836
7,887
Accrued dividends, interest and rent
870
3,422
Subtotal
1,426
1,512
Other taxes
3,021
2,889
Cost as of 31 December
1,996
1,698
Income taxes
2,151
2,277
Accumulated amortization as of 31 December
3,210
Carrying amount as of 1 January
5,846
6,013
743
Foreign currency translation adjustments
Changes in shadow accounting
Amortization
159
3,350
3,268
15,837
16,089
Carrying amount as of 1 January
Reclassification of entities from
Asset Management to Life/Health
Additions
LIFE/HEALTH
4,595
4,647
(5,727)
(6,186)
82
892
44
Carrying amount as of 31 December
Foreign currency translation adjustments
Amortization
Changes in the consolidated subsidiaries
of the Allianz Group
5,847
6,194
4,354
4,595
2014
2015
Carrying amount as of 1 January
Additions
PROPERTY-CASUALTY
€ MN
CHANGES IN DEFERRED ACQUISITION COSTS
39
1- In the second quarter of 2015, € 151 MN were reclassified from present value of future profits to intangible
assets.
1,895
(3,055)
2014
2015
Policyholders
Receivables
as of 31 December
€ MN
OTHER ASSETS
(1,908)
2,954
2014
(2,151)
Accumulated amortization as of 1 January
3,021
(1,832)
Cost as of 1 January
€ MN
PRESENT VALUE OF FUTURE PROFITS
13-Other assets
PRESENT VALUE OF FUTURE PROFITS
177
Annual Report 2015 Allianz Group
20,685
23,588
Total
16,089
18,941
Carrying amount as of 31 December
(2,318)
2015
328
Subtotal
62,509
10
11
(250)
3,566
(2)
(1,270)
32,314
(550)
9,680
(720)
22,633
130
3
(1)
126
Total
Equity securities
Subtotal
Other
(837)
17,868
(288)
4,086
(550)
13,782
Corporate bonds
(338)
10,450
(197)
(5)
3,577
(255)
26,200
2014
2015
€ MN
ASSOCIATES AND JOINT VENTURES
As of 31 December 2015, loans to associates and joint ventures as well
as available-for-sale debt securities issued by associates and joint
ventures held by the Allianz Group amounted to € 2,195 MN (2014:
€ 654 MN).
INVESTMENTS IN ASSOCIATES AND JOINT VENTURES
The amortized cost and fair value of available-for-sale debt securities
and held-to-maturity debt securities as of 31 December 2015, by con-
tractual term to maturity, are as follows:
CONTRACTUAL TERM TO MATURITY
As of 31 December 2015, unrealized losses from equity securities
amounted to € 402 MN. These unrealized losses concern equity securi-
ties that did not meet the criteria of the Allianz Group's impairment
policy for equity securities as described in note 2 Summary of sig-
nificant accounting policies. The major part of the unrealized losses
have been in a continuous loss position for less than 6 months.
Equity securities
Total unrealized losses amounted to € 4,152 MN as of 31 December 2015.
The Allianz Group holds a large variety of bonds issued by corpora-
tions mostly domiciled in OECD countries. For the vast majority of the
Allianz Group's corporate bonds, the issuers and/or issues are of
“investment grade”. The increase in unrealized losses of € 3,314 MN is
is driven by an increasing interest environment and spread over sev-
eral sectors with energy as main driver. Based on a detailed analysis
of the underlying securities, the Allianz Group did not consider these
investments to be impaired as of 31 December 2015.
Corporate bonds
139 Consolidated Statements of Cash Flows
141 Notes
3,579
138 Consolidated Statements of
Changes in Equity
136 Consolidated Income Statements
135 Consolidated Balance Sheets
D- Consolidated Financial Statements
Annual Report 2015 Allianz Group
174
During 2015, government and government agency bond perfor-
mance has been negative, due to a increasing interest rate level,
resulting in an increase of unrealized losses of € 1,126 MN. The unreal-
ized losses on the Allianz Group's investment in government bonds
were spread over many countries, particulary related to South Ame-
rican countries. Based on a detailed analysis of the underlying secu-
rities, the Allianz Group did not consider these investments to be
impaired as of 31 December 2015.
Total unrealized losses amounted to € 1,464 MN as of 31 December 2015.
The Allianz Group holds a large variety of government bonds, mostly
of OECD countries (Organization of Economic Cooperation and Devel-
opment). In general, the credit risk of government and government
agency bonds is rather moderate since they are backed by the fiscal
capacity of the issuers who typically hold an investment grade coun-
try- and/or issue-rating.
Government and government agency bonds
(1,525)
35,891
(554)
9,691
(970)
137 Consolidated Statements of
Comprehensive Income
(141)
6,871
Government and government agency bonds
(7)
(5,859)
100,430
(1,477)
8,396
(4,382)
92,033
Subtotal
197
4
194
Other
(4,152)
60,607
Equity securities
(1,095)
(3,057)
56,578
Corporate bonds
(1,464)
32,243
(253)
2,227
(1,212)
30,016
Government and government agency bonds
(98)
1,942
(74)
4,029
Share of earnings
Total
(396)
(4,778)
(46)
1,621
(36)
900
(10)
722
Other asset-backed securities
(44)
2,136
(27)
1,049
(17)
1,087
3,704
95,737
Corporate mortgage-backed securities (residential and commercial)
63
(1)
46
(residential and commercial)
Government and agency mortgage-backed securities
Debt securities
2014
(402)
(6,261)
3,705
104,135
(1,483)
8,398
(6)
1
109
113,573
292
Share of other comprehensive income
Share of total comprehensive income
175
Annual Report 2015 Allianz Group
As of 31 December 2015, real estate held for investment pledged as
security and other restrictions on title were € 36 MN (2014: € 36 MN).
Actual maturities may deviate from the contractually defined matur-
ities because certain security issuers have the right to call or repay
certain obligations ahead of schedule, with or without redemption or
early repayment penalties. Investments that are not due at a single
maturity date are, in general, not allocated over various maturity
buckets but shown within their final contractual maturity dates.
3,165
2,745
864
677
Due after 10 years
Total
695
599
Due after 5 years and up to 10 years
1,209
1,104
Due after 1 year and up to 5 years
14,403
15,113
Cost as of 31 December
397
365
Due in 1 year or less
3,054
3,136
Accumulated depreciation as of 31 December
HELD-TO-MATURITY DEBT SECURITIES
11,349
11,977
10- Loans and advances to banks and customers
LOANS AND ADVANCES TO BANKS AND CUSTOMERS
€ MN
as of 31 December
365
Other
51,0631
Loans
696
696
878
878
Collateral paid for securities borrowing transactions and derivatives
125
4
121
5
Carrying amount as of 31 December
5
3,622
3,106
3,106
Reverse repurchase agreements
Short-term investments and certificates of deposit
Total
Customers
Banks
Total
Customers
Banks
2014
2015
3,622
447,742
413,320
Total
Amortized Cost
247
of the Allianz Group
as of 31 December 2015
€ MN
CONTRACTUAL TERM TO MATURITY
Changes in the consolidated subsidiaries
983
1,025
Additions
10,783
11,349
Carrying amount as of 1 January
Fair Value
(3,053)
Accumulated depreciation as of 1 January
13,837
14,403
Cost as of 1 January
2014
2015
€ MN
REAL ESTATE HELD FOR INVESTMENT
REAL ESTATE HELD FOR INVESTMENT
250
371
54
80
(3,054)
196
Disposals and reclassifications into non-current
assets and assets of disposal groups classified as
held for sale
(291)
44
40
Reversals of impairments
184,654
164,399
Due after 10 years
(24)
(37)
Impairments
125,753
117,713
Due after 5 years and up to 10 years
(232)
(330)
(251)
108,383
102,847
Due after 1 year and up to 5 years
57
218
Foreign currency translation adjustments
28,952
28,361
Due in 1 year or less
30
(283)
Reclassifications
AVAILABLE-FOR-SALE DEBT SECURITIES
Depreciation
281
Derivative financial instruments used for hedging
€ MN
Amortized
Cost
Unrealized
Gains
Unrealized
Losses
Fair Value
Amortized
Cost
Unrealized
Gains
Unrealized
Losses
Fair Value
securities (residential and commercial)
3,860
143
(10)
3,993
3,548
192
(2)
3,738
Corporate mortgage-backed securities
(residential and commercial)
12,879
243
(128)
12,994
13,685
546
(44)
14,186
2014
2015
Government and agency mortgage-backed
Debt securities
2,258
2,214
Financial assets designated at fair value
through income
Debt securities
2,645
1,887
Equity securities
Subtotal
Total
2,365
1,773
5,010
Other asset-backed securities
3,660
5,875
172
Annual Report 2015 Allianz Group
D- Consolidated Financial Statements
135 Consolidated Balance Sheets
136 Consolidated Income Statements
137 Consolidated Statements of
Comprehensive Income
138 Consolidated Statements of
Changes in Equity
139 Consolidated Statements of Cash Flows
141 Notes
AVAILABLE-FOR-SALE INVESTMENTS
AVAILABLE-FOR-SALE INVESTMENTS
€ MN
as of 31 December
7,268
4,303
223
(98)
15,048
United States
14,248
645
(82)
14,810
10,574
875
(34)
11,415
South Korea
7,430
1,190
(5)
8,619
882
7,038
Belgium
7,412
1,589
(59)
8,942
5,866
1,818
7,684
Austria
5,442
1,246
6,156
Subtotal
2,152
14,948
4,427
4,313
284
(46)
4,552
Government and government agency bonds
France
31,039
8,052
(70)
39,021
31,113
9,509
12,900
(21)
Italy
23,459
5,521
(54)
28,926
25,203
5,557
(5)
30,755
Germany
13,081
1,919
(52)
40,601
(10)
1,618
Derivative financial instruments
41
(16)
(1,377)
(1,013)
(35)
(24)
(5)
(9)
374
70
53
36
(25)
(1,003)
356
(657)
5
7
9
65
45
27
(33)
ཁཀླ
8
73.2
79.9
14
77
105
(192)
(432)
(945)
(820)
(58)
(33)
15
13
61
(4)
(1)
(52)
(42)
337
184
(1,017)
(27)
(52)
(42)
(849)
(846)
1
1
224
558
(8)
(8)
11
11
(46)
(7)
15
(673)
Annual Report 2015 Allianz Group
Treasury bills, discounted treasury notes, similar
treasury securities, bills of exchange and checks
Total
6,465
6,625
Investments in associates and joint ventures
5,056
4,059
14,842
13,863
Real estate held for investment
11,977
11,349
Total
509,493
1,154
486,445
at fair value through income
FINANCIAL ASSETS CARRIED AT FAIR VALUE THROUGH INCOME
€ MN
as of 31 December
2015
2014
Financial assets held for trading
Debt securities
489
402
Equity securities
187
195
8- Financial assets carried
1,582
contracts assumed
184
171
NOTES TO THE CONSOLIDATED BALANCE SHEETS
7- Cash and cash equivalents
9- Investments
CASH AND CASH EQUIVALENTS
€ MN
INVESTMENTS
€ MN
as of 31 December
2015
2014
as of 31 December
2015
Funds held by others under reinsurance
2014
7,764
6,657
Available-for-sale investments
488,365
465,914
Balances with central banks
388
397
Held-to-maturity investments
2,745
3,969
Cash on hand
225
Balances with banks payable on demand
6,678
5,476
1,698
425
(5)
3,165
3,969
741
(1)
4,710
1-Also include corporate mortgage-backed securities.
Annual Report 2015 Allianz Group
173
UNREALIZED LOSSES ON AVAILABLE-FOR-SALE
INVESTMENTS AND HELD-TO-MATURITY INVESTMENTS
The following table sets forth gross unrealized losses on available-
for-sale investments and held-to-maturity investments, as well as the
related fair value, broken down by investment category and length of
time such investments have been in a continuous unrealized loss
position as of 31 December 2015 and 2014.
UNREALIZED LOSSES ON AVAILABLE-FOR-SALE INVESTMENTS AND HELD-TO-MATURITY INVESTMENTS
€ MN
as of 31 December
2015
Up to 12 months
Greater than 12 months
Fair Value
Unrealized
Losses
Fair Value
Total
Unrealized
Losses
Unrealized
Losses
Fair Value
Debt securities
Government and agency mortgage-backed securities
2,745
Total
1,933
(1)
€ MN
as of 31 December
2015
2014
Amortized
Cost
Unrealized
Unrealized
Gains
Losses
Fair Value
Amortized
Cost
Unrealized
Gains
Unrealized
Losses
(residential and commercial)
Fair Value
2,184
363
(2)
2,544
2,398
379
2,777
562
62
(3)
621
1,571
362
Government and government agency bonds
Corporate bonds¹
775
(9
23
1,291
1,426
Equipment
(203)
350
Changes in shadow accounting
2,142
2,361
Software
142
127
Foreign currency translation adjustments
2,566
Amortization
3,261
121
61
Additions
Property and equipment
807
708
Carrying amount as of 1 January
477
565
firm commitments
2014
2015
that meet the criteria for hedge accounting and
Real estate held for own use
HELD-TO-MATURITY INVESTMENTS
(213)
Fixed assets of alternative investments
(1)
799
(10)
Corporate mortgage-backed securities (residential and commercial)
3,375
(73)
1,266
(54)
4,641
(128)
Other asset-backed securities
Annual Report 2015 Allianz Group
178
(158)
1-Includes other assets due within one year of € 31,068 MN (2014: € 28,069 MN).
38,813
Total¹
1,437
1,664
Other assets
7,464
8,811
Subtotal
708
1,033
Carrying amount as of 31 December
1,465
1,763
37,080
HELD-TO-MATURITY INVESTMENTS
465,914
(1,524)
972
Ireland
1,352
37
(23)
1,365
620
28
648
Russia
380
2
(18)
105
365
(71)
401
Portugal
158
29
187
198
29
227
Greece
1
2
3
472
1
868
98
Spain
9,119
829
(152)
9,795
5,055
944
Switzerland
5,015
698
(2)
5,711
4,695
918
610
3,599
374
(10)
3,963
4,102
506
lel leel
7,173
5,997
5,305
4,607
Hungary
821
Netherlands
37
2
Supranationals
18,807
(837)
211,284
Other
3,357
588
Subtotal
413,320
40,276
(7)
(5,854)
3,938
447,742
2,471
499
193,315
(2)
Equity securities
Total
28,906
442,226
12,119
52,396
(402)
(6,256)
40,624
488,365
379,757
26,113
405,870
50,255
11,313
61,568
(1,269)
428,743
(255)
37,171
2,968
3
220,367
12,681
16,899
2,577
(64)
19,412
15,726
3,202
(3)
18,925
All other countries
37,632
1,592
(865)
38,359
(4,149)
33,401
(196)
35,217
Subtotal
177,087
26,398
(1,462)
202,023
162,426
29,928
(338)
192,016
Corporate bonds
211,835
2,013
Unearned premiums
1,349
16
1,358
1,327
287
281
Insurance German Speaking
Countries
Brand
names
Goodwill
Brand
names
Goodwill
2014
2015
PROPERTY-CASUALTY
CGU
Asia Pacific
as of 31 December
ALLOCATION OF CARRYING AMOUNTS OF GOODWILL AND BRAND NAMES TO CGUS
The carrying amounts of goodwill and brand names are allocated to
the Allianz Group's CGUS as of 31 December 2015 and 2014² as follows:
The CGU Selecta Group S.à r.l. in the business segment Corporate and
Other was disposed of in the fourth quarter of 2015.
PIMCO.
The business segment Asset Management is represented by the CGU
Asset Management, including mainly Allianz Global Investors and
Central and Eastern Europe, including Bulgaria, Croatia, Czech
Republic, Hungary, Poland, Romania and Slovakia, and
Insurance USA.
-
Asia Pacific,
-
Insurance Western & Southern Europe, Middle East and Africa,
including Belgium, France, Greece, Italy, Luxembourg, the Nether-
lands, Turkey, Egypt, Lebanon and Africa,
Insurance German Speaking Countries,
Health Germany,
CGUS in the Life/Health business segment are:
Specialty Lines II, including Allianz Worldwide Partners.
€ MN
21
21
81
Europe, Middle East and Africa
Insurance Western & Southern
326
327
Health Germany
602
611
Insurance German Speaking
Countries
LIFE/HEALTH
Subtotal
2,440
6
2,448
21
21
Specialty Lines II
38
39
Specialty Lines I
321
6
386
Anglo Markets
Global Insurance Lines &
3
307
292
Central and Eastern Europe
86
Specialty Lines I, including Allianz Re, Allianz Global Corporate &
Specialty and Credit Insurance, and
Global Insurance Lines & Anglo Markets, including Australia,
Ireland, Russia, Ukraine and the United Kingdom,
Central and Eastern Europe, including Bulgaria, Croatia, Czech
Republic, Hungary, Poland, Romania and Slovakia,
Asia Pacific,
EQUIPMENT
€ MN
REAL ESTATE HELD FOR OWN USE
€ MN
2015
2014
Cost as of 1 January
3,867
3,823
2015
2014
Accumulated depreciation as of 1 January
(2,576)
(2,651)
Cost as of 1 January
3,637
3,497
Carrying amount as of 1 January
1,291
1,173
Accumulated depreciation as of 1 January
(1,071)
(1,074)
Additions
435
349
Carrying amount as of 1 January
2,566
2,423
Equipment
654
Real estate held for own use
139 Consolidated Statements of Cash Flows
141 Notes
Insurance Iberia & Latin America, including Mexico, Portugal,
South America and Spain,
Insurance Western & Southern Europe, Middle East and Africa,
including Belgium, France, Greece, Italy, Luxembourg, the Nether-
lands, Turkey, Egypt, Lebanon and Africa,
Insurance German Speaking Countries,
-
-
-
-
-
CGUS in the Property-Casualty business segment are:
For the purpose of impairment testing, the Allianz Group has allo-
cated goodwill to CGUS¹. These CGUS represent the lowest level at
which goodwill is monitored for internal management purposes.
Allocation principles
Impairment test for goodwill and other
intangible assets with indefinite useful lives
181
Annual Report 2015 Allianz Group
Due to the rebranding activities of the Allianz Group in the Rus-
sian market, the amortization of the brand name of the Russian
People's Insurance Society "Rosno" was € 3 MN in 2015. Thus, the brand
is now completely amortized.
Brand names in 2014 consisted primarily of the brand name "Selecta"
which was disposed of in the fourth quarter of 2015.
Brand names
Additions are related to goodwill arising from the acquisition of spe-
cific distribution activities of the Property-Casualty insurance busi-
ness of UnipolSai Assicurazioni S.p.A., Bologna, from the acquisition
of Assurances Médicales S.A., Paris, and from the acquisition of several
windparks.
2014
Compared to 2014, the composition of several CGUS and, corre-
spondingly, the allocation of goodwill has changed due to changes in
the Board of Management of Allianz SE during 2015, accompanied by
a reallocation of responsibilities among the Board Members. For the
CGU Asia Pacific in the business segment Life/Health, this change
translated into a transfer of the region Middle East from the CGU Asia
Pacific to the CGU Insurance Western & Southern Europe, Middle East
and Africa.
As a result of the impairment test, all of the goodwill of € 171 MN
allocated to the CGU Asia Pacific in the business segment Life/Health
was completely impaired mainly driven by steadily decreasing and
persisting low interest rates in South Korea. The recoverable amount
of the CGU Asia Pacific in the business segment Life/Health is its value
in use and amounted to € 1,920 MN. The reference rate used for the
current estimate is the local swap curve minus 10 basis points credit
risk adjustment plus 15 basis points volatility adjustment (South
Korea only) (2014: local swap curve minus 10 basis points credit risk
adjustment plus 5 basis points volatility adjustment (South Korea
only)).
Disposals relate mainly to the sale of Selecta Group S.à r.l., Luxem-
bourg during the fourth quarter of 2015.
Additions are mainly related to goodwill arising from the acquisition
of the Property-Casualty insurance business of the Territory Insurance
Office, Darwin, effective 1 January 2015, as well as from the acquisition
of several windparks.
2015
D- Consolidated Financial Statements
135 Consolidated Balance Sheets
136 Consolidated Income Statements
137 Consolidated Statements of
Comprehensive Income
138 Consolidated Statements of
Changes in Equity
PROPERTY AND EQUIPMENT
656
Asia Pacific
171
The new business value calculation is based on a best estimate of one
year of value of new business, multiplied by a factor (multiple) to
capture expected future new business. The best estimate of new busi-
ness is generally derived from the achieved value of new business.
The new business multiple accounts for the risk and the growth asso-
ciated with future new business in analogy to the discount rate and
the growth rate in a discounted earnings method. For all CGUS in the
Life/Health business segment, a multiple of not more than ten times
the value of new business is applied.
In the business segment Life/Health, excluding Life/Health Asia
Pacific due to the recognized impairment, sensitivity analyses were
performed based on MCEV sensitivity testing on the reference rate.
The analyses have shown that in case of a decrease in reference rates
by 50 basis points the appraisal value of each CGU still exceeds its
carrying amount.
For the CGUS in the business segment Property-Casualty and for
the CGU Asset Management, sensitivity analyses were performed in
respect to the long-term sustainable combined ratios and cost-
income ratios. For all CGUS, excluding Property-Casualty Asia Pacific,
discounted earnings value sensitivities still exceeded their respective
carrying amounts. The recoverable amount of the CGU Asia Pacific in
the business segment Property-Casualty slightly exceeds its carrying
amount. An increase of less than 50 basis points in the discount rate
or the combined ratio results in the recoverable amount of the CGU
getting close to its carrying amount.
Sensitivity analyses were performed with regard to discount rates
and key value drivers of the business plans.
Sensitivity analysis
For entities included in the CGU of the Asset Management busi-
ness segment, key assumptions include assets under management
growth, cost-income ratio and risk capital. The key assumptions are
based on the current market environment. The discount rate for the
CGU Asset Management is 9.6% and the eternal growth rate is 1.0%.
Local swap curve minus 10 bps credit risk adjustment
plus 83 bps volatility adjustment
Local swap curve minus 10 bps credit risk adjustment
plus volatility adjustment for the following currencies only
(HRK: 0 bps, cZK: 8 bps, PLN: 31 bps)
For other entities:
Euro swap curve minus 10 bps credit risk adjustment
plus 25 bps volatility adjustment
For those entities reporting in Euro:
Local swap curve minus 10 bps credit risk adjustment
(South Korea only) plus 15 bps volatility adjustment
(South Korea only)
Euro swap curve minus 10 bps credit risk adjustment
plus 25 bps volatility adjustment
Euro swap curve minus 10 bps credit risk adjustment
plus 25 bps volatility adjustment
CHF Swap curve minus 10 bps credit risk adjustment
plus 10 bps volatility adjustment
Euro swap curve minus 10 bps credit risk adjustment
plus 25 bps volatility adjustment
Reference rate for entities with Appraisal Value
based on MCEV
Insurance USA
Central and Eastern
Europe
Insurance Western &
Southern Europe,
Middle East and Africa
Asia Pacific
Health Germany
Speaking Countries
CGUS in the Life/Health
business segment
Insurance German
REFERENCE RATES FOR THE CGUS IN THE LIFE/HEALTH BUSINESS SEGMENT
The following table provides an overview of the reference rates
for the CGUS in the Life/Health business segment:
Reference rates used for the calculation of the best estimate fol-
low EIOPA specifications for the Solvency II guidance.
183
Annual Report 2015 Allianz Group
For entities included in the CGUS of the business segment Life/Health,
the MCEV is the excess of assets over liabilities of the MVBS according
to the Solvency II requirements. Assets and liabilities included in the
MVBS are measured at their market value as of the reporting date.
Technical provisions are an essential part of the liabilities included
in the MVBS and generally consist of the best estimate plus a risk mar-
gin. The best estimate corresponds to the probability-weighted aver-
age of future cash flows considering the time value of money, using
the relevant risk-free interest rate term structure. The calculation of
the best estimate is based on assumptions made for demographic
factors (e.g. mortality, morbidity, lapse/surrender rates), expense
allowances, taxation, assumptions on market conditions for market
consistent projections (e.g. reference rates, volatilities) as well as
investment strategy and asset allocation of the entity. The risk margin
ensures that the value of the technical provisions is equivalent to the
amount that the entity would be expected to require in order to take
on and meet the insurance and reinsurance obligations.
184
1 - The table provides an overview of weighted key parameters on CGU level of the country-specific discount
rates and eternal growth rates used.
Annual Report 2015 Allianz Group
135 Consolidated Balance Sheets
Banks
Total
Customers
Banks
2014
2015
as of 31 December
€ MN
LIABILITIES TO BANKS AND CUSTOMERS
17- Liabilities to banks and customers
8,496
9,207
8,493
3
9,203
4
2014
2015
Total
Other trading liabilities
Derivative financial instruments
Financial liabilities held for trading
as of 31 December
€ MN
FINANCIAL LIABILITIES CARRIED AT FAIR VALUE THROUGH INCOME
carried at fair value through income
16 Financial liabilities
139 Consolidated Statements of Cash Flows
141 Notes
138 Consolidated Statements of
Changes in Equity
137 Consolidated Statements of
Comprehensive Income
136 Consolidated Income Statements
D- Consolidated Financial Statements
Changes in the consolidated subsidiaries
Global Insurance Lines & Anglo Markets
Specialty Lines I
Specialty Lines II
Asia Pacific
135 Consolidated Balance Sheets
136 Consolidated Income Statements
D- Consolidated Financial Statements
2- The allocation as of 31 December 2014 is based on the allocation of goodwill before the changes in the
Board of Management of Allianz SE during 2015.
Annual Report 2015 Allianz Group
182
1- The following paragraphs include all CGUS that contain goodwill.
The recoverable amounts for all CGUS are determined on the basis of
value in use calculations. The Allianz Group applies generally
acknowledged valuation principles to determine the value in use.
289
12,166
12,101
286
307
286
307
Valuation techniques
Total
Selecta Group S.à r.l.
Subtotal
CORPORATE AND OTHER
ASSET MANAGEMENT
7,187
7,566
2,232
2,087
454
471
Insurance USA
Subtotal
23
23
Central and Eastern Europe
137 Consolidated Statements of
Comprehensive Income
Central and Eastern Europe
138 Consolidated Statements of
Changes in Equity
For all CGUS in the Property-Casualty business segment and for
the CGU Asset Management, the Allianz Group uses the discounted
earnings method to derive the value in use. Generally, the basis for
the determination of the discounted earnings value is the business
plan ("detailed planning period”) as well as the estimate of the sus-
tainable returns and eternal growth rates, which can be assumed to
be realistic on a long-term basis (“terminal value") for the operating
entities included in the CGU. The discounted earnings value is calcu-
lated by discounting the future earnings using an appropriate dis-
count rate. The business plans applied in the value in use calculations
are the results of the structured management dialogues between the
Board of Management of the Allianz Group and the operating entities
in connection with a reporting process integrated into these dialogues.
Generally, the business plans comprise a planning horizon of three
years and are based on the current market environment.
1.0
8.0
1.0
8.0
1.0
8.8
1.5
8.8
4.0
11.5
4.5
16.5
Insurance Iberia & Latin America
2.1
9.2
1.0
7.8
growth rate
Discount rate
CGUS in the Property-Casualty business segment
Insurance German Speaking Countries
Insurance Western & Southern Europe, Middle East
and Africa
Eternal
%
DISCOUNT RATES AND ETERNAL GROWTH RATES FOR THE CGUS
IN THE PROPERTY-CASUALTY BUSINESS SEGMENT'
The discount rate is based on the capital asset pricing model
(CAPM) and appropriate eternal growth rates. The assumptions,
including the risk-free interest rate, market risk premium, segment
beta, and leverage ratio used to calculate the discount rates are in
general consistent with the parameters used in the Allianz Group's
planning and controlling process. The discount rates and eternal
growth rates for the CGUS in the Property-Casualty business segment
are as follows:
For entities included in the CGUS of the Property-Casualty busi-
ness segment, the business plans are mainly based on key assump-
tions including expense ratio, loss ratio, investment income, risk
capital, market share, premium rate changes and taxes. The basis for
determining the values assigned to the key assumptions are current
market trends and earnings projections.
In determining the business plans, certain key assumptions were
made in order to project future earnings.
Significant assumptions
For all CGUS in the Life/Health business segment the value in use
is based on an Appraisal Value method which is derived from the
Embedded Value and new business value calculation. As a starting
point for the impairment test for the CGUS in the Life/Health business
segment, the Market Consistent Embedded Value (MCEV) and a mul-
tiple of the Market Consistent Value of New Business is used. MCEV is
an industry-specific valuation method to assess the current value of
the in-force portfolio. The Allianz Group uses an economic balance
sheet approach to derive the MCEV, which is directly taken out of the
Market Value Balance Sheet (MVBS) as determined using Solvency II
guidance.
The terminal values are largely based on the expected profits of
the final year of the detailed planning period. Where necessary, the
planned profits are adjusted to reflect long-term sustainable earn-
ings. The financing of the assumed eternal growth in the terminal
values is accounted for by appropriate profit retention.
139 Consolidated Statements of Cash Flows
141 Notes
Customers
of the Allianz Group
18
as held for sale
Münsterländische Bank Thie & Co. KG, Münster
102
Bürgel Wirtschaftsinformationen, Hamburg
Allianz Life & Annuity Company, Minneapolis
15
3
18
102
Total
DISPOSAL GROUPS CLASSIFIED AS HELD FOR SALE
Münsterländische Bank Thie & Co. KG, Münster
In May 2015, the Allianz Group completed the sale of Münsterlän-
dische Bank Thie & Co. KG, Münster, which had been classified as a
disposal group held for sale during the fourth quarter of 2014. Upon
measurement of the disposal group at fair value less costs to sell, no
impairment losses were recognized until the disposal.
Bürgel Wirtschaftsinformationen, Hamburg
During the fourth quarter of 2015, the Allianz Group decided to dis-
pose of Bürgel Wirtschaftsinformationen, Hamburg. Thus, the assets
and liabilities of the consolidated entities, which are allocated to the
reportable segment Global Insurance Lines & Anglo Markets (Property-
Casualty), were classified as held for sale. As of 31 December 2015, no
cumulative gains were recorded in other comprehensive income
relating to the disposal group classified as held for sale. The sale is
expected to occur during the first quarter of 2016. Upon measurement
of the disposal group at fair value less costs to sell, no impairment
loss was recognized for the year ended 31 December 2015.
Liabilities of disposal groups classified
Allianz Life & Annuity Company, Minneapolis
During the fourth quarter of 2015, the Allianz Group decided to dis-
pose of Allianz Life & Annuity Company, Minneapolis, a preconsoli-
dated subsidiary of Allianz Life Insurance Company of North America,
Minneapolis. Thus, the assets and liabilities of the consolidated entity,
which are allocated to the reportable segment USA (Life/Health), were
classified as held for sale. As of 31 December 2015, no cumulative
gains were recorded in other comprehensive income relating to the
disposal group classified as held for sale. The sale is expected to occur
during the first half-year of 2016. Upon measurement of the disposal
group at fair value less costs to sell, no impairment loss was recog-
nized for the year ended 31 December 2015.
Real estate held for own use classified as held for sale had com-
prised, as of 31 December 2014, several office buildings allocated to
the reportable segment Global Insurance Lines & Anglo Markets
(Property-Casualty), which were sold during the third quarter of 2015,
as expected.
As of 31 December 2015, real estate held for own use classified as
held for sale comprised an office building allocated to the reportable
segment Western & Southern Europe, Middle East, Africa, India (Life/
Health). The sale of this building is expected to be completed during
the third quarter of 2016. Upon measurement of this building at fair
value less costs to sell, no impairment loss was recognized for the
year ended 31 December 2015.
180
Annual Report 2015 Allianz Group
D- Consolidated Financial Statements
135 Consolidated Balance Sheets
136 Consolidated Income Statements
137 Consolidated Statements of
Comprehensive Income
138 Consolidated Statements of
Changes in Equity
139 Consolidated Statements of Cash Flows
141 Notes
15- Intangible assets
INTANGIBLE ASSETS
€ MN
NON-CURRENT ASSETS CLASSIFIED AS HELD FOR SALE
As of 31 December 2014, real estate held for investment classified as
held for sale had comprised several office buildings allocated to the
reportable segment German Speaking Countries and Central & Eastern
Europe (Life/Health), which were sold during the first quarter of 2015,
as expected.
Total
Subtotal
Real estate held for own use
4,516
4,218
Cost as of 31 December
6,878
6,360
1-As of 31 December 2015, includes € 1,534 MN (2014: € 1,398 MN) for self-developed software and € 827 MN
(2014: € 743 MN) for software purchased from third parties.
Annual Report 2015 Allianz Group
179
14- Non-current assets and disposal
groups classified as held for sale
NON-CURRENT ASSETS AND DISPOSAL GROUPS CLASSIFIED AS HELD FOR SALE
€ MN
as of 31 December
Assets of disposal groups classified as held for sale
Münsterländische Bank Thie & Co. KG, Münster
Bürgel Wirtschaftsinformationen, Hamburg
Allianz Life & Annuity Company, Minneapolis
Subtotal
2015
2014
83
92
63
61
63
152
109
235
35
11
46
83
Non-current assets classified as held for sale
Real estate held for investment
as of 31 December
12,166
289
12,455
2015
€ MN
290
2015
2014
Cost as of 1 January
13,156
12,534
Accumulated impairments as of 1 January
(990)
Carrying amount as of 1 January
12,166
(990)
11,544
Additions
70
Disposals
(316)
Foreign currency translation adjustments
352
331
Impairments
(171)
Carrying amount as of 31 December
12,101
12,166
Accumulated impairments as of 31 December
976
Cost as of 31 December
13,077
990
13,156
GOODWILL
Accumulated amortization as of 31 December
Goodwill
5- Include primarily heritable building rights of € 38 MN (2014: € 17 MN), land use rights of € 13 MN (2014:
€ 8 MN) and lease rights of € 10 MN (2014: € - MN).
2014
Intangible assets with indefinite useful lives
Goodwill
12,101
Brand names¹
6
Subtotal
12,107
Intangible assets with finite useful lives
Distribution agreements²
Acquired business portfolios³
Customer relationships4
Other5
Subtotal
Total
1- For 2014, include primarily the brand name "Selecta".
64
899
948
186
116
231
135
1,337
13,443
1,300
57
13,755
2- Include primarily the long-term distribution agreements with Commerzbank AG of € 298 MN (2014:
€ 335 MN), Banco Popular S.A. of € 389 MN (2014: € 353 MN), Yapı ve Kredi Bankası A.S. of € 122 MN (2014:
€ 147 MN) and HSBC Asia, HSBC Turkey and BTPN Indonesia of € 79 MN (2014: € 90 MN).
3- Includes primarily acquired business portfolios of Allianz Yasam ve Emeklilik A.S. of € 120 MN (2014: € - MN),
Allianz Hayat ve Emeklilik A.S. of € 10 MN (2014: €- MN) and of Allianz Popular Pensiones EGFP S.A. of
€ 17 MN (2014: € 18 MN). Until the third quarter of 2015, the intangible assets category "Acquired business
portfolios" was included in the intangible assets category "Other". In the second quarter of 2015, € 151 MN
were reclassified from present value of future profits to intangible assets category "Acquired business
portfolios".
4- Include primarily customer relationships from acquired parts of the insurance business of UnipolSai
Assicurazioni S.p.A. of € 76 MN (2014: € 100 MN) and from the acquisition of Selecta of € - MN (2014:
€ 85 MN), Assurances Médicales S.A. of € 16 MN (2014: € 18 MN) and Yapı Kredi Sigorta A.S. of € 6 MN (2014:
€ 8 MN).
INTANGIBLE ASSETS WITH INDEFINITE USEFUL LIVES
2,142
2,361
Carrying amount as of 31 December¹
Accumulated depreciation as of 31 December
2,828
2,576
Depreciation
(74)
(68)
Cost as of 31 December
4,254
3,867
Reversals of impairments
4
2
Carrying amount as of 31 December
3,261
2,566
Accumulated depreciation as of 31 December
1,084
1,071
Cost as of 31 December
4,345
3,637
Fixed assets of alternative investments
FIXED ASSETS OF ALTERNATIVE INVESTMENTS1
As of 31 December 2015, assets pledged as security and other restric-
tions on title were € 121 MN (2014: € 113 MN).
€ MN
2015
2014
Cost as of 1 January
2,284
11
2,009
Foreign currency translation adjustments
1,426
Additions
183
346
Disposals
(94)
(52)
Changes in the consolidated subsidiaries
of the Allianz Group
84
Reclassifications
(10)
1
Disposals and reclassifications into non-current
Foreign currency translation adjustments
30
35
assets and assets of disposal groups classified as
held for sale
Depreciation
(278)
(226)
(110)
(116)
Impairments
(13)
(5)
Reclassifications
593
(32)
Carrying amount as of 31 December
1,291
63
Software
(819)
709
691
Carrying amount as of 31 December
1,763
1,465
Changes in the consolidated subsidiaries
Accumulated depreciation as of 31 December
387
819
of the Allianz Group
(15)
9
Cost as of 31 December
2,151
2,284
Disposals and reclassifications into non-current
assets and assets of disposal groups classified as
held for sale
1- Include fixed assets of wind parks, solar parks and Selecta.
(14)
(7)
Foreign currency translation adjustments
8
15
Amortization
(430)
(393)
Impairments
(38)
(4)
Additions
Accumulated depreciation as of 1 January
(1)
1,832
(705)
Carrying amount as of 1 January
1,465
1,304
SOFTWARE
€ MN
Additions
622
279
Changes in the consolidated subsidiaries
of the Allianz Group
(197)
2015
2014
Disposals
(3)
(4)
Cost as of 1 January
6,360
Accumulated amortization as of 1 January
(4,218)
5,632
(3,800)
Foreign currency translation adjustments
5
(1)
Depreciation
(130)
(114)
Carrying amount as of 1 January
2,142
Impairments
Total
Insurance Western & Southern
Europe, Middle East and Africa
Insurance Iberia & Latin
America
66
7,564
16,291
30,031
Annual Report 2015 Allianz Group
187
Reserves for loss and loss adjustment expenses for the individual accident years at the respective reporting date (net)
1,850
RESERVES FOR LOSS AND LOSS ADJUSTMENT EXPENSES FOR THE INDIVIDUAL ACCIDENT YEARS AT THE RESPECTIVE REPORTING DATE (NET)
Accident year
as of 31 December
2006 & prior
Payable on demand
2008
2009
€ MN
1,054
775
476
1,517
211
303
465
729
1,169
1,890
7,009
15,410
28,702
2015
1,162
202
262
395
2010
2011
2012
2013
14,074
48,539
2010
19,089
3,911
5,666
7,456
14,729
50,850
2011
17,565
2,973
4,337
5,147
7,218
7,620
2014
5,038
2009
2014
2015
Total
2006
49,331
49,331
2007
34,665
14,012
48,677
2008
26,125
7,449
14,222
47,796
21,807
28,979
15,449
7,181
2013
2014
2015
Total
2006
24,002
24,002
2007
12,255
12,631
24,886
2008
5,608
6,397
13,130
2012
25,135
2011
2009
Prior years' net loss and loss adjustment expenses incurred reflect
the changes in estimation charged or credited to the consolidated
income statement in each year with respect to the reserves for loss
and loss adjustment expenses established as of the beginning of that
year. During the year ended 31 December 2015, the Allianz Group
recorded additional income of € 1,924 MN (2014: € 1,385 MN) net in
respect of losses occurring in prior years. During the year ended
31 December 2015, this amount, expressed as a percentage of the net
balance of the beginning of the year, was 3.5% (2014: 2.6%).
CHANGES IN HISTORICAL RESERVES
FOR LOSS AND LOSS ADJUSTMENT EXPENSES (LAE)
The analysis of loss and LAE reserves by actuaries and management
is conducted by line of business and separately for specific claim
types such as asbestos and environmental claims. The origin year of
losses is taken into consideration by analyzing each line of business
by accident year. While this determines the estimates of reserves for
loss and LAE by accident year, the effect in the consolidated income
statement in the respective calendar year combines the accident year
loss ratio for the current year with the favorable or adverse develop-
ment from prior years (run-off).
Although discounted loss reserves have been reclassified to
"Reserves for insurance and investment contracts" in the balance
sheet, the underlying business development of these non-life reserves
is still considered in the loss ratio. Therefore the tables below show
the loss development by accident year including the business devel-
opment of discounted loss reserves.
The run-off triangle, also known as the “loss triangle", is a tabular
representation of loss-related data (such as payments, loss reserves,
ultimate losses) in two, time-related dimensions. One of these is the
calendar year, while the other is the accident year (year of loss occur-
rence). Run-off triangles – as the basis for measuring loss reserves -
make clear how the loss reserves change over the course of time due
to payments made and new estimates of the expected ultimate loss
at the respective reporting date.
-
The run-off triangles are not prepared on a currency-adjusted
basis. This means all figures are translated from the respective local
currency into the Allianz Group presentation currency (Euro), con-
sistently using the exchange rates applicable at the respective report-
ing date. This ensures that the reserves reconcile with reserves in the
consolidated balance sheet.
Loss payments for the individual accident years (per calendar year, net)
LOSS PAYMENTS FOR THE INDIVIDUAL ACCIDENT YEARS (PER CALENDAR YEAR, NET)
€ MN
Accident year
Calendar year
2006 & prior
2007
2008
2010
15,596
2009
1,744
1,673
483
716
1,107
1,972
7,434
14,443
27,828
2013
1,615
323
497
712
1,113
2,090
2012
3,705
26,545
6,945
7,350
13,368
26,167
2010
2,591
934
2,151
6,688
14,094
26,459
2011
1,838
687
1,034
1,725
14,316
52,836
2012
17,416
26,718
27,962
29,029
28,863
29,407
2014
69,450
24,984
27,378
26,557
27,958
29,074
28,736
29,560
30,625
27,478
2015
25,153
2013
2011
67,565
25,367
28,002
26,928
28,257
29,912
2012
69,089
25,294
27,630
26,950
28,250
29,610
30,007
68,837
28,823
69,718
27,281
2015 to 2014²
(267)
9
97
78
89
136
295
163
146
746
1-Includes effects from foreign currency translation adjustments and other changes.
2- The total development 2015 to 2014 of € 746 MN represents the cumulative surplus from reestimating the
ultimate loss for prior year claims. Considering foreign currency translation adjustments of net € 1,272 MN
as well as changes in the consolidated subsidiaries of the Allianz Group and other changes of in total
€ (94) MN, this leads to an effective run-off result of net € 1,924 MN, which can be found in the table
"Change in the reserves for loss and loss adjustment expenses" within this note.
3-Presentation not meaningful.
188
Annual Report 2015 Allianz Group
Reduction/(increase)
24,975
9,968
10
26,478
27,869
28,938
28,442
29,397
30,479
32,649
Surplus¹
3,616
1,668
72
964
954
973
1,565
146
139 Consolidated Statements of Cash Flows
141 Notes
27,512
25,617
1,574
2,198
2,492
3,105
4,066
5,223
7,101
15,215
55,619
2015
13,751
1,362
1,838
2,018
2,540
14,646
3,156
2014
13,957
2,417
3,249
4,061
5,238
7,861
15,564
55,807
2013
15,550
1,953
2,601
3,117
3,837
5,190
7,239
53,445
28,297
3,874
7,504
73,333
2007
70,922
26,643
2008
67,990
26,477
27,353
2009
67,378
25,810
28,100
27,442
2010
67,250
2006
5,088
Total
2014
16,358
57,492
Ultimate loss for the individual accident years at the respective reporting date (net)
ULTIMATE LOSS FOR THE INDIVIDUAL ACCIDENT YEARS AT THE RESPECTIVE REPORTING DATE (NET)
€ MN
Accident year
as of 31 December
2006 & prior
2007
2008
2009
2010
2011
2012
2013
2015
138 Consolidated Statements of
Changes in Equity
2007
23,015
(13,292)
1,392
(14,684)
(13,740)
1,331
(15,071)
Prior years
(15,410)
703
(16,113)
(16,291)
832
Life/Health
(17,123)
Current year
Loss and loss adjustment expenses paid
28,878
(1,385)
367
(2,143)
31,021
30,721
(2,287)
33,008
Subtotal
(32,194)
2,163
(30,031)
332
(7,228)
61,169
As of 31 December
(3,882)
Ending balance of discounted loss reserves
55,619
(6,903)
62,522
57,492
(7,560)
65,051
(1,752)
(38)
(39)
1,999
(478)
2,477
1,221
(534)
1,755
Foreign currency translation adjustments and other changes¹
Changes in the consolidated subsidiaries of the Allianz Group
Subtotal
(28,702)
2,095
(30,797)
1
(1,924)
448
(2,373)
Net
Ceded
Gross
Net
Ceded
Gross
2014
2015
€ MN
CHANGE IN THE RESERVES FOR LOSS AND LOSS ADJUSTMENT EXPENSES IN THE PROPERTY-CASUALTY BUSINESS SEGMENT
The following table reconciles the beginning and ending reserves of
the Allianz Group, including the effect of reinsurance ceded, for the
Property-Casualty business segment for the years ended 31 Decem-
ber 2015 and 2014.
As of 1 January
AND LOSS ADJUSTMENT EXPENSES
Reserves for loss and loss adjustment expenses for the Property-
Casualty business segment are described in detail in the following
sections.
68,989
72,003
(18)
(23)
10,081
10,857
58,925
61,169
2014
2015
CHANGE IN RESERVES FOR LOSS
(3,550)
58,925
52,348
Subtotal
Prior years
30,263
(2,510)
32,773
32,646
(2,735)
35,381
Current year
Loss and loss adjustment expenses incurred
53,445
(6,577)
2,901
59,821
55,619
(6,903)
62,522
50,544
(6,070)
56,614
3,207
3,271
(326)
3,597
Balance carry forward of discounted loss reserves
Subtotal
(306)
(6,376)
(3,597)
326
(3,271)
3,801
4,929
8,730
4,278
4,191
8,469
Total
11,492
14,039
25,531
9,230
13,786
LIABILITIES TO BANKS AND CUSTOMERS BY CONTRACTUAL MATURITY
LIABILITIES TO BANKS AND CUSTOMERS BY CONTRACTUAL MATURITY
€ MN
as of 31 December 2015
Liabilities to banks
Liabilities to customers
Total
Annual Report 2015 Allianz Group
Up to 3 months
> 3 months up
to 1 year
> 1 year up to
3 years
Other
2,715
2,715
3,573
5,339
5,405
69
4,803
4,872
Savings deposits
2,410
2,410
2,846
2,846
Term deposits and certificates of deposit
> 3 years up to
1,129
2,490
971
1,946
2,916
Repurchase agreements
2,922
2,922
1,197
1,197
Collateral received from securities lending transactions and derivatives
3,573
1,361
Total
Greater than
5 years
and loss adjustment expenses
RESERVES FOR LOSS AND LOSS ADJUSTMENT EXPENSES
2015
2014
€ MN
17,071
16,595
as of 31 December
3,605
(15)
3,222
(17)
19 Reserves for loss
Property-Casualty
19,800
137 Consolidated Statements of
Comprehensive Income
135 Consolidated Balance Sheets
136 Consolidated Income Statements
D- Consolidated Financial Statements
Annual Report 2015 Allianz Group
186
1- Include effects of foreign currency translation adjustments for prior years' claims of gross € 1,423 MN
(2014: € 1,534 MN) and of net € 1,272 MN (2014: € 1,282 MN) and for current year claims of gross € (234) MN
(2014: € 165 MN) and of net € (195) MN (2014: € 130 MN).
52,348
(6,577)
58,925
53,942
20,660
Total
Consolidation
Life/Health
Total
6,979
10,865
1,623
971
484
1,435
11,492
501
1,523
426
724
14,039
Consolidation
17,844
2,124
2,494
910
2,159
25,531
185
18- Unearned premiums
UNEARNED PREMIUMS
€ MN
as of 31 December
Property-Casualty
5 years
Annual Report 2015 Allianz Group
10
Annual Report 2015 Allianz Group
During the 2015 fiscal year, the Supervisory Board fulfilled all its duties and obligations as laid
out in the company statutes and applicable law. It monitored the management of the company,
advised the Board of Management regarding the conduct of business and dealt with personnel
matters related to the Board of Management as well as to succession planning.
OVERVIEW
Within the framework of our activities, the Board of Management informed us on a regular
basis and in a timely and comprehensive manner, both verbally and in writing, on the course of
business as well as on the development of the Allianz Group and Allianz SE, including devia-
tions in actual business developments from the planning. The annual financial statements of
Allianz SE and the consolidated financial statements with its respective auditor's reports as
well as the half-yearly and quarterly financial reports were thoroughly examined by the Super-
visory Board and the Audit Committee.
12
122
Annual Report 2015 Allianz Group
A- To Our Investors
5 Letter to the Investors
12 Supervisory Board Report
19 Supervisory Board
20 Board of Management
23 Allianz Share
Further key areas the Board of Management reported on were the Renewal Agenda on busi-
ness strategy of the Board of Management, capital adequacy, the ongoing challenges facing
the life insurance business due to low interest rates, exceptional developments at certain
subsidiaries, and implementation of the German Act on Equal Participation of Women and
Men in Executive Positions. In addition, we were extensively involved in the Board of Manage-
ment's planning for both the 2016 fiscal year and the three-year period from 2016 to 2018.
In the 2015 fiscal year, the Supervisory Board held six meetings. The meetings took place in
February, March, May, August, October and December. The Board of Management's verbal
reports at the meetings were accompanied by written documents, which were sent to each
member of the Supervisory Board in time for the relevant meeting. The Board of Management
also informed us in writing of important events that occurred between meetings. The chair-
men of the Supervisory and Management Boards also had regular discussions about major
developments and decisions.
Details on each member's participation at meetings of the Supervisory Board and its commit-
tees can be found in the Corporate Governance Report, starting on > page 27. Members of
the Supervisory Board who were unable to attend meetings of the Supervisory Board or its
committees were excused and, as a rule, cast their votes in writing.
ISSUES DISCUSSED IN THE SUPERVISORY BOARD PLENARY SESSIONS
In all of the Supervisory Board's 2015 meetings, the Board of Management reported on Group
revenues and results by addressing the developments in individual business segments. Further-
more, we were regularly informed by the Board of Management about the capital, financial
and risk situation, the impact of natural catastrophes, the status of major legal disputes and
other essential developments.
In the meeting of 25 February 2015, the Supervisory Board dealt comprehensively with the
provisional financial figures for the 2014 fiscal year and the Board of Management's recom-
mended dividend. The appointed audit firm, KPMG AG Wirtschaftsprüfungsgesellschaft (KPMG),
Munich, reported in detail on the provisional results of their audit. Underwriting reserves
and IT systems were among the focal points of the audit. The Chief Compliance Officer then
provided the annual report on the compliance organization and key compliance-related
matters. During the further course of the meeting, the Supervisory Board also reviewed the
extent to which individual members of the Board of Management had achieved their targets
and set their variable remuneration for the 2014 fiscal year. We also verified the fitness and
propriety of the members of the Board of Management and the Supervisory Board.
Annual Report 2015 Allianz Group
13
In the meeting of 12 March 2015, the Supervisory Board discussed the audited annual Allianz se
and consolidated financial statements as well as the recommendation for the appropriation
of earnings by the Board of Management for the 2014 fiscal year. KPMG confirmed, that there
were no discrepancies to their February report and issued an unqualified auditor's report for
the individual and consolidated financial statements. In addition, the Board of Management
submitted its report on risk developments in 2014. The Supervisory Board also dealt with the
agenda for the 2015 Annual General Meeting (AGM) of Allianz SE and the respective proposals
for resolution. The Supervisory Board also resolved to appoint KPMG as auditor for the individual
and consolidated financial statements for the 2015 fiscal year and for the auditor's review of
the 2015 half-yearly interim report. In addition, the Supervisory Board was informed about the
developments in digitalization and the strategic importance of this topic.
On 6 May 2015, just before the AGM, the Board of Management briefed us on the first quarter
2015 performance and on the Allianz Group's current situation, particularly on the capitaliza-
tion, the share price development, and the impact of certain loss events.
In our meeting on 6 August 2015, the Board of Management reported in depth on the half-yearly
results and also dealt with the issuance of Allianz shares to employees of the Allianz Group
as well as the future Common European Sales Law. We then dealt extensively with the effects
of the low interest rate environment on the life insurance sector and, in particular, the mea-
sures adopted by Allianz. The Supervisory Board agreed to the early termination of Mr. Manuel
Bauer's appointment as a member of the Board of Management of Allianz SE with effect from
31 August 2015. In the course of the subsequent re-alignment of the schedule of responsibilities
of the Board of Management, it appointed Mr. Oliver Bäte as the member of the Board of Man-
agement responsible for “employment and social welfare". The Supervisory Board also elected
Mr. Jürgen Lawrenz to the Risk Committee as the successor of Mr. Franz Heiß, who stepped
down from the Supervisory Board, and dealt extensively with the matter of implementing the
German Act on Equal Participation of Women and Men in Executive Positions. The meeting
was preceded by a separate information session for members of the Supervisory Board, at which
Allianz managers gave presentations on current life insurance topics.
Ladies and Gentlemen,
The main focus of the meeting on 1 October 2015 was the future strategy of the Allianz Group.
Mr. Bäte and his colleagues from the Board of Management presented the Renewal Agenda
and initial implementation measures regarding the strategic topics True Customer Centricity,
Digital by Default, Technical Excellence, Growth Engines, and Inclusive Meritocracy. The
Supervisory Board discussed in detail the key points and further steps toward implementing
the new strategic initiatives.
Supervisory Board Report
11
10
فا می كنفه
Bée
Sincerely yours,
I would like to thank you for your support and the trust you have placed in us and would
be delighted if you remain a part of Allianz in the future.
It is clear to the employees of Allianz that both the future success of our company and
your success as an investor depend, directly and entirely, on our ability to understand our
customers and to tailor our products and services even more consistently to their require-
ments - or in other words, to provide simple, modern, and outstanding service quality at
all times.
Renewal Agenda in our operating businesses and to take concrete steps towards becoming
an Allianz that is consistently customer-focused and digital throughout its business.
I am encouraged by the strengths of our business, by the solidarity of our management,
and by our employees, who know what is at stake.
9
Annual Report 2015 Allianz Group
Although the operating environment poses growing risks and macroeconomic forces
are unlikely to lead to an additional surge in growth, we will do everything we can to make
2016 another successful year for Allianz. 2016 will test our ability to implement the
Allianz will become even more flexible and focused on its customers. At the same time,
our intrinsic values will remain the same as in the past 125 years: integrity, competence,
and resilience. We will not follow every trend that comes along. But if and when funda-
mental opportunities emerge we will take the lead in our industry and carry out any
changes required. This includes our decision to gradually adapt our investment policy to
sustainable investment criteria and stop financing the coal industry.
It is also essential that we exercise discipline when allocating capital. Business segments
that do not have market leadership are at a competitive disadvantage. We cannot afford
to tie up valuable capital and personnel that offer greater earnings potential when re-
deployed to businesses with higher margins and stronger growth. With this in mind, we
will carefully reshape our portfolio with sound judgement to create even more leading
and superior business units. Smaller, highly profitable companies will benefit from the
advantages of using common regional platforms.
As the Board of Management of Allianz, it is particularly important to us that the orga-
nization develops a clearer market orientation. If we want to grow in the digital era, we
will have to pay closer attention to our customers and our competition in the future.
This includes competitors that have not been the primary focus of our benchmarking in
the past.
I feel particularly encouraged by the exciting and innovative initiatives that are being
developed and launched in our strategic project groups covering these five fields of
action. We have brought together a large number of enthusiastic colleagues from all
continents who know what needs to be done and how important their mission is. They
are already working hard to implement our plans in the operating businesses.
Brand Finance brand value ranking. We must now use our existing strengths to become
even stronger, so we can consistently make the most of the opportunities presented
by change. But we can only continue to be resilient if we constantly adapt to our environ-
ment. We believe we have set ourselves the right priorities to achieve this with our
Renewal Agenda program.
23 Allianz Share
20 Board of Management
5 Letter to the Investors
12 Supervisory Board Report
19 Supervisory Board
A- To Our Investors
A To Our Investors
20 Board of Management
23 Allianz Share
Annual Report 2015 - Allianz Group
14
5 Letter to the Investors
12 Supervisory Board Report
19 Supervisory Board
A- To Our Investors
Standing Committee: Dr. Helmut Perlet (Chairman), Dr. Wulf H. Bernotat,
Prof. Dr. Renate Köcher, Gabriele Burkhardt-Berg, Rolf Zimmermann
Personnel Committee: Dr. Helmut Perlet (Chairman), Christine Bosse, Rolf Zimmermann
Audit Committee: Dr. Wulf H. Bernotat (Chairman), Dr. Helmut Perlet, Jim Hagemann Snabe,
Jean-Jacques Cette, Ira Gloe-Semler
Risk Committee: Dr. Helmut Perlet (Chairman), Christine Bosse, Peter Denis Sutherland,
Dante Barban, Jürgen Lawrenz
Nomination Committee: Dr. Helmut Perlet (Chairman), Prof. Dr. Renate Köcher,
Peter Denis Sutherland
AUDIT OF ANNUAL ACCOUNTS AND CONSOLIDATED FINANCIAL STATEMENTS
In compliance with the special legal provisions applying to insurance companies, the statutory
auditor and the auditor for the review of the half-yearly financial report are appointed by the
Supervisory Board of Allianz SE and not by the AGM. The Supervisory Board has appointed KPMG
as statutory auditor for the annual Allianz SE and consolidated financial statements, as well
as for the review of the half-yearly financial report of the fiscal year 2015. KPMG audited the
financial statements of Allianz SE and the Allianz Group as well as the respective management
reports. They issued an auditor's report without any reservations. The consolidated financial
statements were prepared on the basis of the international financial reporting standards (IFRS),
as adopted in the European Union. KPMG performed a review of the half-yearly and quarterly
financial reports.
All Supervisory Board members received the documentation relating to the annual financial
statements and the auditor's reports from KPMG on schedule. The provisional financial state-
ments and KPMG's audit results were discussed in the Audit Committee on 17 February 2016
and in the plenary session of the Supervisory Board on 18 February 2016. The final financial
statements and KPMG's audit reports were reviewed on 10 March 2016 by the Audit Committee
and in the Supervisory Board plenary session. The auditors participated in these discussions
and presented the main results from the audit. No material weaknesses in the internal financial
reporting control process were discovered. There were no circumstances that might give
cause for concern about the auditor's independence.
Annual Report 2015 Allianz Group
On the basis of our own reviews of the annual Allianz SE and consolidated financial state-
ments, the management and group management reports and the recommendation for appro-
priation of earnings, we raised no objections and agreed with the results of the KPMG audit.
We approved the Allianz SE and consolidated financial statements prepared by the Board of
Management. The company's financial statements are therefore adopted. We agree with the
Board of Management's proposal on the appropriation of earnings.
The Supervisory Board would like to thank all Allianz Group employees for their great personal
commitment over the past year.
MEMBERS OF THE SUPERVISORY BOARD AND BOARD OF MANAGEMENT
Mr. Franz Heiß retired on 31 July 2015 and thus stepped down from his position as employee
representative on the Supervisory Board of Allianz SE. The Supervisory Board thanked Mr. Heiß
and expressed its appreciation of his efforts during his period of office. Mr. Jürgen Lawrenz
replaced Mr. Heiß as elected employee representative on the Supervisory Board of Allianz SE
with effect from 1 August 2015. The current term of the Supervisory Board will expire following
the 2017 AGM.
The fiscal year 2015 also saw personnel changes within Allianz SE's Board of Management.
Mr. Michael Diekmann left the Board of Management with effect from 6 May 2015. Mr. Oliver
Bäte took over as Chairman of the Board of Management with effect from 7 May 2015.
Mr. Manuel Bauer left the Board of Management with effect from 31 August 2015 and his areas
of responsibility were allocated to other Board departments.
Munich, 10 March 2016
For the Supervisory Board:
Ден
Dr. Helmut Perlet
Chairman
18
Annual Report 2015 Allianz Group
Deputy Chairmen: Dr. Wulf H. Bernotat, Rolf Zimmermann
Chairman of the Supervisory Board: Dr. Helmut Perlet
17
The Supervisory Board was regularly and comprehensively informed of the committees' work.
5 Letter to the Investors
12 Supervisory Board Report
19 Supervisory Board
Chair and committees of the Supervisory Board – as of 31 December 2015
20 Board of Management
23 Allianz Share
At the 10 December 2015 meeting, the Board of Management provided us with information
about the third-quarter results and further business developments as well as on further
specifics of the Renewal Agenda. We also discussed the planning for the 2016 fiscal year and
the 2016–2018 three-year period, the remuneration system within the Allianz Group and
the Declaration of Conformity with the German Corporate Governance Code. The Supervisory
Board reviewed the appropriateness of the remuneration of the Board of Management and
adopted a resolution, on the recommendation of the Personnel Committee, to adjust the con-
tributions to the pension plan. In addition, the Supervisory Board set targets for the variable
remuneration of members of the Board of Management and discussed succession planning
with regard to the Board of Management. Finally, we took a detailed look at the results of the
Supervisory Board's efficiency review and adopted a 15-year limit to the term of membership
on the Supervisory Board.
DECLARATION OF CONFORMITY WITH THE GERMAN CORPORATE GOVERNANCE CODE
On 10 December 2015, the Board of Management and the Supervisory Board issued the Decla-
ration of Conformity in accordance with § 161 of the German Stock Corporation Act (“Aktien-
gesetz"). The Declaration was posted on the company website, where it is available to
shareholders at all times. Allianz SE fully complies and will continue to fully comply with the
recommendations of the German Corporate Governance Code made in the Code's version of
5 May 2015.
Further explanations of corporate governance in the Allianz Group can be found in the
Corporate Governance Report starting :: :: :D:D:D:D:D:D: age 27 and the Statement on Corporate Manage-
ment pursuant to § 289a HGB starting on > page 32. More information on corporate gover-
nance can also be found on the Allianz website at > www.allianz.com/corporate-governance.
The Supervisory Board has formed various committees in order to perform its duties efficiently:
the Standing Committee, the Personnel Committee, the Audit Committee, the Risk Committee
and the Nomination Committee. The committees prepare the discussion and adoption of
resolutions in the plenary sessions. Furthermore, in appropriate cases, the authority to adopt
resolutions has been delegated to the committees. There is no Conciliation Committee
because the German Co-Determination Act ("Mitbestimmungsgesetz"), which provides for
such a committee, does not apply to Allianz SE as a European Company (SE).
The Standing Committee held three meetings in 2015. These related primarily to corporate
governance issues, the preparation for the AGM, the matter of implementing the German Act
on Equal Participation of Women and Men in Executive Positions, and the internal review of
the Supervisory Board's efficiency. During the fiscal year the committee passed resolutions to
approve loans to senior executives.
Annual Report 2015 Allianz Group
15
COMMITTEE ACTIVITIES
The Personnel Committee held four regular meetings and two extraordinary meetings by tele-
phone conference in the 2015 financial year. Areas of focus were the re-alignment of the
schedule of responsibilities of the Board of Management following the departure of Mr. Bauer,
and further succession planning. The committee also dealt with other mandate matters for
active and former members of the Board of Management and with the proportion of women
on Allianz SE's Board of Management. In addition to preparing the target achievement of
Board of Management members for the 2014 fiscal year, the committee prepared the review of
the remuneration system, and the setting of targets for variable remuneration.
The Audit Committee held five meetings in 2015. In the presence of the auditor, it discussed the
annual financial statements of Allianz SE and the consolidated financial statements of the
Allianz Group, the management reports and auditor's reports, as well as the half-yearly and
quarterly financial reports. After carrying out these reviews, the Audit Committee saw no
objections. The committee also dealt with the auditor's engagement, established priorities for
the annual audit in the fiscal year 2015, and discussed assignments to the auditors for services
not connected to the audit itself. In addition, the committee dealt extensively with the com-
pliance system, the internal auditing system as well as the accounting process and internal
financial reporting control mechanisms. The committee received regular reports on the audit
department's work and on legal and compliance issues. Furthermore, in a presentation on
cyber-security, the committee was informed about the measures to protect Allianz's IT systems,
and it also familiarized itself with the implementation status of the governance requirements
according to Solvency II.
The Risk Committee held two meetings in 2015, at which it discussed the current risk situation
of the Allianz Group with the Board of Management. The risk report and other risk-related
statements in the annual Allianz SE and consolidated financial statements, as well as in man-
agement and group management reports, were reviewed with the auditor and the Audit
Committee was informed of the result. The appropriateness of the early risk recognition system
at Allianz was also discussed. The committee looked in detail at the effectiveness of the risk
management system, in particular behavioral risk in property insurance. Other matters con-
sidered were the new supervisory regime according to Solvency II, the risk strategy of Allianz SE
and of the Allianz Group, a MaRisk (Minimum Requirements for Risk Management) audit,
the effects of the enduring low interest rate environment, and the Allianz SE's classification as
a Global Systemically Important Insurer (G-SII).
In November 2015, the Nomination Committee held a meeting by telephone conference to
discuss the vacant position on the Supervisory Board that will materialise at the end of the
AGM on 4 May 2016.
16
Annual Report 2015 Allianz Group
A- To Our Investors
5 Letter to the Investors
12 Supervisory Board Report
19 Supervisory Board
20 Board of Management
23 Allianz Share
All other subsidiaries
Subordinated liabilities
Fixed rate
Contractual interest rate
Hybrid equity
Total all other subsidiaries
Current interest rate
Contractual maturity date
15
Total
83
Floating rate
15
2016
83
4.27%
5.61%
Contractual interest rate
15
Fixed rate
Subordinated bonds
Banking subsidiaries
2017
Total Allianz SE²
Current interest rate
2018
Floating rate
Total banking subsidiaries
as of
103
3.89%
31 December
Contractual interest rate
30
20
221
251
5.32%
4.35%
30
20
11,371
11,962
11,962
as of
4.47%
10,246
10,246
5.44%
1,621
1,716
1,716
2014
2015
Thereafter
2020
2019
31 December
9,750
Fixed rate
1,486
Allianz SE²
Contractual interest rate
42
80
Fixed rate
Senior bonds
Banking subsidiaries
2,774
Total Allianz SE²
0.40%
Contractual interest rate
1,276
Fixed rate
1.44%
Money market securities
1.38%
103
499
4.00%
1,498
Fixed rate
Senior bonds
7,694
7,987
3,227
1,486
499
4.75%
0.92%
Floating rate
Current interest rate
€ MN¹
SUBORDINATED LIABILITIES
24-Subordinated liabilities
195
Annual Report 2015 Allianz Group
issued by Allianz Finance Corporation, a wholly owned subsidiary of Allianz SE, which are fully and uncon-
ditionally guaranteed by Allianz SE.
8,207
8,383
513
395
3,501
274
0.17%
327
274
274
186
122
2- Includes senior bonds issued by Allianz Finance II B.V., guaranteed by Allianz SE and money market securities
1- Except for interest rates. Interest rates represent the weighted average.
1,486
499
42
42
80
2,854
Total
Total banking subsidiaries
Subordinated bonds³
251
196
83
NON-CONTROLLING INTERESTS
197
Annual Report 2015 Allianz Group
The own shares of Allianz SE and its subsidiaries represent
€ 6 MN or 0.48% of the share capital.
In the year ending 31 December 2015, 575,584 (2014: 510,435)
shares were sold in the context of the Employee Stock Purchase Plan
to employees of Allianz SE and its subsidiaries in Germany and
abroad. Of these, 145,191 (2014: 155,626) originated from the capital
increase for the Employee Stock Purchase Plan in 2014 (2013). 430,393
shares were taken from the stock of own shares dedicated to this pur-
pose. This is in contrast to 2014, when no own shares had been taken
from the stock of own shares. Employees of the Allianz Group pur-
chased shares at prices ranging from € 98.42 (2014: € 93.52) to € 125.84
(2014: € 111.33) per share. At 31 December 2015, no own shares were
held anymore which derived from a capital increase for the purposes
of Employee Stock Purchase Plans. As of 31 December 2015, the
remaining own shares of Allianz Se held for covering subscriptions by
employees in the context of Employee Stock Purchase Plan of
Allianz SE and its subsidiaries in Germany and abroad amounted to
1,522,732 shares. In the year ending 31 December 2015, the total num-
ber of own shares of Allianz SE decreased by 575,584 (2014: decrease
of 10,435) shares, which corresponds to € 1,473,495 (2014: € 26,714) or
0.126% (2014: 0.002%) of issued capital.
In March 2015, a total of 1,953,125 own shares were rededicated
to the new purpose of "covering subscriptions by employees in the
context of Employee Stock Purchase Plans of Allianz SE and its sub-
sidiaries in Germany and abroad". Previously, these shares served as
a hedge for obligations resulting from the Allianz Equity Incentive
Program and had been bought on the basis of former authorizations
in accordance with § 71 (1) No. 8 AktG.
As of 31 December 2015, Allianz SE held 2,175,776 (2014: 2,751,360) own
shares. Of these, 1,522,732 (2014: 145,191) were held for covering future
subscriptions by employees in Germany and abroad in the context of
Employee Stock Purchase Plans, whereas 653,044 (2014: 2,606,169)
were held as a hedge for obligations from the Allianz Equity Incentive
Program (former Group Equity Incentive Program).
TREASURY SHARES
For the year ending 31 December 2015, the Board of Management will
propose to shareholders at the AGM the distribution of a dividend of
€ 7.30 per qualifying share. For the year ended 31 December 2014,
Allianz SE paid a dividend of € 6.85 per qualifying share.
DIVIDENDS
In the
year ending 31 December 2015, no new shares (2014: 500,000)
were issued out of the Authorized Capital 2014/11 for the purpose of
covering subscriptions by employees in the context of Employee
Stock Purchase Plans. In lieu thereof, the shares for covering sub-
scriptions of the Employee Stock Purchase Plans in 2015 were taken
from the stock of own shares specially earmarked for this purpose.
The Authorized Capital remained unchanged during the year ending
31 December 2015.
454,248,039
2,751,961
457,000,000
NON-CONTROLLING INTERESTS
453,736,619
500,000
11,420
2,176,362
457,000,000
454,823,638
575,599
1- Thereof 2,175,776 (2014: 2,751,360) own shares held by Allianz SE.
Total number of issued shares
Treasury shares¹
as of 31 December
Number of issued shares outstanding
Changes in number of treasury shares
Capital increase for employee share programs
454,248,039
Number of issued shares outstanding
as of 1 January
2014
2015
€ MN
189
2- From a formalistic perspective, the German Supervisory Authority deems the model to be 'partial' because
it does not cover all of the operations: some of the smaller operations report under the standard model
and others under the deduction & aggregation approach.
1- Off-balance sheet reserves are accepted by the authorities as eligible capital only upon request. Allianz SE
has not submitted an application so far. Excluding off-balance sheet reserves, the reported solvency ratio
as of 31 December 2015 would be 191 % (31 December 2014: 172%).
Annual Report 2015 Allianz Group
198
Some insurance subsidiaries are subject to regulatory restric-
tions on the amount of dividends which can be remitted to Allianz SE
without prior approval by the appropriate regulatory body. Such
restrictions require that a company may only pay dividends up to an
amount in excess of certain regulatory capital levels, or based on the
levels of undistributed earned surplus or current year income or a
percentage thereof. By way of example only, the operations of the
Allianz Group's insurance subsidiaries located in the United States
are subject to limitations on the payment of dividends to their parent
company under applicable state insurance laws. Dividends paid in
excess of these limitations generally require the prior approval of the
insurance commissioner of the state of domicile. The Allianz Group
believes that these restrictions will not affect the ability of Allianz SE
to pay dividends to its shareholders in the future.
As of 31 December 2015, the Allianz Group believes that there are
no outstanding regulatory capital or compliance matters that would
have a material adverse effect on the financial position or the results
of operations of the Allianz Group.
Insurance subsidiaries of the Allianz Group including Allianz SE
prepare individual financial statements based on local laws and
regulations. Local regulations establish additional restrictions on the
minimum level of capital and the amount of dividends that may be
paid to shareholders. The respective local minimum capital require-
ments are based on various criteria including, but not limited to, the
volume of premiums written or claims paid, amount of insurance
reserves, investment risks, mortality risks, credit risks, and under-
writing risks.
In addition to regulatory capital requirements, Allianz SE also
uses an internal risk capital framework based on its partial internal
model² to determine how much capital is required to absorb any
unexpected volatility in results of operations and to steer its opera-
tions. This partial internal model was approved by the European col-
lege of supervisors in November 2015 and will therefore be the basis to
determine capital requirements under the new Solvency II framework,
which has become the binding regulatory regime as of 1 January 2016.
As of 31 December 2015, the Allianz Group's eligible capital for
the solvency margin, required for the insurance segments and the
Asset Management and Banking business, was € 58.0 BN (2014:
€ 49.8 BN) including off-balance sheet reserves¹ of € 2.7 BN (2014:
€ 2.3 BN), surpassing the minimum legally stipulated level by € 29.0 BN
(2014: € 22.2 BN). This margin resulted in a preliminary cover ratio of
200% (2014: 181%) as of 31 December 2015.
On 1 January 2005, the Financial Conglomerates Directive (FCD),
a supplementary European Union (E.U.) directive, became effective in
Germany. Under this directive, a financial conglomerate is defined as
any financial parent holding company that, together with its subsid-
iaries, has significant cross-border and cross-sector activities. The
Allianz Group is a financial conglomerate within the scope of the
directive and the related German laws. The directive requires that the
financial conglomerate calculates the capital needed to meet the
respective solvency requirement on a consolidated basis.
The Allianz Group's capital requirements are primarily dependent on
the type of business that it underwrites, the industry and geographic
locations in which it operates and the allocation of the Allianz
Group's investments. During the Allianz Group's annual planning
dialogues with its operating entities, internal capital requirements
are determined through business plans regarding the levels and tim-
ing of capital expenditures and investments. Internal capital require-
ments are determined by explicitly taking stress resilience into
account. Regulators impose minimum capital requirements at the
level of the Allianz Group's operating entities and the Allianz Group
as a whole.
CAPITAL REQUIREMENTS
2014
The share of earnings attributable to non-controlling interests main-
ly consists of Euler Hermes Group companies of € 93 MN (2014:
€ 92 MN), PIMCO of € 71 MN (2014: € 86 MN), CreditRas Vita of € 35 MN
(2014: € 27 MN), Allianz Ayudhya of € 35 MN (2014: € 28 MN) and Allianz
p.l.c. of € 15 MN (2014: € 27 MN). The other equity components of non-
controlling interests mainly consist of Euler Hermes Group compa-
nies of € 744 MN (2014: € 688 MN), PIMCO of € 89 MN (2014: € 235 MN),
CreditRas Vita of € 295 MN (2014: € 269 MN), Allianz Ayudhya of € 139 MN
(2014: € 141 MN) and Allianz p.l.c. of € 105 MN (2014: € 82 MN). Further
information about companies with non-controlling interests are
given in the list of participations of the Allianz Group.
2,955
Total
2,385
2,422
Other equity components
381
371
Share of earnings
162
Unrealized gains and losses (net)
2015
as of 31 December
2,955
NUMBER OF ISSUED SHARES OUTSTANDING
OF ISSUED SHARES OUTSTANDING
CHANGES IN THE NUMBER
1,170
27,758
27,758
Additional paid-in capital
1,170
Issued capital
Shareholders' equity
2014
2015
as of 31 December
€ MN
EQUITY
25-Equity
Retained earnings¹
3- Change due to redemption of a € 1.0 BN bond and the issuance of a € 1.5 BN bond in the first quarter of 2015.
445
12,258
45
45
12,110
45
45
45
1.45%
400
30
2- Includes subordinated bonds issued by Allianz Finance II B.V. and guaranteed by Allianz SE.
1 - Except for interest rates. Interest rates represent the weighted average.
20
12,037
24,222
Foreign currency translation adjustments
(926)
Convertible subordinated notes totaling € 500 MN, which may be
converted into Allianz shares, were issued against cash in July 2011.
Within 10 years after the issuance a mandatory conversion of the
notes into Allianz shares at the then prevailing share price may apply
if certain events occur, subject to a floor price of at least € 74.90 per
share. Within the same period, the investors have the right to convert
the notes into Allianz shares at a price of € 187.26 per share. Both con-
version prices are subject to anti-dilution provisions. The subscrip-
tion rights of shareholders for these convertible notes have been
excluded with the consent of the Supervisory Board and pursuant to
the authorization of the AGM on 5 May 2010. The granting of new
shares to persons entitled under such convertible notes is secured by
the Conditional Capital 2010/2014. On or before 31 December 2015,
there was no conversion of any such notes into new shares.
Further, as of 31 December 2015, Allianz SE had conditional cap-
ital totaling € 250 MN (97,656,250 shares) (Conditional Capital
2010/2014). This conditional capital increase will only be carried out
if conversion or option rights attached to bonds which Allianz SE or
its Group companies have issued against cash payments according
to the resolutions of the AGM on 5 May 2010 or 7 May 2014, are exer-
cised or the conversion obligations under such bonds are fulfilled,
and only insofar as the conversion or option rights or conversion obli-
gations are not serviced through treasury shares or through shares
from authorized capital.
In addition, Allianz SE has authorized capital (Authorized Capi-
tal 2014/11) for the issuance of shares against cash until 6 May 2019.
The shareholders' subscription rights can be excluded in order to
issue new shares to employees of Allianz SE and its Group companies.
As of 31 December 2015, the Authorized Capital 2014/II amounted to
€ 14 MN (5,359,375 shares).
shares from the Authorized Capital 2014/1 and the Conditional Capi-
tal 2010/2014 may only be excluded for the proportionate amount of
the share capital of up to € 234 MN (corresponding to 20% of the share
capital at year-end 2013).
139 Consolidated Statements of Cash Flows
141 Notes
138 Consolidated Statements of
Changes in Equity
137 Consolidated Statements of
Comprehensive Income
135 Consolidated Balance Sheets
136 Consolidated Income Statements
D- Consolidated Financial Statements
Annual Report 2015 Allianz Group
1,041
As of 31 December 2015, Allianz SE had authorized capital for the issu-
ance of 214,843,750 shares until 6 May 2019, with a notional amount of
€ 550 MN (Authorized Capital 2014/1). The shareholders' subscription
rights can be excluded for capital increases against contribution in
kind. For a capital increase against contributions in cash, the share-
holders' subscription rights can be excluded: (i) for fractional
amounts, (ii) if the issue price is not significantly below the market
price and the shares issued under exclusion of the subscription
rights pursuant to § 186 (3) sentence 4 of the German Stock Corpora-
tion Act (Aktiengesetz) do not exceed 10% of the share capital, and
(iii) to the extent necessary to grant a subscription right for new
shares to the holders of bonds that carry conversion or option rights
or provide for mandatory conversion. The subscription rights for new
AUTHORIZED CAPITAL
Issued capital as of 31 December 2015 amounted to € 1,170 MN divided
into 457,000,000 registered shares. The shares have no-par value but
a mathematical per-share value of € 2.56 each as a proportion of the
issued capital.
ISSUED CAPITAL
63,702
1- As of 31 December 2015, include € (159) MN (2014: € (222) MN) related to treasury shares.
2-As of 31 December 2015, include € 239 MN (2014: € 288 MN) related to cash flow hedges.
66,099
Total
2,955
2,955
Non-controlling interests
19,878
(1,977)
13,917
60,747
63,144
Subtotal
10,920
Unrealized gains and losses (net)2
221
1,276
Contractual interest rate
6,653
(8,629)
Changes due to fluctuations in market value
Changes due to valuation differences charged
211
Foreign currency translation adjustments
24,541
48,006
Latent reserves for premium refunds
As of 1 January
51
21,338
15,020
As of 31 December
1,797
351
Changes
(1)
Changes in the consolidated subsidiaries
of the Allianz Group
29
15,400
13,231
to income
2,077
As of 31 December 2015 and 2014, the Allianz Group's deferred
acquisition costs and reserves for insurance and investment contracts
for the business segment Life/Health are summarized per reportable
segment as follows:
life, endowment, annuity and health contracts. Traditional annuity
contracts are issued in both deferred and immediate types. In addi-
tion, the Allianz Group's life insurance operations in the United
States issue a significant amount of equity-indexed deferred annui-
ties. In certain markets, the Allianz Group also issues group life,
group health and group pension contracts.
The Allianz Group's Life/Health business segment provides a wide
variety of insurance and investment contracts to individuals and
groups in over 30 countries around the world. Individual contracts
include both traditional contracts and unit-linked contracts. Without
taking policyholder participation into account, traditional contracts
generally incorporate significant investment risk for the Allianz
Group, while unit-linked contracts generally result in the contract
holder assuming the investment risk. Traditional contracts include
CONCENTRATION OF INSURANCE RISK
IN THE LIFE/HEALTH BUSINESS SEGMENT
139 Consolidated Statements of Cash Flows
141 Notes
138 Consolidated Statements of
Changes in Equity
137 Consolidated Statements of
Comprehensive Income
4,743
136 Consolidated Income Statements
D- Consolidated Financial Statements
63,026
59,732
Total
48,006
44,332
As of 31 December
135 Consolidated Balance Sheets
CONCENTRATION OF INSURANCE RISK IN THE LIFE/HEALTH BUSINESS SEGMENT PER REPORTABLE SEGMENT
15,020
2015
3,882
Ending balance of discounted loss reserves
2014
2015
395,630
421,430
Subtotal
3,597
1,302
Other changes¹
as of 31 December
€ MN
RESERVES FOR INSURANCE AND INVESTMENT CONTRACTS
(52)
(270)
Portfolio acquisitions and disposals
1,108
2014
Aggregate policy reserves
Other insurance reserves
Foreign currency translation adjustments
As of 1 January
Amounts already allocated under local statutory
or contractual regulations
€ MN
RESERVES FOR PREMIUM REFUNDS
RESERVES FOR PREMIUM REFUNDS
Annual Report 2015 Allianz Group
Reserves for premium refunds
190
399,227
425,312
As of 31 December
399,227
63,026
1,081
463,334
486,222
425,312
59,732
1,178
Total
1 - Mainly relate to insurance contracts when policyholders change their contract from a unit-linked to a
universal life-type contract.
€ MN
as of 31 December
Deferred
acquisition
412,961
20,587
Total
(3,625)
(3,626)
(5)
(3,619)
57,966
Consolidation
10,568
18,864
557
516
17,792
2,099
Asia Pacific
29,432
1,947
1,083
105,873
245,974
111,213
9,294
1,449
7,845
56
Iberia & Latin America
241
12,435
472,010
98,536
230
46,879
198,865
8,754
German Speaking Countries and Central & Eastern Europe
Western & Southern Europe, Middle East, Africa, India
2014
577,883
2,377
1,947
6
1,941
45,618
208,667
9,053
German Speaking Countries and Central & Eastern Europe
Western & Southern Europe, Middle East, Africa, India
Iberia & Latin America
2015
Total
Liabilities for
unit-linked
contracts
267
reserves
Other
insurance non-unit-linked
reserves
refunds
reserves
costs
Reserves for
premium
policy
Aggregate
Total
254,552
2,229
99,570
120
Global Insurance Lines & Anglo Markets
170,233
9,813
106,505
25,999
80,506
80,506
7,032
USA
454
263,577
9,025
59,826
110,407
9,359
1,255
8,104
54
258
10,579
(1,628)
8,199
(1,652)
(13,711)
71.2
73.3
65.8
39,898
2011
73.3
72.7
71.9
74.1
39,303
2010
72.5
73.5
66.9
37,828
2009
66.4
71.6
75.0
41,705
2014
69.9
69.2
72.8
71.1
70.6
71.9
2012
65.2
2013
72.0
74.2
71.9
71.2
72.3
65.6
42,047
43,759
68.7
2008
2008
2007
Accident year
Premiums
earned
(net)
as of 31 December
CALENDAR YEAR PREMIUMS EARNED AND ULTIMATE LOSS RATIO FOR THE INDIVIDUAL ACCIDENT YEARS AT THE RESPECTIVE REPORTING DATE (NET)
for the individual accident years at the respective reporting date (net)
2009
Calendar year premiums earned and ultimate loss ratio
Changes in Equity
138 Consolidated Statements of
137 Consolidated Statements of
Comprehensive Income
136 Consolidated Income Statements
135 Consolidated Balance Sheets
D- Consolidated Financial Statements
3.70%
139 Consolidated Statements of Cash Flows
141 Notes
38,213
2010
2012
69.1
38,553
2007
%
%
%
%
2011
%
%
%
%
€ MN
2015
2014
2013
%
64.8
71.6
70.2
4.5%
4.5%
Property-Casualty gross reserves
9,600
9,358
Foreign currency translation adjustments
As percentage of the Allianz Group's
Changes recorded in the consolidated income
395,631
2,679
2,763
A & E gross reserves
(3,207)
(3,597)
Balance carry forward of discounted loss reserves
2,173
Subtotal
2,178
statement
3,514
(16,145)
Releases upon death, surrender and withdrawal
1,356
1,368
Dividends allocated to policyholders
3,879
5,319
2,546
Interest credited
20 Reserves for insurance
972
90
Separation of embedded derivatives
28,085
24,076
Premiums collected
and investment contracts
A & E net reserves
365,519
399,227
70.3
69.7
69.9
68.2
72.5
70.9
70.0
The ultimate loss of an accident year comprises all payments made
for that accident year up to the reporting date, plus the loss reserve at
the reporting date. Given complete information regarding all losses
incurred up to the reporting date, the ultimate loss for each accident-
year period would remain unchanged. In practice, however, the ulti-
mate loss (based on estimates) is exposed to fluctuations that reflect
the increase in knowledge regarding the loss cases. The loss ratio
presented above deviates from the reported loss ratio because the
ultimate loss in the table above is based on the sum of the payments
plus the loss reserve, not the incurred loss from the consolidated
income statement. This means that effects like changes in consoli-
dated subsidiaries, foreign currency translation and reclassification
of unwinding of discounted loss reserves are presented differently.
71.4
46,430
2015
70.0
70.3
68.9
72.9
71.1
64.8
CONTRACTUAL CASH FLOWS
As of 31 December 2015, reserves for loss and loss adjustment expens-
es, which are expected to be due in 2016 amounted to € 16,884 MN,
while those expected to be due between 2017 and 2020 amounted to
€ 20,725 MN and those expected to be due after 2020 amounted to
€ 19,883 MN.
ASBESTOS AND ENVIRONMENTAL (A & E) LOSS RESERVES
There are significant uncertainties in estimating A&E reserves for
loss and LAE. Reserves for asbestos-related illnesses and environmen-
tal clean-up losses cannot be estimated using traditional actuarial
techniques due to the long latency period and changes in the legal,
socio-economic and regulatory environment.
As of 1 January
2014
2015
as of 31 December
€ MN
2014
2015
€ MN
CHANGES IN AGGREGATE POLICY RESERVES
GROSS AND NET RESERVES FOR LOSS AND LAE FOR A & E CLAIMS
AGGREGATE POLICY RESERVES
The following table summarizes the gross and net loss and LAE
reserves for A & E claims.
189
Annual Report 2015 Allianz Group
While the U.S. A&E claims still represent a majority of the total
A&E claims reported to the Allianz Group, the insurance industry is
facing an increased prominence in exposures to A&E claims on a
global basis. The Allianz Group continues to monitor these A & E expo-
sures. During 2015, A&E gross reserves increased from € 2,679 MN to
€2,763 MN due to claims development and foreign exchange rate
effects of € 249 MN, partially offset by claim payments of € 166 MN.
In establishing liabilities for A & E claims, management considers
facts currently known and the current state of the law and coverage
litigation. However, given the expansion of coverage and liability by
the courts and the legislatures in the past and the possibilities of
similar interpretation in the future, there is significant uncertainty
regarding the extent of insurer liability. As a result, the range of rea-
sonable potential outcomes for A&E liabilities provided in these
analyses is particularly large. Given this inherent uncertainty in esti-
mating A & E liabilities, significant deviation from the currently car-
ried A & E reserve position is possible.
Case reserves are established when sufficient information is
available to indicate the involvement of a specific insurance policy. In
addition, IBNR reserves are established to cover additional exposures
on both known and not yet reported claims. To the extent possible,
A&E loss reserve estimates are based not only on claims reported to
date, but also on a survey of policies that may be exposed to claims
reported in the future (i.e. an exposure analysis).
Policyholder charges
254,174
362,312
162,862
1,413
Reinsurance
4,934
5,006
2014
2015
Policyholders
1,460
Payables
€ MN
OTHER LIABILITIES
22 Other liabilities
193
Annual Report 2015 Allianz Group
1-These reclassifications mainly relate to insurance contracts when policyholders change their contract
from a unit-linked to a universal life-type contract.
As of 31 December
as of 31 December
94,564
Agents
1,615
3,187
3,181
Subtotal
1,387
1,450
Other taxes
1,801
1,625
1,732
Tax payables
420
428
Payables for social security
8,009
8,043
Subtotal
Income taxes
Accrued interest and rent
31,907
105,873
(109)
(1,826)
Policyholder charges
(9,593)
(4,453)
(5,140)
(10,653)
(1,934)
(4,811)
Releases upon death, surrender and withdrawal
5,479
1,786
3,693
1,182
344
839
(5,842)
62,656
(1,551)
(1,650)
37,979
67,894
(1,223)
(27)
(1,196)
(1,403)
190
(99)
(1,594)
(53)
(75)
23
(46)
(38)
(8)
Portfolio acquisitions and disposals
Reclassifications¹
579
613
Unearned income
139 Consolidated Statements of Cash Flows
141 Notes
138 Consolidated Statements of
Changes in Equity
137 Consolidated Statements of
Comprehensive Income
136 Consolidated Income Statements
135 Consolidated Balance Sheets
D- Consolidated Financial Statements
Annual Report 2015 Allianz Group
23 Certificated liabilities
194
38,609
38,686
Total¹
7,520
7,159
1,793
2,585
1-Includes other liabilities due within one year of € 25,568 MN (2014: € 25,013 MN).
Financial liabilities for puttable equity instruments
Other liabilities
CERTIFICATED LIABILITIES
Allianz SE²
6,711
51,649
3,227
2014
2015
Thereafter
2020
€ MN1
2019
31 December
as of
as of
2018
Contractual maturity date
2017
2016
31 December
281
472
that meet the criteria for hedge accounting and
firm commitments
Share-based compensation plans
2,327
2,599
Employee related
9,765
9,149
307
527
374
339
24
36
Provisions
Subtotal
Other
Interest and rent
283
606
Restructuring plans
112
Derivative financial instruments used for hedging
1,843
1,636
Deposits retained for reinsurance ceded
14,637
14,227
Subtotal
1,684
1,674
Other provisions
134
160
Contingent losses from non-insurance business
12
6
Loan commitments
109
Interest credited
16,728
Pensions and similar obligations
7,868
rate
reserves
reserves
rate
Guaranteed Non-unit-linked
Guaranteed Non-unit-linked non-unit-linked
% of
reserves
2014
South Korea
Belgium
Switzerland
United States
Italy
France
Germany
as of 31 December
2015
WEIGHTED AVERAGE GUARANTEED MINIMUM INTEREST RATES OF LIFE INSURANCE ENTITIES
% of
non-unit-linked
%
55.0
0.5
73.7
55.0
0.4
97.3
155.1
reserves
2.8
161.6
2.7
%
€ BN
%
%
€ BN
97.3
The Allianz Group's Life/Health business segment is exposed to
significant investment risk as a result of guaranteed minimum inter-
est rates being included in most of its non-unit-linked contracts. The
weighted average guaranteed minimum interest rates of the Allianz
Group's largest operating entities in the business segment Life/
Health, comprising 87% (2014: 87%) of non-unit-linked reserves in
2015, can be summarized by country as follows:
has any significant concentrations of insurance risk, nor does it
believe its net income or shareholders' equity is highly sensitive to
insurance risk.
As a result of the considerable diversity in types of contracts
issued, including the offsetting effects of mortality risk and longevity
risk inherent in a combined portfolio of life insurance and annuity
products, the geographic diversity of the Allianz Group's Life/Health
business segment and the substantial level of policyholder participa-
tion in mortality/morbidity risk in certain countries in Western
Europe, the Allianz Group does not believe its Life/Health segment
1,977
Asia Pacific
1,885
1,885
6
1,879
118
Consolidation
Global Insurance Lines & Anglo Markets
25,445
67,335
67,335
4,385
8,860
USA
158
9,452
92,780
Total
17,667
16,107
(3,414)
387,154
191
Furthermore, all of the Allianz Group's annuity policies issued in
the United States meet the criteria for classification as insurance con-
tracts under IFRS 4, because they include options for contract holders
to elect a life-contingent annuity. These contracts currently do not
expose the Allianz Group to significant longevity risk, nor are they
expected to do so in the future, as the projected and observed annui-
tization rates are very low. Additionally, many of the Allianz Group's
traditional contracts issued in France and Italy do not incorporate
significant insurance risk, although they are accounted for as insur-
ance contracts because of their discretionary participation features.
Similarly, a significant portion of the Allianz Group's unit-linked con-
tracts in France and Italy do not incorporate significant insurance
risk.
The majority of the Allianz Group's Life/Health business segment
operations are conducted in Western Europe. Insurance laws and
regulations in Europe have historically been characterized by legal or
contractual minimum participation of contract holders in the profits
of the insurance company issuing the contract. In particular, life
insurance business in Germany, Switzerland and Austria, which com-
prises approximately 47% (2014: 48%) of the Allianz Group's reserves
for insurance and investment contracts as of 31 December 2015,
includes a substantial level of policyholder participation in all sourc-
es of profit, including mortality/morbidity, investment and expense.
As a result of this policyholder participation, the Allianz Group's
exposure to insurance, investment and expense risk is mitigated.
543,826
94,564
449,263
917
61,192
(3,420)
(3,420)
(5)
(1)
26,095
9,112
16,983
445
430
76.0
1.9
Annual Report 2015 Allianz Group
48.3
Total
Unit-linked
investment
contracts
Unit-linked
insurance
contracts
Total
contracts
contracts
investment
62,656
insurance
Unit-linked
2014
2015
€ MN
CHANGES IN FINANCIAL LIABILITIES FOR UNIT-LINKED INSURANCE CONTRACTS AND UNIT-LINKED INVESTMENT CONTRACTS
21 – Financial liabilities for unit-linked contracts
139 Consolidated Statements of Cash Flows
141 Notes
Unit-linked
138 Consolidated Statements of
Changes in Equity
31,907
55,357
10,692
20,948
10,257
29.6
Premiums collected
1
Changes in the consolidated subsidiaries of the Allianz Group
94,564
3,811
3,602
3,215
(197)
3,412
Foreign currency translation adjustments
81,064
25,707
210
137 Consolidated Statements of
Comprehensive Income
As of 1 January
D- Consolidated Financial Statements
88.6
10.5
4.4
93.5
10.3
2.1
94.6
11.7
1.8
72.6
67.3
0.9
75.6
80.5
135 Consolidated Balance Sheets
136 Consolidated Income Statements
0.7
29.7
4.5
2.1
The resulting total benefits for insurance and investment con-
tracts in the amount of € 1,286 BN include contracts where the timing
and amount of payments are considered fixed and determinable, and
contracts which have no specified maturity dates and may result in
a payment to the contract beneficiary depending on mortality and
morbidity experience and the incidence of surrenders, lapses or
maturities. Furthermore, the amounts are undiscounted and do not
include any expected future premiums; therefore they exceed the
reserves for insurance and investment contracts presented in the
consolidated balance sheet.
€ 1,029 BN.
As of 31 December 2015, benefits for insurance and investment con-
tracts which are expected to be due in 2016 amounted to € 57 BN,
while those expected to be due between 2017 and 2020 amounted to
€ 200 BN and those expected to be due after 2020 amounted to
Future policy benefits
9.8
Annual Report 2015 Allianz Group
In most of these markets, the effective interest rates earned on the
investment portfolio exceed these guaranteed minimum interest
rates. In addition, the operations in these markets may also have sig-
nificant mortality and expense margins. However, the Allianz Group's
Life/Health operations in Switzerland, Belgium, South Korea and Tai-
wan have high guaranteed minimum interest rates on older con-
tracts in their portfolios and, as a result, may be sensitive to declines
in investment rates or a prolonged low interest rate environment. As
of 31 December 2015, the Allianz Group has written off deferred acqui-
sition costs and established premium deficiency reserves on parts of
the portfolio in South Korea, with an overall impact of € (244) MN on
the consolidated income statement. If current interest rate levels per-
sist, further reserve strengthening for certain portfolios may become
necessary.
For contracts without fixed and determinable payments, the
Allianz Group has made assumptions in estimating the undiscount-
ed cash flows of contractual policy benefits including mortality, mor-
bidity, interest crediting rates, policyholder participation in profits
and future lapse rates. These assumptions represent current best
estimates and may differ from the estimates used to establish the
reserves for insurance and investment contracts in accordance with
the Allianz Group's established accounting policy. Due to the uncer-
tainty of the assumptions used, the amount presented could be mate-
rially different from the actual incurred payments in future periods.
192
8.5
53.1
2.9
94.8
8.9
2.8
89.4
95.4
550
(67)
124
Subtotal
75
expenses
2,287
361
Subtotal
5
9
352
5
refunds
Net
Net
Aggregate policy reserves
(218)
198
2,770
loss and loss adjustment
Ceded
Change in reserves for
(55)
(14,425)
(13,901)
(6,154)
72
(470)
(54,472)
Ceded
Claims and insurance
Aggregate policy reserves
9
338
347
benefits paid
2,163
476
(67)
2,572
Other insurance reserves
8
9
Expenses for premium
(2)
(6,189)
Claims and insurance
(14,065)
(1,137)
(51,702)
2014
2014
Gross
Gross
Aggregate policy reserves
(238)
(6,427)
(55)
Claims and insurance
2
(252)
(250)
benefits paid
(51,696)
47
Subtotal
(20,946)
(30,797)
Other insurance reserves
(13,550)
(460)
Total
Other insurance reserves
(2)
benefits paid
(153)
(156)
(30,031)
(20,539)
5
(50,566)
Change in reserves for
Expenses for premium
refunds
(240)
(7,242)
(53)
(7,535)
loss and loss adjustment
expenses
Total
(690)
(30,721)
(447)
(20,986)
(6,374)
(7,540)
Total
(7,247)
OTHER INCOME
€ MN
2015
2014
Income from real estate held for own use
Realized gains from disposals of real estate
held for own use
31
24
31 Other income
Other income from real estate held for own use
2
Subtotal
35
26
Income from alternative investments
235
187
Other
2071
4
2
10,119
(707)
Other
34
46
Expenses for premium
1- This consolidation effect results from the deferred policyholder participation recognized in the result
from fully consolidated private equity investments within operating profit in the Life/Health business
segment that was reclassified to expenses from fully consolidated private equity investments in non-
operating profit to ensure the consistent presentation of the Allianz Group's operating profit.
Subtotal
8,011
7,825
CORPORATE AND OTHER
10,945
Service agreements
70
Investment advisory and banking activities
741
654
Subtotal
974
724
CONSOLIDATION
(845)
234
Total
476
216
(6,492)
(6,721)
benefits paid
(32,194) (21,015)
72
(53,137)
Other insurance reserves
(162)
(165)
(226)
Change in reserves for
loss and loss adjustment
refunds
expenses
(814)
Subtotal
(33,008)
(522)
(21,536)
(1,335)
(241)
Expenses for premium
Aggregate policy reserves
Claims and insurance
Gross
1- Includes a net gain of € 0.2 BN on the sale of the personal insurance business of Fireman's Fund Insurance
Company to ACE Limited. The sale was an integral part of the reorganization of Allianz Group's Property-
Casualty insurance business in the United States.
Annual Report 2015 Allianz Group
201
33 Claims and insurance benefits
incurred (net)
CLAIMS AND INSURANCE BENEFITS INCURRED (NET)
34-Change in reserves for insurance
and investment contracts (net)
CHANGE IN RESERVES FOR INSURANCE AND INVESTMENT CONTRACTS (NET)
€ MN
€ MN
Property-
Casualty Life/Health
Consoli-
dation
Group
Property-
Casualty Life/Health
Consoli-
dation
Group
2015
Gross
2015
(53
Change in reserves for
3
(313)
held for investment
(167)
(168)
Subordinated liabilities
(580)
(585)
Total
Other
(97)
Other expenses from real estate
(1,094)
(102)
Total
(1,224)
(1,261)
36-Loan loss provisions
LOAN LOSS PROVISIONS
€ MN
39 Acquisition and
administrative expenses (net)
ACQUISITION AND ADMINISTRATIVE EXPENSES (NET)
(961)
€ MN
(285)
Certificated liabilities
INTEREST EXPENSES
€ MN
INVESTMENT EXPENSES
€ MN
2015
2014
2015
2014
Liabilities to banks and customers
(294)
(207)
Investment management expenses
(676)
(561)
Deposits retained for reinsurance ceded
(47)
(48)
Depreciation of real estate held for investment
(251)
(232)
(241)
38-Investment expenses
2015
2015
Amortization of deferred acquisition costs
(6,611)
(6,035)
Subtotal
(10,214)
(9,551)
37 — Impairments of investments (net)
Administrative expenses¹
(3,175)
6,138
(3,386)
(13,388)
(12,937)
IMPAIRMENTS OF INVESTMENTS (NET)
€ MN
LIFE/HEALTH
2014
Acquisition costs
275
2015
Subtotal
2014
6,655
448
2014
Additions to allowances, including direct
impairments
Amounts released
(142)
(133)
PROPERTY-CASUALTY
79
68
Acquisition costs
Deferrals of acquisition costs
Recoveries on loans previously impaired
Incurred
(10,834)
(10,102)
Total
(60)
(45)
Commissions and profit received on reinsurance
business ceded
576
20
35 Interest expenses
139 Consolidated Statements of Cash Flows
141 Notes
138 Consolidated Statements of
Changes in Equity
Other insurance reserves
(1)
11
253
10
Claims and insurance
benefits paid
2,095
375
Ceded
(42)
Expenses for premium
refunds
5
11
(1)
15
Change in reserves for
loss and loss adjustment
Subtotal
2,428
10
246
Aggregate policy reserves
(6,390)
(827)
(7,529)
loss and loss adjustment
Subtotal
(549)
(12,830)
expenses
(224)
7
(231)
(31,021)
(21,177)
58
28
(827)
(14,206)
12
(444)
(52,140)
Ceded
Subtotal
268
(1)
277
Change in reserves for
Total
(307) (6,379)
(538) (12,563)
(828)
(7,514)
(828)
(13,929)
loss and loss adjustment
expenses
refunds
Total
(204)
(20,775)
3
(382)
(49,650)
202
Annual Report 2015 Allianz Group
D- Consolidated Financial Statements
135 Consolidated Balance Sheets
136 Consolidated Income Statements
137 Consolidated Statements of
Comprehensive Income
(175)
(28,878)
(49,268)
5
(20,571)
expenses
49
27
(14)
Subtotal
2,143
402
(56)
62
2,490
Net
Net
Aggregate policy reserves
Other insurance reserves
(231)
(5,943)
(6,174)
(241)
(240)
Claims and insurance
Expenses for premium
benefits paid
(28,702)
refunds
607
21,443
670
3,630
Subtotal
48,322
25,660
(100)
73,883
Ceded
(3,961)
(602)
(100)
100
Net
44,362
25,058
69,420
Change in
unearned premiums
Direct
(408)
(523)
(4,463)
(931)
646
Assumed
Subtotal
51,191
24,924
(111)
76,005
Ceded
(4,762)
(709)
111
3,084
(5,360)
46,430
24,215
70,645
2014
Premiums written
Direct
45,238
25,015
70,253
Net
4,298
Assumed
(21)
3,508
Subtotal
47,808
25,116
(95)
72,829
Ceded
(4,048)
(602)
(95)
95
Net
43,759
24,514
68,274
Annual Report 2015 Allianz Group
199
28- Income from financial assets and liabilities carried at fair value through income (net)
INCOME FROM FINANCIAL ASSETS AND LIABILITIES CARRIED AT FAIR VALUE THROUGH INCOME (NET)
€ MN
(4,555)
(107)
624
Assumed
5
(123)
Subtotal
(515)
(544)
5
(1,053)
Ceded
(88)
2,978
(5)
Net
(602)
(544)
(1,146)
Premiums earned
Direct
44,830
24,492
69,322
(93)
(111)
687
3,721
72,186
Assumed
3,959
689
(110)
4,538
Interest from held-to-maturity investments
Dividends from available-for-sale investments
Interest from available-for-sale investments
Share of earnings from investments in associates
and joint ventures
118
166
24,548
1,895
14,276
13,609
Subtotal
51,597
25,237
(110)
76,723
Rent from real estate held for investment
Ceded
1,562
(4,933)
47,638
Premiums written
Incurred
D- Consolidated Financial Statements
135 Consolidated Balance Sheets
136 Consolidated Income Statements
137 Consolidated Statements of
Comprehensive Income
138 Consolidated Statements of
Changes in Equity
139 Consolidated Statements of Cash Flows
141 Notes
NOTES TO THE CONSOLIDATED INCOME STATEMENTS
26-Premiums earned (net)
PREMIUMS EARNED (NET)
Direct
€ MN
INTEREST AND SIMILAR INCOME
€ MN
Property-
Casualty Life/Health
Consoli-
dation
2015
2014
Group
2015
27-Interest and similar income
(713)
110
(5,536)
(240)
Subtotal
(405)
(313)
(719)
Ceded
171
4
1
(2)
176
(234)
(309)
(543)
Premiums earned
Direct
47,470
24,237
71,707
Assumed
Net
(238)
Assumed
(479)
Interest from loans to banks and customers
Net
46,664
24,524
71,188
Other interest income
Change in
Total
290
196
896
848
4,731
4,868
203
193
22,408
unearned premiums
Direct
(168)
(311)
Property-
Casualty
Performance fees
Asset
Life/Health Management
135 Consolidated Balance Sheets
136 Consolidated Income Statements
137 Consolidated Statements of
Comprehensive Income
138 Consolidated Statements of
Changes in Equity
139 Consolidated Statements of Cash Flows
141 Notes
30- Fee and commission income
FEE AND COMMISSION INCOME
32-Income and expenses from fully
consolidated private equity investments
€ MN
D- Consolidated Financial Statements
INCOME AND EXPENSES FROM FULLY CONSOLIDATED PRIVATE EQUITY INVESTMENTS
2014
€ MN
PROPERTY-CASUALTY
2015
2014
Fees from credit and assistance business
995
790
Income
2015
Service agreements
2-During the year ended 31 December 2015, include realized losses from the disposal of subsidiaries and
businesses of € 2 MN (2014: € 1 MN).
4,017
(279)
Subtotal
(1,133)
(484)
Investments in associates and joint ventures²
(5)
(12)
Real estate held for investment
(1)
1-During the year ended 31 December 2015, include realized gains from the disposal of subsidiaries and
businesses of € 115 MN (2014: € 1 MN).
(4)
(5)
(1)
Non-current assets classified as held for sale
(1)
Subtotal
(1,144)
(502)
Total
7,937
Loans and advances to banks and customers
(866)
478
Sales and service revenues
Interest expenses
(77)
(54)
1,331
1,017
Subtotal
(784)
(738)
Consolidation¹
1
(8)
ASSET MANAGEMENT
Total
(60)
(23)
Management and advisory fees
6,795
6,834
Loading and exit fees
575
19
471
(469)
General and administrative expenses
Subtotal
1,474
1,260
Subtotal
732
696
732
696
LIFE/HEALTH
(481)
Expenses
Investment advisory
Other
Subtotal
93
97
Cost of goods sold
(226)
(216)
1,237
Service agreements
Debt securities
(205)
(267)
(125)
(2,101)
(8)
(72)
(1)
(2,307)
2014
Income (expenses) from financial assets and liabilities held for trading (net)
Income (expenses) from financial assets and liabilities designated at fair value
through income (net)
(313)
Total
(3,472)
(141)
(1)
(3,928)
2
161
2
18
182
Income (expenses) from financial liabilities for puttable equity instruments (net)
Foreign currency gains and losses (net)
(1)
(4)
1,604
(8)
and Other Consolidation
Group
2015
Income (expenses) from financial assets and liabilities held for trading (net)
Income (expenses) from financial assets and liabilities designated at fair value
through income (net)
(270)
(3,404)
(263)
1
(3,936)
194
(3)
(4)
12
Income (expenses) from financial liabilities for puttable equity instruments (net)
Foreign currency gains and losses (net)
1
11
1
13
147
1,271
20
(88)
(91)
206
Subtotal
7,834
4,033
Investments in associates and joint ventures¹
Real estate held for investment
148
27
115
141
Loans and advances to banks and customers
Non-current assets classified as held for sale
Subtotal
2,296
876
108
32
9,081
4,519
200
Annual Report 2015 Allianz Group
REALIZED LOSSES
Available-for-sale investments
Equity securities
287
4,486
1,736
3,349
1,901
3
123
2,234
Total
(108)
(1,497)
5
(3)
(1,604)
Foreign currency gains and losses are reported within income from
financial assets carried at fair value through income (net) (2015:
income of € 1,604 MN; 2014: income of € 2,234 MN). These foreign cur-
rency gains and losses arise subsequent to initial recognition on all
assets and liabilities denominated in a foreign currency that are
monetary items and not measured at fair value through income. The
Allianz Group uses freestanding derivatives, included in the line item
income (expenses) from financial assets and liabilities held for trading
(net), to hedge against foreign currency fluctuations (2015: expenses
of € 2,350 MN; 2014: expenses of € 2,502 MN).
Additionally included in the business segment Life/Health are
derivative financial instruments from German entities which relate
to duration management (2015: expenses of € 419 MN; 2014: income of
€ 780 MN) and protection against equity fluctuations (2015: income of
€ 239 MN; 2014: expenses of € 125 MN), and from U.S. entities which
relate to fixed-indexed annuity products and guaranteed benefits
under unit-linked contracts (2015: expenses of € 1,143 MN; 2014:
expenses of € 1,783 MN).
29-Realized gains/losses (net)
REALIZED GAINS/LOSSES (NET)
€ MN
REALIZED GAINS
Available-for-sale investments
Equity securities
Debt securities
2015
2014
Corporate
(5,262)
919
IMPAIRMENTS
4,032
2
4,939
(13)
4,939
(18)
14
14
(14)
19
(3)
4,193
5,189
34
(8)
905
78
120
93
(238)
2,735
424
864
3,847
53,334
58,046
577
(361)
31,504
556
(397)
4,000
6,081
10,081
32,228
3
Warrants
3
65
(15)
Floors
1
1
1
Swaps
4,191
35
(5,203)
5,478
24
(66)
6,332
34
926
(59)
135
1,319
3
Subtotal
7,322
16,001
59,699
83,022
1,008
338
(626)
1,136
(426)
Equity/Index contracts
OTC
Forwards
1,120
199
76,693
5,746
264
4,122
2021-2025
>10 years
Unlimited
Total
206
Annual Report 2015 Allianz Group
2015
37
92
156
594
132
9,383
10,395
D- Consolidated Financial Statements
2019-2020
2017-2018
2016
€ MN
Total deferred tax liabilities
Effect of netting
22,483
21,773
(18,480)
(16,841)
4,003
4,932
135 Consolidated Balance Sheets
(2,609)
Annual Report 2015 Allianz Group
205
Taxable temporary differences associated with investments in Allianz
Group companies for which no deferred tax liabilities are recognized,
as the Allianz Group is able to control the timing of their reversal, and
which will not reverse in the foreseeable future, amounted to € 585 MN
(2014: € 707 MN). Deductible temporary differences arising from
investments in Allianz Group companies for which no deferred tax
assets are recognized, as it is not probable that they will reverse in the
foreseeable future, amounted to € 98 MN (2014: € 191 MN).
TAX LOSSES CARRIED FORWARD
Tax losses carried forward at 31 December 2015 of € 10,395 MN (2014:
€ 10,521 MN) resulted in the recognition of deferred tax assets to the
extent that there is sufficient certainty that the unused tax losses will
be utilized. € 9,383 MN (2014: € 9,422 MN) of the tax losses carried for-
ward can be used for an unlimited period of time.
Tax losses carried forward are scheduled according to their expiry
periods as follows:
TAX LOSSES CARRIED FORWARD
(3,886)
(39)
136 Consolidated Income Statements
138 Consolidated Statements of
Changes in Equity
amounts
values
values
Interest rate contracts
OTC
Forwards
Swaps
Swaptions
Caps
Options
Exchange-traded
Futures
4,193
Forwards
1,361
fair
Negative
Positive
fair
Notional
principal
139 Consolidated Statements of Cash Flows
141 Notes
OTHER INFORMATION
43 Derivative financial instruments
DERIVATIVE FINANCIAL INSTRUMENTS
€ MN
as of 31 December
2015
137 Consolidated Statements of
Comprehensive Income
2014
Notional
principal
Up to 1 year
1-5 years
Over 5 years
amounts
Positive
fair
values
Negative
fair
values
Maturity by notional amount
450
Options
3,956
Exchange-traded
Swaps
7
Subtotal
76
1,617
1,090
2,783
(132)
4,033
32
22
(26)
Real estate contracts
OTC
2
Options
(26)
4,025
482
(424)
35,013
148
(706)
Credit contracts
OTC
Swaps
Options
68
1,617
1,090
8
2,775
8
(130)
(2)
19
Subtotal
Total
Annual Report 2015 Allianz Group
DERIVATIVE FINANCIAL INSTRUMENTS
USED IN ACCOUNTING HEDGES
As of 31 December 2015, derivatives which form part of hedge
accounting relationships, which are included in the line items other
assets and other liabilities, had a notional amount of € 19.8 BN (2014:
€ 7.5 BN), as well as a positive fair value of € 565 MN (2014: € 477 MN)
and a negative fair value of € 472 MN (2014: € 281 MN). These hedging
instruments mainly include interest rate forwards with a total nega-
tive fair value of € 176 MN (2014: € 151 MN).
Fair value hedges
The Allianz Group uses fair value hedges to hedge the exposure to
changes in the fair value of financial assets due to movements in inter-
est or exchange rates. As of 31 December 2015, the derivative financial
instruments used for the related fair value hedges of the Allianz
Group had a total negative fair value of € 177 MN (2014: € 157 MN).
Within the Allianz Group's banking business, derivatives to hedge
against interest rate changes are implemented for individual trans-
actions (micro hedges) or for a portfolio of similar assets or liabilities
(macro hedges).
Additionally, the Allianz Group uses fair value hedges to hedge
its equity portfolio against equity market risk. As of 31 December 2015,
the derivatives used as hedging instruments in the related fair value
hedges had a total positive fair value of € 84 MN (2014: € 21 MN).
For the year ended 31 December 2015, the Allianz Group recog-
nized for fair value hedges a net gain of € 3 MN (2014: net loss of € 30 MN)
on the hedging instruments and a net loss of € 9 MN (2014: net gain of
€ 35 MN) on the hedged items attributable to the hedged risk.
Cash flow hedges
During the year ended 31 December 2015, cash flow hedges were used
to hedge the exposure to the variability from cash flows arising from
interest rate or exchange rate fluctuations as well as inflation. As of
31 December 2015, the derivative instruments utilized had a total
positive fair value of € 177 MN (2014: € 412 MN). Unrealized gains and
losses (net) in shareholders' equity decreased by € 49 MN (2014:
increased by € 84 MN). Amounts accumulated in the other compre-
hensive income are reclassified to profit or loss in the periods when
the hedged item affects profit or loss. This is the case when the fore-
cast transactions that are hedged take place.
Hedge of net investment in foreign operations
As of 31 December 2015, the Allianz Group hedges part of its U.S. Dollar,
British Pound, Australian Dollar and Swiss Franc net investments
through the issuance of U.S. Dollar, British Pound, Australian Dollar
and Swiss Franc denominated liabilities with a nominal amount
of GBP 0.8 BN and CHF 0.5 BN, as well as the use of forward sales of
U.S. Dollar, British Pound, Australian Dollar and Swiss Franc with a
notional of USD 0.5 BN, GBP 0.3 BN, AUD 0.4 BN and CHF 0.1 BN. The total
positive fair value in 2015 was € 9 MN (2014: total negative fair value of
€80 MN).
OFFSETTING
The Allianz Group mainly enters into enforceable master netting
arrangements and similar arrangements for derivatives transactions.
None of these enforceable master netting arrangements or similar
arrangements meet the requirements for offsetting in line with IAS 32.
Credit risk associated with netting arrangements is further mit-
igated by collateral. For further information on collateral, please refer
to note 44 Financial instruments and fair value measurement.
208
Annual Report 2015 Allianz Group
FREESTANDING DERIVATIVE FINANCIAL INSTRUMENTS
As of 31 December 2015, freestanding derivatives, included in the line
item financial assets and liabilities held for trading, had a notional
principal amount of € 292.1 BN (2014: € 297.2 BN), as well as a positive
fair value of € 1.6 BN (2014: € 1.6 BN) and a negative fair value of € 9.2 BN
(2014: € 8.5 BN). Out of the total allocated to the freestanding deriva-
tives, € 202.9 BN (2014: € 189.2 BN) of the notional principal relate to
annuity products. These products are equity-indexed or contain cer-
tain embedded options or guarantees which are considered embed-
ded derivatives under IAS 39. For these embedded derivatives, the
notional principal amounts included in the table refer to the account
value of the related insurance contracts. The total negative fair value
of these embedded derivatives amounts to € 7.8 BN (2014: € 6.7 BN).
Further information on the fair value measurement of these deriva-
tives can be found in note 44 Financial instruments and fair value
measurement.
The table shows the fair value and notional amounts of all freestand-
ing derivatives as well as derivatives for which hedge accounting is
applied by the Allianz Group as of 31 December 2015 and 2014, respec-
tively. The notional principal amounts indicated in the table are
cumulative, as they include the absolute value of the notional princi-
pal amounts of derivatives with positive and negative fair values.
Although these notional principal amounts reflect the degree of the
Allianz Group's involvement in derivative transactions, they do not
represent amounts exposed to risk. Further information on the use
of derivatives to hedge risks can be found in the sections on market
and credit risk in the Risk and Opportunity Report which forms part
of the Group Management Report.
207
(8,774)
6
6
6
1
6
6
6
46,988
1
23,251
68,532
311,883
2,146
(9,675)
304,681
2,096
220,101
642
1,641
44,705
5,642
5,642
58
6,347
84
Warrants
2,705
2,705
14
2,684
51
Subtotal
167,993
3,992
7,101
Options
(65)
86
20,709
208
148,734
412
Warrants
5,442
5,442
(8,193)
(174)
179,085
147,424
(7,315)
4,513
(181)
Exchange-traded
Futures
9,765
9,765
469
144,570
644
188,936
642
1,106
60
(28)
637
19
(27)
Options
14
37
50
7
34
8
Subtotal
218
246
Swaps
(663)
789
(7,616)
Foreign exchange contracts
OTC
Futures
721
1
(8,492)
(16)
44,445
1,387
45,832
415
(396)
33,621
121
Forwards
524
1,252
2,609
Subtotal
(1,367)
(1,180)
LIFE/HEALTH
Service agreements
Investment advisory
Subtotal
(46)
(34)
(553)
(599)
(353)
(387)
ASSET MANAGEMENT
Commissions
Other
Total
Subtotal
(360)
Service agreements
203
40-Fee and commission expenses
FEE AND COMMISSION EXPENSES
€ MN
2015
2014
42-Income taxes
INCOME TAXES
€ MN
PROPERTY-CASUALTY
Current income taxes
Fees from credit and assistance business
(999)
(820)
Deferred income taxes
(367)
(1,440)
(1,301)
(83)
Subtotal
(745)
(567)
CONSOLIDATION
Total
457
342
(3,777)
(3,238)
€ MN
41-Other expenses
OTHER EXPENSES
€ MN
Realized losses from disposals of real estate held
for own use
Expenses from alternative investments
(298)
(335)
Investment advisory and banking activities
(269)
(1,523)
(145)
(1,445)
2015
2014
(2,889)
(2,454)
(320)
1- Include one-off effects from pension revaluation. Please refer to note 6 Segment reporting for further
details.
209
(2,245)
During the year ended 31 December 2015, current income taxes
included income of € 73 MN (2014: € 485 MN) related to prior years.
Of the deferred income taxes for the year ended 31 December
2015, expenses of € 309 MN (2014: income of € 198 MN) are attributable
to the recognition of deferred taxes on temporary differences, and
expenses of € 12 MN (2014: € 15 MN) are attributable to tax losses carried
forward. Changes of applicable tax rates due to changes in tax law
produced deferred tax income of € 1 MN (2014: € 26 MN).
For the years ended 31 December 2015 and 2014, the income
taxes relating to components of other comprehensive income consist
of the following:
CORPORATE AND OTHER
Service agreements
(410)
(3,209)
Annual Report 2015 Allianz Group
(23,343)
(25,718)
(898)
(4,261)
Investments in associates and joint ventures
(11)
Administrative expenses¹
(1,720)
(1,606)
Subtotal
Real estate held for investment
(37)
(24)
(6,934)
(5,868)
Loans and advances to banks and customers
(26)
(1,500)
Subtotal
(5,215)
Subtotal
Commissions and profit received on reinsurance
business ceded
115
88
Available-for-sale investments
Equity securities
Other liabilities
3,364
(16)
3,502
(553)
Debt securities
(344)
(345)
Amortization of deferred acquisition costs
(3,432)
(2,648)
(1,156)
Expenses from non-current assets classified
ASSET MANAGEMENT
(5)
Subtotal
48
51
Subtotal
Total
(1,526)
(894)
CONSOLIDATION
Total
(1,264)
(750)
(1,264)
(750)
30
7
Administrative expenses¹
6
8
Loans and advances to banks and customers
Personnel expenses¹
(2,576)
(2,380)
(1,575)
(944)
Non-personnel expenses
(1,585)
Non-current assets classified as held for sale
Subtotal
(1,415)
(4,161)
(3,795)
REVERSALS OF IMPAIRMENTS
Real estate held for investment
40
44
CORPORATE AND OTHER
Subtotal
as held for sale
Deferrals of acquisition costs
Total
Effective tax rate
(108)
(2)
Pensions and similar obligations
4,455
4,353
82
142
Other liabilities
1,214
871
(3)
(740)
Total deferred tax assets
20,633
Effective income taxes
Other effects
Effects of tax losses
Net tax exempt income
29.8%
Intangible assets
170
166
Calculated income taxes
3,054
2,636
18,737
Tax losses carried forward
2,435
Trade tax and similar taxes
185
210
Insurance reserves
4,888
4,616
2,373
30.0%
3,209
Non-recognition or valuation allowance for
9,357
9,643
Deferred acquisition costs
Other assets
4,958
4,824
1,267
1,017
Intangible assets
661
410
Insurance reserves
2,691
Pensions and similar obligations
2,674
Other
Investments
128
235
Financial assets carried at fair value
through income
31.5%
25.4%
deferred tax assets on tax losses carried forward
(759)
(850)
Effect of netting
(18,480)
2,245
(16,841)
1,394
1,046
For the year ended 31 December 2015, the write-down of deferred
taxes on tax losses increased the tax expenses by € 113 MN (2014:
€ 167 MN). The reversal of write-down of deferred tax assets on tax
losses carried forward resulted in deferred tax income of € - MN (2014:
€ 6 MN). Due to the use of tax losses carried forward, for which
deferred tax assets were previously written off, the current income
tax expenses decreased by € 3 MN (2014: € 9 MN). Deferred tax income
increased by € 28 MN (2014: € 10 MN) due to the use of tax losses car-
ried forward, for which deferred tax assets were previously written off.
The above-mentioned effects are shown in the reconciliation state-
ment as “effects of tax losses". The other effects include for the year
ended 31 December 2014 a total of € (846) MN in current and deferred
taxes for prior years, resulting from a favorable decision of the German
Federal Fiscal Court (BFH) received by Allianz Leben.
The tax rates used in the calculation of the Allianz Group's de-
ferred taxes are the applicable national rates, which in 2015 ranged
from 10.0% to 45.0%. Changes to tax rates that had already been
adopted on 31 December 2015 are taken into account. In 2015, Italy
enacted a tax rate decrease from 27.5% to 24% effective 2017. In 2015,
the United Kingdom enacted a gradual tax rate decrease to 18% in
2018. Impacts from changes in tax rates lead to deferred tax income
of € 1 MN (2014: € 26 MN).
Deferred tax assets on losses carried forward are recognized to the
extent to which it is more likely than not that sufficient future taxable
profits will be available for realization. Entities which suffered a tax
loss in either the current or the preceding period recognized deferred
tax assets in excess of deferred tax liabilities amounting to € 466 MN
(2014: € 375 MN).
Net deferred tax liabilities
Net deferred tax assets (liabilities)
Deferred tax liabilities
Net deferred tax assets
Applied weighted income tax rate
2,808
1,435
Miscellaneous
(19)
(160)
Items that may never be reclassified
(7)
to profit or loss
(121)
(103)
Actuarial gains (losses) on defined benefit plans
Total
(228)
695
1,679
(2,201)
(5
(18)
2014
(2)
2015
(1)
1,283
Annual Report 2015 Allianz Group
2015
2014
Items that may be reclassified to profit
or loss in future periods
Foreign currency translation adjustments
119
Available-for-sale investments
1,775
124
(2,820)
Cash flow hedges
34
(40)
Share of other comprehensive income
of associates and joint ventures
(1)
(7)
INCOME TAXES RELATING TO COMPONENTS OF OTHER COMPREHENSIVE INCOME
(135)
through income
136
53
Investments
4,995
3,202
2015
Financial assets carried at fair value
2014
967
1,759
Income before income taxes
10,196
8,848
(129)
Other assets
Deferred acquisition costs
€ MN
204
Deferred tax assets
EFFECTIVE TAX RATE
D- Consolidated Financial Statements
135 Consolidated Balance Sheets
136 Consolidated Income Statements
137 Consolidated Statements of
Comprehensive Income
138 Consolidated Statements of
Changes in Equity
139 Consolidated Statements of Cash Flows
141 Notes
used in the reconciliation for domestic Allianz Group companies
includes corporate tax, trade tax and the solidarity surcharge, and
amounted to 31.0% (2014: 31.0%).
The recognized income taxes for the year ended 31 December 2015 are
€ 155 MN above (2014: € 391 MN below) the calculated income taxes,
which are determined by multiplying the respective income before
income taxes with the applicable country-specific tax rates. The fol-
lowing table shows the reconciliation from the calculated income
taxes to the effectively recognized taxes of the Allianz Group. The
Allianz Group's reconciliation is a summary of the individual com-
pany-related reconciliations, which are based on the respective
country-specific tax rates taking into consideration consolidation
effects with an impact on the Group result. The applicable tax rate
DEFERRED TAX ASSETS AND LIABILITIES
DEFERRED TAX ASSETS AND LIABILITIES
2015
€ MN
as of 31 December
2014
The effective tax rate is determined on the basis of the effective
income tax expenses on income before income taxes.
recognized in other
Foreign currency
translation
Impairments
adjustments
(891)
2
Annual Report 2015 Allianz Group
(888)
796
796
Changes in the
consolidated
subsidiaries of the
Allianz Group
Carrying value
(fair value) as of
31 December 2015
Net losses (gains) in
profit or loss
1
Net losses (gains)
consolidated
Net losses (gains)
(116)
609
234
18,796
(10)
2
164
381
238
(117)
611
attributable to a change
in unrealized gains
or losses for financial
liabilities held at the
reporting date
19,145
(18)
recognized in
income statement comprehensive income
234
If financial assets are measured at fair value on a non-recurring
basis at the time of impairment, or if fair value less cost to sell is used
as the measurement basis under IFRS 5, corresponding disclosures
can be found in note 37 Impairments of investments (net).
701
€ MN
FINANCIAL ASSETS
Held-to-maturity investments
Investments in associates and joint ventures
Real estate held for investment
Loans and advances to banks and customers
Total assets
FINANCIAL LIABILITIES
Liabilities to banks and customers
Certificated liabilities
Subordinated liabilities
1
237
D- Consolidated Financial Statements
Annual Report 2015 - Allianz Group
FAIR VALUE HIERARCHY AS OF 31 DECEMBER 2014 (ITEMS NOT CARRIED AT FAIR VALUE)
8,134
164
Total liabilities
Certificated liabilities
19
8,317
701
215
FAIR VALUE MEASUREMENT ON A NON-RECURRING BASIS
Certain financial assets are measured at fair value on a non-recurring
basis when events or changes in circumstances indicate that the
carrying amount may not be recoverable.
FAIR VALUE INFORMATION ABOUT FINANCIAL ASSETS
AND LIABILITIES NOT CARRIED AT FAIR VALUE
FAIR VALUE HIERARCHY AS OF 31 DECEMBER 2015 (ITEMS NOT CARRIED AT FAIR VALUE)
€ MN
FINANCIAL ASSETS
Held-to-maturity investments
Investments in associates and joint ventures
Real estate held for investment
Loans and advances to banks and customers
Total assets
Liabilities to banks and customers
Subordinated liabilities
FINANCIAL LIABILITIES
38
6,915
recognized in other
Foreign currency
Impairments translation adjustments
192
193
1
Net gains (losses)
(1)
2
Changes in the
consolidated
subsidiaries of the
Allianz Group
Carrying value
(fair value) as of
31 December 2015
Net gains (losses) in
profit or loss
(1)
income statement comprehensive income
consolidated
recognized in
(10)
218
15
9
(6)
7,310
1,865
26
(793)
D- Consolidated Financial Statements
135 Consolidated Balance Sheets
136 Consolidated Income Statements
137 Consolidated Statements of
Comprehensive Income
138 Consolidated Statements of
Changes in Equity
139 Consolidated Statements of Cash Flows
141 Notes
Net gains (losses)
attributable to a change
in unrealized gains
or losses for financial
assets held at the
reporting date
9
570
9,754
€
3
95
(5)
5
3
1,548
2
126
475
(111)
(13)
32
(291)
186
(3)
3
47
25
112
137
37
(13)
25
152
274
23
(29)
18
46
257
(1)
47
Investment funds launched by group-internal asset managers
can be considered to be sponsored by the Allianz Group. As a sponsor,
the Allianz Group through its asset management subsidiaries is
involved in the legal set-up and marketing of internally managed
investment funds. This may include providing seed capital to the
funds and providing administrative services to ensure the invest-
ment funds' operation. Investment funds managed by group-internal
asset managers can be reasonably associated with the Allianz Group.
The use of the Allianz name for investment funds is another indicator
that the Allianz Group has acted as a sponsor for the respective funds.
Information on the management fees generated in the asset manage-
ment business are disclosed in note 30 Fee and commission income
of this Annual Report.
241
Within the asset management business, investment funds are estab-
lished and managed to accommodate retail and institutional clients'
requirements to hold investments in specific assets, market segments
or regions. Within the insurance business, policyholder money is
partly invested in investment funds, which include funds managed
by Allianz Group internal asset managers as well as funds set up and
managed by third parties. Investment funds managed or invested in
by Allianz Group may include mutual funds, special funds and other
funds.
18
4,710
2
3,525
330
1,182
4,472
Total
Level 2 -
Market
observable inputs
Level 1
Quoted prices in
active markets
47,871
13,905
25,392
8,574
Level 3 -
Non-market
observable inputs
4,820
16,323
16,323
9,293
675
8,618
23,607
14,015
1,608
7,984
166,091
64,200
99,882
2,006
140,238
43,403
96,339
494
13,100
271
12,829
9,208
3,165
36
1,452
362
1,677
Total
Level 3 -
Non-market
observable inputs
Level 2 -
Market
observable inputs
Quoted prices in
active markets
Level 1 -
Annual Report 2015 Allianz Group
216
For level 2 and level 3, the fair value is mainly determined based on
the market approach using quoted market prices and the income
approach using deterministic discounted cash flow models.
Held-to-maturity investments
Total liabilities
40
13,012
5,806
17,810
583
8,625
25,563
13,051
3,938
8,574
163,579
72,156
84,405
7,018
136,397
48,505
82,913
4,978
17,810
6,207
Income derived from the management of investment funds
includes mainly asset management fees and performance based
fees.
13,253
23,239
Annual Report 2015 Allianz Group
As of 31 December 2015, the Allianz Group received cash collat-
eral with a carrying amount of €212 MN (2014: € 15 MN).
As of 31 December 2015, the Allianz Group has received collateral,
consisting of fixed income and equity securities, with a fair value of
€ 2,349 MN (2014: € 2,501 MN), which the Allianz Group has the right to
sell or repledge. For the years ended 31 December 2015 and 2014, no
previously received collateral was sold or repledged by the Allianz
Group.
10,239
11,365
2,628
217
2,295
2,295
Total
Collaterals with right to resell or repledge
Investments
Subtotal
Loans and advances to banks and customers
Subtotal
7,611
9,070
2,628
45 Interests in unconsolidated
structured entities
NATURE, PURPOSE AND ROLE OF THE ALLIANZ GROUP
IN STRUCTURED ENTITIES
Fund management activities
With regard to investment activities, income mainly includes
distributions from the funds as well as realized gains and losses from
disposals.
Investment funds are generally subject to stringent regulatory
requirements from financial authorities in all jurisdictions across the
world. Comprehensive regulation of funds protects fund investors
and also helps to limit investment risk. These mechanisms result in
a legal set-up of funds, agreed and accepted by investors and invest-
ment managers, that may lead to a classification as structured enti-
ties under IFRS 12.
Considering the broad variety of investment funds across different
jurisdictions, the classification of investment funds as structured
entities based on the definition in IFRS 12 and current industry prac-
tice is judgmental. As a general rule, the relevant activities of an
investment fund are dedicated to the fund manager via asset manage-
ment agreements. In contrast, influence from investors on the rele-
vant activities of unconsolidated funds is usually either precluded by
legal or regulatory provisions or is not deemed to be substantial.
Investments in investment funds
Income derived from the management of securitization vehicles
comprises asset management fees.
Within the asset management business, the Allianz Group acts
as asset manager for some securitization vehicles. The assets under
management of these vehicles amounted to € 1,753 MN as of 31 Decem-
ber 2015 (2014: € 2,202 MN). Some of the affected vehicles have been set
up by the Allianz Group whereas others have been set up by third
parties. In this respect, the role of the Allianz Group is limited to asset
management. The Allianz Group has not invested in these vehicles
being managed.
Income derived from investments in securitization vehicles
mainly includes interest income generated from ABS and MBS, as well
as realized gains and losses from disposals of these securities.
Securitization vehicles invested in by the Allianz Group have
been set up by third parties. Furthermore, the Allianz Group has nei-
ther transferred any assets to these vehicles nor has it provided any
further credit enhancements to them.
The Allianz Group acts as investor in ABS- or MBS-issuing securitiza-
tion vehicles which purchase pools of assets including commercial
mortgage loans (CMBS), auto loans, credit card receivables and oth-
ers. These securitization vehicles refinance the purchase of assets by
issuing tranches of ABS or MBS, whose repayment is linked to the per-
formance of the assets held by the vehicles.
Investments in asset-backed securities (ABS)
and mortgage-backed securities (MBS) issued
by securitization vehicles
In the following, the business activities involving unconsolidated
structured entities are described.
The Allianz Group engages in some business activities that
involve entities that fit the above-mentioned definition of structured
entities. Primarily, the Allianz Group is involved with such entities
due to its investment activities in the insurance business and due to
its asset management activities. Furthermore, structured entities are
used by the Allianz Group to source out certain risks to investors as
part of its reinsurance business. Generally, the classification of enti-
ties as structured entities may require significant judgment.
Under IFRS 12, a structured entity is defined as an entity that has
been designed so that voting rights or similar rights are not the dom-
inant factor in deciding who controls the entity, such as when any
voting rights relate to administrative tasks only and the relevant
activities are directed by means of contractual arrangements.
To improve transparency and to meet requirements of regulators and
other financial authorities, IFRS 12 introduced additional disclosure
requirements for unconsolidated structured entities often referred to
as off-balance sheet activities. Unconsolidated structured entities,
particularly securitization vehicles and asset-backed financings,
were identified by regulators as forming part of such activities.
2,877
2,726
4,734
6,337
Liabilities to banks and customers
For loans and advances to banks and customers, quoted market
prices are rarely available. Level 1 consists mainly of highly liquid
advances, e.g. short-term investments. The fair value for these assets
in level 2 and level 3 is mainly derived based on the income approach
using deterministic discounted cash flow models.
Loans and advances to banks and customers
Fair values are mainly determined based on the income approach. In
some cases, a market approach is applied using market prices of
identical or comparable assets in markets which are not active. The
fair values are either calculated internally and validated by external
experts or derived from expert appraisals with internal controls in
place to monitor these valuations.
Real estate
For level 2, fair values are mainly determined based on the net asset
values. For level 3, fair values are mainly based on an income
approach using a discounted cash flow method or net asset values as
provided by third-party vendors.
Investments in associates and joint ventures
139 Consolidated Statements of Cash Flows
141 Notes
138 Consolidated Statements of
Changes in Equity
137 Consolidated Statements of
Comprehensive Income
136 Consolidated Income Statements
135 Consolidated Balance Sheets
D- Consolidated Financial Statements
46,154
14,931
Level 1 consists mainly of highly liquid liabilities, e.g. payables on
demand. The fair value for liabilities in level 2 and level 3 is mainly
derived based on the income approach, using future cash flows dis-
counted with risk-specific interest rates. Main non-market observable
inputs include credit spreads. In some cases, the carrying amount
(amortized cost) is considered to be a reasonable estimate of the fair
value.
7,984
Certificated liabilities and subordinated liabilities
RECLASSIFICATION OF FINANCIAL ASSETS
Investments
7
Collaterals without right to resell or repledge
Financial assets carried at fair value through
income
2014
2015
as of 31 December
€ MN
ASSETS PLEDGED AS COLLATERAL
The carrying amounts of the assets pledged as collateral are dis-
played in the following table:
ASSETS PLEDGED AND COLLATERAL
As of 31 December 2015, the Allianz Group substantially retained all
the risks and rewards out of the ownership of transferred assets.
There have not been any transfers of financial assets that were derec-
ognized in full or partly, in which Allianz continues to control the
transferred assets. Transfers of financial assets mainly relate to secu-
rities lending and repurchase agreement transactions. Transferred
financial assets in repurchase agreement and securities lending
transactions are mainly available-for-sale debt and equity securities
for which substantially all of the risks and rewards are retained. As of
31 December 2015, the carrying amount of the assets transferred for
securities lending transactions amounted to € 5,294 MN (2014:
€ 7,596 MN). For repurchase agreements, the carrying amount of the
assets transferred amounted to € 1,394 MN (2014: € 1,119 MN) and the
carrying amount of the associated liabilities amounted to € 1,410 MN
(2014: € 1,168 MN).
TRANSFERS OF FINANCIAL ASSETS
course of this, the underlying assets of the CDO vehicle were recog-
nized as available-for-sale investments. For the year ended 31 Decem-
ber 2015, the net profit related to the CDOS was € 19 MN.
As of 31 December 2014, the carrying amount and fair value of the
CDOS was € 167 MN and € 169 MN, respectively. As of 31 December 2015,
the carrying amount and fair value of the CDOS was € 4 MN and € 4 MN,
respectively. This reduction was driven by the circumstance that one
CDO vehicle was restructured during the second quarter of 2015. In the
On 31 January 2009, certain USD-denominated CDOS were reclassified
from financial assets held for trading to loans and advances to banks
and customers in accordance with IAS 39.
For level 2, the fair value is mainly determined based on the market
approach, using quoted market prices, and based on the income
approach, using deterministic discounted cash flow models. For
level 3, fair values are mainly derived based on the income approach
using deterministic cash flows with credit spreads as primary non-
market observable inputs. In some cases, the carrying amount
(amortized cost) is considered to be a reasonable estimate for the fair
value.
5
Annual Report 2015 Allianz Group
26
Financial liabilities for unit-linked contracts
102,954
2,755
164
9,207
105,873
Derivative financial instruments and firm commitments included in other liabilities
8,134
472
Financial liabilities for puttable equity instruments
2,496
71
19
2,585
Total
472
1,046
28
Subtotal
565
211,155
371,770
19,145
602,071
FINANCIAL LIABILITIES
Financial liabilities held for trading
Derivative financial instruments
28
1,041
8,134
9,203
Other trading liabilities
4
4
105,478
565
4,343
118,137
Level 3 -
Non-market
observable inputs
Total
79
323
402
47
Level 2 -
Market
observable inputs
133
195
260
1,336
22
1,618
385
15
Level 1 -
Quoted prices in
active markets
Subtotal
Derivative financial instruments
210
Annual Report 2015 Allianz Group
D- Consolidated Financial Statements
135 Consolidated Balance Sheets
136 Consolidated Income Statements
137 Consolidated Statements of
Comprehensive Income
138 Consolidated Statements of
Changes in Equity
139 Consolidated Statements of Cash Flows
141 Notes
FAIR VALUE HIERARCHY AS OF 31 DECEMBER 2014 (ITEMS CARRIED AT FAIR VALUE)
€ MN
FINANCIAL ASSETS
Financial assets carried at fair value through income
Financial assets held for trading
Debt securities
Equity securities
8,317
1,792
Derivative financial instruments and firm commitments included in other assets
Total
164
2,365
3,836
1,037
137
5,010
4,027
112
3,055
7,268
Available-for-sale investments
Government and agency mortgage-backed securities (residential and commercial)
Corporate mortgage-backed securities (residential and commercial)
14
3,979
3,993
184
23
2,230
2,645
187
60
1,483
38
1,582
192
2,018
47
2,258
Equity securities
Subtotal
Subtotal
1,605
1,014
25
20
105,873
12,700
12,994
Equity securities
32,932
776
6,915
40,624
Subtotal
3,938
104,174
(778)
18,796
488,365
Financial assets for unit-linked contracts
102,954
2,755
365,396
1,548
1,762
627
Other asset-backed securities
176
3,994
257
4,427
Government and government agency bonds
41,977
159,999
47
202,023
Corporate bonds
28,428
182,185
9,754
Other debt securities
274
9
38
Financial assets designated at fair value through income
1,754
24
15
1,793
93,688
4,135
281
7,310
Financial assets carried at fair value through income
Financial assets held for trading – Debt and equity securities
The fair value is mainly determined using the market approach. In
some cases, it is determined based on the income approach, using
interest rates and yield curves observable at commonly quoted
intervals.
Financial assets held for trading
- Derivative financial instruments
The fair value is mainly determined based on the income approach,
using present value techniques and the Black-Scholes-Merton model.
Primary inputs for the valuation include volatilities, interest rates,
yield curves, and foreign exchange rates observable at commonly
quoted intervals.
Financial assets designated at fair value through income
- Debt securities
105,134
281
Derivative financial instruments and firm commitments included in other liabilities
Financial liabilities for puttable equity instruments
Total
94,564
49
1,315
7,129
8,493
Other trading liabilities
3
Subtotal
49
1,319
7,129
3
8,496
Financial liabilities for unit-linked contracts
91,885
2,511
166
The fair value is mainly determined based on net asset values for
funds and the market approach.
Derivative financial instruments
Financial assets designated at fair value through income
- Equity securities
Annual Report 2015 Allianz Group
and firm commitments included in other assets
The fair value of the derivatives is mainly determined based on the
income approach using present value techniques. Primary inputs
include yield curves observable at commonly quoted intervals. The
derivatives are mainly used for hedging purposes. Certain derivatives
are priced by Bloomberg functions, such as Black-Scholes Option
Pricing or the swap manager tool.
Financial liabilities held for trading - Derivative financial
instruments
For level 2, the fair value is mainly determined using the income
approach. Valuation techniques applied for the income approach
mainly include discounted cash flow models as well as the Black-
Scholes-Merton model. Main observable input parameters include
volatilities, yield curves observable at commonly quoted intervals
and credit spreads observable in the market.
For level 3, the fair value is mainly determined based on the
income approach using deterministic discounted cash flow models.
A significant proportion of derivative liabilities represent derivatives
embedded in certain life insurance and annuity contracts. Significant
non-market observable input parameters include mortality rates and
surrender rates.
Financial liabilities held for trading - Other trading
liabilities
The fair value is mainly determined based on the income approach
using present value techniques. Primary inputs comprise swap
curves, share prices and dividend estimates.
Derivative financial instruments
Derivative financial instruments and
For level 2, the fair value is mainly determined using the income
approach. Primary inputs include interest rates and yield curves
observable at commonly quoted intervals.
Financial liabilities for puttable equity instruments
Financial liabilities for puttable equity instruments are generally
required to be recorded at the redemption amount with changes
recognized in income. For level 2 and level 3, the fair value is mainly
determined using net asset value techniques.
Significant transfers of financial instruments
carried at fair value
In general, financial assets and liabilities are transferred from level 1
to level 2 when liquidity, trade frequency and activity are no longer
indicative of an active market. Conversely, the same policy applies for
transfers from level 2 to level 1.
212
firm commitments included in other liabilities
Financial liabilities for unit-linked contracts are valued based on
their corresponding assets.
For level 2, the fair value is determined using the market or the
income approach. For the income approach, primary observable
inputs include yield curves observable at commonly quoted intervals.
For level 3, the fair value is mainly determined based on the net
asset value.
Financial assets for unit-linked contracts
211
Available-for-sale investments
Available-for-sale investments - Debt securities
Debt securities include:
-
Government and agency mortgage-backed securities
(residential and commercial),
Corporate mortgage-backed securities
(residential and commercial),
Other asset-backed securities,
Government and government agency bonds,
Corporate bonds, and
Other debt securities.
The valuation techniques for these debt securities are similar. For
level 2 and level 3, the fair value is determined using the market and
the income approach. Primary inputs for the market approach are
quoted prices for identical or comparable assets in active markets
where the comparability between security and benchmark defines
the fair value level. The income approach in most cases means that
a present value technique is applied where either the cash flow or the
discount curve is adjusted to reflect credit risk and liquidity risk.
Depending on the observability of these risk parameters in the market,
the security is classified as level 2 or level 3.
Available-for-sale investments - Equity securities
For level 2, the fair value is mainly determined using the market
approach or net asset value techniques for funds. For certain private
equity investments, the funds are priced based on transaction prices
using the cost approach. As there are only few holders of these funds,
the market is not liquid and transactions are only known to partici-
pants.
For level 3, the fair value is mainly determined using net asset
values. The net asset values are based on the fair value measurement
of the underlying investments and are mainly provided by fund man-
agers. For certain level 3 equity securities, the capital invested is con-
sidered to be a reasonable proxy for the fair value.
For level 2, the fair value is determined using the market approach.
For level 3, equity securities mainly represent unlisted equity securi-
ties measured at cost.
2,214
Financial liabilities held for trading
566,830
5,875
Available-for-sale investments
Government and agency mortgage-backed securities (residential and commercial)
Corporate mortgage-backed securities (residential and commercial)
43
3,695
3,738
167
14,146
14,186
Other asset-backed securities
259
4,075
218
4,552
40
2,810
2,897
Subtotal
Debt securities
887
981
19
1,887
Equity securities
1,624
38
110
1,773
Subtotal
2,512
1,018
129
3,660
Government and government agency bonds
FINANCIAL LIABILITIES
29,810
39
13,704
465,914
Financial assets for unit-linked contracts
91,885
2,511
166
375,862
94,564
2
476
477
171,131
381,659
14,037
Derivative financial instruments and firm commitments included in other assets
Total
76,347
37,171
6,226
192,016
Corporate bonds
15,885
188,946
6,452
211,284
Other debt securities
Equity securities
Subtotal
273
1,966
729
2,968
30,077
868
162,166
148
220,367
489
Financial assets carried at fair value through income
FINANCIAL ASSETS
31
RECONCILIATION OF LEVEL 3 FINANCIAL ASSETS
The following tables show reconciliations of the financial instruments
carried at fair value and classified as level 3.
Reconciliation of level 3 financial instruments
Financial assets held for trading
213
1-Presentation not meaningful. Mortality assumptions are mainly derived from the Annuity 2000 Mortality Table.
n/a¹
n/a
0.5%-35%
Surrenders
Mortality
2,343 Discounted cash flow method
0%-50%
Annual Report 2015 Allianz Group
Withdrawal benefit election
Volatility
Carrying value
(fair value) as of
1 January 2015
Net transfers
into (out of) level 3
(209)
24
38
Subtotal
(201)
24
Additions through
purchases and issues
22
(8)
15
Equity securities
Debt securities
sales and settlements
Disposals through
Derivative financial instruments
n/a1
Mortality
0%-25%
0%-25%
Equity securities
Available-for-sale investments
Description
€ MN
QUANTITATIVE DESCRIPTION OF VALUATION TECHNIQUE(S) AND NON-MARKET OBSERVABLE INPUT(S) USED
Quantification of significant non-market observable inputs
The following table shows the quantitative description of the valua-
tion technique(s) and input(s) used for the level 3 portfolios described
above.
Corporate bonds
Financial liabilities held for trading mainly include embedded
derivative financial instruments relating to annuity products that are
priced internally using discounted cash flow models (€ 7.9 BN). A sig-
nificant decrease (increase) in surrender rates, in mortality rates or
in the utilization of annuitization benefits could result in a higher
(lower) fair value. For products with a high death benefit, surrender
rates may show an opposite effect. However, a 10% stress of the main
non-market observable inputs has only immaterial impact on fair
value.
Available-for-sale investments - Corporate bonds
Corporate bonds within available-for-sale investments classified as
level 3 are mainly priced based on the income approach (€ 6.1 BN).
The primary non-market observable input used in the discounted
cash flow method is an option-adjusted spread taken from a bench-
mark security. A significant yield increase of the benchmark securities
in isolation could result in a decreased fair value, while a significant
yield decrease could result in an increased fair value. However, a 10%
stress of the main non-market observable inputs has only immaterial
impact on fair value.
Available-for-sale investments - Equity securities
Equity securities within available-for-sale investments classified as
level 3 mainly comprise private equity fund investments as well as
alternative investments of the Allianz Group, and in most cases are
delivered as net asset values by the fund managers (€ 5.7 BN). The net
asset values are calculated using material, non-public information
about the respective private equity companies. The Allianz Group has
only limited insight into the specific inputs used by the fund man-
agers and hence a narrative sensitivity analysis is not applicable. The
fund's asset manager generally prices the underlying single portfolio
companies in line with the International Private Equity and Venture
Capital Valuation (IPEV) guidelines using discounted cash flow
(income approach) or multiple methods (market approach). For
certain investments, the capital invested is considered to be a rea-
sonable proxy for the fair value. In these cases, sensitivity analyses
are also not applicable.
Significant level 3 portfolios - Narrative description
and sensitivity analysis
139 Consolidated Statements of Cash Flows
141 Notes
138 Consolidated Statements of
Changes in Equity
137 Consolidated Statements of
Comprehensive Income
Financial liabilities held for trading
Financial liabilities held for trading
Derivative financial instruments
Fixed-indexed annuities
Variable annuities
Annuitizations
Surrenders
5,526 Discounted cash flow method
7,869
40 bps-1,415 bps
Option-adjusted spread
Discounted cash flow method
6,076
n/a
n/a
Net asset value
5,719
Range
Non-market
observable input(s)
31 December 2015 Valuation technique(s)
Fair value as of
Financial assets designated at fair value through income
136 Consolidated Income Statements
Debt securities
18
164
5,907
14,037
(10)
1
5
(2,311)
166
162
5,859
13,704
(1,224)
1,405
6,226
(2,080)
Total financial assets at fair value
RECONCILIATION OF LEVEL 3 FINANCIAL LIABILITIES
FINANCIAL LIABILITIES
1,851
7,129
166
Disposals
through sales and
settlements
Net transfers
into (out of) level 3
Additions through
purchases and issues
1 January 2015
€ MN
Carrying value
(fair value) as of
214
Total financial liabilities at fair value
Financial liabilities for puttable equity instruments
Financial liabilities for unit-linked contracts
Derivative financial instruments
Financial liabilities held for trading
Annual Report 2015 Allianz Group
Financial assets for unit-linked contracts
Subtotal
Equity securities
171
40
Corporate mortgage-backed securities (residential and commercial)
Available-for-sale investments
(12)
1
(139)
19
Subtotal
1
110
Equity securities
(12)
1
129
Other asset-backed securities
218
84
(57)
773
729
Other debt securities
(547)
(10)
3,582
6,452
Corporate bonds
(12)
1
16
39
Government and government agency bonds
(102)
19
135 Consolidated Balance Sheets
€ MN
Annual Report 2015 Allianz Group
105,873
105,873
94,564
Derivative financial instruments and firm commitments included in other liabilities
Financial liabilities for puttable equity instruments
472
472
Financial liabilities for unit-linked contracts
281
2,585
2,585
1,793
1,793
Certificated liabilities
Subordinated liabilities
281
23,607
23,015
25,563
94,564
94,564
Derivative financial instruments and firm commitments included in other assets
565
565
477
477
FINANCIAL LIABILITIES
Financial liabilities held for trading
9,207
9,207
8,496
8,496
Liabilities to banks and customers
25,531
8,383
105,873
9,208
9,293
Financial assets held for trading
Debt securities
Equity securities
Derivative financial instruments
Subtotal
Financial assets designated at fair value through income
Financial assets carried at fair value through income
Debt securities
Quoted prices in
active markets
Level 2 -
Market
observable inputs
Level 3 -
Non-market
observable inputs
Total
101
387
Level 1 -
FINANCIAL ASSETS
€ MN
FAIR VALUE HIERARCHY AS OF 31 DECEMBER 2015 (ITEMS CARRIED AT FAIR VALUE)
12,258
13,100
12,037
13,253
As of 31 December 2015, fair values could not be reliably measured for
equity investments with carrying amounts totaling € 216 MN
(31 December 2014: € 189 MN). These investments are primarily
investments in privately held corporations and partnerships. During
the year ended 31 December 2015, such investments with carrying
amounts of € 62 MN (2014: € 78 MN) were sold. The gains and losses
from these disposals were immaterial.
FAIR VALUE MEASUREMENT ON A RECURRING BASIS
The following financial assets and liabilities are carried at fair value
on a recurring basis:
-
Financial assets and liabilities held for trading,
Financial assets and liabilities designated at fair value through
income,
Available-for-sale investments,
Financial assets and liabilities for unit-linked contracts,
Derivative financial instruments and firm commitments included
in other assets and other liabilities, and
Financial liabilities for puttable equity instruments.
D- Consolidated Financial Statements
209
The following tables present the fair value hierarchy for financial
instruments carried at fair value in the consolidated balance sheets
as of 31 December 2015 and 2014.
8,207
105,873
94,564
140,238
FAIR VALUES AND CARRYING AMOUNTS OF FINANCIAL INSTRUMENTS
€ MN
as of 31 December
2015
2014
Carrying amount
The following table compares the carrying amount with the fair value
of the Allianz Group's financial assets and financial liabilities:
Fair value
Fair value
FINANCIAL ASSETS
Cash and cash equivalents
Financial assets held for trading
Financial assets designated at fair value through income
Available-for-sale investments
Carrying amount
FAIR VALUES AND CARRYING AMOUNTS
Liquidity risk.
Quantifiable risks, including all subsections other than Business
risk and Operational risk,
135 Consolidated Balance Sheets
136 Consolidated Income Statements
137 Consolidated Statements of
Comprehensive Income
138 Consolidated Statements of
Changes in Equity
139 Consolidated Statements of Cash Flows
141 Notes
44 Financial instruments
-
and fair value measurement
Certain risk disclosure requirements of IFRS 7 are reflected in the
following sections within the Risk and Opportunity Report in the
Group Management Report:
Financial assets for unit-linked contracts
-
Internal risk capital model including all subsections,
Limitations,
-
-
Risk profile and risk management,
14,842
14,842
-
13,863
Investments in associates and joint ventures
5,056
6,207
4,059
4,820
Real estate held for investment
4,710
11,977
11,349
Loans and advances to banks and customers
117,630
136,397
117,075
13,863
17,810
3,969
16,323
2,745
3,165
2,258
2,214
2,258
5,010
5,010
3,660
2,214
488,365
488,365
465,914
465,914
3,660
Held-to-maturity investments
ASSUMPTIONS OF AEI PLANS
The following table provides the assumptions used in calculating
the fair value of the RSUs at grant date:
The RSUS are virtual stocks without dividend payments and a
capped payout. The fair value is calculated by subtracting the net
present value of expected future dividend payments until maturity as
well as the fair value of the cap from the prevailing share price as of
the valuation date. The cap is valued as a European short call option,
using prevailing market data as of the valuation date.
In addition, upon the death of a plan participant, a change of
control or notice for operational reasons, the RSUS vest immediately
and will be exercised by the company.
Since the 2011 grant year, the Allianz Equity Incentive plan (AEI plan)
has replaced the GEI plans. The AEI plan is granted in the form of
restricted stock units (RSUS) and is part of a new variable compensa-
tion component for the plan beneficiaries.
The RSU granted to a plan participant obligate the Allianz Group
to pay in cash the average closing price of an Allianz SE share on the
last day of the vesting period and the prior nine trading days, or to
convert one RSU into one Allianz SE share. The payout is capped at a
200% share price growth above the grant price.
ALLIANZ EQUITY INCENTIVE PLAN
The RSUs are virtual stocks without dividend payments. The fair
value is calculated by subtracting the net present value of expected
future dividend payments until maturity of the RSUS from the prevail-
ing share price as of the valuation date.
As of 31 December 2015, the Allianz Group recorded no provisions
anymore (2014: € 90 MN) as the last RSUS plan was exercised during
the year ended 31 December 2015.
The RSUS are accounted for as cash-settled plans as the Allianz
Group intends to settle in cash. Therefore, the Allianz Group accrues
the fair value of the RSUS as a compensation expense over the vesting
period. During the year ended 31 December 2015, the Allianz Group
recognized compensation expenses related to the non-vested RSUS of
€ 12 MN (2014: € 24 MN).
The RSUs are subject to a vesting period of four years and will be
released on the last day of the vesting period. The Allianz Group can
choose the settlement method for each unit.
20161
120.65
2014
Share price
143.90
154.50
Average dividend yield
Average interest rate
Expected volatility
%
5.4
4.6
In addition, upon the death of a plan participant, a change of
control or notice for operational reasons, the RSU vest immediately
and will be exercised by the company.
%
4.5
2015
The RSU granted to a plan participant obligate the Allianz Group to
pay in cash the average market price of an Allianz SE share in the ten
trading days preceding the vesting date or to issue one Allianz SE
share, or other equivalent equity instrument, for each unit granted.
The RSU vest after five years. The Allianz Group will exercise the RSUS
on the first stock exchange day after their vesting date. On the exer-
cise date, the Allianz Group can choose the settlement method for
each unit.
-
As of 31 December 2015, the Allianz Group recorded provisions
of € 26 MN (2014: € 54 MN) in other liabilities for the unexercised SARS.
(0.1)
Defined contribution plans are funded through independent pension
funds or similar organizations. Contributions fixed in advance (e.g.
based on salary) are paid to these institutions and the beneficiary's
right to benefits exists against the pension fund. The employer has
no obligation beyond payment of the contributions.
DEFINED CONTRIBUTION PLANS
For the year ending 31 December 2016, the Allianz Group expects to
contribute € 329 MN to its defined benefit plans and to pay € 289 MN
directly to participants in its defined benefit plans.
Contributions
During the year ended 31 December 2015, the Allianz Group re-
cognized expenses for defined contribution plans of € 242 MN (2014:
€ 224 MN). Additionally, the Allianz Group paid contributions for state
pension schemes of € 385 MN (2014: € 344 MN).
49-Share-based compensation plans
GROUP EQUITY INCENTIVE PLANS
The Group Equity Incentive plans (GEI plans) of the Allianz Group
help senior management, in particular the Board of Management,
focus on the long-term increase in the value of the Allianz Group.
Until 2010, the GEI plans included grants of stock appreciation rights
(SARS) and restricted stock units (RSUS). From the 2011 grant onwards,
the Allianz Equity Incentive plan (AEI plan) has replaced the GEI plans.
With the AEI Plan, only restricted stock units (RSUS) are granted to the
plan participants.
Stock appreciation rights
The SARS granted to a plan participant obligate the Allianz Group to
pay in cash the excess of the market price of an Allianz SE share over
the reference price on the exercise date for each right granted. The
excess is capped at 150% of the reference price. The reference price
represents the average of the closing prices of an Allianz SE share for
the ten trading days following the Financial Press Conference of
Allianz SE in the year of issue. SAR which were granted up to 2008 vest
after two years and expire after seven years. From the 2009 grant
onwards, SARS vest after four years and also expire after seven years.
Upon vesting, SARS may be exercised by the plan participant if the
following market conditions are attained:
Restricted stock units
During their contractual term, the market price of the Allianz SE
share has outperformed the Dow Jones EURO STOXX Price Index
at least once for a period of five consecutive trading days; and
226
Annual Report 2015 Allianz Group
D- Consolidated Financial Statements
135 Consolidated Balance Sheets
136 Consolidated Income Statements
137 Consolidated Statements of
Comprehensive Income
138 Consolidated Statements of
Changes in Equity
139 Consolidated Statements of Cash Flows
141 Notes
In addition, upon the death of a plan participant, a change of control,
or notice for operational reasons, the SARS vest immediately and will
be exercised by the company provided the above market conditions
have been attained.
Upon the expiration date, any unexercised SARS will be exercised
automatically if the above market conditions have been attained. The
SAR are forfeited if the plan participant ceases to be employed by the
Allianz Group or if the exercise conditions are not attained by the
expiration date.
The fair value of the SARS at grant date is measured using a Cox-
Ross-Rubinstein binomial tree option pricing model. Volatility was
derived from observed historical market prices. In the absence of
historical information regarding employee stock appreciation exer-
cise patterns, the expected life has been estimated to equal the term
to maturity of the SARS.
The SAR are accounted for as cash-settled plans by the Allianz
Group. Therefore, the Allianz Group accrues the fair value of the SARS
as a compensation expense over the vesting period. Upon vesting,
any changes in the fair value of the unexercised SARS are recognized
as a compensation expense. During the year ended 31 December
2015, the Allianz Group recognized compensation expenses related
to the unexercised SARS of € 18 MN (2014: € 7 MN).
the Allianz SE market price is in excess of the reference price by
at least 20% on the exercise date.
0.1
241,109
48,894
%
24.9
%
13.3
%
1.1
The number and weighted-average exercise price of the M-unit
options outstanding and exercisable are as follows:
RECONCILIATION OF OUTSTANDING M-UNIT OPTIONS
2015
2014
Number of
options
Weighted-
average
exercise
%
Weighted-
Number of
options
average
exercise
€
€
Outstanding as of 1 January
Granted
175,360
17,212.31
In addition to the plan assets of € 13.3 BN, the Allianz Group has
dedicated assets at Group level amounting to € 5.9 BN as of 31 December
2015, which are likewise managed according to Allianz ALM standards.
Forfeited
Exercised
13,709.98
19,749.44
price
3.84
567.49
€
21.1
18.7
20.0
1- The RSUS 2016 are deemed to have been granted to participants as part of their 2015 remuneration.
Consequently, the assumptions for RSU grants delivered in March 2016 are based on best estimation.
The RSUs are accounted for as cash-settled plans as the Allianz Group
intends to settle in cash. Therefore, the Allianz Group accrues the fair
value of the RSUS as a compensation expense over the service period
of one year and afterwards over the vesting period. During the year
ended 31 December 2015, the Allianz Group recognized compensa-
tion expenses related to the AEI plans of € 238 MN (2014: € 160 MN).
As of 31 December 2015, the Allianz Group recorded provisions
of € 470 MN (2014: € 399 MN) for these RSUS in other liabilities.
Annual Report 2015 Allianz Group
227
SHARE-BASED COMPENSATION PLANS
OF SUBSIDIARIES OF THE ALLIANZ GROUP
PIMCO LLC Class B Unit Purchase Plan
When acquiring Allianz Global Investors of America L.P. (AllianzGIL.P.)
during the year ended 31 December 2000, Allianz SE caused Pacific
Investment Management Company LLC (PIMCO LLC), a subsidiary of
AllianzGI L.P., to enter into a Class B Purchase Plan (the "Class B Plan")
for the benefit of members of the management of PIMCO LLC. The plan
participants of the Class B Plan have rights to a 15% priority claim on
the adjusted operating profits of PIMCO LLC.
The Class B equity units issued under the Class B Plan vest over
3 to 5 years and are subject to repurchase by AllianzGI L.P. upon the
death, disability, or termination of the participant prior to vesting.
Starting 1 January 2005, AllianzGI L.P. has the right to repurchase, and
the participants have the right to cause AllianzGI L.P. to repurchase,
a portion of the vested Class B equity units each year. The call or put
right is exercisable no earlier than 6 months after the initial vesting
of each grant. On the repurchase date, the repurchase price will be
based on the determined value of the Class B equity units being
repurchased. As the Class B equity units are puttable by plan partici-
pants, the Class B Plan is accounted for as a cash-settled plan.
Therefore, the Allianz Group accrues the fair value of the Class B
equity units as a compensation expense over the vesting period.
Upon vesting, any changes in the fair value of the Class B equity units
are recognized as compensation expense. During the ended
year
31 December 2015, the Allianz Group recognized compensation
expenses related to the Class B equity units of € (12) MN (2014:
€ (10) MN). In addition, the Allianz Group recognized expenses related
to the priority claim on the adjusted operating profits of PIMCO LLC of
€ 1 MN (2014: € 3 MN). The plan participants put a total of 668 Class B
equity units during the year ended 31 December 2015. The total
amount paid related to the put of the Class B equity units was € 25 MN.
The total recognized compensation expenses for Class B equity
units that are outstanding are recorded as a liability in other liabili-
ties. As of 31 December 2015, the Allianz Group recorded a liability for
the Class B equity units of € 15 MN (2014: € 47 MN).
PIMCO LLC Class M-unit Plan
In 2008, AllianzGI L.P. launched a new management share-based pay-
ment incentive plan for certain senior level executives and affiliates
of PIMCO LLC. Participants in the plan are granted options to acquire
a new class of equity instruments (M-units), which vest in one-third
increments on approximately the third, fourth and fifth anniversary
of the option grant date. Upon vesting, options will automatically be
exercised in a cashless transaction, but only if they are in the money.
Participants may elect to defer the receipt of M-units through the
M-unit Deferral Plan until termination of their service at the latest.
With the M-unit Plan, participants can directly participate in PIMCO'S
performance. Class M-units are non-voting common equity with lim-
ited information rights. They bear quarterly distributions equal to a
pro-rata share of PIMCO's net distributable income. Deferred M-units
have a right to receive a quarterly cash compensation equal to and in
lieu of quarterly dividend payments.
A maximum of 250,000 M-units are authorized for issuance under
the M-unit Plan.
The fair value of the underlying M-unit options was measured
using the Black-Scholes option pricing model. Volatility was derived
in part by considering the average historical and implied volatility of
a selected group of peers. The expected life of one granted option was
calculated based on treating the three vesting tranches (one third in
years 3, 4, and 5) as three separate awards.
The following table provides the assumptions used in calculating
the fair value of the M-unit options at grant date:
ASSUMPTIONS OF CLASS M-UNIT PLAN
Weighted-average fair value of options granted
Assumptions:
Expected term (years)
Expected volatility
Expected dividend yield
Risk free rate of return
2015
2014
0.5
ments.
Change in effect of asset ceiling in excess of
interest
The bulk of the plan assets are held by the Allianz Versorgungskasse
VVaG, Munich, which is not part of the Allianz Group.
19
22,485
407
22,912
Private equity funds
5,685
5,685
Property funds
1,531
1,531
1- In 2015, € 2.2 BN were reclassified from RMBS to CMO/CDO.
Other funds
196
238
Total
Total
16,731
433
18,150
Annual Report 2015 - Allianz Group
219
Out of the total investment fund exposure, investments of € 10.1 BN
(2014: € 10.0 BN) relate to listed investment funds, whereas invest-
ments of € 9.2 BN (2014: € 8.1 BN) relate to unlisted investment funds.
As of the reporting date, the Allianz Group has receivables from
unconsolidated investment funds, which are mainly due in return for
asset management services, amounting to € 723 MN (2014: € 724 MN).
Furthermore, the Allianz Group has commitments to invest in private
equity funds and similar financial instruments totaling € 5,460 MN as
of 31 December 2015 (2014: € 4,388 MN).
The carrying amounts in the tables listed above correspond to an
aggregated amortized cost amount of € 16,196 MN (2014: € 15,205 MN).
This amortized cost amount represents the maximum exposure to
loss for the Allianz Group from these investments. In the reporting
period, the Allianz Group has not provided any financial or other sup-
port to these entities, nor does it have the intention to provide such
support in the future.
Besides the above-mentioned investments in investment funds,
the Allianz Group also holds investment funds to fund unit-linked
insurance contracts. However, these holdings are held on behalf and
for the benefit of unit-linked policyholders only. For that reason, these
holdings are not included in the above-mentioned table. As of
31 December 2015, the volume of unit-linked assets amounted to
€ 105,873 MN (2014: € 94,564 MN). The maximum exposure to loss on
these investments is covered by liabilities recorded for unit-linked
contracts.
Reinsurance business
As of 31 December 2015, the outstanding volume of catastrophe bond
linked to hurricane and earthquake risks sponsored by the Allianz
Group amounted to € 161 MN (2014: € 343 MN). The fair value of the
derivative between the Allianz Group and the structured entity issu-
ing the catastrophe bond amounted to € (1) MN (2014: € (4) MN).
46 Related party transactions
Information on the remuneration of Board members and transactions
with these persons can be found in the Remuneration Report, starting
on > page 37.
Transactions between Allianz SE and its subsidiaries that are to
be deemed related parties have been eliminated in the consolidation
and are not disclosed in the notes.
1,420
4,254
3,370
884
242
288
530
RMBS
2,435
215
2,649
Total
1,623
17,665
19,288
CMO/CDO
940
192
1,135
Auto
871
Stock funds
4,194
4,178
16
Other
6,248
Business relations with joint ventures and associates are set on
an arm's length basis.
5,908
Debt funds
270
270
Credit card
2014
871
340
Other funds
47 Litigation, guarantees and other
contingencies and commitments
Allianz Group companies are involved in legal, regulatory, and arbi-
tration proceedings in Germany and a number of foreign jurisdic-
tions, including the United States. Such proceedings arise in the ordi-
nary course of businesses, including, amongst others, their activities
as insurance, banking and asset management companies, employ-
ers, investors and taxpayers. It is not feasible to predict or determine
the ultimate outcome of the pending or threatened proceedings.
Management does not believe that the outcome of these proceedings,
including those discussed below, will have a material adverse effect
on the financial position and the results of operations of the Allianz
Group, after consideration of any applicable reserves.
Operating leases
FUTURE MINIMUM LEASE PAYMENTS - OPERATING LEASES
€ MN
Due in 1 year or less
Due after 1 year and up to 5 years
Due after 5 years
Subtotal
Subleases
Total
2015
332
1,141
1,397
2,871
As of 31 December 2015, the future minimum lease payments
under non-cancelable operating and finance leases were as follows:
(307)
Annual Report 2015 Allianz Group
221
For the year ended 31 December 2015, rental expenses totaled
€ 347 MN (2014: € 322 MN), net of sublease rental income received of
€ 5 MN.
Finance lease
FUTURE MINIMUM LEASE PAYMENTS - FINANCE LEASE
€ MN
Due in 1 year or less
Due after 1 year and up to 5 years
Due after 5 years
Total
2015
Gross amount
1
21
2,565
The Allianz Group occupies property in many locations under various
long-term operating leases as well as one long-term finance lease
and has entered into various operating leases covering the long-term
use of data processing equipment and other office equipment.
Leasing commitments
The Allianz Group engages in various lending commitments to meet
the financing needs of its customers. They consist of advances, stand-
by facilities, guarantee credits, mortgage loans and public-sector
loans. As of 31 December 2015, the total of loan commitments
amounts to € 1,045 MN (2014: € 953 MN) and represents the amounts
at risk should customers draw fully on all facilities and then default,
excluding the effect of any collateral. Since the majority of these com-
mitments may expire without being drawn upon, these loan commit-
ments are not representative of actual liquidity requirements for
such commitments.
On 24 May 2002, pursuant to a statutory squeeze-out procedure,
the general meeting of Dresdner Bank AG resolved to transfer shares
from its minority shareholders to Allianz as principal shareholder in
return for payment of a cash settlement amounting to € 51.50 per
share. Allianz established the amount of the cash settlement on the
basis of an expert opinion, and its adequacy was confirmed by a court-
appointed auditor. Some of the former minority shareholders applied
for a court review of the appropriate amount of the cash settlement
in a mediation procedure (“Spruchverfahren”). In September 2013,
the district court ("Landgericht”) of Frankfurt dismissed the minor-
ity shareholders' claims in their entirety. This decision has been
appealed to the higher regional court (“Oberlandesgericht") of Frank-
furt. In the event that a final decision were to determine a higher
amount as an appropriate cash settlement, this would affect all of the
approximately 16 MN shares that were transferred to Allianz.
In September 2015, a putative class action complaint was filed
against Allianz Life Insurance Company of North America (Allianz
Life) in California, making allegations similar to those made in prior
class actions regarding the sale of Allianz Life's two-tier annuity pro-
ducts, including allegations of breach of contract and violation of
California unfair competition law. The ultimate outcome of the case
cannot yet be determined. In 2015, Allianz Life also settled a consoli-
dated matter, and another case was dismissed.
Pacific Investment Management Company LLC (PIMCO) and
Allianz Asset Management of America, L.P. (AAM US), have been named
as defendants in litigation in California brought by William H. Gross,
a former employee of PIMCO, in October 2015. Mr. Gross's complaint
alleges that, even though Mr. Gross resigned, he is entitled to addi-
tional profit sharing payments from PIMCO of at least USD 200 MN.
Allianz believes that this lawsuit is without merit. The ultimate out-
come of this matter cannot yet be determined.
220
Annual Report 2015 Allianz Group
D- Consolidated Financial Statements
135 Consolidated Balance Sheets
136 Consolidated Income Statements
137 Consolidated Statements of
Comprehensive Income
138 Consolidated Statements of
Changes in Equity
139 Consolidated Statements of Cash Flows
141 Notes
GUARANTEES AND OTHER CONTINGENCIES
Guarantees
The guarantees issued by the Allianz Group consist of financial
antees, indemnification contracts and performance contracts.
Financial guarantees
guar-
The majority of the Allianz Group's financial guarantees are issued to
customers through the normal course of banking business in return
for fee and commission income, which is generally determined based
on rates subject to the nominal amount of the guarantees and inher-
ent credit risks. Once a guarantee has been drawn upon, any amount
paid by the Allianz Group to third parties is treated as a loan to the
customer, and is, therefore, basically subject to the credit risk of the
customer or the collateral pledged, respectively.
Loan commitments
COMMITMENTS
Allianz and HT1 Funding GmbH have signed a Contingent
Indemnity Agreement in July 2006, pursuant to which Allianz may, in
certain circumstances, be obliged to make payments to HT1 Funding
GmbH. HT1 Funding GmbH issued nominal € 1,000 MN Tier 1 Capital
Securities with an annual coupon of 6.352% (as of 30 June 2017, the
coupon will be 12-month EURIBOR plus a margin of 2.0% p.a.). The con-
tingent payment obligation of the Allianz Group was reduced in 2012
following a reduction of the nominal amount of the Tier 1 Capital
Securities from € 1,000 MN to € 416 MN. The securities have no sched-
uled maturity and the security holders have no right to call for their
redemption. The securities may be redeemed at the option of the
issuer on 30 June 2017, and thereafter. The Allianz Group expects not
to be obliged to make a payment in the foreseeable future; however, it
is not possible for the Allianz Group to predict the ultimate potential
payment obligations at this point in time.
by reason of supporting measures taken in favor of Oldenburgische
Landesbank AG (OLB) and Münsterländische Bank Thie & Co. KG.
In accordance with § 5 (10) of the Statutes of the Joint Fund for Secur-
ing Customer Deposits ("Einlagensicherungsfonds"), Allianz SE has
undertaken to indemnify the Federal Association of German Banks
("Bundesverband deutscher Banken e.V.") for any losses it may incur
Other contingencies
LITIGATION
As of 31 December 2015, the performance guarantees amount to
€ 31 MN (2014: € 43 MN), € 19 MN of which are due within one year. The
collateral held amounts to € 31 MN (2014: € 55 MN).
Performance guarantees
As of 31 December 2015, the indemnification contracts amount
to € 89 MN (2014: € 108 MN), which are almost entirely due after five
years. No collateral was held. Nearly all customers of the indemnifica-
tion contracts have an external credit rating of A.
In connection with the sale of various of the Allianz Group's for-
mer private equity investments, subsidiaries of the Allianz Group
provided indemnities to the respective buyers in the event that certain
contractual warranties arise. The terms of the indemnity contracts
cover ordinary contractual warranties, environmental costs, and a any
potential tax liabilities the entity incurred while owned by the Allianz
Group.
Indemnification contracts are executed by the Allianz Group with
various counterparties under existing service, lease or acquisition
transactions. Such contracts may also be used to indemnify counter-
parties under various contingencies, such as changes in laws and
regulations or litigation claims.
Indemnification contracts
As of 31 December 2015, the financial guarantees amount to
€ 454 MN (2014: € 434 MN), € 393 MN of which are due within one year.
The collateral held amounts to € 57 MN (2014: € 49 MN). Nearly all cus-
tomers of the letters of credit have no external credit rating.
Performance guarantees are given by the Allianz Group to ensure
third-party entitlements if certain performance obligations of the
guarantee recipient are not fulfilled.
1,071
10,347
2,633
16,000
2,796
161
2,957
1,723
1,723
558
558
328
4
335
14
28
44
16,000
4
193
21,616
13
17,253
17,266
2,301
112
2,413
A
1
1,917
103
2,021
BBB
21,419
Total
Loans and
advances to
banks and
customers
Investments
D- Consolidated Financial Statements
135 Consolidated Balance Sheets
136 Consolidated Income Statements
137 Consolidated Statements of
Comprehensive Income
138 Consolidated Statements of
Changes in Equity
139 Consolidated Statements of Cash Flows
141 Notes
Reinsurance business
The Allianz Group also uses structured entities in the reinsurance
business, where hurricane and earthquake risks are sourced to exter-
nal investors via the issuance of catastrophe bonds issued by bank-
ruptcy-remote structured entities. The performance of the issued
bonds is linked to the occurrence or non-occurrence of specific catas-
trophe events. The cash received from the issued bonds is invested
into low-risk structured notes. In parallel, the structured entities
enter into derivative contracts with the Allianz Group under which
the underlying risks are transferred from the Allianz Group to the
structured entities. Thus, the Allianz Group transfers exposure to
variable returns into the structured entities instead of exposing itself
to them. Since the Allianz Group is not exposed to the variable returns
of these entities, they are not consolidated within the consolidated
financial statements of the Allianz Group.
Income derived from the involvement in these structured entities
is only driven by the valuation of the derivatives under which insur-
ance risks are transferred. According to the purpose those derivatives
are held to maturity. They are treated as freestanding derivatives and
are thus measured at fair value through profit or loss.
NATURE OF RISKS ASSOCIATED WITH
UNCONSOLIDATED STRUCTURED ENTITIES
Interests in asset-backed securities (ABS) and mortgage-
backed securities (MBS) issued by securitization vehicles
CARRYING AMOUNTS OF ABS AND MBS INVESTMENTS BY TYPE OF CATEGORY
€ MN
Financial
assets carried
at fair value
through
income
Investments
Financial
assets carried
at fair value
through
income
АА
AAA
2014
Non-investment grade
Not rated
Total
BBB
695
A
2015
as of 31 December
€ MN
CARRYING AMOUNTS OF ABS AND MBS INVESTMENTS BY RATING
Total
Loans and
advances to
banks and
customers
AAA
AA
2,633
695
3
284
as of 31 December
income Investments
Total
Other
4,096
28
Total
21,419
193
4,126
21,616
2015
Debt funds
499
284
5,399
Stock funds
881
2,984
3,865
2014
Private equity funds
6,360
6,361
U.S. agency
3,445
3,445
CMBS
10,347
Property funds
5,898
Credit card
through
Financial
assets carried
at fair value
309
164
476
Not rated
Total
1
11
28
40
19
22,485
407
22,912
The carrying amounts in the tables listed above correspond to an
aggregated amortized cost amount of € 21,244 MN (2014: € 21,981 MN).
This amortized cost amount represents the maximum exposure to
loss for the Allianz Group from these investments. In the reporting
period, the Allianz Group has not provided any financial or other sup-
port to these entities, nor does it have the intention to provide such
support in the future.
Investments in investment funds
as of 31 December
2015
U.S. agency
468
468
Auto
3,721
165
3,554
Non-investment grade
CMO/CDO¹
9,433
CMBS
€ MN
3,584
3,584
INVESTMENTS IN INVESTMENT FUNDS BY ASSET CLASS
9,433
1,093
Present value
1
2.4
2.2
2.1
2.1
1.8
1.8
1.0
2.6
Benefits paid4
(413)
(381)
Changes in the consolidated subsidiaries
of the Allianz Group5
(178)
2014
(4)
(1)
Assets distributed on settlement
Fair value of plan assets as of 31 December
(229)
13,333
(31)
13,123
CHANGE IN EFFECT OF ASSET CEILING7
Effect of asset ceiling as of 1 January
63
58
Interest expenses on effect of asset ceiling
1
1
price
2
Divestitures
2015
Rate of medical cost trend
177
As of 31 December 2015, post-retirement health benefits included in
the defined benefit obligation and in the net amount recognized
amounted to € 11 MN (2014: € 13 MN) and € 11 MN (2014: € 13 MN), respec-
tively.
During the year ended 31 December 2015, the defined benefit
costs related to post-retirement health benefits amounted to € 1 MN
(2014: € - MN).
Assumptions
The assumptions for the actuarial computation of the defined benefit
obligation and the recognized expense depend on the circumstances
in the particular country where the plan has been established.
The calculations are based on current actuarially calculated
mortality tables, projected turnover depending on age and length of
service and internal Allianz Group retirement projections. Although
this represents the best estimate as of today, considering a further
increase in life expectancy could be reasonable. The weighted aver-
age life expectancy of a currently 65-year-old plan participant is
about 89.1 years for women and 86.6 years for men. An increase in life
expectancy by one year would lead to an increase of the defined ben-
efit obligation by € 717 MN.
The weighted average values of the assumptions for the Allianz
Group's defined benefit plans used to determine the defined benefit
obligation and the recognized expense are as follows:
CHANGE IN FAIR VALUE OF PLAN ASSETS
ASSUMPTIONS FOR DEFINED BENEFIT PLANS
Fair value of plan assets as of 1 January
13,123
11,668
%
Interest income on plan assets
302
411
as of 31 December
Return on plan assets greater/(less) than interest
272
Foreign currency translation adjustments
Rate of pension increase
107
111
Plan participants' contributions
Foreign currency translation adjustments
Rate of compensation increase
316
Employer contributions
Discount rate
860
28
income on plan assets
317
197
Effect of asset ceiling as of 31 December
1
Non-quoted
Debt securities
54.5
53.5
Quoted
Non-quoted
Real estate
5.0
4.7
5,089
2,049
632
Annuity contracts
21.8
22.4
2,980
1,955
4,816
2,125
654
2,697
products
5.5
5.5
728
691
Other
1.3
1.4
190
Total
100.0
100.0
13,333
185
13,123
Life insurance investment
1,665
Quoted
12.5
63
1- For 2015, these include € 204 MN for the deconsolidated subsidiary Selecta.
2- These include a settlement payment of € 121 MN in South Korea for a plan change into a defined contribu-
tion pension plan in 2014 and € 225 MN for the plan restructuring in the U.K. in 2015.
3-As of 31 December 2015, € 7,857 MN (2014: € 8,271 MN) of the defined benefit obligation are wholly
unfunded, while € 14,470 MN (2014: € 14,496 MN) are wholly or partly funded.
4- In addition, the Allianz Group has paid € 287 MN (2014: € 306 MN) directly to plan participants.
5- For 2015, these include € 183 MN for the deconsolidated subsidiary Selecta.
6- These include € 225 MN for the plan restructuring in the U.K. in 2015.
7- The asset ceiling is determined by taking the reduction of future contributions into account.
The recognized expense is recorded based on the assumptions of the
corresponding previous year.
The discount rate assumption is the most significant risk for the
defined benefit obligation. It reflects market yields at the balance
sheet date of high-quality fixed income investments corresponding
to the currency and duration of the liabilities. In the Eurozone, the
decision for the discount rate is based on AA-rated financial and cor-
porate bonds, provided by Allianz Investment Data Services (IDS), and
a standardized cash flow profile for a mixed population. The Internal
Controls Over Financial Reporting (ICOFR) certified Allianz Global
Risk Parameters (GRIPS) methodology is an internal development of
the Nelson-Siegel model and consistently used by Group Risk, Group
Audit, AIM and PIMCO.
The range for the sensitivity calculations was derived by analyz-
ing the average volatility over a five-year period.
Annual Report 2015 Allianz Group
225
An increase (or decrease) in the discount rate by 50 basis points
would lead to a decrease of € 1.5 BN (or increase of € 1.8 BN) in the
defined benefit obligation.
An increase of pre-retirement benefit assumptions (e.g. salary
increase) of 25 basis points would have an effect of € 67 MN on the
defined benefit obligation. However, the increase of post-retirement
assumptions (e.g. inflation-linked increases of pension payments) of
25 basis points would affect the defined benefit obligation by € 498 MN.
A change in the medical cost trend rate by 100 basis points would
have an effect of € 1 MN on the defined benefit obligation and no mate-
rial effect on the defined benefit costs.
Plan Assets/Asset Liability Management (ALM)
Based on the estimated future cash flows of € 715 MN for 2016, € 746 MN
for 2017, € 769 MN for 2018, € 801 MN for 2019, € 808 MN for 2020 and
€ 4,475 MN for 2021-2025, the weighted duration of the defined benefit
obligation is 17.6 years. The Allianz Group uses, based on the liability
profiles of the defined benefit obligation and on the regulatory fund-
ing requirements, stochastic asset liability models to optimize the
asset allocation from a risk-return perspective.
Due to a well-diversified portfolio of 136,000 plan participants,
there is no reasonable uncertainty of future cash flows expected that
could have an impact on the liquidity of the Allianz Group.
11.9
Equity securities
€ MN
€ MN
%
%
5
67
as of 31 December
Real
allocation
2015
Real
allocation
Target
allocation
Real
ASSET ALLOCATION OF PLAN ASSETS
The target allocation for the plan assets compares to the current
asset allocation as follows:
allocation
2014
(4)
(111)
3,227
Employees generally have a choice between lump sum pay-
ments and annuities, with some vehicles providing only annuities.
The period in which a retirement benefit can be drawn is usually
between age 60 and age 67. Disability benefits are granted prior to
retirement in the event of an occurrence of a qualifying disability.
In the case of death, surviving dependents normally receive 60%
(widow/widower) and 20% (per child) of the original employee's pen-
sion, in total not to exceed 100%. In My Allianz Pension the surviving
dependents gain the accrued capital.
Additionally, the Allianz Group offers a deferred compensation
program, Pensionszusage durch Entgeltumwandlung (PZE), for active
employees. Within some boundaries they convert at their discretion
parts of their gross income and receive in exchange a pension com-
mitment of equal value. PZES almost qualify as defined contribution
plans with minor risk exposure.
Annual Report 2015 Allianz Group
223
United Kingdom
The U.K. accounts for 7.6% of the Allianz Group's defined benefit obli-
gation and 11.7% of the Allianz Group's plan assets. The discount rate
used to calculate the defined benefit obligation at year-end was 3.9%
p.a. for pension plans.
The U.K. operates a funded pension scheme, the Allianz Retire-
ment and Death Benefits Fund. The trustee board is required by law
to act in the best interests of members and is responsible for setting
certain policies (e.g. investment and contribution policies) of the
principal U.K. scheme.
The fund has a defined benefit pension section and a defined
contribution section. The defined contribution section was estab-
lished on 1 April 2001, from which date the defined benefit section
was closed to new entrants. From 1 July 2015, the fund closed to future
accrual and no more defined benefit benefits will be accrued beyond
that date. A new Group Personal Pension Plan (GPPP), outside of the
Allianz Retirement and Death Benefits Fund, was established in 2015.
All future accrual of benefits will be via the GPPP and all defined con-
tribution section benefits will be transferred into the GPPP, leaving
only a defined benefit section of the Allianz Retirement and Death
Benefits Fund, in respect of benefits built up before 1 July 2015.
The defined benefit section provides pension increases broadly
linked to Retail Prices Index (RPI) inflation. The assets of this section
were significantly de-risked over 2015, moving a large allocation from
equities to bonds.
Since 1 July 2015, contributions to the fund are made only by the
employer in respect of the deficit in the defined benefit section of the
fund.
Switzerland
Switzerland accounts for 5.9% of the Allianz Group's defined benefit
obligation and 10.1% of the Allianz Group's plan assets. The discount
rate used to calculate the defined benefit obligation at year-end was
1.0% p.a. for pension plans.
There are obligatory corporate pension plans in Switzerland,
eligible for all employees. The plans are wholly funded through legal-
ly separate trustee-administered pension funds, with the trustee
board being responsible for the investment of the assets and risk
management. The plans are contribution-based and cover the risks
of longevity, disability and death. Employees contribute only a small
amount whereas the employer contributes for the complete risk cov-
erage and a large part of the savings components. The interest rate is
decided annually by the board of the pension funds. For the manda-
tory part, the minimum interest rate is regulated by law and reviewed
annually (1.75% in 2015, 1.25% in 2016). At retirement, beneficiaries
can choose between a lump sum payment, an annuity or a combina-
tion of both where the part which is not granted as a lump sum is
converted to a fixed annuity according to the rules of the pension
fund, taking into account legal requirements.
For the AVK the annual minimum interest rate guaranteed is
1.75%-3.50%, depending on the date of joining the Allianz Group, and
for the closed part of the contribution-based pension plan it is 2.75%.
Pension increases apart from AVK are guaranteed at least with 1% p.a.
Depending on legal requirements, some pension increases are linked
to inflation. In AVK the complete surplus share of the retirees is used
to increase their pension.
If employees contract out of the Allianz Suisse pension plan, they
have to take their vested pension capital ("Freizügigkeitsleistung") to
the next employer, which implies a small liquidity risk.
Amounts recognized in the Allianz Group's consolidated balance
sheet for defined benefit plans are as follows:
RECONCILIATION OF DEFINED BENEFIT PLANS ON THE BALANCE SHEET
€ MN
2015
2014
Net amount recognized as of 1 January
Changes in the consolidated subsidiaries
of the Allianz Group¹
9,707
7,500
(23)
(3)
Foreign currency translation adjustments
Recognized expenses²
9
21
686
DEFINED BENEFIT PLANS
The assets of the contribution-based pension plans are allocated
to a trust (Methusalem Trust e.V.) and managed by a board of trustees.
There is also a partly funded defined benefit pension plan for
agents (VertreterVersorgungsWerk, vvw), which has been closed for
new entrants as of 31 December 2011. A part of the pension plan serves
as a replacement for the compensatory claim of agents according to
German Commercial Code (§ 89b). VVW is close to a final salary ben-
efit and pension increases are broadly linked to inflation. This pension
plan was de-risked in 2015 as 40% of the active tied agents accepted
an attractive offer to opt for a lump sum payment instead of annuities
at retirement.
Since 1 January 2015 Allianz Group contributes for new entrants
and for the majority of the contribution-based pension plan benefi-
ciaries to a new low risk pension plan, My Allianz Pension, where only
the contributions are preserved.
Additionally, for salary above the German social security ceiling,
the Allianz Group contributes to contribution-based pension plans.
The Allianz Group decides each year whether and to which extent a
budget for the contribution-based pension plans is provided. Inde-
pendently from this decision, an additional risk premium is paid to
cover death and disability. Generally the accruals of the contribution-
based pension plans are wholly funded, whereas the grandfathered
plans are funded to a minor extent. On retirement, the accumulated
capital is paid as a lump sum or converted to a lifetime annuity.
21
181
203
As of 31 December 2015, the net carrying amount of the finance lease
obligation, which is included in other liabilities, amounted to
€ 111 MN. Gross minimum lease payments were reduced by imputed
interest in the amount of € 890 MN to receive the present value of
minimum lease payments. The underlying contract expires as of
31 December 2111.
Purchase obligations
The Allianz Group has commitments for mortgage loans and to buy
multi-tranche loans of € 4,133 MN (2014: € 3,388 MN) as well as to invest
in private equity funds and similar financial instruments totaling
€ 5,460 MN (2014: € 4,388 MN) as of 31 December 2015. As of 31 Decem-
ber 2015, commitments outstanding to invest in real estate used by
third parties or used by the Allianz Group for its own activities and for
infrastructure investments amount to € 1,958 MN (2014: € 1,209 MN).
In addition, as of 31 December 2015, the Allianz Group has other
purchase obligations of € 2,762 MN (2014: € 743 MN) mainly referring
to maintenance, IT-services, sponsoring and other obligations.
Other commitments
Within the Allianz Group several entities are obliged to make contri-
butions to an industry-specific compensation scheme. The most
important ones are the following:
Pursuant to §§ 221 ff. of the German Insurance Supervision Act in
its version applicable as from 1 January 2016 ("Versicherungsaufsichts-
gesetz" - VAG), a mandatory insurance guarantee scheme ("Sicher-
ungsfonds") for life insurers is implemented in Germany. Each mem-
ber of the scheme is obliged to make annual contributions to the
scheme as well as special payments under certain circumstances. The
exact amount of obligations for each member is calculated according
to the provisions of a Federal Regulation ("Sicherungsfonds-Finan-
zierungs-Verordnung (Leben)" – SichLVFinV). As of 31 December 2015,
the future liabilities of Allianz Lebensversicherungs-Aktiengesell-
schaft and its subsidiaries to the insurance guarantee scheme pursu-
ant to the SichLVFinV amount to annual contributions of € 11.9 MN
(2014: € 10.3 MN) and an obligation for special payments of, in prin-
ciple, € 157 MN (2014: € 157 MN) per year.
In accordance with §§ 221 ff. of the German Insurance Super-
vision Act, Allianz Private Krankenversicherungs-AG is a member of
the mandatory insurance guarantee scheme (Sicherungsfonds) for
German health insurers. In case the guarantee scheme has to resume
responsibility for insurance contracts, it will collect special payments
from its members to fulfill its tasks. Up until the reporting date, no
contributions have been requested by the scheme. As of 31 December
2015, the potential liabilities of Allianz Private Krankenversicherungs-
AG to the insurance guarantee scheme amount to an obligation for
special payments of € 52 MN (2014: € 51 MN).
In December 2002, Protektor Lebensversicherungs-Aktiengesell-
schaft (“Protektor”), a life insurance company whose role is to protect
policyholders of all German life insurers, was founded. Allianz
Lebensversicherungs-Aktiengesellschaft and some of its subsidiaries
are obligated to provide additional funds either to the mandatory
insurance guarantee scheme or to Protektor, in the event that the
funds provided to the mandatory insurance guarantee scheme are
not sufficient to handle an insolvency case. Such obligation is based
on a maximum of 1% of the sum of the net underwriting reserves with
deduction of payments already provided to the insurance guarantee
scheme. As of 31 December 2015, and under inclusion of the contribu-
tions to the mandatory insurance scheme mentioned above and
assuming that no other life insurer is exempted from payments, the
aggregate outstanding commitment of Allianz Lebensversicherungs-
Aktiengesellschaft and its subsidiaries to the insurance guarantee
scheme and to Protektor is € 1,424 MN (2014: € 1,420 MN).
According to the German Investor Compensation Act (AnlEntG
- “Anlegerentschädigungsgesetz”) all financial services institutions
and external capital management companies, as well as certain
credit institutions licensed to do business in Germany, must adhere
to a statutory compensation scheme. Allianz Global Investors GmbH,
PIMCO Deutschland GmbH and risklab GmbH are currently members
of EdW ("Entschädigungseinrichtung der Wertpapierhandelsunter-
nehmen", Berlin). The annual contribution is determined in consid-
eration of each member's scope of business. In addition, EdW may
levy special contributions from its members, if the funds available to
EdW are insufficient to satisfy all eligible claims. Special contributions
are determined by reference to the preceding yearly contribution. For
2015, the yearly contributions for above-mentioned entities have
been determined by notification from the EdW in the amount of € 5 MN
(2014: € 2 MN). With respect to the insolvency of Phoenix Kapitaldienst
GmbH, the German Federal Financial Supervisory Authority (“Bundes-
anstalt für Finanzdienstleistungsaufsicht" - BaFin) has determined
that certain investor claims will be covered under the compensation
scheme and special contributions have been levied. In this regard,
special contributions were notified by EdW to above-mentioned enti-
ties in 2015 in the amount of € 8 MN (2014: € 5 MN). The above-men-
tioned entities have appealed the special contributions. For received
but not yet paid notifications and for the estimated special contribu-
tion for 2016, adequate provisions have been accrued.
222
Annual Report 2015 - Allianz Group
D- Consolidated Financial Statements
Most active German employees participate in contribution-
based systems using different vehicles to cover the base salary both
below and above the German social security ceiling. The Allianz Ver-
sorgungskasse VVaG (AVK), financed through employee contribu-
tions, and the Allianz Pensionsverein e.V. (APV), financed by the
employer, provide pension benefits for the base salary up to the Ger-
man social security ceiling. Both plans are wholly funded along local
regulatory requirements and were closed for new entrants, effective
31 December 2014. AVK and APV are legally separate administered
pension funds with trustee boards being responsible for the invest-
ment of the assets and the risk management. AVK is subject to Ger-
man insurance regulation.
Germany accounts for 75.3% of the Allianz Group's defined benefit
obligation and 62.9% of the Allianz Group's plan assets. The discount
rate used to calculate the defined benefit obligation at year-end was
2.25% p.a. for pension plans, and in case of a shorter duration 2.0% p.a.
Germany
Pension plans in Germany, the U.K. and Switzerland are described
in more detail regarding key risks and regulatory environment, as
each of them contributes more than 5% to the Allianz Group's defined
benefit obligation or its plan assets.
In the Pension Task Force, the heads of Group HR, Group Account-
ing and Reporting, Group Treasury and Corporate Finance, Group
Planning and Controlling, Group Risk and AIM met four times to pro-
vide global governance and pre-align pension-related topics such as
risk management and Solvency II prior to relevant Group Committee
meetings.
Typically associated with defined benefit plans are biometric
risks like longevity, disability and death as well as economic risks like
interest rates, inflation and compensation increases. The Allianz
Group continued to mitigate the risk impact by applying the benefits
rule as part of the Allianz Standard for HR. Major de-risking actions
are described in detail in the sections for Germany and U.K. New plans
are primarily based on contributions and may include, in some cases,
guarantees such as the preservation of contributions or minimum
interest rates.
662
The Allianz Group provides competitive and cost effective retire-
ment and disability benefits using risk appropriate vehicles. The
plans may vary from country to country due to the different legal,
fiscal and economic environment.
OVERVIEW
48-Pensions and similar obligations
139 Consolidated Statements of Cash Flows
141 Notes
138 Consolidated Statements of
Changes in Equity
137 Consolidated Statements of
Comprehensive Income
135 Consolidated Balance Sheets
136 Consolidated Income Statements
Retirement benefits in the Allianz Group, which are granted to
employees and in Germany also to agents, are either in the form of
defined benefit or defined contribution plans. For defined benefit
plans, the beneficiary is granted a defined benefit by the employer or
via an external entity. In contrast to defined contribution arrange-
ments, the future cost to the employer of a defined benefit plan is not
known with certainty in advance.
Payments
(596)
(737)
(664)
Experience adjustments
(47)
Past service costs
Foreign currency translation adjustments
Benefits paid
(693)
(680)
Changes in the consolidated subsidiaries
of the Allianz Group¹
(200)
(4)
Divestitures
(5)
Settlement gain/(loss)
(1)
15
6
107
398
2014
2015
€ MN
Changes in financial assumptions
RECONCILIATION OF DEFINED BENEFIT OBLIGATION,
PLAN ASSETS AND EFFECT OF ASSET CEILING
22,767
22,327
Defined benefit obligation as of 31 December³
(152)
(229)
Settlement payments²
The following table sets out the changes in the defined benefit obli-
gation, in the fair value of plan assets and in the effect of the asset
ceiling for the various Allianz Group defined benefit plans:
Plan assets do not include any real estate used by the Allianz
Group and include only € 6.2 MN of own transferable financial instru-
20
Actuarial (gains)/losses due to
(722)
2,264
Net amount recognized as of 31 December
9,062
9,707
thereof assets
(87)
(58)
thereof liabilities
9,149
9,765
1- For 2015, these include € 21 MN for the deconsolidated subsidiary Selecta.
2-For 2015, includes net interest expenses of € 191 MN (2014: € 253 MN).
OCI recognition (before deferred taxes)
224
Annual Report 2015 Allianz Group
D- Consolidated Financial Statements
135 Consolidated Balance Sheets
136 Consolidated Income Statements
111
Plan participants' contributions
663
492
Interest expenses
495
Changes in demographic assumptions
Current service costs
22,767
Defined benefit obligation as of 1 January
CHANGE IN DEFINED BENEFIT OBLIGATION
139 Consolidated Statements of Cash Flows
141 Notes
138 Consolidated Statements of
Changes in Equity
137 Consolidated Statements of
Comprehensive Income
19,110
(18,059) 19,852.60 (43,321) 12,508.00
(42,403) 16,525.91 (44,322) 16,879.96
275
114,898 20,043.67
175,360 17,212.31
31 December
Exercisable as of
31 December
228
Annual Report 2015 Allianz Group
Outstanding as of
8.8
100.0
55.05
Allianz Euro Inflation-linked Bond, Senningerberg
Allianz Australia Life Insurance Limited, Sydney
38.6 2,5
100.0
Allianz Australia Limited, Sydney
Allianz Euro Emprunts d'Etat, Paris
Allianz Australia Insurance Limited, Sydney
8.3
Allianz Euro Obligations Crédit ISR, Paris
Allianz Euroland Equity SRI, Senningerberg
100.0
16.0
40.7 2,5
Annual Report 2015 Allianz Group
235
%
OWNED 1
%
OWNED 1
%
1
OWNED
90.45
100.0
Allianz Euro Bond Strategy, Senningerberg
50.25
100.0 3
100.0
Allianz Equity Investments Ltd., Guildford
100.0
Umspannwerk Putlitz GmbH & Co. KG, Oldenburg
25.4
Allianz Asset Management U.S. Holding II LLC,
Allianz Equity Large Cap EMU, Paris
100.0 3
Dover, DE
100.0
Sydney
Allianz EURECO Equity, Paris
Other participations between 5 and 20%
Allianz Australia Advantage Ltd., Sydney
100.0
Allianz Euro Bond Plus, Paris
56.35
of voting rights
Allianz Australia Employee Share Plan Pty Ltd.,
EXTREMUS Versicherungs-Aktiengesellschaft,
Cologne
FC Bayern München AG, Munich
MLP AG, Wiesloch
Allianz Europa Aandelen Fonds, Rotterdam
96.85
75.25
Allianz Management Services Limited, Guildford
100.0 3
100.0
Allianz Finance Corporation, Wilmington, DE
100.0
Minneapolis, MN
100.0
Allianz Multi Actions Monde, Paris
95.25
Allianz Finance II B.V., Amsterdam
100.0
Allianz Informatique G.I.E., Paris
100.0
Allianz México S.A. Compañía de Seguros, Mexico City
Allianz Multi Croissance, Paris
Allianz Finance Il Luxembourg S.à r.l., Luxembourg
Allianz Infrastructure Czech HoldCo I S.à r.l.,
100.0
Allianz Multi Dynamisme, Paris
94.15
Luxembourg
100.0
Allianz Finance III B.V., Amsterdam
100.0
Allianz Multi Equilibre, Paris
97.75
100.05
Allianz Hospitaliers Valeurs Durables, Paris
Allianz Individual Insurance Group LLC,
Allianz Europe Ltd., Amsterdam
Allianz Equity Emerging Markets 1, Paris
100.0
Allianz Europa Obligatie Fonds, Rotterdam
87.25
Allianz Hungária Biztosító Zrt., Budapest
100.0
Allianz Europe B.V., Amsterdam
100.0
Allianz IARD S.A., Paris
100.0
Allianz Marine & Transit Underwriting Agency Pty Ltd.,
Sydney
100.0
65.0
99.35
Allianz IARD Vintage, Paris
100.0 3
Allianz Marine (UK) Ltd., Ipswich
100.0
Allianz Europe Income and Growth, Senningerberg
40.0 2,5
Allianz Immo, Paris
42.8 2,5
Allianz Mena Holding Bermuda Ltd., Beirut
99.9
Allianz Europe Conviction Equity, Senningerberg
100.0
25.0
25.0
94.65
Allianz Digital Corporate Ventures S.à r.I., Luxem-
BEG Weser-Ems Baugrund- und Erschließungsgesell-
schaft mbH & Co. OHG, Oldenburg
bourg
100.0
50.0
Allianz Actions Euro, Paris
83.15
Dealis Fund Operations GmbH, Frankfurt am Main
SPN Service Partner Netzwerk GmbH, Munich
50.0
Allianz Actions Euro Convictions, Paris
Allianz Actions Emergentes, Paris
88.85
59.05
Allianz do Brasil Participações Ltda., São Paulo
100.0
30.08
Allianz Actions Euro MidCap, Paris
72.25
Allianz Duurzaam Wereld Aandelen Fonds,
Allianz Actions France, Paris
74.45
Rotterdam
53.85
Allianz Discovery Asia Strategy, Senningerberg
Associates
100.0 5
69.85
OLB-Immobiliendienst-GmbH, Oldenburg
AIM Underwriting Limited, Toronto, ON
100.0
Allianz Côte d'Ivoire Assurances SA, Abidjan
74.1
100.0
OLB-Service GmbH, Oldenburg
Allegiance Marketing Group LLC, North Palm Beach, FL
100.0
Allianz Côte d'Ivoire Assurances Vie SA, Abidjan
71.0
Allianz Defensief Mix Fonds, Rotterdam
100.0
Allianz (UK) Limited, Guildford
Allianz Creactions 1, Paris
100.0
100.0 3
100.0
Allianz Actio France, Paris
81.55
Allianz Creactions 2, Paris
100.03
Joint ventures
Allianz Actions Aéquitas, Paris
Supercheck GmbH, Cologne
Allianz Actions Internationales, Paris
99.35
AV Packaging GmbH, Munich
Generales S.A., Buenos Aires
100.0
25.0
Allianz Elementar Versicherungs-Aktiengesellschaft,
Vienna
100.0
Reisegarant GmbH, Hamburg
24.0
Allianz Argentina RE S.A., Buenos Aires
100.0
T&R GP Management GmbH, Bonn
Allianz Asac Actions, Paris
Kranichfeld
25.0
Allianz Emerging Markets Flexible Bond, Senninger-
berg
96.05
T&R Investment GmbH & Co. KG, Frankfurt am Main
25.0
Allianz Asset Management of America Holdings Inc.,
Dover, DE
100.0
Allianz Engineering Inspection Services Limited,
Guildford
100.0
T&R MLP GmbH, Bonn
Allianz Infrastructure Czech HoldCo II S.à r.I.,
T&R Real Estate GmbH, Bonn
100.03
Allianz Argentina Compañía de Seguros
handel Beteiligungs- und Verwaltungs GmbH,
100.0
51.0
Allianz Africa S.A., Paris
100.0
Allianz Dynamic Multi Asset Strategy 75, Senninger-
berg
74.35
DCSO Deutsche Cyber-Sicherheitsorganisation
GmbH, Berlin
Allianz Air France IFC, Paris
100.05
Allianz EDUKACJA S.A., Bialobrzegi
100.0
25.0
Allianz Alapkezelő Zrt., Budapest
100.0
esa EuroShip GmbH & Co. KG Underwriting for
Allianz Egypt for Financial Investments Company
S.A.E., New Cairo
100.0
Allianz Amerika Aandelen Fonds, Rotterdam
84.75
Shipping, Bad Friedrichshall
40.0
Allianz Elementar Lebensversicherungs-Aktiengesell-
Allianz Annuity Company of Missouri, Clayton, MO
100.0
Mühl Product & Service und Thüringer Baustoff-
schaft, Vienna
Allianz Asset Management of America L.P., Dover, DE
Allianz Asset Management of America LLC, Dover, DE
Allianz Finance IV Luxembourg S.à r.I., Luxembourg
100.0
Luxembourg
Allianz Invest Ostrent, Vienna
95.7 5
Allianz Global Assistance New Zealand Limited,
Allianz Invest Spezial 3, Vienna
100.0 3
Allianz One Beacon GP LLC, Wilmington, DE
Allianz One Beacon LP, Wilmington, DE
100.0
100.0
Auckland
100.0
Allianz Global Corporate & Specialty do Brasil Partici-
100.0
pações Ltda., Rio de Janeiro
Allianz Global Corporate & Specialty of Africa
Allianz Investment Management LLC, Minneapolis, MN
Allianz Investmentbank Aktiengesellschaft, Vienna
Allianz Investments | Luxembourg S.à r.l., Luxem-
bourg
Allianz Opéra, Paris
100.0
100.0 3
Allianz Osmea 4, Paris
100.05
100.0
Allianz p.l.c., Dublin
100.0
100.0
100.0
Allianz Pacific Aandelen Fonds, Rotterdam
Allianz Global Assistance International SA, Paris
100.0 5
66.45
100.0 5
100.0
Allianz General Insurance Company (Malaysia)
Allianz Invest Alternativ, Vienna
100.05
Allianz Obligations Internationales, Paris
79.15
Berhad p.l.c., Kuala Lumpur
100.0
Allianz Invest Cash, Vienna
100.0
80.65
99.95
Allianz General Laos Ltd., Vientiane
51.0
Allianz Invest d.o.o., Zagreb
100.0
Allianz of America Inc., Wilmington, DE
100.0
Allianz generalni sluzby s.r.o., Prague
100.0
Allianz Invest Kapitalanlagegesellschaft mbH, Vienna
Allianz Offensief Mix Fonds, Rotterdam
Allianz Obligations Monde, Paris
86.75
(Proprietary) Ltd., Johannesburg
100.0
100.0 5
100.0
Allianz Pimco Mortgage, Vienna
97.35
Allianz Leasing Bulgaria AD, Sofia
51.0
Allianz pojistovna a.s., Prague
100.0
100.0
Allianz Life & Annuity Company, Minneapolis, MN
100.0
Allianz Langlopend Obligatie Fonds, Rotterdam
Allianz Polska Services Sp. z o.o., Warsaw
Allianz Global Investors Ireland Ltd., Dublin
100.0
Allianz Life (Bermuda) Ltd., Hamilton
100.0
Allianz Popular Asset Management SGIIC S.A., Madrid
100.0
Allianz Global Investors Japan Co. Ltd., Tokyo
100.0
Allianz Life Assurance Company-Egypt S.A.E., Cairo
100.0
Allianz Popular Pensiones EGFP S.A., Madrid
100.0
73.05
Allianz Pimco Corporate, Vienna
100.0
Allianz Global Corporate & Specialty South Africa
Ltd., Johannesburg
Allianz Investments II Luxembourg S.à r.I., Luxem-
bourg
100.0
Allianz Pan Asian REITS Fund Segregated Portfolio,
George Town
100.0³
100.0
Allianz Global Emerging Markets Equity Dividend,
Senningerberg
Allianz Investments III Luxembourg S.à r.I., Luxem-
Allianz Pension Fund Trustees Ltd., Guildford
100.0
bourg
100.0
60.05
Allianz Pensionskasse Aktiengesellschaft, Vienna
100.0
Allianz Global Equity Selection, Senningerberg
Allianz Irish Life Holdings p.l.c., Dublin
66.5
99.05
Allianz Global Investors Asia Pacific Ltd., Hong Kong
Allianz Global Investors Distributors LLC, Dover, DE
Allianz Global Investors Fund Management LLC,
Dover, DE
Allianz kontakt s.r.o., Prague
Allianz penzijní spolecnost a.s., Prague
100.0
100.0
Allianz Geldmarkt Fonds, Rotterdam
100.0
Allianz New Zealand Limited, Auckland
100.05
82.35
100.0 5
100.0 5
100.0 5
100.0
74.0
Allianz Infrastructure Spain Holdco I S.à r.l.,
Allianz Multi Horizon 2039-2041, Paris
Allianz Multi Horizon Court Terme, Paris
100.0 5
76.85
Allianz Foncier, Paris
57.75
56.45
100.0
Allianz Multi Horizon Long Terme, Paris
71.55
Allianz Formuléo ISR, Paris
100.0 5
Allianz Infrastructure Spain Holdco II S.à r.I.,
Allianz France Favart I, Paris
Luxembourg
Allianz Multi Opportunités, Paris
99.05
100.03
Luxembourg
100.0
Allianz Multi Horizon 2024-2026, Paris
Allianz Multi Horizon 2027-2029, Paris
Allianz Multi Horizon 2030-2032, Paris
Allianz Multi Horizon 2033-2035, Paris
Allianz Multi Horizon 2036-2038, Paris
Allianz Foglalkoztatói Nyugdíjszolgáltató Zrt.,
Budapest
Allianz Multi Horizon 2018-2020, Paris
100.0
54.65
Allianz Finance Obligations Monde, Paris
95.65
Allianz Finance Pty Ltd., Sydney
100.0
Allianz Infrastructure Luxembourg Holdco I S.A.,
Luxembourg
Allianz Multi Horizon 2021-2023, Paris
46.6 2.5
100.0
Allianz Infrastructure Norway Holdco | S.à r.I.,
Luxembourg
Allianz Finance VII Luxembourg S.A., Luxembourg
Allianz Infrastructure Luxembourg Holdco II S.A.,
Allianz Finance VIII Luxembourg S.A., Luxembourg
Luxembourg
100.0
100.0
Allianz FinanzPlan 2055, Senningerberg
74.05
Allianz Infrastructure Luxembourg I S.à r.I., Luxem-
bourg
100.0
Allianz Fire and Marine Insurance Japan Ltd., Tokyo
100.0
100.0
Allianz France Investissement OPCI, Paris
Allianz Insurance Company Ghana Limited, Accra
Allianz Multi Rendement Premium (R), Paris
100.0
100.0
Allianz Garantie Fonds 3%, Rotterdam
Allianz Inversiones S.A., Bogotá D.C.
100.0
Allianz Nederland Groep N.V., Rotterdam
100.0
100.05
Allianz Invest 10 Division S/U, Vienna
Allianz Garantie Fonds 4,75%, Rotterdam
100.0 3
Rotterdam
Allianz Nederland Levensverzekering N.V.,
Allianz Garantiefonds 3,35%, Rotterdam
Allianz Invest 11 Division Leben/Kranken, Vienna
Rotterdam
100.0 3
100.0
100.05
Allianz Garantiefonds 5%, Rotterdam
Allianz Invest 12 Division Leben/Kranken, Vienna
100.0 3
Allianz New Europe Holding GmbH, Vienna
100.0
99.55
100.0
Allianz International Ltd., Guildford
Allianz Fund Investments S.A., Luxembourg
98.05
100.0
100.0
Allianz France Real Estate Invest SPPICAV, Paris
Allianz Insurance Company Lanka Limited, Saram
Allianz Multi Rendement Réel, Paris
87.85
100.0
100.0
Allianz France Richelieu 1 S.A.S., Paris
100.0
Allianz France S.A., Paris
Allianz Insurance Company of Kenya Limited, Nairobi
Allianz Insurance Company-Egypt S.A.E., Cairo
Allianz Multi Sérénité, Paris
99.65
100.0
95.0
100.0
Allianz Mutual Funds Management Company S.A.,
Athens
100.0
Allianz Fund Investments Inc., Wilmington, DE
Allianz Insurance plc, Guildford
100.0
100.0
Allianz Nederland Asset Management B.V.,
Allianz Invest 50, Vienna
100.0
AIM Singapore Pte Ltd., Singapore
Allianz Cornhill Information Services Private Ltd.,
Trivandrum
100.0
Objekt Burchardplatz GmbH & Co. KG, Stuttgart
100.0
100.03
Atropos Vermögensverwaltungsgesellschaft mbH,
Munich
Oldenburgische Landesbank Aktiengesellschaft,
100.0
Oldenburg
90.2
Allianz Leben Direkt Infrastruktur GmbH, Munich
Allianz Leben Infrastrukturfonds GmbH, Munich
100.0
100.0
100.0
PIMCO Deutschland GmbH, Munich
100.0 4
94.9
Allianz Leben Private Equity Fonds 1998 GmbH,
Munich
Auros GmbH, Munich
100.0
100.0
Auros II GmbH, Munich
100.0
Allianz Leben Private Equity Fonds 2001 GmbH,
Munich
REC Frankfurt Objekt GmbH & Co. KG, Hamburg
REC Frankfurt zweite Objektverwaltungsgesellschaft
mbH, Hamburg
AUG. PRIEN Immobilien PE Verwaltung Brahms-
Quartier GmbH, Stuttgart
80.0
My Finance Coach Stiftung GmbH, Munich
100.04
100.03
AllianzGI-Fonds APF Renten, Frankfurt am Main
AllSecur Deutschland AG, Munich
40.2 2,5
100.0
KVM ServicePlus - Kunden- und Vertriebsmanage-
ment GmbH, Halle (Saale)
100.0
Allianz GLRS Fonds, Frankfurt am Main
100.03
APKV Direkt Infrastruktur GmbH, Munich
100.0
Mondial Kundenservice GmbH, Nuremberg
ARE Brep Acht Vermögensbeteiligungsgesellschaft
mbH & Co. KG, Munich
100.0
100.03
APKV Infrastrukturfonds GmbH, Munich
100.0
Münchener und Magdeburger Agrarversicherung
Allianz GRGB Fonds, Frankfurt am Main
Allianz Handwerker Services GmbH, Aschheim
Allianz Investment Management SE, Munich
Allianz LAD Fonds, Frankfurt am Main
100.03
APKV Private Equity Fonds GmbH, Munich
Aktiengesellschaft, Munich
100.0
100.0
100.0
Allianz GLU Fonds, Frankfurt am Main
60.0
100.0
AZ-Arges Vermögensverwaltungsgesellschaft mbH,
Munich
UfS Beteiligungs-GmbH, Munich
100.0
100.0 3
Allianz L-PD Fonds, Frankfurt am Main
100.03
AZ-Argos 50 Vermögensverwaltungsgesellschaft
mbH & Co. KG, Munich
VLS Versicherungslogistik GmbH, Berlin
100.0
100.0
Allianz Managed Operations & Services SE, Munich
100.0
Allianz LFE Fonds, Frankfurt am Main
Allianz of Asia-Pacific and Africa GmbH, Munich
Allianz Pension Direkt Infrastruktur GmbH, Munich
Allianz Pension Partners GmbH, Munich
AZ-Argos 51 Vermögensverwaltungsgesellschaft
mbH & Co. KG, Munich
Volkswagen Autoversicherung AG, Braunschweig
100.0
100.0
100.0
AZ-Argos 57 Vermögensverwaltungsgesellschaft
mbH & Co. KG, Munich
Volkswagen Autoversicherung Holding GmbH,
Braunschweig
49.02
100.0
Windpark Aller-Leine-Tal GmbH & Co. KG, Sehestedt
100.0
100.0
100.0
100.0
Spherion Objekt GmbH & Co. KG, Stuttgart
RehaCare GmbH, Munich
100.0
100.0
risklab GmbH, Munich
Allianz Leben Private Equity Fonds 2008 GmbH,
100.0
Munich
100.0
AZ-Argos 14 Vermögensverwaltungsgesellschaft
mbH, Munich
Roland Holding GmbH, Munich
75.2
100.0
Allianz Leben Private Equity Fonds Plus GmbH,
Munich
100.0
AZ-Argos 41 Vermögensverwaltungsgesellschaft
Signa 12 Verwaltungs GmbH, Düsseldorf
94.9
Allianz Lebensversicherungs-Aktiengesellschaft,
Stuttgart
mbH, Munich
100.0
Spherion Beteiligungs GmbH & Co. KG, Stuttgart
94.9
100.0
AZ-Argos 44 Vermögensverwaltungsgesellschaft
mbH & Co. KG, Munich
Allianz GLR Fonds, Frankfurt am Main
100.0
100.0
99.35
94.9
95.0
100.0 3
Bürgel Wirtschaftsinformationen GmbH & Co. KG,
Hamburg
50.1
100.0
Bürgel Wirtschaftsinformationen Verwaltungs-
100.0 3
GmbH, Hamburg
50.4
99.5
Brahms Beteiligungs GmbH & Co. KG, Stuttgart
BrahmsQ Objekt GmbH & Co. KG, Stuttgart
dbi-Fonds Ammerland, Frankfurt am Main
100.0
dbi-Fonds DAV, Frankfurt am Main
100.03
Allianz Capital Partners GmbH, Munich
100.04
Allianz UGD 1 Fonds, Frankfurt am Main
100.0 3
dbi-Fonds WE, Frankfurt am Main
100.03
Allianz Capital Partners Verwaltungs GmbH, Munich
100.0
100.03
Allianz VAE Fonds, Frankfurt am Main
100.0
100.03
100.0
100.0 3
Sehestedt
100.0
Allianz AKR Fonds, Frankfurt am Main
100.03
Allianz ALD Fonds, Frankfurt am Main
Allianz ALIK Fonds, Frankfurt am Main
Allianz APAV Fonds, Frankfurt am Main
Allianz APKR Fonds, Frankfurt am Main
Allianz Asset Management AG, Munich
100.03
Allianz Renewable Energy Subholding GmbH & Co. KG,
Sehestedt
100.0
Allianz RFG Fonds, Frankfurt am Main
100.0 3
Allianz Risk Consulting GmbH, Munich
Allianz SDR Fonds, Frankfurt am Main
Allianz SE-PD Fonds, Frankfurt am Main
Allianz Service Center GmbH, Munich
Allianz SOA Fonds, Frankfurt am Main
Allianz Taunusanlage GbR, Stuttgart
Allianz Treuhand GmbH, Stuttgart
100.0 3
100.0
100.0
100.0
100.03
100.0 3
100.0
Allianz AVM-B Fonds, Frankfurt am Main
100.0 3
Allianz AZL Vermögensverwaltung GmbH & Co. KG,
Munich
100.0
Allianz Beratungs- und Vertriebs-AG, Munich
AZ-SGD Private Equity Fonds 2 GmbH, Munich
AZ-SGD Private Equity Fonds GmbH, Munich
AZT Automotive GmbH, Ismaning
100.0 3
Deutsche Lebensversicherungs-Aktiengesellschaft,
Allianz Climate Solutions GmbH, Munich
Allianz Esa cargo & logistics GmbH, Bad Friedrichshall
100.0
Allianz Esa EuroShip GmbH, Bad Friedrichshall
51.0
Allianz FAD Fonds, Frankfurt am Main
100.03
Allianz Finanzbeteiligungs GmbH, Munich
100.0
Allianz Global Corporate & Specialty SE, Munich
100.0
Allianz VKRD Fonds, Frankfurt am Main
Allianz V-PD Fonds, Frankfurt am Main
Allianz VSR Fonds, Frankfurt am Main
Allianz VW AV Fonds, Frankfurt am Main
Allianz Warranty GmbH, Unterföhring
100.0
100.0 3
100.0
100.0 3
100.0 3
GA Global Automotive Versicherungsservice GmbH,
Halle (Saale)
100.0
InnoSolutas GmbH, Bad Friedrichshall
100.0
100.0 3
KomfortDynamik Sondervermögen, Frankfurt am
100.0
Main
Euler Hermes Rating Deutschland GmbH, Hamburg
Euler Hermes Collections GmbH, Potsdam
100.0 3
Allianz VKA Fonds, Frankfurt am Main
100.0
Allianz Venture Partners Beteiligungs GmbH, Munich
100.0
Berlin
100.0
Allianz Deutschland AG, Munich
100.0
Allianz Versicherungs-Aktiengesellschaft, Munich
100.0
Donator Beratungs GmbH, Munich
100.0
Allianz Digital Accelerator GmbH, Munich
100.0
Allianz VGI 1 Fonds, Frankfurt am Main
100.0 3
Donator Beteiligungsverwaltung GmbH, Munich
100.0
Allianz DLVR Fonds, Frankfurt am Main
100.0³
Allianz VGL Fonds, Frankfurt am Main
100.0 3
Euler Hermes Aktiengesellschaft, Hamburg
100.0
Allianz EEE Fonds, Frankfurt am Main
100.03
Allianz Global Investors GmbH, Frankfurt am Main
100.0
AZ-Argos 58 Vermögensverwaltungsgesellschaft
mbH & Co. KG, Munich
100.0
Allianz Pension Consult GmbH, Stuttgart
Allianz Cap ISR 2016, Paris
99.95
100.0
AGA Services (Thailand) Co. Ltd., Bangkok
97.6
AZ Beteiligungs-Management GmbH, Munich
100.0
AGA Servis Hizmetleri A.S., Istanbul
97.0
AZ-Argos 56 Vermögensverwaltungsgesellschaft mbH,
Munich
100.0
Allianz Capital Partners of America Inc., New York, NY
Allianz Carbon Investments B.V., Amsterdam
100.0
AGA Sigorta Aracilik Hizmetleri LS, Istanbul
100.0
100.0
Allianz Cash SAS, Paris
100.0
Bürgel Beteiligungs GmbH, Hamburg
AGCS Marine Insurance Company, Chicago, IL
100.0
100.0
Allianz Centrafrique Assurances SA, Bangui
100.0
88.3
AGA Services (India) Private Limited, Gurgaon
75.8
AGA Assistance Japan Co. Ltd., Tokyo
80.1
AGA Inc., Richmond, VA
100.0
Non-consolidated affiliates
Allianz Burkina Assurances Vie SA, Ouagadougou
Allianz Business Services Limited, Lancaster
71.8
100.0
AGA Insurance Broker (Thailand) Co. Ltd., Bangkok
100.0
AERS Consortio Aktiengesellschaft, Stuttgart
100.0
Allianz business services s.r.o., Bratislava
100.0
AGA Service Company Corp., Richmond, VA
100.0
Allianz Global Benefits GmbH, Stuttgart
Allianz Cameroun Assurances SA, Douala
100.0
75.4
AGA Service Italia S.c.a.r.l., Milan
100.0
Allianz Objektbeteiligungs-GmbH, Stuttgart
Allianz Cameroun Assurances Vie SA, Douala
55.3
Elbe Forderungsmanagement GmbH, Hamburg
AGCS Resseguros Brasil S.A., Rio de Janeiro
100.0
Infrastruktur Putlitz Ost GmbH & Co. KG, Husum
70.8
Lola Vermögensverwaltungsgesellschaft mbH
& Co. KG, Munich
AGIF RCM European Equity Dividend AT/IT, Senninger-
berg
Allianz Combinatie Fonds, Rotterdam
93.55
46.3 2,5
100.0
AGR Services Pte Ltd., Singapore
100.0
manroland AG, Offenbach am Main
100.0
Allianz Compañía de Seguros y Reaseguros S.A.,
Barcelona
100.0 6,7
AIM Equity EMU 1, Paris
100.03
Allianz Congo Assurances SA, Brazzaville
100.0
manroland Vertrieb und Service GmbH, Mühlheim
am Main
AIM Equity US, Paris
100.07
100.03
META Finanz-Informationssysteme GmbH, Munich
100.0
99.9
Allianz Colombia S.A., Bogotá D.C.
100.0
AGF Inversiones S.A., Buenos Aires
100.0
EURO-PRO Gesellschaft für Data Processing mbH,
Grävenwiesbach
75.2
AGF Benelux S.A., Luxembourg
AGF FCR, Paris
Allianz Chicago Private Reit LP, Wilmington, DE
100.0
100.0
Allianz China General Insurance Company Ltd.,
100.05
Guangzhou
100.0
Grundstücksgesellschaft der Vereinten
AGF Holdings (UK) Limited, Guildford
100.0
Allianz China Life Insurance Co. Ltd., Shanghai
51.0
Versicherungen mbH, Munich
100.0
AGF Insurance Limited, Guildford
100.0
Allianz Citizen Care SRI, Paris
76.85
IDS GmbH - Analysis and Reporting Services, Munich
100.0
60.3
Windpark Berge-Kleeste GmbH & Co. KG, Sehestedt
Allianz Burkina Assurances SA, Ouagadougou
100.0
Windpark Dahme GmbH & Co. KG, Sehestedt
100.0
FOREIGN ENTITIES
Limited, Sydney
100.0
Windpark Eckolstädt GmbH & Co. KG, Sehestedt
100.0
Consolidated affiliates
Allianz Australia Workers Compensation (Victoria)
Limited, Melbourne
100.0
Allianz Australia Workers Compensation (NSW)
Windpark Emmendorf GmbH & Co. KG, Sehestedt
114 Venture LP, Wilmington, DE
99.0
Allianz Australian Claims Services Limited, Sydney
100.0
Windpark Freyenstein-Halenbeck GmbH & Co. KG,
Sehestedt
490 Fulton JV LP, Wilmington, DE
96.5
100.0
Allianz Australian Real Estate Trust, Sydney
100.0 3
490 Fulton REIT LP, Wilmington, DE
100.0
100.0
100.0
100.0
100.0
234
Annual Report 2015 Allianz Group
D- Consolidated Financial Statements
135 Consolidated Balance Sheets
136 Consolidated Income Statements
137 Consolidated Statements of
Comprehensive Income
138 Consolidated Statements of
Changes in Equity
139 Consolidated Statements of Cash Flows
141 Notes
%
OWNED 1
%
Windpark Cottbuser See GmbH & Co. KG, Sehestedt
1
%
OWNED
Windpark Büttel GmbH & Co. KG, Sehestedt
100.0
Protektor Lebensversicherungs-AG, Berlin
10.0
Windpark Calau GmbH & Co. KG, Sehestedt
100.0
Sana Kliniken AG, Ismaning
14.3
Allianz Australia Partnership Services Limited, Sydney
Allianz Australia Services Pty Limited, Sydney
100.0
OWNED
Windpark Kesfeld-Heckhuscheid GmbH & Co. KG,
Sehestedt
Allianz Aviation Managers LLC, Burbank, CA
100.0
100.0
Aero-Fonte S.r.l., Catania
100.0
100.0
Allianz Bénin Assurances SA, Cotonou
83.5
Windpark Schönwalde GmbH & Co. KG, Sehestedt
AGA Alarmcentrale NL B.V., Amsterdam
100.0
100.0
Allianz Bonds Diversified Euro, Paris
Allianz Benelux S.A., Brussels
100.0 3
AGA Assistance (India) Private Limited, Gurgaon
100.0
Allianz Bonds Euro High Yield, Paris
100.0 3
100.0
AGA Assistance Australia Pty Ltd., Toowong
100.0
Allianz Bulgaria Holding AD, Sofia
66.2
Windpark Werder Zinndorf GmbH & Co. KG,
Sehestedt
AGA Assistance Beijing Services Co. Ltd., Beijing
Windpark Waltersdorf GmbH & Co. KG Renditefonds,
Sehestedt
Windpark Redekin-Genthin GmbH & Co. KG,
Sehestedt
100.03
100.0
490 Lower Unit GP LLC, Wilmington, DE
100.0
100.0
Allianz Ayudhya Assurance Public Company Limited,
Windpark Kirf GmbH & Co. KG, Sehestedt
Windpark Kittlitz GmbH & Co. KG, Sehestedt
100.0
490 Lower Unit LP, Wilmington, DE
100.0
Bangkok
62.6
A.V.I.P. Assurance Vie de Prévoyance SA, Courbevoie
100.0
100.0
Allianz Bank Bulgaria AD, Sofia
99.9
ACMAR SA, Casablanca
Windpark Pröttlin GmbH & Co. KG, Sehestedt
55.0
100.0
Allianz Bank Financial Advisors S.p.A., Milan
100.0
Windpark Quitzow GmbH & Co. KG, Sehestedt
100.0
Advanz Fundo de Investimento Renda Fixa Crédito
Privado, São Paulo
Allianz Banque S.A., Courbevoie
100.0
Allianz Global Investors Korea Limited, Seoul
100.0
Allianz Life Financial Services LLC, Minneapolis, MN
National Surety Corporation, Chicago, IL
100.0
GamePlan Financial Marketing LLC, Woodstock, GA
Generation Vie S.A., Courbevoie
Euler Hermes Luxembourg Holding S.à r.l.,
Luxembourg
100.0
Limited, Seoul
Euler Hermes Korea Non-life Broker Company
100.03
100.0
Mondial Serviços Ltda., São Bernardo do Campo
Morgan Stanley Italian Office Fund, Milan
100.0 5
100.0
Gaipare Action, Paris
Euler Hermes Hong Kong Service Limited, Hong Kong
100.0
Fusion Company Inc., Richmond, VA
100.0
Euler Hermes Hellas Services Ltd., Athens
100.0
Mondial Servicios S.A. de C.V., Mexico City
100.0
Fusion Brokerage Inc., Richmond, VA
100.0
Euler Hermes Hellas Credit Insurance SA, Athens
100.0
100.0
52.5
100.0
100.0
NEXTCARE Lebanon SAL, Beirut
Global Transport & Automotive Insurance Solutions
Pty Limited, Sydney
100.0
Euler Hermes North America Insurance Company
Inc., Baltimore, MD
75.0
NEXTCARE Holding WLL, Manama
100.0
GIE Euler Hermes SFAC Services, Paris la Défense
100.0
Mills, MD
Neoasistencia Manoteras S.L., Madrid
100.0
100.0
Chatillon
Euler Hermes North America Holding Inc., Owings
100.0
Nextcare Bahrain Ancillary Services Company B.S.C.,
Manama
Gestion de Téléassistance et de Services S.A.,
100.0
Euler Hermes Magyar Követeleskezelő Kft., Budapest
100.0
Genialloyd S.p.A., Milan
100.0
NEXTCARE Egypt LLC, Cairo
81.0
100.0
Mondial Service - Belgium S.A., Brussels
Mondial Service Argentina S.A., Buenos Aires
Mondial Service Colombia SAS, Bogotá D.C.
Euler Hermes Crédit France S.A.S., Paris la Défense
Euler Hermes Credit Management Services
Ireland Ltd., Dublin
Beykoz Gayrimenkul Yatirim Insaat Turizm Sanayi ve
80.0
Allianz Yasam ve Emeklilik A.S., Istanbul
100.0
Rotterdam
Beleggingsmaatschappij Willemsbruggen B.V.,
100.0
Allianz Worldwide Partners S.A.S., Paris
100.0
Euler Hermes Consulting (Shanghai) Co. Ltd.,
Shanghai
100.0
100.0
AZOA Services Corporation, New York, NY
Allianz Worldwide Care Services Ltd., Dublin
100.0
100.0
Allianz Worldwide Care S.A., Paris
AZOA C.V., Amsterdam
100.0
Euler Hermes Collections Sp. z o.o., Warsaw
100.0
AZL PF Investments Inc., Minneapolis, MN
100.0
100.0
100.0
100.0
83.2
1.02
Fu An Management Consulting Co. Ltd., Beijing
69.5
Euler Hermes Group SA, Paris La Défense
Allianz ABS Fonds, Frankfurt am Main
100.0
Friederike MLP S.à r.l., Luxembourg
100.0
100.0
Fragonard Assurance S.A., Paris
Euler Hermes Excess North America LLC, Owings
Mills, MD
Allianz Zagreb d.d., Zagreb
1
OWNED 1
OWNED 1
%
%
%
237
Annual Report 2015 Allianz Group
100.0
Euler Hermes Credit Services (JP) Ltd., Tokyo
100.0
Ticaret A.S., Ankara
OWNED
Nextcare Tunisia S.à r.l., Tunis
100.0
Euler Hermes Patrimonia SA, Brussels
Euler Hermes Services G.C.C. Limited, Dubai
100.0
Orsa Maggiore PV S.r.I., Milan
100.0 3
Investitori Real Estate Fund, Milan
100.0
Euler Hermes Services Bulgaria EOOD, Sofia
100.0
Orione PV S.r.I., Milan
100.0
Interstate Fire & Casualty Company, Chicago, IL
100.0
100.0
100.0
Oppenheimer Group Inc., Dover, DE
100.0
International Film Guarantors LLC, Santa Monica, CA
100.0
Euler Hermes Services B.V., 's-Hertogenbosch
100.0
OPCI Allianz France Angel, Paris
100.0
International Film Guarantors Limited, London
100.0
Euler Hermes Services Belgium S.A., Brussels
Euler Hermes Services AG, Wallisellen
Investitori SGR S.p.A., Milan
Orsa Minore PV S.r.I., Milan
100.0
67.6
100.0
Parc Eolien de Bruyère Grande SAS, Versailles
Kaishi Pte. Ltd., Singapore
Euler Hermes Services Sp. z o.o., Warsaw
100.0
100.0
100.0
Parc Eolien de Bonneuil S.à r.l., Versailles
Jefferson Insurance Company Corp., New York, NY
100.0
Euler Hermes Services South Africa Ltd.,
Johannesburg
Dover, DE
40.0 2
JCR Intertrade Ltd., Bangkok
100.0
Euler Hermes Services S.A.S., Paris la Défense
Pacific Investment Management Company LLC,
100.0
Järvsö Sörby Vindkraft AB, Danderyd
100.0
Euler Hermes Services India Private Limited, Mumbai
100.0
95.6
100.0
000 Mondial Assistance, Moscow
100.0
100.0
Home & Legacy Insurance Services Limited, London
100.0
100.0
OJSC "My Clinic", Moscow
100.0
Home & Legacy (Holdings) Limited, London
Euler Hermes Recouvrement France S.A.S., Paris
la Défense
100.03
Dover, DE
100.0
OJSC Insurance Company Allianz, Moscow
Helviass Verzekeringen B.V., Rotterdam
Euler Hermes Real Estate SPPICAV, Paris
Northstar Mezzanine Partners VI U.S. Feeder II L.P.,
100.0
Havelaar & van Stolk B.V., Rotterdam
100.0
Euler Hermes Ré SA, Luxembourg
100.0
NFJ Investment Group LLC, Dover, DE
100.0
Hauteville Insurance Company Limited, St Peter Port
100.0
60.0
100.0
Euler Hermes Reinsurance AG, Wallisellen
100.0
Intermediass S.r.l., Milan
100.0
Euler Hermes Service AB, Stockholm
100.0
000 Euler Hermes Credit Management, Moscow
100.0
Insurance CJSC "Medexpress", Saint Petersburg
100.0
Euler Hermes Seguros de Crédito S.A., São Paulo
100.0
000 "IC Euler Hermes Ru", Moscow
100.0
Inforce Solutions LLC, Woodstock, GA
100.0
Euler Hermes S.A., Brussels
100.0
Ontario Limited, Toronto, ON
100.0
Immovalor Gestion S.A., Paris
100.0
Euler Hermes Risk Yönetimi A.S., Istanbul
100.0
OJSC Insurance Company ROSNO-MS, Moscow
100.0
Hunter Premium Funding Ltd., Sydney
Allianz Vorsorgekasse AG, Vienna
100.0
Euler Hermes Cescob Service s.r.o., Prague
100.0
100.0
Arges Investments I N.V., Amsterdam
Arcalis SA, Courbevoie
100.0
Arcalis UN, Paris
100.0 3
100.0
Club Marine Limited, Sydney
100.0
100.0
Arab Gulf Health Services LLC, Dubai
Colisee S.à r.l., Luxembourg
100.0
100.0
Allianz Société Financière S.à r.l., Luxembourg
Allianz South America Holding B.V., Amsterdam
Allianz Special Opportunities Alternative Fund, Milan
Allianz Specialised Investments Limited, London
Allianz Specjalistyczny Fundusz Inwestycyjny Otwarty
Subfunduszu Allianz 1, Warsaw
100.0
APP Broker S.r.I., Trieste
100.0
Chicago Insurance Company Corp., Chicago, IL
87.6
100.0
APKV US Private REIT LP, Wilmington, DE
Allianz Sociedade Gestora de Fundos de Pensões S.A.,
Lisbon
100.0
CIC Allianz Insurance Ltd., Sydney
Château Larose Trintaudon S.A., Saint Laurent Médoc
100.0
Companhia de Seguros Allianz Portugal S.A., Lisbon
Wallisellen
Corsetec Assessoria e Corretagem de Seguros Ltda.,
Allianz Suisse Lebensversicherungs-Gesellschaft AG,
100.0
Réassurance S.A., Paris
100.0
100.0
Corn Investment Ltd., London
Assistance Courtage d'Assurance et de
Allianz Suisse Immobilien AG, Wallisellen
98.1
100.0 5
100.0 3
100.0
Asit Services S.R.L., Bucharest
Allianz Subalpina Holding S.p.A., Turin
100.0
Bogotá D.C.
100.0
Arges Investments II N.V., Amsterdam
100.0 3
Compañía Colombiana de Servicio Automotriz S.A.,
100.0
64.8
Consultatio Renta Mixta F.C.I., Buenos Aires
100.0
APKV US Private REIT GP LLC, Wilmington, DE
100.0
Allianz Sénégal Assurances Vie SA, Dakar
100.0
CEPE de la Forterre S.à r.l., Versailles
100.0
83.2
AMOS IT Suisse AG, Wallisellen
Allianz Sénégal Assurances SA, Dakar
100.0
CEPE de Haut Chemin S.à r.l., Versailles
100.0
AMOS International B.V., Amsterdam
96.8
62.35
100.0
CEPE de Bajouve S.à r.I., Versailles
100.0
AMOS IberoLatAm S.L., Barcelona
81.85
Hong Kong
100.0
Centrale Photovoltaique de Valensole SAS, Paris
Allianz Selection Total Return Asian Equity,
100.0
AMOS European Services SAS, Paris
Allianz Selection US High Yield, Hong Kong
AMOS Italy S.p.c.A., Milan
100.0
CEPE de Langres Sud S.à r.l., Versailles
Barcelona
100.0
CEPE du Bois de la Serre S.à r.I., Versailles
99.63
APEH Europe VI, Paris
Allianz Sociedad Anónima A.S. Agencia de Seguros,
100.0
CEPE des Portes de la Côte d'Or S.à r.I., Versailles
100.0
Antoniana Veneta Popolare Vita S.p.A., Trieste
100.0
Allianz SNA s.a.l., Beirut
100.0
CEPE de Sambres S.à r.I., Versailles
100.0
Ann Arbor Annuity Exchange Inc., Ann Arbor, MI
96.2
Allianz Sigorta A.S., Istanbul
100.0
CEPE de Mont Gimont S.à r.I., Versailles
100.0
AMOS of America Inc., Wilmington, DE
100.0
Allianz Services (UK) Limited, London
100.0
100.0
Euler Hermes Services Tunisia S.à r.l., Tunis
Associated Indemnity Corporation, Novato, CA
São Paulo
100.0
100.0
Etablissements J. Moneger SA, Dakar
AZ Real Estate GP LLC, New York, NY
Allianz US Investment LP, Wilmington, DE
100.0
100.0
100.0
Eolica Erchie S.r.l., Lecce
AZ Jupiter 9 B.V., Amsterdam
Allianz US Investment GP LLC, Wilmington, DE
100.0
100.0
100.0
100.0
Energie Eolienne Lusanger S.à r.l., Versailles
100.0
100.0
EF Solutions LLC, Wilmington, DE
AZ Jupiter 4 B.V., Amsterdam
AZ Jupiter 8 B.V., Amsterdam
Allianz Underwriters Insurance Company Corp.,
100.0
Allianz Ukraine LLC, Kiev
100.0
Burbank, CA
Minneapolis, MN
Allianz US Private REIT GP LLC, Wilmington, DE
Euler Hermes ACI Services LLP, Baltimore, MD
55.0
100.0
Euler Hermes Canada Services Inc., Montreal, QC
100.0
AZGA Insurance Agency Canada Ltd., Kitchener, ON
AZGA Service Canada Inc., Kitchener, ON
Allianz Vie S.A., Paris
100.0
Allianz Vermogen B.V., Rotterdam
100.0
la Défense
Euler Hermes Asset Management France S.A., Paris
AZ Servisni centar d.o.o., Zagreb
100.0
53.35
Allianz Valeurs Durables, Paris
100.0
100.0
100.0
Euler Hermes ACMAR Services SARL, Casablanca
AZ Vers US Private REIT GP LLC, Wilmington, DE
Allianz US Private REIT LP, Wilmington, DE
100.0
100.0
100.0
AZ Vers US Private REIT LP, Wilmington, DE
100.0
AZ Jupiter 10 B.V., Amsterdam
100.0
50.0 2
CreditRas Vita S.p.A., Milan
99.15
Avip Top Croissance, Paris
100.0
Allianz Telematics S.p.A., Rome
50.02
CreditRas Assicurazioni S.p.A., Milan
100.0 5
Avip Actions 60, Paris
99.7
Allianz Tiriac Asigurari SA, Bucharest
Allianz Taiwan Life Insurance Co. Ltd., Taipei
Creactif Allocation, Paris
100.0 5
Avip Actions 100, Paris
100.0
Wallisellen
100.0
CPRN Thailand Ltd., Bangkok
65.0
Assurances Médicales SA, Paris
Allianz Suisse Versicherungs-Gesellschaft AG,
99.5
100.0 5
52.2
Avip Top Defensif, Paris
98.95
Allianz UK Infrastructure Debt GP Limited, London
Dresdner Kleinwort Pfandbriefe Investments II Inc.,
100.0
AZ Euro Investments S.à r.l., Luxembourg
100.0 3
Allianz UK Credit Fund, Paris
100.0
Diamond Point a.s., Prague
100.0
AZ Euro Investments II S.à r.I., Luxembourg
97.9
Allianz Togo Assurances SA, Lome
100.0
Delta Technical Services Ltd., London
100.0
AWP Romania S.A., Bucharest
100.0
a fondurilor de pensii private S.A., Bucharest
50.1
Deeside Investments Inc., Wilmington, DE
94.95
Avip Top Harmonie, Paris
Allianz Tiriac Pensii Private Societate de administrare
100.0
Darta Saving Life Assurance Ltd., Dublin
100.0
Ken Tame & Associates Pty Ltd., Sydney
Parc Eolien de Chaourse SAS, Versailles
100.0
100.0 5
100.0
100.0
AllianzGI Emerging Markets Debt Fund, Boston, MA
96.85
BPS Mesagne 214 S.r.l., Lecce
100.0
AllianzGI Europe Equity Dividend, Boston, MA
100.0
88.55
BPS Mesagne 215 S.r.l., Lecce
BPS Brindisi 222 S.r.l., Lecce
100.0
AllianzGI Global Fundamental Strategy Fund,
Boston, MA
BPS Mesagne 216 S.r.I., Lecce
100.0
95.45
BPS Mesagne 223 S.r.l., Lecce
100.0
Allianz Risk Transfer AG, Zurich
100.0
AllianzGI Global Megatrends Fund, Boston, MA
96.75
BPS Mesagne 224 S.r.l., Lecce
100.0
100.0
AllianzGI Discovery US Portfolio, Boston, MA
Allianz Renewable Energy Partners V plc., London
Allianz Risk Consultants Inc., Los Angeles, CA
Allianz Risk Transfer (Bermuda) Ltd., Hamilton
Allianz Risk Transfer (UK) Limited, London
100.0
Allianz ZB d.o.o. Company for the Management of
Obligatory Pension Funds, Zagreb
Bilan Services S.N.C., Nanterre
66.0
51.0
98.6
Allianz ZB d.o.o. Company for the Management of
Voluntary Pension Funds, Zagreb
Borgo San Felice S.r.l., Castelnuovo Berardenga
(Siena)
100.0
51.0
Allianz Renewable Energy Partners IV Limited,
London
100.0
Botanic Building SPRL, Brussels
98.6
AllianzGI Best Styles Emerging Markets Equity Fund,
Boston, MA
54.05
BPS Brindisi 211 S.r.I., Lecce
100.0
Allianz Renewable Energy Partners of America LLC,
Wilmington, DE
100.0
AllianzGI China Equity Fund, Boston, MA
BPS Brindisi 213 S.r.l., Lecce
58.45
100.0
100.0
Allianz Risk Transfer Inc., New York, NY
100.0
Allianz Risk Transfer N.V., Amsterdam
100.0
Allianz-Slovenská DSS a.s., Bratislava
100.0
Bureau d'Expertises Despretz S.A., Brussels
100.0
Allianz Secteur Euro Immobilier, Paris
94.95
Allianz-Slovenská poist'ovna a.s., Bratislava
99.6
Calobra Investments Sp. z o.o., Warsaw
100.0
Allianz Saúde S.A., São Paulo
Allianz Secteur Europe Immobilier, Paris
Allianz Sécurité, Paris
96.55
Amaya Compañía de Seguros y Reaseguros S.A.,
Madrid
Calypso S.A., Paris
100.0
100.0
Allianz Seguros de Vida S.A., Bogotá D.C.
100.0
American Automobile Insurance Company Corp.,
CAP Rechtsschutz-Versicherungsgesellschaft AG,
Earth City, MO
89.5
98.4
Bulgaria Net AD, Sofia
100.0
100.0
AllianzGI Global Small-Cap Opportunity Portfolio,
Boston, MA
Brasil de Imóveis e Participações Ltda., São Paulo
100.0
97.95
Bright Mission Berhad Ltd., Kuala Lumpur
100.0
Allianz S.A. de C.V., Mexico City
100.0
Allianz S.p.A., Trieste
100.0
Allianz Saint Marc CL, Paris
100.0 5
Allianz SAS S.A.S., Bogotá D.C.
100.0
AllianzGI Global Sustainability Fund, Boston, MA
AllianzGI International Growth Fund, Boston, MA
AllianzGI Multi-Asset Real Return Fund, Boston, MA
AllianzGo S.r.l., Trieste
96.85
British Reserve Insurance Co. Ltd., Guildford
100.0
97.35
Brobacken Nät AB, Stockholm
100.0
71.75
BSMC (Thailand) Limited, Bangkok
100.0
Allianz Renewable Energy Partners II Limited, London
Allianz Renewable Energy Partners III LP, London
Wallisellen
100.0
%
OWNED 1
Allianz Private Equity Partners Europa II, Milan
92.03
100.0
100.0
Allianz Global Investors U.S. LLC, Dover, DE
Allianz Life Insurance Company of North America,
Allianz Private Equity Partners Europa III, Milan
99.63
100.0
Minneapolis, MN
100.0
New York, NY
Allianz Private Equity Partners IV, Milan
Allianz Global Life Ltd., Dublin
100.0
Allianz Life Insurance Japan Ltd., Tokyo
100.0
Allianz Private Equity Partners V, Milan
100.0 3
Allianz Global Risks US Insurance Company Corp.,
Chicago, IL
100.0
Allianz Life Insurance Lanka Ltd., Colombo
Allianz Life Insurance Malaysia Berhad p.l.c., Kuala
100.0
100.0 3
Allianz Private Equity UK Holdings Limited, London
Allianz Global Investors U.S. Holdings LLC, Dover, DE
100.0
Allianz Popular S.L., Madrid
60.0
Allianz Global Investors Nominee Services Ltd.,
Allianz Life Insurance Co. Ltd., Seoul
100.0
George Town
Allianz Popular Vida Compañía de Seguros y
100.0
Allianz Life Insurance Company Ltd., Moscow
100.0
Reaseguros S.A., Madrid
Allianz Life Insurance Company of New York,
100.0
100.0
Allianz Life Insurance Company of Missouri,
Allianz Potential, Paris
100.0 5
Allianz Global Investors Singapore Ltd., Singapore
100.0
Clayton, MO
100.0
Allianz Private Equity Partners Europa I, Milan
86.83
Allianz Global Investors Taiwan Ltd., Taipei
Allianz Global Investors Schweiz AG, Zurich
100.0
Allianz Properties Limited, Guildford
100.0
100.0
Allianz Holdings plc, Guildford
Allianz Hospitaliers Euro, Paris
100.0
Allianz Managed Operations & Services Nether-
lands B.V., Rotterdam
Allianz Renewable Energy Fund Management 1 Ltd.,
London
100.0
100.0
100.03
Allianz Managed Operations & Services Thailand
Allianz Renewable Energy Management AT GmbH,
Pottenbrunn
Allianz Holding France SAS, Paris
100.0
100.0
236
Annual Report 2015 Allianz Group
D- Consolidated Financial Statements
135 Consolidated Balance Sheets
136 Consolidated Income Statements
137 Consolidated Statements of
Comprehensive Income
138 Consolidated Statements of
Changes in Equity
139 Consolidated Statements of Cash Flows
141 Notes
%
OWNED 1
%
OWNED 1
Co. Ltd., Bangkok
77.0
Allianz Mali Assurances SA, Bamako
100.0
Allianz Groen Rente Fonds, Rotterdam
100.0 5
Lumpur
100.0
Allianz Prudence, Paris
Allianz Hayat ve Emeklilik A.S., Istanbul
99.55
89.0
Allianz Life Luxembourg S.A., Luxembourg
100.0
Allianz Re Dublin Limited, Dublin
100.0
Allianz Hellas Insurance Company S.A., Athens
100.0
Allianz Madagascar Assurances SA, Antananarivo
100.0
Allianz Real Estate France SAS, Paris
Allianz Hold Co Real Estate S.à r.l., Luxembourg
100.0
100.0
Allianz Malaysia Berhad p.l.c., Kuala Lumpur
75.0
Allianz Real Estate of America LLC, New York, NY
Allianz Holding eins GmbH, Vienna
100.0
Allianz Renewable Energy Partners I LP, London
100.0
100.0
Allianz Seguros S.A., São Paulo
Mombyasen Wind Farm AB, Halmstad
100.0
100.0
Personalized Brokerage Service LLC, Topeka, KS
100.0
Medi24 AG, Bern
Euler Hermes, Mierzejewska-Kancelaria Prawna
Sp.k, Warsaw
100.0
100.0
Martin Maurel Vie SA, Courbevoie
100.0
Pet Plan Ltd., Guildford
Euler Hermes World Agency SASU, Paris la Défense
100.0
100.0
Parc Eolien du Bois Guillaume SAS, Paris
Magdeburger Sigorta A.S., Istanbul
100.0
Euler Hermes UMA, Louisville, KY
100.0
100.0
Parc Eolien des Quatre Buissons SAS, Paris
Maevaara Vind AB, Stockholm
100.0
Parc Eolien Les Treize SAS, Paris
Pty Ltd., Sydney
100.0
Eurl 20/22 Le Peletier, Paris la Défense
Mondial Assistance France Services à la personne
100.0 5
95.0
Mondial Assistance France SAS, Paris
100.0
100.0
PGREF V 1301 Sixth Investors I LLC, Wilmington, DE
100.0
Toowong
100.0
FCT CIMU 92, Pantin
100.0
FCP LBPAM IDR, Paris
Eurosol Invest S.r.l., Udine
100.0
PGA Global Services LLC, Dover, DE
Mondial Assistance Australia Holding Pty Ltd.,
100.0
Euro Garantie AG, Pfäffikon
100.0
100.0
PFP Holdings Inc., Dover, DE
Mondial Assistance Asia Pte Ltd., Singapore
100.0
FAI Allianz Ltd., Sydney
100.0
100.0
Parc Eolien des Mistandines SAS, Paris
Les Vignobles de Larose S.A.S., Saint Laurent Médoc
Euler Hermes Sigorta A.S., Istanbul
100.0
Euler Hermes Servis s.r.o., Bratislava
100.0 5
LCF IDR, Paris
100.0
Euler Hermes Serviços Ltda., São Paulo
100.0
100.0
100.0
100.0
Parc Eolien de Croquettes SAS, Versailles
Parc Eolien de Fontfroide SAS, Versailles
Parc Eolien de Forge SAS, Paris
La Rurale SA, Paris
100.0
100.0
Königinstrasse | S.à r.I., Luxembourg
Euler Hermes Servicii Financiare S.R.L., Bucharest
100.0
Euler Hermes Services UK Limited, London
100.0
Kiinteistö OY Eteläesplanadi 2, Helsinki
100.0
80.0
99.9
100.0
Euler Hermes Singapore Services Pte Ltd., Singapore
LLC "Medexpress-service", Saint Petersburg
Maevaara Vind 2 AB, Stockholm
Euler Hermes Trade Credit Underwriting Agents
100.0
Euler Hermes Trade Credit Limited, Auckland
99.9
100.0
Parc Eolien des Joyeuses SAS, Versailles
Lloyd Adriatico Holding S.p.A., Trieste
100.0
100.0
100.0
Parc Eolien des Barbes d'Or SAS, Versailles
LLC "Risk Audit", Moscow
Euler Hermes Taiwan Services Limited, Taipei
100.0
Euler Hermes South Express S.A., Brussels
100.0
100.0
100.0
100.0
100.0
Parc Eolien de la Sole du Bois SAS, Paris
Parc Eolien de Longchamps SAS, Versailles
Parc Eolien de Ly-Fontaine SAS, Versailles
Parc Eolien de Remigny SAS, Versailles
LLC "Progress-Med", Moscow
100.0
100.0
PGREF V 1301 Sixth Investors I LP, Wilmington, DE
PIMCO (Schweiz) GmbH, Zurich
100.0
100.0
100.03
100.0
Mondial Contact Center Italia S.r.l., Milan
100.0
Honolulu, HI
100.0
Luxembourg
100.0
PIMCO Global Advisors (Luxembourg) S.A.,
Mondial Chile Asistencia Veinticuatro Horas y
Viajes Limitada, Santiago
Fireman's Fund Insurance Company of Hawaii Inc.,
100.0
Fireman's Fund Insurance Company of Ohio Corp.,
Hamilton
PIMCO Global Advisors (Ireland) Ltd., Dublin
100.0
Surrey
Fireman's Fund Insurance Company of Bermuda,
100.0
PIMCO Europe Ltd., London
Mondial Assistance United Kingdom Ltd., Croydon
100.0
Fireman's Fund Insurance Company Corp., Novato, CA
100.0 3
PIMCO Euro Low Duration Investment Grade Corpo-
rate Fund, Dublin
100.0
100.0
PIMCO Global Advisors (Resources) LLC, Dover, DE
Mondial Protection Corretora de Seguros Ltda.,
100.0
American Financial Marketing Inc., Minneapolis, MN
Caroline Berlin S.C.S., Luxembourg
93.2
100.0
Allianz Seguros S.A., Bogotá D.C.
100.0
AMOS Austria GmbH, Vienna
Centrale Photovoltaique de Saint Marcel
100.0
Allianz Selectie Fonds, Rotterdam
100.0
85.15
100.0
100.0
PIMCO Global Holdings LLC, Dover, DE
100.0 3
Fondo Chiuso Allianz Infrastructure Partners I, Milan
100.0
São Bernardo do Campo
100.0
PIMCO Global Advisors LLC, Dover, DE
100.0
Cincinnati, OH
sur aude SAS, Paris
Mondial Assistance Sp. z o.o., Warsaw
100.0
51.0
100.0
Mondial Assistance Mexico S.A. de C.V., Mexico City
Ferme Eolienne de Villemur-sur-Tarn S.à r.l.,
Versailles
100.0
PIMCO Canada Corp., Toronto, ON
100.0
Mondial Assistance Ireland Ltd., Dublin
100.0
Reaseguros S.A., Madrid
100.0
PIMCO Australia Pty Ltd., Sydney
PIMCO Canada Credit Bond Trust, Toronto, ON
100.0
Fénix Directo Compañía de Seguros y
100.0
PIMCO Asia Pte Ltd., Singapore
100.0³
FCT Rocade L2 Marseille, Paris
100.0
Mondial Assistance GmbH, Vienna
100.0
PIMCO Asia Ltd., Hong Kong
100.0
SAS, Paris
Mondial Assistance Indian Ocean LLC, Ebene
100.0 5
100.0
Mondial Assistance Portugal Serviços
Mondial Assistance Services Hellas A.E., Athens
Fireman's Fund Indemnity Corporation, Liberty
Corner, NJ
49.4 2,5
Town
100.0
PIMCO Emerging Markets Bond Fund III, George
Mondial Assistance Service España S.A., Madrid
100.0
Fireman's Fund Financial Services LLC, Dallas, TX
100.0
71.05
56.75
100.0 5
PIMCO Canada Credit Long Bond Trust, Toronto, ON
PIMCO Canadian Real Return Bond Fund, Toronto, ON
PIMCO Covered Bond Source UCITS ETF, Dublin
Mondial Assistance s.r.o., Prague
100.0
Financière Callisto SAS, Paris la Défense
100.0
Mondial Assistance Réunion S.A., Saint Denis
100.0
Financière Aldebaran SAS, Paris la Défense
100.0
de Assistência Lda., Lisbon
100.0
Ferme Eolienne des Jaladeaux S.à r.l., Versailles
100.0
100.0
Annual Report 2015 Allianz Group
Allianz Renewable Energy Management GmbH,
14.56
13.71
The average total number of employees for the year ended 31 Decem-
ber 2015 was 146,726.
PERSONNEL EXPENSES
DILUTED EARNINGS PER SHARE
Diluted earnings per share are calculated by dividing net income
attributable to shareholders by the weighted average number of
common shares outstanding for the period, both adjusted for the
effects of potentially dilutive common shares. These effects arise
from various share-based compensation plans of the Allianz Group.
PERSONNEL EXPENSES
Basic earnings per share (€)
€ MN
Social security contributions and employee
assistance
2015
2014
9,589
9,037
1,376
1,293
Salaries and wages
DILUTED EARNINGS PER SHARE
453,841,370
Weighted average number of common shares
outstanding
70,346
2015
2014
Asia Pacific & Africa
23,762
21,366
Net income attributable to shareholders used
to calculate basic earnings per share
454,367,277
America
15,021
6,616
6,221
Total
142,459
147,425
1- The decrease is mainly due to the disposal of Selecta.
14,355
63,7421
Expenses for pensions and other post-retirement
1,402
61,755
425,532
Weighted average number of common shares
outstanding after assumed conversion
454,429,033 454,266,902
Diluted earnings per share (€)
14.55
13.64
Share-based compensation plans
ISSUANCE OF THE DECLARATION OF COMPLIANCE
WITH THE GERMAN CORPORATE GOVERNANCE CODE
ACCORDING TO § 161 AKTG
The Declaration of Compliance of the publicly traded group
company Oldenburgische Landesbank AG was issued in December
2015 and has been made available to shareholders on a permanent
basis.
For the year ended 31 December 2015, the weighted average number of
common shares excludes 2,632,723 (2014: 2,738,082) treasury shares.
Annual Report 2015 Allianz Group
231
PRINCIPAL ACCOUNTANT FEES AND SERVICES
KPMG AG Wirtschaftsprüfungsgesellschaft (KPMG AG) serves as the
external auditing firm for the Allianz Group.
Fees billed by KPMG AG and the worldwide member firms of KPMG
International (KPMG) are disclosed in four categories:
On 10 December 2015, the Board of Management and the Supervisory
Board of Allianz SE issued the Declaration of Compliance according
to § 161 AktG, which has been made permanently available to share-
holders on the company's website.
benefits
Potentially dilutive common shares resulting from
assumed conversion of:
454,367,277
1,186
€ MN
Total
12,367
11,515
2015
2014
453,841,370
Net income attributable to shareholders
Effect of potentially dilutive common shares
(5)
6,221
(24)
Net income used to calculate diluted earnings
per share
6,611
6,197
Weighted average number of common shares
outstanding
6,616
KPMG FEES
Rest of Europe
40,600
New provisions
Additions to existing provisions
2015
2014
109
214
200
As of 1 January
8
24
Release of provisions recognized in prior years
Utilization of provisions via payments
(10)
(28)
(31)
(75)
Utilization of provisions via transfers
8
(163)
€ MN
The following table shows the changes in the provisions for
restructuring plans.
AZ-SGD Infrastrukturfonds GmbH, Munich
238
D- Consolidated Financial Statements
135 Consolidated Balance Sheets
136 Consolidated Income Statements
137 Consolidated Statements of
Comprehensive Income
138 Consolidated Statements of
Changes in Equity
139 Consolidated Statements of Cash Flows
141 Notes
PROVISIONS FOR RESTRUCTURING PLANS
The aggregate intrinsic value of share options outstanding was € - MN
and € 65 MN for the years ended 31 December 2015 and 2014, respec-
tively.
The shares settled by delivery of PIMCO LLC shares are accounted
for as equity-settled plans by PIMCO LLC. Therefore, PIMCO LLC meas-
ures the total compensation expense to be recognized for the equity-
settled shares based on their fair value as of the grant date. The total
compensation expense is recognized over the vesting period.
During the year ended 31 December 2015, the Allianz Group
recorded compensation expenses of € 31 MN (2014: € 31 MN) related to
these share options.
EMPLOYEE STOCK PURCHASE PLANS
The Allianz Group offers Allianz SE shares in 20 countries to entitled
employees at favorable conditions. The shares have a minimum
holding period of one to five years. During the year ended 31 Decem-
ber 2015, the number of shares sold to employees under these plans
was 575,584 (2014: 510,435). During the year ended 31 December 2015,
the Allianz Group recognized the difference between the issue price
charged to the subsidiaries of the Allianz Group and the discounted
price of the shares purchased by employees, amounting to € 18 MN
(2014: € 7 MN) as compensation expenses.
OTHER SHARE OPTION AND SHAREHOLDING PLANS
The Allianz Group has other local share-based compensation plans,
including share option and employee share purchase plans, none of
which, individually or in the aggregate, are material to the consoli-
dated financial statements. During the year ended 31 December 2015,
the total expenses recorded for these plans were € 3 MN (2014: € 2 MN).
50-Restructuring plans
As of 31 December 2015, the Allianz Group has provisions for restruc-
turing resulting from a number of restructuring programs in various
business segments. These provisions for restructuring primarily
include personnel costs, which result from severance payments for
employee terminations, and contract termination costs, including
those relating to the termination of lease contracts that will arise in
connection with the implementation of the relevant initiatives.
As of 31 December 2015, the M-unit options outstanding have an
exercise price of between € 16,947.44 and € 22,104.39 and a weighted-
average remaining contractual life of 2.17 years.
40,692
(35)
112
136 Consolidated Income Statements
137 Consolidated Statements of
Comprehensive Income
138 Consolidated Statements of
Changes in Equity
139 Consolidated Statements of Cash Flows
141 Notes
51 - Earnings per share
BASIC EARNINGS PER SHARE
Basic earnings per share are calculated by dividing net income attrib-
utable to shareholders by the weighted average number of common
shares outstanding for the period.
135 Consolidated Balance Sheets
52 Other information
NUMBER OF EMPLOYEES
BASIC EARNINGS PER SHARE
€ MN
as of 31 December
Germany
2015
2014
NUMBER OF EMPLOYEES
2
D- Consolidated Financial Statements
230
109
Foreign currency translation adjustments
As of 31 December
The development of the restructuring provisions reflects the imple-
mentation status of the restructuring initiatives. Based on the spe-
cific IFRS guidance, restructuring provisions are recognized prior to
when they qualify to be recognized under the guidance for other types
of provisions. In order to reflect the timely implementation of the
various restructuring initiatives, restructuring provisions, as far as
they are already "locked in", are transferred to the provision type that
would have been used if a restructuring initiative had not been in
place. This applies to each single contract. At the time an employee
has contractually agreed to leave the Allianz Group by signing either
an early retirement, a partial retirement (Altersteilzeit, which is a
specific type of an early retirement program in Germany), or a termi-
nation arrangement, the respective part of the restructuring provi-
sion is transferred to employee-related provisions. In addition, provi-
sions for vacant office spaces that result from restructuring initiatives
are transferred to “other” provisions after the offices have been com-
pletely vacated.
ALLIANZ GLOBAL INVESTOR'S RESTRUCTURING PLAN
Allianz Global Investors (AllianzGI) launched the restructuring pro-
gram AllianzGI 2.0 in the third quarter of 2015. The program aims to
position AllianzGI as a global investment leader and affects all func-
tions and regions in Europe and in parts of the U.S. in which AllianzGI
is operating. The AllianzGI 2.0 plan includes the "Business Excellence
Initiative” focusing on improving the effectiveness and efficiency
especially within business support and “Strategic Investments” in
future growth engines.
The program will result in a reduction of headcount of approxi-
mately 300 full-time equivalents by 2018. In addition, the reorganiza-
tion and outsourcing of business processes will be going along with
the impairment and shut-down of IT systems and early contract can-
cellation with service providers.
During the year ended 31 December 2015, restructuring charges
of € 41 MN were recorded. As of 31 December 2015, restructuring provi-
sions for this program amounted to € 36 MN.
Annual Report 2015 Allianz Group
Annual Report 2015 Allianz Group
229
During 2015, the Allianz Group realigned its Property-Casualty insur-
ance business in the U.S. One integral part of the reorganization was
the sale of the personal insurance business to ACE Limited by means
of a renewal rights arrangement. In addition, the realignment com-
prised the integration of Fireman's Fund Insurance Company's com-
mercial business into Allianz Global Corporate & Specialty North
America, as well as the internal transfer of the discontinued run-off
business through a reinsurance agreement within the Allianz Group.
During the year ended 31 December 2015, restructuring charges
of € 95 MN were recorded. As of 31 December 2015, restructuring provi-
sions of € 17 MN were recorded.
ALLIANZ BERATUNGS- UND VERTRIEBS-AG'S
RESTRUCTURING PLAN
In the second quarter of 2015, Allianz Beratungs- und Vertriebs-AG,
Germany, initiated a restructuring program in order to reorganize its
sales and distribution organization to meet changing client expecta-
tions as well as new regulatory requirements and to strengthen sus-
tainability and competitiveness. A reduction of 368 employees in total
is expected, mainly by implementing an early retirement program
and by offering severance payments in addition to natural fluctuation.
In this regard, restructuring charges of € 76 MN were recorded in
2015. Restructuring provisions amounted to € 14 MN as of 31 Decem-
ber 2015.
OLDENBURGISCHE LANDESBANK'S RESTRUCTURING PLAN
To increase customer focus and improve profitability, the bank is
planning a thorough implementation of integrated digitalization and
the further introduction of online products and consulting elements
as part of its strategic program “OLB 2019". The branch network will
be adjusted in the course of this development. The complexity of end-
to-end processes and range of products will be reduced. The reduc-
tion of complexity will result in lower staffing requirements.
EFFECT OF THE REVERSAL OF DISCOUNTING
For the years ended 31 December 2015 and 2014, there was no effect
of the reversal of discounting arising from the passage of time.
FIREMAN'S FUND'S RESTRUCTURING PLAN
€ MN
During the year ended 31 December 2015, restructuring charges
of € 10 MN were recorded for this program. Restructuring provisions
amounted to € 10 MN as of 31 December 2015.
thereof: KPMG AG
100.0
ACP Vermögensverwaltung GmbH & Co. KG Nr. 4a,
Munich
Allianz Private Equity Partners Verwaltungs GmbH,
AZ-Argos 69 Vermögensverwaltungsgesellschaft
mbH, Munich
100.0
100.0
Munich
Allianz Private Equity GmbH, Munich
100.0
100.0
Allianz Private Krankenversicherungs-Aktiengesell-
schaft, Munich
AZ-Argos 70 Vermögensverwaltungsgesellschaft
mbH & Co. KG, Munich
100.0
100.0
ACP Vermögensverwaltung GmbH & Co. KG Nr. 4d,
Munich
Allianz ProzessFinanz GmbH, Munich
ACP Vermögensverwaltung GmbH & Co. KG Nr. 4c,
Munich
100.0
100.0
AZ-Argos 68 Vermögensverwaltungsgesellschaft
mbH, Munich
0.02
Allianz Pension Service GmbH, Munich
Allianz Pensionsfonds Aktiengesellschaft, Stuttgart
Allianz Pensionskasse Aktiengesellschaft, Stuttgart
100.0
100.0
AZ-Argos 61 Vermögensverwaltungsgesellschaft
mbH & Co. KG, Munich
100.0
100.0
100.0
ACP GmbH & Co. Beteiligungen KG II, Munich
Allianz PK-PD Fonds, Frankfurt am Main
AZ-Argos 64 Vermögensverwaltungsgesellschaft
mbH & Co. KG, Munich
100.0
100.0 3
ACP Vermögensverwaltung GmbH & Co. KG Nr. 4,
Munich
Allianz PKV-PD Fonds, Frankfurt am Main
100.0 3
0.02
ACP GmbH & Co. Beteiligungen KG, Munich
AZ-Argos 71 Vermögensverwaltungsgesellschaft
mbH & Co.KG, Munich
100.0
100.0
Allianz Real Estate Germany GmbH, Stuttgart
100.0 3
100.0
Alida Grundstücksgesellschaft mbH & Co. KG,
Hamburg
Allianz Real Estate GmbH, Munich
100.0
AZRE AZD P&C Master Fund, Munich
AZS-Arges Vermögensverwaltungsgesellschaft mbH,
Munich
94.8
Allianz Rechtsschutz-Service GmbH, Munich
100.0
AZ-SGD Direkt Infrastruktur GmbH, Munich
100.0
KPMG worldwide
100.0 3
100.0
100.0
100.0 3
AGCS Vermögensverwaltungsgesellschaft mbH &
Co. KG, Munich
ACP Vermögensverwaltung GmbH Nr. 4 d. 1, Munich
ADEUS Aktienregister-Service-GmbH, Munich
AGA Service Deutschland GmbH, Aschheim
Allianz PV 1 Fonds, Frankfurt am Main
100.03
AZ-GARI Vermögensverwaltungsgesellschaft mbH
99.3
& Co. KG, Munich
100.0
Allianz Re Asia, Frankfurt am Main
Allianz PV WS Fonds, Frankfurt am Main
AZL AI Nr. 1 GmbH, Munich
100.0
Allianz PV-RD Fonds, Frankfurt am Main
100.0
100.0 3
AZL PE Nr. 1 GmbH, Munich
100.0
79.6
Consolidated affiliates
100.0 3
OWNED 1
All other fees
6.2
6.0
3.0
2.9
Total
54.8
1.2
18.0
Audit fees
25
54.5
KPMG billed the Allianz Group an aggregate of € 39.6 MN (2014: € 38.1 MN)
in connection with professional services rendered for the audit of the
Allianz Group's consolidated financial statements, statutory audits
of the financial statements of Allianz SE and its subsidiaries, and ser-
vices normally provided by KPMG in connection with statutory and
regulatory filings or engagements. These services consisted mainly
of periodic review engagements and the annual audit.
Audit-related fees
KPMG charged the Allianz Group an aggregate of € 6.9 MN (2014:
€ 7.9 MN) for assurance and services that are reasonably related to the
performance of the audit or to the review of the financial statements
and are not reported within audit fees. These services consisted pri-
marily of advisory and consulting services related to accounting and
financial reporting standards and financial due diligence services.
Tax fees
20.5
KPMG fees for professional services, rendered for tax advice and tax
compliance, amounted to € 1.8 MN (2014: € 2.8 MN) and resulted pri-
marily from tax advice.
0.3
1.8
2014
9.9
GERMANY
2015
2014
2015
Audit fees
2.8
39.6
9.3
Audit-related fees
6.9
7.9
5.4
6.5
Tax fees
38.1
All other fees
Allianz AADB Fonds, Frankfurt am Main
All services provided by KPMG to Allianz Group companies must be
approved by the Audit Committee of the Allianz SE Supervisory Board.
Services other than audit services must be pre-approved by the Audit
Committee. The Audit Committee pre-approval process is based on
the use of a "Positive List" of activities decided by the Audit Commit-
tee and, in addition, a “Guiding Principles and User Test" is applied.
Group Compliance and KPMG report to the Audit Committee periodi-
cally with respect to services performed.
53 — Subsequent events
The Allianz Group was not subject to any subsequent events that sig-
nificantly impacted the Group's financial results after the balance
sheet date and before the financial statements were authorized for
issue.
Munich, 16 February 2016
Allianz SE
The Board of Management
Chies Bão Sergio Ballinat
N. Moscher
had The
M. Zimmawer
Annual Report 2015 Allianz Group
233
List of participations of the Allianz Group as of 31 December 2015
according to § 313 (2) HGB
%
%
OWNED 1
KPMG invoiced the Allianz Group an aggregate of € 6.2 MN (2014:
€ 6.0 MN) for other products and services, which consisted primarily
of services under the guidance of Allianz Group management and
general consulting services.
OWNED 1
139 Consolidated Statements of Cash Flows
141 Notes
138 Consolidated Statements of
Changes in Equity
Dista
Board of Management and Supervisory Board compensation by
individual is included in the Remuneration Report. The information
provided there is considered part of these consolidated financial
REMUNERATION FOR THE BOARD OF MANAGEMENT
The equity-related remuneration is comprised in 2015 of 84,008¹
(2014: 71,8632) Restricted Stock Units (RSU).
RSU with a total fair value of € 9.7 MN (2014: € 10.6 MN) were granted
to the Board of Management for the year ended 31 December 2015.
In 2015, remuneration and other benefits totaling € 7 MN (2014:
€ 6 MN) were paid to former members of the Board of Management
and dependents, while reserves for current pension obligations and
accrued pension rights totaled € 122 MN (2014: € 102 MN).
The total remuneration for all Supervisory Board members,
including attendance fees, amounted to € 2.0 MN (2014: € 2.0 MN).
The sum of the total remuneration of the Allianz SE Board of
Management for 2015, including the payments of the MTB 2013-2015
and excluding the pension service cost, amounts to € 57 MN (2014
excluding the notional accruals for MTB 2013-2015: € 30 MN).
statements.
As of 31 December 2015, the Board of Management is comprised of
9 members. The following values reflect the full Board of Manage-
ment active in the respective year.
KPMG is the main auditing firm for the Allianz Group and is
assigned more than 68% of all audit-related tasks. Auditing firms
other than KPMG billed the Allianz Group an aggregate of € 21.4 MN
(2014: € 16.4 MN).
Annual Report 2015 Allianz Group
1- The relevant share price used to determine the final number of RSUS granted is only available after sign-off
of the Annual Report by the external auditors, thus numbers are based on a best estimate.
2- The disclosure in the Annual Report 2014 was based on a best estimate of the RSU grants. The figure shown
here for 2014 now includes the actual fair value as of the grant date (12 March 2015). The value therefore
differs from the amount disclosed last year.
D- Consolidated Financial Statements
135 Consolidated Balance Sheets
136 Consolidated Income Statements
232
137 Consolidated Statements of
Comprehensive Income
DR. AXEL THEIS
Global Insurance Lines & Anglo Markets
Global Property-Casualty
Allianz Asset Management AG
Allianz Investment Management SE
Membership in comparable¹ supervisory bodies
Membership in Group bodies
Asset Management, US Life Insurance
JAY RALPH
Allianz Worldwide Partners SAS
(Chairman until 1 December 2015)
Allianz Life Insurance Company of North America
(Chairman)
since 7 May 2015
since 1 June 2015
Allianz Global Corporate & Specialty SE (Chairman)
Membership in comparable' supervisory bodies
Membership in Group bodies
Allianz Australia Ltd.
since 1 September 2015
Allianz Insurance plc (Chairman)
Allianz Irish Life Holdings plc
since 20 March 2015
Euler Hermes S.A.
DR. DIETER WEMMER
Finance, Controlling, Risk
Membership in other statutory supervisory boards
and SE administrative boards in Germany
Membership in Group bodies
Membership in other statutory supervisory boards
and SE administrative boards in Germany
FC Bayern München AG (Vice Chairman)
since 18 May 2015
Allianz Managed Operations and Services SE (Chairman)
Membership in comparable¹ supervisory bodies
Membership in Group bodies
DR. WERNER ZEDELIUS
Insurance German Speaking Countries
Insurance Central & Eastern Europe
since 1 September 2015
Membership in other statutory supervisory boards
and SE administrative boards in Germany
ProCurand GmbH & KGaA (Chairman)
Membership in Group bodies
DR. CHRISTOF MASCHER
Operations, Allianz Worldwide Partners
Membership in other statutory supervisory boards
and SE administrative boards in Germany
Volkswagen Autoversicherung AG
Membership in Group bodies
MANUEL BAUER
Membership in Group bodies
SERGIO BALBINOT
Insurance Western & Southern Europe
Insurance Middle East, Africa, India
since 1 September 2015
Membership in comparable' supervisory bodies
Membership in Group bodies
Allianz France S.A.
Allianz S.p.A. (Vice Chairman since 7 February 2015)
Allianz Sigorta A.S. (Vice Chairman)
Allianz Yasam ve Emeklilik A.S.
Membership in Group bodies
Allianz Compañía de Seguros y Reaseguros S.A.
Companhia de Seguros Allianz Portugal S.A.
until 31 August 2015
Membership in comparable¹ supervisory bodies
Bajaj Allianz General Insurance Co. Ltd.
Bajaj Allianz Life Insurance Co. Ltd.
Membership in Group bodies
Allianz Hungária Biztosító Zrt. (Chairman)
Allianz Tiriac Asigurari S.A. (Chairman)
DR. HELGA JUNG
Insurance Iberia & Latin America, Legal & Compliance,
Mergers & Acquisitions
Membership in other statutory supervisory boards
and SE administrative boards in Germany
Membership in Group bodies
Allianz Asset Management AG (Chairwoman)
since 23 February 2015
Allianz Global Corporate & Specialty SE (Vice Chairwoman)
Membership in comparable' supervisory bodies
Unicredit S.p.A.
Insurance Growth Markets
Allianz Deutschland AG (Chairman)
Allianz Investment Management SE
100.0
Allianz Elementar Lebensversicherungs-AG (Chairman)
Allianz Elementar Versicherungs-AG (Chairman)
Protexia France S.A., Paris
South City Office Broodthaers SA, Brussels
60.0
SIFCOM Assur S.A., Abidjan
100.0 3
100.0
Prosperaz Fundo de Investimento Renda Fixa Crédito
Privado, São Paulo
100.0
SCI Vilaje, Courbevoie
100.0
100.0
SOFE Two Ltd., Bangkok
100.0
SCIJ.T., Courbevoie
100.0
100.0
SCI AVIP de Camp Laurent, Courbevoie
66.0
Société Nationale Foncière S.A.L., Beirut
SOFE One Ltd., Bangkok
100.0
Primacy Underwriting Management Pty Ltd.,
Melbourne
Allianz France S.A. (Vice Chairman)
Allianz S.p.A.
100.0
100.0
SpaceCo S.A., Paris
Société Immobilière de l'Avenue du Roule SAS,
Courbevoie
Allianz Investmentbank AG (Vice Chairman)
Allianz Suisse Lebensversicherungs-Gesellschaft AG
(Vice Chairman)
Allianz Suisse Versicherungs-Gesellschaft AG
(Vice Chairman)
DR. MAXIMILIAN ZIMMERER
Investments, Global Life/Health
Insurance Asia Pacific
since 1 September 2015
Membership in other statutory supervisory boards
and SE administrative boards in Germany
Membership in Group bodies
Allianz Asset Management AG
Allianz Investment Management SE (Chairman)
Allianz Lebensversicherungs-AG (Vice Chairman)
1- We regard memberships in other supervisory bodies as "comparable" if the company is listed on a stock exchange or has more than 500 employees.
248
Annual Report 2015 Allianz Group
97.8
100.0
Top Versicherungs-Vermittler Service GmbH, Vienna
Standard General Agency Inc., Dallas, TX
PT Asuransi Allianz Utama Indonesia Ltd., Jakarta
99.8
100.0
PT Asuransi Allianz Life Indonesia p.l.c., Jakarta
100.0
Membership in comparable¹ supervisory bodies
Membership in Group bodies
Sofiholding S.A., Brussels
Vonovia SE (Chairman), formerly named
until 16 March 2015
and SE administrative boards in Germany
Bertelsmann Management SE
Bertelsmann SE & Co. KGaA
Deutsche Annington Immobilien SE
Deutsche Telekom AG
METRO AG
until 4 September 2015
ROLF ZIMMERMANN
Vice Chairman
Chairman of the (European) SE Works Council
of Allianz SE
Membership in other statutory supervisory boards
DANTE BARBAN
CHRISTINE BOSSE
Former Chief Executive Officer of Tryg A/S
Membership in comparable¹ supervisory bodies
Aker ASA
until 9 April 2015
P/F BankNordik (Chairwoman)
since 25 March 2015
TDC A/S
GABRIELE BURKHARDT-BERG
Chairwoman of the Group Works Council of Allianz SE
JEAN-JACQUES CETTE
Chairman of the Group Works Council
of Allianz France S.A.
Employee of Allianz S.p.A.
Former Chairman of the Board of Management
of E.ON AG
Vice Chairman
DR. WULF H. BERNOTAT
Chairman of Banco Popular
Primacy Underwriting Management Ltd., Wellington
ANTHONI SALIM
President and Chief Executive Officer of Salim Group
LOUIS SCHWEITZER
Président d'Honneur de Renault
LORD IAIN VALLANCE OF TUMMEL
Chairman of Amsphere Ltd.
MOHAMED A. EL-ERIAN
since 1 January 2016
Chief Economic Advisor to Allianz
JACQUES A. NASSER
Chairman of BHP Billiton
246
Annual Report 2015 Allianz Group
E- Further Information
245 Joint Advisory Council of the
Allianz Companies
246 International Advisory Board
247 Mandates of the Members of
the Supervisory Board
248 Mandates of the Members of
the Board of Management
249 Glossary
Mandates of the Members
of the Supervisory Board
DR. HELMUT PERLET
Chairman
Former Member of the Board of Management
of Allianz SE
Membership in other statutory supervisory boards
and SE administrative boards in Germany
Commerzbank AG
GEA Group AG
Membership in comparable¹ supervisory bodies
Membership in Group bodies
Allianz France S.A.
IRA GLOE-SEMLER
Regional Representative Financial Services
of ver.di Hamburg
FRANZ HEISS
247
Mandates of the Members
of the Board of Management
OLIVER BÄTE
Chairman of the Board of Management
since 7 May 2015
Global Property-Casualty
until 6 May 2015
Membership in other statutory supervisory boards
and SE administrative boards in Germany
Membership in Group bodies
Allianz Deutschland AG
since 17 March 2015
Membership in comparable¹ supervisory bodies
Membership in Group bodies
Allianz France S.A. (Vice Chairman since 7 May 2015)
Allianz S.p.A. (Vice Chairman until 6 February 2015)
MICHAEL DIEKMANN
until 6 May 2015
Chairman of the Board of Management
Membership in other statutory supervisory boards
and SE administrative boards in Germany
BASF SE (Vice Chairman)
Linde AG (Vice Chairman)
Siemens AG
Membership in Group bodies
Allianz Asset Management AG (Chairman)
until 23 February 2015
Allianz Deutschland AG
Annual Report 2015 Allianz Group
Membership in comparable¹ supervisory bodies
Membership in Group bodies
1- We regard memberships in other supervisory bodies as "comparable" if the company is listed on a stock exchange or has more than 500 employees.
Nestlé Deutschland AG
until 31 July 2015
Employee of Allianz Beratungs- und Vertriebs-AG
PROF. DR. RENATE KÖCHER
Head of "Institut für Demoskopie Allensbach"
JÜRGEN LAWRENZ
since 1 August 2015
Employee of Allianz Managed Operations & Services SE
Membership in other statutory supervisory boards
and SE administrative boards in Germany
Membership in Group bodies
Allianz Managed Operations & Services SE
JIM HAGEMANN SNABE
Chairman of World Economic Forum USA
Membership in other statutory supervisory boards
and SE administrative boards in Germany
SAP SE
Siemens AG
Membership in comparable¹ supervisory bodies
Bang & Olufsen A/S (Vice Chairman)
Danske Bank A/S
PETER DENIS SUTHERLAND
Former Chairman of the Board of Directors
of Goldman Sachs International
Membership in comparable¹ supervisory bodies
BW Group Ltd.
Goldman Sachs International (Chairman)
until 30 June 2015
Koç Holding A.Ş.
(Allensbach Institute)
Membership in other statutory supervisory boards
and SE administrative boards in Germany
BMW AG
Infineon Technologies AG
Robert Bosch GmbH
97.5
100.0
100.0
100.0
100.0
100.0
Windpark GHW GmbH, Pottenbrunn
Windpark Ladendorf GmbH, Vienna
Windpark Les Cent Jalois SAS, Versailles
Windpark Scharndorf GmbH, Pottenbrunn
Windpark Zistersdorf GmbH, Pottenbrunn
Wm. H McGee & Co. (Bermuda) Ltd., Hamilton
100.0
Sättravallen Wind Power AB, Strömstad
49.9 2,5
PIMCO International Dividend Fund, Wilmington, DE
100.0
SAS Société d'Exploitation du Parc Eolien de Nélausa,
Paris
100.0
72.8 5
100.0
PIMCO GP XV LLC, Wilmington, DE
100.0
SAS Passage des princes, Paris la Défense
100.0
PIMCO GP XIV LLC, Wilmington, DE
100.0
SAS Madeleine Opéra, Paris la Défense
ANGEL RON
PIMCO GP XIII LLC, Wilmington, DE
PIMCO Income Fund Wholesale, Melbourne
100.0
100.0
PIMCO Investments LLC, Dover, DE
PIMCO RAE Fundamental Emerging Markets Fund,
Dublin
100.0
Yorktown Financial Companies Inc., Minneapolis, MN
100.0
SCI Allianz ARC de Seine, Paris la Défense
100.0
Ltda., Rio de Janeiro
100.0
YAO Investment S.à r.l., Luxembourg
100.0
SCI 46 Desmoulins, Paris la Défense
PIMCO Latin America Administradora de Carteiras
100.0
Wm. H McGee & Co. of Puerto Rico Inc., San Juan
100.0
100.0
SC Tour Michelet, Paris la Défense
PIMCO Japan Ltd., Road Town
100.0
Wm. H McGee & Co. Inc., New York, NY
100.0
52.0
Saudi NEXTCARE LLC, Al Khobar
90.0
SAS Angel Shopping Centre, Paris la Défense
100.0
PIMCO GP XII LLC, Wilmington, DE
SAS Allianz Forum Seine, Paris la Défense
100.0
PIMCO GP IX LLC, Wilmington, DE
100.0
87.75
VermögensManagement 2027 Plus, Senningerberg
VertBois S.à r.l., Luxembourg
100.0
SAS Allianz Etoile, Paris la Défense
100.0
100.0
SAS 20 pompidou, Paris la Défense
100.0
PIMCO GP I LLC, Wilmington, DE
PIMCO GP III LLC, Wilmington, DE
%
OWNED 1
1
%
OWNED
%
OWNED 1
139 Consolidated Statements of Cash Flows
141 Notes
138 Consolidated Statements of
Changes in Equity
137 Consolidated Statements of
Comprehensive Income
136 Consolidated Income Statements
135 Consolidated Balance Sheets
D- Consolidated Financial Statements
100.0
SCI Allianz Chateaudun, Paris la Défense
Vigny Depierre Conseils SAS, Archamps
PIMCO GP V LLC, Wilmington, DE
87.5
WFC Investments Sp. z o.o., Warsaw
100.0
SAS Allianz Serbie, Paris la Défense
100.0
PIMCO GP XI LLC, Wilmington, DE
100.0
Vordere Zollamtsstraße 13 GmbH, Vienna
100.0
SAS Allianz Rivoli, Paris la Défense
100.0
PIMCO GP X LLC, Wilmington, DE
100.0 5
Volta, Paris
100.0
SAS Allianz Platine, Paris la Défense
100.0
PIMCO GP VII LLC, Wilmington, DE
100.0
Viveole SAS, Versailles
100.0
SAS Allianz Logistique, Paris la Défense
100.0
100.0
100.0
100.0 5
ZAD Allianz Bulgaria, Sofia
PIMCO REIT Management LLC, Wilmington, DE
PIMCO Select U.S. High Yield BB-B Bond Fund, Dublin
PIMCO Select UK Retirement Strategy Fund, Dublin
PIMCO U.S. Dividend Fund, Wilmington, DE
90.75
100.0
business lounge GmbH, Vienna
100.0
Società Agricola San Felice S.p.A., Milan
94.05
100.0
Assurance France Aviation S.A., Paris
100.0
SLC "Allianz Life Ukraine", Kiev
96.05
100.0
Allianz Risk Consultants B.V., Amsterdam
94.8
Sirius S.A., Luxembourg
94.95
100.0
100.0
Allianz Insurance Services Ltd., Athens
Allianz Northern Ireland Limited, Belfast
100.0
Silex Gas Norway AS, Oslo
94.55
Société de Production D'électricité D'harcourt
Moulaine SAS, Versailles
100.0
COGAR S.à r.I., Paris
100.0
Société Foncière Européenne B.V., Amsterdam
65.9
POD Allianz Bulgaria AD, Sofia
99.6
Office Sénégalais de Conseils en Assurance SARL,
Dakar
56.0
Société Européenne de Protection et de Services
d'Assistance à Domicile S.A., Paris
100.0 5
PIMCO-World Bank Gemloc Fund, Luxembourg
46.12.5
99.55
Knightsbridge Allianz LP, Bartlesville, OK
100.0
100.0
ICC Evaluation SARL, Paris
Société d'Exploitation du Parc Eolien d'Aussac Vadalle
SAS, Paris
92.85
57.65
100.0
Gesellschaft für Vorsorgeberatung AG, Bern
100.0
Société d'Energie Eolien Cambon SAS, Versailles
100.0
100.0
RE-AA SA, Abidjan
Silex Gas Management AS, Oslo
100.0
PIMCO RAE Fundamental US Fund, Dublin
Non-consolidated affiliates
100.0
SCI Stratus, Courbevoie
98.95
75.0
SCI ESQ, Paris la Défense
100.0
ZiOst Energy GmbH & Co. KG, Pottenbrunn
100.0
SCI AVIP SCPI Selection, Courbevoie
PIMCO RAE Fundamental Global Equities Plus Fundo
de Investimento Multimercado Investimento no
Exterior, Rio de Janeiro
51.0
ZAD Energia, Sofia
100.0
SCI Allianz Messine, Paris la Défense
97.25
99.0
ZAD Allianz Bulgaria Zhivot, Sofia
PIMCO RAE Fundamental Global Developed Fund,
Dublin
100.0
SCI Allianz Invest Pierre, Paris
87.4
74.95
96.2 5
SCI Via Pierre 1, Paris la Défense
PIMCO Real Return Limited Duration Fund, Boston, MA
PIMCO RealPath Blend 2020 Fund, Wilmington, DE
PIMCO RealPath Blend 2025 Fund, Wilmington, DE
PIMCO RealPath Blend 2030 Fund, Wilmington, DE
PIMCO RealPath Blend 2035 Fund, Wilmington, DE
PIMCO RealPath Blend 2040 Fund, Wilmington, DE
PIMCO RealPath Blend 2045 Fund, Wilmington, DE
PIMCO RealPath Blend 2050 Fund, Wilmington, DE
PIMCO RealPath Blend 2055 Fund, Wilmington, DE
PIMCO RealPath Blend Income Fund, Wilmington, DE
PIMCO RealPath 2055 Fund, Boston, MA
Allianz Global Corporate & Specialty Escritório de
Representação no Brasil Ltda., Rio de Janeiro
100.0
Siac Services S.r.l., Rome
85.15
100.0
100.0
Allianz Financial Services S.A., Athens
la Défense
94.45
SI 173-175 Boulevard Haussmann SAS, Paris
100.0
Allianz America Latina S.C. Ltda., Rio de Janeiro
77.95
100.0
SDIII Energy GmbH & Co. KG, Pottenbrunn
100.0
AGF Pension Trustees Ltd., Guildford
95.15
100.0
SCI Volnay, Paris la Défense
99.9
A. Diffusion S.A., Nanterre
96.15
100.0
DR. GIANFELICE ROCCA
Chairman of Techint Group of Companies
100.0
since 28 May 2015
Solunion Compañía Internacional de Seguros y
Reaseguros SA, Madrid
50.0
Sri Ayudhya Capital Public Company Limited,
Bangkok
16.8
TopTorony Ingatlanhasznosító Zrt., Budapest
50.0
Zagrebacka banka d.d., Zagreb
11.7
Triskelion Property Holding Designated Activity
Company, Dublin
50.0
Waterford Blue Lagoon LP, Wilmington, DE
49.08
Associates
Adriatic Motorways d.d., Zagreb
33.3
Allianz EFU Health Insurance Ltd., Karachi
49.0
Allianz Euro Credit SRI, Paris
33.45
Allianz Euro Oblig Court Terme ISR, Paris
24.15
Allianz Euro Tactique, Paris
35.05
8.4
Banco BPI S.A., Porto
50.0
SES Shopping Center AT1 GmbH, Salzburg
239
PTE Allianz Polska S.A., Warsaw
%
OWNED 1
%
OWNED 1
One Beacon Joint Venture LP, Wilmington, DE
Porterbrook Holdings I Limited, London
50.0
30.08
SNC Société d'aménagement de la Gare de l'Est, Paris
Solveig Gas Holdco AS, Oslo
49.0
30.0
Previndustria - Fiduciaria Previdenza
Allianz Fóndika S.A. de C.V., Mexico City
Wildlife Works Carbon LLC, San Francisco, CA
Imprenditori S.p.A., Milan
50.0
Queenspoint S.L., Madrid
100.0 8
Other participations between 5 and 20%
RMPA Holdings Limited, Colchester
56.08
of voting rights
SC Holding SAS, Paris
50.0
Al Nisr Al Arabi, Amman
18.0
10.09
Annual Report 2015 Allianz Group
26.8
20.95
Assurcard N.V., Haasrode
20.0
Autoelektro tehnicki pregledi d.o.o., Vojnić
49.0
Bajaj Allianz General Insurance Company Ltd., Pune
26.0
Bajaj Allianz Life Insurance Company Ltd., Pune
26.0
Bazalgette Equity Ltd., London
34.3
Berkshire Hathaway Services India Private Limited,
New Delhi
20.0
Berkshire India Private Limited, New Delhi
20.0
Broker on-line de Productores de Seguros S.A.,
Buenos Aires
30.0
Brunei National Insurance Company Berhad Ltd.,
Bandar Seri Begawan
25.0
Chicago Parking Meters LLC, Wilmington, DE
49.9
CJSC "MedCentreStrakh", Moscow
36.4
26.2
Areim Fastigheter 3 AB, Stockholm
23.3
Areim Fastigheter 2 AB, Stockholm
1- Percentage includes equity participations held by dependent
entities in full, even if the Allianz Group's share in the dependent
entity is below 100%.
2-Controlled by the Allianz Group.
3-Investment fund.
4-Releasing impact according to § 264 (3) HGB through the Allianz
Group's consolidated financial statements.
5- Mutual, private equity or special fund.
6-Group share through indirect holder Roland Holding GmbH,
Munich: 75.2%.
7-Insolvent.
Allianz Invest Osteuropa, Vienna
21.55
8- Classified as joint venture according to IFRS 11.
Allianz High Dividend Asia Pacific, Senningerberg
Allianz Invest Vorsorgefonds, Vienna
9- Classified as associate according to IAS 28.
Allianz Saudi Fransi Cooperative Insurance Company,
Riyadh
32.5
Allianz Securicash SRI, Paris
22.35
Allianz Sécurité PEA, Paris
34.15
Archstone Multifamily Partners AC JV LP,
Wilmington, DE
40.0
Archstone Multifamily Partners AC LP, Wilmington, DE
28.6
28.65
CPIC Allianz Health Insurance Co. Ltd., Shanghai
100.0
NRF (Finland) AB, Västeras
83.3 5,8
Europe Logistics Venture 1 FCP-FIS, Luxembourg
Fiumaranuova S.r.l., Genoa
100.0
Top Versicherungsservice GmbH, Vienna
100.0
Redoma S.à r.l., Luxembourg
100.0
Vienna
100.0
50.0
Euromarkt Center d.o.o., Ljubljana
Top Immo Besitzgesellschaft B GmbH & Co. KG,
Real FR Haussmann SAS, Paris la Défense
100.0
100.0
50.0
50.0
50.0
80.0 8
80.0 8
50.0
Atenction Integral a la Dependencia S.L., Cordoba
AZ/JH Co-Investment Venture (DC) LP, Wilmington, DE
AZ/JH Co-Investment Venture (IL) LP, Wilmington, DE
Bajaj Allianz Financial Distributors Limited, Pune
Companhia de Seguro de Créditos S.A., Lisbon
Dorcasia Ltd., Sydney
Top Immo A GmbH & Co. KG, Vienna
Real Faubourg Haussmann SAS, Paris la Défense
100.0
50.18
Rhea SA, Luxembourg
100.0
Top Vorsorge-Management GmbH, Vienna
100.0
Saint-Barth Assurances S.à r.l., St. Barts
50.05
Market Street Trust, Sydney
100.0
TU Allianz Polska S.A., Warsaw
100.0
SA Carène Assurance, Paris
50.0
Israel Credit Insurance Company Ltd., Tel Aviv
100.0
50.0
Top Assistance Service GmbH, Vienna
International Shopping Centre Investment S.A.,
Luxembourg
Roster Financial LLC, Mount Laurel, NJ
100.0 3
Rivage Richelieu 1, Paris
100.0
Warsaw
100.0
GmbH, Vienna
49.0 8
Guotai Jun'an Allianz Fund Management Co. Ltd.,
Shanghai
Towarzystwo Ubezpieczen Euler Hermes S.A.,
Risikomanagement und Softwareentwicklung
75.0
Trafalgar Insurance Public Limited Company,
Guildford
50.0
68.75
100.0
100.0
50.0
Allee-Center Kft., Budapest
The American Insurance Company Corp.,
Quality 1 AG, Bubikon
94.0
100.0
50.0
A&A Centri Commerciali S.r.I., Milan
TFI Allianz Polska S.A., Warsaw
Q207 S.C.S., Luxembourg
100.0
99.9
Joint ventures
Téléservices et Sécurité "TEL2S" SARL, Chatillon
European Outlet Mall Fund FCP-FIS, Luxembourg
Q 207 GP S.à r.l., Luxembourg
100.0
100.0
StocksPLUS Management Inc., Dover, DE
NET4GAS Holdings s.r.o., Prague
50.0
San Francisco Reinsurance Company Corp.,
Petaluma, CA
UP 36 SA, Brussels
100.0
Cincinnati, OH
100.0
Allianz C.P. General Insurance Co. Ltd., Bangkok
50.0
100.0
Tihama Investments B.V., Amsterdam
RB Fiduciaria S.p.A., Milan
100.0
100.0
Three Pillars Business Solutions Limited, Guildford
Ticket Guard Small Amount & Short Term Insurance
Co. Ltd., Tokyo
100.0
Rävaberget Nät AB, Stockholm
100.0 3
RAS Antares, Milan
100.0
Quintet Properties Ltd., Dublin
RCM Dynamic Multi-Asset Plus VIT, Boston, MA
99.4
100.0
Questar Capital Corporation, Minneapolis, MN
50.0
Ancilyze Technologies LLC, Oakbrook Terrace, IL
100.0
75.08
AMLI-Allianz Investment LP, Wilmington, DE
The Annuity Store Financial & Insurance Services LLC,
Sacramento, CA
100.0
Questar Asset Management Inc., Ann Arbor, MI
100.0
Questar Agency Inc., Minneapolis, MN
The MI Group Limited, Guildford
TU Allianz Zycie Polska S.A., Warsaw
22.9
36.0
Pages 244-252
E- Further Information
245 Joint Advisory Council of the
Allianz Companies
246 International Advisory Board
247 Mandates of the Members of
the Supervisory Board
248 Mandates of the Members of
the Board of Management
249 Glossary
Joint Advisory Council of the Allianz Companies
DR. HELMUT PERLET
Chairman
Chairman of the Supervisory Board
Allianz SE
DR. KURT BOCK
Chairman of the Board of Executive Directors
BASF SE
DR. THOMAS ENDERS
Chief Executive Officer
Airbus Group
FRANZ FEHRENBACH
Managing Partner
Robert Bosch Industrietreuhand KG
Chairman of the Supervisory Board
Robert Bosch GmbH
DR. RÜDIGER GRUBE
Chairman of the Board and Chief Executive Officer
Deutsche Bahn AG
DR. JÜRGEN HERAEUS
until 31 December 2015
Chairman of the Supervisory Board
Heraeus Holding GmbH
PROF. DR. DIETER HUNDT,
SENATOR E.H.
Annual Report 2015 Allianz Group
244
Mandates of the Members of the Supervisory Board
Mandates of the Members of the Board of Management
Glossary
International Advisory Board
We have audited the consolidated financial statements prepared by
Allianz SE, Munich, comprising the consolidated balance sheets, the
consolidated income statements, the consolidated statements of
comprehensive income, the consolidated statements of changes in
equity, the consolidated statements of cash flows and the notes,
together with the group management report for the business year
from 1 January to 31 December 2015. The preparation of the consoli-
dated financial statements and the group management report in
accordance with IFRSS, as adopted by the EU, and the additional
requirements of German commercial law pursuant to § 315a para. 1
HGB [Handelsgesetzbuch “German Commercial Code”] and supple-
mentary provisions of the articles of incorporation are the responsi-
bility of the parent company's management. Our responsibility is to
express an opinion on the consolidated financial statements and on
the group management report based on our audit.
We conducted our audit of the consolidated financial state-
ments in accordance with § 317 HGB and German generally accepted
standards for the audit of financial statements promulgated by the
Institut der Wirtschaftsprüfer [Institute of Public Auditors in Ger-
many] (IDW). Those standards require that we plan and perform the
audit such that misstatements materially affecting the presentation
of the net assets, financial position and results of operations in the
consolidated financial statements in accordance with the applicable
financial reporting framework and in the group management report
are detected with reasonable assurance. Knowledge of the business
activities and the economic and legal environment of the Group and
expectations as to possible misstatements are taken into account in
the determination of audit procedures. The effectiveness of the
accounting-related internal control system and the evidence sup-
porting the disclosures in the consolidated financial statements and
the e group management report are examined primarily on a test basis
within the framework of the audit. The audit includes assessing the
annual financial statements of those entities included in consolida-
tion, the determination of entities to be included in consolidation,
the accounting and consolidation principles used and significant
estimates made by management, as well as evaluating the overall
presentation of the consolidated financial statements and group
management report. We believe that our audit provides a reasonable
basis for our opinion.
Our audit has not led to any reservations.
In our opinion, based on the findings of our audit, the consoli-
dated financial statements comply with IFRSS, as adopted by the E.U.,
the additional requirements of German commercial law pursuant to
§ 315a para. 1 HGB and supplementary provisions of the articles of
incorporation and give a true and fair view of the net assets, financial
position and results of operations of the Group in accordance with
these requirements. The group management report is consistent
with the consolidated financial statements and as a whole provides
a suitable view of the Group's position and suitably presents the
opportunities and risks of future development.
Munich, 29 February 2016
KPMG AG
Wirtschaftsprüfungsgesellschaft
ил
Becker
Wirtschaftsprüfer
(Independent Auditor)
Thaffle
Dr. Pfaffenzeller
Wirtschaftsprüfer
(Independent Auditor)
until 31 December 2015
242
FURTHER INFORMATION
L
Annual Report 2015
243
Allianz Group
E - FURTHER INFORMATION
245
246
247
248
249
Joint Advisory Council of the Allianz Companies
Annual Report 2015 Allianz Group
AUDITOR'S REPORT
Chairman of the Supervisory Board
Allgaier Werke GmbH
WOLFGANG ISCHINGER
Chairman
NORBERT REITHOFER
Chairman of the Supervisory Board
BMW AG
245
International Advisory Board
DR. PAUL ACHLEITNER
Chairman of the Supervisory Board of
Deutsche Bank AG
PAULO DE AZEVEDO
Chairman and Co-Chief Executive Officer of
Sonae SGPS, S.A.
CANSEN BASARAN-SYMES
since 5 May 2015
President of Turkish Industry & Business Association
(TUSIAD)
ALFONSO CORTINA DE ALCOCER
Vice Chairman of Rothschild Europe BV,
Senior Advisor at Texas Pacific Group
PETER COSTELLO
Chairman of Australia's Future Fund
DR. JÜRGEN HAMBRECHT
until 31 December 2015
Chairman of the Supervisory Board of BASF SE
DR. FRANZ B. HUMER
Chairman of Dlageo plc
AMBASSADOR ROBERT M. KIMMITT
Senior International Counsel of
Wilmer Cutler Pickering Hale and Dorr
IZUMI KOBAYASHI
Member of the Board of Directors of ANA Holdings Inc.,
Director of the Board of Mitsui & Co., Ltd.
DR. MARIO MONTI
President of Bocconi University,
Chairman of the High-level Group on Own Resources of
the European Union
LUBNA OLAYAN
DR.-ING. DR.-ING. E.H.
Annual Report 2015 Allianz Group
MANFRED WENNEMER
CEO & Chairman of the Executive Board
Bertelsmann SE & Co. KGaA
Munich Security Conference
PROF. DR.-ING. DR.-ING. E.H.
HANS-PETER KEITEL
until 31 December 2015
Vice-President of BDI-Federation
of German Industries
HARRY ROELS
KASPER RORSTED
Chairman of the Board of Management
Henkel AG & Co. KGaA
DR. MANFRED SCHNEIDER
until 31 December 2015
Chairman of the Supervisory Board
RWE AG
Linde AG
PROF. DR. DENNIS J. SNOWER
AMBASSADOR PROF. DR.
President of the Kiel Institute for the World Economy
Chief Executive Officer
RWE AG
DR. NICOLA LEIBINGER-KAMMÜLLER
Chief Executive Officer
TRUMPF GmbH & Co. KG
DR.-ING. E.H. HEINRICH WEISS
until 31 December 2015
Chairman of the Supervisory Board
SMS Holding GmbH
HERBERT HAINER
Chairman of the Board of Management
adidas AG
DR. THOMAS RABE
PETER TERIUM
Data Quest SAL, Beirut
241
139 Consolidated Statements of Cash Flows
141 Notes
OVS Opel VersicherungsService GmbH, Vienna
23.3
OJSC "Avariinyi Comissar", Moscow
49.0
OeKB EH Beteiligungs- und Management AG, Vienna
40.0
New Path S.A., Buenos Aires
25.0
Medgulf Allianz Takaful B.S.C., Seef
33.3
48.8
IPE Tank and Rail Investment 1 S.C.A., Luxembourg
Madrid Gas Investments S.A., Luxembourg
19.59
Henderson UK Outlet Mall Partnership LP, Edinburgh
45.0
Helios Silesia Holding B.V., Amsterdam
27.5
Graydon Holding N.V., Amsterdam
49.0
Four Oaks Place LP, Wilmington, DE
22.7
Foncière de Paris SIIC, Paris
25.8 5
Chief Executive Officer and Deputy Chairperson of
Olayan Financing Company
Annual Report 2015 Allianz Group
33.3
Dr. Ignaz Fiala GmbH, Vienna
28.6
Douglas Emmett Partnership XLP, Wilmington, DE
40.0
PGREF V 1301 Sixth Holding LP, Wilmington, DE
100.0
Professional Agencies Reinsurance Limited, Hamilton
24.5
бегерь
n. torches
kad Theis
Chines Béla Sergio Ballinoł
The Board of Management
Allianz SE
Munich, 16 February 2016
To the best of our knowledge, and in accordance with the applicable
reporting principles, the consolidated financial statements give a
true and fair view of the assets, liabilities, financial position and
profit or loss of the group, and the group management report includes
a fair review of the development and performance of the business and
the position of the group, together with a description of the material
opportunities and risks associated with the expected development of
the group.
RESPONSIBILITY STATEMENT
138 Consolidated Statements of
Changes in Equity
137 Consolidated Statements of
Comprehensive Income
135 Consolidated Balance Sheets
136 Consolidated Income Statements
D- Consolidated Financial Statements
M. Zimmwar
240
Annual Report 2015 Allianz Group
Residenze CYL S.p.A., Milan
SAS Alta Gramont, Paris
49.0
SCI Bercy Village, Paris
49.0
33.3
25.8
49.0
SK Versicherung AG, Vienna
SNC Alta CRP La Valette, Paris
22.0
49.0
SNC Alta CRP Gennevilliers, Paris
Important dates for shareholders and analysts¹
Annual General Meeting
Financial calendar
Financial Results 20/Interim Report 20
Financial Results 3Q
Financial Results 2016
Annual Report 2016
Annual General Meeting
4 May 2016
11 May 2016
Financial Results 1Q.
responsible sources
11 November 2016
17 February 2017
10 March 2017
3 May 2017
1- The German Securities Trading Act ("Wertpapierhandelsgesetz") obliges issuers to announce immediately any information which may have a substantial price impact.
Therefore we cannot exclude that we have to announce key figures related to quarterly and fiscal year results ahead of the dates mentioned above. As we can never
rule out changes of dates, we recommend checking them on the internet at www.allianz.com/financialcalendar.
FSC
MIX
Paper from
www.fsc.org
FSC® C002390
Allianz SE - Königinstrasse 28 - 80802 Munich - Germany - Phone +49.89.3800-0- info@allianz.com - www.allianz.com
Annual Report on the internet: www.allianz.com/annualreport - Design/Concept: hw.design GmbH
Photography: Wolfgang Stahr (Oliver Bäte), Peter Rigaud (Board of Management), Andreas Pohlmann (Chairman of the Supervisory Board) - Date of publication: 11 March 2016
This is a translation of the German Annual Report of Allianz Group. In case of any divergences, the German original is legally binding.
www.allianz.com/hrfactbook
5 August 2016
The HR Fact Book is the official and most comprehensive report on
key human resources facts and figures, highlighting major HR
achievements over the past year and revealing the outlook for 2016.
Date of publication: 21 March 2016.
|
The Allianz Group Sustainability Report "Encouraging tomorrow"
covers our contribution to the environment, society and economy.
It provides full details of our sustainability strategy, approach
and progress as well as an outlook for 2016.
Date of publication: 2 May 2016.
SUBORDINATED LIABILITIES
Liabilities which, in the event of liquidation or bankruptcy,
are not settled until after all other liabilities.
252
Annual Report 2015 Allianz Group
Orientation
Orientation guide
This sign indicates where to find additional information
in this Annual Report or on the internet.
On pages 249 to 252, you will find a glossary of selected
accounting, insurance, and financial market terms used
in this report.
Multichannel reporting
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annualreport
Financial information based on the consolidated financial
statements, reported by business segments (Property-
Casualty, Life/Health, Asset Management and Corporate
and Other) as well as by reportable segments.
UNEARNED PREMIUMS
Difference between the cost of acquisition and the fair
value of the net assets acquired.
Represents acquisition and administrative expenses
(net), excluding one-off effect from pension revaluation,
divided by premiums earned (net).
EXPENSE RATIO
The equity method is a method of accounting whereby
the investment is initially recognized at cost and adjusted
thereafter for the post-acquisition change in the investor's
share of the investee's net assets.
EQUITY METHOD
Ratio calculated by dividing the net income for the year
attributable to shareholders by the weighted average
number of shares outstanding (basic EPS). In order to
calculate diluted earnings per share, the number of
common shares outstanding and the net income for the
year attributable to shareholders are adjusted by the
effects of potentially dilutive common shares which could
still be exercised. Potentially dilutive common shares
arise in connection with share-based compensation plans
(diluted EPS).
EARNINGS PER SHARE (EPS)
E
DERIVATIVE FINANCIAL INSTRUMENTS
Financial contracts, the values of which move in relation-
ship to the price of an underlying asset. Derivative finan-
cial instruments can be classified in relation to their
underlying assets (e.g. interest rates, share prices, foreign
currency exchange rates or prices of goods). Important
examples of derivative financial instruments are options,
futures, forwards and swaps.
F
DEFINED CONTRIBUTION PLANS
Defined contribution plans are funded through indepen-
dent pension funds or similar organizations. Contributions
fixed in advance (e.g. based on salary) are paid to these
institutions and the beneficiary's right to benefits exists
against the pension fund. The employer has no obligation
beyond payment of the contributions and does not par-
ticipate in the investment success of the contributions.
DEFINED BENEFIT PLANS
DEFERRED TAX ASSETS/LIABILITIES
The calculation of deferred taxes is based on tax loss carry
forwards, tax credit carry forwards and temporary
differences between the carrying amounts of assets or
liabilities in the published balance sheet and their tax
base, and on differences arising from applying uniform
valuation policies for consolidation purposes. The tax
rates used for the calculation are the local rates appli-
cable in the countries of the entities included in the con-
solidation; changes to tax rates already adopted on the
balance sheet date are taken into account.
249
Annual Report 2015 Allianz Group
costs.
DEFERRED ACQUISITION COSTS (DAC)
Expenses of an insurance company which are incurred in
connection with the acquisition of new insurance policies
or the renewal of existing policies. They include commis-
sions paid, underwriting expenses and policy issuance
D
Net expense incurred in connection with a defined benefit
plan less any contributions made by the beneficiary to a
pension fund.
For defined benefit plans, the participant is granted a
defined benefit by the employer or via an external entity.
In contrast to defined contribution arrangements, the
future cost of a defined benefit to the employer plan is
not known with certainty in advance. To determine the
expense over the period, accounting regulations require
that actuarial calculations are carried out according to a
fixed set of rules.
FAIR VALUE
The price that would be received to sell an asset or paid
to transfer a liability in an orderly transaction between
market participants at the measurement date.
FINANCIAL ASSETS CARRIED
AT FAIR VALUE THROUGH INCOME
Financial assets carried at fair value through income in-
clude financial assets held for trading and financial assets
designated at fair value through income.
HELD FOR SALE
The use of special financial contracts, especially derivative
financial instruments, to reduce losses which
may arise
as a result of unfavorable movements in rates or prices.
HEDGING
H
In insurance terminology, the terms gross and net mean
before and after deduction of reinsurance, respectively.
In investment terminology, the term net is used where
the relevant expenses have already been deducted from
the respective income.
GROSS/NET
GOODWILL
G
Standardized contracts for delivery on a future date, traded
on an exchange. Normally, rather than actually delivering
the underlying asset on that date, the difference between
the closing market value and the exercise price is paid.
FUTURES
Funds held by others are funds to which the reinsurer is
entitled but which the ceding insurer retains as collateral
for future obligations of the reinsurer. The ceding insurer
shows these amounts as "deposits retained for reinsurance
ceded".
FUNDS HELD BY OTHERS UNDER
REINSURANCE CONTRACTS
ASSUMED/DEPOSITS RETAINED
FOR REINSURANCE CEDED
The functional currency is the prevailing currency in the
primary economic environment where the subsidiary
conducts its ordinary activities.
FUNCTIONAL CURRENCY
The parties to this type of transaction agree to buy or
sell at a specified future date. The price of the underlying
assets is fixed when the deal is struck.
FORWARDS
Financial Value at Risk (VaR) is the aggregation of market
risk and credit risk taking diversification benefits into
account.
FINANCIAL VAR
FINANCIAL LIABILITIES CARRIED
AT FAIR VALUE THROUGH INCOME
Financial liabilities carried at fair value through income
include financial liabilities held for trading and financial
liabilities designated at fair value through income.
CURRENT SERVICE COST
The risk of a loss incurring due to a counterparty's dete-
rioration of credit quality or its default.
CREDIT RISK
Statement showing movements of cash and cash equi-
valents during a reporting period, classified by three
types of activity: operating activities, investing activities
and financing activities.
AMORTIZED COST
All entities over which the Allianz Group has significant
influence, i.e. the power to participate in the financial
and operating policy decisions of these entities, but no
control or joint control of those policies.
ASSOCIATES
Assets under management are assets or securities port-
folios, valued at current market value, for which Allianz
Asset Management companies provide discretionary
investment management decisions and have the port-
folio management responsibility. They are managed on
behalf of third parties as well as on behalf of the Allianz
Group.
ASSETS UNDER MANAGEMENT
The parent company of the Group and all subsidiaries.
Subsidiaries are entities where the parent company can
exercise a significant influence over their corporate
strategy in accordance with the control concept. This is
possible, for example, where the parent company holds,
directly or indirectly, a majority of the voting rights, has
the power to appoint or remove a majority of the mem-
bers of the Board of Management or equivalent govern-
ing body, or where there are contractual rights of
control.
AFFILIATES
ACTUARIAL GAINS AND LOSSES
Actuarial gains and losses are changes in the present
value of the defined benefit obligation resulting from
experience adjustments (i.e. the effects of differences
between the previous actuarial assumptions and what
has actually occurred) and the effects of changes in
actuarial assumptions (e.g. changes in demographic
and in financial assumptions).
The amount of cash or cash equivalents paid or the fair
value of the other consideration given to acquire an asset
at the time of its acquisition.
ACQUISITION COST
A
or the income statement.
The accounting terms explained here are intended to help the reader
understand this Annual Report. Most of these terms concern the balance sheet
Glossary
249 Glossary
248 Mandates of the Members of
the Board of Management
247 Mandates of the Members of
the Supervisory Board
246 International Advisory Board
245 Joint Advisory Council of the
Allianz Companies
The amortized cost of a financial asset or financial liability
is the amount at which the financial instrument is mea-
A non-current asset is classified as held for sale if its
carrying amount will be recovered principally through
sale rather than through continuing use. On the date a
non-current asset meets the criteria as held for sale, it is
measured at the lower of its carrying amount and fair
value less costs to sell.
sured at initial recognition minus principal repayments,
plus or minus the cumulative amortization using the
effective interest method of any difference between that
initial amount and the maturity amount.
CERTIFICATED LIABILITIES
CASH FLOW STATEMENT
с
A business combination is a transaction or event in which
an acquirer obtains control of one or more businesses.
Business combinations are accounted for using the
acquisition method.
BUSINESS COMBINATION
B
The overall volume of provisions includes allowances
for credit losses - deducted from the asset side of the
balance sheet - and provisions for risks associated with
contingencies, such as guarantees, loan commitments or
other obligations, which are stated as liabilities. Where it
is determined that a loan cannot be repaid, the uncollect-
able amount is written off against any existing specific
loan loss allowance, or directly recognized as an expense
in the income statement. Recoveries on loans previously
written off are recognized in the income statement under
net loan loss provisions.
ALLOWANCE FOR LOAN LOSSES
AGGREGATE POLICY RESERVES
Policies in force - especially in life, health, and personal
accident insurance - give rise to potential liabilities for
which funds have to be set aside. The amount required is
calculated actuarially.
revenues.
Represents operating expenses divided by operating
COST-INCOME RATIO
Financial obligations not shown as liabilities on the bal-
ance sheet because the probability of a liability actually
being incurred is low. Example: guarantee obligations.
CONTINGENT LIABILITIES
Represents the total of acquisition and administrative
expenses (net), excluding one-off effect from pension
revaluation, and claims and insurance benefits incurred
(net) divided by premiums earned (net).
COMBINED RATIO
A way of packaging credit risk. Several classes of securi-
ties (known as tranches) are created from a portfolio
of bonds. Rules determine how the cost of defaults are
allocated to the classes.
(CDO)
COLLATERALIZED DEBT OBLIGATION
Certificated liabilities comprise debentures and other
liabilities for which transferable certificates have been
issued.
AVAILABLE-FOR-SALE INVESTMENTS
Available-for-sale investments are securities which are
neither held to maturity nor have been acquired for sale in
the near term; available-for-sale investments are carried
at fair value in the balance sheet.
IAS
HELD-TO-MATURITY INVESTMENTS
Held-to-maturity investments comprise debt securities
held with the intent and ability that they will be held-to-
maturity. They are valued at amortized cost.
IFRS
RESERVES FOR PREMIUM REFUNDS
That part of the surplus which will be distributed to
policyholders in the future. This refund of premiums is
made on the basis of statutory, contractual, or company
by-law obligations, or voluntary undertaking.
LOSS ADJUSTMENT EXPENSES
Reserves are established for the payment of losses and
loss adjustment expenses (LAE) on claims which have
occurred but are not yet settled.
RESERVES FOR LOSS AND
A repurchase (repo) transaction involves the sale of
securities by the Group to a counterparty, subject to the
simultaneous agreement to repurchase these securities
at a certain later date, at an agreed price. The securities
concerned are retained in the Group's balance sheet for
the entire lifetime of the transaction, and are valued in
accordance with the accounting principles for financial
assets carried at fair value through income or investment
securities, respectively. The proceeds of the sale are
reported in liabilities to banks or to customers, as appro-
priate. A reverse repo transaction involves the purchase
of securities with the simultaneous obligation to sell
these securities at a future date, at an agreed price. Such
transactions are reported in loans and advances to banks,
or loans and advances to customers, respectively. Interest
income from reverse repos and interest expenses from
repos are accrued evenly over the lifetime of the trans-
actions and reported under interest and similar income
or interest expenses.
REPURCHASE AGREEMENTS
REPURCHASE AND REVERSE
251
Annual Report 2015 Allianz Group
REPLICATING PORTFOLIO
Representation of the liabilities of the Life/Health
insurance business via standard financial instruments.
This form of representation mimics the behavior of these
liabilities under different market conditions and allows
for efficient risk calculations on the basis of Monte Carlo
simulations.
An insurance company transfers part of its insurance risk
assumed to another insurance company.
REINSURANCE
R
Present value of projected new regular premiums,
discounted with risk-free rates, plus the total amount
of single premiums received.
International Accounting Standards.
Premiums written represent all premium revenues in the
respective year. Premiums earned represent that part of
the premiums written used to provide insurance coverage
in that year. In the case of life insurance products where
the policyholder carries the investment risk (e.g. variable
annuities), only that part of the premiums used to cover
the risk insured and costs involved is treated as premium
income.
PREMIUMS WRITTEN/EARNED
NON-CONTROLLING INTERESTS
Those parts of the equity of affiliates which are not
owned by companies of the Allianz Group.
RETAINED EARNINGS
In addition to the reserve required by law in the financial
statements of the Group parent company, this item con-
sists mainly of the undistributed profits of Group entities
and amounts transferred from consolidated net income.
RISK APPETITE
The level of risk that an organization is prepared to accept,
before action is deemed necessary to reduce it. Risk
appetite is therefore clearly and comprehensively defined
by using target and minimum risk indicators, (quantita-
tive) limit systems, or adequate policies, standards and
guidelines to determine the "boundaries" of the Group's
business operations.
E- Further Information
SEGMENT REPORTING
S
The benefits payable under this type of life insurance
depend primarily on the performance of the investments
in a mutual fund. The policyholder shares equally in the
profits or losses of the underlying investments.
VARIABLE ANNUITIES
VOBA refers to the present value of future profits asso-
ciated with a block of business purchased.
VALUE OF BUSINESS ACQUIRED
(VOBA)
V
A measurement of customers' willingness to recom-
mend Allianz. Top-down NPS is measured regularly
according to global cross industry standards and allows
benchmarking against competitors in the respective
markets.
Generally Accepted Accounting Principles in the United
States of America.
URR contain premium components that refer to future
periods, which are reserved and released over the life-
time of the corresponding contracts.
UNEARNED REVENUE RESERVES
(URR)
Premiums written attributable to income of future years.
The amount is calculated separately for each policy and
for every day that the premium still has to cover.
U
Agreements between two counterparties to exchange
payment streams over a specified period of time. Impor-
tant examples include currency swaps (in which payment
streams and capital in different currencies are exchanged)
and interest rate swaps (in which the parties agree to
exchange normally fixed interest payments for variable
interest payments in the same currency).
SWAPS
According to Solvency II guidance surplus funds are
deemed to be accumulated profits, which have not been
made available for distribution to policyholders and
beneficiaries.
SURPLUS FUNDS
US GAAP
NET PROMOTER SCORE (NPS)
PRESENT VALUE OF NEW BUSINESS
PREMIUMS (PVNBP)
NET INCOME ATTRIBUTABLE
JOINT VENTURE
J
Comprises the capital stock, the premium received on
the issue of shares, and amounts allocated when option
rights are exercised.
TO NON-CONTROLLING INTERESTS
That part of net income for the year which is not attribut-
able to the shareholders of the Allianz Group but to other
third parties who hold shares in affiliates.
AND LIABILITIES CARRIED AT FAIR
VALUE THROUGH INCOME (NET)
Includes all realized and unrealized gains and losses,
including interest and dividend income, from financial
assets and financial liabilities carried at fair value through
income, the income (net) from financial liabilities for
puttable equity instruments and the foreign currency
gains and losses (net).
INCOME FROM FINANCIAL ASSETS
249 Glossary
A joint venture is a joint arrangement whereby the parties
that have joint control of the arrangement have rights to
the net assets of the arrangement.
248 Mandates of the Members of
the Board of Management
245 Joint Advisory Council of the
Allianz Companies
246 International Advisory Board
E- Further Information
Annual Report 2015 Allianz Group
250
The Inclusive Meritocracy Index (IMIX) measures the
progress of the organization on its way towards Inclusive
Meritocracy. The internal index is subsuming 10 Allianz
Engagement Survey (AES) items around leadership, per-
formance and corporate culture.
INCLUSIVE MERITOCRACY INDEX
(IMIX)
International Financial Reporting Standards. Since 2002,
the designation IFRS applies to the overall framework of
all standards approved by the International Accounting
Standards Board. Already approved standards will con-
tinue to be cited as International Accounting Standards
(IAS).
247 Mandates of the Members of
the Supervisory Board
LIFE/HEALTH
ISSUED CAPITAL AND ADDITIONAL
PAID-IN CAPITAL
Investment margin: Is defined as IFRS investment income
net of expenses less interest credited to IFRS reserves and
policyholder participation.
N
contract are directly linked to the value of assets
contained in an internal or external fund held by the
insurance undertakings. Performance is linked to a
separate account and the investment risk is borne by
the policyholder rather than the insurer.
Protection & health: Protection and health insurance covers
different risks which are linked to events affecting the
physical or mental integrity of a person.
Unit-linked without guarantee: Conventional unit-linked
products are those where all of the benefits provided by a
LIFE/HEALTH LINES OF BUSINESS
Guaranteed savings & annuities: Guaranteed savings and
annuities are life insurance obligations that always relate
to the length of human life. Life obligations may be
related to guarantees offering life and/or death coverage
of the insured in the form of single or multiple payments
to a beneficiary.
OPERATING PROFIT SOURCES
The objective of the Life/Health operating profit sources
analysis is to explain movements in IFRS results by
analyzing underlying drivers of performance on a Life/
Health business segment consolidated basis.
Loadings & fees: Includes premium and reserve based
fees, unit-linked management fees and policyholder
participation in expenses.
Front-end load products: Products with a commission
applied at the time of the initial recognition.
Commission clawbacks: Commission recovered from
intermediaries on lapse of (typically newer) contracts.
True-up: Retrospective update of assumptions for DAC
calculation.
LIFE/HEALTH - DEFINITION OF TERMS
Further wordings used in the Life/Health business
segment performance analysis:
PENSION AND SIMILAR OBLIGATIONS
Reserves for current and future post-employment benefits
formed for the defined benefit plans of active and former
employees. These also include reserves for health care
benefits.
P
Unlocking: Prospective update of assumptions for DAC
calculation.
OTC DERIVATIVES
Derivative financial instruments where the holder is
entitled - but not obliged - to buy (call option) or sell
(put option) the underlying asset at a predetermined
price sometime in the future. The grantor (writer) of the
option, on the other hand, is obliged to transfer or buy
the asset and receives a premium for granting the option
to the purchaser.
OPTIONS
Represents claims and insurance benefits incurred (net)
divided by premiums earned (net).
LOSS RATIO
Technical margin: Comprises risk result (risk premiums
less benefits in excess of reserves less policyholder par-
ticipation), lapse result (surrender charges and commis-
sion clawbacks) and reinsurance result.
Impact of change in DAC: Includes effects of change in
DAC, URR and VOBA and is the net impact of deferral and
amortization of acquisition costs and front-end loadings
on operating profit.
Expenses: Includes commissions, acquisition expenses
and administration expenses.
Derivative financial instruments which are not standard-
ized and not traded on an exchange but traded directly
between two counterparties via over-the-counter (OTC)
transactions.
Jay Ralph,
Dr. Axel Theis,
Dr. Helga Jung,
as of 31 December 2015
Dr. Helga Jung (Chairwoman),
Dr. Dieter Wemmer,
Dr. Maximilian Zimmerer
Dr. Axel Theis from 21 May 2015,
Dr. Dieter Wemmer,
GROUP MERGERS
Dr. Werner Zedelius
Dr. Christof Mascher (Chairman),
Jay Ralph,
GROUP IT COMMITTEE
Dr. Maximilian Zimmerer
AND ACQUISITIONS COMMITTEE
Dr. Dieter Wemmer (Chairman),
Sergio Balbinot,
BOARD COMMITTEES
Dr. Maximilian Zimmerer
Oliver Bäte (Chairman) from 7 May 2015,
Dr. Dieter Wemmer,
Michael Diekmann (Chairman)
until 6 May 2015,
GROUP CAPITAL COMMITTEE
Proposals to the Board of Management
concerning risk capital management,
including Group-wide capital and
liquidity planning, as well as investment
strategy.
BOARD OF MANAGEMENT AND GROUP COMMITTEES
In the financial year 2015, there were the following Board of Manage-
ment committees:
Corporate Constitution
of the European Company (SE)
As a European Company, Allianz SE is subject to special European SE
regulations and the German SE Implementation Act ("SE-Ausfüh-
rungsgesetz") in addition to German stock corporation Act. However,
the main features of a German stock corporation - in particular the
two-tier board system (Board of Management and Supervisory Board)
and the principle of equal employee representation on the Super-
visory Board - have been maintained by Allianz SE.
Function of the Board of Management
The Board of Management of Allianz SE comprises nine members. It
is responsible for setting business objectives and the strategic direc-
tion, coordinating and supervising the operating entities, as well as
implementing and overseeing an efficient risk management system.
The Board of Management also prepares the Group's consolidated
financial statements and the annual financial statements of Allianz SE,
as well as interim reports.
The members of the Board of Management are jointly responsible
for management and for complying with legal requirements. Not-
withstanding this overall responsibility, the individual members
head the departments they have been assigned independently. There
are divisional responsibilities for business segments as well as func-
tional responsibilities. The latter include the Finance-, Risk Manage-
ment- and Controlling-Function, Investments, Operations – includ-
ing IT-,
-, 
Human Resources, Legal and Compliance, Internal Audit and
Mergers & Acquisitions. Business division responsibilities focus on
geographical regions or Global Lines, such as Asset Management.
Rules of procedure specify in more detail the structure and depart-
mental responsibilities of the Board of Management.
BOARD COMMITTEES
GROUP FINANCE AND RISK COMMITTEE
Implementing and overseeing the
principles of Group-wide capital and
liquidity planning, as well as investment
strategy and preparing risk strategy.
This includes, in particular, significant
individual investments and guidelines
for currency management, Group
financing and internal Group capital
management, as well as establishing
and overseeing a Group-wide risk
management and monitoring system
including dynamic stress tests.
The German Co-Determination Act (“Mitbestimmungsgesetz") does
not apply to Allianz SE because it has the legal form of a European
Company (SE). The size and composition of the Supervisory Board are
instead determined by general European SE regulations. These regu-
lations are implemented in the Statutes and by the SE Agreement.
Managing and overseeing Group M & A
transactions, including approval of
individual transactions within certain
thresholds.
Important decisions of the Board of Management require
approval by the Supervisory Board. These requirements are stipu-
lated by law, by the Statutes, or in individual cases by decisions of the
Annual General Meeting (AGM). Supervisory Board approval is
required, for example, for certain capital transactions, intercompany
agreements and the launch of new business segments or the closure
of existing ones. Approval is also required for acquisitions of compa-
nies and holdings in companies, as well as divestments of Group
companies which exceed certain threshold levels. The Agreement
concerning the Participation of Employees in Allianz SE in the version
dated 3 July, 2014 (hereinafter “SE Agreement") requires the approval
of the Supervisory Board for the appointment of the member of the
Board of Management responsible for employment and social welfare.
Principles and function
of the Supervisory Board
Regular Board of Management meetings are led by the Chair-
man. Each member of the Board may request a meeting, providing
notification of the proposed subject. The Board takes decisions by a
simple majority of participating members. In the event of a tie, the
Chairman casts the deciding vote. The Chairman can also veto deci-
sions, but cannot impose any decisions against the majority vote.
The Supervisory Board comprises twelve members, including six
shareholder representatives appointed by the AGM. The six employee
representatives are appointed by the SE works council. The specific
procedure for their appointment is laid down in the SE Agreement.
This agreement stipulates that the six employee representatives
must be allocated in proportion to the number of Allianz employees
in the different countries. The Supervisory Board currently in office
comprises four employee representatives from Germany and one
each from France and Italy. The last regular election of the Super-
visory Board took place in May 2012 for a term lasting until the end of
the ordinary AGM in 2017. According to § 17 (2) of the German SE Imple-
mentation Act ("SE-Ausführungsgesetz") the Supervisory Board of
Allianz SE shall be composed of at least 30% women and at least 30%
men as of 1 January 2016.
The Supervisory Board oversees and advises the Board of Man-
agement on managing the business. It is also responsible for appoint-
ing the members of the Board of Management, determining their
overall remuneration and reviewing Allianz SE's and the Allianz
Group's annual financial statements. The Supervisory Board's activi-
ties in the 2015 financial year are described in the Supervisory Board
Report starting on > page 12.
The Supervisory Board held six regular meetings in the 2015
financial year and is scheduled to meet three times each half calendar
year in the future. Extraordinary meetings may be convened as needed.
The committees also hold regular meetings. The Supervisory Board
takes all decisions based on a simple majority. The special require-
ments for appointing members to the Board of Management con-
tained in the German Co-Determination Act and the requirement for
a Conciliation Committee do not apply to an SE. In the event of a tie,
the casting vote lies with the Chairman of the Supervisory Board, who
at Allianz SE must be a shareholder representative. If the Chairman is
not present in the event of a tie, the casting vote lies with the deputy
chairperson from the shareholder side. A second deputy chairperson
is elected on the proposal of the employee representatives.
The Supervisory Board regularly reviews the efficiency of its
activities. The Supervisory Board discusses recommendations for
improvements and adopts appropriate measures on the basis of rec-
ommendations from the Standing Committee.
28
Annual Report 2015 Allianz Group
The Board of Management reports regularly and comprehen-
sively to the Supervisory Board on business development, the financial
position and earnings, planning and achievement of objectives, busi-
ness strategy and risk exposure. Details of the Board of Management's
reporting to the Supervisory Board are laid down in the reporting
rules issued by the Supervisory Board.
The Allianz Group runs its operating entities and business segments
via an integrated management and control process. The Holding and
the operating entities first define the business strategies and goals.
On this basis, joint plans are then prepared for the Supervisory
Board's consideration when setting targets for performance-based
remuneration of the members of the Board of Management. For details,
see the Remuneration Report starting ::: ::: :D:D:D:D:D: page 37.
Discussion of overall strategic issues for
the Allianz Group.
Implementing Group investment strategy,
including monitoring Group-wide invest-
ment activities as well as approving invest-
ment-related frameworks and guidelines
and individual investments within certain
thresholds.
Monitoring of the underwriting business, of
the related risk management and strategy
as well as developing an underwriting
policy.
Designing, monitoring and improving
Group-wide compensation systems in line
with regulatory requirements and sub-
mitting an annual report on the results of
its monitoring, along with proposals for
improvement.
RESPONSIBILITIES
INTERNATIONAL EXECUTIVE COMMITTEE
Chairman of the Allianz SE Board of
Management (Chairman), all other
members of the Allianz SE Board of
Management and Managing Directors
of major Group companies
GROUP INVESTMENT COMMITTEE
Members of the Board of Management
and executives below Allianz SE Board
level
Members of the Board of Management,
executives below Allianz SE Board level
and Chief Underwriting Officers of Group
companies
GROUP UNDERWRITING COMMITTEE
GROUP COMPENSATION COMMITTEE
Board members of Allianz SE and
executives below Allianz SE Board level
GROUP COMMITTEES
GROUP COMMITTEES
In the financial year 2015, there were the following Group committees:
22
27
Annual Report 2015 Allianz Group
Besides Board committees, there are also Group committees whose
job it is to prepare decisions for the Board of Management of Allianz SE,
submit proposals for resolutions, and ensure the smooth flow of
information within the Group.
Developing, proposing, implementing
and monitoring a Group-wide IT
strategy, approval of relevant IT
investments.
on
RESPONSIBILITIES
Corporate Governance Report
2.5
Source: Thomson Reuters Datastream
Allianz (incl. dividends)
24.6
18.1
6.7
STOXX Europe 600 Insurance
14.0
13.1
1.6
EURO STOXX 50
3.8
3.2
(0.9)
DAX
9.6
9.2
7.1
Source: Thomson Reuters Datastream
Annual Report 2015 Allianz Group
23
Higher dividend
In line with our dividend policy, we will be proposing to the Annual
General Meeting a dividend increase of € 0.45 to € 7.30. This corre-
sponds to a dividend yield of 4.5% on the year-end share price. The
payout ratio will remain unchanged at 50%. You can find more
detailed information in the Outlook 2016 starting on > page 92 and
at www.allianz.com/dividend.
Weighting in major indices
The Allianz share is strongly represented in major German and Euro-
pean indices, as well as included in important global indices.
WEIGHTING OF ALLIANZ SHARES IN MAJOR INDICES
Shareholder structure
13.0
19.1
Allianz (excl. dividends)
Allianz share price Allianz highs and lows
STOXX Europe 600 Insurance (indexed on the Allianz share price)
A rising share price in 2015 lends further credibility to the appeal
of a long-term investment in Allianz shares. Investors who have had
our shares in their portfolios for five years and opted to reinvest their
dividends achieved an average annual performance of 18.1 % over this
period of time. Over the last ten years the corresponding gain came
to 6.7%.
150
139.70
130.80
125
108.05
105.85
100
169.70
133.35
117.20
101.75
With around 470,000 shareholders, Allianz is one of the most widely
held listed public corporations in Europe. Apart from approximately
0.5% of Allianz shares held in treasury, all our shares are held in free
float. At the end of the year, 85% were held by institutional investors
and 15% by private investors. The breakdown by region shows that 74%
of Allianz shares were owned by European investors and 26% by non-
European investors. For more detailed information on our share-
holder structure, please refer to CD②> www.allianz.com/shareholders.
ALLIANZ SHARE PERFORMANCE IN COMPARISON
70.02
57.47
50
2011
2012
2013
2014
2015
average annual performance in %
1 year
2015
Good corporate governance is essential for sustainable business per-
formance. The Board of Management and the Supervisory Board of
Allianz SE thus attach great importance to complying with the recom-
mendations of the German Corporate Governance Code (referred to
hereinafter as the “Code”). The Declaration of Conformity with the
recommendations of the Code issued by the Board of Management
and the Supervisory Board on 10 December 2015 and the company's
position regarding the Code's suggestions can be found in the State-
ment on Corporate Management pursuant to § 289a of the HGB starting
page 32.
5 years
2011-2015
10 years
2006-2015
75
175
BASIC SHARE INFORMATION
Registered shares with restricted transfer
Source: Deutsche Börse Group, STOXX Limited, MSCI
ALLIANZ SHARE KEY INDICATORS AT A GLANCE
Monday to Friday, 8 am to 8 pm CET
Phone: +49.89.3800-7555
E-mail: investor.relations@allianz.com
www.allianz.com/investor-relations
Allianz Investor Relations app for iOS and Android
Financial calendar: see back cover.
2015
2014
2013
2012
2011
Total number of issued shares as of 31 December
457,000,000
457,000,000
456,500,000
455,950,000
455,300,000
Share price as of 31 December
€
163.55
137.35
130.35
104.80
73.91
High of the year
1,664
69
0.3
Allianz Investor Line
WKN 840 400
ISIN DE 000 840 400 5
ALV GR
0#ALVG.DEU
as of 31 December 2015
DAX
EURO STOXX 50
STOXX Europe 600 Insurance
MSCI World Financials
MSCI World
Bloomberg
Reuters
Weighting
in %
Share type
Security codes
Ranking
8.3
3
30
3.5
6
50
14.7
1
36
Service and contact
1.2
9
361
Index
members
€
WWW.
€
PROF. DR. RENATE KÖCHER
Head of "Institut für Demoskopie Allensbach"
(Allensbach Institute)
JÜRGEN LAWRENZ
since 1 August 2015
Employee of Allianz Managed Operations & Services SE
JIM HAGEMANN SNABE
Chairman of World Economic Forum USA
PETER DENIS SUTHERLAND
Former Chairman of the Board of Directors
of Goldman Sachs International
19
Annual Report 2015 Allianz Group
Board of Management
DR. CHRISTOF MASCHER
DR. WERNER ZEDELIUS
(from left to right)
20
20
Annual Report 2015 Allianz Group
OLIVER BÄTE
DR. HELGA JUNG
SERGIO BALBINOT
(from left to right)
A- To Our Investors
5 Letter to the Investors
12 Supervisory Board Report
19 Supervisory Board
20 Board of Management
23 Allianz Share
JAY RALPH
Employee of Allianz Beratungs- und Vertriebs-AG
until 31 July 2015
FRANZ HEISS
of ver.di Hamburg
A- To Our Investors
5 Letter to the Investors
12 Supervisory Board Report
19 Supervisory Board
20 Board of Management
23 Allianz Share
Supervisory Board
DR. HELMUT PERLET
Chairman
Former Member of the Board of Management
of Allianz SE
JEAN-JACQUES CETTE
Chairman of the Group Works Council
DR. AXEL THEIS
of Allianz France S.A.
Former Chairman of the Board of Management
of E.ON AG
ROLF ZIMMERMANN
Vice Chairman
Chairman of the (European) SE Works Council
of Allianz SE
DANTE BARBAN
Employee of Allianz S.p.A.
CHRISTINE BOSSE
Former Chief Executive Officer of Tryg A/S
GABRIELE BURKHARDT-BERG
Chairwoman of the Group Works Council
of Allianz SE
IRA GLOE-SEMLER
Regional Representative Financial Services
DR. WULF H. BERNOTAT
200
(from left to right)
21
Annual Report 2015 Allianz Group
A- To Our Investors
5 Letter to the Investors
12 Supervisory Board Report
19 Supervisory Board
20 Board of Management
23 Allianz Share
Allianz Share
-Allianz shares up by 19%.
- Dividend increases to € 7.30.
Double-digit returns on investment
four years in a row
Following a year of turbulent developments in share prices, European
stock markets reported a slight increase as the year drew to a close.
Back in spring, stock markets set new records, driven mainly by the
expansionary monetary policy of the European Central Bank, as well
as a weaker Euro. It was then, however, that a change occurred in the
fundamental data, as the Euro embarked on a recovery course and
the Greek crisis flared up again. Moreover, there were growing con-
cerns about a possible slowdown in the Chinese economy. In circum-
stances like these, a 19.1% increase in the value of Allianz shares to
€ 163.55 is substantial, outperforming the STOXX Europe 600 Insur-
ance sector index (+14.0%) and the EURO STOXX 50 cross-sector index
(+3.8%). Provided the dividend was reinvested in Allianz shares,
investments in the company would have seen an increase of 24.6%.
This year's gain constitutes a double-digit rise in value for the fourth
time in a row. Not only is this a reflection of favorable business devel-
opments, it is also testament to the positive reaction to an investor
event, in which our Renewal Agenda was introduced in detail. You can
find more detailed information in the Strategy and Steering starting
on page 58. Following the publication of the 2015 results on 19 Feb-
ruary 2016, 63% of analysts issued a "buy" recommendation for Allianz
shares-with an average price target of € 174. You can find the current
analyst recommendations and profit forecasts online at
allianz.com/analystrecommendations.
DEVELOPMENT OF THE ALLIANZ SHARE PRICE VERSUS STOXX EUROPE 600 INSURANCE
AND EURO STOXX 50
indexed on the Allianz share price in €
170
160
150
140
€ 137.35
(1/1/2015)
1Q
2Q
Allianz STOXX Europe 600 Insurance EURO STOXX 50
Source: Thomson Reuters Datastream
€ 163.55
(31/12/2015)
3Q
4Q
SHARE PRICE DEVELOPMENT AGAINST STOXX EUROPE 600 INSURANCE
22
22
since 1 September 2015
Insurance Asia Pacific
Annual Report 2015 - Allianz Group
Board of Management
OLIVER BÄTE
Chairman of the Board of Management
since 7 May 2015
Global Property-Casualty
until 6 May 2015
DR. CHRISTOF MASCHER
Operations, Allianz Worldwide Partners
JAY RALPH
Asset Management, US Life Insurance
MICHAEL DIEKMANN
until 6 May 2015
DR. DIETER WEMMER
DR. MAXIMILIAN ZIMMERER
(from left to right)
Chairman of the Board of Management
Insurance Western & Southern Europe
Insurance Middle East, Africa, India
since 1 September 2015
MANUEL BAUER
until 31 August 2015
Insurance Growth Markets
DR. AXEL THEIS
Global Insurance Lines & Anglo Markets
Global Property-Casualty
since 7 May 2015
DR. DIETER WEMMER
Finance, Controlling, Risk
DR. WERNER ZEDELIUS
Insurance German Speaking Countries
Insurance Central & Eastern Europe
since 1 September 2015
DR. HELGA JUNG
Insurance Iberia & Latin America,
Legal & Compliance, Mergers & Acquisitions
DR. MAXIMILIAN ZIMMERER
Investments, Global Life/Health
SERGIO BALBINOT
169.70
Vice Chairman
130.80
47.8
33.7
Basic earnings per share
€
14.56
13.71
13.23
11.56
5.74
Price-earnings ratio
11.2
10.0
9.9
9.2
13.1
Dividend per share
€
7.30²
6.85
5.30
4.50
4.50
Total dividend
59.5
€ MN
62.8
€ BN
105.85
108.05
Low of the year
€
133.35
117.20
101.75
70.02
57.47
Share price performance in the year
%
19.1
5.4
24.4
41.8
(16.9)
Beta coefficient¹
0.9
0.8
1.3
1.1
1.5
Market capitalization as of 31 December
74.7
3,32023
139.70
2,405
25
B-CORPORATE GOVERNANCE
Pages 26-50
27
32
34
32
37
Corporate Governance Report
Statement on Corporate Management pursuant to § 289a of the HGB
(part of the Group Management Report)
Takeover-related Statements and Explanations
(part of the Group Management Report)
Remuneration Report
26
Annual Report 2015 Allianz Group
B- Corporate Governance
27 Corporate Governance Report
32 Statement on Corporate Management
pursuant to § 289a of the HGB
34 Takeover-related Statements
and Explanations
37 Remuneration Report
3,112
Allianz Group
Annual Report 2015
(part of the Group Management Report)
CORPORATE GOVERNANCE
2,039
B
2,037
Dividend yield as of 31 December
%
4.52
4.1
4.3
6.1
Payout ratio4
1- In comparison with EURO STOXX 50, source: Bloomberg.
%
5.0
50
Annual Report 2015 Allianz Group
502,3
24
4- Based on net income after non-controlling interests.
24
3- Total dividend reflects the treasury shares held at the time of the publication of the convocation of the
Annual General Meeting in the Federal Gazette. Such treasury shares are not entitled to the dividend
pursuant to § 71b of the German Stock Corporation Act (AktG). Should there be any change in the number
of treasury shares by the date of the Annual General Meeting, the total dividend will be amended
accordingly.
2-Proposal.
79
39
40
- Preparation of the appointment of Board of
Management members
- Preparation of plenary session resolutions on
the compensation system and the overall
compensation of Board of Management members
- Conclusion, amendment and termination of
service contracts of Board of Management
members unless reserved for the plenary session
- Long-term succession planning for the Board of
Management
- Monitoring of the audit procedures, including the
independence of the auditor and the services addi-
tionally rendered, awarding of the audit contract
and determining the focal points of the audit
-Monitoring of the general risk situation and
special risk developments in the Allianz Group
-Monitoring of the effectiveness of the risk
management system
-Approval of the assumption of other mandates
by Board of Management members
- Initial review of the Risk Report and other
risk-related statements in the annual financial
statements and management reports of
Allianz SE and the Allianz Group, informing the
Audit Committee of the results of such reviews
- Setting of concrete objectives for the composition
of the Supervisory Board
Dr. Helmut Perlet (Chairman)
PRESENCE
IN PERCENT
PLENARY SESSIONS OF THE SUPERVISORY BOARD
Dr. Wulf H. Bernotat (Vice Chairman)
Rolf Zimmermann (Vice Chairman)
Dante Barban
Christine Bosse
-Monitoring of the financial reporting process, the
effectiveness of the internal control and audit
system and legal and compliance issues
Gabriele Burkhardt-Berg
- Establishment of selection criteria for shareholder
representatives on the Supervisory Board in
compliance with the Code's recommendations
on the composition of the Supervisory Board
- Selection of suitable candidates for election to the
Supervisory Board as shareholder representatives
statements
- One further shareholder
representative
(Christine Bosse)
-Preparation of the efficiency review of the
Supervisory Board
Jean-Jacques Cette
PERSONNEL COMMITTEE
3 members
- Chairman: Chairman
of the Supervisory Board
(Dr. Helmut Perlet)
- One employee representative
(Rolf Zimmermann)
NOMINATION COMMITTEE
3 members
- Chairman: Chairman
of the Supervisory Board
(Dr. Helmut Perlet)
- Two further shareholder
representatives (Prof. Dr. Renate
Köcher, Peter Denis Sutherland)
RESPONSIBILITIES
-Approval of certain transactions which require
the approval of the Supervisory Board, e.g. capital
measures, acquisitions and disposals of
participations
- Preparation of the Declaration of Conformity
pursuant to § 161 "Aktiengesetz" (German Stock
Corporation Act) and checks on corporate
governance
- Initial review of the annual Allianz SE and
consolidated financial statements, management
reports (incl. Risk Report) and the dividend
proposal, review of half-yearly reports or, where
applicable, quarterly financial reports or
6/6
100
5/6
3/32
100
6/6
representatives (in addition to
Dr. Helmut Perlet: Christine
Bosse, Peter Denis Sutherland)
- Two employee representatives
(Dante Barban, Franz Heiẞ until
31 July 2015, Jürgen Lawrenz
from 6 August 2015)
5/6
83.33
Ira Gloe-Semler
Jim Hagemann Snabe
Peter Denis Sutherland
STANDING COMMITTEE
Dr. Helmut Perlet (Chairman)
3/3
100
Dr. Wulf H. Bernotat
1/3
Jürgen Lawrenz
100
6/6
Prof. Dr. Renate Köcher
83.33
6/6
100
6/6
100
6/6
100
100
6/6
6/6
100
6/6
100
Franz Heiß
3/31
100
100
- Chairman: appointed by
the Supervisory Board
(Dr. Helmut Perlet)
- Three shareholder
34 Takeover-related Statements
and Explanations
RISK COMMITTEE
Accrual
650
Target:
2,200
Initial accrued
33.33
150%
Max: 3,300
Notional accruals
Accrual
620
Accrual
930
Year 1 Year 2 Year 3
Sustainability criteria setting
Dec 2012
setting for the three-year
performance period
Sustainability criteria
€ THOU
Accrual
650
ILLUSTRATION OF THE PROCESS AND THE UNDERLYING TIMELINE OF THE MTB CYCLE, FROM TARGET SETTING TO FINAL PERFORMANCE ASSESSMENT¹
amounts
Sustainability
Annual Report 2015 Allianz Group
38
3- Final payout is subject to the sustainability assessment of the Supervisory Board and may vary between
0% and 150% of the cumulative target values, independent of the notional accruals.
1 - Example based on target values of a regular member of the Board of Management with an annual target
of € 700 THOU for 2013 and € 750 THOU for the MTB in 2014 and 2015. Accrual is only a notional indication.
2-Actual accrual for the MTB (mid-term) usually equals the annual bonus payout of the respective financial
year. Since the performance assessment and the final payout occur after completion of the performance
cycle, this value is only a notional indication.
Sustainability assessment & payout
0%
Min: 0
20163
Final payout
Accrual
930
Accrual
620
Performance period
2015²
2014²
2013²
assessment
=
土
5 members
Following the final performance and sustainability assessment
of the MTB 2013-2015, a total payout of € 29,176 THOU was approved
by the Supervisory Board. The Supervisory Board conducted the
sustainability assessment in accordance with the agreed criteria.
This analysis concluded that the years 2013–2015 represented a
period of solid and sustainable performance for Allianz with over-
all positive development against the criteria – in particular with
regard to balance sheet strength. The final distributions have
been differentiated according to the assessments made across
the business divisions with adjustments ranging from 0% to +10%
of the target value.
comparison with peers,
SUPERVISORY BOARD
COMMITTEES
STANDING COMMITTEE
5 members
- Chairman: Chairman
of the Supervisory Board
(Dr. Helmut Perlet)
- Two further shareholder
representatives (Prof. Dr. Renate
Köcher, Dr. Wulf H. Bernotat)
- Two employee representatives
(Gabriele Burkhardt-Berg,
Rolf Zimmermann)
AUDIT COMMITTEE
5 members
- Chairman: appointed
by the Supervisory Board
(Dr. Wulf H. Bernotat)
- Three shareholder
representatives (in addition to
Dr. Wulf H. Bernotat: Dr. Helmut
Perlet, Jim Hagemann Snabe)
- Two employee representatives
(Ira Gloe-Semler,
Jean-Jacques Cette)
PUBLICATION OF DETAILS OF MEMBERS' PARTICIPATION IN MEETINGS
"partner of choice" for stakeholders, and
extraordinary events.
SUPERVISORY BOARD COMMITTEES
OF MEMBERS' PARTICIPATION IN MEETINGS
adjusted capital growth vs. planned development in light
of risk capital employed (adjusted capital essentially repre-
sents the fair value of shareholders' equity),
balance sheet strength,
-
MTB (mid-term): A deferred award which reflects the achieve-
ment of the annual targets by accruing an amount identical to
the annual bonus. The payout of the award at the end of a three-
year cycle is subject to a sustainability assessment for these three
years. The following criteria are considered:
Based on the 2015 target achievement for the Group, the
business division/corporate functions, and the qualitative per-
formance, the total annual bonus awards ranged between 101%
and 133% of the target with an average bonus award of 121% of
the target.
Annual bonus (short-term): A cash payment which rewards the
achievement of quantitative and qualitative targets for the
respective financial year and is paid the year following the perfor-
mance year. Quantitative targets represent 75% and consist of 50%
Group targets (equally divided between annual operating profit
and annual net income) and 25 % divisional targets. For members
of the Board of Management with business division responsibili-
ties, divisional targets are set with the following split: 10% annual
operating profit, 10% annual net income before minorities and 5%
dividends. For members of the Board of Management with a func-
tional focus, the divisional quantitative targets are determined
based on their key responsibilities. Qualitative targets represent
25% and reflect the specific individual priorities for the perfor-
mance year per member of the Board of Management. The perfor-
mance of the Chairman of the Allianz SE Board of Management is
determined by the average target achievement of the other Board
of Management members and can be adjusted by the Supervisory
Board based on the Chairman's personal performance.
-
Details on the variable compensation components:
37
B- Corporate Governance
27 Corporate Governance Report
32 Statement on Corporate Management
pursuant to § 289a of the HGB
37 Remuneration Report
SUPERVISORY BOARD COMMITTEES
Part of the Supervisory Board's work is carried out by its committees.
The Supervisory Board receives regular reports on the activities of its
committees. The composition of committees and the tasks assigned
to them are regulated by the Supervisory Board's Rules of Procedure.
PUBLICATION OF DETAILS
The Supervisory Board considers it good corporate governance to
publish the details of individual members' participation in plenary
sessions and committee meetings.
Total 2,200
3/3
2/3
Base salary is the fixed remuneration component, expressed as an
annual cash sum and paid in twelve monthly installments.
Base salary
COMPONENTS, AND TARGET SETTING PROCESS
There are four main remuneration components. Each has the same
weighting within annual target remuneration: base salary, annual
bonus, annualized mid-term bonus (MTB), and equity-related remu-
neration. The target compensation of each variable component does
not exceed the base salary, with the total target variable compensation
not exceeding three times the base salary. In addition, Allianz offers
pensions and similar benefits and perquisites.
REMUNERATION STRUCTURE,
The structure, weighting and level of remuneration is decided by the
Supervisory Board. Remuneration survey data of DAX 30 companies
and international insurance peers is provided by external consul-
tants. Compensation levels are around the third quartile of this
group. The structure of the Allianz Group's total remuneration is
more strongly weighted to variable, longer-term components than in
most DAX 30 companies. Remuneration and benefit arrangements
are also periodically compared with best practices. In addition, the
Supervisory Board takes remuneration levels within the Group into
account when reviewing the adequateness and the appropriateness
of the remuneration of the Board of Management.
Alignment with shareholder interests: One third of the variable
remuneration is dependent upon share price performance.
Variable remuneration focused on sustainability: Two thirds of
the variable remuneration reflect longer-term performance. One
third is a deferred payout after three years, based on a sustain-
ability assessment covering the three-year period. The other third
rewards the sustained performance of the share price with a
deferred payout four years after grant.
Alignment of pay and performance: The performance-based,
variable component forms a significant portion of the overall
remuneration.
Support of the Group's strategy: Performance targets reflect the
Allianz Group's business strategy.
-
-
REMUNERATION PRINCIPLES AND MARKET POSITIONING
The key principles of Board of Management remuneration are as
follows:
The remuneration of the Board of Management is decided upon by
the entire Supervisory Board based on proposals prepared by the
Personnel Committee. If required, outside advice is sought from inde-
pendent external consultants. The Personnel Committee and the
Supervisory Board consult with the Chairman of the Board of Ma-
nagement, as appropriate, in assessing the performance and remu-
neration of members of the Board of Management. The Chairman of
the Board of Management is not present when his own remuneration
is discussed. Regarding the activities and decisions taken by the Per-
sonnel Committee and the Supervisory Board, please refer to the
Supervisory Board Report.
Variable remuneration
GOVERNANCE SYSTEM
The report has been prepared in accordance with the require-
ments of the German Commercial Code (HGB) and the International
Financial Reporting Standards (IFRS). It also takes into account the
relevant regulatory provisions and the recommendations of the
German Corporate Governance Code.
This report covers the remuneration arrangements for the Board of
Management and the Supervisory Board of Allianz SE.
Remuneration Report
37 Remuneration Report
and Explanations
34 Takeover-related Statements
32 Statement on Corporate Management
pursuant to § 289a of the HGB
27 Corporate Governance Report
B- Corporate Governance
Annual Report 2015 Allianz Group
36
Under the Allianz Sustained Performance Plan (ASPP), Restricted
Stock Units (RSU) – i.e. virtual Allianz shares – are granted as a stock-
based remuneration component to senior management of the Allianz
Group worldwide. In addition, under the Group Equity Incentive (GEI)
scheme, Stock Appreciation Rights (SAR) – i.e. virtual options on
Allianz shares were also granted until 2010. Some of these are still
outstanding. The conditions for these RSU and SAR contain change of
control clauses, which apply if a majority of the voting share capital
in Allianz SE is acquired, directly or indirectly, by one or more third
parties who do not belong to the Allianz Group and which provide for
an exception from the usual vesting and exercise periods. The RSU
will be released, in line with their general conditions, by the company
for the relevant plan participants on the day of the change of control
without observing any vesting period that would otherwise apply. The
cash amount payable per RSU must equal the average market value
of the Allianz share and be at least the price offered per Allianz share
in a preceding tender offer. In case of a change of control as described
above, SAR will be exercised, in line with their general conditions, by
the company for the relevant plan participants on the day of the
change of control without observing any vesting period. By providing
for the non-application of the vesting period in the event of a change
of control, the terms take into account the fact that the conditions
under which the share price moves are very different when there is a
change in control.
A change of control clause in the service contracts of the mem-
bers of Allianz SE's Board of Management provides that, if within
twelve months after the acquisition of more than 50% of the compa-
ny's share capital by one shareholder or several shareholders acting
in concert (change of control) the appointment as a member of the
Board of Management is revoked unilaterally by the Supervisory
Board, or if the mandate is ended by mutual agreement, or if the
Management Board member resigns his or her office because the
responsibilities as a Board member are significantly reduced through
no fault of the Board member, he or she shall receive his or her con-
tractual remuneration for the remaining term of the service contract,
but limited, for the purpose hereof, to three years, in the form of a
one-off payment. The one-off payment is based on the fixed remu-
neration plus 50% of the variable remuneration, however, this basis
being limited to the amount paid for the last fiscal year. To the extent
that the remaining term of the service contract is less than three
years, the one-off payment is generally increased in line with a term
of three years. This applies accordingly if, within two years of a change
of control, a mandate in the Board of Management is coming to an
end and is not extended; the one-off payment will then be granted for
the period between the end of the mandate and the end of the three-
year period after the change of control. For further details, please
refer to the Remuneration Report starting : : : : : : :D:D:D:D:D tage 37.
Allianz SE Board of Management
remuneration
The company has entered into the following compensation agree-
ments with members of the Board of Management and employees
providing for the event of a takeover bid:
Variable remuneration is designed to balance short-term perfor-
mance, longer-term success and sustained value creation.
All variable awards are made under the rules and conditions of
the "Allianz Sustained Performance Plan" (ASPP). The grant of variable
remuneration components is related to performance and can vary
between 0% and 150% of the respective target values. If performance
was rated at 0% no variable component would be granted. Conse-
quently, the minimum total direct compensation for a regular mem-
ber of the Board of Management equals the base salary of € 750 THOU
(excluding perquisites and pension contributions). The maximum
total direct compensation (excluding perquisites and pension con-
tributions) is € 4,125 THOU: base salary € 750 THOU plus € 3,375 THOU
(150% of the sum of all three variable compensation components at
target).
The regulatory environment still remains in a state of flux. The pro-
posed recast of the Directive on shareholder rights, which could
prompt some changes to the corporate governance structure, is at an
advanced stage. The reform of the legislation regarding external
auditors will primarily impact the work of the Supervisory Board. The
Allianz Group's classification as a Global Systemically Important
Insurer will also have a tangible effect on corporate governance.
Annual Report 2015 Allianz Group
31
Statement on Corporate Management
pursuant to § 289a of the HGB
The Statement on Corporate Management pursuant to § 289a of the
German Commercial Code ("Handelsgesetzbuch - HGB") forms part
of the Group Management Report. According to § 317 (2), sentence 4
of the HGB, this Statement does not have to be included within the
scope of the audit.
Declaration of Conformity with the
German Corporate Governance Code
On 10 December 2015, the Board of Management and the Supervisory
Board issued the following Declaration of Conformity of Allianz SE
with the German Corporate Governance Code (hereinafter the "Code"):
DECLARATION OF CONFORMITY IN ACCORDANCE WITH § 161
OF THE GERMAN STOCK CORPORATION ACT (AKTG)
"Declaration of Conformity by the Management Board and the Supervisory Board of
Allianz SE with the recommendations of the German Corporate Governance Code
Commission in accordance with § 161 of the German Stock Corporation Act (AktG)
1. All recommendations of the German Corporate Governance Code (GCGC) in
the version of May 5, 2015 are currently complied with and will be complied with
in the future.
2. Since the last Declaration of Conformity as of December 11, 2014, all recommen-
dations of the GCGC in the version of June 24, 2014 were complied with except
for the following deviation:
According to Item 5.3.2 GCGC, the Audit Committee of the Supervisory Board
shall be responsible for the monitoring of the risk management system. The
Supervisory Board of Allianz SE has additionally established a specific Risk
Committee, which is responsible for the monitoring of the risk management
system.
Each year, the Supervisory Board agrees on performance targets
for the variable remuneration component with members of the Board
of Management. These are documented for the upcoming financial
year. Every three years, the MTB sustainability criteria are set for the
following mid-term period.
However, such deviation ceases to exist due to the amendment of Item
5.3.2 GCGC in the version of May 5, 2015.
For the Board of Management:
Signed Oliver Bäte
For the Supervisory Board:
Signed Dr. Helmut Perlet"
Signed Dr. Helga Jung
In addition, Allianz SE follows all the suggestions of the Code in its
5 May 2015 version and also followed all suggestions in the previous
version of 24 June 2014.
The Declaration of Conformity and further information on
corporate governance at Allianz can be found on our website at
www.allianz.com/corporate-governance.
The listed Group company Oldenburgische Landesbank AG
issued its own Declaration of Conformity in December 2015, which
states that Oldenburgische Landesbank AG complies with all of the
recommendations of the Code in the version of 5 May 2015 (as well as
in the previous year's version of 24 June 2014).
Corporate governance practices
INTERNAL CONTROL SYSTEMS
The Allianz Group has an effective internal control system for verify-
ing and monitoring its operating activities and business processes,
in particular the control of financial reporting. The requirements
placed on the internal control systems are essential not only for the
survival of the company, but also to maintain the confidence of the
capital market, our customers and the public. A comprehensive risk
management system regularly assesses the appropriateness of the
internal control system, taking into account not only qualitative and
quantitative guidelines, but also specific controls for individual busi-
ness activities. For further information on the risk organization and
risk principles, please refer to ②> page 127. For further information on
the internal Controls over Financial Reporting and Risk Capital,
please refer to > page 131.
In addition, the quality of the internal control system is assessed
by the Allianz Group's internal audit staff. Internal Audit conducts
independent audit procedures, analyzing the structure and efficacy
of the internal control systems as a whole. In addition, it also exam-
ines the potential for additional value and improvement of our orga-
nization's operations. Fully compliant with all international auditing
principles and standards, Internal Audit contributes to the evalua-
tion and improvement of the effectiveness of the risk management,
control and governance processes. Therefore, internal audit activities
are geared towards helping the company to mitigate risks and further
assist in strengthening its governance processes and structures.
32
Annual Report 2015 Allianz Group
B- Corporate Governance
Munich, December 10, 2015
Allianz SE
Bilateral credit agreements in some cases provide for termina-
tion rights if there is a change of control, mostly defined as the
acquisition of at least 30% of the voting rights within the meaning
of § 29 (2) of the German Takeover Act ("Wertpapiererwerbs- und
Übernahmegesetz", WpÜG). If such termination rights are exer-
cised, the respective credit lines have to be replaced by new
credit lines under conditions then applicable.
The framework agreements between Allianz SE and the subsi-
diaries of various car manufacturers (FCE Bank plc, Volkswagen
Financial Services AG, respectively) relating to the distribution of
car insurance by the respective car manufacturers each include
a clause under which each party has an extraordinary termina-
tion right in case there is a change of control of the other party.
-
Shares acquired by employees of the Allianz Group as part of the
Employee Stock Purchase Plan are in principle subject to a one-year
lock-up period. Outside Germany, the lock-up period may in some
cases be up to five years. In some countries, in order to ensure that
the lock-up period is observed, the employee shares are held through-
out that period by a bank, another natural person or a legal entity
acting as a trustee. Nevertheless, employees may instruct the trustee
to exercise voting rights or have power of attorney granted to them to
exercise such voting rights. Lock-up periods contribute to the
Employee Stock Purchase Plan's aims of committing employees to
the company and letting them benefit from the performance of the
share price.
SHARE TRANSFERS; EXERCISE OF VOTING RIGHTS
IN CASE OF EMPLOYEE EQUITY PARTICIPATIONS
Shares may only be transferred with the consent of the company. The
company may withhold a duly applied approval only if it deems this
to be necessary in the interest of the company on exceptional grounds.
The applicant will be informed of the reasons.
RESTRICTIONS ON VOTING RIGHTS AND
As of 31 December 2015, the share capital of Allianz SE was
€ 1,169,920,000. It was divided into 457,000,000 registered and fully
paid-up shares with no-par value and a corresponding share capital
amount of € 2.56 per share. All shares carry the same rights and obli-
gations. Each no-par value share carries one vote.
COMPOSITION OF SHARE CAPITAL
Statements pursuant to § 289 (4) and § 315 (4) of the German Commercial Code
("Handelsgesetzbuch- HGB") and explanatory report.
Takeover-related Statements and Explanations
33
33
Annual Report 2015 Allianz Group
§ 17 (2) of the SE Implementation Act ("SE-Ausführungsgesetz”)
states that the Supervisory Board of Allianz SE must be composed of
at least 30% of both women and men as of 1 January 2016. This require-
ment was already met in the 2015 financial year, as the Supervisory
Board consisted of four female and eight male members throughout
the year.
As regards the proportion of women on the first and the second
management level below the Board of Management of Allianz SE, the
Board of Management has set a target quota of at least 20%. Over the
longer term, Allianz is aiming for at least 30% of positions on these
two management levels to be held by women.
The objective for the proportion of women on Allianz SE's Board
of Management is 11%. This figure is based on the status quo, as it is
not easily possible to intervene in ongoing Board appointments and
the first legal implementation period runs only until mid-2017. How-
ever, the Supervisory Board of Allianz SE has already declared its
intention to increase the proportion of women on the Board of Man-
agement to at least 20% by the end of 2018.
INTERESTS IN THE SHARE CAPITAL
To implement the German Act on Equal Participation of Women and
Men in Executive Positions in the Private and the Public Sector,
Allianz SE has set the following objectives for the proportion of women
on the Board of Management and the two management levels below
the Board of Management, which are to be achieved by 30 June 2017.
A general description of the functions of the Board of Manage-
ment, the Supervisory Board and their committees can be found in
the Corporate Governance Report starting on ②> page 27, and on our
website at www.allianz.com/corporate-governance.
A description of the composition of the Supervisory Board and its
committees can be found ::::::D:D:D:D:D page 17 and 19 of the Annual Report.
A description of the composition of the Board of Management can be
found on page 20 to 22, while the composition of the Committees
of the Board of Management is described in the Corporate Governance
Report starting on > page 27. This information is also available on our
website at www.allianz.com/corporate-governance.
OF MANAGEMENT AND THE SUPERVISORY BOARD AND
OF THE COMPOSITION AND FUNCTIONS OF THEIR
COMMITTEES
DESCRIPTION OF THE FUNCTIONS OF THE BOARD
A major component of the Allianz Group's compliance program
is a whistleblower system that allows employees to alert the relevant
compliance department confidentially about irregularities. No
employee voicing concerns about irregularities in good faith needs
to fear retribution, even if the concerns turn out to be unfounded at
a later date.
There are legal provisions against corruption and bribery in
almost all countries in which Allianz has a presence. The global Anti-
Corruption Program of the Allianz Group ensures the continuous
monitoring and improvement of the internal anti-corruption con-
trols. More information on the Anti-Corruption Program can be found
in the Sustainability Report on our website at > www.allianz.com/
sustainability.
The Code of Conduct and the internal guidelines derived from it
provide all employees with clear guidance on behavior that lives up
to the values of the Allianz Group. In order to transmit the principles
of the Code of Conduct and the internal compliance program based
on these principles, Allianz has implemented interactive training
programs around the world. These provide practical guidelines
which enable employees to come to their own decisions. The Code of
Conduct also forms the basis for guidelines and controls to ensure
fair dealings with Allianz Group customers (sales compliance).
The standards of conduct established by the Allianz Group's
Code of Conduct for Business Ethics and Compliance are obligatory
for all employees worldwide. The Code of Conduct is available on our
website at www.allianz.com/corporate-governance.
The sustained success of the Allianz Group is based on the respon-
sible behavior of all Group employees, who embody trust, respect and
integrity. By means of the global compliance program coordinated by
its central compliance function, Allianz supports and follows inter-
nationally and nationally recognized guidelines and standards for
rules-compliant and value-based corporate governance. These
include the principles of the United Nations (UN Global Compact),
the Guidelines of the Organization for Economic Co-operation and
Development (OECD guidelines) for Multinational Enterprises, and
European and international standards on data and consumer protec-
tion, economic and financial sanctions and combating corruption,
bribery, money laundering and terrorism financing. Through its sup-
port for and acceptance of these standards, Allianz aims to avoid the
risks that might arise from non-compliance. The central compliance
function is responsible - in close cooperation with local compliance
departments – for ensuring the effective implementation and moni-
toring of the compliance program within the Allianz Group, as well
as for investigating potential compliance infringements.
COMPLIANCE PROGRAM
34 Takeover-related Statements
and Explanations
37 Remuneration Report
32 Statement on Corporate Management
pursuant to § 289a of the HGB
27 Corporate Governance Report
German Act on Equal Participation of
Women and Men in Executive Positions in
the Private and the Public Sector
EXCEEDING 10% OF THE VOTING RIGHTS
No direct or indirect interests in the share capital of Allianz SE that
exceed 10% of the voting rights have been reported to Allianz SE; nor
are we otherwise aware of any such interests.
SHARES WITH SPECIAL RIGHTS
CONFERRING POWERS OF CONTROL
35
Annual Report 2015 Allianz Group
The exclusive bancassurance distribution agreement between
Allianz SE and HSBC for life insurance products in Turkey includes
a clause under which both parties have an extraordinary termina-
tion right in case there is a change of control of the other party's
ultimate holding company.
The exclusive bancassurance distribution agreement between
Allianz and HSBC for life insurance products in Asia (China, Indo-
nesia, Malaysia, Australia, Sri Lanka, Taiwan, Brunei, Philippines)
includes a clause under which both parties have an extraordi-
nary termination right in case there is a change of control of the
other party's ultimate holding company.
Our reinsurance contracts, in principle, include a clause under
which both parties to the contract have an extraordinary termi-
nation right in the case where the other party to the contract
merges or its ownership or control situation changes materially.
Agreements with brokers regarding services connected with the
purchase of reinsurance cover also provide for termination
rights in case of a change of control. Such clauses are standard
market practice.
-
The following essential agreements of the company are subject to a
change of control condition following a takeover bid:
ESSENTIAL AGREEMENTS OF ALLIANZ SE WITH CHANGE
OF CONTROL CLAUSES AND COMPENSATION AGREEMENTS
PROVIDING FOR TAKEOVER SCENARIOS
Domestic or foreign banks that are majority-owned by Allianz SE
may buy and sell Allianz shares for trading purposes (§ 71 (1) No. 7
and (2) of the German Stock Corporation Act) under an authorization
of the General Meeting valid until 6 May 2019. The total number of
shares acquired thereunder, together with treasury shares held by
Allianz SE or attributable to it under § § 71a et seq. of the German Stock
Corporation Act, shall at no time exceed 10% of the share capital of
Allianz SE.
The Board of Management may buy back and use Allianz shares
for other purposes until 6 May 2019 on the basis of the authorization
of the General Meeting of 7 May 2014 (§ 71 (1) No. 8 of the German Stock
Corporation Act). Together with other treasury shares that are held by
Allianz SE, or which are attributable to it under §§ 71a et seq. of the
German Stock Corporation Act, such shares may not exceed 10% of
the share capital at any time. The shares acquired pursuant to this
authorization may be used, under exclusion of the shareholders' sub-
scription rights, for any legally admissible purposes, and in particular
those specified in the authorization. Furthermore, the acquisition of
treasury shares under this authorization may also be carried out
using derivatives such as put options, call options, forward purchases
or a combination thereof, provided such derivatives do not relate to
more than 5% of the share capital.
The company's share capital is conditionally increased by up to
€ 250,000,000 (Conditional Capital 2010/2014). This conditional capital
increase will only be carried out to the extent that conversion or option
rights resulting from bonds issued by Allianz SE or its subsidiaries on
the basis of the authorization of the General Meeting of 5 May 2010 or
on the basis of the authorization of the General Meeting of 7 May 2014
are exercised, or that conversion obligations tied to such bonds are
fulfilled.
Up to a total of € 13,720,000 (Authorized Capital 2014/11). The share-
holders' subscription rights can be excluded in order to issue the
new shares to employees of Allianz SE and its Group companies
as well as for fractional amounts.
Up to a total of € 550,000,000 (Authorized Capital 2014/1). In case
of a capital increase against cash contribution, the Board of
Management may exclude the shareholders' subscription rights
for these shares with the consent of the Supervisory Board, (i) for
fractional amounts, (ii) in order to safeguard the rights pertain-
ing to holders of convertible bonds or bonds with warrants,
including mandatory convertible bonds, and (iii) in the event of
a capital increase of up to 10%, if the issue price of the new shares
is not significantly less than the stock market price. The Board of
Management may furthermore exclude the shareholders' sub-
scription rights with the consent of the Supervisory Board, in the
event of a capital increase against contributions in kind.
-
It may increase the company's share capital, on or before 6 May
2019, with the approval of the Supervisory Board, by issuing new reg-
istered no-par value shares against contributions in cash and/or in
kind, on one or more occasions:
The Board of Management is authorized to issue shares as well as to
acquire and use treasury shares as follows:
AUTHORIZATION OF THE BOARD OF MANAGEMENT
TO ISSUE AND REPURCHASE SHARES
Amendments to the Statutes must be adopted by the General
Meeting. § 13 (4) sentence 2 of the Statutes of Allianz SE stipulates that,
unless this conflicts with mandatory law, changes to the Statutes
require a two-thirds majority of the votes cast, or, if at least one half
of the share capital is represented, a simple majority of the votes cast.
The Statutes thereby make use of the option set out in § 51 sentence 1
of the SE Implementation Act (“SE-Ausführungsgesetz") which is
based upon Article 59 (1) and (2) of the SE Regulation. A larger major-
ity is, inter alia, required for a change in the corporate object or
the relocation of the registered office to another E.U. member state
(§ 51 sentence 2 of the SE Implementation Act). The Supervisory Board
may alter the wording of the Statutes (§ 179 (1) sentence 2 of the Ger-
man Stock Corporation Act and § 10 of the Statutes).
34 Takeover-related Statements
and Explanations
37 Remuneration Report
32 Statement on Corporate Management
pursuant to § 289a of the HGB
27 Corporate Governance Report
B- Corporate Governance
Annual Report 2015 Allianz Group
34
German insurance supervisory law requires that members of the
Board of Management have the reliability and professional compe-
tence needed to manage an insurance company. A person cannot
become a member of the Board of Management if he or she is already
a manager of two other insurance undertakings, pension funds,
insurance holding companies or insurance special purpose vehicles.
However, the supervisory authority may permit more than two such
mandates if they are held within the same group (§ 24 (3) of the German
Insurance Supervision Act ("Versicherungsaufsichtsgesetz" in the
version applicable as from 1 January 2016, VAG). The Federal Financial
Services Supervisory Authority (“Bundesanstalt für Finanzdienst-
leistungsaufsicht") must be notified about the intention of appointing
a Board of Management member pursuant to § 47 No. 1 VAG.
According to §5 (1) of the Statutes, the Board of Management
shall consist of at least two persons. Otherwise, the Supervisory Board
determines the number of members. The Supervisory Board has
appointed a Chairman of the Board of Management pursuant to
§ 84 (2) of the German Stock Corporation Act.
The Supervisory Board appoints the members of Allianz SE's Board of
Management for a maximum term of five years (Article 9(1), Article
39 (2) and Article 46 of the SE Regulation, §§ 84, 85 of the German Stock
Corporation Act and § 5 (3) of the Statutes). Reappointments, in each
case for a maximum of five years, are permitted. A simple majority of
the votes cast in the Supervisory Board is required to appoint mem-
bers of the Board of Management. In the case of a tie vote, the Chair-
person of the Supervisory Board, who pursuant to Article 42, sen-
tence 2 of the SE Regulation must be a shareholder representative,
shall have the casting vote (§ 8 (3) of the Statutes). If the Chairperson
does not participate in the vote the Deputy Chairperson shall have
the casting vote, provided he or she is a shareholder representative.
A Deputy Chairperson who is an employee representative has no
casting vote (§ 8 (3) of the Statutes). If a required member of the Board
of Management is missing, in urgent cases the courts must appoint
such member upon the application of an interested party (§ 85 of the
German Stock Corporation Act). The Supervisory Board may dismiss
members of the Board of Management if there is an important reason
(§ 84 (3) of the German Stock Corporation Act).
LEGAL AND STATUTORY PROVISIONS APPLICABLE
TO THE APPOINTMENT AND REMOVAL OF MEMBERS OF
THE BOARD OF MANAGEMENT AND TO AMENDMENTS
OF THE STATUTES
There are no shares with special rights conferring powers of control.
Outlook
100
You can find the 2016 financial calendar on our website at
www.allianz.com/financialcalendar.
In compliance with special legal provisions that apply to insur-
ance companies, the auditor of the annual financial statements and
of the half-yearly financial report is appointed by the Supervisory
Board, and not by the AGM. The audit of the financial statements covers
the individual financial statements of Allianz SE and also the consoli-
dated financial statements of the Allianz Group.
RISK COMMITTEE
Dr. Helmut Perlet (Chairman)
2/2
Dante Barban
2/2
Christine Bosse
2/2
1/2
སླ་སྦ་སྲུངངས
100
100
100
1/11
Dr. Helmut Perlet
100
100
50
Franz Heiß
Jürgen Lawrenz
Peter Denis Sutherland
NOMINATION COMMITTEE
Dr. Helmut Perlet (Chairman)
Prof. Dr. Renate Köcher
Peter Denis Sutherland
Fངང
1/1
100
1/1
1/12
100
Jim Hagemann Snabe
5/5
66.67
3/3
100
Gabriele Burkhardt-Berg
Prof. Dr. Renate Köcher
Rolf Zimmermann
PERSONNEL COMMITTEE
Dr. Helmut Perlet (Chairman)
6/6
100
Christine Bosse
5/6
83.33
100
Rolf Zimmermann
100
AUDIT COMMITTEE
Dr. Wulf H. Bernotat (Chairman)
4/5
80
Jean-Jacques Cette
5/5
100
Ira Gloe-Semler
5/5
100
5/5
100
6/6
1/1
100
Annual Report 2015 Allianz Group
At least four of the members must, on the basis of their origin or function, represent
regions or cultural areas in which Allianz SE conducts significant business.
Since the establishment of Allianz SE as a Societas Europaea (European Company),
Allianz employees from different Member States of the EU are considered in the
distribution of Supervisory Board seats for employee representatives, according to the
Agreement concerning the Participation of Employees in Allianz SE dated 3 July 2014.
3. Diversity and appropriate representation of women
The members of the Supervisory Board shall complement one another regarding their
background, professional experience and specialist knowledge, in order to provide the
Supervisory Board with the most diverse sources of experience and specialist knowledge
possible.
- there are six ordinary Supervisory Board meetings per year, each of which requires The Supervisory Board shall be composed of at least 30% women and at least 30% men.
adequate preparation;
The representation of women is generally considered to be the joint responsibility of
the shareholder and employee representatives."
- sufficient time has to be dedicated for the audit of the annual and consolidated
financial statements;
- attendance of the General Meeting is required;
1- For further details, please see BaFin Guidance Notice on Vetting Members of Administrative and Super-
visory Bodies in accordance with the German Banking Act and the German Insurance Supervision Act in
its respective effective version.
30
30
Annual Report 2015 Allianz Group
B- Corporate Governance
27 Corporate Governance Report
2. International character
32 Statement on Corporate Management
pursuant to § 289a of the HGB
and Explanations
37 Remuneration Report
The composition of the Supervisory Board of Allianz SE reflects these Accounting and auditing
objectives. It has an appropriate number of independent members
with international backgrounds. With four female Supervisory Board
members, the current legislation for equal participation of women
and men in leadership positions (statutory gender quota of 30%) is
being met. The current composition of the Supervisory Board and its
committees is described :: ::D:D:D:D:D:D:age 17.
Shares held by members of the Board of
Management and the Supervisory Board
The total holdings of members of the Board of Management and the
Supervisory Board of Allianz SE amounted to less than 1% of the com-
pany's issued shares as of 31 December 2015.
Directors' dealings
Members of the Board of Management and the Supervisory Board are
obliged by the German Securities Trading Act ("Wertpapierhandels-
gesetz") to disclose any transactions involving shares of Allianz SE or
financial instruments based on them to both Allianz SE and the Ger-
man Federal Financial Supervisory Authority should the value of the
shares acquired or divested by the member or a person closely asso-
ciated to the member amount to five thousand Euros or more within
a calendar year. Such disclosures are published on our website at
>www.allianz.com/management-board ::::::::D:D:D:D:D:D: www.allianz.com/
supervisory-board.
Annual General Meeting
Shareholders exercise their rights at the Annual General Meeting.
When adopting resolutions, each share carries one vote. Shareholders
can follow the AGM's proceedings on the internet and be represented
by proxies. These proxies exercise voting rights exclusively on the
basis of instructions given by the shareholder. Shareholders are also
able to cast their votes via the internet in the form of online voting.
Allianz SE regularly promotes the use of internet services.
Annual Report 2015 Allianz Group
The Allianz Group prepares its accounts according to § 315a of the
German Commercial Code ("Handelsgesetzbuch- HGB") on the basis
of IFRS international accounting standards as adopted within the
European Union. The annual financial statements of Allianz SE are
prepared in accordance with German law, in particular the HGB.
34 Takeover-related Statements
At least one member must have expert knowledge of accounting and auditing
as defined by § 100 (5) of the German Stock Corporation Act (AktG).
Specialist knowledge of, or experience in, other economic sectors.
At least one member must have considerable experience in the insurance and
financial-services fields
II. Requirements relating to the composition of the Board as a whole
1. Specialist knowledge
1 - Mr. Heiß left the Supervisory Board on 31 July 2015.
2- Mr. Lawrenz joined the Supervisory Board on 1 August 2015.
29
OBJECTIVES OF THE SUPERVISORY BOARD
REGARDING ITS COMPOSITION
In order to implement a recommendation by the Code, the Super-
visory Board specified the following objectives for its composition at
its meeting on 10 December 2015:
OBJECTIVES OF ALLIANZ SE'S SUPERVISORY BOARD REGARDING ITS COMPOSITION
"The aim of Allianz SE's Supervisory Board is to have members who are equipped with
the necessary skills and competence to properly supervise and advise Allianz SE'S
management. Supervisory Board candidates should possess the professional expertise
and experience, integrity, motivation and commitment, independence and personality
required to successfully carry out the responsibilities of a Supervisory Board member
in a financial-services institution with international operations. To promote additional
cooperation among Supervisory Board members, care should be taken in selecting
the candidates to ensure that adequate attention is paid to ensuring diversity in
occupational backgrounds, professional expertise and experience.
I. Requirements relating to the individual members
of the Supervisory Board
1. General selection criteria
Managerial or operational experience
- General knowledge of the insurance and financial services business
Willingness and ability to make sufficient commitments on substance
Fulfillment of the regulatory requirements, in particular':
Reliability
Knowledge of the field of corporate governance and supervisory law
Knowledge of the main features of accounting and risk management
Compliance with the limitation on the number of mandates as recommended by
the German Corporate Governance Code and required by § 24 (4) of the German
Insurance Supervision Act 2016 ("Versicherungsaufsichtsgesetz - VAG 2016").
2. Independence
At least eight members of the Supervisory Board should be independent as defined
by No. 5.4.2 of the Corporate Governance Code, i.e. they may not have any business
or personal relations with Allianz SE or its Executive Bodies, a controlling shareholder
or an enterprise associated with the latter, which may cause a substantial and not
merely temporary conflict of interests. In case shareholder representatives and
employee representatives are viewed separately, at least four members should be
independent within the meaning of No. 5.4.2 of the Corporate Governance Code.
Regarding employee representatives, however, the mere fact of employee repre-
sentation and the existence of a working relationship with the company shall not
itself affect independence.
In addition, at least one member must be independent within the meaning of
$100 (5) of the German Stock Corporation Act (AktG).
It must be taken into account that the possible emergence of conflicts of interest in
individual cases cannot, as a general rule, be excluded. Potential conflicts of interest
must be disclosed to the chairman of the Supervisory Board and will be resolved by
appropriate measures.
3. Time of availability
Each member of the Supervisory Board must ensure that it has sufficient time to
dedicate to the proper fulfilment of the Supervisory Board mandate. It has to be taken
into account that
Employee representation within Allianz SE, as provided for by the SE Agreement
concerning the Participation of Employees dated 3 July 2014, contributes to diversity of
work experience and cultural background. Pursuant to § 6 (2) sentence 2 of the Act on
the Participation of Employees in a European Company (SEBG), the number of women
and men appointed as German employee representatives should be proportional to
the number of women and men working in the German companies. However, the
Supervisory Board does not have the right to select the employee representatives.
The following requirements and objectives apply to the composition of Allianz SE'S
Supervisory Board:1
-
depending on possible memberships in one or more of the currently five Super-
visory Board committees, extra time planning to participate in the committee
meetings and to prepare for such meetings is required; this applies in particular to
the Audit and Risk Committees;
extraordinary meetings of the Supervisory Board or of a committee may be
necessary to deal with special matters.
4. Retirement age
According to the Supervisory Board's Rules of Procedure, its members may not,
in general, be older than 70 years of age.
5. Term of membership
The continuous period of membership for any member of the Supervisory Board
should, as a rule, not exceed 15 years.
To ensure maximum transparency, we inform our shareholders,
financial analysts, the media and the general public of the company's
situation on a regular basis and in a timely manner. The annual
financial statements of Allianz SE, the Allianz Group's consolidated
financial statements and the respective management reports are
published within 90 days of the end of each financial year. Additional
information is provided in the Allianz Group's quarterly and half-
yearly financial reports. As of the fiscal year 2016, the quarterly finan-
cial reports will be replaced by quarterly statements; the half-yearly
financial reports will still be reviewed by the auditor. Information is
also made available at the AGM, at press and analysts' conferences,
as well as on the Allianz Group's website. Our website also provides
a financial calendar listing the dates of major publications and
events, such as annual reports, quarterly statements and half-yearly
financial reports, AGMS as well as analyst conference calls and Finan-
cial press conferences.
The AGM elects the shareholder representatives of the Super-
visory Board and approves the actions taken by the Board of Manage-
ment and the Supervisory Board. It decides on the use of profits,
capital transactions and the approval of intercompany agreements,
as well as the remuneration of the Supervisory Board and changes to
the company's Statutes. In accordance with European regulations
and the Statutes, changes to the Statutes require a two-thirds major-
ity of votes cast in case less than half of the share capital is repre-
sented in the AGM. Each year, an ordinary AGM takes place at which
the Board of Management and Supervisory Board give an account of
the preceding financial year. For special decisions, the German Stock
Corporation Act provides for the convening of an extraordinary AGM.
19
750
283
4,427
283
254
283
3,662
1,946
7,821
1,052
1- In accordance with the German Corporate Governance Code, the annual bonus disclosed for performance
year 2015 is paid in 2016 and for performance year 2014 in 2015. The payments for equity related deferred
compensation (GEI and AEI), however, are disclosed for the year in which the actual payment was made.
2- The MTB figure included in the Actual Grant column shows the annual accrual. The payout 2015 figure
includes the 2015 accrual and the accruals from the performance years 2013 and 2014, as adjusted by the
sustainability assessment. The MTB 2013-2015 is paid out in spring 2016.
4-The equity-related remuneration that applied before 2010 consisted of two vehicles, virtual stock awards
known as RSUS and virtual stock options known as "Stock Appreciation Rights" (SAR). Only RSUS have been
awarded as of 1 January 2010. The remuneration system valid until December 2009 is disclosed in the
Annual Report 2009 (starting on page 17). Whereas the GEI/RSU grants are automatically exercised at the
vesting date, the GEI/SAR grants are exercised by the Board member within the exercise period following
the vesting date. Hence the total payout from SARS depends on the individual decision by the Board
member. SARS are released to plan participants upon expiry of the vesting period, assuming all other
exercise hurdles are met. For SARS granted until and including 2008, the vesting period was two years and
the exercise period five years. For SARS granted 2009, the vesting period is four years and the exercise
period three years. SARS can be exercised on the condition that the price of the Allianz SE stock is at least
20% above the strike price at the time of grant. During the term of the plan, at least once on five consecu-
tive trading days the Allianz SE stock must relatively appreciate at least 0.01 percentage points ahead of
the appreciation of the Dow Jones EURO STOXX Price Index (600).
42
Annual Report 2015 Allianz Group
B- Corporate Governance
27 Corporate Governance Report
32 Statement on Corporate Management
pursuant to § 289a of the HGB
3-Payout is capped at 200% above grant price. The relevant share price used to determine the fair market
value, and hence the final number of RSUs granted, and the 200% cap are only available after sign-off by
the external auditors.
3,302
3,284
283
GEI 2009/RSU³
GEI 2010/SAR4
GEI 2008/SAR4
Total
Pensions Service Cost5
Total
1,520
876
719
3,030
3,019
769
4,144
3,379
1,692
7,538
254
283
34 Takeover-related Statements
GEI 2010/RSU³
and Explanations
Dr. Helga Jung (Appointed: 01/2012)
Min
Max
Target
Target
Min
Max
750
Target
750
750
750
750
750
750
750
750
750
Target
2015
2014
Dr. Christof Mascher (Appointed: 09/2009)
Actual ¦
Actual
Grant
Grant
Payout¹
Grant
Grant
Payout¹
2014
2015
2015
2014
2015
2014
2015
2015
37 Remuneration Report
750
AEI 2011/RSU³
2,784
€ THOU
Jay Ralph (Appointed: 01/2010)
Actual
Grant
Grant
Payout¹
2014
3,991
2015
2014
2015
Target
Target
Min
Max
Base Salary
2015
1,860
2,915
3,553
731
3,257
2,619
1,543
3,695
Pensions Service Cost5
317
296
296
296
296
317
296
Total
3,332
2,710
1,027
750
AEI 2015/RSU³
750
750
750
1,125
870
912
870
Deferred Compensation
MTB (2013-2015)²
750
AEI 2016/RSU³
750
1,125
870
750
1,125
870
750
750
Annual Variable Compensation - Annual Bonus
769
780
750
750
750
Perquisites
30
19
19
19
19
30
19
Total fixed compensation
780
769
769
769
769
750
750
750
750
Payout¹
Grant
Grant
Payout¹
2014
2015
2015
Actual
2014
2014
2015
2015
2014
2015
Target
Target
2015
Actual
Grant
Grant
7,021
3,501
3,350
1,100
4,475
3,678
Dr. Axel Theis (Appointed: 01/2015)
Dr. Dieter Wemmer (Appointed: 01/2012)
2,885
1,584
593
1319
༄།ཎྜ།
1,950
6,673
339
348
2,289
Min
4,330
Max
Target
16
16
16
17
16
777
777
16
777
777
767
766
766
766
766
767
777
17
27
27
Min
Max
750
750
750
750
750
750
750
750
750
750
750
750
27
27
27
Target
1,829
3,311
4,413
912
752
752
752
752
912
752
764
750
1,125
758
763
758
750
750
1,125
750
764
764
764
14
14
14
14
14
14
14
1628
2
2
2
2
1628
2
764
764
764
859
907
859
750
4,139
274
3,037
1,527
4,056
3,162
3,002
752
274
302
274
339
348
348
4,127
348
3,330
348
3,288
1,038
274
2,414
274
3,014
750
1,125
758
750
1,125
758
750
2,534
750
750
1,125
859
750
1,125
859
750
3,014
302
3,316
764
766
3,015
GEI 2008/SAR4
483
368
483
3,375
4,480
1,492
5,974
483
5,273
9,151
1- In accordance with the German Corporate Governance Code, the annual bonus disclosed for performance
year 2015 is paid in 2016 and for performance year 2014 in 2015. The payments for equity related deferred
compensation (GEI and AEI), however, are disclosed for the year in which the actual payment was made.
2- The MTB figure included in the Actual Grant column shows the annual accrual. The payout 2015 figure
includes the 2015 allocation and the accruals from the performance years 2013 and 2014, as adjusted by
the sustainability assessment. The MTB 2013-2015 is paid out in spring 2016.
3-Payout is capped at 200% above grant price. The relevant share price used to determine the fair market
value, and hence the final number of RSUS granted, and the 200% cap are only available after sign-off by
the external auditors.
4-The equity-related remuneration that applied before 2010 consisted of two vehicles, virtual stock awards
known as RSUS and virtual stock options known as "Stock Appreciation Rights" (SAR). Only RSUS have been
awarded as of 1 January 2010. The remuneration system valid until December 2009 is disclosed in the
Annual Report 2009 (starting on page 17). Whereas the GEI/RSU grants are automatically exercised at the
vesting date, the GEI/SAR grants are exercised by the Board member within the exercise period following
the vesting date. Hence the total payout from SARS depends on the individual decision by the Board
member. SARS are released to plan participants upon expiry of the vesting period, assuming all other
exercise hurdles are met. For SARS granted until and including 2008, the vesting period was two years and
the exercise period five years. For SARS granted 2009, the vesting period is four years and the exercise
period three years. SARS can be exercised on the condition that the price of the Allianz SE stock is at least
20% above the strike price at the time of grant. During the term of the plan, at least once on five consecu-
tive trading days the Allianz SE stock must relatively appreciate at least 0.01 percentage points ahead of
the appreciation of the Dow Jones EURO STOXX Price Index (600).
5- Pension Service Cost in accordance with IAS 19: represents the company cost not the actual entitlement
nor a payment, however, according to the German Corporate Governance Code the Pension Service Cost
is to be included in all columns.
40
40
2,800
483
483
368
1,260
996
1,494
1,260
3,516
1,704
916
228
438
263
3,007
3,997
1,009
5,491
4,790
2,432
8,668
Annual Report 2015 Allianz Group
1,494
B- Corporate Governance
32 Statement on Corporate Management
pursuant to § 289a of the HGB
2015
Target
Target
Min
Max
Target
Target
2014
Min
1,280
24
=l
447
447
447
447
Max
2015
2015
2014
34 Takeover-related Statements
and Explanations
37 Remuneration Report
Michael Diekmann (Appointed: 10/1998; CEO 04/2003-05/2015)
Sergio Balbinot (Appointed: 01/2015)
Grant
Actual
Grant
Payout¹
Grant
Actual
Grant
Payout¹
2014
2015
2015
2014
2015
27 Corporate Governance Report
1,280
996
「8 '8
Oliver Bäte (Appointed: 01/2008; CEO since 05/2015)
Grant
Actual
Grant
Payout¹
2014
2015
€ THOU
2015
2015
Target
Target
Min
Max
Base Salary
Perquisites
Total fixed compensation
2014
INDIVIDUAL REMUNERATION: 2015 AND 2014
The 2015 payout is significantly higher than in 2014 due to the
fact that the payout of the MTB 2013-2015 is disclosed. This compris-
es payment for three performance years in total.
To make the remuneration related to the performance year 2015
more transparent, the additional column "actual grant" includes the
2015 fixed compensation, the bonus paid for 2015, the MTB 2013-2015
tranche accrued for the performance year 2015, and the fair value of
the RSU grant in 2016 for the performance year 2015.
32 Statement on Corporate Management
pursuant to § 289a of the HGB
34 Takeover-related Statements
and Explanations
37 Remuneration Report
Equity-related remuneration (long-term): A virtual share award,
known as “Restricted Stock Units” (RSUS). The grant value of the
RSUS allocated equals the annual bonus of the performance year.
The number of RSUS allocated is derived from dividing the grant
value by the fair market value of an RSU at the time of grant.
The fair market value is calculated based on the ten-day
average Xetra closing price of the Allianz stock following the
financial press conference on the annual results. As RSUs are
virtual stocks without dividend payments, the average Xetra
closing price is reduced¹ by the net present value of the expected
future dividend payments during the vesting period. The expected
dividend stream is discounted with the respective swap rates as
of the valuation day.
Following the end of the four-year vesting period, the com-
pany makes a cash payment based on the number of RSUS granted
and the ten-day average Xetra closing price of the Allianz stock
following the annual financial press conference in the year of
expiry of the respective RSU plan. The RSU payout is capped at
200% above grant price to avoid extreme payouts². Outstanding
RSU holdings are forfeited should a Board member leave at his/
her own request or be terminated for cause.
Variable remuneration components may not be paid, or payment
may be restricted in the case of a breach of the Allianz Code of Con-
duct, risk limits, or compliance requirements. Additionally, a reduc-
tion or cancellation of variable remuneration may occur if the super-
visory authority (BaFin) requires this in accordance with its statutory
powers.
Pensions and similar benefits
To provide competitive and cost-effective retirement and disability
benefits, Board of Management members have participated in a con-
tribution-based system since 1 January 2005 which was modified to
My Allianz Pension in 2015 for all Board members born after 31 Decem-
ber 1957. Before 2005, Board members participated in a defined benefit
plan that provided fixed benefits not linked to base salary increases.
Benefits generated under this plan were frozen at the end of 2004.
Additionally, most Board members participate in the Allianz Versor-
gungskasse VVaG (AVK), a contribution-based pension plan, and the
Allianz Pensionsverein e. V. (APV) – which provide pension benefits for
salaries
up to the German social security ceiling.
Company contributions to the current pension plan depend on
the years of service on the Board of Management. For most members
of the Allianz SE Board of Management, the contributions are invested
in a fund with a guarantee for the contributions paid, but no further
interest guarantee. On retirement, the accumulated capital is paid
out as lump sum or can be converted into a lifetime annuity. Each
year the Supervisory Board decides whether and to what extent a bud-
get is provided, also taking into account the targeted pension level.
This budget includes a risk premium paid to cover death and dis-
ability. The earliest age a pension can be drawn is 62, except for cases
of occupational or general disability for medical reasons. In these
cases, it may become payable earlier and an increase by projection
may apply. In the case of death, a pension may be paid to dependents.
Surviving dependents normally receive 60% (surviving partner) and
20% (per child) of the original Board member's pension, with the
aggregate not to exceed 100%. Should Board membership cease
before retirement age for other reasons, the accrued pension rights
are maintained if vesting requirements are met.
For members of the Allianz SE Board of Management who were
born before 1 January 1958 and for rights accrued before 2015 the
guaranteed minimum interest rate remains at 2.75% and the retire-
ment age is still 60.
Perquisites
Perquisites mainly consist of contributions to accident and liability
insurances and the provision of a company car. Perquisites are not
linked to performance. Each member of the Board of Management is
responsible for the income tax on these perquisites. The Supervisory
Board regularly reviews the level of perquisites.
1-The fair market value of the RSUs is further subject to a small reduction of a few Euro cents due to the
200% cap on the RSU payout. This reduction is calculated based on a standard option price formula.
2-The relevant share price used to determine the final number of RSUS granted and the 200% cap is only
available after sign-off by the external auditors.
Annual Report 2015 Allianz Group
39
REMUNERATION FOR 2015
The following remuneration disclosure is based on and compliant
with the German Corporate Governance Code and illustrates indi-
vidual remuneration for 2014 and 2015, including fixed and variable
remuneration and pension service cost. The “grant” column below
shows the remuneration at target and minimum and maximum
levels. The "payout" column discloses the 2014 and 2015 payments.
The base salary, annual bonus and perquisites are linked to the
reported performance years 2014 and 2015, whereas the Group Equity
Incentive (GEI) and Allianz Equity Incentive (AEI) payouts result from
grants related to the performance years 2008-2010.
750
750
994
994
1,260
1,009
1,260
Deferred Compensation
MTB (2013-2015)²
AEI 2016/RSU³
AEI 2015/RSU³
1,494
AEI 2011/RSU³
GEI 2009/RSU³
GEI 2010/SAR4
GEI 2008/SAR4
Total
Pensions Service Cost5
Total
750
GEI 2010/RSU³
996
750
Annual Variable Compensation - Annual Bonus
994
750
994
7
15
15
15
15
7
15
757
1,009
1,009
1,009
1,009
757
1,009
994
447
750
750
2014
2015
2015
2014
2015
Target
Target
Payout¹
Min
Base Salary
750
563
563
563
563
750
Max
Grant
Grant
Actual
694
2,683
2,296
5,187
9,975
3,255
1,005
4,380
4,002
3,003
7- Michael Diekmann retired on 7 May 2015. He received a pro-rated base salary, annual bonus, and equity-
related compensation. The different pro-rated amounts for base salary and target amounts result from
different pro-rating methodologies, which are generally applied. According to his service contract, he will
receive his fixed salary of € 106.7 THOU per month for a period of 6 months from December 2015 as a
transition payment, which will be set off against the regular pension payment. As part of the transition
payment he will receive a payment of 25% of the annual variable target compensation (€ 960 THOU) in
spring 2017.
8- In addition to the amounts disclosed in the table, Sergio Balbinot received a buyout award of € 6 MN to
compensate for forfeited grants from his previous employer: € 3 MN in cash and € 3 MN in RSUS. 50% of the
cash amount was paid in February 2015 and 50% will be paid in 2016 and are subject to clawback.
Annual Report 2015 Allianz Group
41
INDIVIDUAL REMUNERATION: 2015 AND 2014
€ THOU
Manuel Bauer 6 (Appointed: 01/2011; End of Service: 09/2015)
563
2,020
Perquisites
1687
MTB (2013-2015)²
750
561
842
629
561
842
Deferred Compensation
629
2,335
AEI 2016/RSU³
AEI 2015/RSU³
AEI 2011/RSU³
GEI 2010/RSU³
GEI 2009/RSU³
GEI 2010/SAR4
750
629
778
629
1687
1687
1687
15
1687
Total fixed compensation
765
731
731
731
731
765
731
Annual Variable Compensation - Annual Bonus
750
561
842
15
6,142
2,781
222
222
783
783
783
783
783
1,280
442
459
663
1,546
534
750
1,125
999
999
1,280
534
1,304
459
459
750
750
750
12
12
12
12
24
12
33
33
33
33
33
1,304
459
459
442
663
534
442
2,061
4,189
9,740
3,033
783
4,158
3,780
998
235
235
235
235
998
235
222
222
222
2,448
Total
459
5,144
663
534
1,280
|| || ||
3,952
750
1,125
999
999
750
1,125
999
2,776
1,569
376
963
450
1,785
750
1,125
956
8
147
274
3,134
2014
62
43
1,800
1,175
1,629
9
221
302
3,025
Dr. Christof Mascher
2015
251
210
1,187
56
57
287
9
296
2014
57
58
1,678
249
1,818
9
162
317
3,658
Dr. Helga Jung
2015
62
280
2015
3,016
37
1,884
2014
251
1,618
3
17
1
283
254
Dr. Axel Theis
2015
120
110
3,085
199
2,450
1,635
1
23
5
63
508
348
3,562
2014
273
2,802
3
29
63
453
339
3,284
Jay Ralph
2015
278
1,860
5
10
Manuel Bauer?
246
DBO5
SC4
DBO5
SC4
DBO5
SC4
DBO5
SC4
SC4
Oliver Bäte
2015
283
2,916
6
31
194
DBO5
payment³
Board of Management
pension
1- The relevant share price used to determine the fair market value, and hence the final number of RSUS
granted, is only available after sign-off of the Annual Report by the external auditors, thus numbers are
based on a best estimate. As disclosed in the Annual Report 2014, the equity-related grant in 2015 was
made to participants as part of their 2014 remuneration. The disclosure in the Annual Report 2014 was
based on a best estimate of the RSU grants. The actual grants deviated from the estimated values and
have to be disclosed accordingly. The actual RSU grants as of 12 March 2015 under the Allianz Equity
Incentive are as follows: Oliver Bäte: 8,187, Michael Diekmann: 12,554, Manuel Bauer: 6,319, Dr. Helga Jung:
6,192, Dr. Christof Mascher: 7,364, Jay Ralph: 7,401, Dr. Dieter Wemmer: 8,088, Dr. Werner Zedelius: 8,379,
Dr. Maximilian Zimmerer: 7,379.
2- Grants of equity-related remuneration are accounted for as cash settled awards. The fair market value of
the granted RSUS and SARS is remeasured at each reporting date and accrued, as a compensation expense,
proportionately over the vesting and service period. Upon vesting, any subsequent changes in the fair
value of the unexercised SARS are also recognized as a compensation expense.
3-24,820 RSUS granted in March 2015 include RSUS granted for his December 2014 employment contract.
Annual Report 2015 Allianz Group
45
46
PENSIONS
Company contributions for the current plan remain unchanged from
2014 and are set at 27.98% of the base salary, increasing to 34.98% after
five years and to 41.98 % after ten years of service on the Board of Man-
agement. These are invested in a fund and have a guarantee for the
contributions paid, but no further interest guarantee (for members
of the Board of Management who were born before 1 January 1958, the
guaranteed minimum interest rate remains at 2.75% p.a.). For mem-
bers with pension rights in the frozen defined benefit plan, the above
contribution rates are reduced by 19% of the expected annual pension
from that frozen plan.
The Allianz Group paid € 4 MN (2014: € 4 MN) to increase reserves
for pensions and similar benefits for active members of the Board of
Management. As of 31 December 2015, reserves for pensions and
similar benefits for active members of the Board of Management
amounted to € 38 MN (2014: € 56 MN).
INDIVIDUAL PENSIONS: 2015 AND 2014
Total might not sum up due to rounding
€ THOU
Defined benefit pension plan
(frozen)
Current pension plan
AVK/APV1
Transition payment²
Total
Annual
(Chairman since 7/5/2015)
2014
2014
2,722
9,963
577
6,373
10
253
105
1,278
306
998
Sergio Balbinot
2015
219
243
2
2
222
17,867
337
2014
(Chairman until 6/5/2015)
3
26
$་བུ་
495
483
3,442
44
284
368
3,032
Michael Diekmann6
2015
337
230
3
3
235
322
214
78
722
In case of early termination as a result of a change of control, sever-
ance payments made to Board members generally amount to three
years' compensation (annual compensation as defined above) and
shall not exceed 150% of the severance payment cap (a Board mem-
ber with a base salary of € 750 THOU would receive a maximum of
€ 5,625 THOU).
Annual Report 2015 Allianz Group
47
48
44
MISCELLANEOUS
Internal and external Board appointments
Change of control
When a member of the Board of Management holds an appointment
in another company within the Allianz Group, the full remuneration
amount is transferred to Allianz SE. In recognition of the benefits to
the organization, Board of Management members are allowed to
accept a limited number of non-executive supervisory roles in appro-
priate external organizations. In these cases, 50% of the remunera-
tion received is paid to Allianz SE. A Board member retains the full
remuneration only when the Supervisory Board qualifies the appoint-
ment as a personal one. Remuneration paid by external organiza-
tions is shown in the annual reports of the companies concerned. The
remuneration relating to the external appointment is set by the gov-
erning body of the relevant organization.
The Supervisory Board approved the following changes to the remu-
neration of the Board of Management on 10 December 2015, and the
Board of Management for all executives of Allianz Group from 2016
and 2017 in a phased approach:
The Performance Management system has been adjusted to support
Allianz's strategic Renewal Agenda. Under the new Inclusive Meritoc-
racy approach, Group or company related financial KPIS make up half
the performance equation. The other half is linked to individual per-
formance, which consists of quantitative and predominantly qualita-
tive criteria. The new approach places greater emphasis on behav-
ioral aspects of performance through a common standard designed
to drive cultural change across the Group. These are:
-
-
-
Customer and Market Excellence,
Collaborative Leadership,
OUTLOOK FOR 2016
If the remaining term of contract is less than two years, the payment
is pro-rated according to the remaining term of the contract.
2. shall not exceed the latest year's actual total compensation.
1. is calculated on the basis of the previous year's annual base sal-
ary plus 50% of the target variable remuneration (annual bonus,
accrued MTB and equity-related remuneration: For a Board
member with a fixed base salary of € 750 THOU, the annual com-
pensation would amount to € 1,875 THOU. Hence, he/she would
receive a maximum severance payment of € 3,750 THOU) and
LOANS TO MEMBERS OF THE BOARD OF MANAGEMENT
As of 31 December 2015, there were no outstanding loans granted by
Allianz Group companies to members of the Board of Management.
TERMINATION OF SERVICE
Board of Management contracts are limited to a period of five years.
For new appointments, in compliance with the German Corporate
Governance Code, a shorter period is typical.
Arrangements for termination of service including retirement are as
follows:
1. Board members who were appointed before 1 January 2010 - and
who have served a term of at least five years - are eligible for a six-
month transition payment after leaving the Board of Management.
2. Severance payments made to Board members in case of an early
termination comply with the German Corporate Governance Code.
3. Special terms, also compliant with the German Corporate Gover-
nance Code, apply if service is ended as a result of a "change of
control”. This requires that a shareholder of Allianz SE, acting alone
or together with other shareholders, holds more than 50% of voting
rights in Allianz SE.
Contracts do not contain provisions for any other cases of early ter-
mination from the Board of Management.
Board members who were appointed before 1 January 2011 are
eligible to use a company car for a period of one year after their
retirement.
Termination of service -
details of the payment arrangements
Transition payment (appointment before 1 January 2010)
Board members receiving a transition payment are subject to a six-
months non-compete clause.
The payment is calculated based on the last base salary (paid for
a period of six months) and 25% of the target variable remuneration
at the date when notice is given. A Board member with a base salary
of € 750 THOU would receive a maximum of € 937.5 THOU.
Where an Allianz pension is immediately payable, transition
payment amounts are set off accordingly.
Severance payment cap
Payments to Board members for early termination with a remaining
term of contract of more than two years are capped at two years' com-
pensation.
Whereby the annual compensation:
Entrepreneurship,
In 2015, remuneration and other benefits totaling € 7 MN (2014: € 6 MN)
were paid to former members of the Board of Management and
dependents, while reserves for current pension obligations and
accrued pension rights totaled € 122 MN (2014: € 102 MN).
Trust.
Performance indicators:
The remuneration structure, which comprises fixed and committee-
related remuneration only, was approved by the Annual General
Meeting 2011 and is laid down in the Statutes of Allianz SE.
Fixed annual remuneration
The remuneration of a Supervisory Board member consists of a fixed
cash amount paid after the end of each business year for services
rendered over that period. As in 2014, a regular Supervisory Board
member receives a fixed remuneration of € 100 THOU per year. Each
deputy Chairperson receives € 150 THOU and the Chairperson
€ 200 THOU.
Committee-related remuneration
The Chairperson and members of the Supervisory Board committees
receive additional committee-related remuneration. The committee-
related remuneration is as follows:
COMMITTEE-RELATED REMUNERATION
REMUNERATION STRUCTURE AND COMPONENTS
€ THOU
Committee
Member
Personnel Committee, Standing
Committee, Risk Committee
Audit Committee
40
20
80
40
Annual Report 2015 Allianz Group
Chair
Set a remuneration structure to allow for proper oversight of
business as well as for adequate decisions on executive personnel
and remuneration.
Set a remuneration structure that takes into account the indi-
vidual functions and responsibilities of Supervisory Board mem-
bers, such as chair, vice-chair or committee mandates.
Set total remuneration at a level aligned with the scale and scope
of the Supervisory Board's duties, and appropriate to the com-
pany's activities and business and financial situation.
Sustainable improvement/stabilization of Return on Equity
(excluding unrealized gains/losses on bonds),
Compliance with economic capitalization guidance (capital-
ization level and volatility limit);
Health indicators (aligned with the Renewal Agenda):
True Customer Centricity,
-
Digital by Default,
-
-
Technical Excellence,
Growth Engines,
Inclusive Meritocracy (including gender diversity -
women in leadership).
The pension contributions as a percentage of base salary paid by the
company to the contribution-based pension plan will have a unified
level of 50% of base salary in 2016.
Remuneration of the Supervisory Board
The remuneration of the Supervisory Board is governed by the Statutes
of Allianz SE and the German Stock Corporation Act. The structure of
the Supervisory Board's remuneration is regularly reviewed with
respect to German, European and international corporate gover-
nance recommendations and regulations.
REMUNERATION PRINCIPLES
-
The new MTB 2016-2018 comprises sustainability (performance and
health) indicators, which are aligned with the Group's external targets:
37 Remuneration Report
34 Takeover-related Statements
and Explanations
32 Statement on Corporate Management
pursuant to § 289a of the HGB
2015
225
213
5,751
398
4,151
9
Dr. Werner Zedelius
203
641
646
10,746
2014
225
170
5,700
26
915
249
1
397
6,471
2014
Dr. Dieter Wemmer
2015
278
1,181
4
8
1
282
1,190
2014
247
905
2
9
350
3,823
10
268
232
2,524
9
264
49
627
409
7,285
1-Plan participants contribute 3% of their relevant salary to the AVK. For the AVK the minimum guaranteed
interest rate is 2.75%-3.50% depending on the date of joining Allianz. In general, the company funds
the balance required via the APV. Before Allianz's founding of the APV in 1998, both Allianz and the plan
participants were contributing to the AVK.
2- For details on the transition payment, see section Termination of service. In any event a death benefit is
included.
3- Expected annual pension payment at assumed retirement age (age 60), excluding current pension plan.
4-SC=service cost. Service costs are calculatory costs for the DBO related to the reported business year.
5-DBO = defined benefit obligation, end of year. The figures show the obligation for Allianz resulting from
defined benefit plans taking into account realistic assumptions with regard to interest rate, dynamics and
biometric probabilities.
6-As Michael Diekmann retired on 7 May 2015, his employer-financed DBO of € 17,277 THOU (thereof
€ 9,256 THOU for the frozen DB-Pension-Plan, € 6,416 THOU for the Current Pension Plan, € 303 THOU AVK/
APV and € 1,301 THOU for the transition payment) is covered with former Board members.
7- As Manuel Bauer left Allianz on 30 September 2015, his employer-financed DBO of € 3,924 THOU (thereof
€ 1,699 THOU for the frozen DB-Pension-Plan, €2,030 THOU for the Current Pension Plan and € 195 THOU
AVK/APV) is covered with former Board members.
Annual Report 2015 Allianz Group
B- Corporate Governance
27 Corporate Governance Report
3,869
21,653
118
2014
47
618
576
10,409
Dr. Maximilian Zimmerer
2015
161
150
3,897
191
2,672
9
196
36
656
386
7,422
161
11,059
370,407
84,088
959
Deferred Compensation
MTB (2013-2015)²
750
750
1,125
959
1,032
750
959
750
3,066
AEI 2016/RSU³
AEI 2015/RSU³
AEI 2011/RSU³
GEI 2010/RSU³
1,125
959
1,125
750
Perquisites
17
19
19
19
17
19
Total fixed compensation
767
769
769
769
769
767
769
Annual Variable Compensation - Annual Bonus
750
GEI 2009/RSU³
750
1,505
1,048
Total
3,593
3,665
1,415
4,790
4,292
3,610
646
9,089
Dr. Maximilian Zimmerer (Appointed: 06/2012)
Actual
Grant
Grant
Payout¹
2014
2015
€ THOU
576
646
646
GEI 2010/SAR4
187
591
GEI 2008/SAR4
328
Total
3,017
3,019
769
4,144
3,646
3,034
8,443
Pensions Service Cost5
576
646
646
1,225
750
750
750
750
3,027
397
777
397
4,152
3,644
397
961
397
1,174
4,549
4,041
2,689
397
3,017
249
3,016
282
3,424
1,125
750
956
956
750
750
1,125
961
996
961
750
1,125
956
956
750
750
1,125
961
750
1,125
3,086
3,266
3,298
5-Pension Service Cost in accordance with IAS 19: represents the company cost, not the actual entitlement
nor a payment; however, according to the German Corporate Governance Code, the Pension Service Cost
is to be included in all columns.
Actual
Grant
Grant
Payout¹
2014
2015
2015
2014
2015
Target
Target
Min
Max
Base Salary
750
750
750
Dr. Werner Zedelius (Appointed: 01/2002)
2015
€ THOU
33
6-According to his cancellation agreement and in addition to the amounts disclosed in the table, Manuel Bauer
receives a payment of € 281.3 THOU in spring 2016 and according to his severance agreement, a payment
of € 187.5 THOU in 2015. The different pro-rated amounts for base salary and target amounts result from
different pro-rating methodologies, which are generally applied.
7- Manuel Bauer received a payment of € 156 THOU in 2015 for 25 years of service to Allianz.
8-Dr. Christof Mascher received a payment of € 156 THOU in 2014 for 25 years of service for Allianz.
9-Since Dr. Christof Mascher joined the Board of Management in September 2009, his pay-out from the
GEI 2009 plans are shown pro rata temporis.
Annual Report 2015 - Allianz Group
3,156
།།།།
4,141
282
3,649
282
1,763
4,883
249
282
1,048
4,423
3,931
2,012
5,165
43
INDIVIDUAL REMUNERATION: 2015 AND 2014
27 Corporate Governance Report
2014
Target
Number of SAR
Board members
Oliver Bäte (Chairman since 7/5/2015)
granted on
4/3/20161
held at
31/12/20151
held at
31/12/2015
Strike Price
Number of RSU
Equity Compensation
Expense 20152
€ THOU
10,898
38,613
2,363
Michael Diekmann (Chairman until 6/5/2015)
4,618
60,292
€
Number of RSU
SAR
RSU
37 Remuneration Report
GERMAN ACCOUNTING STANDARD 17 DISCLOSURE
The total remuneration to be disclosed in accordance with German
Accounting Standard 17 for 2015 is defined differently than in the Ger-
man Corporate Governance Code and is composed of the base salary,
perquisites, annual bonus, the fair value of the RSU grant and the pay-
out of the MTB 2013-2015. However, it excludes the pension service
cost. The information on remuneration for 2014 (in parentheses)
does not disclose the notional accruals for the MTB 2013-2015:
Oliver Bäte € 7,046 (2,774) THOU,
Michael Diekmann € 5,479 (4,397) THOU,
Sergio Balbinot € 3,780 (-) THOU,
Manuel Bauer € 4,325 (2,322) THOU,
Dr. Helga Jung € 4,813 (2,290) THOU,
Dr. Christof Mascher € 5,356 (2,726) THOU,
Jay Ralph €5,293 (2,603) THOU,
Dr. Axel Theis € 3,644 (-) THOU,
Dr. Dieter Wemmer €5,844 (2,760) THOU,
Dr. Werner Zedelius €5,753 (2,831) THOU,
Dr. Maximilian Zimmerer € 5,638 (2,578) THOU.
The sum of the total remuneration of the Board of Management for
2015, including the payments of the MTB 2013-2015 and excluding the
pension service cost, amounts to € 57 MN (2014 excluding the notional
accruals for the MTB 2013-2015: € 30 MN). The corresponding amount,
including pension service cost, equals € 61 MN (2014 excluding the
notional accruals for the MTB 2013-2015: € 35 MN).
EQUITY-RELATED REMUNERATION
In accordance with the approach described earlier, a number of RSUS
were granted to each member of the Board of Management in March
2016, which will vest and be settled in 2020.
GRANTS, OUTSTANDING HOLDINGS, AND EQUITY COMPENSATION EXPENSE UNDER THE ALLIANZ EQUITY PROGRAM
3,493
34 Takeover-related Statements
and Explanations
Sergio Balbinot³
24,820
Dr. Alex Theis
8,263
23,005
1,442
Dr. Dieter Wemmer
8,311
28,740
2,195
1,370
Dr. Maximilian Zimmerer
Total
8,291
35,513
2,176
8,124
29,892
1,718
Dr. Werner Zedelius
34,968
7,521
2,223
1,345
Manuel Bauer
5,443
32,973
1,821
Dr. Helga Jung
6,551
27,331
3,167
87.36
1,508
Dr. Christof Mascher
Jay Ralph
7,430
34,260
7,892
87.36
8,638
32 Statement on Corporate Management
pursuant to § 289a of the HGB
27 Corporate Governance Report
B- Corporate Governance
766
766
766
766
760
766
Annual Variable Compensation - Annual Bonus
760
750
1,125
940
909
940
Deferred Compensation
MTB (2013-2015)²
AEI 2016/RSU³
750
Total fixed compensation
16
10
Target
Min
Max
Base Salary
750
750
750
750
750
750
750
Perquisites
10
16
16
16
16
AEI 2015/RSU³
AEI 2011/RSU³
750
1,125
3,402
1,152
386
4,527
386
409
386
3,971
2,078
5,085
1- In accordance with the German Corporate Governance Code, the annual bonus disclosed for performance
year 2015 is paid in 2016 and for performance year 2014 in 2015. The payments for equity related deferred
compensation (GEI and AEI), however, are disclosed for the year in which the actual payment was made.
2- The MTB figure included in the Actual Grant column shows the annual accrual. The payout 2015 figure
includes the 2015 accrual and the accruals from the performance years 2013 and 2014, as adjusted by the
sustainability assessment. The MTB 2013-2015 is paid out in spring 2016.
3- Payout is capped at 200% above grant price. The relevant share price used to determine the fair market
value, and hence the final number of RSUS granted, and the 200% cap are only available after sign-off by
the external auditors.
4-The equity-related remuneration that applied before 2010 consisted of two vehicles, virtual stock awards
known as RSUs and virtual stock options known as "Stock Appreciation Rights" (SAR). Only RSUS have been
awarded as of 1 January 2010. The remuneration system valid until December 2009 is disclosed in the
Annual Report 2009 (starting on page 17). Whereas the GEI/RSU grants are automatically exercised at the
3,419
vesting date, the GEI/SAR grants are exercised by the Board member within the exercise period following
the vesting date. Hence the total payout from SARS depends on the individual decision by the Board
member. SARS are released to plan participants upon expiry of the vesting period, assuming all other
exercise hurdles are met. For SARS granted until and including 2008, the vesting period was two years and
the exercise period five years. For SARS granted 2009, the vesting period is four years and the exercise
period three years. SARS can be exercised on the condition that the price of the Allianz SE stock is at least
20% above the strike price at the time of grant. During the term of the plan, at least once on five consecu-
tive trading days the Allianz SE stock must relatively appreciate at least 0.01 percentage points ahead of
the appreciation of the Dow Jones EURO STOXX Price Index (600).
5- Pension Service Cost in accordance with IAS 19: represents the company cost not the actual entitlement
nor a payment, however, according to the German Corporate Governance Code the Pension Service Cost
is to be included in all columns.
44
Annual Report 2015 - Allianz Group
386
2015
4,699
3,585
940
'
750
1,125
940
750
2,993
GEI 2010/RSU³
GEI 2009/RSU³
GEI 2010/SAR4
GEI 2008/SAR4
Total
Pensions Service Cost5
Total
3,010
409
3,016
386
766
4,141
1,669
B- Corporate Governance
6- Oliver Bäte's base salary and his target for the annual bonus, the MTB tranche, and equity-related com-
pensation are disclosed based on his pro-rated base salary of € 750 THOU until 6 May 2015 and his pro-rated
base salary of € 1,125 THOU from 7 May 2015. The different pro-rated amounts for base salary and target
amounts result from different pro-rating methodologies, which are generally applied.
Life/Health Insurance Operations
Annual Report 2015 Allianz Group
56
1- The following sections do not cover our global insurance lines, e.g. Allianz Global Corporate & Specialty,
our credit insurer Euler Hermes, or Allianz Worldwide Partners, even if those entities also operate in the
respective market.
Allianz Italy has also received strong market recognition with
awards from primary institutions such as “MilanoFinanza" (Allianz1
Business, Digital Agency, and Genialloyd) and “Istituto Tedesco di
Qualità e Finanza" (Best Motor insurer in terms of quality for Agents
and the Direct channel).
In direct, Genialloyd premiums were up by 9.0%, outperforming
a contracting market. Property-casualty bancassurance premiums
also grew strongly, especially thanks to retail motor products distrib-
uted through the Italian branches of UniCredit.
Our agent network was key to this performance. In 2015, we com-
pleted the integration of the insurance business of UnipolSai Assi-
curazioni S.p.A., which we acquired in 2014, including its 725 agencies.
We also completed the introduction in the network of the common
Digital Agency platform, which benefits from simple, mobile and
paperless processes that drastically reduce administrative tasks for
both the agents and our back offices. Another innovation for our agent
network was the introduction of the Allianz1 Business modular offer
for small enterprises, complementing the Allianz1 retail offer that we
introduced in 2014 and which has since reached 240,000 contracts.
In our property-casualty business, Allianz Italy again significantly
outperformed the market in terms of premium growth and profit-
ability, increased our market share for the fourth consecutive year,
and maintained a superior profitability with a combined ratio about
10 percentage points better than the rest of the market.
Our Italian insurance entity Allianz Italy has a very strong multi-
channel footprint and is the digital leader in the Italian market. We
are strongly dedicated to the agent channel, and we also offer our
products through Genialloyd – the leading company in the Italian
direct business -, the broker channel, Allianz Bank Financial Advi-
sors S.p.A., and bancassurance, with UniCredit as our main distribu-
tion partner.
Italy
Through Allianz Private Kranken (APKV) we provide a wide range
of health insurance products, including full private health care cover-
age, supplementary health and long-term care insurance, as well as
foreign travel medical insurance. In 2015, we expanded our product
portfolio in comprehensive health insurance with the launch of a new
tariff (AktiMed90P) and an additional module for fitness-oriented
customers. Also, within the Allianz digitalization strategy, APKV
established a number of digital services and processes, such as the
photo app for claims, which enables customers to interact more
easily and efficiently in all matters of health insurance.
than 9,000 products have been sold by year-end 2015. Overall, less
than one third of total new business in life came from traditional
products.
Our life insurance business is active in retail and commercial
markets and provides a comprehensive range of products. The main
coverage offered includes annuity, endowment, term, disability, and
long-term care insurance. In 2015, Komfort Dynamik - a new product
that combines traditional guarantees with a stronger upside potential
through a higher share of equity investment - was launched. More
C Group Management Report
As the market leader in the German property-casualty market,
we provide our products and services to retail and commercial cus-
tomers. For retail customers the product world of Allianz became
more digital with the launch of an online configuration tool for the
modular product “Privatschutz” on Allianz.de. For purely direct cus-
tomers the product range of AllSecur was broadened to liability and
household. In July 2015, a new modular commercial product called
"Firmenkonzept" - which is sold via tied agents - was successfully
launched. The product combines property, liability and legal protec-
tion insurance and targets small and medium-sized companies.
1.2
Germany
I. Position 1 II. Position 2 to 5 III. Position 6 to 10 IV. Not among the top 10
Market position by gross premiums written:
Property-Casualty Life/Health
Market position
841
10,475
II.
United States
7.4
1,343
We offer our customers in Germany a full range of insurance and
financial services through Allianz Deutschland AG. Our products are
mainly provided by Allianz Versicherungs-AG (Allianz Sach), Allianz
Lebensversicherungs-AG (Allianz Leben) and Allianz Private Kranken-
versicherungs-AG (Allianz Private Kranken). They are distributed
through a broad network of distribution channels, such as agencies,
brokers and direct, with a strong focus on our tied-agents network.
Here, Allianz Beratungs- und Vertriebs-AG serves as our distribution
company.
16,691
Your Allianz
58 Strategy and Steering
Digital by Default: Building further on our existing leading digital
assets and common Group platforms, we strive to become Digital by
Default everywhere. Based on a deep understanding of customer
needs, we will roll out new digital products, processes and commu-
nication globally. This will help increase both the convenience we
offer our customers and our productivity.
True Customer Centricity: Achieving True Customer Centricity is at
the core of our agenda. Everything we do will only translate into suc-
cess if our clients trust us fully and experience superior value when-
ever dealing with us. By making superior customer experience the top
priority for all our actions, we strive to significantly increase custom-
er loyalty in all our entities. For instance, systematic customer experi-
ence management will help us identify and enhance drivers of satis-
faction along the customer journeys. “Fast” product and service
solutions – such as Fast Quote/Fast Offer - will provide an immediate
response experience to customers in all our local entities. We will
measure progress against clear targets on Net Promoter Score (NPS),
which are firmly embedded into our planning process and incentives.
Reinforcing our leadership position means building on our existing
strengths while acting decisively where the new environment
requires step change. Since spring 2015, we have been mobilizing
management and employees globally to jointly develop our program
for the years to come in a highly inclusive and agile process. We
intend to leverage the best of Allianz to produce true scale advan-
tages and apply our strongest skills and assets even more systemati-
cally, consistently, and ubiquitously. Five mutually reinforcing levers
will help us to further expand our competitive advantage:
The Renewal Agenda
Thriving in such an environment puts high demands on those
aspiring to be tomorrow's leading players, but it also holds huge
opportunities for those that manage to truly adapt to these new real-
ities. These leaders will adapt by: carefully balancing shock resilience
with capital efficiency, establishing commanding market positions
and realizing visible benefits from skills and scale, leveraging digital
to become customer-centric and agile, and relentlessly lifting pro-
ductivity reserves in the capital, cost, and revenue base.
Geopolitical instability, demographic and societal shifts, persistently
low interest rates – particularly in Europe - and uncertain economic
outlooks are putting severe strains on society and the global economy.
Meanwhile, digitalization is transforming economies and economics
at increasing speed, enabling new, easy-to-use, customized offerings
and fundamentally altering customer expectations.
Operating environment
Building on our strong foundations, we will reinforce our leading position by
focusing our efforts in five fields of action: putting our customers at the heart of
everything we do; becoming Digital by Default, everywhere; employing Technical
Excellence even more consistently; creating new Growth Engines; and fostering
a renewed corporate culture of Inclusive Meritocracy.
As we celebrate 125 years of Allianz, we act from a position of strength. We will
continue to protect the pillars of our success: our integrity, financial strength,
technical competence, operational excellence, and talent base. However, our
world and our industry are changing fast and fundamentally, spurring us to
renew our way of doing business.
Strategy and Steering
52
57
53 Business Operations and Markets
Annual Report 2015 Allianz Group
Our life and annuity business primarily underwrites fixed-index
and variable annuities and fixed-index universal life insurance prod-
ucts - all of which are sold through independent distribution channels,
as well as large financial institutions such as banks and wire houses.
Our property-casualty insurance business in the United States was
primarily conducted through Fireman's Fund Insurance Company
(FFIC) until April 2015. In January 2015, our property-casualty insur-
ance business in the United States was realigned. The reorganization
comprised the integration of Fireman's Fund Insurance Company's
commercial business into Allianz Global Corporate & Specialty North
America (AGCS NA), the sale of the personal insurance business to the
global insurance company ACE, as well as the internal transfer of the
discontinued run-off business through a reinsurance agreement
within the Allianz Group. The sale, which took place by means of a
renewal rights arrangement, received regulatory approval from the
California Department of Insurance in March 2015 and closed in April
2015. We therefore focus on the Life business within this section. Our
life and annuity business is managed through Allianz Life Insurance
Company of North America (Allianz Life).
United States
Our retail insurance activities are also complemented by Allianz
'Patrimoine', which allows us to offer one-stop solutions, in particular
for our high-net-worth individual life customers.
We also hold a strong position in the health market, often com-
bining elements of life, health and disability insurance as compre-
hensive solutions for individual and commercial customers.
With regards to the life market in France, we have responded to
the needs of our clients with a range of traditional and unit-linked
products in both group and individual business, combining financial
strength with the opportunity for more attractive yields. Evidence of
the success of this strategy is the increase in the unit-linked proportion
of our business mix from 39% in 2014 to 48 % in 2015.
Since local regulatory changes regarding cancellation rules were
introduced in 2014, the French retail property-casualty market has
seen higher customer churn. However, our constant focus on innova-
tive solutions, such as fast quotes, has allowed us to grow our cus-
tomer base, for example in motor insurance. Furthermore, we con-
tinue to be one of the leaders in the midcorp market (ranked as third
in midcorp and second in commercial property-casualty insurance).
Allianz France S.A. is a major provider of insurance and financial ser-
vices in the French retail and commercial markets, offering a broad
range of property-casualty and life/health products for individuals
and corporate customers. We distribute these offerings mostly via
agents, life and health consultants, brokers and independent finan-
cial advisors, as well as selected external partners. In addition, our
customers can research and buy products online - either through
'eAllianz' or via our direct sales channel 'AllSecur'. In 2015 a new stra-
tegic plan 'Innovation & Trust' was launched for 2020. Capitalizing on
past successes such as the partnership with Drivy (car sharing),
Allianz France has given priority to fostering innovation. Examples
include a crowdfunding equity fund in partnership with SmartAngels,
a Pay As You Drive offer with TomTom as the first insurer in the French
market, as well as hackathons and a start-up accelerator.
France
The corporate structure in Italy was also streamlined in 2015
through the following transactions: We acquired the outstanding 50%
stake of Antoniana Veneta Popolare Vita, the Life Bancassurance joint
venture with Banca Monte Paschi di Siena, which had been held by the
partner bank. We also merged ACIF S.p.A., the financial holding com-
pany, into Allianz S.p.A. to simplify corporate governance. At the same
time we acquired the minority shareholdings of Allianz S.p.A. held by
Allianz Subalpina Holding S.p.A. and Lloyd Adriatico Holding S.p.A.
Allianz S.p.A. is thus now fully owned by the Allianz Group.
In our life business, we had another year of strong premium vol-
umes, particularly supported by bancassurance and our personal
financial advisor network. Sales of low-capital-consuming unit-
linked products accounted for 81% of new business, compared to an
estimated market average of around 41 %.
61 Progress in Sustainable Development
Despite a competitive market environment in 2015, we main-
tained our position as the market leader in the fixed-index annuity
market as a result of an innovative index strategy introduced in 2014
and higher penetration into the Securities and Exchange Commission
(SEC) licensed broker-dealer channel. Despite the modest interest
rate increase in December 2015, we believe the Federal Reserve is
likely to continue to raise interest rates very cautiously - leading to
only modest increases in interest yields in 2016. Although this low
interest rate environment remains challenging, we actively manage
our product pricing strategy to maintain profitability.
II.
II.
Italy
Controls over Financial Reporting and Risk Capital
81
Operating profit
131
Internal controls over financial reporting
83
Net income
132
Risk capital controls
85
Life/Health insurance operations by reportable segments
52
131
52
C Group Management Report
Your Allianz
53 Business Operations and Markets
58 Strategy and Steering
61 Progress in Sustainable Development
Business Operations and Markets
Allianz offers a comprehensive range of insurance and asset management
products and services and has 85.4 million insured customers.
Allianz Group structure
Allianz SE and its subsidiaries (the Allianz Group) offer property-
casualty insurance, life/health insurance and asset management
products and services in over 70 countries, with the largest of its
operations in Europe. Allianz SE, the parent company of the Allianz
Group, has its headquarters in Munich, Germany.
The Allianz Group structure reflects both business segments
and geographical regions. The business activities are first organized
by product and type of service, based on how these are strategically
managed: insurance activities, asset management activities, and cor-
porate and other activities. Due to differences in the nature of prod-
ucts, risks, and capital allocation, insurance activities are further
divided into property-casualty and life/health categories. In accor-
dance with the responsibilities of the Board of Management, each of
the insurance categories is grouped into regional reportable seg-
ments. Corporate and other activities are divided into three different
reportable segments in order to differentiate between the respective
products, risks, and capital allocation. In 2015, the Allianz Group had
16 reportable segments.
ALLIANZ GROUP STRUCTURE - BUSINESS SEGMENTS AND REPORTABLE SEGMENTS
Annual Report 2015 - Allianz Group
Present value of new business premiums (PVNBP)
81
Further future challenges and opportunities
5.6
1,015
12,383
III.
II.
France
2,687
30,629
I.
I.
Germany
€ MN
€ MN
Operating
profit
20.6
MN
customers
Number of
Statutory/
gross premiums
written
Core markets
INSURANCE CORE MARKETS
INSURANCE CORE MARKETS¹
80
Statutory premiums
130
81
Premiums earned (net)
Technical Excellence: In Property-Casualty, we create superior mar-
gins, innovation, and growth by having the best technical talent and
consistently applying state-of-the-art skills. We will invest further in
advanced analytics, enabling superior risk selection, pricing, and
claims management practices. Within Life/Health, we will enhance
margins and reduce capital intensity through further shifting our
new business towards unit-linked and capital-efficient products,
increasing the share of protection & health business and actively
managing our in-force business. Our investment management will
58
Annual Report 2015 Allianz Group
Risk management priorities for 2016
20.0
100.0
2015
M
196.0
6.0
40.0
150.0
2014
M
M
195.2
4.5
5.2
150.0
2015
M
M
256.0
6.0
100.0
150.0
2014
M
с
254.5
40.0
124.5
M
2014
100.0
2014
M
124.5
4.5
20.0
100.0
2015
M
146.0
6.0
40.0
100.0
2014
M
M
145.2
5.2
40.0
100.0
2015
M
M
123.7
3.7
20.0
100.0
4.5
PROPERTY-CASUALTY
100.0
2015
Jean-Jacques Cette
Gabriele Burkhardt-Berg
Christine Bosse
Rolf Zimmermann
(Deputy Chairman)
Dante Barban
(Deputy Chairman)
Dr. Wulf H. Bernotat
(Chairman)
Dr. Helmut Perlet
Members of the Supervisory Board
Fixed
Committees¹
€ THOU
A
Total might not sum up due to rounding
The total remuneration for all Supervisory Board members, including
attendance fees, amounted to € 2,021 THOU in 2015 (€ 2,035 THOU in
2014). The following table shows the individual remuneration for 2015
and 2014:
REMUNERATION FOR 2015
entitled to an office with secretarial support and use of the Allianz
carpool service. In the financial year 2015, Allianz SE reimbursed
expenses totaling € 54,424.
In addition to the fixed and committee-related remuneration, mem-
bers of the Supervisory Board receive an attendance fee of € 750 for
each Supervisory Board or committee meeting they attend. Should
several meetings be held on the same or consecutive days, the atten-
dance fee will be paid only once. Allianz SE reimburses the members
of the Supervisory Board for their out-of-pocket expenses and the VAT
payable on their Supervisory Board activity. For the performance of
his duties, the Chairman of the Supervisory Board is furthermore
Attendance fees and expenses
37 Remuneration Report
and Explanations
34 Takeover-related Statements
32 Statement on Corporate Management
pursuant to § 289a of the HGB
27 Corporate Governance Report
B- Corporate Governance
111
INDIVIDUAL REMUNERATION: 2015 AND 2014
N
R
S
M
с
368.2
8.2
160.0
200.0
2014
C
C
366.7
6.7
160.0
200.0
2015
C
C
༠།༠།
C
M
C
M
remuneration
fees
Total
Attendance
Committee
remuneration
remuneration
150.0
20.0
- German Speaking Countries
and Central & Eastern Europe
-Western & Southern Europe,
Middle East, Africa, India
- Global Insurance Lines & Anglo Markets
Mali
II.
Allianz Global Corporate & Specialty
Madagascar
Ireland
Kenya
Australia
-
United Kingdom
III.
GLOBAL INSURANCE LINES & ANGLO MARKETS
United States
I.
US LIFE INSURANCE
Ghana
Congo Brazzaville
Central Africa
Cameroon
Burkina Faso
■II.
--
--
■ II.
IV.
■II.
I.
II.
Ivory Coast
II.
Credit Insurance
Senegal
Colombia
■IV.
II.
Brazil
Brunei²
Argentina
III.
II.
INSURANCE ASIA PACIFIC
Allianz Worldwide Partners
ALLIANZ WORLDWIDE PARTNERS
Latin America
II.
Spain
Portugal
II.
II.
INSURANCE IBERIA & LATIN AMERICA
Ukraine
■ IV.
India³
III.
Russia
■III.
Togo
Reinsurance
IV. --
■■III.
II.
Benin
II.
Egypt
Africa
III.
III. ■II.
Luxembourg
Middle East and North Africa
III. ■III.
II.
The Netherlands
III.
II.
Belgium
Lebanon
III.
France
III.
II.
Turkey
Greece
III.
Italy
■II.
II.
Europe
II.
L
III.
Saudi Arabia
Germany
Austria
Switzerland
Slovakia
Romania
North and Latin America
ASSET MANAGEMENT
Poland
Hungary
Czech Republic
Taiwan
Thailand
IV.
Sri Lanka
III.
South Korea
■IV.
Singapore²
Philippines
Malaysia
Pakistan
--
I.
Laos
Japan²
Croatia
Bulgaria
■II.
IV.
■ II.
I.
Central & Eastern Europe
IV.
■III.
Mexico
IV.
- Property
-Liability
- Motor fleets
- Directors' and Officers' liability
- Credit
- Marine, aviation and transport
LIFE/HEALTH
Corporate Clients
-Group life products
- Group health and disability products
- Pension products for employees
Annual Report 2015 Allianz Group
53
Corporate Clients
53
Our two major investment management businesses, PIMCO and
AllianzGI, operate under Allianz Asset Management (AAM). With
€ 1,763 BN total assets under management (AuM) (including those of
the Allianz Group), we are one of the largest asset managers in the
world actively managing assets. Our core markets are the United
States, Germany, France, Italy, the United Kingdom and the Asia-
Pacific region.
SELECTED PRODUCT RANGE ASSET MANAGEMENT
Equity
Fixed Income
Alternatives
Solutions
RETAIL AND INSTITUTIONAL CLIENTS
- Systematic
-Sector/theme funds
-Region/country funds
- Money market
-Low duration
- Real return
- Global
Asset Management
PROPERTY-CASUALTY
- Private health insurance
-Investment-oriented products
- Asia Pacific
- Allianz Worldwide Partners
LIFE/HEALTH
- German Speaking Countries
and Central & Eastern Europe
-Western & Southern Europe,
Middle East, Africa, India
- Iberia & Latin America
- Global Insurance Lines & Anglo Markets
- Asia Pacific
- USA
ASSET MANAGEMENT
- Asset Management
CORPORATE AND OTHER
- Holding & Treasury
-Banking
- Alternative Investments
Insurance operations
We offer a wide range of property-casualty and life/health insurance
products to both retail and corporate customers. We are the leading
property-casualty insurer globally and rank among the top five in the
life/health insurance business. Our key markets, based on premiums,
are Germany, France, Italy, and the United States.
Most of our insurance markets are served by local Allianz com-
panies. However, some business lines – such as Allianz Global Corpo-
rate & Specialty (AGCS), Allianz Worldwide Partners (AWP) and Credit
Insurance are run globally.
SELECTED PRODUCT RANGE INSURANCE
Retail Clients
-Motor (liability/own damage)
-Liability
- Property
- Accident
- Travel and assistance
Retail Clients
- Endowment
-Annuity
-Term
- Disability
- Investment grade
-Structured products
-Commodity funds
- Certificate funds
-Currency funds
- Iberia & Latin America
-Life-cycle concepts
- Multi-asset solution
-Variable annuity
solutions
- Small cap funds
-Stocks plus
South Korea
China
Australia
Singapore
Taiwan
Hong Kong
Japan
Asia Pacific
Nordics
United Kingdom
The Netherlands
Belgium
Switzerland
Spain
1- This overview is based on our organizational structure in place as of 31 December 2015. For further informa-
tion, please refer to the Executive Summary of 2015 Results starting on page 69.
2-Property-Casualty business belongs to Allianz Global Corporate & Specialty.
France
Italy
Brazil
Canada
United States
Europe
-
IV. Not among the top 10
III. Position 6 to 10
Insurance market position by gross premiums written:4 I. Position 1 II. Position 2 to 5
Institutional Asset Management
Life/Health Banking Retail Asset Management
■Property-Casualty
China³
Hong Kong2
Indonesia
Germany
3- Based on foreign competitor market ranking (excluding domestic competitors).
4- Source: Own local estimations as of 2014.
Annual Report 2015 - Allianz Group
- Diversified income
- High yield
-Emerging markets
- Convertible bonds
- Equity long/short
- Relative value
-Infrastructure debt/
equity
- Asset/liability
management
- Risk management
concepts
Corporate and Other
The Corporate and Other business segment's activities include the
management and support of the Allianz Group's businesses through
its central holding functions, as well as Banking and Alternative
Investments.
HOLDING & TREASURY
Holding & Treasury includes the management and support of the
Group's businesses through its strategy, risk, corporate finance, trea-
sury, financial reporting, controlling, communication, legal, human
resources, technology, and other functions.
BANKING
Our banking operations - with a primary focus on retail clients-sup-
port our insurance business and complement the products we offer
in Germany, Italy, France, the Netherlands, and Bulgaria. As a division
of Allianz Deutschland AG, Oldenburgische Landesbank AG (OLB) is
Allianz's main own banking product and service provider in Germany.
OLB, Germany's largest private regional bank, covers the northwest of
Germany.
ALTERNATIVE INVESTMENTS
Alternative Investments provides global alternative investment man-
agement services in the private equity, real estate, renewable energy,
and infrastructure sectors, mainly on behalf of our insurance opera-
tions. The Alternative Investments reportable segment also included
a fully consolidated private equity investment, which was sold in
December 2015.
54
Annual Report 2015 Allianz Group
C Group Management Report
Your Allianz
53 Business Operations and Markets
58 Strategy and Steering
61 Progress in Sustainable Development
Worldwide presence and business segments
MARKET POSITIONS OF OUR BUSINESS OPERATIONS¹
INSURANCE WESTERN & SOUTHERN EUROPE,
INSURANCE MIDDLE EAST, AFRICA, INDIA
INSURANCE GERMAN SPEAKING COUNTRIES,
INSURANCE CENTRAL & EASTERN EUROPE
The following sections provide an overview of our business operations
in our insurance core markets by business division.
Our markets
55
-Style funds
4.5
German Speaking Countries
Ira Gloe-Semler
105
69 Executive Summary of 2015 Results
105
105
Business environment 2015 for the insurance industry
Business environment 2015 for the asset management industry
68
67
Off-balance sheet arrangements
104
Total assets and total liabilities
99
Regulatory capital adequacy
98
98
98
Shareholders' equity
Balance Sheet Review
Financing and liquidity development and capitalization
96
Expected dividend development
97
Management's assessment of expected revenues and earnings for 2016
65
Liquidity and Funding Resources
Organization
Committed corporate citizen
Attractive employer
MANAGEMENT DISCUSSION AND ANALYSIS
67 Business Environment
67 Economic environment 2015
Management's overall assessment of the current economic situation
of the Allianz Group
65
96
Liquidity management of our operating entities
Earnings summary
78
Property-Casualty insurance operations by reportable segments
119
Internal risk assessment
127
80
Life/Health Insurance Operations
Risk governance
129
Composition of total revenue growth
110
Composition of total revenues
110
Reconciliations
110
Proposal for appropriation of net earnings
71
105
Liquidity management and funding of Allianz SE
70
Total revenues
109
Allianz Group consolidated cash flows
69
70
71
Non-operating result
71
Income taxes
71
Net income
Operating profit
Internal risk capital framework
95
Outlook for the Allianz Group
Earnings summary
91
Worldwide presence and business segments
55
Corporate and Other
90
Corporate and Other
54
Asset Management
54
Net income
89
Operating profit
Insurance operations
53
89
Allianz Group structure
124.5
Pages 52-132
C-GROUP MANAGEMENT REPORT
YOUR ALLIANZ
86
Asset Management
56
86
I.
53
Business Operations and Markets
88
Operating revenues
53
Assets under management
94
Our markets
Operating earnings summaries by reportable segment
94
Asset management industry outlook
94
Insurance industry outlook
93
Economic outlook
93
Overview: 2015 results versus previous year outlook
92
92
Trusted company
63
Responsible investor
62
Sustainable insurer
61
Sustainability management and governance
58
Strategy and Steering
Outlook 2016
58
Operating environment
58
91
The Renewal Agenda
Ensuring successful execution
60
Our steering
61
Progress in Sustainable Development
61
59
116
Overview: outlook and assumptions 2016
77
124.5
Prof. Dr. Renate Köcher
M
M
2015
100.0
20.0
4.5
124.5
M
M
2014
100.0
20.0
4.5
124.5
Jürgen Lawrenz³
M
2015
41.7
8.3
2.2
52.2
2014
Jim Hagemann Snabe4
M
2015
4.5
100.0
20.0
2014
100.0
40.0
6.0
146.0
2014
100.0
40.0
5.2
145.2
2015
100.0
40.0
6.0
146.0
2014
100.0
40.0
5.2
145.2
Franz Heiẞ²
M
2015
58.3
11.7
2.2
72.2
M
100.0
40.0
5.2
145.2
73
Events after the balance sheet date
73
Allianz Group
51
Annual Report 2015
C
GROUP MANAGEMENT REPORT
On 31 December 2015 there was one outstanding loan granted by
Allianz Group companies to members of the Supervisory Board of
Allianz SE. One member received a mortgage loan of € 80 THOU from
Allianz Bank in 2010. The loan has a duration of ten years and was
granted at a normal market interest rate.
Loans to members of the Supervisory Board
All current employee representatives of the Supervisory Board except
for Mrs. Ira Gloe-Semler are employed by Allianz Group companies
and receive a market-aligned remuneration for their services.
Allianz companies and for other functions
Remuneration for mandates in other
Annual Report 2015 Allianz Group
50
50
49
49
5- The total remuneration reflects the remuneration of the full Supervisory Board in the respective year.
4-Since 7 May 2014.
Annual Report 2015 Allianz Group
3-Since 1 August 2015.
Legend: C = Chairperson of the respective committee, M = Member of the respective committee
1- Abbreviations: A-Audit, N-Nomination, P-Personnel, R-Risk, S-Standing.
2-Until 31 July 2015.
2,035.3
63.5
563.4
1,408.4
Other information
73
Other parts of the Group Management Report
RISK AND OPPORTUNITY REPORT
M
2014
66.7
26.7
3.8
97.2
Peter Denis Sutherland
M
M
2015
100.0
20.0
3.7
2015
123.7
M
2014
100.0
20.0
3.7
123.7
Total5
2015
1,400.0
560.0
60.7
74
AND FINANCIAL CONTROL
M
2014
2,020.7
Net income
M
M
Property-Casualty Insurance Operations
112
Risk and Opportunity Report
74
M
M
112
75
Operating profit
113
Allianz risk profile and management assessment
Capitalization
Gross premiums written
We are a signatory to the Principles for Sustainable Insurance
(PSI) of the United Nations Environment Programme Finance Initia-
tive. As a signatory to the PSI, Allianz is required to make an annual
disclosure on progress. In 2015, as part of a PSI project, our subsidiary
Our own revenues generated by products such as our mileage-
based tariffs, green life insurance, renewable energy, infrastructure,
and crop protection products amounted to more than € 1.1 BN in 2015.
The continued growth of the sustainable products market is
proof that sustainable innovation is becoming an increasingly
important business opportunity. Our offerings include insurance for
large-scale renewable-energy projects for business customers and
solutions promoting energy-efficiency at home and on the move for
retail customers.
Euler Hermes supported a project with other insurance industry
partners examining the need for ESG principles in surety bond under-
writing of infrastructure.
61
3- Increase due to greater awareness and integration of process from March 2015.
2-Agriculture, animal testing, animal welfare, betting and gambling, clinical trials, defense, human rights,
hydro-electric power, infrastructure, mining, nuclear energy, oil and gas, and the sex industry.
Annual Report 2015 Allianz Group
1-www.allianz.com/sustainability
Our guidelines on sensitive business apply to our entire insur-
ance business globally, whether we act as lead insurer or as part of a
panel. A dedicated center of competence within the underwriting
division of Allianz Global Corporate & Specialty offers ESG support to
property and casualty insurance transactions. During 2015, we deliv-
ered over 16 separate training sessions to different underwriters of
various specialties and geographic responsibilities. In 2016, we will
look to develop our training concept further and integrate it into our
underwriting training academies.
At the core, ESG integration into our insurance business and our
direct investments of proprietary assets is carried out by a global ESG
screening process. We have identified 13 sensitive business sectors²
where we see significant risks across regions and lines of business. We
identify these sectors through dialogue with non-governmental orga-
nizations (NGOS) and ongoing internal stakeholder engagement. For
each sector, guidelines highlight the key ESG issues to be considered.
ESG IN UNDERWRITING
Sustainable insurer
During 2015, 405 transactions (2014: 150 transactions)³ for our
insurance and investment business were assessed for ESG consider-
ations against our sensitive business guidelines. Of these, 47% were
approved, 50% were conditionally approved and 3% rejected.
In 2015, we reviewed our Weapons and Hydropower guidelines
according to new best-practice information including international
standards, frameworks and guidelines. Our intention is that no busi-
ness is excluded by default, with a few exceptions such as our coal
divestments of proprietary assets (for more information please refer
to the section Responsible Investor). Instead, each transaction is
assessed on a case-by-case basis. Through this process we aim to
better understand the risks associated with an insurance or invest-
ment transaction, and to take all necessary measures to address and
mitigate these risks.
MICROINSURANCE
The approach we take to ESG issues is not a sustainability "add-on";
it is part of everyday decision-making. As an insurer, we carefully
manage ESG risks in underwriting. As an investor of our proprietary
assets, we incorporate ESG factors into our investment process. And as
an asset manager of third-party assets, we systematically integrate the
evaluation of ESG risk and opportunities into our investment decisions.
ESG IN INSURANCE AND INVESTMENTS
During 2015, we focused on further embedding sustainability
into our core business. We did this through internal debate, stake-
holder engagement, and being an incubator for new business oppor-
tunities and pilot projects.
ment.
The highest governing body for sustainability-related issues is
the environmental, social and governance (ESG) Board, which was
established in 2012. It consists of three Allianz SE Board members who
meet quarterly. The ESG Board is responsible for integrating ESG into
all business lines and core processes that deal with insurance and
investment decisions. It also leads associated stakeholder engage-
As an insurer and risk consultant, we mostly face ESG risks indirectly
due to the risks we accept for our insurance clients. Prudent manage-
ment of ESG issues represents a major opportunity to reduce risks in
underwriting for ourselves and our customers.
Besides our green solutions, we also provide products that improve
people's lives. As a leader in the microinsurance sector, we already
provide 58.6 million low-income people in Asia, Africa and Latin
America with affordable insurance solutions.
ESG IN OUR OWN INVESTMENTS
The microinsurance market has a potential of 2.7 billion custom-
ers. We see this business expanding exponentially along with the
global middle class, which is estimated to grow to around 5 billion by
2030, with growth mostly in our primary microinsurance markets of
Asia, South America, and Africa.
C Group Management Report
Annual Report 2015 Allianz Group
62
-Chemical Weapons Convention (chemical weapons).
- Biological and Toxin Weapons Convention (biological weapons),
-Convention on Cluster Munitions (cluster ammunition/bomb; Oslo Process),
- Ottawa Convention (anti-personnel landmines),
1-Weapons in scope of the following international conventions:
As an institutional investor, we can play a key role in building a
low-carbon economy. By investing our proprietary assets in energy-
efficient real estate and renewable energy, we help reduce climate
emissions and create economic growth. Allianz Capital Partners
(ACP) is our in-house investment platform for alternative invest-
ments, with a growing portfolio of wind energy and solar power. Its
total investment in renewable energy by the end of 2015 was over
€ 2.5 BN (compared to € 2.0 BN in 2014), covering 60 wind farms and
7 solar parks in France, Germany, Italy, Sweden, and – new in 2015 –
Austria, Finland, and the United States. ACP's wind and solar portfolio
generates sufficient renewable energy to supply over 800,000 house-
holds.
As part of our ESG strategy, we also consider it our responsibility
to address systematic hurdles to ESG integration with peers, regula-
tors, and other market participants, as well as to promote sustainable
business practices within the companies we invest in.
In 2015, we broke through the 50-million mark for customers with
microinsurance policies, with 2015 revenues standing at € 135 MN.
That is around € 2.30 premium per person per year. Over 99% of these
customers still only hold one insurance policy, mostly life insurance.
We exclude certain sectors from our investments. We apply
exclusion criteria, restricting investments in companies producing
or associated with banned weapons¹ such as anti-personnel land-
mines, cluster munitions, and biological, chemical, and toxic weap-
ons. Furthermore, in November 2015, we decided to stop financing
coal-based business models. This means Allianz will no longer invest
proprietary assets in companies that derive more than 30% of revenue
from coal mining or generate over 30% of energy from burning coal.
Equities amounting to € 225 MN will be divested by March 2016, while
bonds amounting to € 3.9 BN will be maturing.
In 2015, we launched a project to strengthen and systemize the
integration of ESG into fixed-income securities and corporate equities,
which represent over 90% of our assets. We analyzed our portfolio
along 37 key ESG issues – such as greenhouse gas emissions and labor
management based on the information provided by the rating
agency MSCI ESG Research. This transparency on ESG across the entire
investment portfolio enabled a more targeted management of risks
and opportunities.
-
For our direct investments, such as real estate, infrastructure,
and private equity, ESG is integrated through our overarching ESG
screening process.
The ESG functional rule for investments is the foundation of our
ESG integration into investments. It binds all asset managers acting
on behalf of Allianz to integrate ESG into their investment process and
is closely monitored by Allianz Investment Management.
assets.
Allianz invests more than € 630 BN, mainly the premiums we collect
from the customers we insure, in a wide range of asset classes. We are
a signatory to the United Nations-supported PRI. Based on these prin-
ciples we have implemented and are further developing a number of
processes to systematically integrate ESG issues across different
The responsibilities of our Group-level sustainability management
include managing the strategic framework for Group-wide sustain-
ability activities, developing and introducing relevant policies, and
supporting operating entities in integrating the Group's strategic
approach and policies.
As one of the world's largest asset managers and as an institu-
tional investor, we take environmental and social risks seriously and
also seize investment opportunities arising in this area. Allianz SE, as
an asset owner, and our third-party asset managers Allianz Global
Investors (AllianzGI) and PIMCO are all individual signatories to the
United Nations-supported Principles for Responsible Investment
(PRI).
For Allianz, responsible investment means systematically integrating
ESG factors into our investment decisions. Our role as an investor is
two-fold: Firstly, we invest our proprietary assets, which include pre-
miums collected from our insurance customers. Secondly, in our
third-party asset management business, we invest on behalf of cus-
tomers by tailoring products and solutions to best meet their needs.
Responsible investor
-
Sustainability management
and governance
The following pages highlight some of our key sustainability
approaches and major developments in 2015. The Allianz Group Sus-
tainability Report, with the full details of our sustainability strategy,
approach and progress, is available on our sustainability website.¹
We work with different stakeholder groups to identify what is
materially important for sustainable development. Our material
issues are those deemed to be crucial for business success while also
important to our stakeholders.
Michael Diekmann (until 6 May 2015)
Sergio Balbinot
Oliver Bäte
BOARD MEMBERS
MEMBERS OF THE BOARD OF MANAGEMENT AND THEIR RESPONSIBILITIES IN 2015
our business segments Property-Casualty, Life/Health, Asset Manage-
ment, and Corporate and Other and were overseen by six Board
members (five since 1 September 2015). The remaining four divisions
(i.e. Chairman of the Board of Management, Finance, Investments and
Operations) focus on Group functions, along with business-related
responsibilities.
Allianz SE has a divisional Board structure that is split into functional
and business responsibilities. The business-related divisions reflect
AND ORGANIZATIONAL STRUCTURE
BOARD OF MANAGEMENT
Our steering
59
59
Annual Report 2015 Allianz Group
Building on our strong heritage, we will move forward with this
ambitious program to reinforce Allianz's leadership position for the
years to come.
Manuel Bauer (until 31 August 2015)
We have defined clear ambitions for 2018. With regard to financial
performance, we strive for a return on equity (excluding unrealized
gains/losses on bonds net of shadow DAC) of 13%, while growing our
earnings per share at a compound annual growth rate of 5%. To
ensure sustainability of performance, we have set ourselves health
targets for customer loyalty and employee engagement. We expect at
least 75% of our businesses to be or become rated by their customers
as Loyalty Leader or above market in terms of NPS. At the same time,
we aim to increase our IMIX from 68% to 72%.
We will enhance governance to even better facilitate capturing
skill and scale benefits. We will also promote convergence of
business models and their execution globally. Aligned incentives
will now give more weight to local management's contribution
to Group value, beyond local business requirements.
We will ensure mobilization of the entire global senior leader-
ship team across local entities, functions, and lines of business
in a new, horizontal change process. While the Board members
of Allianz SE commit as sponsors of the Renewal Agenda topics,
market experts and practitioners from our businesses will be
driving solutions development and implementation in agile
teams throughout the Group.
-
-
To enable successful execution of these policies throughout the
Allianz Group, we will systematically address the change process,
governance, and role of the corporate center:
Ensuring successful execution
In addition, we will move further towards greater capital alloca-
tion discipline to free up significant resources for stronger value
creation. This means we will optimize our businesses for capital pro-
ductivity (return on equity) and reduced capital intensity (Solvency II
sensitivity) and capitalize our local entities towards a more efficient
capital base. On this base, we will ensure that capital is available and
fungible within the Group and allocated appropriately to finance
growth initiatives.
We will continuously advance our business model and set-up to sus-
tainably ensure these five levers have the greatest impact. For example,
we will further strengthen our regional platforms to capture true
scale benefits, not only in terms of mere efficiency gains but also cus-
tomer service, best practice capabilities, and digital transformation.
Inclusive Meritocracy: We reinforce a corporate culture where both
people and performance matter. The Renewal Agenda implies sig-
nificant change for all our employees, including an increased degree
of agility and flexibility. Consequently, collaborative leadership,
excellence with customers and markets, entrepreneurship, and trust
are the four cornerstones of our adjusted global management incen-
tive model. We remain committed to further strengthen diversity at
Allianz. We will measure progress in the company towards incorpo-
rating our renewed leadership principles by a newly defined Inclusive
Meritocracy Index (IMIX), based on global employee feedback.
Growth Engines: We systematically exploit new sources for profitable
growth across regions, business segments, and sales channels. This
means we will both consolidate existing leadership positions in
mature markets and secure our future potential in growth markets
with dedicated strategies, including new digital distribution models
and regional partnerships. We will enhance our product range by
replicating proven products, adding services, and driving innova-
tions, for example in Health insurance.
continue to capture economies of scale and skills, especially in asset-
liability management processes and by pooling our investment
management infrastructure, and will broaden the alternative asset
allocation.
C Group Management Report
Your Allianz
To increase agility and market focus of the corporate center, we
will bring top leaders from our strongest businesses into the
Group center while bringing functional experts from the Holding
into the markets. We will continue to streamline our holding
functions to put more focus on customer and market success
and the implementation of the Renewal Agenda.
58 Strategy and Steering
Dr. Helga Jung
Jay Ralph
Sustainable development means creating long-term economic value
with a forward-thinking approach to corporate governance, environ-
mental stewardship, and social responsibility. This is fundamental to
our day-to-day insurance and asset management business, as we
have to deliver on our promises to customers not only today, but also
in 20 or 30 years.
Progress in Sustainable Development
61 Progress in Sustainable Development
58 Strategy and Steering
53 Business Operations and Markets
Your Allianz
C Group Management Report
Annual Report 2015 Allianz Group
60
60
Non-financial key performance indicators (KPIs) are mainly
used for the sustainability assessment of the mid-term bonus. Under
the category "partner of choice" the following KPIs are considered:
Allianz Engagement Survey and NPS results, brand performance
(measured by the Funnel Performance Index), diversity development,
organizational transparency (as measured by the Transparency
International Corporate Reporting ranking) and sustainable develop-
ment (as measured by widely-recognized indices and rankings).
Besides performance steering, we also have a risk steering pro-
cess in place, which is described in the Risk and Opportunity Report
starting on page 112.
indicators across all business segments for the Allianz Group. In
addition, we also use segment-specific figures such as the combined
ratio for Property-Casualty, in-force and new business margins as
well as margin on reserves for Life/Health, and the cost-income ratio
for Asset Management. Furthermore, we use Return on Risk Capital
(RORC) for new business steering purposes in the Property-Casualty
and Life/Health business segments. For a comprehensive view of our
business segment performance, please refer to the Management Dis-
cussion and Analysis starting on ②> page 67.
Dr. Christof Mascher
We continuously monitor our business performance against
these targets through monthly reviews to ensure that appropriate
measures can be taken in the event of negative developments. During
these reviews, we monitor key operational and financial metrics.
Operating profit and net income are the main financial performance
TARGET SETTING AND MONITORING
Insurance German Speaking Countries, Insurance Central & Eastern Europe (since 1 September 2015)
Investments, Global Life/Health, Insurance Asia Pacific (since 1 September 2015)
Global Insurance Lines & Anglo Markets, Global Property-Casualty (since 7 May 2015)
Finance, Controlling, Risk
Asset Management, us Life Insurance
Operations, Allianz Worldwide Partners
Insurance Iberia & Latin America, Legal & Compliance, Mergers & Acquisitions
Insurance Western & Southern Europe, Insurance Middle East, Africa, India (since 1 September 2015)
Insurance Growth Markets (until 31 August 2015)
Chairman of the Board of Management (since 7 May 2015), Global Property-Casualty (until 6 May 2015)
Chairman of the Board of Management (until 6 May 2015)
RESPONSIBILITIES
Dr. Maximilian Zimmerer
Dr. Werner Zedelius
Dr. Dieter Wemmer
Dr. Axel Theis
The Allianz Group steers its operating entities and business seg-
ments via an integrated management and control process. This starts
with the definition of a business-specific strategy and goals, which
are discussed and agreed upon between the Holding and operating
entities. According to this strategy, a three-year plan is prepared by
the operating entities and aggregated to form the financial plans for
the business divisions and the Allianz Group. This plan also forms the
basis for our capital management. The Supervisory Board then
approves the plan and sets corresponding targets for the Board of
Management. The performance-based remuneration of the Board of
Management is linked to short-, mid-, and long-term targets to
ensure effectiveness and emphasize sustainability. For further details
about the remuneration structure, including target setting and per-
formance assessment, please refer to the Remuneration Report start-
ing on page 37.
53 Business Operations and Markets
61 Progress in Sustainable Development
53 Business Operations and Markets
23.1
21.2
36.8
36.2
35.5
52.4
52.9
52.8
1- Figures based on the number of employees in Allianz's core business. Excluded are fully consolidated
companies which are considered pure financial investments, non-profit organizations, e.g. foundations,
and companies classified as held for sale.
2- Including women in all executive positions below the Board of Management.
23.3
3- Including women functionally responsible for other staff, regardless of level, e.g. division, department,
and team managers.
To support employee rights, we were one of the first companies to
create pan-European worker participation standards and establish
a European SE works council under the legislation for Societas Euro-
paea (SE) companies. We are also a signatory to the International
Labour Organization's (ILO) Declaration on Fundamental Rights and
Principles at Work, including the ILO declaration on the freedom of
association and the right to collective bargaining.
SUSTAINABLE VALUE APPROACH TO REMUNERATION
Our remuneration and incentive structures are designed to encourage
sustainable value creation and offer both monetary and non-mone-
tary rewards. Our remuneration system is based on the following
principles:
Provide a transparent, fair and integrated offering to attract,
motivate, and retain highly qualified employees.
Deliver total rewards that are competitive in the relevant markets.
Align remuneration with the performance of the individual and
the achievement of Allianz's financial and strategic goal to "pay
for performance".
Operate effectively in different performance scenarios and busi-
ness circumstances.
Reward risk control and avoid inappropriate risk-taking.
WELLBEING AND EMPLOYEE ENGAGEMENT
We take an active role in promoting the physical and mental health
of our employees, including a variety of stress management pro-
grams and measures. Our central Work Well program analyzes root
causes of stress to find the most effective solutions.
4- These figures do not represent the proportion of women in the two management levels below the Board
of Management of Allianz SE.
We also believe that committed and motivated employees bring
competitive benefits to our business. By actively engaging with our
workforce, we have developed a culture of high performance, greater
integrity, and better customer focus. Each year, we conduct the
Group-wide Allianz Engagement Survey (AES) to gather employee
feedback on a range of issues, including those identified as promot-
ing a high-performance culture. In 2015, 120,204 employees from 67
Allianz companies were invited to participate. The global response
rate of 84% was in line with 2014.
2013
2015
91
86
621
668
629
Average training days per employee, staff
2.9
3.0
3.0
1- Figures based on the number of employees in Allianz's core business. Excluded are fully consolidated
companies which are considered pure financial investments, non-profit organizations, e.g. foundations,
and companies classified as held for sale.
2014
1- KPMG Wirtschaftsprüfungsgesellschaft AG has provided limited assurance on the 2015 corporate giving
information. For further information, please refer to www.allianz.com/sustainability.
99
65
DIVERSITY
At Allianz, we recognize the importance of having a diverse, inclusive
workforce that is made up of employees from different backgrounds.
To accomplish this, we have implemented a number of initiatives, in-
cluding those focused on gender, ethnicity, age, religion, sexual orien-
tation, disability, education, and nationality.
We actively support employee rights and strive to apply core
human-rights principles based on the United Nations Declaration of
Human Rights throughout our worldwide organization. We are a par-
ticipant of the United Nations Global Compact and have integrated
its ten principles into our globally binding Code of Conduct. We also
respect the OECD Guidelines for Multinational Enterprises.
WOMEN ACROSS THE ALLIANZ GROUP¹
%
Women in executive positions2,4
Female managers3,4
Share of women in overall workforce
Annual Report 2015 Allianz Group
85
A key measurement of the AES is the Employee Engagement
Index (EEI), which reflects employee satisfaction, loyalty, advocacy,
and pride within their organizations. In 2015, the EEI score at Group
level was 75%. This reflects a high level of engagement among our
workforce, as well as the highest ever EEI result since the survey began.
66
performance of major stock market indices was mixed, with gains in
the Eurozone and Japan and losses in emerging markets. The Euro
fluctuated considerably against the U.S. Dollar, closing the year at a
rate of 1.09 U.S. Dollar to Euro, well below the level seen at the begin-
ning of 2015. The diverging monetary policies of the U.S. Federal
Reserve and the European Central Bank were a key factor behind this
downward correction. Financial markets in emerging markets had a
difficult year - substantial capital outflows exerted a sharp down-
ward pressure on both stock and currency markets.
Business environment 2015
for the insurance industry
2015 offered the now familiar cocktail of economic and political chal-
lenges that describes the business environment after the financial
crisis: modest premium growth but persistently low interest rates,
volatile financial markets and new regulatory burdens. The only
"bright" spot was the low level of insured losses - compared with his-
torical averages - resulting from natural catastrophes. This was
mainly thanks to a calm hurricane season in the North Atlantic.
Nonetheless, weather-related natural catastrophes were plentiful in
2015, from winter storms in North America to droughts and heat-
waves around the world to floods in Great Britain.
However, neither natural catastrophes nor political woes posed
the biggest challenges in 2015. It was, in addition to economic chal-
lenges, technological change, which now fully encompasses the
insurance industry. Digital technology and Big Data are transforming
the whole business model, the way the industry underwrites risks,
distributes products and communicates with customers. Against this
background, it is not surprising that industry consolidation gathered
pace in 2015, resulting in deals such as the acquisition of the Chubb
Group by ACE Limited.
In the property-casualty sector, premium growth in advanced mar-
kets was basically unchanged from the previous year. Whereas the
ongoing - albeit slow - recovery supported demand for insurance,
particularly in Europe, softening prices in some markets and busi-
ness lines put a damper on premium growth. In contrast to this,
emerging markets followed increasingly divergent trends. In par-
ticular, Latin America showed significantly slower growth than in
preceding years, dragged down by the severe recession in its biggest
economy, Brazil. The indisputable growth champion of 2015 was
again emerging Asia, with a strong Chinese market as its driving
force. Encouragingly, the other heavyweight in emerging Asia, India,
returned to healthy growth, too. Overall, according to our own esti-
mates and based on preliminary figures, global premiums rose by
around 4.5% in 2015 (in nominal terms and adjusted for foreign cur-
rency translation effects).
Annual Report 2015 Allianz Group
67
89
68
Financial market developments in 2015 continued to be charac-
terized by extremely low interest rates, a strong U.S. Dollar and
increasingly volatile equity markets. In the United States, the Federal
Reserve ended its zero interest rate policy in December, lifting the
target range for the federal funds rate to 0.25 to 0.5%. By contrast, the
European Central Bank continued to ease its monetary policy stance
with a bundle of measures, for example an extension of its bond pur-
chasing program and a further lowering of its deposit rate to (0.3) %.
Yields on 10-year German government bonds ended 2015 at 0.6%, a
minor increase of 10 basis points compared with a year earlier. The
Underwriting profitability remained stable on average, with
combined ratios in most markets clearly below 100%, reflecting lower
catastrophe losses. However, overall profitability remained under
pressure as investment returns were challenged by very low interest
In the life sector, premium growth in advanced markets slowed
slightly in 2015. While the U.S. market was more or less stable, growth
in some European markets, for example in Italy, normalized after a
very strong performance in the previous year. By contrast, premium
growth in emerging markets was not only much stronger but actu-
ally picked up slightly. Even Latin America and Eastern Europe,
despite their economic troubles, kept up rather well in 2015. However,
the dominance of emerging Asia – and in particular China – is even
more pronounced in life than in the property-casualty sector: In 2015,
almost half of all premiums in emerging markets were written in
China, and more than 60% of all premium growth was generated
there. In total, according to our own estimates and based on pre-
liminary figures, global premiums grew by around 5.0% in 2015 (in
nominal terms and adjusted for foreign currency translation effects).
The stubbornly low yield environment posed the greatest chal-
lenge for profitability in the life sector. Life insurers reacted mainly by
shifting the portfolio mix towards alternative and less liquid assets,
for example infrastructure. They also started to develop new product
concepts with reduced guarantees and fostered protection-type
products. All in all, insurers managed to shift the product mix
towards less capital-intensive products, safeguarding profitability
and solvency positions.
Business environment 2015
for the asset management industry
As described earlier, markets were highly volatile for the asset man-
agement industry. On the one hand they were supported by continu-
ously low interest rates and quantitative-easing measures. Equity
and bond markets also developed positively. On the other hand, the
third quarter of 2015, in particular, was tumultuous for global mar-
kets, which were impacted by the economic slowdown in China and
concerns about other emerging markets.
European equity indices were especially subject to strong fluc-
tuations in the second half of the year. In the fourth quarter of 2015,
European equity markets developed favorably and rose above 2014
levels, driven by the announcement in December by the European
Central Bank of further supportive monetary measures. U.S. equity
prices recovered strongly at the beginning of the fourth quarter of
2015 and the NASDAQ finished the year in positive territory. However,
the 25 basis points increase in the U.S. federal funds rate at the end of
the fourth quarter hit equity investors. In addition, the continued
sharp decline in the price of oil burdened corporates and countries
exposed to oil production, as did ongoing concerns about the Chinese
economy. The effects of slowing growth in China and weak commodity
demand made 2015 a difficult year for emerging markets. As a result,
many Asia Pacific and emerging market indices lost ground compared
to the end of December 2014.
During the year, bond markets were also impacted by uncertainty
surrounding the timing of the increase in the U.S. federal funds rate.
With the decision taken by the U.S. Federal Reserve in December 2015,
yields rose across most U.S. bond classes, which led to a weak fourth
quarter of 2015 in terms of strong net outflows from nearly all types
of mutual funds and asset classes in the United States.
Your Allianz
Throughout the year, yields on the short end of the yield curve
grew at a faster pace than those at the long end, signaling falling
expectations for future inflation. Overall, mutual funds in 2015
recorded continued net inflows. In the United States, passive mutual
funds noted strong net inflows in 2015 driven by equities and bonds.
Active U.S. mutual funds, in contrast, suffered notable net outflows in
2015-mainly in U.S. equities and taxable bonds. Money market funds
in the United States profited, especially in December 2015, from the
interest rate uncertainties. German mutual equity funds recorded
net inflows for the first time in years. Furthermore, net inflows in
mutual funds in Germany were again dominated by multi-asset
funds.
Annual Report 2015 Allianz Group
rates.
60
Compared with 2014, economic growth in industrialized coun-
tries picked up slightly in 2015. Real gross domestic product rose by
1.8% (2014: 1.7%). The further stabilization in the Eurozone economy
was among the positive aspects witnessed in 2015. The decline in
commodity prices and the lower Euro, but also progress on the
reform front in the former crisis countries bolstered this upward
trend. As a result, real gross domestic product expanded by 1.5%.
With an increase of 1.7% the German economy recorded a slightly
higher growth rate than the Eurozone as a whole. In the United States
the six-year-long upswing continued, but given the strength of the
U.S. Dollar, growth was practically unchanged from the year before at
2.4%. Broadly speaking, consumption was the driver of growth in
industrialized countries with investment providing little impetus.
Overall, the world economy grew by an estimated 2.4%, slightly lower
than in 2014, when global output rose by 2.7%. Global merchandise
trade, by contrast, expanded by only about 2% in 2015. For a number
of years now the old rule of thumb that global trade increases at twice
the rate of global output has no longer applied. This shows that the
pace of globalization in merchandise trade has clearly abated.
DIVERGING GROWTH DYNAMICS IN
Annual Report 2015 Allianz Group
EMPLOYEE ENGAGEMENT INDEX
2015
2014
2013
Employee Engagement Index
75
72
73
C Group Management Report
INDUSTRIALIZED COUNTRIES AND EMERGING MARKETS
In 2015 the global economy offered both light and shade. Geopolitical
tensions and crises and acts of terrorism created a difficult backdrop.
The slide in the oil price and other commodity prices had a marked
impact on global income flows. Many advanced economies benefited
from purchasing power gains, whereas a host of emerging markets
saw revenues plummet. However, alongside developments in com-
modity prices, structural factors also lay behind the relative economic
weakness in emerging markets. The slowdown in China continued,
while other major emerging market economies like Brazil and Russia
experienced severe recessions. Nevertheless, there were also some
bright spots in emerging markets like India and most eastern Euro-
pean E.U. member states, which registered robust growth. Overall,
emerging markets expanded by a rather disappointing 3.3% in 2015,
the lowest growth rate in 15 years, if one ignores the Great Recession
in 2009.
Management Discussion and Analysis
69 Executive Summary of 2015 Results
80 Life/Health Insurance Operations
92 Outlook 2016
86 Asset Management
74 Property-Casualty Insurance Operations 90 Corporate and Other
98 Balance Sheet Review
105 Liquidity and Funding Resources
110 Reconciliations
Business Environment
Economic environment 2015
67 Business Environment
€ MN
€
%
Total expenses in training
80
ALLIANZ - ONE OF THE WORLD'S STRONGEST BRANDS
The brand Allianz¹ plays a key role in driving sustainable growth. It
fosters close bonds with our customers, which are even more impor-
tant in a digital context. In turn, this helps us to build sustainable
relationships: Trust in the name Allianz helps us to attract new cus-
tomers, engage with our products and services, and maintain cus-
tomer loyalty in the long term.
In 2015, Allianz-branded revenues stood at 84% (2014: 83%) of
total revenues. Our “one-brand” strategy leaves room for renowned
specialty brands such as PIMCO and Euler Hermes, which use Allianz
as their reference. Our strong brand performance was again acknowl-
edged in the annual 100 Best Global Brands Ranking from Interbrand:
In 2015, our brand value increased by 10% to USD 8.5 BN (2014: USD 7.7 BN)
and has more than doubled compared to 2007 when we first entered
the ranking. According to Interbrand, Allianz now ranks 54th among
the world's top 100 brands.
-
Corporate responsibility is a vital component in our established
sports and culture partnerships strategy – be it our commitment to
the Paralympic Movement around the topics of diversity and inclu-
sion or our Road Safety program, with 41 local entities participating
in 2015. Our annual youth programs inspire and unite young genera-
tions around one common passion – for example, the Allianz Junior
Football Camp where teens from all over the world apply to train with
FC Bayern München youth coaches and meet their idols, or the Allianz
Junior Music Camp where star pianist Lang Lang and his Lang Lang
International Music Foundation encourage the next generation of
classical musicians.
ENVIRONMENTAL MANAGEMENT
As a business dealing with risks, managing our environmental
impact has always been very important to us. Our ESG materiality
assessment continues to show that climate change is a key environ-
mental risk and opportunity. For this reason, we prioritize carbon
reduction also in our own activities to reduce the environmental foot-
print of our operations.
Our strategic approach to reducing our carbon footprint is three-
fold: avoid and reduce our emissions, substitute with lower-carbon
alternatives, and offset our remaining emissions through direct
investments in high-quality carbon reduction projects.
BREAKDOWN OF CO2 EMISSIONS¹
%
as of 31 December 2015
Energy
Travel
Paper
Water
Waste
2015
55.1
39.3
3.7
0.2
1.7
1- KPMG Wirtschaftsprüfungsgesellschaft AG has provided limited assurance on the 2015 environmental
performance information. For further information, please refer to www.allianz.com/sustainability.
63
Annual Report 2015 Allianz Group
1 - Customer figures exclude clients in microinsurance, pension funds, and all Global Lines. For more infor-
mation on our customer base, please refer to page 55.
Rest of German Speaking
Countries 2.6 [2.6]
France 6.5 [6.8]
Italy 8.7 [7.9]
61 Progress in Sustainable Development
ESG IN THIRD-PARTY ASSET MANAGEMENT
Allianz is one of the world's largest asset managers. We run the asset
management business out of two investment management entities:
AllianzGI and PIMCO, which operate under the Allianz Asset Manage-
ment holding (AAM). In addition to managing the majority of our
proprietary assets, AllianzGI and PIMCO are responsible for our third-
party asset management business.
Training expenses per employee
Despite different regional focuses and investment strategies,
embedding ESG criteria into asset management is common practice
at AllianzGI and PIMCO and they are both signatories to the PRI.
Furthermore, they offer a range of Sustainable and Responsible
Investment (SRI) products and services which provide customers
with new choices that deliver financial, social, and environmental
returns, using strategies such as the best-in-class approach, impact
investing, or negative screening. At the end of 2015, total SRI managed
by AAM amounted to € 103 BN (2014: € 117 BN), corresponding to 6% of
AAM's total assets under management. The largest share of AAM's
total SRI assets under management is managed by PIMCO, which
totaled € 82 BN (2014: € 95 BN). In addition, AllianzGI managed € 21 BN
(2014: € 22 BN) of SRI investments.
Trusted company
Our customers' needs and how we meet them are central to our
ambition to keep being part of the strongest financial community,
and to our aim of being the most trusted partner within our core busi-
ness of insurance and investments. As part of this, our customers
rightly expect that their personal information will be treated with
utmost care.
As we move towards a culture of Digital by Default, we remain
committed to protecting customer privacy and data security. We
know that consumers are increasingly basing their loyalty around
whether a business offers sustainable solutions that deliver both
financial and societal value. To this end, our range of responsible
products continues to grow, including insurance products that aim
to reward low-carbon lifestyles and affordable microinsurance for
individuals and small businesses around the world.
CUSTOMER CENTRICITY
Since over 98% of our emissions comes from energy consumption,
travel, and paper use, the focus of our carbon reduction activities is
in these areas. We had set ourselves a target to reduce our carbon
emissions per employee by 35% by 2015 (against a 2006 baseline) and
to reduce the energy consumption per employee by 10% (against a 2010
baseline). We achieved both targets ahead of time and our final per-
formance in the target year 2015 was at 43.3% CO2 and 25.7% energy
reduction.
Putting True Customer Centricity at the core of our Renewal Agenda
means providing a superior customer experience. By leveraging digi-
tal technology, we can provide our customers with convenient access
to Allianz at any time, creating easy, modular, and transparent offers
with the flexibility for customization. For example, through our inno-
vative Fast Quote approach, Allianz customers can get an insurance
offer simply and quickly over the internet by providing only few data
and either buy directly online or finalize their purchase at an agency.
Fast Quote solutions are now deployed in 15 countries, with more
markets to come.
To continuously measure and benchmark our performance on
customer centricity, we use key feedback tools such as the Net Pro-
moter Score (NPS). NPS measures our customers' willingness to re-
commend Allianz and is broadly established as our key global metric
for customer loyalty. Top-down NPS is conducted regularly according
to global cross-industry standards and allows benchmarking against
competitors in the respective markets. In 2015, 50% of all businesses
measured significantly outperformed their local peer average or even
achieved loyalty leadership in their market.
To steadily improve the satisfaction of our customers, we addi-
tionally apply our "Customer Experience Management" methodology:
This involves asking our customers for direct feedback regarding
their experience with Allianz. Our methodology helps us to identify key
areas for improvement and to improve customer satisfaction along
the entire customer journey, for example in sales and claims handling.
As we see a clear correlation of NPS performance with sustain-
able growth, a superior customer experience is our top priority. We
set clear customer-oriented targets, which are hardwired into our
culture, planning, processes, and incentives.
CUSTOMER BASE
The overall number of customers insured by Allianz worldwide grew
from 85 million in 2014 to 85.4 million in 2015.
CUSTOMERS BY REGION/COUNTRY1
as of 31 December 2015 [31 December 2014] in %
Anglo Markets 8.1 [8.0]
USA 1.4 [1.4]
Growth Markets 30.3 [30.6]
Rest of Europe &
Latin America 18.2 [18.8]
The next step is to scale up the combination of Fast Quote technol-
ogy with modular offers like “Allianz1": a product innovation launched
in Italy in 2014, providing retail customers with a set of 13 optional
modules for tailored insurance cover in line with personal needs and
budgets. A modular offer for small and medium enterprises was
launched at the end of 2015. Another approach to creating distinctive
additional value and a caring customer experience is the integration
of our global assistance services into our insurance products - for
example, of roadside assistance into motor insurance.
We have been a carbon-neutral company since 2012 and in 2015
301,339 credits were offset from our own projects, each one account-
ing for one metric ton of carbon.
Germany 24.2 [23.9]
as of 31 December
Your Allianz
53 Business Operations and Markets
58 Strategy and Steering
61 Progress in Sustainable Development
To ensure continuous improvement, all compliance risks are
monitored and reported within the Group. Our compliance quality
assurance program comprises self-assessments, on-site reviews and
local spot checks, and our intranet-based compliance case reporting
tool provides Group-wide oversight by passing information to the
audit and integrity committees.
Committed corporate citizen
As a global company with a presence in more than 70 countries, we
believe that acting as a responsible corporate citizen is good for soci-
ety and good for business. By helping to build stronger and more
inclusive communities, we are supporting the development of a more
stable economic landscape. This, in turn, ensures resilient markets
for our products and services.
Much of our time and skill is dedicated to empowering the next
generation. That is why we have developed Future Generation, a
framework to support children, adolescents and young adults on a
range of issues. This is also why we continue to fund sos Children's
Villages, an organization that provides orphaned and abandoned
children in 125 countries with loving family homes. We support short-
term emergency measures and long-term help for children through
local activities as well as advocacy at a global level. In 2015, we estab-
lished local partnerships with sos villages in France, Romania, India,
and Germany.
With our collective financial and business skills, we assist char-
itable organizations through employee volunteering. This helps to
build skills and motivation that can be brought back into the work-
place. In 2015, we launched ACT!, an online marketplace for employee
volunteering, starting with a pilot in Germany. The marketplace fea-
tures Allianz projects and moreover, employees can promote their
own volunteering activities.
In 2015, corporate giving totaled € 23 MN (compared to € 21 MN in
2014).1
POLITICAL ENGAGEMENT
In 2015, Allianz SE merged its regulatory and political departments to
form a Group center for Regulatory and Public Policy Affairs. It acts as
a global center of competence for all our subsidiaries and its remit is
to develop regulatory and political strategy, coordinate our engage-
ments, and analyze current and emerging issues and our positions
on them. Two key lobbying issues in 2015 were:
Digitalization and data security: We support the European Com-
mission's digital agenda to foster innovation, economic growth,
and progress. We are actively contributing to public discussions
on these issues, with a special focus on the practicability of reg-
ulation for the Group.
Consumer protection: As part of our commitment to customer
privacy and security, we support promoting transparency, sim-
plicity, and fairness in the market for consumer financial prod-
ucts and services. We contributed to the E.U. green paper on Retail
Financial Services and Insurance. This paper addresses some of
the obstacles consumers face when offering or purchasing
financial services.
Attractive employer
Globally, we employ 142,459 people in nearly 70 countries. Our busi-
ness strategy requires us to have the best people in place in order to
deliver success today and over the long term. We also apply a consis-
tent approach to human resources (HR) management across the
Group and we do this through strategic HR frameworks, principles,
and tools. This includes globally consistent people attributes along
the value chain – throughout an employee's career at Allianz.
TALENT MANAGEMENT
To ensure the quality and performance of our employees, we focus on
managing talent and careers, developing technical and leadership
skills, and meeting future workforce needs. We work to create a sus-
tainable performance culture which empowers individuals to realize
their full potential through a wide range of learning and development
opportunities. In this way, we enhance the skills base of our Group
and build employee loyalty. We place a strong emphasis on the devel-
opment of both technical expertise and leadership skills across all
business functions as key drivers for sustainable and profitable
growth.
TRAINING KEY FIGURES¹
ENVIRONMENTAL FOOTPRINT¹
2015
2014
2013
C Group Management Report
Annual Report 2015 Allianz Group
58 Strategy and Steering
1- Our Allianz trademark is registered and protected worldwide, as are our domains. Furthermore, we have
registered our corporate design and brand claim "Allianz. With you from A-Z." in the relevant countries
worldwide.
Per employee emissions
Total energy consumption
thereof: Renewables
64
Total travel-plane, train, car
Total paper consumption
Total emissions
2015
20142
20132
301,339
300,537
333,509
2.12
2,577,050
42.7
908,442
in metric
tons CO₂e
in metric
tons CO2e
in GJ
in %
in TKM
in metric
tons
2.37
2,850,903
Our risk management framework includes compliance risks. A com-
pliance management system helps us to ensure compliance with
internationally recognized laws, rules, and regulations, while addi-
tional risk identification exercises help us to continually improve our
approach. We take a proactive stance, working with organizations
such as the German Institute for Compliance and the Global Insur-
ance Chief Compliance Officers Forum to enhance understanding of
compliance issues and share best practice.
COMPLIANCE MANAGEMENT
2.12
2,516,470
41.6
901,101
17,656
1- KPMG Wirtschaftsprüfungsgesellschaft AG has provided limited assurance on the 2015 environmental
performance information. For further information, please refer to www.allianz.com/sustainability.
2-2013 and 2014 figures were adjusted for a material divestment in 2015.
16,941
906,430
42.1
17,112
TOTAL REVENUES AND RECONCILIATION OF OPERATING PROFIT TO NET INCOME
€ MN
Total revenues¹
122,253
Premiums earned (net)
2015
2014
71
Annual Report 2015 Allianz Group
125,190
70,645
(1,301)
Operating investment result
Interest and similar income
22,408
21,443
Operating income from financial assets and liabilities carried at fair value through income (net)
(2,089)
Allianz SE
Operating realized gains/losses (net)
6,726
3,205
Interest expenses, excluding interest expenses from external debt
(375)
(415)
68,274
Munich, 16 February 2016
to € 268 MN, mainly due to higher impairments on equities in line Proposal for appropriation of net earnings
Unappropriated earnings carried forward: € 908,251,688.01
Operating impairments of investments (net)
Management Discussion and Analysis
C Group Management Report
67 Business Environment
69 Executive Summary of 2015 Results
80 Life/Health Insurance Operations
86 Asset Management
74 Property-Casualty Insurance Operations 90 Corporate and Other
98 Balance Sheet Review
105 Liquidity and Funding Resources
110 Reconciliations
Non-operating result
Our non-operating result improved by € 1,015 MN to a loss of € 539 MN.
This was mainly due to a lower negative impact from the reclassifica-
tion of tax benefits, compared to 2014, and increased non-operating
realized gains and losses (net). These improvements were partly off-
set by higher non-operating amortization of intangible assets.
The proposal for appropriation of net earnings reflects the 2,154,186
treasury shares held directly and indirectly by the company at the
time of the publication of the convocation of the Annual General
Meeting (AGM) in the Federal Gazette. Such treasury shares are not
entitled to the dividend pursuant to § 71b of the German Stock Cor-
poration Act (AktG). Should there be any change in the number of
shares entitled to the dividend by the date of the AGM, the above pro-
posal will be amended accordingly and presented for resolution on
the appropriation of net earnings at the AGM, with an unchanged
dividend of € 7.30 per each share entitled to dividend.
Non-operating income from financial assets and liabilities carried
at fair value through income (net) improved by € 84 MN to a loss of
€ 219 MN, mainly due to favorable impacts from hedging-related
activities.
Non-operating impairments of investments (net) rose by € 72 MN
Net income
Net income increased by € 384 MN to € 6,987 MN, primarily driven by our
higher non-operating result and our solid operating performance,
partly offset by the higher effective tax rate. Net income attributable
to shareholders rose 6.3% to € 6,616 MN (2014: € 6,221 MN). Net income
attributable to non-controlling interests was € 371 MN (2014: € 381 MN).
Our largest non-controlling interests in net income related to Euler
Hermes and PIMCO.
Basic earnings per share increased from € 13.71 to € 14.56 in 2015
and diluted earnings per share rose from € 13.64 to € 14.55. For further
information on earnings per share, please refer to note 51 to the con-
solidated financial statements.
with unfavorable market developments – predominantly in the third
quarter of 2015.
The negative impact from the reclassification of tax benefits
declined by € 839 MN to € 62 MN. The second half of 2014 included sig-
nificant one-off tax benefits, reflected within income taxes, a portion
of which were reclassified and shown within operating profit in order
to adequately reflect policyholder participation.
Non-operating amortization of intangible assets increased from
€ 104 MN to € 304 MN. As a result of the impairment test in 2015, all of
the goodwill of € 171 MN allocated to the cash generating unit Asia
Pacific in the business segment Life/Health was completely impaired,
mainly driven by steadily decreasing and persisting low interest rates
in South Korea. For further information, please refer to note 15 to the
consolidated financial statements.
Income taxes
Income taxes were up by € 964 MN to € 3,209 MN. The increase in
income taxes was mostly due to the higher income before income
taxes in 2015 and higher one-off tax benefits in 2014. In 2015, the effec-
tive tax rate was below our long-term average of approximately 33%
and amounted to 31.5%. The effective tax rate in 2015, adjusted for
non-tax deductible goodwill impairments and valuation allowances
on deferred tax assets, would have been approximately 30.6%. In 2014,
our effective tax rate of 25.4% benefited from extraordinary tax ben-
efits from a favorable court decision, which amounted to € 1,120 MN.
The policyholder share in tax benefits amounted to € 892 MN. Without
policyholder participation, the Allianz Group's 2014 effective tax rate
attributable to the shareholders would have been approximately 32%.
The Board of Management and the Supervisory Board propose that
the net earnings (“Bilanzgewinn”) of Allianz SE of € 4,228,626,130.21
for the 2015 fiscal year shall be appropriated as follows:
-
Distribution of a dividend of € 7.30 per no-par share
entitled to a dividend: € 3,320,374,442.20
Non-operating realized gains and losses (net) increased by
€ 399 MN to € 1,211 MN as a result of higher realizations, mainly on
equity investments.
92 Outlook 2016
Income from fully consolidated private equity investments (net)
(697)
(16)
(129)
(135)
901
10,735
10,402
Restructuring charges
Other expenses
Reclassification of tax benefits
Operating profit
Non-operating investment result
Non-operating income from financial assets and liabilities carried at fair value through income (net)
Non-operating realized gains/losses (net)
Non-operating impairments of investments (net)
Subtotal
Interest expenses from external debt
Acquisition-related expenses
One-off effects from pension revaluation
Non-operating amortization of intangible assets
Reclassification of tax benefits
Non-operating items
Income before income taxes
Income taxes
Net income
Annual Report 2015 Allianz Group
(231)
(19)
(19)
Operating amortization of intangible assets
Investment expenses
Subtotal
Fee and commission income
Other income
Claims and insurance benefits incurred (net)
(1,094)
(961)
24,319
21,274
10,945
10,119
476
(1,258)
216
(49,650)
Change in reserves for insurance and investment contracts (net)²
(14,065)
(13,929)
Loan loss provisions
(60)
(45)
Acquisition and administrative expenses (net), excluding acquisition-related expenses and one-off effects from pension revaluation
Fee and commission expenses
(25,729)
(23,351)
(3,777)
(3,238)
(51,702)
70
Allianz Group overview
3- Operating profit adjusted for foreign currency translation and (de-)consolidation effects. In 2015, the
average exchange rate of the U.S. Dollar to Euro was 1.11 (2014: 1.33)
10,402
6,987
200
6,603
181
Earnings summary
MANAGEMENT'S ASSESSMENT OF 2015 RESULTS
We recorded total revenues of € 125.2 BN, a growth of 2.4%. On an
internal basis³, revenues dropped by 2.1%. In our Life/Health business
segment, premiums decreased in particular in the United States and
in Germany, where the strategic shift to capital-light products further
contributed to the decline. In our Asset Management business seg-
ment, operating revenues were primarily burdened by lower average
third-party assets under management (AuM), mainly driven by third-
party net outflows, albeit continuously diminishing over the course
of the year. These effects were partly compensated for by mainly vol-
ume driven premium growth in our Property-Casualty business seg-
ment and slightly increased revenues in our Corporate and Other
business segment.
1- Off-balance sheet reserves are accepted by the authorities as eligible capital only upon request. Allianz SE
has not submitted an application so far. Excluding off-balance sheet reserves, the conglomerate solvency
ratios would be 191 % and 172% as of 31 December 2015 and 31 December 2014, respectively.
2- Figures as of 31 December.
3- Internal total revenue growth excludes the effects of foreign currency translation as well as acquisitions
and disposals. Please refer to page 110 for a reconciliation of nominal total revenue growth to internal
total revenue growth for each of our business segments and the Allianz Group as a whole.
Our operating profit rose 3.2% to € 10,735 MN, which is in the
upper end of our 2015 target range. Our Life/Health business segment
showed a 14.1% increase in operating profit, driven by a higher invest-
ment margin and favorable foreign currency translation effects. Our
Property-Casualty business segment also contributed to the overall
operating profit growth, in particular due to a net gain from the sale
of Fireman's Fund personal insurance business. These favorable
developments were partly offset by a decrease in operating profit in
our Asset Management business segment, mainly driven by the
impact from lower average third-party AuM. Our Corporate and Other
business segment was burdened by higher centralized pension costs
- which resulted in an increased operating loss.
Net income was up 5.8% to € 6,987 MN, mainly due to an improve-
ment in our non-operating result and our strong operating perfor-
mance, partly offset by the higher effective tax rate. Net income attri-
butable to shareholders rose 6.3% to € 6,616 MN (2014: € 6,221 MN). Net
income attributable to non-controlling interests was € 371 MN (2014:
€ 381 MN).
Our shareholders' equity went up by € 2.4 BN to € 63.1 BN, com-
pared to 31 December 2014. Over the same period, our conglomerate
solvency ratio strengthened from 181 % to 200%.¹ From 1 January 2016
onwards, capitalization based on Solvency II will be utilized for regu-
latory purposes.
Annual Report 2015 Allianz Group
69
69
Total revenues¹
TOTAL REVENUES - BUSINESS SEGMENTS
€ MN
Operating profit
OPERATING PROFIT - BUSINESS SEGMENTS
€ MN
(2.1)%
+3.2%
140,000
122,253¹
125,190¹
10,735
122,253
125,190
2014
Net income attributable to:
C Group Management Report
Management Discussion and Analysis
67 Business Environment
69 Executive Summary of 2015 Results
80 Life/Health Insurance Operations
86 Asset Management
74 Property-Casualty Insurance Operations 90 Corporate and Other
92 Outlook 2016
98 Balance Sheet Review
105 Liquidity and Funding Resources
110 Reconciliations
14,000
Executive Summary of 2015 Results
- Operating profit grew 3.2% to € 10,735 MN.
-Net income rose to € 6,987 MN.
- Conglomerate solvency ratio up 19.6 percentage points to 200%.1.2
Allianz SE and its subsidiaries (the Allianz Group) have opera-
tions in over 70 countries. The Group's results are reported by
business segment: Property-Casualty insurance operations,
Life/Health insurance operations, Asset Management, and
Corporate and Other.
Key figures
KEY FIGURES ALLIANZ GROUP
€ MN
Total revenues
Operating profit
Net income
Conglomerate solvency ratio 1.2 in %
2015
- Total revenues increased to € 125.2 BN.
+4.5%
10,735¹
556
--> 51,597
(15.1)%
20,000
0
2014
2015
(820)
2014
(945)
2015
Property-Casualty Life/Health
----> Internal growth
Asset Management Corporate and Other
48,322
1- Total revenues include € (365) MN (2014: € (344) MN) from consolidation.
1 - Total operating profit includes € (16) MN (2014: € (91) MN) from consolidation.
Property-Casualty gross premiums written grew 6.8% and amounted
to € 51.6 BN. On an internal basis², we recorded an increase of 2.9%
mainly due to favorable volume effects. We registered strong internal
growth-particularly at Allianz Worldwide Partners, in Turkey, and at
AGCS excl. Fireman's Fund.
Life/Health statutory premiums amounted to € 66.9 BN, a
decrease of 4.9% on an internal basis². This was mainly due to a drop
in fixed-indexed annuity business in the United States and reduced
sales of traditional products in Germany and Italy. These effects out-
weighed the premium growth in the unit-linked business in Italy and
Taiwan. As a result of implementing changes in our product strategy,
premiums shifted more towards unit-linked and capital-efficient
products.
Asset Management operating revenues rose by € 92 MN to € 6.5 BN.
Excluding the strong effects from foreign currency translation,
mainly resulting from the sharp depreciation of the Euro against the
U.S. Dollar, operating revenues decreased by 11.4% on an internal
basis². This was mainly driven by lower average third-party AuM and
the corresponding AuM-related income. It was partly offset by higher
performance fees.
Total revenues in our Banking operations (reported in our Cor-
porate and Other business segment) increased by € 21 MN to € 577 MN,
primarily driven by a higher net fee and commission result.
Our Property-Casualty operating profit went up by € 221 MN - or 4.1% -
to € 5,603 MN. This was mainly driven by the € 0.2 BN net gain from the
sale of the Fireman's Fund personal insurance business to ACE Limited,
which was partly offset by restructuring charges of € 0.1 BN for the
Fireman's Fund reorganization. Growth in operating investment
income which rose from € 3,066 MN to € 3,120 MN - and a higher
underwriting result contributed positively.
Life/Health operating profit was up by € 468 MN to € 3,796 MN. A
higher investment margin in Germany, positive foreign currency
translation effects, a higher investment spread margin in the United
States, and increased unit-linked management fees in Italy and
France mainly drove this development. However, these increases were
negatively affected by loss recognition in South Korea amounting to
€ 244 MN.
Asset Management operating profit went down by € 306 MN - or
11.8% - to € 2,297 MN. On an internal basis³, the decrease was 23.5%,
mainly driven by lower third-party AuM-driven revenues, partly offset
by higher performance fees and lower operating expenses.
Our operating loss in Corporate and Other grew by € 124 MN to
€ 945 MN. Increases in Banking and Alternative Investments' operat-
ing profit were more than offset by a higher operating loss in Hold-
ing & Treasury due to higher centralized pension costs.
1- Total revenues comprise statutory gross premiums written in Property-Casualty and in Life/Health, oper-
ating revenues in Asset Management, and total revenues in Corporate and Other (Banking).
2- Internal total revenue growth excludes the effects of foreign currency translation as well as acquisitions
and disposals. Please refer to page 110 for a reconciliation of nominal total revenue growth to internal
total revenue growth for each of our business segments and the Allianz Group as a whole.
Property-Casualty Life/Health Asset Management Corporate and Other
→ Growth
70
2,000
40,000
---> 577
10,402¹
120,000
6,388
---> 6,479
12,000
(11.4)%
(11.8)%
2,603-
€ 2,297.
10,000
100,000
+2.9%
(4.9)%
--> 66,903
+14.1%
8,000
3,327
3,796
80,000
6,000
60,000
4,000
+4.1%
5,382
→5,603
67,331
Non-controlling interests
Shareholders
Statement on Corporate Management pursuant to § 289a
of the HGB starting on > page 32,
(219)
France
4,330
4,248
4,324
4,248
4,007
3,926
465
932
428
1,164
1,135
1,164
1,135
1,062
1,065
108
96
Benelux
Turkey
1,075
4,665
308
297
29
17
German Speaking Countries and Central & Eastern Europe
14,061
13,673
13,849
3,906
13,673
11,455
1,683
1,743
Italy³
4,755
4,196
4,130
4,196
11,741
1,312
1,082
1,366
Middle East
88
74
76
74
60
49
11
11
8
11,855
10,939
11,266
10,939
10,915
10,006
1,798
1,588
Western & Southern Europe, Middle East, Africa and India4
11
65
74
1,082
967
906
90
90
Greece
100
108
100
108
81
89
12
16
Africa
105
96
105
96
380
Spain
401
401
7,824
1,216
1,303
1,717
1,489
1,507
1,489
1,620
7,877
1,428
198
983
976
983
976
831
831
81
245
75
9,532
9,532
Gross premiums written
Premiums earned (net)
Operating profit (loss)
internal¹
2015
2014
2015
2014
9,629
2015
2015
2014
Germany
Switzerland
Austria
Central & Eastern Europe²
Poland
9,629
2014
1,732
1,676
1,729
271
263
272
263
225
223
24
22
Hungary
Czech Republic
286
313
286
269
238
34
44
Other
316
67
56
267
1,676
1,413
1,372
141
167
409
419
408
419
344
348
(1)
17
Slovakia
336
330
336
330
267
380
2,138
2,015
2,138
2,362
2,180
307
353
Russia
196
537
269
2,763
365
528
2
(194)
Ukraine
4
13
7
13
183
3
2,898
2,991
2,322
2,439
56
178
Ireland
496
439
496
2,763
439
385
42
85
United States?
1,958
1,874
(151)
Australia8
432
8
Global Insurance Lines & Anglo Markets⁹
21,931
(5,565)
51,597
(4,469)
48,322
(5,552)
49,310
(4,455)
47,920
46,430
43,759
5,603
105
86
5,382
2- Includes income and expense items from a management holding and consolidations between countries
in this region.
3- Effective 1 July 2014, the Allianz Group acquired parts of the insurance business of UnipolSai Assicurazioni
S.p.A., Bologna.
4- Includes € 4 MN and € 7 MN operating profit for 2015 and 2014, respectively, from a management holding
located in Luxembourg. Includes € 21 MN operating profit for 2015 from an associated entity in Asia Pacific.
5- Effective 1 January 2015, Fireman's Fund Insurance Company was integrated into AGCS Group. Previous
period figures were not adjusted. The sale of the renewal rights for personal lines was effective 1 April 2015.
12M 2015 figures include the net gain on the sale of the personal insurance business to ACE Limited of € 0.2 BN.
6-The results from the run-off portfolio included in San Francisco Reinsurance Company Corp., a former
subsidiary of Fireman's Fund Insurance Company, have been reported within Reinsurance PC since 1 January
2015.
7- Previous period figures for the United States were not adjusted and include the prior year's business of
Fireman's Fund Insurance Company.
78
Annual Report 2015 - Allianz Group
1- This reflects gross premiums written on an internal basis, adjusted for foreign currency translation and
(de-)consolidation effects.
128
2,981
3,538
19,680
20,556
19,265
15,994
15,176
1,846
1,699
Asia Pacific
Allianz Worldwide Partners 10
Consolidation and Other 11,12
Total
774
3,975
722
3,341
738
3,703
722
3,341
501
443
74
57
2,684
2,754
2,684
3,055
(154)
(147)
4,566
4,437
4,750
4,437
3,741
3,699
1,622
74
8,107
5,389
7,177
7,104
5,066
3,162
423
560
104
1,549
2,101
2,270
2,015
1,907
1,806
208
255
Portugal
343
320
343
320
285
271
20
(4)
Latin America
Iberia & Latin America
Allianz Global Corporate & Specialty
2,086
2,101
AGCS excl. Fireman's Fund
€ MN
6,227
5,605
4,799
3,738
4,078
3,118
584
464
San Francisco RE
41
3,738
Credit Insurance
2,158
2,157
2,158
1,549
1,482
400
401
United Kingdom
2,241
4,841
Reinsurance PC excl. San Francisco RE
464
5,376
3,604
3,162
514
560
Fireman's Fund
1,881
1,572
1,728
1,462
(91)
Reinsurance PC6
4,841
3,738
4,799
3,738
4,078
3,118
625
5,389
PROPERTY-CASUALTY INSURANCE OPERATIONS BY REPORTABLE SEGMENTS
Property-Casualty insurance operations by reportable segments
77
80 Life/Health Insurance Operations
86 Asset Management
90 Corporate and Other
92 Outlook 2016
98 Balance Sheet Review
105 Liquidity and Funding Resources
110 Reconciliations
CLUSTER 1
74 Property-Casualty Insurance Operations
In France, gross premiums increased to € 4,330 MN. The internal
growth of 1.8% was mainly due to a positive price impact from our
commercial and retail business.
In Spain, gross premiums were at € 2,138 MN - up 6.1% on an
internal basis. We registered positive volume effects in all our lines of
business and favorable price effects mainly in our motor and
sonal lines business.
per-
In Turkey, gross premiums amounted to € 1,312 MN. The internal
growth of 26.3% resulted from higher price and volume effects across
our main lines of business, especially in our motor third party liability
insurance business.
CLUSTER 2
In Germany, we recorded gross premiums of € 9,629 MN, a rise of 1.0%
on an internal basis. This was due to positive price effects especially
in our motor insurance business. It was partly offset by unfavorable
volume impacts in our accident insurance with premium refunds
(APR).
At AGCS incl. FFIC, gross premiums increased to € 8,107 MN. The
internal growth of 1.0% was mainly driven by favorable volume effects
at Allianz Risk Transfer, while negative price impacts in our energy
and aviation lines of business had some compensating effects.
At Allianz Worldwide Partners, gross premiums went up to
€3,975 MN. The internal growth of 10.8 % was due to positive contribu-
tions from all our lines of business, but particularly due to higher
volume impacts at Worldwide Care and our U.S. travel business.
In the United Kingdom, gross premiums stood at €3,055 MN, an
increase of 2.6% on an internal basis. This was due to favorable price
effects in our commercial motor and pet insurance businesses.
In Australia, gross premiums grew 4.9% to € 2,991 MN on an inter-
nal basis. This was driven by positive price and volume effects across
most of our lines of business.
In Latin America, gross premiums rose 8.0% to € 2,086 MN. The
internal growth was largely driven by our motor insurance business.
69 Executive Summary of 2015 Results
Management Discussion and Analysis
On a nominal basis, we recorded gross premiums written of € 51,597 MN,
an increase of € 3,274 MN or 6.8% compared to 2014.
Foreign currency translation effects amounted to € 1,529 MN,
mainly due to the strong U.S. Dollar, British Pound and Swiss Franc
against the Euro.²
Consolidation/deconsolidation effects were at € 357 MN mainly
due to positive effects from the acquisition of a part of the insurance
business of UnipolSai and the takeover of the Property-Casualty
insurance business of the Territory Insurance Office in Australia. This
was partly offset by the sale of the Fireman's Fund personal insurance
business to ACE Limited and the downscaling of our retail business
in Russia.
On an internal basis, our gross premiums went up 2.9%. This was
composed of a volume effect of 2.1% and a price effect of 0.8%. We
recorded strong internal growth at Allianz Worldwide Partners, in
Turkey, and at AGCS excl. Fireman's Fund.
Analyzing internal premium growth in terms of price and volume,
we use four clusters based on 2015 internal growth over 2014:
Cluster 1:
Overall growth - both price and volume effects are positive.
Cluster 2:
67 Business Environment
Overall growth - either price or volume effects are positive.
Overall decline - either price or volume effects are negative.
Cluster 4:
Overall decline - both price and volume effects are negative.
1- We comment on the development of our gross premiums written on an internal basis, meaning adjusted
for foreign currency translation and (de-)consolidation effects, in order to provide more comparable
information.
2- Based on the average exchange rates in 2015 compared to 2014.
74
Annual Report 2015 Allianz Group
C Group Management Report
Cluster 3:
CLUSTER 3
In Italy, gross premiums stood at € 4,755 MN, a decline of 1.6% on an
internal basis. This mainly resulted from negative price effects in our
motor insurance business.
In Credit Insurance, gross premiums decreased by 0.1% and were
at € 2,241 MN. Negative price effects after experiencing a low claims
environment in some of our mature markets were largely offset by
positive volume effects in Asia and Italy.
€ MN
Premiums earned (net)
Accident year claims
Previous year claims (run-off)
Claims and insurance benefits incurred (net)
Acquisition and administrative expenses (net),
excluding one-off effects from pension revaluation
Change in reserves for insurance and investment
contracts (net) (without expenses for premium
refunds)¹
Underwriting result
2015
2014
46,430
(32,646)
UNDERWRITING RESULT
43,759
1,924
1,385
(30,721)
(28,878)
(13,208)
(12,400)
(220)
(231)
(30,263)
to 94.6%.
Despite higher losses from natural catastrophes and a negative
motor driven impact from Argentina, our underwriting result went
up by € 30 MN to € 2,281 MN, benefiting from a higher contribution
from run-off. Our combined ratio worsened by 0.3 percentage points
Operating profit increased by € 221 MN to € 5,603 MN, which includes
a net gain of € 0.2 BN from the sale of the Fireman's Fund personal
insurance business to ACE Limited in the second quarter. This was
partly offset by restructuring charges of € 0.1 BN for the Fireman's
Fund reorganization. Both operating investment income and under-
writing result contributed positively.
In Russia, gross premiums were at € 196 MN - down by 26.4% on
an internal basis. This was the result of lower commercial volumes.
Operating profit
OPERATING PROFIT
€ MN
Underwriting result
Other result¹
Operating investment income (net)
Operating profit
2015
2014
2,281
2,251
3,120
3,066
202
66
5,603
5,382
1- Consists of fee and commission income/expenses, other income/expenses and restructuring charges.
Gross premiums written¹
Net income
Loss ratio in %
Expense ratio in %
Combined ratio in %
94.3
94.6
381
6,616
6,221
Basic earnings per share in €
14.56
13.71
Diluted earnings per share in €
14.55
371
13.64
2- Includes expenses for premium refunds (net) in Property-Casualty of € (240) MN (2014: € (307) MN).
72
Annual Report 2015 Allianz Group
C Group Management Report
Management Discussion and Analysis
67 Business Environment
69 Executive Summary of 2015 Results
80 Life/Health Insurance Operations
1- Total revenues comprise statutory gross premiums written in Property-Casualty and in Life/Health, operating
revenues in Asset Management, and total revenues in Corporate and Other (Banking).
6,603
(2,245)
(3,209)
6,987
1,211
(303)
812
(268)
(197)
724
312
(60)
(23)
(849)
(846)
7
(304)
(104)
(62)
(901)
(539)
(1,554)
10,196
8,848
86 Asset Management
2,281
74 Property-Casualty Insurance Operations 90 Corporate and Other
98 Balance Sheet Review
Business segment overview
Our Property-Casualty business offers a wide range of products
and services for both private and corporate clients. Our offerings
cover many insurance classes such as motor, accident/disability,
property, and general liability. We conduct business worldwide
in more than 70 countries. We are also a global leader in travel
insurance, assistance services, and credit insurance. We distrib-
ute our products via a broad network of agents, brokers, banks,
and other strategic partners, as well as through direct channels.
Key figures
KEY FIGURES PROPERTY-CASUALTY
€ MN
2015
2014
Gross premiums written
Operating profit
― Positively impacted by the net sales gain from Fireman's Fund personal
insurance business, our operating profit grew 4.1% to € 5,603 MN.
-Combined ratio slightly increased to 94.6%.
51,597
5,603
5,382
4,124
3,448
66.2
66.0
28.4
28.3
48,322
– Gross premiums written reached € 51.6 BN – up by 6.8%.
Property-Casualty Insurance Operations
73
105 Liquidity and Funding Resources
110 Reconciliations
Events after the balance sheet date
The Allianz Group was not subject to any subsequent events that sig-
nificantly impacted the Group's financial results after the balance
sheet date and before the financial statements were authorized for
issue.
Other information
CHANGES IN SEGMENT STRUCTURE
Effective 1 January 2015, the Allianz Group reorganized the structure
of its insurance activities to reflect the changes in the responsibilities
of the Board of Management. The property-casualty insurance opera-
tions of the former reportable segment USA were allocated to the
reportable segment Global Insurance Lines & Anglo Markets.
Due to further changes in the Board of Management, effective
1 September 2015, the reportable segment Growth Markets ceased to
exist. The reallocation of its former parts has led to changes in the
structure, the renaming of other reportable segments, as well as the
introduction of a new reportable segment Asia Pacific, which consists
of the insurance business in that region. The insurance business in
Central & Eastern Europe has been integrated in the previous report-
able segment German Speaking Countries, which was renamed Ger-
man Speaking Countries and Central & Eastern Europe. The insurance
business in Russia and Ukraine has been allocated to the reportable
segment Global Insurance Lines & Anglo Markets. The insurance
business in India, Middle East, and North Africa has been integrated
in the previous reportable segment Western & Southern Europe,
which was renamed to Western & Southern Europe, Middle East,
Africa, India.
Previously reported information has been adjusted to reflect this
change in the composition of the Allianz Group's reportable segments.
Additionally, some minor reallocations between the reportable seg-
ments have been made. For information on Segment reporting, please
refer to note 6 to the consolidated financial statements.
SOLVENCY II: APPROVAL OF PARTIAL INTERNAL MODEL1
In November 2015, our partial internal model was approved by the
German supervisory authority. With this approval, the uncertainty
about our future Solvency II capital requirements has been signifi-
cantly reduced- even if some uncertainty about the future capitaliza-
tion requirements of Allianz Group remains, since the future capital
requirements applicable for Global Systemically Important Insurers
(so-called G-SIIs) have not been finalized as yet. From 1 January 2016
onwards, capitalization based on our partial internal model under
Solvency II will be utilized for regulatory purposes. We are confident
that the Allianz Group will be able to meet the capital requirements
under the new regulatory regimes. For further information please
refer to the Risk and Opportunity Report starting: :: :: :D:D:D:D: page 112.
Other parts of the
Group Management Report
The following information also forms part of the Group Management
Report:
Takeover-related Statements and Explanations starting on
page 34, and the
Remuneration Report starting on > page 37.
Annual Report 2015 Allianz Group
1- From a formalistic perspective, the German Supervisory Authority deems our model to be 'partial' because
it does not cover all of our operations: some of our smaller operations report under the standard model
and others under the deduction and aggregation approach.
92 Outlook 2016
།
」ཎ༅༞
2,251
Our accident year loss ratio stood at 70.3% - a 1.2 percentage point
deterioration compared to the previous year. This was driven by an
increase in losses from natural catastrophes from an extraordinarily
low level of € 400 MN in 2014 to € 738 MN resulting in a higher impact
on our combined ratio of 1.6 percentage points compared to 0.9 per-
centage points in 2014.
279
60
Operating revenues
52,010
48,867
Claims and insurance benefits incurred (net)
(30,721)
(28,878)
Other income
and investment contracts (net)
(538)
Interest expenses
(72)
(71)
Operating impairments of investments (net)
(59)
(20)
Investment expenses
(460)
(337)
1,260
Fee and commission income
(4,933)
(3,961)
Change in unearned premiums
(234)
(602)
Premiums earned (net)
46,430
43,759
1,474
Interest and similar income
3,595
Operating income from financial assets and
liabilities carried at fair value through income (net)
(25)
6
Operating realized gains/losses (net)
252
186
3,601
(323)
Acquisition and administrative expenses (net),
excluding one-off effects from pension revaluation
(13,208)
(1,660)
(1,528)
4,124
3,448
Loss ratio² in %
Expense ratio³ in %
Combined ratio4 in %
66.2
Net income
66.0
28.3
94.6
94.3
1- For the Property-Casualty business segment, total revenues are measured based upon gross premiums
written.
2- Represents claims and insurance benefits incurred (net), divided by premiums earned (net).
3-Represents acquisition and administrative expenses (net), excluding one-off effects from pension
revaluation divided by premiums earned (net).
4- Represents the total of acquisition and administrative expenses (net), excluding one-off effects from
pension revaluation, and claims and insurance benefits incurred (net) divided by premiums earned (net).
Annual Report 2015 Allianz Group
110 Reconciliations
28.4
Income taxes
4,976
5,784
(12,400)
Fee and commission expenses
(1,367)
(1,180)
Restructuring charges
(149)
(30)
Other expenses
Operating expenses
(34)
(46,407)
(45)
(43,485)
Operating profit
5,603
5,382
Non-operating items
181
(406)
Income before income taxes
48,322
51,597
Ceded premiums written
Gross premiums written¹
Fee and commission expenses
Other expenses
Restructuring charges
Other result
2015
2014
1,474
1,260
279
60
(1,367)
Fee and commission income
Other income¹
(1,180)
(45)
(149)
(30)
202
66
1 - We recorded a € 0.2 BN net gain from the sale of the Fireman's Fund personal insurance business, which
is reported as other income.
OPERATING INVESTMENT INCOME (NET)1
€ MN
(34)
€ MN
OTHER RESULT
Expenses for premium refunds (net) were at € 240 MN, a decrease
of € 67 MN compared to last year. The change was mainly driven by
our APR business in Germany.
Excluding losses from natural catastrophes, our accident year
loss ratio deteriorated to 68.7% from 68.2% in 2014. This was the result
of a worse attritional loss ratio of our motor portfolios in the United
Kingdom and Italy as well as higher weather-related losses in Australia.
Annual Report 2015 Allianz Group
75
The following operation contributed positively to the development of
our accident year loss ratio:
Allianz Worldwide Partners: 0.3 percentage points. The accident
year loss ratio for our B2B2C business improved driven by Global
Assistance.
The following operations contributed negatively to the development
of our accident year loss ratio:
United Kingdom: 0.5 percentage points. The accident year loss
ratio was affected by severe storms and flooding in December, a
higher impact of large losses compared to last year, and an adverse
loss ratio development of our retail motor portfolio.
Australia: 0.3 percentage points. This stemmed from an increased
impact of losses from natural catastrophes and weather-related
events.
Germany: 0.3 percentage points. After the rather benign level of
claims from natural catastrophes in 2014, this year's accident year
loss ratio was affected by claims caused by storms including Mike and
Niklas in the first quarter as well as Siegfried and Thompson in the
third quarter.
AGCS excl. FFIC: 0.2 percentage points. This is predominantly the
result of higher losses from natural catastrophes.
Our run-off result amounted to € 1,924 MN, compared to € 1,385 MN in
the previous year - resulting in a higher run-off contribution of 4.1%.
The 1.0 percentage point increase compared to the 2014 run-off ratio
was the result of the strongly negative impact from reserve strength-
ening in Russia and Brazil in the previous year, a lower than prior year
reserve strengthening for the former Fireman's Fund portfolio and
positive run-off contributions from most operations in 2015.
Total expenses amounted to € 13,208 MN in 2015 compared to
€ 12,400 MN in 2014. Our expense ratio deteriorated 0.1 percentage
points to 28.4%. This was mainly driven by higher acquisition expenses.
Operating investment income (net) increased slightly by € 54 MN to
€ 3,120 MN.
Interest and similar income (net of interest expenses) was stable
at € 3,529 MN, whereby higher income from equities was broadly offset
by a lower contribution from fixed income. The average asset base¹
grew by 4.3% from € 104.6 BN to € 109.2 BN compared to the previous
year.
Operating income from financial assets and liabilities carried at
fair value through income (net) fell by € 31 MN to a loss of € 25 MN. This
was due to negative developments in the foreign currency result net
of hedges with respect to emerging market bonds denominated in
local currency.
Operating realized gains (net) increased by € 66 MN to € 252 MN.
This was driven by higher realizations in debt securities and was par-
tially offset by lower realized gains on equities, both mainly in the APR
business.
Operating impairments of investments (net) amounted to € 59 MN,
up € 39 MN largely due to higher impairments on equities in our APR
business.
2015
1- Consists of the underwriting-related part (aggregate policy reserves and other insurance reserves) of
"change in reserves for insurance and investment contracts (net)". For further information, please refer
to note 34 to the consolidated financial statements.
2014
(net of interest expenses)
76
Annual Report 2015 Allianz Group
1-Including French health business, excluding fair value option and trading.
C Group Management Report
Management Discussion and Analysis
67 Business Environment
69 Executive Summary of 2015 Results
80 Life/Health Insurance Operations
86 Asset Management
2-Refers to policyholder participation, mainly from APR (accident insurance with premium refunds) busi-
ness, and consists of the investment-related part of "change in reserves for insurance and investment
contracts (net)". For further information, please refer to note 34 to the consolidated financial statements.
74 Property-Casualty Insurance Operations 90 Corporate and Other
98 Balance Sheet Review
105 Liquidity and Funding Resources
Net income
Net income increased by € 676 MN to € 4,124 MN compared to 2014. We
recorded lower one-off expenses from pension revaluation and higher
non-operating realized gains.
PROPERTY-CASUALTY BUSINESS SEGMENT INFORMATION
€ MN
2015
2014
92 Outlook 2016
1 - The operating investment income (net) for our Property-Casualty business segment consists of the
operating investment result - as shown in note 6 to the consolidated financial statements-and expenses
for premium refunds (net) (policyholder participation) as shown in note 34 to the consolidated financial
statements.
Operating investment income (net)
3,066
3,529
3,525
Operating income from financial assets and
liabilities carried at fair value through income (net)
(25)
6
Operating realized gains (net)
252
186
Operating impairments of investments (net)
(59)
(20)
Investment expenses
(337)
(323)
Expenses for premium refunds (net)²
(240)
(307)
3,120
Interest and similar income
Change in reserves for insurance
284
2,846
27.6
63.1
63.3
91.1
90.9
Western & Southern Europe, Middle East, Africa and India4
34.7
33.6
62.6
60.4
97.4
93.9
Middle East
44.2
36.5
48.4
56.3
92.6
92.7
28.0
Africa
Spain
Latin America
102.9
36.5
37.4
79.7
79.2
116.1
116.6
23.0
23.6
82.7
72.9
105.7
96.5
21.1
21.1
68.8
71.6
89.9
92.7
Portugal
35.0
35.3
51.1
27.5
26.6
55.0
56.5
82.5
83.1
France
Italy³
26.3
25.9
65.6
66.2
91.9
92.1
German Speaking Countries and Central & Eastern Europe
_13
13
_13
13
95.9
96.3
66.8
67.6
53.8
86.1
89.1
22.6
23.1
75.1
79.0
97.8
102.2
102.6
30.0
67.6
66.9
97.6
96.2
Greece
Turkey
Benelux
28.7
29.1
29.3
13
74.8
28.0
94.6
96.2
34.4
85.6
120.0
29.2
27.5
55.6
67.4
84.7
94.9
31.6
29.5
65.9
73.1
97.6
102.6
29.7
29.8
69.7
48.8
69.7
24.9
Asia Pacific
29.7
29.5
66.8
67.0
96.5
96.5
52.6
57.1
62.3
56.4
114.9
113.5
42.9
41.3
98.7
70.6
141.6
111.9
26.5
53.3
78.6
83.2
86.1
124.8
Fireman's Fund
27.9
27.8
65.2
66.2
93.1
94.0
AGCS excl. Fireman's Fund
27.9
31.0
65.2
72.0
93.1
102.9
Allianz Global Corporate & Specialty5
Iberia & Latin America
28.0
38.7
Reinsurance PC6
89.5
88.6
Global Insurance Lines & Anglo Markets⁹
Ukraine
Russia
Australia8
United States?
Ireland
United Kingdom
Credit Insurance
San Francisco RE
74.6
28.0
60.5
60.6
88.6
89.2
Reinsurance PC excl. San Francisco RE
28.0
28.9
60.5
60.6
28.6
Allianz Worldwide Partners10
13
28.1
(1,276)
(1,194)
(526)
(382)
Administrative and other expenses
(1,695)
(1,610) (1,077)
(1,091)
(454)
(376)
(164)
(144)
Expenses
Technical margin
(6,610)
(6,522) (4,190)
(4,426)
(1,730)
(1,570)
(3,336)
(690)
(3,113)
(4,915)
Loadings and fees
5,667
5,285
3,187
3,091
1,683
1,525
797
668
Investment margin (net of policyholder participation)
3,915
2,973
3,794
2,876
62
43
60
54
Acquisition expenses and commissions
(4,912)
(526)
1,156
1,203
Amortization, unlocking and true-up of DAC
(2,073)
(1,516)
(1,515)
(1,119)
(431)
(299)
(128)
(98)
Impact of change in DAC²
(332)
388
(371)
296
(59)
75
97
18
Operating profit
116
224
374
372
425
532
621
587
109
84
Operating profit before change in DAC
4,128
2,939
363
3,216
636
585
276
281
Capitalization of DAC
1,741
1,904
1,144
1,414
2,073
Other
446
326
71.5
99.5
104.3
32.6
33.0
60.7
62.5
93.3
95.5
25.4
25.9
69.0
68.2
94.4
94.0
23.2
23.7
67.8
65.8
64.0
91.0
32.8
Slovakia
26.5
56.9
64.2
85.0
90.7
Czech Republic
40.3
40.9
62.4
60.6
102.7
101.5
Hungary
26.3
32.2
53.2
51.7
79.5
83.8
35.5
89.5
25.9
25.1
86 Asset Management
80 Life/Health Insurance Operations
74 Property-Casualty Insurance Operations
69 Executive Summary of 2015 Results
67 Business Environment
Management Discussion and Analysis
C Group Management Report
Loadings from reserves
1,143
1,091
976
958
100
86
66
47
Unit-linked management fees
772
628
90 Corporate and Other
92 Outlook 2016
98 Balance Sheet Review
105 Liquidity and Funding Resources
65.7
66.8
91.5
91.9
Poland
Central & Eastern Europe²
Austria
Switzerland
Germany
266
2014
2014
2015
2014
2015
Expense ratio
Loss ratio
110 Reconciliations
Combined ratio
%
2015
Consolidation and Other11,12
93.5
95.2
(544)
(309)
Change in unearned premiums
388
(630)
(747)
Ceded premiums written
(1,516)
(2,073)
(332)
67,331
66,903
Statutory premiums²
1,904
1,741
2014
2015
2014
2015
€ MN
Statutory premiums (net)
LIFE/HEALTH BUSINESS SEGMENT INFORMATION1
65,847
Deposits from insurance and investment contracts
Premiums earned (net)
Investment margin
628
772
Unit-linked management fees
1,091
1,143
Loadings from reserves
3,566
3,751
Loadings from premiums
5,285
5,667
Loadings and fees
OPERATING PROFIT BY LINES OF BUSINESS
The impact of change in DAC turned from € 388 MN to minus € 332 MN.
This was largely due to higher DAC amortization associated with our
variable annuity business in the United States, loss recognition in
South Korea in the second and third quarters of 2015, and a lower
capitalization of DAC, due to a decline in the fixed-indexed annuity
business in the United States.
24,514
24,215
(41,643)
(41,632)
66,157
110 Reconciliations
105 Liquidity and Funding Resources
98 Balance Sheet Review
80
(8,740)
(6,002)
2,973
(677)
(903)
98
Investment margin 2.3 in basis points
3,915
Investment margin
(7,486)
Policyholder participation
(9,194)
Technical interest
258
174
Other¹
(1,013)
Investment expenses
(1,199)
Operating impairments of investments (net)
3,204
(107)
1- Other comprises the delta of out-of-scope entities, which are added here with their respective operating
profit and different line item definitions compared to the financial statements, such as interest paid on
deposits for reinsurance, fee and commission income and expenses excluding unit-linked management
fees.
2- Investment margin divided by the average of current previous year-end aggregate policy reserves.
3-Yields are pro-rata.
Our investment margin rose by € 942 MN to € 3,915 MN, or by 18 basis
points as a percentage of reserves. The increase was mainly driven by
higher realizations on both debt and equity investments, predomi-
nantly in Germany. It was also supported by higher interest income
largely from debt investments. As the volume effects of a higher asset
base were mostly offset by lower yields, this higher interest was pri-
marily due to favorable foreign currency translation effects, arising
mainly in the United States. These increases were partially offset by
a negative foreign currency result on partially hedged emerging mar-
kets bonds and unfavorable impacts from financial derivatives to
lengthen duration. Higher impairments on equities - mainly in the
German life business - as a result of volatile equity markets during
the year also contributed negatively.
The policyholder participation ratio decreased slightly, driven by
a drop in the policyholder participation in Italy and France.
92 Outlook 2016
Amortization, unlocking and true-up of DAC
Impact of change in DAC
Capitalization of DAC
€ MN
IMPACT OF CHANGE IN DAC
74 Property-Casualty Insurance Operations 90 Corporate and Other
80 Life/Health Insurance Operations
86 Asset Management
69 Executive Summary of 2015 Results
67 Business Environment
(net of policyholder participation)
Management Discussion and Analysis
Annual Report 2015 Allianz Group
82
Impact of change in DAC (deferred acquisition costs) includes effects
of change in DAC, unearned revenue reserves (URR) and value of busi-
ness acquired (VOBA). It represents the net impact of deferral and
amortization of acquisition costs and front-end loadings on operating
profit and therefore deviates from the IFRS financial statements.
Impact of change in DAC
Our technical margin declined by € 47 MN to € 1,156 MN. This was driven
by additional reserving for an annuity take-up option in Italy and
increased provisions for unclaimed contracts in France. It was partly
offset by a favorable disability result in Switzerland.
Technical margin comprises risk result (risk premiums less benefits
in excess of reserves less policyholder participation), lapse result
(surrender charges and commission clawbacks) and reinsurance
result.
Technical margin
Administrative expenses increased predominantly because of
adverse foreign currency translation effects from our businesses in
the United States and in Asia Pacific.
Our expenses were up by € 87 MN to € 6,610 MN. Acquisition expenses
were flat, as lower acquisition expenses driven by reduced fixed-
indexed annuity sales in the United States and lower single premium
business in Germany were offset by higher acquisition expenses
mainly due to sales growth in Asia Pacific and Italy.
C Group Management Report
(108)
3,915
Expenses
83
Annual Report 2015 Allianz Group
2,320
2,621
(996)
(1,169)
3,316
3,790
(12)
(6)
Non-operating items
3,327
3,796
Operating profit
(1,516)
(2,073)
Amortization, unlocking and true-up of DAC
4- Represents operating profit divided by the average of the current and previous year-end net reserves,
where net reserves equal reserves for loss and loss adjustment expenses, reserves for insurance and
investment contracts, and financial liabilities for unit-linked contracts less reinsurance assets.
2- Statutory premiums are gross premiums written from sales of life and health insurance policies as well
as gross receipts from sales of unit-linked and other investment-oriented products, in accordance with
the statutory accounting practices applicable in the insurer's home jurisdiction.
3-Impact of change in DAC includes effects of change in DAC, URR, and VOBA. It represents the net impact
of deferral and amortization of acquisition costs and front-end loadings on operating profit and therefore
deviates from the financial statements.
83
1-Profit sources are based on in-scope operating entities with coverage of 96.5% of statutory premiums.
Operating profit from operating entities that are not in scope is included in investment margin.
LIFE/HEALTH OPERATING PROFIT BY PROFIT SOURCES AND LINES OF BUSINESS¹
Life/Health
1,440
1,582
1,868
1,885
3,566
3,751
Loadings from premiums
2014
2015
2014
2015
2014
2015
2014
2015
Unit-linked
without guarantee
& health
Protection
Guaranteed
savings & annuities
€ MN
65
67
Margin on reserves4 in basis points
Technical margin
2,369
2,846
Operating profit
Unit-linked without guarantee
Protection & health
Guaranteed savings & annuities
2014
2015
(1,610)
(1,695)
Administrative and other expenses
(4,912)
(4,915)
Acquisition expenses and commissions
€ MN
OPERATING PROFIT BY LINES OF BUSINESS
(6,522)
(6,610)
1,156
1,203
577
661
Income taxes
Net income
Income before income taxes
Our net income rose by € 301 MN to € 2,621 MN, in line with our operating
performance. We recorded higher non-operating income stemming
primarily from increased realizations on equity investments in Italy.
This was offset by the impairment of the goodwill allocated to the cash
generating unit Asia Pacific, mainly driven by steadily decreasing and
persisting low interest rates in South Korea. The slight increase in the
effective tax rate contributed negatively.
Net income
In 2015, the margin on reserves was up from 65 to 67 basis points,
driven mainly by the increased investment margin.
MARGIN ON RESERVES
The operating profit increase in the guaranteed savings & annuities
line of business was largely driven by a higher investment margin in
Germany and a higher investment spread margin in the United States.
Operating profit in the protection & health line of business declined,
mainly because of loss recognition in South Korea. Operating profit
in the unit-linked without guarantee line of business rose, primarily
due to higher fees in Italy.
1,904
1,741
2,973
Capitalization of DAC
(332)
Impact of change in DAC³
3,327
3,796
2,939
4,128
Operating profit before change in DAC
298
373
388
Interest expenses
6,459
Operating realized gains/losses (net)
92 Outlook 2016
74 Property-Casualty Insurance Operations 90 Corporate and Other
80 Life/Health Insurance Operations
86 Asset Management
69 Executive Summary of 2015 Results
67 Business Environment
Management Discussion and Analysis
C Group Management Report
Annual Report 2015 Allianz Group
80
4- Asia Pacific refers to Asian-Pacific countries.
3- In the following section, we comment on the development of our statutory gross premiums written on
an internal basis, i.e. adjusted for foreign currency translation and (de-)consolidation effects, in order to
provide more comparable information.
In Asia Pacific4, statutory premiums increased to € 6,769 MN, up
5.8% on an internal basis. This was mainly because of higher sales of
single premium unit-linked products distributed via bancassurance
in Taiwan.
In France, statutory premiums dropped to € 8,053 MN. The decrease
of 2.3% on an internal basis was mainly due to a decline in our tradi-
tional individual life and group pension business, with growth in our
group protection and health business partly compensating for the
negative development.
Statutory premiums in Italy went up to € 11,936 MN, representing
internal growth of 5.3%. Statutory premiums benefited from strong
growth in the unit-linked business. Along with a decrease in tradi-
tional life business, the share of unit-linked premiums of total statu-
tory premiums increased significantly to 75% compared to 63% in 2014.
In the United States, statutory premiums amounted to
€ 10,475 MN, down 26.1% on an internal basis. We experienced lower
fixed-indexed annuity sales due to both the impact of pricing changes
made in the first half of 2015, in response to the low interest rate
environment, as well as market developments. We also recorded
exceptionally high premiums in the second and third quarters of 2014
resulting from the introduction of an innovative index strategy.
2- Statutory premiums are gross premiums written from sales of life and health insurance policies as well
as gross receipts from sales of unit-linked and other investment-oriented products, in accordance with
the statutory accounting practices applicable in the insurer's home jurisdiction.
1- Represents operating profit divided by the average of the current and previous year-end net reserves,
where net reserves equal reserves for loss and loss adjustment expenses, reserves for insurance and
investment contracts, and financial liabilities for unit-linked contracts less reinsurance assets.
In the German life business, we recorded statutory premiums of
€ 17,742 MN. The drop of 6.7% on an internal basis was due to lower
single premium business, which saw reduced sales of traditional life
products - which include long-term interest rate guarantees. This
was partly compensated for by growth in the regular premium busi-
ness. Statutory premiums in the German health business went up to
€ 3,257 MN. The rise of 0.4% on an internal basis resulted from premium
rate increases in comprehensive insurance in January 2015.
On an internal basis³, statutory premiums decreased by € 3,276 MN
- or 4.9% - to € 64,055 MN. As a result of changes in our product strategy,
premiums shifted towards unit-linked and capital-efficient products.
Decreased sales of traditional products in Germany and Italy more
than offset the premium growth in the unit-linked business in Italy
and Taiwan. In addition, we recorded lower premiums from the fixed-
indexed annuity business in the United States.
98 Balance Sheet Review
On a nominal basis, we recorded statutory premiums of € 66,903 MN,
down by 0.6%. This includes favorable foreign currency translation
effects of € 2,848 MN.
105 Liquidity and Funding Resources
Statutory premiums in Switzerland totaled € 1,842 MN. On an
internal basis, this represented a decrease of 2.3%, largely due to lower
single premium business in group life.
Expenses
Loadings and fees
Investment margin
€ MN
OPERATING PROFIT BY PROFIT SOURCES
The objective of the Life/Health operating profit sources analysis is to
explain movements in IFRS results by analyzing underlying drivers of
performance on a Life/Health business segment consolidated basis.
OPERATING PROFIT BY PROFIT SOURCES²
Operating profit
& health 10.7 [9.9]
Protection
without guarantee 24.3 [18.7]
Unit-linked
PRESENT VALUE OF NEW BUSINESS PREMIUMS (PVNBP) BY LINES OF BUSINESS
Year 2015 [2014] in %
PVNBP fell by € 318 MN to € 60,614 MN. This was driven by a drop in our
guaranteed savings & annuities line of business, primarily due to
decreased fixed-indexed annuity sales in the United States and lower
sales of traditional business with high guarantees - particularly in
Germany and Italy. The PVNBP share of unit-linked without guarantee
line of business rose to 24.3%.
Present value of new business premiums
(PVNBP) 1,2
Premiums earned (net) were down by € 300 MN to € 24,215 MN. This was
mainly due to lower business from traditional life products in Ger-
many. Favorable foreign currency translation effects from some of the
major currencies partly compensated for the decrease.
Premiums earned (net)
Statutory premiums in Central & Eastern Europe amounted to
€ 818 MN, down 4.7% on an internal basis. We recorded lower regular
premiums in the Czech Republic and lower single premiums in Hun-
gary. A stronger regular premium business in Bulgaria partly com-
pensated for this.
Statutory premiums in Spain went up to € 1,375 MN. The increase
of 9.2% on an internal basis was mainly driven by traditional products
distributed via the bancassurance channel.
In Benelux, statutory premiums stood at € 2,239 MN- a decline of
11.1% on an internal basis. This mainly resulted from lower tradi-
tional life product sales and was partially offset by an increase in the
sale of single premium unit-linked products.
110 Reconciliations
Statutory premiums²,3
65
67
28.4
66.0
66.2
94.3
94.6
the business of Allianz Worldwide Care and the reinsurance business of Allianz Global Automotive, in
addition to income and expenses from a management holding.
9- Includes € 8 MN operating loss and € 3 MN operating profit for 2015 and 2014, respectively, from AGF UK.
10-The reportable segment Allianz Worldwide Partners includes the Global Assistance business as well as
8-Effective 1 January 2015, the Allianz Group acquired the Property-Casualty insurance business of the
Territory Insurance Office (TIO Business), Darwin.
Total
31.0
34.6
65.6
62.7
96.6
97.4
30.6
32.5
64.5
61.1
28.3
11- Represents elimination of transactions between Allianz Group companies in different geographic
regions.
12- The 2014 analysis of the Allianz Group's asbestos risks resulted in a reduction of reserves and a positive
run-off result of € 86 MN, as reflected in the operating profit for 2014.
13-Presentation not meaningful.
Annual Report 2015 - Allianz Group
Margin on reserves (BPS)1
2,320
2,621
Net income
3,327
3,796
67,331
66,903
2014
Technical margin
Impact of change in DAC
Operating profit
2015
€ MN
KEY FIGURES LIFE/HEALTH
Key figures
Allianz offers a broad range of life, health, savings, and invest-
ment-oriented products, including individual and group life
insurance contracts. Via our distribution channels - mainly tied
agents, brokers, and bank partnerships - we offer life and health
products to both retail and corporate clients. As one of the world-
wide market leaders in life business, we serve customers in more
than 45 countries.
Business segment overview
– Operating profit increased 14.1% to € 3,796 MN, driven by a higher investment
margin.
– Statutory premiums stable at € 66.9 BN: continued targeted shift towards
unit-linked and capital-efficient products.
Life/Health Insurance Operations
79
Statutory premiums
Operating profit
2015
2014
5,667
(4,915)
Acquisition expenses and commissions
Administrative and other expenses
Expenses
2014
2015
€ MN
EXPENSES
Expenses
Expenses include acquisition expenses and commissions (excluding
commission clawbacks, which are allocated to the technical margin)
as well as administrative and other expenses.
The investment margin is defined as IFRS investment income net of
expenses, less interest credited to IFRS reserves and policyholder par-
ticipation (including policyholder participation beyond contractual
and regulatory requirements mainly for the German life business).
Investment margin
The growth in unit-linked management fees of € 144 MN was
largely due to higher assets under management in France and Italy
as well as increased performance fees in Italy.
The increase in loadings from reserves of € 52 MN was mainly
driven by a higher reserve volume, particularly in Asia Pacific.
premium business in Germany. Loadings from premiums as a per-
centage of statutory premiums rose by 31 basis points, largely
because of a higher proportion of regular premiums in Germany.
81
Annual Report 2015 Allianz Group
The growth in loadings from premiums of € 185 MN was primarily
due to higher sales in Asia Pacific, the positive impact of lower volumes
of products with sales inducements in the United States, favorable
foreign currency translation effects, and increased unit-linked pre-
miums in Italy and France. This was partially offset by reduced single
Our loadings and fees were up by € 381 MN to € 5,667 MN.
2- Prior year figures changed in order to reflect the roll out of profit source reporting to Malaysia.
1-PVNBP before non-controlling interests.
3-Unit-linked management fees, excluding asset management fees, divided by unit-linked reserves.
(4,912)
(1,695)
(1,610)
(6,610)
(1,367)
(2,050)
liabilities carried at fair value through income (net)
Operating income from financial assets and
17,307
18,331
Interest and similar income
2014
2015
2-Yields are pro-rata.
1- PVNBP before non-controlling interests.
2-Aggregate policy reserves and unit-linked reserves.
3-Yields are pro-rata.
INVESTMENT MARGIN
(0.4)
(0.3)
as % of average reserves2,3
Administrative and other expenses
(8.1)
(8.1)
Acquisition expenses and commissions
as % of PVNBP1
(6,522)
€ MN
3,796
1-Aggregate policy reserves and unit-linked reserves.
0.6
Loadings from premiums
2014
2015
€ MN
LOADINGS AND FEES
Loadings and fees include premium and reserve based fees, unit-
linked management fees, and policyholder participation in expenses.
Loadings and fees
Our operating profit rose by € 468 MN to € 3,796 MN. This mainly resulted
from a higher investment margin in Germany, positive foreign cur-
rency translation effects, a higher investment spread margin in the
United States, and increased unit-linked management fees in Italy
and France. It was partly offset by loss recognition in South Korea
amounting to € 244 MN.
3,327
3,796
388
(332)
1,203
1,156
(6,522)
(6,610)
2,973
3,915
5,285
3,751
3,566
Loadings from reserves
1,143
of average unit-linked reserves 2,3
& annuities 65.0 [71.3]
Guaranteed savings
Unit-linked management fees as %
0.2
0.2
of average reserves¹.2
Loadings from reserves as %
33
0.6
5.3
of statutory premiums
Loadings from premiums as %
5,285
5,667
Loadings and fees
628
772
Unit-linked management fees
1,091
5.6
3,327
270
2,369
451
311
385
311
145
106
2
1
20
16
Other4
Global Life
Asia Pacific
6
5
China
6
249
71
423
203
187
20
18
145
147
Thailand
750
622
664
622
733
611
87
254
5
13
11
43
Consolidation?
Total
(666)
66,903
(1,120)
67,331
(666)
(1,120)
(10)
(17)
64,055
67,331
24,215
24,514
3,796
3,327
(30)
105
(83)
1,910
(28)
2
_ 5
5
4
5
4
447
3
1
_ 5
6,774
5,736
6,072
5,736
2,172
1
423
451
Malaysia
448
47
115
14
211
76
469
27
15
236
71
Asian-Pacific countries
6,769
5,732
6,067
494
589
416
589
537
363
537
456
398
38
Russia
5,732
39
53
52
38
49
9
Global Insurance Lines & Anglo Markets
634
52
67
2,170
(83)
6
2
8
3
Indonesia
701
700
662
700
296
285
74
61
488
478
293
2,026
2,376
2,026
104
(30)
43
South Korea
1,704
1,646
1,527
1,909
1,646
509
(244)
(51)
(202)
(48)
Taiwan
2,706
486
65
1- Statutory premiums are gross premiums written from sales of life and health insurance policies as well as
gross receipts from sales of unit-linked and other investment-oriented products, in accordance with the
statutory accounting practices applicable in the insurer's home jurisdiction.
2- Represents operating profit (loss) divided by the average of the current and previous year-end net reserves,
where net reserves equal reserves for loss and loss adjustment expenses, reserves for insurance and invest-
ment contracts, and financial liabilities for unit-linked contracts less reinsurance assets.
The share of third-party assets between mutual funds and sepa-
rate accounts changed in favor of separate accounts, compared to the
end of 2014 with mutual funds at 58.3% and separate accounts at
41.7%.
THIRD-PARTY ASSETS UNDER MANAGEMENT BY REGION/COUNTRY¹
as of 31 December 2015 [31 December 2014] in %
Asia-Pacific 11.3 [10.8]
America² 56.0 [60.0]
Europe 32.7 [29.2]
1- Mutual funds are investment vehicles (in the United States, investment companies subject to the U.S.
code; in Germany, vehicles subject to the "Standard-Anlagerichtlinien des Fonds" Investmentgesetz)
where the money of several individual investors is pooled into one account to be managed by the asset
manager, e.g. open-end funds, closed-end funds. Separate accounts are investment vehicles where
the money of a single investor is directly managed by the asset manager in a separate dedicated account
(e.g. public or private institutions, high net worth individuals, and corporates).
Annual Report 2015 - Allianz Group
1- Based on the location of the asset management company.
2- "America" consists of the United States, Canada and Brazil (€ 699 BN, € 14 BN and € 1 BN third-party AuM
as of 31 December 2015, respectively).
87
The regional allocation of third-party AuM shifted in favor of Europe Operating revenues
and - to a lesser extent - the Asia-Pacific region. This was mainly due
to strong third-party net outflows in the United States and third-party
net inflows at AllianzGI in Europe and was supported by market
effects. It was only partially offset by positive foreign currency trans-
lation effects.
THREE-YEAR ROLLING INVESTMENT PERFORMANCE OF PIMCO AND ALLIANZGI¹
as of 31 December in %
Based on the asset class split on 31 December 2015, the third-
party AuM share of fixed income amounted to 74.0%, reflecting the
high share of fixed income assets at PIMCO. 11.8% in equity assets was
due to the notable equity share at AllianzGI. Multi-assets and other
accounted for 10.5% and 3.7%, respectively.
At the beginning of 2015 we enhanced our asset class reporting
from a legal entity view to a more granular asset class split composed
of fixed income, equities, multi-assets, and other. Furthermore, we
replaced the retail and institutional asset split by an investment
vehicle view, comprised of mutual funds and separate accounts.¹
As of 31 December 2015, the share of third-party AuM by business
unit was 77.3% attributable to PIMCO and 22.7% attributable to
AllianzGI.
In the following section we focus on the development of third-party
assets under management.
+125
176
1514 515
1,763
Fixed income
0
Equities
100
Multi-assets Other Changes
1- Fixed income, equities and other definitions based on legal entity view as of 31 December 2014. There-
fore, 2014 and 2015 figures are not comparable.
2- From the first quarter of 2015, net flows represent the sum of new client assets, additional contributions
from existing clients - including dividend reinvestment - withdrawals of assets from, and termination
of, client accounts and distributions to investors. Reinvested dividends amounted to € 18 BN.
3- From the first quarter of 2015, Market and Other represents current income earned on, and changes in
the fair value of, securities held in client accounts. It also includes dividends from net investment income
1,000
1,500
2,000
and from net realized capital gains to investors of open ended mutual funds and of closed end funds.
4- Multi-assets is a combination of several asset classes (e.g. bonds, stocks, cash and real property) used as
an investment. Multi-assets class investments increase the diversification of an overall portfolio by dis-
tributing investments throughout several asset classes.
5- Other is composed of other asset classes than equity, fixed income and multi-assets, e.g. money markets,
commodities, real estate investment trusts, infrastructure investments, private equity investments,
hedge funds, etc.
500
(13)
80
AllianzGl
70
(30).
2013
2014
2015
1 - Three-year rolling investment performance reflects the mandate-based and volume-weighted three-
year investment success of all third-party assets that are managed by Allianz Asset Management's
portfolio-management units. For separate accounts and mutual funds, the investment success (valued
on the basis of the closing prices) is compared with the investment success prior to cost deduction of
the respective benchmark, based on various metrics. For some mutual funds, the investment success,
reduced by fees, is compared with the investment success of the median of the respective Morningstar
peer group (a position in the first and second quartile is equivalent to outperformance).
Our operating revenues increased by € 92 MN - or 1.4% – to € 6,479 MN.
Before the positive effect from foreign currency translation, which
was mainly driven by the sharp depreciation of the Euro against the
U.S. Dollar, operating revenues decreased by 11.4% on an internal basis¹.
Net fee and commission income went up 1.7% to € 6,488 MN. How-
ever, excluding the positive effect from foreign currency translation,
this was a decrease of 11.7%. The decrease was mostly due to a drop
of 16.3% in our third-party AuM-driven revenues. This was mainly due
to lower average third-party AuM, which declined by 15.9% before
foreign currency translation effects. The reduced third-party AuM
primarily resulted from third-party net outflows at PIMCO and a nega-
tive market return especially impacting fixed income assets. More-
over, third-party AuM-driven revenues were also impacted - albeit to
a lesser extent - by a decline in our third-party AuM-driven margin.
This was primarily driven by a lower share of mutual funds in our
average third-party AuM. Our performance fees grew by € 331 MN to
€ 607 MN. The increase was € 253 MN before foreign currency trans-
lation effects and can mainly be attributed to carried interest from
the redemption of a large private fund at PIMCO. A strong growth in
performance fees at AllianzGI in the United States and Europe also
contributed to this development.
Our income from financial assets and liabilities carried at fair
value through income (net) dropped by € 12 MN, mainly because of
foreign currency translation and valuation effects.
The overall three-year rolling investment performance of our Asset
Management business decreased, but remained on a high level, with
69% of third-party assets outperforming their respective benchmarks
(31 December 2014: 84%). The decrease was mainly driven by PIMCO's
rolling investment performance, which was impacted by strong
quarters of 2012 rolling off and more challenging quarters of 2015 roll-
ing in. 69% of PIMCO third-party assets outperformed their respective
benchmarks. AllianzGI improved significantly with 70% of third-party
assets outperforming their respective benchmarks.
88
Annual Report 2015 Allianz Group
1- Operating revenues adjusted for foreign currency translation and (de-)consolidation effects. In 2015, the
average exchange rate of the U.S. Dollar to Euro was 1.11 (2014: 1.33).
258
Outperforming third-party assets under management
Underperforming third-party assets under management
2015
2014
2013
60
90
88
40
69
55
55
PIMCO
20
(10)
(12)
(31)
(45)
-(45)
(20)
(40)
0
596
(34)
1,801
2015
2014
6,479
6,388
2,297
2,603
64.5
59.2
1,449
1,621
as of 31 December in € BN
1,763
1,801
thereof: Third-party assets under management
as of 31 December in € BN
Cost-income ratio in %
Operating revenues
Operating profit
€ MN
KEY FIGURES ASSET MANAGEMENT
3- Statutory premiums adjusted for foreign currency translation and (de-)consolidation effects.
4- Includes income and expense items from management holdings, smaller operating entities and consoli-
dations between countries in these regions.
5-Presentation not meaningful.
6- Includes € 34 MN operating profit for 2015 from an associated entity in Asia Pacific.
7-Represents elimination of transactions between Allianz Group companies in different geographic regions.
Annual Report 2015 - Allianz Group
85
1,276
Asset Management
- Cost-income ratio rose to 64.5%.
– Third-party net outflows substantially reduced in 2015, amounting to € 107 BN.
– Total assets under management at € 1,763 BN – a decline of € 38 BN.
-
-
Business segment overview
Allianz offers asset management products and services for third-
party investors and the Allianz Group's insurance operations.
We serve a wide range of retail and institutional clients world-
wide with investment and distribution capacities in all major
markets. Based on total assets under management, we are one
of the largest asset managers in the world that manage third-
party assets with active investment strategies.
Key figures
- Operating profit down 11.8% to € 2,297 MN.
(116)
1,313
Total assets under management
DEVELOPMENT OF TOTAL ASSETS UNDER MANAGEMENT
€ BN
Total AuM
(as of 31/12/2014)
Net flows²
Market and Other³
Consolidation, deconsoli-
dation and other adjustments
F/X effects
Total AuM
(as of 31/12/2015)
1,385
1,572¹
110 Reconciliations
2291 01
105 Liquidity and Funding Resources
98 Balance Sheet Review
74 Property-Casualty Insurance Operations 90 Corporate and Other
86 Asset Management
Assets under management
Total assets under management decreased by € 38 BN to € 1,763 BN,
mainly driven by third-party assets under management (AuM) net
outflows and negative effects from Market and Other, but largely offset
by favorable effects from foreign currency translation. Of total AuM,
€ 1,276 BN related to third-party AuM and € 487 BN to Allianz Group
assets.
In 2015, we recorded total AuM net outflows of € 116 BN. Net out-
flows from third-party AuM amounted to € 107 BN. This was strongly
driven by PIMCO in the United States, primarily from traditional fixed
income products. However, since the end of 2014, third-party AuM net
outflows at PIMCO have significantly receded with each quarter,
amounting to only € 11 BN in the fourth quarter of 2015. Allianz Global
Investors (AllianzGI) recorded strong third-party net inflows in 2015.
These were primarily due to net inflows in Europe, continuing
AllianzGI's trend of third-party net inflows for the twelfth consecutive
quarter.
Unfavorable effects from Market and Other, amounting to
€ 34 BN, also contributed to the decrease of total AuM. Negative effects
of € 41 BN at PIMCO - mainly from fixed income assets - were only
partially offset by positive effects at AllianzGI of € 8 BN.
We recorded a decline in total AuM of € 13 BN, reported as con-
solidation, deconsolidation and other adjustments. This was mainly
due to an adjustment of third-party AuM related to a joint venture
and a correction in reporting of notional accounts.
Mainly as a result of the depreciation of the Euro against the U.S.
Dollar, which declined from 1.21 at the beginning of the year to 1.09 on
31 December 2015, we recorded favorable foreign currency trans-
lation effects of € 125 BN.
Net income
86
Annual Report 2015 Allianz Group
C Group Management Report
Management Discussion and Analysis
67 Business Environment
69 Executive Summary of 2015 Results
80 Life/Health Insurance Operations
92 Outlook 2016
86
Reinsurance LH
201
87
185
88
73
27
21
469
193
374
247
252
247
252
199
210
Slovakia
185
194
Poland
33
37
66
81
Central & Eastern Europe
818
857
817
857
520
516
129
118
377
358
34
325
38
Czech Republic
343
332
Other4
148
134
148
12
134
118
40
33
_ 5
German Speaking Countries
and Central & Eastern Europe
123
13
42
44
114
147
113
147
67
74
15
15
249
253
Hungary
115
138
116
138
303
317
405
399
Life/Health insurance operations by reportable segments
LIFE/HEALTH INSURANCE OPERATIONS BY REPORTABLE SEGMENTS
€ MN
Statutory premiums¹
Premiums earned (net) Operating profit (loss) Margin on reserves² (BPS)
internal³
110 Reconciliations
2015
2015
2014
2015
2014
2015
2014
2014
105 Liquidity and Funding Resources
98 Balance Sheet Review
92 Outlook 2016
577
661
373
298
1-Profit sources are based on in-scope operating entities with coverage of 96.5% of statutory premiums.
Operating profit from operating entities that are not in scope is included in investment margin.
2- Impact of change in DAC includes effects of change in DAC, URR, and VOBA. It represents the net impact
of deferral and amortization of acquisition costs and front-end loadings on operating profit and therefore
deviates from the financial statements.
84
Annual Report 2015 Allianz Group
C Group Management Report
Management Discussion and Analysis
67 Business Environment
69 Executive Summary of 2015 Results
80 Life/Health Insurance Operations
86 Asset Management
74 Property-Casualty Insurance Operations 90 Corporate and Other
2015
2014
Germany Life
17,742
77
Switzerland
1,842
1,655
1,617
1,655
501
519
75
83
50
62
Austria
399
405
75
24,058
209
3,244
19,014
17,742
19,014
10,520
11,468
1,257
1,079
60
55
Germany Health
3,257
3,245
3,257
3,245
3,257
214
25,176
80
25,176
1,259
1,375
1,259
440
437
196
1,375
191
257
Portugal
283
247
283
247
241
Spain
53
64
(95)
_ 5
176
212
382
352
Western & Southern Europe, Middle East,
Africa and India
23,591
23,266
23,608
23,266
4,587
4,458
1,062
815
86
106
83
22
643
231
229
235
256
USA
653
10,475
8,753
11,840
23,833
984
841
656
11,840
1,844
2,040
1,844
351
374
Latin America
380
338
382
338
127
123
14
16
127
177
Iberia & Latin America
2,037
21
186
1,193
72
8,241
8,241
3,183
3,100
550
455
8,053
64
Benelux
Turkey
2,239
2,518
2,239
2,518
56
France
32
44
15,115
16,073
1,707
1,527
65
63
Italy
11,936
11,332
11,936
11,332
449
478
268
173
522
520
8,053
132
68
57
29
28
5
Middle East
215
176
191
176
170
121
132
32
༢༠ ༠ ཟླ
57
68
85
(3)
1,026
Africa
854
854
179
148
54
Greece
985
88
95
51
88
55
95
A
TO OUR INVESTORS
Following the change in the E.U. Transparency Directive, Allianz Group adjusted its reporting
in 2016, including the discontinuation of the First Quarter and Third Quarter Interim Reports.
We have also taken this opportunity to enhance transparency, streamline our disclosures, and
remove redundancies wherever possible.
Further Information
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
The consolidated financial statements are presented in millions of Euros (€ MN) unless other-
wise stated. Due to rounding, numbers presented may not add up precisely to the totals
provided and percentages may not precisely reflect the absolute figures.
146 Auditor's Report
145 Responsibility Statement
Other Information
122
117 Notes to the Consolidated Income Statements
101
84 General Information
Disclaimer regarding roundings
Notes to the Consolidated Balance Sheets
OLIVER BÄTE
- Allianz Group
1
A - To Our Investors
Chairman of the
Board of Management
Dear
Juvestors
-
In last year's letter to you I stated that your company was positioned well to deliver impressive
results even in difficult times. This still holds true, as our results for 2016 demonstrate: our
operating profit improved by 0.9% to € 10.8 BN; our net income attributable to shareholders
was € 6.9 BN. A very good result, considering the persistent low interest rate environment, as
well as a fiscal period that has the entire business world holding its breath in the face of war,
terror, and sudden political changes.
That said, our share price could not repeat the double-digit performance seen the previous
year, what with unprecedented negative interest rates, political instability, and a difficult
second quarter. But as the figures in our annual financial statements show, we are working
hard to sustainably increase your company's value to key stakeholder groups and to place
customers at the center of all our actions.
Our strategy and our Renewal Agenda are taking effect: they strengthen Allianz and enhance
your company's competitiveness.
Our Property-Casualty segment – a business with relatively low capital requirements –
achieved a strong performance despite headwinds, with our units in Turkey and Germany
particularly standing out in terms of top-line growth.
2
82 Consolidated Statements of Cash Flows
Annual Report 2016
A year after the introduction of the E.U. solvency guideline Solvency II, we can report a strong
Solvency II capitalization ratio of 218%.
Takeover-related Statements and Explanations (part of the Group Management Report)
Consolidated Statements of Changes in Equity
50 Corporate and Other
Asset Management
48
45
43 Property-Casualty Insurance Operations
Life/Health Insurance Operations
41 Executive Summary of 2016 Results
51
Business Environment
Business Operations
36
C Group Management Report
24 Remuneration Report (part of the Group Management Report)
Photo: Wolfgang Stahr
21
39
Pages 77-146
Outlook 2017
Balance Sheet Review
81
80
Consolidated Statements of Comprehensive Income
79 Consolidated Income Statements
78 Consolidated Balance Sheets
D_Consolidated Financial Statements
55
Pages 35-76
Pages 1-12
Controls over Financial Reporting
75
62 Risk and Opportunity Report
60 Reconciliations
57 Liquidity and Funding Resources
Pages 13-34
Annual Report 2016 - Allianz Group
On 4 May 2016, just before the AGM, the Board of Management briefed us on the first quarter
2016 performance and on the Group's current situation, in particular the capital adequacy,
the solvency ratio, and the planned sale of the life insurance business in South Korea. Because
of Ms. Ira Gloe-Semler's and Mr. Peter Denis Sutherland's resignation from the Supervisory
Board, a by-election for the committees had to be held. Ms. Martina Grundler was elected
to the Audit Committee, Dr. Friedrich Eichiner to the Risk Committee, and Mr. Jim Hagemann
Snabe to the Nomination Committee.
In Asset Management, the new PIMCO management team (with Emmanuel Roman as CEO
and Dan Ivascyn as CIO) produced excellent results: Despite the recent rise in U.S. Treasury
interest rates, we registered third-party net inflows in the last two quarters of 2016 - for
the first time since 2013. Furthermore, 88% of PIMCO's third-party assets under management
exceeded their respective benchmarks. Allianz Global Investors continued on its road to
success, achieving excellent results.
The main focus of the meeting on 7 October 2016 was the strategy of the Allianz Group, in parti-
cular the portfolio strategy and its integration into the Renewal Agenda, the risk strategy,
and capital management. In addition, the Supervisory Board dealt with the Group's ambitions
in the health insurance business. In its report on the results, the Board of Management also
addressed the divestment process for Oldenburgische Landesbank AG. Other topics discussed
in the meeting included amendments to the schedule of responsibilities of the Board of Man-
agement as well as the report of the Nomination Committee in the plenary session on the
proposed candidates for election to the Supervisory Board as shareholder representatives by
the 2017 AGM.
At the 15 December 2016 meeting, the Board of Management provided us with information
about the third-quarter results and further business developments as well as the current
situation of the Allianz Group. It also briefed us on the status of the divestment process in
South Korea and on the settlement of a SEC investigation at PIMCO. We also discussed the
planning for the fiscal year 2017 and the 2017 – 2019 three-year period, as well as the Declaration
of Conformity with the German Corporate Governance Code. The Supervisory Board reviewed
the appropriateness of the remuneration of the Board of Management based on a vertical and
horizontal comparison, set targets for the variable remuneration of the members of the Board
of Management and discussed general succession planning with regard to the Board of Man-
agement. The new CEO of PIMCO also introduced himself with initial considerations regarding
the future direction of PIMCO. Furthermore, we dealt extensively with the proposal made by
the Audit Committee regarding the mandatory audit firm rotation. In addition, the Supervisory
Board nominated the candidates for the 2017 Supervisory Board election in accordance with
the proposal made by the Nomination Committee and considering the objectives for the com-
position of the Supervisory Board. The new regulatory requirements regarding the composition
of the Supervisory Board were also discussed in this context. Finally, we took a detailed look
at the results of the Supervisory Board's efficiency review carried out with the support of an
external advisor.
DECLARATION OF CONFORMITY WITH THE GERMAN CORPORATE GOVERNANCE CODE
On 15 December 2016, the Board of Management and the Supervisory Board issued the Decla-
ration of Conformity in accordance with § 161 of the German Stock Corporation Act ("Aktien-
gesetz”). The Declaration was posted on the company website, where it is available to share-
holders at all times. Allianz SE fully complies and will continue to fully comply with the
recommendations of the German Corporate Governance Code made in the Code's version of
5 May 2015.
Further explanations on corporate governance in the Allianz Group can be found in the Cor-
porate Governance Report starting on > page 14 and the Statement on Corporate Management
pursuant to § 315 (5) and § 289a HGB starting on > page 19. The Allianz website also provides
more details on corporate governance: ②> www.allianz.com/corporate-governance.
Annual Report 2016 - Allianz Group
7
A - To Our Investors
8
COMMITTEE ACTIVITIES
The Supervisory Board has formed various committees in order to perform its duties efficiently.
The committees prepare the discussion and adoption of resolutions in the plenary sessions or
can adopt resolutions themselves.
The Standing Committee held two meetings and adopted one resolution by written procedure
in 2016. These related primarily to corporate governance issues, in particular to the adjustments
to the rules of procedure for the Supervisory Board and its committees as a result of the new
auditing legislation, the preparation for the AGM, the Employee Stock Purchase Plan, and the
external review of the Supervisory Board's efficiency. During the fiscal year the committee also
passed resolutions to approve loans to senior executives.
The Personnel Committee held three meetings, one of which was by conference call, in 2016.
It dealt extensively with the successors to Mr. Ralph and Dr. Zimmerer. The committee also
looked at other mandate matters for active and former members of the Board of Manage-
ment. In addition to reviewing the target achievement among Board of Management members
for 2015, the committee prepared the review of the remuneration system and the setting of
targets for variable remuneration for 2017.
The Audit Committee held five regular and two extraordinary meetings, and adopted one
resolution by written procedure in 2016. In the presence of the auditors, it discussed the annual
financial statements of Allianz SE and the consolidated financial statements of the Allianz
Group, the management reports and auditor's reports as well as the half-yearly financial report.
The Audit Committee saw no reason to raise any objections. In addition, the Board of Manage-
ment submitted its report on the results of the first and third quarter. The committee also
dealt with the auditor's engagement and established priorities for the annual audit for the 2016
financial year. It also discussed assignments to the auditors for non-audit services. In addition,
it dealt extensively with the compliance system, the internal audit system as well as the inter-
nal financial reporting process and the internal controls over financial reporting. The com-
mittee received regular reports on legal and compliance issues and the work of the internal
audit function and initiated a review of the group-wide implementation status of the gover-
nance requirements according to Solvency II. The preparations for the audit firm rotation from
the fiscal year 2018 were one of the main areas of focus of the Audit Committee's work. A tender
procedure in accordance with the new legal requirements was carried out for this purpose and
a recommendation finally submitted to the plenary session.
The Risk Committee held two meetings in 2016, during which it discussed the current risk situ-
ation of the Allianz Group with the Board of Management. The risk report and other risk-
related statements in the annual Allianz SE and consolidated financial statements as well as
management and group management reports were reviewed with the auditor and the Audit
Committee was informed of the result. The appropriateness of the early risk recognition system
at Allianz and the result of further, voluntary risk assessments by the auditor were also dis-
cussed. The committee took a detailed look at the risk strategy and capital management, as
well as the effectiveness of the risk management system, in particular the limit system for
the Allianz Group and Allianz SE. The interest rate sensitivity in the life insurance business and
Annual Report 2016 - Allianz Group
STRENGTH
CONTINUITY
CHANGE
Allianz Group
Annual Report 2016
19
14 Corporate Governance Report
B_ Corporate Governance
Mandates of the Members of the Board of Management
12
11 Mandates of the Members of the Supervisory Board
A - To Our Investors
5 Supervisory Board Report
A_ To our Investors
internet pages, etc. within this report are also linked.
All references to chapters, pages, notes,
CONTENT
►To go directly to any chapter, simply click
on the headline or the
page number.
Allianz (ill
2 Letter to the Investors
Annual Report 2016 - Allianz Group
In the meeting of 4 August 2016, the Board of Management reported in depth on the half-yearly
results and also dealt with the potential impact of Brexit as well as the failed coup attempt in
Turkey, the situation in the Italian banking sector, the acquisition in Morocco, and planned
issuance of shares to employees. We then dealt extensively with the implementation status of
the Renewal Agenda, in particular in the main operating entities, regarding the topics True
Customer Centricity, Digital by Default, Technical Excellence, Growth Engines, and Inclusive
Meritocracy. The Board of Management also reported on the measures to promote women
and to increase employee mobility. Finally, the Supervisory Board dealt with the audit reform
legislation and the therefore required adjustments to the rules of procedure for the Supervisory
Board and individual committees, as well as the objectives for the composition of the Super-
visory Board. The meeting was preceded by a separate informational event for the members of
the Supervisory Board on the Group's digital strategy and its implementation.
In the meeting of 10 March 2016, the Supervisory Board dealt, firstly with personnel matters and
appointed Ms. Jacqueline Hunt to the Board of Management as successor to Mr. Jay Ralph with
effect from 1 July 2016, and Dr. Günther Thallinger as successor to Dr. Maximilian Zimmerer
with effect from 1 January 2017. The Supervisory Board also discussed the audited annual
Allianz SE and consolidated financial statements as well as the recommendation for the appro-
priation of earnings by the Board of Management for the fiscal year 2015. The auditor confirmed
that there were no discrepancies to their February report, and issued an unqualified auditor's
report for the individual and consolidated financial statements. In addition, the Board of
Management submitted its report on risk developments in 2015. The Supervisory Board also
dealt with the agenda and the proposals for resolution for the 2016 AGM of Allianz SE. It also
resolved to appoint KPMG as auditor for the individual and consolidated financial statements
for the fiscal year 2016 and for the auditor's review of the 2016 half-yearly financial report.
In addition, the Supervisory Board was also informed about the implementation status of
the Renewal Agenda and the consideration of environmental, social, and governance (ESG)
aspects in the investment and underwriting process.
Chives Béle
Sincerely yours,
Dear investors, we greatly appreciate your ongoing loyalty and support. Please be assured that
in 2017, as in the past years, we will not rest on our laurels, and we are making good progress
despite all the uncertainties and challenges we are facing. It is not in our power, obviously, to
prevent low interest rates, strong market fluctuations, or natural catastrophes. But we can work
hard to achieve our ambitious goals, and to ensure that your Allianz will remain successful as
the world goes digital.
All of these women and men work hard and successfully to provide you with both robust
returns and superior capital efficiency, in keeping with our promise. And, as you may
remember, there is another promise we have made: any capital we don't use to expand our
business will be returned to our investors. We have kept this promise as well. At the same
time, we work to ensure we have the flexibility required to keep a sound balance between
Allianz's capital efficiency on the one hand and its balance sheet strength on the other.
4
A - To Our Investors
ॐ
3
Annual Report 2016 - Allianz Group
We are experiencing an exciting moment in the history of Allianz, with huge and tantalizing
challenges ahead. It makes me happy to see how, at the various Allianz entities, young talents
work with experienced veterans to take this proud global company further into the digital age.
I am very pleased that we have such talented employees, and I extend my warmest thanks to
them for their hard work and outstanding dedication. Special thanks also go to our sales part-
ners, in particular our capable Allianz representatives worldwide. I am sure I am expressing
these thanks on your behalf as well.
Well, the good results of 2016 are history now and it is time to look to the future. As stated
before, we want to use our present financial strength and solid balance sheet to strengthen
Allianz even further. When asked about the long-term growth prospects for your company,
I usually point out three things: first, over seven billion people wake up every day, and for
most of them it is a key concern to have their safety and well-being protected and be able to
appropriately partake in global prosperity. Second, only about one percent of these people are
our customers at present. Third, since we are one of the world's leading financial services
providers, we are in a better position than most to fulfil this basic need for financial security
and a share in prosperity. In other words, there are basically no limits to our growth - all we
need to do is tap these opportunities prudently and in sustainable ways.
Our commitment to being a sustainable business was rewarded by the Dow Jones Sustain-
ability Index, one of the most prestigious Responsible Business ratings. We achieved a gold
rating and were the highest-placed primary insurer. Over the last year, we continued to
take industry-leading steps including our divestment from coal-based industries and the
growth of our renewable energy portfolio to € 4.6 BN.
We also moved up the newly defined Inclusive Meritocracy Index, which measures progress
in establishing an inclusive performance culture: it stood at 70% in 2016, after 68% in 2015.
In order to make a comparative assessment of our customer orientation, the measurement
of customers' willingness to recommend Allianz (Net Promoter Score) was harmonized
on a group-wide basis. Results for 2016 were quite gratifying: 55% of our businesses achieved
an NPS above the respective market average.
A - To Our Investors
We are making good progress in shifting our Life portfolio towards capital-efficient
products; our new business margin has increased to 2.7%. And we continue to address
deficits in the existing portfolio just as rigorously, as the successful sale of our South
Korean business demonstrates.
P.S.: Our financial reporting goes digital, too, and we are deliberately keeping this Annual
Report as brief as possible. For further details on our figures and plans, please refer to our
website at >www.allianz.com/investor-relations or our Allianz Investor Relations App.
Supervisory Board Report
which individual members of the Board of Management had achieved their targets and set their
variable remuneration for the fiscal year 2015 as well as the mid-term bonus for the fiscal
years 2013-2015. In the course of the performance assessment, we also verified the fitness and
propriety of the members of the Board of Management.
6
A - To Our Investors
5
A - To Our Investors
Annual Report 2016 - Allianz Group
Annual Report 2016 - Allianz Group
In the meeting of 18 February 2016, the Supervisory Board dealt comprehensively with the pro-
visional financial figures for the fiscal year 2015 and the Board of Management's recommended
dividend. The appointed audit firm, KPMG AG Wirtschaftsprüfungsgesellschaft (KPMG), Munich,
reported in detail on the provisional results of their audit. The Chief Compliance Officer then
gave his annual report on the compliance organization and key compliance-related matters.
During the further course of the meeting, the Supervisory Board also reviewed the extent to
Details on each member's participation at meetings of the Supervisory Board and its com-
mittees can be found in the Corporate Governance Report, starting on ②> page 14. Members
of the Supervisory Board who were unable to attend meetings of the Supervisory Board or its
committees were excused and, as a rule, cast their votes in writing.
In the fiscal year 2016, the Supervisory Board held six meetings. The meetings took place in
February, March, May, August, October and December. The Board of Management's verbal
reports at the meetings were accompanied by written documents, which were sent to each
member of the Supervisory Board in time for the relevant meeting. The Board of Management
also informed us in writing of important events that occurred between meetings. The chair-
men of the Supervisory and Management Boards also had regular discussions about major
developments and decisions.
In all of the Supervisory Board's 2016 meetings, the Board of Management reported on Group
revenues and results as well as developments in individual business segments. The Board of
Management informed us on the course of business as well as on the development of the
Allianz Group and Allianz SE, including deviations in actual business developments from the
planning. Within the framework of our activities, the Board of Management reported to us on
a regular basis and in a timely and comprehensive manner, both verbally and in writing. Key
reporting issues were strategic topics, such as the implementation of the Renewal Agenda
and the portfolio strategy, the risk strategy and capital management, the ongoing challenges
facing the life insurance business due to the low interest rates, the divestment of the life
insurance business in South Korea, as well as the business development in the Asset Manage-
ment segment. In addition, we were extensively involved in the Board of Management's plan-
ning for both the fiscal year 2017 and the three-year period from 2017 to 2019. We dealt exten-
sively with the implementation of the audit reform legislation, in particular the preparation
of the audit firm rotation. Finally, we prepared for the election of the Supervisory Board in
spring 2017 and also took a look at the result of the review of the efficiency of the Supervisory
Board's activities carried out with the support of an external advisor.
OVERVIEW
During the fiscal year 2016, the Supervisory Board fulfilled all its duties and obligations as laid
out in the company Statutes and applicable law. It monitored the management of the company,
devoted particular attention to personnel matters related to the Board of Management, and
advised the Board of Management regarding the conduct of business.
Ladies and Gentlemen,
ISSUES DISCUSSED IN THE SUPERVISORY BOARD PLENARY SESSIONS
Statement on Corporate Management pursuant to § 315 (5) and § 289a of the HGB
(part of the Group Management Report)
D - Consolidated Financial Statements
Financial liabilities for puttable equity instruments
amortization of intangible assets and
acquisition-related expenses (from business combinations),
one-off effects from pension revaluation,
realized gains/losses (net) and impairments of investments (net),
income from fully consolidated private equity investments (net),
interest expenses from external debt,
income from financial assets and liabilities carried at fair value
through income (net),
To better understand the ongoing operations of the business, the
Allianz Group generally excludes the following non-operating effects:
REPORTABLE SEGMENTS MEASURE OF PROFIT OR LOSS
The Allianz Group uses operating profit to evaluate the performance
of its reportable segments as well as of the Allianz Group as a whole.
Operating profit highlights the portion of income before income
taxes that is attributable to the ongoing core operations of the Allianz
Group. The Allianz Group considers the presentation of operating
profit to be useful and meaningful to investors because it enhances the
understanding of the Allianz Group's underlying operating perfor-
mance and the comparability of its operating performance over time.
Prices for transactions between reportable segments are set on an
arm's length basis in a manner similar to transactions with third par-
ties. Transactions between reportable segments are eliminated in the
Consolidation. Financial information is recorded based on report-
able segments, cross-segmental country-specific information is not
determined.
GENERAL SEGMENT REPORTING INFORMATION
The reportable segment Holding & Treasury includes the manage-
ment and support of the Allianz Group's businesses through its
strategy, risk, corporate finance, treasury, financial reporting, con-
trolling, communication, legal, human resources, technology and
other functions. The reportable segment Banking consists of the
banking activities in Germany, France, Italy, the Netherlands and
Bulgaria. The banks offer a wide range of products for corporate and
retail clients, with a primary focus on the latter. The reportable seg-
ment Alternative Investments provides global alternative investment
management services in the private equity, real estate, renewable
energy and infrastructure sectors, mainly on behalf of the Allianz
Group's insurance operations.
CORPORATE AND OTHER
The reportable segment Asset Management operates as a global pro-
vider of institutional and retail asset management products and ser-
vices to third-party investors and provides investment management
services to the Allianz Group's insurance operations. The products
for retail and institutional customers include equity and fixed-
income funds as well as alternative products. The United States and
Germany as well as France, Italy and the Asia-Pacific region represent
the primary asset management markets.
ASSET MANAGEMENT
D - Consolidated Financial Statements
Annual Report 2016 - Allianz Group
94
In the business segment Life/Health, reportable segments offer a
comprehensive range of life and health insurance products on both
an individual and a group basis, including annuities, endowment
and term insurance, unit-linked and investment-oriented products,
as well as full private health, supplemental health and long-term care
insurance.
LIFE/HEALTH
In the business segment Property-Casualty, reportable segments
offer a wide variety of insurance products to both private and corpo-
rate customers, including motor liability and own damage, accident,
general liability, fire and property, legal expense, credit and travel
insurance.
PROPERTY-CASUALTY
profit (loss) of substantial subsidiaries classified as held for sale.
The types of products and services from which the reportable
segments derive revenues are described below.
The following exceptions apply to this general rule:
For life/health insurance business and property-casualty insur-
ance products with premium refunds, all items listed above are
included in operating profit if the profit sources are shared with
policyholders. This is also applicable to tax benefits, which are
shared with policyholders. IFRS requires that the consolidated
income statements present all tax benefits in the income taxes
line item, even when they belong to policyholders. In the segment
reporting, tax benefits are reclassified and shown within operat-
ing profit in order to adequately reflect the policyholder partici-
pation in tax benefits.
Investments
Financial assets carried at fair value through income
Cash and cash equivalents
ASSETS
2015
2016
2015
2016
Life/Health
Property-Casualty
as of 31 December
BUSINESS SEGMENT INFORMATION - CONSOLIDATED BALANCE SHEETS
€ MN
BUSINESS SEGMENT INFORMATION - CONSOLIDATED BALANCE SHEETS
D - Consolidated Financial Statements
Annual Report 2016 - Allianz Group
95
Some minor reallocations between the reportable segments have
been made.
RECENT ORGANIZATIONAL CHANGES
Operating profit should be viewed as complementary to, and not as
a substitute for, income before income taxes or net income as deter-
mined in accordance with IFRS.
In all reportable segments, income from financial assets and
liabilities carried at fair value through income (net) is treated as
operating profit if the income relates to operating business.
Asset management activities represent a separate reportable seg-
ment. Due to differences in the nature of products, risks and capital
allocation, corporate and other activities are divided into three
reportable segments: Holding & Treasury, Banking and Alternative
Investments. In total, the Allianz Group has identified 16 reportable
segments in accordance with IFRS 8.
Allianz Worldwide Partners (Property-Casualty only).
Asia Pacific,
Financial liabilities carried at fair value through income
Other assets
Deferred tax assets
Deferred acquisition costs
Reinsurance assets
Financial assets for unit-linked contracts
397
46
429
6
1,940
1,502
9,506
4
Loans and advances to banks and customers
Investments
Financial assets carried at fair value through income
€ MN
IMPACT OF THE DISPOSAL
The impact of the disposal, net of cash disposed, on the consoli-
dated statement of cash flows for the year ended 31 December 2016
was as follows:
(20)
Unearned premiums
(79)
Reserves for loss and loss adjustment expenses
Global Insurance Lines & Anglo Markets,
USA (Life/Health only),
German Speaking Countries and Central & Eastern Europe,
Western & Southern Europe, Middle East, Africa, India,
Iberia & Latin America,
The business activities of the Allianz Group are first organized by
product and type of service: insurance activities, asset management
activities and corporate and other activities. Due to differences in the
nature of products, risks and capital allocation, insurance activities
are further divided into the business segments Property-Casualty and
Life/Health. In accordance with the responsibilities of the Board of
Management, each of the insurance business segments is grouped
into the following reportable segments:
IDENTIFICATION OF REPORTABLE SEGMENTS
(8)1
1- Includes cash and cash equivalents at an amount of €9 MN which were disposed of with the entity.
Proceeds from sale of the subsidiary, net of cash disposed
(752)
(25)
Loans and advances to banks and customers
Realized loss from the disposal
(109)
Other liabilities (including a provision for obligations relating
to the sales agreement of € 46 MN)
(40)
Deferred tax liabilities
(1,502)
Financial liabilities for unit-linked contracts
(10,878)
Reserves for insurance and investments contracts
(434)
Other comprehensive income
Financial assets for unit-linked contracts
3,429
3,635
5,807
5,551
901
864
Liabilities to banks and customers
8,834
10,394
112
129
Financial liabilities carried at fair value through income
LIABILITIES AND EQUITY
2015
2016
2015
2016
Life/Health
Property-Casualty
as of 31 December
72
2,998
655,086
Unearned premiums
17,276
17,071
4,108
Other liabilities
3,137
3,836
2,482
2,674
Deferred tax liabilities
105,873
111,325
Financial liabilities for unit-linked contracts
682,564
472,010
14,407
14,837
Reserves for insurance and investment contracts
10,857
10,790
61,169
61,617
Reserves for loss and loss adjustment expenses
3,605
490,876
During the year ended 31 December 2016, the Allianz Group disposed
of Allianz Life Insurance Co. Ltd., Seoul, a 100% owned subsidiary of
the Allianz Group, allocated to the reportable segment Asia Pacific
(Life/Health). The entity had been classified as held for sale since the
beginning of the second quarter of 2016. The entity was deconsoli-
dated on 30 December 2016. The Allianz Group received proceeds
from the sale of € 2 MN and recognized a provision for obligations
relating to the sales agreement of € 46 MN.
3,078
159,237
9,265
10,016
Reinsurance assets
105,873
111,325
95,138
93,142
13,781
11,508
392,171
415,023
100,026
102,430
6,431
7,427
643
539
8,467
7,014
5,625
5,632
Deferred acquisition costs
4,782
Total assets
2,870
Intangible assets
146
37
97
Non-current assets and assets of disposal groups classified as held for sale
17,406
19,143
2,781
159,034
23,112
Other assets
310
537
1,107
1,175
Deferred tax assets
20,587
20,105
4,647
22,392
19,261
SIGNIFICANT DISPOSALS
As of 31 December 2016, cumulative gains of € 60 MN were recorded in 5-Segment reporting
INSURANCE CONTRACTS
The following sections describe complex accounting areas that are
especially sensitive to the use of estimates and assumptions.
3- Use of estimates and assumptions
D - Consolidated Financial Statements
Annual Report 2016 - Allianz Group
90
The amendments and interpretations are not expected to have a
material impact on the financial position and financial results of the
Allianz Group. Early adoption is generally allowed but not intended
by the Allianz Group.
Annual periods beginning
on or after 1 January 2018
Annual periods beginning
on or after 1 January 2017
Annual periods beginning
on or after 1 January 2017
Annual periods beginning
on or after 1 January 2018
Annual periods beginning
on or after 1 January 2018
Annual periods beginning
on or after 1 January 2017/2018
Annual periods beginning
on or after 1 January 2018
Effective date
IFRIC 22, Foreign Currency Transactions
and Advance Consideration
Annual Improvements
to IFRSS 2014-2016 Cycle
IAS 40, Transfers of Investment Property
IAS 12, Recognition of Deferred Tax Assets
for Unrealised Losses
IAS 7, Disclosure Initiative
IFRS 15, Clarification to IFRS 15
IFRS 2, Classification and Measurement
of Share-based Payment Transactions
IFRS 10 and IAS 28, Sale or Contribution
of Assets between an Investor and its
Associate or Joint Venture
Standard/Interpretation
FURTHER AMENDMENTS AND INTERPRETATIONS
In addition to the above-mentioned accounting pronouncements
recently issued, the following amendments and revisions to stan-
dards and interpretations have been issued by the IASB but are not yet
effective for or adopted early by the Allianz Group.
For Life/Health and Property-Casualty, the central oversight process
around reserve estimates includes the setting of group-wide standards
and guidelines, regular site visits, as well as regular quantitative and
qualitative reserve monitoring.
Further amendments and interpretations
The oversight and monitoring of the Allianz Group's reserves
culminate in quarterly meetings of the Allianz Group Reserve Com-
mittee, which is the supervising body that governs all significant
reserves. It particularly monitors key developments across the Allianz
Group affecting the adequacy of reserves.
the
Market approach: Prices and other relevant information gener-
ated by market transactions involving identical or comparable
assets or liabilities.
-
For fair value measurements categorized as level 2 and level 3,
the Allianz Group uses valuation techniques consistent with the
three widely used valuation techniques listed in IFRS 13:
D - Consolidated Financial Statements
91
1- For further details regarding financial instruments, please refer to note 36 Financial instruments and fair
value measurement.
Annual Report 2016 - Allianz Group
Level 3 applies where not all input parameters are observable in
the market. Accordingly, the fair value is based on valuation tech-
niques using non-market observable inputs. Valuation techniques
include the discounted cash flow method, comparison to similar
instruments for which observable market prices exist and other valu-
ation models. Appropriate adjustments are for example made for
credit risks. In particular when observable market inputs are not
available, the use of estimates and assumptions may have a strong
impact on the valuation outcome.
Level 2 applies if the market for a financial instrument is not
active or when the fair value is determined by using valuation tech-
niques based on observable input parameters. Such market inputs
are observable substantially over the full term of the asset or liability
and include references to formerly quoted prices for identical instru-
ments from an active market, quoted prices for identical instruments
from an inactive market, quoted prices for similar instruments from
active markets, and quoted prices for similar instruments from inac-
tive markets. Market observable inputs also include interest rate yield
curves, volatilities and foreign currency exchange rates.
The level 1 inputs of financial instruments that are traded in
active markets are based on unadjusted quoted market prices or
dealer price quotations for identical assets or liabilities on the last
exchange trading day prior to or at the reporting date, if the latter is
a trading day.
The Allianz Group carries certain financial instruments at fair value
and discloses the fair value of most other assets and liabilities. The
fair value of an asset or liability is defined as the price that would be
received to sell an asset, or paid to transfer a liability, in an orderly
transaction between market participants at the measurement date.
Assets and liabilities measured or disclosed at fair value in the
consolidated financial statements are measured and classified in
accordance with the fair value hierarchy in IFRS 13, which categorizes
the inputs to valuation techniques used to measure fair value into
three levels.
OF FINANCIAL INSTRUMENTS1
FAIR VALUE AND IMPAIRMENTS
Stage two: The Allianz Group Actuarial Department forms an
opinion on the adequacy of the reserves proposed by the local entities.
The Allianz Group Actuarial Department challenges the operating
entities' selection through their continuous interaction with local
teams and quarterly attendance in the local reserve committees. The
ability to form a view on reserve adequacy is further enabled by regu-
lar reviews of the local reserving practices. Such reviews consist of an
evaluation of the reserving process as well as of the appropriateness
and consistency of assumptions, and an analysis of movement of
reserves. Significant findings from such reviews are communicated
in the Allianz Group Reserve Committee to initiate actions where
necessary.
subsequently documented. A final decision on the reserve selection
is made in the reserve committee. Local actuaries are responsible for
their compliance with the Group Actuarial Standards and Guidelines.
Stage one: Property-Casualty reserves are calculated by local
reserving actuaries in the Allianz operating entities. Reserves are set
based on a thorough analysis of historical data, enhanced by inter-
actions with other business functions (e.g. Underwriting, Claims and
Reinsurance). Actuarial judgment is applied where necessary, espe-
cially in cases where data is unreliable, scanty or unavailable. The
judgment of Property-Casualty actuaries is based on past experience
of the characteristics of each line of business, the current stage of the
underwriting cycle and the external environment in which the sub-
sidiary operates. The reserves are proposed to a local reserve com-
mittee, whereat the rationale of the selections are discussed and
Property-Casualty reserves are set by leveraging the use of actu-
arial techniques and educated judgment. A two-stage process exists
for the setting of reserves in the Allianz Group:
Stage two: The Allianz Group Actuarial Department regularly
reviews the local reserving processes, including the appropriateness
and consistency of assumptions, and analyzes the movements of
reserves. Any adjustments to reserves and other insurance-related
reporting items are reported to and analyzed together with the
Allianz Group Reserve Committee.
Stage one: Life/Health reserves are calculated by qualified local
staff experienced in the subsidiaries' business. Actuaries in the local
entities also conduct tests of the adequacy of the premiums and
reserves to cover future claims and expenses (liability adequacy
tests). The process follows group-wide standards for applying consis-
tent and plausible assumptions. The appropriateness of the reserves
and their compliance with group-wide standards is confirmed by the
local actuary.
Life/Health reserves are dependent on estimates and assumptions,
especially on the life expectancy and health of an insured individual
(mortality, longevity and morbidity risk) and on the development of
interest rates and investment returns (asset-liability mismatch risk).
These assumptions also have an impact on the presentation of costs
arising from the origination of insurance business (acquisition costs
and sales inducements) and the value of acquired insurance busi-
ness (PVFP). To ensure consistency in the application of actuarial
methods and assumptions in the Life/Health reserving process, 1
Allianz Group has designed a two-stage reserving process:
The Allianz Group currently plans to apply IFRS 16 initially on
1 January 2019. The Allianz Group has not yet determined which tran-
sition approach to apply and has not yet quantified the impact on its
reported assets and liabilities of adoption of IFRS 16. The quantitative
effect will depend on, inter alia, the transition method chosen, the
extent to which the Allianz Group uses the practical expedients and
recognition exemptions, and any additional leases that the Allianz
Group enters into.
The Allianz Group has started an initial assessment of the poten-
tial impact on its consolidated financial statements. So far, the most
significant impact identified is that the Allianz Group will recognize
new assets and liabilities for its operating leases of occupied prop-
erty. In addition, IFRS 16 replaces the straight-line operating lease
expenses with a depreciation charge for right-of-use assets and inter-
est expenses on lease liabilities. The Group has not yet decided
whether it will use the optional exemptions. No significant impact is
expected for the Group's finance leases.
In January 2016, the IASB issued IFRS 16, Leases, which supersedes IAS 17.
IFRS 16 eliminates the classification of leases as either operating or
finance leases for a lessee. Instead, all leases are treated in a similar
way to finance leases under IAS 17. IFRS 16 does not require a lessee to
recognize assets and liabilities for short-term leases and leases of
low-value assets.
INCOME TAXES
CLAIMS AND INSURANCE BENEFITS INCURRED
These expenses consist of claims and insurance benefits incurred
during the period, including benefit claims in excess of policy
account balances and interest credited to policy account balances.
Furthermore, it includes claim handling costs directly related to the
processing and settlement of claims. Reinsurance recoveries are
deducted from claims and insurance benefits.
Fee and commission income primarily consists of asset manage-
ment fees that are recognized when the service is provided. Perfor-
mance fees may not be recognized as fee income before the respec-
tive benchmark period is completed, because, before its completion,
the obligation to pay the fee is conditional, the fund performance is
regularly not reliably estimable, and related service is not fully per-
formed. In any case, performance-related fees from alternative
investment products (carried interest) are not recognized as revenue
prior to the date of the official declaration of distribution by the fund.
FEE AND COMMISSION INCOME
INCOME FROM FINANCIAL ASSETS AND LIABILITIES
CARRIED AT FAIR VALUE THROUGH INCOME (NET)
Income from financial assets and liabilities carried at fair value
through income (net) includes all investment income as well as real-
ized and unrealized gains and losses from financial assets and liabil-
ities carried at fair value through income. In addition, commissions
attributable to trading operations and related interest expenses as
well as refinancing and transaction costs are included in this line
item. Foreign currency gains and losses on monetary items are also
reported within income from financial assets and liabilities carried
at fair value through income (net).
ments in associates and joint ventures represents the share of net
income from entities accounted for using the equity method.
INTEREST AND SIMILAR INCOME AND INTEREST EXPENSES
Interest income and interest expenses are recognized on an accrual
basis. Interest income is recognized using the effective interest
method. This line item also includes dividends from available-for-
sale equity securities and income from investments in associates and
joint ventures. Dividends are recognized in income when the right to
receive the dividend is established. Share of earnings from invest-
written.
Premiums ceded for reinsurance are deducted from premiums
Revenues for universal life-type and investment contracts repre-
sent charges assessed against the policyholders' account balances
for front-end loads, net of the change in unearned revenue liabilities,
cost of insurance, surrenders and policy administration, and are
included within premiums earned (net).
Premiums for short-duration insurance contracts are recognized as
revenues over the period of the contract in proportion to the amount
of insurance protection provided. Premiums for long-duration insur-
ance contracts are recognized as earned when due.
PREMIUMS
Non-controlling interests represent equity in subsidiaries, not
attributable directly or indirectly, to Allianz SE as parent.
Unrealized gains and losses (net) include unrealized gains and
losses from available-for-sale investments and from derivative
financial instruments that meet the criteria for cash flow hedge
accounting.
Please refer to the above section explaining foreign currency
changes that are recognized in equity. The effective portion of gains
and losses of hedging instruments designated as hedges of a net
investment in a foreign operation is recognized in foreign currency
translation adjustments.
Retained earnings comprise the net income of the current year,
earnings not yet distributed from prior years, treasury shares, and
any amounts directly recognized in equity according to IFRS. Treasury
shares are deducted from shareholders' equity. No gain or loss is rec-
ognized on the sale, issuance, acquisition or cancellation of these
shares. Any consideration paid or received is recorded directly in
shareholders' equity.
Issued capital represents the mathematical per-share value received
at the issuance of shares. Additional paid-in capital represents the
premium exceeding the issued capital received at the issuance of
shares.
EQUITY
Certificated liabilities and subordinated liabilities are subsequently
measured at amortized cost, using the effective interest method to
amortize the premium or discount to the redemption value over the
life of the liability.
Current income taxes are calculated based on the respective local
taxable income and local tax rules for the period. In addition, current
income taxes presented for the period include adjustments for
uncertain tax payments or tax refunds for periods not yet finally
assessed, including interest expenses and penalties on the underpay-
ment of taxes. For the case that amounts included in the tax return
are considered unlikely to be accepted by the tax authorities (uncer-
tain tax positions), a provision for income taxes is recognized. The
amount is based on the best possible assessment of the expected tax
payment. Tax refund claims from uncertain tax positions are recog-
nized when it is probable that they can be realized.
Deferred tax assets or liabilities are calculated for temporary
differences between the tax bases and the financial statement carrying
amounts, including differences from consolidation, unused tax loss
carry-forwards, and unused tax credits. Measurement is based on
enacted or substantively enacted tax rates and tax rules. The Allianz
Group recognizes a valuation allowance for deferred tax assets when
it is unlikely that a corresponding amount of future taxable profit will
be available against which the deductible temporary differences, tax
loss carry forwards and tax credits can be utilized.
Changes in deferred tax assets and liabilities are generally recog-
nized through profit and loss in the consolidated income statement,
except for changes recognized directly in equity.
Annual Report 2016 - Allianz Group
IFRS 16, Leases
The Allianz Group is currently performing a detailed assessment
of the fee and commission income, primarily related to asset man-
agement fees, to determine the impact resulting from the application
of IFRS 15.
The Allianz Group has completed an initial assessment of the
potential impact of the adoption of IFRS 15 on its consolidated finan-
cial statements and does not expect that there will be a significant
impact. The Group plans to adopt IFRS 15 on the required effective
date by recognizing the cumulative effect of initially applying IFRS 15
as an adjustment to the opening balance of retained earnings in
accordance with the cumulative effect approach.
In May 2014, the IASB issued IFRS 15, Revenue from Contracts with
Customers. IFRS 15 supersedes IAS 18, IAS 11, and a number of reve-
nue-related interpretations. With the introduction of IFRS 15, the IASB
pursued the objective of developing a single revenue standard con-
taining comprehensive principles for recognizing revenue. The effec-
tive date is 1 January 2018.
IFRS 15, Revenue from Contracts with Customers
In 2016, the IASB issued an amendment to IFRS 4 which permits
insurers to apply IAS 39 rather than IFRS 9, for annual periods begin-
ning before 1 January 2021, provided certain preconditions are met.
These preconditions, relating to insurance being the dominant activ-
ity of a reporting entity, are fulfilled by the Allianz Group and it is
planned to carry out this option. It can be assumed that the main
impact from IFRS 9 will arise from the new classification rules leading
to more financial instruments being measured at fair value through
profit and loss as well as from the new impairment model. In this
context, interdependencies with the not-yet-issued IFRS 17 have to be
considered to come to a final conclusion on the combined impact of
both standards.
IFRS 9, Financial Instruments, was issued by the IASB in July 2014 and
will fully replace IAS 39. IFRS 9 provides a new approach on how to
classify financial instruments based on their cash flow characteristics
and the business model under which they are managed. Further-
more, the standard introduces a new impairment model for debt
instruments and provides new rules for hedge accounting. The effec-
tive date is 1 January 2018.
IFRS 9, Financial Instruments
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
Cost approach: Amount that would currently be required to
replace the service capacity of an asset (replacement cost).
Income approach: Conversion of future amounts such as cash
flows or income to a single current amount (present value tech-
nique).
No material impact arose on the financial results or the financial
position of the Allianz Group.
Annual Improvements to IFRSS 2010-2012 Cycle,
IAS 19, Defined Benefit Plans: Employee Contributions,
IFRS 11, Accounting for Acquisitions of Interests in Joint
Operations,
of Depreciation and Amortisation,
IAS 16 & IAS 38, Clarification of Acceptable Methods
IAS 1, Disclosure initiative,
RECENTLY ADOPTED ACCOUNTING PRONOUNCEMENTS
The following amendments and revisions to existing standards
became effective for the Allianz Group's consolidated financial state-
ments as of 1 January 2016:
NEW ACCOUNTING PRONOUNCEMENTS
D - Consolidated Financial Statements
89
Annual Improvements to IFRSS 2012-2014 Cycle.
There is no one-to-one connection between valuation technique and
hierarchy level. Depending on whether valuation techniques are
based on significant observable or unobservable inputs, financial
instruments are classified in the fair value hierarchy.
Estimates and assumptions of fair values and hierarchies are
particularly significant when determining the fair value of financial
instruments for which at least one significant input is not based on
observable market data (classified within level 3 of the fair value hier-
archy). The availability of market information is determined by the
relative trading levels of identical or similar instruments in the market,
with emphasis placed on information that represents actual market
activity or binding quotations from brokers or dealers.
The degree of judgment used in measuring the fair value of
financial instruments closely correlates with the level of non-market
observable inputs. The Allianz Group uses a maximum of observable
inputs and a minimum of non-market observable inputs when
measuring fair value. Observability of input parameters is influenced
by various factors such as type of the financial instrument, whether
a market is established for the particular instrument, specific trans-
action characteristics, liquidity, and general market conditions. If the
fair value cannot be measured reliably, amortized cost is used as a
proxy for determining fair values.
Loans and advances to banks and customers
Deferred tax assets
Financial assets carried at fair value through income
Investments
Cash and cash equivalents
€ MN
RECLASSIFIED ASSETS AND LIABILITIES
At the end of the fourth quarter of 2016, all requirements were fulfilled
to present Oldenburgische Landesbank AG, Oldenburg, as a disposal
group. Thus, the assets and liabilities of this consolidated entity,
which is allocated to the reportable segment Banking (Corporate and
Other), were classified as held for sale.
OLDENBURGISCHE LANDESBANK AG, OLDENBURG
18
13,290
18
8
13,282
Oldenburgische Landesbank AG, Oldenburg
Other disposal groups
Total
109
14,196
63
239
63
79
Other assets
Total assets
Financial liabilities carried at fair value through income
Liabilities to banks and customers
Other liabilities
D - Consolidated Financial Statements
93
Annual Report 2016 - Allianz Group
1- For further details regarding deferred tax assets, please refer to note 34 Income taxes.
13,282
250
215
442
12,365
160
11
98
74
10,703
2,631
13
395
Total liabilities
Subordinated liabilities
Certificated liabilities
13,915
other comprehensive income relating to the disposal group classified
as held for sale. The sale is expected to occur in 2017. Upon measure-
ment of the disposal group at fair value less costs to sell, an impair-
ment loss of € 87 MN before taxes was recognized for the year ended
31 December 2016.
46
46
D - Consolidated Financial Statements
Annual Report 2016 - Allianz Group
92
92
The recoverable amounts of all cash generating units (CGUS) to test
goodwill and other indefinite life intangible assets for impairment
are typically determined on the basis of value in use calculations. The
determination of a CGU's recoverable amount requires significant
judgment regarding the selection of appropriate valuation tech-
niques and assumptions. These assumptions include for example
the selection of input parameters for the projection of future earn-
ings. Assumptions may need to be changed as economic, market and
business conditions change. As such, the Allianz Group continu-
ously evaluates external conditions and the operating performances
of the CGUS. Further explanations on the valuation techniques and
significant assumptions are given in note 12 Intangible assets.
INDEFINITE LIFE INTANGIBLE ASSETS
GOODWILL AND OTHER
For further details, please refer to the explanations to note 45
List of participations of the Allianz Group as of 31 December 2016
according to § 313 (2) HGB.
Pursuant to IFRS 11, investments in joint arrangements have to
be classified as either joint operations or joint ventures depending on
the contractual rights and obligations of each investor. The Allianz
Group has assessed the nature of all its joint arrangements and
determined them to be joint ventures.
For certain investment funds in which the Allianz Group holds a
stake of above 20%, management has assessed that the Allianz Group
has no significant influence because it is not represented in the gov-
erning bodies of these investment funds.
For certain investment funds managed by third parties where
the Allianz Group holds a majority stake, management has assessed
that the Allianz Group does not control these investment funds
because it has neither a majority representation in the governing
bodies of these investment funds nor any substantial removal rights
to replace the asset manager.
For certain investment funds managed by Allianz Group internal
asset managers in which the Allianz Group holds a minority stake,
management has assessed that the Allianz Group controls these
investment funds because of its asset management role combined
with its aggregate economic interest in these investment funds.
To determine control for investment funds managed by Allianz
Group internal asset managers, management considers in particular
the remuneration to which the asset manager is entitled, the expo-
sure to variability of returns from these investments, and the rights
held by other parties. When the exposure to variability of returns is
within a certain range, significant judgment is required for the deter-
mination of the appropriate inclusion method of these investment
funds.
Although the Allianz Group's share in some companies is below
20%, management has assessed that the Allianz Group has significant
influence over these companies because it is represented in the gov-
erning bodies that decide on the relevant activities of these companies.
There are some companies where the Allianz Group holds a
majority stake but where management has assessed that the Allianz
Group does not control these entities because it has no majority rep-
resentation in the governing bodies and/or it requires at least the
confirmative vote of another investor to pass any decisions over rele-
vant activities.
on the basis of distinctive rights stipulated by shareholder agree-
ments between the Allianz Group and the other shareholders in these
companies.
For some subsidiaries where the Allianz Group does not hold a
majority stake, management has assessed that the Allianz Group
controls these companies. The Allianz Group controls these entities
ASSESSMENT OF THE INCLUSION METHOD
Determining the appropriate inclusion method of some entities
involves management judgment.
The evaluation of whether a financial debt instrument is
impaired requires analysis of the underlying credit risk/quality of the
relevant issuer and involves significant management judgment. In
particular, current publicly available information with regard to the
issuer and the particular security is considered relating to factors
including, but not limited to, evidence of significant financial diffi-
culty of the issuer and breach of contractual obligations of the secu-
rity, such as a default or delinquency on interest or principal pay-
ments. The Allianz Group also considers other factors which could
provide objective evidence of a loss event, including the probability
of bankruptcy and the lack of an active market due to financial diffi-
culty. The presence of either a decline in fair value below amortized
cost or the downgrade of an issuer's credit rating does not by itself
represent objective evidence of a loss event, but may represent objec-
tive evidence of a loss event when considered with other available
information.
DEFERRED TAX ASSETS1
4- Consolidation and
Deferred tax assets are determined based on tax loss carry-forwards, classification as held for sale
unused tax credits, and deductible temporary differences between
the Allianz Group's carrying amounts of assets and liabilities in its
consolidated balance sheet and their tax bases. Deferred tax assets
are recognized only to the extent it is probable that sufficient future
taxable income will be available for their realization. Assessments as
to the recoverability of deferred tax assets require the use of judg-
ment regarding assumptions related to estimated future taxable
profits. This includes the character and amounts of taxable future
profits, the periods in which those profits are expected to occur, and
the availability of tax planning opportunities.
The analysis and forecasting required in this process, and as a
result the determination of the deferred tax assets, is performed for
individual jurisdictions by qualified local tax and financial profes-
sionals. Given the potential significance surrounding the underlying
estimates and assumptions, group-wide policies and procedures
have been designed to ensure consistency and reliability around the
recoverability assessment process. Forecast operating results are
based upon approved business plans, which are themselves subject
to a well-defined process of control. As a matter of policy, especially
strong evidence supporting the recognition of deferred tax assets is
required if an entity has suffered a loss in either the current or pre-
ceding period.
42
13,915
2015
2016
Liabilities of disposal groups classified
as held for sale
Total
Real estate held for own use
Subtotal
Real estate held for investment
Non-current assets classified as held for sale
13,957
Subtotal
€ MN
as of 31 December
NON-CURRENT ASSETS AND DISPOSAL GROUPS CLASSIFIED AS HELD FOR SALE
CLASSIFICATION AS HELD FOR SALE
SIGNIFICANT CHANGES IN NON-CONTROLLING INTERESTS
During 2016 and 2015, no significant changes in non-controlling
interests occurred.
During 2016 and 2015, no significant acquisitions occurred.
SIGNIFICANT ACQUISITIONS
Due to changing market and economic conditions, the under-
lying assumptions may differ from actual developments. Potential
financial impacts from deviations in certain critical assumptions
based on respective sensitivity analyses are disclosed in note 40 Pen-
sions and similar obligations.
PENSION LIABILITIES AND SIMILAR OBLIGATIONS
Liabilities for pension and similar obligations and related net pen-
sion expenses are determined in accordance with actuarial valua-
tion models. These valuations rely on extensive assumptions. Key
assumptions including discount rates, inflation rates, compensation
increases, pension increases and rates of medical cost trends are
defined centrally at the Allianz Group level, considering the circum-
stances in the particular countries. In order to ensure their thorough
and consistent determination, all input parameters are discussed
and defined taking into consideration economic developments, peer
reviews, and currently available market and industry data.
Recognition and recoverability of all significant deferred tax
assets are reviewed by tax professionals at Group level and the Allianz
Group Tax Committee.
Assets of disposal groups classified as held for sale
Oldenburgische Landesbank AG, Oldenburg
Other disposal groups
AND SUBORDINATED LIABILITIES
19,533
14,856
20,497
21,283
3,378
3,226
(1,125)
(1,205)
(365)
(376)
Other income
Fee and commission income
Subtotal
Investment expenses
(1,199)
(1,208)
(59)
(51)
Operating impairments of investments (net)
(108)
(108)
1,527
(72)
1,474
1,331
(13,208)
(13,352)
excluding acquisition-related expenses and one-off effects from pension revaluation
Acquisition and administrative expenses (net),
Loan loss provisions
Change in reserves for insurance and investment contracts (net)²
Claims and insurance benefits incurred (net)
(13,550)
(12,477)
(460)
(561)
(20,986)
(22,584)
(30,721)
(30,576)
9
70
232
21
1,346
(85)
Interest expenses, excluding interest expenses from external debt
6,459
51,535
2015
2016
2015
2016
Life/Health
Property-Casualty
€ MN
BUSINESS SEGMENT INFORMATION - TOTAL REVENUES AND RECONCILIATION OF OPERATING PROFIT (LOSS) TO NET INCOME (LOSS)
BUSINESS SEGMENT INFORMATION - TOTAL REVENUES AND RECONCILIATION OF OPERATING PROFIT (LOSS)
TO NET INCOME (LOSS)
D - Consolidated Financial Statements
97
40
Annual Report 2016 - Allianz Group
848,942
883,809
Total liabilities and equity
66,099
70,392
51,597
64,636
66,903
Total revenues¹
6,612
252
285
Operating realized gains/losses (net)
(2,050)
(1,012)
(25)
(23)
Operating income from financial assets and liabilities carried at fair value
through income (net)
(6,612)
18,520
3,648
3,476
Interest and similar income
Operating investment result
24,215
23,769
46,430
46,588
Premiums earned (net)
18,204
(6,922)
Fee and commission expenses
(1,407)
3,790
3,707
5,784
5,835
(6)
(441)
181
465
(268)
(222)
(52)
(63)
(60)
(13)
(181)
Non-operating items
Reclassifications³
Non-operating amortization of intangible assets
One-off effects from pension revaluation
(1,677)
4,158
(1,660)
(1,127)
(1,169)
The Allianz Group records financial liabilities where non-controlling
investors have the right to put their equity instruments back to the
Allianz Group which primarily is the case for mutual funds controlled
but not wholly owned by the Allianz Group. These liabilities are gener-
ally required to be recorded at the redemption amount with changes
recognized in equity for put options over non-controlling interests
and in the income statement for redeemable fund units.
Annual Report 2016 - Allianz Group
98
3- From the classification of the Korean life business as "held for sale" in the second quarter of 2016 until its
disposal in the fourth quarter of 2016, the total result was considered as non-operating. Furthermore tax
reclassifications are included in this line.
2,478
143
137
2,443
143
3,981
155
4,003
Acquisition-related expenses
2- For the year ended 31 December 2016, includes expenses for premium refunds (net) in Property-Casualty
of € (255) MN (2015: € (240) MN).
Shareholders
Non-controlling interests
Net income (loss) attributable to:
Net income (loss)
Income taxes
Income (loss) before income taxes
2,621
2,581
4,124
1- Total revenues comprise statutory gross premiums written in Property-Casualty and Life/Health, operating
revenues in Asset Management and total revenues in Corporate and Other (Banking).
Total equity
Interest expenses from external debt
228
5,370
268
(149)
(149)
(6)
(3)
Reclassifications³
Other expenses
(32)
(91)
(149)
(94)
Restructuring charges
(19)
(19)
Operating amortization of intangible assets
(599)
(655)
(1,367)
5,603
4,148
3,796
Operating profit (loss)
(121)
424
524
Subtotal
(18)
(227)
(223)
(236)
Non-operating impairments of investments (net)
Income from fully consolidated private equity investments (net)
298
746
814
Non-operating realized gains/losses (net)
(51)
26
(99)
(53)
Non-operating income from financial assets and liabilities carried at fair value
through income (net)
Non-operating investment result
81
14,622
782,843
(32,018)
105,873
111,325
117,630
105,369
(6,980)
(5,427)
15,591
6,081
99
65
511,257
536,869
(108,454)
(84,295)
127,284
103,578
230
133
7,268
(78)
8,333
(54)
14,843
29
37,050
38,050
(15,772)
(14,965)
9,626
8,556
2,677
2,924
1,394
1,003
(1,712)
(1,904)
1,395
936
294
260
25,234
24,887
15,562
(495)
(398)
625
Annual Report 2016 - Allianz Group
96
625,088
651,611
115,702
116,668
Total liabilities
95
95
Subordinated liabilities
12
11
12
11
Certificated liabilities
3
3
15
Liabilities of disposal groups classified as held for sale
Asset Management
2016
2015
Corporate and Other
701
64
63
14,842
14,463
(541)
(187)
1,952
3,053
13,925
1,329
2015
2016
2015
Group
D - Consolidated Financial Statements
2016
2015
Consolidation
2016
1,155
(2)
14,196
109
24,256
25,283
2,750
2,925
4,003
4,822
(1,712)
(1,904)
80
188
16
29
105,873
111,325
486,222
505,460
(195)
(196)
(57)
(22,223)
(22,710)
39,867
38,686
12,258
13,530
(50)
(50)
(29,826)
71,130
71,830
2,940
3,133
12,213
72,003
13,485
7,615
(3,695)
(2,994)
12,054
10,586
18
13,290
(25)
13,306
8,383
813,417
72,373
(34)
2016
Corporate and Other
2015
2016
Asset Management
848,942
883,809
(134,008)
(107,256)
156,483
136,841
12,348
12,422
13,443
13,752
11
11
7,653
7,794
Consolidation
Group
2015
2016
20,660
21,360
(15)
(24)
25,531
13,038
(3,127)
(1,974)
21,777
(23)
9,207
(489)
(400)
750
615
8,424
174
174
2015
2016
2015
10,737
CERTIFICATED LIABILITIES
5
Total
DEFERRED ACQUISITION COSTS
10-Deferred acquisition costs
Reinsurance involves credit risk and is subject to aggregate loss
limits. Reinsurance does not legally discharge the respective Allianz
company from primary liability under the reinsured policies.
Although the reinsurer is liable to this company to the extent of the
business ceded, the Allianz company remains primarily liable as the
direct insurer on all the risks it underwrites, including the share that
is reinsured. The Allianz Group monitors the financial condition of
its reinsurers on a regular basis and reviews its reinsurance arrange-
ments periodically in order to evaluate the reinsurer's ability to fulfill
its obligations to the Allianz Group companies under existing and
planned reinsurance contracts. The Allianz Group's evaluation crite-
ria, which include the degree of creditworthiness, capital levels and
marketplace reputation of its reinsurers, are such that the Allianz
Group believes that its reinsurance credit risk is not significant, and
historically has not experienced noteworthy difficulty in collecting
claims from its reinsurers. Additionally, and as appropriate, the
Allianz Group may also require letters of credit, deposits, or other
financial guarantees to further minimize its exposure to credit risk.
In certain cases, however, the Allianz Group does establish an allow-
ance for doubtful amounts related to reinsurance as appropriate,
although this amount was not significant as of 31 December 2016 and
2015. The Allianz Group primarily maintains business relations with
highly rated reinsurers.
risks, the subsidiaries of the Allianz Group have individual reinsur-
ance programs in place. Allianz SE participates with up to 100% on an
arm's length basis in these cessions, in line with local requirements.
The risk coming from these cessions is also limited by external retro-
cessions.
110
14,843
15,562
Changes in aggregate policy reserves ceded to reinsurers are as follows:
Total
Other insurance reserves
7,712
5,366
5,211
Aggregate policy reserves
8,685
Reserves for loss and loss adjustment expenses
124
1,655
€ MN
2016
4,998
5,366
Carrying amount as of 1 January
18,941
18,780
Life/Health
as of 31 December
2015
4,647
4,782
Property-Casualty
CHANGES IN AGGREGATE POLICY RESERVES CEDED TO REINSURERS
€ MN
Deferred acquisition costs
2015
2016
Subtotal
1,543
2016
Loans
3,699
Short-term investments and certificates of deposit
2016
as of 31 December
LOANS AND ADVANCES TO BANKS AND CUSTOMERS
€ MN
99,883
to banks and customers
D - Consolidated Financial Statements
Annual Report 2016 - Allianz Group
102
371
299
80
8-Loans and advances
Unearned premiums
Other
Subtotal
as of 31 December
2015
€ MN
REINSURANCE ASSETS
9 — Reinsurance assets
As of 31 December 2016, impaired loans amounted to € 160 MN (2015:
€ 515 MN). The interest income recognized on these impaired loans
amounted to € 0.4 MN (2015: € 1 MN).
1,884
1-Includes loans and advances to banks and customers due within one year of € 11,677 MN (2015:
€ 11,216 MN).
113,573
1,258
117,936
3,106
2015
(97)
105,369
Loan loss allowance
Total¹
105,466
(307)
117,630
9
23,562
Foreign currency translation adjustments
Receivables
as of 31 December
€ MN
OTHER ASSETS
11- Other assets
D - Consolidated Financial Statements
Policyholders
103
25,234
24,887
Carrying amount as of 31 December
(151)
(9,589)
(9,544)
Annual Report 2016 - Allianz Group
2,279
2016
5,938
Subtotal
(647)
(632)
Less allowances for doubtful accounts
4,340
5,126
2015
Other
2,755
Reinsurers
4,379
4,217
Agents
6,013
2,264
23,588
(754)
257
25,234
24,887
Total
183
175
statements
Other changes
781
Changes recorded in the consolidated income
613
544
Present value of future profits
397
92
Deferred sales inducements
908
(422)
Carrying amount as of 31 December
Foreign currency translation adjustments
Changes in shadow accounting
Amortization
Reclassifications
31
Changes in the consolidated subsidiaries
of the Allianz Group
9,524
9,663
22,262
(212)
2015
Carrying amount as of 1 January
Additions
CHANGES IN DEFERRED ACQUISITION COSTS
€ MN
The Allianz Group reinsures a portion of the risks it underwrites
in an effort to control its exposure to losses and events and to protect
its capital resources. For natural catastrophe events, the Allianz
Group maintains a centralized program that pools exposures from
its subsidiaries by internal reinsurance agreements. Allianz SE limits
exposures in this portfolio through external reinsurance. For other
The reserves for loss and loss adjustment expenses ceded to reinsurers
in the business segment Property-Casualty amounted as of 31 Decem-
ber 2016 to € 8,119 MN (2015: € 7,228 MN). Their change is shown in the
respective table in note 15 Reserves for loss and loss adjustment
expenses.
5,366
5,211
2016
25,234
17,404
Share of other comprehensive income
Share of total comprehensive income
290
UNREALIZED LOSSES ON AVAILABLE-FOR-SALE
INVESTMENTS AND HELD-TO-MATURITY INVESTMENTS
D - Consolidated Financial Statements
101
Annual Report 2016 - Allianz Group
2-As of 31 December 2016, fair value and amortized cost of debt securities with a contractual maturity of
less than 12 months amount to € 294 MN (2015: € 397 MN) and € 287 MN (2015: € 365 MN), respectively.
1 - Also include corporate mortgage-backed securities.
DEBT SECURITIES
3,165
425
2,745
Fair value
2,544
621
(3)
62
562
(5)
(2)
Total unrealized losses amounted to € 3,558 MN as of 31 December
2016. The Allianz Group holds a large variety of government bonds
and corporate bonds, mostly of or domiciled in OECD countries.
The unrealized losses on the Allianz Group's investments in gov-
ernment bonds are spread over several countries with the main part
coming from Europe.
Cost as of 1 January
2015
2016
REAL ESTATE HELD FOR INVESTMENT
€ MN
REAL ESTATE HELD FOR INVESTMENT
€ MN
In general, the credit risk of government bonds is rather moderate
since they are backed by fiscal capacity of the issuers who typically
hold an investment-grade country- and/or issue-rating. During 2016,
interest rates of most government bonds decreased. The develop-
ment has been very volatile, however, leading to a slight increase in
unrealized losses on government bonds of € 198 MN.
ASSOCIATES AND JOINT VENTURES
INVESTMENTS IN ASSOCIATES AND JOINT VENTURES
As of 31 December 2016, unrealized losses amounted to € 192 MN
which is a decrease of € 209 MN compared to 31 December 2015. They
concern equity securities that did not meet the criteria of the Allianz
Group's impairment policy for equity instruments as described in
note 2 Accounting policies and new accounting pronouncements.
The major part of these unrealized losses has been in a continuous
loss position of less than 6 months.
EQUITY SECURITIES
Based on a detailed analysis of the underlying securities, the
Allianz Group did not consider these investments to be impaired as
of 31 December 2016.
The main impact from unrealized losses on corporate bonds
comes from the financial and energy sector.
For the vast majority of corporate bonds, the issuer/the issues
have an investment grade. The decrease in unrealized losses of
€ 2,577 MN compared to 31 December 2015 is due to decreasing interest
rates.
As of 31 December 2016, loans to associates and joint ventures as well
as available-for-sale debt securities issued by associates and joint
ventures held by the Allianz Group amounted to € 1,381 MN (2015:
€ 2,195 MN).
15,113
363
gains
Amortized
2015
2016
as of 31 December
€ MN
HELD-TO-MATURITY INVESTMENTS
Unrealized
HELD-TO-MATURITY INVESTMENTS
1-As of 31 December 2016, fair value and amortized cost of bonds from countries with a rating below AA
amount to € 73,519 MN (2015: € 73,968 MN) and € 67,571 MN (2015: € 67,028 MN), respectively.
488,365
(6,256)
52,396
442,226
512,268
2-As of 31 December 2016, fair value and amortized cost of debt securities with a contractual maturity of
less than 12 months amount to € 30,420 MN (2015: € 28,952 MN) and € 29,807 MN (2015: € 28,361 MN),
respectively.
Unrealized
losses
cost
Unrealized
losses
Unrealized
Amortized
cost
2,184
2,343
462
2,805
(1)
407
2,399
gains
Total²
65
398
342
2,001
Government and government agency bonds
Corporate bonds¹
Fair value
(1)
292
14,403
(3,136)
2
Changes in the consolidated subsidiaries
of the Allianz Group
Disposals
622
719
1,465
1,763
(197)
(819)
Accumulated depreciation as of 1 January
Carrying amount as of 1 January
Additions
2,284
2,151
Cost as of 1 January
2015
2016
(387)
€ MN
(3)
5
Share of earnings
2015
2016
Foreign currency translation adjustments
Depreciation
1- Include fixed assets of wind parks and solar parks.
2,151
(3)
2,868
472
1,763
2,397
Carrying amount as of 31 December
Accumulated depreciation as of 31 December
Cost as of 31 December
(130)
(83)
387
Accumulated depreciation as of 1 January
Carrying amount as of 1 January
Additions
FIXED ASSETS OF RENEWABLE ENERGY INVESTMENTS1
As of 31 December 2016, real estate held for investment pledged as
security and other restrictions on title were € 36 MN (2015: € 36 MN).
(283)
(14)
(330)
(425)
assets and assets of disposal groups classified as
held for sale
Reclassifications
Disposals and reclassifications into non-current
(1)
247
Changes in the consolidated subsidiaries
of the Allianz Group
1,025
410
11,349
11,977
(3,054)
(1)
FIXED ASSETS OF RENEWABLE ENERGY INVESTMENTS
218
(251)
Carrying amount as of 31 December
Accumulated depreciation as of 31 December
Cost as of 31 December
Reversals of impairments
Impairments
Foreign currency translation adjustments
Depreciation
15,113
14,691
(257)
3,136
11,977
11,732
40
59
(37)
(17)
2,959
16,349
Tax receivables
Income taxes
12,372
Carrying amount as of 31 December
Impairments
352
58
Foreign currency translation adjustments
(171)
12,101
Disposals
Additions
12,101
Carrying amount as of 1 January
(976)
Accumulated impairments as of 1 January
13,156
214
13,077
Accumulated impairments as of 31 December
Cost as of 31 December
12,812
Insurance Western & Southern Europe, Middle East and Africa,
including Belgium, France, Greece, Italy, Luxembourg, the Nether-
lands, Turkey, Middle East and Africa,
Insurance German Speaking Countries,
CGUS in the Property-Casualty business segment are:
For the purpose of impairment testing, the Allianz Group has allo-
cated goodwill to CGUS¹. These CGUS represent the lowest level at
which goodwill is monitored for internal management purposes.
Allocation principles
IMPAIRMENT TEST FOR GOODWILL
440
As a result of the impairment test, all of the goodwill of € 171 MN
allocated to the CGU Asia Pacific in the business segment Life/Health
was completely impaired.
Additions are mainly related to goodwill arising from the acquisition
of the Property-Casualty insurance business of the Territory Insurance
Office, Darwin, effective 1 January 2015, as well as from the acquisition
of several windparks.
2015
Additions are mainly related to goodwill arising from the acquisition
of Allianz Maroc S.A. (formerly Zurich Assurance Maroc S.A.), Casa-
blanca, effective 3 November 2016, Allianz C.P. General Insurance,
Bangkok, effective 3 October 2016, Rogge Global Partners Ltd., London,
effective 31 May 2016, several insurance portfolios in the Netherlands
and several windparks.
(316)
2016
976
13,077
Disposals relate mainly to the sale of Selecta Group S.à r.l., Luxem-
bourg during the fourth quarter of 2015.
Insurance Iberia & Latin America, including Mexico, Portugal,
South America and Spain,
Cost as of 1 January
2016
951
12,101
12,372
2016
2015
Total
899
Other³
Acquired business portfolios²
Distribution agreements¹
Goodwill
as of 31 December
€ MN
INTANGIBLE ASSETS
Customer relationships
2015
172
122
70
(990)
12,166
€ MN
GOODWILL
GOODWILL
3-Primarily includes heritable building rights, land use rights, lease rights and brand names.
186
2- Primarily includes the acquired business portfolio of Allianz Yasam ve Emeklilik A.S. of € 98 MN (2015:
€120 MN).
1- Primarily includes the long-term distribution agreements with Commerzbank AG of € 261 MN (2015:
€ 298 MN), Banco Popular S.A. of €371 MN (2015: € 389 MN), Yapı ve Kredi Bankası A.S. of € 96 MN (2015:
13,443
13,752
141
136
116
€ 122 MN), Philippine National Bank of € 83 MN (2015: €- MN) and HSBC Asia, HSBC Turkey, BTPN Indonesia
and Maybank Indonesia of € 133 MN (2015: € 79 MN).
12- Intangible assets
Insurance Asia Pacific,
Specialty Lines I, including Allianz Re, Allianz Global Corporate &
Specialty and Credit Insurance, and
611
629
Insurance German Speaking Countries
LIFE/HEALTH
2,448
2,553
Health Germany
Subtotal
21
Specialty Lines II
39
39
Specialty Lines I
386
21
376
330
Insurance Western & Southern Europe,
12,372
7,566
7,702
2,087
2,117
Subtotal
327
471
Insurance USA
23
Insurance Central and Eastern Europe
654
655
Middle East and Africa
481
Insurance Central and Eastern Europe, including Bulgaria, Croatia,
Czech Republic, Hungary, Poland, Romania and Slovakia,
Global Insurance Lines & Anglo Markets, including Australia,
Ireland, Russia, Ukraine and the United Kingdom,
Global Insurance Lines & Anglo Markets
292
€ MN
ALLOCATION OF CARRYING AMOUNTS OF GOODWILL TO CGUS
The carrying amounts of goodwill are allocated to the Allianz
Group's CGUS as of 31 December 2016 and 2015, as follows:
D - Consolidated Financial Statements
105
1- The following paragraphs only include the CGUS that contain goodwill.
as of 31 December
Annual Report 2016 - Allianz Group
The business segment Asset Management is represented by the CGU
Asset Management, including mainly Allianz Global Investors and
Insurance Central and Eastern Europe, including Bulgaria, Croatia,
Czech Republic, Hungary, Poland, Romania and Slovakia, and
Insurance USA.
Insurance Western & Southern Europe, Middle East and Africa,
including Belgium, France, Greece, Italy, Luxembourg, the Nether-
lands, Turkey, Middle East and Africa,
Insurance German Speaking Countries,
Health Germany,
CGUS in the Life/Health business segment are:
Specialty Lines II, including Allianz Worldwide Partners.
PIMCO.
292
PROPERTY-CASUALTY
2015
Insurance Central and Eastern Europe
101
Insurance Asia Pacific
21
Insurance Iberia & Latin America
1,418
2016
Middle East and Africa
285
Insurance German Speaking Countries
81
21
1,327
281
Insurance Western & Southern Europe,
D - Consolidated Financial Statements
Annual Report 2016 - Allianz Group
104
Software
for own use
Equipment
Software
Real estate held
Real estate held
for own use
Equipment
2015
€ MN
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT
1-Includes other assets due within one year of € 32,767 MN (2015: € 31,068 MN).
37,050
38,050
2016
1,664
Cost as of 1 January
Carrying amount as of 1 January
1,291
2,142
2,566
1,426
2,361
3,261
Accumulated depreciation as of 1 January
3,867
(2,576)
(1,071)
6,360
3,637
4,254
(2,828)
6,671
(4,310)
4,345
(1,084)
(4,218)
Additions
1,756
7,141
328
390
Prepaid expenses
7,887
7,257
Accrued dividends, interest and rent
Derivative financial instruments used for hedging
3,210
Subtotal
1,512
1,615
Other taxes
1,698
1,809
3,424
7,048
that meet the criteria for hedge accounting and
677
1,426
1,477
2,361
2,640
3,261
3,024
firm commitments
Total¹
Subtotal
Equipment
Software
Real estate held for own use
Property and equipment
565
Other assets
Changes in the consolidated subsidiaries of the Allianz Group
94
818
3,261
1,477
2,6402
3,0241
Carrying amount as of 31 December
4
2,361
13
(38)
(1)
(9)
(3)
(278)
(430)
(13)
(74)
1,426
Cost as of 31 December
2-As of 31 December 2016, includes € 1,708 MN (2015: € 1,534 MN) for self-developed software and € 932 MN
(2015: € 827 MN) for software purchased from third parties.
1-As of 31 December 2016, assets pledged as security and other restrictions on title were € 121 MN (2015:
€ 121 MN).
4,254
6,671
4,345
4,381
Accumulated depreciation as of 31 December
7,283
2,828
4,310
1,084
2,904
4,643
971
3,995
(275)
(491)
(76)
(129)
(35)
(152)
Disposals and reclassifications into non-current assets and assets
of disposal groups classified as held for sale
63
(15)
(110)
84
(31)
(56)
435
796
183
392
15
(102)
(94)
Reclassifications
Reversals of impairments
Impairments
Depreciation/Amortization
30
8
16
3
2
(18)
(10)
593
47
26
(41)
Foreign currency translation adjustments
(3,750)
56,908
459,109
Total
(31)
(1,377)
(1,414)
2,266
2,194
(539)
(267)
(541)
(8)
(432)
(547)
(31)
(10)
(62)
(250)
(383)
10,292
(784)
7,250
(204)
95
(1,003)
(994)
1,449
10,196
1,411
(3,042)
63
126
374
420
(817)
(3,209)
6,987
(62)
(304)
(52)
724
833
(181)
107
252
(8)
322
(681)
(27)
(217)
1,211
1,503
(170)
(268)
(115)
(60)
(849)
(135)
(8)
(11)
(11)
(12)
224
(858)
(31)
2
1
11
2
(849)
(858)
12
108
66
Annual Report 2016 - Allianz Group
1,283
1,105
1,798
1,642
10,915
11,031
Iberia & Latin America
11,855
Africa, India
Western & Southern Europe, Middle East,
1,147
1,394
1,683
1,573
12,170
11,741
4,552
3,381
1,512
1,560
1,846
1,846
15,994
15,725
4,566
21,931
Global Insurance Lines & Anglo Markets
37
(38)
74
102
3,741
22,113
1,344
12,111
14,465
99
6,616
6,883
371
367
(1)
(203)
D - Consolidated Financial Statements
99
(3)
14
(1,006)
12
1,378
71
(1,017)
14,061
RECONCILIATION OF REPORTABLE SEGMENTS TO ALLIANZ GROUP FIGURES
€ MN
and Central & Eastern Europe
German Speaking Countries
2015
2016
2015
Net income (loss)
RECONCILIATION OF REPORTABLE SEGMENTS TO ALLIANZ GROUP FIGURES
2016
2015
2016
2015
2016
Premiums earned (net)
Total revenues¹
Operating profit (loss)
337
500
(219)
270
235
(454)
(379)
(12)
(11)
(349)
6,726
15
3
(2,089)
(1,010)
9
1
6,900
(15)
(375)
(1,258)
24,433
25,125
333
370
237
245
(1,259)
(13)
(1,215)
(1,306)
360
376
(85)
(100)
1
7,401
18
6
2016
2015
Group
D - Consolidated Financial Statements
Consolidation
551
2015
6,479
Corporate and Other
2015
6,022
2016
Asset Management
Valuation techniques
2016
(8)
2016
(328)
22,643
22,149
(321)
(244)
790
707
577
7
70,645
70,357
125,190
2015
122,416
(365)
6
8,011
1,066
974
(5)
149
149
(2)
(231)
(186)
(8)
(9)
(1)
(19)
(19)
(3,777)
(3,734)
457
(41)
535
115
383
11
(10)
(1)
(58)
40
10,735
62
10,833
(23)
(945)
(867)
2,297
2,205
62
(16)
(745)
(825)
(1,523)
5
5
241
100
(153)
(154)
(53,156)
149
4
3
10,945
10,491
(845)
(850)
160
(51,702)
(135)
(55)
(1,382)
(25,729)
(25,303)
30
(58)
(1,489)
(1,466)
(4,141)
(3,817)
(60)
(46)
(60)
(46)
(14,065)
(13,173)
Asia Pacific
12,101
745
490
1,582
2,433
Derivative financial instruments
11,977
11,732
Real estate held for investment
Subtotal
187
Equity securities
5,056
7,161
Investments in associates and joint ventures
489
264
210
Debt securities
2,907
Fixed assets of renewable energy investments
Total
2,365
2,457
Total
Subtotal
Equity securities
2,645
2,258
2,970
through income
Financial assets designated at fair value
511,257
536,869
1,763
2,397
Debt securities
5,426
1,349
contracts assumed
7- Investments
at fair value through income
6- Financial assets carried
NOTES TO THE CONSOLIDATED BALANCE SHEETS
Annual Report 2016 - Allianz Group
100
D - Consolidated Financial Statements
2- From the classification of the Korean life business as "held for sale" in the second quarter of 2016 until its
disposal in the fourth quarter of 2016, the total result was considered as non-operating.
6,987
7,250
10,735
10,833
70,645
70,357
1- Total revenues comprise statutory gross premiums written in Property-Casualty and Life/Health, operating
revenues in Asset Management and total revenues in Corporate and Other (Banking).
912
FINANCIAL ASSETS CARRIED AT FAIR VALUE THROUGH INCOME
€ MN
€ MN
Funds held by others under reinsurance
Financial assets held for trading
2,745
2,399
Held-to-maturity investments
2015
INVESTMENTS
2016
488,365
512,268
2015
2016
Available-for-sale investments
as of 31 December
as of 31 December
(204)
5,010
7,268
44,259
428,787
Subtotal²
(17)
753
3,569
(3,557)
Other
(236)
609
21,042
21,396
(303)
441
21,414
21,258
4,305
469,489
588
40,624
(402)
12,119
447,742
(5,854)
40,276
3,357
413,320
28,906
(192)
12,649
30,323
Equity securities
3,938
(7)
42,779
8,333
MBS/ABS
(1,462)
Unrealized
losses
Unrealized
gains
Amortized
cost
Fair value
Unrealized
losses
gains
Fair value
Unrealized
2015
2016
as of 31 December
€ MN
AVAILABLE-FOR-SALE INVESTMENTS
AVAILABLE-FOR-SALE INVESTMENTS
Amortized
cost
202,023
Debt securities
230,504
26,398
177,087
198,914
(1,663)
27,121
173,456
Corporate bonds
Government and government agency bonds¹
(4,149)
12,681
211,835
244,874
(1,575)
15,944
220,367
95
(16)
(23)
1,997
Iberia & Latin America
935
869
1,062
1,145
2,037
4,587
23,591
20,808
Africa, India
Western & Southern Europe, Middle East,
1,133
1,134
4,713
1,707
526
264
587
Global Insurance Lines & Anglo Markets
594
685
841
960
653
1,193
10,475
11,856
USA
157
188
231
1,144
634
1,660
14,593
89
97
128
150
3,538
3,850
Consolidation
3,975
Allianz Worldwide Partners
55
41
74
58
501
4,185
15,115
Total Property-Casualty
(5,565)
24,058
24,922
and Central & Eastern Europe
German Speaking Countries
4,124
4,158
(6,695)
5,603
46,430
46,588
51,597
51,535
1
(2)
5,370
390
494
30
575
549
(1,110)
(1,029)
(1,076)
(981)
74
Consolidation
551
Total Corporate and Other
2
2
Consolidation
Alternative Investments
577
Banking
94
70
125,190
(365)
(328)
122,416
Group
(1,003)
9
(994)
(867)
5
36
21
37
39
(945)
Holding & Treasury
1,449
1,411
(924)
Consolidation
(224)
(326)
(83)
842
(666)
2,172
6,774
5,390
Asia Pacific
36
25
47
2,402
6
(10)
6
2,297
2,205
6,479
6,022
Asset Management
2,621
2,581
3,796
4,148
24,215
23,769
66,903
64,636
Total Life/Health
(10)
774
ASSET MANAGEMENT
1,033
1,331
Current year
35,402
(2,741)
32,661
(2,735)
32,646
Prior years
Subtotal
(2,530)
445
(2,084)
(2,373)
448
(1,924)
32,872
(2,296)
30,576
33,008
(2,287)
30,721
Loss and loss adjustment expenses paid
Current year
Prior years
Loss and loss adjustment expenses incurred
Subtotal
55,619
62,522
Gross
Ceded
Net
Gross
Ceded
Net
As of 1 January
61,169
(7,228)
53,942
58,925
(6,577)
52,348
Balance carry forward of discounted loss reserves
Subtotal
3,882
(332)
3,550
3,597
(326)
3,271
65,051
(7,560)
57,492
(6,903)
2015
Foreign currency translation adjustments and other changes¹
Ending balance of discounted loss reserves
(39)
1
(38)
65,671
(8,417)
57,254
65,051
(7,560)
57,492
(4,055)
61,617
298
(8,119)
(3,757)
(3,882)
332
(3,550)
53,497
61,169
(7,228)
53,942
1- Include effects of foreign currency translation adjustments for prior years' claims of gross € 116 MN (2015:
€1,423 MN) and of net € (41) MN (2015: € 1,272 MN) and for current year claims of gross € (55) MN (2015:
€ (234) MN) and of net € (68) MN (2015: € (195) MN).
108
Annual Report 2016 - Allianz Group
265
Changes in the consolidated subsidiaries of the Allianz Group
Subtotal
(7)
1,221
As of 31 December
(17,291)
883
(16,409)
(17,123)
832
(16,291)
(15,640)
646
(14,994)
(15,071)
(13,740)
(32,932)
1,529
(31,403)
(32,194)
2,163
(30,031)
407
(84)
323
1,755
(534)
272
2016
35,381
As of 31 December 2016, the reserves for loss and loss adjustment
expenses of the Allianz Group amounted in total to € 72,373 MN (2015:
€ 72,003 MN). The following table reconciles the beginning and ending
reserves for the Property-Casualty business segment for the years
ended 31 December 2016 and 2015.
1.5
8.5
1.0
7.9
1.0
8.0
1.0
1- The table provides an overview of weighted key parameters on CGU level of the country-specific discount
rates and eternal growth rates used.
106
Annual Report 2016 - Allianz Group
D - Consolidated Financial Statements
For entities included in the CGUS of the business segment Life/Health,
the MCEV is the excess of assets over liabilities of the MVBS according
to the Solvency II requirements. Assets and liabilities included in the
MVBS are measured at their market value as of the reporting date.
Technical provisions are an essential part of the liabilities included
in the MVBS and generally consist of the best estimate plus a risk mar-
gin. The best estimate corresponds to the probability-weighted aver-
age of future cash flows considering the time value of money, using
the relevant risk-free interest rate term structure. The calculation of
the best estimate is based on assumptions made for demographic
factors (e.g. mortality, morbidity, lapse/surrender rates), expense
allowances, taxation, assumptions on market conditions for market
consistent projections (e.g. reference rates, volatilities) as well as
investment strategy and asset allocation of the entity. The risk margin
ensures that the value of the technical provisions is equivalent to the
amount that the entity would be expected to require in order to take
on and meet the insurance and reinsurance obligations.
Reference rates used for the calculation of the best estimate follow
EIOPA specifications for the Solvency II guidance.
The following table provides an overview of the reference rates
for the CGUS in the Life/Health business segment:
Sensitivity analysis
Sensitivity analyses were performed with regard to discount rates
and key value drivers of the business plans.
For the CGUS in the business segment Property-Casualty and for
the CGU Asset Management, sensitivity analyses were performed in
respect to the long-term sustainable combined ratios and cost-
income ratios. For all CGUS, excluding Property-Casualty Asia Pacific,
discounted earnings value sensitivities still exceeded their respective
carrying amounts. The recoverable amount of the CGU Asia Pacific in
the business segment Property-Casualty slightly exceeds its carrying
amount. An increase of less than 50 basis points in the discount rate
or the combined ratio results in the recoverable amount of the CGU
getting close to its carrying amount.
In the business segment Life/Health sensitivity analyses were
performed based on MCEV sensitivity testing on the reference rate.
The analyses have shown that in case of a decrease in reference rates
by 50 basis points the appraisal value of each CGU still exceeds its
carrying amount.
REFERENCE RATES FOR THE CGUS IN THE LIFE/HEALTH BUSINESS SEGMENT
CGUS in the Life/Health
business segment
Insurance German
Speaking Countries
Health Germany
Insurance Western &
Southern Europe,
Middle East and Africa
Insurance Central
and Eastern Europe
9.2
3.5
11.5
3.4
23
The recoverable amounts for all CGUS are determined on the basis of
value in use calculations. The Allianz Group applies generally
acknowledged valuation principles to determine the value in use.
For all CGUS in the Property-Casualty business segment and for
the CGU Asset Management, the Allianz Group uses the discounted
earnings method to derive the value in use. Generally, the basis for
the determination of the discounted earnings value is the business
plan ("detailed planning period") as well as the estimate of the sus-
tainable returns and eternal growth rates, which can be assumed to
be realistic on a long-term basis ("terminal value") for the operating
entities included in the CGU. The discounted earnings value is calcu-
lated by discounting the future earnings using an appropriate dis-
count rate. The business plans applied in the value in use calculations
are the results of the structured management dialogues between the
Board of Management of the Allianz Group and the operating entities
in connection with a reporting process integrated into these dialogues.
Generally, the business plans comprise a planning horizon of three
years and are based on the current market environment.
The terminal values are largely based on the expected profits of
the final year of the detailed planning period. Where necessary, the
planned profits are adjusted to reflect long-term sustainable earn-
ings. The financing of the assumed eternal growth in the terminal
values is accounted for by appropriate profit retention.
For all CGUS in the Life/Health business segment the value in use
is based on an Appraisal Value method which is derived from the
Embedded Value and new business value calculation. As a starting
point for the impairment test for the CGUS in the Life/Health business
segment, the Market Consistent Embedded Value (MCEV) and a mul-
tiple of the Market Consistent Value of New Business is used. MCEV is
an industry-specific valuation method to assess the current value of
the in-force portfolio. The Allianz Group uses an economic balance
sheet approach to derive the MCEV, which is directly taken out of the
market value balance sheet (MVBS) as determined using Solvency II
guidance. In case where no adequate valuation reflecting a long-term
view in line with management judgment and market experience
could be derived from market consistent methodology, the Appraisal
Value can be derived from a Traditional Embedded Value (TEV) which
was the case for the United States.
Significant assumptions
In determining the business plans, certain key assumptions were
made in order to project future earnings.
For entities included in the CGUS of the Property-Casualty busi-
ness segment, the business plans are mainly based on key assump-
tions including expense ratio, loss ratio, investment income, risk
capital, market share, premium rate changes and taxes. The basis for
determining the values assigned to the key assumptions are current
market trends and earnings projections.
The discount rate is based on the capital asset pricing model
(CAPM) and appropriate eternal growth rates. The assumptions,
including the risk-free interest rate, market risk premium, segment
beta and leverage ratio used to calculate the discount rates, are in
general consistent with the parameters used in the Allianz Group's
planning and controlling process. The discount rates and eternal
growth rates for the CGUS in the Property-Casualty business segment
are as follows:
DISCOUNT RATES AND ETERNAL GROWTH RATES FOR THE CGUS
IN THE PROPERTY-CASUALTY BUSINESS SEGMENT'
%
Insurance USA
CGUS in the Property-Casualty business segment
Insurance German Speaking Countries
Insurance Western & Southern Europe,
Middle East and Africa
Insurance Central and Eastern Europe
Global Insurance Lines & Anglo Markets
Specialty Lines I
Specialty Lines II
Eternal
Discount rate
growth rate
7.7
CHANGE IN THE RESERVES FOR LOSS AND LOSS ADJUSTMENT EXPENSES IN THE PROPERTY-CASUALTY BUSINESS SEGMENT
€ MN
9.5
2.5
12.2
Insurance Iberia & Latin America
Insurance Asia Pacific
Reference rate for entities
1.0
Euro swap curve minus 10 bps credit risk adjustment
plus 13 bps volatility adjustment
Other
8,101
13,631
Total¹
13,038
25,531
1- Consists of liabilities to banks and customers due within one year of € 10,193 MN (2015: € 19,968 MN),
1-5 years of €2,256 MN (2015: € 3,404 MN) and over 5 years of € 590 MN (2015: € 2,159 MN).
14 Unearned premiums
UNEARNED PREMIUMS
€ MN
as of 31 December
6,495
Property-Casualty
Total
2016
2015
17,276
17,071
4,108
(24)
21,360
3,605
(15)
20,660
15 – Reserves for loss and loss adjustment
expenses
with Appraisal Value based on MCEV
Life/Health
4,040
Consolidation
Repurchase agreements and collateral received
CHF Swap curve minus 10 bps credit risk adjustment
plus 5 bps volatility adjustment
from securities lending transactions and derivatives
Euro swap curve minus 10 bps credit risk adjustment
plus 13 bps volatility adjustment
Euro swap curve minus 10 bps credit risk adjustment
plus 13 bps volatility adjustment
For those entities reporting in Euro:
Euro swap curve minus 10 bps credit risk adjustment
plus 13 bps volatility adjustment
For other entities:
Local swap curve minus 15 bps credit risk adjustment
plus 52 bps volatility adjustment
The new business value calculation is based on a best estimate of one
year of value of new business, multiplied by a factor (multiple) to
capture expected future new business. The best estimate of new busi-
ness is generally derived from the achieved value of new business.
The new business multiple accounts for the risk and the growth asso-
ciated with future new business in analogy to the discount rate and
the growth rate in a discounted earnings method. For all CGUS in the
Life/Health business segment, a multiple of not more than ten times
the value of new business is applied.
For entities included in the CGU of the Asset Management busi-
ness segment, key assumptions include assets under management
growth, cost-income ratio and risk capital. The key assumptions are
based on the current market environment. The discount rate for the
CGU Asset Management is 9.7% and the eternal growth rate is 1.0%.
Annual Report 2016 - Allianz Group
107
Local swap curve minus 10 bps credit risk adjustment
plus volatility adjustment for the following currencies
only (HRK: 9 bps, CZK: 1 bps, PLN: 18 bps)
D - Consolidated Financial Statements
13 — Liabilities to banks and customers
LIABILITIES TO BANKS AND CUSTOMERS
€ MN
as of 31 December
2016
2015
Payable on demand and other deposits
897
5,405
69.4
70.3
2016
46,588
71.1
69.9
69.5
72.4
67.9
71.1
69.1
The ultimate loss of an accident year comprises all payments made
for that accident year up to the reporting date, plus the loss reserve
at the reporting date. Given complete information regarding all losses
incurred up to the reporting date, the ultimate loss for each accident-
year period would remain unchanged. In practice, however, the ulti-
mate loss (based on estimates) is exposed to fluctuations that reflect
the increase in knowledge regarding the loss cases. The loss ratio
presented above deviates from the reported loss ratio because the
ultimate loss in the table above is based on the sum of the payments
plus the loss reserve, not the incurred loss from the consolidated
income statement. This means that effects like changes in consoli-
dated subsidiaries, foreign currency translation and reclassification
of unwinding of discounted loss reserves are presented differently.
69.8
70.8
70.1
72.9
72.7
43,759
2014
CONTRACTUAL CASH FLOWS
71.6
70.2
71.1
68.3
68.9
70.0
2015
46,430
71.4
70.1
71.1
70.3
As of 31 December 2016, reserves for loss and loss adjustment expenses,
which are expected to be due in 2017 amounted to € 16,849 MN, while
those expected to be due between 2018 and 2021 amounted to
€ 13,779 MN and those expected to be due after 2021 amounted to
15,020
110
486,222
69.9
(36)
of the Allianz Group
1,178
Changes in the consolidated subsidiaries
59,732
29
15,400
7
Foreign currency translation adjustments
425,312
433,748
70,664
1,048
505,460
Total
As of 1 January
2015
2016
Amounts already allocated under local statutory
or contractual regulations
Annual Report 2016 - Allianz Group
16-Reserves for insurance
and investment contracts
D - Consolidated Financial Statements
RESERVES FOR PREMIUM REFUNDS
RESERVES FOR PREMIUM REFUNDS
€ MN
€ 26,626 MN.
RESERVES FOR INSURANCE AND INVESTMENT CONTRACTS
as of 31 December
Aggregate policy reserves
Reserves for premium refunds
Other insurance reserves
2016
2015
€ MN
69.2
Foreign currency translation adjustments
71.1
%
%
€ MN
2016
2015
2014
2013
2012
2011
2010
Accident year
Premiums
earned
(net)
CALENDAR YEAR PREMIUMS EARNED AND ULTIMATE LOSS RATIO FOR THE INDIVIDUAL ACCIDENT YEARS AT THE RESPECTIVE REPORTING DATE (NET)
FOR THE INDIVIDUAL ACCIDENT YEARS AT THE RESPECTIVE REPORTING DATE (NET)
CALENDAR YEAR PREMIUMS EARNED AND ULTIMATE LOSS RATIO
2009
2008
Changes
Reduction 2016 to 2015²
327
136
79
109
%
97
285
315
438
9,507
1,951
1- Includes effects from foreign currency translation adjustments and other changes.
2- The total development 2016 to 2015 of € 1,951 MN represents the cumulative surplus from reestimating
the ultimate loss for prior year claims. Considering foreign currency translation adjustments of net
€ (41) MN as well as changes in the consolidated subsidiaries of the Allianz Group and other changes of
in total € 174 MN, this leads to an effective run-off result of net € 2,084 MN, which can be found in the table
"Change in the reserves for loss and loss adjustment expenses" within this note.
3-Presentation not meaningful.
164
%
%
%
71.2
71.9
75.0
2012
41,705
72.3
73.3
71.2
74.2
72.0
2013
42,047
71.9
70.6
71.9
72.8
39,898
73.3
%
%
%
2008
38,213
71.6
2011
2009
73.5
72.5
2010
39,303
74.1
72.7
37,828
731
110,407
As of 31 December
Total
Financial
liabilities for
unit-linked
contracts
Reserves for
insurance and
investment
contracts
Total
281,708
176,811
64,702
112,109
9,526
272,181
Financial
liabilities for
unit-linked
contracts
investment
contracts
Reserves for
insurance and
2015
2016
Annual Report 2016 - Allianz Group
Total
Consolidation
Asia Pacific
1,368
(16,145)
(1,652)
(270)
1,108
1- Mainly relate to insurance contracts when policyholders change their contract from a unit-linked to a
universal life-type contract.
CONCENTRATION OF INSURANCE RISK
IN THE LIFE/HEALTH BUSINESS SEGMENT
The Allianz Group's Life/Health business segment provides a wide
variety of insurance and investment contracts to individuals and
groups in over 30 countries around the world. Individual contracts
include both traditional contracts and unit-linked contracts. Without
taking policyholder participation into account, traditional contracts
generally incorporate significant investment risk for the Allianz
Group, while unit-linked contracts generally result in the contract
holder assuming the investment risk. Traditional contracts include
life, endowment, annuity and health contracts. Traditional annuity
contracts are issued in both deferred and immediate types. In addition,
the Allianz Group's life insurance operations in the United States
issue a significant amount of equity-indexed deferred annuities. In
certain markets, the Allianz Group also issues group life, group
health and group pension contracts.
As of 31 December 2016 and 2015, the Allianz Group's reserves for
insurance and investment contracts for the business segment Life/
Health are summarized per reportable segment as follows:
254,552
CONCENTRATION OF INSURANCE RISK IN THE LIFE/HEALTH BUSINESS SEGMENT PER REPORTABLE SEGMENT
as of 31 December
German Speaking Countries and Central & Eastern Europe
Western & Southern Europe, Middle East, Africa, India
Iberia & Latin America
USA
Global Insurance Lines & Anglo Markets
€ MN
90
9,025
438
577,883
105,873
472,010
602,202
111,325
490,876
(3,625)
(3,625)
(3,413)
(3,413)
29,432
10,568
18,864
19,575
10,298
9,277
1,947
59,826
9,590
505
90,094
26,294
10,095
116,388
263,577
9,359
80,506
25,999
170,233
9,813
106,505
1,038
1,038
1,947
454
3,882
425,312
4,055
433,748
As of 31 December
44,332
54,563
As of 31 December
(3,597)
(3,882)
Balance carry forward of discounted loss reserves
4,743
5,220
to income
399,227
425,312
As of 1 January
Changes due to valuation differences charged
2015
2016
(8,629)
4,980
16,101
15,400
Latent reserves for premium refunds
As of 1 January
AGGREGATE POLICY RESERVES
44,332
Subtotal
48,006
41
211
CHANGES IN AGGREGATE POLICY RESERVES
€ MN
Changes in the consolidated subsidiaries
of the Allianz Group
(10)
Changes due to fluctuations in market value
Foreign currency translation adjustments
421,430
395,631
Total
5,319
Dividends allocated to policyholders
1,224
Releases upon death, surrender and withdrawal
(15,719)
Policyholder charges
4,535
(1,643)
Other changes¹
(9)
1,757
Subtotal
429,693
421,430
Ending balance of discounted loss reserves
Portfolio acquisitions and disposals
351
Interest credited
Separation of embedded derivatives
70,664
59,732
Foreign currency translation adjustments
2,820
9,358
Changes in the consolidated subsidiaries
(555)
of the Allianz Group
Changes recorded in the consolidated income
statement
196
Premiums collected
25,945
2,546
24,076
(10,287)
381
5,182
1,673
2007 &
Accident year
RESERVES FOR LOSS AND LOSS ADJUSTMENT EXPENSES FOR THE INDIVIDUAL ACCIDENT YEARS AT THE RESPECTIVE REPORTING DATE (NET)
€ MN
FOR THE INDIVIDUAL ACCIDENT YEARS AT THE RESPECTIVE REPORTING DATE (NET)
RESERVES FOR LOSS AND LOSS ADJUSTMENT EXPENSES
31,403
16,409
7,929
2,007
1,004
727
546
364
260
217
1,939
2016
7,009
15,410
28,702
2015
1,365
262
as of 31 December
395
775
1,054
1,850
7,564
16,291
30,031
476
1,890
prior
2009
15,596
7,218
5,147
4,337
20,538
2011
50,850
14,729
7,456
5,666
23,000
2010
48,539
14,074
7,620
26,845
2009
2010
2011
2012
2013
2014
2015
2008
2016
48,677
Total
48,677
2008
33,574
14,222
47,796
2007
1,169
729
465
5,449
2009
25,135
13,130
12,005
2008
Total
24,886
24,886
2007
2016
2015
2014
2013
2012
2011
2010
2009
D - Consolidated Financial Statements
Prior years' net loss and loss adjustment expenses incurred reflect
the changes in estimation charged or credited to the consolidated
income statement in each year with respect to the reserves for loss
and loss adjustment expenses established as of the beginning of that
year. During the year ended 31 December 2016, the Allianz Group
recorded additional income of € 2,084 MN (2015: € 1,924 MN) net in
respect of losses occurring in prior years. During the year ended
31 December 2016, this amount, expressed as a percentage of the net
balance of the beginning of the year, was 3.6% (2015: 3.5%).
CHANGES IN HISTORICAL RESERVES
FOR LOSS AND LOSS ADJUSTMENT EXPENSES (LAE)
The analysis of loss and LAE reserves by actuaries and management
is conducted by line of business and separately for specific claim
types such as asbestos and environmental claims. The origin year of
losses is taken into consideration by analyzing each line of business
by accident year. While this determines the estimates of reserves for
loss and LAE by accident year, the effect in the consolidated income
statement in the respective calendar year combines the accident year
loss ratio for the current year with the favorable or adverse develop-
ment from prior years (run-off).
Although discounted loss reserves have been reclassified to
"Reserves for insurance and investment contracts" in the balance
sheet, the underlying business development of these non-life reserves
is still considered in the loss ratio. Therefore the tables below show
the loss development by accident year including the business devel-
opment of discounted loss reserves.
The run-off triangle, also known as the “loss triangle", is a tabular
representation of loss-related data (such as payments, loss reserves,
ultimate losses) in two, time-related dimensions. One of these is the
calendar year, while the other is the accident year (year of loss occur-
rence). Run-off triangles – as the basis for measuring loss reserves -
make clear how the loss reserves change over the course of time due
to payments made and new estimates of the expected ultimate loss
at the respective reporting date.
7,350
The run-off triangles are not prepared on a currency-adjusted
basis. This means all figures are translated from the respective local
currency into the Allianz Group presentation currency (Euro), con-
sistently using the exchange rates applicable at the respective report-
ing date. This ensures that the reserves reconcile with reserves in the
consolidated balance sheet.
LOSS PAYMENTS FOR THE INDIVIDUAL ACCIDENT YEARS (PER CALENDAR YEAR, NET)
€ MN
24,222
Calendar year
2007 &
prior
2008
LOSS PAYMENTS FOR THE INDIVIDUAL ACCIDENT YEARS (PER CALENDAR YEAR, NET)
13,368
26,167
2010
14,443
27,828
2013
1,938
497
712
7,434
1,113
7,181
15,449
28,979
2014
1,728
303
2,090
52,836
1,972
716
3,525
2,151
6,688
14,094
26,459
2011
1,107
2,525
1,725
6,945
14,316
26,545
2012
2,156
1,034
201
2012
3,249
2014
29,407
28,863
29,029
27,962
26,718
27,478
69,987
2013
30,007
29,610
28,250
26,950
27,630
70,380
2012
29,912
2009
69,185
28,100
27,442
2010
68,866
70,432
28,297
28,823
2011
68,929
28,002
26,928
28,257
27,512
27,353
27,378
27,958
1,019
988
997
197
3,613
Surplus¹
33,116
32,211
30,244
29,206
28,334
28,893
27,834
26,445
27,156
69,950
2016
29,074
28,736
29,560
30,625
2015
70,277
26,557
27,292
27,943
28,990
28,498
29,490
30,560
32,649
26,524
70,464
2008
73,562
3,931
3,208
2,614
2,064
1,850
14,700
2015
55,619
15,215
7,101
5,223
4,066
3,105
2,492
2,198
16,220
2014
4,061
5,238
7,861
15,564
55,807
2013
111
17,503
3,117
3,837
5,190
7,239
13,957
53,445
2,601
7,585
16,358
57,492
Accident year
as of 31 December
2007 &
prior
2008
2009
2010
€ MN
2011
2013
2014
2015
2016
Total
2007
2012
19,833
ULTIMATE LOSS FOR THE INDIVIDUAL ACCIDENT YEARS AT THE RESPECTIVE REPORTING DATE (NET)
D - Consolidated Financial Statements
2016
12,433
1,496
1,725
2,141
2,564
ULTIMATE LOSS FOR THE INDIVIDUAL ACCIDENT YEARS AT THE RESPECTIVE REPORTING DATE (NET)
3,040
5,262
7,991
16,708
57,254
Annual Report 2016 - Allianz Group
109
3,894
D - Consolidated Financial Statements
Accident year
Furthermore, all of the Allianz Group's annuity policies issued in
the United States meet the criteria for classification as insurance con-
tracts under IFRS 4, because they include options for contract holders
to elect a life-contingent annuity. These contracts currently do not
expose the Allianz Group to significant longevity risk, nor are they
expected to do so in the future, as the projected and observed annui-
tization rates are very low. Additionally, many of the Allianz Group's
538
2,296
Ceded
LIFE/HEALTH
(55,914)
81
(23,122)
(32,872)
Gross
(76)
2016
1,527
Subtotal
478
476
Service agreements
Group
Consoli-
dation
Life/
Health
Property-
Casualty
1,474
995
2,758
Investment advisory
(54,472)
72
(21,536)
(33,008)
2,287
Ceded
ASSET MANAGEMENT
Gross
2015
1,331
Service agreements
1,346
1,226
(53,156)
5
(22,584)
(30,576)
Net
93
120
Subtotal
1,237
1,051
Fees from credit and assistance business
PROPERTY-CASUALTY
Other
Subtotal
Debt securities
Equity securities
Available-for-sale investments
REALIZED LOSSES
9,081
9,687
Subtotal
Subtotal
Total
370
Other
896
846
22,643
22,149
872
Total
Other
890
Rent from real estate held for investment
876
435
(397)
(267)
(781)
€ MN
CLAIMS AND INSURANCE BENEFITS INCURRED (NET)
2015
2016
incurred (net)
27-Claims and insurance benefits
€ MN
FEE AND COMMISSION INCOME
25 - Fee and commission income
D - Consolidated Financial Statements
117
Annual Report 2016 - Allianz Group
7,937
8,403
(1,144)
(1,284)
(11)
(107)
(1,133)
(1,178)
(866)
550
1,042
(67)
Management and advisory fees
2015
2016
9
Ceded
€ MN
(14,425)
(55)
(13,901)
(470)
Net
Gross
2015
(13,173)
(135)
(12,477)
(561)
Net
329
(13,502)
(135)
OTHER INCOME
(12,792)
315
(460)
361
(45)
Deposits retained for reinsurance ceded
(207)
(170)
Liabilities to banks and customers
2015
2016
€ MN
INTEREST EXPENSES
352
(13,550)
29-Interest expenses
1 - Includes a net gain of € 0.2 BN on the sale of the personal insurance business of Fireman's Fund Insurance
Company to ACE Limited. The sale was an integral part of the reorganization of Allianz Group's Property-
Casualty insurance business in the United States.
241
100
Total
36
2061
100
Income from real estate held for own use
Other
(14,065)
(55)
118
14
Ceded
(575)
28- Change in reserves for insurance
and investment contracts (net)
8,011
7,401
Subtotal
34
39
Other
607
474
CORPORATE AND OTHER
Performance fees
485
Loading and exit fees
(51,702)
5
(20,986)
(30,721)
Net
6,795
6,403
575
Service agreements
330
234
Gross
2016
Group
Consoli-
dation
Life/
Health
Property-
Casualty
CHANGE IN RESERVES FOR INSURANCE AND INVESTMENT CONTRACTS (NET)
26-Other income
10,945
10,491
(845)
(850)
Total
CONSOLIDATION
€ MN
974
1,066
Subtotal
741
735
Investment advisory and banking activities
2,770
Loans and advances to banks and customers
4,731
4,550
3,052
Total
2,510
Other equity components
371
367
Share of earnings
174
Unrealized gains and losses (net)
2,422
2,955
2015
as of 31 December
€ MN
162
NON-CONTROLLING INTERESTS
NON-CONTROLLING INTERESTS
The treasury shares of Allianz SE and its subsidiaries represent
€ 5 MN (2015: € 6 MN) or 0.42% (2015: 0.48 %) of the issued capital.
In the year ending 31 December 2016, the total number of treasury
shares of Allianz SE decreased by 244,099 (2015: decrease of 575,584)
shares, which corresponds to € 624,893 (2015: € 1,473,495) or 0.05%
(2015: 0.126 %) of issued capital.
In July 2016, Allianz SE purchased 1,189,514 treasury shares at an
average price of €122.08 for the purpose of hedging obligations from
the Allianz Equity Incentive Program. For reasons of hedge accounting,
Allianz SE reduced this position of treasury shares in August 2016 by
816,529 shares at an average price of € 129.78 and, at the same time,
entered into corresponding forward transactions on Allianz shares at
an identical reference price. As of 31 December 2016, the remaining
treasury shares of Allianz SE held as a hedge for obligations from the
Allianz Equity Incentive Program amounted to 1,026,029 shares.
In the year ending 31 December 2016, 617,084 (2015: 575,584)
shares were sold to employees of Allianz SE, as well its subsidiaries in
Germany and abroad in the context of the Employee Stock Purchase
Plan. These shares were taken from the stock of treasury shares ded-
icated to this purpose. In 2016, as in the previous year, no capital
increase for the purpose of Employee Stock Purchase Plans was
undertaken. Employees of the Allianz Group purchased shares at
prices ranging from € 94.54 (2015: € 98.42) to € 121.84 (2015: € 125.84)
per share. As of 31 December 2016, the remaining treasury shares of
Allianz SE held for covering subscriptions by employees in the context
of the Employee Stock Purchase Plan of Allianz SE and its subsidiaries
in Germany and abroad amounted to 905,648 shares.
2016
D - Consolidated Financial Statements
CAPITAL REQUIREMENTS
With Solvency II being the binding regulatory regime since 1 Jan-
uary 2016 and the approval of the partial internal model¹, risk is mea-
sured and steered based on the risk profile underlying the regulatory
capital requirement which is based on the internal model. The
Allianz Group's own funds as well as capital requirements are based
on the market value balance sheet approach as the major economic
principle of Solvency II rules². In order to determine the eligible own
funds, the MVBS excess of assets over liabilities as the basis for the
own funds compilation is derived mainly by deducting goodwill and
intangible assets and adding valuation adjustments to the IFRS equity.
To arrive at the eligible own funds, mainly subordinated liabilities are
added to and foreseeable dividends and transferability deductions
are subtracted from the MVBS excess of assets over liabilities. Com-
pared to year-end 2015, the Solvency II capitalization of the Allianz
Group increased by 18 percentage points to 218%. This was driven by
an increase in own funds mainly due to strong Solvency II earnings
and the sale of the South Korean life business. This was partially offset
by market movements mainly due to decreased interest rates as well
as dividend accrual and changes in transferable amount of own funds
resulting from changed risk capital requirements. For further infor-
mation on the Solvency II capitalization, please refer to the section
"Solvency II regulatory capitalization" of the Risk and Opportunity
Report.
23 - Income from financial assets
Group
Consoli-
dation
Health
Casualty
Life/
Property-
€ MN
PREMIUMS EARNED (NET)
The Allianz Group's capital requirements primarily depend on the
type of business that it underwrites, the industry and geographic
locations in which it operates and the allocation of the Allianz
Group's investments. During the Allianz Group's annual planning
dialogues with its operating entities, internal capital requirements
are determined through business plans regarding the levels and tim-
ing of capital expenditures and investments. These plans also form
the basis for the Allianz Group's capital management. Internal capital
requirements are determined by explicitly taking stress resilience
into account. Regulators impose minimum capital requirements at
the level of the Allianz Group's operating entities and the Allianz
Group as a whole. For further details on how Allianz Group manages
its capital, please refer to the the section “Target and strategy of risk
management" of the Risk and Opportunity Report.
21-Premiums earned (net)
D - Consolidated Financial Statements
Annual Report 2016 - Allianz Group
2-Own funds and capital requirement are calculated under consideration of volatility adjustment and yield
curve extension, as described in Yield curve and volatility adjustment assumptions on page 67.
1- From a formalistic perspective, the German Supervisory Authority deems the model to be "partial"
because it does not cover all of the operations: some of the smaller operations report under the standard
model and others under the deduction and aggregation approach.
116
Some insurance subsidiaries are subject to regulatory restric-
tions on the amount of dividends which can be remitted to Allianz SE
without prior approval by the appropriate regulatory body. Such
restrictions require that a company may only pay dividends up to an
amount in excess of certain regulatory capital levels, or based on the
levels of undistributed earned surplus or current year income or a
percentage thereof. The Allianz Group believes that these restrictions
will not affect the ability of Allianz SE to pay dividends to its share-
holders in the future.
As of 31 December 2016, the Allianz Group believes that there are
no outstanding regulatory capital or compliance matters that would
have a material adverse effect on the financial position or the results
of operations of the Allianz Group.
Insurance subsidiaries of the Allianz Group including Allianz SE
prepare individual financial statements based on local laws and
regulations. Local regulations establish additional restrictions on the
minimum level of capital and the amount of dividends that may be
paid to shareholders. The respective local minimum capital require-
ments are based on various criteria including, but not limited to, the
volume of premiums written or claims paid, amount of insurance
reserves, investment risks, mortality risks, credit risks, and under-
writing risks.
The Allianz Group is a financial conglomerate within the scope
of the Financial Conglomerates Directive (FCD). The FCD does not
impose a materially different capital requirement on Allianz Group
compared to Solvency II.
NOTES TO THE CONSOLIDATED INCOME STATEMENTS
115
Annual Report 2016 - Allianz Group
As of 31 December 2016, Allianz SE held 1,931,677 (2015: 2,175,776) trea-
sury shares. Of these, 905,648 (2015: 1,522,732) were held for covering
future subscriptions by employees in Germany and abroad in the
context of Employee Stock Purchase Plans, whereas 1,026,029 (2015:
653,044) were held as a hedge for obligations from the Allianz Equity
Incentive Program (former Group Equity Incentive Program).
Issued capital as of 31 December 2016 amounted to € 1,170 MN divided
into 457,000,000 registered shares. The shares have no-par value but
a mathematical per-share value of € 2.56 each as a proportion of the
issued capital.
ISSUED CAPITAL
OF ISSUED SHARES OUTSTANDING
CHANGES IN THE NUMBER
Convertible subordinated notes totaling € 500 MN, which may be
converted into Allianz shares, were issued against cash in July 2011.
Within 10 years after the issuance a mandatory conversion of the
notes into Allianz shares at the then prevailing share price may apply
if certain events occur, subject to a floor price of at least € 74.90 per
share. Within the same period, the investors have the right to convert
the notes into Allianz shares at a price of € 187.26 per share. Both con-
version prices are subject to anti-dilution provisions. The subscrip-
tion rights of shareholders for these convertible notes have been
excluded with the consent of the Supervisory Board and pursuant to
the authorization of the AGM on 5 May 2010. The granting of new
shares to persons entitled under such convertible notes is secured by
the Conditional Capital 2010/2014. On or before 31 December 2016,
there was no conversion of any such notes into new shares.
1-As of 31 December 2016, include € (157) MN (2015: € (159) MN) related to treasury shares.
2-As of 31 December 2016, include € 297 MN (2015: € 239 MN) related to cash flow hedges.
3- For further information, please refer to the consolidated statements of changes in equity, note 2 Accounting
policies and new accounting pronouncements and note 7 Investments.
66,099
70,392
Total
AUTHORIZED CAPITAL
63,144
2,955
Non-controlling interests
67,341
Subtotal
10,920
11,830
Unrealized gains and losses (net) 2,3
(926)
(754)
The majority of the Allianz Group's Life/Health business segment
operations are conducted in Western Europe. Insurance laws and
regulations in Europe have historically been characterized by legal or
contractual minimum participation of contract holders in the profits
of the insurance company issuing the contract. In particular, life
insurance business in Germany, Switzerland and Austria, which
comprises approximately 49% (2015: 47%) of the Allianz Group's
reserves for insurance and investment contracts as of 31 December
2016, includes a substantial level of policyholder participation in all
sources of profit, including mortality/morbidity, investment and
expense. As a result of this policyholder participation, the Allianz
Group's exposure to insurance, investment and expense risk is miti-
gated.
3,052
As of 31 December 2016, Allianz SE had authorized capital for the issu-
ance of 214,843,750 shares until 6 May 2019, with a notional amount of
€ 550 MN (Authorized Capital 2014/1). The shareholders' subscription
rights can be excluded for capital increases against contribution in
kind. For a capital increase against contributions in cash, the share-
holders' subscription rights can be excluded: (i) for fractional
amounts, (ii) if the issue price is not significantly below the market
price and the shares issued under exclusion of the subscription rights
pursuant to § 186 (3) sentence 4 of the German Stock Corporation Act
(Aktiengesetz) do not exceed 10% of the share capital, and (iii) to the
extent necessary to grant a subscription right for new shares to the
holders of bonds that carry conversion or option rights or provide for
mandatory conversion. The subscription rights for new shares from
the Authorized Capital 2014/1 and the Conditional Capital 2010/2014
may only be excluded for the proportionate amount of the share
capital of up to € 234 MN (corresponding to 20% of the share capital at
year-end 2013).
In addition, Allianz SE has authorized capital (Authorized Capital
2014/11) for the issuance of shares against cash until 6 May 2019. The
shareholders' subscription rights can be excluded in order to issue
new shares to employees of Allianz SE and its Group companies. As
of 31 December 2016, the Authorized Capital 2014/II amounted to
€ 14 MN (5,359,375 shares).
CONDITIONAL CAPITAL
TREASURY SHARES
The proposal for appropriation of net earnings reflects the 1,932,203
treasury shares held directly and indirectly by the company at the
time of the preparation (“Aufstellung”) of the annual financial state-
ments by the Board of Management on 14 February 2017. Such trea-
sury shares are not entitled to the dividend pursuant to § 71b of the
German Stock Corporation Act (AktG). Should there be any change in
the number of shares entitled to the dividend by the date of the
Annual General Meeting, the above proposal will be amended accord-
ingly and presented for resolution on the appropriation of net earnings
at the Annual General Meeting, with an unchanged dividend of € 7.60
per each share entitled to dividend.
Unappropriated earnings carried forward: € 397,350,907.81
Distribution of a dividend of € 7.60 per no-par share
entitled to a dividend: € 3,458,515,257.20
-
PROPOSAL FOR APPROPRIATION OF NET EARNINGS
The Board of Management and the Supervisory Board propose that
the net earnings ("Bilanzgewinn") of Allianz SE of € 3,855,866,165.01
for the 2016 fiscal year shall be appropriated as follows:
2,176,362
457,000,000
1,932,263
457,000,000
454,823,638
455,067,737
454,248,039
575,599
244,099
454,823,638
2015
2016
1-Thereof 1,931,677 (2015: 2,175,776) own shares held by Allianz SE.
Total number of issued shares
Changes in number of treasury shares
Number of issued shares outstanding
as of 31 December
Treasury shares¹
Number of issued shares outstanding
as of 1 January
NUMBER OF ISSUED SHARES OUTSTANDING
As of 31 December 2016, Allianz SE had conditional capital totaling
€ 250 MN (97,656,250 shares) (Conditional Capital 2010/2014). This
conditional capital increase will only be carried out if conversion or
option rights attached to bonds which Allianz SE or its Group compa-
nies have issued against cash payments according to the resolutions
of the AGM on 5 May 2010 or 7 May 2014, are exercised or the conver-
sion obligations under such bonds are fulfilled, and only to the extent
that the conversion or option rights or conversion obligations are not
serviced through treasury shares or through shares from authorized
capital.
and liabilities carried at fair value through
income (net)
INCOME FROM FINANCIAL ASSETS AND LIABILITIES
CARRIED AT FAIR VALUE THROUGH INCOME (NET)
2016
€ MN
24-Realized gains/losses (net)
(543)
70,645
22-Interest and similar income
income.
1- These foreign currency gains and losses arise subsequent to initial recognition on all assets and liabilities
denominated in a foreign currency that are monetary items and not measured at fair value through
24,215
46,430
Premiums earned (net)
(309)
REALIZED GAINS/LOSSES (NET)
(234)
Change in
71,188
24,524
46,664
Net
(5,536)
110
(713)
(4,933)
unearned premiums (net)
€ MN
2016
2015
Interest from loans to banks and customers
7,834
8,211
Subtotal
14,276
14,020
Interest from available-for-sale investments
4,486
5,765
Debt securities
1,895
1,816
Dividends from available-for-sale investments
3,349
2,445
Equity securities
2015
2016
Available-for-sale investments
REALIZED GAINS
INTEREST AND SIMILAR INCOME
€ MN
Ceded
(47)
76,723
25,237
Income from financial assets and liabilities
71,430
24,291
47,139
(3,936)
(2,416)
Income from financial assets and liabilities held for
trading (net)
(4,901)
134
Change in
(638)
Ceded
76,331
2015
2016
(134)
24,929
51,535
Gross
Premiums written
(4,397)
designated at fair value through income (net)
139
12
51,597
Gross
Premiums written
2015
(2,307)
(999)
Total
1,604
1,272
Foreign currency gains and losses (net)1
13
6
Income from financial liabilities for puttable equity
instruments (net)
70,357
23,769
46,588
Premiums earned (net)
(1,073)
(522)
(550)
unearned premiums (net)
(110)
Certificated liabilities
Net
(294)
Tax payables
Income taxes
1,836
1,732
Other taxes
1,452
1,450
Subtotal
3,287
428
3,181
564
579
Unearned income
440
374
Provisions
Pensions and similar obligations
9,401
9,149
Accrued interest and rent
Employee related
478
8,043
111,325
105,873
1-These reclassifications mainly relate to insurance contracts when policyholders change their contract
from a unit-linked to a universal life-type contract.
2- Consists of € 71,706 MN (2015: € 67,894 MN) unit-linked insurance contracts and € 39,620 MN (2015: € 37,979
MN) unit-linked investment contracts.
18 Other liabilities
OTHER LIABILITIES
€ MN
as of 31 December
Payables
Policyholders
Reinsurance
Payables for social security
Agents
2015
4,908
5,006
1,745
1,413
1,616
1,625
Subtotal
8,269
2016
2,551
2,599
Share-based compensation plans
Annual Report 2016 - Allianz Group
1-Includes other liabilities due within one year of € 26,981 MN (2015: € 25,568 MN).
113
D - Consolidated Financial Statements
19 - Certificated and subordinated liabilities
CERTIFICATED AND SUBORDINATED LIABILITIES
€ MN1
Senior bonds
Fixed rate
38,686
Contractual interest rate
Contractual maturity date
> 1 year up to
5 years
Up to 1 year
as of
as of
Over
31 December
31 December
5 years
Floating rate
39,867
Total¹
7,159
431
527
Restructuring plans
95
112
Other provisions
2,121
1,840
Subtotal
14,599
14,227
Deposits retained for reinsurance ceded
2,254
1,636
Derivative financial instruments used for hedging
that meet the criteria for hedge accounting and
firm commitments
159
472
Financial liabilities for puttable equity instruments
Other liabilities
2,894
2,585
6,922
(1,403)
2016
(1,841)
(25)
2.5
168.0
97.2
2.7
161.6
97.3
0.4
54.9
72.4
Switzerland
Belgium
0.4
73.7
1.7
29.9
46.1
1.9
29.6
48.3
0.6
90.1
55.0
77.4
United States
France
traditional contracts issued in France and Italy do not incorporate
significant insurance risk, although they are accounted for as insur-
ance contracts because of their discretionary participation features.
Similarly, a significant portion of the Allianz Group's unit-linked con-
tracts in France and Italy do not incorporate significant insurance risk.
As a result of the considerable diversity in types of contracts
issued, including the offsetting effects of mortality risk and longevity
risk inherent in a combined portfolio of life insurance and annuity
products, the geographic diversity of the Allianz Group's Life/Health
business segment and the substantial level of policyholder participa-
tion in mortality/morbidity risk in certain countries in Western
Europe, the Allianz Group does not believe its Life/Health segment has
any significant concentrations of insurance risk, nor does it believe its
net income or shareholders' equity is highly sensitive to insurance risk.
The Allianz Group's Life/Health business segment is exposed to
significant investment risk as a result of guaranteed minimum interest
rates being included in most of its non-unit-linked contracts. The
weighted average guaranteed minimum interest rates of the Allianz
Group's largest operating entities in the business segment Life/Health,
comprising 86% (2015: 84%) of the aggregate policy reserves in this
business segment in 2016, can be summarized by country as follows:
(286)
WEIGHTED AVERAGE GUARANTEED MINIMUM INTEREST RATES OF LIFE INSURANCE ENTITIES
as of 31 December
2016
2015
Guaranteed
rate
Aggregate
policy reserves
% of total
reserves¹
Italy
Guaranteed
Aggregate
policy reserves
% of total
reserves¹
%
€ BN
%
%
€ BN
%
Germany
rate
0.7
80.5
75.6
Foreign currency translation adjustments
Changes in the consolidated subsidiaries
of the Allianz Group
Premiums collected
Interest credited
Releases upon death, surrender and withdrawal
Policyholder charges
Portfolio acquisitions and disposals
Reclassifications¹
As of 31 December²
2016
105,873
620
As of 1 January
2015
94,564
3,215
1
16,189
20,948
3,994
1,182
(10,547)
(10,653)
(1,857)
(1,934)
(1,079)
CHANGES IN FINANCIAL LIABILITIES FOR UNIT-LINKED INSURANCE CONTRACTS
AND UNIT-LINKED INVESTMENT CONTRACTS
€ MN
17- Financial liabilities
for unit-linked contracts
For contracts without fixed and determinable payments, the
Allianz Group has made assumptions in estimating the undiscounted
cash flows of contractual policy benefits including mortality, mor-
bidity, interest crediting rates, policyholder participation in profits
and future lapse rates. These assumptions represent current best
estimates and may differ from the estimates used to establish the
reserves for insurance and investment contracts in accordance with
the Allianz Group's established accounting policy. Due to the uncer-
tainty of the assumptions used, the amount presented could be
materially different from the actual incurred payments in future
periods.
1.7
12.0
95.3
1.8
11.7
94.6
2.6
8.8
93.9
8.9
94.8
1- Total reserves are the sum of aggregate policy reserves and financial liabilities for unit-linked contracts.
112
Annual Report 2016 - Allianz Group
D - Consolidated Financial Statements
In most of these markets, the effective interest rates earned on the
investment portfolio exceed these guaranteed minimum interest
rates. In addition, the operations in these markets may also have sig-
nificant mortality and expense margins. However, the Allianz Group's
Life/Health operations in Switzerland, Belgium and Taiwan have high
guaranteed minimum interest rates on older contracts in their port-
folios and, as a result, may be sensitive to declines in investment
rates or a prolonged low interest rate environment.
FUTURE POLICY BENEFITS
As of 31 December 2016, benefits for insurance and investment con-
tracts which are expected to be due in 2017 amounted to € 58 BN, while
those expected to be due between 2018 and 2021 amounted to € 219 BN
and those expected to be due after 2021 amounted to € 1,009 BN.
The resulting total benefits for insurance and investment con-
tracts in the amount of € 1,286 BN include contracts where the timing
and amount of payments are considered fixed and determinable, and
contracts which have no specified maturity dates and may result in
a payment to the contract beneficiary, depending on mortality and
morbidity experience and the incidence of surrenders, lapses or
maturities. Furthermore, the amounts are undiscounted and do not
include any expected future premiums; therefore they exceed the
reserves for insurance and investment contracts presented in the
consolidated balance sheet.
(46)
2015
2.8
3,840
DE000A1YCQ29
2013
EUR
1,500
4.750
Perpetual
CH0234833371
2014
CHF
Perpetual
500
Perpetual
DE000A13R7Z7
2014
EUR
1,500
3.375
Perpetual
XS1485742438
2016
3.250
USD
5.500
USD
2013
GBP
750
4.500
13 March 2043
Subordinated liabilities
Allianz SE, Munich
DE000A1RE1Q3
2012
EUR
1,000
1,500
17 October 2042
DE000A14J9N8
2015
EUR
1,500
2.241
7 July 2045
XS0857872500
2012
5.625
1,500
3.875
Perpetual
2015
1,170
Shareholders' equity
Issued capital
1,170
Additional paid-in capital
27,758
27,758
Retained earnings¹
2016
27,336
(1,224)
(1,207)
(97)
(111)
Other
Total
(580)
2,734
(595)
Subordinated liabilities
Annual Report 2016 - Allianz Group
as of 31 December
EQUITY
€ MN
20- Equity
Allianz Finance II B.V., Amsterdam
DE000A1GNAH1
2011
EUR
2,000
5.750
8 July 2041
XS0211637839
2005
EUR
1,400
4.375
Perpetual
DE000A0GNPZ3
2006
800
5.375
Perpetual
114
Annual Report 2016 - Allianz Group
D - Consolidated Financial Statements
DE000A1HG1L4
21 April 2031
EUR
750
Current interest rate
Total subordinated liabilities
1- Except for interest rates. Interest rates represent the weighted average.
2- Includes € 122 MN certificated liabilities issued by banking subsidiaries.
3- Relates to certificated liabilities issued by banking subsidiaries.
4- Change due to the issuance of a € 1.4 BN subordinated bond in the third quarter of 2016.
3,157
3,157
1,9675
Floating rate
4.74%
8,929
10,328
10,246
4.38%
4.47%
1,400
45
45
45
1,400 6
Hybrid equity7
Current interest rate
Floating rate
6,8332
2.84%
6,574
1.375
3.22%
2743
Money market securities
Fixed rate
1,041
1,041
1,276
Contractual interest rate
0.70%
Total certificated liabilities
1,041
2,734
3,840
7,615
8,383
Fixed rate4
Contractual interest rate
1.22%
12,131
5- Includes € 251 MN subordinated bonds issued by banking subsidiaries.
Subordinated bonds
12,258
2016
EUR
750
0.000
22 July 2019
21 April 2020
DE000A1GORU9
2012
1,500
3.500
14 February 2022
DE000A1HG1K6
2013
EUR
750
EUR
13,530
3.000
2016
13 March 2028
DE000A180B80
DE000A180B72
4.750
EUR
EUR
Year of Issue
Currency
1,500
BONDS OUTSTANDING AS OF 31 DECEMBER 2016
€ MN
7- Relates to hybrid equity issued by subsidiaries.
Notional
amount
Coupon in %
6-On 3 January 2017, Allianz Finance II B.V. called for redemption the €1.4 BN 4.375 % Subordinated bond
effective 17 February 2017.
Certificated liabilities
Allianz Finance II B.V., Amsterdam
DE000A1HG1J8
Maturity date
2013
2009
DE000A1AKHB8
13 March 2018
1.375
ISIN
500
EUR
12,933
12,933
4,195
(275)
Exchange-traded
Subtotal
(626)
1,008
78,826
87,757
18,990
24,826
OTC
118,640
Negative
fair
Positive
fair
values
131,573
Notional
principal
1,201
values
values
values
Interest rate contracts
6,057
24,826
87,757
amounts
1,201
60,329
83,022
(8,492)
644
179,085
fair
Foreign exchange contracts
73
18,112
(32)
(10,064)
1,359
255,343
31,681
3,350
220,312
Subtotal
428
240
60,089
1,008
(626)
Equity/Index contracts
OTC
160,223
3,110
(275)
31,681
931
(10,032)
160,973
571
(8,492)
Exchange-traded
195,014
fair
Effect of netting
Positive
Taxable temporary differences associated with investments in Allianz
Group companies for which no deferred tax liabilities are recognized,
as the Allianz Group is able to control the timing of their reversal, and
which will not reverse in the foreseeable future, amounted to € 1,150 MN
(2015: € 585 MN). Deductible temporary differences arising from
investments in Allianz Group companies for which no deferred tax
assets are recognized, as it is not probable that they will reverse in the
foreseeable future, amounted to € 97 MN (2015: € 98 MN).
Annual Report 2016 - Allianz Group
120
(18,480)
4,003
(2,609)
4,822
(3,819)
Net deferred tax assets (liabilities)
Net deferred tax liabilities
(19,045)
22,483
23,867
Total deferred tax liabilities
524
597
Other liabilities
2,674
2,635
Pensions and similar obligations
9,357
Deferred acquisition costs
OTC
4,991
4,958
Other assets
TAX LOSSES CARRIED FORWARD
1,388
Intangible assets
804
661
Insurance reserves
3,084
2,808
1,267
Negative
Tax losses carried forward at 31 December 2016 of € 9,697 MN (2015:
€ 10,395 MN) resulted in the recognition of deferred tax assets to the
extent that there is sufficient certainty that the unused tax losses will
be utilized. At the reporting date, this prerequisite was not fulfilled
for a partial amount of € 3,010 MN (2015: € 2,835 MN). According to tax
legislation as of 31 December 2016, an amount of € 2,801 MN (2015:
€2,487 MN) of these tax losses may be carried forward indefinitely and
in unlimited amounts whereas an amount of € 209 MN (2015: € 348 MN)
of these tax losses carried forward will expire over the next 20 years if
not utilized.
TAX LOSSES CARRIED FORWARD
Notional
principal
amounts
Over
5 years
Up to 1 year 1-5 years
Maturity by notional amount
2015
2016
as of 31 December
€ MN
DERIVATIVE FINANCIAL INSTRUMENTS
35 - Derivative financial instruments
OTHER INFORMATION
D - Consolidated Financial Statements
121
Annual Report 2016 - Allianz Group
D - Consolidated Financial Statements
9,697
9,139
€ MN
2017
2018-2019
2020-2021
2022-2026
>10 years
Tax losses carried forward are scheduled according to their expiry
periods as follows:
Unlimited
2016
12
116
147
106
175
Total
50,143
Cash and cash equivalents
919
2,907
2,907
14,842
14,842
14,463
14,463
Financial assets designated at fair value through income
Financial assets held for trading
FINANCIAL ASSETS
Fair value
Fair value Carrying amount
Carrying amount
2015
2016
2,258
as of 31 December
The following table compares the carrying amount and fair value of
the Allianz Group's financial assets and financial liabilities:
FAIR VALUES AND CARRYING AMOUNTS
Market risk, credit risk and liquidity risk in the section quanti-
fiable risks and opportunities by risk category.
Allianz risk profile and management assessment,
Risk based steering and risk management,
Internal risk capital framework including all subsections,
Certain risk disclosure requirements of IFRS 7 are reflected in the
following sections of the Risk and Opportunity Report within the
Group Management Report:
36 Fair values and carrying amounts
of financial instruments
Credit risk associated with netting arrangements is further miti-
gated by collateral. For further information on collateral, please refer
to note 36 Fair values and carrying amounts of financial instruments.
The Allianz Group mainly enters into enforceable master netting
arrangements and similar arrangements for derivatives transactions.
None of these enforceable master netting arrangements or similar
arrangements meet the requirements for offsetting in line with IAS 32.
OFFSETTING
HEDGE OF NET INVESTMENT IN FOREIGN OPERATIONS
As of 31 December 2016, the Allianz Group hedges part of its U.S. Dollar,
British Pound, Australian Dollar, Czech Koruna, and Swiss Franc net
investments through the issuance of British Pound and Swiss Franc
denominated liabilities with a nominal amount of GBP 0.8 BN and
CHF 0.5 BN, as well as the use of forward sales of U.S. Dollar, British
Pound, Australian Dollar, Czech Koruna and Swiss Franc with a
notional of USD 0.5 BN, GBP 0.4 BN, AUD 0.4 BN, CZK 1.4 BN and CHF 0.2 BN.
The total positive fair value in 2016 was € 6 MN (2015: € 9 MN).
During the year ended 31 December 2016, cash flow hedges were used
to hedge the exposure to the variability of cash flows arising from
interest rate or exchange rate fluctuations as well as inflation. As of
31 December 2016, the derivative instruments utilized had a total
positive fair value of € 540 MN (2015: € 177 MN). Unrealized gains and
losses (net) in shareholders' equity increased by € 58 MN (2015:
decreased by € 49 MN). Amounts accumulated in the other compre-
hensive income are reclassified to profit or loss in the periods when
the hedged item affects profit or loss. This is the case when the fore-
cast transactions that are hedged take place.
CASH FLOW HEDGES
FAIR VALUES AND CARRYING AMOUNTS OF FINANCIAL INSTRUMENTS
€ MN
2,258
5,426
5,426
111,325
10,181
111,325
Financial assets for unit-linked contracts
136,397
117,630
124,422
105,369
Loans and advances to banks and customers
17,810
11,977
18,380
11,732
Real estate held for investment
6,207
5,056
9,031
5,010
5,010
Available-for-sale investments
512,268
512,268
488,365
D - Consolidated Financial Statements
488,365
2,399
2,805
2,745
3,165
Investments in associates and joint ventures
7,161
Held-to-maturity investments
Annual Report 2016 - Allianz Group
122
For the year ended 31 December 2016, the Allianz Group recog-
nized for fair value hedges a net loss of € - MN (2015: net gain of € 3 MN)
on the hedging instruments and a net gain of € 1 MN (2015: net loss of
€9 MN) on the hedged items attributable to the hedged risk.
Subtotal
(132)
11
2,783
(20)
5
3,843
993
2,155
695
OTC
Credit contracts
(424)
482
46,988
(534)
545
52,628
545
(534)
46,988
482
(424)
695
Exchange-traded
8
Subtotal
50,151
1,566
919
52,636
8
1,566
2,155
3,843
Additionally, the Allianz Group uses fair value hedges to hedge
its equity portfolio against equity market risk. As of 31 December 2016,
the derivatives used as hedging instruments in the related fair value
hedges had a total positive fair value of € 11 MN (2015: € 84 MN).
The Allianz Group uses fair value hedges to hedge the exposure to
changes in the fair value of financial assets due to movements in inter-
est or exchange rates. As of 31 December 2016, the derivative financial
instruments used for the related fair value hedges of the Allianz
Group had a total negative fair value of € 39 MN (2015: € 177 MN). With-
in the Allianz Group's banking business, derivatives to hedge against
interest rate changes are implemented for individual transactions
(micro hedges) or for a portfolio of similar assets or liabilities (macro
hedges).
FAIR VALUE HEDGES
As of 31 December 2016, derivatives which form part of hedge
accounting relationships, which are included in the line items other
assets and other liabilities, had a notional amount of € 17.3 BN (2015:
€ 19.8 BN) as well as a positive fair value of € 677 MN (2015: € 565 MN)
and a negative fair value of € 159 MN (2015: € 472 MN). These hedging
instruments mainly include interest rate forwards with a total posi-
tive fair value of € 422 MN (2015: € 76 MN).
DERIVATIVE FINANCIAL INSTRUMENTS
USED IN ACCOUNTING HEDGES
FREESTANDING DERIVATIVE FINANCIAL INSTRUMENTS
As of 31 December 2016, freestanding derivatives, included in the line
item financial assets and liabilities held for trading, had a notional
principal amount of € 426.1 BN (2015: € 292.1 BN) as well as a positive
fair value of € 2.4 BN (2015: € 1.6 BN) and a negative fair value of € 10.7 BN
(2015: € 9.2 BN). Out of the total allocated to the freestanding deriva-
tives, € 265.9 BN (2015: € 202.9 BN) of the notional principal relate to
annuity products or derivatives to hedge the annuity products. Annu-
ity products are equity-indexed or contain certain embedded options
or guarantees which are considered embedded derivatives under
IAS 39. For these embedded derivatives, the notional principal
amounts included in the table refer to the account value of the related
insurance contracts. The total negative fair value of these embedded
derivatives amounts to € 9.4 BN (2015: € 7.8 BN). Further information
on the fair value measurement of these derivatives can be found in
note 36 Fair values and carrying amounts of financial instruments.
The table shows the fair value and notional amounts of all freestand-
ing derivatives as well as derivatives for which hedge accounting is
applied by the Allianz Group as of 31 December 2016 and 2015, respec-
tively. The notional principal amounts indicated in the table are
cumulative, as they include the absolute value of the notional princi-
pal amounts of derivatives with positive and negative fair values.
Although these notional principal amounts reflect the degree of the
Allianz Group's involvement in derivative transactions, they do not
represent amounts exposed to risk. Further information on the use
of derivatives to hedge risk can be found in the sections on market
and credit risk of the Risk and Opportunity Report, which forms part
of the Group Management Report.
(9,675)
2,146
311,883
(10,893)
3,110
443,400
121,350
31,897
290,153
6
5
(20)
2,783
11
(132)
Real estate contracts
993
OTC
Total
5
5
6
5
5
Subtotal
Investments
Investment management expenses
29.6%
34- Income taxes
(1,215)
(1,306)
Total
(121)
(153)
investments
Expenses from fixed assets of renewable energy
(3,777)
(3,734)
(418)
(418)
Expenses from real estate held for investment
Total
32 Acquisition and
(676)
457
535
CONSOLIDATION
2015
2016
(745)
(825)
Subtotal
(335)
(299)
Investment advisory and banking activities
€ MN
INVESTMENT EXPENSES
(410)
(735)
administrative expenses (net)
INCOME TAXES
€ MN
(3,815)
Subtotal
(1,585)
(1,522)
Non-personnel expenses
(2,576)1
(2,292)
Personnel expenses
ASSET MANAGEMENT
(6,934)
(6,612)
Subtotal
(1,720) 1
(1,829)
Administrative expenses
(5,215)
(4,782)
Current income taxes
ACQUISITION AND ADMINISTRATIVE EXPENSES (NET)
€ MN
2016
2015
PROPERTY-CASUALTY
(526)
Acquisition costs
(10,307)
(3,044)
Subtotal
(13,352)
(10,214)
(3,175)1
(13,388)
LIFE/HEALTH
Acquisition costs
Administrative expenses
(4,161)
Service agreements
31 – Investment expenses
(1,500)
(1,683)
Subtotal
(1,367)
(1,407)
Subtotal
(344)
(122)
Debt securities
(367)
(364)
(999)
(1,043)
Fees from credit and assistance business
Service agreements
Other
(1,156)
Equity securities
Available-for-sale investments
PROPERTY-CASUALTY
Impairments
2015
2016
2015
2016
€ MN
FEE AND COMMISSION EXPENSES
33 Fee and commission expenses
€ MN
IMPAIRMENTS OF INVESTMENTS (NET)
105,873
(1,560)
(46)
(74)
LIFE/HEALTH
(1,523)
(1,382)
(83)
(75)
(1,440)
(1,307)
Subtotal
Other
Commissions
ASSET MANAGEMENT
(1,526)
(1,940)
Total
48
103
Reversals of impairments
(599)
Non-current assets and assets of disposal groups
Service agreements
classified as held for sale
(315)
Investment advisory
Subtotal
CORPORATE AND OTHER
(2,043)
Subtotal
(53)
(46)
(602)
(553)
(655)
(1,575)
31.5%
CORPORATE AND OTHER
Subtotal
Applied weighted income tax rate
20,633
20,855
Total deferred tax assets
10,196
10,292
Income before income taxes
1,214
1,133
Other liabilities
2015
2016
4,455
4,551
29.9%
Pensions and similar obligations
5,258
Insurance reserves
€ MN
EFFECTIVE TAX RATE
2,373
2,252
170
254
1,435
1,566
967
1,204
4,995
4,558
4,888
30.0%
Calculated income taxes
3,074
Effective tax rate
235
187
through income
3,209
3,042
Effective income taxes
Financial assets carried at fair value
(3)
23
Other effects
DEFERRED TAX LIABILITIES
82
61
Effects of tax losses
1,394
1,003
3,054
Non-recognition or valuation allowance for
deferred tax assets on tax losses carried forward
(807)
(759)
Trade tax and similar taxes
193
136
184
(19,045)
(18,480)
Net tax exempt income
(309)
(108)
Net deferred tax assets
Effect of netting
Administrative expenses
80
2016
Foreign currency translation adjustments
Items that may be reclassified to profit or loss
in future periods
OF OTHER COMPREHENSIVE INCOME
€ MN
For the years ended 31 December 2016 and 2015, the income
taxes relating to components of other comprehensive income consist
of the following:
D - Consolidated Financial Statements
119
Of the deferred income taxes for the year ended 31 December
2016, expenses of € 322 MN (2015: € 309 MN) are attributable to the rec-
ognition of deferred taxes on temporary differences, and expenses of
€ 41 MN (2015: € 12 MN) are attributable to tax losses carried forward.
Changes of applicable tax rates due to changes in tax law produced
deferred tax expenses of € 13 MN (2015: tax income of € 1 MN).
During the year ended 31 December 2016, current income taxes
included expenses of € 178 MN (2015: income of € 73 MN) related to
prior years.
(3,209)
(3,042)
(320)
(376)
(2,889)
(2,666)
Available-for-sale investments
2015
Total
Deferred income taxes
Annual Report 2016 - Allianz Group
1- Include one-off effects from pension revaluation.
(25,718)
(25,301)
30
(58)
(1,264)
(1,466)
(1,264) 1
(1,466)
Total
CONSOLIDATION
2016
Cash flow hedges
Share of other comprehensive income
of associates and joint ventures
Tax losses carried forward
Deferred acquisition costs
Other assets
Intangible assets
Investments
Financial assets carried at fair value
through income
DEFERRED TAX ASSETS
DEFERRED TAX ASSETS AND LIABILITIES
€ MN
as of 31 December
DEFERRED TAX ASSETS AND LIABILITIES
Deferred tax assets on losses carried forward are recognized to the
extent to which it is more likely than not that sufficient future taxable
profits will be available for realization. Entities which suffered a tax
loss in either the current or the preceding period recognized deferred
tax assets in excess of deferred tax liabilities amounting to € 334 MN
(2015: € 466 MN), as there was convincing other evidence that sufficient
taxable profit will be available.
The tax rates used in the calculation of the Allianz Group's
deferred taxes are the applicable national rates, which in 2016 ranged
from 10.0% to 45.0%, with changes to tax rates that had already been
adopted in France, Hungary, Luxembourg, Slovakia and the United
Kingdom until 31 December 2016 taken into account.
For the year ended 31 December 2016, the write-down of deferred
taxes on tax losses increased the tax expenses by € 103 MN (2015:
€ 113 MN). The reversal of write-down of deferred tax assets on tax
losses carried forward resulted in deferred tax income of € 9 MN (2015:
€-MN). Due to the use of tax losses carried forward, for which
deferred tax assets were previously written off, the current income
tax expenses decreased by € 1 MN (2015: € 3 MN). Deferred tax income
increased by € 32 MN (2015: € 28 MN) due to the use of tax losses carried
forward, for which deferred tax assets were previously written off. The
above-mentioned effects are shown in the reconciliation statement
as "effects of tax losses".
The effective tax rate is determined on the basis of the effective
income tax expenses on income before income taxes.
The recognized income taxes for the year ended 31 December 2016 are
€ 32 MN below (2015: € 155 MN above) the calculated income taxes,
which are determined by multiplying the respective income before
income taxes with the applicable country-specific tax rates. The fol-
lowing table shows the reconciliation from the calculated income
taxes to the effectively recognized income taxes of the Allianz Group.
The Allianz Group's reconciliation is a summary of the individual
company-related reconciliations, which are based on the respective
country-specific tax rates taking into consideration consolidation
effects with an impact on the Group result. The applicable tax rate
used in the reconciliation for domestic Allianz Group companies
includes corporate tax, trade tax and the solidarity surcharge, and
amounted to 31.0% (2015: 31.0%).
(228)
1,679
148
(724)
(19)
(14)
(1)
Miscellaneous
Items that may never be reclassified to profit or loss
Actuarial gains and losses on
defined benefit plans
Total
2016
2015
2015
(28)
(807)
1,775
(33)
34
10
119
105,873
144
677
Financial liabilities
for unit-linked
contracts
Financial liabilities
held for trading
D - Consolidated Financial Statements
Impairments
Net gains (losses) recognized in other comprehensive income
Net gains (losses) recognized in consolidated income statement
Disposals through sales and settlements
Net transfers into (out of) level 3
Additions through purchases and issues
Carrying value (fair value) as of 1 January 2016
€ MN
RECONCILIATION OF LEVEL 3 FINANCIAL LIABILITIES
Annual Report 2016 - Allianz Group
126
Financial liabilities
for puttable equity
instruments
1- Primarily include corporate bonds.
2
(15)
6
Net gains (losses) in profit or loss attributable to a change
in unrealized gains or losses for financial assets held at the
reporting date
25,906
377
7,829
17,513
187
235
118
(239)
322
34
(6)
Total
8,134
164
FAIR VALUE MEASUREMENT ON A NON-RECURRING BASIS
Certain financial assets are measured at fair value on a non-recurring
basis when events or changes in circumstances indicate that the
carrying amount may not be recoverable.
1,394
2
1,391
Net gains (losses) in profit or loss attributable to a change in unrealized
gains or losses for financial liabilities held at the reporting date
9,686
145
377
9,163
Carrying value (fair value) as of 31 December 2016
115
118
(3)
Changes in the consolidated subsidiaries of the Allianz Group
346
346
Foreign currency translation adjustments
19
8,317
1,857
103
2,104
(26)
(2,016)
Changes in the consolidated subsidiaries of the Allianz Group
Carrying value (fair value) as of 31 December 2016
(6)
(4)
(18)
(2,038)
872
2
874
(32)
If financial assets are measured at fair value on a non-recurring
basis at the time of impairment, or if fair value less cost to sell is used
as the measurement basis under IFRS 5, corresponding disclosures
can be found in note 30 Impairments of investments (net).
348
314
Carrying value (fair value) as of 1 January 2016
Total
Financial assets
for unit-linked
contracts
Available-for-sale
investments -
Equity securities
investments -
Debt securities¹
Available-for-sale
carried at fair value
through income
Financial assets
n/a 2
Mortality
0.5% -35%
n/a 2
0%-50%
n/a
Volatility
Surrenders
Withdrawal benefit election
Additions through purchases and issues
0%-25%
0%-25%
Annuitizations
€ MN
RECONCILIATION OF LEVEL 3 FINANCIAL ASSETS
The following tables show reconciliations of the financial instruments
carried at fair value and classified as level 3:
Reconciliation of level 3 financial instruments
2-Presentation not meaningful. Mortality assumptions are mainly derived from the Annuity 2000 Mortality Table.
Discounted cash flow method
2,275
Discounted cash flow method
6,668
8,943
n/a
n/m1
Option-adjusted spread
Surrenders
Mortality
184
19
11,881
5,621
2
Foreign currency translation adjustments
(252)
(214)
(38)
752
159
593
68
2
84
(38)
21
Net gains (losses) recognized in consolidated income statement
Net gains (losses) recognized in other comprehensive income
Impairments
(2,261)
(4)
(1,026)
6,915
164
19,145
2,079
103
7,821
32
Net transfers into (out of) level 3
Disposals through sales and settlements
(43)
47
(1,189)
38
(6)
50
(30)
Discounted cash flow method
FAIR VALUE INFORMATION ABOUT FINANCIAL ASSETS AND LIABILITIES NOT CARRIED AT FAIR VALUE
€ MN
ASSETS PLEDGED AND COLLATERAL
As of 31 December 2016, the Allianz Group substantially retained all
the risks and rewards out of the ownership of transferred assets.
There have not been any transfers of financial assets that were derec-
ognized in full or partly, in which Allianz continues to control the
transferred assets. Transfers of financial assets mainly relate to secu-
rities lending and repurchase agreement transactions. Transferred
financial assets in repurchase agreement and securities lending
transactions are mainly available-for-sale debt and equity securities
for which substantially all of the risks and rewards are retained. As
of 31 December 2016, the carrying amount of the assets transferred
for securities lending transactions amounted to € 6,526 MN (2015:
€ 5,294 MN). For repurchase agreements, the carrying amount of
the assets transferred amounted to € - MN (2015: € 1,394 MN) and the
carrying amount of the associated liabilities amounted to € - MN
(2015: € 1,410 MN) due to the reclassification of the Oldenburgische
Landesbank AG as disposal group classified as held for sale.
TRANSFERS OF FINANCIAL ASSETS
For level 2, the fair value is mainly determined based on the market
approach, using quoted market prices, and based on the income
approach, using present value techniques. For level 3, fair values are
mainly derived based on the income approach, using deterministic
cash flows with credit spreads as primary non-market observable
inputs. In some cases, the carrying amount (amortized cost) is con-
sidered to be a reasonable estimate for the fair value.
AND SUBORDINATED LIABILITIES
CERTIFICATED LIABILITIES
Level 1 mainly consists of highly liquid liabilities, e.g. payables on
demand. The fair value for liabilities in level 2 and level 3 is mainly
derived based on the income approach, using future cash flows dis-
counted with risk-specific interest rates. Main non-market observable
inputs include credit spreads. In some cases, the carrying amount
(amortized cost) is considered to be a reasonable estimate of the fair
value.
LIABILITIES TO BANKS AND CUSTOMERS
LOANS AND ADVANCES TO BANKS AND CUSTOMERS
For loans and advances to banks and customers, quoted market
prices are rarely available. Level 1 mainly consists of highly liquid
advances, e.g. short-term investments. The fair value for these assets
in level 2 and level 3 is mainly derived based on the income approach
using deterministic discounted cash flow models.
D - Consolidated Financial Statements
127
Annual Report 2016 - Allianz Group
Fair values are mainly determined using the market or the income
approach. The valuation techniques applied for the market approach
include market prices of identical or comparable assets in markets
that are not active. The fair values are either calculated internally and
validated by external experts, or derived from expert appraisals with
internal controls in place to monitor these valuations.
REAL ESTATE
The carrying amounts of the assets pledged as collateral are dis-
played in the following table:
INVESTMENTS IN ASSOCIATES AND JOINT VENTURES
For level 2 and level 3, fair values are mainly based on an income
approach using a discounted cash flow method or net asset values as
provided by third-party vendors.
HELD-TO-MATURITY INVESTMENTS
3-Non-market observable inputs
2-Market observable inputs
1-Quoted prices in active markets
13,100
47,871
13,905
25,392
8,574
271
12,829
9,208
583
8,625
8,530
14,256
35,847
For level 2 and level 3, the fair value is mainly determined based on
the market approach, using quoted market prices, and the income
approach using deterministic discounted cash flow models.
ASSETS PLEDGED AS COLLATERAL
€ MN
as of 31 December
Collaterals without right to resell or repledge
Financial assets carried at fair value
through income
30 – Impairments of investments (net)
Annual Report 2016 - Allianz Group
128
The Allianz Group engages in some business activities that
involve entities that fit the above-mentioned definition of structured
entities. Primarily, the Allianz Group is involved with such entities
due to its investment activities in the insurance business and due to
its asset management activities. Furthermore, structured entities are
used by the Allianz Group to source out certain risks to investors as
part of its reinsurance business. Generally, the classification of enti-
ties as structured entities may require significant judgment.
In the following, the business activities involving unconsolidated
structured entities are described.
OF THE ALLIANZ GROUP IN STRUCTURED ENTITIES
Under IFRS 12, a structured entity is defined as an entity that has been
designed so that voting rights or similar rights are not the dominant
factor in deciding who controls the entity, such as when any voting
rights relate to administrative tasks only and the relevant activities
are directed by means of contractual arrangements.
NATURE, PURPOSE AND ROLE
37-Interests in unconsolidated
structured entities
As of 31 December 2016, the Allianz Group received cash collat-
eral with a carrying amount of € 163 MN (2015: € 212 MN).
Financial assets are pledged as collateral as part of sales and repur-
chases, securities borrowing, and transactions with derivatives,
under terms that are usual and customary for such activities. In addi-
tion, as part of these transactions, the Allianz Group has received col-
lateral that it is permitted to sell or repledge in the absence of default.
As of 31 December 2016, the Allianz Group has received collateral,
consisting of fixed income and equity securities, with a fair value of
€ 3,799 MN (2015: € 2,349 MN), which the Allianz Group has the right to
sell or repledge. For the years ended 31 December 2016 and 2015, no
previously received collateral was sold or repledged by the Allianz
Group.
11,365
12,677
2,295
3,810
2,295
3,810
9,070
8,867
Investments
Loans and advances to banks and customers
Subtotal
Collaterals with right to resell or repledge
Investments
Subtotal
Total
1,946
2016
9
7
6,240
6,337
2,618
2,726
2015
FAIR VALUE HIERARCHY (ITEMS NOT CARRIED AT FAIR VALUE)
26,788
Total
18,380
Real estate held for investment
6,207
5,806
40
3,165
36
1,452
1,677
362
9,031
8,784
148
99
Investments in associates and joint ventures
18,380
2,805
1,368
1,434
Held-to-maturity investments
FINANCIAL ASSETS
Total
Level 3 3
2015
Level 2 2
Level 1 1
Total
Level 3 3
Level 2 2
Level 1 1
2016
as of 31 December
3
17,810
17,810
Loans and advances to banks and customers
Total
14,256
Subordinated liabilities
51
8,479
Certificated liabilities
25,563
13,051
3,938
8,574
13,062
1,896
4,053
7,113
Liabilities to banks and customers
FINANCIAL LIABILITIES
163,579
72,156
5,913
80,130
38,378
124,422
4,978
82,913
7,113
48,505
7,446
81,647
65,544
154,637
7,018
84,405
136,397
7,283
n/a
Net asset value
29,233
Corporate bonds
Available-for-sale investments
7,268
184
3,055
4,027
8,333
187
3,494
4,652
Subtotal
5,010
137
201,489
1,037
5,426
178
1,043
4,205
income
Financial assets designated at fair value through
2,258
47
2,018
192
2,907
9
2,451
447
3,836
14,152
244,874
28,428
Equity securities
3,938
1,548
1,762
627
4,305
2,504
1,018
783
Other
21,414
532
20,673
210
21,396
519
20,702
182,185
9,754
220,367
Government and government agency bonds
33,476
165,099
Financial assets held for trading
339
41,977
159,999
47
202,023
MBS/ABS
175
198,914
34,169
Financial assets carried at fair value through income
Total
7,615
Subordinated liabilities
Certificated liabilities
2,585
2,585
2,894
2,894
472
472
159
159
Derivative financial instruments and firm commitments included in other liabilities
Financial liabilities for puttable equity instruments
105,873
105,873
8,530
111,325
Financial liabilities for unit-linked contracts
9,207
25,563
25,531
13,062
13,038
Liabilities to banks and customers
9,207
10,737
10,737
Financial liabilities held for trading
FINANCIAL LIABILITIES
565
565
677
111,325
8,383
9,208
13,530
Level 3 3
Level 22
Level 11
Total
Level 3 3
Level 22
Level 1 1
2016
2015
as of 31 December
€ MN
FAIR VALUE HIERARCHY (ITEMS CARRIED AT FAIR VALUE)
The following table presents the fair value hierarchy for financial
instruments carried at fair value in the consolidated balance sheets
as of 31 December 2016 and 2015:
Financial liabilities for puttable equity instruments.
in other assets and other liabilities, and
Derivative financial instruments and firm commitments included
Financial assets and liabilities for unit-linked contracts,
14,256
12,258
13,100
As of 31 December 2016, fair values could not be reliably measured for
equity investments with carrying amounts totaling € 100 MN (31 De-
cember 2015: € 216 MN). These investments are primarily investments
in privately held corporations and partnerships. During the year
ended 31 December 2016, such investments with carrying amounts of
€ 58 MN (2015: € 62 MN) were sold. The gains and losses from these
disposals were immaterial.
FINANCIAL ASSETS
Annual Report 2016 - Allianz Group
D - Consolidated Financial Statements
FAIR VALUE MEASUREMENT ON A RECURRING BASIS
The following financial assets and liabilities are carried at fair value
on a recurring basis:
Financial assets and liabilities held for trading,
Financial assets and liabilities designated at fair value through
income,
Available-for-sale investments,
123
781
7,829
42,779
- OTHER TRADING LIABILITIES
FINANCIAL LIABILITIES HELD FOR TRADING
For level 3, the fair value is mainly determined based on the
income approach using deterministic discounted cash flow models.
A significant proportion of derivative liabilities represent derivatives
embedded in certain life insurance and annuity contracts. Significant
non-market observable input parameters include mortality rates and
surrender rates.
For level 2, the fair value is mainly determined using the income
approach. Valuation techniques applied for the income approach
mainly include discounted cash flow models as well as the Black-
Scholes-Merton model. Main observable input parameters include
volatilities, yield curves observable at commonly quoted intervals,
and credit spreads observable in the market.
- DERIVATIVE FINANCIAL INSTRUMENTS
FINANCIAL LIABILITIES HELD FOR TRADING
are priced by Bloomberg functions, such as Black-Scholes Option
Pricing or the swap manager tool.
AND FIRM COMMITMENTS INCLUDED IN OTHER ASSETS
The fair value of the derivatives is mainly determined based on the
income approach using present value techniques. Primary inputs
include yield curves observable at commonly quoted intervals. The
derivatives are mainly used for hedging purposes. Certain derivatives
DERIVATIVE FINANCIAL INSTRUMENTS
Financial liabilities for unit-linked contracts are valued based on
their corresponding assets.
For level 3, the fair value is mainly determined based on the net
asset value.
For level 2, the fair value is determined using the market or the income
approach. Valuation techniques applied for the income approach
mainly include discounted cash flow models as well as the Black-
Scholes-Merton model.
FINANCIAL ASSETS FOR UNIT-LINKED CONTRACTS
For level 3, the fair value is mainly determined using net asset
values. The net asset values are based on the fair value measurement
of the underlying investments and are mainly provided by fund man-
agers. For certain level 3 equity securities, the capital invested is con-
sidered to be a reasonable proxy for the fair value.
The fair value is mainly determined based on the income approach
using present value techniques. Primary inputs comprise swap
curves, share prices, and dividend estimates.
For level 2, the fair value is mainly determined using the market
approach or net asset value techniques for funds. For certain private
equity investments, the funds are priced based on transaction prices
using the cost approach. As there are only few holders of these funds,
the market is not liquid and transactions are only known to partici-
pants.
The valuation techniques for these debt securities are similar. For
level 2 and level 3, the fair value is determined using the market and
the income approach. Primary inputs for the market approach are
quoted prices for identical or comparable assets in active markets
where the comparability between security and benchmark defines
the fair value level. The income approach in most cases means that
a present value technique is applied where either the cash flow or the
discount curve is adjusted to reflect credit risk and liquidity risk.
Depending on the observability of these risk parameters in the market,
the security is classified as level 2 or level 3.
Other debt securities.
Government and government agency bonds,
Corporate bonds, and
Other asset-backed securities,
(residential and commercial),
Corporate mortgage-backed securities
Government and agency mortgage-backed securities
(residential and commercial),
Available-for-sale investments - Debt securities
Debt securities include:
AVAILABLE-FOR-SALE INVESTMENTS
For level 2, the fair value is determined using the market approach.
For level 3, equity securities mainly represent unlisted equity securi-
ties measured at cost.
Financial assets designated at fair value through income
- Equity securities
D - Consolidated Financial Statements
Annual Report 2016 - Allianz Group
124
Available-for-sale investments - Equity securities
DERIVATIVE FINANCIAL INSTRUMENTS AND
FIRM COMMITMENTS INCLUDED IN OTHER LIABILITIES
For level 2, the fair value is mainly determined using the income
approach. Primary inputs include interest rates and yield curves
observable at commonly quoted intervals.
FINANCIAL LIABILITIES
6,205
Range
Non-market
observable input(s)
Valuation technique(s)
31 December 2016
Fair value as of
1-Presentation not meaningful.
Variable annuities
Derivative financial instruments
Fixed-indexed annuities
Financial liabilities held for trading
Corporate bonds
Equity securities
Available-for-sale investments
Description
€ MN
QUANTITATIVE DESCRIPTION OF VALUATION TECHNIQUE(S) AND NON-MARKET OBSERVABLE INPUT(S) USED
Quantification of significant non-market observable inputs
The following table shows the quantitative description of the valua-
tion technique(s) and input(s) used for the level 3 portfolios described
above:
FOR PUTTABLE EQUITY INSTRUMENTS
Financial liabilities for puttable equity instruments are generally
required to be recorded at the redemption amount with changes
recognized in income. For level 2 and level 3, the fair value is mainly
determined using present value techniques.
SIGNIFICANT TRANSFERS OF FINANCIAL INSTRUMENTS
CARRIED AT FAIR VALUE
In general, financial assets and liabilities are transferred from level 1
to level 2 when liquidity, trade frequency, and activity are no longer
indicative of an active market. The same policy applies for transfers
from level 2 to level 1.
SIGNIFICANT LEVEL 3 PORTFOLIOS
- NARRATIVE DESCRIPTION AND SENSITIVITY ANALYSIS
The fair value is mainly determined based on net asset values for
funds and the market approach.
Available-for-sale investments - Equity securities
Equity securities within available-for-sale investments classified as
level 3 mainly comprise private equity fund investments as well as
alternative investments of the Allianz Group, and in most cases are
delivered as net asset values by the fund managers (€ 6.2 BN). The net
asset values are calculated using material, non-public information
about the respective private equity companies. The Allianz Group has
only limited insight into the specific inputs used by the fund man-
agers and hence a narrative sensitivity analysis is not applicable. The
fund's asset manager generally prices the underlying single portfolio
companies in line with the International Private Equity and Venture
Capital Valuation (IPEV) guidelines using discounted cash flow
(income approach) or multiple methods (market approach). For
125
D - Consolidated Financial Statements
certain investments, the capital invested is considered to be a rea-
sonable proxy for the fair value. In these cases, sensitivity analyses are
also not applicable.
Available-for-sale investments - Corporate bonds
Corporate bonds within available-for-sale investments classified as
level 3 are mainly priced based on the income approach. The primary
non-market observable input used in the discounted cash flow meth-
od is an option-adjusted spread taken from a benchmark security
(€ 7.3 BN). A significant yield increase of the benchmark securities in
isolation could result in a decreased fair value, while a significant
yield decrease could result in an increased fair value. However, a 10%
stress of the main non-market observable inputs has only immaterial
impact on fair value.
Financial liabilities held for trading
Financial liabilities held for trading mainly include embedded
derivative financial instruments relating to annuity products that are
priced internally, using discounted cash flow models (€ 8.9 BN). A sig-
nificant decrease (increase) in surrender rates, in mortality rates, or
in the utilization of annuitization benefits could result in a higher
(lower) fair value. For products with a high death benefit, surrender
rates may show an opposite effect. However, a 10% stress of the main
non-market observable inputs has only immaterial impact on fair
value.
Annual Report 2016 - Allianz Group
Financial assets designated at fair value through income
- Debt securities
The fair value is mainly determined based on the income approach,
using present value techniques and the Black-Scholes-Merton model.
Primary inputs for the valuation include volatilities, interest rates,
yield curves, and foreign exchange rates observable at commonly
quoted intervals.
- Derivative financial instruments
Financial liabilities held for trading
FINANCIAL LIABILITIES
565
602,071
19,145
565
371,770
211,155
677
632,603
25,906
677
413,137
193,560
Total
commitments included in other assets
Derivative financial instruments and firm
105,873
488,365
18,796
164
365,396
2,755
32,932
776
6,915
40,624
Subtotal
97,836
36
Financial assets for unit-linked contracts
389,089
19,877
25,342
512,268
377
111,325
104,174
102,954
91,071
Derivative financial instruments and firm commitments included in other assets
Financial liabilities for unit-linked contracts
1,538
19,877
Financial assets held for trading
Financial assets held for trading - Debt and equity securities
The fair value is mainly determined using the market approach. In
some cases, it is determined based on the income approach, using
interest rates and yield curves observable at commonly quoted
intervals.
AT FAIR VALUE THROUGH INCOME
FINANCIAL ASSETS CARRIED
3-Non-market observable inputs
2-Market observable inputs
1-Quoted prices in active markets
2,585
118,137
19
8,317
4,343
71
2,496
105,478
472
472
159
2,894
125,117
145
9,686
21,664
9,163
377
10,737
111,325
28
102,954
1,046
2,755
8,134
164
91,071
9,207
105,873
commitments included in other liabilities
3
Financial liabilities for puttable equity instruments
Total
2,657
156
92
93,767
Derivative financial instruments and firm
D - Consolidated Financial Statements
INCOME TAXES RELATING TO COMPONENTS
-long duration
Settlement payments/Assets distributed on
settlement4
(50)
(229)
(50)
(229)
Foreign currency translation adjustments
(213)
275
(192)
272
15
(20)
9
(240)
Changes in the consolidated subsidiaries
1
(200)
(178)
1
(23)
Balance as of 31 December
23,316
22,327
14,048
13,333
32
67
9,300
of the Allianz Group5
(46)
(286)
Divestitures³
(2)
Remeasurements recognized in the
consolidated statements of comprehensive
income (before deferred taxes)
1,268
(691)
657
28
(37)
(2)
574
(722)
Employer contributions
334
316
(334)
(316)
Plan participants' contributions
112
111
112
111
Benefits paid
(700)
(693)
(413)
(413)
(287)
(280)
9,062
thereof assets
(102)
(87)
During the year ended 31 December 2016, the defined benefit
costs related to post-retirement health benefits amounted to € 1 MN
(2015: gain € 1 MN).
ASSUMPTIONS
The assumptions for the actuarial computation of the defined benefit
obligation and the recognized expense depend on the circumstances
in the particular country where the plan has been established.
The calculations are based on current actuarially calculated
mortality tables, projected turnover depending on age and length of
service and internal Allianz Group retirement projections. Although
this represents the best estimate as of today, considering a further
increase in life expectancy could be reasonable. The weighted aver-
age life expectancy of a currently 65-year-old plan participant is
about 89.2 years for women and 86.8 years for men. An increase in life
expectancy by one year would lead to an increase of the defined ben-
efit obligation by € 739 MN.
134
Annual Report 2016 - Allianz Group
The weighted average values of the assumptions for the Allianz
Group's defined benefit plans used to determine the defined benefit
obligation and the recognized expense are as follows:
ASSET ALLOCATION OF PLAN ASSETS
€ MN
as of 31 December
Equity securities
ASSUMPTIONS FOR DEFINED BENEFIT PLANS
%
as of 31 December
Quoted
Non-quoted
Debt securities
D - Consolidated Financial Statements
2016
2015
1,683
1,665
4
2016
2015
Quoted
5,470
5,089
Discount rate
1.9
As of 31 December 2016, post-retirement health benefits included in
the defined benefit obligation and in the net amount recognized
amounted to € 10 MN (2015: € 11 MN) and € 10 MN (2015: € 11 MN), respec-
tively.
(37)
6-As of 31 December 2016, € 8,071 MN (2015: € 7,857 MN) of the defined benefit obligation are wholly
unfunded, while € 15,245 MN (2015: € 14,470 MN) are wholly or partly funded.
4- For 2016, includes € 50 MN for the Enhanced Value Transfer program in Ireland; for 2015, € 225 MN for the
plan restructuring in the U.K.
thereof liabilities
9,401
9,149
thereof alloted to:
Germany
United Kingdom
Switzerland
17,609
16,807
8,926
8,382
1,793
1,696
1,641
1,564
1,353
1,309
1,382
1,350
32
52
8,683
8,425
152
132
3
12
1- The asset ceiling is determined by taking the reduction of future contributions into account.
2- Includes €31 MN for the conversion rate decrease in Switzerland and for Ireland € 72 MN from the
Enhanced Value Transfer program, excluding the additional contribution of € 35 MN for the new contri-
bution based plan which is shown under Defined contribution plans.
3-Relates to the reclassification of the assets and liabilities of Oldenburgische Landesbank AG as held for
sale.
5- For 2015, these include € 204 MN (defined benefit obligation) and € 183 MN (fair value of plan assets) for
the deconsolidated subsidiary Selecta.
2.4
(2)
Change in effect of asset ceiling in excess of interest
GERMANY
Most active German employees participate in contribution-based
plans using different vehicles to cover the base salary both below and
above the German social security ceiling (GSSC). Since 1 January 2015,
Allianz Group contributes for new entrants and for the majority of
contribution-based pension plan beneficiaries above the GSSC to the
low-risk pension plan “My Allianz Pension", where only contributions
are preserved. For salary above the GSSC, the Allianz Group decides
each year whether and to which extent a budget for the contribution-
based pension plans is provided. Independently of this decision, an
additional risk premium is paid to cover death and disability. Gener-
ally the accruals of the contribution-based pension plans are wholly
funded, whereas the grandfathered plans are funded to a minor
extent. On retirement, the accumulated capital is paid as a lump sum
or converted to a lifetime annuity.
Employees who entered Allianz before 1 January 2015 participate
in the Allianz Versorgungskasse VVaG (AVK), financed through
employee contributions, and the Allianz Pensionsverein e.V. (APV),
financed by the employer. Both pension funds provide pension ben-
efits for the base salary up to the GSSC and are wholly funded along
local regulatory requirements and were closed for new entrants,
effective 31 December 2014. AVK and APV are legally separate admin-
istered pension funds with trustee boards being responsible for the
investment of the assets and the risk management. AVK is subject to
German insurance regulation. The assets of the contribution-based
pension plans are allocated to a trust (Methusalem Trust e.V.) and
managed by a board of trustees. For the AVK the annual minimum
interest rate guaranteed is 1.75%-3.50%, depending on the date of
joining the Allianz Group, and for the closed part of the contribution-
based pension plan it is 2.75%.
There is also a partly funded defined benefit pension plan for
agents (VertreterVersorgungsWerk, vvw), which has been closed for
new entrants as of 31 December 2011. A part of the pension plan serves
as a replacement for the compensatory claim of agents according to
German Commercial Code (§ 89b). VVW is close to a final salary ben-
efit plan and pension increases are broadly linked to inflation.
Pension increases apart from AVK and APV are guaranteed at
least with 1% p.a. Depending on legal requirements, some pension
increases are linked to inflation. In AVK the complete surplus share of
the retirees is used to increase their pension. The period in which a
retirement benefit can be drawn is usually between age 60 and age 67.
Disability benefits are granted until retirement pension is paid.
In the case of death in the previous plans, surviving dependents nor-
mally receive 60% (widow/widower) and 20% (per child) of the origi-
nal employee's pension, in total not to exceed 100%. In “My Allianz
Pension” the surviving dependents gain the accrued capital.
Additionally, the Allianz Group offers a deferred compensation
program, “Pensionszusage durch Entgeltumwandlung (PZE)", for
active employees. Within some boundaries they convert at their dis-
cretion parts of their gross income and receive in exchange a pension
commitment of equal value. PZE is qualified as a defined benefit plan
with minor risk exposure.
UNITED KINGDOM
The U.K. operates a funded pension scheme, the Allianz Retirement
and Death Benefits Fund ("the Fund"). The trustee board is required
by law to act in the best interests of members and is responsible for
setting certain policies (e.g. investment and contribution policies) of
the Fund.
The Fund is a defined benefit pension scheme. From 1 July 2015,
the Fund closed to future accrual and no more defined benefit bene-
fits are accrued beyond that date. A new Group Personal Pension Plan
(GPPP) outside of the Fund was established in 2015 and all future
accrual of benefits has been via the GPPP from 1 July 2015.
The Fund provides pension increases broadly linked to U.K. inflation.
Since 1 July 2015, contributions to the Fund are made only by the
employer in respect of the deficit of the Fund.
SWITZERLAND
Pension plans in Germany, the U.K. and Switzerland are described
in more detail regarding key risks and regulatory environment, as
each of them contributes more than 5% to the Allianz Group's defined
benefit obligation or its plan assets.
In Switzerland there are obligatory corporate pension plans, eligible
for all employees. The plans are wholly funded through legally sepa-
rate trustee-administered pension funds, with the trustee board
being responsible for the investment of the assets and risk manage-
ment. The plans are contribution-based and cover the risks of longe-
vity, disability and death. Employees contribute only a small amount
whereas the employer contributes for the complete risk coverage and
a large part of the savings components. The interest rate is decided
annually by the board of the pension funds. For the mandatory part,
the minimum interest rate is regulated by law and reviewed annually
(1.25% in 2016, 1.00% in 2017). At retirement, beneficiaries can choose
between a lump sum payment, an annuity or a combination of both
where the part which is not granted as a lump sum is converted to a
fixed annuity according to the rules of the pension fund, taking into
account legal requirements.
Annual Report 2016 - Allianz Group
133
D - Consolidated Financial Statements
DEFINED BENEFIT PLANS
The following table sets out the changes in the defined benefit obli-
gation, in the fair value of plan assets, in the effect of the asset ceiling
as well as in the net defined benefit balance for the various Allianz
Group defined benefit plans:
RECONCILIATION OF DEFINED BENEFIT OBLIGATION, FAIR VALUE OF PLAN ASSETS, EFFECT OF ASSET CEILING AND NET DEFINED BENEFIT BALANCE
€ MN
Defined benefit obligation
Fair value of plan assets
Effect of asset ceiling'
||
III
Net defined benefit balance
(1-11+111)
If employees contract out of the Allianz Suisse pension plan, they
have to take their vested pension capital ("Freizügigkeitsleistung") to
the next employer, which implies a small liquidity risk.
In the Pension Task Force, the heads of Group HR, Group Account-
ing and Reporting, Group Treasury and Corporate Finance, Group
Planning and Controlling, Group Risk and AIM met four times to pro-
vide global governance and pre-align pension-related topics such as
risk management and Solvency II prior to relevant Group Committee
meetings.
Typically associated with defined benefit plans are biometric
risks like longevity, disability and death as well as economic risks like
interest rates, inflation and compensation increases. New plans are
primarily based on contributions and may include, in some cases,
guarantees such as the preservation of contributions or minimum
interest rates.
The Allianz Group provides competitive and cost-effective retire-
ment and disability benefits using risk appropriate vehicles. The
plans may vary from country to country due to the different legal,
fiscal and economic environment.
4,855
2015
4,133
Investment in private equity funds
and similar instruments
9,640
Investment in real estate and infrastructure
3,979
Maintenance, IT-services, sponsoring
and other obligations
2,413
Total
20,887
OTHER COMMITMENTS AND CONTINGENCIES
Other contingencies
5,460
1,958
2,762
14,313
In accordance with § 5 (10) of the Statutes of the Joint Fund for Secur-
ing Customer Deposits (“Einlagensicherungsfonds”), Allianz SE has
undertaken to indemnify the Federal Association of German Banks
("Bundesverband deutscher Banken e.V.") for any losses it may incur
by reason of supporting measures taken in favor of Oldenburgische
Landesbank AG (OLB) and Münsterländische Bank Thie & Co. KG. With
respect to Münsterländische Bank Thie & Co. KG, the declaration has
been withdrawn in January 2016.
Allianz and HT1 Funding GmbH have signed a Contingent Indem-
nity Agreement in July 2006, pursuant to which Allianz may, in certain
circumstances, be obliged to make payments to HT1 Funding GmbH.
HT1 Funding GmbH issued nominal € 1,000 MN Tier 1 Capital Securi-
ties with an annual coupon of 6.352% (as of 30 June 2017, the coupon
will be 12-month EURIBOR plus a margin of 2.0% p.a.). The contingent
payment obligation of the Allianz Group was reduced in 2012 follow-
ing a reduction of the nominal amount of the Tier 1 Capital Securities
from € 1,000 MN to € 416 MN. The securities have no scheduled matu-
rity and the security holders have no right to call for their redemption.
The securities may be redeemed annually on 30 June at the option of
the issuer, starting on 30 June 2017. It has been communicated that
the securities will not be redeemed in June 2017. The expected obliga-
tions for Allianz SE for the foreseeable future have been recognized in
other provisions. However, it is not possible for the Allianz Group to
predict the ultimate payment obligations at this point in time.
Other commitments
Pursuant to §§ 221 ff. of the German Insurance Supervision Act ("Ver-
sicherungsaufsichtsgesetz" - VAG), mandatory insurance guarantee
schemes ("Sicherungsfonds") for life insurers as well as for health
insurers are implemented in Germany, which are financed through
their member undertakings.
The insurance guarantee scheme for life insurers levies annual
contributions and, under certain circumstances, special contribu-
tions. As of 31 December 2016, the future liabilities of Allianz Lebens-
versicherungs-AG and its subsidiaries to the insurance guarantee
scheme pursuant to the SichLVFinV amount to annual contributions
of € 11.2 MN (2015: € 11.9 MN) and potential special contributions of,
in principle, € 194 MN (2015: € 157 MN) per year. In addition, Allianz
Lebensversicherungs-AG and some of its subsidiaries have assumed
a contractual obligation to provide, if required, further funds to Pro-
tektor Lebensversicherungs-AG ("Protektor”), a life insurance com-
pany that has assumed the task of the mandatory insurance guaran-
tee scheme for life insurers. Such obligation is, in principle, based on
a maximum of 1% of the sum of the net underwriting reserves with
deduction of payments already provided to the insurance guarantee
scheme. As of 31 December 2016, and under inclusion of the contribu-
tions to the mandatory insurance scheme mentioned above for a
limited period of time, and assuming that no other life insurer is
exempted from payments, the aggregate outstanding commitment of
Allianz Lebensversicherungs-AG and its subsidiaries to the insurance
guarantee scheme and to Protektor is € 1,755 MN (2015: € 1,424 MN).
The mandatory insurance guarantee scheme (Sicherungsfonds)
for health insurers levies only special contributions following the
take-over of insurance contracts. Up until the reporting date, no con-
tributions have been requested. As of 31 December 2016, the potential
liabilities of Allianz Private Krankenversicherungs-AG for special con-
tributions to the insurance guarantee scheme amount to € 54 MN
(2015: € 52 MN).
132
Annual Report 2016 - Allianz Group
D - Consolidated Financial Statements
40 - Pensions and similar obligations
OVERVIEW
Retirement benefits in the Allianz Group, which are granted to
employees and in Germany also to agents, are either in the form of
defined benefit or defined contribution plans. For defined benefit
plans, the beneficiary is granted a defined benefit by the employer or
via an external entity. In contrast to defined contribution arrange-
ments, the future cost to the employer of a defined benefit plan is not
known with certainty in advance.
Balance as of 1 January
Current service costs
Interest expenses
Interest income
(302)
(101)
(1)
545
686
Expenses recognized in the
consolidated income statements
Actuarial (gains)/losses due to
Changes in demographic assumptions
(9)
20
(9)
20
Changes in financial assumptions
1,382
(664)
1,382
(664)
Experience adjustments
(105)
(47)
(105)
(47)
Return on plan assets greater/(less)
than interest income on plan assets
657
28
(657)
(28)
(313)
(37)
493
495
Other²
2016
2015
22,327
22,767
447
495
511
492
313
302
(101)
(1)
857
986
313
302
2016
2015
2016
2015
2016
2015
13,123
67
63
9,062
9,707
447
512
This includes the following rates:
Non-quoted
2,071
The aggregate intrinsic value of share options outstanding was € - MN
for the years ended 31 December 2016 and 2015, respectively.
As of 31 December 2016, the M-unit options outstanding have an
exercise price of between € 10,731.45 and € 22,765.58 and a weighted-
average remaining contractual life of 2.75 years.
The share options settled by delivery of PIMCO LLC shares are
accounted for as equity-settled plans by PIMCO LLC. Therefore, PIMCO
LLC measures the total compensation expense to be recognized for
the equity-settled shares based on their fair value as of the grant date.
The total compensation expense is recognized over the vesting period.
During the year ended 31 December 2016, the Allianz Group
recorded compensation expenses of € 21 MN (2015: € 31 MN) related to
these share options.
EMPLOYEE STOCK PURCHASE PLANS
The Allianz Group offers Allianz SE shares in 20 countries to entitled
employees at favorable conditions. The shares have a minimum
holding period of one to five years. During the year ended 31 Decem-
ber 2016, the number of shares sold to employees under these plans
was 617,084 (2015: 575,584). During the year ended 31 December 2016,
the Allianz Group recognized the difference between the issue price
charged to the subsidiaries of the Allianz Group and the discounted
price of the shares purchased by employees, amounting to € 20 MN
(2015: € 18 MN) as compensation expenses.
Basic earnings per share (€)
Diluted earnings per share (€)
43 Other information
NUMBER OF EMPLOYEES
15.14
15.00
14.56
14.55
As of 31 December 2016, the Allianz Group employed 140,253 (2015:
142,459) people, thereof in Germany 40,167 (2015: 40,600). The average
total number of employees for the year ended 31 December 2016 was
142,066.
454,429,033
PERSONNEL EXPENSES
€ MN
Salaries and wages
Social security contributions
2016
2015
9,197
9,589
and employee assistance
1,351
1,376
Expenses for pensions
and other post-retirement benefits
Total
1,187
PERSONNEL EXPENSES
457,442,990
454,367,277
61,755
2,743,620
Weighted-
average
exercise
price
Number of
options
Weighted-
average
exercise
€ MN
2016
2015
price
€
Outstanding as of 1 January
Granted
Exercised
Forfeited
Outstanding
114,898 20,043.67
49,161 10,731.45
(39,769) 18,952.51 (18,059) 19,852.60
(10,098) 20,236.85 (42,403) 16,525.91
175,360 17,212.31
Net income attributable to shareholders - basic
Effect of potentially dilutive common shares
Net income used attributable to
shareholders- diluted
6,883
6,616
(22)
(5)
6,861
6,611
Weighted average number of common shares
outstanding-basic
454,699,370
as of 31 December
114,192 17,000.84
114,898 20,043.67
Exercisable as of 31 December
Potentially dilutive common shares
Weighted average number of common shares
outstanding-diluted
1,402
11,735
12,367
Annual Report 2016 - Allianz Group
8.7
6.2
4.8
3.0
Total
64.6
54.5
24.9
18.0
1-Primarily general consulting services.
The fees for audit services primarily relate to services rendered for the
audit of the Allianz Group's consolidated financial statements and
for the audit of the statutory financial statements of Allianz SE and its
subsidiaries. Due to the initial application of IDW RS HFA 36 revised,
the fees for the reviews of the consolidated interim financial state-
ments are presented under audit services. Prior-year figures were
adjusted accordingly.
REMUNERATION FOR THE BOARD OF MANAGEMENT
AND THE SUPERVISORY BOARD
As of 31 December 2016, the Board of Management is comprised of
9 members. The following values reflect the full Board of Manage-
ment active in the respective year.
The sum of the total remuneration of the Allianz SE Board of
Management for 2016, excluding the notional accruals of the MTB
2016-2018 and excluding the pension service cost, amounts to
€26 MN (2015, including the payout of the MTB 2013-2015: € 57 MN).
The equity-related remuneration is comprised in 2016 of 66,694¹
(2015: 79,6722) Restricted Stock Units (RSU).
RSU with a total fair value of € 8.9 MN (2015: € 9.7 MN) were granted
to the Board of Management for the year ended 31 December 2016.
In 2016, remuneration and other benefits totaling € 7 MN (2015:
€ 7 MN) were paid to former members of the Board of Management
and dependents, while reserves for current pension obligations and
accrued pension rights totaled € 126 MN (2015: € 122 MN).
The total remuneration for all Supervisory Board members,
including attendance fees, amounted to € 2.0 MN (2015: € 2.0 MN).
Board of Management and Supervisory Board compensation by
individual is included in the Remuneration Report. The information
provided there is considered part of these consolidated financial
statements.
44- Subsequent events
CHANGES IN SUBORDINATED BONDS
In January 2017, Allianz Finance II B.V. called for redemption a € 1.4 BN
4.375% subordinated bond. The bond has been redeemed on 17 Febru-
ary 2017 in accordance with the terms and conditions of the bond.
Furthermore, in January 2017 Allianz SE issued a subordinated
bond in the amount of € 1.0 BN with a scheduled maturity in July 2047,
but with ordinary call rights of Allianz beginning in July 2027. The
coupon of 3.099 % is fixed until July 2027.
Also in January 2017, Allianz SE issued a subordinated bond in
the amount of USD 0.6 BN with a scheduled maturity in January 2049,
but with ordinary call rights of Allianz beginning in January 2029. The
coupon of 5.1% is fixed until January 2029.
SHARE BUY-BACK PROGRAM AND CAPITAL MANAGEMENT
On 16 February 2017, Allianz SE has decided to launch a share buy-back
program with a volume of up to € 3 BN and to simplify capital manage-
ment to make it more flexible. For further details, please refer to the
section "Expected dividend development" of the chapter Outlook 2017
within the Group Management Report.
138
1- The relevant share price used to determine the final number of RSUS granted is only available after sign-off
of the Annual Report by the external auditors, thus numbers are based on a best estimate.
2- The disclosure in the Annual Report 2015 was based on a best estimate of the RSU grants. The figure shown
here for 2015 now includes the actual fair value as of the grant date (4 March 2016). The value therefore
differs from the amount disclosed last year.
Annual Report 2016 - Allianz Group
Other services¹
Number of
options
0.3
1.8
137
D - Consolidated Financial Statements
ISSUANCE OF THE DECLARATION OF COMPLIANCE
WITH THE GERMAN CORPORATE GOVERNANCE CODE
ACCORDING TO § 161 AKTG
On 15 December 2016, the Board of Management and the Supervisory
Board of Allianz SE issued the Declaration of Compliance according
to § 161 AktG, which has been made permanently available to share-
holders on the company's website.
The Declaration of Compliance of the publicly traded group
company Oldenburgische Landesbank AG was issued in December
2016 and has been made available to shareholders on a permanent
basis.
PRINCIPAL ACCOUNTANT FEES AND SERVICES
KPMG AG Wirtschaftsprüfungsgesellschaft (KPMG AG) is the external
auditing firm for the Allianz Group.
For services rendered by KPMG AG and the worldwide member
firms of KPMG International (KPMG), the following fees were recog-
nized as an expense in the fiscal year:
KPMG FEES
€ MN
2015
KPMG worldwide
thereof: KPMG AG
2016
2015
2016
Audit services
48.0
40.3
14.7
9.8
Other attestation
services
6.4
6.2
4.8
4.9
Tax services
1.5
0.6
EARNINGS PER SHARE
2015
2016
1.8
Rate of medical cost trend
1.3
1.0
The recognized expense is recorded based on the assumptions of the
corresponding previous year.
The discount rate assumption is the most significant risk for the
defined benefit obligation. It reflects market yields at the balance
sheet date of high-quality fixed income investments corresponding
to the currency and duration of the liabilities. In the Eurozone, the
decision for the discount rate is based on AA-rated financial and cor-
porate bonds, provided by Allianz Investment Data Services (IDS), and
a standardized cash flow profile for a mixed population. The Internal
Controls Over Financial Reporting (ICOFR) certified Allianz Global
Risk Parameters (GRIPS) methodology is an internal development of
the Nelson-Siegel model and consistently used by Group Risk, Group
Audit, AIM and PIMCO.
The range for the sensitivity calculations was derived by ana-
lyzing the average volatility over a five-year period.
An increase (or decrease) in the discount rate by 50 basis points
would lead to a decrease of € 1.7 BN (or increase of € 1.9 BN) in the
defined benefit obligation.
An increase of pre-retirement benefit assumptions (e.g. salary
increase) of 25 basis points would have an effect of € 71 MN on the
defined benefit obligation. However, the increase of post-retirement
assumptions (e.g. inflation-linked increases of pension payments) of
25 basis points would affect the defined benefit obligation by € 550 MN.
A change in the medical cost trend rate by 100 basis points would
have an effect of € 1 MN on the defined benefit obligation and no
material effect on the defined benefit costs.
PLAN ASSETS/ASSET LIABILITY MANAGEMENT (ALM)
Based on the estimated future cash flows of € 711 MN for 2017, € 745 MN
for 2018, € 770 MN for 2019, € 789 MN for 2020, € 842 MN for 2021 and
€ 4,448 MN for 2022-2026, the weighted duration of the defined benefit
obligation is 15.5 years. The Allianz Group uses, based on the liability
profiles of the defined benefit obligation and on the regulatory fund-
ing requirements, stochastic asset liability models to optimize the
asset allocation from a risk-return perspective.
Due to a well-diversified portfolio of 136,000 plan participants,
there is no reasonable uncertainty of future cash flows to be expected
that could have an impact on the liquidity of the Allianz Group. The
chart below shows the asset allocation:
The bulk of the plan assets are held by Allianz Versorgungskasse
VVaG, Munich, which is not part of the Allianz Group. Plan assets do
not include any real estate used by the Allianz Group and include only
€ 8.9 MN of own transferable financial instruments.
In addition to the plan assets of € 14.0 BN, the Allianz Group has
dedicated assets at Group level amounting to € 7.4 BN as of 31 December
2016, which are likewise managed according to Allianz ALM standards.
CONTRIBUTIONS
For the year ending 31 December 2017, the Allianz Group expects to
contribute € 278 MN to its defined benefit plans and to pay € 301 MN
directly to participants in its defined benefit plans.
DEFINED CONTRIBUTION PLANS
Defined contribution plans are funded through independent pension
funds or similar organizations. Contributions fixed in advance (e.g.
based on salary) are paid to these institutions and the beneficiary's
right to benefits exists against the pension fund. The employer has
no obligation beyond payment of the contributions.
During the year ended 31 December 2016, the Allianz Group re-
cognized expenses for defined contribution plans of € 316 MN (2015:
€ 242 MN). Additionally, the Allianz Group paid contributions for state
pension schemes of € 335 MN (2015: € 385 MN).
41 - Share-based compensation plans
GROUP EQUITY INCENTIVE PLANS
The Group Equity Incentive plans (GEI plans) of the Allianz Group
help senior management, in particular the Board of Management,
focus on the long-term increase in the value of the Allianz Group.
Until 2010, the GEI plans included grants of stock appreciation rights
(SARS). Since 2011, the Allianz Equity Incentive plan (AEI plan) has
replaced the GEI plans.
The SARS granted to a plan participant obligate the Allianz Group
to pay in cash the excess of the market price of an Allianz SE share
over the reference price on the exercise date for each right granted.
The excess is capped at 150% of the reference price. The reference price
represents the average of the closing prices of an Allianz SE share for
the ten trading days following the Financial Press Conference of
Allianz SE in the year of issue. SAR which were granted up to 2008 vest
after two years and expire after seven years. From the 2009 grant
onwards, SARS vest after four years and also expire after seven years.
Annual Report 2016 - Allianz Group
135
D - Consolidated Financial Statements
Upon vesting, SARS may be exercised by the plan participant if the
following market conditions are attained:
During their contractual term, the market price of the Allianz SE
share has outperformed the Dow Jones EURO STOXX Price Index at
least once for a period of five consecutive trading days; and
the Allianz SE market price is in excess of the reference price by at
least 20% on the exercise date.
In addition, upon the death of a plan participant, a change of control,
or notice for operational reasons, the SARS vest immediately and will
be exercised by the company provided the above market conditions
have been attained.
1.5
Upon the expiration date, any unexercised SARS will be exercised
automatically if the above market conditions have been attained. The
SARS are forfeited if the plan participant ceases to be employed by the
Allianz Group or if the exercise conditions are not attained by the
expiration date.
Rate of pension increase
1.8
2,049
Real estate
657
632
Germany
Annuity contracts
3,121
2,980
1.8
2.3
Life insurance investment products
868
728
- short duration
1.4
2.0
Other
175
190
U.K.
2.9
3.9
Total
14,048
13,333
Switzerland
0.8
1.0
Rate of compensation increase
2.1
Mortgage loans and multi-tranche loans
The fair value of the SARS at grant date is measured using a Cox-
Ross-Rubinstein binomial tree option pricing model. Volatility was
derived from observed historical market prices. In the absence of
historical information regarding employee stock appreciation exer-
cise patterns, the expected life has been estimated to equal the term
to maturity of the SARS.
As of 31 December 2016, the Allianz Group recorded provisions
of € 13 MN (2015: € 26 MN) in Other liabilities for the unexercised SARS.
The fair value of the underlying M-unit options was measured
using the Black-Scholes option pricing model. Volatility was derived
in part by considering the average historical and implied volatility of
a selected group of peers. The expected life of one granted option was
calculated based on treating the three vesting tranches (one third in
years 3, 4, and 5) as three separate awards.
136
1- For further details regarding the description and the conditions of the PIMCO LLC Class B-Unit Purchase
Plan, please refer to the Annual Report 2015, note 49 Share-based compensation plans.
Annual Report 2016 - Allianz Group
D - Consolidated Financial Statements
The following table provides the assumptions used in calculating
the fair value of the M-unit options at grant date:
ASSUMPTIONS OF CLASS M-UNIT PLAN
Weighted-average fair value of options granted
Assumptions:
Expected term (years)
Expected volatility
Expected dividend yield
Risk free rate of return
2016
259.64
3.84
%
24.8
%
14.9
%
1.3
2015
The number and weighted-average exercise price of the M-unit
options outstanding and exercisable are as follows:
RECONCILIATION OF OUTSTANDING M-UNIT OPTIONS
OTHER SHARE OPTION AND SHAREHOLDING PLANS
The Allianz Group has other local share-based compensation plans,
including share option and employee share purchase plans, none of
which, individually or in the aggregate, are material to the consoli-
dated financial statements. During the year ended 31 December 2016,
the total expenses recorded for these plans were € 4 MN (2015: € 3 MN).
42-Earnings per share
Earnings per share are calculated by dividing net income attributable
to shareholders by the weighted average number of common shares
outstanding (excluding treasury shares of 2,300,630 for 2016 (2015:
2,632,723)). For the calculation of diluted earnings per share, nomina-
tor and denominator are adjusted for the effects of potentially dilu-
tive common shares. These effects arise from various share-based
compensation plans of the Allianz Group.
Amaximum of 250,000 M-units are authorized for issuance under
the M-unit Plan.
The SARS are accounted for as cash-settled plans by the Allianz
Group. Therefore, the Allianz Group accrues the fair value of the SARS
as a compensation expense over the vesting period. Upon vesting,
any changes in the fair value of the unexercised SARS are recognized
as a compensation expense. During the year ended 31 December
2016, the Allianz Group recognized compensation expenses related
to the unexercised SARS of € (3) MN (2015: € 18 MN).
In 2008, AllianzGI L.P. launched a new management share-based pay-
ment incentive plan for certain senior level executives and affiliates
of PIMCO LLC. Participants in the plan are granted options to acquire
a new class of equity instruments (M-units), which vest in one-third
increments on approximately the third, fourth and fifth anniversary
of the option grant date. Upon vesting, options will automatically be
exercised in a cashless transaction, but only if they are in the money.
Participants may elect to defer the receipt of M-units through the
M-unit Deferral Plan until termination of their service at the latest.
With the M-unit Plan, participants can directly participate in PIMCO'S
performance. Class M-units are non-voting common equity with lim-
ited information rights. They bear quarterly distributions equal to a
pro-rata share of PIMCO's net distributable income. Deferred M-units
have a right to receive a quarterly cash compensation equal to and in
lieu of quarterly dividend payments.
PIMCO LLC CLASS B-UNIT PURCHASE PLAN¹
During the year ended 31 December 2016, the Allianz Group called the
remaining 473 Class B equity units to terminate the Class B-Unit Pur-
chase plan. The total amount paid related to the call of these Class B
equity units was € 14 MN. For 2015, the Allianz Group recorded a liabil-
ity for the outstanding Class B equity units of € 15 MN in Other liabili-
ties.
ALLIANZ EQUITY INCENTIVE PLAN
Since the 2011 grant year, the Allianz Equity Incentive plan (AEI plan)
has replaced the GEI plans. The AEI plan is granted in the form of
restricted stock units (RSUS) and is part of a new variable compensa-
tion component for the plan beneficiaries.
The RSU granted to a plan participant obligate the Allianz Group
to pay in cash the average closing price of an Allianz SE share on the
last day of the vesting period and the prior nine trading days, or to
convert one RSU into one Allianz SE share. The payout is capped at a
200% share price growth above the grant price.
The RSUs are subject to a vesting period of four years and will be
released on the last day of the vesting period. The Allianz Group can
choose the settlement method for each unit.
In addition, upon the death of a plan participant, a change of
control or notice for operational reasons, the RSUS vest immediately
and will be exercised by the company.
The RSUs are virtual stocks without dividend payments and a
capped payout. The fair value is calculated by subtracting the net
present value of expected future dividend payments until maturity as
well as the fair value of the cap from the prevailing share price as of
the valuation date. The cap is valued as a European short call option,
using prevailing market data as of the valuation date.
The following table provides the assumptions used in calculating
the fair value of the RSUs at grant date:
ASSUMPTIONS OF AEI PLANS
Share price
Average dividend yield
Average interest rate
Expected volatility
20171
157.15
2016
2015
141.15
%
4.9
5.4
154.50
4.6
%
(0.2)
(0.2)
0.1
%
23.5
21.7
18.7
1-The RSUS 2017 are deemed to have been granted to participants as part of their 2016 remuneration.
Consequently, the assumptions for RSU grants delivered in March 2017 are based on best estimation.
The RSUs are accounted for as cash-settled plans, as the Allianz Group
intends to settle in cash. Therefore, the Allianz Group accrues the fair
value of the RSUS as a compensation expense over the service period
of one year and afterwards over the vesting period. During the year
ended 31 December 2016, the Allianz Group recognized compensa-
tion expenses related to the AEI plans of € 113 MN (2015: € 238 MN).
As of 31 December 2016, the Allianz Group recorded provisions
of € 405 MN (2015: € 470 MN) for these RSUS in Other liabilities.
SHARE-BASED COMPENSATION PLANS
OF SUBSIDIARIES OF THE ALLIANZ GROUP
PIMCO LLC CLASS M-UNIT PLAN
2016
13,333
€ MN
A
2,288
101
2,187
AA
17,491
17,491
AAA
2016
Total
customers
income Investments
as of 31 December
Loans and
advances to
banks and
935
through
Financial
assets
CARRYING AMOUNTS OF ABS AND MBS INVESTMENTS BY RATING
€ MN
D - Consolidated Financial Statements
129
Annual Report 2016 - Allianz Group
24
21,616
193
21,419
4,126
28
4,096
284
284
carried at
fair value
468
BBB
935
532
2
Non-investment grade
558
BBB
1,723
A
161
2,796
AA
16,000
AAA
2015
contracts.
Besides the above-mentioned investments in investment funds,
the Allianz Group also holds investment funds to fund unit-linked
insurance contracts. However, these holdings are held on behalf and
for the benefit of unit-linked policyholders only. For that reason, these
holdings are not included in the above-mentioned table. As of
31 December 2016, the volume of unit-linked assets amounted to
€ 111,325 MN (2015: € 105,873 MN). The maximum exposure to loss on
these investments is covered by liabilities recorded for unit-linked
532
The carrying amounts in the tables listed above correspond to an
aggregated amortized cost amount of € 18,279 MN (2015: € 16,196 MN).
This amortized cost amount represents the maximum exposure to
loss for the Allianz Group from these investments. In the reporting
period, the Allianz Group has not provided any financial or other sup-
port to these entities, nor does it have the intention to provide such
support in the future.
16,000
2,957
1,723
558
335
20
21,563
119
21,443
Total
14
5
1
Not rated
297
4
293
Non-investment grade
As of the reporting date, the Allianz Group has receivables from
unconsolidated investment funds, which are mainly due in return for
asset management services, amounting to € 803 MN (2015: € 723 MN).
Furthermore, the Allianz Group has commitments to invest in private
equity funds and similar financial instruments totaling € 9,640 MN as
of 31 December 2016 (2015: € 5,460 MN).
468
3,721
165
Total
customers
Loans and
advances to
banks and
income Investments
through
fair value
Financial
assets
carried at
U.S. Agency
CMBS
CMO/CDO
2016
as of 31 December
CARRYING AMOUNTS OF ABS AND MBS INVESTMENTS BY TYPE OF CATEGORY
€ MN
INTERESTS IN ASSET-BACKED SECURITIES (ABS)
AND MORTGAGE-BACKED SECURITIES (MBS) ISSUED
BY SECURITIZATION VEHICLES
NATURE OF RISKS ASSOCIATED WITH
UNCONSOLIDATED STRUCTURED ENTITIES
Investment funds launched by group-internal asset managers
can be considered to be sponsored by the Allianz Group. As a sponsor,
the Allianz Group through its asset management subsidiaries is
involved in the legal set-up and marketing of internally managed
investment funds. This may include providing seed capital to the
funds and providing administrative services to ensure the investment
funds' operation. Investment funds managed by group-internal asset
managers can be reasonably associated with the Allianz Group. The
use of the Allianz name for investment funds is another indicator that
the Allianz Group has acted as a sponsor for the respective funds.
Information on the management fees generated in the asset manage-
ment business are disclosed in note 25 Fee and commission income
of this Annual Report.
4,587
Income derived from the management of investment funds
includes mainly asset management fees and performance based
fees.
FUND MANAGEMENT ACTIVITIES
With regard to investment activities, income mainly includes
distributions from the funds as well as realized gains and losses from
disposals.
Investment funds are generally subject to stringent regulatory
requirements from financial authorities in all jurisdictions across the
world. Comprehensive regulation of funds protects fund investors
and also helps to limit investment risk. These mechanisms result in
a legal set-up of funds, agreed and accepted by investors and invest-
ment managers, that may lead to a classification as structured enti-
ties under IFRS 12.
Considering the broad variety of investment funds across different
jurisdictions, the classification of investment funds as structured
entities based on the definition in IFRS 12 and current industry prac-
tice is judgmental. As a general rule, the relevant activities of an
investment fund are dedicated to the fund manager via asset manage-
ment agreements. In contrast, influence from investors on the rele-
vant activities of unconsolidated funds is usually either precluded by
legal or regulatory provisions or is not deemed to be substantial.
INVESTMENTS IN INVESTMENT FUNDS
Income derived from the management of securitization vehicles
comprises asset management fees.
Within the asset management business, the Allianz Group acts
as asset manager for some securitization vehicles. The assets under
management of these vehicles amounted to € 1,597 MN as of 31 Decem-
ber 2016 (2015: € 1,753 MN). Some of the affected vehicles have been set
up by the Allianz Group whereas others have been set up by third
parties. In this respect, the role of the Allianz Group is limited to asset
management. The Allianz Group has not invested in these vehicles
being managed.
Income derived from investments in securitization vehicles
mainly includes interest income generated from ABS and MBS, as well
as realized gains and losses from disposals of these securities.
Securitization vehicles invested in by the Allianz Group have
been set up by third parties. Furthermore, the Allianz Group has nei-
ther transferred any assets to these vehicles nor has it provided any
further credit enhancements to them.
The Allianz Group acts as investor in ABS- or MBS-issuing securitiza-
tion vehicles which purchase pools of assets including commercial
mortgage loans (CMBS), auto loans, credit card receivables and oth-
ers. These securitization vehicles refinance the purchase of assets by
issuing tranches of ABS or MBS, whose repayment is linked to the per-
formance of the assets held by the vehicles.
AND MORTGAGE-BACKED SECURITIES (MBS) ISSUED
BY SECURITIZATION VEHICLES
INVESTMENTS IN ASSET-BACKED SECURITIES (ABS)
D - Consolidated Financial Statements
as of 31 December
Within the asset management business, investment funds are estab-
lished and managed to accommodate retail and institutional clients'
requirements to hold investments in specific assets, market segments
or regions. Within the insurance business, policyholder money is
partly invested in investment funds, which include funds managed
by Allianz Group internal asset managers as well as funds set up and
managed by third parties. Investment funds managed or invested in
by Allianz Group may include mutual funds, special funds and other
funds.
4,587
8,030
8,030
3,554
2
9,433
9,433
3,584
3,584
Other
Total
Credit card
Auto
CMO/CDO
CMBS
U.S. AGENCY
2015
21,563
119
21,443
1
2,914
105
3,019
Auto
606
Credit card
328
206
Other
1
5,100
14
5,115
Total
206
4
606
1
Due in 1 year or less
FUTURE MINIMUM LEASE PAYMENTS - OPERATING LEASES
€ MN
Operating leases
As of 31 December 2016, the future minimum lease payments
under non-cancelable operating and finance leases were as follows:
The Allianz Group occupies property in many locations under various
long-term operating leases as well as one long-term finance lease
and has entered into various operating leases covering the long-term
use of data processing equipment and other office equipment.
LEASING COMMITMENTS
ments for such commitments.
The Allianz Group engages in various lending commitments to meet
the financing needs of its customers. They consist of advances, stand-
by facilities, guarantee credits, mortgage loans and public-sector
loans. As of 31 December 2016, the total of loan commitments
amounts to € 1,229 MN (2015: € 1,045 MN) and represents the amounts
at risk in the event that customers draw fully on all facilities and then
default, excluding the effect of any collateral. Since the majority of
these commitments may expire without being drawn upon, these
loan commitments are not representative of actual liquidity require-
LOAN COMMITMENTS
COMMITMENTS
As of 31 December 2016, the performance guarantees amount to
€ 74 MN (2014: € 31 MN), € 44 MN of which are due within one year. The
collateral held amounts to € 25 MN (2015: € 31 MN).
Performance guarantees are given by the Allianz Group to ensure
third-party entitlements if certain performance obligations of the
guarantee recipient are not fulfilled.
PERFORMANCE GUARANTEES
As of 31 December 2016, the indemnification contracts amount
to € 29 MN (2015: € 89 MN). This amount is almost entirely due after five
years.
. The collateral held amounts to € 5 MN (2015: € - MN). Nearly all
customers of the indemnification contracts have an external credit
rating of BB.
Due after 1 year and up to 5 years
Due after 5 years
In connection with the sale of various of the Allianz Group's for-
mer private equity investments, subsidiaries of the Allianz Group
provided indemnities to the respective buyers in the event that certain
contractual warranties arise. The terms of the indemnity contracts
cover ordinary contractual warranties, environmental costs, and any
potential tax liabilities the entity incurred while owned by the Allianz
Group.
INDEMNIFICATION CONTRACTS
As of 31 December 2016, the financial guarantees amount to
€ 437 MN (2015: € 454 MN), € 376 MN of which are due within one year.
The collateral held amounts to € 44 MN (2015: € 57 MN). Nearly all cus-
tomers of the letters of credit have no external credit rating.
The majority of the Allianz Group's financial guarantees are issued to
customers through the normal course of banking business in return
for fee and commission income, which is generally determined based
on rates subject to the nominal amount of the guarantees and inher-
ent credit risks. Once a guarantee has been drawn upon, any amount
paid by the Allianz Group to third parties is treated as a loan to the
customer and is, therefore, basically subject to the credit risk of the
customer or the collateral pledged, respectively.
FINANCIAL GUARANTEES
The guarantees issued by the Allianz Group consist of financial guar-
antees, indemnification contracts and performance contracts.
GUARANTEES
Pacific Investment Management Company LLC (PIMCO) and
Allianz Asset Management of America, L.P. (AAM US), have been named
as defendants in litigation in California brought by William H. Gross,
a former employee of PIMCO, in October 2015. Mr. Gross's complaint
alleges that, even though Mr. Gross resigned, he is entitled to addi-
tional profit sharing payments from PIMCO of at least USD 200 MN.
Allianz believes that this lawsuit is without merit. The ultimate out-
come of this matter cannot yet be determined.
In September 2015 and in January 2017, two separate putative
class action complaints were filed against Allianz Life Insurance
Company of North America (Allianz Life) making allegations similar
to those made in prior class actions regarding the sale of Allianz Life's
annuity products, including allegations of breach of contract and
violation of California unfair competition law. The ultimate outcome
of the cases cannot yet be determined.
for a court review of the appropriate amount of the cash settlement
in a mediation procedure (“Spruchverfahren”). In September 2013,
the district court ("Landgericht") of Frankfurt dismissed the minor-
ity shareholders' claims in their entirety. This decision has been
appealed to the higher regional court (“Oberlandesgericht”) of Frank-
furt. In the event that a final decision were to determine a higher
amount as an appropriate cash settlement, this would affect all of the
approximately 16 MN shares that were transferred to Allianz.
D - Consolidated Financial Statements
Annual Report 2016 - Allianz Group
130
Allianz Group companies are involved in legal, regulatory, and arbi-
tration proceedings in Germany and a number of foreign juris-
dictions, including the United States. Such proceedings arise in the
ordinary course of businesses, including, amongst others, their activ-
ities as insurance, banking and asset management companies,
employers, investors and taxpayers. It is not feasible to predict or
determine the ultimate outcome of the pending or threatened pro-
ceedings. Management does not believe that the outcome of these
proceedings, including those discussed below, will have a material
adverse effect on the financial position and the results of operations
of the Allianz Group, after consideration of any applicable provision.
On 24 May 2002, pursuant to a statutory squeeze-out procedure,
the general meeting of Dresdner Bank AG resolved to transfer shares
from its minority shareholders to Allianz as principal shareholder in
return for payment of a cash settlement amounting to € 51.50 per
share. Allianz established the amount of the cash settlement on the
basis of an expert opinion, and its adequacy was confirmed by a court
appointed auditor. Some of the former minority shareholders applied
LITIGATION
Indemnification contracts are executed by the Allianz Group with
various counterparties under existing service, lease or acquisition
transactions. Such contracts may also be used to indemnify counter-
parties under various contingencies, such as changes in laws and
regulations or litigation claims.
Subtotal
Subleases
Total
2016
PURCHASE OBLIGATIONS
Not rated
PURCHASE OBLIGATIONS
As of 31 December 2016, the net carrying amount of the finance lease
obligation, which is included in other liabilities, amounted to € 150 MN
(2015: € 111 MN). Gross minimum lease payments were reduced by
imputed interest in the amount of € 901 MN (2015: € 890 MN) to receive
the present value of minimum lease payments. The underlying con-
tract expires as of 31 December 2111.
219
192
22
5
Present value
1,120
1,092
22
5
Gross amount
2016
Due after 5 years
Total
Due after 1 year and up to 5 years
403
1,322
1,465
3,190
333
2,857
other contingencies and commitments
For the year ended 31 December 2016, rental expenses totaled
€ 352 MN (2015: € 347 MN), net of sublease rental income received of
Annual Report 2016 - Allianz Group
131
Finance lease
FUTURE MINIMUM LEASE PAYMENTS - FINANCE LEASE
€ MN
as of 31 December
Due in 1 year or less
€ 11 MN.
39- Litigation, guarantees and
D - Consolidated Financial Statements
Transactions between Allianz SE and its subsidiaries that are to
be deemed related parties have been eliminated in the consolidation
and are not disclosed in the notes.
7,333
7,326
7
Private equity funds
6,625
3,886
3,019
867
Stock funds
6,122
503
Debt funds
Total
income Investments
through
fair value
assets
carried at
Financial
28
14
Business relations with joint ventures and associates are set on
an arm's length basis.
44
Total
4
Property funds
21,419
21,616
The carrying amounts in the tables listed above correspond to an
aggregated amortized cost amount of € 21,425 MN (2015: € 21,244 MN).
This amortized cost amount represents the maximum exposure to
loss for the Allianz Group from these investments. In the reporting
period, the Allianz Group has not provided any financial or other sup-
port to these entities, nor does it have the intention to provide such
support in the future.
INVESTMENTS IN INVESTMENT FUNDS
INVESTMENTS IN INVESTMENT FUNDS BY ASSET CLASS
€ MN
2016
193
3,330
as of 31 December
Other funds
Private equity funds
1
6,360
6,361
Property funds
Other funds
3,865
242
1,623
Total
2,633
530
19,288
Out of the total investment fund exposure, investments of € 10.2 BN
(2015: € 10.1 BN) relate to listed investment funds, whereas invest-
ments of € 11.6 BN (2015: € 9.2 BN) relate to unlisted investment funds.
3,330
Information on the remuneration of Board members and transactions
with these persons can be found in the Remuneration Report, starting
on page 24.
38-Related party transactions
288
17,665
2,984
2,633
Stock funds
271
881
Total
1,648
401
672
21,846
2015
20,198
Debt funds
499
5,399
5,898
100.0
100.0
CEPE du Bois de la Serre S.à r.l., Versailles
100.05
Château Larose Trintaudon S.A., Saint Laurent Médoc
100.0
100.0
Euler Hermes Sigorta A.S., Istanbul
Euler Hermes Singapore Services Pte Ltd., Singapore
Euler Hermes South Express S.A., Brussels
100.0
Chicago Insurance Company Corp., Chicago, IL
100.0
100.0
Arges Investments II N.V., Amsterdam
100.0
100.0
CIC Allianz Insurance Ltd., Sydney
100.0
100.0
Arges Investments I N.V., Amsterdam
100.0
100.0
Euler Hermes Services Sp. z o.o., Warsaw
CEPE de Sambres S.à r.I., Versailles
100.0
Botanic Building SPRL, Brussels
100.0
APKV US Private REIT LP, Wilmington, DE
100.0
CEPE de Vieille Carrière S.à r.I., Versailles
Euler Hermes Services Tunisia S.à r.l., Tunis
100.0
Arcalis Retraite S.A., Paris la Défense
Arcalis UN, Paris
APP Broker S.r.I., Trieste
CEPE des Portes de la Côte d'Or S.à r.l., Versailles
Euler Hermes Services UK Limited, London
100.0
100.0
Arab Gulf Health Services LLC, Dubai
100.0
100.0
CEPE du Blaiseron S.à r.I., Versailles
100.0
Euler Hermes Serviços de Gestão de Riscos Ltda.,
São Paulo
100.0
100.0
63.9
Euler Hermes Luxembourg Holding S.à r.l.,
Sanayi ve Ticaret A.S., Ankara
81.0
Global Transport & Automotive Insurance Solutions
Pty Limited, Sydney
Beykoz Gayrimenkul Yatirim Insaat Turizm
Euler Hermes Group SA, Paris la Défense
100.0
Rotterdam
100.0
Owings Mills, MD
Beleggingsmaatschappij Willemsbruggen B.V.,
100.0
GIE Euler Hermes SFAC Services, Paris la Défense
Euler Hermes Excess North America LLC,
100.0
AZOA Services Corporation, New York, NY
100.0
Chatillon
APKV US Private REIT GP LLC, Wilmington, DE
100.0
100.0
Euler Hermes Emporiki Services Ltd., Athens
Euler Hermes Hellas Credit Insurance SA, Athens
100.0
100.0
Hauteville Insurance Company Limited, St Peter Port
100.0
100.0
Hunter Premium Funding Ltd., Sydney
100.0
Limited, Seoul
Borgo San Felice S.r.l., Castelnuovo Berardenga
(Siena)
100.0
Home & Legacy Insurance Services Limited, London
Euler Hermes Korea Non-life Broker Company
100.0
IEELV GP S.à r.I., Luxembourg
100.0
100.0
Euler Hermes Japan Services Ltd., Tokyo
Biuro Informacji Gospodarczej Euler Hermes S.A.,
Warsaw
100.0
100.0
Havelaar & van Stolk B.V., Rotterdam
Euler Hermes Hong Kong Service Limited, Hong Kong
66.0
Bilan Services S.N.C., Nanterre
100.0
Helviass Verzekeringen B.V., Rotterdam
100.0
Allianz Risk Transfer AG, Schaan
100.0
100.0
Allianz Marine & Transit Underwriting Agency
Allianz Risk Transfer (UK) Limited, London
100.0
American Financial Marketing Inc., Minneapolis, MN
100.0
Pty Ltd., Sydney
75.0
100.0
AMOS Austria GmbH, Vienna
Allianz Marine (UK) Ltd., Ipswich
100.0
100.0
Allianz Risk Transfer Inc., New York, NY
100.0
AMOS European Services SAS, Paris
100.0
Allianz Maroc S.A., Casablanca
98.9
Allianz Risk Transfer N.V., Amsterdam
100.0
Earth City, MO
AMOS IberoLatAm S.L., Barcelona
100.0
100.0
B.V., Rotterdam
Allianz Managed Operations & Services Netherlands
AZOA C.V., Amsterdam
100.0
Allianz Renewable Energy Partners VII LP, London
Allianz Renewable Energy Partners VIII Limited,
100.0
AllianzGo S.r.l., Trieste
100.0
Allianz-Slovenská DSS a.s., Bratislava
100.0
Allianz Managed Operations & Services
London
100.0
Allianz-Slovenská poist'ovna a.s., Bratislava
99.6
Thailand Co. Ltd., Bangkok
100.0
Allianz Risk Consultants Inc., Los Angeles, CA
100.0
Allianz Management Services Limited, Guildford
American Automobile Insurance Company Corp.,
Allianz Risk Transfer (Bermuda) Ltd., Hamilton
100.0
100.0
99.9
owned¹
AMOS of America Inc., Wilmington, DE
100.0
Ann Arbor Annuity Exchange Inc., Ann Arbor, MI
100.0
APEH Europe VI, Paris
99.63
CEPE de Haut Chemin S.à r.I., Versailles
CEPE de la Baume S.à r.I., Versailles
CEPE de la Forterre S.à r.l., Versailles
100.0
100.0
100.0
APK US Investment GP LLC, Wilmington, DE
100.0
CEPE de Langres Sud S.à r.l., Versailles
100.0
APK US Investment LP, Wilmington, DE
100.0
CEPE de Mont Gimont S.à r.l., Versailles
100.0
Euler Hermes Services S.A.S., Paris la Défense
Euler Hermes Services Schweiz AG, Wallisellen
Euler Hermes Services Slovensko s.r.o., Bratislava
Euler Hermes Services South Africa Ltd., Johannes-
burg
100.0
owned¹
Allianz Mena Holding Bermuda Ltd., Beirut
owned¹
%
Allianz S.A. de C.V., Mexico City
100.0
AMOS International B.V., Amsterdam
Allianz México S.A. Compañía de Seguros,
100.0
Mexico City
Allianz S.p.A., Trieste
100.0
100.0
AMOS IT Suisse AG, Wallisellen
100.0
Allianz Saint Marc CL, Paris
Allianz Mid Cap Loans FCT, Paris
100.03
100.05
AMOS Italy S.p.c.A., Milan
100.0
Annual Report 2016 - Allianz Group
141
D - Consolidated Financial Statements
%
%
Gestion de Téléassistance et de Services S.A.,
Fénix Directo Compañía de Seguros y
Euler Hermes Crédit France S.A.S., Paris la Défense
50.02
CreditRas Assicurazioni S.p.A., Milan
100.0
AWP Health & Life S.A., Paris la Défense
100.0
Reaseguros S.A., Madrid
95.0
100.05
AWP France SAS, Saint-Ouen
Creactif Allocation, Paris
100.0
100.03
FCT Rocade L2 Marseille, Paris
CPRN Thailand Ltd., Bangkok
100.0
AWP Contact Center Italia S.r.l., Milan
99.5
São Paulo
96.95
Avip Top Harmonie, Paris
100.03
Ferme Eolienne de Villemur-sur-Tarn S.à r.l.,
FCT CIMU 92, Pantin
AWP Indian Ocean LLC, Ebene
CreditRas Vita S.p.A., Milan
100.0
100.0
Financière Callisto SAS, Paris la Défense
100.0
AWP Réunion SAS, Saint-Denis
Delta Technical Services Ltd., London
100.0
Financière Aldebaran SAS, Paris la Défense
100.0
50.1
Deeside Investments Inc., Wilmington, DE
AWP P&C S.A., Saint-Ouen
100.0
Ferme Eolienne des Jaladeaux S.à r.l., Versailles
100.0
100.0
Darta Saving Life Assurance Ltd., Dublin
AWP Mexico S.A. de C.V., Mexico City
100.0
Versailles
50.02
100.0
AWP Romania S.A., Bucharest
Corsetec Assessoria e Corretagem de Seguros Ltda.,
Avip Top Defensif, Paris
Companhia de Seguros Allianz Portugal S.A., Lisbon
100.0
Associated Indemnity Corporation, Los Angeles, CA
100.0
Euler Hermes, Mierzejewska-Kancelaria Prawna Sp.k,
Warsaw
100.0
COF II CIV LLC, Wilmington, DE
100.0
Réassurance S.A., Courbevoie
100.0
Club Marine Limited, Sydney
Assistance Courtage d'Assurance et de
100.0
Euler Hermes World Agency SASU, Paris la Défense
100.0
Climmolux Holding SA, Luxembourg
100.0
Asit Services S.R.L., Bucharest
Euler Hermes Taiwan Services Limited, Taipei
100.0
37.12,5
64.8
98.85
Eurl 20/22 Le Peletier, Paris la Défense
Assurances Médicales SA, Metz
100.05
FCP LBPAM IDR, Paris
100.0
Corn Investment Ltd., London
99.05
100.0
FAI Allianz Ltd., Sydney
100.03
Consultatio Renta Mixta F.C.I., Buenos Aires
100.05
Avip Top Croissance, Paris
Avip Actions 60, Paris
100.0
Eurosol Invest S.r.l., Udine
100.0
100.0
Euro Garantie AG, Pfäffikon
Compañía Colombiana de Servicio Automotriz S.A.,
Bogotá D.C.
100.05
Avip Actions 100, Paris
100.0
100.0
Diamond Point a.s., Prague
100.0
Fireman's Fund Financial Services LLC, Dallas, TX
Euler Hermes Canada Services Inc., Montreal, QC
Euler Hermes Collections North America Company,
100.0
AZ Vers US Private REIT GP LLC, Wilmington, DE
100.0
100.0
Fusion Brokerage Inc., Richmond, VA
AZ Servisni centar d.o.o., Zagreb
100.0
Euler Hermes Australia Pty Limited, Sydney
100.0
AZ Real Estate GP LLC, New York, NY
1.02
Fu An Management Consulting Co. Ltd., Beijing
100.0
100.0
Friederike MLP S.à r.l., Luxembourg
Euler Hermes Asset Management France S.A.,
Paris la Défense
100.0
AZ Jupiter 9 B.V., Amsterdam
100.0
100.0
100.0
Fragonard Assurance S.A., Paris
Fusion Company Inc., Richmond, VA
AZ Vers US Private REIT LP, Wilmington, DE
100.0
AZL PF Investments Inc., Minneapolis, MN
100.0
Genialloyd S.p.A., Milan
100.0
Shanghai
52.5
Generation Vie S.A., Courbevoie
Euler Hermes Consulting (Shanghai) Co. Ltd.,
55.0
100.0
100.0
GamePlan Financial Marketing LLC, Woodstock, GA
Euler Hermes Collections Sp. z o.o., Warsaw
100.0
AZGA Insurance Agency Canada Ltd., Kitchener, ON
AZGA Service Canada Inc., Kitchener, ON
100.0
100.05
Gaipare Action, Paris
Owings Mills, MD
100.0
100.0
AZ Jupiter 8 B.V., Amsterdam
100.0
Euler Hermes Acmar Services SARL, Casablanca
100.0
Los Angeles, CA
100.0
Energie Eolienne Lusanger S.à r.l., Versailles
100.0
AWP Solutions CR a SR s.r.o., Prague
Fireman's Fund Insurance Company Corp.,
100.0
EF Solutions LLC, Wilmington, DE
100.0
AWP Servicios Mexico S.A. de C.V., Mexico City
100.0
Corner, NJ
100.0
Minneapolis, MN
Fireman's Fund Indemnity Corporation, Liberty
100.0
Dresdner Kleinwort Pfandbriefe Investments II Inc.,
AWP Services Singapore Pte. Ltd., Singapore
100.0
100.0
AWP USA Inc., Richmond, VA
100.0
Eolica Erchie S.r.l., Lecce
100.0
100.0
100.03
Fondo Chiuso Allianz Infrastructure Partners I, Milan
AZ Jupiter 4 B.V., Amsterdam
55.0
Euler Hermes Acmar SA, Casablanca
100.0
100.0
Cincinnati, OH
AZ Jupiter 10 B.V., Amsterdam
100.0
100.0
Fireman's Fund Insurance Company of Ohio Corp.,
100.0
AZ Euro Investments S.à r.l., Luxembourg
100.0
EP Tactical GP LLC, Wilmington, DE
100.0
Honolulu, HI
100.0
AZ Euro Investments II S.à r.I., Luxembourg
Fireman's Fund Insurance Company of Hawaii Inc.,
Etablissements J. Moneger SA, Dakar
AllianzGI U.S. Equity Hedged Fund, Boston, MA
Allianz Côte d'Ivoire Assurances SA, Abidjan
77.0
100.0
Allianz Insurance Company of Ghana Limited, Accra
Allianz Insurance Company of Kenya Limited, Nairobi
Allianz Insurance Company-Egypt S.A.E., New Cairo
Allianz Insurance Lanka Limited, Colombo
100.0
Allianz New Zealand Limited, Auckland
100.0
Allianz Strategy Select 50, Senningerberg
59.05
100.0
Allianz of America Inc., Wilmington, DE
100.0
Allianz Strategy Select 75, Senningerberg
100.05
95.0
Allianz Offensief Mix Fonds, Rotterdam
100.05
Allianz Structured Alpha 250, Senningerberg
72.25
100.0
Allianz Insurance plc, Guildford
100.0
Allianz One Beacon GP LLC, Wilmington, DE
Allianz One Beacon LP, Wilmington, DE
100.03
100.0
Allianz Special Opportunities Alternative Fund, Milan
Allianz Specialised Investments Limited, London
Allianz New Europe Holding GmbH, Vienna
Allianz Infrastructure Norway Holdco I S.à r.l.,
Allianz Nederland Asset Management B.V.,
Rotterdam
Allianz Sociedade Gestora de Fundos de Pensões
S.A., Lisbon
100.0
88.6
Luxembourg
100.0
Allianz Infrastructure Spain Holdco I S.à r.I.,
Allianz Nederland Groep N.V., Rotterdam
100.0
Luxembourg
100.0
Allianz Nederland Levensverzekering N.V.,
Rotterdam
Allianz Société Financière S.à r.l., Luxembourg
Allianz South America Holding B.V., Amsterdam
100.0
100.0
100.0
Allianz Infrastructure Spain Holdco II S.à r.I.,
Luxembourg
100.0
100.0
100.0
Allianz Structured Return, Senningerberg
100.0
100.0
Allianz Invest 12 Division Leben/Kranken, Vienna
100.0³
Allianz Pension Fund Trustees Ltd., Guildford
100.0
Allianz Taiwan Life Insurance Co. Ltd., Taipei
99.7
Allianz Invest 50, Vienna
100.05
Allianz Pensionskasse Aktiengesellschaft, Vienna
100.0
Allianz Telematics S.p.A., Rome
100.0
Allianz Invest Alternativ, Vienna
100.05
Allianz penzijní spolecnost a.s., Prague
100.0
Allianz Tiriac Asigurari SA, Bucharest
52.2
Allianz Invest Cash, Vienna
84.95
Wallisellen
55.95
Allianz Suisse Versicherungs-Gesellschaft AG,
Allianz Pacific Aandelen Fonds, Rotterdam
Allianz Subalpina Holding S.p.A., Turin
98.1
Allianz International Ltd., Guildford
100.0
Allianz Opéra, Paris
100.03
Allianz Suisse Immobilien AG, Wallisellen
100.0
Allianz Inversiones S.A., Bogotá D.C.
100.0
Allianz Osmea 4, Paris
100.05
Allianz Suisse Lebensversicherungs-Gesellschaft AG,
Allianz Invest 10 Division S/U, Vienna
100.0³
Allianz p.l.c., Dublin
Wallisellen
100.0
100.0
Allianz Invest 11 Division Leben/Kranken, Vienna
100.03
91.45
Allianz Pimco Corporate, Vienna
Luxembourg
100.0
89.55
100.0
Allianz Multi Horizon 2024-2026, Paris
58.85
Allianz Sécurité, Paris
100.05
Allianz IARD Vintage, Paris
100.03
Allianz Immo, Paris
54.75
Allianz Individual Insurance Group LLC,
Allianz Multi Horizon 2027-2029, Paris
Allianz Multi Horizon 2030-2032, Paris
Allianz Multi Horizon 2033-2035, Paris
63.25
Allianz Seguros de Vida S.A., Bogotá D.C.
100.0
100.05
Allianz Seguros S.A., São Paulo
100.0
100.05
Allianz Seguros S.A., Bogotá D.C.
100.0
Allianz Secteur Europe Immobilier, Paris
Minneapolis, MN
48.42,5
100.0
owned¹
owned¹
Allianz Hospitaliers Valeurs Durables, Paris
100.03
Allianz Multi Croissance, Paris
100.05
Allianz SAS S.A.S., Bogotá D.C.
100.0
Allianz Hungária Biztosító Zrt., Budapest
100.0
Allianz Multi Dynamisme, Paris
94.55
Allianz Saúde S.A., São Paulo
100.0
Allianz HY Investor GP LLC, Wilmington, DE
100.0
Allianz Multi Equilibre, Paris
98.25
Allianz Secteur Euro Immobilier, Paris
95.45
Allianz HY Investor LP, Wilmington, DE
Allianz IARD S.A., Paris la Défense
Allianz Multi Horizon 2021-2023, Paris
100.0
100.0
100.05
Allianz Infrastructure Luxembourg Holdco IS.A.,
Luxembourg
Allianz Multi Rendement Premium (R), Paris
91.25
Senningerberg
100.05
100.0
Allianz Multi Rendement Réel, Paris
89.15
Allianz Sigorta A.S., Istanbul
96.2
Allianz Infrastructure Luxembourg Holdco II S.A.,
Allianz Multi Sérénité, Paris
99.85
Allianz SNA s.a.l., Beirut
100.0
Luxembourg
100.0
Allianz Infrastructure Luxembourg I S.à r.l.,
Allianz Mutual Funds Management Company S.A.,
Athens
Allianz Sociedad Anónima A.S. Agencia de Seguros,
Barcelona
Allianz Short Duration Global Real Estate Bond,
Allianz Multi Horizon 2036-2038, Paris
99.35
100.0
Allianz Selectie Fonds, Rotterdam
85.95
Allianz Informatique G.I.E., Paris la Défense
100.0
Allianz Multi Horizon 2039-2041, Paris
100.05
Allianz Sénégal Assurances SA, Dakar
83.2
Allianz Infrastructure Czech HoldCo I S.à r.I.,
Allianz Multi Horizon Court Terme, Paris
75.35
Luxembourg
Allianz Sénégal Assurances Vie SA, Dakar
96.8
100.0
Allianz Infrastructure Czech HoldCo II S.à r.I.,
Allianz Multi Horizon Long Terme, Paris
74.55
Allianz Services (UK) Limited, London
100.0
Luxembourg
Allianz Multi Opportunités, Paris
81.85
Allianz Tiriac Pensii Private Societate de administrare
Allianz Invest d.o.o., Zagreb
Allianz Real Estate of America LLC, New York, NY
100.0
Allianz ZB d.o.o. Company for the Management of
100.0
Allianz Renewable Energy Fund Management 1 Ltd.,
London
Obligatory Pension Funds, Zagreb
51.0
100.0
Allianz Life Insurance Company of Missouri,
Clayton, MO
100.0
Allianz Renewable Energy Management AT GmbH,
Pottenbrunn
Allianz ZB d.o.o. Company for the Management
of Voluntary Pension Funds, Zagreb
51.0
100.0
AllianzGI Best Styles Emerging Markets Equity Fund,
Allianz Life Insurance Company of New York,
Allianz Renewable Energy Management AT II GmbH,
Boston, MA
90.45
New York, NY
100.0
100.0
Allianz Life Insurance Company Ltd., Moscow
Allianz Life Insurance Company of Ghana Limited,
Accra
Allianz Zagreb d.d., Zagreb
Allianz Life (Bermuda) Ltd., Hamilton
Allianz Properties Limited, Guildford
100.0
100.0
Allianz Worldwide Partners Chile Limitada, Santiago
100.0
Allianz Life Assurance Company-Egypt S.A.E.,
Allianz Prudence, Paris
99.85
Allianz Worldwide Partners S.A.S., Saint-Ouen
100.0
New Cairo
100.0
Allianz Re Dublin dac, Dublin
100.0
Allianz Yasam ve Emeklilik A.S., Istanbul
80.0
Allianz Life Financial Services LLC, Minneapolis, MN
100.0
Allianz Real Estate France SAS, Paris
100.0
83.2
100.0
Pottenbrunn
AllianzGI China Equity Fund, Boston, MA
94.65
Kuala Lumpur
100.0
Allianz Life Luxembourg S.A., Luxembourg
100.0
Allianz Renewable Energy Partners of America LLC,
Wilmington, DE
AllianzGI Global Megatrends Fund, Boston, MA
97.85
100.0
Allianz Madagascar Assurances SA, Antananarivo
100.0
Allianz Renewable Energy Partners V plc., London
100.0
AllianzGI Global Small-Cap Opportunity Portfolio,
Boston, MA
100.05
Allianz Malaysia Berhad p.l.c., Kuala Lumpur
75.0
Allianz Mali Assurances SA, Bamako
Allianz Renewable Energy Partners VI Limited,
London
AllianzGI Multi-Asset Real Return Fund, Boston, MA
67.55
MA
100.0
98.8
Allianz Renewable Energy Partners IV Limited,
London
56.35
Allianz Life Insurance Company of North America,
Allianz Renewable Energy Partners | LP, London
100.0
AllianzGI Discovery US Portfolio, Boston, MA
100.05
Minneapolis, MN
100.0
Allianz Renewable Energy Partners II Limited, London
100.0
AllianzGI Emerging Markets Debt Fund, Boston, MA
41.62,5
Allianz Life Insurance Japan Ltd., Tokyo
100.0
Allianz Renewable Energy Partners III LP, London
98.8
AllianzGI Europe Equity Dividend, Boston, MA
47.12,5
Allianz Life Insurance Lanka Ltd., Colombo
100.0
Allianz Life Insurance Malaysia Berhad p.l.c.,
AllianzGI Global Fundamental Strategy Fund, Boston,
Hong Kong
100.0
Allianz Private Equity UK Holdings Limited, London
100.0
100.0
Minneapolis, MN
100.0
Allianz Popular Pensiones EGFP S.A., Madrid
100.0
Allianz Underwriters Insurance Company Corp.,
Allianz Investmentbank Aktiengesellschaft, Vienna
100.0
Allianz Popular S.L., Madrid
60.0
Burbank, CA
100.0
Allianz Investments | Luxembourg S.à r.l.,
Allianz Popular Vida Compañía de Seguros y
Allianz US Investment GP LLC, Wilmington, DE
100.0
Luxembourg
100.0
Reaseguros S.A., Madrid
100.0
Allianz UK Infrastructure Debt GP Limited, London
Allianz Ukraine LLC, Kiev
Allianz US Investment LP, Wilmington, DE
100.0
Allianz Investment Management LLC,
100.0
Allianz Pimco Mortgage, Vienna
97.35
a fondurilor de pensii private S.A., Bucharest
100.0
Allianz Invest Kapitalanlagegesellschaft mbH, Vienna
100.0
Allianz PNB Life Insurance Inc., Makati City
51.0
Allianz Togo Assurances SA, Lome
97.9
Allianz Invest Ostrent, Vienna
95.85
Allianz pojistovna a.s., Prague
100.0
Allianz UK Credit Fund, Paris
100.03
Allianz Invest Spezial 3, Vienna
100.03
Allianz Polska Services Sp. z o.o., Warsaw
100.0
Allianz Popular Asset Management SGIIC S.A., Madrid
100.0
Allianz Investments II Luxembourg S.à r.I.,
Allianz Potential, Paris
100.0
Allianz Private Equity Partners Europa II, Milan
Allianz Private Equity Partners Europa III, Milan
92.03
Allianz Vie S.A., Paris la Défense
100.0
99.63
Allianz Vorsorgekasse AG, Vienna
100.0
Allianz Langlopend Obligatie Fonds, Rotterdam
100.05
Allianz Private Equity Partners IV, Milan
100.03
Allianz Worldwide Care Services Ltd., Dublin
100.0
Allianz Leasing Bulgaria AD, Sofia
51.0
Allianz Private Equity Partners V, Milan
100.03
Allianz Worldwide Partners (Hong Kong) Ltd.,
Allianz Life & Annuity Company, Minneapolis, MN
100.0
Allianz kontakt s.r.o., Prague
100.03
Allianz Jewel Fund ICAV, Dublin
100.0
100.05
Allianz US Private REIT GP LLC, Wilmington, DE
Luxembourg
100.0
Luxembourg
100.0
Allianz Presse US REIT GP LLC, Wilmington, DE
100.0
Allianz Investments III Luxembourg S.à r.l.,
Allianz US Private REIT LP, Wilmington, DE
100.0
100.0
100.0
Allianz Presse US REIT LP, Wilmington, DE
100.0
Allianz Valeurs Durables, Paris
50.35
Allianz Irish Life Holdings p.l.c., Dublin
66.5
Allianz Private Equity Partners Europa I, Milan
86.83
Allianz Vermogen B.V., Rotterdam
Luxembourg
100.0
71.15
100.0
100.0
Parc Eolien du Bois Guillaume SAS, Paris
100.0
Quality 1 AG, Bubikon
100.0
Top Versicherungsservice GmbH, Vienna
100.0
Parc Eolien Les Treize SAS, Paris
100.0
Questar Agency Inc., Minneapolis, MN
100.0
Top Vorsorge-Management GmbH, Vienna
75.0
Personalized Brokerage Service LLC, Topeka, KS
100.0
Questar Asset Management Inc., Ann Arbor, MI
100.0
Towarzystwo Ubezpieczen Euler Hermes S.A.,
Pet Plan Ltd., Guildford
100.0
Questar Capital Corporation, Minneapolis, MN
Top Logistikwerkstatt Assistance GmbH, Vienna
100.0
94.0
100.0
97.8
Tihama Investments B.V., Amsterdam
Parc Eolien des Barbes d'Or SAS, Versailles
100.0
100.0
PT Blue Dot Services, Jakarta
100.0
Parc Eolien des Joyeuses SAS, Versailles
Top Immo A GmbH & Co. KG, Vienna
100.0
100.0
PTE Allianz Polska S.A., Warsaw
100.0
Top Immo Besitzgesellschaft B GmbH & Co. KG,
Parc Eolien des Mistandines SAS, Paris
100.0
Q 207 GP S.à r.I., Luxembourg
100.0
Vienna
100.0
Parc Eolien des Quatre Buissons SAS, Paris
Q207 S.C.S., Luxembourg
PT Asuransi Allianz Utama Indonesia Ltd., Jakarta
Warsaw
PFP Holdings Inc., Dover, DE
RCM Dynamic Multi-Asset Plus VIT, Boston, MA
56.95
PIMCO Asia Ltd., Hong Kong
100.0
VertBois S.à r.I., Luxembourg
100.0
Real Faubourg Haussmann SAS, Paris la Défense
100.0
PIMCO Asia Pte Ltd., Singapore
Vigny Depierre Conseils SAS, Archamps
100.0
100.0
Real FR Haussmann SAS, Paris la Défense
100.0
PIMCO Australia Management Limited, Sydney
Viveole SAS, Versailles
100.0
100.0
Redoma S.à r.l., Luxembourg
100.0
PIMCO Australia Pty Ltd., Sydney
100.0
100.0
100.0
PIMCO (Schweiz) GmbH, Zurich
100.0
Quintet Properties Ltd., Dublin
100.0
PGA Global Services LLC, Dover, DE
Trafalgar Insurance Public Limited Company,
Guildford
100.0
100.0
RAS Antares, Milan
100.03
PGREF V 1301 Sixth Investors I LLC, Wilmington, DE
TU Allianz Polska S.A., Warsaw
100.0
100.0
Rävaberget Nät AB, Stockholm
100.0
PGREF V 1301 Sixth Investors I LP, Wilmington, DE
TU Allianz Zycie Polska S.A., Warsaw
100.0
100.0
RB Fiduciaria S.p.A., Milan
100.0
UP 36 SA, Brussels
Volta, Paris
100.0
100.0
56.0
43.52,5
Société Foncière Européenne B.V., Amsterdam
100.0
48.2 2,5
Société Nationale Foncière S.A.L., Beirut
66.0
79.45
SOFE One Ltd., Bangkok
100.0
82.25
SOFE Two Ltd., Bangkok
100.0
69.95
Sofiholding S.A., Brussels
100.0
85.25
South City Office Broodthaers SA, Brussels
100.0
85.75
SpaceCo S.A., Paris
Société Européenne de Protection et de Services
d'Assistance à Domicile S.A., Paris
100.0
76.65
Vadalle SAS, Paris
100.0
000 Euler Hermes Credit Management, Moscow
100.0
000 Mondial Assistance, Moscow
100.0
OPCI Allianz France Angel, Paris la Défense
100.0
Orione PV S.r.I., Milan
100.0
Orsa Maggiore PV S.r.I., Milan
100.0
Orsa Minore PV S.r.I., Milan
100.0
Pacific Investment Management Company LLC,
Dover, DE
95.7
Parc Eolien de Bonneuil S.à r.l., Versailles
100.0
Parc Eolien de Bruyère Grande SAS, Versailles
100.0
PIMCO RealPath Blend 2020 Fund, Wilmington, DE
PIMCO RealPath Blend 2025 Fund, Wilmington, DE
PIMCO RealPath Blend 2030 Fund, Wilmington, DE
PIMCO RealPath Blend 2035 Fund, Wilmington, DE
PIMCO RealPath Blend 2040 Fund, Wilmington, DE
PIMCO RealPath Blend 2045 Fund, Wilmington, DE
PIMCO RealPath Blend 2050 Fund, Wilmington, DE
PIMCO RealPath Blend 2055 Fund, Wilmington, DE
PIMCO RealPath Blend Income Fund, Wilmington, DE
PIMCO REIT Management LLC, Wilmington, DE
PIMCO Select U.S. High Yield BB-B Bond Fund, Dublin
PIMCO-World Bank Gemloc Fund, Luxembourg
62.35
100.0
Co. Ltd., Tokyo
100.0
100.0
100.0
The Annuity Store Financial & Insurance Services LLC,
Sacramento, CA
100.0
Prosperaz Fundo de Investimento Renda Fixa
Parc Eolien de Longchamps SAS, Versailles
100.0
Crédito Privado, São Paulo
100.03
The MI Group Limited, Guildford
99.4
Parc Eolien de Ly-Fontaine SAS, Versailles
100.0
Protexia France S.A., Paris la Défense
100.0
Parc Eolien de Pliboux SAS, Versailles
100.0
PT Asuransi Allianz Life Indonesia p.l.c., Jakarta
Three Pillars Business Solutions Limited, Guildford
Ticket Guard Small Amount & Short Term Insurance
100.0
99.8
Parc Eolien de Remigny SAS, Versailles
Parc Eolien de la Sole du Bois SAS, Paris
Standard General Agency Inc., Dallas, TX
100.0
100.0
46.02,5
StocksPLUS Management Inc., Dover, DE
100.0
100.05
Téléservices et Sécurité "TEL2S" SARL, Chatillon
99.9
Parc Eolien de Chaourse SAS, Versailles
100.0
POD Allianz Bulgaria AD, Sofia
65.9
TFI Allianz Polska S.A., Warsaw
100.0
Parc Eolien de Croquettes SAS, Versailles
Parc Eolien de Fontfroide SAS, Versailles
Parc Eolien de Forge SAS, Paris
100.0
Primacy Underwriting Management Limited,
100.0
Wellington
100.0
The American Insurance Company Corp.,
Cincinnati, OH
100.0
Primacy Underwriting Management Pty Ltd.,
Melbourne
100.0
Rhea SA, Luxembourg
100.05
97.5
Brunei National Insurance Company Berhad Ltd.,
SCI AVIP de Camp Laurent, Courbevoie
Bandar Seri Begawan
25.0
100.0
SCI Vilaje, Courbevoie
Carlyle China Realty L.P., George Town
15.05,9
100.0
SIFCOM Assur S.A., Abidjan
60.0
Société Immobilière de l'Avenue du Roule SAS,
Courbevoie
100.0
Top Versicherungs-Vermittler Service GmbH, Vienna
100.0
Carlyle China Rome Logistics L.P., George Town
Chicago Parking Meters LLC, Wilmington, DE
CPIC Allianz Health Insurance Co. Ltd., Shanghai
Data Quest SAL, Beirut
63.3 5.9
49.9
22.9
RE-AA SA, Abidjan
36.0
30.0
99.6
business lounge GmbH, Vienna
100.0
COGAR S.à r.I., Paris
100.0
AWP Insurance Brokerage (Beijing) Co. Ltd., Beijing
Bajaj Allianz General Insurance Company Ltd., Pune
Bajaj Allianz Life Insurance Company Ltd., Pune
Bazalgette Equity Ltd., London
100.09
26.0
26.0
34.3
Gesellschaft für Vorsorgeberatung AG, Bern
100.0
ICC Evaluation SARL, Paris
Berkshire Hathaway Services India Private Limited,
New Delhi
100.0
20.0
Knightsbridge Allianz LP, Bartlesville, OK
99.55
Berkshire India Private Limited, New Delhi
20.0
Office Sénégalais de Conseils en Assurance SARL,
Dakar
Broker on-line de Productores de Seguros S.A.,
Buenos Aires
100.0
Joint ventures
28.6
50.0
NGI Group Holdings LLC, Wilmington, DE
30.0
50.0
CPPIC Euler Hermes Insurance Sales Co. Ltd.,
Shanghai
49.08
Dorcasia Ltd., Sydney
50.0
Dundrum Car Park GP Limited, Dublin
50.0
OeKB EH Beteiligungs- und Management AG, Vienna
OVS Opel VersicherungsService GmbH, Vienna
PGREF V 1301 Sixth Holding LP, Wilmington, DE
Professional Agencies Reinsurance Limited, Hamilton
Residenze CYL S.p.A., Milan
49.0
40.0
24.5
14.09
33.3
Dundrum Car Park Limited Partnership, Dublin
50.0
SAS Alta Gramont, Paris
49.0
40.0
Douglas Emmett Partnership X LP, Wilmington, DE
Dr. Ignaz Fiala GmbH, Vienna
New Path S.A., Buenos Aires
AZ/JH Co-Investment Venture (IL) LP, Wilmington, DE
Bajaj Allianz Financial Distributors Limited, Pune
Companhia de Seguro de Créditos S.A., Lisbon
33.3
A&A Centri Commerciali S.r.l., Milan
50.0
Allee-Center Kft., Budapest
50.0
AMLI-Allianz Investment LP, Wilmington, DE
Ancilyze Technologies LLC, Oakbrook Terrace, IL
AS Gasinfrastruktur Beteiligung GmbH, Vienna
Atenction Integral a la Dependencia S.L., Cordoba
AZ/JH Co-Investment Venture (DC) LP,
Wilmington, DE
75.08
E.ON Distributie România S.A., Târgu Mures
European Outlet Mall Fund FCP-FIS, Luxembourg
Four Oaks Place LP, Wilmington, DE
30.0
25.85
49.0
50.0
Helios Silesia Holding B.V., Amsterdam
60.08
50.0
80.08
Henderson UK Outlet Mall Partnership LP, Edinburgh
IPE Tank and Rail Investment 1 S.C.A., Luxembourg
Lennar Multifamily Venture LP, Wilmington, DE
Medgulf Allianz Takaful B.S.C., Seef
45.0
48.8
19.59
13.59
25.0
80.08
Assurance France Aviation S.A., Paris
100.0
Allianz Northern Ireland Limited, Belfast
Windpark Ladendorf GmbH, Vienna
100.0
Triskelion Property Holding Designated Activity
Company, Dublin
50.0
Windpark Les Cent Jalois SAS, Versailles
Windpark PL GmbH, Pottenbrunn
100.0
100.0
VGP European Logistics S.à r.I., Senningerberg
Waterford Blue Lagoon LP, Wilmington, DE
50.0
49.08
Windpark Scharndorf GmbH, Pottenbrunn
100.0
Windpark Zistersdorf GmbH, Pottenbrunn
Associates
100.0
Wm. H McGee & Co. (Bermuda) Ltd., Hamilton
Adriatic Motorways d.d., Zagreb
33.3
100.0
Wm. H McGee & Co. Inc., New York, NY
Allianz EFU Health Insurance Ltd., Karachi
100.0
100.0
Windpark GHW GmbH, Pottenbrunn
owned¹
100.0
PIMCO Canada Corp., Toronto, ON
100.0
Vordere Zollamtsstraße 13 GmbH, Vienna
100.0
PIMCO COF II LLC, Wilmington, DE
100.0
Risikomanagement und Softwareentwicklung
GmbH, Vienna
100.0
WFC Investments Sp. z o.o., Warsaw
87.5
PIMCO Covered Bond Source UCITS ETF, Dublin
40.42,5 Rivage Richelieu 1 FCP, Paris
100.03
Windpark AO GmbH, Pottenbrunn
100.0
Annual Report 2016 - Allianz Group
143
D - Consolidated Financial Statements
%
%
owned¹
49.0
YAO Investment S.à r.l., Luxembourg
Allianz Europe Small Cap Equity, Senningerberg
100.0
Archstone Multifamily Partners AC LP,
Allianz America Latina S.C. Ltda., Rio de Janeiro
100.0
Wilmington, DE
28.6
Allianz Financial Services S.A., Athens
100.0
Areim Fastigheter 2 AB, Stockholm
23.3
Allianz Global Corporate & Specialty SE Escritório
Areim Fastigheter 3 AB, Stockholm
26.2
de Representação no Brasil Ltda., Rio de Janeiro
100.0
Assurcard N.V., Haasrode
20.0
Allianz Insurance Services Ltd., Athens
100.0
Autoelektro tehnicki pregledi d.o.o., Vojnić
49.0
AGF Pension Trustees Ltd., Guildford
40.0
Wilmington, DE
Non-consolidated affiliates
21.95
100.0
Yorktown Financial Companies Inc., Minneapolis, MN
100.0
Allianz Fóndika S.A. de C.V., Mexico City
26.8
ZAD Allianz Bulgaria, Sofia
Allianz France Investissement IV, Paris
73.35,9
87.4
Ontario Limited, Toronto, ON
ZAD Allianz Bulgaria Zhivot, Sofia
Allianz Invest Vorsorgefonds, Vienna
29.15
ZAD Energia, Sofia
51.0
ZiOst Energy GmbH & Co. KG, Pottenbrunn
Allianz Saudi Fransi Cooperative Insurance Company,
Riyadh
100.0
Allianz Securicash SRI, Paris
32.5
17.05,9
Archstone Multifamily Partners AC JV LP,
99.0
Immovalor Gestion S.A., Paris la Défense
100.0
Société d'Exploitation du Parc Eolien d'Aussac
100.0
Centrale Photovoltaique de Saint Marcel
Euler Hermes Services Italia S.r.l., Rome
100.0
Königinstrasse I S.à r.I., Luxembourg
100.0
sur aude SAS, Paris
100.0
Euler Hermes Services North America LLC,
Kuolavaara-Keulakkopään Tuulipuisto Oy, Oulu
100.0
Centrale Photovoltaique de Valensole SAS, Paris
CEPE de Bajouve S.à r.I., Versailles
100.0
Owings Mills, MD
100.0
La Rurale SA, Courbevoie
99.9
100.0
Euler Hermes Services Romania S.R.L., Bucharest
100.0
LAD Energy GmbH & Co. KG, Pottenbrunn
Kiinteistö OY Eteläesplanadi 2, Helsinki
100.0
100.0
Ken Tame & Associates Pty Ltd., Sydney
100.0
Euler Hermes Services Bulgaria EOOD, Sofia
100.0
Kaishi Information Technology (Shanghai) Co. Ltd.,
CAP Rechtsschutz-Versicherungsgesellschaft AG,
Euler Hermes Services Ceská republika s.r.o., Prague
100.0
Shanghai
100.0
Wallisellen
100.0
Euler Hermes Services G.C.C. Limited, Dubai
100.0
Kaishi Pte. Ltd., Singapore
67.8
Caroline Berlin S.C.S., Luxembourg
93.2
Central Shopping Center a.s., Bratislava
100.0
Euler Hermes Services India Private Limited, Mumbai
Euler Hermes Services Ireland Limited, Dublin
100.0
100.0
Calypso S.A., Paris la Défense
142
D - Consolidated Financial Statements
100.0
100.0
LLC "Progress-Med", Moscow
100.0
SA Carène Assurance, Paris
PIMCO GIS Global Libor Plus Bond Fund, Dublin
80.25
100.0
LLC "Risk Audit", Moscow
100.0
PIMCO Global Advisors (Ireland) Ltd., Dublin
Saarenkylä Tuulipuisto Oy, Oulu
100.0
100.0
Lloyd Adriatico Holding S.p.A., Trieste
99.9
PIMCO Global Advisors (Luxembourg) S.A.,
Saint-Barth Assurances S.à r.l., St. Barts
100.0
Maevaara Vind 2 AB, Stockholm
100.0
Rogge Global Partners Ltd., London
Annual Report 2016 - Allianz Group
PIMCO Europe Ltd., London
LLC "Medexpress-service", Saint Petersburg
%
%
owned¹
owned¹
%
owned¹
LCF IDR, Paris
100.05
PIMCO Emerging Markets Bond Fund III,
Rogge Alternative Investment Company Ltd., London
100.0
Les Vignobles de Larose S.A.S., Saint Laurent Médoc
LLC "IC Euler Hermes Ru", Moscow
100.0
George Town
41.62,5
Rogge Global Partners Asia Pte. Ltd., Singapore
100.0
100.0
PIMCO Euro Low Duration Investment Grade
Corporate Fund, Dublin
100.03
Rogge Global Partners Inc., Wilmington, DE
100.0
100.0
Luxembourg
100.0
100.0
100.0
100.0
Intermediass S.r.l., Milan
100.0
BPS Mesagne 216 S.r.l., Lecce
100.0
Euler Hermes Patrimonia SA, Brussels
100.0
International Film Guarantors Limited, London
100.0
BPS Mesagne 223 S.r.I., Lecce
100.0
Euler Hermes Ré SA, Luxembourg
100.0
International Film Guarantors LLC, Santa Monica, CA
100.0
BPS Mesagne 224 S.r.l., Lecce
100.0
Euler Hermes Real Estate SPPICAV, Paris la Défense
60.0
Interstate Fire & Casualty Company, Chicago, IL
Insurance CJSC "Medexpress", Saint Petersburg
100.0
Euler Hermes North America Insurance Company Inc.,
Owings Mills, MD
BPS Mesagne 215 S.r.l., Lecce
BPS Brindisi 211 S.r.l., Lecce
100.0
Euler Hermes Magyar Követeleskezelő Kft., Budapest
100.0
ImWind GHW GmbH & Co. KG, Pottenbrunn
100.0
BPS Brindisi 213 S.r.l., Lecce
100.0
Euler Hermes New Zealand Limited, Auckland
100.0
Inforce Solutions LLC, Woodstock, GA
100.0
BPS Brindisi 222 S.r.l., Lecce
100.0
Euler Hermes North America Holding Inc.,
InnovAllianz, Paris
BPS Mesagne 214 S.r.l., Lecce
Owings Mills, MD
99.63
100.0
100.0
100.0
Kaishi Beijing Limited, Beijing
Brasil de Imóveis e Participações Ltda., São Paulo
Bravo II CIV LLC, Wilmington, DE
BSMC (Thailand) Limited, Bangkok
100.0
Euler Hermes Seguros de Crédito S.A., São Paulo
100.0
Joukhaisselän Tuulipuisto Oy, Oulu
100.0
Bulgaria Net AD, Sofia
98.4
Euler Hermes Service AB, Stockholm
100.0
Jouttikallio Wind Oy, Kotka
100.0
Bureau d'Expertises Despretz S.A., Brussels
100.0
Euler Hermes Services B.V., 's-Hertogenbosch
100.0
JSC Insurance Company Allianz, Moscow
100.0
Calobra Investments Sp. z o.o., Warsaw
100.0
Euler Hermes Services Belgium S.A., Brussels
100.0
100.0
Jefferson Insurance Company Corp., New York, NY
Euler Hermes S.A., Brussels
100.0
Euler Hermes Recouvrement France S.A.S.,
Paris la Défense
Investitori Real Estate Fund, Milan
100.03
100.0
Investitori SGR S.p.A., Milan
100.0
Bright Mission Berhad Ltd., Kuala Lumpur
100.0
Euler Hermes Reinsurance AG, Wallisellen
100.0
Järvsö Sörby Vindkraft AB, Danderyd
100.0
British Reserve Insurance Co. Ltd., Guildford
100.0
Euler Hermes Risk Yönetimi A.S., Istanbul
100.0
JCR Intertrade Ltd., Bangkok
40.02
Brobacken Nät AB, Stockholm
100.0
100.0
100.0
San Francisco Reinsurance Company, Los Angeles, CA
100.0
100.0
PIMCO Investments LLC, Dover, DE
100.0
SCI Stratus, Courbevoie
Mondial Service Colombia SAS, Bogotá D.C.
100.0
PIMCO Japan Ltd., Road Town
100.0
100.0
SCI Via Pierre 1, Paris la Défense
Mondial Serviços Ltda., São Bernardo do Campo
100.0
PIMCO Latin America Administradora de
100.0
Morgan Stanley Italian Office Fund, Milan
100.03
Carteiras Ltda., Rio de Janeiro
100.0
SCI Volnay, Paris la Défense
100.0
National Surety Corporation, Chicago, IL
Mondial Service Argentina S.A., Buenos Aires
100.0
75.0
100.0
SCI Allianz Chateaudun, Paris la Défense
100.0
100.0
Croydon Surrey
100.0
PIMCO GP XVII LLC, Wilmington, DE
SCI Allianz Invest Pierre, Paris la Défense
100.0
Mondial Protection Corretora de Seguros Ltda.,
100.0
São Bernardo do Campo
100.0
PIMCO GP XVIII LLC, Wilmington, DE
SCI Allianz Messine, Paris la Défense
100.0
100.0
Mondial Service - Belgium S.A., Brussels
100.0
PIMCO GP XX LLC, Wilmington, DE
SCI AVIP SCPI Selection, Courbevoie
100.0
SCI ESQ, Paris la Défense
PIMCO GP XVI LLC, Wilmington, DE
PIMCO RAE Fundamental Emerging Markets Fund,
Dublin
100.0
100.05
Società Agricola San Felice S.p.A., Milan
100.0
Nextcare Tunisia S.à r.I., Tunis
100.0
PIMCO RAE Fundamental US Fund, Dublin
54.45
Société de Production D'électricité D'harcourt
NFJ Investment Group LLC, Dover, DE
100.0
PIMCO Real Return Limited Duration Fund,
Boston, MA
Moulaine SAS, Versailles
100.0
80.05
Société d'Energie Eolien Cambon SAS, Versailles
100.0
Northstar Mezzanine Partners VI U.S. Feeder II L.P.,
Dover, DE
100.03
PIMCO RealPath 2055 Fund, Boston, MA
owned¹
100.0
SDIII Energy GmbH & Co. KG, Pottenbrunn
SLC "Allianz Life Ukraine", Kiev
100.0
75.45
Silex Gas Management AS, Oslo
100.0
Neoasistencia Manoteras S.L., Madrid
100.0
Nextcare Bahrain Ancillary Services Company B.S.C.,
Manama
100.0
PIMCO RAE Fundamental Europe Fund, Dublin
PIMCO RAE Fundamental Global Developed Fund,
Dublin
71.25
Silex Gas Norway AS, Oslo
100.0
Sion Hall Services Ltd., London
35.52,5
100.0
NEXTCARE Egypt LLC, New Cairo
100.0
Sirius S.A., Luxembourg
94.8
NEXTCARE Holding WLL, Manama
75.0
NEXTCARE Lebanon SAL, Beirut
PIMCO RAE Fundamental Global Equities Plus
Fundo de Investimento Multimercado Investimento
no Exterior, Rio de Janeiro
Mondial Assistance United Kingdom Ltd.,
100.0
100.0
100.0
PIMCO GP II S.à r.I., Luxembourg
100.0
SAS Allianz Platine, Paris la Défense
100.0
Mondial Assistance Australia Holding Pty Ltd.,
PIMCO GP III LLC, Wilmington, DE
100.0
SAS Allianz Rivoli, Paris la Défense
100.0
Toowong
100.0
PIMCO GP IX LLC, Wilmington, DE
100.0
SAS Allianz Serbie, Paris la Défense
100.0
Mondial Assistance France Services à la personne
SAS, Saint-Ouen
100.0
PIMCO GP S.à r.I., Luxembourg
100.0
Mombyasen Wind Farm AB, Halmstad
SAS Angel Shopping Centre, Paris la Défense
100.0
100.0
Maevaara Vind AB, Stockholm
100.0
PIMCO Global Advisors (Resources) LLC, Dover, DE
100.0
SAS 20 pompidou, Paris la Défense
100.0
Magdeburger Sigorta A.S., Istanbul
100.0
PIMCO Global Advisors LLC, Dover, DE
100.0
SAS Allianz Etoile, Paris la Défense
100.0
Marofinac S.à r.I., Casablanca
100.0
PIMCO Global Holdings LLC, Dover, DE
100.0
SAS Allianz Forum Seine, Paris la Défense
100.0
Medi24 AG, Bern
100.0
PIMCO GP I LLC, Wilmington, DE
SAS Allianz Logistique, Paris la Défense
90.0
Mondial Assistance GmbH, Vienna
PIMCO GP V LLC, Wilmington, DE
Mondial Assistance Services (Malaysia) Sdn. Bhd.,
PIMCO GP XIII LLC, Wilmington, DE
Saudi NEXTCARE LLC, Al Khobar
52.0
100.0
Kuala Lumpur
100.0
PIMCO GP XIV LLC, Wilmington, DE
SC Tour Michelet, Paris la Défense
100.0
100.0
Mondial Assistance Services Hellas A.E., Athens
51.0
PIMCO GP XIX LLC, Wilmington, DE
SCI 46 Desmoulins, Paris la Défense
100.0
100.0
Mondial Assistance Sp. z o.o., Warsaw
100.0
PIMCO GP XV LLC, Wilmington, DE
SCI Allianz ARC de Seine, Paris la Défense
100.0
100.0
Sättravallen Wind Power AB, Strömstad
PIMCO GP XII LLC, Wilmington, DE
100.0
SAS Madeleine Opéra, Paris la Défense
100.0
100.0
Mondial Assistance Ireland Ltd., Dublin
PIMCO GP VII LLC, Wilmington, DE
100.0
100.0
SAS Passage des princes, Paris la Défense
100.0
OJSC "My Clinic", Moscow
Mondial Assistance Portugal Serviços de
100.0
SAS Société d'Exploitation du Parc Eolien
Assistência Lda., Lisbon
100.0
PIMCO GP XI LLC, Wilmington, DE
de Nélausa, Paris
100.0
100.0
Mondial Assistance Service España S.A., Madrid
100.0
PIMCO GP X LLC, Wilmington, DE
%
Dundrum Retail GP Designated Activity Company,
%
100.0³
Allianz DLVR Fonds, Frankfurt am Main
100.04
PIMCO Deutschland GmbH, Munich
100.0
APK Infrastrukturfonds GmbH, Munich
100.0
Allianz Deutschland AG, Munich
90.2
Oldenburgische Landesbank Aktiengesellschaft,
Oldenburg
100.0
AllSecur Deutschland AG, Munich
100.0
APK-Argos 75 Vermögensverwaltungsgesellschaft
mbH, Munich
Allianz Climate Solutions GmbH, Munich
100.0
My Finance Coach Stiftung GmbH, Munich
AllianzGI-Fonds APF Renten, Frankfurt am Main
100.0
Allianz Capital Partners Verwaltungs GmbH, Munich
100.0
100.0
Aktiengesellschaft, Munich
Allianz X GmbH, Munich
100.04
Allianz Capital Partners GmbH, Munich
Münchener und Magdeburger Agrarversicherung
100.0
36.82,5
Allianz Warranty GmbH, Unterföhring
REC Frankfurt Objekt GmbH & Co. KG, Hamburg
Allianz EEE Fonds, Frankfurt am Main
100.0
Allianz Global Corporate & Specialty SE, Munich
100.0
75.6
Roland Holding GmbH, Munich
APKV-Argos 74 Vermögensverwaltungsgesellschaft
mbH, Munich
100.0
Allianz Finanzbeteiligungs GmbH, Munich
100.0
risklab GmbH, Munich
100.03
100.0
APKV Private Equity Fonds GmbH, Munich
80.0
Allianz FAD Fonds, Frankfurt am Main
51.0
RehaCare GmbH, Munich
100.0
Allianz Esa EuroShip GmbH, Bad Friedrichshall
APKV Infrastrukturfonds GmbH, Munich
60.0
REC Frankfurt zweite Objektverwaltungsgesellschaft
mbH, Hamburg
100.0
100.0
APKV Direkt Infrastruktur GmbH, Munich
Allianz Esa cargo & logistics GmbH, Bad Friedrichshall
100.03
100.0
100.0
100.0
Allianz Beratungs- und Vertriebs-AG, Munich
100.0
Allianz AKR Fonds, Frankfurt am Main
95.15
Allianz VGI 1 Fonds, Frankfurt am Main
Main
100.03
Allianz ABS Fonds, Frankfurt am Main
KomfortDynamik Sondervermögen, Frankfurt am
100.0
Allianz Versicherungs-Aktiengesellschaft, Munich
100.0
100.0
Kaiser X Labs GmbH, Munich
Allianz Venture Partners Beteiligungs GmbH, Munich
100.03
100.03
94.8
100.0
100.03
InnoSolutas GmbH, Bad Friedrichshall
Allianz VAE Fonds, Frankfurt am Main
Alida Grundstücksgesellschaft mbH & Co. KG,
Hamburg
100.0
95.0
Euler Hermes Rating Deutschland GmbH, Hamburg
GA Global Automotive Versicherungsservice GmbH,
Halle (Saale)
100.03
Allianz UGD 1 Fonds, Frankfurt am Main
100.0
100.0
Allianz AADB Fonds, Frankfurt am Main
100.03
Allianz VGL Fonds, Frankfurt am Main
Allianz ALD Fonds, Frankfurt am Main
Mondial Kundenservice GmbH, Nuremberg
100.03
Allianz VW AV Fonds, Frankfurt am Main
100.0
100.0
MileBox UG (haftungsbeschränkt), Munich
100.03
Allianz VSR Fonds, Frankfurt am Main
Allianz AZL Vermögensverwaltung GmbH & Co. KG,
Munich
100.0
100.0
META Finanz-Informationssysteme GmbH, Munich
100.03
Allianz Asset Management AG, Munich
Allianz V-PD Fonds, Frankfurt am Main
100.03
100.0
Lola Vermögensverwaltungsgesellschaft mbH & Co.
KG, Munich
100.03
Allianz APAV Fonds, Frankfurt am Main
Allianz VKRD Fonds, Frankfurt am Main
100.03
100.03
Allianz ALIK Fonds, Frankfurt am Main
Allianz VKA Fonds, Frankfurt am Main
100.0
KVM ServicePlus - Kunden- und Vertriebsmanage-
ment GmbH, Halle (Saale)
100.03
100.03
Seine GmbH, Munich
Allianz Treuhand GmbH, Stuttgart
Allianz Global Investors GmbH, Frankfurt am Main
ARE Brep Acht Vermögensbeteiligungsgesellschaft
mbH & Co. KG, Munich
Windpark Kittlitz GmbH & Co. KG, Sehestedt
100.0
mbH & Co. KG, Munich
100.0
Windpark Kirf GmbH & Co. KG, Sehestedt
AZ-Argos 61 Vermögensverwaltungsgesellschaft
100.03
Allianz L-PD Fonds, Frankfurt am Main
100.0
100.0
Windpark Kesfeld-Heckhuscheid GmbH & Co. KG,
Sehestedt
AZ-Argos 58 Vermögensverwaltungsgesellschaft
mbH & Co. KG, Munich
100.03
100.0
Allianz LFE Fonds, Frankfurt am Main
100.0
100.0
Sehestedt
Windpark Freyenstein-Halenbeck GmbH & Co. KG,
AZ-Argos 57 Vermögensverwaltungsgesellschaft
mbH & Co. KG, Munich
Allianz Lebensversicherungs-Aktiengesellschaft,
Stuttgart
100.0
100.0
100.0
100.0
Windpark Eckolstädt GmbH & Co. KG, Sehestedt
Windpark Emmendorf GmbH & Co. KG, Sehestedt
AZ-Argos 51 Vermögensverwaltungsgesellschaft
mbH & Co. KG, Munich
Allianz Leben Private Equity Fonds Plus GmbH,
Munich
100.0
100.0
Allianz Managed Operations & Services SE, Munich
Allianz of Asia-Pacific and Africa GmbH, Munich
100.0
Windpark Waltersdorf GmbH & Co. KG Renditefonds,
Sehestedt
100.0
AZ-Argos 71 Vermögensverwaltungsgesellschaft
Allianz Pensionskasse Aktiengesellschaft, Stuttgart
100.0
100.0
100.0
Windpark Schönwalde GmbH & Co. KG, Sehestedt
AZ-Argos 70 Vermögensverwaltungsgesellschaft
mbH & Co. KG, Munich
Allianz Pensionsfonds Aktiengesellschaft, Stuttgart
100.0
Allianz Pension Service GmbH, Munich
100.0
100.0
100.0
AZ-Argos 69 Vermögensverwaltungsgesellschaft
mbH, Munich
100.0
Allianz Pension Partners GmbH, Munich
100.0
Allianz Pension Direkt Infrastruktur GmbH, Munich
100.0
Windpark Quitzow GmbH & Co. KG, Sehestedt
100.0
100.0
Windpark Pröttlin GmbH & Co. KG, Sehestedt
AZ-Argos 64 Vermögensverwaltungsgesellschaft
mbH & Co. KG, Munich
100.0
Windpark Redekin-Genthin GmbH & Co. KG,
Sehestedt
100.0
100.0
Windpark Dahme GmbH & Co. KG, Sehestedt
100.0
AWP Service Deutschland GmbH, Aschheim
100.0
VLS Versicherungslogistik GmbH, Berlin
100.0
100.03
Allianz GRGB Fonds, Frankfurt am Main
Allianz Handwerker Services GmbH, Aschheim
Allianz Investment Management SE, Munich
Allianz LAD Fonds, Frankfurt am Main
Allianz Leben Direkt Infrastruktur GmbH, Munich
Allianz Leben Infrastrukturfonds GmbH, Munich
Allianz Leben Private Equity Fonds 1998 GmbH,
Munich
Auros II GmbH, Munich
100.0
UfS Beteiligungs-GmbH, Munich
100.0
100.03
Allianz GLU Fonds, Frankfurt am Main
100.0
Auros GmbH, Munich
Spherion Objekt GmbH & Co. KG, Stuttgart
100.0
100.03
Allianz GLRS Fonds, Frankfurt am Main
94.9
Spherion Beteiligungs GmbH & Co. KG, Stuttgart
Atropos Vermögensverwaltungsgesellschaft mbH,
Munich
100.03
Allianz GLR Fonds, Frankfurt am Main
94.9
Signa 12 Verwaltungs GmbH, Düsseldorf
100.0
100.0
100.0
Volkswagen Autoversicherung AG, Braunschweig
100.0
100.04
AZ-Argos 50 Vermögensverwaltungsgesellschaft
mbH & Co. KG, Munich
Allianz Leben Private Equity Fonds 2008 GmbH,
Munich
100.0
100.0
Windpark Cottbuser See GmbH & Co. KG, Sehestedt
100.0
100.0
Windpark Calau GmbH & Co. KG, Sehestedt
AZ-Argos 44 Vermögensverwaltungsgesellschaft
mbH & Co. KG, Munich
Allianz Leben Private Equity Fonds 2001 GmbH,
Munich
100.0
100.0
100.0
Windpark Büttel GmbH & Co. KG, Sehestedt
AZ-Argos 41 Vermögensverwaltungsgesellschaft
mbH, Munich
100.0
100.0
Windpark Berge-Kleeste GmbH & Co. KG, Sehestedt
100.0
100.0
Windpark Aller-Leine-Tal GmbH & Co. KG, Sehestedt
AZ-Argos 14 Vermögensverwaltungsgesellschaft
mbH, Munich
100.0
100.03
49.02
Braunschweig
100.0
Volkswagen Autoversicherung Holding GmbH,
AZ-Arges Vermögensverwaltungsgesellschaft mbH,
Munich
100.0
AGCS-Argos 76 Vermögensverwaltungsgesellschaft
mbH, Munich
99.5
Allianz Taunusanlage GbR, Stuttgart
8- Classified as joint venture according to IFRS 11.
Tokio Marine Rogge Asset Management Ltd., London
Top Torony Ingatlanhasznosító Zrt., Budapest
9- Classified as associate according to IAS 28.
50.0
50.0
144
Annual Report 2016 - Allianz Group
RESPONSIBILITY STATEMENT
To the best of our knowledge, and in accordance with the applicable
reporting principles, the consolidated financial statements give a
true and fair view of the assets, liabilities, financial position and
profit or loss of the group, and the group management report includes
a fair review of the development and performance of the business and
the position of the group, together with a description of the material
opportunities and risks associated with the expected development of
the group.
Munich, 14 February 2017
Allianz SE
The Board of Management
49.98
Chimes Béla Sergio Ballinst
n. piny
Moscher fath
for
had Theis Duits alumn
зли
D - Consolidated Financial Statements
Annual Report 2016 - Allianz Group
145
D - Consolidated Financial Statements
AUDITOR'S REPORT
We have audited the consolidated financial statements prepared by
Allianz SE, Munich, comprising the consolidated balance sheets, the
consolidated income statements, the consolidated statements of
comprehensive income, the consolidated statements of changes in
equity, the consolidated statements of cash flows and the notes,
together with the group management report for the business year
from 1 January to 31 December 2016. The preparation of the consoli-
dated financial statements and the group management report in
accordance with IFRSS, as adopted by the EU, and the additional
requirements of German commercial law pursuant to § 315a para. 1
HGB [Handelsgesetzbuch “German Commercial Code"] and supple-
mentary provisions of the articles of incorporation are the responsi-
bility of the parent company's management. Our responsibility is to
express an opinion on the consolidated financial statements and on
the group management report based on our audit.
We conducted our audit of the consolidated financial state-
ments in accordance with § 317 HGB and German generally accepted
standards for the audit of financial statements promulgated by the
Institut der Wirtschaftsprüfer [Institute of Public Auditors in Ger-
many] (IDW). Those standards require that we plan and perform the
audit such that misstatements materially affecting the presentation
of the net assets, financial position and results of operations in the
consolidated financial statements in accordance with the applicable
financial reporting framework and in the group management report
are detected with reasonable assurance. Knowledge of the business
activities and the economic and legal environment of the Group and
expectations as to possible misstatements are taken into account in
the determination of audit procedures. The effectiveness of the
accounting-related internal control system and the evidence sup-
porting the disclosures in the consolidated financial statements and
the group management report are examined primarily on a test basis
within the framework of the audit. The audit includes assessing the
annual financial statements of those entities included in consolida-
tion, the determination of entities to be included in consolidation,
the accounting and consolidation principles used and significant
estimates made by management, as well as evaluating the overall
presentation of the consolidated financial statements and group
management report. We believe that our audit provides a reasonable
basis for our opinion.
Our audit has not led to any reservations.
the
In our opinion, based on the findings of our audit, the consoli-
dated financial statements comply with IFRSS, as adopted by the EU,
the additional requirements of German commercial law pursuant to
§ 315a para. 1 HGB and supplementary provisions of the articles of
incorporation and give a true and fair view of the net assets, financial
position and results of operations of the Group in accordance with
these requirements. The group management report is consistent
with the consolidated financial statements, complies with the Ger-
man statutory requirements, and as a whole provides a suitable view
of the Group's position and suitably presents the opportunities and
risks of future development.
The State-Whitehall Company LP, Dover, DE
7-Insolvent.
50.0
11.7
NRF (Finland) AB, Västeras
50.0
Podium Fund HY REIT Owner LP, Wilmington, DE
44.38
Porterbrook Holdings I Limited, London
30.08
1- Percentage includes equity participations held by dependent enti-
ties in full, even if the Allianz Group's share in the dependent
entity is below 100%.
Previndustria - Fiduciaria Previdenza Imprenditori
S.p.A., Milan
50.0
Queenspoint S.L., Madrid
50.0
50.0
RMPA Holdings Limited, Colchester
SC Holding SAS, Paris
2-Controlled by the Allianz Group.
3-Investment fund.
4-Releasing impact according to § 264 (3) HGB through the Allianz
Group's consolidated financial statements.
50.0
5-Mutual, private equity or special fund.
SES Shopping Center AT1 GmbH, Salzburg
50.0
SES Shopping Center FP 1 GmbH, Salzburg
50.0
6-Group share through indirect holder Roland Holding GmbH,
Munich: 75.6%.
Solunion Compañía Internacional de Seguros y
Reaseguros SA, Madrid
56.08
Munich, 1 March 2017
KPMG AG
Wirtschaftsprüfungsgesellschaft
Allianz ⑪
The HR Fact Book is the official and most comprehensive report on
key human resources facts and figures, highlighting major HR
achievements over the past year and revealing the outlook for 2017.
Date of publication: 27 March 2017.
www.allianz.com/hrfactbook
GUIDELINE ON ALTERNATIVE PERFORMANCE MEASURES
Further information on the definition of our Alternative Performance
Measures and their components, as well as the basis of calculation
adopted.
www.allianz.com/results
Financial calendar
Important dates for shareholders and analysts¹
Annual General Meeting
Financial Results 1Q.
Financial Results 20/Interim Report 6M
Financial Results 3Q
Financial Results 2017
Annual Report 2017
Annual General Meeting
3 May 2017
Fact Book
2016
12 May 2017
10 November 2017
16 February 2018
9 March 2018
9 May 2018
1 - The German Securities Trading Act ("Wertpapierhandelsgesetz") obliges issuers to announce immediately any information which may have a substantial price impact. Therefore we cannot exclude that we have to
announce key figures related to quarterly and fiscal year results ahead of the dates mentioned above. As we can never rule out changes of dates, we recommend checking them on the internet at www.allianz.com/
financialcalendar.
MIX
Allianz SE - Königinstrasse 28 - 80802 Munich - Germany - Phone +49 89 38000- info@allianz.com - www.allianz.com
Annual Report on the internet: www.allianz.com/annualreport - Front page design: hw.design GmbH - Date of publication: 10 March 2017
This is a translation of the German Annual Report of Allianz Group. In case of any divergences, the German original is legally binding.
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ALLIANZ SUSTAINABILITY REPORT 2016
EMBRACING
THE FUTURE
ENCOURAGING SOLUTIONS
FOR TOMORROW'S CLIMATE
AND A MORE INCLUSIVE
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SUSTANABUTY REPORT 2016
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It provides full details of our sustainability strategy, approach and
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Date of publication: 5 April 2017.
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ORIENTATION GUIDE
>
Zagrebacka banka d.d., Zagreb
NET4GAS Holdings s.r.o., Prague
16.8
Bangkok
ACP Vermögensverwaltung GmbH & Co. KG Nr. 4c,
Munich
100.0³
dbi-Fonds DAV, Frankfurt am Main
100.0
Co. KG, Sehestedt
100.0
100.03
dbi-Fonds Ammerland, Frankfurt am Main
Allianz Renewable Energy Subholding GmbH &
ACP Vermögensverwaltung GmbH & Co. KG Nr. 4a,
Munich
94.8
BrahmsQ Objekt GmbH & Co. KG, Stuttgart
100.0
Allianz RFG Fonds, Frankfurt am Main
Sehestedt
100.0
gesellschaft mbH, Munich
Allianz Renewable Energy Management GmbH,
ACP Vermögensverwaltung GmbH & Co. KG Nr. 4,
Munich
AZV-Argos 72 Vermögensverwaltungs-
100.0
Allianz Rechtsschutz-Service GmbH, Munich
0.02
100.0
100.0
100.0
AZ-SGD Private Equity Fonds 2 GmbH, Munich
AZ-SGD Private Equity Fonds GmbH, Munich
AZT Automotive GmbH, Ismaning
100.0
100.0
100.0³
dbi-Fonds WE, Frankfurt am Main
100.03
100.0
100.0
Euler Hermes Collections GmbH, Potsdam
100.0
Allianz Stromversorgungs-GmbH, Munich
AGCS Vermögensverwaltungsgesellschaft mbH
& Co. KG, Munich
100.0
Euler Hermes Aktiengesellschaft, Hamburg
100.0
100.03
Allianz SOA Fonds, Frankfurt am Main
100.0
79.6
Donator Beteiligungsverwaltung GmbH, Munich
100.0
100.0
Donator Beratungs GmbH, Munich
100.03
100.0
Berlin
100.03
Deutsche Lebensversicherungs-Aktiengesellschaft,
100.0
Allianz Risk Consulting GmbH, Munich
Allianz SDR Fonds, Frankfurt am Main
Allianz SE-PD Fonds, Frankfurt am Main
Allianz Service Center GmbH, Munich
99.3
ACP Vermögensverwaltung GmbH Nr. 4 d. 1, Munich
ADEUS Aktienregister-Service-GmbH, Munich
AGCS Infrastrukturfonds GmbH, Munich
100.0
ACP Vermögensverwaltung GmbH & Co. KG Nr. 4d,
Munich
100.0
Allianz Real Estate GmbH, Munich
mbH & Co.KG, Munich
0.02
Allianz Real Estate Germany GmbH, Stuttgart
Guotai Jun'an Allianz Fund Management Co. Ltd.,
Shanghai
Solveig Gas Holdco AS, Oslo
30.0
49.08
Tellsid Holdings Limited, Saint Helier
16.79
International Shopping Centre Investment S.A.,
Luxembourg
Wildlife Works Carbon LLC, San Francisco, CA
10.09
Israel Credit Insurance Company Ltd., Tel Aviv
50.0
Other participations between 5 and 20%
Italian Shopping Centre Investment S.r.I., Milan
49.0
50.0
LBA IV-PPI Venture LLC, Dover, DE
45.08
Al Nisr Al Arabi, Amman
18.0
LBA IV-PPII-Office Venture LLC, Dover, DE
45.08
Banco BPI S.A., Porto
8.5
LBA IV-PPII-Retail Venture LLC, Dover, DE
45.08
Sri Ayudhya Capital Public Company Limited,
Market Street Trust, Sydney
50.05
of voting rights
SNC Société d'aménagement de la Gare de l'Est, Paris
50.18
Fiumaranuova S.r.I., Genoa
100.03
Allianz Re Asia, Frankfurt am Main
ACP GmbH & Co. Beteiligungen KG II, Munich
ACP GmbH & Co. Beteiligungen KG, Munich
Consolidated affiliates
GERMANY
owned¹
owned¹
%
%
owned¹
%
D - Consolidated Financial Statements
45 — List of participations of the Allianz Group as of 31 December 2016
according to § 313 (2) HGB
SCI Bercy Village, Paris
49.0
50.0
Dundrum Retail Limited Partnership, Dublin
SK Versicherung AG, Vienna
50.0
25.8
Euromarkt Center d.o.o., Ljubljana
SNC Alta CRP Gennevilliers, Paris
50.0
49.0
Europe Logistics Venture 1 FCP-FIS, Luxembourg
83.35,8
SNC Alta CRP La Valette, Paris
49.0
100.0
100.0
50.0
100.0³
94.25
Allianz Combinatie Fonds, Rotterdam
100.0
Allianz Global Corporate & Specialty South Africa
100.0
Allianz Colombia S.A., Bogotá D.C.
AGA Assistance Australia Pty Ltd., Toowong
AGA Assistance Beijing Services Co. Ltd., Beijing
AGA Assistance Japan Co. Ltd., Tokyo
100.0
100.0
Ltd., Hamilton
51.0
Allianz China Life Insurance Co. Ltd., Shanghai
AGA Assistance (India) Private Limited, Gurgaon
Ltd., Johannesburg
Allianz Global Corporate & Specialty of Bermuda
AGA Alarmcentrale NL B.V., Amsterdam
100.0
Guangzhou
100.0
(Proprietary) Ltd., Johannesburg
Allianz China General Insurance Company Ltd.,
100.0
Aero-Fonte S.r.l., Catania
Allianz Global Corporate & Specialty of Africa
100.0
Allianz Chicago Private Reit LP, Wilmington, DE
100.03
Privado, São Paulo
100.0
100.0
100.0
80.1
AGA Services (Thailand) Co. Ltd., Bangkok
100.0
Shanghai
Allianz Global Investors (Shanghai) Limited,
74.1
100.0
AGA Services (India) Private Limited, Gurgaon
52.05
Senningerberg
100.0
Trivandrum
100.0
AGA Service Italia S.c.a.r.l., Milan
100.0
Allianz Global Emerging Markets Equity Dividend,
100.0
AGA Service Company Corp., Richmond, VA
100.05
Senningerberg
100.0
Allianz Congo Assurances SA, Brazzaville
100.0
AGA Insurance Broker (Thailand) Co. Ltd., Bangkok
Allianz Global Dynamic Multi Asset Income,
99.9
100.05
Allianz Global Credit, Senningerberg
Allianz Compañía de Seguros y Reaseguros S.A.,
Barcelona
Allianz Cornhill Information Services Private Ltd.,
Participações Ltda., Rio de Janeiro
Advanz Fundo de Investimento Renda Fixa Crédito
88.3
114 Venture LP, Wilmington, DE
100.05
Allianz Garantiefonds 5%, Rotterdam
100.0
Consolidated affiliates
Allianz business services s.r.o., Bratislava
100.05
FOREIGN ENTITIES
Allianz Garantiefonds 3,35%, Rotterdam
100.0
Allianz Business Services Limited, Lancaster
99.55
Allianz Garantie Fonds 4,75%, Rotterdam
99.0
71.8
100.05
14.3
Allianz Garantie Fonds 3%, Rotterdam
60.3
Allianz Burkina Assurances SA, Ouagadougou
Sana Kliniken AG, Ismaning
100.0
Allianz Fund Investments S.A., Luxembourg
10.0
Protektor Lebensversicherungs-AG, Berlin
66.2
Allianz Bulgaria Holding AD, Sofia
100.0
Allianz Burkina Assurances Vie SA, Ouagadougou
Allianz C.P. General Insurance Co. Ltd., Bangkok
Allianz Cameroun Assurances SA, Douala
100.0
Allianz Geldmarkt Fonds, Rotterdam
Allianz Global Corporate & Specialty do Brasil
Allianz Centrafrique Assurances SA, Bangui
100.0
100.0
490 Lower Unit LP, Wilmington, DE
100.0
Auckland
Allianz Cash SAS, Paris la Défense
100.0
Allianz Global Assistance New Zealand Limited,
100.0
490 Lower Unit GP LLC, Wilmington, DE
51.0
Allianz General Laos Ltd., Vientiane
100.0
Allianz Capital Partners of America Inc., New York, NY
Allianz Carbon Investments B.V., Amsterdam
100.0
490 Fulton REIT LP, Wilmington, DE
96.5
100.0
Berhad p.l.c., Kuala Lumpur
75.8
490 Fulton JV LP, Wilmington, DE
Allianz Cameroun Assurances Vie SA, Douala
Allianz General Insurance Company (Malaysia)
100.0
75.4
3 Mentors Inc., Suwanee, GA
85.05
97.6
Allianz Fund Investments Inc., Wilmington, DE
Allianz Côte d'Ivoire Assurances Vie SA, Abidjan
Allianz Global Investors Asia Pacific Ltd., Hong Kong
Allianz Actions Emergentes, Paris
Allianz Emerging Markets Flexible Bond,
100.0
Allianz Hellas Insurance Company S.A., Athens
67.75
Allianz Actions Aéquitas, Paris
100.0
Allianz EM Loans S.C.S., Luxembourg
89.0
Allianz Hayat ve Emeklilik A.S., Istanbul
82.15
Allianz Actio France, Paris
100.0
93.85
Vienna
100.05
Allianz Groen Rente Fonds, Rotterdam
Allianz Elementar Versicherungs-Aktiengesellschaft,
Allianz (UK) Limited, Guildford
100.0
Chicago, IL
100.0
Allianz Global Risks US Insurance Company Corp.,
Allianz Elementar Lebensversicherungs-Aktiengesell-
schaft, Vienna
100.0
AIM Underwriting Limited, Toronto, ON
100.0
AIM Singapore Pte Ltd., Singapore
100.0
100.0
Senningerberg
Allianz Hold Co Real Estate S.à r.l., Luxembourg
D - Consolidated Financial Statements
Allianz PK-PD Fonds, Frankfurt am Main
Annual Report 2016 - Allianz Group
140
100.03
Allianz Hospitaliers Euro, Paris
100.0
Allianz Equity Investments Ltd., Guildford
75.45
Allianz Actions France, Paris
100.0
Allianz Holdings plc, Guildford
100.03
90.05
Allianz Equity Emerging Markets 1, Paris
Allianz Actions Euro MidCap, Paris
100.0
Allianz Holding France SAS, Paris la Défense
100.0
Guildford
91.75
Allianz Actions Euro Convictions, Paris
100.0
Allianz Holding eins GmbH, Vienna
Allianz Engineering Inspection Services Limited,
81.95
Allianz Actions Euro, Paris
100.0
67.55
Allianz Global Life dac, Dublin
100.0
100.0
AGF Benelux S.A., Luxembourg
100.0
AGCS Resseguros Brasil S.A., São Paulo
100.0
Allianz Global Investors Korea Limited, Seoul
100.05
Allianz Defensief Mix Fonds, Rotterdam
100.0
AGCS Marine Insurance Company, Chicago, IL
100.0
Allianz Global Investors Japan Co. Ltd., Tokyo
100.05
Allianz Crowdfunding Fund I FPCI, Paris
Allianz Digital Corporate Ventures S.à r.l.,
Luxembourg
100.0
100.0
Allianz Global Investors Ireland Ltd., Dublin
100.03
Allianz Creactions 2, Paris
100.0
AGA Sigorta Aracilik Hizmetleri LS, Istanbul
100.0
Allianz Global Investors Distributors LLC, Dover, DE
100.03
Allianz Creactions 1, Paris
97.0
AGA Servis Hizmetleri A.S., Istanbul
100.0
AGCS International Holding B.V., Amsterdam
Allianz Global Investors Nominee Services Ltd.,
100.0
100.0
Allianz Global Investors U.S. LLC, Dover, DE
Allianz Egypt for Financial Investments Company
S.A.E., New Cairo
100.03
AIM Equity US, Paris
100.03
AIM Equity Europe PG Vie, Paris
100.0
100.0
Allianz Global Investors U.S. Holdings LLC, Dover, DE
Allianz Edukacja S.A., Warsaw
100.03
AIM Equity Europe Cantons, Paris
100.0
Allianz Global Investors Singapore Ltd., Singapore
Allianz Global Investors Taiwan Ltd., Taipei
49.2 2,5
100.0
Allianz do Brasil Participações Ltda., São Paulo
Allianz Duurzaam Wereld Aandelen Fonds,
Rotterdam
100.0
AGF Inversiones S.A., Buenos Aires
100.0
AGF Holdings (UK) Limited, Guildford
100.0
Allianz Global Investors Schweiz AG, Zurich
54.05
Allianz Discovery Asia Strategy, Senningerberg
100.05
AGF FCR, Paris
100.0
George Town
71.0
8.8
100.0
MLP AG, Wiesloch
Allianz Argentina Compañía de Seguros
OLB-Immobiliendienst-GmbH, Oldenburg
35.42,5
Allianz Euro Tactique, Paris
100.0
Allianz Annuity Company of Missouri, Clayton, MO
100.07
manroland Vertrieb und Service GmbH, Mühlheim
am Main
37.62,5
Allianz Euro Inflation-linked Bond, Senningerberg
91.95
Allianz Amerika Aandelen Fonds, Rotterdam
100.0 6,7
Allianz Euroland Equity SRI, Senningerberg
57.35
100.0
Allianz Alapkezelő Zrt., Budapest
70.8
41.62,5
Allianz Euro Bond Plus, Paris
100.05
Allianz Air France IFC, Paris
100.0
IDS GmbH - Analysis and Reporting Services, Munich
Infrastruktur Putlitz Ost GmbH & Co. KG, Husum
manroland AG, Offenbach am Main
88.05
Allianz EURECO Equity, Paris
100.0
Allianz Africa Services SA, Abidjan
Allianz Euro Bond Strategy, Senningerberg
48.82,5
100.0
Generales S.A., Buenos Aires
Allianz Europe Ltd., Amsterdam
Allianz Asset Management of America LLC, Dover, DE
Allianz Asset Management U.S. Holding II LLC,
50.0
50.0
Dealis Fund Operations GmbH, Frankfurt am Main
PNE WIND Infrastruktur Calau II GmbH, Cuxhaven
100.0
74.55
Allianz Europe Income and Growth, Senningerberg
Allianz Asset Management of America L.P., Dover, DE
50.0
99.45
Allianz Europe Conviction Equity, Senningerberg
100.0
Allianz Asset Management of America Holdings Inc.,
Dover, DE
BEG Weser-Ems Baugrund- und Erschließungsgesell-
schaft mbH & Co. OHG, Oldenburg
100.0
Allianz Europe B.V., Amsterdam
Joint ventures
100.03
Allianz Asac Actions, Paris
86.05
Allianz Europa Obligatie Fonds, Rotterdam
100.0
Allianz Argentina RE S.A., Buenos Aires
100.0
78.65
Allianz Europa Aandelen Fonds, Rotterdam
OLB-Service GmbH, Oldenburg
100.0
100.0
100.0
100.03
100.0
AZRE AZD P&C Master Fund, Munich
100.0
schaft, Munich
100.0
Allianz Global Benefits GmbH, Stuttgart
100.0
gesellschaft mbH, Munich
Allianz Private Krankenversicherungs-Aktiengesell-
55.3
AERS Consortio Aktiengesellschaft, Stuttgart
AZL-Argos 73 Vermögensverwaltungs-
100.0
100.0
100.03
AZL PE Nr. 1 GmbH, Munich
Non-consolidated affiliates
100.0
AZL AI Nr. 1 GmbH, Munich
100.0
Allianz Private Equity GmbH, Munich
100.0
mbH & Co. KG, Munich
100.03
Allianz PKV-PD Fonds, Frankfurt am Main
100.0
AZ-GARI Vermögensverwaltungsgesellschaft
100.03
Windpark Werder Zinndorf GmbH & Co. KG,
Sehestedt
Allianz Private Equity Partners Verwaltungs GmbH,
Munich
Allianz Objektbeteiligungs-GmbH, Stuttgart
100.0
Allianz ProzessFinanz GmbH, Munich
Allianz Africa S.A., Paris la Défense
Grundstücksgesellschaft der Vereinten Versicherun-
gen mbH, Munich
owned¹
%
%
owned¹
owned¹
%
D - Consolidated Financial Statements
139
Annual Report 2016 - Allianz Group
100.0
AZ-Argos 56 Vermögensverwaltungsgesellschaft
mbH, Munich
100.0
AZ-SGD Infrastrukturfonds GmbH, Munich
100.03
Allianz PV-RD Fonds, Frankfurt am Main
100.0
AZ-SGD Direkt Infrastruktur GmbH, Munich
100.03
Allianz PV WS Fonds, Frankfurt am Main
AZ Beteiligungs-Management GmbH, Munich
100.0
Munich
100.03
Allianz PV 1 Fonds, Frankfurt am Main
100.0
Allianz Pension Consult GmbH, Stuttgart
AZS-Arges Vermögensverwaltungsgesellschaft mbH,
100.0
Allianz Equity Large Cap EMU, Paris
100.0
100.0
50.65
Neumagen-Dhron
62.6
Allianz Ayudhya Assurance Public Company Limited,
Bangkok
Windkraft Kirf Infrastruktur GmbH,
25.4
Umspannwerk Putlitz GmbH & Co. KG, Oldenburg
100.0
Défense
100.0
Allianz France Investissement OPCI, Paris la Défense
Allianz France Real Estate Invest SPPICAV, Paris la
100.0
Allianz Aviation Managers LLC, Burbank, CA
25.0
50.09
T&R Real Estate GmbH, Bonn
Allianz Australian Real Estate Trust, Sydney
25.0
T&R MLP GmbH, Bonn
100.03
Allianz France Favart I, Paris
100.0
Limited, Melbourne
25.0
T&R Investment GmbH & Co. KG, Bonn
59.25
Allianz Foncier, Paris
Allianz Australia Workers Compensation (Victoria)
25.0
100.03
Allianz Bank Bulgaria AD, Sofia
99.9
Allianz France Richelieu 1 S.A.S., Paris la Défense
Allianz France S.A., Paris la Défense
Allianz Bonds Euro High Yield, Paris
100.0
Luxembourg
8.3
Allianz European Equity Dividend, Senningerberg
Allianz Fund Investments 2 S.A. (Compartment),
100.03
FC Bayern München AG, Munich
Allianz Bonds Diversified Euro, Paris
16.0
83.5
100.0
Rotterdam
Allianz Bénin Assurances SA, Cotonou
EXTREMUS Versicherungs-Aktiengesellschaft,
Cologne
Allianz Fund Administration and Management B.V.,
100.0
Allianz Benelux S.A., Brussels
of voting rights
100.0
Allianz France US REIT LP, Wilmington, DE
100.0
Allianz Banque S.A., Puteaux
100.0
Allianz France US REIT GP LLC, Wilmington, DE
100.0
Allianz Bank Financial Advisors S.p.A., Milan
100.0
100.0
T&R GP Management GmbH, Bonn
100.0
Other participations between 5 and 20%
Budapest
Allianz Australia Insurance Limited, Sydney
DCSO Deutsche Cyber-Sicherheitsorganisation
GmbH, Berlin
100.0
Allianz Finance IV Luxembourg S.à r.l., Luxembourg
100.0
Sydney
51.09
AV Packaging GmbH, Munich
100.0
Allianz Finance III B.V., Amsterdam
Allianz Australia Employee Share Plan Pty Ltd.,
100.0
Allianz Finance II Luxembourg S.à r.l., Luxembourg
100.0
100.0
Allianz Finance II B.V., Amsterdam
100.0
Allianz Australia Advantage Ltd., Sydney
30.08
Associates
SPN Service Partner Netzwerk GmbH, Munich
100.0
Allianz Finance Corporation, Wilmington, DE
100.0
PNE WIND Park III GmbH & Co. KG, Cuxhaven
50.0
100.0
Dover, DE
100.0
Allianz Finance Pty Ltd., Sydney
Allianz Australia Claim Services Pty Limited, Sydney
25.0
24.0
25.0
Kranichfeld
100.0
100.0
Allianz Fire and Marine Insurance Japan Ltd., Tokyo
Allianz Australia Workers Compensation (NSW)
Allianz Australia Services Pty Limited, Sydney
handel Beteiligungs- und Verwaltungs GmbH,
100.0
Sydney
Allianz Foglalkoztatói Nyugdíjszolgáltató Zrt.,
100.0
Reisegarant GmbH, Hamburg
63.75
Mühl Product & Service und Thüringer Baustoff-
Allianz Australia Life Insurance Limited, Sydney
100.0
Allianz Finance VII Luxembourg S.A., Luxembourg
100.0
Allianz Finance VIII Luxembourg S.A., Luxembourg
Allianz FinanzPlan 2055, Senningerberg
esa EuroShip GmbH & Co. KG Underwriting for
Shipping, Bad Friedrichshall
100.0
Limited, Sydney
100.0
40.0
Allianz Australia Partnership Services Pty Limited,
Allianz Australia Limited, Sydney
100
2/2
Dr. Wulf H. Bernotat
100
2/2
Dr. Helmut Perlet (Chairman)
Gabriele Burkhardt-Berg
100
66
2/34
83
5/6
6/6
83
5/6
100
STANDING COMMITTEE
2/2
100
Prof. Dr. Renate Köcher
7/7
100
Dr. Wulf H. Bernotat (Chairman)
AUDIT COMMITTEE
4/43
Jean-Jacques Cette
100
3/3
Rolf Zimmermann
100
100
Christine Bosse
3/3
Dr. Helmut Perlet (Chairman)
PERSONNEL COMMITTEE
100
2/2
Rolf Zimmermann
50
1/2
3/3
100
Christine Bosse
100
Gabriele Burkhardt-Berg
Dante Barban
Rolf Zimmermann (Vice Chairman)
Dr. Wulf H. Bernotat (Vice Chairman)
Dr. Helmut Perlet (Chairman)
PLENARY SESSIONS OF THE SUPERVISORY BOARD
- Selection of suitable candidates for election to the
Supervisory Board as shareholder representatives
- Establishment of selection criteria for shareholder
representatives on the Supervisory Board in
compliance with the Code's recommendations
on the composition of the Supervisory Board
- Setting of concrete objectives for the composition
of the Supervisory Board
-Approval of the assumption of other mandates
by Board of Management members
- Conclusion, amendment and termination of
service contracts of Board of Management
members unless reserved for the plenary session
- Long-term succession planning for the Board of
Management
- Preparation of plenary session resolutions on the
compensation system and the overall compen-
sation of Board of Management members
- Preparation of the appointment of Board of
Management members
risk-related statements in the annual financial
statements and management reports of
Allianz SE and the Allianz Group, informing the
Audit Committee of the results of such reviews
- Initial review of the annual Allianz SE and consoli-
dated financial statements, management reports
(incl. Risk Report) and the dividend proposal,
review of half-yearly reports or, where applicable,
quarterly financial reports or statements
-Monitoring of the financial reporting process,
the effectiveness of the internal control and audit
system and legal and compliance issues
5/7
-Initial review of the Risk Report and other
-Monitoring of the general risk situation and
special risk developments in the Allianz Group
-Monitoring of the effectiveness of the risk
management system
- Monitoring of the audit procedures, including
the independence of the auditor and the services
additionally rendered, awarding of the audit
contract and determining the focal points of the
audit
Jean-Jacques Cette
Dr. Friedrich Eichiner
Ira Gloe-Semler
Martina Grundler
Prof. Dr. Renate Köcher
Jürgen Lawrenz
3/31
100
6/6
100
6/6
66
4/6
100
6/6
2/22
100
- Preparation of the efficiency review of the
Supervisory Board
100
6/6
100
6/6
IN %
PRESENCE
Peter Denis Sutherland
Jim Hagemann Snabe
6/6
71
- Compliance with the limitation on the number of mandates as recommended by
the German Corporate Governance Code and required by § 24 (4) of the German
Insurance Supervision Act 2016 ("Versicherungsaufsichtsgesetz - VAG").
2/22
Employee representation within Allianz SE, as provided for by the SE Agreement con-
cerning the Participation of Employees dated 3 July 2014, contributes to diversity of
work experience and cultural background. Pursuant to § 6 (2) sentence 2 of the Act on
the Participation of Employees in a European Company (SEBG), the number of women
and men appointed as German employee representatives should be proportional to
the number of women and men working in the German companies. However, the
Supervisory Board does not have the right to select the employee representatives.
The following requirements and objectives apply to the composition of Allianz SE'S
Supervisory Board:¹
- attendance of the General Meeting is required;
- sufficient time has to be dedicated for the audit of the annual and consolidated
financial statements;
- there at least four, but usually six ordinary Supervisory Board meetings per year,
each of which requires adequate preparation;
Each member of the Supervisory Board must ensure that it has sufficient time to
dedicate to the proper fulfilment of the Supervisory Board mandate. It has to be taken
into account that
3. Time of availability
It must be taken into account that the possible emergence of conflicts of interest in
individual cases cannot, as a general rule, be excluded. Potential conflicts of interest
must be disclosed to the chairman of the Supervisory Board and will be resolved by
appropriate measures.
At least eight members of the Supervisory Board should be independent as defined
by No. 5.4.2 of the Corporate Governance Code, i.e. they may not have any business
or personal relations with Allianz SE or its Executive Bodies, a controlling shareholder
or an enterprise associated with the latter, which may cause a substantial and not
merely temporary conflict of interests. In case shareholder representatives and
employee representatives are viewed separately, at least four members should be
independent within the meaning of No. 5.4.2 of the Corporate Governance Code.
Regarding employee representatives, however, the mere fact of employee repre-
sentation and the existence of a working relationship with the company shall not
itself affect independence.
2. Independence
- Knowledge of the field of corporate governance and supervisory law
- Knowledge of the main features of accounting and risk management
- Reliability
General knowledge of the insurance and financial services business
Willingness and ability to make sufficient commitments on substance
Fulfillment of the regulatory requirements, in particular¹:
- Managerial or operational experience
1. General selection criteria
of the Supervisory Board
I. Requirements relating to the individual members
"The aim of Allianz SE's Supervisory Board is to have members who are equipped with
the necessary skills and competence to properly supervise and advise Allianz SE's
management. Supervisory Board candidates should possess the professional expertise
and experience, integrity, motivation and commitment, independence and personality
required to successfully carry out the responsibilities of a Supervisory Board member
in a financial-services institution with international operations. To promote additional
cooperation among Supervisory Board members, care should be taken in selecting the
candidates to ensure that adequate attention is paid to ensuring diversity in occupa-
tional backgrounds, professional expertise and experience.
B - Corporate Governance
OBJECTIVES OF ALLIANZ SE'S SUPERVISORY BOARD REGARDING ITS COMPOSITION
depending on possible memberships in one or more of the currently five Super-
visory Board committees, extra time planning to participate in the committee
meetings and to prepare for such meetings is required; this applies in particular to
the Audit and Risk Committees;
The objectives for the composition of the Supervisory Board (in the
version from August 2016) to implement a recommendation by the
Code, are as follows:
extraordinary meetings of the Supervisory Board or of a committee may be
necessary to deal with special matters.
Members of the Supervisory Board may not, in general, be older than 70 years of age.
1- For further details, please see BaFin Guidance Notice on Vetting Members of Administrative and Super-
visory Bodies in accordance with the German Banking Act and the German Insurance Supervision Act in
its respective effective version.
Annual Report 2016 - Allianz Group
The Supervisory Board shall be composed of at least 30% women and at least 30% men.
The representation of women is generally considered to be the joint responsibility of
the shareholder and employee representatives."
- Preparation of the Declaration of Conformity
pursuant to § 161 "Aktiengesetz" (German Stock
Corporation Act) and checks on corporate
governance
17
The members of the Supervisory Board shall complement one another regarding their
background, professional experience and specialist knowledge, in order to provide the
Supervisory Board with the most diverse sources of experience and specialist
knowledge possible.
3. Diversity and appropriate representation of women
At Allianz SE as a Societas Europaea (European Company), Allianz employees from
different Member States of the E.U. are considered in the distribution of Supervisory
Board seats for employee representatives, according to the Agreement concerning the
Participation of Employees in Allianz SE dated 3 July 2014.
At least four of the members must, on the basis of their origin or function, represent
regions or cultural areas in which Allianz SE conducts significant business.
2. International character
Specialist knowledge of, or experience in, other economic sectors.
At least one member must have expert knowledge of accounting and auditing as
defined by § 100 (5) of the German Stock Corporation Act.
At least one member must have considerable experience in the insurance and
financial-services fields
Make certain that the members in their entirety are familiar with the insurance
and financial-services industry as defined under Article 100 (5) of the German Stock
Corporation Act (AktG).
-
1. Specialist knowledge
II. Requirements relating to the composition of the Board as a whole
The continuous period of membership for any member of the Supervisory Board
should, as a rule, not exceed 15 years.
5. Term of membership
4. Retirement age
REGARDING ITS COMPOSITION
OBJECTIVES OF THE SUPERVISORY BOARD
Annual Report 2016 - Allianz Group
2/2
Christine Bosse
100
2/2
Dante Barban
100
2/2
Dr. Helmut Perlet (Chairman)
RISK COMMITTEE
Dr. Helmut Perlet
Jim Hagemann Snabe
100
7/7
86
6/7
80
4/53
Martina Grundler
100
100
1/11
100
2/2
1 - Dr. Eichiner joined the Supervisory Board on 4 May 2016.
2- Ms. Gloe-Semler left the Supervisory Board on 31 March 2016.
3- Ms. Grundler joined the Supervisory Board on 1 April 2016.
4- Mr. Sutherland left the Supervisory Board on 4 May 2016.
5-Mr. Snabe joined the Nomination Committee on 4 May 2016.
16
116
100
2/25
50
1/24
100
4/4
Ira Gloe-Semler
100
Jim Hagemann Snabe
Peter Denis Sutherland
Dr. Helmut Perlet (Chairman)
Prof. Dr. Renate Köcher
NOMINATION COMMITTEE
Peter Denis Sutherland
Jürgen Lawrenz
Dr. Friedrich Eichiner
0/14
100
4/4
-Approval of certain transactions which require
the approval of the Supervisory Board, e.g. capital
measures, acquisitions and disposals of
participations
until 31 December 2016
until 4 May 2016, Jim Hagemann
Snabe from 4 May 2016)
12
1- Generally, we regard memberships in other supervisory bodies as "comparable" if the company is listed on a stock exchange or has more than 500 employees.
Allianz Investment Management SE (Chairman)
Allianz Lebensversicherungs-AG
Allianz Asset Management AG
Membership in Group bodies
Membership in other statutory supervisory boards
and SE administrative boards in Germany
Insurance Asia Pacific
Investments, Global Life/Health
DR. MAXIMILIAN ZIMMERER
since 31 January 2017
Allianz Tiriac Asigurari S.A.
Allianz Suisse Lebensversicherungs-Gesellschaft AG
Allianz Suisse Versicherungs-Gesellschaft AG
Allianz Elementar Lebensversicherungs-AG (Chairman)
Allianz Elementar Versicherungs-AG (Chairman)
Allianz Investmentbank AG
Membership in Group bodies
Membership in comparable¹ supervisory bodies
Allianz Investment Management SE
Allianz Deutschland AG (Chairman)
Membership in Group bodies
FC Bayern München AG
Annual Report 2016 - Allianz Group
Membership in other statutory supervisory boards
and SE administrative boards in Germany
CORPORATE GOVERNANCE
Annual Report 2016
Dr. Maximilian Zimmerer.
Dr. Dieter Wemmer,
(dissolved effective as of 1 July 2016)
Oliver Bäte (Chairman),
GROUP CAPITAL COMMITTEE
BOARD COMMITTEES
BOARD COMMITTEES
BOARD OF MANAGEMENT AND GROUP COMMITTEES
In the financial year 2016, there were the following Board of Manage-
ment committees:
Regular Board of Management meetings are led by the Chair-
man. Each member of the Board may request a meeting, providing
notification of the proposed subject. The Board takes decisions by a
simple majority of participating members. In the event of a tie, the
Chairman casts the deciding vote. The Chairman can also veto deci-
sions, but cannot impose any decisions against the majority vote.
The members of the Board of Management are jointly responsible
for management and for complying with legal requirements. Not-
withstanding this overall responsibility, the individual members
head the departments they have been assigned independently. There
are divisional responsibilities for business segments as well as func-
tional responsibilities. The latter include the Finance-, Risk Manage-
ment- and Controlling-Function, Investments, Operations – includ-
ing IT-, Human Resources, Legal and Compliance, Internal Audit and
Mergers & Acquisitions. Business division responsibilities focus on
geographical regions or Global Lines, such as Asset Management.
Rules of procedure specify in more detail the structure and depart-
mental responsibilities of the Board of Management.
The Board of Management of Allianz SE comprises nine members. It
is responsible for setting business objectives and the strategic direc-
tion, coordinating and supervising the operating entities, as well as
implementing and overseeing an efficient risk management system.
The Board of Management also prepares the Group's consolidated
financial statements and the annual financial statements of Allianz SE,
including the market value balance sheet, as well as interim reports.
Function of the Board of Management
As a European Company, Allianz SE is subject to special European SE
regulations and the German SE Implementation Act ("SE-Ausfüh-
rungsgesetz") in addition to the German stock corporation Act. How-
ever, the main features of a German stock corporation – in particular
the two-tier board system (Board of Management and Supervisory
Board) and the principle of equal employee representation on the
Supervisory Board – have been maintained by Allianz SE.
of the European Company (SE)
Corporate Constitution
Good corporate governance is essential for sustainable business per-
formance. The Board of Management and the Supervisory Board of
Allianz SE thus attach great importance to complying with the recom-
mendations of the German Corporate Governance Code (referred to
hereinafter as the “Code”). The Declaration of Conformity with the
recommendations of the Code, issued by the Board of Management
and the Supervisory Board on 15 December 2016, and the company's
position regarding the Code's suggestions can be found in the State-
ment on Corporate Management pursuant to § 315 (5) and § 289a of
the HGB starting on > page 19.
Corporate Governance Report
B - Corporate Governance
13
- Allianz Group
B
Insurance German Speaking Countries and
Central & Eastern Europe
DR. WERNER ZEDELIUS
since 10 May 2016
JAY RALPH
Allianz Worldwide Partners S.A.S.
Allianz Managed Operations & Services SE (Chairman)
Membership in comparable¹ supervisory bodies
Membership in Group bodies
DR. CHRISTOF MASCHER
Operations, Allianz Worldwide Partners
Membership in other statutory supervisory boards
and SE administrative boards in Germany
Volkswagen Autoversicherung AG
Membership in Group bodies
Companhia de Seguros Allianz Portugal S.A.
Allianz Compañía de Seguros y Reaseguros S.A.
Membership in Group bodies
until 31 May 2016
UniCredit S.p.A.
Membership in comparable¹ supervisory bodies
Allianz Global Corporate & Specialty SE
since 11 March 2016
Allianz Deutschland AG
Allianz Asset Management AG (Chairwoman)
Membership in Group bodies
B - Corporate Governance
since 25 May 2016
Deutsche Telekom AG
Membership in other statutory supervisory boards
and SE administrative boards in Germany
until 30 June 2016
Asset Management, US Life Insurance
Membership in comparable¹ supervisory bodies
Membership in Group bodies
Allianz Life Insurance Company of North America
(Chairman)
DR. GÜNTHER THALLINGER
Membership in comparable¹ supervisory bodies
UBS Group AG
Allianz Investment Management SE
Allianz Asset Management AG
Membership in Group bodies
Membership in other statutory supervisory boards
and SE administrative boards in Germany
Finance, Controlling, Risk
DR. DIETER WEMMER
Euler Hermes Group S.A. (Chairman since 25 May 2016)
Allianz Insurance plc (Chairman)
Allianz Irish Life Holdings plc
GROUP FINANCE AND RISK COMMITTEE
Allianz Australia Ltd.
Global Insurance Lines & Anglo Markets
Membership in other statutory supervisory boards
and SE administrative boards in Germany
ProCurand GmbH & KGaA (Chairman)
Membership in Group bodies
DR. AXEL THEIS
since 22 July 2016
Allianz S.p.A.
Allianz Investment Management SE (Chairman)
Membership in comparable¹ supervisory bodies
Membership in Group bodies
Allianz Asset Management AG
Membership in other statutory supervisory boards
and SE administrative boards in Germany
Membership in Group bodies
Investment Management
since 1 January 2017
Allianz Global Corporate & Specialty SE (Chairman)
Membership in comparable¹ supervisory bodies
Membership in Group bodies
RESPONSIBILITIES
Dr. Dieter Wemmer (Chairman),
Sergio Balbinot,
Dr. Axel Theis,
- Chairman: appointed
5 members
AUDIT COMMITTEE
Rolf Zimmermann)
(Gabriele Burkhardt-Berg,
- Two employee representatives
representatives (Prof. Dr. Renate
Köcher, Dr. Wulf H. Bernotat)
- Two further shareholder
(Dr. Helmut Perlet)
of the Supervisory Board
- Chairman: Chairman
5 members
STANDING COMMITTEE
COMMITTEES
SUPERVISORY BOARD
SUPERVISORY BOARD COMMITTEES
PUBLICATION OF DETAILS OF MEMBERS' PARTICIPATION IN MEETINGS
The Supervisory Board considers it good corporate governance to
publish the details of individual members' participation in plenary
sessions and committee meetings.
OF MEMBERS' PARTICIPATION IN MEETINGS
by the Supervisory Board
(Dr. Wulf H. Bernotat)
PUBLICATION OF DETAILS
- Three shareholder
Ira Gloe-Semler until 31 March
2016, Martina Grundler from
representatives (Prof. Dr. Renate
Köcher, Peter Denis Sutherland
- Two further shareholder
of the Supervisory Board
(Dr. Helmut Perlet)
-Chairman: Chairman
3 members
NOMINATION COMMITTEE
- One employee representative
(Rolf Zimmermann)
(Christine Bosse)
representative
- One further shareholder
(Dr. Helmut Perlet)
of the Supervisory Board
-Chairman: Chairman
3 members
PERSONNEL COMMITTEE
- Two employee representatives
(Dante Barban, Jürgen Lawrenz)
-Chairman: appointed by
the Supervisory Board
(Dr. Helmut Perlet)
- Three shareholder
representatives (in addition to
Dr. Helmut Perlet: Christine
Bosse, Peter Denis Sutherland
until 4 May 2016, Dr. Friedrich
Eichiner from 4 May 2016)
RISK COMMITTEE
5 members
4 May 2016)
representatives (in addition to
Dr. Wulf H. Bernotat: Dr. Helmut
Perlet, Jim Hagemann Snabe)
- Two employee representatives
(Jean-Jacques Cette,
Part of the Supervisory Board's work is carried out by its committees.
The Supervisory Board receives regular reports on the activities of its
committees. The composition of committees and the tasks assigned
to them are regulated by the Supervisory Board's Rules of Procedure.
SUPERVISORY BOARD COMMITTEES
B - Corporate Governance
B - Corporate Governance
Annual Report 2016 - Allianz Group
14
Besides Board committees, there are also Group committees whose
job it is to prepare decisions for the Board of Management of Allianz SE,
submit proposals for resolutions, and ensure the smooth flow of
information within the Group.
Managing and overseeing Group M & A
transactions, including approval of
individual transactions within certain
thresholds.
Developing, proposing, implementing
and monitoring a group-wide IT strategy,
approval of relevant IT investments.
stress tests.
Preparation of the capital and liquidity
planning for the Group and Allianz SE,
implementing and overseeing the
principles of group-wide capital and
liquidity planning, as well as investment
strategy and preparing risk strategy.
This includes, in particular, significant
individual investments and guidelines for
currency management, Group financing
and internal Group capital management,
as well as establishing and overseeing a
group-wide risk management and
monitoring system including dynamic
Proposals to the Board of Management
concerning risk capital management,
including group-wide capital and liquidity
planning, as well as investment strategy.
RESPONSIBILITIES
as of 31 December 2016
Dr. Maximilian Zimmerer until 6 July 2016.
AND ACQUISITIONS COMMITTEE
Dr. Helga Jung (Chairwoman),
Oliver Bäte from 7 July 2016,
Dr. Dieter Wemmer,
GROUP MERGERS
Dr. Werner Zedelius.
Dr. Dieter Wemmer,
Dr. Christof Mascher (Chairman),
Jay Ralph until 30 June 2016,
Jacqueline Hunt from 1 July 2016,
Dr. Axel Theis,
GROUP IT COMMITTEE
Dr. Maximilian Zimmerer.
In the financial year 2016, there were the following Group commit- Principles and function
tees:
GROUP COMMITTEES
GROUP COMMITTEES
15
Annual Report 2016 - Allianz Group
The Supervisory Board regularly reviews the efficiency of its
activities. The Supervisory Board discusses recommendations for
improvements and adopts appropriate measures on the basis of rec-
ommendations from the Standing Committee. The efficiency review
also includes an evaluation of the fitness and propriety of the indi-
vidual members.
The Supervisory Board takes all decisions based on a simple
majority. The special requirements for appointing members to the
Board of Management, as stipulated in the German Co-Determina-
tion Act, and the requirement to have a Conciliation Committee do
not apply to an SE. In the event of a tie, the casting vote lies with the
Chairman of the Supervisory Board, who at Allianz SE must be a
shareholder representative. If the Chairman is not present in the
event of a tie, the casting vote lies with the vice chairperson from the
shareholder side. A second vice chairperson is elected on the pro-
posal of the employee representatives.
The Supervisory Board oversees and advises the Board of Man-
agement on managing the business. It is also responsible for appoint-
ing the members of the Board of Management, determining their
overall remuneration and reviewing Allianz SE's and the Allianz
Group's annual financial statements. The Supervisory Board's activi-
ties in the 2016 financial year are described in the Supervisory Board
Report starting on > page 5.
The Supervisory Board comprises twelve members, including six
shareholder representatives appointed by the AGM. The six employee
representatives are appointed by the SE works council. The specific
procedure for their appointment is laid down in the SE Agreement.
This agreement stipulates that the six employee representatives
must be allocated in proportion to the number of Allianz employees
in the different countries. The Supervisory Board currently in office
comprises four employee representatives from Germany and one
each from France and Italy. The last regular election of the Super-
visory Board took place in May 2012 for a term lasting until the end of
the ordinary AGM in 2017. According to § 17 (2) of the German SE
Implementation Act ("SE-Ausführungsgesetz"), the Supervisory Board
of Allianz SE shall be composed of at least 30% women and at least 30%
men as of 1 January 2016.
The German Co-Determination Act ("Mitbestimmungsgesetz") does
not apply to Allianz SE because it has the legal form of a European
Company (SE). Instead, the size and composition of the Supervisory
Board are determined by general European SE regulations. These
regulations are implemented in the Statutes and by the SE Agree-
ment.
of the Supervisory Board
Important decisions of the Board of Management require
approval by the Supervisory Board. These requirements are stipu-
lated by law, by the Statutes, or in individual cases by decisions of the
Annual General Meeting (AGM). Supervisory Board approval is
required, for example, for certain capital transactions, intercompany
agreements and the launch of new business segments or the closure
of existing ones. Approval is also required for acquisitions of compa-
nies and holdings in companies, as well as for divestments of Group
companies which exceed certain threshold levels. The Agreement
concerning the Participation of Employees in Allianz SE, in the version
dated 3 July 2014 (hereinafter “SE Agreement"), requires the approval
of the Supervisory Board for the appointment of the member of the
Board of Management responsible for employment and social welfare.
Dr. Helga Jung until 6 July 2016,
Jay Ralph until 30 June 2016,
The Board of Management reports regularly and comprehen-
sively to the Supervisory Board on business development, the finan-
cial position and earnings, planning and achievement of objectives,
business strategy and risk exposure. Details on the Board of Manage-
ment's reporting to the Supervisory Board are laid down in the report-
ing rules issued by the Supervisory Board.
Implementing Group investment strategy,
including monitoring group-wide invest-
ment activities as well as approving invest-
ment-related frameworks and guidelines
and individual investments within certain
thresholds.
Monitoring of the underwriting business,
of the related risk management and
strategy as well as developing an under-
writing policy.
Designing, monitoring and improving
group-wide compensation systems in line
with regulatory requirements and sub-
mitting an annual report on the results of
its monitoring, along with proposals for
improvement.
RESPONSIBILITIES
GROUP INVESTMENT COMMITTEE
Members of the Board of Management
and executives below Allianz SE Board
level
Members of the Board of Management,
executives below Allianz SE Board level
and Chief Underwriting Officers of Group
companies
(continued as a functional committee
within Dr. Theis' area of responsibility
effective as of 1 July 2016)
GROUP UNDERWRITING COMMITTEE
GROUP COMPENSATION COMMITTEE
Board members of Allianz SE and
executives below Allianz SE Board level
The Allianz Group runs its operating entities and business segments
via an integrated management and control process. The Holding and
the operating entities first define the business strategies and goals.
On this basis, joint plans are then prepared for the Supervisory
Board's consideration when setting targets for the performance-
based remuneration of the members of the Board of Management.
For details, see the Remuneration Report starting on > page 24.
The composition of the Supervisory Board of Allianz SE reflects these Accounting and auditing
DR. HELGA JUNG
Shares held by members of the Board of
Management and the Supervisory Board
Employee of Allianz S.p.A.
DANTE BARBAN
of Allianz SE
Chairman of the (European) SE Works Council
Vice Chairman
ROLF ZIMMERMANN
Vonovia SE (Chairman)
Deutsche Telekom AG
and SE administrative boards in Germany
Bertelsmann Management SE
Bertelsmann SE & Co. KGaA
Membership in other statutory supervisory boards
Member of various Supervisory Boards
Vice Chairman
DR. WULF H. BERNOTAT
GEA Group AG (Chairman since 20 April 2016)
Membership in other statutory supervisory boards
and SE administrative boards in Germany
Commerzbank AG
CHRISTINE BOSSE
Member of various Supervisory Boards
Membership in comparable' supervisory bodies
P/F BankNordik (Chairwoman)
of ver.di Hamburg
Regional Representative Financial Services
until 1 April 2016
IRA GLOE-SEMLER
Membership in comparable' supervisory bodies
Festo Management AG
Member of various Supervisory Boards
Membership in other statutory supervisory boards
and SE administrative boards in Germany
Festo AG
DR. FRIEDRICH EICHINER
since 4 May 2016
Member of various Supervisory Boards
Allianz France S.A.
of Allianz France S.A.
Chairman of the Group Works Council
JEAN-JACQUES CETTE
since 1 September 2016
Chairwoman of the Group Works Council of Allianz SE
Membership in other statutory supervisory boards
and SE administrative boards in Germany
Allianz Deutschland AG
GABRIELE BURKHARDT-BERG
TDC A/S
Membership in comparable¹ supervisory bodies
Membership in Group bodies
MARTINA GRUNDLER
Chairman
A - To Our Investors
AUDIT OF ANNUAL ACCOUNTS AND CONSOLIDATED FINANCIAL STATEMENTS
Nomination Committee: Dr. Helmut Perlet (Chairman), Prof. Dr. Renate Köcher,
Jim Hagemann Snabe
Dr. Friedrich Eichiner, Jürgen Lawrenz
Risk Committee: Dr. Helmut Perlet (Chairman), Dante Barban, Christine Bosse,
Personnel Committee: Dr. Helmut Perlet (Chairman), Christine Bosse, Rolf Zimmermann
Audit Committee: Dr. Wulf H. Bernotat (Chairman), Jean-Jacques Cette, Martina Grundler,
Dr. Helmut Perlet, Jim Hagemann Snabe
Gabriele Burkhardt-Berg, Prof. Dr. Renate Köcher, Rolf Zimmermann
Standing Committee: Dr. Helmut Perlet (Chairman), Dr. Wulf H. Bernotat,
Vice Chairmen: Dr. Wulf H. Bernotat, Rolf Zimmermann
Chairman: Dr. Helmut Perlet
CHAIR AND COMMITTEES OF THE SUPERVISORY BOARD - as of 31 December 2016
The Supervisory Board was regularly and comprehensively informed of the committees' work.
The Nomination Committee held four meetings, two of which by conference call in 2016, in
which it dealt comprehensively with the proposals made by the shareholders for the election
of the Supervisory Board by the 2017 AGM.
measures to reduce it were also dealt with in detail. Other matters considered were the risk
strategy of Allianz SE and of the Allianz Group, the risk categories “operational risk” and
"credit risk", the effects of the prevailing low-interest environment, and the rules for Global
Systematically Important Insurers (G-SII).
Insurance Iberia & Latin America, Legal, Compliance,
Mergers & Acquisitions
objectives. It has an appropriate number of independent members
with international backgrounds. With four female Supervisory Board
members, the current legislation for equal participation of women
and men in leadership positions (statutory gender quota of 30%) is
being met. The current composition of the Supervisory Board and its
committees is described on > page 9.
In compliance with the special legal provisions applying to insurance companies, the statutory
auditor and the auditor for the review of the half-yearly financial report are appointed by
the Supervisory Board of Allianz SE not the AGM. The Supervisory Board has appointed KPMG as
statutory auditor for the annual Allianz SE and consolidated financial statements, as well as
for the review of the half-yearly financial report of the fiscal year 2016. KPMG audited the finan-
cial statements of Allianz SE and the Allianz Group as well as the respective management
reports. They issued an auditor's report without any reservations. The consolidated financial
statements were prepared on the basis of the International Financial Reporting Standards (IFRS),
as adopted in the European Union. KPMG performed a review of the half-yearly financial report.
The third-quarter results were subject to a voluntary review by KPMG. In addition, KPMG was
also mandated to perform an audit of the market value balance sheet according to Solvency II.
All Supervisory Board members received the documentation relating to the annual financial
statements and the auditor's reports from KPMG on schedule. The provisional financial state-
ments and KPMG's audit results were discussed in the Audit Committee on 15 February 2017
and in the plenary session of the Supervisory Board on 16 February 2017. The final financial
statements and KPMG's audit reports were reviewed on 9 March 2017 by the Audit Committee
and in the Supervisory Board plenary session. The auditors participated in these discussions
and presented the main results from the audit. No material weaknesses in the internal financial
Annual Report 2016 - Allianz Group
A - To Our Investors
of the Supervisory Board
Mandates of the Members
Annual Report 2016 - Allianz Group
Chairman
Dr. Helmut Perlet
10
10
DR. HELMUT PERLET
For the Supervisory Board:
As already mentioned, the 2016 financial year also saw personnel changes within Allianz SE's
Board of Management. Mr. Jay Ralph and Dr. Maximilian Zimmerer stepped down from
the Board of Management with effect from 30 June 2016 and 31 December 2016, respectively.
Ms. Jacqueline Hunt was appointed as successor to Mr. Ralph with effect from 1 July 2016.
Dr. Zimmerer was replaced by Dr. Günther Thallinger with effect from 1 January 2017.
Ms. Ira Gloe-Semler resigned from her office of employee representative on the Supervisory
Board effective 31 March 2016, due to her change of function with the union ver.di. The SE
Works Council appointed Ms. Martina Grundler, also a representative of the union ver.di, as her
successor. Mr. Peter Denis Sutherland stepped down from the Supervisory Board following the
AGM on 4 May 2016, having reached retirement age. Dr. Friedrich Eichiner was elected to the
Supervisory Board as his successor by the AGM.
The Supervisory Board would like to thank all Allianz Group employees for their great personal
commitment over the past year.
On the basis of our own reviews of the annual Allianz SE and consolidated financial state-
ments, the management and group management reports and the recommendation for appro-
priation of earnings, we raised no objections and agreed with the results of the KPMG audit.
We approved the Allianz SE and consolidated financial statements prepared by the Board of
Management. We agree with the Board of Management's proposal on the appropriation of
earnings.
reporting control process were discovered. There were no circumstances that might give
cause for concern about the auditor's independence. In addition, the market-value balance
sheet as of 31 December 2016 as well as the relevant KPMG report, were addressed by the Audit
Committee and Supervisory Board.
A - To Our Investors
9
Munich, 9 March 2017
since 1 April 2016
MEMBERS OF THE SUPERVISORY BOARD AND BOARD OF MANAGEMENT
PROF. DR. RENATE KÖCHER
Allianz Sigorta A.S.
until 22 July 2016
Allianz S.p.A.
Allianz France S.A.
Membership in Group bodies
since 9 June 2016
UniCredit S.p.A.
since 12 January 2016
Bajaj Allianz Life Insurance Co. Ltd.
since 12 January 2016
Bajaj Allianz General Insurance Co. Ltd.
Membership in comparable¹ supervisory bodies
since 1 January 2017
Asia Pacific
Insurance Middle East, Africa
Allianz Yasam ve Emeklilik A.S.
JACQUELINE HUNT
since 1 July 2016
Asset Management, US Life Insurance
The total holdings of members of the Board of Management and the
Supervisory Board of Allianz SE amounted to less than 1% of the com-
pany's issued shares as of 31 December 2016.
National Representative Insurances, ver.di Berlin
Directors' dealings
Members of the Board of Management and the Supervisory Board are
obliged by the E.U. Market Abuse Directive to disclose to both Allianz SE
and the German Federal Financial Supervisory Authority any trans-
actions involving shares or debt securities of Allianz SE or financial
derivatives or other instruments based on them as soon as the value
of the securities acquired or divested by the member amounts to five
thousand Euros or more within a calendar year. These disclosures are
published on our website at: ②> www.allianz.com/directorsdealings.
Annual General Meeting
The Allianz Group prepares its accounts according to § 315a of the
German Commercial Code ("Handelsgesetzbuch- HGB") on the basis
of International Financial Reporting Standards (IFRS) as adopted
within the European Union. The annual financial statements of
Allianz SE are prepared in accordance with German law, in particular
the HGB.
In compliance with special legal provisions that apply to insur-
ance companies, the auditor of the annual financial statements and
of the half-yearly financial report is appointed by the Supervisory
Board, and not by the AGM. The audit of the financial statements cov-
ers the individual financial statements of Allianz SE and also the con-
solidated financial statements of the Allianz Group.
Insurance Western & Southern Europe
To ensure maximum transparency, we inform our shareholders,
financial analysts, the media and the general public about the com-
pany's situation on a regular basis and in a timely manner. The annu-
al financial statements of Allianz SE, the Allianz Group's consolidated
financial statements and the respective management reports are
published within 90 days of the end of each financial year. Additional
information is provided in the Allianz Group's half-yearly financial
reports and quarterly statements. Information is also made available
at the AGM, at press and analysts' conferences, as well as on the Allianz
Group's website. Our website also provides a financial calendar list-
ing the dates of major publications and events, such as annual
reports, quarterly statements and half-yearly financial reports, AGMS
as well as analyst conference calls and Financial press conferences.
You can find the 2017 financial calendar on our website at
> www.allianz.com/financialcalendar.
When adopting resolutions, each share carries one vote. Shareholders
can follow the AGM's proceedings on the internet and be represented
by proxies. These proxies exercise voting rights exclusively on the
basis of instructions given by the shareholder. Shareholders are also
able to cast their votes via the internet in the form of online voting.
Allianz SE regularly promotes the use of internet services.
The AGM elects the shareholder representatives of the Super-
visory Board and approves the actions taken by the Board of Manage-
ment and the Supervisory Board. It decides on the use of profits,
capital transactions and the approval of intercompany agreements,
as well as the remuneration of the Supervisory Board and changes to
the company's Statutes. In accordance with European regulations
and the Statutes, changes to the Statutes require a two-thirds major-
ity of votes cast in case less than half of the share capital is repre-
sented in the AGM. Each year, an ordinary AGM takes place at which
the Board of Management and Supervisory Board give an account of
the preceding financial year. For special decisions, the German Stock
Corporation Act provides for the convening of an extraordinary AGM.
The regulatory requirements for corporate governance as set out in
Solvency II are additionally important. These requirements, which
became effective as of 1 January 2016, include, in particular, the
establishment and further design of significant control functions
(risk management, actuarial function, compliance and internal
audit) as well as general principles for a sound business organiza-
tion. The regulatory requirements are applicable throughout the
Group and have been implemented using written guidelines issued
by the Board of Management of Allianz SE. For the financial year 2016
it was required to prepare for the first time a market value balance
sheet at the individual and Group level, for this to be audited by the
auditor and separately reported on.
18
since 22 July 2016
Allianz Life Insurance Company of North America
(Chairwoman)
Membership in comparable¹ supervisory bodies
Membership in Group bodies
Shareholders exercise their rights at the Annual General Meeting. Regulatory requirements
SERGIO BALBINOT
Annual Report 2016 - Allianz Group
Allianz France S.A.
Siemens AG
Membership in other statutory supervisory boards
and SE administrative boards in Germany
SAP SE
Member of various Supervisory Boards
JIM HAGEMANN SNABE
Allianz Managed Operations & Services SE
Membership in Group bodies
Employee of Allianz Managed Operations & Services SE
Membership in other statutory supervisory boards
and SE administrative boards in Germany
Membership in comparable' supervisory bodies
Robert Bosch GmbH
Infineon Technologies AG
BMW AG
and SE administrative boards in Germany
Membership in other statutory supervisory boards
until 5 May 2016
(Allensbach Institute)
Head of "Institut für Demoskopie Allensbach"
Nestlé Deutschland AG
A.P. Møller-Mærsk A/S
JÜRGEN LAWRENZ
Bang & Olufsen A/S
Membership in other statutory supervisory boards
and SE administrative boards in Germany
Membership in Group bodies
Allianz Deutschland AG
since 12 April 2016
Chairman of the Board of Management
OLIVER BÄTE
of the Board of Management
A - To Our Investors
11
Membership in comparable' supervisory bodies
Membership in Group bodies
Mandates of the Members
1- Generally, we regard memberships in other supervisory bodies as "comparable" if the company is listed on a stock exchange or has more than 500 employees.
Koç Holding A.Ş.
Danske Bank A/S
until 17 March 2016
PETER DENIS SUTHERLAND
until 4 May 2016
Membership in comparable¹ supervisory bodies
BW Group Ltd.
Annual Report 2016 - Allianz Group
Member of various Supervisory Boards
Total
3,014
3,014
764
3,430
1,653
4,056
GEI 2008/SAR5
4,139
GEI 2010/SAR5
889
889
1,125
750
2,534
750
1,125
750
GEI 2010/RSU4
Pensions Service Cost
AEI 2012/RSU4
AEI 2011/RSU4
750
274
Grant
420
Target
AEI 2016/RSU4
Target
2016
2015
2016
2016
2015
Payout¹
Grant
Actual
420
Dr. Axel Theis (Appointed: 01/2015)
4,330
3,850
4,559
1,184
3,434
3,288
Total
420
274
420
420
2,073
AEI 2017/RSU4
Min
MTB (2016-2018)²
750
750
750
750
750
Base Salary
Max
Target
Target
2016
2015
2016
2016
2015
Payout¹
Grant
Grant
Actual
Dr. Helga Jung (Appointed: 01/2012)
INDIVIDUAL REMUNERATION: 2016 AND 2015
€ THOU (total might not sum up due to rounding)
27
B - Corporate Governance
Min
750
MTB (2013-2015)3
750
14
Deferred Compensation
889
758
889
1,125
750
750
Annual Bonus
Annual Variable Compensation
764
764
764
764
764
764
764
Total fixed compensation
14
14
14
14
14
14
Perquisites
Max
3- The payout 2015 figure includes the 2015 allocation and the accruals from the performance years 2013
and 2014, as adjusted by the sustainability assessment. The MTB 2013-2015 was paid out in spring 2016.
4-Payout is capped at 200% above grant price. The relevant share price used to determine the fair market
value, and hence the final number of RSUS granted, and the 200% cap are only available after sign-off by
the external auditors.
750
28
6-Pension Service Cost in accordance with IAS 19: represents the company cost not the actual entitlement
nor a payment, however, according to the German Corporate Governance Code the Pension Service Cost
is to be included in all columns.
Annual Report 2009 (starting on page 17). Whereas the GEI/RSU grants are automatically exercised at the
vesting date, the GEI/SAR grants are exercised by the Board member within the exercise period following
the vesting date. Hence, the total payout from SARS depends on the individual decision by the Board
member. SARS are released to plan participants upon expiry of the vesting period, assuming all other
exercise hurdles are met. For SARS granted until and including 2008, the vesting period was two years and
the exercise period five years. SARS can be exercised on the condition that the price of the Allianz SE stock
is at least 20% above the strike price at the time of grant. During the term of the plan, at least once on five
consecutive trading days the Allianz SE stock must relatively appreciate at least 0.01 percentage points
ahead of the appreciation of the Dow Jones EURO STOXX Price Index (600).
5-The equity-related remuneration that applied before 2010 consisted of two vehicles, virtual stock awards
known as RSUs and virtual stock options known as "Stock Appreciation Rights" (SAR). Only RSUs have been
awarded as of 1 January 2010. The remuneration system valid until December 2009 is disclosed in the
2- The MTB figure included in the "Actual Grant" column shows the annual accrual.
1- In accordance with the German Corporate Governance Code, the annual bonus disclosed for perfor-
mance year 2016 is paid in 2017 and for performance year 2015 in 2016. The payments for equity related
deferred compensation (GEI and AEI), however, are disclosed for the year in which the actual payment
was made.
2,233
3,086
4,179
4,635
1,260
3,510
3,424
482
397
482
482
482
482
397
1,751
2,689
3,697
10-Jacqueline Hunt received an off-cycle one time payment of € 120 THOU to reimburse her for relocation
4,153
9- Jacqueline Hunt joined Allianz on 1 July 2016. She received a pro-rated base salary, annual bonus, MTB
tranche, and equity-related compensation. The different pro-rated amounts for base salary and target
amounts result from different pro-rating methodologies, which are generally applied. In addition to the
amounts disclosed in the table, Jacqueline Hunt received a buyout award of € 170 THOU to compensate
for forfeited grants from her previous employer.
7- For performance year 2015, Oliver Bäte's base salary and his target for the annual bonus, the MTB tranche,
and equity-related compensation are disclosed based on his pro-rated base salary of € 750 THOU until
6 May 2015 and his pro-rated base salary of € 1,125 THOU from 7 May 2015. The different pro-rated
amounts for base salary and target amounts result from different pro-rating methodologies, which are
generally applied.
456
456
377
566
456
377
566
456
1,642
511
2,209
1,880
159
159
159
159
1,801
670
2,368
2,039
967
159
1,126
8- In addition to the amounts disclosed in the table, Sergio Balbinot received a buyout award of € 6 MN to
compensate for forfeited grants from his previous employer: € 3 MN in cash and € 3 MN in RSUS. 50% of
the cash amount was paid in February 2015 and 50% was paid in 2016 and are subject to clawback.
778
3,028
3,027
Annual Bonus
Annual Variable Compensation
778
777
778
778
778
778
777
Total fixed compensation
28
27
28
28
28
28
27
Perquisites
750
750
750
750
750
750
750
1,125
973¦
Total
Pensions Service Cost
Total
GEI 2008/SAR5
GEI 2010/SAR5
GEI 2010/RSU4
AEI 2011/RSU4
AEI 2012/RSU4
750
973
1,125
Base Salary
750
750
973
1,125
750
AEI 2016/RSU4
AEI 2017/RSU4
MTB (2013-2015)3
MTB (2016-2018)²
Deferred Compensation
973
956
956
750
DESCRIPTION OF THE FUNCTIONS OF THE BOARD OF
MANAGEMENT AND THE SUPERVISORY BOARD AND OF
THE COMPOSITION AND FUNCTIONS OF THEIR
2,130
Annual bonus (short-term): A cash payment which rewards the
achievement of quantitative and qualitative targets for the
respective financial year and is paid in the year following the per-
formance year. Under the "Inclusive Meritocracy" approach, the
cultural change element of the Renewal Agenda, Group-related
targets account for 50% (equally divided between annual operat-
ing profit and annual net income). The other 50% are linked to
individual performance, which consists of quantitative and qual-
itative criteria. For members of the Board of Management with
business division responsibilities, respective quantitative targets
comprise operating profit, net income, Property-Casualty reve-
nues and Life New Business Value. For members of the Board of
Management with a functional focus, the divisional quantitative
targets are determined based on their key responsibilities. The
Chairman of the Allianz SE Board of Management does not have
divisional quantitative targets. In all cases, the personal contribu-
tion to the Renewal Agenda is assessed alongside behavioral
24
24
Annual Report 2016 - Allianz Group
B - Corporate Governance
aspects. The latter is framed in a common standard ("People Let-
ter") designed to drive cultural change across the Group, namely:
Customer and Market Excellence,
Collaborative Leadership,
Entrepreneurship,
Trust.
Variable remuneration is designed to balance short-term perfor-
mance, longer-term success and sustained value creation. Each year,
the Supervisory Board agrees with members of the Board of Manage-
ment on performance targets for the variable remuneration com-
ponent. These are documented for the upcoming financial year.
Every three years, the MTB sustainability criteria, as described on
> page 25, are set for the following mid-term period. All variable
awards are made under the rules and conditions of the "Allianz Sus-
tained Performance Plan" (ASPP). The grant of variable remuneration
components is related to performance and can vary between 0% and
150% of the respective target values. If performance was rated at 0%
no variable component would be granted. Consequently, the mini-
mum total direct compensation for a regular member of the Board of
Management equals the base salary of € 750 THOU (excluding perqui-
sites and pension contributions). The maximum total direct com-
pensation (excluding perquisites and pension contributions) is
€ 4,125 THOU: base salary € 750 THOU plus € 3,375 THOU (150% of the sum
of all three variable compensation components at target).
Details on the variable compensation components:
To support the assessment of People Letter behaviors, a so-called
"multi-rater" process has been introduced. Each member of the
Board of Management collects feedback from the Chairman of
the Allianz SE Board of Management, the other Board members
and direct reports. The resulting analysis supports the assess-
ment of the behavioral part of performance and additionally
provides a sound basis for feedback and personal development
discussions. Based on the 2016 target achievement for the Group,
the business division/corporate functions, and the qualitative
performance, the total annual bonus awards ranged between
100% and 131% of the target, with an average bonus award of 123%
of the target.
Performance indicators:
Sustainable improvement/stabilization of Return on Equity
(Return on Equity excluding unrealized gains/losses on
bonds net of shadow accounting),
Compliance with economic capitalization guidance (capi-
talization level and volatility limit);
Health indicators (aligned with the Renewal Agenda):
-
True Customer Centricity,
Digital by Default,
Technical Excellence,
MTB (mid-term): A deferred award which reflects the achieve-
ment of the annual targets by accruing an amount identical to
the annual bonus. The payout of the award at the end of a three-
year cycle is subject to a sustainability assessment for these three
years. The MTB 2016-2018 comprises sustainability (performance
and health) indicators, which are aligned with the Group's external
targets:
Growth Engines,
VARIABLE REMUNERATION
BASE SALARY
B - Corporate Governance
23
B - Corporate Governance
Remuneration Report
This report covers the remuneration arrangements for the Board of
Management and the Supervisory Board of Allianz SE.
The report has been prepared in accordance with the require-
ments of the German Commercial Code (HGB), The German Accounting
Standard 17 and the International Financial Reporting Standards (IFRS).
It also takes into account the relevant regulatory provisions and the
recommendations of the German Corporate Governance Code.
Allianz SE Board of Management
remuneration
GOVERNANCE SYSTEM
The base salary is the fixed remuneration component, expressed as
an annual cash sum and paid in twelve monthly installments.
The remuneration of the Board of Management is decided upon by
the entire Supervisory Board, based on proposals prepared by the
Personnel Committee. If required, outside advice is sought from
independent external consultants. The Personnel Committee and
the Supervisory Board consult with the Chairman of the Board of
Management, as appropriate, in assessing the performance and
remuneration of members of the Board of Management. The Chair-
man of the Board of Management is not present when his own remu-
neration is discussed. Regarding the activities and decisions taken by
the Personnel Committee and the Supervisory Board, please refer to
the Supervisory Board Report starting on > page 5.
Support of the Group's strategy: Performance targets reflect the
Allianz Group's business strategy.
Alignment of pay and performance: The performance-based,
variable component forms a significant portion of the overall
remuneration.
Variable remuneration focused on sustainability and aligned with
shareholder interests: Two thirds of the variable remuneration
reflect longer-term performance. One third is a deferred payout
after three years, based on a sustainability assessment covering
the three-year period. The other third rewards the sustained per-
formance of the share price with a deferred payout four years
after grant.
The structure, weighting and level of the Allianz SE Board of Manage-
ment remuneration is decided upon by the Supervisory Board. Remu-
neration survey data of DAX 30 companies and international insur-
ance peers is provided by external consultants. Compensation levels
are around the third quartile of this group, which we deem appropriate
given the relative size, complexity and sustained performance of
Allianz within that peer group. The structure of the remuneration is
more strongly weighted towards variable, longer-term components
than it is in most DAX 30 companies. Remuneration and benefit
arrangements are also periodically compared with best practices. In
addition, the Supervisory Board takes into account remuneration
levels within the Allianz Group when reviewing the adequateness and
appropriateness of the Board of Management's remuneration.
REMUNERATION STRUCTURE,
COMPONENTS AND TARGET SETTING PROCESS
There are four main remuneration components. Each has the same
weighting within annual target remuneration: base salary, annual
bonus, annualized mid-term bonus (MTB), and equity-related remu-
neration. The target compensation of each variable component does
not exceed the base salary, with the total target variable compensation
not exceeding three times the base salary. In addition, Allianz offers
pensions and similar benefits and perquisites.
REMUNERATION PRINCIPLES AND MARKET POSITIONING
The key principles of Board of Management remuneration are as
follows:
Inclusive Meritocracy (including gender diversity - women
in leadership).
Equity-related remuneration (long-term): A virtual share award,
known as "Restricted Stock Units" (RSUS). The grant value of the
RSUS allocated equals the annual bonus of the performance year.
The number of RSUS allocated is derived from dividing the grant
value by the fair market value of an RSU at the time of grant.
The fair market value is calculated based on the ten-day
average Xetra closing price of the Allianz stock following the
financial press conference on the annual results. As RSUs are vir-
tual stocks without dividend payments, the average Xetra closing
price is reduced¹ by the net present value of the expected future
Payout¹
2015
2016
2016
2015
2016
Target
Target
Grant
Min
Base Salary
Perquisites
994
15
1,125
1,125
1,125
1,125
994
Max
Grant
Actual
Oliver Bäte? (Appointed: 01/2008; CEO since 05/2015)
dividend payments during the vesting period. The expected divi-
dend stream is discounted with the respective swap rates as of
the valuation day. Following the end of the four-year vesting
period, the company makes a cash payment based on the number
of RSUS granted and the ten-day average Xetra closing price of the
Allianz stock following the annual financial press conference in
the year of expiry of the respective RSU plan. The RSU payout is
capped at 200% above grant price to avoid extreme payouts². Out-
standing RSU holdings are forfeited should a Board member leave
at his/her own request or be terminated for cause.
Variable remuneration components may not be paid, or payment
may be restricted, in the case of a breach of the Allianz Code of Con-
duct, risk limits, or compliance requirements. Additionally, a reduc-
tion or cancellation of variable remuneration may occur if the super-
visory authority (BaFin) requires this in accordance with its statutory
powers.
PENSIONS AND SIMILAR BENEFITS
To provide competitive and cost-effective retirement and disability
benefits, company contributions to the current pension plan “My
Allianz Pension" are invested in a fund with a guarantee for the con-
tributions paid, but no further interest guarantee. On retirement, the
accumulated capital is paid out as lump sum or can be converted into
a lifetime annuity. Each year the Supervisory Board decides whether
and to what extent a budget is provided, also taking into account the
targeted pension level. This budget includes a risk premium paid to
cover death and disability. The earliest age a pension can be drawn is
62, except for cases of occupational or general disability for medical
reasons. In these cases, it may become payable earlier and an
increase by projection may apply. In the case of death, a lump sum,
which can be converted into an annuity, will be paid to dependents.
Should Board membership cease before retirement age for other
reasons, the accrued pension rights are maintained if vesting require-
ments are met.
For members of the Allianz SE Board of Management who were
born before 1 January 1958, and for the rights accrued before 2015, the
guaranteed minimum interest rate remains at 2.75% and the retire-
ment age is still 60.
From 1 January 2005 until 31 December 2014, most Board of Man-
agement members have participated in a contribution-based system
which was frozen as of 31 December 2014 and is now only covering
disability and death. Before 2005 a defined benefit plan provided fixed
benefits which were not linked to base salary increases. Benefits gen-
erated under this plan were frozen at the end of 2004. Additionally,
most Board members participated in the Allianz Versorgungskasse
VVaG, a contribution-based pension plan, and the Allianz Pensions-
verein e.V. which were closed for new entries as of 1 January 2015.
PERQUISITES
Perquisites mainly consist of contributions to accident and liability
insurances and the provision of a company car. Perquisites are not
linked to performance. Each member of the Board of Management is
responsible for the income tax on these perquisites. The Supervisory
Board regularly reviews the level of perquisites.
1- The fair market value of the RSUs is further subject to a small reduction of a few Euro cents due to the
200% cap on the RSU payout. This reduction is calculated based on a standard option pricing formula.
2-The relevant share price used to determine the final number of RSUS granted and the 200% cap is available
only after sign-off by the external auditors.
Annual Report 2016 - Allianz Group
25
B - Corporate Governance
REMUNERATION FOR 2016
The following remuneration disclosure is based on and compliant
with the German Corporate Governance Code and shows the indi-
vidual Board members' remuneration for 2015 and 2016, including
fixed and variable remuneration and pension service cost. The
"Grant" column below shows the remuneration at target and mini-
mum and maximum levels. The “Payout" column discloses the 2015
and 2016 payments. The base salary, annual bonus and perquisites
are linked to the reported performance years 2015 and 2016, whereas
the Group Equity Incentive (GEI) and Allianz Equity Incentive (AEI)
payouts result from grants related to the performance years
2008-2011. To enhance transparency remuneration related to the
performance year 2016, the additional column "Actual grant" includes
the 2016 fixed compensation, the annual bonus paid for 2016, the MTB
2016-2018 tranche accrued for the performance year 2016, and the
fair value of the RSU grant in 2017 for the performance year 2016.
INDIVIDUAL REMUNERATION: 2016 AND 2015
€ THOU (total might not sum up due to rounding)
Annual Report 2016 - Allianz Group
1,125
Under the Allianz Sustained Performance Plan (ASPP), Restricted
Stock Units (RSU) – i.e. virtual Allianz shares - are granted as a stock-
based remuneration component to senior management of the Allianz
Group worldwide. In addition, under the Group Equity Incentive (GEI)
scheme, Stock Appreciation Rights (SAR) – i.e. virtual options on
Allianz shares were also granted until 2010. Some of these are still
outstanding. The conditions for these RSU and SAR contain change-
of-control clauses, which apply if a majority of the voting share capital
in Allianz SE is acquired, directly or indirectly, by one or more third
parties who do not belong to the Allianz Group and which provide for
an exception from the usual vesting and exercise periods. The RSU
will be released, in line with their general conditions, by the company
for the relevant plan participants on the day of the change of control
without observing any vesting period that would otherwise apply. The
cash amount payable per RSU must equal the average market value
of the Allianz share and be equal to or above the price offered per
Allianz share in a preceding tender offer. In case of a change of control
as described above, SAR will be exercised, in line with their general
conditions, by the company for the relevant plan participants on the
day of the change of control, without observing any vesting period. By
providing for the non-application of the vesting period in the event of
a change of control, the terms take into account the fact that the con-
ditions under which the share price moves are very different when
there is a change of control.
remuneration for the remaining term of the service contract, but lim-
ited, for the purpose hereof, to three years, in the form of a one-off
payment. The one-off payment is based on the fixed remuneration
plus 50% of the variable remuneration, however, this basis being lim-
ited to the amount paid for the last fiscal year. To the extent that the
remaining term of the service contract is less than three years, the
one-off payment is generally increased in line with a term of three
years. This applies accordingly if, within two years of a change of con-
trol, a mandate in the Board of Management comes to an end and is
not extended; the one-off payment will then be granted for the period
between the end of the mandate and the end of the three-year period
after the change of control. For further details, please refer to the
Remuneration Report starting on ②> page 24.
The sustained success of the Allianz Group is based on the respon-
sible behavior of all Group employees, who embody trust, respect and
integrity. By means of the global compliance program coordinated by
its central compliance function, Allianz supports and follows interna-
tionally and nationally recognized guidelines and standards for rules-
compliant and value-based corporate governance. These include the
principles of the United Nations (UN Global Compact), the Guidelines
of the Organization for Economic Co-operation and Development
(OECD guidelines) for Multinational Enterprises, and European and
international standards on data and consumer protection, econom-
ic and financial sanctions and combating corruption, bribery, money
laundering and terrorism financing. Through its support for and
acceptance of these standards, Allianz aims to avoid the risks that
might arise from non-compliance. The central compliance function
is responsible - in close cooperation with local compliance depart-
ments - for ensuring the effective implementation and monitoring
of the compliance program within the Allianz Group, as well as for
investigating potential compliance infringements.
The standards of conduct established by the Allianz Group's
Code of Conduct for Business Ethics and Compliance are obligatory
for all employees worldwide. The Code of Conduct is available on our
website at www.allianz.com/corporate-governance.
Annual Report 2016 - Allianz Group
19
B - Corporate Governance
The Code of Conduct and the internal guidelines derived from it
provide all employees with clear guidance on behavior that lives up
to the values of the Allianz Group. In order to transmit the principles
COMPLIANCE PROGRAM
of the Code of Conduct and the internal compliance program based
on these principles, Allianz has implemented interactive training
programs around the world. These provide practical guidelines
which enable employees to come to their own decisions. The Code of
Conduct also forms the basis for guidelines and controls to ensure
fair dealings with Allianz Group customers (sales compliance).
A major component of the Allianz Group's compliance program
is a whistleblower system that allows employees to alert the rele-
vant compliance department confidentially about irregularities. No
employee voicing concerns about irregularities in good faith needs
to fear retribution, even if the concerns turn out to be unfounded at
a later date.
COMMITTEES
A description of the composition of the Supervisory Board and its
committees can be found on D①> page 9 and 11 of the Annual Report.
A description of the composition of the Board of Management can be
found on page 12, while the composition of the Committees of the
Board of Management is described in the Corporate Governance
Report starting on > page 14. This information is also available on
our website at www.allianz.com/corporate-governance.
A general description of the functions of the Board of Manage-
ment, the Supervisory Board and their committees can be found in
the Corporate Governance Report starting on ②> page 14, and on our
website at www.allianz.com/corporate-governance.
German Act on Equal Participation
of Women and Men in Executive Positions
in the Private and the Public Sector
To implement the German Act on Equal Participation of Women and
Men in Executive Positions in the Private and the Public Sector,
Allianz SE and the other German companies of the Allianz Group that
are either listed or subject to co-determination have set the following
targets for the percentage of women on the Board of Management
and the two management levels below the Board of Management,
which are to be achieved by 30 June 2017.
The Supervisory Board adopted a resolution in August 2015 set-
ting the target for the percentage of women on Allianz SE's Board of
Management at 11%. However, the Supervisory Board of Allianz SE had
additionally declared its intention to increase the percentage of
women on the Board of Management of Allianz SE to at least 20% by
the end of 2018. With the appointment of Ms. Jacqueline Hunt as of
1 July 2016 the share of women in the Board of Management is cur-
rently 22%. As a result, this broader aim has already been achieved as
well. The target quotas for the boards of management of the other
Allianz companies in Germany that are either listed or subject to co-
determination have been set at 18% on average.
The boards of managements of Allianz SE and the other German
Allianz companies that are either listed or subject to co-determina-
tion have set a target of at least 20% regarding the percentage of
women in the first and second management levels below the Board
of Management. This target is applicable provided that a higher share
has not already been reached in individual companies. Over the lon-
ger term, Allianz aims to fill with women at least 30% of the positions
at these two management levels.
There are legal provisions against corruption and bribery in
almost all countries in which Allianz has a presence. The global Anti-
Corruption Program of the Allianz Group ensures the continuous
monitoring and improvement of the internal anti-corruption con-
trols. More information on the Anti-Corruption Program can be found
in the Sustainability Report on our website at: :D:D:D:D: www.allianz.com/
sustainability.
§17 (2) of the German SE Implementation Act stipulates that as
of 1 January 2016, the share of women and men among the members
of the Supervisory Board of Allianz SE must each total to at least 30%.
The Supervisory Board currently in office fulfills this requirement
currently comprising four women (33%). If the Annual General Meet-
ing 2017 elects the Supervisory Board in accordance with the Super-
visory Board's nominations, this requirement will also remain ful-
filled in the future. The listed Oldenburgische Landesbank AG also
meets the statutory quota. The supervisory boards of the other, non-
listed German Allianz companies subject to co-determination have
set an average minimum share of 29% for the prescribed target quota
by the middle of 2017.
In addition, the quality of the internal control system is assessed
by the Allianz Group's internal audit staff. Internal Audit conducts
independent audit procedures, analyzing the structure and efficacy
of the internal control systems as a whole. It also examines the poten-
tial for additional value and improvement of our organization's
operations. Fully compliant with all international auditing principles
and standards, Internal Audit contributes to the evaluation and
improvement of the effectiveness of the risk management, control
and governance processes. Therefore, internal audit activities are
geared towards helping the company to mitigate risks and further
assist in strengthening its governance processes and structures.
INTERNAL CONTROL SYSTEMS
cost.
Annual Report 2016 - Allianz Group
B - Corporate Governance
Statement on Corporate Management pursuant
to § 315 (5) and § 289a of the HGB
The Statement on Corporate Management pursuant to § 315 (5) and Corporate governance practices
§ 289a of the German Commercial Code ("Handelsgesetzbuch- HGB")
forms part of the Group Management Report. According to § 317 (2),
sentence 4 of the HGB, this Statement does not have to be included
within the scope of the audit.
Declaration of Conformity with the
German Corporate Governance Code
On 15 December 2016, the Board of Management and the Supervisory
Board issued the following Declaration of Conformity of Allianz SE
with the German Corporate Governance Code (hereinafter the "Code"):
The Allianz Group has an effective internal control system for verify-
ing and monitoring its operating activities and business processes,
in particular the control of financial reporting. The requirements for
the internal control systems are essential not only for the survival of
the company, but also to maintain the confidence of the capital mar-
ket, our customers and the public. A comprehensive risk manage-
ment system regularly assesses the appropriateness of the internal
control system, taking into account not only qualitative and quanti-
tative guidelines, but also specific controls for individual business
activities. For further information on the risk organization and risk
principles, please refer to::: :::: page 62. For further information on the
internal Controls over Financial Reporting, please refer to > page 75.
DECLARATION OF CONFORMITY IN ACCORDANCE
"Declaration of Conformity by the Management Board and the Supervisory Board of
Allianz SE with the recommendations of the German Corporate Governance Code
Commission in accordance with § 161 of the German Stock Corporation Act (AktG)
Since the last Declaration of Conformity as of December 10, 2015, Allianz SE has
complied with all recommendations of the German Corporate Governance Code
in the version of May 5, 2015 and will comply with them in the future.
Munich, December 15, 2016
Allianz SE
For the Board of Management:
Signed Oliver Bäte
For the Supervisory Board:
Signed Dr. Helmut Perlet"
Signed Dr. Helga Jung
In addition, Allianz SE follows all the suggestions of the Code in its
5 May 2015 version.
The Declaration of Conformity and further information on cor-
porate governance at Allianz can be found on our website at ②> www.
allianz.com/corporate-governance.
The listed Group company Oldenburgische Landesbank AG
issued its own Declaration of Conformity in December 2016, which
states that Oldenburgische Landesbank AG complies with all of the
recommendations of the Code in the version of 5 May 2015.
WITH § 161 OF THE GERMAN STOCK CORPORATION ACT
20
20
Annual Report 2016 - Allianz Group
It may increase the company's share capital, on or before 6 May
2019, with the approval of the Supervisory Board, by issuing new reg-
istered no-par value shares against contributions in cash and/or in
kind, on one or more occasions:
Up to a total of € 550,000,000 (Authorized Capital 2014/1). In case
of a capital increase against cash contribution, the Board of Man-
agement may exclude the shareholders' subscription rights for
these shares with the consent of the Supervisory Board, (i) for
fractional amounts, (ii) in order to safeguard the rights pertaining
to holders of convertible bonds or bonds with warrants, including
mandatory convertible bonds, and (iii) in the event of a capital
increase of up to 10%, if the issue price of the new shares is not
significantly below the stock market price. The Board of Manage-
ment may furthermore exclude the shareholders' subscription
rights with the consent of the Supervisory Board, in the event of a
capital increase against contributions in kind.
Up to a total of € 13,720,000 (Authorized Capital 2014/11). The share-
holders' subscription rights can be excluded in order to issue the
new shares to employees of Allianz SE and its Group companies
as well as for fractional amounts.
The company's share capital is conditionally increased by up to
€ 250,000,000 (Conditional Capital 2010/2014). This conditional capital
increase will only be carried out to the extent that conversion or
option rights are exercised (or conversion obligations fulfilled)
resulting from bonds that have been issued by Allianz SE or its sub-
sidiaries based on the authorizations granted by the General Meeting
on 5 May 2010 and 7 May 2014.
The Board of Management may buy back and use Allianz shares
for other purposes until 6 May 2019 on the basis of the authorization
of the General Meeting of 7 May 2014 (§ 71 (1) No. 8 AktG). Together with
other treasury shares that are held by Allianz SE, or which are attribut-
able to it under §§ 71a et seq. AktG, such shares may not exceed 10%
of the share capital at any time. The shares acquired pursuant to this
authorization may be used, under exclusion of the shareholders' sub-
scription rights, for any legally admissible purposes, and in particular
those specified in the authorization. Furthermore, the acquisition of
treasury shares under this authorization may also be carried out
using derivatives such as put options, call options, forward purchases
or a combination thereof, provided such derivatives do not relate to
more than 5% of the share capital.
Domestic or foreign banks that are majority-owned by Allianz SE
may buy and sell Allianz shares for trading purposes (§ 71 (1) No. 7
and (2) AktG) under an authorization of the General Meeting valid
until 6 May 2019. The total number of shares acquired thereunder,
together with treasury shares held by Allianz SE or attributable to it
under §§ 71a et seq. AktG, shall at no time exceed 10% of the share
capital of Allianz SE.
ESSENTIAL AGREEMENTS OF ALLIANZ SE WITH CHANGE
OF CONTROL CLAUSES AND COMPENSATION AGREEMENTS
PROVIDING FOR TAKEOVER SCENARIOS
The following essential agreements of the company are subject to a
change of control condition following a takeover bid:
The Board of Management is authorized to issue shares as well as to
acquire and use treasury shares as follows:
Our reinsurance contracts, in principle, include a clause under
which both parties to the contract have an extraordinary termina-
tion right if and when the counterparty merges or its ownership
or control situation changes materially. Agreements with brokers
regarding services connected with the purchase of reinsurance
cover also provide for termination rights in case of a change of
control. Such clauses are standard market practice.
Shareholder agreements and joint ventures to which Allianz SE is
a party often contain change-of-control clauses that provide, as
the case may be, for the termination of the agreement, or for put
or call rights that one party can exercise with regard to the joint
venture or the target company, if there is a change of control of
the other party.
The framework agreements between Allianz SE and the subsi-
diaries of various car manufacturers relating to the distribution
of car insurance by the respective car manufacturers each include
a clause under which each party has an extraordinary termina-
tion right in case there is a change of control of the other party.
Bilateral credit agreements in some cases provide for termina-
tion rights if there is a change of control, mostly defined as the
acquisition of at least 30% of the voting rights within the meaning
of § 29(2) of the German Takeover Act ("Wertpapiererwerbs- und
Übernahmegesetz -WpÜG"). If such termination rights are exer-
cised, the respective credit lines have to be replaced by new
credit lines under conditions then applicable.
The company has entered into the following compensation agree-
ments with members of the Board of Management and certain
employees providing for the event of a takeover bid:
A change-of-control clause in the service contracts of the mem-
bers of Allianz SE's Board of Management provides that, if within
twelve months after the acquisition of more than 50% of the compa-
ny's share capital by one shareholder or several shareholders acting
in concert (change of control) the appointment as a member of the
Board of Management is revoked unilaterally by the Supervisory
Board, or if the mandate is ended by mutual agreement, or if the
Management Board member resigns because his or her responsibi-
lities as a Board member are significantly reduced through no fault
of the Board member, he or she shall receive his or her contractual
22
22
Annual Report 2016 - Allianz Group
Allianz SE is also party to various bancassurance distribution
agreements for insurance products in various regions. These dis-
tribution agreements normally include a clause under which the
parties have an extraordinary termination right in case there is a
change of control of the other party's ultimate holding company.
AUTHORIZATION OF THE BOARD OF MANAGEMENT
TO ISSUE AND REPURCHASE SHARES
B - Corporate Governance
21
B - Corporate Governance
Takeover-related Statements and Explanations
The following information is given pursuant to § 289 (4) and § 315 (4)
of the German Commercial Code (“Handelsgesetzbuch – HGB") and
§ 176 (1) of the German Stock Company Act ("Aktiengesetz – AktG”).
COMPOSITION OF SHARE CAPITAL
As of 31 December 2016, the share capital of Allianz SE was € 1,169,920,000.
It was divided into 457,000,000 registered and fully paid-up shares with
no-par value and a corresponding share capital amount of € 2.56 per
share. All shares carry the same rights and obligations. Each no-par
value share carries one vote.
RESTRICTIONS ON VOTING RIGHTS AND
SHARE TRANSFERS; EXERCISE OF VOTING RIGHTS
IN CASE OF EMPLOYEE EQUITY PARTICIPATIONS
Shares may only be transferred with the consent of the company. An
approval duly applied for may only be withheld if it is deemed neces-
sary in the company's interest on exceptional grounds. The applicant
will be informed of the reasons.
Shares acquired by employees of the Allianz Group as part of the
Employee Stock Purchase Plan are, in principle, subject to a one-year
lock-up period. Outside Germany, the lock-up period may in some
cases be up to five years. In some countries, in order to ensure that the
lock-up period is observed, the employee shares are held throughout
that period by a bank, another natural person or a legal entity acting
as a trustee. Nevertheless, employees may instruct the trustee to exer-
cise voting rights, or have power of attorney granted to them to exer-
cise such voting rights. Lock-up periods contribute to the Employee
Stock Purchase Plan's aims of committing employees to the company
and letting them benefit from the performance of the share price.
INTERESTS IN THE SHARE CAPITAL
EXCEEDING 10% OF THE VOTING RIGHTS
We are not aware of any direct or indirect interests in the share capital
of Allianz SE that exceed 10% of the voting rights.
SHARES WITH SPECIAL RIGHTS
CONFERRING POWERS OF CONTROL
There are no shares with special rights conferring powers of control.
LEGAL AND STATUTORY PROVISIONS APPLICABLE
TO THE APPOINTMENT AND REMOVAL OF MEMBERS OF
THE BOARD OF MANAGEMENT AND TO AMENDMENTS
OF THE STATUTES
The Supervisory Board appoints the members of Allianz SE's Board of
Management for a maximum term of five years (Articles 9(1), 39(2)
and 46 of the SE Regulation, §§ 84, 85 AktG and § 5 (3) of the Statutes).
Reappointments, for a maximum of five years each, are permitted. A
simple majority of the votes cast in the Supervisory Board is required
to appoint members of the Board of Management. In the case of a tie
vote, the Chairperson of the Supervisory Board, who pursuant to
Article 42 of the SE Regulation must be a shareholder representative,
shall have the casting vote (§ 8 (3) of the Statutes). If the Chairperson
does not participate in the vote the Vice Chairperson shall have the
casting vote, provided he or she is a shareholder representative. A
Vice Chairperson who is an employee representative has no casting
vote (§ 8 (3) of the Statutes). If a required member of the Board of Man-
agement is missing, in urgent cases the courts must appoint such
member upon the application of an interested party (§ 85 AktG). The
Supervisory Board may dismiss members of the Board of Manage-
ment if there is an important reason (§ 84 (3) AktG).
According to §5 (1) of the Statutes, the Board of Management
shall consist of at least two persons. Apart from that, the Supervisory
Board determines the number of members. The Supervisory Board
has appointed a Chairman of the Board of Management pursuant to
§ 84(2) AktG.
German insurance supervisory law requires that members of the
Board of Management have the reliability and professional compe-
tence needed to manage an insurance company. A person cannot
become a member of the Board of Management if he or she is already
a manager of two other insurance undertakings, pension funds,
insurance holding companies or insurance special purpose vehicles.
However, the supervisory authority may permit more than two such
mandates if they are held within the same group (§ 24(3) of the German
Insurance Supervision Act ("Versicherungsaufsichtsgesetz – VAG”)).
The Federal Financial Services Supervisory Authority ("Bundesanstalt
für Finanzdienstleistungsaufsicht – BaFin”) must be notified about
the intention of appointing a Board of Management member pursuant
to § 47 No. 1 VAG.
Amendments to the Statutes must be adopted by the General
Meeting. § 13 (4) of the Statutes of Allianz SE stipulates that, unless this
conflicts with mandatory law, changes to the Statutes require a two-
thirds majority of the votes cast, or, if at least one half of the share
capital is represented, a simple majority of the votes cast. The Sta-
tutes thereby make use of the option set out in § 51 of the SE Imple-
mentation Act (“SE-Ausführungsgesetz – SEAG”), which is based upon
Article 59 (1) and (2) of the SE Regulation. A larger majority is required,
inter alia, for a change in the corporate object or the relocation of the
registered office to another E.U. member state (§ 51 SEAG). The Super-
visory Board may alter the wording of the Statutes (§ 179 (1) AktG and
§ 10 of the Statutes).
Annual Report 2016 - Allianz Group
-
566
30
1,009
375
375
375
33
32
32
32
32
375
33
136 10
136 10
136 10
136 10
136 10
783
782
782
32
782
375
750
2015
20 16
2016
2015
2016
Target
Target
Min
750
Max
Target
Min
Max
750
750
750
750
750
Target
782
783
782
782
4,157
3,730
2,781
1,765
222
365
365
3,032
365
222
365
3,255
3,397
1,147
4,522
4,095
3,003
365
3,033
750
983
511
511
511
511
511
750
750
1,125
983
999
983
377
750
1,125
983
750
999
750
1,125
2016
Total fixed compensation
2015
2016
AEI 2016/RSU4
AEI 2012/RSU4
AEI 2011/RSU4
GEI 2010/RSU4
GEI 2010/SAR5
GEI 2008/SAR5
Total
Pensions Service Cost
AEI 2017/RSU4
Total
1,688
1,474
996
3,516
1,125
1,688
1,474
996
1,125
1,334
MTB (2013-2015)³
Deferred Compensation
1,155
30
1,155
30
30
15
30
1,155
1,155
MTB (2016-2018)2
1,009
Annual Variable Compensation
Annual Bonus
996
1,125
1,688
1,474
1,260
1,474
1,155
1,704
916
263
3- The payout 2015 figure includes the 2015 allocation and the accruals from the performance years 2013
and 2014, as adjusted by the sustainability assessment. The MTB 2013-2015 was paid out in spring 2016.
4-Payout is capped at 200% above grant price. The relevant share price used to determine the fair market
value, and hence the final number of RSUS granted, and the 200% cap are only available after sign-off by
the external auditors.
5-The equity-related remuneration that applied before 2010 consisted of two vehicles, virtual stock awards
known as RSUS and virtual stock options known as "Stock Appreciation Rights" (SAR). Only RSUS have been
awarded as of 1 January 2010. The remuneration system valid until December 2009 is disclosed in the
Annual Report 2009 (starting on page 17). Whereas the GEI/RSU grants are automatically exercised at the
vesting date, the GEI/SAR grants are exercised by the Board member within the exercise period following
the vesting date. Hence, the total payout from SARS depends on the individual decision by the Board
member. SARS are released to plan participants upon expiry of the vesting period, assuming all other
exercise hurdles are met. For SARS granted until and including 2008, the vesting period was two years and
the exercise period five years. SARS can be exercised on the condition that the price of the Allianz SE stock
is at least 20% above the strike price at the time of grant. During the term of the plan, at least once on five
consecutive trading days the Allianz SE stock must relatively appreciate at least 0.01 percentage points
ahead of the appreciation of the Dow Jones EURO STOXX Price Index (600).
6-Pension Service Cost in accordance with IAS 19: represents the company cost not the actual entitlement
nor a payment, however, according to the German Corporate Governance Code the Pension Service Cost
is to be included in all columns.
26
Annual Report 2016 - Allianz Group
B - Corporate Governance
Sergio Balbinot (Appointed: 01/2015)
2- The MTB figure included in the "Actual Grant" column shows the annual accrual.
Jacqueline Hunt⁹ (Appointed: 07/2016)
Actual
Grant
Grant
Payout¹
Grant
Grant
Payout¹
2015
Actual
1- In accordance with the German Corporate Governance Code, the annual bonus disclosed for perfor-
mance year 2016 is paid in 2017 and for performance year 2015 in 2016. The payments for equity related
deferred compensation (GEI and AEI), however, are disclosed for the year in which the actual payment
was made.
4,588
9,151
3,997
4,530
1,155
6,219
5,576
8,668
3,963
483
625
625
625
625
483
625
4,480
5,155
1,780
6,844
6,201
2016
Annual Report 2016 - Allianz Group
661
B - Corporate Governance
C
C
M
366.7
6.7
160.0
C
200.0
C
C
C
C
M
fees remuneration
2016
Total
C
200.0
150.0
2015
M
C
254.5
4.5
2015
100.0
2016
M
C
366.7
6.7
160.0
150.0
Attendance
Committee
remuneration
Fixed
remuneration
The total remuneration for all Supervisory Board members, including
attendance fees, amounted to € 2,025 THOU in 2016 (2015: € 2,021 THOU).
The following table shows the individual remuneration for 2016 and
REMUNERATION FOR 2016
B - Corporate Governance
33
Annual Report 2016 - Allianz Group
In addition to the fixed and committee-related remuneration, mem-
bers of the Supervisory Board receive an attendance fee of € 750 for
each Supervisory Board or committee meeting they attend. Should
several meetings be held on the same or consecutive days, the atten-
dance fee will be paid only once. Allianz SE reimburses the members
of the Supervisory Board for their out-of-pocket expenses and the VAT
payable on their Supervisory Board activity. For the performance of
2015:
40
80
40
Member
Chair
ATTENDANCE FEES AND EXPENSES
Audit Committee
20
40
INDIVIDUAL REMUNERATION: 2016 AND 2015
€ THOU (total might not sum up due to rounding)
Committees¹
S
R
P
N
A
Gabriele Burkhardt-Berg
Christine Bosse
Dante Barban
(Vice Chairman)
Rolf Zimmermann
(Vice Chairman)
Dr. Wulf H. Bernotat
(Chairman)
Dr. Helmut Perlet
Members of the Supervisory Board
100.0
4.5
254.5
M
124.5
4.5
20.0
100.0
2015
M
Jean-Jacques Cette
124.5
20.0
100.0
2016
M
145.2
5.2
4.5
M
2016
100.0
2.2
13.3
66.6
2016
M
Dr. Friedrich Eichiner²
146.0
6.0
40.0
100.0
2015
M
146.0
6.0
40.0
40.0
Personnel Committee, Standing
Committee, Risk Committee
100.0
M
M
195.2
5.2
40.0
150.0
2015
2016
M
194.5
4.5
40.0
150.0
2016
M
M
100.0
20.0
4.5
M
144.5
4.5
40.0
100.0
2016
M
M
124.5
4.5
20.0
100.0
2015
M
124.5
2015
Committee
€ THOU
COMMITTEE-RELATED REMUNERATION
2016
Dr. Werner Zedelius
1,190
282
1
8
225
4
2015
1,842
479
10
2
477 1,832
278 1,181
207
6,385
431 5,090
146
141
2016
Dr. Maximilian Zimmerer
398
5,751
213
225
2015
12,375
661
678
14
222
9
2016
4,078
Dr. Dieter Wemmer
397
120
2016
Dr. Axel Theis
1,884
283
1
107
23
1,860
278
2015
368
3
357
5
3,422
2015
120
722
78
214
10
7,493
482
774
25
233
9
535
334
6 2,528
199 2,450
3,085
110
6,471
82.1
2015
150
1. is calculated on the basis of the previous year's annual base salary
plus 50% of the target variable remuneration (annual bonus,
accrued MTB and equity-related remuneration: For a Board mem-
ber with a fixed base salary of € 750 THOU, the annual compensa-
tion would amount to € 1,875 THOU. Hence, he/she would receive
a maximum severance payment of € 3,750 THOU) and
Whereby the annual compensation:
Payments to Board members for early termination with a remaining
term of contract of more than two years are capped at two years' com-
pensation.
Severance payment cap
Where an Allianz pension is immediately payable, transition
payment amounts are set off accordingly.
The payment is calculated based on the last base salary (paid for
a period of six months) and 25% of the target variable remuneration
at the date when notice is given. A Board member with a base salary
of € 750 THOU would receive a maximum of € 937.5 THOU.
2. shall not exceed the latest year's actual total compensation.
Transition payment (appointment before 1 January 2010)
Board members receiving a transition payment are subject to a six-
month non-compete clause.
TERMINATION OF SERVICE -
Board members who were appointed before 1 January 2011 are
eligible to use a company car for a period of one year after their
retirement.
Contracts do not contain provisions for any other cases of early ter-
mination from the Board of Management.
B - Corporate Governance
Annual Report 2016 - Allianz Group
32
DETAILS OF THE PAYMENT ARRANGEMENTS
If the remaining term of contract is less than two years, the payment
is pro-rated according to the remaining term of the contract.
Change of control
In case of early termination as a result of a change of control, sever-
ance payments made to Board members generally amount to three
years' compensation (annual compensation as defined above) and
shall not exceed 150% of the severance payment cap (a Board mem-
ber with a base salary of € 750 THOU would receive a maximum of
€ 5,625 THOU).
The Chairperson and members of the Supervisory Board committees
receive additional committee-related remuneration. The committee-
related remuneration is as follows:
COMMITTEE-RELATED REMUNERATION
The remuneration of a Supervisory Board member consists of a fixed
cash amount paid after the end of each business year for services
rendered over that period. As in 2015, a regular Supervisory Board
member receives a fixed remuneration of € 100 THOU per year. Each
Vice Chairperson receives € 150 THOU and the Chairperson € 200 THOU.
FIXED ANNUAL REMUNERATION
REMUNERATION STRUCTURE AND COMPONENTS
The remuneration structure, which comprises fixed and committee-
related remuneration only, was approved by the Annual General
Meeting 2011 and is laid down in the Statutes of Allianz SE.
Set a remuneration structure to allow for proper oversight of busi-
ness as well as for adequate decisions on executive personnel and
remuneration.
Set a remuneration structure that takes into account the indi-
vidual functions and responsibilities of Supervisory Board mem-
bers, such as chair, vice chair or committee mandates.
Set total remuneration at a level aligned with the scale and scope
of the Supervisory Board's duties, and appropriate to the com-
pany's activities and business and financial situation.
REMUNERATION PRINCIPLES
The remuneration of the Supervisory Board is governed by the Statutes
of Allianz SE and the German Stock Corporation Act. The structure of
the Supervisory Board's remuneration is regularly reviewed with
respect to German, European and international corporate gover-
nance recommendations and regulations.
Remuneration of the Supervisory Board
The remuneration of the new regular member of the Board of Man-
agement, Dr. Günther Thallinger, has been set at the same level as for
the other regular members of the Board of Management.
OUTLOOK FOR 2017
INTERNAL AND EXTERNAL BOARD APPOINTMENTS
When a member of the Board of Management holds an appointment
in another company within the Allianz Group, the full remuneration
amount is transferred to Allianz SE. In recognition of the benefits to the
organization, Board of Management members are allowed to accept
a limited number of non-executive supervisory roles in appropriate
external organizations. In these cases, 50% of the remuneration
received is paid to Allianz SE. A Board member retains the full remu-
neration only when the Supervisory Board qualifies the appointment
as a personal one. Remuneration paid by external organizations is
shown in the annual reports of the companies concerned. The remu-
neration relating to the external appointment is set by the governing
body of the relevant organization.
MISCELLANEOUS
32
161
3. Special terms, also compliant with the German Corporate Gover-
nance Code, apply if service is ended as a result of a “change of
control". This requires that a shareholder of Allianz SE, acting
alone or together with other shareholders, holds more than 50% of
voting rights in Allianz SE.
ment.
300
214
9
519
327
10,746
938
646
26
203
9
4,151
2,783
2,672
5
191
3,897
641
786 8,532
9
196
1. Board members who were appointed before 1 January 2010 – and
who have served a term of at least five years - are eligible for a six-
month transition payment after leaving the Board of Manage-
Arrangements for termination of service including retirement are as
follows:
1- The 2015 amount includes bonus payments made to Clement Booth in 2015 which were already shown
as variable compensation for 2014. The amount shown for 2016 excludes compensation that was paid for
active Board membership and disclosed as compensation of the respective performance year.
Board of Management contracts are limited to a period of five years.
For new appointments, in compliance with the German Corporate
Governance Code, a shorter period is typical.
TERMINATION OF SERVICE
LOANS TO MEMBERS OF THE BOARD OF MANAGEMENT
As of 31 December 2016, there were no outstanding loans granted by
Allianz Group companies to members of the Board of Management.
In 2016, remuneration and other benefits totaling € 7 MN (2015: € 7 MN)¹
were paid to former members of the Board of Management and
dependents, while reserves for current pension obligations and
accrued pension rights totaled € 126 MN (2015: € 122 MN).
7-As Jay Ralph left Allianz on 1 July 2016, his employer-financed DBO of €2,437 THOU (thereof €1,755 THOU
for the frozen DB-Pension-Plan, € 636 THOU for the contribution based pension plan and € 25 THOU for the
Current Pension Plan, AVK/APV) is covered under former Board members.
4-Expected annual pension payment at assumed retirement age (age 60), excluding current pension plan.
5-SC=service cost. Service costs are calculatory costs for the DBO related to the reported business year.
6-DBO = defined benefit obligation, end of year. The figures show the obligation for Allianz resulting from
defined benefit plans taking into account realistic assumptions with regard to interest rate, dynamics and
biometric probabilities.
3- For details on the transition payment, see section "Termination of service". In any event a death benefit
is included.
2-Plan participants contribute 3% of their relevant salary to the AVK. For the AVK the minimum guaranteed
interest rate is 2.75%-3.50% depending on the date of joining Allianz. In general, the company funds the
balance required via the APV. Before Allianz's founding of the APV in 1998, both Allianz and the plan par-
ticipants were contributing to the AVK.
1-The service cost of the frozen contribution-based pension plan reflects the continued death and disability
cover.
386 7,422
656
36
2. Severance payments made to Board members in case of an early
termination comply with the German Corporate Governance
Code.
2015
Ira Gloe-Semler³
Martina Grundler4
Morocco
◉
Mali
Pakistan
■
Madagascar
"
Malaysia
Kenya
Laos
Ivory Coast
--
Philippines
Singapore³
Hong Kong3
Indonesia
Japan³
◉
--
Senegal
Sri Lanka
Latin America
Spain
Portugal
Iberia
Luxembourg
Germany
France
Europe
--
--
North and Latin America
United States
Canada
Brazil
ASSET MANAGEMENT
INSURANCE IBERIA & LATIN AMERICA
--
India
Taiwan
Thailand
■
Togo
Brunei³
China
Argentina
Allianz Worldwide Partners
INSURANCE ASIA PACIFIC
Congo Brazzaville
Luxembourg
■■The Netherlands
Belgium
-
France
---
Middle East and North Africa
Turkey
Greece
■■■ Italy
Europe
INSURANCE WESTERN & SOUTHERN
EUROPE, INSURANCE MIDDLE EAST,
AFRICA, INDIA
MARKET PRESENCE OF OUR BUSINESS OPERATIONS¹
Worldwide presence and business segments Our steering
--
Egypt
Lebanon
US LIFE INSURANCE
United States
GLOBAL INSURANCE LINES &
ANGLO MARKETS
Central Africa
Cameroon
Burkina Faso
--
Benin
Africa
--
Saudi Arabia
ALLIANZ WORLDWIDE PARTNERS
Ukraine
Russia
Corporate & Specialty
Credit Insurance
Reinsurance
Allianz Global
Ireland
United Kingdom
Australia
Ghana
C - Group Management Report
Brazil
Colombia
Low-carbon economy: supporting renewable energy and decarbon-
ization through our investments; providing green insurance solutions;
reducing our environmental footprint.
Social inclusion: supporting the social inclusion of children and youth
through our Future Generations program; developing solutions for
customers in emerging markets; promoting diversity and wellbeing
among our employees.
Business integrity: integrating environmental, social and governance
(ESG) issues across our investment and insurance businesses; building
trust through transparency, responsible sales, and data privacy.
In 2016, we surveyed over 6,000 stakeholders to identify our most
material issues as well as the relative importance of the solutions we
provide. The results show that the most important megatrends and
risks Allianz faces across those target groups and countries surveyed
are climate change & environment, personal customer safety, digita-
lization, societal change, and fiscal crisis. We will continue to integrate
our stakeholders' views in both our sustainability strategy and our
reporting approach.
For reporting purposes, we organize our approach around
Allianz's five key roles as sustainable insurer, responsible investor,
trusted company, attractive employer, and committed corporate
citizen.
Please refer to our 2016 Group Sustainability Report (to be
published on 5 April 2017) for full details of our corporate responsi-
bility strategy, approach and performance: :D:D:D:D:D :: www.allianz.com/
sustainability.
Our Corporate Responsibility Strategy contributes to our Renewal
Agenda and focuses on our most material sustainability issues:
38
Dr. Christof Mascher (Appointed: 09/2009)
Australia
South Korea4
China
Singapore
Hong Kong
Taiwan
The Netherlands
United Kingdom
Sweden
Annual Report 2016 - Allianz Group
As an international financial services company, we find it vital to
ensure that our growth is both sustainable and profitable. We want
to create long-term value by strategically embedding sustainability
in our core business and by enabling our customers to address
tomorrow's challenges. This requires us to continually adapt our
business strategy in response to our stakeholders' and working part-
ners' needs, to the most pressing sustainability issues, and to the
activities of national and international sustainability bodies and ini-
tiatives, in order to deliver on global commitments such as the United
Nations Sustainable Development Goals.
Our Corporate Responsibility approach
C - Group Management Report
Property-Casualty Life/Health Banking Retail Asset Management
■Institutional Asset Management
1- This overview is based on our organizational structure in place as of 31 December 2016.
2- Oldenburgische Landesbank AG in Germany is classified as "held for sale".
3- Property-Casualty business belongs to Allianz Global Corporate & Specialty.
4-Classified as "held for sale".
BOARD OF MANAGEMENT
AND ORGANIZATIONAL STRUCTURE
Allianz SE has a divisional Board structure based on functional and
business responsibilities. Business-related divisions reflect our busi-
ness segments Property-Casualty, Life/Health, Asset Management,
and Corporate and Other, and in 2016 were overseen by five Board
members. The remaining four divisions (i.e. Chairman of the Board
of Management, Finance, Investments, and Operations) focus on
Group functions, along with business-related responsibilities.
For further information on Board of Management members and
their responsibilities, please refer to Mandates of the Members of the
Board of Management starting and D②>> page 12.
TARGET SETTING AND MONITORING
The Allianz Group steers its operating entities and business seg-
ments via an integrated management and control process. It begins
with the definition of a business-specific strategy and goals, which
are discussed and agreed upon between the Holding and operating
entities. Based on this strategy, our operating entities ] prepare three-
year plans which are then aggregated to form the financial plans for
the business divisions and for the Allianz Group as a whole. This plan
also forms the basis for our capital management. The Supervisory
Board approves the plan and sets corresponding targets for the Board
of Management. The performance-based remuneration of the Board
of Management is linked to short-term, mid-term, and long-term tar-
gets to ensure effectiveness and emphasize sustainability. For further
details about our remuneration structure, including target setting
and performance assessment, please refer to the Remuneration
Report starting on > page 24.
We continuously monitor our business performance against
these targets through monthly reviews - which cover key operational
and financial metrics – to ensure we can move quickly and take
appropriate measures in the event of negative developments. The
Allianz Group uses operating profit and net income as key financial
performance indicators across all its business segments. Other indi-
cators include segment-specific figures, such as the combined ratio
for Property-Casualty, return on equity¹ for Life/Health, and the cost-
income ratio for Asset Management. To steer and control new busi-
ness in our business segments Property-Casualty and Life/Health, we
use Return on Risk Capital (RoRC). For a comprehensive view of our
business segment performance, please refer to the chapters from
page 39 onwards.
Besides performance steering, we also have a risk steering process
in place, which is described in the Risk and Opportunity Report starting
on > page 62.
Non-financial key performance indicators (KPIs) are mainly used
for the sustainability assessment that we conduct when determining
mid-term bonus levels. In line with our Renewal Agenda, KPIs mainly
represent three key levers: True Customer Centricity, Digital by Default,
and Inclusive Meritocracy. Examples include the Allianz Engagement
Survey and Net Promoter Score (NPS²) results, diversity development,
and the share of digital retail products/digital client communication.
Annual Report 2016 - Allianz Group
1-Excluding unrealized gains/losses on bonds net of shadow accounting.
2-NPS is a measurement of customers' willingness to recommend Allianz. Top-down NPS is measured
regularly according to global cross-industry standards and allows benchmarking against competitors in
the respective markets.
37
--
--
--
Romania
German Speaking Countries
Switzerland
--
Spain
--
CENTRAL & EASTERN EUROPE
--
COUNTRIES, INSURANCE
INSURANCE GERMAN SPEAKING
Ireland
--
Italy
Mexico
--
--
Belgium
■■Germany²
Austria
Poland
--
Hungary
--
Czech Republic
--
--
Croatia
--
Japan
■■Bulgaria
Asia Pacific
Central & Eastern Europe
-
Switzerland
Slovakia
8
Annual Report 2016 - Allianz Group
Most of our insurance markets are served by local Allianz com-
panies. However, some business lines – such as Allianz Global Corpo-
rate & Specialty (AGCS), Allianz Worldwide Partners (AWP) and Credit
Insurance - are run globally.
2016
M
M
Jim Hagemann Snabe
52.2
2.2
100.0
8.3
2015
M
124.5
4.5
20.0
100.0
41.7
40.0
5.2
145.2
M
51.4
1.5
8.3
41.6
2016
M
M
Peter Denis Sutherland6
145.2
5.2
40.0
100.0
2015
M
2016
M
M
124.5
2016
146.0
6.0
40.0
100.0
2015
75.0
36.5
10.0
25.0
2016
M
M
M
1.5
26.6
4.5
106.1
4.5
20.0
100.0
2015
M
M
123.7
3.7
20.0
100.0
2016
M
M
Prof. Dr. Renate Köcher
2015
Jürgen Lawrenz5
36
2015
20.0
- German Speaking Countries
and Central & Eastern Europe
LIFE/HEALTH
- Asset Management
ASSET MANAGEMENT
- Allianz Worldwide Partners
- Asia Pacific
- Western & Southern Europe,
- Global Insurance Lines &
Anglo Markets
Middle East, Africa, India
- Western & Southern Europe,
- German Speaking Countries
and Central & Eastern Europe
PROPERTY-CASUALTY
BUSINESS SEGMENTS AND REPORTABLE SEGMENTS
ALLIANZ GROUP STRUCTURE -
- Iberia & Latin America
Middle East, Africa, India
- Iberia & Latin America
- Global Insurance Lines &
Anglo Markets
We offer a wide range of property-casualty and life/health insurance
products to both retail and corporate customers. For the Property-
Casualty business segment, these include motor, accident, property,
general liability, travel insurance and assistance services; the Life/
Health business segment offers savings and investment-oriented
products in addition to life and health insurance. We are the leading
property-casualty insurer worldwide and rank among the top five in
the life/health insurance business. Our key markets (in terms of pre-
miums) are Germany, France, Italy, and the United States.
Insurance operations
Alternative Investments provides global alternative investment
management services in the private equity, real estate, renewable
energy, and infrastructure sectors, mostly on behalf of our insurance
operations.
ALTERNATIVE INVESTMENTS
Our banking operations, which place a primary focus on retail clients,
support our insurance business and complement the products we
offer in Germany, Italy, France, the Netherlands, and Bulgaria.
BANKING
Holding & Treasury manages and supports the Group's businesses
through its strategy, risk, corporate finance, treasury, financial
reporting, controlling, communication, legal, human resources,
technology, and other functions.
HOLDING & TREASURY
The Corporate and Other business segment's activities include the
management and support of the Allianz Group's businesses through
its central holding functions, as well as Banking and Alternative
Investments.
- Alternative Investments
- Banking
- Holding & Treasury
CORPORATE AND OTHER
- USA
- Asia Pacific
other activities. Due to differences in the nature of products, risks,
and capital allocation, insurance activities are further divided into
property-casualty and life/health categories. In accordance with the
responsibilities of the Board of Management, each of the insurance
categories is grouped into regional reportable segments. Corporate
and other activities are divided into three different reportable seg-
ments in order to differentiate between the respective products, risks,
and capital allocation. In 2016, the Allianz Group had 16 reportable
segments.
100.0
insurance activities, asset management activities, and corporate and Corporate and Other
Asset Management
Legend: C = Chairperson of the respective committee, M = Member of the respective committee
1-Abbreviations: A-Audit, N-Nomination, P-Personnel, R-Risk, S-Standing.
2,020.7
60.7
560.0
1,400.0
2015
2- Since 4 May 2016.
2,025.2
558.2
1,408.2
2016
Total7
123.7
3.7
58.5
3- Until 31 March 2016.
4-Since 1 April 2016.
5-Since 1 August 2015.
6-Until 4 May 2016.
The Allianz Group structure reflects both our business segments
and geographical regions. Business activities are organized by product
and type of service, based on how these are strategically managed:
Allianz SE and its subsidiaries (the Allianz Group) offer property-
casualty insurance, life/health insurance and asset management
products and services in over 70 countries, with the largest of our
operations located in Europe. The Allianz Group insures 86.3 million
customers. Allianz SE, the parent company of the Allianz Group, has
its headquarters in Munich, Germany.
Allianz Group structure
Business Operations
C - Group Management Report
55
35
C
GROUP MANAGEMENT REPORT
Annual Report 2016 - Allianz Group
Annual Report 2016 - Allianz Group
34
LOANS TO MEMBERS OF THE SUPERVISORY BOARD
As of 31 December 2016, there was one outstanding loan granted by
Allianz Group companies to members of the Supervisory Board of
Allianz SE. One member received a mortgage loan of € 80 THOU from
Allianz Bank in 2010. The loan has a duration of ten years and was
granted at a normal market interest rate.
REMUNERATION FOR MANDATES IN OTHER
ALLIANZ COMPANIES AND FOR OTHER FUNCTIONS
As remuneration for her membership in the Supervisory Board
of Allianz Deutschland AG Ms. Gabriele Burkhardt-Berg received
€ 20.9 THOU for the financial year 2016. Mr. Jürgen Lawrenz did not
receive a separate remuneration for his membership in the Super-
visory Board of Allianz Managed Operations & Services SE. All current
employee representatives of the Supervisory Board except for
Ms. Martina Grundler (until 31 March 2016 Ms. Ira Gloe-Semler) are
employed by Allianz Group companies and receive a market-aligned
remuneration for their services.
7- The total reflects the remuneration of the full Supervisory Board in the respective year.
Our two major investment management businesses, PIMCO and
AllianzGI, operate under Allianz Asset Management (AAM). We are one
of the largest asset managers in the world that actively manage
assets. Our offerings cover a wide range of equity, fixed income, and
alternative investment products and solutions. Our core markets here
are the United States, Germany, France, Italy, the United Kingdom,
and the Asia-Pacific region.
2016
his duties, the Chairman of the Supervisory Board is furthermore
entitled to an office with secretarial support and use of the Allianz
carpool service. In the financial year 2016, Allianz SE reimbursed
expenses totaling € 51,935.
3,562
18
18
18
18
19
15
19
16
15
15
15
16
750
750
15
18
766
765
1,125
750
750
768
769
768
768
768
768
769
765
766
765
765
765
750
954
750
750
20 16
2015
2016
2015
2016
2016
2016
2015
Actual
Grant
Grant
Payout¹
Grant
Grant
Actual
Payout¹
2015
2016
Target
750
750
750
750
750
750
750
750
Max
Min
Target
Target
Max
Min
Target
750
Dr. Werner Zedelius (Appointed: 01/2002)
961
750
646
479
282
479
479
479
661
479
2,805
8,443
3,631
4,143
768
3,018
282
661
661
646
3,466
9,089
4,292
4,804
1,429
3,679
3,665
2,198
5,165
4,107
4,619
1,244
3,494
3,298
661
3,019
954
1,719
3,628
959
954
1,125
750
954
1,125
954
3,156
1,125
5,5
750
750
750
750
954
750
1,125
954
4,140
765
3,015
3,016
328
591
1,225
1,505
1,083
750
954
1,125
750
3,066
750
4,883
7-Jay Ralph left Allianz on 30 June 2016. He received a pro-rated base salary and an amount of €1,125 THOU
in lieu of his pro-rated 2016 annual bonus, MTB tranche and equity-related compensation (€ 375 THOU
each) which was paid in August 2016. According to his separation agreement, he received an amount of
€1,000 THOU in return, specifically, for a non-poaching and non-competition agreement.
Dr. Dieter Wemmer (Appointed: 01/2012)
7,821
11
11
11
11
19
2
19
2
2
2
2
2
375
750
2
11
752
752
1,125
750
750
386
769
386
386
386
386
769
752
752
752¦
752
752
375
870
375
375
2016
2015
2016
2015
2016
2016
2016
2015
Actual
Grant
Grant
Payout¹
Actual
Grant
Grant
Jay Ralph (Appointed: 01/2010; End of service: 06/2016)
Payout¹
2015
2016
Target
750
750
750
750
750
750
750
750
Max
Min
Target
Target
Max
Min
Target
375
2,897
859
750
348
418
418
418
418
2,529
418
7,538
2,075
386
1,511
3,019
2,777
6,673
1,511
283
368
368
1,879
2,443
754
1,879
3,302
3,195
7,021
3,780
4,545
1,170
3,420
Jay Ralph
283
368
368
3,362
870
4,127
3,002
3757
870
375
563
750
870
375
1,125
2,885
750
870
1,125
750
375
750
563
375
3757
3,002
348
3,350
719
876
1,520
1,018
1,584
593
☐
1,155
750
3757
375
563
375
2,784
750
752
Annual Report 2016 - Allianz Group
368
B - Corporate Governance
SC5
DBO 6
SC 5
DBO 6
SC 5
DBO 6
DBO 6
SC5
SC5
payment4
Board of Management
pension
Annual
Total
DBO 6
SC 5
DBO 6
Oliver Bäte
2,916
283
2015
(Chairman since 7 May 2015)
4,511
625
594
51
36
5
818
536
3,063
33
2016
Transition
payment³
6
AVK/APV²
Contribution-
based pension
plan (frozen)¹
36,582
7,457
1,318
37,688
7,457
770
1,128
24,366
1,095
35,681
967
87.36
7,892
33,885
7,604
7,677
33,420
1,081
Defined benefit pension plan
(frozen)
INDIVIDUAL PENSIONS: 2016 AND 2015
€ THOU
mum interest rate remains at 2.75 % p.a.). For members with pension
rights in the frozen defined benefit plan, the above contribution rates
are reduced by 19% of the expected annual pension from that frozen
plan. The Allianz Group paid € 5 MN (2015: € 4 MN) to increase reserves
for pensions and similar benefits for active members of the Board of
Management. As of 31 December 2016, reserves for pensions and
similar benefits for active members of the Board of Management
amounted to € 44 MN (2015: € 38 MN).
Company contributions for the current pension plan are set at 50% of
the base salary reduced by the cover for disability and death. They are
invested in a fund and have a guarantee for the contributions paid,
but no further interest guarantee (for members of the Board of Man-
agement who were born before 1 January 1958, the guaranteed mini-
PENSIONS
B - Corporate Governance
31
Annual Report 2016 - Allianz Group
1-Including the payout of Jay Ralph's MTB tranche for 2016 of € 375 THOU.
2-Grants of equity-related remuneration are accounted for as cash-settled awards. The fair market value of
the granted RSUS and SARS is remeasured at each reporting date and accrued, as a compensation expense,
proportionately over the vesting and service period. Upon vesting, any subsequent changes in the fair
value of the unexercised SARS are also recognized as a compensation expense.
1-The relevant share price used to determine the fair market value, and hence the final number of RSUS
granted, is only available after sign-off of the Annual Report by the external auditors, thus numbers are
based on a best estimate. As disclosed in the Annual Report 2015, the equity-related grant in 2016 was
made to participants as part of their 2015 remuneration. The disclosure in the Annual Report 2015 was
based on a best estimate of the RSU grants. The actual grants deviated from the estimated values and
have to be disclosed accordingly. The actual RSU grants as of 4 March 2016 under the Allianz Equity Incen-
tive are as follows: Oliver Bäte: 11,733, Sergio Balbinot: 9,300, Dr. Helga Jung: 7,053, Dr. Christof Mascher:
7,999, Jay Ralph: 8,098, Dr. Axel Theis: 8,896, Dr. Dieter Wemmer: 8,948, Dr. Werner Zedelius: 8,926,
Dr. Maximilian Zimmerer: 8,746.
9,852
11,059
308,410
66,694
Current pension
plan
6,798
31
495
2016
Dr. Christof Mascher
274 3,134
147
8
1,800
12
210
56
62
2015
3,878
420
159
1,187
3,115
357
637
29
348
508
63
37
5
3,016
280
2015
4,377
418
583
43
42
5
8
194
558
12 1,813
219
2015
626
365
1
4
243
2
357
39
5
Sergio Balbinot
3,442
483
582
2
2
1
1,347
54
62
2016
Dr. Helga Jung
2015
159
159
159
159
2016
Jacqueline Hunt
246
222
1
345
1,041
2016
3,167
AEI 2016/RSU4
AEI 2017/RSU4
MTB (2013-2015)³
MTB (2016-2018)²
Deferred Compensation
983
AEI 2012/RSU4
940
1,125
750
750
Annual Bonus
Annual Variable Compensation
766
983
AEI 2011/RSU4
GEI 2010/RSU4
55
3,016
Total
Pensions Service Cost
Total
GEI 2008/SAR5
GEI 2010/SAR5
750
983
1,125
750
2,993
750
983
1,125
750
766
3,016
766
766
Min
Target
Target
2016
2015
2016
Max
2016
Payout¹
Actual
Grant
Grant
Dr. Maximilian Zimmerer? (Appointed: 06/12; End of service: 12/2016)
87.36
INDIVIDUAL REMUNERATION: 2016 AND 2015
€ THOU (total might not sum up due to rounding)
2015
Base Salary
750
750
766
Total fixed compensation
16
16
16
16
16
16
16
Perquisites
750
750
750
750
750
766
766
766
3,714
Dr. Maximilian Zimmerer
Total
Dr. Werner Zedelius
Dr. Dieter Wemmer
Dr. Axel Theis
Jay Ralph
Dr. Christof Mascher
Number of RSU
granted on
Dr. Helga Jung
Oliver Bäte
Board members
GRANTS, OUTSTANDING HOLDINGS, AND EQUITY COMPENSATION EXPENSE UNDER THE ALLIANZ EQUITY PROGRAM
Dr. Maximilian Zimmerer €2,731 (5,638) THOU.
Dr. Werner Zedelius €2,677 (5,753) THOU,
Dr. Dieter Wemmer € 2,674 (5,844) THOU,
Sergio Balbinot
Jacqueline Hunt
11,515
7,677
RSU
31,997
6,944
4,141
3,565
1,174
34,120
1,277
40,671
€ THOU
31 December 2016
Equity Compensation
Expense 2016²
Strike Price
Number of SAR
held at
Number of RSU
held at
31 December 2016¹
SAR
In accordance with the approach described earlier, a number of RSUS
were granted to each member of the Board of Management in March
2017, which will vest and be settled in 2021.
EQUITY-RELATED REMUNERATION
3 March 20171
3,802
386
The sum of the total remuneration of the Board of Management for
2016, excluding the notional accruals of the MTB 2016-2018 and
excluding the pension service cost, amounts to € 26 MN¹ (2015, includ-
ing the payout of the MTB 2013-2015: € 57 MN). The corresponding
amount, including pension service cost, equals € 30 MN (2015, includ-
ing the payout of the MTB 2013-2015: € 61 MN).
786
786
786
786
386
786
3,402
1,552
4,927
4,500
2,535
1- In accordance with the German Corporate Governance Code, the annual bonus disclosed for perfor-
mance year 2016 is paid in 2017 and for performance year 2015 in 2016. The payments for equity related
deferred compensation (GEI and AEI), however, are disclosed for the year in which the actual payment
was made.
4,699
5,085
3- The payout 2015 figure includes the 2015 allocation and the accruals from the performance years 2013
and 2014, as adjusted by the sustainability assessment. The MTB 2013-2015 was paid out in spring 2016.
4-Payout is capped at 200% above grant price. The relevant share price used to determine the fair market
value, and hence the final number of RSUS granted, and the 200% cap are only available after sign-off by
the external auditors.
Dr. Axel Theis € 2,724 (3,644) THOU,
Dr. Christof Mascher €2,492 (5,356) THOU,
Jay Ralph €1,511¹ (5,293) THOU,
Dr. Helga Jung € 2,542 (4,813) THOU,
Oliver Bäte € 4,103 (7,046) THOU,
Sergio Balbinot € 2,747 (3,780) THOU,
Jacqueline Hunt € 1,423 (-) THOU,
The total remuneration to be disclosed for 2016 in accordance with
German Accounting Standard 17 is defined differently than in the
German Corporate Governance Code and is composed of the base
salary, perquisites, annual bonus and the fair value of the RSU grant,
but excludes the notional annual accruals of the MTB 2016-2018. The
figures for 2015 (in parentheses) include the payout of the MTB
2013-2015. Both figures exclude the pension service cost:
GERMAN ACCOUNTING STANDARD 17 DISCLOSURE
2- The MTB figure included in the "Actual Grant" column shows the annual accrual.
Annual Report 2016 - Allianz Group
B - Corporate Governance
2018.
7- Dr. Maximilian Zimmerer left the Allianz SE Board of Management upon his retirement effective 31 Decem-
ber 2016. According to his contract, he receives a transition payment of € 937.5 THOU. The payment is
calculated based on the latest base salary, which is paid for a further six months starting 1 July 2017, and
a final lump-sum payment of 25% of the target variable remuneration. The payable pension takes into
account the monthly payments over the six-month period. The lump-sum payment will be paid in spring
6-Pension Service Cost in accordance with IAS 19: represents the company cost not the actual entitlement
nor a payment, however, according to the German Corporate Governance Code the Pension Service Cost
is to be included in all columns.
member. SARS are released to plan participants upon expiry of the vesting period, assuming all other
exercise hurdles are met. For SARS granted until and including 2008, the vesting period was two years and
the exercise period five years. SARS can be exercised on the condition that the price of the Allianz SE stock
is at least 20% above the strike price at the time of grant. During the term of the plan, at least once on five
consecutive trading days the Allianz SE stock must relatively appreciate at least 0.01 percentage points
ahead of the appreciation of the Dow Jones EURO STOXX Price Index (600).
5- The equity-related remuneration that applied before 2010 consisted of two vehicles, virtual stock awards
known as RSUs and virtual stock options known as "Stock Appreciation Rights" (SAR). Only RSUs have been
awarded as of 1 January 2010. The remuneration system valid until December 2009 is disclosed in the
Annual Report 2009 (starting on page 17). Whereas the GEI/RSU grants are automatically exercised at the
vesting date, the GEI/SAR grants are exercised by the Board member within the exercise period following
the vesting date. Hence, the total payout from SARS depends on the individual decision by the Board
30
1,749
The following operation contributed negatively to the development
of our accident year loss ratio:
France: 0.2 percentage points. The deterioration was driven by a
combination of higher large losses as well as higher losses from natu-
ral catastrophes compared to the previous year.
Excluding losses from natural catastrophes, our accident year
loss ratio improved to 68.6%. This was predominantly due to a com-
bination of lower losses from weather-related events and profitabil-
ity programs we conducted across the Allianz Group.
Spain: 0.1 percentage points. This was driven by portfolio clean-
ing actions in loss making lines of business and price increases
across the portfolio.
2015.
United Kingdom: 0.2 percentage points. The accident year loss
ratio benefited from a very low impact of natural catastrophes in 2016.
AGCS: 0.1 percentage points. The improvement stemmed from
lower losses in the property and marine lines of business, while lower
large losses were offset by higher natural catastrophes compared to
The following operations contributed positively to the development
of our accident year loss ratio:
(40)
43
Annual Report 2016 - Allianz Group
Our accident year loss ratio stood at 70.1% - a 0.2 percentage point
improvement compared to the previous year. It was driven by a slight
decrease in losses from natural catastrophes from € 738 MN to
€ 689 MN, representing a reduced combined ratio impact from 1.6 per-
centage points in 2015 to 1.5 percentage points in 2016.
1- Consists of the underwriting-related part (aggregate policy reserves and other insurance reserves) of
"change in reserves for insurance and investment contracts (net)". For further information, please refer
to note 28 to the consolidated financial statements.
6- Based on the average exchange rates in 2016 compared to 2015.
The higher run-off result led to an increased run-off ratio amounting
to 4.5% (2015: 4.1%), driven by reserve releases across most of the port-
folio. In particular France and Australia delivered more run-off com-
pared to the prior year, due to a beneficial development in their long
tail business.
4- Represents the total of acquisition and administrative expenses (net), excluding one-off effects from
pension revaluation, and claims and insurance benefits incurred (net) divided by premiums earned (net).
5- We comment on the development of our gross premiums written on an internal basis, which means
figures have been adjusted for foreign currency translation and (de-)consolidation effects in order to
provide more comparable information.
2-Represents claims and insurance benefits incurred (net), divided by premiums earned (net).
3-Represents acquisition and administrative expenses (net), excluding one-off effects from pension
revaluation divided by premiums earned (net).
C - Group Management Report
The increase in our expense ratio was driven, in equal parts, by a
higher acquisition ratio and a higher administrative expense ratio.
(211)
Our operating investment income (net) declined, mainly due to lower
interest and similar income, essentially driven by debt securities as
a result of the low yield environment.
1- For further information on Allianz Property-Casualty figures, please refer to note 5 to the consolidated
financial statements.
(1,367)
(3)
(1,407)
232
21
54
OPERATING INVESTMENT INCOME (NET)1
1,474
Delta
2015
2016
Fee and commission expenses
Other expenses
Restructuring charges
Other result
Fee and commission income
Other income
€ MN
OTHER RESULT
1,527
73
The decrease in operating profit was mainly driven by the expected
decline in investment result due to the current low-yield environ-
ment. Furthermore, our 2015 operating profit had included a € 0.1 BN
net gain (net of related expenses and restructuring charges) from the
sale of the Fireman's Fund personal insurance business.
2,354
159
46,430
(32,646)
46,588
(32,661)
Delta
2015
2016
Claims and insurance benefits incurred (net)
(15)
€ MN
Our underwriting result increased thanks to a higher contribu-
tion from run-off as well as lower losses from natural catastrophes
and weather-related events, compared to 2015, resulting in an
improvement in our combined ratio.
1- Consists of fee and commission income/expenses, other income/expenses, and restructuring charges.
Other result¹
(233)
5,370
(6)
5,603
UNDERWRITING RESULT
2,084
1,924
160
Underwriting result
(86)
(220)
(306)
(without expenses for premium refunds)¹
and investment contracts (net)
Change in reserves for insurance
(144)
(13,208)
(13,352)
expenses (net), excluding one-off effects
from pension revaluation
Acquisition and administrative
Previous year claims (run-off)
Accident year claims
145
(30,721)
(30,576)
2,281
3
Similarly, the figures for present value of new business premi-
ums are shown without effects from the South Korean business.
(149)
€ MN
2015
2016
352
Operating profit³
Statutory premiums²
KEY FIGURES LIFE/HEALTH¹
64,636 66,903
Key figures
Life/Health Insurance Operations
Annual Report 2016 - Allianz Group
44
2- Refers to policyholder participation, mainly from APR (accident insurance with premium refunds) busi-
ness, and consists of the investment-related part of "change in reserves for insurance and investment
contracts (net)". For further information, please refer to note 28 to the consolidated financial statements.
1-The operating investment income (net) of our Property-Casualty business segment consists of the
operating investment result-as shown in note 5 to the consolidated financial statements - and expenses
for premium refunds (net) (policyholder participation).
(167)
3,138
C - Group Management Report
Delta
(2,267)
€ MN
4,148
from our South Korean business.
Operating profit
ever, statutory premiums are presented including premiums collected Premiums earned (net)
In the Asia-Pacific region, statutory premiums stood at € 5,383 MN,
a 19.2% drop on an internal basis, its main cause being a decrease in
unit-linked sales in Taiwan. Statutory premiums in South Korea
decreased to € 1,307 MN, or by 21.4% on an internal basis.
In France, statutory premiums fell to € 7,956 MN, a slight decrease
of 1.2% on an internal basis, largely due to a decline in our individual
life business.
In Italy we recorded statutory premiums of € 9,529 MN. The
decrease of 20.2% on an internal basis was largely attributable to
lower unit-linked single premium sales - as a result of higher finan-
cial market volatility – and a decrease in traditional life business.
In the United States, statutory premiums increased to € 11,856 MN,
or by 13.0% on an internal basis. This was largely driven by higher
fixed-indexed and non-traditional variable annuity sales, mainly as
a result of our marketing activities in the first half of 2016.
Statutory premiums in the German life business amounted to
€ 18,876 MN, a 6.4% increase on an internal basis. This resulted main-
ly from a growth in our business with capital-efficient products. It
more than offset the decline in sales of traditional life products,
which include long-term interest rate guarantees. Statutory premi-
ums in the German health business increased to € 3,289 MN, repre-
senting an internal growth of 1.0%, driven by the acquisition of new
customers in the supplementary health care coverage.
To ensure consistency with the group income statement, how-
At the beginning of the second quarter of 2016, all requirements were
fulfilled to present our South Korean business – until its disposal in
the fourth quarter of 2016 – as held for sale. Consequently, the nega-
tive result of € 268 MN that the South Korean business generated was
considered as non-operating, as the entity is no longer part of our
ongoing core operations. In order to better reflect the true underlying
drivers of our operating profit, we report it by profit sources and by
lines of business for both 2015 and 2016 excluding South Korea, and
specify the South Korean operating loss as a separate item.
2,621
(40)
10.8 (0.5) %-p
2,581
10.3
%
Return on equity4
€ MN
Net income
3,796
2,971
(94)
Operating investment income (net)
(240)
3,576
3,391
(net of interest expenses)
Interest and similar income
Delta
2015
2016
(185)
€ MN
Net income
In 2015 we recorded a € 0.1 BN net gain (net of related expenses
restructuring charges) from the sale of the Fireman's Fund personal
insurance business.
and
(139)
184
45
55
Net income increased, driven by a higher non-operating result, which
benefited from the absence of negative effects from pension revalu-
ation and an increase in the non-operating investment result, thus
offsetting the decline in operating profit.
Operating income from financial assets
and liabilities carried at fair value through
income (net)
(255)
Expenses for premium refunds (net)²
(11)
(365)
(376)
Investment expenses
8
(59)
(51)
Operating impairments of investments (net)
33
252
285
Operating realized gains/losses (net)
3
(25)
(23)
(15)
(139)
C - Group Management Report
45
%
Return on equity?
218
%
Solvency II capitalization ratio4,5,6
6,616
6,883
12.0
€ MN
6,987
7,250
€ MN
Net income³
10,735
10,833
€ MN
thereof: attributable to shareholders
98
263
267
200
18%-p
12.5 (0.5)%-p
Earnings per share
€
For a more detailed description of the results generated by our
business segments - specifically, Property-Casualty insurance opera-
tions, Life/Health insurance operations, Asset Management, and Cor-
porate and Other - please consult the respective chapters on the fol-
lowing pages.
Our shareholders' equity rose by € 4.2 BN to € 67.3 BN, compared
to 31 December 2015. Over the same period our Solvency II capitaliza-
tion ratio strengthened from 200% to 218%.
The increase in our net income was driven by the higher operating
profit and lower effective tax rate.
Income taxes fell by € 167 MN to € 3,042 MN, mainly driven by
higher tax-exempted income. The effective tax rate decreased to 29.6%
(2015: 31.5%).
Our non-operating result was stable at a loss of € 541 MN, with a
number of offsetting effects. On the one hand we had significant
impairments (net), partly due to the impairment losses on our South
Korean Life/Health business as well as on the Oldenburgische Landes-
bank AG⁹ upon classification as held for sale at the beginning of the
second quarter of 2016 and end of 2016, respectively. In addition, the
negative result that the South Korean Life/Health business generated
until its disposal in the fourth quarter of 2016 was considered as non-
operating, as it is no longer part of the ongoing core operations of the
Allianz Group⁹. On the other hand, non-operating realized gains (net)
increased following portfolio rebalancing. We also reported higher
non-operating income from financial assets and liabilities carried at
fair value through income (net), mainly due to favorable impacts
from hedging-related activities.
Our operating profit was near the upper end of our 2016 target
range and increased by 0.9% compared to 2015. Our Life/Health busi-
ness segment recorded an increase in operating profit, mainly due to
a higher investment margin in the United States as well as favorable
DAC unlocking effects in France. The operating result in our Corporate
and Other business segment also improved, primarily as a result of
lower pension costs. The operating profit generated by our Property-
Casualty business segment declined, reflecting the impact of lower
interest yields on our investment result. In addition, 2015 included a
€0.1 BN net gain (net of related expenses and restructuring charges)
from the sale of the Fireman's Fund personal insurance business. The
business segment's underwriting result, however, improved. In our
Asset Management business segment, a reduction in operating
expenses could only partially compensate for lower operating reve-
nues, resulting in a decline in operating profit.
Our operating investment result increased by € 692 MN to
€ 25,125 MN, mainly due to gains from the net of foreign currency
translation effects and financial derivatives, with the latter being
used to protect against equity and foreign currency fluctuations as
well as to manage duration and other exposures related to interest
rates. This was partly offset by lower interest and similar income,
driven by the low interest rates.
MANAGEMENT'S ASSESSMENT OF 2016 RESULTS
Our total revenues decreased by 2.2% this past business year, a drop
of 0.8% on an internal basis compared to 2015. Much of this decrease
was attributable to our Life/Health business segment, where we con-
tinued our targeted shift towards preferred lines of business. Both
lower other net fee and commission income, mainly due to lower
third-party assets under management-driven margins, and a decrease
in performance fees in our Asset Management business segment
further contributed to the decline. Our Property-Casualty business
segment enjoyed internal premium growth, mainly arising from
Turkey, Germany and Allianz Worldwide Partners.
0.58
Earnings summary
0.45
14.55
15.00
€
Diluted earnings per share
14.56
15.14
Operating profit³
1- For further information on Allianz Group figures, please refer to note 5 to the consolidated financial
statements.
125,190 (2,774)
€ MN
39
Annual Report 2016 - Allianz Group
1-At the date of the publication of this report, not all general market data for the year 2016 used in the
chapter Business Environment was final. Furthermore, the information provided in this chapter is based
on our own estimates.
In the property-casualty sector, premium growth decelerated slightly
in advanced markets, reflecting some weaknesses in Japan and North
America. Western Europe, on the other hand, kept more or less pace
thanks to the ongoing economic recovery, but overall the market
remained rather weak. As in the past, premiums grew much faster in
the emerging markets, driven by a robust growth in Asia. The other
two major emerging regions fared quite differently: Whereas the
slowdown in Latin America continued in 2016, Eastern Europe showed
clear signs of a recovery. Pricing continued to be a concern in nearly all
markets, particularly in the commercial insurance segment. Premi-
ums, overall and at a global level, rose by an estimated 4% in 2016 (in
nominal terms and adjusted for foreign currency translation effects).
And these are only the macroeconomic challenges. Even more
daunting were events in the microeconomy, first and foremost the
digital revolution. Not only will digitization, big data, and artificial
intelligence fundamentally transform the industry – in addition,
highly connected technologies have begun to cause a radical shift in
the nature of risks faced by society. As a result, the industry is con-
fronted with new demands: It has to find new solutions that allow
people to take new risks – for example in the sharing economy - and
also promote the use of new technologies. So, in the short term, the
need to innovate and adjust its current business model will put addi-
tional pressure on the industry. In the longer run, however, the digital
economy should offer plenty of opportunities to expand the business,
as is already exemplified by the rapid rise in cyber-insurance (albeit
from a very low base). Against this backdrop of macro- and micro-
challenges, the industry proved remarkably resilient in 2016. Premium
income was more or less stable; profitability was under pressure but
dropped just a notch or two.
2016 was an eventful year for the insurance industry, with most of
these events having more downsides than upsides. The macroeco-
nomic environment presented significant headwinds: the recovery of
the world economy continued, but with reduced momentum. 2016
also marked the end of a three-year streak of relatively low losses
from natural catastrophes: Not only did the number of events
increase further - among them an unusually high number of flood
events-but losses jumped to levels more than 50 percent higher than
the previous year's. On the regulatory front, the industry as a whole
managed to adjust smoothly to the new Solvency II regime which had
come into force as of 2016. Regulatory pressure remained high, how-
ever, in particular with regard to reserve requirements, stress testing,
or reporting.
Business environment 2016
for the insurance industry
Underwriting profitability suffered from more frequent and
had a difficult year: net non-resident capital inflows to bond and equity
markets fell below USD 28 BN - the lowest annual inflow since 2008 -,
which was mainly due to rising U.S. yields.
In the emerging markets, growth deceleration finally came to an
end in the course of 2016. Commodity-exporting emerging markets
benefited from the uptick in commodity prices. Most Eastern Euro-
pean E.U. member states continued to benefit from the ongoing recov-
ery in the Eurozone. Russia saw its economy stabilizing, following a
severe recession in 2015. Thanks primarily to fiscal stimulus, China's
growth decelerated only marginally from 6.9% in 2015 to 6.7% in 2016.
As a whole, the emerging-market group expanded by a rather disap-
pointing 3.6% - the same rate as in 2015 and well below the long-term
average of roughly 5.5% per year. Overall, the world economy grew by
an estimated 2.4%, somewhat slower than in 2015, when global output
rose by 2.7%. Global merchandise trade registered its lowest growth
rate since the Great Recession in 2009: less than 1%. The pace of global-
ization in merchandise trade has evidently abated considerably.
U.S. presidential elections in November - managed to derail the global
economy from its moderate growth path. Compared with 2015, eco-
nomic growth in the industrialized countries decelerated in 2016.
Real gross domestic product rose by 1.6% (2015: 2.1 %). In the United
States, the loss in economic momentum in 2016, compared to the
average pace in the current cycle, primarily reflects weakness in busi-
ness investment. By contrast, private consumption continued to grow
robustly. In the Eurozone, the economic recovery continued, albeit at
a slightly slower pace than in 2015. Real gross domestic product
expanded by 1.7% (2015: 1.9%). Private consumption was supported
by both low inflation and a gradual labor market improvement. With
an increase of 1.9%, the German economy recorded a slightly higher
growth rate than the Eurozone as a whole.
In 2016 the global economy proved to be remarkably resilient in the
face of heightened political and economic uncertainty. Neither con-
cerns about a slowdown of the Chinese economy, which prompted
some turmoil on the equity markets in early 2016, nor major political
surprises - including the outcome of the Brexit vote in June and the
Economic environment 2016¹
Business Environment
C - Group Management Report
Statutory premiums5
Financial market developments in 2016 continued to be charac-
terized by very low interest rates, a strong U.S. Dollar, and relatively low
stock-market volatility - the latter despite high political uncertainty.
In the United States, the Federal Reserve raised the target federal
funds rate to 0.50%-0.75% in December; this was its second move
since ending the zero-interest policy in late 2015. By contrast, the
European Central Bank continued to ease its monetary policy stance
with a bundle of measures, including the extension of the bond pur-
chasing program at least until the end of 2017. Yields on 10-year Ger-
man government bonds reached 0.2% at year-end 2016, a decrease of
40 basis points compared to the previous year. Major stock-market
indices, following a negative start, registered gains in the course of
2016. The Euro lost further ground against the U.S. Dollar, closing the
year at 1.05 U.S. Dollar to Euro - almost 4% below the level seen at the
beginning of 2016. The diverging monetary policies of the Federal
Reserve and the European Central Bank were a key factor behind this
downward correction. In terms of portfolio flows, emerging markets
Business environment 2016
more costly natural catastrophes, such as the Kumamoto Earthquake for the asset management industry
in Japan, severe storms and floods in Germany and France, and Hur-
ricane Matthew in the United States. Insurers' investment income
remained weak as investment returns were challenged by very low
interest rates. As a result, overall profitability is likely to have slipped
marginally in 2016.
Total revenues²
2015
2016
Delta
KEY FIGURES ALLIANZ GROUP1
Key figures
C - Group Management Report
Executive Summary of 2016 Results
Annual Report 2016 - Allianz Group
40
40
The shift in investor preference towards passively managed
funds continued throughout 2016 and was especially pronounced in
the United States, where active equity mutual funds were particu-
larly hard-hit. Actively managed taxable bond mutual funds in the
United States finished the year with positive flows, but were also
notably outstripped by their passive counterparts. Investors showed
a general preference for bonds over actively managed equities most
of the year, though this trend reversed towards year-end as yields rose
and U.S. equity markets rallied following the election. European
investors directed flows predominately into active fixed income
funds and to a lesser extent into passive equity and fixed income
products.
Currencies proved highly volatile during the year, with the British
Pound weakening significantly after the Brexit vote. The U.S. Dollar
strengthened markedly after the U.S. election and a subsequent spike
in yields.
Continued accommodative monetary policy across major econ-
omies led to falling yields and rising bond prices through most of the
year. This resulted in very strong returns for bond indices in both
Europe and the United States - until the results of the U.S. election
sent yields soaring, as prospects of a more supportive fiscal policy
and a tightening labor market raised inflation expectations. There
was also some spill-over into the Eurozone, causing yields to rise late
in the year, albeit to a lesser extent than in the United States. Bond
indices in both the United States and Europe still finished the year
with positive returns.
This was a disruptive year for the asset management industry. Global
equity markets started 2016 with a sharp drop, then made a broad
recovery in the following months. Emerging-market and U.S. equities
finished the year particularly strong; European indices lagged a bit
and exhibited higher volatility, particularly after the Brexit vote, but
still finished the year in positive territory.
The current low-yield environment also presented the greatest
challenge in the life sector, impairing the profitability of in-force
business. Insurers responded by continuing to shift the product mix
towards less capital-intensive products, for example by offering lower
or more flexible guarantees. At the same time, the focus moved from
traditional savings to protection business. To boost investment
income, insurers increasingly turned to non-traditional investments
such as infrastructure. These actions notwithstanding, overall profit-
ability is likely to have drifted downward slightly.
In the life sector, premium growth was very strong in emerging mar-
kets or, more precisely, in emerging Asian markets: Life premiums
rose by more than 20 percent there, mainly due to the extraordinary
growth experienced in the Chinese market. The other two emerging
regions show a totally different picture: Premium growth in Latin
America flattened, reflecting the economic troubles of its biggest
market, Brazil; Eastern Europe remained in the doldrums, not least
due to changes in the tax regime for life products in some key markets.
For advanced markets, too, 2016 proved to be a rather difficult year.
Premium growth slowed - or even turned negative - in many markets
as the ongoing low-yield environment continued to pose problems
for the savings-type core insurance business. In total, according to
our own estimates, global premiums grew by almost 5% in 2016 (in
nominal terms and adjusted for foreign currency translation effects).
122,416
184
2- Total revenues comprise statutory gross premiums written in Property-Casualty and Life/Health, operating
revenues in Asset Management, and total revenues in Corporate and Other (Banking).
4-Figures as of 31 December.
Gross premiums written5
66.2 (0.5)%-p
28.4 0.2%-p
94.6 (0.3)%-p
94.3
%
Combined ratio4
28.7
%
On a nominal basis, gross premiums written were almost stable com-
pared to 2015.
Expense ratio³
%
Loss ratio²
34
4,124
4,158
€ MN
Net income
65.6
Unfavorable foreign currency translation effects amounted to
€ 1,138 MN, largely due to the depreciation of the British Pound, the
Argentine Peso, and the Turkish Lira against the Euro.6
Consolidation/deconsolidation effects were negative, amount-
ing to € 519 MN. This was largely attributable to the sale of the Fire-
man's Fund personal insurance business to ACE limited in 2015.
On an internal basis, our growth was strong at 3.1% driven by a
positive volume effect of 2.0% and a positive price effect of 1.1%.
(167)
3,138
2,971
Operating investment income (net)
73
2,281
2,354
Underwriting result
Delta
2015
2016
€ MN
OPERATING PROFIT
AGCS: Gross premiums stood at € 7,592 MN. The internal growth
of 0.5% was largely generated by positive volume effects at Allianz Risk
Transfer, much of which was offset by negative price impacts across
both our corporate and specialty lines of business.
Allianz Worldwide Partners: Gross premiums increased to
€ 4,185 MN. The internal growth of 4.7% was mainly driven by our U.S.
travel business and our assistance business in France.
Germany: We recorded gross premiums of €9,902 MN, an
increase of 2.8% on an internal basis. This was mainly due to favorable
price effects in our motor insurance business, and supported by
favorable volume effects in our non-motor commercial insurance
business.
The following operations contributed positively to internal growth:
Turkey: Gross premiums reached € 1,695 MN. The internal growth
of 43.0% was driven by positive volume and price contributions in our
motor third-party liability insurance business.
(62)
(233)
3- The Allianz Group uses operating profit and net income as key financial indicators to assess the performance
of its business segments and of the Group as a whole.
5,603
€ MN
Statement on Corporate Management pursuant to § 315 (5)
and § 289a of the HGB starting on ②> page 19,
Takeover-related Statements and Explanations starting on
>page 21, and the
The following information also forms part of the Group Management
Report:
Group Management Report
Other parts of the
For further information please refer to note 4 to the consolidated
financial statements.
At the end of the fourth quarter of 2016, all requirements were fulfilled
to present Oldenburgische Landesbank AG, Oldenburg, as a disposal
group. Thus, the assets and liabilities of this consolidated entity,
which are allocated to the reportable segment Banking (Corporate
and Other), were classified as held for sale.
During the year ended 31 December 2016, the Allianz Group disposed
of its South Korean Life/Health business (Allianz Life Insurance Co.
Ltd., Seoul), a 100% owned subsidiary of the Allianz Group. The entity
had been classified as held for sale since the beginning of the second
quarter of 2016. The entity was deconsolidated on 30 December 2016.
Remuneration Report starting on > page 24.
Other information
41
Annual Report 2016 - Allianz Group
9- For further information on the impairment loss on the Oldenburgische Landesbank AG, and the disposal
of Allianz Life Insurance Co. Ltd., Seoul, please refer to note 4 to the consolidated financial statements.
8- Internal total revenue growth excludes the effects of foreign currency translation as well as acquisitions
and disposals. Please refer to page 60 for a reconciliation of nominal total revenue growth to internal total
revenue growth for each of our business segments and the Allianz Group as a whole.
7- Represents the ratio of net income attributable to shareholders to the average shareholders' equity,
excluding unrealized gains/losses on bonds, net of shadow accounting, at the beginning of the year and
at the end of the year.
6- Risk capital figures are group diversified at 99.5% confidence level. Allianz Life us included based on third
country equivalence with 150% of RBC CAL since 30 September 2015.
5-Changed regulatory tax treatment of German life sector reduced our year-end Solvency II capitalization
ratio from 200% to 196 % on 1 January 2016.
C - Group Management Report
42
42
Annual Report 2016 - Allianz Group
Operating profit
51,597
51,535
€ MN
Gross premiums written
2015
2016
Operating profit
Credit Insurance: We recorded gross premiums of € 2,200 MN, a
decline of 0.5% on an internal basis. This decrease resulted from
negative price and volume effects mainly in Germany and Asia.
ness.
United Kingdom: Gross premiums amounted to € 2,623 MN, a
decline of 3.6% on an internal basis. Positive price developments in
our retail motor and pet insurance businesses were more than offset
by negative volume effects, mostly in our retail motor insurance busi-
The following operations contributed negatively to internal growth:
Italy: Gross premiums were at € 4,572 MN, a decline of 3.9% on an
internal basis. Main drivers were negative price and volume effects in
our motor insurance business.
Delta
C - Group Management Report
KEY FIGURES PROPERTY-CASUALTY1
Key figures
Property-Casualty Insurance Operations
5,370
On a nominal basis, statutory premiums went down by 3.4%. This
includes unfavorable foreign currency translation effects of € 347 MN
and positive (de-)consolidation effects of € 138 MN.
Premiums earned (net)
ucts.
Protection & health
216
2,090
2,306
Guaranteed savings & annuities
Delta
2015
2016
672
€ MN
A slight decrease in our net income was largely driven by the negative
net impact of our business in South Korea in 2016 as well as lower real-
izations compared to a high base in 2015, mainly in Italy.
Net income
OPERATING PROFIT BY LINES OF BUSINESS³
The improvement in the impact of change in DAC was largely due to
higher capitalization of DAC, resulting mainly from increased sales in
fixed-indexed and non-traditional variable annuities in the United
States as well as in capital-efficient products in Germany.
1- Current and prior year figures are presented excluding effects from the South Korean business.
110
(158)
(48)
OPERATING PROFIT BY LINES OF BUSINESS
Impact of change in DAC
764
Unit-linked without guarantee
1- Technical margin comprises risk result (risk premiums less benefits in excess of reserves less policyholder
participation), lapse result (surrender charges and commission clawbacks) and reinsurance result.
2- Impact of change in DAC includes effects of change in DAC, unearned revenue reserves (URR) and value
of business acquired (VOBA). It represents the net impact of deferral and amortization of acquisition costs
and front-end loadings on operating profit and therefore deviates from the IFRS financial statements.
3- Prior year figures changed in order to reflect the roll out of profit source reporting to China and the inclusion
of the capital-efficient products line of business.
The operating profit rise in our guaranteed savings & annuities line of
business was mainly due to positive hedging-related impacts in our
traditional variable annuity business in the United States as well as
favorable DAC unlocking effects in France. Operating profit in the pro-
tection & health line of business dropped, largely driven by a lower
investment margin in the German health business and one-off effects
in the United States. Our operating profit in the unit-linked without
guarantee line of business went down, primarily due to a reduction
of unit-linked performance fees in Italy. An increase in operating
profit in the capital-efficient products line was largely attributable to
a higher spread margin in the United States.
1- The 2016 figure represents the operating loss of the first quarter only, as the negative result for the rest
of 2016 was considered as non-operating.
352
3,796
4,148
Operating profit
162
(93)
(244)
Operating loss-South Korea¹
109
805
913
Capital-efficient products
(41)
381
339
(82)
(38)
(1,878)
(1,916)
2- The purpose of the Life/Health operating profit sources analysis is to explain movements in IFRS results
by analyzing underlying drivers of performance on a Life/Health business segment consolidated basis.
3-Loadings and fees include premium and reserve based fees, unit-linked management fees, and policy-
holder participation in expenses.
1 - Prior year figures changed in order to reflect the roll out of profit source reporting to China and the inclusion
of the capital-efficient products line of business.
reserves.
Administrative and other expenses remained stable in relation to
ness.
Our acquisition expenses and commissions increased, predominantly
due to higher sales in the United States and in our German life busi-
3-Aggregate policy reserves and unit-linked reserves.
4-Yields are pro rata.
1-Current and prior year figures are presented excluding effects from the South Korean business.
2-PVNBP before non-controlling interests.
4-The investment margin is defined as IFRS investment income net of expenses, less interest credited to
IFRS reserves and policyholder participation (including policyholder participation beyond contractual and
regulatory requirements mainly for the German life business).
The rise in loadings and fees was primarily due to the increased load-
ings from premiums and was driven by the higher single premium
sales in the German life business as well as by higher production with
a favorable business mix shift in Indonesia and Thailand.
(0.3)
as % of average reserves³,4
Administrative and other expenses
(0.6)
(8.0)
(8.6)
Acquisition expenses and commissions
as % of PVNBP²
4-Unit-linked management fees, excluding asset management fees, divided by unit-linked reserves.
(0.3)
5-Expenses include acquisition expenses and commissions (excluding commission clawbacks, which are
allocated to the technical margin) as well as administrative and other expenses.
46
Annual Report 2016 - Allianz Group
Amortization, unlocking and true-up of DAC
147
1,721
1,868
Capitalization of DAC
Delta
2015
2016
€ MN
Our return on equity decreased by 0.5 percentage points to 10.3%,
mainly resulting from the unfavorable net income development of
the South Korean business.
As of 2016 onwards, margin on reserves has been replaced by return
on equity to better reflect the way we steer our Life/Health insurance
operations.
Return on equity
IMPACT OF CHANGE IN DAC¹
IN DEFERRED ACQUISITION COSTS (DAC)²
IMPACT OF CHANGE
land.
Our technical margin declined, driven by one-off reserve adjustments
predominantly in the United States and increased claims in Switzer-
TECHNICAL MARGIN¹
C - Group Management Report
Annual Report 2016 - Allianz Group
(297)
47
Asset Management
1,871
12
51
63
151
153
(11)
176
1,763
166
1,489
2015
2016
31 December
31 December
as of
as of
104
1,385
Delta
108
1- Multi-assets is a combination of several asset classes (e.g. bonds, stocks, cash and real property) used as
an investment. Multi-assets class investments increase the diversification of an overall portfolio by
distributing investments throughout several asset classes.
Annual Report 2016 - Allianz Group
On an internal basis5, statutory premiums dropped by € 2,058 MN
- or 3.1% - to € 64,947 MN, mainly due to lower unit-linked single pre-
miums in Italy and Taiwan as well as declining traditional business
both in Germany and Italy. The increase in our fixed-indexed and
non-traditional variable annuity sales in the United States and the
premium growth in capital-efficient products in Germany partly
compensated for this development. In line with our changed product
strategy, premiums continued to shift towards capital-efficient prod-
48
5-Mutual funds are investment vehicles (in the United States, investment companies subject to the U.S.
code; in Germany, vehicles subject to the "Standard-Anlagerichtlinien des Fonds" Investmentgesetz)
where the money of several individual investors is pooled into one account to be managed by the asset
manager, e.g. open-end funds, closed-end funds. Separate accounts are investment vehicles where
the money of a single investor is directly managed by the asset manager in a separate dedicated account
(e.g. public or private institutions, high net worth individuals, and corporates).
6- Based on the location of the asset management company.
4- Market and Other represents current income earned on, and changes in the fair value of, securities held
in client accounts. It also includes dividends from net investment income and from net realized capital
gains to investors of open ended mutual funds and of closed end funds.
3- Net flows represent the sum of new client assets, additional contributions from existing clients-including
dividend reinvestment-withdrawals of assets from, and termination of, client accounts and distributions
to investors. Reinvested dividends amounted to € 10 BN.
2- Represents operating expenses divided by operating revenues.
1- For further information about our Asset Management business segment, please refer to note 5 to the
consolidated financial statements.
2
As for the regional allocation of third-party AuM6, shares did not
shift remarkably: America 55.3%, Europe 32.8% and the Asia-Pacific
region 11.9% (31 December 2015: 56.0%, 32.7% and 11.3%). All three
regions contributed to the increase in third-party AuM. However, pri-
marily due to positive effects in Japan as well as third-party AuM net
outflows in the United States and the United Kingdom, the regional
allocation shifted slightly in favor of the Asia-Pacific region.
The share of fixed income assets rose from 74.0 % at the beginning
of the year to 75.5%, mainly due to positive market effects and con-
solidation effects due to the Rogge acquisition. The share of equities
declined from 11.8% to 10.3%, primarily driven by third-party AuM net
outflows which were only partly offset by positive effects from equity
markets. The shares of multi-assets and other were roughly stable at
10.0% and 4.2% (31 December 2015: 10.5% and 3.7%, respectively).
As of 31 December 2016, the share of third-party AuM by business
unit was 76.1% (31 December 2015: 77.3%) attributable to PIMCO and
23.9% (31 December 2015: 22.7%) attributable to AllianzGI.
In the following section we focus on the development of third-party
assets under management.
Favorable effects from foreign currency translation caused an
increase of total AuM of € 29 BN. This was mainly due to the apprecia-
tion of the U.S. Dollar against the Euro.
An upswing of total AuM of € 31 BN from consolidation, decon-
solidation and other adjustments was almost entirely driven by the
acquisition of Rogge Global Partners (Rogge) by AllianzGI.
Favorable effects from Market and Other amounted to € 76 BN,
which made them the biggest driver of the upswing in total AuM.
Again, much of this development was due to PIMCO, where the effects
amounted to € 64 BN, and mainly concerned fixed income assets.
Net outflows³ of total assets under management (AUM) amounted to
€ 28 BN in 2016. Thereof, € 20 BN were attributable to third-party AuM
net outflows (2015: € 107 BN). A major share of this year's outflows
were PIMCO's third-party AuM net outflows - mainly in the United
States and the United Kingdom –, which could only partly be offset by
third-party AuM net inflows that primarily occurred in Japan. PIMCO'S
third-party AuM net outflows occurred in the first half of 2016, and
turned into net inflows in the second half. AllianzGI recorded minor
third-party AuM net outflows, mostly in the United States.
2- Other is composed of asset classes other than equity, fixed income and multi-assets, e.g. money markets,
commodities, real estate investment trusts, infrastructure investments, private equity investments,
hedge funds, etc.
The shares in third-party assets of both mutual funds and sepa-
rate accounts³ were quite steady compared to the end of 2015, with
mutual funds at 57.8% (31 December 2015: 58.3%) and separate
accounts at 42.2% (31 December 2015: 41.7%).
Other²
Multi-assets¹
Equities
(1.1)%-p
64.5
63.4
%
Cost-income ratio²
2,297
2,205
€ MN
Net income
Operating profit
6,022
€ MN
Operating revenues
2015
2016
Delta
(457)
(93)
KEY FIGURES ASSET MANAGEMENT¹
Key figures
6,479
€ MN
1,411
1,449
Fixed income
Type of asset class
€ BN
COMPOSITION OF TOTAL ASSETS UNDER MANAGEMENT
Assets under management
85
1,276
1,361
€ BN
management as of 31 December
Third-party assets under
thereof:
108
1,763
1,871
€ BN
as of 31 December
Total assets under management
(39)
C - Group Management Report
(6,390)
Total
(124)
(1,013)
income (net)
130
5,479
5,609
Loadings and fees
and liabilities carried at fair value through
Operating income from financial assets
(2,049)
Delta
2016
(281)
18,030
17,749
Interest and similar income
€ MN
OPERATING PROFIT BY PROFIT SOURCES
Delta
2015
2015
1,035
Expenses
1,046
955
(106)
(105)
Interest expenses
(297)
(6,390)
(6,687)
Investment margin
149
6,610
Operating realized gains/losses (net)
339
4,062
4,401
Operating loss-South Korea'
Impact of change in DAC
Technical margin
6,461
2016
€ MN
INVESTMENT MARGIN¹
14.4
(6.5)
35.0
28.5
Delta
2015
2016
Total
12.3
Capital-efficient products
Protection & health
Guaranteed savings & annuities
%
PRESENT VALUE OF NEW BUSINESS PREMIUMS (PVNBP) IN %
BY LINES OF BUSINESS1
PVNBP fell by € 1,976 MN to € 57,168 MN, largely due to lower sales in our
business with unit-linked insurance products without guarantees in
Italy and in Taiwan.
Present value of new business premiums
(PVNBP)6,7,8
(6,687)
Premiums earned (net) went down by € 446 MN to € 23,769 MN, result-
ing from a decline in our business with traditional life products in
Germany.
Unit-linked without guarantee
2.1
20.1
24.9
INVESTMENT MARGIN4
OPERATING PROFIT BY PROFIT SOURCES1.2
Operating profit
C - Group Management Report
45
Annual Report 2016 - Allianz Group
8- Current and prior year figures are presented excluding effects from the South Korean business.
7- Prior year figures changed in order to reflect the roll out of profit source reporting to China and the inclusion
of the capital-efficient products line of business.
6-PVNBP before non-controlling interests.
1- Current and prior year figures are presented excluding effects from the South Korean business.
5- Our comments in the following section on the development of our statutory gross premiums written
refer to figures determined "on an internal basis", i.e. adjusted for foreign currency translation and (de-)
consolidation effects, in order to provide more comparable information.
3- From the classification of our South Korean life business as "held for sale" in the second quarter of 2016 until
its disposal in the fourth quarter of 2016, the total result of € (268) MN was considered as non-operating.
4- Represents the ratio of net income to the average total equity, excluding unrealized gains/losses on
bonds, net of shadow accounting, at the beginning of the year and at the end of the year.
2- Statutory premiums are gross premiums written from sales of life and health insurance policies, as well
as gross receipts from sales of unit-linked and other investment-oriented products, in accordance with
the statutory accounting practices applicable in the insurer's home jurisdiction.
1 - For further information on Allianz Life/Health figures, please refer to note 5 to the consolidated financial
statements.
100.0
100.0
9.3
27.7
37.0
(91)
Operating impairments of investments (net)
(4.8)
(1,199)
5.9
of statutory premiums
Loadings from premiums as %
EXPENSES5
The increase in our investment margin was largely driven by a higher
spread margin in our fixed-indexed annuity business and by favor-
able hedging-related impacts in our traditional variable annuity
business in the United States.
130
5,479
5,609
5.5
Loadings and fees
770
750
Unit-linked management fees
Delta
133
18
1,125
1,143
Loadings from reserves
3,584
(20)
3,716
0.4
Loadings from reserves as %
(1,760) (1,636)
(173)
(1,208)
(4,754)
(4,927)
Acquisition expenses and commissions
Administrative and other expenses
Expenses
1- Current and prior year figures are presented excluding effects from the South Korean business.
2-Aggregate policy reserves and unit-linked reserves.
3-Yields are pro rata.
(0.1)
EXPENSES1
0.6
of average unit-linked reserves³,4
Unit-linked management fees as %
2015
2016
0.2
0.2
of average reserves2,3
€ MN
0.6
Loadings from premiums
Delta
2016
Policyholder participation
1 - The 2016 figure represents the operating loss of the first quarter only, as the negative result for the rest
of 2016 was considered as non-operating.
Operating profit
4,148
250
152
402
Other²
162
(244)
(81)
(1,111)
(1,192)
Investment expenses
(9)
2015
(48)
110
(158)
3,796
352
(82)
3
€ MN
LOADINGS AND FEES3
Our operating profit went up, mainly driven by a higher investment
margin in the United States as well as favorable DAC unlocking effects
in France.
LOADINGS AND FEES¹
104
107
Investment margin³.4 in basis points
Technical interest
339
Investment margin
4,062
4,401
(656)
(7,428)
(8,084)
(68)
(8,689)
(8,757)
1- Current and prior year figures are presented excluding effects from the South Korean business.
2- Other comprises the delta of out-of-scope entities, which are added here with their respective operating
profit and different line item definitions compared to the financial statements, such as interest paid on
deposits for reinsurance, fee and commission income, and expenses excluding unit-linked management
fees.
3-Investment margin divided by the average of current and previous year-end aggregate policy reserves.
4-Yields are pro rata.
69
PIMCO
88
40
2014
20
2015
0
20
40
60
80
40
88
2014
AllianzGI
70
63
| | | | | |
12
31
2015
12
2016
Outperforming third-party assets under management
Underperforming third-party assets under management
45
30
100
37.
55
THREE-YEAR ROLLING INVESTMENT PERFORMANCE OF PIMCO AND ALLIANZGI¹
as of 31 December in %
49.9
32.9
2.2
(0.1)
2016
14.3
14.2
(0.1)
1.9
1.8
(0.2)
12.0
11.7
0.5
7.1
7.6
4.3
45.7
Cash/other
Total
31.3
1.5
5.7
5.5
0.2
Other
C - Group Management Report
51.4
(4.3)
8.9
9.8
(0.9)
Equities
Real estate
55.7
1- Three-year rolling investment performance reflects the mandate-based and volume-weighted three-
year investment success of all third-party assets that are managed by Allianz Asset Management's
portfolio-management units. For separate accounts and mutual funds, the investment success (valued
on the basis of the closing prices) is compared with the investment success prior to cost deduction of
the respective benchmark, based on various metrics. For some mutual funds, the investment success,
reduced by fees, is compared with the investment success of the median of the respective Morningstar
peer group (a position in the first and second quartile is equivalent to outperformance).
2,297
Operating profit declined by 4.4% on an internal basis¹. While operat-
ing revenues declined, the corresponding impact on operating profit
was mitigated by reduced operating expenses.
(3,818)
(4,182)
364
2,205
(93
Operating profit
Net income
We recorded a 2.7% decline in net income, reflecting the decrease in
operating profit, which was partly compensated by the absence of the
negative effect from the adapted cost allocation scheme for the pen-
sion provisions.
1- Operating revenues/operating profit adjusted for foreign currency translation and (de-)consolidation
effects.
Annual Report 2016 - Allianz Group
49
50
50
C - Group Management Report
Operating expenses
Corporate and Other
KEY FIGURES CORPORATE AND OTHER¹
€ MN
2016
2015
Delta
Operating revenues
1,951
1,899
52
Operating expenses
(2,818)
(2,844)
2.2
26
Key figures
Operating profit
40
(1)
Administrative expenses could be lowered significantly, mainly
due to decreased personnel expenses. The latter decreased primarily
because of a 15.0% drop in variable compensation, which strongly
reflected the lower expenses associated with the Special Performance
Award (SPA). The SPA was introduced in the fourth quarter of 2014 at
PIMCO to secure performance and retain talent. The decrease in per-
sonnel expenses was supported by lower average full time equivalents.
In addition, lower non-personnel expenses also contributed to the
decrease in overall administrative expenses.
Other operating expenses dropped due to lower restructuring
charges.
Our cost-income ratio declined slightly, as the relative decrease
in operating expenses outpaced the relative decrease in operating
revenues. The SPA effect contributed 0.7 percentage points to the cost-
income ratio- net of the impact on variable compensation.
ASSET MANAGEMENT BUSINESS SEGMENT INFORMATION
€ MN
The overall three-year rolling investment performance of our Asset
Management business improved significantly, with 83% of third-
party assets outperforming their respective benchmarks (31 Decem-
ber 2015:69%). The increase was driven by PIMCO's rolling investment
performance, which strengthened towards the end of the year.
Operating revenues
Our operating revenues decreased by 7.1%, which corresponds to a
drop of 7.5% on an internal basis¹.
We recorded lower performance fees, mainly due to decreased
carried interest from a large private fund at PIMCO.
Other net fee and commission income went down primarily
because of lower third-party AuM-driven margins at both PIMCO and
AllianzGI. The main cause for this were outflows from higher-margin
assets at PIMCO. To a lesser extent, lower average third-party AuM con-
tributed to the decrease in other net fee and commission income.
2016
2015
Delta
Performance fees
474
(41)
607
Other net fee and commission income
Other operating revenues
Operating revenues
5,545
5,881
(336)
3
(8)
12
6,022
6,479
(457)
Administrative expenses (net),
excluding acquisition-related expenses
Other operating expenses
(3,817)
(4,141)
324
(133)
(0.1)
2015
640.1
Expiry date of
€ 250,000,000
(97,656,250 shares)
€ 10,000,000,000
(nominal bond value)
(5,359,375 shares)
€ 13,720,000
€ 550,000,000
(214,843,750 shares)
Nominal amount
2010/2014
Conditional Capital
Authorization to issue
bonds carrying conversion
and/or option rights
Authorized Capital 2014/11
Authorized Capital 2014/1
Capital authorization
CAPITAL AUTHORIZATIONS OF ALLIANZ SE
the authorization
4.2
20,059
20,165
Total
4.6
584
13,485
13,537
Subordinated bonds
3.5
262
6,574
6,629
Senior bonds
2016
845
6 May 2019
6 May 2019
6 May 2019
Operating result
1,500
Issuances¹ Redemptions of redemptions
Issuances net
Senior bonds
2016
as of 31 December
MATURITY STRUCTURE OF ALLIANZ SE'S SENIOR AND SUBORDINATED BONDS¹
€ MN
As of 31 December 2016, Allianz SE had senior and subordinated
bonds with a variety of maturities outstanding, reflecting our focus
on long-term financing. As the cost and availability of external fund-
ing may be negatively affected by general market conditions or by
matters specific to the financial services industry or the Allianz
Group, we seek to reduce refinancing risk by actively steering the
maturity profile of our funding structure.
LONG-TERM DEBT FUNDING
For further information on our share capital and regarding authori-
zations to issue and repurchase shares, please refer to the chapter
Takeover-related Statements and Explanations (part of the Group
Management Report) starting on > page 21.
ISSUANCES AND REDEMPTIONS OF ALLIANZ SE'S
SENIOR AND SUBORDINATED BONDS
€ MN
The table below details the long-term debt issuances and redemptions
of Allianz SE during 2016 and 2015:
1- For further information on Allianz SE debt (issued or guaranteed) as of 31 December 2016, please refer to
note 19 to the consolidated financial statements.
2- Based on nominal value.
4.5
830
18,673
(issuance of bonds)
No expiry date for
Conditional Capital
2010/2014 (issuance in
case option or conversion
rights are exercised)
Senior bonds
6,716
6,711
270
%
4.0
12,080
11,962
560
4.8
Total
18,797
Subordinated bonds
653.1
Weighted
average
interest rate²
€ MN
1- For further information about changes in the reserves for loss and loss adjustment expenses for the
Property-Casualty business segment, please refer to note 15 to the consolidated financial statements.
page 62
For details on the regulatory capitalization of the Allianz Group,
please refer to the Risk and Opportunity Report from
onwards.
gische Landesbank AG as held for sale. Other liabilities increased by
€ 1.0 BN, mainly due to higher liabilities from cash pooling. The € 1.3 BN
increase in subordinated liabilities was mainly caused by the issuance
of a subordinated bond. Certificated liabilities decreased by € 1.5 BN.
This shift was primarily driven by the classification of the Oldenbur- Regulatory capital adequacy
Please refer to the Risk and Opportunity Report from > page 62
onwards for a description of the main concentrations of risk and
other relevant risk positions.
The Allianz Group has also entered into contractual relation-
ships with various types of structured entities. They have been
designed in such a way that their relevant activities are directed by
means of contractual arrangements instead of voting or similar
rights. Typically, structured entities have been set up in connection
with asset-backed financings and certain investment fund products.
For more details on our involvement with structured entities, please
refer to note 37 to the consolidated financial statements.
The Allianz Group enters into various commitments including
loan and leasing commitments, purchase obligations and other com-
mitments. Please refer to note 39 to the consolidated financial state-
ments for more details.
In the normal course of business, the Allianz Group may enter into
arrangements that do not lead to the recognition of assets and liabil-
ities in the consolidated financial statements under IFRS. Since the
Allianz Group does not rely on off-balance sheet arrangements as a
significant source of revenue or financing, our off-balance sheet
exposure to loss is immaterial relative to our financial position.
Off-balance sheet arrangements
In comparison to year-end 2015, we recorded a drop in liabilities to
banks and customers amounting to € 13.4 BN, and an upswing in
liabilities of disposal groups classified as held for sale of € 13.3 BN.
CORPORATE AND OTHER LIABILITIES
Life/Health reserves for insurance and investment contracts
increased by € 18.9 BN to € 490.9 BN. The € 5.3 BN increase in aggregate
policy reserves and other reserves before foreign currency translation
effects was mainly driven by our operations in Germany (€ 7.5 BN) and
the United States (€ 6.8 BN, before foreign currency translation effects)
and partly offset by the sale of our South Korean business (€ (10.8) BN,
before foreign currency translation effects). Reserves for premium
refunds increased by € 10.7 BN, due to higher unrealized gains to be
shared with policyholders. Favorable foreign currency translation
effects mainly resulted from the stronger U.S. Dollar (€ 2.8 BN).
LIFE/HEALTH LIABILITIES
56
As of 31 December 2016, the business segment's gross reserves for
loss and loss adjustment expenses and discounted loss reserves
amounted to € 65.7 BN, compared to € 65.1 BN at year-end 2015. On a
net basis, our reserves, including discounted loss reserves were
almost unchanged at € 57.3 BN.¹
LIABILITIES
C - Group Management Report
55
Annual Report 2016 - Allianz Group
3- Equity gearing is defined as the ratio of our equity holdings allocated to the shareholder after policyholder
participation and hedges to shareholders' equity plus off-balance sheet reserves less goodwill.
2- Excluding self-originated German private retail mortgage loans. For 3%, no ratings were available.
1- This does not include non-controlling interests of € 3,052 MN and € 2,955 MN as of 31 December 2016 and
31 December 2015, respectively. For further information, please refer to note 20 to the consolidated financial
statements.
Our exposure to equities increased due to positive developments
on major equity markets. Our equity gearing³ remained almost
unchanged at 23% (31 December 2015: 24%), as the increase in this
exposure was accompanied by increases in shareholders' equity and
hedging of the risen exposure against share price declines.
and 0.2%, with unrealized gains (gross) of € 3,862 MN, € 1,188 MN and
€ 40 MN. Our covered bonds portfolio contained 41% (31 December
2015: 42%) German Pfandbriefe, backed by either public-sector loans
or mortgage loans. The portfolio shares of French, Spanish and Italian
covered bonds were at 16%, 9% and 8% (31 December 2015: 16%, 10%
and 8%).
Our well-diversified exposure to debt instruments went up
mainly due to a further decrease in interest rates – from their already
low level of year-end 2015. However, the increase was partly offset by
realizations. About 94% of this portfolio was invested in investment-
grade bonds and loans.² Our government bonds portfolio contained
– amongst others – bonds from Italy, Spain and the United Kingdom,
representing shares of our debt instruments portfolio of 4.3%, 2.0%
Our overall asset allocation remained almost unchanged, compared
to 31 December 2015. The increase in assets was caused by unrealized
gains in debt instruments and – to a lesser extent – in equities, mainly
following general market developments in 2016.
100.0
100.0
13.0
PROPERTY-CASUALTY LIABILITIES
Annual Report 2016 - Allianz Group
C - Group Management Report
Liquidity and Funding Resources
€ MN
as of 31 December
Carrying
value
Nominal
value
SENIOR AND SUBORDINATED BONDS ISSUED OR GUARANTEED BY ALLIANZ SE1
Allianz SE has the option to increase its equity capital base
according to authorizations provided by our shareholders. The fol-
lowing table outlines Allianz SE's capital authorizations as of
31 December 2016:
As of 31 December 2016, the issued capital registered at the Commer-
cial Register was € 1,169,920,000. This was divided into 457,000,000
registered shares with restricted transferability. As of 31 December
2016, the Allianz Group held 1,932,263 (2015: 2,176,362) own shares.
EQUITY FUNDING
C - Group Management Report
40
57
Annual Report 2016 - Allianz Group
Allianz SE's access to external funds depends on various factors such
as capital market conditions, access to credit facilities, credit ratings,
and credit capacity. The financial resources available to Allianz SE in
the capital markets for short-, mid- and long-term funding needs are
described below. In general, mid- to long-term financing is covered
by issuing senior or subordinated bonds or ordinary shares.
FUNDING SOURCES
Allianz SE ensures adequate access to liquidity and capital for our
operating subsidiaries. The main sources of liquidity available for
Allianz SE are dividends received from subsidiaries and funding pro-
vided by capital markets. Liquidity resources are defined as readily
available assets - specifically cash, money market investments, and
highly liquid government bonds. Our funds are primarily used for
interest payments on our debt funding, operating costs, internal and
external growth investments, and dividends to our shareholders.
LIQUIDITY RESOURCES AND USES
The responsibility for managing the funding needs within the Group,
maximizing access to liquidity sources, and minimizing borrowing
costs lies with Allianz SE. We therefore comment on the liquidity and
funding resources of Allianz SE in the following sections. Restrictions
on the transferability of capital within the Group result mainly from
the capital maintenance rules under applicable company laws as
well as from the regulatory solvency capital requirements for regu-
lated Group companies.
Organization
The Allianz Group's liquidity management is based on policies and
guidelines approved by the Allianz SE Board of Management.
Allianz SE and each of the operating entities are responsible for man-
aging their respective liquidity positions, while Allianz SE provides
central cash pooling for the Group. Capital allocation is steered by
Allianz SE for the entire Group. This structure allows the efficient use
of liquidity and capital resources and enables Allianz SE to achieve
the desired liquidity and capitalization levels for the Group and its
operating entities.
Liquidity management
of our operating entities
INSURANCE OPERATIONS
The major sources of liquidity for our operational activities are pri-
mary and reinsurance premiums received, reinsurance receivables
collected, investment income, and proceeds generated from the
maturity or sale of investments. These funds are mainly used to pay
claims arising from the Property-Casualty insurance business and
related expenses, life policy benefits, surrenders and cancellations,
acquisition costs, and operating costs.
We receive a large part of premiums before payments of claims
or policy benefits are required, generating solid cash flows from our
insurance operations. This allows us to invest the funds in the interim
to create investment income.
Interest
expense
€ MN
Our insurance operations also carry a high proportion of liquid
investments, which can be converted into cash to pay for claims.
Generally, our investments in fixed income securities are sequenced
to mature when funds are expected to be needed.
ASSET MANAGEMENT OPERATIONS
Within our Asset Management operations, the most important sources
of liquidity are fees generated from asset management activities.
These are primarily used to cover operating expenses.
BANKING OPERATIONS
The major sources of liquidity in our Banking operations include
customer deposits, interbank loans, and interest and similar income
from our lending transactions. The most important uses of funds are
the issuance of new loans and investments in fixed income securities.
The liquidity of our Banking operations is largely dependent on the
ability of our private and corporate customers to meet their payment
obligations arising from loans and other outstanding commitments.
Our ability to retain our customers' deposits is equally important to us.
Liquidity management
and funding of Allianz SE
The overall liquidity of our insurance operations depends on
capital market developments, interest rate levels, and our ability to
realize the market value of our investment portfolio to meet insur-
ance claims and policyholder benefits. Other factors affecting the
liquidity of our Property-Casualty insurance operations include the
timing, frequency, and severity of losses underlying our policies and
policy renewal rates. In our Life operations, liquidity needs are gener-
ally influenced by trends in actual mortality rates compared to the
assumptions underlying our life insurance reserves. Market returns,
crediting rates and the behavior of our life insurance clients - for
example regarding the level of surrenders and withdrawals - can also
have significant impacts.
(867)
All of the above remains subject to a sustainable Solvency II ratio
above 160%, which is substantially below our current level of 218%
and 20 percentage points lower than our day-to-day Solvency II ratio
target range of 180 to 220%.
78
Allianz also aims to keep the regular dividend per share at least
at the level paid in the previous year. However, the Board of Manage-
ment and the Supervisory Board of Allianz SE have decided to simplify
Group capital management to make it more flexible. Going forward,
Allianz will return capital to its shareholders on a flexible basis,
rather than following a formulaic approach. Return of capital to share-
holders will no longer be coupled to the unused budget for external
growth and a three-year timeframe.
1,500
Management's overall assessment
of the current economic situation of
the Allianz Group
Overall, at the date of issuance of this Annual Report and given cur-
rent information regarding natural catastrophes and capital market
trends - in particular foreign currency, interest rates, and equities –
the Board of Management has no indication that the Allianz Group is
facing any major adverse developments.
1 - This represents the management's current intention and may be revised in the future. Also, the decision
regarding dividend payments in any given year is subject to specific dividend proposals by the Manage-
ment and Supervisory Boards, each of which may elect to deviate if appropriate under the then prevailing
circumstances, as well as to the approval of the Annual General Meeting.
2- For further information on subsequent events, please refer to note 44 to the consolidated financial
statements.
Cautionary note regarding forward-looking statements
The statements contained herein may include prospects, statements of future expectations,
and other forward-looking statements that are based on management's current views and
assumptions and involve known and unknown risks and uncertainties. Actual results, perfor-
mance, or events may differ materially from those expressed or implied in such forward-
looking statements.
Such deviations may arise due to, without limitation, (i) changes of the general economic
conditions and competitive situation, particularly in the Allianz Group's core business and core
markets, (ii) performance of financial markets (particularly market volatility, liquidity and
credit events), (iii) frequency and severity of insured loss events, including natural catas-
trophes, and the development of loss expenses, (iv) mortality and morbidity levels and trends,
(v) persistency levels, (vi) particularly in the banking business, the extent of credit defaults,
(vii) interest rate levels, (viii) currency exchange rates, including the Euro/u.s. Dollar exchange
rate, (ix) changes in laws and regulations, including tax regulations, (x) the impact of acquisi-
tions, including related integration issues and reorganization measures, and (xi) general
competitive factors, in each case on a local, regional, national, and/or global basis. Many of
these factors may be more likely to occur, or more pronounced, as a result of terrorist activities
and their consequences.
No duty to update
The company assumes no obligation to update any information or forward-looking statement
contained herein, save for any information required to be disclosed by law.
54
Through capital management, Allianz Group aims for a healthy
balance between an attractive yield and investment in profitable
growth. We will continue to return 50% of Allianz Group's net income
(attributable to shareholders) to shareholders in the form of a regular
dividend.
Annual Report 2016 - Allianz Group
Balance Sheet Review
Shareholders' equity1
SHAREHOLDERS' EQUITY
€ MN
2016
as of
2015
Delta
Shareholders' equity
Paid-in capital
as of
31 December 31 December
28,928
28,928
C - Group Management Report
In addition, Allianz SE has decided to launch a share buy-back
program with a volume of up to € 3.0 BN as part of a previously
announced plan to return unused capital from the Group's external
growth budget from the period 2014 to 2016. The buy-back program
started in February 2017 and is envisaged to last no longer than 12
months. Allianz SE will cancel all repurchased shares.
For 2016, the Board of Management and the Supervisory Board of
Allianz SE propose a dividend of € 7.60 per share.
Expected dividend development1,2
Management's assessment of
expected revenues and earnings for 2017
In 2016, our total revenues amounted to € 122.4 BN, a 2.2% decrease on
a nominal and a 0.8% decrease on an internal basis compared to 2015.
We expect a rather flat revenue development in 2017, with Property-
Casualty and Asset Management revenues advancing, while Life/
Health revenues are likely to be under pressure due to our selective
focus on profitable growth.
Our operating profit was near the upper end of our target range
in 2016, hitting € 10.8 BN. As of 2017, we will update our operating
profit definition and exclude restructuring charges from the operat-
ing profit unless they are shared with policyholders. Under this
updated definition, our operating profit for 2016 would have been
€ 10.9 BN, with the delta of € 0.1 BN essentially attributable to the Prop-
erty-Casualty business segment. For 2017, we envisage an operating
profit of € 10.8 BN, plus or minus € 0.5 BN, as we expect a slightly nega-
tive development in the Property-Casualty and Life/Health business
segments and a slightly positive development in the Asset Manage-
ment and Corporate and Other business segments - all based on the
updated operating profit definition.
Our net income attributable to shareholders increased, reaching
€ 6.9 BN in 2016. Consistent with our disclosure practice in the past
and given the susceptibility of our non-operating results to adverse
capital market developments, we do not provide a precise outlook
for net income. However, since our outlook presumes no major dis-
ruptions of capital markets, we anticipate a rather stable net income
for 2017.
PROPERTY-CASUALTY INSURANCE
We expect our revenues to increase by approximately 2% in 2017
(2016: (0.1) %), supported by favorable volume effects and - to a lesser
extent - price effects. This growth is supported by the acquisition of
the commercial portfolio of Aegon in mid-2016, strengthening our
position in the attractive Benelux property-casualty market.
Most of the premium growth in 2017 is expected to come from
our European core markets, including the United Kingdom, Germany,
and Spain. Top-line development will further be supported by positive
trends at Allianz Worldwide Partners, where our B2B2C business
activities are bundled.
We believe the overall slow rise in prices we witnessed in a num-
ber of markets in 2016 will continue in 2017. However, as in previous
years, we will keep our focus on achieving strong underwriting results
by adhering to our strict underwriting discipline and will accept a
lower top line if target margins cannot be achieved.
In 2016, our combined ratio was 94.3%. We expect to at least
maintain it at this level in 2017, before reaching our 2018 ambition of
94% or better. This rests on our expectation that the aggregate effect
of improvements in pricing, claims management, and productivity
will compensate for any underlying claims inflation. Despite the high
volatility of natural catastrophes in recent years, we have assumed
that impacts will be in line with our historic claims experience.
As the low-interest-rate environment is likely to persist, invest-
ment income will remain under pressure due to the rather short
duration of investments in the Property-Casualty business segment.
We will continue to take measures to adapt our investment strategy
to ongoing market conditions.
Overall, we expect our 2017 operating profit to be in the range of
€ 5.0 BN to € 5.6 BN (2016: € 5.5 BN, based on the updated operating
profit definition, i.e. excluding € 0.1 BN restructuring charges).
LIFE/HEALTH INSURANCE
In 2016, our operating profit of € 4.1 BN exceeded our target range. For
2017, we expect operating profit in our Life/Health business segment
to be between € 3.7 BN and € 4.3 BN.
As pointed out in 2015, ROE is one of the key performance indica-
tors for the steering of our Life/Health business. In 2017, we expect the
ROE of the Life/Health business segment to be between 10.0% and 12.0%.
We will remain focused on shifting our new business mix
towards capital-efficient, unit-linked, and protection products –
thereby addressing customer needs in light of the prolonged low-
yield environment – while maintaining strong shareholder returns,
and building on our strong track record of product innovation.
Furthermore, we will continue to actively manage both our new and
in-force business through continuous repricing, expense manage-
ment, asset/liability management, and crediting strategies in order
to mitigate the impacts of difficult market conditions, particularly
the low interest rates, and maintain our profitability targets.
It must be noted, however, that market volatility, along with the
level of net harvesting, can significantly affect the Life/Health busi-
ness segment results.
We closely monitor the capital positions of the Group and at the
operating entity level. Additionally, we will continue to optimize our
interest rate and spread sensitivities through asset/liability manage-
ment and life product design.
We expect to have steady access to financial markets at reason-
able cost in order to maintain our strong financial flexibility. This is
supported by prudent steering of our liquidity resources and a matu-
rity profile focusing on a long-dated average remaining term.
The Allianz Group maintains a healthy liquidity position, combined
with superior financial strength and capitalization well above what
supervisory authorities currently require.
development and capitalization
Financing and liquidity
Our Corporate and Other business segment recorded an operating
loss of € 0.9 BN in 2016. As we expect an improvement in the operating
result of the Holding & Treasury reportable segment – mainly attrib-
utable to lower administrative expenses -, we predict an operating
loss in the range of € 0.7 BN to € 0.9 BN for Corporate and Other (includ-
ing consolidation) in 2017.
Retained earnings
-
C - Group Management Report
53
Annual Report 2016 - Allianz Group
In 2017, we expect a cost-income ratio of well below 65% (2016:
63.4%), supported by our focus on expense discipline and operational
excellence. Mid-term we expect our cost-income ratio to be at 60%.
We see a challenging environment for the asset management industry
again in 2017. That said, we expect the positive trend in PIMCO's third-
party AuM net inflows that we observed over the last two quarters of
2016 to continue into 2017, supported by net inflows from AllianzGI
in 2017. Market returns are expected to contribute moderately to a
positive development of total AuM. While performance fees are
expected to decrease slightly, an increase in management and loading
fees should lead to a slight increase in operating revenues, which
should more than offset a moderate increase of operating expenses.
Therefore, we envisage our operating profit to be in the range of € 2.0 BN
and € 2.6 BN in 2017 (2016: € 2.2 BN).
ASSET MANAGEMENT
CORPORATE AND OTHER
A 10% weakening or strengthening of the U.S. Dollar versus
our planned exchange rate of 1.11 to the Euro would have
a negative or positive impact on operating profits of approxi-
mately € 0.3 BN, respectively.
27,336
3,114
%
%
%-P
Debt instruments; thereof:
577.3
568.1
9.1
88.4
Banks
3.8
29.0
32.8
24.6
164.9
€ BN
189.5
(1.8)
17.4
15.6
(8.8)
98.7
89.9
Covered bonds
(1.3)
38.3
37.0
(4.0)
217.5
213.6
Government bonds
Corporate bonds (excl. banks)
€ BN
€ BN
Type of investment
Foreign currency translation
adjustments
(754)
(926)
172
Unrealized gains and losses (net)
11,830
10,920
Total
67,341
63,144
910
4,196
The main driver for the increase in shareholders' equity was the net
income attributable to shareholders, amounting to € 6,883 MN. The
increase was supported by an upswing in unrealized gains, primarily
on debt securities, which resulted from a further drop in interest
rates. It was partly offset, however, by the dividend payout in May
2016, which totaled € 3,320 MN.
Total assets and total liabilities
As of 31 December 2016, total assets amounted to € 883.8 BN and total
liabilities were at € 813.4 BN. Compared to year-end 2015, this repre-
sented an increase of € 34.9 BN for total assets and of € 30.6 BN for total
liabilities.
The following section mainly focuses on our financial invest-
ments in debt instruments, equities, real estate, and cash, as these
reflect the major developments in our asset base.
STRUCTURE OF INVESTMENTS - PORTFOLIO OVERVIEW
The following portfolio overview covers the Allianz Group assets held
for investment, which are mainly driven by our insurance businesses.
Delta
2015
2016
Delta
2015
2016
24,222
31 December
as of
31 December
31 December
31 December
as of
as of
ASSET ALLOCATION AND FIXED INCOME PORTFOLIO OVERVIEW
as of
(945)
Average U.S. Dollar to Euro exchange rate of 1.11.
A 100 basis point increase or decrease in interest rates would,
respectively, either raise or lower operating profits by approx-
imately € 0.1 BN in the first year following the rate change.
No major disruptions of capital markets.
Operating revenues
245
213
32
Operating expenses
(206)
(176)
(30)
Operating result
39
37
2
Earnings summary
Our operating result improved in 2016 due to the positive develop-
ment in Holding & Treasury which by far overcompensated the decline
in Banking.
ALTERNATIVE INVESTMENTS
Our net loss remained at the previous year's level, as various
effects offset one another. We recorded a higher non-operating invest-
ment result as well as lower income taxes, offset by the absence of
positive effects from an adapted cost allocation scheme for the pen-
sion provisions.
Banking's operating result decreased. The year was burdened by
a further tightening of interest rate spreads, which led to lower net
interest results in almost all our banking units. A reduction in our
loan loss provisions could not fully offset this development.
The operating result generated by Alternative Investments
remained stable.
1-Consolidation included. For further information about our Corporate and Other business segment, please
refer to note 5 to the consolidated financial statements.
Annual Report 2016 - Allianz Group
Outlook 2017
Overview: 2016 results versus previous year's outlook¹
C - Group Management Report
2016 RESULTS VERSUS PREVIOUS YEAR OUTLOOK FOR 2016
ALLIANZ GROUP
PROPERTY-CASUALTY
LIFE/HEALTH
ASSET MANAGEMENT
OUTLOOK 2016 - AS PER ANNUAL REPORT 2015
Operating profit of € 10.5 BN, plus or minus € 0.5 BN.
Protection of shareholders' investments, while
continuing to provide attractive returns and dividends.
Selective profitable growth.
In Holding & Treasury, our operating result increased. This was
mainly driven by lower administrative expenses, caused by a decline
in pension costs. Also, our income from financial assets and liabilities
carried at fair value increased due to the valuation of seed money
funds.
(20)
94
74
Net income (loss)
(994)
(1,003)
9
KEY FIGURES REPORTABLE SEGMENTS
€ MN
HOLDING & TREASURY
2016
2015
Delta
Operating revenues
683
562
Operating expenses
(1,664)
(1,639)
121
(25)
Operating result
78
(1,032)
(955)
Operating expenses
(98)
Growth in gross premiums written by
approximately 2.0%.
1127
Operating revenues
BANKING
96
(1,076)
(981)
Operating result
1,029
No disruptive fiscal or regulatory interference.
Level of claims from natural catastrophes at expected average
levels.
Operating profit in the range of € 5.2 BN to € 5.8 BN.
Pressure on operating investment income (net) to
continue due to reinvestments in a consistently low
interest rate environment.
After a sometimes rocky but ultimately benign year for global equities
in 2016, 2017 brings the prospect of increased volatility. This is due in
particular to geopolitical uncertainty, as the new administration
comes to power in the United States and elections are held across
Europe.
Global economic and political divergence creates uncertainty
and volatility thus involving risks, but it also provides opportunities.
For instance, strong economic trends, such as job and wage growth,
as well as a pick-up in inflation should allow the Federal Reserve to
continue with gradual rate increases, driving treasury yields higher.
Bonds are particularly interesting for the growing number of retirees
in developed countries who are looking for a stable stream of income;
also, liability-driven investors may look to further de-risk into bonds
as yields become more attractive.
2017 is expected to be another challenging and disruptive year
for the asset management industry. Markets are volatile and there is
some political uncertainty. In addition, industry profitability remains
under pressure from both continuous flows into passive products
and rising distribution costs. However, digital channels are expected
to continue gaining prominence. Measures aimed at strengthening
regulatory oversight and reporting could also affect profitability in
the asset management sector. In order to continue growing, it is
vital for asset managers to keep sufficient business volumes, ensure
efficient operations, and maintain strong investment performance.
Overview: outlook and assumptions 2017
for the Allianz Group
OUTLOOK 2017
ALLIANZ GROUP
PROPERTY-CASUALTY
LIFE/HEALTH
In the life sector the overall picture is quite similar. Specifically,
we expect advanced markets to maintain their (modest) growth as
demand benefits from rising employment and new product offers.
Emerging markets, on the other hand, will show stronger perfor-
mance. Asia might shift down a little after the extraordinary growth
spurt seen in 2016; on a general note, however, rising incomes, urban-
ization, and social security reforms should remain strong engines for ASSET MANAGEMENT
growing insurance demand. All in all, we expect global premium
revenue to increase by 4.0% to 5.0% in 2017 (in nominal terms, adjusted
for foreign currency translation effects). To safeguard profitability,
Operating profit of € 10.8 BN, plus or minus € 0.5 BN.
Protection of shareholders' investments,
while continuing to provide attractive returns and dividends.
Selective profitable growth.
Growth in gross premiums written: approximately 2%
on a nominal basis.
Operating profit in the range of € 5.0 BN to € 5.6 BN.
Asset management industry outlook
Progress towards our combined ratio ambition of 94%
or better by 2018.
Continue with selective focus on profitable growth and further
shift new business mix towards capital efficient, unit-linked,
and protection products. Considering the disposal of our
South Korean business, revenues are expected to be in the
range of € 60.0 BN to € 66.0 BN.
Operating profit between € 3.7 BN and € 4.3 BN.
RoE between 10.0% and 12.0%.
Pressure on investment income due to low interest rates
and continued capital market uncertainty.
Slight increase in total AuM due to positive market return,
supported by moderate net inflows at PIMCO and at AllianzGI.
Operating profit in the range of € 2.0 BN to € 2.6 BN.
Cost-income ratio well below 65%.
52
52
Annual Report 2016 - Allianz Group
C - Group Management Report
ASSUMPTIONS
Our outlook assumes no significant deviations from the following
underlying assumptions:
-
Global economic growth is set to continue.
Modest rise in interest rates expected.
Pressure on operating investment income (net) to continue
due to reinvestments in a consistently low interest rate
environment.
insurers will continue to review both their product mixes and their
investment portfolios. As a result, overall profitability should not
deteriorate any further.
In the property-casualty sector, growth in advanced markets
should remain rather stable: The ongoing recovery supports demand,
but pricing is still a concern. For advanced markets, political insta-
bility could prove to be the biggest challenge in 2017, as growing pro-
tectionism and the looming Brexit drive structural changes in the
industry. The outlook for emerging markets is much brighter: Asia is
expected to roar ahead, Latin America will stabilize, and Eastern
Europe will continue its recovery. Overall, we expect global premium
revenue growth to range between 4.0% and 5.0% in 2017 (in nominal
terms, adjusted for foreign currency translation effects). Given the
still challenging pricing outlook and weak investment income, overall
profitability might not improve but stay more or less flat.
To sum up: In 2017, the industry's top line will continue to grow
modestly- though some lines of business such as trade-dependent
marine and rate-sensitive savings might struggle - while the bottom
line remains under pressure from weak investment income and the
need to build new, digital business models.
Prioritizing profitability over growth and continuing to
shift new business mix towards unit-linked, capital-
efficient and protection products. Addressing customer
needs in the prolonged low yield environment. Revenues
are expected to be in the range of € 62.0 BN to € 68.0 BN.
Operating profit between € 3.3 BN and € 3.9 BN.
ROE¹ between 9.0% and 11.0%.
Pressure on investment income due to low interest rates
and continued capital market uncertainty.
Slight increase in total assets under management (AuM)
due to positive market return, supported by a return to
positive net flows at PIMCO and continued solid net
inflows at AllianzGI.
Operating profit in the range of € 1.9 BN to € 2.5 BN.
Cost-income ratio of well below 65%.
RESULTS 2016
Operating profit of € 10.8 BN.
Return on equity (ROE)1 amounted to 12.0% (2015: 12.5%). Proposed dividend at € 7.60
(2015: € 7.30) per share. Stable payout ratio of 50%.
Property-Casualty with continued sound risk selection and strong internal growth, Life/Health
with growing asset base and solid new business margins, but Asset Management with net outflows.
Gross premiums slightly declined by 0.1%, hence almost remained stable. A strong internal
growth of 3.1% was offset by negative foreign currency translation effects as well as by
divestitures such as the sale of Fireman's Fund personal insurance business.
Operating profit of € 5.4 BN is slightly below the mid-point of our target range. A low impact of
natural catastrophes was partially compensated by large losses. Although Argentina and Brazil
improved during 2016, the delay of their turnaround impacted the underwriting result.
Combined ratio was strong at 94.3% and on track towards our ambition for 2018.
As expected, operating investment income (net) declined across our subsidiaries due to the
low interest rate environment.
Revenues of € 64.6 BN at the mid-point of outlook. Strong growth from capital-efficient products
in Germany and the United States was more than offset by lower unit-linked sales in Italy and
Taiwan.
Operating profit of € 4.1 BN above target range, driven by favorable investment margin
supported by higher level of net harvesting from further portfolio de-risking actions.
ROE¹ at 10.3% above mid-point of target range.
Operating investment result reached € 21.3 BN, as lower interest and similar income was
compensated by higher realized gains.
Total AuM grew by € 108 BN to € 1,871 BN as of 31 December 2016. The increase was driven by
positive market returns and foreign currency translation effects. The consolidation of Rogge
Global Partners in the second quarter of 2016 added € 32 BN of third-party AuM. In the course of
2016, our Asset Management business segment saw third-party AuM net outflows of € 20 BN
coming from both entities. However, as expected, PIMCO third-party net flows turned positive
for the last two quarters of 2016.
Operating profit amounted to € 2.2 BN and meets the mid-point of the target range.
With a cost-income ratio of 63.4% our Asset Management business segment came in well
below 65%.
1- Represents the ratio of net income to the average total equity, excluding unrealized gains/losses on bonds, net of shadow accounting, at the beginning of the year and at the end of the year.
Economic outlook?
While the macroeconomic environment, despite all the uncer-
tainties, offers some glimpses of hope, the challenges on the micro-
economic front remain formidable: As technological progress and
the digitization of our life gather speed, established business models
get under enormous pressure. The industry has to adapt quickly to
defend its franchise against new competitors. In combination with
the new regulatory regime (Solvency II), which brings more clarity on
capital positions, this restructuring process could act as a possible
catalyst for more industry consolidation.
In 2017, things are likely to start moving in the right direction for the
insurance industry: The global economy is set to shift up a gear, infla-
tion will return - which will set the scene for monetary normalization
- and last but not least, interest rates are expected to rise. That said,
the overall momentum will probably be too weak to finally escape the
low-growth, low-yield environment; so, for the time being, we expect
premium growth to remain modest and investment income to
remain under pressure. Moreover, political risks could easily derail
the economy and knock markets from their path to normalization.
_
Insurance industry outlook
we predict yields to climb modestly towards 1% in the course of 2017;
for 10-year U.S.government bonds, yields may end the year in a range
between 2.5% and 3%. While the expected Federal Reserve rate hikes
will weigh on the Euro, a number of other factors will support it;
above all, the expected rise in the U.S. current-account deficit as well
as the speculation - which is likely to increase towards year-end -
about the timing and manner of the European Central Bank's exit
from its bond purchasing program. We expect the Dollar-to-Euro
exchange rate to close the year at about 1.10 (2016: 1.05).
C - Group Management Report
Progress towards our combined ratio ambition
of 94% or better by 2018.
51
Modestly rising yields on 10-year U.S. government bonds and
higher inflation rates in the Eurozone will exert some upward pressure
on European benchmark bond yields in 2017. However, with short-
term rates at zero, there are limited prospects of markedly higher
yields on longer-term bonds. For 10-year German government bonds,
The uncertain global economic and political environment (e.g.
rise of populism, high emerging market indebtedness, risk of E.U. dis-
integration) is likely to result in higher financial-market volatility this
year. As far as monetary policy is concerned, assuming that the labor
market remains tight and inflation rates continue to move up, the
Federal Reserve is likely to continue to hike interest rates this year. By
contrast, we do not see any major change in the European Central
Bank's expansionary monetary policy stance.
upward movement in oil prices and rising inflation will weigh on pri-
vate consumption, household spending will be supported by rising
employment. The group of emerging market economies is set for a
moderate acceleration of growth, mainly driven by a gradual stabiliza-
tion in the group's heavyweights, Russia and Brazil, and by a recovery
in commodity-exporting countries. Overall, global output is likely to
expand by about 2.8% in 2017, compared with 2.4% in 2016. Industrial-
ized countries are expected to register gross domestic product
growth of 1.9%, while in emerging markets growth could increase to
4.1% from the 3.6% seen in 2016.
2- The information presented in the sections "Economic outlook", "Insurance industry outlook", and "Asset
management industry outlook" is based on our own estimates.
1- For more detailed information on the previous year's outlook for 2016, please see the Annual Report 2015
from page 92 onward.
Following a slight acceleration in the final quarter of 2016, the world
economy currently finds itself in fairly good shape and has made a
positive start into the year 2017. In the industrialized countries,
growth prospects are quite favorable overall. In the United States,
despite the fact that there is still not much clarity about the specifics
of economic policy under the new U.S. administration, a change in the
policy mix is on the horizon: Monetary policy will provide somewhat
less stimulus for the economic development, whereas fiscal policy
will do more as the new U.S. administration is expected to deliver on
the promise to cut taxes and launch investment initiatives. In the
course of 2017, these measures are expected to buoy economic
growth, despite some dampening effects such as higher inflation. All
in all, the U.S. economy is likely to expand by 2.2% this year. In the
Eurozone, the economic recovery is likely to continue. We expect real
gross domestic product to increase by 1.8% (2016: 1.7%). While the
Annual Report 2016 - Allianz Group
Subordinated bonds
88.8
1,422
1,400
2,734
15,925
2015
Senior and subordinated bonds
16,450
2,347
18,797
2015
Senior bonds
Subordinated bonds
1- Based on carrying value.
Total
1 Based on nominal value.
1,985
3,227
11,962
1,498
1,985
15,189
2- € 1.4 BN subordinated bond called for redemption effective 17 February 2017.
Interest expenses on senior bonds decreased, mainly due to the
depreciation of the British Pound against the Euro. For subordinated
bonds, the increase of interest expenses was primarily driven by
higher outstanding volumes on average in 2016.
58
Annual Report 2016 - Allianz Group
(0.4)
1,422
1,498
12,086
Total
20,165
Senior bonds
1,400 2
2015
Subordinated bonds
1 Based on nominal value.
1,500
1,000
500
Funding in non-Euro currencies enables us to diversify our investor
base or to take advantage of favorable funding costs in those markets.
Funds raised in non-Euro currencies are incorporated in our general
hedging strategy. As of 31 December 2016, approximately 18.4%
(2015: 12.5%) of long-term debt was issued or guaranteed by Allianz SE
in currencies other than the Euro.
as of 31 December
Up to 1 year
> 1 year up to
5 years
Over 5 years
CURRENCY ALLOCATION OF ALLIANZ SE'S SENIOR AND SUBORDINATED BONDS'
€ MN
Contractual maturity date
16,450
3,715
as of 31 December
Subordinated bonds
Senior and subordinated bonds
3,840
Senior bonds
2,734
2016
Total
Non-Euro
Euro
2016
This comprehensive framework ensures that risks are identified, ana-
lyzed, assessed, and managed consistently across the Group. Our risk
appetite is defined by a clear limit structure and a risk strategy con-
sistent with the underlying business strategy of the Group. Close risk
monitoring and reporting allows us to detect potential deviations
from our risk tolerance at an early stage at both the Group and oper-
ating entity levels.
Promotion of a strong risk management culture, supported by a
robust risk governance structure.
Consistent, proportional application of an integrated risk capital
framework across the Group to protect our capital base and sup-
port effective capital management.
Integration of risk considerations and capital needs into manage-
ment and decision-making processes by attributing risk and allo-
cating capital to the various business segments, products, and
strategies.
Our risk management system is based on the following four
essential elements:
OUR STRATEGY
Risk strategy and risk appetite: Our risk strategy clearly defines
our risk appetite. It ensures that rewards are appropriate considering
the risks taken and that the delegated authorities are in line with our
overall risk-bearing capacity. The risk-return profile is improved by
integrating the risk considerations and capital needs into decision-
making processes. This also keeps risk strategy and business objec-
tives consistent with each other and allows us to take opportunities
within our risk tolerance.
Risk reporting and monitoring: Our comprehensive qualitative
and quantitative risk reporting and monitoring framework provides
senior management with the transparency and risk indicators to help
them decide on our overall risk profile and assess whether it falls
within delegated limits and authorities. For example, risk dash-
boards, internal risk allocation, and limit consumption reports are
regularly prepared, communicated and monitored.
Communication and transparency: Finally, transparent and
robust risk disclosure provides the basis for communicating this
strategy to our internal and external stakeholders, ensuring a sustain-
able positive impact on valuation and financing. It also strengthens
the risk awareness and risk culture throughout the entire Group.
As a provider of financial services, we consider risk management to
be one of our core competencies. It is therefore an integral part of our
business process. Our risk management framework is risk-based and
covers all operations including IT, processes, products, and depart-
ments as well as subsidiaries within the Group. The key elements of
our risk management framework are:
Risk underwriting and identification: A sound risk underwriting
and identification framework forms the foundation for adequate risk-
taking and management decisions such as individual transaction
approvals, new product approvals, and strategic asset allocations.
The framework includes risk assessments, risk standards, valuation
methods, and clear minimum standards for underwriting.
RISK MANAGEMENT FRAMEWORK
3- For German Speaking Countries, policyholder participation on revaluation of DAC/URR capitalization/
amortization.
For this the risk management system described in the following
is applied.
We closely monitor the capital position of the Group and its
operating entities along each of these dimensions, and apply regular
stress tests (standardized, historical, and reverse stress test scenarios
as well as monthly stress scenarios focusing on current and possible
future developments). This allows us to take appropriate measures to
ensure our continued capital and solvency strength.
In addition, we take into account the requirements of regulators
and rating agencies. While capital requirements imposed by regula-
tors constitute a binding constraint, meeting rating agencies' capital
requirements and maintaining strong credit ratings are strategic
business objectives of the Allianz Group.
For the benefit of shareholders and policyholders alike, Allianz's aim
is to ensure that the Group is adequately capitalized at all times and
that all operating entities at least meet their respective regulatory
capital requirements. Furthermore, risk capital – reflecting our risk
profile - and cost of capital are important aspects taken into account
in business decisions.
Target and strategy of risk management
Risk and Opportunity Report
C - Group Management Report
61
Annual Report 2016 - Allianz Group
5- Excluding one-off effects from pension revaluation.
4-As per notes to the consolidated financial statements.
1- Prior year figures changed in order to reflect the roll out of profit source reporting to China.
2-As per Group Management Report.
OUR BUSINESS ASPIRATIONS
Risk governance
The Allianz Group seeks to position itself as the world's most trusted
financial institution through a focus on the following:
Group Risk is managed by the Group Chief Risk Officer, who reports
to the board member responsible for Finance, Controlling, and Risk.
Group Risk supports the aforementioned Allianz Group committees
responsible for risk oversight through the analysis and communica-
tion of risk management-related information and by facilitating the
communication and implementation of committee decisions. For
example, Group Risk is operationally responsible for monitoring the
limits for risks that accumulate, including natural disasters and
exposures to financial markets and counterparties.
market leadership: maintaining a commanding position in each
market with superior skills and scale,
In addition, Group Risk independently supports the adequacy of
the operating entities' risk management through the development of
a common risk management framework and by monitoring adher-
ence to Group minimum requirements for methods and processes.
Group Risk strengthens the Group's risk network through regular and
close interaction with the operating entities' management and with
key areas such as the local finance, risk, actuarial, and investment
departments.
(1,707) 5
Group Risk
As a general principle, the "first line of defense" rests with busi-
ness managers in the local operating entities and Allianz Investment
Management units. They are responsible, in the first instance, for
both the risks of and returns on their decisions. Our "second line of
defense" is made up of our independent, global oversight functions
such as Risk, Actuarial, Compliance and Legal. Audit forms the “third
line of defense". On a periodic basis, Group Audit independently
reviews risk governance implementation, as well as compliance with
risk principles, performs quality reviews of risk processes, and tests
adherence to business standards, including the internal control
framework.
A comprehensive system of risk governance is achieved by setting
standards related to organizational structure, risk strategy and appe-
tite, written policies, limit systems, documentation, and reporting.
These standards ensure the accurate and timely flow of risk-related
information and a disciplined approach towards decision-making
and execution at both the global and local level.
AND ROLES IN RISK MANAGEMENT
OVERALL RISK ORGANIZATION
The Group Finance and Risk Committee (GFRC) ensures over-
sight of the Group's and Allianz SE's risk management framework,
acting as a primary early-warning function by monitoring the Allianz
Group's and Allianz SE's risk profiles as well as the availability of
capital. The GFRC also ensures that an adequate relationship between
return and risk is maintained. Additionally, the GFRC defines risk
standards, forms the limit-setting authority within the framework set
by the Board of Management and approves major financing and rein-
surance transactions. Finally, the GFRC supports the Board of Man-
agement with recommendations regarding the capital structure, and
the capital allocation and investment strategy, including strategic
asset allocation.
The Board of Management formulates business objectives and a cor-
responding, consistent risk strategy. The core elements of the risk
framework are set out in the Allianz Group Risk Policy, which is
approved by the Board of Management.
Board of Management
The Risk Committee of the Supervisory Board monitors the effective-
ness of the Allianz risk management and monitoring framework.
Furthermore, it focuses on risk-related developments as well as gen-
eral risks and specific risk exposures.
Supervisory Board
SUPERVISORY BOARD AND BOARD OF MANAGEMENT
Within our risk governance system, the Supervisory Board and Board
of Management of Allianz SE have both, Allianz SE and group-wide
responsibilities and have set up committees to provide them with
support. Examples include:
RISK GOVERNANCE STRUCTURE
The Board of Management of Allianz SE has also defined a strategy
for the management of risks that the Allianz Group faces during the
pursuit of its business strategy. This risk strategy places particular
emphasis on protecting the Allianz brand and reputation, remaining
solvent even in the event of extreme worst-case scenarios, maintain-
ing sufficient liquidity to always meet financial obligations, and pro-
viding resilient profitability.
5. Inclusive Meritocracy: re-inforcing a culture where both people
and performance matter.
4. Growth Engines: systematically exploiting new sources for profit-
able growth,
3. Technical Excellence: creating superior margins, innovation, and
growth through best talents and state-of-the-art skills,
2. Digital by Default: moving from selected leading assets to become
"Digital by Default" everywhere,
1. True Customer Centricity: making superior customer experience
the top priority for all our actions,
In order to achieve these aspirations the Board of Management of
Allianz SE has defined a clear business strategy consisting of five
pillars:
OUR BUSINESS STRATEGY
C - Group Management Report
Annual Report 2016 - Allianz Group
62
These aspirations have been translated into clear ambitions for 2018.
With regard to financial performance, we strive for a return on equity
(excluding unrealized gains/losses on bonds net of shadow account-
ing) of 13%, while growing our earnings per share at a compound
annual growth rate of 5%. To ensure the sustainability of our perfor-
mance, we have set ourselves health targets for customer loyalty and
employee engagement: We expect at least 75% of our businesses to
be or become rated by their customers as Loyalty Leader or above-
market in terms of Net Promoter Score (NPS). At the same time, we
aim to increase our Inclusive Meritocracy Index to 72 % (2016: 70%). We
are making good progress in achieving these objectives.
customer centricity: practicing relentless execution centered on
customers while outperforming competition.
portfolio strength: establishing a strong and high-quality portfolio
in large and attractive markets,
4
3- As per notes to the consolidated financial statements.
4
Definition: URR amortized
(1,878)
(1,916)
Amortization, unlocking and true-up of DAC²
3,364
3,586
Capitalization of DAC
4
(6,922)
4
(6,612)
4
Acquisition and administrative expenses (net)³
236
187
Scope
on reinsurance business ceded
Administrative expenses
880
1,022
Definition: policyholder participation³
115
77
on reinsurance business ceded
528
509
Definition: URR capitalized
64
(1,829)
Definition: policyholder participation³
(175)
(1,006)
Administrative expenses4
on reinsurance business ceded
Administrative expenses
(194)
119
139
(213)
Scope
Definitions
(1,636)
(1,760)
Administrative and other expenses²
(5,215)
(4,782)
Acquisition costs4
115
77
on reinsurance business ceded
Commissions and profit received
(3,432)
(3,142)
Amortization, unlocking and true-up of DAC
(374)
(409)
Scope
4-Excluding one-off effects from pension revaluation.
1- Prior year figures changed in order to reflect the roll out of profit source reporting to China.
2-As per Group Management Report.
Operating entities
(881)
Operating entities are responsible for their own risk management,
including adherence to both external requirements (for example,
those imposed by local regulators) and internal group-wide standards.
The operating entities' Boards of Management are responsible for
setting and approving a local risk strategy during the annual Strategic
and Planning Dialogues with the Group and for ensuring operating
entities' adherence to their risk strategy.
The loss profile of a given portfolio is obtained through a Monte
Carlo simulation, taking into account interdependencies and expo-
sure concentrations per obligor segment. To reflect portfolio-specific
diversification effects, the loss profiles are calculated at different
levels of the Allianz Group structure (pre-diversified). They are then
fed into the overall partial internal risk capital model for further
aggregation across sources of risk to derive group-diversified internal
credit risk.
Annual Report 2016 - Allianz Group
1- As mentioned under Internal risk capital framework, Allianz Life us is based on third country equivalence.
2- For further information about participating life business, please refer to note 16 to the consolidated financial
DIVERSIFICATION AND CORRELATION ASSUMPTIONS
Our partial internal risk capital model considers concentration, accu-
mulation, and correlation effects when aggregating results at Group
level. This reflects the fact that not all potential worst-case losses are
likely to materialize at the same time. This effect is known as diversi-
fication and forms a central element of our risk management frame-
work.
VALUATION ASSUMPTIONS: REPLICATING PORTFOLIOS
Since efficient valuation and complex, timely analysis are required
within the context of our partial internal model, we replicate the
liabilities of our Life/Health insurance business as well as for our
internal pension obligations. This technique enables us to represent
all product related options and guarantees, both contractual and dis-
cretionary, by means of standard financial instruments. In the risk
calculation we use the replicating portfolio to determine and revalue
these liabilities under all potentially adverse Monte Carlo scenarios.
In addition, we adjust the risk-free yield curves by a volatility
adjustment in most markets where a volatility adjustment is defined
by EIOPA and approved by the local regulator. This is done to better
reflect the underlying economics of our business, as the cash flows of
our insurance liabilities are, to a large degree, predictable. The advan-
tage of being a long-term investor, therefore, is the opportunity to
invest in bonds yielding spreads over the risk-free return and earning
this additional yield component over the duration of the bonds. Being
a long-term investor considerably mitigates the risk of forced selling
of debt instruments at a loss prior to maturity. Therefore, we reflect
this mitigation using a volatility adjustment spread risk offset, and
view the more relevant risk to be default risk rather than credit spread
risk.
YIELD CURVE AND VOLATILITY ADJUSTMENT ASSUMPTIONS
When calculating the fair values of assets and liabilities, the assump-
tions regarding the underlying risk-free yield curve are crucial in deter-
mining and discounting future cash flows. We apply the methodology
provided by the European Insurance and Occupational Pensions
Authority (EIOPA) within the technical documentation (EIOPA-
BOS-15/035) for the extension of the risk-free interest rate curves
beyond the last liquid tenor.4
ASSUMPTIONS AND LIMITATIONS
For our Asset Management business segment, we assign internal
risk capital requirements based on the sectorial regulatory capital
requirements as defined under Solvency II. The Asset Management
business is mainly affected by operational risks. However, since most
of our Asset Management business is not located within the Euro-
zone, at the Group level it also bears foreign exchange rate risk. Our
Asset Management business is covered by adequate risk controlling
processes, including regular reporting and qualitative risk assess-
ments (such as Top Risk Assessment) to the Group. However, since it
is mainly affected by the two risk types previously mentioned (opera-
tional and foreign exchange rate), and due to the fact that the impact
on total pre-diversified risk capital is minor, risk management with
respect to Asset Management is not discussed in more detail.
Risk capital related to our European banking operations is allo-
cated to the Corporate and Other business segment, based on the
approach applied by banks under the local requirements with respect
to the Basel regulation (Basel standards). Capital requirements for
banks represent an insignificant amount of approximately 1.7%
(2015: 1.5%) of our total pre-diversified risk. Therefore, risk manage-
ment with respect to banking operations is not discussed in more
detail.
Smaller entities within the European Economic Area which are
not covered by the partial internal model are reflected based on their
standard model results. At Group level, the capital requirements for
smaller insurance operating entities outside the European Economic
Area that have only an immaterial impact on the Group's risk profile
are treated with book value deduction³.
COVERAGE OF THE RISK CAPITAL CALCULATIONS
Allianz's partial internal risk capital model covers all major insur-
ance operations¹. This includes the relevant assets (including bonds,
loans, mortgages, investment funds, equities, and real estate) and
liabilities (including the cash flow run-off profile of all technical
reserves as well as deposits, issued debt, and other liabilities). For
with-profit products in the Life/Health business segment, options
and guarantees embedded in insurance contracts - including policy-
holder participation rules - are taken into account.?
Furthermore, there are monthly stress test meetings where
world-wide political and financial developments are examined in
order to understand their potential effects on the Group and to pro-
vide appropriate actions or recommendations to management.
Risk capital is defined as the difference between the current port-
folio value and the portfolio value under adverse conditions depen-
dent on the 99.5% confidence level. Because we consider the impact
of a negative or positive event on all sources of risks and covered busi-
nesses at the same time, diversification effects across products and
regions are taken into account. The results of our Monte Carlo simu-
lation allow us to analyze our exposure to each source of risk, both
separately and in aggregate. In addition, in particular for market
risks, we analyze several pre-defined stress scenarios, based on either
historically observed market movements or hypothetical market
movement assumptions. This modeling approach, therefore, also
enables us to identify scenarios that may have a positive impact on
our solvency situation.
Our partial internal risk capital model is based on a VaR approach
using a Monte Carlo simulation. Following this approach, we deter-
mine the maximum loss in the portfolio value of our businesses in the
scope of the model within a specified timeframe (“holding period”)
and probability of occurrence ("confidence level"). We assume a con-
fidence level of 99.5% and apply a holding period of one year. In the risk
simulation, we consider risk events from all modeled risk categories
("sources of risk") and calculate the portfolio value based on the net
fair value of assets and liabilities under potentially adverse conditions,
including risk mitigating measures like reinsurance contracts or
derivatives.
INTERNAL RISK CAPITAL MODEL
C - Group Management Report
Annual Report 2016 - Allianz Group
1- The Allianz Environmental, Social, Governance (ESG) Board and ESG office are constituted as advisor to
the Board of Management of Allianz SE and will further elevate environmental, social, and governance
aspects in corporate governance and decision-making processes at the Allianz Group.
2-Allianz Life us included based on third country equivalence with 150% of RBC CAL since 30 September 2015.
We utilize an approach for the management of our risk profile and
solvency position that reflects the Solvency II rules. This comprises
our approved partial internal model covering all major insurance
operations. Other entities are reflected based on their standard
model results as well as on sectoral or local requirements, in accor-
dance with the Solvency II framework.
GENERAL APPROACH
We define internal risk capital as the capital required to protect us
against unexpected, extreme economic losses, which forms the basis
for determining our Solvency II regulatory capitalization and the
associated risk profile. On a quarterly basis, we calculate and consis-
tently aggregate internal risk capital across all business segments.
We also project risk capital requirements on a bi-weekly basis during
periods of financial market turbulence.
Our insurance operating entities manage liquidity risk locally,
using asset/liability management systems designed to ensure that
assets and liabilities are adequately matched. In the course of stan-
dard liquidity planning, we reconcile the cash flows from our invest-
ment portfolio-containing a significant portion of liquid assets (e.g.
government bonds or mortgage bonds with a very good credit rating)
- with the estimated liability cash flows. These analysis are per-
formed at the operating entity level and aggregated at the Group
level.
The accumulated short-term liquidity forecast is updated daily
and is subject to an absolute minimum strategic cushion amount
and an absolute minimum liquidity target. Both are defined for the
Allianz SE cash pool in order to be protected against short-term
liquidity crises. As part of our strategic planning, contingent liquidity
requirements and sources of liquidity are taken into account to
ensure that Allianz SE is able to meet any future payment obligations
even under adverse conditions. Major contingent liquidity require-
ments include non-availability of external capital markets, combined
market and catastrophe risk scenarios for subsidiaries, as well as
lower-than-expected profits and dividends from subsidiaries.
over time horizons of 12 months and three years is reported to the
Board of Management regularly.
monitored and forecast on a daily basis. Strategic liquidity planning Internal risk capital framework
The identification and assessment of reputational risks are part
of a yearly Top Risk Assessment, during which senior management
also decides on a risk management strategy and related actions. This
is supplemented by quarterly updates. In addition, reputational risk
is managed on a case-by-case basis. Single cases with a potential
impact on other operating entities or the Group have to be reported
to the Allianz Group for pre-approval.
With the support of Group Communications and Corporate
Responsibility (GCORE), Group Compliance, and the ESG Office¹, Group
Risk defines sensitive business areas and applicable risk guidelines
which are mandatory for all operating entities in the Allianz Group.
All Group and operating entity functions affected cooperate in the
identification of reputational risk. GCORE is responsible for risk
assessment based on a group-wide methodology. Since 2015, Allianz
has embedded conduct risk triggers for fair products and services
into the reputational risk management process.
Allianz's reputation as a well-respected and socially aware provider
of financial services is influenced by our behavior in a range of areas
such as product quality, corporate governance, financial perfor-
mance, customer service, employee relations, intellectual capital,
and corporate responsibility.
statements.
REPUTATIONAL RISK
3- Under book value deduction, the book value of the respective entity is deducted from eligible own funds
of the Group.
Annual Report 2016 - Allianz Group
Annual Report 2016 - Allianz Group
68
Following the approval of our partial internal model in November
2015, the model has been fully applied since the beginning of 2016,
starting with the Solvency II day one reporting. Nevertheless, some
uncertainty about the future capitalization requirements of Allianz
remains, since the future capital requirements applicable for Global
Systemically Important Insurers (so-called G-SII) are still not final-
REGULATORY DEVELOPMENTS
FINANCIAL MARKETS AND OPERATING ENVIRONMENT
Financial markets are characterized by historically low interest rates
and risk premiums, prompting investors to look for higher-yielding
- and potentially higher-risk - investments. In addition to sustained
low interest rates, the challenges of implementing long-term struc-
tural reforms in key Eurozone countries and the uncertainty about
the future path of monetary policy may lead to continued market
volatility. This could be accompanied by a flight to quality, combined
with falling equity and bond prices due to rising spread levels, even
in the face of potentially lower interest rates. Also, possible asset
bubbles (as observed in the Chinese equity market) might spill over
to other markets, contributing to increasing volatility. Therefore,
we continue to closely monitor the political and financial develop-
ments in the Eurozone - such as Brexit in the United Kingdom and
the "No" vote to constitutional reforms in Italy - in order to manage
our overall risk profile to specific event risks.
The risk profile and relative contributions have changed in 2016, pre-
dominantly due to changes in the market environment and manage-
ment actions such as the disposal of our South Korean life business.
Property-casualty premium and reserve risks resulting from
natural and man-made catastrophes as well as from claims
uncertainty.
Market risk, especially interest rate risk, due to the duration mis-
match between assets and liabilities for long-term savings prod-
ucts, equity risk, credit and credit spread risks driven by assets
backing long-term liabilities, which we take to benefit from the
expected risk premium;
As mentioned earlier, the Allianz Group is exposed to a variety of
risks. The largest risks in terms of their contribution to Allianz's risk
profile are:
RISK PROFILE AND MARKET ENVIRONMENT
and management assessment
Allianz risk profile
At the beginning of the year, a regulatory change in the tax treatment
for the German life sector resulted in a decrease of the risk capital
requirement of € 0.3 BN. There were no major model changes in 2016.
Minor and immaterial model changes during the year slightly
decreased the capital requirement by € 0.4 BN, leading to an overall
negative impact of regulatory and model changes of € 0.7 BN.
MODEL CHANGES IN 2016
accuracy of their values also depends on the quality of the actuarial
cash flow estimates. Despite these limitations, we believe the esti-
mated fair values are appropriately assessed.
Since the partial internal risk capital model takes into account
the change in the economic fair value of our assets and liabilities, it is
crucial to estimate the market value of each item accurately. For some
assets and liabilities it may be difficult, if not impossible – notably in
distressed financial markets - to either obtain a current market price
or apply a meaningful mark-to-market approach. For such assets we
apply a mark-to-model approach. For some of our liabilities, the
The construction and application of the mentioned replicating
portfolios is subject to the set of available replicating instruments
and might, therefore, be too simple or too restrictive to capture all
factors affecting the change in value of liabilities. As with other model
components, the replications are subject to independent validation
and to suitability assessments as well as to stringent data and pro-
cess quality controls. Therefore, we believe that the liabilities are
adequately represented by the replicating portfolios.
Furthermore we validate the model and parameters through
sensitivity analyses, independent internal peer reviews and, where
appropriate, independent external reviews, focusing on methods for
selecting parameters and control processes. To ensure proper valida-
tion we established an Independent Validation Unit (IVU) within
Group Risk responsible for validating our partial internal model
within a comprehensive model validation process. Overall, we believe
that to the extent possible our validation efforts are effective and that
the model adequately assesses the risks to which we are exposed.
We use model and scenario parameters derived from historical
data, where available, to characterize future possible risk events. If
future market conditions differ substantially from the past, for exam-
ple in an unprecedented crisis, our VaR approach may be too conser-
vative or too liberal in ways that are difficult to predict. In order to
mitigate reliance on historical data, we complement our VaR analysis
with stress testing.
Because of the 99.5% confidence level, there is a low statistical prob-
ability of 0.5% that actual losses could exceed this threshold at Group
level in the course of one year.
LIMITATIONS
Our partial internal risk capital model also includes assumptions on
claims trends, liability inflation, mortality, longevity, morbidity,
policyholder behavior, expense, etc. We use our own internal historical
data for actuarial assumptions wherever possible, and also consider
recommendations from the insurance industry, supervisory author-
ities, and actuarial associations. The derivation of our actuarial
assumptions is based on generally accepted actuarial methods.
Within our internal risk capital and financial reporting framework,
comprehensive processes and controls exist for ensuring the reli-
ability of these assumptions.
ACTUARIAL ASSUMPTIONS
Where possible, we derive correlation parameters for each pair
of market risks through statistical analysis of historical market data,
considering quarterly observations over several years. In case histori-
cal market data or other portfolio-specific observations are insuffi-
cient or not available, correlations are set according to a well-defined
group-wide process. Correlations are determined by the Correlation
Settings Committee, which combines the expertise of risk and busi-
ness experts. In general, we set the correlation parameters to represent
the joint movement of risks under adverse conditions. Based on these
correlations, we use an industry-standard approach, the Gaussian
copula approach, to determine the dependency structure of quanti-
fiable sources of risk within the applied Monte Carlo simulation.
C - Group Management Report
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67
4-Due to late availability of the EIOPA publication, the risk-free interest rate term structure used might
slightly differ from the one published by EIOPA.
In addition, a risk function which is independent from the busi-
ness line management is established by each operating entity. This
function operates under the direction of the operating entity's Chief
Risk Officer. In addition, a local Risk Committee supports both the
operating entity's Board of Management and the Chief Risk Officer by
acting as the primary risk controlling body. Group Risk is also repre-
sented on the local Risk Committees to enhance the risk dialogue
between the Group and the operating entities.
In 2016, we rolled out a newly developed group-wide liquidity risk
framework in order to further strengthen the Allianz liquidity risk
management within Allianz Group and the resilience to stress sce-
narios. This framework considers liquidity sources (e.g. cash flows
from investments and premiums) and liquidity needs (e.g. payments
due to insurance claims) and explicitly takes stress situations for
liquidity sources and needs into account to assess the liquidity and
allows for a group-wide consistent view on liquidity risks.
LIQUIDITY RISK
Annual Report 2016 - Allianz Group
Commissions and profit received
The internal credit risk capital model considers the major drivers
of credit risk for each instrument, such as exposure at default, ratings,
seniority, collateral, and maturity. Additional parameters assigned to
obligors are migration probabilities and obligor asset correlations
reflecting dependencies within the portfolio. Ratings are assigned to
single obligors via an internal rating approach which is based on
long-term ratings from rating agencies. It is dynamically adjusted
using market-implied ratings and the most recently available quali-
tative information.
The Allianz Group monitors and manages credit risk exposures and
concentrations to ensure we are able to meet policyholder obligations
when they are due. Credit risks are reflected by the internal credit risk
model as well as the obligor group limit management system. Group-
wide credit data is collected following a centralized process and using
standard obligor and obligor group mappings.
CREDIT RISK
Furthermore, we have put in place standards for hedging activi-
ties due to exposures to fair value options embedded in life insurance
products.
In order to further limit the impact of any financial market
changes and to ensure that assets adequately back policyholder
liabilities, we have additional measures in place. One of these is asset/
liability management, linked to the internal risk capital framework,
which incorporates risks as well as return aspects stemming from our
insurance obligations. In addition, we are using derivatives mostly to
either hedge our portfolio against adverse market movements or reduce
our reinvestment risk - for example, by using forwards or swaptions.
In addition, guidelines are derived by the Group center for certain
investments - for example, concerning the use of derivatives – and
compliance with the guidelines is controlled by the respective risk
and controlling functions.
With respect to investments, top-down indicators such as strategic
asset allocations are defined and closely monitored to ensure bal-
anced investment portfolios. Furthermore, we have a limit system in
place which is defined at Group level – separately for the Life/Health
and the Property-Casualty business segments - as well as at operating
entity level. The limits comprise economic limits, in particular finan-
cial Value-at-Risk (VaR) and credit VaR as derived from the internal
risk capital framework, complemented by stand-alone interest rate
and equity sensitivity limits as well as by limits on foreign exchange
exposures.
MARKET RISK
In addition, central elements of Allianz's dividend policy are
linked to the Solvency II capitalization based on our partial internal
model. This shows that the partial internal model is fully integrated
in the business steering of Allianz and that the application of the par-
tial internal model satisfies the so-called "use-test" under Solvency II.
results and risk profile in general. Therefore, our aim is to maintain a
balanced risk profile without bearing any disproportionately large
risk concentrations and accumulations.
1- From a formalistic perspective, the German Supervisory Authority deems our model to be "partial" because
it does not cover all of our operations: some of our smaller operations report under the standard model
and others under the deduction and aggregation approach.
As an integrated financial services provider, we consider diversi-
fication across different business segments and regions to be a key
element in managing our risks efficiently by limiting the economic
impact of any single event and by contributing to relatively stable
Allianz steers its portfolio using a comprehensive view of risk and
return, i.e. results based on the partial internal risk model including
scenario-based analysis are actively used for decision-making: On the
one hand, economic risk and concentrations are actively restricted by
the limits outlined above; on the other hand, there is a comprehen-
sive analysis of the return on risk capital (RORC). The latter allows us
to identify profitable lines of business and products on a sustainable
basis, which provide reasonable profits on allocated risk capital over
the life time of the products. Therefore, it is a key criterion for capital
allocation decisions.
With Solvency II being the binding regulatory regime since 1 Jan-
uary 2016 and the approval of our partial internal model¹, risk is mea-
sured and steered based on the risk profile underlying our regulatory
capital requirement. We introduced capitalization limits defining a
target capitalization according to Solvency II after applying shock
scenarios on both the Group and the operating entity level. By that
we allow for a consistent view on risk steering and capitalization
under the Solvency II framework. This is supplemented by economic
scenarios and sensitivities.
The Allianz Group is exposed to a variety of risks through its core
insurance and asset management activities. These include market,
credit, underwriting, business, operational, strategic, liquidity, and
reputational risks.
Risk based steering and risk management
In order to adapt to a continually changing environment, the
Global Issues Forum (GIF) supports the Group in the assessment of
long-term trend changes in the risk landscape on a timely basis.
Group Actuarial contributes towards assessing and managing
risks in line with regulatory requirements. These risks stem from the
risk-taking/mitigating activities involving professional actuarial
experience. The range of tasks includes, among others, the calculation
and monitoring of technical provisions, technical actuarial assis-
tance in business planning, reporting and monitoring the results,
and supporting the effective implementation of the risk management
system.
Group Legal and Compliance seeks to mitigate legal risks with
support from other departments. The objectives of Group Legal and
Compliance are to ensure that laws and regulations are observed, to
react appropriately to all impending legislative changes or new court
rulings, to attend to legal disputes and litigation, and to provide
legally appropriate solutions for transactions and business processes.
In addition, Group Legal and Compliance is responsible for integrity
management, which aims to protect the Allianz Group, our operating
entities and employees from regulatory risks.
In addition to Group Risk and the operating entities' risk functions,
legal and compliance and actuarial functions have been established
at both the Group and operating entity level, constituting additional
components of the "second line of defense".
Other functions and bodies
C - Group Management Report
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19
63
80
C - Group Management Report
The main goal of planning and managing Allianz SE's liquidity posi-
tion is to ensure that we are always able to meet payment obligations.
To comply with this objective, the liquidity position of Allianz SE is
Our credit insurance portfolio is modeled by Euler Hermes based
on a proprietary model component, which is a local adaptation of the
central internal credit risk module and is reviewed by Group Risk.
Euler Hermes's loss profile is integrated in the Group's internal credit
risk model to capture the concentration and diversification effects. In
our credit insurance business, proactive credit management offers
opportunities to keep losses from single credit events below expected
levels and therefore strongly supports writing business that contrib-
utes to a balanced Group credit portfolio.
Our group-wide country and obligor group limit management
framework (CRISP¹) allows us to manage counterparty concentration
risk. It covers credit and equity exposures and is based on data used
by the investment and risk experts at the Group and operating entity
levels. This limit framework forms the basis for discussions on credit
actions and provides notification services with a quick and broad
communication of credit-related decisions across the Group. Clearly
defined processes ensure that exposure concentrations and limit
utilizations are appropriately monitored and managed. The setting
of country and obligor exposure limits from the Group's perspective
(i.e. the maximum concentration limit) takes into account the
Allianz Group's portfolio size and structure as well as our overall risk
strategy.
Strategic risks are evaluated and analyzed in the strategic and plan-
ning dialogue between the Allianz Group and its operating entities
and controlled by monitoring the respective business goals. We also
monitor market and competitive conditions, capital market require-
ments, regulatory conditions, etc., to decide whether to make strate-
gic adjustments.
STRATEGIC RISK
There are certain risks that cannot be fully quantified across the
Group using our partial internal risk capital model. For these risks we
also pursue a systematic approach with respect to identification,
analysis, assessment, monitoring, and steering. In general, the risk
assessment is based on qualitative criteria or scenario analyses. The
most important of these other risks are strategic, liquidity and repu-
tational risk.
OTHER RISKS
Allianz works on a Cyber and Information Security program on
an ongoing basis, in order to better respond to external develop-
ments and to further strengthen the internal control environment for
related operational risks.
Major failures and disasters at our outsourcing providers which
could cause a severe disruption to our working environment may
represent significant operational risks for the Allianz Group. Our
Business Continuity and Crisis Management framework strives to
protect critical business functions from these events and enables
them, for example, to carry out their core tasks on time and at the
highest standard also in a crisis event.
C - Group Management Report
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66
65
2- For further information, please refer to note 15 to the consolidated financial statements.
3-For additional information regarding our internal controls over financial reporting, please refer to Controls
over Financial Reporting from page 75 onward.
Annual Report 2016 - Allianz Group
1-Credit Risk Platform.
The risks related to non-compliance or other misconduct are
addressed via various dedicated compliance programs. Written poli-
cies detail the Allianz Group's approach towards the management of
these areas of risk. The implementation and communication of those
compliance programs are monitored by the Group Compliance func-
tion at Allianz SE. In close cooperation with the Risk function of the
Group, risk-mitigating measures are taken and enforced by a global
network of dedicated compliance functions throughout the Allianz
Group. With respect to financial statements, our internal control
system is designed to mitigate operational risks.³
Allianz has developed a consistent group-wide operational risk man-
agement framework that focuses on the early recognition and pro-
active management of operational risks in all "first line of defense"
functions. Local risk managers as the “second line of defense" ensure
this framework is implemented in their respective operating entities.
They identify and evaluate relevant operational risks and control
weaknesses via a dialogue between the "first line of defense" and the
risk function. Furthermore, operational risk events are collected in a
central risk event database. Since 2015, Allianz also delivers anony-
mized internal loss data to the "Operational Riskdata eXchange Asso-
ciation (ORX)", a global operational loss data insurance consortium,
to improve our internal control system and to validate operational
risk parameters.
OPERATIONAL RISK
We measure these risks within our partial internal risk capital
model by distinguishing between the different sub-components
whenever relevant or material: absolute level, trend, volatility around
best-estimate assumptions, and pandemic risks. Depending on the
nature and complexity of the risk involved, our health business is
represented in the partial internal model, according to Property-
Casualty or Life/Health calculation methods, and is therefore included
in the relevant Property-Casualty and Life/Health figures accordingly.
However, most of our health business is attributable to the Life/
Health business segment.
Underwriting risks in our Life/Health operations (biometric risks)
include mortality, disability, morbidity, and longevity risks. Mortality,
disability, and morbidity risks are associated with the unexpected
increase in the occurrence of death, disability, or medical claims on
our insurance products. Longevity risk is the risk that, due to changing
biometric assumptions, the reserves covering life annuities and
group pension products might not be sufficient.
LIFE/HEALTH
In general, our operating entities constantly monitor the devel-
opment of reserves for insurance claims on a line-of-business level.²
In addition, the operating entities generally conduct annual reserve
uncertainty analyses. Allianz SE performs regular independent
reviews of these analysis and Allianz SE representatives participate in
the local reserve committees' meetings.
to estimate the magnitude and frequency of potential losses. Where
such stochastic models do not exist, we use deterministic, scenario-
based approaches to estimate potential losses. Similar models and
scenario-based approaches are used to evaluate risk concentrations
and man-made catastrophes, including losses from terrorism and
industrial concentrations, etc.
Natural disasters, such as earthquakes, storms and floods, rep-
resent a significant challenge for risk management due to their accu-
mulation potential and occurrence volatility. In order to measure such
risks and better estimate the potential effects of natural disasters, we
use special modeling techniques in which we combine portfolio data
(such as the geographic distribution and characteristics of insured
objects and their values) with simulated natural disaster scenarios
We also monitor concentrations and accumulation of non-mar-
ket risks on a stand-alone basis (i.e. before diversification effects)
within a global limit framework in order to avoid substantial losses
from single events such as natural catastrophes and from man-made
catastrophes such as terror or large industrial accumulations.
Premium risk is subdivided into natural catastrophe risk, terror
risk, and non-catastrophe risk. We calculate premium risk based on
actuarial models that are used to derive loss distributions. Premium
risk is actively managed by the Allianz Group and its local operating
entities. The assessment of risks as part of the underwriting process
are key elements of our risk management framework. There are clear
underwriting limits and restrictions, centrally defined and in place
across the Group. In addition to the underwriting limits which are
defined centrally, local operating entities have limits in place that
take into account their business environments. Excessive risks are
mitigated by external reinsurance agreements. All these measures
contribute to a limitation on risk accumulation.
Our Property-Casualty insurance businesses are mainly exposed to
premium risk and reserve risks as part of the underwriting risk.
PROPERTY-CASUALTY
UNDERWRITING RISK
To ensure effective credit risk management, credit VaR limits are
derived from our internal risk capital framework, as well as from rat-
ing bucket benchmarks which define our risk appetite for exposures
in the lower investment grade and non-investment grade area.
1,721
Capitalization of DAC²
Capitalization of DAC²
(0.5)
0.2
(3.1)
Life/Health
(0.1)
(2.2)
(1.0)
3.1
Property-Casualty
growth
Nominal
Foreign
currency
translation
(3.4)
Changes in
scope of
consolidation
Asset Management
Statutory premiums
Life/Health
Gross premiums written
Property-Casualty
€ MN
COMPOSITION OF TOTAL REVENUES
2016
Total revenues comprise statutory gross premiums written in Property-
Casualty and Life/Health, operating revenues in Asset Management,
and total revenues in Corporate and Other (Banking).
Composition of total revenues
RECONCILIATION OF NOMINAL TOTAL REVENUE GROWTH
TO INTERNAL TOTAL REVENUE GROWTH
%
We believe that an understanding of our total revenue performance
is enhanced when the effects of foreign currency translation as well
as acquisitions, disposals, and transfers (or “changes in scope of
consolidation") are analyzed separately. Accordingly, in addition to
presenting nominal total revenue growth, we also present internal
growth, which excludes these effects.
Internal
growth
Asset Management
(7.5)
0.3
Asset Management
4.2
0.0
(4.9)
Life/Health
51,597
51,535
6.8
3.2
0.7
2.9
Property-Casualty
2015
2015
2016
(2.2)
(1.2)
(0.3)
(0.8)
Allianz Group
(4.4)
0.0
0.0
(4.4)
Corporate and Other
(7.1)
0.1
Composition of total revenue growth
For further information, please refer to note 5 to the consolidated
financial statements.
The previous analysis in our Group Management Report is based on
our consolidated financial statements and should be read in conjunc-
tion with them. In addition to our figures stated in accordance with
the International Financial Reporting Standards (IFRS), the Allianz
Group uses operating profit and internal growth to enhance the under-
standing of our results. These additional measures should be viewed
as complementary to, rather than a substitute for, our figures deter-
mined according to IFRS.
Reconciliations
For further information on the consolidated statements of cash
flows, please refer to
page 82.
2016.
Cash and cash equivalents, including cash and cash equivalents
reclassified to assets of disposal groups held for sale, increased in
Net cash outflow used in financing activities decreased, mainly
due to higher net cash inflows from our refinancing activities¹ as well
as higher net cash inflows from liabilities to banks and customers,
especially from our banking business. Higher dividend payments to
our shareholders partly offset these effects.
Net cash outflow used in investing activities declined compared
to the previous year. This was primarily a consequence of net cash
inflows (after net cash outflows in 2015) from financial assets and
liabilities designated at fair value through income, especially in our
Life/Health business segment in Germany and France. Moreover, we
recorded lower net cash outflows from our activities in real estate
held for investment, in particular from our German Life/Health busi-
ness segment. Lower net cash inflows from loans and advances to
banks and customers partly compensated these effects.
Further potential sources of short-term funding allowing the
Allianz Group to fine-tune its capital structure are letter of credit
facilities and bank credit lines.
The Group maintained its A-1+/Prime-1 ratings for short-term issu-
ances. Thus we can continue funding our liquidity under the Euro
Commercial Paper Program at an average rate for each tranche below
Euribor, and under the U.S. Dollar Commercial Paper Program at an
average rate for each tranche below U.S. Libor.
0.4
6
1,276
Money market securities
2015
0.7
9
1,041
Money market securities
2016
%
Average
interest rate
Interest
expense
€ MN
€ MN
Carrying
value
as of 31 December
MONEY MARKET SECURITIES OF ALLIANZ SE
Short-term funding sources available are the Medium-Term Note
Program and the Commercial Paper Program. Money market securities
decreased in the use of commercial paper compared to the previous
year-end. Interest expenses on money market securities increased
mainly due to higher funding costs on average in 2016.
SHORT-TERM DEBT FUNDING
C - Group Management Report
Allianz Group consolidated cash flows
(11.4)
ANNUAL CHANGES IN CASH AND CASH EQUIVALENTS
€ MN
2015
C - Group Management Report
59
1- Refers to cash flows from certified liabilities and subordinated liabilities.
Annual Report 2016 - Allianz Group
Net cash flow provided by operating activities decreased in 2016. This
consists of net income plus adjustments for non-cash charges, cred-
its and other items included in net earnings, and cash flows related
to the net change in operating assets and liabilities. Net income after
adding back non-cash charges and similar items went down by
€ 1.4 BN to € 9.1 BN in 2016. In addition, operating cash flows from net
changes in operating assets and liabilities, including other items, fell
by € 0.8 BN to € 12.4 BN. This was driven by net cash outflows (after net
cash inflows in 2015) from repurchase agreements and collateral
received from securities lending transactions - in particular at
Allianz SE. Higher reserves for insurance and investment contracts
in our Life/Health business segment, mainly in the United States,
Germany and France, partially offset this effect.
1- Includes effects of exchange rate changes on cash and cash equivalents of € 52 MN and € 548 MN in 2016
and 2015, respectively.
(963)
979
16
equivalents¹
Change in cash and cash
1,105
(2,837)
(1,732)
used in financing activities
Net cash flow
629
(20,394)
(19,765)
used in investing activities
Net cash flow
(2,202)
23,663
21,461
provided by operating activities
Net cash flow
Delta
2016
0.0
12.8
1.4
€ MN
(4,754)
(4,927)
Acquisition expenses and commissions²
ACQUISITION, ADMINISTRATIVE, CAPITALIZATION,
AND AMORTIZATION OF DAC¹
2015
2016
€ MN
RECONCILIATION TO NOTES¹
statement.
Policyholder participation is included within change in reserves
for insurance and investment contracts (net) in the group income
Both capitalization and amortization is included in the line item
premiums earned (net) in the group income statement.
URR amortized: Total amount of URR amortized includes scheduled
URR amortization, true-up and unlocking.
URR capitalized: Capitalization amount of unearned revenue
reserves (URR) and deferred profit liabilities (DPL) for FAS 97 LP.
Impact of change in DAC includes effects of change in DAC, unearned
revenue reserves (URR), and value of business acquired (VOBA), and is
the net impact of the deferral and amortization of acquisition costs
and front-end loadings on operating profit.
IN DEFERRED ACQUISITION COSTS (DAC)
IMPACT OF CHANGE
The delta shown as definitions in acquisition expenses and com-
missions represents commission clawbacks, which are allocated to the
technical margin. The delta shown as definitions in administrative
and other expenses mainly represents restructuring charges, which
are stated in a separate line item in the group income statement.
Expenses comprise acquisition expenses and commissions as well
as administrative and other expenses.
EXPENSES
The reconciling item scope comprises the effects from out-of-scope
entities in the profit sources reporting compilation. Operating profit
from operating entities that are not in-scope entities is included in
the investment margin. Currently, 20 entities comprising 97.5% of
Life/Health total statutory premiums are in scope.
OPERATING PROFIT
Life/Health Insurance Operations
C - Group Management Report
Annual Report 2016 - Allianz Group
60
2-Includes trading income.
Administrative and other expenses²
1-Represents interest and similar income less interest expenses.
(1,760)
2016
(855)
(825)
Scope
(5,262)
(5,304)
Acquisition costs incurred and commissions
362
867
Definitions
(524)
(390)
Scope
(6,548)
(6,735)
Acquisition and administrative expenses
16
13
Definitions
(1,878)
(1,916)
Amortization, unlocking and true-up of DAC²
(4,754)
(4,927)
Acquisition expenses and commissions²
1,721
1,868
2015
(1,636)
1,868
Allianz Group total revenues
122,416
Other income
(8)
6
carried at fair value through income (net)
Income from financial assets and liabilities
(5)
(5)
Net interest income¹
6,488
6,019
Net fee and commission income
consisting of:
Operating revenues
6,479
6,022
2.4
4.2
0.3
(2.1)
Allianz Group
3.7
0.0
(0.7)
4.5
Corporate and Other
66,903
64,636
3
125,190
4
thereof: Total revenues (Banking)
(365)
(328)
Consolidation
2
2
and Other
Consolidation effects within Corporate
(340)
(308)
Fee and commission expenses
(212)
(172)
from external debt
Interest expenses, excluding interest expenses
565
540
16
14
Fee and commission income
carried at fair value through income (net)²
Income from financial assets and liabilities
546
474
Interest and similar income
consisting of:
577
551
Corporate and Other
(0.6)
0.1
Total liabilities
UNDERWRITING RISK
Underwriting risk consists of premium and reserve risks in the Pro-
perty-Casualty business segment as well as biometric risks in the
Life/Health business segment. For the Asset Management business
segment and our banking operations, underwriting risks are not rel-
evant.
The following table presents the pre-diversified risk calculated
for underwriting risks stemming from our insurance business.
ALLIANZ GROUP: RISK PROFILE - ALLOCATED UNDERWRITING RISK BY BUSINESS SEGMENT AND SOURCE OF RISK
(TOTAL PORTFOLIO BEFORE NON-CONTROLLING INTERESTS)¹
pre-diversified, € MN
as of 31 December
Property-Casualty
Life/Health
As of 31 December 2016, 7.4% (2015: 6.5%) of our total Group pre-
diversified internal credit risk was allocated to Euler Hermes credit
insurance exposures, for which the relative increase is primarily
driven by the lower credit risk of the investment portfolio.
Asset Management
Total Group
C - Group Management Report
Premium
natural catastrophe
Premium
terror
Premium
non-catastrophe
Reserve
Biometric
Total
Corporate and Other
Annual Report 2016 - Allianz Group
72
1- Additionally, 5.7% (2015: 4.8%) of our total Group pre-diversified internal credit risk is allocated to receiv-
ables, potential future exposure for derivatives and reinsurance, and other off-balance sheet exposures.
BBB+ to BBB-
Non-investment grade
Not assigned
Total
1-Represents gross exposure broken down by reinsurer.
2016
2015
0.04
0.04
6.41
6.64
4.62
4.68
0.12
0.08
1.99
1.76
13.18
13.19
CREDIT RISK - CREDIT INSURANCE
Credit risk arises from potential claim payments on limits granted by
Euler Hermes to its policyholders. Euler Hermes protects its policy-
holders (partially) from credit risk associated with short-term trade
credits advanced to clients of the policyholder. If the client of the
policyholder is unable to meet its payment obligations, Euler Hermes
indemnifies the loss to the policyholder.
2016
A+ to A-
2015
2015
616
543
24
17
4,410
4,579
1-As risks are measured in an integrated approach and on an economic basis, internal risk profile takes
reinsurance effects into account.
4,926
1,502
179
5,233
1,526
Share of total Group pre-diversified risk
179
355
1,894
11,809
22.6%
11,958
21.1%
Property-Casualty risk changes are mainly driven by exposure and
model updates as well discounting effects. For biometric risk there
was a slight reduction, mainly driven by a minor model change and
the sale of our South Korean life business.
PROPERTY-CASUALTY
Our Property-Casualty insurance businesses are exposed to premium
risk related to the current year's new and renewed business, as well
as reserve risks related to the business in force.
355
1,323
1,502
1,323
616
543
24
17
2016
4,410
2015
2016
2015
2016
2015
2016
2015
4,579
5,233
4,926
24
37
10,307
10,101
2016
Premium risk
AA+ to AA-
€ BN
3.6
4.8
CCC
0.7
0.3
0.1
0.8
0.4
0.1
CC
0.1
0.1
0.1
0.1
0.1
0.2
C
0.1
0.1
0.1
0.1
3.0
BB
5.3
3.9
0.3
0.5
6.5
9.5
0.9
1.6
0.1
0.1
0.2
0.2
13.3
15.8
B
2.1
1.6
1.3
0.1
as of 31 December
AAA
0.1
0.1
98.7
189.5
164.9
32.9
31.3
21.6
21.6
3.7
90.0
3.0
4.3 555.8 541.4
1- In accordance with the Group Management Report, figures stated include investments of Banking and
Asset Management. Table excludes private loans. Stated market values include investments not in scope
of the Solvency II framework. Predominantly based on external ratings. For some cases where no external
rating is available internal ratings are applied.
CREDIT RISK - REINSURANCE
Credit risk to external reinsurers arises when we transfer insurance
risk exposures to external reinsurance companies to mitigate insur-
ance risks. Potential losses can arise either due to non-recoverability
of reinsurance receivables already present at the as-of date or due to
default on benefits under in-force reinsurance treaties.
As of 31 December 2016, 0.5% (2015: 0.4%) of our total Group pre-
diversified internal credit risk was allocated to reinsurance exposures
- of which 46.8% (2015: 52.0%) was related to reinsurance counter-
parties in the United States and Germany.
We focus on companies with strong credit profiles. We may also
require letters of credit, cash deposits, or other financial measures to
further mitigate our exposure to credit risk. As of 31 December 2016,
84.0% (2015: 86.0%) of the Allianz Group's reinsurance recoverables
were distributed among reinsurers that had been assigned at least an
"A-" rating by Standard & Poor's or A.M. Best. As of 31 December 2016,
reinsurance recoverables not rated represented 15.1 % (2015: 13.3%).
REINSURANCE RECOVERABLES BY RATING CLASS¹
4.7
217.5
213.6
Total
0.1
0.4
0.1
0.5
Not rated
1.9
2.5
0.1
0.3
8.7
6.2
0.6
0.4
1.2
0.5
3.7
2.8
16.3
12.7
D
As part of our Property-Casualty business operations, we receive ] pre-
miums from our customers and provide insurance protection in
return. Changes in profitability over time are measured based on loss
ratios and their fluctuations.
We face the risk that underwriting profitability is lower than
expected. The volatility of the underwriting profitability measured
over one year defines our premium risk for the Allianz Group.
PROPERTY-CASUALTY LOSS RATIOS¹ FOR THE PAST TEN YEARS
13,443
Total assets
883,809
848,942
LIABILITIES AND EQUITY
Financial liabilities carried at fair value through income¹
Liabilities to banks and customers
Unearned premiums
13,752
10,737
13
13,038
25,531
14
21,360
20,660
Reserves for loss and loss adjustment expenses
15
9,207
12
Intangible assets
109
Reinsurance assets
9
15,562
14,843
Deferred acquisition costs
10
24,887
25,234
Deferred tax assets
34
1,003
1,394
Other assets
11
38,050
37,050
Non-current assets and assets of disposal groups classified as held for sale
4
14,196
72,373
105,873
72,003
16
12,258
782,843
813,417
34
13,530
19
Subordinated liabilities
8,383
7,615
Shareholders' equity
19
18
13,290
4
Liabilities of disposal groups classified as held for sale
38,686
39,867
18
Other liabilities
Certificated liabilities
Non-controlling interests
Total equity
Total liabilities and equity
505,460
486,222
Financial liabilities for unit-linked contracts
17
111,325
105,873
Deferred tax liabilities
Annual Report 2016 - Allianz Group
78
848,942
883,809
66,099
70,392
20
2,955
3,052
63,144
67,341
1-Include mainly derivative financial instruments.
Reserves for insurance and investment contracts
111,325
Financial assets for unit-linked contracts
117,630
Business risks include cost risks and policyholder behavior risks and
are mostly driven by the Life/Health business segment and to a lesser
extent by the Property-Casualty business segment. Cost risks are
associated with the risk that expenses incurred in administering
policies are higher than expected or that new business volume
decreases to a level that does not allow Allianz to absorb its fixed
costs.
In the Life/Health business segment, policyholder behavior risks
are risks related to the unpredictability and adverse behavior of
policyholders in exercising their different contractual options: early
termination of contracts, surrenders, partial withdrawals, renewals,
and annuity take-up options. Assumptions on policyholder behavior
are set in line with accepted actuarial methods and are based on our
own historical data, to the extent available. If data is not available,
assumptions are based on industry data or expert judgment.
There was a minor movement in business risk for our Life/Health
business segment, driven by the sale of our South Korean life business.
As for underwriting risks, a positive deviation from the under-
lying parameters will lead to additional returns. For example, lower-
than-expected expenses in our Property-Casualty business will lead
to an improved combined ratio.
OPERATIONAL RISK
Operational risks represent losses resulting from inadequate or failed
internal processes, from personnel and systems, or from external
events – including legal and compliance risk, but excluding losses
from strategic and reputational risk. The operational risk capital is
calculated on a scenario-based approach. Operational internal and
external loss data is used, among others, for the selection of the risk
driving scenarios and is applied for validation purposes.
The decrease shown in the operational risk is driven by the regu-
lar update of local parameters. Foreign currency translation effects
(mainly Euro/U.S. Dollar) play a secondary role. There were no central
operational risk model changes in 2016.
LIQUIDITY RISK
BUSINESS RISK
Liquidity risk is defined as the risk that requirements from current or
future payment obligations cannot be met or can only be met on the
basis of adversely altered conditions. Liquidity risk can arise primarily
if there are mismatches in the timing of cash flows on the asset and
liability side. Detailed information regarding the Allianz Group's
liquidity risk exposure, liquidity, and funding - including changes in
cash and cash equivalents – is provided in Liquidity and Funding
Resources from ②> page 57 onwards and in notes 13, 19 and 35 to the
consolidated financial statements.
As inferred from the section on management of liquidity risks
and interest rate risks, they are properly managed and monitored but
not quantified.
74
Annual Report 2016 - Allianz Group
C - Group Management Report
Controls over Financial Reporting
The following information is given pursuant to § 289 (5) and § 315 (2)
no. 5 of the German Commercial Code ("Handelsgesetzbuch- HGB").
In line with both our prudent approach to risk governance and com-
pliance with regulatory requirements, we have created a structure to
identify and mitigate the risk of material errors in our consolidated
financial statements (this also includes market value balance sheet
and risk capital controls). Our internal control system over financial
reporting (ICOFR) is based on the revised framework developed by the
Committee of Sponsoring Organizations of the Treadway Commission
(coso) in 2013 and is regularly reviewed and updated. Our approach
also includes the following five interrelated components: control
environment, risk assessment, control activities, information and
communication, and monitoring. These five components are covered
by an Entity-Level Control Assessment Process (ELCA), IT General
Controls (ITGC) and controls at process levels. The ELCA framework
contains controls to monitor the system of governance effectiveness.
In the ITGC framework we have implemented, for example, controls for
access-right management and for project and change management.
ACCOUNTING AND CONSOLIDATION PROCESSES
-
C - Group Management Report
73
1- For further information about insurance risk in the Life/Health business segment, please refer to note 16
to the consolidated financial statements.
%
66.1
2016
Loss ratio
2015 2014 2013 2012 2011 2010 2009 2008
65.6 66.2 66.0 65.9 68.3 69.9 69.1 69.5 68.0
2007
Loss ratio
excluding
natural
catastrophes
64.2 64.6 65.1 63.0 66.6 65.5 65.9 68.4 66.3
64.1
1- Represents claims and insurance benefits incurred (net), divided by premiums earned (net).
The top five perils contributing to the natural catastrophe risk as of
31 December 2016 were: a windstorm in Europe, a flood in Germany,
a hurricane in the U.S., a hailstorm in Germany, and an earthquake in
Australia.
Reserve risk
We estimate and hold reserves for claims resulting from past events
that have not yet been settled. If our reserves turn out not the be suf-
ficient to cover claims to be settled in the future, due to unexpected
changes, we will experience losses. Conversely, if reserves turn out to
be too conservative there is a chance of positive returns. The volatility
of past claims measured over a one-year time horizon defines our
reserve risk.
LIFE/HEALTH
Life/Health underwriting risk arises from profitability being lower
than expected due to changes in actuarial parameters. As profitabil-
ity calculations are based on several parameters – such as historical
loss information, assumptions on inflation or on mortality, and mor-
bidity - the realized parameters may differ from the ones used for
calculation. For example, inflation which is higher than what we
incorporated in the calculations may lead to a loss. However, devia-
tions can also be beneficial and lead to additional profit. For example,
a lower morbidity rate than expected will most likely result in lower
claims.
Due to effective product design and the diversity of our products,
there were no significant concentrations of underwriting risks within
our Life/Health business segment as of 31 December 2016.1
Annual Report 2016 - Allianz Group
The accounting and consolidation processes we use to produce con-
solidated financial statements are based on a central consolidation
and reporting IT solution and local general ledger solutions. The latter
are largely harmonized throughout the Group, using standardized
processes, master data, posting logics, and interfaces for data delivery
to the Holding. Access rights to accounting systems are managed
according to strict authorization procedures.
Accounting rules for the classification, valuation, and disclosure
of all items in the balance sheet, the income statement, and notes
related to the annual and interim financial statements are defined
primarily in our Group accounting manual. Internal controls are
embedded in the accounting and consolidation processes to safe-
guard the accuracy, completeness, and consistency of the information
provided in our financial statements.
INTERNAL CONTROL SYSTEM APPROACH
Our approach can be summarized as follows:
We use a top-down, risk-based approach to determine the accounts
and operating entities that should fall under the scope of our
internal control system over financial reporting. The methodology
is described in our ICOFR manual. During the scoping process,
both materiality and susceptibility to a misstatement are consid-
ered simultaneously. The final results are documented in the list
of operating entities under the scope of ICOFR as well as in the list
of significant accounts. In addition to the quantitative ICOFR cal-
culation, we also consider qualitative criteria – such as expected
increase in business volume – which are provided by different
Group Centers, Group Audit, and external Audit.
as of 31 December
note
2016
2015
ASSETS
Cash and cash equivalents
Financial assets carried at fair value through income
Investments
14,463
14,842
6
8,333
7,268
7
536,869
511,257
Loans and advances to banks and customers
8
105,369
€ MN
148.7
CONSOLIDATED BALANCE SHEETS
D - Consolidated Financial Statements
Then, our local entities identify risks that could lead to material
financial misstatements including all relevant root causes (i.e.
human processing errors, fraud, system shortcomings, external
factors, etc.). After identifying and analyzing the risks, their
potential impacts and probabilities of occurrence are evaluated.
Preventive and detective key controls over the financial reporting
process have been put in place to reduce the likelihood and
impact of financial misstatements. If a potential risk materializes,
actions are taken to reduce the impact of the financial misstate-
ment. Given the strong dependence of financial reporting pro-
cesses on information technology systems, we also implement IT
controls.
Finally, we focus on ensuring that controls are appropriately
designed and effectively executed to mitigate risk. We have set
consistent documentation requirements across the Allianz
Group for elements such as processes, related key controls, and
execution. We conduct an annual assessment of our control system
to maintain and continuously enhance its effectiveness. Group
Audit and local internal audit functions ensure that the overall
quality of our control system is subjected to regular control-test-
ing, to assure reasonable design and operating effectiveness.
Internal Audit does so through a comprehensive risk-based
approach, which holistically assesses the key controls of the com-
pany's internal procedures and processes, including local and
group-internal controls over financial reporting.
GOVERNANCE
Responsibility for ensuring the completeness, accuracy, and reliability
of our consolidated financial statements rests with the Chairman of
the Allianz SE Board of Management, as well as the board member
responsible for Finance, Controlling, and Risk, supported by Group
Center functions, the Group Disclosure Committee, and operating
entities.
The Group Disclosure Committee ensures that these board
members are made aware of all material information that could affect
our disclosures, and assesses the completeness and accuracy of the
information provided in the quarterly statements, half-year, and
annual financial reports. In 2016, the Group Disclosure Committee
met on a quarterly basis before the quarterly statements and financial
reports were issued.
Subsidiaries within the scope of our control system are individu-
ally responsible for adhering to the Group's internal governance and
control policy and for creating local Disclosure Committees that are
similar to the Group-level committee. The entities' CEOS and CFOS
provide periodic sign-offs to the management of Allianz SE, certifying
the effectiveness of their local system of internal controls as well as
the completeness, accuracy, and reliability of financial data reported
to the Holding.
Annual Report 2016 - Allianz Group
75
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76
Annual Report 2016
-
Allianz Group
CONSOLIDATED
FINANCIAL STATEMENTS
D
Annual Report 2016 - Allianz Group
77
CONSOLIDATED BALANCE SHEETS
157.8
0.5
0.3
163
146
29
26
2,248 2,274 (6,606) (6,663) 15,193
2,028 2,019 (5,713) (7,784) 19,549
768
686
960
14,745
22,081
857
Asset Management
Corporate and Other
2,922
683
667
179
Total Group
21,546
25,274
8,763
2,753
937
3,687
937
3,536
10,101
1,502
2015
2016
2015
2016
2015
2016
2015
Property-Casualty
5,805
5,690
2,502
2,406
10,307
Life/Health
12,824
16,516
5,550
6,141
1,323
9,240
2016
11,809
617
2015
2016
2015
2016
2015
2016
2015
2016
2016
2015
Property-Casualty
412
415
Life/Health
2,884
4,129
2,600 2,931
61
237
905
3,780
2016
2015
2016
as of 31 December
4,473 4,623
5,661
580 (689) (924) 3,543
5,559 (13,008) (15,371)
3,600
39,244 41,283
Tax
Total Group
(4,664) (4,860)
34,580 36,423
The following sections outline the evolution of the risk profile per risk
category modeled. All risks are presented on a pre-diversified basis
and concentrations of single sources of risk are discussed accord-
ingly.
MARKET RISK
As an inherent part of our insurance operations, we collect premiums
from our customers and invest them in a wide variety of assets. The
resulting investment portfolios back future claims and benefits to
our customers. In addition, we invest shareholders' capital, which is
required to support the risks underwritten. As the fair values of our
investment portfolios depend on financial markets, which may
change over time, we are exposed to market risks. The following table
presents our group-wide risk figures related to market risks by busi-
ness segment and source of risk.
Interest rate
Inflation
ALLIANZ GROUP: RISK PROFILE - MARKET RISK BY BUSINESS SEGMENT AND SOURCE OF RISK (TOTAL PORTFOLIO BEFORE TAX AND NON-CONTROLLING INTERESTS)
pre-diversified, € MN
Credit spread
Equity
Real estate
Currency
Total
355
11,958
2015
2016
2015
%
218
2001
1-Changed regulatory tax treatment of German life sector reduced our year-end Solvency II capitalization
ratio from 200% to 196 % on 1 January 2016.
Compared to year-end 2015, our Solvency II capitalization increased
by 18 percentage points to 218%. This was driven by an increase in
own funds mainly due to strong Solvency II earnings and the sale of
our South Korean life business. This was partly offset by market move-
ments mainly due to decreased interest rates, as well as by dividend
accrual and changes in transferable amount of own funds resulting
from changed risk capital requirements. A decrease in risk capital
also contributed to the overall increase in Solvency II capitalization.
This was predominantly due to management actions like the disposal
1- Own funds and capital requirement are calculated under consideration of volatility adjustment and yield
curve extension, as described in Yield curve and volatility adjustment assumptions on page 67.
of our South Korean life business but also to measures taken to
reduce our exposure to market risks, including hedging of equity
exposure and improving our interest rate risk profile. In addition,
changes in the regulatory tax treatment of the German life sector as
well as minor model changes also slightly contributed to a decreased
capital requirement. This effect, however, was partly offset by market
movements as well as higher exposure due to business growth.
On a pro-forma basis, the recognition of negative interest rates
on solvency capital calculations would have had a negative impact on
the Solvency ratio of around 3 percentage points as of 31 December
36.4
2016.
ALLIANZ GROUP: SOLVENCY II REGULATORY CAPITALIZATION RATIOS
%
31 Decem-
ber 2016
30 Septem-
ber 2016
30 June
2016
31 March
2016
31 Decem-
ber 2015
Capitalization
ratio
The following table summarizes our Solvency II regulatory capi-
talization ratios as disclosed over the course of the year 2016.
34.6
€ BN
72.7
C - Group Management Report
ized. Finally, the potential for a multiplicity of different regulatory
regimes, capital standards, and reporting requirements will increase
operational complexity and costs.
MANAGEMENT ASSESSMENT
The Allianz Group's management feels comfortable with the Group's
overall risk profile and has confidence in the effectiveness of its risk
management framework to meet the challenges of a rapidly changing
environment as well as day-to-day business needs. This confidence
is based on several factors, which are summarized below:
Due to its effective capital management, the Allianz Group is well
capitalized and met its internal-, rating agency- and regulatory-
solvency targets as of 31 December 2016. Allianz is also confident
that it will be able to meet the capital requirements under new
regulatory regimes. Allianz remains one of the highest rated
insurance groups in the world, as reflected by our external ratings.
The Group's management also believes that Allianz is well posi-
tioned to deal with potentially adverse future events, in part due
to our strong internal limit framework defined by the Group's risk
appetite and risk management practices including our approved
partial internal model.
The Group has a conservative investment profile and disciplined
business practices in the Property-Casualty, Life/Health, and
Asset Management business segments, leading to sustainable
operating earnings with a well-balanced risk-return profile.
Finally, the Group has the additional advantage of being well
diversified, both geographically and across a broad range of busi-
nesses and products.
SOLVENCY II REGULATORY CAPITALIZATION
The Allianz Group's own funds and capital requirements are based
on the market value balance sheet approach as the major economic
principle of Solvency II rules.¹ Our regulatory capitalization is shown
in the following table.
ALLIANZ GROUP: SOLVENCY II REGULATORY CAPITALIZATION
as of 31 December
Own funds
Capital requirement
Capitalization ratio
2016
2015
€ BN
75.3
186
186
186
218
Quantifiable risks and opportunities
by risk category
This Risk and Opportunity Report outlines the Group's risk figures,
reflecting its risk profile based on pre-diversified risk figures and
group diversification effects. Pre-diversified risk figures reflect the
diversification effect within each modeled risk category (i.e. market,
credit, underwriting, business, and operational risk) but does not
comprise the diversification effects across risk categories. Group-
diversified risk figures also capture the diversification effect across
all risk categories. As of 31 December 2016, the group-diversified risk
reflecting our risk profile before non-controlling interests of € 34.6 BN
(2015: € 36.4 BN) represented a diversification benefit² of approxi-
mately 25% (2015: 27%) across risk categories and business segments.
2- Diversification before tax.
Annual Report 2016 - Allianz Group
69
C - Group Management Report
With the exception of the Asset Management business segment, all
business segments are exposed to the full range of risk categories stated.
By contrast, the Asset Management business segment is mainly exposed
to operational and market risk and to a lesser extent to credit risk. The
group-diversified risk is broken down as follows:
ALLIANZ GROUP: ALLOCATED RISK ACCORDING TO THE RISK PROFILE (TOTAL PORTFOLIO BEFORE NON-CONTROLLING INTERESTS)
€ MN
Market risk
Credit risk
Underwriting risk
Business risk
Operational risk
Diversification
Total
as of 31 December
2016
2015
2016
The Allianz Group is a financial conglomerate within the scope of the
Financial Conglomerate Directive (FCD). The FCD does not impose a
materially different capital requirement on Allianz Group compared
to Solvency II.
739
1- Non-parallel interest rate shifts due to extrapolation of the yield curve beyond the last liquid point in line
with Solvency II rules.
203
200
The following table presents the sensitivity of our predicted Solvency II
capitalization ratio under certain standard financial scenarios.
ALLIANZ GROUP: PREDICTED SOLVENCY II REGULATORY CAPITALIZATION
AFTER STRESS SCENARIOS
%
as of 31 December
Base capitalization ratio
Interest rates up by 0.5%¹
Interest rates down by 0.5%¹
Equity prices up by 30%
Equity prices down by 30%
Combined scenario:
Interest rate down by 0.5%¹
Equity prices down by 30%
2016
2015
218
200
220
208
207
185
224
208
216
190
176
4,003
1,215
604
2015
2016
2015
2016
2015
AAA
42.3
44.8
2016
57.9
1.5
2.4
1.6
1.1
17.5
16.0
0.1
0.1
57.7
2015
2016
2015
Type of
issuer
Government &
agency
Covered bond
Corporate
Banks
ABS/MBS
Short-term loan
Other
Total
as of
31 December
2016
2015
2016
2015
2016
2015
2016
120.9 122.1
€ BN
AA
95.9
0.6
0.7
0.8
98.9
94.6
BBB
49.8
52.9
0.2
4.2
93.9
81.9
8.3
7.3
0.5
0.6
0.8
0.5
5.0
1.7
0.9
14.6
18.6
23.8
20.9
11.3
6.0
6.2
2.3
3.0
1.1
1.1
144.0 141.4
A
17.1
15.8
8.8
11.4
55.8
49.8
15.4
95.0
RATING DISTRIBUTION OF ALLIANZ GROUP'S FIXED INCOME PORTFOLIO¹ - FAIR VALUE
As of 31 December 2016, the rating distribution based on issue
(instrument) ratings of our fixed income portfolio was as follows:
The counterparty credit risk arising from derivatives is low, since
derivatives usage is governed by the group-wide internal guidelines for
collateralization of derivatives that stipulate master netting and col-
lateral agreements with each counterparty and require high quality
and liquid collateral. In addition, Allianz closely monitors the credit
ratings of counterparties and exposure movements.
977
95
86
261
6,891 8,078
1,746 1,986
527
21,546 25,274
Share of total Group pre-diversified risk 41.2% 44.6%
680
2015
55 5,805 5,690
45 12,824 16,516
86
163
146
224 2,753 2,922
410
INTEREST RATE RISK
As interest rates may fall below the rates guaranteed to policyholders
in some Life/Health markets, and given the long duration of insur-
ance obligations, we are specifically exposed to interest rate risk
because we have to reinvest maturing assets prior to the maturity of
life contracts. This interaction of our investment strategy and obliga-
tions to policyholders forms an integral part of our internal risk cap-
ital framework. In addition, our ALM approach is closely linked to the
internal risk capital framework and designed to achieve investment
returns over the long term in excess of the obligations related to
insurance and investment contracts.
70
10
Annual Report 2016 - Allianz Group
C - Group Management Report
We manage interest rate risk from a comprehensive corporate
perspective: While the potential payments related to our liabilities in
the Property-Casualty business segment are typically shorter in
maturity than the financial assets backing them, the opposite usually
holds true for our Life/Health business segment, due to the long-term
life insurance contracts. In part, this provides us with a natural hedge
on an economic basis at the Group level. As of 31 December 2016, our
interest-rate-sensitive investments excluding unit-linked business
- amounting to a market value of € 428.5 BN¹ - would have gained
€ 31.4 BN or lost € 36.1 BN in value in the event of interest rates changing
by (100) and +100 basis points, respectively.
As described above, the risk related to interest rates lies in the
fact that, in the long run, yields that can be achieved by reinvesting
may not be sufficient to cover the guaranteed rates. In contrast,
opportunities may materialize when interest rates increase. This may
result in higher returns from reinvestments than the guaranteed
Our total pre-diversified market risk showed a decrease of € 3.7 BN
mainly driven by interest rate and equity risk in the Life/Health busi-
ness segment. The decrease in interest rate risk was driven by the
disposal of our South Korean life business as well as by management
actions to improve our interest rate risk profile by asset/liability man-
agement (ALM) measures. Equity risk also decreased due to manage-
ment actions, in particular derivative hedging programs. For credit
spread risk, the decrease was driven by exposure changes, due to ALM
measures, and the corresponding effects on the liability side.
541
5,975
796
451
3,025 3,618 5,481
554
69
4,694
4,973
6,085
1,025
1,326
101
Asset Management
Corporate and Other
Total Group
22
20
22
20
22
20
96
557
3,876
643
5,207
364
rates.
INFLATION RISK
As an insurance company we are exposed to changing inflation rates,
predominantly due to our non-life insurance obligations. In addition,
internal pension obligations contribute to our exposure to inflation.
Since inflation increases both claims and costs, higher inflation rates
will lead to greater liabilities. Inflation assumptions are already taken
into account in our product development and pricing, and the risk of
changing inflation rates is incorporated in our partial internal model.
In case future inflation rates (sustainably) fall short of assumptions,
liabilities would be less than anticipated.
EQUITY RISK
6,141
€ MN
29
26
€ MN
683
667
€ MN
%
8,763
16.8
9,240
16.3
Throughout 2016 the credit environment was mostly stable. Overall
credit risk for the Group decreased compared to last year, primarily
driven by the Life/Health business segment due to the disposal of our
South Korean life business as well as an increased loss-absorbing
capacity of technical provisions in the traditional life business, which
decreased the credit risk after policyholder participation. Addition-
ally, active de-risking measures were taken to reduce sovereign
counterparty exposure concentrations. Annual updates based on
extended time series were performed for credit risk parameters like
the transition matrix and asset correlations, which also had a slightly
positive effect on credit risk. These effects were partially offset by the
declining interest rate environment, which generally increased credit
risk exposures and correspondingly credit risk.
Credit risk comprises risks resulting from the investment port-
folio, from the reinsurance portfolio, and from our credit insurance
business.
CREDIT RISK - INVESTMENT
We invest premiums from our customers into a variety of assets,
which largely consist of fixed income instruments. As the portfolio
value of our investments depends on the credit quality of the port-
folio, we are exposed to credit risk. However, for certain life insurance
products, losses due to credit events can be shared with the policy-
holder.
Annual Report 2016 - Allianz Group
71
C - Group Management Report
As of 31 December 2016, the credit risk arising from our invest-
ment portfolio accounted for 86.4% (2015: 88.2%) of our total Group
pre-diversified internal credit risk. Credit Risk in the Life/Health busi-
ness segment is primarily driven by long-term assets covering long-
term liabilities. Typical investments are government bonds, senior
corporate bonds, covered bonds, self-originated mortgages and
loans, as well as a modest amount of derivatives. Due to the nature of
the business, the fixed income securities in the Property-Casualty
business segment tend to be short- to mid-term, which explains the
lower Credit Risk consumption in this segment.'
5,550
996
€ MN
2,502
Risks from changes in equity prices are normally associated with
decreasing share prices and increasing equity price volatilities. As
stock-market prices also might increase, opportunities may arise
from equity investments. As of 31 December 2016, our investments
excluding unit-linked business that are sensitive to changing equity
markets - amounting to a market value of € 47.0 BN² – would have lost
€ 12.4 BN in value assuming equity markets declined by 30%.
CREDIT SPREAD RISK
Our internal risk capital framework fully acknowledges the risk of
declining market values for our fixed income assets, such as bonds,
due to the widening of credit spreads. However, for our risk manage-
ment and appetite we also take into account the underlying economics
of our business model; for example, the application of the volatility
adjustment in our internal risk capital framework to partially mitigate
spread risk, as described in the section on yield curve and volatility
adjustment assumptions.
CURRENCY RISK
As our operating entities are typically invested in assets of the same
currency as their liabilities, the major part of foreign currency risk
results from the economic value of our non-Euro operating entities.
If non-Euro foreign exchange rates decline against the Euro from a
Group perspective, the Euro-equivalent net asset values also decrease.
1- The stated market value includes all investments whose market value is sensitive to interest rate move-
ments (excluding unit-linked business) in line with the Solvency II framework, and therefore is not based
on classifications given by accounting principles.
2- The stated market value includes all investments whose market value is sensitive to equity movements
(excluding unit-linked business) in line with the Solvency II framework, and therefore is not based on
classifications given by accounting principles.
However, at the same time the capital requirements in Euro terms
from the respective non-Euro entity also decrease, partially mitigat-
ing the total impact on our capitalization.
REAL ESTATE RISK
Despite the risk of decreasing real estate values, real estate is a suit-
able addition to our investment portfolio, due to good diversification
benefits as well as to the contribution of relatively predictable cash-
flows in the long term. As of 31 December 2016, about 3.3% (2015: 3.5%)
of the total pre-diversified risk was related to real estate exposures.
CREDIT RISK
Credit risk is measured as the potential economic loss in the value of
our portfolio that is due to either changes in the credit quality of our
counterparts ("migration risk") or the inability or unwillingness of
the counterparty to fulfill contractual obligations ("default risk”).
Credit risk arises from our fixed income investments, cash positions,
derivatives, structured transactions, receivables from Allianz agents
and other debtors, credit insurance, and reinsurance recoverables.
The following table presents our group-wide risk figures related to
credit risks.
ALLIANZ GROUP: RISK PROFILE - ALLOCATED CREDIT RISK BY BUSINESS SEG-
MENT (TOTAL PORTFOLIO BEFORE TAX AND NON-CONTROLLING INTERESTS)
pre-diversified
as of 31 December
Property-Casualty
Life/Health
Asset Management
Corporate and Other
Total Group
Share of total Group pre-diversified risk
2016
2015
€ MN
2,406
4,822
reserves.
Annual Report 2016 - Allianz Group
(174,302)
(170,170)
(151)
(2,474)
(1,557)
(884)
(1)
(409)
(1,273)
(720)
(622)
(3,007)
(5,461)
(1,335)
(1,411)
(183,676)
(184,595)
(2,300)
(2,193)
Business combinations (note 4):
Subtotal
169,032
Annual Report 2016 - Allianz Group
D - Consolidated Financial Statements
CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED
CONSOLIDATED STATEMENTS OF CASH FLOWS
€ MN
2016
2015
Proceeds from sale of subsidiaries, net of cash disposed
Payments for the purchase or origination of:
Available-for-sale investments
Held-to-maturity investments
Investments in associates and joint ventures
Non-current assets and disposal groups classified as held for sale
Real estate held for investment
Fixed assets of renewable energy investments
Loans and advances to banks and customers (purchased loans)
Property and equipment
Financial assets designated at fair value through income
168,728
(8)
Acquisitions of subsidiaries, net of cash acquired
44
64
Other (net)
4
(157)
Net cash flow used in financing activities
(1,732)
(2,837)
SUPPLEMENTARY INFORMATION ON THE CONSOLIDATED STATEMENTS OF CASH FLOWS
Income taxes paid
(2,933)
(2,609)
Dividends received
1,809
1,878
Interest received
19,263
Net cash from sale or purchase of treasury shares
99
(3,382)
(3,646)
52
Change in other loans and advances to banks and customers (originated loans)
Other (net)
(4,848)
38
Net cash flow used in investing activities
(19,765)
(4,142)
(708)
(20,394)
CASH FLOW FROM FINANCING ACTIVITIES
Net change in liabilities to banks and customers
19
911
7,059
365
5,217
Repayments of certificated liabilities and subordinated liabilities
(6,155)
(5,044)
Cash inflow from capital increases
Transactions between equity holders
Dividends paid to shareholders
Proceeds from the issuance of certificated liabilities and subordinated liabilities
19,412
126
11,465
46
60
4,535
5,319
(2,877)
(3,250)
(696)
(61)
(1,278)
2,365
(587)
(806)
(588)
202
909
775
622
1,359
1,345
Reserves for insurance and investment contracts
Reserves for loss and loss adjustment expenses
(290)
Realized gains/losses (net) and impairments of investments (net) of:
Available-for-sale and held-to-maturity investments, investments in associates and joint ventures, real estate held for investment,
loans and advances to banks and customers, non-current assets and disposal groups classified as held for sale
(6,540)
(6,407)
Other investments, mainly financial assets held for trading and designated at fair value through income
2,710
3,460
2,040
Depreciation and amortization
Interest credited to policyholder accounts
Net change in:
Financial assets and liabilities held for trading
Reverse repurchase agreements and collateral paid for securities borrowing transactions
Repurchase agreements and collateral received from securities lending transactions
Reinsurance assets
Deferred acquisition costs
Unearned premiums
Loan loss provisions
128
16,569
Deferred tax assets/liabilities
82
62
2,224
1,529
156,085
151,470
466
3,218
850
513
156
187
407
522
3
2
8,409
Subtotal
Loans and advances to banks and customers (purchased loans)
Property and equipment
Fixed assets of renewable energy investments
Real estate held for investment
361
262
Other (net)
Subtotal
Net cash flow provided by operating activities
CASH FLOW FROM INVESTING ACTIVITIES
Proceeds from the sale, maturity or repayment of:
(33)
14,031
(2,383)
16,676
21,461
23,663
Financial assets designated at fair value through income
Available-for-sale investments
Held-to-maturity investments
Investments in associates and joint ventures
Non-current assets and disposal groups classified as held for sale
14,211
(288)
Interest paid
(1,265)
Deferred acquisition costs (DAC)
Costs that vary with and are directly related to the acquisition and
renewal of insurance contracts and investment contracts with dis-
cretionary participation features are deferred by recognizing a DAC
asset. At inception, DAC is tested to ensure that it is recoverable over
the life of the contracts. Subsequently, loss recognition tests at the
end of each reporting period ensure that the DAC is covered by future
profits.
For short-duration, traditional long-duration, and limited-pay-
ment insurance contracts, DAC is amortized in proportion to premium
revenue recognized. For universal life-type and participating life
insurance contracts as well as investment contracts with discretionary
participation features, DAC is generally amortized over the life of a
book of contracts based on estimated gross profits (EGP) or estimated
gross margins (EGM), respectively.
Acquisition costs for unit-linked investment contracts are
deferred in accordance with IAS 18 if the costs are incremental. For
non-unit-linked investment contracts accounted for under IAS 39 at
amortized cost, acquisition costs that meet the definition of transac-
tion costs under IAS 39 are considered in the aggregate policy reserves.
Present value of future profits (PVFP)
The value of an insurance business or an insurance portfolio acquired
is measured by the PVFP, which is the present value of net cash flows
anticipated in the future from insurance contracts in force at the date
of acquisition. It is amortized over the life of the relevant contracts.
Deferred sales inducements
Sales inducements on non-traditional insurance contracts are
deferred and amortized using the same methodology and assump-
tions as for deferred acquisition costs.
Shadow accounting
For insurance contracts and investment contracts with discretionary
participation features, shadow accounting is applied to DAC, PVFP and
deferred sales inducements in order to include the effect of unreal-
ized gains or losses in the measurement of these assets in the same
way as it is done for realized gains or losses. When the gains or losses
are realized they are recognized in the income statement through
recycling and prior adjustments due to shadow accounting are
reversed.
Annual Report 2016 - Allianz Group
D - Consolidated Financial Statements
OTHER ASSETS
Other assets primarily consist of receivables, accrued dividends,
interest and rent as well as own-used property and equipment.
Depreciation is generally computed using the straight-line method
over the estimated useful lives of the assets.
The table below summarizes estimated useful lives for real
estate held for own use, equipment and software.
ESTIMATED USEFUL LIVES (IN YEARS)
Real estate held for own use
DEFERRED ACQUISITION COSTS
Assets and liabilities related to reinsurance are reported on a gross
basis. Reinsurance assets include balances expected to be recovered
from reinsurance companies. The amount of reserves ceded to re-
insurers is estimated in a manner consistent with the claim liability
associated with the reinsured risks. To the extent that the assuming
reinsurers are unable to meet their obligations, the respective ceding
insurers of the Allianz Group remain liable to its policyholders for the
portion reinsured. Consequently, allowances are made for receiv-
ables on reinsurance contracts which are deemed uncollectible.
REINSURANCE ASSETS
together with the offsetting changes in fair value of the corresponding
financial liabilities for unit-linked contracts.
D - Consolidated Financial Statements
financial derivatives, the latter category is mainly designated at fair
value to avoid accounting mismatches.
INVESTMENTS
Available-for-sale investments
Available-for-sale investments comprise debt and equity instru-
ments that are designated as available for sale or do not fall into the
other measurement categories. These investments are measured at
fair value through other comprehensive income. When an invest-
ment is derecognized or determined to be impaired, the cumulative
gain or loss previously recorded in other comprehensive income is
transferred and recognized in the consolidated income statement.
Realized gains and losses on those instruments are generally deter-
mined by applying the average cost method at the subsidiary level.
Held-to-maturity investments
Held-to-maturity investments are debt securities with fixed or deter-
minable payments and fixed maturities, for which the Allianz Group
has the positive intent and ability to hold to maturity. These assets
are initially measured at fair value plus any directly attributable
transaction costs. Subsequent to initial recognition, they are measured
at amortized cost using the effective interest rate method.
Funds held by others under reinsurance contracts assumed
Funds held by others under reinsurance contracts assumed relate to
cash deposits to which the Allianz Group is entitled, but which the
ceding insurer retains as collateral for future obligations of the
Allianz Group. The cash deposits are recorded at face value, less any
impairment for balances that are deemed not to be recoverable.
Software
Investments in associates and joint ventures
Real estate held for investment
Real estate held for investment is carried at cost less accumulated
depreciation and impairments. Real estate held for investment is
depreciated on a straight-line basis over its useful life, with a maxi-
mum of 50 years and regularly tested for impairment.
Fixed assets of renewable energy investments
These assets are accounted for as property, plant and equipment in
line with IAS 16. Hence, they are carried at cost less accumulated
depreciation and impairments.
LOANS AND ADVANCES TO BANKS AND CUSTOMERS
Loans and advances are non-derivative financial assets with fixed or
determinable payments that are not quoted in an active market and
which are not classified as financial assets held for trading, desig-
nated at fair value through income, or designated as available for
sale. These assets are initially measured at fair value plus any directly
attributable transaction costs. Subsequent to initial recognition, they
are measured at amortized cost using the effective interest rate
method.
FINANCIAL ASSETS AND LIABILITIES
FOR UNIT-LINKED CONTRACTS
Financial assets for unit-linked contracts are recorded at fair value,
with changes in fair value recognized in the income statement
For details on the accounting for investments in associates and joint
ventures please see the section principles of consolidation.
86
Equipment
Years
Liability adequacy tests are performed for each insurance portfolio
on the basis of estimates of future claims, costs, premiums earned,
and proportionate investment income. For short-duration contracts,
a premium deficiency is recognized if the sum of expected claim
costs and claim adjustment expenses, expected dividends to policy-
holders, DAC, and maintenance expenses exceeds related unearned
premiums while considering anticipated investment income.
For long-duration contracts a premium deficiency is recognized,
if actual experience regarding investment yields, mortality, morbidity,
terminations or expense indicates that existing contract liabilities,
along with the present value of future gross premiums, will not be
sufficient to cover the present value of future benefits and to recover
DAC.
UNEARNED PREMIUMS
For short-duration insurance contracts, such as most of the property
and casualty contracts, premiums to be earned in future years are
recorded as unearned premiums. These premiums are earned in sub-
sequent periods in relation to the insurance coverage provided.
Amounts charged as consideration for origination of certain
long-duration insurance contracts (i.e. initiation or front-end fees)
are reported as unearned revenue which are included in unearned
premiums. These fees are recognized using the same amortization
methodology as DAC including shadow accounting.
RESERVES FOR LOSS AND LOSS ADJUSTMENT EXPENSES
Reserves are established for the payment of losses and loss adjust-
ment expenses (LAE) on claims which have occurred but are not yet
settled. Reserves for loss and loss adjustment expenses fall into two
categories: case reserves for reported claims and reserves for incurred
but not reported losses (IBNR).
Case reserves for reported claims are based on estimates of
future payments that will be made with respect to claims, including
LAE relating to such claims. The estimates reflect the informed judg-
ment of claims personnel based on general insurance reserving prac-
tices and knowledge of the nature and value of a specific type of
claim. These case reserves are regularly re-evaluated in the ordinary
course of the settlement process and adjustments are made as new
information becomes available.
IBNR reserves are established to recognize the estimated cost of
losses that have occurred but where the Allianz Group has not yet
been notified. IBNR reserves, similar to case reserves for reported
claims, are established to recognize the estimated costs, including
expenses, necessary to bring claims to final settlement. The Allianz
Group relies on its past experience, adjusted for current trends and
any other relevant factors to estimate IBNR reserves.
IBNR reserves are estimates based on actuarial and statistical
projections of the expected cost of the ultimate settlement and
administration of claims. The analyses are based on facts and cir-
cumstances known at the time, predictions of future events, esti-
mates of future inflation and other societal and economic factors.
Trends in claim frequency, severity and time lag in reporting are
examples of factors used in projecting the IBNR reserves. IBNR reserves
Annual Report 2016 - Allianz Group
87
40
D - Consolidated Financial Statements
are reviewed and revised periodically as additional information
becomes available and actual claims are reported.
Reserves for loss and loss adjustment expenses are not discount-
ed, except when payment amounts are fixed and timing is reasonably
determinable.
RESERVES FOR INSURANCE AND INVESTMENT CONTRACTS
Reserves for insurance and investment contracts include aggregate
policy reserves, reserves for premium refunds and other insurance
Liability adequacy tests
accordance with the conditions of the reinsurance contracts, and in
consideration of the original contracts for which the reinsurance was
concluded. When the reinsurance contracts do not transfer significant
insurance risk, deposit accounting is applied as required under the
related reinsurance accounting provisions of US GAAP or under IAS 39.
The Allianz Group's consolidated financial statements reflect the
effects of ceded and assumed reinsurance contracts. Assumed rein-
surance premiums, commissions and claim settlements, as well as
the reinsurance element of technical provisions are accounted for in
Reinsurance contracts
max. 50
2-10
2-10
Intangible assets with finite useful lives are measured at cost less
accumulated amortization and impairments. Intangible assets with
indefinite useful lives are tested annually for impairment and when-
ever there is a triggering event. They are also reviewed annually to
determine whether the indefinite-life classification is still appropriate.
The table below summarizes estimated useful lives and the
amortization methods for each class of intangible assets with finite
useful lives.
ESTIMATED USEFUL LIVES (IN YEARS) AND AMORTIZATION METHODS
Long-term distribution agreements
Acquired business portfolios
Customer relationships
Useful lives Amortization method
10-25 straight-line considering
contractual terms
INTANGIBLE ASSETS AND GOODWILL
13-42
6-13
consumption of future
economic benefit
straight-line or in relation
to customer churn rates
Goodwill is recognized for business combinations in the amount of
the consideration transferred in excess of the fair values assigned to
the identifiable assets acquired and liabilities assumed. Goodwill is
accounted for at the acquiree in the acquiree's functional currency.
There is an at least annual evaluation whether it is deemed recover-
able.
INSURANCE, INVESTMENT
AND REINSURANCE CONTRACTS
Insurance and investment contracts
Insurance contracts and investment contracts with discretionary
participating features are accounted for under the insurance
accounting provisions of US GAAP, as at first-time adoption of IFRS 4
on 1 January 2005 have been applied, where IFRS 4 does not provide
specific guidance. Investment contracts without discretionary par-
ticipation features are accounted for as financial instruments in
accordance with IAS 39.
in proportion to the
(1,185)
98
Annual Report 2016 - Allianz Group
6,465
14,463
14,842
Annual Report 2016 - Allianz Group
83
D - Consolidated Financial Statements
Notes to the Consolidated Financial Statements
GENERAL INFORMATION
1 – Nature of operations
and basis of presentation
The accompanying consolidated financial statements present the
operations of Allianz SE with its registered office in Königinstrasse 28,
80802 Munich, Germany, and its subsidiaries (the Allianz Group).
Allianz SE is recorded in the Commercial Register of the municipal
court in Munich under the number HRB 164232.
They have been prepared in conformity with International
Financial Reporting Standards (IFRS), as adopted under European
Union (E.U.) regulations in accordance with § 315a (1) of the German
Commercial Code (HGB). Within these consolidated financial state-
ments, the Allianz Group has applied all standards and interpreta-
tions issued by the IASB and endorsed by the E.U. that are compulsory
as of 31 December 2016.
In accordance with the provisions of IFRS 4 insurance contracts
are recognized and measured on the basis of accounting principles
generally accepted in the United States of America (US GAAP) as at
first-time adoption of IFRS 4 on 1 January 2005.
The consolidated financial statements are prepared as of and for
the year ended 31 December 2016. The Allianz Group's presentation
currency is the Euro (€). Amounts are rounded to the nearest million
(€ MN) unless otherwise stated.
The consolidated financial statements were authorized for issue
by the Board of Management on 14 February 2017.
The Allianz Group offers Property-Casualty insurance, Life/
Health insurance and Asset Management products and services in
over 70 countries.
2-Accounting policies and
new accounting pronouncements
6,241
Treasury bills, discounted treasury notes, similar treasury securities, bills of exchange and checks
Total
225
94
SIGNIFICANT NON-CASH TRANSACTIONS
Transfer of profit participating notes
Investments in associates and joint ventures
Loans and advances to banks and customers
815
(815)
CASH AND CASH EQUIVALENTS
€ MN
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
as of 31 December
2015
Balances with banks payable on demand
6,855
7,764
Balances with central banks
1,273
388
Cash on hand
2016
85
PRINCIPLES OF CONSOLIDATION
internal asset managers. In such cases, the investment fund qualifies
as subsidiary if the Allianz Group is in a principal instead of an agent
role with regard to the investment fund. This qualification takes into
account, in particular, kick-out rights held by third-party investors as
well as the aggregate economic interest of the Allianz Group in the
investment funds.
Financial assets and liabilities are offset and the net amount is pre-
sented in the balance sheet only when there is a legally enforceable
right to offset the recognized amounts and there is an intention to
either settle on a net basis, or to realize the asset and settle the liability
simultaneously.
Securities lending and repurchase agreements
The Allianz Group enters into securities lending transactions and
repurchase agreements. Cash received in the course of those trans-
actions is recognized together with a corresponding liability. Securities
received as collateral under lending transactions are not recognized
and securities sold under repurchase agreements are not derecog-
nized if risks and rewards have not been transferred. Securities bor-
rowing transactions generally require the Allianz Group to deposit
cash with the security's lender. Fees paid are reported as interest
expenses.
Impairments
The evaluation of whether a financial debt instrument is impaired
requires analysis of the underlying credit risk/quality of the relevant
issuer and involves significant management judgment. The presence
of either a decline in fair value below amortized cost or the down-
grade of an issuer's credit rating does not by itself represent objective
evidence of a loss event, but may represent objective evidence of a
loss event when considered with other available information.
Once impairment is triggered for an available-for-sale debt
instrument, the cumulative loss recognized in the other comprehen-
sive income is reclassified to profit or loss. The cumulative loss cor-
responds to the difference between amortized cost and the current
fair value of the investment. Further declines in fair value are recog-
nized in other comprehensive income unless there is further objec-
tive evidence that such declines are due to a credit-related loss event.
If in subsequent periods the impairment loss is reversed, the reversal
is measured as the lesser of the full original impairment loss previ-
ously recognized in the income statement and the subsequent
increase in fair value.
For held-to-maturity investments and loans, the impairment
loss is measured as the difference between the amortized cost and the
expected future cash flows using the original effective interest rate.
An available-for-sale equity security is considered to be impaired
if there is objective evidence that the cost may not be recovered. The
Allianz Group's policy considers a decline to be significant if the fair
value is below the weighted average cost by more than 20%. A decline
is considered to be prolonged if the fair value is below the weighted
average cost for a period of more than nine consecutive months. If
an available-for-sale equity security is impaired, any further declines
in the fair value at subsequent reporting dates are recognized as
impairments.
Reversals of impairments of available-for-sale equity securities
are not recorded through the income statement but recycled out of
other comprehensive income when sold.
Hedge accounting
For derivative financial instruments used in hedge transactions that
meet the criteria for hedge accounting, the Allianz Group designates
the derivative as a hedging instrument in a fair value hedge, cash flow
hedge, or hedge of a net investment in a foreign operation. The Allianz
Group documents the hedge relationship, as well as its risk manage-
ment objective and strategy for entering into the hedge transaction.
The Allianz Group assesses, both at the hedge's inception and on an
ongoing basis, whether the hedging instruments used are expected
to be highly effective in offsetting changes in fair values or cash flows
of the hedged items.
Derivative financial instruments designated in hedge accounting
relationships are included in the line items Other assets and Other
liabilities. Freestanding derivatives are included in the line item
financial assets or liabilities held for trading. For further information
on derivatives, please refer to note 35 Derivative financial instru-
ments.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents include balances with banks payable on
demand, balances with central banks, cash on hand, treasury bills to
the extent they are not included in financial assets held for trading,
and checks and bills of exchange that are eligible for refinancing at
central banks, subject to a maximum term of three months from the
date of acquisition.
FINANCIAL ASSETS AND LIABILITIES
CARRIED AT FAIR VALUE THROUGH INCOME
Financial assets and liabilities carried at fair value through income
include financial assets and liabilities held for trading as well as
financial assets and liabilities designated at fair value through
income. While the former category includes trading instruments and
Offsetting
A financial asset is derecognized when the contractual rights to
the cash flows from the financial asset expire or the Allianz Group
transfers the asset and substantially all of the risks and rewards of
ownership. A financial liability is derecognized when it is extin-
guished.
Financial assets are generally recognized and derecognized on the
trade date, i.e. when the Allianz Group commits to purchase or sell
securities or incur a liability.
Recognition and Derecognition
Subsidiaries are consolidated as from the date on which control
is obtained by the Allianz Group, up to the date on which the Allianz
Group no longer maintains control. Accounting policies of subsid-
iaries are adjusted where necessary to ensure consistency with the
accounting policies adopted by the Allianz Group. The effects of intra-
Allianz Group transactions are eliminated.
Business combinations and measurement
of non-controlling interests
Where newly acquired subsidiaries are subject to business combina-
tion accounting, the provisions of IFRS 3 are applied. Any non-control-
ling interests in the acquiree can be measured either at its fair value
at the acquisition date or at the non-controlling interest's propor-
tionate share of the acquiree's identifiable net assets. This option is
exercised on a case-by-case basis.
Associates and joint arrangements
Associates are entities over which the Allianz Group can exercise sig-
nificant influence. In general, if the Allianz Group holds 20% or more
of the voting power in an investee but does not control the investee,
it is assumed to have significant influence, unless it can be clearly
demonstrated that this is not the case. Investments in associates are
generally accounted for using the equity method.
Joint arrangements are structures over which the Allianz Group
and one or more other parties contractually agreed to share control,
which exists only when decisions over the relevant activities require
the unanimous consent of the parties sharing control. Joint arrange-
ments whereby the Allianz Group has rights to the net assets of the
arrangement (joint ventures) are generally accounted for using the
equity method.
The Allianz Group accounts for all material investments in asso-
ciates and joint arrangements with a time lag of no more than three
months. Income from investments in associates and joint arrange-
ments - excluding distributions – is included in interest and similar
income. Accounting policies of associates and joint arrangements are
adjusted where necessary to ensure consistency with the accounting
policies adopted by the Allianz Group.
FOREIGN CURRENCY TRANSLATION
Scope of consolidation and consolidation procedures
In accordance with IFRS 10, the consolidated financial statements of
the Allianz Group include the financial statements of Allianz SE and
its subsidiaries. The Allianz Group controls a subsidiary when it is
exposed to, or has rights to, variable returns from its involvement
with the subsidiary and has the ability to affect those returns through
its power over the subsidiary. Subsidiaries are usually entities where
Allianz SE, directly or indirectly, owns more than half of the voting
rights or similar rights with the ability to affect the returns of the sub-
sidiaries for its own benefit. In order to determine whether entities
qualify as subsidiaries, potential voting rights that are currently
exercisable or convertible are taken into consideration. For certain
entities, voting or similar rights are not the dominant factor of con-
trol, such as when any voting rights relate to administrative tasks
only and returns are directed by means of contractual arrangements,
as is the case mainly for investment funds managed by Allianz Group
Translation from any foreign currency
to the functional currency
84
Annual Report 2016 - Allianz Group
D - Consolidated Financial Statements
denominated in foreign currencies and measured at historical cost
are translated at historical rates, non-monetary items measured at
fair value are translated using the closing rate. Foreign currency gains
and losses arising from foreign currency transactions are reported in
income from financial assets and liabilities carried at fair value
through income (net), except when the gain or loss on a non-monetary
item measured at fair value is recognized in other comprehensive
income. In this case, any foreign exchange component of that gain or
loss is also recognized in other comprehensive income.
Translation from the functional currency
to the presentation currency
For the purposes of the consolidated financial statements, the results
and financial position of each of the Allianz Group's subsidiaries are
expressed in Euro, the presentation currency of the Allianz Group.
Assets and liabilities of subsidiaries not reporting in Euro are trans-
lated at the closing rate on the balance sheet date and income and
expenses are translated at the quarterly average exchange rate. Any
foreign currency translation differences, including those arising from
the equity method, are recorded in other comprehensive income.
FINANCIAL INSTRUMENTS
The individual financial statements of each of the Allianz Group's
subsidiaries are prepared in the currency prevailing in the primary
economic environment where the subsidiary conducts its ordinary
activities (its functional currency). Transactions recorded in curren-
cies other than the functional currency (foreign currencies) are
recorded at the exchange rate prevailing on the date of the trans-
action. At the balance sheet date, monetary assets and liabilities
denominated in foreign currencies are translated into the functional
currency using the closing exchange rate. While non-monetary items
Aggregate policy reserves
Share of earnings from investments in associates and joint ventures
6,987
Restructuring charges
(186)
(231)
Other expenses
(5)
(8)
Expenses from fully consolidated private equity investments
(792)
Total expenses
(100,208)
(100,640)
Income before income taxes
Income taxes
Net income
10,292
10,196
34
(322)
(154)
Amortization of intangible assets
(3,777)
Loan loss provisions
(46)
(60)
Impairments of investments (net)
30
(1,940)
(1,526)
Investment expenses
(3,042)
7,250
31
(1,215)
Acquisition and administrative expenses (net)
32
(25,301)
(25,718)
Fee and commission expenses
33
(3,734)
(1,306)
(1,224)
(3,209)
Net income attributable to:
Non-controlling interests
Shareholders
Changes arising during the year
Subtotal
Available-for-sale investments
Reclassifications to net income
Changes arising during the year
Subtotal
Cash flow hedges
Reclassifications to net income
Changes arising during the year
Subtotal
Share of other comprehensive income of associates and joint ventures
Reclassifications to net income
Changes arising during the year
Subtotal
Miscellaneous
Reclassifications to net income
Subtotal
Items that may never be reclassified to profit or loss
Reclassifications to net income
Foreign currency translation adjustments
Items that may be reclassified to profit or loss in future periods
Other comprehensive income
367
6,883
371
6,616
42
15.14
14.56
Basic earnings per share (€)
Diluted earnings per share (€)
42
15.00
6,987
14.55
79
80
80
D - Consolidated Financial Statements
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
€ MN
Net income
Annual Report 2016 - Allianz Group
Changes in actuarial gains and losses on defined benefit plans
(1,207)
Interest expenses
The aggregate policy reserves for participating life insurance contracts
are calculated using the net level premium method based on assump-
tions for mortality, morbidity and interest rates that are guaranteed
in the contract or used in determining the policyholder dividends (or
premium refunds).
CONSOLIDATED INCOME STATEMENTS
CONSOLIDATED INCOME STATEMENTS
€ MN
D - Consolidated Financial Statements
note
2016
2015
Gross premiums written
76,331
76,723
Ceded premiums written
(4,901)
(5,536)
Change in unearned premiums (net)
(1,073)
(543)
For traditional long-duration insurance contracts, such as tradi-
tional life and health products, aggregate policy reserves are com-
puted using the net level premium method, based on best-estimate
assumptions adjusted for a provision for adverse deviation for mortal-
ity, morbidity, expected investment yields, surrenders, and expenses
at the policy inception date, which remain locked in thereafter unless
a premium deficiency occurs.
The aggregate policy reserves for universal life-type insurance
contracts are equal to the account balance, which represents premi-
ums received and investment return credited to the policy less
deductions for mortality costs and expense charges. The aggregate
policy reserve also includes reserves for investment contracts with
discretionary participation features and liabilities for guaranteed
minimum mortality and morbidity benefits related to non-traditional
contracts with annuitization options and unit-linked insurance
contracts.
Insurance contract features which are not closely related to the
underlying insurance contracts are bifurcated from the insurance
contracts and accounted for as derivatives in line with IFRS 4 and IAS 39.
The assumptions used for aggregate policy reserves are deter-
mined using current and historical client data, industry data, and in
the case of assumptions for interest reflect expected earnings on
assets, which back the future policyholder benefits. The information
used by the Allianz Group's actuaries in setting such assumptions
includes, but is not limited to, pricing assumptions, available experi-
ence studies, and profitability analyses.
88
The share-based compensation plans of the Allianz Group are classi-
fied as either equity-settled or cash-settled plans. Equity-settled
plans are measured at fair value on the grant date (grant-date fair
value) and the grant-date fair value is recognized as an expense over
the vesting period. Where equity-settled plans involve equity instru-
ments of Allianz SE, a corresponding increase in shareholders' equity
is recognized. Where equity-settled plans involve equity instruments
of subsidiaries of the Allianz Group, the corresponding increase is
recognized in non-controlling interests. Equity-settled plans include
a best estimate of the number of equity instruments that are expected
to vest in determining the amount of expense to be recognized. For
cash-settled plans, the Allianz Group accrues the fair value of the
award as a compensation expense over the vesting period. Upon vest-
ing, any change in the fair value of any unexercised awards is also
recognized as a compensation expense. Where expected tax deduc-
tions differ in amount and timing from the cumulative share-based
payment expense recognized in profit or loss, deferred taxes are rec-
ognized on temporary differences.
Pensions and similar obligations are usually measured at present
value and presented net of plan assets by applying the provisions of
IAS 19. This particularly requires calculating an interest income on
plan assets with the same interest rate used to discount the defined
benefit obligation. The resulting net interest expense or income is
recognized in profit or loss under administrative expenses in the con-
solidated income statement. The interest rates for discounting are
determined by reference to market yields on high-quality corporate
bonds in the respective markets at the end of the reporting period. For
maturities where no high-quality corporate bonds are available as a
benchmark, discount factors are estimated by extrapolating current
market rates along the yield curve.
Pensions and similar obligations
OTHER LIABILITIES
Reserves for premium refunds include the amounts allocated under
the relevant local statutory/contractual regulations or at the entity's
discretion to the accounts of the policyholders and the amounts
resulting from the differences between these IFRS-based financial
statements and the local financial statements (latent reserves for
premium refunds), which will reverse and enter into future profit
participation calculations. Unrealized gains and losses recognized
for available-for-sale investments are recognized in the latent
reserves for premium refunds to the extent that policyholders will
participate in such gains and losses on the basis of statutory or con-
tractual regulations when they are realized, based on and similar to
shadow accounting. The profit participation allocated to participat-
ing policyholders or disbursed to them reduces the reserves for pre-
mium refunds.
Reserves for premium refunds
policy reserves for those contracts are initially recognized at fair
value, or the amount of the deposit by the contract holder, net of the
transaction costs that are directly attributable to the issuance of the
contract. Subsequently, those contracts are measured at amortized
cost using the effective interest rate method.
Premiums earned (net)
Non-unit-linked investment contracts without discretionary
participating features are accounted for under IAS 39. The aggregate
Participating life
insurance contracts
2.2-5.0
0.8-4.3
2.5-6.0
2.5-6.0
insurance contracts
Traditional
long-duration
Deferred acquisition costs
Aggregate policy reserves
%
INTEREST RATE ASSUMPTIONS
The interest rate assumptions used in the calculation of deferred
acquisition costs and aggregate policy reserves are as follows:
The Allianz Group has recognized all rights and obligations related
to issued insurance contracts according to its accounting policies,
and thus has not separately recognized an unbundled deposit com-
ponent in respect of any of its insurance contracts.
29
21
70,645
Total income
110,500
110,836
Claims and insurance benefits incurred (gross)
(55,914)
(54,472)
Claims and insurance benefits incurred (ceded)
2,758
2,770
Claims and insurance benefits incurred (net)
27
(53,156)
(51,702)
Change in reserves for insurance and investment contracts (net)
28
(13,173)
(14,065)
732
241
100
26
Interest and similar income
22
22,149
22,643
Income from financial assets and liabilities carried at fair value through income (net)
23
(999)
(2,307)
70,357
Realized gains/losses (net)
8,403
7,937
Fee and commission income
25
10,491
10,945
Other income
Income from fully consolidated private equity investments
24
Adjustments to reconcile net income to net cash flow provided by operating activities
Total other comprehensive income
Total comprehensive income attributable to:
Non-controlling interests
2
2
2
Transactions between equity holders
352
4
(4)
35
17
52
Dividends paid
(3,320)
(3,320)
(325)
(3,646)
Balance as of 31 December 2016
28,928
Treasury shares
Paid-in capital
7,884
405
244
(144)
99
(3,112)
(3,112)
(270)
(3,382)
28,928
27,336
24,222
10,920
63,144
2,955
66,099
6,397
168
914
7,480
(926)
4
(754)
67,341
21,461
23,663
(19,765)
(20,394)
(1,732)
(2,837)
52
548
16
979
14,842
13,863
(395)
14,463
14,842
Net income
7,250
2015
2016
CASH FLOW FROM OPERATING ACTIVITIES
Cash and cash equivalents at end of period
3,052
70,392
1- Total comprehensive income in shareholders' equity for the year ended 31 December 2016 comprises net
income attributable to shareholders of € 6,883 MN (2015: € 6,616 MN).
2- Includes income taxes.
Annual Report 2016 - Allianz Group
81
D - Consolidated Financial Statements
CONSOLIDATED STATEMENTS OF CASH FLOWS
11,830
CONSOLIDATED STATEMENTS OF CASH FLOWS
SUMMARY
Net cash flow provided by operating activities
Net cash flow used in investing activities
Net cash flow used in financing activities
Effect of exchange rate changes on cash and cash equivalents
Change in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents reclassified to assets of disposal groups held for sale
€ MN
Total comprehensive income
(3)
63
(41)
57
(48)
13
1
(4)
79
9
80
(127)
23
(127)
23
(335)
634
470
(1,370)
7,884
74
(7)
(17)
(2,973)
Shareholders
For further details on the income taxes associated with different com-
ponents of other comprehensive income, please see note 34 Income
taxes.
2016
2015
7,250
6,987
13
5,617
85
993
156
1,078
(1,678)
(1,279)
2,552
(1,694)
875
143
243
405
414
5,202
60,747
2,955
63,702
7,151
1,053
(3,001)
5,202
414
5,617
Paid-in capital
Treasury shares
Transactions between equity holders
Dividends paid
Balance as of 31 December 2015
Total comprehensive income¹
63
63
13,917
(1,977)
19,878
28,928
Annual Report 2016 - Allianz Group
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
€ MN
D - Consolidated Financial Statements
Balance as of 1 January 2015
Total comprehensive income¹
Retained
7,480
Paid-in capital
Foreign
currency
translation
adjustments
Unrealized
gains and
Non-
losses (net)
Shareholders'
equity
controlling
interests
Total equity
earnings
Share-based compensation plans
Changes arising during the year
Allianz (ill
Annual Report 2017 - Allianz Group
A
TO OUR INVESTORS
Pages 151-158
The consolidated financial statements are presented in millions of Euros (€ mn) unless otherwise stated. Due
to rounding, numbers presented may not add up precisely to the totals provided and percentages may not
precisely reflect the absolute figures.
Disclaimer regarding roundings
153 Independent Auditor's Report
152 Responsibility Statement
E_ Further Information
Pages 79-150
125 Other Information
120 Notes to the Consolidated Income Statements
103 Notes to the Consolidated Balance Sheets
86 General Information
84 Consolidated Statements of Cash Flows
1
A_ To our Investors
Dear
2
Our aim is to utilize the valuable time and energy of our fantastic staff, both in the back office and in the sales force, to
provide even better, even more personal support for our customers. We want to hold on to the things that customers would
miss- and let go of things that generate costs without adding value. High productivity is directly reflected in customer value,
brand value, and growth, which is why we invest in new digital learning platforms, for example, so our employees can get fit
for the future. We systematically look into what skills our staff might need as we go forward, and how the significance of
different fields of work might shift – because we want to be able to shape change rather than merely react to it.
We are very much aware that we continue to have a lot of work ahead of us. In particular, we need to become more pro-
ductive and we need to be quicker and more rigorous in tackling necessary changes, especially in the area of digitalization.
This will be one of the most urgent goals to pursue this year and over the next few years. It specifically concerns our proper-
ty-casualty insurance, but not only. The key levers are to reduce complexity and to consistently simplify products, structures,
and sales processes; we also need to increase agility, establish scalable platforms, and, of course, continue digitalizing
everything we do.
So, what's next?
In addition, as a further step to increase your company's capital efficiency, we have launched another share buy-back pro-
gram for 2018 worth up to € 2 bn. The program also shows how confident we are that we will continue to grow our value
even in uncertain times. Note, however, that we do not intend to make this a habit - rather, we are taking advantage of
current business conditions. Looking at the entire year 2017, the total return on your investment in Allianz shares (share price
plus dividend payment) was 27.3% - compared to an average total return across all STOXX Europe 600 Insurance stocks of
11.7% and across all DAX stocks of 12.5%.
What does all of this mean for you, our investors? The market capitalization of Allianz grew by € 12.6 bn in 2017. As a result, the
value of your shares increased 22.0%. We have proposed to the Supervisory Board that the dividend for the 2017 financial year
shall be increased to € 8.00, a 5% plus and the fifth dividend increase in succession.
Our strength is also noticed by the general public: According to Brand Finance, Allianz's brand value is the highest of all
globally operating insurers. The Allianz brand stands for quality and expertise, trust and reliability - all attributes that have
lost none of their appeal in the digital age.
At the same time, we have divested businesses that did not offer satisfactory profitability prospects and will probably be
better off in someone else's hands. This includes the decision to sell our shares in Oldenburgische Landesbank AG, as
well as to transfer a large life portfolio in Taiwan. Furthermore, our 2017 balance sheet was no longer negatively im-
pacted by our South Korean life insurer, the sale of which was concluded in the previous year.
83 Consolidated Statements of Changes in Equity
Annual Report 2017 - Allianz Group
Asset Management delivered outstanding results, with PIMCO performing strongly and AllianzGI prospering as well.
In life insurance, we have managed to set ourselves even further apart from the competition by successfully shifting the
portfolio to less capital-intensive products, thus adding more value for customers. We were rewarded with a new-
business margin of 3.4% and a 30% increase in the value of new business.
These are some of the joint achievements we are proud to report for 2017:
These are all clear signs that the Renewal Agenda, our global strategy program, is producing results. One of its objectives is
technical excellence - and the figures show how good a grip our people have on the business. We are also making good
progress on the other objectives laid down in our Renewal Agenda. Above all, we are placing a stronger focus on customer
satisfaction, in addition to financial figures - and customer satisfaction has reached above-average levels in 60% of our
businesses. We are growing again, too: Our total revenues increased by 3% this past year, reaching € 126 bn by year-end.
We are making progress in steering our company culture towards a culture of "Inclusive Meritocracy"; I am particularly
proud of these developments, which have been confirmed by the annual improvements in our employee engagement
survey. I have great respect for how both our in-house employees and our sales partners are coping with the double chal-
lenge of implementing the Renewal Agenda while continuing their daily work to provide our customers with the most com-
prehensive and uncomplicated service possible. My sincere thanks go to them all.
The year 2017 looks to be the most expensive year for insurers in terms of natural catastrophes. And yet, for Allianz investors
there is no cause for alarm. Even in a year marked by numerous natural disasters, persistent low interest rates, and political
uncertainties, we delivered an operating profit of € 11.1 bn and achieved € 6.8 bn in net income attributable to sharehold-
ers. Our robust balance sheet demonstrates our strength and resilience: Our Solvency II capitalization ratio was again
strong, amounting to 229% as of 31 December 2017.
OLIVER BÄTE
Chairman of the
Board of Management
-
Investors
We have made some important investment decisions, most recently the increase in our stake in our credit insurer Euler
Hermes, a global leader. In the United Kingdom we have entered into a joint venture with the insurer LV=, thus creating
the third-largest retail insurer in the country with substantial long-term growth potential. In North Africa, we officially
launched operations under the new name Allianz Maroc at the beginning of the year, thus expanding our presence in
the region. Acquisitions in Nigeria and Saudi Arabia will further strengthen our position. Last but not least, we have in-
vested in Lemonade, a digital insurer whose market presence and technology-driven business model will serve as an
example for customer-oriented and end-to-end digitalization.
With the support from our Supervisory Board, our wonderful employees, and a sharp strategic focus, your Allianz is moving
in the right direction. We are well prepared to meet future challenges and continue weathering difficult market environ-
ments. Thank you for trusting us to keep creating value for you in the future.
82 Consolidated Statements of Comprehensive Income
80 Consolidated Balance Sheets
17 Statement on Corporate Management pursuant to § 315d and § 289f of the HGB
(part of the Group Management Report)
12 Corporate Governance Report
B_Corporate Governance
10 Mandates of the Members of the Board of Management
9 Mandates of the Members of the Supervisory Board
4 Supervisory Board Report
2 Letter to the Investors
-
A_ To our Investors
CONTENT
internet pages, etc. within this report are also linked.
►All references to chapters, pages, notes,
►To go directly to any chapter, simply click
on the headline or the page number.
ALLIANZ GROUP
ANNUAL REPORT 2017
COMPETENCE
CHANGE
FUTURE
20 Takeover-related Statements and Explanations (part of the Group Management Report)
23 Remuneration Report (part of the Group Management Report)
C_Group Management Report
36 Business Operations
39 Business Environment
D_Consolidated Financial Statements
Pages 35-78
Pages 11-34
Pages 1-10
77 Controls over Financial Reporting
62 Risk and Opportunity Report
Reconciliations
81 Consolidated Income Statements
60
55 Balance Sheet Review
51 Outlook 2018
50 Corporate and Other
48 Asset Management
45 Life/Health Insurance Operations
43 Property-Casualty Insurance Operations
41 Executive Summary of 2017 Results
57 Liquidity and Funding Resources
Sincere
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
عالی عنفه
In compliance with the special legal provisions applying to insurance companies, the statutory auditor and the
auditor for the review of the half-yearly financial report are appointed by the Supervisory Board of Allianz SE,
not by the AGM. The Supervisory Board appointed KPMG as statutory auditor for the annual Allianz SE and
consolidated financial statements, as well as for the review of the half-yearly financial report of the financial
year 2017. KPMG audited the financial statements of Allianz SE and the Allianz Group as well as the respective
management reports. They issued an auditor's report without any reservations. The consolidated financial
statements were prepared on the basis of the International Financial Reporting Standards (IFRS), as adopted in
the European Union. KPMG performed a review of the half-yearly financial report. In addition, KPMG was also
mandated to perform an audit of the market value balance sheet according to Solvency II as of 31 December
2017, for Allianz SE and the Allianz Group.
Nomination Committee: Michael Diekmann (Chairman), Christine Bosse, Jim Hagemann Snabe
Technology Committee: Jim Hagemann Snabe (Chairman), Gabriele Burkhardt-Berg, Michael Diekmann,
Dr. Friedrich Eichiner, Rolf Zimmermann
Risk Committee: Michael Diekmann (Chairman), Christine Bosse, Dr. Friedrich Eichiner, Godfrey Hayward,
Jürgen Lawrenz
Audit Committee: Dr. Friedrich Eichiner (Chairman), Sophie Boissard, Jean-Jacques Cette, Michael Diekmann,
Martina Grundler
Personnel Committee: Michael Diekmann (Chairman), Herbert Hainer, Rolf Zimmermann
Standing Committee: Michael Diekmann (Chairman), Gabriele Burkhardt-Berg, Herbert Hainer, Jürgen Lawrenz,
Jim Hagemann Snabe
Annual Report 2017 - Allianz Group
Vice Chairmen: Jim Hagemann Snabe, Rolf Zimmermann
The Supervisory Board was informed regularly and comprehensively of the committees' work.
The Nomination Committee had no reason to convene a meeting in the financial year 2017.
The Technology Committee held two meetings in 2017. In the first meeting it dealt with the major focus and
organization of the committee's work as well as the current IT-Systems and the IT-Architecture within the
Allianz Group. In both meetings the committee dealt with the status of the project to assess the future readiness
of the Allianz Group's IT. In addition, the committee discussed IT Governance and IT Security.
The Risk Committee held two meetings in 2017, during which it discussed the current risk situation of the Allianz
Group and Allianz SE with the Board of Management. The risk report and other risk-related statements con-
tained in the annual financial statements - both of Allianz SE and consolidated - were reviewed with the auditor,
as were the respective management reports, and the Audit Committee was informed of the result. The appro-
priateness of the early risk recognition system at Allianz and the result of further, voluntary risk assessments by
the auditor were also discussed. The committee took a detailed look at the risk strategy and capital management,
as well as the effectiveness of the risk management system, in particular the limit system for the Allianz Group and
Allianz SE. It also dealt extensively with the interest rate sensitivity in the life insurance business, discussed possi-
ble measures to reduce it, and addressed the investment risk currently associated with equity investments and
credit spreads. Other matters considered included the risk strategy of Allianz SE and the Allianz Group, the
changes planned in 2017 to the internal Solvency II model, and the report on the own risk and solvency assess-
ment (ORSA). In addition, the Risk Committee dealt with the designation of Allianz as a systemically relevant
insurer (G-SII).
ny, as well as the 2017 audit plan of the Internal Audit function. The committee's work focused on several issues
regarding Solvency II, including Solvency II governance and Solvency II reporting. In this respect, it also initiated
a follow-up review of the group-wide implementation of governance requirements. The committee also ad-
dressed the findings of a BaFin review as well as the new legal requirements for non-financial reporting (CSR)
and the Supervisory Board's role in this regard. In addition, the head of the Group Actuarial function presented
its annual report. The committee adopted two written resolutions approving the engagement of the current and
future auditors to perform non-audit services at foreign Group companies.
Annual Report 2017 - Allianz Group
The Audit Committee held five regular meetings and adopted two resolutions by written procedure in 2017. In
the presence of the auditors, it discussed the annual financial statements of Allianz SE and the consolidated
financial statements of the Allianz Group, the management reports and auditor's reports, and the half-yearly
financial report. The Audit Committee saw no reason to raise any objections. In addition, the Board of Man-
agement submitted its report on the results of the first and third quarter. The committee also dealt with the
auditor's engagement and established audit areas of focus for the 2017 financial year. It further discussed
assignments to the auditors for non-audit services and approved an appropriate positive list for audit and non-
audit services authorized in advance. In addition, it dealt extensively with the compliance system, the internal
audit system, and the financial reporting process as well as the respective internal controls. The committee was
also updated on the procedures and programs for complaints concerning matters in accounting, internal con-
trols, and auditing. The committee received regular reports on legal and compliance issues and on the work of
the Internal Audit department. In addition, the Audit Committee dealt with the preparations for the auditor
rotation starting from the financial year 2018, including the process of transitioning to the new auditing compa-
CHAIR AND COMMITTEES OF THE SUPERVISORY BOARD - AS OF 31 DECEMBER 2017
Chairman: Michael Diekmann
The Personnel Committee held four meetings in 2017. It dealt extensively with the issue of succession to Dr.
Wemmer and Dr. Zedelius. The committee also looked at other mandate matters for active and former mem-
bers of the Board of Management and the target achievement among Board of Management members for
2016. Besides setting the targets for variable remuneration in 2018, the committee also prepared the adequacy
assessment of the remuneration system. As a result, the committee identified the need to adjust the remunera-
tion of the Chairman of the Board of Management. Furthermore, the Personnel Committee also dealt with the
diversity concept for the Board of Management, including the legally required target for the percentage of
women in the Board of Management.
A_To our Investors
A_To our Investors
Annual Report 2017 - Allianz Group
Michael Diekmann
Chairman
cerely yous,
M. Miam
For the Supervisory Board:
Munich, 8 March 2018
As mentioned earlier, the 2017 financial year also saw personnel changes within Allianz SE's Board of Manage-
ment. Dr. Dieter Wemmer and Dr. Werner Zedelius stepped down from the Board of Management with effect
from 31 December 2017. Mr. Niran Peiris and Giulio Terzariol were appointed as successors, effective
1 January 2018.
7
The term of the Supervisory Board expired with the conclusion of the AGM on 3 May 2017. The new employee
representatives had been appointed by the SE Works Council pursuant to the Agreement concerning the Partic-
ipation of Employees in Allianz SE, effective from the conclusion of the Annual General Meeting on 3 May 2017.
The Annual General Meeting 2017 elected the new shareholder representatives. The Supervisory Board man-
dates of Prof. Dr. Renate Köcher, Dante Barban, and Dr. Wulf H. Bernotat ended with the conclusion of the Annu-
al General Meeting on 3 May 2017. Dr. Helmut Perlet resigned from the Supervisory Board with effect from the
end of 6 May 2017. The Supervisory Board thanked all retired members for their many years of support for the
Allianz Group as well as for the valuable and trusting collaboration in this board.
The financial year 2017 was the first year for which the company was required to issue a separate non-financial
report. This report was combined for Allianz SE and the Allianz Group. The Supervisory Board commissioned
PwC to perform a limited assurance engagement of this report. All Supervisory Board members received the
combined separate non-financial report and the independent practitioner's limited assurance report from PwC
in due time. The report and PwC's assurance report were discussed in the plenary session of the Supervisory
Board on 8 March 2018. The auditors from PwC participated in these discussions and presented the results of
their assurance engagement. Based on its own review of the combined separate non-financial report, the Su-
pervisory Board did not raise any objections and approved by acknowledgement the results of the PwC limited
assurance engagement.
NON-FINANCIAL REPORT
LIMITED ASSURANCE ENGAGEMENT OF THE COMBINED SEPARATE
The Supervisory Board would like to thank all Allianz Group employees for their great personal commitment
over the past year.
On the basis of our own reviews of the annual Allianz SE and consolidated financial statements, the manage-
ment and group management reports, and the recommendation for appropriation of earnings, we raised no
objections and agreed with the results of the KPMG audit. We approved the Allianz SE and consolidated finan-
cial statements prepared by the Board of Management. The financial statements are thus adopted. We agree
with the Board of Management's proposal on the appropriation of earnings.
All Supervisory Board members received the documentation relating to the annual financial statements and the
auditor's reports from KPMG on schedule. The preliminary financial statements and KPMG's preliminary audit
results were discussed in the Audit Committee on 14 February 2018 as well as in the plenary session of the
Supervisory Board on 15 February 2018. The final financial statements and KPMG's audit reports (dated 28
February 2018) were reviewed on 8 March 2018, both by the Audit Committee and in the Supervisory Board
plenary session. The auditors participated in these discussions and presented the key results from their audit.
Particular focus was given to the key audit matters described in the auditor's report and the audit procedures
performed. No material weaknesses in the internal financial reporting control process were discovered. There
were no circumstances that might give cause for concern about the auditor's independence. In addition, the
market value balance sheets for Allianz SE and the Allianz Group as of 31 December 2017, as well as the re-
spective KPMG reports were addressed by the Audit Committee and Supervisory Board.
8
MEMBERS OF THE SUPERVISORY BOARD AND BOARD OF MANAGEMENT
utives.
AUDIT OF ANNUAL ACCOUNTS AND CONSOLIDATED FINANCIAL STATEMENTS
The Supervisory Board has formed various committees in order to perform its duties efficiently. The committees
prepare the consulting and adoption of resolutions in the plenary sessions; they can also adopt resolutions
themselves.
ISSUES DISCUSSED IN THE SUPERVISORY BOARD PLENARY SESSIONS
Details on each member's participation at meetings of the Supervisory Board and its committees can be found
in the Corporate Governance Report, starting on > page 12. Members of the Supervisory Board who were
unable to attend meetings of the Supervisory Board or its committees were excused and, as a rule, cast their
votes in writing.
The Board of Management's verbal reports at the meetings were accompanied by written documents, which
were sent to each member of the Supervisory Board in time for the relevant meeting. The Board of Manage-
ment also informed us in writing of important events that occurred between meetings. The chairmen of the
Supervisory and Management Boards also had regular discussions about major developments and decisions.
The Chairman of the Supervisory Board also had individual discussions with each member of the Board of Man-
agement about their respective half-year as well as full-year performance.
Key reporting issues were strategic topics, such as the implementation of the Renewal Agenda and the portfolio
strategy, the risk strategy and capital management, as well as the strategy in the Asset Management business
segment and the global health insurance. In addition, the Supervisory Board was extensively involved in the
Board of Management's planning for both the financial year 2018 and the three-year period from 2018 to 2020.
Cyber risk security was discussed regularly. A Technology Committee was established to carry out in-depth re-
views of IT issues, the digitalization of the business model, and new technologies. In addition, the Supervisory
Board dealt with the implementation of the new recommendations of the German Corporate Governance Code
(Code), the legislation regarding the implementation of the EU guideline on corporate social responsibility
(CSR), as well as the supervisory authority's (BaFin's) new requirements for self-assessments by the Supervisory
Board. In November 2017, a conference call was held regarding the Board of Management's considerations for
a potential further share buy-back program.
In all of the Supervisory Board's 2017 meetings, the Board of Management reported on Group revenues and
results as well as developments in individual business segments. The Board of Management informed us on the
course of business as well as on the development of the Allianz SE and Allianz Group, including deviations in
actual business developments from the planning. The Board of Management reported to the Supervisory Board
on a regular basis and in a timely and comprehensive manner, both verbally and in writing.
In the financial year 2017, the Supervisory Board held seven meetings and a conference call. The regular meet-
ings took place in February, March, May, August, October, and December. In addition, a constituent meeting
took place after the election of the new Supervisory Board by the Annual General Meeting (AGM) 2017.
OVERVIEW
In the meeting of 16 February 2017, the Supervisory Board dealt comprehensively with the preliminary financial
figures for the financial year 2016, the Board of Management's dividend strategy, and the consideration of a
share buy-back program. The appointed audit firm, KPMG AG Wirtschaftsprüfungsgesellschaft (KPMG), Munich,
reported in detail on the preliminary results of their audit. The Chief Compliance Officer then gave his annual
report on the compliance organization and key compliance-related matters. In the further course of the meeting,
the Supervisory Board also examined the portfolio strategy in growth markets, discussed the target achievement
of the individual members of the Board of Management, and finally set their variable remuneration for the
financial year 2016. In the course of the performance assessment, the fitness and propriety of the members of
the Board of Management was also confirmed.
During the financial year 2017, the Supervisory Board fulfilled all its duties and obligations as laid out in the
company statutes and applicable law. It monitored the management of the company, devoted particular
attention to succession matters related to the Board of Management, and advised the Board of Management
regarding the conduct of business.
SUPERVISORY BOARD REPORT
4
A_To our Investors
3
A_To our Investors
The Standing Committee conducted three meetings in 2017. It dealt primarily with issues of corporate govern-
ance, particularly the implementation of the Code's new recommendations, the modification of the Rules of
Information for Reports by the Board of Management to the Supervisory Board, the preparations for the Annual
General Meeting, the employee stock purchase program, and the Supervisory Board's self-assessment as well as
the resulting development plan. In addition, the Standing Committee dealt with the appropriateness of the
remuneration of the Supervisory Board. The committee also passed resolutions to approve loans to senior exec-
ॐ
Ladies and Gentlemen,
In the meeting of 9 March 2017, the Supervisory Board discussed the audited annual Allianz SE and consolidat-
Annual Report 2017 - Allianz Group
Annual Report 2017 - Allianz Group
ed financial statements as well as the recommendation for the appropriation of earnings by the Board of Man-
Further explanations on corporate governance in the Allianz Group can be found in the Corporate Governance
Report starting on > page 12 and the Statement on Corporate Management pursuant to § 315d and § 289f of
the HGB starting on > page 17. The Allianz website also provides more details on corporate governance:
www.allianz.com/corporate-governance.
DECLARATION OF CONFORMITY WITH THE GERMAN CORPORATE GOVERNANCE CODE
On 14 December 2017, the Board of Management and the Supervisory Board issued the Declaration of Con-
formity in accordance with § 161 of the German Stock Corporation Act ("Aktiengesetz"). The Declaration was
posted on the company website, where it is available to shareholders at all times. Allianz SE fully complies and
will continue to fully comply with the recommendations of the German Corporate Governance Code in its version
of 7 February 2017.
planning for financial year 2018 and the three-year plan 2018 to 2020, as well as the new requirements for
non-financial reporting that follow from the implementation of the European CSR Directive. In this regard, we
approved the recommendation of the Audit Committee to engage PwC to perform a limited assurance
engagement of the combined separate non-financial report for the financial year 2017. The Board of Manage-
ment also provided a status report on the issue of cyber risk security and the efficiency of distribution channels.
We then covered the Code's Declaration of Conformity and the annual report on the succession planning for the
Board of Management. The Supervisory Board reviewed the appropriateness of the remuneration of the Board
of Management based on a vertical and horizontal comparison, and decided to increase the remuneration of
the Chairman of the Board of Management in accordance with the identified need for adjustment. Finally, it set
targets for the variable remuneration of the members of the Board of Management for 2018.
A_To our Investors
6
5
A_To our Investors
COMMITTEE ACTIVITIES
At the meeting on 14 December 2017, the Board of Management briefed us on the results of the third quarter,
further business developments and the situation of the Allianz Group, capital adequacy, and the planned tender
offer to the minority shareholders of Euler Hermes S.A. The Supervisory Board additionally dealt with the
The meeting on 13 October 2017 mainly focused on the strategy of the Allianz Group, in particular the respective
external conditions including potentially disruptive developments and the implementation status of the Renewal
Agenda, as well as the strategy of Allianz SE (solo). In addition, the Supervisory Board dealt in detail with the
global health insurance business. The review of the Board of Management's report on the development of busi-
ness also covered the effects of the recent natural catastrophes in the Caribbean and Mexico, the implementa-
tion of the European Data Protection Regulation in the Allianz Group, and the change of the Chairman of the
Board of Management at Allianz Deutschland AG.
At the meeting on 3 August 2017, the Board of Management first reported extensively on the half-yearly results.
It additionally addressed the upcoming investment in the UK property insurance firm Liverpool Victoria, the sale
of the Allianz holding in Oldenburgische Landesbank AG, and the impact of Banco Santander's acquisition of
Banco Popular, a long-standing distribution and joint venture partner in Spain. The Board of Management then
reported on the strategic dialog with the Group companies, particularly regarding the progress of the Renewal
Agenda. In addition, the Board of Management provided a status report on cyber risk security. The Supervisory
Board amended the Rules of Information for Reports by the Board of Management to the Supervisory Board in
order to comply with new regulatory requirements. Finally, the Board of Management reported on the percent-
age of women in management positions. Thereafter, the Supervisory Board set a new target for the percentage
of women in Allianz SE's Board of Management. This target is also a component of the diversity concept for the
Board of Management, which was to be established in accordance with the new CSR regulations. A correspond-
ing diversity concept for the Supervisory Board was included into the objectives for the composition of the Su-
pervisory Board, as well as a profile of skills and expertise for the Supervisory Board which is required under a
new Code recommendation (see > page 15).
Due to the elections to the Supervisory Board at the AGM 2017, a constituent meeting was held on 3 May 2017,
immediately after the AGM. At this constituent meeting Dr. Perlet was initially elected as Chairman of the Super-
visory Board for the brief period until 6 May 2017. Mr. Diekmann was elected to succeed him, effective
7 May 2017. This transitional arrangement was necessary due to the two-year waiting period applicable for Mr.
Diekmann under corporate law. Mr. Snabe and Mr. Zimmermann were elected as Deputy Chairmen. In addition,
the Supervisory Board elected the members of the committees and approved Dr. Eichiner to be the financial
expert as defined in § 100 (5) of the German Stock Corporation Act (AktG). The Supervisory Board also adopted
a resolution to establish an additional Board committee: the Technology Committee. In June 2017, the new
members of the Supervisory Board attended a separate information session in order to familiarize themselves
with the Allianz business model and the structures of the Allianz Group.
On 3 May 2017, just before the AGM, the Board of Management briefed us on the first quarter 2017 perfor-
mance and on the Group's current situation. In addition, the Board dealt with the results of the BaFin's review of
the system of governance at Allianz SE in November 2016.
agement for the financial year 2016. The auditors confirmed that there were no discrepancies to their February
report, and issued an unqualified auditor's report for the individual and consolidated financial statements. In
addition, the Board of Management submitted its report on risk developments in 2016 and the head of internal
audit presented his annual review. Furthermore, the Supervisory Board dealt with the agenda and the proposals
for resolution for the 2017 AGM of Allianz SE. It also resolved to appoint KPMG as auditor for the individual and
consolidated financial statements for the financial year 2017 and for the auditor's review of the 2017 half-yearly
financial report. Given the legally required rotation of the auditors, the Supervisory Board approved the pro-
posal of the Audit Committee to select Price WaterhouseCoopers GmbH Wirtschaftsprüfungsgesellschaft (PwC)
to audit the individual and consolidated financial statements of Allianz SE as from financial year 2018. In addi-
tion, the Supervisory Board was also informed about the implementation status of the Renewal Agenda as well
as the strategy pursued in the Asset Management business segment. The Supervisory Board dealt extensively
with personnel matters related to the Board of Management, specifically regarding Dr. Mascher, Dr. Wemmer,
and Dr. Zedelius, whose appointments expired at the end of 2017. Dr. Mascher's appointment was renewed for
three years. As successors to Dr. Wemmer and Dr. Zedelius, who had both reached retirement age, the Supervi-
sory Board appointed Niran Peiris and Giulio Terzariol to the Board of Management with effect from 1 January
2018.
Annual Report 2017 - Allianz Group
Total
14,329
14,196
Liabilities of disposal groups classified as held for sale
Oldenburgische Landesbank AG, Oldenburg
Other disposal groups
13,657
6
13,282
13,662
Total
13,290
OLDENBURGISCHE LANDESBANK AG, OLDENBURG
As of 31 December 2017, all requirements were still fulfilled to pre-
sent Oldenburgische Landesbank AG, Oldenburg, allocated to the
reportable segment Banking (Corporate and Other) as a disposal
group classified as held for sale.
Reclassified assets and liabilities
239
€ mn
8
79
42
13,957
Subtotal
Other assets
2016
13,915
Assets of disposal groups classified as held for sale
Oldenburgische Landesbank AG, Oldenburg
14,102
Other disposal groups
6
Subtotal
14,108
Non-current assets classified as held for sale
Real estate held for investment
216
160
Real estate held for own use
4
220
613
The reportable segment Asset Management operates as a global
provider of institutional and retail asset management products and
services to third-party investors. It also provides investment manage-
ment services to the Allianz Group's insurance operations. The prod-
ucts for retail and institutional customers include equity and fixed-
income funds as well as alternative products. The United States,
Europe, and the Asia-Pacific region represent the primary asset man-
agement markets.
Financial assets carried at fair value through income
German Speaking Countries and Central & Eastern Europe,
Western & Southern Europe, Middle East, Africa, Asia Pacific
Iberia & Latin America,
USA (Life/Health only),
Global Insurance Lines & Anglo Markets,
Allianz Partners (Property-Casualty only).
Asset management activities represent a separate reportable seg-
ment. Due to differences in the nature of products, risks, and capital
allocation, corporate and other activities are divided into three re-
portable segments: Holding & Treasury, Banking, and Alternative
Investments. In total, the Allianz Group has identified 14 reportable
segments in accordance with IFRS 8.
The types of products and services from which the reportable
segments derive revenues are described below.
PROPERTY-CASUALTY
In the business segment Property-Casualty, reportable segments
offer a wide variety of insurance products to both private and corpo-
Annual Report 2017 - Allianz Group
D_Consolidated Financial Statements
rate customers, including motor liability and own damage, accident,
general liability, fire and property, legal expense, credit, and travel
insurance.
LIFE/HEALTH
In the business segment Life/Health, reportable segments offer a
comprehensive range of life and health insurance products on both
an individual and a group basis, including annuities, endowment and
term insurance, unit-linked and investment-oriented products, as well
as full private health, supplemental health, and long-term care insur-
ance.
ASSET MANAGEMENT
2017
The business activities of the Allianz Group are first organized by
product and type of service: insurance activities, asset management
activities, and corporate and other activities. Due to differences in the
nature of products, risks, and capital allocation, insurance activities
are further divided into the business segments Property-Casualty and
Life/Health. In accordance with the responsibilities of the Board of
Management, each of the insurance business segments is grouped
into the following reportable segments:
IDENTIFICATION OF REPORTABLE SEGMENTS
4 Segment reporting
As of 31 December 2017, cumulative gains of € 48 mn were reported
in other comprehensive income relating to the disposal group classi-
fied as held for sale. The closing of the transaction was nearly com-
pleted as of 31 December 2017. Therefore, an impairment and a
liability of € 233 mn were recognized in connection with the expected
loss from the sale of Oldenburgische Landesbank AG. The Allianz
shares in Oldenburgische Landesbank AG were transferred to the
buyer on 7 February 2018.
15
Investments
2,367
Loans and advances to banks and customers
Deferred tax assets
10,944
71
93
Cash and cash equivalents
14,102
12,697
645
135
169
Total assets
Financial liabilities carried at fair value through income
Liabilities to banks and customers
Other liabilities
Certificated liabilities
Subordinated liabilities
Total liabilities
13,657
10
As of 31 December
contracts
CLASSIFICATION AS HELD FOR SALE
94
24
Annual Report 2017 - Allianz Group
D_Consolidated Financial Statements
with IFRS 17 have to be considered to come to a final conclusion on
the combined impact of both standards.
The Allianz Group is currently assessing the impact of the appli-
cation of both IFRS 17 and IFRS 9. As of the date of the publication of
these consolidated financial statements it is not practicable to quanti-
fy the effect on the Allianz Group consolidated financial statements.
IFRS 15, Revenue from Contracts with Customers
In May 2014, the IASB issued IFRS 15, Revenue from Contracts with
Customers. IFRS 15 supersedes IAS 18, IAS 11, and a number of reve-
nue-related interpretations. With the introduction of IFRS 15, the IASB
pursued the objective of developing a single revenue standard con-
taining comprehensive principles for recognizing revenue. The effec-
tive date is 1 January 2018.
The Allianz Group revenues in scope of IFRS 15 are fee and
commission income primarily consisting of asset management and
performance fees. The management fees are currently recognized
when the services are provided. Performance fees are recognized as
fee income after the respective benchmark period is completed.
Under IFRS 15, revenue will be recognized when (or as) the
Allianz Group satisfies a performance obligation by transferring a
service to a customer. Furthermore, revenue will be recognized for
these contracts to the extent that it is probable that a significant
reversal in the amount of cumulative revenue will not occur. The
guidance also changes the accounting for certain contract costs and
revises the criteria for determining if an entity is acting as a principal
or agent in certain arrangements.
Based on Allianz Group's assessment, the presentation and tim-
ing of revenue recognition are broadly similar. Therefore, the
Allianz Group concluded that the application of IFRS 15 does not
result in a significant impact. The impacts Allianz Group identified
primarily relate to principal versus agent considerations and the
accounting treatment for certain asset management related upfront
distribution costs which under IFRS 15 no longer can be capitalized.
The Group adopted IFRS 15 using the cumulative effect method
on the required effective date (i.e. 1 January 2018). As a result, the
Allianz Group will not apply the requirements of IFRS 15 to the com-
parative period presented. The impact on retained earnings as of
1 January 2018 is not significant.
IFRS 16, Leases
In January 2016, the IASB issued IFRS 16, Leases, which supersedes
IAS 17. IFRS 16 introduces a single, on-balance sheet lease account-
ing model for lessees. A lessee recognizes a right-of-use asset repre-
senting its right to use the underlying asset and a lease liability repre-
senting its obligation to make lease payments. There are recognition
exemptions for short-term leases and leases of low-value items.
Lessor accounting remains similar to the current standard - i.e. lessors
continue to classify leases as finance or operating leases.
The Allianz Group has completed an initial assessment of the po-
tential impact on its consolidated financial statements but has not yet
completed its detailed assessment. The actual impact of applying
IFRS 16 on the financial statements in the period of initial application
will depend on future economic conditions, including the borrowing
rate at 1 January 2019, the composition of the lease portfolio at that
date, the latest assessment of whether the Allianz Group will exercise
any lease renewal options, and the extent to which the Allianz Group
chooses to use practical expedients and recognition exemptions.
It can be assumed that the main impact from IFRS 9 will arise
from the new classification rules leading to more financial instru-
ments being measured at fair value through profit and loss as well as
from the new impairment model. In this context, interdependencies
IFRS 9, issued by the IASB in July 2014, will fully replace IAS 39
and provides a new approach on how to classify financial instruments
based on their cash flow characteristics and the business model
under which they are managed. Furthermore, the standard introduc-
es a new forward looking impairment model for debt instruments
and provides new rules for hedge accounting.
Due to the strong interaction between underlying assets held
and the measurement of direct participating insurance contracts, the
Allianz Group decided to use the option to defer the full implementa-
tion of IFRS 9 until IFRS 17 becomes effective on 1 January 2021. The
amendment to IFRS 4, which allows this deferral, has been endorsed
by the EU in November 2017.
For long-duration life insurance contracts, IFRS 17 is expected to
have a significant impact on actuarial modeling as more granular
cash flow projections and regular updates of all assumptions will be
required, either resulting in profit or loss or impacting the "contractual
service margin", a separate component of the insurance liability
representing unearned profits from in-force contracts. Further, IFRS 17
introduces different measurement approaches for the insurance
contract liabilities, reflecting a different extent of policyholder partic-
ipation in investment or insurance entity performance.
CORPORATE AND OTHER
Total equity
Total liabilities and equity
883,809
883,809
In the consolidated income statement for the year ended
31 December 2016, the GMIB-related change in accounting policies
led to a € 149 mn increase in income from financial assets and liabili-
ties carried at fair value through income (net) and a € 28 mn de-
crease in changes in reserves for insurance and investment contracts
(net). Together with the increase of income taxes of € 42 mn, the net
income increased by € 79 mn. This led to a 17 cent increase in earn-
ings per share.
So far, the most significant impact identified is that the
Allianz Group will recognize new assets and liabilities for its operating
leases. As at 31 December 2017, the Allianz Group future minimum
lease payments under non-cancellable operating leases amounted
to € 3.0 bn on an undiscounted basis (see note 37). In addition,
IFRS 16 replaces the straight-line operating lease expenses with a
depreciation charge for right-of-use assets and interest expenses on
lease liabilities.
NEW ACCOUNTING PRONOUNCEMENTS
PRONOUNCEMENTS
The following amendments and revisions to existing standards be-
came effective for the Allianz Group's consolidated financial state-
ments as of 1 January 2017:
IAS 7, Disclosure Initiative,
IAS 12, Recognition of Deferred Tax Assets for Unrealised Losses,
Annual Improvements to IFRSS 2014-2016 Cycle (Amendments to
IFRS 12).
No material impact arose on the financial results or the financial
position of the Allianz Group.
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
IFRS 17, Insurance Contracts and IFRS 9, Financial Instruments
IFRS 17, Insurance Contracts, was issued by the IASB in May 2017,
with the effective date of 1 January 2021 (retrospective application).
IFRS 17 provides comprehensive guidance on accounting for insur-
ance contracts and investment contracts with discretionary participa-
tion features. For non-life insurance contracts, IFRS 17 introduces
mandatory discounting of loss reserves as well as a risk adjustment
for non-financial risk. Further, IFRS 17 will change the presentation of
insurance contract revenue, a gross written premium will no longer be
presented in the statement of comprehensive income.
RECENTLY ADOPTED ACCOUNTING
Non-current assets and disposal groups classified as held for sale
€ mn
The Allianz Group currently plans to apply IFRS 16 initially on
1 January 2019, using the modified retrospective approach.
In addition to the above-mentioned accounting pronouncements
recently issued, the following amendments and revisions to standards
and interpretations have been issued by the IASB but are not yet
effective for or adopted early by the Allianz Group.
The amendments and interpretations are not expected to have a
material impact on the financial position and financial results of the
Allianz Group. Early adoption is generally allowed but not intended
by the Allianz Group.
Annual Report 2017 - Allianz Group
95
90
96
D_Consolidated Financial Statements
3 Consolidation and
classification as held for sale
SIGNIFICANT ACQUISITIONS
In 2017 and 2016, no significant acquisitions occurred.
SIGNIFICANT CHANGES IN NON-CONTROLLING
INTERESTS
In November and December 2017, the Allianz Group acquired ap-
proximately 15% of Euler Hermes Group SA share capital for
€ 779 mn in cash, equivalent to € 122 per share. As a result, the
Allianz Group increased its ownership to approximately 78% (exclud-
ing treasury shares held by Euler Hermes representing 1.45% of its
share capital) of Euler Hermes Group SA share capital as of
31 December 2017.
In January 2018, Allianz launched a simplified cash tender offer
to acquire the remaining 8,769,824 outstanding Euler Hermes shares
not already owned by Allianz at the price of € 122 per share. The
tender offer was open from 15 January until 13 February 2018. Dur-
ing this period, the Allianz Group extended its ownership to 92.43%
(excluding the treasury shares).
Since then, the Allianz Group has acquired additional Euler Her-
mes shares on the market at a price of € 122 per share, increasing its
ownership to 93.86% (excluding the treasury shares) of Euler Hermes
Group SA share capital.
During 2016, no significant changes in non-controlling interests
occurred.
Annual periods beginning on or after
1 January 2019
Annual periods beginning on or after
1 January 2019
Annual periods beginning on or after
1 January 2018
Annual periods beginning on or after
1 January 2018
Further amendments and interpretations
Standard/Interpretation
IFRS 2, Classification and Measurement of Share-
based Payment Transactions
IFRS 9, Prepayment Features with Negative
Compensation
IFRS 10 and IAS 28, Sale or Contribution of Assets
between an Investor and its Associate or Joint
Venture
IFRS 15, Clarification to IFRS 15
IAS 28, Long-term Interests in Associates and Joint
Ventures
Further amendments and interpretations
IAS 40, Transfers of Investment Property
IFRIC 23, Uncertainty over Income Tax Treatments
Annual Improvements to IFRSS 2015 - 2017 Cycle
(Amendments to IFRS 3 and 11 and IAS 12 and 23)
Effective date
Annual periods beginning on or after
1 January 2018
Annual periods beginning on or after
1 January 2021
Annual periods beginning on or after
1 January 2018
Annual periods beginning on or after
1 January 2019
IFRIC 22, Foreign Currency Transactions and
Advance Consideration
The reportable segment Holding & Treasury includes the manage-
ment and support of the Allianz Group's businesses through its strat-
egy, risk, corporate finance, treasury, financial reporting, controlling,
communication, legal, human resources, technology, and other func-
tions. The reportable segment Banking consists of the banking activi-
ties in Germany, France, Italy, the Netherlands (until July 2017), and
Bulgaria. The banks offer a wide range of products for corporate and
retail clients, with a primary focus on the latter. The reportable seg-
ment Alternative Investments provides global alternative investment
management services in the private equity, real estate, renewable
energy, and infrastructure sectors, mainly on behalf of the
Allianz Group's insurance operations.
97
Prices for transactions between reportable segments are set on an
arm's length basis in a manner similar to transactions with third par-
ties. Transactions between reportable segments are eliminated in the
consolidation. Financial information is recorded based on reportable
segments; cross-segmental country-specific information is not deter-
mined.
133
129
11,021
10,928
Liabilities to banks and customers
1,237
864
5,655
5,551
Unearned premiums
17,065
17,276
4,402
4,108
Reserves for loss and loss adjustment expenses
Financial liabilities carried at fair value through income
62,093
LIABILITIES AND EQUITY
2017
Intangible assets
2,985
2,870
2,934
3,078
Total assets
159,036
159,237
699,318
682,564
As of 31 December
Property-Casualty
Life/Health
2017
2016
2016
61,617
11,256
10,790
3
Certificated liabilities
11
Subordinated liabilities
Total liabilities
11
65
116,794
116,668
669,168
11
11
95
651,869
Annual Report 2017 - Allianz Group
6
Liabilities of disposal groups classified as held for sale
14,622
14,600
Reserves for insurance and investment contracts
14,928
14,837
499,060
490,739
Financial liabilities for unit-linked contracts
119,141
146
111,325
2,445
2,674
3,956
3,697
Other liabilities
18,876
19,261
Deferred tax liabilities
204
Non-controlling interests
23
BUSINESS SEGMENT INFORMATION - CONSOLIDATED BALANCE SHEETS
Business segment information - consolidated balance sheets
€ mn
As of 31 December
ASSETS
Cash and cash equivalents
Financial assets carried at fair value through income
Investments
Loans and advances to banks and customers
Financial assets for unit-linked contracts
Reinsurance assets
Property-Casualty
Life/Health
2017
2016
D_Consolidated Financial Statements
88
98
97
REPORTABLE SEGMENTS MEASURE OF PROFIT OR
LOSS
The Allianz Group uses operating profit to evaluate the performance
of its reportable segments as well as of the Allianz Group as a whole.
Operating profit highlights the portion of income before income
taxes that is attributable to the ongoing core operations of the
Allianz Group. The Allianz Group considers the presentation of oper-
ating profit to be useful and meaningful to investors because it en-
hances the understanding of the Allianz Group's underlying operating
performance and the comparability of its operating performance
over time.
To better understand the ongoing operations of the business, the
Allianz Group generally excludes the following non-operating effects:
income from financial assets and liabilities carried at fair value
through income (net),
realized gains/losses (net) and impairments of investments (net),
interest expenses from external debt,
acquisition-related expenses (from business combinations),
amortization of intangible assets,
2017
restructuring charges, and
The following exceptions apply to this general rule:
In all reportable segments, income from financial assets and
liabilities carried at fair value through income (net) is treated as
operating profit if the income relates to operating business.
For life/health insurance business and property-casualty insur-
ance products with premium refunds, all items listed above are
included in operating profit if the profit sources are shared with
policyholders. There is one exception from this general rule with
regard to policyholder participation in extraordinary tax benefits
and expenses. As IFRS require that the consolidated income
statements present all tax effects in the line item income taxes,
even when they belong to policyholders, the corresponding ex-
penses for premium refunds are shown as non-operating as well.
Operating profit should be viewed as complementary to, and not as
a substitute for, income before income taxes or net income as deter-
mined in accordance with IFRS.
RECENT ORGANIZATIONAL CHANGES
Effective 1 January 2017, the Allianz Group reorganized the structure
of its insurance activities to reflect the changes in the responsibilities
of the Board of Management. The former reportable segment Asia
Pacific has been allocated to the reportable segment Western &
Southern Europe, Middle East, Africa, Asia Pacific. Previously reported
information has been adjusted to reflect this change in the composi-
tion of the Allianz Group's reportable segments.
Additionally, some minor reallocations between the reportable
segments have been made.
Annual Report 2017 - Allianz Group
profit (loss) of substantial subsidiaries classified as held for sale.
GENERAL SEGMENT REPORTING INFORMATION
2016
3,429
Deferred acquisition costs
4,715
18,469
20,105
Deferred tax assets
891
1,175
685
537
Other assets
22,787
22,392
19,416
19,143
Non-current assets and assets of disposal groups classified as held for sale
5,625
5,034
10,016
11,437
9,025
7,014
604
539
7,442
7,427
101,668
3,317
102,430
415,023
10,610
11,508
92,674
93,142
119,141
111,325
424,294
Shareholders' equity
4,782
(258)
Reserves are established for the payment of losses and loss adjust-
ment expenses (LAE) on claims which have occurred but are not yet
settled. Reserves for loss and loss adjustment expenses fall into two
categories: case reserves for reported claims and reserves for in-
curred but not reported losses (IBNR).
RESERVES FOR LOSS AND LOSS ADJUSTMENT
EXPENSES
D_Consolidated Financial Statements
Annual Report 2017 - Allianz Group
90
90
Amounts charged as consideration for origination of certain
long-duration insurance contracts (i.e. initiation or front-end fees) are
reported as unearned revenues and, as such, included in unearned
premiums. These fees are recognized using the same amortization
methodology as DAC, including shadow accounting.
For short-duration insurance contracts, such as most of the property
and casualty contracts, premiums to be earned in future years are
recorded as unearned premiums. These premiums are earned in
subsequent periods in relation to the insurance coverage provided.
UNEARNED PREMIUMS
For long-duration contracts, a premium deficiency is recognized,
if actual experience regarding investment yields, mortality, morbidity,
terminations, or expense indicates that existing contract liabilities,
along with the present value of future gross premiums, will not be
sufficient to cover the present value of future benefits and to recover
DAC.
Case reserves for reported claims are based on estimates of fu-
ture payments that will be made with respect to claims, including LAE
relating to such claims. The estimates reflect the informed judgment
of claims personnel based on general insurance reserving practices
and knowledge of the nature and value of a specific type of claim.
These case reserves are regularly re-evaluated in the ordinary course
of the settlement process and adjustments are made as new infor-
mation becomes available.
Liability adequacy tests are performed for each insurance portfolio,
based on estimates of future claims, costs, premiums earned, and
proportionate investment income. For short-duration contracts, a
premium deficiency is recognized if the sum of expected claim costs
and claim adjustment expenses, expected dividends to policyholders,
DAC, and maintenance expenses exceeds related unearned premi-
ums while considering anticipated investment income.
The Allianz Group's consolidated financial statements reflect the
effects of ceded and assumed reinsurance contracts. Assumed rein-
surance premiums, commissions, and claim settlements, as well as the
reinsurance element of technical provisions, are accounted for in
accordance with the conditions of the reinsurance contracts, and in
consideration of the original contracts for which the reinsurance was
concluded. When the reinsurance contracts do not transfer significant
insurance risk, deposit accounting is applied as required under the
related reinsurance accounting provisions of US GAAP or under
IAS 39.
Reinsurance contracts
Insurance contracts and investment contracts with discretionary
participating features are accounted for under the insurance ac-
counting provisions of US GAAP, as have been applied at first-time
adoption of IFRS 4 on 1 January 2005, wherever IFRS 4 does not
provide specific guidance. Investment contracts without discretionary
participation features are accounted for as financial instruments in
accordance with IAS 39.
Insurance and investment contracts
INSURANCE, INVESTMENT AND REINSURANCE
CONTRACTS
techniques and assumptions. These assumptions include, for exam-
ple, the selection of input parameters for the projection of future
earnings. Further explanations on the impairment test for goodwill
and its significant assumptions as well as respective sensitivity anal-
yses are given in note 11.
The recoverable amounts of all cash generating units (CGUS) to
test goodwill and other indefinite life intangible assets for impair-
ment are typically determined on the basis of value in use calcula-
tions. The determination of a CGU's recoverable amount requires
significant judgment regarding the selection of appropriate valuation
For business combinations goodwill is recognized in the amount of
the consideration transferred in excess of the fair values assigned to
the identifiable assets acquired and liabilities assumed. Goodwill is
accounted for at the acquiree in the acquiree's functional currency.
There is an at least annual evaluation whether it is deemed recover-
able.
Amortization method
straight-line considering
contractual terms
in proportion to the
consumption of future
economic benefit
straight-line or in relation
to customer churn rates
6-13
Liability adequacy tests
13-42
IBNR reserves are established to recognize the estimated cost of
losses that have occurred but where the Allianz Group has not yet
been notified. IBNR reserves, similar to case reserves for reported
claims, are established to recognize the estimated costs, including
expenses, necessary to bring claims to final settlement. The
Allianz Group relies on its past experience, adjusted for current trends
and any other relevant factors to estimate IBNR reserves.
Reserves for loss and loss adjustment expenses are not dis-
counted, except when payment amounts are fixed and timing is
reasonably determinable.
Reserves for premium refunds
Non-unit-linked investment contracts without discretionary par-
ticipating features are accounted for under IAS 39. The aggregate
policy reserves for those contracts are initially recognized at fair
value, or the amount of the deposit by the contract holder, net of the
transaction costs that are directly attributable to the issuance of the
contract. Subsequently, those contracts are measured at amortized
cost using the effective interest rate method.
The Allianz Group has recognized all rights and obligations related to
issued insurance contracts according to its accounting policies, and
thus has not separately recognized an unbundled deposit compo-
nent in respect of any of its insurance contracts.
0.8-4.3
2.2-5.0
Participating life
insurance contracts
contracts
2.5-6.0
2.5-6.0
Traditional long-
duration insurance
Deferred acquisition costs
Aggregate policy reserves
%
IBNR reserves are estimates based on actuarial and statistical
projections of the expected cost of the ultimate settlement and ad-
ministration of claims. The analyses are based on facts and circum-
stances known at the time, predictions of future events, estimates of
future inflation and other societal and economic factors. Trends in
claim frequency, severity, and time lag in reporting are examples of
factors used in projecting the IBNR reserves. IBNR reserves are re-
viewed and revised periodically, as additional information becomes
available and actual claims are reported.
Interest rate assumptions
The assumptions used for aggregate policy reserves are deter-
mined using current and historical client data, industry data, and in
the case of assumptions for interest reflect expected earnings on
assets which back the future policyholder benefits. The information
used by the Allianz Group's actuaries in setting such assumptions
includes, but is not limited to, pricing assumptions, available experi-
ence studies, and profitability analyses.
Insurance contract features not closely related to the underlying
insurance contracts are bifurcated from the insurance contracts and
accounted for as derivatives in line with IFRS 4 and IAS 39.
reserve also includes reserves for investment contracts with discre-
tionary participation features as well as for liabilities for guaranteed
minimum mortality and morbidity benefits related to non-traditional
contracts with annuitization options and unit-linked insurance con-
tracts.
The aggregate policy reserves for universal life-type insurance
contracts are equal to the account balance, which represents premi-
ums received and investment return credited to the policy, less deduc-
tions for mortality costs and expense charges. The aggregate policy
For traditional long-duration insurance contracts, such as tradi-
tional life and health products, aggregate policy reserves are com-
puted using the net level premium method, based on best-estimate
assumptions adjusted for a provision for adverse deviation for mortal-
ity, morbidity, expected investment yields, surrenders, and expenses
at the policy inception date, which remain locked in thereafter unless
a premium deficiency occurs.
The aggregate policy reserves for participating life insurance con-
tracts are calculated using the net level premium method based on
assumptions for mortality, morbidity and interest rates that are guar-
anteed in the contract or used in determining the policyholder divi-
dends (or premium refunds).
Aggregate policy reserves
reserves.
Reserves for insurance and investment contracts include aggregate
policy reserves, reserves for premium refunds and other insurance
RESERVES FOR INSURANCE AND INVESTMENT
CONTRACTS
The interest rate assumptions used in the calculation of deferred
acquisition costs and aggregate policy reserves are as follows:
Reserves for premium refunds include the amounts allocated under
the relevant local statutory/contractual regulations or, at the entity's
discretion, to the accounts of the policyholders and the amounts
resulting from the differences between these IFRS-based financial
statements and the local financial statements (latent reserves for
premium refunds), which will reverse and enter into future profit
participation calculations. Unrealized gains and losses recognized for
available-for-sale investments are recognized in the latent reserves
for premium refunds to the extent that policyholders will participate
in such gains and losses on the basis of statutory or contractual regu-
lations when they are realized, based on and similar to shadow ac-
counting. The profit participation allocated to participating policy-
holders or disbursed to them reduces the reserves for premium
refunds.
10-25
Customer relationship
Deferred acquisition costs (DAC)
DEFERRED ACQUISITION COSTS
Assets and liabilities related to reinsurance are reported on a gross
basis. Reinsurance assets include balances expected to be recovered
from reinsurance companies. The amount of reserves ceded to re-
insurers is estimated in a manner consistent with the claim liability
associated with the reinsured risks. To the extent that the assuming
reinsurers are unable to meet their obligations, the respective ceding
insurers of the Allianz Group remain liable to its policyholders for the
portion reinsured. Consequently, allowances are made for receivables
on reinsurance contracts which are deemed uncollectible.
REINSURANCE ASSETS
Financial assets for unit-linked contracts are recorded at fair value,
with changes in fair value recognized in the income statement to-
gether with the offsetting changes in fair value of the corresponding
financial liabilities for unit-linked contracts.
FINANCIAL ASSETS AND LIABILITIES FOR UNIT-
LINKED CONTRACTS
These assets are initially measured at fair value plus any directly
attributable transaction costs. Subsequent to initial recognition, they
are measured at amortized cost using the effective interest rate
method.
LOANS AND ADVANCES TO BANKS AND CUSTOMERS
Loans and advances are non-derivative financial assets with fixed or
determinable payments that are not quoted in an active market and
which are not classified as financial assets held for trading, designat-
ed at fair value through income, or designated as available for sale.
These assets are accounted for as property, plant and equipment in
line with IAS 16. Hence, they are carried at cost less accumulated
depreciation and impairments.
Fixed assets of renewable energy investments
Costs that vary with and are directly related to the acquisition and
renewal of insurance contracts and investment contracts with discre-
tionary participation features are deferred by recognizing a DAC
asset. At inception, DAC is tested to ensure that it is recoverable over
the life of the contracts. Subsequently, loss recognition tests at the
end of each reporting period ensure that the DAC is covered by future
profits.
Real estate held for investment is carried at cost less accumulated
depreciation and impairments. Real estate held for investment is
depreciated on a straight-line basis over its useful life, with a maxi-
mum of 50 years, and regularly tested for impairment.
For details on the accounting for investments in associates and joint
ventures please see the section principles of consolidation.
Investments in associates and joint ventures
Funds held by others under reinsurance contracts assumed
Funds held by others under reinsurance contracts assumed relate to
cash deposits to which the Allianz Group is entitled, but which the
ceding insurer retains as collateral for future obligations of the
Allianz Group. The cash deposits are recorded at the amount due on
repayment, less any impairment for balances that are deemed not to
be recoverable.
Held-to-maturity investments are debt securities with fixed or deter-
minable payments and fixed maturities, for which the Allianz Group
has the positive intent and ability to hold to maturity. These assets are
initially measured at fair value plus any directly attributable transac-
tion costs. Subsequent to initial recognition, they are measured at
amortized cost using the effective interest rate method.
Held-to-maturity investments
Available-for-sale investments comprise debt and equity instruments
that are designated as available for sale or do not fall into the other
measurement categories. These investments are measured at fair
value through other comprehensive income. When an investment is
derecognized or determined to be impaired, the cumulative gain or
loss previously recorded in other comprehensive income is transferred
and recognized in the consolidated income statement. Realized
gains and losses on those instruments are generally determined by
applying the average cost method at the subsidiary level.
Available-for-sale investments
INVESTMENTS
Financial assets and liabilities carried at fair value through income
include financial assets and liabilities held for trading as well as
financial assets and liabilities designated at fair value through in-
come. While the former category includes trading instruments and
financial derivatives, the latter category is mainly designated at fair
value to avoid accounting mismatches.
FINANCIAL ASSETS AND LIABILITIES CARRIED AT FAIR
VALUE THROUGH INCOME
Real estate held for investment
Useful lives
For short-duration, traditional long-duration, and limited-
payment insurance contracts, DAC is amortized in proportion to
premium revenue recognized. For universal life-type and participat-
ing life insurance contracts as well as investment contracts with dis-
cretionary participation features, DAC is generally amortized over the
life of a book of contracts based on estimated gross profits (EGP) or
estimated gross margins (EGM), respectively.
Present value of future profits (PVFP)
Acquired business portfolios
Long-term distribution agreements
Estimated useful lives (in years) and amortization methods
The table below summarizes estimated useful lives and the
amortization methods for each class of intangible assets with finite
useful lives.
Intangible assets with finite useful lives are measured at cost less
accumulated amortization and impairments. Intangible assets with
indefinite useful lives are tested annually for impairment and when-
ever there is a triggering event. They are also reviewed annually to
determine whether the indefinite-life classification is still appropriate.
Years
max. 50
2-13
2-10
INTANGIBLE ASSETS AND GOODWILL
Equipment
Software
Real estate held for own use
Acquisition costs for unit-linked investment contracts are de-
ferred in accordance with IAS 18 if the costs are incremental. For non-
unit-linked investment contracts accounted for under IAS 39 at amor-
tized cost, acquisition costs that meet the definition of transaction
costs under IAS 39 are considered in the aggregate policy reserves.
Estimated useful lives (in years)
Other assets primarily consist of receivables, accrued dividends,
interest and rent as well as own-used property and equipment. De-
preciation is generally computed using the straight-line method over
the estimated useful lives of the assets.
OTHER ASSETS
For insurance contracts and investment contracts with discretionary
participation features, shadow accounting is applied to DAC, PVFP
and deferred sales inducements in order to include the effect of
unrealized gains or losses in the measurement of these assets in the
same way as it is done for realized gains or losses. When the gains or
losses are realized they are recognized in the income statement
through recycling and prior adjustments due to shadow accounting
are reversed.
Shadow accounting
D_Consolidated Financial Statements
89
Annual Report 2017 - Allianz Group
Sales inducements on non-traditional insurance contracts are de-
ferred and amortized using the same methodology and assumptions
as for deferred acquisition costs.
Deferred sales inducements
The value of an insurance business or an insurance portfolio acquired
is measured by the PVFP, which is the present value of net cash flows
anticipated in the future from insurance contracts in force at the date
of acquisition. It is amortized over the life of the relevant contracts.
The table below summarizes estimated useful lives for real es-
tate held for own use, equipment and software.
D_Consolidated Financial Statements
RESERVING PROCESS
Annual Report 2017 - Allianz Group
329
782,843
Total liabilities
(177)
4,003
Deferred tax liabilities
(163)
486,222
contracts
Reserves for insurance and investment
486,059
3,826
783,172
9,207
Financial liabilities carried at fair value
As reported
Change in
accounting
policies GMIBS
reported
As of 1 January 2016
As previously
9,875
668
€ mn
Changes to the consolidated balance sheet resulting from the change
in accounting policies for GMIBS as of 1 January 2016
through income
At the beginning of 2017, the Allianz Group entered into an economic
hedging program for its Guaranteed Minimum Income Benefits
(GMIBS), which were sold as part of its variable annuity portfolio. In
order to mitigate accounting mismatches between the hedging de-
rivatives and the GMIBs, the Allianz Group has started measuring the
GMIBs at fair value through profit or loss as of 1 January 2017. This
change in measurement is permitted by IFRS 4 and represents an
accounting policy change. Accounting policy changes have to be
applied retrospectively. The total effect of the new measurement on
prior period numbers is as follows:
63,144
2,955
Reserves for insurance and investment
10,737
through income
Financial liabilities carried at fair value
As reported
Change in
accounting
policies GMIBS
reported
As previously
11,271
534
(329)
As of 31 December 2016
Changes to the consolidated balance sheet resulting from the change
in accounting policies for GMIBS as of 31 December 2016
67,083
3,052
70,135
Total liabilities and equity
Total equity
Non-controlling interests
Shareholders' equity
848,942
62,815
2,955
65,771
(329)
66,099
€ mn
For Life/Health and Property-Casualty, the central oversight process
around reserve estimates includes the setting of group-wide stand-
CHANGE IN ACCOUNTING POLICIES
Changes in deferred tax assets and liabilities are generally re-
cognized through profit and loss in the consolidated income state-
ment, except for changes recognized directly in equity.
EQUITY
Certificated liabilities and subordinated liabilities are subsequently
measured at amortized cost, using the effective interest method to
amortize the premium or discount to the redemption value over the
life of the liability.
CERTIFICATED LIABILITIES AND SUBORDINATED
LIABILITIES
The Allianz Group records financial liabilities where non-controlling
investors have the right to put their equity instruments back to the
Allianz Group, which is primarily the case for mutual funds controlled
but not wholly owned by the Allianz Group. These liabilities are gen-
erally required to be recorded at the redemption amount, with
changes recognized in equity for put options over non-controlling
interests and in the income statement for redeemable fund units.
Financial liabilities for puttable equity instruments
The share-based compensation plans of the Allianz Group are classi-
fied as either equity-settled or cash-settled plans. Equity-settled plans
are measured at fair value on the grant date (grant-date fair value)
and the grant-date fair value is recognized as an expense over the
vesting period. Where equity-settled plans involve equity instruments
of Allianz SE, a corresponding increase in shareholders' equity is
recognized. Where equity-settled plans involve equity instruments of
subsidiaries of the Allianz Group, the corresponding increase is rec-
ognized in non-controlling interests. Equity-settled plans include a
best estimate of the number of equity instruments that are expected
to vest in determining the amount of expense to be recognized. For
cash-settled plans, the Allianz Group accrues the fair value of the
award as compensation expenses over the vesting period. Upon
vesting, any change in the fair value of any unexercised awards is
also recognized as a compensation expense. Where expected tax
deductions differ, in terms of amount and timing, from the cumulative
share-based payment expense recognized in profit or loss, deferred
taxes are recognized on temporary differences.
Share-based compensation plans
Further explanations and sensitivity calculations are given in
note 38.
Pensions and similar obligations are measured at present value and
presented net of plan assets by applying the provisions of IAS 19.
These valuations rely on extensive assumptions. Key assumptions
such as discount rates, inflation rates, compensation increases, pen-
sion increases, and rates of medical cost trends are defined centrally
at the Allianz Group level, considering the circumstances in the par-
ticular countries. In order to ensure their thorough and consistent
determination, all input parameters are discussed and defined taking
into consideration economic developments, peer reviews, and cur-
rently available market and industry data.
Pensions and similar obligations
Issued capital represents the mathematical per-share value received
at the issuance of shares. Additional paid-in capital represents the
OTHER LIABILITIES
Stage two: The Allianz Group Actuarial Department forms an
opinion on the adequacy of the reserves proposed by the local enti-
ties. The Allianz Group Actuarial Department challenges the operat-
ing entities' selection through their continuous interaction with local
teams and quarterly attendance in the local reserve committees. The
ability to form a view on reserve adequacy is further enabled by
regular reviews of the local reserving practices. Such reviews consist
of an evaluation of the reserving process as well as of the appropri-
ateness and consistency of assumptions, and an analysis of move-
ment of reserves. Significant findings from these reviews are commu-
Stage one: Property-Casualty reserves are calculated by local
reserving actuaries at the Allianz operating entities. Reserves are set
based on a thorough analysis of historical data, enhanced by in-
ter-actions with other business functions (e.g. Underwriting, Claims
and Reinsurance). Actuarial judgment is applied where necessary,
especially in cases where data is unreliable, scanty or unavailable.
The judgment of Property-Casualty actuaries is based on past expe-
rience of the characteristics of each line of business, the current stage
of the underwriting cycle, and the external environment in which the
subsidiary operates. The reserves are proposed to a local reserve
committee, whereat the rationale of the selections are discussed and
subsequently documented. A final decision on the reserve selection is
made in the reserve committee. Local actuaries are responsible for
their compliance with the Group Actuarial Standards and Guidelines.
Property-Casualty reserves are set by leveraging the use of ac-
tuarial techniques and educated judgment. A two-stage process
exists for the setting of reserves in the Allianz Group:
Stage two: The Allianz Group Actuarial Department regularly
reviews the local reserving processes, including the appropriateness
and consistency of assumptions, and analyzes the movements of
reserves. Any adjustments to reserves and other insurance-related
reporting items are reported to and analyzed together with the
Allianz Group Reserve Committee.
Stage one: Life/Health reserves are calculated by qualified local
staff experienced in the subsidiaries' business. Actuaries in the local
entities also conduct tests of the adequacy of the premiums and
reserves to cover future claims and expenses (liability adequacy
tests). The process follows group-wide standards for applying con-
sistent and plausible assumptions. The appropriateness of the re-
serves and their compliance with group-wide standards is confirmed
by the local actuary.
Life/Health reserves are subject to estimates and assumptions,
especially on the life expectancy and health of an insured individual
(mortality, longevity, and morbidity risk) and on the development of
interest rates and investment returns (asset-liability mismatch risk).
These assumptions also have an impact on the presentation of costs
arising from the origination of insurance business (acquisition costs
and sales inducements) and the value of acquired insurance business
(PVFP). To ensure consistency in the application of actuarial methods
and assumptions in the Life/Health reserving process, the
Allianz Group has designed a two-stage reserving process:
The oversight and monitoring of the Allianz Group's reserves
culminate in quarterly meetings of the Allianz Group Reserve Com-
mittee, which is the supervising body that governs all significant
reserves. It particularly monitors key developments across the
Allianz Group affecting the adequacy of reserves.
ards and guidelines, regular site visits, as well as regular quantitative
and qualitative reserve monitoring.
D_Consolidated Financial Statements
91
nicated in the Allianz Group Reserve Committee to initiate actions
where necessary.
Further explanations are given in note 32.
92
D_Consolidated Financial Statements
D_Consolidated Financial Statements
93
Annual Report 2017 - Allianz Group
The analysis and forecasting required in this process are per-
formed for individual jurisdictions by qualified local tax and financial
professionals. Given the potential significance surrounding the under-
lying estimates and assumptions, group-wide policies and procedures
have been designed to ensure consistency and reliability around the
recoverability assessment process. Forecast operating results are
based upon approved business plans, which are themselves subject
to a well-defined process of control. As a matter of policy, especially
strong evidence supporting the recognition of deferred tax assets is
required if an entity has suffered a loss in either the current or the
preceding period. Recognition and recoverability of all significant
deferred tax assets are reviewed by tax professionals at Group level
and by the Allianz Group Tax Committee.
Deferred tax assets or liabilities are calculated for temporary dif-
ferences between the tax bases and the financial statement carrying
amounts, including differences from consolidation, unused tax loss
carry-forwards, and unused tax credits. Measurement is based on
enacted or substantively enacted tax rates and tax rules. Assessments
as to the recoverability of deferred tax assets require the use of judg-
ment regarding assumptions related to estimated future taxable
profits. This includes the character and amounts of taxable future
profits, the periods in which those profits are expected to occur, and
the availability of tax planning opportunities. The Allianz Group
recognizes a valuation allowance for deferred tax assets when it is
unlikely that a corresponding amount of future taxable profit will be
available against which the deductible temporary differences, tax
loss carry forwards and tax credits can be utilized.
Current income taxes are calculated based on the respective local
taxable income and local tax rules for the period. In addition, current
income taxes presented for the period include adjustments for uncer-
tain tax payments or tax refunds for periods not yet finally assessed,
including interest expenses and penalties on the underpayment of
taxes. In the event that amounts included in the tax return are con-
sidered unlikely to be accepted by the tax authorities (uncertain tax
positions), a provision for income taxes is recognized. The amount is
based on the best possible assessment of the tax payment expected.
Tax refund claims from uncertain tax positions are recognized when it
is probable that they can be realized.
INCOME TAXES
CLAIMS AND INSURANCE BENEFITS INCURRED
These expenses consist of claims and insurance benefits incurred
during the period, including benefit claims in excess of policy account
balances and interest credited to policy account balances. Further-
more, it includes claim handling costs directly related to the pro-
cessing and settlement of claims. Reinsurance recoveries are deduct-
ed from claims and insurance benefits.
Fee and commission income primarily consists of asset management
fees which are recognized when the service is provided. Performance
fees may not be recognized as fee income before the respective
benchmark period is completed, because, before its completion, the
obligation to pay the fee is conditional, the fund performance is
regularly not reliably estimable, and related service is not fully per-
formed. In any case, performance-related fees from alternative in-
vestment products (carried interest) are not recognized as revenue
prior to the date of the official declaration of distribution by the fund.
FEE AND COMMISSION INCOME
Annual Report 2017 - Allianz Group
INCOME FROM FINANCIAL ASSETS AND LIABILITIES
CARRIED AT FAIR VALUE THROUGH INCOME (NET)
Income from financial assets and liabilities carried at fair value
through income (net) includes all investment income as well as real-
ized and unrealized gains and losses from financial assets and liabili-
ties carried at fair value through income. In addition, commissions
attributable to trading operations and related interest expenses as
well as refinancing and transaction costs are included in this line item.
Foreign currency gains and losses on monetary items are also report-
ed within income from financial assets and liabilities carried at fair
value through income (net).
INTEREST AND SIMILAR INCOME AND INTEREST
EXPENSES
written.
Premiums ceded for reinsurance are deducted from premiums
Revenues for universal life-type and investment contracts repre-
sent charges assessed against the policyholders' account balances
for front-end loads, net of the change in unearned revenue liabilities,
cost of insurance, surrenders, and policy administration, and are
included within premiums earned (net).
Premiums for short-duration insurance contracts are recognized as
revenues over the period of the contract in proportion to the amount
of insurance protection provided. Premiums for long-duration insur-
ance contracts are recognized as earned when due.
PREMIUMS
Unrealized gains and losses (net) include unrealized gains and
losses from available-for-sale investments and from derivative finan-
cial instruments that meet the criteria for cash flow hedge accounting.
Non-controlling interests represent equity in subsidiaries, not at-
tributable directly or indirectly, to Allianz SE as parent.
Please refer to the above section explaining foreign currency
changes that are recognized in equity. The effective portion of gains
and losses of hedging instruments designated as hedges of a net
investment in a foreign operation is recognized in foreign currency
translation adjustments.
Retained earnings comprise the net income of the current year,
earnings not yet distributed from prior years, treasury shares, and any
amounts directly recognized in equity according to IFRS. Treasury
shares are deducted from shareholders' equity. No gain or loss is
recognized on the sale, issuance, acquisition, or cancellation of these
shares. Any consideration paid or received is recorded directly in
shareholders' equity.
premium exceeding the issued capital received at the issuance of
shares.
Interest income and interest expenses are recognized on an accrual
basis. Interest income is recognized using the effective interest meth-
od. This line item also includes dividends from available-for-sale
equity securities as well as income from investments in associates and
joint ventures. Dividends are recognized in income when the right to
receive the dividend is established. Share of earnings from invest-
ments in associates and joint ventures represents the share of net
income from entities accounted for using the equity method.
505,460
848,942
813,417
(139)
Total liabilities
(138)
258
505,322
4,683
813,674
67,341
(258)
3,052
70,392
4,822
Deferred tax liabilities
512,268
1_As of December 2017, fair value and amortized cost of bonds from countries with a rating below AA amount to € 74,132 mn (2016: € 73,519 mn) and € 68,638 mn (2016: € 67,571 mn), respectively.
2_As of December 2017, fair value and amortized cost of debt securities with a contractual maturity of less than 12 months amount to € 30,037 mn (2016: € 30,420 mn) and € 29,222 mn (2016: € 29,807 mn), respectively.
HELD-TO-MATURITY INVESTMENTS
Held-to-maturity investments
€ mn
As of 31 December
Accumulated depreciation as of 31 December
(3,750)
56,908
459,109
520,397
42,779
(192)
2017
2016
271
Amortized cost
gains
Government and government agency bonds
2,368
12,649
Unrealized
losses
(19)
Unrealized
Unrealized
Fair value
Amortized cost
gains
losses
Fair value
Unrealized
2,621
30,323
(278)
(1,755)
Other
21,396
(303)
441
21,258
21,633
(140)
368
4,472
21,405
198,914
(1,663)
27,121
173,456
198,911
(827)
22,551
177,186
MBS/ABS
51,158
715
5,169
53,455
14,241
37,195
468,697
Total
Equity securities
469,489
(3,557)
44,259
(18)
428,787
(1,477)
39,213
431,503
Subtotal²
4,305
(17)
753
3,569
469,239
Government and government agency bonds¹
2,001
2,343
(188)
(1)
(193)
410
538
11,977
11,732
(3,136)
(425)
(2,959)
14,691
2016
2017
Additions
Carrying amount as of 1 January
Accumulated depreciation as of 1 January
Cost as of 1 January
Fixed assets of renewable energy investments¹
€ mn
15,113
FIXED ASSETS OF RENEWABLE ENERGY
INVESTMENTS
33
(252)
(472)
2,151
2,868
2016
2017
14,691
14,386
2,959
(14)
2,967
11,419
59
24
(17)
(24)
(257)
(252)
(1)
11,732
342
Carrying amount as of 31 December
Accumulated depreciation as of 31 December
Cost as of 31 December
Impairments
2_As of 31 December 2017, fair value and amortized cost of debt securities with a contractual maturity of less than 12 months amount to € 186 mn (2016: € 294 mn) and € 184 mn (2016: € 287 mn), respectively.
1 Also include corporate mortgage-backed securities.
2,805
(1)
407
2,399
2,992
(19)
Annual Report 2017 - Allianz Group
333
(1)
65
398
372
62
310
2,678
Total²
Corporate bonds¹
462
Reversals of impairments
103
UNREALIZED LOSSES ON AVAILABLE-FOR-SALE
INVESTMENTS AND HELD-TO-MATURITY
INVESTMENTS
Foreign currency translation adjustments
Depreciation
Changes in the consolidated subsidiaries of the Allianz Group
Disposals and reclassifications into non-current assets and
assets of disposal groups classified as held for sale
Reclassifications
Accumulated depreciation as of 1 January
Carrying amount as of 1 January
Additions
Cost as of 1 January
Real estate held for investment
€ mn
REAL ESTATE HELD FOR INVESTMENT
€ mn
Associates and joint ventures
D_Consolidated Financial Statements
INVESTMENTS IN ASSOCIATES AND JOINT VENTURES
As of 31 December 2017, loans to associates and joint ventures
amounted to € 1,598 mn (2016: € 1,381 mn).
EQUITY SECURITIES
Based on a detailed analysis of the underlying securities, the
Allianz Group did not consider these investments to be impaired as of
31 December 2017.
The main impact from unrealized losses on corporate bonds
comes from the financial and consumer sector.
For the vast majority of corporate bonds, the issuer/the issues
have an investment grade rating. The decrease in unrealized losses of
€ 1,082 mn compared to 31 December 2016 is due to decreasing
interest rates.
The unrealized losses on the Allianz Group's investments in gov-
ernment bonds are spread over several countries with the main part
coming from Europe.
In general, the credit risk of government bonds is rather moder-
ate since they are backed by fiscal capacity of the issuers who typical-
ly hold an investment-grade country- and/or issue-rating. During
2017, interest rates of government bonds decreased in some coun-
tries, while increasing in others. This development, supported by
realizations, led to a decrease in unrealized losses on government
bonds of € 818 mn.
Total unrealized losses amounted to € 1,496 mn as of
31 December 2017. The Allianz Group holds a large variety of gov-
ernment bonds and corporate bonds, mostly of or domiciled in OECD
countries.
DEBT SECURITIES
As of 31 December 2017, unrealized losses amounted to € 278 mn
which is an increase of € 86 mn compared to 31 December 2016.
They concern equity securities that did not meet the criteria of the
Allianz Group's impairment policy for equity instruments as described
in note 2. The major part of these unrealized losses has been in a
continuous loss position of less than 6 months.
(387)
244,874
15,944
1,411
1,546
2,206
2,440
70,357
71,427
122,416
126,149
(936)
Group
(360)
Consolidation
551
562
Total Corporate and Other
2
2
Consolidation
(328)
Alternative Investments
(981)
(1,029)
1_From the classification of the Korean life business as "held for sale" in the second quarter of 2016 until its disposal in the fourth quarter of 2016, the total result was considered as non-operating.
11,097
95
179
(23)
(24)
5
(994)
(1,293)
(1,171)
(868)
21
48
39
57
9
(170)
74
96
(783)
11,056
549
Banking
25
26
30
38
390
372
587
573
Consolidation
Global Insurance Lines & Anglo Markets
637
1,081
1,049
1,144
1,261
11,856
9,720
USA
764
560
(1,034)
2
Holding & Treasury
6,022
6,408
Asset Management
2,660
2,968
4,277
4,412
(917)
23,769
64,636
67,277
Total Life/Health
4
10
6
10
1
24,185
(1,575)
7,207
102
8,177
Total
5,426
5,101
Subtotal
2,457
2,498
Equity securities
8,333
2,970
Debt securities
Financial assets designated at fair value through income
536,869
546,828
Total
2,907
3,076
Subtotal
2,603
2,397
AVAILABLE-FOR-SALE INVESTMENTS
€ mn
230,504
243,526
(493)
15,579
228,439
Corporate bonds
Debt securities
Fair value
Available-for-sale investments
Unrealized
losses
Fair value Amortized cost
Unrealized
Unrealized
losses
Unrealized
gains
Amortized cost
2016
2017
As of 31 December
gains
7,329
2,488
2,433
2017
As of 31 December
512,268
520,397
Available-for-sale investments
€ mn
2016
2017
2016
Financial assets carried at fair value through income
As of 31 December
€ mn
Investments
6 _ Investments
at fair value through income
5 Financial assets carried
NOTES TO THE CONSOLIDATED BALANCE SHEETS
Annual Report 2017 - Allianz Group
D_Consolidated Financial Statements
Fixed assets of renewable energy investments
Held-to-maturity investments
2,399
2,461
Derivative financial instruments
11,732
11,419
Real estate held for investment
210
210
Equity securities
2,678
7,161
Investments in associates and joint ventures
264
405
Debt securities
912
836
Funds held by others under reinsurance contracts assumed
Financial assets held for trading
9,010
2,397
(91)
218
(1,084)
(2,904)
(4,643)
(971)
Accumulated depreciation as of 1 January
4,254
6,671
4,345
4,381
7,283
3,995
Cost as of 1 January
Equipment
Software
for own use
Equipment
Software
(4,310)
for own use
(2,828)
3,024
15
(31)
(56)
(12)
Changes in the consolidated subsidiaries of the Allianz Group
392
818
94
418
845
109
Additions
1,426
2,361
3,261
1,477
2,640
Carrying amount as of 1 January
Real estate held
Real estate held
2016
Real estate held for own use
Property and equipment
677
538
Derivative financial instruments used for hedging that meet the
criteria for hedge accounting, and firm commitments
390
442
Prepaid expenses
7,257
6,671
Accrued dividends, interest, and rent
3,424
3,775
Subtotal
1,615
1,742
Other taxes
Software
Equipment
Subtotal
Other assets
2017
38,050
37,731
1,756
1,876
7,141
7,159
1,477
Disposals and reclassifications into non-current assets and assets of disposal
groups classified as held for sale
1,432
2,786
3,024
2,941
€ mn
Property and equipment
PROPERTY AND EQUIPMENT
1_Includes other assets due within one year of € 32,008 mn (2016: € 32,767 mn)
Total¹
2,640
1,809
(46)
(82)
106
Annual Report 2017 - Allianz Group
D_Consolidated Financial Statements
11 Intangible assets
Intangible assets
€ mn
As of 31 December
Goodwill
Distribution agreements¹
Other²
Total
2017
2016
11,848
12,372
918
951
496
1_As of 31 December 2017, assets pledged as security and other restrictions on title were € 103 mn (2016: € 121 mn).
2_As of 31 December 2017, includes € 1,838 mn (2016: € 1,708 mn) for self-developed software and € 948 mn (2016: € 932 mn) for software purchased from third parties.
13,262
4,381
3,995
Cost as of 31 December
2,941¹
2,7862
1,432
3,024
2,640
1,477
997
188
4,633
2,887
971
4,643
2,904
3,938
7,420
4,318
7,283
429
13,752
1 Primarily include the long-term distribution agreements with Commerzbank AG of € 223 mn (2016: € 261 mn), Banco
Popular S.A. of € 352 mn (2016: € 371 mn), Yapi ve Kredi Bankasi A.S. of € 71 mn (2016: € 96 mn), Philippine National
Bank of € 67 mn (2016: € 83 mn) and HSBC Asia, HSBC Turkey, BTPN Indonesia and Maybank Indonesia of € 110 mn
(2016: € 133 mn).
3
2
(18)
(57)
(22)
(41)
Foreign currency translation adjustments
47
26
(41)
(20)
17
(33)
Reclassifications
(129)
(35)
(152)
Depreciation/Amortization
(70)
(565)
(303)
2 Primarily include acquired business portfolios, customer relationships, heritable building rights, land use rights, lease
rights, renewal rights and brand names.
GOODWILL
Goodwill
€ mn
2017
2016
13
(1)
(10)
(9)
(1)
(106)
(2)
Reversals of impairments
Impairments
(275)
(491)
(76)
(3)
1,763
2,032
Tax receivables
Unearned premiums
2017
2016
As of 31 December
€ mn
Reinsurance assets
8 Reinsurance assets
D_Consolidated Financial Statements
Annual Report 2017 - Allianz Group
1 Includes loans and advances to banks and customers due within one year of € 10,055 mn (2016: € 11,677 mn).
104
105,369
(97)
(94)
104,224
Total¹
Loan loss allowance
105,466
1,504
104,317
1,543
10,112
2016
2017
9 Deferred acquisition costs
€ mn
insurer on all the risks it underwrites, including the share that is rein-
sured. The Allianz Group monitors the financial condition of its rein-
surers on a regular basis and reviews its reinsurance arrangements
periodically in order to evaluate the reinsurer's ability to fulfill its
obligations to the Allianz Group companies under existing and
planned reinsurance contracts. The Allianz Group's evaluation criteria,
which include the degree of creditworthiness, capital levels and mar-
ketplace reputation of its reinsurers, are such that the Allianz Group
believes that its reinsurance credit risk is not significant, and historical-
ly has not experienced noteworthy difficulty in collecting claims from
its reinsurers. Additionally, and as appropriate, the Allianz Group may
also require letters of credit, deposits, or other financial guarantees to
further minimize its exposure to credit risk. In certain cases, however,
the Allianz Group does establish an allowance for doubtful amounts
related to reinsurance as appropriate, although this amount was not
significant as of 31 December 2017 and 2016. The Allianz Group
primarily maintains business relations with highly rated reinsurers.
Changes in aggregate policy reserves ceded to reinsurers
Changes in aggregate policy reserves ceded to reinsurers are as
follows:
124
15,562
16,375
Total
127
Other insurance reserves
5,211
4,633
Aggregate policy reserves
8,685
Reserves for loss and loss adjustment expenses
Subtotal
1,884
1,697
Loans and advances to banks and customers
7 Loans and advances to banks and customers
Changes in the consolidated subsidiaries of the Allianz Group
Disposals
Depreciation
Impairments
1_Include fixed assets of wind parks and solar parks.
2,868
3,086
472
597
2,397
2,488
Carrying amount as of 31 December
Accumulated depreciation as of 31 December
Cost as of 31 December
(36)
(83)
Carrying amount as of 31 December
(3)
2
719
2017
2016
Share of earnings
506
Other
99,883
99,526
Loans
3,699
3,094
Short-term investments and certificates of deposit
299
Carrying amount as of 1 January
428
2016
2017
As of 31 December
9
(78)
Share of other comprehensive income
€ mn
290
Share of total comprehensive income
Income taxes
5,211
Foreign currency translation adjustments
As of 31 December
€ mn
Other assets
10 _ Other assets
D_Consolidated Financial Statements
105
Annual Report 2017 - Allianz Group
24,887
23,184
Carrying amount as of 31 December
(9,544)
(9,199)
(754)
(824)
257
(1,256)
Foreign currency translation adjustments
Changes in shadow accounting
Amortization
2017
31
2016
Policyholders
17,404
17,270
Subtotal
(632)
(594)
Less allowances for doubtful accounts
5,126
4,904
Other
2,755
2,594
Reinsurance
4,217
4,231
Agents
5,938
6,134
Receivables
of the Allianz Group
Changes in the consolidated subsidiaries
2016
25,234
9,663
Deferred acquisition costs
Property-Casualty
As of 31 December
Reinsurance involves credit risk and is subject to aggregate loss
limits. Reinsurance does not legally discharge the respective Allianz
company from primary liability under the reinsured policies. Although
the reinsurer is liable to this company to the extent of the business
ceded, the Allianz company remains primarily liable as the direct
The Allianz Group reinsures a portion of the risks it underwrites in
an effort to control its exposure to losses and events and to protect its
capital resources. For natural catastrophe events, the Allianz Group
has a centralized program in place that pools exposures from its
subsidiaries by internal reinsurance agreements. Allianz SE limits
exposures in this portfolio through external reinsurance. For other
risks, the subsidiaries of the Allianz Group have individual reinsurance
programs in place. Allianz SE participates with up to 100% on an
arm's length basis in these cessions, in line with local requirements.
The risk coming from these cessions is also limited by external retro-
cessions.
The reserves for loss and loss adjustment expenses ceded to reinsur-
ers in the business segment Property-Casualty amounted to
€ 9,587 mn (2016: € 8,119 mn) as of 31 December 2017. Their change
is shown in the respective table in note 14.
Deferred acquisition costs
5,211
4,633
Carrying amount as of 31 December
€ mn
(422)
(135)
175
70
Changes recorded in the consolidated income statements
Other changes
92
(513)
Life/Health
Subtotal
Deferred sales inducements
Present value of future profits
Total
Changes in deferred acquisition costs
24,887
9,576
2017
Carrying amount as of 1 January
Additions
24,887
23,184
544
451
781
5,366
450
22,283
18,780
17,568
4,782
4,715
2016
2017
€ mn
23,562
244
2,660
328
(1,332)
(376)
(399)
Claims and insurance benefits incurred (net)
Other income
Fee and commission income
Subtotal
Investment expenses
(1,208)
(634)
(51)
(22)
Operating impairments of investments (net)
(108)
(102)
(85)
(94)
(1,205)
Interest expenses, excluding interest expenses from external debt
3,120
19,971
(13,937)
(561)
(485)
Operating change in reserves for insurance and investment contracts (net)²
(22,584)
(19,798)
(30,576)
(31,425)
70
1
21
33
1,346
1,454
1,527
1,616
21,433
3,226
6,612
5,333
285
52,262
Total revenues¹
2016
2017
Life/Health
Property-Casualty
€ mn
Business segment information - total revenues and reconciliation of operating profit (loss) to net income (loss)
BUSINESS SEGMENT INFORMATION - TOTAL REVENUES AND RECONCILIATION OF OPERATING PROFIT (LOSS)
TO NET INCOME (LOSS)
D_Consolidated Financial Statements
90
99
Annual Report 2017 - Allianz Group
883,809
70,135
68,602
901,300
Total liabilities and equity
51,535
2017
67,277
2016
64,636
248
Operating realized gains/losses (net)
(863)
(1,149)
(23)
(78)
Operating income from financial assets and liabilities carried at fair value through income (net)
18,204
(12,505)
17,856
3,465
Interest and similar income
Operating investment result
23,769
24,185
46,588
47,242
Premiums earned (net)
3,476
Total equity
Loan loss provisions
(13,537)
(60)
(61)
Net income (loss)
Income taxes
Income (loss) before income taxes
Non-operating items
Reclassifications³
Non-operating restructuring charges
Non-operating amortization of intangible assets
Acquisition-related expenses
Interest expenses from external debt
(61)
Non-operating change in reserves for insurance and investment contracts (net)
(121)
129
524
442
(52)
Subtotal
(52)
(94)
4,158
3,807
(1,169)
(1,410)
(1,677)
(1,394)
3,829
4,377
5,835
5,201
(449)
(34)
371
148
(204)
(72)
(50)
(233)
(227)
(54)
(236)
(3)
(2)
Other expenses
(20)
(27)
Operating restructuring charges
(19)
(19)
Operating amortization of intangible assets
(655)
(700)
(1,407)
(1,509)
Fee and commission expenses
(6,612)
(6,565)
(13,352)
(154)
(149)
Reclassifications³
204
(163)
Non-operating impairments of investments (net)
81
137
814
609
Non-operating realized gains/losses (net)
26
Acquisition and administrative expenses (net), excluding acquisition-related expenses
46
(5)
Non-operating income from financial assets and liabilities carried at fair value through income (net)
Non-operating investment result
4,277
4,412
5,464
5,053
Operating profit (loss)
(53)
2,968
813,674
13,530
3,215
1,003
931
(1,904)
(1,752)
936
958
260
148
24,887
23,184
15,562
16,375
(78)
(96)
111,325
119,141
2,924
105,369
8,871
(16,558)
12,422
13,752
13,262
11
12
7,794
7,332
11,901
14,196
14,329
(2)
(3)
13,925
14,105
29
38,050
37,731
(14,965)
8,556
104,224
(5,427)
(4,488)
(187)
(192)
3,053
3,919
1,155
1,050
2016
2017
2016
2017
2016
Group
Consolidation
D_Consolidated Financial Statements
2017
Corporate and Other
2016
17,119
14,463
72
63
6,081
5,368
65
59
536,869
546,828
(84,295)
(84,599)
139,165
103,578
133
24
8,333
8,177
(398)
(434)
701
492
105,441
832,698
136,841
(107,256)
5
39,867
39,639
(22,223)
(23,015)
25,283
26,242
2,925
4,683
4,906
(1,904)
(1,752)
188
178
29
79
2,936
111,325
13,682
119,141
13,306
(25)
13,295
(50)
(29,826)
(20)
(29,848)
71,830
73,396
3,133
3,188
13,485
13,250
7,615
9,596
(2,994)
(2,794)
10,586
12,367
13,290
13,662
(25)
505,322
513,687
(196)
(440)
615
577
2016
2017
2016
2017
2016
2017
2016
Group
Consolidation
Corporate and Other
2017
Asset Management
883,809
901,300
(400)
11,291
11,271
174
(193)
(57)
(109)
72,373
73,292
(34)
(57)
21,360
(108,120)
21,442
(26)
13,038
12,746
(1,974)
(1,527)
8,424
7,208
174
(24)
Cost as of 1 January
Net income (loss) attributable to:
Non-controlling interests
367
404
(3)
1
12
(1,309)
16
1,344
66
Annual Report 2017 - Allianz Group
1,473
73
7,329
7,207
95
179
(994)
(1,006)
(1,293)
178
6,803
2017
2016
2017
2016
2017
2016
2017
Net income (loss)
Operating profit (loss)
Premiums earned (net)
Total revenues
€ mn
Reconciliation of reportable segments to Allianz Group figures
RECONCILIATION OF REPORTABLE SEGMENTS TO ALLIANZ GROUP FIGURES
D_Consolidated Financial Statements
101
6,962
99
1,411
1,546
(3,085)
(31)
(319)
(115)
(166)
(450)
(157)
(1)
(10)
(135)
(135)
(11)
(9)
(12)
(13)
2
7
2
(11)
(1,254)
(546)
223
(2,941)
126
(19)
420
744
(784)
(862)
10,413
2016
10,148
199
(1,414)
(2,037)
2,194
2,408
(643)
(949)
(8)
(31)
7
German Speaking Countries and Central & Eastern
Europe
14,465
27,225
Europe
German Speaking Countries and Central & Eastern
4,158
3,807
5,464
5,053
46,588
47,242
51,535
52,262
Total Property-Casualty
(2)
(9)
(6,695)
(6,600)
Consolidation and Other
24,922
97
15,055
1,631
526
505
1,997
2,011
Iberia & Latin America
545
975
1,233
1,356
7,114
6,990
26,191
28,781
Western & Southern Europe, Middle East, Africa, Asia
Pacific¹
1,134
1,075
1,664
14,593
107
150
174
Iberia & Latin America
1,146
1,327
1,707
1,950
11,522
11,477
12,915
12,675
Pacific
Western & Southern Europe, Middle East, Africa, Asia
1,394
1,175
1,609
1,369
12,111
12,446
4,917
4,552
3,656
3,381
3,850
4,276
4,185
4,608
Allianz Partners
1,560
1,077
1,900
14,820
1,281
15,386
22,113
21,842
Global Insurance Lines & Anglo Markets
(38)
129
99
278
15,725
(858)
(838)
(858)
(311)
235
208
(379)
(311)
(11)
(11)
6,900
5,513
3
(68)
(861)
(1,203)
1
18
(1)
6
(349)
25
(656)
(109)
1,066
2,349
7,401
7,904
25,274
23,923
370
489
245
310
1
33
(1,306)
(1,269)
376
571
(100)
(1,259)
22,149
21,848
(244)
2017
Group
Consolidation
Corporate and Other
Asset Management
D_Consolidated Financial Statements
Annual Report 2017 - Allianz Group
100
3_From the classification of the South Korean life business as "held for sale" in the second quarter of 2016 until its disposal in the fourth quarter of 2016, the total result was considered as non-operating. Furthermore, tax reclassifications were included
in these lines until 2016. From 2017 onwards, these reclassifications are shown in the lines operating / non-operating change in reserves for insurance and investment contracts (net).
2,522
2,821
137
146
1_Total revenues comprise statutory gross premiums written in Property-Casualty and Life/Health, operating revenues in Asset Management, and total revenues in Corporate and Other (Banking).
2_For the year ended 31 December 2017, includes expenses for premium refunds (net) in Property-Casualty of € (215) mn (2016: € (255) mn).
155
4,003
167
3,640
Shareholders
2016
2017
2016
2017
(223)
707
731
6
19
70,357
71,427
122,416
(2,387)
2016
(328)
(360)
551
562
6,022
6,408
2017
2016
126,149
(850)
10,937
10,491
(1)
29
40
(71)
11,056
11,097
(23)
(24)
(868)
(783)
2,206
2,440
319
115
(5)
(5)
149
(1)
11
(15)
108
(838)
(61)
833
528
107
223
322
(250)
154
(15)
(504)
(217)
(287)
1,503
1,033
108
194
500
(681)
264
(2)
(20)
(25)
(13,201)
(14,366)
(135)
56
(53,156)
(51,218)
5
5
100
36
(154)
(154)
160
156
3
1
(46)
(25)
(46)
(3,968)
(27)
(19)
(19)
(3,734)
(3,857)
535
1,873
(825)
(3)
(1,992)
(1,530)
(25,303)
(25,709)
(58)
(61)
(1,466)
(1,578)
(3,817)
(1,382)
12,812
Asset Management
Accumulated impairments as of 1 January
2,117
7,254
11,848
12,372
Subtotal
ASSET MANAGEMENT
2,100
Total
23
7,702
The recoverable amounts for all CGUS are determined on the basis of
value in use calculations. The Allianz Group applies generally
acknowledged valuation principles to determine the value in use.
For all CGUS in the Property-Casualty business segment and for
the CGU Asset Management, the Allianz Group uses the discounted
earnings method to derive the value in use. Generally, the basis for
the determination of the discounted earnings value is the business
plan ("detailed planning period") as well as the estimate of the sus-
tainable returns and eternal growth rates, which can be assumed to
be realistic on a long-term basis ("terminal value") for the operating
entities included in the CGU. The discounted earnings value is calcu-
lated by discounting the future earnings using an appropriate dis-
count rate. The business plans applied in the value in use calculations
are the results of the structured management dialogues between the
Board of Management of Allianz SE and the operating entities in
connection with a reporting process integrated into these dialogues.
Generally, the business plans comprise a planning horizon of three
years and are based on the current market environment.
The terminal values are largely based on the expected profits of
the final year of the detailed planning period. Where necessary, the
planned profits are adjusted to reflect long-term sustainable earn-
ings. The financing of the assumed eternal growth in the terminal
values is accounted for by appropriate profit retention.
For all CGUs in the Life/Health business segment, the value in use
is based on an Appraisal Value method which is derived from the
Embedded Value and new business value calculation. As a starting
point for the impairment test for the CGUS in the Life/Health business
segment, the Market Consistent Embedded Value (MCEV) and a
multiple of the Market Consistent Value of New Business is used.
MCEV is an industry-specific valuation method to assess the current
value of the in-force portfolio. The Allianz Group uses an economic
Valuation techniques
481
459
Insurance USA
Subtotal
2,494
21
2,553
LIFE/HEALTH
Insurance German Speaking Countries
637
629
Health Germany
331
330
Insurance Western & Southern Europe, Middle East and Africa
651
655
Insurance Central and Eastern Europe
23
balance sheet approach to derive the MCEV, which is directly taken
out of the market value balance sheet (MVBS) as determined using
Solvency II guidance. In case where no adequate valuation reflecting
a long-term view in line with management judgment and market
experience could be derived from market consistent methodology,
the Appraisal Value can be derived from a Traditional Embedded
Value (TEV). This was not the case in 2017.
In determining the business plans, certain key assumptions were
made in order to project future earnings.
For entities included in the CGUs of the Property-Casualty busi-
ness segment, the business plans are mainly based on key assump-
tions including expense ratio, loss ratio, investment income, risk capi-
tal, market share, premium rate changes, and taxes. The basis for
determining the values assigned to the key assumptions are current
market trends and earnings projections.
The discount rate is based on the capital asset pricing model
(CAPM) and appropriate eternal growth rates. The assumptions,
including the risk-free interest rate, market risk premium, segment
beta, and leverage ratio used to calculate the discount rates, are in
general consistent with the parameters used in the Allianz Group's
planning and controlling process. The discount rates and eternal
growth rates for the CGUs in the Property-Casualty business segment
are as follows:
2.5
8.9
1.5
8.7
1.6
7.8
1.0
7.7
1.0
1_The table provides an overview of weighted key parameters on CGU level of the country-specific discount rates and
eternal growth rates used.
For entities included in the CGUS of the business segment Life/Health,
the MCEV is the excess of assets over liabilities of the MVBS accord-
ing to the Solvency II requirements. Assets and liabilities included in
the MVBS are measured at their market value as of the reporting
date. Technical provisions are an essential part of the liabilities in-
cluded in the MVBS and generally consist of the best estimate plus a
risk margin. The best estimate corresponds to the probability-
weighted average of future cash flows considering the time value of
money, using the relevant risk-free interest rate term structure. The
calculation of the best estimate is based on assumptions made for
demographic factors (e.g. mortality, morbidity, lapse/surrender rates),
expense allowances, taxation, assumptions on market conditions for
market consistent projections (e.g. reference rates, volatilities) as well
as investment strategy and asset allocation of the entity. The risk
margin ensures that the value of the technical provisions is equivalent
108
Annual Report 2017 - Allianz Group
2017
13,077
10.4
21
3.6
2.1
Discount rates and eternal growth rates for the CGUS
in the Property-Casualty business segment¹
%
CGUS in the Property-Casualty business segment
Insurance German Speaking Countries
Insurance Western & Southern Europe,
Middle East and Africa
Insurance Asia
Insurance Iberia & Latin America
Insurance Central and Eastern Europe
Global Insurance Lines & Anglo Markets
Specialty Lines I
Specialty Lines II
Eternal growth
Discount rate
rate
7.5
0.9
9.1
11.2
Specialty Lines II
Significant assumptions
38
440
12,812
Additions are mainly related to goodwill arising from the acquisition
of Sound Harbor Partners, a New York based private credit manager.
2016
Additions are mainly related to goodwill arising from the acquisition
of Allianz Maroc S.A. (formerly Zurich Assurance Maroc S.A.), Casa-
blanca, effective 3 November 2016, Allianz C.P. General Insurance,
Bangkok, effective 3 October 2016, Rogge Global Partners Ltd.,
London, effective 31 May 2016, several insurance portfolios in the
Netherlands and several wind parks.
IMPAIRMENT TEST FOR GOODWILL
Allocation principles
For the purpose of impairment testing, the Allianz Group has allocat-
ed goodwill to CGUS¹. These CGUS represent the lowest level at which
goodwill is monitored for internal management purposes.
CGUS in the Property-Casualty business segment are:
Insurance German Speaking Countries,
Insurance Western & Southern Europe, Middle East and Africa,
including Belgium, France, Greece, Italy, Luxembourg, the Nether-
lands, Turkey, Middle East and Africa,
Insurance Asia,
Insurance Iberia & Latin America, including Mexico, Portugal,
South America and Spain,
Insurance Central and Eastern Europe, including Bulgaria,
Croatia, Czech Republic, Hungary, Poland, Romania and
Slovakia,
Global Insurance Lines & Anglo Markets, including Australia,
Ireland, Russia, Ukraine and the United Kingdom,
Specialty Lines I, including Allianz Re, Allianz Global Corporate &
Specialty and Credit Insurance, and
12,288
Specialty Lines II, including Allianz Partners.
440
12,372
Carrying amount as of 1 January
39
(440)
12,372
(976)
12,101
Additions
32
214
Disposals
(556)
58
Foreign currency translation adjustments
Impairments
Carrying amount as of 31 December
11,848
Accumulated impairments as of 31 December
Cost as of 31 December
CGUS in the Life/Health business segment are:
2017
376
Insurance Western & Southern Europe, Middle East and Africa
1,371
1,418
Insurance Asia
101
Insurance Iberia & Latin America
21
21
Insurance Central and Eastern Europe
292
292
Global Insurance Lines & Anglo Markets
364
Insurance German Speaking Countries,
Health Germany,
Specialty Lines I
285
287
99
2017
Insurance Western & Southern Europe, Middle East and Africa,
including Belgium, France, Greece, Italy, Luxembourg, the Nether-
lands, Turkey, Middle East and Africa,
2016
Insurance USA.
The business segment Asset Management is represented by the CGU
Asset Management, including mainly Allianz Global Investors and
PIMCO.
Annual Report 2017 - Allianz Group
1_The following paragraphs only include the CGUS that contain goodwill.
107
D_Consolidated Financial Statements
Insurance Central and Eastern Europe, including Bulgaria,
Croatia, Czech Republic, Hungary, Poland, Romania and
Slovakia, and
Allocation of carrying amounts of goodwill to CGUS
€ mn
As of 31 December
PROPERTY-CASUALTY
Insurance German Speaking Countries
The carrying amounts of goodwill are allocated to the
Allianz Group's CGUS as of 31 December 2017 and 2016 as follows:
1.6
Italy
1 These reclassifications mainly relate to insurance contracts when policyholders change their contracts from an unit-
linked to an universal life-type contract.
54.9
0.4
54.8
111,325
France
119,141
As of 31 December²
0.6
90.0
29.3
0.4
1.7
Other liabilities
2_Consists of € 74,878 mn (2016: € 71,706 mn) unit-linked insurance contracts and € 44,263 mn (2016: € 39,620 mn) unit-
85.9
17 Other liabilities
Annual Report 2017 - Allianz Group
114
8.8
2.6
8.8
2.5
Belgium
linked investment contracts.
12.0
1.7
11.1
1.6
Switzerland
29.9
0.6
2017
(1,841)
rate
(10,547)
(12,776)
Releases upon death, surrender and withdrawal
policy
Guaranteed
Aggregate
Aggregate
policy
Guaranteed
3,994
7,973
Interest credited
2016
16,189
€ mn
reserves
rate
reserves
Policyholder charges
(1,377)
Reclassifications¹
168.0
2.5
178.7
2.4
Germany
United States
(25)
Portfolio acquisitions and disposals
€ bn
%
€bn
%
(1,857)
(1,972)
(12)
As of 31 December
Annual Report 2017 - Allianz Group
Policyholders
2,025
Deposits retained for reinsurance ceded
14,599
14,815
Subtotal
2,121
2,055
Other provisions
95
313
Restructuring plans
431
497
Share-based compensation plans
2,551
2,254
2,540
Derivative financial instruments used for hedging that meet the
147
D_Consolidated Financial Statements
115
20,640
D_Consolidated Financial Statements
1_Includes other liabilities due within one year of € 25,987 mn (2016: € 26,981 mn).
39,867
39,639
Total¹
6,922
7,418
Other liabilities
2,894
2,640
Financial liabilities for puttable equity instruments
159
criteria for hedge accounting, and firm commitments
Payables
Employee related
9,410
429
Payables for social security
8,269
7,777
Subtotal
1,616
1,562
Agents
1,745
1,589
Reinsurance
4,908
4,626
2016
2017
478
9,401
Tax payables
Other taxes
Pensions and similar obligations
Provisions
440
469
564
461
3,287
3,458
1,452
1,453
1,836
2,006
Unearned income
Accrued interest and rent
Subtotal
Income taxes
Premiums collected
USA
Changes in the consolidated subsidiaries of the Allianz Group
Policyholder charges
(16,460)
Releases upon death, surrender and withdrawal
1,740
Dividends allocated to policyholders
4,563
4,868
Interest credited
(555)
2,061
Separation of embedded derivatives
25,945
24,941
Premiums collected
196
(1,387)
3,268
Portfolio acquisitions and disposals
Other changes¹
Concentration of insurance risk in the Life/Health business segment per reportable segment
As of 31 December 2017 and 2016, the Allianz Group's reserves
for insurance and investment contracts for the business segment
Life/Health are summarized per reportable segment as follows:
The Allianz Group's Life/Health business segment provides a wide
variety of insurance and investment contracts to individuals and
groups in over 30 countries around the world. Individual contracts
include both traditional contracts and unit-linked contracts. Without
taking policyholder participation into account, traditional contracts
generally incorporate significant investment risk for the Allianz Group,
while unit-linked contracts generally result in the contract holder
assuming the investment risk. Traditional contracts include life, en-
dowment, annuity and health contracts. Traditional annuity contracts
are issued in both deferred and immediate types. In addition, the
Allianz Group's life insurance operations in the United States issue a
significant amount of equity-indexed deferred annuities. In certain
markets, the Allianz Group also issues group life, group health and
group pension contracts.
IN THE LIFE/HEALTH BUSINESS SEGMENT
CONCENTRATION OF INSURANCE RISK
1_Mainly relate to insurance contracts when policyholders change their contract from an unit-linked to an universal life-
type contract.
(9)
1,757
429,556
1,224
(15,719)
(1,643)
4,055
433,610
4,093
440,926
As of 31 December
436,833
Ending balance of discounted loss reserves
Subtotal
1,291
9
€ mn
Changes recorded in the consolidated income statements
of the Allianz Group
5,220
3,836
Changes due to valuation differences charged to income
2016
2017
4,980
(2,603)
Changes due to fluctuations in market value
€ mn
(10)
of the Allianz Group
Changes in the consolidated subsidiaries
41
(215)
Foreign currency translation adjustments
As of 1 January
(10,287)
433,610
As of 31 December
Changes in the consolidated subsidiaries
2,817
(13,054)
Foreign currency translation adjustments
421,268
429,556
Subtotal
70,664
71,776
Total
(3,882)
(4,055)
Balance carry forward of discounted loss reserves
54,563
55,581
425,150
(1,079)
As of 31 December
Western & Southern Europe, Middle East, Africa, Asia Pacific
Furthermore, all of the Allianz Group's annuity policies issued in
the United States meet the criteria for classification as insurance
contracts under IFRS 4 because they include options for contract
holders to elect a life-contingent annuity. These contracts currently do
not expose the Allianz Group to significant longevity risk on a portfo-
lio level, nor are they expected to do so in the future, as the projected
and observed annuitization rates are very low. Additionally, many of
the Allianz Group's traditional contracts issued in France and Italy do
not incorporate significant insurance risk, although they are account-
ed for as insurance contracts because of their discretionary participa-
tion features. Similarly, a significant portion of the Allianz Group's
unit-linked contracts in France and Italy do not incorporate significant
insurance risk.
The majority of the Allianz Group's Life/Health business segment
operations are conducted in Western Europe. Insurance laws and
regulations in Europe have historically been characterized by legal or
contractual minimum participation of contract holders in the profits
of the insurance company issuing the contract. In particular, life insur-
ance business in Germany, Switzerland, and Austria, which comprises
approximately 51% (2016: 49%) of the Allianz Group's reserves for
insurance and investment contracts as of 31 December 2017, in-
cludes a substantial level of policyholder participation in all sources
of profit, including mortality/morbidity, investment, and expense. As a
result of this policyholder participation, the Allianz Group's exposure
to insurance, investment and expense risk is mitigated.
D_Consolidated Financial Statements
113
602,064
111,325
490,739
(3,413)
1,038
1,038
(3,413)
903
(3,848)
618,201
119,141
499,060
903
(3,848)
116,251
As a result of the considerable diversity in types of contracts is-
sued, including the offsetting effects of mortality risk and longevity
risk inherent in a combined portfolio of life insurance and annuity
products, the geographic diversity of the Allianz Group's Life/Health
business segment and the substantial level of policyholder participa-
tion in mortality/morbidity risk in certain countries in Western Europe,
the Allianz Group does not believe its Life/Health segment has any
significant concentrations of insurance risk, nor does it believe its net
income or shareholders' equity is highly sensitive to insurance risk.
26,294
The Allianz Group's Life/Health business segment is exposed to
significant investment risk as a result of guaranteed minimum interest
rates being included in most of its non-unit-linked contracts. The
weighted average guaranteed minimum interest rates of the
Allianz Group's largest operating entities in the business segment
Life/Health, comprising 86% (2016: 86%) of the aggregate policy
reserves in this business segment in 2017, can be summarized by
country as follows:
As of 31 December
620
(4,660)
Foreign currency translation adjustments
105,873
111,325
As of 1 January
2016
2017
Financial liabilities for unit-linked contracts
€ mn
16_ Financial liabilities for unit-linked contracts
For contracts without fixed and determinable payments, the
Allianz Group has made assumptions in estimating the undiscounted
cash flows of contractual policy benefits including mortality, morbidi-
ty, interest crediting rates, policyholder participation in profits, and
future lapse rates. These assumptions represent current best esti-
mates and may differ from the estimates used to establish the re-
serves for insurance and investment contracts in accordance with the
Allianz Group's established accounting policy. Due to the uncertainty
of the assumptions used, the amount presented could be materially
different from the actual incurred payments in future periods.
The resulting total benefits for insurance and investment con-
tracts in the amount of € 1,382 bn include contracts where the timing
and amount of payments are considered fixed and determinable,
and contracts which have no specified maturity dates and may result
in a payment to the contract beneficiary, depending on mortality and
morbidity experience and the incidence of surrenders, lapses, or
maturities. Furthermore, the amounts are undiscounted and do not
include any expected future premiums; therefore they exceed the
reserves for insurance and investment contracts presented in the
consolidated balance sheet.
As of 31 December 2017, benefits for insurance and investment con-
tracts which are expected to be due in 2018 amounted to € 51 bn,
while those expected to be due between 2019 and 2022 amounted
to € 185 bn and those expected to be due after 2022 amounted to
€ 1,146 bn.
FUTURE POLICY BENEFITS
In most of these markets, the effective interest rates earned on the
investment portfolio exceed these guaranteed minimum interest
rates. In addition, the operations in these markets may also have
significant mortality and expense margins. However, the
Allianz Group's Life/Health operations in Switzerland, Belgium, and
Taiwan have high guaranteed minimum interest rates on older con-
tracts in their portfolios and, as a result, may be sensitive to declines
in investment rates or a prolonged low interest rate environment.
Weighted average guaranteed minimum interest rates of life
insurance entities
German Speaking Countries and Central & Eastern Europe
89,957
23,478
Total
Financial
liabilities for
unit-linked
contracts
contracts
Total
Reserves for
insurance and
investments
Financial
liabilities for
unit-linked
contracts
Reserves for
insurance and
investments
contracts
2016
2017
Annual Report 2017 - Allianz Group
Total
Consolidation
Global Insurance Lines & Anglo Markets
18 Certificated and subordinated liabilities
Iberia & Latin America
285,995
109,395
10,434
272,181
85,916
10,095
505
9,590
10,145
683
9,462
196,386
75,000
121,386
205,177
84,545
120,632
281,708
9,526
296,430
Certificated and subordinated liabilities
Currency
Senior bonds
116
8 July 2041
Perpetual bond
5.375
800
EUR
2006
DE000A0GNPZ3
5.750
2,000
EUR
2011
DE000A1GNAH1
Allianz Finance II B.V., Amsterdam
Perpetual bond
3.875
Annual Report 2017 - Allianz Group
1,500
D_Consolidated Financial Statements
Equity
€ mn
(2,749)
Foreign currency translation adjustments
27,087
27,199
Retained earnings¹
27,758
27,758
Additional paid-in capital
1,170
Issued capital
Shareholders' equity
1,170
2016
2017
As of 31 December
19 Equity
(762)
USD
XS1485742438
5.500
1,000
USD
2012
XS0857872500
༢བྷ། ཆཆ ༢།
30 January 2049
5.100
600
USD
2017
XS1556937891
6 July 2047
3.099
1,000
Perpetual bond
2016
DE000A1YCQ29
EUR
Perpetual bond
3.375
1,500
EUR
2014
DE000A13R7Z7
Perpetual bond
3.250
500
CHF
2014
CH0234833371
Perpetual bond
4.750
1,500
2013
EUR
Unrealized gains and losses (net)²
11,830
As of 31 December
€ mn
Non-controlling interests
NON-CONTROLLING INTERESTS
In its meeting on 16 February 2017, the Board of Management of
Allianz SE has resolved to conduct a share buy-back program in an
amount of up to € 3 bn within a period of twelve months. The share
buy-back program is based on the authorization granted by the
Annual General Meeting on 7 May 2014. In the period between
17 February 2017 and 15 December 2017, total of 16,750,354 treas-
ury shares with a market value of €2,999,969,793.55 have been
acquired for an average price of € 179.10. All of the treasury shares
acquired within the share buy-back program 2017 have been re-
deemed according to the simplified procedure without reduction of
the share capital.
SHARE BUY-BACK PROGRAM 2017
The treasury shares of Allianz SE and its subsidiaries represent
€3.6 mn (2016: € 5 mn) or 0.31% (2016: 0.42%) of the issued capital
as of 31 December 2017.
In the year ending 31 December 2017, the total number of
treasury shares of Allianz SE decreased by 562,546 (2016: decrease of
244,099), which corresponds to € 1,494,910.50 (2016: € 624,893.00) or
0.13% (2016: 0.05%) of issued capital as of 31 December 2017.
In the year ending 31 December 2017, 562,546 (2016: 617,084)
shares were sold to employees of Allianz SE as well as its subsidiaries
in Germany and abroad in the context of the Employee Stock Pur-
chase Plan. These shares were taken from the stock of treasury shares
dedicated to this purpose. In 2017, as in the previous year, no capital
increase for the purpose of Employee Stock Purchase Plans was
undertaken. Employees of the Allianz Group purchased shares at
prices ranging from € 108.04 (2016: € 94.54) to € 158.72 (2016:
€ 121.84) per share. As of 31 December 2017, the remaining treasury
shares of Allianz SE held for covering subscriptions by employees in
the context of the Employee Stock Purchase Plan of Allianz SE and its
subsidiaries in Germany and abroad amounted to 343,102 shares.
As of 31 December 2017, Allianz SE held 1,369,131 (2016: 1,931,677)
treasury shares. Of these, 343,102 (2016: 905,648) were held for cov-
ering future subscriptions by employees in Germany and abroad in
the context of Employee Stock Purchase Plans, whereas
1,026,029(2016: 1,026,029) were held as a hedge for obligations
from the Allianz Equity Incentive Program (former Group Equity Incen-
tive Program).
TREASURY SHARES
The proposal for appropriation of net earnings reflects the 1,369,717
treasury shares held directly and indirectly by the company as of
31 December 2017. Such treasury shares are not entitled to the divi-
dend pursuant to § 71b of the German Stock Corporation Act (AktG).
Should there be any change in the number of shares entitled to the
dividend by the date of the Annual General Meeting, the above
proposal will be amended accordingly and presented for resolution
on the appropriation of net earnings at the Annual General Meeting,
with an unchanged dividend of € 8.00 per each share entitled to
dividend.
Unappropriated earnings carried forward: € 606,299,090.10
Distribution of a dividend of € 8.00 per no-par share entitled to a
dividend: €3,511,039,432.00
PROPOSAL FOR APPROPRIATION OF NET EARNINGS
The Board of Management and the Supervisory Board propose that
the net earnings ("Bilanzgewinn") of Allianz SE of € 4,117,338,522.10
for the 2017 fiscal year shall be appropriated as follows:
Unrealized gains and losses (net)
D_Consolidated Financial Statements
Share of earnings
CAPITAL REQUIREMENTS
Annual Report 2017 - Allianz Group
1 From a formalistic perspective, the German Supervisory Authority deems the model of the Allianz Group to be "partial"
because not all entities are using the internal model. Some of the smaller entities report under the standard model and
others under the deduction and aggregation approach. Without loss of generality, the term internal model might be
used within the following chapters e.g. in case descriptions are also referring to entities that use the internal model or
descriptions focusing on processes with respect to the internal model components.
118
With Solvency II being the regulatory regime relevant for the
Group since 1 January 2016, our risk profile is measured and steered
based on our approved Solvency II internal model¹. We have intro-
duced a target Solvency II ratio based on pre-defined shock scenarios
on the level of both the Group and related undertakings, supple-
mented by economic scenarios and sensitivity analysis.
The Allianz Group's capital requirements primarily depend on the
type of business that it underwrites, the industry and geographic
locations in which it operates, and the allocation of the
Allianz Group's investments. During the Allianz Group's annual plan-
ning dialogues with its related undertakings, internal capital require-
ments are determined through business plans regarding the levels
and timing of capital expenditures and investments. These plans also
form the basis for the Allianz Group's capital management. Internal
capital requirements are determined by explicitly taking stress resili-
ence into account. Regulators impose minimum capital requirements
at the level of the Allianz Group's operating entities and the
Allianz Group as a whole. For further details on how Allianz Group
manages its capital, please refer to the section "Target and strategy
of risk management" of the Risk and Opportunity Report.
3,052
3,049
2,510
2,465
367
404
174
180
2016
2017
Other equity components
Total
12,175
117
457,000,000
CONDITIONAL CAPITAL
In addition, Allianz SE has authorized capital (Authorized Capital
2014/11) for the issuance of shares against cash until 6 May 2019. The
shareholders' subscription rights can be excluded in order to issue
new shares to employees of Allianz SE and its Group companies. As of
31 December 2017, the Authorized Capital 2014/11 amounted to
€ 14 mn.
As of 31 December 2017, Allianz SE had authorized capital with a
notional amount of € 550 mn for the issuance of new shares until
6 May 2019 (Authorized Capital 2014/1). The shareholders' sub-
scription rights can be excluded for capital increases against contri-
bution in kind. For a capital increase against contributions in cash, the
shareholders' subscription rights can be excluded: (i) for fractional
amounts, (ii) if the issue price is not significantly below the market
price and the shares issued under exclusion of the subscription rights
pursuant to § 186 (3) sentence 4 of the German Stock Corporation Act
(Aktiengesetz) do not exceed 10% of the share capital, and (iii) to the
extent necessary to grant a subscription right for new shares to the
holders of bonds that carry conversion or option rights or provide for
mandatory conversion. The subscription rights for new shares from
the Authorized Capital 2014/1 and the Conditional Capital
2010/2014 may only be excluded for the proportionate amount of
the share capital of up to € 234 mn (corresponding to 20% of the
share capital at year-end 2013).
AUTHORIZED CAPITAL
Issued capital as of 31 December 2017 amounted to € 1,170 mn
divided into 440,249,646 registered shares. The shares have no-par
value but a mathematical per-share value as a proportion of the
issued capital.
3,052
70,135
ISSUED CAPITAL
1_As of 31 December 2017, include € (115) mn (2016: € (157) mn) related to treasury shares.
2_As of 31 December 2017, include € 274 mn (2016: € 297 mn) related to cash flow hedges.
68,602
Total
3,049
Non-controlling interests
67,083
65,553
Subtotal
As of 31 December 2017, Allianz SE had conditional capital totaling
€ 250 mn (Conditional Capital 2010/2014). This conditional capital
increase will only be carried out if conversion or option rights at-
tached to bonds which Allianz SE or its Group companies have issued
against cash payments according to the resolutions of the Annual
General Meeting (AGM) on 5 May 2010 or 7 May 2014, are exercised
or the conversion obligations under such bonds are fulfilled, and only
to the extent that the conversion or option rights or conversion obli-
gations are not serviced through treasury shares or through shares
from authorized capital.
Annual Report 2017 - Allianz Group
Convertible subordinated notes totaling € 500 mn, which may be
converted into Allianz shares, were issued against cash in July 2011.
Within 10 years after the issuance a mandatory conversion of the
notes into Allianz shares at the then prevailing share price may apply
if certain events occur, subject to a floor price of at least € 74.90 per
share. Within the same period, the investors have the right to convert
the notes into Allianz shares at a price of € 187.26 per share. Both
conversion prices are as of inception and subject to anti-dilution
provisions. The subscription rights of shareholders for these converti-
ble notes have been excluded with the consent of the Supervisory
Board and pursuant to the authorization of the AGM on 5 May 2010.
The granting of new shares to persons entitled under such convertible
notes is secured by the Conditional Capital 2010/2014. On or before
31 December 2017, there was no conversion of any such notes into
new shares.
OF ISSUED SHARES OUTSTANDING
1,932,263
455,067,737
1,369,717
440,249,646
438,879,929
244,099
454,823,638
455,067,737
562,546
(16,750,354)
2016
2017
1 Thereof 1,369,131 (2016: 1.931.677) own shares held by Allianz SE.
Total number of issued shares
Treasury shares¹
Cancellation of issued shares
Number of issued shares outstanding as of
31 December
Number of issued shares outstanding as of 1 January
Changes in number of treasury shares
Number of issued shares outstanding
CHANGES IN THE NUMBER
2017
DE000A2DAHN6
7 July 2045
9,596
3,801
4,237
1,558
1.20%
1,041
1,058
1,058
0.17%
506
06
506
2.06%
3.30%
6,574
7,615
8,033
4,370
3,157
44,332
Year of issue
ISIN
13,530
13,295
13,295
1.22%
45
45
45
4.48%
10,328
8,880
8,880
4.42%
4,370
Notional amount
3,801
500
1.38%
Floating rate
Hybrid equity³
Current interest rate
Floating rate
Contractual interest rate
Fixed rate
Subordinated bonds
Total certificated liabilities
Contractual interest rate
Fixed rate
Money market securities
Current interest rate
Floating rate
Contractual interest rate
Fixed rate²
Current interest rate
3,732
Total subordinated liabilities
2_Change due to the issuance of a € 2.0 bn certificated bond in the fourth quarter of 2017.
2016
2017
Over 5 years
1-5 years
Up to 1 year
31 December
31 December
As of
As of
Contractual maturity date
Allianz Finance II B.V., Amsterdam
Certificated liabilities
€ mn
Bonds outstanding as of 31 December 2017
3_Relates to hybrid equity issued by subsidiaries.
1_Except for interest rates. Interest rates represent the weighted average.
Coupon in %
Maturity date
DE000A1HG1J8
21 April 2031
1.375
750
EUR
2016
DE000A180B80
13 March 2028
3.000
750
EUR
2013
DE000A1HG1K6
6 December 2027
0.875
750
DE000A1HG1L4
EUR
2013
750
2.241
1,500
EUR
2015
DE000A14J9N8
17 October 2042
5.625
1,500
EUR
2012
DE000A1RE1Q3
Allianz SE, Munich
Subordinated liabilities
13 March 2043
4.500
GBP
2017
DE000A19S4V6
6 June 2023
750
EUR
2016
DE000A180B72
22 July 2019
4.750
1,500
EUR
2009
DE000A1AKHB8
13 March 2018
1.375
500
EUR
2013
0.000
21 April 2020
3-months Euribor +
DE000A19S4T0
0.250
750
EUR
2017
DE000A19S4U8
14 February 2022
3.500
€ mn¹
1,500
2012
DE000A1GORU9
7 December 2020
50 bps
500
EUR
2017
EUR
54,563
72.7
Aggregate policy reserves
5,676
2010
26,167
13,368
12,799
2009
25,135
25,135
2008
Total
2017
2015
2014
2013
2012
6,688
2011
14,094
2011
712
2,435
2013
27,828
14,443
7,434
1,972
1,107
2,872
2012
26,545
14,316
6,945
1,725
3,559
26,459
1,113
2010
and prior
52,505
(9,587)
62,093
(3,757)
298
(4,055)
(3,809)
287
(4,096)
57,254
(8,417)
65,671
56,314
(9,874)
66,189
61,617
2009
(8,119)
1_Include effects of foreign currency translation adjustments for prior year's claims of gross € (2,127) mn (2016: € 116 mn) and of net € (1,579) mn (2016: € (41) mn) and for current year claims of gross € (406) mn (2016: € (55) mn) and of net € (322) mn
(2016: € (68) mn).
Calendar year
2008
D_Consolidated Financial Statements
Accident year
€ mn
Loss payments for the individual accident years (per calendar year, net)
LOSS PAYMENTS FOR THE INDIVIDUAL ACCIDENT YEARS (PER CALENDAR YEAR, NET)
Annual Report 2017 - Allianz Group
110
The run-off triangles are not prepared on a currency-adjusted
basis. This means all figures are translated from the respective local
currency into the Allianz Group presentation currency (Euro), consist-
ently using the exchange rates applicable at the respective reporting
date. This ensures that the reserves reconcile with reserves in the
consolidated balance sheet.
The run-off triangle, also known as the "loss triangle", is a tabular
representation of loss-related data (such as payments, loss reserves,
ultimate losses) in two time-related dimensions. One of these is the
calendar year, the other is the accident year (year of loss occurrence).
Run-off triangles - as the basis for measuring loss reserves - express
how the loss reserves change over the course of time due to pay-
ments made and new estimates of the expected ultimate loss at the
respective reporting date.
Although discounted loss reserves have been reclassified to "Re-
serves for insurance and investment contracts" in the balance sheet,
the underlying business development of these non-life reserves is still
considered in the loss ratio. Therefore the tables below show the loss
development by accident year including the business development of
discounted loss reserves.
FOR LOSS AND LOSS ADJUSTMENT EXPENSES (LAE)
The analysis of loss and LAE reserves by actuaries and management
is conducted by line of business and separately for specific claim
types such as asbestos and environmental claims. The origin year of
losses is taken into consideration by analyzing each line of business
by accident year. While this determines the estimates of reserves for
loss and LAE by accident year, the effect in the consolidated income
statement in the respective calendar year combines the accident year
loss ratio for the current year with the favorable or adverse develop-
ment from prior years (run-off).
CHANGES IN HISTORICAL RESERVES
Prior years' net loss and loss adjustment expenses incurred reflect the
changes in estimation charged or credited to the consolidated in-
come statement in each year with respect to the reserves for loss and
loss adjustment expenses established as of the beginning of that
year. During the year ended 31 December 2017, the Allianz Group
recorded additional income of € 1,927 mn (2016: € 2,084 mn) net in
respect of losses occurring in prior years. During the year ended
31 December 2017, this amount, expressed as a percentage of the
net balance of the beginning of the year, was 3.4% (2016: 3.6%).
53,497
265
2,090
15,449
2012
2011
2010
2009
2008
and prior
As of 31 December
Accident year
€ mn
Reserves for loss and loss adjustment expenses for the individual accident years at the respective reporting date (net)
FOR THE INDIVIDUAL ACCIDENT YEARS AT THE RESPECTIVE REPORTING DATE (NET)
RESERVES FOR LOSS AND LOSS ADJUSTMENT EXPENSES
16,669 30,778
7,842
2,261
1,022
2013
710
2014
2016
2011
50,850
14,729
7,456
28,666
2010
48,539
14,074
34,465
2009
47,796
47,796
2008
Total
2017
2015
7,181
425
269
775
476
395
1,626
2015
28,702
15,410
7,009
1,890
1,169
729
465
2,031
2014
28,979
1,054
303
1,850
16,291
181
1,095
2017
31,403
16,409
7,929
2,007
1,004
727
546
364
260
2,157
2016
30,031
7,564
24,876
(7)
323
17,065
2016
2017
As of 31 December
Property-Casualty
Life/Health
Consolidation
Total
€ mn
Unearned premiums
13 Unearned premiums
For the CGUS in the business segment Property-Casualty and for
the CGU Asset Management, sensitivity analyses were performed in
respect to the long-term sustainable combined ratios and cost-
income ratios. For all CGUs, excluding Property-Casualty Insurance
Asia, discounted earnings value sensitivities still exceeded their re-
Sensitivity analyses were performed with regard to discount rates and
key value drivers of the business plans.
Sensitivity analysis
For entities included in the CGU of the Asset Management busi-
ness segment, key assumptions include assets under management
growth, cost-income ratio, and risk capital. The key assumptions are
based on the current market environment. The discount rate for the
CGU Asset Management is 9.7% and the eternal growth rate is 1.0%.
The new business value calculation is based on a best estimate of
one year of value of new business, multiplied by a factor (multiple) to
capture expected future new business. The best estimate of new
business is generally derived from the achieved value of new busi-
ness. The new business multiple accounts for the risk and the growth
associated with future new business in analogy to the discount rate
and the growth rate in a discounted earnings method. For all CGUs in
the Life/Health business segment, a multiple of not more than ten
times the value of new business is applied.
1_Consists of liabilities to banks and customers due within one year of € 10,995 mn (2016: € 10,193 mn), 1-5 years of
€1,097 mn (2016: € 2,256 mn) and over 5 years of € 654 mn (2016: € 590 mn).
13,038
12,746
17,276
Total¹
4,402
(26)
21,442
Prior years
Current year
Loss and loss adjustments expenses incurred
Subtotal
Balance carry forward of discounted loss reserves
As of 1 January
€ mn
Change in the reserves for loss and loss adjustment expenses in the Property-Casualty business segment
D_Consolidated Financial Statements
109
Annual Report 2017 - Allianz Group
As of 31 December 2017, the reserves for loss and loss adjustment
expenses of the Allianz Group totaled € 73,292 mn (2016: € 72,373 mn).
The following table reconciles the beginning and ending reserves for
the Property-Casualty business segment for the years ended
31 December 2017 and 2016.
14 Reserves for loss and loss adjustment
expenses
21,360
(24)
4,108
Subtotal
8,101
Other
Euro swap curve minus 10 bps credit risk adjustment plus 4 bps
volatility adjustment
Euro swap curve minus 10 bps credit risk adjustment plus 4 bps
volatility adjustment
CHF swap curve minus 10 bps credit risk adjustment minus 3 bps
volatility adjustment
Euro swap curve minus 10 bps credit risk adjustment plus 4 bps
volatility adjustment
Reference rate for entities with Appraisal Value based on MCEV
Insurance USA
and Eastern Europe
Insurance Western &
Southern Europe,
Middle East and Africa
Insurance Central
Health Germany
CGUS in the Life/Health
business segment
Insurance German
Speaking Countries
Reference rates for the CGUs in the Life/Health business segment
The following table provides an overview of the reference rates
for the CGUS in the Life/Health business segment:
Reference rates used for the calculation of the best estimate fol-
low EIOPA specifications for the Solvency II guidance.
to the amount that the entity would be expected to require in order to
take on and meet the insurance and reinsurance obligations.
D_Consolidated Financial Statements
For those entities reporting in Euro:
7,953
Euro swap curve minus 10 bps credit risk adjustment plus 4 bps
volatility adjustment
Local swap curve minus 10 bps credit risk plus volatility adjustment
for the following currencies only (HRK: 4 bps, CZK: 4 bps, PLN: 11 bps)
Local swap curve minus 10 bps credit risk adjustment plus 28 bps
volatility adjustment
4,040
3,821
Repurchase agreements and collateral received from securities
lending transactions and derivatives
897
973
Payable on demand and other deposits
2016
2017
As of 31 December
€ mn
Liabilities to banks and customers
=
12 Liabilities to banks and customers
In the business segment Life/Health, sensitivity analyses were
performed based on MCEV sensitivity testing on the reference rate.
The analyses have shown that in case of a decrease in reference rates
by 50 basis points, the appraisal value of each CGU still exceeds its
carrying amount.
spective carrying amounts. The recoverable amount of the CGU
Insurance Asia in the business segment Property-Casualty slightly
exceeds its carrying amount. An increase of less than 50 basis points
in the discount rate or the combined ratio results in the recoverable
amount of the CGU getting close to its carrying amount.
For other entities:
272
Loss and loss adjustments expenses paid
Prior years
(17,291)
(16,669)
1,080
(17,749)
30,576
(2,296)
32,872
31,425
(4,838)
36,262
(2,084)
445
(2,530)
(1,927)
116
883
(2,043)
(16,409)
1,655
(84)
407
(1,586)
646
(2,232)
(31,403)
1,529
(32,932)
(30,778)
2,735
(33,513)
(14,994)
646
(15,640)
(14,109)
(15,764)
Current year
32,661
35,402
(8,119)
61,617
Net
Ceded
Gross
Net
Ceded
Gross
2016
2017
As of 31 December
Ending balance of discounted loss reserves
Changes in the consolidated subsidiaries of the Allianz Group
Subtotal
Foreign currency translation adjustments and other changes¹
Subtotal
53,497
(2,741)
61,169
53,942
33,351
(4,954)
38,305
57,492
(7,560)
65,051
57,254
(8,417)
65,671
3,550
(332)
3,882
3,757
(298)
4,055
(7,228)
As of 1 January
5,147
15,596
2012
75.0
71.9
71.2
39,898
2011
73.3
72.7
39,303
2010
72.5
37,828
2009
%
%
41,705
%
71.2
74.2
70.3
68.9
72.9
71.1
70.2
43,759
2014
69.9
69.2
72.8
71.1
70.6
42,047
2013
72.0
71.9
70.0
%
2016
3,403
3
411
323
348
368
258
316
247
120
1,012
9,812
3
411
761
1_Includes effects from foreign currency translation adjustments and other changes.
2017
2_The total development 2017 to 2016 of € 3,403 mn represents the cumulative surplus from reestimating the ultimate loss for prior year claims. Considering foreign currency translation adjustments of net € (1,579) mn as well as changes in the
consolidated subsidiaries of the Allianz Group and other changes of in total € 102 mn, this leads to an effective run-off of net € 1,927 mn, which can be found in the table "Change in reserves for loss and loss adjustment expenses" within this note.
3_Presentation not meaningful.
FOR THE INDIVIDUAL ACCIDENT YEARS AT THE RESPECTIVE REPORTING DATE (NET)
2015
2014
Accident year
2013
%
%
%
%
%
€ mn
2012
2011
2010
2009
earned (net)
Premiums
Calendar year premiums earned and ultimate loss ratios for the individual accident years at the respective reporting date (net)
CALENDAR YEAR PREMIUMS EARNED AND ULTIMATE LOSS RATIOS
729
2015
70.1
(19)
Foreign currency translation adjustments
433,610
440,926
15,400
16,101
As of 1 January
2016
2017
Amounts already allocated under local statutory
or contractual regulations
2016
2017
Aggregate policy reserves
As of 31 December
€ mn
7
Reserves for insurance and investment contracts
Other insurance reserves
70,664
AGGREGATE POLICY RESERVES
Latent reserves for premium refunds
16,101
16,196
As of 31 December
731
113
Changes
505,322
513,687
Total
(36)
of the Allianz Group
1,048
Changes in the consolidated subsidiaries
71,776
984
46,430
€ mn
RESERVES FOR PREMIUM REFUNDS
71.1
69.4
69.1
69.5
67.9
72.4
70.8
69.9
46,588
2016
70.3
69.8
70.1
68.3
71.1
2017
Reserves for premium refunds
47,242
70.2
D_Consolidated Financial Statements
contracts
15 Reserves for insurance and investment
Annual Report 2017 - Allianz Group
112
As of 31 December 2017, the reserves for loss and loss adjustment
expenses which are expected to be due in 2018 amounted to
€ 16,935 mn, while those expected to be due between 2019 and
2022 amounted to € 13,320 mn and those expected to be due after
2022 amounted to € 26,060 mn.
CONTRACTUAL CASH FLOWS
The ultimate loss of an accident year comprises all payments made
for that accident year up to the reporting date, plus the loss reserves
at the reporting date. Given complete information regarding all
losses incurred up to the reporting date, the ultimate loss for each
accident-year period would remain unchanged. In practice, however,
the ultimate loss (based on estimates) is exposed to fluctuations that
reflect the increase in knowledge regarding the loss cases. The loss
ratio presented above deviates from the reported loss ratio because
the ultimate loss in the table above is based on the sum of the pay-
ments plus the loss reserves, not the incurred loss from the consoli-
dated income statement. This means that effects like changes in
consolidated subsidiaries, foreign currency translation and unwinding
of discounted loss reserves are presented differently.
70.4
70.2
68.7
68.3
68.6
67.3
71.6
69.6
7,218
569
1,335
2,815
2,356
1,945
1,625
1,425
11,822
2017
57,254
16,708
7,991
5,262
3,894
3,040
2,564
2,141
3,891
1,725
5,407
16,573
2012
2011
2010
2009
2008
Calendar year
2008
Accident year
€ mn
Ultimate loss for the individual accident years at the respective reporting date (net)
ULTIMATE LOSS FOR THE INDIVIDUAL ACCIDENT YEARS AT THE RESPECTIVE REPORTING DATE (NET)
D_Consolidated Financial Statements
111
Annual Report 2017 - Allianz Group
56,314
8,454
2013
13,930
57,492
13,957
7,239
5,190
3,837
3,117
20,104
2013
55,807
15,564
7,861
5,238
4,061
23,082
2012
52,836
53,445
2016
2014
2,492
16,358
7,585
5,182
3,931
3,208
2,614
2,064
16,550
2015
55,619
15,215
7,101
5,223
4,066
3,105
18,417
1,932
2014
2016
27,834
26,445
72,220
32,649
30,560
29,490
28,498
28,990
27,943
26,524
72,683
30,625
29,560
28,736
29,074
28,893
27,958
28,334
30,244
1,235
1,117
1,723
33,242
32,705
31,888
29,896
28,837
28,076
28,577
27,588
26,325
71,208
33,116
32,211
29,206
2015
26,557
29,407
72,931
Total
2017
2016
2015
2014
2013
2012
2011
2010
2009
and prior
Reduction 2017 versus 2016²
Surplus¹
2017
72,400
72,925
27,442
27,512
28,863
29,029
27,962
26,718
72,580
30,007
29,610
28,250
26,950
73,124
29,912
28,257
26,928
72,046
28,823
72,277
2016
Reserves for premium refunds
26 Change in reserves for insurance and
investment contracts (net)
Pensions and similar obligations
2,516
2,675
(43)
23
Other liabilities
576
630
2,941
3,085
Total deferred tax liabilities
61
59,843
Effective tax rate
29.0%
29.6%
Effect of netting
(54,936)
(49,406)
Net deferred tax liabilities
4,906
4,683
(3,976)
(3,680)
54,090
For the year ended 31 December 2017, the write-down of deferred
taxes on tax losses increased the tax expenses by € 52 mn (2016:
€ 103 mn). The reversal of write-down of deferred tax assets on tax
losses carried forward resulted in deferred tax income of € 49 mn
(2016: € 9 mn). Due to the use of tax losses carried forward, for which
deferred tax assets had previously been written off, the current in-
come tax expenses decreased by € 3 mn (2016: € 1 mn). Deferred tax
income increased by € 10 mn (2016: € 32 mn) due to the use of tax
(10)
Other effects
29.6%
29.9%
Calculated income taxes
Deferred acquisition costs
6,309
7,423
3,004
3,116
Other assets
1,622
1,826
Effective income taxes
Trade tax and similar taxes
193
Net tax exempt income
(221)
(309)
Intangible assets
637
808
Insurance reserves
16,865
11,697
Effects of tax losses
211
Applied weighted income tax rate
Net deferred tax assets (liabilities)
Annual Report 2017 - Allianz Group
Derivative financial instruments
€ mn
As of 31 December
D_Consolidated Financial Statements
2017
2016
Maturity by notional amount
Notional
Notional
Up to 1 year
1-5 years
33 Derivative financial instruments
Over 5 years
Positive fair
Negative fair
principal
values
values
amounts
Positive fair
values
Negative fair
values
Interest rate contracts
OTC
8,238
principal
amounts
In 2017, the posting of deferred taxes for latent reserves for premium
refunds and the underlying revaluations of balance sheet items was
changed from a net to a gross approach which led to an increase in
deferred tax assets and liabilities before netting, particularly for
investments and insurance reserves. The comparative amounts for
2016 were adjusted accordingly by € 30.2 bn. In addition, the US tax
OTHER INFORMATION
124
123
D_Consolidated Financial Statements
reform led to an increase in deferred tax assets and deferred tax
liabilities in 2017 of € 669 mn before netting.
Taxable temporary differences associated with investments in
Allianz Group companies for which no deferred tax liabilities are
recognized, as the Allianz Group is able to control the timing of their
reversal, and which will not reverse in the foreseeable future,
amounted to € 1,673 mn (2016: € 1,150 mn). Deductible temporary
differences arising from investments in Allianz Group companies for
which no deferred tax assets are recognized, as it is not probable that
they will reverse in the foreseeable future, amounted to € 65 mn
(2016: € 97 mn).
TAX LOSSES CARRIED FORWARD
Tax losses carried forward at 31 December 2017 of € 8,395 mn (2016:
€ 9,697 mn) resulted in the recognition of deferred tax assets to the
extent that there is sufficient certainty that the unused tax losses will
be utilized. At the reporting date, this prerequisite was not fulfilled for
a partial amount of € 2,684 mn (2016: € 3,010 mn). According to tax
legislation as of 31 December 2017, an amount of € 2,353 mn (2016:
€ 2,801 mn) of these tax losses may be carried forward indefinitely
and in unlimited amounts, whereas an amount of € 331 mn (2016:
€ 209 mn) of these tax losses carried forward will expire over the next
20 years if not utilized.
Tax losses carried forward are scheduled according to their expi-
ry periods as follows:
Tax losses carried forward
€ mn
2018
2019-2020
Annual Report 2017 - Allianz Group
2021-2022
>10 years
Unlimited
Total
2017
34
115
92
182
294
7,679
8,395
2023-2027
28,545
30,764
Investments
(89)
(28)
Available-for-sale investments
531
(807)
Cash flow hedges
8
(33)
Share of other comprehensive income of associates and joint
ventures
(4)
2016
10
181
(14)
Items that may never be reclassified to profit or loss
Changes in actuarial gains and losses on defined benefit
plans
(46)
148
Total
581
(724)
losses carried forward, for which deferred tax assets had previously
been written off. The above-mentioned effects are shown in the
reconciliation statement as "effects of tax losses".
The tax rates used in the calculation of the Allianz Group's de-
ferred taxes are the applicable national rates, which in 2017 ranged
from 10.0% to 45.0%, with changes to tax rates that had already
been adopted in Argentina, Belgium, France, Portugal, Turkey, and
the United States by 31 December 2017 taken into account. The tax
rate change from the US tax reform led to extraordinary tax expenses
of € 74 mn.
Miscellaneous
Deferred tax assets on losses carried forward are recognized to
the extent to which it is more likely than not that sufficient future
taxable profits will be available for realization. Entities which suffered
a tax loss in either the current or the preceding period recognized
deferred tax assets in excess of deferred tax liabilities amounting to
€ 351 mn (2016: € 334 mn), as there was convincing other evidence
that sufficient taxable profit will be available.
2017
€ mn
Subtotal
(1,578)
(1,466)
Deferred income taxes
Total
CONSOLIDATION
Total
(61)
(25,702)
(58)
(25,301)
122
Items that may be reclassified to profit or loss in future periods
Foreign currency translation adjustments
2017
(2,129)
(2,666)
(812)
(2,941)
(419)
(3,085)
During the year ended 31 December 2017, current income taxes
included income of € 160 mn (2016: expenses of € 178 mn) related
to prior years.
Of the deferred income taxes for the year ended
31 December 2017, expenses of € 581 mn (2016: € 365 mn) are
attributable to the recognition of deferred taxes on temporary differ-
ences, and expenses of € 183 mn (2016: € 41 mn) are attributable to
tax losses carried forward. Changes of applicable tax rates due to
changes in tax law produced deferred tax expenses of € 48 mn
(2016: € 13 mn).
Annual Report 2017 - Allianz Group
D_Consolidated Financial Statements
For the years ended 31 December 2017 and 2016, the income
taxes relating to components of other comprehensive income consist
of the following:
Income taxes relating to components
of other comprehensive income
2016
DEFERRED TAX ASSETS AND LIABILITIES
The recognized income taxes for the year ended 31 December 2017
are € 63 mn (2016: € 31 mn) below the calculated income taxes,
which are determined by multiplying the respective income before
income taxes with the applicable country-specific tax rates. The fol-
lowing table shows the reconciliation from the calculated income
taxes to the effectively recognized income taxes of the Allianz Group.
The Allianz Group's reconciliation is a summary of the individual
company-related reconciliations, which are based on the respective
country-specific tax rates taking into consideration consolidation
effects with an impact on the Group result. The applicable tax rate
used in the reconciliation for domestic Allianz Group companies
includes corporate tax, trade tax and the solidarity surcharge, and
amounted to 31.0% (2016: 31.0%).
The effective tax rate is determined on the basis of the effective
income tax expenses on income before income taxes.
1,136
Total deferred tax assets
56,604
51,216
Non-recognition or valuation allowance for deferred tax assets
on tax losses carried forward
(737)
(807)
Effect of netting
(54,936)
(49,406)
Effective tax rate
990
€ mn
931
1,003
DEFERRED TAX LIABILITIES
2017
2016
Financial assets carried at fair value through income
553
487
Income before income taxes
10,148
10,413
Net deferred tax assets
Other liabilities
4,601
4,662
Deferred tax assets and liabilities
€ mn
As of 31 December
Deferred acquisition costs
Other assets
Intangible assets
Tax losses carried forward
2017
2016
DEFERRED TAX ASSETS
Financial assets carried at fair value through income
Investments
381
313
14,807
10,976
1,256
1,442
1,394
1,875
99
254
1,941
2,252
Insurance reserves
31,073
28,368
Pensions and similar obligations
16,060
62,258
86,556
691
Risk based steering and risk management,
Allianz risk profile and management assessment,
Market risk, credit risk, and liquidity risk in the section Quantifia-
ble risks and opportunities by risk category.
FAIR VALUES AND CARRYING AMOUNTS
The following table compares the carrying amount and fair value of
the Allianz Group's financial assets and financial liabilities:
Fair values and carrying amounts of financial instruments
€ mn
As of 31 December
2017
2016
Carrying
amount
Internal risk capital framework including all subsections,
Fair value
Fair value
FINANCIAL ASSETS
Cash and cash equivalents
Financial assets held for trading
17,119
17,119
14,463
14,463
3,076
3,076
2,907
Carrying
amount
2,907
Certain risk disclosure requirements of IFRS 7 are reflected in the
following sections of the Risk and Opportunity Report within the
Group Management Report:
The Allianz Group mainly enters into enforceable master netting
arrangements and similar arrangements for derivatives transactions.
None of these enforceable master netting arrangements or similar
arrangements meet the requirements for offsetting in line with IAS 32.
Credit risk associated with netting arrangements is further miti-
gated by collateral. For further information on collateral, please refer
to note 34.
461,681
2,998
(11,437)
447,056
3,110
(11,426)
5
The table shows the fair value and notional amounts of all freestand-
ing derivatives, as well as derivatives for which hedge accounting is
applied by the Allianz Group, as of 31 December 2017 and 2016,
respectively. The notional principal amounts indicated in the table are
cumulative, as they include the absolute value of the notional princi-
pal amounts of derivatives with positive and negative fair values.
Although these notional principal amounts reflect the degree of the
Allianz Group's involvement in derivative transactions, they do not
represent amounts exposed to risk. Further information on the use of
derivatives to hedge risk can be found in the sections on market and
credit risk of the Risk and Opportunity Report, which forms part of the
Group Management Report.
FREESTANDING DERIVATIVE FINANCIAL
INSTRUMENTS
As of 31 December 2017, freestanding derivatives, included in the line
item financial assets and liabilities held for trading, had a notional
principal amount of € 439.6 bn (2016: € 429.7 bn) as well as a posi-
tive fair value of € 2.5 bn (2016: € 2.4 bn) and a negative fair value of
€ 11.3 bn (2016: € 11.3 bn). Out of the total allocated to the free-
standing derivatives, € 103.0 bn (2016: € 110.3 bn) of the notional
principal relate to annuity products. Annuity products are equity-
indexed or contain certain embedded options or guarantees which
are considered embedded derivatives under IAS 39. For these em-
bedded derivatives, the notional principal amounts included in the
table refer to the account value of the related insurance contracts.
The total negative fair value of these embedded derivatives amounts
to € 10.2 bn (2016: € 9.9 bn). Further information on the fair value
measurement of these derivatives can be found in note 34.
34_ Fair values and carrying amounts
of financial instruments
DERIVATIVE FINANCIAL INSTRUMENTS USED IN
ACCOUNTING HEDGES
FAIR VALUE HEDGES
The Allianz Group uses fair value hedges to hedge the exposure to
changes in the fair value of financial assets due to movements in
interest or exchange rates and to hedge its equity portfolio against
equity market risk. As of 31 December 2017, the derivative financial
instruments used for the related fair value hedges of the
Allianz Group had a total positive fair value of € 12 mn (2016: total
negative € 28 mn).
CASH FLOW HEDGES
During the year ended 31 December 2017, cash flow hedges were
used to hedge the exposure to the variability of cash flows arising
Annual Report 2017 - Allianz Group
125
D_Consolidated Financial Statements
from interest rate or exchange rate fluctuations as well as inflation. As
of 31 December 2017, the derivative instruments utilized had a total
positive fair value of € 229 mn (2016: € 540 mn).
HEDGE OF NET INVESTMENT IN FOREIGN
OPERATIONS
As of 31 December 2017, the Allianz Group hedges part of its foreign
currency net investments through the issuance of several foreign
currency denominated liabilities and the use of forward sales. The
total positive fair value in 2017 was € 149 mn (2016: € 6 mn).
OFFSETTING
As of 31 December 2017, derivatives which form part of hedge ac-
counting relationships, which are included in the line items other
assets and other liabilities, had a notional amount of € 22.1 bn (2016:
€ 17.3 bn) as well as a positive fair value of € 538 mn (2016:
€ 677 mn) and a negative fair value of € 147 mn (2016: € 159 mn).
These hedging instruments mainly include interest rate forwards with
a total positive fair value of € 216 mn (2016: € 422 mn).
Financial assets designated at fair value through income
5,101
5,101
119,141
111,325
111,325
Derivative financial instruments and firm commitments included in other assets
538
538
677
677
FINANCIAL LIABILITIES
Financial liabilities held for trading
11,291
119,141
11,291
11,271
Liabilities to banks and customers
12,746
12,759
13,038
13,062
Financial liabilities for unit-linked contracts
119,141
119,141
111,325
111,325
11,271
Financial assets for unit-linked contracts
124,422
105,369
5,426
5,426
Available-for-sale investments
Held-to-maturity investments
520,397
520,397
512,268
512,268
2,678
2,992
2,399
2,805
Investments in associates and joint ventures
9,010
11,059
7,161
9,031
Real estate held for investment
11,419
18,913
11,732
18,380
Loans and advances to banks and customers
104,224
119,934
75,208
Current income taxes
21,770
5
(10,565)
Exchange-traded
75,736
959
76,695
270
(26)
60,329
428
(32)
Subtotal
931
285,138
11,046
298,984
1,445
(11,044)
258,999
1,359
(10,597)
Foreign exchange contracts
OTC
57,947
943
2,800
1,076
198,670
1,175
(123)
118,640
1,201
(275)
Exchange-traded
11,952
11,952
12,933
Subtotal
20,190
16,060
(11,018)
62,258
691
(123)
131,573
1,201
(275)
Equity/Index contracts
OTC
209,402
1,841
11,046
222,289
98,508
59,966
835
(262)
3,843
Subtotal
1,397
1,936
828
4,161
6
(8)
3,843
Real estate and other contracts
OTC
(8)
Exchange-traded
Total
5
31
36
21
1
1
6
31
37
21
Subtotal
6
4,161
828
52,628
545
(534)
Exchange-traded
25
25
8
Subtotal
57,972
943
1,076
59,991
835
835
(262)
52,636
545
(534)
Credit contracts
55
(20)
(20)
OTC
1,397
1,936
364,703
Derivative financial instruments and firm commitments included in other liabilities
(1,466)
Administrative expenses
(786)
(781)
Subtotal
Other
Subtotal
Total
(1,248)
(1,178)
(97)
(107)
(1,346)
(1,284)
Debt securities
6,546
120
Annual Report 2017 - Allianz Group
24 Fee and commission income
Fee and commission income
€ mn
2017
2016
D_Consolidated Financial Statements
Change in reserves for insurance and investment contracts (net)
€ mn
PROPERTY-CASUALTY
Fees from credit and assistance business
8,403
1,204
(397)
Equity securities
Subtotal
7,176
8,211
Interest from available-for-sale investments
13,321
14,020
Other
715
1,477
Interest from loans to banks and customers
Rent from real estate held for investment
Other
4,231
(463)
4,550
7,891
9,687
900
890
1,194
872
REALIZED LOSSES
Total
21,848
22,149
Available-for-sale investments
Subtotal
1,816
1,051
Life/Health
1,226
2016
Subtotal
1,454
1,346
Gross
(575)
ASSET MANAGEMENT
Ceded
14
(12,820)
315
1,338
(135)
329
Management and advisory fees
6,896
6,403
Net
(561)
(12,505)
(135)
(13,201)
Loading and exit fees
543
(13,530)
Property-
Casualty
Investment advisory
56
Consoli-
dation
Group
Service agreements
412
476
2017
Subtotal
1,616
1,527
Gross
(487)
(14,427)
(14,059)
LIFE/HEALTH
Service agreements
Ceded
2
61
(14,489)
63
115
120
Net
(485)
(13,998)
56
2,202
Dividends from available-for-sale investments
5,765
52,262
25,212
(130)
77,345
Ceded
(4,442)
(599)
130
(4,912)
Income from financial assets and liabilities held for
trading (net)
2,436
Gross
(2,266)
47,820
24,613
72,433
Income from financial assets and liabilities
Change in unearned premiums
(net)
designated at fair value through income (net)
300
139
(579)
(428)
(1,007)
Net
Premiums earned (net)
2016
€ mn
The Allianz Group's Own Funds as well as capital requirements
are based on the market value balance sheet approach.¹ The eligible
Group Own Funds essentially consist of the MVBS excess of assets
over liabilities plus qualifying subordinated liabilities, less foreseeable
dividends and further deductions relating to tier limits or transferabil-
ity restrictions.
Compared to year-end 2016, our Solvency II capitalization in-
creased by 11 percentage points to 229% (2016: 218%). This was
driven by an increase in Own Funds and an overall decrease in the
Solvency II capital requirement. The increase in Solvency II capitaliza-
tion ratio was mainly due to strong Solvency II earnings and favora-
ble markets that were characterized by higher interest rates, lower
credit spreads and rising equities. Model changes also contributed to
the increase of the capitalization ratio. These positive impacts were
partly offset by capital management activities like the share buy-
backs as well as the dividend accrual throughout the year. Manage-
ment actions such as the acquisition of Liverpool Victoria (LV=) and
part of the non-controlling interests of Euler Hermes, the decrease in
exposures to some government bonds and the improvement of our
interest rate risk profile had further compensating effects. Other
effects such as taxes, changes in transferability restrictions as well as
diversification effects contributed to a further reduction of the Sol-
vency Il capitalization ratio. For further information on the Solvency II
capitalization, please refer to the section "Solvency II regulatory
capitalization" of the Risk and Opportunity Report.
The Allianz Group is a financial conglomerate within the scope of
the Financial Conglomerates Directive (FCD). The FCD does not
impose a materially different capital requirement on Allianz Group
compared to Solvency II.
Insurance subsidiaries of the Allianz Group (including Allianz SE)
prepare individual financial statements based on local laws and
regulations. Local regulations establish additional restrictions on the
minimum level of capital and the amount of dividends that may be
paid to shareholders. The respective local minimum capital require-
ments are based on various criteria including, but not limited to, the
volume of premiums written or claims paid, amount of insurance
reserves, investment risks, mortality risks, credit risks, and underwriting
risks.
As of 31 December 2017, the Allianz Group believes that there
are no outstanding regulatory capital or compliance matters that
would have a material adverse effect on the financial position or the
results of operations of the Allianz Group.
Some insurance subsidiaries of the Allianz Group are subject to
regulatory restrictions on the amount of dividends which can be
remitted to Allianz SE without prior approval by the appropriate
regulatory body. Such restrictions require that a company may only
pay dividends up to an amount in excess of certain regulatory capital
levels, or based on the levels of undistributed earned surplus or cur-
rent year income or a percentage thereof. The Allianz Group believes
that these restrictions will not affect the ability of Allianz SE to pay
dividends to its shareholders in the future.
1 Own Funds and capital requirement are calculated under consideration of volatility adjustment and yield curve
extension, as described in section Risk-free rate and volatility adjustment on page 69.
Annual Report 2017 - Allianz Group
D_Consolidated Financial Statements
119
D_Consolidated Financial Statements
2017
NOTES TO THE CONSOLIDATED INCOME STATEMENTS
Premiums earned (net)
€ mn
22 _ Income from financial assets
and liabilities carried at fair value through
income (net)
Property-
Casualty
Life/Health
Consoli-
dation
Group
2017
Premiums written
Income from financial assets and liabilities
carried at fair value through income (net)
20 Premiums earned (net)
47,242
24,185
71,427
(522)
(1,073)
Premiums earned (net)
46,588
23,769
70,357
23 Realized gains/losses (net)
-
21 _ Interest and similar income
Realized gains/losses (net)
€ mn
(550)
2017
REALIZED GAINS
Interest and similar income
€ mn
Available-for-sale investments
Equity securities
2,803
2,445
2017
2016
Debt securities
4,373
2016
(net)
Change in unearned premiums
71,430
Income from financial liabilities for puttable equity
instruments (net)
(117)
6
Foreign currency gains and losses (net)¹
(3,822)
1,272
2016
Total
(1,204)
(850)
Premiums written
Gross
51,535
24,929
(134)
76,331
1_These foreign currency gains and losses arise subsequent to initial recognition on all assets and liabilities denominated
in a foreign currency that are monetary items and not measured at fair value through income.
Ceded
(4,397)
(638)
134
(4,901)
Net
47,139
24,291
485
Performance fees
437
474
Total
(1,269)
(1,306)
Subtotal
(1,509)
(1,407)
LIFE/HEALTH
Service agreements
(59)
(53)
30 Acquisition and
(362)
administrative expenses (net)
Investment advisory
(641)
(602)
Subtotal
(700)
(655)
ASSET MANAGEMENT
Commissions
Other
€ mn
Subtotal
Acquisition and administrative expenses (net)
(1,400)
(306)
(153)
121
D_Consolidated Financial Statements
29_Investment expenses
31 Fee and commission expenses
Investment expenses
Fee and commission expenses
€ mn
€ mn
2017
2016
2017
Service agreements
2016
Expenses from real estate held for investment
(724)
(735)
PROPERTY-CASUALTY
(375)
(418)
Fees from credit and assistance business
(1,202)
(1,045)
Expenses from fixed assets of renewable energy investments
(170)
Investment management expenses
(1,307)
(130)
(75)
(3,734)
Acquisition costs
(4,707)
(4,782)
Administrative expenses
(1,858)
(1,829)
Subtotal
(6,565)
(6,612)
ASSET MANAGEMENT
(3,857)
32 Income taxes
(2,378)
(2,292)
Non-personnel expenses
(1,583)
(1,522)
Income taxes
Subtotal
(3,961)
(3,815)
€ mn
CORPORATE AND OTHER
Personnel expenses
Total
LIFE/HEALTH
535
(1,530)
(1,382)
2017
2016
PROPERTY-CASUALTY
Acquisition costs
Service agreements
(1,670)
(526)
(10,278)
(10,307)
Investment advisory and banking activities
(322)
(299)
Administrative expenses
Subtotal
(3,259)
(3,044)
Subtotal
(1,992)
(825)
(13,537)
(13,352)
CONSOLIDATION
1,873
Annual Report 2017 - Allianz Group
(1,578)
(1,940)
Total
10,937
10,491
Deposits retained for reinsurance ceded
(45)
(45)
Certificated liabilities
(239)
(286)
Subordinated liabilities
(622)
(595)
Total
Other
(111)
Total
(1,149)
(1,207)
25 Claims and insurance benefits incurred (net)
Claims and insurance benefits incurred (net)
€ mn
Property-
Casualty
Consoli-
Life/Health
dation
(93)
Group
(170)
Liabilities to banks and customers
Other
28
39
Subtotal
7,904
7,401
CORPORATE AND OTHER
27 _ Interest expenses
Service agreements
1,434
330
(150)
Investment advisory and banking activities
735
Interest expenses
€ mn
Subtotal
2,349
1,066
2017
2016
CONSOLIDATION
(2,387)
(850)
916
28 Impairments of investments (net)
2017
Impairments of investments (net)
(122)
Ceded
Net
2,296
(30,576)
(22,584)
538
(76)
2,758
Subtotal
(937)
(1,683)
5
(56)
(53,156)
(72)
(46)
Non-current assets and assets of disposal groups classified
as held for sale
(233)
(315)
Subtotal
(1,242)
(2,043)
Reversals of impairments
83
103
Other
Debt securities
(55,914)
81
€ mn
Gross
(36,262)
(20,486)
104
Ceded
4,838
689
(100)
Net
(31,425)
(19,798)
5
(56,644)
5,427
(51,218)
2017
2016
Impairments
Available-for-sale investments
2016
Equity securities
(881)
(1,560)
Gross
(32,872)
(23,122)
(1,160)
147
CORPORATE AND OTHER
159
25,906
632,603
FINANCIAL LIABILITIES
Financial liabilities held for trading
34
Financial liabilities for unit-linked contracts
95,224
1,139
23,324
10,118
592
11,291
119,141
36
91,071
1,538
19,877
9,697
377
11,271
111,325
Derivative financial instruments and firm commitments
included in other liabilities
1
Financial liabilities for puttable equity instruments
2,377
146
87
Total
97,637
24,697
413,137
193,560
677
677
Subtotal
87,687
402,048
30,661
520,397
97,836
389,089
25,342
512,268
Financial assets for unit-linked contracts
95,224
23,324
175
10,886
592
91,071
19,877
377
111,325
Derivative financial instruments and firm commitments
included in other assets
1
537
Total
187,135
429,701
31,416
538
648,252
119,141
42,779
147
2,640
133,220
156
For level 3, the fair value is determined using the income or the
market approach. Valuation techniques applied for the income ap-
proach mainly include discounted cash flow models. A significant
proportion of derivative liabilities represent derivatives embedded in
certain life insurance and annuity contracts. Significant non-market
observable input parameters include mortality rates and surrender
rates. A significant decrease (increase) in surrender rates, in mortality
rates or in the utilization of annuitization benefits could result in a
higher (lower) fair value. For products with a high death benefit,
surrender rates may show an opposite effect. However, a 10% stress
of the main non-market observable inputs has only immaterial im-
pact on fair value.
Quantitative description of non-market observable input(s) used for
the level 3 portfolios
Description
Fixed-indexed annuities
Variable annuities
Non-market observable input(s)
Range
Annuitizations
0%-25%
Surrenders
0%-25%
Mortality
n/a¹
Withdrawal benefit election
Surrenders
Mortality
0%-50%
0%-35%
n/a¹
1_Mortality assumptions are mainly derived from the Annuity 2000 Mortality Table.
FINANCIAL LIABILITIES
FOR PUTTABLE EQUITY INSTRUMENTS
Financial liabilities for puttable equity instruments are generally
required to be recorded at the redemption amount with changes
recognized in income. The fair value is based on the net asset value
or the use of present value techniques.
SIGNIFICANT TRANSFERS OF FINANCIAL
INSTRUMENTS CARRIED AT FAIR VALUE
In general, financial assets and liabilities are transferred from level 1
to level 2 when their liquidity, trade frequency, and activity are no
longer indicative of an active market. In 2017, this mainly affects a
corporate bond portfolio with a transfer volume of € 12 bn. Converse-
ly, the same policy applies for transfers from level 2 to level 1.
128
Annual Report 2017 - Allianz Group
147
For level 2, the fair value is determined using the income or the
market approach. Valuation techniques applied for the income ap-
proach mainly include discounted cash flow models as well as the
Black-Scholes-Merton model. Main observable input parameters
include volatilities, yield curves observable at commonly quoted
intervals, and credit spreads observable in the market.
FINANCIAL LIABILITIES HELD FOR TRADING
This position mainly includes derivative financial instruments.
clude yield curves observable at commonly quoted intervals. The
derivatives are mainly used for hedging purposes. Certain derivatives
are priced by Bloomberg functions, such as Black-Scholes Option
Pricing or the swap manager tool.
DERIVATIVE FINANCIAL INSTRUMENTS AND FIRM
COMMITMENTS INCLUDED IN OTHER ASSETS
The fair value of the derivatives is determined using the income or the
market approach. Valuation techniques applied for the income ap-
proach mainly include present value techniques. Primary inputs in-
159
2,657
92
93,767
21,664
145
10,220
2,894
125,650
1_Quoted prices in active markets.
2 Market observable inputs.
3 Non-market observable inputs.
FINANCIAL ASSETS CARRIED
AT FAIR VALUE THROUGH INCOME
3
Financial assets held for trading
Financial assets designated at fair value through income
The fair value is mainly determined based on net asset values for
funds and the market approach.
AVAILABLE-FOR-SALE INVESTMENTS
Debt securities
Debt securities include corporate and government bonds, MBS/ABS,
and other debt securities.
Annual Report 2017 - Allianz Group
127
D_Consolidated Financial Statements
Level 3 investments are mainly priced based on the income ap-
proach. The primary non-market observable input used in the dis-
counted cash flow method is an option-adjusted spread taken from a
set of benchmark securities with similar characteristics. A significant
yield increased of the benchmark securities in isolation could result in
a decreased fair value, while a significant yield decrease could result
in an increased fair value. However, a 10% stress of the main non-
market observable inputs has only immaterial impact on fair value.
Equity securities
For level 2, the fair value is mainly determined using the market ap-
proach or net asset value techniques for funds. For certain private
equity investments, the funds are priced based on transaction prices
using the cost approach. As there are only few holders of these funds,
the market is not liquid and transactions are only known to partici-
pants.
Level 3 mainly comprise private equity fund investments as well
as alternative investments of the Allianz Group, and in most cases are
delivered as net asset values by the fund managers. The net asset
values are calculated using material, non-public information about
the respective private equity companies. The Allianz Group has only
limited insight into the specific inputs used by the fund managers and
hence a narrative sensitivity analysis is not applicable. The fund's
asset manager generally prices the underlying single portfolio com-
panies in line with the International Private Equity and Venture Capi-
tal Valuation (IPEV) guidelines using discounted cash flow (income
approach) or multiple methods (market approach). For certain in-
vestments, the capital invested is considered to be a reasonable
proxy for the fair value. In the cases, sensitivity analyses are also not
applicable.
FINANCIAL ASSETS FOR UNIT-LINKED CONTRACTS
For level 2, the fair value is determined using the market or the in-
come approach. Valuation techniques applied for the income ap-
proach mainly include discounted cash flow models as well as the
Black-Scholes-Merton model. Financial liabilities for unit-linked con-
tracts are valued based on their corresponding assets.
This position mainly includes derivative financial instruments. The fair
value of these derivatives is mostly determined based on the income
approach, using present value techniques and the Black-Scholes-
Merton model. Primary inputs for the valuation include volatilities,
interest rates, yield curves, and foreign exchange rates observable at
commonly quoted intervals. In some cases, it is determined based on
the market approach.
7,829
The valuation techniques for these debt securities are similar. The
fair value is determined using the market and the income approach.
Primary inputs for the market approach are quoted prices for identi-
cal or comparable assets in active markets where the comparability
between security and benchmark defines the fair value level. The
income approach in most cases means that a present value tech-
nique is applied where either the cash flow or the discount curve is
adjusted to reflect credit risk and liquidity risk. Depending on the
observability of these risk parameters in the market, the security is
classified as level 2 or level 3.
34,169
Fair value hierarchy (items carried at fair value)
€ mn
As of 31 December
D_Consolidated Financial Statements
2017
2016
Level 1¹
Level 22
Level 33
Total
Level 11
Level 22
Level 33
Total
FINANCIAL ASSETS
Financial assets carried at fair value through income
Financial assets held for trading
347
2,716
13
3,076
447
2,451
9
2,907
The following table presents the fair value hierarchy for financial
instruments carried at fair value in the consolidated balance sheets
as of 31 December 2017 and 2016:
Financial liabilities for puttable equity instruments.
in other assets and other liabilities, and
Derivative financial instruments and firm commitments included
159
781
Financial liabilities for puttable equity instruments
2,640
2,640
2,894
2,894
Certificated liabilities
Subordinated liabilities
9,596
10,459
7,615
Financial assets designated at fair value through income
8,530
14,757
13,530
14,256
As of 31 December 2017, fair values could not be reliably measured
for equity investments with carrying amounts totaling € 73 mn
(31 December 2016: € 100 mn). These investments are primarily
investments in privately held corporations and partnerships. During
the year ended 31 December 2017, such investments with carrying
amounts of € 39 mn (2016: € 58 mn) were sold. The gains and losses
from these disposals were immaterial.
Annual Report 2017 - Allianz Group
FAIR VALUE MEASUREMENT ON A RECURRING BASIS
The following financial assets and liabilities are carried at fair value
on a recurring basis:
-
Financial assets and liabilities held for trading,
Financial assets and liabilities designated at fair value through
income,
Available-for-sale investments,
Financial assets and liabilities for unit-linked contracts,
13,295
3,876
126
150
165,099
339
198,914
MBS/ABS
45
21,406
182
21,633
175
20,702
519
21,396
33,476
Other
899
51,158
5,169
783
1,018
2,504
4,305
Equity securities
40,247
788
1,076
10,122
694
198,911
3,577
167,449
4,205
5,101
578
1,043
178
5,426
Subtotal
3,792
162
8,177
4,652
3,494
187
8,333
4,223
Corporate bonds
15,816
211,507
16,203
243,526
29,233
201,489
244,874
14,152
Available-for-sale investments
30,884
Government and government agency bonds
36_ Related party transactions
Information on the remuneration of Board members and transactions
with these persons can be found in the Remuneration Report, starting
on > page 23.
Business relations with joint ventures and associates are set on
an arm's length basis.
132
Annual Report 2017 - Allianz Group
Transactions between Allianz SE and its subsidiaries that are to
be deemed related parties have been eliminated in the consolidation
and are not disclosed in the notes.
The carrying amounts in the tables listed above correspond to an
aggregated amortized cost amount of € 21,487 mn (2016:
€ 21,425 mn). This amortized cost amount represents the maximum
exposure to loss for the Allianz Group from these investments. In the
reporting period, the Allianz Group has not provided any financial or
other support to these entities, nor does it have the intention to pro-
vide such support in the future.
Out of the total investment fund exposure, investments of € 11.2 bn
(2016: € 10.2 bn) relate to listed investment funds, whereas invest-
ments of € 14.2 bn (2016: € 11.6 bn) relate to unlisted investment
funds.
The carrying amounts in the tables listed above correspond to
an aggregated amortized cost amount of € 21,731 mn (2016:
€ 18,279 mn). This amortized cost amount represents the maximum
exposure to loss for the Allianz Group from these investments. In the
reporting period, the Allianz Group has not provided any financial or
other support to these entities, nor does it have the intention to pro-
vide such support in the future.
As of the reporting date, the Allianz Group has receivables from
unconsolidated investment funds, which are mainly due in return for
asset management services, amounting to € 837 mn (2016:
€ 803 mn). Furthermore, the Allianz Group has commitments to invest
in private equity funds and similar financial instruments totaling
€ 15,718 mn as of 31 December 2017 (2016: € 9,640 mn).
21,846
672
574
25,352
4,561
D_Consolidated Financial Statements
3,330
Besides the above-mentioned investments in investment funds,
the Allianz Group also holds investment funds to fund unit-linked
insurance contracts. However, these holdings are held on behalf and
for the benefit of unit-linked policyholders only. For that reason, these
holdings are not included in the above-mentioned table. As of
31 December 2017, the volume of unit-linked assets amounted to
€ 119,141 mn (2016: € 111,325 mn). The maximum exposure to loss
on these investments is covered by liabilities recorded for unit-linked
contracts.
37Litigation, guarantees, and other
contingencies and commitments
In connection with the sale of various of the Allianz Group's for-
mer private equity investments, subsidiaries of the Allianz Group
provided indemnities to the respective buyers in the event that certain
contractual warranties arise. The terms of the indemnity contracts
cover ordinary contractual warranties, environmental costs, and any
potential tax liabilities the entity incurred while owned by the
Allianz Group.
Allianz Group companies are involved in legal, regulatory, and arbi-
tration proceedings in Germany and a number of foreign jurisdictions,
including the United States. Such proceedings arise in the ordinary
course of businesses, including, amongst others, their activities as
insurance, banking and asset management companies, employers,
investors and taxpayers. It is not feasible to predict or determine the
ultimate outcome of the pending or threatened proceedings. Man-
agement does not believe that the outcome of these proceedings,
including those discussed below, will have a material adverse effect
on the financial position and the results of operations of the
Allianz Group, after consideration of any applicable provision.
LEASING COMMITMENTS
The Allianz Group engages in various lending commitments to meet
the financing needs of its customers. They consist of advances, stand-
by facilities, guarantee credits, mortgage loans and public-sector
loans. As of 31 December 2017, the total of loan commitments
amounts to € 1,100 mn (2016: € 1,229 mn) and represents the
amounts at risk in the event that customers draw fully on all facilities
and then default, excluding the effect of any collateral. Since the
majority of these commitments may expire without being drawn
upon, these loan commitments are not representative of actual li-
quidity requirements for such commitments.
LOAN COMMITMENTS
COMMITMENTS
As of 31 December 2017, the performance guarantees amount
to € 50 mn (2016: € 74 mn), € 19 mn of which are due within one
year. The collateral held amounts to € 24 mn (2016: € 25 mn).
Performance guarantees are given by the Allianz Group to ensure
third-party entitlements if certain performance obligations of the
guarantee recipient are not fulfilled.
PERFORMANCE GUARANTEES
As of 31 December 2017, the indemnification contracts amount
to € 33 mn (2016: € 29 mn), € 23 mn of which are due after five years.
The collateral held amounts to € 7 mn (2016: € 5 mn). Nearly all
customers of the indemnification contracts have an external credit
rating of BBB.
Indemnification contracts are executed by the Allianz Group with
various counterparties under existing service, lease, or acquisition
transactions. Such contracts may also be used to indemnify counter-
parties under various contingencies, such as changes in laws and
regulations or litigation claims.
INDEMNIFICATION CONTRACTS
As of 31 December 2017, the financial guarantees amount to
€ 368 mn (2016: € 437 mn), € 326 mn of which are due within one
year. The collateral held amounts to € 12 mn (2016: € 44 mn). Nearly
all customers of the letters of credit have no external credit rating.
The majority of the Allianz Group's financial guarantees are issued to
customers through the normal course of banking business in return
for fee and commission income, which is generally determined based
on rates subject to the nominal amount of the guarantees and inher-
ent credit risks. Once a guarantee has been drawn upon, any amount
paid by the Allianz Group to third parties is treated as a loan to the
customer and is, therefore, basically subject to the credit risk of the
customer or the collateral pledged, respectively.
FINANCIAL GUARANTEES
The guarantees issued by the Allianz Group consist of financial guar-
antees, indemnification contracts and performance contracts.
GUARANTEES
In September 2015 and in January 2017, two separate putative
class action complaints were filed against Allianz Life Insurance
Company of North America (Allianz Life) making allegations similar
to those made in prior class actions regarding the sale of Allianz Life's
annuity products, including allegations of breach of contract and
violation of California unfair competition law. The ultimate outcome
of the cases cannot yet be determined.
On 24 May 2002, pursuant to a statutory squeeze-out procedure,
the general meeting of Dresdner Bank AG resolved to transfer shares
from its minority shareholders to Allianz as principal shareholder in
return for payment of a cash settlement amounting to € 51.50 per
share. Allianz established the amount of the cash settlement on the
basis of an expert opinion, and its adequacy was confirmed by a
court appointed auditor. Some of the former minority shareholders
applied for a court review of the appropriate amount of the cash
settlement in a mediation procedure ("Spruchverfahren"). In Septem-
ber 2013, the district court ("Landgericht") of Frankfurt dismissed the
minority shareholders' claims in their entirety. This decision has been
appealed to the higher regional court ("Oberlandesgericht") of
Frankfurt. In the event that a final decision were to determine a high-
er amount as an appropriate cash settlement, this would affect all of
the approximately 16 mn shares that were transferred to Allianz.
LITIGATION
7,333
5,032
3,886
8,030
8,337
4,587
2016
2017
2_Thereof rated AAA or AA € 19,849 mn (2016: € 19,779 mn).
1_Comprises mainly investments.
Total¹,2
Other
Credit Card
Auto
CMO/CDO
CMBS
U.S. Agency
As of 31 December
The Allianz Group occupies property in many locations under various
long-term operating leases and has entered into various operating
leases covering the long-term use of data processing equipment and
other office equipment.
€ mn
3,819
3,019
879
606
4,446
6,625
7,438
2016
2017
1_Comprises mainly investments.
Other funds
Total¹
Private equity funds
Property funds
8,333
Stock funds
As of 31 December
€ mn
Investments in investment funds by asset class
INVESTMENTS IN INVESTMENT FUNDS
5,115
21,563
3,611
21,715
206
37
Debt funds
As of 31 December 2017, the future minimum lease payments
under non-cancelable operating and finance leases were as follows:
D_Consolidated Financial Statements
133
GERMANY
Pension plans in Germany, the U.K. and Switzerland are de-
scribed in more detail regarding key risks and regulatory environ-
ment, as each of them contributes more than 5% to the
Allianz Group's defined benefit obligation or its plan assets.
In the Pension Task Force, the heads of Group HR, Group
Accounting and Reporting, Group Treasury and Corporate Finance,
Group Planning and Controlling, Group Risk and AIM met four times
to provide global governance and pre-align pension-related topics
such as risk management and Solvency II prior to relevant Group
Committee meetings.
Risks typically associated with defined benefit plans are bio-
metric risks like longevity, disability, and death as well as economic
risks such as interest rates, inflation and compensation increases.
New plans are primarily based on contributions and may include, in
some cases, guarantees such as the preservation of contributions or
minimum interest rates.
plans may vary from country to country due to the different legal,
fiscal and economic environment.
Annual Report 2017 - Allianz Group
134
The Allianz Group provides competitive and cost-effective re-
tirement and disability benefits using risk appropriate vehicles. The
Retirement benefits in the Allianz Group, which are granted to em-
ployees and in Germany also to agents, are either in the form of
defined benefit or defined contribution plans. For defined benefit
plans, the beneficiary is granted a defined benefit by the employer or
via an external entity. In contrast to defined contribution arrange-
ments, the future cost to the employer of a defined benefit plan is not
known with certainty in advance.
OVERVIEW
Allianz and HT1 Funding GmbH have signed a Contingent In-
demnity Agreement in July 2006, pursuant to which Allianz may, in
certain circumstances, be obliged to make payments to HT1 Funding
GmbH. The contingent payment obligation of Allianz relates to the
coupon payments of the Tier 1 Capital Securities issued by HT1 Fund-
ing GmbH. The original nominal amount of the Tier 1 Capital Securi-
ties of € 1,000 mn was reduced in 2012 to approximately € 416 mn.
This reduces the amount of coupon payments of the Tier 1 Capital
Securities and the contingent payment obligation of Allianz accord-
however, it remains applicable with respect to supporting measures
that are based on facts that were already existing at the time of
termination.
ary 2018, Allianz SE terminated the indemnification undertaking; 38 _ Pensions and similar obligations
The mandatory insurance guarantee scheme (Sicherungsfonds)
for health insurers levies only special contributions following the take-
over of insurance contracts. Up until the reporting date, no contribu-
tions have been requested. As of 31 December 2017, the potential
liabilities of Allianz Private Krankenversicherungs-AG for special
contributions to the insurance guarantee scheme amount to € 57 mn
(2016: € 54 mn).
The insurance guarantee scheme for life insurers levies annual
contributions and, under certain circumstances, special contributions.
As of 31 December 2017, the future liabilities of Allianz Lebensversi-
cherungs-AG and its subsidiaries to the insurance guarantee scheme
pursuant to the Sich LVFinV amount to annual contributions of
12.9 mn (2016: € 11.2 mn) and potential special contributions of, in
principle, € 170 mn (2016: € 194 mn) per year. In addition, Allianz
Lebensversicherungs-AG and some of its subsidiaries have assumed a
contractual obligation to provide, if required, further funds to
Protektor Lebensversicherungs-AG ("Protektor"), a life insurance
company that has assumed the task of the mandatory insurance
guarantee scheme for life insurers. Such obligation is, in principle,
based on a maximum of 1% of the sum of the net underwriting re-
serves with deduction of payments already provided to the insurance
guarantee scheme. As of 31 December 2017, and under inclusion of
the contributions to the mandatory insurance scheme mentioned
above for a limited period of time, and assuming that no other life
insurer is exempted from payments, the aggregate outstanding
commitment of Allianz Lebensversicherungs-AG and its subsidiaries
to the insurance guarantee scheme and to Protektor is € 1,545 mn
(2016: € 1, 755 mn).
Pursuant to §§ 221 ff. of the German Insurance Supervision Act ("Ver-
sicherungsaufsichtsgesetz" - VAG), mandatory insurance guarantee
schemes ("Sicherungsfonds") for life insurers as well as for health
insurers are implemented in Germany, which are financed through
their member undertakings.
Other commitments
Most active German employees participate in contribution-based
plans using different vehicles to cover the base salary both below
and above the German social security ceiling (GSSC). Since
1 January 2015, the Allianz Group contributes for new entrants and
for the majority of contribution-based pension plan beneficiaries
above the GSSC to the low-risk pension plan "My Allianz Pension",
where only contributions are preserved. For salaries above the GSSC,
the Allianz Group decides each year whether and to which extent a
budget for the contribution-based pension plans is provided. Inde-
pendently of this decision, an additional risk premium is paid to cover
death and disability. Generally the accruals of the contribution-based
pension plans are wholly funded, whereas the grandfathered plans
are funded to a minor extent. On retirement, the accumulated capital
is paid as a lump sum or converted to a lifetime annuity.
ingly. Since June 2017, the annual coupon is the 12-month EURIBOR
plus a margin of 2.0% p.a., the coupon payable on 30 June 2018 is
1.842% p.a. The securities have no scheduled maturity and the securi-
ty holders have no right to call for their redemption. Since June 2017,
the securities may be redeemed annually on 30 June at the option of
the issuer. Allianz expects not to be obliged to make a payment in the
foreseeable future. However, it is not possible for Allianz to predict the
ultimate payment obligations at this point in time.
Employees who joined Allianz before 1 January 2015 participate
in the Allianz Versorgungskasse VVaG (AVK), financed through em-
ployee contributions, and the Allianz Pensionsverein e.V. (APV), which
is financed by the employer. Both pension funds provide pension
benefits for the base salary up to the GSSC and are wholly funded
along local regulatory requirements and were closed to new entrants,
effective 31 December 2014. AVK and APV are legally separate
administered pension funds with trustee boards being responsible for
the investment of the assets and the risk management. AVK is subject
to German insurance regulation. The assets of the contribution-based
pension plans are allocated to a trust (Methusalem Trust e.V.) and
managed by a board of trustees. For the AVK the annual minimum
interest rate guaranteed is 1.75% - 3.50%, depending on the date of
joining the Allianz Group, and for the closed part of the contribution-
based pension plan it is 2.75%.
Pension increases apart from AVK and APV are guaranteed at
least with 1% p.a. Depending on legal requirements, some pension
Carrying amounts of ABS and MBS investments by type of category
Reconciliation of defined benefit obligation, fair value of plan assets, effect of asset ceiling, and net defined benefit balance
The following table sets out the changes in the defined benefit obli-
gation, in the fair value of plan assets, in the effect of the asset ceiling
as well as in the net defined benefit balance for the various
Allianz Group defined benefit plans:
DEFINED BENEFIT PLANS
D_Consolidated Financial Statements
135
Annual Report 2017 - Allianz Group
If employees contract out of the Allianz Suisse pension plan, they
have to take their vested pension capital ("Freizügigkeitsleistung") to
the next employer, which implies a minor liquidity risk.
In Switzerland there are obligatory corporate pension plans, eligible
for all employees. The plans are wholly funded through legally sepa-
rate trustee-administered pension funds, with the trustee board being
responsible for the investment of the assets and risk management.
The plans are contribution-based and cover the risks of longevity,
disability, and death. Employees contribute only a small amount
whereas the employer contributes for the complete risk coverage and
a large part of the savings components. The interest rate is decided
annually by the board of the pension funds. For the mandatory part,
the minimum interest rate is regulated by law and reviewed annually
(1.0% in 2017 and in 2018). At retirement, beneficiaries can choose
between a lump sum payment, an annuity, or a combination of both,
where the part which is not granted as a lump sum is converted to a
fixed annuity according to the rules of the pension fund, taking into
account legal requirements.
SWITZERLAND
The Fund provides pension increases broadly linked to U.K. infla-
tion. Since 1 July 2015, contributions to the Fund are made only by the
employer in respect of the deficit of the Fund.
The Fund is a defined benefit pension scheme. From 1 July 2015,
the Fund closed to future accrual and no more defined benefit bene-
fits are accrued beyond that date. A new Group Personal Pension
Plan (GPPP) outside of the Fund was established in 2015 and all
future accrual of benefits has been via the GPPP from 1 July 2015.
The U.K. operates a funded pension scheme, the Allianz Retirement
and Death Benefits Fund ("the Fund"). The trustee board is required
by law to act in the best interests of members and is responsible for
setting certain policies (e.g. investment and contribution policies) of
the Fund.
UNITED KINGDOM
Additionally, the Allianz Group offers a deferred compensation
program, "Pensionszusage durch Entgeltumwandlung (PZE)", for
active employees. Within some boundaries they convert at their
discretion parts of their gross income and receive in exchange a
pension commitment of equal value. PZE is qualified as a defined
benefit plan with small risk exposure.
The period in which a retirement benefit can be drawn is usually
between the ages of 60 and 67. Disability benefits are granted until
retirement pension is paid. In the case of death under the previous
plans, surviving dependents normally receive 60% (widow/widower)
and 20% (per child) of the original employee's pension, in total not to
exceed 100%. Under the "My Allianz Pension" plan, the surviving
dependents gain the accrued capital.
increases are linked to inflation. In AVK the complete surplus share of
the retirees is used to increase their pension.
There is also a partly funded defined benefit pension plan for
agents (Vertreter VersorgungsWerk, VVW), which has been closed for
new entrants as of 31 December 2011. A part of the pension plan
serves as a replacement for the compensatory claim of agents ac-
cording to German Commercial Code (§ 89b). VVW is close to a final
salary benefit plan and pension increases are broadly linked to infla-
tion.
Annual Report 2017 - Allianz Group
In accordance with § 5(10) of the Statutes of the Joint Fund for Secur-
ing Customer Deposits ("Einlagensicherungsfonds"), Allianz SE has
undertaken to indemnify the Federal Association of German Banks
("Bundesverband deutscher Banken e.V.") for any losses it may incur
by reason of supporting measures taken in favor of Oldenburgische
Landesbank AG (OLB). In connection with the sale of OLB in Febru-
Other contingencies
For the year ended 31 December 2017, rental expenses totaled
€ 333 mn (2016: € 352 mn), net of sublease rental income received of
€ 1 mn.
2,701
(276)
2,977
1,242
433
1,302
2017
Total
Subleases
Subtotal
Due after 5 years
Due after 1 year and up to 5 years
Due in 1 year or less
€ mn
Future minimum lease payments - operating leases
Operating leases
D_Consolidated Financial Statements
Finance lease
2,413
20,887
For the year ended 31 December 2017, the Allianz Group did not
record any material finance leases. The finance lease disclosed in
2016 belonged to subsidiaries that were deconsolidated during 2017.
From 2017 onwards, they are shown as joint ventures.
Purchase obligations
OTHER COMMITMENTS AND CONTINGENCIES
25,586
Total
2,470
Other significant obligations including sponsoring, maintenance
and IT services
9,640
3,979
3,240
Investment in real estate and infrastructure
15,718
Investment in private equity funds and similar instruments
4,158
Mortgage loans and multi-tranche loans
2017
4,855
2016
As of 31 December
€ mn
PURCHASE OBLIGATIONS
INTERESTS IN ASSET-BACKED SECURITIES (ABS)
AND MORTGAGE-BACKED SECURITIES (MBS) ISSUED
BY SECURITIZATION VEHICLES
5,913
Income derived from the management of investment funds in-
cludes mainly asset management fees and performance based fees.
Investment funds launched by group-internal asset managers
can be considered to be sponsored by the Allianz Group. As a spon-
sor, the Allianz Group through its asset management subsidiaries is
involved in the legal set-up and marketing of internally managed
investment funds. This may include providing seed capital to the
funds and providing administrative services to ensure the investment
funds' operation. Investment funds managed by group-internal asset
managers can be reasonably associated with the Allianz Group. The
use of the Allianz name for investment funds is another indicator that
the Allianz Group has acted as a sponsor for the respective funds.
Information on the management fees generated in the asset man-
agement business are disclosed in note 24 of this Annual Report.
81,647
7,446
152,898
71,707
74,136
7,056
124,422
38,378
80,130
€ mn
119,934
41,895
72,371
5,668
Loans and advances to banks and customers
Total
18,380
18,380
65,544
18,913
154,637
Liabilities to banks and customers
8,479
10,459
166
10,293
13,062
1,896
4,053
7,113
12,759
2,579
4,850
5,330
2 Market observable inputs.
1_Quoted prices in active markets.
Total
Subordinated liabilities
Certificated liabilities
FINANCIAL LIABILITIES
51
Real estate held for investment
8,784
Total
Level 33
Level 22
Level 1¹
2016
2017
As of 31 December
€ mn
Fair value hierarchy (items not carried at fair value)
FAIR VALUE INFORMATION ABOUT FINANCIAL ASSETS AND LIABILITIES NOT CARRIED AT FAIR VALUE
If financial assets are measured at fair value on a non-recurring
basis at the time of impairment, or if fair value less cost to sell is used
as the measurement basis under IFRS 5, corresponding disclosures
can be found in note 28.
Certain financial assets are measured at fair value on a non-recurring
basis when events or changes in circumstances indicate that the
carrying amount may not be recoverable.
FAIR VALUE MEASUREMENT ON A NON-RECURRING
BASIS
D_Consolidated Financial Statements
129
Annual Report 2017 - Allianz Group
1,469
Level 1¹
9,031
Level 2²
Total
148
99
11,059
10,898
76
85
Investments in associates and joint ventures
2,805
3
1,368
1,434
2,992
1
1,688
1,303
Held-to-maturity investments
FINANCIAL ASSETS
Level 33
8,530
5,330
14,757
29,901
NATURE, PURPOSE AND ROLE OF THE
structured entities
35 Interests in unconsolidated
As of 31 December 2017, the Allianz Group received cash collat-
eral with a carrying amount of € 243 mn (2016: € 163 mn).
In addition, as part of these transactions, the Allianz Group has
received collateral that it is permitted to sell or repledge in the ab-
sence of default. As of 31 December 2017, the Allianz Group has
received collateral, consisting of fixed income and equity securities,
with a fair value of €1,904 mn (2016: € 3,799 mn), which the
Allianz Group has the right to sell or repledge. For the years ended
31 December 2017 and 2016, no previously received collateral was
sold or repledged by the Allianz Group.
Financial assets are pledged as collateral as part of sales and repur-
chases, securities borrowing, and transactions with derivatives, under
terms that are usual and customary for such activities.
3,810
3,810
12,677
14,639
1,775
Subtotal
Total
1,768
Investments
7
Financial assets carried at fair value through income
Collaterals with right to resell or repledge
8,867
12,864
ALLIANZ GROUP IN STRUCTURED ENTITIES
Subtotal
Under IFRS 12, a structured entity is defined as an entity that has
been designed so that voting rights or similar rights are not the domi-
nant factor in deciding who controls the entity, such as when any
voting rights relate to administrative tasks only and the relevant
activities are directed by means of contractual arrangements.
entities due to its investment activities in the insurance business and
due to its asset management activities. Furthermore, structured enti-
ties are used by the Allianz Group to source out certain risks to inves-
tors as part of its reinsurance business. Generally, the classification of
an entity as a structured entity may require significant judgment.
requirements to hold investments in specific assets, market segments
or regions. Within the insurance business, policyholder money is partly
invested in investment funds, which include funds managed by
Allianz Group internal asset managers as well as funds set up and
managed by third parties. Investment funds managed or invested in
by Allianz Group may include mutual funds, special funds and other
funds.
D_Consolidated Financial Statements
131
Annual Report 2017 - Allianz Group
Within the asset management business, investment funds are estab-
lished and managed to accommodate retail and institutional clients'
FUND MANAGEMENT ACTIVITIES
With regard to investment activities, income mainly includes dis-
tributions from the funds as well as realized gains and losses from
disposals.
Investment funds are generally subject to stringent regulatory
requirements from financial authorities in all jurisdictions across the
world. Comprehensive regulation of funds protects fund investors and
also helps to limit investment risk. These mechanisms result in a legal
set-up of funds, agreed and accepted by investors and investment
managers, that may lead to a classification as structured entities
under IFRS 12.
Considering the broad variety of investment funds across different
jurisdictions, the classification of investment funds as structured enti-
ties based on the definition in IFRS 12 and current industry practice is
judgmental. As a general rule, the relevant activities of an investment
fund are dedicated to the fund manager via asset management
agreements. In contrast, influence from investors on the relevant
activities of unconsolidated funds is usually either precluded by legal
or regulatory provisions or is not deemed to be substantial.
INVESTMENTS IN INVESTMENT FUNDS
Income derived from the management of securitization vehicles
comprises asset management fees.
Within the asset management business, the Allianz Group acts
as asset manager for some securitization vehicles. The assets under
management of these vehicles amounted to € 1,462 mn as of
31 December 2017 (2016: € 1,597 mn). Some of the affected vehicles
have been set up by the Allianz Group whereas others have been set
up by third parties. In this respect, the role of the Allianz Group is
limited to asset management. The Allianz Group has not invested in
these vehicles being managed.
Income derived from investments in securitization vehicles main-
ly includes interest income generated from ABS and MBS, as well as
realized gains and losses from disposals of these securities.
Securitization vehicles invested in by the Allianz Group have
generally been set up by third parties. Furthermore, the Allianz Group
has neither transferred any assets to these vehicles nor has it provid-
ed any further credit enhancements to them.
The Allianz Group acts as investor in ABS- or MBS-issuing securitiza-
tion vehicles which purchase pools of assets including commercial
mortgage loans (CMBS), auto loans, credit card receivables and
others. These securitization vehicles refinance the purchase of assets
by issuing tranches of ABS or MBS, whose repayment is linked to the
performance of the assets held by the vehicles.
INVESTMENTS IN ASSET-BACKED SECURITIES (ABS)
AND MORTGAGE-BACKED SECURITIES (MBS) ISSUED
BY SECURITIZATION VEHICLES
In the following, the business activities involving unconsolidated
structured entities are described.
The Allianz Group engages in some business activities that in-
volve the use of entities that meet the above-mentioned definition of
structured entities. Primarily, the Allianz Group is involved with such
9
8
Other
LIABILITIES TO BANKS AND CUSTOMERS
LOANS AND ADVANCES TO BANKS AND CUSTOMERS
For loans and advances to banks and customers, quoted market
prices are rarely available. Level 1 mainly consists of highly liquid
advances, e.g. short-term investments. The fair value for these assets
in level 2 and level 3 is mainly derived based on the income approach
using deterministic discounted cash flow models.
Fair values are mostly determined using the market or the income
approach. The valuation techniques applied for the market approach
include market prices of identical or comparable assets in markets
that are not active. The fair values are either calculated internally and
validated by external experts, or derived from expert appraisals with
internal controls in place to monitor these valuations.
REAL ESTATE
INVESTMENTS IN ASSOCIATES AND JOINT VENTURES
For level 2 and level 3, fair values are mainly based on an income
approach using a discounted cash flow method or net asset values as
provided by third-party vendors.
For level 2 and level 3, the fair value is mainly determined based on
the market approach, using quoted market prices, and the income
approach using deterministic discounted cash flow models.
HELD-TO-MATURITY INVESTMENTS
3 Non-market observable inputs.
35,847
1,946
26,788
7,113
37,975
2,745
14,256
14,256
14,757
Level 1 mainly consists of highly liquid liabilities, e.g. payables on
demand. The fair value for liabilities in level 2 and level 3 is mainly
derived based on the income approach, using future cash flows
discounted with risk-specific interest rates. Main non-market observ-
able inputs include credit spreads. In some cases, the carrying
amount (amortized cost) is considered to be a reasonable estimate of
the fair value.
CERTIFICATED LIABILITIES
AND SUBORDINATED LIABILITIES
For level 2, the fair value is mainly determined based on the market
approach, using quoted market prices, and based on the income
approach, using present value techniques. For level 3, fair values are
mainly derived based on the income approach, using deterministic
cash flows with credit spreads as primary non-market observable
inputs. In some cases, the carrying amount (amortized cost) is consid-
ered to be a reasonable estimate for the fair value.
6,240
2,618
2,827
Loans and advances to banks and customers
10,029
Collaterals without right to resell or repledge
Investments
2016
2017
As of 31 December
NATURE OF RISKS ASSOCIATED WITH
UNCONSOLIDATED STRUCTURED ENTITIES
€ mn
The carrying amounts of the assets pledged as collateral are dis-
played in the following table:
ASSETS PLEDGED AND COLLATERAL
transferred in the context of repurchase agreement and securities
lending transactions are mainly available-for-sale debt and equity
securities for which substantially all of the risks and rewards are re-
tained. As of 31 December 2017, the carrying amount of the assets
transferred for securities lending transactions amounted to
€ 6,424 mn (2016: € 6,526 mn). For repurchase agreements, the carry-
ing amount of the assets transferred amounted to € 566 mn
(2016: € - mn) and the carrying amount of the associated liabilities
amounted to € 568 mn (2016: € - mn).
D_Consolidated Financial Statements
Annual Report 2017 - Allianz Group
130
As of 31 December 2017, the Allianz Group substantially retained all
the risks and rewards out of the ownership of transferred assets.
There have not been any transfers of financial assets that were de-
recognized in full or partly, in which Allianz continues to control the
transferred assets. Transfers of financial assets mainly relate to securi-
ties lending and repurchase agreement transactions. Financial assets
TRANSFERS OF FINANCIAL ASSETS
Assets pledged as collateral
Defined
benefit
(46)
Fair value
of plan
assets
0.8
Switzerland
5,470
5,551
Quoted
2.9
2.4
U.K.
Debt securities
1.4
1.4
short duration
1,683
4
5
1,769
Non-quoted
1.8
0.8
1.8
Non-quoted
2,071
914
Life insurance investment products
1.3
1.0
Rate of medical cost trend
3,121
3,369
Annuity contracts
1.5
1.3
Rate of pension increase
657
740
Real estate
1.8
1.4
Rate of compensation increase
1,875
868
long duration
Equity securities
The calculations are based on current actuarially calculated
mortality tables, projected turnover depending on age and length of
service, and internal Allianz Group retirement projections. Although
this represents the best estimate as of today, considering a further
increase in life expectancy could be reasonable. The weighted aver-
age life expectancy of a currently 65-year-old plan participant is
about 89.2 years for women and 86.8 years for men. An increase in
life expectancy by one year would lead to an increase of the defined
benefit obligation by € 705 mn.
The assumptions for the actuarial computation of the defined benefit
obligation and the recognized expense depend on the circumstances
in the particular country where the plan has been established.
ASSUMPTIONS
During the year ended 31 December 2017, the defined benefit
costs related to post-retirement health benefits amounted to € 1 mn
(2016: € 1 mn).
As of 31 December 2017, post-retirement health benefits included in
the defined benefit obligation and in the net amount recognized
amounted to € 10 mn (2016: € 10 mn) and € 10 mn (2016: € 10 mn),
respectively.
D_Consolidated Financial Statements
Annual Report 2017 - Allianz Group
136
5_As of 31 December 2017, € 5,527 mn (2016: € 8,071 mn) of the defined benefit obligation are wholly unfunded, while € 18,071 mn (2016: € 15,245 mn) are wholly or partly funded.
4_Includes for 2016 € 50 mn for the Enhanced Value Transfer program in Ireland.
3 2016 related to the reclassification of the assets and liabilities of Oldenburgische Landesbank AG as held for sale.
1 The asset ceiling is determined by taking the reduction of future contributions into account.
2_Includes for 2016 € 31 mn for the conversion rate decrease in Switzerland and for Ireland € 72 mn from the Enhanced Value Transfer program, excluding the additional contribution of € 35 mn for the new contribution based plan which was shown
under defined contribution plans.
3
(93)
32
152
116
The weighted average values of the assumptions for the
Allianz Group's defined benefit plans used to determine the defined
benefit obligation and the recognized expense are as follows:
Quoted
An increase (or decrease) in the discount rate by 50 basis points
would lead to a decrease of € 1.6 bn (or increase of € 1.8 bn) in the
defined benefit obligation.
A change in the medical cost trend rate by 100 basis points
would have an effect of € 1 mn on the defined benefit obligation and
no material effect on the defined benefit costs.
Germany
This includes the following country rates:
2016
2017
As of 31 December
1.9
1.8
€ mn
2016
2017
Asset allocation of plan assets
Discount rate
As of 31 December
%
Assumptions for defined benefit plans
Due to a well-diversified portfolio of approximately 138,000 plan
participants, there is no reasonable uncertainty of future cash flows to
be expected that could have an impact on the liquidity of the
Allianz Group. The chart below shows the asset allocation:
PLAN ASSETS/ASSET LIABILITY MANAGEMENT (ALM)
Based on the estimated future cash flows of € 740 mn for 2018,
€ 772 mn for 2019, € 780 mn for 2020, € 842 mn for 2021, € 876 mn
for 2022, and € 4,526 mn for 2023 - 2027, the weighted duration of
the defined benefit obligation is 15.7 years. Based on the liability
profiles of the defined benefit obligation and on the regulatory fund-
ing requirements, the Allianz Group uses stochastic asset liability
models to optimize the asset allocation from a risk-return perspective.
An increase of pre-retirement benefit assumptions (e.g. salary in-
crease) of 25 basis points would have an effect of € 68 mn on the
defined benefit obligation. However, the increase of post-retirement
assumptions (e.g. inflation-linked increases of pension payments) of
25 basis points would increase the defined benefit obligation by
€ 525 mn.
Other
205
175
Weighted-average fair value of options granted
Assumptions:
138
1_For further information regarding the description and the conditions of the Group Equity Incentive Plans (SARS), please
refer to the Annual Report 2016, note 41.
Assumptions of Class M-Unit plan
The following table provides the assumptions used in calculating
the fair value of the M-unit options at grant date:
The fair value of the underlying M-unit options was measured us-
ing the Black-Scholes option pricing model. Volatility was derived in
part by considering the average historical and implied volatility of a
selected group of peers. The expected life of one granted option was
calculated based on treating the three vesting tranches (one third in
years 3, 4, and 5) as three separate awards.
A maximum of 250,000 M-units are authorized for issuance un-
der the M-unit Plan.
In 2008, AllianzGI L.P. launched a new management share-based
payment incentive plan for certain senior-level executives and affili-
ates of PIMCO LLC. Participants in the plan are granted options to
acquire an own class of equity instruments (M-units), which vest in
one-third increments on approximately the third, fourth and fifth
anniversary of the option grant date. Upon vesting, options will au-
tomatically be exercised in a cashless transaction, but only if they are
in the money. Participants may elect to defer the receipt of M-units
through the M-unit Deferral Plan until termination of their service at
the latest. With the M-unit Plan, participants can directly participate
in PIMCO's performance. Class M-units are non-voting common
equity with limited information rights. They bear quarterly distribu-
tions equal to a pro-rata share of PIMCO's net distributable income.
Deferred M-units have a right to receive a quarterly cash compensa-
tion equal to and in lieu of quarterly dividend payments.
PIMCO LLC CLASS M-UNIT PLAN
As of 31 December 2017, the Allianz Group recorded provisions
of € 472 mn (2016: € 405 mn) for these RSUs in Other liabilities.
The RSUs are accounted for as cash-settled plans, as the
Allianz Group intends to settle in cash. Therefore, the Allianz Group
accrues the fair value of the RSUs as compensation expenses over
the service period of one year and afterwards over the vesting peri-
od. During the year ended 31 December 2017, the Allianz Group
recognized compensation expenses related to the AEI plans of
€ 261 mn (2016: € 113 mn).
1 The RSUs 2018 are deemed to have been granted to participants as part of their 2017 remuneration. Consequently,
the assumptions for RSU grants delivered in March 2018 are based on best estimate.
21.7
22.9
21.1
%
(0.2)
Expected return (in years)
(0.1)
Expected volatility
Risk free rate of return
Annual Report 2017 - Allianz Group
1.3
1.9
%
14.9
13.7
%
24.8
25.2
* * *
%
3.84
3.84
259.64
387.10
2016
2017
Expected dividend yield
(0.1)
%
5.4
39 Share-based compensation plans
During the year ended 31 December 2017, the Allianz Group
recognized expenses for defined contribution plans of € 267 mn
(2016: € 316 mn). Additionally, the Allianz Group paid contributions
for state pension schemes of € 331 mn (2016: € 335 mn).
Defined contribution plans are funded through independent pension
funds or similar organizations. Contributions fixed in advance (e.g.
based on salary) are paid to these institutions and the beneficiary's
right to benefits exists against the pension fund. The employer has no
obligation beyond payment of the contributions.
DEFINED CONTRIBUTION PLANS
D_Consolidated Financial Statements
137
Annual Report 2017 - Allianz Group
For the year ending 31 December 2018, the Allianz Group expects to
contribute € 281 mn to its defined benefit plans and to pay € 313 mn
directly to participants in its defined benefit plans.
CONTRIBUTIONS
In addition to the plan assets of € 14.4 bn, the Allianz Group has
dedicated assets at Group level amounting to € 8.4 bn as of
31 December 2017, which are likewise managed according to Allianz
ALM standards.
The bulk of the plan assets are held by Allianz Versorgungskasse
VVaG, Munich, which is not part of the Allianz Group. Plan assets do
not include any real estate used by the Allianz Group and include
only € 40.4 mn of own transferable financial instruments.
The range for the sensitivity calculations was derived by analyz-
ing the average volatility over a five-year period.
The discount rate assumption is the most significant risk for the
defined benefit obligation. It reflects market yields at the balance
sheet date of high-quality fixed income investments corresponding to
the currency and duration of the liabilities. In the Eurozone, the deci-
sion for the discount rate is based on AA-rated financial and corpo-
rate bonds, provided by Allianz Investment Data Services (IDS), and a
standardized cash flow profile for a mixed population. The Internal
Controls Over Financial Reporting (ICOFR) certified Allianz Global
Risk Parameters (GRIPS) methodology is an internal development of
the Nelson-Siegel model and consistently used by Group Risk, Group
Audit, AIM and PIMCO.
The recognized expense is recorded based on the assumptions of the
corresponding previous year.
14,048
14,428
Total
GROUP EQUITY INCENTIVE PLANS¹
During the year ended 31 December 2017, the Allianz Group exer-
cised the last GEI Plan consisting of SARS (Stock Appreciation Rights).
The SARS were accounted for as cash-settled plans by the
Allianz Group. During the year ended 31 December 2017 until the
exercise date, the Allianz Group recognized compensation expenses
of € 2 mn (2016: € (3) mn).
ALLIANZ EQUITY INCENTIVE PLAN
Since the 2011 grant year, the Allianz Equity Incentive plan (AEI plan)
has replaced the GEI plans. The AEI plan is granted in the form of
restricted stock units (RSUs) and is part of a new variable compensa-
tion component for the plan beneficiaries.
4.8
4.3
%
Average dividend yield
Average interest rate
Expected volatility
141.15
167.45
203.50
€
8,683
Share price
2017
2018¹
Assumption of AEI plans
The following table provides the assumptions used in calculating
the fair value of the RSUs at grant date:
The RSUs are virtual stocks without dividend payments and a
capped payout. The fair value is calculated by subtracting the net
present value of expected future dividend payments until maturity as
well as the fair value of the cap from the prevailing share price as of
the valuation date. The cap is valued as a European short call option,
using prevailing market data as of the valuation date.
In addition, upon the death of a plan participant, a change of
control or notice for operational reasons, the RSUs vest immediately
and will be exercised by the company.
The RSUs are subject to a vesting period of four years and will be
settled on the last day of the vesting period. The Allianz Group can
choose the settlement method for each unit.
The RSU granted to a plan participant obligate the
Allianz Group to pay in cash the average closing price of an
Allianz SE share on the last day of the vesting period and the prior
nine trading days, or to convert one RSU into one Allianz SE share.
The payout is capped at a 200% share price growth above the grant
price.
2016
obligation
8,761
1,382
(130)
Changes in demographic assumptions
Actuarial (gains)/losses due to
545
616
1
313
262
857
877
income statements
Expenses recognized in the consolidated
Other²
Interest income
Interest expenses
(101)
3
(9)
(313)
Changes in financial assumptions
1,382
(37)
14
(657)
(358)
657
358
(105)
145
1,382
187
(9)
(130)
Change in effect of asset ceiling in excess of interest
Return on plan assets greater/(less) than interest income on
plan assets
(105)
145
Experience adjustments
187
14
(262)
426
14,048
22,327
23,316
2017
2016
2017
Current service costs
Balance as of 1 January
(1-11+111)
III
||
balance
benefit
Net defined
ceiling¹
asset
Effect of
448
512
447
511
1
447
448
9,062
9,300
67
32
13,333
2016
2017
2016
2017
2016
(101)
3
313
262
426
(37)
Remeasurements recognized in the
consolidated statements of comprehensive
9,212
32
43
14,048
14,428
23,316
23,597
Balance as of 31 December
1
(8)
42
1
34
Changes in the consolidated subsidiaries of the Allianz
Group
(20)
(4)
(3)
9,300
(192)
thereof assets
(102)
1,407
1,353
1,271
1,641
1,614
1,793
1,730
8,926
9,366
17,609
18,126
Switzerland
Germany
U.K.
Thereof allotted to:
9,401
9,410
thereof liabilities
(198)
(240)
(213)
(241)
112
122
(334)
(276)
334
276
574
(142)
(37)
14
657
358
1,268
202
Plan participants' contributions
Employer contributions
income (before deferred taxes)
122
112
Benefits paid
(747)
Foreign currency translation adjustments
(50)
(2)
(50)
(2)
Settlement payments/assets distributed on settlement
(240)
19
43
5
(286)
37
Acquisitions and divestitures³
(287)
(291)
(413)
(456)
(700)
19
1,464
18,913
Net losses (gains) in profit or loss attributable to a change in unrealized gains or losses for financial liabilities held at the reporting
11
5,576
3,950
261
9,798
1
(262)
51
(24)
(234)
118
(1,470)
(1,155)
(14)
(2,522)
(158)
21
30
5
(102)
408
(46)
362
(32)
(417)
(448)
4
25,906
377
7,829
17,513
date
Reconciliation of level 3 financial instruments
The following tables show reconciliations of the financial instruments
carried at fair value and classified as level 3:
Reconciliation of level 3 financial assets
€ mn
D_Consolidated Financial Statements
Financial
Available-for-
assets carried
at fair value
through
sale
investments -
sale
investments -
Financial
assets for unit-
(1,231)
income
Equity
linked
securities
contracts
Total
Carrying value (fair value) as of 1 January 2017
Additions through purchases and issues
Net transfers into (out of) level 3
Disposals through sales and settlements
Net gains (losses) recognized in consolidated income statement
Net gains (losses) recognized in other comprehensive income
Impairments
Foreign currency translation adjustments
187
Debt
securities¹
(116)
Available-for-
(1,356)
377
145
930
261
23
10,220
1,215
(1)
(24)
(25)
(804)
(14)
(1)
(819)
1,555
5
1,560
(1,259)
(13)
(1,273)
Changes in the consolidated subsidiaries of the Allianz Group
8
8
10,118
592
175
(13)
10,886
9,697
Total
Carrying value (fair value) as of 31 December 2017
Financial
liabilities for
puttable
equity
instruments
Changes in the consolidated subsidiaries of the Allianz Group
(5)
13
17
162
20,539
10,122
592
31,416
Net gains (losses) in profit or loss attributable to a change in unrealized gains or losses for financial assets held at
the reporting date
6
(129)
5
Carrying value (fair value) as of 31 December 2017
1 Primarily include corporate bonds.
(118)
Financial
liabilities for
unit-linked
Foreign currency translation adjustments
Net losses (gains) recognized in other comprehensive income
Impairments
Net losses (gains) recognized in consolidated income statement
Disposals through sales and settlements
Financial
liabilities held
for trading
contracts
Additions through purchases and issues
Carrying value (fair value) as of 1 January 2017
€ mn
Net transfers into (out of) level 3
Reconciliation of level 3 financial liabilities
100.0
Fireman's Fund Financial Services LLC, Dallas, TX
100.0
Euler Hermes Korea Non-life Broker Company
Corner, NJ
Fireman's Fund Indemnity Corporation, Liberty
Lloyd Adriatico Holding S.p.A., Trieste
LLC "Risk Audit", Moscow
99.9
Limited, Seoul
100.0
LLC "Progress-Med", Moscow
Euler Hermes Japan Services Ltd., Tokyo
100.0
Financière Callisto SAS, Paris la Défense
100.0
100.0
Kong
100.0
Ferme Eolienne des Jaladeaux S.à r.l., Versailles
Euler Hermes Hong Kong Service Limited, Hong
100.0
100.0
100.0
Budapest
100.0
Fondo Chiuso Allianz Infrastructure Partners I,
Milan
LLC "Medexpress-service", Saint Petersburg
Euler Hermes North America Holding Inc., Owings
Mills, MD
100.0
Marofinac S.à r.l., Casablanca
100.0
Euler Hermes New Zealand Limited, Auckland
100.0
Inc., Honolulu, HI
100.0
Magdeburger Sigorta A.S., Istanbul
Maevaara Vind 2 AB, Stockholm
Fireman's Fund Insurance Company of Hawaii
Euler Hermes Magyar Követeleskezelő Kft.,
100.0
MAF SALP SAS, Saint-Ouen
100.0
Los Angeles, CA
100.0
Maevaara Vind AB, Stockholm
Fireman's Fund Insurance Company Corp.,
100.0
Luxembourg
Euler Hermes Luxembourg Holding S.à r.l.,
100.0
100.0
100.0
79.1
100.0
FCP LBPAM IDR, Paris
100.0
Défense
100.0
S.à r.L., Luxembourg
100.0
Eurosol Invest S.r.L., Udine
Euler Hermes Crédit France S.A.S., Paris la
Kohlenberg & Ruppert Premium Properties
100.0
Eurl 20/22 Le Peletier, Paris la Défense
100.0
Shanghai
Euler Hermes Consulting (Shanghai) Co. Ltd.,
100.0
Helsinki
100.0
Sp.k, Warsaw
Kiinteistöosakeyhtiö Eteläesplanadi 2 Oy,
100.0
Euler Hermes, Mierzejewska-Kancelaria Prawna
100.03
Königinstrasse | S.à r.L., Luxembourg
Euler Hermes Digital Ventures OPCVM, Paris la
FCT CIMU 92, Pantin
100.0
Euler Hermes Group SA, Paris la Défense
100.0
LLC "IC Euler Hermes Ru", Moscow
Ferme Eolienne de Villemur-sur-Tarn S.à r.l.,
100.0
100.0
Lincoln Infrastructure USA Inc., Wilmington, DE
Mills, MD
100.0
S.A., Madrid
Euler Hermes Excess North America LLC, Owings
Versailles
100.0
Fénix Directo Compañía de Seguros y Reaseguros
100.0
Euler Hermes Emporiki Services Ltd., Athens
99.9
La Rurale SA, Courbevoie
100.0
FCT Rocade L2 Marseille, Paris
100.0 3
Défense
100.0
Kuolavaara-Keulakkopään Tuulipuisto Oy, Oulu
LAD Energy GmbH & Co. KG, Pottenbrunn
Medi24 AG, Bern
NEXTCARE Lebanon SAL, Beirut
100.0
Top Versicherungsservice GmbH, Vienna
100.0
Adriatic Motorways d.d., Zagreb
PIMCO GP XIII LLC, Wilmington, DE
100.0 3
100.0
SA Vignobles de Larose, Saint-Laurent-Médoc
Northstar Mezzanine Partners VI U.S. Feeder II
L.P., Dover, DE
100.0
PIMCO GP XII LLC, Wilmington, DE
100.0
SA Carène Assurance, Paris
100.0
NEXtCARE Tunisie LLC, Tunis
100.0
PIMCO GP XI LLC, Wilmington, DE
100.0
Rogge Global Partners Asia Pte. Ltd., Singapore
100.0
Euler Hermes Collections Sp. z o.o., Warsaw
100.0
PIMCO GP X LLC, Wilmington, DE
100.0
42.8
Rogge Alternative Investment Company Ltd.,
London
1800 M Street Venture LP, Wilmington, DE
100.0
Three Pillars Business Solutions Limited, Guildford
100.0
Top Versicherungs-Vermittler Service GmbH,
Vienna
Company, Dublin
50.0
100.0
Tihama Investments B.V., Amsterdam
100.0
VGP European Logistics S.à r.L., Senningerberg
VISION (III) Pte Ltd., Singapore
50.0
30.07
Top Immo A GmbH & Co. KG, Vienna
100.0
Joint ventures
Waterford Blue Lagoon LP, Wilmington, DE
49.07
Top Immo Besitzgesellschaft B GmbH & Co. KG,
Vienna
114 Venture LP, Wilmington, DE
49.57
100.0
1515 Broadway Realty LP, Dover, DE
34.67
Top Logistikwerkstatt Assistance GmbH, Vienna
Associates
100.0
NEXTCARE Egypt LLC, New Cairo
100.0
PIMCO GP II S.à r.l., Luxembourg
100.0
São Bernardo do Campo
100.0
Redoma 2 S.A., Luxembourg
100.0
PIMCO GP I LLC, Wilmington, DE
Mondial Protection Corretora de Seguros Ltda.,
owned¹
owned¹
owned¹
%
%
%
D_Consolidated Financial Statements
Annual Report 2017 - Allianz Group
146
100.0
Friederike MLP S.à r.L., Luxembourg
100.0
Mombyasen Wind Farm AB, Halmstad
100.0
Fragonard Assurance S.A., Paris
100.0
Redoma S.à r.l., Luxembourg
100.0
National Surety Corporation, Chicago, IL
PIMCO GP VII LLC, Wilmington, DE
100.0
NEXTCARE Claims Management LLC, Dubai
100.0
PIMCO GP V LLC, Wilmington, DE
100.03
Rivage Richelieu 1 FCP, Paris
100.0
100.0
PIMCO GP S.à r.l., Luxembourg
2017
100.0
100.0
Nextcare Bahrain Ancillary Services Company
B.S.C., Manama
Risikomanagement und Softwareentwicklung
100.0
PIMCO GP IX LLC, Wilmington, DE
100.0
Neoasistencia Manoteras S.L., Madrid
100.0
Rhea SA, Luxembourg
100.0
PIMCO GP III LLC, Wilmington, DE
100.0
GmbH, Vienna
100.0
Euler Hermes Services South Africa Ltd.,
Ken Tame & Associates Pty Ltd., Sydney
Kensington Fund, Milan
(7,071)
9,830.11
18,163.02
14,097.57
49,161
(39,769)
(10,098)
20,043.67
10,731.45
18,952.51
20,236.85
€ mn
2017
2016
Outstanding as of
Net income attributable to shareholders - basic
Effect of potentially dilutive common shares
6,803
6,962
(3)
(22)
31 December
122,972
12,063.87
114,192
17,000.84
Exercisable as of
Net income attributable to shareholders -
diluted
6,801
6,940
31 December
Forfeited
Weighted-average number of common shares
(33,344)
49,195
Mumbai
100.0
IEELV GP S.à r.l., Luxembourg
Euler Hermes Services India Private Limited,
D_Consolidated Financial Statements
The number and weighted-average exercise price of the M-unit op-
tions outstanding and exercisable are as follows:
Reconciliation of outstanding M-unit options
Outstanding as of
2017
Number of
options
Weighted-
average
exercise price
€
Number of
options
2016
Weighted-
average
exercise price
40 Earnings per share
Earnings per share are calculated by dividing net income attributable
to shareholders by the weighted average number of common shares
outstanding. For the calculation of diluted earnings per share, nomi-
nator and denominator are adjusted for the effects of potentially
dilutive common shares. These effects arise from various share-based
compensation plans of the Allianz Group.
Earnings per share
€
1 January
114,192
17,000.84
114,898
Granted
Exercised
outstanding - basic
Potentially dilutive common shares
446,440,727
97,445
1,351
1,217
1,187
12,138
11,735
ISSUANCE OF THE DECLARATION OF COMPLIANCE
WITH THE GERMAN CORPORATE GOVERNANCE CODE
ACCORDING TO § 161 AKTG
On 14 December 2017, the Board of Management and the Supervi-
sory Board of Allianz SE issued the Declaration of Compliance ac-
cording to § 161 AktG, which has been made permanently available
to shareholders on the company's website.
Annual Report 2017 - Allianz Group
139
D_Consolidated Financial Statements
The Declaration of Compliance of the publicly traded group
company Oldenburgische Landesbank AG was issued in Decem-
ber 2017 and has been made available to shareholders on a perma-
nent basis.
PRINCIPAL ACCOUNTANT FEES AND SERVICES
KPMG AG Wirtschaftsprüfungsgesellschaft (KPMG AG) is the external
auditing firm for the Allianz Group.
For services rendered by KPMG AG and the worldwide member
firms of KPMG International (KPMG), the following fees were recog-
nized as an expense in the fiscal year:
KPMG fees
€ mn
The equity-related remuneration is comprised in 2017 of 49,385¹
(2016: 56,5722) Restricted Stock Units (RSU).
RSU with a total fair value of € 8.4 mn (2016: € 8.9 mn) were
granted to the Board of Management for the year ended
31 December 2017.
In 2017, remuneration and other benefits totaling € 8 mn (2016:
€ 7 mn) were paid to former members of the Board of Management
and dependents, while reserves for current pension obligations and
accrued pension rights totaled € 137 mn (2016: € 126 mn).
The total remuneration for all Supervisory Board members, in-
cluding attendance fees, amounted to € 2.2 mn (2016: € 2.0 mn).
Board of Management and Supervisory Board compensation by
individual is included in the Remuneration Report. The information
provided there is considered part of these consolidated financial
statements.
KPMG worldwide
thereof: KPMG AG
1,397
Social security contributions and employee assistance
Expenses for pensions and other post-retirement benefits
Total
9,197
9,524
454,699,370
2,486,025
Weighted-average number of common
shares outstanding - diluted
446,538,172
457,185,395
As of 31 December 2017, the aggregate intrinsic value of share op-
tions outstanding was € 200 mn (2016: € - mn).
As of 31 December 2017, the M-unit options outstanding have
an exercise price of between € 9,426.22 and € 19,996.67 and a
weighted-average remaining contractual life of 3.10 years.
The share options settled by delivery of PIMCO LLC shares are
accounted for as equity-settled plans by PIMCO LLC. Therefore,
PIMCO LLC measures the total compensation expense to be recog-
nized for the equity-settled shares based on their fair value as of the
grant date. The total compensation expense is recognized over the
vesting period.
During the year ended 31 December 2017, the Allianz Group
recorded compensation expenses of € 16 mn (2016: € 21 mn) related
to these share options.
EMPLOYEE STOCK PURCHASE PLANS
The Allianz Group offers Allianz SE shares in 20 countries to entitled
employees at favorable conditions. The shares have a minimum
holding period of one to five years. During the year ended
31 December 2017, the number of shares sold to employees under
these plans was 562,546 (2016: 617,084). During the year ended
31 December 2017, the Allianz Group recognized the difference
between the issue price charged to the subsidiaries of the
Allianz Group and the discounted price of the shares purchased by
employees, amounting to € 25 mn (2016: € 20 mn) as compensation
expenses.
100.0
OTHER SHARE OPTION AND SHAREHOLDING PLANS
The Allianz Group has other local share-based compensation plans,
including share option and employee share purchase plans, none of
which, individually or in the aggregate, are material to the consoli-
dated financial statements.
41 Other information
NUMBER OF EMPLOYEES
15.24
15.23
15.31
15.18
As of 31 December 2017, the Allianz Group employed 140,553 (2016:
140,253) people, thereof 40,149 (2016: 40,167) in Germany. The
average total number of employees for the year ended 31 December
2017 was 140,403.
PERSONNEL EXPENSES
Personnel expenses
€ mn
Salaries and wages
2017
2016
Basic earnings per share (€)
Diluted earnings per share (€)
Immovalor Gestion S.A., Paris la Défense
100.0
Darta Saving Life Assurance Ltd., Dublin
100.0
Euler Hermes Sigorta A.S., Istanbul
40.02
JCR Intertrade Ltd., Bangkok
55.0
Euler Hermes Acmar SA, Casablanca
100.0
100.0
Järvsö Sörby Vindkraft AB, Danderyd
Euler Hermes Serviços de Gestão de Riscos Ltda.,
São Paulo
100.0³
Euler Hermes 39 Ouest, Paris la Défense
100.0
Euler Hermes Services UK Limited, London
100.0
Etablissements J. Moneger SA, Dakar
100.0
Investitori SGR S.p.A., Milan
100.0
Euler Hermes Services Tunisia S.à r.l., Tunis
100.0
100.03
Investitori Real Estate Fund, Milan
Euler Hermes Acmar Services SARL, Casablanca
100.0
Jefferson Insurance Company Corp., New York,
NY
100.0
100.0
100.0
Euler Hermes World Agency SASU, Paris la
Défense
Company, Owings Mills, MD
Euler Hermes Collections North America
100.0
Euler Hermes Canada Services Inc., Montreal, QC
100.0
JSC Insurance Company Allianz, Moscow
100.0
Euler Hermes Taiwan Services Limited, Taipei
EP Tactical GP LLC, Wilmington, DE
100.0
100.0
Euler Hermes South Express S.A., Brussels
100.0
Euler Hermes Australia Pty Limited, Sydney
100.0
Joukhaisselän Tuulipuisto Oy, Oulu
100.0
Singapore
100.0
Euler Hermes Asset Management France S.A.,
Paris la Défense
Euler Hermes Singapore Services Pte. Ltd.,
Jouttikallio Wind Oy, Kotka
100.0
100.0
100.0
Dresdner Kleinwort Pfandbriefe Investments II
100.0
Inforce Solutions LLC, Woodstock, GA
100.0
Owings Mills, MD
100.0
Diamond Point a.s., Prague
100.0
ImWind PL GmbH & Co. KG, Pottenbrunn
Euler Hermes Services North America LLC,
100.0
Delta Technical Services Ltd., London
100.0
ImWind GHW GmbH & Co. KG, Pottenbrunn
100.0
Euler Hermes Services Italia S.r.l., Rome
50.1
Deeside Investments Inc., Wilmington, DE
100.0
ImWind AO GmbH & Co. KG, Pottenbrunn
100.0
Euler Hermes Services Ireland Limited, Dublin
100.0
Euler Hermes Services Romania S.R.L., Bucharest
100.0
Inc., Minneapolis, MN
InnovAllianz, Paris
Eolica Erchie S.r.l., Lecce
100.0³
Investitori Italian Office Fund, Milan
Triskelion Property Holding Designated Activity
100.0
100.0
Interstate Fire & Casualty Company, Chicago, IL
Energie Eolienne Lusanger S.à r.L., Versailles
100.0
Euler Hermes Services Slovensko s.r.o., Bratislava
100.0
Johannesburg
ELVIA elnvest AG, Wallisellen
Intermediass S.r.l., Milan
100.0
Euler Hermes Services Schweiz AG, Wallisellen
100.0
100.0
Insurance CJSC "Medexpress", Saint Petersburg
EF Solutions LLC, Wilmington, DE
100.0
Euler Hermes Services S.A.S., Paris la Défense
100.0
99.63
100.0
99.4
SOFE Two Ltd., Bangkok
60.0
Parc Eolien de Pliboux SAS, Versailles
100.0
SC Tour Michelet, Paris la Défense
99.93
Investimento no Exterior, Rio de Janeiro
100.0
Parc Eolien de Ly-Fontaine SAS, Versailles
52.0
Saudi NEXTCARE LLC, Al Khobar
PIMCO RAE Fundamental Global Equities Plus
Fundo de Investimento Multimercado
100.0
Parc Eolien de Longchamps SAS, Versailles
100.0
Sättravallen Wind Power AB, Strömstad
100.0
Nélausa, Paris
52.93
PIMCO RAE Fundamental Europe Fund, Dublin
100.0
Parc Eolien de la Sole du Bois SAS, Paris
SAS Société d'Exploitation du Parc Eolien de
100.0
Carteiras Ltda., Rio de Janeiro
100.0
100.0
PIMCO RAE Fundamental US Fund, Dublin
SCI 46 Desmoulins, Paris la Défense
SCI Allianz Invest Pierre, Paris la Défense
SCI Allianz Messine, Paris la Défense
37.5 23
PIMCO RealPath Blend 2055 Fund, Wilmington, DE
PIMCO REIT Management LLC, Wilmington, DE
100.0
Parc Eolien des Quatre Buissons SAS, Paris
100.0
Parc Eolien des Mistandines SAS, Paris
100.0
SCI Allianz Chateaudun, Paris la Défense
71.53
PIMCO RealPath 2055 Fund, Boston, MA
100.0
Parc Eolien des Joyeuses SAS, Versailles
100.0
SCI Allianz ARC de Seine, Paris la Défense
30.9 2.3
Boston, MA
100.0
Parc Eolien des Barbes d'Or SAS, Versailles
PIMCO Real Return Limited Duration Fund,
100.0
Parc Eolien de Remigny SAS, Versailles
100.0
90.83
Parc Eolien de Forge SAS, Paris
100.0
SAS Passage des princes, Paris la Défense
PIMCO GP XXII LLC, Wilmington, DE
100.0
Parc Eolien de Bruyère Grande SAS, Versailles
100.0
SAS Allianz Rivoli, Paris la Défense
100.0
PIMCO GP XXI-C LLC, Wilmington, DE
100.0
Parc Eolien de Bonneuil S.à r.L., Versailles
100.0
SAS Allianz Platine, Paris la Défense
100.0
PIMCO GP XXI LLC, Wilmington, DE
95.7
100.0
SAS Allianz Logistique, Paris la Défense
100.0
PIMCO GP XX LLC, Wilmington, DE
Pacific Investment Management Company LLC,
Dover, DE
100.0
SAS Allianz Forum Seine, Paris la Défense
100.0
PIMCO GP XVIII LLC, Wilmington, DE
100.0
SAS Allianz Serbie, Paris la Défense
100.0
Parc Eolien de Chaourse SAS, Versailles
PIMCO Latin America Administradora de
100.0
Parc Eolien de Fontfroide SAS, Versailles
100.0
SAS Madeleine Opéra, Paris la Défense
100.0
PIMCO Japan Ltd., Road Town
100.0
Parc Eolien de Dyé SAS, Versailles
100.0
PIMCO Investments LLC, Dover, DE
100.0
100.0
100.0
Parc Eolien de Croquettes SAS, Versailles
100.0
PIMCO GP XXIV LLC, Wilmington, DE
100.0
Parc Eolien de Chateau Garnier SAS, Versailles
90.0
SAS Angel Shopping Centre, Paris la Défense
100.0
PIMCO GP XXIII Ltd., George Town
100.0
SAS Boutique Vignoble de Larose, Saint-Laurent-
Médoc
100.0
100.0
Parc Eolien du Bois Guillaume SAS, Paris
100.0
Euler Hermes Ré SA, Luxembourg
100.0
CIC Allianz Insurance Ltd., Sydney
100.0
Euler Hermes Real Estate SPPICAV, Paris la
Défense
GamePlan Financial Marketing LLC, Woodstock,
GA
100.0
60.0
Generation Vie S.A., Courbevoie
52.5
Climmolux Holding SA, Luxembourg
100.0
Club Marine Limited, Sydney
100.0
Euler Hermes Recouvrement France S.A.S., Paris
la Défense
Genialloyd S.p.A., Milan
100.0
100.0
Gestion de Téléassistance et de Services S.A.,
COF II CIV LLC, Wilmington, DE
100.0
Euler Hermes Reinsurance AG, Wallisellen
Chicago Insurance Company Corp., Chicago, IL
100.0
99.53
100.0
100.0
Annual Report 2017 - Allianz Group
145
D_Consolidated Financial Statements
%
%
%
owned¹
owned¹
owned¹
CEPE des Portes de la Côte d'Or S.à r.l., Versailles
100.0
Euler Hermes North America Insurance Company
Inc., Owings Mills, MD
Fu An Management Consulting Co. Ltd., Beijing
1.02
100.0
CEPE du Blaiseron S.à r.L., Versailles
100.0
Fusion Company Inc., Richmond, VA
100.0
Euler Hermes Patrimonia SA, Brussels
100.0
CEPE du Bois de la Serre S.à r.l., Versailles
Gaipare Action, Paris
Chatillon
100.0
Companhia de Seguros Allianz Portugal S.A.,
Lisbon
100.0
100.0
Euler Hermes Services Bulgaria EOOD, Sofia
100.0
Helviass Verzekeringen B.V., Rotterdam
100.0
CPRN Thailand Ltd., Bangkok
100.0
Creactif Allocation, Paris
100.0³
Euler Hermes Services Ceská republika s.r.o.,
Prague
Home & Legacy Insurance Services Limited,
Guildford
100.0
100.0
Hunter Premium Funding Ltd., Sydney
100.0
Euler Hermes Services G.C.C. Limited, Dubai
100.0
CreditRas Assicurazioni S.p.A., Milan
50.02
CreditRas Vita S.p.A., Milan
50.02
100.0
100.0
Havelaar & van Stolk B.V., Rotterdam
Euler Hermes Services Belgium S.A., Brussels
Corsetec Assessoria e Corretagem de Seguros
Ltda., São Paulo
Euler Hermes Risk Yönetimi A.S., Istanbul
100.0
GIE Euler Hermes SFAC Services, Paris la Défense
100.0
64.8
Euler Hermes S.A., Brussels
100.0
Compañía Colombiana de Servicio Automotriz
S.A., Bogotá D.C.
Global Transport & Automotive Insurance
100.0
Euler Hermes Seguros de Crédito S.A., São Paulo
Euler Hermes Service AB, Stockholm
100.0
100.0
81.0
100.0
Consultatio Renta Mixta F.C.I., Buenos Aires
100.0³
Hauteville Insurance Company Limited, St Peter
Port
100.0
Corn Investment Ltd., London
100.0
Euler Hermes Services B.V., 's-Hertogenbosch
100.0
Solutions Pty Limited, Sydney
Orsa Minore PV S.r.l., Milan
100.0
SAS Allianz Etoile, Paris la Défense
100.0
Société Foncière Européenne B.V., Amsterdam
100.0
Luxembourg
100.0
Quintet Properties Ltd., Dublin
100.0
Société Nationale Foncière S.A.L., Beirut
66.0
PIMCO Global Advisors (Resources) LLC, Dover, DE
100.0
RAS Antares, Milan
100.0 ³
SOFE One Ltd., Bangkok
100.0
PIMCO Global Advisors LLC, Dover, DE
100.0
RB Fiduciaria S.p.A., Milan
100.0
100.0
PIMCO Global Holdings LLC, Dover, DE
100.0
Real Faubourg Haussmann SAS, Paris la Défense
Questar Capital Corporation, Minneapolis, MN
100.0
PIMCO Global Advisors (Luxembourg) S.A.,
d'Assistance à Domicile S.A., Paris
41.0 2.3
Q 207 GP S.à r.l., Luxembourg
100.0
Société d'Energie Eolien Cambon SAS, Versailles
100.0
PIMCO Emerging Markets Bond Fund III, George
Town
Q207 S.C.S., Luxembourg
94.0
Société d'Exploitation du Parc Eolien d'Aussac
53.63
Quality 1 AG, Bubikon
100.0
Vadalle SAS, Paris
100.0
PIMCO Europe Ltd., London
100.0
Questar Agency Inc., Minneapolis, MN
100.0
Société Européenne de Protection et de Services
PIMCO Global Advisors (Ireland) Ltd., Dublin
100.0
Questar Asset Management Inc., Ann Arbor, MI
100.0
56.0
Sofiholding S.A., Brussels
100.0
PIMCO GP I Canada Corporation, Toronto, ON
The FIZZ Student Housing Fund S.C.S.,
Luxembourg
49.57
99.6
The American Insurance Company Corp.,
RE-AA SA, Abidjan
98.5
The State-Whitehall Company LP, Dover, DE
49.97
Cincinnati, OH
100.0
SCI AVIP de Camp Laurent, Courbevoie
100.0
Tokio Marine Rogge Asset Management Ltd.,
London
50.0
The Annuity Store Financial & Insurance Services
SCI Vilaje, Courbevoie
100.0
LLC, Sacramento, CA
100.0
Top Torony Ingatlanhasznosító Zrt., Budapest
50.0
SIFCOM Assur S.A., Abidjan
Office Sénégalais de Conseils en Assurance SARL,
Dakar
100.0
TFI Allianz Polska S.A., Warsaw
99.9
100.0
Real FR Haussmann SAS, Paris la Défense
100.0
South City Office Broodthaers SA, Brussels
100.0
Annual Report 2017 - Allianz Group
147
D_Consolidated Financial Statements
%
owned¹
%
owned¹
PIMCO Covered Bond Source UCITS ETF, Dublin
%
SpaceCo S.A., Paris
100.0
ICC Evaluation SARL, Paris
100.0
StocksPLUS Management Inc., Dover, DE
100.0
Knightsbridge Allianz LP, Bartlesville, OK
99.53
Solunion Compañía Internacional de Seguros y
Reaseguros SA, Madrid
50.0
Téléservices et Sécurité "TEL2S" SARL, Chatillon
owned¹
100.0
Moulaine SAS, Versailles
100.0
Saarenkylä Tuulipuisto Oy, Oulu
PIMCO Select U.S. High Yield BB-B Bond Fund,
Dublin
32.123
SCI Allianz Value Pierre, Paris la Défense
SCI AVIP SCPI Selection, Courbevoie
49.32
100.0
Parc Eolien Les Treize SAS, Paris
100.0
Pet Plan Ltd., Guildford
PIMCO-World Bank Gemloc Fund, Luxembourg
100.0 3
SCI ESQ, Paris la Défense
75.0
100.0
PFP Holdings Inc., Dover, DE
100.0
POD Allianz Bulgaria AD, Sofia
65.9
SCI Stratus, Courbevoie
100.0
PGA Global Services LLC, Dover, DE
Primacy Underwriting Management Limited,
SCI Via Pierre 1, Paris la Défense
100.0
Ontario Limited, Toronto, ON
100.0
PIMCO GP XIV LLC, Wilmington, DE
100.0
PIMCO GP XVII LLC, Wilmington, DE
100.0
Orsa Maggiore PV S.r.l., Milan
100.0
SAS 20 pompidou, Paris la Défense
100.0
PIMCO GP XVI LLC, Wilmington, DE
100.0
Orione PV S.r.l., Milan
100.0
100.0
Los Angeles, CA
PIMCO GP XV LLC, Wilmington, DE
100.0
OPCI Allianz France Angel, Paris la Défense
San Francisco Reinsurance Company,
100.0
PIMCO GP XIX LLC, Wilmington, DE
100.0
000 Euler Hermes Credit Management, Moscow
100.0
Saint-Barth Assurances S.à r.l., St. Barts
100.0
100.0
The MI Group Limited, Guildford
100.0
100.0
PIMCO Australia Management Limited, Sydney
PT Asuransi Allianz Life Indonesia p.l.c., Jakarta
99.8
Skyred Holding 6 S.à r.l., Luxembourg
100.0
100.0
100.0
PIMCO Australia Pty Ltd., Sydney
100.0
PT Asuransi Allianz Utama Indonesia Ltd., Jakarta
97.6
SLC "Allianz Life Ukraine", Kiev
100.0
PT Blue Dot Services, Jakarta
100.0
Società Agricola San Felice S.p.A., Milan
100.0
PIMCO Canada Corp., Toronto, ON
100.0
PTE Allianz Polska S.A., Warsaw
100.0
Société de Production D'électricité D'harcourt
PIMCO COF II LLC, Wilmington, DE
100.0
PIMCO Asia Pte Ltd., Singapore
94.8
Sirius S.A., Luxembourg
SCI Volnay, Paris la Défense
100.0
PGREF V 1301 Sixth Investors I LLC, Wilmington, DE
100.0
Primacy Underwriting Management Pty Ltd.,
SDIII Energy GmbH & Co. KG, Pottenbrunn
100.0
PGREF V 1301 Sixth Investors I LP, Wilmington, DE
100.0
Melbourne
100.0
Wellington
PIMCO (Schweiz) GmbH, Zurich
Prosperaz Fundo de Investimento Renda Fixa
Silex Gas Management AS, Oslo
100.0
Crédito Privado, São Paulo
100.0
Silex Gas Norway AS, Oslo
100.0
PIMCO Asia Ltd., Hong Kong
100.0
Protexia France S.A., Paris la Défense
100.0
100.0
2016
50.0
2016
Allianz One Beacon GP LLC, Wilmington, DE
100.0 ³
Allianz Jewel Fund ICAV, Dublin
100.0
Allianz Risk Transfer AG, Schaan
100.0 ³
Allianz Offensief Mix Fonds, Rotterdam
70.13
Allianz Italia 50 Special, Milan
100.0
100.0
Allianz Risk Transfer (UK) Limited, London
Allianz of America Inc., Wilmington, DE
100.0
Luxembourg
100.0
Allianz Risk Transfer (Bermuda) Ltd., Hamilton
81.03
Allianz Obligations Internationales, Paris
Allianz Investments III Luxembourg S.A.,
100.0
Allianz Risk Consultants Inc., Los Angeles, CA
100.0
100.0
Allianz Risk Transfer Inc., New York, NY
Allianz kontakt s.r.o., Prague
100.0
Allianz SAS S.A.S., Bogotá D.C.
95.0
Allianz Pacific Aandelen Fonds, Rotterdam
Allianz Leben Real Estate Holding | S.à r.L.,
Luxembourg
100.0 3
Allianz Saint Marc CL, Paris
100.0
Allianz p.l.c., Dublin
51.0
100.0
Allianz Leasing Bulgaria AD, Sofia
Allianz S.p.A., Trieste
100.0
Allianz Opéra, Paris
100.0 3
Allianz Langlopend Obligatie Fonds, Rotterdam
100.0
Allianz S.A. de C.V., Mexico City
100.0
Allianz One Beacon LP, Wilmington, DE
100.0
100.0
100.0
Allianz New Zealand Limited, Auckland
Luxembourg
LLC, Wilmington, DE
99.83
Allianz Multi Sérénité, Paris
100.03
Allianz Invest Spezial 3, Vienna
Allianz Renewable Energy Partners of America
88.83
Allianz Multi Rendement Réel, Paris
85.03
Allianz Invest Ostrent, Vienna
100.0
100.0
90.43
Allianz Multi Rendement Premium (R), Paris
100.0
Vienna
99.03
Allianz Multi Opportunités, Paris
Allianz Invest Kapitalanlagegesellschaft mbH,
98.8
London
Allianz Renewable Energy Partners IV Limited,
Allianz Renewable Energy Partners of America 2
LLC, Wilmington, DE
100.0
Allianz Investment Management LLC,
100.0
100.0
100.0
100.0
Allianz Renewable Energy Partners VII LP, London
Allianz Renewable Energy Partners VIII Limited,
London
Allianz New Europe Holding GmbH, Vienna
Allianz Investments II Luxembourg S.à r.l.,
100.0
Luxembourg
100.0
Allianz Nederland Levensverzekering N.V.,
Rotterdam
Minneapolis, MN
Allianz Investments | Luxembourg S.à r.l.,
100.0
Allianz Renewable Energy Partners VI Limited,
London
100.0
Allianz Nederland Groep N.V., Rotterdam
Vienna
Allianz Investmentbank Aktiengesellschaft,
100.0
100.0
Allianz Renewable Energy Partners V plc., London
Allianz Mutual Funds Management Company
S.A., Athens
100.0
Allianz Partners S.A.S., Saint-Ouen
100.0
Allianz Saúde S.A., São Paulo
Reaseguros S.A., Madrid
100.0
Allianz Life Insurance Japan Ltd., Tokyo
92.43
Allianz SGD Income Fund, Singapore
Allianz Popular Vida Compañía de Seguros y
100.0
Minneapolis, MN
100.0
Allianz Services (UK) Limited, London
100.0
60.0
Allianz Life Insurance Company of North America,
96.8
Allianz Sénégal Assurances Vie SA, Dakar
100.0
Allianz Popular Pensiones EGFP S.A., Madrid
100.0
New York, NY
83.2
Allianz Sénégal Assurances SA, Dakar
Allianz Life Insurance Company of New York,
Allianz Popular S.L., Madrid
100.0
Allianz Short Duration Global Bond,
100.0
Allianz Private Equity Partners Europa II, Milan
Allianz Madagascar Assurances SA,
Allianz Sociedad Anónima A.S. Agencia de
100.0
Allianz Presse US REIT LP, Wilmington, DE
100.0
Allianz Life Luxembourg S.A., Luxembourg
100.0
Allianz SNA s.a.l., Beirut
100.0
Allianz Life Insurance Lanka Ltd., Colombo
Allianz Presse US REIT GP LLC, Wilmington, DE
Kuala Lumpur
96.2
Allianz Sigorta A.S., Istanbul
100.0
Allianz Presse Infra S.C.S., Luxembourg
Allianz Life Insurance Malaysia Berhad p.l.c.,
99.83
Senningerberg
100.0
Allianz Presse Infra GP S.à r.L., Luxembourg
100.0
Madrid
100.03
Allianz Selection Fixed Income, Senningerberg
Allianz Seguros de Vida S.A., Bogotá D.C.
90.93
Allianz Pimco Corporate, Vienna
100.0
94.63
Allianz Sécurité, Paris
100.0
Allianz penzijní spolecnost a.s., Prague
Allianz Life Assurance Company-Egypt S.A.E.,
New Cairo
88.23
100.0
Allianz Secteur Europe Immobilier, Paris
Allianz Pensionskasse Aktiengesellschaft, Vienna
100.0
Allianz Life (Bermuda) Ltd., Hamilton
95.63
Allianz Secteur Euro Immobilier, Paris
100.0
Allianz Pension Fund Trustees Ltd., Guildford
100.0
Allianz Leben Real Estate Holding II S.à r.l.,
Luxembourg
100.0
100.0
Allianz Life Financial Services LLC, Minneapolis, MN
100.0
Allianz Pimco Mortgage, Vienna
Allianz Popular Asset Management SGIIC S.A.,
100.0
Clayton, MO
100.03
Allianz Selection Alternative, Senningerberg
100.0
Allianz Polska Services Sp. z o.o., Warsaw
Allianz Life Insurance Company of Missouri,
100.0
100.03
100.0
Allianz Selectie Fonds, Rotterdam
Allianz pojistovna a.s., Prague
Allianz Life Insurance Company of Ghana Limited,
Accra
100.0
Allianz Seguros S.A., Bogotá D.C.
51.0
Allianz PNB Life Insurance Inc., Makati City
100.0
Allianz Life Insurance Company Ltd., Moscow
100.0
Allianz Seguros S.A., São Paulo
97.23
75.23
92.0
Allianz Multi Horizon Long Terme, Paris
Allianz Invest d.o.o., Zagreb
Allianz Infrastructure Luxembourg Holdco III S.A.,
Luxembourg
Allianz Global Corporate & Specialty of Africa
(Proprietary) Ltd., Johannesburg
100.0
Aktiengesellschaft, Vienna
Allianz Elementar Versicherungs-
100.0
100.0
Allianz Infrastructure Luxembourg Holdco II S.A.,
Luxembourg
Allianz Global Corporate & Specialty do Brasil
Participações Ltda., Rio de Janeiro
100.0
100.0
Aktiengesellschaft, Vienna
99.63
Allianz Global Aggregate Bond, Senningerberg
100.0
Allianz Infrastructure Luxembourg Holdco I S.A.,
Luxembourg
100.0
S.A.E., New Cairo
89.03
Allianz Global AC Equity Insights Fund, London
Allianz Egypt for Financial Investments Company
100.0
Allianz Elementar Lebensversicherungs-
Luxembourg
100.0
100.0
100.0
Luxembourg
Allianz Global Emerging Markets Equity
Dividend, Senningerberg
100.0³
Allianz Equity Large Cap EMU, Paris
100.0
Allianz Equity Investments Ltd., Guildford
Allianz Infrastructure Luxembourg II S.A.,
100.0
Ltd., Johannesburg
Allianz EM Loans S.C.S., Luxembourg
100.0 ³
100.0
Allianz Infrastructure Luxembourg I S.à r.l.,
Luxembourg
Allianz Global Corporate & Specialty South Africa
100.0
100.0
Ltd., Hamilton
Allianz Engineering Inspection Services Limited,
Guildford
100.0
Allianz Infrastructure Luxembourg Holdco IV S.A.,
Luxembourg
Allianz Global Corporate & Specialty of Bermuda
Allianz Equity Emerging Markets 1, Paris
48.0 2,3
51.0
100.0
99.63
Allianz Garantie Fonds 4,75%, Rotterdam
100.0 ³
Allianz Defensief Mix Fonds, Rotterdam
100.0³
Senningerberg
Allianz IndexManagement Wachstum,
100.03
Allianz Garantie Fonds 3%, Rotterdam
100.0 3
Allianz Individual Insurance Group LLC,
Allianz Crowdlending FSPI, Paris
100.0³
Senningerberg
Allianz Fund Investments S.A., Luxembourg
100.0 3
Allianz Crowdfunding Fund I FPCI, Paris
Allianz IndexManagement Substanz,
100.0
Allianz Fund Investments Inc., Wilmington, DE
100.0
Allianz Creactions 2, Paris
100.0
Allianz General Laos Ltd., Vientiane
Allianz Garantiefonds 3,35%, Rotterdam
Allianz Digital Corporate Ventures S.à r.l.,
Luxembourg
Allianz Edukacja S.A., Warsaw
Allianz Infrastructure Czech HoldCo II S.à r.l.,
100.0
Berhad p.l.c., Kuala Lumpur
58.73
Rotterdam
100.0
Luxembourg
Allianz General Insurance Company (Malaysia)
Allianz Duurzaam Wereld Aandelen Fonds,
100.0³
Allianz Infrastructure Czech HoldCo I S.à r.l.,
Allianz Geldmarkt Fonds, Rotterdam
100.0
Allianz do Brasil Participações Ltda., São Paulo
100.0
Allianz Informatique G.I.E., Paris la Défense
100.03
Allianz Garantiefonds 5%, Rotterdam
100.0
100.0
Minneapolis, MN
91.8³
Allianz EURECO Equity, Paris
79.33
Allianz Global Government Bond, Senningerberg
100.0 3
Allianz Invest 10 Division S/U, Vienna
Allianz Renewable Energy Management AT II
65.33
Allianz Multi Horizon 2027-2029, Paris
100.0
Allianz Inversiones S.A., Bogotá D.C.
100.0
GmbH, Pottenbrunn
Allianz Renewable Energy Management AT
Allianz Multi Horizon 2030-2032, Paris
59.23
100.0
Allianz International Ltd., Guildford
100.0
Ltd., London
52.33
Allianz Multi Horizon 2021-2023, Paris
100.0
Allianz Insurance plc, Guildford
Allianz Renewable Energy Fund Management 1
98.13
Allianz Multi Horizon 2024-2026, Paris
Allianz Multi Equilibre, Paris
100.0 ³
100.0
98.8
Allianz Renewable Energy Partners III LP, London
75.03
Allianz Multi Horizon Court Terme, Paris
86.33
Allianz Invest Cash, Vienna
100.0
100.0
Allianz Renewable Energy Partners II Limited,
London
Allianz Multi Horizon 2039-2041, Paris
GmbH, Pottenbrunn
100.0³
100.0 3
Allianz Multi Horizon 2036-2038, Paris
100.0 3
Allianz Invest 12 Division Leben/Kranken, Vienna
100.0
Allianz Renewable Energy Partners | LP, London
99.93
Allianz Multi Horizon 2033-2035, Paris
100.03
Allianz Invest 11 Division Leben/Kranken, Vienna
Allianz Invest 50, Vienna
100.0
Allianz Insurance Lanka Limited, Colombo
%
owned¹
Allianz Insurance Company of Ghana Limited,
100.0
Allianz Global Investors Distributors LLC, Dover, DE
50.23
Allianz Euro Inflation-linked Bond, Senningerberg
100.0
Allianz Infrastructure Spain Holdco II S.à r.L.,
Luxembourg
100.0
Allianz Global Investors Asia Pacific Ltd., Hong
Kong
100.0
Allianz Euro Tactique, Paris
Senningerberg
100.0
Allianz Infrastructure Spain Holdco | S.à r.l.,
Luxembourg
100.0
Shanghai
Allianz Global Investors (Shanghai) Limited,
50.23
Allianz Euro Bond Strategy, Senningerberg
100.0
Allianz Infrastructure Norway Holdco | S.à r.l.,
Luxembourg
99.83
Allianz Euro Core Infrastructure Debt GP S.à r.l.,
35.0 23
Accra
100.0
owned¹
owned¹
%
%
D_Consolidated Financial Statements
143
Annual Report 2017 - Allianz Group
95.0
Allianz Insurance Company-Egypt S.A.E., New Cairo
90.83
100.0
Allianz Global Investors Japan Co. Ltd., Tokyo
100.0
Nairobi
95.33
Allianz Europa Aandelen Fonds, Rotterdam
Allianz Europa Obligatie Fonds, Rotterdam
Allianz Insurance Company of Kenya Limited,
100.0
Allianz Global Investors Ireland Ltd., Dublin
50.13
Allianz Euroland Equity SRI, Senningerberg
100.0
Allianz Global Investors Holdings Ltd, London
100.0
100.0³
Seguros, Barcelona
Antananarivo
100.0
AWP Colombia SAS, Bogotá D.C.
100.0
Allianz Vorsorgekasse AG, Vienna
100.0
BPS Mesagne 223 S.r.l., Lecce
100.0
AWP Chile Limitada, Santiago
41.5
23
BPS Mesagne 224 S.r.l., Lecce
Allianz Volatility Strategy Fund, Senningerberg
BPS Mesagne 216 S.r.l., Lecce
51.0
AWP Brokers & Services Hellas S.A., Athens
100.0
Allianz Vie Sub Sovereign Debt FCP, Paris
100.0
BPS Mesagne 215 S.r.l., Lecce
100.0
AWP Austria GmbH, Vienna
100.0
100.0
Allianz Vie S.A., Paris la Défense
100.0
AWP Contact Center Italia S.r.l., Milan
Allianz ZB d.o.o. Company for the Management
100.0
British Reserve Insurance Co. Ltd., Guildford
100.0
AWP Health & Life Services Limited, Dublin
83.2
Allianz Zagreb d.d., Zagreb
100.0
BRAVO III CIV LLC, Wilmington, DE
100.0
Allianz Worldwide Partners (Hong Kong) Ltd.,
AWP Health & Life S.A., Saint-Ouen
Allianz Yasam ve Emeklilik A.S., Istanbul
100.0
Bravo II CIV LLC, Wilmington, DE
95.0
AWP France SAS, Saint-Ouen
100.0
Hong Kong
100.0
Brasil de Imóveis e Participações Ltda., São Paulo
100.0
80.0
of Obligatory Pension Funds, Zagreb
100.0
100.0
Wilmington, DE
100.0
Borgo San Felice S.r.l., Castelnuovo Berardenga
(Siena)
100.0
AWP Assistance (India) Private Limited, Gurgaon
Allianz US Private Credit Solutions GP LLC,
100.0
AWP Argentina S.A., Buenos Aires
100.0
Wilmington, DE
100.0
100.0
Allianz US Private Credit Solutions GP II LLC,
97.23
Avip Top Harmonie, Paris
100.0
Allianz US Investment LP, Wilmington, DE
66.0
Bilan Services S.N.C., Nanterre
99.43
Avip Top Defensif, Paris
100.0
Biuro Informacji Gospodarczej Euler Hermes S.A.,
Warsaw
BPS Mesagne 214 S.r.l., Lecce
AWP Assistance Ireland Limited, Dublin
Botanic Building SPRL, Brussels
AWP Australia Pty Ltd., Toowong
100.0
Allianz Vermogen B.V., Rotterdam
100.0
BPS Brindisi 222 S.r.l., Lecce
100.0
AWP Australia Holdings Pty Ltd., Toowong
60.73
Allianz Valeurs Durables, Paris
100.0
100.0
BPS Brindisi 213 S.r.l., Lecce
AWP Assistance UK Ltd., London
100.0
Allianz US Private REIT LP, Wilmington, DE
100.0
BPS Brindisi 211 S.r.l., Lecce
100.0
AWP Assistance Service España S.A., Madrid
100.0
Allianz US Private REIT GP LLC, Wilmington, DE
100.0
100.0
51.0
AWP Indian Ocean LLC, Ebene
100.0
100.0
AWP Services NL B.V., Amsterdam
99.23
Wilmington, DE
100.0
CEPE de Haut Chemin S.à r.l., Versailles
AllianzGI Multi Asset Opportunities LLC,
100.0
AWP Services New Zealand Limited, Auckland
100.0
CEPE de la Baume S.à r.l., Versailles
CEPE de Bajouve S.à r.L., Versailles
AllianzGI Managed Futures LLC, Wilmington, DE
100.0
AWP Services Belgium S.A., Brussels
100.0
Centrale Photovoltaique de Valensole SAS, Paris
99.33
LLC, Wilmington, DE
100.0
AWP Services (India) Private Limited, Gurgaon
AllianzGI International Small Cap Opportunities
99.23
100.0
100.0
100.0
Allianz-Slovenská DSS a.s., Bratislava
100.0
CEPE de Sambres S.à r.l., Versailles
100.0
AWP Solutions CR a SR s.r.o., Prague
100.0
AllianzGo S.r.l., Trieste
100.0
CEPE de Mont Gimont S.à r.L., Versailles
100.0
AllianzGI Real Estate Debt Fund, Boston, MA
AWP Servicios Mexico S.A. de C.V., Mexico City
Wilmington, DE
100.0
CEPE de Langres Sud S.à r.L., Versailles
100.0
AWP Services Singapore Pte. Ltd., Singapore
AllianzGI Renewable Energy Fund III (US) GP LLC,
100.0
CEPE de la Forterre S.à r.L., Versailles
100.0
AWP Services Sdn. Bhd., Kuala Lumpur
100.0
aude SAS, Paris
100.0
AWP Service Italia S.c.a.r.l., Milan
Calypso S.A., Paris la Défense
100.0
AWP P&C S.A., Saint-Ouen
84.8 3
100.0
Calobra Investments Sp. z o.o., Warsaw
100.0
AWP Mexico S.A. de C.V., Mexico City
AllianzGI Best Styles Emerging Markets Equity
Fund, Boston, MA
100.0
100.0
Bureau d'Expertises Despretz S.A., Brussels
AWP MEA Holdings Co. W.L.L., Manama
51.0
of Voluntary Pension Funds, Zagreb
100.0
BSMC (Thailand) Limited, Bangkok
100.0
AWP Japan Co. Ltd., Tokyo
Allianz ZB d.o.o. Company for the Management
100.0
Brobacken Nät AB, Stockholm
75.0
AllianzGI Emerging Markets Debt Fund, Boston, MA
42.9 23
AWP Polska Sp. z o.o., Warsaw
Centrale Photovoltaique de Saint Marcel sur
100.0³
Portfolio, Boston, MA
100.0
Central Shopping Center a.s., Bratislava
100.0
AWP Service Brasil Ltda., São Bernardo do Campo
AllianzGI Global Small-Cap Opportunity
100.0
AWP RUS LLC, Moscow
95.03
AllianzGI Global High Yield Fund, Boston, MA
93.2
Caroline Berlin S.C.S., Luxembourg
100.0
AWP Réunion SAS, Saint-Denis
95.53
Boston, MA
100.0
Wallisellen
AllianzGI Global Fundamental Strategy Fund,
CAP Rechtsschutz-Versicherungsgesellschaft AG,
100.0
99.43
100.0
100.0
Avip Top Croissance, Paris
%
%
D_Consolidated Financial Statements
Annual Report 2017 - Allianz Group
144
100.0
Allianz Suisse Lebensversicherungs-Gesellschaft
AG, Wallisellen
94.83
100.0
Senningerberg
%
Allianz Renewable Energy Fund III Lux GP S.à r.l.,
Allianz Multi Dynamisme, Paris
Allianz Multi Croissance, Paris
100.0
Allianz Suisse Immobilien AG, Wallisellen
100.0
Senningerberg
100.0 3
Allianz Mid Cap Loans FCT, Paris
98.1
Allianz Subalpina Holding S.p.A., Turin
100.0 3
Allianz Renewable Energy Fund III GP SCSP,
owned¹
owned¹
100.0
AZ Euro Investments S.à r.L., Luxembourg
100.0
Allianz Technology (Thailand) Co.,Ltd, Bangkok
100.0
MN
100.0
AZ Euro Investments II S.à r.L., Luxembourg
American Financial Marketing Inc., Minneapolis,
100.0
owned¹
100.0
100.0
American Automobile Insurance Company Corp.,
Earth City, MO
99.7
Allianz Taiwan Life Insurance Co. Ltd., Taipei
Allianz Technology B.V., Rotterdam
100.0
AWP Ticket Guard Small Amount & Short Term
Insurance Co. Ltd., Tokyo
100.0
99.6
Allianz-Slovenská poisť'ovna a.s., Bratislava
Allianz Suisse Versicherungs-Gesellschaft AG,
Wallisellen
AWP USA Inc., Richmond, VA
Ann Arbor Annuity Exchange Inc., Ann Arbor, MI
100.0
67.73
100.0
Allianz Private Equity UK Holdings Limited, London
Allianz Marine & Transit Underwriting Agency Pty
100.0
Allianz South America Holding B.V., Amsterdam
100.0
Allianz Management Services Limited, Guildford
100.0
Allianz Private Equity Partners V, Milan
100.0
Ltd., Sydney
Allianz Société Financière S.à r.l., Luxembourg
Allianz Mali Assurances SA, Bamako
100.0
Allianz Private Equity Partners IV, Milan
88.6
Allianz Sociedade Gestora de Fundos de Pensões
S.A., Lisbon
75.0
Allianz Malaysia Berhad p.l.c., Kuala Lumpur
99.63
Allianz Private Equity Partners Europa III, Milan
100.0
77.0
Mexico City
75.0
100.0
Allianz Structured Alpha US Equity 250,
Senningerberg
100.0
Allianz Real Estate of America LLC, New York, NY
Allianz México S.A. Compañía de Seguros,
100.0
Allianz Real Estate France SAS, Paris
99.9
Allianz Mena Holding Bermuda Ltd., Beirut
50.0 2.3
Allianz Strategy Select 50, Senningerberg
Allianz Properties Limited, Guildford
100.0
98.9
Allianz Maroc S.A., Casablanca
100.0
Allianz Specialised Investments Limited, London
100.0
Allianz Re Bermuda Life Ltd., Hamilton
100.0
Allianz Marine (UK) Ltd., Ipswich
100.03
Allianz Special Opportunities Alternative Fund,
Milan
Allianz Re Dublin dac, Dublin
100.0
Allianz Technology AG, Wallisellen
100.0
Allianz UK Infrastructure Debt GP 2 Limited,
London
100.0
AZOA C.V., Amsterdam
Assistance Courtage d'Assurance et de
100.0 3
Allianz UK Credit Fund, Paris
100.0
AZL PF Investments Inc., Minneapolis, MN
100.0
Asit Services S.R.L., Bucharest
Réassurance S.A., Courbevoie
97.9
55.0
AZGA Service Canada Inc., Kitchener, ON
100.0
Arges Investments II N.V., Amsterdam
100.0
100.0
AZGA Insurance Agency Canada Ltd., Kitchener,
ON
100.0
Arges Investments I N.V., Amsterdam
administrare a fondurilor de pensii private S.A.,
Bucharest
Allianz Togo Assurances SA, Lome
Allianz Tiriac Pensii Private Societate de
100.0
100.0
Allianz US Investment GP LLC, Wilmington, DE
100.0
Burbank, CA
100.0³
Avip Actions 60, Paris
Allianz Underwriters Insurance Company Corp.,
100.0
Rotterdam
100.0 3
Avip Actions 100, Paris
AZOA Services Corporation, New York, NY
100.0
Beleggingsmaatschappij Willemsbruggen B.V.,
100.0
Assurances Médicales SA, Metz
100.0
Allianz UK Infrastructure Debt GP Limited, London
100.0
AZWP Services Portugal Lda., Lisbon
100.0
Associated Indemnity Corporation, Los Angeles, CA
100.0
Allianz Ukraine LLC, Kiev
100.0
Arcalis UN, Paris
100.0
100.0
Allianz Technology S.C.p.A., Milan
100.0
AZ Jupiter 8 B.V., Amsterdam
100.0
Allianz Technology of America Inc., Wilmington, DE
100.0
APK US Investment LP, Wilmington, DE
100.0
AZ Jupiter 4 B.V., Amsterdam
APKV US Private REIT GP LLC, Wilmington, DE
100.0
APK US Investment GP LLC, Wilmington, DE
Allianz Technology International B.V., Amsterdam
97.6
AZ Jupiter 11 B.V., Amsterdam
100.0
Allianz Technology GmbH, Vienna
99.63
APEH Europe VI, Paris
100.0
AZ Jupiter 10 B.V., Amsterdam
100.0
100.0
AZ Jupiter 9 B.V., Amsterdam
100.0
AZ Vers US Private REIT LP, Wilmington, DE
52.2
Allianz Tiriac Asigurari SA, Bucharest
100.0
Arcalis Retraite S.A., Paris la Défense
100.0
AZ Vers US Private REIT GP LLC, Wilmington, DE
100.0
57.6
Appia Investments S.r.l., Milan
100.0
AZ Servisni centar d.o.o., Zagreb
100.0
Allianz Technology SAS, Paris
Allianz Technology S.p.A., Rome
100.0
APP Broker S.r.L., Trieste
100.0
AZ Real Estate GP LLC, New York, NY
100.0
APKV US Private REIT LP, Wilmington, DE
100.0
Allianz Technology S.L., Barcelona
Beykoz Gayrimenkul Yatirim Insaat Turizm Sanayi
ve Ticaret A.S., Ankara
2017
Senningerberg
Allianz IndexManagement Chance,
AZV-Argos 72 Vermögensverwaltungs-
gesellschaft mbH, Munich
100.0
Allianz Versicherungs-Aktiengesellschaft, Munich
100.03
Allianz GLU Fonds, Frankfurt am Main
100.0 3
Allianz VAE Fonds, Frankfurt am Main
100.03
Allianz GLRS Fonds, Frankfurt am Main
100.0
100.0
100.0
AZ-SGD Private Equity Fonds 2 GmbH, Munich
AZ-SGD Private Equity Fonds GmbH, Munich
AZT Automotive GmbH, Ismaning
100.0³
Allianz UGD 1 Fonds, Frankfurt am Main
100.0 ³
Allianz GLR Fonds, Frankfurt am Main
100.0
Allianz Treuhand GmbH, Stuttgart
100.0
Main
Allianz Global Investors GmbH, Frankfurt am
100.0
100.0
Allianz GRGB Fonds, Frankfurt am Main
Allianz VGI 1 Fonds, Frankfurt am Main
100.0³
Allianz V-PD Fonds, Frankfurt am Main
100.03
94.8
BrahmsQ Objekt GmbH & Co. KG, Stuttgart
100.03
Allianz VKRD Fonds, Frankfurt am Main
100.04
100.0
gesellschaft mbH, Munich
100.03
AZV-Argos 87 Vermögensverwaltungs-
Allianz VKA Fonds, Frankfurt am Main
100.0
100.0
gesellschaft mbH, Munich
100.0 3
Allianz VGL Fonds, Frankfurt am Main
100.0
Allianz Handwerker Services GmbH, Aschheim
Allianz Hirschgarten GmbH & Co. KG, Stuttgart
Allianz Investment Management SE, Munich
Allianz LAD Fonds, Frankfurt am Main
Allianz Leben Direkt Infrastruktur GmbH, Munich
AZV-Argos 82 Vermögensverwaltungs-
100.0 3
100.0 3
dbi-Fonds Ammerland, Frankfurt am Main
Allianz Technology SE, Munich
AZ-SGD Infrastrukturfonds GmbH, Munich
51.0
Allianz Esa EuroShip GmbH, Bad Friedrichshall
100.0
Allianz Esa cargo & logistics GmbH, Bad
Friedrichshall
100.0
gesellschaft mbH, Munich
100.0
Allianz Risk Consulting GmbH, Munich
100.0 3
Allianz EEE Fonds, Frankfurt am Main
Allianz SDR Fonds, Frankfurt am Main
Allianz SE-PD Fonds, Frankfurt am Main
Allianz Service Center GmbH, Munich
AZL-Argos 83 Vermögensverwaltungs-
Allianz RFG Fonds, Frankfurt am Main
100.0³
Allianz DLVR Fonds, Frankfurt am Main
100.0
gesellschaft mbH, Munich
AZL-Argos 73 Vermögensverwaltungs-
100.0
Allianz Renewable Energy Subholding GmbH &
Co. KG, Sehestedt
100.0
Allianz Deutschland AG, Munich
100.03
100.0
100.03
100.0 ³
100.0
Allianz Global Health GmbH, Munich
99.5
Allianz Taunusanlage GbR, Stuttgart
100.0
AZ-SGD Direkt Infrastruktur GmbH, Munich
100.0
Allianz Global Corporate & Specialty SE, Munich
100.0
Allianz Stromversorgungs-GmbH, Munich
AZRE AZD P&C Master Fund, Munich
100.0
100.0
Allianz Finanzbeteiligungs GmbH, Munich
100.0 3
Allianz SOA Fonds, Frankfurt am Main
100.0 3
Allianz FAD Fonds, Frankfurt am Main
100.0
100.0
AZS-Arges Vermögensverwaltungsgesellschaft
mbH, Munich
100.03
AZ-SGD Classic Infrastrukturfonds GmbH,
Munich
100.0 3
100.0
Allianz VSR Fonds, Frankfurt am Main
AGF FCR, Paris
KomfortDynamik Sondervermögen, Frankfurt am
Allianz zweite Objektbeteiligungs-GmbH,
100.0
100.0
AGCS Resseguros Brasil S.A., São Paulo
AGF Benelux S.A., Luxembourg
100.0
Kaiser X Labs GmbH, Munich
100.0
Allianz Pension Consult GmbH, Stuttgart
100.03
100.0
Allianz Objektbeteiligungs-GmbH, Stuttgart
inSphere GmbH, Munich
100.0
AGCS Marine Insurance Company, Chicago, IL
100.0
100.0
100.0
AGCS International Holding B.V., Amsterdam
55.3
AERS Consortio Aktiengesellschaft, Stuttgart
Allianz Global Benefits GmbH, Stuttgart
100.0
IDS GmbH - Analysis and Reporting Services,
Munich
Stuttgart
Main
100.03
AIM Equity Europe PG Vie, Paris
70.8
Infrastruktur Putlitz Ost GmbH & Co. KG, Husum
100.0
Lola Vermögensverwaltungsgesellschaft mbH &
Co. KG, Munich
100.0³
AIM Equity Europe Cantons, Paris
100.0
Versicherungen mbH, Munich
100.0
33.3
100.0
Vertriebsmanagement GmbH, Halle (Saale)
100.0
AGF Inversiones S.A., Buenos Aires
KVM ServicePlus - Kunden- und
100.0
100.0
AGF Holdings (UK) Limited, Guildford
AZ Beteiligungs-Management GmbH, Munich
84.83
Grundstücksgesellschaft der Vereinten
100.0
100.0
AGA Sigorta Aracilik Hizmetleri LS, Istanbul
Donator Beteiligungsverwaltung GmbH, Munich
100.0³
AllianzGI-Fonds Rogge, Frankfurt am Main
Allianz Leben Private Equity Fonds 2001 GmbH,
Munich
100.0
Donator Beratungs GmbH, Munich
100.0
Allianz X GmbH, Munich
100.0
100.0
100.0
Aktiengesellschaft, Berlin
Allianz Warranty GmbH, Unterföhring
Allianz Leben Private Equity Fonds 1998 GmbH,
Munich
Deutsche Lebensversicherungs-
100.0 3
Allianz VW AV Fonds, Frankfurt am Main
100.0
Allianz Leben Infrastrukturfonds GmbH, Munich
100.03
dbi-Fonds WE, Frankfurt am Main
100.0 3
100.0
100.0
AllSecur Deutschland AG, Munich
100.0
Non-consolidated affiliates
GA Global Automotive Versicherungsservice
GmbH, Halle (Saale)
97.0
97.6
100.0
AGA Service Company Corp., Richmond, VA
AGA Services (Thailand) Co. Ltd., Bangkok
AGA Servis Hizmetleri A.S., Istanbul
95.0
Euler Hermes Rating Deutschland GmbH,
Hamburg
100.0
Windpark Werder Zinndorf GmbH & Co. KG,
Sehestedt
100.0
Euler Hermes Collections GmbH, Potsdam
owned¹
owned¹
owned¹
%
%
%
D_Consolidated Financial Statements
141
Annual Report 2017 - Allianz Group
100.0
Euler Hermes Aktiengesellschaft, Hamburg
100.0
META Finanz-Informationssysteme GmbH, Munich
AZL PE Nr. 1 GmbH, Munich
Allianz Climate Solutions GmbH, Munich
100.0
100.0
APKV Direkt Infrastruktur GmbH, Munich
ACP Vermögensverwaltung GmbH & Co. KG
Nr. 4, Munich
100.0
Stuttgart
100.0
gesellschaft mbH, Munich
Allianz Lebensversicherungs-Aktiengesellschaft,
0.02
Allianz LFE Fonds, Frankfurt am Main
ACP GmbH & Co. Beteiligungen KG II, Munich
100.0
100.0
abracar GmbH, Munich
Munich
100.0
gesellschaft mbH, Munich
Allianz Leben Private Equity Fonds Plus GmbH,
APK-Argos 75 Vermögensverwaltungs-
100.0
100.0
APK-Argos 85 Vermögensverwaltungs-
APK Infrastrukturfonds GmbH, Munich
100.0 3
100.0
100.0
100.0
gesellschaft mbH, Munich
100.0
Allianz Pension Partners GmbH, Munich
ACP Vermögensverwaltung GmbH & Co. KG
Nr. 4d, Munich
APKV-Argos 84 Vermögensverwaltungs-
100.0
100.0
gesellschaft mbH, Munich
APKV Infrastrukturfonds GmbH, Munich
Allianz Pension Direkt Infrastruktur GmbH,
Munich
ACP Vermögensverwaltung GmbH & Co. KG
Nr. 4c, Munich
APKV-Argos 74 Vermögensverwaltungs-
100.0
Allianz of Asia-Pacific and Africa GmbH, Munich
100.0
100.0
APKV Private Equity Fonds GmbH, Munich
100.0³
Allianz L-PD Fonds, Frankfurt am Main
ACP Vermögensverwaltung GmbH & Co. KG
Nr. 4a, Munich
100.0
Allianz Pension Service GmbH, Munich
Allianz Leben Private Equity Fonds 2008 GmbH,
Munich
GERMANY
64.6
57.9
4.8
7.5
8.7
10.6
Other services
Total
0.6
0.9
1.5
23.9
1.4
4.8
2.6
6.4
4.8
Other attestation services
14.7
12.9
48.0
41.0
Audit services
Tax services
Consolidated affiliates
24.9
Other attestation services refer to statutory filing services for
regulatory purposes, the issuing of comfort letters and statutory or
contractually agreed assessments, as well as required audits of funds,
including contractually agreed assurance services.
owned¹
owned¹
owned¹
%
%
%
43 List of participations of the Allianz Group as of 31 December 2017 according to § 313 (2) HGB
D_Consolidated Financial Statements
Annual Report 2017 - Allianz Group
140
Audit services by KPMG AG primarily relate to services rendered for
the audit of the Allianz Group's consolidated financial statements as
well as the audit of the statutory financial statements of Allianz SE
and its subsidiaries, including the statutory audit scope extensions
required by law (e.g. Solvency II). In addition, reviews of interim finan-
cial statements, project-related IT audits as well as contractual re-
views on the effectiveness of controls of service companies were
performed.
2_The disclosure in the Annual Report 2016 was based on a best estimate of the RSU grants. The figures shown here for
2016 now includes the actual fair value as of the grant date (3 March 2017). The value therefore differs from the
amount disclosed last year.
For further information on both events please refer to note 3.
Furthermore, beginning 2018 Allianz SE has started a new share
buy-back program with a volume of up to € 2.0 bn. For further infor-
mation, please refer to the section "Expected dividend development"
of the chapter Outlook 2018 within the Group Management Report.
Moreover, the Allianz Group reached an agreement to sell a part
of its traditional life insurance portfolio, held by Allianz Taiwan Life
Insurance Co. Ltd., Taipei, to China Life Insurance Co. on
19 October 2017. This transaction has received regulatory approval
on 27 February 2018. The closing is expected for the second quarter
of 2018. The transaction includes a portfolio with insurance liabilities
of around € 1.2 bn. Allianz Group expects a negative net income
effect of around € 0.2 bn in 2018.
In addition, the sale of the Allianz shares in Oldenburgische
Landesbank AG was completed on 7 February 2018.
On 15 January 2018, Allianz launched a simplified cash tender offer
to acquire all outstanding Euler Hermes shares which expired on
13 February 2018. As of 23 February 2018, the remaining float on the
market represented less than 5% of Euler Hermes share capital. In
continuation with its initial tender offer, Allianz intends to launch a
further simplified cash tender offer for all remaining Euler Hermes
shares held by minority shareholders, which will be immediately
followed by a squeeze-out procedure and delisting of Euler Hermes
shares from the Euronext Paris stock exchange. The consideration for
one Euler Hermes share will remain unchanged from the prior tender
offer and will be € 122 in cash.
42 Subsequent events
2018 and excluding the pension service cost, amounts to
€ 24 mn (2016: € 26 mn).
The sum of the total remuneration of the Allianz SE Board of
Management for 2017, excluding the notional accruals of the MTB
2016
As of 31 December 2017, the Board of Management is comprised of
nine members. The following values reflect the full Board of Man-
agement active in the respective year.
REMUNERATION FOR THE BOARD OF MANAGEMENT
AND THE SUPERVISORY BOARD
Other services primarily refer to quality assurance support ser-
vices and consulting services in connection with current developments
in financial reporting and regulatory requirements based on con-
cepts/solutions presented by the Allianz Group. In addition, IT quality
assurance and advisory on non-financial information systems and
forensic advisory services were provided. In respect to the other ser-
vices, significant quality assurance services in relation to the initial
application of new/prospective accounting standards such as IFRS 17
and IFRS 9 application were provided.
Tax services primarily include support in the preparation of tax
returns and advice on individual matters. In respect to tax services,
significant tax advice services in relation to the German Investment
Tax Reform were provided.
1_The relevant share price used to determine the final number of RSUs granted is only available after the sign-off of the
Annual Report by the external auditors, thus numbers are based on a best estimate.
100.0
ARE Funds APKV GmbH, Munich
100.0
AZ-Argos 58 Vermögensverwaltungsgesellschaft
mbH & Co. KG, Munich
Allianz AZL Vermögensverwaltung GmbH & Co.
100.0³
Allianz PV-RD Fonds, Frankfurt am Main
100.0
Allianz Asset Management GmbH, Munich
100.0
mbH, Munich
100.03
Allianz PV WS Fonds, Frankfurt am Main
100.0
100.0
AZ-Argos 56 Vermögensverwaltungsgesellschaft
100.0
Allianz PV 1 Fonds, Frankfurt am Main
100.0³
Allianz APAV Fonds, Frankfurt am Main
100.0
AZ-Argos 41 Vermögensverwaltungsgesellschaft
mbH, Munich
100.0
Allianz ProzessFinanz GmbH, Munich
100.0³
Allianz Argos 14 GmbH, Munich
Allianz ALIK Fonds, Frankfurt am Main
Allianz Re Asia, Frankfurt am Main
KG, Munich
100.0
100.0
AZL AI Nr. 1 GmbH, Munich
Allianz Renewable Energy Management GmbH,
Sehestedt
100.0
Allianz Capital Partners Verwaltungs GmbH,
Munich
100.0
mbH & Co. KG, Munich
100.0
Allianz Rechtsschutz-Service GmbH, Munich
100.0 3
AZ-GARI Vermögensverwaltungsgesellschaft
Allianz Capital Partners GmbH, Munich
100.0
Allianz Real Estate GmbH, Munich
100.0
AZ-Argos 71 Vermögensverwaltungsgesellschaft
mbH & Co. KG, Munich
100.0
Allianz Beratungs- und Vertriebs-AG, Munich
100.0
Allianz Real Estate Germany GmbH, Stuttgart
100.0
100.04
100.0
100.0
mbH, Munich
Atropos Vermögensverwaltungsgesellschaft
100.03
Allianz PK-PD Fonds, Frankfurt am Main
AGCS-Argos 86 Vermögensverwaltungs-
100.0
100.0
atpacvc GmbH, Munich
Stuttgart
100.0
gesellschaft mbH, Munich
gesellschaft mbH, Munich
Allianz Pensionskasse Aktiengesellschaft,
100.0
ARE Funds AZV GmbH, Munich
100.0
100.0
ARE Funds AZL GmbH, Munich
Allianz Pensionsfonds Aktiengesellschaft,
Stuttgart
100.0
AGCS Infrastrukturfonds GmbH, Munich
79.6
ADEUS Aktienregister-Service-GmbH, Munich
AGCS-Argos 76 Vermögensverwaltungs-
100.0
mbH, Munich
100.0
Aktiengesellschaft, Munich
100.0³
Allianz ALD Fonds, Frankfurt am Main
AZ-Arges Vermögensverwaltungsgesellschaft
Allianz Private Krankenversicherungs-
100.0³
Allianz AKR Fonds, Frankfurt am Main
100.0
100.0
AWP Service Deutschland GmbH, Aschheim
Allianz Private Equity Partners Verwaltungs
GmbH, Munich
100.0³
Allianz AADB Fonds, Frankfurt am Main
100.0
Auros II GmbH, Munich
100.0
Allianz Private Equity GmbH, Munich
94.8
100.0
Auros GmbH, Munich
Alida Grundstücksgesellschaft mbH & Co. KG,
Hamburg
100.0 3
Allianz PKV-PD Fonds, Frankfurt am Main
100.0
100.0
100.0
100,0 5,6
100.0
Allianz Finance II B.V., Amsterdam
66.2
Allianz Bulgaria Holding AD, Sofia
100.0
Allianz Global Investors Taiwan Ltd., Taipei
100.0
Allianz Finance Corporation, Wilmington, DE
100.0 3
Allianz Bonds Euro High Yield, Paris
Allianz Global Investors U.S. Holdings LLC, Dover,
100.0
Allianz Global Investors Singapore Ltd.,
40.5 2,3
Allianz European Equity Dividend, Senningerberg
100.0 3
Allianz Bonds Diversified Euro, Paris
100.0
100.0
Allianz Global Investors Schweiz AG, Zurich
100.0
Allianz Global Investors Nominee Services Ltd.,
George Town
Singapore
99.33
Allianz Burkina Assurances SA, Ouagadougou
Allianz Finance II Luxembourg S.à r.l.,
100.0
Allianz Global Risks US Insurance Company
Corp., Chicago, IL
100.0
Luxembourg
100.0
Allianz business services s.r.o., Bratislava
Allianz Finance IV Luxembourg S.à r.L.,
100.0
Allianz Business Services Limited, Lancaster
100.0
60.3
Allianz Global Life dac, Dublin
Allianz Finance III B.V., Amsterdam
71.8
Ouagadougou
100.0
Allianz Global Investors U.S. LLC, Dover, DE
100.0
Luxembourg
Allianz Burkina Assurances Vie SA,
100.0
DE
100.0
Allianz C.P. General Insurance Co. Ltd., Bangkok
Allianz Europe Conviction Equity, Senningerberg
Allianz Europe Ltd., Amsterdam
Allianz Bénin Assurances SA, Cotonou
100.0
AGA Assistance Beijing Services Co. Ltd., Beijing
Windpark Waltersdorf GmbH & Co. KG
100.0
Aero-Fonte S.r.l., Catania
100.0
Sehestedt
Windpark Schönwalde GmbH & Co. KG,
100.0
Allianz Aviation Managers LLC, Burbank, CA
Allianz Ayudhya Assurance Public Company
Limited, Bangkok
100.0
100.03
Allianz Australian Real Estate Trust, Sydney
Advanz Fundo de Investimento Renda Fixa
100.0
Sehestedt
Windpark Redekin-Genthin GmbH & Co. KG,
100.0
(Victoria) Limited, Melbourne
100.0
490 Lower Unit LP, Wilmington, DE
Crédito Privado, São Paulo
83.5
62.6
100.0
100.0
Allianz Benelux S.A., Brussels
100.0
Allianz Europe B.V., Amsterdam
100.0
Allianz Banque S.A., Puteaux
owned¹
owned¹
owned¹
%
Renditefonds, Sehestedt
%
D_Consolidated Financial Statements
Annual Report 2017 - Allianz Group
142
100.0
Allianz Bank Financial Advisors S.p.A., Milan
100.0
Bangkok
99.9
Allianz Bank Bulgaria AD, Sofia
AGA Insurance Broker (Thailand) Co. Ltd.,
%
100.0
Allianz Finance Pty Ltd., Sydney
100.0
100.0
Allianz France S.A., Paris la Défense
99.9
100.0
Allianz HY Investor LP, Wilmington, DE
100.0
Allianz France Richelieu 1 S.A.S., Paris la Défense
Allianz Compañía de Seguros y Reaseguros S.A.,
Barcelona
100.0
Allianz HY Investor GP LLC, Wilmington, DE
Allianz IARD S.A., Paris la Défense
94.03
100.0
la Défense
100.0
Allianz Hungária Biztosító Zrt., Budapest
Allianz France Real Estate Invest SPPICAV, Paris
100.0
Allianz Colombia S.A., Bogotá D.C.
100.0
100.0 3
Allianz Hospitaliers Valeurs Durables, Paris
Allianz Combinatie Fonds, Rotterdam
Allianz France Investissement OPCI, Paris la
Défense
100.0
100.0
Allianz Fund Investments 2 S.A. (Compartment),
Luxembourg
100.0 3
Allianz Creactions 1, Paris
71.0
Allianz Côte d'Ivoire Assurances Vie SA, Abidjan
100.0 3
Senningerberg
100.0
Allianz IndexManagement Balance,
Allianz Fund Administration and Management
B.V., Rotterdam
Allianz Congo Assurances SA, Brazzaville
74.1
100.0
41.1 23
Allianz Immo, Paris
100.0
Allianz France US REIT LP, Wilmington, DE
Allianz Cornhill Information Services Private Ltd.,
Trivandrum
100.03
Allianz IARD Vintage, Paris
100.0
Allianz France US REIT GP LLC, Wilmington, DE
Allianz Côte d'Ivoire Assurances SA, Abidjan
51.0
Allianz China Life Insurance Co. Ltd., Shanghai
100.0
100.0
Allianz Carbon Investments B.V., Amsterdam
100.0
Allianz Hellas Insurance Company S.A., Athens
57.43
Allianz FinanzPlan 2055, Senningerberg
100.0
89.0
Allianz Hayat ve Emeklilik A.S., Istanbul
100.0
Allianz Fire and Marine Insurance Japan Ltd.,
Tokyo
Luxembourg
Allianz Finance VIII Luxembourg S.A.,
Allianz Cameroun Assurances Vie SA, Douala
Allianz Capital Partners of America Inc., New
York, NY
100.03
Allianz Groen Rente Fonds, Rotterdam
100.0
Allianz Finance VII Luxembourg S.A., Luxembourg
75.4
Allianz Cameroun Assurances SA, Douala
88.63
Allianz Green Bond, Senningerberg
75.8
Allianz Hold Co Real Estate S.à r.l., Luxembourg
100.0
100.0
100.0³
Allianz Hospitaliers Euro, Paris
100.0 3
Allianz France Favart I, Paris
Allianz China General Insurance Company Ltd.,
Guangzhou
100.0
Allianz Holdings plc, Guildford
67.6
Allianz Foncier, Paris
100.0
Allianz Chicago Private Reit LP, Wilmington, DE
100.0
Allianz Holdings p.l.c., Dublin
100.0
100.0
Allianz Holding France SAS, Paris la Défense
Allianz Foglalkoztatói Nyugdíjszolgáltató Zrt.,
Budapest
88.3
Allianz Centrafrique Assurances SA, Bangui
100.0
Allianz Cash SAS, Paris la Défense
100.0
Allianz Holding eins GmbH, Vienna
100.0
manroland AG, Offenbach am Main
Windpark Quitzow GmbH & Co. KG, Sehestedt
100.0
25.0
46.0 23
Allianz All China Equity, Senningerberg
Autobahn Tank & Rast Gruppe GmbH & Co. KG,
Bonn
100.0
Seine GmbH, Munich
100.0
Allianz Alapkezelő Zrt., Budapest
Associates
75.6
Signa 12 Verwaltungs GmbH, Düsseldorf
Roland Holding GmbH, Munich
Allianz Air France IFC, Paris
100.0
risklab GmbH, Munich
100.0
Allianz Africa Services SA, Abidjan
30.0
100.0
Allianz Africa S.A., Paris la Défense
50.0
PNE WIND Park III GmbH & Co. KG, Cuxhaven
SPN Service Partner Netzwerk GmbH, Munich
100.03
100.0
94.9
95.23
Shipping, Bad Friedrichshall
100.0
Uvita GmbH, Munich
100.0
Allianz Argentina RE S.A., Buenos Aires
esa EuroShip GmbH & Co. KG Underwriting for
100.0
UfS Beteiligungs-GmbH, Munich
100.0
Generales S.A., Buenos Aires
Allianz Amerika Aandelen Fonds, Rotterdam
25.0
GmbH, Berlin
100.0
DCSO Deutsche Cyber-Sicherheitsorganisation
Spherion Objekt GmbH & Co. KG, Stuttgart
100.0
Allianz Annuity Company of Missouri, Clayton, MO
94.9
Spherion Beteiligungs GmbH & Co. KG, Stuttgart
51.08
AV Packaging GmbH, Munich
Allianz Argentina Compañía de Seguros
40.0
RehaCare GmbH, Munich
Objektverwaltungsgesellschaft mbH, Hamburg
Allianz Actio France, Paris
100.0
OLB-Service GmbH, Oldenburg
100.0
Aktiengesellschaft, Munich
100.0
Allianz (UK) Limited, Guildford
100.0
OLB-Immobiliendienst-GmbH, Oldenburg
Münchener und Magdeburger Agrarversicherung
77.93
100.0
100.0
Mondial Kundenservice GmbH, Nuremberg
100.06
100.0
AIM Singapore Pte Ltd., Singapore
manroland Vertrieb und Service GmbH,
Mühlheim am Main
100.0
MileBox UG (haftungsbeschränkt), Munich
100.03
AIM Equity US, Paris
AIM Underwriting Limited, Toronto, ON
60.0
My Finance Coach Stiftung GmbH, Munich
Allianz Actions Aéquitas, Paris
REC Frankfurt zweite
72.83
Allianz Actions France, Paris
50.0
89.93
Allianz Actions Euro Convictions, Paris
PNE WIND Infrastruktur Calau II GmbH,
Cuxhaven
80.0
REC Frankfurt Objekt GmbH & Co. KG, Hamburg
50.0
100.0
Main
PIMCO Deutschland GmbH, Munich
80.33
Allianz Actions Euro, Paris
Dealis Fund Operations GmbH, Frankfurt am
90.2
95.33
Allianz Actions Emergentes, Paris
Joint ventures
Oldenburgische Landesbank Aktiengesellschaft,
Oldenburg
79.23
100.0
Allianz Asac Actions, Paris
100.0 3
VLS Versicherungslogistik GmbH, Berlin
Allianz Australia Limited, Sydney
FOREIGN ENTITIES
100.0
KG, Sehestedt
Windpark Freyenstein-Halenbeck GmbH & Co.
100.0
Allianz Australia Life Insurance Limited, Sydney
100.0
Windpark Emmendorf GmbH & Co. KG, Sehestedt
100.0
100.0
Sydney
50.08
Dhron
100.0
Windpark Eckolstädt GmbH & Co. KG, Sehestedt
Windkraft Kirf Infrastruktur GmbH, Neumagen-
100.0
Allianz Australia Insurance Limited, Sydney
100.0
Windpark Dahme GmbH & Co. KG, Sehestedt
11.18
Allianz Australia Life Insurance Holdings Limited,
Verimi GmbH, Frankfurt am Main
Windpark Kesfeld-Heckhuscheid GmbH & Co. KG,
Allianz Australia Partnership Services Pty Limited,
490 Lower Unit GP LLC, Wilmington, DE
100.0
Windpark Pröttlin GmbH & Co. KG, Sehestedt
100.0
Limited, Sydney
100.0
490 Fulton REIT LP, Wilmington, DE
Allianz Australia Workers Compensation (NSW)
100.0
Windpark Kittlitz GmbH & Co. KG, Sehestedt
Consolidated affiliates
96.5
100.0
Allianz Australia Services Pty Limited, Sydney
100.0
Windpark Kirf GmbH & Co. KG, Sehestedt
100.0
35° East SAS, Paris la Défense
100.0
Sydney
100.0
Sehestedt
490 Fulton JV LP, Wilmington, DE
100.0
Sydney
100.0
Allianz Asset Management of America LLC,
Norsea Gas GmbH, Friedeburg-Etzel
100.0
Windpark Aller-Leine-Tal GmbH & Co. KG,
Sehestedt
25.0
100.0
Dover, DE
Baustoffhandel Beteiligungs- und Verwaltungs
GmbH, Kranichfeld
49.02
Allianz Asset Management of America L.P.,
28.0
Mühl Product & Service und Thüringer
100.0
Inc., Dover, DE
29.8
Instamotion Retail GmbH, Grünwald
100.0
Volkswagen Autoversicherung AG, Braunschweig
Allianz Asset Management of America Holdings
25.0
InnoSolutas GmbH, Bad Friedrichshall
100.0
Volkswagen Autoversicherung Holding GmbH,
Braunschweig
Dover, DE
100.0
Windpark Berge-Kleeste GmbH & Co. KG,
Sehestedt
25.4
Umspannwerk Putlitz GmbH & Co. KG, Oldenburg
Allianz Australia Employee Share Plan Pty Ltd.,
Windpark Cottbuser See GmbH & Co. KG,
Sehestedt
25.0
T&R Real Estate GmbH, Bonn
100.0
Sydney
100.0
Windpark Calau GmbH & Co. KG, Sehestedt
Allianz Australia Claim Services Pty Limited,
25.0
T&R MLP GmbH, Bonn
100.0
Windpark Büttel GmbH & Co. KG, Sehestedt
100.0
Dover, DE
25.0
T&R GP Management GmbH, Bonn
100.0
Allianz Asset Management U.S. Holding II LLC,
24.0
Reisegarant GmbH, Hamburg
Allianz Australia Workers Compensation
A&A Centri Commerciali S.r.l., Milan
CEPE de Vieille Carrière S.à r.l., Versailles
Top Vorsorge-Management GmbH, Vienna
Bandar Seri Begawan
25.0
ZAD Allianz Bulgaria, Sofia
87.4
LBA IV-PPII-Retail Venture LLC, Dover, DE
45.07
Carlyle China Realty L.P., George Town
15.0 3,8
ZAD Allianz Bulgaria Zhivot, Sofia
99.0
Market Street Trust, Sydney
50.03
Carlyle China Rome Logistics L.P., George Town
63.3 3,8
ZAD Energia, Sofia
51.0
NET4GAS Holdings s.r.o., Prague
Chicago Parking Meters LLC, Wilmington, DE
49.9
50.0
ZiOst Energy GmbH & Co. KG, Pottenbrunn
100.0
NRF (Finland) AB, Västeras
50.0
CPIC Allianz Health Insurance Co. Ltd., Shanghai
22.9
Podium Fund HY REIT Owner LP, Wilmington, DE
45.07
Daiwater Investment Limited, London
LBA IV-PPII-Office Venture LLC, Dover, DE
Brunei National Insurance Company Berhad Ltd.,
50.17
Berkshire India Private Limited, New Delhi
20.0
Windpark Zistersdorf GmbH, Pottenbrunn
100.0
Guotai Jun'an Allianz Fund Management Co. Ltd.,
Shanghai
49.07
Blue Vista Student Housing Select Strategies
Wm. H McGee & Co. (Bermuda) Ltd., Hamilton
100.0
Fund L.P., Dover, DE
24.9
Wm. H McGee & Co. Inc., New York, NY
100.0
Israel Credit Insurance Company Ltd., Tel Aviv
50.0
Broker on-line de Productores de Seguros S.A.,
YAO NEWREP Investments S.A., Luxembourg
93.2
Italian Shopping Centre Investment S.r.l., Milan
50.0
Buenos Aires
30.0
Yorktown Financial Companies Inc., Minneapolis,
MN
LBA IV-PPI Venture LLC, Dover, DE
45.07
100.0
Fiumaranuova S.r.L., Genoa
36.6
Non-consolidated affiliates
Allianz Northern Ireland Limited, Belfast
100.0
SC Holding SAS, Paris
50.0
Four Oaks Place LP, Wilmington, DE
49.0
Assurance France Aviation S.A., Paris
100.0
SES Shopping Center AT1 GmbH, Salzburg
50.0
business lounge GmbH, Vienna
100.0
SES Shopping Center FP 1 GmbH, Salzburg
50.0
COGAR S.à r.l., Paris
100.0
Shanghai BaiAn Information Technology Co. Ltd.,
Shanghai
Helios Silesia Holding B.V., Amsterdam
IPE Tank and Rail Investment 1 S.C.A.,
Luxembourg
45.0
20.07
Gesellschaft für Vorsorgeberatung AG, Bern
100.0
Lennar Multifamily Venture LP, Wilmington, DE
48.8
11.38
148
Annual Report 2017 - Allianz Group
50.0
25.73
44.3
European Outlet Mall Fund FCP-FIS, Luxembourg
RMPA Holdings Limited, Colchester
Porterbrook Holdings | Limited, London
30.0
Data Quest SAL, Beirut
36.0
AGF Pension Trustees Ltd., Guildford
100.0
Allianz Financial Services S.A., Athens
Previndustria - Fiduciaria Previdenza Imprenditori
S.p.A., Milan
Delgaz Grid S.A., Târgu Mures
30.0
50.0
100.0
Douglas Emmett Partnership X LP, Wilmington, DE
28.6
PT. IndoAlliz Perkasa Sukses, Jakarta
49.07
Allianz Global Corporate & Specialty SE Escritório
Dr. Ignaz Fiala GmbH, Vienna
33.3
de Representação no Brasil Ltda., Rio de Janeiro
100.0
Queenspoint S.L., Madrid
50.0
ERES APAC II (GP) S.à r.L., Luxembourg
30.03
Allianz Insurance Services Ltd., Athens
100.0
56.07
100.0
100.0
20.0
Company, Riyadh
32.5
UP 36 SA, Brussels
100.0
Allianz Securicash SRI, Paris
5.1 3,8
AZ/JH Co-Investment Venture (IL) LP, Wilmington,
Vanilla Capital Markets S.A., Luxembourg
100.0
DE
80.07
Allianz Sécurité PEA, Paris
19.3 3,8
VertBois S.à r.l., Luxembourg
100.0
Bajaj Allianz Financial Distributors Limited, Pune
50.0
Archstone Multifamily Partners AC JV LP,
Vet Envoy Limited, Colwyn Bay
100.0
Vigny Depierre Conseils SAS, Archamps
100.0
Columbia REIT - 333 Market Street LP,
Wilmington, DE
Wilmington, DE
40.0
22.47
Archstone Multifamily Partners AC LP,
80.07
Viveole SAS, Versailles
TU Allianz Zycie Polska S.A., Warsaw
Allianz Saudi Fransi Cooperative Insurance
Windpark Scharndorf GmbH, Pottenbrunn
Allianz EFU Health Insurance Ltd., Karachi
49.0
75.0
Allee-Center Kft., Budapest
Wilmington, DE
Towarzystwo Ubezpieczen Euler Hermes S.A.,
Warsaw
Allianz Europe Small Cap Equity, Senningerberg
24.43
AMLI-Allianz Investment LP, Wilmington, DE
75.0
100.0
Allianz Fóndika S.A. de C.V., Mexico City
26.8
Trafalgar Insurance Public Limited Company,
Guildford
AS Gasinfrastruktur Beteiligung GmbH, Vienna
60.07
Allianz France Investissement IV, Paris
73.3 3,8
100.0
Atenction Integral a la Dependencia S.L.,
Allianz Invest Vorsorgefonds, Vienna
28.43
Cordoba
50.0
TU Allianz Polska S.A., Warsaw
100.0
AZ/JH Co-Investment Venture (DC) LP,
Columbia REIT-University Circle LP, Wilmington, DE
100.0
28.6
Windpark Ladendorf GmbH, Vienna
100.0
Dundrum Retail GP Designated Activity
Windpark Les Cent Jalois SAS, Versailles
100.0
Company, Dublin
Bajaj Allianz General Insurance Company Ltd.,
Pune
26.0
50.0
Windpark LOI GmbH, Pottenbrunn
100.0
Dundrum Retail Limited Partnership, Dublin
Bajaj Allianz Life Insurance Company Ltd., Pune
26.0
50.0
Windpark PDV GmbH, Pottenbrunn
100.0
Elton Investments S.à r.l., Luxembourg
50.0
Bazalgette Equity Ltd., London
34.3
Windpark PL GmbH, Pottenbrunn
Berkshire Hathaway Services India Private
100.0
Euromarkt Center d.o.o., Ljubljana
Limited, New Delhi
Wilmington, DE
100.08
AWP Insurance Brokerage (Beijing) Co. Ltd.,
Beijing
50.0
Dundrum Car Park Limited Partnership, Dublin
22.4
50.0
Volta, Paris
100.0 3
Companhia de Seguro de Créditos S.A., Lisbon
50.0
Areim Fastigheter 2 AB, Stockholm
23.3
Areim Fastigheter 3 AB, Stockholm
26.2
Vordere Zollamtsstraße 13 GmbH, Vienna
100.0
CPPIC Euler Hermes Insurance Sales Co. Ltd.,
Shanghai
49.07
100.0
20.0
Windpark GHW GmbH, Pottenbrunn
100.0
50.0
Dundrum Car Park GP Limited, Dublin
Assurcard N.V., Haasrode
Windpark AO GmbH, Pottenbrunn
100.0
Autoelektro tehnicki pregledi d.o.o., Vojnić
50.0
Dorcasia Ltd., Sydney
87.5
WFC Investments Sp. z o.o., Warsaw
49.0
OUR OBSERVATIONS
We assessed whether the disclosures in the notes, particularly the
run-off triangles, were appropriately derived from the bookkeep-
ing systems and evaluated them for their completeness.
We assessed the level of reserving as at the reporting date with
that of the prior year at the level of selected subsidiaries and at
group level. We assessed whether the reserve adjustments of the
expected value calculated using actuarial methods were justified
and plausible. This involved surveying the actuaries and company
management as well as assessing the supporting documents of
the Group Reserve Committee.
For risk based selected subsidiaries, we carried out our own actu-
arial calculations according to best estimates and determined a
range for reserves.
The reserves for incurred but not reported claims (IBNR) are
based on actuarial and statistical models for estimated costs neces-
sary to bring claims to final settlement and management of losses.
The estimate of total loss expenditure is subject to considerable
We assessed the plausibility of the significant assumptions used,
including the loss ratios as well as the frequency and amount of
claims (run-off behaviour of claims) both at subsidiary and group
level.
We recorded the process for the determination of reserves both
at the level of risk based selected subsidiaries as well as on group
level, identified the key controls and tested them for their design
and effectiveness. This included controls for claims measurement
and controls of the completeness and accuracy of the data used.
Furthermore, we evaluated the controls on group level performed
by the Group Actuarial department for the assessment of the re-
sults of the subsidiaries.
For the audit of the reserves for loss and loss adjustment expenses,
we performed the following substantial audit procedures with the
support of our own actuaries:
OUR AUDIT APPROACH
uncertainties and thus requires significant judgement. Uncertainties in
the estimate arise particularly in respect of the forecasts of future
events, estimates of future inflation developments as well as other
social and economic factors. This includes the claims frequency, the
claim amount, delays in reporting and the run-off period for claims. In
this context, the notes, in particular the run-off triangles¹, need to be
considered.
Using the schedule of adjusting entries at group level, we ana-
lysed whether adjusting entries were appropriately documented
and justified.
The valuation of the reserves for loss and loss adjustment expenses
are appropriate as a whole. The assumptions underlying the meas-
urement are balanced as a whole. The explanatory notes and disclo-
sures in the notes to the consolidated financial statements are suffi-
ciently detailed and appropriate.
E_Further Information
For the accounting policies, explanations on the use of estimates and
assumptions used please refer to the explanations in the notes to the
consolidated financial statements under note 2, sub-section 'Reserves
1_Run-off triangles are a tabular illustration of claims-related data (such as payments, claims reserves or estimated claims
results) on two time-related levels (calendar year as well as the year of loss occurence).
Annual Report 2017 - Allianz Group
155
for insurance and investment contracts' and 'Deferred acquisition
costs'. Further disclosures are also made on the financial statement
items under note 15 and under note 9. Risk disclosures are included in
the risks and opportunities report of the group management report.
THE FINANCIAL STATEMENT RISK
The total reserves for insurance and investment contracts in the
Life/Health segment as at 31 December 2017 amounted to
EUR 499,060 million or 55.4% of the balance sheet total of the Allianz
Group. Of this, EUR 428,497 million is attributable to aggregate policy
reserves and thus corresponds to 47.5% of the balance sheet total of
the Allianz Group. The aggregate policy reserves also include re-
serves for investment contracts with discretionary profit participation.
Deferred acquisition costs attributable to the Life/Health segment
amounted to EUR 18,469 million.
The measurement of the aggregate policy reserve is dependent
on numerous assumptions and thus very complex. Furthermore, the
determination of the assumptions is made partially on the basis of
best estimates. This results in increased risks of material misstate-
ments due to the complexity of calculations and the judgement re-
quired for assumptions, in particular interest rate development and
discount factors, mortality and invalidity assumptions as well as
settlement and administration costs and lapse rates for insurance
contracts. These assumptions are generally defined at the inception
of the contract and subsequently maintained, unless an impending
loss (premium deficit) occurs. Using an test (Liability Adequacy Test)
at local level, they check whether the balance from the aggregate
policy reserves and the deferred acquisition costs, taking the future
premiums still expected from the portfolio as a base, is appropriate
as a whole to satisfy the liabilities incurred. There is dependence on
numerous assumptions which are subject to judgement. The group-
wide standards for the application of consistent and plausible as-
sumptions are relevant in this regard.
In this context, the disclosures in the notes, in particular the dis-
closures on estimation uncertainties and sensitivities, are also re-
quired to be made.
The asset 'deferred acquisition costs' is judged at contract incep-
tion in respect of recoverability over the contract duration. The de-
ferred acquisition costs are amortised proportionally over the sched-
uled duration of the contracts. Depending on the type of contract, this
is carried out in proportion to premium income or in proportion to
expected gross margins or expected gross profits. The deferred ac-
quisition costs are included in the aforementioned Liability Adequacy
Test. In case of a premium deficit, the deferred acquisition costs are
initially written down.
OUR AUDIT APPROACH
The reserves for loss and loss adjustment expenses are divided
into case reserves for reported claims as at the reporting date and
reserves for incurred but not reported losses (IBNR) as at the report-
ing date. The case reserves for reported claims are based on the
estimates for future claims expenditures, including loss adjustment
expenses relating to such claims and are recognised on the basis of
an expected value. These are based on actuarial and statistical
methods, using judgment of claims personnel.
To support the audit of reserves for insurance and investment con-
tracts in the Life/Health segment and deferred acquisition costs, we
engaged our own actuaries. We performed the following substantial
audit procedures:
VALUATION OF AGGREGATE POLICY RESERVES AS
WELL AS THE DEFERRED ACQUISITION COSTS IN THE
LIFE/HEALTH SEGMENT
The total reserves for loss and loss adjustment expenses as at
31 December 2017 amounted to EUR 73,292 million. The reserves for
loss and loss adjustment expenses amounted to EUR 62,093 million in
the Property-Casualty segment, EUR 11,256 million in the Life/Health
segment, while negative consolidation effects amounted to
EUR 57 million.
E_Further Information
For the accounting policies, explanations on the use of estimates and
assumptions used please refer to the explanations in the notes to the
consolidated financial statements under note 2, sub-section 'Reserves
for losses and loss adjustment expenses'. Further disclosures are also
made on the financial statement items under note 14. Risk disclosures
are included in the risks and opportunities report of the group man-
agement report.
We verified the appropriateness of the central planning assump-
tions for the selected CGUs. We critically assessed the assump-
tions based on our understanding of the business, the sector and
overall economic developments. In order to assess the quality of
the internal planning process, we reconciled the forecasts for se-
-
lected CGUS with internal business plans from the approved
planning dialogues for these CGUs and compared the plans from
prior years with the results obtained.
We assessed the assumptions used for discounting (particularly
interest rates and beta factors) for appropriateness through a
comparison with market and sector-specific benchmarks deter-
mined by us. In addition, we verified the calculation procedure
used for measurement. On the basis of our own sensitivity anal-
yses for selected CGUs, we determined whether the tested carry-
ing amounts were still sufficiently covered by their respective re-
coverable amounts in the event of potential changes to assump-
tions within a realistic range.
We assessed whether the explanations on the Impairment Test
for Goodwill in the notes were sufficiently detailed and appropri-
ate.
OUR OBSERVATIONS
The assumptions of the legal representatives underlying the valuation
have been determined appropriately as a whole. The valuation mod-
els used for the segments are appropriate. The assumptions and
judgements of the legal representatives underlying the valuation are
sufficiently detailed and appropriate.
DETERMINATION OF THE FAIR VALUE FOR
REGULARLY WITH THE FAIR VALUE ASSESSED
FINANCIAL ASSETS OF THE VALUATION CATEGORY
LEVEL 3
For the accounting policies, significant estimates and assumptions
used please refer to the explanations in the notes to the consolidated
financial statements under note 34 and note 2, sub-section 'Financial
Instruments - Measurement at fair value' for explanatory notes on the
fair value hierarchy. Risk disclosures on market and credit risk are
included in the risks and opportunities report of the group manage-
ment report.
THE FINANCIAL STATEMENT RISK
The
carrying amount of total financial assets as at
31 December 2017 corresponds to EUR 792,703 million. This includes
financial assets that are measured at fair value on a recurring basis in
the amount of EUR 648,252 million. As at 31 December 2017, the
Allianz Group held assets categorised as Level 3 under the fair value
hierarchy of IFRS 13 with a fair value of EUR 31,416 million. This cor-
responds to 4.0% of the total financial assets held by the Group.
Financial assets that are measured at fair value are classified in
accordance with the fair value hierarchy in IFRS 13. An increased risk
of material misstatement can be assumed for those financial assets in
level 3 categorisation that have input parameters that are not ob-
servable on the market and have a significant impact on the fair
value. This primarily relates to available-for-sale investments amount-
ing to EUR 30,661 million, which consist of fixed-interest securities
(e.g. corporate bonds) or private equity fund investments and alter-
native investments. The fair values of fixed-interest securities are
measured using either a market approach or an income approach.
For the use of the market approach, the quoted prices of identical or
comparable assets on active markets are used as the most important
inputs. The income approach is mostly a present value technique for
which the credit and liquidity risks are considered using adjusted cash
flows or discount curves. The fair values for private equity fund in-
THE FINANCIAL STATEMENT RISK
1 Represent the lowest level at which goodwill is monitored for internal management purposes.
Annual Report 2017 - Allianz Group
vestments and alternative investments in level 3 categorisation are
measured mainly using a net asset value.
OUR AUDIT APPROACH
As part of our approach to audit the level 3 financial assets, we en-
gaged our own valuation specialists. In particular, we performed the
following substantial audit procedures:
-
We verified the appropriateness of the key internal controls es-
tablished for the valuation process and evaluated their operating
effectiveness by testing functions.
For risk based selected subsidiaries of the Allianz Group, which
essentially hold the financial assets, we, together with the local
auditors of the subsidiaries, have considered the appropriateness
of controls for the independent validation of input factors and the
fair value determination of level 3 financial assets.
At Allianz Group level, we evaluated the appropriateness of the
reporting which was presented to the legal representatives. We
evaluated the reconciliations from the financial reporting-related
systems for appropriateness and reconciled the input factors de-
termined by us with the reporting.
Evaluation of the appropriateness of selected assumptions as
well as subsequent measurement of selected level 3 financial as-
sets and review of model development and validation.
OUR OBSERVATIONS
The determination of the fair value for regularly with the fair value
assessed financial assets of the valuation category level 3 is appro-
priate as a whole.
VALUATION OF RESERVES FOR LOSS AND LOSS
ADJUSTMENT EXPENSES
154
We recorded the process for determining the reserve and the
valuation of the deferred acquisition costs, identified the key per-
formed controls and tested these in respect of their design and
effectiveness. This included controls for the valuation of reserves
and the valuation of the deferred acquisition costs as well as con-
trols of the completeness and accuracy of the data used.
Identify and assess the risks of material misstatement of the
consolidated financial statements and of the group management
report, whether due to fraud or error, design and perform audit
procedures responsive to those risks, and obtain audit evidence
We analysed the development of the aggregate policy reserves
and deferred acquisition costs relative to the prior year, in particu-
lar taking into consideration that the development of changes in
assumptions is consistent with business development and our ex-
pectations resulting from market observations.
Evaluate the overall presentation, structure and content of the
consolidated financial statements, including the disclosures, and
whether the consolidated financial statements present the under-
lying transactions and events in a manner that the consolidated
financial statements give a true and fair view of the assets, liabili-
ties, financial position and financial performance of the Group in
compliance with IFRSS as adopted by the EU and the additional
requirements of German commercial law pursuant to § 315e (1)
HGB.
Obtain sufficient appropriate audit evidence regarding the finan-
cial information of the entities or business activities within the
Group to express opinions on the consolidated financial state-
ments and on the group management report. We are responsible
for the direction, supervision and performance of the group audit.
We remain solely responsible for our opinions.
Evaluate the consistency of the group management report with
the consolidated financial statements, its conformity with German
law, and the view of the Group's position it provides.
Perform audit procedures on the prospective information pre-
sented by management in the group management report. On the
basis of sufficient appropriate audit evidence we evaluate, in par-
ticular, the significant assumptions used by management as a ba-
sis for the prospective information, and evaluate the proper deri-
vation of the prospective information from these assumptions. We
do not express a separate opinion on the prospective information
and on the assumptions used as a basis. There is a substantial
unavoidable risk that future events will differ materially from the
prospective information.
We communicate with those charged with governance regarding,
among other matters, the planned scope and timing of the audit and
Annual Report 2017 - Allianz Group
157
E_Further Information
significant audit findings, including any significant deficiencies in
internal control that we identify during our audit.
We also provide those charged with governance with a state-
ment that we have complied with the relevant independence re-
quirements, and communicate with them all relationships and other
matters that may reasonably be thought to bear on our independ-
ence, and where applicable, the related safeguards.
From the matters communicated with those charged with gov-
ernance, we determine those matters that were of most significance
in the audit of the consolidated financial statements of the current
period and are therefore the key audit matters. We describe these
matters in our auditor's report unless law or regulation precludes
public disclosure about the matter.
Other Legal and Regulatory Requirements
FURTHER INFORMATION PURSUANT TO ARTICLE 10
OF THE EU AUDIT REGULATION
We were elected as group auditor by the Supervisory Board on
9 March 2017. We were engaged by the Chairman of the Audit
Committee of the supervisory board on 13 June 2017 for the audit of
the consolidated financial statements as of 31 December 2017 and
of the group management report for the financial year 2017. We
have been the group auditor of the Allianz SE without interruption for
more than 25 years.
We declare that the opinions expressed in this auditor's report
are consistent with the additional report to the audit committee
pursuant to Article 11 of the EU Audit Regulation (long-form audit
report).
German Public Auditor Responsible for the
Engagement
The German Public Auditor responsible for the engagement is
Andreas Dielehner.
Munich, 28 February 2018
KPMG AG
Wirtschaftsprüfungsgesellschaft
(Original German version signed by:)
Me Out
ил
Becker
Wirtschaftsprüfer
(German Public Auditor)
Dielehner
Wirtschaftsprüfer
(German Public Auditor)
Conclude on the appropriateness of management's use of the
going concern basis of accounting and, based on the audit evi-
dence obtained, whether a material uncertainty exists related to
events or conditions that may cast significant doubt on the
Group's ability to continue as a going concern. If we conclude that
a material uncertainty exists, we are required to draw attention in
the auditor's report to the related disclosures in the consolidated
financial statements and in the group management report or, if
such disclosures are inadequate, to modify our respective opin-
ions. Our conclusions are based on the audit evidence obtained
up to the date of our auditor's report. However, future events or
conditions may cause the Group to cease to be able to continue
as a going concern.
We assessed the appropriateness of the significant assumptions,
in particular interest rate development and discount factors, mor-
tality and invalidity assumptions as well as costs and lapse rates
for insurance contracts.
Obtain an understanding of internal control relevant to the audit
of the consolidated financial statements and of arrangements
and measures (systems) relevant to the audit of the group man-
agement report in order to design audit procedures that are ap-
propriate in the circumstances, but not for the purpose of express-
ing an opinion on the effectiveness of these systems.
Evaluate the appropriateness of accounting policies used by
management and the reasonableness of estimates made by
management and related disclosures.
-
At group level we evaluated the reporting of Group Actuarial for
the purposes of the Group Reserve Committee.
We verified that the Liability Adequacy Test was conducted
properly, in particular concerning the suitability of the basis of
calculation used and the appropriateness of the methods.
We assessed whether the disclosures in the notes were sufficiently
detailed and appropriate and particularly focused on whether
the estimation uncertainties and sensitivities were presented ap-
propriately.
OUR OBSERVATIONS
The measurement of the reserves of insurance and investment con-
tracts and deferred acquisition costs in the Life/Health segment is
appropriate as a whole. The measurement assumptions used are
appropriate as a whole. The explanatory notes and disclosures in the
notes to the consolidated financial statements are sufficiently de-
tailed and appropriate.
OTHER INFORMATION
Management is responsible for the other information. The other
information comprises:
Statement on corporate Management pursuant to § 315d and
§ 289f HGB, and
the remaining parts of the annual report, with the exception of
the audited consolidated financial statements and group man-
agement report and our auditor's report.
Our opinions on the consolidated financial statements and on the
group management report do not cover the other information, and
consequently we do not express an opinion or any other form of
assurance conclusion thereon.
In connection with our audit, our responsibility is to read the oth-
er information and, in so doing, to consider whether the other infor-
mation
-
is materially inconsistent with the consolidated financial state-
ments, with the group management report or our knowledge ob-
tained in the audit, or
otherwise appears to be materially misstated.
RESPONSIBILITIES OF MANAGEMENT AND THE
SUPERVISORY BOARD FOR THE CONSOLIDATED
FINANCIAL STATEMENTS AND THE GROUP
MANAGEMENT REPORT
Management is responsible for the preparation of the consolidated
financial statements that comply, in all material respects, with IFRSS
as adopted by the EU and the additional requirements of German
commercial law pursuant to § 315e (1) HGB and that the consolidat-
ed financial statements, in compliance with these requirements, give
156
Annual Report 2017 - Allianz Group
E_Further Information
a true and fair view of the assets, liabilities, financial position, and
financial performance of the Group. In addition, management is
responsible for such internal control as they have determined neces-
sary to enable the preparation of consolidated financial statements
that are free from material misstatement, whether due to fraud or
error.
When preparing the consolidated financial statements, man-
agement is responsible for assessing the Group's ability to continue as
a going concern. They also have the responsibility for disclosing, as
applicable, matters related to going concern. In addition, they are
responsible for financial reporting based on the going concern basis
of accounting unless there is an intention to liquidate the Group or to
cease operations, or there is no realistic alternative but to do so.
Furthermore, management is responsible for the preparation of
the group management report that, as a whole, provides an appro-
priate view of the Group's position and is, in all material respects,
consistent with the consolidated financial statements, complies with
German legal requirements, and appropriately presents the opportu-
nities and risks of future development. In addition, management is
responsible for such arrangements and measures (systems) as they
have considered necessary to enable the preparation of a group
management report that is in accordance with the applicable Ger-
man legal requirements, and to be able to provide sufficient appro-
priate evidence for the assertions in the group management report.
The supervisory board is responsible for overseeing the Group's
financial reporting process for the preparation of the consolidated
financial statements and of the group management report.
AUDITOR'S RESPONSIBILITIES FOR THE AUDIT OF THE
CONSOLIDATED FINANCIAL STATEMENTS AND OF
THE GROUP MANAGEMENT REPORT
Our objectives are to obtain reasonable assurance about whether the
consolidated financial statements as a whole are free from material
misstatement, whether due to fraud or error, and whether the group
management report as a whole provides an appropriate view of the
Group's position and, in all material respects, is consistent with the
consolidated financial statements and the knowledge obtained in
the audit, complies with the German legal requirements and appro-
priately presents the opportunities and risks of future development,
as well as to issue an auditor's report that includes our opinions on
the consolidated financial statements and on the group manage-
ment report.
We exercise professional judgment and maintain professional
scepticism throughout the audit. We also:
We evaluated the appropriateness of the valuation method used
for each segment and its implementation in the valuation mod-
els. For selected CGUs, including CGUS with a low headroom
amount between the carrying value (including goodwill) and the
recoverable amount, we then verified the computational accura-
cy of the valuation models.
that is sufficient and appropriate to provide a basis for our opin-
ions. The risk of not detecting a material misstatement resulting
from fraud is higher than for one resulting from error, as fraud
may involve collusion, forgery, intentional omissions, misrepresen-
tations, or the override of internal control.
We assessed the appropriateness of the determination and
changes of the CGUS and the allocation of the carrying amount
to the CGUS determined.
In our opinion, on the basis of the knowledge obtained in the
audit,
To audit the Impairment Test for Goodwill, we engaged our own
valuation specialists and actuaries. In particular, we performed the
following substantial audit procedures:
25.8
SNC Alta CRP Gennevilliers, Paris
49.0
SNC Alta CRP La Valette, Paris
49.0
SNC Société d'aménagement de la Gare de l'Est,
Paris
49.0
Solveig Gas Holdco AS, Oslo
30.0
UK Outlet Mall Partnership LP, Edinburgh
19.58
10.08
49.0
Wildlife Works Carbon LLC, San Francisco, CA
even if the Allianz Group's share in the dependent entity is below 100%.
2_Controlled by the Allianz Group.
3_Investment fund.
4_Releasing impact according to § 264 (3) HGB through the Allianz Group's
consolidated financial statements.
5_Group share through indirect holder Roland Holding GmbH, Munich: 75.6%.
6_Insolvent.
7_Classified as joint venture according to IFRS 11.
8 Classified as associate according to IAS 28.
The Allianz Group refrains from disclosure of participations which are
not included in one of the above categories as they are of minor
importance for giving a true and fair view of the assets, liabilities,
financial position and profit or loss of the Allianz Group.
D_Consolidated Financial Statements
Annual Report 2017 - Allianz Group
149
D_Consolidated Financial Statements
1 Percentage includes equity participations held by dependent entities in full,
SK Versicherung AG, Vienna
SCI Bercy Village, Paris
49.0
158
%
owned¹
Liverpool Victoria General Insurance Group
Limited, Bournemouth
49.0
Medgulf Allianz Takaful B.S.C., Seef
25.0
Milvik AB, Stockholm
33.3
New Path S.A., Buenos Aires
40.0
NGI Group Holdings LLC, Wilmington, DE
30.0
OeKB EH Beteiligungs- und Management AG,
Vienna
49.0
OVS Opel VersicherungsService GmbH, Vienna
40.0
Professional Agencies Reinsurance Limited,
Hamilton
14.38
Quadgas Holdings Topco Limited, Saint Helier
16.78
Redwood Japan Logistics Fund II LP, Singapore
23.63
Residenze CYL S.p.A., Milan
33.3
SAS Alta Gramont, Paris
This page intentionally left blank.
We assessed the appropriateness of the key internal controls
established for the valuation process and verified their operating
effectiveness by testing these controls. In doing so, we included
controls in respect of planning assumptions, the determination
and changes of CGUS and the use of assumptions, among other
things.
150
FURTHER INFORMATION
the accompanying group management report as a whole pro-
vides an appropriate view of the Group's position. In all material
respects, this group management report is consistent with the
consolidated financial statements, complies with German legal
requirements and appropriately presents the opportunities and
risks of future development. Our opinion on the group manage-
ment report does not cover of the Statement on corporate Man-
agement pursuant to § 315d and § 289f HGB mentioned above.
Pursuant to § 322 (3) sentence 1 HGB, we declare that our audit has
not led to any reservations relating to the legal compliance of the
consolidated financial statements and of the group management
report.
BASIS FOR THE OPINIONS
We conducted our audit of the consolidated financial statements and
of the group management report in accordance with § 317 HGB and
the EU Audit Regulation No. 537/2014 (referred to subsequently as
"EU Audit Regulation") and in compliance with German Generally
Accepted Standards for Financial Statement Audits promulgated by
the Institut der Wirtschaftsprüfer [Institute of Public Auditors in Ger-
many] (IDW). Our responsibilities under those requirements and
principles are further described in the "Auditor's responsibilities for the
audit of the consolidated financial statements and of the group
management report" section of our auditor's report. We are inde-
pendent of the group entities in accordance with the requirements of
European law and German commercial and professional law, and we
have fulfilled our other German professional responsibilities in ac-
cordance with these requirements. In addition, in accordance with
Article 10 (2) point (f) of the EU Audit Regulation, we declare that we
have not provided non-audit services prohibited under Article 5 (1) of
the EU Audit Regulation. We believe that the evidence we have ob-
tained is sufficient and appropriate to provide a basis for our opinions
on the consolidated financial statements and on the group man-
agement report.
KEY AUDIT MATTERS IN THE AUDIT OF THE
CONSOLIDATED FINANCIAL STATEMENTS
Key audit matters are those matters that, in our professional judg-
ment, were of most significance in our audit of the consolidated
financial statements for the financial year from 1 January 2017 to
31 December 2017. These matters were addressed in the context of
our audit of the consolidated financial statements as a whole, and in
forming our opinion thereon, we do not provide a separate opinion
on these matters.
IMPAIRMENT TEST FOR GOODWILL
For the accounting policies, significant estimates and assumptions
used please refer to the explanations in the notes to the consolidated
financial statements in note 2, sub-section 'Intangible assets and
goodwill'. In addition, further disclosures on financial statement items
are made, including disclosures on impairment testing, under note 11.
THE FINANCIAL STATEMENT RISK
Goodwill as at 31 December 2017 amounts to EUR 11,848 million.
The proportionate goodwill attributable to the segments is as follows:
Goodwill attributable to business segments
EUR mn
the accompanying consolidated financial statements comply, in
all material respects, with the IFRSS as adopted by the EU, and
the additional requirements of German commercial law pursuant
to § 315e (1) HGB [Handelsgesetzbuch: German Commercial
Code] and, in compliance with these requirements, give a true
and fair view of the assets, liabilities, and financial position of the
Group as at 31 December 2017, and of its financial performance
for the financial year from 1 January 2017 to 31 December 2017,
and
As of 31 December
Property-Casualty
Life/Health
2017
2,494
2,100
7,254
11,848
Annual Report 2017 - Allianz Group
153
E_Further Information
The determination of the recoverable amount of a cash generating
unit¹ (CGU), necessary for impairment test for goodwill, is complex
and involves a significant degree of considerable judgement. The
individual CGUS are allocated accordingly to the segments of Allianz.
An increased risk of material misstatement results from the exer-
cising of judgements for the purposes of annual impairment test for
goodwill, in particular from the determination of the recoverable
amount and the underlying significant assumptions about future
income and growth rates for the terminal value. For the Property-
Casualty and Asset Management segments, the recoverable amount
is determined using the discounted earnings method. The business
plans of the CGUS, which are influenced by significant estimates
related to potential sustainable income as well as long-term growth
rates, providing the basis for measurement of the recoverable
amount. For the CGUS in the Life/Health segment, the recoverable
amount is determined using the value in use based on the appraisal
value, which generally results from the value of the insurance portfo-
lio in existence using the market consistent embedded value (MCEV)
and the new business value multiplied by a factor.
The assumptions and forecasts underlying the measurement of
the future development and of any impairment required are based
on judgements and numerous forward-looking estimates. In case the
carrying amount (including goodwill) is getting close to the recovera-
ble amount of a CGU, the exercising of judgement as regards the
input factors could lead to a risk that the carrying amounts are not
within an appropriate range and thus that required impairment is not
recognized. There is also a risk that the related disclosures in the
notes are not appropriate, particularly the required sensitivity anal-
yses.
OUR AUDIT APPROACH
Asset Management
Total
We have audited the consolidated financial statements of Allianz SE,
Munich and its subsidiaries (the Group), which comprise the consoli-
dated statement of financial position as at 31 December 2017, and
the consolidated income statement, the consolidated statement of
comprehensive income, consolidated statement of changes in equity
and consolidated statement of cash flows for the financial year from
1 January 2017 to 31 December 2017, and notes to the consolidated
financial statements, including a summary of significant accounting
policies. In addition, we have audited the group management report
of Allianz SE, Munich, for the financial year from 1 January 2017 to
31 December 2017. In accordance with the German legal require-
ments, we have not audited the content of the Statement on corpo-
rate Management pursuant to § 315d and § 289f HGB which is in-
cluded in section B (part of the group management report) of the
annual report.
OPINIONS
Report on the audit of the consolidated financial
statements and of the group management
report
Annual Report 2017 - Allianz Group
151
E_Further Information
RESPONSIBILITY STATEMENT
To the best of our knowledge, and in accordance with the applicable
reporting principles, the consolidated financial statements give a true
and fair view of the assets, liabilities, financial position and profit or
loss of the group, and the group management report includes a fair
review of the development and performance of the business and the
position of the group, together with a description of the material
opportunities and risks associated with the expected development of
the group.
Munich, 13 February 2018
Allianz SE
The Board of Management
Caves Béla Sergio Ballinst the
Oliver Bäte
берь
Sergio Balbinot
N. funny moscher
Dr. Helga Jung
Jacqueline Hunt
Dr. Christof Mascher
Niran Peiris
fito Ramil fatty had Theis
Giulio Terzariol
Dr. Günther Thallinger
Dr. Axel Theis
152
Annual Report 2017 - Allianz Group
INDEPENDENT AUDITOR'S REPORT
E_Further Information
To Allianz SE, Munich
Annual Report 2017 - Allianz Group
E
Reasonable assurance is a high level of assurance, but is not a
guarantee that an audit conducted in accordance with § 317 HGB
and the EU Audit Regulation and in compliance with German Gener-
ally Accepted Standards for Financial Statement Audits promulgated
by the Institut der Wirtschaftsprüfer (IDW) will always detect a mate-
rial misstatement. Misstatements can arise from fraud or error and
are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users
taken on the basis of these consolidated financial statements and
this group management report.
Annual Report 2017 - Allianz Group
FSC
PERFORMANCE MEASURES
Further information on the definition of our Alternative
Performance Measures and their components, as well as
the basis of calculation adopted:
www.allianz.com/results
Financial calendar
Important dates for shareholders and analysts¹
Annual General Meeting
Financial Results 1Q.
Financial Results 2Q/Interim Report 6M.
Financial Results 3Q.
Annual Report 2018
9 May 2018
15 May 2018
3 August 2018
9 November 2018
15 February 2019
8 March 2019
Annual General Meeting
8 May 2019
1 - The German Securities Trading Act ("Wertpapierhandelsgesetz") obliges issuers to announce immediately any information which may have a substantial price impact. Therefore we cannot exclude that
we have to announce key figures related to quarterly and fiscal year results ahead of the dates mentioned above. As we can never rule out changes of dates, we recommend checking them on the
internet at www.allianz.com/financialcalendar.
Allianz SE - Königinstrasse 28 - 80802 Munich - Germany - Phone +49 89 38000 - info@allianz.com - www.allianz.com
Front page design: hw.design GmbH - Photography: Wolfgang Stahr - Typesetting: Produced in-house with firesys -
Printing: G. Peschke Druckerei GmbH - Annual Report on the internet: www.allianz.com/annualreport - Date of publication: 9 March 2018
This is a translation of the German Annual Report of Allianz Group. In case of any divergences, the German original is legally binding.
MIX
www.fsc.org
Paper from
responsible sources
FSC® C002390
GUIDELINE ON ALTERNATIVE
Date of publication: 19 March 2018. www.allianz.com/hrfactbook
Financial Results 2018.
Allianz ⑪
Orientation
MULTICHANNEL REPORTING
The HR Fact Book is the official and most comprehensive
report on key human resources facts and figures, highlighting
major HR achievements over the past year and revealing the
outlook for 2018.
Allianz
Further Allianz publications
ALLIANZ SUSTAINABILITY REPORT 2017
RESPONDING
TO TOMORROW'S
CHALLENGES
Allianz Group
Sustainability Report 2017
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as PDF
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FACT BOOK 2017
ALLIANZ HUMAN RESOURCES FACT BOOK 2017
This sign indicates where to find additional infor-
mation in this Annual Report or on the internet.
ORIENTATION GUIDE
ALLIANZ HR
Date of publication: April 2018.
The Allianz Group Sustainability Report "Responding to
tomorrow's challenges" covers our contribution to the
environment, society and economy. It provides full details of
our sustainability strategy, approach and progress as well
as an outlook for 2018.
Allianz ⑪
www.allianz.com/sustainability
THE HOME FOR THOSE WHO DARE
- Chairman: Chairman
The Supervisory Board oversees and advises the Board of
Management on managing the business. It is also responsible for
appointing the members of the Board of Management, determin-
ing their overall remuneration, and reviewing Allianz SE's and the
Allianz Group's annual financial statements. The Supervisory Board's
activities in the 2017 financial year are described in the Supervisory
Board Report starting on > page 4.
of the Supervisory Board
(Michael Diekmann)
5 members
Supervisory board committees
STANDING COMMITTEE
Supervisory board committees
Part of the Supervisory Board's work is carried out by its committees.
The Supervisory Board receives regular reports on the activities of its
committees. The composition of committees and the tasks assigned
to them are regulated by the Supervisory Board's Rules of Procedure.
SUPERVISORY BOARD COMMITTEES
The Supervisory Board regularly reviews the efficiency of its ac-
tivities. The Supervisory Board discusses recommendations for im-
provements and adopts appropriate measures on the basis of rec-
ommendations from the Standing Committee. The self-assessment
also includes an evaluation of the fitness and propriety of the individ-
ual members.
The Supervisory Board takes all decisions based on a simple ma-
jority. The special requirements for appointing members to the Board
of Management, as stipulated in the German Co-Determination Act,
and the requirement to have a Conciliation Committee do not apply
to an SE. In the event of a tie, the casting vote lies with the Chairman
of the Supervisory Board, who at Allianz SE must be a shareholder
representative. If the Chairman is not present in the event of a tie, the
casting vote lies with the vice chairperson from the shareholder side.
A second vice chairperson is elected on the proposal of the employee
representatives.
The Board of Management reports regularly and comprehen-
sively to the Supervisory Board on business development, the com-
pany's financial position and earnings, planning and achievement of
objectives, business strategy, and risk exposure. Details on the Board
of Management's reporting to the Supervisory Board are laid down
in the information rules issued by the Supervisory Board.
The German Co-Determination Act ("Mitbestimmungsgesetz") does not
apply to Allianz SE because it has the legal form of a European Com-
pany (SE). Instead, the size and composition of the Supervisory Board is
determined by general European SE regulations. These regulations are
implemented in the Statutes and by the SE Agreement.
Principles and function of the Supervisory Board
Important decisions of the Board of Management require ap-
proval by the Supervisory Board. These requirements are stipulated
by law, by the Statutes, or in individual cases by decisions of the An-
nual General Meeting (AGM). Supervisory Board approval is required,
for example, for certain capital transactions, intercompany agree-
ments, and the launch of new business segments or the closure of
existing ones. Approval is also required for acquisitions of companies
and holdings in companies, as well as for divestments of Group com-
panies that exceed certain threshold levels. The Agreement concern-
ing the Participation of Employees in Allianz SE, in the version dated
3 July 2014 (hereinafter "SE Agreement"), requires the approval of the
Supervisory Board for the appointment of the member of the Board
of Management responsible for employment and social welfare.
B_Corporate Governance
Annual Report 2017 - Allianz Group
12
12
The Allianz Group runs its operating entities and business segments
via an integrated management and control process. The Holding and
the operating entities first define the business strategies and goals.
On this basis, joint plans are then prepared for the Supervisory
Board's consideration when setting targets for the performance-
based remuneration of the members of the Board of Management.
For details, see the Remuneration Report starting on > page 23.
Implementing the Group investment strategy,
including monitoring group-wide invest-
ment activities as well as approving invest-
ment-related frameworks and guidelines
and individual investments within certain
thresholds.
- Two further shareholder representatives
(Herbert Hainer, Jim Hagemann Snabe)
- Two employee representatives (Gabriele
Burkhardt-Berg, Jürgen Lawrenz)
The Supervisory Board comprises twelve members, including six
shareholder representatives appointed by the AGM. The six
employee representatives are appointed by the SE works council. The
specific procedure for their appointment is laid down in
the SE Agreement. This agreement stipulates that the six employee
representatives must be allocated in proportion to the number of
Allianz employees in the different countries. The Supervisory Board
currently in office comprises four employee representatives from
Germany and one each from France and the United Kingdom. Ac-
cording to §17 (2) of the German SE Implementation Act ("SE-
Ausführungsgesetz"), the Supervisory Board of Allianz SE shall be
composed of at least 30% women and at least 30% men.
AUDIT COMMITTEE
71
- Chairman: appointed
Designing, monitoring, and improving
group-wide compensation systems in line
with regulatory requirements and sub-
mitting an annual report on the results of
its monitoring, along with proposals for
improvement.
- Two employee representatives (Gabriele
Burkhardt-Berg, Rolf Zimmermann)
- Three shareholder representatives
(in addition to Jim Hagemann Snabe:
Michael Diekmann, Dr. Friedrich Eichiner)
- Chairman: appointed by the Supervisory
Board (Jim Hagemann Snabe)
5 members
- Two further shareholder representatives
(Christine Bosse, Jim Hagemann Snabe)
of the Supervisory Board (Michael
Diekmann)
- Chairman: Chairman
NOMINATION COMMITTEE
3 members
-One employee representative (Rolf
Zimmermann)
5 members
One further shareholder representative
(Herbert Hainer)
Chairman: Chairman
- Chairman: appointed by the Supervisory
Board (Michael Diekmann)
-Three shareholder representatives
(in addition to Michael Diekmann:
Christine Bosse, Dr. Friedrich Eichiner)
Two employee representatives (Godfrey
Hayward, Jürgen Lawrenz)
PERSONNEL COMMITTEE
3 members
5 members
RISK COMMITTEE
Two employee representatives
(Jean-Jacques Cette, Martina Grundler)
Dr. Friedrich Eichiner: Sophie Boissard,
Michael Diekmann)
representatives (in addition to
- Three shareholder
(Dr. Friedrich Eichiner)
by the Supervisory Board
of the Supervisory Board (Michael
Diekmann)
Responsibilities
Function of the Board of Management
GROUP COMPENSATION COMMITTEE
Board members of Allianz SE and executives
below Allianz SE Board level
of the European Company (SE)
Corporate Constitution
Good corporate governance is essential for sustainable business
performance. The Board of Management and the Supervisory Board
of Allianz SE thus attach great importance to complying with the
recommendations of the German Corporate Governance Code (re-
ferred to hereinafter as the "Code"). The Declaration of Conformity
with the recommendations of the Code, issued by the Board of Man-
agement and the Supervisory Board on 14 December 2017, and the
company's position regarding the Code's suggestions can be found in
the Statement on Corporate Management pursuant to § 315d and
§ 289f of the HGB starting on
page 17.
CORPORATE GOVERNANCE REPORT
B_Corporate Governance
11
Annual Report 2017 - Allianz Group
B
CORPORATE GOVERNANCE
Annual Report 2017 - Allianz Group
110
10
1_Generally, we regard memberships in other supervisory bodies as "comparable" if the company is listed on a stock exchange or has more than 500 employees.
since 31 January 2017
Allianz Suisse Lebensversicherungs-Gesellschaft AG
Allianz Suisse Versicherungs-Gesellschaft AG
Allianz Tiriac Asigurari S.A.
Allianz Elementar Versicherungs-AG (Chairman)
Allianz Investmentbank AG
Allianz Elementar Lebensversicherungs-AG (Chair-
man)
Membership in comparable¹ supervisory bodies
Membership in Group bodies
Allianz Investment Management SE
Allianz Deutschland AG (Chairman)
Membership in Group bodies
As a European Company, Allianz SE is subject to special European SE
regulations and the German SE Implementation Act ("SE-
Ausführungsgesetz") in addition to the German SE Employee In-
volvement Act ("SE-Beteiligungsgesetz"). However, the main features
of a German stock corporation - in particular the two-tier board
system (Board of Management and Supervisory Board) and the
principle of equal employee representation on the Supervisory Board
- have been maintained by Allianz SE.
As of 31 December 2017
The Board of Management of Allianz SE comprises nine members. It
is responsible for setting business objectives and the strategic direc-
tion, for coordinating and supervising the operating entities, and for
implementing and overseeing an efficient risk management system.
The Board of Management also prepares the annual financial
statements of Allianz SE, the Allianz Group's consolidated financial
statements, the market value balance sheet, and the interim report.
The members of the Board of Management are jointly responsi-
ble for management and for complying with legal requirements.
Notwithstanding this overall responsibility, the individual members
head the departments they have been assigned independently.
There are divisional responsibilities for business segments as well as
functional responsibilities. The latter include the Finance, Risk Man-
agement and Controlling Functions, Investments, Operations in-
cluding IT -, Human Resources, Legal, Compliance, Internal Audit,
and Mergers & Acquisitions. Business division responsibilities focus on
geographical regions or Global Lines, such as Asset Management.
Rules of procedure specify in more detail the structure and depart-
mental responsibilities of the Board of Management.
Group committees
Group committees
In the financial year 2017, the following Group committees were in
place:
In addition to Board committees, there are also Group committees.
They are responsible for preparing decisions for the Board of Man-
agement of Allianz SE, submitting proposals for resolutions, and
ensuring a smooth flow of information within the Group.
Managing and overseeing Group M&A
transactions, including approval of
individual transactions within certain
thresholds.
Developing, proposing, implementing
and monitoring a group-wide IT strategy,
approving relevant IT investments.
Preparation of the capital and liquidity
planning for the Group and Allianz SE,
implementing and overseeing the
principles of group-wide capital and
liquidity planning, as well as investment
strategy and preparing risk strategy.
This includes, in particular, significant
individual investments and guidelines for
currency management, Group financing
and internal Group capital management,
as well as establishing and overseeing a
group-wide risk management and
monitoring system including dynamic
stress tests.
Responsibilities
As of 31 December 2017
Dr. Dieter Wemmer.
GROUP INVESTMENT COMMITTEE
Members of the Board of Management and
executives below Allianz SE Board level
AND ACQUISITIONS COMMITTEE
Dr. Helga Jung (Chairwoman),
Oliver Bäte,
Dr. Werner Zedelius.
Dr. Axel Theis,
Dr. Dieter Wemmer,
GROUP IT COMMITTEE
Dr. Christof Mascher (Chairman),
Jacqueline Hunt,
Dr. Günther Thallinger,
Dr. Axel Theis.
GROUP FINANCE AND RISK COMMITTEE
Dr. Dieter Wemmer (Chairman),
Sergio Balbinot,
Board committees
Board Committees
BOARD OF MANAGEMENT AND GROUP COMMITTEES
In the financial year 2017, the following Board of Management
committees were in place:
Board of Management meetings are led by the Chairman. Each
member of the Board may request a meeting, providing notification
of the proposed subject. The Board takes decisions by a simple ma-
jority of participating members. In the event of a tie, the Chairman
casts the deciding vote. The Chairman can also veto decisions, but he
cannot impose any decisions against the majority vote.
-
GROUP MERGERS
Responsibilities
Publication of details of members' participation in meetings
- Preparation of the Declaration of Conformity
100
2/2
Michael Diekmann (Member from 7 May 2017)
100
7/7
Dante Barban (Member until 3 May 2017)
Rolf Zimmermann (Vice Chairman)
Jim Hagemann Snabe (Vice Chairman from 3 May 2017)
100
2/2
Gabriele Burkhardt-Berg
100
3/3
Dr. Wulf H. Bernotat (Vice Chairman and member until 3 May 2017)
100
2/2
Jim Hagemann Snabe (Chairman)
100
4/4
TECHNOLOGY COMMITTEE (FROM 3 MAY 2017)
100
7/7
100
Dr. Friedrich Eichiner
2/2 100
100
7/7
100
7/7
86
6/7
86
6/7
100
4/4
3/3
Herbert Hainer (Member from 3 May 2017)
Dr. Friedrich Eichiner
Jean-Jacques Cette
Gabriele Burkhardt-Berg
Christine Bosse
Sophie Boissard (Member from 3 May 2017)
100
2/2
Rolf Zimmermann
100
3/3
Martina Grundler
-Approval of certain transactions which require the
approval of the Supervisory Board, e.g. capital
measures, acquisitions, and disposals of
participations
Dr. Helmut Perlet (Chairman and member until 6 May 2017)
PLENARY SESSIONS OF THE SUPERVISORY BOARD
13
Annual Report 2017 - Allianz Group
- Support of the Supervisory Board in monitoring the
implementation of the Board of Management's
technology and innovation strategy.
- In-depth monitoring of the Board of Management's
technology and innovation strategy
- Regular exchange regarding technological
developments
- Selection of suitable candidates for election to the
Supervisory Board as shareholder representatives
the composition of the Supervisory Board
- Establishment of selection criteria for shareholder
representatives on the Supervisory Board in
compliance with the Code's recommendations on
- Setting of concrete objectives for the composition
of the Supervisory Board
-Approval of the assumption of other mandates.
by Board of Management members
- Long-term succession planning for the Board of
Management
- Conclusion, amendment, and termination of service
contracts of Board of Management members
unless reserved for the plenary session
compensation of Board of Management members
- Preparation of plenary session resolutions on the
compensation system and the overall
- Preparation of the appointment of Board of
Management members
- Initial review of the Risk Report and other risk-
related statements in the annual financial
statements and management reports of Allianz SE
and the Allianz Group, informing the Audit
Committee of the results of such reviews
- Monitoring of the general risk situation and special
risk developments in the Allianz Group
-Monitoring of the effectiveness of the risk
management system
- Monitoring of the audit procedures, including
the independence of the auditor and the services
additionally rendered, awarding of the audit
contract and determining the focal points of the
audit
- Initial review of the annual Allianz SE and consoli-
dated financial statements, management reports
(incl. Risk Report) and the dividend proposal,
review of half-yearly reports or, where applicable,
quarterly financial reports or statements
-Monitoring of the financial reporting process,
the effectiveness of the internal control and audit
system and legal and compliance issues
- Preparation of the efficiency review of the
Supervisory Board
pursuant to § 161 "Aktiengesetz" (German Stock
Corporation Act) and checks on corporate
governance
B_Corporate Governance
PUBLICATION OF DETAILS OF MEMBERS'
PARTICIPATION IN MEETINGS
The Supervisory Board considers it good corporate governance to
publish the details of individual members' participation in plenary
sessions and committee meetings:
FC Bayern München AG
100
2/2
100
1/1
Godfrey Hayward (Member from 3 May 2017)
Jürgen Lawrenz
%
Presence
100
2/2
Dr. Friedrich Eichiner
Michael Diekmann (Chairman and member from 7 May 2017)
100
100
1/1
100
1/1
100
1/1
%
Presence
Michael Diekmann (Chairman and member from 7 May 2017)
Dr. Helmut Perlet (Chairman and member until 3 May 2017)
Dante Barban (Member until 3 May 2017)
Christine Bosse
RISK COMMITTEE
2/2
and SE administrative boards in Germany
until 31 December 2017
Central & Eastern Europe
GODFREY ROBERT HAYWARD
Sportradar AG (Chairman)
Membership in comparable¹ supervisory bodies
Accenture Plc
FC Bayern München AG
Deutsche Lufthansa AG
Membership in other statutory supervisory boards
and SE administrative boards in Germany
Member of various Supervisory Boards
since 3 May 2017
HERBERT HAINER
National Representative Insurances, ver.di Berlin
MARTINA GRUNDLER
Membership in comparable¹ supervisory bodies
Festo Management AG
Member of various Supervisory Boards
Membership in other statutory supervisory boards
and SE administrative boards in Germany
Festo AG
DR. FRIEDRICH EICHINER
Membership in comparable¹ supervisory bodies
Membership in Group bodies
Allianz France S.A.
of Allianz France S.A.
Chairman of the Group Works Council
JEAN-JACQUES CETTE
Chairwoman of the Group Works Council of Allianz SE
Membership in other statutory supervisory boards
and SE administrative boards in Germany
Allianz Deutschland AG
GABRIELE BURKHARDT-BERG
Member of various Supervisory Boards
Membership in comparable¹ supervisory bodies
P/F BankNordik (Chairwoman)
TDC A/S
since 3 May 2017
Employee of Allianz Insurance plc
PROF. DR. RENATE KÖCHER
until 3 May 2017
Head of "Institut für Demoskopie Allensbach"
A_To our Investors
9
Annual Report 2017 - Allianz Group
1_Generally, we regard memberships in other supervisory bodies as "comparable" if the company is listed on a stock exchange or has more than 500 employees.
of Allianz SE
Chairman of the (European) SE Works Council
Vice Chairman
ROLF ZIMMERMANN
(formerly named Allianz Managed Operations &
Services SE)
Allianz Technology SE
CHRISTINE BOSSE
Membership in Group bodies
(formerly named Allianz Managed Operations & Ser-
vices SE)
Employee of Allianz Technology SE
JÜRGEN LAWRENZ
Robert Bosch GmbH
Nestlé Deutschland AG
Infineon Technologies AG
BMW AG
and SE administrative boards in Germany
Membership in other statutory supervisory boards
(Allensbach Institute)
Membership in other statutory supervisory boards
and SE administrative boards in Germany
MANDATES OF THE MEMBERS
Segesta SpA (Korian Group company, Chairwoman)
Senior Living Group NV (Korian Group company)
Membership in other statutory supervisory boards
and SE administrative boards in Germany
Curanum AG (Korian Group company, Chairwoman)
Membership in comparable¹ supervisory bodies
Groupe Société des Autoroutes du Nord et de l'Est de
la France (Sanef)
Linde AG
Fresenius SE & Co. KGaA
Fresenius Management SE
BASF SE
and SE administrative boards in Germany
Membership in other statutory supervisory boards
Member of various Supervisory Boards
Chairman
since 7 May 2017
MICHAEL DIEKMANN
GEA Group AG (Chairman)
Commerzbank AG
and SE administrative boards in Germany
Membership in other statutory supervisory boards
Member of various Supervisory Boards
Chairman
until 6 May 2017
DR. HELMUT PERLET
A_To our Investors
OF THE SUPERVISORY BOARD
MANDATES OF THE MEMBERS
until 10 May 2017
Siemens AG
DR. WULF H. BERNOTAT
until 3 May 2017
Chairwoman of the Board of Management of
Korian S.A.
since 3 May 2017
SOPHIE BOISSARD
Employee of Allianz S.p.A.
DANTE BARBAN
until 3 May 2017
until 13 September 2017
Bang & Olufsen A/S
28 March 2017)
Siemens AG (Chairman since 31 January 2018)
Membership in comparable¹ supervisory bodies
A.P. Møller-Mærsk A/S (Chairman since
until 30 June 2017
until 30 June 2017
Membership in other statutory supervisory boards
and SE administrative boards in Germany
SAP SE
Vice Chairman since 3 May 2017
JIM HAGEMANN SNABE
Vonovia SE (Chairman)
Deutsche Telekom AG
Bertelsmann SE & Co. KGaA
Bertelsmann Management SE
and SE administrative boards in Germany
Membership in other statutory supervisory boards
Member of various Supervisory Boards
Vice Chairman
Member of various Supervisory Boards
Membership in other statutory supervisory boards
OF THE BOARD OF MANAGEMENT
Chairman of the Board of Management
Allianz Irish Life Holdings plc
until 31 December 2017
Allianz Insurance plc (Chairman)
until 31 December 2017
Allianz Australia Ltd.
Membership in Group bodies
Allianz Global Corporate & Specialty SE (Chairman)
Membership in comparable¹ supervisory bodies
since 1 January 2018
Allianz Investment Management SE
since 1 January 2018
Allianz Deutschland AG (Chairman)
Membership in Group bodies
Membership in other statutory supervisory boards
and SE administrative boards in Germany
ProCurand GmbH & KGaA (Chairman)
since 1 January 2018
Central & Eastern Europe
Insurance German Speaking Countries and
until 31 December 2017
Global Insurance Lines & Anglo Markets
DR. AXEL THEIS
Allianz S.p.A
Membership in comparable¹ supervisory bodies
Membership in Group bodies
The Nomination Committee did not convene any meetings in the
2017 financial year.
Allianz Elementar Lebensversicherungs-AG
(Chairman)
since 1 January 2018
Insurance German Speaking Countries and
until 31 December 2017
DR. WERNER ZEDELIUS
UBS Group AG
Membership in comparable¹ supervisory bodies
Allianz Investment Management SE
until 11 April 2017
Allianz Asset Management AG
Membership in Group bodies
Membership in other statutory supervisory boards
and SE administrative boards in Germany
since 1 July 2017
Finance, Controlling, Risk
DR. DIETER WEMMER
Euler Hermes Group S.A. (Chairman)
since 30 November 2017
Allianz Suisse Versicherungs-Gesellschaft AG
since 30 November 2017
Allianz Suisse Lebensversicherungs-Gesellschaft AG
since 28 November 2017
Allianz Investmentbank AG
since 1 January 2018
Allianz Elementar Versicherungs-AG (Chairman)
until 31 December 2017
OLIVER BÄTE
Allianz Investment Management SE (Chairman)
Allianz Lebensversicherungs-AG
Allianz Asset Management AG
DR. HELGA JUNG
Allianz Life Insurance Company of North America
(Chairwoman)
Membership in comparable¹ supervisory bodies
Membership in Group bodies
Asset Management, US Life Insurance
JACQUELINE HUNT
Allianz Yasam ve Emeklilik A.S.
Allianz Sigorta A.S.
Allianz France S.A.
Membership in Group bodies
UniCredit S.p.A.
Bajaj Allianz Life Insurance Co. Ltd.
Bajaj Allianz General Insurance Co. Ltd.
Membership in comparable¹ supervisory bodies
until 31 December 2017
Insurance Middle East, Africa
Asia Pacific
Insurance Western & Southern Europe,
SERGIO BALBINOT
Allianz Deutschland AG
and SE administrative boards in Germany
Membership in Group bodies
Membership in other statutory supervisory boards
Insurance Iberia & Latin America, Legal, Compliance,
Mergers & Acquisitions
Membership in other statutory supervisory boards
and SE administrative boards in Germany
Deutsche Telekom AG
Membership in Group bodies
Membership in other statutory supervisory boards
and SE administrative boards in Germany
Membership in Group bodies
Investment Management
DR. GÜNTHER THALLINGER
Finance, Controlling, Risk
since 1 January 2018
GIULIO TERZARIOL
since 10 January 2018
since 1 January 2018
Allianz p.l.c.
Membership in comparable¹ supervisory bodies
Membership in Group bodies
Allianz Australia Ltd.
Global Insurance Lines & Anglo Markets,
Reinsurance, Middle East, Africa
until 11 April 2017
since 1 January 2018
Allianz Partners S.A.S. (formerly named Allianz
Worldwide Partners S.A.S.)
Allianz Technology SE (formerly named Allianz Man-
aged Operations & Services SE), Chairman
Membership in comparable¹ supervisory bodies
Membership in Group bodies
Membership in Group bodies
Membership in other statutory supervisory boards
and SE administrative boards in Germany
Volkswagen Autoversicherung AG
DR. CHRISTOF MASCHER
Operations, Allianz Partners
Allianz Compañía de Seguros y Reaseguros S.A.
Companhia de Seguros Allianz Portugal S.A.
Allianz Global Corporate & Specialty SE
Membership in comparable¹ supervisory bodies
Membership in Group bodies
Allianz Deutschland AG
until 11 April 2017
Allianz Asset Management AG (Chairwoman)
NIRAN PEIRIS
5/7
TECHNOLOGY COMMITTEE
- familiarity of members in their entirety with the insurance and financial services sector;
adequate expertise of the entire board with respect to investment management, insurance
actuarial practice, and accounting;
- at least one member with considerable experience in the insurance and financial services fields;
at least one member with comprehensive expertise in the fields of accounting or auditing;
- specialist expertise or experience in other economic sectors;
managerial or operational experience.
2. Diversity concept
To promote an integrative cooperation among the Supervisory Board members, the Supervisory
Board aims at an adequate diversity with respect to gender, internationality, different occupational
backgrounds, professional expertise, and experience:
- The Supervisory Board shall be composed of at least 30% women and at least 30% men. The
representation of women is generally considered to be the joint responsibility of the shareholder
and employee representatives.
At least four of the members must, on the basis of their origin or function, represent regions or
cultural areas in which Allianz SE conducts significant business.
For Allianz SE as a Societas Europaea, the agreement concerning the participation of employees in
Allianz SE provides the following: Allianz employees from different EU member states be
considered in the allocation of employee representatives' Supervisory Board seats.
- In order to provide the Board with the most diverse sources of experience and specialist
knowledge possible, the members of the Supervisory Board shall complement each other with
respect to their background, professional experience, and specialist knowledge."
Annual Report 2017 - Allianz Group
In addition to the expertise-related requirements for the individual members, the following shall
apply with respect to expertise and experience of the entire Supervisory Board:
15
The composition of the Supervisory Board of Allianz SE reflects these
objectives. According to the assessment by the Supervisory Board, all
shareholder representatives, i.e. Ms. Boissard, Ms. Bosse as well as Mr.
Diekmann, Dr. Eichiner, Mr. Hainer and Mr. Snabe, are independent
within the meaning of the objectives (see No. 1.3.). With four female
Supervisory Board members, the current legislation for equal partici-
pation of women and men in leadership positions (statutory gender
quota of 30%) is being met. In addition, the Supervisory Board has
five members with international backgrounds. The skills profile is also
met by all current members of the Supervisory Board. The current
composition of the Supervisory Board and its committees is described
on > page 7.
Directors' dealings
Members of the Board of Management and the Supervisory Board are
obliged by the E.U. Market Abuse Directive to disclose to both Allianz SE
and the German Federal Financial Supervisory Authority any transac-
tions involving shares or debt securities of Allianz SE or financial deriva-
tives or other instruments based on them, as soon as the value of the
securities acquired or divested by the member amounts to five thousand
Euros or more within a calendar year. These disclosures are published on
our website at > www.allianz.com/directorsdealings.
Annual General Meeting
Shareholders exercise their rights at the Annual General Meeting.
When adopting resolutions, each share carries one vote. Sharehold-
ers can follow the AGM's proceedings on the internet and be repre-
sented by proxies. These proxies exercise voting rights exclusively on
the basis of instructions given by the shareholder. Shareholders are
also able to cast their votes via the internet in the form of online
voting. Allianz SE regularly promotes the use of internet services.
The AGM elects the shareholder representatives of the Supervi-
sory Board and approves the actions taken by the Board of Man-
agement and the Supervisory Board. It decides on the use of profits,
capital transactions, the approval of intercompany agreements, the
remuneration of the Supervisory Board, and changes to the compa-
ny's Statutes. In accordance with European regulations and the Stat-
utes, changes to the Statutes require a two-thirds majority of votes
cast in case less than half of the share capital is represented in the
AGM. Each year, an ordinary AGM takes place at which the Board of
Management and Supervisory Board give an account of the preced-
ing financial year. For special decisions, the German Stock Corpora-
tion Act provides for the convening of an extraordinary AGM.
Accounting and auditing
The Allianz Group prepares its accounts according to § 315e of the
German Commercial Code ("Handelsgesetzbuch HGB") on the
basis of International Financial Reporting Standards (IFRS) as
adopted within the European Union. The annual financial statements
of Allianz SE are prepared in accordance with German law, in par-
ticular the HGB.
In compliance with special legal provisions that apply to insur-
ance companies, the auditor of the annual financial statements and
of the half-yearly financial report is appointed by the Supervisory
Board, not by the AGM. The audit of the financial statements covers
the individual financial statements of Allianz SE and also the consoli-
dated financial statements of the Allianz Group.
B_Corporate Governance
To ensure maximum transparency, we inform our shareholders,
financial analysts, the media, and the general public about the com-
pany's situation on a regular basis and in a timely manner. The annu-
al financial statements of Allianz SE, the Allianz Group's consolidated
financial statements, and the respective management reports are
published within 90 days of the end of each financial year. Additional
information is provided in the Allianz Group's half-yearly financial
reports and quarterly statements. Information is also made available
at the AGM, at press and analysts' conferences, as well as on the
Allianz Group's website. Our website also provides a financial calen-
dar listing the dates of major publications and events, such as annual
reports, half-yearly financial reports and quarterly statements, AGMs
as well as analyst conference calls and financial press conferences.
You can find the 2018 financial calendar on our website at
> www.allianz.com/financialcalendar.
1. Profile of skills and expertise for the entire Supervisory Board
According to regulatory provisions, no more than two former Allianz SE Management Board
members shall be members of the Supervisory Board.
Regarding employee representatives, the mere fact of employee representation and the existence
of a working relationship with the company shall not in itself affect the independence of the
employee representatives.
Applying such definition, at least eight members of the Supervisory Board shall be independent. In
case shareholder representatives and employee representatives are viewed separately, at least four
members respectively should be independent.
It has to be considered that the possible emergence of conflicts of interests in individual cases cannot
generally be excluded. Potential conflicts of interest must be disclosed to the Chairman of the
Supervisory Board and will be resolved by appropriate measures.
4. Time of availability
Each member of the Supervisory Board must ensure that they have sufficient time to dedicate to the
proper fulfilment of the mandate of this Supervisory Board position.
In addition to the mandatory mandate limitations and the GCGC recommendation for active
Management Board members of listed companies (max. three mandates) the common capital
markets requirements shall be considered.
With respect to the Allianz SE mandate, the members shall ensure that
they can attend at least four, usually six ordinary Supervisory Board meetings per year, each of
which requires adequate preparation;
they have sufficient time for the audit of the annual and consolidated financial statements;
- they can attend the General Meeting;
II. Requirements for the entire Supervisory Board
overall Supervisory Board, also to be established due to a new
recommendation of the Code, the diversity concept in accordance
with the legislation regarding the implementation of the E.U. guide-
line as regards the disclosure of non-financial and diversity infor-
mation (CSR Directive) is also included:
The following requirements and objectives apply to the composition of Allianz SE's Supervisory
Board:
depending on possible membership in one or more of the current six Supervisory Board special
committees, this involves extra time planning to participate in these Committee meetings and do
the necessary preparation for these meetings; this applies in particular for the Audit and risk
Committees;
they can attend extraordinary meetings of the Supervisory Board or of a special committee to
deal with special matters as and when required.
5. Retirement age
The members of the Supervisory Board shall, as a rule, not be older than 70 years of age.
6. Term of membership
The continuous period of membership for any member of the Supervisory Board should, as a rule,
not exceed 15 years.
7. Former Allianz SE Management Board members
Former Allianz SE Management Board members are subject to the mandatory corporate law cooling-
off period of two years.
Employee representation within Allianz SE according to the Agreement concerning the Participation
of Employees in Allianz SE contributes to diversity of work experience and cultural background.
Pursuant to the provisions of the German SE Participation Act (SEBG) the number of women and
men appointed as German employee representatives should be proportional to the number of
women and men working in the German companies. However, the Supervisory Board does not have
the right to select the employee representatives.
Members of the Supervisory Board of Allianz SE in office for more than 15 years shall not be
deemed independent.
Regulatory requirements
16
COMPLIANCE PROGRAM
The sustained success of the Allianz Group is based on the responsi-
ble behavior of all Group employees, who embody trust, respect, and
integrity. Through the global compliance program coordinated by its
central compliance function, Allianz supports and follows interna-
tionally and nationally recognized guidelines and standards for rules-
compliant and value-based corporate governance. These include the
principles of the United Nations (UN Global Compact), the Guidelines
of the Organization for Economic Co-operation and Development
(OECD guidelines) for Multinational Enterprises, and European and
international standards on data and consumer protection, economic
and financial sanctions, and combating corruption, bribery, money
laundering as well as the financing of terrorism. Through its support
for and acceptance of these standards, Allianz aims to avoid the risks
that might arise from non-compliance. The central compliance func-
tion is responsible - in close cooperation with local compliance de-
partments - for ensuring the effective implementation and monitor-
ing of the compliance program within the Allianz Group, as well as for
investigating potential compliance infringements.
The standards of conduct established by the Allianz Group's
Code of Conduct for Business Ethics and Compliance are binding for
all employees worldwide. The Code of Conduct is available on our
website at www.allianz.com/corporate-governance.
Annual Report 2017 - Allianz Group
17
B_Corporate Governance
The Code of Conduct and the internal guidelines derived from it
provide all employees with clear guidance on behavior that lives up
to the values of the Allianz Group. In order to transmit the principles
of the Code of Conduct and the internal compliance program based
on these principles, Allianz has implemented interactive training
programs around the world. These provide practical guidelines which
enable employees to come to their own decisions. The Code of Con-
duct also forms the basis for guidelines and controls to ensure fair
dealings with Allianz Group customers (sales compliance).
There are legal regulations against corruption and bribery in
almost all countries in which Allianz has a presence. The global
Anti-Corruption Program of the Allianz Group ensures the continu-
ous monitoring and improvement of the internal anti-corruption
controls. More information on the Anti-Corruption Program can be
found in the Sustainability Report on our website at
> www.allianz.com/sustainability.
A major component of the Allianz Group's compliance program
is a whistleblower system that allows employees and third parties to
alert the relevant compliance department confidentially about irreg-
ularities. No employee voicing concerns about irregularities in good
faith needs to fear retribution, even if the concerns turn out to be
unfounded at a later date. Third parties can contact the compliance
department via an electronic mailbox on our website at:
> www.allianz.com/complaint-system.
In addition, the quality of our internal control system is assessed
by the Allianz Group's Internal Audit Function. This function conducts
independent, objective assurance and consulting activities, analyzing
the structure and efficiency of the internal control systems as a whole.
In addition, it also examines the potential for additional value and
improvement of our organization's operations. Fully compliant with
all international auditing principles and standards, Internal Audit
contributes to the evaluation and improvement of the effectiveness of
the risk management, control, and governance processes. Therefore,
internal audit activities are geared towards helping the company to
mitigate risks, and further assist in strengthening its governance
processes and structures.
DESCRIPTION OF THE FUNCTIONS OF THE BOARD OF
MANAGEMENT AND THE SUPERVISORY BOARD AND
OF THE COMPOSITION AND FUNCTIONS OF THEIR
COMMITTEES
A general description of the functions of the Board of Manage-
ment, the Supervisory Board, and their committees can be found in
the Corporate Governance Report starting :: :::: :D:D:D:D:D: Chelate 12, and on
our website at www.allianz.com/corporate-governance.
Information in accordance with the German Act
on Equal Participation of Women and Men in
Executive Positions in the Private and the Public
Sector
Allianz SE and the other companies of the Allianz Group in Germany
that are either listed or subject to co-determination (the "subsidiaries
concerned") have set the following targets for the Supervisory Board,
the Board of Management, and the two management levels below
the Board of Management. We will begin by describing the targets
that had been set for 30 June 2017 and their implementation.
Article 17 (2) of the German SE Implementation Act stipulates
that as of 1 January 2016, the share of women and men among the
members of the Supervisory Board of Allianz SE must each total up to
30% at least. The Supervisory Board currently in office fulfils this
requirement as it includes four women (33%). For the Board of Man-
agement of Allianz SE, the Supervisory Board had set a target of 11%
for the percentage of women up until 30 June 2017. This target was
exceeded, as the percentage of women on the Board of Manage-
ment was 22%. As regards the proportion of women on the two man-
agement levels below the Board of Management, a target of 20%
had been set. As of 30 June 2017, this target was met for the second
management level, with a percentage of women being 24%, but not
on the first level, where the percentage was 17%. The first manage-
ment level below the Board of Management comprises a very small
comparative group of executives. No suitable female candidates
could be identified for the very few positions that became vacant in
the period considered.
For the Supervisory Boards of the subsidiaries concerned, target
quotas were set at 29% on average up until 30 June 2017. Seven of
the nine subsidiaries concerned reached this target. The listed com-
pany Oldenburgische Landesbank AG met the applicable statutory
minimum share requirement. The target quotas for the Board of
Management of the subsidiaries concerned were between 11% and
25% (18% on average) and were met by only five of the ten compa-
nies. For the two management levels below the Board of Manage-
ment, the Boards of Management of the subsidiaries concerned had
set a target quota of at least 20%. At the first management level, the
target was met by three of the ten subsidiaries, while six of the ten
companies met the target set for the second management level as of
30 June 2017. Despite increased efforts to promote women in the
Allianz Group and also at the individual subsidiaries, it was not possi-
ble to achieve the targets in these cases, as it was not always possible
to identify suitable female candidates for all vacant positions.
The following new targets were set for Allianz SE and the subsidiaries
concerned in the 2017 financial year:
For the Supervisory Board of Allianz SE, the statutory minimum
share requirement applies. With respect to the Board of Manage-
ment of Allianz SE, the Supervisory Board adopted a resolution in
August 2017 setting the target for the share of women at 30%, to be
achieved by 31 December 2021. As regards the proportion of women
on the first and second management levels below the Board of
Management, the Board of Management of Allianz SE set the tar-
gets at 20% and 25%, respectively, for 31 December 2018.
The Supervisory Boards of the subsidiaries concerned set a tar-
get share of women on the Supervisory Board at a minimum of 30%,
to be reached by the end of 2018. Given the targets achieved to date,
the target quotas were raised for the Management Boards of three of
the subsidiaries concerned. For the other companies, the current
target quotas of between 11% and 25% (20% on average) were
maintained and extended to 31 December 2018. The Boards of
Management of the subsidiaries concerned have set target quotas
for the relevant management levels of between 20% and 33% in
each case to be reached by 31 December 2018. In the longer term,
Allianz aims to place women in at least 30% of the positions at these
two management levels throughout the Group.
A description of the composition of the Supervisory Board and its
committees can be found on CD①CHECK Cage 7 and 9 of the Annual Report.
A description of the composition of the Board of Management can
be found on > page 10, while the composition of the Committees of
the Board of Management is described in the Corporate Governance
Report starting on > page 12. This information is also available on
our website at www.allianz.com/corporate-governance.
The regulatory requirements for corporate governance applicable for
insurance companies, insurance groups, and financial conglomerates
are additionally important. Specifically, they include the establish-
ment and further design of significant control functions (risk man-
agement, actuarial function, compliance, and internal audit) as well
as general principles for a sound business organization. The regulato-
ry requirements are applicable throughout the Group in principle and
have been implemented using written guidelines issued by the Board
of Management of Allianz SE. Since the 2016 financial year, a market
value balance sheet has to be prepared at solo and group level,
which has to be examined and reported on separately by the audi-
tors. Details on the implementation of the regulatory requirements for
corporate governance by Allianz SE and by the Allianz Group can be
found in the Solvency and Financial Condition Report of Allianz SE
and of the Allianz Group, which are published on our website at
> www.allianz.com/sfcr.
The Allianz Group has an effective internal risk and control system for
verifying and monitoring its operating activities and business pro-
cesses, in particular financial reporting, as well as compliance with
regulatory requirements. The requirements placed on the internal
control systems are essential not only for the resilience and franchise
value of the company, but also to maintain the confidence of the
capital market, our customers, and the public. A comprehensive risk
and control management system regularly also assesses the effec-
tiveness and appropriateness of the internal control system as part of
the System of Governance. For further information on our risk organi-
zation and risk principles, please refer ::::D:D:D:D:D:D:D::actice: 62. For further
information on our Controls over Financial Reporting, please refer to
page 77.
Corporate governance practices
16
Annual Report 2017 - Allianz Group
B_Corporate Governance
STATEMENT ON CORPORATE MANAGEMENT
PURSUANT TO § 315d AND § 289f OF THE HGB
The Statement on Corporate Management pursuant to § 315d and
§ 289f of the German Commercial Code ("Handelsgesetzbuch -
HGB") forms part of the Group Management Report. According to
§ 317(2), sentence 6 of the HGB, this Statement and therefore is not
included within the scope of the audit.
Declaration of Conformity with the German
Corporate Governance Code
On 14 December 2017, the Board of Management and the Super-
visory Board issued the following Declaration of Conformity of
Allianz SE with the German Corporate Governance Code (herein-
after the "Code"):
Declaration of Conformity in accordance with § 161 of the German
Stock Corporation Act
"Declaration of Conformity by the Management Board and the Supervisory Board of
Allianz SE with the recommendations of the German Corporate Governance Code
Commission in accordance with § 161 of the German Stock Corporation Act (AktG)
INTERNAL CONTROL SYSTEMS
1. Allianz SE currently complies with all recommendations of the German Corporate
Governance Code (Code) in the version of February 7, 2017 and will comply with them
in the future.
Munich, December 14, 2017
Allianz SE
For the Board of Management:
Signed Oliver Bäte
For the Supervisory Board:
Signed Michael Diekmann"
Signed Dr. Helga Jung
In addition, Allianz SE follows all the suggestions of the Code in its
7 February 2017 version.
The Declaration of Conformity and further information on corpo-
rate governance at Allianz can be found on our website at
> www.allianz.com/corporate-governance.
The listed company Oldenburgische Landesbank AG, which be-
longed to the Allianz Group in the 2017 financial year, issued its own
Declaration of Conformity in December 2017, which states that it
complies with all of the recommendations of the Code in the version
of 7 February 2017.
2. Since the last Declaration of Conformity as of December 15, 2016, Allianz SE has
complied with all recommendations of the German Corporate Governance Code in the
version of May 5, 2015
18
- Former members of the Allianz SE Board of Management shall not be deemed independent during
the mandatory corporate law cooling-off period.
The GCGC defines a person as independent, who, in particular, does not have any business or
personal relations with Allianz SE or its executive bodies, a controlling shareholder, or an enterprise
associated with the latter, which may cause a substantial and not merely temporary conflict of
interest.
Prof. Dr. Renate Köcher (Member until 3 May 2017)
0/1
0
Jürgen Lawrenz (Member from 3 May 2017)
2/2
100
Jim Hagemann Snabe (Member from 3 May 2017)
2/2
100
100
Rolf Zimmermann (Member until 3 May 2017)
100
PERSONNEL COMMITTEE
Michael Diekmann (Chairman and member from 7 May 2017)
Dr. Helmut Perlet (Chairman and member until 6 May 2017)
Christine Bosse (Member until 3 May 2017)
Herbert Hainer (Member from 3 May 2017)
Rolf Zimmermann
3/3
100
1/1
1/1
100
2/2
100
100
Godfrey Hayward (Member from 3 May 2017)
Prof. Dr. Renate Köcher (Member until 3 May 2017)
Jürgen Lawrenz
4/4
100
2/3
67
7/7
100
Herbert Hainer (Member from 3 May 2017)
STANDING COMMITTEE
2/2
100
Dr. Helmut Perlet (Chairman and member until 6 May 2017)
1/1
100
Dr. Wulf H. Bernotat (Member until 3 May 2017)
Gabriele Burkhardt-Berg
1/1
100
3/3
Michael Diekmann (Chairman and member from 7 May 2017)
To further specify the definition of independence, the Supervisory Board of Allianz SE states the
following:
1/1
3/3
2/2
100
14
Annual Report 2017 - Allianz Group
B_Corporate Governance
OBJECTIVES OF THE SUPERVISORY BOARD
REGARDING ITS COMPOSITION
The objectives for the composition of the Supervisory Board in the
version of August 2017, as specified to implement a recommendation
by the Code, are as follows. In addition to the skills profile for the
Objectives of Allianz SE's Supervisory Board regarding its composition
"The aim of Allianz SE's Supervisory Board is to have members who are equipped with the necessary
skills and competence to properly supervise and advise Allianz SE's management. Supervisory Board
candidates should possess the professional expertise and experience, integrity, motivation and
commitment, independence and personality required to successfully carry out the responsibilities of a
Supervisory Board member in a financial services institution with international operations.
100
These objectives take into account the regulatory requirements for the composition of the Supervisory
Board as well as the relevant recommendations of the German Corporate Governance Code
("GCGC"). In addition to the requirements for each individual member, a profile of skills and expertise
("Kompetenzprofil") as well as a diversity concept is provided for the entire Supervisory Board.
1. Propriety
The members of the Supervisory Board must be proper as defined by the regulatory provisions. A
person is assumed to be proper as long as no facts are to be known which may cause impropriety.
Therefore, no personal circumstances shall exist which - according to general experience - lead to the
assumption that the diligent and orderly exercise of the mandate may be affected (in particular
administrative offenses or violation of criminal law, esp. in connection with commercial activity).
2. Fitness
The members of the Supervisory Board must have the expertise and experience necessary for a
diligent and autonomous exercise of the Allianz SE Supervisory Board mandate, in particular for
exercising control of and giving advice to the Board of Management as well as for the active support
of the development of the company. This comprises in particular:
adequate expertise in all business areas;
adequate expertise in the insurance and finance sector or comparable relevant experience and
expertise in other sectors;
- adequate expertise in the regulatory provisions material for Allianz SE (supervisory law, including
Solvency II regulation, corporate and capital markets law, corporate governance);
ability to assess the business risks;
- knowledge of accounting and risk management basics.
3. Independence
I. Requirements relating to the individual members of the Supervisory Board
100
2/2
80
100
4/4
100
AUDIT COMMITTEE
Dr. Friedrich Eichiner (Chairman and member from 3 May 2017)
3/3
100
Dr. Wulf H. Bernotat (Chairman and member until 3 May 2017)
Sophie Boissard (Member from 3 May 2017)
2/2
Dr. Helmut Perlet (Member until 3 May 2017)
Jim Hagemann Snabe (Member until 3 May 2017)
100
67
Jean-Jacques Cette
5/5
100
Michael Diekmann (Member from 7 May 2017)
3/3
100
Martina Grundler
4/5
2/3
Annual Report 2017 - Allianz Group
4/4
Digital by Default,
Payout¹
grant
Grant
Actual
Dr. Helga Jung (Appointed: 01/2012)
€ thou (total might not sum up due to rounding)
Individual remuneration: 2017 and 2016
B_Corporate Governance
Annual Report 2017 - Allianz Group
27
7 Jacqueline Hunt joined Allianz on 1 July 2016. She received a pro-rated base salary, annual bonus, MTB tranche, and equity-related compensation. The different pro-rated amounts for base salary and target amounts result from different pro-rating
methodologies, which are generally applied. In addition to the amounts disclosed in the table, Jacqueline Hunt received a buyout award of € 170 thou in 2016 to compensate for forfeited grants from her previous employer.
8_Jacqueline Hunt received an off-cycle one-time payment of € 120 thou to reimburse her for relocation cost.
6 In addition to the amounts disclosed in the table, Sergio Balbinot received a buyout award of € 6 mn to compensate for forfeited grants from his previous employer: € 3 mn in cash and € 3 mn in RSUs. 50% of the cash amount was paid in February
2015 and 50% was paid in 2016 and are subject to clawback.
2,008
1,126
3,853
4,460
1,085
3,335
1,801
317
159
317
317
317
317
159
1,691
967
3,536
2016
4,143
2017
2016
764
764
764
764
764
764
764
Total fixed compensation
Perquisites
14
14
14
14
14
14
14
750
750
750
750
750
750
750
Base salary
Max
Min
Target
Target
2017
2017
768
3,018
1,642
750
750
750
377
932
983
932
18
18
18
1368
18
782
772
772
772
772
782
772
511
768
768
768
|
768
511
768
750
750
1,125
932
750
1,125
377
923
1,125
750
923
1,125
750
377
923
456
923
1,125
374
2,078
365
2,130
Annual variable compensation
374
3,942
374
1,146
3,396
3,397
374
365
1,704
1,765
3,568
4,147
772
3,022
3,032
750
932
374
4,521
Annual bonus
750
750
AEI 2012/RSU³
AEI 2017/RSU³
AEI 2018/RSU³
MTB (2016-2018)²
Deferred compensation
885
13
973
885
1,125
750
750
Annual bonus
Annual variable compensation
777
778
777
777
777
777
778
Total fixed compensation
27
28
27
27
27
27
28
GEI 2010/SAR4
Total
Pensions service cost
Total
28
1 In accordance with the German Corporate Governance Code, the annual bonus disclosed for performance year 2017 is paid in 2018 and for performance year 2016 in 2017. The payments for equity-related deferred compensation (GEI and AEI),
however, are disclosed for the year in which the actual payment was made.
2_The MTB figure included in the Actual Grant column shows the annual accrual.
3_Payout is capped at 200% above grant price. The relevant share price used to determine the fair market value, and hence the final number of RSUs granted, and the 200% cap are only available after sign-off by the external auditors.
4_The equity-related remuneration that applied before 2010 consisted of two vehicles, virtual stock awards known as RSUs and virtual stock options known as "Stock Appreciation Rights" (SAR). Only RSUs have been awarded as of 1 January 2010. The
remuneration system valid until December 2009 is disclosed in the Annual Report 2009 (starting on page 17). Whereas the GEI/RSU grants are automatically exercised at the vesting date, the GEI/SAR grants are exercised by the Board member
within the exercise period following the vesting date. Hence the total payout from SARS depends on the individual decision by the Board member. SARS are released to plan participants upon expiry of the vesting period, assuming all other exercise
hurdles are met. For SARS granted until and including 2008, the vesting period was two years and the exercise period five years. SARS can be exercised on the condition that the price of the Allianz SE stock is at least 20% above the strike price at the
time of grant. During the term of the plan, at least once on five consecutive trading days the Allianz SE stock must relatively appreciate at least 0.01 percentage points ahead of the appreciation of the Dow Jones EURO STOXX Price Index (600).
5_Pension service cost in accordance with IAS 19: represents the company cost not the actual entitlement nor a payment, however, according to the German Corporate Governance Code the Pension Service Cost is to be included in all columns.
2,163
2,233
3,933
4,653
1,278
3,528
501
482
501
501
501
501
Perquisites
482
3,510
1,751
3,432
4,152
777
3,027
3,028
750
885
1,125
750
885
1,125
750
750
1,662
1,125
750
750
Pensions service cost
3,279
1,653
3,363
4,139
764
3,014
3,014
Total
GEI 2010/SAR
AEI 2012/RSU³
1,649
750
866
1,125
750
866
1,125
750
750
AEI 2013/RSU³
AEI 2017/RSU³
AEI 2018/RSU³
MTB (2016-2018)²
Deferred compensation
866
889
866
1,125
420
431
431
431
750
750
750
750
Base salary
Max
Min
Target
Target
2017
2016
2017
2017
2016
750
Payout¹
Grant
Actual
Dr. Axel Theis (Appointed: 01/2015)
3,710
2,073
3,794
4,570
1,195
3,445
3,434
Total
431
420
431
grant
22
32
22
"For the composition of the Management Board, the Supervisory
Board aims for an adequate Diversity of Minds". This comprises
broad diversity with regard to gender, internationality as well as
educational and professional background.
The Supervisory Board assesses the achievement of such target, inter
alia, on the basis of the following specific indicators:
adequate proportion of women on the Management Board: at
least 30% until December 31st, 2021;
adequate share of members with an international background
(e.g. based on origin or extensive professional experience
abroad), ideally with connection to the regions in which Allianz
Group is operating;
adequate diversity with regard to educational and professional
background, taking into account the limitations for the Superviso-
ry Board by regulatory requirements (fitness)."
This diversity concept is implemented in the appointment procedure
for members of the Board of Management by the Supervisory Board.
It is ensured that lists of successors shall comprise an appropriate
percentage of female candidates as well as candidates with interna-
tional experience. The Personnel Committee takes this into considera-
tion especially in succession planning. The current composition of the
Board of Management is in accordance with the diversity concept: Its
share of women is currently 22%. Six members of the Management
Board have international backgrounds. There is an adequate degree
of variety as regards educational and professional background.
The diversity concept for the Supervisory Board was approved by the
Supervisory Board in August 2017 and included in the objectives for
the composition of the Supervisory Board (see No. 11.2 of the objec-
tives for the composition of the Supervisory Board on > page 15).
The Supervisory Board pursues these objectives, and thus also the
diversity concept, nominating the candidates for the shareholder
representatives. As the employee representatives are appointed
according to different national provisions, there is only limited poten-
tial influence to the selection of employee representatives. The Su-
pervisory Board is currently composed in accordance with the diversi-
ty concept. For details please see the Corporate Governance Report
on > page 12.
Annual Report 2017 - Allianz Group
B_Corporate Governance
19
B_Corporate Governance
TAKEOVER-RELATED STATEMENTS AND
EXPLANATIONS
The following information is provided pursuant to § 289a (1) and
§ 315a (1) of the German Commercial Code ("Handelsgesetzbuch -
HGB") and § 176(1) of the German Stock Company Act ("Aktieng-
esetz - AktG").
COMPOSITION OF SHARE CAPITAL
As of 31 December 2017, the share capital of Allianz SE was
€ 1,169,920,000. It was divided into 440,249,646 registered and fully
paid-up shares with no-par value. All shares carry the same rights and
obligations. Each no-par value share carries one vote.
RESTRICTIONS ON VOTING RIGHTS AND SHARE
TRANSFERS; EXERCISE OF VOTING RIGHTS IN CASE
OF EMPLOYEE EQUITY PARTICIPATIONS
Shares may only be transferred with the consent of the company. An
approval duly applied for may only be withheld if it is deemed neces-
sary in the company's interest on exceptional grounds. The applicant
will be informed of the reasons.
Shares acquired by employees of the Allianz Group as part of
the Employee Stock Purchase Plan are, in principle, subject to a one-
year lock-up period. Outside Germany, the lock-up period may be up
to five years in some cases. In some countries, the employee shares
are held by a bank, another natural person, or a legal entity acting as
a trustee throughout that period in order to ensure that the lock-up
period is observed. Nevertheless, employees may instruct the trustee
to exercise voting rights, or have power of attorney granted to them
to exercise such voting rights. Lock-up periods serve the Employee
Stock Purchase Plan's aims of tying employees to the company and
letting them benefit from the performance of the share price.
INTERESTS IN THE SHARE CAPITAL
EXCEEDING 10% OF THE VOTING RIGHTS
We are not aware of any direct or indirect interests in the share capi-
tal of Allianz SE that exceed 10% of the voting rights.
SHARES WITH SPECIAL RIGHTS
CONFERRING POWERS OF CONTROL
There are no shares with special rights conferring powers of control.
LEGAL AND STATUTORY PROVISIONS APPLICABLE
TO THE APPOINTMENT AND REMOVAL OF MEMBERS
OF THE BOARD OF MANAGEMENT AND TO
AMENDMENTS OF THE STATUTES
The Supervisory Board appoints the members of Allianz SE's Board of
Management for a maximum term of five years (Articles 9(1), 39(2)
and 46 of the SE Regulation, §§ 84, 85 AktG and § 5(3) of the Stat-
utes). Reappointments, for a maximum of five years each, are permit-
ted. A simple majority of the votes cast in the Supervisory Board is
required to appoint members of the Board of Management. In the
case of a tie vote, the Chairperson of the Supervisory Board, who
pursuant to Article 42 of the SE Regulation must be a shareholder
representative, shall have the casting vote (§ 8 (3) of the Statutes). If
the Chairperson does not participate in the vote the Vice Chairperson
shall have the casting vote, provided he or she is a shareholder repre-
sentative. A Vice Chairperson who is an employee representative has
no casting vote (§ 8(3) of the Statutes). If one of the required mem-
bers of the Board of Management is missing, the courts must appoint
such member in urgent cases upon the application of an interested
party (§ 85 AktG). The Supervisory Board may dismiss members of the
Board of Management if there is an important reason (§ 84(3) AktG).
According to § 5(1) of the Statutes, the Board of Management
shall consist of at least two persons. The Supervisory Board deter-
mines the number of any additional members. The Supervisory Board
has appointed a Chairman of the Board of Management pursuant to
§ 84(2) AktG.
German insurance supervisory law requires that members of the
Board of Management have the reliability and professional compe-
tence needed to manage an insurance company. A person cannot
become a member of the Board of Management if he or she is al-
ready a manager of two other insurance undertakings, pension funds,
insurance holding companies, or insurance special-purpose vehicles.
However, the supervisory authority may permit more than two such
mandates if they are held within the same group (§ 24(3) of the
German Insurance Supervision Act ("Versicherungsaufsichtsgesetz
VAG")). The Federal Financial Services Supervisory Authority ("Bun-
desanstalt für Finanzdienstleistungsaufsicht - BaFin") must be noti-
fied about the intention of appointing a Board of Management
member pursuant to § 47 No. 1 VAG.
Amendments to the Statutes must be adopted by the General
Meeting. § 13 (4) of the Statutes of Allianz SE stipulates that, unless
this conflicts with mandatory law, changes to the Statutes require a
two-thirds majority of the votes cast, or, if at least one half of the
share capital is represented, a simple majority of the votes cast. The
Statutes thereby make use of the option set out in § 51 of the SE
Implementation Act ("SE-Ausführungsgesetz - SEAG"), which is based
upon Article 59(1) and (2) of the SE Regulation. A larger majority is
required, inter alia, for a change in the corporate object or the reloca-
tion of the registered office to another E.U. member state (§ 51 SEAG).
The Supervisory Board may alter the wording of the Statutes
(§ 179(1) AktG and § 10 of the Statutes).
20
The Supervisory Board stipulated the following diversity concept
for the Board of Management of Allianz SE in August 2017:
In accordance with the legislation to implement the European CSR
Directive, the diversity concepts for the Board of Management and
the Supervisory Board, their objectives, implementation, and results
achieved are to be reported on for the first time for the 2017 financial
year.
Diversity concepts for the Board of Management
and Supervisory Board
Growth Engines,
2016
Payout¹
grant
Grant
Actual
Oliver Bäte (Appointed: 01/2008; CEO since 05/2015)
All variable components are granted in accordance with the
rules and conditions of the "Allianz Sustained Performance Plan"
(ASPP). Depending on individual and company performance, the
amounts actually paid can vary between 0% and 150% of the respec-
tive target levels. If performance is rated at 0% no variable compo-
nent will be granted. Consequently, the minimum total direct com-
pensation for a regular member of the Board of Management will
equal the base salary of € 750 thou (excluding perquisites and pen-
sion contributions), while the maximum total direct compensation
(excluding perquisites and pension contributions) is € 4,125 thou: a
€ 750 thou base salary plus € 3,375 thou (i.e., 150% of the sum of all
three variable compensation components at target level). The CEO's
maximum total direct compensation (excluding perquisites and
pension contributions) is € 6,188 thou: a € 1,125 thou base salary plus
€ 5,063 thou (150% of the sum of all three variable compensation
components at target level).
€ thou (total might not sum up due to rounding)
Individual remuneration: 2017 and 2016
The following remuneration disclosure, which is based on and com-
pliant with the German Corporate Governance Code, shows the
individual Board members' remuneration for 2016 and 2017 includ-
ing fixed and variable remuneration and pension service cost. The
"Grant" column below shows the remuneration at target, minimum,
and maximum levels. The "Payout" column discloses the 2016 and
2017 payments. The base salary, annual bonus, and perquisites are
linked to the reported performance years, 2016 and 2017, whereas
the Group Equity Incentive (GEI) and Allianz Equity Incentive (AEI)
payouts result from grants related to the performance years 2010,
2012 and 2013. To enhance transparency of the remuneration relat-
ed to the performance year 2017, the additional column "Actual
grant" includes the 2017 fixed compensation, the annual bonus paid
for 2017, the MTB 2016 - 2018 tranche accrued for the performance
year 2017, and the fair value of the RSU grant value for the perfor-
mance year 2017.
REMUNERATION FOR 2017
B_Corporate Governance
Annual Report 2017 - Allianz Group
25
20
Perquisites mainly consist of contributions to accident and liability
insurances and the provision of a company car. Perquisites are not
linked to performance. Each member of the Board of Management is
responsible for paying the income tax due on these perquisites. The
Supervisory Board regularly reviews the level of perquisites.
From 1 January 2005 until 31 December 2014, most Board of Man-
agement members participated in a contribution-based system which
was frozen as of 31 December 2014, now only covering disability and
death. Before 2005, a defined benefit plan provided fixed benefits not
linked to base salary increases. Benefits generated under this plan were
frozen at the end of 2004. Additionally, most Board members participat-
ed in Allianz Versorgungskasse VVaG (AVK), a contribution-based pen-
sion plan, and in Allianz Pensionsverein e.V. (APV); both these plans were
closed for new entries on 1 January 2015.
For members of the Allianz SE Board of Management who were
born before 1 January 1958 and for the rights accrued before 2015,
the guaranteed minimum interest rate remains at 2.75% and the
retirement age is still 60.
To provide competitive and cost-effective retirement and disability
benefits, company contributions to the current pension plan “My
Allianz Pension" are invested in a fund with a guarantee for the con-
tributions paid, but no further interest guarantee. Upon retirement,
the accumulated capital is paid out as a lump sum or, alternatively,
can be converted into a lifetime annuity. Each year the Supervisory
Board decides whether and to what extent a budget is provided, also
taking into account the target pension level. This budget includes a
risk premium paid to cover death and disability. The earliest age a
pension can be drawn is 62, except for cases of occupational or
general disability for medical reasons. In these cases, it may become
payable earlier and an increase by projection may apply. In the case
of death, a lump sum - again convertible into an annuity - will be
paid to dependents. Should Board membership cease before retire-
ment age for other reasons, the accrued pension rights are main-
tained if vesting requirements are met.
PENSIONS AND SIMILAR BENEFITS
B_Corporate Governance
Annual Report 2017 - Allianz Group
2_The relevant share price used to determine the final number of RSUs granted and the 200 % cap is available only after
sign-off by the external auditors.
1 In addition, the fair market value of the RSUS is subject to a small reduction of a few Euro cents due to the 200% cap on
the RSU payout. This reduction is calculated based on a standard option pricing formula.
24
The fair market value is calculated based on the ten-trading-day
average Xetra closing price of the Allianz stock for the ten days fol-
lowing the financial press conference where our annual results are
publicized. As RSUs are virtual stock without dividend payments
during the vesting period, the average Xetra closing price is reduced¹
by the net present value of the expected future dividend payments
during the vesting period. The expected dividend stream is discount-
ed with the swap rates as of the valuation day. Following the end of
the four-year vesting period, the company makes a cash payment
based on the number of RSUs granted, as well as on the ten-day
average Xetra closing price of the Allianz stock following the annual
financial press conference in the year of expiry of the respective RSU
plan. To avoid extreme payouts, the RSU payout level is capped at
200% of the grant price.² Outstanding RSU holdings are forfeited,
should a Board member leave at his/her own request or be terminat-
ed for cause.
Equity-related remuneration is a virtual share award referred to as
"Restricted Stock Units" (RSUs) with a deferred payout after four
years. The grant value of the RSUs allocated equals the annual bonus
of the previous year, i.e. the grant value is also capped at 150% of the
respective target level. The number of RSUs allocated is derived by
dividing the grant value by the fair market value of an RSU at the
time of grant.
Equity-related remuneration
For the MTB, an amount is typically accrued that is identical to the
annual bonus. However, the accrual as such may be subject to ad-
justments, for example, if it is foreseeable that the mid-term sustaina-
bility criteria are not met or exceeded. The annual accrual is capped
at 150% of the respective target level.
Inclusive Meritocracy (including gender diversity and women in
leadership).
PERQUISITES
2017
Annual Report 2017 - Allianz Group
AUTHORIZATION OF THE BOARD OF MANAGEMENT
TO ISSUE AND REPURCHASE SHARES
REMUNERATION PRINCIPLES
Key principles underlying the Board of Management remuneration
are as follows:
Alignment of pay and performance: The performance-based,
variable component shall form a significant portion of the overall
remuneration.
Variable remuneration focused on sustainability and aligned
with shareholder interests: A major part of the variable remu-
neration shall reflect longer-term performance with an adequate
deferred payout. Furthermore, a substantial portion shall reward
the sustained performance of the share price.
Support of the Group's strategy: The design of the performance
targets must reflect the Allianz Group's business strategy.
In light of the above, the Supervisory Board determines the structure,
weighting, and level of each remuneration component. In addition,
the Supervisory Board regularly deals with the appropriateness of the
Board of Management's remuneration. For this purpose, we include,
amongst others, remuneration survey data of DAX 30 companies and
international competitors from external consultants. Compensation
levels are oriented towards the third quartile of that peer group,
given Allianz's relative size, complexity, and sustained performance
within that group. Furthermore, when reviewing the adequateness
and appropriateness of the Board of Management's remuneration,
the Supervisory Board takes into account the development of the
Board's remuneration in relation to other remuneration levels within
the Allianz Group.
REMUNERATION STRUCTURE,
COMPONENTS AND TARGET SETTING PROCESS
There are four remuneration components in total, which all have the
same weighting: the base salary and three variable components
the annual bonus, the annualized mid-term bonus, and the equity-
related remuneration. The target level of each of the variable com-
ponent does not exceed the base salary, so the total target variable
compensation is three times the base salary at maximum.
BASE SALARY
The base salary is not performance-based. It is paid in twelve month-
ly installments.
VARIABLE REMUNERATION
The variable remuneration (annual bonus, mid-term bonus, and
equity-related compensation) is designed to reward performance. A
shortfall of targets may result in the variable compensation dropping
to zero. Two thirds of the variable compensation are a deferred pay-
out after three or four years. Claw-back clauses for compensation
components already paid do not exist because according to the
governing German labor law, the enforceability of claw-back clauses
is subject to major legal restrictions.
On the other hand, the payout of variable remuneration is sub-
ject to a limit and capped at 150% of the respective target levels for
the annual bonus and the mid-term bonus, as well as at a 200%
increase in value of the grant price for the equity-related remunera-
tion.
Variable remuneration components may not be paid, or pay-
ment may be restricted, in the case of a breach of the Allianz Code of
Conduct or regulatory Solvency II policies or standards, including risk
limits. Additionally, a reduction or cancellation of variable remunera-
tion may occur if the supervisory authority (BaFin) requires this in
accordance with its statutory powers.
Annual Report 2017 - Allianz Group
23
B_Corporate Governance
Annual bonus
The annual bonus depends on performance in the respective finan-
cial year, and is paid out in the following financial year. The target
level of the annual bonus corresponds to the base salary. Perfor-
mance targets comprise Group and individual targets. Group targets
include - equally weighted - operating profit and net income. Indi-
vidual performance is assessed against qualitative as well as respon-
sibility-related quantitative targets.
For Board of Management members with business division re-
sponsibilities, individual quantitative targets comprise operating
profit, net income, Property-Casualty revenues, and Life new-business
value. For Board of Management members with a functional focus,
division-specific quantitative targets are determined based on their
key responsibilities.
As part of the assessment of the individual qualitative target
achievement, the personal contribution to the Renewal Agenda is
reviewed alongside behavioral aspects. The latter is framed in a
common standard ("People Letter") designed to drive necessary
change across the Allianz Group, and comprises of customer orienta-
tion, collaborative leadership, entrepreneurship, and trust (e.g. with
regard to sustainability, corporate social responsibility, and diversity
as well as integrity).
To support the assessment of the individual qualitative behav-
ioral targets, a so-called multi-rater process has been introduced:
Each member of the Board of Management collects, amongst others,
feedback from his or her fellow Board members and his or her direct
reports as well as the CEOs of the most important operating entities
he or she is in charge of. Furthermore, they perform a self-assessment.
Based on the 2017 target achievement for the Group as a whole
and for the respective business division(s) and/or corporate func-
tion(s) as well as the qualitative performance achieved, total annual
bonus awards range from 111% to 124% of the target bonus, while
the average bonus award amounts to 117% of the target.
Mid-term bonus (MTB)
The mid-term bonus is a variable compensation component with a
deferred payout following a three-year cycle. Sustainable and value-
adding performance is assessed against a predefined criteria cata-
log. The current MTB cycle runs from 2016 until 2018 and is based on
the following measurable sustainability criteria:
"Performance"
Sustainable improvement/stabilization of return on equity (ex-
cluding unrealized gains/losses on bonds, net of shadow ac-
counting),
Compliance with economic capitalization guidance (capitaliza-
tion level and volatility limit).
"Health" (in line with the Renewal Agenda)
True Customer Centricity,
Regarding the activities and decisions taken by the Personnel
Committee and the Supervisory Board, please refer to the Superviso-
ry Board Report starting on > page 4.
The remuneration of the Board of Management is decided upon by
the entire Supervisory Board, based on proposals prepared by the
Personnel Committee. If required, outside advice is sought from inde-
pendent external consultants. The Personnel Committee and the
Supervisory Board consult with the Chairman of the Board of Man-
agement, as appropriate, in assessing the performance and remu-
neration of Board of Management members. However, the Chairman
of the Board of Management is not present when his own remunera-
tion is discussed.
GOVERNANCE SYSTEM
Allianz SE Board of Management remuneration
The Board of Management is authorized to issue shares as well as to
acquire and use treasury shares as follows:
It may increase the company's share capital, on or before
6 May 2019, with the approval of the Supervisory Board, by issuing
new registered no-par value shares against contributions in cash
and/or in kind, on one or more occasions:
-
Up to a total of € 550,000,000 (Authorized Capital 2014/1). In case
of a capital increase against cash contribution, the Board of
Management may exclude the shareholders' subscription rights
for these shares with the consent of the Supervisory Board, (i) for
fractional amounts, (ii) in order to safeguard the rights pertaining
to holders of convertible bonds or bonds with warrants, including
mandatory convertible bonds, and (iii) in the event of a capital in-
crease of up to 10%, if the issue price of the new shares is not sig-
nificantly below the stock market price. The Board of Manage-
ment may furthermore exclude the shareholders' subscription
rights with the consent of the Supervisory Board, in the event of a
capital increase against contributions in kind.
Up to a total of € 13,720,000 (Authorized Capital 2014/II). The
shareholders' subscription rights can be excluded in order to issue
the new shares to employees of Allianz SE and its Group compa-
nies, as well as for fractional amounts.
The company's share capital is conditionally increased by up to
€ 250,000,000 (Conditional Capital 2010/2014). This conditional
capital increase will only be carried out to the extent that conversion
or option rights are exercised (or conversion obligations fulfilled)
resulting from bonds issued by Allianz SE or its subsidiaries, based on
the authorizations granted by the General Meeting on 5 May 2010
and 7 May 2014.
The Board of Management may buy back and use Allianz shares
for other purposes until 6 May 2019 as per authorization of the Gen-
eral Meeting of 7 May 2014 (§ 71 (1) No. 8 AktG). Together with other
treasury shares that are held by Allianz SE, or which are attributable
to it under §§ 71a et seq. AktG, such shares may not exceed 10% of
the share capital at any time. The shares acquired pursuant to this
authorization may be used, under exclusion of the shareholders'
subscription rights, for any legally admissible purposes, in particular
those specified in the authorization. Furthermore, the acquisition of
treasury shares under this authorization may also be carried out using
derivatives such as put options, call options, forward purchases, or a
combination thereof, provided such derivatives do not relate to more
than 5% of the share capital.
Domestic or foreign banks that are majority-owned by Allianz SE
may buy and sell Allianz shares for trading purposes (§ 71(1) No. 7
and (2) AktG) under an authorization of the General Meeting valid
until 6 May 2019. The total number of shares acquired thereunder,
together with treasury shares held by Allianz SE or attributable to it
under §§ 71a et seq. AktG, shall at no time exceed 10% of the share
capital of Allianz SE.
ESSENTIAL AGREEMENTS OF ALLIANZ SE WITH
CHANGE-OF-CONTROL CLAUSES AND
COMPENSATION AGREEMENTS PROVIDING FOR
TAKEOVER SCENARIOS
The following essential agreements of the company are subject to a
change-of-control condition following a takeover bid:
-
Our reinsurance contracts, in principle, include a clause under
which both parties to the contract have an extraordinary termina-
tion right, if and when the counterparty merges or its ownership
or control situation changes materially. Agreements with brokers
regarding services connected with the purchase of reinsurance
cover also provide for termination rights in case of a change of
control. Such clauses are standard market practice.
Allianz SE is also party to various bancassurance distribution
agreements for insurance products in various regions. These dis-
tribution agreements normally include a clause under which the
parties have an extraordinary termination right in the event of a
change of control of the other party's ultimate holding company.
Shareholder agreements and joint ventures to which Allianz SE is
a party often contain change-of-control clauses that provide, as
the case may be, for the termination of the agreement, or for put
or call rights that one party can exercise with regard to the joint
venture or the target company, if there is a change of control of
the other party.
B_Corporate Governance
The framework agreements between Allianz SE and the subsidi-
aries of various car manufacturers relating to the distribution of
car insurance by the respective car manufacturers each include a
clause under which each party has an extraordinary termination
right in case there is a change of control of the other party.
Bilateral credit agreements in some cases provide for termination
rights if there is a change of control, mostly defined as the acquisi-
tion of at least 30% of the voting rights within the meaning of
§ 29(2) of the German Takeover Act ("Wertpapiererwerbs- und
Übernahmegesetz - WpÜG"). If such termination rights are exer-
cised, the respective credit lines have to be replaced by new credit
lines under conditions then applicable.
A change-of-control clause in the service contracts of the mem-
bers of Allianz SE's Board of Management provides that, if within
twelve months after the acquisition of more than 50% of the company's
share capital by one shareholder or several shareholders acting in
concert (change of control) the appointment as a member of the Board
of Management is revoked unilaterally by the Supervisory Board, or if
the mandate is ended by mutual agreement, or if the Management
Board member resigns because his or her responsibilities as a Board
member are significantly reduced through no fault of the Board
member, he or she shall receive his or her contractual remuneration
for the remaining term of the service contract, but limited, for the
purpose hereof, to three years, in the form of a one-off payment.
Annual Report 2017 - Allianz Group
21
B_Corporate Governance
The one-off payment is based on the fixed remuneration plus 50% of
the variable remuneration, with this basis being limited, however, to
the amount paid for the last fiscal year. To the extent that the remain-
ing term of the service contract is less than three years, the one-off
payment is generally increased in line with a term of three years. This
applies accordingly if, within two years of a change of control, a
mandate in the Board of Management comes to an end and is not
extended; the one-off payment will then be granted for the period
between the end of the mandate and the end of the three-year peri-
od following the change of control. For further details, please refer to
the Remuneration Report starting on > page 23.
-
Under the Allianz Sustained Performance Plan (ASPP), Restrict-
ed Stock Units (RSU) – i.e. virtual Allianz shares - are granted as a
stock-based remuneration component to senior management of the
Allianz Group worldwide. The conditions for these RSU contain
change-of-control clauses, which apply when a majority of the voting
share capital in Allianz SE is acquired, directly or indirectly, by one or
more third parties who do not belong to the Allianz Group and which
provide for an exception from the usual vesting and exercise periods.
In line with the relevant general conditions, the company will release
the RSU to plan participants on the day of the change of control,
without observing any vesting period that would otherwise apply. The
cash amount payable per RSU must equal the average market value
of the Allianz share and be equal to or above the price offered per
Allianz share in a preceding tender offer. By providing for the non-
application of the vesting period in the event of a change of control,
the terms take into account the fact that the conditions influencing
the share price are very different when there is a change of control.
22
Annual Report 2017 - Allianz Group
REMUNERATION REPORT
B_Corporate Governance
This remuneration report covers the remuneration arrangements for
the Board of Management and the Supervisory Board of Allianz SE.
The report has been prepared in accordance with the require-
ments of the German Commercial Code, the German Accounting
Standard 17, and the International Financial Reporting Standards
(IFRS). It also takes into account the relevant regulatory provisions
and the recommendations contained in the German Corporate Gov-
ernance Code.
The complete information on Allianz SE Board of Management
remuneration as given below and additional information is provided
on our remuneration website at >> www.allianz.com/remuneration.
The company has entered into the following compensation agree-
ments with members of the Board of Management and certain em-
ployees providing for the event of a takeover bid:
Technical Excellence,
2017
2017
2017
2016
Payout¹
grant
Grant
Payout¹
grant
Grant
Actual
Actual
Jacqueline Hunt (Appointed: 07/2016)'
Sergio Balbinot (Appointed: 01/2015)
B_Corporate Governance
Annual Report 2017 - Allianz Group
26
26
1 In accordance with the German Corporate Governance Code, the annual bonus disclosed for performance year 2017 is paid in 2018 and for performance year 2016 in 2017. The payments for equity-related deferred compensation (GEI and AEI),
however, are disclosed for the year in which the actual payment was made.
2_The MTB figure included in the Actual Grant column shows the annual accrual.
3_Payout is capped at 200% above grant price. The relevant share price used to determine the fair market value, and hence the final number of RSUs granted, and the 200% cap are only available after sign-off by the external auditors.
4_The equity-related remuneration that applied before 2010 consisted of two vehicles, virtual stock awards known as RSUs and virtual stock options known as "Stock Appreciation Rights" (SAR). Only RSUs have been awarded as of 1 January 2010. The
remuneration system valid until December 2009 is disclosed in the Annual Report 2009 (starting on page 17). Whereas the RSU grants are automatically exercised at the vesting date, the GEI/SAR grants are exercised by the Board member within
the exercise period following the vesting date. Hence the total payout from SARS depends on the individual decision by the Board member. SARS are released to plan participants upon expiry of the vesting period, assuming all other exercise hurdles
are met. For SARs granted until and including 2008, the vesting period was two years and the exercise period five years. SARS can be exercised on the condition that the price of the Allianz SE stock is at least 20% above the strike price at the time of
grant. During the term of the plan, at least once on five consecutive trading days the Allianz SE stock must relatively appreciate at least 0.01 percentage points ahead of the appreciation of the Dow Jones EURO STOXX Price Index (600).
5_Pension service cost in accordance with IAS 19: represents the company cost not the actual entitlement nor a payment, however, according to the German Corporate Governance Code the Pension Service Cost is to be included in all columns.
4,983
4,588
5,930
6,843
1,779
5,154
5,155
622
625
622
622
622
2017
2016
2017
2016
22
22
22
32
750
375
750
750
750
750
375
750
750
750
622
750
750
750
Max
Min
Target
Target
Max
Min
Target
Target
2017
2016
2017
2017
750
2016
625
3,963
1,157
1,155
1,157
1,157
1,157
Annual Report 2017 - Allianz Group
1,157
1,155
Total fixed compensation
32
30
32
32
32
32
30
Perquisites
1,125
1,125
1,125
1,125
1,125
1,125
1,125
Base salary
Max
Min
Target
Target
Annual variable compensation
Annual bonus
1,125
1,125
5,308
6,221
1,157
4,532
4,530
1,334
1,820
1,125
1,384
1,688
1,125
1,384
1,688
1,125
4,361
1,125
Pensions service cost
Total
GEI 2010/SAR4
AEI 2012/RSU³
AEI 2013/RSU³
AEI 2017/RSU³
AEI 2018/RSU³
MTB (2016 - 2018)²
Deferred compensation
1,384
1,474
1368
1,384
1,688
Total
18
AEI 2013/RSU³
33
Allianz SE and its subsidiaries (the Allianz Group) offer property-
casualty insurance, life/health insurance, and asset management
products and services in over 70 countries, with the largest of our
operations located in Europe. The Allianz Group insures 88.0 million
customers. Allianz SE, the parent company of the Allianz Group, has
its headquarters in Munich, Germany.
The Allianz Group's structure reflects both our business segments
and geographical regions. Business activities are organized by prod-
uct and type of service, based on how these are strategically man-
aged: insurance activities, asset management activities, and corpo-
rate and other activities. Due to differences in the nature of products,
risks, and capital allocation, insurance activities are further divided
into property-casualty and life/health categories. In accordance with
the responsibilities of the Board of Management, each of the insur-
ance categories is grouped into regional reportable segments. Cor-
porate and other activities are divided into three different reportable
segments in order to differentiate between the respective products,
risks, and capital allocation. In 2017, the Allianz Group had 14 re-
portable segments.
Allianz Group structure -
business segments and reportable segments¹
PROPERTY-CASUALTY
German Speaking Countries and Central
& Eastern Europe
- Western & Southern Europe, Middle East,
Africa, Asia Pacific
Iberia & Latin America
- Global Insurance Lines & Anglo Markets
- Allianz Partners
ASSET MANAGEMENT
- Asset Management
Insurance operations
LIFE/HEALTH
4
German Speaking Countries and Central &
Eastern Europe
- Western & Southern Europe, Middle East,
Africa, Asia Pacific
- Iberia & Latin America
- USA
- Global Insurance Lines & Anglo Markets
CORPORATE AND OTHER
- Holding & Treasury
- Banking
- Alternative Investments
We offer a wide range of property-casualty and life/health insurance
products to both retail and corporate customers. For the Property-
Casualty business segment, these include motor, accident, property,
general liability, travel insurance and assistance services; the
Life/Health business segment offers savings and investment-oriented
products in addition to life and health insurance. We are the leading
property-casualty insurer worldwide and rank among the top five in
the life/health insurance business². Our key markets (in terms of pre-
miums) for both property-casualty and life/health are Germany,
France, Italy, and the United States.
Most of our insurance markets are served by local Allianz com-
panies. However, some business lines - such as Allianz Global Corpo-
rate & Specialty (AGCS), Allianz Partners (AP) (formerly Allianz
Worldwide Partners) and Credit Insurance - are run globally.
Asset Management
Our two major investment management businesses, PIMCO and
AllianzGI, operate under Allianz Asset Management (AAM). We are
one of the largest asset managers in the world that actively manage
assets. Our offerings cover a wide range of equity, fixed income, and
alternative investment products and solutions. Our core markets here
are the United States, Germany, France, Italy, the United Kingdom,
and the Asia-Pacific region.
Allianz Group structure
Corporate and Other
BUSINESS OPERATIONS
35
671.7
61.5
2,179.0
558.2
58.5
2,025.2
Legend: C = Chairperson of the respective committee, M = Member of the respective committee
1_Abbreviations: A - Audit, N - Nomination, P - Personnel, R - Risk, S - Standing, T-Technology
10 Since 3 May 2017
11 Until 3 May 2017
2_Since 7 May 2017
3_Until 6 May 2017
4_Until 3 May 2017
5_Until 3 May 2017
6_Since 3 May 2017
7_Until 3 May 2017
8_Until 3 May 2017
9_Since 3 May 2017
12_Since 4 May 2016
13_Since 3 May 2017
14 Since 1 April 2016
15_Since 3 May 2017
16_Since 3 May 2017
17_Until 3 May 2017
18_Since 3 May 2017
19_The total reflects the remuneration of the full Supervisory Board in the respective year.
REMUNERATION FOR MANDATES IN OTHER ALLIANZ
COMPANIES AND FOR OTHER FUNCTIONS
As remuneration for her membership in the Supervisory Board of
Allianz Deutschland AG, Ms. Gabriele Burkhardt-Berg received
€ 61.8 thou for the financial year 2017. Mr. Jürgen Lawrenz did not
receive any remuneration for his service on the Supervisory Board of
Allianz Technology SE. All current employee representatives of the
Supervisory Board except for Ms. Martina Grundler are employed by
Allianz Group companies and receive a market-based remuneration
for their services.
LOANS TO MEMBERS OF THE SUPERVISORY BOARD
As of 31 December 2017, there was one outstanding loan granted to
a member of the Allianz SE Supervisory Board by an Allianz Group
company: It is an € 80 thou mortgage loan from Allianz Bank, grant-
ed at the normal market interest rate in 2010, with an overall dura-
tion of ten years.
34
Annual Report 2017 - Allianz Group
GROUP MANAGEMENT REPORT
C
Annual Report 2017 - Allianz Group
C_Group Management Report
1,445.9
1,408.2
The Corporate and Other business segment's activities include the
management and support of the Allianz Group's businesses through
its central holding functions, as well as Banking and Alternative In-
vestments.
Holding & Treasury manages and supports the Group's businesses
through its strategy, risk, corporate finance, treasury, financial report-
ing, controlling, communication, legal, human resources, technology,
and other functions.
Insurance German Speaking Countries, Insurance
Central & Eastern Europe
German Speaking Countries
Germany²
Austria
Switzerland
Central & Eastern Europe
Bulgaria
Croatia
Czech Republic
Hungary
Poland
Romania
Slovakia
US life insurance
United States
Global insurance lines & Anglo markets
United Kingdom
Australia
Ireland
Allianz Global Corporate &
Specialty
Credit Insurance
Reinsurance
Russia
Ukraine
Kenya
Madagascar
Mali
Morocco
Allianz Partners
Senegal
Allianz Partners
India
Asset Management
■
India
Ivory Coast
HOLDING & TREASURY
Ghana
Central Africa
BANKING
Our banking operations, which place a primary focus on retail clients,
support our insurance business and complement the products we
offer in Germany, Italy, France, and Bulgaria. The sale of Olden-
burgische Landesbank AG was closed on 7 February 2018. Hence, we
now no longer have banking operations in Germany.
ALTERNATIVE INVESTMENTS
Alternative Investments provides global alternative investment man-
agement services in the private equity, real estate, renewable energy,
and infrastructure sectors, mostly on behalf of our insurance opera-
tions.
1_For further information on organizational changes, please refer to the Executive Summary of 2017 Results.
2_Based on currently available peer data. Final peer analysis not available until after publication of this Annual Report.
36
Annual Report 2017 - Allianz Group
C_Group Management Report
Worldwide presence and business segments
Market presence of our business operations¹
Insurance Western & Southern Europe, Insurance
Middle East, Africa, Asia Pacific
Europe
Italy
-
Greece
Turkey
France
Belgium
The Netherlands
Luxembourg
Middle East, North Africa & India
--
Africa
Egypt
Lebanon
Saudi Arabia
Benin
Burkina Faso
Cameroon
Congo Brazzaville
2016
2017
124.5
25,902
1,612
5,111
33,701
4,594
4,890
33,311
4,560
49,385
249,360
20,933
Dr. Werner Zedelius
Total
1_The relevant share price used to determine the fair market value, and hence the final number of RSUs granted, is only
available after sign-off of the Annual Report by the external auditors, thus numbers are based on a best estimate. As
disclosed in the Annual Report 2016, the equity-related grant in 2017 was made to participants as part of their 2016
remuneration. The disclosure in the Annual Report 2016 was based on a best estimate of the RSU grants. The actual
grants deviated from the estimated values and have to be disclosed accordingly. The actual RSU grants as of 3 March
2017 under the Allianz Equity Incentive are as follows: Oliver Bäte: 11,038, Sergio Balbinot: 7,359, Jacqueline Hunt:
3,417, Dr. Helga Jung: 6,657, Dr. Christof Mascher: 6,516, Dr. Axel Theis: 7,289, Dr. Dieter Wemmer: 7,148, Dr. Werner
Zedelius: 7,148.
2_Grants of equity-related remuneration are accounted for as cash settled awards. The fair market value of the granted
RSUS and SARS is remeasured at each reporting date and accrued, as a compensation expense, proportionately over
the vesting and service period. Upon vesting, any subsequent changes in the fair value of the unexercised SARs are
also recognized as a compensation expense.
30
30
Annual Report 2017 - Allianz Group
B_Corporate Governance
PENSIONS
Company contributions for the current pension plan are set at 50% of
the base salary, reduced by an amount covering the disability and
death risk. They are invested in a fund and include a guarantee for
the contributions paid, but no further interest guarantee (for mem-
bers of the Board of Management who were born before 1 January
1958, the guaranteed minimum interest rate remains at 2.75% p.a.).
For members with pension rights in the frozen defined-benefit plan,
Individual pensions: 2017 and 2016
€ thou (total might not sum up due to rounding)
the above contribution rates are reduced by 19% of the expected
annual pension from that frozen plan. The Allianz Group paid € 4 mn
(2016: € 5 mn) to increase reserves for pensions and similar benefits
for active members of the Board of Management. As of
31 December 2017, reserves for pensions and similar benefits for
active members of the Board of Management amounted to € 41 mn
(2016: € 44 mn).
Defined benefit pension plan
(frozen)
Contribution-based
pension plan
(frozen)¹
Current pension
plan
AVK/APV 2
Transition
payment ³
Total
Ex-
5,222
pected
100.0
Annual Report 2017 - Allianz Group
Equity
compensation
expense 2017
RSU
€ thou²
Number of
RSU granted
Number of
RSU held at
on 2/3/2018¹
31/12/2017¹
8,164
40,714
2,607
5,498
41,479
2,412
5,443
3,417
291
Dr. Helga Jung
5,111
28,696
1,932
Dr. Christof Mascher
4,890
30,623
2,091
Dr. Günther Thallinger
5,056
11,517
834
Dr. Axel Theis
Dr. Dieter Wemmer
The Chairperson and members of the Supervisory Board committees
receive additional committee-related remuneration. The committee-
related remuneration is as follows:
annual
pension
pay-
51
594
625
4,511
Sergio Balbinot
2017
14
28
357
961
3
6
1
374
995
2016
5
39
357
582
2
33.3
4.5
137.8
M
2016
100.0
20.0
4.5
36
5
818
536
Board of Management
ment
SC5
DBO 6
SC5
DBO 6
SC5
DBO6
SC5
DBO 6
SC5
DBO6
SC5
DBO6
Asia Pacific
Oliver Bäte
45
3,149
536
36
1,385
6
36
36
675
622
5,245
2016
33
3,063
2017
Oliver Bäte
Sergio Balbinot
Jacqueline Hunt
China
Hong Kong3
768
501
7,810
25
774
482
7,493
Dr. Dieter Wemmer
2017
497
2,339
2
11
499
2,350
2016
477
1,832
2
10
479
1,842
Dr. Werner Zedelius
2017
225
221
6,711
466
5,671
25
11
22
9
2017
27
1,311
284
570
7
32
318
1,914
2016
Dr. Axel Theis
2017
120
114
3,332
16
2,537
334
889
11
283
2016
120
107
3,422
6
2,528
334
535
233
Dr. Günther Thallinger
246
716
TERMINATION OF SERVICE -
DETAILS OF THE PAYMENT ARRANGEMENTS
Transition payment (appointment before 1 January 2010)
Board members who receive a transition payment are subject to a
six-month non-compete clause.
The transition payment comprises an amount corresponding to
the most recent base salary, covering a period of six months, plus
25% of the target variable remuneration at the notice date. A Board
member with a base salary of € 750 thou would receive a maximum
of € 937.5 thou.
Where an Allianz pension is immediately payable, transition
payment amounts are offset against it.
Severance payment cap
Payments for early termination to Board members with a remaining
term of contract of more than two years are capped at twice the
annual compensation - whereby the annual compensation:
1. is determined based on the previous year's annual base salary plus
50% of the target variable remuneration (annual bonus, annual-
ized MTB, and equity-related remuneration: For a Board member
with a fixed base salary of € 750 thou, the annual compensation
would amount to € 1,875 thou. Hence, he/she would receive a max-
imum severance payment of € 3,750 thou) and
2. shall not exceed the latest year's actual total compensation.
If the remaining term of contract is less than two years, the payment is
pro-rated according to the remaining term of the contract.
Change of control
In case of early termination as a result of a change of control, sever-
ance payments made to Board members generally amount to three
times the annual compensation (as defined above) and shall not
exceed 150% of the severance payment cap. A Board member with a
base salary of € 750 thou would receive a maximum of € 5,625 thou.
MISCELLANEOUS
INTERNAL AND EXTERNAL BOARD APPOINTMENTS
When a member of the Board of Management simultaneously holds
an appointment at another company within the Allianz Group, the full
amount of the respective remuneration is transferred to Allianz SE. In
recognition of related benefits to the organization, Board of Man-
agement members are also allowed to accept a limited number of
non-executive supervisory roles in appropriate external organiza-
tions. In these cases, 50% of the remuneration received is paid to
Allianz SE. Only if the Allianz SE Supervisory Board classifies the
appointment as a personal one will the respective Board member
retain the full remuneration for that position. Any remuneration paid
by external organizations will be itemized in those organizations'
annual reports; its level is determined by the governing body of the
relevant organization.
OUTLOOK FOR 2018
The remuneration of the two new regular members of the Board of
Management, Niran Peiris and Giulio Terzariol, have been set at the
same level as for the other regular members of the Board of Man-
agement.
Based on the yearly adequacy test, the Allianz SE Supervisory
Board agreed to an increase of the base salary of Oliver Bäte, in line
with the well-established approach at Allianz, from € 1,125 thou to
€ 1,312.5 thou - i.e., from 1.5 times to 1.75 times of a regular Board
member. The target values of his variable components increase
accordingly with his total target compensation resulting in
€ 5,250 thou.
32
Annual Report 2017 - Allianz Group
B_Corporate Governance
Remuneration of the Supervisory Board
The remuneration of the Supervisory Board is governed by the Stat-
utes of Allianz SE and the German Stock Corporation Act. The struc-
ture of the Supervisory Board's remuneration is regularly reviewed
with regard to its compliance with German, European, and interna-
tional corporate governance recommendations and regulations.
REMUNERATION PRINCIPLES
-
Set total remuneration at a level both aligned with the scale and
scope of the Supervisory Board's duties and appropriate in view
of the company's activities and its business and financial situation.
Establish a remuneration structure that takes into account the
individual functions and responsibilities of Supervisory Board
members, such as chair, vice chair, or committee mandates.
Establish a remuneration structure that allows proper oversight of
business as well as independent decisions on executive personnel
and remuneration.
REMUNERATION STRUCTURE AND COMPONENTS
The remuneration structure, which comprises fixed and committee-
related remuneration only, was approved by the Annual General
Meeting in 2011 and is laid down in the Statutes of Allianz SE.
FIXED ANNUAL REMUNERATION
Board members who were appointed before 1 January 2011 are
eligible to continue using a company car for up to one year after
retirement.
23
Contracts do not contain provisions for any other cases of early ter-
mination of Board of Management service.
2. Severance payments made to Board members in case of early
termination comply with the German Corporate Governance Code.
721
13,344
2016
225
207
6,385
431
5,090
9
222
14
678
661
12,375
1_The service cost of the frozen contribution-based pension plan reflects the continued death and disability cover.
2_Plan participants contribute 3% of their relevant salary to the AVK. For the AVK the minimum guaranteed interest rate is 2.75% - 3.50% depending on the date of joining Allianz. In general, the company funds the balance required via the APV.
Before Allianz's founding of the APV in 1998, both Allianz and the plan participants were contributing to the AVK.
3_For details on the transition payment, see section "Termination of service". In any event a death benefit is included.
4_Expected annual pension payment at assumed retirement age (age 60), excluding current pension plan.
5_SC = service cost. Service costs are calculatory costs for the DBO related to the reported business year.
6_DBO = defined benefit obligation, end of year. The figures show the obligation for Allianz resulting from defined benefit plans, taking into account realistic assumptions with regard to interest rate, dynamics, and biometric probabilities.
31
Annual Report 2017 - Allianz Group
B_Corporate Governance
In 2017, former members of the Board of Management and their
dependents received remuneration and other benefits totaling
€ 8 mn (2016: € 7 mn), while reserves for current pension obligations
and accrued pension rights totaled € 137 mn (2016: € 126 mn).
LOANS TO MEMBERS OF THE BOARD OF
MANAGEMENT
As of 31 December 2017, there were no outstanding loans granted by
Allianz Group companies to members of the Board of Management.
TERMINATION OF SERVICE
Board of Management contracts are limited to a period of five years.
For new appointments a shorter period is typical, a practice in line
with the German Corporate Governance Code.
Arrangements for termination of service including retirement are
as follows:
1. Board members who were appointed before 1 January 2010, and
who have served a minimum of five years, are eligible for a six-
month transition payment after leaving the Board of Manage-
ment.
3. Special terms - which are also in accordance with the German
Corporate Governance Code - apply if a Board member's service
ended as a result of a "change of control" (i.e., if a situation arises in
which a shareholder of Allianz SE, acting alone or together with
other shareholders, holds more than 50% of voting rights in
Allianz SE).
4,377
418
583
--
Australia
Our steering
BOARD OF MANAGEMENT
AND ORGANIZATIONAL STRUCTURE
Allianz SE has a divisional Board structure based on functional and
business responsibilities. Business-related divisions reflect our busi-
ness segments Property-Casualty, Life/Health, Asset Management,
and Corporate and Other. In 2017 they were overseen by five Board
members. The remaining four divisions (i.e. Chairman of the Board of
Management, Finance, Investments, and Operations¹) focus on
Group functions, along with business-related responsibilities.
For further information on Board of Management members and
their responsibilities, please refer to Mandates of the Members of the
Board of Management on > page 10.
TARGET SETTING AND MONITORING
The Allianz Group steers its operating entities and business segments
via an integrated management and control process. It begins with
the definition of a business-specific strategy and goals, which are
discussed and agreed upon between the Holding and operating
entities. Based on this strategy, our operating entities prepare three-
year plans which are then aggregated to form the financial plans for
the business divisions and for the Allianz Group as a whole. This plan
also forms the basis for our capital management. The Supervisory
Board approves the plan and sets corresponding targets for the
Board of Management. The performance-based remuneration of the
Board of Management is linked to short-term, mid-term, and long-
term targets to ensure effectiveness and emphasize sustainability. For
further details about our remuneration structure, including target
setting and performance assessment, please refer to the Remunera-
tion Report starting on > page 23.
We continuously monitor our business performance against
these targets through monthly reviews - which cover key operational
and financial metrics to ensure we can move quickly and take ap-
propriate measures in the event of negative developments. The Alli-
anz Group uses operating profit and net income as key financial
performance indicators across all its business segments. Other indica-
tors include segment-specific figures, such as the combined ratio for
Property-Casualty, return on equity2 for Life/Health, and the cost-
income ratio for Asset Management. To steer and control new busi-
ness in our business segments Property-Casualty and Life/Health, we
use Return on Risk Capital (RORC). We also use new business margins
for Life/Health. For a comprehensive view of our business segment
performance, please refer to the chapters from
> page 39 onwards.
Besides performance steering, we also have a risk steering pro-
cess in place, which is described in the Risk and Opportunity Report
starting on page 62.
■Property-Casualty Life/Health Banking Retail Asset Management Institutional Asset Management
1_This overview is based on our organizational structure as of 31 December 2017.
2_Oldenburgische Landesbank AG in Germany is classified as "held for sale".
3_Property-Casualty business belongs to Allianz Global Corporate & Specialty.
Annual Report 2017 - Allianz Group
1_This member of the Board of Management also oversees Allianz Partners.
2_Excluding unrealized gains/losses on bonds net of shadow accounting.
37
C-Group Management Report
Non-financial key performance indicators (KPIs) are mainly used
for the sustainability assessment that we conduct when determining
mid-term bonus levels. In line with our Renewal Agenda, KPIs mainly
represent three key levers: True Customer Centricity, Digital by De-
fault, and Inclusive Meritocracy. Examples include the Allianz En-
gagement Survey and Net Promoter Score (NPS¹) results, diversity
development, and the share of digital retail products/digital client
communication.
Our Corporate Responsibility approach
Allianz seeks to position itself as the world's most trusted financial
services provider and a global sustainability leader. As such, we strive
to create sustainable economic value through a long-term approach
to corporate governance, social responsibility, and environmental
stewardship.
In 2017, we took the leading position among all rated insurance
companies in the Dow Jones Sustainability Index (DJSI) ranking,
scoring 87 out of 100 points. The DJSI ranks companies according to
environmental, social, and governance (ESG) criteria, assessing their
strategy and performance.
CORPORATE RESPONSIBILITY GOVERNANCE
Strong corporate governance is pivotal to our sustainability approach
and features among our most important material issues.
Established in 2012, the Group ESG Board is the highest govern-
ing body for sustainability-related issues. It consists of three Allianz SE
Board members and several department heads. They meet quarterly
and are responsible for ensuring ESG integration across all business
lines as well as all core processes dealing with insurance and invest-
ment decisions. Key topics of focus in 2017 included implementation
of the recommendations of the Taskforce of Climate-related Financial
Disclosures and development of a more systematic approach to
investor engagement.
The Group ESG Board is in charge of corporate responsibility and
climate-related topics, and leads on associated stakeholder en-
gagement. Functional departments provide regular updates on
sustainability issues directly to the Group ESG Board.
CORPORATE RESPONSIBILITY APPROACH
We want our stakeholders to know that Allianz is a financially solid
and trustworthy company that embraces sustainable business as
good business. To achieve this, we also need to understand our
stakeholders' needs and concerns, which is why we engage with a
broad range of social and political players and organizations. The
insight they provide enables us to focus our Corporate Responsibility
strategy, activities, and reporting on the right areas.
We organize our Corporate Responsibility strategy around three
focus areas in which we address the relevant material issues that our
stakeholders perceive as vital for business success and sustainability:
Low-carbon economy: supporting renewable energy and decarbon-
ization through our investments; providing sustainable insurance
solutions; reducing our environmental footprint.
Mexico
Social inclusion: supporting the social inclusion of children and
youth through our Future Generations program; developing solutions
for customers in emerging markets; promoting diversity and wellbe-
ing among our employees.
Singapore
China
--
Indonesia
Japan³
Laos
Malaysia
Pakistan
Philippines
Singapore³
Sri Lanka
Taiwan
Thailand
Insurance Iberia & Latin America
Iberia
North and Latin America
Europe
--
United States
Canada
Brazil
Germany
Austria
France
Italy
Ireland
Luxembourg
Spain
Switzerland
--
Belgium
The Netherlands
United Kingdom
Sweden
Asia Pacific
Japan
Hong Kong
Taiwan
Spain
Portugal
Latin America
Argentina
Brazil
Colombia
Business integration: integrating environmental, social, and govern-
ance (ESG) issues across our investment and insurance businesses;
building trust through transparency, responsible sales, and data
privacy.
For reporting purposes, we organize our approach around Allianz's
five key roles as a sustainable insurer, responsible investor, trusted
company, attractive employer, and committed corporate citizen.
Allianz SE and Allianz Group comply with the legal requirements to
provide a non-financial statement and a non-financial Group state-
ment according to §§ 289b (1), 315b (1) of the HGB by issuing a com-
bined separate non-financial report for Allianz Group and Allianz SE
according to §§ 289b (3), 315b (3), sentence 1, sentence 2 in conjunc-
tion with § 298 (2) of the HGB. This report can be found on our website
at: > www.allianz.com/nf-report.
1,347
12
1,813
345
558
8
159
420
3,878
Dr. Christof Mascher
2017
26
3,208
357
1,018
5
42
40
646
428
4,914
2016
12
3,115
357
637
5
42
43
54
62
2016
4,421
Please also refer to our 2017 Group Sustainability Report (to be
published in April 2018) for full details of our corporate responsibility
strategy, approach, and performance: www.allianz.com/
sustainability.
1_NPS is a measurement of customers' willingness to recommend Allianz. Top-down NPS is measured regularly according
to global cross-industry standards and allows benchmarking against competitors in the respective markets.
38
Annual Report 2017 - Allianz Group
1
365
626
Jacqueline Hunt
2017
317
472
317
472
2016
Togo
159
159
159
Dr. Helga Jung
2017
62
59
1,429
19
1,863
345
924
8
204
431
159
2017
The remuneration of a Supervisory Board member consists of a fixed
cash amount paid after the end of each business year for services
rendered over that period. In 2017, as in 2016, each regular Superviso-
ry Board member received a fixed compensation amounting to
€ 100 thou per year. Each Vice Chairperson received € 150 thou, the
Chairperson received € 200 thou.
750
857
1,125
750
857
1,125
750
857
857
1,125
750
829
829
3229
1,619
1,125
1,125
750
750
750
829
870
829
1,125
750
750
752
752
752
750
1,155
645
3,002
3,675
4,564
1,189
3,439
3,420
318
318
318
318
318
428
418
428
428
428
428
418
3,337
1,609
3,323
4,127
752
3,002
3,854
2,777
3,247
4,136
761
3,011
752
752
761
661
Max
Min
COMMITTEE-RELATED REMUNERATION
Target
Target
2017
2016
2017
2017
2016
2017
2016
2017
2016
Payout¹
grant
Grant
Payout¹
grant
Grant
Actual
Actual
Dr. Günther Thallinger (Appointed: 01/2017)
Dr. Christof Mascher (Appointed: 09/2009)
B_Corporate Governance
Committee-related remuneration
€ thou
Committee
Chair
Target
3,195
Target
Max
752
761
761
761
761
752
2
2
2
2
2
11
2
11
11
11
11
2
750
750
750
750
750
750
750
750
750
750
750
Min
4,282
3,320
1,070
750
829
954
829
1,125
10
750
750
866
1,125
750
866
1,125
750
750
50
750
866
954
866
1,125
750
750
783
768
783
783
783
783
750
768
1,125
750
2,805
3,269
4,158
783
3,033
3,018
1,083
1,725
499
4,005
479
2,198
499
3,894
499
4,670
499
1,295
3,545
3,494
499
479
3,505
1,719
3,395
4,171
796
3,046
3,015
1,843
50
750
829
1,125
829
Member
796
796
Min
Target
Target
Max
Min
Target
Target
2017
2016
2017
2017
2016
2017
2016
2017
2017
2016
Payout¹
grant
Grant
Payout¹
Actual
Actual
grant
Grant
Dr. Werner Zedelius (Appointed: 01/2002 - End of Service: 12/2017)
Dr. Dieter Wemmer (Appointed: 01/2012 - End of Service: 12/2017)
1,927
3,641
4,445
Max
765
750
750
796
796
796
765
33
18
33
33
33
33
18
46
15
46
46
46
46
15
750
750
750
750
750
750
750
750
750
750
750
750
Personnel Committee, Standing Committee, Risk
Committee, Technology Committee
Audit Committee
2017
20
Annual Report 2017 - Allianz Group
29
B_Corporate Governance
GERMAN ACCOUNTING STANDARD 17 DISCLOSURE
Under the German Accounting Standard 17, the total remuneration
to be disclosed for 2017 (2016 in parenthesis) is defined differently as
compared to the German Corporate Governance Code: It is com-
posed of the base salary, perquisites, the annual bonus, and the fair
value of the RSU grant, but excludes both the notional annual accru-
als of the MTB 2016 - 2018 and the pension service cost:
Oliver Bäte €3,925 (4,103) thou,
Sergio Balbinot € 2,636 (2,747) thou,
Jacqueline Hunt € 2,613 (1,423) thou,
Dr. Helga Jung €2,497 (2,542) thou,
Dr. Christof Mascher €2,419 (2,492) thou,
Dr. Günther Thallinger € 2,466 (-) thou,
Dr. Axel Theis € 2,547 (2,724) thou,
Dr. Dieter Wemmer €2,529 (2,674) thou,
Dr. Werner Zedelius €2,441 (2,677) thou.
The sum total of the remuneration of the Board of Management for
2017-excluding the notional accruals of the MTB 2016 - 2018 as
well as the pension service cost, as outlined above - amounts to
€24 mn (2016: € 26 mn). If pension service cost is included, the sum
total is € 28 mn (2016: € 30 mn).
EQUITY-RELATED REMUNERATION
In accordance with the approach described earlier, in March 2018 a
number of RSUs were granted to each member of the Board of Man-
agement, which will vest and be settled in 2022.
Grants, outstanding holdings, and equity compensation expense under
the Allianz Equity Program
Board members
5.2
40.0
100.0
2016
194.5
4.5
56.7
133.3
2017
C
254.5
4.5
100.0
150.0
2016
106.4
2.2
6_Dr. Werner Zedelius left the Allianz SE Board of Management upon his retirement effective 31 December 2017. According to his contract he receives a transition payment of € 937.5 thou. The payment is calculated based on the latest base salary,
which is paid for a further six months starting 1 July 2018, and a final lump-sum payment of 25% of the target variable remuneration. The payable pension takes into account the monthly payments over the six-month period. The lump-sum payment
will be paid in spring 2019.
41.7
4,057
3,990
4.5
40.0
150.0
2016
196.2
4.5
41.7
150.0
2017
M
3 ३
M
M
M
M
40
(Vice Chairman)
Rolf Zimmermann
145.2
721
721
721
721
661
721
3,679
3,754
1,504
4,879
3,466
194.5
62.5
366.7
tion
fees
tion
tion
TM
C
S
C
R
PC
The total remuneration for all Supervisory Board members, including
attendance fees, amounted to € 2,179 thou (2016: €2,025 thou). The
following table shows the individual remuneration for 2017 and 2016:
ZC
(Chairman)
M
Michael Diekmann²
N
A
Members of the Supervisory Board
remunera-
Attendance
remunera-
remunera-
Total
Committee
Fixed
Committees¹
€ thou (total might not sum up due to rounding)
Individual remuneration: 2017 and 2016
B_Corporate Governance
2017
2017
133.3
3.7
6.7
160.0
200.0
2016
152.2
2.3
66.6
83.3
2017
Ο Ο Σ Σ Σ
Σ Σ
M
M5
C
C
C
C
M
C
C
Σ ΣΟ
(Vice Chairman)
Jim Hagemann Snabe
(Vice Chairman)
Dr. Wulf H. Bernotat 4
(Chairman)
Dr. Helmut Perlet³
2016
257.0
120.0
2017
Dante Barban
8.3
96.4
3.0
26.7
66.7
2017
M
106.1
4.5
26.6
75.0
41.7
145.3
5.3
2016
40.0
2017
M
M
M
Herbert Hainer¹5
82.1
2.2
13.3
66.6
2016
192.7
6.0
86.7
100.0
Godfrey Robert Hayward¹6
M
2017
80
40
ATTENDANCE FEES AND EXPENSES
In addition to the fixed and committee-related remuneration, mem-
bers of the Supervisory Board receive an attendance fee of € 750 for
each Supervisory Board or committee meeting they attend. Should
several meetings be held on the same or consecutive days, the at-
tendance fee will only be paid once. In addition, Allianz SE reimburses
the Supervisory Board members for their out-of-pocket expenses and
the VAT payable on their Supervisory Board service. The Company
provides insurance coverage and technical support to the Superviso-
ry Board members to an extent reasonable for carrying out the Su-
pervisory Board duties.
REMUNERATION FOR 2017
M18
M
Total¹9
Jürgen Lawrenz
123.7
3.7
20.0
100.0
2016
M
M
52.2
2.2
8.3
41.7
2017
M
M
Prof. Dr. Renate Köcher¹7
2016
83.0
3.0
13.3
66.7
100.0
2017
2016
M
4.5
40.0
100.0
2016
M
M
132.8
4.5
28.3
100.0
2017
M11
M10
Christine Bosse
2016
M
3.7
26.7
66.7
2017
M
Sophie Boissard'
124.5
4.5
20.0
100.0
2016
53.0
3.0
144.5
Gabriele Burkhardt-Berg
97.1
M
M
M
146.0
6.0
40.0
100.0
2016
145.3
40.0
100.0
2017
Martina Grundler14
C13
Dr. Friedrich Eichiner¹2
M
5.3
Jean Jacques Cette
2017
124.5
4.5
20.0
100.0
100.0
2016
M
137.1
3.8
33.3
M
Effects from consolidation, deconsolidation, and other adjust-
ments added € 4 bn to total AuM.
Negative foreign currency translation effects amounted to
€ 135 bn and were primarily driven by the depreciation of the
U.S. Dollar against the Euro. Despite these negative effects, total AuM
increased by 4.8%.
As of 31 December 2017, the shares of third-party AuM by busi-
ness unit were 76.8% (31 December 2016: 76.1%) attributable to
PIMCO and 23.2% (31 December 2016: 23.9%) attributable to
AllianzGl.
Favorable effects from Market and Other amounted to € 73 bn.
€ 50 bn were due to PIMCO and mainly related to fixed-income
assets. The remaining € 23 bn stemmed from Allianz Gl's equities and
from multi-assets, albeit to a lesser extent.
The share of fixed-income assets rose from 75.5% at the begin-
ning of the year to 76.4%. This was mainly due to the high third-party
AuM net inflows and to a lesser extent - to positive effects from
Market and Other, which outweighed the negative foreign currency
translation effects. The share of equities declined from 10.3% to 9.4%.
Hereby, positive effects from equity markets could not offset third-
party AuM net outflows in combination with negative foreign curren-
cy translation effects as well as deconsolidation effects. The shares of
multi-assets and other were roughly stable at 10.2% and 4.0%
(31 December 2016: 10.0% and 4.2%, respectively).
Mutual funds had a 59.4% share in third-party assets
(31 December 2016: 57.8%), while separate accounts were at 40.6%
(31 December 2016: 42.2%).
In the following section we focus on the development of third-party
assets under management.
Net inflows of total assets under management (AuM) amounted to
€ 147 bn in 2017. € 150 bn were attributable to third-party AuM net
inflows (2016: € 20 bn net outflows), marking the highest yearly third-
party AuM net inflows ever. The majority of this year's inflows were
PIMCO's third-party AuM net inflows (€ 144 bn) - mainly in the United
States and Europe. Strong third-party AuM net inflows were recorded
in each quarter. AllianzGI also recorded third-party AuM net inflows
(€ 6 bn), primarily in Europe.
1,960
1_Multi-assets is a combination of several asset classes (e.g. bonds, stocks, cash and real property) used as an
investment. Multi-assets class investments increase the diversification of an overall portfolio by distributing investments
throughout several asset classes.
89
1,871
17
10
The regional allocation of third-party AuM shifted as follows:
America 53.4%, Europe 35.1% and the Asia-Pacific region 11.5%
(31 December 2016: 55.3%, 32.8% and 11.9%, respectively). This
development was due to strong growth in Europe, whereas the U.S.
share was affected by negative foreign currency translation effects.
The share of the Asia-Pacific region declined as positive effects, most-
ly from third-party AuM net inflows, were dampened by negative
foreign currency translation effects as well as the deconsolidation of
AllianzGI Korea.
81
63
2_Other is composed of other asset classes than equity, fixed income and multi-assets, e.g. money markets, commodities,
real estate investment trusts, infrastructure investments, private equity investments, hedge funds, etc.
The overall three-year rolling investment performance of our
Asset Management business improved significantly, with 91% of third-
party assets outperforming their respective benchmarks
(31 December 2016: 83%). The increase was driven by both PIMCO
and AllianzGl, improving from 88% to 95% and from 63% to 75%,
respectively.
Net income
2 In light of the new operating-profit definition, restructuring charges are reported outside of operating profit. Prior-year
figures have been adjusted accordingly.
Key figures Asset Management¹
KEY FIGURES
153
Operating revenues
Operating profit²
Cost-income ratio³
Total assets under management
as of 31 December
thereof: Third-party assets under
management as of 31 December
| | 3|8|*|8| 8| 8|
Annual Report 2017 - Allianz Group
48
40
8_Three-year rolling investment performance reflects the mandate-based and volume-weighted three-year investment
success of all third-party assets that are managed by Allianz Asset Management's portfolio-management units. For
separate accounts and mutual funds, the investment success (valued on the basis of the closing prices) is compared with
the investment success prior to cost deduction of the respective benchmark, based on various metrics. For some mutual
funds, the investment success, reduced by fees, is compared with the investment success of the median of the respective
Morningstar peer group (a position in the first and second quartile is equivalent to outperformance).
6_Mutual funds are investment vehicles (in the United States, investment companies subject to the U.S. code; in Germany,
vehicles subject to the "Standard-Anlagerichtlinien des Fonds" Investmentgesetz) where the money of several individual
investors is pooled into one account to be managed by the asset manager, e.g. open-end funds, closed-end funds.
Separate accounts are investment vehicles where the money of a single investor is directly managed by the asset
manager in a separate dedicated account (e.g. public or private institutions, high net worth individuals, and corporates).
7 Based on the location of the asset management company.
5 Market and Other represents current income earned on, and changes in the fair value of, securities held in client
accounts. It also includes dividends from net investment income and from net realized capital gains to investors of open
ended mutual funds and of closed end funds.
4_Net flows represent the sum of new client assets, additional contributions from existing clients including dividend
reinvestment -, withdrawals of assets from and termination of client accounts, and distributions to investors.
3_Represents operating expenses divided by operating revenues.
1_For further information about our Asset Management business segment, please refer to note 4 to the consolidated
financial statements.
163
Casualty business segment experienced higher claims from natural
catastrophes, resulting in a decline in operating profit. A lower in-
vestment result also contributed to the decrease.
166
1,448
89
1,871
1,960
136
1,411
1,546
(1.5) %-p
1,361
63.4
234
2,206
2,440
385
6,022
6,408
ASSET MANAGEMENT
Delta
61.9
(2)
87
Composition of total assets under management
164
64
1,489
1,553
Delta
2016
2017
31 December
Assets under management
31 December
as of
Total
Other²
Multi-assets¹
Equities
Fixed income
Type of asset class
€ bn
as of
C-Group Management Report
(82)
We registered an increase in our net income, which was largely due to
our operating performance and the fact that the prior year's net
income had been negatively affected by our business in South Korea.
(270)
Change in reserves for insurance and investment contracts
(net) (without expenses for premium refunds)¹
Underwriting result
(185)
(13,352)
(13,537)
Acquisition and administrative expenses (net)
(306)
(848)
(31,425)
(158)
2,084
1,927
(691)
653
(30,576)
Delta
36
2,354
Excluding losses from natural catastrophes, our accident year loss
ratio improved by 0.4 percentage points to 68.2%. This was predomi-
nantly due to profitability improvements across the Allianz Group.
C-Group Management Report
43
Annual Report 2017 - Allianz Group
8_Represents claims and insurance benefits incurred (net) less previous year claims (run-off), divided by premiums earned
(net).
Our accident year loss ratio was 70.6% - a 0.5 percentage point
deterioration compared to the previous year. This was driven by an
increase in losses from natural catastrophes from € 689 mn to
€1,111 mn, representing an adverse impact on our combined ratio,
which increased from 1.5 percentage points in 2016 to 2.4 percent-
age points in 2017.
2,011
7_Based on the average exchange rates in 2017 compared to 2016.
3_Represents claims and insurance benefits incurred (net) divided by premiums earned (net).
4_Represents acquisition and administrative expenses (net) divided by premiums earned (net).
5_Represents the total of acquisition and administrative expenses (net) and claims and insurance benefits incurred (net)
divided by premiums earned (net).
2 In light of the new operating profit definition, restructuring charges are reported outside of operating profit unless
shared with policyholders. Prior year figures have been adjusted accordingly.
1 For further information on Allianz Property-Casualty figures, please refer to note 4 to the consolidated financial
statements.
1_Consists of the underwriting-related part (aggregate policy reserves and other insurance reserves) of "change in
reserves for insurance and investment contracts (net)". For further information, please refer to note 26 to the
consolidated financial statements.
Claims and insurance benefits incurred (net)
(344)
6_We comment on the development of our gross premium written on an internal basis, which means figures have been
adjusted for foreign currency translation and (de-)consolidation effects in order to provide more comparable infor-
mation.
The following operation contributed positively to the development of
our accident year loss ratio:
2016
Previous year claims (run-off)
2,905
Operating investment income (net)
(344)
2,354
2,011
Underwriting result
2,971
Delta
2017
Italy: Gross premiums amounted to € 4,512 mn. The decline of
1.3% on an internal basis resulted from unfavorable price effects in
our motor insurance business.
Turkey: Gross premiums decreased to € 1,222 mn. This decrease
11.2% on an internal basis - largely resulted from our strategic
reduction in market share in the motor third-party liability insurance
business following a regulatory change.
-
The following operations weighed on internal growth:
Spain: Gross premiums increased to € 2,376 mn - up 4.4% on an
internal basis. This was driven by positive volume and price effects
across the portfolio.
2016
2017
47,242 46,588
(33,351) (32,661)
(66)
138
Accident year claims
Premiums earned (net)
€ mn
Underwriting result
The underwriting result decrease was driven by an increase in
losses from natural catastrophes such as the storms Harvey, Maria,
and Irma in the third quarter, and the California wildfires in the fourth
quarter of 2017. A lower contribution from run-off compared to the
previous year also aggravated this development. As a consequence
our combined ratio deteriorated by 0.9 percentage points to 95.2%.
The decrease in operating profit was mainly driven by the fact that
our underwriting result suffered from higher losses from natural ca-
tastrophes. Furthermore, our investment result declined mainly due to
negative foreign currency translation effects net of hedging.
Other result¹,2
2 In light of the new operating profit definition, restructuring charges are reported outside of operating profit unless
shared with policyholders. Prior year figures have been adjusted accordingly.
(411)
5,464
5,053
Operating profit²
(1)
139
1_Consists of fee and commission income/expenses and other income/expenses.
Benelux: 0.2 percentage points. The improvement was due to
the absence of natural catastrophes in 2017 whereas 2016 had been
impacted by storms, floods, and hail. Underwriting performance
measures improved our accident year loss ratio further.
The following operations weighed on the development of our acci-
dent year loss ratio:
Reinsurance: 0.6 percentage points. The accident year loss ratio
suffered from natural catastrophes such as the California wildfires in
October and the storms in the third quarter of 2017.
(51)
(22)
Operating impairments of investments (net)
(37)
285
248
29
Operating realized gains (net)
(23)
(78)
carried at fair value through income (net)
Operating income from financial assets and liabilities
(20)
3,391
(56)
3,371
Investment expenses
(376)
44
The negative development of the net interest and similar income
resulted from lower income on debt securities, largely offset by a
higher income from equities.
Our operating investment income (net) decreased slightly, mainly
due to an unfavorable foreign currency translation result net of hedg-
ing.
2_The operating investment income (net) of our Property-Casualty business segment consists of the operating investment
result as shown in note 4 to the consolidated financial statements and expenses for premium refunds (net)
(policyholder participation).
1_Refers to policyholder participation, mainly from APR business (accident insurance with premium refunds), and consists
of the investment-related part of "change in reserves for insurance and investment contracts (net)". For further
information, please refer to note 26 to the consolidated financial statements.
(66)
(399)
2,971
Operating investment income (net)²
40
(255)
(215)
Expenses for premiums refunds (net)¹
(23)
2,905
(net of interest expenses)
Interest and similar income
Delta
89
1,527
1,616
Fee and commission income
Other income
Delta
2016
33
2017
Operating investment income (net)
Total expenses amounted to € 13,537 mn in 2017, compared to
€ 13,352 mn in the previous year. Our expense ratio remained stable
at 28.7% as a higher administrative expense ratio was offset by a
lower acquisition ratio.
Our run-off result amounted to € 1,927 mn - after € 2,084 mn in 2016
leading to a decreased run-off ratio of 4.1%, which was mainly
driven by our operations Reinsurance, Germany, and United King-
dom. Furthermore, we saw a negative impact in the beginning of
2017, a result of the Ogden rate change which affected our operat-
ing entities Reinsurance, United Kingdom, and Ireland.
-
Credit Insurance: 0.1 percentage points. This was driven by sev-
eral medium sized large losses.
Germany: 0.2 percentage points. The deterioration was driven
by a heavy storm year. Storms Xavier, Paul, Herwart, and several
smaller events burdened the result throughout the year.
Other result
€ mn
21
11
(1,509)
2016
2017
€ mn
Net income decreased, which was driven by the decline in operating
profit and a lower non-operating result that was partially offset by a
decline in income taxes.
Net income
Our other result remained stable compared to the previous year.
1 In light of the new operating profit definition, restructuring charges are reported outside of operating profit unless
shared with policyholders. Prior year figures have been adjusted accordingly.
(1)
Fee and commission expenses
Other expenses
Other result¹
139
138
(3)
(2)
(101)
(1,407)
Brazil: Gross premiums went up 16.8% on an internal basis and
reached € 1,029 mn. This was mainly driven by our motor insurance
business.
Annual Report 2017 - Allianz Group
Germany: Gross premiums amounted to € 10,074 mn. This inter-
nal growth of 1.7% was mainly due to positive price effects in our
motor and commercial property insurance business.
The following operations contributed positively to internal growth:
2016
Delta
Total revenues²
€ mn
126,149
122,416
2017
3,733
€ mn
11,097
11,056
Net income 3,4
€ mn
7,207
Operating profit 3,45
7,329
41
KEY FIGURES
1 At the date of the publication of this report, not all general market data for the year 2017 used in the chapter Business
Environment was final. Also, please note that the information provided in this chapter is based on our estimates.
Annual Report 2017 - Allianz Group
39
C-Group Management Report
Business environment 2017 for the asset
management industry
Key figures Allianz Group¹
As the global economy continued growing, 2017 also was an excel-
lent year for equity markets. Leading indices showed a very strong
performance. Especially U.S. equities rallied toward year-end, fueled
by the anticipation of a corporate tax reform.
The favorable developments in global capital markets also stim-
ulated fund flows in the asset management industry. This was par-
ticularly true for the United States, where the long-term inflows for the
year strongly outweighed the outflows. Taxable bond funds - both
actively and passively managed - profited most from these U.S. net
inflows, reflecting a shift from equities into fixed-income products.
Strong net inflows were also recorded for international equities in the
United States (both active and passive). Finally, U.S. equities also saw
net inflows - largely due to passively managed funds, while actively
managed equities experienced net outflows for the year. Overall,
investor preference continued to show a trend towards passive prod-
ucts in 2017; active managers, however, did well in several market
segments. In Europe, long-term net flows for 2017 reached a record
high. In Germany, net inflows to mutual funds mainly went into multi-
asset funds, followed by fixed-income products and equities.
40
40
Annual Report 2017 - Allianz Group
EXECUTIVE SUMMARY OF 2017 RESULTS
C_Group Management Report
The global fixed-income market also enjoyed strong returns in
2017, driven by the U.S. bond market. The U.S. Federal Reserve Bank
continued to gradually move away from its accommodative mone-
tary policy and increased the federal funds rate in three steps. At the
same time, the difference between short- and longer-dated U.S.
Treasury yields declined significantly. In Europe, yields for 10-year
German government bonds increased slightly in the course of the
year, while the European Central Bank maintained its accommoda-
tive monetary policy.
In the life sector, performance in the different regions was more
mixed. While, for example, the U.S. market had to cope with lower
premium growth, growth in Western Europe was on the up (albeit
from a low base). Emerging markets, too, showed diverging growth
trends: Eastern Europe experienced a rebound, Latin America a de-
cline. Meanwhile, Emerging Asia remained unfazed and simply con-
tinued to show double-digit growth, with China leading the pack,
clocking premium growth of around 20%. Government policies boost-
ing demand played a quite significant role in this growth story. Over-
all and at a global scale, premiums rose by an estimated 5% in 2017
(in nominal terms and adjusted for foreign currency translation ef-
fects). Global industry profitability remained challenging as the low
yield environment continued in 2017. On the other hand, market
volatility was generally low and stock markets performed very well.
Against this backdrop, insurers aligned their business model in several
ways: by reallocating assets (towards riskier and/or less liquid asset
classes), restructuring insurance portfolios (towards less capital inten-
sive business lines) and through in-force management actions (such
as life book disposals).
(122)
€ mn
15.23
15.18
(0.07)
0.05
Earnings summary
11%-p
(0.4) %-p
MANAGEMENT'S ASSESSMENT OF 2017 RESULTS
Our total revenues increased by 5.0% on an internal basis⁹, com-
pared to 2016. A large part of the increase came from our Life/Health
business segment; it was due to both stronger sales of capital-
efficient products in Germany and higher unit-linked premiums in Italy
and Taiwan. Internal premium growth in our Property-Casualty busi-
ness segment was largely driven by Allianz Partners, Germany, and
Brazil. Revenue growth in our Asset Management business segment
was driven by higher third-party assets under management (AUM)
driven fees.
€
Our operating investment result decreased by € 1,352 mn to
€23,923 mn, mainly due to lower realized gains on debt securities.
This was partly offset by lower impairments.
1_For further information on Allianz Group figures, please refer to note 4 to the consolidated financial statements.
2_Total revenues comprise statutory gross premiums written in Property-Casualty and Life/Health, operating revenues in
Asset Management, and total revenues in Corporate and Other (Banking).
3_The Allianz Group uses operating profit and net income as key financial indicators to assess the performance of its
business segments and of the Group as a whole.
4_Prior year figures have been adjusted in order to reflect the impact resulting from an accounting policy change to
measure the Guaranteed Minimum Income Benefit (GMIB) liability at fair value for our life business. For further infor-
mation, please refer to note 2 to the consolidated financial statements.
5 In light of the new operating profit definition, restructuring charges are reported outside of operating profit unless
shared with policyholders. Prior year figures have been adjusted accordingly.
6_Figures as of 31 December.
7_Risk capital figures are group diversified at 99.5% confidence level. Allianz Life US included based on third country
equivalence with 150 % of "Risk Based Capital Company Action Level" since 30 September 2015. The Solvency II
capitalization ratio as of 31 December 2017 includes share buy-back.
8_Represents the ratio of net income attributable to shareholders to the average shareholders' equity excluding unrealized
gains/losses on bonds, net of shadow accounting, at the beginning of the year and at the end of the year.
9_Internal total revenue growth excludes the effects of foreign currency translation as well as acquisitions and disposals.
Please refer to page 60 for a reconciliation of nominal total revenue growth to internal total revenue growth for each of
our business segments and the Allianz Group as a whole.
Our operating profit increased by 0.4% compared to 2016 and
was in the upper half of our 2017 target range. Our Asset Manage-
ment business segment saw a strong increase in operating profit,
mostly due to higher AuM-driven fees thanks to third-party net in-
flows. The operating profit in our Life/Health business segment in-
creased due to a number of factors, including an improved technical
margin in France and higher unit-linked management fees in Italy.
The operating result in our Corporate and Other business segment
also improved across all three reportable segments. Our Property-
Thereof: attributable to shareholders
Diluted earnings per share
15.24
6,803
6,962
(158)
Solvency II capitalization ratio6,7
%
229
15.31
218
Return on equity4,8
%
11.8
12.3
Earnings per share
€
Income taxes decreased by € 144 mn to € 2,941 mn, mostly due
to tax benefits related to previous years and a lower valuation al-
lowance of deferred tax assets. These effects were partly offset by a
one-time expense that resulted from the revaluation of deferred
taxes following U.S. tax reform. The effective tax rate fell to 29.0%
(2016:29.6%).
In the property-casualty sector, premium growth accelerated slightly
in almost all markets, reflecting the broad-based recovery of the
global economy. This general uptick in growth did not, however,
change the growth differentials between regions: While Western
Europe lagged, Emerging Asia powered ahead, with the two biggest
markets, China and India, registering double-digit growth. Overall
and at a global scale, premiums rose by an estimated 5% in 2017,
after a 4% gain in 2016 (in nominal terms and adjusted for foreign
currency translation effects). Global industry profitability declined in
2017, mainly due to the large losses from natural catastrophes expe-
rienced in the United States; but soft underwriting conditions in many
business lines and low investment yields did not help either.
At the same time, the deep transformation of the business envi-
ronment, much of which is driven by the digital revolution, continued
unabatedly. For the insurance industry, it brings enormous challenges
but also new opportunities. While overhauling the current business
model requires sizeable resources, new technologies have helped
insurers achieve quantum leaps in terms of customer centricity, prod-
uct accessibility, and ease of doing business. Moreover, harnessing
new technologies expanded the scope of insurance solutions offered
to a wider range of threats, from cyber-attacks to health protection in
emerging countries.
heavily concentrated in North America, however, where we experi-
enced hurricanes (both in the United States and the Caribbean),
wildfires in the United States, and earthquakes in Mexico, while in
other regions, notably Asia and Europe, losses from natural catastro-
phes were less severe.
3,807
(411)
5,464
5,053
རྒྱ ༅། རྒྱ」ཟང་། ཟག་ཟག་
727
4,158
51,535
€ mn
Delta
2016
2017
Operating profit
AGCS: Gross premiums fell to € 7,406 mn - a decrease of 0.6%
on an internal basis. It was largely due to negative price impacts
across both our corporate and specialty lines of business.
52,262
Combined ratio5
(350)
65.6
This includes unfavorable foreign currency translation effects of
€ 693 mn' and positive (de)consolidation effects of € 225 mn. On an
internal basis, our premiums went up 2.3%, driven by a positive price
effect of 1.2% and a positive volume effect of 1.1%.
On a nominal basis, we recorded an increase in gross premiums
written compared to the previous year.
Gross premiums written'
Operating profit
0.9%-p
94.3
66.5
95.2
€ mn
0.0%-p
28.7
28.7
%
0.9%-p
%
Expense ratio
Loss ratio³
Net income
In addition, there were some minor reallocations between the
reportable segments.
Effective 1 January 2017, the Allianz Group reorganized the structure
of its insurance activities to reflect the changes in the Board of Man-
agement responsibilities. The former reportable segment Asia Pacific
was allocated to the reportable segment Western & Southern Eu-
rope, Middle East, Africa, Asia Pacific. Any previously reported infor-
mation has been adjusted to reflect this change in reportable seg-
ments.
RECENT ORGANIZATIONAL CHANGES
Other information
For a more detailed description of the results generated by our
business segments - specifically, Property-Casualty insurance opera-
tions, Life/Health insurance operations, Asset Management, and
Corporate and Other - please consult the respective chapters on the
following pages.
Our shareholders' equity ¹¹ fell by € 1.5 bn to € 65.6 bn. During
2017, Allianz SE purchased approximately 16.8 million own shares as
part of its share-buy-back program announced in February 2017 with
a total volume of € 3.0 bn. 12 Over the same period, our Solvency II
capitalization ratio increased to 229% (includes share buy-back).
10 As of 31 December 2017, all requirements were still fulfilled to present Oldenburgische Landesbank AG, Oldenburg,
allocated to the reportable segment Banking (Corporate and Other) as a disposal group classified as held for sale. The
closing of the transaction was nearly completed as of 31 December 2017. Therefore, an impairment and a liability of
€ 233 mn were recognized in connection with the expected loss from the sale of the Oldenburgische Landesbank AG.
The Allianz shares in Oldenburgische Landesbank AG were transferred to the buyer on 7 February 2018. For further
information, please refer to note 3 to the consolidated financial statements
The lower non-operating result could only be partly offset by the
lower income taxes, resulting in an overall decrease in net income.
BUSINESS ENVIRONMENT
Economic environment 20171
In terms of real economic growth, 2017 has been the best year for the
global economy since 2011. Around the globe, many countries expe-
rienced a fairly strong cyclical upswing. Two factors drove much of
last year's positive development: the comeback of global trade and
the expansionary credit cycle. In the United States, economic momen-
tum increased in the course of 2017. Given the upturn in business
investment as well as the rebound in exports, economic activity was
on a broader footing than it had been in 2016. All in all, the U.S.
economy expanded by about 2.3%. With an increase of 2.5%, growth
in the Eurozone was slightly stronger than in the United States. The
recovery gained more breadth both in terms of countries and de-
mand components. The German economy expanded by 2.5% (in
calendar-adjusted terms), increasingly supported by rising investment
activity. In the emerging markets, growth finally reaccelerated in
2017, not least owing to continued stabilization in former recession
countries such as Brazil and Russia. Overall, the global economy
grew by an estimated 3.2%, considerably stronger than in 2016, when
global output rose by 2.6%.
World economy and financial markets appeared to overlook the
elevated global political uncertainties, at least in part. Stock market
volatility was low. On the monetary policy front, in October the Euro-
pean Central Bank announced that it would extend its monthly bond
purchasing program at least until the end of September 2018. In the
United States, the Federal Reserve continued to normalize its mone-
tary policy stance. It increased the federal funds rate range three
times by 25 basis points, bringing it to 1.25% - 1.5%. Moreover, in
October the Federal Reserve started a balance sheet normalization
program. Yields on 10-year German government bonds reached
0.4% at year-end 2017, 20 basis points higher than at the end of
2016. Spreads on Eurozone government bonds ended the year more
or less unchanged - with two major exceptions, Greece and Portugal,
where bond spreads tightened substantially. The performance of
major stock markets was clearly positive around the globe, with a
number of indices reaching new all-time highs. Supported by improv-
ing economic conditions in the Eurozone, the Euro appreciated con-
siderably against the U.S. Dollar in the course of 2017. The U.S. Dollar-
to-Euro exchange rate was 1.20 at year-end (end of 2016: 1.05).
Business environment 2017 for the insurance
industry
2017 was a mixed year for the insurance industry. On the one hand,
the global economy gained momentum, supporting top-line growth
across almost all regions and business lines. On the other hand, inter-
est rates remained low, putting relentless pressure on investment
returns. Above all, however, 2017 was a year of extreme natural
catastrophes: Insured losses from natural catastrophes reached a
new peak, almost tripling the previous year's figure. Losses were
C_Group Management Report
11_For further information on shareholders' equity, please refer to page 55 of the Balance Sheet Review chapter.
12_For further information on the share buy-back program, please refer to note 19 to the consolidated financial state-
ments.
Annual Report 2017 - Allianz Group
Operating profit²
Gross premiums written
Key figures Property-Casualty¹
KEY FIGURES
PROPERTY-CASUALTY INSURANCE OPERATIONS
C_ Group Management Report
42
Annual Report 2017 - Allianz Group
Remuneration Report starting on > page 23.
Takeover-related Statements and Explanations starting on
page 20, and the
Statement on Corporate Management pursuant to § 315d and
§ 289f of the HGB starting on > page 17,
The following information also forms part of the Group Management
Report:
Other parts of the Group Management Report
C-Group Management Report
41
Allianz Partners: Gross premiums grew to € 4,608 mn - an in-
crease of 10.8% on an internal basis. It was driven by our U.S. travel
business and our health insurance business in Dubai.
47
LIFE/HEALTH INSURANCE OPERATIONS
KEY FIGURES
Expenses
€ mn
Loadings from premiums went up along with sales, much of which
was driven by the Asia-Pacific region. The increase in loadings from
reserves was largely attributable to a higher reserve volume in
France as well as to higher product fee income stemming from the
growth in our non-traditional variable-annuity business in the United
States, due to favorable market movements. Unit-linked manage-
ment fees rose, mainly in Italy, as a result of both higher performance
fees and increased assets under management.
4_Unit-linked management fees, excluding asset management fees, divided by unit-linked reserves.
3 Yields are pro rata.
1_Prior year figures are presented excluding the effects from the South Korean business.
2_Aggregate policy reserves and unit-linked reserves.
EXPENSES'
Acquisition expenses and commissions
Administrative and other expenses
Expenses¹
Our investment margin declined, mainly due to much lower realiza-
tions in the German life business after the sale of Italian government
bonds has resulted in an elevated level in 2016. A lower investment
result in the United States driven by our business with fixed-indexed
annuities due to a swing in the hedging result and unlocking has also
contributed to this development. It was, however, partly compensated
by decreased impairments in Germany, following a better perfor-
mance of the equity market.
-0
0.5
Unit-linked management fees as % of average unit-linked
reserves³,4
0.3
0.3
Loadings from reserves as % of average reserves²³
0.4
(0.2)
2017
(4,963) (5,029)
3_Aggregate policy reserves and unit-linked reserves.
1 Prior year figures are presented excluding the effects from the South Korean business.
2_PVNBP before non-controlling interests.
(0.3)
(0.4)
0.4
(8.8)
2016
(8.3)
(38)
(6,821)
(6,860)
(104)
(1,897) (1,793)
Delta
66
Acquisition expenses and commissions as % of PVNBP²
Administrative and other expenses as % of average
reserves³,4
4 Yields are pro rata.
6.0
Loadings from premiums as % of statutory premiums
Loadings and fees
(12)
109
97
(375)
4,487
€ mn
4,112
reserves.
3_Investment margin divided by the average of current end-of-period and previous end-of-period aggregate policy
2_Prior year figures are presented excluding the effects from the South Korean business.
1_Other comprises the delta of out-of-scope entities, on the one hand, which are added here with their respective
operating profit and different line item definitions compared to the financial statements, such as interest paid on
deposits for reinsurance, fee and commission income and expenses excluding unit-linked management fees on the
other hand.
Investment margin in basis points3,4
Investment margin²
4 Yields are pro rata.
5.8
Loadings from premiums
Unit-linked management fees
69
264
5,726
5,989
588
657
78
117
Loadings from reserves
1,345
3,793
3,871
Delta
2016
2017
Loadings and fees¹
1,462
1_Prior year figures have been adjusted in order to reflect the impact resulting from an accounting policy change to
measure the Guaranteed Minimum Income Benefit (GMIB) liability at fair value for our life business. For further infor-
mation please refer to note 2 to the consolidated financial statements.
2_In light of the new operating profit definition, restructuring charges are reported outside of operating profit unless
shared with policyholders. Prior year figures have been adjusted accordingly.
3_Prior year figures changed in order to reflect the roll-out of profit source reporting to Turkey.
197
730
927
10
2,365
2,375
367
Delta
2017
Operating profit
Operating loss South Korea¹
Capital-efficient products
Unit-linked without guarantee
Protection & health
2016
Guaranteed savings & annuities
351
743
Net income
Annual Report 2017 - Allianz Group
3_Prior year figures changed in order to reflect the roll-out of profit source reporting to Turkey.
2 Impact of change in DAC includes effects of change in DAC, unearned revenue reserves (URR) and value of business
acquired (VOBA). It represents the net impact of deferral and amortization of acquisition costs and front-end loadings
on operating profit and therefore deviates from the IFRS financial statements.
1 Technical margin comprises risk result (risk premiums less benefits in excess of reserves less policyholder participation),
lapse result (surrender charges and commission clawbacks) and reinsurance result.
The operating profit in our guaranteed savings & annuities line of
business went up. Much of this increase was contributed by our tradi-
tional variable-annuity business in the United States, which benefited
from favorable market movements. The higher operating profit in our
protection & health line of business was largely driven by an im-
proved technical margin in France and the United States. Our operat-
16
1 The 2016 figure represents the operating loss of the first quarter only, as the negative result for the rest of 2016 was
considered as non-operating.
4,277
4,412
82
Our non-operating result decreased by € 306 mn to a loss of
€ 949 mn. Non-operating realized gains (net) declined as a result of
portfolio rebalancing actions in 2016. Impairments decreased as the
prior year had included impairment losses on the South Korean
Life/Health business and on the Oldenburgische Landesbank AG
upon classification as held for sale. The 2017 impairment result in-
cludes the recognition of a liability in connection with the expected
loss from the sale of Oldenburgische Landesbank AG10.
(171)
913
134
€ mn
Operating profit by lines of business
OPERATING PROFIT BY LINES OF BUSINESS³
IN DEFERRED ACQUISITION COSTS (DAC)²
IMPACT OF CHANGE
Our technical margin increased, driven by one-off reserve adjust-
ments both in 2017 and 2016 in the United States as well as im-
proved loss ratios due to repricing and positive run-off in our protec-
tion and health business in France.
TECHNICAL MARGIN¹
Administrative and other expenses increased, mainly due to le-
gal accruals for non-recurring items in the United States and Asia-
Pacific region, but remained stable in relation to reserves.
the United States. This was partly offset by higher expenses due to
sales growth in the Asia-Pacific region, in our German life business,
and in Italy.
ing profit in the unit-linked without guarantee line of business in-
creased, primarily due to higher unit-linked management fees in Italy.
A decrease in operating profit in the capital-efficient products line
was largely attributable to a lower investment margin in the United
States.
C_Group Management Report
46
7_Expenses include acquisition expenses and commissions (excluding commission clawbacks, which are allocated to the
technical margin) as well as administrative and other expenses.
6_The investment margin is defined as IFRS investment income net of expenses, less interest credited to IFRS reserves and
policyholder participation (including policyholder participation beyond contractual and regulatory requirements mainly
for the German life business).
We recorded lower acquisition expenses and commissions, predomi-
nantly due to declined sales in the fixed-indexed annuities business in
5_Loadings and fees include premium and reserve based fees, unit-linked management fees, and policyholder participa-
tion in expenses.
4_The purpose of the Life/Health operating profit sources analysis is to explain movements in IFRS results by analyzing
underlying drivers of performance on a Life/Health business segment consolidated basis.
Annual Report 2017 - Allianz Group
Return on equity
Our return on equity increased by 1.4 percentage points to 12.1%.
Among other reasons, this is due to the fact that the 2016 figure had
been negatively impacted by the unfavorable development of our
South Korean business.
Impact of change in DAC
The higher negative impact of change in DAC was due to lower
capitalization of DAC, mainly resulting from decreased sales in fixed-
indexed annuities in the United States. This was partly compensated
by favorable unlocking effects in our business with fixed-indexed
annuities in the United States.
1_Prior year figures are presented excluding the effects from the South Korean business.
Delta
(166)
145
(21)
(47)
(68)
(1,924)
(1,779)
1,877
1,711
2016
2017
Impact of change in DAC¹
Amortization, unlocking and true-up of DAC
Capitalization of DAC
€ mn
LOADINGS AND FEES5
C_Group Management Report
Our operating profit rose, supported by an improved technical mar-
gin in France and higher unit-linked management fees in Italy.
611
5.5
20.1
25.6
(0.1)
14.4
14.4
36.1
(4.6)
23.9
Delta
2016
2017
Total
Guaranteed savings & annuities
Protection & health
Unit-linked without guarantee
Capital-efficient products
28.5
%
37.0
100.0
OPERATING PROFIT BY PROFIT SOURCES³,4
Operating profit¹2
C-Group Management Report
45
Annual Report 2017 - Allianz Group
9_Prior year figures changed in order to reflect the roll-out of profit source reporting to Turkey.
10_Prior year figures are presented excluding effects from the South Korean business.
(0.9)
8 PVNBP before non-controlling interests.
6 Represents the ratio of net income to the average total equity, excluding unrealized gains/losses on bonds, net of
shadow accounting, at the beginning of the year and at the end of the year.
5_From the classification of our Korean life business as "held for sale" in the second quarter of 2016 until its disposal in the
fourth quarter of 2016, the total result of € (204) mn was considered as non-operating.
4_In light of the new operating profit definition, restructuring charges are reported outside of operating profit unless
shared with policyholders. Prior year figures have been adjusted accordingly.
3_Prior year figures have been adjusted in order to reflect the impact resulting from an accounting policy change to
measure the Guaranteed Minimum Income Benefit (GMIB) liability at fair value for our life business. For further infor-
mation please refer to note 2 to the consolidated financial statements.
1_For further information on Allianz Life/Health figures, please refer to note 4 to the consolidated financial statements.
2 Statutory premiums are gross premiums written from sales of life and health insurance policies, as well as gross receipts
from sales of unit-linked and other investment-oriented products, in accordance with the statutory accounting practices
applicable in the insurer's home jurisdiction.
100.0
7_Our comments in the following section on the development of our statutory gross premiums written refer to figures
determined "on an internal basis", i.e. adjusted for foreign currency translation and (de-) consolidation effects, in order to
provide more comparable information.
Operating profit by profit sources
Present value of new business premiums (PVNBP) by lines of business
Present value of new business
premiums (PVNBP)8,9,10
Net income³
134
4,277
€ mn
Operating profit 3,4,5
2,642
€ mn
64,636
€ mn
Statutory premiums²
Delta
2016
2017
Key figures Life/Health¹
67,277
Our PVNBP increased by € 2,267 mn to € 59,469 mn, largely be-
cause our business with unit-linked insurance products without guar-
antees generated higher sales in Italy and the Asia-Pacific region, as
did our capital-efficient products in the German life business. This was
partly offset by a sales decline in our business with fixed-indexed
annuities in the United States.
2,968
308
In the Asia-Pacific region, statutory premiums stood at
€ 5,170 mn, a 26.4% rise on an internal basis. It was largely due to an
increase in unit-linked sales in Taiwan. Statutory premiums in South
Korea amounted to € 1,307 mn in 2016.
In France, statutory premiums went up to € 8,457 mn, an in-
crease of 6.3% on an internal basis. This was predominantly due to
higher sales of capital-efficient products and a growth in our protec-
tion and health business.
In Italy, statutory premiums grew to € 11,160 mn. This increase -
17.1% on an internal basis - resulted mainly from higher unit-linked
single-premium sales, and was partially offset by a decrease in tradi-
tional life business.
In the United States, statutory premiums amounted to
€ 9,720 mn, down 16.3% on an internal basis. This was caused by a
decrease in sales of fixed-indexed annuities. Increased sales of tradi-
tional variable annuities partly compensated for this development.
Statutory premiums in the German life business rose to
€ 21,124 mn, translating into 11.9% growth on an internal basis -
which was largely due to higher sales of capital-efficient products.
Statutory premiums in the German health business climbed to
€ 3,360 mn - a 2.2% increase on an internal basis –, much of which
resulted from the acquisition of new customers in the supplementary
health care coverage.
On a nominal basis, statutory premiums increased by 4.1%. This
includes unfavorable foreign currency translation effects of € 494 mn
and negative (de-)consolidation effects of € 1,293 mn. On an internal
basis, statutory premiums went up by € 4,429 mn - or 7.0% - to
€ 67,277 mn.
2,660
Statutory premiums
Our South Korean business was disposed of at the end of 2016. In
order to best reflect the actual underlying drivers, operating profit
was reported in 2016 excluding South Korea, and the South Korean
operating loss specified as a separate item. Similarly, the figures for
present value of new business premiums are shown without effects
from the South Korean business. To ensure consistency with the Group
income statement, however, prior year statutory premiums are pre-
sented including premiums collected from our South Korean busi-
1.4%-p
10.7
12.1
%
Return on equity³,6
ness.
INVESTMENT MARGIN
Investment margin
€ mn
(140)
(1,192)
(1,332)
Investment expenses
223
1,015
(68)
1,238
(1,208)
(634)
Operating impairments of investments (net)
(38)
(6,821)
(6,860)
574
3
(47)
Other¹
(8,130)
(7,519)
Policyholder participation
134
4,277
4,412
(21)
12
Technical interest
82
(82)
21
384
405
(8,745) (8,757)
(105)
(102)
Interest expenses
(1,149)
carried at fair value through income (net)
Operating income from financial assets and liabilities
Delta
2016
2017
(864)
107
17,856
Interest and similar income
€ mn
Delta
2016
2017
17,749
(286)
Loadings and fees
5,989
(375)
4,487
4,112
Operating profit
Operating loss South Korea¹
Impact of changes in DAC
Technical margin
Expenses
Investment margin
(1,278)
6,610
5,333
Operating realized gains/losses (net)
264
5,726
1_The 2016 figure represents the operating loss of the first quarter only, as the negative result for the rest of 2016 was
considered as non-operating.
4,412
2016
2017
Senior bonds
11.3
100.0
100.0
Compared to year-end 2016, our overall asset allocation slightly
changed towards equities, where we recorded inflows supported by
higher unrealized gains.
Our well-diversified exposure to debt instruments slightly de-
creased, primarily due to negative currency impacts mainly related to
U.S. Dollar. About 94% of this portfolio was invested in investment-
grade bonds and loans.³ Our government bonds portfolio contained,
amongst others, bonds from Italy and Spain that represented 3.9%,
and 1.9% shares of our debt instruments portfolio with unrealized
gains (gross) of € 2,647 mn and € 842 mn. Of our covered bonds
portfolio, 41.6% (31 December 2016: 41.3%) were German Pfand-
briefe backed by either public-sector loans or mortgage loans.
French, Spanish and Italian covered bonds had portfolio shares of
16.3%, 9.2% and 7.5%, respectively (31 December 2016: 16.0%, 9.4%
and 7.5%).
Our exposure to equities increased due to strong performance
on major equity markets. Our equity gearing 4 remained almost
unchanged at 24% (31 December 2016: 23%).
1 This does not include non-controlling interests of €3,049 mn and €3,052 mn as of 31 December 2017 and
31 December 2016, respectively. For further information, please refer to note 19 to the consolidated financial state-
ments.
2_For further information, please refer to note 19 to the consolidated financial statements
3_Excluding self-originated German private retail mortgage loans. For 3%, no ratings were available.
4_Equity gearing is defined as the ratio of our equity holdings allocated to the shareholder after policyholder participation
and hedges to shareholders' equity plus off-balance sheet reverses less goodwill.
Annual Report 2017 - Allianz Group
55
C-Group Management Report
653.1
664.4
0.3
2.2
10.2
9.1
7.6
1.4
11.4
11.7
LIABILITIES
(0.3)
1.8
(0.1)
16.7
14.2
2.5
2.5
1.7
PROPERTY-CASUALTY LIABILITIES
As of 31 December 2017, the business segment's gross reserves for
loss and loss adjustment expenses as well as discounted loss reserves
amounted to € 66.2 bn, compared to € 65.7 bn at year-end 2016. On
a net basis, our reserves, including discounted loss reserves, de-
creased slightly from € 57.3 bn to € 56.3 bn.¹
LIFE/HEALTH LIABILITIES
of our operating entities
ASSET MANAGEMENT OPERATIONS
Within our Asset Management operations, the most important
sources of liquidity are fees generated from asset management
activities. These are primarily used to cover operating expenses.
BANKING OPERATIONS
Major sources of liquidity in our Banking operations include customer
deposits, interbank loans, and interest and similar income from our
lending transactions. The most important uses of funds are the issu-
ance of new loans and investments in fixed income securities. The
liquidity of our Banking operations is largely dependent on the ability
of our private and corporate customers to meet their payment obli-
gations arising from loans and other outstanding commitments. Our
ability to retain our customers' deposits is equally important to us.
INSURANCE OPERATIONS
Liquidity management
The major sources of liquidity for our operational activities are prima-
ry and reinsurance premiums received, reinsurance receivables col-
lected, investment income, and proceeds generated from the maturi-
ty or sale of investments. These funds are mainly used to pay claims
arising from the Property-Casualty insurance business and related
expenses, life policy benefits, surrenders and cancellations, acquisi-
tion costs, and operating costs.
Our insurance operations also carry a high proportion of liquid
investments, which can be converted into cash to pay for claims.
Generally, our investments in fixed income securities are sequenced to
mature when funds are expected to be needed.
The overall liquidity of our insurance operations depends on cap-
ital market developments, interest rate levels, and our ability to real-
ize the market value of our investment portfolio to meet insurance
claims and policyholder benefits. Other factors affecting the liquidity
of our Property-Casualty insurance operations include the timing,
frequency, and severity of losses underlying our policies and policy
renewal rates. In our Life operations, liquidity needs are generally
influenced by trends in actual mortality rates compared to the as-
sumptions underlying our life insurance reserves. Market returns,
crediting rates, and the behavior of our life insurance clients - for
example, regarding the level of surrenders and withdrawals - can
also have significant impacts.
Liquidity management
and funding of Allianz SE
The responsibility for managing the funding needs within the Group,
maximizing access to liquidity sources, and minimizing borrowing
costs lies with Allianz SE. We therefore comment on the liquidity and
funding resources of Allianz SE in the following sections. Restrictions
on the transferability of capital within the Group mainly result from
the capital maintenance rules under applicable company laws, as
well as from the regulatory solvency capital requirements for regulat-
ed Group companies.
LIQUIDITY RESOURCES AND USES
We receive a large part of premiums before payments of claims
or policy benefits are required, generating solid cash flows from our
insurance operations. This allows us to invest the funds in the interim
to create investment income.
49.9
The Allianz Group's liquidity management is based on policies and
guidelines approved by the Allianz SE Board of Management. Alli-
anz SE and each of the operating entities are responsible for manag-
ing their respective liquidity positions, while Allianz SE provides cen-
tral cash pooling for the Group. Capital allocation is managed by
Allianz SE for the entire Group. This structure allows the efficient use
of liquidity and capital resources and enables Allianz SE to achieve
the desired liquidity and capitalization levels for the Group and its
operating entities.
LIQUIDITY AND FUNDING RESOURCES
Life/Health reserves for insurance and investment contracts increased
by € 8.3 bn to € 499.1 bn. An € 20.4 bn increase (before foreign cur-
rency translation effects) in aggregate policy reserves was mainly
driven by our operations in Germany (€ 12.6 bn) and the United
States (€ 7.3 bn before foreign currency translation effects). Reserves
for premium refunds increased slightly by € 1.3 bn (before foreign
currency translation effects), due to higher unrealized gains to be
shared with policyholders. Foreign currency translation effects re-
duced the balance sheet value by € 13.3 bn, mainly due to the weak-
er U.S. Dollar (€ (11.3) bn).
Off-balance sheet arrangements
In the normal course of business, the Allianz Group may enter into
arrangements that do not lead to the recognition of assets and liabili-
ties in the consolidated financial statements under IFRS. Since the
Allianz Group does not rely on off-balance sheet arrangements as a
significant source of revenue or financing, our off-balance sheet
exposure to loss is immaterial relative to our financial position.
The Allianz Group enters into various commitments including
loan and leasing commitments, purchase obligations, and other
commitments. For more details please refer to note 37 to the consoli-
dated financial statements.
The Allianz Group has also entered into contractual relationships
with various types of structured entities. They have been designed in
such a way that their relevant activities are directed by means of
contractual arrangements rather than voting or similar rights. Typical-
ly, structured entities have been set up in connection with asset-
backed financings and certain investment fund products. For more
details on our involvement with structured entities, please refer to
note 35 to the consolidated financial statements.
Please refer to the Risk and Opportunity Report from > page 62
onwards for a description of the main concentrations of risk and other
relevant risk positions.
Organization
Regulatory capital adequacy
onwards.
1_For further information about changes in the reserves for loss and loss adjustment expenses for the Property-Casualty
business segment, please refer to note 14 to the consolidated financial statements.
56
56
Annual Report 2017 - Allianz Group
C_Group Management Report
For details on the regulatory capitalization of the Allianz Group,
please refer to the Risk and Opportunity Report from > page 62
60.2
0.4
8.9
Cash/other
Total
As of
As of
31 December
2017
31 December
2016
Real estate
Delta
As of
31 December
2016
Delta
€ bn
€ bn
As of
31 December
2017
€ bn
Equities
Banks
1_Prior year figures have been adjusted in order to reflect the impact resulting from an accounting policy change to
measure the Guaranteed Minimum Income Benefit (GMIB) liability at fair value for our life business. For further
information, please refer to note 2 to the consolidated financial statements.
Total assets and total liabilities
As of 31 December 2017, total assets amounted to € 901.3 bn and
total liabilities were € 832.7 bn. Compared to year-end 2016, total
assets and total liabilities increased by € 17.5 bn and by € 19.0 bn,
respectively.
The following section focuses on our financial investments in
debt instruments, equities, real estate, and cash, as these reflect the
major developments in our asset base.
STRUCTURE OF INVESTMENTS - PORTFOLIO
OVERVIEW
The following portfolio overview covers the Allianz Group's assets
held for investment, which are largely driven by our insurance busi-
Other
nesses.
Asset allocation and fixed income portfolio overview
Type of investment
Debt instruments, thereof:
Government bonds
Covered bonds
Corporate bonds (excl. banks)
The decrease in shareholders' equity was largely due to the dividend
pay-out in May 2017 (€ 3,410 mn) and the share buy-back program²
which started in February 2017 (€2,998 mn). Negative impacts from
foreign currency translation further contributed to the decline. Net
income attributable to shareholders of € 6,803 mn had a partly off-
setting effect.
%
%
%-p
6.1
34.0
32.8
1.1
30.6
32.9
189.5
(2.3)
5.7
(0.4)
53.4
51.4
2.0
9.3
5.3
195.6
(1.2)
15.6
576.1
577.3
(1.1)
86.7
88.4
(1.7)
213.6
213.6
37.1
37.0
0.1
83.0
89.9
(6.9)
14.4
Allianz SE ensures adequate access to liquidity and capital for our
operating subsidiaries. The main sources of liquidity available for
Allianz SE are dividends received from subsidiaries and funding
provided by capital markets. Liquidity resources are defined as readily
available assets - specifically cash, money market investments, and
highly liquid government bonds. Our funds are primarily used for
interest payments on our debt funding, operating costs, internal and
external growth investments, and dividends to our shareholders.
FUNDING SOURCES
Allianz SE's access to external funds depends on various factors such
as capital market conditions, access to credit facilities, credit ratings,
and credit capacity. The financial resources available to Allianz SE in
the capital markets for short-, mid- and long-term funding needs are
described below. In general, mid- to long-term financing is covered
by issuing senior or subordinated bonds or ordinary shares.
Annual Report 2017 - Allianz Group
Currency allocation of Allianz SE's senior and subordinated bonds¹
Funding in non-Euro currencies enables us to diversify our investor
base or to take advantage of favorable funding costs in those mar-
kets. Funds raised in non-Euro currencies are incorporated in our
general hedging strategy. As of 31 December 2017, approximately
17.6% (2016: 18.4%) of long-term debt was issued or guaranteed by
Allianz SE in currencies other than the Euro.
1,422
1,500
1,500
1,422
1_Based on nominal value.
Senior bonds
Subordinated bonds
2016
2,000
100
1,400
1,500
Subordinated bonds
2,000
6,629
Senior bonds
500
Subordinated bonds
Subordinated bonds
Total
Non-Euro
Euro
As of 31 December
3,840
4,237
2,734
2016
€ mn
3,801
13,250
17,051
4,237
500
Total
Senior bonds
1,400²
2017
Redemptions¹
(issuance of bonds)
6 May 2019
€ 250,000,000
€ 10,000,000,000
(nominal bond value)
€ 550,000,000
4.2
No expiry date for Conditional
Capital 2010/2014 (issuance in
case option or conversion
rights are exercised)
845
20,165
4.6
584
13,485
13,537
3.5
20,059
redemptions
1_For further information on Allianz SE debt (issued or guaranteed) as of 31 December 2017, please refer to note 18 to
the consolidated financial statements.
For further information on our share capital and regarding authoriza-
tions to issue and repurchase shares, please refer to the chapter
Takeover-related Statements and Explanations (part of the Group
Management Report) starting on > page 20.
Issuances¹
Issuance net
of
As of 31 December
Issuances and redemptions of Allianz SE's senior and subordinated
bonds
€ mn
The table below details the long-term debt issuances and redemp-
tions of Allianz SE during 2017 and 2016:
Over 5 years
2_Based on nominal value.
Contractual maturity date
1-5 years
2017
As of 31 December
€ mn
Maturity structure of Allianz SE's senior and subordinated bonds¹
As of 31 December 2017, Allianz SE had senior and subordinated
bonds with a variety of maturities outstanding, reflecting our focus on
long-term financing. As the cost and availability of external funding
may be negatively affected by general market conditions or by mat-
ters specific to the financial services industry or the Allianz Group, we
seek to reduce refinancing risk by actively steering the maturity profile
of our funding structure.
LONG-TERM DEBT FUNDING
Up to 1 year
12,086
2017
Total
€ mn
%
Capital authorization
Authorized Capital
2014/1
Authorized Capital
2014/11
average
interest rate²
Authorization to issue bonds
Conditional Capital
2010/2014
2017
Senior bonds
8,595
8,538
209
carrying conversion and/or
option rights
3.1
Interest
expenses
Nominal value
€ mn
57
58
58
C-Group Management Report
EQUITY FUNDING
As of 31 December 2017, the issued capital registered at the Com-
mercial Register was € 1,169,920,000. This was divided into
440,249,646 registered shares with restricted transferability. As of
31 December 2017, the Allianz Group held 1,369,717 (2016: 1,932,263)
own shares.
Carrying value
€ mn
Allianz SE has the option to increase its equity capital base ac-
cording to authorizations provided by our shareholders. The following
table outlines Allianz SE's capital
31 December 2017:
authorizations
Interest expenses on senior bonds decreased, mainly due to lower
funding costs on average in 2017. For subordinated bonds, the in-
crease of interest expenses was primarily driven by higher outstand-
ing volumes on average in 2017.
Senior and subordinated bonds issued or guaranteed by Allianz SE¹
Weighted
as of
As of 31 December
Capital authorizations of Allianz SE
Expiry date of
Subordinated bonds
13,309
20,165
3,715
16,450
Senior and subordinated bonds
2016
21,904
1_Based on nominal value.
3,854
Senior and subordinated bonds
15,925
2,734
1,400
2 € 1.4 bn subordinated bond called for redemption effective 17 February 2017.
1 Based on carrying value.
18,050
Annual Report 2017 - Allianz Group
Total
Subordinated bonds
13,250
613
4.6
Nominal amount
the authorization
Total
21,904
21,789
822
4.1
6 May 2019
2016
Senior bonds
€ 13,720,000
6 May 2019
(1,530)
344
67,083
65,553
(936)
(981)
45
BANKING
Operating revenues
1,018
(1,104)
1,029
Operating expenses
(922)
(955)
33
Operating result
96
(11)
74
(1,664)
1,148
2016
Delta
Earnings summary
Our operating result improved in 2017, due to the positive develop-
ments in all our reportable segments.
Our net loss widened, which primarily resulted from the impair-
ment driven by the recognition of a liability in connection with the
expected loss from the sale of Oldenburgische Landesbank AG.³
In Holding & Treasury, we saw an improvement of our operating
result. It was largely driven by a higher net interest result, as well as by
lower administrative expenses caused by a decline in pension costs.
(2,767)
Banking's operating result increased, driven by both a higher net
fee and commission result and lower loan loss provisions. The positive
development was partly offset by a lower net interest result.
HOLDING & TREASURY
Operating revenues
Operating expenses
Operating result
1,831
683
The operating result generated by Alternative Investments in-
creased, due to a higher net fee and commission result that was only
partially offset by higher administrative expenses.
2017
22
Operating revenues
Overview: 2017 results versus previous year's outlook¹
2017 results versus previous year outlook for 2017
Allianz Group
Property-Casualty
Life/Health
Asset Management
OUTLOOK 2018
Outlook 2017 - as per Annual Report 2016
Operating profit of € 10.8 bn, plus or minus € 0.5 bn.
Protection of shareholders' investments,
Selective profitable growth.
Growth in gross premiums written: approximately 2%
on a nominal basis.
Operating profit in the range of € 5.0 bn to € 5.6 bn.
Progress towards our combined ratio ambition of 94%
or better by 2018.
Pressure on operating investment income (net) to continue due to
reinvestments in a consistently low interest rate environment.
Continue with selective focus on profitable growth and further
shift new business mix towards capital efficient, unit-linked, and
protection products. Considering the disposal of our South Korean
business, revenues are expected to be in the range of € 60.0 bn to
€ 66.0 bn.
Operating profit between € 3.7 bn and € 4.3 bn.
while continuing to provide attractive returns and dividends.
ALTERNATIVE INVESTMENTS
C_Group Management Report
50
398
245
153
Operating expenses
(341)
(206)
Annual Report 2017 - Allianz Group
Operating result
39
(135)
18
1_Consolidation included. For further information about our Corporate and Other business segment, please refer to note 4
to the consolidated financial statements.
2_In light of the new operating profit definition, restructuring charges are reported outside of operating profit. Prior year
figures have been adjusted accordingly.
3_As of 31 December 2017, all requirements were still fulfilled to present Oldenburgische Landesbank AG, Oldenburg,
allocated to the reportable segment Banking (Corporate and Other), as a disposal group classified as held for sale. The
closing of the transaction was nearly completed as of 31 December 2017. Therefore, an impairment and a liability of
€ 233 mn were recognized in connection with the expected loss from the sale of Oldenburgische Landesbank AG. The
Allianz shares in Oldenburgische Landesbank AG were transferred to the buyer on 7 February 2018. For further infor-
mation, please refer to note 3 to the consolidated financial statements.
50
57
85
(299)
(994)
393
33
3
30
Operating revenues
6,408
5,545
6,022
Administrative expenses (net), excluding
acquisition-related expenses
Operating expenses
3,968
3,817
(151)
3,968
3,817
385
(151)
5,938
(37)
C_Group Management Report
Operating revenues
Our operating revenues increased by 6.4% on a nominal basis and
7.8% on an internal basis¹.
We recorded lower performance fees, due to a decrease in
PIMCO's fees, where carried interest declined due to the phasing out
of one large private fund. AllianzGI's performance fees went up signif-
icantly, driven by positive developments in all business regions, espe-
cially in the United States.
Other net fee and commission income rose, driven by increased
average third-party AuM, mostly at PIMCO. Third-party AuM-driven
margins declined mainly at AllianzGI.
Other operating revenues increased largely due to positive for-
eign currency translation effects on financial assets and liabilities
carried at fair value through profit and loss.
Other net fee and commission income
Other operating revenues
Asset Management business segment information
2017
2016
Delta
Performance fees
437
474
€ mn
Operating profit
2,440
2,206
Key figures reportable segments²
€ mn
2017
2016
Delta
3,235
Net income (loss)
1,951
(4,018)
(2,818)
(1,200)
(783)
(868)
(1,293)
1,285
Operating result?
Operating expenses
Operating revenues
234
Operating profit
Our operating profit increased by a strong 10.6% on a nominal basis
and 12.7% on an internal basis¹. This was mainly due to strong growth
in operating revenues, which was only partly offset by increased
administrative expenses.
The increase in administrative expenses was mainly driven by
higher personnel expenses at both PIMCO and AllianzGI. This
development was mainly due to a rise in variable compensation
going along with the overall positive business performance. To a
lesser extent, an increase in non-personnel expenses contributed to
the rise in administrative expenses.
Our cost-income ratio improved significantly, as revenue growth
outpaced the increase in expenses.
Net income
The increase in our net income corresponds to the positive develop-
ment of our operating profit.
1_Operating revenues/operating profit adjusted for foreign currency translation and (de-)consolidation effects.
Annual Report 2017 - Allianz Group
49
C_Group Management Report
CORPORATE AND OTHER
KEY FIGURES
Key figures Corporate and Other¹
€ mn
RoE between 10.0 % and 12.0%.
262
Pressure on investment income due to low interest rates
and continued capital market uncertainty.
Operating profit in the range of € 2.0 bn to € 2.6 bn.
Cost-income ratio well below 65%.
Our Corporate and Other business segment recorded an operating
loss of € 0.8 bn in 2017. We predict an operating loss in the range of
€ 0.8 bn to € 1.0 bn for Corporate and Other (consolidation included)
in 2018, as the positive impact in 2017, related to the cost allocation
scheme for pension provisions, will not recur in 2018.
Financing and liquidity
development and capitalization
The Allianz Group benefits from a very healthy liquidity position and
excellent financial strength with a capitalization well above regulato-
ry requirements.
As a result, we have full access to financial markets and are in a
position to raise financing at low cost. We are committed to maintain-
ing our strong financial flexibility, which is supported by both a pru-
dent steering of our liquidity resources and a well-balanced debt
maturity profile.
We also monitor the capital position of the Group, as well as at
each of our operating entities, very closely. In addition, we will contin-
ue to optimize the sensitivity of our solvency ratio to changes of inter-
est rates and spreads through asset/liability management and life
product design.
CORPORATE AND OTHER
Expected dividend development¹
In addition, Allianz SE has decided to launch a share buy-back
program with a volume of up to € 2.0 bn as part of a previously
announced policy to return capital to its shareholders on a flexible
basis. The share buy-back program is based on the authorization
granted by the Annual General Meeting on 7 May 2014. The buy-
back program, which started in January 2018, is envisaged to be
executed in the first six months of 2018. Allianz SE will cancel all
repurchased shares.
Through prudent capital management, Allianz Group aims to
maintain a healthy balance between an attractive yield and in-
vestment in profitable growth. We will continue to return 50% of
Allianz Group's net income (attributable to shareholders) to share-
holders in the form of a regular dividend.
Allianz also aims to keep the regular dividend per share at
least at the level paid in the previous year. Allianz will also continue
to return capital to its shareholders on a flexible basis.
All of the above remains subject to a sustainable Solvency II ra-
tio above 160%, which is substantially below our current level of
229% and 20 percentage points lower than our target range for
the Solvency II ratio of 180 to 220%.
Management's overall assessment of the current
economic situation of the Allianz Group
At the date of issuance of this Annual Report, and based on current
information regarding natural catastrophes and capital market
trends - in particular foreign currency, interest rates, and equities –,
the Board of Management has no indication that the Allianz Group is
facing any major adverse developments.
For 2017, the Allianz SE Board of Management and Supervisory
Board propose a dividend of € 8.00 per share.
Cautionary note regarding forward-looking statements
In 2018, we continue to expect a cost-income ratio of well below
65% (2017: 61.9%) despite the slightly negative impact on the cost-
income ratio related to the consolidation of Allianz Capital Partners
into AllianzGI, supported by our focus on expense discipline and
operational excellence. In the mid-term we expect our cost-income
ratio to reach 60%.
ASSET MANAGEMENT
Premium growth in 2018 is expected mainly from our Global
Lines such as Allianz Partners, where our B2B2C business activities
are bundled. Further growth is expected in our core European mar-
kets such as Germany, Spain and Italy, as well as in Turkey.
We believe the overall slow rise in prices we witnessed in a num-
ber of markets in 2017 will continue in 2018. However, as in previous
years we will keep our focus on achieving strong underwriting results
by adhering to our strict underwriting discipline, and will be willing to
accept a lower top line if target margins cannot be achieved.
In 2017, our combined ratio was at 95.2%, falling short of our ex-
pectation. This shortfall in profitability was driven by a number of
natural catastrophes. In 2018, we expect to achieve our target com-
bined ratio of 94%. The underlying assumption is that the aggregate
effect of improvements in pricing, claims management, and produc-
tivity will compensate for any underlying claims inflation. Despite the
high volatility of natural catastrophes in recent years, we assume
impacts to revert back to our historic claims experience.
As the low-interest-rate environment is likely to persist, invest-
ment income will remain under pressure due to the rather short dura-
tion of investments in the Property-Casualty business segment. Going
forward, we will continue to take measures to adapt our investment
strategy to changing market conditions.
Overall, we expect our 2018 operating profit to be in the range
of € 5.1 bn to € 5.7 bn (2017: € 5.1 bn).
LIFE/HEALTH INSURANCE
While we expect continued strong inflows in 2018 at both PIMCO
and AllianzGI, a moderation of the exceptionally high inflows of 2017
is likely to occur. Another growth opportunity should result from the
integration of Allianz Capital Partners into AllianzGl on
1 January 2018, with the opportunity to leverage this platform for
external growth in the future. While we expect performance fees to
decrease slightly, growth in AuM should drive an increase in man-
agement and loading fees, and thus a slight increase in operating
revenues, which should more than offset the moderate increase of
operating expenses we envisage. Pressure on profit growth is likely to
come from a weaker U.S. Dollar compared to 2017. All in all, we
envisage our operating profit to range between € 2.1 bn and € 2.7 bn
in 2018 (2017: € 2.4 bn).
In 2017, our Life/Health operating profit was € 4.4 bn, thus exceeding
the target range, mainly because of a higher net harvesting result
and a higher technical margin. For 2018, we expect operating profit
in our Life/Health business segment to be between € 3.9 bn and
€ 4.5 bn.
We will remain focused on shifting our new business mix towards
capital-efficient, unit-linked, and protection products - which, in view
of the prolonged low-yield environment, also match customer needs
- while maintaining strong shareholder returns and building on our
strong track record of product innovation. In addition, we will contin-
ue to actively manage both our new and in-force business through
continuous repricing, expense management, asset/liability manage-
ment, and crediting strategies, which should allow us to further miti-
gate the impacts of difficult market conditions – particularly the low
interest rates - and maintain our profitability targets.
It must be noted, however, that market volatility, along with the
level of net harvesting, can significantly affect the Life/Health busi-
ness segment results.
1_Operating revenues adjusted for foreign currency translation and (de)consolidation effects.
Annual Report 2017 - Allianz Group
53
C-Group Management Report
As pointed out in 2015, RoE is one of the key performance indica-
tors for the steering of our Life/Health business. In 2018, we expect
the ROE of the Life/Health business segment to be between 10.0%
and 12.0%.
We expect our revenues to increase by approximately 2% in 2018
(2017: +1.4%), supported by favorable volume and price effects.
The statements contained herein may include prospects, statements of future expectations, and other
forward-looking statements that are based on management's current views and assumptions and involve
known and unknown risks and uncertainties. Actual results, performance, or events may differ materially from
those expressed or implied in such forward-looking statements.
No duty to update
Paid-in capital
28,928
28,928
Retained earnings
27,199
27,087
Delta
Foreign currency translation adjustment
(762)
112
(1,986)
Unrealized gains and losses (net)
12,175
11,830
Total¹
(2,749)
Such deviations may arise due to, without limitation, (i) changes of the general economic conditions and
competitive situation, particularly in the Allianz Group's core business and core markets, (ii) performance of
financial markets (particularly market volatility, liquidity and credit events), (iii) frequency and severity of
insured loss events, including natural catastrophes, and the development of loss expenses, (iv) mortality and
morbidity levels and trends, (v) persistency levels, (vi) particularly in the banking business, the extent of credit
defaults, (vii) interest rate levels, (viii) currency exchange rates, including the Euro/U.S. Dollar exchange rate,
(ix) changes in laws and regulations, including tax regulations, (x) the impact of acquisitions, including related
integration issues and reorganization measures, and (xi) general competitive factors, in each case on a local,
regional, national, and/or global basis. Many of these factors may be more likely to occur, or more pro-
nounced, as a result of terrorist activities and their consequences.
2016
As of
31 December
The company assumes no obligation to update any information or forward-looking statement contained
herein, save for any information required to be disclosed by law.
54
54
1_This represents the management's current intention and may be revised in the future. Also, the decision regarding
dividend payments in any given year is subject to specific dividend proposals by the Management and Supervisory
Boards, each of which may elect to deviate if appropriate under the then prevailing circumstances, as well as to the
approval of the Annual General Meeting.
2_Includes share buy-back.
Annual Report 2017 - Allianz Group
2017
C_Group Management Report
Shareholders' equity¹
Shareholders' equity
€ mn
Shareholders' equity
As of
31 December
BALANCE SHEET REVIEW
PROPERTY-CASUALTY INSURANCE
Our net income attributable to shareholders decreased slightly
this past year, amounting to € 6.8 bn. Consistent with our disclosure
practice in the past, and given the susceptibility of our non-operating
results to adverse capital market developments, we refrain from
providing a precise outlook for net income. That said, following the
negative impact from the U.S. tax reform 2017 we expect a positive
annual impact of approximately € 0.3 bn from the U.S. tax reform
starting in 2018. As a consequence, and assuming no major disrup-
tions to occur in the capital markets, we anticipate an increase in net
income for 2018.
Our operating profit was in the upper half of our target range in
2017, hitting € 11.1 bn. For 2018, we envisage an operating profit of
€ 11.1 bn, plus or minus € 0.5 bn, as we expect a favorable develop-
ment in the Property-Casualty business segment, rather stable results
in the Asset Management business segment, and a slightly negative
development in the Life/Health and Corporate and Other business
segments.
1_For more detailed information on the previous year's outlook for 2017, please see the Annual Report 2016 from page 51
onward.
2_The information presented in the sections "Economic outlook", "Insurance industry outlook", and "Asset management
industry outlook" is based on our own estimates.
the world economy it is the strongest expansion period since 2011.
Global output is expected to increase by 3.2% in 2018.
The uncertain global political environment bears the potential
for higher financial market volatility. Monetary policy also contributes
to this. As the U.S. economy is expected to expand solidly and infla-
tion rates continue to move up, the Federal Reserve will carry on
normalizing its monetary policy stance. Three further rate hikes in the
course of 2018 look realistic. In addition, the Federal Reserve will rein
in its balance sheet moderately. In the Eurozone, the European Cen-
tral Bank is expected to terminate its monthly bond purchasing pro-
gram in October, having halved the monthly volume to € 30 bn as of
January 2018. No key interest rate hikes are expected before 2019.
Modestly rising yields on 10-year U.S. government bonds, the good
economic situation in the Eurozone, and gradually rising inflation
rates are likely to influence investors' interest rate expectations and
exert upward pressure on European benchmark bond yields. For 10-
year German government bonds, we see yields climbing modestly to
about 1% in the course of 2018; yields on 10-year U.S. government
bonds may end the year at close to 3%. While the ongoing Federal
Reserve rate-hiking cycle will weigh on the Euro, a number of other
factors will support it, among them the solid recovery in the Eurozone.
We expect the Dollar-to-Euro exchange rate to close the year at
about 1.15 (2017: 1.20).
Annual Report 2017 - Allianz Group
51
Although political uncertainties linger, the global economic outlook
for 2018 is favorable. The U.S. economy is expected to grow by 2.6%.
The recently adopted tax reform package should contribute to higher
growth. The net tax reductions will underpin companies' propensity to
invest and support solid consumption growth. In the Eurozone, growth
is likely to exceed 2% again in 2018. In particular, apart from the
favorable global backdrop, the fact that the loose European Central
Bank monetary policy continues to provide support, coupled with
broadly neutral fiscal policy, points to an ongoing recovery. As in
2017, the emerging market economies are expected to grow by close
to 5%. Asian emerging markets continue to benefit from the revival of
world trade and stable growth in China. The Eastern European coun-
tries capitalize on the continuing upturn in the Eurozone. We are
currently faced with a rather high degree of synchronization, and for
C-Group Management Report
The insurance industry can look towards 2018 with some optimism,
mainly for three reasons: Firstly, premium growth is set to increase as
the stronger economic momentum bolsters demand for insurance.
Secondly, the expected gradual rise in interest rates and yields can be
seen as the harbinger of the end of the long and cold "yield winter",
although it will still take some time until higher yields are reflected in
higher investment incomes. Finally, after the increase in financial
regulation in recent years, the insurance industry might enjoy a sort of
respite in 2018, a breathing space for better coping with the new
rules.
However, even if the macroeconomic and regulatory environ-
ment looks more favorable in 2018, it is by no means plain sailing for
the insurance industry. New technologies, from digitalization to Artifi-
cial Intelligence, continue to change the industry profoundly: Business
models need to be transformed, new skills to be learned, new part-
nerships to be built and new competition to be fended off. Further-
more, the ongoing digitalization of our lives will usher in a new era of
regulation, governing the use of data - the oil of the 21st century. On
the other hand, the upsides of the new technologies, in particular in
terms of simplicity and accessibility, should become more visible in
2018, too.
In the property-casualty sector, premium growth is expected to
accelerate in 2018, reflecting higher inflation and the ongoing broad-
based recovery of the global economy. As in previous years, emerging
markets are the main driver of growth: All regions, from Latin America
over Africa to Asia, should continue their recovery; in Emerging Asia,
premium growth could top 10%. In contrast, growth in advanced
markets will be much slower, at around 3%. Overall, we expect global
premium growth of about 5% in 2018 (in nominal terms and adjusted
for foreign currency translation effects). Assuming average losses
from natural catastrophes and more positive rate dynamics - particu-
larly in business lines affected by last year's losses - overall profitabil-
ity is likely to increase, although investment income might remain a
drag.
In the life sector, the overall picture is quite similar – with one ex-
ception: The growth lead of Emerging Asia over the rest of the world
is even more pronounced. While the advanced markets' recovery
proceeds at a snail's pace and other emerging markets show robust
but more or less stable growth, many of Asia's emerging markets are
expected to clock growth rates of 15% or more. A rising middle class,
urbanization, aging societies, and last but not least a favorable policy
environment underpin the continued growth story. Overall, we expect
global premium growth to increase by about 6% in 2018 (in nominal
terms and adjusted for foreign currency translation effects) compared
to 2017. Global industry profitability could also improve in 2018,
albeit only modestly. This change for the better has not so much to do
with the slight rise in interest rates; it is mainly a result of recent man-
agement actions which steered insurance portfolios towards less
capital intensive business lines (such as protection) and investment
portfolios towards riskier but higher-yielding asset classes (such as
infrastructure).
Asset management industry outlook
For the asset management industry, 2018 might bring higher finan-
cial market volatility due to the geopolitical uncertainty. While the
positive economic outlook generally supports stock markets, we
believe that current valuation levels are very high already. In addition,
central banks are increasingly likely to move further away from ac-
commodative monetary policies. We therefore expect a more modest
capital market contribution to AuM growth. This may weigh down on
net inflows in certain asset classes, while it might create opportunities
in other areas. Investors may look to further de-risk into bonds as
yields become more attractive. Furthermore, bonds continue to be
particularly interesting for the growing number of retirees in devel-
oped countries as well as for liability-driven investors looking for a
stable stream of income.
Insurance industry outlook
The industry's profitability remains under pressure from both con-
tinuous flows into passive products and rising distribution costs, so the
trend towards industry consolidation will continue. At the same time,
digital channels are expected to continue gaining prominence.
Measures aimed at strengthening regulatory oversight and reporting
could also affect profitability in the asset management sector. In
order to continue growing, it is vital for asset managers to keep suffi-
cient business volumes, ensure efficient operations, and maintain
strong investment performance.
Economic outlook²
With a cost-income ratio of 61.9% our Asset Management business segment came in well below 65%.
Results 2017
Operating profit of € 11.1 bn.
Return on equity (ROE)¹ amounted to 11.8% (2016: 12.3%). Proposed dividend at € 8.00 (2016: € 7.60) per
share. Stable payout ratio of 50%, based on expected number of eligible shares at the Annual General
Meeting.
Property-Casualty with continued sound risk selection and solid internal growth, Life/Health with growing
asset base and strong new business margins, and Asset Management with strong net inflows.
Gross premiums written increased by 1.4%. Internal growth of 2.3% was mainly driven by Allianz Partners,
Germany and Brazil.
Operating profit of € 5.1 bn is in the lower half of our target range. Despite improvements in our
underwriting result a high burden from natural catastrophes impacted our results.
1_Represents the ratio of net income against the average total equity, excluding unrealized gains/losses on bonds, net of shadow accounting, at the beginning of the year and at the end of the year. Prior year figures have been adjusted in order to
reflect the impact resulting from an accounting policy change to measure the Guaranteed Minimum Income Benefit (GMIB) liability at fair value for our life business.
Combined ratio was at 95.2% and above our expectations. The shortfall in profitability was driven by the
development of natural catastrophes.
Revenues of € 67.3 bn above our outlook range of € 60.0 bn to € 66.0 bn. Strong growth from capital-
efficient products in Germany and from unit-linked sales in Italy and Taiwan.
Operating profit of € 4.4 bn is above target range, driven by investments with a net harvesting result above
normalized level and a higher technical margin.
ROE¹ of 12.1% above outlook range.
Operating investment result reached favorable € 20.0 bn, which is slightly lower than 2016, as the previous
year had been supported by a high level of realized gains from our portfolio de-risking actions.
Total AuM grew by € 89 bn to € 1,960 bn as of 31 December 2017. The increase was driven by strong net
inflows and positive market returns, together more than offsetting negative foreign currency translation
effects. In the course of 2017, our Asset Management business segment saw outstanding third-party AuM
net inflows of € 150 bn mainly due to PIMCO, but supported by AllianzGI.
Operating profit amounted to € 2.4 bn, exceeding the mid-point of the target range.
Operating investment income (net) decreased slightly, mainly due to an unfavorable foreign currency
translation result net of hedging.
Overview: outlook and assumptions 2018 for the
Allianz Group
Outlook 2018
ALLIANZ GROUP
ASSUMPTIONS
Our outlook assumes no significant deviations from the following
underlying assumptions:
Global economic growth is set to continue.
-
Modest rise in interest rates expected.
-
C_Group Management Report
A 100 basis point increase or decrease in interest rates would,
respectively, either raise or lower expected operating profit by
approximately € 0.1 bn in the first year following the rate
change.
No disruptive fiscal or regulatory interference.
Level of claims from natural catastrophes at expected average
levels.
Average U.S. Dollar to Euro exchange rate of 1.22.
A 10% weakening or strengthening of the U.S. Dollar com-
pared to our planned exchange rate of 1.22 to the Euro
would have a negative or positive impact on operating profits
of approximately € 0.3 bn, respectively.
Management's assessment of expected revenues
and earnings for 2018
In 2017, our total revenues amounted to € 126.1 bn, a 3.0% increase
on a nominal and a 5.0 % increase on an internal basis¹ compared to
2016. For 2018, we envisage relatively stable total revenues, with
Property-Casualty and Asset Management revenues showing an
upward trend, while Life/Health revenues remaining rather stable due
to our selective focus on profitable growth.
No major disruptions of capital markets.
Annual Report 2017 - Allianz Group
52
Cost-income ratio between 60% and 65%.
PROPERTY-CASUALTY
LIFE/HEALTH
ASSET MANAGEMENT
Operating profit of € 11.1 bn, plus or minus € 0.5 bn.
Protection of shareholders' value,
while continuing to provide attractive returns and dividends.
Selective profitable growth.
Growth in gross premiums written: approximately 2% on an internal
basis.
Operating profit in the range of € 5.1 bn to € 5.7 bn.
Achievement of our combined ratio target of 94% or better.
Pressure on operating investment income (net) to continue, due to
reinvestments in a consistently low interest rate environment.
Continue with focus on profitable growth and further shift new business
mix towards capital efficient, unit-linked, and protection products.
Revenues are expected to be in the range of € 62.0 bn to € 68.0 bn.
Operating profit between € 3.9 bn and € 4.5 bn.
RoE between 10.0 % and 12.0%.
Pressure on investment income due to low interest rates
and continued capital market uncertainty.
We expect a moderate increase in total AuM due to solid third-party net
inflows at both AllianzGI and PIMCO in 2018, supported by a slightly
positive market return.
Operating profit in the range of € 2.1 bn to € 2.7 bn.
Slight increase in total AuM due to positive market return,
supported by moderate net inflows at PIMCO and at AllianzGl.
6,574
4_For further information about participating life business, please refer to note 15 to the consolidated financial statements.
5 Under book value deduction, the book value of the respective entity is deducted from eligible Own Funds of the Group.
C_Group Management Report
True Customer Centricity: making superior customer experience
the top priority for all our actions.
-
In order to achieve these aspirations, the Board of Management of
Allianz SE has defined a clear business strategy which is based on the
following five pillars:
OUR BUSINESS STRATEGY
To ensure the sustainability of our performance, we have set our-
selves health targets for customer loyalty and employee engage-
ment: Our ambition is for at least 75% of our businesses to be or
become rated by their customers as Loyalty Leader or above-market
in terms of Net Promoter Score (NPS). At the same time, we aim to
have our Inclusive Meritocracy Index at 72% (or above) in 2018, a
level we reached already in 2017.
These aspirations have been translated into clear ambitions for 2018.
With regard to financial performance, we strive for a return on equity
of 13% (excluding unrealized gains/losses on bonds net of shadow
accounting), while growing our earnings per share at a compound
annual growth rate of 5%.
Customer centricity: practicing relentless execution centered on
customers while outperforming competition.
Market leadership: maintaining a commanding position in each
market with superior skills and scale.
Portfolio strength: establishing a strong and high-quality portfo-
lio in large and attractive markets.
Allianz Group seeks to position itself as the world's most trusted fi-
nancial institution focusing on the following:
OUR BUSINESS ASPIRATIONS
OUR STRATEGY
Digital by Default: moving from selected leading assets to be-
come "Digital by Default" everywhere.
Communication and transparency: Transparent risk disclosure
provides the basis for communicating our strategy and perfor-
mance to internal and external stakeholders, ensuring a sustain-
able positive impact on valuation and financing. It also strength-
ens the risk awareness and risk culture throughout the entire
Group.
Risk strategy and risk appetite: Our risk strategy defines our risk
appetite consistent with our business strategy. It ensures that re-
wards are appropriately based on the risks taken and capital re-
quired and that delegated authorities are in line with our overall
risk-bearing capacity and strategy.
Risk identification and underwriting: Risk identification and
underwriting form the foundation for adequate risk management
decisions. Supporting activities include standards for underwrit-
ing, valuation methods, individual transaction and new product
approvals, emerging-/operational-/top-risk assessments, and
scenario analysis, amongst others.
Our risk management system is based on the following four pillars:
Integration of risk considerations and capital needs into man-
agement and decision-making process by attributing risk and al-
locating capital to business segments, products, and strategies.
Consistent and proportional application of an integrated risk
capital framework to protect our capital base and support effec-
tive capital management.
Promotion of a strong risk management culture, supported by a
robust risk governance structure.
As a provider of financial services, we consider risk management to
be a core competency and an integral part of our business. Our risk
management framework covers all operations and subsidiaries
within the Group in proportion to the inherent risks of the activities,
ensuring that risks across the Group are consistently identified, ana-
lyzed, assessed, and managed. The primary goals of our risk man-
agement framework are:
RISK MANAGEMENT FRAMEWORK
Risk governance system
We closely monitor the capital position and risk concentrations
of the Group and its related undertakings along each of these dimen-
sions, and apply regular stress tests (including standardized, historical
and reverse stress test scenarios as well as monthly stress scenarios
focusing on current and possible future developments). This allows us
to take appropriate measures to ensure our continued capital and
solvency strength.
In addition, we take into account the requirements of regulators
and rating agencies. While capital requirements imposed by regula-
tors constitute a binding constraint, meeting rating agencies' capital
requirements and maintaining strong credit ratings are strategic
business objectives of the Allianz Group.
Allianz aims to ensure that the Group is adequately capitalized at all
times and that all related undertakings at least meet their respective
regulatory capital requirements for the benefit of both shareholders
and policyholders. Furthermore, risk capital reflecting the risk profile
and the cost of capital are important aspects considered in business
decisions.
Risk reporting and monitoring: Our comprehensive qualitative
and quantitative risk monitoring and reporting framework pro-
vides management with the transparency needed to assess
whether our risk profile falls within delegated limits and to identi-
fy emerging issues quickly. For example, risk dashboards and limit
consumption reports as well as scenario analysis and stress tests
are regularly prepared and communicated.
Technical Excellence: creating superior margins, innovation, and
growth through best talents and state-of-the-art skills.
Growth Engines: systematically exploiting new sources for profit-
able growth.
Annual Report 2017 - Allianz Group
Other functions and bodies
C-Group Management Report
63
Annual Report 2017 - Allianz Group
1_Related undertakings are also referred to as operating entities.
Consistent implementation of the Group's risk management
framework in the related undertakings, including regular dialog
between the Group and the entity, is ensured through, for example,
the Group Risk representation on local Risk Committees as well as the
regular assessments of the local risk management framework and
Chief Risk Officers by Group Risk. Moreover, the Group Chief Risk
Officer must be consulted on decisions regarding the staffing of local
Chief Risk Officers.
A risk function headed by a Chief Risk Officer, which is
independent from business line management, is established by each
related undertaking. A local Risk Committee supports both the Board
of Management and the Chief Risk Officer by acting as the primary
risk controlling body.
Related undertakings¹ are responsible for their own risk management,
including adherence to both external requirements (for example,
those imposed by local regulators) and internal standards. Their
Boards of Management are responsible for setting and approving a
local risk strategy during the annual Strategic and Planning Dialogs
with the Group, and for ensuring adherence to their risk strategy.
Related undertakings
Group Risk strengthens and maintains the Group's risk network
through regular and close interaction with the management of relat-
ed undertakings and other key stakeholders such as the local finance,
risk, actuarial and investment departments. A strong group-wide risk
network allows the Allianz Group to identify risks at early stages and
bring them to management's attention.
Group Risk supports the Board of Management in developing
the risk management framework, which covers risk governance, risk
strategy and appetite, and risk monitoring and reporting. Group Risk
is operationally responsible for assessing risks and monitoring limits
and accumulations of specific risks across business lines, including
natural and man-made disasters and exposures to financial markets
and counterparties.
Group Risk is managed by the Group Chief Risk Officer and supports
the Board of Management of Allianz SE, including its committees,
through the analysis and communication of risk-management-
related information and in implementing committee decisions.
Group Risk management function
As a general principle, the "first line of defense" rests with busi-
ness managers in the related undertaking. They are responsible for
both the risks and returns from their decisions. Our "second line of
defense" is made up of independent global oversight functions in-
cluding Risk, Actuarial, Compliance, and Legal, which support the
Board in defining the risk frameworks within which the business can
operate. Audit forms the "third line of defense", independently and
regularly reviewing risk governance implementation, compliance with
risk principles, performing quality reviews of risk processes, and test-
ing adherence to business standards, including the internal control
framework.
A comprehensive system of risk governance is achieved by setting
standards related to organizational structure, risk strategy and appe-
tite, limit systems, documentation, and reporting. These standards
ensure the accurate and timely flow of risk-related information and a
disciplined approach towards decision-making and execution at both
the global and local level.
OVERALL RISK ORGANIZATION AND ROLES IN RISK
MANAGEMENT
The Group Finance and Risk Committee (GFRC) provides oversight of
the Group's and Allianz SE's risk management framework, acting as a
primary early-warning function by monitoring the Allianz Group's and
Allianz SE's risk profiles as well as the availability of capital. The GFRC
also ensures that an adequate relationship between return and risk is
maintained. Additionally, the GFRC defines risk standards, forms the
limit-setting authority within the framework set by the Board of Man-
agement, and approves major financing and reinsurance transac-
tions. Finally, the GFRC supports the Board of Management with
recommendations regarding the capital structure, capital allocation,
and investment strategy, including the strategic asset allocation.
Group Finance and Risk Committee
The Risk Committee of the Supervisory Board monitors the effective-
ness of the Allianz risk management framework. Furthermore, it
focuses on risk-related developments as well as general risks and
specific risk exposures.
Supervisory Board Risk Committee
Within our risk governance system, the Supervisory Board and
Board of Management of Allianz SE have both Allianz SE and group-
wide responsibilities. The Board of Management formulates business
objectives and a corresponding risk strategy; the core elements of the
risk framework are set out in the Allianz Group Risk Policy, approved
by the Board of Management. The Supervisory Board advises, chal-
lenges and supervises the Board of Management in the performance
of its management activities. The following committees support the
Board and the Supervisory Board on risk issues:
Allianz's approach to risk governance enables an integrated man-
agement of local and global risks and ensures that our risk profile
remains consistent with both our risk strategy and our capacity to
bear risks.
SUPERVISORY BOARD AND BOARD OF
MANAGEMENT
RISK GOVERNANCE STRUCTURE
The Board of Management of Allianz SE has also defined a strategy
for the management of risk. This risk strategy places a particular
emphasis on protecting the Allianz brand and reputation, remaining
solvent even in the event of extreme adverse scenarios, maintaining
sufficient liquidity to always meet financial obligations, and providing
resilient profitability.
Inclusive Meritocracy: reinforcing a culture where both people
and performance matter, including gender diversity and women
in leadership.
C_Group Management Report
Target and strategy of risk management
RISK AND OPPORTUNITY REPORT
C_Group Management Report
12
(2,975)
Amortization, unlocking, and true-up of DAC
(401)
(32)
Scope
(881)
(1,117)
Definition: policyholder participation³
64
3_As per notes to the consolidated financial statements.
(47)
Definition: URR amortized
1_Prior year figures changed in order to reflect the roll out of profit source reporting to Turkey.
2_As per Group Management Report.
(1,924)
(1,779)
Amortization, unlocking, and true-up of DAC²
3,586
3,265
Capitalization of DAC
(6,612)
(6,565)
Acquisition and administrative expenses (net)³
178
31
Scope
4
13
(3,142)
In addition to Group Risk and the local risk functions, legal, compli-
ance, and actuarial functions established at both the Group and
related entity level constitute additional components of the "second
line of defense".
Commissions and profit received
95
62
61
Annual Report 2017 - Allianz Group
2 In light of the new operating profit definition, restructuring charges are reported outside operating profit unless shared
with policyholders. Prior year figures have been adjusted accordingly.
1_Prior year figures have been adjusted in order to reflect the impact resulting from an accounting policy change to
measure the Guaranteed Minimum Income Benefit (GMIB) liability at fair value for our life business. For further infor-
mation please refer to note 2 to the consolidated financial statements.
3_For German Speaking Countries, policyholder participation on revaluation of DAC/URR capitalization/amortization.
4_As per notes to the consolidated financial statements.
1 Prior year figures changed in order to reflect the roll-out of profit source reporting to Turkey.
2_As per Group Management Report.
(1,829)
(1,858)
4
13
Administrative expenses
on reinsurance business ceded
Administrative expenses
(189)
(123)
Scope
148
148
Definitions
(1,793)
(1,897)
Administrative and other expenses²
(4,782)
(4,707)
Acquisition costs
77
on reinsurance business ceded
on reinsurance business ceded
Group Legal and Group Compliance seek to mitigate legal risks
with support from other departments. The objectives of both func-
tions are to ensure that laws and regulations are observed, to react
appropriately to all impending legislative changes or new court
rulings, to attend to legal disputes and litigation, and to provide
legally appropriate solutions for transactions and business processes.
In addition, Group Compliance - in conjunction with Group Legal and
other experts involved - is responsible for integrity management,
which aims to protect the Allianz Group, our related undertakings
and employees from regulatory risks.
Risk based steering and risk management
Strategic risk is the risk of a decrease in the company's value arising
from adverse management decisions on business strategies and their
implementation.
STRATEGIC RISK
There are certain risks which are not adequately addressed or miti-
gated by additional capital and are therefore excluded from the
internal model. For the identification, analysis, assessment, monitor-
ing, and management of these risks we also use a systematic ap-
proach, with risk assessment generally based on qualitative criteria or
scenario analyses. The most important of these other risks are strate-
gic, liquidity, and reputational risk.
OTHER RISKS NOT MODELED IN THE INTERNAL
MODEL
This framework triggers specific mitigating control programs. For
example, compliance risks are addressed via written policies and
dedicated compliance programs monitored by the Group Compli-
ance function at Allianz SE. The risk of financial misstatement is miti-
gated by a system of internal controls covering financial reporting.
Outsourcing risks are covered by an Outsourcing Policy, Service Level
Agreements, and Business Continuity and Crisis Management pro-
grams to protect critical business functions from these events. Cyber
risks are mitigated through investments in cyber security and a variety
of ongoing control activities.
"first line of defense", report operational risk events in a central data-
base, and ensure that the framework is implemented in their respec-
tive operating entity.
Allianz has developed a consistent operational risk manage-
ment framework, which is applied across the Group and focuses on
the early recognition and proactive management of material opera-
tional risks. The framework defines roles and responsibilities as well
as management processes and methods: Local risk managers, in their
capacity as the "second line of defense", identify and evaluate rele-
vant operational risks and control weaknesses via a dialog with the
Operational risk capital is calculated using a scenario-based
approach based on expert judgement as well as internal and exter-
nal operational loss data. Estimates of frequency and severity of
potential loss events for each material operational risk category are
calculated and used as a basis for our internal model calibration.
The operational risk capital of the Group is dominated by the risk of
potential losses within the areas of "Clients, Products & Business
Practices" and "Execution, Delivery and Process Management".
Other operational risks, including, for example, internal or exter-
nal fraud, financial misstatement risk, a breach of cyber security
causing business disruption or fines, a potential failure at our out-
sourcing partners causing a disruption to our working environ-
ment, etc.
"Execution, Delivery and Process Management" potential losses
arising from transaction or process management failures. Exam-
ples include interest and penalties from non-payment or under-
payment of taxes or losses associated with broker and agent dis-
tribution processes. These losses tend to be of a relatively higher
frequency but with a low financial impact (although single large
loss events can occur).
"Clients, Products & Business Practices" potential losses due to a
failure to meet a professional obligation or from the design of a
product. Examples include misselling, non-compliance with inter-
nal or external requirements related to products, anti-trust behav-
ior, data protection, sanctions and embargoes, etc. These losses
tend to be of a lower frequency but with a potentially high finan-
cial impact.
Strategic risks are identified and evaluated as part of the Group's
Top Risk Assessment process, and discussed in various Board of Man-
agement-level committees (e.g. Group Finance and Risk Committee).
We also monitor market and competitive conditions, capital market
requirements, regulatory conditions, etc., to decide if strategic ad-
justments are necessary.
Operational risks represent losses resulting from inadequate or failed
internal processes and can stem from a wide variety of sources, for
example:
Assumptions on policyholder behavior are set in line with ac-
cepted actuarial methods and are based on own historical data
where available. If there is no historical data, assumptions are based
on industry data or expert judgment. This is then used as a basis to
determine the economic impact of policyholder behavior under
different scenarios within our internal model.
For the Life/Health business, policyholder behavior risks are risks
related to the unpredictable, adverse behavior of policyholders in
exercising their contractual options, including for example the early
termination of contracts, surrenders, partial withdrawals, renewals,
and annuity take-up options.
the Property-Casualty business. Cost risks are associated with the risk
that expenses incurred in administering policies are higher than
expected or that new business volume decreases to a level that does
not allow Allianz to absorb its fixed costs. Business risk is measured
relative to baseline plans.
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66
Business risks include cost risks and policyholder behavior risks, and
are mostly driven by the Life/Health business and to a lesser extent by
BUSINESS RISK
We measure risks within our internal model, distinguishing,
where appropriate, between risks affecting the absolute level and
trend development of the actuarial assumptions as well as pandemic
risk scenarios. Depending on the nature and complexity of the risk
involved, our health business is represented in the internal model
according to Property-Casualty or Life/Health calculation methods
and is therefore included in the relevant Property-Casualty and
Life/Health figures accordingly. However, most of our health business
is attributable to the Life/Health business segment.
Life/Health underwriting risk arises from profitability being lower
than expected. As profitability calculations are based on several
parameters such as historical loss information, assumptions on
inflation, on mortality, or on morbidity - realized parameters may
differ from the ones used for underwriting. For example, higher-than-
expected inflation may lead to higher medical claims in the future.
However, beneficial deviations can also occur; for example, a lower
morbidity rate than expected will most likely result in lower claims.
-
OPERATIONAL RISK
The most important strategic risks are directly addressed through
Allianz's Renewal Agenda, which focuses on True Customer Centricity,
Digital by Default, Technical Excellence, Growth Engines, and Inclu-
sive Meritocracy. Progress on mitigating strategic risks and towards
meeting the Renewal Agenda objectives is monitored and evaluated
as part of the strategic and planning dialog between Allianz Group
and the related undertakings.
LIQUIDITY RISK
Liquidity risk is defined as the risk that current or future payment
obligations cannot be met or can only be met on the basis of ad-
versely altered conditions. Liquidity risk can arise primarily if there are
mismatches in the timing of cash in- and out-flows.
3_As mentioned under section "General approach", Allianz Life US is based on third-country equivalence.
2_Since 30 September 2015, Allianz Life US has been accounted for at 150% of RBC CAL, based on third-country
equivalence, within our Group capitalization.
1 The Allianz Environmental, Social, Governance (ESG) Board and the ESG office are constituted as advisor to the Board
of Management of Allianz SE and will further elevate environmental, social, and governance aspects in corporate
governance and decision-making processes at the Allianz Group.
Risk capital related to our European banking operations is allo-
cated to the Corporate and Other business segment, based on the
approach applied by banks in accordance with the local require-
ments resulting from the Basel regulation (Basel standards). Capital
requirements for banks represent an insignificant amount of approx-
Smaller related undertakings within the European Economic Ar-
ea which are not covered by the group internal model are reflected
with their standard formula results. At Group level, the solvency capi-
tal requirements for smaller insurance undertakings outside the
European Economic Area with only an immaterial impact on the
Group's risk profile are accounted for by means of book value deduc-
tion.5
COVERAGE OF THE RISK CAPITAL CALCULATIONS
Allianz's group internal model to calculate the solvency capital re-
quirement covers all major insurance operations³. This includes the
relevant assets (including fixed income, equities, real estate, and
derivatives) and liabilities (including the run-off of all current and
planned technical provisions as well as deposits, issued debt and
other liabilities). For with-profit products in the Life/Health business
segment, options and guarantees embedded in insurance contracts -
including policyholder behavior - are taken into account.4
The required risk capital is defined as the difference between the
current portfolio value and the portfolio value under adverse condi-
tions at the 99.5% confidence level. Because we consider the impact
of a negative or positive event on all risk sources and covered busi-
nesses at the same time, diversification effects across products and
regions are taken into account. The results of our Monte Carlo simula-
tion allow us to analyze our exposure to each source of risk both
separately and in aggregate. We also analyze several pre-defined
stress scenarios representing historical events, reverse stress tests, and
adverse scenarios relevant for our portfolio. Furthermore, we conduct
ad-hoc stress tests monthly to reflect current political and financial
developments or to analyze a non-financial risk category more deeply.
Our internal model is based on a VaR approach using a Monte Carlo
simulation. Following this approach, we determine the maximum loss
in portfolio value in scope of the model within a specified timeframe
("holding period", set at one year) and probability of occurrence
("confidence level", set at 95.5%). We simulate risk events from all risk
categories ("sources of risk") modeled and calculate the portfolio
value based on the net fair value of assets minus liabilities, including
risk mitigating measures like reinsurance contracts or derivatives,
under each scenario.
INTERNAL MODEL
We utilize an approach for the management of our risk profile and
solvency position that reflects the Solvency II rules, in that it comprises
our approved internal model and covers all major insurance opera-
tions². Other entities are reflected based on standard formula results
as well as on sectoral or local requirements for non-insurance opera-
tions, in accordance with the Solvency II framework.
GENERAL APPROACH
We define internal risk capital as the capital required to protect us
against unexpected, extreme economic losses, and which forms the
basis for determining our Solvency II regulatory capitalization. On a
quarterly basis, we calculate and consistently aggregate internal risk
capital across all business segments. We also project risk capital
requirements on a bi-weekly basis during periods of financial market
turbulence.
Internal risk capital framework
The identification and assessment of reputational risks are part
of a yearly Top Risk Assessment, during which senior management
also decides on a risk management strategy and related actions. This
is supplemented by quarterly updates. In addition, reputational risk is
managed on a case-by-case basis. Single cases with a potential
impact on other related undertakings or the Group have to be re-
ported to the Allianz Group for pre-approval.
With the support of Group Communications and Corporate Re-
sponsibility (GCORE), Group Compliance, and the ESG Office¹, Group
Risk defines sensitive business areas and applicable risk guidelines
that are mandatory for all related undertakings in the Allianz Group.
All Group and local functions affected cooperate in the identification
of reputational risk. GCORE is responsible for risk assessment, which is
based on a group-wide methodology. Since 2015, Allianz has em-
bedded conduct risk triggers for fair products and services into the
reputational risk management process.
Reputational risk is the risk of an unexpected drop in the value of
the Allianz SE share price, the value of the in-force business, or the
value of future business caused by a decline in our reputation as-
sessed by external stakeholders.
Allianz's reputation as a well-respected and socially aware provider
of financial services is influenced by our behavior in a range of areas
such as product quality, corporate governance, financial perfor-
mance, customer service, employee relations, intellectual capital, and
corporate responsibility.
REPUTATIONAL RISK
In addition, the accumulated liquidity position of Allianz SE's
cash pool is monitored and forecast on a daily basis. It is subject to an
absolute minimum strategic cushion amount and an absolute mini-
mum target liquidity amount, while the strategic liquidity planning for
Allianz SE over time horizons of 12 months and three years is report-
ed to the Board of Management regularly and is subject to an abso-
lute minimum target level.
An identical liquidity stress-testing framework is applied to
Allianz SE. Major contingent liquidity requirements include market
risk scenarios for Allianz SE and its subsidiaries, non-availability of
external capital markets, and reinsurance risk scenarios for Allianz SE.
on liquidity risks. These analyses are performed at the operating
entity level and are monitored by the Group.
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Our related undertakings manage liquidity risk locally, using as-
set/liability management systems designed to ensure that assets and
liabilities are adequately matched. Local investment strategies par-
ticularly focus on the quality of investments and ensure a significant
portion of liquid assets (e.g. high-rated government bonds or covered
bonds) in the portfolios. In the course of liquidity planning, we recon-
cile liquidity sources (e.g. cash from investments and premiums) and
liquidity needs (e.g. payments due to insurance claims and expenses)
under best-estimate plan, as well as under idiosyncratic and systemic
adverse liquidity scenarios, to allow for a group-wide consistent view
Underwriting risks in our Life/Health operations (biometric risks)
include mortality, disability, morbidity, and longevity risks. Mortality,
disability, and morbidity risks are associated with the unexpected
increase in the occurrence of death, disability, or medical claims.
Longevity risk is the risk that the reserves covering life annuities and
group pension products might not be sufficient due to longer life
expectancies of the insured.
LIFE/HEALTH
In order to reduce the risk of unexpected reserve volatility, our
operating entities constantly monitor the development of reserves for
insurance claims on a line-of-business level. In addition, operating
entities generally conduct annual reserve uncertainty analyses based
on similar methods used for reserve risk calculations. The Allianz
Group performs regular independent reviews of these analyses and
Group representatives participate in the local reserve committee
meetings.
Similar to premium risk, reserve risk is calculated based on actu-
arial models. The reserve distributions derived are then used within
the internal model to calculate potential losses based on a prede-
fined confidence level of 99.5%.
Our operating entities typically invest in assets which are dominated
in the same currency as their liabilities; however, some foreign curren-
cy exposures are allowed to support portfolio diversification and
tactical investment decisions. Our largest exposure to foreign curren-
cy risk comes from our ownership of non-Euro entities: if the Euro
strengthens, the Euro equivalent net asset value of our foreign subsid-
iaries will decline from a Group perspective; however, at the same
time the capital requirements in Euro will decrease, partially mitigat-
ing the total impact on the Group capitalization. Based on our for-
eign-exchange management limit framework, currency risk is moni-
tored and managed at both the local and Group level.
CURRENCY RISK
Fixed-income assets such as bonds may lose value if credit spreads
widen. However, our risk appetite for credit spread risk takes into
account the underlying economics of our business model: As a liabil-
ity-driven investor, we typically hold fixed-income assets until maturity.
This implies that short-term changes in market prices do not affect us.
In our capacity as a long-term investor, this gives us the opportunity to
invest in bonds yielding spreads over the risk-free return and earning
this additional yield component.
CREDIT SPREAD RISK
The Group's insurance-focused operating entities may hold equity
investments to diversify their portfolios and take advantage of ex-
pected long-term returns. Strategic asset allocation benchmarks and
investment limits are used to manage and monitor these exposures.
In addition, equity investments fall within the scope of the credit risk
platform to avoid single-name risk concentrations. Risks from chang-
es in equity prices are normally associated with decreasing share
prices and increasing equity price volatilities. As stock markets also
might increase, opportunities may arise from equity investments.
EQUITY RISK
As an insurance company, we are exposed to changing inflation
rates, predominantly due to our Non-Life insurance obligations but
also due to inflation-indexed internal pension obligations. Inflation
assumptions are taken into account in our product development and
pricing. However, unexpected inflation increases both future claims
and expenses, leading to greater liabilities; conversely, if future infla-
tion rates were to be lower than assumed, liabilities would be lower
than anticipated. The risk of changing inflation rates is incorporated
in our internal model.
INFLATION RISK
than the rates guaranteed. Interest rate risk is managed within our
asset/liability management process and controlled via interest rate
sensitivity and duration mismatch limits for the Group and entities.
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Allianz is a liability-driven investor. If the duration of our assets is
shorter than our liabilities, we may suffer an economic loss in a fall-
ing-rate environment as we reinvest maturing assets at lower rates
prior to the maturity of liability contracts. This risk is higher for long-
dated life investment and savings products, with a significant part of
the Life/Health business segment's interest rate risk coming from
Western Europe, mainly from traditional life insurance products with
guarantees. By contrast, opportunities may arise when interest rates
increase. This may result in returns from reinvestments being higher
INTEREST RATE RISK
Strategic asset allocation benchmarks and risk limits, including
financial VaR, stand-alone interest rate and equity sensitivity limits,
and foreign exchange exposure limits, are defined for the Group and
the related undertaking. Limits are closely monitored and, if a breach
occurs, countermeasures are implemented which may include the
escalation and/or closing of positions. Furthermore, we have put in
place standards for hedging activities due to exposure to fair-value
options embedded in life insurance products. Finally, guidelines are
provided by the Group regarding certain investments, new investment
products and the use of derivatives. Compliance with these guidelines
is controlled by the respective risk and controlling functions.
To measure these market risks, real-world stochastic models for
the relevant risk factors are calibrated using historical time series to
generate possible future market developments. After the scenarios
for all the risk factors are generated, the asset and liability positions
are revalued under each scenario. The worst-case outcome of the
sorted portfolio profit and loss distribution at a certain confidence
level (99.5%) defines the market Value at Risk (VaR). For entities
modeled using the standard formula, the market risk is based on
aggregating the losses under defined standard formula shocks.
As the fair values of our investment portfolios and liabilities de-
pend on changes on the financial markets, we are exposed to the risk
of adverse financial market developments. The long-dated liabilities
in our Life/Health business segment contribute to interest rate risk, in
particular if they cannot be matched by available investments due to
long maturities; in addition, we are also exposed to adverse changes
in equity and real estate prices, credit spread levels, inflation, implied
volatilities, and currencies, which might impact the value of our port-
folios.
As an inherent part of our insurance operations, we collect premiums
from our policyholders and invest them in a wide variety of assets; the
resulting investment portfolios back the future claims and benefits to
our customers. In addition, we also invest shareholders' capital, which
is required to support the business. Finally, we use derivatives, mostly
to hedge our portfolio against adverse market movements (for ex-
ample, protective puts) or to reduce our reinvestment risk (for exam-
ple, by using forwards, swaps, or swaptions). Asset/liability manage-
ment (ALM) decisions are taken based on the internal model,
considering both the risks and the returns on the financial market.
MARKET RISK
As a consequence, the internal model is fully integrated in busi-
ness steering and its application satisfies the so-called "use_test"
under Solvency II.
profitable lines of business and products on a sustainable basis,
reflecting the capital commitment over the life time of the products
and is a key criterion for capital allocation decisions.
1_From a formalistic perspective, the German Supervisory Authority deems our model to be "partial" because not all our
entities are using the internal model. Some of our smaller entities report under the standard model and others under the
deduction and aggregation approach. Without loss of generality, we might use the term internal model in the following
chapters, e.g., in case descriptions also referring to entities that use the internal model, or descriptions focusing on
processes with respect to the internal model components.
Allianz steers its portfolio using a comprehensive view of risk and
return based on the internal model and including scenario analysis:
Risk and concentrations are actively restricted by limits based on our
model and there is a comprehensive analysis of the return on risk
capital (RORC) for all business activities. RORC allows us to identify
In addition, central elements of Allianz's dividend policy are
linked to Solvency II capitalization based on our internal model. By
that we allow for a consistent view on risk steering and capitalization
under the Solvency II framework.
With Solvency II being the regulatory regime relevant for the
Group since 1 January 2016, our risk profile is measured and steered
based on our approved Solvency II internal model¹. We have intro-
duced a target solvency ratio in accordance with Solvency II, based
on pre-defined shock scenarios at the level of both the Group and
related undertakings, supplemented by economic scenarios and
sensitivity analysis.
As an integrated financial services provider, we consider diversi-
fication across different business segments and regions to be a key
element in managing our risks efficiently, limiting the economic im-
pact of any single event and contributing to relatively stable results.
Our aim is to maintain a balanced risk profile without any dispropor-
tionately large risk concentrations and accumulations.
The Allianz Group is exposed to a variety of risks through its core
insurance and asset management activities including market, credit,
underwriting, business, operational, strategic, liquidity, and reputa-
tional risks.
REAL ESTATE RISK
Group Actuarial contributes towards assessing and managing
risks in line with regulatory requirements, in particular for those risks
whose management requires actuarial expertise. The range of tasks
includes, among others, the calculation and monitoring of technical
provisions, technical actuarial assistance in business planning, report-
ing and monitoring of the results, and supporting the effective im-
plementation of the risk management system.
Despite the risk of decreasing real estate values, real estate is a suit-
able addition to our investment portfolio due to good diversification
benefits as well as to the contribution of relatively predictable, long-
term cash flows.
fication targets, minimum return hurdles, and other qualitative and
quantitative requirements. All transactions that do not meet these
standards or have a total investment volume (including costs) ex-
ceeding a defined threshold must be reviewed individually by Group
Risk and other group center functions. In addition, all applicable
limits must be met, in particular the limits set for the portfolio of an
investing entities by the strategic asset allocation and its respective
leeway as well as risk limits.
Reserve risk represents the risk of adverse developments in best-
estimate reserves over a one-year time horizon, resulting from fluctu-
ations in the timing and/or amount of claims settlement. We estimate
and hold reserves for claims resulting from past events that have not
yet been settled. In case of unexpected developments, we will expe-
rience a reserve gain or loss dependent on the assumptions applied
for the estimate.
Reserve risk
These loss distributions are then used within the internal model
to calculate potential losses with a predefined confidence level of
99.5%.
deterministic, scenario-based approaches to estimate potential
losses. Similar approaches are used to evaluate risk concentrations
for man-made catastrophes, including losses from terrorism and
industrial concentrations etc.
2 Property-Casualty is also referred to as Non-Life.
3_Life/Health is also referred to as Life.
1_Credit Risk Platform.
Premium risk is estimated based on actuarial models that are
used to derive loss distributions. Non-catastrophe risks are modeled
using attritional loss models for frequency losses as well as frequen-
cy and severity models for large losses. Natural disasters, such as
earthquakes, storms, and floods, represent a significant challenge
for risk management due to their accumulation potential and occur-
rence volatility. For natural catastrophe risks, we use special model-
ing techniques which combine portfolio data (geographic location,
characteristics of insured objects, and their values) with simulated
natural disaster scenarios to estimate the magnitude and frequency
of potential losses. Where such stochastic models do not exist, we use
Premium risk is subdivided into three categories: natural catas-
trophe risk, man-made risk, and non-catastrophe risk.
As part of our Property-Casualty business operations, we receive
premiums from our customers and provide insurance protection in
return. Premium risk is the risk that actual claims for the current year
business develop adversely relative to expected claims ratios. Premi-
um risk can be mitigated by reinsurance as well as by technical excel-
lence in underwriting. Assessing risks as part of the underwriting
process is a key element of our risk management framework. There
are clear underwriting limits and restrictions which are defined cen-
trally and are applied across the Group.
Premium risk
Our Property-Casualty insurance businesses are exposed to premium
risk related adverse developments in current year's new and renewed
business as well as reserve risks related to the business in force.
PROPERTY-CASUALTY
Underwriting risk consists of premium and reserve risks in the Proper-
ty-Casualty business segment as well as biometric risks in the
Life/Health³ business segment. Underwriting risks are not relevant for
the Asset Management business segment and our banking opera-
tions.
UNDERWRITING RISK
Clearly defined processes ensure that exposure concentrations
and limit utilizations are appropriately monitored and managed. The
setting of country and obligor exposure limits from the Group's per-
spective (i.e. the maximum concentration limit) takes into account the
Allianz Group's portfolio size and structure as well as our overall risk
strategy.
Our group-wide country and obligor group limit management
framework (CRISP1) allows us to manage counterparty concentration
risk, covering both credit and equity exposures at the Group and
operating entity levels. This limit framework forms the basis for dis-
cussions on credit actions and provides notification services with a
quick and broad communication of credit-related decisions across the
Group.
To ensure effective credit risk management, credit VaR limits are
derived from our internal risk capital framework, and rating bucket
benchmarks are used to define our risk appetite for exposures in the
lower investment grade and non-investment grade area.
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Annual Report 2017 - Allianz Group
Our credit insurance portfolio is modeled by Euler Hermes based
on a proprietary model component, which is a local adaptation of
the central internal credit risk model. Euler Hermes' loss profile is
integrated in the Group's internal credit risk model to capture the
concentration and diversification effects.
The loss profile of a given portfolio is obtained through Monte
Carlo simulation, taking into account interdependencies and expo-
sure concentrations per obligor segment. The loss profiles are calcu-
lated at different levels of the Allianz Group, and then fed into the
internal model at each level for further aggregation across sources of
risk to derive diversified credit risk.
The internal credit risk capital model takes into account the major
determinants of credit risk for each instrument, including exposure at
default, rating, seniority, collateral, and maturity. Additional parame-
ters assigned to obligors are migration probabilities and obligor asset
correlations reflecting dependencies within the portfolio. Ratings are
assigned to single obligors via an internal rating approach. It is based
on long-term ratings from rating agencies, which are dynamically
adjusted using market-implied ratings and the most recent qualita-
tive information available.
Investment portfolio: Credit risk results from our investments in
fixed-income bonds, loans, derivatives, cash positions, and re-
ceivables whose value may decrease depending on the credit
quality of the obligor. However, losses due to credit events can be
shared with the policyholder for certain life insurance products.
Credit insurance: Credit risk arises from potential claim payments
on limits granted by Euler Hermes to its policyholders. Euler Her-
mes insures its policyholders from credit risk associated with
short-term trade credits advanced to clients of the policyholder. If
the client of the policyholder is unable to meet its payment obli-
gations, Euler Hermes indemnifies the loss to the policyholder.
Reinsurance: Credit risk arises from potential losses from non-
recoverability of reinsurance receivables or due to default on
benefits under in-force reinsurance treaties. Our reinsurance part-
ners are carefully selected by a dedicated team. Besides focusing
on companies with strong credit profiles, we may further require
letters of credit, cash deposits, or other financial measures to fur-
ther mitigate our exposure to credit risk.
ance.
Credit risk is measured as the potential economic loss in the value of
our portfolio that would result from either changes in the credit quali-
ty of our counterparties ("migration risk") or the inability or unwilling-
ness of a counterparty to fulfill contractual obligations ("default risk").
The Group's credit risk profile comes from three sources: our in-
vestment portfolio, credit insurance business, and external reinsur-
CREDIT RISK
The Group Investment Committee of Allianz has defined a
framework for standard transactions for real estate equity and com-
mercial real estate loan investments. These standards outline diversi-
Annual Report 2017 - Allianz Group
1,022
Definition: policyholder participation³
Allianz Group
2016
2017
1.9
1.9
Corporate and Other
6.4
(1.6)
0.2
7.8
Asset Management
4.1
5.0
(0.8)
7.0
Life/Health
1.4
(1.3)
0.4
2.3
Property-Casualty
Nominal
Growth
Foreign
currency
translation
Changes in
scope of
consolidation
Internal
Growth
€ mn
(2.0)
(0.9)
(1.0)
3.0
6,408
Operating revenues
(7.1)
0.1
0.3
(7.5)
Asset Management
Asset Management
(3.4)
(0.5)
0.2
(3.1)
Life/Health
64,636
67,277
Statutory premiums
(0.1)
(2.2)
(1.0)
3.1
Property-Casualty
Life/Health
2016
51,535
52,262
Gross premiums written
Property-Casualty
Composition of total revenues
2017
%
Total revenues comprise statutory gross premiums written in Property-
Casualty and Life/Health, operating revenues in Asset Management,
and total revenues in Corporate and Other (Banking).
Annual changes in cash and cash equivalents
Allianz Group consolidated cash flows
For further information on the consolidated statements of cash
flows, please refer to > page 84.
Cash and cash equivalents amounted to € 17.1 bn, reflecting a
€ 2.7 bn increase compared to 2016. This resulted from higher cash
on current accounts balances, mainly in investment funds, and higher
balances with central banks in the reportable segment Banking
(Corporate and Other).
Net cash outflow used in financing activities was higher in 2017
by € 3.3 bn and amounted to € 5.0 bn. The main reasons for this were
transactions between equity holders, in particular the Allianz SE share
buy-back program as well as the share purchase agreement with
minority-shareholders of Euler Hermes. Those effects were partly
compensated by higher net cash inflows from our refinancing activi-
ties, especially due to an increase in certificated liabilities.
ness segment in Germany. Moreover, new investments in associates
and joint ventures required cash investments. Finally, the develop-
ment of our position in loans and advances to banks and customers,
mainly in our Life/Health business segment in Germany, led to net
cash outflows.
Further potential sources of short-term funding allowing the
Allianz Group to fine-tune its capital structure are letter of credit
facilities and bank credit lines.
The Group maintained its A-1+/Prime-1 ratings for short-term issu-
ances. Thus we can continue funding our liquidity under the Euro
Commercial Paper Program at an average rate for each tranche
below Euribor, and under the U.S. Dollar Commercial Paper Program
at an average rate for each tranche below U.S. Libor.
0.7
9
1,041
Money market securities
2016
1.2
13
1,058
Money market securities
2017
%
Average
interest rate
Interest
expense
€ mn
€ mn
Carrying value
As of 31 December
Money market securities of Allianz SE
Short-term funding sources available are the Medium-Term Note
Program and the Commercial Paper Program. Money market securi-
ties increased in the use of commercial paper, compared to the pre-
vious year-end. Interest expenses on money market securities in-
creased mainly due to higher funding costs on average in 2017.
SHORT-TERM DEBT FUNDING
€ mn
6,022
2017
Net cash flow provided by operating
activities
Composition of total revenues
Reconciliation of nominal total revenue growth
to internal total revenue growth
We believe that an understanding of our total revenue performance
is enhanced when the effects of foreign currency translation as well
as acquisitions, disposals, and transfers (or "changes in scope of
consolidation") are analyzed separately. Accordingly, in addition to
presenting nominal total revenue growth, we also present internal
growth, which excludes these effects.
Composition of total revenue growth
For further information, please refer to note 4 to the consolidat-
ed financial statements.
The previous analysis is based on our consolidated financial state-
ments and should be read in conjunction with them. In addition to our
figures stated in accordance with the International Financial Report-
ing Standards (IFRS), the Allianz Group uses operating profit and
internal growth to enhance the understanding of our results. These
additional measures should be viewed as complementary to, rather
than a substitute for, our figures determined according to IFRS.
RECONCILIATIONS
C-Group Management Report
59
Annual Report 2017 - Allianz Group
Net cash outflow used in investing activities increased by
€ 5.0 bn to € 24.8 bn. The main drivers were higher net cash outflows
from available-for-sale investments, particularly in Life/Health busi-
Net cash flow provided by operating activities increased by € 11.7 bn
to € 33.2 bn in 2017. This consists of net income plus adjustments for
non-cash charges, credits and other items included in net earnings,
and cash flows related to the net change in operating assets and
liabilities. Net income after adding back non-cash charges and simi-
lar items increased by € 1.5 bn to € 10.6 bn in 2017. Furthermore,
operating cash flows from net changes in operating assets and liabili-
ties, including other items, rose by € 10.2 bn to € 22.6 bn. The devel-
opment of assets and liabilities held for trading, particularly in our
Life/Health business segment in Germany, resulted in a net cash
inflow. In addition, higher reserves for loss and loss adjustment ex-
penses were recorded, driven by the property-casualty insurance
business mainly in Germany and France.
1 Includes effects of exchange rate changes on cash and cash equivalents of € (749) mn and € 52 mn in 2017 and
2016, respectively.
2,640
16
2,656
(3,295)
(1,732)
(5,027)
Net cash flow used in financing activities
Change in cash and cash equivalents 1
(4,990)
(19,765)
(24,755)
Net cash flow used in investing activities
11,727
21,461
33,188
2016
996
Corporate and Other
(4.4)
Scope
Definitions
Acquisition expenses and commissions²
1,877
1,711
Capitalization of DAC²
2016
2017
(1,793)
(1,897)
Administrative and other expenses²
(5,029)
Acquisition costs incurred
(4,963)
2017
Acquisition expenses and commissions²
€ mn
Reconciliation to Notes¹
Policyholder participation is included within change in our re-
serves for insurance and investment contracts (net) in the group
income statement.
Both capitalization and amortization are included in the line
item premiums earned (net) in the group income statement.
URR amortized: Total amount of URR amortized includes sched-
uled URR amortization, true-up and unlocking.
URR capitalized: Capitalization amount of unearned revenue re-
serves (URR) and deferred profit liabilities (DPL) for FAS 97 LP.
IN DEFERRED ACQUISITION COSTS (DAC)
Impact of change in DAC includes the effects of changes in DAC,
unearned revenue reserves (URR), and value of business acquired
(VOBA). As such, it is the net impact of the deferral and amortization
of acquisition costs and front-end loadings on operating profit.
IMPACT OF CHANGE
€ mn
Acquisition, administrative, capitalization, and amortization of DAC¹
2016
Capitalization of DAC²
(4,963)
14
(5,029)
Administrative expenses
509
526
Definition: URR capitalized
77
95
on reinsurance business ceded
Commissions and profit received
1,877
1,711
(702)
(267)
Scope
(5,304)
(5,092)
(289)
(143)
877
521
Definitions
(6,868)
(6,927)
Acquisition and administrative expenses
14
(1,924)
(1,779)
Amortization, unlocking, and true-up of DAC²
The delta shown as definitions in acquisition expenses and
commissions represents commission clawbacks, which are allocated
to the technical margin. The delta shown as definitions in administra-
tive and other expenses mainly represents restructuring charges,
which are stated in a separate line item in the group income state-
ment.2
Expenses comprise acquisition expenses and commissions as well as
administrative and other expenses.
EXPENSES
The reconciling item scope comprises the effects from out-of-scope
entities in the profit sources reporting compilation. Operating profit
from operating entities that are not in-scope entities is included in the
investment margin. Currently, 21 entities comprising 99.1% of
Life/Health total statutory premiums are in scope.
Income from financial assets and liabilities carried at fair
474
419
Interest and similar income
consisting of:
551
562
thereof: Total revenues (Banking)
Corporate and Other
3
6
215
Other income
value through income (net)
Income from financial assets and liabilities carried at fair
(5)
8
Net interest income¹
6,019
6,374
Net fee and commission income
(2.2)
(1.2)
(0.3)
(0.8)
Allianz Group
consisting of:
value through income (net)²
(4.4)
20
Fee and commission income
OPERATING PROFIT¹
Life/Health Insurance Operations
C_Group Management Report
Annual Report 2017 - Allianz Group
60
60
1_Represents interest and similar income less interest expenses.
2_Includes trading income.
122,416
126,149
Allianz Group total revenues
(328)
(360)
Consolidation
2
2
and Other
Consolidation effects within Corporate
4
Other income
(308)
(325)
Fee and commission expenses
(172)
(133)
Interest expenses, excluding interest expenses from
external debt
540
576
14
Delta
2017
78
1,875
835
844
10,718
11,417
2,440
2,433
3,480
4,300
Property-Casualty
2016¹
2017
2016¹
2017
2016¹
2017
2016¹
2017
2016¹
2017
2016¹
2,227
2017
(4,198)
16,671
28
19
42
170
Asset Management
22,138
17,775
(8,093)
(7,858)
1,996
1,945
3,517
3,556
400
413
4,914
3,851
19,404
15,868
Life/Health
13,533
(6,166)
755
2016¹
As of 31 December
2016
1 Includes share buy-back.
227
2291
Capitalization
ratio
31 December
31 March
2017
30 June 2017
September
2017
30
%
The Allianz Group is a financial conglomerate within the scope of the
Financial Conglomerate Directive (FCD). The FCD does not impose a
materially different capital requirement on Allianz Group compared
to Solvency II.
Allianz Group: Solvency II regulatory capitalization ratios
The following table summarizes our Solvency II regulatory capitaliza-
tion ratios disclosed over the course of the year 2017.
203
1_Non-parallel interest rate shifts due to extrapolation of the yield curve beyond the last liquid point in line with
Solvency II rules.
212
218
229
%
*
219
2017
212¹
Compared to year-end 2016, our Solvency II capitalization increased
by 11 percentage points to 229% (2016: 218%). This was driven by an
increase in Own Funds and an overall decrease in the Solvency II
capital requirement. The increase in the Solvency II capitalization
ratio was mainly due to strong Solvency II earnings and favorable
markets that were characterized by higher interest rates, lower credit
spreads, and rising equities. Model changes also contributed to the
increase of the capitalization ratio. These positive impacts were partly
offset by capital management activities like the share buy-backs as
well as the dividend accrual throughout the year. Management
actions such as the acquisition of Liverpool Victoria (LV=) and part of
the non-controlling interests of Euler Hermes, the decrease in expo-
sures to some government bonds, and the improvement of our inter-
est rate risk profile had further compensating effects. Other effects
such as taxes, changes in transferability restrictions, and diversifica-
tion effects contributed to a further reduction of the Solvency II capi-
talization ratio.
Total
Diversification
Operational risk
Business risk
Underwriting risk
Credit risk
Market risk
C_Group Management Report
€ mn
Allianz Group: Allocated risk according to the risk profile (total portfolio before non-controlling interests)
The Group-diversified risk is broken down as follows:
Annual Report 2017 - Allianz Group
22
72
1 Own Funds and capital requirement are calculated under consideration of volatility adjustment and yield curve
extension, as described in section Risk-free rate and volatility adjustment.
The pre-diversified risk figures reflect the diversification effect
within each modeled risk category (i.e. market, credit, underwriting,
business, and operational risk) but do not include the diversification
effects across risk categories. Group-diversified risk figures also cap-
ture the diversification effect across all risk categories.
With the exception of the Asset Management business segment,
all business segments are exposed to the full range of risk categories
stated. As mentioned earlier, the Asset Management business seg-
ment is predominantly exposed to operational and market risks and
to a lesser extent to credit risk.
At the Allianz Group, we measure and steer risk based on an
approved internal model, under which we derive our risk capital from
potential adverse developments of Own Funds. The resulting risk
profile provides an overview of how risks are distributed over different
risk categories, and determines the regulatory capital requirements in
accordance with Solvency II.
This Risk and Opportunity Report outlines the Group's risk figures,
reflecting its risk profile based on pre-diversified risk figures and
group diversification effects.
A.1.3 Quantifiable risks and opportunities by risk
category
The following table presents the sensitivities of our Solvency II
capitalization ratio under certain standard financial scenarios.
218
760
98
943
3,480
4,300
2
(26)
922
1,038
2,316
2,468
2,885
2,851
(2,217)
(1,642)
(428)
(390)
Property-Casualty
2016¹
2017
2016¹
2017
2016¹
2017
Life/Health
2016¹
2,491
(98)
170
(21)
85
18
28
21
28
23
28
Asset Management
19,404
15,868
131
(113)
908
823
5,571
5,835
9,031
6,930
(111)
3,874
2017
2016¹
2017
4,352
4,400
11,162
11,978
8,051
6,954
24,925
21,617
Total Group
(272)
644
885
44
147
668
651
1,999
1,279
Other
Corporate and
929
5,459
5,627
Total Group
(490)
(12,546) (14,434) 37,862
Tax (4,545) (5,185)
33,317 34,498
2016¹
2017
2016¹
2017
As of 31 December
Total
Currency
Real estate
Equity
Credit spread
34.6
Inflation
Allianz Group: Risk profile - market risk by business segment and source of risk (total portfolio before tax and non-controlling interests)
pre-diversified, € mn
The following table presents our group-wide risk figures related to
market risks by business segment and source of risk.
MARKET RISK
ments, specifically an increase in interest rates and a tightening of
credit spreads. Management actions predominantly driven by M&A
transactions increased the SCR, which was mostly offset by the con-
tribution of business evolution.
As of 31 December 2017, the group-diversified risk capital, re-
flecting our risk profile before non-controlling interests, amounting to
€ 33.3 bn (2016: € 34.6 bn) represented a stable diversification bene-
fit¹ of approximately 25% compared to 2016. The drop in Solvency II
capital requirement was mainly due to favorable market develop-
The following sections explain the evolution of our risk profile per risk
category modeled. All risks are presented on a pre-diversified basis
and concentrations of single sources of risk are discussed accordingly.
1_2016 risk profile figures recalculated based on model changes in 2017 and the impact of minor and immaterial model changes were allocated proportionally.
39,683
3,084
2,472
Interest rate
42
33.3
Interest rate down by 0.5%¹
19,404
Life/Health
15,193
13,533
(6,166) (6,606)
2,248
2,227
937
835
10,307
10,718
2,502
2,440
5,805
3,480
Property-Casualty
2016²
2016¹
2016²
2016¹
2016²
12,824
2016¹
4,914
400
1,999
Corporate and
Other
960
929
98
768
760
29
28
163
42
Asset Management
19,549
22,138
(5,713)
(8,093)
2,028
1,996
3,536
3,517
1,323
5,550
Total Group
2016²
Diversification
We use model and scenario parameters derived from historical
data, where available, to characterize future possible risk events. If
future market conditions differ substantially from the past, for exam-
ple in an unprecedented crisis, our VaR approach may be too con-
servative or too liberal in ways that are difficult to predict. In order to
mitigate reliance on historical data, we complement our VaR analysis
with stress testing.
As the internal model is based on a 99.5% confidence level, there is a
low statistical probability of 0.5% that actual losses could exceed this
threshold at Group level in the course of one year.
MODEL LIMITATIONS
Our internal model also includes assumptions on claims trends, liabil-
ity inflation, mortality, longevity, morbidity, policyholder behavior,
expense, etc. We use our own internal historical data for actuarial
assumptions wherever possible, and also consider recommendations
from the insurance industry, supervisory authorities, and actuarial
associations. The derivation of our actuarial assumptions is based on
generally accepted actuarial methods. Within our internal risk capital
and financial reporting framework, comprehensive processes and
controls exist for ensuring the reliability of these assumptions.
ACTUARIAL ASSUMPTIONS
Where possible, we derive correlation parameters for each pair
of market risks through statistical analysis of historical data, consider-
ing quarterly observations over more than a decade. In case histori-
cal data or other portfolio-specific observations are insufficient or not
available, correlations are set by the Correlation Settings Committee,
which combines the expertise of risk and business experts in a well-
defined and controlled process. In general, when using expert judg-
ment we set the correlation parameters to represent the joint move-
ment of risks under adverse conditions. Based on these correlations,
we use an industry-standard approach, the Gaussian copula, to
determine the dependency structure of quantifiable sources of risk
within the applied Monte Carlo simulation.
Diversification typically occurs when looking at combined risks
that are not, or only partly, interdependent. Important diversification
factors include regions (e.g. windstorm in Australia vs. windstorm in
Germany), risk categories (e.g. market risk vs. underwriting risk), and
subcategories within the same risk category (e.g. commercial vs.
personal lines of property and casualty risk). Ultimately, diversification
is driven by the specific features of the investment or insurance prod-
ucts in question and their respective risk exposures. For example, an
operational risk event at an Australian entity can be considered to be
highly independent of a change in credit spreads for a French gov-
ernment bond held by a German entity.
Our internal model considers concentration, accumulation, and corre-
lation effects when aggregating results at Group level. The resulting
diversification reflects the fact that not all potential worst-case losses
are likely to materialize at the same time. As we are an integrated
financial services provider offering a variety of products across differ-
ent business segments and geographic regions, diversification is key
to our business model.
DIVERSIFICATION AND CORRELATION ASSUMPTIONS
1_Due to late availability of EIOPA publication, the risk-free interest rate term structure used might slightly differ from the
one published by EIOPA.
We replicate the liabilities of our Life/Health insurance business as
well as for our internal pension obligations. This technique enables us
to represent all product-related options and guarantees, both con-
tractual and discretionary, by means of standard financial instru-
ments. In the risk calculation we use the replicating portfolio to de-
termine and revalue these liabilities under all potentially adverse
Monte Carlo scenarios.
VALUATION ASSUMPTIONS: REPLICATING
PORTFOLIOS
We therefore take account of this by applying volatility adjust-
ment to mitigate the credit spread risk, which we consider to be less
substantial than the default risk.
In addition, we adjust the risk-free yield curves by a volatility ad-
justment in most markets where a volatility adjustment is defined by
EIOPA and approved by the local regulator. This is done to better
reflect the underlying economics of our business, as the cash flows of
our insurance liabilities are largely predictable. The advantage of
being a long-term investor, therefore, is the opportunity to invest in
bonds yielding spreads over the risk-free return and earning this
additional yield component over the duration of the bonds. Being a
long-term investor mitigates much of the risk of forced selling of debt
instruments at a loss prior to maturity.
RISK-FREE RATE AND VOLATILITY ADJUSTMENT
When calculating the fair values of assets and liabilities, the assump-
tions regarding the underlying risk-free yield curve are crucial in
determining and discounting future cash flows. We apply the meth-
odology provided by the European Insurance and Occupational
Pensions Authority (EIOPA) within the technical documentation (El-
OPA-BOS-15/035) for the extrapolation of the risk-free interest rate
curves beyond the last liquid tenor.¹
ASSUMPTIONS AND LIMITATIONS
Therefore Allianz's risk capital framework covers all material and
quantifiable risks. Risks specifically not covered by our group internal
model include reputational, liquidity, and strategic risks.
For our Asset Management business segment, we assign internal
risk capital requirements based on sectorial regulatory capital re-
quirements. The Asset Management business is mainly affected by
operational risks. However, since most of our Asset Management
business is not located within the Eurozone, at Group level its partici-
pation value bears a foreign exchange rate risk. Our Asset Manage-
ment business is covered by adequate risk controlling processes,
including qualitative risk assessments (such as the Top Risk Assess-
ment) and regular reporting to the Group. As the impact on the
Group's total solvency requirement is minor, risk management with
respect to Asset Management is not discussed in more detail.
imately 1.7% (2016: 1.7%) of our total pre-diversified Group solvency
requirement. Therefore, risk management with respect to banking
operations is not discussed in more detail.
C_Group Management Report
Annual Report 2017 - Allianz Group
Furthermore, we validate the model and parameters through
sensitivity analyses, independent internal peer reviews and, where
appropriate, independent external reviews, focusing on methods for
Total
Annual Report 2017 - Allianz Group
C-Group Management Report
Operational risk
Business risk
2016¹
2016²
Underwriting risk
2016¹
2016²
2016¹
2016²
2016¹
As of 31 December
Credit risk
Market risk
€ mn
Allianz Group: Impact of model change - allocated risk according to the risk profile (total portfolio before non-controlling interests)
In all subsequent sections, the figures including model changes
will form the basis for the movement analysis of our risk profile in
2017.
We also updated the approach used for allocating risk capital to
business segments and related undertakings by aligning it with the
contributions derived from the tail scenarios underpinning our Group
risk capital requirements. As a consequence, financial market risk
categories (especially in the Life/Health segment) tend to be allocat-
ed more risk capital because they diversify less "in the tail" while the
other risk categories are generally allocated less risk capital as they
diversify more "in the tail".
The net impact of model changes in 2017 was € (82) mn. Be-
hind this small net result were larger, offsetting impacts: risk capital
increased by € 2 bn due to a change in real world credit spread
scenarios and stochastic cash flow models for selected life entities,
offset by favorable changes for own pensions, the inclusion of nega-
tive interest rate scenarios, and various minor and immaterial model
changes.
In 2017, our internal model has been adjusted based on regulatory
developments, validation of our model, and assessment of its appro-
priateness, as well as feedback received during the ongoing consulta-
tions with regulators. For the sake of clarity, all model changes and
the resulting impacts on our risk profile are presented jointly within
this section, based on data as of 31 December 2016.
MODEL CHANGES IN 2017
Since the internal model takes into account the change in the
economic fair value of our assets and liabilities, it is crucial to esti-
mate the market value of each item accurately. For some assets and
liabilities it may be difficult, if not impossible - notably in distressed
financial markets - to either obtain a current market price or apply a
meaningful mark-to-market approach. For such assets we apply a
mark-to-model approach. For some of our liabilities, the accuracy of
their values also depends on the quality of the actuarial cash flow
estimates. Despite these limitations, we believe the estimated fair
values are appropriately assessed.
The construction and application of the replicating portfolios
mentioned are subject to the set of available replicating instruments
and might be too simple or restrictive to capture all factors affecting
the change in value of liabilities. As with other model components,
the replications are subject to independent validation and to suitabil-
ity assessments as well as to stringent data and process quality con-
trols. Therefore, we believe that the liabilities are adequately repre-
sented by the replicating portfolios.
selecting parameters and control processes. To ensure proper valida-
tion we established an Independent Validation Unit (IVU) within
Group Risk, responsible for validating our internal model within a
comprehensive model validation process. Overall, we believe that our
validation efforts are effective and that the model adequately as-
sesses the risks to which we are exposed.
69
24,925
2,753
21,546
668
Interest rates down by 0.5%¹
Base capitalization ratio
Interest rates up by 0.5%¹
As of 31 December
%
Allianz Group: Solvency II regulatory capitalization ratio sensitivities
Allianz Group: Solvency II regulatory capitalization
The Allianz Group's Own Funds and capital requirements are based
on the market value balance sheet approach as the major economic
principle of Solvency II rules¹. Our regulatory capitalization is shown
in the following table.
SOLVENCY II REGULATORY CAPITALISATION
C-Group Management Report
71
Annual Report 2017 - Allianz Group
Finally, the Group has the additional advantage of being well-
diversified, both geographically and across a broad range of
businesses and products.
The Group has a conservative investment profile and disciplined
business practices in the Property-Casualty, Life/Health, and Asset
Management business segments, leading to sustainable operat-
ing earnings with a well-balanced risk-return profile.
Due to its effective capital management, the Allianz Group is well
capitalized and met its internal, rating agency, and regulatory
solvency targets as of 31 December 2017. Allianz is also confident
that it will be able to meet the capital requirements under new
regulatory regimes. Allianz remains one of the highest rated in-
surance groups in the world, as reflected by our external ratings.
The Group's management also believes that Allianz is well posi-
tioned to deal with potentially adverse future events - due, in
part, to our strong internal limit framework, which is defined by
the Group's risk appetite, and our risk management practices
which include our approved internal model.
The Allianz Group's management feels comfortable with the Group's
overall risk profile and has confidence in the effectiveness of its risk
management framework to meet both, the challenges of a rapidly
changing environment and the day-to-day business needs. This con-
fidence is based on several factors, which are summarized below:
MANAGEMENT ASSESSMENT
Following the approval of our internal model in November 2015, the
model has been fully applied since the beginning of 2016. There is
still uncertainty about the future capitalization requirements of
Allianz, since the future capital requirements applicable for Global
Systemically Important Insurers (so-called G-SII) are yet to be final-
ized. Due to the review of the Solvency II framework by EIOPA, future
Solvency II capital requirements might change depending on the
outcome. Finally, the potential for a multiplicity of different regulatory
regimes, capital standards, and reporting requirements will increase
operational complexity and costs.
REGULATORY DEVELOPMENTS
ble asset bubbles (as observed in the Chinese equity market) might
spill over to other markets, or rising geopolitical tensions - e.g. caused
by the North Korean missile program - might trigger market sell-offs,
which would contribute to increasing volatility. We therefore continue
to closely monitor political and financial developments - such as the
Brexit in the United Kingdom, the European migrant crisis and the rise
of Euroscepticism, or the situation on the Korean peninsula - in order
to manage our overall risk profile to specific event risks.
Financial markets are characterized by historically low interest
rates and risk premiums, prompting investors to look for higher-
yielding and potentially higher-risk - investments. In addition to
sustained low interest rates, the challenges of implementing long-
term structural reforms in key Eurozone countries and the uncertainty
about the future path of monetary policy may lead to increasing
market volatility. This could be accompanied by a flight to quality,
combined with falling equity and bond prices due to rising spread
levels, even in the face of potentially lower interest rates. Also, possi-
POTENTIAL RISKS IN THE FINANCIAL MARKET AND IN
OUR OPERATING ENVIRONMENT
Equity prices up by 30%
The risk profile and relative contributions have changed in 2017,
predominantly due to changes in the market environment as well as
to management actions such as the decrease in asset durations, the
reduction of exposures to some sovereign bond investments, and the
significant increase in exposures to real estate and infrastructure
investments.
2017
229
75.3
76.4
€ bn
Equity prices down by 30%
Combined scenario:
2016
2017
Equity prices down by 30%
Capitalization ratio
Capital requirement
Own Funds
As of 31 December
216
223
224
240
207
218
220
231
218
2016
Property-casualty premium and reserve risks resulting from
natural and man-made catastrophes as well as from claims
uncertainty.
Market risk, especially interest rate risk, due to the duration
mismatch between assets and liabilities for long-term savings
products, equity risk, credit, and credit spread risks driven by
assets backing long-term liabilities, which we take to benefit from
the expected risk premium;
-
In 2017, the changes to our internal model focused on the following
risk categories:
1_2016 risk profile figures recalculated based on model changes in 2017 and the impact of minor and immaterial model changes were allocated proportionally.
2_2016 risk profile figures as reported previously.
Tax (5,185) (4,664)
Total Group 34,498 34,580
3,543
3,084
(689)
(13,008) 39,683 39,244
(14,434)
5,661
5,627
4,473
4,352
11,809
11,162
8,763
8,051
(272)
617
644
179
44
683
MARKET RISK
Market risk was significantly affected by the negative interest rate,
the credit spread, and the new cash flow model changes. The com-
bined impact of the model changes on the total market risk was an
increase of € 3.4 bn to € 24.9 bn (2016: € 21.5 bn).
CREDIT RISK
In 2017, the central credit risk model was changed to allow for a
more granular and accurate valuation of exposures in a negative
interest rate environment. Consistent with market expectations, coun-
terparties from segments with very low or even negative credit
spread levels now carry less credit risk. The credit-risk-reducing effect
of this major model change was partially offset by indirect effects
are:
As mentioned earlier, the Allianz Group is exposed to a variety of risks.
The largest risks in terms of their contribution to Allianz's risk profile
RISK PROFILE AND MARKET ENVIRONMENT
Allianz risk profile and management assessment
Model changes in 2017 resulted in a € 3.0 bn increase of Own Funds,
mainly driven by regulatory and model changes including negative
interest rate model.
IMPACT OF MODEL CHANGES ON ELIGIBLE GROUP
OWN FUNDS
No material operational risk model change has been applied in
2017.
OPERATIONAL RISK
As for Life/Health underwriting risk, there was no central model
change performed in 2017 for the business risk and all local changes
for this module were either minor or immaterial.
BUSINESS RISK
€ bn
tion approach (€ (0.7) bn). There was no central model change per-
formed in 2017 for the Life/Health underwriting risk and the local
changes for this module were either minor or immaterial. The remain-
ing impact therefore results from changes that affect the local cash
flow models, in particular the introduction of the negative interest
rate modeling and a new local cash flow model.
Annual Report 2017 - Allianz Group
70
70
The considerable decrease in SCR contribution seen for the
Life/Health business segment was mainly driven by the new alloca-
Life/Health
The increase in underwriting risk in the Property-Casualty business
segment was mainly based on the central changes on natural catas-
trophe modelling for windstorms in Europe and earthquakes in Ger-
many.
Property-Casualty
UNDERWRITING RISK
Other immaterial credit risk model changes introduced in 2017
were mainly related to the introduction of new internal rating models
for specific asset classes.
from cash flow model changes which reduced the policyholder par-
ticipation in the Life/Health business segment.
C_Group Management Report
Corporate and
Other
31 December
471
BBB+ to BBB-
A+ to A-
AA+ to AA-
0.04
0.01
AAA
2016
2017
The following table presents the pre-diversified risk calculated for
underwriting risks associated with our insurance business.
UNDERWRITING RISK
As of 31 December
€ bn
Reinsurance recoverables by rating class¹
for 2017. For substantial exposures to non-rated captives, risk mitigat-
ing techniques like collateral agreements or funds-withheld concepts
are in place.
C_Group Management Report
Annual Report 2017 - Allianz Group
74
1 Additionally, 4.5% (2016: 5.7 %) of our total Group pre-diversified internal credit risk is allocated to receivables, potential
future exposure for derivatives and reinsurance, and other off-balance sheet exposures
The increase in total and non-rated exposure mainly results from
the inclusion of reinsurance captive exposures in the rating overview
As of 31 December 2017, 67.8% (2016: 84.0%) of the Allianz
Group's reinsurance recoverables were distributed among reinsurers
that had been assigned at least an "A-" rating. The non-rated reinsur-
ance recoverables represented 30.1% (2016: 15.1%).
- of which 51.8% (2016: 46.8%) was related to reinsurance counter-
parties in the United States and Germany.
6.47
As of 31 December 2017, 0.7% (2016: 0.5%) of our total Group pre-
diversified internal credit risk was allocated to reinsurance exposures
6.41
4.62
2017
2016²
2017
As of 31 December
Total
Biometric
Reserve
Premium non-catastrophe
Premium terror
Premium natural
catastrophe
Allianz Group: Risk profile - allocated underwriting risk by business segment and source of risk (total portfolio before non-controlling interests)¹
pre-diversified, € mn
1_Represents gross exposure broken down by reinsurer. For 2017 reinsurance captives exposure included.
1.99
13.18
16.85
Total
5.08
Not assigned
0.01
Non-investment grade
0.12
0.33
4.94
2016²
CREDIT RISK - REINSURANCE
CREDIT RISK - CREDIT INSURANCE
0.6
8.7
9.2
0.1
0.1
1.9
2.1
Not rated
0.1
0.1
D
0.1
C
0.1
0.1
0.1
0.1
0.1
CC
0.8
0.3
0.6
As of 31 December 2017, 9.6% (2016: 7.4%) of our total Group pre-
diversified internal credit risk was allocated to Euler Hermes credit
insurance exposures, for which the relative increase is primarily driven
by the lower credit risk of the investment portfolio.
1.1
4.9
1 In accordance with the Group Management Report, figures stated include investments of Banking and Asset Management. Table excludes private loans. Stated market values include investments not in scope of the
Solvency II framework.
555.8
553.1
4.7
5.6
3.7
3.1
21.6
21.7
32.9
30.6
189.5
195.6
90.0
83.0
213.6
213.6
Total
16.3
18.0
3.7
1.2
2017
2016²
2017
LIQUIDITY RISK
C-Group Management Report
75
Annual Report 2017 - Allianz Group
The marginal decrease shown in the operational risk was driven by
the annual regular update of local parameters. Foreign currency
exchange effects played a secondary role.
OPERATIONAL RISK
There was no significant impact on the overall business risk from
regular model updates or the evolution of our business. The business
risk contribution remained stable at € 4.4 bn.
BUSINESS RISK
Due to effective product design and the diversity of our products,
there were no significant concentrations of underwriting risks within
our Life/Health business segment.
The risk capital contribution from biometric risk increased by € 0.1 bn
compared to the previous year (after considering model changes).
This is mainly due to the annual calibration update of the stochastic
longevity risk model. The impact of this model update for the Proper-
ty-Casualty and the Corporate business segments is mainly generat-
ed by the longevity risk of the corresponding pension schemes.
LIFE/HEALTH
The top three perils contributing to the natural catastrophe risk as of
31 December 2017 were: windstorms in Europe, floods in Germany,
and earthquakes in Australia.
1 Represents claims and insurance benefits incurred (net), divided by premiums earned (net).
66.3
68.4
64.2 64.2 64.6 65.1 63.0 66.6 65.5 65.9
natural
catastrophes
excluding
Loss ratio
Loss ratio
2017 2016 2015 2014 2013 2012 2011 2010 2009 2008
66.5 65.6 66.2 66.0 65.9 68.3 69.9 69.1 69.5 68.0
Detailed information regarding the Allianz Group's liquidity risk expo-
sure, liquidity, and funding - including changes in cash and cash
equivalents - is provided in Liquidity and Funding Resources from
> page 57 onwards and in notes 12, 18 and 33 to the consolidated
financial statements. As inferred from the section on management of
liquidity risks and interest rate risks, they are properly managed and
monitored but not quantified.
%
76
CONTROLS OVER FINANCIAL REPORTING
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C_Group Management Report
77
Annual Report 2017 - Allianz Group
1 Solvency Financial Condition Report and Regular Supervisory Report.
Subsidiaries within the scope of our control system are individual-
ly responsible for adhering to the Group's internal governance and
control policy and for creating local Disclosure Committees that are
similar to the Group-level committee. The entities' CEOs and CFOs
provide periodic sign-offs to the management of Allianz SE, certifying
the effectiveness of their local systems of internal control as well as
the completeness, accuracy, and reliability of financial data reported
to the Holding.
The Group Disclosure Committee ensures that these board
members are made aware of all material information that could
affect our disclosures, and assesses the completeness and accuracy
of the information provided in the quarterly statements, half-year,
and annual financial reports as well as in the Solvency II qualitative
reports¹. In 2017, the Group Disclosure Committee met on a quarterly
basis before the quarterly statements and financial reports were
issued. An additional meeting was held prior to issuance of the Sol-
vency II qualitative reports.
Responsibility for ensuring the completeness, accuracy, and reliability
of our consolidated financial statements rests with the Chairman of
the Allianz SE Board of Management, as well as the board member
responsible for Finance, Controlling, and Risk, supported by Group
Center functions, the Group Disclosure Committee, and operating
entities.
GOVERNANCE
Finally, we focus on ensuring that controls are appropriately
designed and effectively executed to mitigate risk. We have set
consistent documentation requirements across the Allianz Group
for elements such as processes, related key controls, and execu-
tion. We conduct an annual assessment of our control system to
maintain and continuously enhance its effectiveness. Group Audit
and local internal audit functions ensure that the overall quality
of our control system is subjected to regular control-testing, to as-
sure reasonable design and operating effectiveness. Internal Au-
dit does so through a comprehensive risk-based approach, which
assesses the key controls of the company's internal procedures
and processes, including local and group-internal controls over
financial reporting risks, from an integrated perspective.
actions are taken to reduce the impact of the financial misstate-
ment. Given the strong dependence of financial reporting pro-
cesses on information technology systems, we also implement IT
controls.
Preventive and detective key controls to address financial report-
ing risks have been put in place to reduce the likelihood and im-
pact of financial misstatements. If a potential risk materializes,
352
We use a top-down, risk-based approach to determine the ac-
counts and operating entities that should fall under the scope of
our system of internal control over financial reporting (as well as
IRCS). The methodology is described in our ICOFR manual and
the IRCS Guideline. During the scoping process, both materiality
and susceptibility to a misstatement are considered simultane-
ously. In addition to the quantitative calculation, we also consider
qualitative criteria - such as expected increase in business vol-
ume - which are provided by different Group Centers, Group Au-
dit, and external Audit.
-
INTERNAL CONTROL SYSTEM APPROACH
Our approach can be summarized as follows:
Accounting rules for the classification, valuation, and disclosure
of all items in the balance sheet, the income statement, and notes
related to the annual and interim financial statements are defined
primarily in our Group accounting manual. Internal controls are em-
bedded in the accounting and consolidation processes to safeguard
the accuracy, completeness, and consistency of the information pro-
vided in our financial statements.
ACCOUNTING AND CONSOLIDATION PROCESSES
The accounting and consolidation processes we use to produce con-
solidated financial statements are based on a central consolidation
and reporting IT solution and local general ledger solutions. The
latter are largely harmonized throughout the Group, using standard-
ized processes, master data, posting logics, and interfaces for data
delivery to the Holding. Access rights to accounting systems are man-
aged according to strict authorization procedures.
In line with both our prudent approach to risk governance and
compliance with regulatory requirements, we have created a struc-
ture to identify and mitigate the risk of material errors in our consoli-
dated financial statements (this also includes our market value bal-
ance sheet and risk capital controls). Our system of internal control
over financial reporting (ICOFR) is regularly reviewed and updated.
ICOFR is split into an Entity-Level Control Assessment Process (ELCA),
IT General Controls (ITGC) and controls at process levels. The ELCA
framework contains controls to monitor the system of governance
effectiveness. In the ITGC framework we have implemented, for ex-
ample, controls for access right management and for project and
change management. Going forward, the current ICOFR framework
will be part of an Integrated Risk and Control System (IRCS). The
IRCS is split into three main components: Reporting Risk (currently
ICOFR), Compliance Risk, and Operational Risk.
The following information is provided pursuant to § 289 (4) and
§315 (4) of the German Commercial Code ("Handelsgesetzbuch -
HGB").
C_Group Management Report
Annual Report 2017 - Allianz Group
Property-Casualty loss ratios¹ for the past ten years
The loss ratios for the Property-Casualty business segment can
be seen in the following table:
Overall, the underwriting risk profile for the Allianz Group is not
expected to change materially as we do not plan to significantly
change our underwriting standards (Allianz Standard for P&C Un-
derwriting), or our Group natural catastrophe man-made or terror risk
appetite (i.e. retrocession reinsurance strategy).
400
413
Life/Health
10,718
11,417
89
114
5,795
5,799
4,444
5,005
13
(16)
377
515
Property-Casualty
2016²
2017
2016²
2017
2016²
413
400
Asset Management
Corporate and
During 2017, the total of the stand-alone underwriting risk capital on
a Group-diversified basis increased by € 0.2 bn. This slight increase is
mainly driven by exposure and model updates as well as discounting
effects. The remaining difference is due to diversification effects with
other underwriting risk categories.
PROPERTY-CASUALTY
1_As risks are measured in an integrated approach and on an economic basis, internal risk profile takes reinsurance effects into account.
2_2016 risk profile figures recalculated based on model changes in 2017 and the impact of minor and immaterial model changes were allocated proportionally.
11,162
20.63%
11,978
23.76%
Share of total Group pre-diversified risk
533
675
5,795
5,799
0.1
4,444
13
(16)
377
515
44
147
44
147
Total Group
Other
5,005
0.1
Then, our local entities identify risks that could lead to material
financial misstatements, including all relevant root causes (i.e.
human processing errors, fraud, system shortcomings, external
factors, etc.).
0.3
13.8
%
28
668
8,051
6,954
€ mn
651
€ mn
19
€ mn
4,914
3,851
€ mn
2,440
2,433
€ mn
2016¹
2017
Share of total Group pre-diversified risk
Total Group
Corporate and Other
Asset Management
14.9
Life/Health
1_2016 risk profile figures recalculated based on model changes in 2017 and the impact of minor and immaterial model
changes were allocated proportionally.
Rating distribution of Allianz Group's fixed-income portfolio¹ – fair value
2016
2017
2016
2017
As of 31 December
Total
Other
Short-term loan
ABS/MBS
Banks
Corporate
Covered bond
Government/
agency
Type of issuer
As of 31 December 2017, the rating distribution based on issue
(instrument) ratings of our fixed-income portfolio was as follows:
The counterparty credit risk arising from derivatives is low, since
derivatives usage is governed by the group-wide internal guidelines
for collateralization of derivatives, which stipulates master netting
and collateral agreements with each counterparty and requires high-
quality and liquid collateral. In addition, Allianz closely monitors the
credit ratings of counterparties and exposure movements.
Credit risk in the Life/Health business segment is primarily driven
by long-term assets covering long-term liabilities. Typical investments
are government bonds, senior corporate bonds, covered bonds, self-
originated mortgages and loans, and a modest amount of deriva-
tives. In the Property-Casualty business segment, fixed-income securi-
ties tend to be short- to mid-term, due to the nature of the business,
which explains the lower credit risk consumption in this segment.
As of 31 December 2017, the credit risk arising from our investment
portfolio accounted for 85.2% (2016: 86.4%) of our total Group pre-
diversified internal credit risk¹.
CREDIT RISK - INVESTMENTS
updates based on extended time series were performed for credit risk
parameters like the transition matrix and asset correlations, which
only had a slightly positive effect on credit risk.
€bn
Throughout 2017, the credit environment remained stable. Overall
credit risk for the Group decreased compared to last year, primarily
driven by an increase of policyholder participation in the Life/Health
business segment as a result of better market conditions. Annual
Property-Casualty
As of 31 December
Allianz Group: Risk profile - allocated credit risk by business segment
(total portfolio before tax and non-controlling interests)
pre-diversified
2,000
8,701
8,809
12,774
10,508
(2,489)
1,999
1,279
(59)
122
97
111
793
478
727
(161)
(511)
(2,250)
3,941
2,481
Total Group
0.7
1,945
69
54
Share of total Group pre-diversified risk
The following table presents our group-wide risk figures related to
credit risks by business segment.
CREDIT RISK
As of 31 December 2017, about 4.0% (2016: 3.3%) of the total pre-
diversified risk was related to real estate exposures.
REAL ESTATE RISK
C-Group Management Report
73
Annual Report 2017 - Allianz Group
1 Diversification before tax.
5_The effect does not consider policyholder participation.
business) reflecting the Solvency II framework, and therefore is not based on classifications given by accounting princi-
ples.
2017
4_The stated market value includes all assets whose market value is sensitive to equity movements (excluding unit-linked
2_The stated market value includes all assets whose market value is sensitive to interest rate movements (excluding unit-
linked business) reflecting the Solvency II framework, and therefore is not based on classifications given by accounting
principles.
As of 31 December 2017, our investments excluding unit-linked busi-
ness that are sensitive to changing equity markets - amounting to a
market value of € 57.1 bn 4 (2016: € 47.0 bn) - would have lost
€ 14.9 bn³ (2016: € 12.4 bn) in value assuming equity markets de-
clined by 30%.
EQUITY RISK
€ 427.3 bn (2016: € 428.5 bn)² - would have gained € 41.6 bn (2016:
€ 31.4 bn) or lost € 36.1 bn (2016: € 36.1 bn)³ in value in the event of
interest rates changing by -100 and +100 basis points, respectively.
As of 31 December 2017, our interest rate sensitive investments ex-
cluding unit-linked business amounting to a market value of
INTEREST RATE RISK
Our total pre-diversified market risk showed a decrease of € 3.3 bn,
which was mainly driven by interest rate and credit spread risk in the
Life/Health business segment. The decrease in interest rate risk was
driven by the significant increase in the rates as well as by manage-
ment actions to improve our interest rate risk profile by asset/liability
management measures. For credit spread risk, the decrease was
driven by narrowing credit spreads observed in financial markets and
the increase in policyholder participation in the Life/Health business
segment. These were also supported by exposure changes due to
ALM measures and the corresponding effects on the liability side.
1_2016 risk profile figures recalculated based on model changes in 2017 and the impact of minor and immaterial model changes were allocated proportionally.
24,925
46.1%
21,617
42.9%
3 The effects do not consider policyholder participation.
2016
858
2016
157.8
158.7
0.3
0.3
0.8
0.4
0.5
0.4
8.3
7.3
93.9
100.2
4.2
2.3
49.8
47.7
BBB
98.9
103.0
0.7
0.4
BB
0.2
5.4
0.3
CCC
2017
3.6
4.0
0.1
0.1
1.3
1.0
2.1
2.8
B
13.3
11.5
0.2
0.2
0.1
0.1
0.9
0.7
6.5
5.0
5.3
0.4
0.1
1.1
118.4
0.1
17.5
16.9
1.6
1.7
1.5
2.0
57.9
120.9
55.0
42.8
AAA
2016
2017
2016
2017
2016
2017
0.9
42.3
AA
2017
95.0
15.4
93.4
15.7
55.8
56.1
8.8
9.8
17.1
19.4
A
144.0
2016
15.8
139.1
21.7
4.4
6.0
20.9
2.3
0.9
1.1
2.9
18.6
Reclassifications to net income
Cash flow hedges
Changes arising during the year
Subtotal
Changes arising during the year
Reclassifications to net income
Available-for-sale investments
Subtotal
135
Foreign currency translation adjustments
Items that may be reclassified to profit or loss in future periods
Other comprehensive income
Changes arising during the year
€ mn
Consolidated statements of comprehensive income
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
D_Consolidated Financial Statements
81
15.18
Reclassifications to net income
Net income
Subtotal
Share of other comprehensive income of associates and joint ventures
(2,036)
15.23
13
7,329
7,207
2016
2017
For further information on the income taxes associated with different
components of other comprehensive income, please see note 32.
Shareholders
Non-controlling interests
Total comprehensive income attributable to:
Total other comprehensive income
Changes in actuarial gains and losses on defined benefit plans
Items that may never be reclassified to profit or loss
Subtotal
Changes arising during the year
Miscellaneous
Changes arising during the year
Reclassifications to net income
Subtotal
Total comprehensive income
(100,236)
15.24
(477)
(154)
(154)
Total expenses
Other expenses
Restructuring charges
Amortization of intangible assets
(3,734)
(3,857)
(186)
31
(25,301)
(25,702)
30
Acquisition and administrative expenses (net)
(1,306)
(1,269)
(2,035)
29
Investment expenses
Fee and commission expenses
15.31
(5)
(99,442)
6,962
6,803
367
404
Annual Report 2017 - Allianz Group
Diluted earnings per share (€)
Basic earnings per share (€)
Shareholders
Non-controlling interests
(5)
Net income attributable to:
7,207
Net income
(3,085)
(2,941)
32
10,413
10,148
Income taxes
Income before income taxes
7,329
148
gains and
(1,678)
2
2
2
65,771
7,955
405
7,551
914
160
6,476
2,955
62,815
10,920
(926)
23,894
28,928
Total equity
controlling
interests
equity
losses (net)
Transactions between equity holders³
35
4
(4)
70,135
(1,940)
3,052
67,083
11,830
323
(1,973)
6,820
Total comprehensive income²
(762)
Non-
27,087
Balance as of 31 December 2016
(3,646)
(325)
(3,320)
(3,320)
Dividends paid
52
17
35
28,928
(986)
Share-
holders'
Retained
earnings
(127)
19
(127)
19
9
(78)
(4)
(78)
13
57
(24)
74
31
(17)
(55)
875
373
2,552
1,358
100
(335)
(1,645)
626
Paid-in capital
Unrealized
currency
D_Consolidated Financial Statements
Foreign
Treasury shares
Paid-in capital
Total comprehensive income²
Balance as of 1 January 2016¹
translation
adjustments
€ mn
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
Annual Report 2017 - Allianz Group
82
22
405
7,551
5,170
393
7,955
5,563
Consolidated statements of changes in equity
(1,160)
15
Impairments of investments (net)
1,003
931
32
24,887
23,184
9
15,562
16,375
8
111,325
119,141
105,369
104,224
7
536,869
546,828
6
8,333
8,177
10
37,731
38,050
3
505,322
513,687
72,373
73,292
14
21,360
21,442
13
13,038
5
12,746
11,271
11,291
883,809
901,300
13,752
13,262
11
14,196
14,329
12
16
14,463
2016¹
Deferred tax assets
Deferred acquisition costs
Reinsurance assets
Financial assets for unit-linked contracts
Loans and advances to banks and customers
Investments
Financial assets carried at fair value through income
Cash and cash equivalents
ASSETS
As of 31 December
€ mn
Consolidated balance sheets
CONSOLIDATED BALANCE SHEETS
D_Consolidated Financial Statements
79
Annual Report 2017 - Allianz Group
D
CONSOLIDATED FINANCIAL STATEMENTS
5,170
Other assets
Non-current assets and assets of disposal groups classified as held for sale
Intangible assets
Total assets
2017
note
1_Due to the change in accounting policies for GMIBs, the figures as of 31 December 2016 have been adjusted retrospectively. For further information please refer to note 2.
2_Include mainly derivative financial instruments.
Total liabilities and equity
Total equity
Non-controlling interests
Shareholders' equity
Total liabilities
Subordinated liabilities
17,119
Certificated liabilities
Other liabilities
Deferred tax liabilities
Financial liabilities for unit-linked contracts
Reserves for insurance and investment contracts
Reserves for loss and loss adjustment expenses
Unearned premiums
Liabilities to banks and customers
Financial liabilities carried at fair value through income²
LIABILITIES AND EQUITY
Liabilities of disposal groups classified as held for sale
119,141
111,325
32
36
10,491
10,937
24
8,403
6,546
23
(850)
(1,204)
22
22,149
21,848
21
70,357
71.427
20
(1,073)
(1,007)
(4,901)
100
109,590
110,649
Claims and insurance benefits incurred (gross)
(46)
(25)
Loan loss provisions
(1,207)
(1,149)
Interest expenses
27
(13,201)
(14,427)
(4,912)
26
(53,156)
(51,218)
25
Claims and insurance benefits incurred (net)
2,758
5,427
Claims and insurance benefits incurred (ceded)
(55,914)
(56,644)
Change in reserves for insurance and investment contracts (net)
76,331
77,345
2016
3,052
3,049
67,083
65,553
813,674
832,698
13,530
13,295
18
19
7,615
18
13,290
13,662
3
39,867
39,639
17
4,683
4,906
9,596
28
68,602
901,300
2017
note
D_Consolidated Financial Statements
Total income
Other income
Fee and commission income
Realized gains/losses (net)
Income from financial assets and liabilities carried at fair value through income (net)
Interest and similar income
70,135
Premiums earned (net)
Ceded premiums written
Gross premiums written
€ mn
Consolidated income statements
CONSOLIDATED INCOME STATEMENTS
Annual Report 2017 - Allianz Group
80
80
883,809
Change in unearned premiums (net)
393
(1)
Paid-in capital
Liabilities to
banks and
6,855
8,745
Balances with banks payable on demand
Certificated
2016
2017
€ mn
Changes in liabilities arising from financing activities
As of 31 December
€ mn
Cash and cash equivalents
815
(815)
(1,185)
(1,251)
19,263
18,335
1,809
2,249
Balances with central banks
1,973
1,273
customers
Foreign currency translation adjustments
(180)
(180)
Changes in the consolidated subsidiaries
of the Allianz Group
14,463
17,119
Total
Non-cash transactions
6,241
(2,933)
6,331
and
subordinated
Liabilities
21,145
2,291
(60)
Net cash flows
Treasury bills, discounted treasury notes, similar treasury
securities, bills of exchange and checks
8,998
As of 1 January 2017
94
71
Cash on hand
Total
30,143
2,231
59
(2,099)
Investments in associates and joint ventures
7,463
911
(60)
Repayments of certificated liabilities and subordinated liabilities
Proceeds from the issuance of certificated liabilities and subordinated liabilities
Net change in liabilities to banks and customers
CASH FLOW FROM FINANCING ACTIVITIES
(19,765)
(24,755)
Net cash flow used in investing activities
38
(209)
(4,848)
(4,517)
Change in other loans and advances to banks and customers (originated loans)
Other (net)
(8)
Proceeds from sale of subsidiaries, net of cash disposed
(183,676)
(178,016)
7,059
(5,173)
(6,155)
Transactions between equity holders
Transfer of profit participating notes
SIGNIFICANT NON-CASH TRANSACTIONS
Interest paid
Interest received
Dividends received
Income taxes paid
SUPPLEMENTARY INFORMATION ON THE CONSOLIDATED STATEMENTS OF CASH FLOWS
(1,732)
(5,027)
Loans and advances to banks and customers
4
44
42
(3,646)
(3,661)
52
(3,477)
Other (net)
Net cash from sale or purchase of treasury shares
Dividends paid to shareholders
(162)
(1,335)
(8)
Fair value and other changes
active markets, and quoted prices for similar instruments from inac-
tive markets. Market observable inputs also include interest rate yield
curves, volatilities, and foreign currency exchange rates.
D_Consolidated Financial Statements
87
Annual Report 2017 - Allianz Group
Level 2 applies if the market for a financial instrument is not ac-
tive or when the fair value is determined by using valuation tech-
niques based on observable input parameters. Such market inputs
are observable substantially over the full term of the asset or liability
and include references to formerly quoted prices for identical instru-
ments from an active market, quoted prices for identical instruments
from an inactive market, quoted prices for similar instruments from
The level 1 inputs of financial instruments traded in active mar-
kets are based on unadjusted quoted market prices or dealer price
quotations for identical assets or liabilities on the last exchange
trading day prior to or at the reporting date, if the latter is a trading
day.
Assets and liabilities measured or disclosed at fair value in the
consolidated financial statements are measured and classified in
accordance with the fair value hierarchy in IFRS 13, which categorizes
the inputs to valuation techniques used to measure fair value into
three levels.
The Allianz Group carries certain financial instruments at fair value
and discloses the fair value of all financial instruments. The fair value
of an asset or liability is defined as the price that would be received to
sell an asset, or paid to transfer a liability, in an orderly transaction
between market participants at the measurement date.
Measurement at fair value
The Allianz Group enters into securities lending transactions and
repurchase agreements. Cash received in the course of those
trans-actions is recognized together with a corresponding liability.
Securities received as collateral under lending transactions are not
recognized, and securities sold under repurchase agreements are not
derecognized, if risks and rewards have not been transferred. Securi-
ties borrowing transactions generally require the Allianz Group to
deposit cash with the security's lender. Fees paid are reported as
interest expenses.
Securities lending and repurchase agreements
Financial assets and liabilities are offset and the net amount is pre-
sented in the balance sheet only when there is a legally enforceable
right to offset the recognized amounts and when there is an intention
to either settle on a net basis or to realize the asset and settle the
liability simultaneously.
Offsetting
A financial asset is derecognized when the contractual rights to
the cash flows from the financial asset expire or the Allianz Group
transfers the asset and substantially all of the risks and rewards of
ownership. A financial liability is derecognized when it is extinguished.
Financial assets are generally recognized and derecognized on the
trade date, i.e. when the Allianz Group commits to purchase or sell
securities or incur a liability.
Recognition and Derecognition
FINANCIAL INSTRUMENTS
Assets and liabilities of subsidiaries not reporting in Euro are translat-
ed at the closing rate on the balance sheet date; income and ex-
penses are translated at the quarterly average exchange rate. Any
foreign currency translation differences, including those arising from
the equity method, are recorded in other comprehensive income.
For the purposes of the consolidated financial statements, the results
and financial position of each of the Allianz Group's subsidiaries are
expressed in Euro, the presentation currency of the Allianz Group.
Level 3 applies where not all input parameters are observable in
the market. Accordingly, the fair value is based on valuation tech-
niques using non-market observable inputs. Valuation techniques
include the discounted cash flow method, comparison to similar
instruments for which observable market prices exist and other valua-
tion models. Appropriate adjustments are made, for example, for
credit risks. In particular when observable market inputs are not
available, the use of estimates and assumptions may have a strong
impact on the valuation outcome.
For fair value measurements categorized as level 2 and level 3,
the Allianz Group uses valuation techniques consistent with the three
widely used valuation techniques listed in IFRS 13:
Market approach: Prices and other relevant information gener-
ated by market transactions involving identical or comparable
assets or liabilities.
Cost approach: Amount that would currently be required to re-
place the service capacity of an asset (replacement cost).
5,563
Annual Report 2017 - Allianz Group
88
88
CASH AND CASH EQUIVALENTS
Cash and cash equivalents include balances with banks payable on
demand, balances with central banks, cash on hand, treasury bills to
the extent they are not included in financial assets held for trading,
and checks and bills of exchange that are eligible for refinancing at
central banks, subject to a maximum term of three months from the
date of acquisition.
Derivative financial instruments designated in hedge accounting
relationships are included in the line items Other assets and Other
liabilities. Freestanding derivatives are included in the line item finan-
cial assets or liabilities held for trading. For further information on
derivatives, please refer to note 33.
For derivative financial instruments used in hedge transactions that
meet the criteria for hedge accounting, the Allianz Group designates
the derivative as a hedging instrument in a fair value hedge, cash
flow hedge, or hedge of a net investment in a foreign operation. The
Allianz Group documents the hedge relationship, as well as its risk
management objective and strategy for entering into the hedge
transaction. The Allianz Group assesses, both at the hedge's inception
and on an ongoing basis, whether the hedging instruments used are
expected to be highly effective in offsetting changes in fair values or
cash flows of the hedged items.
Hedge accounting
Reversals of impairments of available-for-sale equity securities
are not recorded through the income statement but recycled out of
other comprehensive income when sold.
Translation from the functional currency to the presentation
currency
An available-for-sale equity security is considered to be impaired
if there is objective evidence that the cost may not be recovered. The
Allianz Group's policy considers a decline to be significant if the fair
value is below the weighted average cost by more than 20%. A de-
cline is considered to be prolonged if the fair value is below the
weighted average cost for a period of more than nine consecutive
months. If an available-for-sale equity security is impaired, any further
declines in the fair value at subsequent reporting dates are recog-
nized as impairments.
Once impairment is triggered for an available-for-sale debt in-
strument, the cumulative loss recognized in the other comprehensive
income is reclassified to profit or loss. The cumulative loss corre-
sponds to the difference between amortized cost and the current fair
value of the investment. Further declines in fair value are recognized
in other comprehensive income unless there is further objective evi-
dence that such declines are due to a credit-related loss event. If in
subsequent periods the impairment loss is reversed, the reversal is
measured as the lesser of the full original impairment loss previously
recognized in the income statement and the subsequent increase in
fair value.
Allianz Group also considers other factors which could provide objec-
tive evidence of a loss event, including the probability of bankruptcy
and the lack of an active market due to financial difficulty. The pres-
ence of either a decline in fair value below amortized cost or the
downgrade of an issuer's credit rating does not in itself represent objec-
tive evidence of a loss event, but may represent objective evidence of a
loss event when considered with other available information.
The evaluation of whether a financial debt instrument is impaired
requires analysis of the underlying credit risk/quality of the relevant
issuer and involves significant management judgment. In particular,
current publicly available information with regard to the issuer and
the particular security is considered relating to factors including, but
not limited to, evidence of significant financial difficulty of the issuer
and breach of contractual obligations of the security, such as a
default or delinquency on interest or principal payments. The
Impairments
For further information, please refer to note 34.
The degree of judgment used in measuring the fair value of fi-
nancial instruments closely correlates with the level of non-market
observable inputs. The Allianz Group uses a maximum of observable
inputs and a minimum of non-market observable inputs when meas-
uring fair value. Observability of input parameters is influenced by
various factors such as type of the financial instrument, whether a
market is established for the particular instrument, specific transac-
tion characteristics, liquidity, and general market conditions. If the fair
value cannot be measured reliably, amortized cost is used as a proxy
for determining fair values.
Estimates and assumptions of fair values and hierarchies are
particularly significant when determining the fair value of financial
instruments for which at least one significant input is not based on
observable market data (classified as level 3 of the fair value hierar-
chy). The availability of market information is determined by the
relative trading levels of identical or similar instruments in the market,
with emphasis placed on information that represents actual market
activity or binding quotations from brokers or dealers.
There is no one-to-one connection between valuation technique and
hierarchy level. Depending on whether valuation techniques are
based on significant observable or unobservable inputs, financial
instruments are classified in the fair value hierarchy.
Income approach: Conversion of future amounts such as cash
flows or income to a single current amount (present value tech-
nique).
For held-to-maturity investments and loans, the impairment loss
is measured as the difference between the amortized cost and the
expected future cash flows using the original effective interest rate.
50
The individual financial statements of each of the Allianz Group's
subsidiaries are prepared in the currency prevailing in the primary
economic environment where the subsidiary conducts its ordinary
activities (its functional currency). Transactions recorded in currencies
other than the functional currency (foreign currencies) are recorded
at the exchange rate prevailing on the date of the transaction. At the
balance sheet date, monetary assets and liabilities denominated in
foreign currencies are translated into the functional currency using
the closing exchange rate. While non-monetary items denominated
in foreign currencies and measured at historical cost are translated at
historical rates, non-monetary items measured at fair value are trans-
lated using the closing rate. Foreign currency gains and losses arising
from foreign currency transactions are reported in income from finan-
cial assets and liabilities carried at fair value through income (net),
except when the gain or loss on a non-monetary item measured at
fair value is recognized in other comprehensive income. In this case,
any foreign exchange component of that gain or loss is also recog-
nized in other comprehensive income.
FOREIGN CURRENCY TRANSLATION
In accordance with the provisions of IFRS 4, insurance contracts
are recognized and measured on the basis of accounting principles
generally accepted in the United States of America (US GAAP) as at
first-time adoption of IFRS 4 on 1 January 2005.
They have been prepared in conformity with International Finan-
cial Reporting Standards (IFRS), as adopted under European Union
(E.U.) regulations in accordance with § 315e (1) of the German Com-
mercial Code (HGB). Within these consolidated financial statements,
the Allianz Group has applied all standards and interpretations is-
sued by the IASB and endorsed by the E.U. that are compulsory as of
31 December 2017.
The accompanying consolidated financial statements present the
operations of Allianz SE with its registered office in Königinstrasse 28,
80802 Munich, Germany, and its subsidiaries (the Allianz Group).
Allianz SE is recorded in the Commercial Register of the municipal
court in Munich under the number HRB 164232.
1 Nature of operations and basis of
presentation
GENERAL INFORMATION
STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL
D_Consolidated Financial Statements
86
98
85
Annual Report 2017 - Allianz Group
31,817
22,891
8,925
As of 31 December 2017
(427)
(536)
109
The consolidated financial statements have been prepared as of
and for the year ended 31 December 2017. The Allianz Group's presen-
tation currency is the Euro (€). Amounts are rounded to the nearest
million (€ mn) unless otherwise stated.
The consolidated financial statements were authorized for issue
by the Board of Management on 13 February 2018.
The Allianz Group offers Property-Casualty insurance,
Life/Health insurance, and Asset Management products and services
in over 70 countries.
2_ Accounting policies, significant estimates, and
new accounting pronouncements
For further information, please refer to note 43.
The Allianz Group accounts for all material investments in asso-
ciates and joint arrangements with a time lag of no more than three
months. Income from investments in associates and joint arrange-
ments - excluding distributions - is included in interest and similar
income. Accounting policies of associates and joint arrangements are
adjusted where necessary to ensure consistency with the accounting
policies adopted by the Allianz Group.
Pursuant to IFRS 11, investments in joint arrangements have to
be classified as either joint operations or joint ventures, depending on
the contractual rights and obligations of each investor. The
Allianz Group has assessed the nature of all its joint arrangements
and determined them to be joint ventures. Those are generally ac-
counted for using the equity method.
For certain investment funds in which the Allianz Group holds a
stake of above 20%, management has assessed that the
Allianz Group has no significant influence because it is not represent-
ed in the governing bodies of these investment funds.
Although the Allianz Group's share in some companies is below
20%, management has assessed that the Allianz Group has signifi-
cant influence over these companies because it is represented in the
governing bodies that decide on the relevant activities of these com-
panies.
Associates are entities over which the Allianz Group can exercise
significant influence. In general, if the Allianz Group holds 20% or
more of the voting power in an investee but does not control the
investee, it is assumed to have significant influence. Investments in
associates are generally accounted for using the equity method.
Associates and joint arrangements
D_Consolidated Financial Statements
Annual Report 2017 - Allianz Group
Translation from any foreign currency to the functional
currency
Where newly acquired subsidiaries are subject to business combina-
tion accounting, the provisions of IFRS 3 are applied. Any non-
controlling interests in the acquiree can be measured either at its fair
value at the acquisition date or at the non-controlling interest's pro-
portionate share of the acquiree's identifiable net assets. This option
is exercised on a case-by-case basis.
Subsidiaries are consolidated as from the date on which control
is obtained by the Allianz Group, up to the date on which the
Allianz Group no longer maintains control. Accounting policies of
subsidiaries are adjusted as necessary to ensure consistency with the
accounting policies adopted by the Allianz Group. The effects of intra-
Allianz Group transactions are eliminated.
For certain entities, voting or similar rights are not the dominant
factor of control, such as when voting rights relate to administrative
tasks only and returns are directed by means of contractual ar-
rangements, as is the case mainly for investment funds managed by
Allianz Group internal asset managers. In such cases, the investment
fund qualifies as subsidiary if the Allianz Group is in a principal in-
stead of an agent role with regard to the investment fund. Above all,
this qualification takes into account kick-out rights held by third-party
investors as well as the aggregate economic interest of the
Allianz Group in the investment funds.
There are some companies where the Allianz Group holds a
majority stake but where management has assessed that the
Allianz Group does not control these entities because it has no majori-
ty representation in the governing bodies and/or it requires at least
the confirmative vote of another investor to pass any decisions over
relevant activities.
For some subsidiaries where the Allianz Group does not hold a
majority stake, management has assessed that the Allianz Group
controls these companies. The Allianz Group controls these entities
based on distinctive rights stipulated by shareholder agreements
between the Allianz Group and the other shareholders in these com-
panies.
In accordance with IFRS 10, the Allianz Group's consolidated financial
statements include the financial statements of Allianz SE and its
subsidiaries. The Allianz Group controls a subsidiary when it is ex-
posed to, or has rights to, variable returns from its involvement with
the subsidiary and has the ability to affect those returns through its
power over the subsidiary. Subsidiaries are usually entities where
Allianz SE, directly or indirectly, owns more than half of the voting
rights or similar rights with the ability to affect the returns of the sub-
sidiaries for its own benefit. In order to determine whether entities
qualify as subsidiaries, potential voting rights that are currently exer-
cisable or convertible are taken into consideration.
Scope of consolidation and consolidation procedures
PRINCIPLES OF CONSOLIDATION
The following paragraphs describe important accounting policies as
well as significant estimates and assumptions which are relevant for
the Allianz Group's consolidated financial statements. Estimates and
assumptions particularly influence the inclusion method as well as
the accounting treatment of financial instruments and insurance
contracts, goodwill, pension liabilities and similar obligations, and
deferred taxes. The significant estimates and assumptions are ex-
plained in the respective paragraphs.
SIGNIFICANT ACCOUNTING POLICIES AND USE OF
ESTIMATES AND ASSUMPTIONS
Business combinations and measurement of non-controlling
interests
(1,374)
Net cash flow used in financing activities
Subtotal
(288)
(506)
Share of earnings from investments in associates and joint ventures
Adjustments to reconcile net income to net cash flow provided by operating activities
7,329
7,207
Net income
CASH FLOW FROM OPERATING ACTIVITIES
14,463
17,119
Business combinations (note 3):
14,842
14,463
16
2,656
52
(749)
(1,732)
(5,027)
Realized gains/losses (net) and impairments of investments (net) of:
Available-for-sale and held-to-maturity investments, investments in associates and joint ventures, real estate held for investment, loans and advances to banks and
customers, non-current assets and disposal groups classified as held for sale
(5,452)
(6,540)
Reserves for loss and loss adjustment expenses
Unearned premiums
Deferred acquisition costs
Reinsurance assets
Repurchase agreements and collateral received from securities lending transactions
Reverse repurchase agreements and collateral paid for securities borrowing transactions
Financial assets and liabilities held for trading
Net change in:
4,563
(19,765)
4,868
46
25
Loan loss provisions
1,345
1,544
Depreciation and amortization
2,710
(2,481)
Other investments, mainly financial assets held for trading and designated at fair value through income
Interest credited to policyholder accounts
Reserves for insurance and investment contracts
(24,755)
33,188
27,199
(3,661)
(251)
(3,410)
(3,410)
(3,476)
(145)
(3,331)
21
(13)
(3,340)
41
41
41
28,928
Balance as of 31 December 2017
Dividends paid
Transactions between equity holders³,4
Treasury shares
(2,749)
12,175
65,553
3,049
2016
2017
Cash and cash equivalents at end of period
Cash and cash equivalents reclassified to assets of disposal groups classified as held for sale
Cash and cash equivalents at beginning of period
Change in cash and cash equivalents
Effect of exchange rate changes on cash and cash equivalents
Net cash flow used in financing activities
Net cash flow used in investing activities
21,461
Net cash flow provided by operating activities
€ mn
Consolidated statements of cash flows
CONSOLIDATED STATEMENTS OF CASH FLOWS
D_Consolidated Financial Statements
83
Annual Report 2017 - Allianz Group
4_For further information regarding the share buy-back program 2017, please refer to note 19.
1_Due to the change in accounting policies for GMIBS, the balance as of 1 January 2016 has been adjusted retrospectively. For further information please refer to note 2.
2_Total comprehensive income in shareholders' equity for the year ended 31 December 2017 comprises net income attributable to shareholders of € 6,803 mn (2016: € 6,962 mn).
3_Includes income taxes within retained earnings.
68,602
SUMMARY
Deferred tax assets/liabilities
(395)
Subtotal
Financial assets designated at fair value through income
Payments for the purchase or origination of:
2016
2017
€ mn
Consolidated statements of cash flows
CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED
D_Consolidated Financial Statements
Annual Report 2017 - Allianz Group
168,728
157,986
128
153
8,409
6,333
3
407
152
156
Available-for-sale investments
420
Held-to-maturity investments
Non-current assets and disposal groups classified held for sale
Property and equipment
(3,007)
(2,214)
Loans and advances to banks and customers (purchased loans)
(720)
(218)
(409)
(680)
Other (net)
(1,557)
(2,852)
(151)
(616)
(174,302)
(167,932)
(2,193)
(1,931)
Fixed assets of renewable energy investments
Real estate held for investment
Investments in associates and joint ventures
850
(199)
466
(2,455)
(1,278)
108
(696)
130
(3,026)
5,144
64
84
(587)
Subtotal
Fixed assets of renewable energy investments
Real estate held for investment
Non-current assets and disposal groups classified as held for sale
Held-to-maturity investments
Available-for-sale investments
Financial assets designated at fair value through income
Proceeds from the sale, maturity or repayment of:
CASH FLOW FROM INVESTING ACTIVITIES
945
Loans and advances to banks and customers (purchased loans)
Property and equipment
(546)
Investments in associates and joint ventures
841
305
(588)
156,085
147,599
2,224
2,079
21,461
33,188
14,132
25,981
Net cash flow provided by operating activities
15,233
622
16,569
806
404
3,300
5,421
909
(33)
E_ Further Information
The Consolidated Financial Statements are presented in millions of Euros (€ mn) unless
otherwise stated. Due to rounding, numbers presented may not add up precisely to
the totals provided and percentages may not precisely reflect the absolute figures.
Disclaimer regarding roundings
170 Independent Practitioner's Report
165 Independent Auditor's Report
164 Responsibility Statement
Pages 1-10
We have taken another big step towards a sustainable future: Allianz has set itself long-term climate goals which are
linked to the two-degree target of the Paris Climate Agreement. By 2040 we will have phased out coal-based business
in our proprietary investments and insurance activities. Our achievements have been very positively acknowledged.
Allianz has gained leading positions and high scores in key sustainability ratings.
117 Notes to the Consolidated Balance Sheets
134 Notes to the Consolidated Income Statements
Pages 11-48
98 General Information
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
96 Consolidated Statements of Cash Flows
95 Consolidated Statements of Changes in Equity
94 Consolidated Statements of Comprehensive Income
139 Other Information
Pages 49-90
A
Pages 163-172
We continue the exceptional growth in our life insurance's value of new business. Customers all around the globe trust
Allianz to secure their future wealth. In particular our entities in Germany, the USA, and Asia contribute to this growth.
We have received approval for the preparatory establishment of the first-ever insurance holding company in China that
is 100 percent owned by a foreign insurer.
93 Consolidated Income Statements
For the first time in years, we've managed to significantly reduce the expense ratio in our Property-Casualty business
segment. We intend to eliminate whatever doesn't add value for our customers.
Taking a closer look back at the past business year, there are a series of achievements we are particularly proud of. Let me
name a few:
These achievements are results of a healthy organization. Customers are more satisfied with us than they used to be, as
indicated by their greater willingness to recommend Allianz to family and friends - which, in turn, is reflected in the so-called
Net Promoter Score. When we started the Renewal Agenda, less than half of our businesses reported Net Promoter Scores
above market average, by 2018 it was 74% of them. Our people and leaders are on board for the cultural change we seek,
as indicated by the rise in our Inclusive Meritocracy Index from 68 to 71. We trust that you, our investors, are as satisfied with
this development as we are.
Our current financial performance is strong: In 2018, we achieved the highest operating profit in the history of Allianz:
€11.5 bn, a 3.7% increase compared to 2017. Furthermore, we generated record revenues of € 130.6 bn. Our net income
attributable to shareholders grew by 9.7% and reached € 7.5 bn. This allows us to propose the highest dividend of our
history: € 9.00 per share. We also withstood the beginning turmoil in the capital markets, once again recording a strong
Solvency II capitalization ratio of 229% as of 31 December 2018. Last but not least, we outperformed our 3-year targets for
both earnings per share and return on equity: The former grew 6.2% per annum, the latter reached 13.2% in 2018.
With the end of 2018 we concluded the first phase of our Renewal Agenda. We are happy and proud to present the results
of our efforts. When embarking on the Renewal Agenda in 2015, we had set ourselves ambitious targets building on our
strong heritage. We were determined to improve both the performance and the organizational health of Allianz. And we
have made significant progress on both dimensions.
OLIVER BÄTE
Chairman of the
Board of Management
Dear Juvestors
2
A_To our Investors
1
Annual Report 2018 - Allianz Group
We have invested in preparing our employees for the transformation. 40,000 employees have registered for LinkedIn
Learning to develop the new skills and knowledge required for the digital world.
TO OUR INVESTORS
Pages 91-162
-
►All references to chapters, pages, notes,
D_Consolidated Financial Statements
B_Corporate Governance
10 Mandates of the Members of the Board of Management
9 Mandates of the Members of the Supervisory Board
4 Supervisory Board Report
2 Letter to the Investors
A_ To our Investors
CONTENT
12 Corporate Governance Report
►To go directly to any chapter, simply click
on the headline or the page number.
ALLIANZ GROUP
ANNUAL REPORT 2018
REBALANCE
TRANSFORM
OUTPERFORM
Annual Report 2018 - Allianz Group
Annual Report 2018 - Allianz Group
Allianz (il
92 Consolidated Balance Sheets
internet pages, etc. within this report are also linked.
20 Takeover-Related Statements and Explanations (part of the Group Management Report)
23 Remuneration Report (part of the Group Management Report)
89 Controls over Financial Reporting
74 Risk and Opportunity Report
Reconciliations
72
69 Liquidity and Funding Resources
67 Balance Sheet Review
63 Outlook 2019
17 Statement on Corporate Management pursuant to § 315d and §289f of the HGB
(part of the Group Management Report)
62 Corporate and Other
57 Life/Health Insurance Operations
55 Property-Casualty Insurance Operations
54 Executive Summary of 2018 Results
53 Business Environment
50 Business Operations
C_Group Management Report
41 Combined Separate Non-Financial Report
60 Asset Management
All these successes are the result of a team effort. I am grateful to all our employees and partners - it is they who have
brought our Renewal Agenda to life. Every day they work to provide the best possible service to our customers: They offer
expert advice. They give comfort in the uncomfortable situation around an accident. They carefully and expertly invest the
money our customers entrust us with. They bring their hearts and minds to work.
COMMITTEE ACTIVITIES
Simple - We are going to reduce the complexity of our products and processes. This will make our offerings more intuitive,
and it will free up more time to serve our customers. Furthermore, it will increase customer loyalty and fuel growth also
in highly competitive markets.
Risk Committee: Michael Diekmann (Chairman), Christine Bosse, Dr. Friedrich Eichiner, Godfrey Hayward,
Frank Kirsch
Audit Committee: Dr. Friedrich Eichiner (Chairman), Sophie Boissard, Michael Diekmann, Jean-Claude Le Goaër,
Martina Grundler
Personnel Committee: Michael Diekmann (Chairman), Gabriele Burkhardt-Berg, Herbert Hainer
Standing Committee: Michael Diekmann (Chairman), Jean-Claude Le Goaër, Herbert Hainer, Jürgen Lawrenz,
Jim Hagemann Snabe
Vice Chairwoman/Chairman: Gabriele Burkhardt-Berg, Jim Hagemann Snabe
CHAIR AND COMMITTEES OF THE SUPERVISORY BOARD - AS OF 31 DECEMBER 2018
Chairman: Michael Diekmann
The Supervisory Board was informed regularly and comprehensively of the committees' work.
The Nomination Committee had no reason to convene a meeting in the financial year 2018.
The Technology Committee held two meetings in the 2018 financial year, in which it extensively discussed IT
transformation and the IT harmonization across the Allianz Group. Both meetings also dealt with recent
technological developments, such as block chain and open-platform solutions, and the resulting opportunities
for Allianz. Another key topic in both meetings was IT security.
The Risk Committee held two meetings in 2018. In both meetings, the committee discussed the current risk
situation of the Allianz Group and Allianz SE with the Board of Management. The risk report and other risk-
related statements in the annual Allianz SE and consolidated financial statements as well as management
and group management reports were reviewed with the auditor and the Audit Committee was informed of the
result. The appropriateness of the early risk recognition system at Allianz and the result of further, voluntary risk
assessments by the auditor were also discussed. The committee took a detailed look at the risk strategy and
capital management, as well as the effectiveness of the risk management system for the Allianz Group and
Allianz SE. Other matters considered included the risk strategy pursued by both Allianz SE and the
Allianz Group, the report on Allianz's own risk and solvency assessment (ORSA), and the planned changes to
the internal Solvency II model. Moreover, the Risk Committee dealt with the company's exposure to cyber risks,
the specific risks of the cyber insurance industry, and political risks.
A_To our Investors
Annual Report 2018 - Allianz Group
The Audit Committee held five regular meetings in 2018 and adopted one written resolution. In the presence of
the auditors, the committee discussed both Allianz SE's annual financial statements and the Allianz Group's
consolidated financial statements, as well as the management and auditor's reports and the half-yearly finan-
cial report. These reviews revealed no reasons for objection. The Audit Committee further received the Board of
Management's reports on quarterly results. It prepared the engagement of the external advisor and defined
key audit areas for the 2018 financial year. The committee also discussed the assignments of non-audit services
to the auditors and approved an updated appropriate positive list of pre-authorized audit and non-audit
services. In addition, it dealt extensively with the compliance system, the internal audit system, and the financial
reporting process as well as the respective internal controls. The committee received regular reports on legal
and compliance issues and on the work of the Internal Audit department, as well as the annual report of the
head of the actuarial department (Group Actuarial, Planning & Controlling). Furthermore, the committee
dealt with the Internal Audit function's audit plan for 2019. Last but not least, it thoroughly
addressed the findings of a BaFin review and the review of the implementation of Solvency II governance
requirements in the Allianz Group. The written resolution mentioned above approved the auditor's engagement
to perform non-audit services at Group companies abroad.
The Personnel Committee held six meetings in 2018 and adopted two written resolutions. The committee
worked on the creation and set-up of, and proposed appointment to, a tenth Board of Management division.
Other key topics included the preparatory review and revision of the Board of Management's remuneration
system, target achievement of the Board of Management members in the financial year 2017, and defining the
targets for the 2019 variable remuneration. The committee also looked at various mandate matters of individual
board members and at the succession planning for the Board of Management.
In 2018, the Standing Committee held five meetings. It primarily dealt with issues of corporate governance, the
preparations for the AGM, the employee stock purchase program, the Supervisory Board's self-assessment as
required under the regulatory regime, and the review of the Supervisory Board's efficiency conducted by an
external advisor. In addition, the Standing Committee dealt with the appropriateness of the remuneration of the
Supervisory Board and the need for adjustment.
Technology Committee: Jim Hagemann Snabe (Chairman), Gabriele Burkhardt-Berg, Michael Diekmann,
Dr. Friedrich Eichiner, Jürgen Lawrenz
Nomination Committee: Michael Diekmann (Chairman), Christine Bosse, Jim Hagemann Snabe
AUDIT OF ANNUAL ACCOUNTS AND CONSOLIDATED FINANCIAL STATEMENTS
In compliance with the special legal provisions applying to insurance companies, the statutory auditor and the
auditor for the review of the half-yearly financial report are appointed by the Supervisory Board of Allianz SE,
not by the AGM. The Supervisory Board appointed PricewaterhouseCoopers GmbH Wirtschaftsprüfungsgesellschaft
(PwC) as statutory auditor for the annual Allianz SE and consolidated financial statements, as well as for the
review of the half-yearly financial report of the financial year 2018. PwC audited the financial statements of
Allianz SE and the Allianz Group as well as the respective management reports. They issued an auditor's report
without any reservations. The consolidated financial statements were prepared on the basis of the International
Financial Reporting Standards (IFRS), as adopted in the European Union. PwC performed a review of the half-
yearly financial report. In addition, PwC was also mandated to perform an audit of the market value balance
sheet according to Solvency II as of 31 December 2018, for Allianz SE and the Allianz Group.
Michael Diekmann
Chairman
Gratified by our customers' trust, economically successful, and financially solid, we are now ready to take the next steps. As
we implement our Renewal Agenda 2.0, we will move up a gear. The next chapter of our strategy will be launched with the
motto "Simplicity wins". Simplicity is key, as it enhances customer and employee satisfaction and increases our productivity
and flexibility. Our goal is for Allianz to become a simple, digital, and scalable organization that is fully customer-centric.
M. Miam
Munich, 7 March 2019
The 2018 financial year also saw personnel changes within Allianz SE's Board of Management. Effective
1 January 2018, Mr. Niran Peiris and Mr. Giulio Terzariol were appointed to the Board of Management as
successors to Dr. Dieter Wemmer and Dr. Werner Zedelius; their respective membership in the Board of
Management ended as of 31 December 2017. For the new and additionally created Board of Management
division Business Transformation and Innovation, Mr. Iván de la Sota has been appointed to the Board of
Management effective 1 April 2018.
Mr. Jean-Jacques Cette's membership in the Supervisory Board ended on 31 July 2018. Mr. Jean-Claude Le
Goaër replaced Mr. Cette in his function as elected employee representative with effect from 1 August 2018.
Mr. Rolf Zimmermann, vice chairman of the Supervisory Board and employee representative, left the
Supervisory Board on 31 August 2018. The employee representative Mr. Frank Kirsch was appointed as
successor, effective 1 September 2018. The Supervisory Board expressed its sincere thanks to all leaving
members for their many years of active service to Allianz, as well as their dedicated contributions to the
Supervisory Board.
MEMBERS OF THE SUPERVISORY BOARD AND BOARD OF MANAGEMENT
The Supervisory Board has formed various committees in order to perform its duties efficiently. The committees
prepare the consultations in plenary sessions as well as the adoption of resolutions; they can also adopt their
own resolutions.
ASSURANCE ENGAGEMENT OF THE COMBINED SEPARATE NON-FINANCIAL REPORT
In the financial year 2018, the company was required to issue a separate non-financial report. This report was
combined for Allianz SE and the Allianz Group. The Supervisory Board commissioned PwC to perform an
assurance engagement of this report. All Supervisory Board members received the combined separate non-
financial report and the independent practitioner's assurance report from PwC in due time. The report and
PwC's assurance report were discussed in the plenary session of the Supervisory Board on 7 March 2019. The
auditors from PwC participated in these discussions and presented the results of their assurance engagement.
Based on its own review of the combined separate non-financial report, the Supervisory Board did not raise
any objections and approved by acknowledgement the results of the PwC assurance engagement.
On the basis of its own reviews of the annual Allianz SE and consolidated financial statements, the management
and group management reports, and the recommendation for the appropriation of earnings, the Supervisory
Board has raised no objections and instead agreed with the results of the PwC audit. It has also approved the
Allianz SE and consolidated financial statements prepared by the Board of Management. The financial
statements have thus been formally adopted. The Supervisory Board agrees with the Board of Management's
proposal on the appropriation of earnings.
Allianz Group as of 31 December 2018, as well as the respective PwC reports were addressed by the Audit
Committee and the Supervisory Board.
8
A_To our Investors
7
Annual Report 2018 - Allianz Group
All Supervisory Board members received the documentation relating to the annual financial statements and the
auditor's reports from PwC on schedule. The preliminary financial statements and PwC's preliminary audit
results were discussed in the Audit Committee on 13 February 2019 as well as in the Supervisory Board's ple-
nary session on 14 February 2019. The finalized financial statements and PwC's audit reports (dated
25 February 2019) were reviewed by the Audit Committee on 6 March 2019, and in the Supervisory Board
plenary session on 7 March 2019. The auditors participated in the discussions and presented key results from
their audit. Particular emphasis was placed on the key audit matters described in the auditor's report and on the
audit procedures performed. No material weaknesses in the internal financial reporting control process were
discovered. There were no circumstances that might give cause for concern about the auditor's independence.
In addition, the market value balance sheets dated 31 December 2018 for both Allianz SE and the
The Supervisory Board would like to thank all Allianz Group employees for their great personal commitment
over the past year.
Further explanations on corporate governance in the Allianz Group can be found in the Corporate Governance
Report starting on > page 12, as well as in the Statement on Corporate Management pursuant to §315d and
$289f of the HGB, which starts on > page 17. More details on corporate governance are provided on the
Allianz website, specifically: > www.allianz.com/corporate-governance.
For the Supervisory Board:
At the meeting on 12 December 2018, the Board of Management reported on the third-quarter financial results,
the further course of the business, and the Allianz Group's general situation. The Supervisory Board also reviewed
the planning for both the financial year 2019 and the three-year period from 2019 to 2021, as well as specifically
for IT-related investments. Next, the Board of Management gave a status report on cyber risk security. The Super-
visory Board then dealt with the declaration of conformity with the German Corporate Governance Code, set
targets for the 2019 variable remuneration of the members of the Board of Management, and discussed the
succession planning for the Board of Management. Last but not least, the Supervisory Board dealt with the findings
of a review on the Supervisory Board's efficiency, which was carried out with external advisor support.
During the financial year 2018, the Supervisory Board fulfilled all its duties and obligations as laid out in the
company statutes and applicable law. It monitored the activities of the company's Board of Management and
advised it on business management issues.
Ladies and Gentlemen,
SUPERVISORY BOARD REPORT
4
A_To our Investors
3
A_To our Investors
Annual Report 2018 - Allianz Group
فاح عنده
Sincerely yours,
Thank you for your continuous support - and we look forward to the joint path ahead.
Even if the current volatility in the capital markets and political instability were to continue in 2019, our diversification,
our disciplined capital management, and the expertise and dedication of our people provide a robust base for both
resilience and profitable growth. We will remain a solid and trusted partner at our customers' side and a strong value
creator for our investors.
Motivated by these successes, we feel confident in committing to ambitious targets for the upcoming years. Our three-year-
plan is to increase our earnings per share by a minimum of 5% on average per annum and to achieve a return on equity of
13% or higher. At the same time, we will not compromise on our balance sheet strength and keep the target Solvency II
capitalization ratio above 180%. The basis for those financials is customer satisfaction and employee commitment. We aim
to achieve an above-market Net Promoter Score for 75% or more of our businesses and to grow the number of markets
where we are loyalty leader. We want to further improve our global Inclusive Meritocracy Index to 73% or higher. We know
we still have some homework to do, if we want to mobilize our employees even more and effectively prepare them for the
transformation ahead.
DECLARATION OF CONFORMITY WITH THE GERMAN CORPORATE GOVERNANCE CODE
On 12 December 2018, the Board of Management and the Supervisory Board issued the Declaration of
Conformity in accordance with § 161 of the German Stock Corporation Act ("Aktiengesetz"). The declaration
was posted on the company website, where it is available to shareholders at all times. Allianz SE fully
complies and will continue to fully comply with the recommendations of the German Corporate Governance
Code in its version of 7 February 2017.
Digital - We are going to digitalize products and processes and use data analytics to improve product design as well as
pricing and claims, and win new customers.
OVERVIEW
In the financial year 2018, the Supervisory Board held six meetings and adopted two written resolutions. The
regular meetings took place in February, March, May, August, October, and December.
We have already prepared for this next phase in 2018 and have established the new position of Chief Business Transformation
Officer. We also developed the Allianz Customer Model as our common standard to achieve simplicity and digitization. In
addition, we are redesigning our direct-to-consumer processes and building a highly efficient and scalable platform from
scratch which will give us higher flexibility and speed to react to changing customer demands.
Further key reporting topics were strategic issues, such as the status of implementation of the Renewal Agenda
and the following strategic course for 2019-2021, as laid down in the Renewal Agenda 2.0. In addition, the
Supervisory Board thoroughly reviewed the Board of Management's planning for the financial year 2019 as
well as for the three-year period from 2019 to 2021. Cyber risk security was another regular topic of discussion.
In addition, the Supervisory Board thoroughly dealt with the new remuneration system for the Board of
Management introduced in 2019, personnel matters related to the Board of Management as well as with the
findings of the review of the efficiency of the Supervisory Board, which was carried out with the support of an
external advisor.
A_To our Investors
6
In all of the Supervisory Board's 2018 meetings, the Board of Management reported on Group revenues and
results as well as developments in individual business segments. The Board of Management informed the
Supervisory Board on the course of business as well as on the development of Allianz SE and the Allianz Group,
including deviations in actual business developments from the planning. In this context, the adequacy of capital-
ization, the solvency ratio, and the respective stress scenarios were discussed. The annual Allianz SE and the
Group's consolidated financial statements including the respective auditor's reports, the half-yearly as well as
the quarterly reports were reviewed in detail by the Supervisory Board and the Audit Committee.
5
A_To our Investors
Annual Report 2018 - Allianz Group
At the meeting of 12 October 2018, the presentation on the future strategy of the Allianz Group and Allianz SE
(solo) was continued. After outlining on future key value drivers and Allianz's intended position in the digital
arena, the presentation addressed possible approaches to implementing these strategic goals in the context of
the Renewal Agenda 2.0. As part of its report on business developments, the Board of Management also
addressed the consequences of the collapse of a bridge in Genoa, Italy, the conclusion of an exclusive long-term
partnership agreement with the International Olympic Committee (IOC) as well as the current investigation into
the financial sector carried out by the Royal Commission in Australia. Next, the Supervisory Board adopted the
finalized proposal for a new remuneration system for the Board of Management. For more details, please refer
to the Remuneration Report starting on :D:D:D:D:D:D:D:Date: 23. The Supervisory Board resolved a 5-year extension of
Mr. Oliver Bäte's term as CEO of Allianz SE. Following the meeting, the Supervisory Board approved in a written
procedure the conclusion of a new Board of Management contract with Mr. Bäte in November 2018.
At the meeting of 2 August 2018, the Board of Management reported in detail on half-yearly results as well as on
the current developments of Allianz in China, including the regulatory approval of Allianz's property & casualty
insurance joint venture with JD.com and current plans for an initial approval of a foreign holding company in
China. Next, the Board of Management gave the first part of its presentation on the future strategy of Allianz.
After taking stock of the results of the Renewal Agenda that had been launched in 2015, the presentation
addressed relevant external trends and the ongoing changes in the significance of geographical regions and
markets, along with the challenges that might result for Allianz. In addition, the Board of Management provided
its regular status report on cyber risk security. Furthermore, the Supervisory Board very thoroughly reviewed the
ongoing considerations on a possible adjustment of the Board of Management's remuneration as well as the
time plan for a proposal on a new remuneration system. Last but not least, due to Mr. Cette and
Mr. Zimmermann leaving the Supervisory Board (effective 31 August 2018), a new composition for the
Supervisory Board's committees was required. Effective 1 September 2018, the Supervisory Board decided on
the new composition of the committees and elected Mrs. Burkhardt-Berg as deputy chairwoman of the Super-
visory Board.
Scalable - We are going to harmonize products and processes across our businesses. By using knowledge, best
practice, and technology assets at scale, we continuously aim to become faster and more productive.
Mr. Jean-Jacques Cette's term as employee representative on the Supervisory Board ended on 31 July 2018.
Mr. Jean-Claude Le Goaër replaced Mr. Cette as elected employee representative on the Supervisory Board with
effect from 1 August 2018. In June 2018 Mr. Le Goaër was elected to the Audit Committee in a written procedure
with effect from 1 August 2018.
In a conference call on 29 June 2018, the Supervisory Board discussed the Board of Management's considerations
for a potential further share buy-back program.
ISSUES DISCUSSED IN THE SUPERVISORY BOARD PLENARY SESSIONS
The Supervisory Board received regular, timely, and comprehensive reports from the Board of Management. The
Board of Management's verbal reports at the meetings were accompanied by written documents, which were
sent to each member of the Supervisory Board in time for the relevant meeting. The Board of Management also
informed the Supervisory Board in writing of important events that occurred between meetings. The chairmen of
the Supervisory and Management Boards also had regular discussions about major developments and
decisions. The Chairman of the Supervisory Board also had individual discussions with each member of the
Board of Management about their respective half-year as well as full-year performance.
Details on each member's participation in meetings of the Supervisory Board and its committees can be found
in the Corporate Governance Report, starting on > page 12. Members of the Supervisory Board who were
unable to attend meetings of the Supervisory Board or its committees were excused and, as a rule, cast their
votes in writing.
On 9 May 2018, just before the AGM, the Board of Management briefed the Supervisory Board on business
performance in the first quarter of 2018 as well as on the current situation of both the Allianz Group and
Allianz SE, in particular with regard to share price development, capitalization, and capital management. In
addition, the latest developments in China and the resulting opportunities for Allianz were discussed.
Annual Report 2018 - Allianz Group
In the meeting of 8 March 2018, the Supervisory Board discussed the audited annual Allianz SE and consolidated
financial statements including market value balance sheets, as well as the Board of Management's
recommendation for the appropriation of earnings for the financial year 2017. The auditors confirmed that
there were no discrepancies compared to their February report, and issued an unqualified auditor's report for
the individual and consolidated financial statements. The Supervisory Board also reviewed and approved the
separate non-financial report for both Allianz SE and the Group, taking into account the report of the external
auditor. Further presentations concerned the Board of Management's report on risk development in 2017, the
annual compliance report, and the annual report of the Head of Group Audit. Next, the Supervisory Board
reviewed the agenda and proposals for resolution for Allianz SE's 2018 Annual General Meeting (AGM). At the
recommendation of the Audit Committee, the Supervisory Board appointed PricewaterhouseCoopers GmbH
Wirtschaftsprüfungsgesellschaft (PwC) as auditor for the 2018 individual and consolidated financial statements,
the auditor's review of the 2018 half-yearly financial report, and the assurance engagement of the combined
separate non-financial report. In addition, the Supervisory Board received reports on the implementation status
of the Renewal Agenda as well as on current developments in the individual business segments. The Supervisory
Board comprehensively dealt with the appointment of Mr. Iván de la Sota to the Board of Management with
responsibility for the newly created Transformation and Innovation division as of 1 April 2018.
In the meeting of 15 February 2018, the Supervisory Board comprehensively dealt with the preliminary financial
figures for the financial year 2017 as well as the Board of Management's dividend proposal. The appointed
audit firm, KPMG AG Wirtschaftsprüfungsgesellschaft (KPMG), Munich, reported in detail on the preliminary
results of their audit. In the further course of the meeting, the Supervisory Board also discussed the target
achievement of each individual member of the Board of Management and, on this basis, set their variable
remuneration for the financial year 2017. As part of this performance assessment, the fitness and propriety of
the members of the Board of Management were also confirmed. In addition, various other issues were dealt
with, such as the impact of storm Friederike in Germany, internal reinsurance provided by Allianz Re, ongoing
M&A activities, the status of the Euler-Hermes transaction, and the status of preparations for Brexit. The Supervisory
Board further reviewed the adequacy of Supervisory Board remuneration and possible needs for adjustment.
165,089
305
731
945
357
440
152
225
5,867
6,333
144
153
420
1
2,956
154,368
1,651
157,986
841
(206)
3,300
14,753
15,233
748
806
(1,689)
17,969
25,981
25,672
33,188
2,079
147,599
5,421
2018
D_Consolidated Financial Statements
(167,932)
(320)
(616)
(3,130)
(2,852)
(199)
(165,621)
(1,374)
(155)
(218)
(1,388)
(2,214)
(1,258)
(546)
(680)
(1,931)
(3,070)
2017
CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED
Consolidated statements of cash flows
€ mn
Payments for the purchase or origination of:
Financial assets designated at fair value through income
Available-for-sale investments
Held-to-maturity investments
Investments in associates and joint ventures
Non-current assets and disposal groups classified held for sale
Real estate held for investment
Fixed assets of renewable energy investments
Loans and advances to banks and customers (purchased loans)
Property and equipment
Subtotal
Business combinations (note 3):
Annual Report 2018 - Allianz Group
(1,272)
Loan loss provisions
243
7,703
7,207
Adjustments to reconcile net income to net cash flow provided by operating activities
Share of earnings from investments in associates and joint ventures
(228)
(506)
Net income
Realized gains/losses (net) and impairments of investments (net) of:
(2,945)
(5,452)
Other investments, mainly financial assets held for trading and designated at fair value through income
5,256
(2,481)
Depreciation and amortization
Available-for-sale and held-to-maturity investments, investments in associates and joint ventures, real estate held for investment, loans and advances to banks and
customers, non-current assets and disposal groups classified as held for sale
CASH FLOW FROM OPERATING ACTIVITIES
17,119
17,234
2018
2017
25,672
33,188
(19,310)
(24,755)
(6,821)
(5,027)
41
(749)
(416)
2,656
17,119
14,463
531
1,586
(2,455)
1,544
2
Available-for-sale investments
Held-to-maturity investments
Investments in associates and joint ventures
Non-current assets and disposal groups classified as held for sale
Real estate held for investment
Fixed assets of renewable energy investments
Proceeds from the sale, maturity or repayment of:
Financial assets designated at fair value through income
Loans and advances to banks and customers (purchased loans)
Property and equipment
(3,368)
5,144
(605)
130
232
108
Subtotal
CASH FLOW FROM INVESTING ACTIVITIES
Net cash flow provided by operating activities
Subtotal
25
Interest credited to policyholder accounts
3,811
4,868
Net change in:
Financial assets and liabilities held for trading
Reverse repurchase agreements and collateral paid for securities borrowing transactions
Repurchase agreements and collateral received from securities lending transactions
Reinsurance assets
Deferred acquisition costs
Unearned premiums
Reserves for loss and loss adjustment expenses
Reserves for insurance and investment contracts
Deferred tax assets/liabilities
Other (net)
(1,374)
(176,315)
65
Proceeds from sale of subsidiaries, net of cash disposed
31,817
Net cash flows
1,147
(434)
712
Non-cash transactions
22,891
Changes in the consolidated subsidiaries
(1)
(1)
Foreign currency translation adjustments
(23)
Fair value and other changes
1
of the Allianz Group
12
205
8,925
(427)
Total
17,234
6,331
17,119
Non-cash transactions
Changes in the consolidated subsidiaries
of the Allianz Group
(180)
As of 31 December 2017
(180)
59
(8)
50
Fair value and other changes
109
(536)
Foreign currency translation adjustments
(11)
206
As of 31 December 2018
The Allianz Group's consolidated balance sheets are not presented
using a current/non-current classification. The following balances are
generally considered to be current: cash and cash equivalents,
deferred acquisition costs on property & casualty contracts, non-
current assets and assets of disposal groups classified as held for
sale, and liabilities of disposal groups classified as held for sale.
The following balances are generally considered to be non-
current: investments, deferred tax assets, intangible assets, deferred tax
liabilities.
All other balances are mixed in nature (including both current
and non-current portions).
PRINCIPLES OF CONSOLIDATION
Scope of consolidation and consolidation procedures
The following paragraphs describe important accounting policies as
well as significant estimates and assumptions which are relevant for
the Allianz Group's consolidated financial statements. Estimates and
assumptions particularly influence the inclusion method as well as
the accounting treatment of financial instruments and insurance
contracts, goodwill, pension liabilities and similar obligations, and
deferred taxes. The significant estimates and assumptions are ex-
plained in the respective paragraphs.
In accordance with IFRS 10, the Allianz Group's consolidated financial
statements include the financial statements of Allianz SE and its
subsidiaries. The Allianz Group controls a subsidiary when it is
exposed to, or has rights to, variable returns from its involvement with
the subsidiary and has the ability to affect those returns through its
power over the subsidiary. Subsidiaries are usually entities where
Allianz SE, directly or indirectly, owns more than half of the voting
rights or similar rights with the ability to affect the returns of the sub-
sidiaries for its own benefit. In order to determine whether entities
qualify as subsidiaries, potential voting rights that are currently
exercisable or convertible are taken into consideration.
There are some companies where the Allianz Group holds a
majority stake but where management has assessed that the
Allianz Group does not control these entities because it has no
majority representation in the governing bodies and/or it requires at
least the confirmative vote of another investor to pass any decisions
over relevant activities.
For certain entities, voting or similar rights are not the dominant
factor of control, such as when voting rights relate to administrative
tasks only and returns are directed by means of contractual
arrangements, as is the case mainly for investment funds managed
by Allianz Group internal asset managers. In such cases, the invest-
ment fund qualifies as subsidiary if the Allianz Group is in a principal
instead of an agent role with regard to the investment fund. Above
all, this qualification takes into account kick-out rights held by third-
party investors as well as the aggregate economic interest of the
Allianz Group in the investment funds.
Subsidiaries are consolidated as from the date on which control
is obtained by the Allianz Group, up to the date on which the
Allianz Group no longer maintains control. Accounting policies of
subsidiaries are adjusted as necessary to ensure consistency with the
accounting policies adopted by the Allianz Group. The effects of intra-
Allianz Group transactions are eliminated.
98
Annual Report 2018 - Allianz Group
Cash and cash equivalents at end of period
For some subsidiaries where the Allianz Group does not hold a
majority stake, management has assessed that the Allianz Group
controls these companies. The Allianz Group controls these entities
based on distinctive rights stipulated by shareholder agreements be-
tween the Allianz Group and the other shareholders in these companies.
SIGNIFICANT ACCOUNTING POLICIES AND USE OF
ESTIMATES AND ASSUMPTIONS
2_Accounting policies, significant estimates, and
new accounting pronouncements
The Allianz Group offers property-casualty insurance, life/health
insurance, and asset management products and services in over 70
countries.
10,049
22,674
32,723
Annual Report 2018 - Allianz Group
97
D_Consolidated Financial Statements
NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS
GENERAL INFORMATION
1 Nature of operations and basis of
presentation
The accompanying consolidated financial statements present the
operations of Allianz SE with its registered office in Königinstrasse 28,
80802 Munich, Germany, and its subsidiaries (the Allianz Group).
Allianz SE is recorded in the Commercial Register of the municipal
court in Munich under the number HRB 164232.
They have been prepared in conformity with International
Financial Reporting Standards (IFRS), as adopted under European
Union (E.U.) regulations in accordance with §315e (1) of the German
Commercial Code (HGB). Within these consolidated financial state-
ments, the Allianz Group has applied all standards and interpreta-
tions issued by the IASB and endorsed by the E.U. that are compulsory
as of 31 December 2018.
In accordance with the provisions of IFRS 4, insurance contracts
are recognized and measured on the basis of accounting principles
generally accepted in the United States of America (US GAAP) as at
first-time adoption of IFRS 4 on 1 January 2005.
The consolidated financial statements have been prepared as of
and for the year ended 31 December 2018. The Allianz Group's presen-
tation currency is the Euro (€). Amounts are rounded to the nearest
million (€ mn) unless otherwise stated.
The consolidated financial statements were authorized for issue
by the Board of Management on 12 February 2019.
6,526
30,143
2,231
2,291
(60)
Income taxes paid (from operating activities)
Dividends received (from operating activities)
Interest received (from operating activities)
Interest paid (from operating activities)
1_Prior-year figures have been adjusted.
1,147
(60)
SUPPLEMENTARY INFORMATION ON THE CONSOLIDATED STATEMENTS OF CASH FLOWS
4,527
(4,961)
(5,173)
(3,941)
(3,477)
(3,673)
(3,661)
7,463
Net cash flow used in financing activities
Other (net)
Net cash from sale or purchase of treasury shares
(208)
Change in other loans and advances to banks and customers (originated loans)
Other (net)
(7,094)
(4,517)
(781)
(209)
Net cash flow used in investing activities
(19,310)
(24,755)
CASH FLOW FROM FINANCING ACTIVITIES
Net change in liabilities to banks and customers
Proceeds from the issuance of certificated liabilities and subordinated liabilities
Repayments of certificated liabilities and subordinated liabilities
Transactions between equity holders
Dividends paid to shareholders
16
(178,016)
42
(6,821)
Liabilities to
banks and
Balances with central banks
2,990
1,973
customers
Cash on hand
8,745
57
As of 1 January 2017
8,998
Certificated
and
subordinated
liabilities
21,145
Total
Treasury bills, discounted treasury notes, similar treasury
securities, bills of exchange and checks
Net cash flows
71
7,660
Balances with banks payable on demand
2017
(5,027)
(2,169)
(2,163)¹
2,564
2,224¹
17,690
18,335
(1,060)
(1,251)
Cash and cash equivalents
€ mn
As of 31 December
Changes in liabilities arising from financing activities
€ mn
2018
(162)
Cash and cash equivalents reclassified to assets of disposal groups held for sale and disposed of in 2018
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
Change in cash and cash equivalents
897,567
901,300
1 For 2018, the amounts include the impact from changes related to fixed index annuities. For further information, please refer to note 2, chapter reserves for insurance and investment contracts, paragraph aggregate policy reserves.
2_Include mainly derivative financial instruments.
222
92
Annual Report 2018 - Allianz Group
CONSOLIDATED INCOME STATEMENTS
Consolidated income statements
€ mn
Gross premiums written
Ceded premiums written
Change in unearned premiums (net)
Premiums earned (net)
Interest and similar income
Income from financial assets and liabilities carried at fair value through income (net)¹
Realized gains/losses (net)
Fee and commission income
Other income
Total income
Claims and insurance benefits incurred (gross)
Claims and insurance benefits incurred (ceded)
Claims and insurance benefits incurred (net)
Change in reserves for insurance and investment contracts (net)¹
Total liabilities and equity
68,602
63,679
19
513,687
16
115,361
119,141
32
4,080
4,906
17
40,232
39,639
3
Interest expenses
62
18
9,596
18
13,475
13,295
833,888
832,698
61,232
65,553
2,447
3,049
13,662
Loan loss provisions
Impairments of investments (net)
Investment expenses
23
6,096
6,546
24
11,534
10,937
24
36
107,442
109,590
(54,459)
(1,204)
(56,644)
5,427
25
(52,157)
(51,218)
26
(9,684)
(14,427)
27
(1,035)
(1,149)
(2)
2,302
529,687
(3,301)
21,616
Acquisition and administrative expenses (net)¹
Fee and commission expenses
Amortization of intangible assets
Restructuring charges
Other expenses
Total expenses
Income before income taxes¹
Income taxes
Net income
D_Consolidated Financial Statements
Note
21,848
2018
77,824
77,345
(5,141)
(4,912)
(1,211)
(1,007)
22222
20
71,472
71,427
21
2017
15
73,292
73,054
91
D_Consolidated Financial Statements
CONSOLIDATED BALANCE SHEETS
Consolidated balance sheets
€ mn
As of 31 December
ASSETS
Cash and cash equivalents
Financial assets carried at fair value through income
Investments
Loans and advances to banks and customers
Annual Report 2018 - Allianz Group
Financial assets for unit-linked contracts
Deferred acquisition costs¹
Deferred tax assets
Other assets
Non-current assets and assets of disposal groups classified as held for sale
Intangible assets
Total assets
LIABILITIES AND EQUITY
Financial liabilities carried at fair value through income¹2
Liabilities to banks and customers
Unearned premiums
Reserves for loss and loss adjustment expenses
Reinsurance assets
Reserves for insurance and investment contracts¹
D
Annual Report 2018 - Allianz Group
Cash and cash equivalents at beginning of period
CONTROLS OVER FINANCIAL REPORTING
C_Group Management Report
The following information is provided pursuant to §289(4) and
§315 (4) of the German Commercial Code ("Handelsgesetzbuch –
HGB").
In line with both our prudent approach to risk governance and
compliance with regulatory requirements, we have created a struc-
ture to identify and mitigate the risk of material errors in our
Consolidated Financial Statements (this also includes our market
value balance sheet and risk capital controls) ¹. Our system of internal
control over financial reporting (ICOFR) is regularly reviewed and
updated. ICOFR is split into an Entity-Level Control Assessment
Process (ELCA), IT General Controls (ITGC) and controls at process
levels. The ELCA framework contains controls to monitor the system
of governance effectiveness. In the ITGC framework we have
implemented, for example, controls for access right management
and for project and change management. We are in the process of
including the current ICOFR framework in an Integrated Risk and
Control System (IRCS). The IRCS is split into three main compo-
nents: Reporting Risk (currently ICOFR), Compliance Risk, and
Operational Risk (incl. IT Risks).
ACCOUNTING AND CONSOLIDATION PROCESSES
The accounting and consolidation processes we use to produce
Consolidated Financial Statements are based on a central consoli-
dation and reporting IT solution and local general ledger solutions.
The latter are largely harmonized throughout the Group, using
standardized processes, master data, posting logics, and interfaces
for data delivery to the Holding. Access rights to accounting systems
are managed according to strict authorization procedures.
Accounting rules for the classification, valuation, and disclosure
of all items in the balance sheet, the income statement, and notes
related to the annual and interim financial statements are defined
primarily in our Group accounting manual. Internal controls are em-
bedded in the accounting and consolidation processes to safeguard
the accuracy, completeness, and consistency of the information
provided in our financial statements.
INTERNAL CONTROL SYSTEM APPROACH
Our approach can be summarized as follows:
We use a top-down, risk-based approach to determine the ac-
counts and operating entities that should fall under the scope of
our system of internal control over financial reporting (as well
as IRCS). The methodology is described in our ICOFR manual
and the IRCS Guideline. During the scoping process, both materi-
ality and susceptibility to a misstatement are considered simulta-
neously. In addition to the quantitative calculation, we also con-
sider qualitative criteria - such as expected increase in business
volume - which are provided by different Group centers, Group
Audit, and external audit.
Then, our local entities identify risks that could lead to material
financial misstatements, including all relevant root causes (i.e.
human processing errors, fraud, system shortcomings, external
factors, etc.).
Preventive and detective key controls to address financial re-
porting risks have been put in place to reduce the likelihood and
impact of financial misstatements. If a potential risk materializes,
actions are taken to reduce the impact of the financial misstate-
ment. Given the strong dependence of financial reporting pro-
cesses on information technology systems, we also implement IT
controls.
CONSOLIDATED FINANCIAL STATEMENTS
Finally, we focus on ensuring that controls are appropriately
designed and effectively executed to mitigate risk. We have set
consistent documentation requirements across the Allianz Group
for elements such as processes, related key controls, and execu-
tion. We conduct an annual assessment of our control system to
maintain and continuously enhance its effectiveness. Group Audit
and local internal audit functions ensure that the overall quality
of our control system is subjected to regular control-testing, to
assure reasonable design and operating effectiveness. Internal
Audit does so through a comprehensive risk-based approach,
which assesses the key controls of the company's internal proce-
dures and processes, including local and group-internal controls
over financial reporting risks, from an integrated perspective.
Responsibility for ensuring the completeness, accuracy, and reliability
of our Consolidated Financial Statements rests with the Chairman of
the Allianz SE Board of Management, as well as the board member
responsible for Finance, Controlling, and Risk, supported by Group
center functions, the Group Disclosure Committee, and operating
entities.
The Group Disclosure Committee ensures that these board
members are made aware of all material information that could
affect our disclosures, and assesses the completeness and accuracy
of the information provided in the quarterly statements, half-yearly,
and annual financial reports as well as in the Solvency II qualitative
reports². In 2018, the Group Disclosure Committee met on a quarterly
basis before the quarterly statements and financial reports were
issued. An additional meeting was held prior to issuance of the
Solvency II qualitative reports.
Subsidiaries within the scope of our control system are individually
responsible for adhering to the Group's internal governance and
control policy and for creating local Disclosure Committees that are
similar to the Group-level committee. The entities' CEOs and CFOs
provide periodic sign-offs to the management of Allianz SE, certifying
the effectiveness of their local systems of internal control as well as
the completeness, accuracy, and reliability of financial data reported
to the Holding.
1_For further information on our risk management system, please refer to the Risk and Opportunity Report.
2_Solvency Financial Condition Report and Regular Supervisory Report.
Annual Report 2018 - Allianz Group
89
C_Group Management Report
This page intentionally left blank.
90
90
GOVERNANCE
(25)
Financial liabilities for unit-linked contracts
Other liabilities
23,184
32
959
931
10
39,209
37,731
3
125
14,329
11
27,709
13,767
897,567
901,300
11,626
11,291
12
14,222
12,746
13
22,891
21,442
14
13,262
Deferred tax liabilities
9
16,400
Liabilities of disposal groups classified as held for sale
Certificated liabilities
Subordinated liabilities
Total liabilities
Shareholders' equity
Non-controlling interests
Total equity
Note
2018
2017
17,234
16,375
17,119
7,611
8,177
6
550,923
546,828
7
108,270
104,224
115,361
119,141
8
5
28
9,199
(1,160)
11,830
67,083
3,052
6,820
(1,973)
323
5,170
393
70,135
5,563
41
41
(762)
41
(3,340)
(13)
21
(3,331)
(145)
(3,476)
Dividends paid
(3,410)
(3,410)
(251)
(3,661)
Transactions between equity holders²,3
Balance as of 31 December 2017
27,087
Total equity
2,507
393
5,170
94
24
Annual Report 2018 - Allianz Group
Consolidated statements of changes in equity
€ mn
Balance as of 1 January 2017
Total comprehensive income¹
Paid-in capital
Treasury shares
28,928
Foreign
currency
Unrealized
Retained
Paid-in capital
earnings
translation
adjustments
gains and
losses (net)
Share-
holders'
equity
Non-
controlling
interests
D_Consolidated Financial Statements
153
28,928
(2,749)
(245)
(3,673)
27,967
(2,607)
6,945
61,232
2,447
63,679
1_Total comprehensive income in shareholders' equity for the year ended 31 December 2018 comprises net income attributable to shareholders of € 7.462 mn (2017: € 6,803 mn).
2 Includes income taxes within retained earnings.
(3,152)
4_In the second quarter of 2018, a dividend of € 8.00 (2017: € 7.60) per qualifying share was paid to the shareholders.
(3,428)
Annual Report 2018 - Allianz Group
90
96
D_Consolidated Financial Statements
CONSOLIDATED STATEMENTS OF CASH FLOWS
Consolidated statements of cash flows
€ mn
SUMMARY
Net cash flow provided by operating activities
Net cash flow used in investing activities
Net cash flow used in financing activities
Effect of exchange rate changes on cash and cash equivalents
95
27,199
(3,428)
(510)
12,175
65,553
3,049
68,602
Total comprehensive income¹
7,592
162
(5,247)
2,507
153
2,661
(3,942)
Paid-in capital
Transactions between equity holders²,3
Dividends paid
Balance as of 31 December 2018
28,928
32
32
32
(3,428)
(21)
17
(3,432)
Treasury shares
5,563
3_For further information regarding the share buy-back program 2018, please refer to note 19.
(1,645)
Diluted earnings per share (€)
241
7,462
6,803
༄༔
404
40
17.43
15.24
40
17.30
Basic earnings per share (€)
15.23
Annual Report 2018 - Allianz Group
93
D_Consolidated Financial Statements
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Consolidated statements of comprehensive income
€ mn
Net income
Other comprehensive income
Items that may be reclassified to profit or loss in future periods
Foreign currency translation adjustments
Reclassifications to net income
1 For 2018, the amounts include the impact from changes related to fixed index annuities. For further information, please refer to note 2, chapter reserves for insurance and investment contracts, paragraph aggregate policy reserves.
Changes arising during the year
Shareholders
Net income attributable to:
2,661
29
(1,333)
(1,269)
30
(24,600)
(25,702)
31
(3,857)
(375)
(154)
Non-controlling interests
(398)
(6)
(5)
(97,043)
(99,442)
10,399
10,148
32
(2,696)
(2,941)
7,703
7,207
(477)
Subtotal
(4,302)
Reclassifications to net income
(2,035)
(377)
(986)
(4,950)
1,358
(5,327)
373
(14)
(55)
8
31
167
(6)
(79)
(78)
(79)
(78)
(124)
(124)
19
326
100
Available-for-sale investments
(5,043)
(24)
(2,036)
19
1
167
Cash flow hedges
Reclassifications to net income
Subtotal
Changes arising during the year
Share of other comprehensive income of associates and joint ventures
Reclassifications to net income
Changes arising during the year
Subtotal
Miscellaneous
Changes arising during the year
Subtotal
Changes arising during the year
Subtotal
Items that may never be reclassified to profit or loss
2017
For further information on the income taxes associated with different
components of other comprehensive income, please see note 32.
Shareholders
Non-controlling interests
2018
7,703
Total comprehensive income
Total other comprehensive income
Changes in actuarial gains and losses on defined benefit plans
Total comprehensive income attributable to:
7,207
81,444
Covered bonds
17,234
(365)
6,268
(1,873)
208,133
Government and
government agency
bonds
203
€ mn
Cash and cash
equivalents
period
Fair value
Fair value
change during
the reporting
period
Fair value
All other financial assets
Financial assets that meet the
SPPI criterion¹
(1,630)
As of 31 December 2018
Debt securities
Fair value
change during
the reporting
(112)
(86)
(4,345)
53,599
Financial assets under IFRS 9 classification rules
(787)
36,537
(12,578)
556,976
377
7,092
208
29,151
Other debt securities
Subtotal
5,175
(530)
19,036
MBS/ABS
(601)
15,502
(8,753)
219,212
Corporate bonds
2,500
The following table provides an overview of the fair values as of
31 December 2018 and the amounts of change in the fair values
during the reporting period separately for financial assets that meet
the SPPI criterion (i.e. financial assets with contractual terms that give
rise on specified dates to cash flows that are solely payments of
principal and interest (SPPI) on the principal amount outstanding,
excluding any financial asset that meets the definition of held for
trading in IFRS 9, or that is managed and whose performance is
evaluated on a fair value basis) and all other financial assets:
Based on the Allianz Group's detailed assessment, only a few
differences in presentation and timing of revenue recognition were
identified. The impacts that the Allianz Group identified primarily
relate to principal versus agent considerations (i.e. gross-up) and the
accounting treatment of certain asset management related upfront
distribution costs which under IFRS 15 can no longer be capitalized.
As of 31 December 2015, the Allianz Group's total carrying
amount of liabilities connected with insurance amounted to € 722 bn,
which represented more than 90% of its total liabilities of € 783 bn.
Thereof, non-derivative investment contract liabilities measured at
IFRS 15, Revenue from Contracts with Customers
PRONOUNCEMENTS
RECENTLY ADOPTED ACCOUNTING
NEW ACCOUNTING PRONOUNCEMENTS
Changes in deferred tax assets and liabilities are generally
recognized through profit and loss in the consolidated income
statement, except for changes recognized directly in equity.
Further explanations are given in note 32.
The analysis and forecasting required in this process are per-
formed for individual jurisdictions by qualified local tax and financial
professionals. Given the potential significance surrounding the under-
lying estimates and assumptions, group-wide policies and procedures
have been designed to ensure consistency and reliability around the
recoverability assessment process. Forecast operating results are
based upon approved business plans, which are themselves subject
to a well-defined process of control. As a matter of policy, especially
strong evidence supporting the recognition of deferred tax assets is
required if an entity has suffered a loss in either the current or the
preceding period. Recognition and recoverability of all significant
deferred tax assets are reviewed by tax professionals at Group level
and by the Allianz Group Tax Committee.
Deferred tax assets or liabilities are calculated for temporary
differences between the tax bases and the financial statement carrying
amounts, including differences from consolidation, unused tax loss
carry-forwards, and unused tax credits. Measurement is based on
enacted or substantively enacted tax rates and tax rules. Assessments
as to the recoverability of deferred tax assets require the use of
judgment regarding assumptions related to estimated future taxable
profits. This includes the character and amounts of taxable future
profits, the periods in which those profits are expected to occur, and
the availability of tax planning opportunities. The Allianz Group
recognizes a valuation allowance for deferred tax assets when it is
unlikely that a corresponding amount of future taxable profit will be
available against which the deductible temporary differences, tax
loss carry forwards and tax credits can be utilized.
INCOME TAXES
CLAIMS AND INSURANCE BENEFITS INCURRED
These expenses consist of claims and insurance benefits incurred
during the period, including benefit claims in excess of policy account
balances and interest credited to policy account balances. Further-
more, it includes claims handling costs directly related to the pro-
cessing and settlement of claims. Reinsurance recoveries are deducted
from claims and insurance benefits.
In May 2014, the IASB issued IFRS 15, Revenue from Contracts with
Customers. IFRS 15 supersedes IAS 18, IAS 11 and a number of reve-
nue-related interpretations. The Allianz Group adopted IFRS 15 using
the cumulative effect method on the required effective date. As a
result, the Allianz Group did not apply the requirements of IFRS 15 to
the comparative period presented.
D_Consolidated Financial Statements
Annual Report 2018 - Allianz Group
Fee and commission income primarily consists of asset management
fees which are recognized when the service is provided. For those fees,
the service is considered to be provided periodically. Performance fees
may not be recognized as fee income before the respective bench-
mark period is completed, because, before its completion, the obliga-
tion to pay the fee is conditional, the fund performance is regularly
not reliably estimable, and related service is not fully performed. In
any case, performance-related fees from alternative investment
products (carried interest) are not recognized as revenue prior to the
date of the official declaration of distribution by the fund. The trans-
action price for asset management services is determined by the
fees contractually agreed.
FEE AND COMMISSION INCOME
INCOME FROM FINANCIAL ASSETS AND LIABILITIES
CARRIED AT FAIR VALUE THROUGH INCOME (NET)
Income from financial assets and liabilities carried at fair value
through income (net) includes all investment income as well as real-
ized and unrealized gains and losses from financial assets and liabili-
ties carried at fair value through income. In addition, commissions
attributable to trading operations and related interest expenses as
well as refinancing and transaction costs are included in this line item.
Foreign currency gains and losses on monetary items are also report-
ed within income from financial assets and liabilities carried at fair
value through income (net).
Interest income and interest expenses are recognized on an accrual
basis using the effective interest method. This line item also includes
dividends from available-for-sale equity securities as well as income
from investments in associates and joint ventures. Dividends are
recognized in income when the right to receive the dividend is estab-
lished. The share of earnings from investments in associates and joint
ventures represents the share of net income from entities accounted
for using the equity method.
INTEREST AND SIMILAR INCOME AND INTEREST
EXPENSES
written.
115,361
Premiums ceded for reinsurance are deducted from premiums
105
Under IFRS 15, revenue is recognized when (or as) the
Allianz Group satisfies a performance obligation by transferring a
service to a customer. Furthermore, revenue is recognized for these
contracts to the extent that it is highly probable that a significant
reversal in the amount of cumulative revenue will not occur. The
guidance also changes the accounting for certain contract costs and
revises the criteria for determining if an entity is acting as a principal
or agent in certain arrangements.
The adoption of IFRS 15 led to an increase of fee and commis-
sion income and fee and commission expenses of € 387 mn (i.e. gross-
up effect) and a decrease of retained earnings as of 1 January 2018
by € 20 mn, due to the reversal of capitalized upfront distribution
costs. Other than that, the adoption of IFRS 15 had no impact on the
Allianz Group's financial position and the financial results.
Other adopted accounting pronouncements
In order to qualify for the temporary exemption, an entity has to
prove that its activities are predominantly connected to insurance as
of 31 December 2015. Under the amended IFRS 4, this condition is
met if the insurer carries significant liabilities arising from contracts
within the scope of IFRS 4. Significant insurance-related liabilities are
given, among others, if the percentage of the total carrying amount
of liabilities connected with insurance relative to the total carrying
amount of all liabilities is greater than 90%. A reassessment at a
subsequent annual reporting date is required if, and only if, there was
a change in the entity's activities during the annual period that ended
on that date.
Given the strong interrelation between the measurement of
direct participating insurance contracts and the underlying assets
held, the Allianz Group has decided to use the option to defer the
full implementation of IFRS 9 until IFRS 17 becomes effective.
The amendments to IFRS 4, Applying IFRS 9 Financial Instru-
ments with IFRS 4 Insurance Contracts, issued in September 2016,
allow entities that issue insurance contracts within the scope of IFRS 4
to defer the implementation of IFRS 9 until 1 January 2021 under
certain circumstances. It is to be noted that the IASB has recently
proposed to defer the IFRS 9 effective date for such entities in scope
by another year until 2022.
It can be assumed that the main impact from IFRS 9 will arise
from the new classification rules leading to more financial instru-
ments being measured at fair value through income as well as the
new impairment model. Interdependencies with IFRS 17 will need to
be considered to assess the ultimate combined impact of both
standards.
IFRS 9, Financial instruments, issued by the IASB in July 2014, fully
replaces IAS 39 and provides a new approach on how to classify
financial instruments based on their cash flow characteristics and the
business model under which they are managed. Furthermore, the
standard introduces a new forward-looking impairment model for
debt instruments and provides new rules for hedge accounting.
IFRS 9, Financial Instruments
The Allianz Group is currently assessing the impact of the
application of IFRS 17. As of the date of the publication of these
consolidated financial statements, it is not practicable to quantify
the effect on the Allianz Group consolidated financial statements.
For long-duration life insurance contracts, IFRS 17 is expected to
have a significant impact on actuarial modeling, as more granular
cash flow projections and regular updates of all assumptions will be
required, either resulting in profit or loss or impacting the "contractual
service margin", a separate component of the insurance liability
representing unearned profits from in-force contracts. Further, IFRS 17
introduces different measurement approaches for the insurance
contract liabilities, reflecting a different extent of policyholder partic-
ipation in investment or insurance entity performance.
tion features. For non-life insurance contracts, IFRS 17 introduces
mandatory discounting of loss reserves as well as a risk adjustment
for non-financial risk. Further, IFRS 17 will change the presentation of
insurance contract revenue, a gross written premium will no longer be
presented in the statement of comprehensive income.
D_Consolidated Financial Statements
Annual Report 2018 - Allianz Group
106
In May 2017, the IASB issued IFRS 17, Insurance Contracts. The IASB
tentatively decided to defer the mandatory effective date of IFRS 17
by one year in their November 2018 Board meeting, so that IFRS 17
should be applied after 1 January 2022 (retrospective application).
IFRS 17 provides comprehensive guidance on accounting for insur-
ance contracts and investment contracts with discretionary participa-
IFRS 17, Insurance Contracts
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
These changes had no material impact on the Allianz Group's finan-
cial results or financial position.
ASCG (DRSC) Interpretation 4 (IFRS) Accounting for Interest and
Penalties Related to Income Taxes under IFRSS.
IFRIC 22, Foreign Currency Transactions and Advance Considera-
tion, and
IAS 40, Transfers of Investment Property,
IFRS 2, Classification and Measurement of Share-based Payment
Transactions,
The following amendments and revisions to existing standards
became effective for the Allianz Group's consolidated financial
statements as of 1 January 2018:
fair value through income applying IAS 39 amounted to € 107 bn,
mostly consisting of financial liabilities for unit-linked contracts. Other
insurance-related liabilities amounted to € 40 bn and included mainly
other liabilities (e.g. payables as well as employee-related liabilities)
as well as subordinated liabilities and financial liabilities carried at
fair value through income related to certain derivatives. No change in
the activities of the Allianz Group occurred subsequently that would
have required a reassessment.
(5,468)
33,053
182
205,521
17,234
17,848
3,265
107
6,134
25
957
17,234
74,581
922
6,737
7,873
6,105
250
106,354
1,750
Total
Not rated
Non-investment grade
141
218,296
19,036
27,197
Revenues for universal life-type and investment contracts repre-
sent charges assessed against the policyholders' account balances
for front-end loads, net of the change in unearned revenue liabilities
and cost of insurance, surrenders, and policy administration, and are
included within premiums earned (net).
Annual Report 2018 - Allianz Group
108
The Allianz Group adopted IFRS 16 using the modified retro-
spective approach on the required effective date (i.e.
1 January 2019). As a result, the Allianz Group will not apply the
The financial impacts from implementing IFRS 16 will not be signifi-
cant for the Allianz Group. IFRS 16 will lead to the recognition of new
assets and liabilities for the previously classified operating leases in
the amount of approximately € 2.5 bn. As of 31 December 2018, the
Allianz Group's future minimum lease payments under
cancellable operating leases amounted to € 2.4 bn on an undis-
counted basis (see note 37). In addition, IFRS 16 replaces the straight-
line operating lease expenses with a depreciation charge for right-of-
use assets and interest expenses on lease liabilities. In aggregate,
there will be an insignificant negative impact on net income in the
first year of application due to the front-end loading of the interest
expenses.
non-
Use hindsight when determining the lease term if the contract
contains options to extend or terminate the lease.
Exclude initial direct costs from measuring the right-of-use asset
at the date of initial application
Adjust the right-of-use assets by the amount of IAS 37 onerous
contract provision immediately before the date of initial applica-
tion, as an alternative to an impairment review
Apply a single discount rate to a portfolio of leases with similar
characteristics
-
liabilities for most of their leases with the following exceptions: The
Allianz Group has elected not to recognize right-of-use assets and
lease liabilities for short-term leases with a lease term of 12 months
or less, leases of low-value assets (e.g. tablets, personal computers,
telephones, office furniture, copy and fax machines), and car leases.
The lease payments associated with such short-term and low-value
leases will be recognized as an expense on a straight-line basis over
the lease term. At transition, lease liabilities will be measured at the
present value of the remaining lease payments, discounted at the
Allianz Group's incremental borrowing rate as at 1 January 2019.
Right-of-use assets will be measured at an amount equal to the lease
liability adjusted by the amount of any prepaid or accrued lease
payments. In addition to the short-term as well as low-value lease
expedients, the Allianz Group uses the following practical expedients
when applying IFRS 16 to leases previously classified as operating
leases under IAS 17:
As a lessee, the Allianz Group previously classified leases as
operating or finance leases based on its assessment of whether the
lease transferred significantly all of the risks and rewards incidental
to ownership of the underlying asset to the Allianz Group. Under
IFRS 16, the Allianz Group will recognize right-of-use assets and lease
The Allianz Group has completed a detailed assessment of the
impact on its consolidated financial statements. On transition to
IFRS 16, the Allianz Group elects to apply the practical expedient to
grandfather the assessment of which transactions are leases; in other
words, it applies IFRS 16 only to contracts that were previously identi-
fied as leases. Contracts that were not identified as leases under
IAS 17 and IFRIC 4 were not reassessed for being or containing a
lease. Therefore, the definition of a lease under IFRS 16 will be
applied only to contracts entered into or modified on or after
1 January 2019.
In January 2016, the IASB issued IFRS 16, Leases, which supersedes
IAS 17, IFRIC 4, SIC-15, and SIC-27. IFRS 16 introduces a single, on-
balance sheet lease accounting model for lessees. A lessee recognizes
a right-of-use asset representing its right to use the underlying asset
and a lease liability representing its obligation to make lease pay-
ments. There are recognition exemptions for short-term leases and
leases of low-value items. Lessor accounting remains similar to the
current standard - i.e. lessors continue to classify leases as finance or
operating leases.
IFRS 16, Leases
The Allianz Group's investments in associates and joint ventures
that are insurance entities also apply the temporary exemption of
applying IFRS 9 to the extent they qualify. The entities underlying all
other investments in associates and joint ventures already adopted
IFRS 9 as of 1 January 2018. The impact of adopting or deferring the
application of IFRS 9 for the investments in associates or joint ven-
tures is not material for the Allianz Group.
The publicly available IFRS 9 information disclosed by some sub-
sidiaries that already apply IFRS 9 is not material from the
Allianz Group's perspective. Furthermore, the vast majority of the
financial instruments of these subsidiaries are financial assets for unit-
linked contracts that are recorded at fair value through income under
IAS 39 as well as under IFRS 9.
The fair values of financial assets included in the table above that are
non-investment grade, and thus do not have low credit risk as of
31 December 2018, approximately equal the respective carrying
amounts. The same also applies to non-rated financial assets.
1 Excluding any financial asset that meets the definition of held for trading in IFRS 9, or that is managed and whose performance is evaluated on a fair value basis.
17,848
BBB
3,218
8,746
66,889
Investment grade
As of 31 December 2018
Government
and
€ mn
Carrying amounts of financial assets that meet the SPPI¹ criterion by rating
D_Consolidated Financial Statements
107
Annual Report 2018 - Allianz Group
The following table provides information about the credit risk
exposures for financial assets with contractual terms that meet the
SPPI criterion. It includes the carrying amounts applying IAS 39 (in the
case of financial assets measured at amortized cost before adjusting
for any impairment allowances):
Cash and cash
equivalents
The financial assets for unit-linked contracts are exclusively held on
behalf and for the benefit of unit-linked policyholders. To ensure
consistency with the corresponding accounting treatment for the unit-
linked contracts, these investments are designated at fair value
through income under current accounting rules. This treatment is
going to be maintained under the future IFRS 9 regime accordingly.
(10,418)
208,715
(12,375)
17,848
592,058
Total
Other
Derivative financial
instruments
Financial assets for unit-
linked contracts
Equity securities
1 Excluding any financial asset that meets the definition of held for trading in IFRS 9, or that is managed and whose
performance is evaluated on a fair value basis.
government
Covered
Corporate
6,250
28,125
7,721
3,092
27,646
18,187
91,752
438
14,720
4,536
48,369
43,761
A
AA
AAA
Other
Other debt
securities
MBS/ABS
bonds
bonds
agency bonds
726
Premiums for short-duration insurance contracts are recognized as
revenues over the period of the contract in proportion to the amount
of insurance protection provided. Premiums for long-duration insur-
ance contracts are recognized as earned when due.
Current income taxes are calculated based on the respective local
taxable income and local tax rules for the period. In addition, current
income taxes presented for the period include adjustments for uncer-
tain tax payments or tax refunds for periods not yet finally assessed,
excluding interest expenses and penalties on the underpayment of
taxes. In the event that amounts included in the tax return are con-
sidered unlikely to be accepted by the tax authorities (uncertain tax
positions), a provision for income taxes is recognized. The amount is
based on the best possible assessment of the tax payment expected.
Tax refund claims from uncertain tax positions are recognized when it
is probable that they can be realized.
Unrealized gains and losses (net) include unrealized gains and
losses from available-for-sale investments and from derivative finan-
cial instruments that meet the criteria for cash flow hedge accounting.
Non-controlling interests represent equity in subsidiaries, not
attributable directly or indirectly, to Allianz SE as parent.
For details on the accounting for investments in associates and joint
ventures please see the section principles of consolidation.
Investments in associates and joint ventures
Funds held by others under reinsurance contracts assumed
Funds held by others under reinsurance contracts assumed relate to
cash deposits to which the Allianz Group is entitled, but which the
ceding insurer retains as collateral for future obligations of the
Allianz Group. The cash deposits are recorded at the amount due on
repayment, less any impairment for balances that are deemed not to
be recoverable.
Held-to-maturity investments are debt securities with fixed or deter-
minable payments and fixed maturities for which the Allianz Group
has the positive intent and ability to hold to maturity. These assets are
initially measured at fair value plus any directly attributable transac-
tion costs. Subsequent to initial recognition, they are measured at
amortized cost using the effective interest method.
Held-to-maturity investments
Available-for-sale investments comprise debt and equity instruments
that are designated as available for sale or do not fall into the other
measurement categories. These investments are measured at fair
value through other comprehensive income. When an investment is
derecognized or determined to be impaired, the cumulative gain or
loss previously recorded in other comprehensive income is transferred
and recognized in the consolidated income statement. Realized
gains and losses on those instruments are generally determined by
applying the average cost method at the subsidiary level.
Available-for-sale investments
INVESTMENTS
Financial assets and liabilities carried at fair value through income
include financial assets and liabilities held for trading as well as
financial assets and liabilities designated at fair value through
income. While the former category includes trading instruments and
financial derivatives, the latter category is mainly designated at fair
value to avoid accounting mismatches.
Real estate held for investment
FINANCIAL ASSETS AND LIABILITIES CARRIED AT FAIR
VALUE THROUGH INCOME
CASH AND CASH EQUIVALENTS
For further information on derivatives, please refer to note 33.
liabilities. Freestanding derivatives are included in the line item finan-
cial assets or liabilities held for trading.
D_Consolidated Financial Statements
Annual Report 2018 - Allianz Group
100
Derivative financial instruments designated in hedge accounting
relationships are included in the line items Other assets and Other
For derivative financial instruments used in hedge transactions that
meet the criteria for hedge accounting, the Allianz Group designates
the derivative as a hedging instrument in a fair value hedge, cash
flow hedge, or hedge of a net investment in a foreign operation. The
Allianz Group documents the hedge relationship, as well as its risk
management objective and strategy for entering into the hedge
transaction. The Allianz Group assesses, both at the hedge's inception
and on an ongoing basis, whether the hedging instruments used are
highly effective in offsetting changes in fair values or cash flows of the
hedged items.
Hedge accounting
Cash and cash equivalents include balances with banks payable on
demand, balances with central banks, cash on hand, treasury bills to
the extent they are not included in financial assets held for trading,
and checks and bills of exchange that are eligible for refinancing at
central banks, subject to a maximum term of three months from the
date of acquisition.
Real estate held for investment is carried at cost less accumulated
depreciation and impairments. Real estate held for investment is
depreciated on a straight-line basis over its useful life, with a maxi-
mum of 50 years, and regularly tested for impairment.
Fixed assets of renewable energy investments
These assets are accounted for as property, plant and equipment in
line with IAS 16. Hence, they are carried at cost less accumulated
depreciation and impairments.
LOANS AND ADVANCES TO BANKS AND CUSTOMERS
Loans and advances are non-derivative financial assets with fixed or
determinable payments that are not quoted in an active market and
which are not classified as financial assets held for trading, designat-
ed at fair value through income, or designated as available for sale.
These assets are initially measured at fair value plus any directly
attributable transaction costs. Subsequent to initial recognition, they
are measured at amortized cost using the effective interest method.
Customer relationships
Acquired business portfolios
6-13
13-42
10-25
Long-term distribution agreements
Useful lives
Estimated useful lives (in years) and amortization methods
reserves.
Acquisition costs for unit-linked investment contracts are
deferred in accordance with IFRS 15 if the costs are incremental. For
non-unit-linked investment contracts accounted for under IAS 39 at
amortized cost, acquisition costs that meet the definition of transac-
tion costs under IAS 39 are considered in the aggregate policy
D_Consolidated Financial Statements
101
Annual Report 2018 - Allianz Group
For short-duration, traditional long-duration, and limited-
payment insurance contracts, DAC is amortized in proportion to
premium revenue recognized. For universal life-type and participat-
ing life insurance contracts as well as investment contracts with dis-
cretionary participation features, DAC is generally amortized over the
life of a book of contracts based on estimated gross profits (EGP) or
estimated gross margins (EGM), respectively.
Costs that vary with and are directly related to the acquisition and
renewal of insurance contracts and investment contracts with discre-
tionary participation features are deferred by recognizing a DAC
asset. At inception, DAC is tested to ensure that it is recoverable over
the life of the contracts. Subsequently, loss recognition tests at the
end of each reporting period ensure that the DAC is covered by future
profits.
Deferred acquisition costs (DAC)
DEFERRED ACQUISITION COSTS
Assets and liabilities related to reinsurance are reported on a gross
basis. Reinsurance assets include balances expected to be recovered
from reinsurance companies. The amount of reserves ceded to
re-insurers is estimated in a manner consistent with the claim liability
associated with the reinsured risks. To the extent that the assuming
reinsurers are unable to meet their obligations, the respective ceding
insurers of the Allianz Group remain liable to its policyholders for the
portion reinsured. Consequently, allowances are made for receivables
on reinsurance contracts which are deemed uncollectible.
REINSURANCE ASSETS
Financial assets for unit-linked contracts are recorded at fair value,
with changes in fair value recognized in the income statement
together with the offsetting changes in fair value of the correspond-
ing financial liabilities for unit-linked contracts. They are included in
the line item income from financial assets and liabilities carried at fair
value through income (net).
FINANCIAL ASSETS AND LIABILITIES FOR UNIT-
LINKED CONTRACTS
Reversals of impairments of available-for-sale equity securities
are not recorded in the income statement but in other comprehensive
income and recycled upon derecognition.
Amortization method
if there is objective evidence that the cost may not be recovered. The
Allianz Group's policy considers a decline to be significant if the fair
value is below the weighted average cost by more than 20%.
A decline is considered to be prolonged if the fair value is below the
weighted average cost for a period of more than nine consecutive
months. If an available-for-sale equity security is impaired, any further
declines in the fair value at subsequent reporting dates are recog-
nized as impairments.
For held-to-maturity investments and loans, the impairment loss
is measured as the difference between the amortized cost and the
expected future cash flows using the original effective interest rate.
Recognition and derecognition
FINANCIAL INSTRUMENTS
For the consolidated financial statements, the results and financial
position of each of the Allianz Group's subsidiaries are expressed in
Euro, the presentation currency of the Allianz Group. Assets and liabil-
ities of subsidiaries not reporting in Euro are translated at the closing
rate on the balance sheet date; income and expenses are translated
at the quarterly average exchange rate. Any foreign currency transla-
tion differences, including those arising from the equity method, are
recorded in other comprehensive income.
currency
Translation from the functional currency to the presentation
from foreign currency transactions are reported in income from finan-
cial assets and liabilities carried at fair value through income (net),
except when the gain or loss on a non-monetary item measured at
fair value is recognized in other comprehensive income. In this case,
any foreign exchange component of that gain or loss is also recog-
nized in other comprehensive income.
The individual financial statements of each of the Allianz Group's
subsidiaries are prepared in the currency prevailing in the primary
economic environment where the subsidiary conducts its ordinary
activities (its functional currency). Transactions recorded in currencies
other than the functional currency (foreign currencies) are recorded
at the exchange rate prevailing on the date of the transaction. At the
balance sheet date, monetary assets and liabilities denominated in
foreign currencies are translated into the functional currency using
the closing exchange rate. While non-monetary items denominated
in foreign currencies and measured at historical cost are translated at
historical rates, non-monetary items measured at fair value are trans-
lated using the closing rate. Foreign currency gains and losses arising
Translation from any foreign currency to the functional
currency
FOREIGN CURRENCY TRANSLATION
Financial assets are generally recognized and derecognized on the
trade date, i.e. when the Allianz Group commits to purchase or sell
securities.
For further information, please refer to note 43.
Pursuant to IFRS 11, investments in joint arrangements have to
be classified as either joint operations or joint ventures, depending on
the contractual rights and obligations of each investor. The
Allianz Group has assessed the nature of all its joint arrangements
and determined them to be joint ventures. Those are generally
accounted for using the equity method.
For certain investment funds in which the Allianz Group holds a
stake of above 20%, management has assessed that the
Allianz Group has no significant influence because it is not represent-
ed in the governing bodies of these investment funds or the investment
activities are largely predetermined.
Although the Allianz Group's share in some companies is below
20%, management has assessed that the Allianz Group has signifi-
cant influence over these companies because it is represented in the
governing bodies that decide on the relevant activities of these com-
panies.
Associates are entities over which the Allianz Group can exercise
significant influence. In general, if the Allianz Group holds 20% or
more of the voting power in an investee but does not control the
investee, it is assumed to have significant influence. Investments in
associates are generally accounted for using the equity method.
Associates and joint arrangements
Where newly acquired subsidiaries are subject to business combina-
tion accounting, the provisions of IFRS 3 are applied. Non-controlling
interests in the acquiree that are present ownership interests and
entitle their holders to a proportionate share of the acquiree's net
assets in the event of liquidation can be measured either at their fair
value at the acquisition date or at the non-controlling interest's
proportionate share of the acquiree's identifiable net assets. This
option is exercised on a case-by-case basis.
Business combinations and measurement of non-controlling
interests
D_Consolidated Financial Statements
PREMIUMS
The Allianz Group accounts for investments in associates and
joint arrangements with a time lag of no more than three months.
Income from investments in associates and joint arrangements
excluding distributions - is included in interest and similar income.
Accounting policies of associates and joint arrangements are gener-
ally adjusted where necessary to ensure consistency with the accounting
policies adopted by the Allianz Group.
A financial asset is derecognized when the contractual rights to
the cash flows from the financial asset expire or the Allianz Group
transfers the asset and substantially all of the risks and rewards of
ownership. A financial liability is derecognized when it is extinguished.
Offsetting
Financial assets and liabilities are offset and the net amount is pre-
sented in the balance sheet only when there is a legally enforceable
right to offset the recognized amounts and when there is an intention
to either settle on a net basis or to realize the asset and settle the
liability simultaneously.
Once impairment is triggered for an available-for-sale debt in-
strument, the cumulative loss recognized in other comprehensive
income is reclassified to profit or loss. The cumulative loss corre-
sponds to the difference between amortized cost and the current fair
value of the investment. Further declines in fair value are recognized
in other comprehensive income unless there is further objective evi-
dence that such declines are due to a credit-related loss event. If in
subsequent periods the impairment loss is reversed, the reversal is
measured as the lesser of the full original impairment loss previously
recognized in the income statement and the subsequent increase in
fair value.
The evaluation of whether a financial debt instrument is impaired
requires analysis of the underlying credit risk/quality of the relevant
issuer and involves significant management judgment. In particular,
current publicly available information with regard to the issuer and
the particular security is considered relating to factors including, but
not limited to, evidence of significant financial difficulty of the issuer
and breach of contractual obligations of the security, such as a
default or delinquency on interest or principal payments. The
Allianz Group also considers other factors which could provide objec-
tive evidence of a loss event, including the probability of bankruptcy
and the lack of an active market due to financial difficulty. The pres-
ence of either a decline in fair value below amortized cost or the
downgrade of an issuer's credit rating does not in itself represent
objective evidence of a loss event, but may represent objective evi-
dence of a loss event when considered with other available infor-
mation.
Impairments
For further information, please refer to note 34.
The degree of judgment used in measuring the fair value of
financial instruments closely correlates with the level of non-market
observable inputs. The Allianz Group uses a maximum of observable
inputs and a minimum of non-market observable inputs when meas-
uring fair value. Observability of input parameters is influenced by
various factors such as type of the financial instrument, whether a
market is established for the particular instrument, specific transac-
tion characteristics, liquidity, and general market conditions. If the fair
value cannot be measured reliably, amortized cost is used as a proxy
for determining fair values.
Estimates and assumptions of fair values and hierarchies are
particularly significant when determining the fair value of financial
instruments for which at least one significant input is not based on
observable market data (classified as level 3 of the fair value hierar-
chy). The availability of market information is determined by the
relative trading levels of identical or similar instruments in the market,
with emphasis placed on information that represents actual market
activity or binding quotations from brokers or dealers.
Income approach: Conversion of future amounts such as cash
flows or income to a single current amount (present value tech-
nique).
Cost approach: Amount that would currently be required to
replace the service capacity of an asset (replacement cost).
Market approach: Prices and other relevant information gener-
ated by market transactions involving identical or comparable
assets or liabilities.
For fair value measurements categorized as level 2 and level 3,
the Allianz Group uses valuation techniques consistent with the three
widely used valuation techniques listed in IFRS 13:
Level 3 applies if not all input parameters are observable in the
market. Accordingly, the fair value is based on valuation techniques
using non-market observable inputs. Valuation techniques include
the discounted cash flow method, comparison to similar instruments
for which observable market prices exist and other valuation models.
Appropriate adjustments are made, for example, for credit risks.
Level 2 applies if the market for a financial instrument is not
active or when the fair value is determined by using valuation tech-
niques based on observable input parameters. Such market inputs
are observable substantially over the full term of the asset or liability
and include references to formerly quoted prices for identical instru-
ments from an active market, quoted prices for identical instruments
from an inactive market, quoted prices for similar instruments from
active markets, and quoted prices for similar instruments from inac-
tive markets. Market observable inputs also include interest rate yield
curves, volatilities, and foreign currency exchange rates.
The level 1 inputs of financial instruments traded in active mar-
kets are based on unadjusted quoted market prices or dealer price
quotations for identical assets or liabilities on the last exchange trading
day prior to or at the reporting date, if the latter is a trading day.
D_Consolidated Financial Statements
99
Annual Report 2018 - Allianz Group
Assets and liabilities measured or disclosed at fair value in the
consolidated financial statements are measured and classified in
accordance with the fair value hierarchy in IFRS 13, which categorizes
the inputs to valuation techniques used to measure fair value into
three levels.
The Allianz Group carries certain financial instruments at fair value
and discloses the fair value of all financial instruments. The fair value
of an asset or liability is defined as the price that would be received to
sell an asset, or paid to transfer a liability, in an orderly transaction
between market participants at the measurement date.
Measurement at fair value
The Allianz Group enters into securities lending transactions and
repurchase agreements. Cash received in the course of those transac-
tions is recognized together with a corresponding liability. Securities
received as collateral under lending transactions are not recognized,
and securities sold under repurchase agreements are not derecog-
nized, if risks and rewards have not been transferred. Securities borrow-
ing transactions generally require the Allianz Group to deposit cash with
the securities lender. Fees paid are reported as interest expenses.
Securities lending and repurchase agreements
An available-for-sale equity security is considered to be impaired
straight-line considering
contractual terms
There is no one-to-one connection between valuation technique and
hierarchy level. Depending on whether valuation techniques are
based on significant observable or unobservable inputs, financial
instruments are classified in the fair value hierarchy.
Present value of future profits (PVFP)
These assumptions also have an impact on the presentation of costs
arising from the origination of insurance business (acquisition costs
and sales inducements) and the value of acquired insurance business
(PVFP). To ensure consistency in the application of actuarial methods
and assumptions in the Life/Health reserving process, the
Allianz Group has designed a two-stage reserving process:
Life/Health reserves are subject to estimates and assumptions,
especially on the life expectancy and health of an insured individual
(mortality, longevity, and morbidity risk) and on the development of
interest rates and investment returns (asset-liability mismatch risk).
The oversight and monitoring of the Allianz Group's reserves
culminate in quarterly meetings of the Allianz Group Reserve
Committee, which is the supervising body that governs all signifi-
cant reserves. It particularly monitors key developments across the
Allianz Group affecting the adequacy of reserves.
For the business segments Life/Health and Property-Casualty, the
central oversight process around reserve estimates includes the set-
ting of group-wide standards and guidelines, regular site visits, as well
as regular quantitative and qualitative reserve monitoring.
RESERVING PROCESS
Reserves for premium refunds include the amounts allocated under
the relevant local statutory/contractual regulations or, at the entity's
discretion, to the accounts of the policyholders and the amounts
resulting from the differences between these IFRS-based financial
statements and the local financial statements (latent reserves for
premium refunds), which will reverse and enter into future profit
participation calculations. Unrealized gains and losses recognized for
available-for-sale investments are recognized in the latent reserves
for premium refunds to the extent that policyholders will participate
in such gains and losses on the basis of statutory or contractual
regulations when they are realized, based on and similar to shadow
accounting. The profit participation allocated to participating
policyholders or disbursed to them reduces the reserves for premium
refunds.
Reserves for premium refunds
In the consolidated balance sheet for the year ended
31 December 2018, the FIA-related changes in connection with prior
years led to a € 13 mn decrease in reserves for insurance and invest-
ment contracts, a € 669 mn increase in deferred acquisition costs, and
a € 675 mn increase in financial liabilities carried at fair value through
income. Correspondingly, in the consolidated income statement for
the year ended 31 December 2018, due to FIA-related changes refer-
ring to prior years, change in reserves for insurance and investment
contracts (net) decreased by € 13 mn, acquisition and administrative
expenses (net) decreased by € 683 mn, and income from financial
assets and liabilities carried at fair value through income (net) de-
creased by € 689 mn. Overall income before income taxes increased
by € 7 mn.
In 2018, Allianz Group adjusted its measurement approach for
specific products within the US fixed index annuity (FIA) portfolio to
periodically review and unlock, as necessary, assumptions used in
calculating the underlying aggregate policy reserves. Previously,
assumptions used for calculating the aggregate policy reserve were
locked in at inception of each contract. In this context, some assump-
tions used in the amortization of DAC were not consistently updated
for new information. This also impacted the timing of revision of some
assumptions used in the valuation of the bifurcated market based
embedded derivative. The adjustment was made in the fourth quarter
of 2018 and is immaterial with regard to the current year as well as
prior year consolidated financial statements.
Stage one: Life/Health reserves are calculated by qualified local
staff experienced in the subsidiaries' business. Actuaries in the local
entities also conduct tests of the adequacy of the premiums and
reserves to cover future claims and expenses (liability adequacy
tests). The process follows group-wide standards for applying con-
sistent and plausible assumptions. The appropriateness of the
reserves and their compliance with group-wide standards is con-
firmed by the local actuary.
contract. Subsequently, those contracts are measured at amortized
cost using the effective interest method.
103
Annual Report 2018 - Allianz Group
Non-unit-linked investment contracts without discretionary par-
ticipation features are accounted for under IAS 39. The aggregate
policy reserves for those contracts are initially recognized at fair
value, or the amount of the deposit by the contract holder, net of the
transaction costs, that are directly attributable to the issuance of the
The Allianz Group has recognized all rights and obligations related to
issued insurance contracts according to its accounting policies, and
thus has not separately recognized an unbundled deposit compo-
nent in respect of any of its insurance contracts.
2.2-5.0
0.8 4.3
Participating life
insurance contracts
contracts
2.5-6.0
2.5-6.0
Traditional long-
duration insurance
Deferred acquisition costs
Aggregate policy reserves
D_Consolidated Financial Statements
%
Stage two: The Allianz Group Actuarial function regularly re-
views the local reserving processes, including the appropriateness
and consistency of the assumptions, and analyzes the movements of
the reserves. Any adjustments to the reserves and other insurance-
related reporting items are reported to and analyzed together with
the Allianz Group Reserve Committee.
Stage one: Property-Casualty reserves are calculated by local
reserving actuaries at the Allianz operating entities. The reserves are
set based on a thorough analysis of historical data, enhanced by
interactions with other business functions (e.g. Underwriting, Claims
and Reinsurance). Actuarial judgment is applied where necessary,
especially in cases where data is unreliable, scanty, or unavailable.
The judgment of Property-Casualty actuaries is based on past expe-
rience of the characteristics of each line of business, the current stage
of the underwriting cycle, and the external environment in which the
subsidiary operates. The reserves are proposed to a local reserve
committee, whereat the rationale of the selections are discussed and
subsequently documented. A final decision on the reserve selection is
made in the reserve committee. Local actuaries are responsible for
their compliance with the Group Actuarial Standards and Guidelines.
a net investment in a foreign operation is recognized in foreign
currency translation adjustments.
in proportion to the consumption of
future economic benefit
straight-line or in relation to
customer churn rates
Please refer to the section above for an explanation of foreign
currency changes that are recognized in equity. The effective portion
of gains and losses of hedging instruments designated as hedges of
Retained earnings comprise the net income of the current year,
earnings not yet distributed from prior years, treasury shares, and any
amounts directly recognized in equity according to IFRS. Treasury
shares are deducted from shareholders' equity. No gain or loss is
recognized on the sale, issuance, acquisition, or cancellation of these
shares. Any consideration paid or received is recorded directly in
shareholders' equity.
Issued capital represents the mathematical per-share value received
at the issuance of shares. Additional paid-in capital represents the
premium exceeding the issued capital received at the issuance of
shares.
EQUITY
Certificated liabilities and subordinated liabilities are subsequently
measured at amortized cost, using the effective interest method to
amortize the premium or discount to the redemption value over the
life of the liability.
CERTIFICATED LIABILITIES AND SUBORDINATED
LIABILITIES
The Allianz Group records financial liabilities where non-controlling
investors have the right to put their financial instruments back to the
Allianz Group, which is primarily the case for mutual funds controlled
but not wholly owned by the Allianz Group. These liabilities are gen-
erally required to be recorded at the redemption amount, with
changes recognized in equity for put options over non-controlling
interests and in the income statement for redeemable fund units.
Property-Casualty reserves are set by leveraging the use of ac-
tuarial techniques and educated judgment. A two-stage process
exists for the setting of reserves in the Allianz Group:
Financial liabilities for puttable financial instruments
Share-based compensation plans
Further explanations and sensitivity calculations are given in
note 38.
vidual countries. In order to ensure their thorough and consistent
determination, all input parameters are discussed and defined taking
into consideration economic developments, peer reviews, and cur-
rently available market and industry data.
D_Consolidated Financial Statements
Annual Report 2018 - Allianz Group
104
Pensions and similar obligations are measured at present value and
presented net of plan assets by applying the provisions of IAS 19.
These valuations rely on extensive assumptions. Key assumptions
such as discount rates, inflation rates, compensation increases, pen-
sion increases, and rates of medical cost trends are defined centrally
at the Allianz Group level, considering the circumstances in the indi-
Pensions and similar obligations
OTHER LIABILITIES
The share-based compensation plans of the Allianz Group are classi-
fied as either equity-settled or cash-settled plans. Equity-settled plans
are measured at fair value on the grant date (grant-date fair value)
and the grant-date fair value is recognized as an expense over the
vesting period. Where equity-settled plans involve equity instruments
of Allianz SE, a corresponding increase in shareholders' equity is
recognized. Where equity-settled plans involve equity instruments of
subsidiaries of the Allianz Group, the corresponding increase is rec-
ognized in non-controlling interests. Equity-settled plans include a
best estimate of the number of equity instruments that are expected
to vest in determining the amount of expense to be recognized. For
cash-settled plans, the Allianz Group accrues the fair value of the
award as compensation expenses over the vesting period. Upon
vesting, any change in the fair value of any unexercised awards is
also recognized as a compensation expense. Where expected tax
deductions differ, in terms of amount and timing, from the cumulative
share-based payment expense recognized in profit or loss, deferred
taxes are recognized on temporary differences.
Interest rate assumptions
Stage two: The Allianz Group Actuarial function forms an opin-
ion on the adequacy of the reserves proposed by the local entities. The
Allianz Group Actuarial function challenges the operating entities'
selection through their continuous interaction with local teams and
quarterly attendance in the local reserve committees. The ability to
form a view on reserve adequacy is further enabled by regular reviews
of the local reserving practices. Such reviews consist of an evaluation of
the reserving process as well as of the appropriateness and consistency
of the assumptions, and an analysis of the movements of the reserves.
Significant findings from these reviews are communicated in the
Allianz Group Reserve Committee to initiate actions where necessary.
Insurance contract features not closely related to the underlying
insurance contracts are bifurcated from the insurance contracts and
accounted for as derivatives in line with IFRS 4 and IAS 39. The
embedded derivatives separated from certain life insurance and
annuity contracts are recognized as financial liabilities held for trading.
The assumptions used for aggregate policy reserves are deter-
mined using current and historical client data, industry data, and, in
the case of assumptions for interest rates, reflect expected earnings
on assets which back the future policyholder benefits. The infor-
mation used by Allianz Group's actuaries in setting such assumptions
includes, but is not limited to, pricing assumptions, available experi-
ence studies, and profitability analyses.
Insurance and investment contracts
INSURANCE, INVESTMENT AND REINSURANCE
CONTRACTS
Further explanations on the impairment test for goodwill and its
significant assumptions as well as respective sensitivity analyses are
given in note 11.
The recoverable amounts of all cash generating units (CGUS) to
test goodwill and other indefinite life intangible assets for impair-
ment are typically determined on the basis of value in use calcula-
tions. The determination of a CGU's recoverable amount requires
significant judgment regarding the selection of appropriate valuation
techniques and assumptions.
For business combinations, goodwill is recognized in the amount of
the consideration transferred in excess of the fair values assigned to
the identifiable assets acquired and liabilities assumed. Goodwill is
accounted for at the acquiree in the acquiree's functional currency.
There is an at least annual evaluation whether it is deemed recoverable.
The table below summarizes estimated useful lives and the
amortization methods for each class of intangible assets with finite
useful lives.
INTANGIBLE ASSETS AND GOODWILL
Intangible assets with finite useful lives are measured at cost less
accumulated amortization and impairments. Intangible assets with
indefinite useful lives are tested for impairment annually and when-
ever there is a triggering event. They are also reviewed annually to
determine whether the indefinite-life classification is still appropriate.
max. 50
2-13
2-10
Equipment
Software
Real estate held for own use
Estimated useful lives (in years)
The table below summarizes estimated useful lives for real
estate held for own use, software and equipment.
Other assets primarily consist of receivables, accrued dividends,
interest, rent and deferred compensation amounts as well as real
estate held for own use, software and equipment. Depreciation is
generally computed using the straight-line method over the estimated
useful lives of the assets.
OTHER ASSETS
For insurance contracts and investment contracts with discretionary
participation features, shadow accounting is applied to DAC, PVFP
and deferred sales inducements in order to include the effect of
unrealized gains or losses in the measurement of these assets in the
same way as it is done for realized gains or losses. Accordingly, the
assets are adjusted with corresponding charges or credits recognized
directly in other comprehensive income as a component of the relat-
ed unrealized gain or loss. When the gains or losses are realized they
are recognized in the income statement through recycling and prior
adjustments due to shadow accounting are reversed.
Shadow accounting
Sales inducements on non-traditional insurance contracts are deferred
and amortized using the same methodology and assumptions as for
deferred acquisition costs.
The average interest rate assumptions per operating entity used
in the calculation of deferred acquisition costs and aggregate policy
reserves are as follows:
Deferred sales inducements
The value of an insurance business or an insurance portfolio acquired
is measured by the PVFP, which is the present value of net cash flows
anticipated in the future from insurance contracts in force at the date
of acquisition. It is amortized over the life of the relevant contracts.
Insurance contracts and investment contracts with discretionary
participation features are accounted for under the insurance ac-
counting provisions of US GAAP, as have been applied at first-time
adoption of IFRS 4 on 1 January 2005, wherever IFRS 4 does not
provide specific guidance. Investment contracts without discretionary
participation features are accounted for as financial instruments in
accordance with IAS 39.
Reinsurance contracts
Years
Liability adequacy tests
The aggregate policy reserves for participating life insurance con-
tracts are calculated using the net level premium method based on
assumptions for mortality, morbidity, and interest rates that are
guaranteed in the contract or used in determining the policyholder
dividends (or premium refunds).
The Allianz Group's consolidated financial statements reflect the
effects of ceded and assumed reinsurance contracts. Assumed
reinsurance premiums, commissions, and claim settlements, as well
as the reinsurance element of technical provisions, are accounted for
in accordance with the conditions of the reinsurance contracts, and in
consideration of the original contracts for which the reinsurance was
concluded. When the reinsurance contracts do not transfer significant
insurance risk, deposit accounting is applied as required under the
related reinsurance accounting provisions of US GAAP or under
IAS 39.
Aggregate policy reserves
Reserves for insurance and investment contracts include aggregate
policy reserves, reserves for premium refunds and other insurance
reserves.
RESERVES FOR INSURANCE AND INVESTMENT
CONTRACTS
Reserves for loss and loss adjustment expenses are not dis-
counted, except when payment amounts are fixed and timing is
reasonably determinable.
The aggregate policy reserves for universal life-type insurance
contracts are equal to the account balance, which represents premi-
ums received and investment return credited to the policy, less deduc-
tions for mortality costs and expense charges. The aggregate policy
reserve also includes reserves for investment contracts with discre-
tionary participation features as well as for liabilities for guaranteed
minimum mortality and morbidity benefits related to non-traditional
contracts with annuitization options and unit-linked insurance con-
tracts. For contracts with a discretionary participation feature, the
whole contract is classified as one liability rather than separately
recognizing the participation feature.
For traditional long-duration insurance contracts, such as tradi-
tional life and health products, aggregate policy reserves are com-
puted using the net level premium method, based on best-estimate
assumptions adjusted for a provision for adverse deviation for mortal-
ity, morbidity, expected investment yields, surrenders, and expenses
at the policy inception date, which remain locked in thereafter unless
a premium deficiency occurs.
IBNR reserves are established to recognize the estimated cost of
losses that have occurred but where the Allianz Group has not yet
been notified. IBNR reserves, similar to case reserves for reported
claims, are established to recognize the estimated costs, including
expenses, necessary to bring claims to final settlement. The
Allianz Group relies on its past experience, adjusted for current trends
and any other relevant factors, to estimate IBNR reserves.
Case reserves for reported claims are based on estimates of
future payments that will be made with respect to claims, including
LAE relating to such claims. These estimates reflect the informed
judgment of claims personnel based on general insurance reserving
practices and knowledge of the nature and value of a specific type of
claim. These case reserves are regularly re-evaluated in the ordinary
course of the settlement process and adjustments are made as new
information becomes available.
Reserves are established for the payment of losses and loss adjust-
ment expenses (LAE) on claims which have occurred but are not yet
settled. Reserves for loss and loss adjustment expenses fall into two
categories: case reserves for reported claims and reserves for in-
curred but not reported losses (IBNR).
IBNR reserves are estimates based on actuarial and statistical
projections of the expected cost of the ultimate settlement and ad-
ministration of claims. The analyses are based on facts and circum-
stances known at the time, predictions of future events, estimates of
future inflation, and other societal and economic factors. Trends in
claim frequency, severity, and time lag in reporting are examples of
factors used in projecting the IBNR reserves. IBNR reserves are re-
viewed and revised periodically, as additional information becomes
available and actual claims are reported.
Amounts charged as consideration for origination of certain
long-duration insurance contracts (i.e. initiation or front-end fees) are
reported as unearned revenues and, as such, included in unearned
premiums. These fees are recognized using the same amortization
methodology as DAC, including shadow accounting.
For short-duration insurance contracts, such as most of the property
and casualty contracts, premiums to be earned in future years are
recorded as unearned premiums. These premiums are earned in
subsequent periods in relation to the insurance coverage provided.
UNEARNED PREMIUMS
For long-duration contracts, a premium deficiency is recognized,
if actual experience regarding investment yields, mortality, morbidity,
terminations, or expense indicates that existing contract liabilities,
along with the present value of future gross premiums, will not be
sufficient to cover the present value of future benefits and to recover
DAC.
D_Consolidated Financial Statements
Annual Report 2018 - Allianz Group
102
RESERVES FOR LOSS AND LOSS ADJUSTMENT
EXPENSES
Liability adequacy tests are performed for each insurance portfolio,
based on estimates of future claims, costs, premiums earned, and
proportionate expected investment income. For short-duration
contracts, a premium deficiency is recognized if the sum of expected
claim costs and claim adjustment expenses, expected dividends to
policyholders, DAC, and maintenance expenses exceeds related
unearned premiums while considering anticipated investment income.
6,408
71,427
71,472
126,149
130,557
562
(535)
2017
275
6,732
(360)
14
5
513
731
(220)
(223)
21,616
21,848
25
20
(3,368)
2018
(1)
8
19
2017
2,968
2017
(1,394)
(1,203)
(1,059)
(1,410)
4,302
3,807
2,837
Non-controlling interests
66
167
Shareholders
4,236
2018
3,640
146
2,821
1_Total revenues comprise statutory gross premiums written in Property-Casualty and Life/Health, operating revenues in Asset Management, and total revenues in Corporate and Other (Banking).
2_For the year ended 31 December 2018, includes expenses for premium refunds (net) in Property-Casualty of € 86 mn (2017: € (215) mn).
114
Annual Report 2018 - Allianz Group
D_Consolidated Financial Statements
Asset Management
Corporate and Other
Consolidation
Group
2018
2017
2018
166
2,671
40
(51,218)
5,146
(2,387)
11,534
10,937
11
1
4
156
(34)
(154)
24
36
4
(2,472)
5
(78)
56
(9,662)
(14,366)
(2)
(25)
(2)
(25)
(4,202)
(3,968)
(1,171)
(1,496)
(52,157)
(68)
2,349
7,904
5,513
(11)
(11)
(198)
(311)
214
208
(195)
(311)
(2,577)
(656)
(94)
2,231
(109)
571
(1,333)
(1,269)
8
33
241
310
582
489
19,289
23,923
8,462
540
4,377
2,931
5,201
30
33
13
1
(31,864)
(31,425)
(20,296)
(19,798)
Operating change in reserves for insurance and investment contracts (net)²
(235)
(485)
(9,349)
1,454
(13,937)
Acquisition and administrative expenses (net), excluding acquisition-related expenses
(13,542)
(13,537)
(5,635)
(6,565)
Fee and commission expenses
(1,660)
(1,509)
(742)
(700)
Operating amortization of intangible assets
(20)
Loan loss provisions
(19)
1,548
1,765
248
4,945
5,333
Interest expenses, excluding interest expenses from external debt
(97)
(94)
(104)
(102)
Operating impairments of investments (net)
(112)
(22)
(2,465)
1,616
(634)
Subtotal
Fee and commission income
Other income
Claims and insurance benefits incurred (net)
(397)
(399)
(1,382)
(1,332)
(1,578)
3,120
15,527
19,971
Investment expenses
3,896
Operating restructuring charges
(27)
129
Non-operating change in reserves for insurance and investment contracts (net)
(22)
(61)
Interest expenses from external debt
Acquisition-related expenses
Non-operating amortization of intangible assets
Non-operating restructuring charges
Non-operating items
Income (loss) before income taxes
Income taxes
Net income (loss)
108
Net income (loss) attributable to:
(61)
(278)
(52)
(180)
(233)
(64)
(50)
73
148
(256)
(34)
5,798
(55)
(59)
442
Subtotal
Other expenses
(6)
(2)
(1)
(154)
Operating profit (loss)
5,725
5,053
4,152
4,412
Non-operating investment result
Non-operating income from financial assets and liabilities carried at fair value through income (net)
307
40
16
46
Non-operating realized gains/losses (net)
663
609
134
137
Non-operating impairments of investments (net)
(396)
(163)
(41)
(54)
(5)
(50)
(2,941)
(24,600)
1,924
1,339
1,309
Iberia & Latin America and Allianz Partners
9,457
9,525
8,121
7,932
498
452
320
237
Global Insurance Lines & Anglo Markets, Middle East and
Africa
23,371
22,092
16,428
15,592
1,826
1,288
1,448
1,073
Consolidation
(1,034)
(7,103)
(6,600)
1,776
11,233
10,837
12,348
RECONCILIATION OF REPORTABLE SEGMENTS TO ALLIANZ GROUP FIGURES
Reconciliation of reportable segments to Allianz Group figures
€ mn
Total revenues
Premiums earned (net)
Operating profit (loss)
Net income (loss)
2018
2017
2018
2017
2018
(16)
2017
2017
German Speaking Countries and Central & Eastern
Europe
15,434
14,897
12,919
12,485
1,641
1,389
1,207
1,197
Western & Southern Europe and Asia Pacific
12,476
2018
(13)
(9)
Total Property-Casualty
505
286
328
235
244
USA
10,832
9,720
1,183
1,261
852
1,049
493
664
Global Insurance Lines & Anglo Markets, Middle East and
Africa
711
667
426
399
49
55
29
39
Consolidation and Other
(1,059)
160
637
D_Consolidated Financial Statements
2,011
Iberia & Latin America
53,636
52,262
48,305
47,242
5,725
5,053
4,302
3,807
German Speaking Countries and Central & Eastern
Europe
28,758
27,359
14,073
1,873
15,177
1,644
1,097
1,084
Western & Southern Europe and Asia Pacific
29,335
28,554
6,987
6,840
1,359
1,326
823
954
1,620
115
(1,309)
(1,230)
67
(1)
(15)
156
108
(3)
194
951
1,033
(137)
(287)
(575)
29
(504)
38
(250)
(10)
223
443
528
(22)
(61)
(840)
(838)
(840)
(838)
(15)
7
(7)
19
(25,709)
(1,749)
(1,530)
(2,134)
(1,992)
1,983
1,873
(4,302)
(3,857)
(20)
(19)
(59)
(71)
(27)
1
154
(6)
(5)
2,530
2,440
(831)
(783)
(64)
(24)
11,512
11,097
(3)
(61)
7
(13)
10
(19)
(2,696)
1,922
1,546
(1,294)
(1,293)
(63)
179
7,703
7,207
73
744
ཁ༔
Annual Report 2018 - Allianz Group
73
1,473
16
1
241
404
(63)
178
7,462
6,803
(64)
1,848
(13)
443
(593)
(9)
(9)
(355)
(135)
(2)
(10)
(94)
(157)
(339)
(450)
(15)
(31)
(862)
(905)
(10)
223
(1,113)
(949)
2,515
2,408
(1,736)
(2,037)
(74)
199
10,399
10,148
(1,254)
Operating realized gains/losses (net)
From January through April 2018, the Allianz Group acquired the
remaining 20.9% of Euler Hermes's outstanding shares in consideration
for a total of € 1,073 mn in cash, equivalent to € 122 per share. The
buyout of the outstanding shares of Euler Hermes reduced the share-
holders' equity of the Allianz Group by € 513 mn.
(3,351)
2017
2018
2017
3,977
3,317
8,301
9,025
768
604
6,620
7,442
99,366
101,668
434,794
424,294
10,773
10,610
95,808
92,674
115,361
119,141
Reinsurance assets
10,987
11,437
5,504
2018
Life/Health
Property-Casualty
Financial assets for unit-linked contracts
-
income from financial assets and liabilities carried at fair value
through income (net),
realized gains/losses (net) and impairments of investments (net),
interest expenses from external debt,
acquisition-related expenses (from business combinations),
amortization of intangible assets,
restructuring charges, and
profit (loss) of substantial subsidiaries classified as held for sale.
The following exceptions apply to this general rule:
In all reportable segments, income from financial assets and
liabilities carried at fair value through income (net) is treated as
operating profit if the income relates to operating business.
For life/health insurance business and property-casualty insur-
ance products with premium refunds, all items listed above are
included in operating profit if the profit sources are shared with
policyholders. There is one exception from this general rule with
regard to policyholder participation in extraordinary tax benefits
and expenses. As IFRS require that the consolidated income
statements present all tax effects in the line item income taxes,
even when they belong to policyholders, the corresponding ex-
penses for premium refunds are shown as non-operating as well.
Operating profit should be viewed as complementary to, and not as
a substitute for, income before income taxes or net income as deter-
mined in accordance with IFRS.
110
Annual Report 2018 - Allianz Group
RECENT ORGANIZATIONAL CHANGES
5,034
Effective 1 January and 1 April 2018, the Allianz Group reorganized
the structure of its insurance activities to reflect the changes in the
responsibilities of the Board of Management. Middle East and Africa
were reallocated to the reportable segment Global Insurance Lines &
Anglo Markets, Middle East and Africa. In the Property-Casualty
business segment, the reportable segment Iberia & Latin America
was combined with the reportable segment Allianz Partners to form
the reportable segment Iberia & Latin America and Allianz Partners.
Previously reported information has been adjusted to reflect this
change in the composition of the Allianz Group's reportable segments.
Additionally, some minor reallocations between the reportable
segments have been made.
Annual Report 2018 - Allianz Group
111
D_Consolidated Financial Statements
BUSINESS SEGMENT INFORMATION - CONSOLIDATED BALANCE SHEETS
Business segment information - consolidated balance sheets
€ mn
As of 31 December
ASSETS
Cash and cash equivalents
Financial assets carried at fair value through income
Investments
Loans and advances to banks and customers
D_Consolidated Financial Statements
Deferred acquisition costs
4,796
4,715
2018
2017
2018
2017
LIABILITIES AND EQUITY
Financial liabilities carried at fair value through income
126
133
11,421
11,021
Liabilities to banks and customers
1,563
Life/Health
1,237
5,655
Unearned premiums
17,784
17,065
5,128
4,402
Reserves for loss and loss adjustment expenses
61,442
62,093
11,672
11,256
Reserves for insurance and investment contracts
5,976
To better understand the ongoing operations of the business, the
Allianz Group generally excludes the following non-operating effects:
Property-Casualty
699,318
22,912
18,469
Deferred tax assets
714
891
710
685
Other assets
23,357
22,787
18,808
19,416
As of 31 December
Non-current assets and assets of disposal groups classified as held for sale
23
77
204
Intangible assets
3,292
2,985
2,976
2,934
Total assets
158,078
159,036
711,870
48
The Allianz Group uses operating profit to evaluate the performance
of its reportable segments as well as of the Allianz Group as a whole.
Operating profit highlights the portion of income before income
taxes that is attributable to the ongoing core operations of the
Allianz Group. The Allianz Group considers the presentation of oper-
ating profit to be useful and meaningful to investors because it en-
hances the understanding of the Allianz Group's underlying operating
performance and the comparability of its operating performance
over time.
LOSS
REPORTABLE SEGMENTS MEASURE OF PROFIT OR
Real estate held for own use
4
Subtotal
47
220
Total
125
14,329
Liabilities of disposal groups classified as held for sale
Oldenburgische Landesbank AG, Oldenburg
Other disposal groups
Total
13,657
62
6
216
62
IAS 1 and IAS 8, Definition of Material
IAS 19, Plan Amendments, Curtailment or Settlement
IAS 28, Long-term Interests in Associates and Joint
Ventures
IFRIC 23, Uncertainty over Income Tax Treatments
Annual Improvements to IFRSS 2015-2017 Cycle
(Amendments to IFRS 3 and 11 and IAS 12 and 23)
Annual periods beginning on or after
1 January 2020
Annual periods beginning on or after
1 January 2019
Annual periods beginning on or after
1 January 2019
Annual periods beginning on or after
1 January 2019
Annual periods beginning on or after
1 January 2019
The amendments and interpretations are not expected to have a
material impact on the financial position and financial results of the
Allianz Group. Early adoption is generally allowed but not intended
by the Allianz Group.
OLDENBURGISCHE LANDESBANK AG, OLDENBURG
In 2018, the Allianz Group disposed of Oldenburgische Landesbank
AG, Oldenburg, a 90.2% owned subsidiary of the Allianz Group, allo-
cated to the reportable segment Banking (Corporate and Other). The
entity had been classified as held for sale since year-end 2016. It was
deconsolidated on 7 February 2018. At 31 December 2017 already,
an impairment and a liability of € 233 mn had been recognized in
connection with the expected loss from the sale of Oldenburgische
Landesbank AG. In 2018, the Allianz Group received proceeds from
the sale of its 90.2% stake of € 323 mn and recognized a deconsoli-
dation loss of € 24 mn.
The impact of the disposal, net of cash disposed, on the consoli-
dated statement of cash flows for the year 2018 was as follows:
Impact of the disposal
13,662
3 Consolidation and
47
Non-current assets classified as held for sale
5
Fair value
D_Consolidated Financial Statements
requirements of IFRS 16 to the comparative period presented. The
impact on retained earnings as of 1 January 2019 is not significant.
Further amendments and interpretations
In addition to the above-mentioned accounting pronouncements
recently issued, the following amendments and revisions to standards
and interpretations have been issued by the IASB but are not yet
effective for or have not been adopted early by the Allianz Group.
Further amendments and interpretations
Standard/Interpretation
IFRS 3, Definition of a Business
IFRS 9, Prepayment Features with Negative
Compensation
IFRS 10 and IAS 28, Sale or Contribution of Assets
between an Investor and its Associate or Joint Venture
Effective date
Real estate held for investment
Annual periods beginning on or after
1 January 2020
CLASSIFICATION AS HELD FOR SALE
Non-current assets and disposal groups classified as held for sale
€ mn
As of 31 December
2018
2017
Assets of disposal groups classified as held for sale
Oldenburgische Landesbank AG, Oldenburg
Other disposal groups
78
14,102
6
Subtotal
78
14,108
Annual periods beginning on or after
1 January 2021
14,388
classification as held for sale
In 2018 and 2017, no significant acquisitions occurred.
(37)
Proceeds from sale of the subsidiary, net of cash disposed¹
(208)
1 Includes cash and cash equivalents at an amount of € 531 mn which were disposed of with the entity.
109
D_Consolidated Financial Statements
4 Segment reporting
IDENTIFICATION OF REPORTABLE SEGMENTS
The business activities of the Allianz Group are organized by product
and type of service: insurance activities, asset management activities,
and corporate and other activities. Due to differences in the nature of
products, risks, and capital allocation, insurance activities are further
divided into the business segments Property-Casualty and
Life/Health. In accordance with the responsibilities of the Board of
Management, each of the insurance business segments is grouped
into the following reportable segments:
-
German Speaking Countries and Central & Eastern Europe,
Western & Southern Europe and Asia Pacific
Iberia & Latin America and Allianz Partners
Non-controlling interests
USA (Life/Health only),
Asset management activities represent a separate reportable seg-
ment. Due to differences in the nature of products, risks, and capital
allocation, corporate and other activities are divided into three
reportable segments: Holding & Treasury, Banking, and Alternative
Investments. In total, the Allianz Group has identified 13 reportable
segments in accordance with IFRS 8.
The types of products and services from which the reportable
segments derive revenues are described below.
PROPERTY-CASUALTY
In the business segment Property-Casualty, reportable segments
offer a wide variety of insurance products to both private and corpo-
rate customers, including motor liability and own damage, accident,
general liability, fire and property, legal expense, credit, and travel
insurance.
LIFE/HEALTH
In the business segment Life/Health, reportable segments offer a
comprehensive range of life and health insurance products on both
an individual and a group basis, including annuities, endowment and
term insurance, unit-linked and investment-oriented products, as well as
full private health, supplemental health, and long-term care insurance.
ASSET MANAGEMENT
The reportable segment Asset Management operates as a global
provider of institutional and retail asset management products and
services to third-party investors. It also provides investment manage-
ment services to the Allianz Group's insurance operations. The prod-
ucts for retail and institutional customers include equity and fixed-
income funds as well as alternative products. The United States,
Europe, and the Asia-Pacific region represent the primary asset man-
agement markets.
CORPORATE AND OTHER
The reportable segment Holding & Treasury includes the manage-
ment and support of the Allianz Group's businesses through its strategy,
risk, corporate finance, treasury, financial reporting, controlling,
communication, legal, human resources, technology, and other func-
tions. The reportable segment Banking consists of the banking activities
in Germany (until February 2018), France, Italy, and Bulgaria. The
banks offer a wide range of products for corporate and retail clients,
with a primary focus on the latter. The reportable segment Alternative
Investments provides global alternative investment management
services in the real estate sector, mainly on behalf of the Allianz Group's
insurance operations.
GENERAL SEGMENT REPORTING INFORMATION
Prices for transactions between reportable segments are set on an
arm's length basis in a manner similar to transactions with third
parties. Transactions between reportable segments are eliminated in
the consolidation. Financial information is recorded based on report-
able segments; cross-segmental country-specific information is not
determined.
Global Insurance Lines & Anglo Markets, Middle East and Africa.
SIGNIFICANT ACQUISITIONS
(24)
(233)
SIGNIFICANT CHANGES IN NON-CONTROLLING
INTERESTS
On 27 April 2018, the Allianz Group successfully completed the acqui-
sition of the shares of Euler Hermes held by non-controlling interests
and delisted the shares of Euler Hermes from Euronext Paris on the
same day.
€ mn
Other assets
Other liabilities
Certificated liabilities
Subordinated liabilities
Other comprehensive income
Annual Report 2018 - Allianz Group
Financial assets carried at fair value through income
Investments
20
2,492
Loans and advances to banks and customers
Realized loss from the disposal
11,092
51
156
Financial liabilities carried at fair value through income
(15)
Liabilities to banks and customers
(12,756)
(578)
(133)
(149)
(45)
Impairment loss on measurement of disposal group at fair value less costs to sell
Impairment in connection with expected loss
(49)
Deferred tax assets
14,928
515,537
499,060
73,054
73,292
(57)
(109)
(181)
(193)
529,687
513,687
115,361
119,141
46
79
(57)
193
(1,722)
(1,752)
4,080
4,906
3,370
2,936
25,012
26,242
(21,358)
(23,015)
40,232
39,639
178
13,682
(59)
22,891
Corporate and Other
Consolidation
Group
2017
2018
2017
2018
2017
2018
2017
433
577
21,442
(354)
11,626
11,291
174
174
8,045
7,208
(1,536)
(1,527)
14,222
12,746
(21)
(26)
(440)
2018
(25)
13,662
€ mn
Property-Casualty
Life/Health
2018
2017
2018
2017
Total revenues¹
53,636
52,262
70,450
67,277
Business segment information - total revenues and reconciliation of operating profit (loss) to net income (loss)
Premiums earned (net)
47,242
23,167
24,185
Operating investment result
Interest and similar income
3,426
3,465
17,883
17,856
Operating income from financial assets and liabilities carried at fair value through income (net)
(49)
(78)
48,305
62
BUSINESS SEGMENT INFORMATION - TOTAL REVENUES AND RECONCILIATION OF OPERATING PROFIT (LOSS)
TO NET INCOME (LOSS)
113
11,458
12,367
(2,271)
(2,794)
9,199
9,596
13,430
13,250
3,589
3,188
58,513
73,396
D_Consolidated Financial Statements
(20)
(27,522)
13,475
13,295
(29,848)
833,888
832,698
Total equity
63,679
68,602
Total liabilities and equity
897,567
901,300
Annual Report 2018 - Allianz Group
(20)
(1,149)
Asset Management
897,567
Annual Report 2018 - Allianz Group
D_Consolidated Financial Statements
Asset Management
Corporate and Other
Consolidation
Group
2018
2017
2018
2017
2018
2017
112
2018
1,073
1,050
4,136
3,919
(253)
(192)
17,234
17,119
69
72
506
492
2017
(353)
669,168
116,794
Financial liabilities for unit-linked contracts
115,361
119,141
Deferred tax liabilities
2,190
2,445
3,374
3,956
Other liabilities
19,115
18,876
14,094
682,666
14,600
35
6
27
Certificated liabilities
11
11
11
Subordinated liabilities
65
65
Total liabilities
116,641
Liabilities of disposal groups classified as held for sale
901,300
(434)
8,177
959
931
3,731
3,215
7,462
8,871
(14,149)
(16,558)
39,209
37,731
14,105
(3)
(1,752)
125
7,488
7,332
12
12
13,767
13,262
12,662
11,901
121,745
139,165
(106,788)
(108,120)
14,329
7,611
(1,722)
1,095
72
24
103,084
105,441
(86,394)
(84,599)
550,923
546,828
68
59
5,449
5,368
958
(3,828)
108,270
104,224
115,361
119,141
(90)
(96)
16,400
16,375
27,709
23,184
162
148
(4,488)
2
Debt securities
10
The main impact from unrealized losses on corporate bonds
comes from the financial, consumer and energy sector.
For the vast majority of corporate bonds, the issuer/issues have
an investment-grade rating. The increase in unrealized losses of
€3,431 mn compared to 31 December 2017 is due to increasing
interest rates.
The unrealized losses on the Allianz Group's investments in
government and government agency bonds are spread over sever-
al countries, with the main part coming from Europe.
In general, the credit risk of government and government agency
bonds is rather moderate since they are backed by the fiscal capacity
of the issuers who typically hold an investment-grade country-
and/or issue-rating. During 2018, interest rates of government and
government agency bonds increased in some countries, while
decreasing in others. This development, supported by purchases
and realizations, led to an increase in unrealized losses on government
and government agency bonds of € 870 mn.
Total unrealized losses amounted to € 6,087 mn as of
31 December 2018. The Allianz Group holds a large variety of gov-
ernment and government agency bonds and corporate bonds,
mostly of or domiciled in OECD countries.
DEBT SECURITIES
UNREALIZED LOSSES ON AVAILABLE-FOR-SALE
INVESTMENTS AND HELD-TO-MATURITY
INVESTMENTS
D_Consolidated Financial Statements
Based on a detailed analysis of the underlying securities, the
Allianz Group did not consider these investments to be impaired as of
31 December 2018.
117
2_As of 31 December 2018, fair value and amortized cost of debt securities with a contractual maturity of less than one year amount to € 408 mn (2017: € 186 mn) and € 400 mn (2017: € 184 mn), respectively.
1 Also include corporate mortgage-backed securities.
372
2,992
(19)
333
2,678
2,973
(46)
Annual Report 2018 - Allianz Group
EQUITY SECURITIES
As of 31 December 2018, unrealized losses amounted to € 888 mn,
an increase of € 610 mn compared to 31 December 2017. They concern
equity securities that did not meet the criteria of the
Allianz Group's impairment policy for equity instruments as de-
scribed in note 2. The major part of these unrealized losses has
been in a continuous loss position of less than 6 months.
INVESTMENTS IN ASSOCIATES AND JOINT VENTURES
As of 31 December 2018, loans to associates and joint ventures
amounted to € 2,179 mn (2017: € 1,598 mn).
(193)
343
538
1,031
11,732
11,419
(2,959)
(2,967)
14,691
14,386
2017
2018
Changes in the consolidated subsidiaries of the Allianz Group
Disposals and reclassifications into non-current assets and
assets of disposal groups classified as held for sale
Reclassifications
Accumulated depreciation as of 1 January
Carrying amount as of 1 January
Additions
Cost as of 1 January
Real estate held for investment
€ mn
REAL ESTATE HELD FOR INVESTMENT
€ mn
Associates and joint ventures
62
310
292
44
232
HELD-TO-MATURITY INVESTMENTS
1_As of December 2018, fair value and amortized cost of bonds from countries with a rating below AA amount to € 71,260 mn (2017: € 74,132 mn) and € 68,667 mn (2017: € 68,638 mn), respectively.
2_As of December 2018, fair value and amortized cost of debt securities with a contractual maturity of less than one year amount to € 31,226 mn (2017: €30,037 mn) and € 29,873 mn (2017: € 29,222 mn), respectively.
520,397
(1,755)
53,455
468,697
520,612
51,158
(278)
14,241
37,195
51,413
(888)
(6,928)
38,451
9,246
43,055
489,089
Total
Equity securities
469,239
Held-to-maturity investments
(316)
€ mn
2018
249
2,787
Total²
2,621
Fair value
Unrealized
losses
(19)
271
2,368
gains
Amortized cost
Fair value
2,681
Unrealized
Unrealized
losses
(46)
189
2,538
Government and government agency bonds
Corporate bonds¹
gains
Amortized cost
Unrealized
2017
As of 31 December
(1,477)
(188)
33
3,105
Short-term investments and certificates of deposit
(78)
(79)
Share of other comprehensive income
2017
2018
As of 31 December
3,094
506
Share of earnings
€ mn
2017
2018
Loans and advances to banks and customers
1_Include fixed assets of wind parks and solar parks.
3,086
3,240
228
Share of total comprehensive income
149
428
(14)
Annual Report 2018 - Allianz Group
1_Includes loans and advances to banks and customers due within one year of € 12,674 mn (2017: € 10,055 mn).
118
104,224
108,270
Total¹
(94)
(78)
Loan loss allowance
104,317
108,348
Subtotal
1,697
2,344
Other
99,526
102,898
Loans
597
726
2,488
2,514
Reversals of impairments
Impairments
Foreign currency translation adjustments
Depreciation
14,386
15,613
2,967
3,158
Accumulated depreciation as of 31 December
Cost as of 31 December
11,419
12,455
Carrying amount as of 31 December
24
15
(24)
(16)
(252)
(250)
(252)
76
FIXED ASSETS OF RENEWABLE ENERGY
INVESTMENTS
153
Fixed assets of renewable energy investments¹
Cost as of 1 January
Carrying amount as of 31 December
Accumulated depreciation as of 31 December
Cost as of 31 December
(36)
(91)
(128)
(1)
218
155
2,397
2,488
(472)
(597)
2,868
3,086
2017
2018
Changes in the consolidated subsidiaries of the Allianz Group
Disposals
Depreciation
Impairments
Additions
Carrying amount as of 1 January
Accumulated depreciation as of 1 January
€ mn
39,213
7 Loans and advances to banks and customers
469,199
5 Financial assets carried
NOTES TO THE CONSOLIDATED BALANCE SHEETS
Annual Report 2018 - Allianz Group
116
7,207
7,703
11,097
11,512
at fair value through income
71,427
126,149
130,557
179
(63)
(24)
(64)
(1,293)
(1,294)
71,472
6 _ Investments
Investments
€ mn
836
732
Funds held by others under reinsurance contracts assumed
Financial assets held for trading
2,678
2,787
Held-to-maturity investments
2017
2018
As of 31 December
520,397
520,612
Available-for-sale investments
€ mn
2017
2018
Financial assets carried at fair value through income
D_Consolidated Financial Statements
As of 31 December
(783)
(831)
48
(55)
560
274
Banking
Holding & Treasury
6,408
6,732
Asset Management
2,968
2,837
4,412
4,152
24,185
23,167
67,277
70,450
Total Life/Health
10
431,503
(12)
Alternative Investments
Debt securities
2
275
57
56
(170)
13
96
51
(1,171)
(1,251)
(936)
(938)
1,546
1,922
2,440
2,530
(360)
(535)
Group
Consolidation
562
Total Corporate and Other
421
Consolidation
Investments in associates and joint ventures
(827)
22,551
177,186
197,531
(1,669)
19,106
180,094
Government and government agency bonds¹
198,911
243,526
15,579
228,439
241,192
(3,923)
8,818
236,297
Corporate bonds
Unrealized
losses
(493)
MBS/ABS
24,267
202
29,205
(6,040)
405
446,034
Subtotal²
5,169
(18)
715
4,472
6,442
(14)
1,080
Other
21,633
(140)
368
21,405
24,035
(434)
gains
Fair value Amortized cost
5,376
Unrealized
losses
550,923
Total
3,076
3,353
Subtotal
2,488
2,514
Fixed assets of renewable energy investments
2,461
2,729
11,419
12,455
Real estate held for investment
210
203
11,823
Unrealized
9,010
Equity securities
546,828
Financial assets designated at fair value through income
Derivative financial instruments
2,276
2017
Amortized cost
Debt securities
gains
2018
Unrealized
€ mn
Available-for-sale investments
AVAILABLE-FOR-SALE INVESTMENTS
8,177
As of 31 December
Total
5,101
4,258
Subtotal
2,498
1,982
2,603
7,611
Equity securities
Unearned premiums
7,953
€ mn
Total¹
14,222
12,746
For entities included in the CGU of the Asset Management business
segment, key assumptions include assets under management growth,
cost-income ratio, and risk capital. The key assumptions are based on
the current market environment. The discount rate for the CGU Asset
Management is 10.2% and the eternal growth rate is 1.0%.
The new-business value calculation is based on a best estimate of
one year of value of new business, multiplied by a factor (multiple) to
capture expected future new business. The best estimate of new
business is generally derived from the achieved value of new business.
The new business multiple accounts for the risk and the growth
associated with future new business in analogy to the discount rate
and the growth rate in a discounted earnings method. For all CGUS in
the Life/Health business segment, a multiple of not more than ten
times the value of new business is applied.
SENSITIVITY ANALYSIS
Sensitivity analyses were performed with regard to discount rates and
key value drivers of the business plans.
For the CGUS in the Property-Casualty business segment and for
the CGU Asset Management, sensitivity analyses were performed
13 Unearned premiums
1_Consists of liabilities to banks and customers due within one year of € 12,653 mn (2017: € 10,995 mn), 1-5 years of
€ 819 mn (2017: € 1,097 mn) and over 5 years of € 750 mn (2017: € 654 mn).
8,934
Payable on demand and other deposits
3,821
with respect to the long-term sustainable combined ratios and cost-
income ratios. For all CGUS discounted earnings value sensitivities still
exceeded their respective carrying amounts - though for the CGU
Insurance Asia in the business segment Property-Casualty a simulta-
neous increase of 0.5% points in the discount rate and the combined
ratio results in the recoverable amount of the CGU getting close to its
respective carrying value.
In the Life/Health business segment, sensitivity analyses were
performed based on MCEV sensitivity testing on the reference rate.
The analyses have shown that in case of a decrease in reference rates
by 50 basis points, the appraisal value of each CGU still exceeds its
carrying amount.
As of 31 December
Property-Casualty
Life/Health
Consolidation
Local swap curve minus 18 bps credit risk adjustment plus 54 bps
volatility adjustment
12 Liabilities to banks and customers
Liabilities to banks and customers
Other
€ mn
2018
2017
1,115
973
Repurchase agreements and collateral received from securities
lending transactions and derivatives
4,173
As of 31 December
Total
Subtotal
2017
Prior years
Subtotal
Loss and loss adjustments expenses paid
Current year
Prior years
Subtotal
Current year
Foreign currency translation adjustments and other changes¹
Ending balance of discounted loss reserves
As of 31 December
2018
Euro swap curve minus 10 bps credit risk adjustment plus 24 bps
volatility adjustment
2017
Gross
Changes in the consolidated subsidiaries of the Allianz Group
Subtotal
Loss and loss adjustments expenses incurred
Balance carry forward of discounted loss reserves
As of 1 January
17,784
17,065
5,128
4,402
(21)
(26)
22,891
21,442
14 Reserves for loss and loss adjustment
expenses
As of 31 December 2018, the reserves for loss and loss adjustment
expenses of the Allianz Group totaled € 73,054 mn (2017: € 73,292 mn).
The following table reconciles the beginning and ending reserves for
the Property-Casualty business segment for the years ended
31 December 2018 and 2017.
Annual Report 2018 - Allianz Group
123
D_Consolidated Financial Statements
Change in the reserves for loss and loss adjustment expenses in the Property-Casualty business segment
€ mn
2018
For those entities reporting in Euro:
7.5
For other entities:
In determining the business plans, certain key assumptions were
made in order to project future earnings.
For entities included in the CGUs of the Property-Casualty
business segment, the business plans are mainly based on key
assumptions including expense ratio, loss ratio, investment income,
risk capital, market share, premium rate changes, and taxes. The
bases for determining the values assigned to the key assumptions
are current market trends and earnings projections.
The discount rate is based on the capital asset pricing model
(CAPM) and appropriate eternal growth rates. The assumptions,
including the risk-free interest rate, market risk premium, segment
beta, and leverage ratio used to calculate the discount rates, are
generally consistent with the parameters used in the Allianz Group's
planning and controlling process. The discount rates and eternal
growth rates for the CGUs in the Property-Casualty business segment
are as follows:
Discount rates and eternal growth rates for the CGUS
in the Property-Casualty business segment¹
%
SIGNIFICANT ASSUMPTIONS
CGUS in the Property-Casualty business segment
Eternal growth
Discount rate
rate
0.9
9.9
3.0
Insurance German Speaking Countries
Insurance Western & Southern Europe
Insurance Asia
11.7
segment, the Market Consistent Embedded Value (MCEV) and a
multiple of the Market Consistent Value of New Business is used.
MCEV is an industry-specific valuation method to assess the current
value of the in-force portfolio. The Allianz Group uses an economic
balance sheet approach to derive the MCEV, which is directly taken
out of the market value balance sheet (MVBS) as determined using
Solvency II guidance. In case, where no adequate valuation reflecting
a long-term view in line with management judgment and market
experience could be derived from market-consistent methodology,
the Appraisal Value can be derived from a Traditional Embedded
Value (TEV). This was not the case in 2018.
The terminal values are largely based on the expected profits of
the final year of the detailed planning period. Where necessary, the
planned profits are adjusted to reflect long-term sustainable earn-
ings. The financing of the assumed eternal growth in the terminal
values is accounted for by appropriate profit retention.
US Life Insurance
Ceded
467
459
Subtotal
2,104
For all CGUS in the Life/Health business segment, the value in use
is based on an Appraisal Value method, which is derived from the
Embedded Value and new-business value calculation. As a starting
point for the impairment test for the CGUS in the Life/Health business
2,100
7,254
11,848
ASSET MANAGEMENT
Total
VALUATION TECHNIQUES
The recoverable amounts for all CGUS are determined on the basis of
value in use calculations. The Allianz Group applies generally
acknowledged valuation principles to determine the value in use.
For all CGUS in the Property-Casualty business segment and for
the CGU Asset Management, the Allianz Group mainly uses the dis-
counted earnings method to derive the value in use. Generally, the
basis for the determination of the discounted earnings value is the
business plan ("detailed planning period") as well as the estimate of
the sustainable returns and eternal growth rates, which can be as-
sumed to be realistic on a long-term basis ("terminal value") for the
operating entities included in the CGU. The discounted earnings value
is calculated by discounting the future earnings using an appropriate
discount rate. The business plans applied in the value in use calcula-
tions are the results of the structured management dialogues
between the Board of Management of Allianz SE and the operating
entities in connection with a reporting process integrated into these
dialogues. Generally, the business plans comprise a planning horizon
of three years and are based on the current market environment.
7,423
12,330
3.2
10.2
2.7
CGUS in the Life/Health
business segment
Insurance German
Speaking Countries
Insurance Germany -
Health
Insurance Western &
Southern Europe
Insurance Central &
Eastern Europe
Global Insurance Lines &
Anglo Markets, Middle
East and Africa
US Life Insurance
Reference rates for the CGUS in the Life/Health business segment
Reference rate for entities
Euro swap curve minus 10 bps credit risk adjustment plus 24 bps
volatility adjustment
CHF swap curve minus 10 bps credit risk adjustment plus 4 bps
volatility adjustment
Euro swap curve minus 10 bps credit risk adjustment plus 24 bps
volatility adjustment
Euro swap curve minus 10 bps credit risk adjustment plus 24 bps
volatility adjustment
For those entities reporting in Euro:
Euro swap curve minus 10 bps credit risk adjustment plus 24 bps
volatility adjustment
with Appraisal Value based on MCEV
The following table provides an overview of the reference rates
for the CGUS in the Life/Health business segment:
Reference rates used for the calculation of the best estimate follow
EIOPA specifications for the Solvency II guidance.
strategy and asset allocation of the entity. The risk margin ensures
that the value of the technical provisions is equivalent to the amount
that the entity would be expected to require in order to take on and
meet the insurance and reinsurance obligations.
8.9
1.3
Global Insurance Lines & Anglo Markets, Middle East and Africa
Specialty Lines I
Specialty Lines II
9.0
1.6
8.2
1.4
7.7
1.0
Insurance Iberia & Latin America
Insurance Central & Eastern Europe
1 The table provides an overview of weighted key parameters on CGU level of the country-specific discount rates and
eternal growth rates used.
For entities included in the CGUS of the Life/Health business segment,
the MCEV is the excess of assets over liabilities of the MVBS according
to the Solvency II requirements. Assets and liabilities included in the
MVBS are measured at their market value as of the reporting date.
Technical provisions are an essential part of the liabilities included in
the MVBS and generally consist of the best estimate plus a risk margin.
The best estimate corresponds to the probability-weighted average of
future cash flows considering the time value of money, using the rele-
vant risk-free interest rate term structure. The calculation of the best
estimate is based on assumptions made for demographic factors
(e.g. mortality, morbidity, lapse/surrender rates), expense allowances,
taxation, assumptions on market conditions for market consistent
projections (e.g. reference rates, volatilities) as well as investment
122
Annual Report 2018 - Allianz Group
D_Consolidated Financial Statements
Local swap curve minus 10 bps credit risk adjustment plus volatility
adjustment for the following currencies only (HRK: 12 bps, CZK: 17
bps, PLN: 9 bps)
Net
sheet, the underlying business development of these non-life reserves
is still considered in the loss ratio. Therefore the tables below show the
loss development by accident year including the business develop-
ment of discounted loss reserves.
Ceded
LOSS PAYMENTS FOR THE INDIVIDUAL ACCIDENT YEARS (PER CALENDAR YEAR, NET)
Loss payments for the individual accident years (per calendar year, net)
€ mn
D_Consolidated Financial Statements
Accident year
2009
Annual Report 2018 - Allianz Group
Calendar year
2010
2011
2012
2013
2014
2015
and prior
2016
124
The run-off triangle, also known as the "loss triangle", is a tabular
representation of loss-related data (such as payments, loss reserves,
ultimate losses) in two time-related dimensions. One of these is the
calendar year, the other is the accident year (year of loss occurrence).
Run-off triangles - as the basis for measuring loss reserves - express
how the loss reserves change over the course of time due to pay-
ments made and new estimates of the expected ultimate loss at the
respective reporting date.
(3,883)
(4,096)
287
(3,809)
(8,966)
52,475
The data is only presented on a net basis, as this is considered to
be more meaningful in order to represent the retained impact on Group
results. The run-off triangles are not prepared on a currency-adjusted
basis. This means all figures are translated from the respective local
currency into the Allianz Group presentation currency (Euro), con-
sistently using the exchange rates applicable at the respective
reporting date. This ensures that the reserves reconcile with
reserves in the consolidated balance sheet.
62,093
52,505
1_Include effects of foreign currency translation adjustments for prior year's claims of gross € 26 mn (2017: € (2,127) mn) and of net € (70) mn (2017: € (1,579) mn) and for current year claims of gross € (44) mn (2017: € (406) mn) and of net € (41) mn
(2017: € (322) mn).
Prior years' net loss and loss adjustment expenses incurred reflect the
changes in estimation charged or credited to the consolidated
income statement in each year with respect to the reserves for loss
and loss adjustment expenses established as of the beginning of that
year. During the year ended 31 December 2018, the Allianz Group
recorded additional income of € 1,981 mn (2017: € 1,927 mn) net in
respect of losses occurring in prior years. During the year ended
31 December 2018, this amount, expressed as a percentage of the
net balance of the beginning of the year, was 3.5% (2017: 3.4%).
CHANGES IN HISTORICAL RESERVES
FOR LOSS AND LOSS ADJUSTMENT EXPENSES (LAE)
The analysis of loss and LAE reserves by actuaries and management
is conducted by line of business and separately for specific claim
types such as asbestos and environmental claims. The origin year of
losses is taken into consideration by analyzing each line of business
by accident year. While this determines the estimates of reserves for
loss and LAE by accident year, the effect in the consolidated income
statement in the respective calendar year combines the accident year
loss ratio for the current year with the favorable or adverse develop-
ment from prior years (run-off).
Although discounted loss reserves have been reclassified to
"Reserves for insurance and investment contracts" in the balance
(9,587)
274
2017
Total
2013
3,147
1,113
2,090
7,181
15,449
27,828
28,979
2,496
729
1,169
1,890
7,009
12
2014
2018
14,443
1,972
2009
26,167
26,167
2010
12,364
14,094
7,434
26,459
5,284
6,945
14,316
26,545
2012
3,979
2011
Gross
(4,157)
61,442
(9,874)
57,254
36,515
(2,670)
33,845
38,305
(4,954)
(8,417)
33,351
924
(1,981)
(2,043)
116
(1,927)
33,610
(2,905)
(1,746)
65,671
(9,874)
Net
62,093
(9,587)
52,505
61,617
(8,119)
56,314
53,497
(287)
3,809
4,055
(298)
3,757
66,189
4,096
56,314
31,864
(4,838)
(30,778)
567
(125)
442
(2,232)
646
2,735
(1,586)
(68)
67
65,598
(9,240)
56,358
66,189
135
36,262
(33,513)
2,573
31,425
(17,859)
775
(17,084)
(17,749)
1,080
(32,330)
(16,669)
1,798
(15,246)
(15,764)
1,655
(14,109)
(34,903)
(17,044)
16
(56)
45
2,640
1,477
Additions
78
830
316
3,024
109
418
Changes in the consolidated subsidiaries of the Allianz Group
6
18
(12)
Disposals and reclassifications into non-current assets and assets of disposal
groups classified as held for sale
845
(14)
1,432
2,941
3,938
7,420
4,318
3,995
7,283
4,381
2,786
Accumulated depreciation as of 1 January
(4,633)
(2,887)
(971)
(4,643)
(2,904)
Carrying amount as of 1 January
(997)
Cost as of 1 January
15,410
(46)
(585)
(317)
(70)
(565)
(303)
Impairments
(71)
Reversals of impairments
(70)
(1)
(2)
(106)
(1)
1
(4)
(61)
Depreciation/Amortization
(22)
(10)
(82)
Reclassifications
(63)
23
(15)
(57)
(33)
(20)
Foreign currency translation adjustments
(13)
(2)
6
(41)
17
Carrying amount as of 31 December
Equipment
for own use
Tax receivables
Income taxes
1,798
2,032
Other taxes
1,998
17,270
1,742
3,796
3,775
Accrued dividends, interest, and rent
6,585
6,671
Prepaid expenses
Subtotal
507
18,673
(594)
Policyholders
6,460
6,134
Agents
4,394
4,231
Subtotal
Reinsurance
2,594
Other
5,478
4,904
Less allowances for doubtful accounts
(600)
2,942
Software
442
489
1,432
7,168
7,159
1,991
1,876
39,209
1,378
37,731
2017
Real estate held
Real estate held
for own use
Software
Equipment
2018
Derivative financial instruments used for hedging that meet the
criteria for hedge accounting, and firm commitments¹
2,786
2,941
538
Property and equipment
Real estate held for own use
Software
Equipment
Subtotal
2,934
Other assets
1_Mainly level 2 for fair value measurement.
2_Includes other assets due within one year of € 32,802 mn (2017: € 32,008 mn).
PROPERTY AND EQUIPMENT
Property and equipment
€ mn
2,856
Total²
Global Insurance Lines & Anglo Markets, Middle East and
Africa
Accumulated depreciation as of 31 December
2,9342
1_The following paragraphs only include the CGUS that contain goodwill.
121
D_Consolidated Financial Statements
The carrying amounts of goodwill are allocated to the
Allianz Group's CGUS as of 31 December 2018 and 2017 as follows:
Allocation of carrying amounts of goodwill to CGUS
€ mn
Annual Report 2018 - Allianz Group
As of 31 December
Insurance German Speaking Countries
2018
2017
299
268
Insurance Western & Southern Europe
PROPERTY-CASUALTY
1,195
The business segment Asset Management is represented by the CGU
Asset Management, mainly including Allianz Global Investors and
PIMCO.
Global Insurance Lines & Anglo Markets, Middle East and Africa
including Australia, Ireland, the United Kingdom, Middle East and
Africa, and
ALLOCATION PRINCIPLES
For the purpose of impairment testing, the Allianz Group has allocated
goodwill to CGUS¹. These CGUS represent the lowest level at which
goodwill is monitored for internal management purposes.
CGUS in the Property-Casualty business segment are:
Insurance German Speaking Countries, including Germany and
Switzerland,
Insurance Western & Southern Europe, including Belgium, France,
Greece, Italy, Luxembourg, the Netherlands, and Turkey,
Insurance Asia,
Insurance Iberia & Latin America, including Mexico, Portugal,
South America and Spain,
US Life Insurance.
Insurance Central & Eastern Europe, including Austria, Bulgaria,
Croatia, Czech Republic, Hungary, Poland, Romania, Russia,
Slovakia, and Ukraine,
Specialty Lines I, including Allianz Re, Allianz Global Corporate &
Specialty and Credit Insurance, and
Specialty Lines II, including Allianz Partners.
CGUS in the Life/Health business segment are:
Insurance German Speaking Countries, including Germany and
Switzerland
Insurance Germany - Health,
Insurance Western & Southern Europe, including Belgium, France,
Greece, Italy, Luxembourg, the Netherlands, and Turkey,
Insurance Central & Eastern Europe, including Austria, Bulgaria,
Croatia, Czech Republic, Hungary, Poland, Romania, Russia,
Slovakia, and Ukraine,
Global Insurance Lines & Anglo Markets, Middle East and Africa
including Australia, Ireland, the United Kingdom, Middle East and
Africa,
IMPAIRMENT TEST FOR GOODWILL
1,242
135
2,494
Subtotal
LIFE/HEALTH
Insurance German Speaking Countries
615
615
2,803
Insurance Germany - Health
331
Insurance Western & Southern Europe
631
639
Insurance Central & Eastern Europe
45
331
Insurance Asia
21
Specialty Lines II
99
Insurance Iberia & Latin America
21
21
Insurance Central & Eastern Europe
311
265
311
Africa
538
493
Specialty Lines I
38
38
Global Insurance Lines & Anglo Markets, Middle East and
2,856¹
Additions are mainly related to goodwill arising from the acquisition
of Sound Harbor Partners, a New York based private credit manager.
Additions are mainly related to goodwill arising from the acquisition
of Servicios Compartidos Multiasistencia S.L., Madrid.
Annual Report 2018 - Allianz Group
D_Consolidated Financial Statements
11 Intangible assets
Intangible assets
€ mn
As of 31 December
120
Goodwill
Other²
Total
2018
2017
12,330
11,848
Distribution agreements¹
815
1_As of 31 December 2018, assets pledged as security and other restrictions on title were € 104 mn (2017: € 103 mn).
2_As of 31 December 2018, includes € 1,926 mn (2017: € 1,838 mn) for self-developed software and € 1,007 mn (2017: € 948 mn) for software purchased from third parties.
4,318
1,378
2,941
2,786
1,432
1,014
3,870
4,879
Cost as of 31 December
2,880
4,633
2,887
7,812
4,259
3,938
7,420
997
2017
918
496
32
Disposals
123
(556)
Foreign currency translation adjustments
Impairments
359
Carrying amount as of 31 December
11,848
Accumulated impairments as of 31 December
Cost as of 31 December
292
12,622
440
12,288
2018
12,330
621
Additions
11,848
13,767
13,262
1 Primarily include the long-term distribution agreements with Commerzbank AG and Banco Popular S.A.
2 Primarily include acquired business portfolios, customer relationships, heritable building rights, land use rights, lease
rights, renewal rights, and brand names.
GOODWILL
Goodwill
(440)
12,372
€ mn
2018
12,288
2017
12,812
Accumulated impairments as of 1 January
(440)
Carrying amount as of 1 January
Cost as of 1 January
28,702
29,560
2,021
54,563
529,687
513,687
Foreign currency translation adjustments
85
(215)
55,581
Changes in the consolidated subsidiaries
Changes due to fluctuations in market value
(10,436)
(2,603)
Changes due to valuation differences charged to income
443
3,836
of the Allianz Group
As of 31 December
As of 1 January
Latent reserves for premium refunds
16,101
(19)
Changes in the consolidated subsidiaries
of the Allianz Group
2018
2017
Changes
984
698
466,406
62,573
707
440,926
As of 31 December
16,901
16,196
71,776
113
7
45,673
Total
29,367
3,268
24,941
Annual Report 2018 - Allianz Group
128
8.8
2.5
Premiums collected
8.6
Belgium
11.1
1.6
11.4
1.5
Switzerland
2.2
55,581
2,051
of the Allianz Group
62,573
71,776
2018
2017
As of 1 January
440,926
Changes recorded in the consolidated income statements
433,610
(4,096)
436,830
Foreign currency translation adjustments
5,250
(4,055)
429,556
(13,056)
Changes in the consolidated subsidiaries
Balance carry forward of discounted loss reserves
Subtotal
29.3
Foreign currency translation adjustments
As of 1 January
2017
47,242
70.2
71.6
67.3
68.6
71.1
68.3
70.2
70.4
2018
48,305
70.0
71.3
68.7
66.8
69.4
69.5
70.0
2015
46,430
71.1
72.7
68.3
69.1
70.1
70.3
2016
46,588
70.8
72.4
67.9
69.8
16,196
68.4
68.3
€ mn
As of 31 December
Aggregate policy reserves
Reserves for premium refunds
Other insurance reserves
Total
Reserves for insurance and investment contracts
AGGREGATE POLICY RESERVES
€ mn
Reserves for premium refunds
€ mn
2018
2017
Amounts already allocated under local statutory
or contractual regulations
Aggregate policy reserves
67.8
15_Reserves for insurance and investment
contracts
2023 amounted to € 20,347 mn and those expected to be due after
2023 amounted to € 18,171 mn.
69.0
69.8
70.7
The ultimate loss of an accident year comprises all payments made
for that accident year up to the reporting date, plus the loss reserves
at the reporting date. Given complete information regarding all
losses incurred up to the reporting date, the ultimate loss for each
accident-year period would remain unchanged. In practice, however,
the ultimate loss (based on estimates) is exposed to fluctuations that
reflect the increase in knowledge regarding the loss cases. The loss
ratio presented above deviates from the reported loss ratio because
the ultimate loss in the table above is based on the sum of the
payments plus the loss reserves, not the incurred loss as stated in the
consolidated income statements. This means that effects like changes
in consolidated subsidiaries, foreign currency translation and unwinding
of discounted loss reserves are presented differently.
CONCENTRATION OF INSURANCE RISK
IN THE PROPERTY-CASUALTY BUSINESS SEGMENT
Further risk disclosure requirements of IFRS 4 in connection with
IFRS 7 are reflected in the following sections of the Risk and Oppor-
tunity Report within the Group Management Report:
RESERVES FOR PREMIUM REFUNDS
Internal risk capital framework,
Underwriting risk in the section Quantifiable risks and opportuni-
ties by risk category.
CONTRACTUAL CASH FLOWS
As of 31 December 2018, the reserves for loss and loss adjustment
expenses which are expected to be due in 2019 amounted to
€ 17,841 mn, while those expected to be due between 2020 and
126
Annual Report 2018 - Allianz Group
D_Consolidated Financial Statements
Risk based steering and risk management,
1.6
29.5
1.5
9,693
293,849
German Speaking Countries and Central & Eastern Europe
Total
contracts
contracts
303,542
Total
investments
unit-linked
contracts
investments
contracts
Financial
liabilities for
Reserves for
insurance and
Financial
liabilities for
unit-linked
Reserves for
insurance and
286,202
296,636
10,145
683
9,462
10,279
870
9,409
10,434
Iberia & Latin America
84,418
119,745
202,005
83,904
118,101
Western & Southern Europe and Asia Pacific
204,163
USA
2017
As of 31 December
Portfolio acquisitions and disposals
(1,387)
(1,515)
Policyholder charges
(16,460)
(16,566)
(1,058)
Releases upon death, surrender, and withdrawal
1,558
Dividends allocated to policyholders
4,868
3,731
Interest credited
2,061
1,740
2018
Other changes¹
9
1,290
€ mn
Concentration of insurance risk in the Life/Health business segment per reportable segment
As of 31 December 2018 and 2017, the Allianz Group's reserves
for insurance and investment contracts for the business segment
Life/Health are summarized per reportable segment as follows:
IN THE LIFE/HEALTH BUSINESS SEGMENT
The Allianz Group's Life/Health business segment provides a wide
variety of insurance and investment contracts to individuals and
groups in over 30 countries around the world. Individual contracts
include both traditional contracts and unit-linked contracts. Without
taking policyholder participation into account, traditional contracts
generally incorporate significant investment risk for the Allianz Group,
while unit-linked contracts generally result in the contract holder
assuming the investment risk. Traditional contracts include life,
endowment, annuity and health contracts. Traditional annuity contracts
are issued in both deferred and immediate types. In addition, the
Allianz Group's life insurance operations in the United States issue a
significant amount of equity-indexed deferred annuities. In certain
markets, the Allianz Group also issues group life, group health and
group pension contracts.
CONCENTRATION OF INSURANCE RISK
1_Mainly relate to insurance contracts when policyholders change their contract from an unit-linked to an universal life-
type contract.
1,328
4,096
4,157
466,406
As of 31 December
Ending balance of discounted loss reserves
436,830
462,249
Subtotal
440,926
97,127
20,610
117,736
€bn
%
reserves
rate
reserves
rate
%
policy
Aggregate
Aggregate
policy
Guaranteed
2018
For contracts without fixed and determinable payments, the
Allianz Group has made assumptions in estimating the undiscounted
cash flows of contractual policy benefits including mortality, morbidi-
ty, interest crediting rates, policyholder participation in profits, and
future lapse rates. These assumptions represent current best esti-
mates and may differ from the estimates used to establish the
reserves for insurance and investment contracts in accordance with
the Allianz Group's established accounting policy. Due to the uncer-
tainty of the assumptions used, the amount presented could be mate-
rially different from the actual incurred payments in future periods.
The resulting total benefits for insurance and investment con-
tracts in the amount of € 1,414 bn include contracts where the timing
and amount of payments are considered fixed and determinable, as
well as contracts which have no specified maturity dates and may
result in a payment to the contract beneficiary, depending on mortality
and morbidity experience and the incidence of surrenders, lapses, or
maturities. Furthermore, the amounts are undiscounted and do not
include any expected future premiums; therefore they exceed the
reserves for insurance and investment contracts presented in the
consolidated balance sheet.
Guaranteed
As of 31 December 2018, benefits for insurance and investment con-
tracts which are expected to be due in 2019 amounted to € 52 bn,
while those expected to be due between 2020 and 2023 amounted
to € 190 bn and those expected to be due after 2023 amounted to
€1,173 bn.
€ bn
2.2
Italy
54.8
0.4
55.2
0.4
France
Germany
85.9
97.1
0.5
United States
178.7
2.4
190.2
0.6
FUTURE POLICY BENEFITS
Underwriting risk in the section Quantifiable risks and opportuni-
ties by risk category.
Risk based steering and risk management,
115,361
515,537
Total
(4,508)
(4,508)
127
630,898
1,583
284
1,560
Global Insurance Lines & Anglo Markets, Middle East and Africa
Consolidation and Other
109,395
23,478
85,916
1,844
(3,848)
499,060
1,710
(3,848)
119,141
Internal risk capital framework,
Further risk disclosure requirements of IFRS 4 in connection with
IFRS 7 are reflected in the following sections of the Risk and Oppor-
tunity Report within the Group Management Report:
Allianz Group's Life/Health operations in Switzerland and Belgium
have high guaranteed minimum interest rates on older contracts in
their portfolios and, as a result, may be sensitive to declines in invest-
ment rates or a prolonged low interest rate environment.
In most of these markets, the effective interest rates earned on the
investment portfolio exceed these guaranteed minimum interest
rates. In addition, the operations in these markets may also have
significant mortality and expense margins. However, the
2017
As of 31 December
Weighted average guaranteed minimum interest rates of life
insurance entities
The Allianz Group's Life/Health business segment is exposed to
significant investment risk as a result of guaranteed minimum interest
rates being included in most of its non-unit-linked contracts. The
weighted average guaranteed minimum interest rates of the
Allianz Group's largest operating entities in the business segment
Life/Health, comprising 86% (2017: 86%) of the aggregate policy
reserves in this business segment in 2018, can be summarized by
country as follows:
As a result of the considerable diversity in types of contracts
issued, including the offsetting effects of mortality risk and longevity
risk inherent in a combined portfolio of life insurance and annuity
products, the geographic diversity of the Allianz Group's Life/Health
business segment and the substantial level of policyholder participa-
tion in mortality/morbidity risk in certain countries in Western Europe,
the Allianz Group does not believe its Life/Health segment has any
significant concentrations of insurance risk, nor does it believe its net
income or shareholders' equity is highly sensitive to insurance risk.
Furthermore, all of the Allianz Group's annuity policies issued in
the United States meet the criteria for classification as insurance
contracts under IFRS 4 because they include options for contract
holders to elect a life-contingent annuity. These contracts currently do
not expose the Allianz Group to significant longevity risk on a portfolio
level, nor are they expected to do so in the future, as the projected and
observed annuitization rates are very low. Additionally, many of the
Allianz Group's traditional contracts issued in France and Italy do not
incorporate significant insurance risk, although they are accounted
for as insurance contracts because of their discretionary participation
features. Similarly, a significant portion of the Allianz Group's unit-
linked contracts in France and Italy do not incorporate significant
insurance risk.
The majority of the Allianz Group's Life/Health business segment
operations are conducted in Western Europe. Insurance laws and
regulations in Europe have historically been characterized by legal or
contractual minimum participation of contract holders in the profits
of the insurance company issuing the contract. In particular, life
insurance business in Germany, Switzerland, and Austria, which com-
prises approximately 50% (2017: 51%) of the Allianz Group's reserves
for insurance and investment contracts as of 31 December 2018,
includes a substantial level of policyholder participation in all sources
of profit, including mortality/morbidity, investment, and expense. As a
result of this policyholder participation, the Allianz Group's exposure
to insurance, investment and expense risk is mitigated.
D_Consolidated Financial Statements
127
Annual Report 2018 - Allianz Group
618,201
70.3
2015
68.9
71.1
55,619
2015
18,614
2,614
3,208
3,931
15,215
5,182
16,358
57,492
2016
15,655
2,141
2,564
7,585
3,040
7,101
4,066
5,238
7,861
15,564
55,807
2013
23,221
5,223
3,837
7,239
13,957
53,445
2014
20,909
3,105
5,190
27,144
3,894
7,991
2,352
2,954
4,114
5,424
8,327
17,081
1,808
56,358
125
D_Consolidated Financial Statements
ULTIMATE LOSS FOR THE INDIVIDUAL ACCIDENT YEARS AT THE RESPECTIVE REPORTING DATE (NET)
Ultimate loss for the individual accident years at the respective reporting date (net)
€ mn
2009
Annual Report 2018 - Allianz Group
5,262
1,570
11,358
16,708
57,254
2017
13,247
1,625
1,945
1,371
2,356
3,891
5,407
8,454
16,573
56,314
2018
2,815
Calendar year
2012
15,596
1,276
269
303
425
710
1,022
2017
2,261
16,669
30,778
2018
1,791
180
257
7,842
344
31,403
7,929
476
775
1,054
1,850
7,564
16,291
16,409
30,031
2,417
364
546
727
1,004
2,007
2016
52,836
389
1,119
2016
2017
2018
Total
2009
48,539
2015
48,539
36,122
14,729
50,850
2011
30,023
7,218
2010
707
2014
2012
2,484
7,976
17,084
32,330
RESERVES FOR LOSS AND LOSS ADJUSTMENT EXPENSES
FOR THE INDIVIDUAL ACCIDENT YEARS AT THE RESPECTIVE REPORTING DATE (NET)
2013
Reserves for loss and loss adjustment expenses for the individual accident years at the respective reporting date (net)
Accident year
2009
As of 31 December
and prior
2010
2011
€ mn
and prior
2010
2011
231
174
547
270
11,072
1,791
1_Includes effects from foreign currency translation adjustments and other changes.
73
2_The total development 2018 to 2017 of € 1,791 mn represents the cumulative surplus from re-estimating the ultimate loss for prior year claims. Considering foreign currency translation adjustments of net € (70) mn as well as changes in the
consolidated subsidiaries of the Allianz Group and other changes of in total € 259 mn, this leads to an effective run-off of net € 1,981 mn, which can be found in the table "Change in reserves for loss and loss adjustment expenses" within this note.
3 Presentation not meaningful.
FOR THE INDIVIDUAL ACCIDENT YEARS AT THE RESPECTIVE REPORTING DATE (NET)
Calendar year premiums earned and ultimate loss ratios for the individual accident years at the respective reporting date (net)
Premiums
earned (net)
2010
2011
CALENDAR YEAR PREMIUMS EARNED AND ULTIMATE LOSS RATIOS
2012
205
75
34,165
Surplus¹
2,407
1,310
1,453
2,137
118
643
936
958
270
-3
Reduction 2018 versus 2017²
98
960
32,972
2013
%
75.0
2012
41,705
71.9
74.2
72.0
71.9
2013
71.1
72.8
69.2
69.9
2014
43,759
42,047
€ mn
39,898
73.3
%
%
%
Accident year
2014
%
2015
2016
2011
2017
%
%
%
%
2010
39,303
2018
32,158
31,713
29,665
2012
74,939
28,250
29,610
30,007
2013
29,912
74,162
29,029
28,863
29,407
2014
74,346
27,958
27,962
29,074
28,257
2011
2012
2013
Accident year
2014
2015
2016
73,838
2017
Total
2009
74,706
2010
74,653
28,823
2018
28,736
Receivables
30,625
27,588
28,577
28,076
28,837
29,896
31,888
72,397
32,705
2018
72,300
27,513
28,459
27,871
28,764
33,242
2017
33,116
32,211
2015
74,072
27,943
28,990
28,498
29,490
30,560
32,649
2016
73,529
27,834
28,893
28,334
29,206
30,244
72.9
2017
Separation of embedded derivatives
As of 31 December
sured. The Allianz Group monitors the financial condition of its rein-
surers on a regular basis and reviews its reinsurance arrangements
periodically in order to evaluate the reinsurer's ability to fulfill its
obligations to the Allianz Group companies under existing and
planned reinsurance contracts. The Allianz Group's evaluation criteria,
which include the degree of creditworthiness, capital levels, and mar-
ketplace reputation of its reinsurers, are such that the Allianz Group
believes that its reinsurance credit risk is not significant, and historical-
ly has not experienced noteworthy difficulty in collecting claims from
its reinsurers. Additionally, and as appropriate, the Allianz Group may
also require letters of credit, deposits, or other financial guarantees to
further minimize its exposure to credit risk. In certain cases, however,
the Allianz Group does establish an allowance for doubtful amounts
related to reinsurance as appropriate, although this amount was not
significant as of 31 December 2018 and 2017. The Allianz Group
primarily maintains business relations with highly rated reinsurers.
9 Deferred acquisition costs
2018
2017
Carrying amount as of 1 January
4,633
5,211
Foreign currency translation adjustments
187
Changes in aggregate policy reserves ceded to reinsurers
€ mn
(513)
87
70
Other changes
(19)
(135)
€ mn
Carrying amount as of 31 December
4,887
4,633
Changes recorded in the consolidated income statements
As of 31 December
Changes in aggregate policy reserves ceded to reinsurers are as
follows:
16,400
2018
D_Consolidated Financial Statements
8 Reinsurance assets
Reinsurance assets
€ mn
As of 31 December
2017
2018
Unearned premiums
127
16,375
1,713
Reserves for loss and loss adjustment expenses
9,672
10,112
Aggregate policy reserves
4,887
4,633
Other insurance reserves
128
Total
1,504
Deferred acquisition costs
1,274
2017
2017
24,887
9,576
Changes in the consolidated subsidiaries
of the Allianz Group
Foreign currency translation adjustments
Changes in shadow accounting
Amortization
333
(1,256)
2,575
(824)
2018
23,184
9,856
(8,239)
Carrying amount as of 31 December
23,184
Annual Report 2018 - Allianz Group
119
D_Consolidated Financial Statements
10 _ Other assets
Other assets
€ mn
2018
(9,199)
Carrying amount as of 1 January
Additions
27,709
27,709
The Allianz Group reinsures a portion of the risks it underwrites in
an effort to control its exposure to losses and events and to protect its
capital resources. For natural catastrophe events, the Allianz Group
has a centralized program in place that pools exposures from its
subsidiaries by internal reinsurance agreements. Allianz SE limits
exposures in this portfolio through external reinsurance. For other
risks, the subsidiaries of the Allianz Group have individual reinsurance
programs in place. Allianz SE participates with up to 100% on an
arm's length basis in these cessions, in line with local requirements.
The risk coming from these cessions is also limited by external retro-
cessions.
The reserves for loss and loss adjustment expenses ceded to reinsurers
in the business segment Property-Casualty amounted to € 8,966 mn
(2017: € 9,587 mn) as of 31 December 2018. Their change is shown in
the respective table in note 14.
23,184
Reinsurance involves credit risk and is subject to aggregate loss
limits. Reinsurance does not legally discharge the respective Allianz
company from primary liability under the reinsured policies. Although
the reinsurer is liable to this company to the extent of the business
ceded, the Allianz company remains primarily liable as the direct
insurer for all the risks it underwrites, including the share that is rein-
Deferred acquisition costs
Property-Casualty
Subtotal
Deferred sales inducements
Present value of future profits
Total
Changes in deferred acquisition costs
Life/Health
4,796
4,715
21,727
17,568
451
26,523
22,283
803
383
€ mn
450
Net
1,746
Ceded
60
€ mn
(33,610)
Gross
Impairments of investments (net)
2018
(31,864)
28 Impairments of investments (net)
(20,908)
612
(20,296)
(2,799)
4
(54,459)
2,302
(52,157)
2018
2017
Impairments
Available-for-sale investments
2017
Equity securities
(881)
Gross
Ceded
Net
(36,262)
4,838
(31,425)
Group
(56)
Consoli-
dation
11,534
Property-
Casualty
2018
2017
CONSOLIDATION
(2,472)
(2,387)
Liabilities to banks and customers
(91)
(150)
Total
(20,486)
689
(19,798)
10,937
Deposits retained for reinsurance ceded
(49)
(45)
1_Includes effects from the application of IFRS 15 as described in note 2.
Certificated liabilities
(240)
(239)
Subordinated liabilities
(606)
(622)
Other
(49)
Total
(1,035)
(93)
(1,149)
25 Claims and insurance benefits incurred (net)
Claims and insurance benefits incurred (net)
€ mn
Life/Health
104
33
Debt securities
2017
2018
2017
Investment management expenses
Expenses from real estate held for investment
(732)
(724)
PROPERTY-CASUALTY
(376)
(375)
Fees from credit and assistance business
(1,328)
(1,202)
Expenses from fixed assets of renewable energy investments
(225)
(170)
Total
(1,333)
Service agreements
(332)
(306)
(1,269)
(1,660)
(1,509)
LIFE/HEALTH
Service agreements
(70)
(59)
30 Acquisition and
2018
€ mn
Fee and commission expenses
31 Fee and commission expenses
(340)
(56)
(100)
5,427
Subtotal
(3,139)
(937)
5
(51,218)
Other
(34)
(72)
Non-current assets and assets of disposal groups classified
as held for sale
(12)
(56,644)
(233)
(3,185)
(1,242)
Reversals of impairments
2,349
83
Total
(3,152)
(1,160)
Annual Report 2018 - Allianz Group
135
D_Consolidated Financial Statements
29_Investment expenses
Investment expenses
€ mn
Subtotal
2,231
Loading and exit fees¹
€ mn
(97)
(1,543)
(1,346)
6,096
6,546
134
Annual Report 2018 - Allianz Group
24 Fee and commission income
Fee and commission income
€ mn
2018
2017
D_Consolidated Financial Statements
26 Change in reserves for insurance and
investment contracts (net)
Change in reserves for insurance and investment contracts (net)
€ mn
PROPERTY-CASUALTY
Fees from credit and assistance business
1,379
1,204
Consoli-
Property-
Casualty
Life/Health
dation
Group
Service agreements
386
412
2018
Subtotal
1,765
(142)
1,616
(1,248)
Total
Interest from loans to banks and customers
3,831
4,231
Other
857
715
Rent from real estate held for investment
892
900
Subtotal
7,640
7,891
Other
934
1,194
Total
21,616
21,848
REALIZED LOSSES
Available-for-sale investments
Equity securities
(586)
(463)
Debt securities
(815)
(786)
Subtotal
Other
Subtotal
(1,402)
Subtotal
Gross
(9,607)
63
Management and advisory fees¹
7,590
6,896
Net
(485)
(13,998)
56
(14,427)
411
543
Performance fees
419
437
Other
43
28
8,462
7,904
Subtotal
CORPORATE AND OTHER
Service agreements
1,540
1,434
Investment advisory and banking activities
691
916
27 Interest expenses
Interest expenses
61
(243)
2
ASSET MANAGEMENT
(77)
(9,927)
LIFE/HEALTH
Ceded
9
235
(1)
243
Investment advisory
1,418
1,338
Net
(235)
(9,372)
(78)
(9,684)
Service agreements
130
administrative expenses (net)
115
2017
Subtotal
1,548
1,454
Gross
(487)
(14,059)
56
(14,489)
Ceded
Acquisition and administrative expenses (net)
Acquisition costs
(672)
Net deferred tax assets
DEFERRED TAX LIABILITIES
Effective tax rate
€ mn
Financial assets carried at fair value through income
269
206
Investments
23,263
24,949
2018
2017
Deferred acquisition costs
6,944
6,309
Income before income taxes
10,399
10,148
Other assets
901
1,622
Applied weighted income tax rate
25.0%
29.6%
Intangible assets
692
637
Calculated income taxes
2,596
on tax losses carried forward
Effect of netting
3,004
Pensions and similar obligations
959
DEFERRED TAX ASSETS
Financial assets carried at fair value through income
Investments
40
34
11,574
8,992
623
1,256
1,281
1,394
80
99
1,775
1,941
27,268
27,126
4,158
4,662
Other liabilities
1,166
990
Total deferred tax assets
47,963
46,495
Non-recognition or valuation allowance for deferred tax assets
(720)
(737)
(46,285)
(44,827)
931
Insurance reserves
15,245
12,918
For the year ended 31 December 2018, the write-down of deferred
taxes on tax losses increased the tax expenses by € 14 mn (2017:
€ 52 mn). The reversal of write-down of deferred tax assets on tax
losses carried forward resulted in deferred tax income of € 4 mn
(2017: € 49 mn). Due to the use of tax losses carried forward, for
which deferred tax assets had previously been written off, the current
income tax expenses decreased by € 1 mn (2017: € 3 mn). Deferred
tax income increased by € 9 mn (2017: € 10 mn) due to the use of tax
losses carried forward, for which deferred tax assets had previously
been written off. The above-mentioned effects are shown in the
reconciliation statement as "effects of tax losses".
The tax rates used in the calculation of the Allianz Group's
deferred taxes are the applicable national rates, which in 2018
In 2018, the posting of deferred taxes in France was changed due to
a refined calculation methodology, which led to a decrease in
deferred tax assets and liabilities before netting, particularly for
investments and insurance reserves. The comparative amounts for
2017 were adjusted accordingly by € (10.1) bn.
Taxable temporary differences associated with investments in
Allianz Group companies for which no deferred tax liabilities are
recognized, as the Allianz Group is able to control the timing of their
reversal, and which will not reverse in the foreseeable future,
amounted to € 1,844 mn (2017: € 1,673 mn). Deductible temporary
differences arising from investments in Allianz Group companies for
which no deferred tax assets are recognized, as it is not probable that
Annual Report 2018 - Allianz Group
137
D_Consolidated Financial Statements
they will reverse in the foreseeable future, amounted to € 92 mn
(2017: € 65 mn).
TAX LOSSES CARRIED FORWARD
Tax losses carried forward at 31 December 2018 of € 7,531 mn (2017:
€ 8,395 mn) resulted in the recognition of deferred tax assets to the
extent that there is sufficient certainty that the unused tax losses will
be utilized. At the reporting date, this prerequisite was not fulfilled for
a partial amount of € 2,737 mn (2017: € 2,684 mn). According to tax
legislation as of 31 December 2018, an amount of € 2,514 mn (2017:
€2,353 mn) of these tax losses may be carried forward indefinitely
and in unlimited amounts, whereas an amount of € 224 mn (2017:
€331 mn) of these tax losses carried forward will expire over the next
20 years if not utilized.
Tax losses carried forward are scheduled according to their expiry
periods as follows:
Tax losses carried forward
€ mn
2019
2020-2021
2022-2023
2024-2028
>10 years
Unlimited
Total
2018
46
113
42
682
607
6,041
7,531
138
Annual Report 2018 - Allianz Group
(3,976)
(3,121)
Net deferred tax assets (liabilities)
29.0%
Trade tax and similar taxes
220
211
Pensions and similar obligations
2,490
2,516
Net tax-exempt income
(198)
(221)
Other liabilities
561
576
Effects of tax losses
Other effects
2017
Effective income taxes
Total deferred tax liabilities
50,364
49,734
77
(43)
Effect of netting
(46,285)
(44,827)
Effective tax rate
2,696
25.9%
2,941
Net deferred tax liabilities
4,080
4,906
(10)
Investment advisory
2018
Deferred acquisition costs
Other assets
Intangible assets
(2,134)
(1,992)
(13,542)
(13,537)
CONSOLIDATION
1,983
1,873
LIFE/HEALTH
Total
(4,302)
(3,857)
7,176
(3,833)
(4,707)
1_Includes effects from the application of IFRS 15 as described in note 2.
Administrative expenses
(1,802)
(1,858)
Subtotal
(5,635)
(6,565)
ASSET MANAGEMENT
32 Income taxes
Personnel expenses
(2,542)
(2,378)
Non-personnel expenses
(1,660)
(1,583)
Subtotal
Income taxes
(3,259)
Subtotal
(641)
Subtotal
(742)
(700)
ASSET MANAGEMENT
Commissions¹
Other
€ mn
Subtotal
(1,737)
(1,400)
(13)
(130)
(1,749)
(1,530)
2018
2017
CORPORATE AND OTHER
PROPERTY-CASUALTY
Acquisition costs¹
Service agreements
(1,759)
(1,670)
(10,317)
(10,278)
Investment advisory and banking activities
(375)
(322)
Administrative expenses
(3,225)
Subtotal
(4,202)
(3,961)
Items that may be reclassified to profit or loss in future periods
Foreign currency translation adjustments
134
Available-for-sale investments
Cash flow hedges
Share of other comprehensive income of associates and joint
ventures
1,513
4
(89)
531
8
Miscellaneous
ུཝ
(10)
(4)
42
181
Items that may never be reclassified to profit or loss
Changes in actuarial gains and losses on defined benefit
plans
(73)
(46)
Total
1,609
581
D_Consolidated Financial Statements
ranged from 10.0% to 40.0%, with changes to tax rates that had
already been adopted in Brazil, Greece, Netherlands, Slovakia
and Taiwan by 31 December 2018 taken into account.
Deferred tax assets on losses carried forward are recognized to
the extent to which it is more likely than not that sufficient future
taxable profits will be available for realization. Entities which suffered
a tax loss in either the current or the preceding period recognized
deferred tax assets in excess of deferred tax liabilities amounting to
€ 525 mn (2017: € 351 mn), as there was convincing other evidence
that sufficient taxable profit will be available.
DEFERRED TAX ASSETS AND LIABILITIES
Deferred tax assets and liabilities
€ mn
The recognized income taxes for the year ended 31 December 2018
are € 100 mn above (2017: € 63 mn below) the calculated income
taxes, which are determined by multiplying the respective income
before income taxes with the applicable country-specific tax rates.
The following table shows the reconciliation from the calculated
income taxes to the effectively recognized income taxes for the
Allianz Group. The Allianz Group's reconciliation is a summary of the
individual company-related reconciliations, which are based on
the respective country-specific tax rates taking into consideration
consolidation effects with an impact on the Group result. The
applicable tax rate used in the reconciliation for domestic
Allianz Group companies includes corporate tax, trade tax, and
the solidarity surcharge, and amounted to 31.0% (2017: 31.0%).
The effective tax rate is determined on the basis of the effective
income tax expenses on income before income taxes.
As of 31 December
2017
2018
€ mn
Income taxes relating to components of other comprehensive income
€ mn
CORPORATE AND OTHER
Administrative expenses
(1,171)
(1,578)
Current income taxes
Subtotal
(1,171)
(1,578)
Deferred income taxes
Total
2018
2017
(1,993)
(2,129)
Tax losses carried forward
Insurance reserves
(703)
(2,696)
(2,941)
CONSOLIDATION
(50)
(61)
Total
(24,600)
(25,702)
1 Include € 559 mn (2017: € 508 mn) ceded acquisition costs.
136
During the year ended 31 December 2018, current income taxes
included income of € 329 mn (2017: € 160 mn) related to prior years,
deferred income taxes included expenses of € 239 mn (2017:
€ 43 mn) related to prior years.
Of the deferred income taxes for the year ended
31 December 2018, expenses of € 566 mn (2017: € 581 mn) are
attributable to the recognition of deferred taxes on temporary
differences, and expenses of € 145 mn (2017: € 183 mn) are attributable
to tax losses carried forward. Changes of applicable tax rates due to
changes in tax law produced deferred tax income of € 8 mn (2017:
expenses of € 48 mn).
For the years ended 31 December 2018 and 2017, the income
taxes relating to components of other comprehensive income consist
of the following:
Annual Report 2018 - Allianz Group
(812)
6,783
(1,204)
13,321
4_Relates to hybrid equity issued by subsidiaries.
Bonds outstanding as of 31 December 2018
€ mn
Certificated liabilities
Allianz Finance II B.V., Amsterdam
2,981
2,981
2,8743
4.75%
10,449
10,449
10,377³
4.37%
45
45
45
1.13%
13,475
13,475
13,295
ISIN
Year of issue
Currency
Notional amount
Coupon in %
Maturity date
DE000A1AKHB8
2009
EUR
3 Previous-year figures have been adjusted without impact on the total amount of subordinated liabilities.
1,500
2_Change due to the redemption of a € 0.5 bn certificated bond in the first quarter of 2018.
Total subordinated liabilities
3,050
7,533
8,033
4.75%
1.81%
2.49%
504
504
506
0.18%
1,163
1,163
1,058
Contractual interest rate
1.70%
Total certificated liabilities
2,656
3,493
3,050
9,199
9,596
Subordinated bonds
Fixed rate
Contractual interest rate
Floating rate
Current interest rate
Hybrid equity4
Floating rate
Current interest rate
1 Except for interest rates. Interest rates represent the weighted average.
2,989
4.750
2016
3.000
13 March 2028
DE000A180B80
2016
EUR
750
1.375
21 April 2031
DE000A1HG1L4
2013
GBP
750
4.500
13 March 2043
Subordinated liabilities
Allianz SE, Munich
DE000A1RE1Q3
2012
EUR
1,500
5.625
17 October 2042
DE000A14J9N8
2015
EUR
1,500
2.241
7 July 2045
DE000A2DAHN6
2017
750
DE000A180B72
EUR
DE000A1HG1K6
EUR
750
0.000
22 July 2019
21 April 2020
3-months Euribor
DE000A19S4T0
2017
EUR
500
+50 bps
7 December 2020
DE000A1GORU9
2012
EUR
1,500
3.500
14 February 2022
DE000A19S4U8
2017
EUR
750
0.250
6 June 2023
DE000A19S4V6
2017
EUR
750
0.875
6 December 2027
2013
1,493
As of
31 December 2017
31 December 2018
119,141
1 These reclassifications mainly relate to insurance contracts when policyholders change their contracts from an unit-
linked to an universal life-type contract.
2_Consists of € 71,586 mn (2017: € 74,878 mn) unit-linked insurance contracts and € 43,774 mn (2017: € 44,263 mn) unit-
linked investment contracts.
17 Other liabilities
Other liabilities
€ mn
As of 31 December
Payables
Policyholders
Reinsurance
2018
2017
Agents
Subtotal
Payables for social security
4,880
4,626
1,655
1,589
1,652
1,562
8,186
7,777
425
429
Tax payables
Income taxes
1,530
2,006
115,361
Other taxes, interest, and penalties
As of 31 December²
(1,596)
16 Financial liabilities for unit-linked contracts
Financial liabilities for unit-linked contracts
€ mn
2018
2017
As of 1 January
119,141
111,325
Foreign currency translation adjustments
644
(4,660)
Changes in the consolidated subsidiaries of the Allianz Group
130
Premiums collected
20,351
20,640
Interest credited
(7,836)
7,973
Releases upon death, surrender, and withdrawal
(13,404)
(12,776)
Policyholder charges
(2,013)
(1,972)
Portfolio acquisitions and disposals
(57)
(12)
Reclassifications¹
(1,377)
1,738
1,453
Subtotal
1,993
2,640
Other liabilities
7,855
7,418
Total²
40,232
39,639
1_Mainly level 2 for fair value measurement.
2_Includes other liabilities due within one year of € 27,001 mn (2017: €25,987 mn).
Annual Report 2018 - Allianz Group
D_Consolidated Financial Statements
129
D_Consolidated Financial Statements
18_Certificated and subordinated liabilities
Certificated and subordinated liabilities
€ mn¹
Senior bonds
Fixed rate²
Contractual interest rate
Floating rate
Current interest rate
Money market securities
Fixed rate
Up to 1 year
Contractual maturity date
As of
1-5 years
Over 5 years
Financial liabilities for puttable financial instruments
147
330
criteria for hedge accounting, and firm commitments¹
3,268
3,458
Accrued interest and rent
437
461
Unearned income
503
469
Provisions
Pensions and similar obligations
9,091
9,410
Employee related
2,779
EUR
2,540
383
497
Restructuring plans
313
Other provisions
2,079
2,055
Subtotal
14,667
14,815
Deposits retained for reinsurance ceded
2,568
2,025
Derivative financial instruments used for hedging that meet the
Share-based compensation plans
1,000
3.099
6 July 2047
22 Income from financial assets
and liabilities carried at fair value through
income (net)
Property-
Consoli-
Casualty Life/Health
dation
Group
2018
Premiums written
Income from financial assets and liabilities
carried at fair value through income (net)
€ mn
2018
2017
Gross
53,636
24,315
(127)
77,824
Ceded
(4,683)
(585)
127
(5,141)
Income from financial assets and liabilities held for
trading (net)
(4,372)
2,436
Net
48,952
23,730
72,682
€ mn
Income from financial assets and liabilities
Premiums earned (net)
NOTES TO THE CONSOLIDATED INCOME STATEMENTS
As of 31 December
Unrealized gains and losses (net)
Share of earnings
Other equity components
Total
CAPITAL REQUIREMENTS
2018
2017
61
180
241
404
2,145
2,465
2,447
3,049
The Allianz Group's capital requirements primarily depend on the
type of business that it underwrites, the industry and geographic
locations in which it operates, and the allocation of the
Allianz Group's investments. During the Allianz Group's annual planning
and strategic dialogs with its related undertakings, internal capital
requirements are determined through business plans regarding the
levels and timing of capital expenditures and investments. These
plans also form the basis for the Allianz Group's capital management.
Resilience under stress conditions is also considered when determin-
ing the internal capital requirements of the Group. The regulators
impose minimum capital requirements on the Group and its related
undertakings. For further details on how the Allianz Group manages
its capital, please refer to the section "Target and strategy of risk
management" of the Risk and Opportunity Report.
With Solvency II being the regulatory regime relevant for the
Group since 1 January 2016, the risk profile is measured and steered
based on the approved Solvency II internal model¹ A target solvency
ratio has been introduced in accordance with Solvency II, based on
pre-defined shock scenarios at the level of both the Group and related
undertakings, supplemented by ad-hoc scenarios, historical and
reverse stress tests, and sensitivity analyses. The Solvency II capital
requirement is defined as the difference between the current portfolio
value and the portfolio value under adverse conditions at the 99.5%
confidence level and over a holding period of one year.
The Allianz Group's Own Funds are composed of the eligible
Own Funds relating to the Group of internal model and standard
formula entities, the sectoral Own Funds of entities from other financial
sectors, as well as the equivalent Own Funds of entities included via
the deduction and aggregation (D&A) method. The eligible Own
Funds relating to the Group of internal model and standard formula
entities essentially consist of the MVBS excess of assets over liabilities
plus qualifying subordinated liabilities, less deductions for foreseeable
dividends as well as further deductions relating for example, to tier
limits or transferability restrictions.
Compared to year-end 2017, the Solvency II capitalization ratio
remained stable at 229% as the increase in Own Funds was completely
offset by a corresponding increase in the Solvency II capital require-
ment. This was due to compensating effects. Over the course of the
year, strong Solvency II earnings had a positive impact on the Solvency II
1 From a formalistic perspective, the German Supervisory Authority deems the model to be "partial" because not all
entities are using the internal model. Some of the smaller entities report under the standard formula and others under
the deduction and aggregation approach. Without loss of generality, we might use the term internal model in the
following chapters, e.g., in case descriptions also referring to entities that use the internal model, or descriptions focusing
on processes with respect to the internal model components.
132
Annual Report 2018 - Allianz Group
capitalization. However, this positive effect was partly offset by capital
management activities such as the share buy-back program and the
dividend accrual, as well as by management actions such as the
buyout of the non-controlling interests of Euler Hermes, the sale of
Oldenburgische Landesbank Aktiengesellschaft, the decrease in
exposures to some government bonds, and the improvement of the
interest rate risk profile. The regulatory and model changes and the
unfavorable markets - characterized by higher credit spreads and
lower equity prices - also contributed to this compensating effect,
along with other impacts such as taxes, changes in transferability
restrictions, and diversification effects. For further information on the
Solvency II capitalization, please refer to the section "Solvency II
regulatory capitalization" of the Risk and Opportunity Report.
The Allianz Group is a financial conglomerate within the scope of
the Financial Conglomerates Directive (FCD). The FCD does not
impose a materially different capital requirement on Allianz Group
compared to Solvency II.
The insurance subsidiaries of the Allianz Group (including
Allianz SE) prepare individual financial statements based on local
laws and regulations. The local regulations establish additional
restrictions on the minimum level of capital and the amount of dividends
that may be paid to shareholders. The respective local minimum
capital requirements are based on various criteria including, but not
limited to, the volume of premiums written or claims paid, amount of
insurance reserves, investment risks, mortality risks, credit risks, and
underwriting risks.
As of 31 December 2018, the Board of Management of the
Allianz Group believes that there are no outstanding regulatory
capital or compliance matters that would have materially adverse
effects on the financial position or results of operations of the
Allianz Group.
Some insurance subsidiaries of the Allianz Group are subject to
regulatory restrictions on the amount of dividends that can be remitted
to Allianz SE without prior approval by the appropriate regulatory
body. Such restrictions require that a company may only pay dividends
up to an amount in excess of certain regulatory capital levels, or
based on the levels of undistributed earned surplus or current year
income or a percentage thereof. The Board of Management of the
Allianz Group believes that these restrictions will not affect the ability
of Allianz SE to pay dividends to its shareholders in the future.
D_Consolidated Financial Statements
Annual Report 2018 - Allianz Group
133
D_Consolidated Financial Statements
20 Premiums earned (net)
Change in unearned premiums (net)
(647)
(563)
(579)
(428)
Premiums earned (net)
47,242
24,185
(1,007)
71,427
23 Realized gains/losses (net)
Realized gains/losses (net)
21 Interest and similar income
€ mn
2018
2017
Interest and similar income
€ mn
REALIZED GAINS
Available-for-sale investments
2018
2017
Equity securities
3,617
2,803
Dividends from available-for-sale investments
2,590
2,202
Debt securities
3,166
4,373
Interest from available-for-sale investments
13,370
Change in unearned premiums (net)
72,433
24,613
47,820
(1,211)
designated at fair value through income (net)
(485)
300
Premiums earned (net)
48,305
23,167
71,472
Income from financial liabilities for puttable financial
instruments (net)
344
(117)
2017
Foreign currency gains and losses (net)¹
1,212
Non-controlling interests
(3,822)
Total
(3,301)
Gross
52,262
25,212
(130)
77,345
Ceded
(4,442)
(599)
130
(4,912)
1_These foreign currency gains and losses arise subsequent to initial recognition on all assets and liabilities denominated
in a foreign currency that are monetary items and not measured at fair value through income.
Net
Premiums written
Subtotal
€ mn
All of the treasury shares acquired within the Share Buy-Back Program
2018/1 and within the Share Buy-Back Program 2018/11 have been
redeemed according to the simplified procedure without reduction of
the share capital.
1,500
3.875
Perpetual bond
Allianz Finance II B.V., Amsterdam
DE000A1GNAH1
2011
EUR
2,000
5.750
DE000A0GNPZ3
2006
EUR
800
5.375
8 July 2041
Perpetual bond
130
Annual Report 2018 - Allianz Group
D_Consolidated Financial Statements
19 Equity
Equity
€ mn
As of 31 December
2018
2017
Shareholders' equity
Issued capital
1,170
1,170
Additional paid-in capital
27,758
USD
27,758
2016
Perpetual bond
XS1556937891
2017
USD
600
5.100
30 January 2049
XS0857872500
2012
USD
1,000
5.500
Perpetual bond
DE000A1YCQ29
2013
EUR
1,500
4.750
Perpetual bond
CH0234833371
2014
CHF
500
3.250
Perpetual bond
DE000A13R7Z7
2014
EUR
1,500
3.375
XS1485742438
Retained earnings¹
27,967
27,199
438,879,929
408,081
(15,789,985)
455,067,737
562,546
(16,750,354)
423,498,025
438,879,929
961,636
1,369,717
424,459,661
440,249,646
PROPOSAL FOR APPROPRIATION OF NET EARNINGS
The Board of Management and the Supervisory Board propose that
the net earnings ("Bilanzgewinn") of Allianz SE of € 4,544,152,898.54
for the 2018 fiscal year shall be appropriated as follows:
Distribution of a dividend of € 9.00 per no-par share entitled to a
dividend: € 3,811,482,225.00
Unappropriated earnings carried forward: € 732,670,673.54
The proposal for appropriation of net earnings reflects the 961,636
treasury shares held directly and indirectly by the company as of
31 December 2018. Such treasury shares are not entitled to the
dividend pursuant to §71b of the German Stock Corporation Act
(AktG). Should there be any change in the number of shares entitled
to the dividend by the date of the Annual General Meeting, the
above proposal will be amended accordingly and presented for
resolution on the appropriation of net earnings at the Annual General
Meeting, with an unchanged dividend of €9.00 per each share
entitled to dividend.
TREASURY SHARES
As of 31 December 2018, Allianz SE held 961,636 (2017: 1,369,131)
treasury shares. Of these, 761,636 (2017: 343,102) were held for
covering future subscriptions by employees in Germany and abroad
in the context of Employee Stock Purchase Plans, whereas
Annual Report 2018 - Allianz Group
131
D_Consolidated Financial Statements
200,000 (2017: 1,026,029) were held as a hedge for obligations from
the Allianz Equity Incentive Program.
In 2018, 826,029 treasury shares with the original purpose of
hedging obligations from the Allianz Equity Incentive Program were
rededicated to covering subscriptions by employees in the context of
Employee Stock Purchase Plans.
In 2018, 407,495 (2017: 562 546) treasury shares were sold to
employees of Allianz SE as well as its subsidiaries in Germany and
abroad in the context of the Employee Stock Purchase Plan. These
shares were taken from the stock of treasury shares dedicated to
this purpose. In 2018, as in the previous year, no capital increase for
the purpose of Employee Stock Purchase Plans was undertaken.
Employees of the Allianz Group purchased shares at prices ranging
from € 137.57 (2017: € 108.04) to € 153.94 (2017: € 158.72) per share.
As of 31 December 2018, the remaining treasury shares of Allianz SE
held for covering subscriptions by employees in the context of the
Employee Stock Purchase Plan of Allianz SE and its subsidiaries in
Germany and abroad amounted to 761,636 shares.
In the year ending 31 December 2018, the total number of
treasury shares of Allianz SE decreased by 407,495 (2017: decrease of
562,546), which corresponds to € 1,123,161.03 (2017: € 1,494,910.50)
or 0.10% (2017: 0.13%) of issued capital as of 31 December 2018.
The treasury shares of Allianz SE and its subsidiaries represented
€2.7 mn (2017: € 3.6 mn) or 0.23% (2017: 0.31%) of the issued capital
as of 31 December 2018.
SHARE BUY-BACK PROGRAMS 2018
In the year ending 31 December 2018, Allianz SE executed two share
buy-back programs with a total volume of € 3 bn:
SHARE BUY-BACK PROGRAM 2018/1
In its meeting on 9 November 2017, the Board of Management of
Allianz SE resolved to carry out a share buy-back program in an
amount of up to € 2 bn within a period of six months (Share Buy-
Back Program 2018/1) based on the authorization granted by the
Annual General Meeting on 7 May 2014. In the period between
3 January 2018 and 3 May 2018, a total of 10,373,863 treasury shares
with a market value of €1,999,999,143.43 were acquired for an average
price of € 192.79.
SHARE BUY-BACK PROGRAM 2018/II
In its meeting on 2 July 2018, the Board of Management of Allianz SE
resolved to carry out a share buy-back program in an amount of up to
€ 1 bn within a period between 4 July 2018 and 30 September 2018
(Share Buy-Back Program 2018/11) based on the authorization
granted by the Annual General Meeting on 9 May 2018. In the period
between 4 July 2018 and 4 September 2018, a total of 5,416,122
treasury shares with a market value of € 999,999,881.83 were acquired
for an average price of € 184.63.
2017
2018
1 Thereof 961,636 (2017: 1,369,131) own shares held by Allianz SE.
Total number of issued shares
Foreign currency translation adjustments
(2,607)
(2,749)
Unrealized gains and losses (net)²
6,945
12,175
61,232
65,553
Non-controlling interests
2,447
Total
63,679
Subtotal
1_As of 31 December 2018, include € (84) mn (2017: € (115) mn) related to treasury shares.
2_As of 31 December 2018, include € 267 mn (2017: € 274 mn) related to cash flow hedges.
NON-CONTROLLING INTERESTS
ISSUED CAPITAL
Issued capital as of 31 December 2018 amounted to € 1,170 mn, divid-
ed into 424,459,661 fully paid registered shares. The shares have no-par
value but a mathematical per-share value as a proportion of the issued
capital.
AUTHORIZED CAPITAL
As of 31 December 2018, Allianz SE had authorized capital with a no-
tional amount of € 335 mn for the issuance of new shares until
8 May 2023 (Authorized Capital 2018/1). The shareholders' sub-scription
rights can be excluded for capital increases against contribution in kind.
For a capital increase against contributions in cash, the shareholders'
subscription rights can be excluded: (i) for fractional amounts, (ii) if
the issue price is not significantly below the market price and the
shares issued under exclusion of the subscription rights pursuant to
§186 (3) sentence 4 of the German Stock Corporation Act (Aktiengesetz)
do not exceed 10% of the share capital, and (iii) to the extent
necessary to grant a subscription right for new shares to the holders
of bonds that carry conversion or option rights or provide for mandatory
conversion. The subscription rights for new shares from the Authorized
Capital 2018/1 and the Conditional Capital 2010/2018 may only be
excluded for the proportionate amount of the share capital of up to
€ 117 mn (corresponding to 10% of the share capital at year-end
2018).
In addition, Allianz SE has authorized capital (Authorized Capital
2018/11) for the issuance of new shares against contributions in cash
until 8 May 2023. The shareholders' subscription rights are excluded.
The new shares may only be offered to employees of Allianz SE
and its Group companies. As of 31 December 2018, the Authorized
Capital 2018/11 amounted to € 15 mn.
CONDITIONAL CAPITAL
As of 31 December 2018, Allianz SE had conditional capital totaling
€ 250 mn (Conditional Capital 2010/2018). This conditional capital
increase will only be carried out if conversion or option rights attached
to convertible bonds, bonds with warrants, convertible participation
rights, participation rights, and subordinated financial instruments
which Allianz SE or its Group companies have issued against cash
payments according to the resolutions of the Annual General Meeting
(AGM) on 5 May 2010 or 9 May 2018, are exercised or the conversion
obligations under such bonds are fulfilled, and only to the extent that
the conversion or option rights or conversion obligations are not
serviced through treasury shares or through shares from authorized
capital.
Convertible subordinated notes totaling € 500 mn, which may be
converted into Allianz shares, were issued against cash in July 2011.
Within 10 years after the issuance a mandatory conversion of the
notes into Allianz shares at the then prevailing share price may apply
if certain events occur, subject to a floor price of at least € 74.90 per
share. Within the same period, the investors have the right to convert
the notes into Allianz shares at a price of € 187.26 per share. Both
conversion prices are as of inception and subject to anti-dilution
provisions. The subscription rights of shareholders for these converti-
ble notes have been excluded with the consent of the Supervisory
Board and pursuant to the authorization of the AGM on 5 May 2010.
The granting of new shares to persons entitled under such convertible
notes is secured by the Conditional Capital 2010/2018. On or before
31 December 2018, there was no conversion of any such notes into
new shares.
CHANGES IN THE NUMBER
OF ISSUED SHARES OUTSTANDING
Number of issued shares outstanding
Number of issued shares outstanding as of 1 January
Changes in number of treasury shares
Cancellation of issued shares
Number of issued shares outstanding as of 31 December
Treasury shares¹
3,049
68,602
335
Subtotal
Liabilities to banks and customers
10,118
592
175
10,886
1,154
244
33
1,431
57
57
(892)
(20)
(7)
(919)
(767)
12
(755)
410
(56)
Total
instruments
contracts
financial
508
89
209
298
284
25,399
13,595
829
40,107
354
10
64
(229)
12
(43)
Financial
liabilities held
for trading
Financial
liabilities for
Financial
liabilities for
puttable
unit-linked
110
Changes in the consolidated subsidiaries of the Allianz Group
20
20
Total
Level 1¹
Level 2²
Level 33
Total
FINANCIAL ASSETS
Held-to-maturity investments
1,753
1,219
Level 33
1
1,303
1,688
1
2,992
Investments in associates and joint ventures
2
185
15,097
15,284
2,973
(56)
Level 22
2017
Carrying value (fair value) as of 31 December 2018
10,023
829
221
11,073
Net losses (gains) in profit or loss attributable to a change in unrealized gains or losses for financial liabilities held at the reporting
date
(1,022)
12
(1,010)
Level 1¹
Annual Report 2018 - Allianz Group
D_Consolidated Financial Statements
FAIR VALUE MEASUREMENT ON A NON-RECURRING
BASIS
Certain financial assets are measured at fair value on a non-recurring
basis when events or changes in circumstances indicate that the
carrying amount may not be recoverable.
If financial assets are measured at fair value on a non-recurring
basis at the time of impairment, or if fair value less cost to sell is used
as the measurement basis under IFRS 5, corresponding disclosures
can be found in note 28.
FAIR VALUE INFORMATION ABOUT FINANCIAL ASSETS AND LIABILITIES NOT CARRIED AT FAIR VALUE
Fair value hierarchy (items not carried at fair value)
€ mn
As of 31 December
2018
143
49
516
(1)
Reconciliation of level 3 financial assets
€ mn
Carrying value (fair value) as of 1 January 2018
Additions through purchases and issues
Net transfers into (out of) level 3
Disposals through sales and settlements
Net gains (losses) recognized in consolidated income statement
Net gains (losses) recognized in other comprehensive income
Impairments
Foreign currency translation adjustments
The following tables show reconciliations of the financial instruments
carried at fair value and classified as level 3:
Changes in the consolidated subsidiaries of the Allianz Group
Net gains (losses) in profit or loss attributable to a change in unrealized gains or losses for financial assets held at
the reporting date
1 Primarily include corporate bonds.
Reconciliation of level 3 financial liabilities
€ mn
Carrying value (fair value) as of 1 January 2018
Additions through purchases and issues
Net transfers into (out of) level 3
Disposals through sales and settlements
Net losses (gains) recognized in consolidated income statement
Carrying value (fair value) as of 31 December 2018
Net losses (gains) recognized in other comprehensive income
Impairments
Reconciliation of level 3 financial instruments
142
Non-market observable
input(s)
Annuitizations
Range
0%-25%
Surrenders
Mortality
0%-25%
n/a¹
Withdrawal benefit
election
Annual Report 2018 - Allianz Group
0%-50%
0.5% - 35%
Mortality
n/a¹
1_Mortality assumptions are mainly derived from the Annuity 2000 Mortality Table.
FINANCIAL LIABILITIES
FOR PUTTABLE FINANCIAL INSTRUMENTS
Financial liabilities for puttable financial instruments are generally
required to be recorded at the redemption amount with changes
recognized in income. The fair value is based on the net asset value
or the use of present value techniques.
SIGNIFICANT TRANSFERS OF FINANCIAL
INSTRUMENTS CARRIED AT FAIR VALUE
In general, financial assets and liabilities are transferred from level 1
to level 2 when their liquidity, trade frequency, and activity are no
longer indicative of an active market. In 2018, this mainly affects a
government bond portfolio with a transfer volume of € 10.9 bn and a
corporate bond portfolio of € 2.2 bn for which now mainly composite
prices are used. Conversely, the same policy applies for transfers from
level 2 to level 1.
Transfers into/out of level 3 may occur due to a reassessment of
the input parameters.
Surrenders
85
Foreign currency translation adjustments
Financial
136
28
57
223
238
(909)
(1,208)
(20)
(1,899)
2
(137)
(151)
12
(250)
148
543
691
(28)
(291)
(319)
25
D_Consolidated Financial Statements
9,440
4,293
Available-for-
Available-for-
assets carried
at fair value
through
income
sale
investments -
sale
investments -
Financial
assets for unit-
Debt
securities¹
Equity
244
linked
contracts
Total
162
20,539
10,122
592
31,416
20
4,883
securities
Variable annuities
76
11,059
Within the asset management business, investment funds are estab-
lished and managed to accommodate retail and institutional clients'
requirements to hold investments in specific assets, market segments
or regions. Within the insurance business, policyholder money is partly
invested in investment funds, which include funds managed by
Allianz's group-internal asset managers as well as funds set up and
managed by third parties. Investment funds managed or invested in
by Allianz Group may include mutual funds, special funds and other
funds.
Income derived from the management of investment funds in-
cludes mainly asset management fees and performance based fees.
Investment funds launched by group-internal asset managers
can be considered to be sponsored by the Allianz Group. As a spon-
sor, the Allianz Group through its asset management subsidiaries is
involved in the legal set-up and marketing of internally managed
investment funds. This may include providing seed capital to the
funds and providing administrative services to ensure the investment
funds' operation. Investment funds managed by group-internal asset
managers can be reasonably associated with the Allianz Group. The
use of the Allianz name for investment funds is another indicator that
the Allianz Group has acted as a sponsor for the respective funds.
Information on the management fees generated in the asset
management business are disclosed in note 24.
NATURE OF RISKS ASSOCIATED WITH
UNCONSOLIDATED STRUCTURED ENTITIES
INTERESTS IN ASSET-BACKED SECURITIES (ABS)
AND MORTGAGE-BACKED SECURITIES (MBS) ISSUED
BY SECURITIZATION VEHICLES
Carrying amounts of ABS and MBS investments by type of category
€ mn
The carrying amounts in the tables listed above correspond to an
aggregated amortized cost amount of € 24,443 mn (2017:
€ 21,487 mn). This amortized cost amount represents the maximum
exposure to loss for the Allianz Group from these investments. In the
reporting period, the Allianz Group has not provided any financial or
other support to these entities, nor does it have the intention to pro-
vide such support in the future.
INVESTMENTS IN INVESTMENT FUNDS
Investments in investment funds by asset class
€ mn
As of 31 December
Debt funds
Stock funds
Private equity funds
Property funds
Other funds
Total¹
1_Comprises mainly investments.
2018
2017
FUND MANAGEMENT ACTIVITIES
With regard to investment activities, income mainly includes
distributions from the funds as well as realized gains and losses from
disposals.
Investment funds are generally subject to stringent regulatory
requirements from financial authorities in all jurisdictions across the
world. Comprehensive regulation of funds protects fund investors and
also helps to limit investment risk. These mechanisms result in a legal
set-up of funds, agreed and accepted by investors and investment
managers, that may lead to a classification as structured entities
under IFRS 12.
investment funds is usually either precluded by legal or regulatory
provisions or not deemed substantial.
5,308
15,409
1,775
14,639
12,864
Financial assets are pledged as collateral as part of sales and repur-
chases, securities borrowing, and transactions with derivatives, under
terms that are usual and customary for such activities.
In addition, as part of these transactions, the Allianz Group has
received collateral that it is permitted to sell or repledge in the
absence of default. As of 31 December 2018, the Allianz Group
received collateral, consisting of fixed income and equity securities,
with a fair value of € 9,261 mn (2017: €1,904 mn), which the
Allianz Group has the right to sell or repledge. For the years ended
31 December 2018 and 2017, no previously received collateral was
sold or repledged by the Allianz Group.
As of 31 December 2018, the Allianz Group received cash collat-
eral with a carrying amount of € 225 mn (2017: € 243 mn).
35 Interests in unconsolidated
structured entities
NATURE, PURPOSE, AND ROLE OF THE
ALLIANZ GROUP IN STRUCTURED ENTITIES
Under IFRS 12, a structured entity is defined as an entity that has been
designed so that voting rights or similar rights are not the dominant
factor in deciding who controls the entity, such as when any voting
rights relate to administrative tasks only and the relevant activities
are directed by means of contractual arrangements.
The Allianz Group engages in some business activities that
involve the use of entities that meet the above-mentioned definition
of structured entities. Primarily, the Allianz Group is involved with such
entities due to its investment activities associated with its insurance
business and due to its asset management activities. Furthermore,
structured entities are used by the Allianz Group to source out certain
risks to investors as part of its reinsurance business. Generally, the
classification of an entity as a structured entity may require significant
judgment.
8,053
In the following sections, the business activities involving uncon-
solidated structured entities are described.
The Allianz Group acts as investor in ABS- or MBS-issuing securitiza-
tion vehicles which purchase pools of assets including commercial
mortgage loans (CMBS), auto loans, credit card receivables, and
others. These securitization vehicles refinance the purchase of assets
by issuing tranches of ABS or MBS whose repayment is linked to the
performance of the assets held by the vehicles.
Securitization vehicles invested in by the Allianz Group have
generally been set up by third parties. Furthermore, the Allianz Group
has neither transferred any assets to these vehicles nor has it provided
any further credit enhancements to them.
Income derived from investments in securitization vehicles mainly
includes interest income generated from ABS and MBS, as well as
realized gains and losses from disposals of these securities.
Within the asset management business, the Allianz Group acts
as asset manager for some securitization vehicles. The assets under
management of these vehicles amounted to € 1,137 mn as of
31 December 2018 (2017: € 1,462 mn). Some of the affected vehicles
have been set up by the Allianz Group whereas others have been set
up by third parties. In this respect, the role of the Allianz Group is
limited to asset management. The Allianz Group has not invested in
these vehicles being managed.
Income derived from the management of securitization vehicles
comprises asset management fees.
INVESTMENTS IN INVESTMENT FUNDS
Considering the broad variety of investment funds across different
jurisdictions, the classification of investment funds as structured enti-
ties based on the definition in IFRS 12 is judgmental. As a general
rule, the management of relevant activities of an investment fund is
delegated to the fund manager via asset management agreements.
In contrast, influence from investors on the relevant activities of
Annual Report 2018 - Allianz Group
145
D_Consolidated Financial Statements
INVESTMENTS IN ASSET-BACKED SECURITIES (ABS)
AND MORTGAGE-BACKED SECURITIES (MBS) ISSUED
BY SECURITIZATION VEHICLES
7,438
4,013
4,446
4,166
3,819
1,183
879
131
37
Other
Total¹,2
3,725
Credit Card
3,611
21,715
1_Comprises mainly investments.
2 Thereof rated AAA or AA € 22,121 mn (2017: € 19,849 mn).
146
Annual Report 2018 - Allianz Group
D_Consolidated Financial Statements
36 Related party transactions.
Information on the remuneration of board members and transactions
with these persons can be found in the Remuneration Report, starting
on > page 23.
Transactions between Allianz SE and its subsidiaries that are to
be deemed related parties have been eliminated in the consolidation
and are not disclosed in the notes.
24,211
Total
Auto
8,337
11,808
8,333
5,716
4,561
748
574
30,339
25,352
Of the total investment fund exposure, investments of € 11.6 bn
(2017: € 11.2 bn) relate to listed investment funds, whereas investments
of € 18.8 bn (2017: € 14.2 bn) relate to unlisted investment funds.
CMO/CDO
As of the reporting date, the Allianz Group has receivables from
unconsolidated investment funds, which are mainly due in return for
asset management services, amounting to € 796 mn (2017:
€ 837 mn). Furthermore, the Allianz Group has commitments to invest
in private equity funds and similar financial instruments totaling
€ 17,199 mn as of 31 December 2018 (2017: € 16,001 mn).
Besides the above-mentioned investments in investment funds,
the Allianz Group also holds investment funds to fund unit-linked
insurance contracts. However, these holdings are held on behalf and
for the benefit of unit-linked policyholders only. For that reason, these
holdings are not included in the above-mentioned table. As of
31 December 2018, the volume of unit-linked assets amounted to
€ 115,361 mn (2017: € 119,141 mn). The maximum exposure to loss
on these investments is covered by liabilities recorded for unit-linked
contracts.
As of 31 December
U.S. Agency
CMBS
2018
2017
4,854
5,032
10,153
The carrying amounts in the tables listed above correspond to
an aggregated amortized cost amount of € 26,493 mn (2017:
€ 21,731 mn). This amortized cost amount represents the maximum
exposure to loss for the Allianz Group from these investments. In the
reporting period, the Allianz Group has not provided any financial or
other support to these entities, nor does it have the intention to
provide such support in the future.
Subtotal
1,768
5,308
Certificated liabilities
Subordinated liabilities
Total
1_Quoted prices in active markets.
2 Market observable inputs.
6,294
5,319
2,622
14,235
Liabilities to banks and customers
4,850
12,759
9,652
178
9,830
10,293
166
10,459
13,897
13,897
2,579
14,757
FINANCIAL LIABILITIES
71,707
Real estate held for investment
21,545
21,545
18,913
18,913
Loans and advances to banks and customers
Total
6,333
66,911
48,595
152,898
121,839
72,371
41,895
119,934
8,088
68,315
85,238
161,641
7,056
74,136
5,668
10,898
14,757
28,869
The carrying amounts of the assets pledged as collateral are dis-
played in the following table:
Assets pledged as collateral
€ mn
8
As of 31 December
2018
2017
Collaterals without right to resell or repledge
Investments
ASSETS PLEDGED AND COLLATERAL
10,096
Loans and advances to banks and customers
Other
2,827
5
Subtotal
10,101
Collaterals with right to resell or repledge
Financial assets carried at fair value through income
7
Investments
10,029
6,294
As of 31 December 2018, the Allianz Group substantially retained all
the risks and rewards out of the ownership of transferred assets.
There have not been any transfers of financial assets that were
derecognized in full or partly, in which Allianz continues to control the
transferred assets. Transfers of financial assets mainly relate to securi-
ties lending and repurchase agreement transactions. Financial assets
transferred in the context of repurchase agreement and securities
lending transactions are mainly available-for-sale debt and equity
securities for which substantially all of the risks and rewards are
retained. As of 31 December 2018, the carrying amount of the assets
transferred for securities lending transactions amounted to
€ 9,570 mn (2017: € 6,424 mn). For repurchase agreements, the carrying
amount of the assets transferred amounted to € 857 mn
(2017: € 566 mn) and the carrying amount of the associated liabilities
amounted to € 865 mn (2017: € 568 mn).
D_Consolidated Financial Statements
2,799
37,962
5,330
29,901
2,745
37,975
3 Non-market observable inputs.
HELD-TO-MATURITY INVESTMENTS
For level 2 and level 3, the fair value is mainly determined based on
the market approach, using quoted market prices, and the income
approach using deterministic discounted cash flow models.
TRANSFERS OF FINANCIAL ASSETS
INVESTMENTS IN ASSOCIATES AND JOINT VENTURES
For level 2 and level 3, fair values are mainly based on an income
approach using a discounted cash flow method or net asset values as
provided by third-party vendors.
Fair values are mostly determined using the market or the income
approach. The valuation techniques applied for the market approach
include market prices of identical or comparable assets in markets
that are not active. The fair values are either calculated internally and
validated by external experts, or derived from expert appraisals with
internal controls in place to monitor these valuations.
LOANS AND ADVANCES TO BANKS AND CUSTOMERS
For loans and advances to banks and customers, quoted market
prices are rarely available. Level 1 mainly consists of highly liquid
advances, e.g. short-term investments. The fair value for these assets
in level 2 and level 3 is mainly derived based on the income approach
using deterministic discounted cash flow models.
LIABILITIES TO BANKS AND CUSTOMERS
Level 1 mainly consists of highly liquid liabilities, e.g. payables on
demand. The fair value for liabilities in level 2 and level 3 is mainly
derived based on the income approach, using future cash flows
discounted with risk-specific interest rates. Main non-market observable
inputs include credit spreads. In some cases, the carrying amount
(amortized cost) is considered to be a reasonable estimate of the fair
value.
CERTIFICATED LIABILITIES
AND SUBORDINATED LIABILITIES
For level 2, the fair value is mainly determined based on the market
approach, using quoted market prices, and based on the income
approach, using present value techniques. For level 3, fair values are
mainly derived based on the income approach, using deterministic
cash flows with credit spreads as primary non-market observable inputs.
In some cases, the carrying amount (amortized cost) is considered to be
a reasonable estimate for the fair value.
144
Annual Report 2018 - Allianz Group
REAL ESTATE
Fixed index annuities
Description
Quantitative description of non-market observable input(s) used for
the level 3 portfolios
Carrying
amount
Carrying
Fair value
amount
Fair value
Cash and cash equivalents
17,234
17,234
17,119
17,119
Financial assets held for trading
3,353
3,353
3,076
3,076
Financial assets designated at fair value through income
4,258
4,258
5,101
2017
2018
FINANCIAL ASSETS
As of 31 December
As of 31 December 2018, the Allianz Group hedges part of its foreign
currency net investments through the issuance of several foreign
currency denominated liabilities and the use of forward sales. The
total negative fair value in 2018 was € 191 mn (2017: total positive
fair value of € 149 mn).
OFFSETTING
The Allianz Group mainly enters into enforceable master netting
arrangements and similar arrangements for derivatives transactions.
None of these enforceable master netting arrangements or similar
arrangements meet the requirements for offsetting in line with IAS 32.
Credit risk associated with netting arrangements is further miti-
gated by collateral. For further information on collateral, please refer
to note 34. The maximum credit risk exposure is represented by the
carrying amount of the financial assets.
Annual Report 2018 - Allianz Group
139
D_Consolidated Financial Statements
34 Fair values and carrying amounts
of financial instruments
5,101
Certain risk disclosure requirements of IFRS 7 are reflected in the
following sections of the Risk and Opportunity Report within the
Group Management Report:
Internal risk capital framework,
Allianz risk profile and management assessment,
Market risk, credit risk, and liquidity risk in the section Quantifia-
ble risks and opportunities by risk category.
FAIR VALUES AND CARRYING AMOUNTS
The following table compares the carrying amount and fair value of
the Allianz Group's financial assets and financial liabilities:
Fair values and carrying amounts of financial instruments
€ mn
Risk based steering and risk management,
Available-for-sale investments
520,612
520,612
119,141
119,141
Financial assets for unit-linked contracts
FINANCIAL LIABILITIES
Financial liabilities held for trading
Financial liabilities for unit-linked contracts
Financial liabilities for puttable financial instruments
Certificated liabilities
Subordinated liabilities
115,361
As of 31 December 2018, fair values could not be reliably measured
for equity investments with carrying amounts totaling € 61 mn (2017:
€ 73 mn). These investments are primarily investments in privately
held corporations and partnerships. During the year ended
31 December 2018, such investments with carrying amounts of
€ 119 mn (2017: € 39 mn) were sold. The gains and losses from these
disposals were immaterial.
11,626
11,626
11,291
11,291
14,222
14,235
12,746
12,759
115,361
140
HEDGE OF NET INVESTMENT IN FOREIGN
OPERATIONS
115,361
104,224
520,397
520,397
Held-to-maturity investments
2,787
2,973
2,678
2,992
Investments in associates and joint ventures
11,823
119,934
15,284
11,059
Real estate held for investment
12,455
21,545
11,419
18,913
Loans and advances to banks and customers
108,270
121,839
9,010
The ineffectiveness that arises from cash flow hedges is immaterial.
During the year ended 31 December 2018, cash flow hedges were
used to hedge the exposure to the variability of cash flows arising
from interest rate or exchange rate fluctuations as well as inflation. As
of 31 December 2018, the derivative instruments utilized had a total
positive fair value of € 202 mn (2017: € 229 mn).
CASH FLOW HEDGES
principal
amounts
Positive fair
values
Negative fair
values
23,950
15,532
57,020
96,502
607
Negative fair
values
(126)
691
(123)
229,478
1,334
11,820
242,632
2,152
(11,169)
298,984
98,508
1,445
Positive fair
values
Over 5 years
OTHER INFORMATION
33 Derivative financial instruments
Derivative financial instruments
€ mn
As of 31 December
Interest rate contracts
Equity/index contracts
Foreign exchange contracts
Other
principal
amounts
Total
thereof exchange-traded
D_Consolidated Financial Statements
2018
2017
Maturity by notional amount
Notional
Notional
Up to 1 year
1-5 years
thereof OTC¹
115,361
70,235
1,608
21,498
70,930
351,551
2,033
321
67,161
1,185
(11,921)
(33)
373,008
259,123
66,840
88,673
(11,411)
(26)
1_Consists mainly of equity/index contracts and foreign exchange contracts.
The table shows the fair value and notional amounts of all freestanding
derivatives, as well as derivatives for which hedge accounting is applied
by the Allianz Group, as of 31 December 2018 and 2017, respectively.
The notional principal amounts indicated in the table are cumulative,
as they include the absolute value of the notional principal amounts of
derivatives with positive and negative fair values. Although these
notional principal amounts reflect the degree of the Allianz Group's
involvement in derivative transactions, they do not represent amounts
exposed to risk. Further information on the use of derivatives to hedge
risk can be found in the sections on market and credit risk of the Risk
and Opportunity Report, which forms part of the Group Management
Report.
FREESTANDING DERIVATIVE FINANCIAL
INSTRUMENTS
As of 31 December 2018, freestanding derivatives, included in the line
item financial assets and liabilities held for trading, had a notional
principal amount of € 398.0 bn (2017: € 439.6 bn) as well as a posi-
tive fair value of € 2.7 bn (2017: € 2.5 bn) and a negative fair value of
€ 11.6 bn (2017: € 11.3 bn). Out of the total allocated to the free-
standing derivatives, € 114.1 bn (2017: € 103.0 bn) of the notional
principal relate to annuity products. Annuity products are equity-
indexed or contain certain embedded options or guarantees which
are considered embedded derivatives under IAS 39. For these
embedded derivatives, the notional principal amounts included in the
table refer to the account value of the related insurance contracts.
The total negative fair value of these embedded derivatives amounts
to € 10.0 bn (2017: € 10.2 bn). Further information on the fair value
measurement of these derivatives can be found in note 34.
DERIVATIVE FINANCIAL INSTRUMENTS USED IN
ACCOUNTING HEDGES
As of 31 December 2018, derivatives which form part of hedge
accounting relationships, and which are included in the line items
other assets and other liabilities, had a notional amount of € 20.7 bn
(2017: € 22.1 bn) as well as a positive fair value of € 489 mn (2017:
€ 538 mn) and a negative fair value of € 330 mn (2017: € 147 mn).
These hedging instruments mainly include interest rate forwards with
a total positive fair value of € 193 mn (2017: € 216 mn).
FAIR VALUE HEDGES
The Allianz Group uses fair value hedges to hedge the exposure to
changes in the fair value of financial assets due to movements in
interest or exchange rates and to hedge its equity portfolio against
equity market risk. As of 31 December 2018, the derivative financial
instruments used for the related fair value hedges of the
Allianz Group had a total positive fair value of € 149 mn (2017:
€ 12 mn).
2,728
270
2,406
(8)
(11,437)
461,681
74,249
432
(624)
59,991
835
(11,044)
(262)
2,300
2,547
482
2,998
5,329
(35)
4,198
27
325,963
21,819
70,930
418,712
3,218
(11,954)
27
119,141
119,141
1,993
90,856
Total
163,398
23,676
440,078
829
115,361
95,224
40,107
643,583
Financial assets for unit-linked contracts
187,134
592
119,141
31,416
647,714
FINANCIAL LIABILITIES
Financial liabilities held for trading
36
Financial liabilities for unit-linked contracts
90,856
23,324
429,164
1,568
23,676
520,397
402,048
6,442
694
899
3,577
5,169
Equity securities
37,163
655
13,595
30,661
51,413
788
10,122
51,158
Subtotal
68,089
413,529
38,994
520,612
87,687
40,247
4,540
10,023
34
AT FAIR VALUE THROUGH INCOME
Financial assets held for trading
This position mainly includes derivative financial instruments. The fair
value of these derivatives is mostly determined based on the income
approach, using present value techniques and the Black-Scholes-
Merton model. Primary inputs for the valuation include volatilities,
interest rates, yield curves, and foreign exchange rates observable at
commonly quoted intervals. In some cases, it is determined based on
the market approach.
Financial assets designated at fair value through income
The fair value is mainly determined based on net asset values for
funds and using the market approach.
AVAILABLE-FOR-SALE INVESTMENTS
Debt securities
Debt securities include corporate and government and government
agency bonds, MBS/ABS, and other debt securities.
The valuation techniques for these debt securities are similar. The
fair value is determined using the market and the income approach.
Primary inputs for the market approach are quoted prices for identical
or comparable assets in active markets where the comparability
between security and benchmark defines the fair value level. The
income approach in most cases means that a present value technique
is applied where either the cash flow or the discount curve is adjusted
to reflect credit risk and liquidity risk. Depending on the observability
of these risk parameters in the market, the security is classified as
level 2 or level 3.
FINANCIAL ASSETS CARRIED
Annual Report 2018 - Allianz Group
D_Consolidated Financial Statements
Level 3 investments are mainly priced based on the income
approach. The primary non-market observable input used in the
discounted cash flow method is an option-adjusted spread taken
from a set of benchmark securities with similar characteristics. A
significant yield increased of the benchmark securities in isolation
could result in a decreased fair value, while a significant yield
decrease could result in an increased fair value. However, a 10%
stress of the main non-market observable inputs has only immaterial
impact on fair value.
Equity securities
For level 2, the fair value is mainly determined using the market
approach or net asset value techniques for funds. For certain private
equity investments, the funds are priced based on transaction prices
using the cost approach. As there are only few holders of these funds,
the market is not liquid and transactions are only known to participants.
Level 3 mainly comprise private equity fund investments as well
as alternative investments of the Allianz Group, and in most cases are
delivered as net asset values by the fund managers. The net asset
values are calculated using material, non-public information about
the respective private equity companies. The Allianz Group has only
limited insight into the specific inputs used by the fund managers
hence a narrative sensitivity analysis is not applicable. The fund's
asset manager generally prices the underlying single portfolio com-
panies in line with the International Private Equity and Venture
Capital Valuation (IPEV) guidelines using discounted cash flow (income
approach) or multiple methods (market approach). For certain invest-
ments, the capital invested is considered to be a reasonable proxy for
the fair value. In the cases, sensitivity analyses are also not applicable.
FINANCIAL ASSETS FOR UNIT-LINKED CONTRACTS
For level 2, the fair value is determined using the market or the
income approach. Valuation techniques applied for the income
approach mainly include discounted cash flow models as well as the
Black-Scholes-Merton model. Financial liabilities for unit-linked
contracts are valued based on their corresponding assets.
FINANCIAL LIABILITIES HELD FOR TRADING
This position mainly includes derivative financial instruments.
For level 2, the fair value is determined using the income or the
market approach. Valuation techniques applied for the income
approach mainly include discounted cash flow models as well as the
Black-Scholes-Merton model. Main observable input parameters
include volatilities, yield curves observable at commonly quoted
intervals, and credit spreads observable in the market.
For level 3, the fair value is determined using the income or the
market approach. Valuation techniques applied for the income
approach mainly include discounted cash flow models. A significant
proportion of derivative liabilities represent derivatives embedded in
certain life insurance and annuity contracts. Significant non-market
observable input parameters include mortality rates and surrender
rates. A significant decrease (increase) in surrender rates, in mortality
rates or in the utilization of annuitization benefits could result in a
higher (lower) fair value. For products with a high death benefit,
surrender rates may show an opposite effect. However, a 10% stress
of the main non-market observable inputs has only immaterial
impact on fair value.
141
11,626
3 Non-market observable inputs.
1 Quoted prices in active markets.
829
115,361
95,224
1,139
23,324
10,118
11,291
592
119,141
Financial liabilities for puttable financial instruments
2 Market observable inputs.
Total
108
25,351
221
11,073
1,993
128,980
2,377
97,636
87
24,550
175
10,886
2,640
133,072
1,665
92,556
Business relations with joint ventures and associates are set on
an arm's length basis.
1,075
Other
D_Consolidated Financial Statements
2018
2017
Level 1¹
Level 22
Level 33
Total
Level 1¹
Level 22
As of 31 December
Level 33
FINANCIAL ASSETS
Financial assets carried at fair value through income
Financial assets held for trading
1,341
1,888
123
3,353
347
2,716
Total
13
€ mn
The following table presents the fair value hierarchy for financial
instruments carried at fair value in the consolidated balance sheets
as of 31 December 2018 and 2017:
1,993
2,640
2,640
9,199
9,830
9,596
10,459
13,475
13,897
Fair value hierarchy (items carried at fair value)
13,295
Annual Report 2018 - Allianz Group
FAIR VALUE MEASUREMENT ON A RECURRING BASIS
The following financial assets and liabilities are carried at fair value
on a recurring basis:
Financial assets and liabilities held for trading,
Financial assets and liabilities designated at fair value through
income,
Available-for-sale investments,
Financial assets and liabilities for unit-linked contracts, and
-
Financial liabilities for puttable financial instruments.
14,757
826
3,076
3,112
16,203
243,526
Government and government agency bonds
18,234
178,530
766
197,531
30,884
167,449
211,507
578
MBS/ABS
45
23,807
183
24,035
45
21,406
182
21,633
198,911
Financial assets designated at fair value through income
15,816
19,910
985
161
4,258
3,876
1,076
150
5,101
Subtotal
4,453
241,192
2,874
7,611
4,223
3,792
162
8,177
Available-for-sale investments
Corporate bonds
11,821
209,461
284
GUARANTEES
5,330
€ mn
26,249
Total
3,193
3,304
Other
6,392
5,746
Debt investments
16,001
17,199
Commitments to acquire interests in associates and available-
for-sale investments
2017
2018
As of 31 December
€ mn
25,586
Annual Report 2018 - Allianz Group
147
D_Consolidated Financial Statements
Guarantees
Annual Report 2018 - Allianz Group
148
There is also a partly funded defined benefit pension plan for
agents (Vertreter VersorgungsWerk, VVW), which has been closed for
new entrants as of 31 December 2011. A part of the pension plan
serves as a replacement for the compensatory claim of agents
according to German Commercial Code (§89b). VVW is close to a
final salary benefit plan and pension increases are broadly linked to
inflation.
Employees who joined Allianz before 1 January 2015 participate
in the Allianz Versorgungskasse VVaG (AVK), financed through
employee contributions, and the Allianz Pensionsverein e.V. (APV),
which is financed by the employer. Both pension funds provide
pension benefits for the base salary up to the GSSC and are wholly
funded along local regulatory requirements and were closed to new
entrants, effective 31 December 2014. AVK and APV are legally
separate administered pension funds with trustee boards being
responsible for the investment of the assets and the risk management.
AVK is subject to German insurance regulation. The assets of the
contribution-based pension plans are allocated to a trust (Methusa-
lem Trust e.V.) and managed by a board of trustees. For the AVK the
annual minimum interest rate guaranteed is 1.75% - 3.50%,
depending on the date of joining the Allianz Group, and for the
closed part of the contribution-based pension plan it is 2.75%.
Most active German employees participate in contribution-
based plans using different vehicles to cover the base salary both
below and above the German social security ceiling (GSSC). Since
1 January 2015, the Allianz Group contributes for new entrants and
for the majority of contribution-based pension plan beneficiaries
above the GSSC to the low-risk pension plan "My Allianz Pension",
where only contributions are preserved. For salaries above the GSSC,
the Allianz Group decides each year whether and to which extent a
budget for the contribution-based pension plans is provided. Inde-
pendently of this decision, an additional risk premium is paid to cover
death and disability. Generally the accruals of the contribution-based
pension plans are wholly funded, whereas the grandfathered plans
are funded to a minor extent. On retirement, the accumulated capital
is paid as a lump sum or converted to a lifetime annuity.
Each of the pension plans in Germany, the U.K. and Switzerland
contributes more than 5% to the Allianz Group's defined benefit
obligation or its plan assets. As the Allianz Retirement and Death
Benefits Fund in the U.K. closed from 1 July 2015 to future accrual and
the plans in Switzerland are nearly negligible from a risk perspective,
except a minor liquidity risk due to the "Freizügigkeitsleistung", only
the defined benefit plans in Germany are described in more detail
regarding key risks and regulatory environment.
Purchase obligations
In the Pension Task Force, the heads of Group HR, Group
Accounting and Reporting, Group Treasury and Corporate Finance,
Group Actuarial, Planning & Controlling, Group Risk and AIM met
three times to provide global governance and pre-align pension-
related topics such as risk management and Solvency II prior to rele-
vant Group Committee meetings.
The Allianz Group provides competitive and cost-effective
retirement and disability benefits using risk appropriate vehicles.
Retirement benefits in the Allianz Group, which are granted to
employees and in Germany also to agents, are either in the form of
defined benefit or defined contribution plans. For defined benefit
plans, the beneficiary is granted a defined benefit by the employer or
via an external entity. In contrast to defined contribution arrangements,
the future cost to the employer of a defined benefit plan is not known
with certainty in advance.
OVERVIEW
38 Pensions and similar obligations
The insurance guarantee scheme for life insurers levies annual
contributions and, under certain circumstances, special contributions.
As of 31 December 2018, the future liabilities of Allianz Lebensversi-
cherungs-AG and its subsidiaries to the insurance guarantee scheme
pursuant to the Sich LVFinV amount to annual contributions of
€ 22.7 mn (2017: € 12.9 mn) and potential special contributions of, in
principle, € 203 mn (2017: € 170 mn) per year. In addition, Allianz
Lebensversicherungs-AG and some of its subsidiaries have assumed a
contractual obligation to provide, if required, further funds to
Protektor Lebensversicherungs-AG ("Protektor"), a life insurance
company that has assumed the task of the mandatory insurance
guarantee scheme for life insurers. Such obligation is, in principle,
based on a maximum of 1% of the sum of the net underwriting
reserves with deduction of payments already provided to the insurance
guarantee scheme. As of 31 December 2018, and under inclusion of
the contributions to the mandatory insurance scheme mentioned
above for a limited period of time, and assuming that no other life
insurer is exempted from payments, the aggregate outstanding
commitment of Allianz Lebensversicherungs-AG and its subsidiaries
to the insurance guarantee scheme and to Protektor is € 1,846 mn
(2017: € 1,545 mn).
Pursuant to §§221 ff. of the German Insurance Supervision Act
("Versicherungsaufsichtsgesetz" - VAG), mandatory insurance guar-
antee schemes ("Sicherungsfonds") for life insurers as well as for
health insurers are implemented in Germany, which are financed
through their member undertakings.
OTHER COMMITMENTS AND CONTINGENCIES
Allianz and HT1 Funding GmbH have signed a Contingent Indemnity
Agreement in July 2006, pursuant to which Allianz may, in certain
circumstances, be obliged to make payments to HT1 Funding GmbH.
The contingent payment obligation of Allianz relates to the coupon
payments of the Tier 1 Capital Securities issued by HT1 Funding
GmbH. The original nominal amount of the Tier 1 Capital Securities of
€ 1,000 mn was reduced in 2012 to approximately € 416 mn. This
reduces the amount of coupon payments of the Tier 1 Capital Securities
and the contingent payment obligation of Allianz accordingly. Since
June 2017, the annual coupon is the 12-month Euribor plus a margin
of 2.0% p.a., the coupon payable on 30 June 2019 is 1.819% p.a. The
securities have no scheduled maturity and the security holders have
no right to call for their redemption. Since June 2017, the securities
may be redeemed annually on 30 June at the option of the issuer.
Allianz expects not to be obliged to make a payment in the foresee-
able future. However, it is not possible for Allianz to predict the ulti-
mate payment obligations at this point in time.
The plans may vary from country to country due to the different
legal, fiscal and economic environment.
PURCHASE OBLIGATIONS
Risks typically associated with defined benefit plans are bio-
metric risks like longevity, disability, and death as well as economic
risks such as interest rates, inflation and compensation increases.
New plans are primarily based on contributions and may include, in
some cases, guarantees such as the preservation of contributions or
minimum interest rates.
2,140
Allianz Group companies are involved in legal, regulatory, and arbi-
tration proceedings in Germany and a number of foreign jurisdictions,
including the United States. Such proceedings arise in the ordinary
course of businesses, including, amongst others, their activities as
insurance, banking and asset management companies, employers,
investors and taxpayers. It is not feasible to predict or determine the
ultimate outcome of the pending or threatened proceedings. Man-
agement does not believe that the outcome of these proceedings,
including those discussed below, will have a material adverse effect
on the financial position and the results of operations of the
Allianz Group, after consideration of any applicable provision.
LITIGATION
37 Litigation, guarantees, and other
contingencies and commitments
Total
451
251
50
On 24 May 2002, pursuant to a statutory squeeze-out procedure,
the general meeting of Dresdner Bank AG resolved to transfer shares
from its minority shareholders to Allianz as principal shareholder in
return for payment of a cash settlement amounting to € 51.50 per
share. Allianz established the amount of the cash settlement on the
basis of an expert opinion, and its adequacy was confirmed by a
court appointed auditor. Some of the former minority shareholders
applied for a court review of the appropriate amount of the cash
settlement in a mediation procedure ("Spruchverfahren"). In Septem-
ber 2013, the district court ("Landgericht") of Frankfurt dismissed the
minority shareholders' claims in their entirety. This decision has been
appealed to the higher regional court ("Oberlandesgericht") of
Frankfurt. In the event that a final decision were to determine a higher
amount as an appropriate cash settlement, this would affect all of the
approximately 16 mn shares that were transferred to Allianz.
53
33
368
29
2017
2018
For the year ended 31 December 2018, rental expenses totaled
€ 281 mn (2017: € 333 mn), net of sublease rental income received of
€ 2 mn.
As of 31 December
Financial guarantees
Indemnification contracts
Performance guarantees
In September 2015 and in January 2017, two separate putative
class action complaints were filed against Allianz Life Insurance
Company of North America (Allianz Life) making allegations similar
to those made in prior class actions regarding the sale of Allianz Life's
annuity products, including allegations of breach of contract and
violation of California unfair competition law. The ultimate outcome
of the cases cannot yet be determined.
169
LOAN COMMITMENTS
COMMITMENTS
(264)
914
1,109
2,404
2018
Total
Subleases
381
Due in more than 1 and up to 5 years
Due in more than 5 years
Subtotal
Due in 1 year or less
€ mn
Future minimum lease payments - operating leases
As of 31 December 2018, the future minimum lease payments
under non-cancelable operating leases were as follows:
The Allianz Group occupies property in many locations under various
long-term operating leases and has entered into various operating
leases covering the long-term use of data processing equipment and
other office equipment.
LEASING COMMITMENTS
The Allianz Group engages in various lending commitments to meet
the financing needs of its customers. They consist of advances and
mortgage loans. As of 31 December 2018, the total of loan commit-
ments amounts to € 340 mn (2017: € 1,100 mn).
100.0
AWP Services NL B.V., Amsterdam
AllianzGI US Private Credit Solutions GP II LLC,
100.0
Allianz Suisse Lebensversicherungs-Gesellschaft
AG, Wallisellen
100.0
AWP Services New Zealand Limited, Auckland
AWP Services Belgium S.A., Brussels
350 GP LLC, Wilmington, DE
100.0
100.0
Wilmington, DE
AWP Services Singapore Pte. Ltd., Singapore
Allianz Suisse Versicherungs-Gesellschaft AG,
Wallisellen
AWP Services Sdn. Bhd., Kuala Lumpur
100.0
100.0
Allianz-Slovenská DSS a.s., Bratislava
100.0
100.0
Allianz Taiwan Life Insurance Co. Ltd., Taipei
99.7
Allianz-Slovenská poisť'ovna a.s., Bratislava
99.6
AllianzGI Structured Alpha Large Cap Equity
AWP Servicios Mexico S.A. de C.V., Mexico City
100.0
100.0
AllianzGI Real Estate Debt Fund, Boston, MA
97.6
100.0
100.0
Allianz South America Holding B.V., Amsterdam
100.0
AllianzGI Preferred Securities and Income Fund,
Boston, MA
83.03
AWP RUS LLC, Moscow
100.0
Allianz Special Opportunities Alternative Fund,
Milan
AWP Service Brasil Ltda., São Bernardo do
100.0 3
66.23
Allianz Suisse Immobilien AG, Wallisellen
Campo
Allianz Strategic Investments S.à r.l.,
AllianzGI Renewable Energy Infrastructure Fund
Luxembourg
100.0
III (US) GP LLC, Wilmington, DE
100.0
AWP Services (India) Private Limited, Gurgaon
100.0
Allianz Strategy Select 50, Senningerberg
50.0 2.3
AllianzGI Short Term Bond Fund, Boston, MA
80.83
AWP Services (Thailand) Co. Ltd., Bangkok
100.0
Allianz Team Formule 1, Paris
AZ Euro Investments S.A., Luxembourg
American Automobile Insurance Company
Allianz Technology International B.V.,
APK US Investment LP, Wilmington, DE
100.0
AWP Réunion SAS, Saint-Denis
100.0
Amsterdam
100.0
APKV US Private REIT GP LLC, Wilmington, DE
100.0
AZ Jupiter 10 B.V., Amsterdam
100.0
Allianz Technology of America Inc., Wilmington,
APKV US Private REIT LP, Wilmington, DE
100.0
AZ Jupiter 11 B.V., Amsterdam
97.6
DE
100.0
APP Broker S.r.l., Trieste
100.0
AZ Jupiter 8 B.V., Amsterdam
100.0
Allianz Technology S.C.p.A., Milan
100.0
Appia Investments S.r.l., Milan
57.6
Allianz Technology S.L., Barcelona
100.0
AZ Euro Investments II S.à r.L., Luxembourg
100.0
APK US Investment GP LLC, Wilmington, DE
Corp., Earth City, MO
100.0
AWP Servis Hizmetleri A.S., Istanbul
97.0
Allianz Team, Paris
88.33
American Financial Marketing Inc., Minneapolis,
AWP Solutions CR a SR s.r.o., Prague
100.0
Allianz Technology B.V., Rotterdam
100.0
MN
100.0
99.53
AWP Ticket Guard Small Amount & Short Term
100.0
Ann Arbor Annuity Exchange Inc., Ann Arbor, MI
100.0
Insurance Co. Ltd., Tokyo
100.0
Allianz Technology AG, Wallisellen
100.0
APEH Europe VI, Paris
99.63
AWP USA Inc., Richmond, VA
100.0
Allianz Technology GmbH, Vienna
100.0
Allianz Technology (Thailand) Co. Ltd., Bangkok
99.83
Allianz Services (UK) Limited, London
100.0
100.0
Allianz Vermogen B.V., Rotterdam
100.0
Allianz Seguros S.A., Bogotá D.C.
100.0
AWP Austria GmbH, Vienna
100.0
Allianz Vie S.A., Paris la Défense
100.0
Allianz Seguros S.A., São Paulo
100.0
AWP Brokers & Services Hellas S.A., Athens
100.0
Allianz Vie Sub Sovereign Debt FCP, Paris
100.0³
Allianz Selectie Fonds, Rotterdam
100.0 3
AWP Business Services Co. Ltd., Beijing
100.0
Allianz Vorsorgekasse AG, Vienna
100.0
Allianz Selection Alternative, Senningerberg
100.0 3
Allianz Worldwide Partners (Hong Kong) Ltd.,
AWP Chile Limitada, Santiago
100.0
Allianz Selection Fixed Income, Senningerberg
AWP Australia Pty Ltd., Toowong
100.0 3
100.0
100.0
Gurgaon
100.0
Wilmington, DE
100.0
Company, Riyadh
51.0
AWP Assistance Ireland Limited, Dublin
100.0
Allianz US Private REIT GP LLC, Wilmington, DE
100.0
Allianz Secteur Euro Immobilier, Paris
95.03
AWP Assistance Service España S.A., Madrid
100.0
Allianz US Private REIT LP, Wilmington, DE
100.0
Allianz Secteur Europe Immobilier, Paris
89.63
AWP Assistance UK Ltd., London
100.0
Allianz Valeurs Durables, Paris
43.9 2.3
Allianz Sécurité, Paris
75.73
AWP Australia Holdings Pty Ltd., Toowong
100.0
Allianz Value S.r.l., Trieste
Allianz Seguros de Vida S.A., Bogotá D.C.
Hong Kong
100.0
AWP Colombia SAS, Bogotá D.C.
AllianzGI Core Bond Fund, Boston, MA
85.13
AWP Japan Co. Ltd., Tokyo
100.0
Allianz SNA s.a.l., Beirut
100.0
AllianzGI Core Plus Bond Fund, Boston, MA
98.63
AWP MEA Holdings Co. W.L.L., Manama
100.0
Allianz Sociedad Anónima A.S. Agencia de
Seguros, Barcelona
100.0
AllianzGI Global High Yield Fund, Boston, MA
92.33
AWP Mexico S.A. de C.V., Mexico City
100.0
Allianz Sociedade Gestora de Fundos de
Pensões S.A., Lisbon
AllianzGI Global Small-Cap Opportunity
AWP P&C S.A., Saint-Ouen
100.0
88.6
Portfolio, Boston, MA
100.0 3
AWP Polska Sp. z o.o., Warsaw
100.0
Allianz Société Financière S.à r.l., Luxembourg
96.2
Allianz Sigorta A.S., Istanbul
100.0
AWP Indian Ocean LLC, Ebene
100.0
Allianz Selection Small and Midcap Equity,
Senningerberg
100.0 3
Allianz X Euler Hermes Co-Investments S.à r.l.,
Luxembourg
AWP Contact Center Italia S.r.l., Milan
100.0
100.0
AWP France SAS, Saint-Ouen
95.0
Allianz Sénégal Assurances SA, Dakar
83.2
Allianz Yasam ve Emeklilik A.S., Istanbul
Allianz Gl Green Bond Fund, Boston, MA
80.0
100.0
Dover, DE
Allianz Sénégal Assurances Vie SA, Dakar
96.8
Allianz Zagreb d.d., Zagreb
83.2
AWP Health & Life Services Limited, Dublin
100.0
AZ Jupiter 9 B.V., Amsterdam
100.0
Allianz ZB d.o.o. Company for the Management
of Obligatory Pension Funds, Zagreb
51.0
AWP Health & Life S.A., Saint-Ouen
100.0
100.0
Arcalis Retraite S.A., Paris la Défense
100.0
Allianz Global Corporate & Specialty do Brasil
Participações Ltda., Rio de Janeiro
100.0
Allianz Elementar Lebensversicherungs-
Aktiengesellschaft, Vienna
Allianz Australia Life Insurance Holdings
100.0
Allianz Australia Insurance Limited, Sydney
owned¹
owned¹
owned¹
%
%
%
D_Consolidated Financial Statements
155
Annual Report 2018 - Allianz Group
100.0
Allianz Australia Employee Share Plan Pty Ltd.,
Sydney
100.0
Windpark Dahme GmbH & Co. KG, Sehestedt
25.0
T&R Real Estate GmbH, Bonn
100.0
Sydney
100.0
25.0
T&R MLP GmbH, Bonn
Limited, Sydney
Allianz Australia Claim Services Pty Limited,
100.0
Allianz Australia Life Insurance Limited, Sydney
Allianz Global Emerging Markets Equity
100.0
Allianz Equity Investments Ltd., Guildford
Allianz Australia Workers Compensation (NSW)
100.0
100.0
Africa Ltd., Johannesburg
100.0 3
Allianz Equity Emerging Markets 1, Paris
Allianz Australia Services Pty Limited, Sydney
Allianz Global Corporate & Specialty South
100.0
100.0
Allianz Engineering Inspection Services Limited,
Guildford
Allianz Australia Partnership Services Pty
Limited, Sydney
100.0
Bermuda Ltd., Hamilton
Allianz Global Corporate & Specialty of
100.0
100.0
Allianz EM Loans S.C.S., Luxembourg
Allianz Australia Limited, Sydney
100.0
Allianz Global Corporate & Specialty of Africa
(Proprietary) Ltd., Johannesburg
100.0
Aktiengesellschaft, Vienna
100.0
Allianz Elementar Versicherungs-
Windpark Cottbuser See GmbH & Co. KG,
Sehestedt
25.0
T&R GP Management GmbH, Bonn
25.0
100.0 3
100.0
Allianz Argentina RE S.A., Buenos Aires
Allianz Asac Actions, Paris
DCSO Deutsche Cyber-Sicherheitsorganisation
GmbH, Berlin
100.0
Braunschweig
Volkswagen Autoversicherung AG,
51.08
AV Packaging GmbH, Munich
100.0
Allianz Argentina Compañía de Seguros
Generales S.A., Buenos Aires
100.0
25.0
VLS Versicherungslogistik GmbH, Berlin
Autobahn Tank & Rast Gruppe GmbH & Co. KG,
Bonn
70.0
Vivy GmbH, Berlin
100.0
Clayton, MO
16.28
Arabesque S-Ray GmbH, Frankfurt am Main
100.0
UfS Beteiligungs-GmbH, Munich
Allianz Annuity Company of Missouri,
Associates
100.0
Volkswagen Autoversicherung Holding GmbH,
Braunschweig
49.02
Windpark Aller-Leine-Tal GmbH & Co. KG,
Sehestedt
100.0
Dover, DE
100.0
Windpark Calau GmbH & Co. KG, Sehestedt
Allianz Asset Management U.S. Holding II LLC,
28.0
Norsea Gas GmbH, Friedeburg-Etzel
100.0
Windpark Büttel GmbH & Co. KG, Sehestedt
100.0
Dover, DE
28.6
Instamotion Retail GmbH, Grünwald
Dividend, Senningerberg
100.0
25.0
InnoSolutas GmbH, Bad Friedrichshall
Windpark Berge-Kleeste GmbH & Co. KG,
Sehestedt
100.0
Dover, DE
16.68
HeavenHR GmbH, Berlin
100.0
Allianz Asset Management of America L.P.,
40.0
100.0
Allianz Asset Management of America Holdings
Inc., Dover, DE
esa EuroShip GmbH & Co. KG Underwriting for
Shipping, Bad Friedrichshall
Allianz Asset Management of America LLC,
62.03
Limited, Sydney
100.0
Allianz Global Investors Singapore Ltd.,
71.9
Ouagadougou
Allianz Saudi Fransi Cooperative Insurance
Luxembourg
100.0
Allianz Global Investors Schweiz AG, Zurich
Allianz Burkina Assurances Vie SA,
Allianz Finance IV Luxembourg S.à r.L.,
100.0
Management (Shanghai) Limited, Shanghai
58.3
100.0
Allianz Finance III B.V., Amsterdam
Allianz Burkina Assurances SA, Ouagadougou
Allianz Global Investors Overseas Asset
66.2
Allianz Bulgaria Holding AD, Sofia
100.0
Luxembourg
100.0
George Town
Allianz Finance II Luxembourg S.à r.l.,
100.0 3
Allianz Bonds Euro High Yield, Paris
Allianz Global Investors Nominee Services Ltd.,
100.0
Allianz Business Services Limited, Guildford
100.0
Allianz Finance IX Luxembourg S.A.,
Singapore
100.0
Allianz Capital Partners of America LLC,
100.0
Allianz Global Investors UK Limited, London
100.0
Luxembourg
Allianz Finance VIII Luxembourg S.A.,
75.8
100.0
Allianz Global Investors U.S. LLC, Dover, DE
100.0
Luxembourg
75.4
Allianz Finance II B.V., Amsterdam
Allianz Cameroun Assurances SA, Douala
Allianz Cameroun Assurances Vie SA, Douala
Allianz Global Investors U.S. Holdings LLC,
Dover, DE
Allianz Finance VII Luxembourg S.A.,
100.0
Allianz C.P. General Insurance Co. Ltd., Bangkok
100.0
Allianz Finance Pty Ltd., Sydney
100.0
Allianz Global Investors Taiwan Ltd., Taipei
100.0
Allianz business services s.r.o., Bratislava
100.0
Luxembourg
100.0
100.0
100.0
100.03
100.0
96.83
Allianz Europa Obligatie Fonds, Rotterdam
100.0
Shanghai
Allianz Ayudhya Assurance Public Company
Limited, Bangkok
Allianz Global Investors (Shanghai) Limited,
99.33
Allianz Europa Aandelen Fonds, Rotterdam
100.0
Allianz Aviation Managers LLC, Burbank, CA
89.73
Senningerberg
100.0
Allianz Global Government Bond,
Allianz Euro Core Infrastructure Debt GP S.à r.l.,
Senningerberg
100.0 3
Allianz Australian Real Estate Trust, Sydney
100.0
(Victoria) Limited, Melbourne
41.5 23
Senningerberg
30.3 2.3
Allianz EURECO Equity, Paris
Allianz Australia Workers Compensation
Allianz Global Fundamental Strategy,
100.0 3
Allianz Equity Large Cap EMU, Paris
62.6
Allianz Europe B.V., Amsterdam
100.0
Allianz Bank Bulgaria AD, Sofia
Allianz Global Investors Japan Co. Ltd., Tokyo
100.0
Allianz Finance Corporation, Wilmington, DE
83.5
Allianz Bénin Assurances SA, Cotonou
100.0
Allianz Global Investors Ireland Ltd., Dublin
28.0 23
Allianz Europe Mid Cap Equity, Senningerberg
100.0
Allianz Benelux S.A., Brussels
100.0
Allianz Global Investors Holdings Ltd., London
Allianz Bonds Diversified Euro, Paris
100.0
100.0
Allianz Banque S.A., Puteaux
100.0
DE
Allianz Global Investors Distributors LLC, Dover,
49.8 23
Senningerberg
100.0
Allianz Bank Financial Advisors S.p.A., Milan
Allianz Europe Conviction Equity,
100.0
Allianz Global Investors Asia Pacific Ltd., Hong
Kong
99.9
Allianz Europe Ltd., Amsterdam
Allianz US Private Credit Solutions GP LLC,
100.0
100.0
100.0
Allianz Infrastructure Spain Holdco | S.à r.l.,
Luxembourg
100.0
Allianz Management Services Limited, Guildford
Allianz Marine & Transit Underwriting Agency
Pty Ltd., Sydney
100.0
Allianz Private Equity Partners IV, Milan
100.0 3
Allianz Private Equity Partners V, Milan
100.0 3
75.0
Allianz Properties Limited, Guildford
100.0
Allianz Infrastructure Spain Holdco II S.à r.L.,
Luxembourg
Allianz Marine (UK) Ltd., Ipswich
100.0
Allianz Re Dublin dac, Dublin
100.0
100.0
Allianz Maroc S.A., Casablanca
98.9
Allianz Real Estate France SAS, Paris
100.0
Allianz Insurance Company of Ghana Limited,
Accra
Allianz Mena Holding Bermuda Ltd., Hamilton
99.9
Allianz Real Estate Investment S.A.,
100.0
Allianz Infrastructure Norway Holdco | S.à r.l.,
Luxembourg
Allianz France S.A., Paris la Défense
77.1
92.03
100.0
Allianz Infrastructure Luxembourg Holdco III
S.A., Luxembourg
Allianz Life Insurance Malaysia Berhad p.l.c.,
Kuala Lumpur
Allianz Presse Infra GP S.à r.L., Luxembourg
100.0
100.0
Allianz Presse Infra S.C.S., Luxembourg
100.0
100.0
Allianz Life Luxembourg S.A., Luxembourg
100.0
Allianz Presse US REIT GP LLC, Wilmington, DE
100.0
Allianz Infrastructure Luxembourg Holdco IV
Allianz Madagascar Assurances SA,
S.A., Luxembourg
100.0
Allianz Presse US REIT LP, Wilmington, DE
100.0
Antananarivo
100.0
Allianz Infrastructure Luxembourg | S.à r.L.,
Luxembourg
100.0
Allianz Malaysia Berhad p.l.c., Kuala Lumpur
Allianz Mali Assurances SA, Bamako
75.0
Allianz Private Equity Partners Europa II, Milan
Allianz Private Equity Partners Europa III, Milan
99.63
100.0
Allianz Congo Assurances SA, Brazzaville
100.0
Allianz Hayat ve Emeklilik A.S., Istanbul
100.0
Budapest
100.03
Allianz Groen Rente Fonds, Rotterdam
Allianz Foglalkoztatói Nyugdíjszolgáltató Zrt.,
100.0
Allianz Chicago Private Reit LP, Wilmington, DE
60.83
Allianz Global Water, Senningerberg
99.03
Allianz Fixed Income Macro Fund, London
88.3
Allianz Centrafrique Assurances SA, Bangui
100.0
Allianz Global Risks US Insurance Company
Corp., Chicago, IL
100.0
Tokyo
100.0
Allianz Cash SAS, Paris la Défense
Allianz Fire and Marine Insurance Japan Ltd.,
100.0
Allianz Carbon Investments B.V., Amsterdam
100.0
Allianz Global Life dac, Dublin
52.43
Allianz FinanzPlan 2055, Senningerberg
89.0
Allianz China General Insurance Company Ltd.,
Guangzhou
50.02
Allianz France Favart I, Paris
Allianz Holdings plc, Guildford
100.0
100.0
Allianz Holdings p.l.c., Dublin
Allianz France Richelieu 1 S.A.S., Paris la
Défense
99.9
S.A., Madrid
Allianz Compañía de Seguros y Reaseguros
100.0
100.0
Allianz Holding France SAS, Paris la Défense
Paris la Défense
93.93
100.0
Allianz Combinatie Fonds, Rotterdam
100.0
Allianz Holding eins GmbH, Vienna
100.0
Allianz Colombia S.A., Bogotá D.C.
100.0
100.0
Allianz Hold Co Real Estate S.à r.l., Luxembourg
Allianz France Investissement OPCI, Paris la
Défense
51.0
Allianz China Life Insurance Co. Ltd., Shanghai
100.0
Allianz Hellas Insurance Company S.A., Athens
100.0 ³
Allianz France Real Estate Invest SPPICAV,
Reaseguros S.A., Madrid
100.0
Allianz Life Insurance Lanka Ltd., Colombo
Allianz Crowdfunding Fund I FPCI, Paris
100.0 3
Allianz Fund Investments Inc., Wilmington, DE
Allianz IARD Vintage, Paris
100.0 3
100.0
Allianz Crowdlending FSPI, Paris
100.03
Allianz Fund Investments S.A., Luxembourg
100.0
Allianz IndexManagement Balance,
Senningerberg
100.03
Allianz Debt Fund S.à r.L., Luxembourg
100.0
Allianz Garantie Fonds 3%, Rotterdam
100.0
Allianz IndexManagement Chance,
Allianz Debt Fund SCSP SICAV-SIF, Luxembourg
99.8
Allianz Garantie Fonds 4,75%, Rotterdam
99.63
Senningerberg
100.0 3
Allianz Defensief Mix Fonds, Rotterdam
100.0 3
Allianz Garantiefonds 3,35%, Rotterdam
100.0 3
100.0
Luxembourg
100.0 ³
Allianz Creactions 2, Paris
Allianz Hospitaliers Euro, Paris
100.0 3
Allianz Cornhill Information Services Private
Allianz France US REIT GP LLC, Wilmington, DE
100.0
Allianz Hospitaliers Valeurs Durables, Paris
100.0 3
Ltd., Trivandrum
100.0
Allianz France US REIT LP, Wilmington, DE
100.0
Allianz Hungária Biztosító Zrt., Budapest
100.0
Allianz IndexManagement Substanz,
Allianz Côte d'Ivoire Assurances SA, Abidjan
Allianz Côte d'Ivoire Assurances Vie SA, Abidjan
71.0
Allianz Fund Administration and Management
B.V., Rotterdam
Allianz HY Investor GP LLC, Wilmington, DE
100.0
100.0
Allianz HY Investor LP, Wilmington, DE
100.0
Allianz Creactions 1, Paris
100.0 3
Allianz Fund Investments 2 S.A. (Compartment),
Allianz IARD S.A., Paris la Défense
100.0
74.1
100.0
Allianz do Brasil Participações Ltda., São Paulo
Allianz Garantiefonds 5%, Rotterdam
D_Consolidated Financial Statements
%
%
owned¹
owned¹
%
owned¹
Allianz Infrastructure Czech HoldCo II S.à r.l.,
Luxembourg
100.0
Allianz Life Insurance Company of New York,
New York, NY
100.0
Allianz Popular Asset Management SGIIC S.A.,
Madrid
100.0
Allianz Infrastructure Fund S.A., Senningerberg
100.0
Allianz Life Insurance Company of North
Allianz Popular Pensiones EGFP S.A., Madrid
100.0
America, Minneapolis, MN
100.0
Allianz Infrastructure Luxembourg Holdco I S.A.,
Luxembourg
Allianz Popular S.L., Madrid
60.0
100.0
Allianz Life Insurance Japan Ltd., Tokyo
100.0
Allianz Popular Vida Compañía de Seguros y
Allianz Infrastructure Luxembourg Holdco II
S.A., Luxembourg
Annual Report 2018 - Allianz Group
156
100.0
Allianz Infrastructure Czech HoldCo I S.à r.l.,
Luxembourg
100.0 3
Senningerberg
100.03
Allianz Duurzaam Wereld Aandelen Fonds,
Rotterdam
Allianz Geldmarkt Fonds, Rotterdam
100.0 3
Allianz IndexManagement Wachstum,
Senningerberg
100.0 3
76.63
Allianz General Insurance Company (Malaysia)
Allianz Edukacja S.A., Warsaw
100.0
100.0
Berhad p.l.c., Kuala Lumpur
Allianz Individual Insurance Group LLC,
Minneapolis, MN
100.0
Spherion Objekt GmbH & Co. KG, Stuttgart
Allianz Egypt for Financial Investments
Company S.A.E., New Cairo
Allianz General Laos Ltd., Vientiane
51.0
Allianz Informatique G.I.E., Paris la Défense
100.0
100.0
Allianz Global AC Equity Insights Fund, London
98.0
Allianz Global Aggregate Bond, Senningerberg
99.33
100.0
AWP Assistance (India) Private Limited,
Allianz Insurance Company of Kenya Limited,
Nairobi
Allianz México S.A. Compañía de Seguros,
Mexico City
100.0
Allianz Renewable Energy Partners VII LP,
Luxembourg
100.0
Allianz Pacific Aandelen Fonds, Rotterdam
94.73
London
100.0
Allianz Leben Real Estate Holding II S.à r.l.,
Allianz Partners S.A.S., Saint-Ouen
100.0
Luxembourg
100.0
Allianz Renewable Energy Partners VIII Limited,
London
100.0
Allianz Pension Fund Trustees Ltd., Guildford
100.0
Allianz Life (Bermuda) Ltd., Hamilton
100.0
Allianz Pensionskasse Aktiengesellschaft,
Allianz Life Assurance Company-Egypt S.A.E.,
Allianz Resilient Credit Euro Fund GP S.à r.L.,
Senningerberg
100.0
Vienna
100.0
New Cairo
100.0
Allianz p.l.c., Dublin
Allianz Resilient Credit UK GP Limited, London
Allianz Leben Real Estate Holding | S.à r.L.,
Allianz Renewable Energy Partners VI Limited,
London
Allianz Investments III Luxembourg S.A.,
Allianz of America Inc., Wilmington, DE
100.0
Luxembourg
100.0
Allianz Renewable Energy Partners of America
Allianz Offensief Mix Fonds, Rotterdam
100.0 3
LLC, Wilmington, DE
100.0
Allianz Jewel Fund ICAV, Dublin
100.0
Allianz One Beacon GP LLC, Wilmington, DE
100.0
Allianz Renewable Energy Partners V plc.,
Allianz kontakt s.r.o., Prague
100.0
London
100.0
Allianz Langlopend Obligatie Fonds, Rotterdam
100.03
Allianz One Beacon LP, Wilmington, DE
100.0
Allianz Leasing Bulgaria AD, Sofia
51.0
Allianz Opéra, Paris
100.0³
100.0
100.0
Allianz penzijní spolecnost a.s., Prague
100.0
157
D_Consolidated Financial Statements
%
%
%
owned¹
owned¹
owned¹
Allianz S.p.A., Trieste
100.0
Allianz Underwriters Insurance Company Corp.,
Burbank, CA
Avip Top Harmonie, Paris
97.83
100.0
Allianz Saint Marc CL, Paris
100,0 3
Avip Top Tempéré, Paris
99.53
Allianz SAS S.A.S., Bogotá D.C.
Allianz US Investment GP LLC, Wilmington, DE
100.0
100.0
AWP Argentina S.A., Buenos Aires
100.0
Allianz US Investment LP, Wilmington, DE
100.0
Allianz Saúde S.A., São Paulo
Annual Report 2018 - Allianz Group
100.0
Allianz S.A. de C.V., Mexico City
100.0
Allianz Life Financial Services LLC,
Allianz Risk Consultants Inc., Los Angeles, CA
100.0
Minneapolis, MN
100.0
Allianz Pimco Corporate, Vienna
95.23
Allianz Risk Transfer (Bermuda) Ltd., Hamilton
100.0
Allianz Life Insurance Company Ltd., Moscow
100.0
Allianz Pimco Mortgage, Vienna
82.43
100.0
Allianz Risk Transfer (UK) Limited, London
Allianz Life Insurance Company of Ghana
Allianz PNB Life Insurance Inc., Makati City
51.0
Allianz Risk Transfer AG, Schaan
100.0
Limited, Accra
100.0
Allianz pojistovna a.s., Prague
Allianz Life Insurance Company of Missouri,
Clayton, MO
Allianz Risk Transfer Inc., New York, NY
100.0
100.0
Allianz Polska Services Sp. z o.o., Warsaw
100.0
Allianz Renewable Energy Partners of America
3 LLC, Wilmington, DE
85.33
Allianz Obligations Internationales, Paris
100.0
Allianz Multi Horizon 2021-2023, Paris
74.43
Senningerberg
100.0
Allianz Invest 10 Division S/U, Vienna
100.0 3
Allianz Multi Horizon 2024-2026, Paris
60.13
Allianz Renewable Energy Fund III Lux GP S.à
r.L., Senningerberg
100.0
Allianz Invest 11 Division Leben/Kranken,
Vienna
Allianz Multi Horizon 2027-2029, Paris
62.13
100.0 3
Allianz Renewable Energy Fund Management 1
Allianz Invest 12 Division Leben/Kranken,
Vienna
Allianz Multi Horizon 2033-2035, Paris
100.03
Ltd., London
100.0
100.0 3
Allianz Multi Horizon 2036-2038, Paris
100.0³
Allianz Renewable Energy Management AT
GmbH, Pottenbrunn
100.0
Allianz Inversiones S.A., Bogotá D.C.
Allianz Renewable Energy Fund III GP SCSP,
99.73
Allianz Multi Harmonie, Paris
Luxembourg
100.0
100.0
Allianz Real Estate of America LLC, New York,
NY
100.0
Allianz Insurance Company-Egypt S.A.E., New
Cairo
Allianz Mid Cap Loans FCT, Paris
100.0 3
Allianz Real Estate Trust II (1), Sydney
98.73
95.0
Allianz Multi Croissance, Paris
75.03
Allianz Invest 50, Vienna
Allianz Real Estate Trust II (2), Sydney
Allianz Insurance Lanka Limited, Colombo
100.0
Allianz Multi Dynamisme, Paris
86.33
Allianz Insurance plc, Guildford
100.0
Allianz Multi Equilibre, Paris
98.13
100.0
Allianz Reinsurance America Inc., Los Angeles,
CA
100.0
Allianz International Ltd., Guildford
100.0
98.73
100.0
100.0 3
100.0³
Allianz Nederland Groep N.V., Rotterdam
100.0
Minneapolis, MN
100.0
Allianz Investmentbank Aktiengesellschaft,
Allianz Nederland Levensverzekering N.V.,
Rotterdam
Allianz Renewable Energy Partners IV Limited,
London
98.8
100.0
Vienna
100.0
Allianz New Europe Holding GmbH, Vienna
100.0
Allianz Renewable Energy Partners IX Limited,
London
98.7
Allianz Investments | Luxembourg S.à r.l.,
Luxembourg
100.0
Allianz New Zealand Limited, Auckland
100.0
Allianz Investments II Luxembourg S.à r.l.,
Allianz Nigeria Insurance plc, Lagos
99.1
Allianz Renewable Energy Partners of America
2 LLC, Wilmington, DE
100.0
Luxembourg
100.0
Allianz Investment Management LLC,
98.8
London
Allianz Renewable Energy Partners III LP,
Allianz Renewable Energy Management AT II
Allianz Invest Cash, Vienna
78.93
Allianz Multi Horizon Court Terme, Paris
74.13
GmbH, Pottenbrunn
100.0
Allianz Invest d.o.o., Zagreb
100.0
Allianz Invest Kapitalanlagegesellschaft mbH,
Vienna
Allianz Multi Horizon Long Terme, Paris
Allianz Multi Opportunités, Paris
43.6 2.3
Allianz Renewable Energy Partners I LP,
Allianz Multi Horizon 2039-2041, Paris
89.93
100.0
100.0
Allianz Multi Rendement Réel, Paris
88.23
Allianz Invest Ostrent, Vienna
79.83
Allianz Renewable Energy Partners II Limited,
London
100.0
Allianz Mutual Funds Management Company
Allianz Invest Spezial 3, Vienna
100.0 3
S.A., Athens
100.0
London
96.2 3
Allianz Africa Services SA, Abidjan
94.9
Weighted-
average
exercise price
€
Number of
options
Weighted-
average
exercise price
€
Number of
options
2017
2018
Reconciliation of outstanding M-unit options
The number and weighted-average exercise price of the M-unit options
outstanding and exercisable are as follows:
* * *
1.9
2.5
%
13.7
11.8
%
25.2
21.0
%
3.84
3.84
Expected return (in years)
Expected volatility
Expected dividend yield
Risk free rate of return
387.10
2017
2018
412.40
€
Weighted-average fair value of options granted
Assumptions:
Assumptions of Class M-Unit plan
Outstanding as of
The following table provides the assumptions used in calculating
the fair value of the M-unit options at grant date:
1 January
Granted
122,972
49,595
(19,084)
(9,625)
Earnings per share are calculated by dividing net income attributable
to shareholders by the weighted-average number of common shares
outstanding. For the calculation of diluted earnings per share, the
nominator and denominator are adjusted for the effects of potentially
dilutive common shares. These effects arise from various share-based
compensation plans of the Allianz Group.
OTHER SHARE OPTION AND SHAREHOLDING PLANS
The Allianz Group has other local share-based compensation plans,
including share option and employee share purchase plans, none of
which, individually or in the aggregate, are material to the consoli-
dated financial statements.
The Allianz Group offers Allianz SE shares in 32 countries to entitled
employees at favorable conditions. The shares have a minimum
holding period of three to five years. During the year ended
31 December 2018, the number of shares sold to employees under
these plans was 407,495 (2017: 562,546). From 2018 onwards, the
employees are no longer able to buy shares at a discounted price,
but receive one bonus share for three shares bought. For the year
ended 31 December 2018, these bonus shares had an equivalent
value of € 15 mn. During the year ended 31 December 2017, the
Allianz Group had recognized the difference between the issue price
charged to the subsidiaries of the Allianz Group and the discounted
price of the shares purchased by employees, amounting to € 25 mn
as compensation expenses.
EMPLOYEE STOCK PURCHASE PLANS
During the year ended 31 December 2018, the Allianz Group
recorded compensation expenses of € 14 mn (2017: € 16 mn) related
to these share options.
The share options settled by delivery of PIMCO LLC shares are
accounted for as equity-settled plans by PIMCO LLC. Therefore,
PIMCO LLC measures the total compensation expense to be recog-
nized for the equity-settled shares based on their fair value as of the
grant date. The total compensation expense is recognized over the
vesting period.
As of 31 December 2018, the M-unit options outstanding have
an exercise price between € 9,901.59 and € 21,005.12 and a
weighted-average remaining contractual life of 3.08 years.
outstanding was € 356 mn (2017: € 200 mn).
As of 31 December 2018, the aggregate intrinsic value of share options 40 _ Earnings per share
D_Consolidated Financial Statements
151
Annual Report 2018 - Allianz Group
31 December
Exercisable as of
Outstanding as of
31 December
Exercised
As of 31 December 2018, the Allianz Group recorded provisions
of € 383 mn (2017: € 472 mn) for these RSUs in Other liabilities.
The RSUs are accounted for as cash-settled plans as the
Allianz Group intends to settle in cash. Therefore, the Allianz Group
accrues the fair value of the RSUs as compensation expenses over
the service period of one year and afterwards over the vesting period.
During the year ended 31 December 2018, the Allianz Group recog-
nized compensation expenses related to the AEI plans of € 96 mn
(2017: € 261 mn).
122,972 12,063.87
11,902.16
143,858
14,097.57
(7,071)
17,000.84
9,830.11
18,163.02
(33,344)
114,192
49,195
12,063.87
13,583.45
20,639.22
13,081.02
Forfeited
The fair value of the underlying M-unit options was measured
using the Black-Scholes option pricing model. Volatility was derived
in part by considering the average historical and implied volatility of
a selected group of peers. The expected life of one granted option
was calculated based on treating the three vesting tranches (one
third in years 3, 4, and 5) as three separate awards.
A maximum of 250,000 M-units are authorized for issuance under
the M-unit Plan.
In 2008, AllianzGI L.P. launched a new management share-based
payment incentive plan for certain senior-level executives and affiliates
of PIMCO LLC. Participants in the plan are granted options to acquire
an own class of equity instruments (M-units), which vest in one-third
increments on approximately the third, fourth and fifth anniversary of
the option grant date. Upon vesting, options will automatically be
exercised in a cashless transaction, but only if they are in the money.
Participants may elect to defer the receipt of M-units through the
M-unit Deferral Plan until termination of their service at the latest.
With the M-unit Plan, participants can directly participate in PIMCO's
performance. Class M-units are non-voting common equity with
limited information rights. They bear quarterly distributions equal to a
pro-rata share of PIMCO's net distributable income. Deferred M-units
have a right to receive a quarterly cash compensation equal to and in
lieu of quarterly dividend payments.
During the year ended 31 December 2018, the Allianz Group
recognized expenses for defined contribution plans of € 257 mn
(2017: € 267 mn). Additionally, the Allianz Group paid contributions
for state pension schemes of € 329 mn (2017: € 331 mn).
Defined contribution plans are funded through independent pension
funds or similar organizations. Contributions fixed in advance (e.g.
based on salary) are paid to these institutions and the beneficiary's
right to benefits exists against the pension fund. The employer has no
obligation beyond payment of the contributions.
DEFINED CONTRIBUTION PLANS
D_Consolidated Financial Statements
Annual Report 2018 - Allianz Group
150
For the year ending 31 December 2019, the Allianz Group expects to
contribute € 292 mn to its defined benefit plans (2017: € 281 mn for
the year ending 31 December 2018) and to pay € 323 mn directly to
participants in its defined benefit plans (2017: € 313 mn for the year
ending 31 December 2018).
CONTRIBUTIONS
In addition to the plan assets of € 14.6 bn (2017: € 14.4 bn), the
Allianz Group has dedicated assets at Group level amounting to
€ 8.6 bn as of 31 December 2018 (2017: € 8.4 bn), which are likewise
managed according to Allianz ALM standards.
The bulk of the plan assets are held by Allianz Versorgungskasse
VVaG, Munich, which is not part of the Allianz Group. Plan assets do
not include any real estate used by the Allianz Group and include only
€ 39.1 mn (2017: 40.4 mn) of own transferable financial instruments.
An increase in the discount rate by 50 basis points would lead to
a decrease of € 1.5 bn (2017: € 1.6 bn) in the defined benefit obliga-
The range for the sensitivity calculations was derived by analyz-
ing the average volatility over a five-year period.
The discount rate assumption is the most significant risk for the
defined benefit obligation. It reflects market yields at the balance
sheet date of high-quality fixed income investments corresponding to
the currency and duration of the liabilities. In the Eurozone, the decision
for the discount rate is based on AA-rated financial and corporate
bonds, provided by Allianz Investment Data Services (IDS), and a
standardized cash flow profile for a mixed population. The Internal
Controls Over Financial Reporting (ICOFR) certified Allianz Global
Risk Parameters (GRIPS) methodology is an internal development of
the Nelson-Siegel model and consistently used by Group Risk, Group
Audit, AIM and PIMCO.
The recognized expense is recorded based on the assumptions of the
corresponding previous year.
205
14,428
14,624
Total
247
914
998
Life insurance investment products
Other
1.0
1.0
Rate of medical cost trend
3,369
3,590
Annuity contracts
39 Share-based compensation plans
ALLIANZ EQUITY INCENTIVE PLAN (AEI)
The AEI plan is granted in the form of restricted stock units (RSUs) and
is part of a new variable compensation component for the plan
beneficiaries.
The RSU granted to a plan participant obligate the
Allianz Group to pay in cash the average closing price of an
Allianz SE share on the last day of the vesting period and the prior
nine trading days, or to convert one RSU into one Allianz SE share.
The payout is capped at a 200% share price growth above the grant
price.
PIMCO LLC CLASS M-UNIT PLAN
1 The RSUs 2019 are deemed to have been granted to participants as part of their 2018 remuneration. Consequently,
the assumptions for RSU grants delivered in March 2019 are based on best estimate.
22.9
20.2
19.3
%
Expected volatility
4.8
(0.1)
(0.1)
(0.2)
%
Average interest rate
4.8
Earnings per share
5.2
Average dividend yield
167.45
2017
2018
183.80
184.92
€
Share price
2019
Assumptions of AEI plans
The following table provides the assumptions used in calculating
the fair value of the RSUs at grant date:
The RSUs are virtual stocks without dividend payments and a
capped payout. The fair value is calculated by subtracting the net
present value of expected future dividend payments until maturity as
well as the fair value of the cap from the prevailing share price as of
the valuation date. The cap is valued as a European short call option,
using prevailing market data as of the valuation date.
In addition, upon the death of a plan participant, a change of
control or notice for operational reasons, the RSUs vest immediately
and will be exercised by the company.
The RSUs are subject to a vesting period of four years and will be
settled on the last day of the vesting period. The Allianz Group can
choose the settlement method for each unit.
%
1.3
€ mn
Weighted-average number of common shares
outstanding - basic
Annual Report 2018 - Allianz Group
Other services primarily refer to consulting services.
Tax services primarily refer to tax compliance and personal tax
compliance services.
Audit services by PwC IL primarily relate to services rendered for the
audit of the Allianz Group's consolidated financial statements, the
audit of the statutory financial statements of Allianz SE and its subsid-
iaries, the audit of the Allianz Group's solvency balance sheet as well
as the solvency balance sheets of Allianz SE and its subsidiaries. In
addition, reviews of interim financial statements were performed.
23.9
17.3
57.9
57.8
7.5
4.8
10.6
11.5
Other services
Total
0.9
0.2
1.4
5.6
Tax services
2.6
0.7
4.8
1.1
Other attestation services
12.9
11.5
41.0
39.6
42 _ Subsequent events
Audit services
In March 2019, Allianz SE has started a new share buy-back program
with a volume of up to € 1.5 bn. For further information, please refer
to the section "Expected dividend development" of the chapter
Outlook 2019 within the Group Management Report.
2_The disclosure in the Annual Report 2017 was based on a best estimate of the RSU grants. The figures shown here for
Allianz Leben Private Equity Fonds Plus GmbH,
Munich
0.02
ACP GmbH & Co. Beteiligungen KG II, Munich
100.0
abracar GmbH, Munich
100.0
100.0
100.0
100.0
owned¹
%
APK Infrastrukturfonds GmbH, Munich
Allianz Leben Private Equity Fonds 2008 GmbH,
Munich
AllSecur Deutschland AG, Munich
100.0
Allianz X GmbH, Munich
Allianz Leben Private Equity Fonds 2001 GmbH,
Munich
Consolidated affiliates
GERMANY
owned¹
%
owned¹
%
43 List of participations of the Allianz Group as of 31 December 2018 according to § 313 (2) HGB
D_Consolidated Financial Statements
153
2017 now include the actual fair value as of the grant date (2 March 2018). The value therefore differs from the amount
disclosed last year.
1 The relevant share price used to determine the final number of RSUS granted is only available after the sign-off of the
Annual Report by the external auditors, thus numbers are based on a best estimate.
2017
2018
2017
Salaries and wages
2017
2018
€ mn
Personnel expenses
152
PERSONNEL EXPENSES
As of 31 December 2018, the Allianz Group employed 142,460 (2017:
140,553) people, thereof 37,566 (2017: 40,149) in Germany. The
average total number of employees for the year ended
31 December 2018 was 141,507.
15.24
15.23
17.43
17.30
NUMBER OF EMPLOYEES
41 Other information
Basic earnings per share (€)
Diluted earnings per share (€)
446,538,172
429,996,810
Weighted-average number of common
shares outstanding - diluted
446,440,727
97,445
428,106,916
1,889,894
Potentially dilutive common shares
6,801
7,437
(3)
(25)
6,803
7,462
2017
2018
9,213
9,524
Social security contributions and employee assistance
1,352
2018
thereof: PwC GmbH
(2017: KPMG AG)
(2017: KPMG International)
PwCIL
Board of Management and Supervisory Board compensation by
individual is included in the Remuneration Report. The information
provided there is considered part of these consolidated financial
statements.
The total remuneration for all Supervisory Board members,
including attendance fees, amounted to € 2.7 mn (2017: € 2.2 mn).
In 2018, remuneration and other benefits totaling € 8 mn (2017:
€ 8 mn) were paid to former members of the Board of Management
and dependents, while reserves for current pension obligations and
accrued pension rights totaled € 152 mn (2017: € 137 mn).
RSUS with a total fair value of € 9.4 mn (2017: € 8.4 mn) were
granted to the Board of Management for the year ended
31 December 2018.
The equity-related remuneration is comprised in 2018 of 63,942¹
(2017: 53,7532) Restricted Stock Units (RSUs).
The sum of the total remuneration of the Allianz SE Board of
Management for 2018, excluding the notional accruals and payments
of the MTB 2016 - 2018 as well as the pension service cost, amounts
to € 27 mn (2017: € 24 mn).
As of 31 December 2018, the Board of Management is comprised of
ten members. The following values reflect the full Board of Manage-
ment active in the respective year.
REMUNERATION FOR THE BOARD OF MANAGEMENT
AND THE SUPERVISORY BOARD
PwC fees
€ mn
Net income attributable to shareholders - basic
Effect of potentially dilutive common shares
Net income attributable to shareholders -
diluted
For services rendered by PwC GmbH (2017: KPMG AG
Wirtschaftsprüfungsgesellschaft) and the worldwide member firms of
PricewaterhouseCoopers International Limited (PwCIL) (2017: KPMG
International), the following fees were recognized as an expense in
the fiscal year:
On 8 March 2018, the Allianz SE Supervisory Board elected Pricewa-
terhouseCoopers GmbH Wirtschaftsprüfungsgesellschaft (PwC GmbH)
as the external auditing firm for the Allianz Group and successor to
KPMG AG Wirtschaftsprüfungsgesellschaft (KPMG AG).
PRINCIPAL ACCOUNTANT FEES AND SERVICES
On 12 December 2018, the Board of Management and the Supervi-
sory Board of Allianz SE issued the Declaration of Compliance
according to §161 AktG, which has been made permanently availa-
ble to shareholders on the company's website.
WITH THE GERMAN CORPORATE GOVERNANCE CODE
ACCORDING TO § 161 AKTG
ISSUANCE OF THE DECLARATION OF COMPLIANCE
D_Consolidated Financial Statements
Annual Report 2018 - Allianz Group
12,138
11,768
1,217
1,203
Expenses for pensions and other post-retirement benefits
Total
1,397
On 14 May 2018, the Supervisory Board's Audit Committee
engaged PwC GmbH as external auditor, starting from the fiscal year
2018.
1.4
Rate of pension increase
740
(4)
14
(4)
(358)
178
358
(178)
income (before deferred taxes)
consolidated statements of comprehensive
Remeasurements recognized in the
Change in effect of asset ceiling in excess of interest
Return on plan assets greater/(less) than interest income on
plan assets
145
195
187
(391)
(130)
(288)
616
621
3
(1)
3
(1)
(262)
(264)
262
14
264
(485)
(178)
19
20
37
23
Acquisitions and divestitures
(291)
(297)
(456)
(451)
(747)
(747)
Benefits paid
122
126
122
126
Plan participants' contributions
(276)
(369)
276
369
Employer contributions
(142)
(311)
14
(4)
358
202
426
425
426
23,597
Balance as of 1 January
2017
2018
2017
2018
2017
2018
2017
2018
(1-11+111)
III
balance
benefit
Net defined
ceiling¹
Effect of
asset
Fair value
of plan
assets
Defined
benefit
obligation
€ mn
Reconciliation of defined benefit obligation, fair value of plan assets, effect of asset ceiling, and net defined benefit balance
The following table sets out the changes in the defined benefit obli-
gation, in the fair value of plan assets, in the effect of the asset ceiling
as well as in the net defined benefit balance for the various
Allianz Group defined benefit plans:
DEFINED BENEFIT PLANS
Additionally, the Allianz Group offers a deferred compensation
program, "Pensionszusage durch Entgeltumwandlung (PZE)", for
active employees. Within some boundaries they convert at their
discretion parts of their gross income and receive in exchange a
pension commitment of equal value. PZE is qualified as a defined
benefit plan with small risk exposure.
The period in which a retirement benefit can be drawn is usually
between the ages of 60 and 67. Disability benefits are granted until
retirement pension is paid. In the case of death under the previous
plans, surviving dependents normally receive 60% (widow/widower)
and 20% (per child) of the original employee's pension, in total not to
exceed 100%. Under the "My Allianz Pension" plan, the surviving
dependents gain the accrued capital.
Pension increases apart from AVK and APV are guaranteed at
least with 1% p.a. Depending on legal requirements, some pension
increases are linked to inflation. In AVK the complete surplus share of
the retirees is used to increase their pension.
D_Consolidated Financial Statements
23,316
14,428
14,048
43
425
145
195
187
(391)
(130)
(288)
Experience adjustments
Changes in financial assumptions
Changes in demographic assumptions²
Actuarial (gains)/losses due to
262
264
3
877
income statements
Expenses recognized in the consolidated
Other
Interest income
Interest expenses
448
461
448
461
Current service costs
9,300
9,212
32
884
19
Settlement payments/assets distributed on settlement
(3)
2017
2018
As of 31 December
1.8
2.0
€ mn
2017
2018
Asset allocation of plan assets
Discount rate
As of 31 December
%
Assumptions for defined benefit plans
Due to a well-diversified portfolio of approximately 137,000 (2017:
138,000) plan participants, there is no reasonable uncertainty of future
cash flows to be expected that could have an impact on the liquidity of
the Allianz Group. The chart below shows the asset allocation:
PLAN ASSETS/ASSET LIABILITY MANAGEMENT (ALM)
Based on the estimated future cash flows of € 789 mn for 2019,
€ 795 mn for 2020, € 846 mn for 2021, € 907 mn for 2022, € 912 mn
for 2023, and € 4,664 mn for 2024 - 2028, the weighted duration of
the defined benefit obligation is 17.2 (2017: 15.7) years. Based on the
liability profiles of the defined benefit obligation and on the regulato-
ry funding requirements, the Allianz Group uses stochastic asset
liability models to optimize the asset allocation from a risk-return
perspective.
An increase in the medical cost trend rate by 100 basis points
would have an effect of € 1 mn (2017: € 1 mn) on the defined benefit
obligation and like last year no material effect on the defined benefit
costs.
An increase of pre-retirement benefit assumptions (e.g. salary in-
crease) of 25 basis points would have an effect of € 62 mn (2017:
€ 68 mn) on the defined benefit obligation. However, the increase of
post-retirement assumptions (e.g. inflation-linked increases of pen-
sion payments) of 25 basis points would increase the defined benefit
obligation by € 494 mn (2017: € 525 mn).
tion, whereas a decrease in the discount rate by 50 basis points would
lead to an increase of € 1.7 bn (2017: 1.8 bn).
The weighted average values of the assumptions for the
Allianz Group's defined benefit plans used to determine the defined
benefit obligation and the recognized expense are as follows:
The calculations are based on current actuarially calculated
mortality tables, projected turnover depending on age and length of
service, and internal Allianz Group retirement projections. Although
this represents the best estimate as of today, considering a further
increase in life expectancy could be reasonable. The weighted aver-
age life expectancy of a currently 65-year-old plan participant is
about 89.2 (2017: 89.2) years for women and 86.5 (2017: 86.8) years
for men. An increase in life expectancy by one year would lead to an
increase of the defined benefit obligation by € 678 mn (2017:
€ 705 mn).
The assumptions for the actuarial computation of the defined benefit
obligation and the recognized expense depend on the circumstances
in the particular country where the plan has been established.
ASSUMPTIONS
During the year ended 31 December 2018, the defined benefit
costs related to post-retirement health benefits amounted to € - mn
(2017: € 1 mn).
As of 31 December 2018, post-retirement health benefits included in
the defined benefit obligation and in the net amount recognized
amounted to € 10 mn (2017: € 10 mn) and € 10 mn (2017: € 10 mn),
respectively.
D_Consolidated Financial Statements
149
Annual Report 2018 - Allianz Group
This includes the following country rates:
Germany
Equity securities
Quoted
787
Real estate
1.4
1.4
Rate of compensation increase
1,875
1,952
Non-quoted
0.8
1.0
Switzerland
5,551
5,473
3_As of 31 December 2018, € 5,406 mn (2017: € 5,527 mn) of the defined benefit obligation are wholly unfunded, while € 18,030 mn (2017: € 18,071 mn) are wholly or partly funded.
Quoted
2.7
United Kingdom
Debt securities
1.4
1.6
short duration
5
1,769
1,577
Non-quoted
1.8
2.0
long duration
2.4
APK-Argos 75
2_Includes for 2018 € 278 mn in Germany due to the change in mortality tables.
(93)
43
40
14,428
14,624
23,597
23,436
Balance as of 31 December³
(8)
(2)
42
(2)
34
(4)
Allianz Group
Changes in the consolidated subsidiaries of the
(4)
(5)
(3)
2
(240)
51
(241)
44
Foreign currency translation adjustments
(2)
(3)
(2)
8,853
9,212
thereof assets
(239)
(81)
116
(27)
8,761
8,566
33
43
40
1,407
1,453
1,271
1,332
Switzerland
1 The asset ceiling is determined by taking into account the reduction of future contributions.
1,614
1,730
1,598
United Kingdom
9,366
9,586
18,126
18,153
Germany
Thereof allotted to:
9,410
9,091
thereof liabilities
(198)
1,625
Vermögensverwaltungsgesellschaft mbH,
100.0
ACP Vermögensverwaltung GmbH & Co. KG Nr.
4, Munich
Windpark Redekin-Genthin GmbH & Co. KG,
Sehestedt
100.0
Euler Hermes Aktiengesellschaft, Hamburg
100.0
Donator Beteiligungsverwaltung GmbH, Munich
100.0
490 Fulton REIT LP, Wilmington, DE
100.0
Windpark Quitzow GmbH & Co. KG, Sehestedt
100.0
Donator Beratungs GmbH, Munich
96.5
490 Fulton JV LP, Wilmington, DE
100.0
Windpark Pröttlin GmbH & Co. KG, Sehestedt
100.0
Aktiengesellschaft, Berlin
100.0
35° East SAS, Paris la Défense
100.0
Windpark Kittlitz GmbH & Co. KG, Sehestedt
Deutsche Lebensversicherungs-
Consolidated affiliates
94.8
100.0
Windpark Kirf GmbH & Co. KG, Sehestedt
BrahmsQ Objekt GmbH & Co. KG, Stuttgart
490 Lower Unit GP LLC, Wilmington, DE
FOREIGN ENTITIES
100.0
490 Lower Unit LP, Wilmington, DE
inSphere GmbH, Munich
100.0
AGA Sigorta Aracilik Hizmetleri LS, Istanbul
Non-consolidated affiliates
100.0
100.0
AGA Service Company Corp., Richmond, VA
IDS GmbH - Analysis and Reporting Services,
Munich
100.0
AGA Insurance Broker (Thailand) Co. Ltd.,
Bangkok
100.0
Windpark Werder Zinndorf GmbH & Co. KG,
Sehestedt
100.0
GA Global Automotive Versicherungsservice
GmbH, Halle (Saale)
100.0
Aero-Fonte S.r.l., Catania
100.0
Windpark Waltersdorf GmbH & Co. KG
Renditefonds, Sehestedt
95.0
100.0 3
Advanz Fundo de Investimento Renda Fixa
Crédito Privado, São Paulo
Euler Hermes Rating Deutschland GmbH,
Hamburg
100.0
Windpark Schönwalde GmbH & Co. KG,
Sehestedt
100.0
Euler Hermes Collections GmbH, Potsdam
100.0
100.0
100.0
Munich
100.0
Annual Report 2018 - Allianz Group
154
100.0
100.0
Munich
Vermögensverwaltungsgesellschaft mbH,
100.0 3
Allianz VW AV Fonds, Frankfurt am Main
Allianz Warranty GmbH, Unterföhring
100.0
Allianz Leben Private Equity Fonds 1998 GmbH,
Munich
AZV-Argos 72
100.0
Allianz Leben Infrastrukturfonds GmbH, Munich
100.03
Allianz VSR Fonds, Frankfurt am Main
100.0
AZT Automotive GmbH, Ismaning
100.0
Munich
100.0 3
Allianz V-PD Fonds, Frankfurt am Main
Allianz Leben Direkt Infrastruktur GmbH,
100.0
100.0
AZ-SGD Private Equity Fonds 2 GmbH, Munich
AZ-SGD Private Equity Fonds GmbH, Munich
100.03
AZ Real Estate GP LLC, New York, NY
D_Consolidated Financial Statements
%
%
%
Windpark Kesfeld-Heckhuscheid GmbH & Co.
KG, Sehestedt
Vermögensverwaltungsgesellschaft mbH,
AZV-Argos 87
100.0
50.08
Neumagen-Dhron
Windpark Freyenstein-Halenbeck GmbH & Co.
KG, Sehestedt
100.0
Munich
Vermögensverwaltungsgesellschaft mbH,
Windkraft Kirf Infrastruktur GmbH,
100.0
Sehestedt
100.0
AZV-Argos 82
Verimi GmbH, Frankfurt am Main
Windpark Emmendorf GmbH & Co. KG,
100.0
Munich
25.4
Umspannwerk Putlitz GmbH & Co. KG,
Oldenburg
100.0
Windpark Eckolstädt GmbH & Co. KG,
Sehestedt
Vermögensverwaltungsgesellschaft mbH,
AZV-Argos 77
owned¹
owned¹
owned¹
14.88
Kaiser X Labs GmbH, Munich
100.0
KomfortDynamik Sondervermögen, Frankfurt
am Main
42.5 23
Allianz Actions Euro, Paris
64.73
Allianz Actions Euro Convictions, Paris
50.0
95.63
Allianz Actions Emergentes, Paris
39.97
AQ Überseehaus GmbH & Co. KG, Hamburg
AQ Überseehaus Verwaltungs GmbH, Hamburg
Dealis Fund Operations GmbH, Frankfurt am
Main
100.0
RehaCare GmbH, Munich
60.0
Objektverwaltungsgesellschaft mbH, Hamburg
REC Frankfurt zweite
80.0
64.23
Allianz Actions Aéquitas, Paris
Joint ventures
REC Frankfurt Objekt GmbH & Co. KG,
Hamburg
77.73
Allianz Actio France, Paris
100.04
PIMCO Deutschland GmbH, Munich
100.0
Allianz (UK) Limited, Guildford
100.06
Mühlheim am Main
50.0
Allianz Actions France, Paris
55.03
risklab GmbH, Munich
Stuttgart
100.0
Allianz Alapkezelő Zrt., Budapest
30.07
SPN Service Partner Netzwerk GmbH, Munich
Spherion Beteiligungs GmbH & Co. KG,
100.0 3
Allianz Air France IFC, Paris
94.9
50.0
PNE WIND Park III GmbH & Co. KG, Cuxhaven
Signa 12 Verwaltungs GmbH, Düsseldorf
100.0
100.0
100.0
50.0
100.0
Allianz Africa S.A., Paris la Défense
PNE WIND Infrastruktur Calau II GmbH,
Cuxhaven
100.0
Seine GmbH, Munich
100.0
Allianz Africa Financial Services S.à r.l.,
Casablanca
50.0³
Die Brückenköpfe X BKX GmbH & Co. Invest
KG, Berlin
75.6
Roland Holding GmbH, Munich
100.0
Seine II GmbH, Munich
Allianz VKRD Fonds, Frankfurt am Main
My Finance Coach Stiftung GmbH, Munich
100.0
100.0
Co. KG, Munich
100.0
AGF Holdings (UK) Limited, Guildford
100.0
100.0 3
AGF FCR, Paris
Allianz zweite Objektbeteiligungs-GmbH,
Stuttgart
Lola Vermögensverwaltungsgesellschaft mbH &
100.0
Vertriebsmanagement GmbH, Halle (Saale)
100.0
AGF Benelux S.à r.l., Luxembourg
100.0
Allianz Pension Consult GmbH, Stuttgart
KVM ServicePlus - Kunden- und
100.0
100.0
AGCS Marine Insurance Company, Chicago, IL
AGCS Resseguros Brasil S.A., São Paulo
100.0
Allianz Objektbeteiligungs-GmbH, Stuttgart
69.83
100.0
100.0
AGCS International Holding B.V., Amsterdam
55.3
AERS Consortio Aktiengesellschaft, Stuttgart
Allianz Global Benefits GmbH, Stuttgart
AZ Beteiligungs-Management GmbH, Munich
100.0
AGF Inversiones S.A., Buenos Aires
100.0
AIM Underwriting Limited, Toronto, ON
100.0
Münchener & Magdeburger Agrar AG, Munich
100.0
AIM Singapore Pte Ltd., Singapore
100.0 5,6
manroland AG, Offenbach am Main
100.0
Mondial Kundenservice GmbH, Nuremberg
70.8
Infrastruktur Putlitz Ost GmbH & Co. KG, Husum
100.0 3
AIM Equity US, Paris
manroland Vertrieb und Service GmbH,
100.0
100.0
Versicherungen mbH, Munich
100.0 ³
AIM Equity PG Vie, Paris
100.0
Grundstücksgesellschaft der Vereinten
100.0 3
AIM Equity Europe Cantons, Paris
META Finanz-Informationssysteme GmbH,
Munich
94.0
AZ Northside GmbH & Co. KG, Stuttgart
100.0
MAWISTA GmbH, Wendlingen am Neckar
MileBox UG (haftungsbeschränkt), Munich
Allianz Amerika Aandelen Fonds, Rotterdam
100.0 3
100.0 3
100.0 3
Allianz APAV Fonds, Frankfurt am Main
100.0
GmbH, Munich
100.0 3
Allianz ALD Fonds, Frankfurt am Main
100.0
AREF III GER GmbH & Co. KG, Frankfurt am
Main
Allianz Private Equity Partners Verwaltungs
100.0 3
Allianz AKR Fonds, Frankfurt am Main
100.0
Allianz Private Equity GmbH, Munich
100.0
AREF III GER 2 GmbH, Frankfurt am Main
100.0 3
Allianz AADB Fonds, Frankfurt am Main
100.0
AREF III GER 1 GmbH, Frankfurt am Main
100.0
Allianz PKV-PD Fonds, Frankfurt am Main
94.8
100.0
Allianz PK-PD Fonds, Frankfurt am Main
Alida Grundstücksgesellschaft mbH & Co. KG,
Hamburg
100.0
ARE Funds AZV GmbH, Munich
Allianz Private Krankenversicherungs-
100.0
atpacvc Fund GmbH & Co. KG, Munich
Aktiengesellschaft, Munich
Allianz Capital Partners GmbH, Munich
100.0
100.0
Auros II GmbH, Munich
100.0³
Allianz PV-RD Fonds, Frankfurt am Main
Allianz Beratungs- und Vertriebs-AG, Munich
100.0
mbH, Munich
100.0³
Allianz PV WS Fonds, Frankfurt am Main
100.0
Allianz AZL Vermögensverwaltung GmbH & Co.
KG, Munich
Atropos Vermögensverwaltungsgesellschaft
100.0 ³
Allianz PV 1 Fonds, Frankfurt am Main
100.0
Allianz Asset Management GmbH, Munich
100.0
atpacvc GP GmbH, Munich
100.0
Allianz ProzessFinanz GmbH, Munich
100.0
Allianz Argos 14 GmbH, Munich
100.0
atpacvc GmbH, Munich
100.0
100.0
100.0
ARE Funds AZL GmbH, Munich
Allianz Pensionskasse Aktiengesellschaft,
Stuttgart
APKV Private Equity Fonds GmbH, Munich
100.0
Allianz OrtungsServices GmbH, Munich
ACP Vermögensverwaltung GmbH & Co. KG Nr.
4d, Munich
100.0
APKV Infrastrukturfonds GmbH, Munich
100.0
Allianz of Asia-Pacific and Africa GmbH, Munich
100.0
100.0
APKV Direkt Infrastruktur GmbH, Munich
100.0 3
Allianz L-PD Fonds, Frankfurt am Main
ACP Vermögensverwaltung GmbH & Co. KG Nr.
4c, Munich
100.0
Munich
100.0 ³
Allianz LFE Fonds, Frankfurt am Main
100.0
Vermögensverwaltungsgesellschaft mbH,
ACP Vermögensverwaltung GmbH & Co. KG Nr.
4a, Munich
100.0
APK-Argos 85
Allianz Lebensversicherungs-Aktiengesellschaft,
Stuttgart
100.0
100.0
Munich
100.0
100.0
ADEUS Aktienregister-Service-GmbH, Munich
79.6
100.0
Munich
Vermögensverwaltungsgesellschaft mbH,
100.0
ARE Funds APKV GmbH, Munich
AGCS-Argos 86
100.0
Stuttgart
100.0
Munich
Allianz Pensionsfonds Aktiengesellschaft,
100.0
Munich
100.04
Vermögensverwaltungsgesellschaft mbH,
100.0
APKV-Argos 84
Allianz Pension Service GmbH, Munich
100.0
100.0
Allianz Pension Partners GmbH, Munich
Munich
100.0
AGCS Infrastrukturfonds GmbH, Munich
AGCS-Argos 76
Vermögensverwaltungsgesellschaft mbH,
100.0
APKV-Argos 74
Allianz Pension Direkt Infrastruktur GmbH,
Munich
Vermögensverwaltungsgesellschaft mbH,
Allianz Re Asia, Frankfurt am Main
100.0³
AV28 GmbH, Munich
Allianz UGD 1 Fonds, Frankfurt am Main
100.0 3
Allianz GLR Fonds, Frankfurt am Main
100.0
100.0
Munich
Allianz Treuhand GmbH, Stuttgart
100.0
Frankfurt am Main
Vermögensverwaltungsgesellschaft mbH,
100.0
Allianz Technology SE, Munich
Allianz Global Investors GmbH,
AZL-Argos 83
99.5
Allianz Taunusanlage GbR, Stuttgart
100.0
Allianz Global Health GmbH, Munich
100.0
Munich
Vermögensverwaltungsgesellschaft mbH,
100.0
Allianz Stromversorgungs-GmbH, Munich
100.0
AZL-Argos 73
100.0
Allianz SOA Fonds, Frankfurt am Main
100.0 3
AZRE AZD P&C Master Fund, Munich
100.0 3
Allianz GLRS Fonds, Frankfurt am Main
Allianz VKA Fonds, Frankfurt am Main
100.04
Allianz Investment Management SE, Munich
100.0
AZ-SGD Infrastrukturfonds GmbH, Munich
100.03
100.0
AZ-SGD Direkt Infrastruktur GmbH, Munich
100.0
Allianz VGI 1 Fonds, Frankfurt am Main
Allianz VGL Fonds, Frankfurt am Main
100.0
Allianz Hirschgarten GmbH & Co. KG, Stuttgart
100.0
Allianz Global Corporate & Specialty SE,
Munich
Allianz Handwerker Services GmbH, Aschheim
AZ-SGD Classic Infrastrukturfonds GmbH,
Munich
100.0
Munich
100.0 3
Allianz GRGB Fonds, Frankfurt am Main
Allianz Versicherungs-Aktiengesellschaft,
100.0
AZS-Arges Vermögensverwaltungsgesellschaft
mbH, Munich
100.0 3
Allianz GLU Fonds, Frankfurt am Main
100.03
Allianz VAE Fonds, Frankfurt am Main
100.0 ³
100.0
Allianz LAD Fonds, Frankfurt am Main
100.0
100.0
Allianz EEE Fonds, Frankfurt am Main
100.0
Munich
100.0
Vermögensverwaltungsgesellschaft mbH,
Allianz Renewable Energy Management GmbH,
Sehestedt
100.0 3
Allianz DLVR Fonds, Frankfurt am Main
100.0
Allianz Deutschland AG, Munich
AZ-Argos 41
100.0
Allianz Rechtsschutz-Service GmbH, Munich
100.0
Allianz Climate Solutions GmbH, Munich
100.0
mbH, Munich
AZ-Arges Vermögensverwaltungsgesellschaft
100.0
Allianz Real Estate GmbH, Munich
100.0
100.0
100.0
AWP Service Deutschland GmbH, Aschheim
Allianz Real Estate Germany GmbH, Stuttgart
Allianz Capital Partners Verwaltungs GmbH,
Munich
100.0
100.0 3
Allianz Renewable Energy Subholding GmbH &
Co. KG, Sehestedt
AZ-Argos 56
100.0
Allianz Service Center GmbH, Munich
100.0
Allianz Finanzbeteiligungs GmbH, Munich
100.0
AZL AI Nr. 1 GmbH, Munich
100.0
Allianz SE-PD Fonds, Frankfurt am Main
100.0 3
Allianz FAD Fonds, Frankfurt am Main
100.0
KG, Munich
51.0
100.0
AZL PE Nr. 1 GmbH, Munich
Allianz SDR Fonds, Frankfurt am Main
Vermögensverwaltungsgesellschaft mbH & Co.
AZ-Argos 71
100.0
Allianz Risk Consulting GmbH, Munich
100.0
Allianz Esa cargo & logistics GmbH, Bad
Friedrichshall
100.0
Allianz RFG Fonds, Frankfurt am Main
100.0
Munich
100.0
Allianz EP GmbH, Munich
Vermögensverwaltungsgesellschaft mbH,
Allianz Esa EuroShip GmbH, Bad Friedrichshall
100.0
Beleggingsmaatschappij Willemsbruggen B.V.,
100.0
55.0
Assurances Médicales SA, Metz
100.0
Allianz UK Infrastructure Debt GP 2 Limited,
AZL PF Investments Inc., Minneapolis, MN
100.0
London
100.0
atpacvc LLC, Wilmington, DE
100.0
AZOA Services Corporation, New York, NY
100.0
Allianz UK Infrastructure Debt GP Limited,
atpacvc Ltd., London
100.0
AZWP Services Portugal Lda., Lisbon
100.0
London
100.0
Avip Actions 60, Paris
98.53
100.0
Avip Top Croissance, Paris
99.33
Rotterdam
100.0
158
Annual Report 2018 - Allianz Group
Allianz Technology S.p.A., Rome
AZGA Service Canada Inc., Kitchener, ON
100.03
Allianz Ukraine LLC, Kiev
100.0
Arges Investments I N.V., Amsterdam
Allianz UK Credit Fund, Paris
100.0
Allianz Technology SAS, Paris
100.0
AZ Servisni centar d.o.o., Zagreb
Arges Investments II N.V., Amsterdam
100.0
Allianz Tiriac Asigurari SA, Bucharest
52.2
AZ Vers US Private REIT GP LLC,
Asit Services S.R.L., Bucharest
100.0
Wilmington, DE
100.0
100.0
administrare a fondurilor de pensii private S.A.,
Allianz Tiriac Pensii Private Societate de
AZGA Insurance Agency Canada Ltd.,
Kitchener, ON
Associated Indemnity Corporation,
Los Angeles, CA
Allianz Togo Assurances SA, Lomé
100.0
Bucharest
97.9
100.0
Réassurance S.A., Courbevoie
100.0
AZ Vers US Private REIT LP, Wilmington, DE
Assistance Courtage d'Assurance et de
100.0
Euler Hermes Consulting (Shanghai) Co. Ltd.,
Calypso S.A., Paris la Défense
100.0
Euler Hermes Collections Sp. z o.o., Warsaw
100.0
100.0
Euler Hermes Taiwan Services Limited, Taipei
Calobra Investments Sp. z o.o., Warsaw
100.0
100.0
Euler Hermes Collections North America
100.0
Euler Hermes South Express S.A., Brussels
100.0
BSMC (Thailand) Limited, Bangkok
100.0
Singapore
100.0
Brobacken Nät AB, Stockholm
Euler Hermes World Agency SASU, Paris la
Défense
100.0
QC
Company, Owings Mills, MD
100.0
Central Shopping Center a.s., Bratislava
AG, Wallisellen
100.0
Euler Hermes Singapore Services Pte. Ltd.,
aude SAS, Paris
100.03
FCP LBPAM IDR, Paris
Centrale Photovoltaique de Saint Marcel sur
100.0
Eurosol Invest S.r.L., Udine
100.0³
Euler Hermes Digital Ventures OPCVM, Paris la
Défense
100.0
100.0
Eurl 20/22 Le Peletier, Paris la Défense
100.0
Défense
93.2
Caroline Berlin S.C.S., Luxembourg
100.0
Euler Hermes, Mierzejewska-Kancelaria Prawna
Sp.k, Warsaw
Euler Hermes Crédit France S.A.S., Paris la
100.0
100.0
Shanghai
CAP Rechtsschutz-Versicherungsgesellschaft
Euler Hermes Canada Services Inc., Montreal,
100.0
British Reserve Insurance Co. Ltd., Guildford
Johannesburg
Euler Hermes Emporiki Services Ltd., Athens
BPS Mesagne 223 S.r.l., Lecce
Euler Hermes Services South Africa Ltd.,
100.03
Euler Hermes 39 Ouest, Paris la Défense
100.0
BPS Mesagne 216 S.r.l., Lecce
100.0
Bratislava
100.0
Etablissements J. Moneger SA, Dakar
100.0
Euler Hermes Services Slovensko s.r.o.,
BPS Mesagne 215 S.r.l., Lecce
100.0
EP Tactical GP LLC, Wilmington, DE
100.0
100.0
Euler Hermes Services Schweiz AG, Wallisellen
BPS Mesagne 214 S.r.l., Lecce
100.0
Eolica Erchie S.r.l., Lecce
100.0
Euler Hermes Acmar SA, Casablanca
55.0
BPS Mesagne 224 S.r.l., Lecce
100.0
Euler Hermes Sigorta A.S., Istanbul
100.0
Euler Hermes Australia Pty Limited, Sydney
100.0
BRAVO III CIV LLC, Wilmington, DE
100.0
Euler Hermes Serviços de Gestão de Riscos
Ltda., São Paulo
100.0
Paris la Défense
100.0
100.0
BRAVO II CIV LLC, Wilmington, DE
100.0
Paulo
100.0
Euler Hermes Services UK Limited, London
100.0
Casablanca
Brasil de Imóveis e Participações Ltda., São
Euler Hermes Acmar Services SARL,
100.0
Euler Hermes Services Tunisia S.à r.L., Tunis
100.0
Euler Hermes Asset Management France S.A.,
100.0
CEPE de Langres Sud S.à r.l., Versailles
100.03
Euler Hermes North America Insurance
CIC Allianz Insurance Ltd., Sydney
100.0
Flying Desire Limited, Hong Kong
100.0
Owings Mills, MD
100.0
Chicago Insurance Company Corp., Chicago, IL
100.0
Angeles, CA
Euler Hermes North America Holding Inc.,
100.0
CEPE du Bois de la Serre S.à r.l., Versailles
Fireman's Fund Insurance Company Corp., Los
100.0
Euler Hermes New Zealand Limited, Auckland
100.0
CEPE du Blaiseron S.à r.L., Versailles
100.0
Fireman's Fund Indemnity Corporation, Liberty
Corner, NJ
100.0
Budapest
100.0
Fondo Chiuso Allianz Infrastructure Partners I,
100.0
Company Inc., Owings Mills, MD
100.0
Friederike MLP S.à r.l., Luxembourg
64.8
60.0
Défense
Companhia de Seguros Allianz Portugal S.A.,
Lisbon
94.5
Franklin S.C.S., Luxembourg
Euler Hermes Real Estate SPPICAV, Paris la
100.0
COF II CIV LLC, Wilmington, DE
100.0
Versailles
Fragonard Assurance S.A., Paris
Euler Hermes Ré SA, Luxembourg
100.0
Club Marine Limited, Sydney
100.0 3
FPCI APEH Europe VII, Paris
100.0
Euler Hermes Patrimonia SA, Brussels
100.0
Climmolux Holding SA, Luxembourg
100.0 3
Milan
100.0
FCPI InnovAllianz 2, Paris
Euler Hermes Magyar Követeleskezelő Kft.,
100.0
100.0
Reaseguros S.A., Madrid
100.0
CEPE de la Baume S.à r.l., Versailles
100.0
Kong
Fénix Directo Compañía de Seguros y
Euler Hermes Hong Kong Service Limited, Hong
100.0
CEPE de Haut Chemin S.à r.l., Versailles
100.0 3
FCT Rocade L2 Marseille, Paris
100.0
Euler Hermes Group SA, Paris la Défense
100.0
CEPE de Bajouve S.à r.l., Versailles
100.03
FCT CIMU 92, Pantin
100.0
Owings Mills, MD
100.0
Euler Hermes Excess North America LLC,
Centrale Photovoltaique de Valensole SAS,
Paris
Euler Hermes Intermediary Agency S.r.l., Milan
100.0
CEPE de la Forterre S.à r.l., Versailles
100.0
TX
100.0
Luxembourg
100.0
CEPE de Vieille Carrière S.à r.l., Versailles
Fireman's Fund Financial Services LLC, Dallas,
Euler Hermes Luxembourg Holding S.à r.l.,
100.0
CEPE de Sambres S.à r.l., Versailles
100.0
Financière Callisto SAS, Paris la Défense
CEPE des Portes de la Côte d'Or S.à r.L.,
100.0
100.0
CEPE de Mont Gimont S.à r.L., Versailles
Euler Hermes Korea Non-life Broker Company
100.0
Ferme Eolienne des Jaladeaux S.à r.l., Versailles
100.0
Euler Hermes Japan Services Ltd., Tokyo
100.0
100.0
100.0
Ferme Eolienne de Villemur-sur-Tarn S.à r.l.,
Versailles
Limited, Seoul
BPS Brindisi 222 S.r.l., Lecce
100.0
Euler Hermes Services S.A.S., Paris la Défense
Hereinafter we present the key audit matters:
Reference to further information.
Audit approach and findings,
Matter and issue,
Our presentation of these key audit matters has been structured in
each case as follows:
Measurement of certain technical provisions in property-casualty
insurance.
Measurement of certain technical assets and liabilities in life and
health insurance,
Measurement of certain financial instruments (Level 3) at fair
value,
In our view, the matters of most significance in our audit were as
follows:
Key audit matters are those matters that, in our professional judgement,
were of most significance in our audit of the consolidated financial
statements for the financial year from 1 January to
31 December 2018. These matters were addressed in the context of
our audit of the consolidated financial statements as a whole, and in
forming our audit opinion thereon; we do not provide a separate
audit opinion on these matters.
KEY AUDIT MATTERS IN THE AUDIT OF THE
CONSOLIDATED FINANCIAL STATEMENTS
We conducted our audit of the consolidated financial statements and
of the group management report in accordance with §317 HGB and
the EU Audit Regulation (No. 537/2014, referred to subsequently as
"EU Audit Regulation") in compliance with German Generally Accepted
Standards for Financial Statement Audits promulgated by the Institut
der Wirtschaftsprüfer [Institute of Public Auditors in Germany] (IDW).
Our responsibilities under those requirements and principles are
further described in the "Auditor's Responsibilities for the Audit of the
Consolidated Financial Statements and of the Group Management
Report" section of our auditor's report. We are independent of the
group entities in accordance with the requirements of European law
and German commercial and professional law, and we have fulfilled
our other German professional responsibilities in accordance with
these requirements. In addition, in accordance with Article 10(2)
point (f) of the EU Audit Regulation, we declare that we have not
provided non-audit services prohibited under Article 5(1) of the EU
Audit Regulation. We believe that the audit evidence we have obtained
is sufficient and appropriate to provide a basis for our audit opinions
on the consolidated financial statements and on the group man-
agement report.
BASIS FOR THE AUDIT OPINIONS
Pursuant to § 322 Abs. 3 Satz (sentence) 1 HGB, we declare that our
audit has not led to any reservations relating to the legal compliance
of the consolidated financial statements and of the group manage-
ment report.
the accompanying group management report as a whole pro-
vides an appropriate view of the Group's position. In all material
respects, this group management report is consistent with the
consolidated financial statements, complies with German legal
requirements and appropriately presents the opportunities and
risks of future development. Our audit opinion on the group
management report does not cover the content of those parts of
the group management report listed in the "Other Information"
section of our auditor's report.
the accompanying consolidated financial statements comply, in
all material respects, with the IFRSS as adopted by the EU, and
the additional requirements of German commercial law pursuant
to § (Article) 315e Abs. (paragraph) 1 HGB (Handelsgesetzbuch:
German Commercial Code) and, in compliance with these re-
quirements, give a true and fair view of the assets, liabilities, and
financial position of the Group as at 31 December 2018, and of its
financial performance for the financial year from 1 January to
31 December 2018, and
In our opinion, on the basis of the knowledge obtained in the
audit,
31 December 2018. In accordance with the German legal require-
ments, we have not audited the content of those parts of the group
management report listed in the "Other Information" section of our
auditor's report.
to
We have audited the consolidated financial statements of Allianz SE,
Munich, and its subsidiaries (the Group), which comprise the
consolidated balance sheet as at 31 December 2018, and the
consolidated income statement, consolidated statement of
comprehensive income, consolidated statement of changes in equity
and consolidated statement of cash flows for the financial year from
1 January to 31 December 2018, and notes to the consolidated
financial statements, including a summary of significant accounting
policies. In addition, we have audited the group management report
of Allianz SE, for the financial year from 1 January
AUDIT OPINIONS
Report on the audit of the consolidated financial
statements and of the group management
report
To Allianz SE, Munich
Annual Report 2018 - Allianz Group
E_Further Information
165
MEASUREMENT OF CERTAIN FINANCIAL
INSTRUMENTS (LEVEL 3) AT FAIR VALUE
E_Further Information
Annual Report 2018 - Allianz Group
166
The Company's disclosures on the measurement of certain technical
assets and liabilities in life and health insurance are included in
sections 2 and 15 of the notes to the consolidated financial statements.
Reference to further information
Based on our audit procedures, we were able to satisfy ourselves
that the methods and assumptions used by the executive directors
are appropriate overall for measuring certain technical life and
health insurance assets and liabilities.
With the support of our internal life and health insurance valuation
specialists, we have compared the respective actuarial methods
applied and the material assumptions with generally recognized
actuarial practices and industry standards and examined to what
extent these are appropriate for the valuation. A focal point of our
audit was the assessment of the liability adequacy test and the
evaluation of the expected gross margins/profits, which are used,
among other things, as the basis for amortizing the deferred acquisi-
tion costs. Our audit also included an evaluation of the plausibility
and integrity of the data and assumptions used in the valuation and
of the Group's Actuarial department's reporting to the Group Reserve
Committee.
As part of our audit, we assessed the appropriateness of selected
controls established by the Company for the purpose of selecting
actuarial methods, determining assumptions and making estimates
for the measurement of certain technical assets and liabilities in life
and health insurance.
Audit approach and findings
Due to the material significance of the amounts for the assets,
liabilities and financial performance of the Group and the complex
process for determining the underlying assumptions of the executive
directors, the measurement of these technical assets and liabilities of
the Life and Health Insurance business segment was of particular
significance in the context of our audit.
These assets and liabilities are measured using complex actuarial
methods and models based on a comprehensive process for arriving
at assumptions about future developments relating to the insurance
portfolios to be measured. The methods used and the actuarial
assumptions determined in connection with interest rates, investment
yields, mortality, invalidity, longevity, costs and future behavior of
policyholders could materially affect the measurement of these
technical assets and liabilities.
In the consolidated financial statements of the Company, assets and
liabilities of the Life and Health Insurance business segment amounting
to € 22,912 mn or € 515,537 million (2.6% or 57.4% of consolidated
total assets) are reported under the "Deferred acquisition costs" and
"Reserves for insurance and investment contracts" balance sheet
items, respectively.
Matter and issue
MEASUREMENT OF CERTAIN TECHNICAL ASSETS AND
LIABILITIES IN LIFE AND HEALTH INSURANCE
The Company's disclosures on the fair value measurement of certain
financial instruments (Level 3) are included in sections 2 and 34 of the
notes to the consolidated financial statements.
Reference to further information
Based on our audit procedures, we were able to satisfy ourselves
that the methods and assumptions used by the executive directors
are appropriate overall for measuring certain financial instruments
(fair value hierarchy Level 3).
With the support of our internal financial mathematics specialists,
we also assessed the appropriateness of the methods used by the
executive directors to test the assets for impairment and the inputs
used for that purpose. We have compared the methods and assump-
tions used to calculate valuation adjustments in the financial year
with recognized practices and industry standards and examined to
what extent these are suitable for determining an appropriate fair
value in accordance with IFRS 13.
As part of our audit, we analyzed in particular the financial instruments
measured using models, with the focus on instruments which were
subject to increased measurement uncertainties (Level 3). We assessed
the appropriateness of the relevant controls for the measurement of
the financial instruments and the model validation. Therewith, we
evaluated, among other things, the integrity of the underlying data
and the process for arriving at the assumptions and estimates used in
the valuation.
Audit approach and findings
In this context, financial instruments measured using models are
subject to an increased valuation risk due to lower objectivity and the
underlying judgments, estimates and assumptions of the executive
directors. This applies in particular to complex financial instruments.
Since the estimates and assumptions, in particular with regard to
interest rates and cash flows, as well as the valuation methods ap-
plied could materially affect the measurement of these financial
instruments and the assets, liabilities and financial performance of
the Group, this matter was of particular significance in the context of
our audit.
In the consolidated financial statements of the Company fair value
measured financial instruments amounting to € 51,180 mn (5.7% of
consolidated total assets) are reported that are classified as Level 3
of the fair value hierarchy according to the requirements of IFRS 13.
Of this amount, € 40,107 mn is attributable to financial assets and
€ 11,073 mn to financial liabilities. These financial instruments are
assigned to Level 3 of the fair value hierarchy as for the measurement
in the underlying valuation models sufficient observable market data
was not available and therefore unobservable inputs had to be used
instead. These inputs may include data derived from approximations
using, inter alia, historical data.
Matter and issue
E_Further Information
INDEPENDENT AUDITOR'S REPORT
Annual Report 2018 - Allianz Group
164
FURTHER INFORMATION
Annual Report 2018 - Allianz Group
162
The Allianz Group refrains from disclosure of participations which are
not included in one of the above categories, as they are of minor
importance for giving a true and fair view of the assets, liabilities,
financial position, and profit or loss of the Allianz Group.
25.0
45.0
Helios Silesia Holding B.V., Amsterdam
IndInfravit Trust, Chennai
50.0
16.48
Glory Basic Limited, Hong Kong
50.0
Top Torony Ingatlanhasznosító Zrt., Budapest
Triskelion Property Holding Designated Activity
Company, Dublin
16.48
Global Stream Limited, Hong Kong
50.0
8 Classified as associate according to IAS 28.
49.0
7_Classified as joint venture according to IFRS 11.
6_Insolvent.
5_Group share through indirect holder Roland Holding GmbH,
Munich: 75.6%.
Allianz Group's consolidated financial statements.
4_Releasing impact according to § 264 (3) HGB through the
Four Oaks Place LP, Wilmington, DE
E
Annual Report 2018 - Allianz Group
163
E_Further Information
Dr. Axel Theis
had The
o Terzariol
Zazonial
Jiko
Niran Peiris
Dr. Helga Jung
N. piłły
Sergio Balbinot
Dr. Günther Thallinger
Justy
MEASUREMENT OF CERTAIN TECHNICAL PROVISIONS
IN PROPERTY-CASUALTY INSURANCE
Iván de la Sota
Dr. Christof Mascher
Unschen
Jacqueline Hunt
the
Oliver Bäte
Qaries Béla Sergio Ballist
The Board of Management
Allianz SE
Munich, 12 February 2019
To the best of our knowledge, and in accordance with the applicable
reporting principles, the consolidated financial statements give a true
and fair view of the assets, liabilities, financial position and profit or
loss of the group, and the group management report includes a fair
review of the development and performance of the business and the
position of the group, together with a description of the material
opportunities and risks associated with the expected development of
the group.
RESPONSIBILITY STATEMENT
Jak
Matter and issue
In the consolidated financial statements of the Company, technical
provisions (so called "claims provisions") amounting to € 73,054 mn
(8.1% of consolidated total assets) are reported under the Reserves
for loss and loss adjustment expenses balance sheet item. Of this
amount, € 61,442 mn is attributable to the Property-Casualty Insur-
ance business segment.
Reserves for loss and loss adjustment expenses in property-
casualty insurance represent the Company's expectations regarding
future payments for known and unknown claims including associated
expenses. The Company uses various methods to estimate these
obligations. Furthermore, the measurement of these provisions requires
a significant degree of judgment by the executive directors of the
Company with regard to the assumptions made, such as inflation, loss
developments and regulatory changes. In particular, the lines of
products with low loss frequency, high individual losses or long claims
settlement periods are usually subject to increased estimation
uncertainties.
66.0
Bilan Services S.N.C., Nanterre
100.0
Diamond Point a.s., Prague
100.0
Euler Hermes Services India Private Limited,
Mumbai
100.0
Sanayi ve Ticaret A.S., Ankara
100.0
Delta Technical Services Ltd., London
Beykoz Gayrimenkul Yatirim Insaat Turizm
%
owned¹
owned¹
owned¹
%
%
D_Consolidated Financial Statements
PIMCO-World Bank Gemloc Fund S.A.,
SCI ESQ, Paris la Défense
75.0
Vigny Depierre Conseils SAS, Archamps
100.0
Luxembourg
Dresdner Kleinwort Pfandbriefe Investments II
Biuro Informacji Gospodarczej Euler Hermes
S.A., Warsaw
Inc., Minneapolis, MN
100.0
100.0
Energie Eolienne Lusanger S.à r.l., Versailles
100.0
BPS Brindisi 213 S.r.l., Lecce
100.0
Bucharest
100.0
ELVIA elnvest AG, Wallisellen
Euler Hermes Services Romania S.R.L.,
100.0
BPS Brindisi 211 S.r.l., Lecce
100.03
100.0
100.0 3
Eiger Institutional Fund, Basel
100.0
Borgo San Felice S.r.l., Castelnuovo Berardenga
Euler Hermes Services North America LLC,
100.0
EF Solutions LLC, Wilmington, DE
100.0
100.0
100.0
Euler Hermes Services Ireland Limited, Dublin
Euler Hermes Services Italia S.r.l., Rome
Owings Mills, MD
100.0
SCI Stratus, Courbevoie
Viveole SAS, Versailles
E_Further Information
167
Annual Report 2018 - Allianz Group
In preparing the consolidated financial statements, the executive
directors are responsible for assessing the Group's ability to continue
as a going concern. They also have the responsibility for disclosing, as
applicable, matters related to going concern. In addition, they are
responsible for financial reporting based on the going concern basis
of accounting unless there is an intention to liquidate the Group or to
cease operations, or there is no realistic alternative but to do so.
The executive directors are responsible for the preparation of the
consolidated financial statements that comply, in all material respects,
with IFRSS as adopted by the EU and the additional requirements of
German commercial law pursuant to §315e Abs. 1 HGB and that the
consolidated financial statements, in compliance with these
requirements, give a true and fair view of the assets, liabilities, financial
position, and financial performance of the Group. In addition the
executive directors are responsible for such internal control as they
have determined necessary to enable the preparation of consolidated
financial statements that are free from material misstatement,
whether due to fraud or error.
GROUP MANAGEMENT REPORT
RESPONSIBILITIES OF THE EXECUTIVE DIRECTORS
AND THE SUPERVISORY BOARD FOR THE
CONSOLIDATED FINANCIAL STATEMENTS AND THE
otherwise appears to be materially misstated.
is materially inconsistent with the consolidated financial
statements, with the group management report or our knowledge
obtained in the audit, or
In connection with our audit, our responsibility is to read the other
information and, in so doing, to consider whether the other information
Our audit opinions on the consolidated financial statements and
on the group management report do not cover the other information,
and consequently we do not express an audit opinion or any other
form of assurance conclusion thereon.
The other information comprises further the remaining parts of the
group annual report - excluding cross-references to external
information - with the exception of the audited consolidated financial
statements, the audited group management report and our auditor's
report.
the separate non-financial report pursuant to §289b Abs. 3 HGB
und §315b Abs. 3 HGB
the statement on corporate governance pursuant to § 289f HGB
and §315d HGB included in section "Other Parts of the Group
Management Report" of the group management report
The executive directors are responsible for the other information. The
other information comprises the following non-audited parts of the
group management report:
OTHER INFORMATION
The Company's disclosures on the measurement of the provisions for
claims outstanding in property-casualty insurance are included in
section 2 of the notes to the consolidated financial statements.
Reference to further information
Based on our audit procedures, we were able to satisfy ourselves
that the estimates and assumptions made by the executive directors
are appropriate overall for measuring the technical provisions in
property-casualty insurance.
With the support of our property-casualty insurance valuation
specialists, we have compared the respective actuarial methods
applied and the material assumptions with generally recognized
actuarial practices and industry standards and examined to what
extent these are appropriate for the valuation. Our audit also includ-
ed an evaluation of the plausibility and integrity of the data and
assumptions used in the valuation and a reconstruction of the claims
settlement processes. Furthermore, we recalculated the amount of
the provisions for selected lines of products, in particular lines of
products with large reserves or increased estimation uncertainties.
For these lines of products we compared the recalculated provisions
with the provisions calculated by the Company and evaluated any
differences. We also examined whether any adjustments to estimates
in loss reserves at Group level were adequately documented and
substantiated. Our audit also included an evaluation of the Group's
Actuarial department's reporting to the Group Reserve Committee.
As part of our audit, we evaluated the appropriateness of selected
controls established by the Company for the purpose of selecting
actuarial methods, determining assumptions and making estimates
for the measurement of certain technical provisions in property-
casualty insurance.
Audit approach and findings
Due to the material significance of these provisions for the assets,
liabilities and financial performance of the Group as well as the
considerable scope for judgment on the part of the executive directors
and the associated uncertainties in the estimations made, the
measurement of the technical provisions in property-casualty
insurance was of particular significance to our audit.
Furthermore, the executive directors are responsible for the
preparation of the group management report that, as a whole, provides
an appropriate view of the Group's position and is, in all material
respects, consistent with the consolidated financial statements, complies
with German legal requirements, and appropriately presents the
opportunities and risks of future development. In addition, the executive
directors are responsible for such arrangements and measures
(systems) as they have considered necessary to enable the prepara-
tion of a group management report that is in accordance with the
applicable German legal requirements, and to be able to provide
sufficient appropriate evidence for the assertions in the group
management report.
The supervisory board is responsible for overseeing the Group's
financial reporting process for the preparation of the consolidated
financial statements and of the group management report.
AUDITOR'S RESPONSIBILITIES FOR THE AUDIT OF THE
CONSOLIDATED FINANCIAL STATEMENTS AND OF
THE GROUP MANAGEMENT REPORT
Our objectives are to obtain reasonable assurance about whether the
consolidated financial statements as a whole are free from material
misstatement, whether due to fraud or error, and whether the group
management report as a whole provides an appropriate view of the
Group's position and, in all material respects, is consistent with the
consolidated financial statements and the knowledge obtained in the
audit, complies with the German legal requirements and appropriately
presents the opportunities and risks of future development, as well as
to issue an auditor's report that includes our audit opinions on the
consolidated financial statements and on the group management
report.
100.0
POD Allianz Bulgaria AD, Sofia
65.9
SCI Via Pierre 1, Paris la Défense
100.0
Volta, Paris
100.0 3
Primacy Underwriting Management Limited,
SCI Volnay, Paris la Défense
100.0
Vordere Zollamtsstraße 13 GmbH, Vienna
100.0
100.0
Annual Report 2018 - Allianz Group
168
We also provide those charged with governance with a statement
that we have complied with the relevant independence requirements,
and communicate with them all relationships and other matters that
may reasonably be thought to bear on our independence, and where
applicable, the related safeguards.
We communicate with those charged with governance regarding,
among other matters, the planned scope and timing of the audit and
significant audit findings, including any significant deficiencies in
internal control that we identify during our audit.
Obtain sufficient appropriate audit evidence regarding the finan-
cial information of the entities or business activities within the
Group to express audit opinions on the consolidated financial
statements and on the group management report. We are re-
sponsible for the direction, supervision and performance of the
group audit. We remain solely responsible for our audit opinions.
Evaluate the consistency of the group management report with
the consolidated financial statements, its conformity with German
law, and the view of the Group's position it provides.
Perform audit procedures on the prospective information pre-
sented by the executive directors in the group management re-
port. On the basis of sufficient appropriate audit evidence we
evaluate, in particular, the significant assumptions used by the ex-
ecutive directors as a basis for the prospective information, and
evaluate the proper derivation of the prospective information
from these assumptions. We do not express a separate audit
opinion on the prospective information and on the assumptions
used as a basis. There is a substantial unavoidable risk that future
events will differ materially from the prospective information.
Evaluate the overall presentation, structure and content of the
consolidated financial statements, including the disclosures,
and whether the consolidated financial statements present the
underlying transactions and events in a manner that the consoli-
dated financial statements give a true and fair view of the assets,
liabilities, financial position and financial performance of the
Group in compliance with IFRSS as adopted by the EU and the
additional requirements of German commercial law pursuant to
§315e Abs. 1 HGB.
Evaluate the appropriateness of accounting policies used by the
executive directors and the reasonableness of estimates made by
the executive directors and related disclosures.
Conclude on the appropriateness of the executive directors' use
of the going concern basis of accounting and, based on the audit
evidence obtained, whether a material uncertainty exists related
to events or conditions that may cast significant doubt on the
Group's ability to continue as a going concern. If we conclude that
a material uncertainty exists, we are required to draw attention in
the auditor's report to the related disclosures in the consolidated
financial statements and in the group management report or, if
such disclosures are inadequate, to modify our respective audit
opinions. Our conclusions are based on the audit evidence
obtained up to the date of our auditor's report. However, future
events or conditions may cause the Group to cease to be able to
continue as a going concern.
Obtain an understanding of internal control relevant to the audit
of the consolidated financial statements and of arrangements
and measures (systems) relevant to the audit of the group man-
agement report in order to design audit procedures that are ap-
propriate in the circumstances, but not for the purpose of express-
ing an audit opinion on the effectiveness of these systems.
Identify and assess the risks of material misstatement of the
consolidated financial statements and of the group management
report, whether due to fraud or error, design and perform audit
procedures responsive to those risks, and obtain audit evidence
that is sufficient and appropriate to provide a basis for our audit
opinions. The risk of not detecting a material misstatement resulting
from fraud is higher than for one resulting from error, as fraud may
involve collusion, forgery, intentional omissions, misrepresentations,
or the override of internal control.
We exercise professional judgment and maintain professional
skepticism throughout the audit. We also:
Reasonable assurance is a high level of assurance, but is not a
guarantee that an audit conducted in accordance with §317 HGB
and the EU Audit Regulation and in compliance with German Gener-
ally Accepted Standards for Financial Statement Audits promulgated
by the Institut der Wirtschaftsprüfer (IDW) will always detect a material
misstatement. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users
taken on the basis of these consolidated financial statements and
this group management report.
Wellington
Compañía Colombiana de Servicio Automotriz
100.0
Fu An Management Consulting Co. Ltd., Beijing
Parc Eolien du Bois Guillaume SAS, Paris
100.0
PIMCO GP XXVI LLC, Wilmington, DE
100.0
Keyeast Pte. Ltd., Singapore
100.0
Parc Eolien des Quatre Buissons SAS, Paris
100.0
PIMCO GP XXV LLC, Wilmington, DE
100.0
Kensington Fund, Milan
100.0
PIMCO GP XXIX LLC, Wilmington, DE
100.0
Parc Eolien des Mistandines SAS, Paris
100.0
Ken Tame & Associates Pty Ltd., Sydney
100.0
PIMCO GP XXIV LLC, Wilmington, DE
100.0
Parc Eolien des Joyeuses SAS, Versailles
100.0
S.C.Sp., Luxembourg
100.0
100.0
Kiinteistöosakeyhtiö Eteläesplanadi 2 Oy,
PIMCO GP XXVII LLC, Wilmington, DE
Kuolavaara-Keulakkopään Tuulipuisto Oy, Oulu
100.0
PIMCO Investments LLC, Dover, DE
100.0
PGA Global Services LLC, Dover, DE
100.0
r.L., Luxembourg
100.0
Limited, Shanghai
Kohlenberg & Ruppert Premium Properties S.à
100.0
PFP Holdings Inc., Dover, DE
PIMCO Investment Management (Shanghai)
100.0
KLGCREF II Holdco Pte. Ltd., Singapore
100.0
Pet Plan Ltd., Guildford
100.0
PIMCO GP XXVIII LLC, Wilmington, DE
100.0
Helsinki
100.0
100.0
Parc Eolien Les Treize SAS, Paris
Parc Eolien des Barbes d'Or SAS, Versailles
100.0
PIMCO GP XXIII Ltd., George Town
100.0
PIMCO GP XVII LLC, Wilmington, DE
100.0
Joukhaisselän Tuulipuisto Oy, Oulu
100.0
PIMCO GP XVI LLC, Wilmington, DE
100.0
Parc Eolien de Forge SAS, Paris
100.0
NY
100.0
Parc Eolien de Fontfroide SAS, Versailles
100.0
PIMCO GP XV LLC, Wilmington, DE
Jefferson Insurance Company Corp., New York,
100.0
Parc Eolien de Dyé SAS, Versailles
100.0
PIMCO GP XIX LLC, Wilmington, DE
40.02
JCR Intertrade Ltd., Bangkok
100.0
PIMCO GP XIV LLC, Wilmington, DE
Parc Eolien de la Sole du Bois SAS, Paris
100.0
Jouttikallio Wind Oy, Kotka
100.0
KaiLong Greater China Real Estate Fund II
100.0
Parc Eolien de Remigny SAS, Versailles
100.0
Beijing
100.0
PIMCO GP XXII LLC, Wilmington, DE
100.0
Parc Eolien de Pliboux SAS, Versailles
KAIGO Hi-Tech Development (Beijing) Co. Ltd.,
100.0
100.0
PIMCO GP XXI-C LLC, Wilmington, DE
JUSTIS GmbH, Etoy
100.0
Parc Eolien de Ly-Fontaine SAS, Versailles
100.0
PIMCO GP XX LLC, Wilmington, DE
100.0
JSC Insurance Company Allianz, Moscow
100.0
Parc Eolien de Longchamps SAS, Versailles
100.0
PIMCO GP XVIII LLC, Wilmington, DE
100.0
PGREF V 1301 Sixth Investors I LLC,
Wilmington, DE
PIMCO Japan Ltd., Road Town
100.0
PIMCO COF II LLC, Wilmington, DE
99.9
MediCount Global Ltd., Ebene
100.0 3
PIMCO RAFI Dynamic Multi-Factor Global
Developed Equity Fund, Dublin
42.223
Segregated Portfolio, George Town
100.0
Medicount (Private) Limited, Islamabad
PIMCO Cayman Japan CorePLUS Strategy
100.0
Medi24 AG, Bern
100.0
100.0 3
Equity Fund, Dublin
PIMCO Canada Corp., Toronto, ON
PIMCO RAFI Dynamic Multi-Factor Europe
100.0
George Town
100.0
MAF SALP SAS, Saint-Ouen
100.0 3
PIMCO RAFI Dynamic Multi-Factor U.S. Equity
Fund, Dublin
100.03
Medicount Healthcare Private Limited,
Bangalore
PIMCO Emerging Markets Bond Fund III,
100.0
SCI AVIP SCPI Selection, Courbevoie
100.0
PIMCO Taiwan Ltd., Taipei
100.0
VertBois S.à r.l., Luxembourg
79.9
SCI Allianz Value Pierre, Paris la Défense
100.0
PIMCO REIT Management LLC, Wilmington, DE
owned¹
Markets Equity Fund, Dublin
owned¹
%
%
%
D_Consolidated Financial Statements
Annual Report 2018 - Allianz Group
160
60.43
PIMCO RealPath 2055 Fund, Boston, MA
62.13
George Town
100.0
owned¹
100.0
PIMCO BRAVO III Offshore GP Ltd.,
Maevaara Vind AB, Stockholm
100.0
PIMCO Asia Ltd., Hong Kong
100.0
LLC "IC Euler Hermes Ru", Moscow
100.0
MD
100.0
PIMCO (Schweiz) GmbH, Zurich
PIMCO Mortgage Income Trust Inc., Baltimore,
100.0
Lincoln Infrastructure USA Inc., Wilmington, DE
100.0
Wilmington, DE
100.0
Carteiras Ltda., Rio de Janeiro
100.0
LAD Energy GmbH & Co. KG, Pottenbrunn
PGREF V 1301 Sixth Investors | LP,
PIMCO Latin America Administradora de
99.9
La Rurale SA, Courbevoie
100.0
100.0
LLC "Medexpress-service", Saint Petersburg
100.0
PIMCO Private Strategies LLC, Dover, DE
100.0
PIMCO RAFI Dynamic Multi-Factor Emerging
100.0
George Town
100.0
Maevaara Vind 2 AB, Stockholm
PIMCO BRAVO III Offshore GP L.P.,
86.53
PIMCO RAE Fundamental US Fund, Dublin
99.9
Lloyd Adriatico Holding S.p.A., Trieste
100.0 3
100.0
Investimento no Exterior, Rio de Janeiro
PIMCO Australia Pty Ltd., Sydney
100.0
LLC "Risk Audit", Moscow
Fundo de Investimento Multimercado
100.0
PIMCO Australia Management Limited, Sydney
100.0
PIMCO RAE Fundamental Global Equities Plus
LLC "Progress-Med", Moscow
100.0
PIMCO Asia Pte Ltd., Singapore
100.0
Parc Eolien de Croquettes SAS, Versailles
100.0
Järvsö Sörby Vindkraft AB, Danderyd
100.0
Mombyasen Wind Farm AB, Halmstad
Hauteville Insurance Company Limited,
St Peter Port
owned¹
owned¹
owned¹
%
%
%
D_Consolidated Financial Statements
159
Annual Report 2018 - Allianz Group
50.1
Deeside Investments Inc., Wilmington, DE
81.0
Global Transport & Automotive Insurance
Solutions Pty Limited, Sydney
100.0
Euler Hermes Services G.C.C. Limited, Dubai
100.0
Darta Saving Life Assurance dac, Dublin
100.0
100.0 3
Glärnisch Institutional Fund, Basel
PIMCO Europe Ltd., London
100.0
100.0
Mondial Protection Corretora de Seguros Ltda.,
Nextcare Bahrain Ancillary Services Company
100.0
PIMCO Global Advisors (Luxembourg) S.A.,
Humble Bright Limited, Hong Kong
100.0
Neoasistencia Manoteras S.L., Madrid
100.0
Guildford
100.0
PIMCO Global Advisors (Ireland) Ltd., Dublin
100.0
Euler Hermes Services Ceská republika s.r.o.,
Prague
National Surety Corporation, Chicago, IL
100.0 3
Multimercado Investimento no Exterior,
Rio de Janeiro
100.0
Morningchapter S.A., Grandaços
100.0
Helviass Verzekeringen B.V., Rotterdam
PIMCO Flexible Bond Fundo de Investimento
Em Cotas de Fundo de Investimento
100.0
São Bernardo do Campo
100.0
Havelaar & van Stolk B.V., Rotterdam
Home & Legacy Insurance Services Limited,
Luxembourg
50.02
100.0
100.0
100.0
Woodstock, GA
Corsetec Assessoria e Corretagem de Seguros
Ltda., São Paulo
100.0
Euler Hermes S.A., Brussels
GamePlan Financial Marketing LLC,
100.0
Corn Investment Ltd., London
100.0
Euler Hermes Risk Yönetimi A.S., Istanbul
100.0 3
Gaipare Action, Paris
100.0 3
Consultatio Renta Mixta F.C.I., Buenos Aires
100.0
Euler Hermes Reinsurance AG, Wallisellen
100.0
Fusion Company Inc., Richmond, VA
100.0
S.A., Bogotá D.C.
100.0
1.02
Euler Hermes Seguros de Crédito S.A., São
Paulo
Generation Vie S.A., Courbevoie
52.5
100.0
Défense
100.0
Euler Hermes Services Bulgaria EOOD, Sofia
50.02
CreditRas Assicurazioni S.p.A., Milan
GIE Euler Hermes SFAC Services, Paris la
100.0
Euler Hermes Services Belgium S.A., Brussels
100.0 3
Creactif Allocation, Paris
100.0
CreditRas Vita S.p.A., Milan
Chatillon
100.0
Euler Hermes Services B.V., 's-Hertogenbosch
CPRN Thailand Ltd., Bangkok
Gestion de Téléassistance et de Services S.A.,
98.0
Singapore
100.0
Genialloyd S.p.A., Milan
Tokio Marine Rogge Asset Management Ltd.,
London
Euler Hermes Service AB, Stockholm
Cova Beijing Zpark Investment Pte. Ltd.,
100.0
Euler Hermes Recouvrement France S.A.S., Paris
la Défense
100.0
100.0
Pacific Investment Management Company LLC,
100.0
Intermediass S.r.l., Milan
100.0
PIMCO GP V LLC, Wilmington, DE
100.0
Insurance CJSC "Medexpress", Saint Petersburg
100.0
Orsa Minore PV S.r.l., Milan
100.0
PIMCO GP S.à r.l., Luxembourg
100.0
Orsa Maggiore PV S.r.L., Milan
99.63
InnovAllianz, Paris
100.0
PIMCO GP IX LLC, Wilmington, DE
100.0
Inforce Solutions LLC, Woodstock, GA
100.0
Orione PV S.r.l., Milan
100.0
PIMCO GP III S.à r.L., Luxembourg
Dover, DE
PIMCO GP VII LLC, Wilmington, DE
100.0
95.7
100.0
PIMCO GP XIII LLC, Wilmington, DE
100.0
Parc Eolien de Chateau Garnier SAS, Versailles
100.0
Investitori SGR S.p.A., Milan
100.0
Parc Eolien de Chaourse SAS, Versailles
100.0
PIMCO GP XII LLC, Wilmington, DE
100.0
100.0
Investitori Real Estate Fund, Milan
PIMCO GP XI LLC, Wilmington, DE
100.0
Parc Eolien de Bruyère Grande SAS, Versailles
100.0
Investitori Logistic Fund, Milan
100.0
PIMCO GP X LLC, Wilmington, DE
100.0
Parc Eolien de Bonneuil S.à r.l., Versailles
100.0
Interstate Fire & Casualty Company, Chicago, IL
100.0
Hunter Premium Funding Ltd., Sydney
ImWind PL GmbH & Co. KG, Pottenbrunn
OPCI Allianz France Angel, Paris la Défense
NEXtCARE Tunisie LLC, Tunis
100.0
Immovalor Gestion S.A., Paris la Défense
59.73
PIMCO Global Financials Credit FIC FIM IE,
Rio de Janeiro
100.0
NEXTCARE Lebanon SAL, Beirut
100.0
IEELV GP S.à r.l., Luxembourg
100.0
PIMCO Global Advisors LLC, Dover, DE
100.0
NEXTCARE Egypt LLC, New Cairo
100.0
ICON Inter GmbH & Co. KG, Vienna
100.0
PIMCO Global Advisors (Resources) LLC,
Dover, DE
100.0
NEXTCARE Claims Management LLC, Dubai
100.0
ICON Immobilien GmbH & Co. KG, Vienna
100.0
B.S.C., Manama
100.0
ImWind AO GmbH & Co. KG, Pottenbrunn
100.0
Northstar Mezzanine Partners VI U.S. Feeder II
100.0
PIMCO GP III LLC, Wilmington, DE
100.0
ImWind PDV GmbH & Co. KG, Pottenbrunn
100.0
Moscow
100.0
PIMCO GP II S.à r.l., Luxembourg
000 Euler Hermes Credit Management,
100.0
Pottenbrunn
100.0
100.0
100.0
Ontario Limited, Toronto, ON
ImWind Loidesthal GmbH & Co. KG,
100.0
PIMCO GP I Canada Corporation, Toronto, ON
100.0
ImWind GHW GmbH & Co. KG, Pottenbrunn
100.0³
L.P., Dover, DE
100.0
PIMCO Global Holdings LLC, Dover, DE
PIMCO GP I LLC, Wilmington, DE
100.0
100.0
100.0
Top Vorsorge-Management GmbH, Vienna
75.0
Joint ventures
SAS Angel Shopping Centre, Paris la Défense
90.0
Towarzystwo Ubezpieczen Euler Hermes S.A.,
Warsaw
114 Venture LP, Wilmington, DE
49.57
100.0
SAS Boutique Vignoble de Larose, Saint-
1515 Broadway Realty LP, Dover, DE
49.67
Trafalgar Insurance Public Limited Company,
100.0
Laurent-Médoc
Guildford
100.0
1800 M Street Venture LP, Wilmington, DE
42.87
SAS Madeleine Opéra, Paris la Défense
100.0
TruChoice Financial Group LLC, Minneapolis,
53 State JV L.P., Wilmington, DE
49.0
SAS Passage des princes, Paris la Défense
100.0
MN
100.0
100.0
SAS Allianz Serbie, Paris la Défense
100.0
SAS Allianz Rivoli, Paris la Défense
SAS Allianz Etoile, Paris la Défense
100.0
Tihama Investments B.V., Amsterdam
100.0
Wallisellen
100.0
SAS Allianz Forum Seine, Paris la Défense
100.0
Top Immo A GmbH & Co. KG, Vienna
100.0
Knightsbridge Allianz LP, Bartlesville, OK
99.53
SAS Allianz Logistique, Paris la Défense
100.0
Top Immo Besitzgesellschaft B GmbH & Co. KG,
SCI Vilaje, Courbevoie
100.0
Vienna
100.0
SAS Allianz Platine, Paris la Défense
100.0
Top Logistikwerkstatt Assistance GmbH, Vienna
100.0
SAS Allianz Prony, Paris la Défense
100.0
Top Versicherungs-Vermittler Service GmbH,
Vienna
100.0
Top Versicherungsservice GmbH, Vienna
100.0
A&A Centri Commerciali S.r.l., Milan
Gesellschaft für Vorsorgeberatung AG,
50.0
TU Allianz Polska S.A., Warsaw
UK Logistics S.C.Sp., Luxembourg
100.0
SCI Allianz Immobilier Durable, Paris la Défense
100.0
AZ/JH Co-Investment Venture (IL) LP,
UP 36 SA, Brussels
100.0
Wilmington, DE
80.07
SCI Allianz Invest Pierre, Paris la Défense
100.0
Valderrama S.A., Luxembourg
100.0
80.07
Bajaj Allianz Financial Distributors Limited,
100.0
Vanilla Capital Markets S.A., Luxembourg
100.0
Pune
50.0
Annual Report 2018 - Allianz Group
161
D_Consolidated Financial Statements
%
owned¹
%
%
owned¹
owned¹
SCI Allianz Messine, Paris la Défense
AZ/JH Co-Investment Venture (DC) LP,
Wilmington, DE
100.0
SCI Allianz ARC de Seine, Paris la Défense
100.0
Allee-Center Kft., Budapest
50.0
Nélausa, Paris
100.0
TU Allianz Zycie Polska S.A., Warsaw
100.0
AMLI-Allianz Investment LP, Wilmington, DE
75.07
Sättravallen Wind Power AB, Strömstad
100.0
UK Logistics GP S.à r.l., Luxembourg
100.0
AS Gasinfrastruktur Beteiligung GmbH, Vienna
55.67
Saudi NEXTCARE LLC, Al Khobar
68.0
UK Logistics PropCo I S.à r.l., Luxembourg
100.0
SC Tour Michelet, Paris la Défense
100.0
UK Logistics PropCo II S.à r.l., Luxembourg
100.0
Austin West Campus Student Housing LP,
Wilmington, DE
44.71
SCI 46 Desmoulins, Paris la Défense
100.0
UK Logistics PropCo III S.à r.L., Luxembourg
100.0
SAS Société d'Exploitation du Parc Eolien de
Castle Field Limited, Hong Kong
100.0
Finos Technology Holding Pte. Ltd., Singapore
Minneapolis, MN
100.0
Quintet Properties Ltd., Dublin
100.0
Société Foncière Européenne B.V., Amsterdam
100.0
ZAD Allianz Bulgaria Zhivot, Sofia
99.0
RAS Antares, Milan
100.0 3
Société Nationale Foncière S.A.L., Beirut
66.0
ZAD Allianz Bulgaria, Sofia
56.0
87.4
100.0
SOFE One Ltd., Bangkok
100.0
ZAD Energia, Sofia
51.0
RE-AA SA, Abidjan
98.5
SOFE Two Ltd., Bangkok
100.0
ZiOst Energy GmbH & Co. KG, Pottenbrunn
100.0
Real Faubourg Haussmann SAS, Paris la
Sofiholding S.A., Brussels
RB Fiduciaria S.p.A., Milan
Services d'Assistance à Domicile S.A., Paris
100.0
Questar Capital Corporation, Minneapolis, MN
100.0
Q 207 GP S.à r.l., Luxembourg
100.0
Moulaine SAS, Versailles
100.0
Windpark Zistersdorf GmbH, Pottenbrunn
100.0
Q207 S.C.S., Luxembourg
94.0
Société d'Energie Eolien Cambon SAS,
Versailles
100.0
Wm. H McGee & Co. (Bermuda) Ltd., Hamilton
100.0
Quality 1 AG, Bubikon
100.0
Société d'Exploitation du Parc Eolien d'Aussac
Wm. H McGee & Co. Inc., New York, NY
100.0
Questar Agency Inc., Minneapolis, MN
100.0
Vadalle SAS, Paris
100.0
YAO NEWREP Investments S.A., Luxembourg
93.2
Questar Asset Management Inc., Ann Arbor, MI
100.0
Société Européenne de Protection et de
Yorktown Financial Companies Inc.,
Luxembourg
100.0
Défense
South City Office Broodthaers SA, Brussels
The American Insurance Company Corp.,
SA Carène Assurance, Paris
100.0
Cincinnati, OH
100.0
Allianz Northern Ireland Limited, Belfast
100.0
SA Vignobles de Larose, Saint-Laurent-Médoc
100.0
The Annuity Store Financial & Insurance
Assurance France Aviation S.A., Paris
100.0
Saarenkylä Tuulipuisto Oy, Oulu
100.0
100.0
100.0
business lounge GmbH, Vienna
100.0
Saint-Barth Assurances S.à r.L., Saint
The MI Group Limited, Guildford
99.4
COGAR S.à r.L., Paris
100.0
Barthelemy
100.0
SAS 20 pompidou, Paris la Défense
100.0
Three Pillars Business Solutions Limited,
Guildford
Services LLC, Sacramento, CA
Allianz Insurance Services Ltd., Athens
100.03
Rivage Richelieu 1 FCP, Paris
100.0
Non-consolidated affiliates
Real FR Haussmann SAS, Paris la Défense
100.0
SpaceCo S.A., Paris
100.0
AGF Pension Trustees Ltd., Guildford
Redoma 2 S.A., Luxembourg
100.0
Stam Fem Gångaren 11 AB, Stockholm
100.0
Allianz Financial Services S.A., Athens
100.0
100.0
Redoma S.à r.l., Luxembourg
100.0
StocksPLUS Management Inc., Dover, DE
100.0
Allianz Global Corporate & Specialty SE
Risikomanagement und Softwareentwicklung
Téléservices et Sécurité "TEL2S" SARL, Chatillon
99.9
Escritório de Representação no Brasil Ltda., Rio
GmbH, Vienna
100.0
de Janeiro
100.0
TFI Allianz Polska S.A., Warsaw
100.0
100.0
50.0
Chapter Master Limited Partnership, London
45.57
Porterbrook Holdings | Limited, London
30.07
Best Regain Limited, Hong Kong
16.48
SK Versicherung AG, Vienna
25.8
Previndustria - Fiduciaria Previdenza
Imprenditori S.p.A., Milan
50.0
Blue Vista Student Housing Select Strategies
Fund L.P., Dover, DE
SNC Alta CRP Gennevilliers, Paris
49.0
24.9
16.48
SNC Alta CRP La Valette, Paris
PT IndoAlliz Perkasa Sukses, Jakarta
49.07
Broker on-line de Productores de Seguros S.A.,
Buenos Aires
SNC Société d'aménagement de la Gare de
30.0
l'Est, Paris
49.0
Queenspoint S.L., Madrid
50.0
Brunei National Insurance Company Berhad
Solveig Gas Holdco AS, Oslo
30.0
RMPA Holdings Limited, Colchester
49.0
Sino Phil Limited, Hong Kong
20.0
Berkshire India Private Limited, New Delhi
LBA IV-PPII-Retail Venture LLC, Dover, DE
45.07
Bajaj Allianz Life Insurance Company Ltd., Pune
SAS Alta Gramont, Paris
49.0
26.0
NET4GAS Holdings s.r.o., Prague
50.0
Bazalgette Equity Ltd., London
34.3
Scape Investment Operating Company No. 2
Pty Ltd., Sydney
50.08
NeuConnect Britain Ltd., London
26.23,7
Beacon Platform Incorporated, Wilmington, DE
26.9
Scape Investment Trust No. 2, Sydney
50.0 3,8
NRF (Finland) AB, Västeras
Berkshire Hathaway Services India Private
50.0
Limited, New Delhi
20.0
SCI Bercy Village, Paris
49.0
Podium Fund HY REIT Owner LP, Wilmington,
DE
44.37
56.07
33.3
Ltd., Bandar Seri Begawan
Strategic Fintech Investments S.A., Luxembourg
Solunion Compañía Internacional de Seguros y
Reaseguros SA, Madrid
Data Quest SAL, Beirut
36.0
1 Percentage includes equity participations held by dependent entities
50.0
Delgaz Grid S.A., Târgu Mures
30.0
Spanish Gas Distribution Investments S.à r.l.,
Luxembourg
in full, even if the Allianz Group's share in the dependent entity is
below 100%.
40.07
Delong Limited, Hong Kong
16.48
2_Controlled by the Allianz Group.
36.6
3_Investment fund.
50.0
Douglas Emmett Partnership X LP, Wilmington,
DE
28.6
Terminal Venture LP, Wilmington, DE
28.97
ERES APAC II (GP) S.à r.l., Luxembourg
30.73
49.97
The State-Whitehall Company LP, Dover, DE
25.83
European Outlet Mall Fund FCP-FIS,
Luxembourg
49.57
SPREF II Pte. Ltd., Singapore
Daiwater Investment Limited, London
10.08
Wildlife Works Carbon LLC, San Francisco, CA
12.48
SC Holding SAS, Paris
50.0
Carlyle China Realty L.P., George Town
50.0 3,8
Summer Blaze Limited, Hong Kong
16.48
SCI Docks V3, Paris la Défense
50.0
Carlyle China Rome Logistics L.P., George Town
38.33
Supreme Cosmo Limited, Hong Kong
16.48
SES Shopping Center AT1 GmbH, Salzburg
50.0
Chicago Parking Meters LLC, Wilmington, DE
49.9
Sure Rainbow Limited, Hong Kong
16.48
SES Shopping Center FP 1 GmbH, Salzburg
50.0
CPIC Allianz Health Insurance Co. Ltd.,
Shanghai BaiAn Information Technology Co.
Shanghai
UK Outlet Mall Partnership LP, Edinburgh
19.58
22.9
Ltd., Shanghai
20.07
25.0
38.33
Redwood Japan Logistics Fund II LP, Singapore
Residenze CYL S.p.A., Milan
26.0
25.0
CPPIC Euler Hermes Insurance Sales Co. Ltd.,
Shanghai
49.07
MFM Holding Ltd., London
38.4
Dundrum Car Park GP Limited, Dublin
50.0
Allianz EFU Health Insurance Ltd., Karachi
Allianz Euribor, Paris
49.0
Milvik AB, Stockholm
34.1
33.63
Medgulf Takaful B.S.C.(c), Manama
Dundrum Car Park Limited Partnership, Dublin
Allianz Fóndika S.A. de C.V., Mexico City
26.8
Modern Diamond Limited, Hong Kong
16.48
Dundrum Retail GP Designated Activity
Allianz France Investissement IV, Paris
73.3 3,8
MTech Capital Fund (EU) SCSp, Luxembourg
33.3
Company, Dublin
50.0
Allianz Invest Vorsorgefonds, Vienna
27.53
50.0
Associates
49.07
CPIC Fund Management Co. Ltd., Shanghai
Columbia REIT - 333 Market Street LP,
Vailog Hong Kong DC17 Limited, Hong Kong
Vailog Hong Kong DC19 Limited, Hong Kong
Valley (III) Pte. Ltd., Singapore
50.0
Jumble Succeed Limited, Hong Kong
16.48
50.0
Lennar Multifamily Venture LP, Wilmington, DE
11.38
41.57
Link (LRM) Limited, Hong Kong
16.48
Wilmington, DE
44.7 1
Columbia REIT-University Circle LP,
Wilmington, DE
44.71
VGP European Logistics S.à r.L., Senningerberg
VISION (III) Pte Ltd., Singapore
50.0
30.07
Liverpool Victoria General Insurance Group
Limited, Bournemouth
49.0
Companhia de Seguro de Créditos S.A., Lisbon
50.0
Waterford Blue Lagoon LP, Wilmington, DE
49.07
Long Coast Limited, Hong Kong
16.48
Luxury Gain Limited, Hong Kong
16.4
New Path S.A., Buenos Aires
40.0
Dundrum Retail Limited Partnership, Dublin
50.0
Praise Creator Limited, Hong Kong
16.48
Areim Fastigheter 3 AB, Stockholm
31.6
Galore Expert Limited, Hong Kong
50.0
Prime Space Limited, Hong Kong
16.48
Assurcard N.V., Haasrode
20.0
Hudson One Ferry JV L.P., Wilmington, DE
45.07
Autoelektro tehnicki pregledi d.o.o., Vojnić
49.0
Professional Agencies Reinsurance Limited,
Hamilton
14.38
Israel Credit Insurance Company Ltd., Tel Aviv
50.0
Italian Shopping Centre Investment S.r.l., Milan
50.0
AWP Insurance Brokerage (Beijing) Co. Ltd.,
Beijing
Quadgas Holdings Topco Limited, Saint Helier
16.78
100.0 8
LBA IV-PPI Venture LLC, Dover, DE
45.07
LBA IV-PPII-Office Venture LLC, Dover, DE
45.07
Bajaj Allianz General Insurance Company Ltd.,
Pune
50.17
Windpark Scharndorf GmbH, Pottenbrunn
Fiumaranuova S.r.l., Genoa
Areim Fastigheter 2 AB, Stockholm
Alpha Asia Macro Trends Fund III Private
New Try Limited, Hong Kong
16.48
Elite Prize Limited, Hong Kong
50.0
Limited, Singapore
20.23
NGI Group Holdings LLC, Wilmington, DE
30.0
Elton Investments S.à r.L., Luxembourg
41.4'
Archstone Multifamily Partners AC JV LP,
Ocean Properties LLP, Singapore
20.0
Enhanzed Reinsurance Ltd., Hamilton
24.97
Wilmington, DE
40.0
ESR India Logistics Fund Pte. Ltd., Singapore
50.0
Archstone Multifamily Partners AC LP,
OeKB EH Beteiligungs- und Management AG,
Vienna
49.0
Wilmington, DE
28.6
Euromarkt Center d.o.o., Ljubljana
50.0
OVS Opel VersicherungsService GmbH, Vienna
40.0
23.3
Société de Production D'électricité D'harcourt
The FIZZ Student Housing Fund S.C.S.,
Protexia France S.A., Paris la Défense
99.8
Silex Gas Norway AS, Oslo
100.0
Windpark Les Cent Jalois SAS, Versailles
100.0
PT Asuransi Allianz Utama Indonesia Ltd.,
Jakarta
Sirius S.A., Luxembourg
94.8
Windpark LOI GmbH, Pottenbrunn
100.0
PT Asuransi Allianz Life Indonesia p.l.c., Jakarta
97.8
100.0
Windpark PDV GmbH, Pottenbrunn
PT Blue Dot Services, Jakarta
100.0
Società Agricola San Felice S.p.A., Milan
100.0
Windpark PL GmbH, Pottenbrunn
100.0
PTE Allianz Polska S.A., Warsaw
100.0
SLC "Allianz Life Ukraine", Kiev
100.0
100.0
100.0
Windpark Ladendorf GmbH, Vienna
Vet Envoy Limited, Colwyn Bay
Primacy Underwriting Management Pty Ltd.,
Melbourne
SDIII Energy GmbH & Co. KG, Pottenbrunn
100.0
87.5
100.0
Prosperaz Fundo de Investimento Renda Fixa
Servicios Compartidos Multiasistencia S.L.,
Madrid
Windpark AO GmbH, Pottenbrunn
100.0
WFC Investments Sp. z o.o., Warsaw
Windpark EDM GmbH, Pottenbrunn
100.0
100.0
100.0
Silex Gas Management AS, Oslo
60.0
Windpark GHW GmbH, Pottenbrunn
SIFCOM Assur S.A., Abidjan
100.03
Crédito Privado, São Paulo
100.0
Annual General Meeting
Financial calendar
www.allianz.com/results
Further information on the definition of our Alternative
Performance Measures and their components, as well as
the basis of calculation adopted:
PERFORMANCE MEASURES
Important dates for shareholders and analysts¹
GUIDELINE ON ALTERNATIVE
PEOPLE FACT BOOK 2018
The People Fact Book is the official and most comprehensive
report on our workforce facts and figures, highlighting
major HR achievements over the past year and revealing
the outlook for 2019.
Allianz
ALLIANZ
ALLIANZ PEOPLE FACT BOOK 2018
Financial Results 1Q
This sign indicates where to find additional infor-
mation in this Annual Report or on the internet.
Date of publication: 18 March 2019. www.allianz.com/hrfactbook
Financial Results 2Q/Interim Report 6M
Allianz SE - Königinstrasse 28 - 80802 Munich - Germany - Phone +49 89 38000 - info@allianz.com - www.allianz.com
Front page design: hw.design GmbH - Photography: Andreas Pohlmann - Typesetting: Produced in-house with firesys -
Printing: G. Peschke Druckerei GmbH - Annual Report on the internet: www.allianz.com/annualreport - Date of publication: 8 March 2019
This is a translation of the German Annual Report of Allianz Group. In case of any divergences, the German original is legally binding.
Financial Results 2019.
ORIENTATION GUIDE
We have complied with the German professional provisions regarding
independence as well as other ethical requirements.
responsible sources
FSC® C002390
www.fsc.org
FSC
MIX
Paper from
1- The German Securities Trading Act ("Wertpapierhandelsgesetz") obliges issuers to announce immediately any information which may have a substantial price impact. Therefore we cannot exclude that
we have to announce key figures related to quarterly and fiscal year results ahead of the dates mentioned above. As we can never rule out changes of dates, we recommend checking them on the
internet at www.allianz.com/financialcalendar.
6 May 2020
21 February 2020
6 March 2020
8 November 2019
2 August 2019
14 May 2019
8 May 2019
Annual General Meeting
Annual Report 2019.
Financial Results 3Q
www.allianz.com/sustainability
INDEPENDENCE AND QUALITY CONTROL OF THE
AUDIT FIRM
Allianz ⑪
We were elected as group auditor by the supervisory board on
8 March 2018. We were engaged by the audit committee of the
supervisory board on 14 May 2018. We have been the group auditor
of the Allianz SE, Munich, without interruption since the financial year
2018.
FURTHER INFORMATION PURSUANT TO ARTICLE 10
OF THE EU AUDIT REGULATION
Other legal and regulatory requirements
From the matters communicated with those charged with
governance, we determine those matters that were of most significance
in the audit of the consolidated financial statements of the current
period and are therefore the key audit matters. We describe these
matters in our auditor's report unless law or regulation precludes
public disclosure about the matter.
Our audit firm applies the national legal requirements and
professional standards - in particular the Professional Code for
German Public Auditors and German Chartered Auditors
("Berufssatzung für Wirtschaftsprüfer und vereidigte Buchprüfer": "BS
WP/VBP") as well as the Standard on Quality Control 1 published by the
Institut der Wirtschaftsprüfer (Institute of Public Auditors in Germany;
IDW): Requirements to quality control for audit firms (IDW
Qualitätssicherungsstandard 1: Anforderungen an die Quali-
tätssicherung in der Wirtschaftsprüferpraxis - IDW QS 1) - and
accordingly maintains a comprehensive system of quality control
including documented policies and procedures regarding compliance
with ethical requirements, professional standards and applicable
legal and regulatory requirements.
PRACTITIONER'S RESPONSIBILITY FOR THE
ASSURANCE ENGAGEMENT
Our responsibility is to express a limited assurance conclusion on the
Environmental Indicators disclosed in section "Environmental Matters"
and a reasonable assurance conclusion on all information other than
the Environmental Indicators in the Non-financial Report based on
the respective procedures we have performed.
Within the scope of our engagement we did not perform any
procedures on external sources of information or expert opinions,
referred to in the Non-financial Report. Furthermore, we did not
evaluate the data process regarding the key performance indicators
"Inclusive Meritocracy Index" and "Net Promoter Score" performed by
external service providers.
We declare that the audit opinions expressed in this auditor's report
are consistent with the additional report to the audit committee
pursuant to Article 11 of the EU Audit Regulation (long-form audit
report).
We conducted our assurance engagement in accordance with
the International Standard on Assurance Engagements (ISAE) 3000
(Revised): Assurance Engagements other than Audits or Reviews of
Historical Financial Information, issued by the IAASB.
to conclude with limited assurance that nothing has come to our
attention that causes us to believe that the Environmental Indica-
tors disclosed in section "Environmental Matters" of the Compa-
ny's Non-financial Report for the period from 1 January to
31 December 2018 have not been prepared, in all material as-
pects, in accordance with §§315b and 315c in conjunction with
289b to 289e HGB and
to obtain reasonable assurance whether all information other
than the Environmental Indicators in the Non-financial Report for
the period from 1 January to 31 December 2018 has been pre-
pared, in all material aspects, in accordance with §§315b and
315c in conjunction with 289b to 289e HGB.
For the part of our work engaged to provide limited assurance the
assurance procedures are less in extent than for the part of our work
engaged to provide reasonable assurance, and therefore a substan-
tially lower level of assurance is obtained.
The assurance procedures selected depend on the practitioner's
judgment.
Within the scope of our assurance engagement, we performed
amongst others the following assurance procedures and further
activities:
Obtaining an understanding of the structure of the sustainability
organization and of the stakeholder engagement.
Inquiries of personnel involved in the preparation of the Non-
financial Report regarding the preparation process, the internal
control system relating to this process and selected disclosures in
the Non-financial Report.
Evaluation of the internal control system regarding the prepara-
tion process of the Non-financial Report.
This Standard requires that we plan and perform the assurance
engagement to allow us
Performance of site visits as part of the inspection of processes for
collecting, analyzing and aggregating selected data:
German Public Auditor responsible for the
engagement
Munich, 25 February 2019
This responsibility of the Company's executive directors includes
the selection and application of appropriate methods of non-
financial reporting as well as making assumptions and estimates
related to individual non-financial disclosures which are reasonable
in the circumstances. Furthermore, the executive directors are respon-
sible for such internal control as they have considered necessary to
enable the preparation of a Non-financial Report that is free from
material misstatement whether due to fraud or error.
The Allianz Group Sustainability Report "Shaping our
sustainable future" covers our contribution to the
environment, society and economy. It provides full details
of our sustainability strategy, approach and progress
in 2018 as well as an outlook for 2019.
Date of publication: 11 April 2019.
RESPONSIBILITIES OF THE EXECUTIVE DIRECTORS
The executive directors of the Company are responsible for the
preparation of the Non-financial Report in accordance with §§315b
and 315c in conjunction with 289b to 289e HGB.
reasonable assurance on all information other than the
Environmental Indicators in the Non-financial Report.
limited assurance on the environmental indicators "greenhouse
gas (GHG) emissions per employee" and "% of green electricity" of
Allianz Group and Allianz SE (hereinafter the "Environmental
Indicators") disclosed in section "Environmental Matters" of the
Non-Financial Report and
We have performed an assurance engagement on the information
included in the combined separate non-financial report pursuant to
§§289b (3) and 315b (3) HGB (Handelsgesetzbuch: German
Commercial Code) of Allianz SE, Munich, (hereinafter the "Company")
for the period from 1 January to 31 December 2018 (hereinafter the
"Non-financial Report"). In accordance with our engagement the
level of assurance to be provided by us has been split up into
Report on a limited and reasonable assurance
engagement on non-financial reporting
To Allianz SE, Munich
The German Public Auditor responsible for the engagement is
Richard Burger.
INDEPENDENT PRACTITIONER'S REPORT
169
Annual Report 2018 - Allianz Group
(German Public Auditor)
Julia Unkel
Wirtschaftsprüferin
(German Public Auditor)
Wirtschaftsprüfer
Richard Burger
PricewaterhouseCoopers GmbH
Wirtschaftsprüfungsgesellschaft
E_Further Information
170
E_Further Information
Allianz Deutschland AG in Munich, Germany,
E_Further Information
171
E_Further Information
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172
Annual Report 2018 - Allianz Group
Orientation
MULTICHANNEL REPORTING
Annual Report 2018 - Allianz Group
Print
Further Allianz publications
ALLIANZ SUSTAINABILITY REPORT 2018
SHAPING OUR
SUSTAINABLE
FUTURE
ALLIANZ GROUP
SUSTANABUTY REPORT 20
Annual Report 2018 - Allianz Group
Apple App Store and
Google Play Store
Allianz Investor
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Download
as PDF
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annualreport
ppa. Annette Daschner
Allianz ⑪
Allianz Benelux S.A. in Brussels, Belgium.
Allianz Partners S.A.S. in Paris, France,
(German public auditor)
Allianz Lebensversicherungs-AG in Munich, Germany,
Allianz Technology SE in Munich, Germany,
Euler Hermes S.A. in Paris, France, and
Identification of the likely risks of material misstatement of the
Non-financial Report.
Analytical evaluation of selected disclosures in the Non-financial
Report.
Obtaining an understanding of the work of external experts
providing data as well as evaluation of competence, capabilities
and objectivity of these external experts.
Evaluation of the presentation of the non-financial information.
CONCLUSION
Allianz France S.A. in Paris, France,
PricewaterhouseCoopers GmbH
Wirtschaftsprüfungsgesellschaft
In our opinion all information other than the Environmental
Indicators in the Non-financial Report for the period from 1 January
to 31 December 2018 has been prepared, in all material aspects, in
accordance with §§ 315b and 315c in conjunction with 289b to 289e
HGB.
Wirtschaftsprüfer
INTENDED USE OF THE ASSURANCE REPORT
We issue this report on the basis of the engagement agreed with the
Company. The reasonable assurance engagement and the limited
assurance engagement have been performed for purposes of the
Company and the report is solely intended to inform the Company
about the results of the reasonable assurance engagement and the
limited assurance engagement. The report is not intended for any
third parties to base any (financial) decision thereon. Our responsibility
lies only with the Company. We do not assume any responsibility
towards third parties.
Munich, 25 February 2019
Based on the assurance procedures performed and assurance
evidence obtained, nothing has come to our attention that causes us
to believe that the Environmental Indicators disclosed in section
"Environmental Matters" of the Company's Non-financial Report for
the period from 1 January to 31 December 2018 have not been
prepared, in all material aspects, in accordance with §§315b and
315c in conjunction with 289b to 289e HGB.
Hendrik Fink
Designing, monitoring, and improving
group-wide compensation systems in line
with regulatory requirements and sub-
mitting an annual report on the monitoring
results, along with proposals for improvement.
Implementing the Group investment strategy,
including monitoring group-wide invest-
ment activities as well as approving invest-
ment-related frameworks and guidelines
and individual investments within certain
thresholds.
The Allianz Group runs its operating entities and business segments
via an integrated management and control process. First, the Holding
and the operating entities define the business strategies and goals.
On this basis, joint plans are then prepared for the Supervisory
Board's consideration when setting targets for the performance-
based remuneration of the members of the Board of Management.
For details, see the Remuneration Report starting on > page 23.
12
12
Annual Report 2018 - Allianz Group
The Supervisory Board takes all decisions based on a simple
majority. The special requirements for appointing members to the
Board of Management, as stipulated in the German Co-
Determination Act, and the requirement to have a Conciliation
Committee do not apply to an SE. In the event of a tie, the casting vote
lies with the Chairman of the Supervisory Board, who at Allianz SE
must be a shareholder representative. If the Chairman is not present
in the event of a tie, the casting vote lies with the vice chairperson
from the shareholder side. A second vice chairperson is elected at the
employee representatives' proposal.
The Board of Management reports regularly and comprehen-
sively to the Supervisory Board on business development, the
company's financial position and earnings, planning and achieve-
ment of objectives, business strategy, and risk exposure. Details on
the Board of Management's reporting to the Supervisory Board are
laid down in the information rules issued by the Supervisory Board.
Important decisions of the Board of Management require
approval by the Supervisory Board. These requirements are stipulated
by law, by the Statutes, or in individual cases by decisions of the Annual
General Meeting (AGM). Supervisory Board approval is required, for
example, for certain capital transactions, intercompany agreements,
and the launch of new business segments or the closure of existing
ones. Approval is also required for acquisitions of companies and
holdings in companies, as well as for divestments of Group companies
that exceed certain threshold levels. The Agreement concerning the
Participation of Employees in Allianz SE, in the version dated
3 July 2014 (hereinafter "SE Agreement"), requires the approval of the
Supervisory Board for the appointment of the member of the Board of
Management responsible for employment and social welfare.
Principles and function of the Supervisory Board
The German Co-Determination Act ("Mitbestimmungsgesetz") does not
apply to Allianz SE because it has the legal form of a European
Company (SE). Instead, the size and composition of the Supervisory
Board is determined by general European SE regulations. These
regulations are implemented in the Statutes and via the SE Agreement.
The Supervisory Board comprises twelve members, including six
shareholder representatives appointed by the AGM. The six
employee representatives are appointed by the SE works council. The
specific procedure for their appointment is laid down in the
SE Agreement. This agreement stipulates that the six employee
representatives must be allocated in proportion to the number of
Allianz employees in the different countries. The Supervisory Board
currently in office comprises four employee representatives from
Germany and one each from France and the United Kingdom.
According to §17 (2) of the German SE Implementation Act ("SE-
Ausführungsgesetz"), the Supervisory Board of Allianz SE shall be
composed of at least 30% women and at least 30% men.
Responsibilities
The Supervisory Board oversees and advises the Board of
Management on managing the business. It is also responsible for
appointing the members of the Board of Management, determining
their overall remuneration, succession planning for the Board of
Management, and reviewing Allianz SE's and the Allianz Group's
annual financial statements. The Supervisory Board's activities in the
2018 financial year are described in the Supervisory Board Report
starting on page 4.
B_Corporate Governance
Jacqueline Hunt,
In addition to Board committees, there are also Group committees.
They are responsible for preparing decisions for the Board of
Management of Allianz SE, submitting proposals for resolutions,
and ensuring a smooth flow of information within the Group.
GROUP INVESTMENT COMMITTEE
Board members of Allianz SE and Allianz Group
executives.
GROUP COMPENSATION COMMITTEE
Board members of Allianz SE and executives
below Allianz SE Board level.
Group committees
Group committees
In the financial year 2018, the following Group committees were in
place:
Managing and overseeing Group M & A-
transactions, including approval of
individual transactions within certain
thresholds.
Developing, proposing, implementing
and monitoring a group-wide IT strategy,
approving external IT contracts and business-
related IT contracts with strategic and group
relevance.
Preparation of the capital and liquidity
planning for the Group and Allianz SE,
implementing and overseeing the
principles of group-wide capital and
liquidity planning, as well as investment
strategy and preparing risk strategy.
This includes, in particular, significant
individual investments and guidelines for
currency management, Group financing
and internal Group capital management,
as well as establishing and overseeing a
group-wide risk management and
monitoring system including dynamic
stress tests.
Responsibilities
As of 31 December 2018
AND ACQUISITIONS COMMITTEE
Dr. Helga Jung (Chairwoman),
Oliver Bäte,
The Supervisory Board regularly reviews the efficiency of its
activities. The Supervisory Board discusses recommendations for
improvements and adopts appropriate measures on the basis of
recommendations from the Standing Committee. The self-
assessment also includes an evaluation of the fitness and propriety
of the individual members.
Giulio Terzariol.
As of 31 December 2018
SUPERVISORY BOARD COMMITTEES
100
Supervisory Board committees
100
5/5
GROUP MERGERS
Michael Diekmann
67
2/3
Jean-Jacques Cette (Member until 31 July 2018)
100
5/5
Sophie Boissard
100
5/5
Dr. Friedrich Eichiner (Chairman)
AUDIT COMMITTEE
Part of the Supervisory Board's work is carried out by its committees.
The Supervisory Board receives regular reports on the activities of its
committees. The composition of committees and the tasks assigned
to them are regulated by the Supervisory Board's Rules of Procedure.
3/3
100
6/6
Herbert Hainer
100
3/3
Gabriele Burkhardt-Berg (Member as of 1 September 2018)
100
6/6
Michael Diekmann (Chairman)
- Two further shareholder representatives
(Herbert Hainer, Jim Hagemann Snabe)
- Two employee representatives (Jürgen
Lawrenz, Jean-Claude Le Goaër)
of the Supervisory Board
(Michael Diekmann)
- Chairman: Chairman
5 members
Supervisory Board committees
STANDING COMMITTEE
Rolf Zimmermann (Member until 31 August 2018)
Dr. Günther Thallinger,
Dr. Axel Theis.
Companhia de Seguros Allianz Portugal S.A.
GROUP IT COMMITTEE
Dr. Christof Mascher (Chairman),
Niran Peiris,
Central & Eastern Europe
Insurance German Speaking Countries and
DR. AXEL THEIS
Finance, Controlling, Risk
GIULIO TERZARIOL
until 1 November 2018
Allianz Seguros S.A., Colombia
Allianz Seguros S.A., Brazil
(Chairman since 19 October 2018)
since 16 May 2018
Allianz Compañía de Seguros y Reaseguros S.A., Spain
Allianz Partners S.A.S.
Membership in comparable¹ supervisory bodies
Membership in Group bodies
Business Transformation, Insurance Iberia & Latin
America, Allianz Partners
since 1 April 2018
IVÁN DE LA SOTA
Allianz Australia Ltd.
Allianz p.l.c.
Membership in comparable¹ supervisory bodies
Membership in Group bodies
Allianz Global Corporate & Specialty SE (Chairman)
since 9 April 2018
Membership in other statutory supervisory boards
and SE administrative boards in Germany
Membership in Group bodies
Global Insurance Lines & Anglo Markets,
Reinsurance, Middle East, Africa
NIRAN PEIRIS
Allianz Compañía de Seguros y Reaseguros S.A.
Companhia de Seguros Allianz Portugal S.A.
Membership in comparable¹ supervisory bodies
Membership in Group bodies
Allianz Global Corporate & Specialty SE
Allianz Private Krankenversicherungs-AG
since 12 March 2018
Allianz Deutschland AG
since 13 March 2018
Allianz Beratungs- und Vertriebs-AG
Jean-Claude Le Goaër (Member from 1 August 2018)
Membership in Group bodies
Membership in other statutory supervisory boards
and SE administrative boards in Germany
Gemeinnützige ProCurand GmbH (Chairman)
Membership in Group bodies
Two employee representatives
(Jean-Claude Le Goaër, Martina Grundler)
Dr. Günther Thallinger,
Dr. Axel Theis.
GROUP FINANCE AND RISK COMMITTEE
Giulio Terzariol (Chairman),
Niran Peiris,
Board committees
Board Committees
BOARD OF MANAGEMENT AND GROUP COMMITTEES
In the financial year 2018, the following Board of Management
committees were in place:
Board of Management meetings are led by the Chairman. Each
member of the Board may request a meeting, providing notification
of the proposed subject. The Board makes decisions by a simple
majority of participating members. In the event of a tie, the Chairman
casts the deciding vote. The Chairman can also veto decisions, but he
cannot impose any decisions against the majority vote.
The Board of Management of Allianz SE comprises ten members. It is
responsible for setting business objectives and the strategic direction,
for coordinating and supervising the operating entities, and for
implementing and overseeing an efficient risk management system.
The Board of Management also prepares the annual financial
statements of Allianz SE, the Allianz Group's consolidated financial
statements, the market value balance sheet, and the interim report.
The members of the Board of Management are jointly respon-
sible for management and for complying with legal requirements.
Notwithstanding this overall responsibility, the individual members
head the departments they have been assigned independently.
There are divisional responsibilities for business segments as well as
functional responsibilities. The latter include the Finance, Risk
Management and Controlling Functions, Investments, Operations
including IT, Human Resources, Legal, Compliance, Internal Audit,
and Mergers & Acquisitions. Business division responsibilities focus on
geographical regions or Global Lines such as Asset Management.
Rules of procedure specify in more detail the structure and depart-
mental responsibilities of the Board of Management.
Function of the Board of Management
As a European Company, Allianz SE is subject to special European SE
regulations and the German SE Implementation Act ("SE-
Ausführungsgesetz") in addition to the German SE Employee
Involvement Act ("SE-Beteiligungsgesetz"). However, the main
features of a German stock corporation - in particular the two-tier
board system (Board of Management and Supervisory Board) and
the principle of equal employee representation on the Supervisory
Board - have been maintained by Allianz SE.
of the European Company (SE)
Corporate Constitution
Good corporate governance is essential for sustainable business
performance. The Board of Management and the Supervisory
Board of Allianz SE thus attach great importance to complying with
the recommendations of the German Corporate Governance Code
(hereinafter referred to as the "Code"). The Declaration of Conformity
with the recommendations of the Code, issued by the Board of
Management and the Supervisory Board on 12 December 2018,
and the company's position regarding the Code's suggestions can
be found in the Statement on Corporate Management pursuant to
§315d and §289f of the HGB starting on > page 17.
CORPORATE GOVERNANCE REPORT
B_Corporate Governance
Giulio Terzariol,
11
B
CORPORATE GOVERNANCE
Annual Report 2018 - Allianz Group
110
10
1 Generally, we regard memberships in other supervisory bodies as "comparable" if the company is listed on a stock exchange or has more than 500 employees.
Allianz Suisse Lebensversicherungs-Gesellschaft AG
Allianz Suisse Versicherungs-Gesellschaft AG
Euler Hermes Group S.A. (Chairman)
until 4 May 2018
Allianz Elementar Versicherungs-AG (Chairman)
Allianz Investmentbank AG
Allianz Elementar Lebensversicherungs-AG
(Chairman)
Membership in Group bodies
Membership in comparable¹ supervisory bodies
Allianz Global Corporate & Specialty SE (Chairman)
until 8 April 2018
Allianz Investment Management SE
Allianz Deutschland AG (Chairman)
Annual Report 2018 - Allianz Group
2/2
Since the last Declaration of Conformity as of December 14, 2017, Allianz SE has
complied with all recommendations of the German Corporate Governance Code in the
version of February 7, 2017 and will comply with them in the future.
Martina Grundler
In addition, the quality of our internal control system is assessed
by the Allianz Group's Internal Audit function. This function conducts
independent, objective assurance and consulting activities, analyzing
the structure and efficiency of the internal control systems as a whole.
In addition, it also examines the potential for additional value and
improvement of our organization's operations. Fully compliant with
all international auditing principles and standards, Internal Audit
contributes to the evaluation and improvement of the effectiveness of
the risk management, control, and governance processes. Therefore,
internal audit activities are geared towards helping the company to
mitigate risks, and further assist in strengthening its governance
processes and structures.
The Allianz Group has an effective internal risk and control system for
verifying and monitoring its operating activities and business pro-
cesses, in particular financial reporting, as well as compliance with
regulatory requirements. The requirements placed on the internal
control systems are essential not only for the resilience and franchise
value of the company, but also to maintain the confidence of the
capital market, our customers, and the public. A comprehensive risk
and control management system regularly also assesses the effec-
tiveness and appropriateness of the internal control system as part of
the System of Governance. For further information on our risk organi-
zation and risk principles, please refer t::C:②CHECK: Cage 74. For further
information on our Controls over Financial Reporting, please refer to
> page 89.
INTERNAL CONTROL SYSTEMS
Corporate governance practices
The Declaration of Conformity and further information on corpo-
rate governance at Allianz can be found on our website at
> www.allianz.com/corporate-governance.
In addition, Allianz SE follows all the suggestions of the Code in its
7 February 2017 version.
Signed Dr. Helga Jung
Signed Michael Diekmann"
For the Supervisory Board:
Signed Oliver Bäte
For the Management Board:
Allianz SE
Munich, December 12, 2018
and SE administrative boards in Germany
Deutsche Telekom AG
"Declaration of Conformity by the Management Board and the Supervisory Board of
Allianz SE with the recommendations of the German Corporate Governance Code
Commission in accordance with § 161 of the German Stock Corporation Act (AktG)
Declaration of Conformity in accordance with § 161 of the German
Stock Corporation Act
On 12 December 2018, the Board of Management and the Super-
visory Board issued the following Declaration of Conformity of
Allianz SE with the German Corporate Governance Code (hereinaf-
ter the "Code"):
Declaration of Conformity with the German
Corporate Governance Code
The Statement on Corporate Management pursuant to §315d and
§289f of the German Commercial Code ("Handelsgesetzbuch
HGB") forms part of the Group Management Report. However,
according to §317 (2) sentence 6 of the HGB, this Statement is not
included within the scope of the audit.
STATEMENT ON CORPORATE MANAGEMENT
PURSUANT TO § 315d AND § 289f OF THE HGB
B_Corporate Governance
Annual Report 2018 - Allianz Group
16
16
The regulatory requirements for corporate governance applicable for
insurance companies, insurance groups, and financial conglomerates
are also important. Specifically, they include the establishment and
further design of significant control functions (risk management,
actuarial function, compliance, and internal audit) as well as general
principles for a sound business organization. The regulatory
requirements are applicable throughout the Group in principle and
have been implemented using written guidelines issued by the Board
of Management of Allianz SE. Since the 2016 financial year, a market
value balance sheet has to be prepared at solo and group level,
which has to be examined and reported on separately by the
auditors. Details on the implementation of the regulatory requirements
for corporate governance by Allianz SE and by the Allianz Group can
be found in the Solvency and Financial Condition Report of Allianz SE
and of the Allianz Group, which are published on our website at
> www.allianz.com/sfcr.
Regulatory requirements
You can find the 2019 financial calendar on our website at
> www.allianz.com/financialcalendar.
To ensure maximum transparency, we inform our shareholders,
financial analysts, the media, and the general public about the
company's situation on a regular basis and in a timely manner. The
annual financial statements of Allianz SE, the Allianz Group's
consolidated financial statements, and the respective management
reports are published within 90 days of the end of each financial year.
Additional information is provided in the Allianz Group's half-yearly
financial reports and quarterly statements. Information is also made
available at the AGM, at press and analysts' conferences, and on the
Allianz Group's website. Our website also provides a financial
calendar listing the dates of major publications and events, such as
annual reports, half-yearly financial reports and quarterly
statements, AGMs, and analyst conference calls as well as financial
press conferences.
In compliance with special legal provisions that apply to
insurance companies, the auditor of the annual financial
statements and of the half-yearly financial report is appointed by
the Supervisory Board, not by the AGM. The audit of the financial
statements covers the individual financial statements of Allianz SE
and also the consolidated financial statements of the
Allianz Group.
COMPLIANCE MANAGEMENT SYSTEM
Integrity is at the core of our compliance program and the basis to
safeguard Allianz's reputation as a trusted financial services provider.
The Compliance function promotes, in partnership with management
and business, a culture of integrity and compliance by:
advising on business conduct that is lawful, ethical, and in the
interest of our customers, shareholders, business partners, and
colleagues;
preventing and detecting violations of laws and regulations
through identifying and managing compliance risks;
advocating Allianz's compliance positions with regulators.
(Dr. Friedrich Eichiner)
by the Supervisory Board
- Chairman: appointed
5 members
AUDIT COMMITTEE
Annual Report 2018 - Allianz Group
18
In August 2017, and based on a Management Board comprising
nine members, the Supervisory Board resolved on a target for the
percentage of women on Allianz SE's Board of Management at 22%
up until 31 December 2018 and 30% up until 31 December 2021. As
the Board of Management has been extended by the appointment
of Mr. de la Sota in April 2018 as an additional member, the percent-
age of women on Allianz SE's Board of Management amounted to
20% as of 31 December 2018. As regards the proportion of women
on the first and second management levels below the Board of
Management, the Board of Management of Allianz SE has set a
target of 20% and 25%, respectively, to be met by 31 December 2018.
As of 31 December 2018, this target was met for the second
management level with a percentage of women of 28%, but could
not be met on the first level with a percentage of 15%. The first
management level below the Board of Management comprises a
very small comparative group of executives. No suitable female
candidates could be identified for the very few positions that became
vacant in the period considered.
Article 17 (2) of the German SE Implementation Act stipulates
that as of 1 January 2016, the share of women and men among the
members of the Supervisory Board of Allianz SE must each total up to
30% at least. The Supervisory Board currently in office fulfils this
requirement as it includes four women (33%) and eight men (67%).
This section outlines the targets set for Allianz SE and the other
companies of the Allianz Group in Germany that are subject to
co-determination (the "subsidiaries concerned") for the Supervisory
Board, the Board of Management, and the two management levels
below the Board of Management.
Information in accordance with the German Act
on Equal Participation of Women and Men in
Executive Positions in the Private and the Public
Sector
A general description of the functions of the Board of Manage-
ment, the Supervisory Board, and their committees can be found in
the Corporate Governance Report starting on ②> page 12, and on
our website at www.allianz.com/corporate-governance.
A description of the composition of the Supervisory Board and its
committees can be found on CD①CHE: page 7 and 9 of the Annual Report.
A description of the composition of the Board of Management can
be found on page 10, while the composition of the Committees of
the Board of Management is described in the Corporate Governance
Report starting on > page 12. This information is also available on
our website at www.allianz.com/corporate-governance.
DESCRIPTION OF THE FUNCTIONS OF THE BOARD OF
MANAGEMENT AND THE SUPERVISORY BOARD AND
OF THE COMPOSITION AND FUNCTIONS OF THEIR
COMMITTEES
The Allianz Group prepares its accounts according to §315e of the
German Commercial Code ("Handelsgesetzbuch HGB") on the
basis of the International Financial Reporting Standards (IFRS)
adopted by the European Union. The annual financial statements of
Allianz SE are prepared in accordance with German law, in particular
the HGB.
privacy and protection training to all Allianz companies worldwide.
This training includes the topic of binding corporate rules, which are
an E.U.-developed standard in data privacy and protection for inter-
national personal data transfers within corporate groups outside the
European Economic Area. Further trainings exist for all relevant
compliance risk areas.
In order to transmit the principles of the Code of Conduct and the
internal compliance programs based on these principles, Allianz has
implemented interactive training programs around the world. These
provide practical guidelines that enable employees to make their
own decisions based on the values of the Allianz Group. Training
programs comprise in-person and e-learning trainings and are
delivered in several languages.
COMPLIANCE TRAINING
A major component of the Allianz Group's compliance program is a
whistleblower system that allows employees and third parties to alert
the relevant compliance department confidentially about irregulari-
ties. No employee voicing concerns about irregularities in good faith
needs to fear retribution, even if the concerns later turn out to be
unfounded. Third parties can contact the compliance department via
an electronic mailbox on our website at: :D:D:D:D:D: www.allianz.com/
complaint-system.
WHISTLEBLOWING
Allianz SE's central Group Compliance function has set up internal
guidelines for the following identified compliance risk areas: anti-
bribery and anti-corruption, anti-money laundering and anti-
terrorism financing, economic sanctions compliance, capital markets
compliance, sales compliance/customer protection, antitrust compli-
ance, internal fraud, data privacy, and US Foreign Account Tax Com-
pliance Act (FATCA). For further information on these compliance risk
areas, please refer to the Combined Separate Non-Financial Report
on > page 48 and the Sustainability Report on our website at
> www.allianz.com/sustainability.
COMPLIANCE PROGRAMS
Our Code of Conduct for Business Ethics and Compliance and the
internal Compliance policies and guidelines derived from it provide
all employees, managers, and executive board members with clear
and practical guidance, enabling them to act in line with the values of
the Allianz Group. The standards of conduct established by the Code
of Conduct are binding for all employees worldwide and build the
basis for our compliance programs. The Code of Conduct is available
on our website at > www.allianz.com/corporate-governance.
CODE OF CONDUCT
Moreover, Allianz SE's central Group Compliance function is
responsible in close cooperation with local compliance functions -
for ensuring the effective implementation and monitoring of the
compliance program within the Allianz Group, as well as for investi-
gating potential compliance infringements. As a key governance
function, the Compliance function further conducts the advisory, risk
identification and assessment, monitoring, and early-warning tasks
required under the Solvency II regime.
accepting and complying with European and international standards
and applicable laws related to relevant compliance risk areas, Allianz
aims to avoid the risks that arise from non-compliance. To enhance
our understanding of compliance issues and share best practices, we
work with organizations such as the German Institute for Compliance
(DICO), the Global Insurance Chief Compliance Officers Forum (CCO
Forum), and the S20 - The Sponsors' Voice.
B_Corporate Governance
17
Annual Report 2018 - Allianz Group
Compliance with all applicable laws, rules, and regulations in all
countries in which the Allianz Group operates, as well as with internal
policies and guidelines, is key. The global compliance program
coordinated by Allianz SE's Group Compliance function supports our
employees, managers and executive board members to act responsibly
and with integrity in all situations. We participate in the United
Nations Global Compact, the world's largest and most important
initiative for responsible corporate leadership, and respect the Guide-
lines of the Organization for Economic Cooperation and Development
(OECD Guidelines) for Multinational Enterprises in that we integrate
sustainability and corporate responsibility into our business. By
An anti-corruption training is compulsory for all Allianz employ-
ees worldwide. Moreover, in 2018 we deployed a mandatory data
100
Accounting and auditing
Shareholders exercise their rights at the Annual General Meeting.
When adopting resolutions, each share carries one vote. Shareholders
can follow the AGM's proceedings on the internet and be represented
by proxies. These proxies exercise voting rights exclusively on the
basis of instructions given by the shareholder. Shareholders are also
able to cast their votes via the internet in the form of online voting.
Allianz SE regularly promotes the use of internet services.
Each member of the Supervisory Board must ensure that they have sufficient time to dedicate
to the proper fulfilment of the mandate of this Supervisory Board position.
4. Time of availability
It has to be considered that the possible emergence of conflicts of interests in individual cases cannot
generally be excluded. Potential conflicts of interest must be disclosed to the Chairman of the
Supervisory Board and will be resolved by appropriate measures.
Applying such definition, at least eight members of the Supervisory Board shall be independent. In
case shareholder representatives and employee representatives are viewed separately, at least four
of each should be independent.
Regarding employee representatives, the mere fact of employee representation and the existence
of a working relationship with the company shall not in itself affect the independence of the
employee representatives.
Members of the Supervisory Board of Allianz SE in office for more than 15 years shall not be
deemed independent.
- Former members of the Allianz SE Board of Management shall not be deemed independent
during the mandatory corporate law cooling-off period.
To further specify the definition of independence, the Supervisory Board of Allianz SE states the
following:
The GCGC defines a person as independent who, in particular, does not have any business or
personal relations with Allianz SE or its executive bodies, a controlling shareholder, or an
enterprise associated with the latter, which may cause a substantial and not merely temporary
conflict of interest.
3. Independence
- knowledge of accounting and risk management basics.
- adequate expertise in the regulatory provisions material for Allianz SE (supervisory law,
including Solvency II regulation, corporate and capital markets law, corporate governance);
- ability to assess the business risks;
adequate expertise in the insurance and finance sector or comparable relevant experience and
expertise in other sectors;
adequate expertise in all business areas;
The members of the Supervisory Board must have the expertise and experience necessary for a
diligent and autonomous exercise of the Allianz SE Supervisory Board mandate, in particular for
exercising control of and giving advice to the Board of Management as well as for the active
support of the development of the company. This comprises in particular:
2. Fitness
The members of the Supervisory Board must be proper as defined by the regulatory provisions. A
person is assumed to be proper as long as no facts are to be known which may cause impropriety.
Therefore, no personal circumstances shall exist which according to general experience - lead to
the assumption that the diligent and orderly exercise of the mandate may be affected (in particular
administrative offenses or violation of criminal law, esp. in connection with commercial activity).
1. Propriety
I. Requirements relating to the individual members of the Supervisory Board
These objectives take into account the regulatory requirements for the composition of the Supervisory
Board as well as the relevant recommendations of the German Corporate Governance Code
("GCGC"). In addition to the requirements for each individual member, a profile of skills and expertise
("Kompetenzprofil") as well as a diversity concept are provided for the entire Supervisory Board.
"The aim of Allianz SE's Supervisory Board is to have members who are equipped with the necessary
skills and competence to properly supervise and advise Allianz SE's management. Supervisory Board
candidates should possess the professional expertise and experience, integrity, motivation and
commitment, independence and personality required to successfully carry out the responsibilities of a
Supervisory Board member in a financial services institution with international operations.
Objectives of Allianz SE's Supervisory Board regarding its composition
The objectives for the composition of the Supervisory Board in the
version of August 2017, as specified to implement a recommendation
by the Code, are set out below. In addition to the skills profile for the
OBJECTIVES OF THE SUPERVISORY BOARD
REGARDING ITS COMPOSITION
B_Corporate Governance
Annual Report 2018 - Allianz Group
14
100
5/5
In addition to the mandatory mandate limitations and the GCGC recommendation for active
Management Board members of listed companies (max. three mandates), the common capital
markets requirements shall be considered.
With respect to the Allianz SE mandate, the members shall ensure that
- they can attend at least four, usually six ordinary Supervisory Board meetings per year, each of
which requires adequate preparation;
- they have sufficient time for the audit of the annual and consolidated financial statements;
they can attend the General Meeting;
Annual General Meeting
Members of the Board of Management and the Supervisory Board
are obliged by the E.U. Market Abuse Directive to disclose to both
Allianz SE and the German Federal Financial Supervisory Authority
any transactions involving shares or debt securities of Allianz SE or
financial derivatives or other instruments based on them, as soon as
the value of the securities acquired or divested by the member
amounts to five thousand Euros or more within a calendar year. These
disclosures are published on our website at::D:D:D:D:D: www.allianz.com/
directorsdealings.
Directors' dealings
The composition of the Supervisory Board of Allianz SE reflects these
objectives. According to the assessment by the Supervisory Board, all
shareholder representatives, i.e. Ms. Boissard, Ms. Bosse as well as Mr.
Diekmann, Dr. Eichiner, Mr. Hainer and Mr. Snabe, are independent
within the meaning of the objectives (see No. 1.3). With four female
and eight male Supervisory Board members, the current legislation
for equal participation of women and men in leadership positions
(statutory gender quota of 30%) is being met. In addition, the Super-
visory Board has five members with international backgrounds. The
skills profile is also met by all current members of the Supervisory
Board. The current composition of the Supervisory Board and its
committees is described on > page 7.
B_Corporate Governance
15
Annual Report 2018 - Allianz Group
In order to provide the Board with the most diverse sources of experience and specialist
knowledge possible, the members of the Supervisory Board shall complement each other with
respect to their background, professional experience, and specialist knowledge."
For Allianz SE as a Societas Europaea, the agreement concerning the participation of employees in
Allianz SE provides the following: Allianz employees from different EU member states be
considered in the allocation of employee representatives' Supervisory Board seats.
At least four of the members must, on the basis of their origin or function, represent regions or
cultural areas in which Allianz SE conducts significant business.
The Supervisory Board shall be composed of at least 30% women and at least 30% men. The
representation of women is generally considered to be the joint responsibility of the shareholder
and employee representatives.
To promote an integrative cooperation among the Supervisory Board members, the Supervisory
Board aims at an adequate diversity with respect to gender, internationality, different occupational
backgrounds, professional expertise, and experience:
2. Diversity concept
- specialist expertise or experience in other economic sectors;
managerial or operational experience.
The AGM elects the shareholder representatives of the
Supervisory Board and approves the actions taken by the Board of
Management and the Supervisory Board. It decides on the use of
profits, capital transactions, the approval of intercompany agree-
ments, the remuneration of the Supervisory Board, and changes to
the company's Statutes. In accordance with European regulations
and the Statutes, changes to the Statutes require a two-thirds
majority of votes cast in case less than half of the share capital is
represented in the AGM. Each year, an ordinary AGM takes place at
which the Board of Management and the Supervisory Board give an
account of the preceding financial year. For special decisions, the
German Stock Corporation Act provides for the convening of an
extraordinary AGM.
at least one member with considerable experience in the fields of insurance and financial services;
at least one member with comprehensive expertise in the fields of accounting or auditing;
In addition to the expertise-related requirements for the individual members, the following shall
apply with respect to the expertise and experience of the entire Supervisory Board:
1. Profile of skills and expertise for the entire Supervisory Board
II. Requirements for the entire Supervisory Board
According to regulatory provisions, no more than two former Allianz SE Management Board
members shall be members of the Supervisory Board.
Former Allianz SE Management Board members are subject to the mandatory corporate law cooling-
off period of two years.
7. Former Allianz SE Management Board members
The continuous period of membership for any member of the Supervisory Board should, as a rule,
not exceed 15 years.
The members of the Supervisory Board shall, as a rule, not be older than 70 years of age.
6. Term of membership
5. Retirement age
they can attend extraordinary meetings of the Supervisory Board or of a special committee to
deal with special matters as and when required.
depending on possible membership in one or more of the current six Supervisory Board special
committees, this involves extra time planning to participate in these Committee meetings and do
the necessary preparation for these meetings; this applies in particular for the Audit and risk
Committees;
The following requirements and objectives apply to the composition of Allianz SE's Supervisory
Board:
Employee representation within Allianz SE according to the Agreement concerning the Participation
of Employees in Allianz SE contributes to the diversity of work experience and cultural background.
Pursuant to the provisions of the German SE Participation Act (SEBG), the number of women and
men appointed as German employee representatives should be proportional to the number of
women and men working in the German companies. However, the Supervisory Board does not have
the right to select the employee representatives.
overall Supervisory Board, also to be established due to a new
recommendation of the Code, the diversity concept in accordance
with the legislation regarding the implementation of the E.U. guideline
as regards the disclosure of non-financial and diversity information
(CSR Directive) is also included:
- familiarity of members in their entirety with the insurance and financial services sector;
adequate expertise of the entire board with respect to investment management, insurance
actuarial practice, and accounting;
Membership in other statutory supervisory boards
-Approval of the assumption of other mandates
by Board of Management members
Insurance Iberia & Latin America
100
The Nomination Committee did not convene any meetings in the
2018 financial year.
Frank Kirsch (Member as of 1 September 2018)
2/2
100
Jürgen Lawrenz
6/6
100
Rolf Zimmermann (Vice Chairman and Member until 31 August 2018)
4/4
100
STANDING COMMITTEE
Michael Diekmann (Chairman)
5/5
100
Jean-Claude Le Goaër (Member as of 1 September 2018)
2/2
100
Gabriele Burkhardt-Berg (Member until 31 August 2018)
3/3
100
Herbert Hainer
5/5
100
Jürgen Lawrenz
5/5
100
Jim Hagemann Snabe
5/5
6/6
100
Godfrey Hayward
Herbert Hainer
2/2
100
Sophie Boissard
6/6
100
Dr. Friedrich Eichiner
2/2
100
Christine Bosse
6/6
100
Jürgen Lawrenz (Member as of 1 September 2018)
1/1
100
Jean-Jacques Cette (Member until 31 July 2018)
3/3
100
Rolf Zimmermann (Member until 31 August 2018)
1/1
100
Dr. Friedrich Eichiner
6/6
100
Jean-Claude Le Goaër (Member as of 1 August 2018)
3/3
100
Martina Grundler
6/6
100
6/6 100
1_Generally, we regard memberships in other supervisory bodies as "comparable" if the company is listed on a stock exchange or has more than 500 employees.
Membership in other statutory supervisory boards
and SE administrative boards in Germany
Membership in Group bodies
Allianz Technology SE
Employee of Allianz Technology SE
Membership in comparable¹ supervisory bodies
P/F BankNordik (Chairwoman)
Member of various Supervisory Boards
CHRISTINE BOSSE
Membership in other statutory supervisory boards
and SE administrative boards in Germany
Curanum AG (Korian Group company, Chairwoman)
Membership in comparable¹ supervisory bodies
Segesta SpA (Korian Group company, Chairwoman)
Senior Living Group NV (Korian Group company)
Chairwoman of the Board of Management of
Korian S.A.
SOPHIE BOISSARD
until 2 March 2018
GABRIELE BURKHARDT-BERG
Vice Chairwoman since 1 September 2018
Chairwoman of the Group Works Council of Allianz SE
Membership in other statutory supervisory boards
and SE administrative boards in Germany
Allianz Deutschland AG
Chairman of the (European) SE Works Council
of Allianz SE
Vice Chairman
until 31 August 2018
ROLF ZIMMERMANN
Membership in other statutory supervisory boards
and SE administrative boards in Germany
Siemens AG (Chairman since 31 January 2018)
Membership in comparable¹ supervisory bodies
A.P. Møller-Mærsk A/S (Chairman)
Member of various Supervisory Boards
Vice Chairman
JIM HAGEMANN SNABE
Siemens AG
Fresenius SE & Co. KGaA
Fresenius Management SE
BASF SE
and SE administrative boards in Germany
Membership in other statutory supervisory boards
Member of various Supervisory Boards
Chairman
MICHAEL DIEKMANN
A_To our Investors
OF THE SUPERVISORY BOARD
MANDATES OF THE MEMBERS
PERSONNEL COMMITTEE
TDC A/S
until 14 May 2018
JEAN-JACQUES CETTE
until 31 July 2018
JÜRGEN LAWRENZ
Allianz Deutschland AG
Membership in Group bodies
Membership in other statutory supervisory boards and
SE administrative boards in Germany
Employee of Allianz Beratungs- und Vertriebs-AG
since 1 September 2018
FRANK KIRSCH
Employee of Allianz Insurance plc
GODFREY ROBERT HAYWARD
until 3 October 2018
Sportradar AG (Chairman)
Membership in comparable¹ supervisory bodies
Accenture Plc
FC Bayern München AG
Member of various Supervisory Boards
Membership in other statutory supervisory boards
and SE administrative boards in Germany
Deutsche Lufthansa AG
Michael Diekmann
HERBERT HAINER
MARTINA GRUNDLER
Allianz France S.A.
Membership in comparable¹ supervisory bodies
Membership in Group bodies
Employee of Allianz Informatique G.I.E.
since 1 August 2018
JEAN-CLAUDE LE GOAËR
Membership in comparable¹ supervisory bodies
Festo Management AG
Membership in other statutory supervisory boards
and SE administrative boards in Germany
Festo AG
Member of various Supervisory Boards
DR. FRIEDRICH EICHINER
Allianz France S.A.
Membership in comparable¹ supervisory bodies
Membership in Group bodies
of Allianz France S.A.
Chairman of the Group Works Council
National Representative Insurances, ver.di Berlin
100
6/6
Jim Hagemann Snabe (Vice Chairman)
UniCredit S.p.A.
Membership in comparable¹ supervisory bodies
Asia Pacific
Insurance Western & Southern Europe,
SERGIO BALBINOT
Allianz Deutschland AG
and SE administrative boards in Germany
Membership in Group bodies
Membership in other statutory supervisory boards
Chairman of the Board of Management
OLIVER BÄTE
OF THE BOARD OF MANAGEMENT
MANDATES OF THE MEMBERS
A_To our Investors
9
Annual Report 2018 - Allianz Group
RISK COMMITTEE
5 members
- Chairman: appointed by the Supervisory
Board (Michael Diekmann)
- Three shareholder representatives
(in addition to Michael Diekmann:
Christine Bosse, Dr. Friedrich Eichiner)
Two employee representatives (Godfrey
Hayward, Frank Kirsch)
PERSONNEL COMMITTEE
3 members
- Chairman: Chairman
of the Supervisory Board (Michael
Diekmann)
One further shareholder representative
(Herbert Hainer)
- One employee representative (Gabriele
Burkhardt-Berg)
NOMINATION COMMITTEE
3 members
Dr. Friedrich Eichiner: Sophie Boissard,
Michael Diekmann)
- Chairman: Chairman
of the Supervisory Board (Michael
Diekmann)
Bajaj Allianz General Insurance Co. Ltd.
Bajaj Allianz Life Insurance Co. Ltd.
Membership in Group bodies
Allianz France S.A.
since 1 April 2018
Human Resources
Legal, Compliance, Mergers & Acquisitions
DR. HELGA JUNG
Allianz Life Insurance Company of North America
(Chairwoman)
Membership in comparable¹ supervisory bodies
Membership in Group bodies
Asset Management, US Life Insurance
JACQUELINE HUNT
until 21 November 2018
Allianz S.p.A
Membership in comparable¹ supervisory bodies
Membership in Group bodies
since 12 March 2018
Allianz Versicherungs-AG
since 12 March 2018
- Two further shareholder representatives
(Christine Bosse, Jim Hagemann Snabe)
Allianz Private Krankenversicherungs-AG
Allianz Investment Management SE (Chairman)
Membership in Group bodies
Membership in other statutory supervisory boards
and SE administrative boards in Germany
Investment Management
DR. GÜNTHER THALLINGER
Allianz Partners S.A.S.
Membership in comparable¹ supervisory bodies
Membership in Group bodies
Membership in other statutory supervisory boards
and SE administrative boards in Germany
Volkswagen Autoversicherung AG
Membership in Group bodies
Allianz Technology SE (Chairman)
until 31 March 2018
Allianz Partners
Operations,
DR. CHRISTOF MASCHER
Allianz Yasam ve Emeklilik A.S.
Allianz Sigorta A.S.
Allianz Lebensversicherungs-AG
until 31 March 2018
TECHNOLOGY COMMITTEE
- Chairman: appointed by the Supervisory
Board (Jim Hagemann Snabe)
2/2
100
Dr. Friedrich Eichiner
2/2
100
Godfrey Hayward
2/2
100
Frank Kirsch (Member as of 1 September 2018)
1/1
100
Presence
%
Jürgen Lawrenz (Member until 31 August 2018)
1/1
100
PLENARY SESSIONS OF THE SUPERVISORY BOARD
TECHNOLOGY COMMITTEE
Michael Diekmann (Chairman)
6/6 100
Jim Hagemann Snabe (Chairman)
2/2
100
Gabriele Burkhardt-Berg (Vice Chairwoman as of 1 September 2018)
6/6
100
Gabriele Burkhardt-Berg
2/2
100
Christine Bosse
100
2/2
Michael Diekmann (Chairman)
- Three shareholder representatives
(in addition to Jim Hagemann Snabe:
Michael Diekmann, Dr. Friedrich Eichiner)
- Two employee representatives (Gabriele
Burkhardt-Berg, Jürgen Lawrenz)
As of 31 December 2018
Responsibilities
-Approval of certain transactions which require the
approval of the Supervisory Board, e.g. capital
measures, acquisitions, and disposals of
participations
- Preparation of the Declaration of Conformity
pursuant to § 161 "Aktiengesetz" (German Stock
Corporation Act) and checks on corporate
governance
- Preparation of the efficiency review of the
Supervisory Board
- Initial review of the annual Allianz SE and consoli-
dated financial statements, management reports
(incl. Risk Report) and the dividend proposal,
review of half-yearly reports or, where applicable,
quarterly financial reports or statements
-Monitoring of the financial reporting process,
the effectiveness of the internal control and audit
system and legal and compliance issues
-Monitoring of the audit procedures, including
the independence of the auditor and the services
additionally rendered, awarding of the audit
contract and determining the focal points of the
audit
- Monitoring of the general risk situation and special
risk developments in the Allianz Group
-Monitoring of the effectiveness of the risk
management system
- Initial review of the Risk Report and other risk-
related statements in the annual financial
statements and management reports of Allianz SE
and the Allianz Group, informing the Audit
Committee of the results of such reviews
- Preparation of the appointment of Board of
Management members
- Preparation of plenary session resolutions on the
compensation system and the overall
compensation of Board of Management members
- Conclusion, amendment, and termination of service
contracts of Board of Management members
unless reserved for the plenary session
5 members
- Long-term succession planning for the Board of
Management
- Establishment of selection criteria for shareholder
representatives on the Supervisory Board in
compliance with the Code's recommendations on
the composition of the Supervisory Board
- Selection of suitable candidates for election to the
Supervisory Board as shareholder representatives
- Regular exchange regarding technological
developments
- In-depth monitoring of the Board of Management's
technology and innovation strategy
- Support of the Supervisory Board in monitoring the
implementation of the Board of Management's
technology and innovation strategy
Annual Report 2018 - Allianz Group
13
B_Corporate Governance
PUBLICATION OF DETAILS OF MEMBERS'
PARTICIPATION IN MEETINGS
The Supervisory Board considers it good corporate governance to
publish the details of individual members' participation in plenary
sessions and committee meetings:
Publication of details of members' participation in meetings
Presence
%
RISK COMMITTEE
- Setting of concrete objectives for the composition
of the Supervisory Board
- Three shareholder
representatives (in addition to
11
2_The MTB figure included in the Actual Grant column shows the annual accrual before adjustment by the sustainability assessment. The payout 2018 figure includes the 2018 allocation and the accruals from the performance years 2016 and 2017, as
adjusted by the sustainability assessment. The MTB 2016 - 2018 is paid out in spring 2019.
2017
2018
Target
Target
Min
Max
Base salary
1,125
1,313
1,313
1,313
1,125
1,313
1,125
1,313
Perquisites
32
1,329
1,157
1,329
1,329
1,329
1,157
2018
Total fixed compensation
32
17
32
17
17
17
17
1,157
2017
2017
20193
Sustainability assessment & payout
Annual Report 2018 - Allianz Group
B_Corporate Governance
Equity-related remuneration
Equity-related remuneration is a virtual share award referred to as
"Restricted Stock Units" (RSUs) with a deferred payout after four
years. The grant value of the RSUs allocated equals the annual bonus
of the previous year, i.e. the grant value is also capped at 150% of the
respective target level. The number of RSUs allocated is derived by
dividing the grant value by the fair value of an RSU at the time of
grant.
The fair value is calculated based on the ten-trading-day aver-
age Xetra closing price of the Allianz stock for the ten days following
the annual financial press conference. As RSUs are virtual stock with-
out dividend payments during the vesting period, the average Xetra
closing price is reduced ¹ by the net present value of the expected
future dividend payments during the vesting period. The expected
dividend stream is discounted with the swap rates as of the valuation
day. Following the end of the four-year vesting period, the company
makes a cash payment based on the number of RSUs granted, as
well as on the ten-day average Xetra closing price of the Allianz stock
following the annual financial press conference in the year of expiry
of the respective RSU plan. To avoid extreme payouts, the RSU pay-
out level is capped at 200% of the grant price.2 Outstanding RSU
holdings are forfeited, should a Board member leave at his/her own
request or be terminated for cause.
PENSIONS AND SIMILAR BENEFITS
To provide competitive and cost-effective retirement and disability
benefits, company contributions to the current pension plan "My
Allianz Pension" are invested in a fund with a guarantee for the con-
tributions paid, but no further interest guarantee. Upon retirement,
the accumulated capital is paid out as a lump sum or, alternatively,
can be converted into a lifetime annuity. Each year the Supervisory
Board decides whether and to what extent a budget is provided, also
taking into account the target pension level. This budget includes a
risk premium paid to cover death and disability. The earliest age a
pension can be drawn is 62, except for cases of occupational or
general disability for medical reasons. In these cases, it may become
payable earlier and an increase by projection may apply. In the case
of death, a lump sum - again convertible into an annuity - will be
paid to dependents. Should Board membership cease before retire-
ment age for other reasons, the accrued pension rights are main-
tained if vesting requirements are met.
For rights accrued before 2015, the guaranteed minimum interest
rate remains at 2.75% and the retirement age is still 60.
From 1 January 2005 until 31 December 2014, most Board of
Management members participated in a contribution-based system
which was frozen as of 31 December 2014, now only covering disability
and death. Before 2005, a defined-benefit plan provided fixed benefits
not linked to base salary increases. Benefits generated under this plan
were frozen at the end of 2004. Additionally, most Board members
participated in Allianz Versorgungskasse VVaG (AVK), a contribution-
based pension plan, and in Allianz Pensionsverein e.V. (APV); both these
plans were closed for new entries on 1 January 2015.
PERQUISITES
Perquisites mainly consist of contributions to accident and liability
insurances and the provision of a company car. Perquisites are not
linked to performance. Each member of the Board of Management is
responsible for paying the income tax due on these perquisites. The
Supervisory Board regularly reviews the level of perquisites.
1 In addition, the fair value of the RSUs is subject to a small reduction of a few Euro cents due to the 200% cap on the
RSU payout. This reduction is calculated based on a standard option pricing formula.
2_The relevant share price used to determine the final number of RSUS granted and the 200 % cap is available only after
sign-off by the external auditors.
Annual Report 2018 - Allianz Group
25
Payout¹
Actual grant
Grant
B_Corporate Governance
Oliver Bäte (Appointed: 01/2008; CEO since 05/2015)
€ thou (total might not sum up due to rounding)
2018
Individual remuneration: 2018 and 2017
26
26
All variable components are granted in accordance with the rules
and conditions of the "Allianz Sustained Performance Plan" (ASPP).
Depending on individual and company performance, the amounts
actually paid can vary between 0% and 150% of the respective target
levels. If performance is rated at 0% no variable component will be
granted. Consequently, the minimum total direct compensation for a
regular member of the Board of Management will equal the base
salary of € 750 thou (excluding perquisites and pension contributions),
while the maximum total direct compensation (excluding perquisites
and pension contributions) is € 4,125 thou: a € 750 thou base salary
plus € 3,375 thou (i.e., 150% of the sum of all three variable compen-
sation components at target level). The Chairman of the Board's
maximum total direct compensation (excluding perquisites and
pension contributions) is €7,219 thou: a € 1,313 thou base salary plus
€ 5,906 thou (150% of the sum of all three variable compensation
components at target level).
The following remuneration disclosure, which is based on and com-
pliant with the German Corporate Governance Code, shows the
individual board members' remuneration for 2017 and 2018 including
fixed and variable remuneration and pension service cost. The
"Grant" column below shows the remuneration at target, minimum,
and maximum levels. The "Payout" column discloses the 2017 and
2018 payments. The base salary, annual bonus, and perquisites are
linked to the reported performance years, 2017 and 2018, whereas
the Group Equity Incentive (GEI) and Allianz Equity Incentive (AEI)
payouts result from grants related to the performance years 2010,
2013 and 2014. To enhance transparency of the remuneration related
to the performance year 2017 and 2018, the additional column
"Actual grant" includes the 2017 and 2018 fixed compensation, the
annual bonus paid for 2017 and 2018, the MTB 2016-2018 tranche
accrued for the performance year 2017 and 2018 and the fair value
of the RSU grant value for the performance year 2017 and 2018. The
2018 payout is significantly higher than in 2017, due to the fact that
the payout of the MTB 2016 - 2018 is disclosed. This comprises pay-
ments for three performance years in total.
REMUNERATION FOR 2018
B_Corporate Governance
Annual Report 2018 - Allianz Group
1,329
Annual variable compensation
Annual bonus
Pensions service cost
622
696
696
696
622
696
622
696
Total
5,154
5,963
2,025
7,931
5,930
6,868
4,983
Min
Target
Target
2018
2017
2018
9,634
2017
2017
Payout¹
Actual grant
Grant
Sergio Balbinot (Appointed: 01/2015)
10,330
2018
4,361
6,172
5,308
1,313
1,125
AEI 2014/RSU³
AEI 2018/RSU³
AEI 2019/RSU³
MTB (2016-2018)²
1,969
Deferred compensation
1,384
1,614
1,384
1,969
1,313
1,125
1,614
0%
1,384
1,313
7,235
1,329
5,267
4,532
Total
GEI 2010/SAR
1,614
1,820
AEI 2013/RSU³
4,828
1,384
1,125
1,614
1,969
1,862
Min: 0
Final payout
24
based upon Article 59(1) and (2) of the SE Regulation. A larger
majority is required, inter alia, for a change in the corporate object or
the relocation of the registered office to another E.U. member state
(§51 SEAG). The Supervisory Board may alter the wording of the
Statutes (§ 179 (1) AktG and § 10 of the Statutes).
AUTHORIZATION OF THE BOARD OF MANAGEMENT
TO ISSUE AND REPURCHASE SHARES
The Board of Management is authorized to issue shares as well as to
acquire and use treasury shares as follows:
It may increase the company's share capital on or before
8 May 2023, with the approval of the Supervisory Board, by issuing
new registered no-par value shares against contributions in cash
and/or in kind, on one or more occasions:
Up to a total of € 334,960,000 (Authorized Capital 2018/1): In case
of a capital increase against cash contribution, the Board of
Management may exclude the shareholders' subscription rights
for these shares with the consent of the Supervisory Board (i) for
fractional amounts, (ii) in order to safeguard the rights pertaining
to holders of convertible bonds or bonds with warrants, including
mandatory convertible bonds, and (iii) in the event of a capital in-
crease of up to 10%, if the issue price of the new shares is not
20
20
Annual Report 2018 - Allianz Group
B_Corporate Governance
-
significantly below the stock market price. The Board of Man-
agement may furthermore exclude the shareholders' subscription
rights with the consent of the Supervisory Board in the event of a
capital increase against contributions in kind.
Up to a total of € 15,000,000 (Authorized Capital 2018/II): The
shareholders' subscription rights are excluded. New shares may
only be issued to employees of Allianz SE and its Group compa-
nies.
The Board of Management may buy back and use Allianz
shares for other purposes until 8 May 2023 as per authorization of
the General Meeting of 9 May 2018 (§ 71 (1) No. 8 AktG). Together
with other treasury shares that are held by Allianz SE, or which are
attributable to it under §§71a et seq. AktG, such shares may not
exceed 10% of the share capital at any time. The shares acquired
pursuant to this authorization may be used, under exclusion of the
shareholders' subscription rights, for any legally admissible purpos-
es, in particular those specified in the authorization. Furthermore,
the acquisition of treasury shares under this authorization may also
be carried out using derivatives such as put options, call options,
forward purchases, or a combination thereof, provided such deriva-
tives do not relate to more than 5% of the share capital.
Domestic or foreign banks that are majority-owned by
Allianz SE may buy and sell Allianz shares for trading purposes
(§71 (1) No. 7 and (2) AktG) under an authorization of the General
Meeting valid until 8 May 2023. The total number of shares acquired
thereunder, together with treasury shares held by Allianz SE or
attributable to it under §§ 71a et seq. AktG, shall at no time exceed
10% of the share capital of Allianz SE.
ESSENTIAL AGREEMENTS OF ALLIANZ SE
WITH CHANGE-OF-CONTROL CLAUSES AND
COMPENSATION AGREEMENTS PROVIDING FOR
TAKEOVER SCENARIOS
The following essential agreements of the company are subject to a
change-of-control condition following a takeover bid:
-
This remuneration report covers the remuneration arrangements for
the Board of Management and the Supervisory Board of Allianz SE.
B_Corporate Governance
REMUNERATION REPORT
Annual Report 2018 - Allianz Group
22
Under the Allianz Sustained Performance Plan (ASPP), Re-
stricted Stock Units (RSUs) – i.e. virtual Allianz shares - are granted
to senior management of the Allianz Group worldwide as a stock-
based remuneration component. The conditions for these RSU
contain change-of-control clauses, which apply when a majority of
the voting share capital in Allianz SE is directly or indirectly
acquired by one or more third parties who do not belong to the
Allianz Group, and which provide for an exception from the usual
vesting and exercise periods. In line with the relevant general condi-
tions, the company will release the RSUs to plan participants on the
day of the change of control, without observing any vesting period
that would otherwise apply. The cash amount payable per RSU
must equal the average market value of the Allianz share and be
equal to or above the price offered per Allianz share in a preceding
tender offer. By providing for the non-application of the vesting
period in the event of a change of control, the terms take into
account the fact that the conditions influencing the share price are
substantially different when there is a change of control.
Amendments to the Statutes must be adopted by the General
Meeting. §13 (4) of the Statutes of Allianz SE stipulates that, unless
this conflicts with mandatory law, changes to the Statutes require a
two-thirds majority of the votes cast, or, if at least one half of the
share capital is represented, a simple majority of the votes cast. The
Statutes thereby make use of the option set out in § 51 of the SE
Implementation Act ("SE-Ausführungsgesetz SEAG"), which is
A change-of-control clause in the service contracts of the
members of Allianz SE's Board of Management provides that, if
within twelve months after the acquisition of more than 50% of the
company's share capital by one shareholder or several sharehold-
ers acting in concert (change of control) the appointment as a
member of the Board of Management is revoked unilaterally by the
Supervisory Board, or if the mandate is ended by mutual agree-
ment, or if the Management board member resigns because his or
her responsibilities as a board member are significantly reduced
through no fault of the board member, he or she shall receive his or
her contractual remuneration for the remaining term of the service
contract, but for the purpose hereof limited to two years, in the form
of a one-off payment. The one-off payment is based on the fixed
remuneration plus the variable remuneration, with this basis being
limited, however, to the amount paid for the last fiscal year. This
applies accordingly if, within twelve months of a change of control,
a mandate in the Board of Management comes to an end and is
not extended: The one-off payment will then be granted for the
period between the end of the mandate and the end of the two-
year period following the change of control. For further details,
please refer to the Remuneration Report starting on > page 23.
B_Corporate Governance
Annual Report 2018 - Allianz Group
21
The framework agreements between Allianz SE and the subsidiaries
of various car manufacturers relating to the distribution of car in-
surance by the respective car manufacturers each include a
clause under which each party has an extraordinary termination
right in case there is a change of control of the other party.
Bilateral credit agreements in some cases provide for termination
rights if there is a change of control, mostly defined as the acqui
sition of at least 30% of the voting rights within the meaning of
§29(2) of the German Takeover Act ("Wertpapiererwerbs- und
Übernahmegesetz - WpÜG"). If such termination rights are exer-
cised, the respective credit lines have to be replaced by new credit
lines under conditions then applicable.
Allianz SE is also party to various bancassurance distribution
agreements for insurance products in various regions. These dis-
tribution agreements normally include a clause under which the
parties have an extraordinary termination right in the event of a
change of control of the other party's ultimate holding company.
Shareholder agreements and joint ventures to which Allianz SE is
a party often contain change-of-control clauses that provide, as
the case may be, for the termination of the agreement, or for put
or call rights that one party can exercise with regard to the joint
venture or the target company, if there is a change of control of
the other party.
Our reinsurance contracts, in principle, include a clause under
which both parties to the contract have an extraordinary termina-
tion right, if and when the counterparty merges or its ownership
or control situation changes materially. Agreements with brokers
regarding services connected with the purchase of reinsurance
cover also provide for termination rights in case of a change of
control. Such clauses are standard market practice.
The company has entered into the following compensation
agreements with members of the Board of Management and
certain employees, providing for the event of a takeover bid:
German insurance supervisory law requires that members of the
Board of Management have the reliability and professional compe-
tence needed to manage an insurance company. A person cannot
become a member of the Board of Management if he or she is
already a manager of two other insurance undertakings, pension
funds, insurance holding companies, or insurance special-purpose
vehicles. However, the supervisory authority may permit more than
two such mandates if they are held within the same group (§24 (3) of
the German Insurance Supervision Act ("Versicherungsaufsichtsgesetz
VAG")). The Federal Financial Services Supervisory Authority
("Bundesanstalt für Finanzdienstleistungsaufsicht - BaFin") must be
notified of the intention of appointing a Board of Management
member pursuant to § 47 No. 1 VAG.
According to §5 (1) of the Statutes, the Board of Management
shall consist of at least two persons. The Supervisory Board deter-
mines the number of any additional members. The Supervisory
Board has appointed a Chairman of the Board of Management
pursuant to § 84(2) AktG.
the required members of the Board of Management is missing, the
courts must appoint such member in urgent cases upon the application
of an interested party (§ 85 AktG). The Supervisory Board may dismiss
members of the Board of Management if there is an important
reason (§ 84 (3) AktG).
adequate diversity with regard to educational and professional
background, taking into account the limitations for the Superviso-
ry Board by regulatory requirements (fitness)."
adequate share of members with an international background
(e.g. based on origin or extensive professional experience
abroad), ideally with a connection to the regions in which
Allianz Group is operating;
adequate proportion of women on the Management Board: at
least 30% until 31 December 2021;
-
The Supervisory Board assesses the achievement of such target, inter
alia, on the basis of the following specific indicators:
"For the composition of the Management Board, the Supervisory
Board aims for an adequate "Diversity of Minds". This comprises
broad diversity with regard to gender, internationality, as well as
educational and professional background.
This diversity concept is implemented in the appointment procedure
for members of the Board of Management by the Supervisory Board.
It is ensured that lists of successors will comprise an appropriate per-
centage of female candidates as well as candidates with international
experience. The Personnel Committee takes this into consideration
The Supervisory Board stipulated the following diversity concept for
the Board of Management of Allianz SE in August 2017:
Diversity concepts for the Board of Management
and Supervisory Board
The diversity concept for the Supervisory Board was approved by the
Supervisory Board in August 2017 and included in the objectives for
the composition of the Supervisory Board (see No. 11.2 of the objec-
tives for the composition of the Supervisory Board on ②>> page 15).
The Supervisory Board pursues these objectives, and thus also the
diversity concept, nominating the candidates for the shareholder
representatives. As the employee representatives are appointed
according to different national provisions, there is only limited po-
tential influence to the selection of employee representatives. The
Supervisory Board is currently composed in accordance with the
diversity concept. For details please see the Corporate Governance
Report on page 12.
especially in succession planning. The share of women on the Man-
agement Board is currently 20%. Six members of the Management
Board have international backgrounds. There is an adequate degree
of variety as regards educational and professional background.
With regard to the Supervisory Boards of the subsidiaries con-
cerned, the target quotas for eight out of nine subsidiaries concerned
were set at 30% and the target quota for the remaining subsidiary
concerned was set at 33% until 31 December 2018. All subsidiaries
concerned reached this target. The target quotas for the respective
Board of Management of the subsidiaries concerned were between
11% and 25% (19% on average) and were met by only six of the nine
companies. For the two management levels below the Board of Man-
agement, the respective Boards of Management of the subsidiaries
concerned had set target quotas between 17% and 33% (23% on
average) for the first management level and target quotas
between 18% and 33% (24% on average) for the second management
level below the Board of Management. As of 31 December 2018, the
targets were met by four of the nine subsidiaries concerned at the first
management level, while five of the nine companies met the targets
set for the second management level. Despite increased efforts to
promote women in the Allianz Group and also at the individual
subsidiaries, it was not possible to achieve the targets in these cases,
as it was not always possible to identify suitable female candidates
for all vacant positions.
In the longer term, Allianz aims to place women in at least 30%
of the positions at these two management levels throughout the
Group.
B_Corporate Governance
In accordance with the legislation to implement the European CSR
Directive, the diversity concepts for the Board of Management and
the Supervisory Board, their objectives, implementation, and results
achieved are to be reported for the 2018 financial year.
The report has been prepared in accordance with the require-
ments of the German Commercial Code, the German Accounting
Standard 17, and the International Financial Reporting Standards
(IFRS). It also takes into account the relevant regulatory provisions
and the recommendations contained in the German Corporate Gov-
ernance Code.
Annual Report 2018 - Allianz Group
B_Corporate Governance
The Supervisory Board appoints the members of Allianz SE's Board
of Management for a maximum term of five years (Articles 9(1),
39(2) and 46 of the SE Regulation, §§ 84, 85 AktG and §5(3) of the
Statutes). Reappointments, for a maximum of five years each, are
permitted. A simple majority of the votes cast in the Supervisory
Board is required to appoint members of the Board of Manage-
ment. In the case of a tie vote, the Chairperson of the Supervisory
Board, who pursuant to Article 42 of the SE Regulation must be a
shareholder representative, shall have the casting vote (§8 (3) of the
Statutes). If the Chairperson does not participate in the vote the Vice
Chairperson shall have the casting vote, provided he or she is a
shareholder representative. A Vice Chairperson who is an employee
representative has no casting vote (§8 (3) of the Statutes). If one of
LEGAL AND STATUTORY PROVISIONS APPLICABLE
TO THE APPOINTMENT AND REMOVAL OF MEMBERS
OF THE BOARD OF MANAGEMENT AND TO
AMENDMENTS OF THE STATUTES
There are no shares with special rights conferring powers of control.
SHARES WITH SPECIAL RIGHTS
CONFERRING POWERS OF CONTROL
We are not aware of any direct or indirect interests in the share
capital of Allianz SE that exceed 10% of the voting rights.
INTERESTS IN THE SHARE CAPITAL
EXCEEDING 10% OF THE VOTING RIGHTS
19
Shares acquired by employees of the Allianz Group as part of
the employee stock purchase plan are subject to a lock-up period
which used to be one year in general and was extended to three
years in general under the plan for the fiscal year 2018. This serves
the employee stock purchase plan's aims of tying employees to the
company and letting them benefit from the performance of the
share price. During the lock-up period, employees can exercise their
voting rights or have them exercised.
RESTRICTIONS ON VOTING RIGHTS AND SHARE
TRANSFERS; EXERCISE OF VOTING RIGHTS IN CASE
OF EMPLOYEE EQUITY PARTICIPATIONS
As of 31 December 2018, the share capital of Allianz SE was
€ 1,169,920,000. It was divided into 424,459,661 registered and fully
paid-up shares with no-par value. All shares carry the same rights
and obligations. Each no-par value share carries one vote.
COMPOSITION OF SHARE CAPITAL
The following information is provided pursuant to § 289a (1) and
§315a (1) of the German Commercial Code ("Handelsgesetzbuch -
HGB") and §176 (1) of the German Stock Company Act ("Aktien
gesetz - AktG").
EXPLANATIONS
TAKEOVER-RELATED STATEMENTS AND
Shares may only be transferred with the consent of the company. An
approval duly applied for may only be withheld if this is deemed
necessary in the company's interest on exceptional grounds. The
applicant will be informed of the reasons.
Max
The complete information on Allianz SE Board of Management
remuneration as given below and additional information is provided
on our remuneration website at >> www.allianz.com/remuneration.
GOVERNANCE SYSTEM
The Supervisory Board has assessed the sustainability of the tar-
get performance of the members of the Management Board during
the MTB cycle 2016 - 2018 (sustainability assessment). As a result of
this assessment, the final MTB target achievement has been collec-
tively increased by 10 percentage points for each member of the
current Management Board. By this adjustment, the Supervisory
Board recognizes the sustainable management team performance
reflected, amongst others, in a sustainable solvency ratio develop-
ment and improved sensitivities to risk scenarios.
ILLUSTRATION OF THE PROCESS AND THE UNDERLYING TIMELINE OF THE MTB CYCLE,
FROM TARGET SETTING TO FINAL PERFORMANCE ASSESSMENT¹
€ thou
Sustainability criteria
setting for the three-year
performance period
Dec 2015
Sustainability criteria setting
Year 1
Year 2
Year 3
Accrual:
900
Notional accruals
Accrual:
620
Max: 3,375
150%
Initial accrued
Total 2,250
1_Represents net income attributable to shareholder divided by the average shareholders' equity excluding unrealized
gains/losses on bonds (net of shadow accounting - see note 2 to the Consolidated Financial Statements) at the begin-
ning and the end of the period.
3_Final payout is subject to the sustainability assessment of the Supervisory Board and may vary between 0% - 150% of the cumulative target values independent of the notional accruals.
1_Example based on target values of a regular member of the Board of Management with an annual target of € 750 thou. The accrual is only a notional indication.
2_Actual accrual for the MTB usually equals the annual bonus payout of the respective financial year. Since the performance assessment and the final payout occur
after completion of the performance cycle this value is only a notional indication.
Accrual:
900
Accrual:
620
Performance period
For the MTB, an amount is typically accrued that is identical to the
annual bonus. However, the accrual as such may be subject to
adjustments, for example, if it is foreseeable that the mid-term
sustainability criteria are not met or exceeded. The annual accrual is
capped at 150% of the respective target level.
2018²
2016²
Sustainability
assessment
Accrual:
730
Accrual:
730
Target:
2,250
amounts
20172
Inclusive Meritocracy (including gender diversity and women in
leadership).
Technical Excellence,
Growth Engines,
Digital by Default,
VARIABLE REMUNERATION
The base salary is not performance-based. It is paid in twelve monthly
installments.
BASE SALARY
COMPONENTS AND TARGET SETTING PROCESS
There are four remuneration components in total, which all have the
same weighting: the base salary and three variable components
the annual bonus, the annualized mid-term bonus, and the equity-
related remuneration. The target level of each variable component
does not exceed the base salary, so the total target variable compen-
sation is three times the base salary.
REMUNERATION STRUCTURE,
Board's remuneration in relation to other remuneration levels within
the Allianz Group.
The variable remuneration (annual bonus, mid-term bonus, and
equity-related compensation) is designed to reward performance. A
shortfall of targets may result in the variable compensation dropping
to zero. Two thirds of the variable compensation are a deferred pay-
out after three or four years.
In light of the above, the Supervisory Board determines the structure,
weighting, and level of each remuneration component. In addition,
the Supervisory Board regularly deals with the appropriateness of the
Board of Management's remuneration. For this purpose, we include,
amongst others, remuneration survey data of DAX 30 companies and
international competitors from external consultants. Compensation
levels are oriented towards the third quartile of that peer group,
given Allianz's relative size, complexity, and sustained performance
within that group. Furthermore, when reviewing the adequateness
and appropriateness of the Board of Management's remuneration,
the Supervisory Board takes into account the development of the
Variable remuneration focused on sustainability and aligned
with shareholder interests: A major part of the variable remu-
neration shall reflect longer-term performance with an adequate
deferred payout. Furthermore, a substantial portion is linked to
the performance of the share price.
Alignment of pay and performance: The performance-based,
variable component shall form a significant portion of the overall
remuneration.
Key principles underlying the Board of Management remuneration
are as follows:
REMUNERATION PRINCIPLES
Regarding the activities and decisions taken by the Personnel
Committee and the Supervisory Board, please refer to the Supervisory
Board Report starting on > page 4.
The remuneration of the Board of Management is decided upon by
the entire Supervisory Board, based on proposals prepared by the
Personnel Committee. If required, outside advice is sought from inde-
pendent external consultants. The Personnel Committee and the
Supervisory Board consult with the Chairman of the Board of Man-
agement, as appropriate, in assessing the performance and remu-
neration of Board of Management members. However, the Chairman
of the Board of Management is not present when his own remunera-
tion is discussed.
Support of the Group's strategy: The design of the performance
targets must reflect the Allianz Group's business strategy.
Allianz SE Board of Management remuneration
The payout of variable remuneration is subject to a limit and
capped at 150% of the respective target levels for the annual bonus
and the mid-term bonus, as well as at a 200% increase in value of the
grant price for the equity-related remuneration.
Annual bonus
True Customer Centricity,
"Health" (in line with the Renewal Agenda)
Sustainable improvement/stabilization of return on equity¹,
Compliance with economic capitalization guidance (capitaliza-
tion level and volatility limit).
"Performance"
The mid-term bonus is a variable compensation component with a
deferred payout following a three-year cycle. Sustainable and value-
adding performance is assessed against a predefined criteria
catalog. The current MTB cycle runs from 2016 until 2018 and is
based on the following measurable sustainability criteria:
Mid-term bonus (MTB)
Variable remuneration components may not be paid, or pay-
ment may be restricted, in the case of a breach of the Allianz Code of
Conduct or regulatory Solvency II policies or standards, including risk
limits. Additionally, a reduction or cancellation of variable remunera-
tion may occur if the supervisory authority (BaFin) requires this in
accordance with its statutory powers.
Based on the 2018 target achievement for the Group as a whole
and for the respective business division(s) and/or corporate function(s)
as well as the qualitative performance achieved, total annual bonus
awards range from 109% to 124% of the target bonus, while the
average bonus award amounts to 118% of the target.
B_Corporate Governance
23
Annual Report 2018 - Allianz Group
As part of the assessment of the individual qualitative target
achievement, the personal contribution to the Renewal Agenda is
reviewed alongside behavioral aspects. The latter is framed in a
common standard ("People Letter") designed to drive necessary
change across the Allianz Group, and comprises customer orienta-
tion, collaborative leadership, entrepreneurship, and trust (e.g. with
regard to sustainability, corporate social responsibility, and diversity
as well as integrity).
For Board of Management members with business division re-
sponsibilities, individual quantitative targets comprise operating
profit, net income, Property-Casualty revenues, and Life new-business
value. For Board of Management members with a functional focus,
division-specific quantitative targets are determined based on their
key responsibilities.
The annual bonus depends on performance in the respective finan-
cial year, and is paid out in the following financial year. The target
level of the annual bonus corresponds to the base salary. Perfor-
mance targets comprise Group and individual targets. Group targets
include equally weighted - operating profit and net income. Indi-
vidual performance is assessed against qualitative as well as respon-
sibility-related quantitative targets.
A multi-rater process supports the assessment of the individual
qualitative behavioral targets: For each member of the Board of
Management, feedback is collected from his or her fellow Board
members and his or her direct reports as well as the Chief Executive
Officers of the most important operating entities he or she is in
charge of. Furthermore, they perform a self-assessment.
3_Payout is capped at 200% above grant price. The relevant share price used to determine the fair market value, and hence the final number of RSUs granted, and the 200% cap are only available after sign-off by the external auditors.
4_The equity-related remuneration that applied before 2010 consisted of two vehicles, virtual stock awards known as RSUs, and virtual stock options known as "Stock Appreciation Rights" (SAR). Only RSUs have been awarded as of 1 January 2010.
The remuneration system valid until December 2009 is disclosed in the Annual Report 2009 (starting on page 17). Whereas the RSU grants are automatically exercised at the vesting date, the GEI/SAR grants are exercised by the Board member
within the exercise period following the vesting date. Hence the total payout from SARS depends on the individual decision by the Board member. SARS are released to plan participants upon expiry of the vesting period, assuming all other exercise
hurdles are met. For SARS granted from 2009, the vesting period was four years and the exercise period three years. SARS can be exercised on the condition that the price of the Allianz SE stock is at least 20% above the strike price at the time of
grant. During the term of the plan, at least once on five consecutive trading days the Allianz SE stock must relatively appreciate at least 0.01 percentage points ahead of the appreciation of the Dow Jones EURO STOXX Price Index (600).
5_Pension service cost in accordance with IAS 19: represents the company cost not the actual entitlement nor a payment, however, according to the German Corporate Governance Code the Pension Service Cost is to be included in all columns.
6 Helga Jung received a payment of € 156 thou in 2018 for 25 years of service to Allianz.
Base salary
750
1,078
4,453
3,853
3,789
2,008
4,452
Dr. Helga Jung (Appointed: 01/2012)
Grant
Actual grant
Payout¹
2017
2018
2017
2018
2017
2018
Target
14
Perquisites
750
750
750
750
3,328
750
750
750
Base salary
Max
Min
Target
750
1726
3,335
317
750
750
750
750
550
1,125
923
904
1,125
904
923
2,470
AEI 2013/RSU³
GEI 2010/SAR
Total
3,018
3,011
317
317
317
317
317
317
Total
317
4,135
1,691
3,472
3,536
4,136
761
Pensions service cost
1726
1726
14
1,125
866
866
1,125
866
866
2,846
1,679
1,649
3,014
3,172
922
4,297
3,363
3,520
3,279
6,313
1 In accordance with the German Corporate Governance Code, the annual bonus disclosed for performance year 2018 is paid in 2019 and for performance year 2017 in 2018. The payments for equity-related deferred compensation (GEI and AEI),
however, are disclosed for the year in which the actual payment was made. To reconcile to the Corporate Accounting Standard 17, the total as shown in column "payout" should be adjusted by including the accrual for the AEI 2019/RSU and
excluding any payouts from AEI 2013/RSU, AEI 2014/RSU or GEI 2010/SAR, as applicable.
6,753
3,710
3,961
3,794
4,737
750
441
441
431
441
441
1,362
441
3,612
431
3,445
431
550
750
750
Annual bonus
Annual variable compensation
922
764
922
764
750
922
922
764
Total fixed compensation
1726
14
1726
922
AEI 2014/RSU³
750
866
750
Total
Pensions service cost
Total
GEI 2010/SAR4
AEI 2013/RSU³
1,125
AEI 2014/RSU³
AEI 2019/RSU³
MTB (2016-2018)²
Deferred compensation
866
866
866
AEI 2018/RSU³
AEI 2018/RSU³
AEI 2019/RSU³
MTB (2016 - 2018)²
AEI 2019/RSU³
AEI 2018/RSU³
AEI 2014/RSU³
AEI 2013/RSU³
GEI 2010/SAR4
Total
Pensions service cost
Total
750
750
550
750
1,125
932
932
750
1,125
360
360
3,400
374
3,396
4,793
1,704
3,586
MTB (2016 - 2018)²
3,568
790
3,040
3,022
3,071
932
932
4,165
Deferred compensation
932
932
22
40
22
40
40
40
40
22
750
750
750
750
750
750
Perquisites
360
Total fixed compensation
790
932
932
1,125
50
750
750
772
Annual bonus
790
772
790
772
790
790
Annual variable compensation
750
374
374
750
750
Perquisites
18
11
11
18
11
18
11
Total fixed compensation
768
761
761
761
768
761
Deferred compensation
904
906
23
923
904
750
923
750
750
Annual bonus
Annual variable compensation
761
768
1,125
750
750
750
Individual remuneration: 2018 and 2017
B_Corporate Governance
27
Annual Report 2018 - Allianz Group
3_Payout is capped at 200% above grant price. The relevant share price used to determine the fair market value, and hence the final number of RSUs granted, and the 200% cap are only available after sign-off by the external auditors.
4 The equity-related remuneration that applied before 2010 consisted of two vehicles, virtual stock awards known as RSUs, and virtual stock options known as "Stock Appreciation Rights" (SAR). Only RSUs have been awarded as of 1 January 2010.
The remuneration system valid until December 2009 is disclosed in the Annual Report 2009 (starting on page 17). Whereas the RSU grants are automatically exercised at the vesting date, the GEI/SAR grants are exercised by the Board member
within the exercise period following the vesting date. Hence the total payout from SARS depends on the individual decision by the Board member. SARS are released to plan participants upon expiry of the vesting period, assuming all other exercise
hurdles are met. For SARS granted from 2009, the vesting period was four years and the exercise period three years. SARS can be exercised on the condition that the price of the Allianz SE stock is at least 20% above the strike price at the time of
grant. During the term of the plan, at least once on five consecutive trading days the Allianz SE stock must relatively appreciate at least 0.01 percentage points ahead of the appreciation of the Dow Jones EURO STOXX Price Index (600).
5_Pension service cost in accordance with IAS 19: represents the company cost not the actual entitlement nor a payment, however, according to the German Corporate Governance Code the Pension Service Cost is to be included in all columns.
2 The MTB figure included in the Actual Grant column shows the annual accrual before adjustment by the sustainability assessment. The payout 2018 figure includes the 2018 allocation and the accruals from the performance years 2016 and 2017, as
adjusted by the sustainability assessment. The MTB 2016-2018 is paid out in spring 2019.
€ thou (total might not sum up due to rounding)
1 In accordance with the German Corporate Governance Code, the annual bonus disclosed for performance year 2018 is paid in 2019 and for performance year 2017 in 2018. The payments for equity-related deferred compensation (GEI and AEI),
however, are disclosed for the year in which the actual payment was made. To reconcile to the Corporate Accounting Standard 17, the total as shown in column "payout" should be adjusted by including the accrual for the AEI 2019/RSU and
excluding any payouts from AEI 2013/RSU, AEI 2014/RSU or GEI 2010/SAR, as applicable.
2,078
3,946
3,942
4,525
1,150
360
5,153
360
Jacqueline Hunt (Appointed: 07/2016)
Actual grant
750
750
Base salary
Max
Min
Target
Grant
Target
2017
2018
2017
2018
2017
Payout¹
2018
The company's share capital is conditionally increased by up to
€ 250,000,000 (Conditional Capital 2010/2018). This conditional
capital increase will only be carried out to the extent that the holders
of convertible bonds, bonds with warrants, convertible participation
rights, participation rights, and subordinated financial instruments
issued against cash by Allianz SE or its subsidiaries, based on the
authorizations granted by the General Meeting on 5 May 2010 or
9 May 2018, exercise their conversion or option rights, or that conver-
sion obligations from such bonds are fulfilled, and to such extent that
treasury shares or shares from authorized capital are not used for such
purpose.
Annual Report 2018 - Allianz Group
28
€ thou (total might not sum up due to rounding)
%
of target
ANNUAL BONUS
Starting in 2019, the non-performance-related base salary amounts to
€ 1,706 thou for the Chairman of the Allianz SE Board of Management
BASE SALARY
Long-term incentive (LTI): increase of equity component by 20
percentage points from 25% to 45% based on target allocation
value.
Base salary: increase by 5 percentage points from 25% to 30%
Annual bonus: stable at 25%
In order to foster market alignment and to simplify the remuneration
structure, the mid-term bonus (MTB) is discontinued and variable
compensation now consists of only two components. The weighting
of the compensation components is therefore adjusted in order to
allocate the discontinued MTB target amount, which had a weighting
of 25% of total target compensation (without pension) and in line
with regulatory requirements for deferred variable compensation:
Sustainability check (100% down to 0%)
(LTI)
⚫ Clawback
(up to 3 years)
(up to 100%)
(peer index)
4-year relative
performance
☑
4-year
share price
performance
CEO: 2,559
RBM: 1,463
Long-term
incentive
45%
70%
variable
64%
deferred
• Malus
Individual
contribution factor
☑
Group result
CEO: 1,422
RBM: 813
Annual bonus
Target
in € thou
The LTI percentage of the total target compensation for 2019 as
well as the target amount of € 2,559 thou for the Chairman of the
Allianz SE Board of Management (CEO) and of € 1,463 thou for a
regular board member (RBM) are based on the target allocation
value (as described in detail in the LTI section "Allianz share price
performance" on > Page :)). This differs from the percentages
based on IFRS fair value. Based on IFRS fair values, the equity-related
compensation (which is allocated in the form of Restricted Stock
Performance Units, "RSU") would be higher (assuming that the fair
value is higher than the allocation value).
and €975 thou for a regular board member and is paid in twelve
equal monthly installments.
Annual bonus key features
LTI allocation amount = LTI target amount multiplied with annual bonus target
achievement factor, capped at 150%
LTI key features
Long-term
incentive
(LTI)
45%
Target
in € thou
%
of target
The annual bonus is subject to a limit and capped at 150% of the
target amount.
Annual bonus cap
balances between the financial performance and the health targets
(i.e. non-financial targets). For board members with business-related
division responsibilities, the financial performance considers various
profitability (e.g. operating profit and net income) and productivity
(e.g. expense ratio) indicators for the business division. For board
members with functional focus, division-specific performance targets
are determined based on their key responsibilities. Health targets
take into account customer satisfaction (e.g. NPS), employee en-
gagement (e.g. Allianz Engagement Survey) and leadership quality,
including strategic priorities. The assessment of the individual leader-
ship contributions also includes a review of behavioral aspects, com-
prising customer orientation, collaborative leadership, entrepreneur-
ship, and trust (e.g. with regard to sustainability, corporate social
responsibility, and diversity as well as integrity). To enhance
transparency, the individual contribution factor assessment will be
disclosed per board member.
LONG-TERM INCENTIVE (LTI)
The Group financial target achievement may be adjusted by the
individual contribution factor (ICF). The ICF has a limited range of 0.8
to 1.2 and will be multiplied with the Group financial target achieve-
ment. It is an overall discretionary assessment by the Allianz SE
Supervisory Board and takes into account the results of the business
division and the individual contribution. Thereby the ICF assessment
Individual contribution factor (ICF) (NEW)
Group financial performance targets are comprised of IFRS operating
profit and IFRS net income attributable to shareholders, equally
weighted. Operating profit and net income are the key performance
indicators and steering parameters for the Allianz Group and of high
relevance to investors and analysts. Operating profit is used to evaluate
the performance of the reportable segments as well as of the
Allianz Group as a whole. It highlights the portion of income before
income taxes that is attributable to the ongoing core operations of
the Allianz Group. As net income is the basis of the dividend and
return on equity, the two indicators reflect the overall financial
performance appropriately.
Group financial targets
B_Corporate Governance
Annual Report 2018 - Allianz Group
36
will show the performance corridor for the Group financial target
achievement as well as the overall individual target achievement per
board member.
With the new annual bonus structure, the number of parameters
driving the annual bonus have been reduced significantly, which
supports simplicity and transparency. From 2019 onwards, the annual
bonus is based on the achievement of Group financial targets, adjusted
by the individual contribution factor, which takes into account business
division and individual performance. The 2019 remuneration report
Payout adjusted by individual contribution factor: +/-20%
Annual bonus capped at 150% of target
Group operating profit
50%
Group net income
50%
•
CEO: 1,422
RBM: 813
Annual bonus
25%
25%
36%
cash
⚫ RBM: 1 x Base salary
⚫ CEO: 2 x Base salary
• 50% individual targets
Annual Report 2018 - Allianz Group
38
2_Based on the allocation value as described in detail in the LTI section "Allianz share price performance" on page 37.
The review of the current remuneration system also revealed the need
to adapt the compensation levels for the Board of Management of
Allianz SE. The horizontal benchmark, with the relevant peer group
consisting of DAX companies and international competitors, demon-
strated that the compensation levels for both regular board members
and the Chairman of the Board no longer reflect Allianz's overall
position, given relative size, complexity, and sustained performance.
Moreover, the remuneration levels for regular board members have
remained unchanged since their last adjustment in 2014. Therefore,
the Supervisory Board deemed an increase of the total target com-
pensation (without pension) necessary to maintain its attractiveness
to talents. Specifically, the amount² for regular board members
TOTAL TARGET COMPENSATION AND
OVERALL CAP (NEW)
Additionally, a reduction or cancellation of variable remunera-
tion may occur if the supervisory authority (BaFin) requires this in
accordance with its statutory powers.
Variable remuneration components may not be paid, or payment
may be restricted, in the case of a significant breach of the Allianz
Code of Conduct or regulatory Solvency II policies or standards,
including risk limits. In the same way, for three years after payout,
variable remuneration components already paid may be subject to a
clawback.
MALUS/CLAWBACK (NEW)
The holding obligation ceases with the end of the mandate.
Shares will be acquired through mandatory pay component conversion
to avoid insider trading.
Holding is required for the entire term of service on the Board of
Management.
Chairman of the Board: two times base salary, i.e. € 3,412 thou
Regular board member: one time base salary, i.e. € 975 thou.
The members of the Board of Management are obliged to build up
share ownership within three years.
SHAREHOLDING REQUIREMENTS (NEW)
In the future, severance payments to Board members in case of early
termination, including the case of a change of control, will be limited
uniformly to twice the annual compensation (consisting of base salary
and 100% of the variable target compensation).
DBO
SC5
DBO
SC5
DBO'
SC5
DBO6
SC5
DBO6
SC5
DBO⁹
• 100% Group financial targets (operating profit
and net income, equally weighted)
4-year share price performance:
• Individual contribution considered through a
contribution factor with a range from 0.8 - 1.2
Share price
Shareholding requirement
Other
components
Modifier
for target level
• Fix
CEO: 1,706
RBM: 975
Base salary
30%
Target
in € thou
%
of target
30%
fix
NEW TOTAL TARGET DIRECT COMPENSATION AND REMUNERATION STRUCTURE
B_Corporate Governance
35
Annual Report 2018 - Allianz Group
1_The allocation value is used to determine the number of restricted stock units (RSU) and is described in detail in the LTI section Allianz share price performance on page 37.
Yes
Malus and clawback
and overall compensation cap
Caps on all components
Share price and relative
total shareholder return (TSR)
No
Shareholding requirements
Malus
Malus and clawback
Caps on all components
Caps
long-term compensation
Equity-related
4-year relative performance:
CEO: 2,559
RBM: 1,463
⚫LTI granted in form of Restricted Stock
Units (RSUs) with a pay-out after four
years, capped at 200%
39,845
1,433
6,372
47,464
1,465
6,179
9,341
425
Dr. Helga Jung
5,923
25,465
906
Dr. Christof Mascher
5,603
27,201
946
Niran Peiris
5,923
14,402
563
Iván de la Sota
4,366
12,679
505
Giulio Terzariol
6,051
11,844
11,038
497
31/12/2018¹
RSU granted
on 1/3/20191
3,933
4,087
2,163
5,238
1 In accordance with the German Corporate Governance Code, the annual bonus disclosed for performance year 2018 is paid in 2019 and for performance year 2017 in 2018. The payments for equity-related deferred compensation (GEI and AEI),
however, are disclosed for the year in which the actual payment was made. To reconcile to the Corporate Accounting Standard 17, the total as shown in column "payout" should be adjusted by including the accrual for the AEI 2019/RSU and
excluding any payouts from AEI 2013/RSU, AEI 2014/RSU or GEI 2010/SAR, as applicable.
2 The MTB figure included in the Actual Grant column shows the annual accrual before adjustment by the sustainability assessment. The payout 2018 figure includes the 2018 allocation and the accruals from the performance years 2016 and 2017, as
adjusted by the sustainability assessment. The MTB 2016-2018 is paid out in spring 2019.
3_Payout is capped at 200% above grant price. The relevant share price used to determine the fair market value, and hence the final number of RSUs granted, and the 200% cap are only available after sign-off by the external auditors.
4 The equity-related remuneration that applied before 2010 consisted of two vehicles, virtual stock awards known as RSUs, and virtual stock options known as "Stock Appreciation Rights" (SAR). Only RSUs have been awarded as of 1 January 2010.
The remuneration system valid until December 2009 is disclosed in the Annual Report 2009 (starting on page 17). Whereas the RSU grants are automatically exercised at the vesting date, the GEI/SAR grants are exercised by the Board member
within the exercise period following the vesting date. Hence the total payout from SARS depends on the individual decision by the Board member. SARS are released to plan participants upon expiry of the vesting period, assuming all other exercise
hurdles are met. For SARS granted from 2009, the vesting period was four years and the exercise period three years. SARS can be exercised on the condition that the price of the Allianz SE stock is at least 20% above the strike price at the time of
grant. During the term of the plan, at least once on five consecutive trading days the Allianz SE stock must relatively appreciate at least 0.01 percentage points ahead of the appreciation of the Dow Jones EURO STOXX Price Index (600).
5_Pension service cost in accordance with IAS 19: represents the company cost not the actual entitlement nor a payment, however, according to the German Corporate Governance Code the Pension Service Cost is to be included in all columns.
Annual Report 2018 - Allianz Group
31
B_Corporate Governance
GERMAN ACCOUNTING STANDARD 17 DISCLOSURE
Under the German Accounting Standard 17, the total remuneration
to be disclosed for 2018 (2017 in parentheses) is defined differently as
compared to the German Corporate Governance Code: It is composed
of the base salary, perquisites, the annual bonus, the fair value of the
RSU grant and the payout of the MTB 2016 - 2018. However, it
excludes the pension service cost. The information on remuneration
for 2017 (in parentheses) does not include the notional accruals for
the MTB 2016-2018:
Oliver Bäte € 9,386 (3,925) thou,
Sergio Balbinot € 5,725 (2,636) thou,
Jacqueline Hunt € 5,038 (2,613) thou,
Dr. Helga Jung € 5,500 (2,497) thou,
Dr. Christof Mascher € 5,140 (2,419) thou,
Niran Peiris € 3,529 (-) thou,
Iván de la Sota € 2,605 (-) thou,
Giulio Terzariol € 3,507 (-) thou,
Dr. Günther Thallinger € 4,472 (2,466) thou,
Dr. Axel Theis € 5,661 (2,547) thou.
The sum of the total remuneration of the Board of Management for
2018, including the payments of the MTB 2016 - 2018 and excluding
the pension service cost, amounts to € 51 mn (2017 excluding the
notional accruals for the MTB 2016 - 2018: € 24 mn). The corresponding
amount, including pension service cost, equals € 55 mn (2017 excluding
the notional accruals for the MTB 2016 - 2018: € 28 mn).
EQUITY-RELATED REMUNERATION
In accordance with the approach described earlier, in March 2019 a
number of RSUs were granted to each member of the Board of
Management, which will vest and be settled in 2023.
Grants, outstanding holdings, and equity compensation expense under
the Allianz Equity Program
Board members
Oliver Bäte
Sergio Balbinot
Jacqueline Hunt
Equity
compensation
expense 2018
RSU
€ thou²
Number of
Number of
RSU held at
Dr. Günther Thallinger
6,179
14,078
TERMINATION OF SERVICE - DETAILS OF PAYMENT
ARRANGEMENTS
Perquisites mainly consist of contributions to accident and liability
insurances and the provision of a company car. Perquisites are not
linked to performance. Each member of the Board of Management is
responsible for paying the income tax due on these perquisites. The
Supervisory Board regularly reviews the level of perquisites.
PERQUISITES
1 The fair value of the index-linked-RSUS is calculated as the present value of the expected future payout, taking into
account the link between share performance and relative performance compared to the index as well as the relevant
caps and thresholds as defined in the payout formula. The expected future payout is determined on the basis of
observable market data as of the valuation day, and market standard simulation techniques. The most relevant market
parameters for this estimation are the assumptions for the volatility of the Allianz stock, for the volatility of the index, for
their correlation, the term structure of interest rates, and the expected dividends.
Pension contribution remains unchanged at 50% of annual base
salary. For further information regarding "Pensions and similar bene-
fits", please refer to > page 25.
PENSIONS AND SIMILAR BENEFITS
The LTI payout is subject to a limit and capped at 600% of the target
amount based on the allocation value as described in the LTI section
"Allianz share price performance" on >> Date: : . . .
Overall LTI cap
Following the end of the four-year vesting period, the company
makes a cash payment based on the relevant share price of the RSUs
at vesting, as adjusted by the relative TSR measure and sustainability
check as described above. The relevant share price, which is capped at
twice the share price at grant, is calculated based on the ten-day
average Xetra closing price of the Allianz stock following the annual
financial media conference in the year of expiry of the respective RSU
plan.
Sustainability check (downward adjustment) (NEW)
The payout of the LTI will be subjected to a sustainability check which
may result in a LTI payout between 0% and 100%. It compares the
development of the annual bonus KPIs in the grant year with the
payout year of the LTI, taking into account extraordinary events and
balance sheet strength.
In order to avoid incentivizing excessive risk taking, the relative
TSR performance factor is capped at 200% which reflects 50%
outperformance. In addition, the payout of the RSU is set to zero if
the relative TSR underperformance is below 50% after four years.
The relative TSR performance factor is determined using the
outperformance methodology, and calculated as follows: The
TSR of the index is deducted from the TSR of the Allianz share; the
result is multiplied by the factor 2 and, for calculation of the
payout, applied as a factor to the RSU share price at vesting, e.g.
1 percentage point outperformance results in a relative TSR
performance factor of 102%.
The Allianz TSR will be benchmarked to the TSR of the STOXX
Europe 600 insurance performance index, which represents a rel-
evant peer group in the insurance industry.
To foster relative performance against peers, a relative performance
measure, TSR, was introduced:
Relative TSR performance measurement (NEW)
The allocation value and the fair value of the RSUs at grant will
be disclosed in the annual remuneration report.
option pricing model and additional market parameters¹. The pro-
posed simplified allocation value concept aims to increase transpar-
ency and traceability of the number of RSU allocated to the benefi-
ciaries.
B_Corporate Governance
37
Annual Report 2018 - Allianz Group
Through the grant of restricted stock units (RSUs), the LTI continues to
be equity-related and linked to the absolute share price development.
The LTI allocation amount for the grant of RSUs is derived by multiply-
ing the annual bonus target achievement factor with the LTI target
amount. The LTI allocation amount is capped at 150% of the respec-
tive LTI target level. The number of RSUs allocated is derived by
dividing the LTI allocation amount by the RSU allocation value at the
time of grant. The RSU allocation value is calculated as the refer-
ence share price at grant minus the net present value of the divi-
dends during the vesting period. The IFRS accounting value of the
RSUs, however, deviates from the allocation value, as it is based on
the fair value concept, which is more complex, since it is based on an
Allianz share price performance
The equity-related LTI introduces a new performance measure-
ment for relative total shareholder return (relative TSR) which is
objective and transparent and permits multi-year assessment of
performance amongst peers. A sustainability review at the end of the
performance period allows for a potential downward adjustment
with the risk of no payout. The Allianz share price performance, the
relative TSR, and the sustainability check adjustments are multiplicatively
linked.
To foster shareholder alignment, the proportion of the equity-related
compensation component within the total target compensation is
significantly increased to 45%. Also, annual target amounts are
increased to € 2,559 thou for the Chairman of the Allianz SE Board
of Management and € 1,463 thou for a regular board member. The
proportion and the respective target amounts are based on target
allocation values as described below in the section "Allianz share
price performance".
× Sustainability check (100% down to 0%)
⚫ LTI payout subject to relative 4-year total
shareholder return (TSR), benchmarked
to peer group (index), capped at 200%
☑
Individual remuneration: 2018 and 2017
• Long-term: 25%
SC5
payment
560
Dr. Axel Theis
6,372
27,164
928
Total
64,006
229,483
8,229
1_The relevant share price used to determine the fair value, and hence the final number of RSUS granted, is only
available after sign-off of the Annual Report by the external auditors, thus numbers are based on a best estimate. As
disclosed in the Annual Report 2017, the equity-related grant in 2018 was made to participants as part of their 2017
remuneration. The disclosure in the Annual Report 2017 was based on a best estimate of the RSU grants. The actual
grants deviated from the estimated values and have to be disclosed accordingly. The actual RSU grants as of
2 March 2018 under the Allianz Equity Incentive are as follows: Oliver Bäte: 8,887, Sergio Balbinot: 5,985, Jacqueline
Hunt: 5,924, Dr. Helga Jung: 5,563, Dr. Christof Mascher: 5,322, Dr. Günther Thallinger: 5,503, Dr. Axel Theis: 5,684.
2_Grants of equity-related remuneration are accounted for as cash settled awards. The fair value of the granted RSUs is
remeasured at each reporting date and accrued, as a compensation expense, proportionately over the vesting and
service period.
32
Annual Report 2018 - Allianz Group
B_Corporate Governance
Oliver Bäte
PENSIONS
Individual pensions: 2018 and 2017
€ thou (total might not sum up due to rounding)
contribution rates are reduced by 19% of the expected annual pension
from that frozen plan. The Allianz Group paid € 4 mn (2017: € 4 mn) to
increase reserves for pensions and similar benefits for active members
of the Board of Management. As of 31 December 2018, reserves for
pensions and similar benefits for active members of the Board of
Management amounted to € 31 mn (2017: € 41 mn).
Defined-benefit pension plan
(frozen)
Contribution-based
pension plan
(frozen)¹
Current pension plan
AVK/APV²
Transition
payment³
Total
Ex-
pected
annual
pension
Board of Management
Company contributions for the current pension plan are set at 50% of
the base salary, reduced by an amount covering the disability and
death risk. They are invested in a fund and include a guarantee for the
contributions paid, but no further interest guarantee. For members
with pension rights in the frozen defined-benefit plan, the above
2018
54
3,087
2,930
3,332
33
2,415
334
1,254
11
306
24
727
510
7,633
16
2,537
334
889
11
283
25
768
501
7,810
1_The service cost of the frozen contribution-based pension plan reflects the continued death and disability cover.
2_Plan participants contribute 3% of their relevant salary to the AVK. For the AVK the minimum guaranteed interest rate is 2.75% - 3.50% depending on the date of joining Allianz. In general, the company funds the balance required via the APV.
Before Allianz's founding of the APV in 1998, both Allianz and the plan participants were contributing to the AVK.
3_For details on the transition payment, see section "Termination of service". In any event a death benefit is included.
4_Expected annual pension payment at assumed retirement age for the frozen defined benefits pension plan, excluding current pension plan.
5_SC = service cost. Service costs are calculatory costs for the DBO related to the reported business year.
6_DBO = defined-benefit obligation, end of year. The figures show the obligation for Allianz resulting from defined benefit plans, taking into account realistic assumptions with regard to interest rate, dynamics, and biometric probabilities.
Annual Report 2018 - Allianz Group
33
114
B_Corporate Governance
120
108
14
238
304
1,500
2017
Dr. Günther Thallinger
2018
31
1,266
357
949
7
37
395
2,252
2017
27
1,311
284
570
7
32
318
1,914
Dr. Axel Theis
2018
120
2017
In 2018, former members of the Board of Management and their
dependents received remunerations and other benefits totaling
€ 8 mn (2017: € 8 mn), while reserves for current pension obligations
and accrued pension rights totaled € 152 mn (2017: € 137 mn).
LOANS TO MEMBERS OF THE BOARD OF
MANAGEMENT
As of 31 December 2018, there were no outstanding loans granted by
Allianz Group companies to members of the Board of Management.
SIGNIFICANT CHANGES FROM 2018 TO 2019
Topic
Pay mix
Components
2018
effective on 1 January 2019 and will be put to vote in the Annual
Shareholder Meeting of Allianz SE on 8 May 2019.
The previous remuneration system supported sustainable per-
formance and was aligned with the business strategy as well as
shareholders' interests and applicable laws. The new structure con-
tinues to follow these principles and additionally integrates further
stakeholder demands which have emerged over time, such as
reduced complexity, as well as increased shareholder alignment and
pay for performance.
Base salary + 3 variable components:
• Short-term: annual bonus
• Mid-term:
•
mid-term bonus (MTB)
Long-term: equity-related compensation
Base salary: 25%
•
• Short-term:
25%
2019
Base salary + 2 variable components:
• Short-term: annual bonus
• Long-term:
equity-related compensation
Base salary: 30%
• Short-term: 25%
• Long-term¹: 45%
Pay mix
Proportion (based on
allocation value)
Annual bonus
• Mid-term: 25%
The Board of Management's remuneration policy has remained
stable for nine years; it was last presented to the Annual General
Meeting in 2010. In anticipation of the upcoming new legislation
resulting from Directive (EU) 2017/828 (Shareholder Rights Directive
II), the Supervisory Board of Allianz SE conducted a comprehensive
review and comparison against compensation-related market trends.
Based on this review, the Supervisory Board of Allianz SE decided to
implement structural changes to the remuneration system of the
Board of Management of Allianz SE. The new structure became
REMUNERATION OUTLOOK FOR 2019
B_Corporate Governance
Annual Report 2018 - Allianz Group
TERMINATION OF SERVICE
Board of Management contracts are limited to a period of five years.
For new appointments a shorter period is typical, a practice in line
with the German Corporate Governance Code.
Arrangements for termination of service including retirement are as
follows:
1.
2.
3.
Board members who were appointed before 1 January 2010,
and who have served a minimum of five years, are eligible for a
six-month transition payment after leaving the Board of Manage-
ment.
Severance payments made to board members in case of early
termination comply with the German Corporate Governance
Code.
Special terms which are also in accordance with the German
Corporate Governance Code - apply if a board member's service
ended as a result of a "change of control" (i.e., if a situation arises
in which a shareholder of Allianz SE, acting alone or together
with other shareholders, holds more than 50% of voting rights in
Allianz SE).
Contracts do not contain provisions for any other cases of early ter-
mination of Board of Management service.
Board members who were appointed before 1 January 2011 are
eligible to continue using a company car for up to one year after
retirement.
TERMINATION OF SERVICE -
DETAILS OF THE PAYMENT ARRANGEMENTS
486
Transition payment (appointment before 1 January 2010)
Board members who receive a transition payment are subject to a
six-month non-compete clause.
Where an Allianz pension is immediately payable, transition
payment amounts are offset against it.
Severance payment cap
Payments for early termination to board members with a remaining
term of contract of more than two years are capped at twice the
annual compensation - whereby the annual compensation:
1.
2.
is determined based on the previous year's annual base salary
plus 50% of the target variable remuneration (annual bonus,
annualized MTB, and equity-related remuneration: For a board
member with a fixed base salary of € 750 thou, the annual com-
pensation would amount to € 1,875 thou. Hence, he/she would
receive a maximum severance payment of € 3,750 thou) and
shall not exceed the latest year's actual total compensation.
If the remaining term of contract is less than two years, the payment is
pro-rated according to the remaining term of the contract.
Change of control
In case of early termination as a result of a change of control, severance
payments made to board members generally amount to three times
the annual compensation (as defined above) and shall not exceed
150% of the severance payment cap. A board member with a base
salary of € 750 thou would receive a maximum of € 5,625 thou.
MISCELLANEOUS
INTERNAL AND EXTERNAL BOARD APPOINTMENTS
When a member of the Board of Management simultaneously holds
an appointment at another company within the Allianz Group, the full
amount of the respective remuneration is transferred to Allianz SE.
In recognition of related benefits to the organization, board members
are also allowed to accept a limited number of non-executive super-
visory roles in appropriate external organizations. In these cases,
50% of the remuneration received is paid to Allianz SE. Only if the
Allianz SE Supervisory Board classifies the appointment as a personal
one, the respective board member will retain the full remuneration for
that position. Any remuneration paid by external organizations will
be itemized in those organizations' annual reports; its level is deter-
mined by the governing body of the relevant organization.
34
+4
The transition payment comprises an amount corresponding to
the most recent base salary, covering a period of six months, plus
25% of the target variable remuneration at the notice date. A board
member with a base salary of € 750 thou would receive a maximum
of € 937.5 thou.
4,667
269
6
357
961
3
6
1
374
995
Jacqueline Hunt
2018
317
820
317
821
2017
317
472
317
472
Dr. Helga Jung
2018
62
60
1,498
26
1,841
345
1,301
28
9
14
1,386
595
2,028
6
41
41
890
696
6,045
2017
45
3,149
536
1,385
6
36
36
675
622
5,245
Sergio Balbinot
2018
28
357
1,351
2
7
360
2017
221
441
4,861
646
428
4,914
Niran Peiris
2018
317
322
317
322
2017
Iván de la Sota
2018
14
303
34
266
268
96
266
「8
701
2017
Giulio Terzariol
2018
19
14
289
40
42
5
1,018
2017
62
59
1,429
19
1,863
345
924
8
204
431
4,421
Dr. Christof Mascher
486
2018
3,139
357
1,409
6
47
44
717
432
5,312
2017
26
3,208
357
25
510
• 50% Group financial targets (operating profit and
net income, equally weighted)
510
Annual bonus
Annual variable compensation
Total fixed compensation
Perquisites
Base salary
2,233
266
266
2,815
3,442
899
2,594
Total
266
266
266
Pensions service cost
1,967
2,549
3,176
633
2,328
Total
695
63339
848
565
848
Deferred compensation
565
MTB (2016-2018)²
AEI 2018/RSU³
27
27
27
27
750
750
750
750
Max
Min
Target
Target
2018
2017
2018
Payout¹
Actual grant
2017
2018
2017
Grant
Giulio Terzariol (Appointed: 01/2018)
Total
Pensions service cost
Total
GEI 2010/SAR4
AEI 2013/RSU³
AEI 2014/RSU³
AEI 2019/RSU³
777
639
848
AEI 2013/RSU³
AEI 2014/RSU³
AEI 2018/RSU³
MTB (2016 - 2018)²
Deferred compensation
Annual bonus
Annual variable compensation
Total fixed compensation
Perquisites
Base salary
€ thou (total might not sum up due to rounding)
Individual remuneration: 2018 and 2017
B_Corporate Governance
29
Annual Report 2018 - Allianz Group
3_Payout is capped at 200% above grant price. The relevant share price used to determine the fair market value, and hence the final number of RSUs granted, and the 200% cap are only available after sign-off by the external auditors.
4_The equity-related remuneration that applied before 2010 consisted of two vehicles, virtual stock awards known as RSUs, and virtual stock options known as "Stock Appreciation Rights" (SAR). Only RSUs have been awarded as of 1 January 2010.
The remuneration system valid until December 2009 is disclosed in the Annual Report 2009 (starting on page 17). Whereas the RSU grants are automatically exercised at the vesting date, the GEI/SAR grants are exercised by the Board member
within the exercise period following the vesting date. Hence the total payout from SARS depends on the individual decision by the Board member. SARS are released to plan participants upon expiry of the vesting period, assuming all other exercise
hurdles are met. For SARS granted from 2009, the vesting period was four years and the exercise period three years. SARS can be exercised on the condition that the price of the Allianz SE stock is at least 20% above the strike price at the time of
grant. During the term of the plan, at least once on five consecutive trading days the Allianz SE stock must relatively appreciate at least 0.01 percentage points ahead of the appreciation of the Dow Jones EURO STOXX Price Index (600).
5_Pension service cost in accordance with IAS 19: represents the company cost not the actual entitlement nor a payment, however, according to the German Corporate Governance Code the Pension Service Cost is to be included in all columns.
6_Niran Peiris received a one-time payment of € 50 thou to reimburse him for relocation cost.
2 The MTB figure included in the Actual Grant column shows the annual accrual before adjustment by the sustainability assessment. The payout 2018 figure includes the 2018 allocation and the accruals from the performance years 2016 and 2017, as
adjusted by the sustainability assessment. The MTB 2016 - 2018 is paid out in spring 2019.
1 In accordance with the German Corporate Governance Code, the annual bonus disclosed for performance year 2018 is paid in 2019 and for performance year 2017 in 2018. The payments for equity-related deferred compensation (GEI and AEI),
however, are disclosed for the year in which the actual payment was made. To reconcile to the Corporate Accounting Standard 17, the total as shown in column "payout" should be adjusted by including the accrual for the AEI 2019/RSU and
excluding any payouts from AEI 2013/RSU, AEI 2014/RSU or GEI 2010/SAR, as applicable.
2,980
317
2,662
317
3,771
3,320
3,454
317
4,547
317
1,172
317
3,422
GEI 2010/SAR
639
Iván de la Sota (Appointed: 04/2018)
Actual grant
565
633
633
633
633
633
717
717
717
717
717
563
563
563
563
563
Max
Min
Target
Target
2018
2017
2018
2017
2018
2017
Payout¹
Grant
777
777
777
750
750
AEI 2014/RSU³
AEI 2018/RSU³
AEI 2019/RSU³
MTB (2016-2018)²
Deferred compensation
904
857
904
857
1,125
750
750
Annual bonus
Annual variable compensation
754
752
754
752
754
754
754
752
Total fixed compensation
4
2
1,125
4
857
750
Total
501
395
318
395
318
395
395
395
318
Pensions service cost
3,568
1,609
3,465
3,323
4,129
754
3,004
3,002
Total
GEI 2010/SAR
AEI 2013/RSU³
1,911
857
750
904
1,125
904
2
4
4
3_Payout is capped at 200% above grant price. The relevant share price used to determine the fair market value, and hence the final number of RSUs granted, and the 200% cap are only available after sign-off by the external auditors.
4 The equity-related remuneration that applied before 2010 consisted of two vehicles, virtual stock awards known as RSUs, and virtual stock options known as "Stock Appreciation Rights" (SAR). Only RSUs have been awarded as of 1 January 2010.
The remuneration system valid until December 2009 is disclosed in the Annual Report 2009 (starting on page 17). Whereas the RSU grants are automatically exercised at the vesting date, the GEI/SAR grants are exercised by the Board member
within the exercise period following the vesting date. Hence the total payout from SARS depends on the individual decision by the Board member. SARs are released to plan participants upon expiry of the vesting period, assuming all other exercise
hurdles are met. For SARS granted from 2009, the vesting period was four years and the exercise period three years. SARS can be exercised on the condition that the price of the Allianz SE stock is at least 20% above the strike price at the time of
grant. During the term of the plan, at least once on five consecutive trading days the Allianz SE stock must relatively appreciate at least 0.01 percentage points ahead of the appreciation of the Dow Jones EURO STOXX Price Index (600).
5_Pension service cost in accordance with IAS 19: represents the company cost not the actual entitlement nor a payment, however, according to the German Corporate Governance Code the Pension Service Cost is to be included in all columns.
6_Iván de la Sota joined the Allianz SE Board of Management on 1 April 2018. He received a pro-rated base salary, annual bonus, MTB tranche, and equity-related compensation. The different pro-rated amounts for base salary and target amounts
result from different pro-rating methodologies, which are generally applied.
2_The MTB figure included in the Actual Grant column shows the annual accrual before adjustment by the sustainability assessment. The payout 2018 figure includes the 2018 allocation and the accruals from the performance years 2016 and 2017, as
adjusted by the sustainability assessment. The MTB 2016 - 2018 is paid out in spring 2019.
1 In accordance with the German Corporate Governance Code, the annual bonus disclosed for performance year 2018 is paid in 2019 and for performance year 2017 in 2018. The payments for equity-related deferred compensation (GEI and AEI),
however, are disclosed for the year in which the actual payment was made. To reconcile to the Corporate Accounting Standard 17, the total as shown in column "payout" should be adjusted by including the accrual for the AEI 2019/RSU and
excluding any payouts from AEI 2013/RSU, AEI 2014/RSU or GEI 2010/SAR, as applicable.
2,925
304
2,622
3,432
304
3,735
304
4,455
304
1,080
304
3,330
4,152
777
3,027
885
1,125
750
960
885
1,125
750
885
885
1,125
750
777
27
750
7_Iván de la Sota received a one-time payment of € 50 thou to reimburse him for relocation cost.
30
Annual Report 2018 - Allianz Group
Individual remuneration: 2018 and 2017
4
2
Perquisites
750
750
750
750
750
750
750
750
Base salary
Max
4,230
Min
Target
2018
2017
2018
2017
2018
2017
Payout¹
Actual grant
Grant
Dr. Günther Thallinger (Appointed: 01/2017)
B_Corporate Governance
€ thou (total might not sum up due to rounding)
Target
855
AEI 2019/RSU³
866
3,641
3,860
1,927
3,963
Dr. Axel Theis (Appointed: 01/2015)
Grant
Actual grant
Payout¹
2017
2018
2017
2018
2017
2018
Target
Target
Min
Max
Base salary
750
750
750
750
750
750
750
750
4,524
Perquisites
1,149
B_Corporate Governance
8
8
11
Perquisites
750
750
750
750
750
750
750
750
Base salary
Max
Min
Target
Target
2018
2017
2018
2017
2018
2017
Payout¹
3,105
Grant
Dr. Christof Mascher (Appointed: 09/2009)
3,399
27
32
32
Pensions service cost
Total
750
750
550
750
1,125
885
932
750
1,125
932
885
3,015
3,027
3,032
782
4,157
3,432
3,578
1,662
4,729
501
3,528
510
3,542
510
1,292
510
501
Total
GEI 2010/SAR4
AEI 2013/RSU³
AEI 2014/RSU³
32
27
32
27
32
Total fixed compensation
777
782
782
782
777
782
777
8
782
Annual bonus
750
750
50
1,125
885
932
885
932
Deferred compensation
MTB (2016 - 2018)²
AEI 2019/RSU³
AEI 2018/RSU³
Annual variable compensation
11
Actual grant
11
Payout¹
Actual grant
2017
8
2017
Grant
Niran Peiris (Appointed: 01/2018)
Total
Pensions service cost
Total
GEI 2010/SAR4
AEI 2013/RSU³
AEI 2014/RSU³
AEI 2018/RSU³
AEI 2019/RSU³
MTB (2016 - 2018)²
Deferred compensation
Annual bonus
Annual variable compensation
Total fixed compensation
Perquisites
Base salary
6,421
4,282
3,648
3,675
4,565
1,190
2018
3,440
2017
Target
1,125
750
941
866
1,125
750
866
866
1,125
750
855
855
855
855
855
750
1056
1056
1056
1056
105°
750
750
750
750
Max
Min
Target
2018
3,439
2018
432
750
750
AEI 2014/RSU³
AEI 2018/RSU³
AEI 2019/RSU³
MTB (2016-2018)²
Deferred compensation
819
829
819
829
1,125
750
750
750
Annual bonus
Annual variable compensation
758
761
758
761
758
758
Total
761
Total fixed compensation
8
1,125
829
758
750
428
819
432
432
432
432
428
Pensions service cost
5,989
3,854
3,216
3,247
4,133
758
428
3,011
Total
645
GEI 2010/SAR
1,619
AEI 2013/RSU³
1,669
2,743
829
819
750
1,125
3,008
New target: 73% IMIX score in 2021.
As 2018 targets have not been fully reached for Allianz SE, the VOICE
initiative will be continued to improve results in the mid-term.
IMIX for Allianz Group:
The diversity concept for our Board of Management and Super-
visory Board is published in our Statement on Corporate Manage-
ment pursuant to §315d and §289f of the HGB starting on > page 17.
Target: 72% IMIX score in 2018.
New target: 73% IMIX score in 2021. The new ambitious IMIX
target was set to further drive the change within the organization
towards a culture of Inclusive Meritocracy.
As 2018 targets were not fully reached for the Allianz Group, the
following initiatives will be implemented or continued to improve
results in the mid-term: Inclusive Leadership Training, Inclusive
Meritocracy Virtual Classrooms, broad upskilling offering (LinkedIn
Learning) for all Allianz employees globally, and further specific local
measures at OE level.
1 Please note that the IMIX data is delivered by an external service provider and that we did not evaluate the data
collection process of the provider.
Annual Report 2018 - Allianz Group
Status/progress: 71% IMIX score in 2018.
Status/progress: 69% IMIX score in 2018.
Target: 72% IMIX score in 2018.
Our Board of Management has continually shown strong commit-
ment to diversity and inclusion (D&I). The Allianz Global Inclusion
Council (composed of senior leaders from across different entities)
sets annual priorities, determines the global diversity strategy, and
accepts sponsorships for various diversity programs. For 2018, we had
determined the following priorities: gender equality, employee net-
Achievements and targets¹
works, and inclusion. Specific initiatives were implemented to address
these priorities such as the JET-program, an integrated develop-
ment program for non-executive women (implemented in 2017 in
Germany and the U.K.). Contributing to Inclusive Meritocracy and the
IMIX, a pilot for top management entitled "Inclusive Leadership" was
conducted in 2018, its main focus being on unconscious bias, leader-
ship behavior, and communication. Rolling-out further pilots is
planned in 2019.
Spotlight on Employees - a video series featuring individual
board members and employees.
to concrete business problems identified by employees,
Care2Share - an initiative to enhance trust between employees
and managers, and
the so-called Innovation Journey - a process to develop solutions
an appraisal app for recognizing employees across hierarchies,
-
As a follow-up action to the AES and sponsored by the CEO, the
VOICE initiative brought together employees from different levels
and functions to work on key focus areas within the field of employee
engagement. Along the continuing implementation of the 2017
ideas, four new ideas were developed and implemented in the 2018
VOICE initiative:
The results of the AES (and thus the IMIX) are directly linked to
the performance objectives of the Group's Board of Management.
The Group Chief HR Officer is responsible for all people-related
activities and reports directly to a member of the Board of
Management.
47
We make employee engagement a high priority as we work to
build a committed workforce that excels by integrity and maintains a
strong customer focus. In all these aspects, the Allianz Engagement
Survey (AES), introduced in 2010, has been established as a valuable
employee feedback platform.
As part of the AES, we use the Inclusive Meritocracy Index (IMIX)
to measure progress towards a culture where both people and per-
formance matter in order to enable employees to reach their full
potential. As of 2015, the IMIX comprises 10 AES items covering the
areas of leadership, performance and corporate culture.
IMIX for Allianz SE:
B_Corporate Governance
As part of our global compliance program, we follow international
standards and applicable laws related to corruption and bribery,
money laundering and terrorism financing, trade and financial sanc-
tions, capital markets compliance, data privacy, sales compliance,
antitrust, and other relevant compliance risk areas.
This section describes the impacts of compliance matters on our
business activities and relationships as well as the impact of Allianz's
activities and relationships on compliance. Furthermore, we describe
the concepts and achievements related to the management of these
impacts, with a focus on compliance, anti-corruption, and bribery
matters. All compliance matters are managed by the Compliance
team.
These aspirations are underpinned by our strategic HR frame-
works, principles and tools including our globally consistent 4x3
People Attributes - Customer and Market Excellence, Collaborative
Leadership, Entrepreneurship and Trust - along the entire people
value chain: from recruiting and talent management to learning and
performance management.
In return to the increase, an overall cap was introduced which
will limit the total payout significantly: The compensation relating to
the relevant performance year, including pension contributions, will be
capped at € 10,000 thou for the Chairman of the Board of Management
and € 6,000 thou for a regular member of the Board of Management.
The previous system did not include explicit overall payout caps. The
calculatory overall payout caps that resulted from the individual caps
of the compensations components amounted to € 11,800 thou for the
Chairman of the Board of Management and € 6,750 thou for a regular
member of the Board of Management.
Annual Report 2018 - Allianz Group
48
48
Review and simplify the current risk scoping and maturity
assessment processes.
Completion of the third cycle of the integrated compliance
risk scoping and assessment activities as part of the company's
IRCS process.
Targets:
Completion of the second cycle of the integrated compliance
risk scoping and assessment activities as part of the company's
IRCS.
Roll-out of an enhanced compliance assurance approach in
2018.
Status/progress:
Achievements and targets
Compliance/anti-corruption and bribery matters
All OEs are required to perform Compliance Risk & Maturity
assessment annually. The obligations laid down in the various program
components are derived from both the Allianz Code of Conduct for
Business Ethics and Compliance and our risk assessment. They are
detailed in various Allianz Standards and Programs - specifically, the
Economics Sanctions Program, the Anti-Money Laundering Program,
the Antitrust Program, the Data Privacy Standard, Customer Protection,
and the Anti-Corruption Program.
We take a zero-tolerance approach to fraud and corruption. At
the minimum, this means adhering to local and international anti-
corruption and anti-bribery laws. Above and beyond mere compliance,
the Allianz Anti-Corruption Program, established in 2010, is a group-
wide program that defines minimum standards for a consistent and
comprehensive approach in every jurisdiction.
We continue to strengthen the risk-based focus of compliance
control reviews and testing. We also continue to improve the supporting
IT solutions in place to optimize and harmonize all these activities, as
well as our reporting across the Group and the quality of the data
collected. In 2018, we rolled out an enhanced compliance assurance
approach that now includes baseline reviews to fast-track compliance
onboarding of newly acquired entities, risk-based targeted reviews of
existing entities, and key control testing.
Anti-corruption and anti-fraud risk assessments are now integrated
into the IRCS and mitigation activities are monitored through a global
tracking tool. Further assessments and on-site reviews, including key
control testing and follow-ups, are conducted as necessary, following
a risk-based approach. In 2018, we completed the second cycle of
the integrated compliance risk scoping and assessment activities as
part of the company's IRCS.
To ensure continuous improvement in how we address compliance
risks, these risks are regularly assessed, monitored, and reported
throughout the Group. Our Compliance Quality Assurance Program,
rolled out in 2012, is comprised of self-assessments, independent on-
site reviews, local spot checks, and testing of key controls. An online
compliance issue management tool provides an overview over miti-
gating activities and key risk indicator tracking. In addition, our online
compliance case management tool provides the consistent group-
wide management of and authority over all cases. It also facilitates
reporting to the Audit Committee and the Integrity Committee.
In view of upcoming regulatory requirements, IT regulations and
increased regulatory scrutiny and enforcement are emerging risks.
economic sanctions,
money laundering, and
anti-trust.
customer protection,
data privacy,
-
Compliance risk is covered as part of the operational risk in
Allianz's Integrated Risk and Control System (IRCS). In 2018, all
relevant entities conducted a compliance risk assessment based on
the compliance-risk scenarios. The following top inherent compliance
risk areas have been identified:
Our risk management framework includes our Compliance Man-
agement System (CMS) which helps to ensure compliance with
internationally recognized laws, rules and regulations, and to promote
a culture of integrity in order to safeguard the company's reputation.
We take a proactive stance, working with organizations such as the
German Institute for Compliance and the Global Insurance Chief
Compliance Officers Forum (CCO Forum) to enhance our under-
standing of compliance issues and to share best practices.
CONCEPTS AND PROGRAMS
Directed at both our employees and third parties, the program
and policy prohibit the offer, acceptance, payment, or authorization
of any bribe or other form of corruption, when dealing with either the
private sector or government authorities. Anti-corruption training is
compulsory for all employees.
Our employees are one of our most valuable assets and key to the
success of our company. Without them, it would be impossible to
deliver on our business strategy and achieve our goals. Therefore, the
importance of retaining our best people and keeping them motivated
and committed by managing and rewarding talent, promoting
inclusivity and employee rights, and supporting employees' well-
being and engagement cannot be overstated.
and holistically enhance the drivers of customer satisfaction along
the entire customer journey, as opposed to at individual touch points.
This section describes the impacts of employee matters on our business
activities and relationships as well as the impact of Allianz's activities
and relationships on employees. Furthermore, we describe the concepts
and achievements related to the management of these impacts. All
employee matters are managed by the Group HR function.
145.3
M
M
2018
125.0
150.0
8.0
283.0
C¹¹
Jean-Claude Le Goaër¹²
M12
5.3
M
2017
100.0
86.7
6.0
M13
2018
52.1
29.2
4.0
85.3
2017
M
40.0
100.0
2017
Christine Bosse
M
M
M⁹
M
Jean-Jacques Cette¹0
M10
M
Dr. Friedrich Eichiner
C
2018
125.0
25.0
6.0
156.0
2017
100.0
28.3
4.5
132.8
2018
72.9
29.2
3.0
105.1
Martina Grundler
97.1
ΣΣ
125.0
25.0
6.0
156.0
2017
66.7
13.3
3.0
83.0
2018
41.7
8.3
125.0
2.0
2017
Jürgen Lawrenz
M17
Σ
M18
2018
125.0
50.0
6.0
181.0
M
52.0
2018
96.4
3.0
50.0
8.0
183.0
2017
100.0
40.0
5.3
145.3
Herbert Hainer¹4
Godfrey Robert Hayward¹5
Frank Kirsch16
M
M
M
M
M16
ΣΣ
2018
125.0
50.0
7.0
182.0
2017
66.7
26.7
2018
3.7
26.7
66.7
Individual remuneration: 2018 and 2017
€ thou (total might not sum up due to rounding)
Committees¹
Fixed Committee
Total
remunera-
remunera-
Attend-
remunera-
Members of the Supervisory Board
A
B_Corporate Governance
Michael Diekmann²
(Chairman)
M
Jim Hagemann Snabe
(Vice Chairman)
Gabriele Burkhardt-Berg
(Vice Chairwoman)'
M³
20 Ο Σ Σ
N
P
S
M
39
Annual Report 2018 - Allianz Group
1_Based on the allocation value as described in detail in the LTI section "Allianz share price performance" on page 37.
COMMITTEE-RELATED REMUNERATION
The Chairperson and members of the Supervisory Board committees
receive additional committee-related remuneration. The committee-
related remuneration is as follows:
Committee-related remuneration
€ thou
Committee¹
Personnel Committee, Standing Committee,
Risk Committee, Technology Committee
Audit Committee
1 Members of the Nomination Committee do not receive an additional remuneration.
Chair
Member
50
25
100
50
Remuneration of the Supervisory Board
The remuneration of the Supervisory Board is governed by the Statutes
of Allianz SE and the German Stock Corporation Act. The structure of
the Supervisory Board's remuneration is regularly reviewed with
regard to its compliance with German, European, and international
corporate governance recommendations and regulations.
REMUNERATION PRINCIPLES
-
Set total remuneration at a level both aligned with the scale and
scope of the Supervisory Board's duties and appropriate in view
of the company's activities and its business and financial situation.
Establish a remuneration structure that takes into account the
individual functions and responsibilities of Supervisory Board
members, such as chair, vice chair, or committee mandates.
Establish a remuneration structure that allows proper oversight of
business as well as independent decisions on executive personnel
and remuneration.
REMUNERATION STRUCTURE AND COMPONENTS
The remuneration structure, which comprises fixed and committee-
related remuneration only, was approved by the Annual General
Meeting in 2018 and is laid down in the Statutes of Allianz SE.
FIXED ANNUAL REMUNERATION
The remuneration of a Supervisory Board member consists of a fixed
cash amount paid pro rata temporis after the end of the respective
quarter of the business year for services rendered over that period.
In 2018 each regular Supervisory Board member received a fixed
compensation amounting to € 125 thou per year. Each Vice Chairper-
son received € 187.5 thou, the Chairperson received € 250 thou.
ATTENDANCE FEES AND EXPENSES
In addition to the fixed and committee-related remuneration, members
of the Supervisory Board receive an attendance fee of € 1,000 for
each Supervisory Board or committee meeting they attend. Should
several meetings be held on the same or consecutive days, the at-
tendance fee will only be paid once. In addition, Allianz SE reimburses
the Supervisory Board members for their out-of-pocket expenses and
the VAT payable on their Supervisory Board service. The company
provides insurance coverage and technical support to the Supervisory
Board members to an extent reasonable for carrying out the Supervi-
sory Board duties.
REMUNERATION FOR 2018
The total remuneration for all Supervisory Board members, including
attendance fees, amounted to € 2,684 thou (2017: € 2,179 thou). The
following table shows the individual remuneration for 2018 and 2017:
C
C
C
C
268.5
C
2017
133.3
56.7
4.5
194.5
2018
145.8
50.0
7.0
202.8
2017
100.0
33.3
3.8
137.1
Sophie Boissard
Σ Σ
2018
125.0
50.0
8.0
183.0
2017
6.0
M19
75.0
2018
C
C
C
M
M4
M6
M
RC
M5
Η Σ Σ Ο Υ Σ Σ
tion
tion
ance fees
tion
2018
250.0
225.0
9.0
484.0
2017
133.3
120.0
3.7
257.0
с
187.5
2017
100.0
33.3
Green electricity, Allianz SE4
Status/progress: In 2018, we achieved a share of 93% green
electricity of total electricity used (2017: 100%). SE data now
includes further SE locations for which no green electricity was
available in 2018.
Target: Achieve 100% green electricity for our operations by 2023.
Social matters
This section describes the impacts of social matters on our business
activities and relationships as well as the impact of Allianz's activities
and relationships on society as a whole. In addition, we describe the
concepts and achievements related to the management of these
impacts with a focus on social inclusion, emerging consumers,
responsible consumer/sales policies, and data privacy.
SOCIAL INCLUSION CONCEPTS
As a global insurer, we rely on the principle of solidarity. Pooling risks
is at the heart of our business model, and we have a major interest in
creating stable communities. Civil unrest, social tensions and societal
upheaval all pose a major business risk for Allianz. Of course, we are
also interested in empowering people and improving their access to
employment, which, in turn, provides a basis for creating the talented
and diverse workforce we rely on. We believe social inclusion is one of
the most important challenges society faces today, which is why we
have made it one of the three top priorities for our Corporate
Responsibility Strategy in 2016. True to our role as Insurer, Employer,
and Committed Corporate Citizen, we want to contribute to creating
more inclusive societies. We are determined to expand our range of
offerings to emerging consumers, in order to provide more people
with access to low-cost financial services. Inside the company, we
support social inclusion through our diversity and well-being programs,
as well as by supporting specific groups such as women in management
and people with disabilities. Our social contributions include time,
skills, and money.
ENCOURAGING FUTURE GENERATIONS PROGRAM
(CONCEPT)
In 2016, we launched Encouraging Future Generations, our Social
Inclusion program. It is designed to empower young people to develop
in self-confidence, and to shape inclusive, resilient societies. Building
on successful projects carried out by our OEs, the program provides the
global framework and focus to scale up Allianz's social contribution.
Our group-wide initiatives are:
Target: Achieve 100% green electricity for our operations by 2023.
a partnership with SOS Children's Villages (CV),
the Allianz Future Generations Award.
Achievements and targets
Social Inclusion
Status/Progress:
Together with SOS CV and Volunteer Vision, in 2018 we
launched the first online mentoring in which Allianz employees
mentor young people.
We also granted funds to 14 social projects globally through
our Social Innovation Fund, and to impact-oriented ventures
through the Allianz Future Generations Award.
Target: To further improve our reach to children and youth, we will
continue to support social projects through our Encouraging
Future Generations Program.
EMERGING CONSUMERS CONCEPT
We continue to support low-income consumers in Asia, Africa and Latin
America, where a majority of people are still severely underinsured. The
responsibility for managing the emerging consumers business lies
with the local Allianz OEs. In 2015, we managed to reach the 50-
million-customer benchmark in the expanding emerging-consumers
market (with a potential of 3.7 billion customers at present, and of
5 billion in 20305). We are determined to further expand our range of
offerings to emerging consumers, in order to continue closing the
supply gap for people who need access to low-cost financial services
tailored to their needs.
1_Please note that all environmental indicators (greenhouse gas (GHG) emissions per employee and % of green electricity)
are assessed based on a limited assurance engagement, not on a reasonable assurance level.
2_The majority of the environmental impacts reported are in scope of an SE environmental management system certified
to ISO14001, the scope currently excludes Allianz RE.
our Social Innovation Fund, and
Status/progress: In 2018, we achieved a share of 45% green
electricity of total electricity used (2017³: 45%).
Green electricity, Allianz Group
Target: Reduce carbon emissions by 2% per employee by 2020,
against a 2016 baseline.
We enable positive change as an insurer, developing and offer-
ing insurance solutions for renewables technologies and energy
efficiency. For instance, we contribute to financing a low-carbon
economy by making equity and debt investments in renewable ener-
gies. Allianz also offers a variety of funds for institutional investors
who want to invest in low-carbon assets such as renewable energy or
green bonds. For further information on renewable energy investments,
please refer to note 6 to the Consolidated Financial Statements.
Furthermore, we actively support an expansion of companies'
climate-related risk disclosure. We report on opportunities and risks
based on the framework developed by the G20's Task Force on
Climate-related Financial Disclosures (TCFD). The disclosure can be
found in our Sustainability Report 2018: :D:D:D:D: www.allianz.com/
sustainability.
Achievements and targets
Climate Change Strategy
Status/progress:
Commitment to Science Based Targets initiative in May 2018.
We have decided to no longer insure single-site coal-fired
power plants and coal mines that are being operated or
planned as of 2018.
We further strengthened the coal exclusion approach in
investments in 2018.
Targets:
Set long-term climate targets for our proprietary investments
and business operations in line with the Paris Climate
Agreement's goal to limit global warming to well below 2°C.
Fully phase out coal-based business models across our
proprietary investments and property-casualty portfolios by
2040 at the latest.
ENVIRONMENTAL CONCEPT
At Allianz, we are committed to effectively managing our most signifi-
cant impacts on the environment, which includes prevention of pollution.
We work to continually improve the environmental performance of
our operations. Specifically we seek to:
-
reduce the amount and carbon intensity of the energy consumed
by our operations, for instance by ensuring an energy-efficient
planning, construction, and operation of buildings,
reduce the environmental impact of our business travels,
use resources efficiently, in particular paper and water, and
minimize the environmental impact of waste by avoiding, reduc-
ing, re-using, and recycling it as appropriate.
Further, we include various environmental factors in our sourcing and
procurement processes. By doing that, we seek to raise suppliers' and
contractors' awareness of our environmental commitment, and to
encourage them to act accordingly.
Our group-wide Environmental Management System (EMS) pro-
vides standards and controls, supports environmental data collection,
and promotes transparent reporting on environmental impacts
across our operations. It guides us in monitoring and managing our
use of resources. Operational implementation is monitored by the
Group Environmental Officer, and supported by the Board of
Management of Allianz SE.
Annual Report 2018 - Allianz Group
43
B_Corporate Governance
Achievements and targets¹
To ensure effective and coherent actions, we have set the following
targets for the most material topics.
GHG emissions per employee, Allianz Group
Status/progress: In 2018, our carbon footprint per employee was
2.7 tons. This represents a 27% reduction through increase in the
share of green electricity and higher energy efficiency, against a
2010 baseline.
Target: Reduce carbon emissions by 30% per employee by 2020,
against a 2010 baseline.
GHG emissions per employee, Allianz SE²
Status/progress: In 2018, our carbon footprint per employee was
3.5 tons. This represents a 6% increase, against a 2016 baseline,
due to expansion of our international business presence, involving
more travel.
3_Energy data for 2017 was adjusted.
4_The SE target has been amended in 2018 in line with the Group target based on the recent RE100 commitment.
5 2017 World Bank and OECD figures. Total population is based on the de facto definition of population, which counts all
residents regardless of legal status or citizenship. The values shown are midyear estimates.
44
Equally important is the security of the personal data we handle.
Within our robust Information Security Framework, we globally apply
strict security processes, standards, and tools. The framework also
defines minimum requirements based on the ISO 27001 standard for
information security management. This standard specifies requirements
regarding vulnerability assessment along the software development
value chain (including penetration tests and security audits), the
monitoring of systems via multi-level security systems, and effective IT
security management and business continuity management.
We keep abreast of regulatory and industry developments and
aim to reflect these in our operational and governance processes and
procedures. For example, in response to the changes in the E.U. General
Data Protection Regulation (GDPR) that came into force in
May 2018, we worked with Allianz Group companies and other
Group centers to track the group-wide implementation status of the
Allianz Privacy Renewal Program.
Digital Privacy Guidelines provide guidance on privacy-related
topics impacting digital projects - both privacy by design (as part of
new product and service design processes) and privacy by default
(meaning that wherever individuals are given choices on the use and
sharing of their personal data, the initial settings restrict disclosure).
Achievements and targets
The General Data Protection Regulation (GDPR) requirements
have been implemented by Group Privacy in 2018 globally ensuring
stricter requirements on the way Allianz collects and uses personal
data of individuals.
Human rights matters
This section describes the impacts of human rights matters on our
business activities and relationships, as well as the impact of Allianz's
activities and relationships on human rights issues. Furthermore, we
describe the concepts and achievements related to the management
of these impacts. As a financial services provider those refer mainly to
insurance transactions, direct investments and to our supply chain.
CONCEPTS
We are committed to apply key human rights principles, as described
in the United Nations Universal Declaration of Human Rights, across
our entire global organization. As a participant to the United Nations
Global Compact since 2002, we have integrated its 10 principles into
our globally binding Code of Conduct. We annually communicate our
progress, including both human rights and labor standards. Since
2015, we encourage our vendors to sign a Vendor Code of Conduct,
which stipulates what our vendors must fulfill with regards to fair
labor practices, including the prevention of modern slavery in the
supply chain and human rights.
As part of our support and engagement for these human rights
principles, we also take an active stance against modern slavery or
human trafficking - within the boundaries of the risk-based approach
we pursue - in all of the Allianz Group's businesses and supply chains.
In the 2018 Allianz Group - Modern Slavery Statement, the Group
confirms that for the five preceding years, no incident of modern
slavery, human trafficking, or child labor had been reported that
would have involved an Allianz Group entity.
For insurance transactions and direct investments, such as real
estate, infrastructure, and private equity, we address ESG risks using
our referral process. As the issue of human rights cuts across most
sensitive business areas, an ESG screening is mandatory for each
transaction therein.
Please refer to our ESG approach on > page 42 for further details
on the concepts.
Achievements and targets
Status/progress:
Human rights matters have been taken into account within
the 2018 ESG risk assessment process. For further details,
please refer to our Sustainability Report 2018: MCM CDT①CHE: section
03.4.
Additionally, according to the Allianz Group - Modern Slavery
Statement we did not have any issues raised in regard to human
right matters specific to the Allianz Group in 2018.
Targets:
Continue to apply ESG Sector Guidelines and Human Rights
Guidelines for sensitive countries into all business lines and
core processes dealing with insurance and investment decisions.
Conduct annual review for U.K. and Group Modern Slavery
Statements in 2019.
Develop human rights guidance within PSI ESG in underwrit-
ing project for property-casualty insurance in 2019.
46
46
Annual Report 2018 - Allianz Group
B_Corporate Governance
Employee matters
As part of our Privacy Risk Management, we consider the
identification and management of privacy risks an integral part of our
operational processes, therefore we measure, monitor, and remediate
risks across Allianz's core businesses. So-called Privacy Impact
Assessments (PIAs) are undertaken for high exposure processes that
use personal data, in order to allow an early identification of high-risk
areas and ensure they are appropriately managed over the lifecycle
of a project, including when changing an existing product or service.
In 2016, we began to fully automate the PIA process for all
Allianz Group companies. The PIA tool has been implemented across
the entire Allianz Group, in conjunction with training sessions. Privacy
risks are included in Allianz's Integrated Risk and Control System
(IRCS), which helps us measure and monitor privacy.
We care for our customers and advise them on how to reduce
risks and minimize damage, while compensating those who have
suffered losses. We are also developing insurance solutions for
climate-vulnerable people in developing countries.
The Allianz Standard for Data Protection and Privacy defines
rules and principles for collecting and processing personal data.
Established in 2013, it sets out six privacy principles that we expect all
our employees to respect: due care, purpose specification, reasonable
limitation, transparency and openness, choice and consent, and
privacy by design. We also publish a Privacy Notice, which clearly
states what information we collect and why.
B_Corporate Governance
Annual Report 2018 - Allianz Group
B_Corporate Governance
As many of those markets lack an established financial-services
infrastructure, our emerging-consumers segment places a key focus
on digitalization. To make the most of existing opportunities, we are
partnering with digital businesses to distribute and expand our reach
in these markets, for example through mobile-phone-based insurance
products.
Achievements and targets
Status/progress: Allianz is expanding its access to emerging
consumers with new digital offerings by collaborating with lead-
ing partners like BIMA and Go-Jek.
Target: We aim to continue our expansion in Africa, Asia and Latin
America.
RESPONSIBLE CONSUMER / SALES CONCEPTS
Our strong reputation is built on customers', shareholders', employees'
and the general public's trust in our integrity. This trust depends on
the quality of our products, the way we inform and advise our cus-
tomers, and on the personal conduct and capability of our sales
employees and representatives. Since 2011, we have a global Sales
Compliance Program in place, which describes standardized processes
and controls for communication, monitoring, and audit. The program
is managed by the Compliance team. Recent initiatives include an
enhancement of product governance principles and new solutions to
deal with the low-interest-rate environment in life insurance; in this
context we have implemented the Allianz Standard for Retail Risk in
2018.
Another key feature of our responsible sales concept are our
Allianz Broker Remuneration Principles, which state that "Allianz
commits itself not to devise or agree to remuneration schemes that
are aimed at inducing brokers to act to the detriment of our custom-
ers or to distort fair competition." We have defined Minimum Stand-
ards for Asset Management Marketing Practices, which include the
principles of truthful, clear, and accurate information on investment
styles and philosophies. The globally binding Allianz Code of Conduct
for Business Ethics and Compliance overarches these responsible
sales controls. The code specifies that employees of Allianz Group
must not, either by their actions or statements, seek to mislead the
market or customers; and when establishing a customer relationship
or providing financial services to a client, appropriate care shall be
taken to ensure that the customer receives information that is necessary
for a reasonable decision to be taken by the customer. A responsible
approach to sales is more likely to lead to customer satisfaction. In
turn, satisfied customers are loyal customers and are more willing to
recommend us. Our customers' interests take priority whenever they
seek advice from us and exemplary sales practices are of particular
importance.
Since 2006, we have been measuring customer loyalty using the
Net Promoter Score (NPS). NPS measures our customers' willingness
to recommend Allianz, and the top-down NPS is applied regularly
according to global cross-industry standards, allowing benchmarking
against competitors in the respective markets. In 2016 we refined the
NPS methodology and established a group-wide standard for retail
end customer NPS, which helps to rate Allianz businesses along key
business drivers like brand, product, price and service. At the same
time, we introduced our Customer Excellence Program to systematically
measure customer experience, identify key areas for improvement,
In 2018, we have taken this structured collection of insights to the
next level: We established a more continuous approach to monitoring
and improving customer journeys by introducing the five-star rating
program a standard rating method allowing customers to state
their satisfaction level on a five-point scale, and to do this on various
touchpoints along the claims journey. Whenever customers have a
claim against us, we ask them afterwards to rate their satisfaction
with our settlement of that claim on a five-star scale. If their rating is
less than three stars we follow up to ensure we resolve whatever issue
there may be, and prevent the same thing from happening with other
customers. We aim at publishing all customer feedback online for full
transparency, visible to our customers and prospective customers.
Complaints are another important source of customer feedback
and we analyze them closely to identify potential improvements. We
have internally certified our subsidiaries since 2006 to ensure that
group-wide quality standards for handling complaints are met
and customers are treated fairly. All NPS and customer feedback
related matters are managed by the Group Market Management and
Distribution team.
Achievements and targets
Responsible sales:
-
Status/progress: The Allianz Standard for Retail Risk has been
implemented in 2018 to ensure that all Allianz companies offer
fair and transparent products.
Global NPS performance, Allianz Group¹:
Status/progress: 74% of the business segments of the
Allianz Group's entities scored above market or in a loyalty leader
position in 2018.
Ambition: 75% of Allianz Group business segments of our entities
score above market or in a loyalty leader position in 2019 (75% in
2018).
In order to ensure that our global ambitions 2019 will be met,
dedicated "NPS activation workshops" will be organized in the
first half of 2019 with all OEs in scope to identify performance
gaps and define concrete action plans.
DATA PRIVACY CONCEPTS
Digitalization enables more people to access insurance products, and
we embrace the opportunities through our Digital by Default strategy,
implemented with our Renewal Agenda in 2015. Digitalization, however,
also comes with data privacy and protection risks. Data privacy matters
are managed by the Privacy and Data Protection function. We take
these risks very seriously, and we are enforcing robust security and
privacy controls to give our customers the certainty that their personal
data is safe and secure.
Our Allianz Privacy Framework includes: a global standard for
data privacy; a privacy impact assessment and risk management
process; integration with information security core functions; and
employee training on appropriate procedures for processing of the
1 Please note that the NPS data is delivered by an external service provider and that we did not evaluate the data
collection process of the provider.
Annual Report 2018 - Allianz Group
45
personal data of our customers, employees, and third-party partners.
All measures are subject to regular audit and assurance activities.
CONCEPTS
We are committed to making climate protection an integral part
of our core business, as well as to setting ourselves long-term climate
targets for our proprietary investments and business operations that
are in line with the Paris Climate Agreement's goal to limit global
warming to well below 2°C. Our Climate Change Strategy anticipates
the risks associated with a changing climate across all our lines of
business. For the investment business, we consider climate-related
criteria such as carbon emissions, energy efficiency, climate change
vulnerability, or opportunities in clean tech as part of our ESG
integration approach for listed and non-listed assets. We systemati-
cally engage with investee companies exposed to high ESG risks.
Furthermore, we enter into active dialog with companies, encourag-
ing them to define and implement their own climate strategies in line
with the latest scientific findings. In addition, in 2015 we have decided
to stop financing coal-based business models and we no longer
insure single-site coal-fired power plants and coal mines that are
operated or planned as of 2018. We are committed to fully phasing
out coal-based business models across our proprietary investments
and property-casualty portfolios by 2040 at the latest, and are further
developing our approach to reach this target.
CLIMATE CHANGE STRATEGY
Legend: C = Chairperson of the respective committee, M = Member of the respective committee
1_Abbreviations: A - Audit, N - Nomination, P - Personnel, R - Risk, S - Standing, T-Technology
2_Since 7 May 2017.
3_Until 3 May 2017.
4_Since 3 May 2017.
5 Since 1 September 2018.
6 Until 31 August 2018.
7 Since 1 September 2018.
8_Since 3 May 2017.
9 Since 3 May 2017.
10_Until 31 July 2018.
11_Since 3 May 2017.
12_Since 1 August 2018.
13_Since 1 September 2018.
2,179.1
14 Since 3 May 2017.
16_Since 1 September 2018.
17 Until 31 August 2018.
18 Since 1 September 2018.
19_Since 3 May 2017.
20 Until 31 August 2018.
21 Until 3 May 2017.
22_The total reflects the remuneration of the full Supervisory Board in the respective year.
REMUNERATION FOR MANDATES IN OTHER ALLIANZ
COMPANIES AND FOR OTHER FUNCTIONS
As remuneration for their membership in the Supervisory Board of
Allianz Deutschland AG, Ms. Gabriele Burkhardt-Berg (three months
in 2018) received € 15.9 thou for the financial year 2018 and
Mr. Frank Kirsch received €43.6 thou for the financial year 2018.
Mr. Jürgen Lawrenz did not receive any remuneration for his service
on the Supervisory Board of Allianz Technology SE. All current em-
ployee representatives of the Supervisory Board, except for
Ms. Martina Grundler, are employed by Allianz Group companies
and receive a market-based remuneration for their services.
LOANS TO MEMBERS OF THE SUPERVISORY BOARD
As of 31 December 2018, there were no outstanding loans granted by
Allianz Group companies to members of the Supervisory Board.
40
15 Since 3 May 2017.
61.5
671.7
1,445.9
4.5
137.8
Rolf Zimmermann20
M20
M20
2018
125.0
33.3
4.0
162.3
M
M21
M
2017
150.0
41.7
4.5
196.2
Total²²
2018
1,750.0
850.0
84.0
2,684.0
2017
40
Annual Report 2018 - Allianz Group
B_Corporate Governance
COMBINED SEPARATE NON-FINANCIAL REPORT
The material topics and KPIs addressing those risks and megatrends
are covered in this report. They reflect the aspects that are necessary
for an understanding of the development, performance, and position
of Allianz, and of the impact of our business activities on these as-
pects. All climate-related topics are covered within the section "Envi-
ronmental matters"; customer safety is addressed in "Social matters –
responsible consumer/sales concepts" and digitalization / automa-
tion in "Social matters - emerging consumers concept and data
privacy concepts". We will further assess the topics of natural
disasters and digitalization to ensure they are fully reflected in our
strategy and reporting.
CORPORATE RESPONSIBILITY STRATEGY
Within the three main themes of our Corporate Responsibility Strategy
(Low-Carbon Economy, Social Inclusion and Business Integration), we
address risks and trends that might affect Allianz. We also look into
social and environmental effects arising from our business activities and
business relations through our ESG Business Integration approach.
Finally, we seize business opportunities associated with sustainability
matters; for example, in the areas of sustainable solutions and re-
newable energy investments.
RISK MANAGEMENT
As regards the requirements introduced through the CSR Directive
Implementation Act in 2017, we have not identified any principal risks
resulting from our operations, business activities, and business rela-
tions that could have severe adverse effects on material non-financial
matters. In this report, we describe how we address our impact on
those matters, along with the respective concepts we have in place.
Furthermore, as a global insurer, investor and asset manager,
understanding ESG issues allows Allianz to reduce risks and capture
opportunities in underwriting, claims, investment management, and
asset management. We describe our ESG approach in the following
section; our concepts for all other matters for which reporting is re-
quired will be addressed in the subsequent chapters. The ESG ap-
proach provides part of the foundation for these concepts.
ESG APPROACH
The types of ESG risks Allianz considers to be material in its insurance
and investment activities are summarized in the Allianz ESG Integra-
tion Framework. ESG risks can turn into legal risks, reputational risks,
supply chain and business disruption risks, quality risks, operational
risks, human rights risks, financial risks, and/or investment risks for
Allianz, its customers, and/or its invested companies.
ESG topics are integrated in our insurance, investment, and asset
management business through multiple instruments including inter-
nal standards, guidelines, and processes, such as the Allianz Stand-
ard for Reputational Risk and Issue Management (AS RRIM), the
Allianz Standards for Underwriting (ASU) and the Allianz ESG Func-
tional Rule for Investments (EFRI). An overview of the Group's key
ESG integration processes is described below.
-
In the field of underwriting and investments in non-listed asset
classes, ESG risks have been managed through the ESG sensitive
business guidelines outlined in the AS RRIM since 2014. For in-
vestments in listed asset classes, the Allianz ESG Scoring Ap-
proach (defined in EFRI) is applied to manage related risks. Since
December 2016, the ESG Scoring has provided Allianz investment
and asset managers with ESG performance information, to be in-
cluded in investment decisions.
As far as investments are concerned, Allianz has excluded invest-
ments in companies involved in controversial weapons ¹ since
2011, and in coal-based business models² since November 2015.
The criteria for the exclusion of coal-based business models were
expanded in 2018.
For its Property-Casualty insurance business, Allianz has decided
to no longer cover single-site coal-fired power plants and coal
mines that are being operated or planned as of 2018. Existing
contracts with such facilities will not be renewed when the current
contract expires.
Further ESG-related measures include our systematic engage-
ment with investee companies, launched in 2017 and rolled out in
2018, as well as ESG considerations in our selection and man-
agement of asset managers.
Data related to our ESG integration approach will be included in our
Group Sustainability Report 2018, to be published on 11 April 2019.
An in-depth overview of our approach and processes to integrating
ESG is published in the Allianz ESG Integration Framework at
> www.allianz.com/esg-framework.
In the Asset Management business segment, AllianzGI and
PIMCO have developed and implemented their own processes to
manage risks and capture opportunities from ESG issues. For proprie-
tary assets that AllianzGI and PIMCO manage on behalf of other
Allianz Group entities, the asset management entities' own ap-
proaches complement the Group requirements.
1_Cluster munitions, anti-personnel landmines, chemical and biological weapons.
2_Utilities generating 30 % or more of their electricity from coal, and mining companies generating 30% or more of their
revenue from thermal coal.
42
Annual Report 2018 - Allianz Group
B_Corporate Governance
Environmental matters
This section describes the impacts of environmental matters on our
business activities and relationships, as well as the impact of Allianz's
activities and relationships on the environment. Furthermore, we
describe our concepts for the management of these impacts and
related achievements.
CONCEPTS
Within our Corporate Responsibility Strategy, the pillar entitled "Low-
Carbon Economy" addresses climate change and environmental
issues, which were identified as one of the four most material risks
and megatrends. As a company dealing with risk, managing the
impacts on environmental matters is an important part of our ap-
proach. Climate change remains a major risk for the societies in which
we operate. It also directly affects our business, including everything
from our in-house operations to our investments and our insurance
products. We are committed to tackling the climate challenge by
supporting the transition to a low-carbon economy through our
investments and insurance solutions. In addition, we manage the
emissions from our operations and strive to remain a carbon-neutral
company.
natural disasters (e.g. earthquakes, extreme weather events, etc.).
At Allianz, we anticipate the risks of climate change. We care for our
customers through our insurance products, while using our leverage
as one of the world's largest institutional investors and insurers to
enable the transition to a low-carbon economy.
customer safety (through insurance products),
digitalization/automation,
Survey results showed that of the perceived megatrends and
risks Allianz should be addressing through its solutions and Corpo-
rate Responsibility Strategy, the most important are these:
About the report
This section has been compiled in accordance with the CSR Directive
Implementation Act (EU Directive 2014/95/EU). It focuses on the key
performance indicators (KPIs) that reflect our most material
sustainability issues. This year we have further sharpened our focus:
While still covering all matters and concepts, we decided to report
only on the most material non-financial KPIs and to include them in
the Corporate Governance section of the Annual Report. The KPIs
included are: Net Promoter Score (NPS), the Inclusive Meritocracy
Index (IMIX), and our environmental indicators (greenhouse gas
(GHG) emissions per employee and % of green electricity). Based on
our commitment to setting ourselves long-term climate targets, we are
currently developing indicators and targets for the carbon performance
of our proprietary investment portfolio for future reporting. For more
information please ::::CHECK:D:D:D:D:D:DC: The allianz.com/en/sustainability/low-
carbon-economy/decarbonization.
The structure and content of the report are based on the legal
requirements set out in the CSR legislation. It is also based on the
Global Reporting Initiative (GRI) Standards, but only reflects the
respective parts of the GRI Standards requirements. The concepts
contained herein are in line with the content of our 2018 Group
Sustainability Report (GSR) (to be published in April 2019), which is
compiled in accordance with the standards set out by the GRI.
The 2018 non-financial reporting section covers the entire
Allianz Group and also includes the relevant non-financial infor-
mation for Allianz SE. If Allianz SE's concepts and processes differ
from those applied by the Allianz Group, they are described separate-
All measures, activities, and key figures refer to the 2018 financial
year (1 January 2018 to 31 December 2018). Unless otherwise stated,
we use the control principle defined by the International Financial
Reporting Standards when determining the scope of our reporting on
behalf of our consolidated entities.
PricewaterhouseCoopers GmbH Wirtschaftsprüfungsgesellschaft
(PwC) has been engaged to perform a reasonable assurance
engagement on the 2018 non-financial information, with limited
assurance given to the environmental indicators (GHG emissions per
employee, % of green electricity). All 2017 data included in this report
has been assessed based on a limited assurance engagement in the
previous year. For the "Independent Practitioner's Report on a Limited
and Reasonable Assurance Engagement on Non-Financial Reporting"
please refer to > page 170.
Any references to information published outside the Group
Management Report and Allianz SE's Management Report are
supplementary, do not form an integral part of this non-financial
information, and are not subject to an assurance engagement (unless
specified in the respective document).
Corporate Responsibility Governance and
Strategy
At Allianz, we aim to create sustainable economic value by pursuing
a long-term approach to corporate governance, social responsibility,
and environmental stewardship. This is critical to our business success,
as we are committed to delivering on our promises to customers,
investors, and society as a whole. To deliver on our ambition of being
one of the most trusted financial institutions and a global sustainability
leader, we must continually adapt our business strategy to any issues
that arise.
CORPORATE RESPONSIBILITY GOVERNANCE
The highest governing body for sustainability-related issues at Allianz
is the Group ESG Board (ESG = Environment, Social, and Governance).
Established in 2012, it is comprised of three Allianz SE board members
and meets quarterly. The Group ESG Board is responsible for the
whole Corporate Responsibility agenda, including climate-related
topics, the integration of ESG into all business lines and core processes
dealing with insurance and investment, and the Allianz Group's
corporate citizenship activities. The three board members each
assume responsibility for specific sustainability topics; functional
departments directly provide the Group ESG Board with regular
updates on sustainability issues.
In addition to the Group ESG Board, there are other committees
under board member leadership which play an important role in our
decision-making processes:
-
The Group Finance and Risk Committee oversees risk manage-
ment and monitoring, including sustainability risk. The Committee
is the point of escalation for ESG-related topics, based on analysis
and deliberations within the ESG Board.
The Group Underwriting Committee monitors the underwriting
business and related risk management. It also develops new
underwriting policies and strategies.
Our group-level Corporate Responsibility (CR) management team is
responsible for managing the strategic framework for all group-wide
sustainability activities, developing and introducing relevant policies,
reporting on non-financial matters and supporting operating entities
(OES) in integrating the Group's strategic approach and policies.
The corporate responsibility function reports to the Head of
Group Communications and Corporate Responsibility at Allianz SE,
who in turn reports directly to the CEO of Allianz SE. This ensures close
alignment with the CEO's agenda.
Most matters described in this document are managed by the
Group CR team. If a matter is managed by another function, it is
highlighted in the relevant section.
Company description
For information on our business model, please refer to Business
Operations starting on > page 50.
Annual Report 2018 - Allianz Group
41
B_Corporate Governance
STAKEHOLDER ENGAGEMENT & MATERIALITY
As we are a multinational business, the challenges we face are in-
creasingly diverse and interconnected. Therefore we ensure our Cor-
porate Responsibility Strategy takes into account our stakeholders'
feedback, so we are able to respond to the most material issues we
face. Related activities focus on the four stakeholder groups most
immediately affected by our business activities: customers, employ-
ees, investors, and society as a whole. To succeed, we need to under-
stand and respond to the changing world in which we operate. Our
most recent materiality assessment was undertaken in 2018 to identi-
fy the issues perceived by our stakeholders as most important to our
business (for more details, please see our Sustainability Report 2018,
>> sect::::: ::::: >>> www.allianz.com/sustainability).
climate change/environment (e.g. climate-induced impacts,
biodiversity loss, etc.),
192.7
increased from € 3,000 thou to €3,251 thou; the amount¹ for the
Chairman of the Board increased from € 5,250 thou to € 5,687 thou.
The ratio of the Chairman of the Board's compensation against regular
board members' compensation remained at 1.75.
B_Corporate Governance
C
(397)
(399)
2
Expenses for premiums refunds (net)¹
86
(215)
301
Operating investments income (net)²
3,017
2,905
112
1_Refers to policyholder participation, mainly from APR business (accident insurance with premium refunds), and consists
of the investment-related part of "change in reserves for insurance and investment contracts (net)". For further
information, please refer to note 26 to the Consolidated Financial Statements.
2_The operating investment income (net) of our Property-Casualty business segment consists of the operating investment
result as shown in note 4 to the Consolidated Financial Statements and expenses for premium refunds (net)
(policyholder participation).
Our operating investment income (net) increased, mainly due to a
one-off effect in the investment result, net of policyholder participa-
tion of the German APR business, which was partially offset in the
underwriting result.
56
Investment expenses
(90)
(22)
(112)
Delta
Interest and similar income
(net of interest expenses)
3,329
3,371
(42)
Operating income from financial assets and liabilities
56
carried at fair value through income (net)
(78)
29
Operating realized gains (net)
160
248
(88)
Operating impairments of investments (net)
(49)
Annual Report 2018 - Allianz Group
C_Group Management Report
LIFE/HEALTH INSURANCE OPERATIONS
11.4
12.1
(259)
(131)
(0.7) %-p
Present value of new business
premiums (PVNBP)5
Our PVNBP increased by € 3,492 mn to € 62,961 mn. Most of this is
due to higher sales of our capital-efficient products in the German
life business, in our business with fixed index annuities in the United
States, and in most lines of business in Italy. In line with our product
strategy, premiums continued to shift towards capital-efficient
products.
Statutory premiums
On a nominal basis, statutory premiums went up 4.7%. This takes into
account unfavorable foreign currency translation effects of
€ 1,093 mn as well as negative (de-)consolidation effects of € 56 mn.
On an internal basis, statutory premiums increased by € 4,322 mn
or 6.4% to € 71,526 mn.
%
In the German life business, statutory premiums rose to
€ 22,511 mn. This increase - 6.6% on an internal basis
Present value of new business premiums (PVNBP) by lines of business
%
2018
2017
Delta
Guaranteed savings & annuities
Protection & health
18.0
resulted
2017
Return on equity³
2,837
KEY FIGURES
Key figures Life/Health¹
2018
2017
Delta
Statutory premiums²
€ mn
2,968
70,450
3,173
Operating profit
€ mn
4,152
4,412
Net income
€ mn
67,277
2018
€ mn
Our net income increased by € 495 mn, mainly driven by a higher
operating profit. The effect was only partially offset by a lower non-
operating result and higher income taxes.
(440)
Acquisition and administrative expenses (net)
Change in reserves for insurance and investment contracts
(net) (without expenses for premium refunds)¹
Underwriting result
(13,542)
(13,537)
(6)
(320)
(270)
(31,425)
(50)
2,011
568
Claims and insurance benefits incurred (net)
1_Consists of the underwriting-related part (aggregate policy reserves and other insurance reserves) of "change in
reserves for insurance and investment contracts (net)". For further information, please refer to note 26 to the
Consolidated Financial Statements.
Our accident year loss ratio stood at 70.1% - an improvement by 0.5
percentage points, compared to 2017. Much of this was due to a
decrease in losses from natural catastrophes: As they fell from
€ 1,111 mn to € 934 mn, the impact on our combined ratio improved
from the previous year's 2.4 percentage points to 1.9 percentage
points.
Excluding losses from natural catastrophes, our accident year
loss ratio improved by 0.1 percentage points to 68.1%. This is largely
owed to profitability improvements across the Allianz Group, which
were only partially offset by an increase in our large-loss exposure.
1_For further information on Allianz Property-Casualty figures, please refer to note 4 to the Consolidated Financial
Statements.
2,578
2_Represents claims and insurance benefits incurred (net) divided by premiums earned (net).
3_Represents acquisition and administrative expenses (net) divided by premiums earned (net).
(31,864)
1,927
The sharp rise of our underwriting result was mainly driven by a
lower expense ratio, a consequence of the efficiency programs we
had carried out across the Group. We also benefited from an absence
of high-severity losses from natural catastrophes (whereas in 2017 we
had been affected by storms Harvey, Maria, and Irma as well as the
California wildfires), and to a lesser extent from premium growth.
Run-off remained at the previous year's level, and our combined ratio
improved by 1.2 percentage points to 94.0%.
Underwriting result
€ mn
Premiums earned (net)
Accident year claims
Previous year claims (run-off)
2018
54
2017
48,305
47,242
1,063
(33,845)
(33,351)
(494)
1,981
Delta
23.9
4_Represents the total of acquisition and administrative expenses (net) plus claims and insurance benefits incurred (net),
divided by premiums earned (net).
Annual Report 2018 - Allianz Group
1,616
149
30
33
(2)
(1,660)
(1,509)
1,765
(151)
(2)
(4)
130
138
(8)
Our other result remained relatively stable compared to the previous
year.
Net income
(6)
5_We comment on the development of our gross premiums written on an internal basis, which means figures have been
adjusted for foreign currency translation and (de-)consolidation effects to provide more comparable information.
6_Based on the average exchange rates in 2018 compared to 2017.
Delta
2018
7_Represents claims and insurance benefits incurred (net) less previous year claims (run-off), divided by premiums earned
(net).
55
C_Group Management Report
The following operations contributed positively to the development of
our accident year loss ratio:
Reinsurance: 0.4 percentage points. This was due to a lesser
impact from natural catastrophes.
AGCS: 0.2 percentage points. A favorable development of
underlying and natural-catastrophe losses was partially offset by a
higher impact from large losses and weather losses.
Australia: 0.1 percentage points. The improvement is attributa-
ble to a favorable underlying claims development and the fact that in
2017, losses from natural catastrophes had been higher.
2017
One operation weighed on the development of our accident year loss
ratio:
Our run-off ratio remained at 4.1%; the main reserve releases
stemmed from our operations in Italy, Australia, and Reinsurance.
Total expenses amounted to € 13,542 mn in 2018, compared to
€ 13,537 mn in the previous year. Our expense ratio improved by a
healthy 0.6 percentage points to 28.0%, benefiting from efficiency
programs across the Group, changes in business mix, and premium
growth. Both the acquisition and the administrative expense ratio
contributed positively to this development.
Operating investment income (net)
Other result
€ mn
Fee and commission income
Other income
Fee and commission expenses
Other expenses
Other result
France: 0.3 percentage points. The accident year loss ratio
suffered from large claims on commercial property, as well as from
natural catastrophes such as storms and floods throughout the year.
(5.9)
14.7
14.4
(102)
(2)
Loadings from premiums as % of statutory
premiums
5.6
56
58
Operating impairments of investments (net)
(104)
(2,465)
(1,831)
5.8
(0.2)
Loadings from reserves as % of average
reserves 1,2
Investment expenses
(1,382)
(1,332)
(634)
(50)
Interest expenses
5,333
41
100
ཝཱཤཝ་
Interest and similar income
17,883
17,856
28
(387)
15
liabilities carried at fair value through
income (net)
(3,351)
(1,149)
(2,202)
Operating realized gains/losses (net)
4,945
Operating income from financial assets and
657
0.3
33
2 Yields are pro rata.
3_Unit-linked management fees, excluding asset management fees, divided by unit-linked reserves.
Investment margin in basis points23
87
97
(10)
Loadings from premiums grew as sales increased, driven particularly
by capital-efficient products in our German life business. Higher
sales in Italy and the Asia-Pacific region also contributed to this
development. The rise in loadings from reserves was mainly due to
higher reserve volumes in the United States, in our German life
business, and higher average reserves in France. Unit-linked
management fees went up, predominantly in Italy and Taiwan,
supported by the increase in the assets under management.
(291)
1_"Other" comprises the delta of out-of-scope entities, on the one hand, which are added here with their respective
operating profit and different line item definitions compared to the financial statements, such as interest paid on
deposits for reinsurance, fee and commission income, and expenses excluding unit-linked management fees on the
other hand. For 2018, it also includes a change in our U.S. fixed index annuity business, with € 683 mn shifted from
"Impact of change in DAC" into the "Investment margin" - for further information please refer to note 2 to the
Consolidated Financial Statements, chapter "Reserves for insurance and investment contracts", paragraph "Aggregate
policy reserves" and Reconciliations.
reserves.
3 Yields are pro rata.
Our investment margin decreased, which was largely attributable to
a lower trading result in the United States, due to a deterioration of
market conditions. Further contributing factors included a lower
trading result, higher equity impairments, and lower realizations on
debt securities in the German life business (after the sale of Italian
government bonds had increased that figure in 2017). Most of this
effect was offset by a lower policyholder participation.
1_Loadings and fees include premium and reserve based fees, unit-linked management fees, and policyholder participa-
tion in expenses.
2_The investment margin is defined as IFRS investment income net of expenses, less interest credited to IFRS reserves and
policyholder participation (including policyholder participation beyond contractual and regulatory requirements mainly
for the German life business).
Annual Report 2018 - Allianz Group
2_Investment margin divided by the average of current end-of-period and previous end-of-period aggregate policy
0.3
4,112
Investment margin
Other¹
942
405
538
Unit-linked management fees as % of
average unit-linked reserves².3
Technical interest
(8,781)
3,821
(8,745)
0.5
0.5
Policyholder participation
(3,867)
(7,519)
3,651
1 Aggregate policy reserves and unit-linked reserves.
(36)
Our operating profit increased in 2018: We recorded a significant
increase in underwriting result as well as an increase in operating
investment income, supported by one-off effects.
5,989
Loadings and fees¹
2018
2017
Delta
Loadings and fees
6,090
5,989
100
€ mn
Investment margin
4,112
(291)
Expenses
Technical margin
(7,003)
(6,860)
(143)
1,211
3,821
1,238
Operating profit by profit sources
In the Asia-Pacific region, statutory premiums amounted to
€ 5,769 mn - up 15.4% on an internal basis. It was largely due to
stronger sales in our business with unit-linked products in Taiwan.
0.4
Unit-linked without guarantee
Capital-efficient products
25.8
25.6
0.1
41.5
36.1
OPERATING PROFIT BY PROFIT SOURCES
5.4
100.0
Total
mainly from higher sales of capital-efficient products. Statutory Operating profit
premiums in the German health business increased to € 3,455 mn,
translating into 2.8% growth on an internal basis - much of which
resulted from the acquisition of new customers for our supple-
mentary health care coverage.
Statutory premiums in the United States stood at € 10,832 mn,
up 16.2% on an internal basis. This was caused by an increase in sales
of fixed index annuities due to favorable product changes coupled
with sales initiatives.
In Italy, statutory premiums grew to € 11,588 mn - a 3.8% in-
crease on an internal basis. It was attributable to higher production
volumes in all our lines of business except for unit-linked products
without guarantee, with the largest part resulting from higher sales
in capital-efficient products.
In France, statutory premiums dropped to € 8,364 mn. This de-
crease - 1.1% on an internal basis - was predominantly due to a
decline in sales of the unit-linked products without guarantee.
Increased sales in our business with protection & health products
partly compensated for this development.
100.0
6,090
(27)
33
Investment margin
€ mn
2018
2017
Delta
2018
2017
€ mn
Delta
3,915
3,871
Loadings from reserves
1,477
1,462
Unit-linked management fees
698
Loadings from premiums
Impact of changes in DAC
Operating profit
Loadings and fees
LOADINGS AND FEES¹
(68)
101
4,152
4,412
(259)
Our operating profit decreased, driven by a decline in our investment
margin. This was largely due to higher impairments and decreased
trading result mainly in our U.S. and German businesses - partly offset
by higher income from unit-linked business in Italy and Taiwan.
1_For further information on Allianz Life/Health figures, please refer to note 4 to the Consolidated Financial Statements.
2 Statutory premiums are gross premiums written from sales of life and health insurance policies, as well as gross receipts
from sales of unit-linked and other investment-oriented products, in accordance with the statutory accounting practices
applicable in the insurer's home jurisdiction.
INVESTMENT MARGIN²
3_Represents the ratio of net income to the average total equity, excluding unrealized gains/losses on bonds, net of
shadow accounting, as well as attributable goodwill, at the beginning of the year and at the end of the year.
5 PVNBP before non-controlling interests.
6_The purpose of the analysis of Life/Health operating profit sources is to explain movements in IFRS results by analyzing
underlying drivers of performance, consolidated for the Life/Health business segment.
Annual Report 2018 - Allianz Group
57
58
58
C_Group Management Report
4 In this section, our comments in the following section on the development of statutory gross premiums written refer to
values determined "on an internal basis", i.e. adjusted for foreign currency translation and (de-) consolidation effects, in
order to provide more comparable information
Ireland: Gross premiums of € 568 mn, corresponding to a 6.7%
decrease on an internal basis. It was mainly caused by negative
volume effects in our motor and commercial liability insurance
business.
One operation weighed on internal growth:
Allianz Partners: Gross premiums went up 4.7 % on an internal
basis, totaling € 4,693 mn. Much of this increase was owed to positive
volume effects at our U.S. travel business and Worldwide Care.
Indonesia
Japan²
Laos
Morocco
Nigeria
Senegal
Togo
Hong Kong2
Asset Management
United States
Malaysia
Pakistan
Canada
Brazil
Philippines
Singapore²
Europe
Germany
North and Latin America
Sri Lanka
China
Mali
Europe
Italy
Greece
Turkey
France
Belgium
The Netherlands
Asia Pacific
Luxembourg
Cameroon
Central Africa
Congo Brazzaville
Ghana
Ivory Coast
Kenya
Madagascar
Burkina Faso
Europe and Asia Pacific
Taiwan
India
Japan
Allianz Partners
--
Hong Kong
Allianz Partners
--
US life insurance
Asia Pacific
United States
■Property-Casualty
Life/Health
Banking Retail Asset Management Institutional Asset Management
1_This overview is based on our organizational structure as of 31 December 2018.
2_Property-Casualty business belongs to Allianz Global Corporate & Specialty.
Annual Report 2018 - Allianz Group
51
C_Group Management Report
Taiwan
Singapore
China
Australia
Thailand
Colombia
Mexico
Brazil
Insurance Iberia & Latin America
and Allianz Partners
Iberia
Austria
France
Italy
Ireland
Sweden
Luxembourg
Spain
Portugal
Switzerland
Belgium
Latin America
The Netherlands
Argentina
United Kingdom
Spain
TARGET SETTING AND MONITORING
Insurance Western & Southern
Allianz SE has a divisional Board structure based on functional and
business responsibilities. Business-related divisions reflect our business
segments Property-Casualty, Life/Health, Asset Management, and
Corporate and Other. In 2018 they were overseen by five board
members. The following divisions focus on Group functions, along
with business-related responsibilities: Chairman of the Board of Man-
agement; Finance, Controlling and Risk; Investment Management;
Operations; Human Resources, Legal, Compliance and M&A; and
Business Transformation¹.
- Western & Southern Europe and
Asia Pacific
- Iberia & Latin America
- USA
- Global Insurance Lines & Anglo Markets,
Middle East and Africa
CORPORATE AND OTHER
- Holding & Treasury
- Banking
- Alternative Investments
German Speaking Countries and
Central & Eastern Europe
We offer a wide range of property-casualty and life/health insurance
products to both retail and corporate customers. For the Property-
Casualty business segment, these include motor, accident, property,
general liability, travel insurance and assistance services; the
Life/Health business segment offers savings and investment-oriented
products in addition to life and health insurance. We are the leading
property-casualty insurer worldwide and rank among the top five in
the life/health insurance business². Our key markets (in terms of
premiums) for both property-casualty and life/health insurance are
Germany, France, Italy, and the United States.
Asset Management
Our two major investment management entities, PIMCO and
AllianzGI, operate under the governance of Allianz Asset Manage-
ment (AAM). We are one of the largest asset managers in the world
that actively manage assets. Our offerings cover wide range of
equity, fixed income, and alternative investment products and
solutions. Our core markets are the United States, Germany, France,
Italy, the United Kingdom, and the Asia-Pacific region. With the
transfer of Allianz Capital Partners (ACP), our proprietary private equi-
ty, renewable energy and infrastructure manager, from Corporate and
Other to AllianzGI, we are expanding Allianz Gl's product offering
range also for third-party alternative equity business.
Corporate and Other
The Corporate and Other business segment's activities include the
management and support of the Allianz Group's businesses through
its central holding functions, as well as Banking and Alternative
Investments.
HOLDING & TREASURY
Holding & Treasury manages and supports the Group's businesses
through its strategy, risk, corporate finance, treasury, financial
reporting, controlling, communication, legal, human resources,
technology, and other functions.
BANKING
Most of our insurance markets are served by local Allianz
companies. However, some business lines such as Allianz Global
Corporate & Specialty (AGCS), Allianz Partners (AP), and Credit
Insurance - are run globally.
Our banking operations, which place a primary focus on retail clients,
support our insurance business and complement the products we
offer in Italy, France, and Bulgaria. The sale of Oldenburgische
Landesbank AG was closed on 7 February 2018. Hence, we no longer
have any banking operations in Germany.
LIFE/HEALTH
- Asset Management
49
Annual Report 2018 - Allianz Group
C_Group Management Report
BUSINESS OPERATIONS
Allianz Group structure
Allianz SE and its subsidiaries (the Allianz Group) offer property-
casualty insurance, life/health insurance, and asset management
products and services in over 70 countries, with the largest of our
operations located in Europe. The Allianz Group serves more than 92
million private and corporate customers. Allianz SE, the parent com-
pany of the Allianz Group, has its headquarters in Munich, Germany.
The Allianz Group's structure reflects both our business seg-
ments and geographical regions. Business activities are organized
by product and type of service, based on how these are strategical-
ly managed: insurance activities, asset management activities, and
corporate and other activities. Due to differences in the nature of
products, risks, and capital allocation, insurance activities are
further divided into property-casualty and life/health categories. In
accordance with the responsibilities of the Board of Management,
each of the insurance categories is grouped into regional repor-
table segments. Corporate and other activities are divided into
three different reportable segments in order to differentiate between
the respective products, risks, and capital allocation. In 2018, the
Allianz Group had 13 reportable segments.
Insurance operations
Allianz Group structure -
PROPERTY-CASUALTY
Central & Eastern Europe
Western & Southern Europe and
Asia Pacific
Iberia & Latin America and
Allianz Partners
Global Insurance Lines & Anglo Markets,
Middle East and North Africa and Africa
ASSET MANAGEMENT
business segments and reportable segments¹
For further information on Board of Management members and
their responsibilities, please refer to Mandates of the Members of the
Board of Management on > page 10.
ALTERNATIVE INVESTMENTS
1_For further information on organizational changes, please refer to the Executive Summary of 2018 Results.
2_Based on currently available peer data. Final peer analysis not available until after publication of this Annual Report.
Reinsurance
Czech Republic
Middle East
Hungary
Poland
Egypt
Lebanon
Romania
Croatia
Slovakia
Russia
Benin
Ukraine
Saudi Arabia
Our steering
BOARD OF MANAGEMENT
AND ORGANIZATIONAL STRUCTURE
Africa
Alternative Investments provides global alternative investment
management services in the real estate sector, mostly on behalf of
our insurance operations. ACP was transferred to AllianzGI at the
start of 2018.
Bulgaria
Allianz Global Corporate &
Specialty
50
50
Annual Report 2018 - Allianz Group
C_Group Management Report
Worldwide presence and business segments
Market presence of our business operations¹
Insurance German Speaking Countries,
Insurance Central & Eastern Europe
Credit Insurance
German Speaking Countries
Switzerland
Central & Eastern Europe
Austria
Global insurance lines & Anglo markets,
Insurance Middle East and Africa
Global insurance lines & Anglo markets
United Kingdom
Australia
Ireland
Germany
The Allianz Group steers its operating entities and business segments
via an integrated management and control process. It begins with
the definition of a business-specific strategy and goals, which are
discussed and agreed upon between the Holding and operating
entities. Based on this strategy, our operating entities prepare three-
year plans which are then aggregated to form the financial plans for
the business divisions and for the Allianz Group as a whole. This plan
also forms the basis for our capital management. The Supervisory
Board approves the plan and sets corresponding targets for the
Board of Management. The performance-based remuneration of the
Board of Management is linked to short-term, mid-term, and long-
term targets to ensure effectiveness and emphasize sustainability. For
further details about our remuneration structure, including target
setting and performance assessment, please refer to the Remunera-
tion Report starting on > page 23.
We continuously monitor our business performance against
these targets through monthly reviews - which cover key opera-
tional and financial metrics to ensure we can move quickly and
take appropriate measures in the event of negative developments.
The Allianz Group uses operating profit and net income as key
financial performance indicators across all its business segments.
Other indicators include segment-specific figures, such as the com-
bined ratio for Property-Casualty, return on equity¹ for Life/Health,
and the cost-income ratio for Asset Management. To steer and
control new business in our business segments Property-Casualty
and Life/Health, we use Return on Risk Capital (RORC)². We also
use new business margins for Life/Health. For a comprehensive view
of our business segment performance, please refer to the chapters
from > page 53 onwards.
Besides performance steering, we also have a risk steering pro-
cess in place, which is described in the Risk and Opportunity Report
starting on page 74.
Expense ratio³
Combined ratio
€ mn
2018
2017
Delta
2018
Loss ratio²
2017
€ mn
53,636
52,262
1,373
Underwriting result
2,578
2,011
Delta
568
Net income
Gross premiums written
There were also some minor reallocations between the report-
able segments in the course of 2018.
Other parts of the Group Management Report
-
The Group Management Report also entails the following sections:
Statement on Corporate Management pursuant to §315d and
$289f of the HGB starting on > page 17,
Takeover-Related Statements and Explanations starting on
> page 20, and the
Remuneration Report starting on > page 23.
8_For further information on shareholders' equity, please refer to the Balance Sheet Review.
Operating profit
9_For further information on the share buy-back program, please refer to note 19 to the Consolidated Financial
Statements.
Annual Report 2018 - Allianz Group
C_Group Management Report
PROPERTY-CASUALTY INSURANCE OPERATIONS
KEY FIGURES
Key figures Property-Casualty¹
Operating profit
Operating profit
54
Effective 1 January 2018 and 1 April 2018, the Allianz Group reorganized
the structure of its insurance activities to reflect the changes in the
responsibilities of the Board of Management. Middle East and Africa
were reallocated to the reportable segment Global Insurance Lines
& Anglo Markets, Middle East and Africa. In the Property-Casualty
business segment, the reportable segment Iberia & Latin America
was combined with the reportable segment Allianz Partners to form
the reportable segment Iberia & Latin America and Allianz Partners.
Any previously reported information has been adjusted to reflect this
change in the composition of the Allianz Group's reportable seg-
ments.
€ mn
5,053
672
%
28.0
28.7
(0.6)%-p
1 Consists of fee and commission income/expenses and other income/expenses.
%
5,053
94.0
(1.2) %-p
Gross premiums written
On a nominal basis, we recorded an increase in gross premiums
written compared to the previous year.
This includes unfavorable foreign currency translation effects of
€ 1,673 mn and positive (de)consolidation effects of € 61 mn. On an
internal basis, our premiums went up 5.7%, driven by a positive
volume effect of 4.0% and a positive price effect of 1.7%.
The following operations contributed positively to internal growth:
AGCS: Gross premiums went up to € 8,186 mn - an increase of
11.9% on an internal basis. It was largely owed to positive volume
effects at Allianz Risk Transfer.
Germany: Gross premiums amounted to € 10,477 mn, corres-
ponding to an internal growth of 4.0 %. It was mainly caused by posi-
tive volume effects in our motor and commercial property insurance
as well as price effects in our motor insurance business.
95.2
5,725
5,725
(0.6) %-p
672
Operating investment income (net)
3,017
2,905
112
€ mn
4,302
Operating profit
3,807
Other result¹
130
138
(8)
%
66.0
66.5
495
RECENT ORGANIZATIONAL CHANGES
Other information
For a more detailed description of the results generated by
our business segments - specifically, Property-Casualty insurance
operations, Life/Health insurance operations, Asset Management,
and Corporate and Other - please consult the respective chapters
on the following pages.
1 At the date of the publication of this report, not all general market data for the year 2018 used in the chapter Business
Environment was final. Also, please note that the information provided in this chapter is based on our estimates.
Annual Report 2018 - Allianz Group
53
C_Group Management Report
EXECUTIVE SUMMARY OF 2018 RESULTS
KEY FIGURES
Key figures Allianz Group¹
Along with worldwide capital market development, we saw
long-term net inflows during most of the year. Net flows turned
around especially in the U.S. and Europe at year-end, as the strongly
increased market volatility led to a de-risking of investment portfolios
in almost all asset classes into money market and other lower-risk
assets. Overall, 2018 long-term net flows remained positive, but on
the lowest level since years. Net inflows were strongly driven by
passive products, while actively managed vehicles recorded net
outflows in almost all asset classes.
Total revenues²
Net income³
thereof: attributable to shareholders
Solvency II capitalization ratio4.5
Return on equity
Earnings per share
Diluted earnings per share
Earnings summary
Operating profit³
2018
Until September, U.S. equity indices performed rather well, while the
development of other major markets, especially in Europe, was more
volatile. In the fourth quarter, however, almost all equity markets
turned downwards, driven by increased fear of a slowdown of the
global economy and heightened political risks, which led to substan-
tial losses globally for the entire year. In the U.S., fixed-income indices
turned downwards as the U.S. Federal Reserve increased the federal
funds rate in four steps in 2018, backed by solid U.S. economic data.
In the life sector, global premium growth was held back by develop-
ments in China, the second biggest life insurance market: Tighter
regulation of certain wealth-management-products led to market
stagnation in terms of premium growth. Most other markets, how-
ever, saw a modest uptick in premium growth. Overall and at a
global scale, premiums rose by an estimated 3% to 4% in 2018 (in
nominal terms and adjusted for foreign currency translation
effects). Global industry profitability remained challenging as the
low yield environment continued in 2018.
Non-financial key performance indicators (KPIs) are mainly used
for the sustainability assessment that we conduct when determining
mid-term bonus levels. In line with our Renewal Agenda, KPIs mainly
represent three key levers: True Customer Centricity, Digital by
Default, and Inclusive Meritocracy. Examples include the Allianz
Engagement Survey and Net Promoter Score (NPS³) results and
diversity development. For further information on non-financial
KPIs, please refer to the Combined Separate Non-Financial Report
for the Allianz Group and Allianz SE (according to §§289b (3), 315b
(3), sentence 1, sentence 2 in conjunction with § 298 (2) of the HGB)
on > page 41.
1 Excluding unrealized gains/losses on bonds net of shadow accounting.
2_The return on risk capital is defined as the present value of future real world profits on the capital requirement (including
buffer to regulatory requirements) held at local level.
3_NPS is a measurement of customers' willingness to recommend Allianz. Top-down NPS is measured regularly according
to global cross-industry standards and allows benchmarking against competitors in the respective markets.
52
Annual Report 2018 - Allianz Group
C_Group Management Report
Business environment 2018 for the asset
management industry
BUSINESS ENVIRONMENT
The world economy continued to grow strongly in 2018. Global
economic output increased by an estimated 3.1%. While economic
momentum in the United States even accelerated in the course of
the year, due to a strongly procyclical fiscal policy, growth weakened
in most other regions. The U.S. economy expanded by about 2.9%.
With an increase of 1.9%, growth in the Eurozone was clearly weaker
than in the United States. Growth deceleration was particularly
pronounced in the emerging markets. Many emerging economies
registered strong capital outflows as a result of higher interest rates
in the United States.
2018 was characterized by an elevated level of political
uncertainty. The trade conflict with the United States intensified,
contributing to a deterioration in economic sentiment. In Europe,
political risk increased with regard to the new Europe-skeptical
government in Italy and Brexit. Following a prolonged period of
very low market volatility, stock markets experienced several epi-
sodes of spikes in volatility in 2018. Major stock markets around
the globe registered losses. On the monetary policy front, in
December the European Central Bank announced the termination
of its bond purchasing program at year-end. In the United States,
the Federal Reserve continued to normalize its monetary policy
stance. It increased the federal funds rate range four times, each
time by 25 basis points, bringing it to a range of 2.25% to 2.5%
while continuing its balance sheet normalization program. Yields
on 10-year German government bonds closed the year at 0.25%,
17 basis points below the level reached at the end of 2017. The
U.S. Dollar-to-Euro exchange rate was 1.15 at the end of 2018 (end
of 2017: 1.20).
Business environment 2018 for the insurance
industry
2018 proved to be a year of transition for the insurance industry. The
contours of a new market order have become ever more visible as
parameters of risk, competition, and legislation changed significantly.
Cyber and climate change have come to the fore in the risk
landscape. 2018 saw a surge in data breaches and privacy scandals.
Climate-change-induced natural disasters remained at an elevated
level: 2018 was the fourth-costliest year since 1980 for the insurance
industry. In the competitive landscape, data have become the crucial
factor for value creation, enabling new and established technology
firms to attack along the insurance value chain. Last but not least, the
insurance industry had to cope with a more fragmented legislative
environment, characterized by trade wars, tariffs and Brexit. All
these disruptions kept the insurance industry on their toes to update
business models and invest in new technologies and resilience. In
2018, these efforts were at least supported by economic tailwinds
of premium growth.
In the property-casualty sector, premium growth was robust in most
markets, on the back of strong economic growth. Emerging markets,
despite economic woes in some, remained the growth engine for the
global market, registering double-digit growth as a whole. Overall
and at a global scale, premiums rose by an estimated 5% to 6% in
2018 (in nominal terms and adjusted for foreign currency translation
effects). Global industry profitability remained under pressure, as
catastrophe losses and low investment yields were a drag.
Economic environment 2018¹
2017
€ mn
130,557
17.30
15.23
2.07
སྒྱུག「བ། ཁ།「ཁ]
MANAGEMENT'S ASSESSMENT OF 2018 RESULTS
Our total revenues grew by 6.1% on an internal basis, compared to
2017. Our Life/Health business segment registered strong sales of
fixed index annuities in the United States and of capital-efficient
products in Germany, while an internal premium growth in our
Property-Casualty business segment was driven by AGCS, Germany
and Allianz Partners. An increase in assets under management
(AuM) driven revenues led to revenue growth in our Asset
Management business segment.
Our operating investment result decreased by € 4,634 mn to
€ 19,289 mn. This decrease was driven by a lower trading result, and
higher equity impairments due to the downturn of major equity
markets.
Our operating profit increased by 3.7%, compared to 2017, and
was in the upper end of the target range for 2018. This growth was
largely attributable to our Property-Casualty business segment,
where favorable developments such as a decreased expense ratio,
lower claims from natural catastrophes, and premium growth result-
ed in a sizable increase in operating profit. Our Asset Management
business segment also recorded an increase in operating profit, due
to higher AuM-driven revenues. Life/Health reported an operating
profit decrease, a consequence of lower investment margins in our
German and the U.S. businesses. The operating result in our Corpo-
rate and Other business segment declined as well, as the sale of
Oldenburgische Landesbank AG led to a drop in operating revenue.
0%-p
1.4%-p
2.19
Our non-operating result decreased by € 163 mn, settling at a
loss of € 1,113 mn. A negative impact from the sale of our traditional
3 The Allianz Group uses operating profit and net income as key financial indicators to assess the performance of its
business segments and of the Group as a whole.
4 Figures as of 31 December.
5_Risk capital figures are group diversified at 99.5 % confidence level.
6_Represents the ratio of net income attributable to shareholders to the average shareholders' equity excluding unrealized
gains/losses on bonds, net of shadow accounting, at the beginning of the year and at the end of the year.
7_Internal total revenue growth excludes the effects of foreign currency translation as well as acquisitions and disposals.
Please refer to page 72 for a reconciliation of nominal total revenue growth to internal total revenue growth for each of
our business segments and the Allianz Group as a whole.
life insurance portfolio in Taiwan was partially offset by lower
restructuring charges.
Income taxes decreased by € 245 mn to € 2,696 mn, due to the
U.S. tax reform which led to a reduction in the corporate income tax
rate from 35% in 2017 to 21% in 2018. The effective tax rate dropped
to 25.9% (2017: 29.0%).
Net income increased, as operating profit growth and lower in-
come taxes more than offset the decline in our non-operating result.
Our shareholders' equity³ fell € 4.3 bn to € 61.2 bn, largely due to
a reduction in unrealized gains and losses (net). In addition, Allianz SE
purchased approximately 15.8 million in own shares (with a total
volume of € 3.0 bn') in the course of 2018 as part of two recent share-
buy-back programs. Our Solvency II capitalization ratio remained
stable compared to year-end 2017.
1_For further information on Allianz Group figures, please refer to note 4 to the Consolidated Financial Statements.
2_Total revenues comprise statutory gross premiums written in Property-Casualty and Life/Health, operating revenues in
Asset Management, and total revenues in Corporate and Other (Banking).
15.24
17.43
11.8
126,149
Delta
4,408
€ mn
11,512
11,097
415
€ mn
7,703
7,207
496
€ mn
7,462
6,803
659
229
229
13.2
GROUP MANAGEMENT REPORT
1_This member of the Board of Management also oversees Insurance Iberia & Latin America and Allianz Partners.
German Speaking Countries and
2018
Administrative expenses (net), excluding
324
6,408
6,732
Operating revenues
(14)
acquisition-related expenses
33
356
5,938
6,294
Other net fee and commission income
Other operating revenues
(18)
437
19
419
(4,202)
(234)
The increase in our net income of € 376 mn was due to a higher
operating profit as well as to a lower effective tax rate, mostly due to
the U.S. tax reform.
Other operating revenues decreased, which was largely due to a
less favorable foreign currency translation result and the sale of a
joint venture in 2017.
Other net fee and commission income rose, driven by higher
average third-party AuM, mostly at PIMCO but also slightly at
AllianzGl. Third-party AuM-driven margins also increased, mainly due
to a more favorable asset mix.
We recorded lower performance fees, due to a decrease in
PIMCO's fees, reflecting weaker hedge funds and separate accounts.
Allianz Gl's performance fees increased, due to mostly operating-
profit-neutral carried interest from ACP.
Our operating revenues increased by 5.1% on a nominal basis. This
reflects unfavorable foreign currency translation effects and the
inclusion of ACP as of 1 January 2018 as well as the sale of AllianzGI
Korea at the end of the third quarter of 2017. On an internal basis²
operating revenues grew by 5.8%.
Operating revenues
(3,968)
90
2,530
Operating profit
(234)
(3,968)
(4,202)
Operating expenses
2,440
Operating profit
Performance fees
2017
Favorable foreign currency translation effects amounted to € 59 bn.
Overall, total AuM were stable, as the positive effects from
foreign currency translation and the ACP onboarding were able to
compensate for the negative effects from "market and dividends"
and net outflows.
Positive effects from consolidation, deconsolidation, and other
adjustments added € 24 bn to total AuM. This is mainly related to
Allianz Capital Partners (ACP), which was transferred from the Corpo-
rate and Other business segment to the Asset Management business
segment (AllianzGI) as of 1 January 2018, adding Allianz Group
assets of € 23 bn to Allianz Gl's total AuM.
-
Net outflows³ of total assets under management (AUM) amounted to
€ 15 bn in 2018, of which € 3 bn concerned third-party AuM (2017:
€ 150 bn net inflows). The outflows were attributable to PIMCO
(€ 21 bn total and € 8 bn third-party), most of which occurred in the
fourth quarter of 2018. AllianzGI, on the other hand, recorded total
net inflows of € 6 bn and third-party net inflows of € 4 bn for the year.
Negative effects from "market and dividends"4 amounted to
€ 67 bn. € 38 bn were due to PIMCO and mainly related to fixed-
income assets. € 28 bn mostly referred to Allianz Gl's equities and
albeit to a lesser extent - to multi-assets.
2 "Other" is composed of asset classes other than equity, fixed income and multi-assets, e.g. money markets,
commodities, real estate investment trusts, infrastructure investments, private equity investments, hedge funds, etc.
1_The term "multi-assets" refers to a combination of several asset classes (e.g. bonds, stocks, cash and real property)
used as an investment. Multi-asset class investments increase the diversification of an overall portfolio by distributing
investments over several asset classes.
In the following section we focus on the development of third-party
assets under management.
1
1,961
24
81
105
(2)
163
1,960
Delta
As of 31 December 2018, the business units' shares in third-
party AuM remained stable: 77.8% were attributable to PIMCO
(31 December 2017: 76.8%) and 22.2% to AllianzGI
(31 December 2017: 23.2%). The slight shift towards PIMCO was
due to positive foreign currency translation effects, overcompensat-
ing negative effects from "market and dividends" and net outflows.
At AllianzGI, positive foreign currency translation effects and net
inflows could not outweigh negative effects from "market and
dividends" that occurred mainly in the fourth quarter of 2018.
Mutual funds had a 59.3% share in third-party AuM
(31 December 2017: 59.4%), while separate accounts were at 40.7%
(31 December 2017: 40.6%).
2018
€ mn
Asset Management business segment information
The overall three-year rolling investment performance¹ of our
Asset Management business declined over the year, with 85% of
third-party assets outperforming their respective benchmarks
(31 December 2017: 91%). The decline was mostly driven by
Allianz Gl's three-year rolling investment performance, which went
down from 75% to 51%. PIMCO's three-year rolling investment
performance also decreased slightly from 95% to 93%, but remained
on a high level.
C_Group Management Report
Annual Report 2018 - Allianz Group
The share of fixed-income assets rose from 76.4% at the begin-
ning of the year to 77.9%. This was mainly due to positive foreign
currency translation effects and - to a lesser extent - to positive
effects from consolidation, deconsolidation, and other adjustments.
Together, they outweighed the negative effects from "market and
dividends" as well as the net outflows. The share of equities declined
from 9.4% to 8.3%. This was driven by negative effects from "market
and dividends". The share of multi-assets was stable at 10.2%
(31 December 2017: 10.2%) and other AuM declined to 3.6%
(31 December 2017: 4.0%).
60
5_Mutual funds are investment vehicles (in the United States, investment companies subject to the U.S. code; in Germany,
vehicles subject to the "Standard-Anlagerichtlinien des Fonds" Investmentgesetz) where the money of several individual
investors is pooled into one account to be managed by the asset manager, e.g. open-end funds, closed-end funds.
Separate accounts are investment vehicles where the money of a single investor is directly managed by the asset
manager in a separate dedicated account (e.g. public or private institutions, high net worth individuals, and corporates).
6_Based on the location of the asset management company.
4 "Market and dividends" represents current income earned on the securities held in client accounts, as well as changes in
the fair value of these securities. This also includes dividends from net investment income and from net realized capital
gains to investors of both open-ended mutual funds and closed-end funds.
3_Net flows represent the sum of new client assets, additional contributions from existing clients including dividend
reinvestment -, withdrawals of assets from and termination of client accounts, and distributions to investors.
2_Represents operating expenses divided by operating revenues.
1_For further information on our Asset Management figures, please refer to note 4 to the Consolidated Financial
Statements.
As for the regional allocation of third-party AuM, shares shifted
towards America (56.3%), while Europe's share declined (32.2%) and
that of the Asia-Pacific region remained roughly stable (11.6%)
(31 December 2017: 53.4%, 35.1% and 11.5%, respectively). The shift
was primarily driven by positive foreign currency translation effects
and third-party AuM net inflows in America.
60
160
Our operating profit increased by 3.7% on a nominal basis and 6.9%
on an internal basis?. This was mainly due to growth in operating
revenues. This positive development was only partly offset by
increased operating expenses.
Our cost-income ratio increased due to the inclusion of ACP, in-
vestments in business growth as well as lower performance fees.
(936)
(938)
(103)
(2,767)
(2,870)
102
(1)
1,831
Delta
2017
2018
Operating result
Operating expenses
Operating revenues
1,933
BANKING
680
(338)
56
Operating result
(111)
Operating expenses
398
167
1,018
Operating revenues
(46)
96
51
292
(922)
(629)
ALTERNATIVE INVESTMENTS
The increase in operating expenses was connected to higher
personnel expenses, mainly at AllianzGI and particularly due to a
mostly operating-profit-neutral rise associated with the ACP transfer.
In addition, non-personnel expenses increased, largely due to PIMCO:
This was partly attributable to investments in business growth.
Operating result
Operating revenues
2018
Delta
Net income (loss)
Operating result
Operating expenses
Operating revenues
2017
€ mn
KEY FIGURES
CORPORATE AND OTHER
C_Group Management Report
61
Annual Report 2018 - Allianz Group
1 Three-year rolling investment performance reflects the mandate-based and volume-weighted three-year investment
success of all third-party assets that are managed by Allianz Asset Management's portfolio-management units. For
separate accounts and mutual funds, the investment success (valued on the basis of the closing prices) is compared with
the investment success prior to cost deduction of the respective benchmark, based on various metrics. For some mutual
funds, the investment success, reduced by fees, is compared with the investment success of the median of the respective
Morningstar peer group (a position in the first and second quartile is equivalent to outperformance).
2_Operating revenues/operating profit adjusted for foreign currency translation and (de-)consolidation effects.
Key figures Corporate and Other¹
Operating expenses
2,767
(468)
HOLDING & TREASURY
€ mn
Key figures reportable segments
Our operating result declined slightly in 2018, due to a lower con-
tribution from Banking, a consequence of the sale of Oldenburgische
Landesbank AG in February 2018. Lower contribution from our
reportable segment Alternative Investments was mainly related to
the transfer of Allianz Capital Partners (ACP) from the Corporate
and Other business segment to the Asset Management business
segment (AllianzGI), effective 1 January 2018.
Earnings summary
(1)
3,235
(1,293)
(49)
(783)
(831)
419
(4,018)
(3,599)
(1,294)
(21)
164
143
83
367
449
(48)
927
879
793
(345)
2,030
Delta
2017
2018
3 Yields are pro rata.
2 Aggregate policy reserves and unit-linked reserves.
2,375
1_PVNBP before non-controlling interests.
743
4,152
Capitalization of DAC
2018
€ mn
Impact of change in DAC
Our net income decreased by € 131 mn. This was due to the lower
operating profit as well as to the sale of our traditional life insurance
portfolio in Taiwan. The latter had a negative net impact of € 218 mn,
partly offset by lower income taxes.
Net income
50
The operating profit in our guaranteed savings & annuities line of
business dropped, largely driven by the investment margins in our
traditional variable annuity business in the United States, and in our
German life business, as well as by a reclassification of a unit-linked
product component to the unit-linked without guarantee line of
business in France. A decrease in operating profit in our protection &
health line of business was mainly driven by lower technical margins
in France, and in the United States. The higher operating profit in our
unit-linked without guarantee line of business was primarily due to
higher unit-linked management fees in Italy and Taiwan, with a
reclassification of a unit-linked product component from the guaran-
teed savings & annuities line of business in France contributing to the
positive effect. The operating profit in the capital-efficient products
line of business went up. Much of this increase was contributed by
our German life business.
IMPACT OF CHANGE
Our technical margin dropped slightly, driven predominantly by one-
off reserve adjustments in the United States, higher loss ratios due to
higher claims in our protection & health business, and one-off effects
in France. Positive effects from the Asia-Pacific region and from
Switzerland partly compensated for this development.
TECHNICAL MARGIN²
The increase in acquisition expenses and commissions was driven by
a growth in sales mainly of fixed index annuities in the United States
and of capital-efficient products in our German life business. Other
factors included higher production in Italy, especially in the banc-
assurance channel with unit-linked products. Administrative and
other expenses decreased slightly, mainly due to lower legal accruals
in the United States, and smaller one-off improvements in the Ger-
man health business.
(259)
4,412
IN DEFERRED ACQUISITION COSTS (DAC)³
1,827
(0.4)
Administrative and other expenses as % of
average reserves².3
(4,963)
(5,187)
Acquisition expenses and commissions
Delta
2017
2018
(224)
€ mn
Expenses
Operating profit by lines of business
OPERATING PROFIT BY LINES OF BUSINESS
C_Group Management Report
EXPENSES¹
Annual Report 2018 - Allianz Group
€ mn
(0.3)
Guaranteed savings & annuities
(1,815)
0.1
(8.3)
(8.2)
Operating profit
Acquisition expenses and commissions as %
of PVNBP¹
Capital-efficient products
Administrative and other expenses
Unit-linked without guarantee
(6,860)
(7,003)
Expenses
Protection & health
81
(1,897)
(143)
Amortization, unlocking, and true-up of DAC
Impact of change in DAC
(1,793)
2017
1,711
(1,779)
1,448
1,436
€ bn
management as of 31 December
thereof: Third-party assets under
1
(12)
1,960
€ bn
as of 31 December
Total assets under management
376
1,546
1,922
1,961
€ mn
Assets under management
€ bn
1,553
1,553
Delta
2017
31 December
31 December
Composition of total assets under management
as of
Total
Other²
Multi-assets¹
Equities
Fixed income
Type of asset class
as of
Net income
0.5%-p
61.9
C_Group Management Report
59
Annual Report 2018 - Allianz Group
3 The impact of change in DAC includes effects of the change in DAC, unearned revenue reserves (URR), and the value of
business acquired (VOBA). It represents the net impact of deferral and amortization of acquisition costs and front-end
loadings on operating profit and therefore deviates from the IFRS financial statements.
2_The technical margin comprises the risk result (risk premiums less benefits in excess of reserves less policyholder
participation), the lapse result (surrender charges and commission clawbacks) and the reinsurance result.
1 Expenses include acquisition expenses and commissions (excluding commission clawbacks, which are allocated to the
technical margin) as well as administrative and other expenses.
ASSET MANAGEMENT
The improvement in the impact of change in DAC was due to a high-
er capitalization of DAC, mainly resulting from increased sales of
fixed index annuities in the United States and increased production in
Italy.
101
(68)
33
(14)
Return on equity
Delta
115
Our return on equity decreased by 0.7 percentage points to 11.4%,
driven mainly by the decline in our net income.
KEY FIGURES
Key figures Asset Management¹
Delta
62.4
%
Cost-income ratio²
90
2,440
2,530
€ mn
Operating profit
324
6,408
6,732
€ mn
Operating revenues
2017
2018
(341)
57
(232)
230
(1)
Net income
Statements.
2017
2018
Delta
2017
2018
31 December
Delta
As of
31 December
31 December
As of
As of
Total
Cash/other
As of
31 December
Real estate
€ bn
€bn
37.1
36.5
(2.0)
213.6
211.6
(0.5)
€ bn
86.7
4.1
576.1
580.3
%-p
%
%
86.2
(0.6)
Equities
Banks
Unrealized gains and losses (net)
(2,749)
(2,607)
Foreign currency translation adjustment
768
27,199
6,945
27,967
0
28,928
28,928
Paid-in capital
Delta
2017
Retained earnings
Other
12,175
61,232
Corporate bonds
Covered bonds
Government bonds
Debt instruments, thereof:
Type of investment
The following portfolio overview covers the Allianz Group's assets
held for investment, which are largely driven by our insurance
businesses.
Total
STRUCTURE OF INVESTMENTS - PORTFOLIO
OVERVIEW
As of 31 December 2018, total assets amounted to € 897.6 bn and
total liabilities were € 833.9 bn. Compared to year-end 2017, total
assets decreased by €3.7 bn and total liabilities increased by
€ 1.2 bn.
Total assets and total liabilities
Asset allocation and fixed-income portfolio overview
The decrease in shareholders' equity was largely due to the reduction
in the unrealized gains and losses (net). The dividend payout in
May 2018 (€ 3,428 mn) and the two share buy-back programs² with a
total amount of € 3 bn, further contributed to the decline. Net income
attributable to shareholders of €7,462 mn had a partly offsetting
effect.
141
(5,230)
(4,321)
65,553
The following section focuses on our financial investments in
debt instruments, equities, real estate, and cash, as these reflect the
major developments in our asset base.
76.1
83.0
1_For further information on Allianz Corporate and Other figures, please refer to note 4 to the Consolidated Financial
Annual Report 2018 - Allianz Group
2_For further information, please refer to note 19 to the Consolidated Financial Statements
3_Excluding self-originated German private retail mortgage loans. For 3%, no ratings were available.
31 December 2017, respectively. For further information, please refer to note 19 to the Consolidated Financial State-
ments.
1_This does not include non-controlling interests of €2,447 mn and €3,049 mn as of 31 December 2018 and
Our exposure to equities increased due to higher volume.
German Pfandbriefe backed by either public-sector loans or mort-
gage loans. French, Spanish, and Italian covered bonds had portfolio
shares of 16.1%, 9.1% and 6.6%, respectively (31 December 2017:
16.3%, 9.2% and 7.5%).
67
Our well-diversified exposure to debt instruments remained
stable compared to year-end 2017. About 94% of this portfolio was
invested in investment-grade bonds and loans.³ Our government bonds
portfolio contained bonds from France, Germany, Italy, and Spain that
represented 17.3%, 14.2%, 8.8% and 5.6% of our portfolio shares. Of
our covered bonds portfolio, 40.3% (31 December 2017: 41.6%) were
100.0
100.0
8.4
664.4
672.8
2.5
Compared to year-end 2017, our overall asset allocation remained
almost unchanged, with slightly increased equities and debt instru-
ments exposure.
2.5
68
C_Group Management Report
1_For further information about changes in the reserves for loss and loss adjustment expenses for the Property-Casualty
business segment, please refer to note 14 to the Consolidated Financial Statements.
onwards.
For details on the regulatory capitalization of the Allianz Group,
please refer to the Risk and Opportunity Report from > page 74
Regulatory capital adequacy
Please refer to the Risk and Opportunity Report from > page 74
onwards for a description of the main concentrations of risk and other
relevant risk positions.
The Allianz Group has also entered into contractual relationships
with various types of structured entities. They have been designed in
such a way that their relevant activities are directed by means of
contractual arrangements rather than voting or similar rights. Typical-
ly, structured entities have been set up in connection with asset-
backed financings and certain investment fund products. For more
details on our involvement with structured entities, please refer to
note 35 to the Consolidated Financial Statements.
80
The Allianz Group enters into various commitments including
loan and leasing commitments, purchase obligations, and other
commitments. For more details please refer to note 37 to the Consol-
idated Financial Statements.
Off-balance sheet arrangements
Life/Health reserves for insurance and investment contracts increased
by € 16.5 bn to € 515.5 bn. An € 20.2 bn increase (before foreign
currency translation effects) in aggregate policy reserves was mainly
driven by our operations in Germany (€ 13.2 bn) and the United
States (€ 6.6 bn before foreign currency translation effects). Reserves
for premium refunds decreased by € 8.8 bn (before foreign currency
translation effects), due to lower unrealized gains to be shared with
policyholders. Foreign currency translation effects increased the
balance sheet value by € 5.3 bn, mainly due to the stronger
U.S. Dollar (€ 4.6 bn).
LIFE/HEALTH LIABILITIES
As of 31 December 2018, the business segment's gross reserves for
loss and loss adjustment expenses as well as discounted loss reserves
amounted to € 65.6 bn, compared to € 66.2 bn at year-end 2017. On
a net basis, our reserves, including discounted loss reserves, increased
slightly from € 56.3 bn to € 56.4 bn.¹
PROPERTY-CASUALTY LIABILITIES
LIABILITIES
In the normal course of business, the Allianz Group may enter into
arrangements that do not lead to the recognition of assets and liabili-
ties in the Consolidated Financial Statements under IFRS. Since the
Allianz Group does not rely on off-balance sheet arrangements as a
significant source of revenue or financing, our off-balance sheet
exposure to loss is immaterial relative to our financial position.
0.2
16.7
16.9
5.3
5.6
1.7
30.6
32.2
0.6
0.3
34.0
4.7
195.6
200.4
(1.3)
14.4
13.1
34.5
60.0
53.4
6.6
0.1
1.7
1.9
1.0
11.4
12.5
0.3
9.1
9.4
3.1
60.2
63.2
1.1
9.3
10.3
2018
31 December
(6.9)
As of
In the life sector, premium growth is expected to accelerate. The
main reason: a rebound in China where the regulatory shock of 2018
is seen as a one-off effect. As a consequence, emerging markets are
likely to return to double-digit growth. On the other hand, premium
growth in advanced economies should remain more or less stable,
albeit at a much lower level. Overall, we expect global premium
growth to increase by about 5 to 6% in 2019 (in nominal terms and
adjusted for foreign currency translation effects). Given the continued
revamping of insurance and investment portfolios, global industry
profitability could creep up, although the investment environment
remains challenging.
In the non-life sector, a slight premium growth slowdown is
expected, against the backdrop of cooling economies. As in previous
years, emerging markets are the main driver of growth. Overall, we
expect global premium growth of around 5% in 2019 (in nominal
terms and adjusted for foreign currency translation effects). As cata
strophe losses may continue to be elevated and investment income
to be impacted by volatile markets and still low yields, overall profit-
ability is likely to remain under pressure.
2019 is expected to become another challenging year for the insur-
ance industry, for many reasons. First, the global economic momen-
tum will be weaker. Second, risks - notably cyber and climate change
- might easily increase. Third, old business models will be relentlessly
re-engineered from the customers' perspective; for that, new skills -
data analytics and Al - are key. Fourth, political risks remain elevated,
and the fractures of the old world order may become irreconcilable.
Fifth, financial markets are in for a turbulent year as support from
central banks is gradually withdrawn while economic uncertainty is
on the rise. Nonetheless, absent an unexpected big shock, global
insurance markets should grow also in 2019, the tenth consecutive
year of growth since the financial crisis.
Insurance industry outlook
C_Group Management Report
63
Asset management industry outlook
Annual Report 2018 - Allianz Group
1_For more detailed information on the previous year's outlook for 2018, please see the Annual Report 2017 from page 51
onward.
The uncertain global political environment bears the potential
for higher financial-market volatility, especially as monetary policy is
gradually becoming less expansionary. In the U.S., the Federal
Reserve is getting closer to the peak in the current rate hiking cycle.
One rate hike in the course of 2019 looks realistic. In the Eurozone,
the European Central Bank is expected to start raising rates in
autumn 2019. Modestly rising yields on 10-year U.S. government
bonds and the prospects of the ECB starting to hike its key interest
rates are likely to influence investors' interest rate expectations and
exert upward pressure on European benchmark bond yields. For
10-year German government bonds, we see yields climbing modestly
to about 0.7% in the course of 2019; yields on 10-year U.S. govern-
ment bonds may end the year at slightly above 3%.
As we move into 2019, prospects for the world economy remain
favorable overall. Nevertheless, political and economic risks remain
sizable, in particular in relation to the trade dispute with the United
States and Brexit. In our economic scenario we have penciled in
positive outcomes for most political and policy-related risks. The U.S.
economy is expected to grow by 2.5%. In the Eurozone, growth is
likely to slow to about 1.6% in 2019. Most major Eurozone member
countries are likely to experience somewhat lower growth than in
2018. In countries like Germany, fiscal policy will be growth-
supportive. Driven by a less dynamic economic development
in China, growth in the emerging market world will slow to 4.5% from
4.7% in 2018. All in all, global output is expected to increase by 3.0%
in 2019.
Economic outlook²
1_Represents the ratio of net income attributable to shareholders to the average shareholders' equity excluding unrealized gains/losses on bonds, net of shadow accounting, at the beginning of the year and at the end of the year.
Operating profit amounted to € 2.5 bn, exceeding the mid-point of the target range by € 0.1 bn.
With a cost-income ratio of 62.4%, our Asset Management business segment was in the target range.
2_The information presented in the sections "Economic outlook", "Insurance industry outlook", and "Asset management
industry outlook" is based on our own estimates.
Total AuM were stable, as the positive effects from foreign currency translation and the Allianz Capital
Partners transfer were able to compensate for the negative effects from market returns and net outflows.
Brexit as well as ongoing political uncertainties and trade tensions
are weighing on the global economy. As a result, market volatility is
presumed to remain high and many investors are likely to further
de-risk their portfolios. We therefore expect only a modest capital
market contribution to AuM growth.
Overview: outlook and assumptions 2019 for the
Pressure on operating investment income (net) to continue, due to
reinvestments in a consistently low interest rate environment.
Achievement of our combined ratio of 94% or better.
Operating profit in the range of € 5.4 bn to € 6.0 bn.
Revenue growth of approximately 3%.
Selective profitable growth.
Protection of shareholder value while continuing to provide attractive
returns and dividends.
The industry's profitability remains under pressure from both
continuous flows into passive products, new pricing models, and
rising distribution costs, and we expect the trend towards industry
consolidation to continue. At the same time, digital channels such as
robo-advisory platforms are likely to continue gaining prominence.
The strengthening of regulatory oversight and reporting could also
affect profitability in the asset management sector. Opportunities in
the area of active management will continue to exist, particularly in
alternative and solutions-oriented strategies, but also in equity and
fixed-income. In order to continue growing, it is vital for asset
managers to keep sufficient business volumes, ensure efficient opera-
tions, and maintain a strong investment performance.
Operating profit of € 11.5 bn, plus or minus € 0.5 bn.
ASSET MANAGEMENT
LIFE/HEALTH
PROPERTY-CASUALTY
ALLIANZ GROUP
Outlook 2019
Allianz Group
ASSUMPTIONS
Our 11.4% ROE¹ is in the outlook range and, when excluding the sale of a life portfolio in Taiwan, even
above the range (12.3 %).
At € 4.2 bn, our operating profit was within the target range, driven by high unit-linked management fees
and a solid investment and technical margin.
Revenues of € 70.4 bn are above our outlook range, mainly due to the strong growth of capital-efficient
products in Germany and USA.
Protection of shareholder value while continuing to provide
attractive returns and dividends.
Operating profit of € 11.1 bn, plus or minus € 0.5 bn.
Outlook 2018-as per Annual Report 2017
Asset Management
Life/Health
Property-Casualty
Selective profitable growth.
Allianz Group
C_Group Management Report
Overview: 2018 results versus previous year's outlook¹
OUTLOOK 2019
Annual Report 2018 - Allianz Group
31 December
62
2018 results versus previous year's outlook for 2018
Growth in gross premiums written: approximately 2% on an
internal basis.
Operating profit in the range of € 5.1 bn to € 5.7 bn.
Achievement of our combined-ratio target of 94% or better.
Operating investment income (net) increased, as a slightly lower interest income was more than offset by
one-off effects.
Combined ratio was at 94.0%, meeting our target. The improvement in profitability was mainly driven by a
decrease in our expense ratio, which benefited from efficiency programs carried out across the entire
Allianz Group.
Operating profit of € 5.7 bn is at the upper end of our target range. Our underwriting result was positively
impacted by improvements in our expense ratio.
Gross premiums written increased by 2.6%. Internal growth of 5.7% was mainly driven by AGCS, Germany,
and Allianz Partners.
Total revenues grew by 6.1% on an internal basis, compared to 2017. Our Life/Health business segment
registered strong sales of fixed index annuities in the United States and of capital-efficient products in
Germany and we recorded an internal premium growth in our Property-Casualty business segment. An
increase in third-party assets under management (AUM) driven revenues led to revenue growth in our Asset
Management business segment.
Return on equity (ROE)¹ amounted to 13.2% (2017: 11.8%). Proposed dividend at € 9.00 (2017: € 8.00) per
share. Stable payout ratio of at least 50%, based on expected number of eligible shares at the Annual
General Meeting.
Operating profit of € 11.5 bn. In the upper end of our target range.
Results 2018
Cost-income ratio between 60% and 65%.
Operating profit in the range of € 2.1 bn to € 2.7 bn.
Moderate increase in total AuM due to solid third-party net
inflows at both AllianzGI and PIMCO, supported by a slightly
positive market return.
Pressure on investment income, due to low interest rates and
continued capital market uncertainty.
RoE between 10.0 % and 12.0%.
Operating profit between € 3.9 bn and € 4.5 bn.
Pressure on operating investment income (net) to continue, due to
reinvestments in a consistently low interest rate environment.
Continue with focus on profitable growth and further shift new
business mix towards capital-efficient, unit-linked, and protection
products. Revenues are expected to be in the range of € 62.0 bn to
€ 68.0 bn.
Continue with focus on profitable growth; keep developing capital-
efficient products; expand to new markets. Revenues are expected to be
in the range of € 67.0 bn to € 73.0 bn.
Operating profit between € 3.9 bn and € 4.5 bn.
Operating investment result reached € 15.5 bn, with realizations on a solid level. Overall, higher
impairments and a lower trading result (a consequence of volatile markets) caused a lower investment
income compared to the previous year.
Pressure on investment income due to low interest rates
and continued capital market volatility.
All of the above remains subject to our sustainable Solvency II
capitalization ratio above 160% - which is considerably below our
year-end 2018 level of 229%, and 20 percentage points below our
minimum solvency ambition for the Solvency II capitalization ratio
of 180%.
Through prudent capital management, the Allianz Group aims
to maintain a healthy balance between an attractive yield and
investment in profitable growth. Of the Group's net income attribut-
able to shareholders, we will continue to pay out 50% as a regular
dividend. Also, we aim to keep the regular dividend per share at the
previous year's level, if not higher. In addition, we will also continue
to return capital to our shareholders on a flexible basis.
In addition, Allianz SE has decided to launch a share buy-back
program worth up to € 1.5 bn, as part of our previously announced
policy to return capital to the shareholders on a flexible basis. Formal
authorization of the share buy-back program by the Annual
General Meeting dates back to 7 May 2014. The buy-back
program, which started in March 2019, is envisaged to be complet-
ed by December 2019. Allianz SE will cancel all repurchased shares.
For 2018, the Allianz SE Board of Management and the Supervisory
Board propose a dividend of € 9.00 per share.
Expected dividend development¹
C_Group Management Report
At the date of issuance of this Annual Report, and based on current
information regarding natural catastrophes and capital market
trends in particular foreign currency, interest rates, and equities -,
the Board of Management has no indication that the Allianz Group is
facing any major adverse developments.
65
1_Operating revenues adjusted for foreign currency translation and (de)consolidation effects.
We also monitor the Group's and each of our operating entities'
capital positions very closely. In addition, we will continue to optimize
the sensitivity of our Solvency II capitalization ratio to changes in
interest rates and spreads through prudent asset/liability manage-
ment and life product design.
As a result, we have full access to financial markets and are in an
excellent position to raise financing at low cost. We are determined to
maintain our strong financial flexibility, which is supported by both
the prudent steering of our liquidity resources and our well-balanced
debt maturity profile.
The Allianz Group enjoys a very healthy liquidity position and excel-
lent financial strength, with its capitalization well above regulatory
requirements.
and capitalization
Financing, liquidity development,
Annual Report 2018 - Allianz Group
We recorded an operating loss of € 0.9 bn in 2018. For 2019, we
envisage an operating loss in the same range: € 0.8 bn to € 1.0 bn for
this business segment.
Cautionary note regarding forward-looking statements
Deviations may arise due to changes in factors including, but not limited to, the following: (i) the general
economic and competitive situation in the Allianz Group's core business and core markets, (ii) the performance
of financial markets (in particular market volatility, liquidity, and credit events), (iii) the frequency and severity
of insured loss events, including those resulting from natural catastrophes, and the development of loss
expenses, (iv) mortality and morbidity levels and trends, (v) persistency levels, (vi) particularly in the banking
business, the extent of credit defaults, (vii) interest rate levels, (viii) currency exchange rates, most notably the
EUR/USD exchange rate, (ix) changes in laws and regulations, including tax regulations, (x) the impact of
acquisitions including and related integration issues and reorganization measures, and (xi) the general
competitive conditions that, in each individual case, apply at a local, regional, national, and/or global level.
Many of these changes can be exacerbated by terrorist activities.
As of
Shareholders' equity
RoE between 10.0 % and 12.0%.
€ mn
Shareholders' equity
Shareholders' equity¹
This document includes forward-looking statements, such as prospects or expectations, that are based on
management's current views and assumptions and subject to known and unknown risks and uncertainties.
Actual results, performance figures, or events may differ significantly from those expressed or implied in such
forward-looking statements.
BALANCE SHEET REVIEW
Annual Report 2018 - Allianz Group
66
66
1 This represents management's current state of planning and may be revised in the future. Also, note that the decision
regarding dividend payments in any given year is subject to specific dividend proposals by the Management and
Supervisory Boards, each of which may elect to deviate, if and as appropriate under the then prevailing circumstances,
as well as to the approval of the Annual General Meeting.
The Allianz Group assumes no obligation to update any information or forward-looking statement contained
herein, save for any information we are required to disclose by law.
No duty to update
C_Group Management Report
CORPORATE AND OTHER (INCLUDING
CONSOLIDATION)
Management's overall assessment of the current
economic situation of the Allianz Group
A 10% weakening (strengthening) of the U.S. Dollar com-
pared to the assumed exchange rate of 1.17 to the Euro
would have a negative (positive) effect on operating profits of
approximately € 0.4 bn.
Annual Report 2018 - Allianz Group
54
64
For further information on our ambitions for the period 2019-2021,
please refer to the section "Our business aspirations" in the Risk and
Opportunity Report.
average U.S. Dollar to Euro exchange rate: 1.17.
level of claims from natural catastrophes at expected average
levels,
Management's assessment of expected revenues
and earnings for 2019
no disruptive fiscal or regulatory interference,
A 100 basis point increase (decrease) in interest rates would
raise (lower) the expected operating profit by approximately
€ 0.1 bn in the first year that follows the rate change.
global economic growth to continue, albeit at a slower pace,
modest rise in interest rates,
Our outlook assumes no significant deviations from our underlying
assumptions - specifically:
Our cost-income ratio is expected to be below 64% in
2019 (2018: 62.4%), as we continue to invest in business growth. In the
mid-term, we expect our cost-income ratio to reach 63%.
Operating profit in the range of € 2.2 bn to € 2.8 bn.
Cost-income ratio below 64%.
Moderate increase in total AuM due to moderate third-party net inflows,
supported by an overall slightly positive market return in a volatile
market environment.
no major disruptions in the capital markets,
In 2018, our total revenues amounted to € 130.6 bn, a 3.5% increase
on a nominal and a 6.1% increase on an internal basis¹, compared to
2017. For 2019, we envisage relatively stable total revenues, with
Property-Casualty and Asset Management revenues showing an
upward trend, while Life/Health revenues are expected to be stable
due to our selective focus on profitable growth.
C_Group Management Report
At € 11.5 bn, our operating profit was in the upper end of our
target range in 2018. For 2019, we envisage an operating profit of
€11.5 bn, plus or minus € 0.5 bn, as we expect another year of strong
performance, supported by all business segments.
For 2019, we envisage moderate third-party net inflows and market
returns at both PIMCO and AllianzGI with relatively stable margins
and small growth in performance fees, leading to a modest growth
in operating revenues. We also assume the U.S. Dollar to remain
relatively stable compared to 2018. All things considered, we expect
our 2019 operating profit to range between € 2.2 bn and € 2.8 bn
(2018: € 2.5 bn).
ASSET MANAGEMENT
Going forward, we will remain focused on profitable growth and
continue to develop capital-efficient products always putting
customer needs at the center of our efforts - while exploring new
market opportunities and building on our strong track record of
product innovation. In addition, we will continue to actively manage
both our new and our in-force business through continuous repricing,
expense management, asset/liability management, and crediting
strategies. As before, this should allow us to mitigate the impacts of
difficult market conditions - particularly low interest rates - and
maintain our profitability targets.
One of the key performance indicators for the steering of our
Life/Health business segment is RoE. In 2019, we expect it to be
between 10.0% and 12.0%.
higher unit-linked management fees, and solid investment margins.
For 2019, we expect the operating profit in this business segment to
range between € 3.9 bn and € 4.5 bn.
At € 4.2 bn, our Life/Health operating profit was within the target
range in 2018, mainly due to strong sales of capital-efficient products,
As the low-interest-rate environment is likely to change only
slowly, investment income will remain under pressure due to the
rather short duration of investments in the Property-Casualty
business segment. Going forward, we will continue to take measures
to adapt our investment strategy to changing market conditions.
Overall, we expect our 2019 operating profit to be in the range
of € 5.4 bn to € 6.0 bn (2018: € 5.7 bn).
LIFE/HEALTH INSURANCE
We believe the overall slow rise in prices seen in a number of
markets in the past year will continue in 2019. Notwithstanding, we
will maintain our focus on achieving strong underwriting results by
adhering to our strict underwriting discipline, as we have in previous
years, and we will be prepared to accept a lower top line if target
margins cannot be achieved.
Premium growth in 2019 will probably be strongest at Allianz
Partners, where we have pooled our B2B2C activities. Further growth
can be expected in our core European markets, specifically Germany,
Italy, and UK, as well as in emerging markets like Saudi Arabia and
Malaysia.
We expect our revenues to increase by approximately 3% in
2019 (2018: 2.6%), supported by favorable volume and price effects.
PROPERTY-CASUALTY INSURANCE
Our net income attributable to shareholders was € 7.5 bn, a
strong increase from the previous year's level. Consistent with our
disclosure practice in the past, and given the susceptibility of our non-
operating results to adverse capital market developments, we refrain
from providing a precise outlook for net income. However, since our
outlook presumes no major disruptions of capital markets, we antici-
pate a rather stable net income development for 2019.
Our combined ratio was at 94% in 2018, in line with our target,
which we achieved by improving our expense levels. In 2019, we
envisage a combined ratio of 94% or better. The underlying assump-
tion is that the aggregate effect of improvements in pricing, claims
management, and productivity will compensate for any inflation in
underlying claims. Despite the highly volatile nature of natural cata-
strophes in recent years, we assume impacts to remain at the historic
claims experience going forward.
(267)
Commissions and profit received on reinsurance business ceded
84
95
1,827
1,711
Definition: URR capitalized
(4,963)
526
Definition: policyholder participation²
1,063
996
Administrative expenses on reinsurance business ceded
Acquisition and administrative expenses (net)²
(5,187)
12
14
564
(320)
(1,779)
(5,092)
13
Amortization, unlocking, and true-up of DAC¹
(1,793)
14
Acquisition and administrative expenses
(6,969)
(6,927)
Definitions
(165)
(143)
1,556
521
Acquisition costs incurred
Capitalization of DAC¹
(5,341)
Scope
(5,635)
(3,833)
Scope
(25)
(32)
Amortization, unlocking, and true-up of DAC
(2,060)
(2,975)
Commissions and profit received
on reinsurance business ceded
84
95
Acquisition costs
(4,707)
Administrative and other expenses¹
(1,897)
Scope
(1,815)
Scope
(6,565)
683
(1,117)
30
31
1_As per Group Management Report.
2_As per notes to the Consolidated Financial Statements.
Capitalization of DAC
3,483
3,265
Amortization, unlocking, and true-up of DAC¹
(1,793)
(1,779)
Definition: URR amortized
43
(47)
Definition: policyholder participation²
(968)
Definition: FIA adjustment³
Definitions
25
1,711
3
20
Fee and commission income
577
576
Other income
4
4
Interest expenses, excluding interest expenses from
external debt
(24)
(133)
Fee and commission expenses
(382)
(325)
Consolidation effects within Corporate
value through income (net)¹
and Other
Income from financial assets and liabilities carried at fair
95
3
Definitions
8
Income from financial assets and liabilities carried at fair
value through income (net)
5
Other income
11
1
CORPORATE AND OTHER
thereof: Total revenues (Banking)
275
562
consisting of:
Interest and similar income
419
2
CONSOLIDATION
Allianz Group total revenues
Reconciliation to Notes
€ mn
2018
2017
Acquisition, administrative, capitalization, and amortization of DAC
€ mn
Acquisition expenses and commissions¹
(5,187)
(4,963)
Administrative and other expenses¹
(1,815)
(1,897)
2018
2017
Capitalization of DAC¹
1,827
Policyholder participation is included within change in our
reserves for insurance and investment contracts (net) in the Group
income statement.
Both capitalization and amortization are included in the line
item premiums earned (net) in the Group income statement.
URR amortized: Total amount of URR amortized includes
scheduled URR amortization, true-up and unlocking.
URR capitalized: Capitalization amount of unearned revenue
reserves (URR) and deferred profit liabilities (DPL) for FAS 97 LP.
1 Includes trading income.
(535)
130,557
(360)
126,149
72
22
Annual Report 2018 - Allianz Group
Acquisition expenses and commissions¹
C_Group Management Report
OPERATING PROFIT
The reconciling item scope comprises the effects from out-of-scope
entities in the profit sources reporting compilation. Operating profit
from operating entities that are not in-scope entities is included in the
investment margin. Currently, 21 entities comprising 99.0% of
Life/Health total statutory premiums are in scope.
EXPENSES
Expenses comprise acquisition expenses and commissions as well as
administrative and other expenses.
The delta shown as definitions in acquisition expenses and
commissions represents commission clawbacks, which are allocated
to the technical margin. The delta shown as definitions in administra-
tive and other expenses mainly represents restructuring charges,
which are stated in a separate line item in the Group income
statement.
IMPACT OF CHANGE
IN DEFERRED ACQUISITION COSTS (DAC)
Impact of change in DAC includes the effects of changes in DAC,
unearned revenue reserves (URR), and value of business acquired
(VOBA). As such, it is the net impact of the deferral and amortization
of acquisition costs and front-end loadings on operating profit.
Life/Health insurance operations
159
Liquidity management of our operating entities.
Scope
1_Related undertakings are also referred to as operating entities.
76
2_From a formalistic perspective, the German Supervisory Authority deems our model to be "partial" because not all our
entities are using the internal model. Some of our smaller entities report under the standard formula and others under
the deduction and aggregation approach. Without loss of generality, we might use the term internal model in the
following chapters, e.g., in case descriptions also referring to entities that use the internal model, or descriptions focusing
on processes with respect to the internal model components.
3_The return on risk capital is defined as the present value of future real world profits on the capital requirement (including
buffer to regulatory requirements) held at local level.
Annual Report 2018 - Allianz Group
C_Group Management Report
particular if they cannot be matched by available investments due to
long maturities. In addition, we are also exposed to adverse changes
in equity and real estate prices, credit spread levels, inflation, implied
volatilities and currencies which might impact the value of our portfolios.
To measure these market risks, real-world stochastic models for
the relevant risk factors are calibrated using historical time series to
generate possible future market developments. After the scenarios
for all the risk factors are generated, the asset and liability positions
are revalued under each scenario. The worst-case outcome of the
sorted portfolio profit and loss distribution at a certain confidence
level (99.5%) defines the market Value at Risk (VaR). For entities
modeled using the standard formula, the market risk is based on
aggregating the losses under defined standard formula shocks.
Strategic asset allocation benchmarks and risk limits, including
financial VaR, stand-alone interest rate and equity sensitivity limits,
and foreign exchange exposure limits, are defined for the Group and
the related undertaking. Limits are closely monitored and, if a breach
occurs, countermeasures are implemented which may include the
escalation and/or closing of positions. Furthermore, we have put in
place standards for hedging activities due to exposure to fair-value
options embedded in life insurance products. Finally, guidelines are
provided by the Group regarding certain investments, new investment
products, and the use of derivatives. Compliance with these guide-
lines is controlled by the respective risk and controlling functions.
INTEREST RATE RISK
Allianz is a liability-driven investor. If the duration of our assets is
shorter than our liabilities, we may suffer an economic loss in a fall-
ing-rate environment as we reinvest maturing assets at lower rates
prior to the maturity of liability contracts. This risk is higher for long-
dated life investment and savings products, with a significant part of
the Life/Health business segment's interest rate risk coming from
Western Europe, mainly from traditional life insurance products with
guarantees. By contrast, opportunities may arise when interest rates
increase. This may result in returns from reinvestments being higher
than the rates guaranteed. Interest rate risk is managed within our
asset/liability management process and controlled via interest rate
sensitivity and duration mismatch limits for the Group and entities.
INFLATION RISK
As an insurance company, we are exposed to changing inflation
rates, predominantly due to our Non-life insurance obligations but
also due to inflation-indexed internal pension obligations. Inflation
assumptions are taken into account in our product development and
pricing. However, unexpected inflation increases both future claims
and expenses, leading to greater liabilities; conversely, if future infla-
tion rates were to be lower than assumed, liabilities would be lower
than anticipated. The risk of changing inflation rates is incorporated
in our internal model.
EQUITY RISK
The Group's insurance-focused operating entities may hold equity
investments to diversify their portfolios and take advantage of ex-
pected long-term returns. Strategic asset allocation benchmarks and
investment limits are used to manage and monitor these exposures.
In addition, equity investments fall within the scope of the credit risk
platform to avoid single-name risk concentrations. Risks from chang-
As the fair values of our investment portfolios and liabilities de-
pend on changes on the financial markets, we are exposed to the risk
of adverse financial market developments. The long-dated liabilities
in our Life/Health business segment contribute to interest rate risk, in
es in equity prices are normally associated with decreasing share
prices and increasing equity price volatilities. As stock markets also
might increase, opportunities may arise from equity investments.
As an inherent part of our insurance operations, we collect premiums
from our policyholders and invest them in a wide variety of assets; the
resulting investment portfolios back the future claims and benefits to
our customers. In addition, we also invest shareholders' capital, which
is required to support the business. Finally, we use derivatives, mostly
to hedge our portfolio against adverse market movements (for ex-
ample, protective puts) or to reduce our reinvestment risk (for exam-
ple, by using forwards, swaps or swaptions). Asset/liability manage-
ment (ALM) decisions are taken based on the internal model,
considering both the risks and the returns on the financial market.
As a consequence, the internal model is fully integrated in busi-
ness steering and its application satisfies the so-called "use test"
under Solvency II.
C_Group Management Report
Related undertakings
Related undertakings¹ are responsible for their own risk management,
including adherence to both external requirements (for example,
those imposed by local regulators) and internal standards. Their
Boards of Management are responsible for setting and approving a
local risk strategy during the annual Strategic and Planning Dialogs
with the Group, and for ensuring adherence to their risk strategy.
A risk function, headed by a Chief Risk Officer which is
independent from business line management, is established by each
related undertaking. A local Risk Committee supports both the Board
of Management and the Chief Risk Officer by acting as the primary
risk controlling body.
Consistent implementation of the Group's risk management
framework in the related undertakings, including regular dialog
between the Group and the entity, is ensured through, for example,
Group Risk representation on local Risk Committees and regular
assessments of the local risk management framework and Chief Risk
Officers by Group Risk. Moreover, the Group Chief Risk Officer must
be consulted on decisions regarding the staffing, objectives and
performance evaluation of local Chief Risk Officers.
Other functions and bodies
In addition to Group Risk and the local risk functions, legal, compli-
ance, planning, and actuarial functions established at both the Group
and the entity level constitute additional components of the "second
line of defense".
Group Legal and Group Compliance seek to mitigate legal risks
with support from other departments. The objectives of both func-
tions are to ensure that laws and regulations are observed, to react
appropriately to all impending legislative changes or new court
rulings, to attend to legal disputes and litigation, and to provide
legally appropriate solutions for transactions and business processes.
In addition, Group Compliance - in conjunction with Group Legal and
other experts involved - is responsible for integrity management,
which aims to protect the Allianz Group, our related undertakings
and employees from regulatory risks.
Group Actuarial, Planning and Controlling contributes towards
assessing and managing risks in line with regulatory requirements, in
particular for those risks whose management requires actuarial
expertise. The range of tasks includes, among others, the calculation
and monitoring of technical provisions, technical actuarial assistance
in business planning, reporting and monitoring of the results, and
supporting the effective implementation of the risk management
system.
Risk based steering and risk management
The Allianz Group is exposed to a variety of risks through its core
insurance and asset management activities, including market, credit,
underwriting, business, operational, strategic, liquidity, and reputa-
tional risks.
As an integrated financial services provider, we consider diversi-
fication across different business segments and regions to be a key
element in managing our risks efficiently, limiting the economic im-
pact of any single event and contributing to relatively stable results.
Our aim is to maintain a balanced risk profile without any dispropor-
tionately large risk concentrations and accumulations.
With Solvency II being the regulatory regime relevant for the
Group since 1 January 2016, our risk profile is measured and steered
based on our approved Solvency II internal model². We have intro-
duced a target solvency ratio in accordance with Solvency II, based
on pre-defined shock scenarios at the level of both the Group and
related undertakings, supplemented by ad-hoc scenarios, historical
and reverse stress tests, and sensitivity analyses.
In addition, central elements of Allianz's dividend policy are
linked to Solvency II capitalization based on the internal model. By
that we allow for a consistent view on risk steering and capitalization
according to Solvency II framework.
Allianz steers its portfolio using a comprehensive view of risk and
return based on the internal model and including scenario analysis:
Risk and concentrations are actively restricted by limits based on our
model and there is a comprehensive analysis of the return on risk
capital³ (RORC). RORC allows us to identify profitable lines of business
and products on a sustainable basis, reflecting the capital commit-
ment over the life time of the products and is a key criterion for capi-
tal allocation decisions.
MARKET RISK
75
CREDIT SPREAD RISK
CURRENCY RISK
Underwriting risk consists of premium and reserve risks in the Property-
Casualty² business segment as well as biometric risks in the Life/Health³
business segment. Underwriting risks are not relevant for the Asset
Management business segment and our banking operations.
PROPERTY-CASUALTY
Our Property-Casualty insurance businesses are exposed to premium-
risk-related adverse developments in the current year's new and
renewed business as well as to reserve risks related to the business in
force.
Premium risk
As part of our Property-Casualty business operations, we receive
premiums from our customers and provide insurance protection in
return. Premium risk is the risk that actual claims for the business in
the current year develop adversely relative to expected claims ratios.
Premium risk can be mitigated by reinsurance as well as by technical
excellence in underwriting. Assessing risks as part of the underwriting
process is a key element of our risk management framework. There
are clear underwriting limits and restrictions which are defined cen-
trally and are applied across the Group.
Premium risk is subdivided into three categories: natural catas-
trophe risk, terror risk, and non-catastrophe risk including man-made
catastrophes.
Premium risk is estimated based on actuarial models that are
used to derive loss distributions. Non-catastrophe risks are modeled
using attritional loss models for frequency losses as well as frequency
and severity models for large losses. Natural disasters, such as earth-
quakes, storms, and floods, represent a significant challenge for risk
management due to their accumulation potential and occurrence
volatility. For natural catastrophe risks, we use special modeling
techniques which combine portfolio data (geographic location, char-
acteristics of insured objects, and their values) with simulated natural
disaster scenarios to estimate the magnitude and frequency of po-
tential losses. Where such stochastic models do not exist, we use
deterministic, scenario-based approaches to estimate potential
losses. Similar approaches are used to evaluate risk concentrations
for terror and man-made catastrophes including losses from cyber
incidents and industrial concentrations.
These loss distributions are then used within the internal model
to calculate potential losses with a predefined confidence level of
99.5%.
Reserve risk
Reserve risk represents the risk of adverse developments in best-
estimate reserves over a one-year time horizon, resulting from fluctu-
ations in the timing and/or amount of claims settlement. We estimate
and hold reserves for claims resulting from past events that have not
yet been settled. In case of unexpected developments, we will
experience a reserve gain or loss dependent on the assumptions
applied for the estimate.
1_Credit Risk Platform
78
2_Property-Casualty is also referred to as Non-Life.
3_Life/Health is also referred to as Life.
Annual Report 2018 - Allianz Group
Net interest and similar income
UNDERWRITING RISK
Fixed-income assets such as bonds may lose value if credit spreads
widen. However, our risk appetite for credit spread risk takes into
account the underlying economics of our business model: As a liabil-
ity-driven investor, we typically hold fixed-income assets until maturity.
This implies that short-term changes in market prices do not affect us.
In our capacity as a long-term investor, this gives us the opportunity to
invest in bonds yielding spreads over the risk-free return and earning
this additional yield component.
Clearly defined processes ensure that exposure concentrations
and limit utilizations are appropriately monitored and managed. The
setting of country and obligor exposure limits from the Group's per-
spective (i.e. the maximum concentration limit) takes into account the
Allianz Group's portfolio size and structure as well as our overall risk
strategy.
To ensure effective credit risk management, credit VaR limits are
derived from our internal risk capital framework, and rating bucket
benchmarks are used to define our risk appetite for exposures in the
lower investment grade and non-investment grade area.
Our operating entities typically invest in assets which are dominated
in the same currency as their liabilities; however, some foreign curren-
cy exposures are allowed to support portfolio diversification and
tactical investment decisions. Our largest exposure to foreign curren-
cy risk comes from our ownership of non-Euro entities: If the Euro
strengthens, the Euro equivalent net asset value of our foreign
subsidiaries will decline from a Group perspective; however, at the
same time the capital requirements in Euro will decrease, partially
mitigating the total impact on the Group capitalization. Based on our
foreign exchange management limit framework, currency risk is
monitored and managed at both the local and Group level.
REAL ESTATE RISK
Despite the risk of decreasing real estate values, real estate is a suit-
able addition to our investment portfolio due to good diversification
benefits as well as to the contribution of relatively predictable, long-
term cash flows.
The Group Investment Committee of Allianz has defined a
framework for standard transactions for real estate equity and com-
mercial real estate loan investments. These standards outline diversi-
fication targets, minimum-return hurdles, and other qualitative and
quantitative requirements. All transactions that do not meet these
standards or have a total investment volume (including costs) ex-
ceeding a defined threshold must be reviewed individually by Group
Risk and other Group center functions. In addition, all applicable
limits must be met, in particular the limits set for the portfolio of an
investing entity by the strategic asset allocation and its respective
leeway as well as risk limits.
CREDIT RISK
Credit risk is measured as the potential economic loss in the value of
our portfolio that would result from either changes in the credit quali-
ty of our counterparties ("migration risk") or the inability or unwilling-
ness of a counterparty to fulfill contractual obligations ("default risk").
The Group's credit risk profile comes from three sources: our in-
vestment portfolio, credit insurance business, and external reinsurance.
Investment portfolio: Credit risk results from our investments in
fixed-income bonds, loans, derivatives, cash positions, and re-
ceivables whose value may decrease depending on the credit
quality of the obligor. However, losses due to credit events can be
shared with the policyholder for certain life insurance products.
Annual Report 2018 - Allianz Group
77
C_Group Management Report
Credit insurance: Credit risk arises from potential claim payments
on limits granted by Euler Hermes to its policyholders. Euler Her-
mes insures its policyholders from credit risk associated with
short-term trade credits advanced to clients of the policyholder. If
the client of the policyholder is unable to meet its payment obli-
gations, Euler Hermes indemnifies the loss to the policyholder.
Reinsurance: Credit risk arises from potential losses from non-
recoverability of reinsurance receivables or due to default on
benefits under in-force reinsurance treaties. Our reinsurance part-
ners are carefully selected by a dedicated team. Besides focusing
on companies with strong credit profiles, we may further require
letters of credit, cash deposits, or other financial measures to fur-
ther mitigate our exposure to credit risk.
The internal credit risk capital model takes into account the major
determinants of credit risk for each instrument, including exposure at
default, rating, seniority, collateral, and maturity. Additional parame-
ters assigned to obligors are migration probabilities and obligor asset
correlations reflecting dependencies within the portfolio. Ratings are
assigned to single obligors via an internal rating approach. It is based
on long-term ratings from rating agencies, which are dynamically
adjusted using market-implied ratings and the most recent qualita-
tive information available.
The loss profile of a given portfolio is obtained through Monte
Carlo simulation, taking into account interdependencies and expo-
sure concentrations per obligor segment. The loss profiles are calcu-
lated at different levels of the Allianz Group, and then fed into the
internal model at each level for further aggregation across sources of
risk to derive diversified credit risk.
Our credit insurance portfolio is modeled by Euler Hermes based
on a proprietary model component, which is a local adaptation of
the central internal credit risk model. Euler Hermes' loss profile is
integrated in the Group's internal credit risk model to capture the
concentration and diversification effects.
Our group-wide country and obligor group limit management
framework (CRISP¹) allows us to manage counterparty concentration
risk, covering both credit and equity exposures at the Group and
operating entity levels. This limit framework forms the basis for dis-
cussions on credit actions and provides notification services with a
quick and broad communication of credit-related decisions across the
Group.
Annual Report 2018 - Allianz Group
Group Risk strengthens and maintains the Group's risk network
through regular and close interaction with the management of relat-
ed undertakings and other key stakeholders such as the local finance,
risk, actuarial and investment departments. A strong group-wide risk
network allows the Allianz Group to influence risk culture across the
Group and identify and bring risks to management's attention at an
early stage.
Group Risk supports the Board of Management in developing
the risk management framework, which covers risk governance, risk
strategy and appetite, and risk monitoring and reporting. Group Risk
is operationally responsible for assessing risks and monitoring limits
and accumulations of specific risks across business lines, including
natural and man-made disasters and exposures to financial markets
and counterparties.
In addition, we take into account the requirements of regulators
and rating agencies. While capital requirements imposed by regula-
tors constitute a binding constraint, meeting rating agencies' capital
requirements and maintaining strong credit ratings are strategic
business objectives of the Allianz Group.
We closely monitor the capital position and risk concentrations
of the Group and its related undertakings and apply regular stress
tests (including standardized, historical and reverse stress test scenar-
ios as well as monthly stress scenarios focusing on current and possi-
ble future developments). This allows us to take appropriate
measures to ensure our continued capital and solvency strength.
Furthermore, the risk capital reflecting the risk profile and the cost of
capital is an important aspect considered in business decisions.
Risk governance system
RISK MANAGEMENT FRAMEWORK
As a provider of financial services, we consider risk management to
be a core competency and an integral part of our business. Our risk
management framework covers all operations and subsidiaries
within the Group in proportion to the inherent risks of the activities,
ensuring that risks across the Group are consistently identified, ana-
lyzed, assessed and managed. The primary goals of our risk man-
agement framework are:
Promotion of a strong risk management culture, supported by a
robust risk governance structure.
Consistent and proportional application of an integrated risk
capital framework to protect our capital base and support effec-
tive capital management.
Integration of risk considerations and capital needs into man-
agement and decision-making processes by attributing risk and
allocating capital to business segments, products, and strategies.
Our risk management system is based on the following four pillars:
Risk identification and underwriting: A robust system of risk iden-
tification and underwriting forms the foundation for adequate
risk management decisions. Supporting activities include stand-
ards for underwriting, valuation methods, individual transaction
and new product approvals, emerging-/operational-/top-risk as-
sessments, and scenario analysis, amongst others.
Risk strategy and risk appetite: Our risk strategy defines our risk
appetite consistent with our business strategy. It ensures that re-
wards are appropriate based on the risks taken and capital re-
quired and that delegated authorities are in line with our overall
risk-bearing capacity and strategy.
Risk reporting and monitoring: Our comprehensive qualitative
and quantitative risk monitoring and reporting framework pro-
vides management with the transparency needed to assess
whether our risk profile falls within delegated limits and to identi-
fy emerging issues and risks quickly. For example, risk dashboards
and limit consumption reports as well as scenario analysis and
stress tests are regularly prepared and communicated.
Communication and transparency: Transparent risk disclosure
provides the basis for communicating our strategy and perfor-
mance to internal and external stakeholders, ensuring a sustain-
able positive impact on valuation and financing. It also strength-
ens the risk awareness and risk culture throughout the entire Group.
OUR STRATEGY
OUR BUSINESS ASPIRATIONS
The Board of Management of Allianz SE has defined the following
objectives for Allianz's medium-term strategy with the motto "Simplic-
ity wins":
Allianz aims to ensure that the Group is adequately capitalized at all
times and that all related undertakings at least meet their respective
regulatory capital requirements for the benefit of both shareholders
and policyholders.
-
Target and strategy of risk management
C_Group Management Report
(160)
(123)
Administrative expenses
on reinsurance business ceded
Administrative expenses
14
13
(1,802)
(1,858)
1_As per Group Management Report.
2_For German Speaking Countries, policyholder participation on revaluation of DAC/URR capitalization/amortization.
3_For further information on the FIA adjustment, please refer to note 2 to the Consolidated Financial Statements, chapter
"Reserves for insurance and investment contracts", paragraph "Aggregate policy reserves".
4_As per notes to the Consolidated Financial Statements.
Annual Report 2018 - Allianz Group
73
RISK AND OPPORTUNITY REPORT
Outperform: we seek to move ahead of our competitors, both
traditional business and disruptors
Transform: we seek to become simpler and deeply digital, and to
make our business more scalable
Rebalance: we seek to build market-leading positions in large,
profitable and fast-growing geographies as well as new areas of
business
As the world's population ages, we are expanding our offerings in
the retirement savings markets.
In a continuously evolving market where the demands of customers
also constantly change, our knowledge of the industry and compe-
tences in product development and risk management offer us great
opportunities to create customer-focused solutions. For further details
on opportunities envisaged by the Allianz Group in the various seg-
ments, please refer to Outlook 2019.
RISK GOVERNANCE STRUCTURE
SUPERVISORY BOARD AND BOARD OF
MANAGEMENT
Allianz's approach to risk governance enables an integrated man-
agement of local and global risks and ensures that our risk profile
remains consistent with both our risk strategy and our capacity to
bear risks.
Within our risk governance system, the Supervisory Board and
Board of Management of Allianz SE have both Allianz SE and group-
wide responsibilities. The Board of Management formulates business
objectives and a corresponding risk strategy; the core elements of
the risk framework are set out in the Allianz Group Risk Policy and
approved by the Board of Management. The Supervisory Board
advises, challenges and supervises the Board of Management in the
performance of its management activities. The following committees
support the Board and the Supervisory Board on risk issues:
Supervisory Board Risk Committee
The Risk Committee of the Supervisory Board monitors the effective-
ness of the Allianz risk management framework. Furthermore, it
focuses on risk-related developments as well as general risks and
specific risk exposures.
Group Finance and Risk Committee
The Group Finance and Risk Committee (GFRC) provides oversight of
the Group's and Allianz SE's risk management framework, acting as a
primary early-warning function by monitoring the Allianz Group's and
Allianz SE's risk profiles as well as the availability of capital. The GFRC
also ensures that an adequate relationship between return and risk is
maintained. Additionally, the GFRC defines risk standards, forms the
limit-setting authority within the framework set by the Board of Man-
agement, and approves major financing and reinsurance transac-
tions. Finally, the GFRC supports the Board of Management with
recommendations regarding the capital structure, capital allocation,
and investment strategy, including the strategic asset allocation.
OVERALL RISK ORGANIZATION AND ROLES IN RISK
MANAGEMENT
A comprehensive system of risk governance is achieved by setting
standards related to organizational structure, risk strategy and appe-
tite, limit systems, documentation, and reporting. These standards
ensure the accurate and timely flow of risk-related information and a
disciplined approach towards decision-making and execution at both
the global and local level.
As a general principle, the "first line of defense" rests with busi-
ness managers in the related undertaking. They are responsible for
both the risks and returns from their decisions. Our "second line of
defense" is made up of independent global oversight functions
including Risk, Actuarial, Compliance, and Legal, which support the
Board in defining the risk frameworks within which the business can
operate. Audit forms the "third line of defense", independently and
regularly reviewing risk governance implementation, compliance with
risk principles, performing quality reviews of risk processes, and testing
adherence to business standards, including the internal control
framework.
Group Risk management function
Group Risk is managed by the Group Chief Risk Officer and supports
the Board of Management of Allianz SE, including its committees,
through the analysis and communication of risk management related
information and in implementing committee decisions.
We are building expertise and business models to profit from new
risk pools, including cyber risk (insurance, risk mitigation, and
recovery services) and mobility fleets.
We seek to grow in fast-growing regions, including Asia-Pacific,
and want to profit from consolidation in Europe.
As a diversified financial group that is active in over 70 countries,
we can innovate locally, then spread ideas and best practice
across the Group in order to exploit economies of scale.
By combining close customer understanding and evolving data
analytics techniques, we provide superior insurance products and
extend tailor-made services offerings as well as raising
productivity.
These objectives have been translated into clear ambitions for the
period 2019-21. With regard to financial performance, we strive for a
return on equity (excluding unrealized gains/losses on bonds) of at
least 13%, while growing our earnings per share at a compound
annual growth rate of at least 5% (baseline full year 2018).
To ensure the sustainability of our performance, we have set our-
selves health targets for customer loyalty and employee engage-
ment: Our ambition is for at least 75% of the business segments of our
entities to be or become rated by their customers as Loyalty Leader or
above-market in terms of Net Promoter Score (NPS). At the same time,
we aim to have our Inclusive Meritocracy Index at 73% or above.
OUR BUSINESS STRATEGY
To implement these strategic objectives, we have defined a number
of strategic priorities, and are implementing initiatives and programs
to address the five dimensions of our Renewal Agenda 2.0.
True Customer Centricity: design intuitive products and processes
to achieve loyalty leadership in our core markets.
Digital by Default: build legacy-free platforms with core process-
es automation.
Technical Excellence: move to data-driven product design, pric-
ing and claims handling.
Growth Engines: systematically exploit new sources for profitable
growth.
148
Inclusive Meritocracy: we reinforce a culture where both people
and performance matter.
Annual Report 2018 - Allianz Group
C_Group Management Report
The Board of Management of Allianz SE has also defined a strategy
for the management of risk. This risk strategy places a particular
emphasis on protecting the Allianz brand and reputation, remaining
solvent even in the event of extremely adverse scenarios, maintaining
sufficient liquidity to meet financial obligations, and providing resilient
profitability.
Opportunities
Our financial strength coupled with ongoing transformation renders
us resilient and allows us to profit from new opportunities in a fast-
changing business environment. For example,
-
-
74
6,374
8,538
Net fee and commission income
Contractual maturity date
1-5 years
Over 5 years
The following table details the long-term debt issuances and
redemptions of Allianz SE during 2018 and 2017:
Issuances and redemptions of Allianz SE's senior and subordinated
bonds
€ mn
As of 31 December
Up to 1 year
2018
Subordinated bonds
2017
Senior bonds
Subordinated bonds
1_Based on nominal value.
Issuance net
of
Issuances¹
Senior bonds
Redemptions¹
As of 31 December
Maturity structure of Allianz SE's senior and subordinated bonds¹
Conditional Capital
2010/2018³
€ 334,960,000
8 May 2023
6,713
8 May 2023
€ mn
€ 250,000,000
1 For issuance of shares against contribution in cash and/or kind, with the authorization to exclude shareholders'
subscription rights.
2_For issuance of shares to employees with exclusion of shareholders' subscription rights.
3_To cover convertible bonds, bonds with warrants, convertible participation rights, participation rights, and subordinated
financial instruments, each with the authorization to exclude shareholders' subscription rights.
For further information on our share capital and regarding authoriza-
tions to issue and repurchase shares, please refer to the chapter
Takeover-Related Statements and Explanations (part of the Group
Management Report) starting on > page 20.
LONG-TERM DEBT FUNDING
As of 31 December 2018, Allianz SE had senior and subordinated
bonds with a variety of maturities outstanding, reflecting our focus on
long-term financing. As the cost and availability of external funding
may be negatively affected by general market conditions or by
matters specific to the financial services industry or the Allianz Group,
we seek to reduce refinancing risk by actively steering the maturity
profile of our funding structure.
1_For further information on Allianz SE debt (issued or guaranteed) as of 31 December 2018, please refer to note 18 to
the Consolidated Financial Statements.
2_Based on nominal value.
2018/11²
redemptions
(500)
Total
2017
Senior bonds
500²
4,237
3,801
Non-Euro
2018
Senior and subordinated bonds
13,250
17,550
3,991
21,541
Total
Subordinated bonds
500
Euro
€ mn
2,000
1,500
1,400
2,000
100
Funding in non-Euro currencies enables us to diversify our investor
base or to take advantage of favorable funding costs in those markets.
Funds raised in non-Euro currencies are incorporated in our general
hedging strategy. As of 31 December 2018, approximately 18.5%
(2017: 17.6%) of long-term debt was issued or guaranteed by
Allianz SE in currencies other than the Euro.
Currency allocation of Allianz SE's senior and subordinated bonds¹
2018
As of 31 December
Senior bonds
3,493
Subordinated bonds
Total
1,493
3,493
3,050
13,430
16,480
1,493
Authorized Capital
2018/1¹
Authorized Capital
Allianz SE's access to external funds depends on various factors such
as capital market conditions, access to credit facilities, credit ratings,
and credit capacity. The financial resources available to Allianz SE in
the capital markets for short-, mid- and long-term funding needs are
described below. In general, mid- to long-term financing is covered
by issuing senior or subordinated bonds or ordinary no-par value
shares.
Annual Report 2018 - Allianz Group
69
C_Group Management Report
SHARE CAPITAL
As of 31 December 2018, the issued share capital registered at the
Commercial Register was € 1,169,920,000. This was divided into
424,459,661 registered shares with restricted transferability. As of
31 December 2018, the Allianz Group held 961,636 (2017: 1,369,717)
own shares.
FUNDING SOURCES
Allianz SE has the option to increase its share capital according
to authorizations provided by the AGM. The following table outlines
Allianz SE's capital authorizations as of 31 December 2018:
Senior and subordinated bonds issued or guaranteed by Allianz SE¹
Weighted-
As of 31 December
Nominal value
€ mn
Carrying value
€ mn
Interest
expenses
Capital authorizations of Allianz SE
average
interest rate²
Allianz SE ensures adequate access to liquidity and capital for our
operating subsidiaries. The main sources of liquidity available for
Allianz SE are dividends received from subsidiaries and funding
provided by capital markets. Liquidity resources are defined as readily
available assets - specifically cash, money market investments, and
highly liquid government bonds. Our funds are primarily used for
interest payments on our debt funding, operating costs, internal and
external growth investments, and dividends to our shareholders.
The responsibility for managing the funding needs within the Group,
maximizing access to liquidity sources, and minimizing borrowing
costs lies with Allianz SE. We therefore comment on the liquidity and
funding resources of Allianz SE in the following sections. Restrictions
on the transferability of capital within the Group mainly result from
the capital maintenance rules under applicable company laws, as
well as from the regulatory solvency capital requirements for regu-
lated Group companies.
C_Group Management Report
LIQUIDITY AND FUNDING RESOURCES
Organization
The Allianz Group's liquidity management is based on policies and
guidelines approved by the Allianz SE Board of Management.
Allianz SE and each of the operating entities are responsible for
managing their respective liquidity positions, while Allianz SE
provides central cash pooling for the Group. Capital allocation is
managed by Allianz SE for the entire Group. This structure allows
the efficient use of liquidity and capital resources and enables
Allianz SE to achieve the desired liquidity and capitalization levels
for the Group and its operating entities.
INSURANCE OPERATIONS
The major sources of liquidity for our operational activities are
primary and reinsurance premiums received, reinsurance receivables
collected, investment income, and proceeds generated from the
maturity or sale of investments. These funds are mainly used to pay
claims arising from the Property-Casualty insurance business and
related expenses, life policy benefits, surrenders and cancellations,
acquisition costs, and operating costs.
LIQUIDITY RESOURCES AND USES
We receive a large part of premiums before payments of claims
or policy benefits are required, generating solid cash flows from our
insurance operations. This allows us to invest the funds in the interim
to create investment income.
The overall liquidity of our insurance operations depends on
capital market developments, interest rate levels, and our ability to
realize the market value of our investment portfolio to meet insur-
ance claims and policyholder benefits. Other factors affecting the
liquidity of our Property-Casualty insurance operations include the
timing, frequency, and severity of losses underlying our policies and
policy renewal rates. In our Life operations, liquidity needs are gener-
ally influenced by trends in actual mortality rates compared to the
assumptions underlying our life insurance reserves. Market returns,
crediting rates, and the behavior of our life insurance clients – for
example, regarding the level of surrenders and withdrawals - can
also have significant impacts.
ASSET MANAGEMENT OPERATIONS
Within our Asset Management operations, the most important
sources of liquidity are fees generated from asset management
activities. These are primarily used to cover operating expenses.
BANKING OPERATIONS
Major sources of liquidity in our Banking operations include customer
deposits, interbank loans, and interest and similar income from our
lending transactions. The most important uses of funds are the issuance
of new loans and investments in fixed-income securities. The liquidity
of our Banking operations is largely dependent on the ability of our
private and corporate customers to meet their payment obligations
arising from loans and other outstanding commitments. Our ability to
retain our customers' deposits is equally important to us.
Liquidity management and funding of Allianz SE
Our insurance operations also carry a high proportion of liquid
investments, which can be converted into cash to pay for claims.
Generally, our investments in fixed-income securities are sequenced
to mature when funds are expected to be needed.
€ mn
%
2018
Subordinated bonds
Total
8,595
209
3.1
13,309
Expiry date of
the authorization
13,250
4.6
21,904
21,789
822
4.1
Capital authorization
613
Nominal amount
Senior bonds
2017
Senior bonds
8,086
8,036
212
2.6
Subordinated bonds
13,456
13,430
605
4.5
Total
21,541
21,466
817
3.8
1 Based on carrying value.
500
€ 15,000,000
17,051
(3.2)
5.1
Corporate and Other
(4.0)
(49.3)
(51.1)
2.5
2018
Allianz Group
6.1
(0.2)
(2.4)
3.5
PROPERTY-CASUALTY
2017
2017
5.8
€ mn
Changes in
scope of
consolidation
Foreign
currency
translation
Nominal
Growth
Property-Casualty
5.7
0.1
Asset Management
(3.2)
Life/Health
6.4
(0.1)
(1.6)
4.7
Composition of total revenues
2.6
Internal
Growth
Gross premiums written
52,262
67,277
Corporate and Other
1.9
1.9
ASSET MANAGEMENT
Allianz Group
70,450
5.0
4,237
3.0
Operating revenues
consisting of:
6,732
6,408
(0.9)
53,636
Statutory premiums
(1.6)
Property-Casualty
2.3
0.4
(1.3)
1.4
Life/Health
6.4
7.0
(0.8)
4.1
LIFE/HEALTH
Asset Management
7.8
0.2
(2.0)
2018
(1.0)
Total revenues comprise statutory gross premiums written in Property-
Casualty and Life/Health, operating revenues in Asset Management,
and total revenues in Corporate and Other (Banking).
2018
2017
Delta
Net cash flow provided by operating
activities
25,672
33,188
€ mn
(7,516)
€ mn
Interest
expense
€ mn
Average
interest rate
Net cash flow used in investing activities
Net cash flow used in financing activities
Change in cash and cash equivalents ¹
(19,310)
(24,755)
Carrying value
Annual changes in cash and cash equivalents
Allianz Group consolidated cash flows
As of 31 December
%
2017
Senior and subordinated bonds
18,050
21,904
2 € 0.5 bn senior bond was redeemed in the first quarter of 2018.
1_Based on nominal value.
Interest expenses on senior bonds increased, mainly due to higher
outstanding volumes on average in 2018. For subordinated bonds,
the decrease of interest expenses was primarily driven by lower
funding costs on average in 2018.
70
70
Annual Report 2018 - Allianz Group
C_Group Management Report
SHORT-TERM DEBT FUNDING
Short-term funding sources available are the Medium-Term Note
Program and the Commercial Paper Program. Money market securities
increased in the use of commercial paper, compared to the previous
year-end. Interest expenses on money market securities increased
mainly due to higher funding costs on average in 2018.
Money market securities of Allianz SE
5,445
(6,821)
3,854
(1,794)
(5,027)
Reconciliation of nominal total revenue growth
to internal total revenue growth
Composition of total revenue growth
The previous analysis is based on our Consolidated Financial
Statements and should be read in conjunction with them. In addition
to our figures stated in accordance with the International Financial
Reporting Standards (IFRS), the Allianz Group uses operating profit
and internal growth to enhance the understanding of our results.
These additional measures should be viewed as complementary to,
rather than a substitute for, our figures determined according to IFRS.
For further information, please refer to note 4 to the Consoli-
dated Financial Statements.
RECONCILIATIONS
C_Group Management Report
71
Annual Report 2018 - Allianz Group
For further information on the Consolidated Statements of Cash
Flows, please refer to > page 96.
Cash and cash equivalents decreased by € 0.4 bn. This figure
includes cash and cash equivalents reclassified to assets of disposal
groups held for sale which were disposed of in 2018.
Net cash outflow used in financing activities amounted to
€ 6.8 bn, compared to € 5.0 bn in 2017. This increase was largely
driven by net cash outflows from our refinancing activities - after net
cash inflows in 2017 -, mainly due to the redemption of a senior bond
in the first quarter of 2018. Higher net cash inflows from liabilities to
banks and customers partly offset this effect.
Net cash outflow used in investing activities decreased by
€ 5.4 bn to € 19.3 bn. The main driver was lower net cash outflows
from available-for-sale investments, particularly at Allianz SE and in
the Life/Health business segment in Germany. Higher net cash
outflows from loans and advances to banks and customers, mainly
in the Life/Health business segment in Germany and at Allianz SE,
partially compensated for this effect.
Net cash flow provided by operating activities amounted to
€ 25.7 bn, after € 33.2 bn in 2017. This figure comprises net income
plus adjustments for non-cash charges, credits, and other items
included in net earnings, as well as cash flows related to the net
change in operating assets and liabilities. Net income after adding
back non-cash charges and similar items increased by € 3.1 bn to
€ 13.7 bn in 2018. Operating cash flows from net changes in operating
assets and liabilities dropped to € 12.0 bn. This was mainly driven by
net cash outflows from assets and liabilities held for trading (after
net cash inflows in 2017), particularly in our Life/Health business
segment in Germany.
Further potential sources of short-term funding allowing the
Allianz Group to fine-tune its capital structure are letter of credit
facilities and bank credit lines.
The Group maintained its A-1+/Prime-1 ratings for short-term
issuances. We can therefore continue funding our liquidity under the
Euro Commercial Paper Program at an average rate for each
tranche below Euribor, and under the U.S. Dollar Commercial Paper
Program at an average rate for each tranche below U.S. Libor.
We believe that an understanding of our total revenue performance
is enhanced when the effects of foreign currency translation as well
as acquisitions, disposals, and transfers (or "changes in scope of
consolidation") are analyzed separately. Accordingly, in addition to
presenting nominal total revenue growth, we also present internal
growth, which excludes these effects.
13
(416)
1.2
2,656
(3,072)
%
1_Includes effects of exchange rate changes on cash and cash equivalents of € 41 mn and € (749) mn in 2018 and 2017,
respectively.
2018
Money market securities
Composition of total revenues
20
1.7
1,163
2017
Money market securities
1,058
33
C_Group Management Report
87
Annual Report 2018 - Allianz Group
1 Additionally, 7.9 % (2017: 4.5 %) of our total Group pre-diversified internal credit risk is allocated to receivables, potential
future exposure for derivatives and reinsurance, and other off-balance sheet exposures.
1 Represents gross exposure for external reinsurance broken down by reinsurer. Overall exposure increases mainly due
to changed methodology for determining reinsurance exposure subject to credit risk.
17.52
5.08
4.05
0.01
0.01
0.33
6.31
16.85
UNDERWRITING RISK
Premium natural
Allianz Group: Risk profile – allocated underwriting risk by business segment and source of risk (total portfolio before non-controlling interests)¹
pre-diversified, € mn
catastrophe
As of 31 December
2018
2017²
Premium non-catastrophe
Reserve
Biometric
Total
2017²
2018
4.94
2017²
2018
The following table presents the pre-diversified risk calculated for
underwriting risks associated with our insurance business.
Premium terror
2018
CREDIT RISK - REINSURANCE
6.47
1.1
2017²
5.1
4.9
18.3
18.0
3.0
3.1
6.8
5.6
554.3
553.1
1 In accordance with the Group Management Report, figures stated include investments of Banking and Asset Management. Table excludes private loans. Stated market values include investments not in scope of the Solvency II framework.
CREDIT RISK - CREDIT INSURANCE
1.72
Reinsurance recoverables by rating class¹
As of 31 December 2018, 11.5% (2017: 9.6%) of our total Group pre-
diversified internal credit risk was allocated to Euler Hermes credit
insurance exposures, for which the relative increase is primarily driven
by the lower credit risk of the investment portfolio.
As of 31 December 2018, 1.3% (2017: 0.7%) of our total Group pre-
diversified internal credit risk was allocated to reinsurance exposures
- of which 51.7% (2017: 51.8%) was related to reinsurance counter-
parties in the United States and Germany.
While 76.9% (2017: 69.8%) of the Allianz Group's reinsurance re-
coverables were distributed among reinsurers that had been as-
signed an investment-grade rating, the non-rated reinsurance recov-
erables represented 23.1% (2017: 30.1%). For substantial exposures
to non-rated captives, risk mitigating techniques such as collateral
agreements or funds-withheld concepts are in place.
As of 31 December
AAA
AA+ to AA-
A+ to A-
BBB+ to BBB-
Non-investment grade
Not assigned
Total
2018
2017
0.02
0.01
5.42
€ bn
2018
98
2018
863
11,771
Share of total Group pre-diversified risk
23.91%
11,641
23.46%
1_As risks are measured in an integrated approach and on an economic basis, internal risk profile takes reinsurance effects into account.
2_2017 risk profile figures recalculated based on model changes in 2018 and the impacts of minor and immaterial model changes were allocated proportionally.
PROPERTY-CASUALTY
During 2018, the total of the stand-alone underwriting risk capital on
a Group diversified basis decreased by € 0.1 bn. This slight decrease
was mainly driven by exposure and model updates as well as imma-
terial model changes at the local level. The remaining difference is
due to diversification effects with other underwriting risk categories.
Overall, the underwriting risk profile for Allianz Group is not ex-
pected to change materially, as we do not plan to significantly
change our underwriting standards (Allianz Standard for P&C Un-
derwriting), or our Group natural catastrophe, man-made or terror
risk appetite and the associated retrocession reinsurance strategy.
The loss ratios for the Property-Casualty business segment can
be seen in the following table:
Property-Casualty loss ratios¹ for the past ten years
%
Loss ratio
Loss ratio
excluding
natural
catastrophes
Annual Report 2018 - Allianz Group
88
80
Detailed information regarding the Allianz Group's liquidity risk expo-
sure, liquidity, and funding - including changes in cash and cash
equivalents - is provided in Liquidity and Funding Resources from
> page 69 onwards and in notes 13, 19 and 35 to the Consolidated
Financial Statements. As inferred from the section on the manage-
ment of liquidity risks, they are quantified and monitored through
regular stress test reporting and properly managed but are not quan-
tified for risk capital purposes.
LIQUIDITY RISK
The slight decrease in risk capital for operational risks was driven by
the annual regular update of local parameters. The majority of the
different operational risk categories contributed to the decrease,
however the main improvement was due to the category "capture,
execution and maintenance of transactions" and the consideration of
a cyber insurance policy purchased by the Group. Foreign currency
exchange effects played a secondary role.
OPERATIONAL RISK
There was no significant impact on the overall business risk from
regular model updates or the evolution of our business. The contribu-
tion of business risk increased by € 0.3 bn to € 4.6 bn.
BUSINESS RISK
Due to effective product design and the diversity of our products,
there were no significant concentrations of underwriting risks within
our Life/Health business segment.
The risk capital contribution of biometric risk decreased by € 0.3 bn
compared to the previous year (after considering model changes).
This is mainly due to the annual central and local updates of the
longevity risk model. The contributions from the Property-Casualty
and the Corporate and Other business segments are generated by
the longevity risk of the internal pension schemes they contain.
LIFE/HEALTH
The top three perils contributing to the natural catastrophe risk as of
31 December 2018 were: windstorms in Europe, floods in Germany,
and earthquakes in Australia.
64.0 64.2 64.2 64.6 65.1 63.0 66.6 65.5 65.9 68.4
1_Represents claims and insurance benefits incurred (net), divided by premiums earned (net).
2018 2017 2016 2015 2014 2013 2012 2011 2010 2009
66.0 66.5 65.6 66.2 66.0 65.9 68.3 69.9 69.1 69.5
0.4
597
191
191
98
2017²
Property-Casualty
827
814
64
29
5,087
4,939
5,196
4,997
82
144
11,257
10,922
2017²
Life/Health
528
416
528
Asset Management
Corporate and Other
Total Group
827
814
64
29
5,087
4,939
5,196
4,997
416
21.7
55.0
755
Currency
Real estate
Equity
Credit spread
Inflation
Interest rate
Allianz Group: Risk profile - market risk by business segment and source of risk (total portfolio before tax and non-controlling interests)
pre-diversified, € mn
Total
C_Group Management Report
Annual Report 2018 - Allianz Group
The following table presents our group-wide risk figures related to
market risks by business segment and source of risk.
MARKET RISK
evolution also slightly increased the SCR, due to higher net earned
premiums in the Property-Casualty business segment. This was par-
tially offset by the effect of management actions and exposure up-
dates such as the buyout of Euler Hermes and the sale of Olden-
burgische Landesbank Aktiengesellschaft as well as market devel-
developments - specifically the decrease in equity indices.
As of 31 December 2018, the Group diversified risk capital re-
flecting our risk profile before considering non-controlling interests
amounted to € 33.5 bn (2017: €33.3 bn). This represents a slight
reduction in the diversification benefit - before tax - of 1.6% to 23.3%.
The marginal increase in Solvency II capital requirement was mainly
due to regulatory and model changes such as including Euler Re and
Allianz Ayudhya Assurance (Thailand), based on their standard for-
mula results, and the reduction of the ultimate forward rate. Business
The following sections explain the evolution of our risk profile per risk
category modeled. All risks are presented on a pre-diversified basis
and concentrations of single sources of risk are discussed accordingly.
1_2017 risk profile figures recalculated based on model changes in 2018 and the impacts of minor and immaterial model changes were allocated proportionally. Tax estimated with year-end 2018 results.
85
As of 31 December
2018
2017¹
(1,292)
(1,608)
(369)
(478)
Property-Casualty
2017¹
2018
2017¹
2018
2017¹
2018
2017¹
2018
2017¹
2018
2017¹
2018
Ταχ (4,258) (4,258)
Total Group 33,487 34,091
2,383
2,040
(665)
(11,488) 37,745 38,348
802
19
20
170
180
Asset Management
(6,048)
2,099
2,024
3,596
3,886
527
416
2,847
2,712
16,016
15,646
Corporate and Other
3,013
(5,971) 16,067 14,788
(4,852) 18,636 20,233
1,002
943
1,306
(11,491)
5,605
5,146
4,335
4,610
(476)
838
578
191
11,641
11,771
5,757
22,102 22,499 5,607
Total Group
98
610
533
1,409
Corporate and Other
3,043
2,679
2,476
124
(36)
1,961
2,942
9,535
9,544
9,641
10,174
(1,796)
(2,200)
3,035
1,678
Total Group
1,409
1,306
163
(132)
Share of total Group pre-diversified risk
99
22,102
44.9%
45.1%
2017¹
2018
Share of total Group pre-diversified risk
Total Group
Asset Management
Corporate and Other
As of 31 December
Property-Casualty
Life/Health
Allianz Group: Risk profile - allocated credit risk by business segment
(total portfolio before tax and non-controlling interests)
pre-diversified
The following table presents our group-wide risk figures related to
credit risks by business segment.
CREDIT RISK
As of 31 December 2018, about 6.0% (2017: 4.0%) of the total pre-
diversified risk was related to real estate exposures.
REAL ESTATE RISK
As of 31 December 2018, our investments excluding unit-linked busi-
ness that are sensitive to changing equity markets - amounting to a
market value of € 59.4 bn 3 (2017: € 57.1bn) would have lost
€ 12.4 bn (2017: € 14.9 bn) in value assuming equity markets de-
clined by 30%. However, this impact would have been partially offset
by policyholder participation.
EQUITY RISK
As of 31 December 2018, our interest-rate-sensitive investments
excluding unit-linked business amounting to a market value of
€ 421.3 bn (2017: € 427.3 bn) ¹ - would have gained € 42.1 bn (2017:
€ 41.6 bn) or lost € 36.4 bn (2017: € 36.1 bn)² in value in the event of
interest rates changing by - 100 and + 100 basis points, respectively.
However, these impacts would have been partially offset by policy-
holder participation. In addition, the Solvency II Own Funds effect is
much more limited due to our active duration management, limiting
our duration mismatch to a positive 0.2 years, representing assets of
longer duration than Solvency II liabilities.
INTEREST RATE RISK
The Group's total pre-diversified market risk decreased by € 0.4 bn,
which was mainly driven by interest rate and inflation risk, especially
in the Life/Health business segment, with increases in credit spread
and real estate risk creating a dampening effect. The decrease in
interest rate risk was driven by management actions - in particular
duration management measures - that improved the interest rate risk
profile. The impact of widening credit spreads observed in financial
markets was compensated by decreasing rates and the correspond-
ing changes in the fixed-income investment portfolio. Real estate risk
increased due to higher exposure in real estate and infrastructure
investments. The overall reduction in market risk was also supported
by exposure changes due to ALM measures and the corresponding
effects on the diversification between market risk factors.
1_2017 risk profile figures recalculated based on model changes in 2018 and the impacts of minor and immaterial model changes were allocated proportionally.
22,499
Life/Health
115
679
(18)
851
1,458
6,565
6,155
5,850
6,459
(92)
3,030 (246)
1,838
Life/Health
4,904
4,969
64
24
982
1,339
(188)
465
15,646
Asset Management
748
702
(412)
(345)
345
288
Corporate and Other
170
180
85
90
28
30
28
30
28
30
16,016
€ mn
2017¹
2017¹
In addition, future Solvency II capital requirements might change
depending on the outcome of the 2020 review of the Solvency II
framework by EIOPA. Finally, the potential for a multiplicity of differ-
ent regulatory regimes, capital standards, and reporting require-
ments will increase operational complexity and costs.
As Solvency II became effective in 2016, our approved Group internal
model has been applied since the beginning of that year. There is still
uncertainty about future regulatory requirements, as the future capi-
tal requirements for Global Systemically Important Insurers (so-called
G-SIIs) are yet to be finalized.
REGULATORY DEVELOPMENTS
Even under conservative assumptions (driven by assumed ad-
verse financial market developments), the Group will remain well
capitalized.
No issues are expected regarding derivatives, since all outstand-
ing derivatives will be valid for at least one year post Brexit and
new and rolled derivatives will be placed to minimize the implica-
tions.
Allianz insurance and asset management entities will be able to
continue coverage and services by using legal possibilities such as
Temporary Permission, Run off Regimes and/or Branch solutions
depending on the respective business case.
Based on our assessments, the Allianz Group is well prepared for
the Brexit and confident that it will have only minimal direct impact
on both the Group and its activities. This is because our insurance,
asset management and investment management entities have taken
actions to ensure that they are in the position to handle various Brexit
scenarios, for example:
MANAGEMENT ASSESSMENT
Political risk is the risk that returns could suffer as a result of political
changes or instability in a country, region or globally, for example
Brexit (i.e. the withdrawal of the United Kingdom from the European
Union). The Allianz Group is exposed to Brexit through business and
insurance / derivative contract continuity risk, and the impact on
earnings and solvency.
Financial markets are characterized by historically low interest rates
and risk premiums, prompting some investors to look for higher-
yielding and potentially higher-risk - investments. In addition to
sustained low interest rates, the challenges of implementing long-
term structural reforms in key Eurozone countries, the uncertainty
about future monetary and fiscal policies, rising populism, and
increased trade tension may lead to increasing market volatility. This
could be accompanied by a flight to quality, combined with falling
equity and bond prices due to rising spread levels, even in the face of
potentially lower interest rates. We therefore continue to closely
monitor political and financial developments - such as the Brexit in
the United Kingdom and the potential rise of Euroscepticism, and the
global trade situation - in order to manage our overall risk profile to
specific event risks.
POTENTIAL RISKS IN THE FINANCIAL MARKET AND IN
OUR OPERATING ENVIRONMENT
C_Group Management Report
83
Annual Report 2018 - Allianz Group
The risk profile and relative contributions have changed in 2018,
predominantly due to changes in the market environment as well as
to management actions such as the decrease in asset/liability
duration mismatch, the reduction of exposures to some sovereign
bond investments, and the significant increase in exposures to real
estate and infrastructure investments. The regulatory and other
model changes also contributed to the change.
Market risk, especially equity risk, credit and credit spread risks
driven by assets backing long-term liabilities, which we take to
benefit from the expected risk premium; interest rate risk has re-
duced substantially due to duration management activities.
Property-Casualty premium and reserve risks resulting from
natural and man-made catastrophes as well as from claims
uncertainty.
Risk caused by Brexit in the United Kingdom
The Allianz Group's management feels comfortable with the Group's
overall risk profile and has confidence in the effectiveness of its risk
management framework to meet both, the challenges of a rapidly
changing environment and the day-to-day business needs. This
confidence is based on several factors, which are summarized below:
Due to its effective capital management, the Allianz Group is well
capitalized and has met its internal, rating agency, and regulato-
ry solvency targets as of 31 December 2018. Allianz remains one
of the most highly rated insurance groups in the world, as reflect-
ed by our external ratings.
%
33.3
33.5
€ bn
76.4
76.8
€ bn
2017
2018
Capital requirement
Capitalization ratio
As of 31 December
Own Funds
Allianz Group: Solvency II regulatory capitalization
The Allianz Group's Own Funds and capital requirements are based
on the market value balance sheet approach consistent with the
economic principles of Solvency II¹. Our regulatory capitalization is
shown in the following table.
SOLVENCY II REGULATORY CAPITALIZATION
Finally, the Group has the additional advantage of being well-
diversified, both geographically and across a broad range of
businesses and products.
The Group has a conservative investment profile and disciplined
business practices in the Property-Casualty, Life/Health, and Asset
Management business segments, leading to sustainable operat-
ing earnings with a well-balanced risk-return profile.
Allianz is well positioned to deal with potentially adverse future
events - due, in part, to our strong internal limit framework, stress
testing, internal model, and risk management practices.
RISK PROFILE AND MARKET ENVIRONMENT
The Allianz Group is exposed to a variety of risks. The largest risks in
terms of their contribution to Allianz's risk profile are:
Allianz risk profile and management assessment
The regulatory and model changes in 2018 resulted in a € 0.7 bn
increase of Own Funds, mainly driven by a change in the ZZR
(Zinszusatz Reserve, an additional required reserve built up to
counteract the low interest rate environment) at Allianz Leben, the
inclusion of Allianz Ayudhya Assurance (Thailand) into the standard
formula, and the impact from introducing a regulatory required
transferability restriction for the Own Funds of Allianz Life US.
IMPACT OF MODEL CHANGES ON ELIGIBLE GROUP
OWN FUNDS
(12,546)
(11,488)
4,335 4,400 5,605 5,459
11,978
11,641
22,499 21,617 5,757 6,954
Total Group
2,472
2,383
(490)
(665)
885
838
147
191
651
610
38,348
229
37,862
Total Group
No material operational risk model change has been applied in
2018.
OPERATIONAL RISK
The slight decrease of the overall business risk was mainly driven by
the cross effect model change due to a more granular modeling of
lapse risk for the Life/Health business segment and subsequent corre-
lation adjustments versus the lapse risk for the Property-Casualty
business segment.
BUSINESS RISK
The increase in underwriting risk seen for the business segments
Life/Health and Corporate/Other was mainly driven by the cross
effect central model change as it reduced the diversification for mul-
tiple biometric risk factors.
Life/Health
The decrease in underwriting risk in the Property-Casualty business
segment was mainly driven by the central correlation matrix update
and some immaterial local model changes.
Property-Casualty
UNDERWRITING RISK
Other immaterial credit risk model changes in 2018 were related
to changes to internal rating models for specific asset classes.
Credit risk was reduced by € 1.2 bn to € 5.8 bn (2017: € 7.0 bn) primarily
in the Life/Health business segment, due to the introduction of the
cross effect model change which isolated the cross effects between
credit and market risks.
CREDIT RISK
The impacts of minor, immaterial model and regulatory changes.
mostly allocated to market risk - overcompensated the positive
impact of the cross effect model change. The resulting overall in-
crease in market risk impacted all segments with the largest impact
seen for the Property-Casualty business segment. The combined
impact of the regulatory and model changes on the total market risk
of Allianz was an increase of € 0.9 bn to € 22.5 bn (2017: € 21.6 bn).
MARKET RISK
In 2018, the impact of the model changes to our internal model
focused on the following risk categories:
1_2017 risk profile figures recalculated based on model changes in 2018 and the impact of minor and immaterial model changes were allocated proportionally. Tax estimated with yearend 2018 results.
2 2017 risk profile figures as reported previously.
34,091 33,317
Ταχ (4,258) (4,545)
229
The following table summarizes our Solvency II regulatory capitaliza-
tion ratios disclosed over the course of the year 2018.
Allianz Group: Solvency II regulatory capitalization ratios
2018
As of 31 December
Total
Diversification
Operational risk
Business risk
Underwriting risk
Credit risk
Market risk
€ mn
Allianz Group: Allocated risk according to the risk profile (total portfolio before non-controlling interests)
The Group diversified risk is broken down as follows:
The pre-diversified risk figures reflect the diversification effect
within each modeled risk category (i.e. market, credit, underwriting,
business, and operational risk) but do not include the diversification
effects across risk categories. Group diversified risk figures also cap-
ture the diversification effect across all risk categories.
With the exception of the Asset Management business segment,
all business segments are exposed to the full range of risk categories.
As mentioned earlier, the Asset Management business segment is
predominantly exposed to operational and market risks and to a
lesser extent to credit risk.
At the Allianz Group, we measure and steer risk based on an ap-
proved internal model which measures the potential adverse devel-
opments of Own Funds. The results provide an overview of how our
risk profile is distributed over different risk categories, and determines
the regulatory capital requirements in accordance with Solvency II.
This Risk and Opportunity Report outlines the Group's risk figures,
reflecting its risk profile based on pre-diversified risk figures and
Group diversification effects.
Quantifiable risks and opportunities by risk
category
2017¹
The Allianz Group is a financial conglomerate within the scope of the
Financial Conglomerate Directive (FCD). The FCD does not impose a
materially different capital requirement on Allianz Group compared
to Solvency II.
2018
2018
2018
(4,967)
1,913
1,742
739
724
10,923
11,257
2,281
2,341
4,904
4,969
Property-Casualty
2017¹
2018
2017¹
2018
2017¹
2017¹
2018
1_Non-parallel interest rate shifts due to extrapolation of the yield curve beyond the last liquid point in line with
Solvency II rules.
217
Allianz Group: Solvency II regulatory capitalization ratio sensitivities
The following table presents the sensitivities of our Solvency II
capitalization ratio under certain standard financial scenarios.
mes, the sale of Oldenburgische Landesbank Aktiengesellschaft, the
decrease in exposures to some government bonds, and the im-
provement of our interest rate risk profile. The regulatory and model
changes and the unfavorable markets characterized by higher
credit spreads and lower equity prices - also contributed to this com-
pensating effect, along with other impacts such as taxes, changes in
transferability restrictions, and diversification effects.
-
C_Group Management Report
Annual Report 2018 - Allianz Group
84
1 Own Funds and capital requirement are calculated under consideration of volatility adjustment and yield curve
extension, as described in section "Risk-free rate and volatility adjustment".
Compared to year-end 2017, our Solvency II capitalization ratio
remained stable at 229% as the increase in Own Funds was com-
pletely offset by a corresponding increase in the Solvency II capital
requirement. This was due to compensating effects. Over the course
of the year, strong Solvency II earnings had a positive impact on our
Solvency II capitalization. However, this positive effect was partly
offset by capital management activities such as the share buy-back
program and the dividend accrual, as well as by management ac-
tions such as the buyout of the non-controlling interests of Euler Her-
1_Includes share buy-back.
31 Dec 2017
229¹
31 Mar 2018
225
30 Jun 2018
230
30 Sept 2018
229¹
31 Dec 2018
229
Capitalization
ratio
%
%
212
As of 31 December
Interest rates up by 0.5%¹
240
223
221
238
218
226
231
231
229
229
2017
2018
Interest rate down by 0.5%¹
Equity prices down by 30%
Combined scenario:
Equity prices down by 30%
Equity prices up by 30%
Interest rates down by 0.5%¹
Base capitalization ratio
1,279
2,341
€ mn
2017¹
2017²
2017¹
2017²
2017¹
2017²
2017¹
As of 31 December
2017²
2017²
20171
2017²
2017¹
2017²
Property-Casualty
4,904
2017¹
Total
Diversification
Operational risk
Furthermore, we validate the model and parameters through
sensitivity analyses, independent internal peer reviews, and, where
appropriate, independent external reviews, focusing on methods for
selecting parameters and control processes. To ensure that the model
is validated adequately, we established an Independent Validation
Unit (IVU) within Group Risk, responsible for validating our internal
model within a comprehensive model validation process. Any limita-
tions identified during the validation process are remedied after
consultation with the Group regulator. Overall, we believe that our
validation efforts are effective and that the model adequately as-
sesses the risks to which we are exposed.
The construction and application of the replicating portfolios
mentioned are subject to the set of available replicating instruments
and might be too simple or restrictive to capture all factors affecting
the change in value of liabilities. As with other model components,
the replications are subject to independent validation and to suitability
assessments as well as to stringent data and process quality controls.
Therefore, we believe that the liabilities are adequately represented by
the replicating portfolios.
Since the internal model takes into account the change in the
economic fair value of our assets and liabilities, it is crucial to estimate
the market value of each item accurately. For some assets and liabilities
it may be difficult, if not impossible - notably in distressed financial
markets - to either obtain a current market price or apply a meaning-
ful mark-to-market approach. For such assets we apply a mark-to-
model approach. For some of our liabilities, the accuracy of their values
also depends on the quality of the actuarial cash flow estimates.
Despite these limitations, we believe the estimated fair values are
appropriately assessed.
REGULATORY AND MODEL CHANGES IN 2018
In 2018, our internal model was adjusted based on regulatory devel-
opments, validation results for our model, and the feedback received
during the ongoing consultations with regulators. For the sake of
clarity, all model changes and resulting impacts are presented within
this section, based on data as of 31 December 2017.
The net impact of regulatory and Group model changes on the
Solvency II risk capital of the Group in 2018 was € 0.8 bn. This is main-
ly driven by regulatory changes such as the reduction in the ultimate
forward rate, the reduction in tax rate for Allianz Life US and the
inclusion of Euler Re and Allianz Ayudhya Assurance (Thailand)
based on their standard formula results. In addition, minor and imma-
terial model changes also contributed to a further increase of
€ 0.2 bn. Within these figures, the increase in risk capital was partially
offset by the cross effect model change which replaced a conserva-
tive calibration with a more accurate modeling approach. Cross
effects are defined as the effects arising due to the interaction
between different risk categories.
In all subsequent sections, the figures including model changes
will form the basis for the movement analysis of our risk profile in 2018.
82
22
Annual Report 2018 - Allianz Group
C_Group Management Report
Allianz Group: Impact of regulatory and model changes - allocated risk according to the risk profile (total portfolio before non-controlling interests)
€ mn
Market risk
Credit risk
Underwriting risk
Business risk
4,300
2,281
2,433
10,923
17,775
Asset Management
170
170
19
19
755
755
943
24.1
30.6
32.2
200.4 195.6
0.1
0.6
0.6
9.2
20,233
stress testing.
(7,858)
1,945
11,417
739
844
1,913
1,875
(5,971)
(4,198) 14,788 16,671
Life/Health
16,016
15,868
2,847
3,851
527
413
3,596
3,556
2,099
(4,852)
We use model and scenario parameters derived from historical
data, where available, to characterize future possible risk events. If
future market conditions differ substantially from the past, for example
in an unprecedented crisis, our VaR approach may be too conserva-
tive or too liberal in ways that are difficult to predict. In order to mitigate
reliance on historical data, we complement our VaR analysis with
As the internal model is based on a 99.5% confidence level, there is a
low statistical probability of 0.5% that actual losses could exceed this
threshold at the Group level in the course of one year.
MODEL LIMITATIONS
Annual Report 2018 - Allianz Group
79
C_Group Management Report
risks are mitigated through investments in cyber security and a variety
of ongoing control activities.
OTHER RISKS NOT MODELED IN THE INTERNAL
MODEL
There are certain risks which are not adequately addressed or miti-
gated by additional capital and are therefore not considered in the
internal model. For the identification, analysis, assessment, monitoring,
and management of these risks, we also use a systematic approach
with risk assessment generally based on qualitative criteria or scenario
analyses. The most important of these other risks are strategic, liquidity,
and reputational risk.
STRATEGIC RISK
Strategic risk is the risk of a decrease in the company's value arising
from adverse management decisions on business strategies and their
implementation.
Strategic risks are identified and evaluated as part of the Group's
Top Risk Assessment process, and discussed in various Board of Man-
agement-level committees (for example GFRC). We also monitor
market and competitive conditions, capital market requirements,
regulatory conditions, etc., to decide if strategic adjustments are
necessary.
The most important strategic risks are directly addressed through
Allianz's Renewal Agenda, which focuses on five themes: True Cus-
tomer Centricity, Digital by Default, Technical Excellence, Growth
Engines, and Inclusive Meritocracy. Progress on mitigating strategic
risks and meeting the Renewal Agenda objectives is monitored and
evaluated as part of the Strategic and Planning Dialogs between
Allianz Group and the related undertakings.
LIQUIDITY RISK
Liquidity risk is defined as the risk that current or future payment
obligations cannot be met or can only be met on the basis of ad-
versely altered conditions. Liquidity risk can arise primarily if there are
mismatches in the timing of cash in- and out-flows.
Our related undertakings manage liquidity risk locally, using as-
set/liability management systems designed to ensure that assets and
liabilities are adequately matched. Local investment strategies par-
ticularly focus on the quality of investments and ensure a significant
portion of liquid assets (e.g. high-rated government bonds or covered
bonds) in the portfolios. In the course of liquidity planning, we recon-
cile liquidity sources (e.g. cash from investments and premiums) and
liquidity needs (e.g. payments due to insurance claims and expenses)
under a best-estimate plan, as well as under idiosyncratic and sys-
temic adverse liquidity scenarios, to allow for a group-wide consistent
view on liquidity risks. These analyses are performed at the entity
level and are monitored by the Group.
An identical liquidity stress-testing framework is applied to
Allianz SE. Major contingent liquidity requirements include market
risk scenarios for Allianz SE and its subsidiaries, non-availability of
external capital markets, and reinsurance risk scenarios for Allianz SE.
In addition, the accumulated liquidity position of Allianz SE's
cash pool is monitored and forecast on a daily basis. It is subject to an
absolute minimum strategic cushion amount and an absolute mini-
mum target liquidity amount, while the strategic liquidity planning for
Allianz SE over time horizons of twelve months and three years is
reported to the Board of Management regularly and strives for the
achievement of a target level for the strategic liquidity reserve.
REPUTATIONAL RISK
This framework triggers specific mitigating control programs. For
example, compliance risks are addressed via written policies and
dedicated compliance programs monitored by the Group Compli-
ance function at Allianz Group. The risk of financial misstatement is
mitigated by a system of internal controls covering financial reporting.
Outsourcing risks are covered by an Outsourcing Policy, Service Level
Agreements, and Business Continuity and Crisis Management pro-
grams to protect critical business functions from these events. Cyber
Allianz's reputation as a well-respected and socially aware provider
of financial services is influenced by our behavior in a range of areas
such as product quality, corporate governance, financial performance,
customer service, employee relations, intellectual capital, and corporate
responsibility.
Allianz has developed a consistent operational risk management
framework, which is applied across the Group and focuses on the
early recognition and proactive management of material operational
risks. The framework defines roles and responsibilities as well as
management processes and methods: Local risk managers, in their
capacity as the "second line of defense", identify and evaluate rele-
vant operational risks and control weaknesses via a dialog with the
"first line of defense", report operational risk events in a central
database, and ensure that the framework is implemented in their
respective operating entity.
The operational risk capital of the Group is dominated (more than
80%) by the risk of potential losses within the categories: "Clients,
Products, and Business Practices" and "Execution, Delivery, and
Process Management". With regard to the largest category "Clients,
Products, and Business Practices" (which contributes approximately
two-thirds), the key external drivers are changes in laws and regula-
tions. Internal drivers reflect potential failures of internal processes.
These drivers are considered in the local scenario analysis.
C_Group Management Report
Similar to premium risk, reserve risk is calculated based on actu-
arial models. The reserve distributions derived are then used within
the internal model to calculate potential losses based on a prede-
fined confidence level of 99.5%.
In order to reduce the risk of unexpected reserve volatility, our
operating entities constantly monitor the development of reserves for
insurance claims on a line-of-business level. In addition, operating
entities generally conduct annual reserve uncertainty analyses based
on similar methods used for reserve risk calculations. The Allianz Group
performs regular independent reviews of these analyses and Group
representatives participate in the local reserve committee meetings.
LIFE/HEALTH
Underwriting risks in our Life/Health operations (biometric risks)
include mortality, disability, morbidity, and longevity risks. Mortality,
disability, and morbidity risks are associated with the unexpected
increase in the occurrence of death, disability, or medical claims.
Longevity risk is the risk that the reserves covering life annuities and
group pension products might not be sufficient due to longer life
expectancies of the insured.
-
Life/Health underwriting risk arises from profitability being lower
than expected. As profitability calculations are based on several
parameters - such as historical loss information and assumptions on
inflation, mortality, or morbidity realized parameters may differ
from the ones used for underwriting. For example, higher-than-
expected inflation may lead to higher medical claims in the future.
However, beneficial deviations can also occur; for example, a lower
morbidity rate than expected will most likely result in lower claims.
We measure risks within our internal model, distinguishing,
where appropriate, between risks affecting the absolute level and
trend development of the actuarial assumptions as well as pandemic
risk scenarios. Depending on the nature and complexity of the risk
involved, our health business is represented in the internal model
according to Property-Casualty or Life/Health calculation methods
and is therefore included in the relevant Property-Casualty and
Life/Health figures accordingly. However, most of our health business
is attributable to the Life/Health business segment.
BUSINESS RISK
Business risks include cost risks and policyholder behavior risks, and
are mostly driven by the Life/Health business and to a lesser extent by
the Property-Casualty business. Cost risks are associated with the risk
that expenses incurred in administering policies are higher than
expected or that new business volume decreases to a level that does
not allow Allianz to absorb its fixed costs. Business risk is measured
relative to baseline plans.
For the Life/Health business, policyholder behavior risks are risks
related to the unpredictable, adverse behavior of policyholders in
exercising their contractual options, including for example the early
termination of contracts, surrenders, partial withdrawals, renewals,
and annuity take-up options.
Assumptions on policyholder behavior are set in line with accepted
actuarial methods and are based on own historical data where
available. If there is no historical data, assumptions are based on
industry data or expert judgment. This is then used as a basis to
determine the economic impact of policyholder behavior under
different scenarios within our internal model.
OPERATIONAL RISK
Operational risks represent losses resulting from inadequate or failed
internal processes, human errors, system failures, and external events,
and can stem from a wide variety of sources, for example:
"Clients, Products & Business Practices": potential losses due to a
failure to meet the professional obligations or from the design of
products. Examples include misselling, non-compliance with in-
ternal or external requirements related to products, anti-trust be-
havior, data protection, sanctions and embargoes, etc. These
losses tend to be of a lower frequency but with a potentially high
financial impact.
"Execution, Delivery and Process Management": potential losses
arising from transaction or process management failures. Exam-
ples include interest and penalties from non-payment or under-
payment of taxes or losses associated with broker and agent dis-
tribution processes. These losses tend to be of a relatively higher
frequency but with a low financial impact (although single large
loss events can occur).
Other operational risks including, for example, internal or exter-
nal fraud, financial misstatement risk, a cyber security incident
causing business disruption or fines, a potential failure at our out-
sourcing partners causing a disruption to our working environ-
ment, etc.
Operational risk capital is calculated using a scenario-based
approach based on expert judgment as well as internal and external
operational loss data. The estimates for frequency and severity of
potential loss events for each material operational risk category are
assessed and used as a basis for our internal model calibration.
10.2
Reputational risk is the risk of an unexpected drop in the value of
the Allianz SE share price, the value of the in-force business, or the
value of future business caused by a decline in our reputation as-
sessed by external stakeholders.
As a subset of reputational risk, the management of Environmen-
tal, Social and Governance (ESG) risks is supported by a dedicated
Group ESG Board and Group ESG Office¹, which help steer the inte-
gration of ESG aspects into core investment and insurance activities.
Significant ESG and other reputational risks identified during the
course of business are escalated to Group Communications and
Corporate Responsibility, Group Risk, and Group ESG experts for
assessment and decision-making, with the GFRC acting as the ulti-
mate escalation/decision-making body.
RISK-FREE RATE AND VOLATILITY ADJUSTMENT
When calculating the fair values of assets and liabilities, the assump-
tions regarding the underlying risk-free yield curve are crucial in
determining and discounting future cash flows. We apply the meth-
odology provided by the European Insurance and Occupational
Pensions Authority (EIOPA) within the technical documentation
(EIOPA-BOS-15/035) for the extrapolation of the risk-free interest rate
curves beyond the last liquid tenor.³
In addition, we adjust the risk-free yield curves by a volatility
adjustment (VA) in most markets where a volatility adjustment is
defined by EIOPA and approved by the local regulator. This is done to
better reflect the underlying economics of our business, as the cash
flows of our insurance liabilities are largely predictable. The ad-
vantage of being a long-term investor is the opportunity to invest in
bonds yielding spreads over the risk-free return and earning this
additional yield component over the duration of the bonds. Being a
long-term investor mitigates much of the risk of forced selling of debt
instruments at a loss prior to maturity.
We take account of this by applying volatility adjustment to miti-
gate the credit spread risk, which we consider to be less meaningful
for long term investors than the default risk. Allianz also models the
volatility adjustment dynamically within our approved internal model
which differs from the static EIOPA VA concept applied in the standard
formula. For risk capital calculations, we assume a dynamic move-
ment of the volatility adjustment broadly consistent with the way the
VA would react in practice; however, we base the movement on our
own portfolio rather than the EIOPA portfolio. To account for this
deviation, Allianz applies a more conservative, reduced application
ratio for the dynamic volatility adjustment. Validation is performed
regularly to verify the appropriateness and conservativeness of the
approach.
VALUATION ASSUMPTIONS: REPLICATING
PORTFOLIOS
We replicate the liabilities of our Life/Health insurance business. This
technique enables us to represent all product-related options and
guarantees, both contractual and discretionary, by means of standard
financial instruments. In the risk calculation we use the replicating
portfolio to determine and revalue these liabilities under all poten-
tially adverse Monte Carlo scenarios.
DIVERSIFICATION AND CORRELATION ASSUMPTIONS
Our internal model considers concentration, accumulation, and corre-
lation effects when aggregating results at Group level. The resulting
diversification reflects the fact that not all potential worst-case losses
1_Allianz Life US is based on third-country equivalence.
2_Under book value deduction, the book value of the respective entity is deducted from eligible Own Funds of the Group.
3_Due to late availability of EIOPA publication, the risk-free interest rate term structure used might slightly differ from the
one published by EIOPA.
Annual Report 2018 - Allianz Group
81
C_Group Management Report
are likely to materialize at the same time. As we are an integrated
financial services provider offering a variety of products across differ-
ent business segments and geographic regions, diversification is key
to our business model.
Diversification typically occurs when looking at combined risks
that are not, or only partly, interdependent. Important diversification
factors include regions (for example, windstorm in Australia vs. wind-
storm in Germany), risk categories (for example, market risk vs. un-
derwriting risk), and subcategories within the same risk category (for
example commercial vs. personal lines of property and casualty risk).
Ultimately, diversification is driven by the specific features of the invest-
ment or insurance products in question and their respective risk expo-
sures. For example, an operational risk event at an Australian entity can
be considered to be highly independent of a change in credit spreads
for a French government bond held by a German entity.
Where possible, we derive correlation parameters for each pair
of market risks through statistical analysis of historical data, consider-
ing quarterly observations over more than a decade. In case histori-
cal data or other portfolio-specific observations are insufficient or
unavailable, correlations are set by the Correlation Settings Commit-
tee, which combines the expertise of risk and business experts in a
well-defined and controlled process. In general, when using expert
judgment we set the correlation parameters to represent the joint
movement of risks under adverse conditions. Based on these correla-
tions, we use an industry-standard approach, the Gaussian copula, to
determine the dependency structure of quantifiable sources of risk
within the applied Monte Carlo simulation.
ACTUARIAL ASSUMPTIONS
Our internal model also includes assumptions on claims trends, liabil-
ity inflation, mortality, longevity, morbidity, policyholder behavior,
expense, etc. We use our own internal historical data for actuarial
assumptions wherever possible, and also consider recommendations
from the insurance industry, supervisory authorities, and actuarial
associations. The derivation of our actuarial assumptions is based on
generally accepted actuarial methods. Within our internal risk capital
and financial reporting framework, comprehensive processes and
controls exist for ensuring the reliability of these assumptions.
ASSUMPTIONS AND LIMITATIONS
The identification and assessment of reputational risks is part of
the annual Top Risk Assessment process. During this process, senior
management decides on a risk management strategy for the most
significant risks facing the company, including those with a potentially
severe reputational impact. This annual process is supplemented by
quarterly updates.
Therefore Allianz's risk capital framework covers all material and
quantifiable risks. Risks specifically not covered by the internal model
include strategic, liquidity, and reputational risks.
For our Asset Management business segment, we assign internal
risk capital requirements based on sectorial regulatory capital re-
quirements. The Asset Management business is mainly affected by
operational risks. However, since most of our Asset Management
business is not located within the Eurozone, at Group level its participa-
tion value bears a foreign exchange rate risk. Our Asset Management
business is covered by adequate risk controlling processes, including
qualitative risk assessments (such as the Top Risk Assessment) and
regular reporting to the Group. As the impact on the Group's total
Internal risk capital framework
We define internal risk capital as the capital required to protect us
against unexpected, extreme economic losses, and which forms the
basis for determining our Solvency II regulatory capitalization. On a
quarterly basis, we calculate and consistently aggregate internal risk
capital across all business segments. We also project risk capital
requirements on a bi-weekly basis during periods of financial market
turbulence.
GENERAL APPROACH
We utilize an approach for the management of our risk profile and
solvency position that reflects the Solvency II rules, in that it comprises
our approved internal model and covers all major insurance opera-
tions. Other entities are reflected based on standard formula results,
others under the deduction and aggregation approach as well as on
sectoral or local requirements for non-insurance operations, in ac-
cordance with the Solvency II framework.
INTERNAL MODEL
Our internal model is based on a VaR approach using a Monte Carlo
simulation. Following this approach, we determine the maximum loss
in portfolio value in scope of the model within a specified timeframe
1_The Allianz Environmental, Social, Governance (ESG) Board and the ESG office are constituted as advisor to the Board
of Management of Allianz SE and will further elevate environmental, social, and governance aspects in corporate
governance and decision-making processes at the Allianz Group.
80
80
Annual Report 2018 - Allianz Group
C_Group Management Report
("holding period", set at one year) and probability of occurrence
("confidence level", set at 99.5%). We simulate risk events from all risk
categories ("sources of risk") modeled and calculate the portfolio
value based on the net fair value of assets minus liabilities, including
risk mitigating measures like reinsurance contracts or derivatives,
under each scenario.
The required risk capital is defined as the difference between the
current portfolio value and the portfolio value under adverse condi-
tions at the 99.5% confidence level. As we consider the impact of a
negative or positive event on all risk sources and covered businesses
at the same time, diversification effects across products and regions
are taken into account. The results of our Monte Carlo simulation
allow us to analyze our exposure to each source of risk both sepa-
rately and in aggregate. We also analyze several pre-defined stress
scenarios representing historical events, reverse stress tests, and
adverse scenarios relevant for our portfolio. Furthermore, we conduct
ad-hoc stress tests monthly to reflect current political and financial
developments and to analyze specific non-financial risks more closely.
COVERAGE OF THE RISK CAPITAL CALCULATIONS
Allianz's Group internal model to calculate the Solvency Capital
Requirement (SCR) covers all major insurance operations ¹. This
includes the relevant assets (including fixed income, equities, real
estate, and derivatives) and liabilities (including the run-off of all
current and planned technical provisions as well as deposits, issued
debt and other liabilities). For with-profit products in the Life/Health
business segment, the options and guarantees embedded in insur-
ance contracts - including policyholder behavior are taken into
account.
Smaller related undertakings within the European Economic Ar-
ea which are not covered by the Group internal model are reflected
with their standard formula results. At the Group level, the Solvency
Capital Requirements for smaller insurance undertakings outside the
European Economic Area with only an immaterial impact on the Group's
risk profile are accounted for by means of book value deduction.²
Risk capital related to our European banking operations is allo-
cated to the Corporate and Other business segment, based on the
approach applied by banks in accordance with the local require-
ments resulting from the Basel regulation (Basel standards). Capital
requirements for banks represent an insignificant amount of approx-
imately 0.9% (2017: 1.7%) of our total pre-diversified Group Solvency
Capital Requirement. Therefore, risk management with respect to
banking operations is not discussed in more detail.
Solvency Capital Requirement is minor, risk management with
respect to Asset Management is not discussed in more detail.
2,281
0.1
83.0
213.6
2017
2018
2017
2018
2017
2018
2017
AAA
2018
2018
2017
2018
2017
2018
2017
2018
2017
43.9
42.8
49.0
5.0
21.7
23.0
15.8
18.6
93.4
93.8
AA
118.4
115.6
16.9
18.1
1.7
2.6
2.0
2.1
943
As of 31 December
Total
Other
Short-term loan
The overall credit risk for the Allianz Group decreased marginally
by € 0.2 bn to € 5.6 bn (2017: € 5.8 bn). This was mainly driven by the
annual update of credit risk parameters based on new empirical
data - such as the transition matrix and asset correlations - as well as
an increased loss-absorbing capacity of technical provisions in the
traditional life business, which decreased credit risk after considering
policyholder participation.
Throughout 2018, the credit environment remained stable with re-
gard to credit migration risk and default risk.
1_2017 risk profile figures recalculated based on model changes in 2018 and the impacts of minor and immaterial model
changes were allocated proportionally.
11.6
11.4
%
5,757
5,607
€ mn
610
533
€ mn
19
20
€ mn
2,847
2,712
These effects were partially offset by a slightly different interest
rate environment compared to previous year, which generally in-
creased credit risk exposures thereby increasing credit risk.
4.4
1_The stated market value includes all assets whose market value is sensitive to interest rate movements (excluding unit-
linked business) reflecting the Solvency II framework, and therefore is not based on classifications given by accounting
principles.
3_The stated market value includes all assets whose market value is sensitive to equity movements (excluding unit-linked
business) reflecting the Solvency II framework, and therefore is not based on classifications given by accounting principles.
4 The effect does not consider policyholder participation.
ABS / MBS
Banks
Corporate
Covered bond
Government/
agency
Type of issuer
Rating distribution of Allianz Group's fixed-income portfolio¹ - fair value
€ bn
As of 31 December 2018, the rating distribution based on issue
(instrument) ratings of our fixed-income portfolio was as follows:
The counterparty credit risk arising from derivatives is low, since
derivatives usage is governed by the group-wide internal guidelines
for collateralization of derivatives, which stipulates master netting
and collateral agreements with each counterparty and requires high-
quality and liquid collateral. In addition, Allianz closely monitors the
credit ratings of counterparties and exposure movements.
ties tend to be short- to mid-term, due to the nature of the business,
which explains the lower credit risk in this segment.
Credit risk in the Life/Health business segment is primarily driven
by long-term assets covering long-term liabilities. Typical investments
are government bonds, senior corporate bonds, covered bonds, self-
originated mortgages and loans, and a modest amount of deriva-
tives. In the Property-Casualty business segment, fixed-income securi-
As of 31 December 2018, the credit risk arising from our investment
portfolio accounted for 79.2% (2017: 85.2%) of our total Group pre-
diversified internal credit risk¹, with the relative decrease mainly driv-
en by the introduction of the cross effect model change.
CREDIT RISK- - INVESTMENTS
C_Group Management Report
Annual Report 2018 - Allianz Group
90
86
2 The effects do not consider policyholder participation.
3.9
2.9
1.5
0.1
0.1
0.1
0.2
1.0
1.3
2.8
3.3
B
11.5
12.2
0.2
0.1
0.1
0.1
0.7
0.6
4.9
5.0
4.0
0.2
211.6
2.1
1.8
Total
Not rated
D
C
0.1
0.1
0.1
0.1
CC
0.3
0.3
0.1
0.1
0.3
CCC
76.1
6.4
5.0
0.3
0.4
0.5
1.1
1.0
15.7
16.0
56.1
53.0
9.8
6.7
19.4
30.1
A
139.1
145.9
0.9
0.4
5.4
107.7
BBB
BB
158.7
149.2
0.3
1.4
0.4
0.5
0.4
0.5
7.3
7.3
100.2
104.2
2.3
1.8
47.7
33.6
103.0
1,409
In all of the meetings in 2019, the Board of Management reported on Group revenues and results as well as
developments in individual business segments. The Board of Management informed the Supervisory Board on
the course of business as well as on the development of Allianz SE and the Allianz Group, including deviations in
actual business developments from the planning. In this context, the adequacy of capitalization, the solvency ratio,
and the respective stress scenarios were discussed. The annual Allianz SE and the Group's consolidated financial
statements including the respective auditor's reports, the half-yearly as well as the quarterly reports were reviewed
in detail by the Supervisory Board after preparation by the Audit Committee.
Annual Report 2019 - Allianz Group
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
101 General Information
121 Notes to the Consolidated Balance Sheet
138 Notes to the Consolidated Income Statement
143 Other Information
E_Further Information
170 Responsibility Statement
171 Independent Auditor's Report
175 Independent Practitioner's Reasonable Assurance Report
Disclaimer regarding roundings
The Consolidated Financial Statements are presented in millions of Euros (€ mn) unless otherwise stated.
Due to rounding, numbers presented may not add up precisely to the totals provided and percentages may
not precisely reflect the absolute figures.
Pages 11 - 50
Pages 51 - 92
Pages 93-168
Pages 169-176
98 Consolidated Statement of Cash Flows
97 Consolidated Statement of Changes in Equity
96 Consolidated Statement of Comprehensive Income
95 Consolidated Income Statement
52 Business Operations
55 Business Environment
56 Executive Summary of 2019 Results
57 Property-Casualty Insurance Operations
59 Life/Health Insurance Operations
62 Asset Management
64 Corporate and Other
TO OUR INVESTORS
65 Outlook 2020
71 Liquidity and Funding Resources
74
Reconciliations
76 Risk and Opportunity Report
92 Integrated Risk and Control System for Financial Reporting
D_Consolidated Financial Statements
94 Consolidated Balance Sheet
69 Balance Sheet Review
A
Annual Report 2019 - Allianz Group
1
We look to the next year with utmost confidence – not because it is going to be an easy one (it certainly isn't) but because we
are well prepared for what lies ahead.
Thank you for being at our side.
-ey yous,
Sincerely
Clive Béla
ॐ
Other focal points of reporting were strategic topics such as the new Allianz strategy "Simplicity Wins" with its three
pillars "Outperform", "Transform" and "Rebalance", the risk strategy, the Allianz Customer Model (ACM), the
launch of the European direct insurer Allianz Direct and the business strategy in China. In addition, the Supervisory
Board was extensively involved in the Board of Management's planning for both the fiscal year 2020 and the
three-year period from 2020 to 2022. Cyber risk security and developments of life business in the current low-
interest environment were also regularly discussed. Implications of Brexit for Allianz and economic sanctions were
other ongoing topics. Furthermore, the Supervisory Board dealt extensively with personnel matters relating to the
Board of Management, the requirements of the new German Corporate Governance Code announced for 2020,
and the Act Implementing the Second Shareholders' Rights Directive (ARUG II).
Our resilience is fostered by our strategy "Simplicity Wins". We are making insurance and investing simpler for our clients. We
are slimming down our products, our processes, and our IT. We are starting to get rid of old technologies and to prepare for
a future-oriented digitization, which is not designed to fit with legacy systems but to accommodate future customer needs.
A_To our Investors
A_To our Investors
4
SUPERVISORY BOARD REPORT
Ladies and Gentlemen,
During the financial year 2019, the Supervisory Board fulfilled all its duties and obligations as laid out in the
company statutes and applicable law. It monitored the activities of the company's Board of Management, dealt
with the succession planning for the Board of Management and advised it on business management issues.
OVERVIEW
In the financial year 2019 the Supervisory Board held six meetings and adopted one written resolution. The
regular meetings took place in February, March, May, June, September, and December.
3
C_Group Management Report
Like every year, 2019 also presented some challenges. Foremost among them was the low interest rate environment, with
rates even turning negative in a growing number of instances. To continue delivering high value to our customers, we moved
into alternative asset classes early on, reaching € 161 bn in assets under management by the end of 2019. As we carefully
adjust our portfolio, we manage to keep our balance sheet strong even under unfavorable conditions such as these, continually
confirmed by very good ratings.
-
A_To our Investors
2
OLIVER BÄTE
Chairman of the
Board of Management
Dear Juvestors
-
While the world around us remains turbulent, we keep building on our strengths. In 2019 we have grown to new record levels:
Our revenues reached € 142.4 bn, our operating profit € 11.9 bn. Our healthy business mix and global diversification allowed
us to outperform yet another year despite challenges in the performance of our industrial insurance segment.
There are many sources to our success. We achieved growth by gaining market share in mature but relatively saturated
markets and through strategic expansion in selected regions. In Germany, for example, we grew by 15% - the rest of the
market by 4%. Not only is our German life insurance business continuing its success story; also, our Property-Casualty segment
can grow its customer base after several years of stagnation. At the same time, we are strengthening our presence in growing
markets such as Brazil and China; e.g., through our partnership with JD.com. Our Asset Management segment reached
€ 1,686 bn in third-party assets under management, a level unprecedented in our history - another strong indicator of how
much trust clients worldwide extend to us. We are with them for the long run, celebrating our 130th anniversary in 2020. Our
sustained and sustainable business success allows us to gratify you, our shareholders: As we achieved a net income attributable
to shareholders of € 7.9 bn, we are in the position to propose another increase in dividends to € 9.60 per share – the seventh
increase in a row.
These achievements are the best proof for the exceptional quality of our people. On behalf of my Board of Management
colleagues and, I assume, on your behalf as well - I want to express my sincere thanks to our employees and partners
around the globe for their unfailing dedication and great work.
Our financial performance is strong, and so is our organizational health: Our people and leaders are bringing to life our
strategy "Simplicity Wins." We are creating an environment that is open to and promoting constant change - an essential
success factor in highly volatile times like these. The new spirit can be felt throughout the organization, and it is expressed in
our Inclusive Meritocracy Index, which measures leadership and performance culture, reaching an all-time high of 73 %. Still,
we want to do more to mobilize in particular our frontline employees. They are the face to our customers. Their outstanding
commitment is one of the reasons in a comprehensive set of initiatives, which helped us to manage the growth of number of
businesses, where Allianz is loyalty leader when customers are asked about their willingness to recommend us to their family
and friends. Nevertheless, we must become even better in customer service excellence. Our focus on productivity can never
be an excuse to compromise on customer experience.
WE SECURE YOUR FUTURE
Annual Report 2019 - Allianz Group
Apart from the innumerable everyday activities through which Allianz employees fill our company purpose with life, there
were some achievements this past year that we are particularly proud of:
We made a series of acquisitions to strategically rebalance our portfolio. To name just a few: In Brazil, we are expanding
our presence to become one of the country's top insurers in Property-Casualty insurance. In the UK, we effected two
transactions that made us the second largest general insurer in the market. Our asset manager PIMCO completed its
acquisition of Gurtin Municipal Bond Management to offer clients a more extensive and enhanced suite of strategies
and services.
We continued our productivity improvement and managed to further reduce our expense ratio in the Property-Casualty
business - true to our promise of 2018 to focus on what adds value for customers. As an acknowledgement for this
achievement, we are rewarding our employees with a free Allianz share in 2020 - true to our promise to them, that they
should benefit from our efforts.
For the first time, Allianz was ranked the number one insurance brand in the Interbrand Best Global Brands Ranking. In
the Top 100 of global brands, we moved up six places to number 43.
As part of our continued efforts to safeguard a sustainable future, Allianz initiated the UN-convened Net-Zero Asset
Owner Alliance - a group of the world's largest pension funds and insurers which have committed to reduce the carbon
emissions from their investment portfolios to net-zero by 2050. Along the same lines, we also co-chair the Global Investors
for Sustainable Development (GISD) initiative, which aims to scale up finance and investment in sustainable development.
Through actions like these we gain leading positions in key sustainability rankings like the Dow Jones Sustainability Indices
year after year.
It takes a strong base to remain confident even in uncertain times. We have therefore written down our company purpose
and, over the past two years, established it throughout our global organization units. Employees worldwide have worked to
put into words what inspires everyone at Allianz to dedicate their best efforts to our customers day by day:
41 Combined Separate Non-Financial Report
Pages 1 - 10
21 Takeover-Related Statements and Explanations (part of the Group Management Report)
Risk Committee: Michael Diekmann (Chairman), Christine Bosse, Dr. Friedrich Eichiner, Godfrey Hayward,
Frank Kirsch
Audit Committee: Dr. Friedrich Eichiner (Chairman), Sophie Boissard, Michael Diekmann, Jean-Claude Le Goaër,
Martina Grundler
Personnel Committee: Michael Diekmann (Chairman), Gabriele Burkhardt-Berg, Herbert Hainer
Standing Committee: Michael Diekmann (Chairman), Jean-Claude Le Goaër, Herbert Hainer, Jürgen Lawrenz,
Jim Hagemann Snabe
Vice Chairwoman/ Chairman: Gabriele Burkhardt-Berg, Jim Hagemann Snabe
CHAIR AND COMMITTEES OF THE SUPERVISORY BOARD - AS OF 31 DECEMBER 2019
Chairman: Michael Diekmann
The Supervisory Board was informed regularly and comprehensively of the committees' work.
Technology Committee: Jim Hagemann Snabe (Chairman), Gabriele Burkhardt-Berg, Michael Diekmann,
Dr. Friedrich Eichiner, Jürgen Lawrenz
At one meeting in the fiscal year 2019, the Nomination Committee dealt in detail with the objectives for the
composition of the Supervisory Board and prepared a revision of the objectives to bring them into line with the
requirements of the new German Corporate Governance Code. In addition, the preparation process for the
Supervisory Board elections at the Annual General Meeting 2022 was discussed and next steps were defined.
The Risk Committee held two meetings in 2019. In both meetings, the committee discussed the current risk situation
of the Allianz Group and Allianz SE with the Board of Management. The risk report and other risk-related
statements in the annual Allianz SE and consolidated financial statements as well as management and group
management reports were reviewed with the auditor and the Audit Committee was informed of the result. The
appropriateness of the early risk recognition system at Allianz SE and Allianz Group and the result of further risk
assessments by the auditor were also discussed. The committee took a detailed look at the risk strategy, including
risk appetite and capital management, as well as the effectiveness of the risk management system for the
Allianz Group and Allianz SE. Other matters considered included the report on Allianz's own risk and solvency
assessment (ORSA), and the changes to the internal Solvency II model. Moreover, the Risk Committee dealt
extensively with the company's exposure to cyber risks, activities to ensure information security and the specific
risks of the cyber insurance industry. Besides political risks like the Brexit and the trade conflict between China and
the United States, topics such as Reinsurance, industrial insurance and money laundering were dealt with.
A_To our Investors
Annual Report 2019 - Allianz Group
The Audit Committee held five regular meetings in 2019. In the presence of the auditors, the committee discussed
both Allianz SE's annual financial statements and the Allianz Group's consolidated financial statements, as well
as the management and auditor's reports and the half-yearly financial report. These reviews revealed no reasons
for objection. The Audit Committee further received the Board of Management's reports on quarterly results. It
prepared the engagement of the external advisor and defined key audit areas for the 2019 financial year. The
committee also discussed the assignments of non-audit services to the auditors and approved an updated appro-
priate positive list of pre-authorized audit and non-audit services. In addition, it dealt extensively with the
compliance system, the internal audit system, and the financial reporting process as well as the respective internal
controls. Regular reports on legal and compliance issues in the Group and individual subsidiaries as well as on
the work of the Internal Audit department were presented and discussed in detail. Furthermore the head of the
actuarial department (Group Actuarial, Planning & Controlling) presented his annual report. In addition, the Audit
Committee discussed the internal audit plan for 2020, current developments in data protection, and the forthcoming
amendments to the IFRS 9 and 17 accounting standards.
The Personnel Committee held four meetings in 2019 and adopted two written resolutions. The Committee dealt
in detail with the succession to the Board of Management for Dr. Helga Jung and the extensions to the terms of
Ms. Jaqueline Hunt and Dr. Günther Thallinger. Other key topics included the preparatory review of the Board of
Management's remuneration system, target achievement of the Board of Management members in the financial
year 2018, and defining the targets for the 2020 variable remuneration. The committee also looked at various
mandate matters of individual board members and at further succession planning for the Board of Management.
The Standing Committee held four meetings in 2019. These were concerned primarily with corporate governance
issues, the preparations for the Annual General Meeting, the Supervisory Board self-evaluation as required by
supervisory law and associated development plan, and the efficiency review of the Supervisory Board. Collective
and, if necessary, individual trainings are continuously carried out as part of the implementation of the develop-
ment plan. In addition, the Standing Committee had to pass resolutions approving the granting of loans to senior
executives.
The Supervisory Board has formed various committees in order to perform its duties efficiently. The committees
prepare the consultations in plenary sessions as well as the adoption of resolutions; they can also adopt their own
resolutions.
The Technology Committee had two meetings in the fiscal year 2019 in which it dealt in detail with the main
elements of the IT strategy. In the first meeting the committee got an overview of the IT strategy. Therefore, the
realignment of the IT platform based on harmonization and standardization of processes and products as part of
the transformation project Allianz Customer Model (ACM) was presented on the one hand. On the other hand the
committee was informed about key central IT-projects and the ambitions for the year 2019. In the second meeting
the technology committee dealt intensively with strategic IT transformation topics, such as the business master
platform for the Allianz Customer Model (ACM) including a decommissioning strategy for old systems and the
Allianz Direct platform. Apart from these new strategic initiatives like the strategic data use in Allianz Group,
opportunities presented by the use of artificial intelligence as well as the cloud strategy for Allianz Group were
discussed.
COMMITTEE ACTIVITIES
Nomination Committee: Michael Diekmann (Chairman), Christine Bosse, Jim Hagemann Snabe
In compliance with the special legal provisions applying to insurance companies, the statutory auditor and the
auditor for the review of the half-yearly financial report are appointed by the Supervisory Board of Allianz SE, not
by the AGM. The Supervisory Board appointed PricewaterhouseCoopers GmbH Wirtschaftsprüfungsgesellschaft
(PwC) as statutory auditor for the annual Allianz SE and consolidated financial statements, as well as for the
review of the half-yearly financial report of the financial year 2019. PwC audited the financial statements of
Allianz SE and the Allianz Group as well as the respective management reports. They issued an auditor's report
without any reservations. The consolidated financial statements were prepared on the basis of the International
Financial Reporting Standards (IFRS) as adopted in the European Union. PwC performed a review of the half-
yearly financial report. In addition, PwC was also mandated to perform an audit of the market value balance
sheet according to Solvency II as of 31 December 2019 for Allianz SE and the Allianz Group.
Annual Report 2019 - Allianz Group
Michael Diekmann
Chairman
M. Miam
For the Supervisory Board:
23 Remuneration Report (part of the Group Management Report)
As already mentioned, Dr. Helga Jung left the Board of Management of Allianz SE as of 31 December 2019.
Ms. Renate Wagner was appointed as her successor with effect from 1 January 2020.
There were no changes in the composition of the Supervisory Board in fiscal year 2019.
AUDIT OF ANNUAL ACCOUNTS AND CONSOLIDATED FINANCIAL STATEMENTS
MEMBERS OF THE SUPERVISORY BOARD AND BOARD OF MANAGEMENT
The Supervisory Board would like to thank all Allianz Group employees for their great personal commitment over
the past year.
On the basis of its own reviews of the annual Allianz SE and consolidated financial statements, the management
and group management reports, and the recommendation for the appropriation of earnings, the Supervisory
Board has raised no objections and instead agreed with the results of the PwC audit. It has also approved the
Allianz SE and consolidated financial statements prepared by the Board of Management. The financial
statements have thus been formally adopted. The Supervisory Board agrees with the Board of Management's
proposal on the appropriation of earnings.
All Supervisory Board members received the documentation relating to the annual financial statements and the
auditor's reports from PwC on schedule. The preliminary financial statements and PwC's preliminary audit results
were discussed in the Audit Committee on 19 February 2020 as well as in the Supervisory Board's plenary session
on 20 February 2020. The finalized financial statements and PwC's audit reports (dated 24 February 2020) were
reviewed by the Audit Committee on 4 March 2020, and in the Supervisory Board plenary session on
5 March 2020. The auditors participated in the discussions and presented key results from their audit. Particular
emphasis was placed on the key audit matters described in the auditor's report and on the audit procedures
performed. No material weaknesses in the internal financial reporting control process were discovered. There
were no circumstances that might give cause for concern about the auditor's independence. In addition, the
market value balance sheets dated 31 December 2019 for both Allianz SE and the Allianz Group as well as the
respective PwC reports were addressed by the Audit Committee and the Supervisory Board.
8
A_To our Investors
7
Annual Report 2019 - Allianz Group
ASSURANCE ENGAGEMENT OF THE COMBINED SEPARATE NON-FINANCIAL REPORT
In the financial year 2019, the company was required to issue a separate non-financial report. This report was
combined for Allianz SE and the Allianz Group. The Supervisory Board commissioned PwC to perform an assurance
engagement of this report. All Supervisory Board members received the combined separate non-financial report
and the independent practitioner's assurance report in due time. The report and PwC's assurance report were
discussed in the plenary session of the Supervisory Board on 5 March 2020. The auditors from PwC participated
in these discussions and presented the results of their assurance engagement. Based on its own review of the
combined separate non-financial report, the Supervisory Board did not raise any objections and approved by
acknowledgement the results of the PwC assurance engagement.
Further explanations on corporate governance in the Allianz Group can be found in the Corporate Governance
Report starting on > page 12, as well as in the Statement on Corporate Management pursuant to §315d and
§289f of the HGB, which starts on > page 18. More details on corporate governance are provided on the Allianz
website, specifically: > www.allianz.com/corporate-governance.
Munich, 5 March 2020
After previous discussion, a new version of the objectives for the composition of the Supervisory Board was
adopted by written procedure in December 2019. This new version came into effect as of 1 January 2020 and
takes into account the requirements of the new German Corporate Governance Code expected for 2020.
REBALANCE
ANNUAL REPORT 2019
ALLIANZ GROUP
Allianz
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TRANSFORM
CONTENT
2 Letter to the Investors
4 Supervisory Board Report
9 Mandates of the Members of the Supervisory Board
10 Mandates of the Members of the Board of Management
12 Corporate Governance Report
18 Statement on Corporate Management pursuant to § 315d and § 289f of the HGB
(part of the Group Management Report)
DECLARATION OF CONFORMITY WITH THE GERMAN CORPORATE GOVERNANCE CODE
On 13 December 2019, the Board of Management and the Supervisory Board issued the Declaration of Conformity
in accordance with § 161 of the German Stock Corporation Act ("Aktiengesetz"). The declaration was posted
on the company website, where it is available to shareholders at all times. Allianz SE fully complies and will continue
to fully comply with the recommendations of the German Corporate Governance Code in its version of
7 February 2017.
A_ To our Investors
OUTPERFORM
B_Corporate Governance
Details on each member's participation in meetings of the Supervisory Board and its committees can be found in
the Corporate Governance Report, starting on > page 12. Members of the Supervisory Board who were unable
to attend meetings of the Supervisory Board or its committees were excused and, as a rule, cast their votes in
writing.
The Supervisory Board received regular, timely, and comprehensive reports from the Board of Management. The
Board of Management's verbal reports at the meetings were accompanied by written documents, which were
sent to each member of the Supervisory Board in time for the relevant meeting. The Board of Management also
informed the Supervisory Board in writing about important events that occurred between meetings. The chairmen
of the Supervisory and Management Boards also had regular discussions about major developments and
decisions. The Chairman of the Supervisory Board also had individual discussions with each member of the Board
of Management about their respective half-year as well as full-year performance. In the financial year 2019, again
individual trainings and group events were held for example on actuarial and accounting aspects of the life
insurance business, on the basis of an agreed development plan for further training of the members of the
Supervisory Board.
A_To our Investors
5
A_To our Investors
Annual Report 2019 - Allianz Group
At the meeting on 12 December 2019, the Board of Management first provided information about the third-
quarter results, the further course of business, and the situation of Allianz Group. Furthermore, the Supervisory
Board discussed the planning for fiscal year 2020 and the three-year plan for 2020 to 2022. With the risk strategy
and the considerations on the strategic development of the Asset Management segment, the Board of
Management presented the follow-up on outstanding issues regarding the new Allianz strategy. In addition, the
Board of Management provided a status report on the issue of cyber risk security. The Supervisory Board also
discussed the declaration of conformity with the German Corporate Governance Code and various corporate
governance issues, and dealt with the requirements profile for the Supervisory Board and the Act Implementing
The meeting on 27 September 2019 focused on the continuation of the presentation on the strategic direction of
Allianz Group and Allianz SE (solo). In particular, the strategic direction and transformation issues for the
"Transformation" pillar were discussed: the Allianz Customer Model (ACM), the European direct insurer Allianz
Direct and the orientation of Allianz Partners. With regard to the "Rebalance" pillar, the Board of Management
presented and subsequently discussed the China strategy in detail. The Board of Management report on the
course of business covered the successful acquisition of Brazilian motor and property insurance operations from
Sul América and the strategic realignment of Allianz in South America. In addition, the Supervisory Board dealt
with corporate governance issues, the self-evaluation of the Supervisory Board required by supervisory law, and
the Supervisory Board's development plan based on this. The Supervisory Board also decided to extend the Board
of Management term of Ms. Jacqueline Hunt, expiring at the end of 2019, for three years.
6
On 8 May 2019, just before the AGM, the Board of Management briefed the Supervisory Board on business
performance in the first quarter of 2019 as well as on the current situation of both the Allianz Group and
Allianz SE, in particular with regard to share price development, capitalization, and capital management.
ISSUES DISCUSSED IN THE SUPERVISORY BOARD PLENARY SESSIONS
At the meeting on 27 June 2019, the Board of Management first reported in detail on the course of business in
fiscal year 2019 to date and provided an outlook on the expected half-year results. In addition, the Board of
Management reported on various M&A activities, such as the sale of the stake in the Spanish joint venture "Allianz
Popular" and the acquisition of the property insurance business of Legal & General in the UK, and gave an
overview of Allianz's role in ESG issues. The Board of Management then presented the new Allianz strategy
"Simplicity Wins" with its three pillars "Outperform", "Transform" and "Rebalance", and set out an overview of the
next steps required for growth and value creation. The Supervisory Board also dealt in detail with current market
trends in China, in particular recent regulatory developments and the successful acquisition of a holding license
as the first foreign insurance company to do so. The Board of Management also reported on the offer of IT
solutions for external insurance companies. In addition, the Board of Management provided its regular status
report on the issue of cyber risk security. Furthermore, the Supervisory Board dealt in detail with personnel matters
relating to the Board of Management. Ms. Renate Wagner was appointed to the Board of Management with
effect from 1 January 2020, to replace Dr. Helga Jung, who left the Board of Management at her own request at
the end of 2019. Dr. Günther Thallinger's term on the Board of Management, likewise expiring at the end of 2019,
was extended for five years.
In the meeting of 14 February 2019, the Supervisory Board comprehensively dealt with the preliminary financial
figures for the financial year 2018 as well as the Board of Management's dividend proposal. The appointed audit
firm, PricewaterhouseCoopers GmbH Wirtschaftsprüfungsgesellschaft (PwC), Munich, reported in detail on the
preliminary results of their audit. In the further course of the meeting, the Supervisory Board also discussed the
target achievement of each individual member of the Board of Management and, on this basis, set their variable
remuneration for the financial year 2018. As part of this performance assessment, the fitness and propriety of the
members of the Board of Management were also confirmed. In addition, various special topics were discussed,
such as the status of the implementation of the EU Data Protection Directive, the harmonization of the IT
infrastructure in Allianz Group, the life insurance business in Asia, ongoing M&A activities, and the Board of
the Second Shareholders' Rights Directive (ARUG II). Furthermore, the Supervisory Board set targets for the
variable remuneration of members of the Board of Management for 2020 and debated succession planning with
regard to the Board of Management. The members of the Supervisory Board discussed the introductions of the
potential candidates with the Board of Management that took place on two evenings. Finally, the results of this
year's efficiency review of the Supervisory Board's activities were discussed and appropriate measures for
improvement were decided and subsequently implemented.
Management's deliberations on a potential new share buyback program. The Supervisory Board also dealt with
succession planning for the Board of Management.
In the meeting of 7 March 2019, the Supervisory Board discussed the audited annual Allianz SE and consolidated
financial statements including market value balance sheets, as well as the Board of Management's
recommendation for the appropriation of earnings for the financial year 2018. The auditors confirmed that there
were no discrepancies compared to their February report, and issued an unqualified auditor's report for the
individual and consolidated financial statements. The Supervisory Board also reviewed and approved the separate
non-financial report for both Allianz SE and the Group, taking into account the report of the external auditor.
Further presentations concerned the Board of Management's report on risk development in 2018, the annual
compliance report, and the annual report of the Head of Group Audit. Next, the Supervisory Board reviewed
the agenda and proposals for resolution for Allianz SE's 2019 Annual General Meeting (AGM). At the
recommendation of the Audit Committee, the Supervisory Board appointed PricewaterhouseCoopers GmbH
Wirtschaftsprüfungsgesellschaft (PwC) as auditor for the 2019 individual and consolidated financial statements,
the auditor's review of the 2019 half-yearly financial report, and the assurance engagement of the combined
separate non-financial report. Furthermore, the Supervisory Board dealt with and approved the control and profit
transfer agreement with Allsecur Deutschland AG. The Supervisory Board also received reports on Allianz's global
strategy in the health insurance business and the new Allianz Digital Health unit.
Annual Report 2019 - Allianz Group
Corporate and Other
Total Group
1_2018 risk profile figures adjusted based on the 2019 model changes impact.
The Group's total pre-diversified market risk increased by € 6.4 bn,
which was mainly driven by equity, credit spread, interest rate and real
estate risks, especially in the Life/Health business segment. In the
course of the year, the increase in equity prices and the tightening of
credit spreads observed in financial markets, the reduction of the vol-
atility adjuster spreads and the corresponding changes in the equity
and fixed-income investment portfolios resulted in a higher contribu-
tion of market risk. Significant decreases in interest rates, which
decrease policyholder participation, also contributed to higher in-
terest rate and credit spread risks. However, this was slightly damp-
ened by management actions - in particular duration management
measures - that improved the interest rate risk profile. Real estate risk
increased due to higher exposure in real estate and infrastructure in-
vestments. The overall increase in market risk was also supported by
business growth and the acquisition activities, while exposure
changes due to asset/liability management measures and the corre-
sponding effects on the diversification between market risk factors
minimized the impact to some extent.
INTEREST RATE RISK
As of 31 December 2019, our interest-rate-sensitive investments
excluding unit-linked business amounting to a market value of
€ 460.8 bn (2018: € 421.3 bn)¹ - would have gained € 49.8 bn (2018:
€ 42.1bn) or lost € 42.8 bn (2018: € 36.4 bn)² in value in the event of
interest rates shifting by -100 and +100 basis points, respectively. How-
ever, these impacts would have been partially offset by policyholder
participation. In addition, the Solvency II Own Funds effect is much
more limited due to our active duration management, limiting the du-
ration mismatch of the Group to negative 0.1 years, representing Sol-
vency II liabilities of longer duration than assets.
EQUITY RISK
REAL ESTATE RISK
As of 31 December 2019, about 5.5% (2018: 6.0%) of the total pre-
diversified risk was related to real estate exposures.
The following table presents our group-wide risk figures for credit risks
by business segment.
Allianz Group: Risk profile - allocated credit risk by business segment
(total portfolio before tax and non-controlling interests)
pre-diversified
As of 31 December
Property-Casualty
Life/Health
Share of total Group pre-diversified risk
19,036
38.6%
As of 31 December 2019, our investments excluding unit-linked busi-
ness that are sensitive to changing equity markets - amounting to a
market value of €75.7 bn³ (2018: € 59.4 bn) - would have lost
€ 20.0 bn4 (2018: € 12.4 bn) in value assuming equity markets had
declined by 30%. However, this impact would have been partially off-
set by policyholder participation.
CREDIT RISK
11,239
Share of total Group pre-diversified risk
1,517
2019
Total Group
2,351
1,648
(1,932)
25,446
44.7%
(1,984)
8,667
8,115
3,150
2,526
54
65
10,585
2018¹
2_The effects do not consider policyholder participation.
2,283
1,955
Banks
Corporate
Covered bond
Government/
agency
Type of issuer
Rating distribution of Allianz Group's fixed-income portfolio¹ - fair value
€bn
As of 31 December 2019, the rating distribution based on issue
(instrument) ratings of our fixed-income portfolio was as follows:
The counterparty credit risk arising from derivatives is low, since
derivatives usage is governed by the group-wide internal guideline for
collateralization of derivatives, which stipulates master netting and
collateral agreements with each counterparty and requires high-qual-
ity and liquid collateral. In addition, Allianz closely monitors counter-
parties' credit ratings and exposure movements.
Credit risk in the Life/Health business segment is primarily driven
by long-term assets covering long-term liabilities. Typical investments
are government bonds, senior corporate bonds, covered bonds, self-
originated mortgages and loans, and a modest amount of derivatives.
In the Property-Casualty business segment, fixed-income securities
tend to be short- to mid-term, due to the nature of the business, which
explains the lower credit risk in this segment.
As of 31 December 2019, the credit risk arising from our investment
portfolio accounted for 80.6% (2018: 79.2%) of our total Group pre-
diversified internal credit risk¹.
CREDIT RISK - INVESTMENTS
C_Group Management Report
89
Annual Report 2019 - Allianz Group
3_The stated market value includes all assets whose market value is sensitive to equity movements (excluding unit-linked
business) reflecting the Solvency II framework, and therefore is not based on classifications given by accounting principles.
4 The effect does not consider policyholder participation.
1_The stated market value includes all assets whose market value is sensitive to interest rate movements (excluding unit-
linked business) reflecting the Solvency II framework, and therefore is not based on classifications given by accounting
principles.
2,215
€ mn
2,726
2,230
€ mn
474
€ mn
472
%
5,484
9.6
4,917
10.0
1_2018 risk profile figures adjusted based on the 2019 model changes impact.
Throughout 2019, the credit environment remained stable with regard
to credit migration risk and default risk.
The overall credit risk for the Allianz Group increased by € 0.6 bn
to € 5.5 bn (2018: € 4.9 bn). This was mainly driven by the low interest
rate environment compared to the previous year, which generally
increased credit risk exposures thereby increasing credit risk. This also
contributed to a decrease in the loss-absorbing capacity of technical
provisions in the traditional life business, which increased the credit risk
after considering policyholder participation.
€ mn
197
ABS / MBS
102
(1,481)
(1,526)
(654)
(397)
Property-Casualty
2018¹
2019
2018¹
2019
2018¹
2019
2018¹
2019
2018¹
2019
2018¹
2019
MARKET RISK
The following table presents our group-wide risk figures related to
market risks by business segment and source of risk.
C_Group Management Report
Allianz Group: Risk profile – market risk by business segment and source of risk (total portfolio before tax and non-controlling interests)
pre-diversified, € mn
Interest rate
Inflation
2,697
Credit spread
Real estate
Currency
Total
As of 31 December
2019
2018¹
Equity
44
2,793
2,492
206
593
1,161
631
568
(304)
(275)
298
252
Corporate and Other
13,245
17,859
(1)
(237)
1,170
1,524
5,030
1,421
1,254
247
(131)
5,632
4,274
3,190
Life/Health
2,003
(132)
(199)
7,321
5,242
6,888
2,496
Short-term loan
115.6
Total
13,238
18
Subordinated liabilities
9,199
9,209
18
Certificated liabilities
13,475
62
3
Liabilities of disposal groups classified as held for sale
40,232
47,904
17
Other liabilities
4,080
2,236
Total liabilities
933,820
833,888
Annual Report 2019 - Allianz Group
24
94
897,567
1,011,185
63,679
77,364
19
2,447
3,363
61,232
74,002
1_Include mainly derivative financial instruments.
Total liabilities and equity
Total equity
Non-controlling interests
Shareholders' equity
6,538
CONSOLIDATED INCOME STATEMENT
32
115,361
Liabilities to banks and customers
Financial liabilities carried at fair value through income¹
LIABILITIES AND EQUITY
897,567
1,011,185
Total assets
13,767
Unearned premiums
14,796
Intangible assets
125
3,555
3
Non-current assets and assets of disposal groups classified as held for sale
39,209
44,532
11
18,049
11,626
12
132,168
16
Financial liabilities for unit-linked contracts
529,687
588,023
15
Reserves for insurance and investment contracts
73,054
77,541
14
Reserves for loss and loss adjustment expenses
22,891
25,468
14,222
13,445
23
13
Deferred tax liabilities
Other assets
Consolidated income statement
Gross premiums written
24
158
11,534
12,296
24
6,096
7,276
116,469
23
(1,609)
21,616
22,433
21
71,472
75,914
20
(3,301)
107,442
(59,532)
(54,459)
29
(3,152)
(1,824)
28
(2)
(2)
(1,035)
(1,110)
27
(9,684)
(13,726)
26
(52,157)
(55,851)
25
2,302
3,681
22222
€ mn
(1,211)
(5,141)
Impairments of investments (net)
Loan loss provisions
Interest expenses
Change in reserves for insurance and investment contracts (net)
Claims and insurance benefits incurred (net)
Claims and insurance benefits incurred (ceded)
Claims and insurance benefits incurred (gross)
Investment expenses
Total income
Fee and commission income
Realized gains/losses (net)
Income from financial assets and liabilities carried at fair value through income (net)
Interest and similar income
Premiums earned (net)
Change in unearned premiums (net)
Ceded premiums written
Other income
Acquisition and administrative expenses (net)
Fee and commission expenses
Amortization of intangible assets
(5,547)
77,824
82,919
2018
2019
Note
D_Consolidated Financial Statements
Diluted earnings per share (€)
Basic earnings per share (€)
Shareholders
Net income attributable to:
Non-controlling interests
Net income
Income taxes
Income before income taxes
Total expenses
Other expenses
Restructuring and integration expenses
(1,458)
10
959
1,133
112
127
Corporate and Other
367
439
367
439
127
Life/Health
11,529
95
112
5,004
5,515
4,765
4,946
10,592
112
Total Group
926
The increase in Property-Casualty underwriting risk was mainly driven
by exposure growth (including purchase of Liverpool Victoria General
Insurance Group Limited and Legal & General Insurance Limited).
PROPERTY-CASUALTY
During 2019, the total Group pre-diversified underwriting risk capital
increased by € 1.0 bn.
1_As risks are measured in an integrated approach and on an economic basis, internal risk profile takes reinsurance effects into account.
2_2018 risk profile figures adjusted based on the impact of the 2019 model changes.
11,070
22.43%
21.26%
Share of total Group pre-diversified risk
12,095
574
678
5,004
5,515
4,765
4,946
36
29
692
36
Overall, the underwriting risk profile for the Allianz Group is not
expected to change much, as we do not plan to significantly change
our underwriting standards (Allianz Standard for P&C Underwriting) or
our risk appetite with regards to natural catastrophe, man-made, or
terror risks and our corresponding retrocession reinsurance strategy.
29
926
Allianz Group: Risk profile - allocated underwriting risk by business segment and source of risk (total portfolio before non-controlling interests)¹
pre-diversified, € mn
C_Group Management Report
The following table presents the pre-diversified risk calculated for
underwriting risks associated with our insurance business.
UNDERWRITING RISK
Annual Report 2019 - Allianz Group
90
90
Premium natural
1 Additionally, 7.4% (2018: 7.9 %) of our total Group pre-diversified internal credit risk is allocated to receivables, potential
future exposure for derivatives and reinsurance, and other off-balance sheet exposures.
17.52
20.39
4.05
3.57
0.01
0.03
6.31
1_Represents gross exposure for external reinsurance, broken down by reinsurer. Overall exposure increases mainly due
to changed methodology for determining reinsurance exposure subject to credit risk.
Premium terror
Premium non-catastrophe
Reserve
Property-Casualty
2018²
2019
2018²
2019
2018²
2019
2018²
2019
2018²
2019
2018²
2019
As of 31 December
catastrophe
Total
Biometric
692
The loss ratios for the Property-Casualty business segment are
presented in the following table:
Property-Casualty loss ratios¹ for the past ten years
%
21,075
2018
2019
Note
Reinsurance assets
Financial assets for unit-linked contracts
Loans and advances to banks and customers
17,234
Investments
Cash and cash equivalents
ASSETS
As of 31 December
€ mn
Consolidated balance sheet
CONSOLIDATED BALANCE SHEET
D_Consolidated Financial Statements
Financial assets carried at fair value through income
5
13,187
7,611
32
Deferred tax assets
27,709
24,777
9
Deferred acquisition costs
16,400
17,545
8
115,361
132,168
108,270
112,672
7
550,923
625,746
6
93
Annual Report 2019 - Allianz Group
D
CONSOLIDATED FINANCIAL STATEMENTS
LIQUIDITY RISK
The decrease in risk capital for operational risks was driven by the reg-
ular annual update of local and central parameters. The decrease is
largely due to improved precision of the assessment processes, which
led to a reduction in the level of prudence in several operational risk
categories, especially for the category "Monitoring and Reporting".
Foreign currency exchange effects played a minor role.
OPERATIONAL RISK
The risk capital contribution of business risk decreased by € 0.3 bn
compared to the previous year. This is driven by the impact of lower
interest rates on the lapse and lapse mass risk for most major
Life/Health insurance portfolios.
BUSINESS RISK
Due to effective product design and the diversity of our products,
there were no significant concentrations of underwriting risks within
our Life/Health business segment.
The risk capital contribution of biometric risk increased by € 0.1 bn
compared to the previous year. This is mainly due to the impact of
lower interest rates on the longevity risk for most major Life/Health
portfolios. Contributions from the Property-Casualty and the Corpo-
rate and Other business segments are generated by the longevity risk
of the internal pension schemes they contain.
LIFE/HEALTH
The top three perils contributing to the natural catastrophe risk
as of 31 December 2019 were: windstorms in Europe, floods in
Germany, and earthquakes in Australia.
65.9
69.1
66.5 64.0 64.2 64.2 64.6 65.1 63.0 66.6 65.5
1_Represents claims and insurance benefits incurred (net), divided by premiums earned (net).
catastrophes
2019 2018 2017 2016 2015 2014 2013 2012 2011 2010
68.0 66.0 66.5 65.6 66.2 66.0 65.9 68.3 69.9
excluding
natural
Loss ratio
Loss ratio
Detailed information regarding the Allianz Group's liquidity risk
exposure, liquidity, and funding - including changes in cash and cash
equivalents is provided in Liquidity and Funding Resources from
> page 71 onwards and in notes 12, 18 and 33 to the Consolidated
Financial Statements. As can be inferred from the section on the
management of liquidity risks, while these are quantified and
monitored through regular stress test reporting as well as properly
managed, they are not quantified for risk capital purposes.
(1,494)
Annual Report 2019 - Allianz Group
C_Group Management Report
Annual Report 2019 - Allianz Group
222
92
1_Solvency Financial Condition Report and Regular Supervisory Report.
Subsidiaries within the scope of our control system are individually
responsible for adhering to the Group's internal governance and con-
trol policy and for creating local Disclosure Committees that are similar
to the Group-level committee. The entities' CEOs and CFOs provide pe-
riodic sign-offs to the management of Allianz SE, certifying the effec-
tiveness of their local systems of internal control as well as the com-
pleteness, accuracy, and reliability of financial data reported to the
Holding.
The Group Disclosure Committee ensures that these board mem-
bers are made aware of all material information that could affect our
disclosures, and assesses the completeness and accuracy of the infor-
mation provided in the quarterly statements, half-yearly, and annual
financial reports as well as in the Solvency II qualitative reports¹. In
2019, the Group Disclosure Committee met on a quarterly basis before
the quarterly statements and financial reports were issued. An addi-
tional meeting was held prior to issuance of the Solvency II qualitative
reports.
The Group center functions, the Group Disclosure Committee, and our
operating entities support the Allianz SE Board of Management to en-
sure the completeness, accuracy, and reliability of our Consolidated
Financial Statements.
GOVERNANCE
Last but not least, we focus on ensuring that controls are appro-
priately designed and effectively executed to mitigate risks. We
have set consistent documentation requirements across the
Allianz Group for elements such as key controls, execution and
related control design and effectiveness testing. We conduct an
annual assessment of our internal control system to maintain
and continuously enhance its effectiveness. Group Audit and
local internal audit functions ensure that the overall quality of
our control system is subjected to regular control testing, in order
to assure reasonable design and operating effectiveness. Inter-
nal Audit does so through a comprehensive risk-based approach
that assesses the key controls of the company's internal proce-
dures and processes, including local and group-internal controls
over financial reporting risks, from an integrated perspective.
Preventive and detective key controls addressing financial report-
ing risks have been put in place to reduce the likelihood and im-
pact of financial misstatements. When a potential risk material-
izes, actions are taken to reduce the impact of the financial mis-
statement. Given the strong dependence of financial reporting
processes on information technology systems, we have also imple-
mented IT controls.
We use a centrally developed risk catalog which is linked to indi-
vidual accounts. This risk catalog is reviewed on a yearly basis and
is the starting point for the definition of the Group's as well as the
operating entities' scope on financial reporting risks. The method-
ology is described in our IRCS Guideline. In the course of the scop-
ing process, both materiality and susceptibility to a misstatement
are considered simultaneously. In addition to the quantitative cal-
culation, we also consider qualitative criteria, such as the expected
increase in business volume or the complexity of transactions.
Based on the centrally provided risk catalog, our local entities
identify risks that could lead to material financial misstatements.
INTERNAL RISK AND CONTROL SYSTEM APPROACH
Our approach can be summarized as follows:
Accounting rules for the classification, valuation, and disclosure of
all items in the balance sheet, the income statement, and notes related
to the annual and interim financial statements are defined primarily in
our Group accounting manual. Internal controls are embedded in the
accounting and consolidation processes to safeguard the accuracy,
completeness, and consistency of the information provided in our fi-
nancial statements.
ACCOUNTING AND CONSOLIDATION PROCESSES
The accounting and consolidation processes we use to produce our
Consolidated Financial Statements are based on a central consolida-
tion and reporting IT solution and local general ledger solutions. The
latter are largely harmonized throughout the Group, using standard-
ized processes, master data, posting logics, and interfaces for data de-
livery to the Holding. Access rights to accounting systems are managed
according to strict authorization procedures.
In line with both our prudent approach to risk governance and
compliance with regulatory requirements, we have created a frame-
work and processes to identify and mitigate the risk of material errors
in our Consolidated Financial Statements (this also includes our mar-
ket value balance sheet and risk capital calculation risks). The Inte-
grated Risk and Control System (IRCS) is regularly reviewed and up-
dated. It covers three buckets of risks: financial reporting risks, compli-
ance risks, and other operational risks (incl. IT risks). The IT controls are
based on COBIT 5 and include, for example, controls for access right
management, project and change management. In addition, our Enti-
tiy-Level Control Assessments (ELCA) framework contains controls to
monitor the effectiveness of our system of governance.
The following information is provided pursuant to § 289 (4) and
§ 315 (4) of the German Commercial Code ("Handelsgesetzbuch
HGB").
INTEGRATED RISK AND CONTROL SYSTEM FOR
FINANCIAL REPORTING
91
(1,333)
30
(26,247)
(4,850)
(19,310)
(27,703)
25,672
36,448
2018
2019
(6,821)
CASH FLOW FROM OPERATING ACTIVITIES
Cash and cash equivalents reclassified to assets of disposal groups held for sale in 2019
Cash and cash equivalents reclassified to assets of disposal groups held for sale and disposed of in 2018
Cash and cash equivalents at beginning of period
Change in cash and cash equivalents
Effect of exchange rate changes on cash and cash equivalents
Net cash flow used in financing activities
Net cash flow used in investing activities
Cash and cash equivalents at end of period
90
41
3,986
(5,593)
Available-for-sale and held-to-maturity investments, investments in associates and joint ventures, real estate held for investment, loans and advances to banks and
customers, non-current assets and disposal groups classified as held for sale
Realized gains/losses (net) and impairments of investments (net) of:
(228)
(422)
Share of earnings from investments in associates and joint ventures
Adjustments to reconcile net income to net cash flow provided by operating activities
7,703
8,302
Net income
17,234
21,075
(145)
531
17,119
17,234
(416)
Net cash flow provided by operating activities
(2,945)
SUMMARY
Consolidated statement of cash flows
(1,457)
4
3
(1,464)
Transactions between equity holders³
29
29
193
29
Paid-in capital
18,983
1,017
17,966
10,743
409
6,813
Treasury shares
(1,264)
Dividends paid²
(3,767)
CONSOLIDATED STATEMENT OF CASH FLOWS
D_Consolidated Financial Statements
Annual Report 2019 - Allianz Group
97
3_For further information regarding the share buy-back program 2019, please refer to note 19.
1_Total comprehensive income in shareholders' equity for the year ended 31 December 2019 comprises net income attributable to shareholders of € 7,914 mn (2018: € 7,462 mn).
2_In the second quarter of 2019, a dividend of € 9.00 (2018: € 8.00) per qualifying share was paid to the shareholders.
77,364
3,363
74,002
17,691
(2,195)
29,577
28,928
Balance as of 31 December 2019
(4,062)
(295)
(3,767)
€ mn
Other investments, mainly financial assets held for trading and designated at fair value through income
2,074
5,256
36,448
17,969
28,146
(1,689)
450
748
208
25,672
14,753
(206)
2,475
1,651
1,456
(1,272)
(1,560)
243
22,414
3,157
2,956
155,556
Annual Report 2019 - Allianz Group
165,089
166,237
144
283
5,867
5,459
1
440
503
357
4
731
871
225
404
154,368
(253)
232
322
(605)
Reserves for loss and loss adjustment expenses
Unearned premiums
Deferred acquisition costs
Reinsurance assets
Repurchase agreements and collateral received from securities lending transactions
Reverse repurchase agreements and collateral paid for securities borrowing transactions
Financial assets and liabilities held for trading
Net change in:
3,811
5,774
Interest credited to policyholder accounts
2
2
Loan loss provisions
1,586
2,068
Depreciation and amortization
Reserves for insurance and investment contracts
Total comprehensive income¹
Deferred tax assets/liabilities
Subtotal
(595)
(3,368)
(674)
960
98
Subtotal
Loans and advances to banks and customers (purchased loans)
Property and equipment
Fixed assets from alternative investments
Real estate held for investment
Non-current assets and disposal groups classified as held for sale
Investments in associates and joint ventures
Held-to-maturity investments
Available-for-sale investments
Financial assets designated at fair value through income
Proceeds from the sale, maturity or repayment of:
CASH FLOW FROM INVESTING ACTIVITIES
Net cash flow provided by operating activities
Other (net)
8.36
63,679
61,232
Subtotal
Changes arising during the year
Miscellaneous
Subtotal
Changes arising during the year
Reclassifications to net income
Share of other comprehensive income of associates and joint ventures
Items that may never be reclassified to profit or loss
Subtotal
Reclassifications to net income
Cash flow hedges
Subtotal
Changes arising during the year
Reclassifications to net income
Available-for-sale investments
Subtotal
Changes arising during the year
Changes in actuarial gains and losses on defined benefit plans
Total other comprehensive income
Total comprehensive income
(5,327)
10,750
(4,950)
11,618
(377)
(867)
167
438
167
438
7,703
2018
2019
8,302
For further information on the income taxes associated with different
components of other comprehensive income, please see note 32.
Shareholders
Non-controlling interests
Total comprehensive income attributable to:
Changes arising during the year
(15)
Reclassifications to net income
Items that may be reclassified to profit or loss in future periods
(2,776)
32
10,399
11,077
(97,043)
(105,391)
(6)
(2,696)
(6)
(426)
(375)
(196)
(4,302)
(4,509)
31
(24,600)
(398)
8,302
7,703
387
Other comprehensive income
Net income
€ mn
Consolidated statement of comprehensive income
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
D_Consolidated Financial Statements
95
Annual Report 2019 - Allianz Group
17.30
18.83
41
17.43
18.90
41
7,462
7,914
241
Foreign currency translation adjustments
(14)
171
8
153
2,507
(5,247)
162
7,592
3,049
65,553
68,602
2,661
12,175
27,199
28,928
Total equity
controlling
interests
equity
losses (net)
Non-
(2,749)
32
32
32
6,945
(2,607)
27,967
28,928
Balance as of 31 December 2018
(3,673)
(245)
(3,428)
(3,428)
Dividends paid²
(3,942)
(510)
(3,432)
17
(21)
(3,428)
Transactions between equity holders
Share-
holders'
gains and
translation
adjustments
earnings
18,983
(5,043)
10,681
326
(1,064)
(124)
263
(124)
263
23
(79)
137
(79)
42
95
(6)
156
2,661
2,447
1,017
17,966
Paid-in capital
Retained
Unrealized
currency
D_Consolidated Financial Statements
Foreign
Treasury shares
Paid-in capital
Total comprehensive income¹
Balance as of 1 January 2018
€ mn
Consolidated statement of changes in equity
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Other
96
90
2,507
153
1.72
Annual Report 2019 - Allianz Group
5.42
12.2
0.0
0.0
0.1
0.0
0.1
0.1
0.6
1.3
6.4
5.9
0.0
5.0
5.0
12.2
BB
164.2
1.4
1.7
0.5
0.5
0.5
0.7
7.3
6.6
104.2
116.6
1.8
0.7
33.6
149.2
37.3
B
3.3
0.1
0.4
0.1
0.1
0.0
0.0
0.0
0.4
CC
0.3
0.4
0.0
0.1
0.1
5.1
0.0
0.2
0.2
0.0
CCC
4.9
7.7
0.0
0.0
0.1
0.1
0.2
0.2
1.3
2.3
0.0
BBB
107.7
134.2
0.0
18.1
20.5
2.6
2.7
2.1
2.5
49.0
46.4
43.9
46.5
AAA
2018
2019
0.0
2018
2018
2019
2018
2019
2018
2019
2018
2019
2018
2019
2018
2019
As of 31 December
2.32
2019
0.0
118.7
AA
0.3
0.2
0.5
0.6
1.0
1.2
16.0
19.3
53.0
69.1
6.7
6.8
30.1
37.0
A
145.9
154.8
105.0
93.8
17.2
18.6
20.7
23.0
с
5.2
5.6
3.9
1.1
1.5
0.1
0.0
5.0
0.0
0.0
0.1
Total
18.3
21.2
5.1
6.6
0.4
0.2
0.1
0.1
0.6
0.5
10.2
11.6
0.0
238.1
0.2
2.0
Not rated
0.0
0.0
0.0
0.0
0.0
0.0
D
0.0
0.0
0.0
0.0
0.0
1.8
211.6
0.0
76.1
71.3
6.12
0.02
2018
2019
Not assigned
Total
Non-investment grade
BBB+ to BBB-
AA+ to AA-
As of 31 December
AAA
€bn
Of the Allianz Group's reinsurance recoverables, 82.4% (2018:
76.9%) were distributed among reinsurers that had been assigned an
investment-grade rating; the remaining 17.5% (2018: 23.1%) were non-
rated reinsurance recoverables. For substantial exposures to non-rated
captives, risk-mitigating techniques such as collateral agreements or
funds-withheld concepts are in place.
As of 31 December 2019, 1.1% (2018: 1.3%) of our total Group pre-
diversified internal credit risk was allocated to reinsurance exposures.
CREDIT RISK - REINSURANCE
As of 31 December 2019, 11.0% (2018: 11.5%) of our total Group pre-
diversified internal credit risk was allocated to Euler Hermes credit
insurance exposures.
A+ to A-
CREDIT RISK - CREDIT INSURANCE
228.9
Reinsurance recoverables by rating class¹
200.4
35.8
32.2
28.5
2.5
3.1
24.1
8.6
6.8
613.9
554.3
1_In accordance with practice adhered to in our Group Management Report, figures stated include investments of Banking and Asset Management. Table excludes private loans. Stated market values include investments
not in scope of the Solvency II framework.
(781)
348
Acquisitions of subsidiaries, net of cash acquired
(5,483)
(7,094)
(115)
Change in other loans and advances to banks and customers (originated loans)
Other (net)
Net cash flow used in investing activities
1,353
(19,310)
CASH FLOW FROM FINANCING ACTIVITIES
Net change in liabilities to banks and customers
Proceeds from the issuance of certificated liabilities and subordinated liabilities
Repayments of certificated liabilities and subordinated liabilities
(208)
1,147
5,506
(27,703)
Proceeds from sale of subsidiaries, net of cash disposed
(175,594)
(188,691)
4,527
Subtotal
Business combinations (note 3):
(4,150)
(3,070)
(165,621)
(168)
(320)
(176,315)
(2,141)
(2,328)
(1,374)
(75)
(155)
(2,996)
(1,388)
(1,238)
(1,258)
(3,130)
(5,924)
3,215
Net change in lease liabilities
€ mn
As of 31 December
Balances with banks payable on demand
Balances with central banks
2019
2018
8,245
7,660
Property and equipment
2,990
64
57
Cash on hand
Treasury bills, discounted treasury notes, similar treasury
securities, bills of exchange and checks
6,952
6,526
Cash and cash equivalents
Interest paid (from operating activities)
Interest received (from operating activities)
Dividends received (from operating activities)
Transactions between equity holders
Dividends paid to shareholders
Net cash from sale or purchase of treasury shares
(354)
(1,312)
(3,941)
(4,062)
(3,673)
(4,961)
5
Other (net)
(60)
65
Net cash flow used in financing activities
(4,850)
(6,821)
SUPPLEMENTARY INFORMATION ON THE CONSOLIDATED STATEMENT OF CASH FLOWS
Income taxes paid (from operating activities)
16
Loans and advances to banks and customers (purchased loans)
Annual Report 2019 - Allianz Group
Real estate held for investment
The Allianz Group has elected not to recognize right-of-use assets
and lease liabilities for short-term leases and leases of low-value
assets. Furthermore, the Allianz Group does not recognize right-of-use
assets and lease liabilities for car leases. The expenses relating to the
short-term leases and leases of low-value assets including car leases
are expensed on a straight-line basis over the lease term.
The Allianz Group as a lessee measures its lease liability at the present
value of the lease payments that are not paid at the commencement
date, discounted using the interest rate implicit in the lease or, if that
rate cannot be readily determined, the Group's incremental borrowing
rate. The lease liability is measured at amortized cost using the effec-
tive interest method.
Lease Liabilities
The Allianz Group records financial liabilities where non-controlling
shareholders have the right to put their financial instruments back to
the Allianz Group (puttable instruments). If these non-controlling
shareholders still have present access to the risks and rewards associ-
ated with the underlying ownership interests, the non-controlling inter-
ests remain recognized and profit and loss is allocated between con-
trolling and non-controlling interests. The financial liabilities for putta-
ble instruments are generally required to be recorded at the redemp-
tion amount, with changes recognized in equity where the non-control-
ling shareholders have present access to risks and rewards of owner-
ship and in the income statement in all other cases. As an exception,
for puttable instruments that are to be classified as equity instruments
in the separate or individual financial statements of the issuer in ac-
cordance with IAS 32.16A-16B and are to be presented as liabilities in
the consolidated financial statements of the Allianz Group instead of
non-controlling interests, valuation changes of these liabilities are al-
ways recognized in the income statement. This is the case for puttable
instruments issued by mutual funds controlled but not wholly owned
by the Allianz Group.
Financial liabilities for puttable financial instruments
Allianz Group accrues the fair value of the award as compensation ex-
penses over the vesting period. Upon vesting, any change in the fair
value of any unexercised awards is also recognized as a compensation
expense. Where expected tax deductions differ, in terms of amount and
timing, from the cumulative share-based payment expense recognized
in profit or loss, deferred taxes are recognized on temporary differences.
D_Consolidated Financial Statements
107
Annual Report 2019 - Allianz Group
The share-based compensation plans of the Allianz Group are classi-
fied as either equity-settled or cash-settled plans. Equity-settled plans
are measured at fair value on the grant date (grant-date fair value) and
the grant-date fair value is recognized as an expense over the vesting
period. Where equity-settled plans involve equity instruments of
Allianz SE, a corresponding increase in shareholders' equity is recog-
nized. Where equity-settled plans involve equity instruments of subsidi-
aries of the Allianz Group, the corresponding increase is recognized in
non-controlling interests. Equity-settled plans include a best estimate of
the number of equity instruments that are expected to vest in determin-
ing the amount of expense to be recognized. For cash-settled plans, the
Share-based compensation plans
Further explanations and sensitivity calculations are given in
note 39.
Pensions and similar obligations are measured at present value and
presented net of plan assets by applying the provisions of IAS 19. These
valuations rely on extensive assumptions. Key assumptions such as dis-
count rates, inflation rates, compensation increases, pension increases,
and rates of medical cost trends are defined centrally at the
Allianz Group level, considering the circumstances in the individual
countries. In order to ensure their thorough and consistent determina-
tion, all input parameters are discussed and defined taking into con-
sideration economic developments, peer reviews, and currently avail-
able market and industry data.
Pensions and similar obligations
OTHER LIABILITIES
Stage two: The Allianz Group Actuarial function forms an opinion on
the adequacy of the reserves proposed by the local entities. The
Allianz Group Actuarial function challenges the operating entities' selec-
tion through their continuous interaction with local teams and quarterly
attendance in the local reserve committees. The ability to form a view on
reserve adequacy is further enabled by regular reviews of the local
reserving practices. Such reviews consist of an evaluation of the reserving
process as well as of the appropriateness and consistency of the
assumptions, and an analysis of the movements of the reserves. Signifi-
cant findings from these reviews are communicated in the Allianz Group
Reserve Committee to initiate actions where necessary.
Stage one: Property-Casualty reserves are calculated by local
reserving actuaries at the Allianz operating entities. The reserves are set
based on a thorough analysis of historical data, enhanced by inter-
actions with other business functions (e.g. Underwriting, Claims and
Reinsurance). Actuarial judgment is applied where necessary, especially
in cases where data is unreliable, scanty, or unavailable. The judgment
of Property-Casualty actuaries is based on past experience of the char-
acteristics of each line of business, the current stage of the underwriting
cycle, and the external environment in which the subsidiary operates.
The reserves are proposed to a local reserve committee, whereat the
rationale of the selections are discussed and subsequently documented.
A final decision on the reserve selection is made in the reserve commit-
tee. Local actuaries are responsible for their compliance with the Group
Actuarial Standards and Guidelines.
For further information on these expenses, please refer to note 38.
CERTIFICATED LIABILITIES AND SUBORDINATED
LIABILITIES
Certificated liabilities and subordinated liabilities are subsequently
measured at amortized cost, using the effective interest method to
amortize the premium or discount to the redemption value over the life
of the liability.
EQUITY
For traditional long-duration insurance contracts, such as tradi-
tional life and health products, aggregate policy reserves are computed
using the net level premium method, based on best-estimate
assumptions adjusted for a provision for adverse deviation for mortality,
morbidity, expected investment yields, surrenders, and expenses at the
policy inception date, which remain locked in thereafter unless a pre-
mium deficiency occurs.
Annual Report 2019 - Allianz Group
108
Fee and commission income primarily consists of asset management
fees which are recognized when the service is provided. For those fees,
the service is considered to be provided periodically. Performance fees
may not be recognized as fee income before the respective bench-
mark period is completed because before its completion, the obli-
gation to pay the fee is conditional, the fund performance is regularly
not reliably estimable, and related service is not fully performed. In any
FEE AND COMMISSION INCOME
INCOME FROM FINANCIAL ASSETS AND LIABILITIES
CARRIED AT FAIR VALUE THROUGH INCOME (NET)
Income from financial assets and liabilities carried at fair value
through income (net) includes all investment income as well as rea-
lized and unrealized gains and losses from financial assets and liabili-
ties carried at fair value through income. In addition, commissions at-
tributable to trading operations and related interest expenses as well
as refinancing and transaction costs are included in this line item.
Foreign currency gains and losses on monetary items are also reported
within income from financial assets and liabilities carried at fair value
through income (net).
Interest income and interest expenses are recognized on an accrual
basis using the effective interest method. This line item also includes
dividends from available-for-sale equity securities as well as income
from investments in associates and joint ventures. Dividends are recog-
nized in income when the right to receive the dividend is established.
The share of earnings from investments in associates and joint ventures
represents the share of net income from entities accounted for using
the equity method.
INTEREST AND SIMILAR INCOME AND INTEREST
EXPENSES
Property-Casualty reserves are set by leveraging the use of actuar-
ial techniques and educated judgment. A two-stage process exists for
the setting of reserves in the Allianz Group:
written.
Revenues for universal life-type and investment contracts repre-
sent charges assessed against the policyholders' account balances for
front-end loads, net of the change in unearned revenue liabilities and
cost of insurance, surrenders, and policy administration, and are in-
cluded within premiums earned (net).
Premiums for short-duration insurance contracts are recognized as rev-
enues over the period of the contract in proportion to the amount of
insurance protection provided. Premiums for long-duration insurance
contracts are recognized as earned when due.
PREMIUMS
Unrealized gains and losses (net) include unrealized gains and
losses from available-for-sale investments and from derivative finan-
cial instruments that meet the criteria for cash flow hedge accounting.
Non-controlling interests represent equity in subsidiaries, not at-
tributable directly or indirectly, to Allianz SE as parent.
Please refer to the section above for an explanation of foreign
currency changes that are recognized in equity. The effective portion
of gains and losses of hedging instruments designated as hedges of a
net investment in a foreign operation is recognized in foreign currency
translation adjustments.
shareholders' equity. No gain or loss is recognized on the sale, issu-
ance, acquisition, or cancellation of these shares. Any consideration
paid or received is recorded directly in shareholders' equity.
Retained earnings comprise the net income of the current year
and of prior years not yet distributed, treasury shares, amounts recog-
nized in other comprehensive income, and any amounts directly recog-
nized in equity according to IFRS. Treasury shares are deducted from
Issued capital represents the mathematical per-share value received
at the issuance of shares. Additional paid-in capital represents the pre-
mium exceeding the issued capital received at the issuance of shares.
Premiums ceded for reinsurance are deducted from premiums
Fixed assets from alternative investments
Stage two: The Allianz Group Actuarial function regularly reviews
the local reserving processes, including the appropriateness and con-
sistency of the assumptions, and analyzes the movements of the
reserves. Any adjustments to the reserves and other insurance-related
reporting items are reported to and analyzed together with the
Allianz Group Reserve Committee.
Life/Health reserves are subject to estimates and assumptions,
especially on the life expectancy and health of an insured individual
(mortality, longevity, and morbidity risk) and on the development of in-
terest rates and investment returns (asset-liability mismatch risk). These
assumptions also have an impact on the presentation of costs arising
from the origination of insurance business (acquisition costs and sales
inducements) and the value of acquired insurance business (PVFP). To
ensure consistency in the application of actuarial methods and
assumptions in the Life/Health reserving process, the Allianz Group has
designed a two-stage reserving process:
Interest rate assumptions
The average interest rate assumptions per operating entity used
in the calculation of deferred acquisition costs and aggregate policy
reserves are as follows:
The assumptions used for aggregate policy reserves are deter-
mined using current and historical client data, industry data, and, in the
case of assumptions for interest rates, reflect expected earnings on as-
sets which back the future policyholder benefits. The information used
by Allianz Group's actuaries in setting such assumptions includes, but
is not limited to, pricing assumptions, available experience studies, and
profitability analyses.
Insurance contract features not closely related to the underlying
insurance contracts are bifurcated from the insurance contracts and
accounted for as derivatives in line with IFRS 4 and IAS 39. The embed-
ded derivatives separated from certain life insurance and annuity con-
tracts are recognized as financial liabilities held for trading.
The aggregate policy reserves for universal life-type insurance con-
tracts are equal to the account balance, which represents premiums re-
ceived and investment return credited to the policy, less deductions for
mortality costs and expense charges. The aggregate policy reserve also
includes reserves for investment contracts with discretionary participa-
tion features as well as for liabilities for guaranteed minimum mortality
and morbidity benefits related to non-traditional contracts with annuiti-
zation options and unit-linked insurance contracts. For contracts with a
discretionary participation feature, the whole contract is classified as
one liability rather than separately recognizing the participation fea-
ture.
D_Consolidated Financial Statements
CONSOLIDATED STATEMENT OF CASH FLOWS - CONTINUED
Consolidated statement of cash flows
€ mn
2019
2018
Payments for the purchase or origination of:
Financial assets designated at fair value through income
Available-for-sale investments
Held-to-maturity investments
Investments in associates and joint ventures
Non-current assets and disposal groups classified as held for sale
%
Deferred acquisition costs
Aggregate policy reserves
Traditional
long-duration
Participating
The oversight and monitoring of the Allianz Group's reserves cul-
minate in quarterly meetings of the Allianz Group Reserve Committee,
which is the supervising body that governs all significant reserves. It
particularly monitors key developments across the Allianz Group
affecting the adequacy of reserves.
For the business segments Life/Health and Property-Casualty, the cen-
tral oversight process around reserve estimates includes the setting of
group-wide standards and guidelines, regular site visits, as well as
regular quantitative and qualitative reserve monitoring.
RESERVING PROCESS
Reserves for premium refunds include the amounts allocated under
the relevant local statutory/contractual regulations or, at the entity's
discretion, to the accounts of the policyholders and the amounts result-
ing from the differences between these IFRS-based financial state-
ments and the local financial statements (latent reserves for premium
refunds), which will reverse and enter into future profit participation
calculations. Unrealized gains and losses recognized for available-for-
sale investments are recognized in the latent reserves for premium re-
funds to the extent that policyholders will participate in such gains and
losses on the basis of statutory or contractual regulations when they
are realized, based on and similar to shadow accounting. The profit
participation allocated to participating policyholders or disbursed to
them reduces the reserves for premium refunds.
Reserves for premium refunds
For contracts where the policyholder has the option to transfer the
amounts invested in unit-linked funds to non-unit-linked funds, the in-
surance contract is reported in both aggregate policy reserves and fi-
nancial liabilities for unit-linked contracts based upon the investment
election at the reporting date.
costs, that are directly attributable to the issuance of the contract. Sub-
sequently, those contracts are measured at amortized cost using the
effective interest method.
D_Consolidated Financial Statements
Stage one: Life/Health reserves are calculated by qualified local
staff experienced in the subsidiaries' business. Actuaries in the local enti-
ties also conduct tests of the adequacy of the premiums and reserves to
cover future claims and expenses (liability adequacy tests). The process
follows group-wide standards for applying consistent and plausible
assumptions. The appropriateness of the reserves and their compliance
with group-wide standards is confirmed by the local actuary.
Reverse repurchase agreements (due in three months or less)
Non-unit-linked investment contracts without discretionary parti-
cipation features are accounted for under IAS 39. The aggregate pol-
icy reserves for those contracts are initially recognized at fair value, or
the amount of the deposit by the contract holder, net of the transaction
The Allianz Group has recognized all rights and obligations related to
issued insurance contracts according to its accounting policies, and
thus has not separately recognized an unbundled deposit component
in respect of any of its insurance contracts.
0.8-4.3
2.2-5.0
2.5-6.0
2.5-6.0
contracts
life insurance
insurance
contracts
106
2,598
The aggregate policy reserves for participating life insurance contracts
are calculated using the net level premium method based on assump-
tions for mortality, morbidity, and interest rates that are guaranteed in
the contract or used in determining the policyholder dividends (or pre-
mium refunds).
21,075
The degree of judgment used in measuring the fair value of finan-
cial instruments closely correlates with the level of non-market obser-
vable inputs. The Allianz Group uses a maximum of observable inputs
and a minimum of non-market observable inputs when measuring fair
value. Observability of input parameters is influenced by various fac-
tors such as type of the financial instrument, whether a market is es-
tablished for the particular instrument, specific transaction character-
istics, liquidity, and general market conditions. If the fair value cannot
be measured reliably, amortized cost is used as a proxy for determin-
ing fair values.
For further information, please refer to note 34.
Impairments
The evaluation of whether a financial debt instrument is impaired
requires analysis of the underlying credit risk/quality of the relevant
issuer and involves significant management judgment. In particular,
current publicly available information with regard to the issuer and the
particular security is considered relating to factors including, but not
limited to, evidence of significant financial difficulty of the issuer and
breach of contractual obligations of the security, such as a default or
delinquency on interest or principal payments. The Allianz Group also
considers other factors that could provide objective evidence of a loss
event, including the probability of bankruptcy and the lack of an active
market due to financial difficulty. The presence of either a decline in
fair value below amortized cost or the downgrade of an issuer's credit
rating does not in itself represent objective evidence of a loss event,
but may represent objective evidence of a loss event when considered
with other available information.
Once impairment is triggered for an available-for-sale debt
instrument, the cumulative loss recognized in other comprehensive
income is reclassified to profit or loss. The cumulative loss corresponds
to the difference between amortized cost and the current fair value of
the investment. Further declines in fair value are recognized in other
comprehensive income unless there is further objective evidence that
such declines are due to a credit-related loss event. If in subsequent
periods the impairment loss is reversed, the reversal is measured as the
lesser of the full original impairment loss previously recognized in the
income statement and the subsequent increase in fair value.
For held-to-maturity investments and loans, the impairment loss
is measured as the difference between the amortized cost and the
expected future cash flows using the original effective interest rate.
An available-for-sale equity security is considered to be impaired
if there is objective evidence that the cost may not be recovered. The
Allianz Group's policy considers a decline to be significant if the fair
value is below the weighted average cost by more than 20%. A decline
is considered to be prolonged if the fair value is below the weighted
average cost for a period of more than nine consecutive months. If an
available-for-sale equity security is impaired, any further declines in
the fair value at subsequent reporting dates are recognized as impair-
ments.
Reversals of impairments of available-for-sale equity securities
are not recorded in the income statement but in other comprehensive
income and recycled upon derecognition.
Hedge accounting
For derivative financial instruments used in hedge transactions that
meet the criteria for hedge accounting, the Allianz Group designates
the derivative as a hedging instrument in a fair value hedge, cash flow
hedge, or hedge of a net investment in a foreign operation. The
Allianz Group documents the hedge relationship, as well as its risk
management objective and strategy for entering into the hedge trans-
action. The Allianz Group assesses, both at the hedge's inception and
on an ongoing basis, whether the hedging instruments used are highly
effective in offsetting changes in fair values or cash flows of the
hedged items.
Derivative financial instruments designated in hedge accounting
relationships are included in the line items Other assets and Other lia-
bilities. Freestanding derivatives are included in the line item Financial
assets or liabilities held for trading.
For further information on derivatives, please refer to note 33.
Annual Report 2019 - Allianz Group
103
Estimates and assumptions of fair values and hierarchies are par-
ticularly significant when determining the fair value of financial instru-
ments for which at least one significant input is not based on observa-
ble market data (classified as level 3 of the fair value hierarchy). The
availability of market information is determined by the relative trading
levels of identical or similar instruments in the market, with emphasis
placed on information that represents actual market activity or bind-
ing quotations from brokers or dealers.
D_Consolidated Financial Statements
Cash and cash equivalents include balances with banks payable on
demand, balances with central banks, cash on hand, treasury bills to
the extent they are not included in financial assets held for trading, and
checks and bills of exchange that are eligible for refinancing at central
banks, subject to a maximum term of three months from the date of
acquisition.
FINANCIAL ASSETS AND LIABILITIES CARRIED AT FAIR
VALUE THROUGH INCOME
Financial assets and liabilities carried at fair value through income
include financial assets and liabilities held for trading as well as finan-
cial assets and liabilities designated at fair value through income.
While the former category includes trading instruments and financial
derivatives, the latter category is mainly designated at fair value to
avoid accounting mismatches.
INVESTMENTS
Available-for-sale investments
Available-for-sale investments comprise debt and equity instruments
that are designated as available for sale or do not fall into the other
measurement categories. These investments are measured at fair
value through other comprehensive income. When an investment is
derecognized or determined to be impaired, the cumulative gain or
loss previously recorded in other comprehensive income is transferred
and recognized in the consolidated income statement. Realized gains
and losses on those instruments are generally determined by applying
the average cost method at the subsidiary level.
Held-to-maturity investments
Held-to-maturity investments are debt securities with fixed or deter-
minable payments and fixed maturities for which the Allianz Group
has the positive intent and ability to hold to maturity. These assets are
initially measured at fair value plus any directly attributable transac-
tion costs. Subsequent to initial recognition, they are measured at
amortized cost using the effective interest method.
Funds held by others under reinsurance contracts assumed
Funds held by others under reinsurance contracts assumed relate to
cash deposits to which the Allianz Group is entitled, but which the ced-
ing insurer retains as collateral for future obligations of the
Allianz Group. The cash deposits are recorded at the amount due on
repayment, less any impairment for balances that are deemed not to
be recoverable.
Investments in associates and joint ventures
For details on the accounting for investments in associates and joint
ventures please see the section principles of consolidation.
Real estate held for investment
Real estate held for investment is carried at cost less accumulated de-
preciation and impairments. Real estate held for investment is depre-
ciated on a straight-line basis over its useful life, with a maximum of 50
years, and regularly tested for impairment.
Fixed assets from alternative investments
CASH AND CASH EQUIVALENTS
These assets are carried at cost less accumulated depreciation and im-
pairments. They are depreciated on a straight-line basis over the useful
life, with a maximum of 30 years, and regularly tested for impairment.
There is no one-to-one connection between valuation technique and
hierarchy level. Depending on whether valuation techniques are
based on significant observable or unobservable inputs, financial in-
struments are classified in the fair value hierarchy.
Market approach: Prices and other relevant information gener-
ated by market transactions involving identical or comparable
assets or liabilities.
Although the Allianz Group's share in some entities is below 20%,
management has assessed that the Allianz Group has significant influ-
ence over these entities because it is sufficiently represented in the gov-
erning bodies that decide on the relevant activities of these entities.
For certain investment funds in which the Allianz Group holds a
stake of above 20%, management has assessed that the Allianz Group
has no significant influence because it is not represented in the govern-
ing bodies of these investment funds or their investment activities are
largely predetermined.
Pursuant to IFRS 11, investments in joint arrangements have to be
classified as either joint operations or joint ventures, depending on the
contractual rights and obligations of each investor. The Allianz Group
has assessed the nature of all its joint arrangements and determined
them to be joint ventures in most cases. Those are generally
accounted for using the equity method.
The Allianz Group accounts for investments in associates and joint
arrangements with a time lag of no more than three months. Income
from investments in associates and joint arrangements - excluding dis-
tributions is included in interest and similar income. Accounting poli-
cies of associates and joint arrangements are generally adjusted
where necessary to ensure consistency with the accounting policies
adopted by the Allianz Group.
For further information, please refer to note 44.
FOREIGN CURRENCY TRANSLATION
Translation from any foreign currency to the functional
currency
The individual financial statements of each of the Allianz Group's sub-
sidiaries are prepared in their respective functional currency. The func-
tional currency is the currency of the primary economic environment in
which the subsidiary operates. Transactions recorded in currencies
other than the functional currency (foreign currencies) are recorded at
the exchange rate prevailing on the date of the transaction. At the
balance sheet date, monetary assets and liabilities denominated in
foreign currencies are translated into the functional currency using the
closing exchange rate. While non-monetary items denominated in for-
eign currencies and measured at historical cost are translated at his-
torical rates, non-monetary items measured at fair value are trans-
lated using the closing rate. Foreign currency gains and losses arising
from foreign currency transactions are reported in income from finan-
cial assets and liabilities carried at fair value through income (net), ex-
cept when the gain or loss on a non-monetary item measured at fair
value is recognized in other comprehensive income. In this case, any
foreign exchange component of that gain or loss is also recognized in
other comprehensive income.
Translation from the functional currency to the presentation
currency
For the consolidated financial statements, the results and financial
position of each of the Allianz Group's subsidiaries are expressed in
Euro, the presentation currency of the Allianz Group. Assets and liabili-
ties of subsidiaries not reporting in Euro are translated at the closing
rate on the balance sheet date; income and expenses are translated
at the quarterly average exchange rate. Any foreign currency transla-
tion differences, including those arising from the equity method, are
recorded in other comprehensive income.
FINANCIAL INSTRUMENTS
Recognition and derecognition
Financial assets are generally recognized and derecognized on the
trade date, i.e. when the Allianz Group commits to purchase or sell
securities.
Cost approach: Amount that would currently be required to
replace the service capacity of an asset (replacement cost).
Income approach: Conversion of future amounts such as cash
flows or income to a single current amount (present value tech-
nique).
A financial asset is derecognized when the contractual rights to
the cash flows from the financial asset expire or the Allianz Group
transfers the asset and substantially all of the risks and rewards of own-
ership. A financial liability is derecognized when it is extinguished.
Financial assets and liabilities are offset and the net amount is pre-
sented in the balance sheet only when there is a legally enforceable
right to offset the recognized amounts and when there is an intention
to either settle on a net basis or to realize the asset and settle the
liability simultaneously.
Securities lending and repurchase agreements
The Allianz Group enters into securities lending transactions and repur-
chase agreements. Cash received in the course of those transactions is
recognized together with a corresponding liability. Securities received
as collateral under lending transactions are not recognized, and secu-
rities sold under repurchase agreements are not derecognized, if risks
and rewards have not been transferred. Securities borrowing transac-
tions generally require the Allianz Group to deposit cash with the secu-
rities lender. Fees paid are reported as interest expenses.
Measurement at fair value
The Allianz Group carries certain financial instruments at fair value
and discloses the fair value of all financial instruments. The fair value
of an asset or liability is defined as the price that would be received to
sell an asset, or paid to transfer a liability, in an orderly transaction
between market participants at the measurement date.
Assets and liabilities measured or disclosed at fair value in the
consolidated financial statements are measured and classified in
accordance with the fair value hierarchy in IFRS 13, which categorizes
102
Annual Report 2019 - Allianz Group
D_Consolidated Financial Statements
the inputs to valuation techniques used to measure fair value into three
levels.
Level 1 inputs of financial instruments traded in active markets are
based on unadjusted quoted market prices or dealer price quotations
for identical assets or liabilities on the last exchange trading day prior
to or at the reporting date, if the latter is a trading day.
Level 2 applies if the market for a financial instrument is not active
or when the fair value is determined by using valuation techniques
based on observable input parameters. Such market inputs are ob-
servable substantially over the full term of the asset or liability and in-
clude references to formerly quoted prices for identical instruments
from an active market, quoted prices for identical instruments from an
inactive market, quoted prices for similar instruments from active mar-
kets, and quoted prices for similar instruments from inactive markets.
Market observable inputs also include interest rate yield curves, vola-
tilities, and foreign currency exchange rates.
Level 3 applies if not all input parameters are observable in the
market. Accordingly, the fair value is based on valuation techniques us-
ing non-market observable inputs. Valuation techniques include the
discounted cashflow method, comparison to similar instruments for
which observable market prices exist and other valuation models. Ap-
propriate adjustments are made, for example, for credit risks.
For fair value measurements categorized as level 2 and level 3,
the Allianz Group uses valuation techniques consistent with the three
widely used valuation techniques listed in IFRS 13:
Offsetting
LOANS AND ADVANCES TO BANKS AND CUSTOMERS
Loans and advances are non-derivative financial assets with fixed or
determinable payments that are not quoted in an active market and
which are not classified as financial assets held for trading, designated
at fair value through income, or designated as available for sale. These
assets are initially measured at fair value plus any directly attributable
transaction costs. Subsequent to initial recognition, they are measured
at amortized cost using the effective interest method.
FINANCIAL ASSETS AND LIABILITIES FOR UNIT-
LINKED CONTRACTS
Financial assets for unit-linked contracts are recorded at fair value,
with changes in fair value recognized in the income statement to-
gether with the offsetting changes in fair value of the corresponding
financial liabilities for unit-linked contracts. They are included in the
line item income from financial assets and liabilities carried at fair
value through income (net).
Amortization method
straight-line considering contractual
terms
in proportion to the consumption of
future economic benefit
straight-line or in relation to
customer churn rates
For business combinations, goodwill is recognized in the amount of the
consideration transferred plus the amount of any non-controlling inter-
est in the acquiree held by the direct parent in excess of the fair values
assigned to the identifiable assets acquired and liabilities assumed.
Goodwill is accounted for at the acquiree in the acquiree's functional
currency. There is an at least annual evaluation whether it is deemed
recoverable.
The recoverable amounts of all cash generating units (CGUs) to
test goodwill and other indefinite life intangible assets for impairment
are typically determined on the basis of value in use calculations. The
determination of a CGU's recoverable amount requires significant
judgment regarding the selection of appropriate valuation techniques
and assumptions.
Further explanations on the impairment test for goodwill and its
significant assumptions as well as respective sensitivity analyses are
given in note 11.
INSURANCE, INVESTMENT AND REINSURANCE
CONTRACTS
Insurance and investment contracts
Insurance contracts and investment contracts with discretionary par-
ticipation features are accounted for under the insurance accounting
provisions of US GAAP, as have been applied at first-time adoption of
IFRS 4 on 1 January 2005, wherever IFRS 4 does not provide specific
guidance. Investment contracts without discretionary participation
features are accounted for as financial instruments in accordance with
IAS 39.
Reinsurance contracts
The Allianz Group's consolidated financial statements reflect the effects
of ceded and assumed reinsurance contracts. Assumed reinsurance pre-
miums, commissions, and claim settlements, as well as the reinsurance
element of technical provisions, are accounted for in accordance with
the conditions of the reinsurance contracts, and in consideration of the
original contracts for which the reinsurance was concluded. When the
reinsurance contracts do not transfer significant insurance risk, deposit
accounting is applied as required under the related reinsurance
accounting provisions of US GAAP or under IAS 39.
Liability adequacy tests
Liability adequacy tests are performed for each insurance portfolio,
based on estimates of future claims, costs, premiums earned, and pro-
portionate expected investment income. For short-duration contracts,
a premium deficiency is recognized if the sum of expected claim costs
and claim adjustment expenses, expected dividends to policyholders,
DAC, and maintenance expenses exceeds related unearned premiums
while considering anticipated investment income.
Annual Report 2019 - Allianz Group
105
6-13
D_Consolidated Financial Statements
UNEARNED PREMIUMS
For short-duration insurance contracts, such as most of the property
and casualty contracts, premiums to be earned in future years are
recorded as unearned premiums. These premiums are earned in sub-
sequent periods in relation to the insurance coverage provided.
Amounts charged as consideration for origination of certain long-
duration insurance contracts (i.e. initiation or front-end fees) are
reported as unearned revenues and, as such, included in unearned
premiums. These fees are recognized using the same amortization
methodology as DAC, including shadow accounting.
RESERVES FOR LOSS AND LOSS ADJUSTMENT
EXPENSES
Reserves are established for the payment of losses and loss adjust-
ment expenses (LAE) on claims which have occurred but are not yet
settled. Reserves for loss and loss adjustment expenses fall into two
categories: case reserves for reported claims and reserves for incurred
but not reported losses (IBNR).
Case reserves for reported claims are based on estimates of fu-
ture payments that will be made with respect to these claims, including
LAE relating to such claims. These estimates reflect the informed judg-
ment of claims personnel based on general insurance reserving prac-
tices and knowledge of the nature and value of a specific type of claim.
These case reserves are regularly re-evaluated in the ordinary course
of the settlement process and adjustments are made as new infor-
mation becomes available.
IBNR reserves are established to recognize the estimated cost of
losses that have occurred but where the Allianz Group has not yet
been notified. IBNR reserves, similar to case reserves for reported
claims, are established to recognize the estimated costs, including ex-
penses, necessary to bring claims to final settlement. The
Allianz Group relies on its past experience, adjusted for current trends
and any other relevant factors, in estimating IBNR reserves.
IBNR reserves are estimates based on actuarial and statistical
projections of the expected cost of the ultimate settlement and
administration of claims. The analyses are based on facts and circum-
stances known at the time, predictions of future events, estimates of
future inflation, and other societal and economic factors. Trends in
claim frequency, severity, and time lag in reporting are examples of
factors used in projecting the IBNR reserves. IBNR reserves are re-
viewed and revised periodically, as additional information becomes
available and actual claims are reported.
Reserves for loss and loss adjustment expenses are not dis-
counted, except when payment amounts are fixed and timing is rea-
sonably determinable.
RESERVES FOR INSURANCE AND INVESTMENT
CONTRACTS
Reserves for insurance and investment contracts include aggregate
policy reserves, reserves for premium refunds, and other insurance re-
serves.
Total
Aggregate policy reserves
For long-duration contracts, a premium deficiency is recognized,
if actual experience regarding investment yields, mortality, morbidity,
terminations, or expense indicates that existing contract liabilities,
along with the present value of future gross premiums, will not be suf-
ficient to cover the present value of future benefits and to recover DAC.
6-42
10-25
Useful lives
REINSURANCE ASSETS
Assets and liabilities related to reinsurance are reported on a gross
basis. Reinsurance assets include balances expected to be recovered
from reinsurance companies. The amount of reserves ceded to reinsur-
ers is estimated in a manner consistent with the claim liability associ-
ated with the reinsured risks. To the extent that the assuming reinsurers
are unable to meet their obligations, the respective ceding insurers of
the Allianz Group remain liable to their policyholders for the portion
reinsured. Consequently, allowances are made for receivables on rein-
surance contracts which are deemed uncollectible.
DEFERRED ACQUISITION COSTS
Deferred acquisition costs (DAC)
Costs that vary with and are directly related to the acquisition and
renewal of insurance contracts and investment contracts with discre-
tionary participation features are deferred by recognizing a DAC asset.
At inception, DAC is tested to ensure that it is recoverable over the life
of the contracts. Subsequently, loss recognition tests at the end of each
reporting period ensure that the DAC is covered by future profits.
For short-duration, traditional long-duration, and limited-pay-
ment insurance contracts, DAC is amortized in proportion to premium
revenue recognized. For universal life-type and participating life insur-
ance contracts as well as investment contracts with discretionary par-
ticipation features, DAC is generally amortized over the life of a book
of contracts based on estimated gross profits (EGP) or estimated gross
margins (EGM), respectively.
Acquisition costs for unit-linked investment contracts are deferred
in accordance with IFRS 15, if the costs are incremental. For non-unit-
linked investment contracts accounted for under IAS 39 at amortized
cost, acquisition costs that meet the definition of transaction costs
under IAS 39 are considered in the aggregate policy reserves.
104
Annual Report 2019 - Allianz Group
D_Consolidated Financial Statements
Present value of future profits (PVFP)
The value of an insurance business or an insurance portfolio acquired
is measured by the PVFP, which is the present value of net cash flows
anticipated in the future from insurance contracts in force at the date
of acquisition. It is amortized over the life of the relevant contracts.
Deferred sales inducements
Sales inducements on non-traditional insurance contracts are deferred
and amortized using the same methodology and assumptions as for
deferred acquisition costs.
For insurance contracts and investment contracts with discretionary
participation features, shadow accounting is applied to DAC, PVFP,
and deferred sales inducements, in order to include the effect of unre-
alized gains or losses in the measurement of these assets in the same
way as it is done for realized gains or losses. Accordingly, the assets are
adjusted with corresponding charges or credits recognized directly in
other comprehensive income as a component of the related unreal-
ized gain or loss. When the gains or losses are realized, they are recog-
nized in the income statement through recycling and prior adjustments
due to shadow accounting are reversed.
OTHER ASSETS
Other assets primarily consist of receivables, accrued dividends, inter-
est, rent and deferred compensation amounts as well as leased or own
used real estate, software and equipment. Depreciation is generally
computed using the straight-line method over the estimated useful
lives of the assets. The right-of-use assets related to leased property
and equipment are depreciated generally over the lease term.
Customer relationships
Acquired business portfolios
Long-term distribution agreements
Estimated useful lives (in years) and amortization methods
The table below summarizes estimated useful lives and the amor-
tization methods for each class of intangible assets with finite useful
lives:
INTANGIBLE ASSETS AND GOODWILL
Intangible assets with finite useful lives are measured at cost less accu-
mulated amortization and impairments. Intangible assets with indefi-
nite useful lives are tested for impairment annually and whenever
there is a triggering event. They are also reviewed annually to deter-
mine whether the indefinite-life classification is still appropriate.
Associates are entities over which the Allianz Group can exercise signif-
icant influence. In general, if the Allianz Group holds 20% or more of
the voting power in an investee but does not control the investee, it is
assumed to have significant influence. Investments in associates are
generally accounted for using the equity method.
2-13
2-10
Years
Equipment
Software
Real estate held for own use
Estimated useful lives (in years)
The table below summarizes estimated useful lives for real estate
held for own use, software, and equipment.
max. 50
Associates and joint arrangements
Shadow accounting
12
580
(354)
(419)
1,353
32,723
22,674
(3)
10,049
205
1
(11)
(23)
(1)
(1)
206
31,817
712
22
33
NOTES TO THE CONSOLIDATED FINANCIAL
D_Consolidated Financial Statements
Annual Report 2019 - Allianz Group
34,132
2,791
22,448
19
8,894
3,120
183
(2,538)
46
3
10
764
(434)
22,891
8,925
1,147
€ mn
Changes in liabilities arising from financing activities
D_Consolidated Financial Statements
99
90
(1,060)
As of 1 January 2018
(1,129)
18,340
2,564
2,408
(2,169)
(2,469)
17,234
17,690
Net cash flows
Non-cash transactions
Changes in the consolidated subsidiaries of the Allianz Group
Total
Lease
liabilities
Certificated
and
subordinated
liabilities
Liabilities to
banks and
customers
100
As of 31 December 2019
Fair value and other changes
Foreign currency translation adjustments
Changes in the consolidated subsidiaries of the Allianz Group
Non-cash transactions
Net cash flows
As of 31 December 2018
Fair value and other changes
Foreign currency translation adjustments
STATEMENTS
GENERAL INFORMATION
Annual Report 2019 - Allianz Group
The accompanying consolidated financial statements present the
operations of Allianz SE with its registered office in Königinstrasse 28,
80802 Munich, Germany, and its subsidiaries (the Allianz Group).
Allianz SE is recorded in the Commercial Register of the municipal
court in Munich under the number HRB 164232.
1 Nature of operations and basis of
presentation
Business combinations and measurement of non-controlling
interests
accounting policies adopted by the Allianz Group. The effects of intra-
Allianz Group transactions are eliminated.
D_Consolidated Financial Statements
101
Annual Report 2019 - Allianz Group
Subsidiaries are consolidated as from the date on which control is
obtained by the Allianz Group, up to the date on which the
Allianz Group no longer maintains control. Accounting policies of sub-
sidiaries are adjusted as necessary to ensure consistency with the
For certain entities, voting or similar rights are not the dominant
factor of control, such as when voting rights relate to administrative
tasks only and returns are directed by means of contractual arrange-
ments, as is the case mainly for investment funds managed by
Allianz Group internal asset managers. In such cases, the investment
fund qualifies as subsidiary if the Allianz Group is in a principal instead
of an agent role with regard to the investment fund. Above all, this
qualification takes into account kick-out rights held by third-party
investors as well as the aggregate economic interest of the
Allianz Group in the investment funds.
There are some entities where the Allianz Group holds a majority
stake but where management has assessed that the Allianz Group
does not control these entities because it has no majority representa-
tion in the governing bodies and/or it requires at least the confirmative
vote of another investor to pass any decisions over relevant activities.
For some subsidiaries where the Allianz Group does not hold a
majority stake, management has assessed that the Allianz Group con-
trols these entities. The Allianz Group controls these entities based on
distinctive rights stipulated by shareholder agreements between the
Allianz Group and the other shareholders in these companies or voting
rights held by the Allianz Group are sufficient to direct the relevant ac-
tivities unilaterally.
Scope of consolidation and consolidation procedures
In accordance with IFRS 10, the Allianz Group's consolidated financial
statements include the financial statements of Allianz SE and its sub-
sidiaries. The Allianz Group controls a subsidiary when it is exposed to,
or has rights to, variable returns from its involvement with the subsidi-
ary and has the ability to affect those returns through its power over
the subsidiary. Subsidiaries are usually entities where Allianz SE,
directly or indirectly, owns more than half of the voting rights or similar
rights with the ability to affect the returns of these entities for its own
benefit. In order to determine whether entities qualify as subsidiaries,
potential voting rights that are currently exercisable or convertible are
taken into consideration.
PRINCIPLES OF CONSOLIDATION
Where newly acquired subsidiaries are subject to business combina-
tion accounting, the provisions of IFRS 3 are applied. Non-controlling
interests in the acquiree that are present ownership interests and enti-
tle their holders to a proportionate share of the acquiree's net assets in
the event of liquidation can be measured either at their fair value at
the acquisition date or at the non-controlling interest's proportionate
share of the acquiree's identifiable net assets. This option is exercised
on a case-by-case basis.
The following balances are generally considered to be non-
current: investments, deferred tax assets, intangible assets, and de-
ferred tax liabilities.
current assets and assets of disposal groups classified as held for sale,
and liabilities of disposal groups classified as held for sale.
The Allianz Group's consolidated balance sheet is not presented
using a current/non-current classification. The following balances are
generally considered to be current: cash and cash equivalents,
deferred acquisition costs on property & casualty contracts, non-
The following paragraphs describe important accounting policies as
well as significant estimates and assumptions that are relevant for the
Allianz Group's consolidated financial statements. Estimates and as-
sumptions particularly influence the inclusion method as well as the
accounting treatment of financial instruments and insurance contracts,
goodwill, pension liabilities and similar obligations, and deferred
taxes. Significant estimates and assumptions are explained in the re-
spective paragraphs.
SIGNIFICANT ACCOUNTING POLICIES AND USE OF
ESTIMATES AND ASSUMPTIONS
2 Accounting policies, significant estimates,
and new accounting pronouncements
The Allianz Group offers property-casualty insurance, life/health
insurance, and asset management products and services in over 70
countries.
The consolidated financial statements were authorized for issue
by the Board of Management on 20 February 2020.
The consolidated financial statements have been prepared as of
and for the year ended 31 December 2019. The Allianz Group's presen-
tation currency is the Euro (€). Amounts are rounded to the nearest
million (€ mn) unless otherwise stated.
In accordance with the provisions of IFRS 4, insurance contracts
are recognized and measured on the basis of accounting principles
generally accepted in the United States of America (US GAAP) as at
first-time adoption of IFRS 4 on 1 January 2005.
They have been prepared in conformity with International
Financial Reporting Standards (IFRS), as adopted under European Un-
ion (E.U.) regulations in accordance with §315e (1) of the German
Commercial Code (HGB). Within these consolidated financial state-
ments, the Allianz Group has applied all standards and interpretations
issued by the IASB and endorsed by the E.U. that are compulsory as of
31 December 2019.
All other balances are mixed in nature (including both current and
non-current portions).
(235)
(465)
Operating change in reserves for insurance and investment contracts (net)²
(20,296)
5
(31,864)
(34,900)
13
(13,291)
30
(20,956)
(9,349)
(13,542)
43
Acquisition and administrative expenses (net), excluding acquisition-related expenses
(14,119)
(6,449)
(5,635)
Fee and commission expenses
(1,888)
(1,660)
(795)
153
(742)
Loan loss provisions
1,548
Claims and insurance benefits incurred (net)
1,765
4,945
Interest expenses, excluding interest expenses from external debt
(150)
(97)
(121)
(104)
Operating impairments of investments (net)
(42)
(112)
(1,201)
(2,465)
Investment expenses
Subtotal
Fee and commission income
Other income
Operating amortization of intangible assets
(426)
(397)
(1,592)
(1,382)
2,993
2,931
20,025
15,527
1,946
1,635
(21)
(43)
Operating restructuring and integration expenses
133
307
518
(41)
(131)
(396)
(345)
Non-operating impairments of investments (net)
134
Operating profit (loss)
155
663
878
Non-operating realized gains/losses (net)
16
109
40
5,997
(15)
Non-operating income from financial assets and liabilities carried at fair value through income (net)
Non-operating investment result
4,152
4,708
5,725
5,045
108
(20)
Subtotal
2
(28)
(59)
Other expenses
(2)
(6)
(4)
(1)
73
179
(64)
(180)
(241)
(278)
(49)
(55)
(98)
Net income (loss)
Income taxes
Income (loss) before income taxes
Non-operating items
Non-operating restructuring and integration expenses
Non-operating amortization of intangible assets
Acquisition-related expenses
Interest expenses from external debt
(22)
Non-operating change in reserves for insurance and investment contracts (net)
24
4,408
3,589
204
8,045
8,827
174
43
11,626
18,049
(354)
(487)
433
523
2018
2019
2018
2019
2018
2019
2018
(256)
(22,742)
(21,358)
47,904
40,232
319
(51)
2,236
(1,597)
62
(1,536)
14,222
46
284
193
(1,755)
(1,722)
6,538
4,080
3,370
27,960
132,168
529,687
588,023
(181)
(131)
(57)
(82)
73,054
77,541
(59)
(56)
22,891
25,468
(21)
25,012
(26)
13,445
160
12,336
(3,139)
2019
2018
Total revenues¹
59,156
55,401
2019
76,426
2018
70,450
Premiums earned (net)
51,328
48,305
24,586
23,167
Operating investment result
Interest and similar income
3,464
3,426
18,648
17,883
Operating income from financial assets and liabilities carried at fair value through income (net)
(57)
(49)
(1,707)
(3,351)
Operating realized gains/losses (net)
Life/Health
11,458
Property-Casualty
Business segment information - total revenues and reconciliation of operating profit (loss) to net income (loss)
(2,271)
9,209
9,199
13,177
13,430
(20)
4,475
115,361
63,344
58,513
(30,006)
(20)
(27,522)
13,238
13,475
933,820
833,888
Total equity
Total liabilities and equity
77,364
1,011,185
63,679
897,567
Annual Report 2019 - Allianz Group
117
D_Consolidated Financial Statements
BUSINESS SEGMENT INFORMATION - TOTAL REVENUES AND RECONCILIATION OF OPERATING PROFIT (LOSS)
TO NET INCOME (LOSS)
€ mn
5,224
All other financial assets
4,750
346
Subtotal
619,373
35,921
45,200
2,211
Equity securities
67,672
7,865
Financial assets for unit-
linked contracts
132,168
6,926
Derivative financial
instruments
7,586
2,696
Other
Total
18,673
659,121
35,904
252,626
19,698
1_Excluding any financial asset that meets the definition of held for trading in IFRS 9, or that is managed and whose
performance is evaluated on a fair value basis.
Financial assets that meet the SPPI criterion are those with contractual
terms that give rise on specified dates to cash flows that are solely pay-
ments of principal and interest (SPPI) on the principal amount out-
standing.
The following table provides information about the credit risk
exposures for financial assets with contractual terms that meet the
SPPI criterion. It includes the carrying amounts applying IAS 39 (in the
case of financial assets measured at amortized cost before adjusting
for any impairment allowances):
Annual Report 2019 - Allianz Group
9,062
111
1,379
Other debt securities
Fair value
change during
the reporting
Fair value
period
21,075
(17)
Debt securities
Government and
government agency
bonds
233,424
18,391
8,779
523
Covered bonds
77,394
2,154
2,879
307
Corporate bonds
253,222
13,607
16,707
653
MBS/ABS
21,076
390
7,773
382
34,257
Fair value
change during
the reporting
period
D_Consolidated Financial Statements
€ mn
34,096
6,270
86,430
981
9,453
36,449
705
117,842
440
6,006
10,246
8,094
168
622
21,075
21,075
724
209
7,936
4
4,499
229,688
69,748
250,634
21,076
31,064
10,049
Carrying amounts of financial assets that meet the SPPI¹ criterion by rating
4,509
16,778
As of 31 December 2019
Investment grade
AAA
AA
A
BBB
Group
Non-investment grade
Not rated
Total
Government
and
Cash and cash
equivalents
government
agency bonds
Covered
bonds
Corporate
bonds
MBS/ABS
Other debt
securities
Other
46,301
45,787
5,366
14,973
435
101,871
24,966
5,798
Fair value
Cash and cash
equivalents
Further explanations are given in note 32.
NEW ACCOUNTING PRONOUNCEMENTS
RECENTLY ADOPTED ACCOUNTING
PRONOUNCEMENTS
IFRS 16, Leasing
In January 2016, the IASB issued IFRS 16, Leases, which supersedes
IAS 17, IFRIC 4, SIC-15, and SIC-27. IFRS 16 introduces a single, on-bal-
ance sheet lease accounting model for lessees. A lessee recognizes a
right-of-use asset representing its right to use the underlying asset and
a lease liability representing its obligation to make lease payments.
There are recognition exemptions for short-term leases and leases of
low-value items. Lessor accounting remains similar to the current
standard - i.e. lessors continue to classify leases as finance or operat-
ing leases.
The Allianz Group has applied IFRS 16 using the modified retro-
spective approach; therefore, any comparative information has not
been restated and continues to be reported under IAS 17 and IFRIC 4.
On transition to IFRS 16, the Allianz Group elected to apply the practi-
cal expedient to grandfather the assessment of which transactions are
leases. It applied IFRS 16 only to contracts previously identified as
leases. Contracts that had not been identified as leases under IAS 17
and IFRIC 4 were not reassessed for whether there is a lease. Therefore,
the definition of a lease under IFRS 16 was applied only to contracts
entered into or changed on or after 1 January 2019.
AS A LESSEE
As a lessee, the Allianz Group had previously classified leases as oper-
ating or finance leases based on its assessment of whether the lease
transferred substantially all of the risks and rewards incidental to own-
ership of the underlying asset to the Allianz Group. Under IFRS 16, the
Allianz Group recognizes right-of-use assets and lease liabilities for
most leases - i.e. these leases are on the balance sheet.
The Allianz Group has elected not to recognize right-of-use assets
and lease liabilities for short-term leases that have a lease term of 12
months or less and leases of low-value assets (e.g. tablets, personal
computers, telephones, office furniture, copy and fax machines) as well
as car leases as these are considered not to be material for
Allianz Group. The Allianz Group recognizes the lease payments asso-
ciated with these leases as an expense on a straight-line basis over the
lease term.
LEASES PREVIOUSLY CLASSIFIED AS OPERATING LEASES
UNDER IAS 17
At transition, lease liabilities were measured at the present value of the
remaining lease payments, discounted at the Allianz Group's incre-
mental borrowing rate as at 1 January 2019. Right-of-use assets were
measured at an amount equal to the lease liability and adjusted by
the amount of any prepaid or accrued lease payments. The
Allianz Group used the following practical expedients when applying
IFRS 16 to leases previously classified as operating leases under
IAS 17:
-
Applied a single discount rate to a portfolio of leases with similar
characteristics.
Adjusted the right-of-use assets by the amount of the IAS 37 oner-
ous contract provision immediately before the date of initial appli-
cation, as an alternative to an impairment review.
Annual Report 2019 - Allianz Group
109
D_Consolidated Financial Statements
Excluded initial direct costs from measuring the right-of-use assets
at the date of initial application.
Used hindsight in determining the lease term, if the contract con-
tains options to extend or terminate the lease.
LEASES PREVIOUSLY CLASSIFIED AS FINANCE LEASES
UNDER IAS 17
For leases classified as finance leases under IAS 17, the carrying
amount of the right-of-use asset and the lease liability at 1 Janu-
ary 2019 were determined at the carrying amount of the lease asset
and lease liability under IAS 17 immediately before that date.
AS A LESSOR
The Allianz Group was not required to make any adjustments on tran-
sition to IFRS 16 for leases for which it acts as a lessor, except for sub-
leases. The Allianz Group has accounted for its (sub)leases in accord-
ance with IFRS 16 from the date of initial application. Under IFRS 16,
the Allianz Group is required to assess the classification of subleases
with reference to the right-of-use assets, not the underlying assets. On
transition, the Allianz Group reassessed the classification of sublease
contracts previously classified as operating leases under IAS 17. The
Allianz Group concluded that the sublease is a finance lease under
IFRS 16.
The Allianz Group applied IFRS 15 Revenue from Contracts with
Customers to allocate consideration in the contracts to each lease and
non-lease component.
Changes in deferred tax assets and liabilities are generally reco-
gnized through profit and loss in the consolidated income statement,
except for changes recognized directly in equity.
IMPACTS ON CONSOLIDATED FINANCIAL STATEMENTS
On transition to IFRS 16, the Allianz Group recognized an additional
€2.3 bn of right-of-use assets in other assets and € 2.6 bn of lease
liabilities in other liabilities, recognizing the difference against prepaid
rent, deferred rent, and onerous contract provisions.
The analysis and forecasting required in this process are performed
for individual jurisdictions by qualified local tax and financial profes-
sionals. Given the potential significance surrounding the underlying es-
timates and assumptions, group-wide policies and procedures have
been designed to ensure consistency and reliability around the recov-
erability assessment process. Forecast operating results are based
upon approved business plans, which are themselves subject to a well-
defined process of control. As a matter of policy, especially strong evi-
dence supporting the recognition of deferred tax assets is required if
an entity has suffered a loss in either the current or the preceding pe-
riod. Recognition and recoverability of all significant deferred tax as-
sets are reviewed by tax professionals at Group level and by the
Allianz Group Tax Committee.
Current income taxes are calculated based on the respective local tax-
able income and local tax rules for the period. In addition, current
income taxes presented for the period include adjustments for uncer-
tain tax payments or tax refunds for periods not yet finally assessed,
excluding interest expenses and penalties on the underpayment of
taxes. In the event that amounts included in the tax return are consid-
ered unlikely to be accepted by the tax authorities (uncertain tax posi-
tions), a provision for income taxes is recognized. The amount is based
on the best possible assessment of the tax payment expected. Tax re-
fund claims from uncertain tax positions are recognized when it is prob-
able that they can be realized.
3,896
(1,241)
(1,496)
(1,227)
3,983
4,302
3,523
(1,059)
2,837
Net income (loss) attributable to:
Non-controlling interests
Shareholders
73
3,910
66
4,236
187
3,336
166
2,671
1_Total revenues comprise gross premiums written and (due to a definition change at the beginning of 2019) fee and commission income in Property-Casualty, statutory gross premiums in Life/ Health, operating revenues in Asset Management,
and total revenues in Corporate and Other (Banking). Prior year figures have been adjusted accordingly.
2_For the year ended 31 December 2019, includes expenses for premium refunds (net) in Property-Casualty of € (153) mn (2018: € 86 mn).
118
Annual Report 2019 - Allianz Group
D_Consolidated Financial Statements
case, performance-related fees from alternative investment products
(carried interest) are not recognized as revenue prior to the date of the
official declaration of distribution by the fund. The transaction price for
asset management services is determined by the fees contractually
agreed.
CLAIMS AND INSURANCE BENEFITS INCURRED
These expenses consist of claims and insurance benefits incurred dur-
ing the period, including benefit claims in excess of policy account
balances and interest credited to policy account balances. Further-
more, it includes claims handling costs directly related to the pro-
cessing and settlement of claims. Reinsurance recoveries are deducted
from claims and insurance benefits.
INCOME TAXES
Deferred tax assets or liabilities are calculated for temporary dif-
ferences between the tax bases and the financial statement carrying
amounts, including differences from consolidation, unused tax loss
carry-forwards, and unused tax credits. Measurement is based on
enacted or substantively enacted tax rates and tax rules. Assessments
as to the recoverability of deferred tax assets require the use of judg-
ment regarding assumptions related to estimated future taxable prof-
its. This includes the character and amounts of taxable future profits, the
periods in which those profits are expected to occur, and the availability
of tax planning opportunities. The Allianz Group recognizes a valuation
allowance for deferred tax assets when it is unlikely that a correspond-
ing amount of future taxable profit will be available against which the
deductible temporary differences, tax loss carry forwards and tax cred-
its can be utilized.
Financial assets that meet the
SPPI criterion¹
Impact on consolidated balance sheet
Other assets
Discounted using the incremental borrowing rate at 1 January 2019
Lease liabilities recognized at 1 January 2019
1_Compared to note 37 of the Allianz Group's Annual Report 2018, the operating lease commitments were adjusted by
€ 797 mn for commitments not included.
Other adopted accounting pronouncements
The following amendments and revisions to existing standards be-
came effective for the Allianz Group's consolidated financial state-
ments as of 1 January 2019:
IAS 19, Plan Amendment, Curtailment or Settlement,
IAS 28, Long-term Interests in Associates and Joint Ventures,
IFRIC 23, Uncertainty over Income Tax Treatments, and
Annual Improvements to IFRS Standards 2015-2017 Cycle
(Amendments to IFRS 3, IFRS 11, IAS 12 and IAS 23).
These changes had no material impact on the Allianz Group's financial
results or financial position.
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
IFRS 17, Insurance Contracts
In May 2017, the IASB issued IFRS 17, Insurance Contracts. The IASB
published the Exposure Draft Amendments to IFRS 17 in June 2019,
which proposed to defer the mandatory effective date of IFRS 17 by
one year, so that IFRS 17 should be applied after 1 January 2022
(retrospective application). IFRS 17 provides comprehensive guidance
on accounting for insurance contracts and investment contracts with
discretionary participation features. For non-life insurance contracts,
IFRS 17 introduces mandatory discounting of loss reserves as well as a
risk adjustment for non-financial risk. Further, IFRS 17 will change the
presentation of insurance contract revenue, a gross written premium
will no longer be presented in the statement of comprehensive income.
For long-duration life insurance contracts, IFRS 17 is expected to
have a significant impact on actuarial modeling, as more granular
cash flow projections and regular updates of all assumptions will be
required, either resulting in profit or loss or impacting the "contractual
service margin", a separate component of the insurance liability repre-
senting unearned profits from in-force contracts. Further, IFRS 17 intro-
duces different measurement approaches for the insurance contract
liabilities, reflecting a different extent of policyholder participation in
investment or insurance entity performance.
The Allianz Group is currently assessing the impact of the applica-
tion of IFRS 17. As of the date of the publication of these consolidated
financial statements, it is not practicable to quantify the effect on the
Allianz Group consolidated financial statements.
110
Annual Report 2019 - Allianz Group
D_Consolidated Financial Statements
IFRS 9, Financial Instruments
IFRS 9, Financial instruments, issued by the IASB in July 2014, fully
replaces IAS 39 and provides a new approach on how to classify finan-
cial instruments based on their cash flow characteristics and the busi-
ness model under which they are managed. Furthermore, the standard
introduces a new forward-looking impairment model for debt instru-
ments and provides new rules for hedge accounting.
It can be assumed that the main impact from IFRS 9 will arise from
the new classification rules leading to more financial instruments be-
ing measured at fair value through income as well as the new impair-
ment model. Interdependencies with IFRS 17 will need to be consid-
ered to assess the ultimate combined impact of both standards.
The amendments to IFRS 4, Applying IFRS 9 Financial Instruments
with IFRS 4 Insurance Contracts, issued in September 2016, allow enti-
ties that issue insurance contracts within the scope of IFRS 4 to defer
the implementation of IFRS 9 until 1 January 2021 under certain cir-
cumstances. In this context, it is to be noted that the Exposure Draft
Amendments to IFRS 17 that was published in June 2019, proposes to
further extend the expiry date in IFRS 4 for the temporary exemption
from applying IFRS 9 to 1 January 2022.
Given the strong interrelation between the measurement of direct
participating insurance contracts and the underlying assets held, the
Allianz Group has decided to use the option to defer the full implemen-
tation of IFRS 9 until IFRS 17 becomes effective.
In order to qualify for the temporary exemption, an entity has to
prove that its activities are predominantly connected to insurance as of
31 December 2015. Under the amended IFRS 4, this condition is met if
the insurer carries significant liabilities arising from contracts within the
scope of IFRS 4. Significant insurance-related liabilities are given,
among others, if the percentage of the total carrying amount of liabil-
ities connected with insurance relative to the total carrying amount of
all liabilities is greater than 90%. A reassessment at a subsequent
annual reporting date is required if, and only if, there was a change in
the entity's activities during the annual period that ended on that date.
As of 31 December 2015, the Allianz Group's total carrying
amount of liabilities connected with insurance amounted to € 722 bn,
which represented more than 90% of its total liabilities of € 783 bn.
Thereof, non-derivative investment contract liabilities measured at fair
value through income applying IAS 39 amounted to € 107 bn, mostly
consisting of financial liabilities for unit-linked contracts. Other insur-
ance-related liabilities amounted to € 40 bn and included mainly other
liabilities (e.g. payables as well as employee-related liabilities) as well
as subordinated liabilities and financial liabilities carried at fair value
through income related to certain derivatives. No change in the activi-
ties of the Allianz Group occurred subsequently that would have
required a reassessment.
The following table provides an overview of the fair values as of
31 December 2019 and the amounts of change in the fair values dur-
ing the reporting period separately for financial assets that meet the
SPPI criterion and for all other financial assets:
Financial assets under IFRS 9 classification rules
€ mn
As of 31 December 2019
New lease contracts with commencement date after 1 January 2019
Other
€ mn
2,628
(32)
Total assets
Before first
application of
IFRS 16
39,209
39,209
Application of
IFRS 16
2,290
2,290
After
implementation
of IFRS 16
41,499
41,499
Other liabilities
40,232
Total liabilities and equity
40,232
2,628
2,628
42,860
42,860
When measuring lease liabilities, the Allianz Group discounted lease
payments using a country- and asset-specific incremental borrowing
rate at 1 January 2019, ranging between 0.1% and 19.7%.
The operating lease commitment reported under IAS 17 can be
reconciled to the lease liabilities according to IFRS 16 as follows:
Reconciliation of lease commitment to lease liabilities
€ mn
Operating lease commitment at 31 December 2018¹
Extension and termination options reasonably certain to be exercised
Variable lease payments based on an index or an (interest) rate
3,202
Recognition exemption for short-term leases or leases expiring before
31 December 2019, leases of low value assets, car leases, and leases for
intangible assets
(183)
105
10
(205)
(268)
Consolidation
501
2019
1,884
Allianz Sakura
1,132
Other disposal groups
15
78
Subtotal
3,031
78
Non-current assets classified as held for sale
Reclassified assets and liabilities
€ mn
Real estate held for investment
47
Real estate held for own use
23
Subtotal
524
47
Cash and cash equivalents
Total
3,555
125
Investments
16
1,113
Allianz Popular
Liabilities of disposal groups classified as held for sale
Assets of disposal groups classified as held for sale
€ mn
269
1,884
11
57
1,407
7
70
37
1,589
The total goodwill of € 635 mn arising from both acquisitions con-
sists largely of new business, economies of scale and synergies ex-
pected from combining the operations of LV GIG and LGIL
None of the goodwill recognized is expected to be deductible for
income tax purposes.
For the year ended 31 December 2019, acquisition-related ex-
penses in the amount of € 7 mn were included in administrative ex-
penses.
Had LV GIG and LGIL been consolidated from 1 January 2019, the
consolidated income statement would have included premiums
earned (net) of € 1,613 mn and net income of € 23 mn.
2018
In 2018, no significant business combinations occurred.
CLASSIFICATION AS HELD FOR SALE
Non-current assets and disposal groups classified as held for sale
2019
2018
Total assets
Unearned premiums
Reserves for loss and loss adjustment expenses
Reserves for insurance and investment contracts
Financial liabilities for unit-linked contracts
Deferred tax liabilities
Other liabilities
Total liabilities
As of 31 December 2019, cumulative gains of € 8 mn were reported in
other comprehensive income relating to this disposal group classified
as held for sale. No impairment loss has been recognized in connec-
tion with this transaction. A sales contract for the Allianz shares in
Allianz Popular was signed on 24 June 2019. The closing of the trans-
action was on 31 January 2020.
ALLIANZ SAKURA MULTIFAMILY LUX SCSP,
LUXEMBOURG
As of 31 December 2019, all requirements were fulfilled to present
Allianz Sakura Multifamily Lux SCSp, Luxembourg, allocated to the re-
portable segments German Speaking Countries and Central & Eastern
Europe (Life/Health) and Corporate and Other, as a disposal group
classified as held for sale.
As of 31 December
52
Loans and advances to banks and customers
Allianz Popular
PROPERTY-CASUALTY
In the business segment Property-Casualty, reportable segments offer
a wide variety of insurance products to both private and corporate cus-
tomers, including motor liability and own damage, accident, general
liability, fire and property, legal expense, credit, and travel insurance.
LIFE/HEALTH
In the business segment Life/Health, reportable segments offer a com-
prehensive range of life and health insurance products on both an in-
dividual and a group basis, including annuities, endowment and term
insurance, unit-linked and investment-oriented products, as well as full
private health, supplemental health, and long-term care insurance.
ASSET MANAGEMENT
The reportable segment Asset Management operates as a global pro-
vider of institutional and retail asset management products and ser-
vices to third-party investors. It also provides investment management
services to the Allianz Group's insurance operations. The products for
retail and institutional customers include equity and fixed-income
funds as well as multi-assets and alternative products. The United
States, Canada, Europe, and the Asia-Pacific region represent the pri-
mary asset management markets.
CORPORATE AND OTHER
The reportable segment Corporate and Other includes the manage-
ment and support of the Allianz Group's businesses through its strat-
egy, risk, corporate finance, treasury, financial reporting, controlling,
communication, legal, human resources, technology, and other func-
tions. Furthermore, it includes the banking activities in France, Italy, and
Bulgaria, global alternative investment management services in the
real estate sector, mainly on behalf of the Allianz Group's insurance
operations, as well as digital investments.
GENERAL SEGMENT REPORTING INFORMATION
Prices for transactions between reportable segments are set on an
arm's length basis in a manner similar to transactions with third
parties. Lease transactions are accounted for in accordance with IFRS
except for intragroup lease transactions which are classified as oper-
ating leases (i.e. off-balance sheet treatment by lessee) for internal
and segment reporting purposes. Transactions between reportable
segments are eliminated in the consolidation. Financial information is
recorded based on reportable segments; cross-segmental country-
specific information is not determined.
REPORTABLE SEGMENTS MEASURE OF PROFIT OR
LOSS
The Allianz Group uses operating profit to evaluate the performance
of its reportable segments as well as of the Allianz Group as a whole.
Operating profit highlights the portion of income before income taxes
that is attributable to the ongoing core operations of the
Allianz Group. The Allianz Group considers the presentation of operat-
ing profit to be useful and meaningful to investors because it enhances
the understanding of the Allianz Group's underlying operating perfor-
mance and the comparability of its operating performance over time.
Effective 1 January 2019, the Allianz Group amended its operat-
ing profit definition to exclude certain costs that arise directly from in-
tegration measures associated with external acquisitions of a certain
magnitude or Group internal business combinations of entities with
large business activities. Due to the one-off nature of integration ex-
penses, the Allianz Group believes that the updated definition of oper-
ating profit provides more reliable and relevant information to the ex-
ternal audience, and accordingly, their exclusion provides additional
insight into the operating profit trends of the underlying business.
To better understand the ongoing operations of the business, the
Allianz Group generally excludes the following non-operating effects:
-
-
income from financial assets and liabilities carried at fair value
through income (net),
realized gains/losses (net) and impairments of investments (net),
interest expenses from external debt,
acquisition-related expenses (from business combinations),
amortization of intangible assets,
restructuring and integration expenses, and
profit (loss) of substantial subsidiaries classified as held for sale.
The following exceptions apply to this general rule:
In all reportable segments, income from financial assets and liabil-
ities carried at fair value through income (net) is treated as oper-
ating profit if the income relates to operating business.
For life/health insurance business and property-casualty insurance
products with premium refunds, all items listed above are included
in operating profit if the profit sources are shared with policyhold-
ers. There is one exception from this general rule with regard to
policyholder participation in extraordinary tax benefits and ex-
penses. As IFRS require that the consolidated income statement
present all tax effects in the line item income taxes, even when they
The types of products and services from which the reportable seg-
ments derive revenues are described below.
3
Both asset management as well as corporate and other activities
represent separate reportable segments. In total, the Allianz Group
has identified 11 reportable segments in accordance with IFRS 8.
German Speaking Countries and Central & Eastern Europe,
Western & Southern Europe and Asia Pacific,
Iberia & Latin America and Allianz Partners,
USA (Life/Health only),
1,589
Total assets
1,132
Allianz Sakura
637
Liabilities to banks and customers
625
Other disposal groups
10
62
Other liabilities
13
Total
2,236
62
Total liabilities
637
Annual Report 2019 - Allianz Group
No impairment loss has been recognized in connection with this trans-
action. The closing of the transaction is expected during the first half
year of 2020. After completion of the transaction, the Allianz Group will
113
D_Consolidated Financial Statements
retain a 50% stake in Allianz Sakura Multifamily Lux SCSp, Luxem-
bourg, subject to at-equity accounting.
4 Segment reporting
IDENTIFICATION OF REPORTABLE SEGMENTS
The business activities of the Allianz Group are organized by product
and type of service: insurance activities, asset management activities,
and corporate and other activities. Due to differences in the nature of
products, risks, and capital allocation, insurance activities are further
divided into the business segments Property-Casualty and Life/Health.
In accordance with the responsibilities of the Board of Management,
each of the insurance business segments is grouped into the following
reportable segments:
Global Insurance Lines & Anglo Markets, Middle East and Africa.
114
14
7
LV GIG
LGIL
Cash and cash equivalents
834
465
Investments
1,549
Loans and advances to banks and customers
118
Reinsurance assets
537
111
Deferred tax assets
2
516
241
Intangible assets (excluding goodwill)
265
18,673
18,673
35
Total identifiable assets
3,821
852
Unearned premiums
916
Other assets
266
€ mn
The amounts recognized as of the acquisition date for major clas-
ses of identifiable assets acquired and liabilities assumed are as fol-
lows:
The fair values of financial assets included in the table above that are
non-investment grade, and thus do not have low credit risk as of 31 De-
cember 2019, approximately equal the respective carrying amounts.
The same also applies to non-rated financial assets.
The publicly available IFRS 9 information disclosed by some sub-
sidiaries that already apply IFRS 9 is not material from the
Allianz Group's perspective. Furthermore, the vast majority of the
financial instruments of these subsidiaries are financial assets for unit-
linked contracts that are recorded at fair value through income under
IAS 39 as well as under IFRS 9.
The Allianz Group's investments in associates and joint ventures
that are insurance entities also apply the temporary exemption of ap-
plying IFRS 9 to the extent they qualify. All other investments in associ-
ates and joint ventures held by the Allianz Group already adopted
IFRS 9 as of 1 January 2018. The impact of adopting or deferring the
application of IFRS 9 for the investments in associates or joint ventures
is not material for the Allianz Group.
Further amendments and interpretations
In addition to the above-mentioned accounting pronouncements re-
cently issued, the following amendments and revisions to standards
and interpretations have been issued by the IASB but are not yet effec-
tive for or have not been adopted early by the Allianz Group.
Further amendments and interpretations
Standard/Interpretation
IFRS 3, Definition of a Business
IFRS 9, Prepayment Features with Negative
Compensation
IFRS 10 and IAS 28, Sale or Contribution of Assets
between an Investor and its Associate or Joint
Venture
IAS 1 and IAS 8, Definition of Material
IFRS 9, IAS 39 and IFRS 7, Interest Rate Benchmark
Reform
Effective date
Annual periods beginning on or after
1 January 2020
Annual periods beginning on or after
1 January 2021
Annual periods beginning on or after
1 January 2020
Annual periods beginning on or after
1 January 2020
Annual periods beginning on or after
1 January 2020
3 Consolidation and classification
as held for sale
SIGNIFICANT BUSINESS COMBINATIONS
2019
Effective 31 December 2019, Allianz UK acquired 100% in each Liver-
pool Victoria General Insurance Group Limited ("LV GIG") and Legal &
General Insurance Limited ("LGIL"). The main rationale for both acqui-
sitions is to significantly increase the position of Allianz in the UK per-
sonal lines and in particular in the motor and household insurance seg-
ments, diversifying customer, product and distribution mix and unlock-
ing synergies across Allianz businesses in the UK. The scale of the com-
bined entities is considered to provide a competitive advantage.
Identifiable assets acquired and liabilities assumed
1
Reserves for loss and loss adjustment expenses
194
As of 31 December 2019, all requirements were fulfilled to present
Allianz Popular, Madrid, allocated to the reportable segment Iberia &
Latin America (Life/Health), as a disposal group classified as held for
sale.
Reclassified assets and liabilities
€ mn
GIG held before the business combination
Contingent and other considerations
Total consideration transferred
Less: Total identifiable net assets
Goodwill
Allianz UK recognized a gain of € 62 mn as a result of measuring at fair
value its previously held 49% equity interest in LV GIG before the busi-
ness combination which is reported in realized gains/losses (net) for
the year ending 31 December 2019.
Reinsurance assets
Deferred acquisition costs
Other assets
Intangible assets
681
44
Cash and cash equivalents
129
1,390
286
Investments
1,398
(815)
(226)
575
60
Loans and advances to banks and customers
Financial assets for unit-linked contracts
13
ALLIANZ POPULAR, MADRID
1,582
286
LGIL
Reserves for insurance and investment contracts
117
Deferred tax liabilities
35
344
166
Subordinated liabilities
Total identifiable liabilities
Total identifiable net assets
12
3,006
626
815
226
Other liabilities
The amendments and interpretations are not expected to have a ma-
terial impact on the financial position and financial results of the
Allianz Group. Early adoption is generally allowed but not intended by
the Allianz Group.
The fair value of the acquired identifiable intangible assets of
€ 300 mn is provisional pending completion of the valuations for those
assets.
112
Annual Report 2019 - Allianz Group
D_Consolidated Financial Statements
The following table summarizes the total consideration trans-
ferred and the goodwill recognized at the acquisition date:
Total consideration transferred and determination of goodwill
€ mn
Cash and cash equivalents
Fair value of Allianz UK's previously held equity interest in LV
LV GIG
665
Corporate and Other
Annual Report 2019 - Allianz Group
Operating profit should be viewed as complementary to, and not as a
substitute for, income before income taxes or net income as deter-
mined in accordance with IFRS.
Group
2019
2018
2019
2018
2019
2018
2019
2018
967
1,073
4,773
4,136
(165)
(253)
21,075
17,234
66
69
517
506
(473)
(353)
13,187
7,611
Consolidation
79
Corporate and Other
D_Consolidated Financial Statements
3,374
Other liabilities
22,574
19,115
15,704
14,094
Liabilities of disposal groups classified as held for sale
10
35
1,958
27
Certificated liabilities
12
11
Subordinated liabilities
12
69
65
Total liabilities
127,746
116,641
768,261
682,666
116
Annual Report 2019 - Allianz Group
Asset Management
5,273
72
103,084
3,731
7,668
7,462
(15,607)
(14,149)
44,532
39,209
566
(127)
3,555
125
7,607
13,739
7,488
159
12
14,796
13,767
12,662
126,940
121,745
(112,423)
(106,788)
1,011,185
897,567
Asset Management
4,582
106,426
959
(1,722)
(89,383)
(86,394)
625,746
550,923
270
68
5,739
5,449
(4,820)
(3,828)
112,672
108,270
132,168
115,361
(92)
(90)
17,545
16,400
24,777
27,709
166
162
1,092
1,095
(1,755)
1,133
belong to policyholders, the corresponding expenses for premium
refunds are shown as non-operating as well.
2,190
Deferred tax liabilities
768
11,661
6,620
107,740
99,366
500,885
434,794
11,016
10,773
100,466
95,808
132,168
115,361
11,739
10,987
5,898
5,504
Deferred acquisition costs
4,936
4,796
19,841
22,912
Deferred tax assets
794
714
1,415
836
8,301
3,977
RECENT ORGANIZATIONAL CHANGES
Due to the immateriality of the former reportable segments Banking
and Alternative Investments, they were combined in 2019 with the for-
mer reportable segment Holding & Treasury to form the new reporta-
ble segment Corporate and Other, which is identical to the respective
business segment. Previously reported information has been adjusted
to reflect this change.
Additionally, some minor reallocations between the reportable
segments have been made.
D_Consolidated Financial Statements
Annual Report 2019 - Allianz Group
115
D_Consolidated Financial Statements
BUSINESS SEGMENT INFORMATION - CONSOLIDATED BALANCE SHEET
Business segment information - consolidated balance sheet
€ mn
Property-Casualty
Life/Health
2019
2018
2019
2018
As of 31 December
ASSETS
Cash and cash equivalents
Financial assets carried at fair value through income
Investments
Loans and advances to banks and customers
Financial assets for unit-linked contracts
Reinsurance assets
5,334
10,165
2,712
710
27,296
Reserves for loss and loss adjustment expenses
114
126
17,900
11,421
1,556
1,563
4,616
5,976
20,022
17,784
5,472
5,128
65,414
61,442
12,184
11,672
Reserves for insurance and investment contracts
15,333
14,388
572,904
515,537
Financial liabilities for unit-linked contracts
132,168
115,361
Unearned premiums
Other assets
Liabilities to banks and customers
LIABILITIES AND EQUITY
23,357
20,592
18,808
Non-current assets and assets of disposal groups classified as held for sale
100
48
3,016
77
Intangible assets
4,335
3,292
2,695
2,976
Total assets
174,706
158,078
808,223
711,870
As of 31 December
Property-Casualty
Life/Health
2019
2018
2019
2018
Financial liabilities carried at fair value through income
1 Excluding any financial asset that meets the definition of held for trading in IFRS 9, or that is managed and whose performance is evaluated on a fair value basis.
Allocation of carrying amounts of goodwill to CGUS
128
3,870
Cost as of 1 January
Equipment
Software
held for
own use
Right-of-use
assets
Equipment
7,812
Software
Real estate
Real estate
held for
2018
2019
€ mn
Property and equipment
PROPERTY AND EQUIPMENT
own use
4_Includes other assets due within one year of € 37,337 mn (2018: € 32,802 mn).
4,259
7,420
1,432
2,786
2,941
2,290
1,378
2,934
2,856
3,938
Carrying amount as of 1 January
(4,633)
(997)
(2,880)
(4,879)
(1,014)
Accumulated depreciation/amortization as of 1 January
4,318
(2,887)
Additions
3_Include € 892 mn (2018: € 695 mn) assets for deferred compensation programs which are mainly level 2 for fair value
measurement.
39,209
Property and equipment
489
702
criteria for hedge accounting, and firm commitments¹
Derivative financial instruments used for hedging that meet the
507
621
Real estate held for own use
Prepaid expenses
6,388
Accrued dividends, interest, and rent
3,796
3,833
Subtotal
1,998
2,329
6,585
2_For further information regarding the first application of IFRS 16, please refer to note 2.
Software
Right-of-use assets²
44,532
1,991
2,434
7,168
9,826
2,416
1,378
Equipment
1,379
3,183
2,856
2,848
1_Mainly level 2 for fair value measurement.
Total
Other assets³
Subtotal
2,934
172
688
362
1,379
3,1832
2,848¹
Carrying amount as of 31 December
1
2
Reversals of impairments
2,416³
(1)
(4)
(11)
(1)
(34)
(317)
(585)
(71)
(70)
(401)
2,856
1,378
4,259
7,812
3,870
2,838
4,008
8,850
3,874
2,934
Cost as of 31 December
4,879
1,014
4233
2,629
5,667
1,025
Accumulated depreciation/amortization as of 31 December
2,880
(325)
(618)
(72)
(42)
(45)
(57)
(56)
Disposals and reclassifications into non-current assets and
assets of disposal groups classified as held for sale
18
6
(14)
26
104
Allianz Group
Changes in the consolidated subsidiaries of the
316
830
78
549
1
(56)
(61)
Reclassifications
Impairments
Depreciation/Amortization
6
(2)
(13)
3
15
5
14
Foreign currency translation adjustments
(15)
23
(63)
3
(6)
161
(67)
Other taxes
1,798
1,504
Income taxes
Reserves for loss and loss adjustment expenses
1,713
1,853
Unearned premiums
2019
2018
As of 31 December
10,304
€ mn
8 Reinsurance assets
D_Consolidated Financial Statements
Annual Report 2019 - Allianz Group
1_Includes loans and advances to banks and customers due within one year of € 11,031 mn (2018: € 12,674 mn).
122
(78)
108,270
(58)
112,672
Reinsurance assets
Total¹
9,672
5,260
Foreign currency translation adjustments
4,633
4,887
Carrying amount as of 1 January
2018
2019
9 Deferred acquisition costs
Aggregate policy reserves.
ceded, the Allianz company remains primarily liable as the direct in-
surer for all the risks it underwrites, including the share that is reinsured.
The Allianz Group monitors the financial condition of its reinsurers on
a regular basis and reviews its reinsurance arrangements periodically
in order to evaluate the reinsurer's ability to fulfill its obligations to the
Allianz Group companies under existing and planned reinsurance con-
tracts. The Allianz Group's evaluation criteria, which include the degree
of creditworthiness, capital levels, and marketplace reputation of its re-
insurers, are such that the Allianz Group believes that its reinsurance
credit risk is not significant, and historically has not experienced note-
worthy difficulty in collecting claims from its reinsurers. Additionally,
and as appropriate, the Allianz Group may also require letters of
credit, deposits, or other financial guarantees to further minimize its
exposure to credit risk. In certain cases, however, the Allianz Group
does establish an allowance for doubtful amounts related to reinsur-
ance as appropriate, although this amount was not significant as of
31 December 2019 and 2018. The Allianz Group primarily maintains
business relations with highly rated reinsurers.
Changes in aggregate policy reserves ceded to reinsurers
Changes in aggregate policy reserves ceded to reinsurers are as fol-
lows:
128
16,400
Other insurance reserves
Total
17,545
128
4,887
€ mn
Loan loss allowance
108,348
112,730
228
422
Share of earnings
2018
2019
7 Loans and advances to banks and customers
3,240
Share of other comprehensive income
3,868
1,152
2,514
2,716
Carrying amount as of 31 December
Accumulated depreciation as of 31 December
Cost as of 31 December
(28)
(128)
(165)
726
137
(79)
Loans and advances to banks and customers
Subtotal
2,344
3,072
Other
102,898
107,084
Loans
3,105
2,574
Short-term investments and certificates of deposit
2018
2019
As of 31 December
€ mn
149
559
Share of total comprehensive income
75
1_As of 31 December 2019, assets pledged as security and other restrictions on title were € 103 mn (2018: € 104 mn).
2_As of 31 December 2019, includes € 2,156 mn (2018: € 1,926 mn) for self-developed software and € 1,027 mn (2018: € 1,007 mn) for software purchased from third parties.
3_Consists mainly of real estate. For information on the first application of IFRS 16, please refer to note 2.
187
231
Policyholders
Receivables
As of 31 December
€ mn
Other assets
10 _ Other assets
D_Consolidated Financial Statements
2019
123
24,777
(8,239)
(8,868)
2,575
(4,573)
333
317
27,709
(1)
2018
6,460
Tax receivables
18,673
20,728
Subtotal
(600)
(673)
Less allowances for doubtful accounts
7,241
5,478
Other
2,942
3,636
Reinsurance
4,394
4,676
Agents
5,848
9,856
10,193
2018
23,184
Deferred sales inducements
Present value of future profits
Total
Subtotal
Life/Health
Property-Casualty
Deferred acquisition costs
As of 31 December
Deferred acquisition costs
Changes in deferred acquisition costs
€ mn
Reinsurance involves credit risk and is subject to aggregate loss
limits. Reinsurance does not legally discharge the respective Allianz
company from primary liability under the reinsured policies. Although
the reinsurer is liable to this company to the extent of the business
The reserves for loss and loss adjustment expenses ceded to reinsurers
in the business segment Property-Casualty amounted to € 9,496 mn
(2018: € 8,966 mn) as of 31 December 2019. Their change is shown in
the respective table in note 14.
€ mn
4,887
5,260
Carrying amount as of 31 December
(19)
66
The Allianz Group reinsures a portion of the risks it underwrites in
an effort to control its exposure to losses and events and to protect its
capital resources. For natural catastrophe events, the Allianz Group
has a centralized program in place that pools exposures from its sub-
sidiaries by internal reinsurance agreements. Allianz SE limits expo-
sures in this portfolio through external reinsurance. For other risks, the
subsidiaries of the Allianz Group have individual reinsurance programs
in place. Allianz SE participates with up to 100% on an arm's length
basis in these cessions, in line with local requirements. The risk coming
from these cessions is also limited by external retrocessions.
Carrying amount as of 1 January
Additions
Changes in the consolidated subsidiaries of the Allianz Group
Foreign currency translation adjustments
Changes in shadow accounting
Amortization
Carrying amount as of 31 December
27,709
2019
27,709
24,777
383
295
803
351
26,523
24,130
21,727
19,195
4,796
4,936
2018
2019
Annual Report 2019 - Allianz Group
Changes recorded in the consolidated income statement
Other changes
1
124
Annual Report 2019 - Allianz Group
1,115
1,082
Payable on demand and other deposits
2018
2019
As of 31 December
€ mn
Repurchase agreements and collateral received from securities
Liabilities to banks and customers
In the Corporate and Other business segment, a sensitivity analy-
sis was performed with respect to interest rates. The analysis has shown
that in case of an increase in the interest rates by 50 basis points and
under consideration of a holding period usual for the asset class, the
recoverable amount approximates its carrying value.
In the Life/Health business segment, sensitivity analyses were per-
formed based on MCEV sensitivity testing on the reference rate. The
analyses have shown that in case of a decrease in reference rates by
50 basis points, the appraisal value of each CGU still exceeds its carry-
ing amount.
For the CGUS in the Property-Casualty business segment and for
the CGU Asset Management, sensitivity analyses were performed with
respect to the long-term sustainable combined ratios and cost-income
ratios. For all CGUs discounted earnings, value sensitivities still ex-
ceeded their respective carrying amounts - though for the CGU Insur-
ance Asia in the business segment Property-Casualty, an increase of
0.5% points in the discount rate and/or the combined ratio results in
the recoverable amount of the CGU getting close to its respective car-
rying value.
Sensitivity analyses were performed with regard to discount rates and
key value drivers of the business plans.
SENSITIVITY ANALYSIS
For the Digital Investments included in the Corporate and Other
business segment, the bases for determining the values assigned to
the key assumptions are current market trends and earnings projec-
tions. The discount rate and the eternal growth rates are calculated in
line with market practice and are subject to company-specific factors,
its development status and the markets in which the company oper-
ates.
For entities included in the CGU of the Asset Management busi-
ness segment, key assumptions include assets under management
growth, cost-income ratio, and risk capital. The key assumptions are
based on the current market environment. The discount rate for the
CGU Asset Management is 10.6% and the eternal growth rate is 1.6%.
12_Liabilities to banks and customers
The new-business value calculation is based on a best estimate of one
year of value of new business, multiplied by a factor (multiple) to cap-
ture expected future new business. The best estimate of new business
is generally derived from the achieved value of new business. The new
business multiple accounts for the risk and the growth associated with
future new business in analogy to the discount rate and the growth
rate in a discounted earnings method. For all CGUS in the Life/Health
business segment, a multiple of not more than ten times the value of
new business is applied.
lending transactions and derivatives
4,173
20,022
2018
2019
Total
As of 31 December
Property-Casualty
Life/Health
Consolidation
€ mn
Unearned premiums
4,551
13 Unearned premiums
1_For the year ended 31 December 2019, € 1.9 bn of liabilities to banks and customers related to some saving contracts
were reclassified to aggregate policy reserves.
14,222
13,445
Total²
8,934
7,812
Other¹
2_Consists of liabilities to banks and customers due within one year of € 11,914 mn (2018: € 12,653 mn), 1-5 years of
€ 898 mn (2018: € 819 mn) and over 5 years of € 633 mn (2018: € 750 mn).
17,784
Local swap curve minus 13 bps credit risk adjustment plus 28 bps volatility
adjustment
For those entities reporting in Euro:
D_Consolidated Financial Statements
Annual Report 2019 - Allianz Group
126
For entities included in the CGUS of the Life/Health business segment,
the MCEV is the excess of assets over liabilities of the MVBS according
to the Solvency II requirements. Assets and liabilities included in the
MVBS are measured at their market value as of the reporting date.
1_The table provides an overview of weighted key parameters on CGU level of the country-specific discount rates and
eternal growth rates used.
0.5
7.9
Technical provisions are an essential part of the liabilities included in
the MVBS and generally consist of the best estimate plus a risk margin.
The best estimate corresponds to the probability-weighted average of
future cash flows considering the time value of money, using the rele-
vant risk-free interest rate term structure. The calculation of the best
estimate is based on assumptions made for demographic factors (e.g.
mortality, morbidity, lapse/surrender rates), expense allowances, tax-
ation, assumptions on market conditions for market consistent projec-
tions (e.g. reference rates, volatilities) as well as investment strategy
and asset allocation of the entity. The risk margin ensures that the
value of the technical provisions is equivalent to the amount that the
entity would be expected to require in order to take on and meet the
insurance and reinsurance obligations.
1.0
Specialty Lines I
Specialty Lines II
1.4
8.9
Global Insurance Lines & Anglo Markets, Middle East and
Africa
1.0
8.6
2.1
7.7
Euro swap curve minus 10 bps credit risk adjustment plus 7 bps volatility
adjustment
Reference rates used for the calculation of the best estimate fol-
Low EIOPA specifications for the Solvency II guidance.
Reference rates for the CGUS in the Life/Health business segment
Local swap curve minus 10 bps credit risk adjustment plus volatility
adjustment for the following currencies only (CZK: 12 bps, HUF: 1 bps,
PLN: 8 bps)
For other entities:
Euro swap curve minus 10 bps credit risk adjustment plus 7 bps volatility
adjustment
For those entities reporting in Euro:
Euro swap curve minus 10 bps credit risk adjustment plus 7 bps volatility
adjustment
For those entities reporting in Euro:
CHF swap curve minus 10 bps credit risk adjustment plus 5 bps volatility
adjustment
The following table provides an overview of the reference rates
for the CGUS in the Life/Health business segment:
Euro swap curve minus 10 bps credit risk adjustment plus 7 bps volatility
adjustment
Reference rate for entities
& Anglo Markets,
Middle East and Africa
US Life Insurance
Global Insurance Lines
Insurance Central &
Eastern Europe
Insurance Western &
Southern Europe
Insurance German
Speaking Countries
CGUS in the Life/Health
business segment
with Appraisal Value based on MCEV
5,472
5,128
(26)
33,845
(2,670)
36,515
35,959
(2,915)
38,874
56,314
(801)
(9,874)
56,358
(9,240)
65,598
3,809
(287)
4,096
3,883
66,189
(274)
(258)
(2,905)
2,546
(17,905)
(17,084)
775
(17,859)
(18,105)
596
(1,059)
(18,701)
(1,746)
33,610
34,900
(3,173)
38,073
(1,981)
924
31,864
4,157
52,505
(9,587)
Prior years
Current year
Loss and loss adjustments expenses incurred
Subtotal
Balance carry forward of discounted loss reserves
As of 1 January
€ mn
Subtotal
Change in the reserves for loss and loss adjustment expenses in the Property-Casualty business segment
14 Reserves for loss and loss adjustment
expenses
D_Consolidated Financial Statements
127
Annual Report 2019 - Allianz Group
22,891
25,468
(21)
As of 31 December 2019, the reserves for loss and loss adjustment ex-
penses of the Allianz Group totaled € 77,541 mn (2018: € 73,054mn).
The following table reconciles the beginning and ending reserves for
the Property-Casualty business segment for the years ended 31 De-
cember 2019 and 2018.
Loss and loss adjustments expenses paid
Current year
Prior years
62,093
52,475
(8,966)
61,442
Net
Ceded
Gross
Net
Ceded
Gross
2018
2019
As of 31 December
Ending balance of discounted loss reserves
Changes in the consolidated subsidiaries of the Allianz Group
Subtotal
Foreign currency translation adjustments and other changes¹
Subtotal
10.5
Insurance Iberia & Latin America
Insurance Central & Eastern Europe
5.6
12.1
Insurance German Speaking Countries, including Germany and
Switzerland,
CGUS in the Property-Casualty business segment are:
For the purpose of impairment testing, the Allianz Group has allocated
goodwill to CGUS¹. These CGUS represent the lowest level at which
goodwill is monitored for internal management purposes.
ALLOCATION PRINCIPLES
IMPAIRMENT TEST FOR GOODWILL
Additions are mainly related to goodwill arising from the acquisition of
Servicios Compartidos Multiasistencia S.L., Madrid.
2018
Insurance Western & Southern Europe, including Belgium, France,
Greece, Italy, Luxembourg, the Netherlands, and Turkey,
Insurance Asia,
Additions are mainly related to goodwill arising from the acquisitions
of Liverpool Victoria General Insurance Group Limited, Guildford and
Legal & General Insurance Limited, Guildford.
292
12,622
13,499
292
Accumulated impairments as of 31 December
Cost as of 31 December
13,207
Carrying amount as of 31 December
Impairments
2019
Foreign currency translation adjustments
Insurance Iberia & Latin America, including Mexico, Portugal,
South America and Spain,
Global Insurance Lines & Anglo Markets, Middle East and Africa
including Australia, Ireland, the United Kingdom, Middle East and
Africa,
€ mn
1,798
The carrying amounts of goodwill are allocated to the
Allianz Group's CGUS as of 31 December 2019 and 2018 as follows:
D_Consolidated Financial Statements
125
Annual Report 2019 - Allianz Group
1_The following paragraphs only include the CGUS that contain goodwill.
Insurance Central & Eastern Europe, including Austria, Bulgaria,
Croatia, Czech Republic, Hungary, Poland, Romania, Russia,
Slovakia, and Ukraine,
The business segment Corporate and Other mainly includes Digi-
tal Investments.
US Life Insurance.
Global Insurance Lines & Anglo Markets, Middle East and Africa
including Australia, Ireland, the United Kingdom, Middle East and
Africa, and
Insurance Western & Southern Europe, including Belgium, France,
Greece, Italy, Luxembourg, the Netherlands, and Turkey,
Insurance Central & Eastern Europe, including Austria, Bulgaria,
Croatia, Czech Republic, Hungary, Poland, Romania, Russia,
Slovakia, and Ukraine,
Insurance German Speaking Countries, including Germany and
Switzerland
CGUS in the Life/Health business segment are:
Specialty Lines II, including Allianz Partners and Allianz Direct.
Specialty Lines I, including Allianz Re, Allianz Global Corporate &
Specialty and Credit Insurance, and
The business segment Asset Management is represented by the CGU
Asset Management, mainly including Allianz Global Investors and
PIMCO.
12,330
123
70
991
815
598
12,330
2018
2019
13,207
621
Total
Distribution agreements¹
Goodwill
As of 31 December
€ mn
Intangible assets
11 Intangible assets
D_Consolidated Financial Statements
Other²
14,796
13,767
1 Primarily includes the long-term distribution agreement with Commerzbank AG.
2_Primarily include acquired business portfolios, customer relationships, heritable building rights, land use rights, lease
rights, renewal rights, and brand names.
Disposals
359
807
Additions
(440)
11,848
12,330
Carrying amount as of 1 January
(292)
Accumulated impairments as of 1 January
12,288
12,622
Cost as of 1 January
2018
2019
€ mn
Goodwill
GOODWILL
As of 31 December
Right-of-use
assets
PROPERTY-CASUALTY
Insurance Western & Southern Europe
The recoverable amounts for all CGUS are determined on the basis of
value in use calculations. The Allianz Group applies generally acknowl-
edged valuation principles to determine the value in use.
12,330
13,207
97
VALUATION TECHNIQUES
Total
CORPORATE AND OTHER
For all CGUS in the Property-Casualty business segment and for
the CGU Asset Management, the Allianz Group mainly uses the dis-
counted earnings method to derive the value in use. Generally, the
basis for the determination of the discounted earnings value is the
business plan ("detailed planning period") as well as the estimate of
the sustainable returns and eternal growth rates, which can be as-
sumed to be realistic on a long-term basis ("terminal value") for the
operating entities included in the CGU. The discounted earnings value
is calculated by discounting the future earnings using an appropriate
discount rate. The business plans applied in the value in use calcula-
tions are the results of the structured management dialogues between
the Board of Management of Allianz SE and the operating entities in
connection with a reporting process integrated into these dialogues.
Generally, the business plans comprise a planning horizon of three
years and are based on the current market environment.
ASSET MANAGEMENT
7,515
2,104
2,117
Subtotal
467
470
US Life Insurance
7,423
16
The terminal values are largely based on the expected profits of
the final year of the detailed planning period. Where necessary, the
planned profits are adjusted to reflect long-term sustainable earnings.
The financing of the assumed eternal growth in the terminal values is
accounted for by appropriate profit retention.
point for the impairment test for the CGUS in the Life/Health business
segment, the Market Consistent Embedded Value (MCEV) and a mul-
tiple of the Market Consistent Value of New Business is used. MCEV is
an industry-specific valuation method to assess the current value of the
in-force portfolio. The Allianz Group uses an economic balance sheet
approach to derive the MCEV, which is directly taken out of the market
value balance sheet (MVBS) as determined using Solvency II guid-
ance. In case where no adequate valuation reflecting a long-term view
in line with management judgment and market experience could be
derived from market-consistent methodology, the Appraisal Value can
be derived from a Traditional Embedded Value (TEV). This was the
case for the CGU US Life Insurance in 2019.
2.8
9.9
0.3
7.4
rate
Discount rate
Eternal growth
For all CGUS in the Life/Health business segment, the value in use
is based on an Appraisal Value method, which is derived from the
Embedded Value and new-business value calculation. As a starting
Insurance German Speaking Countries
Insurance Western & Southern Europe
Insurance Asia
%
Discount rates and eternal growth rates for the CGUS
in the Property-Casualty business segment¹
The discount rate is based on the capital asset pricing model
(CAPM) and appropriate eternal growth rates. The assumptions, in-
cluding the risk-free interest rate, market risk premium, segment beta,
and leverage ratio used to calculate the discount rates, are generally
consistent with the parameters used in the Allianz Group's planning
and controlling process. The discount rates and eternal growth rates
for the CGUs in the Property-Casualty business segment are as follows:
For entities included in the CGUS of the Property-Casualty busi-
ness segment, the business plans are mainly based on key assump-
tions including expense ratio, loss ratio, investment income, risk capital,
market share, premium rate changes, and taxes. The bases for deter-
mining the values assigned to the key assumptions are current market
trends and earnings projections.
In determining the business plans, certain key assumptions were made
in order to project future earnings.
SIGNIFICANT ASSUMPTIONS
In the Corporate and Other business segment, the Value in use for
in the Digital Investments is derived by using the discounted cash flow
and multiple method. Discounted cash flows are calculated based on
the companies' business plan as well as an estimate of sustainable re-
turns and eternal growth rates (Terminal Value). The discounted earn-
ings value is calculated by discounting the future earnings using an ap-
propriate discount rate. For the multiple method transactions and rev-
enues of comparable companies are used.
CGUS in the Property-Casualty business segment
16
Africa
Global Insurance Lines & Anglo Markets, Middle East and
Global Insurance Lines & Anglo Markets, Middle East and
311
300
Insurance Central & Eastern Europe
21
21
Insurance Iberia & Latin America
Africa
135
1,195
1,115
299
328
2018
2019
Insurance Asia
159
1,182
538
Specialty Lines I
45
56
Insurance Central & Eastern Europe
631
628
Insurance Western & Southern Europe
946
Insurance German Speaking Countries
946
2,803
265
LIFE/HEALTH
Subtotal
3,479
38
38
336
Specialty Lines II
Insurance German Speaking Countries
Annual Report 2019 - Allianz Group
312
155
(3)
(905)
(947)
(15)
(49)
(339)
(398)
(10)
(94)
(2)
(9)
(355)
(176)
(9)
(13)
(13)
(104)
(16)
(778)
2,656
1,992
(2,696)
(2,776)
10
1
443
355
(1,113)
(593)
10,399
11,077
(74)
(3)
(1,736)
(1,549)
2,515
(664)
1,922
(24)
(840)
76
67
107
(7)
2
19
12
156
11,512
(64)
(831)
(602)
2,530
2,704
(6)
(6)
11,855
(24)
(5)
1,104
(813)
(840)
(813)
(22)
2
443
630
(3)
(10)
38
(17)
(575)
(581)
(137)
(105)
951
(3)
(1,194)
(1,294)
(2)
1,826
1,159
24,058
25,177
Global Insurance Lines & Anglo Markets, Middle East and Africa
320
274
982
498
10,741
12,547
Iberia & Latin America and Allianz Partners
1,339
1,083
1,776
1,518
457
12,513
1,448
(6,808)
1,649
28,758
34,380
German Speaking Countries and Central & Eastern Europe
4,302
3,983
5,725
Consolidation
5,045
59,156
Total Property-Casualty
(13)
20
(16)
28
(7,426)
55,401
12,320
Western & Southern Europe and Asia Pacific
1,207
241
387
7,914
(63)
(2)
(1,230)
(64)
(1,237)
7,462
43
73
Annual Report 2019 - Allianz Group
1,907
85
7,703
8,302
(63)
1,848
119
D_Consolidated Financial Statements
RECONCILIATION OF REPORTABLE SEGMENTS TO ALLIANZ GROUP FIGURES
1,624
1,641
1,884
15,514
15,919
German Speaking Countries and Central & Eastern Europe
2018
2019
2018
2019
2018
2019
Net income (loss)
Operating profit (loss)
Total revenues
€ mn
Reconciliation of reportable segments to Allianz Group figures
1
1
(59)
(28)
2019
2018
2019
2018
2019
2018
2019
7,164
Group
Corporate and Other
Asset Management
D_Consolidated Financial Statements
(15,246)
(36,606)
3,141
(33,465)
Consolidation
(34,903)
6,732
275
1
21,616
22,433
(220)
(157)
513
458
239
14
71,472
75,914
132,283
2018
142,369
(575)
(616)
270
2,573
(32,330)
895
274
(3,883)
65,414
(9,496)
55,918
61,442
(8,966)
(4,157)
52,475
Prior years' net loss and loss adjustment expenses incurred reflect the
changes in estimation charged or credited to the consolidated
income statement in each year with respect to the reserves for loss and
loss adjustment expenses established as of the beginning of that year.
During the year ended 31 December 2019, the Allianz Group recorded
additional income of € 1,059 mn (2018: € 1,981 mn) net in respect of
losses occurring in prior years. During the year ended 31 Decem-
ber 2019, this amount, expressed as a percentage of the net balance
of the beginning of the year, was 1.9 % (2018: 3.5%).
CHANGES IN HISTORICAL RESERVES
FOR LOSS AND LOSS ADJUSTMENT EXPENSES (LAE)
The analysis of loss and LAE reserves by actuaries and management is
conducted by line of business and separately for specific claim types
such as asbestos and environmental claims. The origin year of losses is
taken into consideration by analyzing each line of business by accident
year. While this determines the estimates of reserves for loss and LAE
by accident year, the effect in the consolidated income statement in
the respective calendar year combines the accident year loss ratio for
the current year with the favorable or adverse development from prior
years (run-off).
Although discounted loss reserves have been reclassified to
"Reserves for insurance and investment contracts" in the balance
sheet, the underlying business development of these non-life reserves
is still considered in the loss ratio. Therefore the tables below show the
loss development by accident year including the business develop-
ment of discounted loss reserves.
The run-off triangle, also known as the "loss triangle", is a tabular
representation of loss-related data (such as payments, loss reserves,
ultimate losses) in two time-related dimensions. One of these is the cal-
endar year, the other is the accident year (year of loss occurrence).
Run-off triangles - as the basis for measuring loss reserves - express
how the loss reserves change over the course of time due to payments
made and new estimates of the expected ultimate loss at the respec-
tive reporting date.
The data is only presented on a net basis, as this is considered to
be more meaningful in order to represent the retained impact on
Group results. The run-off triangles are not prepared on a currency-ad-
justed basis. This means all figures are translated from the respective
local currency into the Allianz Group presentation currency (Euro), con-
sistently using the exchange rates applicable at the respective report-
ing date. This ensures that the reserves reconcile with reserves in the
consolidated balance sheet.
1_Include effects of foreign currency translation adjustments for prior year's claims of gross € 493 mn (2018: € 26 mn) and of net € 391 mn (2018: € (70) mn) and for current year claims of gross € 31 mn (2018: € (44) mn) and of net € 40 mn (2018:
€ (41) mn).
(4,204)
348
(4,552)
(91)
803
567
(125)
442
2,006
(480)
1,526
135
(68)
67
69,965
(9,844)
60,122
65,598
(9,240)
56,358
5
1,620
47
(1)
(2)
(2)
(9,662)
(13,728)
(78)
29
(52,157)
(2)
(55,851)
4
24
158
(34)
(1)
4
1
4
11
(2)
(4,202)
(20)
(21)
(4,302)
(4,509)
1,983
2,143
(2,134)
(4,460)
(2,106)
(1,864)
(24,600)
(26,223)
(50)
(61)
(1,171)
(1,134)
(1,749)
1
11,534
12,296
(1,243)
(195)
(297)
214
156
(198)
(153)
(2,577)
(11)
5,146
6,172
40
(29)
(3,368)
(1,717)
8
(29)
(102)
(94)
625
(2,472)
(2,709)
2,231
2,390
8,462
9,035
19,289
23,854
582
595
241
250
8
(9)
(1,333)
(1,494)
540
20
(1)
1,132
Western & Southern Europe and Asia Pacific
Unrealized
2018
2019
As of 31 December
€ mn
Held-to-maturity investments
HELD-TO-MATURITY INVESTMENTS
Amortized cost
1_As of 31 December 2019, fair value and amortized cost of bonds from countries with a rating below AA amount to € 84,788 mn (2018: € 71,260 mn) and € 74,997 mn (2018: € 68,667 mn), respectively.
2_As of 31 December 2019, fair value and amortized cost of debt securities with a contractual maturity of less than one year amount to € 35,645 mn (2018: € 31,226 mn) and € 34,333 mn (2018: € 29,873 mn), respectively.
(6,928)
38,451
489,089
593,178
51,413
(888)
9,246
520,612
43,055
gains
2,347
44
249
Fair value
losses
(46)
189
2,538
gains
Government and government agency bonds
Corporate bonds¹
Amortized cost
55
241
2,589
Total²
Unrealized
Unrealized
Unrealized
losses
(1)
245
Fair value
2,591
296
300
64,805
74,341
6,721
Other
24,035
(434)
202
24,267
28,453
1,465
(61)
27,752
MBS/ABS
197,531
(1,669)
19,106
180,094
223,400
762
(255)
(1,273)
(30)
5,376
16,337
48,723
520,110
Total
Equity securities
469,199
(6,040)
29,205
8,156
446,034
(1,018)
58,004
471,387
Subtotal²
6,442
(14)
1,080
528,373
(2)
2,887
2,787
16,390
3,158
3,341
12,455
13,049
Carrying amount as of 31 December
Accumulated depreciation as of 31 December
Cost as of 31 December
15
15,613
11
(33)
(250)
(266)
76
98
153
65
(16)
(316)
Impairments
FIXED ASSETS FROM ALTERNATIVE INVESTMENTS
83
2,488
2,514
(597)
(726)
3,086
3,240
Reversals of impairments
2018
Foreign currency translation adjustments
Depreciation
Impairments
Reclassifications
Changes in the consolidated subsidiaries of the Allianz Group
Disposals
Carrying amount as of 1 January
Additions
Accumulated depreciation as of 1 January
Cost as of 1 January
Fixed assets from alternative investments
€ mn
2019
(570)
343
118
Based on a detailed analysis of the underlying securities, the
Allianz Group did not consider these investments to be impaired as of
31 December 2019.
The main impact from unrealized losses on corporate bonds
comes from the financial, consumer and energy sector.
For the majority of corporate bonds, the issuer/issues have an
investment-grade rating. The decrease in unrealized losses of
€3,569 mn compared to 31 December 2018 is due to decreasing inter-
est rates.
The unrealized losses on the Allianz Group's investments in
government and government agency bonds are spread over several
countries, with the main part coming from Europe.
In general, the credit risk of government and government agency
bonds is rather moderate since they are backed by the fiscal capacity
of the issuers, who typically hold an investment-grade country- and/or
issue-rating. During 2019, interest rates of most government and
government agency bonds held by Allianz Group decreased. This de-
velopment, supported by purchases and realizations, led to a de-
crease in unrealized losses on government and government agency
bonds of € 1,141 mn.
Total unrealized losses amounted to € 1,020 mn as of 31 Decem-
ber 2019. The Allianz Group holds a large variety of government and
government agency bonds and corporate bonds, mostly of or dom-
iciled in OECD countries.
DEBT SECURITIES
EQUITY SECURITIES
UNREALIZED LOSSES ON AVAILABLE-FOR-SALE
INVESTMENTS AND HELD-TO-MATURITY
INVESTMENTS
121
Annual Report 2019 - Allianz Group
2_As of 31 December 2019, fair value and amortized cost of debt securities with a contractual maturity of less than one year amount to € 215 mn (2018: € 408 mn) and € 212 mn (2018: € 400 mn), respectively.
1_Also include corporate mortgage-backed securities.
2,681
292
2,973
(46)
232
D_Consolidated Financial Statements
As of 31 December 2019, unrealized losses amounted to € 255 mn, a
decrease of € 633 mn compared to 31 December 2018. They concern
equity securities that did not meet the criteria of the
Allianz Group's impairment policy for equity instruments as described
in note 2. The major part of these unrealized losses has been in a con-
tinuous loss position of less than 6 months.
INVESTMENTS IN ASSOCIATES AND JOINT VENTURES
As of 31 December 2019, loans to associates and joint ventures
amounted to € 2,256 mn (2018: € 2,179 mn).
Associates and joint ventures
1,031
1,171
11,419
12,455
(2,967)
(3,158)
14,386
15,613
2018
2019
Foreign currency translation adjustments
Depreciation
Changes in the consolidated subsidiaries of the Allianz Group
Disposals and reclassifications into non-current assets and
assets of disposal groups classified as held for sale
Reclassifications
Accumulated depreciation as of 1 January
Carrying amount as of 1 January
Additions
Cost as of 1 January
Real estate held for investment
€ mn
REAL ESTATE HELD FOR INVESTMENT
€ mn
(573)
34,743
189,229
Government and government agency bonds¹
(1,294)
(1,194)
(831)
(602)
275
239
Group
(64)
Consolidation
1,922
1,992
2,530
2,704
6,732
7,164
Asset Management
Corporate and Other
2,837
(2)
(616)
€ mn
Investments
6_ Investments
at fair value through income
Financial assets carried
5
NOTES TO THE CONSOLIDATED BALANCE SHEET
(63)
Annual Report 2019 - Allianz Group
7,703
8,302
11,512
11,855
132,283
142,369
(575)
120
3,523
4,152
4,708
10,832
12,265
USA
235
235
286
267
1,153
1,873
Iberia & Latin America
823
1,235
1,359
1,620
29,335
28,053
1,653
852
1,006
664
70,450
76,426
Total Life/Health
(12)
(30)
(14)
(40)
(1,059)
(810)
Consolidation and Other
29
(55)
49
59
711
885
Global Insurance Lines & Anglo Markets, Middle East and Africa
As of 31 December
1,097
D_Consolidated Financial Statements
2019
2018
2019
As of 31 December
€ mn
Available-for-sale investments
AVAILABLE-FOR-SALE INVESTMENTS
7,611
Unrealized
13,187
4,258
5,620
Subtotal
1,982
2,616
Equity securities
2,276
Total
3,005
Amortized cost
Unrealized
losses
241,192
(3,923)
8,818
236,297
268,363
(354)
21,033
gains
247,684
Debt securities
Fair value
Unrealized
losses
gains
Amortized cost
Fair value
Unrealized
Corporate bonds
Debt securities
Financial assets designated at fair value through income
550,923
431
Debt securities
732
752
Funds held by others under reinsurance contracts assumed
2,787
2,589
421
Held-to-maturity investments
2019
2018
520,612
593,178
Available-for-sale investments
Financial assets held for trading
As of 31 December
€ mn
2018
Investments in associates and joint ventures
13,462
11,823
625,746
Total
3,353
7,566
Subtotal
2,514
2,716
Fixed assets from alternative investments
2,729
6,884
Derivative financial instruments
12,455
13,049
Real estate held for investment
203
251
Equity securities
Financial assets carried at fair value through income
(15,360)
(17,044)
29,560
115,361
515,537
(4,508)
(4,898)
705,072
132,168
572,904
Total
1,844
284
1,560
2,008
366
1
(4,508)
630,898
(4,898)
Global Insurance Lines & Anglo Markets, Middle East and Africa
Consolidation and Other
117,736
20,610
97,127
128,651
21,944
106,706
USA
10,279
870
9,409
9,560
1,642
Annual Report 2019 - Allianz Group
131
D_Consolidated Financial Statements
€ bn
%
reserves
rate
reserves
rate
Aggregate
policy
Guaranteed
Aggregate
policy
Guaranteed
2019
For contracts without fixed and determinable payments, the
Allianz Group has made assumptions in estimating the undiscounted
cash flows of contractual policy benefits including mortality, morbidity,
interest crediting rates, policyholder participation in profits, and future
lapse rates. These assumptions represent current best estimates and
may differ from the estimates used to establish the reserves for insur-
ance and investment contracts in accordance with the Allianz Group's
established accounting policy. Due to the uncertainty of the assump-
tions used, the amount presented could be materially different from
the actual incurred payments in future periods.
The resulting total benefits for insurance and investment contracts
in the amount of € 1,457 bn include contracts where the timing and
amount of payments are considered fixed and determinable, as well
as contracts which have no specified maturity dates and may result in
a payment to the contract beneficiary, depending on mortality and
morbidity experience and the incidence of surrenders, lapses, or ma-
turities. Furthermore, the amounts are undiscounted and do not in-
clude any expected future premiums; therefore they significantly ex-
ceed the reserves for insurance and investment contracts presented in
the consolidated balance sheet.
As of 31 December 2019, benefits for insurance and investment con-
tracts which are expected to be due in 2020 amounted to € 61 bn,
while those expected to be due between 2021 and 2024 amounted to
€ 202 bn and those expected to be due after 2024 amounted to
€ 1,194 bn.
FUTURE POLICY BENEFITS
Underwriting risk in the section Quantifiable risks and opportuni-
ties by risk category.
Risk based steering and risk management,
Internal risk capital framework,
Further risk disclosure requirements of IFRS 4 in connection with
IFRS 7 are reflected in the following sections of the Risk and Oppor-
tunity Report within the Group Management Report:
In most of these markets, the effective interest rates earned on the in-
vestment portfolio exceed these guaranteed minimum interest rates.
In addition, the operations in these markets may also have significant
mortality and expense margins. However, the Allianz Group's
Life/Health operations in Switzerland and Belgium have high guaran-
teed minimum interest rates on older contracts in their portfolios and,
as a result, may be sensitive to declines in investment rates or a pro-
longed low interest rate environment.
2018
As of 31 December
Weighted average guaranteed minimum interest rates of life
insurance entities
The Allianz Group's Life/Health business segment is exposed to
significant investment risk as a result of guaranteed minimum interest
rates being included in most of its non-unit-linked contracts. The
weighted average guaranteed minimum interest rates of the
Allianz Group's largest operating entities in the business segment
Life/Health, comprising 86% (2018: 86%) of the aggregate policy re-
serves in this business segment in 2019, can be summarized by country
as follows:
As a result of the considerable diversity in types of contracts is-
sued, including the offsetting effects of mortality risk and longevity risk
inherent in a combined portfolio of life insurance and annuity products,
the geographic diversity of the Allianz Group's Life/Health business
segment and the substantial level of policyholder participation in mor-
tality/morbidity risk in certain countries in Western Europe, the
Allianz Group does not believe its Life/Health segment has any signifi-
cant concentrations of insurance risk, nor does it believe its net income
or shareholders' equity is highly sensitive to insurance risk.
Furthermore, all of the Allianz Group's annuity policies issued in
the United States meet the criteria for classification as insurance con-
tracts under IFRS 4 because they include options for contract holders
to elect a life-contingent annuity. These contracts currently do expose
the Allianz Group to a certain longevity risk, however, adverse devel-
opments can be counteracted by using the flexible crediting options
on the in-force book. Additionally, many of the Allianz Group's tradi-
tional contracts issued in France and Italy do not incorporate signifi-
cant insurance risk, although they are accounted for as insurance con-
tracts because of their discretionary participation features. Similarly, a
significant portion of the Allianz Group's unit-linked contracts in France
and Italy do not incorporate significant insurance risk.
The majority of the Allianz Group's Life/Health business segment oper-
ations are conducted in Western Europe. Insurance laws and regula-
tions in Europe have historically been characterized by legal or con-
tractual minimum participation of contract holders in the profits of the
insurance company issuing the contract. In particular, life insurance
business in Germany, Switzerland, and Austria, which comprises ap-
proximately 52% (2018: 50 %) of the Allianz Group's reserves for insur-
ance and investment contracts as of 31 December 2019, includes a
substantial level of policyholder participation in all sources of profit,
including mortality/morbidity, investment, and expense. As a result of
this policyholder participation, the Allianz Group's exposure to insur-
ance, investment and expense risk is mitigated.
1,203
8,358
Iberia & Latin America
202,005
1_They partly relate to insurance contracts, when policyholders change their contract from an unit-linked to an universal
life-type contract. Furthermore, for the year ended 31 December 2019, € 1.9 bn related to some saving contracts were
reclassified from liabilities to banks and customers to aggregate policy reserves.
(1,515)
(1,058)
4,157
466,406
4,552
497,558
As of 31 December
Ending balance of discounted loss reserves
1,328
462,249
493,006
Subtotal
3,560
Other changes¹
68
Portfolio acquisitions and disposals
(1,714)
Policyholder charges
1,558
(16,566)
(18,681)
Releases upon death, surrender, and withdrawal
1,626
Dividends allocated to policyholders
3,731
5,774
Interest credited
(38)
Separation of embedded derivatives
35,002
Premiums collected
CONCENTRATION OF INSURANCE RISK
%
IN THE LIFE/HEALTH BUSINESS SEGMENT
As of 31 December 2019 and 2018, the Allianz Group's reserves
for insurance and investment contracts for the business segment
Life/Health are summarized per reportable segment as follows:
83,904
118,101
224,052
97,241
126,811
Western & Southern Europe and Asia Pacific
303,542
9,693
293,849
345,699
11,414
334,285
German Speaking Countries and Central & Eastern Europe
Total
Financial
liabilities for
unit-linked
contracts
contracts
Total
investments
Reserves for
insurance and
Financial
liabilities for
unit-linked
contracts
investments
contracts
Reserves for
insurance and
2018
2019
As of 31 December
€ mn
Concentration of insurance risk in the Life/Health business segment per reportable segment
The Allianz Group's Life/Health business segment provides a wide vari-
ety of insurance and investment contracts to individuals and groups in
over 30 countries around the world. Individual contracts include both
traditional contracts and unit-linked contracts. Without taking policy-
holder participation into account, traditional contracts generally incor-
porate significant investment risk for the Allianz Group, while unit-linked
contracts generally result in the contract holder assuming the invest-
ment risk. Traditional contracts include life, endowment, annuity and
health contracts. Traditional annuity contracts are issued in both
deferred and immediate types. In addition, the Allianz Group's life insur-
ance operations in the United States issue a significant amount of
equity-indexed deferred annuities. In certain markets, the Allianz Group
also issues group life, group health and group pension contracts.
€ bn
Germany
2.0
Tax payables
425
425
8,186
9,288
1,652
1,760
1,655
2,103
4,880
5,425
Payables for social security
Subtotal
2018
2019
Agents
Reinsurance
Policyholders
Payables
As of 31 December
€ mn
Other liabilities
17 Other liabilities
2_Consists of € 82,584 mn (2018: € 71,586 mn) unit-linked insurance contracts and € 49,584 mn (2018: € 43,774 mn) unit-
linked investment contracts.
1 These reclassifications mainly relate to insurance contracts when policyholders change their contracts from an unit-
linked to an universal life-type contract.
115,361
132,168
Income taxes
As of 31 December²
1,773
Other taxes, interest, and penalties
2,079
1,957
Other provisions
335
322
Restructuring plans
383
429
Share-based compensation plans
2,779
2,849
Employee related
9,091
10,556
Pensions and similar obligations
Provisions
503
502
Unearned income
437
537
Accrued interest and rent
3,268
3,761
Subtotal
1,738
1,988
1,530
2,267
(1,596)
Reclassifications¹
2.2
8.4
2.0
Belgium
11.4
1.5
11.8
1.5
Switzerland
29.5
1.5
29.5
1.3
Italy
55.2
0.4
56.6
0.3
France
97.1
0.5
106.7
0.5
United States
190.2
2.2
205.5
8.6
(2,099)
132
16 Financial liabilities for unit-linked contracts
(57)
(40)
Portfolio acquisitions and disposals
(2,013)
(2,244)
Policyholder charges
(13,404)
(14,619)
Releases upon death, surrender, and withdrawal
(7,836)
15,584
Interest credited
20,351
19,516
Premiums collected
130
Changes in the consolidated subsidiaries of the Allianz Group
644
709
Foreign currency translation adjustments
119,141
115,361
As of 1 January
2018
2019
€ mn
Financial liabilities for unit-linked contracts
Annual Report 2019 - Allianz Group
Changes recorded in the consolidated income statement
Changes in the consolidated subsidiaries of the Allianz Group
2,893
%
%
%
€ mn
2014
2013
2012
2011
Premiums
earned (net)
Calendar year premiums earned and ultimate loss ratios for the individual accident years at the respective reporting date (net)
CALENDAR YEAR PREMIUMS EARNED AND ULTIMATE LOSS RATIOS FOR THE INDIVIDUAL ACCIDENT YEARS AT
THE RESPECTIVE REPORTING DATE (NET)
3_Presentation not meaningful.
note.
2_The total development 2019 to 2018 of € (361) mn represents the cumulative change from re-estimating the ultimate loss for prior year claims. Considering foreign currency translation adjustments of net € 391 mn as well as changes in the
consolidated subsidiaries of the Allianz Group and other changes of in total € 1,030 mn, this leads to an effective run-off of net € 1,059 mn, which can be found in the table "Change in reserves for loss and loss adjustment expenses" within this
1_Includes effects from foreign currency translation adjustments and other changes.
(361)
(193)
(475)
(24)
(87)
123
38
128
19
110
2019 versus 20182
Reduction/(increase)
%
10,657
Accident year
2015
%
2017
72.7
46,430
2015
70.0
70.3
68.9
72.9
43,759
2014
69.9
69.2
72.8
42,047
2013
72.0
74.2
41,705
2012
75.0
39,898
2011
%
%
%
%
2019
2018
2016
68.3
_3
(205)
31,888
29,896
28,837
28,076
28,577
73,818
2017
33,116
32,211
30,244
29,206
28,334
28,893
75,197
2016
32,649
30,560
29,490
28,498
28,990
75,848
2015
30,625
28,736
29,074
76,137
2014
32,705
(193)
33,242
73,646
934
848
1,083
681
2,264
1,472
3,773
Surplus¹
36,867
34,358
33,447
32,182
31,801
29,542
28,726
27,743
28,440
73,536
2019
34,165
32,972
32,158
31,713
29,665
28,764
27,871
28,459
2018
Subtotal
70.1
70.3
55,581
45,673
Foreign currency translation adjustments
707
As of 1 January
62,573
89,781
685
Latent reserves for premium refunds
466,406
497,558
698
16,901
17,508
600
As of 31 December
2018
2019
Changes
Changes in the consolidated subsidiaries of the Allianz Group
7
7
Foreign currency translation adjustments
16,196
16,901
As of 1 January
Amounts already allocated under local statutory
or contractual regulations
2018
2019
115
€ mn
85
529,687
Foreign currency translation adjustments
462,249
Subtotal
(4,157)
Balance carry forward of discounted loss reserves
440,926
466,406
As of 1 January
2019
1,274
2,051
29,367
5,250
(4,096)
436,830
2018
62,573
89,781
Total
45,673
72,273
As of 31 December
443
2,566
Changes due to valuation differences charged to income
(10,436)
23,919
Changes due to fluctuations in market value
Changes in the consolidated subsidiaries of the Allianz Group
588,023
69.8
Reserves for premium refunds
D_Consolidated Financial Statements
70.7
69.8
69.0
68.3
67.8
68.4
66.8
71.3
48,305
2018
70.4
70.2
68.7
68.3
68.6
67.3
71.6
47,242
2017
71.1
69.4
69.1
69.5
67.9
72.4
46,588
2016
2019
RESERVES FOR PREMIUM REFUNDS
51,328
66.5
€ mn
Aggregate policy reserves
AGGREGATE POLICY RESERVES
Total
Other insurance reserves
Reserves for premium refunds
Aggregate policy reserves
As of 31 December
€ mn
Reserves for insurance and investment contracts
15 Reserves for insurance and investment
contracts
amounted to € 22,258 mn and those expected to be due after 2024
amounted to € 19,565 mn.
Annual Report 2019 - Allianz Group
As of 31 December 2019, the reserves for loss and loss adjustment ex-
penses which are expected to be due in 2020 amounted to
€ 18,298 mn, while those expected to be due between 2021 and 2024
CONTRACTUAL CASH FLOWS
Risk based steering and risk management,
Underwriting risk in the section Quantifiable risks and opportuni-
ties by risk category.
Internal risk capital framework,
IN THE PROPERTY-CASUALTY BUSINESS SEGMENT
Further risk disclosure requirements of IFRS 4 in connection with IFRS 7
are reflected in the following sections of the Risk and Opportunity Re-
port within the Group Management Report:
CONCENTRATION OF INSURANCE RISK
The ultimate loss of an accident year comprises all payments made for
that accident year up to the reporting date, plus the loss reserves at
the reporting date. Given complete information regarding all losses in-
curred up to the reporting date, the ultimate loss for each accident-
year period would remain unchanged. In practice, however, the ulti-
mate loss (based on estimates) is exposed to fluctuations that reflect
the increase in knowledge regarding the loss cases. The loss ratio pre-
sented above deviates from the reported loss ratio because the ulti-
mate loss in the table above is based on the sum of the payments plus
the loss reserves, not the incurred loss as stated in the consolidated in-
come statement. This means that effects like changes in consolidated
subsidiaries, foreign currency translation and unwinding of discounted
loss reserves are presented differently.
71.8
71.1
70.8
69.1
68.5
67.5
68.3
71.3
29,407
16,114
Deposits retained for reinsurance ceded
The Allianz Group's insurance subsidiaries (including Allianz SE)
prepare individual financial statements based on local laws and regu-
lations. The local regulations establish additional restrictions on the
minimum level of capital and the amount of dividends that may be
paid to shareholders. The respective local minimum capital require-
ments are based on various criteria including, but not limited to, the
volume of premiums written or claims paid, amount of insurance re-
serves, investment risks, mortality risks, credit risks, and underwriting
risks.
The Allianz Group is a financial conglomerate within the scope of
the Financial Conglomerates Directive (FCD). The FCD does not
impose a materially different capital requirement on Allianz Group
compared to Solvency II.
acquisition of shares of Taikang and businesses of LV General Insur-
ance Group and Legal & General Insurance Limited. Unfavorable mar-
ket developments - predominantly characterized by lower interest
rates - as well as regulatory and model changes also contributed to
the reduction of the Solvency II ratio. Additional impacts such as taxes,
changes in transferability restrictions, and diversification effects were
broadly offsetting. For further information on Solvency II capitaliza-
tion, please refer to the section "Solvency II regulatory capitalization"
of the Risk and Opportunity Report.
Compared to year-end 2018, the Solvency II capitalization ratio
decreased by 17%-p to 212% (2018: 229 %) as the increase in Sol-
vency Il capital requirement was only partially offset by the increase in
Own Funds. Over the course of the year, Solvency II earnings combined
with business growth had a positive impact on the Solvency II capitali-
zation. This was supported by management actions such as asset
de-risking and mitigating measures that improved the interest rate risk
profile in the current low interest rate environment. However, the posi-
tive effects were partly offset by capital management activities such as
the share buy-back program and the dividend accrual as well as
The Allianz Group's Own Funds are composed of the eligible Own
Funds relating to the Group of internal model and standard formula
entities, the sectoral Own Funds of entities from other financial sectors,
as well as the equivalent Own Funds of entities included via the deduc-
tion and aggregation (D&A) method. The eligible Own Funds relating
to the Group of internal model and standard formula entities essen-
tially consist of the MVBS excess of assets over liabilities plus qualifying
subordinated liabilities, less deductions for foreseeable dividends as
well as further deductions relating for example, to tier limits or trans-
ferability restrictions.
With Solvency II being the regulatory regime relevant for the
Group as of 1 January 2016, the risk profile is measured and steered
based on the approved Solvency II internal model¹. The Allianz Group
has introduced a target Solvency ratio in accordance with Solvency II,
based on pre-defined stress scenarios for both the Group and related
undertakings, supplemented by ad-hoc scenarios, historical and re-
verse stress tests, and sensitivity analyses.
The Allianz Group's capital requirements primarily depend on the type
of business that it underwrites, the industry and geographic locations
in which it operates, and the allocation of the Allianz Group's invest-
ments. During the Allianz Group's annual planning and strategic dia-
logs with its related undertakings, internal capital requirements are
determined through business plans regarding the levels and timing of
capital expenditures and investments. These plans also form the basis
for the Allianz Group's capital management. Resilience under stress
conditions is also considered when determining the internal capital
requirements of the Group. The regulators impose minimum capital
requirements on the Group and its related undertakings. For further
details on how Allianz Group manages its capital, please refer to the
section "Target and strategy of risk management" of the Risk and Op-
portunity Report.
2,447
2,145
2,649
3,363
241
387
As of 31 December 2019, the Allianz Group believes that there are
no outstanding regulatory capital or compliance matters that would
have materially adverse effects on the financial position or the results
of operations of the Allianz Group.
326
61
2018
CAPITAL REQUIREMENTS
Total
Other equity components
Share of earnings
Unrealized gains and losses (net)
As of 31 December
€ mn
Non-controlling interests
NON-CONTROLLING INTERESTS
D_Consolidated Financial Statements
2019
Some insurance subsidiaries of the Allianz Group are subject to
regulatory restrictions on the amount of dividends that can be remitted
to Allianz SE without prior approval by the appropriate regulatory
body. Such restrictions require that a company may only pay dividends
up to an amount in excess of certain regulatory capital levels, or based
on the levels of undistributed earned surplus or current year income or
a percentage thereof. The Board of Management of the Allianz Group
believes that these restrictions will not affect the ability of Allianz SE to
pay dividends to its shareholders in the future.
1_From a formalistic perspective, the German Supervisory Authority deems the model to be "partial" because not all entities
are using the internal model. Some of the smaller entities report under the standard formula and others under the deduc-
tion and aggregation approach. Without loss of generality,the term internal model might be used in the following chapters,
e.g., in case descriptions also referring to entities that use the internal model, or descriptions focusing on processes with
respect to the internal model components.
Annual Report 2019 - Allianz Group
(5,547)
111
(602)
(5,056)
Ceded
82,919
(111)
25,820
57,210
Gross
2018
2019
Income from financial assets and liabilities
carried at fair value through income (net)
€ mn
Premiums written
2019
Group
Life/Health Consolidation
Casualty
Property-
and liabilities carried at fair value through
income (net)
22 Income from financial assets
€ mn
Premiums earned (net)
20 Premiums earned (net)
NOTES TO THE CONSOLIDATED INCOME STATEMENT
D_Consolidated Financial Statements
137
Annual Report 2019 - Allianz Group
136
All of the treasury shares acquired within the Share Buy-Back
Program 2019 have been redeemed according to the simplified pro-
cedure without reduction of the share capital.
In its meeting on 14 February 2019, the Board of Management of
Allianz SE resolved to carry out a share buy-back program in an
amount of up to € 1.5 bn within a period between 1 March 2019 and
31 December 2019 (Share Buy-Back Program 2019) based on the
authorization granted by the Annual General Meeting on 9 May 2018.
In the period between 4 March 2019 and 30 July 2019, a total of
7,286,802 treasury shares with a market value of € 1,499,999,871.33
were acquired for an average price of € 205.85.
D_Consolidated Financial Statements
135
Annual Report 2019 - Allianz Group
1_Mathematical per-share value € 2.80 (rounded).
In addition, Allianz SE has authorized capital (Authorized Capital
2018/11) for the issuance of new shares against contributions in cash
until 8 May 2023. The shareholders' subscription rights are excluded.
The new shares may only be offered to employees of Allianz SE and
its Group companies. As of 31 December 2019, the Authorized Capital
2018/11 amounted to € 15 mn.
As of 31 December 2019, Allianz SE had authorized capital with a no-
tional amount of € 335 mn for the issuance of new shares until
8 May 2023 (Authorized Capital 2018/1). The shareholders' subscrip-
tion rights can be excluded for capital increases against contribution
in kind. For a capital increase against contributions in cash, the share-
holders' subscription rights can be excluded: (i) for fractional
amounts, (ii) if the issue price is not significantly below the market
price and the shares issued under exclusion of the subscription rights
pursuant to § 186 (3) sentence 4 of the German Stock Corporation Act
(Aktiengesetz) do not exceed 10% of the share capital, and (iii) to
the extent necessary to grant a subscription right for new shares to
the holders of bonds that carry conversion or option rights or pro-
vide for mandatory conversion. The subscription rights for new shares
from the Authorized Capital 2018/1 and the Conditional Capital
2010/2018 may only be excluded for the proportionate amount of
the share capital of up to € 117 mn (corresponding to 10% of the
share capital at year-end 2019).
AUTHORIZED CAPITAL
Issued capital as of 31 December 2019 amounted to € 1,170 mn,
divided into 417,172,859 fully paid registered shares. The shares have
no-par value but a mathematical per-share value as a proportion of
the issued capital.¹
2,447
63,679
ISSUED CAPITAL
1_As of 31 December 2019, include € (55) mn (2018: € (84) mn) related to treasury shares.
2_As of 31 December 2019, include € 415 mn (2018: € 267 mn) related to cash flow hedges.
77,364
Total
3,363
Non-controlling interests
61,232
74,002
Subtotal
6,945
17,691
Unrealized gains and losses (net)²
(2,607)
(2,195)
Foreign currency translation adjustments
27,967
29,577
Retained earnings¹
CONDITIONAL CAPITAL
Income from financial assets and liabilities held for
trading (net)
As of 31 December 2019, Allianz SE had conditional capital totaling
€250 mn (Conditional Capital 2010/2018). This conditional capital in-
crease will only be carried out if conversion or option rights attached
to convertible bonds, bonds with warrants, convertible participation
rights, participation rights, and subordinated financial instruments
which Allianz SE or its Group companies have issued against cash pay-
ments according to the resolutions of the Annual General Meeting
(AGM) on 5 May 2010 or 9 May 2018, are exercised or the conversion
obligations under such bonds are fulfilled, and only to the extent that
the conversion or option rights or conversion obligations are not ser-
viced through treasury shares or through shares from authorized capi-
tal.
CHANGES IN THE NUMBER
SHARE BUY-BACK PROGRAM 2019
The treasury shares of Allianz SE and its subsidiaries represented
€ 1.7 mn (2018: € 2.7 mn) or 0.14% (2018: 0.23%) of the issued capital
as of 31 December 2019.
In the year ending 31 December 2019, the total number of treas-
ury shares of Allianz SE decreased by 365,959 (2018: decrease of
407,495), which corresponds to € 1,026,295.80 (2018: € 1,123,161.03)
or 0.09% (2018: 0.10%) of issued capital as of 31 December 2019.
In 2019, 365,959 (2018: 407,495) treasury shares were sold to em-
ployees of Allianz SE and its subsidiaries in Germany and abroad in the
context of the Employee Stock Purchase Plan. These shares were taken
from the stock of treasury shares dedicated to this purpose. In 2019,
as in the previous year, no capital increase for the purpose of Em-
ployee Stock Purchase Plans was undertaken. Employees of the
Allianz Group purchased approximately 75% of these shares at a ref-
erence price of € 210.21 per share and were allocated one additional
share per three shares purchased, which is equivalent to a discount of
approximately 25%. The shares were sold to employees at prices be-
tween € 157.66 and € 161.59 (2018: between € 137.57 and € 153.94).
As of 31 December 2019, the remaining treasury shares of Allianz SE
held for covering subscriptions by employees in the context of the
Employee Stock Purchase Plan of Allianz SE and its subsidiaries in
Germany and abroad amounted to 395,677 shares.
As of 31 December 2019, Allianz SE held 595,677 (2018: 961,636)
treasury shares. Of these, 395,677 (2018: 761,636) were held for
covering future subscriptions by employees in Germany and abroad in
the context of Employee Stock Purchase Plans, whereas
200,000 (2018: 200,000) were held as a hedge for obligations from the
Allianz Equity Incentive Program.
TREASURY SHARES
dividend by the date of the Annual General Meeting, the above pro-
posal will be amended accordingly and presented for resolution on the
appropriation of net earnings at the Annual General Meeting, with an
unchanged dividend of € 9.60 per each share entitled to dividend.
The proposal for appropriation of net earnings reflects the 595,677
treasury shares held directly and indirectly by the company as of
31 December 2019. Such treasury shares are not entitled to the divi-
dend pursuant to §71b of the German Stock Corporation Act (AktG).
Should there be any change in the number of shares entitled to the
Unappropriated earnings carried forward: € 481,140,722.53
Distribution of a dividend of € 9.60 per no-par share entitled to a
dividend: €3,999,140,947.20
PROPOSAL FOR APPROPRIATION OF NET EARNINGS
The Board of Management and the Supervisory Board propose that
the net earnings ("Bilanzgewinn") of Allianz SE of € 4,480,281,669.73
for the 2019 fiscal year shall be appropriated as follows:
423,498,025
961,636
424,459,661
1 Thereof 595,677 (2018: 961,636) own shares held by Allianz SE.
595,677
417,172,859
Total number of issued shares
Treasury shares¹
416,577,182
31 December
Number of issued shares outstanding as of
2018
438,879,929
408,081
(15,789,985)
423,498,025
365,959
(7,286,802)
Cancellation of issued shares
Changes in number of treasury shares
Number of issued shares outstanding as of 1 January
2019
Number of issued shares outstanding
OF ISSUED SHARES OUTSTANDING
Convertible subordinated notes totaling € 500 mn, which may be
converted into Allianz shares, were issued against cash in July 2011.
Within 10 years after the issuance a mandatory conversion of the
notes into Allianz shares at the then prevailing share price may apply
if certain events occur, subject to a floor price of at least € 74.90 per
share. Within the same period, investors have the right to convert the
notes into Allianz shares at a price of € 187.26 per share. Both conver-
sion prices are as of inception and subject to anti-dilution provisions.
The subscription rights of shareholders for these convertible notes
have been excluded with the consent of the Supervisory Board and
pursuant to the authorization of the AGM on 5 May 2010. The granting
of new shares to persons entitled under such convertible notes is se-
cured by the Conditional Capital 2010/2018. On or before 31 Decem-
ber 2019, there was no conversion of any such notes into new shares.
(2,709)
(4,372)
Net
3,879
Interest from loans to banks and customers
REALIZED LOSSES
13,370
13,936
Interest from available-for-sale investments
7,640
8,440
Subtotal
2,590
2,405
Dividends from available-for-sale investments
857
869
Other
2018
2019
6,783
7,571
Subtotal
3,166
4,467
Debt securities
€ mn
Interest and similar income
3,617
3,104
3,831
Equity securities
Available-for-sale investments
929
Annual Report 2019 - Allianz Group
138
6,096
7,276
Total
(1,543)
(1,163)
Subtotal
(142)
(181)
Other
(1,402)
(983)
Subtotal
(815)
(539)
Debt securities
21,616
22,433
Total
(586)
(444)
Equity securities
934
1,283
Other
892
Rent from real estate held for investment
27,758
Available-for-sale investments
21 Interest and similar income
(3,301)
(1,609)
Total
2018
1,212
741
Foreign currency gains and losses (net)¹
75,914
24,586
51,328
(net)
344
(199)
Income from financial liabilities for puttable financial
instruments (net)
Premiums earned
(1,458)
(632)
(826)
premiums (net)
(485)
557
designated at fair value through income (net)
Change in unearned
Income from financial assets and liabilities
77,372
25,218
52,154
Premiums written
REALIZED GAINS
1_These foreign currency gains and losses arise subsequent to initial recognition on all assets and liabilities denominated
Gross
2018
2019
€ mn
Realized gains/losses (net)
71,472
(1.211) 23 Realized gains/losses (net)
72,682
23,167
48,305
(net)
Premiums earned
(563)
(647)
premiums (net)
Change in unearned
23,730
48,952
Net
(5,141)
127
(585)
(4,683)
Ceded
77,824
(127)
24,315
53,636
in a foreign currency that are monetary items and not measured at fair value through income.
27,758
Additional paid-in capital
1,170
45
45
45
3.99%
10,449
10,170
10,170
4.75%
2,981
3,023
3,023
134
2_Includes the issuance of two € 0.75 bn certificated bonds in the first quarter of 2019 and the redemption of a € 1.5 bn certificated bond in the third quarter of 2019.
3_Includes a € 0.9 bn partial buyback and the redemption of CHF 0.5 bn subordinated bonds and the issuance of € 1.0 bn subordinated bonds in the third quarter of 2019.
4_Relates to hybrid equity issued by subsidiaries.
1 Except for interest rates. Interest rates represent the weighted average.
9,199
9,209
4,590
2,243
2,376
1.50%
1,163
1,124
1,124
0.17%
504
502
502
1.09%
2.09%
13,238
13,475
7 December 2020
50 bps
500
EUR
2017
DE000A19S4T0
3-months Euribor +
21 April 2020¹
0.000
750
EUR
2016
DE000A180B72
Maturity date
Coupon in %
Notional amount
Currency
Year of issue
ISIN
D_Consolidated Financial Statements
Allianz Finance II B.V., Amsterdam
Subordinated liabilities
Allianz SE, Munich
Allianz Finance II B.V., Amsterdam
Certificated liabilities
€ mn
Bonds outstanding as of 31 December 2019
Annual Report 2019 - Allianz Group
13,238
DE000A1GORU9
2.42%
7,533
Senior bonds
€ mn¹
Certificated and subordinated liabilities
18 Certificated and subordinated liabilities
D_Consolidated Financial Statements
133
D_Consolidated Financial Statements
Annual Report 2019 - Allianz Group
2_For further information regarding the first application of IFRS 16, please refer to note 2.
3_Includes other liabilities due within one year of € 31,982 mn (2018: € 27,001 mn).
1_Mainly level 2 for fair value measurement.
40,232
47,904
Total³
7,855
9,439
Other liabilities
2,791
Lease liabilities²
1,993
2,073
Financial liabilities for puttable financial instruments
330
532
criteria for hedge accounting, and firm commitments¹
Derivative financial instruments used for hedging that meet the
2,568
2,443
Fixed rate²
0.00%
Contractual interest rate
Current interest rate
7,583
4,590
2,243
750
2018
2019
Over 5 years
1-5 years
Up to 1 year
31 December
31 December
As of
As of
Contractual maturity date
Total subordinated liabilities
Current interest rate
Floating rate
Hybrid equity4
Current interest rate
Floating rate³
Contractual interest rate
Fixed rate
Subordinated bonds
Total certificated liabilities
Contractual interest rate
Fixed rate
Money market securities
Floating rate
14,667
2012
1,500
2014
DE000A13R7Z7
Perpetual bond
4.750
1,500
EUR
2013
DE000A1YCQ29
Perpetual bond
5.500
1,000
USD
2012
XS0857872500
25 September 2049
1.301
1,000
EUR
2019
DE000A2YPFA1
30 January 2049
5.100
600
USD
2017
XS1556937891
6 July 2047
EUR
3.099
1,500
Perpetual bond
1,170
Issued capital
Shareholders' equity
2018
2019
As of 31 December
€ mn
Equity
19 Equity
1 On 7 January 2020, Allianz Finance II B.V. called for redemption the certificated liability in accordance with the terms and conditions of the bond. The bond was redeemed on 21 January 2020.
Perpetual bond
5.375
800
8 July 2041
5.750
1,096
EUR
EUR
2006
2011
DE000A1GNAH1
DE000A0GNPZ3
Perpetual bond
3.875
1,500
USD
2016
XS1485742438
3.375
EUR
1,000
2017
DE000A2RWAY2
13 March 2028
3.000
750
EUR
2013
DE000A1HG1K6
6 December 2027
0.875
750
EUR
2017
DE000A19S4V6
15 January 2026
0.875
750
EUR
2019
DE000A2RWAX4
6 June 2023
0.250
750
EUR
2017
DE000A19S4U8
14 February 2022
3.500
2019
EUR
EUR
1.500
DE000A2DAHN6
7 July 2045
2.241
1,500
EUR
2015
DE000A14J9N8
།བ ལྷ། ར། ཆ། ར། ལྷ། ཇ།ར།
17 October 2042
5.625
1,500
EUR
2012
DE000A1RE1Q3
13 March 2043
4.500
750
GBP
2013
DE000A1HG1L4
21 April 2031
1.375
750
EUR
2016
DE000A180B80
15 January 2030
750
28,863
130
75,957
1,119
707
389
344
257
1,971
2018
30,778
16,669
7,842
2,261
1,022
710
425
303
1,545
2017
31,403
16,409
7,929
2,007
1,004
727
2,484
546
7,976
32,330
2016
2015
2014
2013
2012
2011
2010
and prior
As of 31 December
Accident year
Reserves for loss and loss adjustment expenses for the individual accident years at the respective reporting date (net)
€ mn
RESERVES FOR LOSS AND LOSS ADJUSTMENT EXPENSES FOR THE INDIVIDUAL ACCIDENT YEARS AT THE
RESPECTIVE REPORTING DATE (NET)
33,465
18,105
8,524
2,753
1,044
788
490
314
195
182
1,070
2019
17,084
2017
2,781
30,031
2011
26,459
26,459
2010
Total
2019
2018
2017
2016
2015
2014
2013
2012
2011
and prior
Calendar year
2010
Accident year
D_Consolidated Financial Statements
€ mn
Loss payments for the individual accident years (per calendar year, net)
LOSS PAYMENTS FOR THE INDIVIDUAL ACCIDENT YEARS (PER CALENDAR YEAR, NET)
29,029
12,229
2016
14,316
2012
16,291
7,564
1,850
1,054
775
2,497
2015
28,702
15,410
7,009
1,169
3,224
2014
28,979
15,449
7,181
2,090
4,259
2013
27,828
14,443
7,434
5,951
26,545
2018
1,890
Total
D_Consolidated Financial Statements
129
Annual Report 2019 - Allianz Group
60,122
18,762
8,751
6,049
4,403
3,413
2,341
2,001
1,485
1,368
11,549
2019
56,358
17,081
8,327
5,424
4,114
2,954
2,352
1,808
ULTIMATE LOSS FOR THE INDIVIDUAL ACCIDENT YEARS AT THE RESPECTIVE REPORTING DATE (NET)
1,570
Ultimate loss for the individual accident years at the respective reporting date (net)
Accident year
2013
2019
30,007
29,610
77,021
2012
29,912
75,928
2011
77,309
2010
Total
2019
2018
2017
2016
2015
2014
2013
2012
2011
and prior
2010
€ mn
12,729
Calendar year
56,314
15,215
7,101
5,223
4,066
24,014
2014
53,445
13,957
7,239
5,190
27,058
55,619
2010
15,564
7,861
32,382
2012
52,836
15,596
37,240
2011
50,850
2018
50,850
55,807
2015
2013
3,208
8,454
21,228
5,407
3,891
2,815
2,356
1,945
14,873
2017
57,254
16,708
7,991
16,573
16,358
5,182
5,262
7,585
57,492
2016
3,931
17,796
2,564
3,040
3,894
Service agreements
(225)
Total
(1,494)
(1,333)
(286)
administrative expenses (net)
(1,888)
(332)
Subtotal
(1,660)
Acquisition and administrative expenses (net)
Expenses from fixed assets from alternative investments
(337)
30 Acquisition and
Investment management expenses
(1,550)
Fees from credit and assistance business
(376)
(403)
PROPERTY-CASUALTY
(732)
(805)
Expenses from real estate held for investment
2018
2019
2018
Fee and commission expenses
€ mn
2019
(1,328)
€ mn
2019
Acquisition costs¹
(375)
(387)
€ mn
Investment advisory and banking activities
(1,759)
(1,719)
Service agreements
CORPORATE AND OTHER
2018
(1,749)
(1,864)
(13)
(21)
(1,737)
(1,843)
Subtotal
Other
Administrative expenses
Subtotal
LIFE/HEALTH
Investment advisory
(683)
(672)
PROPERTY-CASUALTY
Service agreements
(70)
Subtotal
(795)
(742)
ASSET MANAGEMENT
Commissions
(111)
Investment expenses
Carrying value (fair value) as of 31 December 2019
29_Investment expenses
2,651
Carrying value (fair value) as of 1 January 2019
Additions through purchases and issues
Net transfers into (out of) level 3
Disposals through sales and settlements
Net losses (gains) recognized in consolidated income statement
Net losses (gains) recognized in other comprehensive income
Impairments
Foreign currency translation adjustments
for trading
182
(11)
171
Changes in the consolidated subsidiaries of the Allianz Group
(9)
(9)
13,087
Net losses (gains) recognized in consolidated income statement held at the reporting date
Fair value hierarchy (items not carried at fair value)
(10,801)
FAIR VALUE INFORMATION ABOUT FINANCIAL ASSETS AND LIABILITIES NOT CARRIED AT FAIR VALUE
If financial assets are measured at fair value on a non-recurring
basis at the time of impairment, or if fair value less cost to sell is used
as the measurement basis under IFRS 5, corresponding disclosures can
be found in note 28.
Certain financial assets are measured at fair value on a non-recurring
basis when events or changes in circumstances indicate that the carry-
ing amount may not be recoverable.
FAIR VALUE MEASUREMENT ON A NON-RECURRING
BASIS
37
D_Consolidated Financial Statements
Annual Report 2019 - Allianz Group
2,533
14,561
314
1,159
37
2,496
147
31 Fee and commission expenses
2,614
(1)
D_Consolidated Financial Statements
139
(3,152)
(1,824)
33
77
1
37
67
Reconciliation of level 3 financial liabilities
€ mn
Financial
liabilities held
Financial
liabilities for
Financial
Liabilities for
puttable
unit-linked
contracts
(12)
(960)
(3)
(3)
1,650
104
(972)
318
11,073
221
829
10,023
Total
financial
instruments
1,228
(10,317)
1,593
(2,106)
24
2018
2019
Pensions and similar obligations
Tax losses carried forward
Insurance reserves
Deferred acquisition costs
Other assets
Intangible assets
Financial assets carried at fair value through income
Investments
DEFERRED TAX ASSETS
As of 31 December
Deferred tax assets and liabilities
€ mn
DEFERRED TAX ASSETS AND LIABILITIES
Deferred tax assets on losses carried forward are recognized to
the extent to which it is more likely than not that sufficient future taxa-
ble profits will be available for realization. Entities which suffered a tax
loss in either the current or the preceding period recognized deferred
tax assets in excess of deferred tax liabilities amounting to € 646 mn
(2018: € 525 mn), as there was convincing other evidence that suffi-
cient future taxable profit will be available.
The tax rates used in the calculation of the Allianz Group's de-
ferred taxes are the applicable national rates, which in 2019 ranged
from 10.0% to 40.0%, with changes to tax rates that had already been
adopted in Argentina, France, Greece, Luxembourg, Netherlands, Slo-
vakia and Switzerland by 31 December 2019 taken into account.
The reconciling item "other effects" includes expenses of € 29 mn
(2018: € 6 mn) related to the write-down of deferred tax assets on tem-
porary differences and tax credits. Deferred tax income increased by
€ 12 mn (2018: € 23 mn) due to the reversal of write-down of deferred
tax assets on temporary differences and tax credits.
The effective tax rate is determined on the basis of the effective
income tax expenses on income before income taxes.
The recognized income taxes for the year ended 31 December 2019
are €47 mn below (2018: € 100 mn above) the calculated income
taxes, which are determined by multiplying the respective income be-
fore income taxes with the applicable country-specific tax rates. The
following table shows the reconciliation from the calculated income
taxes to the effectively recognized income taxes for the Allianz Group.
The Allianz Group's reconciliation is a summary of the individual
company-related reconciliations, which are based on the respective
country-specific tax rates taking into consideration consolidation ef-
fects with an impact on the Group result. The applicable tax rate
used in the reconciliation for domestic Allianz Group companies in-
cludes corporate tax, trade tax, and the solidarity surcharge, and
amounted to 31.0% (2018: 31.0 %). The applied weighted income
tax rate for the Group considers tax rates on income of foreign
Allianz Group companies.
(73)
1,609
(2,923)
(57)
134
1,513
Share of other comprehensive income of associates and joint
ventures
14
(10)
Miscellaneous
40
37
Changes in actuarial gains and losses on defined benefit
plans
Total
411
(2,421)
4
42
Items that may never be reclassified to profit or loss
Cash flow hedges
12,423
€ mn
Net deferred tax assets
10,399
11,077
Income before income taxes
(46,285)
(60,732)
Effect of netting
2018
2019
(720)
(742)
Non-recognition or valuation allowance for deferred tax assets
on tax losses carried forward
47,963
62,607
Total deferred tax assets
€ mn
Effective tax rate
623
1,207
1,281
168
80
1,724
11,574
1,775
27,268
4,997
4,158
Other liabilities
1,942
1,166
38,529
Subtotal
Available-for-sale investments
Items that may be reclassified to profit or loss in future periods
Foreign currency translation adjustments
Subtotal
Income taxes
(1,660)
(1,710)
Non-personnel expenses²
(2,542)
(2,774)
Personnel expenses
32 _ Income taxes
ASSET MANAGEMENT
(5,635)
(6,449)
Subtotal
(1,802)
(1,825)
Administrative expenses
(3,833)
(2,134)
(3,318)
(3,225)
(14,119)
(13,542)
CONSOLIDATION
(4,483)
2,143
Total
(4,509)
(4,302)
LIFE/HEALTH
Acquisition costs
(4,624)
1,983
98
(4,202)
CORPORATE AND OTHER
2019
2018
€ mn
Income taxes relating to components of other comprehensive income
D_Consolidated Financial Statements
Annual Report 2019 - Allianz Group
140
For the years ended 31 December 2019 and 2018, the income
taxes relating to components of other comprehensive income consist
of the following:
Of the deferred income taxes for the year ended 31 Decem-
ber 2019, income of € 326 mn (2018: expenses of € 566 mn) is attribut-
able to the recognition of deferred taxes on temporary differences,
and expenses of € 93 mn (2018: € 145 mn) are attributable to tax
losses carried forward. Changes of applicable tax rates due to
changes in tax law lead to deferred tax expenses of € 3 mn (2018: in-
come of € 8 mn).
During the year ended 31 December 2019, current income taxes in-
cluded expenses of € 149 mn (2018: income of € 329 mn) related to
prior years, deferred income taxes included income of € 102 mn (2018:
expenses of € 239 mn) related to prior years.
1 Include € 699 mn (2018: € 559 mn) ceded acquisition costs.
2_For the year ended 31 December 2019 include € 95 mn changes in assets and € (95) mn changes in liabilities related
to certain deferred compensation programs, entirely offsetting each other.
Total
(703)
(2,696)
230
(2,776)
(1,993)
2018
2019
(3,006)
Administrative expenses
Subtotal
CONSOLIDATION
Current income taxes
(1,134)
(1,171)
€ mn
Deferred income taxes
(1,171)
Total
(61)
(50)
(26,247)
(24,600)
(1,134)
As of 31 December
(363)
2019
Total
(91)
(120)
Liabilities to banks and customers
(2,472)
(2,709)
CONSOLIDATION
2018
2019
2,231
2,390
Subtotal
€ mn
Interest expenses
691
705
Investment advisory and banking activities
490
419
Other
51
43
Subtotal
12,296
9,035
27
CORPORATE AND OTHER
Interest expenses
Service agreements
1,684
1,540
8,462
Performance fees
11,534
(78)
573
3,173
Ceded
69
€ mn
(21,528)
(38,073)
Gross
Impairments of investments (net)
2019
28 Impairments of investments (net)
Group
Consoli-
dation
Life/Health
Property-
Casualty
€ mn
Claims and insurance benefits incurred (net)
(49)
Certificated liabilities
(217)
(240)
Subordinated liabilities
(595)
Deposits retained for reinsurance ceded
(606)
(99)
(49)
Total
(1,110)
(1,035)
25 Claims and insurance benefits incurred (net)
Other
(65)
411
Loading and exit fees
270
1
Ceded
LIFE/HEALTH
(13,997)
29
(13,559)
(466)
Gross
1,765
1,946
Subtotal
2019
386
378
Service agreements
Group
Fee and commission income
€ mn
2019
2018
D_Consolidated Financial Statements
26_ Change in reserves for insurance and
investment contracts (net)
271
Change in reserves for insurance and investment contracts (net)
€ mn
Fees from credit and assistance business
1,568
1,379
Property-
Casualty
Life/Health
Consoli-
dation
PROPERTY-CASUALTY
405
Investment advisory
1,418
(9,684)
(78)
(9,372)
(235)
Net
7,590
8,089
Management and advisory fees
243
(1)
235
9
Ceded
ASSET MANAGEMENT
(9,927)
(77)
(9,607)
Net
(465)
(13,289)
29
(13,726)
Service agreements
1,450
185
2018
Subtotal
1,635
1,548
Gross
(243)
130
FINANCIAL ASSETS
Net
(20,956)
58,015
131,216
6,333
66,911
48,595
121,839
7,631
69,113
97,575
174,320
8,088
68,315
85,238
161,641
FINANCIAL LIABILITIES
Liabilities to banks and customers
Certificated liabilities
178
9,652
10,375
184
10,191
14,235
66,708
2,622
6,294
13,475
2,770
3,343
7,362
Subordinated liabilities
5,319
9,830
6,493
21,545
2018
Level 1¹
Level 2²
Level 33
Total
Level 1¹
Level 22
Level 33
Total
Held-to-maturity investments
1,137
1,744
5
2,887
1,753
1,219
1
21,545
23,463
23,463
Real estate held for investment
15,284
15,097
Loans and advances to banks and customers
Total
185
16,754
16,092
661
1
Investments in associates and joint ventures
2,973
2
(34,900)
7,362
14,334
(2,799)
(1,192)
2018
2019
Total
Reversals of impairments
Subtotal
Non-current assets and assets of disposal groups classified
as held for sale
Annual Report 2019 - Allianz Group
Other
(52,157)
4
(20,296)
Subtotal
2,302
(56)
612
4
(59,532)
3,681
(55,851)
Impairments
Available-for-sale investments
2018
Equity securities
1,133
Gross
Net
(33,610)
1,746
(31,864)
(20,908)
60
(54,459)
Debt securities
Ceded
14,334
27,868
(340)
(3,139)
13,897
13,897
2,954
38,184
6,294
28,869
2,799
37,962
Total
1_Quoted prices in active markets.
2 Market observable inputs.
3_Non-market observable inputs.
HELD-TO-MATURITY INVESTMENTS
For level 2 and level 3, the fair value is mainly determined based on
the market approach using quoted market prices, and the income
approach using deterministic discounted cash flow models.
INVESTMENTS IN ASSOCIATES AND JOINT VENTURES
For level 2 and level 3, fair values are mainly based on an income
approach, using a discounted cash flow method or net asset values
as provided by third-party vendors.
REAL ESTATE HELD FOR INVESTMENT
Fair values are mostly determined using the market or the income
approach. Valuation techniques applied for the market
approach include market prices of identical or comparable assets in
markets that are not active. The fair values are either calculated
internally and validated by external experts, or derived from expert
appraisals with internal controls in place to monitor these valuations.
(275)
(34)
(10)
(12)
(1,839)
Annual Report 2019 - Allianz Group
(1,555)
148
TRANSFERS OF FINANCIAL ASSETS
For level 2, the fair value is mainly determined based on the market
approach, using quoted market prices, and based on the income
approach, using present value techniques. For level 3, fair values are
mainly derived based on the income approach, using deterministic
cash flows with credit spreads as primary non-market observable
inputs. In some cases, the carrying amount (amortized cost) is
considered to be a reasonable estimate for the fair value.
CERTIFICATED LIABILITIES AND SUBORDINATED
LIABILITIES
Level 1 mainly consists of highly liquid liabilities, e.g. payables on
demand. The fair value for liabilities in level 2 and level 3 is mainly de-
rived based on the income approach, using future cash flows
discounted with risk-specific interest rates. Main non-market observa-
ble inputs include credit spreads. In some cases, the carrying amount
(amortized cost) is considered to be a reasonable estimate of the fair
value.
LIABILITIES TO BANKS AND CUSTOMERS
LOANS AND ADVANCES TO BANKS AND CUSTOMERS
For loans and advances to banks and customers, quoted market prices
are rarely available. Level 1 mainly consists of highly liquid advances,
e.g. short-term investments. The fair value for these assets in level 2 and
level 3 is mainly derived based on the income approach using deter-
ministic discounted cash flow models.
As of 31 December 2019, the Allianz Group substantially retained all
the risks and rewards from the ownership of transferred assets. There
have not been any transfers of financial assets that were
derecognized in full or partly, in which Allianz continues to control the
transferred assets. Transfers of financial assets mainly relate to
securities lending and repurchase agreement transactions. Financial
959
principal
amounts
25.5%
878
45,755
Equity securities
6,442
4,540
1,075
826
8,156
5,932
1,123
1,102
Other
24,035
183
18,173
23,807
28,453
253
28,154
46
MBS/ABS
197,531
766
178,530
18,234
223,400
843
204,721
17,836
Government and government agency bonds
45
64,805
37,163
655
103,695
Financial liabilities for unit-linked contracts
130
Financial liabilities held for trading
FINANCIAL LIABILITIES
643,583
115,361
829
40,107
23,676
440,078
163,398
738,532
90,856
132,168
1,159
52,982
501,338
184,212
Total
13,595
51,413
Subtotal
76,384
465,203
51,591
241,192
593,178
413,529
38,994
520,612
Financial assets for unit-linked contracts
103,695
27,314
68,089
19,910
209,461
11,821
Total
Level 33
Level 22
Level 11
Total
Level 33
Level 22
Level 1¹
2018
2019
D_Consolidated Financial Statements
As of 31 December
€ mn
Fair value hierarchy (items carried at fair value)
The following table presents the fair value hierarchy for financial in-
struments carried at fair value in the consolidated balance sheet as of
31 December 2019 and 2018:
Financial liabilities for puttable financial instruments.
Financial assets and liabilities for unit-linked contracts, and
9,199
9,830
13,238
14,334
13,475
13,897
FINANCIAL ASSETS
Annual Report 2019 - Allianz Group
The following financial assets and liabilities are carried at fair value on
a recurring basis:
-
-
Financial assets and liabilities held for trading,
Financial assets and liabilities designated at fair value through in-
come,
Available-for-sale investments,
FAIR VALUE MEASUREMENT ON A RECURRING BASIS
4,832
27,314
Financial assets carried at fair value through income
394
268,363
26,391
230,327
11,645
Corporate bonds
Available-for-sale investments
7,611
284
2,874
4,453
13,187
231
8,822
4,133
Subtotal
4,258
161
7,099
73
7,566
1,341
1,888
123
Financial assets held for trading
3,353
3,740
1,723
158
5,620
3,112
985
Financial assets designated at fair value through income
Financial liabilities for puttable financial instruments
1,674
85
(3)
(294)
427
(1)
12,733
318
5,567
6,832
16
40,107
829
13,595
25,399
284
Foreign currency translation adjustments
Net gains (losses) recognized in other comprehensive income
Impairments
Net gains (losses) recognized in consolidated income statement
Available-for-
sale
investments -
Available-for-
sale
investments -
Financial
assets for unit-
Debt
securities¹
Equity
129
linked
contracts
Total
Carrying value (fair value) as of 1 January 2019
Additions through purchases and issues
Net transfers into (out of) level 3
Disposals through sales and settlements
securities
Financial
assets carried
at fair value
through
income
(614)
(1,195)
24 Fee and commission income
(49)
Net gains (losses) recognized in consolidated income statement held at the reporting date
1 Primarily include corporate bonds.
52,982
1,159
18,173
33,418
231
Carrying value (fair value) as of 31 December 2019
68
(237)
306
Changes in the consolidated subsidiaries of the Allianz Group
313
(11)
62
241
(12)
(3,504)
527
(142)
9
37
(1,684)
431
1,026
3,091
(27)
(360)
(387)
20
2,065
10,375
D_Consolidated Financial Statements
Reconciliation of level 3 financial assets
The valuation techniques for these debt securities are similar. The
fair value is determined using the market and the income approach.
Primary inputs for the market approach are quoted prices for identical
or comparable assets in active markets where comparability between
the security and the benchmark defines the fair value level. The income
Debt securities include corporate and government and government
agency bonds, MBS/ABS, and other debt securities.
Debt securities
AVAILABLE-FOR-SALE INVESTMENTS
Financial assets designated at fair value through income
The fair value is mainly determined based on net asset values for funds
and using the market approach.
This position mainly includes derivative financial instruments. The fair
value of these derivatives is mostly determined based on the income ap-
proach, using present value techniques and the Black-Scholes-Merton
model. Primary inputs for the valuation include volatilities, interest rates,
yield curves, and foreign exchange rates observable at commonly
quoted intervals. In some cases, it is determined based on the market
approach.
Financial assets held for trading
FINANCIAL ASSETS CARRIED AT FAIR VALUE
THROUGH INCOME
3_Non-market observable inputs.
2_Market observable inputs.
1_Quoted prices in active markets.
128,980
11,073
25,351
1,993
221
108
Total
105,499
32,231
13,087
1,159
314
14,561
18,049
132,168
36
Annual Report 2019 - Allianz Group
90,856
10,023
11,626
829
115,361
2,073
152,290
1,665
92,556
1,568
23,676
€ mn
145
approach in most cases means that a present value technique is
applied where either the cash flow or the discount curve is adjusted to
reflect credit risk and liquidity risk. Depending on the observability of
these risk parameters in the market, the security is classified as level 2
or level 3.
The following tables show reconciliations of the financial instruments
carried at fair value and classified as level 3:
Reconciliation of level 3 financial instruments
Annual Report 2019 - Allianz Group
146
Transfers into/out of level 3 may occur due to a reassessment of
input parameters.
In general, financial assets and liabilities are transferred from level 1
to level 2 when their liquidity, trade frequency, and activity are no
longer indicative of an active market. The same policy applies
conversely for transfers from level 2 to level 1.
SIGNIFICANT TRANSFERS OF FINANCIAL
INSTRUMENTS CARRIED AT FAIR VALUE
Financial liabilities for puttable financial instruments are generally
required to be recorded at the redemption amount with changes
recognized in income or equity. The fair value is based on the net asset
value or the use of present value techniques.
FINANCIAL LIABILITIES FOR PUTTABLE FINANCIAL
INSTRUMENTS
1_Mortality assumptions are mainly derived from the Annuity 2000 Mortality Table.
0%-50%
0.5%-35%
n/a¹
election
Surrenders
Mortality
Withdrawal benefit
n/a¹
0%-25%
0%-25%
Range
Level 3 investments are mainly priced based on the income
approach. The primary non-market observable input used in the
discounted cash flow method is an option-adjusted spread taken
from a set of benchmark securities with similar characteristics. A sig-
nificant yield increased of the benchmark securities in isolation
could result in a decreased fair value, while a significant yield
decrease could result in an increased fair value. However, a 10%
stress of the main non-market observable inputs has only immate-
rial impact on fair value.
Equity securities
For level 2, the fair value is mainly determined using the market
approach or net asset value techniques for funds. For certain private
equity investments, the funds are priced based on transaction prices
using the cost approach. As there are only few holders of these funds,
the market is not liquid and transactions are only known to partici-
pants.
Level 3 mainly comprise private equity fund investments as well as
alternative investments of the Allianz Group, and in most cases are
delivered as net asset values by the fund managers. These net asset
values are calculated using material, non-public information about
the respective private equity companies. The Allianz Group has only
limited insight into the specific inputs used by the fund managers
hence a narrative sensitivity analysis is not applicable. The fund's asset
manager generally prices the underlying single portfolio companies in
line with the International Private Equity and Venture Capital Valua-
tion (IPEV) guidelines, using discounted cash flow (income approach)
or multiple methods (market approach). For certain investments, the
capital invested is considered to be a reasonable proxy for the fair
value. In these cases, sensitivity analyses are also not applicable.
FINANCIAL ASSETS FOR UNIT-LINKED CONTRACTS
For level 2, the fair value is determined using the market or the income
approach. Valuation techniques applied for the income approach
mainly include discounted cash flow models as well as the Black-
Scholes-Merton model. Financial liabilities for unit-linked contracts are
valued based on their corresponding assets.
FINANCIAL LIABILITIES HELD FOR TRADING
This position mainly includes derivative financial instruments.
D_Consolidated Financial Statements
For level 2, the fair value is determined using the income or the
market approach. Valuation techniques applied for the income
approach mainly include discounted cash flow models as well as the
Black-Scholes-Merton model. Main observable input parameters
include volatilities, yield curves observable at commonly quoted inter-
vals, and credit spreads observable in the market.
rates, or in the utilization of annuitization benefits could result in a
higher (lower) fair value. For products with a high death benefit,
surrender rates may show an opposite effect. However, a 10% stress of
the main non-market observable inputs has only immaterial impact on
fair value.
Quantitative description of non-market observable input(s) used for
the level 3 portfolios
Description
Fixed index annuities
Variable annuities
Non-market observable
input(s)
Annuitizations
Surrenders
Mortality
For level 3, the fair value is determined using the income or the
market approach. Valuation techniques applied for the income
approach mainly include discounted cash flow models. A significant
proportion of level 3 liabilities represent derivatives embedded in
certain life insurance and annuity contracts. Significant non-market
observable input parameters include mortality rates and surrender
rates. A significant decrease (increase) in surrender rates, in mortality
9,209
1,993
1,993
Notional
Maturity by notional amount
2018
2019
D_Consolidated Financial Statements
thereof exchange-traded
thereof OTC¹
Total
Other
Foreign exchange contracts
Equity/index contracts
Interest rate contracts
As of 31 December
€ mn
Derivative financial instruments
33 Derivative financial instruments
OTHER INFORMATION
2023-2024
2025-2029
>10 years
Unlimited
Total
2019
38
Up to 1 year
100
604
689
5,902
7,379
142
Annual Report 2019 - Allianz Group
46
2021-2022
1-5 years
Positive fair
(646)
765
95,045
1,739
2,689
90,617
(11,169)
2,152
242,632
(17,767)
5,599
360,266
12,416
969
346,881
(126)
607
Negative fair
Notional
principal
values
values
amounts
Positive fair
values
Over 5 years
Negative fair
values
20,845
76,049
118,719
1,199
(163)
96,502
21,825
74,249
2020
Tax losses carried forward
2,696
2,776
901
1,695
Other assets
77
98
6,944
7,245
Deferred acquisition costs
21
Effective income taxes
Other effects
Effects of tax losses
23,263
35,154
Investments
25.0%
Calculated income taxes
2,823
2,596
DEFERRED TAX LIABILITIES
Trade tax and similar taxes
Intangible assets
223
Financial assets carried at fair value through income
519
269
Net tax-exempt income
(389)
(198)
220
€ mn
770
Effective tax rate
Tax losses carried forward are scheduled according to their expiry
periods as follows:
Tax losses carried forward at 31 December 2019 of € 7,379 mn (2018:
€ 7,531 mn) resulted in the recognition of deferred tax assets to the ex-
tent that there is sufficient certainty that the unused tax losses will be
utilized. At the reporting date, this prerequisite was not fulfilled for a
partial amount of € 2,803 mn (2018: € 2,737 mn). According to tax
legislation as of 31 December 2019, an amount of € 2,510 mn (2018:
€ 2,514 mn) of these tax losses may be carried forward indefinitely and
in unlimited amounts, whereas an amount of €293 mn (2018:
€ 224 mn) of these tax losses carried forward will expire over the next
20 years if not utilized.
TAX LOSSES CARRIED FORWARD
arising from investments in Allianz Group companies for which no de-
ferred tax assets are recognized, as it is not probable that they will re-
verse in the foreseeable future, amounted to € 68 mn (2018: € 92 mn).
D_Consolidated Financial Statements
141
Annual Report 2019 - Allianz Group
(3,121)
(5,405)
4,080
6,538
(46,285)
(60,732)
50,364
67,269
561
564
25.1%
25.9%
Insurance reserves
18,420
15,245
Pensions and similar obligations
692
2,903
For the year ended 31 December 2019, the write-down of deferred
taxes on tax losses increased the tax expenses by € 137 mn (2018:
€ 14 mn). The reversal of write-down of deferred tax assets on tax
losses carried forward resulted in deferred tax income of € 66 mn
(2018: € 4 mn). Due to the use of tax losses carried forward, for which
deferred tax assets had previously been written off, the current income
tax expenses decreased by € 1 mn (2018: € 1 mn). Deferred tax in-
come increased by € 48 mn (2018: € 9 mn) due to the use of tax losses
carried forward, for which deferred tax assets had previously been writ-
ten off. The above-mentioned effects are shown in the reconciliation
statement as "effects of tax losses".
Other liabilities
Total deferred tax liabilities
Effect of netting
Net deferred tax liabilities
Net deferred tax assets (liabilities)
Taxable temporary differences associated with investments in
Allianz Group companies for which no deferred tax liabilities are rec-
ognized, as the Allianz Group is able to control the timing of their re-
versal, and which will not reverse in the foreseeable future, amounted
to € 1,951 mn (2018: € 1,844 mn). Deductible temporary differences
2,490
Applied weighted income tax rate
432
1,489
23,463
13,049
Real estate held for investment
15,284
11,823
16,754
13,462
Investments in associates and joint ventures
2,973
2,787
2,887
2,589
Held-to-maturity investments
520,612
520,612
593,178
593,178
21,075
17,234
17,234
Financial assets held for trading
7,566
7,566
12,455
3,353
Financial assets designated at fair value through income
5,620
5,620
4,258
4,258
Available-for-sale investments
3,353
21,075
21,545
112,672
2,073
2,073
115,361
115,361
132,168
132,168
14,235
14,222
13,475
13,445
11,626
11,626
18,049
18,049
144
As of 31 December 2019, fair values could not reliably be measured for
equity investments with carrying amounts totaling € 81 mn (2018:
€ 61 mn). These investments are primarily investments in privately held
corporations and partnerships. During the year ended 31 Decem-
ber 2019, such investments with carrying amounts of € 61 mn (2018:
€ 119 mn) were sold. The gains and losses from these disposals were
immaterial.
Subordinated liabilities
131,216
108,270
121,839
132,168
132,168
115,361
Loans and advances to banks and customers
115,361
FINANCIAL LIABILITIES
Financial liabilities held for trading
Liabilities to banks and customers
Financial liabilities for unit-linked contracts
Financial liabilities for puttable financial instruments
Certificated liabilities
Financial assets for unit-linked contracts
(624)
Cash and cash equivalents
Fair value
FREESTANDING DERIVATIVE FINANCIAL
INSTRUMENTS
The table shows the fair value and notional amounts of all freestanding
derivatives, as well as derivatives for which hedge accounting is applied
by the Allianz Group, as of 31 December 2019 and 2018, respectively.
The notional principal amounts indicated in the table are cumulative,
as they include the absolute value of the notional principal amounts of
derivatives with positive and negative fair values. Although these
notional principal amounts reflect the degree of the Allianz Group's
involvement in derivative transactions, they do not represent amounts
exposed to risk. Further information on the use of derivatives to hedge
risk can be found in the sections on market and credit risk of the Risk
and Opportunity Report, which forms part of the Group Management
Report.
1_Consists mainly of equity/index contracts and foreign exchange contracts.
(11,921)
(33)
1,185
67,161
2,033
351,551
(18,517)
(64)
7,284
302
481,746
99,681
323
90,968
29,324
361,454
99,358
(35)
(11,954)
3,218
5,144
764
7,397
23
(5)
5,329
As of 31 December 2019, freestanding derivatives, which are included
in the line item financial assets and liabilities held for trading, had a
notional principal amount of € 560.3 bn (2018: € 398.0 bn) as well as
a positive fair value of € 6.9 bn (2018: € 2.7 bn) and a negative fair
value of € 18.0 bn (2018: € 11.6 bn). Out of the total allocated to
the freestanding derivatives, € 119.9 bn (2018: € 114.1 bn) of the no-
tional principal relate to annuity products. Annuity products are equity-
indexed or contain certain embedded options or guarantees which are
considered embedded derivatives under IAS 39. For these embedded
derivatives, the notional principal amounts included in the table refer
to the account value of the related insurance contracts. The total
negative fair value of these embedded derivatives amounts to
€ 13.5 bn (2018: € 10.0 bn). Further information on the fair value
measurement of these derivatives can be found in note 34.
27
29,647
90,968
581,427
7,586
(18,581)
418,712
460,812
FINANCIAL ASSETS
DERIVATIVE FINANCIAL INSTRUMENTS USED IN
ACCOUNTING HEDGES
and a negative fair value of € 532 mn (2018: € 330 mn). These hedg-
ing instruments mainly include interest rate forwards with a total posi-
tive fair value of € 374 mn (2018: € 193 mn).
Carrying
amount
Fair value
Carrying
amount
2018
2019
As of 31 December
€ mn
Fair values and carrying amounts of financial instruments
the Allianz Group's financial assets and financial liabilities:
The following table compares the carrying amount and fair value of
FAIR VALUES AND CARRYING AMOUNTS
Market risk, credit risk, and liquidity risk in the section Quantifiable
risks and opportunities by risk category.
Allianz risk profile and management assessment,
Internal risk capital framework,
Risk based steering and risk management,
Certain risk disclosure requirements of IFRS 7 are reflected in the fol-
lowing sections of the Risk and Opportunity Report within the Group
Management Report:
of financial instruments
FAIR VALUE HEDGES
The Allianz Group uses fair value hedges to hedge the exposure to
changes in the fair value of financial assets due to movements in inter-
est or exchange rates and to hedge its equity portfolio against equity
market risk. As of 31 December 2019, the derivative financial instru-
ments used for the related fair value hedges of the Allianz Group had
a total negative fair value of € 24 mn (2018: total positive fair value of
€ 149 mn).
CASH FLOW HEDGES
During the year ended 31 December 2019, cash flow hedges were
used to hedge the exposure to the variability of cash flows arising from
interest rate or exchange rate fluctuations as well as inflation. As of
31 December 2019, the derivative instruments utilized had a total pos-
itive fair value of € 503 mn (2018: € 202 mn).
The ineffectiveness that arises from cash flow hedges is immaterial.
HEDGE OF NET INVESTMENT IN FOREIGN
OPERATIONS
As of 31 December 2019, derivatives which form part of hedge
accounting relationships, and which are included in the line items other
assets and other liabilities, had a notional amount of € 21.1 bn (2018:
€ 20.7 bn) as well as a positive fair value of € 702 mn (2018: € 489 mn)
As of 31 December 2019, the Allianz Group hedges part of its foreign
currency net investments through the issuance of several foreign cur-
rency denominated liabilities and the use of forward sales. The total
negative fair value in 2019 was € 310 mn (2018: € 191 mn).
The Allianz Group enters into enforceable master netting arrange-
ments and similar arrangements mainly for derivatives transactions.
None of these enforceable master netting arrangements or similar ar-
rangements meet the requirements for offsetting in line with IAS 32.
Credit risk associated with netting arrangements is further miti-
gated by collateral. For further information on collateral, please refer
to note 34. The maximum credit risk exposure is represented by the
carrying amount of the financial assets.
Annual Report 2019 - Allianz Group
143
D_Consolidated Financial Statements
34 Fair values and carrying amounts
OFFSETTING
15
(3,185)
2019
Net defined benefit balance
||
Effect of asset ceiling¹
Fair value of plan assets
Defined benefit obligation
€ mn
Reconciliation of defined benefit obligation, fair value of plan assets, effect of asset ceiling, and net defined benefit balance
The following table sets out the changes in the defined benefit
obligation, in the fair value of plan assets, in the effect of the asset ceil-
ing as well as in the net defined benefit balance for the various
Allianz Group defined benefit plans:
DEFINED BENEFIT PLANS
(1-11+111)
D_Consolidated Financial Statements
Annual Report 2019 - Allianz Group
D_Consolidated Financial Statements
Additionally, the Allianz Group offers a deferred compensation
program, "Pensionszusage durch Entgeltumwandlung (PZE)", for
active employees. Within some boundaries they convert at their
discretion parts of their gross income and, in exchange, receive a
pension commitment of equal value. PZE is qualified as a defined
benefit plan with small risk exposure.
The period in which a retirement benefit can be drawn is usually
between the ages of 60 and 67. Disability benefits are granted until
retirement pension is paid. In the case of death under the previous
plans, surviving dependents normally receive 60% (widow/widower)
and 20% (per child) of the original employee's pension, in total not to
exceed 100%. Under the "My Allianz Pension" plan, the surviving
dependents receive the capital accrued.
Pension increases apart from AVK and APV are guaranteed at
least with 1% p.a. Depending on legal requirements, some pension
increases are linked to inflation. In AVK the complete surplus share of
the retirees is used to increase their pension.
There is also a partly funded defined benefit pension plan for
agents (VertreterVersorgungsWerk, VVW), which has been closed for
new entrants as of 31 December 2011. A part of the pension plan
serves as a replacement for the compensatory claim of agents
according to German Commercial Code (§89b). VVW is similar to a fi-
nal salary benefit plan and pension increases are broadly linked to in-
flation.
contribution-based pension plans are allocated to a trust (Methusa-
lem Trust e.V.) and managed by a board of trustees. For the AVK the
annual minimum interest rate guaranteed is 1.75% - 3.50%, depend-
ing on the date of joining the Allianz Group, and for the closed part of
the contribution-based pension plan it is 2.75%.
Annual Report 2019 - Allianz Group
152
153
Employees who joined Allianz before 1 January 2015 participate
in the Allianz Versorgungskasse VVaG (AVK), financed through
employee contributions, and the Allianz Pensionsverein e.V. (APV),
which is financed by the employer. Both pension funds provide
pension benefits for the base salary up to the GSSC and are wholly
funded along local regulatory requirements and were closed to new
entrants, effective 31 December 2014. AVK and APV are legally
separate administered pension funds with trustee boards being
responsible for the investment of the assets and the risk management.
AVK is subject to German insurance regulation. The assets of the
2018
14,428
2018
Balance as of 1 January
2019
2018
2019
621
563
(1)
(44)
(264)
2019
(295)
465
461
437
9,212
8,853
43
40
2018
2019
425
Current service costs
Most active German employees participate in contribution-
based plans using different vehicles to cover the base salary both
below and above the German social security ceiling (GSSC). Since
1 January 2015, the Allianz Group contributes for new entrants and for
the majority of contribution-based pension plan beneficiaries above
the GSSC to the low-risk pension plan "My Allianz Pension", where only
contributions are preserved. For salaries above the GSSC, the
Allianz Group decides each year whether and to which extent a
budget for the contribution-based pension plans is provided.
Independently of this decision, an additional risk premium is paid to
cover death and disability. Generally the accruals of the contribution-
based pension plans are wholly funded, whereas the grandfathered
plans are funded to a minor extent. On retirement, the accumulated
capital is paid as a lump sum or converted to a lifetime annuity.
Risks typically associated with defined benefit plans are biometric
risks such as longevity, disability, and death as well as economic risks
such as interest rates, inflation and compensation increases. New
plans are primarily based on contributions and may include, in some
cases, guarantees such as the preservation of contributions or mini-
mum interest rates.
2018
2019
As of 31 December
582
€ mn
Operating leases - maturities for the future minimum lease payments
As of 31 December 2019, the maturities for the future minimum
lease payments of operating leases were as follows:
The Allianz Group leases out its investment properties (see note 6)
under operating leases because they do not transfer substantially all
of the risks and rewards incidental to the ownership of the assets. In-
vestment property comprises a number of commercial properties that
are leased to third parties.
For the year ended 31 December 2019, the lease income for operating
leases amounted to € 955 mn.
One year and less
AS A LESSOR
453
1,156
2,791
299
3,089
Total
1,182
121
1,303
More than five years
For the year ended 31 December 2019, the total cash outflow for
leases amounted to € 563 mn.
Each of the pension plans in Germany, the U.K. and Switzerland
contributes more than 5% to the Allianz Group's defined benefit
obligation or its plan assets. As the Allianz Retirement and Death
Benefits Fund in the U.K. closed from 1 July 2015 to future accrual and
the plans in Switzerland are nearly negligible from a risk perspective,
except a minor liquidity risk due to the "Freizügigkeitsleistung", only the
defined benefit plans in Germany are described in more detail regard-
ing key risks and regulatory environment.
663
Between 1 and up to 2 years
The Allianz Group provides competitive and cost-effective
retirement and disability benefits using risk appropriate vehicles. The
plans may vary from country to country due to the different legal, fiscal
and economic environment.
Retirement benefits in the Allianz Group, which are granted to
employees and in Germany also to agents, are either in the form of
defined benefit or defined contribution plans. For defined benefit
plans, the beneficiary is granted a defined benefit by the employer or
via an external entity. In contrast to defined contribution arrange-
ments, the future cost to the employer of a defined benefit plan is not
known with certainty in advance.
OVERVIEW
39 Pensions and similar obligations
453
4,566
5,134
Total
1,741
668
2,072
575
Between 4 and up to 5 years
495
555
Between 3 and up to 4 years
610
Between 2 and up to 3 years
627
659
More than 5 years
23,436
23,597
14,624
(308)
(451)
(479)
(747)
(787)
Benefits paid
126
127
126
(297)
127
(313)
369
313
(311)
1,469
(4)
2
(178)
1,172
(369)
(485)
Acquisitions and divestitures
23
13
Allianz Group
Changes in the consolidated subsidiaries of the
(5)
(5)
2
2
51
163
42
44
(1)
(3)
(3)
(1)
1555
Foreign currency translation adjustments
Settlement payments/assets distributed on settlement
42
20
156
2,640
Plan participants' contributions
Employer contributions
Changes in financial assumptions
Changes in demographic assumptions³
Actuarial (gains)/losses due to
264
295
884
857
income statement
Expenses recognized in the consolidated
Experience adjustments
(1)
Other²
264
295
Interest income
425
465
Interest expenses
461
437
(44)
(31)
(288)
2,719
income (before deferred taxes)
(4)
2
(4)
178
(1,172)
195
(48)
(391)
2,719
(288)
(31)
(178)
1,172
consolidated statement of comprehensive
Remeasurements recognized in the
Change in effect of asset ceiling in excess of interest
Return on plan assets greater/(less) than interest income on
plan assets
195
(48)
(391)
131
1,287
Between one and five years
47
INVESTMENTS IN INVESTMENT FUNDS
2018
2 Thereof rated AAA or AA € 26,445 mn (2018: € 22,121 mn).
1_Comprises mainly investments.
Total¹,2
Other
Credit Card
Auto
U.S. Agency
Investments in investment funds by asset class
CMO/CDO
As of 31 December
€ mn
Carrying amounts of ABS and MBS investments by type of category
INTERESTS IN ASSET-BACKED SECURITIES (ABS)
AND MORTGAGE-BACKED SECURITIES (MBS) ISSUED
BY SECURITIZATION VEHICLES
NATURE OF RISKS ASSOCIATED WITH
UNCONSOLIDATED STRUCTURED ENTITIES
Income derived from the management of investment funds
mainly includes asset management fees and performance based fees.
Investment funds launched by group-internal asset managers can
be considered to be sponsored by the Allianz Group. As a sponsor, the
Allianz Group through its asset management subsidiaries is involved in
the legal set-up and marketing of internally managed investment
funds. This may include providing seed capital to the funds and provid-
ing administrative services to ensure the investment funds' operation.
Investment funds managed by group-internal asset managers can be
reasonably associated with the Allianz Group. The use of the Allianz
name for investment funds is another indicator that the Allianz Group
has acted as a sponsor for the respective funds. Information on the
management fees generated in the asset management business are
disclosed in note 24.
Within the asset management business, investment funds are estab-
lished and managed to accommodate retail and institutional clients'
requirements to hold investments in specific assets, market segments,
or regions. Within the insurance business, policyholder money is partly
invested in investment funds, which include funds managed by
Allianz's group-internal asset managers as well as funds set up and
managed by third parties. Investment funds managed or invested in
by Allianz Group may include mutual funds, special funds, and other
funds.
FUND MANAGEMENT ACTIVITIES
D_Consolidated Financial Statements
CMBS
149
€ mn
Stock funds
Other funds
Total¹
12,862
Besides the above-mentioned investments in investment funds,
the Allianz Group also holds investment funds to fund unit-linked insur-
ance contracts. However, these holdings are held on behalf and for the
benefit of unit-linked policyholders only. For that reason, these hold-
ings are not included in the above-mentioned table. As of 31 Decem-
ber 2019, the volume of unit-linked assets amounted to € 132,168 mn
(2018: € 115,361 mn). The maximum exposure to loss on these invest-
ments is covered by liabilities recorded for unit-linked contracts.
The carrying amounts in the tables listed above correspond to an
aggregated amortized cost amount of € 32,421 mn (2018:
€ 26,493 mn). This amortized cost amount represents the maximum
exposure to loss for the Allianz Group from these investments. In the
reporting period, the Allianz Group has not provided any financial or
other support to these entities, nor does it have the intention to pro-
vide such support in the future.
As of the reporting date, the Allianz Group has receivables from
unconsolidated investment funds, which are mainly due in return for
asset management services, amounting to € 1,036 mn (2018:
€ 796 mn). Furthermore, the Allianz Group has entered commitments
to invest in private equity funds and further financial instruments of up
to € 20,691 mn as of 31 December 2019 (2018: € 17,199 mn).
Of the total investment fund exposure, investments of € 14.1 bn (2018:
€ 11.6 bn) relate to listed investment funds, whereas investments of
€ 24.2 bn (2018: € 18.8 bn) relate to unlisted investment funds.
30,339
38,372
748
1,072
As of 31 December
Private equity funds
Debt funds
Property funds
4,013
5,716
7,132
8,053
8,817
11,808
15,933
2018
2019
1_Comprises mainly investments.
5,417
Annual Report 2019 - Allianz Group
With regard to investment activities, income mainly includes
distributions from the funds as well as realized gains and losses from
disposals.
Investment funds are generally subject to stringent regulatory
requirements from financial authorities in all jurisdictions across the
world. Comprehensive regulation of funds protects fund investors and
also helps to limit investment risk. These mechanisms result in a legal
set-up of funds, agreed and accepted by investors and investment
managers, that may lead to a classification as structured entities under
IFRS 12.
Collaterals with right to resell or repledge
Subtotal
Other
Loans and advances to banks and customers
10,096
11,450
Collaterals without right to resell or repledge
Investments
2018
2019
Financial assets carried at fair value through income
As of 31 December
11,455
5
5
€ mn
Assets pledged as collateral
The carrying amounts of the assets pledged as collateral are displayed
in the following table:
ASSETS PLEDGED AS COLLATERAL
assets transferred in the context of repurchase agreement and
securities lending transactions are mainly available-for-sale debt and
equity securities for which substantially all of the risks and rewards are
retained. As of 31 December 2019, the carrying amount of the assets
transferred for securities lending transactions amounted to
€ 9,009 mn (2018: € 9,570 mn). For repurchase agreements, the carry-
ing amount of the assets transferred amounted to € 910 mn
(2018: € 857 mn) and the carrying amount of the associated liabilities
amounted to € 914 mn (2018: € 865 mn).
D_Consolidated Financial Statements
10,101
Investments
4,224
5,308
INVESTMENTS IN INVESTMENT FUNDS
Considering the broad variety of investment funds across different
jurisdictions, the classification of investment funds as structured entities
based on the definition in IFRS 12 is judgmental. As a general rule, the
management of relevant activities of an investment fund is delegated
to the fund manager via asset management agreements. In contrast,
influence from investors on the relevant activities of investment funds
is usually either precluded by legal or regulatory provisions or not
deemed substantial.
Income derived from the management of securitization vehicles
comprises asset management fees.
Within the asset management business, the Allianz Group acts as
asset manager for some securitization vehicles. The assets under man-
agement of these vehicles amounted to € 1,034 mn as of 31 Decem-
ber 2019 (2018: € 1,137 mn). Some of the affected vehicles have been
set up by the Allianz Group, others by third parties. In this context, the
role of the Allianz Group is limited to asset management. The
Allianz Group has not invested in these vehicles being managed.
Income derived from investments in securitization vehicles mainly
includes interest income generated from ABS and MBS, as well as real-
ized gains and losses from disposals of these securities.
Securitization vehicles invested in by the Allianz Group have gen-
erally been set up by third parties. Furthermore, the Allianz Group has
neither transferred any assets to these vehicles nor has it provided any
further credit enhancements to them.
The Allianz Group acts as investor in ABS- or MBS-issuing securitization
vehicles which purchase pools of assets including commercial mort-
gage loans (CMBS), auto loans, credit card receivables, and others.
These securitization vehicles refinance the purchase of assets by issu-
ing tranches of ABS or MBS whose repayment is linked to the perfor-
mance of the assets held by the vehicles.
INVESTMENTS IN ASSET-BACKED SECURITIES (ABS)
AND MORTGAGE-BACKED SECURITIES (MBS) ISSUED
BY SECURITIZATION VEHICLES
In the following sections, the business activities involving uncon-
solidated structured entities are described.
entities are used by the Allianz Group to source out certain risks to in-
vestors as part of its reinsurance business. Generally, the classification
of an entity as a structured entity may require significant judgement.
The Allianz Group engages in some business activities that involve
the use of entities that meet the above-mentioned definition of struc-
tured entities. Primarily, the Allianz Group is involved with such entities
due to its investment activities associated with its insurance business
and due to its asset management activities. Furthermore, structured
Under IFRS 12, a structured entity is defined as an entity that has been
designed so that voting rights or similar rights are not the dominant
factor in deciding who controls the entity, such as when any voting
rights relate to administrative tasks only and the relevant activities are
directed by means of contractual arrangements.
NATURE, PURPOSE, AND ROLE OF THE
ALLIANZ GROUP IN STRUCTURED ENTITIES
structured entities
35 Interests in unconsolidated
In addition, as part of these transactions, the Allianz Group has
received collateral that it is permitted to sell or repledge in the
absence of default. As of 31 December 2019, the Allianz Group
received collateral consisting of fixed income and equity securities with
a fair value of €8,972 mn (2018: € 9,261 mn), which the
Allianz Group has the right to sell or repledge. For the years ended
31 December 2019 and 2018, no previously received collateral was
sold or repledged by the Allianz Group.
Financial assets are pledged as collateral as part of sales and repur-
chases, securities borrowing, and transactions with derivatives, under
terms that are usual and customary for such activities.
5,308
15,409
15,679
Total
4,224
Subtotal
10,153
(4)
5,575
5,096
5,746
8,197
Debt investments
17,199
20,691
available-for-sale investments
Commitments to acquire interests in associates and
2018
2019
Other
As of 31 December
Commitments
The insurance guarantee scheme for life insurers levies annual
contributions and, under certain circumstances, special contributions.
As of 31 December 2019, the future liabilities of Allianz Lebensversi-
cherungs-AG and its subsidiaries to the insurance guarantee scheme
pursuant to the Sich LVFinV amount to annual contributions of
€ 19.5 mn (2018: € 22.7 mn) and potential special contributions of, in
principle, € 210 mn (2018: € 203 mn) per year. In addition, Allianz
Lebensversicherungs-AG and some of its subsidiaries have assumed a
contractual obligation to provide, if required, further funds to Protektor
Lebensversicherungs-AG ("Protektor"), a life insurance company that
has assumed the task of the mandatory insurance guarantee scheme
for life insurers. Such obligation is, in principle, based on a maximum of
1% of the sum of the net underwriting reserves with deduction of pay-
ments already provided to the insurance guarantee scheme. As of
31 December 2019, and under inclusion of the contributions to the
mandatory insurance scheme mentioned above for a limited period of
time, and assuming that no other life insurer is exempted from pay-
ments, the aggregate outstanding commitment of Allianz Lebensver-
sicherungs-AG and its subsidiaries to the insurance guarantee scheme
and to Protektor is € 1,910 mn (2018: € 1,846 mn).
Pursuant to §§221 ff. of the German Insurance Supervision Act
("Versicherungsaufsichtsgesetz" - VAG), mandatory insurance guaran-
tee schemes ("Sicherungsfonds") for life insurers as well as for health
insurers are implemented in Germany, which are financed through
their member undertakings.
OTHER COMMITMENTS AND CONTINGENCIES
Allianz and HT1 Funding GmbH have signed a Contingent Indemnity
Agreement in July 2006, pursuant to which Allianz may, in certain
circumstances, be obliged to make payments to HT1 Funding GmbH.
The contingent payment obligation of Allianz relates to the coupon
payments of the Tier 1 Capital Securities issued by HT1 Funding GmbH.
The original nominal amount of the Tier 1 Capital Securities of
€ 1,000 mn was reduced in 2012 to approximately € 416 mn. This
reduces the amount of coupon payments of the Tier 1 Capital Securi-
ties and the contingent payment obligation of Allianz accordingly.
Since June 2017, the annual coupon is the 12-month Euribor plus a
margin of 2.0% p.a., the coupon payable on 30 June 2020 is
1.787% p.a. The securities have no scheduled maturity and the security
holders have no right to call for their redemption. Since June 2017, the
securities may be redeemed annually on 30 June at the option of the
issuer. On 18 November 2019, HT1 has issued a call notice with respect
to the securities, effective on 30 June 2020. The call is subject to the
absence of an obligation to write-down the silent participation on
31 December 2019 between HT1 Funding GmbH and Commerzbank
AG, which is related to the Tier 1 Capital Securities. Allianz SE expects
that the Tier 1 Capital Securities will be redeemed on 30 June 2020
and does not expect to be obliged to make any future payment under
the contingent indemnity agreement, which automatically terminates
upon the repayment of the Tier 1 Capital Securities.
COMMITMENTS
251
181
53
34
€ mn
Performance guarantees
Total
4,545
Total
500
Less than one year
Interest
payments
lease
Future
minimum
2019
Present value
of minimum
lease payments
As of 31 December
3,304
€ mn
As of 31 December 2019, the maturities for lease liabilities were as fol-
lows:
AS A LESSEE
The Allianz Group occupies property in many locations under various
long-term leases and has entered into various leases covering the
long-term use of data processing equipment and other office equip-
ment.
38 Lease arrangements
D_Consolidated Financial Statements
151
Annual Report 2019 - Allianz Group
26,249
33,433
Maturities for lease liabilities
169
104
Indemnification contracts
18
21
2018
2019
150
Total
Post-employment benefits
Other long-term benefits
Share-based payment
As of 31 December
Short-term employee benefits
€ mn
5
The carrying amounts in the tables listed above correspond to an
aggregated amortized cost amount of € 28,162 mn (2018:
€ 24,443 mn). This amortized cost amount represents the maximum
exposure to loss for the Allianz Group from these investments. In the
reporting period, the Allianz Group has not provided any financial or
other support to these entities, nor does it intend to provide such sup-
port in the future.
The following table sets out the remuneration of the board members
according to IAS 24.17:
36 Related party transactions
3,725
24,211
4,279
28,858
131
107
1,183
940
4,854
Remuneration of the board members according to IAS 24.17
4
9
20
29
43
Financial guarantees
2018
2019
As of 31 December
€ mn
Guarantees
GUARANTEES
In September 2015 and in January 2017, two separate putative
class action complaints were filed against Allianz Life Insurance
Company of North America (Allianz Life) making allegations similar to
those made in prior class actions regarding the sale of Allianz Life's
annuity products, including allegations of breach of contract and
violation of California unfair competition law. In one matter, the Court
denied class certification. The case, which continued as an individual
action, was settled between the parties with no effect on
Allianz Group's financial position. The ultimate outcome of the remain-
ing case cannot yet be determined.
Allianz Group companies are involved in legal, regulatory, and arbitra-
tion proceedings in Germany and a number of foreign jurisdictions,
including the United States. Such proceedings arise in the ordinary
course of businesses, including, amongst others, their activities as
insurance, banking and asset management companies, employers,
investors and taxpayers. It is not feasible to predict or determine the
ultimate outcome of the pending or threatened proceedings.
Management does not believe that the outcome of these proceedings,
including those discussed below, will have a material adverse effect on
the financial position and the results of operations of the
Allianz Group, after consideration of any applicable provision.
LITIGATION
37 Litigation, guarantees, and other
contingencies and commitments.
Business relations with joint ventures and associates are set on an
arm's length basis.
Transactions between Allianz SE and its subsidiaries that are to be
deemed related parties have been eliminated in the consolidation and
are not disclosed in the notes.
D_Consolidated Financial Statements
Annual Report 2019 - Allianz Group
Further information on the remuneration of board members and trans-
actions with these persons can be found in the Remuneration Report.
39
45
8
4,166
12
In the Pension Task Force, the heads of Group HR, Group
Accounting and Reporting, Group Treasury and Corporate Finance,
Group Actuarial, Planning & Controlling, Group Risk and AIM met four
times to provide global governance and pre-align pension-related
topics such as risk management and Solvency II prior to relevant
Group Committee meetings.
1
January
Outstanding as of 1
€
7,437
7,886
Net income attributable to shareholders -
diluted
(25)
(28)
7,462
143,858
7,914
average
exercise price
Number of
options
Weighted-
Weighted-
average
exercise price
Number of
options
2018
2019
2018
2019
Net income attributable to shareholders - basic
Effect of potentially dilutive shares
€ mn
11,902.16
39,751
153,400
Outstanding as of 31
December
13,081.02
429,996,810
418,749,031
outstanding - diluted
Weighted-average number of shares
428,106,916
1,889,894
95,628
Granted
Potentially dilutive shares
418,653,403
Weighted-average number of shares outstanding - basic
12,063.87
122,972
49,595
(19,084)
(9,625)
14,451.99
11,241.04
(23,492)
(6,717)
Forfeited
Exercised
12,934.96
13,583.45
20,639.22
Earnings per share
Earnings per share are calculated by dividing net income attributable
to shareholders by the weighted-average number of shares outstand-
ing. For the calculation of diluted earnings per share, the nominator
and denominator are adjusted for the effects of potentially dilutive
shares. These effects arise from various share-based compensation plans
of the Allianz Group.
41 Earnings per share
D_Consolidated Financial Statements
Assumptions of Class M-Unit plan
Annual Report 2019 - Allianz Group
156
The following table provides the assumptions used in calculating
the fair value of the M-unit options at grant date:
The fair value of the underlying M-unit options was measured
using the Black-Scholes option pricing model. Volatility was derived in
part by considering the average historical and implied volatility of a
selected group of peers. The expected life of one granted option was
calculated based on treating the three vesting tranches (one third in
years 3, 4, and 5) as three separate awards.
A maximum of 250,000 M-units are authorized for issuance under
the M-unit Plan.
In 2008, Allianz GI L.P. launched a new management share-based pay-
ment incentive plan for certain senior-level executives and affiliates of
PIMCO LLC. Participants in the plan are granted options to acquire an
own class of equity instruments (M-units), which vest in one-third incre-
ments on approximately the third, fourth, and fifth anniversary of the
option grant date. Upon vesting, options will automatically be exer-
cised in a cashless transaction, provided they are in the money. Partic-
ipants may elect to defer the receipt of M-units through the M-unit
Deferral Plan until termination of their service at the latest. With the
M-unit Plan, participants can directly participate in PIMCO's perfor-
mance. Class M-units are non-voting common equity with limited infor-
mation rights. They bear quarterly distributions equal to a pro-rata
share of PIMCO's net distributable income. Deferred M-units have a
right to receive a quarterly cash compensation equal to and in lieu of
quarterly dividend payments.
PIMCO LLC CLASS M-UNIT PLAN
which, individually or in the aggregate, are material to the consoli-
dated financial statements.
As of 31 December 2019, the Allianz Group recorded provisions of
€ 3 mn for these index-linked RSUs in Other liabilities.
1_For detailed information regarding the LTI plans and the new remuneration policy for the members of the Allianz SE's
Board of Management please see the Remuneration Report.
The fair value of the index-linked RSUs is calculated as the present
value of the expected future payout, taking into account the link
The contractual vesting period ends on the tenth trading day
following the annual financial media conference in the year the respec-
tive RSU award expires. The payout per RSU is subject to a 200% share
price cap relative to the share price at the grant date and a 200% cap
applied to the performance factor. In addition, there is a cap applicable
to the total compensation including the LTI payout and various other
compensation components.
RSUS granted to the members of the Board of Management obli-
gate Allianz SE to pay per RSU a cash amount equal to the ten-day
average Xetra closing price of the Allianz SE share on the last day of the
contractual vesting period, multiplied by a performance factor which
reflects the total performance of the Allianz stock relative to the total
performance of the Stoxx Europe 600 Insurance Index during the four-
year contractual vesting period.
Under the LTI plan, awards are granted in the form of index-linked
restricted stock units (RSUs) which are part of a new remuneration
policy¹ for the members of the Allianz SE's Board of Management.
LONG-TERM INCENTIVE PLAN (LTI PLAN)
As of 31 December 2019, the Allianz Group recorded provisions of
€ 426 mn (2018: € 383 mn) for these RSUs in Other liabilities.
The RSUs are accounted for as cash-settled plans because the
Allianz Group intends to settle in cash. Therefore, the Allianz Group ac-
crues the fair value of the RSUs as compensation expenses over the
IFRS vesting period. During the year ended 31 December 2019, the
Allianz Group recognized compensation expenses related to the AEI
plans of € 216 mn (2018: € 96 mn).
1 The AEI RSUs are granted as part of the remuneration of the respective prior year.
2_The assumptions for RSU grants delivered in March 2020 are based on best estimate.
The index-linked RSUs are accounted for as cash-settled plans
because the Allianz Group settles in cash. Therefore, the Allianz Group
accrues the fair value of the RSUs as compensation expenses over the
IFRS vesting period. During the year ended 31 December 2019, the
Allianz Group recognized compensation expenses related to the LTI
plans of € 3 mn.
2019
2018
Weighted-average fair value of options granted
Reconciliation of outstanding M-unit options
The number and weighted-average exercise price of the M-unit
options outstanding and exercisable are as follows:
2.5
2.4
%
11.8
13.2
%
21.0
17.9
%
3.84
3.84
Risk free rate of return
Expected dividend yield
Expected volatility
Expected return (in years)
Assumptions:
412.40
194.79
€
12,019.69
20.2
143,858
Basic earnings per share (€)
0.5
5.6
4.0
0.7
0.8
1.1
2.6
Other attestation services
11.5
0.2
12.8
44.2
Audit services
2018
2019
2018
2019
thereof: PwC GmbH
PwCIL
€ mn
39.6
PwC fees
8.7
3.0
Annual Report 2019 - Allianz Group
158
2_The disclosure in the Annual Report 2018 was based on a best estimate of the RSU grants. The figures shown here for
2018 now include the actual fair value as of the grant date (1 March 2019). The value therefore differs from the amount
disclosed last year.
1_The relevant share price used to determine the final number of RSUs granted is only available after the sign-off of the
Annual Report by the external auditors, thus numbers are based on a best estimate.
In March 2020, Allianz SE has started a new share buy-back program
with a volume of up to € 1.5 bn. For further information, please refer to
the section "Expected dividend development" of the chapter Outlook
2020 within the Group Management Report.
SHARE BUY-BACK PROGRAM 2020
The disposal group Allianz Popular, Madrid, was sold to Banco San-
tander on 31 January 2020. The disposal gain realized on that date
was € 0.5 bn.
SALE OF ALLIANZ POPULAR
In January 2020, Allianz Finance II B.V. issued two certificated liabilities.
The non-interest bearing bond in the amount of € 0.5 bn has a sched-
uled maturity in January 2025. The bond in the amount of € 0.75 bn
with a fixed coupon of 0.5% has a scheduled maturity in January 2031.
11.5
ISSUANCE OF CERTIFICATED LIABILITIES
43 Subsequent events
Tax services primarily refer to tax compliance services, other ser-
vices mainly refer to consulting services.
Audit services primarily relate to services rendered for the audit of the
Allianz Group's consolidated financial statements, the audit of the stat-
utory financial statements of Allianz SE and its subsidiaries, the audit
of the Allianz Group's solvency balance sheet as well as the solvency
balance sheets of Allianz SE and its subsidiaries. In addition, a review
of the Allianz Group's consolidated interim financial statements was
performed.
Tax services
Other services
Total
17.3
17.2
57.8
59.5
4.8
-
For services rendered by PwC GmbH and the worldwide member
firms of PricewaterhouseCoopers International Limited (PwCIL), the
following fees were recognized as an expense in the fiscal year:
(PwC GmbH) is the external auditing firm for the Allianz Group.
(2)
2019
Salaries and wages
€ mn
Personnel expenses
PERSONNEL EXPENSES
As of 31 December 2019, the Allianz Group employed 147,268 (2018:
142,460) people, thereof 38,412 (2018: 38,089) in Germany. The aver-
age total number of employees for the year ended 31 December 2019
was 144,864.
NUMBER OF EMPLOYEES
42 Other information
OTHER SHARE OPTION AND SHAREHOLDING PLANS
The Allianz Group has other local share-based compensation plans,
including share option and employee share purchase plans, none of
2018
The Allianz Group offers Allianz SE shares in 40 countries to entitled
employees at favorable conditions. The shares have a minimum hold-
ing period of three to five years. During the year ended 31 Decem-
ber 2019, the number of shares sold to employees under these plans
was 365,959 (2018: 407,495). From 2018 onwards, the employees re-
ceive one bonus share for three shares bought. For the year ended
31 December 2019, these bonus shares had an equivalent value of
€ 19 mn (2018: € 15 mn).
During the year ended 31 December 2019, the Allianz Group
recorded compensation expenses of € 13 mn (2018: € 14 mn) related
to these share options.
The share options settled by delivery of PIMCO LLC shares are
accounted for as equity-settled plans. Therefore, PIMCO LLC measures
the total compensation expense to be recognized for the equity-
settled shares based on their fair value as of the grant date. The total
compensation expense is recognized over the vesting period.
As of 31 December 2019, the M-unit options outstanding have an
exercise price between € 10,083.74 and € 14,776.84 and a weighted-
average remaining contractual life of 2.87 years.
As of 31 December 2019, the aggregate intrinsic value of share
options outstanding was € 571 mn (2018: € 356 mn).
December
17.43
17.30
18.90
18.83
Diluted earnings per share (€)
Exercisable as of 31
EMPLOYEE STOCK PURCHASE PLANS
9,787
9,213
Social security contributions and employee assistance
Expenses for pensions and other post-retirement benefits
Total
FEES TO THE AUDITOR
PricewaterhouseCoopers GmbH
Board of Management and Supervisory Board compensation by
individual is included in the Remuneration Report. The information
provided there is considered part of these consolidated financial state-
ments.
As of 31 December 2019, there were no outstanding loans
granted by Allianz Group companies to members of the Board of Man-
agement or the Supervisory Board.
The total remuneration for all Supervisory Board members,
including attendance fees, amounted to € 2.7 mn (2018: € 2.7 mn).
In 2019, former members of the Board of Management and their
dependents received remunerations and other benefits totaling
€ 8 mn (2018: € 8 mn), while reserves for current pension obligations
and accrued pension rights totaled € 159 mn (2018: € 152 mn).
RSUS with a total fair value of € 18.3 mn (2018: € 9.4 mn) were
granted to the Board of Management for the year ended 31 Decem-
ber 2019.
The equity-related remuneration in 2019 is comprised of 97,4821
(2018: 61,2502) Restricted Stock Units (RSUs).
The sum of the total remuneration of the Allianz SE Board of Man-
agement for 2019, excluding the pension service cost, amounts to
€ 39 mn (2018 excluding the payments of the MTB 2016-2018 as well
as the pension service cost: € 27 mn).
As of 31 December 2019, the Board of Management is comprised of
ten members. The following values reflect the full Board of Manage-
ment active in the respective year.
REMUNERATION FOR THE BOARD OF MANAGEMENT
AND THE SUPERVISORY BOARD ACCORDING TO
§314(6) HGB
D_Consolidated Financial Statements
157
Annual Report 2019 - Allianz Group
On 13 December 2019, the Board of Management and the Supervi-
sory Board of Allianz SE issued the Declaration of Compliance
according to § 161 AktG, which has been made permanently available
to shareholders on the company's website.
ISSUANCE OF THE DECLARATION OF COMPLIANCE
WITH THE GERMAN CORPORATE GOVERNANCE
CODE ACCORDING TO § 161 AKTG
11,768
12,422
1,203
1,200
1,352
1,435
11,902.16
18.6
Wirtschaftsprüfungsgesellschaft
%
long duration
Germany
Quoted
Equity securities
2.0
1.2
12
As of 31 December
2018
1.1
2019
This includes the following country rates:
Discount rate
Asset allocation of plan assets
As of 31 December
%
Assumptions for defined benefit plans
Annual Report 2019 - Allianz Group
154
The weighted average values of the assumptions for the
Allianz Group's defined benefit plans used to determine the defined
benefit obligation and the recognized expense are as follows:
€ mn
service, and internal Allianz Group retirement projections. Although
this represents the best estimate as of today, considering a further
increase in life expectancy could be reasonable. The weighted
average life expectancy of a currently 65-year-old plan participant is
about 89.3 (2018: 89.2) years for women and 86.5 (2018: 86.5) years for
men. An increase in life expectancy by one year would lead to an in-
crease of the defined benefit obligation by € 833 mn (2018: € 678 mn).
2.0
Debt securities
Life insurance investment products
1.4
1.5
Rate of pension increase
Annuity contracts
1.4
1.9
Rate of compensation increase
Real estate
Non-quoted
1.0
Switzerland
Non-quoted
2.7
2.1
United Kingdom
Quoted
1.6
0.9
short duration
0.3
The calculations are based on current actuarially calculated
mortality tables, projected turnover depending on age and length of
The assumptions for the actuarial computation of the defined benefit
obligation and the recognized expense depend on the circumstances
in the country where the plan has been established.
ASSUMPTIONS
20,479
Germany
Thereof allotted to:
9,091
10,556
thereof liabilities
(239)
(255)
thereof assets
18,153
8,853
40
44
14,624
16,226
23,436
26,483
Balance as of 31 December
(2)
15.8
10,302
10,590
9,586
9,889
During the year ended 31 December 2019, the defined benefit
costs related to post-retirement health benefits amounted to € - mn
(2018: € - mn).
As of 31 December 2019, post-retirement health benefits included in
the defined benefit obligation and in the net amount recognized
amounted to € 11 mn (2018: € 10 mn) and € 11 mn (2018: € 10 mn),
respectively.
4_As of 31 December 2019, € 6,199 mn (2018: € 5,406 mn) of the defined benefit obligation are wholly unfunded, while € 20,285 mn (2018: € 18,030 mn) are wholly or partly funded.
3_Includes for 2018 € 278 mn in Germany due to the change in mortality tables.
1_The asset ceiling is determined by taking into account the reduction of future contributions.
2_Includes for 2019 € 48 mn due to a plan change in the Netherlands.
(81)
(62)
40
44
1,453
1,608
1,332
1,502
Switzerland
(27)
(73)
1,625
1,842
1,598
1,769
8,566
Rate of medical cost trend
0.9
United Kingdom
Other¹
Total
Expected correlation of the Allianz SE share price and index
14.7
%
Expected volatility of the index
17.0
%
(0.5)
%
4.7
%
%
€
2020²
Expected volatility of the Allianz SE share price
Average interest rate
Average dividend yield of Allianz SE share
Share price
Year of issue¹
Assumptions of LTI plans
The following table shows the assumptions used in calculating the
fair value of the index-linked RSUs at grant date:
220.65
88.6
Assumptions of AEI plans
1_The LTI RSUs are granted as part of the remuneration of the respective prior year.
2_The assumptions for RSU grants delivered in March 2020 are based on best estimate.
Allianz SE share price
1.0
Expected volatility of the
4.8
(0.1)
(0.1)
(0.5)
%
Average interest rate
4.9
4.7
%
Allianz SE share
Average dividend yield of
183.80
220.65
€
Share price
2018
2019
2020²
Year of issue¹
between share price performance and relative performance compared
to the index as well as the relevant caps and thresholds as defined in
the payout formula. The expected future payout is determined on the
basis of observable market data as of the valuation date and market
standard simulation techniques.
The following table shows the assumptions used in calculating the
fair value of the RSUs at grant date:
197.34
In addition, upon the death of a plan participant, a change of con-
trol or notice for operational reasons, the RSUs vest immediately and
are exercised by the company.
1_Includes as of 31 December 2019 € 521 mn in cash and cash equivalents in the Netherlands due to a plan change.
14,624
16,226
247
713
998
1,077
3,590
3,877
787
827
1,952
5,473
4,671
14
1,577
1,656
2018
The RSUs are virtual stocks without dividend payments and with
a capped payout. The fair value is calculated by subtracting the net
present value of expected future dividend payments until maturity as
well as the fair value of the cap from the prevailing share price as of
the valuation date. The cap is valued as a European short call option,
using prevailing market data as of the valuation date.
D_Consolidated Financial Statements
2019
The recognized expense is recorded based on the assumptions of the
corresponding previous year.
The discount rate assumption is the most significant risk for the
defined benefit obligation. It reflects market yields at the balance
sheet date of high-quality fixed income investments corresponding to
the currency and duration of the liabilities. In the Eurozone, the
decision for the discount rate is based on AA-rated financial and
corporate bonds, provided by Allianz Investment Data Services (IDS),
and a standardized cash flow profile for a mixed population. The
Allianz Global Risk Parameters (GRIPS) methodology is an internal
development of the Nelson-Siegel model and consistently used by
Group Risk, AIM, and PIMCO.
3,391
The RSU granted to a plan participant obligate the Allianz Group
to pay in cash the ten-day average Xetra closing price of the Allianz SE
share on the vesting day, or to convert one RSU into one Allianz SE
share. The Allianz Group can choose the settlement method for each
unit. The payout is capped at a 200% share price growth above the
grant price.
155
Annual Report 2019 - Allianz Group
The RSUs are subject to a contractual vesting period of four years
and the payout per RSU is fixed on the last day of the contractual vest-
ing period, which ends on the tenth trading day following the annual
financial media conference in the year the respective AEI plan expires.
The AEI plan is granted in the form of restricted stock units (RSUs) and
is part of the variable compensation component for the plan benefi-
ciaries.
ALLIANZ EQUITY INCENTIVE PLAN (AEI PLAN)
40 Share-based compensation plans
D_Consolidated Financial Statements
Defined contribution plans are funded through independent pension
funds or similar organizations. Contributions fixed in advance (e.g.
based on salary) are paid to these institutions and the beneficiary's
right to benefits exists against the pension fund. The employer has no
obligation beyond payment of the contributions.
DEFINED CONTRIBUTION PLANS
During the year ended 31 December 2019, the Allianz Group rec-
ognized expenses for defined contribution plans of € 273 mn (2018:
€ 257 mn). Additionally, the Allianz Group paid contributions for state
pension schemes of € 355 mn (2018: € 329 mn).
CONTRIBUTIONS
In addition to the plan assets of € 16.2 bn (2018: € 14.6 bn), the
Allianz Group has dedicated assets at Group level amounting to
€ 9.3 bn as of 31 December 2019 (2018: € 8.6 bn), which are likewise
managed according to Allianz ALM standards.
The bulk of the plan assets are held by Allianz Versorgungskasse
VVaG, Munich, which is not part of the Allianz Group. Plan assets do
not include any real estate used by the Allianz Group and include only
€3.3 mn (2018: 39.1 mn) of own transferable financial instruments.
Due to a well-diversified portfolio of approximately 140,000
(2018: 137,000) plan participants, no reasonable uncertainty is
expected with regard to future cash flows that could affect the liquidity
of the Allianz Group. The chart below shows the asset allocation:
PLAN ASSETS/ASSET LIABILITY MANAGEMENT (ALM)
Based on the estimated future cash flows of € 819 mn for 2020,
€ 859 mn for 2021, € 898 mn for 2022, € 937 mn for 2023, € 967 mn
for 2024, and € 4,818 mn for 2025 - 2029, the weighted duration of the
defined benefit obligation is 17.5 (2018: 17.2) years. Based on the
liability profiles of the defined benefit obligation and on the regulatory
funding requirements, the Allianz Group uses stochastic asset liability
models to optimize the asset allocation from a risk-return perspective.
An increase in the medical cost trend rate by 100 basis points
would have an effect of € 1 mn (2018: € 1 mn) on the defined benefit
obligation and like last year no material effect on the defined benefit
costs.
An increase of pre-retirement benefit assumptions (e.g. a salary
increase) of 25 basis points would have an effect of € 73 mn (2018:
€ 62 mn) on the defined benefit obligation. However, the increase of
post-retirement assumptions (e.g. inflation-linked increases of pension
payments) of 25 basis points would increase the defined benefit
obligation by € 579 mn (2018: € 494 mn).
An increase in the discount rate by 50 basis points would lead to
a decrease of € 1.7 bn (2018: € 1.5 bn) in the defined benefit
obligation, whereas a decrease in the discount rate by 50 basis points
would lead to an increase of € 2.0 bn (2018: 1.7 bn).
For the year ending 31 December 2020, the Allianz Group expects to
contribute € 341 mn to its defined benefit plans (2018: € 292 mn for
the year ending 31 December 2019) and to pay € 335 mn directly to
participants in its defined benefit plans (2018: € 323 mn for the year
ending 31 December 2019).
The range for the sensitivity calculations was derived by analyzing
the average volatility over a five-year period.
50.0
100.0
100.0
Société Nationale Foncière S.A.L., Beirut
66.0
Windpark PDV GmbH, Pottenbrunn
100.0
36.67
50.0
SOFE One Co. Ltd., Bangkok
100.0
Windpark PL GmbH, Pottenbrunn
Elton Investments S.à r.l., Luxembourg
32.67
Dundrum Retail Limited Partnership, Dublin
Dundrum Retail GP Designated Activity Company,
Dublin
Dundrum Car Park Limited Partnership, Dublin
100.0
Windpark GHW GmbH, Pottenbrunn
100.0
100.0
Dundrum Car Park GP Limited, Dublin
50.0
Société Européenne de Protection et de Services
Windpark LOI GmbH, Pottenbrunn
Windpark Ladendorf GmbH, Vienna
50.0
d'Assistance à Domicile S.A., Paris
56.0
Windpark Les Cent Jalois SAS, Versailles
100.0
Société Foncière Européenne B.V., Amsterdam
100.0
SOFE Two Co. Ltd., Bangkok
Wm. H McGee & Co. Inc., New York, NY
Enhanzed Reinsurance Ltd., Hamilton
100.0
Stam Fem Gångaren 11 AB, Stockholm
100.0
YAO NEWREP Investments S.A., Luxembourg
94.0
GBTC I LP, Singapore
50.0
Starterslening.nl B.V., Amsterdam
60.0
Yorktown Financial Companies Inc., Minneapolis,
Hudson One Ferry JV L.P., Wilmington, DE
100.0
Daiwater Investment Limited, London
45.0 7
StocksPLUS Management Inc., Dover, DE
50.17
100.0
Fiumaranuova S.r.l., Genoa
SpaceCo S.A., Paris
24.97
Windpark Scharndorf GmbH, Pottenbrunn
100.0
Sofiholding S.A., Brussels
100.0
Windpark Zistersdorf GmbH, Pottenbrunn
100.0
ESR India Logistics Fund Pte. Ltd., Singapore
50.0
South City Office Broodthaers SA, Brussels
100.0
Wm. H McGee & Co. (Bermuda) Ltd., Hamilton
Euromarkt Center d.o.o., Ljubljana
50.0
100.0
100.0
100.0
60.0
Société d'Exploitation du Parc Eolien d'Aussac
Vadalle SAS, Paris
166
Annual Report 2019 - Allianz Group
D_Consolidated Financial Statements
%
%
owned¹
100.0
owned¹
Vordere Zollamtsstraße 13 GmbH, Vienna
100.0
Sigma Reparaciones S.L., Madrid
100.0
Weihong (Shanghai) Storage Services Co. Ltd.,
Silex Gas Norway AS, Oslo
SIFCOM Assur S.A., Abidjan
100.0
SDIII Energy GmbH & Co. KG, Pottenbrunn
Servicios Compartidos Multiasistencia S.L., Madrid
100.0
100.0
100.0
MN
100.0
SCI Via Pierre 1, Paris la Défense
100.0
PIMCO Global Advisors (Luxembourg) S.A.,
Primacy Underwriting Management Pty Ltd.,
Luxembourg
100.0
Melbourne
100.0
PIMCO Global Advisors (Resources) LLC, Dover, DE
100.0
Promultitravaux SAS, Paris
100.0
Windpark EDM GmbH & Co. KG, Pottenbrunn
Shanghai
Sirius S.A., Luxembourg
100.0
Société de Production D'électricité D'harcourt
Moulaine SAS, Versailles
CPIC Fund Management Co. Ltd., Shanghai
49.0
Windpark AO GmbH, Pottenbrunn
100.0
Shenyang
100.0
Société d'Energie Eolien Cambon SAS, Versailles
Windpark EDM GmbH, Pottenbrunn
100.0
100.0
Shanghai
49.07
CPPIC Euler Hermes Insurance Sales Co. Ltd.,
50.0
י 44.7
י 44.7
Weilong (Hubei) Storage Services Co. Ltd., Ezhou
100.0
Bajaj Allianz Financial Distributors Limited, Pune
Chapter Master Limited Partnership, London
Columbia REIT - 333 Market Street LP, Wilmington,
DE
%
owned¹
50.0
45.57
94.8
SLC "Allianz Life Ukraine", Kiev
100.0
Weilong (Jiaxing) Storage Services Co. Ltd., Jiaxing
100.0
Società Agricola San Felice S.p.A., Milan
100.0
Weiyi (Shenyang) Storage Services Co. Ltd.,
Columbia REIT-University Circle LP, Wilmington, DE
Companhia de Seguro de Créditos S.A., Lisbon
100.0
100.0
99.5 3
50.0
RMPA Holdings Limited, Colchester
56.07
Guildford
100.0
Niederösterreichische
SC Holding SAS, Paris
Knightsbridge Allianz LP, Bartlesville, OK
50.0
100.0
Glasfaserinfrastrukturgesellschaft mbH, St. Pölten
100.0
TU Allianz Zycie Polska S.A., Warsaw
100.0
nöGIG Phase Zwei GmbH, St. Pölten
TruChoice Financial Group LLC, Minneapolis, MN
Trafalgar Insurance Public Limited Company,
50.0
Queenspoint S.L., Madrid
100.0
BN Infrastruktur GmbH, St. Pölten
74.9
Previndustria - Fiduciaria Previdenza Imprenditori
S.p.A., Milan
50.0
Top Vorsorge-Management GmbH, Vienna
75.0
Towarzystwo Ubezpieczen Euler Hermes S.A.,
Warsaw
COGAR S.à r.L., Paris
100.0
PT IndoAlliz Perkasa Sukses, Jakarta
49.07
100.0
Gesellschaft für Vorsorgeberatung AG, Wallisellen
100.0
100.0
100.0
Scape Investment Operating Company No. 3 Pty
Ltd., Sydney
TUIR Allianz Polska S.A., Warsaw
114 Venture LP, Wilmington, DE
49.5 7
100.0
SES Shopping Center FP 1 GmbH, Salzburg
50.0
UK Logistics PropCo IV S.à r.L., Luxembourg
UK Logistics PropCo III S.à r.L., Luxembourg
100.0
49.6 7
Solunion Compañía Internacional de Seguros y
UK Logistics PropCo V S.à r.L., Luxembourg
100.0
1800 M Street Venture LP, Wilmington, DE
SCI Réau Papin Logistics, Paris la Défense
SCI Stratus, Courbevoie
1515 Broadway Realty LP, Dover, DE
50.0
SES Shopping Center AT1 GmbH, Salzburg
100.0
100.0
Top Versicherungs-Vermittler Service GmbH,
Vienna
Scape Investment Trust No. 3, Sydney
50.0
100.0
UK Logistics GP S.à r.L., Luxembourg
100.0
SCI Docks V2, Paris la Défense
50.0
UK Logistics PropCo I S.à r.L., Luxembourg
100.0
SCI Docks V3, Paris la Défense
50.0
Joint ventures
UK Logistics PropCo II S.à r.L., Luxembourg
50.0
Israel Credit Insurance Company Ltd., Tel Aviv
Bibernelle erste Service GmbH, Vienna
30.07
ZiOst Energy GmbH & Co. KG, Pottenbrunn
100.0
LBA IV-PPII-Retail Venture LLC, Dover, DE
45.0
Cincinnati, OH
100.0
The American Insurance Company Corp.,
The Annuity Store Financial & Insurance Services
LLC, Sacramento, CA
100.0
LPC Logistics Venture One LP, Wilmington, DE
NET4GAS Holdings s.r.o., Prague
31.7 1
50.0
The MI Group Limited, Guildford
Non-consolidated affiliates
45.0
LBA IV-PPII-Office Venture LLC, Dover, DE
51.0
Taone SAS, Paris la Défense
100.0
ZAD Allianz Bulgaria, Sofia
87.4
Italian Shopping Centre Investment S.r.L., Milan
50.0
Téléservices et Sécurité S.à r.L., Châtillon
99.9
ZAD Allianz Bulgaria Zhivot, Sofia
99.0
LBA IV-PPI Venture LLC, Dover, DE
45.0 7
TFI Allianz Polska S.A., Warsaw
100.0
ZAD Energia, Sofia
Allianz Financial Services S.A., Athens
Top Versicherungsservice GmbH, Vienna
100.0
26.23,7
100.0
Top Immo A GmbH & Co. KG, Vienna
Piaf Bidco B.V., Amsterdam
23.67
100.0
Allianz Northern Ireland Limited, Belfast
Allianz Insurance Services Ltd., Athens
100.0
Podium Fund HY REIT Owner LP, Wilmington, DE
44.37
Assurance France Aviation S.A., Paris
100.0
100.0
Porterbrook Holdings | Limited, London
Top Immo Besitzgesellschaft B GmbH & Co. KG,
Vienna
60.07
Ophir-Rochor Commercial Pte. Ltd., Singapore
100.0
99.4
Three Pillars Business Solutions Limited, Guildford
Allianz Global Corporate & Specialty SE Escritório
100.0
NRF (Finland) AB, Västeras
50.0
de Representação no Brasil Ltda., Rio de Janeiro
100.0
NRP Nordic Logistics Fund AS, Oslo
49.57
Tihama Investments B.V., Amsterdam
100.0
Allianz Infrastructure Holding II Pte. Ltd., Singapore
100.0
toconnect GmbH, Lucerne
NeuConnect Britain Ltd., London
Primacy Underwriting Management Limited,
Wellington
25.0
PIMCO Global Advisors (Ireland) Ltd., Dublin
100.0
Rivage Richelieu 1 FCP, Paris
100.0
Parc Eolien de Fontfroide SAS, Versailles
100.0
PIMCO GP XVII LLC, Wilmington, DE
PIMCO GP XVI LLC, Wilmington, DE
100.0
100.0
PIMCO GP XVIII LLC, Wilmington, DE
100.0
Rogge Selective Global High Yield Bond, Istanbul
SA Carène Assurance, Paris
48.0 2,3
100.0
Parc Eolien de Forge SAS, Versailles
100.0
Parc Eolien de Dyé SAS, Versailles
100.0
PIMCO GP XIV LLC, Wilmington, DE
100.0
Real FR Haussmann SAS, Paris la Défense
100.0
Parc Eolien de Chateau Garnier SAS, Versailles
100.0
PIMCO GP XIX LLC, Wilmington, DE
100.0
Redoma 2 S.A., Luxembourg
100.0
Parc Eolien de Croquettes SAS, Versailles
100.0
PIMCO GP XV LLC, Wilmington, DE
100.0
Redoma S.à r.L., Luxembourg
Parc Eolien de la Sole du Bois SAS, Paris
100.0
100.0
100.0
100.0
Parc Eolien de Remigny SAS, Versailles
100.0
PIMCO GP XXIV LLC, Wilmington, DE
100.0
SAS Allianz Etoile, Paris la Défense
SAS 20 pompidou, Paris la Défense
100.0
100.0
PIMCO GP XXIX LLC, Wilmington, DE
100.0
SAS Allianz Forum Seine, Paris la Défense
100.0
Parc Eolien des Joyeuses SAS, Versailles
Parc Eolien des Barbes d'Or SAS, Versailles
100.0
PIMCO GP XXIII Ltd., George Town
100.0
SA Vignobles de Larose, Saint-Laurent-Médoc
100.0
Parc Eolien de Longchamps SAS, Versailles
100.0
PIMCO GP XXI-C LLC, Wilmington, DE
100.0
Saarenkylä Tuulipuisto Oy, Oulu
100.0
Parc Eolien de Ly-Fontaine SAS, Versailles
100.0
PIMCO GP XXII LLC, Wilmington, DE
100.0
Saint-Barth Assurances S.à r.L., Saint Barthelemy
100.0
Parc Eolien de Pliboux SAS, Versailles
PIMCO GP XX LLC, Wilmington, DE
100.0
Parc Eolien de Chaourse SAS, Versailles
Real Faubourg Haussmann SAS, Paris la Défense
100.0
Orion MF TMK, Tokyo
100.0
PIMCO GP IV S.à r.l., Luxembourg
100.0
Q207 S.C.S., Luxembourg
Q 207 GP S.à r.l., Luxembourg
94.0
100.0
PIMCO GP IX LLC, Wilmington, DE
100.0
Quality 1 AG, Bubikon
100.0
Orsa Maggiore PV S.r.L., Milan
Orione PV S.r.l., Milan
100.0
PIMCO GP III LLC, Wilmington, DE
100.0
42.87
PIMCO GP I Canada Corporation, Toronto, ON
PIMCO GP I LLC, Wilmington, DE
100.0
PT Asuransi Allianz Utama Indonesia Ltd., Jakarta
97.8
100.0
PT Blue Dot Services, Jakarta
100.0
Ontario Limited, Toronto, ON
100.0
PIMCO GP II S.à r.l., Luxembourg
100.0
PTE Allianz Polska S.A., Warsaw
100.0
OPCI Allianz France Angel, Paris la Défense
100.0
100.0
PIMCO GP S.à r.L., Luxembourg
Questar Agency Inc., Minneapolis, MN
PIMCO GP XI LLC, Wilmington, DE
100.0
RB Fiduciaria S.p.A., Milan
100.0
Parc Eolien de Bonneuil S.à r.L., Versailles
100.0
100.0
PIMCO GP XII LLC, Wilmington, DE
RE-AA SA, Abidjan
98.5
Parc Eolien de Bruyère Grande SAS, Versailles
100.0
PIMCO GP XIII LLC, Wilmington, DE
100.0
100.0
PAF GP S.à r.l., Luxembourg
100.0 3
RAS Antares, Milan
100.0
Orsa Minore PV S.r.L., Milan
100.0
PIMCO GP V LLC, Wilmington, DE
100.0
Questar Asset Management Inc., Ann Arbor, MI
100.0
Pacific Investment Management Company LLC,
Dover, DE
PIMCO GP VII LLC, Wilmington, DE
100.0
Questar Capital Corporation, Minneapolis, MN
100.0
95.4
PIMCO GP X LLC, Wilmington, DE
100.0
100.0
100.0
PIMCO GP XXV LLC, Wilmington, DE
SAS Allianz Logistique, Paris la Défense
SCI Allianz ARC de Seine, Paris la Défense
100.0
PIMCO BRAVO III Offshore GP Ltd., George Town
100.0
PIMCO RAFI Dynamic Multi-Factor U.S. Equity
Fund, Dublin
SCI Allianz Immobilier Durable, Paris la Défense
100.0 3
100.0
PIMCO Canada Corp., Toronto, ON
100.0
SCI Allianz Invest Pierre, Paris la Défense
100.0
PIMCO REALPATH Blend 2060 Fund, Boston, MA
100.0 3
100.0 3
Developed Equity Fund, Dublin
100.0
PIMCO BRAVO III Offshore GP L.P., George Town
100.0
Saudi NEXTCARE LLC, Al Khobar
68.0
PIMCO Australia Management Limited, Sydney
100.0
PIMCO RAFI Dynamic Multi-Factor Europe Equity
Fund, Dublin
100,0 3
SC Tour Michelet, Paris la Défense
100.0
PIMCO Australia Pty Ltd., Sydney
100.0
SCI 46 Desmoulins, Paris la Défense
100.0
PIMCO RAFI Dynamic Multi-Factor Global
PIMCO Climate Bond Fund, Boston, MA
PIMCO Asia Pte Ltd., Singapore
99.5
100.0
PIMCO Taiwan Ltd., Taipei
100.0
SCI Onnaing Escaut Logistics, Paris la Défense
100.0
Cotas de Fundo de Investimento Multimercado
Investimento no Exterior, Rio de Janeiro
100.0 3
PIMCO Flexible Bond Fundo de Investimento Em
PIMCO-World Bank Gemloc Fund S.A.,
Luxembourg
SCI Pont D'Ain Septembre Logistics, Paris la
Défense
100.0
PIMCO GIS Emerging Markets Opportunities Fund,
Dublin
POD Allianz Bulgaria AD, Sofia
65.9
86.5 3
100.0 3
75.0
SCI ESQ, Paris la Défense
100.0
PIMCO REIT Management LLC, Wilmington, DE
100.0
PIMCO COF II LLC, Wilmington, DE
100.0
SCI Allianz Value Pierre, Paris la Défense
95.6
PIMCO COF III Offshore GP Ltd., George Town
PIMCO Services LLC, Dover, DE
100.0
100.0
SCI AVIP SCPI Selection, Courbevoie
100.0
PIMCO StocksPLUS AR Fund, Dublin
100.0 3
PIMCO Europe Ltd., London
SCI Allianz Messine, Paris la Défense
100.0
100.0 3
100.0
Parc Eolien Les Treize SAS, Paris
100.0
PIMCO GP XXX LLC, Wilmington, DE
100.0
SAS Allianz Serbie, Paris la Défense
100.0
100.0
PCRED CIV LLC, Wilmington, DE
100.0
PIMCO GP XXXI LLC, Wilmington, DE
100.0
SAS Angel Shopping Centre, Paris la Défense
90.0
100.0
Pet Plan Ltd., Guildford
SAS Allianz Rivoli, Paris la Défense
100.0
PIMCO GP XXVIII LLC, Wilmington, DE
100.0
Parc Eolien des Mistandines SAS, Paris
100.0
PIMCO GP XXVI LLC, Wilmington, DE
100.0
SAS Allianz Platine, Paris la Défense
100.0
Parc Eolien des Quatre Buissons SAS, Paris
100.0
PIMCO GP XXVII LLC, Wilmington, DE
100.0
SAS Allianz Prony, Paris la Défense
100.0
Parc Eolien du Bois Guillaume SAS, Paris
100.0
PIMCO Investment Management (Shanghai)
Markets Equity Fund, Dublin
PFP Holdings Inc., Dover, DE
Limited, Shanghai
PGREF V 1301 Sixth Investors I LP, Wilmington, DE
100.0
Ltda., Rio de Janeiro
100.0
PIMCO (Schweiz) GmbH, Zurich
100.0
100.0
PIMCO RAE Fundamental US Fund, Dublin
SAS Société d'Exploitation du Parc Eolien de
Nélausa, Versailles
100.0
PIMCO Asia Ltd., Hong Kong
100.0
PIMCO RAFI Dynamic Multi-Factor Emerging
Sättravallen Wind Power AB, Strömstad
86.6 3
SAS Passage des princes, Paris la Défense
PIMCO Latin America Administradora de Carteiras
100.0
100.0
SAS Boutique Vignoble de Larose, Saint-Laurent-
Médoc
100.0
PGA Global Services LLC, Dover, DE
100.0
PIMCO Investments LLC, Dover, DE
100.0
SAS Chaponnay Mérieux Logistics, Paris la Défense
100.0
PGREF V 1301 Sixth Investors I LLC, Wilmington,
PIMCO Japan Ltd., Road Town
100.0
SAS Madeleine Opéra, Paris la Défense
100.0
DE
100.0
Reaseguros SA, Madrid
Allianz Risk Consulting GmbH, Munich
UK Logistics S.C.Sp., Luxembourg
100.0 3
Allianz RFG Fonds, Frankfurt am Main
100.0
Allianz Direct Versicherungs-AG, Munich
100.0
mbH, Munich
AZ-Argos 71 Vermögensverwaltungsgesellschaft
100.0
Allianz Renewable Energy Subholding GmbH & Co.
KG, Sehestedt
100.0
Allianz Digital Health GmbH, Munich
100.0
AZ-Argos 41 Vermögensverwaltungsgesellschaft
mbH, Munich
100.0
AZ-Argos 56 Vermögensverwaltungsgesellschaft
100.0
Allianz DLVR Fonds, Frankfurt am Main
100.0 3
AZL PE Nr. 1 GmbH, Munich
Allianz SE Ashmore Emerging Markets Corporates
Fund, Frankfurt am Main
Allianz Esa cargo & logistics GmbH, Bad
Friedrichshall
100.0
Allianz EP GmbH, Munich
100.0
100.0 3
AZL AI Nr. 1 GmbH, Munich
Allianz SDR Fonds, Frankfurt am Main
100.03
Allianz EEE Fonds, Frankfurt am Main
100.0
mbH & Co. KG, Munich
100.0
100.0 3
Sehestedt
Allianz Deutschland AG, Munich
Allianz Renewable Energy Management GmbH,
AZ ATLAS Verwaltungs-GmbH, Stuttgart
92.43
Allianz PV-RD Fonds, Frankfurt am Main
100.0
Allianz Beratungs- und Vertriebs-AG, Munich
100.0
100.0
AZ ATLAS Immo GmbH, Stuttgart
Allianz PV WS Fonds, Frankfurt am Main
100.0
94.9
AZ ATLAS GmbH & Co. KG, Stuttgart
Allianz AZL Vermögensverwaltung GmbH & Co.
KG, Munich
92.4 3
92.4 3
Allianz Capital Partners GmbH, Munich
100.0
4
100.0
Allianz Climate Solutions GmbH, Munich
100.0
Munich
100.0
Allianz Rechtsschutz-Service GmbH, Munich
100.0
AZ-Arges Vermögensverwaltungsgesellschaft mbH,
100.0
Allianz Real Estate GmbH, Munich
Allianz Capital Partners Verwaltungs GmbH,
Munich
94.0
AZ Northside GmbH & Co. KG, Stuttgart
100.0 3
Allianz Re Asia, Frankfurt am Main
100.0
100.0 3
AZL-Argos 73 Vermögensverwaltungsgesellschaft
100.0
100.0 3
Allianz GLRS Fonds, Frankfurt am Main
100.0
AZ-SGD Infrastrukturfonds GmbH, Munich
100.0 3
Allianz VAE Fonds, Frankfurt am Main
Allianz Versicherungs-Aktiengesellschaft, Munich
100.0 3
100.0
AZ-SGD Direkt Infrastruktur GmbH, Munich
100.0 3
Allianz UGD 1 Fonds, Frankfurt am Main
100.0
Allianz Global Investors GmbH, Frankfurt am Main
Allianz GLR Fonds, Frankfurt am Main
100.0
AZ-SGD Private Equity Fonds 2 GmbH, Munich
100.0
Allianz VKA Fonds, Frankfurt am Main
100.0
Allianz Handwerker Services GmbH, Aschheim
100.0
AZT Automotive GmbH, Ismaning
100.0 3
Allianz VGL Fonds, Frankfurt am Main
100.0 3
Allianz GRGB Fonds, Frankfurt am Main
100.0
AZ-SGD Private Equity Fonds GmbH, Munich
100.0 3
Allianz VGI 1 Fonds, Frankfurt am Main
100.0 3
Allianz GLU Fonds, Frankfurt am Main
100.0
Allianz PV 1 Fonds, Frankfurt am Main
AZ-SGD Classic Infrastrukturfonds GmbH, Munich
100.0
Allianz SOA Fonds, Frankfurt am Main
100.0
mbH, Munich
100.0 3
Allianz FAD Fonds, Frankfurt am Main
AZL-Argos 83 Vermögensverwaltungsgesellschaft
100.0 3
100.0
51.0
Allianz Esa EuroShip GmbH, Bad Friedrichshall
100.0
mbH, Munich
100.0 3
Allianz SE-PD Fonds, Frankfurt am Main
Allianz Service Center GmbH, Munich
Allianz Finanzbeteiligungs GmbH, Munich
100.0
AZL-Private Finance GmbH, Stuttgart
AZS-Arges Vermögensverwaltungsgesellschaft
mbH, Munich
100.0
Allianz Technology SE, Munich
Allianz Treuhand GmbH, Stuttgart
100.0
Allianz Global Health GmbH, Munich
100.0
Allianz Global Corporate & Specialty SE, Munich
99.5
100.0 3
AZRE AZD P&C Master Fund, Munich
100.0
Allianz Stromversorgungs-GmbH, Munich
Allianz Taunusanlage GbR, Stuttgart
100.0
Allianz Focus Teleport Beteiligungs-GmbH & Co.
KG, Stuttgart
100.0
100.0
100.0
Rüsselsheim
100.0
100.0 3
Allianz LFE Fonds, Frankfurt am Main
100.0
100.0
APKV Infrastrukturfonds GmbH, Munich
100.0
ADAC Autoversicherung AG, Munich
100.0
Allianz Lebensversicherungs-Aktiengesellschaft,
Stuttgart
ACP Vermögensverwaltung GmbH & Co. KG Nr. 4d,
Munich
100.0
100.0
100.0
APK-Argos 85 Vermögensverwaltungsgesellschaft
mbH, Munich
APKV Direkt Infrastruktur GmbH, Munich
51.0
Allianz L-PD Fonds, Frankfurt am Main
100.0
Vermögensverwaltungsgesellschaft mbH, Munich
APKV-Argos 84
100.0
Allianz OrtungsServices GmbH, Munich
60.0
ADVANIA GmbH, Hamburg
100.0
Vermögensverwaltungsgesellschaft mbH, Munich
100.0
Allianz of Asia-Pacific and Africa GmbH, Munich
79.6
ADEUS Aktienregister-Service-GmbH, Munich
100.0
APKV Private Equity Fonds GmbH, Munich
APKV-Argos 74
3
Allianz Leben Private Equity Fonds Plus GmbH,
Munich
100.0
ACP Vermögensverwaltung GmbH & Co. KG Nr. 4c,
Munich
100.0
100.0
100.0
Allianz Leben Direkt Infrastruktur GmbH, Munich
Allianz Leben Infrastrukturfonds GmbH, Munich
Allianz Leben Private Equity Fonds 1998 GmbH,
Munich
100.0
abracar GmbH, Munich
Consolidated affiliates
Allianz VW AV Fonds, Frankfurt am Main
Allianz Warranty GmbH, Unterföhring
Allianz X GmbH, Munich
GERMANY
owned¹
owned¹
%
%
44 List of participations of the Allianz Group as of 31 December 2019 according to § 313 (2) HGB
D_Consolidated Financial Statements
%
owned¹
100.0 3
100.0
100.0
100.0
APK-Argos 75 Vermögensverwaltungsgesellschaft
mbH, Munich
Allianz Leben Private Equity Fonds 2008 GmbH,
Munich
ACP Vermögensverwaltung GmbH & Co. KG Nr. 4a,
Munich
100.0
100.0
100.0
APK Infrastrukturfonds GmbH, Munich
Allianz Leben Private Equity Fonds 2001 GmbH,
Munich
ACP Vermögensverwaltung GmbH & Co. KG Nr. 4,
Munich
0.0 2
ACP GmbH & Co. Beteiligungen KG II, Munich
100.0
Allvest GmbH, Munich
100.0
100.0
100.0 3
AfricaGrow GP GmbH, Munich
Allianz Partners Deutschland GmbH, Aschheim
Allianz Private Equity Partners Verwaltungs GmbH,
100.0 3
Allianz AKR Fonds, Frankfurt am Main
100.0
atpacvc GP GmbH, Munich
100.0
Allianz ALD Fonds, Frankfurt am Main
Allianz Private Equity GmbH, Munich
Allianz Africa Holding GmbH, Munich
100.0
atpacvc GmbH, Munich
100.0 3
Allianz PKV-PD Fonds, Frankfurt am Main
100.03
100.0
100.0 3
Munich
100.0
Allianz Asset Management GmbH, Munich
AVS Automotive VersicherungsService GmbH,
100.0
Allianz ProzessFinanz GmbH, Munich
100.0
Allianz Argos 14 GmbH, Munich
100.0
100.0
Aktiengesellschaft, Munich
Auros II GmbH, Munich
Allianz Private Krankenversicherungs-
100.0 3
Allianz APAV Fonds, Frankfurt am Main
100.0
Atropos Vermögensverwaltungsgesellschaft mbH,
Munich
Allianz AADB Fonds, Frankfurt am Main
100.0
100.0
100.0 3
100.0
mbH, Munich
100.0
Allianz Pension Partners GmbH, Munich
AGCS-Argos 76 Vermögensverwaltungsgesellschaft
100.0
ARE Funds AZV GmbH, Munich
ARE Funds AZL GmbH, Munich
Allianz Pension Direkt Infrastruktur GmbH, Munich
100.0
AGCS Infrastrukturfonds GmbH, Munich
100.0
ARE Funds APKV GmbH, Munich
100.0
100.0
100.0
Allianz Pension Service GmbH, Munich
100.0
Allianz PK-PD Fonds, Frankfurt am Main
94.8
100.0
AREF III GER GmbH & Co. KG, Frankfurt am Main
100.0
Allianz Pensionskasse Aktiengesellschaft, Stuttgart
ALIDA Grundstücksgesellschaft mbH & Co. KG,
Hamburg
100.0
AREF III GER 2 GmbH, Frankfurt am Main
100.0
Allianz Pensionsfonds Aktiengesellschaft, Stuttgart
100.0
100.0
AREF III GER 1 GmbH, Frankfurt am Main
AGCS-Argos 86 Vermögensverwaltungsgesellschaft
mbH, Munich
atpacvc Fund GmbH & Co. KG, Munich
AZV-Argos 72 Vermögensverwaltungsgesellschaft
Allianz Hirschgarten GmbH & Co. KG, Stuttgart
100.0
Data Quest SAL, Beirut
SAS Alta Gramont, Paris
36.0
49.0
Waterford Blue Lagoon LP, Wilmington, DE
49.0
30.07
Delgaz Grid S.A., Târgu Mures
Delong Limited, Hong Kong
Scape Investment Operating Company No. 2 Pty
Ltd., Sydney
50.0 8
16.48
Associates
Scape Investment Trust No. 2, Sydney
30.0
VISION (III) Pte Ltd., Singapore
33.3
38.3 3
14.3 8
Valley (III) Pte. Ltd., Singapore
41.5
CBRE Dutch Office Fund, Schiphol
26.03
VGP European Logistics 2 S.à r.L., Senningerberg
50.0
Chicago Parking Meters LLC, Wilmington, DE
49.9
VGP European Logistics S.à r.L., Senningerberg
50.0
CPIC Allianz Health Insurance Co. Ltd., Shanghai
22.9
Quadgas Holdings Topco Limited, Saint Helier
Redwood Japan Logistics Fund II LP, Singapore
Residenze CYL S.p.A., Milan
13.08
50.0 3,8
Hamilton
Douglas Emmett Partnership X LP, Wilmington, DE
Allianz Centrafrique Assurances SA, Bangui
Allianz EFU Health Insurance Ltd., Karachi
Allianz Fóndika S.A. de C.V., Mexico City
49.0
Allianz Invest Vorsorgefonds, Vienna
28.0 3
SNC Alta CRP La Valette, Paris
49.0
Global Stream Limited, Hong Kong
Four Oaks Place LP, Wilmington, DE
16.48
Singapore
27.7
Glory Basic Limited, Hong Kong
16.4 8
SNC Société d'aménagement de la Gare de l'Est,
Paris
49.0
Alpha Asia Macro Trends Fund III Private Limited,
49.0
SNC Alta CRP Gennevilliers, Paris
73,3 3,8
44.2
SCI Bercy Village, Paris
49.0
ERES APAC II (GP) S.à r.L., Luxembourg
30.7 3
49.0
Sino Phil Limited, Hong Kong
16.4 8
26.8
European Outlet Mall Fund FCP-FIS, Luxembourg
Exeter Industrial Core Fund III LP, Wilmington, DE
25.9 3
SK Versicherung AG, Vienna
25.8
30.0 3
Allianz France Investissement IV, Paris
28.6
Archstone Multifamily Partners AC JV LP,
38.33
50.0
Tempo Multiasistencia Gestão de Rede Ltda.,
Barueri
50.0
Valderrama S.A., Luxembourg
100.0
AMLI-Allianz Investment LP, Wilmington, DE
75.07
100.0
Terminal Venture LP, Wilmington, DE
Vanilla Capital Markets S.A., Luxembourg
100.0
AS Gasinfrastruktur Beteiligung GmbH, Vienna
55.67
The FIZZ Student Housing Fund S.C.S., Luxembourg
49.5 7
28.97
Vailog Hong Kong DC19 Limited, Hong Kong
50.0
Allee-Center Kft., Budapest
100.0
30 HY WM REIT Owner LP, Wilmington, DE
49.0 7
UP 36 SA, Brussels
53 State JV L.P., Wilmington, DE
49.07
Spanish Gas Distribution Investments S.à r.l.,
Luxembourg
40.07
100.0
A&A Centri Commerciali S.r.l., Milan
50.0
SPREF II Pte. Ltd., Singapore
50.0
Vailog Hong Kong DC17 Limited, Hong Kong
100.0
VertBois S.à r.l., Luxembourg
Carlyle China Rome Logistics L.P., George Town
100.0
Wilmington, DE
80.0 7
Annual Report 2019 - Allianz Group
167
D_Consolidated Financial Statements
%
%
DE
%
owned¹
owned¹
Triskelion Property Holding Designated Activity
Company, Dublin
Carlyle China Realty L.P., George Town
50.0 3,8
Professional Agencies Reinsurance Limited,
owned¹
100.0 3
Volta, Paris
50.0
44.77
The State-Whitehall Company LP, Dover, DE
49.97
Vet Envoy Limited, Colwyn Bay
100.0
Vigny Depierre Conseils SAS, Archamps
100.0
AZ/JH Co-Investment Venture (DC) LP, Wilmington,
DE
80.0 7
Tokio Marine Rogge Asset Management Ltd.,
London
50.0
Viveole SAS, Versailles
100.0
AZ/JH Co-Investment Venture (IL) LP, Wilmington,
TopTorony Ingatlanhasznosító Zrt., Budapest
Austin West Campus Student Housing LP,
50.0
Helios Silesia Holding B.V., Amsterdam
Strategic Fintech Investments S.A., Luxembourg
16.48
The Allianz Group refrains from disclosure of participations which are
not included in one of the above categories, as they are of minor im-
portance for giving a true and fair view of the assets, liabilities, financial
position, and profit or loss of the Allianz Group.
168
Annual Report 2019 - Allianz Group
100.0
25.0
16.48
SDA SE Open Industry Solutions, Hamburg
Windpark Dahme GmbH & Co. KG, Sehestedt
Windpark Eckolstädt GmbH & Co. KG, Sehestedt
Berlin
Deutsche Lebensversicherungs-Aktiengesellschaft,
28.0
Norsea Gas GmbH, Friedeburg-Etzel
94.8
100.0
5.1 3,8
PIMCO ILS Fund SP II, George Town
Praise Creator Limited, Hong Kong
Prime Space Limited, Hong Kong
25.0
Best Regain Limited, Hong Kong
16.4 8
Vienna
49.0
7_Classified as joint venture according to IFRS 11.
Blue Vista Student Housing Select Strategies Fund
L.P., Dover, DE
PIMCO GIS Emerging Markets Bond ESG Fund,
Dublin
8_Classified as associate according to IAS 28.
23.03
24.9
Broker on-line de Productores de Seguros S.A.,
Buenos Aires
PIMCO ILS Fund SP I, George Town
1.0 3,8
30.0
Brunei National Insurance Company Berhad Ltd.,
Bandar Seri Begawan
BrahmsQ Objekt GmbH & Co. KG, Stuttgart
6_Insolvent.
100.0
Instamotion Retail GmbH, Grünwald
Annual Report 2019 - Allianz Group
100.0
mbH, Munich
AZV-Argos 77 Vermögensverwaltungsgesellschaft
100.0 3
100.0 3
3 Allianz VSR Fonds, Frankfurt am Main
159
100.0
100.0
Allianz Investment Management SE, Munich
Allianz LAD Fonds, Frankfurt am Main
100.0
mbH, Munich
100.0 3
Allianz VKRD Fonds, Frankfurt am Main
Allianz V-PD Fonds, Frankfurt am Main
D_Consolidated Financial Statements
%
owned¹
%
25.0
InnoSolutas GmbH, Bad Friedrichshall
100.0
Windpark Calau GmbH & Co. KG, Sehestedt
Windpark Cottbuser See GmbH & Co. KG,
Sehestedt
100.0
AZV-Argos 87 Vermögensverwaltungsgesellschaft
mbH, Munich
100.0
95.0 8
Euler Hermes Rating GmbH, Hamburg
100.0
Windpark Büttel GmbH & Co. KG, Sehestedt
AZV-Argos 82 Vermögensverwaltungsgesellschaft
mbH, Munich
owned¹
owned¹
%
25.6
45.0
OeKB EH Beteiligungs- und Management AG,
Berkshire India Private Limited, New Delhi
Link (LRM) Limited, Hong Kong
16.4 8
Areim Fastigheter 3 AB, Stockholm
Tikehau Real Estate III SPPICAV, Paris
12.28
31.6
23.3
Long Coast Limited, Hong Kong
Assurcard N.V., Haasrode
UK Outlet Mall Partnership LP, Edinburgh
19.5 8
20.0
Luxury Gain Limited, Hong Kong
16.4 8
16.4 8
16.4 8
Sure Rainbow Limited, Hong Kong
Areim Fastigheter 2 AB, Stockholm
12.4 8
Wilmington, DE
40.0
IndInfravit Trust, Chennai
25.0
Summer Blaze Limited, Hong Kong
16.4 8
Archstone Multifamily Partners AC LP, Wilmington,
DE
Jumble Succeed Limited, Hong Kong
16.4 8
Supreme Cosmo Limited, Hong Kong
16.4 8
28.6
Lennar Multifamily Venture LP, Wilmington, DE
11.38
Autoelektro tehnicki pregledi d.o.o., Vojnić
20.0
Wildlife Works Carbon LLC, San Francisco, CA
49.0
30.9
3_Investment fund.
Beacon Platform Incorporated, Wilmington, DE
New Path S.A., Buenos Aires
40.0
26.9
MTech Capital Fund (EU) SCSp, Luxembourg
Berkshire Hathaway Services India Private Limited,
New Delhi
16.4 8
4_Releasing impact according to § 264 (3) HGB through the Allianz Group's
consolidated financial statements.
20.0
Ocean Properties LLP, Singapore
20.0
5_Group share through indirect holder Roland Holding GmbH, Munich:
75.6%.
New Try Limited, Hong Kong
34.3
Bazalgette Equity Ltd., London
2_Classified as affiliate according to IFRS 10.
Medgulf Takaful B.S.C.(c), Manama
25.0
AWP Insurance Brokerage (Beijing) Co. Ltd., Beijing
100.0
Bajaj Allianz General Insurance Company Ltd.,
Pune
MFM Holding Ltd., London
36.9
Milvik AB, Stockholm
34.9
26.0
1_Percentage includes equity participations held by dependent entities in
full, even if the Allianz Group's share in the dependent entity is below
100 %.
Bajaj Allianz Life Insurance Company Ltd., Pune
26.0
Modern Diamond Limited, Hong Kong
16.4 8
9.2 8
Northstar Mezzanine Partners VI U.S. Feeder II L.P.,
Dover, DE
100.0
NEXTCARE Tunisie LLC, Tunis
Allianz Infrastructure Norway Holdco | S.à r.L.,
Luxembourg
Allianz Madagascar Assurances SA, Antananarivo
100.0
100.0
Allianz Private Credit Fund S.A. SICAV-RAIF,
Senningerberg
100.0 3
Allianz Infrastructure Spain Holdco | S.à r.L.,
Luxembourg
Allianz Malaysia Berhad p.l.c., Kuala Lumpur
75.0
Allianz Private Equity Partners Europa II, Milan
92.03
100.0
100.0
Allianz Management Services Limited, Guildford
Allianz Private Equity Partners Europa III, Milan
99.63
Allianz Infrastructure Spain Holdco II S.à r.L.,
Luxembourg
100.0
Allianz Marine & Transit Underwriting Agency Pty
Ltd., Sydney
Allianz Private Equity Partners IV, Milan
100.0
75.0
Allianz Insurance Company of Ghana Limited,
Accra
Allianz Marine (UK) Ltd., Ipswich
100.0
Allianz Private Equity Partners V, Milan
100.0
92.4
Allianz Presse US REIT LP, Wilmington, DE
Allianz Life Luxembourg S.A., Luxembourg
60.0
100.0
Allianz Infrastructure Luxembourg Holdco III S.A.,
Luxembourg
Allianz Life Insurance Company of North America,
Minneapolis, MN
100.0
Allianz Popular Vida Compañía de Seguros y
Reaseguros S.A., Madrid
100.0
100.0
Allianz Life Insurance Japan Ltd., Tokyo
100.0
Allianz Presse Infra GP S.à r.l., Luxembourg
92.4
Allianz Infrastructure Luxembourg Holdco IV S.A.,
Allianz Life Insurance Lanka Ltd., Colombo
100.0
Luxembourg
100.0
Allianz Presse Infra S.C.S., Luxembourg
92.4
Allianz Infrastructure Luxembourg I S.à r.l.,
Allianz Life Insurance Malaysia Berhad p.l.c., Kuala
Lumpur
Allianz Presse US REIT GP LLC, Wilmington, DE
92.4
100.0
Luxembourg
100.0
100.0 3
100.0
100.0
Allianz Properties Limited, Guildford
86.7 3
100.0
Allianz Real Estate Trust III (1), Sydney
97.93
Allianz Inversiones S.A., Bogotá D.C.
Allianz Multi Equilibre, Paris
98.93
100.0
Allianz Real Estate Trust III (2), Sydney
97.93
Allianz Invest 10 Division S/U, Vienna
100.03
Allianz Multi Dynamisme, Paris
Allianz Multi Harmonie, Paris
Allianz Reinsurance America Inc., Los Angeles, CA
100.0
Allianz Invest 11 Division Leben/Kranken, Vienna
100.0 3
Allianz Multi Horizon 2024-2026, Paris
62.13
Allianz Invest 12 Division Leben/Kranken, Vienna
100.0 3
Allianz Multi Horizon 2027-2029, Paris
67.33
Allianz Renewable Energy Fund III GP SCSP,
Senningerberg
100.0
99.4 3
Allianz International Ltd., Guildford
99.2 3
Allianz Real Estate Trust II (2), Sydney
100.0
98.9
Allianz Insurance Company of Kenya Limited,
Nairobi
Allianz Re Dublin dac, Dublin
100.0
100.0
Allianz MENA Holding (Bermuda) Ltd., Hamilton
100.0
Allianz Insurance Company-Egypt S.A.E., New
Cairo
Allianz México S.A. Compañía de Seguros, Mexico
Allianz Real Estate Investment S.A., Luxembourg
100.0
City
100.0
Allianz Real Estate of America LLC, New York, NY
100.0
95.0
Allianz Mid Cap Loans FCT, Paris
100.0 3
Allianz Insurance Lanka Limited, Colombo
100.0
Allianz Real Estate Trust II (1), Sydney
99.23
Allianz Insurance plc, Guildford
Allianz Multi Croissance, Paris
75.63
100.0
Allianz Maroc S.A., Casablanca
Allianz Invest 50, Vienna
Allianz Popular Pensiones EGFP S.A., Madrid
Allianz Popular S.L., Madrid
Allianz Life Insurance Company of New York, New
York, NY
100.0 3
Allianz Colombia S.A., Bogotá D.C.
100.0
Allianz Fund Investments Inc., Wilmington, DE
100.0
Allianz Combinatie Fonds, Rotterdam
100.0 3
Allianz Impact Investment Fund S.A. SICAV-RAIF,
Senningerberg
100.0 3
Allianz Fund Investments S.A., Luxembourg
100.0
Allianz Compañía de Seguros y Reaseguros S.A.,
Madrid
100.0
Allianz IndexManagement Balance, Senningerberg
Allianz Garantie Fonds 3%, Rotterdam
100.0 3
99.9
Allianz IndexManagement Chance, Senningerberg
99.4 3
Allianz Garantie Fonds 4,75%, Rotterdam
100.0 3
Allianz Congo Assurances SA, Brazzaville
100.0
Allianz IndexManagement Substanz,
Allianz Garantiefonds 3,35%, Rotterdam
Allianz Côte d'Ivoire Assurances SA, Abidjan
97.33
Allianz Impact Green Bond, Paris
Luxembourg
Allianz Fund Investments 2 S.A. (Compartment),
Allianz France S.A., Paris la Défense
100.0
Allianz HY Investor GP LLC, Wilmington, DE
100.0
Allianz Carbon Investments B.V., Amsterdam
100.0
Allianz France US REIT GP LLC, Wilmington, DE
100.0
Allianz HY Investor LP, Wilmington, DE
100.0
Allianz Cash SAS, Paris la Défense
100.0
Allianz France US REIT LP, Wilmington, DE
100.0
Allianz IARD EM Debt, Paris
100.0 3
Allianz Chicago Private Reit LP, Wilmington, DE
100.0
Allianz China Insurance Holding Limited, Shanghai
Allianz China Life Insurance Co. Ltd., Shanghai
Allianz Fund Administration and Management B.V.,
Rotterdam
Allianz IARD S.A., Paris la Défense
100.0
100.0
100.0
Allianz IARD Vintage, Paris
100.0 3
51.0
100.0 3
100.0
Senningerberg
99.63
100.0
Allianz Global AC Equity Insights Fund, London
Allianz Global Aggregate Bond, Senningerberg
Allianz Global Corporate & Specialty do Brasil
Participações Ltda., Rio de Janeiro
97.03
Allianz Infrastructure Czech HoldCo I S.à r.l.,
Luxembourg
100.0
98.63
Allianz Infrastructure Czech HoldCo II S.à r.L.,
Luxembourg
100.0
100.0
Annual Report 2019 - Allianz Group
161
Allianz Debt Investments S.à r.L., Luxembourg
D_Consolidated Financial Statements
%
owned¹
%
owned¹
Allianz Infrastructure Holding I Pte. Ltd., Singapore
Allianz Infrastructure Luxembourg Holdco I S.A.,
Luxembourg
100.0
Allianz Life Insurance Company of Missouri,
Clayton, MO
100.0
Allianz Popular Asset Management SGIIC S.A.,
Madrid
100.0
100.0
Allianz Infrastructure Luxembourg Holdco II S.A.,
Luxembourg
%
owned¹
99.9
Allianz Debt Fund SCSP SICAV-SIF, Luxembourg
100.0
Allianz Côte d'Ivoire Assurances Vie SA, Abidjan
Allianz Garantiefonds 5%, Rotterdam
100.0 3
71.0
Allianz IndexManagement Wachstum,
Allianz Creactions 1, Paris
100.0 3
Allianz General Insurance Co. Ltd., Bangkok
100.0
Senningerberg
96.2 3
Allianz Creactions 2, Paris
100.0 3
Allianz General Insurance Company (Malaysia)
Berhad p.l.c., Kuala Lumpur
Allianz Individual Insurance Group LLC,
Minneapolis, MN
100.0
100.0
Allianz Crowdfunding Fund I FPCI, Paris
100.0³
Allianz General Laos Ltd., Vientiane
51.0
Allianz Informatique G.I.E., Paris la Défense
100.0
Allianz Crowdlending FSPI, Paris
100.0 3
Allianz Debt Fund S.à r.L., Luxembourg
74.1
100.0 3
Allianz Invest Cash, Vienna
88.63
Allianz PNB Life Insurance Inc., Makati City
51.0
Allianz S.p.A., Trieste
100.0
Allianz Life Insurance Company of Ghana Limited,
Allianz pojistovna a.s., Prague
100.0
Accra
Allianz Saint Marc CL, Paris
100.0 3
100.0
Allianz Polska Services Sp. z o.o., Warsaw
100.0
100.0
100.0
162
Annual Report 2019 - Allianz Group
D_Consolidated Financial Statements
%
%
%
owned¹
owned¹
owned¹
Allianz Sakura Multifamily 2 Pte. Ltd., Singapore
100.0
Allianz Sakura Multifamily 1 Pte. Ltd., Singapore
Allianz Life Insurance Company Ltd., Moscow
100.0
Allianz S.A. de C.V., Mexico City
Allianz Risk Consultants Inc., Los Angeles, CA
100.0
Allianz Pensionskasse Aktiengesellschaft, Vienna
100.0
Allianz Life (Bermuda) Ltd., Hamilton
100.0
Allianz Risk Transfer (Bermuda) Ltd., Hamilton
100.0
Allianz penzijní spolecnost a.s., Prague
100.0
Allianz Life Assurance Company-Egypt S.A.E., New
Cairo
Allianz Risk Transfer (UK) Limited, London
100.0
Allianz Pet and Animal Wellbeing, Senningerberg
51.6 3
100.0
Allianz Risk Transfer AG, Schaan
100.0
Allianz Life Financial Services LLC, Minneapolis,
Allianz Pimco Corporate, Vienna
90.8 3
Allianz Risk Transfer Inc., New York, NY
100.0
MN
100.0
Allianz Pimco Mortgage, Vienna
91.3 3
Allianz Sakura Multifamily 3 Pte. Ltd., Singapore
100.0
100.0
atpacvc Ltd., London
100.0
AVS Automotive VersicherungsService GmbH,
Vienna
100.0
Company, Riyadh
51.0
Allianz US Private REIT LP, Wilmington, DE
100.0
AWP Argentina S.A., Buenos Aires
100.0
Allianz Secteur Euro Immobilier, Paris
95.2 3
Allianz Valeurs Durables, Paris
Allianz US Private REIT GP LLC, Wilmington, DE
57.93
100.0
Allianz Secteur Europe Immobilier, Paris
89.8 3
Allianz Value S.r.L., Trieste
100.0
AWP Assistance Ireland Limited, Dublin
100.0
Allianz Sécurité, Paris
94.4 3
Allianz Vermogen B.V., Rotterdam
100.0
AWP Assistance Service España S.A., Madrid
AWP Assistance (India) Private Limited, Gurgaon
Allianz Saudi Fransi Cooperative Insurance
100.0
Allianz Saúde S.A., São Paulo
100.0
100.0
Auriga MF GK, Tokyo
99.0
Allianz Sakura Multifamily Lux GP S.à r.L.,
Allianz US Investment GP LLC, Wilmington, DE
100.0
Avip Actions 60, Paris
100.0 3
Luxembourg
100.0
Allianz US Investment LP, Wilmington, DE
100.0
Avip Top Croissance, Paris
99.4 3
Allianz Sakura Multifamily Lux SCSp, Luxembourg
100.0
Allianz US Micro Cap Equity, London
72.0 3
Avip Top Harmonie, Paris
99.33
Allianz SAS S.A.S., Bogotá D.C.
100.0
Allianz US Private Credit Solutions GP LLC,
Wilmington, DE
Avip Top Tempéré, Paris
98.4 3
100.0
Allianz Underwriters Insurance Company Corp.,
Burbank, CA
Luxembourg
100.0
Allianz Pension Fund Trustees Ltd., Guildford
Allianz Multi Rendement Réel, Paris
89.1 3
100.0
Allianz Mutual Funds Management Company S.A.,
Allianz Renewable Energy Partners II Limited,
London
100.0
Allianz Investment Real Estate Solutions S.à r.L.,
Luxembourg
Athens
100.0
100.0
Allianz Renewable Energy Partners III LP, London
99.3
Allianz Investment Management LLC, Minneapolis,
MN
Allianz Nederland Groep N.V., Rotterdam
Allianz Investmentbank Aktiengesellschaft, Vienna
100.0
Allianz New Europe Holding GmbH, Vienna
100.0
Allianz Renewable Energy Partners IV Limited,
London
99.3
Allianz Investments | Luxembourg S.à r.l.,
Luxembourg
Allianz New Zealand Limited, Auckland
100.0
100.0
Allianz Investments II Luxembourg S.à r.l.,
Allianz Nigeria Insurance plc, Lagos
100.0
100.0
Allianz Renewable Energy Partners | LP, London
91.43
Allianz Invest d.o.o., Zagreb
100.0
Allianz Invest Kapitalanlagegesellschaft mbH,
Vienna
100.0
Allianz Multi Horizon 2030-2032, Paris
Allianz Multi Horizon 2033-2035, Paris
Allianz Multi Horizon 2036-2038, Paris
Allianz Multi Horizon 2039-2041, Paris
Allianz Multi Horizon Court Terme, Paris
73.5
Allianz Renewable Energy Fund III Lux GP S.à r.L.,
Senningerberg
100.0
100.0
3
100.0 3
Allianz Renewable Energy Fund Management 1
Ltd., London
100.0
100.0 3
75.13
Allianz Renewable Energy Management AT GmbH,
Pottenbrunn
100.0
Allianz Invest Ostrent, Vienna
88.9 3
Allianz Multi Horizon Long Terme, Paris
44.2 2.3
Allianz Renewable Energy Management AT II
GmbH, Pottenbrunn
100.0
Allianz Invest Spezial 3, Vienna
100.0 3
Allianz Multi Opportunités, Paris
99.3
Allianz Renewable Energy Partners IX Limited,
London
100.0
Luxembourg
Allianz Operations Singapore Pte. Ltd., Singapore
100.0
Allianz Renewable Energy Partners VII LP, London
100.0
Allianz kontakt s.r.o., Prague
100.0
Allianz p.l.c., Dublin
100.0
Allianz Renewable Energy Partners VIII Limited,
London
100.0
Allianz Leasing Bulgaria AD, Sofia
100.0
Allianz Partners S.A.S., Saint-Ouen
100.0
Allianz Resilient Credit Euro Fund GP S.à r.l.,
Allianz Leben Real Estate Holding I S.à r.L.,
Allianz Patrimoine Immobilier SAS, Paris la
Senningerberg
100.0
Luxembourg
100.0
Défense
100.0
Allianz Resilient Credit UK GP Limited, London
100.0
Allianz Leben Real Estate Holding II S.à r.L.,
50.0 2
100.0
100.0
100.0 3
100.0
Allianz Obligations Internationales, Paris
85.13
Allianz Renewable Energy Partners of America 2
LLC, Wilmington, DE
100.0
Allianz Investments III Luxembourg S.A.,
Allianz of America Inc., Wilmington, DE
100.0
Luxembourg
100.0
Allianz Renewable Energy Partners of America
Allianz Offensief Mix Fonds, Rotterdam
100.0 3
LLC, Wilmington, DE
100.0
Allianz Japan Equity Long Short Strategy,
Senningerberg
37.5 2,3
Allianz One Beacon GP LLC, Wilmington, DE
100.0
Allianz Renewable Energy Partners V plc., London
100.0
Allianz Jewel Fund ICAV, Dublin
Allianz One Beacon LP, Wilmington, DE
100.0
100.0
Allianz Jingdong General Insurance Company Ltd.,
Guangzhou
Allianz Opéra, Paris
Allianz Renewable Energy Partners VI Limited,
London
100.0
Allianz Capital Partners of America LLC, Dover, DE
Allianz Hungária Biztosító Zrt., Budapest
REC Frankfurt Objekt GmbH & Co. KG, Hamburg
80.0
REC Frankfurt zweite
Objektverwaltungsgesellschaft mbH, Hamburg
60.0
AQ Focus Teleport GmbH & Co. KG, Hamburg
AQ Focus Teleport Verwaltungs GmbH, Hamburg
AQ Überseehaus GmbH & Co. KG, Hamburg
AQ Überseehaus Verwaltungs GmbH, Hamburg
AVAG Versicherungsvermittlungs-Gesellschaft
mbH, Augsburg
50.0
AIM Equity PG Vie, Paris
100.0 3
50.0
AIM Equity US, Paris
100.0 3
100.0 4
39.97
100.0
50.0
AIM Underwriting Limited, Toronto, ON
100.0
Allianz (UK) Limited, Guildford
100.0
50.0
RehaCare GmbH, Munich
100.0
Allianz Actio France, Paris
81.13
risklab GmbH, Munich
AIM Singapore Pte Ltd., Singapore
PIMCO Deutschland GmbH, Munich
100.0
My Finance Coach Stiftung GmbH, Munich
AGF Benelux S.à r.l., Luxembourg
100.0
Mercato Leadmanagement Investments Holdings
GmbH, Berlin
manroland AG, Offenbach am Main
100,0 5,6
AGF FCR, Paris
100.0
100.0
META Finanz-Informationssysteme GmbH, Munich
100.0
manroland Vertrieb und Service GmbH, Mühlheim
am Main
AGF Holdings (UK) Limited, Guildford
100.0
100.0 6
AGF Inversiones S.A., Buenos Aires
100.0
MileBox UG (haftungsbeschränkt), Munich
100.0
AGT Media Ltd., Bristol
100.0
Mondial Kundenservice GmbH, Nuremberg
100.0
Joint ventures
AIM Equity Europe Cantons, Paris
100.0 3
Münchener & Magdeburger Agrar AG, Munich
100.0
100.0
70.8
Roland Holding GmbH, Munich
Dealis Fund Operations GmbH, Frankfurt am Main
Die Brückenköpfe X BKX GmbH & Co. Invest KG,
Berlin
100.0
SPN Service Partner Netzwerk GmbH, Munich
30.07
Allianz Africa Financial Services S.à r.l., Casablanca
100.0
Syncier GmbH, Munich
90.1
Allianz Africa SAS, Paris la Défense
100.0
UfS Beteiligungs-GmbH, Munich
VCIS Germany GmbH, Cologne
100.0
50.0 2
Spherion Objekt GmbH & Co. KG, Stuttgart
Associates
100.0
Vivy GmbH, Berlin
Allianz Vermögensbildung Europa, Frankfurt am
Main
Allianz Air France IFC, Paris
100.0 3
14.1 3,8
70.0
Allianz Alapkezelő Zrt., Budapest
100.0
VLS Versicherungslogistik GmbH, Berlin
100.0
Volkswagen Autoversicherung AG, Braunschweig
Allianz Africa Services SA, Abidjan
100.0
Allianz Advisory Pte. Ltd., Singapore
50.0
50.0
Allianz Actions Aéquitas, Paris
64.1 3
50.0 3
Allianz Actions Emergentes, Paris
99.0 3
Seine GmbH, Munich
100.0
NeuConnect Deutschland GmbH, Wilhelmshaven
26.2 3,7
Allianz Actions Euro, Paris
46.1 2,3
Seine II GmbH, Munich
100.0
PNE WIND Infrastruktur Calau II GmbH, Cuxhaven
50.0
Allianz Actions Euro Convictions, Paris
66.33
Signa 12 Verwaltungs GmbH, Stuttgart
94.9
PNE WIND Park III GmbH & Co. KG, Cuxhaven
50.0
Allianz Actions France, Paris
54.6 3
Spherion Beteiligungs GmbH & Co. KG, Stuttgart
94.9
Rise HoldCo GmbH, Frankfurt am Main
75.6
100.0
Infrastruktur Putlitz Ost GmbH & Co. KG, Husum
100.0
Euler Hermes Collections GmbH, Potsdam
100.0
Windpark Quitzow GmbH & Co. KG, Sehestedt
100.0
Consolidated affiliates
finanzen.de Maklerservice GmbH, Berlin
100.0
finanzen.de Vermittlungsgesellschaft für
Windpark Redekin-Genthin GmbH & Co. KG,
Sehestedt
2media GmbH, Wallisellen
100.0
100.0
FOREIGN ENTITIES
Verbraucherverträge GmbH, Berlin
35° East SAS, Paris la Défense
100.0
Windpark Schönwalde GmbH & Co. KG, Sehestedt
100.0
GA Global Automotive Versicherungsservice GmbH,
Halle (Saale)
Windpark Waltersdorf GmbH & Co. KG
490 Fulton JV LP, Wilmington, DE
96.5
100.0
Renditefonds, Sehestedt
100.0
100.0
100.0
Windpark Pröttlin GmbH & Co. KG, Sehestedt
100.0
Donator Beratungs GmbH, Munich
Windpark Emmendorf GmbH & Co. KG, Sehestedt
100.0
100.0
T&R Real Estate GmbH, Bonn
25.0
Donator Beteiligungsverwaltung GmbH, Munich
Driven By GmbH, Munich
100.0
Windpark Freyenstein-Halenbeck GmbH & Co. KG,
Sehestedt
100.0
100.0
EASTSIDE Joint Venture GmbH & Co. KG, Frankfurt
am Main
Windpark Kesfeld-Heckhuscheid GmbH & Co. KG,
Sehestedt
Umspannwerk Putlitz GmbH & Co. KG, Oldenburg
Verimi GmbH, Berlin
25.4
14.8 8
100.0
50.0
Windpark Kirf GmbH & Co. KG, Sehestedt
Windkraft Kirf Infrastruktur GmbH, Neumagen-
Dhron
50.0 8
100.0
EASTSIDE TAMARA GmbH, Frankfurt am Main
50.0 2
Windpark Kittlitz GmbH & Co. KG, Sehestedt
100.0
Euler Hermes Aktiengesellschaft, Hamburg
490 Fulton REIT LP, Wilmington, DE
100.0
100.0
100.0
Vertriebsmanagement GmbH, Halle (Saale)
100.0
Allianz Pension Consult GmbH, Stuttgart
AGA Insurance Broker (Thailand) Co. Ltd., Bangkok
100.0
100.0
Lola Vermögensverwaltungsgesellschaft mbH &
Allianz zweite Objektbeteiligungs-GmbH, Stuttgart
AGA Service Company Corp., Richmond, VA
100.0
100.0
Co. KG, Munich
100.0
100.0
AGCS International Holding B.V., Amsterdam
100.0
100.0
MAWISTA GmbH, Wendlingen am Neckar
100.0
Grundstücksgesellschaft der Vereinten
AGCS Marine Insurance Company, Chicago, IL
100.0
Mercato Leadmanagement Investments GmbH,
Berlin
Versicherungen mbH, Munich
100.0
AGCS Resseguros Brasil S.A., São Paulo
AZ Beteiligungs-Management GmbH, Munich
Allianz Objektbeteiligungs-GmbH, Stuttgart
KVM ServicePlus - Kunden- und
100.0
IDS GmbH - Analysis and Reporting Services,
Munich
Windpark Werder Zinndorf GmbH & Co. KG,
Sehestedt
490 Lower Unit GP LLC, Wilmington, DE
100.0
100.0
490 Lower Unit LP, Wilmington, DE
100.0
100.0
Inv1, Düsseldorf
100.0
Non-consolidated affiliates
Advanz Fundo de Investimento Renda Fixa Crédito
Privado, São Paulo
100.03
Kaiser X Labs GmbH, Munich
100.0
AERS Consortio Aktiengesellschaft, Stuttgart
55.3
Aero-Fonte S.r.L., Catania
100.0
KomfortDynamik Sondervermögen, Frankfurt am
Main
51.3
3
Allianz Global Benefits GmbH, Stuttgart
100.0
AF12 Real Estate Fund (Compartment),
Luxembourg
Iconic Finance GmbH, Munich
Arabesque S-Ray GmbH, Frankfurt am Main
Autobahn Tank & Rast Gruppe GmbH & Co. KG,
Bonn
11.4 8
Allianz Allvest Invest SICAV-SIF - Allvest Active
Invest, Luxembourg
82.8
Allianz Global Investors UK Limited, London
100.0
Allianz Ayudhya Capital Public Company Limited,
Bangkok
Allianz Finance IV Luxembourg S.à r.L., Luxembourg
100.0
Allianz Global Life dac, Dublin
100.0
49.0 2
Allianz Ayudhya General Insurance Public
Allianz Finance IX Luxembourg S.A., Luxembourg
Allianz Finance Pty Ltd., Sydney
100.0
100.0
Allianz Global Opportunistic Bond, Senningerberg
100.0
Allianz Global Risks US Insurance Company Corp.,
Company Limited, Bangkok
100.0
Allianz Finance VII Luxembourg S.A., Luxembourg
100.0
Chicago, IL
100.0
Allianz Balanced Return, Luxembourg
100.0 3
Allianz Finance VIII Luxembourg S.A., Luxembourg
Allianz Groen Rente Fonds, Rotterdam
59.23
Allianz Finance III B.V., Amsterdam
Allianz Ayudhya Assurance Public Company
Limited, Bangkok
100.0
100.0
Allianz Australia Workers Compensation (NSW)
Limited, Sydney
Allianz Europe Ltd., Amsterdam
100.0
100.0
Allianz Europe Small and Micro Cap Equity,
Allianz Australia Workers Compensation (Victoria)
Limited, Melbourne
Senningerberg
100.0 3
100.0
Allianz Global Investors Schweiz AG, Zurich
Allianz Global Investors Singapore Ltd., Singapore
Allianz Global Investors Taiwan Ltd., Taipei
100.0
100.0
100.0
Allianz Finance Corporation, Wilmington, DE
100.0
Allianz Australian Real Estate Trust, Sydney
100.0 3
Allianz Finance II B.V., Amsterdam
100.0
Allianz Global Investors U.S. Holdings LLC, Dover,
DE
100.0
Allianz Aviation Managers LLC, Burbank, CA
100.0
Allianz Finance II Luxembourg S.à r.l., Luxembourg
100.0
Allianz Global Investors U.S. LLC, Dover, DE
100.0 3
Allianz Global Investors Overseas Asset
Management (Shanghai) Limited, Shanghai
100.0
99.9
100.0 3
Allianz Bulgaria Holding AD, Sofia
66.2
Allianz Holdings plc, Guildford
100.0
Allianz Business Services Limited, Guildford
100.0
Allianz France Investissement OPCI, Paris la
Défense
Allianz Hospitaliers Euro, Paris
100.0
100.0
Allianz business services s.r.o., Bratislava
Allianz France Favart I, Paris
100.0
Allianz France Real Estate Invest SPPICAV, Paris la
100.0 3
Allianz Cameroun Assurances SA, Douala
75.4
Défense
100.0
Allianz Hrvatska d.d., Zagreb
83.2
Allianz Cameroun Assurances Vie SA, Douala
76.4
Allianz France Richelieu 1 S.A.S., Paris la Défense
100.0
Allianz Hospitaliers Valeurs Durables, Paris
100.0
Allianz Holdings p.l.c., Dublin
100.0
Allianz FinanzPlan 2055, Senningerberg
49.2 2.3
Allianz Hayat ve Emeklilik A.S., Istanbul
89.0
Allianz Bank Financial Advisors S.p.A., Milan
100.0
Allianz Banque S.A., Puteaux
100.0
Allianz Fire and Marine Insurance Japan Ltd.,
Tokyo
Allianz Hellas Insurance Company S.A., Athens
100.0
100.0
Allianz Hold Co Real Estate S.à r.L., Luxembourg
100.0
Allianz Benelux S.A., Brussels
100.0
Allianz Fixed Income Macro Fund, London
99.03
Allianz Holding eins GmbH, Vienna
100.0
Allianz Bonds Diversified Euro, Paris
100.0 3
Allianz Bonds Euro High Yield, Paris
100.0 3
Allianz Foglalkoztatói Nyugdíjszolgáltató Zrt.,
Budapest
Allianz Holding France SAS, Paris la Défense
100.0
Allianz Bank Bulgaria AD, Sofia
3
50.7
Allianz Europe Conviction Equity, Senningerberg
%
%
owned¹
owned¹
owned¹
Allianz Asia Holding Pte. Ltd., Singapore
100.0
Allianz Asset Management of America Holdings
Inc., Dover, DE
Allianz Debt Investments SCSP SICAV-SIF,
Luxembourg
100.0
Allianz Global Corporate & Specialty of Africa
(Proprietary) Ltd., Johannesburg
100.0
%
100.0
100.0 3
Allianz Asset Management of America L.P., Dover,
DE
Allianz Digital Services Pte. Ltd., Singapore
Allianz Global Corporate & Specialty of Bermuda
Ltd., Hamilton
100.0
100.0
100.0
Allianz Asset Management of America LLC, Dover,
DE
100.0
Allianz do Brasil Participações Ltda., São Paulo
Allianz Edukacja S.A., Warsaw
100.0
Allianz Global Corporate & Specialty South Africa
Ltd., Johannesburg
Allianz Defensief Mix Fonds, Rotterdam
D_Consolidated Financial Statements
Annual Report 2019 - Allianz Group
160
100.0 3
25.0
Volkswagen Autoversicherung Holding GmbH,
Braunschweig
49.0 2
Autobahn Tank & Rast Management GmbH, Bonn
25.0
Allianz Allvest Invest SICAV-SIF - Allvest Passive
Invest, Luxembourg
100.0 3
Windpark Aller-Leine-Tal GmbH & Co. KG,
Sehestedt
AV Packaging GmbH, Munich
100.0 8
Allianz Annuity Company of Missouri, Clayton, MO
100.0
100.0
Windpark Berge-Kleeste GmbH & Co. KG,
Sehestedt
DCSO Deutsche Cyber-Sicherheitsorganisation
GmbH, Berlin
25.0
Allianz Argentina Compañía de Seguros Generales
S.A., Buenos Aires
100.0
esa EuroShip GmbH & Co. KG Underwriting for
Shipping, Bad Friedrichshall
Allianz Argentina RE S.A., Buenos Aires
40.0
Allianz Asac Actions, Paris
100.0
100.0
100.0
100.0
100.0
Allianz Global Fundamental Strategy,
Allianz Asset Management U.S. Holding II LLC,
Dover, DE
Allianz Equity Emerging Markets 1, Paris
100.0 3
Allianz Global Investors Holdings Ltd., London
100.0
100.0
Allianz Equity Investments Ltd., Guildford
100.0
Allianz Global Investors Ireland Ltd., Dublin
100.0
Allianz Australia Life Insurance Limited, Sydney
Allianz Australia Limited, Sydney
100.0
Allianz Equity Large Cap EMU, Paris
100.0 3
Allianz Global Investors Japan Co. Ltd., Tokyo
100.0
100.0
Allianz Australia Partnership Services Pty Limited,
Sydney
Allianz Euro Core Infrastructure Debt GP S.à r.L.,
Senningerberg
Allianz Global Investors Nominee Services Ltd.,
100.0
George Town
100.0
100.0
Allianz Europe B.V., Amsterdam
100.0
Allianz Australia Services Pty Limited, Sydney
100.0
Allianz Australia Life Insurance Holdings Limited,
Sydney
100.0
100.0
100.0
Allianz Elementar Lebensversicherungs-
Senningerberg
43.7 2,3
Aktiengesellschaft, Vienna
100.0
100.0
Allianz Global Government Bond, Senningerberg
99.33
Allianz Australia Claim Services Pty Limited,
Allianz Elementar Versicherungs-
Aktiengesellschaft, Vienna
100.0
Sydney
100.0
Allianz Global Investors Asia Pacific Ltd., Hong
Kong
100.0
Allianz Australia Employee Share Plan Pty Ltd.,
Allianz EM Loans S.C.S., Luxembourg
100.0
Allianz Global Investors Asset Management
Sydney
100.0
Allianz Australia Insurance Limited, Sydney
Allianz Engineering Inspection Services Limited,
Guildford
(Shanghai) Limited, Shanghai
100.0
100.0
Allianz Global Investors Distributors LLC, Dover, DE
T&R MLP GmbH, Bonn
Allianz Seguros de Vida S.A., Bogotá D.C.
Allianz Vie EM Debt, Paris
100.0
FinOS Technology Holding Pte. Ltd., Singapore
100.0
Investitori Logistic Fund, Milan
100.0
Euler Hermes Korea Non-life Broker Company
Limited, Seoul
100.0
FinOS Technology Malaysia Sdn. Bhd., Kuala
Lumpur
Investitori Real Estate Fund, Milan
100.0 3
100.0
Investitori SGR S.p.A., Milan
100.0
100.0
100.0
FinOS Technology Vietnam Single-Member Limited
Liability Company, Ho Chi Minh City
Järvsö Sörby Vindkraft AB, Danderyd
100.0
100.0
Euler Hermes Magyar Követeleskezelő Kft.,
Budapest
Fireman's Fund Financial Services LLC, Dallas, TX
JCR Intertrade Co. Ltd., Bangkok
40.0 2
100.0
100.0
Euler Hermes New Zealand Limited, Auckland
Euler Hermes Luxembourg Holding S.à r.L.,
Luxembourg
Interstate Fire & Casualty Company, Chicago, IL
100.0
100.0
CEPE de Haut Chemin S.à r.L., Versailles
100.0
Cassiopeia 38 Shinsakae GK, Tokyo
100.0
Euler Hermes Group SA, Paris la Défense
100.0
CEPE de la Baume S.à r.L., Versailles
100.0
164
Annual Report 2019 - Allianz Group
D_Consolidated Financial Statements
%
%
%
owned¹
owned¹
owned¹
Euler Hermes Hong Kong Service Limited, Hong
Kong
100.0
Euler Hermes Intermediary Agency S.r.L., Milan
Euler Hermes Japan Services Ltd., Tokyo
100.0
Ferme Eolienne des Jaladeaux S.à r.L., Versailles
Financière Callisto SAS, Paris la Défense
Finanzen France SAS, Paris
100.0
Insurance CJSC "Medexpress", Saint Petersburg
100.0
100.0
Intermediass S.r.L., Milan
100.0
100.0
Fireman's Fund Indemnity Corporation, Liberty
Corner, NJ
100.0
KaiLong Greater China Real Estate Fund II S.C.Sp.,
Luxembourg
100.0
60.0
Euler Hermes Recouvrement France S.A.S., Paris la
Défense
Fragonard Assurance S.A., Paris
100.0
Ken Tame & Associates Pty Ltd., Sydney
100.0
100.0
Franklin S.C.S., Luxembourg
94.5
Kensington Fund, Milan
100.0 3
100.0
100.0
Friederike MLP S.à r.l., Luxembourg
100.0
Keyeast Pte. Ltd., Singapore
100.0
Euler Hermes Risk Yönetimi A.S., Istanbul
100.0
Fu An Management Consulting Co. Ltd., Beijing
1.0 2
Kiinteistöosakeyhtiö Eteläesplanadi 2 Oy, Helsinki
100.0
Euler Hermes S.A., Brussels
Euler Hermes Reinsurance AG, Wallisellen
100.0
Foshan Geluo Storage Services Co. Ltd., Foshan
FPCI APEH Europe VII, Paris
Euler Hermes Real Estate SPPICAV, Paris la
Défense
100.0
Joukhaisselän Tuulipuisto Oy, Oulu
100.0
Euler Hermes North America Holding Inc., Owings
Mills, MD
100.0
Fireman's Fund Insurance Company Corp., Los
Angeles, CA
Jouttikallio Wind Oy, Kotka
100.0
100.0
Euler Hermes North America Insurance Company
JSC Insurance Company Allianz, Moscow
100.0
Flying Desire Limited, Hong Kong
100.0
Inc., Owings Mills, MD
100.0
JUSTIS GmbH, Etoy
100.0
Euler Hermes Patrimonia SA, Brussels
100.0
Fondo Chiuso Allianz Infrastructure Partners I,
Milan
100.0 3
KAIGO Hi-Tech Development (Beijing) Co. Ltd.,
Beijing
100.0
Euler Hermes Ré SA, Luxembourg
100.0
Jefferson Insurance Company Corp., New York, NY
100.0
Euler Hermes Excess North America LLC, Owings
Mills, MD
Cassiopeia 37 Takanawa GK, Tokyo
Cassiopeia 22 Kuramae GK, Tokyo
100.0
Cassiopeia 76 Hachioji GK, Tokyo
100.0
Euler Hermes 39 Ouest, Paris la Défense
100.0
Cassiopeia 23 Higashi Shinjuku GK, Tokyo
100.0
Cassiopeia 24 Akebonobashi GK, Tokyo
Cassiopeia 77 Honchiba GK, Tokyo
100.0
Euler Hermes Acmar SA, Casablanca
100.0
55.0
Cassiopeia 78 Maison Flora GK, Tokyo
100.0
Euler Hermes Acmar Services SARL, Casablanca
100.0
Cassiopeia 25 Gotokuji GK, Tokyo
100.0
Cassiopeia 79 Temmabashi GK, Tokyo
100.0
Euler Hermes Asset Management France S.A., Paris
Cassiopeia 26 Shoin Jinja II GK, Tokyo
100.0
la Défense
100.0
Etablissements J. Moneger SA, Dakar
100.0
Cassiopeia 75 Sayama GK, Tokyo
100.0
Elite Prize Limited, Hong Kong
100.0
Cassiopeia 71 Ishizuecho GK, Tokyo
100.0
ELVIA elnvest AG, Wallisellen
100.0
Cassiopeia 19 Hachimanyama II GK, Tokyo
100.0
Cassiopeia 72 Sasaguchi GK, Tokyo
100.0
Energie Eolienne Lusanger S.à r.L., Versailles
100.0
Cassiopeia 2 Kameido II GK, Tokyo
100.0
Cassiopeia 73 Niigata GK, Tokyo
100.0
Eolica Erchie S.r.l., Lecce
100.0
Cassiopeia 20 Nakano Sakaue GK, Tokyo
100.0
Cassiopeia 74 Joanna GK, Tokyo
100.0
EP Tactical GP LLC, Wilmington, DE
100.0
Cassiopeia 21 Koishikawa GK, Tokyo
100.0
100.0
100.0
Cassiopeia 8 Aoi GK, Tokyo
Cassiopeia 27 Sakura Shinmachi GK, Tokyo
100.0
Shanghai
100.0
Central Shopping Center a.s., Bratislava
100.0
Cassiopeia 33 Sunadabashi II GK, Tokyo
100.0
Centrale Photovoltaique de Saint Marcel sur Aude
Cassiopeia 34 Shirokanedai GK, Tokyo
100.0
SAS, Versailles
100.0
Cassiopeia 32 Sunadabashi | GK, Tokyo
Euler Hermes Crédit France S.A.S., Paris la Défense
Euler Hermes Digital Ventures OPCVM, Paris la
Défense
100.0 3
Cassiopeia 35 Kamikitazawa GK, Tokyo
100.0
Centrale Photovoltaique de Valensole SAS,
Versailles
100.0
Euler Hermes Emporiki Services Ltd., Athens
100.0
Cassiopeia 36 Nishiikebukuro GK, Tokyo
100.0
CEPE de Bajouve S.à r.l., Versailles
100.0
100.0
Euler Hermes Consulting (Shanghai) Co. Ltd.,
100.0
Castle Field Limited, Hong Kong
100.0
Cassiopeia 80 WillDo Sakaisuji Hommachi GK,
Euler Hermes Australia Pty Limited, Sydney
100.0
Cassiopeia 28 Kasugacho GK, Tokyo
100.0
Tokyo
100.0
Euler Hermes Canada Services Inc., Montreal, QC
100.0
Cassiopeia 29 Shin Egota GK, Tokyo
100.0
Cassiopeia 81 Shin-Osaka GK, Tokyo
100.0
Cassiopeia 3 Joshin GK, Tokyo
100.0
Cassiopeia 82 Cube Awaza GK, Tokyo
100.0
Euler Hermes Collections North America Company,
Owings Mills, MD
Cassiopeia 30 Yuhigaoka GK, Tokyo
100.0
Euler Hermes Collections Sp. z o.o., Warsaw
100.0
Cassiopeia 9 Chikusa GK, Tokyo
100.0
Cassiopeia 31 Felt 627 GK, Tokyo
100.0
100.0
Fusion Company Inc., Richmond, VA
100.0
KLGCREF II Holdco Pte. Ltd., Singapore
100.0
ICON Inter GmbH & Co. KG, Vienna
100.0
Mombyasen Wind Farm AB, Halmstad
100.0
Eurl 20/22 Le Peletier, Paris la Défense
100.0
IEELV GP S.à r.l., Luxembourg
100.0
Morningchapter S.A., Grandaços
100.0
Eurosol Invest S.r.l., Udine
Sp.k, Warsaw
100.0
100.0
Multiasistencia S.A., Madrid
100.0
FCP Allianz Africa Equity WAEMU, Abidjan
100.0 3
ImWind AO GmbH & Co. KG, Pottenbrunn
100.0
FCP LBPAM IDR, Paris
100.0 3
Multiassistance Luxembourg S.à r.L., Luxembourg
100.0
FCPI InnovAllianz 2, Paris
Immovalor Gestion S.A., Paris la Défense
100.0
do Campo
100.0
Euler Hermes Sigorta A.S., Istanbul
100.0
Highway Insurance Group Limited, Guildford
100.0
Medi24 AG, Bern
100.0
Euler Hermes Singapore Services Pte. Ltd.,
Singapore
100.0
Home & Legacy Insurance Services Limited,
Guildford
Medicount (Private) Limited, Islamabad
100.0
100.0
MediCount Global Ltd., Ebene
71.6
Euler Hermes South Express S.A., Brussels
100.0
Humble Bright Limited, Hong Kong
100.0
Medicount Healthcare Private Limited, Bangalore
100.0
Euler Hermes Taiwan Services Limited, Taipei
100.0
Hunter Premium Funding Ltd., Sydney
100.0
Mindseg Corretora de Seguros Ltda., São Bernardo
Euler Hermes, Mierzejewska-Kancelaria Prawna
ICON Immobilien GmbH & Co. KG, Vienna
100.0 3
100.0
ImWind GHW GmbH & Co. KG, Pottenbrunn
Multiassistance S.A., Paris
D_Consolidated Financial Statements
%
%
%
owned¹
owned¹
owned¹
NEXTCARE Claims Management LLC, Dubai
100.0
PIMCO Global Advisors LLC, Dover, DE
100.0
Prosperaz Fundo de Investimento Renda Fixa
Crédito Privado, São Paulo
165
100.0 3
100.0
PIMCO Global Financials Credit FIC FIM IE, Rio de
Janeiro
54.0 3
Protexia France S.A., Paris la Défense
100.0
NEXTCARE Lebanon SAL, Beirut
100.0
PIMCO Global Holdings LLC, Dover, DE
100.0
PT Asuransi Allianz Life Indonesia p.l.c., Jakarta
99.8
NEXTCARE Egypt LLC, New Cairo
Annual Report 2019 - Allianz Group
100.0
100.0
100.0
ImWind Loidesthal GmbH & Co. KG, Pottenbrunn
100.0
FCT CIMU 92, Pantin
100.0 3
Multimags - Multiassistência e Gestão de Sinistros,
Unipessoal Lda., Lisbon
100.0
FCT Rocade L2 Marseille, Paris
100.03
ImWind PDV GmbH & Co. KG, Pottenbrunn
100.0
National Surety Corporation, Chicago, IL
100.0
ImWind PL GmbH & Co. KG, Pottenbrunn
100.0
Fénix Directo Compañía de Seguros y Reaseguros
S.A., Madrid
Neoasistencia Manoteras S.L., Madrid
100.0
100.0
Inforce Solutions LLC, Woodstock, GA
100.0
Ferme Eolienne de Villemur-sur-Tarn S.à r.l.,
Versailles
InnovAllianz, Paris
99.6 3
Nextcare Bahrain Ancillary Services Company
B.S.C., Manama
100.0
MAF SALP SAS, Saint-Ouen
100.0
Highway Insurance Company Limited, Guildford
100.0
100.0
Gestion de Téléassistance et de Services S.A.,
Châtillon
100.0
Legal & General Insurance Limited, Guildford
100.0
Euler Hermes Services G.C.C. Limited, Dubai
100.0
GIE Euler Hermes SFAC Services, Paris la Défense
100.0
Euler Hermes Services India Private Limited,
Lincoln Infrastructure USA Inc., Wilmington, DE
Legal & General Distribution Services Limited,
Guildford
100.0
100.0
Glärnisch Institutional Fund, Basel
100.0 3
Liverpool Victoria General Insurance Group
Limited, Guildford
100.0
Euler Hermes Services Ireland Limited, Dublin
100.0
Global Azawaki S.L., Madrid
100.0
Liverpool Victoria Insurance Company Limited,
Euler Hermes Services Italia S.r.L., Rome
100.0
Mumbai
100.0
Genialloyd S.p.A., Milan
100.0
100.0
Euler Hermes Seguros S.A., São Paulo
100.0
Gaipare Action, Paris
100.0 3
Euler Hermes Service AB, Stockholm
100.0
Galore Expert Limited, Hong Kong
100.0
Kohlenberg & Ruppert Premium Properties S.à r.L.,
Luxembourg
100.0
Euler Hermes Services B.V., 's-Hertogenbosch
Kuolavaara-Keulakkopään Tuulipuisto Oy, Oulu
100.0
100.0
GamePlan Financial Marketing LLC, Woodstock,
GA
100.0
La Rurale SA, Courbevoie
99.9
Euler Hermes Services Belgium S.A., Brussels
100.0
Euler Hermes Services Bulgaria EOOD, Sofia
Euler Hermes Services Ceská republika s.r.o.,
Prague
Generation Vie S.A., Courbevoie
52.5
LAD Energy GmbH & Co. KG, Pottenbrunn
100.0
Global Carena S.L., Madrid
100.0
Guildford
100.0
100.0
Euler Hermes Services South Africa Ltd.,
Hauteville Insurance Company Limited, St Peter
Johannesburg
100.0
Port
100.0
LV Insurance Management Limited, Guildford
100.0
Euler Hermes Services Tunisia S.à r.L., Tunis
100.0
Havelaar & van Stolk B.V., Rotterdam
100.0
LV Repair Services Limited, Guildford
100.0
Euler Hermes Services UK Limited, London
100.0
Helviass Verzekeringen B.V., Rotterdam
100.0
Maevaara Vind 2 AB, Stockholm
100.0
Euler Hermes Serviços de Gestão de Riscos Ltda.,
São Paulo
Highway Group Services Limited, Bournemouth
100.0
Maevaara Vind AB, Stockholm
100.0
100.0
LV Assistance Services Limited, Guildford
Cassiopeia 70 Shinmachi Residence GK, Tokyo
100.0
100.0
Euler Hermes Services North America LLC, Owings
Mills, MD
100.0
Global Transport & Automotive Insurance Solutions
Pty Limited, Sydney
LLC "Euler Hermes Credit Management", Moscow
100.0
81.0
Euler Hermes Services Romania S.R.L., Bucharest
100.0
Great Lake Funding I LP, Wilmington, DE
100.0 3
LLC "IC Euler Hermes Ru", Moscow
100.0
LLC "Medexpress-service", Saint Petersburg
100.0
Euler Hermes Services S.A.S., Paris la Défense
100.0
Grupo Multiasistencia S.A., Madrid
100.0
LLC "Progress-Med", Moscow
100.0
Euler Hermes Services Schweiz AG, Wallisellen
100.0
Gurtin Fixed Income Management LLC, Dover, DE
100.0
LLC "Risk Audit", Moscow
100.0
Euler Hermes Services Slovensko s.r.o., Bratislava
Harro Development Praha s.r.o., Prague
100.0
100.0
100.0
AWP Servis Hizmetleri A.S., Istanbul
97.0
Allianz Team Formule 1, Paris
99.23
Earth City, MO
100.0
AWP Solutions CR a SR s.r.o., Prague
100.0
Allianz Technology B.V., Rotterdam
100.0
American Financial Marketing LLC, St. Louis Park,
MN
American Automobile Insurance Company Corp.,
Allianz Technology (Thailand) Co. Ltd., Bangkok
100.0
AWP Ticket Guard Small Amount & Short Term
Insurance Co. Ltd., Tokyo
100.0
Allianz Technology AG, Wallisellen
100.0
Ann Arbor Annuity Exchange LLC, Plymouth, MI
100.0
AWP USA Inc., Richmond, VA
100.0
Allianz Technology GmbH, Vienna
100.0
APEH Europe VI, Paris
100.0
87.23
Allianz Team, Paris
100.0
100.0
GP LLC, Wilmington, DE
100.0
Allianz Suisse Lebensversicherungs-Gesellschaft
AWP Services New Zealand Limited, Auckland
100.0
AG, Wallisellen
100.0
AllianzGI US Private Credit Solutions GP II LLC,
Wilmington, DE
100.0
AWP Services NL B.V., Amsterdam
100.0
Allianz Suisse Versicherungs-Gesellschaft AG,
Wallisellen
Allianz-Slovenská DSS a.s., Bratislava
100.0
AWP Services Sdn. Bhd., Kuala Lumpur
100.0
100.0
Allianz-Slovenská poisťovňa a.s., Bratislava
99.6
AWP Services Singapore Pte. Ltd., Singapore
100.0
Allianz Taiwan Life Insurance Co. Ltd., Taipei
99.7
Alma S.r.l., Bologna
100.0
AWP Servicios Mexico S.A. de C.V., Mexico City
99.6 3
AWP Services Belgium S.A., Brussels
AZ Euro Investments II S.à r.L., Luxembourg
Allianz Technology International B.V., Amsterdam
Appia Investments S.r.l., Milan
57.6
AZ Real Estate GP LLC, New York, NY
100.0
Arcalis Retraite S.A., Paris la Défense
100.0
Allianz Tiriac Asigurari SA, Bucharest
52.2
AZ Servisni centar d.o.o., Zagreb
100.0
Allianz Tiriac Pensii Private Societate de
Arges Investments I N.V., Amsterdam
100.0
100.0
100.0
administrare a fondurilor de pensii private S.A.,
Arges Investments II N.V., Amsterdam
100.0
Bucharest
100.0
AZ Vers US Private REIT LP, Wilmington, DE
100.0
Asit Services S.R.L., Bucharest
100.0
Allianz UK Credit Fund, Paris
100.0 3
AZ Vers US Private REIT GP LLC, Wilmington, DE
Allianz Technology SAS, Paris
100.0
AZ Jupiter 9 B.V., Amsterdam
100.0
APK US Investment GP LLC, Wilmington, DE
100.0
AZ Euro Investments S.A., Luxembourg
100.0
Allianz Technology of America Inc., Wilmington, DE
100.0
APK US Investment LP, Wilmington, DE
100.0
AZ Jupiter 10 B.V., Amsterdam
100.0
Allianz Technology S.C.p.A., Milan
100.0
APKV US Private REIT GP LLC, Wilmington, DE
100.0
AZ Jupiter 11 B.V., Amsterdam
97.8
Allianz Technology S.L., Barcelona
100.0
APKV US Private REIT LP, Wilmington, DE
100.0
AZ Jupiter 8 B.V., Amsterdam
100.0
Allianz Technology S.p.A., Milan
100.0
APP Broker S.r.l., Trieste
100.0
100.0
Assistance Courtage d'Assurance et de
100.0
AllianzGI Structured Alpha Large Cap Equity 350
100.0 3
AWP Business Services Co. Ltd., Beijing
100.0
Allianz Sénégal Assurances SA, Dakar
83.4
Allianz Worldwide Partners (Hong Kong) Ltd.,
Hong Kong
AWP Chile Limitada, Santiago
100.0
100.0
Allianz Sénégal Assurances Vie SA, Dakar
AWP Colombia SAS, Bogotá D.C.
100.0
Senningerberg
98.5
100.0
Allianz X Euler Hermes Co-Investments S.à r.L.,
Luxembourg
100.0
AWP Contact Center Italia S.r.l., Milan
100.0
Allianz Yasam ve Emeklilik A.S., Istanbul
80.0
AWP France SAS, Saint-Ouen
95.0
Allianz Services Mauritius LLC, Ebene
100.0
Allianz Services Private Ltd., Trivandrum
Allianz Services (UK) Limited, London
67.5 3
Allianz Working Capital Fund, Senningerberg
Allianz Selection Small and Midcap Equity,
100.0 3
AWP Assistance UK Ltd., London
100.0
Allianz Seguros S.A., São Paulo
100.0
Allianz Vie S.A., Paris la Défense
100.0
AWP Australia Holdings Pty Ltd., Toowong
100.0
Allianz Seguros S.A., Bogotá D.C.
100.0
Allianz Vie Sub Sovereign Debt FCP, Paris
100.0 3
AWP Australia Pty Ltd., Toowong
100.0
Allianz Selection Alternative, Senningerberg
100.0 3
Allianz Vorsorgekasse AG, Vienna
100.0
AWP Austria GmbH, Vienna
100.0
Allianz Selection Fixed Income, Senningerberg
100.0 3
Allianz Voyager Asia I, Senningerberg
91.0 3
AWP Brokers & Services Hellas S.A., Athens
100.0
100.0
Allianz Suisse Immobilien AG, Wallisellen
Allianz ZB d.o.o. Mandatory and Voluntary
100.0
49.2 2,3
AWP Polska Sp. z o.o., Warsaw
100.0
100.0
AWP Réunion SAS, Saint-Denis
100.0
100.0
AllianzGI Preferred Securities and Income Fund,
Boston, MA
64.7 3
AWP RUS LLC, Moscow
100.0
100.0 3
AllianzGI Global Small-Cap Opportunity Portfolio,
Boston, MA
AllianzGI Renewable Energy Infrastructure Fund III
(US) GP LLC, Wilmington, DE
100.0
100.0
Allianz Strategic Investments S.à r.l., Luxembourg
100.0
AWP Services (India) Private Limited, Gurgaon
100.0
AllianzGI Short Term Bond Fund, Boston, MA
40.2 2,3
Allianz Strategy Select 50, Senningerberg
50.0 2,3
AWP Services (Thailand) Co. Ltd., Bangkok
97.6
AWP Service Brasil Ltda., São Bernardo do Campo
Allianz Société Financière S.à r.L., Luxembourg
Allianz South America Holding B.V., Amsterdam
Allianz Special Opportunities Alternative Fund,
Milan
88.6
100.0
Pension Funds Management Company, Zagreb
51.0
AWP Health & Life Services Limited, Dublin
100.0
Allianz Sigorta A.S., Istanbul
96.2
AllianzGI Core Bond Fund, Boston, MA
80.3 3
Allianz SNA s.a.l., Beirut
100.0
AWP Japan Co. Ltd., Tokyo
100.0
AllianzGI Core Plus Bond Fund, Boston, MA
74.93
Allianz Sociedad Anónima A.S. Agencia de
AWP MEA Holdings Co. W.L.L., Manama
100.0
Seguros, Barcelona
100.0
AllianzGI Floating Rate Note Fund, Boston, MA
79.6 3
AWP Mexico S.A. de C.V., Mexico City
100.0
Allianz Sociedade Gestora de Fundos de Pensões
S.A., Lisbon
AllianzGI Global High Yield Fund, Boston, MA
94.1 3
AWP P&C S.A., Saint-Ouen
AWP Health & Life S.A., Saint-Ouen
AZGA Insurance Agency Canada Ltd., Kitchener,
ON
100.0
Allianz UK Infrastructure Debt GP 2 Limited,
100.0
Cova Beijing Zpark Investment Pte. Ltd., Singapore
98.0
Calobra Investments Sp. z o.o., Warsaw
100.0
CPRN Thailand Ltd., Bangkok
100.0
Cassiopeia 58 Minami Aoyama GK, Tokyo
100.0
Calypso S.A., Paris la Défense
100.0
Creactif Allocation, Paris
Cassiopeia 57 Kinshicho GK, Tokyo
100.0 3
100.0
Candid Web Assets Ltd., Bristol
100.0
Cassiopeia 6 Nishihonmachi GK, Tokyo
100.0
CreditRas Assicurazioni S.p.A., Milan
50.02
CAP Rechtsschutz-Versicherungsgesellschaft AG,
Cassiopeia 60 Yakuin GK, Tokyo
CreditRas Vita S.p.A., Milan
50.0 2
100.0
Cassiopeia 59 Shinsakae IV GK, Tokyo
100.0
Buddies Enterprises Limited, Guildford
100.0
100.0
100.0
Compañía Colombiana de Servicio Automotriz S.A.,
Bogotá D.C.
100.0
Cassiopeia 53 Residence Sakaisujihonmachi GK,
BRAVO III CIV LLC, Wilmington, DE
100.0
Tokyo
100.0
Consultatio Renta Mixta F.C.I., Buenos Aires
100.0
British Reserve Insurance Co. Ltd., Guildford
100.0
Cassiopeia 54 Residence Awaza GK, Tokyo
100.0
Corn Investment Ltd., London
100.0
Brobacken Nät AB, Stockholm
100.0
Cassiopeia 55 Nihombashi Bakurocho GK, Tokyo
100.0
Corsetec Assessoria e Corretagem de Seguros
BSMC (Thailand) Limited, Bangkok
100.0
Ltda., São Paulo
100.0
Cassiopeia 56 Ikebukuro GK, Tokyo
Wallisellen
Cassiopeia 52 Takanodai GK, Tokyo
100.0
100.0
Cassiopeia 13 Kagurazaka I GK, Tokyo
100.0
Minneapolis, MN
100.0
Cassiopeia 67 Itabashi North GK, Tokyo
100.0
Cassiopeia 14 Kagurazaka II GK, Tokyo
100.0
EF Solutions LLC, Wilmington, DE
100.0
Cassiopeia 68 Shimurasakaue GK, Tokyo
100.0
100.0
Cassiopeia 15 Komazawa Univ. II GK, Tokyo
Eff siebzigdrei Beteiligungsverwaltung GmbH,
Cassiopeia 69 Nakano East GK, Tokyo
100.0
Vienna
100.0
Cassiopeia 16 Shoin Jinja GK, Tokyo
100.0
Cassiopeia 7 Kamimaedu GK, Tokyo
100.0
Eiger Institutional Fund, Basel
100.0 3
Cassiopeia 17 Koishikawa GK, Tokyo
100.0
Cassiopeia 66 Iriya GK, Tokyo
Dresdner Kleinwort Pfandbriefe Investments II Inc.,
100.0
Darta Saving Life Assurance dac, Dublin
100.0
Caroline Berlin S.C.S., Luxembourg
93.2
Deeside Investments Inc., Wilmington, DE
50.1
Cassiopeia 62 Azabudai GK, Tokyo
100.0
Cassiopeia 1 Shirokane Takanawa GK, Tokyo
100.0
Delta Technical Services Ltd., London
100.0
Cassiopeia 63 Ginza GK, Tokyo
100.0
Cassiopeia 10 La façade GK, Tokyo
100.0
Demand Side Media Ltd., Bristol
100.0
Cassiopeia 64 Nihombashi Kakigaracho GK, Tokyo
100.0
Cassiopeia 11 Isogodai GK, Tokyo
100.0
Diamond Point a.s., Prague
100.0
Cassiopeia 65 Hatagaya GK, Tokyo
100.0
Cassiopeia 12 Nishi-Shinjuku III GK, Tokyo
Cassiopeia 61 Hakata GK, Tokyo
BRAVO II CIV LLC, Wilmington, DE
100.0
Brasil de Imóveis e Participações Ltda., São Paulo
Beleggingsmaatschappij Willemsbruggen B.V.,
Cassiopeia 39 Glanz GK, Tokyo
100.0
CEPE de la Forterre S.à r.L., Versailles
100.0
Rotterdam
100.0
Cassiopeia 4 Nishimagome GK, Tokyo
100.0
CEPE de Langres Sud S.à r.l., Versailles
100.0
Beykoz Gayrimenkul Yatirim Insaat Turizm Sanayi
ve Ticaret A.S., Ankara
owned¹
Cassiopeia 40 Kinembashi GK, Tokyo
CEPE de Mont Gimont S.à r.L., Versailles
100.0
100.0
Cassiopeia 41 Imaike GK, Tokyo
100.0
CEPE de Sambres S.à r.l., Versailles
100.0
Bilan Services S.N.C., Nanterre
66.0
Cassiopeia 42 Kyudai Gakkentoshi Ekimae GK,
CEPE de Vieille Carrière S.à r.L., Versailles
100.0
100.0
owned¹
owned¹
%
Réassurance S.A., Courbevoie
100.0
London
AZGA Service Canada Inc., Kitchener, ON
55.0
100.0
Associated Indemnity Corporation, Los Angeles, CA
100.0
Allianz UK Infrastructure Debt GP Limited, London
AZL PF Investments Inc., Minneapolis, MN
100.0
100.0
Assurances Médicales SA, Metz
100.0
Allianz Ukraine LLC, Kiev
100.0
AZOA Services Corporation, New York, NY
100.0
atpacvc LLC, Wilmington, DE
100.0
AZWP Services Portugal Lda., Lisbon
100.0
Annual Report 2019 - Allianz Group
163
D_Consolidated Financial Statements
%
%
Biuro Informacji Gospodarczej Euler Hermes S.A.,
Warsaw
Tokyo
100.0
100.0
100.0 3
Cassiopeia 48 Meinohama GK, Tokyo
100.0
BPS Mesagne 215 S.r.L., Lecce
100.0
Climmolux Holding SA, Luxembourg
100.0
Cassiopeia 49 Shinkawa GK, Tokyo
100.0
BPS Mesagne 216 S.r.L., Lecce
100.0
Club Marine Limited, Sydney
100.0
Cassiopeia 5 Nipponbashi GK, Tokyo
100.0
BPS Mesagne 223 S.r.L., Lecce
100.0
COF II CIV LLC, Wilmington, DE
100.0
Cassiopeia 50 Morishita II GK, Tokyo
100.0
BPS Mesagne 224 S.r.L., Lecce
100.0
Cassiopeia 51 Higashiueno GK, Tokyo
100.0
Companhia de Seguros Allianz Portugal S.A.,
Lisbon
64.8
Citizen Capital Impact Initiative, Paris
Cassiopeia 18 Hachimanyama | GK, Tokyo
100.0
100.0
CEPE des Portes de la Côte d'Or S.à r.l., Versailles
100.0
Cassiopeia 43 Kobe Sannomiya II GK, Tokyo
100.0
Borgo San Felice S.r.l., Castelnuovo Berardenga
100.0
CEPE du Blaiseron S.à r.l., Versailles
100.0
Cassiopeia 44 Koenji GK, Tokyo
100.0
BPS Brindisi 211 S.r.L., Lecce
100.0
CEPE du Bois de la Serre S.à r.l., Versailles
100.0
Cassiopeia 45 Mejiro GK, Tokyo
100.0
BPS Brindisi 213 S.r.l., Lecce
100.0
Chicago Insurance Company Corp., Chicago, IL
100.0
Cassiopeia 46 Shinsakae III GK, Tokyo
100.0
BPS Brindisi 222 S.r.l., Lecce
100.0
CIC Allianz Insurance Ltd., Sydney
100.0
Cassiopeia 47 Nagoya Sakae GK, Tokyo
BPS Mesagne 214 S.r.L., Lecce
99.2
100.0
The supervisory board is responsible for overseeing the Group's
financial reporting process for the preparation of the consolidated fi-
nancial statements and of the group management report.
Due to the material significance of these provisions for the
assets, liabilities and financial performance of the Group as well as
the considerable scope for judgment on the part of the executive
directors and the associated uncertainties in the estimations
made, the measurement of the technical provisions in property-
casualty insurance was of particular significance to our audit.
Reserves for loss and loss adjustment expenses in property-
casualty insurance represent the Company's expectations regard-
ing future payments for known and unknown claims including as-
sociated expenses. The Company uses various methods to esti-
mate these obligations. Furthermore, the measurement of these
provisions requires a significant degree of judgment by the execu-
tive directors of the Company regarding the assumptions made,
such as inflation, loss developments and regulatory changes. In
particular, the lines of products with low loss frequency, high indi-
vidual losses or long claims settlement periods are usually subject
to increased estimation uncertainties.
① In the consolidated financial statements of the Company, tech-
nical provisions (so called "claims provisions") amounting to
€ 77,541 mn (7.7% of consolidated total assets) are reported un-
der the "Reserves for loss and loss adjustment expenses" balance
sheet item. Of this amount, € 65,414 mn is attributable to the
Property-Casualty Insurance business segment.
2 Measurement of certain technical provisions in property-casualty
insurance
③ The Company's disclosures on the measurement of certain tech-
nical assets and liabilities as well as the measurement of certain
financial liabilities carried at fair value (Level 3) in life and health
insurance are included in sections 2 and 15 and sections 2 and 34,
respectively, of the notes to the consolidated financial statements.
Based on our audit procedures, we were able to satisfy our-
selves that the methods and assumptions used by the executive di-
rectors are appropriate overall for measuring certain technical as-
sets and liabilities as well as the financial liabilities carried at fair
value (Level 3).
among others, as the basis for amortizing the deferred acquisition
costs and the evaluation of the appropriateness of significant as-
sumptions not observable on the market for the valuation of deriv-
ative financial instruments, such as mortality and lapse rates. Our
audit also included an evaluation of the plausibility and integrity
of the data and assumptions used in the valuation and of the
Group's Actuarial department's reporting to the Group Reserve
Committee.
With the support of our internal valuation specialists, we
have compared the respective valuation methods applied and the
material assumptions with generally recognized methods and in-
dustry standards and examined to what extent these are appro-
priate for the valuation of technical assets and liabilities as well as
financial liabilities carried at fair value (Level 3). A key point of our
audit was the assessment of the liability adequacy test, the evalu-
ation of the expected gross margins/profits, which are used,
② As part of our audit, we assessed the appropriateness of selected
controls established by the Company for the purpose of selecting
the valuation methods applied, determining assumptions and
making estimates for the measurement of certain technical assets
and liabilities as well as financial liabilities carried at fair value
(Level 3). In doing so we evaluated, among others, the integrity of
the underlying data and the process for determining the assump-
tions and estimates used in the valuation.
Against this background and due to the material signifi-
cance of the amounts for the assets, liabilities and financial perfor-
mance of the Group and the complex process for determining the
underlying assumptions and estimates of the executive directors,
the measurement of these technical assets and liabilities as well as
of the financial liabilities carried at fair value (Level 3) was of par-
ticular significance in the context of our audit.
The financial liabilities concerned mainly include derivative
financial instruments resulting from insurance contracts and are
assigned to Level 3 of the fair value hierarchy as for the measure-
ment in the underlying valuation models sufficient observable
market data was not available and therefore significant unobserv-
able inputs had to be used instead. These inputs may include data
derived from approximations using, inter alia, historical data. In
this context, the derivative financial instruments resulting from in-
surance contracts are subject to an increased valuation risk due to
lower objectivity and the underlying assumptions and estimates of
the executive directors.
These technical assets and liabilities are measured using
complex actuarial methods and models based on a comprehen-
sive process for arriving at assumptions about future develop-
ments relating to the insurance portfolios to be measured. The
methods used and the actuarial assumptions determined in con-
nection with interest rates, investment yields, mortality, invalidity,
longevity, costs and future behavior of policyholders could materi-
ally affect the measurement of these technical assets and liabili-
ties.
In the consolidated financial statements of the Company, assets
and liabilities of the Life and Health Insurance business segment
amounting to € 19,841 mn and € 572,904 mn (2.0% or 56.7 % of
consolidated total assets) are reported under the "Deferred acqui-
sition costs" and "Reserves for insurance and investment contracts"
balance sheet items, respectively. Furthermore, financial liabilities
from the life and health insurance segment amounting to
€ 14,246 mn (1.4% of consolidated total assets) are reported that
are classified as Level 3 of the fair value hierarchy according to the
requirements of IFRS 13.
1 Measurement of certain technical assets and liabilities as well as
certain financial liabilities carried at fair value (Level 3) in life and
health insurance
E_Further Information
171
Annual Report 2019 - Allianz Group
Hereinafter we present the key audit matters:
3 Reference to further information
② As part of our audit, we evaluated the appropriateness of selected
controls established by the Company for the purpose of selecting
actuarial methods, determining assumptions and making esti-
mates for the measurement of certain technical provisions in prop-
erty-casualty insurance.
② Audit approach and findings
With the support of our property-casualty insurance valua-
tion specialists, we have compared the respective actuarial meth-
ods applied and the material assumptions with generally recog-
nized actuarial methods and industry standards and examined to
what extent these are appropriate for the valuation. Our audit also
included an evaluation of the plausibility and integrity of the data
Annual Report 2019 - Allianz Group
Furthermore, the executive directors are responsible for the prep-
aration of the group management report that, as a whole, provides an
appropriate view of the Group's position and is, in all material respects,
consistent with the consolidated financial statements, complies with
German legal requirements, and appropriately presents the opportu-
nities and risks of future development. In addition, the executive direc-
tors are responsible for such arrangements and measures (systems) as
they have considered necessary to enable the preparation of a group
management report that is in accordance with the applicable German
legal requirements, and to be able to provide sufficient appropriate
evidence for the assertions in the group management report.
In preparing the consolidated financial statements, the executive
directors are responsible for assessing the Group's ability to continue
as a going concern. They also have the responsibility for disclosing, as
applicable, matters related to going concern. In addition, they are re-
sponsible for financial reporting based on the going concern basis of
accounting unless there is an intention to liquidate the Group or to
cease operations, or there is no realistic alternative but to do so.
German commercial law pursuant to §315e Abs. 1 HGB and that the
consolidated financial statements, in compliance with these require-
ments, give a true and fair view of the assets, liabilities, financial posi-
tion, and financial performance of the Group. In addition, the executive
directors are responsible for such internal control as they have deter-
mined necessary to enable the preparation of consolidated financial
statements that are free from material misstatement, whether due to
fraud or error.
The executive directors are responsible for the preparation of the con-
solidated financial statements that comply, in all material respects,
with IFRSS as adopted by the EU and the additional requirements of
GROUP MANAGEMENT REPORT
RESPONSIBILITIES OF THE EXECUTIVE DIRECTORS
AND THE SUPERVISORY BOARD FOR THE
CONSOLIDATED FINANCIAL STATEMENTS AND THE
otherwise appears to be materially misstated.
-
is materially inconsistent with the consolidated financial state-
ments, with the group management report or our knowledge ob-
tained in the audit, or
In connection with our audit, our responsibility is to read the other in-
formation and, in so doing, to consider whether the other information
Our audit opinions on the consolidated financial statements and
on the group management report do not cover the other information,
and consequently we do not express an audit opinion or any other
form of assurance conclusion thereon.
The other information comprises further the remaining parts of the
group annual report - excluding cross-references to external infor-
mation with the exception of the audited consolidated financial
statements, the audited group management report and our auditor's
report.
the statement on corporate governance pursuant to § 289f HGB
and § 315d HGB included in section "Other Parts of the Group
Management Report" of the group management report
the separate non-financial report pursuant to §289b Abs. 3 HGB
und §315b Abs. 3 HGB
The executive directors are responsible for the other information. The
other information comprises the following non-audited parts of the
group management report:
OTHER INFORMATION
③ The Company's disclosures on the measurement of the provisions
for claims outstanding in property-casualty insurance are included
in section 2 of the notes to the consolidated financial statements.
Based on our audit procedures, we were able to satisfy our-
selves that the estimates and assumptions made by the executive
directors are appropriate overall for measuring the technical pro-
visions in property-casualty insurance.
and assumptions used in the valuation and a reconstruction of the
claims settlement processes. Furthermore, we recalculated the
amount of the provisions for selected lines of products, in particu-
lar lines of products with large reserves or increased estimation un-
certainties. For these lines of products we compared the recalcu-
lated provisions with the provisions calculated by the Company
and evaluated any differences. We also examined whether any
adjustments to estimates in loss reserves at Group level were ade-
quately documented and substantiated. Our audit also included
an evaluation of the Group's Actuarial department's reporting to
the Group Reserve Committee.
E_Further Information
172
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report on our workforce facts and figures, highlighting
major HR achievements over the past year and revealing
the outlook for 2020.
(1) Matter and issue
2 Measurement of certain technical provisions in property-casualty
insurance
Saty
Iván de la Sota
11-14
Dr. Christof Mascher
Urschen
Sergio Balbinot
берь
Dr. Axel Theis
had Thes
Giulio Terzariol
Suiko Razonial
Niran Peiris
Jacqueline Hunt
the
Oliver Bäte
Chiar Béo Sergio Ballinst
The Board of Management
Allianz SE
Munich, 20 February 2020
Dr. Günther Thallinger
Our presentation of these key audit matters has been structured in
each case as follows:
R. Wagner
170
1 Measurement of certain technical assets and liabilities as well as
certain financial liabilities carried at fair value (level 3) in life and
health insurance
In our view, the matters of most significance in our audit were as fol-
lows:
Key audit matters are those matters that, in our professional judgment,
were of most significance in our audit of the consolidated financial state-
ments for the financial year from 1 January to 31 December 2019. These
matters were addressed in the context of our audit of the consolidated
financial statements as a whole, and in forming our audit opinion thereon;
we do not provide a separate audit opinion on these matters.
KEY AUDIT MATTERS IN THE AUDIT OF THE
CONSOLIDATED FINANCIAL STATEMENTS
We conducted our audit of the consolidated financial statements and
of the group management report in accordance with § 317 HGB and
the EU Audit Regulation (No. 537/2014, referred to subsequently as
"EU Audit Regulation") in compliance with German Generally Accepted
Standards for Financial Statement Audits promulgated by the Institut
der Wirtschaftsprüfer [Institute of Public Auditors in Germany] (IDW).
Our responsibilities under those requirements and principles are fur-
ther described in the "Auditor's Responsibilities for the Audit of the Con-
solidated Financial Statements and of the Group Management Re-
port” section of our auditor's report. We are independent of the group
entities in accordance with the requirements of European law and Ger-
man commercial and professional law, and we have fulfilled our other
German professional responsibilities in accordance with these require-
ments. In addition, in accordance with Article 10(2) point (f) of the EU
Audit Regulation, we declare that we have not provided non-audit ser-
vices prohibited under Article 5(1) of the EU Audit Regulation. We be-
lieve that the audit evidence we have obtained is sufficient and appro-
priate to provide a basis for our audit opinions on the consolidated fi-
nancial statements and on the group management report.
BASIS FOR THE AUDIT OPINIONS
Pursuant to § 322 Abs. 3 Satz [sentence] 1 HGB, we declare that our
audit has not led to any reservations relating to the legal compliance
of the consolidated financial statements and of the group manage-
ment report.
the accompanying group management report as a whole pro-
vides an appropriate view of the Group's position. In all material
respects, this group management report is consistent with the con-
solidated financial statements, complies with German legal re-
quirements and appropriately presents the opportunities and risks
of future development. Our audit opinion on the group manage-
ment report does not cover the content of those parts of the group
management report listed in the "Other Information" section of our
auditor's report.
the accompanying consolidated financial statements comply, in
all material respects, with the IFRSS as adopted by the EU, and the
additional requirements of German commercial law pursuant to
§ [Article]315e Abs. [paragraph] 1 HGB [Handelsgesetzbuch: Ger-
man Commercial Code] and, in compliance with these require-
ments, give a true and fair view of the assets, liabilities, and finan-
cial position of the Group as at 31 December 2019, and of its finan-
cial performance for the financial year from 1 January to 31 De-
cember 2019, and
-
-
In our opinion, on the basis of the knowledge obtained in the audit,
We have audited the consolidated financial statements of Allianz SE,
Munich, and its subsidiaries (the Group), which comprise the consoli-
dated balance sheet as at 31 December 2019, and the consolidated
income statement, consolidated statement of comprehensive income,
consolidated statement of changes in equity and consolidated state-
ment of cash flows for the financial year from 1 January to 31 Decem-
ber 2019, and notes to the consolidated financial statements, includ-
ing a summary of significant accounting policies. In addition, we have
audited the group management report of Allianz SE for the financial
year from 1 January to 31 December 2019. In accordance with the Ger-
man legal requirements, we have not audited the content of those
parts of the group management report listed in the "Other Infor-
mation" section of our auditor's report.
AUDIT OPINIONS
Report on the audit of the consolidated financial
statements and of the group management
report
E_Further Information
To Allianz SE, Munich
INDEPENDENT AUDITOR'S REPORT
Annual Report 2019 - Allianz Group
Renate Wadner
AUDITOR'S RESPONSIBILITIES FOR THE AUDIT OF THE
CONSOLIDATED FINANCIAL STATEMENTS AND OF
THE GROUP MANAGEMENT REPORT
Our objectives are to obtain reasonable assurance about whether the
consolidated financial statements as a whole are free from material
misstatement, whether due to fraud or error, and whether the group
management report as a whole provides an appropriate view of the
Group's position and, in all material respects, is consistent with the con-
solidated financial statements and the knowledge obtained in the au-
dit, complies with the German legal requirements and appropriately
presents the opportunities and risks of future development, as well as
to issue an auditor's report that includes our audit opinions on the con-
solidated financial statements and on the group management report.
Reasonable assurance is a high level of assurance, but is not a
guarantee that an audit conducted in accordance with §317 HGB and
the EU Audit Regulation and in compliance with German Generally Ac-
cepted Standards for Financial Statement Audits promulgated by the
Institut der Wirtschaftsprüfer (IDW) will always detect a material mis-
statement. Misstatements can arise from fraud or error and are con-
sidered material if, individually or in the aggregate, they could reason-
ably be expected to influence the economic decisions of users taken
on the basis of these consolidated financial statements and this group
management report.
Orientation
Annual Report 2019 - Allianz Group
176
(German Public Auditor)
Hendrik Fink
Wirtschaftsprüfer
(German Public Auditor)
Richard Burger
Wirtschaftsprüfer
PricewaterhouseCoopers GmbH
Wirtschaftsprüfungsgesellschaft
Munich, 24 February 2020
The report is not intended for any third parties to base any (finan-
cial) decision thereon. Our responsibility lies only with the Company.
We do not assume any responsibility towards third parties.
INTENDED USE OF THE ASSURANCE REPORT
We issue this report on the basis of the engagement agreed with the
Company. The assurance engagement has been performed for pur-
poses of the Company and the report is solely intended to inform the
Company about the results of the reasonable assurance engagement.
E_Further Information
175
Annual Report 2019 - Allianz Group
In our opinion, the Non-financial Report for the period from 1 January
to 31 December 2019 has been prepared, in all material aspects, in
accordance with §§315c in conjunction with 289c to 289e HGB.
ASSURANCE CONCLUSION
Evaluation of the presentation of the information in the Non-finan-
cial Report.
Obtaining an understanding of the work of external experts
providing data as well as evaluation of competence, capabilities
and objectivity of these external experts.
Analytical evaluation of selected disclosures in the Non-financial
Report.
MULTICHANNEL REPORTING
Identification of the likely risks of material misstatement of the
Non-financial Report.
Print
Further Allianz publications
TRANSFORM
We
WE!
ALLIANZ
OUTPERFOR
ALLIANZ PEOPLE FACT BOOK 2019
This sign indicates where to find additional infor-
mation in this Annual Report or on the internet.
ORIENTATION GUIDE
www.allianz.com/sustainability
Date of publication: 29 April 2020.
The Allianz Group Sustainability Report "Collaborating for a
Sustainable Future" covers our contribution to the environment,
society and economy. It provides full details of our sustainability
strategy, approach and progress in 2019 as well as an outlook
for 2020.
Allianz
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Allianz Investor
Relations App
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A SUSTAINABLE FUTURE
COLLABORATING FOR
ALLIANZ SUSTAINABILITY REPORT 2019
Allianz ⑪
Performance of site visits on a sample basis as part of the inspec-
tion of processes for collecting, controlling, analyzing and aggre-
gating selected data.
Evaluation of the internal control system regarding the prepara-
tion process of the Non-financial Report.
Obtaining an understanding of the structure of the sustainability
organization and of the stakeholder engagement.
Inquiries of personnel involved in the preparation of the Non-fi-
nancial Report regarding the preparation process, the internal
control system relating to this process and selected disclosures in
the Non-financial Report.
We declare that the audit opinions expressed in this auditor's re-
port are consistent with the additional report to the audit committee
pursuant to Article 11 of the EU Audit Regulation (long-form audit re-
port).
We were elected as group auditor by the supervisory board on
7 March 2019. We were engaged by the supervisory board on
13 May 2019. We have been the group auditor of the Allianz SE, Mu-
nich, without interruption since the financial year 2018.
FURTHER INFORMATION PURSUANT TO ARTICLE 10
OF THE EU AUDIT REGULATION
Other legal and regulatory requirements
From the matters communicated with those charged with govern-
ance, we determine those matters that were of most significance in the
audit of the consolidated financial statements of the current period
and are therefore the key audit matters. We describe these matters in
our auditor's report unless law or regulation precludes public disclo-
sure about the matter.
We also provide those charged with governance with a statement
that we have complied with the relevant independence requirements,
and communicate with them all relationships and other matters that
may reasonably be thought to bear on our independence, and where
applicable, the related safeguards.
We communicate with those charged with governance regarding,
among other matters, the planned scope and timing of the audit and
significant audit findings, including any significant deficiencies in inter-
nal control that we identify during our audit.
the prospective information and on the assumptions used as a ba-
sis. There is a substantial unavoidable risk that future events will
differ materially from the prospective information.
Obtain sufficient appropriate audit evidence regarding the finan-
cial information of the entities or business activities within the
Group to express audit opinions on the consolidated financial
statements and on the group management report. We are respon-
sible for the direction, supervision and performance of the group
audit. We remain solely responsible for our audit opinions.
Evaluate the consistency of the group management report with
the consolidated financial statements, its conformity with German
law, and the view of the Group's position it provides.
Perform audit procedures on the prospective information pre-
sented by the executive directors in the group management re-
port. On the basis of sufficient appropriate audit evidence we eval-
uate, in particular, the significant assumptions used by the execu-
tive directors as a basis for the prospective information, and eval-
uate the proper derivation of the prospective information from
these assumptions. We do not express a separate audit opinion on
Evaluate the overall presentation, structure and content of the
consolidated financial statements, including the disclosures, and
whether the consolidated financial statements present the under-
lying transactions and events in a manner that the consolidated
financial statements give a true and fair view of the assets, liabili-
ties, financial position and financial performance of the Group in
compliance with IFRSS as adopted by the EU and the additional
requirements of German commercial law pursuant to §315e Abs.
1 HGB.
Conclude on the appropriateness of the executive directors' use of
the going concern basis of accounting and, based on the audit ev-
idence obtained, whether a material uncertainty exists related to
events or conditions that may cast significant doubt on the Group's
ability to continue as a going concern. If we conclude that a mate-
rial uncertainty exists, we are required to draw attention in the au-
ditor's report to the related disclosures in the consolidated finan-
cial statements and in the group management report or, if such
disclosures are inadequate, to modify our respective audit opin-
ions. Our conclusions are based on the audit evidence obtained up
to the date of our auditor's report. However, future events or con-
ditions may cause the Group to cease to be able to continue as a
going concern.
Evaluate the appropriateness of accounting policies used by the
executive directors and the reasonableness of estimates made by
the executive directors and related disclosures.
Obtain an understanding of internal control relevant to the audit
of the consolidated financial statements and of arrangements and
measures (systems) relevant to the audit of the group manage-
ment report in order to design audit procedures that are appropri-
ate in the circumstances, but not for the purpose of expressing an
audit opinion on the effectiveness of these systems.
Identify and assess the risks of material misstatement of the con-
solidated financial statements and of the group management re-
port, whether due to fraud or error, design and perform audit pro-
cedures responsive to those risks, and obtain audit evidence that is
sufficient and appropriate to provide a basis for our audit opinions.
The risk of not detecting a material misstatement resulting from
fraud is higher than for one resulting from error, as fraud may in-
volve collusion, forgery, intentional omissions, misrepresentations,
or the override of internal control.
174
E_Further Information
173
Annual Report 2019 - Allianz Group
We exercise professional judgment and maintain professional skepti-
cism throughout the audit. We also:
GERMAN PUBLIC AUDITOR RESPONSIBLE FOR THE
ENGAGEMENT
The German Public Auditor responsible for the engagement is Richard
Burger.
Munich, 24 February 2020
PricewaterhouseCoopers GmbH
Wirtschaftsprüfungsgesellschaft
Within the scope of our assurance engagement, we performed
amongst others the following assurance procedures and further activ-
ities:
A reasonable assurance engagement involves performing proce-
dures to obtain sufficient appropriate evidence whether the Non-fi-
nancial Report has been prepared in accordance with §§315c in con-
junction with 289c to 289e HGB. The assurance procedures selected
depend on the practitioner's judgment.
We conducted our assurance engagement in accordance with the
International Standard on Assurance Engagements (ISAE) 3000 (Re-
vised): Assurance Engagements other than Audits or Reviews of Histor-
ical Financial Information, issued by the IAASB. This Standard requires
that we plan and perform the assurance engagement to obtain rea-
sonable assurance whether the Company's Non-financial Report for
the period from 1 January to 31 December 2019 has been prepared,
in all material aspects, in accordance with §§315c in conjunction with
289c to 289e HGB.
Within the scope of our engagement we did not perform an eval-
uation on external sources of information or expert opinions, referred
to in the Non-financial Report.
Our responsibility is to express a reasonable assurance conclusion on
the information in the Non-financial Report based on the assurance
engagement we have performed.
PRACTITIONER'S RESPONSIBILITY
ments.
Our audit firm applies the national legal requirements and pro-
fessional standards - in particular the Professional Code for German
Public Auditors and German Chartered Auditors ["Berufssatzung für
Wirtschaftsprüfer und vereidigte Buchprüfer": "BS WP/vBP"] as well as
the Standard on Quality Control 1 published by the Institut der
Wirtschaftsprüfer [Institute of Public Auditors in Germany] (IDW): Re-
quirements to quality control for audit firms [IDW Qualitätssicher-
ungsstandard 1: Anforderungen an die Qualitätssicherung in der
Wirtschaftsprüferpraxis - IDW QS 1] - and accordingly maintains a
comprehensive system of quality control including documented poli-
cies and procedures regarding compliance with ethical requirements,
professional standards and applicable legal and regulatory require-
We have complied with the German professional provisions regarding
independence as well as other ethical requirements.
To the best of our knowledge, and in accordance with the applicable
reporting principles, the consolidated financial statements give a true
and fair view of the assets, liabilities, financial position and profit or loss
of the group, and the group management report includes a fair review
of the development and performance of the business and the position
of the group, together with a description of the material opportunities
and risks associated with the expected development of the group.
INDEPENDENCE AND QUALITY CONTROL OF THE
AUDIT FIRM
RESPONSIBILITIES OF THE EXECUTIVE DIRECTORS
The executive directors of the Company are responsible for the prepa-
ration of the Non-financial Report in accordance with §§315c in con-
junction with 289c to 289e HGB.
We have performed a reasonable assurance engagement on the com-
bined separate non-financial report pursuant to §§ [Articles] 341a Abs.
[paragraph] 1a and 341j Abs. 4 in conjunction with 289b Abs. 3 and
315b Abs. 3 HGB ["Handelsgesetzbuch": "German Commercial Code"]
of Allianz SE, Munich, (hereinafter the "Company") for the period from
1 January to 31 December 2019 (hereinafter the "Non-financial Re-
port").
To Allianz SE, Munich
Independent Practitioner's Report on a
Reasonable Assurance Engagement on Non-
financial Reporting
INDEPENDENT PRACTITIONER'S REASONABLE ASSURANCE REPORT
E_Further Information
Annual Report 2019 - Allianz Group
Julia Unkel
Wirtschaftsprüferin
(German Public Auditor)
Richard Burger
Wirtschaftsprüfer
(German Public Auditor)
This responsibility of the Company's executive directors includes
the selection and application of appropriate methods of non-financial
reporting as well as making assumptions and estimates related to in-
dividual non-financial disclosures which are reasonable in the circum-
stances. Furthermore, the executive directors are responsible for such
internal control as they have considered necessary to enable the prep-
aration of a Non-financial Report that is free from material misstate-
ment whether due to fraud or error.
RESPONSIBILITY STATEMENT
E_Further Information
169
PEOPLE FACT BOOK 2019
Allianz SE - Königinstrasse 28 - 80802 Munich - Germany - Phone +49 89 3800 0 - info@allianz.com - www.allianz.com
Front page design: hw.design GmbH - Photography: Andreas Pohlmann - Typesetting: Produced in-house with SmartNotes -
Printing: G. Peschke Druckerei GmbH - Annual Report on the internet: www.allianz.com/annualreport - Date of publication: 6 March 2020
This is a translation of the German Annual Report of Allianz Group. In case of any divergences, the German original is legally binding.
1- The German Securities Trading Act ("Wertpapierhandelsgesetz") obliges issuers to announce immediately any information which may have a substantial price impact. Therefore we cannot exclude that
we have to announce key figures related to quarterly and fiscal year results ahead of the dates mentioned above. As we can never rule out changes of dates, we recommend checking them on the
internet at www.allianz.com/financialcalendar.
5 May 2021
19 February 2021
5 March 2021
6 November 2020
5 August 2020
12 May 2020
6 May 2020
Annual General Meeting
Annual Report 2020.
Financial Results 2020.
Financial Results 3Q
Allianz
Financial Results 1Q.
Annual Report 2019 - Allianz Group
Financial Results 2Q/Interim Report 6M
E
Date of publication: March 2020.
www.allianz.com/hrfactbook
GUIDELINE ON ALTERNATIVE
FURTHER INFORMATION
Further information on the definition of our Alternative
Performance Measures and their components, as well as
the basis of calculation adopted:
www.allianz.com/results
Financial calendar
Important dates for shareholders and analysts¹
Annual General Meeting
PERFORMANCE MEASURES
- One further shareholder representative
(Herbert Hainer)
of the Supervisory Board (Michael
Diekmann)
Chairman: Chairman
3 members
NOMINATION COMMITTEE
- One employee representative (Gabriele
Burkhardt-Berg)
of the Supervisory Board (Michael
Diekmann)
5 members
3 members
- Two employee representatives (Godfrey
Hayward, Frank Kirsch)
PERSONNEL COMMITTEE
- Chairman: appointed by the Supervisory
Board (Michael Diekmann)
-Three shareholder representatives
(in addition to Michael Diekmann:
Christine Bosse, Dr. Friedrich Eichiner)
Two further shareholder representatives
(Christine Bosse, Jim Hagemann Snabe)
RISK COMMITTEE
- Two employee representatives
(Jean-Claude Le Goaër, Martina Grundler)
Dr. Friedrich Eichiner: Sophie Boissard,
Michael Diekmann)
- Chairman: Chairman
TECHNOLOGY COMMITTEE
-Approval of certain transactions which require the
approval of the Supervisory Board, e.g. capital
measures, acquisitions, and disposals of
participations
- Chairman: appointed by the Supervisory
Board (Jim Hagemann Snabe)
- Preparation of the appointment of Board of
Management members
- Initial review of the Risk Report and other risk-
related statements in the annual financial
statements and management reports of Allianz SE
and the Allianz Group, informing the Audit
Committee of the results of such reviews
- Monitoring of the effectiveness of the risk
management system
- Monitoring of the general risk situation and special
risk developments in the Allianz Group
- Monitoring of the audit procedures, including
the independence of the auditor and the services
additionally rendered, awarding of the audit
contract and determining the focal points of the
audit
- Monitoring of the financial reporting process,
the effectiveness of the internal control and audit
system and legal and compliance issues
- Initial review of the annual Allianz SE and consoli-
dated financial statements, management reports
(incl. Risk Report) and the dividend proposal,
review of half-yearly reports or, where applicable,
quarterly financial reports or statements
- Preparation of the efficiency review of the
Supervisory Board
pursuant to § 161 "Aktiengesetz" (German Stock
Corporation Act) and checks on corporate
governance
- Preparation of the Declaration of Conformity
- Three shareholder
representatives (in addition to
Responsibilities
As of 31 December 2019
- Two employee representatives (Gabriele
Burkhardt-Berg, Jürgen Lawrenz)
- Three shareholder representatives
(in addition to Jim Hagemann Snabe:
Michael Diekmann, Dr. Friedrich Eichiner)
5 members
(Dr. Friedrich Eichiner)
of the Supervisory Board
(Michael Diekmann)
Chairman: appointed
12
The Allianz Group runs its operating entities and business segments via
an integrated management and control process. First, the Holding and
the operating entities define the business strategies and goals. On this
basis, joint plans are then prepared for the Supervisory Board's consid-
eration when setting targets for the performance-based remuneration
of the members of the Board of Management. For details, see the
Remuneration Report starting on >> page 23.
Designing, monitoring, and improving
group-wide compensation systems in line
with regulatory requirements and sub-
mitting an annual report on the monitoring
results, along with proposals for improvement.
Implementing the Group investment strategy,
including monitoring group-wide invest-
ment activities as well as approving invest-
ment-related frameworks and guidelines
and individual investments within certain
thresholds.
Responsibilities
As of 31 December 2019
GROUP INVESTMENT COMMITTEE
Board members of Allianz SE and Allianz Group
executives.
GROUP COMPENSATION COMMITTEE
Board members of Allianz SE and executives
below Allianz SE Board level.
12
Group committees
Group committees
In addition to Board committees, there are also Group committees.
They are responsible for preparing decisions for the Board of
Management of Allianz SE, submitting proposals for resolutions, and
ensuring a smooth flow of information within the Group.
Board of Management meetings are led by the Chairman. Each
member of the Board may request a meeting, providing notification of
the proposed subject. The Board makes decisions by a simple majority
of participating members. In the event of a tie, the Chairman casts the
deciding vote. The Chairman can also veto decisions, but he cannot
impose any decisions against the majority vote.
The members of the Board of Management are jointly responsi-
ble for management and for complying with legal requirements. Not-
withstanding this overall responsibility, the individual members head
the departments they have been assigned independently. There are
divisional responsibilities for business segments as well as functional
responsibilities. The latter include the Finance, Risk Management and
Controlling Functions, Investments, Operations and Allianz Services,
Human Resources, Legal, Compliance, Internal Audit, and Mergers &
Acquisitions. Business division responsibilities focus on geographical
regions or Global Lines. Rules of procedure specify in more detail the
structure and departmental responsibilities of the Board of Manage-
ment.
The Board of Management of Allianz SE has ten members. It is respon-
sible for setting business objectives and the strategic direction, for co-
ordinating and supervising the operating entities, and for
implementing and overseeing an efficient risk management system.
The Board of Management also prepares the annual financial state-
ments of Allianz SE, the Allianz Group's consolidated financial state-
ments, the market value balance sheet, and the interim report.
Function of the Board of Management
Managing and overseeing Group M & A-
transactions, including approval of
individual transactions within certain
thresholds.
Developing, proposing, implementing
and monitoring a group-wide IT strategy,
approving external IT contracts and business-
related IT contracts with strategic and group
relevance.
In the financial year 2019, the following Group committees were in
place:
Annual Report 2019 - Allianz Group
B_Corporate Governance
The Board of Management reports regularly and comprehen-
sively to the Supervisory Board on business development, the com-
pany's financial position and earnings, planning and achievement of
objectives, business strategy, and risk exposure. Details on the Board
of Management's reporting to the Supervisory Board are laid down in
the information rules issued by the Supervisory Board.
5 members
AUDIT COMMITTEE
- Two further shareholder representatives
(Herbert Hainer, Jim Hagemann Snabe)
- Two employee representatives (Jürgen
Lawrenz, Jean-Claude Le Goaër)
- Preparation of plenary session resolutions on the
compensation system and the overall
- Chairman: Chairman
5 members
Supervisory Board committees
STANDING COMMITTEE
Supervisory Board committees
Part of the Supervisory Board's work is carried out by its committees.
The Supervisory Board receives regular reports on the activities of its
committees. The composition of committees and the tasks assigned to
them are regulated by the Supervisory Board's Rules of Procedure.
SUPERVISORY BOARD COMMITTEES
The Supervisory Board regularly reviews the efficiency of its acti-
vities. The Supervisory Board discusses recommendations for improve-
ments and adopts appropriate measures on the basis of recommen-
dations from the Standing Committee. This self-assessment also in-
cludes an evaluation of the fitness and propriety of the individual
members.
The Supervisory Board makes all decisions based on a simple ma-
jority. The special requirements for appointing members to the Board
of Management, as stipulated in the German Co-Determination Act,
and the requirement to have a Conciliation Committee do not apply
to an SE. In the event of a tie, the casting vote lies with the Chairman
of the Supervisory Board, who at Allianz SE must be a shareholder rep-
resentative. If the Chairman is not present in the event of a tie, the cast-
ing vote lies with the vice chairperson from the shareholder side. A sec-
ond vice chairperson is elected at the employee representatives' pro-
posal.
The Supervisory Board oversees and advises the Board of Man-
agement on managing the business. It is also responsible for appoint-
ing the members of the Board of Management, determining their
overall remuneration, succession planning for the Board of Manage-
ment, and reviewing Allianz SE's and the Allianz Group's annual finan-
cial statements. The Supervisory Board's activities in the 2019 financial
year are described in the Supervisory Board Report starting on
> page 4.
The Supervisory Board comprises twelve members, including six
shareholder representatives appointed by the AGM. The six employee
representatives are appointed by the SE works council. The specific
procedure for their appointment is laid down in the SE Agreement. This
agreement stipulates that the six employee representatives must be
allocated in proportion to the number of Allianz employees in the
different countries. The Supervisory Board currently in office includes
four employee representatives from Germany and one each from
France and the United Kingdom. According to §17 (2) of the
German SE Implementation Act ("SE-Ausführungsgesetz"), the Super-
visory Board of Allianz SE shall be composed of at least 30% women
and at least 30% men.
The German Co-Determination Act ("Mitbestimmungsgesetz") does
not apply to Allianz SE because it has the legal form of a European
Company (SE). Instead, the size and composition of the Supervisory
Board is determined by general European SE regulations. These regu-
lations are implemented in the Statutes and via the SE Agreement.
Principles and function of the Supervisory Board
Important decisions of the Board of Management require
approval by the Supervisory Board. These requirements are stipulated
by law, by the Statutes, or in individual cases by decisions of the Annual
General Meeting (AGM). Supervisory Board approval is required, for
example, for certain capital transactions, intercompany agreements,
and the launch of new business segments or the closure of existing
ones. Approval is also required for acquisitions of companies and hold-
ings in companies, as well as for divestments of Group companies that
exceed certain threshold levels. The Agreement concerning the Partic-
ipation of Employees in Allianz SE, in the version dated
3 July 2014 (hereinafter "SE Agreement"), requires the approval of the
Supervisory Board for the appointment of the member of the Board of
Management responsible for employment and social welfare.
by the Supervisory Board
compensation of Board of Management members
- Selection of suitable candidates for election to the
Supervisory Board as shareholder representatives
- Long-term succession planning for the Board of
Management
4/4
Michael Diekmann (Chairman)
STANDING COMMITTEE
Jürgen Lawrenz
Frank Kirsch
100
6/6
100
6/6
100
6/6
100
6/6
83.3
5/6
100
Jean-Claude Le Goaër
4/4
100
100
4/4
Gabriele Burkhardt-Berg
100
4/4
Michael Diekmann (Chairman)
PERSONNEL COMMITTEE
100
Jim Hagemann Snabe
4/4
100
4/4
Jürgen Lawrenz
100
4/4
Herbert Hainer
100
6/6
100
6/6
Gabriele Burkhardt-Berg (Vice Chairwoman)
Michael Diekmann (Chairman)
PLENARY SESSIONS OF THE SUPERVISORY BOARD
Publication of details of members' participation in meetings
The Supervisory Board considers it good corporate governance to
publish the details of individual members' participation in plenary
sessions and committee meetings:
PARTICIPATION IN MEETINGS
B_Corporate Governance
Jim Hagemann Snabe (Vice Chairman)
13
- Support of the Supervisory Board in monitoring the
implementation of the Board of Management's
technology and innovation strategy
- In-depth monitoring of the Board of Management's
technology and innovation strategy
- Regular exchange regarding technological
developments
the composition of the Supervisory Board
- Establishment of selection criteria for shareholder
representatives on the Supervisory Board in
compliance with the Code's recommendations on
- Setting of concrete objectives for the composition
of the Supervisory Board
-Approval of the assumption of other mandates
by Board of Management members
Annual Report 2019 - Allianz Group
- Conclusion, amendment, and termination of service
contracts of Board of Management members
unless reserved for the plenary session
Sophie Boissard
Dr. Friedrich Eichiner
100
6/6
100
6/6
100
6/6
100
Christine Bosse
6/6
6/6
%
Presence
Godfrey Hayward
Herbert Hainer
Martina Grundler
Jean-Claude Le Goaër
100
PUBLICATION OF DETAILS OF MEMBERS'
Lawrenz
Herbert Hainer
✓
✓
✓
༨
✓
✓
No
ness
15
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓
Annual Report 2019 - Allianz Group
1_As of 31 December 2019.
- In order to provide the Board with the most diverse sources of experience and specialist
knowledge possible, the members of the Supervisory Board shall complement each other with
respect to their background, professional experience, and specialist knowledge."
they can attend extraordinary meetings of the Supervisory Board or of a special committee to
deal with special matters as and when required.
5. Retirement age
The members of the Supervisory Board shall, as a rule, not be older than 70 years of age.
6. Term of membership
The continuous period of membership for any member of the Supervisory Board should, as a rule,
not exceed 15 years (since 1.1.2020: 12 years).
7. Former Allianz SE Management Board members
Former Allianz SE Management Board members are subject to the mandatory corporate law cooling-
off period of two years.
According to regulatory provisions, no more than two former Allianz SE Management Board
members shall be members of the Supervisory Board.
II. Requirements for the entire Supervisory Board
1. Profile of skills and expertise for the entire Supervisory Board
In addition to the expertise-related requirements for the individual members, the following shall
apply with respect to the expertise and experience of the entire Supervisory Board:
- familiarity of members in their entirety with the insurance and financial services sector;
adequate expertise of the entire board with respect to investment management, insurance
actuarial practice, and accounting (since 1.1.2020: and technology);
- at least one member with considerable experience in the fields of insurance and financial services;
at least one member with comprehensive expertise in the fields of accounting or auditing;
(since 1.1.2020: at least one member with comprehensive expertise in the field of digital
transformation);
- specialist expertise or experience in other economic sectors;
managerial or operational experience.
2. Diversity concept
To promote an integrative cooperation among the Supervisory Board members, the Supervisory
Board strives for an adequate diversity with respect to gender, internationality, different occupational
backgrounds, professional expertise, and experience:
-
The Supervisory Board shall be composed of at least 30 % women and at least 30% men. The
representation of women is generally considered to be the joint responsibility of the shareholder
and employee representatives.
- At least four of the members must, on the basis of their origin or function, represent regions or
cultural areas in which Allianz SE conducts significant business.
For Allianz SE as a Societas Europaea, the agreement concerning the participation of employees in
Allianz SE provides the following: Allianz employees from different EU member states be
considered in the allocation of employee representatives' Supervisory Board seats.
✓
✓
Independence¹
(Fit & Proper)
2012
2017
2014
2017
Joined Board in
Tenure
Kirsch
Grundler Hayward
Le Goaër
Burkhardt-
Berg
Hainer
Eichiner
Bosse
Boissard
Snabe
Diekmann
equal participation of women and men in leadership positions (statu-
tory gender quota of 30%) is being met. In addition, the Supervisory
Board has five members with international backgrounds. The skills
profile is also met by all current members of the Supervisory Board.
Based on the objectives regarding its composition, the Supervisory
Board of Allianz SE has developed the following skills matrix.
The composition of the Supervisory Board of Allianz SE reflects these
objectives. According to the assessment by the Supervisory Board, all
shareholder representatives, i.e. Ms. Boissard, Ms. Bosse as well as Mr.
Diekmann, Dr. Eichiner, Mr. Hainer and Mr. Snabe, are independent
within the meaning of the objectives (see No. 1.3). With four female and
eight male Supervisory Board members, the current legislation for
B_Corporate Governance
2016
depending on possible membership in one or more of the current six Supervisory Board special
committees, this involves extra time planning to participate in these Committee meetings and do
the necessary preparation for these meetings; this applies in particular for the Audit and risk
Committees;
2017
2018
Personal
appro-
priate-
、
✓
>
✓
✓
✓
>
✓
✓
✓
✓
✓
requirement
Regulatory
2015
2018
2017
2016
2012
Preparation of the capital and liquidity
planning for the Group and Allianz SE,
implementing and overseeing the
principles of group-wide capital and
liquidity planning, as well as investment
strategy and preparing risk strategy.
This includes, in particular, significant
individual investments and guidelines for
currency management, Group financing
and internal Group capital management,
as well as establishing and overseeing a
group-wide risk management and
monitoring system including dynamic
stress tests.
they can attend the General Meeting;
Employee representation within Allianz SE, according to the Agreement concerning the Participation
of Employees in Allianz SE, contributes to the diversity of work experience and cultural background.
Pursuant to the provisions of the German SE Participation Act (SEBG), the number of women and
men appointed as German employee representatives should be proportional to the number of
women and men working in the German companies. However, the Supervisory Board does not have
the right to select the employee representatives.
Frank Kirsch
TECHNOLOGY COMMITTEE
Jim Hagemann Snabe (Chairman)
Gabriele Burkhardt-Berg
Michael Diekmann
22222
100
100
Godfrey Hayward
100
100
Dr. Friedrich Eichiner
Jürgen Lawrenz
2/2
100
2/2 100
2/2
100
100
Dr. Friedrich Eichiner
Christine Bosse
Michael Diekmann (Chairman)
4/4
100
AUDIT COMMITTEE
Dr. Friedrich Eichiner (Chairman)
5/5
100
Sophie Boissard
5/5
100
Michael Diekmann
5/5
100
Jean-Claude Le Goaër
5/5
100
Martina Grundler
5/5
100
RISK COMMITTEE
2/2
100
2/2
100
- adequate expertise in all business areas;
adequate expertise in the insurance and finance sector or comparable relevant experience and
expertise in other sectors;
- adequate expertise in the regulatory provisions material for Allianz SE (supervisory law,
including Solvency II regulation, corporate and capital markets law, corporate governance);
- ability to assess the business risks;
- knowledge of accounting and risk management basics.
3. Independence
The GCGC defines a person as independent who, in particular, does not have any business or
personal relations with Allianz SE or its executive bodies, a controlling shareholder, or an
enterprise associated with the latter, which may cause a substantial and not merely temporary
conflict of interest.
To further specify the definition of independence, the Supervisory Board of Allianz SE states the
following:
- Former members of the Allianz SE Board of Management shall not be deemed independent
during the mandatory corporate law cooling-off period.
- Members of the Supervisory Board of Allianz SE in office for more than 15 years (since 1.1.2020:12
years) shall not be deemed independent.
Regarding employee representatives, the mere fact of employee representation and the existence
of a working relationship with the company shall not in itself affect the independence of the
employee representatives.
Applying such definition, at least eight members of the Supervisory Board shall be independent. In
case shareholder representatives and employee representatives are viewed separately, at least four
of each should be independent.
It has to be considered that the possible emergence of conflicts of interests in individual cases cannot
generally be excluded. Potential conflicts of interest must be disclosed to the Chairman of the
Supervisory Board and will be resolved by appropriate measures.
4. Time of availability
Each member of the Supervisory Board must ensure that they have sufficient time to dedicate
to the proper fulfilment of the mandate of this Supervisory Board position.
In addition to the mandatory mandate limitations and the GCGC recommendation for active
Management Board members of listed companies (max. three mandates - since 1.1.2020: two
mandates), the common capital markets requirements shall be considered.
With respect to the Allianz SE mandate, the members shall ensure that
-they can attend at least four, usually six ordinary Supervisory Board meetings per year, each of
which requires adequate preparation;
they have sufficient time for the audit of the annual and consolidated financial statements;
The amendment in particular relates to the skills and expertise of the
Supervisory Board and the reduction of the term of membership from
15 to 12 years. In addition to the skills profile for the overall Supervisory
Board, also to be established due to a new recommendation of the
Code, the diversity concept in accordance with the legislation on the
implementation of the European guideline as regards the disclosure of
non-financial and diversity information (CSR Directive) is also included:
The members of the Supervisory Board must have the expertise and experience necessary for a
diligent and autonomous exercise of the Allianz SE Supervisory Board mandate, in particular for
exercising control of and giving advice to the Board of Management as well as for the active
support of the development of the company. This comprises in particular:
The following requirements and objectives apply to the composition of Allianz SE's Supervisory
Board:
The members of the Supervisory Board must be proper as defined by the regulatory provisions. A
person is assumed to be proper as long as no facts are to be known which may cause impropriety.
Therefore, no personal circumstances shall exist which - according to general experience - lead to
the assumption that the diligent and orderly exercise of the mandate may be affected (in particular
administrative offenses or violation of criminal law, esp. in connection with commercial activity).
2. Fitness
I. Requirements relating to the individual members of the Supervisory Board
NOMINATION COMMITTEE
Michael Diekmann (Chairman)
1/1
100
Christine Bosse
1/1
100
Jim Hagemann Snabe
1/1
100
14
Annual Report 2019 - Allianz Group
B_Corporate Governance
OBJECTIVES OF THE SUPERVISORY BOARD
REGARDING ITS COMPOSITION
The objectives for the composition of the Supervisory Board in the
version of August 2017, as specified to implement a recommendation
by the Code, are set out below. In light of the new German Corporate
Governance Code expected in 2020, the Supervisory Board already in
December 2019 amended the objectives for its composition,
effective 1 January 2020, to reflect the specifications of the new Code.
Objectives of Allianz SE's Supervisory Board regarding its composition¹
"The aim of Allianz SE's Supervisory Board is to have members who are equipped with the necessary
skills and competence to properly supervise and advise Allianz SE's management. Supervisory Board
candidates should possess the professional expertise and experience, integrity, motivation and
commitment, independence, and personality required to successfully carry out the responsibilities of a
Supervisory Board member in a financial services institution with international operations.
These objectives take into account the regulatory requirements for the composition of the Supervisory
Board as well as the relevant recommendations of the German Corporate Governance Code
("GCGC"). In addition to the requirements for each individual member, a profile of skills and expertise
("Kompetenzprofil") as well as a diversity concept are provided for the entire Supervisory Board.
1. Propriety
Responsibilities
Allianz China Insurance Holding Company Ltd.
(Chairman)
Giulio Terzariol.
✓
North America
Engagement
✓
Employee
Transformation
✓
Digital
✓
Technology
Management
Expertise
✓
Investment
-
、
✓
Regional Growth
Expertise Markets
、
Europe (EU)
✓
>
༨
༨
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓
༨
------
✓
、
✓
✓
German
Danish
French
Danish
German
Nationality
As of 31 December 2019
male
male
male
female
male
female
male
male
female
female
German
༨
German
German
Actuarial
Practice
Insurance
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓
Accounting
German
German
British
French
༨
、
༨
Munich, December 13, 2019
Allianz SE
Since the last Declaration of Conformity as of December 12, 2018, Allianz SE has complied
with all recommendations of the German Corporate Governance Code in the version of
February 7, 2017 and will comply with them in the future.
Declaration of Conformity by the Management Board and the Supervisory Board of
Allianz SE with the recommendations of the German Corporate Governance Code
Commission in accordance with § 161 of the German Stock Corporation Act (AktG)
Declaration of Conformity in accordance with § 161 of the German
Stock Corporation Act
On 13 December 2019, the Board of Management and the
Supervisory Board issued the following Declaration of Conformity of
Allianz SE with the German Corporate Governance Code (hereinafter
the "Code"):
Declaration of Conformity with the German
Corporate Governance Code
The Statement on Corporate Management pursuant to § 315d and
§ 289f of the German Commercial Code ("Handelsgesetzbuch- HGB")
forms part of the Group Management Report. However,
according to § 317 (2) sentence 6 of the HGB, this Statement is not
included within the scope of the audit.
STATEMENT ON CORPORATE MANAGEMENT
PURSUANT TO § 315d AND § 289f OF THE HGB
B_Corporate Governance
Annual Report 2019 - Allianz Group
17
The regulatory requirements for corporate governance applicable for
insurance companies, insurance groups, and financial conglomerates
are also important. Specifically, they include the establishment and
further design of significant control functions (risk management, actu-
arial function, compliance, and internal audit) as well as general prin-
ciples for a sound business organization. These regulatory require-
ments are applicable throughout the Group in principle and have
been implemented using written guidelines issued by the Board of
Management of Allianz SE. Solvency II requires the publication of
qualitative and quantitative information including a market value bal-
ance sheet. Details on the implementation of the regulatory require-
ments for corporate governance by Allianz SE and by the
Allianz Group can be found in the Solvency and Financial Condition
Report of Allianz SE and of the Allianz Group, which are published on
our website at > www.allianz.com/sfcr.
Regulatory requirements
You can find the 2020 financial calendar on our website at
> www.allianz.com/financialcalendar.
We inform our shareholders, financial analysts, the media, and the
general public about the company's situation on a regular basis and
in a timely manner. The annual financial statements of Allianz SE, the
Allianz Group's consolidated financial statements, and the respective
management reports are published within 90 days of the end
of each financial year. Additional information is provided in the
Allianz Group's half-yearly financial reports and quarterly statements.
Information is also made available at the AGM, at press and analysts'
conferences, and on the Allianz Group's website. Our website also pro-
vides a financial calendar listing the dates of major publications and
events, such as annual reports, half-yearly financial reports, and quar-
terly statements, AGMs, and analyst conference calls as well as finan-
cial press conferences.
In compliance with the special legal provisions that apply to insur-
ance companies, the auditor of the annual financial statements and of
the half-yearly financial report is appointed by the Supervisory Board,
not the AGM. The audit of the financial statements covers the individ-
ual financial statements of Allianz SE and the consolidated financial
statements of the Allianz Group.
The Allianz Group prepares its accounts according to §315e of the Ger-
man Commercial Code ("Handelsgesetzbuch - HGB") on the basis of
the International Financial Reporting Standards (IFRS) adopted by the
European Union. The annual financial statements of Allianz SE are pre-
pared in accordance with German law and accounting rules.
For the Management Board:
Accounting and auditing
Signed Oliver Bäte
For the Supervisory Board:
Annual Report 2019 - Allianz Group
18
Compliance with applicable laws, rules, and regulations in all countries
in which Allianz SE and Allianz Group operate as well as with internal
policies and guidelines is key. The global compliance programs coor-
dinated by Allianz SE's central Group Compliance function support our
employees, managers, and executive board members to act responsi-
Communicating transparently and trustfully with supervisory au-
thorities.
Providing a speak-up facility that employees and third parties can
use to confidentially address irregularities;
Identifying and assessing material compliance risks and oversee-
ing the implementation of adequate and effective internal con-
trols to mitigate them;
Advising the board of management, managers, and employees on
business conduct that is lawful and ethical;
-
Integrity is at the core of our compliance programs and the basis for
the trust of our customers, shareholders, business partners, and
employees. The compliance function fosters a corporate culture of
individual and collective responsibility for ethical conduct and
adherence to the rules by:
COMPLIANCE MANAGEMENT SYSTEM
In addition, the quality of our internal control system is assessed
by the Allianz Group's Internal Audit function. This function conducts
independent, objective assurance and consulting activities, analyzing
the structure and efficiency of the internal control system as a whole.
In addition, it also examines the potential for additional value and
improvement of our organization's operations. Fully compliant with all
international auditing principles and standards, Internal Audit
contributes to the evaluation and improvement of the effectiveness of
the risk management, control, and governance processes. Therefore,
internal audit activities are geared towards helping the company to
mitigate risks, and further assist in strengthening its governance
processes and structures.
The Allianz Group has an effective internal risk and control system for
verifying and monitoring its operating activities and business
processes, in particular financial reporting, as well as compliance with
regulatory requirements. The requirements placed on the internal
control system are essential not only for the resilience and franchise
value of the company, but also to maintain the confidence of the
capital market, our customers, and the public. A comprehensive risk and
control management system regularly also assesses the effectiveness
and appropriateness of the internal control system as part of the
System of Governance. For further information on our risk organization
and risk principles, please refer to ②>> page 76. For further information
on our Integrated Risk and Control System for Financial Reporting,
please refer to > page 92.
INTERNAL CONTROL SYSTEM
Corporate governance practices
The Declaration of Conformity and further information on
corporate governance at Allianz can be found on our website at
> www.allianz.com/corporate-governance.
In addition, Allianz SE follows all the suggestions of the Code in its
7 February 2017 version.
Signed Michael Diekmann
Signed Dr. Helga Jung
B_Corporate Governance
Annual Report 2019 - Allianz Group
16
>
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓
༨
✓
✓
༨
✓
✓
✓
✓
16
The AGM elects the shareholder representatives of the
Supervisory Board and approves the actions taken by the Board of
Management and the Supervisory Board. It decides on the use of profits,
capital transactions, the approval of intercompany agreements, the re-
muneration of the Supervisory Board, and changes to the company's
Statutes. Resolutions of the General Meeting shall be passed, unless
mandatory legal provisions require otherwise, by a simple majority of
the valid votes cast. In accordance with European regulations and the
Statutes, changes to the Statutes require a two-thirds majority of votes
cast in case less than half of the share capital is represented in the
AGM. Each year, an ordinary AGM takes place at which the Board of
Management and the Supervisory Board give an account of the
preceding financial year. For special decisions, the German Stock
Corporation Act provides for the convening of an extraordinary AGM.
Shareholders exercise their rights at the Annual General Meeting.
When adopting resolutions, each share carries one vote. Shareholders
can follow the AGM's proceedings on the internet and be represented
by proxies. These proxies exercise voting rights exclusively on the basis
of instructions given by the shareholder. Shareholders are also able to
cast their votes via the internet in the form of online voting. Allianz SE
regularly promotes the use of internet services.
Annual General Meeting
Members of the Board of Management and the Supervisory Board, as
well as persons closely associated with them, are obliged by the E.U.
Market Abuse Directive to disclose to both Allianz SE and the German
Federal Financial Supervisory Authority any transactions involving
shares or debt securities of Allianz SE or financial derivatives or other
instruments based on them, as soon as the value of the securities
acquired or divested by the member amounts to five thousand Euros
or more within a calendar year. These disclosures are published on our
website at www.allianz.com/directorsdealings.
Directors' dealings
The current composition of the Supervisory Board and its committees
is described on CD:①>CHE: CHECKERED CERE.
✓ Criteria met. Expertise criteria based on yearly self-assessment. Tick means at least "Good knowledge" and implies the capacity to well understand the relevant matters and to take educated decisions. Good knowledge may result from existing
qualifications and from the training measures regularly attended by all members of the Supervisory Board. On a scale from A-E this requires at least grade B.
1 According to German Corporate Governance Code.
male
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓
male
Diversity
Overboarding¹
until 31 July 2019
Allianz p.l.c.
IVÁN DE LA SOTA
Business Transformation, Insurance Iberia & Latin
America, Allianz Partners
Membership in comparable¹ supervisory bodies
Membership in Group bodies
Allianz Compañía de Seguros y Reaseguros S.A., Spain
Allianz Partners S.A.S.
Allianz Seguros S.A., Brazil (Chairman)
Companhia de Seguros Allianz Portugal S.A.
GIULIO TERZARIOL
Finance, Controlling, Risk
DR. GÜNTHER THALLINGER
Investment Management
Membership in other statutory supervisory boards
and SE administrative boards in Germany
Membership in Group bodies
Allianz Investment Management SE (Chairman)
Allianz Lebensversicherungs-AG
Allianz Private Krankenversicherungs-AG
Allianz Versicherungs-AG
Allianz Australia Ltd.
DR. AXEL THEIS
Allianz Global Corporate & Specialty SE (Chairman)
Membership in comparable¹ supervisory bodies
Membership in Group bodies
Global Insurance Lines & Anglo Markets,
Reinsurance, Middle East, Africa
and SE administrative boards in Germany
Deutsche Telekom AG
Membership in Group bodies
Allianz Beratungs- und Vertriebs-AG
Allianz Deutschland AG
Allianz Global Corporate & Specialty SE
Allianz Private Krankenversicherungs-AG
Allianz Versicherungs-AG
since 14 November 2019
Gender
Membership in Group bodies
Allianz Compañía de Seguros y Reaseguros S.A.
Companhia de Seguros Allianz Portugal S.A.
DR. CHRISTOF MASCHER
Operations, Allianz Services
Membership in other statutory supervisory boards
and SE administrative boards in Germany
Volkswagen Autoversicherung AG
Membership in Group bodies
Allianz Technology SE (Chairman)
Membership in comparable¹ supervisory bodies
Membership in Group bodies
Allianz Partners S.A.S.
NIRAN PEIRIS
Membership in other statutory supervisory boards
and SE administrative boards in Germany
Membership in Group bodies
Membership in other statutory supervisory boards
Insurance German Speaking Countries and
Membership in other statutory supervisory boards
and SE administrative boards in Germany
Gemeinnützige ProCurand GmbH (Chairman)
Membership in Group bodies
CORPORATE GOVERNANCE REPORT
Good corporate governance is essential for sustainable business per-
formance. The Board of Management and the Supervisory Board of
Allianz SE therefore attach great importance to complying with the
recommendations of the German Corporate Governance Code (here-
inafter referred to as the "Code"). The Declaration of Conformity with
the recommendations of the Code, as issued by the Board of Manage-
ment and the Supervisory Board on 13 December 2019, and the com-
pany's position regarding the Code's suggestions can be found in the
Statement on Corporate Management pursuant to §315d and §289f
of the HGB starting on > page 18.
Corporate Constitution
of the European Company (SE)
As a European Company, Allianz SE is subject to special European SE
regulations and the German SE Implementation Act ("SE-Ausfüh-
rungsgesetz") in addition to the German SE Employee Involvement Act
("SE-Beteiligungsgesetz"). Notwithstanding, the main features of a
German stock corporation - in particular the two-tier board system
(Board of Management and Supervisory Board) and the principle of
equal employee representation on the Supervisory Board - have been
maintained by Allianz SE.
BOARD OF MANAGEMENT AND GROUP COMMITTEES
In the financial year 2019, the following Board of Management com-
mittees were in place:
Board Committees
Board committees
GROUP FINANCE AND RISK COMMITTEE
Giulio Terzariol (Chairman),
Niran Peiris,
Dr. Günther Thallinger,
Dr. Axel Theis.
GROUP IT COMMITTEE
Dr. Christof Mascher (Chairman),
Niran Peiris,
Giulio Terzariol,
Dr. Günther Thallinger,
Dr. Axel Theis.
GROUP MERGERS
AND ACQUISITIONS COMMITTEE
Dr. Helga Jung (Chairwoman),
Oliver Bäte,
Niran Peiris,
B_Corporate Governance
Central & Eastern Europe
11
B
Allianz Deutschland AG (Chairman)
Allianz Investment Management SE
Membership in comparable¹ supervisory bodies
Membership in Group bodies
Allianz Elementar Lebensversicherungs-AG
(Chairman)
Allianz Elementar Versicherungs-AG (Chairman)
Allianz Investmentbank AG
Allianz Suisse Lebensversicherungs-Gesellschaft AG
Allianz Suisse Versicherungs-Gesellschaft AG
RENATE WAGNER
since 1 January 2020
Human Resources, Legal, Compliance,
Mergers & Acquisitions
Membership in other statutory supervisory boards
and SE administrative boards in Germany
Membership in Group bodies
Allianz Global Investors GmbH
1 Generally, we regard memberships in other supervisory bodies as "comparable" if the company is listed on a stock exchange or has more than 500 employees.
10
110
Annual Report 2019 - Allianz Group
CORPORATE GOVERNANCE
Annual Report 2019 - Allianz Group
Mergers & Acquisitions
Membership in comparable¹ supervisory bodies
until 31 December 2019
Siemens AG
JIM HAGEMANN SNABE
Vice Chairman
Member of various Supervisory Boards
Membership in other statutory supervisory boards
and SE administrative boards in Germany
Siemens AG (Chairman)
Membership in comparable¹ supervisory bodies
A.P. Møller-Mærsk A/S (Chairman)
GABRIELE BURKHARDT-BERG
Human Resources, Legal, Compliance,
Chairwoman of the Group Works Council of Allianz SE
SOPHIE BOISSARD
Chairwoman of the Board of Management of Korian S.A.
Membership in other statutory supervisory boards
and SE administrative boards in Germany
Curanum AG (Korian Group company, Chairwoman)
Membership in comparable¹ supervisory bodies
Segesta SpA (Korian Group company, Chairwoman)
Senior Living Group NV (Korian Group company)
CHRISTINE BOSSE
Member of various Supervisory Boards
Membership in comparable¹ supervisory bodies
P/F BankNordik (Chairwoman)
DR. FRIEDRICH EICHINER
Member of various Supervisory Boards
Membership in other statutory supervisory boards
and SE administrative boards in Germany
Festo AG (Chairman)
Infineon Technologies AG
since 20 February 2020
Membership in comparable¹ supervisory bodies
Festo Management AG (Chairman)
Fresenius SE & Co. KGaA
JEAN-CLAUDE LE GOAËR
Employee of Allianz Informatique G.I.E.
Fresenius Management SE
BASF SE
✓
✓
༨
✓
✓
✓
✓
✓
༨
MANDATES OF THE MEMBERS
OF THE SUPERVISORY BOARD
A_To our Investors
MICHAEL DIEKMANN
Chairman
Member of various Supervisory Boards
Membership in other statutory supervisory boards
and SE administrative boards in Germany
until 3 May 2019
Membership in comparable¹ supervisory bodies
Membership in Group bodies
Allianz France S.A.
Vice Chairwoman
National Representative Insurances, ver.di Berlin
Chairman of the Board of Management
Membership in other statutory supervisory boards
and SE administrative boards in Germany
Membership in Group bodies
Allianz Deutschland AG
SERGIO BALBINOT
Insurance Western & Southern Europe,
Asia Pacific
Membership in comparable¹ supervisory bodies
UniCredit S.p.A.
Bajaj Allianz General Insurance Company Ltd.
Bajaj Allianz Life Insurance Company Ltd.
Membership in Group bodies
since 28 November 2019
MARTINA GRUNDLER
Allianz Sigorta A.S.
Allianz Yasam ve Emeklilik A.S.
JACQUELINE HUNT
Asset Management, US Life Insurance
Membership in comparable¹ supervisory bodies
Membership in Group bodies
Allianz Life Insurance Company of North America
(Chairwoman)
DR. HELGA JUNG
OLIVER BÄTE
OF THE BOARD OF MANAGEMENT
Allianz France S.A.
A_To our Investors
MANDATES OF THE MEMBERS
HERBERT HAINER
Member of various Supervisory Boards
Membership in other statutory supervisory boards
and SE administrative boards in Germany
Deutsche Lufthansa AG
Membership in comparable¹ supervisory bodies
Accenture Plc
GODFREY ROBERT HAYWARD
Employee of Allianz Insurance plc
FRANK KIRSCH
Employee of Allianz Beratungs- und Vertriebs-AG
Membership in other statutory supervisory boards
and SE administrative boards in Germany
Membership in Group bodies
Allianz Deutschland AG
FC Bayern München AG (Chairman since 9 December
2019)
until 31 December 2019
JÜRGEN LAWRENZ
Employee of Allianz Technology SE
Membership in other statutory supervisory boards
and SE administrative boards in Germany
Membership in Group bodies
Allianz Technology SE
1_Generally, we regard memberships in other supervisory bodies as "comparable" if the company is listed on a stock exchange or has more than 500 employees.
Annual Report 2019 - Allianz Group
9
Regular Board of Management member: one time base salary,
i.e. € 975 thou.
Chairman of the Board of Management: two times base salary,
i.e. €3,412 thou,
Members of the Board of Management must build share ownership
within three years, with the minimum level defined as follows:
SHAREHOLDING REQUIREMENTS AND TOTAL
SHAREHOLDING EXPOSURE
B_Corporate Governance
MAXIMUM TOTAL COMPENSATION (OVERALL CAP)
The sum of variable compensation and base salary payout including
pension contributions, which is paid in relation to one financial perfor-
mance year, will be capped at a maximum amount of € 6,000 thou for
a regular member of the Board of Management and at € 10,000 thou
for the Chairman of the Board of Management.
Annual Report 2019 - Allianz Group
Apart from cases of occupational or general disability for medical
reasons, the earliest age a pension can be drawn is 62. Should board
membership cease before the retirement age is reached, accrued
pension rights are maintained if vesting requirements are met.
Members of the Board of Management may have pension entitle-
ments under former pension plans or based on previous positions in
the Allianz Group or due to membership of the Board of Management
before 2015.
Holding is required for the entire term of service on the Board of
Management. Shares will be acquired through mandatory pay com-
ponent conversion. The holding obligation ceases with the end of
the mandate.
27
In combination with the virtual shares accumulated through the LTI
plan, the Allianz SE Board of Management has significant economic
exposure to the Allianz stock: It amounts to approx. € 14,000 thou
for the Chairman (= 240% of total target direct compensation) and
approx. €7,000 thou for a regular board member (= 210% of total
target direct compensation).
28
Board of Management contracts are limited to a period of five years.
For new appointments, based on the recommendation by the German
Corporate Governance Code announced for 2020, a shorter period of
up to three years is provided. Severance payments made to board
members in case of early termination are restricted according to the
German Corporate Governance Code.
SEVERANCE PAYMENT CAP
Payments for early termination to board members with a remaining
term of contract of more than two years are capped at twice the
annual compensation, consisting of last year's base salary and 100%
of the variable target compensation. If the remaining term of contract
is less than two years, the payment is pro-rated for the remaining term
of the contract. Contracts do not contain provisions for any other
cases of early termination of Board of Management service. In par-
ticular, to comply with the recommendation by the German Corporate
Governance Code announced for 2020, severance payments in case
of a change of control are discontinued.
TRANSITION PAYMENT
Board members appointed before 1 January 2010 are eligible for
a transition payment after leaving the Board of Management. The
transition payment comprises an amount corresponding to the most
recent base salary (paid for a period of six months), plus a one-time
payment of 25% of the target variable remuneration at notice date.
Where an Allianz pension is immediately payable, such pension is
deducted from the monthly transition payments.
MISCELLANEOUS
INTERNAL AND EXTERNAL BOARD APPOINTMENTS
When a member of the Board of Management simultaneously holds
an appointment at another company within the Allianz Group or their
joint ventures with outside partners, the full amount of the respective
remuneration is transferred to Allianz SE. In recognition of related
benefits to the organization and subject to prior approval by the
Supervisory Board of Allianz SE, board members are also allowed
to accept a limited number of non-executive supervisory roles at
appropriate external organizations. In these cases, 50% of the remu-
neration received is paid to Allianz SE. Only if the Allianz SE Supervisory
Board classifies the appointment as a personal one (ad personam), the
respective board member will retain the full remuneration for that
position. Any remuneration paid by external organizations will be
itemized in those organizations' annual reports; its level will be
determined by the governing body of the relevant organization.
28
Annual Report 2019 - Allianz Group
B_Corporate Governance
PENSION CONTRIBUTION AND SIMILAR BENEFITS
To provide competitive and cost-effective retirement and disability
benefits, company contributions to the current defined-contribution
pension plan "My Allianz Pension" are invested in a fund with a guaran-
tee for the contributions paid, but no further interest guarantee. Each
year the Supervisory Board decides whether and to what extent a
budget is provided, also taking into account the target pension level.
The current pension contribution generally represents 15% of the
target compensation of the board members.
TERMINATION OF SERVICE
Base salary (1,706/975) + pension contribution (853/488)
bly and with integrity in all situations. By participating in the United Na-
tions Global Compact, the world's largest and most important initia-
tive for responsible corporate leadership, and respecting the Guide-
lines of the Organization for Economic Cooperation and Development
(OECD Guidelines) for Multinational Enterprises, we integrate sustain-
ability and corporate responsibility into our business. By accepting and
complying with European and international standards and applicable
laws, Allianz aims to avoid the risks that arise from non-compliance. To
enhance our understanding of compliance issues and share best
practices, we work with organizations such as the German Institute for
Compliance (DICO) and the Global Insurance Chief Compliance
Officers' Forum (CCO Forum).
Fixed
2,559/1,463
However, in order to ensure that the remuneration system is also
in line with the new version of the German Corporate Governance
Code announced for 2020, the special severance payment rule for the
event of a change of control has been deleted without replacement
and, in the event of a contractually agreed non-competition clause,
provision has been made for a severance payment due to early
termination of a Management Board member to be set off against
a non-competition compensation (Karenzentschädigung).
The current structure became effective on 1 January 2019. It was
approved by the Annual Shareholder Meeting of Allianz SE on
8 May 2019 with a majority vote of 92%.
REMUNERATION STRUCTURE
This comparison is based on the total direct compensation of a member
of the Board of Management and the average direct compensation of
an employee of the Allianz workforce in Germany. For the fiscal year
2019, the factor resulting from this comparison for the Chairman of
Board of Management to employee is "77" and the factor regular
board member to employee is "42".
VERTICAL APPROPRIATENESS
The Supervisory Board regularly benchmarks the Allianz SE Board
of Management's remuneration against other DAX 30 companies.
Given Allianz's relative size, complexity, and sustained performance,
compensation levels are oriented towards the fourth quartile of the
compensation of that peer group.
HORIZONTAL APPROPRIATENESS
The structure, weighting, and level of each remuneration component
shall be adequate and appropriate.
ADEQUACY OF THE BOARD OF MANAGEMENT
REMUNERATION
Sustainability of performance and alignment with shareholder
interests: A major part of the variable remuneration reflects
longer-term performance with deferred payout (64%) and is linked
to the absolute and relative performance of the share price.
Support of the Group's strategy: The design of the performance
targets reflects the Allianz Group's business strategy.
Alignment of pay and performance: The performance-based, varia-
ble component of the Board remuneration forms a significant por-
tion of the overall remuneration (70%).
-
KEY PRINCIPLES
The Board of Management's remuneration is decided upon by the
entire Supervisory Board, based on proposals prepared by the Personnel
Committee of the Supervisory Board². The Supervisory Board designs
the remuneration system for the members of the Board of Management
in accordance with the applicable laws and regulations, in particular
the requirements of the German Stock Corporation Act (AktG) in the
currently valid version, regulatory requirements as well as the provisions
of the German Corporate Governance Code, while ensuring clarity and
comprehensibility. The Supervisory Board determines the total target
remuneration on the basis of the remuneration system.
RESPONSIBILITY FOR BOARD OF MANAGEMENT
REMUNERATION
Remuneration of the Allianz SE Board of
Management
All information provided here concerning Allianz SE Board of Manage-
ment remuneration as well as additional information can also be found
on our remuneration website at > www.allianz.com/remuneration.
The report has been prepared in accordance with the require-
ments of the German Commercial Code, the German Accounting
Standard No. 17, and the International Financial Reporting Standards
(IFRS). It also takes into account the relevant regulatory provisions and
the recommendations contained in the German Corporate Govern-
ance Code.
This remuneration report describes the remuneration structure and
arrangements for the Board of Management and the Supervisory
Board of Allianz SE.
B_Corporate Governance
REMUNERATION REPORT
Annual Report 2019 - Allianz Group
222
22
Under the Allianz Sustained Performance Plan (ASPP), Restricted
Stock Units (RSUs) - i.e. virtual Allianz shares - are granted to senior
management of the Allianz Group worldwide as a stock-based remu-
neration component. The conditions for these RSU contain change-of-
control clauses, which apply when a majority of the voting share capi-
tal in Allianz SE is directly or indirectly acquired by one or more third
parties who do not belong to the Allianz Group, and which provide for
an exception from the usual vesting and exercise periods. In line with
the relevant general conditions, the company will release the RSUs to
plan participants on the day of the change of control, without observ-
ing any vesting period that would otherwise apply. The cash amount
payable per RSU must equal the average market value of the Allianz
share and must equal or exceed the price offered per Allianz share in
a preceding tender offer. By providing for the non-application of the
vesting period in the event of a change of control, the terms take into
account the fact that the conditions influencing the share price are sub-
stantially different when there is a change of control.
A change-of-control clause in the service contracts of the mem-
bers of Allianz SE's Board of Management provides that, if within
twelve months after the acquisition of more than 50% of the com-
pany's share capital by one shareholder or several shareholders acting
in concert (change of control) the appointment as a member of the
Board of Management is revoked unilaterally by the Supervisory
Board, or if the mandate is ended by mutual agreement, or if the Man-
agement Board member resigns because his or her responsibilities as
a board member are significantly reduced through no fault of the
board member, he or she shall receive his or her contractual remuner-
ation for the remaining term of the service contract, but for the purpose
hereof limited to two years, in the form of a one-off payment. The one-
off payment is based on the fixed remuneration plus the variable re-
muneration, with this basis being limited, however, to the amount paid
for the last fiscal year. This applies accordingly if, within twelve months
of a change of control, a mandate in the Board of Management
comes to an end and is not extended: The one-off payment will then
be granted for the period between the end of the mandate and the
end of the two-year period following the change of control. The
change of control clauses in the service contracts of the members of
Allianz SE's Board of Management cease to have effect as soon as the
new German Corporate Governance Code expected in 2020 is pub-
lished in the official part of the Federal Gazette (Bundesanzeiger). For
further details, please refer to the Remuneration Report starting on
> page 23.
The company has entered into the following compensation agree-
ments with members of the Board of Management and certain em-
ployees, providing for the event of a takeover bid:
exercised, the respective credit lines have to be replaced by new
credit lines under conditions then applicable.
The framework agreements between Allianz SE and the subsidiaries
of various car manufacturers relating to the distribution of car
insurance by the respective car manufacturers each include a
clause under which each party has an extraordinary termination
right in case there is a change of control of the other party.
Bilateral credit agreements in some cases provide for termination
rights in the event of a change of control, mostly defined as the
acquisition of at least 30% of the voting rights within the meaning
of §29(2) of the German Takeover Act ("Wertpapiererwerbs- und
Übernahmegesetz - WpÜG"). Where such termination rights are
1 If required, outside advice is sought from independent external consultants. The Personnel Committee and the Supervisory
Board consult with the Chairman of the Board of Management, as appropriate, in assessing the performance and remu-
neration of Board of Management members with one exception: The Chairman of the Board of Management is not
involved in the discussion about his own remuneration.
Annual Report 2019 - Allianz Group
23
B_Corporate Governance
4-year relative
performance
(peer index)
☑
4-year
share price
performance
CEO: 2,559
RBM: 1,463
Individual
contribution factor
0-150%
☑
Group result
CEO: 1,422
RBM: 813
for target level
Modifier
• Fix
CEO*: 1,706
RBM*: 975
Long-term
incentive
(LTI)1
Allianz SE is also party to various bancassurance distribution
agreements for insurance products in various regions. These distri-
bution agreements normally include a clause under which the par-
ties have an extraordinary termination right in the event of a
change of control of the other party's ultimate holding company.
Shareholder agreements and joint ventures to which Allianz SE is
a party often contain change-of-control clauses that provide, as
the case may be, for the termination of the agreement, or for put
or call rights that one party can exercise with regard to the joint
venture or the target company, if there is a change of control of
the other party.
45%
70%
Annual bonus
25%
Base salary
30%
fix
30%
in € thou
Target
compensation
% of target
compensation
deferred
64%
cash
36%
variable
Our reinsurance contracts, in principle, include a clause under
which both parties to the contract have an extraordinary termina-
tion right, if and when the counterparty merges with another entity
or its ownership or control situation changes materially. Agree-
ments with brokers regarding services connected with the pur-
chase of reinsurance cover also provide for termination rights in
case of a change of control. Such clauses are standard market
practice.
The following essential agreements of the company are subject to a
change-of-control condition following a takeover bid:
ESSENTIAL AGREEMENTS OF ALLIANZ SE WITH
CHANGE-OF-CONTROL CLAUSES AND
COMPENSATION AGREEMENTS PROVIDING FOR
TAKEOVER SCENARIOS
Adequate proportion of women on the Management Board: at
least 30% by 31 December 2021;
-
The Supervisory Board assesses the achievement of such target, inter
alia, on the basis of the following specific indicators:
"For the composition of the Management Board, the Supervisory
Board aims for an adequate 'Diversity of Minds'. This comprises broad
diversity with regard to gender, internationality, and educational as
well as professional background.
The Supervisory Board adopted the following diversity concept
for the Board of Management of Allianz SE in August 2017:
In accordance with the legislation to implement the European CSR
Directive, the diversity concepts for the Board of Management and the
Supervisory Board, their objectives, implementation, and results
achieved are to be reported for the 2019 financial year.
Diversity concepts for the Board of Management.
and Supervisory Board
With regard to the Supervisory Boards of the subsidiaries con-
cerned, the target quotas for eight out of nine subsidiaries concerned
were set at 30% and the target quota for the remaining subsidiary con-
cerned was set at 33% for 31 December 2021. All subsidiaries con-
cerned reached this target as of 31 December 2019. The target quotas
for the respective Board of Management of the subsidiaries concerned
were between 20% and 30% (24% on average) for 31 December 2021
and were met by eight of the nine companies. For the two manage-
ment levels below the Board of Management, the respective Boards of
Management of the subsidiaries concerned had set target quotas be-
tween 17% and 33% (23% on average) for 31 December 2021 for the
first management level and target quotas between 20% and 33% (26%
on average) for 31 December 2021 for the second management level
below the Board of Management. As of 31 December 2019, the tar-
gets were met by six of the nine subsidiaries concerned at the first man-
agement level, while five of the nine companies met the targets set for
the second management level. Despite increased efforts to promote
women in the Allianz Group and also at the individual subsidiaries, it
was not possible to achieve the targets in these cases, as it was not
always possible to identify suitable female candidates for all vacant
positions. Allianz works further to achieve these targets.
In the longer term, Allianz aims to place women in at least 30% of
the positions at these two management levels throughout the Group.
In August 2017, the Supervisory Board set a target for the percent-
age of women on Allianz SE's Board of Management at 30% to be
achieved by 31 December 2021. As of 31 December 2019, the percent-
age of women on Allianz SE's Board of Management was to 20%. As
regards the proportion of women on the first and second manage-
ment levels below the Board of Management, the Board of Manage-
ment of Allianz SE has set a target of 20% and 30%, respectively, to be
met by 31 December 2021. As of 31 December 2019, this target was
already met for the first management level, with a percentage of
women of 22%, but could not yet be met on the second level with a
percentage of 24%. The first two management levels below the Board
of Management comprise a very small comparative group of execu-
tives. No suitable female candidates could be identified for the very
few positions that became vacant in the period considered.
Article 17 (2) of the German SE Implementation Act stipulates that
as of 1 January 2016, the share of women and men among the mem-
bers of the Supervisory Board of Allianz SE must each total up to 30%
at least. The Supervisory Board currently in office fulfils this require-
ment as it includes four women (33%) and eight men (67%).
This section outlines the targets set for Allianz SE and the other com-
panies of the Allianz Group in Germany that are subject to
co-determination (the "subsidiaries concerned") for the Supervisory
Board, the Board of Management, and the two management levels
below the Board of Management.
Information in accordance with the German Act
on Equal Participation of Women and Men in
Executive Positions in the Private and the Public
Sector
B_Corporate Governance
Adequate share of members with an international background
(e.g. based on origin or extensive professional experience abroad),
ideally with a connection to the regions in which Allianz Group is
operating;
Annual Report 2019 - Allianz Group
A general description of the functions of the Board of Manage-
ment, the Supervisory Board, and their committees can be found in the
Corporate Governance Report starting on ::①CHECK Cage 12, and on our
website at www.allianz.com/corporate-governance.
A description of the composition of the Supervisory Board and its
committees can be found ::: C:①CHECK: Cage 9 and 7 of the Annual Report. A
description of the composition of the Board of Management can be
found on page 10, while the composition of the Committees of the
Board of Management is described in the Corporate Governance
Report starting on > page 12. This information is also available on our
website at www.allianz.com/corporate-governance.
DESCRIPTION OF THE FUNCTIONS OF THE BOARD OF
MANAGEMENT AND THE SUPERVISORY BOARD AND
OF THE COMPOSITION AND FUNCTIONS OF THEIR
COMMITTEES
An anti-corruption training is compulsory for all Allianz employees
worldwide. The same is true for the antitrust training to exposed
employees. Further trainings exist for the other compliance programs.
In order to convey the principles of the Code of Conduct and the
compliance programs based on these principles, Allianz has
implemented interactive training programs around the world. These
provide practical guidance that enables employees to make their own
decisions based on internal and external requirements as well as
ethical principles. Training programs comprise in-person and e-learning
trainings and are delivered in several languages.
COMPLIANCE TRAINING
Allianz SE's central Group Compliance function has set up internal
guidelines for the following identified compliance risk areas: bribery
and corruption, money laundering and terrorism financing, economic
sanctions, capital markets integrity, sales compliance/customer protec-
tion, antitrust, internal fraud, data privacy, and US Foreign Account Tax
Compliance Act (FATCA). For further information on these compliance
risk areas, please refer to the Combined Separate Non-Financial
Report for Allianz Group and Allianz SE starting on > page 41 of the
Allianz Group's Annual Report 2019 and the Sustainability Report on
our website at www.allianz.com/sustainability.
COMPLIANCE PROGRAMS
A major component of the Allianz Group's compliance management
system is a speak-up facility that allows employees and third parties to
notify the relevant compliance department confidentially about
potential irregularities. No employee voicing concerns about
irregularities in good faith needs to fear retribution, even if the
concerns later turn out to be unfounded. Third parties can contact the
compliance department via an electronic mailbox on our website at:
> www.allianz.com/complaint-system.
SPEAK UP
Our Code of Conduct for Business Ethics and Compliance and the
internal Compliance policies and guidelines derived from it provide all
employees, managers, and executive board members with clear and
practical guidance, enabling them to act in line with the values of the
Allianz Group. The rules of conduct established by the Code of
Conduct are binding for all employees worldwide and build the basis
for our compliance programs. The Code of Conduct is available on our
website at www.allianz.com/corporate-governance.
CODE OF CONDUCT
Moreover, Allianz SE's central Group Compliance function is
responsible - in close cooperation with local compliance functions -
for ensuring the effective implementation and monitoring of the com-
pliance programs within the Allianz Group, as well as for investigating
potential compliance infringements. Furthermore, as a key function,
the compliance function carries out the advisory, risk identification and
assessment, monitoring, and early warning tasks required under the
Solvency II regime.
Fixed
19
0-272%2
Adequate diversity with regard to educational and professional
background, taking into account the limitations for the Supervisory
Board by regulatory requirements (fitness)."
The diversity concept for the Supervisory Board was approved by the
Supervisory Board in August 2017, and included in the objectives for
the composition of the Supervisory Board (see No. II.2 of the objectives
for the composition of the Supervisory Board: ::::: :D:DCHECK: page 15). The
Supervisory Board pursues these objectives, and thus also the diversity
concept, when nominating candidates for shareholder representa-
tives. As employee representatives are appointed according to differ-
ent national provisions, there is only limited potential influence to the
selection of employee representatives. The Supervisory Board is
currently composed in accordance with the diversity concept. For de-
tails please see the Corporate Governance Report on > page 12.
Domestic or foreign banks that are majority-owned by Allianz SE
may buy and sell Allianz shares for trading purposes (§71(1) No. 7 and
(2) AktG) under an authorization of the General Meeting valid until
8 May 2023. The total number of shares acquired thereunder, together
with treasury shares held by Allianz SE or attributable to it under §§ 71a
et seq. AktG, shall at no time exceed 10% of the share capital of
Allianz SE.
Under an authorization by the General Meeting of 9 May 2018,
the Board of Management may, until 8 May 2023, buy back Allianz
shares corresponding to up to 10% of the lower of (i) the share capital
at the moment of the shareholder resolution and (ii) the share capital
at the moment of the buy-back, and to use those shares for other pur-
poses (§71 (1) No. 8 AktG). Together with other treasury shares that are
held by Allianz SE, or which are attributable to it under §§ 71a et seq.
AktG, such shares may not exceed 10% of the share capital at any time.
The shares acquired pursuant to this authorization may be used, under
exclusion of the shareholders' subscription rights, for any legally ad-
missible purposes, in particular those specified in the authorization.
Furthermore, the acquisition of treasury shares under this authoriza-
tion may also be carried out using derivatives, provided such deriva-
tives do not relate to more than 5% of the share capital.
B_Corporate Governance
21
Annual Report 2019 - Allianz Group
The company's share capital is conditionally increased by up to
€ 250,000,000 (Conditional Capital 2010/2018). This conditional capi-
tal increase will only be carried out to the extent that the holders of
convertible bonds, bonds with warrants, convertible participation
rights, participation rights, and subordinated financial instruments
issued against cash by Allianz SE or its subsidiaries, based on the
authorizations granted by the General Meeting on 5 May 2010 or
9 May 2018, exercise their conversion or option rights, or to the extent
that conversion obligations from such bonds are fulfilled, and to such
extent that treasury shares or shares from authorized capital are not
used for such purpose.
Up to a total of € 15,000,000 (Authorized Capital 2018/II): The
shareholders' subscription rights are excluded. New shares may
only be issued to employees of Allianz SE and its Group compa-
nies.
Up to a total of € 334,960,000 (Authorized Capital 2018/1): In case
of a capital increase against cash contribution, the Board of Man-
agement may exclude the shareholders' subscription rights for
these shares with the consent of the Supervisory Board (i) for frac-
tional amounts, (ii) in order to safeguard the rights pertaining to
holders of convertible bonds or bonds with warrants, including
mandatory convertible bonds, and (iii) in the event of a capital
increase of up to 10%, if the issue price of the new shares is not
significantly below the stock market price. The Board of Manage-
ment may furthermore exclude the shareholders' subscription
rights with the consent of the Supervisory Board in the event of a
capital increase against contributions in kind.
It may increase the company's share capital on or before
8 May 2023, with the approval of the Supervisory Board, by issuing
new registered no-par value shares against contributions in cash
and/or in kind, on one or more occasions:
The Board of Management is authorized to issue shares as well as to
acquire and use treasury shares as follows:
AUTHORIZATION OF THE BOARD OF MANAGEMENT
TO ISSUE AND REPURCHASE SHARES
Amendments to the Statutes are governed by Article 59 SE Regu-
lation, § 179 AktG, and the Statutes § 13 (4) of the Statutes of Allianz SE
stipulates that, unless mandatory law requires otherwise, changes to
the Statutes require a two-thirds majority of the votes cast at a General
Meeting or, if at least one half of the share capital is represented, a
simple majority of the votes cast. Where the law requires a majority in
capital for a shareholder resolution, a simple majority of the capital
represented at the General Meeting is sufficient, provided this is in line
with legal requirements. The Supervisory Board may alter the wording
of the Statutes (§ 179 (1) AktG and § 10 of the Statutes).
vote, provided he or she is a shareholder representative. A Vice Chair-
person who is an employee representative has no casting vote (§8 (3)
of the Statutes).
The appointment and removal of members of Allianz SE's Board of
Management is governed by Articles 9(1), 39(2) and 46 of the SE
Regulation, §§84, 85 AktG, §24(3) and §47 No. 1 German Insurance
Supervision Act ("Versicherungsaufsichtsgesetz VAG"), and the
Statutes. According to the Statutes, the Board of Management shall
consist of at least two persons; the Supervisory Board determines the
number of any additional members (§5 (1) of the Statutes). The mem-
bers of the Board of Management are appointed by the Supervisory
Board for a term of up to five years; reappointment is permitted for a
maximum of five years in each case (§5 (3) of the Statutes). A simple
majority of the votes cast in the Supervisory Board is required to ap-
point members of the Board of Management. In the case of a tie vote,
the Chairperson of the Supervisory Board, who pursuant to Article 42
of the SE Regulation must be a shareholder representative, shall have
the casting vote (§8 (3) of the Statutes). If the Chairperson does not
participate in the vote the Vice Chairperson shall have the casting
This diversity concept is implemented in the appointment procedure
for members of the Board of Management by the Supervisory Board.
It is ensured that lists of successors will comprise appropriate percent-
ages of female candidates as well as of candidates with international
experience. The Personnel Committee takes this into consideration es-
pecially in succession planning. The share of women on the Manage-
ment Board is currently 20%. Six members of the Management Board
have international backgrounds. There is an adequate degree of vari-
ety as regards educational and professional backgrounds.
LEGAL AND STATUTORY PROVISIONS APPLICABLE
TO THE APPOINTMENT AND REMOVAL OF MEMBERS
OF THE BOARD OF MANAGEMENT AND TO
AMENDMENTS OF THE STATUTES
SHARES WITH SPECIAL RIGHTS
CONFERRING POWERS OF CONTROL
Allianz SE is not aware of any direct or indirect interests in the share
capital that exceed 10% of the voting rights.
INTERESTS IN THE SHARE CAPITAL
Shares acquired by employees of the Allianz Group as part of the
employee stock purchase plan are generally subject to a three-year
lock-up period. During the lock-up period, employees can exercise
their voting rights.
Shares may only be transferred with the consent of the company. An
approval duly applied for may only be withheld if this is deemed
necessary in the company's interest on exceptional grounds. The applicant
will be informed of the reasons.
RESTRICTIONS ON VOTING RIGHTS AND SHARE
TRANSFERS; EXERCISE OF VOTING RIGHTS IN CASE
OF EMPLOYEE EQUITY PARTICIPATIONS
As of 31 December 2019, the share capital of Allianz SE was
€ 1,169,920,000. It was divided into 417,172,859 registered and fully
paid-up shares with no par value. All shares carry the same rights and
obligations. Each no-par value share carries one vote.
COMPOSITION OF SHARE CAPITAL
The following information is provided pursuant to §289a (1) and
§315a (1) of the German Commercial Code ("Handelsgesetzbuch -
HGB") and §176(1) of the German Stock Company Act ("Aktiengesetz
- AktG").
B_Corporate Governance
TAKEOVER-RELATED STATEMENTS AND
EXPLANATIONS
Annual Report 2019 - Allianz Group
20
20
There are no shares with special rights conferring powers of control.
× Sustainability check (100% down to 0)
EXCEEDING 10% OF THE VOTING RIGHTS
Shareholding requirement
Variable remuneration components may not be paid, or payment may
be restricted, in the case of a significant breach of the Allianz Code
of Conduct or regulatory Solvency II policies or standards, including
risk limits. In the same way, for three years after payout, variable
remuneration components already paid may be subject to a clawback.
Additionally, a reduction or cancellation of variable remuneration
may occur if the supervisory authority (BaFin) requires this in accord-
ance with its statutory powers.
Malus/Clawback
50%
⚫TSR relative performance factor: 2 x (TSR Allianz: 15 % - TSR Stoxx Europe 600 Insurance: 40 %) + 100%
Payout
1,564
⚫RSU x share price at vesting (€ 190)
8,229
⚫RSU grant based on share price at grant (€ 200), reduced by the net present value of estimated future dividends (€ 40)
LTI payout at vesting based on:
1,317
90%
⚫LTI allocation value: annual bonus achievement factor applied to LTI target
1,463
€ thou
€ thou
RSU
2,766
⚫LTI target
Initial grant based on:
Illustrative example for RBM
LTI payout: Performance remains below expectation (scenario 2)
110%
•⚫TSR relative performance factor: 2 x (TSR Allianz: 45% - TSR Stoxx Europe 600 Insurance: 40 %) + 100%
Payout
2,515
⚫RSU x share price at vesting (€ 250)
10,058
⚫RSU grant based on share price at grant (€ 200), reduced by the net present value of estimated future dividends (€ 40)
LTI payout at vesting based on:
1,609
110%
⚫LTI allocation value: annual bonus achievement factor applied to LTI target
782
26
26
Annual Report 2019 - Allianz Group
Fixed
2,559/1,463
Fixed
2,559/1,463
Other
characteristics
• Maximum payout = target x 150%
Minimum payout = 0 if Group target achievement = 0
Annual bonus
Annual bonus
2,133/1,220
Annual bonus
1,422/813
limited by overall cap of 10,000/6,000
maximum grant x 200% share price x 200% TSR
• Maximum payout =
• Maximum grant = target x 150%
Sustainability assessment = 0
Annual bonus = 0, no grant OR
TSR: -50%p or below, OR
1,463
•
Minimum payout = 0:
LTI
5,308/3,317
LTI
B_Corporate Governance
2,559/1,463
LTI
MAXIMUM
10,000/6,000
@TARGET
6,540/3,739
€ thou CEO/RBM
Compensation sensitivity
The variable remuneration is designed to help achieve the operational
targets and to reward sustainable performance. Therefore, payout of
almost two thirds of the annual variable compensation will not occur
for a period of four years; such payout is subject to sustainability
assessment adjustments. A failure to meet targets may result in a
maximum reduction of the variable compensation to zero, with the
overall payout being capped:
COMPENSATION
OVERALL CAP AND SENSITIVITY OF TOTAL
•
€ thou
MINIMUM
2,559/1,463
RSU
INDIVIDUAL CONTRIBUTION FACTOR (ICF)
The Group financial targets are based on equally weighted targets for
Group operating profit and Group net income attributable to share-
holders. Both key performance indicators (KPIs) are important steering
parameters for the Allianz Group. Operating profit highlights the
underlying performance of ongoing core operations. Net income
attributable to shareholders is the profit after tax and non-controlling
interests (minorities). Furthermore, the net income forms the basis for
the dividend payout and for the return on equity calculation. The Group
financial targets therefore reflect the level of implementation of the
Group's strategy as set by the Board of Management.
GROUP FINANCIAL TARGETS
The annual bonus is based on the achievement of Group financial
targets for the respective financial year for which the annual bonus is
granted, and adjusted by an individual contribution factor (ICF), taking
into account individual and business division performance.
Annual bonus
Variable remuneration includes the annual bonus and a long-term
incentive (LTI).
VARIABLE REMUNERATION
Perquisites mainly consist of contributions to accident and liability
insurances, tax consultant fees (if in the interest of Allianz) and the
provision of a company car. Perquisites are not linked to performance;
a contractual annual cap applies. Each member of the Board of
Management is responsible for paying the income tax due on
these perquisites. The Supervisory Board regularly reviews the level
of perquisites.
PERQUISITES
The base salary, which is not performance-related, is paid in twelve
equal monthly installments.
BASE SALARY
SETTING PROCESS
REMUNERATION COMPONENTS AND TARGET
2_The overall compensation cap of € 10,000 thou | € 6,000 thou including pension contributions limits the effective payout of the LTI to a maximum of 255% (CEO) and 272% (RBM), respectively.
1_For simplicity reasons, the LTI percentage as well as the LTI target amount are based on target allocation values.
* CEO = Chief Executive Officer, RBM = regular Board member
CEO: 6,540
RBM: 3,739
• RBM: 1 x Base salary
⚫ CEO: 2 x Base salary
• Malus
€ thou
(up to 100%)
• Clawback
(up to 3 years)
For each board member, the Group financial target achievement is
multiplied by the ICF. The ICF is based on an overall discretionary
assessment by the Allianz SE Supervisory Board, as well as on KPIs
that take into account the specific area of responsibility of the respec-
tive board member and the personal contribution of the board mem-
ber. It is limited to a range of 0.8 to 1.2.
100%
Severance payment cap:
2 x total target compensation
+ Pension contribution
CEO: 853
RBM: 488
15% of total target (50% of base salary)
Total compensation
CEO: 5,687
RBM: 3,251
The ICF takes into account each board member's individual
contribution to the implementation of the business strategy.
Cap including pension contribution (in € thou): CEO: 10,000, RBM: 6,000
24
Illustrative example for RBM
LTI payout: Performance exceeds expectation (scenario 1)
For board members with business-related division responsibilities,
the contribution to the financial performance considers various in-
dicators of profitability (e.g., operating profit and net income) and
productivity (e.g., expense ratio) for the respective business division. For
board members with a functional focus, quantitative division-specific
performance targets are determined based on their key responsibilities.
Illustrative examples
B_Corporate Governance
25
Annual Report 2019 - Allianz Group
date to determine the volatility of the Allianz stock, the volatility of the peer index, their correlation, and the expected
dividends. The value of the RSUs used for the board members compensation may deviate from this IFRS value, as a
simplified calculation method was applied to increase transparency and traceability.
1_For accounting purposes, the determination of the fair value of RSUs is based on an option pricing model taking into
account additional input parameters, including the term structure of interest rates and the expected relative performance
Following the end of the four-year contractual vesting period, the
RSUs granted are settled in cash based on the ten-day average Xetra
closing price of the Allianz SE share following the annual financial
media conference in the year the respective RSU plan vests, multiplied
by the relative TSR performance factor and adjusted by the sustaina-
bility assessment as described above. The payout per RSU is capped
at twice the share price at grant. Taking into account the overall
compensation cap, the LTI payout, relative to the LTI target, is limited
to 255% for the Chairman of the Board of Management and 272% for
a regular board member > Overall cap and sensitivity of total com-
pensation.
LTI PAYOUT AND CAP
Following the sustainability assessment, the LTI payout amount may
be reduced to zero, if the performance of a board member was
not deemed sustainable. It compares the development of the annual
bonus KPIs in the grant year with the pay-out year of the LTI, addi-
tionally taking into account extraordinary events, the Solvency II ratio,
and balance sheet strength.
SUSTAINABILITY CHECK
Initial grant based on:
In order to avoid incentivizing excessive risk taking, the relative
TSR performance factor is limited: It can vary between zero (for
underperformance of the index by -50%-points or lower) and
200% (for outperformance of the index by +50%-points or higher).
The relative TSR performance factor is calculated as follows:
Allianz TSR at the end of the contractual vesting period in %-
points minus index TSR at the end of the contractual vesting
period in %-points, the result times two, plus 100%.
Example: 5%-points outperformance results in a relative perfor-
mance factor of 110%, 5%-points underperformance results in a
relative performance factor of 90%.
of the Allianz share price compared to the peer index. For the latter, simulation techniques are applied at the valuation
-
The Allianz SE total shareholder return (TSR) is benchmarked
against the TSR of the STOXX Europe 600 insurance index by
reflecting the relation of the total performance of the Allianz share
("Allianz TSR") and the total performance of the STOXX Europe
600 Insurance Performance Index ("Index TSR") between start and
end of the four-year contractual vesting period.
Non-financial targets take into account customer satisfaction (e.g.,
NPS), employee engagement (e.g., Allianz Engagement Survey) and
leadership quality, including strategic priorities. The assessment of
the individual leadership quality also includes a review of behavioral
aspects, such as customer orientation, collaborative leadership, entre-
preneurship, and trust (e.g., corporate social responsibility, integrity,
diversity as well as sustainability as measured by the reduction of the
carbon footprint, the greenhouse gas reduction as well as a step-by-
step plan to achieve net-zero compliant asset allocation until 2050, at
the latest).
PAYOUT AND ANNUAL BONUS CAP
B_Corporate Governance
Annual Report 2019 - Allianz Group
Long-term incentive (LTI)
Following the end of the respective financial year for which the bonus is
granted, the annual bonus is settled in cash and may range between
zero and 150% of the target amount.
The long-term share-based compensation component takes the
highest share within the variable compensation. It fosters shareholder
alignment and takes the implementation of the long-term strategy
into account. Furthermore, the company's long-term development is
reflected by the deferred sustainability assessment.
ALLIANZ SHARE PERFORMANCE
The LTI is granted annually in the form of virtual Allianz shares, so-called
restricted stock units (RSUs), with a four-year contractual vesting
period. The LTI allocation amount is derived by multiplying the LTI
target amount by the annual bonus achievement factor, and capped
at 150% of the LTI target level. To determine the number of RSUs to be
granted, the LTI allocation amount is divided by the allocation value
of an RSU at grant. The RSU allocation value is based on the ten-day-
average Xetra closing price of the Allianz stock following the annual
financial media conference¹. As RSUs are virtual stock without dividend
payments, the relevant share price is reduced by the net present value
of the expected future dividend payments during the contractual
vesting period.
RELATIVE PERFORMANCE VERSUS PEERS
⚫LTI target
The LTI payout takes Allianz's relative performance into account:
904
750
904
946
750
1,911
1,737
Deferred compensation
1,516
MTB (2016 - 2018)5
AEI 2019/RSU4
LTI 2019-2020/RSU4
946
904
946
AEI 2015/RSU4
2,128
AEI 2014/RSU4
473
3,004
3,783
3,399
1,454
904
Total
473
395
473
395
Total
473
395
Pension service cost
1,926
3,568
3,664
3,465
4,328
981
3,310
473
106
975
813
975
750
975
975
750
Perquisites
Base salary
Max
750
Min
Target
2019
2018
2019
2018
4,801
2019
2018
Target
4
6
6
750
150
Annual bonus
Annual variable compensation
981
6
975
545
754
981
754
981
981
981
754
Total fixed compensation
6
4
6
1,220
3,860
1,787
3,963
932
750
2,128
1,516
Total
Pension service cost
Total
AEI 2014/RSU4
750
AEI 2015/RSU4
AEI 2019/RSU4
LTI 2019-2020/RSU4
Deferred compensation
981
932
981
932
1,220
MTB (2016 - 2018)5
932
3,015
3,032
Payout³
4,087
4,919
1,571
564
510
564
510
564
564
564
3,900
510
3,542
1,988
4,729
3,775
3,578
4,354
1,007
3,336
813
750
Annual bonus
Annual variable compensation
975
975
750
Base salary
Max
Min
Target
Target
2019
2018
2019
2018
2019
2018
Payout³
Actual grant¹,2
Grant¹
Dr. Axel Theis (Appointed: 01/2015)
2,400
975
4,137
750
750
1,007
782
1,007
782
1,007
1,007
1,007
782
Total fixed compensation
32
32
32
32
32
32
32
32
Perquisites
975
975
Actual grant¹,2
Total
Dr. Günther Thallinger (Appointed: 01/2017)
266
488
266
488
488
488
266
Pension service cost
488
1,833
3,395
2,549
4,341
993
3,322
2,328
4,340
AEI 2014/RSU4
1,967
Total
2,594
3,810
Pension service cost
Total
AEI 2014/RSU4
AEI 2015/RSU4
MTB (2016 - 2018)5
AEI 2019/RSU4
LTI 2019-2020/RSU4
Deferred compensation
Annual bonus
Annual variable compensation
Total fixed compensation
Perquisites
Base salary
2,321
2,233
3,883
2,815
4,829
1,481
AEI 2015/RSU4
695
639
565
993
993
993
633
Total fixed compensation
18
718
18
718
18
18
18
718
Perquisites
975
563
975
563
975
633
Total
993
993
639
565
1,562
2,128
1,516
MTB (2016 - 2018)5
AEI 2019/RSU4
LTI 2019-2020/RSU4
Deferred compensation
840
639
840
840
639
1,220
813
565
Annual bonus
Annual variable compensation
633
Grant¹
Giulio Terzariol (Appointed: 01/2018)
Actual grant¹,2
304
483
483
483
304
3,330
1,946
2,622
3,683
483
3,432
1,001
3,329
3,027
960
885
750
885
750
4,348
304
483
3,812
B_Corporate Governance
€ thou (total might not sum up due to rounding)
Individual remuneration: 2019 and 2018
Annual Report 2019 - Allianz Group
34
8_Iván de la Sota received a one-time payment of € 50 thou to reimburse him for relocation cost.
7_Iván de la Sota joined the Allianz SE Board of Management on 1 April 2018. He received a pro-rated base salary, annual bonus, MTB tranche, and equity-related compensation. The different pro-rated amounts for base salary and target amounts
result from different pro-rating methodologies, which are generally applied.
6_Pension service cost in accordance with IAS 19: represents the company cost, not the actual entitlement or a payment. The German Corporate Governance Code requires that the pension service cost be included in all columns.
5_The MTB figure included in the column "Actual grant 2018" shows the annual accrual before any adjustments that may follow from the sustainability assessment. The payout 2018 figure includes the payout for the performance years 2016-2018,
as adjusted based on the sustainability assessment. The MTB 2016-2018 was paid out in spring 2019.
4_The share price related value increase is capped at 200% above grant price for the AEI/RSU and at 100% above grant price for the LTI/RSU. Furthermore, the value increase is limited by the overall payout cap. The relevant share price used to
determine the RSU value, and hence the final number of RSUs granted, and the caps are only available after sign-off by the external auditors.
3_In accordance with the German Corporate Governance Code, the annual bonus disclosed for performance year 2019 is paid in 2020 and for performance year 2018 in 2019. The payments for share-based deferred compensation (AEI and LTI),
however, are disclosed for the year in which the actual payment was made.
2_The column "Actual grant 2019" is in line with the disclosure requirements under the German Accounting Standard No. 17. To reconcile figures with said requirements for 2018, the total as shown in column "Actual grant 2018" has to be adjusted
to exclude the MTB accrual for 2018 and to include the payout from the MTB 2016-2018 as disclosed in column "Payout 2018".
1 The disclosed LTI target/min/max and LTI actual 2019 figures represent the LTI fair values, which differs from the LTI allocation value. The determination of the LTI fair values is based on an option pricing model taking into account additional
input parameters, including the term structure of interest rates and the expected relative performance of the Allianz share price compared to the peer index. For the latter, simulation techniques are applied at the valuation date to determine the
volatility of the Allianz stock, the volatility of the peer index and their correlation.
2,429
2,925
4,166
3,735
4,831
1,483
1,737
2,128
1,516
946
975
750
975
750
975
975
975
750
Max
Min
Target
Target
2019
2018
2019
2018
2019
2018
Payout³
27
Grant¹
26
26
885
946
885
1,220
813
50
750
1,001
777
1,001
777
1,001
1,001
1,001
777
26
27
26
27
26
5,238
32
1 The disclosed LTI target/min/max and LTI actual 2019 figures represent the LTI fair values, which differs from the LTI allocation value. The determination of the LTI fair values is based on an option pricing model taking into account additional
input parameters, including the term structure of interest rates and the expected relative performance of the Allianz share price compared to the peer index. For the latter, simulation techniques are applied at the valuation date to determine the
volatility of the Allianz stock, the volatility of the peer index and their correlation.
14
935
425
660
30
387
14
19
277
2019
701
266
96
268
266
34
303
14
Giulio Terzariol
483
2,260
2018
42
7
1,420
429
1,700
38
2019
Dr. Günther Thallinger
1,500
304
238
14
486
269
486
6
289
14
19
2018
473
1,270
122
717
44
47
6
1,409
357
3,139
25
432
2018
489
912
49
52
6
1,897
429
3,770
6,631
5,312
Niran Peiris
2019
9
710
426
61
42
377
11
14
2019
Iván de la Sota
322
317
322
317
2018
751
413
751
413
488
3,162
2018
31
1,644
Dr. Helga Jung
360
1,644
Jacqueline Hunt
360
1,644
1,260
360
5,754
at 31/12/2019
Number of
shares
Sergio Balbinot
Oliver Bäte
Board members
Portfolio value
Under the shareholding requirements, Members of the Board of
Management must build share ownership within three years, i.e., a third
every year >shareholding requirements. As of 31 December 2019, the
members of the Board of Management held the following numbers of
shares:
SHAREHOLDINGS
in € thou
Dr. Christof Mascher
1,644
360
975
The remuneration of the new regular member of the Board of
Management, Renate Wagner, has been set at the same level as for
the other regular members of the Board of Management.
NEW BOARD MEMBER
OUTLOOK FOR 2020
360
1,644
Dr. Axel Theis
360
1,644
Dr. Günther Thallinger
360
1,644
Giulio Terzariol
360
1,644
Iván de la Sota
360
1,644
Niran Peiris
As of 31 December 2019, there were no outstanding loans by
Allianz Group companies to members of the Board of Management.
MANAGEMENT
LOANS TO MEMBERS OF THE BOARD OF
B_Corporate Governance
22
330
11
1,712
406
2,910
34
3,479
92
120
2019
Dr. Axel Theis
2,252
395
37
7
949
357
1,266
896
6
564
2018
Annual Report 2019 - Allianz Group
37
6_DBO = defined-benefit obligation, end of year. The figures show the obligation for Allianz resulting from defined benefit plans, taking into account realistic assumptions with regard to interest rate, dynamics, and biometric probabilities.
5_SC = service cost. Service costs are calculatory costs for the DBO related to the business year reported.
4_Expected annual pension payment at assumed retirement age for the frozen defined-benefit pension plan, excluding current pension plan.
1_The service cost of the frozen contribution-based pension plan reflects the continued death and disability cover.
2_Plan participants contribute 3% of their relevant salary to the AVK. For the AVK the minimum guaranteed interest rate is 2.75% -3.50% depending on the date of joining Allianz. In general, the company funds the balance required via the APV.
Before Allianz's founding of the APV in 1998, both Allianz and the plan participants were contributing to the AVK.
3_For details on the transition payment, see section "Termination of service". In any event a death benefit is included.
7,633
510
727
24
306
11
1,254
334
2,415
33
2,930
108
120
9,327
2019
Dr. Christof Mascher
4,861
27,885
9,553
Dr. Axel Theis
1,423
17,287
9,209
Dr. Günther Thallinger
1,287
-
14,471
Giulio Terzariol
1,322
15,217
8,176
Iván de la Sota
Dr. Günther Thallinger: € 4,472 thou,
Giulio Terzariol: € 3,507 thou,
Iván de la Sota: € 2,605 thou,
9,209
Dr. Axel Theis: € 5,661 thou.
2,305
Total
Transition
payment³
AVK/APV²
Current pension plan
Contribution-based
pension plan
(frozen)¹
Defined-benefit pension plan
(frozen)
In 2019 former members of the Board of Management and their
dependents received remunerations and other benefits totaling
€ 8 mn (2018: € 8 mn), while reserves for current pension obligations
and accrued pension rights totaled € 159 mn (2018: € 152 mn).
paid € 5 mn (2018: € 4 mn) to increase reserves for pensions and
similar benefits for active members of the Board of Management. As
of 31 December 2019, reserves for pensions and similar benefits for
active members of the Board of Management amounted to € 41 mn
(2018: € 31 mn).
Individual pensions: 2019 and 2018
€ thou (total might not sum up due to rounding)
For members with pension rights under the now frozen defined-
benefit plan, the above contribution rates are reduced by 19% of the
expected annual pension from that frozen plan. In 2019, Allianz Group
Company contributions to the current pension plan "My Allianz Pension”
are generally 15% of total target direct compensation, reduced by an
amount covering the death and occupational or general disability risk.
They are invested in a fund with a guarantee on the contributions paid,
but no further interest guarantee.
PENSIONS
B_Corporate Governance
Annual Report 2019 - Allianz Group
36
1 The relevant value of an RSU is only available after sign-off of the Annual Report by the external auditors, therefore
numbers are based on a best estimate. As disclosed in the Annual Report 2018, the share-based grant in 2019 was
made to participants as part of their 2018 remuneration. The disclosure in the Annual Report 2018 was based on a
best estimate of the RSU grants. The actual grants deviated from the estimated values and have to be disclosed
accordingly. The actual RSU grants as of 1 March 2019 under the Allianz Equity Incentive are as follows: Oliver Bäte:
10,422, Sergio Balbinot: 6,016, Jacqueline Hunt: 5,834, Dr. Helga Jung: 5,592, Dr. Christof Mascher: 5,290, Niran Peiris:
5,592, Iván de la Sota: 4,941, Giulio Terzariol: 5,713, Dr. Günther Thallinger: 5,834, Dr. Axel Theis: 6,016.
2_Grants of share-based remuneration are accounted for as cash-settled awards. The fair value of the RSUs granted is
remeasured at each reporting date and accrued, as a compensation expense, proportionately over the vesting period.
The sum of the total remuneration of the Board of Management for
2019, excluding the pension service cost, amounts to € 39 mn (2018,
including the payments of the MTB 2016 - 2018: € 51 mn). The
corresponding amount, including pension service cost, equals € 44 mn
(2018, including the payments of the MTB 2016 - 2018: € 55 mn).
19,514
227,306
97,482
1,429
16,539
6,886
Niran Peiris
Jacqueline Hunt
Oliver Bäte
Sergio Balbinot
Board members
Grants, outstanding holdings, and equity compensation expense under
the Allianz Equity Program (AEI, until and including 2019) and the LTI
from March 2020
In accordance with the method described earlier, a number of RSUs
were granted to each member of the Board of Management in March
2020. They will vest and be settled in 2024.
SHARE-BASED REMUNERATION
Dr. Helga Jung: € 5,500 thou,
Oliver Bäte: € 9,386 thou,
Sergio Balbinot: € 5,725 thou,
Jacqueline Hunt: € 5,038 thou,
For 2018, the disclosure required under the German Accounting
Standard No. 17 is composed of the same components but includes
the payout of the MTB 2016 - 2018:
The total remuneration to be disclosed for 2019 under the German
Accounting Standard No. 17 is shown in the column "Actual grant" of
the 2019 individual remuneration tables. The "total" excluding pension
service cost, comprises the following relevant components: the base
salary, perquisites, the annual bonus, and the fair value of the RSU
grant.
GERMAN ACCOUNTING STANDARD NO. 17
DISCLOSURE
B_Corporate Governance
35
Annual Report 2019 - Allianz Group
6_Pension service cost in accordance with IAS 19: represents the company cost, not the actual entitlement or a payment. The German Corporate Governance Code requires that the pension service cost be included in all columns.
5_The MTB figure included in the column "Actual grant 2018" shows the annual accrual before any adjustments that may follow from the sustainability assessment. The payout 2018 figure includes the payout for the performance years 2016-2018,
as adjusted based on the sustainability assessment. The MTB 2016-2018 was paid out in spring 2019.
4_The share price related value increase is capped at 200% above grant price for the AEI/RSU and at 100% above grant price for the LTI/RSU. Furthermore, the value increase is limited by the overall payout cap. The relevant share price used to
determine the RSU value, and hence the final number of RSUs granted, and the caps are only available after sign-off by the external auditors.
3 In accordance with the German Corporate Governance Code, the annual bonus disclosed for performance year 2019 is paid in 2020 and for performance year 2018 in 2019. The payments for share-based deferred compensation (AEI and LTI),
however, are disclosed for the year in which the actual payment was made.
2_The column "Actual grant 2019" is in line with the disclosure requirements under the German Accounting Standard No. 17. To reconcile figures with said requirements for 2018, the total as shown in column "Actual grant 2018" has to be adjusted
to exclude the MTB accrual for 2018 and to include the payout from the MTB 2016 - 2018 as disclosed in column "Payout 2018".
Equity
compensation
expense 2019
Total
€ thou²
Number of
RSU held at
31/12/2019¹
Niran Peiris: € 3,529 thou,
2,153
25,127
9,209
Dr. Christof Mascher
Dr. Christof Mascher: € 5,140 thou,
2,092
24,865
9,209
Dr. Helga Jung
1,166
15,175
9,467
2,842
28,660
9,553
3,495
42,080
17,011
RSU
Number of
RSU granted
on 6/3/2020¹
2,552
Expected
annual
Board of Management
Dr. Helga Jung
821
317
820
317
2018
1,270
449
2019
1,270
2019
Jacqueline Hunt
1,386
360
7
1,877
435
9
449
62
61
1,814
441
221
9
1,301
345
1,841
26
1,498
60
62
2018
6,062
506
253
10
1,773
417
2,221
19
32
1,351
357
28
2,868
750
3,898
82
2019
Oliver Bäte
DBO'
SC5
DBO6
SC5
DBO
SC5
DBO'
SC5
DBO6
SC5
DBO
SC5
payment
6
pension
46
1,201
2018
1,836
429
4
2019
Sergio Balbinot
6,045
696
890
41
41
6
2,028
595
3,087
54
2018
8,013
891
53
975
Max
Base salary
40
74
40
74
74
74
40
Perquisites
74
975
975
750
975
975
975
750
Base salary
Max
750
Total fixed compensation
790
1,049
MTB (2016 - 2018)5
AEI 2019/RSU4
LTI 2019-2020/RSU4
Deferred compensation
981
932
981
932
1,220
813
750
Annual bonus
Annual variable compensation
1,049
790
1,049
790
1,049
1,049
Min
AEI 2015/RSU47
Target
2019
891
891
696
Pension service cost
5,058
9,634
6,616
6,172
891
7,506
5,785
5,267
Total
1,862
AEI 2014/RSU4
1,585
AEI 2015/RSU4
4,828
1,726
696
891
696
2018
2019
2018
2019
2018
Payout³
Actual grant¹,2
Grant¹
Sergio Balbinot (Appointed: 01/2015)
5,949
10,330
7,507
6,868
8,397
2,617
6,676
5,963
Total
891
Target
AEI 2014/RSU4
Total
Pension service cost
975
750
975
975
975
750
Base salary
Μαχ
750
Min
Target
2019
2018
2019
2018
2019
Payout³
Actual grant¹2
Target
975
Perquisites
11
750
Annual bonus
Annual variable compensation
995
761
995
761
995
995
995
761
Total fixed compensation
20
11
20
11
20
20
20
Grant¹
Jacqueline Hunt (Appointed: 07/2016)
€ thou (total might not sum up due to rounding)
Individual remuneration: 2019 and 2018
435
360
3,400
2,030
4,793
3,826
3,586
4,397
1,049
3,378
3,040
3,071
932
750
932
750
1,795
2,128
1,516
Total
435
1,614
435
435
B_Corporate Governance
31
Annual Report 2019 - Allianz Group
7_Sergio Balbinot received in 2015 a buyout award to compensate for forfeited grants from his previous employer. Half of this compensation was granted in the form of RSUs which vested in March 2019. A payment of € 4,807 thou was made.
6_Pension service cost in accordance with IAS 19: represents the company cost, not the actual entitlement or a payment. The German Corporate Governance Code requires that the pension service cost be included in all columns.
5_The MTB figure included in the column "Actual grant 2018" shows the annual accrual before any adjustments that may follow from the sustainability assessment. The payout 2018 figure includes the payout for the performance years 2016-2018,
as adjusted based on the sustainability assessment. The MTB 2016-2018 was paid out in spring 2019.
4_The share price related value increase is capped at 200% above grant price for the AEI/RSU and at 100% above grant price for the LTI/RSU. Furthermore, the value increase is limited by the overall payout cap. The relevant share price used to
determine the RSU value, and hence the final number of RSUs granted, and the caps are only available after sign-off by the external auditors.
3_In accordance with the German Corporate Governance Code, the annual bonus disclosed for performance year 2019 is paid in 2020 and for performance year 2018 in 2019. The payments for share-based deferred compensation (AEI and LTI),
however, are disclosed for the year in which the actual payment was made.
2_The column "Actual grant 2019" is in line with the disclosure requirements under the German Accounting Standard No. 17. To reconcile figures with said requirements for 2018, the total as shown in column "Actual grant 2018" has to be adjusted
to exclude the MTB accrual for 2018 and to include the payout from the MTB 2016 - 2018 as disclosed in column "Payout 2018".
1_The disclosed LTI target/min/max and LTI actual 2019 figures represent the LTI fair values, which differs from the LTI allocation value. The determination of the LTI fair values is based on an option pricing model taking into account additional
input parameters, including the term structure of interest rates and the expected relative performance of the Allianz share price compared to the peer index. For the latter, simulation techniques are applied at the valuation date to determine the
volatility of the Allianz stock, the volatility of the peer index and their correlation.
2,465
5,153
4,260
3,946
4,832
1,484
3,813
435
360
360
750
1,313
1,313
1,747
€ thou value in € thou
LTI allocation
payout in
122.85
Target Annual bonus
achievement
factor in %
0.8-1.2
ICF range:
3,144
108.72
%
Group
financial
performance
Annual Report 2019 - Allianz Group
1_Group target achievement is based on an operating profit of € 11,855,449.63 thou and net income attributable to share-
holders of € 7,914,009.88 thou.
Dr. Günther Thallinger
Dr. Axel Theis
Giulio Terzariol
Iván de la Sota
Niran Peiris
108.72
11111
108.72
108.72
0.80
1,702
946
116.33
1.07
1,702
946
116.33
1.07
108.72
1,750
972
119.59
1.10
108.72
1,766
981
120.68
1.11
Dr. Christof Mascher
86.98
Dr. Helga Jung
Sergio Balbinot
11.50
7.50
in € bn
in € bn
in € bn
in € bn
5.80
3.80
Actual
150%-max
100% - Target
14.35
0% Floor
B_Corporate Governance
Net income attributable to shareholders
Operating profit
Financial Group targets
Group financial target achievement level
The combined target achievement level of the Group's financial tar-
gets is calculated as the simple average of the achievement of the
targets for the Group operating profit and Group net income
attributable to shareholders. The solid achievement of the operating
profit and the significant over-achievement of the net income attribut-
able to shareholders led to an overall achievement of these Group
targets of 108.72%¹
GROUP FINANCIAL TARGETS
TARGET ACHIEVEMENT FOR 2019
Achievement
11.86
Achievement
level in %
106.24
level combined
Oliver Bäte
Target achievement 2019
Variable compensation 2019
A missed target in property and casualty business in Spain and
the technical difficulties in introducing the European direct insurer in
Germany were also considered in the assessment.
A negative factor was the poor result in the international industrial
insurance business AGCS, which was well below plan in a difficult market
with increasing claims frequency and severity. This development could
not be compensated by the division's otherwise very committed and
successful work.
Besides the high scores from employee and customer surveys, the
Supervisory Board paid special tribute to Allianz's leading position in
the Dow Jones Sustainability Index for the third consecutive year and
its first-time leading position as worldwide most valuable insurance
brand in the Interbrand Best Global Brands 2019 ranking.
The acquisitions in England and Brazil were also considered
positively.
The Supervisory Board values very positively the progress made
in the strategic positioning in China, the progressing diversification in
investments, and the systematic implementation of the Allianz Customer
Model.
The fulfilment of quantitative targets in the life sector and in
asset management and in many property-casualty companies had
a positive effect. Productivity targets were overachieved in all business
divisions.
To calculate the annual bonus, the combined target achievement level
of the financial Group targets is multiplied by the individual contribu-
tion factor (ICF) which is determined by the Supervisory Board for each
board member. In determining the ICF, which is provided as a multi-
plier of 0.8 to 1.2 in the remuneration system, the Supervisory Board,
following the proposal of the Personnel Committee, has used almost
the entire range from 0.8 to 1.13. In addition to business segment-
specific quantitative targets, qualitative targets such as customer
satisfaction, employee engagement, leadership quality, and the
achievement of strategic milestones were considered.
INDIVIDUAL CONTRIBUTION FACTOR
50
111.19
7.91
9.35
108.72
50
in %
Weight in %
Jacqueline Hunt
707
1,273
0.95
1,329
Total fixed compensation
20
17
20
17
20
20
1,726
20
Perquisites
1,706
1,313
1,706
1,313
1,706
1,706
1,706
17
1,726
1,726
1,329
3,143
3,647
2,637
MTB (2016 - 2018)5
AEI 2019/RSU4
LTI 2019-2020/RSU
Deferred compensation
1,747
1,614
1,747
1,614
2,133
1,422
1,313
Annual bonus
Annual variable compensation
1,726
1,329
1,726
1,313
Base salary
38
Min
29
108.72
108.72
108.72
108.72
1,766
981
120.68
1.11
1,702
946
116.33
1.07
1,702
946
116.33
1,511
840
103.28
30
1,614
30
REMUNERATION FOR 2019
Target
Target
2019
2018
2019
2018
2019
2018
Payout³
Actual grant¹2
Grant¹
Oliver Bäte (Appointed: 01/2008; CEO since 05/2015)
B_Corporate Governance
€ thou (total might not sum up due to rounding)
Individual remuneration: 2019 and 2018
Annual Report 2019 - Allianz Group
The 2018 payout is significantly higher than in 2019 because it
includes the MTB 2016 - 2018 and thus payments for three perfor-
mance years. The MTB is discontinued from 2019, therefore no MTB
disclosure for 2019 is made.
The Grant column specifies the target, minimum, and maximum
remuneration. The Payout column discloses the 2018 and 2019 pay-
ments. The base salary, annual bonus, and perquisites are linked to
the performance reporting years, 2018 and 2019, whereas the Allianz
Equity Incentive (AEI) payouts result from grants related to performance
years 2013 and 2014. To enhance remuneration transparency for
performance years 2018 and 2019, an additional column "Actual
grant" was inserted: It includes the fixed compensation components,
the annual bonuses paid for both performance years, the tranche
of the MTB 2016 - 2018 accrued for the 2018 performance year, and
the fair value of the RSU grant for 2018 and 2019 (granted under the
AEI for 2018 and under the LTI for 2019).
The following remuneration disclosure, which is compliant with the
disclosure requirements stipulated by the German Corporate Govern-
ance Code as well as the German Accounting Standard No. 17, shows
the individual board members' remuneration for 2018 and 2019,
including fixed and variable remuneration and pension service cost.
B_Corporate Governance
813
1,220
904
Grant¹
Niran Peiris (Appointed: 01/2018)
3,844
6,421
4,155
3,648
4,820
1,473
Actual grant¹,2
3,801
Total
489
432
489
432
489
489
489
3,440
Payout³
2018
2019
1057
Perquisites
975
750
975
750
975
975
975
750
Base salary
Max
Min
Target
Target
2019
2018
2019
2018
432
47
Pension service cost
5,989
946
819
946
946
819
1,220
813
750
Deferred compensation
150
Annual variable compensation
984
758
984
758
984
984
984
Annual bonus
LTI 2019-2020/RSU4
AEI 2019/RSU4
MTB (2016 - 2018)5
3,666
3,216
4,331
984
3,313
3,008
Total
1,669
AEI 2014/RSU4
1,426
AEI 2015/RSU4
2,743
819
750
819
750
1,737
2,128
1,516
3,356
47
47
1057
2_The column "Actual grant 2019" is in line with the disclosure requirements under the German Accounting Standard No. 17. To reconcile figures with said requirements for 2018, the total as shown in column "Actual grant 2018" has to be adjusted
to exclude the MTB accrual for 2018 and to include the payout from the MTB 2016 - 2018 as disclosed in column "Payout 2018".
1 The disclosed LTI target/min/max and LTI actual 2019 figures represent the LTI fair values, which differs from the LTI allocation value. The determination of the LTI fair values is based on an option pricing model taking into account additional
input parameters, including the term structure of interest rates and the expected relative performance of the Allianz share price compared to the peer index. For the latter, simulation techniques are applied at the valuation date to determine the
volatility of the Allianz stock, the volatility of the peer index and their correlation.
2,143
2,980
3,473
3,771
4,783
1,435
3 In accordance with the German Corporate Governance Code, the annual bonus disclosed for performance year 2019 is paid in 2020 and for performance year 2018 in 2019. The payments for share-based deferred compensation (AEI and LTI),
however, are disclosed for the year in which the actual payment was made.
3,764
413
317
413
317
413
413
413
317
3,422
4_The share price related value increase is capped at 200% above grant price for the AEI/RSU and at 100% above grant price for the LTI/RSU. Furthermore, the value increase is limited by the overall payout cap. The relevant share price used to
determine the RSU value, and hence the final number of RSUs granted, and the caps are only available after sign-off by the external auditors.
5_The MTB figure included in the column "Actual grant 2018" shows the annual accrual before any adjustments that may follow from the sustainability assessment. The payout 2018 figure includes the payout for the performance years 2016-2018,
as adjusted based on the sustainability assessment. The MTB 2016-2018 was paid out in spring 2019.
6_Pension service cost in accordance with IAS 19: represents the company cost, not the actual entitlement or a payment. The German Corporate Governance Code requires that the pension service cost be included in all columns.
7_Niran Peiris received a one-time payment of € 50 thou to reimburse him for relocation cost.
Max
Min
Target
Target
2019
2018
2019
2018
2019
2018
Payout³
Actual grant¹, 2
Grant¹
Iván de la Sota (Appointed: 04/2018)'
€ thou (total might not sum up due to rounding)
Individual remuneration: 2019 and 2018
B_Corporate Governance
33
Annual Report 2019 - Allianz Group
1,730
2,662
3,060
3,454
707
866
1,220
813
750
Annual bonus
Annual variable compensation
1,022
855
1,022
855
1,022
1,022
1,022
855
Total fixed compensation
47
1057
47
866
758
707
LTI 2019-2020/RSU4
4,370
1,022
3,351
3,105
941
866
750
866
750
1,331
2,128
1,516
Total
Pension service cost
Total
AEI 2014/RSU4
AEI 2015/RSU4
MTB (2016 - 2018)5
AEI 2019/RSU4
Deferred compensation
Total fixed compensation
9
8
975
750
975
975
975
750
Base salary
Max
750
Min
Target
2019
2018
2019
2018
2019
2018
Payout³
Target
975
Perquisites
1727
750
Annual bonus
Annual variable compensation
990
922
990
922
990
990
990
922
Total fixed compensation
15
1727
15
1727
15
15
15
Actual grant¹,2
Dr. Helga Jung (Appointed: 01/2012; End of service: 12/2019)8
Grant¹
2,416
4,452
3,011
Total
AEI 2014/RSU4
AEI 2015/RSU4
2,470
904
750
904
750
1,781
2,128
1,516
MTB (2016 - 2018)5
AEI 2019/RSU4
LTI 2019-2020/RSU4
Deferred compensation
972
904
972
3,324
813
995
3,472
4,197
3,789
4,792
1,444
3,773
3,328
Total
449
317
449
317
449
449
449
317
Pension service cost
1,967
4,135
3,748
4,343
563
1,220
946
2018
2019
2018
Payout³
Actual grant¹²
Grant¹
Dr. Christof Mascher (Appointed: 09/2009)
B_Corporate Governance
2019
€ thou (total might not sum up due to rounding)
Annual Report 2019 - Allianz Group
32
8_The appointment of Helga Jung as member of the Board of Management of Allianz SE ended as of 31 December 2019. Helga Jung is bound by a broad post-contractual one year non-competition obligation under her service agreement. As
compensation for this non-compete obligation she obtains a payment of 50% of her total target direct compensation (sum of base salary and target variable compensation), i.e. € 1,625.5 thou.
7_Helga Jung received a payment of € 156 thou in 2018 for 25 years of service to Allianz.
6_Pension service cost in accordance with IAS 19: represents the company cost, not the actual entitlement or a payment. The German Corporate Governance Code requires that the pension service cost be included in all columns.
5_The MTB figure included in the column "Actual grant 2018" shows the annual accrual before any adjustments that may follow from the sustainability assessment. The payout 2018 figure includes the payout for the performance years 2016-2018,
as adjusted based on the sustainability assessment. The MTB 2016-2018 was paid out in spring 2019.
4_The share price related value increase is capped at 200% above grant price for the AEI/RSU and at 100% above grant price for the LTI/RSU. Furthermore, the value increase is limited by the overall payout cap. The relevant share price used to
determine the RSU value, and hence the final number of RSUs granted, and the caps are only available after sign-off by the external auditors.
3_In accordance with the German Corporate Governance Code, the annual bonus disclosed for performance year 2019 is paid in 2020 and for performance year 2018 in 2019. The payments for share-based deferred compensation (AEI and LTI),
however, are disclosed for the year in which the actual payment was made.
Individual remuneration: 2019 and 2018
2018
2019
Target
9
8
9
9
9
8
975
750
975
750
975
975
975
750
Perquisites
Base salary
Max
Min
Target
2_The column "Actual grant 2019" is in line with the disclosure requirements under the German Accounting Standard No. 17. To reconcile figures with said requirements for 2018, the total as shown in column "Actual grant 2018" has to be adjusted
to exclude the MTB accrual for 2018 and to include the payout from the MTB 2016 - 2018 as disclosed in column "Payout 2018".
1 The disclosed LTI target/min/max and LTI actual 2019 figures represent the LTI fair values, which differs from the LTI allocation value. The determination of the LTI fair values is based on an option pricing model taking into account additional
input parameters, including the term structure of interest rates and the expected relative performance of the Allianz share price compared to the peer index. For the latter, simulation techniques are applied at the valuation date to determine the
volatility of the Allianz stock, the volatility of the peer index and their correlation.
3,641
6,753
1,199
2,846
866
866
750
750
1,736
2,128
1,516
Total
Pension service cost
Total
AEI 2014/RSU4
AEI 2015/RSU4
MTB (2016 - 2018)5
AEI 2019/RSU4
LTI 2019-2020/RSU4
Deferred compensation
946
866
1,679
866
3,172
990
4,178
3,961
4,844
1,496
3,825
3,612
506
441
506
441
506
506
506
441
3,135
6,313
3,672
3,520
4,338
3,319
Annual Report 2019 - Allianz Group
2018
187.5
Within our Corporate Responsibility Strategy, the pillar entitled "Low-
Carbon Economy" addresses climate change and environmental is-
sues, which were both identified among the three most material risks
and megatrends. As a company dealing with risk, managing the im-
pact on environmental matters is an important part of our approach.
Climate change is a major risk for the societies in which we operate. It
also directly affects our business, including everything from our in-
house operations to our investments and our insurance products. We
are committed to tackling the climate challenge by supporting the
transition to a low-carbon economy through our investments and in-
surance solutions. In addition, we manage the emissions from our op-
erations and strive to remain a carbon-neutral company.
CONCEPTS
This section describes the impact of environmental matters on our
business activities and relationships, as well as the impact of Allianz's
activities and relationships on the environment. Furthermore, we
describe our concepts for the management of these impacts and related
achievements.
Environmental matters
In the Asset Management business segment, AllianzGI and
PIMCO have developed and implemented their own processes to
manage risks and capture opportunities from ESG issues. For proprie-
tary assets that AllianzGI and PIMCO manage on behalf of other
Allianz Group entities, group-level requirements are complemented by
the asset management entities' own approaches.
Data related to our ESG integration approach will be included in our
Group Sustainability Report 2019, to be published in April 2020. An
in-depth overview of our approach and processes to integrating ESG
is published in the Allianz ESG Integration Framework at
> www.allianz.com/esg-framework.
For its Property-Casualty insurance business, Allianz has decided
to no longer cover single-site coal-fired power plants and coal
mines that are being operated or planned as of 2018. Existing con-
tracts with such facilities will not be renewed when they expire.
Further ESG-related measures include our systematic engage-
ment with investee companies, launched in 2017 and rolled out in
2018, as well as ESG considerations in our selection and manage-
ment of asset managers.
As far as investments are concerned, Allianz has excluded invest-
ments in companies involved in controversial weapons¹ since
2011, and in coal-based business models² since November 2015.
The criteria for the exclusion of coal-based business models were
expanded in 2018.
-
B_Corporate Governance
Annual Report 2019 - Allianz Group
CLIMATE CHANGE STRATEGY
42
ESG topics are integrated in our insurance, investment, and asset
management business through multiple instruments. They include inter-
nal standards, guidelines, and processes such as the Allianz Standard
for Reputational Risk and Issue Management (AS RRIM), the Allianz
Standards for Underwriting (ASU) and the Allianz ESG Functional
Rule for Investments (EFRI). An overview of the Group's key ESG inte-
gration processes is described below:
The types of ESG risks Allianz considers to be material in its insurance
and investment activities are summarized in the Allianz ESG Integra-
tion Framework. ESG risks can turn into legal risks, reputational risks,
supply chain and business disruption risks, quality risks, operational
risks, human rights risks, financial risks, and/or investment risks for
Allianz, its customers, and/or its invested companies.
ESG APPROACH
As a global insurer, investor and asset manager, understanding
ESG issues allows Allianz to reduce risks and capture opportunities in
underwriting, claims, investment management, and asset manage-
ment. We describe our ESG approach in the following section; our con-
cepts for all other matters for which reporting is required will be addressed
in subsequent chapters. The ESG approach provides part of the foun-
dation for these concepts.
As regards the requirements introduced through the CSR Directive
Implementation Act in 2017, we have not identified any remaining
principal risks resulting from our operations, business activities, and
business relations that could have severe adverse effects on material
non-financial matters. Any potential risks and impacts identified
throughout our risk assessment have been addressed by the respective
concepts we have in place, which we describe in this report.
RISK MANAGEMENT
Within the three main themes of our Corporate Responsibility Strategy
(Low-Carbon Economy, Social Inclusion, and Business Integration), we
address risks and trends that might affect Allianz. Through our ESG
Business Integration approach, we also look into social and environ-
mental effects arising from our business activities and business rela-
tions. Finally, we seize business opportunities associated with sustaina-
bility matters; for example, in the areas of sustainable solutions and
renewable energy investments.
CORPORATE RESPONSIBILITY STRATEGY
The material topics and KPIs addressing those risks and megatrends
are covered in this report. To understand the development, perfor-
mance, and position of Allianz, it is necessary to consider these topics
and the impact our business activities can have on them. All climate-
and environment-related topics are covered in the section "Environ-
mental matters"; product-related issues are covered in multiple sec-
tions such as "Social matters - emerging consumers concept and data
privacy concepts".
Providing environmental and social products,
Environmental issues.
Climate change,
In the field of underwriting and investments in non-listed asset
classes, ESG risks have been managed through the ESG-sensitive
business guidelines outlined in the AS RRIM since 2014. For invest-
ments in listed asset classes, the Allianz ESG Scoring Approach (defined
in EFRI) is applied to manage related risks. Since December 2016,
the ESG Scoring has provided Allianz investment and asset man-
agers with ESG performance information to be included in invest-
ment decisions.
At Allianz, we anticipate the risks of climate change. We care for our
customers through our insurance products, while using our leverage as
one of the world's largest institutional investors to enable the transition
to a low-carbon economy.
We are committed to making climate protection an integral part
of our core business, as well as to setting ourselves long-term climate
targets for our proprietary investments and business operations that
are in line with the goals of the Paris Climate Agreement. Specifically,
we are committed to the long-term target of reducing the carbon emis-
sions from our proprietary investments to net-zero by 2050. To achieve
this target and to support the real economy in their low-carbon transi-
tion, we participate in the UN-convened Net Zero Asset Owner Alli-
ance.
Our group-wide Environmental Management System (EMS) pro-
vides standards and controls, supports environmental data collection,
and promotes transparent reporting on environmental impacts across
our operations. It guides us in monitoring and managing our use of
resources. Operational implementation is monitored by the Group
Environmental Officer, and supported by the Board of Management
of Allianz SE.
Further, we include various environmental factors in our sourcing and
procurement processes. By doing that, we seek to raise suppliers' and
contractors' awareness of our environmental commitment and to en-
courage them to act accordingly.
reduce the amount and carbon intensity of the energy consumed
by our operations, for instance by ensuring an energy-efficient
planning, construction, and operation of buildings,
reduce the environmental impact of our business travel,
use resources efficiently, in particular paper and water, and
minimize the environmental impact of waste by avoiding, reducing,
re-using, and recycling it as appropriate.
At Allianz, we are committed to effectively managing our most signifi-
cant impact on the environment, which includes prevention of pollu-
tion. We work to continually improve the environmental performance
of our operations. Specifically, we seek to:
ENVIRONMENTAL CONCEPT
Reduce carbon emissions from proprietary investments to net-
zero by 2050.
Fully phase out coal-based business models across our propri-
etary investments and property-casualty portfolios by 2040 at
the latest.
Set long-term and intermediary climate targets for our propri-
etary investments and business operations in line with the
goals of the Paris Climate Agreement in 2020.
-
Targets:
We further worked on the implementation of our coal exclusion
approach in proprietary investments and property-casualty
underwriting.
We actively contributed to setting up the UN-convened Net-
Zero Asset Owner Alliance, a group of asset owners committed
to reduce the carbon emissions of their investment portfolios
to net-zero by 2050.
Status/progress:
Climate Change Strategy
Achievements and targets
B_Corporate Governance
43
Annual Report 2019 - Allianz Group
2_Utilities generating 30% or more of their electricity from thermal coal and/or planning more than 0.5 gigawatts of coal
capacity additions, and/or having to retire more than 50% of their generation capacities in the next ten years to be in line
with the 2°C ceiling, as well as mining companies generating 30% or more of their revenue from thermal coal.
1_Cluster munitions, anti-personnel landmines, chemical and biological weapons.
Furthermore, we actively support the expansion of companies'
climate-related disclosures. We report on climate-related opportuni-
ties and risks based on the framework developed by the G20's Task
Force on Climate related Financial Disclosures (TCFD). The disclosure
can be found in our Sustainability Report 2019, ①> section 05.1
> www.allianz.com/sustainability.
We enable positive change as an insurer, developing and offering
insurance solutions for renewables technologies and energy efficiency.
For instance, we contribute to financing a low-carbon economy by
making equity and debt investments in renewable energies. Allianz
also offers a variety of funds for institutional investors seeking to invest
in low-carbon assets such as renewable energy or green bonds. For
further information on renewable energy investments, please refer to
note 6 to our Consolidated Financial Statements.
We care for our customers and advise them on how to reduce risks
and minimize damage, while compensating those who have suffered
losses. We are also developing insurance solutions for climate-vulner-
able people in developing countries.
In addition, we have decided in 2015 to stop financing coal-based
business models. Also, we no longer insure single-site coal-fired power
plants and coal mines that are operated or planned as of 2018. We
are committed to fully phasing out coal-based business models across
our proprietary investments and property-casualty portfolios by 2040
at the latest, and are further developing our approach to reach this
target.
Our Climate Change Strategy anticipates the risks associated
with a changing climate across our lines of business. For the investment
business, we consider climate-related criteria such as carbon emissions,
energy efficiency, vulnerability to climate change, and opportunities in
clean tech as part of our ESG integration approach for listed and non-
listed assets. We systematically engage with investee companies exposed
to high ESG risks. Furthermore, we enter into active dialog with compa-
nies, encouraging them to define and implement their own climate
strategies in line with the latest scientific findings. For further insights
into Allianz's ESG engagement approach, please refer to our Sustaina-
bility Report 2019, > section 3: > www.allianz.com/sustainability.
Survey results showed that of the megatrends and risks Allianz should
be addressing through its Corporate Responsibility Strategy, these
three are perceived as being most important:
As we are a multinational business, the challenges we face are increas-
ingly diverse and interconnected. We therefore ensure that our Corpo-
rate Responsibility Strategy takes into account our stakeholders' feedback,
enabling us to respond to the most material issues we face. Related
activities focus on the four stakeholder groups most immediately af-
fected by our business activities: customers, employees, investors, and
society as a whole. For lasting and sustainable success, we need to
understand and respond to the changing world in which we operate.
Our most recent materiality assessment was performed in 2019 to
identify the issues our stakeholders believe to be most important to our
business (for more details, please see our Sustainability Report 2019,
> section 02.6 > www.allianz.com/sustainability).
STAKEHOLDER ENGAGEMENT & MATERIALITY
Most matters described in this document are managed by the
Group CR team. If a matter is managed by another function, it is high-
lighted in the relevant section.
OUTLOOK 2020
LOANS TO MEMBERS OF THE SUPERVISORY BOARD
As of 31 December 2019, there were no outstanding loans by
Allianz Group companies to members of the Supervisory Board.
As remuneration for his membership in the Supervisory Board of
Allianz Deutschland AG, Mr. Frank Kirsch received € 40 thou for the
2019 financial year. Mr. Jürgen Lawrenz did not receive any remunera-
tion for his service on the Supervisory Board of Allianz Technology SE.
All current employee representatives of the Supervisory Board, except
for Ms. Martina Grundler, are employed by Allianz Group companies
and receive a market-based remuneration for their services.
REMUNERATION FOR MANDATES IN OTHER ALLIANZ
COMPANIES AND FOR OTHER FUNCTIONS
10_The total reflects the remuneration of the full Supervisory Board in the respective year.
9_Since 1 September 2018.
8_Until 31 August 2018.
7_Since 1 September 2018.
6 Since 1 September 2018.
4_Since 1 September 2018.
5_Since 1 August 2018.
3_Until 31 August 2018.
Legend: C = Chairperson of the respective committee, M = Member of the respective committee
1_Abbreviations: A - Audit, N - Nomination, P - Personnel, R - Risk, S - Standing, T - Technology
2_Since 1 September 2018.
2,684.0
84.0
850.0
2,685.0
85.0
850.0
1,750.0
1,750.0
2019
2018
181.0
6.0
50.0
125.0
2018
The remuneration of the Supervisory Board of Allianz SE was last
amended by the Annual General Meeting on 9 May 2018. In light
of the development of the supervisory board remuneration at peer
companies, an amended remuneration of the Supervisory Board as
well as a remuneration for members of the Nomination Committee
will be proposed to the Annual General Meeting on 6 May 2020.
Achievements and targets
40
Annual Report 2019 - Allianz Group
The corporate responsibility function reports to the Head of Group
Communications and Corporate Responsibility at Allianz SE, who in
turn reports directly to the CEO of Allianz SE. This ensures close align-
ment with the CEO's agenda.
Our group-level Corporate Responsibility (CR) management team is
responsible for managing the strategic framework for all group-wide
sustainability activities, developing and introducing relevant policies,
reporting on non-financial matters, and supporting operating entities
in integrating the Group's strategic approach and policies.
B_Corporate Governance
41
Annual Report 2019 - Allianz Group
The Group Underwriting Committee monitors the underwriting
business and related risk management. It also develops new un-
derwriting policies and strategies.
The Group Finance and Risk Committee oversees risk manage-
ment and monitoring, including sustainability risk. The Committee
is the point of escalation for ESG-related risk management, based
on analysis and deliberations within the ESG Board.
In addition to the Group ESG Board, there are other committees under
board member leadership that play an important role in our decision-
making processes:
The highest governing body at Allianz when it comes to sustainability-
related issues is the Group ESG Board (ESG = Environment, Social, and
Governance). Established in 2012, it is composed of three Allianz SE
board members and meets quarterly. The Group ESG Board is respon-
sible for the whole Corporate Responsibility agenda, including climate-
related topics, the integration of ESG into our business lines and into the
core processes related to insurance and investment, and the
Allianz Group's corporate citizenship activities. The three board mem-
bers each assume responsibility for specific sustainability topics; func-
tional departments directly provide the Group ESG Board with regular
updates on sustainability issues.
CORPORATE RESPONSIBILITY GOVERNANCE
At Allianz, we aim to create sustainable economic value by pursuing a
long-term approach to corporate governance, social responsibility,
and environmental stewardship. This is critical to our business success,
as we are committed to delivering on our promises to our stakeholders,
in particular our customers, investors, and society as a whole. To deliver
on our purpose "We Secure Your Future" and the ambition to be a
global sustainability leader, we continually strive to adapt our business
strategy to any issues that arise.
Strategy
Any references to information published outside the Group Man-
agement Report and Allianz SE's Management Report are supple-
mentary, do not form an integral part of this non-financial information,
and are not subject to an assurance engagement (unless specified in
the respective document).
PricewaterhouseCoopers GmbH Wirtschaftsprüfungsgesellschaft
(PwC) has been engaged to perform a reasonable assurance engage-
ment on the 2019 non-financial information. All 2019 data included in
this report was assessed based on a reasonable-assurance engage-
ment, whereas 2018 and baseline data on GHG emissions and Green
electricity was assessed based on a limited-assurance engagement.
For the "Independent Practitioner's Report on a Reasonable Assurance
Engagement on Non-Financial Reporting" please refer to > page 175.
The 2019 non-financial reporting section covers the entire
Allianz Group and also includes the relevant non-financial information
for Allianz SE. Where Allianz SE's concepts and processes differ from
those applied by the Allianz Group, they are described separately. All
measures, activities, and key figures refer to the 2019 financial year
(1 January 2019 to 31 December 2019). Unless otherwise stated, we
use the control principle defined by the International Financial Report-
ing Standards when determining the scope of our reporting on behalf
of our consolidated entities.
The concepts contained in this report are in line with the content
of our 2019 Group Sustainability Report, which is compiled in accord-
ance with the standards set out by the Global Reporting Initiative (GRI)
and will be published in April 2020.
bonization.html.
Meritocracy Index (IMIX), and our environmental indicators (green-
house gas (GHG) emissions per employee and percentage of green
electricity). Based on our commitment to setting ourselves long-term
climate targets, we are currently developing indicators and intermedi-
ary targets for the carbon performance of our proprietary investment
portfolio for future reporting. For more information, please see
www.allianz.com/en/sustainability/low-carbon-economy/decar-
The KPIs included are the Net Promoter Score (NPS), the Inclusive Corporate Responsibility Governance and
For information on our business model, please refer to Business
Operations starting on > page 52.
Company description
This section has been compiled in accordance with the Corporate Social
Responsibility (CSR) Directive Implementation Act (EU Directive
2014/95/EU). It focuses on the concepts and key performance indica-
tors (KPIs) that reflect our current most material sustainability issues.
About the report
COMBINED SEPARATE NON-FINANCIAL REPORT
B_Corporate Governance
40
M⁹
To ensure effective and coherent actions, we have set the following
targets for the most material topics.
-
Targets:
Accordingly, the emphasis and, along with it, resources have
been shifted from the implementation of the privacy program
to monitoring activities, including onsite reviews. These efforts
focus on the maturation of our group-wide privacy activities.
During 2019, we continued the efforts begun in 2016, as we
worked with Allianz Group companies and other Group centers
on the group-wide implementation of the APRP. As we approached
full implementation of the APRP in the European Economic
Area, we began the transition to a business-as-usual environ-
ment.
Status/Progress:
Achievements and targets
Digital Privacy Guidelines provide guidance on privacy-related
topics impacting digital projects - both privacy by design (as part of
new product and service design processes) and privacy by default
(which means that wherever individuals are given choices on the use
and sharing of their personal data, default settings restrict disclosure).
In response to the unique ethical issues posed by Allianz's digital en-
deavors, in 2019, a data ethics working group was established to guide
the ethical implementation of digital solutions into our businesses.
We keep abreast of regulatory and industry developments and
aim to reflect these in our operational and governance processes
and procedures. For example, in response to the changes in the E.U.
General Data Protection Regulation (GDPR) that came into force in
May 2018, we initiated the Allianz Privacy Renewal Program (APRP)
- a major effort to align our privacy practices with the requirements of
the GDPR. More recently, we have addressed new data privacy
developments in Brazil, India, and the United States, among other
jurisdictions.
ment.
Equally important is the security of the personal data we handle.
As part of our robust Information Security Framework, we globally
apply strict security processes, standards, and tools. The framework
also defines minimum requirements that are based on the ISO 27001
Standard for information security management. This standard specifies
various requirements for three fields: vulnerability assessment along
the software development value chain (including penetration tests
and security audits), systems monitoring via multi-level security systems,
and effective IT security management and business continuity manage-
In 2016, we introduced an application across all Allianz Group
companies to facilitate the execution of PIAs. In conjunction with training
sessions, the PIA tool permits a more uniform approach to the assess-
ment and mitigation of privacy risks across the Allianz Group. Privacy
risks are also included in Allianz's Integrated Risk and Control System
(IRCS).
As part of our Privacy Risk Management, we consider the identifica-
tion and management of privacy risks an integral part of our opera-
tional processes. Therefore, we measure, monitor, and remediate risks
across Allianz's core businesses. For so-called high exposure processes
that use personal data, we carry out so-called Privacy Impact Assess-
ments (PIAs) to allow early identification of high-risk areas and ensure
they are appropriately managed over the project lifecycle, including
when changing an existing product or service.
Implement the APRP across all Allianz Group companies by
mid-2020.
The Allianz Privacy Standard defines rules and principles for
collecting and processing personal data. Established in 2018, it sets out
six privacy principles we expect all our employees to respect: due care,
purpose specification, reasonable limitation, transparency and openness,
choice and consent, and privacy by design. We also publish a Privacy
Notice, which clearly states what information we collect and why.
B_Corporate Governance
Annual Report 2019 - Allianz Group
46
46
Digitalization enables more people to access insurance products. We
embrace the resulting opportunities through our Digital by Default
strategy, which was implemented along with our Data Privacy Renewal
Agenda in 2015. Digitalization, however, also comes with data privacy
and protection risks. Data privacy matters are managed by the Data
Privacy function. We take these risks very seriously, and we are enforcing
robust security and privacy controls to give our customers comfort that
their personal data is safe and secure.
DATA PRIVACY CONCEPTS
In order to ensure we will meet our global ambitions for 2021, dedicated
"NPS activation workshops" will continue to be organized in 2020 with
all operating entities in scope to identify performance gaps and set up
concrete action plans.
Status/progress: In 2019, 70% of the business segments of
Allianz Group's entities scored above market or in a loyalty leader
position (2018: 74%). This drop in share of outperforming segments
is due to four segments having decreased to "at market," while two
improved from an "at market" to an "above market" position.
Ambition: 75% plus of Allianz Group business segments of our en-
tities score above market or in a loyalty leader position in 2021.
Global NPS performance, Allianz Group:
Target: Adjust the overall Sales Compliance Framework to simplify
and consolidate this framework.
Status/progress: The Allianz Standard for Retail Risk Management
outlines rules and principles to ensure that Allianz companies offer
fair and transparent products. We will continue the review of new
products so that these are in line with the parameters set out in the
Standard.
Our Allianz Privacy Framework includes a global standard for
data privacy, a privacy impact assessment and risk management process,
integration with information security core functions, and employee
training programs on the appropriate procedures to process our cus-
tomers', employees', and third-party partners' personal data. All
measures are subject to regular audit and assurance activities.
In 2020, we will target a sample of Allianz operating entities
for data privacy reviews.
Annual Report 2019 - Allianz Group
47
48
As a follow-up action to the AES and sponsored by the CEO, the
VOICE initiative brought together employees from different levels and
functions to work on key focus areas within the field of employee en-
gagement. In the course of the ongoing implementation of 2018 ideas,
three new ideas were developed and implemented in the VOICE 2019
initiative:
The results of the AES (and thus the IMIX) are directly linked to the
performance objectives of the Group's Board of Management. The
Group's Chief HR Officer is responsible for all people-related activities
and is a member of the Board of Management as of 1 January 2020.
As part of the AES, we use the Inclusive Meritocracy Index (IMIX)
to measure progress towards a culture where both people and perfor-
mance matter, in order to enable employees to reach their full potential.
As of 2015, the IMIX comprises 10 AES items covering the areas of
leadership, performance, and corporate culture.
We make employee engagement a high priority as we work to
build a committed workforce that excels by integrity and maintains a
strong customer focus. In all these aspects, the Allianz Engagement
Survey (AES), introduced in 2010, has been established as a valuable
employee feedback platform.
These aspirations are underpinned by our strategic HR frame-
works, principles, and tools, including our globally consistent 4x3 People
Attributes - Customer and Market Excellence, Collaborative Leader-
ship, Entrepreneurship and Trust - along the entire people value chain:
from recruiting and talent management to learning and performance
management.
Our employees are one of our most valuable assets and key to the success
of our company. Without them, it would be impossible to deliver on our
business strategy and achieve our goals. Therefore, the importance of
retaining our best people and keeping them motivated and committed
by managing and rewarding talent, promoting inclusivity and em-
ployee rights, and supporting employees' well-being and engagement
cannot be overstated.
CONCEPTS
This section describes the impact of employee matters on our business
activities and relationships as well as the impact of Allianz's business
activities and relationships on employees. Furthermore, we describe
the concepts and achievements related to the management of these
impacts. All employee matters are managed by the Group HR function.
Employee matters
Publish a full first version of the PSI-ESG in Underwriting Guid-
ance for property-casualty insurance by the second quarter of
2020.
Continue to apply ESG Sector Guidelines and Human Rights
Guidelines for sensitive countries into all business lines and
core processes dealing with insurance and investment decisions.
Conduct a review of U.K. and Group Modern Slavery State-
ment in 2020.
Targets:
No issues were raised in regard to human rights issues in
accordance with the Modern Slavery Act in 2019.
The consultation draft for the PSI-ESG in Underwriting project
that includes human rights-relevant criteria was published in
February 2019.
Human rights are integrated into our ESG risk framework and
are therefore part of our core due diligence processes on
sensitive business transactions. For further details, please refer
to our Sustainability Report 2019, section 02.4 or our
> ESG Integration Framework.
Status/progress:
Achievements and targets
For insurance transactions and direct investments such as real estate,
infrastructure, and private equity, we address ESG risks using our sensitive
business referral process. This mandatory process is triggered via specific
sectors of business transactions or through the country the transaction
is taking place in. Please refer to our ESG approach on > page 42 for
further details on the concepts.
As part of our support and engagement for these human rights
principles, we also take an active stance against modern slavery and
human trafficking through a risk-based approach across our business
and supply chain. In its 2018 Allianz Group - Modern Slavery Statement,
the Group confirms that over the five preceding years, no incident of
modern slavery, human trafficking, or child labor has been found involv-
ing any of the Allianz Group entities.
Since 2015, we require our vendors to sign a Vendor Code of Conduct,
which stipulates the fair labor requirements our vendors must meet,
the aim being to prevent modern slavery in the supply chain and to
ensure compliance with the Declaration of Human Rights. All vendors
with a spend volume greater than € 250,000 undergo a vendor integrity
screening based on the requirements of the Allianz Standard for Pro-
curement. As of 2017, the Vendor Code of Conduct as well as a series
of questions related to ESG risks have been established as prerequisites
for our sourcing activities and for contracting into the supplier on-
boarding process in our supply chain management system. Screening
data and information on compliance with the Code of Conduct forms
part of the Procurement KPI Reporting.
We are committed to applying key human rights principles such as the
United Nations Universal Declaration of Human Rights across our entire
organization. As a participant in the United Nations Global Compact
since 2002, we have integrated its ten principles into our globally binding
Code of Conduct. We annually communicate our progress, covering
both human rights and labor standards.
CONCEPTS
This section describes the impact of human rights issues on our business
activities and relationships, as well as the impact of Allianz's activities
and relationships on human rights issues. We describe the concepts
and achievements related to the management of those impacts. As a
financial services provider, these relate mainly to insurance transac-
tions, direct investments, and our supply chain.
Human rights matters
B_Corporate Governance
Responsible sales:
Achievements and targets
Complaints are another important source of customer feedback
and we analyze them closely to identify potential improvements. All
NPS and customer feedback-related matters are managed by the
Group Strategy, Marketing, Distribution team.
In 2018 and 2019, we have taken this structured collection of in-
sights to the next level: We established a more continuous approach
to monitoring and improving customer journeys by introducing the
five-star rating program – a standard rating method allowing customers
to state their satisfaction level on a five-point scale, and to do this on
various touchpoints along the claims journey. Whenever customers
make a claim against us, after its settlement we ask them to rate their
satisfaction on a five-star scale. When their rating is three stars or less,
we follow up to ensure we resolve whatever issue there may be, and to
prevent the same thing from happening with other customers. We aim
at publishing all customer feedback online for full transparency, visible
to our existing and prospective customers.
ENCOURAGING FUTURE GENERATIONS PROGRAM
(CONCEPT)
Social inclusion activities are reviewed at Group level by the Group
Corporate Responsibility Team. The Group ESG Board is informed regu-
larly on the progress made. As an Insurer, Employer, and Committed
Corporate Citizen, we annually report our progress in each role in the
Emerging Consumers Report, the People Fact Book, and the Sustain-
ability Report.
We believe that social inclusion is one of the most important chal-
lenges society faces today, which is why we have made it one of the
three top priorities for our Corporate Responsibility Strategy as of
2016. True to our role as an insurer, employer, and committed cor-
porate citizen, we want to contribute to creating more inclusive socie-
ties. We offer a range of solutions to emerging consumers, which are
designed to provide people access to financial services suited to their
needs. Inside the company, we support social inclusion through our
diversity and well-being programs, as well as by supporting specific
groups such as women in management and people with disabilities.
Our social contributions include time, skills, and money.
As a global insurer, we rely on the principle of solidarity. Pooling risks is
at the heart of our business model, and we have a keen interest in creat-
ing stable communities. Civil unrest, social tensions, and societal up-
heaval all represent major business risks for Allianz. Of course, we are
also interested in empowering people and improving their access to
employment, which, in turn, provides a basis for creating the talented
and diverse workforce we rely on.
SOCIAL INCLUSION CONCEPTS
This section describes the impact of social matters on our business
activities and relationships as well as the impact of Allianz's activities
and relationships on society as a whole. In addition, we describe the
concepts and achievements related to the management of these
impacts with a focus on social inclusion, emerging consumers, respon-
sible consumer/sales policies, and data privacy.
Social matters
B_Corporate Governance
Annual Report 2019 - Allianz Group
44
2-2016 baseline and 2018 Allianz SE data was adjusted to the physical scope of our Munich headquarter location. Allianz RE
and international hubs are included in our Group reporting. The majority of the environmental impacts reported are in
scope of an SE environmental management system certified to ISO14001.
1 Baseline data was assessed based on a limited-assurance engagement.
This enables performance monitoring as well as comparison and
benchmarking of entities using comparable system boundaries.
Please note that the reported CO2 values refer to the sum of Scope 1,
2, and 3 based on the Greenhouse Gas (GHG) Protocol. CO2 emissions
considered for Scope 3 are business travel, paper use, and energy-re-
lated emissions such as transmission and distribution losses. Scope 2
emissions are calculated based on market-based factors and Allianz
applies CO2 conversion factors mainly from IEA and DEFRA.
part of an entity, the entity's average values are used,
entire entities, the Group's average values are used.
Allianz undertakes reasonable efforts to collect relevant environmental
data from all its entities and their operations. Within the scope of our
environmental reporting are entities that have been part of Allianz for
a full reporting year at minimum. In 2019, Allianz collected environ-
mental data for 95.5% of the total employee base. Data is based on
source information including meter readings (where available), invoice
amounts (where available) and estimations from entities. Where data
could not be determined with reasonable effort through measuring,
calculating, or estimating, it is extrapolated based on employee head-
count. Data is extrapolated for either part of an entity or for entire
entities. The basis for these extrapolations is the total headcount of the
individual entity or of the Group and, for extrapolating:
Target: Achieve 100% green electricity for our operations by 2023.
Status/progress: In 2019, we achieved a share of 100% green elec-
tricity in the total electricity used (2018: 100 %) at our Munich head-
quarters, which are certified to ISO 14001.
Green electricity, Allianz SE²
Status/progress: In 2019, we achieved a share of 49% green elec-
tricity in the total electricity used (2018: 45%); this is due to the ex-
pansion of green electricity use in the U.S. and Europe.
Target: Achieve 100% green electricity for our operations by 2023.
Target: Reduce carbon emissions by 2% per employee by 2020,
against a 2016 baseline¹.
Status/progress: In 2019, our carbon footprint per employee was
2.7 tons (2018: 3.0). This represents a 4% reduction against the
2016 baseline¹, due to improvements in energy efficiency, internal
initiatives to manage business travel and an increase in head-
count.
-
GHG emissions per employee, Allianz SE²
Target: Reduce carbon emissions by 30% per employee by 2020,
against a 2010 baseline¹.
Status/progress: In 2019, our carbon footprint per employee was
2.4 tons (2018: 2.7). This represents a 35% reduction mainly as a
result of energy efficiency through data center consolidation,
against a 2010 baseline. We are well on track to achieve our 2020
targets.
We believe social inclusion - particularly among children and youth -
must be encouraged to tackle the complex challenge of social insta-
bility and increasing polarization of societies. Therefore, Allianz's En-
couraging Future Generations Program, which was launched in 2016,
aims to break down barriers facing children and young people and in-
vests in social ventures to increase their impact and create a multiplier
effect. Building on successful projects carried out by our operating
entities, the program provides the global framework and focus to scale
up Allianz's social contribution.
GHG emissions per employee, Allianz Group
Our group-wide initiatives are:
Achievements and targets
Since 2006, we have been measuring customer loyalty using the
Net Promoter Score (NPS). NPS measures our customers' willingness
to recommend Allianz, and the top-down NPS is applied regularly
according to global cross-industry standards, allowing benchmarking
against competitors in the respective markets. In 2016 we refined the
NPS methodology and established a group-wide standard for retail
end customer NPS, which helps to rate Allianz businesses along key
business drivers like brand, product, price and service. At the same
time, we introduced our Customer Excellence Program to systematically
measure customer experience, identify key areas for improvement,
and pursue an integrated approach to enhance the drivers of customer
satisfaction along the entire customer journey, as opposed to at individual
touch points.
Another key feature of our responsible sales concept are our
Allianz Broker Remuneration Principles, which state that "Allianz commits
itself not to devise or agree to remuneration schemes that are aimed
at inducing brokers to act to the detriment of our customers or to distort
fair competition." We have defined Minimum Standards for Asset Man-
agement Marketing Practices, which, among other things, include the
principles of truthful, clear, and accurate information on investment
styles and philosophies. These responsible sales controls are in line
with the Allianz Code of Conduct for Business Ethics and Compliance,
which is globally binding. The Code specifies that Allianz Group em-
ployees must not, either by their actions or statements, seek to mislead
the market or individual customers; also, when establishing a customer
relationship or providing financial services to a client, the customer
must be provided with the information needed to make a reasonable
decision. A responsible sales approach is more likely to create customer
satisfaction – and satisfied customers, in turn, are more likely to be
loyal and to recommend us. Our customers' interests take priority
whenever they seek advice from us and exemplary sales practices are
of particular importance.
Since 2011, we have had a global Sales Compliance Program in
place, which describes standardized processes and controls for com-
munication, monitoring, and review. The program is managed by the
Compliance team. Recent initiatives include an enhancement of prod-
uct governance principles and guidance to deal with the low-interest-
rate environment in life insurance; in this context, we have imple-
mented the Allianz Standard for Retail Risk Management in 2018.
Our strong reputation is built on customers', shareholders', employees'
and the general public's trust in our integrity. This trust depends on the
quality of our products, the way we inform and advise our customers,
and the personal conduct and capability of our sales employees and
representatives.
RESPONSIBLE CONSUMER / SALES CONCEPTS
B_Corporate Governance
45
Annual Report 2019 - Allianz Group
the Allianz Future Generations Award.
-
our Social Innovation Fund, and
-
Status/progress: Allianz continues to expand its access to emerging
consumers with new digital offerings by collaborating with insurtechs,
mobile network operators, mobility platforms, and other digitally
operating partners. Following the investment in 2017, the stra-
tegic partnership with BIMA was deepened further in 2019 when
Allianz started underwriting BIMA portfolios in several markets.
Target: We aim to continue our expansion in Africa, Asia, and Latin
America and to support a growing number of emerging consumers.
Achievements and targets
As many of those markets lack an established financial services
infrastructure, our emerging consumers approach places a key focus
on digitalization. To make the most of existing opportunities, we are
partnering with digital businesses to distribute and expand our reach
in these markets, for example through mobile-phone-based insurance
products. Further information on the Allianz Emerging Consumer con-
cept is disclosed in the > Emerging Consumers Report.
We continue to support low-income consumers in Asia, Africa, and
Latin America, where a majority of people are still severely underin-
sured. Responsibility for managing the emerging-consumers business
lies with the local Allianz operating entities. We are determined to ex-
pand our range of offerings to emerging consumers, in order to con-
tinue closing the protection gap for people who need access to low-
cost financial services tailored to their needs.
EMERGING CONSUMERS CONCEPT
Increase partnerships with SOS Children's Villages by 2021.
Increase our reach to children and youth by 2020 in line with
our Corporate Citizenship strategy.
Target:
In the past three years, we granted funds to 26 social projects
across the globe through our Social Innovation Fund, and col-
laborated with impact-oriented ventures through the Allianz
Future Generations Award. For further details on our Encour-
aging Future Generations Program, please refer to our Sus-
tainability Report 2019, > section 02.3 and > section 04.9.
After a successful pilot in 2018, the Online Mentoring Program
with SOS Children's Villages was expanded by another 100
mentors in 2019. The program aims to develop young people's em-
ployability and their transition into the job market by providing
them with relevant guidance and building their self-confi-
dence.
Status/Progress:
-
Social Inclusion
a partnership with SOS Children's Villages International,
48
M
181.0
C
C
C
с
M
484.0
9.0
225.0
250.0
2019
M
M
C
C
C
M
B_Corporate Governance
Remuneration of the Allianz SE Supervisory
Board
The remuneration of the Supervisory Board is governed by the Statutes
of Allianz SE and the German Stock Corporation Act. The structure
of the Supervisory Board's remuneration is regularly reviewed with
regard to its compliance with German, European, and international
corporate governance recommendations and regulations.
REMUNERATION PRINCIPLES
-
Set total remuneration at a level both aligned with the scale and
scope of the Supervisory Board's duties and appropriate in view of
the company's activities and its business and financial situation.
Establish a remuneration structure that takes into account the
individual functions and responsibilities of Supervisory Board
members, such as chair, vice chair, or committee mandates.
Establish a remuneration structure that allows proper oversight of
business as well as independent decisions on executive personnel
and remuneration.
REMUNERATION STRUCTURE AND COMPONENTS
The remuneration structure, which comprises fixed and committee-
related remuneration only, was approved by the Annual General
Meeting in 2018 and is laid down in the Statutes of Allianz SE.
FIXED ANNUAL REMUNERATION
C
2018
250.0
225.0
M²
243.5
6.0
50.0
2019
M
M
268.5
6.0
75.0
187.5
2018
с
M
M
268.5
6.0
75.0
187.5
2019
C
M
M
484.0
9.0
The remuneration of a Supervisory Board member consists of a fixed
cash amount paid pro rata temporis after the end of the respective
quarter of the business year for services rendered over that period. In
2019 each regular Supervisory Board member received a fixed com-
pensation amounting to € 125 thou per year. Each Vice Chairperson
received € 187.5 thou, the Chairperson received € 250 thou.
COMMITTEE-RELATED REMUNERATION
The Chairperson and members of the Supervisory Board committees
receive additional committee-related remuneration. The committee-
related remuneration is as follows:
Committee-related remuneration
Jean-Claude Le Goaër
Martina Grundler
Herbert Hainer
Godfrey Robert Hayward
Frank Kirsch
Jürgen Lawrenz
Total¹º
Committees¹
Fixed
Committee
Total
remunera-
remunera-
Attend-
remunera-
A
N
P
R
S
T
tion
tion
ance fees
tion
Dr. Friedrich Eichiner
M³
Christine Bosse
(Vice Chairwoman)4
€ thou
Committee¹
Personnel Committee, Standing Committee,
Risk Committee, Technology Committee
Audit Committee
1_Members of the Nomination Committee do not receive an additional remuneration.
ATTENDANCE FEES AND EXPENSES
Chair
Member
50
25
100
50
In addition to the fixed and committee-related remuneration, members
of the Supervisory Board receive an attendance fee of € 1,000 for
each Supervisory Board or committee meeting they attend. Should
several meetings be held on the same or consecutive days, the attend-
ance fee will only be paid once. In addition, Allianz SE reimburses the
Supervisory Board members for their out-of-pocket expenses and
the VAT payable on their Supervisory Board service. The company
provides insurance coverage and technical support to the Supervisory
Board members to an extent reasonable for carrying out their Super-
visory Board duties.
39
Annual Report 2019 - Allianz Group
B_Corporate Governance
REMUNERATION FOR 2019
The total remuneration for all Supervisory Board members, including
attendance fees, amounted to € 2,685 thou (2018: € 2,684 thou). The
following table shows the individual remuneration for 2019 and 2018:
Individual remuneration: 2019 and 2018
€ thou (total might not sum up due to rounding)
Members of the Supervisory Board
Michael Diekmann
(Chairman)
Jim Hagemann Snabe
(Vice Chairman)
Gabriele Burkhardt-Berg
Sophie Boissard
MB
M
145.8
M
182.0
7.0
50.0
125.0
2018
M
181.0
6.0
50.0
125.0
2019
2019
M
M
183.0
8.0
50.0
125.0
2018
182.0
7.0
50.0
125.0
Σ Σ
125.0
25.0
6.0
6.0
50.0
125.0
2019
M
M
52.0
2.0
8.3
41.7
2018
M7
156.0
6.0
25.0
125.0
2019
M
156.0
6.0
25.0
125.0
2018
M
156.0
2019
85.3
4.0
29.2
2019
183.0
8.0
50.0
125.0
2018
184.0
9.0
50.0
125.0
2019
M
M
C
M
M
M
M
M
M
C
| 4 Ο Σ Σ Σ Σ
202.8
7.0
50.0
125.0
2018
25.0
156.0
52.1
2018
209.0
9.0
75.0
125.0
2019
ΣΣ
283.0
8.0
150.0
125.0
2018
M
284.0
9.0
150.0
125.0
2019
M
156.0
6.0
25.0
125.0
2018
6.0
Annual Report 2019 - Allianz Group
Green electricity, Allianz Group
1_For further information on Allianz Group figures, please refer to note 4 to the Consolidated Financial Statements.
2_Total revenues comprise Property-Casualty total revenues (gross premiums written and fee and commission income),
Life/Health statutory gross premiums written, operating revenues in Asset Management, and total revenues in Corporate
and Other (Banking). Total revenues in Property-Casualty now include fee and commission income. Prior year figures were
adjusted accordingly.
208
Other result¹
(319)
4,302
3,983
€ mn
(178)
3,017
2,840
Operating investment income (net)
(680)
5,725
5,045
€ mn
(581)
2,578
1,997
Underwriting result
3,755
55,401
59,156
€ mn
Expense ratio
Loss ratio³
Net income
130
78
%
68.0
A decrease in our underwriting result was due to a lower level of
run-off, partially offset by a lower expense ratio which benefited from
premium growth and productivity initiatives, with our accident year loss
ratio remaining stable. Our combined ratio deteriorated by 1.5 per-
centage points to 95.5%.
We saw a strong decrease in operating profit, most of it driven by our
underwriting result, with some additional negative impact from our
operating investment income.
Spain: Total revenues fell to € 2,398 mn, a decrease of 1.6% on
an internal basis. It was largely due to negative volume effects in our
motor business.
One operation weighed on internal growth:
Germany: Total revenues amounted to € 10,736 mn, an internal
growth of 2.3%. It was mainly caused by positive volume and price
effects in our retail motor and property lines of business.
Allianz Partners: Total revenues went up 6.8% on an internal
basis, totaling € 6,650 mn. Much of this increase was owed to positive
volume effects in our U.S. travel business.
The following operations contributed positively to internal growth:
AGCS: Total revenues grew to € 9,117 mn - an increase of 9.5%
on an internal basis. Main drivers were price increases in our Property,
Financial Lines, MidCorp, and Aviation lines of business.
This includes favorable foreign currency translation effects of
€ 196 mn and positive (de)consolidation effects of € 969 mn. On an
internal basis, our revenues went up 4.7%, driven by a positive price
effect of 2.6% and a positive volume effect of 2.0%.
On a nominal basis, we recorded a significant increase in total reve-
nues compared to the previous year.
Total revenues
1.5%-p
94.0
Operating profit
95.5
Combined ratio
1_Consists of fee and commission income/expenses and other income/expenses.
(0.5)%-p
28.0
27.5
%
(680)
5,725
5,045
Operating profit
2.0%-p
66.0
%
Total revenues²
Delta
2018
-
Status/progress: 73% IMIX score in 2019(+4%-p).
Target: IMIX of 72% in 2021.
Although 2021 targets were already reached this year for Allianz SE,
the VOICE initiative will be continued to improve results further.
Compliance/anti-corruption and bribery matters
This section describes the impact of compliance matters on Allianz's
business activities and relationships as well as the impact of Allianz's
activities and relationships on compliance. Furthermore, the concepts
and achievements related to the management of these impacts are
described, with a focus on the compliance management system, anti-
corruption, and bribery matters. All compliance matters are overseen
by the Compliance team.
CONCEPTS AND PROGRAMS
One key element of our risk management framework is our Compliance
Management System (CMS), which helps to ensure compliance with
internationally recognized laws, rules and regulations, and to promote
a culture of integrity in order to safeguard the company's reputation.
We take a proactive stance, working with organizations such as the
German Institute for Compliance and the Global Insurance Chief Com-
pliance Officers Forum (CCO Forum) to enhance our understanding of
compliance issues and to share best practices.
Compliance risk is covered as part of the operational risk in
Allianz's Integrated Risk and Control System (IRCS). Since 2017, all
relevant entities conducted an annual compliance risk assessment
based on the compliance risk scenarios, which together with the
maturity assessments form the annual cycle of our integrated
compliance risk scoping and assessment activities. In 2019, for the third
cycle, the following top inherent compliance risks were identified:
Data privacy,
Customer protection,
Economic sanctions,
Money laundering,
Anti-trust, and
Regulatory compliance.
In view of new and upcoming regulatory requirements, and expecta-
tions, the compliance risks associated with IT regulations, increased
oversight requirements and conduct-related standards are growing in
significance.
-
To ensure continuous improvement in how we address compliance
risks, these risks are regularly assessed, monitored, and reported
throughout the Group. Our Compliance Quality Assurance Program,
rolled out in 2012, is comprised of self-assessments (risk and maturity
assessments), independent on-site reviews, local spot checks, and testing
of key controls. An online compliance issue management tool provides
an overview of mitigating activities and key risk indicator tracking. In
addition, our online compliance case management tool provides
consistent group-wide management of and oversight over all compli-
ance cases. It also facilitates reporting to the Audit Committee of the
Allianz SE Supervisory Board and to the Integrity Committee, which
coordinates the Allianz SE and Group activities concerning integrity-
related topics, such as the prevention and detection of corruption and
fraud or the handling of whistleblowing cases.
Annual Report 2019 - Allianz Group
49
B_Corporate Governance
As part of our global compliance program, we follow interna-
tional standards and applicable laws related to corruption and bribery,
money laundering and terrorism financing, trade and financial sanctions,
capital markets, data privacy, customer protection, antitrust, and other
relevant compliance risk areas. We investigate allegations of breaches
of laws as well as breaches of Allianz rules.
We take a zero-tolerance approach to fraud and corruption,
which includes adherence to local and international anti-corruption
and anti-bribery laws. Above and beyond mere compliance, the Allianz
Anti-Corruption Program, established in 2010, is a group-wide program
that defines the standards for a consistent and comprehensive approach
in every jurisdiction.
Directed at both our employees and third parties, the Anti-Corruption
policy and program prohibits the offer, acceptance, payment, or author-
ization of any bribe or other form of corruption in dealing with either the
private sector or government authorities. Anti-corruption training is
compulsory for all employees.
The obligations laid down in the various compliance programs
are derived from the Allianz Code of Conduct for Business Ethics and
Compliance and detailed in various Allianz Standards - specifically, the
Economics Sanctions, the Anti-Money Laundering, the Antitrust, the
Data Privacy, and the Anti-Corruption Standards.
Achievements and targets
Status/progress: Completed the third cycle of our integrated com-
pliance risk scoping and assessment activities as part of the com-
pany's IRCS.
Targets:
Complete the fourth cycle of the integrated compliance risk
scoping and assessment activities as part of the company's
IRCS process in 2020.
Continue to focus on assessing the effectiveness of the imple-
mented mitigating measures via the risk and maturity assess-
ment.
We continue to strengthen the risk-based focus of compliance
control reviews and testing. We also continue to improve the supporting
IT solutions in place to optimize and harmonize these activities, including
our reporting across the Group and the quality of the data collected.
Our compliance assurance approach includes baseline reviews to assess
the compliance of newly acquired entities, risk-based targeted and
baseline reviews of existing entities, and key control testing.
Underwriting result
IMIX for Allianz SE:
Status/progress: 73% IMIX score in 2019 (+2%-p).
Target: IMIX of 73% plus in 2021.
2019
Delta
2018
2019
€ mn
Operating profit
Operating profit
Key figures Property-Casualty¹
KEY FIGURES
PROPERTY-CASUALTY INSURANCE OPERATIONS
C_Group Management Report
Annual Report 2019 - Allianz Group
With this ambitious IMIX target, we intend to further drive the change
towards an inclusive meritocracy within Allianz. We are well on track to
achieve our 2021 targets for the Allianz Group and continue to roll out
global initiatives with the goal to maintain, if not further improve, the
results.
56
8_For further information on the share buy-back program, please refer to note 19 to the Consolidated Financial
Statements.
7_For further information on shareholders' equity, please refer to the Balance Sheet Review.
4_Figures as of 31 December.
B_Corporate Governance
Meet Me in the Middle - a strategic communication toolbox to
support managers and teams in discussing and engaging on the
Allianz purpose and strategy;
EmpowerAZ - an internal crowdsourcing platform to foster a more
innovative culture;
Help-to-Optimize (H2O) - a process optimization effort aiming to
enhance the onboarding and employee experience of incoming
colleagues.
Our Board of Management has continually shown strong commitment
to inclusion and diversity (I&D). The Allianz Global Inclusion Council
(composed of senior leaders such as board members, regional CEOs,
the Global Head of Communications, and Communities from different
entities) sets annual priorities, determines the global diversity strategy,
and accepts sponsorships for various diversity programs. In 2019, we
continued to focus on three priorities: gender equality, employee net-
works, and inclusion. Many supporting initiatives were directed at gener-
ating dialog around the topic of inclusion and inviting employees to
reflect on their motivation for inclusion.
Achievements and targets
IMIX for Allianz Group:
-
-
56
50
€ mn
2019
Operating income from financial assets and
Remuneration Report starting on ①>> page: 23.
(15)
3,329
3,314
(net of interest expenses)
Interest and similar income
Delta
2018
2019
€ mn
Our net income decreased by € 319 mn, mainly due to the decline in
operating profit. The effect was only partially offset by lower income
taxes and a higher non-operating result, with the latter benefiting from
an increase in our non-operating investment result.
Net income
Our other result benefited from a property sale in Germany.
78
130
4
(6)
(2)
208
(228)
(1,660)
(1,888)
Fee and commission expenses
Other expenses
Other result
122
30
liabilities carried at fair value through
income (net)
(57)
(49)
Annual Report 2019 - Allianz Group
Our operating investment income (net) decreased, mainly because in
Germany there had been a one-off change in policyholder participa-
tion in APR business in 2018, which had partly been offset in the under-
writing result.
2_The operating investment income (net) of our Property-Casualty business segment consists of the operating investment
result - as shown in note 4 to the Consolidated Financial Statements and expenses for premium refunds (net)
(policyholder participation).
1_Refers to policyholder participation, mainly from APR business (accident insurance with premium refunds), reported
within "change in reserves for insurance and investment contracts (net)". For further information, please refer to
note 26 to the Consolidated Financial Statements.
(178)
3,017
2,840
(net)²
Operating investments income
(239)
86
(153)
153
Expenses for premiums refunds (net)¹
(397)
(426)
Investment expenses
69
(112)
(42)
Operating impairments of investments (net)
44
160
204
Operating realized gains (net)
(8)
(29)
180
1,765
1,946
Underwriting result
(320)
(312)
investment contracts (net) (without expenses
for premium refunds)¹
Change in reserves for insurance and
(577)
(13,542)
(14,119)
(net)
(3,035)
(31,864)
(34,900)
1,997
Claims and insurance benefits incurred (net)
Acquisition and administrative expenses
1,981
1,059
Previous year claims (run-off)
(2,114)
(33,845)
(35,959)
Accident year claims
3,023
48,305
51,328
Delta
2018
(921)
Premiums earned (net)
2,578
(581)
Fee and commission income
Other income
Delta
2018
2019
€ mn
Other result
Operating investment income (net)
Total expenses amounted to € 14,119 mn in 2019, after € 13,542 mn in
the previous year. Our expense ratio improved significantly by 0.5 per-
centage points to 27.5%, benefiting from strong premium growth and
productivity initiatives. Both the acquisition as well as the administra-
tive expense ratio contributed positively.
Our run-off result was € 1,059 mn - after € 1,981 mn in 2018 -, trans-
lating into a run-off ratio of 2.1%. Reserve releases stemmed from our
operations in Italy, Reinsurance, and Australia, whereas a strengthen-
ing of reserves at AGCS in our Liability and Financial Lines lines of busi-
ness caused lower run-off compared to 2018. Excluding AGCS's run-
off, our run-off ratio would have been 3.2% in 2019.
AGCS: 0.4 percentage points. The accident year loss ratio bene-
fited from a very benign impact from natural catastrophes and
weather-related claims.
One operation contributed positively to the development of our acci-
dent year loss ratio:
Italy: 0.1 percentage points. This was due to a higher level of
large losses.
8
Reinsurance: 0.2 percentage points. The deterioration was
largely driven by a rise in internal exposure to large losses.
C_Group Management Report
58
58
57
Annual Report 2019 - Allianz Group
8_Represents claims and insurance benefits incurred (net) less previous year claims (run-off), divided by premiums earned
(net).
6_We comment on the development of our total revenues on an internal basis, which means figures have been adjusted for
foreign currency translation and (de-)consolidation effects to provide more comparable information.
7_Based on the average exchange rates in 2019 compared to 2018.
2_Total revenues in Property-Casualty include fee and commission income. Prior year figures were adjusted accordingly.
3_Represents claims and insurance benefits incurred (net) divided by premiums earned (net).
4_Represents acquisition and administrative expenses (net) divided by premiums earned (net).
5_Represents the total of acquisition and administrative expenses (net) plus claims and insurance benefits incurred (net),
divided by premiums earned (net).
1_For further information on Allianz Property-Casualty figures, please refer to note 4 to the Consolidated Financial State-
ments.
Leaving aside the losses from natural catastrophes, our accident
year loss ratio deteriorated by 0.4 percentage points to 68.6% due to
said rise in large losses.
Our accident year loss ratio was 70.1% as in the previous year. Losses
from natural catastrophes were € 771 mn, compared to € 934 mn in
2018. This translates into a positive effect on our combined ratio of
0.4 percentage points, as the impact from natural catastrophes
decreased from 1.9 percentage points in 2018 to 1.5 percentage
points in 2019; however, higher large losses offset this improvement.
1_Consists of the underwriting-related part (aggregate policy reserves and other insurance reserves) of "change in
reserves for insurance and investment contracts (net)". For further information, please refer to note 26 to the
Consolidated Financial Statements.
The following operations weighed on the development of our accident
year loss ratio:
50
5_Represents the ratio of net income attributable to shareholders to the average shareholders' equity excluding unrealized
gains/losses on bonds, net of shadow accounting, at the beginning of the year and at the end of the year.
6_Internal total revenue growth excludes the effects of foreign currency translation as well as acquisitions and disposals.
Please refer to page 74 for a reconciliation of nominal total revenue growth to internal total revenue growth for each of
our business segments and the Allianz Group as a whole.
GROUP MANAGEMENT REPORT
§§289b (3), 315b (3), sentence 1, sentence 2 in conjunction with
§298 (2) of the HGB) on > page 41.
BOARD OF MANAGEMENT
AND ORGANIZATIONAL STRUCTURE
Allianz SE has a divisional Board structure based on functional and
business responsibilities. Business-related divisions reflect our business
segments Property-Casualty, Life/Health, Asset Management, and
Corporate and Other. In 2019 they were overseen by five board mem-
bers. The following divisions focus on Group functions and come with
business-related responsibilities: Chairman of the Board of Manage-
ment; Finance, Controlling and Risk; Investment Management; Opera-
tions and Allianz Services; Human Resources, Legal, Compliance and
M&A; and Business Transformation¹.
For further information on Board of Management members and
their responsibilities, please refer to Mandates of the Members of the
Board of Management on > page 10.
TARGET SETTING AND MONITORING
The Allianz Group steers its operating entities and business segments
via an integrated management and control process. It begins with the
definition of a business-specific strategy and goals, which are dis-
cussed and agreed upon between the Holding and operating entities.
Based on this strategy, our operating entities prepare three-year plans
which are then aggregated to form the financial plans for the business
divisions and for the Allianz Group as a whole. This plan also forms the
basis for our capital management. The Supervisory Board approves
the plan and sets corresponding targets for the Board of Manage-
ment. The performance-based remuneration of the Board of Manage-
ment is linked to short-term and long-term targets to ensure effective-
ness and emphasize sustainability. For further details about our remu-
neration structure, including target setting and performance assess-
ment, please refer to the Remuneration Report starting on >> page 23.
We continuously monitor our business performance against these
targets through monthly reviews - which cover key operational and fi-
nancial metrics – to ensure we can move quickly and take appropriate
measures in the event of negative developments. The Allianz Group
uses operating profit and net income as key financial performance in-
dicators across all its business segments. Other indicators include seg-
ment-specific figures, such as the combined ratio for Property-Casu-
alty, return on equity² for Life/Health, and the cost-income ratio for As-
set Management. We also use new business margins for Life/Health.
For a comprehensive view of our business segment performance,
please refer to the chapters from > page 52 onwards.
Besides performance steering, we also have a risk steering pro-
cess in place, which is described in the Risk and Opportunity Report
starting on page 76.
Annual Report 2019 - Allianz Group
1_This member of the Board of Management also oversees Insurance Iberia & Latin America, Allianz Partners, and Allianz
Direct.
2_Excluding unrealized gains/losses on bonds net of shadow accounting.
3_NPS is a measurement of customers' willingness to recommend Allianz. Top-down NPS is measured regularly according
to global cross-industry standards and allows benchmarking against competitors in the respective markets.
54
54
Annual Report 2019 - Allianz Group
C_Group Management Report
BUSINESS ENVIRONMENT
Economic environment 20191
A record high level of uncertainty was the main feature of the year
2019. The trade conflict between the US and China rapidly escalated.
Uncertainty cost more in terms of GDP growth than the tariffs (world
GDP grew by 2.5% in 2019 compared with 3.1% in 2018). Companies
faced a very rapid increase of their inventories because of a mismatch
between global supply and demand. The trade conflict coupled with
the difficulties of the automotive sector pushed global trade in goods
into recession. Hence, global manufacturing production fell into recession
as well in the third quarter of 2019. In this context, both the US and the
Eurozone economies significantly decelerated as they grew by 2.3%
and 1.2% respectively, in 2019, compared to 2.9% and 1.9% in 2018.
A more broad-based recession did not occur, thanks to swift and
sizeable monetary policy reactions. The number of central banks initi-
ating a monetary policy easing in 2019 reached a record high since
2009. There was no hesitation to use unconventional tools to inject
liquidity both at the Fed and the ECB levels as they decided to restart
purchase of securities in 3Q2019 at a pace of USD 60 bn per month
and € 20 bn per month respectively. Alongside more fiscal support, this
accommodative stance of economic policies has supported domestic-
oriented sectors, notably construction activities and services. The eas-
ing of monetary policies triggered a downward movement in govern-
ment bond yields. Between December 2018 and December 2019, the
10-year US Treasury yield declined from 2.7% to 1.9%, while the 10-
year Bund yield declined from +0.2% to -0.3%.
Protests escalated across regions, such as in Hong Kong and sev-
eral countries in Latin America (Chile, Colombia), while the Yellow
Vests' protests continued in France in the first half year 2019. Geopolit-
ical tensions also prevailed in the Middle East, particularly between
Saudi Arabia and Iran and between the US and Iran. In this environ-
ment of high uncertainty, political risk is expected to remain high over
the medium-term.
Business environment 2019 for the insurance
industry
Trade war, Brexit, street protests, geopolitical tensions, negative inter-
est rates: Headwinds blew fiercely in 2019 for the insurance industry.
The industry, however, proved to be remarkably resilient: In 2019, too,
it kept on growing and remained profitable.
In the property-casualty sector, underwriting discipline and mar-
ket hardening helped to restore underwriting profitability across the
board. The biggest market, however - the US property-casualty mar-
ket - was still challenged by the phenomenon called "social inflation"
where significant increases in jury awards led to spiraling claims costs
in some business lines. On the other hand, overall and insured losses
caused by natural catastrophes were in line with the long-term aver-
age - despite an elevated number of events. As a result, industry prof-
itability remained at least stable - despite the drag of low investment
Our steering
C_Group Management Report
53
C_Group Management Report
Belgium
Insurance Iberia & Latin America,
The Netherlands
Allianz Partners and Allianz Direct
Iberia
Spain
Portugal
United Kingdom
Sweden
Asia Pacific
Latin America
Argentina
Japan
Hong Kong
Brazil
Colombia
Mexico
-
--
Allianz Partners
Singapore
China
Australia
Allianz Partners
Allianz Direct
Allianz Direct
US life insurance
United States
■Property-Casualty Life/Health Banking Retail Asset Management Institutional Asset Management
1_This overview is based on our organizational structure as of 31 December 2019.
2_Property-Casualty business belongs to Allianz Global Corporate & Specialty.
Annual Report 2019 - Allianz Group
Taiwan
yields and premium growth was relatively robust, although weaken-
ing trade and industrial dynamics had a negative impact on certain
business lines. As usual, emerging markets powered ahead, driven in
part by double-digit growth in the heavyweights China and India and
the recovery in Latin America. Overall and at a global scale, premiums
rose by an estimated 4% to 5% in 2019 (in nominal terms and adjusted
for foreign currency translation effects).
In the life sector, the industry has finally come to grips with the
low-yield environment, revamping their business model and product
suite accordingly. Thus and against the backdrop of booming stock
markets, demand for savings products in advanced markets at last sta-
bilized. Emerging markets, on the other hand, showed significantly
higher growth, as China rebounded after the regulatory-induced
slump in the previous year. Overall and at a global scale, premiums
rose by an estimated 4.5% to 5.5% in 2019 (in nominal terms and ad-
justed for foreign currency translation effects). Global industry profita-
bility, however, remained challenging as yields sank ever deeper in
negative territory.
Business environment 2019 for the asset
management industry
7,914
7,462
452
212
229
13.6
13.2
€
18.90
17.43
€
18.83
Delta
10,086
344
598
17.30
|| I | J | | | | |*|* | ~|~|
Earnings summary
MANAGEMENT'S ASSESSMENT OF 2019 RESULTS
Our total revenues grew 5.9% on an internal basis, compared to 2018.
Our Life/Health business segment recorded a strong sales increase for
single premium capital-efficient products in Germany, as well as higher
sales of non-traditional variable annuity products in the United States.
Our Property-Casualty business segment also registered strong premium
growth, mainly at AGCS, Allianz Partners, and in Germany. In our Asset
Management business segment, higher assets under management
(AUM) driven revenues and performance fees led to revenue growth.
Our operating profit increased by 3.0% and was in the upper half
of the target range for 2019. Much of this improvement was owed to
the Life/Health business segment, which recorded a higher investment
margin, an extension of the DAC amortization period in the fixed index
annuity business, and volume growth. Our Asset Management business
segment also increased its operating profit, mainly due to higher average
third-party AuM and positive foreign currency translation effects. By
contrast, our Property-Casualty business segment was affected by
lower run-off (due to a strengthening of reserves at AGCS) as well as a
lower operating investment income, slightly offset by a lower expense
ratio. The Corporate and Other business segment recorded an im-
proved operating result, much of which was owed to profitability im-
provements at our internal IT service provider.
Our operating investment result increased by € 4,565 mn to
€ 23,854 mn, due to a higher trading result, lower equity impairments,
and higher realizations on debt securities.
Our non-operating result improved by € 335 mn to a loss of
€ 778 mn, due to higher non-operating realized gains/losses (net)
and a lower amortization of intangible assets (after 2018 had been
burdened by a negative impact from the sale of our traditional life
insurance portfolio in Taiwan).
Other information
RECENT ORGANIZATIONAL CHANGES
Due to the immateriality of the former reportable segments Banking
and Alternative Investments, in 2019 they were combined with the former
reportable segment Holding & Treasury to form the new reportable seg-
ment Corporate and Other. Previously reported information has been
adjusted to reflect this change.
In the course of 2019, there were some more, albeit minor realloca-
tions between the reportable segments.
Other parts of the Group Management Report
The Group Management Report also entails the following sections:
Statement on Corporate Management pursuant to § 315d and
§ 289f of the HGB starting on > page 18,
Takeover-Related Statements and Explanations starting on
> page 21, and the
(17) %-p
0.4%-p
1.47
1.54
--
7,703
11,512
Beginning 2019, the asset management industry was severely af-
fected by the market downturn in the fourth quarter of 2018. Despite
ongoing political and economic uncertainties, we saw a strong re-
bound of capital markets - already at the beginning of 2019 - spurred
by an accommodative monetary policy throughout the year. Both
bonds and especially global equities saw a year of stellar returns with
the MSCI World Index increasing by 28% in 2019, more than wiping
out the capital market dip in the fourth quarter of 2018.
3_The Allianz Group uses operating profit and net income as key financial indicators to assess the performance of its business
segments and of the Group as a whole.
In view of the volatile, overall positive capital market development,
long-term net inflows were recorded throughout the year in almost all
asset classes: Long-term net inflows in Europe were driven by bonds and
multi-assets funds, while the U.S. profited from strong net inflows in
bonds in active and in passive products; overall, actively managed
equities recorded net outflows. Passive products recorded strong net
inflows in the U.S. in almost all asset classes.
1_At the date of the publication of this report, not all general market data for the year 2019 used in the chapter Business
Environment was final. Also, please note that the information provided in this chapter is based on our estimates.
Annual Report 2019 - Allianz Group
55
C_Group Management Report
EXECUTIVE SUMMARY OF 2019 RESULTS
KEY FIGURES
Key figures Allianz Group¹
Total revenues²
Operating profit³
8,302
Net income³
Solvency II capitalization ratio
Return on equity
Earnings per share
Diluted earnings per share
Income taxes increased by € 80 mn to € 2,776 mn, due to higher
income before taxes. The effective tax rate decreased to 25.1% (2018:
25.9%), mostly due to higher tax-free income.
Net income increased as a result of the growth in our operating
profit and non-operating result, as well as a slightly lower tax rate.
Our shareholders' equity grew € 12.8 bn to € 74.0 bn, largely due
to a € 10.7 bn increase in unrealized gains and losses (net) and a net
income attributable to shareholders of € 7.9 bn. A dividend payout of
€ 3.8 bn and completion of our fourth share-buy-back program (with a
total volume of € 1.5 bn8 and 7.3 million shares) partly offset this in-
crease. Our Solvency II capitalization ratio was strong at 212%.
For a more detailed description of the results generated by our busi-
ness segments - specifically, Property-Casualty insurance operations,
Life/Health insurance operations, Asset Management, and Corporate
and Other please consult the respective chapters on the following
pages.
2019
2018
142,369
132,283
11,855
thereof: attributable to shareholders
India
Non-financial key performance indicators (KPIs) are used to as-
sess the organizational health of Allianz and are reflected in the an-
nual bonus. In line with our Renewal Agenda 2.0 motto "Simplicity
Wins", Customer Centricity and employee commitment – the two key
levers identified - are reflected in two KPIs: the Net Promoter Score
(NPS) and the Inclusive Meritocracy Index. For further information
on non-financial KPIs, please refer to the Combined Separate Non-
Financial Report for the Allianz Group and Allianz SE (according to
Thailand
The Corporate and Other business segment's activities include the
management and support of the Allianz Group's businesses through
its central Holding functions, Banking and Alternative as well as Digital
Investments. The Holding functions manage and support the Group's
businesses through its strategy, risk, corporate finance, treasury,
financial reporting, controlling, communication, legal, human re-
sources, technology, and other functions. Our Banking operations,
which place a primary focus on retail clients, support our insurance
business and complement the products we offer in Italy, France, and
Bulgaria. Digital Investments identifies and invests in digital growth
companies and provides digital investment management services and
an interface between portfolio companies and the Allianz Group.
Alternative Investments provides global alternative investment man-
agement services in the real estate sector, mostly on behalf of our in-
surance operations.
Insurance operations
We offer a wide range of property-casualty and life/health insurance
products to both retail and corporate customers. For the Property-Cas-
ualty business segment, these include motor, accident, property, gen-
eral liability, travel insurances, and assistance services; the Life/Health
business segment offers savings and investment-oriented products in
addition to life and health insurance. We are the leading property-cas-
ualty insurer worldwide and rank among the top five in the life/health
insurance business². Our key markets (in terms of premiums) are
Germany, France, Italy, and the United States.
1_For further information on organizational changes, please refer to the Executive Summary of 2019 Results.
52
62
2_Based on currently available peer data. Final peer analysis not available until after publication of this Annual Report.
Annual Report 2019 - Allianz Group
Worldwide presence and business segments
Market presence of our business operations¹
Insurance German Speaking Countries,
Insurance Central & Eastern Europe
Germany
Switzerland
Central & Eastern Europe
Austria
Global insurance lines & Anglo markets,
Insurance Middle East and Africa
Global insurance lines & Anglo markets
United Kingdom
Australia
Ireland
Allianz Global Corporate &
Specialty
Euler Hermes
Bulgaria
Croatia
Czech Republic
Corporate and Other
Our two major investment management entities, PIMCO and
Allianz Gl, operate under the governance of Allianz Asset Manage-
ment (AAM). We are one of the largest asset managers in the world
that actively manage assets. Our offerings cover a wide range of
equity, fixed income, cash, and multi-assets products as well as a
strongly growing number of alternative investment products, such as
infrastructure debt/equity, real assets, liquid alternatives, and solution
business. Our core markets are the United States, Canada, Germany,
France, Italy, the United Kingdom, and the Asia-Pacific region.
Asset Management
Most of our insurance markets are served by local Allianz compa-
nies. However, some business lines - such as Allianz Global Corporate
& Specialty (AGCS), Allianz Partners (AP), and Euler Hermes – are run
globally.
C
Annual Report 2019 - Allianz Group
51
C_Group Management Report
BUSINESS OPERATIONS
Allianz Group structure
Allianz SE and its subsidiaries (the Allianz Group) offer property-casu-
alty insurance, life/health insurance, and asset management products
and services in over 70 countries, with the largest of our operations
located in Europe. The Allianz Group serves more than 100 million pri-
vate and corporate customers. Allianz SE, the parent company of the
Allianz Group, has its headquarters in Munich, Germany.
The Allianz Group's structure reflects both our business segments
and geographical regions. Business activities are organized by product
and type of service, based on how these are strategically managed:
insurance activities, asset management activities, and corporate and
other activities. Due to differences in the nature of products, risks, and
capital allocation, insurance activities are further divided into prop-
erty-casualty and life/health categories. In accordance with the re-
sponsibilities of the Board of Management, each of the insurance cat-
egories is grouped into regional reportable segments. In 2019, the
Allianz Group had 11 reportable segments.
Allianz Group structure -
business segments and reportable segments¹
PROPERTY-CASUALTY
- German Speaking Countries and
Central & Eastern Europe
Reinsurance
- Western & Southern Europe and
Asia Pacific
Allianz Partners and Allianz Direct
Switzerland
ASSET MANAGEMENT
-Asset Management
LIFE/HEALTH
- German Speaking Countries and
Central & Eastern Europe
Western & Southern Europe and
Asia Pacific
- Iberia & Latin America
- USA
- Global Insurance Lines & Anglo Markets,
Middle East and Africa
CORPORATE AND OTHER
- Corporate and Other
- Iberia & Latin America,
Hungary
- Global Insurance Lines & Anglo Markets,
Middle East and Africa
Poland
United States
Hong Kong
--
Canada
Indonesia
Brazil
Japan²
Laos
Malaysia
Europe
Germany
Austria
North and Latin America
■
France
■
Philippines
Italy
Singapore²
Ireland
Sri Lanka
Luxembourg
Taiwan
--
Spain
Middle East
Pakistan
Asset Management
--
China
Romania
The Netherlands
Slovakia
Egypt
Lebanon
Saudi Arabia
Russia
Ukraine
Insurance Western & Southern
Europe and Asia Pacific
Europe
Cameroon
Congo Brazzaville
Ghana
Ivory Coast
Africa
Greece
Italy
Asia Pacific
Senegal
Nigeria
Luxembourg
Morocco
Belgium
France
Turkey
Kenya
--
Madagascar
%
Cost-income ratio²
62.3
2,530
62.4
Net income
€ mn
1,992
Favorable foreign currency translation effects amounted to
€ 26.9 bn and, for the most part, supported PIMCO's AuM.
ཟླ།༅།ཋg།།
(0.2)%-p
Positive effects from consolidation, deconsolidation, and other
adjustments added € 12.1 bn to total AuM. This was mostly attributable
to PIMCO's first consolidation of Gurtin Municipal Bond Management
(Gurtin) in January 2019.
Third-party assets under management
Total assets under management
as of 31 December
2,704
€ bn
2,268
1,922
€ mn
Annual Report 2019 - Allianz Group
6,732
243
1,961
34
209
An improvement in the impact of change in DAC was attributable to
the extension of the DAC amortization period in our U.S. business.
1 Expenses include acquisition expenses and commissions (excluding commission clawbacks, which are allocated to the
technical margin) as well as administrative and other expenses.
2 The technical margin comprises the risk result (risk premiums less benefits in excess of reserves less policyholder partici-
pation), the lapse result (surrender charges and commission clawbacks) and the reinsurance result.
3_The impact of change in DAC includes effects of the change in DAC, unearned revenue reserves (URR), and the value of
business acquired (VOBA). It represents the net impact of deferral and amortization of acquisition costs and front-end
loadings on operating profit and therefore deviates from the IFRS financial statements.
Operating profit
61
ASSET MANAGEMENT
KEY FIGURES
Key figures Asset Management¹
2019
2018
Operating revenues
€ mn
7,164
C_Group Management Report
thereof: Third-party assets under management
%
As of 31
December
2018
22.2
(1.0) %-p
Asset classes split
Fixed income
78.6
77.9
0.6%-p
€bn
21.2
Equities
8.6
8.3
0.3 %-p
As of
As of
Multi-assets
45.5
Impact of change in DAC
%
As of 31
December
2019
%
Composition of total assets under management
Delta
as of 31 December
€ bn
1,686
1,436
250
Third-party assets under
management
€bn
Allianz Gl
1,686
17.4%
Business units' share
PIMCO
%
78.8
77.8
1.0 %-p
Assets under management
1,436
Our return on equity went up by 1.3 percentage points to reach 12.7%.
(5.6)
(1,795)
Selective profitable growth.
Protect shareholder value while continuing to provide attractive returns
and dividends.
Operating profit of € 12.0 bn, plus or minus € 0.5 bn.
ASSUMPTIONS
ASSET MANAGEMENT
LIFE/HEALTH
PROPERTY-CASUALTY
Outlook 2020
ALLIANZ GROUP
Overview: outlook and assumptions 2020 for the
Allianz Group
Revenue growth of approximately 6% of which 4% come from our
acquisitions in the United Kingdom.
volumes, ensure efficient operations, and maintain a strong investment
performance.
Monetary easing policy especially in the U.S. and Europe provide some
stimulus for capital market development, driving equity and fixed-in-
come markets. Market volatility is likely to persist and many investors
are expected to stay alert, potentially nervous, and very
cautious. We therefore expect a volatile and therefore overall
moderate capital market contribution to AuM growth.
Asset management industry outlook
In the life sector, premium growth is expected to slightly accelerate
as demand in emerging markets continues to grow and demand in ad-
vanced economies should at least stabilize, reflecting the increasing
supply of new savings products. Overall, we expect global premium
growth to increase by about 6% in 2020 (in nominal terms and adjusted
for foreign currency translation effects). Given the challenging invest-
ment environment, however, industry profitability is likely to remain
under pressure.
In the non-life sector, premium growth is expected to remain more
or less stable. As in previous years, emerging markets are the main
driver of growth. Overall, we expect global premium growth of around
4% in 2020 (in nominal terms and adjusted for foreign currency trans-
lation effects). The two opposing effects of higher rates on the one, but
low investment income on the other hand point toward unchanged in-
dustry profitability.
On the surface, 2020 promises to be very similar to 2019, with moderate
premium growth despite continuing headwinds such as low yields, high
political uncertainty, and weak global growth and trade. Under the sur-
face, however, three fundamental changes are about to gather speed.
First, the pivot to Asia: Asia's rising middle class emerges as the con-
sumer of last resort with huge pent-up demand, reflecting weak social
security systems and protection gaps in natural catastrophes, health, re-
tirement, and mortality. Second, the pivot to digital ecosystems for bet-
ter customer interaction, accelerating the shift from pure risk manage-
ment to risk prevention and from single products to comprehensive so-
lutions. Key for success, in particular in Europe, will be that regulation
and supervision keep pace with the business transformation. Third, the
pivot to higher claim costs, reflecting climate change (natural catastro-
phes), social change (litigation and class action) and technology
change (connectivity), ushering in a new era of cost cutting (automati-
zation) and consolidation. The flip side of these changes, however, is
that the topic of sustainability moves mainstream in public debates, cre-
ating new opportunities for insurance.
Insurance industry outlook
C_Group Management Report
55
65
The asset management industry's profitability remains under
pressure from continuous flows into passive products, new pricing
models, and rising distribution costs, and we expect the trend towards
industry consolidation and increasing cost awareness, including
respective restructuring activities, to continue. At the same time, digital
channels such as robo-advisory platforms are likely to continue
gaining prominence. The strengthening of regulatory oversight and
reporting could also affect profitability in the asset management
sector. Opportunities in the area of active asset management will
continue to exist, particularly in alternative and solutions-oriented
strategies, but also in equity and fixed-income. In order to continue
growing, it is vital for asset managers to keep sufficient business
Operating profit in the range of € 5.2 bn to € 6.0 bn.
Combined ratio of approximately 94%.
Pressure on operating investment income (net) to continue, due to
reinvestments in a consistently low interest rate environment.
Our operating profit was in the upper half of our target range in
2019, amounting to € 11.9 bn. For 2020, we envisage an operating
profit of € 12.0 bn plus or minus € 0.5 bn, as we expect strong perfor-
mance in all business segments.
In 2019, our total revenues were € 142.4 bn, a 7.6% increase on a nom-
inal and a 5.9% increase on an internal basis¹ compared to 2018. For
2020 we envisage moderate growth, with Property-Casualty and Asset
Management revenues trending upward and Life/Health revenues re-
maining stable, due to our selective focus on profitable growth.
Management's assessment of expected revenues
and earnings for 2020
C_Group Management Report
Annual Report 2019 - Allianz Group
66
66
For further information on our ambitions for the period 2019-2021,
please see section "Our business aspirations" in the Risk and
Opportunity Report.
A 10% weakening (strengthening) of the U.S. Dollar, com-
pared to the assumed exchange rate of 1.09 to the Euro,
would have a negative (positive) effect on operating profits of
approximately € 0.4 bn.
An average U.S. Dollar to Euro exchange rate of 1.09.
No major disruptions in the capital markets,
No disruptive fiscal or regulatory interference,
Level of claims from natural catastrophes at expected average
levels,
€ 0.1 bn in the first year that follows the rate change.
A 100 basis point increase (decrease) in interest rates would
raise (lower) the expected operating profit by approximately
Interest rates to remain at the current level,
Global economic growth to be stable albeit slightly decelerating
in 2020,
Our outlook assumes no significant deviations from our underlying
assumptions - specifically:
Moderate increase in total AuM, with third-party net inflows expected to
decrease at PIMCO and now solid net inflows at AllianzGI, compared to
2019, combined with a slight positive AuM market return.
Operating profit between € 2.4 bn and € 3.0 bn.
Cost-income ratio below 64 %
Pressure on investment income due to low and even negative interest
rates and continued capital market volatility.
RoE between 10.0 % and 13.0 %.
Operating profit between € 4.1 bn and € 4.7 bn.
Continue to focus on profitable growth; keep developing capital-efficient
products; expand to new markets. Revenues expected to be in the range
of € 71.0 bn to € 77.0 bn.
Annual Report 2019 - Allianz Group
Our net income attributable to shareholders was € 7.9 bn, a
strong increase from the previous year's level. Consistent with our
disclosure practice in the past, and given the susceptibility of our non-
operating results to capital market developments, we refrain from
providing a precise outlook for net income. However, since our outlook
presumes no major disruptions in our capital markets, we anticipate a
rather stable net income development for 2020.
2_The information presented in the sections "Economic outlook", "Insurance industry outlook", and "Asset management
industry outlook" is based on our own estimates.
On the markets, political risk will remain the main volatility driver. In
a context of wait-and-see posture of investors linked to U.S. elections and
progressive erosion of profits, the global equity market is expected to
register an inflexion in its upward (monetary driven) trend.
Achievement of our combined ratio of 94% or better.
Operating profit in the range of € 5.4 bn to € 6.0 bn.
Revenue growth of approximately 3%.
Selective profitable growth.
Protection of shareholder value while continuing to provide
attractive returns and dividends.
Operating profit of € 11.5 bn, plus or minus € 0.5 bn.
Outlook 2019 - as per Annual Report 2018
Asset Management
Life/Health
Pressure on operating investment income (net) to continue, due to
reinvestments in a consistently low interest rate environment.
Continue with focus on profitable growth; keep developing
capital-efficient products; expand to new markets. Revenues are
expected to be in the range of € 67.0 bn to € 73.0 bn.
Operating profit between € 3.9 bn and € 4.5 bn.
Property-Casualty
2019 results versus previous year's outlook for 2019
C_Group Management Report
Overview: 2019 results versus previous year's
outlook¹
OUTLOOK 2020
Annual Report 2019 - Allianz Group
Our net loss decreased. The improved operating result was partly
offset by a lower non-operating investment result, which was affected
by a decrease in our non-operating realized gains and losses (net), and
a lower income tax result.
64
1_For further information on Allianz Corporate and Other figures, please refer to note 4 to the Consolidated Financial State-
ments.
Our operating result improved strongly in 2019 - mainly because our
internal IT service provider developed favorably, but also because
administrative expenses were lower than the year before.
Allianz Group
RoE between 10.0% and 12.0%.
Pressure on investment income due to low interest rates
and continued capital market volatility.
Moderate increase in total AuM due to moderate third-party net
inflows, supported by an overall slightly positive market return in
a volatile market environment.
Monetary policies will remain a safety net for growth and markets.
We expect monetary policies to remain very accommodative in 2020.
The U.S. Federal Reserve will continue easing its monetary policy, with
one rate cut in the first half of 2020 to cope with the recession of the
U.S. manufacturing sector. The European Central Bank is likely to im-
plement another deposit rate cut of 10 basis points in the first half of
2020 as well to -0.6%. Monthly Quantitative Easing purchases will be
maintained at the current pace of € 20 bn per month until the end of
the year.
US-China trade tensions should neither escalate nor de-escalate
much further in 2020. The deal is not a game changer, but it announces
slightly lower uncertainty as a tariff escalation is unlikely in a U.S. elec-
toral year.
Global growth is expected to muddle through in the next two years.
Monetary policies have to deal with a threefold series of disturbances,
i.e. political risk, an external shock on trade, and structural issues re-
lated to ecological transition. Monetary policy only is particularly ill-
equipped to tackle these kinds of shocks, which have long-lasting im-
pacts. Global growth is likely to converge towards but remain below its
potential of +3.0% at the horizon of 2021: we expect the GDP to further
decelerate in 2020 at +2.4% from +2.5% in 2019.
Economic outlook²
1_Represents the ratio of net income attributable to shareholders to the average shareholders' equity excluding unrealized gains/losses on bonds, net of shadow accounting, at the beginning of the year and at the end of the year.
2_Represents the ratio of net income to the average total equity, excluding unrealized gains/losses on bonds, net of shadow accounting, at the beginning of the year and at the end of the year.
At 62.3%, the cost-income ratio is clearly below 64%.
Operating profit amounted to € 2.7 bn, at the upper end of the target range and € + 0.2 bn above mid-point,
due to higher AuM-driven fees.
Total AuM recorded a strong growth of +15.6% (excluding positive currency effects and AuM consolidation
effects: +13.7%) due to an outstanding market return (€+ 193 bn) and strong third-party net inflows
(€+76 bn).
Operating investment result reached € 20.0 bn, due to lower impairments, a better trading result (as a
consequence of recovery of equity markets) and higher realized gains from portfolio management.
Our 12.7% ROE² is above the outlook range.
At € 4.7 bn, our operating profit was above the target range, driven by the investment margin, a one-off
effect due to the increase of the DAC amortization period in the United States, volume growth, and higher
unit-linked management fees.
Revenues of € 76.4 bn are above the range indicated in our outlook, mainly due to the strong growth of
capital-efficient products in Germany and in the United States.
Combined ratio was at 95.5%, missing our target. Despite a stable accident year loss ratio and
improvements in our expense ratio the lower level of run-off led to a shortfall against our target.
Operating investment income (net) decreased, driven by a higher allocation to premium refunds in
Germany for the accident business with premium refund guarantee.
Operating profit of € 5.0 bn was below our target range. Our underwriting result was negatively impacted
by reserve strengthening at AGCS.
Total revenues increased by 6.8%. Internal growth of 4.7% was mainly driven by AGCS, Allianz Partners
and Germany.
Total revenues grew by 5.9% on an internal basis, compared to 2018. Our Life/Health business segment
registered strong volume growth in Germany and USA and we recorded a strong internal premium growth
in our Property-Casualty business segment. An outstanding market return supported by strong net inflows
led to revenue growth in our Asset Management business segment.
Return on equity (ROE)¹ amounted to 13.6% (2018: 13.2%). Proposed dividend at € 9.60 (2018: € 9.00) per
share. Stable payout ratio of at least 50%, based on expected number of eligible shares at the Annual
General Meeting.
Operating profit of € 11.9 bn, in the upper half of our target range.
Results 2019
Cost-income ratio below 64%.
Operating profit in the range of € 2.2 bn to € 2.8 bn.
1_For more detailed information on the previous year's outlook for 2019, please see the Annual Report 2018 from page 63
onwards.
Earnings summary
PROPERTY-CASUALTY INSURANCE
Revenue growth in 2020 will probably be strongest at Allianz
Partners, where we have pooled our B2B2C activities. Further growth
can be expected in Germany and Turkey, as well as in Asian markets
such as China and Malaysia.
1,174
Technical margin
(349)
(7,043)
(7,392)
244
3,794
4,038
Investment margin
1,218
496
6,644
Loadings and fees
Delta
2018
2019
€ mn
Operating profit by profit sources
OPERATING PROFIT BY PROFIT SOURCES'
In the Asia-Pacific region, statutory premiums stood at
€ 5,586 mn. Most of this drop - 7.3% on an internal basis - was due to
a sales decrease in unit-linked products in Taiwan, and could not en-
tirely be compensated by higher sales in both unit-linked products in
Indonesia and protection & health products in Malaysia.
6,148
(45)
Impact of changes in DAC
Operating profit
243
€ mn
Investment margin
INVESTMENT MARGIN²
Loadings and fees
LOADINGS AND FEES¹
C_Group Management Report
59
Annual Report 2019 - Allianz Group
7_The purpose of the analysis of Life/Health operating profit sources is to explain movements in IFRS results by analyzing
underlying drivers of performance, consolidated for the Life/Health business segment.
6_Prior year figures changed in order to reflect the roll-out of profit source reporting to Mexico.
5_PVNBP before non-controlling interests.
4_In this section, our comments in the following section on the development of statutory gross premiums written refer to
values determined "on an internal basis", i.e. adjusted for foreign currency translation and (de-) consolidation effects, in
order to provide more comparable information.
3_Represents the ratio of net income to the average total equity, excluding unrealized gains/losses on bonds, net of shadow
accounting, at the beginning of the year and at the end of the year.
1_For further information on Allianz Life/Health figures, please refer to note 4 to the Consolidated Financial Statements.
2 Statutory premiums are gross premiums written from sales of life and health insurance policies, as well as gross receipts
from sales of unit-linked and other investment-oriented products, in accordance with the statutory accounting practices
applicable in the insurer's home jurisdiction.
Our operating profit increased mainly due to an improved investment
margin, which was driven by lower impairments and higher realiza-
tions especially in France and Germany. Another contributing factor
was a change in the amortization period for deferred acquisition costs
in the United States: It was extended from 20 to 25 years for fixed index
annuities with lifetime income, as an experience analysis had revealed
an increase in persistency rates. Finally, we also recorded volume
growth in the German life business, the United States, and the Asia-
Pacific region.
Expenses
555
4,152
4,708
209
34
In France, statutory premiums declined to € 8,119 mn, a 2.9%
drop on an internal basis. This was largely driven by a decline in sales
of our unit-linked products without guarantee, part of which was com-
pensated by higher sales in our business with protection & health prod-
ucts.
We expect our revenues to increase by approximately 6% in 2020
(2019: 4.7%), of which 4% will come from our acquisitions in the United
Kingdom. Organic growth will be supported by favorable price and
volume effects.
In Italy, statutory premiums dropped to € 10,816 mn, translating
into a 6.7% decrease on an internal basis. This was predominantly due
to lower sales in our business with unit-linked products, where we had
seen a high base value in 2018.
cient products. In the German health business, statutory premiums
reached € 3,575 mn - a 3.5% increase on an internal basis, which was
due to the acquisition of new customers in supplementary health care
coverage as well as premium adjustments in comprehensive health
care coverage.
1 Operating revenues adjusted for foreign currency translation and (de)consolidation effects.
We also monitor the Group's and each of our operating entities'
capital positions very closely. In addition, we will continue to optimize
the sensitivity of our Solvency II capitalization ratio to changes in interest
rates and spreads through prudent asset/liability management and
life product design.
As a result, we have full access to financial markets and are in an
excellent position to raise financing at low cost. We are determined to
maintain our strong financial flexibility, which is supported by both the
prudent steering of our liquidity resources and our well-balanced debt
maturity profile.
The Allianz Group benefits from its very robust liquidity position
and excellent financial strength, with its capitalization well above
regulatory requirements.
and capitalization
Financing, liquidity development,
In Corporate and Other, we recorded an operating loss of € 0.6 bn in
2019. For 2020, we envisage an operating loss in the range of € 0.6 bn
to € 0.8 bn for this business segment.
CORPORATE AND OTHER (INCLUDING
CONSOLIDATION)
Our cost-income ratio is expected to be below 64% in 2020 (2019:
62.3%), as we continue to invest in business growth. In the mid-term,
we expect our cost-income ratio to remain below 63%.
Annual Report 2019 - Allianz Group
For 2020, we envisage overall moderate third-party net inflows and
market returns at both PIMCO and AllianzGI, with relatively stable
margins and stable performance fees, resulting in modest growth in
operating revenues. We also assume the U.S. Dollar to remain rela-
tively stable compared to 2019. All things considered, we expect our
2020 operating profit to range between € 2.4 bn and € 3.0 bn (2019:
€2.7 bn).
Allianz continuously works to make the Life/Health business
model more resilient to market volatility, for instance, by adjusting our
products to market needs while keeping in line with our strategy. Go-
ing forward, we will continue to pursue profitable growth and to im-
prove our capital-efficient products - always with a particular focus
on the customer - while exploring new market opportunities and
building on our strong track record of product innovation. In addition,
we will continue to actively manage both our new and our in-force
business through continuous price reviews, expense management, as-
set/liability management, and crediting strategies. As in the past
years, this should allow us to mitigate the impacts of difficult market
conditions, in particular negative interest rates, and achieve our prof-
itability targets.
One of the key performance indicators used in steering our
Life/Health business segment is ROE. In 2020, we expect it to be be-
tween 10.0% and 13.0%.
States, volume growth, and higher unit-linked management fees. For
2020, we expect this business segment's operating profit to range be-
tween € 4.1 bn and € 4.7 bn.
Our Life/Health operating profit was € 4.7 bn in 2019, exceeding the
target range. Main reasons included the investment margin, a one-off
effect due to the increase of the DAC amortization period in the United
LIFE/HEALTH INSURANCE
Overall, we expect our 2020 operating profit to be in the range of
€ 5.2 bn to € 6.0 bn (2019: € 5.0 bn).
As the low-interest-rate environment is likely to stay, investment in-
come will remain under pressure due to the rather short duration of
investments in the Property-Casualty business segment. Going for-
ward, we will continue to actively adapt our investment strategy to
changing market conditions.
Our combined ratio was 95.5 % in 2019, missing our target. This
was due to reserve strengthening at AGCS, which led to a lower run-off
figure. In 2020, we envisage a combined ratio of approximately 94%.
The underlying assumption is that the aggregate effect of improve-
ments in pricing, claims management, and productivity will compen-
sate for any inflation in underlying claims. As for impacts from natural
catastrophes, despite the highly volatile nature of such catastrophes in
recent years we assume claims to continue at comparable levels going
forward.
We believe that the overall rise in prices that we saw in a number
of markets in the past year will continue in 2020. Nevertheless, we will
maintain our focus on achieving strong underwriting results by adher-
ing to our strict underwriting discipline, as we have in previous years,
and we will be prepared to accept a lower top line if target margins
cannot be achieved.
ASSET MANAGEMENT
67
68
80
able to higher single premium sales in our business with capital-effi- Operating profit
Total
100.0
100.0
4.0
41.5
Annual Report 2019 - Allianz Group
1_This represents management's current state of planning and may be revised in the future. Also, note that the decision
regarding dividend payments in any given year is subject to specific dividend proposals by the Management and Super-
visory Boards, each of which may elect to deviate, if and as appropriate under the then prevailing circumstances, as well
as to the approval of the Annual General Meeting.
The Allianz Group assumes no obligation to update any information or forward-looking statement
contained herein, save for any information we are required to disclose by law.
No duty to update
Deviations may arise due to changes in factors including, but not limited to, the following: (i) the general
economic and competitive situation in the Allianz Group's core business and core markets, (ii) the
performance of financial markets (in particular market volatility, liquidity, and credit events), (iii) the
frequency and severity of insured loss events, including those resulting from natural catastrophes, and the
development of loss expenses, (iv) mortality and morbidity levels and trends, (v) persistency levels, (vi)
particularly in the banking business, the extent of credit defaults, (vii) interest rate levels, (viii) currency
exchange rates, most notably the EUR/USD exchange rate, (ix) changes in laws and regulations, including
tax regulations, (x) the impact of acquisitions including and related integration issues and reorganization
measures, and (xi) the general competitive conditions that, in each individual case, apply at a local, regional,
national, and/or global level. Many of these changes can be exacerbated by terrorist activities.
This document includes forward-looking statements, such as prospects or expectations, that are based on
management's current views and assumptions and subject to known and unknown risks and uncertainties.
Actual results, performance figures, or events may differ significantly from those expressed or implied in
such forward-looking statements.
Cautionary note regarding forward-looking statements
At the date of issuance of this Annual Report, and based on current
information regarding natural catastrophes and capital market trends
- in particular foreign currency, interest rates, and equities -, the Board
of Management has no indication that the Allianz Group is facing any
major adverse developments.
Management's overall assessment of the current
economic situation of the Allianz Group
All of the above remains subject to our sustainable Solvency II
capitalization ratio of 160 % or higher - which is considerably below
our year-end 2019 level of 212 %, and 20 percentage points below our
minimum solvency ambition for the Solvency II capitalization ratio of
180%.
In addition, Allianz SE has decided to launch a share buy-back
program in an amount of up to € 1.5 bn, as part of the previously an-
nounced policy to return capital to the shareholders on a flexible basis.
The share buy-back is based on the authorization granted by the Gen-
eral Meeting on 9 May 2018. The share buy-back program, which
starts in March 2020, shall be finalized by 31 December 2020, at the
latest. Allianz SE will cancel all repurchased shares.
In the interest of dividend continuity, we aim to keep the regular
dividend per share at least at the previous year's level. For 2019, the
Allianz SE Board of Management and the Supervisory Board propose
a dividend of € 9.60 per share.
The Allianz management is committed to having shareholders participate
in the economic development of the Group through dividend payments.
Through prudent capital management, the Allianz Group aims to
maintain a healthy balance between achieving an attractive yield and
investing in profitable growth. Of the Group's net income attributable to
shareholders, we will continue to pay out 50% as a regular dividend.
Expected dividend development¹
C_Group Management Report
In the United States, statutory premiums amounted to
€ 12,265 mn. This 7.5% growth on an internal basis was mainly driven
by sales initiatives resulting in higher sales for non-traditional variable
annuity products.
€ mn
99
(1,194)
1,553
1,801
Total
Alternatives
Multi-assets¹
Equities
Fixed income
Investment vehicle split¹
Delta
248
2018
Type of asset class
(0.3) %-p
3.6
3.3
%
Alternatives
31 December
31 December
(0.7) %-p
2019
Mutual funds
%
58.8
56.3
55.4
%
America
15
105
120
Regional allocation²
17
160
177
0.5%-p
40.7
41.2
%
Separate accounts
27
143
170
(0.5) %-p
59.3
10.2
(0.9) %-p
9.5
C_Group Management Report
Our PVNBP increased by € 7,937 mn to € 70,898 mn, most of which
resulted from higher sales of our capital-efficient products in the Ger-
man life business and of our non-traditional variable annuities in the
United States. The positive effects were partly offset by lower sales of
unit-linked products in Italy, Taiwan, as well as in France.
Present value of new business premiums (PVNBP) by lines of business
%
Statutory premiums
On a nominal basis, statutory premiums went up 8.5%. This includes
favorable foreign currency translation effects of € 833 mn as well as
positive (de-)consolidation effects of € 29 mn. On an internal basis,
statutory premiums increased by 7.3% or € 5,114 mn – to
€ 75,556 mn.
Statutory premiums in the German life business grew to
€ 27,743 mn, a 23.2% rise on an internal basis. It was largely attribut-
2019
2018
Present value of new business
premiums (PVNBP)5
Delta
18.9
18.0
0.9
15.4
14.7
0.7
Unit-linked without guarantee
Capital-efficient products
20.2
25.8
Guaranteed savings & annuities
Protection & health
555
686
1.3 %-p
11.4
12.7
LIFE/HEALTH INSURANCE OPERATIONS
KEY FIGURES
Key figures Life/Health¹
Statutory premiums²
Operating profit
2019
2018
Delta
€ mn
76,426
70,450
5,976
€ mn
4,708
4,152
Net income
€ mn
3,523
2,837
Return on equity³
%
%
(1,294)
2,268
307
Net income
Our cost-income ratio decreased slightly as a consequence of
higher operating revenue growth, compared to a lower increase in op-
erating expenses.
The nominal increase in administrative expenses was mostly
driven by PIMCO and due to investments in business growth and infra-
structure.
Our operating profit increased by 6.9% on a nominal basis, as growth
in operating revenues by far exceeded an increase in operating ex-
penses. On an internal basis,¹ our operating profit went up by 2.6%,
which was due to higher average third-party AuM as well as higher
performance fees.
Operating profit
175
2,530
2,704
Operating profit
An increase of € 70 mn in our net income was due to the higher oper-
ating profit, partially offset by a lower non-operating result - including
higher restructuring expenses - and higher income taxes related to the
operating profit development.
(257)
(4,460)
Operating expenses
(257)
(4,202)
(4,460)
Administrative expenses (net), excluding
acquisition-related expenses
432
6,732
7,164
(4,202)
1_Operating revenues/operating profit adjusted for foreign currency translation and (de-)consolidation effects.
Annual Report 2019 - Allianz Group
63
230
(831)
(602)
102
(3,599)
(3,496)
127
2,767
2,895
Delta
2018
2019
Net income (loss)
Operating result
Operating expenses
Operating revenues
€ mn
Key figures Corporate and Other¹
KEY FIGURES
CORPORATE AND OTHER
C_Group Management Report
(27)
1,961
19
387
1_Mutual funds are investment vehicles (in the United States, investment companies subject to the U.S. code; in Germany,
vehicles subject to the "Standard-Anlagerichtlinien des Fonds" Investmentgesetz) where the money of several
individual investors is pooled into one account to be managed by the asset manager, e.g. open-end funds, closed-end
funds. Separate accounts are investment vehicles where the money of a single investor is directly managed by the
asset manager in a separate dedicated account (e.g. public or private institutions, high net worth individuals, and
corporates).
Positive effects from market and dividends 4 totaled € 193.5 bn. Of
these, € 132.3 bn came from PIMCO and were mainly related to fixed-
income assets, while € 61.2 bn came from AllianzGI and were
contributed by all asset classes.
Net inflows of total assets under management (AUM) amounted to
€74.2 bn in 2019(2018: € 15.4 bn net outflows) - third-party net in-
flows were € 75.8 bn (2018: € 3.5 bn net outflows). The full year's net
inflows were attributable to PIMCO (€ 79.5 bn total and € 83.3 bn
third-party). AllianzGI, on the other hand, recorded total net outflows
of € 5.3 bn and third-party net outflows of € 7.5 bn for the year, with
the fourth quarter 2019 having seen net inflows again.
7%-p
85
92
%
investment outperformance³
Overall three-year rolling
2 Based on the location of the asset management company.
(0.4) %-p
11.2
%
Asia-Pacific
1_The term "multi-assets" refers to a combination of several asset classes (e.g. bonds, stocks, cash and real property)
used as an investment. Multi-asset class investments increase the diversification of an overall portfolio by distributing
investments over several asset classes.
1.2%-p
32.2
33.4
%
Europe
11.6
3_Three-year rolling investment outperformance reflects the mandate-based and volume-weighted three-year
investment success of all third-party assets that are managed by Allianz Asset Management's portfolio-management
units. For separate accounts and mutual funds, the investment success (valued on the basis of the closing prices) is
compared with the investment success prior to cost deduction of the respective benchmark, based on various metrics.
For some mutual funds, the investment success, reduced by fees, is compared with the investment success of the
median of the respective Morningstar peer group (a position in the first and second quartile is equivalent to
outperformance).
1_For further information on our Asset Management figures, please refer to note 4 to the Consolidated Financial Statements.
2_Represents operating expenses divided by operating revenues.
3_Net flows represent the sum of new client assets, additional contributions from existing clients - including dividend rein-
vestment -, withdrawals of assets from and termination of client accounts, and distributions to investors.
4_Market and dividends represents current income earned on the securities held in client accounts, as well as changes in the
6,294
6,681
Other net fee and commission income
Other operating revenues
Operating revenues
72
419
490
Performance fees
Delta
2018
2019
€ mn
Asset Management business segment information
Other operating revenues decreased, mainly due to a less favora-
ble foreign currency translation result as well as lower net interest and
similar income.
Other net fee and commission income rose on a nominal basis,
driven by higher average third-party AuM mainly at PIMCO.
We recorded higher performance fees at both PIMCO and
Allianz Gl. At PIMCO this positive development was largely due to
stronger performance fees from hedge funds.
Our operating revenues increased by 6.4% on a nominal basis. This de-
velopment was driven by higher average third-party AuM, mainly at
PIMCO, due to strong market effects and net inflows. On an internal
basis, operating revenues grew by 1.8%.
Operating revenues
C_Group Management Report
Annual Report 2019 - Allianz Group
62
fair value of these securities. This also includes dividends from net investment income and from net realized capital gains
to investors of both open-ended mutual funds and closed-end funds.
(7)
225
2019
Delta
(8.3)
(7.9)
555
4,152
4,708
Operating profit
Acquisition expenses and commissions as %
of PVNBP¹
60
823
883
Capital-efficient products
449
552
Unit-linked without guarantee
(349)
(7,043)
(7,392)
0.4
Expenses
Administrative and other expenses as % of
average reserves2,3
(0.3)
Capitalization of DAC
Return on equity
Delta
2018
2019
€ mn
Impact of change in DAC
Our net income increased by € 686 mn. This was largely attributable to
the higher operating profit in 2019. The sale of our traditional life insur-
ance portfolio in Taiwan in 2018 - which had generated a negative net
impact of € 218 mn in the previous year - also supported this develop-
ment.
Net income
The operating profit in our guaranteed savings & annuities line of busi-
ness increased, largely due to improved investment margins in the
United States and in France. A lower operating profit in our protection
& health line of business was most driven by the lower technical mar-
gin in France. Our operating profit in the unit-linked without guarantee
line of business went up, much of which was a consequence of higher
unit-linked management fees in Italy and in France. The increase in
operating profit in the capital-efficient products line of business was
mostly due to an improved investment margin in the German life busi-
ness.
IN DEFERRED ACQUISITION COSTS (DAC)³
IMPACT OF CHANGE
Our technical margin declined, particularly because the combined
ratio in our protection & health business in France worsened. Positive
effects from the Asia-Pacific region and the United States partly com-
pensated for this development.
TECHNICAL MARGIN²
Acquisition expenses and commissions went up as sales increased,
above all, in our German and U.S. life business as well as in the Asia-
Pacific region. This was partly offset by lower unit-linked sales in Italy
and a shift towards less expensive distribution channels in France.
2_Aggregate policy reserves and unit-linked reserves.
3_Yields are pro rata.
1_PVNBP before non-controlling interests.
(0.3)
1,813
(34)
851
Expenses
Operating profit by lines of business
OPERATING PROFIT BY LINES OF BUSINESS
C_Group Management Report
EXPENSES¹
60
60
2_The investment margin is defined as IFRS investment income net of expenses, less interest credited to IFRS reserves and
policyholder participation (including policyholder participation beyond contractual and regulatory requirements mainly
for the German life business).
1_Loadings and fees include premium and reserve based fees, unit-linked management fees, and policyholder participation
in expenses.
Annual Report 2019 - Allianz Group
Our investment margin went up: In France, lower impairments on both
equities and debt securities, due to favorable market conditions, as
well as higher realized gains were only partly offset by an increase in
policyholder participation. In the United States, positive developments
included favorable foreign currency translation effects and an unlock-
ing of assumptions in the variable annuity business. In our German life
business, we recorded higher realizations mainly from debt instru-
ments, lower impairments predominantly from equities, and an in-
creased interest income, which together outweighed higher policy-
holder participations.
3 Yields are pro rata.
2_Investment margin divided by the average of current end-of-period and previous end-of-period aggregate policy
reserves.
1_"Other" comprises the delta of out-of-scope entities, on the one hand, which are added here with their respective
operating profit and different line item definitions compared to the financial statements, such as interest paid on
deposits for reinsurance, fee and commission income, and expenses excluding unit-linked management fees on the
other hand. For 2018, it also includes a change in our U.S. fixed index annuity business, with € 683 mn shifted from
"Impact of change in DAC" into the "Investment margin" - for further information please refer to note 2 to the
Consolidated Financial Statements in the Annual Report 2018, chapter "Reserves for insurance and investment
contracts", paragraph "Aggregate policy reserves" and Reconciliations.
Loadings from premiums increased in line with higher sales, mainly of
capital-efficient products in our German life business, but also in the
Asia-Pacific region and in our business with protection & health prod-
ucts in France. Loadings from reserves went up, mostly due to higher
reserve volumes in our German life business and in the United States,
and remained stable in relation to reserves. Unit-linked management
fees also grew, particularly in Italy, supported by an increase in assets
under management.
86
2018
€ mn
885
€ mn
2018
Protection & health
2
(1,824)
(1,821)
Administrative and other expenses
426
1,995
2,421
Guaranteed savings & annuities
(352)
(5,219)
(5,570)
Acquisition expenses and commissions
Delta
2018
2019
Delta
2019
1,829
103
Amortization, unlocking, and true-up of DAC
income (net)
(1,707)
(3,351)
1,645
Loadings and fees¹
6,644
6,148
496
Operating realized gains/losses (net)
5,997
4,945
1,052
Interest expenses
(121)
(104)
(17)
Loadings from premiums as % of statutory
premiums
29
Operating impairments of investments (net)
697
Unit-linked management fees
2019
2018
Delta
Loadings from premiums
4,322
3,941
381
(16)
18,648
17,883
765
Loadings from reserves
1,596
1,509
87
Operating income from financial assets and
liabilities carried at fair value through
726
(1,201)
Interest and similar income
3,794
(8,763)
(307)
average unit-linked reserves 2.3
1 Aggregate policy reserves and unit-linked reserves.
2 Yields are pro rata.
0.5
0.5
Policyholder participation
(7,552)
(3,867)
(3,685)
Investment margin
4,038
244
Investment margin in basis points².3
(1,570)
86
(9,071)
Technical interest
3_Unit-linked management fees, excluding asset management fees, divided by unit-linked reserves.
898
1,265
5.7
5.6
(262)
Loadings from reserves as % of average
reserves 1,2
0.3
Unit-linked management fees as % of
Investment expenses
0.1
(1,382)
636
(1,592)
Other¹
33
0.3
(2,465)
33
(210)
5.6
5.6
69.4
60.0
9.4
10.8
10.3
0.4
Organization
9.4
63.2
15.0
3.6
10.4
78.3
LIQUIDITY AND FUNDING RESOURCES
35.8
36.5
1.0
0.5
71.3
76.1
(4.8)
11.1
13.1
(2.0)
228.9
200.4
28.6
35.6
34.5
1.0
32.2
13.0
LIABILITIES
0.6
37.0
C_Group Management Report
Annual Report 2019 - Allianz Group
70
1_For further information about changes in the reserves for loss and loss adjustment expenses for the Property-Casualty
business segment, please refer to note 14 to the Consolidated Financial Statements.
For details on the regulatory capitalization of the Allianz Group, please
refer to our Risk and Opportunity Report from > page 76 onwards.
Regulatory capital adequacy
Please refer to the Risk and Opportunity Report from > page 76
onwards for a description of the main concentrations of risk and other
relevant risk positions.
The Allianz Group has also entered into contractual relationships
with various types of structured entities. They have been designed in
such a way that their relevant activities are directed by means of con-
tractual arrangements rather than voting or similar rights. Typically,
structured entities have been set up in connection with asset-backed
financing and certain investment fund products. For more details on our
involvement with structured entities, please refer to note 35 to the Con-
solidated Financial Statements.
The Allianz Group enters into various commitments including loan
commitments, purchase obligations, and other commitments. For more
details please refer to note 37 to the Consolidated Financial State-
ments.
In the normal course of business, the Allianz Group may enter into
arrangements that do not lead to the recognition of assets and liabili-
ties in the Consolidated Financial Statements under IFRS. Since the
Allianz Group does not rely on off-balance sheet arrangements as a sig-
nificant source of revenue or financing, our off-balance sheet exposure
to loss is immaterial relative to our financial position.
Off-balance sheet arrangements
Life/Health reserves for insurance and investment contracts increased
by €57.4 bn to € 572.9 bn. A € 27.9 bn increase (before foreign
currency translation effects) in aggregate policy reserves was mainly
driven by our operations in Germany (€ 16.9 bn) and the United States
(€ 7.9 bn before foreign currency translation effects). Reserves for pre-
mium refunds increased by € 26.5 bn (before foreign currency transla-
tion effects), due to higher unrealized gains to be shared with policy-
holders. Foreign currency translation effects increased the balance
sheet value by € 3.0 bn, mainly due to the stronger U.S. Dollar
(€ 1.7 bn).
LIFE/HEALTH LIABILITIES
As of 31 December 2019, the business segment's gross reserves for loss
and loss adjustment expenses as well as discounted loss reserves
amounted to € 70.0 bn, compared to € 65.6 bn at year-end 2018. On
a net basis, our reserves, including discounted loss reserves, increased
from € 56.4 bn to € 60.1 bn.¹
PROPERTY-CASUALTY LIABILITIES
C_Group Management Report
1.7
1.9
(0.1)
19.4
16.9
2.6
12.5
2.5
754.4
672.8
81.5
100.0
100.0
69
0.1
26.6
Capital authorizations of Allianz SE
238.1
As of
Annual Report 2019 - Allianz Group
2_For further information, please refer to note 19 to the Consolidated Financial Statements
3_Excluding self-originated German private retail mortgage loans. For 3%, no ratings were available.
C_Group Management Report
BALANCE SHEET REVIEW
Shareholders' equity¹
Shareholders' equity
€ mn
Shareholders' equity
As of
As of
31 December
31 December
2019
2018
As of
As of
As of
31 December
2_For issuance of shares to employees with exclusion of shareholders' subscription rights.
3_To cover convertible bonds, bonds with warrants, convertible participation rights, participation rights, and
subordinated financial instruments, each with the authorization to exclude shareholders' subscription rights.
1_For further information on Allianz SE debt (issued or guaranteed) as of 31 December 2019, please refer to note 18 to
the Consolidated Financial Statements.
2_Based on nominal value.
Senior bonds
Subordinated bonds
Total
8,086
Delta
8,036
2018
31 December
31 December
2019
Delta
2018
2019
31 December
Delta
1_For issuance of shares against contribution in cash and/or kind, with the authorization to exclude shareholders'
subscription rights.
Paid-in capital
28,928
The following portfolio overview covers the Allianz Group's assets held
for investment, which are largely driven by our insurance
businesses.
Asset allocation and fixed-income portfolio overview
Type of investment
Debt instruments, thereof:
Government bonds
Covered bonds
Corporate bonds
Banks
Other
Equities
Real estate
Cash/other
Total
Compared to year-end 2018, our overall asset allocation remained
rather stable with a modest increase in our equity investments.
Our well-diversified exposure to debt instruments increased com-
pared to year-end 2018, mainly due to decreased interest rates. About
93% of this portfolio was invested in investment-grade bonds and
loans.³ Our government bonds portfolio contained bonds from France,
Germany, Italy, and Spain that represented 17.1%, 13.5%, 7.6% and
6.1% of our portfolio shares. Our corporate bonds portfolio contained
bonds from the United States, Eurozone, and Europe excl. Eurozone.
They represented 38.0%, 34.0% and 12.6% of our portfolio shares.
STRUCTURE OF INVESTMENTS - PORTFOLIO
OVERVIEW
The following section focuses on our financial investments in debt
instruments, equities, real estate, and cash, as these reflect the major
developments in our asset base.
As of 31 December 2019, total assets amounted to € 1,011.2 bn and
total liabilities were € 933.8 bn. Compared to year-end 2018, total
assets and total liabilities increased by € 113.6 bn and € 99.9 bn,
respectively.
Total assets and total liabilities
Retained earnings
29,577
27,967
1,611
Foreign currency translation adjustment
(2,195)
(2,607)
28,928
412
17,691
6,945
10,747
74,002
61,232
12,770
Shareholders' equity increased largely due to higher unrealized gains
and losses (net) and net income attributable to shareholders of
€ 7,914 mn. The dividend payout in May 2019 (€ 3,767 mn) and the
share buy-back program², with a total amount of € 1.5 bn, partly offset
this increase.
Unrealized gains and losses (net)
Total
€ 250,000,000
2018
3.6
The overall liquidity of our insurance operations depends on cap-
ital market developments, interest rate levels, and our ability to realize
the market value of our investment portfolio to meet insurance claims
and policyholder benefits. Other factors affecting the liquidity of our
Property-Casualty insurance operations include the timing, frequency,
and severity of losses underlying our policies and policy renewal rates.
In our Life operations, liquidity needs are generally influenced by
trends in actual mortality rates compared to the assumptions underly-
ing our life insurance reserves. Market returns, crediting rates, and the
behavior of our life insurance clients – for example, regarding the level
of surrenders and withdrawals - can also have significant impacts.
ASSET MANAGEMENT OPERATIONS
Within our Asset Management operations, the most important sources
of liquidity are fees generated from asset management activities.
These are primarily used to cover operating expenses.
Liquidity management
and funding of Allianz SE
The responsibility for managing the funding needs within the Group,
maximizing access to liquidity sources, and minimizing borrowing costs
lies with Allianz SE. We therefore comment on the liquidity and funding
resources of Allianz SE in the following sections. Restrictions on the
transferability of capital within the Group mainly result from the capital
maintenance rules under applicable company laws, as well as from
the regulatory solvency capital requirements for regulated Group
companies.
LIQUIDITY RESOURCES AND USES
Allianz SE ensures adequate access to liquidity and capital for our
operating subsidiaries. The main sources of liquidity available for
Allianz SE are dividends received from subsidiaries and funding pro-
vided by capital markets. Liquidity resources are defined as readily
available assets - specifically cash, money market investments, and
highly liquid government bonds. Our funds are primarily used for
interest payments on our debt funding, operating costs, internal and
external growth investments, and dividends to our shareholders.
FUNDING SOURCES
Allianz SE's access to external funds depends on various factors such
as capital market conditions, access to credit facilities, credit ratings,
and credit capacity. The financial resources available to Allianz SE in
the capital markets for short-, mid- and long-term funding needs are
described below. In general, mid- to long-term financing is covered by
issuing senior or subordinated bonds or ordinary no-par value shares.
Annual Report 2019 - Allianz Group
71
72
72
C_Group Management Report
Our insurance operations also carry a high proportion of liquid
investments, which can be converted into cash to pay for claims.
Generally, our investments in fixed-income securities are sequenced to
mature when funds are expected to be needed.
We receive a large part of premiums before payments of claims
or policy benefits are required, generating solid cash flows from our
insurance operations. This allows us to invest the funds in the interim to
create investment income.
Major sources of liquidity for our operational activities are
primary and reinsurance premiums received, reinsurance receivables
collected, investment income, and proceeds generated from the
maturity or sale of investments. These funds are mainly used to pay
claims arising from the Property-Casualty insurance business and
related expenses, life policy benefits, surrenders and cancellations,
acquisition costs, and operating costs.
INSURANCE OPERATIONS
(0.9)
86.2
85.3
63.4
580.3
643.6
%-p
SHARE CAPITAL
%
€ bn
€ bn
The Allianz Group's liquidity management is based on policies and
guidelines approved by the Allianz SE Board of Management.
Allianz SE and each of the operating entities are responsible for
managing their respective liquidity positions, while Allianz SE provides
central cash pooling for the Group. Capital allocation is managed by
Allianz SE for the entire Group. This structure allows the efficient use of
liquidity and capital resources and enables Allianz SE to achieve the
desired liquidity and capitalization levels for the Group and its operat-
ing entities.
Liquidity management
of our operating entities
%
As of 31 December 2019, the issued share capital as registered at the
Commercial Register was € 1,169,920,000. This was divided into
417,172,859 no-par value shares. As of 31 December 2019, the
Allianz Group held 595,677 (2018: 961,636) own shares.
Allianz SE has the option to increase its share capital according to
authorizations provided by the AGM. The following table outlines
Allianz SE's capital authorizations as of 31 December 2019:
Interest expenses on senior bonds decreased, mainly due to lower
funding costs on average in 2019. For subordinated bonds, the
decrease of interest expenses was primarily driven by lower volumes
outstanding as well as lower funding costs on average, partially offset
by unfavorable foreign currency translation effects.
8 May 2023
Senior bonds
Subordinated bonds
8,135
8,085
200
2.2
13,157
€ 334,960,000
13,177
4.5
€ 15,000,000
8 May 2023
Total
21,293
21,262
795
595
211.6
2019
Expiry date of
the authorization
Senior and subordinated bonds issued or guaranteed by Allianz SE¹
Weighted-
As of 31 December
Nominal value
€ mn
Carrying value
€ mn
Interest
expenses
€ mn
average
interest rate²
€bn
%
Authorized Capital
2018/1¹
Authorized Capital
2018/11²
Conditional Capital
2010/2018³
Nominal amount
Capital authorization
2.5
212
Annual Report 2019 - Allianz Group
Property-Casualty
4.7
1.7
0.4
6.8
Life/Health
7.3
1.2
8.5
Composition of total revenues
€ mn
Asset Management
Nominal
growth
1.8
4.3
6.4
Corporate and Other
(2.0)
(11.1)
(12.9)
2019
2018
Allianz Group
5.9
0.7
1.0
0.3
Foreign
currency
translation
consolidation
Changes in
scope of
20
20
1.7
The Group maintained its A-1+/Prime-1 ratings for short-term
issuances. We can therefore continue funding our liquidity under the
Euro Commercial Paper Program at an average rate for each tranche
below Euribor, and under the U.S. Dollar Commercial Paper Program
at an average rate for each tranche below U.S. Libor.
Further potential sources of short-term funding that allow the
Allianz Group to fine-tune its capital structure are letter of credit facili-
ties and bank credit lines.
Net cash flow provided by operating activities increased by € 10.8 bn
to € 36.4 bn in 2019. This figure comprises net income plus adjustments
for non-cash charges, credits, and other items included in net earnings,
as well as cash flows related to the net change in operating assets and
liabilities. Net income after adding back non-cash charges and similar
items decreased to € 12.2 bn in 2019. Operating cash flows from net
changes in operating assets and liabilities rose by € 13.8bn to
€ 24.2 bn. This was mainly driven by higher reserves for insurance and
investment contracts in our Life/Health business segment in Germany,
France and the United States. In addition, we recorded higher reserves
for loss and loss adjustment expenses, mainly driven by the property-
casualty business in Germany and France, and lower net cash outflows
from assets and liabilities held for trading.
Net cash outflow used in investing activities increased by € 8.4 bn
to € 27.7 bn. The main driver was higher net cash outflows from avail-
able-for-sale investments, particularly at Allianz SE, France and the
United States.
Net cash outflow used in financing activities was lower in 2019
by €2.0 bn and amounted to € 4.9 bn. This decrease was largely driven
by lower net cash outflows from transactions between equity holders,
in particular from the Allianz SE share-buy-back program and the
acquisition of Euler Hermes shares held by non-controlling interests in
2018. Higher dividend payments to our shareholders partly compen-
sated these effects.
Cash and cash equivalents, including cash and cash equivalents
reclassified to assets of disposal groups held for sale, increased by
€ 4.4 bn, mainly stemming from our Life/Health business segment in
the United States and Germany and from our operations in the United
Kingdom.
For further information on the Consolidated Statement of Cash
Flows, please refer to > page 98.
Annual Report 2019 - Allianz Group
73
C_Group Management Report
RECONCILIATIONS
The previous analysis is based on our Consolidated Financial State- Composition of total revenue growth
ments and should be read in conjunction with them. In addition to our
figures stated in accordance with the International Financial Reporting
Standards (IFRS), the Allianz Group uses operating profit and internal
growth to enhance the understanding of our results. These additional
measures should be viewed as complementary to, rather than a sub-
stitute for, our figures determined according to IFRS.
For further information, please refer to note 4 to the Consolidated
Financial Statements.
We believe that an understanding of our total revenue performance is
enhanced when the effects of foreign currency translation as well as
acquisitions, disposals, and transfers (or "changes in scope of consoli-
dation") are analyzed separately. Accordingly, in addition to present-
ing nominal total revenue growth, we also present internal growth,
which excludes these effects.
Reconciliation of nominal total revenue growth
to internal total revenue growth
Composition of total revenues
Total revenues comprise total revenues in Property-Casualty, statutory
premiums in Life/Health, operating revenues in Asset Management,
and total revenues in Corporate and Other (Banking).¹
%
2019
Internal
growth
Our exposure to equities increased mainly due to a strong perfor-
mance on major equity markets.
7.6
1,163
PROPERTY-CASUALTY
2018¹
(2.4)
3.5
LIFE/HEALTH
Statutory premiums
76,426
70,450
1_Prior year figures have not been adjusted in light of the new total revenues definition.
ASSET MANAGEMENT
Operating revenues
consisting of:
7,164
6,732
(0.2)
Net fee and commission income
6,713
Net interest and similar income
(10)
3
Income from financial assets and liabilities carried at fair
value through income (net)
1
5
Other income
1
11
CORPORATE AND OTHER
thereof: Total revenues (Banking)
7,171
6.1
(51.1)
(49.3)
59,156
55,401
Property-Casualty
consisting of:
Life/Health
Gross premiums written
57,210
53,636
Asset Management
Fee and commission income
1,946
1,765
Corporate and Other
Allianz Group
5.7
0.1
(3.2)
2.6
6.4
(0.1)
(1.6)
4.7
5.8
2.5
(3.2)
5.1
(4.0)
Total revenues
Money market securities
2018
1.5
As of 31 December
Up to 1 year
Contractual maturity date
1-5 years Over 5 years
1_Based on nominal value.
Total
2019
Senior bonds
1,252²
2,243
Subordinated bonds
Total
1,252
€ mn
2,243
8,085
13,177
21,262
2018
Senior bonds
1,493
3,493
3,050
8,036
Subordinated bonds
13,430
13,430
Total
1,493
4,590³
13,1774
17,767
Subordinated bonds
Senior bonds
Maturity structure of Allianz SE's senior and subordinated bonds¹
13,456
13,430
605
4.5
21,541
21,466
817
3.8
For further information on our share capital and regarding authoriza-
tions to issue and repurchase shares, please refer to the chapter
Takeover-Related Statements and Explanations (part of the Group
Management Report) starting on ②>> page 21.
LONG-TERM DEBT FUNDING
As of 31 December 2019, Allianz SE had senior and subordinated
bonds with a variety of maturities outstanding, reflecting our focus on
long-term financing. As the cost and availability of external funding
may be negatively affected by general market conditions or by
matters specific to the financial services industry or the Allianz Group,
we seek to reduce refinancing risk by actively steering the maturity
profile of our funding structure.
The following table details the long-term debt issuances and
redemptions of Allianz SE during 2019 and 2018:
Issuances and redemptions of Allianz SE's senior and subordinated
bonds
€ mn
As of 31 December
Issuances¹
Redemptions/
Buybacks¹
Issuance net of
redemptions/
buybacks
2019
Senior bonds
1,500
1,500
Subordinated bonds
1,000
1,364
(364)
2018
3,493
16,480
21,466
1_Based on carrying value.
17,550
3,991
21,541
Net cash flow used in investing activities
Net cash flow used in financing activities
Change in cash and cash equivalents¹
(27,703)
(19,310)
(8,393)
(4,850)
(6,821)
1,971
3,986
(416)
4,402
1_Includes effects of exchange rate changes on cash and cash equivalents of € 90 mn and € 41 mn in 2019 and 2018,
respectively.
SHORT-TERM DEBT FUNDING
Available short-term funding sources are the Medium-Term Note
Program and the Commercial Paper Program. Money market securi-
ties decreased in the use of commercial paper, compared to the previ-
ous year-end. Interest expenses on money market securities decreased
mainly due to lower funding costs on average in 2019.
Money market securities of Allianz SE
As of 31 December
Carrying value
€ mn
Interest
expense
€ mn
Average
interest rate
%
2019
Money market securities
1,124
17
Senior and subordinated bonds
1_Based on nominal value.
239
10,776
36,448
2_Senior bonds of EUR 1.5 bn were redeemed in the third quarter of 2019.
3_Two senior bonds of EUR 0.75 bn each were issued in the first quarter of 2019.
4_Includes a buyback of EUR 0.9 bn subordinated bonds, the redemption of CHF 0.5 bn subordinated bonds at first call
date as well as the issuance of EUR 1.0 bn subordinated bonds in the third quarter of 2019.
500
(500)
Funding in non-Euro currencies enables us to diversify our investor
base or to take advantage of favorable funding costs in those markets.
Funds raised in non-Euro currencies are incorporated in our general
hedging strategy. As of 31 December 2019, approximately 17.1%
(2018: 18.5%) of the long-term debt was issued or guaranteed by
Allianz SE in currencies other than the Euro.
Annual Report 2019 - Allianz Group
Currency allocation of Allianz SE's senior and subordinated bonds¹
C_Group Management Report
Allianz Group consolidated cash flows
€ mn
As of 31 December
Euro
Non-Euro
Total
Annual changes in cash and cash equivalents
€ mn
2019
Senior and subordinated bonds
17,646
3,647
21,293
2019
2018
Delta
2018
Net cash flow provided by operating
activities
25,672
2.6
275
Interest and similar income
3_For German Speaking Countries, policyholder participation on revaluation of DAC/URR capitalization/amortization.
4_For further information on the FIA adjustment, please refer to note 2 to the Consolidated Financial Statements in the
Annual Report 2018, chapter "Reserves for insurance and investment contracts", paragraph "Aggregate policy
reserves".
5_As per notes to the Consolidated Financial Statements.
Annual Report 2019 - Allianz Group
75
C_Group Management Report
RISK AND OPPORTUNITY REPORT
Target and strategy of risk management
Allianz aims to ensure that the Group is adequately capitalized at all
times and that all related undertakings at least meet their respective
regulatory capital requirements for the benefit of both shareholders
and policyholders.
In addition, we take into account the requirements of rating agen-
cies. While capital requirements imposed by regulators constitute a
binding constraint, meeting rating agencies' capital requirements and
maintaining strong credit ratings are strategic business objectives of
the Allianz Group.
We closely monitor the capital position and risk concentrations of
the Group and its related undertakings and apply regular stress tests
(including standardized, historical, and reverse stress test scenarios as
well as monthly stress and scenario analyses focusing on current and
possible future developments). These analyses allow us to take appro-
priate measures to preserve our continued capital and solvency
strength. Furthermore, the risk capital reflecting the risk profile and the
cost of capital is an important aspect considered in business decisions.
In addition, our liquidity risk framework ensures that all legal enti-
ties in scope are responsible for the management of their liquidity risks
and to maintain a sufficient liquidity position under both market con-
ditions (expected as well as stressed) and business conditions.
Risk governance system
1_Prior year figures have been changed in order to reflect the roll-out of profit source reporting to Mexico.
2_As per Group Management Report.
RISK MANAGEMENT FRAMEWORK
are:
Promotion of a strong risk management culture, supported by a
robust risk governance structure.
Consistent and proportional application of an integrated risk cap-
ital framework to protect our capital base and support effective
capital management.
Integration of risk considerations and capital needs into manage-
ment and decision-making processes by attributing risk and allo-
cating capital to business segments, products, and strategies.
Our risk management system is based on the following four pillars:
Risk identification and underwriting: A robust system of risk identi-
fication and underwriting forms the foundation for adequate risk
management decisions. Supporting activities include standards
for underwriting, valuation methods, individual transaction and
new product approvals, emerging-/operational-/top-risk assess-
ments, liquidity risk and scenario analyses, amongst others.
-
Risk strategy and risk appetite: Our risk strategy defines our risk
appetite consistent with our business strategy. It ensures that
rewards are appropriate based on the risks taken and the capital
required, and that delegated decision-making bodies are in line
with our overall risk-bearing capacity and strategy.
Risk reporting and monitoring: Our comprehensive qualitative
and quantitative risk monitoring and reporting framework pro-
vides management with the transparency needed to assess
whether our risk profile remains within the approved limits and to
identify emerging issues and risks quickly. For example, risk dash-
boards and limit utilization reports as well as scenario analyses
and stress tests are regularly prepared and communicated.
Communication and transparency: Transparent risk disclosure
provides the basis for communicating our strategy and perfor-
mance to internal and external stakeholders, ensuring a sustain-
able positive impact on valuation and financing. It also strength-
ens the risk awareness and risk culture throughout the entire
Group.
OUR STRATEGY
OUR BUSINESS ASPIRATIONS
The Board of Management of Allianz SE has defined the following
objectives for Allianz's medium-term strategy with the motto "Simplic-
ity wins":
As a provider of financial services, we consider risk management to be
a core competency and an integral part of our business. Our risk man-
agement framework covers all operations and subsidiaries within the
Group in proportion to the inherent risks of their activities, ensuring that
risks across the Group are consistently identified, analyzed, assessed,
and managed. The primary goals of our risk management framework
(1,802)
14
(1,825)
Definition: FIA adjustment
683
Scope
(31)
(24)
Amortization, unlocking, and true-up of DAC
(2,672)
(2,060)
Commissions and profit received
on reinsurance business ceded
95
84
Acquisition costs³
(4,624)
(3,833)
Administrative and other expenses²
(1,821)
Definitions
164
Scope
(176)
(1,824)
159
(151)
Administrative expenses
on reinsurance business ceded
Administrative expenses
9
Outperform: We seek to move ahead of our competitors, both tra-
ditional businesses and disruptors.
(968)
Transform: We seek to become simpler and deeply digital, and to
make our businesses more scalable.
These objectives have been translated into clear ambitions for the
period 2019-2021. With regard to financial performance, we strive for
a return on equity (excluding unrealized gains/losses on bonds) of
more than 13%, while growing our earnings per share at a compound
annual growth rate of more than 5% (baseline full year 2018).
Overall risk organization and roles in risk management
A comprehensive system of risk governance is achieved by setting
standards related to organizational structure, risk strategy and appe-
tite, limit systems, documentation, and reporting. These standards
ensure the accurate and timely flow of risk-related information and a
disciplined approach towards decision-making and execution at both
the global and the local level.
Annual Report 2019 - Allianz Group
77
C_Group Management Report
As a general principle, the responsibility for the "First Line of
Defense" rests with business managers in the related undertaking.
They are responsible for both the risks taken and the returns from their
decisions. Our "Second Line of Defense" is made up of independent
global oversight functions including Risk, Actuarial, Compliance, and
Legal, which support the Board in defining the risk frameworks within
which the business can operate. Group Audit forms the "Third Line of
Defense", independently and regularly reviewing risk governance
implementation, compliance with risk principles, performing quality
reviews of risk processes, and testing adherence to business standards,
including the internal control framework.
Group Risk management function
Group Risk is managed by the Group Chief Risk Officer and supports
the Board of Management of Allianz SE, including its committees, by
performing various analyses, communicating risk management
related information, and implementing committee decisions.
Group Risk also supports the Board of Management in develop-
ing the risk management framework - which covers risk governance,
risk strategy and appetite - and risk monitoring and reporting. Group
Risk's operational responsibility encompasses assessing risks and
monitoring limits and accumulations of specific risks across business
lines, including natural and man-made disasters and exposures to fi-
nancial markets and counterparties.
Group Risk strengthens and maintains the Group's risk network
through regular and close interaction with the management of related
undertakings and other key stakeholders such as the local finance, risk,
actuarial and investment departments. A strong group-wide risk net-
work enables the Allianz Group to influence risk culture across the
Group, identify risks at an early stage, and make management aware
of these risks.
Related undertakings
Related undertakings¹ are responsible for their own risk management,
including adherence to both external requirements (for example,
those imposed by local regulators) and internal standards. Their
Boards of Management are responsible for setting and approving a
local risk strategy during the annual Strategic and Planning Dialogs
with the Group, and for ensuring adherence to their risk strategy.
The Group Finance and Risk Committee (GFRC) provides oversight of
the Group's and Allianz SE's risk management framework, acting as a
primary early-warning function by monitoring the Allianz Group's and
Allianz SE's risk profiles as well as the availability of capital. The GFRC
also ensures that an adequate relationship between return and risk is
maintained. Additionally, the GFRC defines risk standards, is the limit-
setting authority within the framework set by the Board of Manage-
ment, and approves major financing and capital management trans-
actions. Finally, the GFRC supports the Board of Management with
recommendations regarding the capital structure, capital allocation,
liquidity position, and investment strategy, including strategic asset
allocation.
A risk function, headed by a Chief Risk Officer which is independ-
ent from business line management, is established by each related
undertaking. A local Risk Committee supports both the Board of Man-
agement and the Chief Risk Officer by acting as the primary risk con-
trolling body.
Other functions and bodies
In addition to Group Risk and the local risk functions, legal, compli-
ance, and actuarial functions established at both the Group and the
entity level constitute additional components of the "Second Line of
Defense".
Group Legal and Group Compliance seek to mitigate legal risks
with support from other departments. The objectives of both functions
are to ensure that laws and regulations are observed, to react appro-
priately to all impending legislative changes or new court rulings, to
attend to legal disputes and litigation, and to provide legally appro-
priate solutions for transactions and business processes. In addition,
Group Compliance - in conjunction with Group Legal and other ex-
perts involved - is responsible for integrity management, which aims
to protect the Allianz Group as well as our related undertakings and
employees from regulatory risks.
Group Actuarial, Planning and Controlling contributes towards
assessing and managing risks in line with regulatory requirements, in
particular for those risks whose management requires actuarial exper-
tise. The range of tasks includes, amongst others, the calculation and
monitoring of technical provisions, technical actuarial assistance in
business planning, reporting and monitoring of the results, and sup-
porting the effective implementation of the risk management system.
Risk-based steering and risk management
The Allianz Group is exposed to a variety of risks through its core insur-
ance and asset management activities, including market, credit,
underwriting, business, operational, strategic, liquidity, and reputa-
tional risks.
As an integrated financial services provider, we consider diversifi-
cation across different business segments and regions to be an
important element in managing our risks efficiently, as it limits the eco-
nomic impact of any single event and contributes to relatively stable
results. Our aim is to maintain a balanced risk profile without any
disproportionately large risk concentrations and accumulations.
With Solvency II being the regulatory regime relevant for the
Group as of 1 January 2016, our risk profile is measured and steered
based on our approved Solvency II internal model². We have intro-
duced a target solvency ratio in accordance with Solvency II, based on
pre-defined stress scenarios for both the Group and related undertak-
ings, supplemented by ad-hoc scenarios, historical and reverse stress
tests, and sensitivity analyses.
In addition, central elements of Allianz's dividend policy are linked
to Solvency II capitalization based on the internal model. This helps us
ensure a consistent view on risk steering and capitalization in line with
the Solvency II framework.
1_Related undertakings are also referred to as operating entities.
2_From a formalistic perspective, the German Supervisory Authority deems our model to be "partial" because not all our
entities are using the internal model. Some of our smaller entities report under the standard formula and others under
the deduction and aggregation approach. Without loss of generality, we might use the term internal model in the following
chapters, e.g., in case descriptions also referring to entities that use the internal model, or descriptions focusing on pro-
cesses with respect to the internal model components.
78
Consistent implementation of the Group's risk management
framework in the related undertakings, including regular dialog be-
tween the Group and the entity, is ensured, for example, through Group
Risk representation on local Risk Committees and through regular as-
sessment of the local risk management framework and Chief Risk Of-
ficers by Group Risk. Moreover, the Group Chief Risk Officer must be
consulted on decisions regarding the staffing, objectives, and perfor-
mance evaluation of local Chief Risk Officers.
Group Finance and Risk Committee
For more information please refer to the paragraph "Risk Commit-
tee" of the Supervisory Board Report on > page 7.
The Risk Committee reports to the Supervisory Board, where the infor-
mation and the findings are discussed with the Board of Management.
It monitors the effectiveness of the Allianz risk management frame-
work. Furthermore, it focuses on risk-related developments as well as
general risks and specific risk exposures.
To ensure the sustainability of our performance, we have set our-
selves non-financial health targets: For customer loyalty, our ambition
is for more than 75% of the business segments of our entities to be or
become rated by their customers as loyalty leader or above-market in
terms of Net Promoter Score (NPS). In terms of employee engage-
ment, our ambition is to have the Inclusive Meritocracy Index above
73%. At the same time, we have also set a number of sustainability tar-
gets such as the reduction of our carbon footprint, the reduction of
greenhouse gases, and a step-by-step plan to achieve net-zero com-
pliant asset allocation by 2050 at the latest.
76
Annual Report 2019 - Allianz Group
C_Group Management Report
OUR BUSINESS STRATEGY
To implement these strategic objectives, we have defined a number of
strategic priorities, and are implementing initiatives and programs to
address the five dimensions of our Renewal Agenda.
-
-
-
True Customer Centricity: Design intuitive products and processes
to achieve loyalty leadership in our core markets.
Digital by Default: Build legacy-free platforms with core processes
automation.
Technical Excellence: Move to data-driven product design, pricing,
and claims handling.
Growth Engines: Systematically exploit new sources for profitable
growth.
Inclusive Meritocracy: We reinforce a culture where both people
and performance matter.
The Board of Management of Allianz SE has also defined a strategy
for the management of risk. This risk strategy places particular empha-
sis on protecting the Allianz brand and reputation, remaining solvent
even in the event of extremely adverse scenarios, maintaining suffi-
cient liquidity to meet financial obligations, and providing resilient
profitability.
Opportunities
Our financial strength, coupled with ongoing transformation, renders
us resilient and allows us to profit from new opportunities in a fast-
changing business environment. Examples:
By combining close customer understanding and evolving data an-
alytics techniques, we provide superior insurance products and
extend tailor-made services offerings as well as raising productivity.
As a diversified financial group that is active in over 70 countries,
we can innovate locally, then spread ideas and best practice
across the Group in order to exploit economies of scale.
We seek to grow in fast-growing regions, including Asia-Pacific,
and want to profit from consolidation in Europe.
We are building expertise and business models to profit from new
risk pools, including cyber risk (insurance, risk mitigation, and re-
covery services) and mobility fleets.
As the world's population ages, we are improving our offerings in
the retirement savings markets.
In a continuously evolving market where the demands of customers
constantly change, our knowledge of the industry and our expertise in
product development and risk management offers us great
opportunities to create customer-focused solutions. For further details
on opportunities envisaged by the Allianz Group in the various seg-
ments, please refer to Outlook 2020.
RISK GOVERNANCE STRUCTURE
SUPERVISORY BOARD AND BOARD OF
MANAGEMENT
Allianz's approach to risk governance permits integrated manage-
ment of local and global risks and ensures that our risk profile remains
consistent with both our risk strategy and our capacity to bear risks.
Within our risk governance system, the Supervisory Board and
Board of Management of Allianz SE have both Allianz SE and group-
wide responsibilities. The Board of Management formulates business
objectives and a corresponding risk strategy; the core elements of the
risk framework are set out in the Allianz Group Risk Policy and
approved by the Board of Management. The Supervisory Board ad-
vises, challenges, and supervises the Board of Management in the ex-
ecution of its management activities. The following committees
support the Board and the Supervisory Board on risk issues:
Supervisory Board Risk Committee
Rebalance: We seek to build market-leading positions in large,
profitable, and fast-growing geographies as well as in new areas
of business.
(1,109)
Definition: policyholder participation³
43
74
Annual Report 2019 - Allianz Group
C_Group Management Report
Life/Health insurance operations
OPERATING PROFIT
The reconciling item scope comprises the effects from out-of-scope
entities in the profit sources reporting compilation. Operating profit
from operating entities that are out of scope is included in the invest-
ment margin. Currently, 22 entities - comprising the vast majority of
Life/Health total statutory premiums - are in scope.
EXPENSES
Expenses comprise acquisition expenses and commissions as well as
administrative and other expenses.
The delta shown as definitions in acquisition expenses and com-
missions represents commission clawbacks, which are allocated to the
technical margin. The delta shown as definitions in administrative and
other expenses mainly represents restructuring charges, which are
stated in a separate line item in the Group income statement.
Acquisition, administrative, capitalization, and amortization of DAC¹
IMPACT OF CHANGE
IN DEFERRED ACQUISITION COSTS (DAC)
1 Since 2019, total revenues in Property-Casualty include fee and commission income. Prior year figures were adjusted
accordingly.
"Impact of change in DAC" includes the effects of changes in DAC, un-
earned revenue reserves (URR), and value of business acquired
(VOBA). As such, it is the net impact of the deferral and amortization
of acquisition costs and front-end loadings on operating profit.
URR amortized: total amount of URR amortized includes sched-
uled URR amortization, true-up, and unlocking.
Both capitalization and amortization are included in the line item
premiums earned (net) in the Group income statement.
Policyholder participation is included in "Change in our
reserves for insurance and investment contracts (net)" in the Group in-
come statement.
Reconciliation to Notes to the Consolidated Financial Statements¹
€ mn
2019
2018
€ mn
Acquisition expenses and commissions²
(5,570)
(5,219)
2019
URR capitalized: capitalization amount of unearned revenue re-
serves (URR) and deferred profit liabilities (DPL) for FAS 97 LP.
1 Includes trading income.
132,283
142,369
73
96
95
Income from financial assets and liabilities carried at fair
value through income (net)¹
Fee and commission income
575
Other income
3
3
576
577
4
Interest expenses, excluding interest expenses from
external debt
(21)
(24)
Fee and commission expenses
(394)
(382)
Consolidation effects within Corporate
and Other
1
Consolidation
(616)
(575)
Allianz Group total revenues
2018
Administrative and other expenses²
(1,821)
(1,824)
625
564
Commissions and profit received on reinsurance business ceded
95
84
Definition: policyholder participation³
1,210
1,063
Administrative expenses on reinsurance business ceded
9
14
Scope
124
27
Acquisition and administrative expenses (net)³
(6,449)
(5,635)
Capitalization of DAC
3,772
3,483
Amortization, unlocking, and true-up of DAC²
1_Prior year figures have been changed in order to reflect the roll-out of profit source reporting to Mexico.
2_As per Group Management Report.
(1,570)
(1,795)
3_As per notes to the Consolidated Financial Statements.
Definition: URR amortized
38
Definition: URR capitalized
consisting of:
(281)
Scope
Acquisition expenses and commissions²
(5,570)
(5,219)
Capitalization of DAC²
1,813
1,829
Definitions
Scope
Acquisition costs incurred
Capitalization of DAC²
13
12
Amortization, unlocking, and true-up of DAC²
(1,570)
(1,795)
(261)
(134)
Acquisition and administrative expenses
(7,148)
(7,008)
(5,818)
(5,341)
Definitions
941
1,557
1,813
1,829
(345)
1_This does not include non-controlling interests of €3,363 mn and €2,447 mn as of 31 December 2019 and 31 Decem-
ber 2018, respectively. For further information, please refer to note 19 to the Consolidated Financial Statements.
Risk capital related to our European banking operations is allo-
cated to the Corporate and Other business segment and calculated
based on the approach applied by banks in accordance with the local
requirements resulting from the Basel regulation (Basel standards). As
the capital requirements for the banking business are only approxi-
mately 0.9% (2018: 0.9%) of our total pre-diversified Group Solvency
Capital Requirement, risk management for the banking operations is
not discussed in greater detail.
11,070
EQUITY RISK
The Group's insurance-focused operating entities may hold equity
investments to diversify their portfolios and take advantage of ex-
pected long-term returns. Strategic asset allocation benchmarks and
investment limits are used to manage and monitor these exposures. In
addition, equity investments fall within the scope of the credit risk plat-
form to avoid single-name risk concentrations. Risks from changes in
equity prices are normally associated with decreasing share prices and
increasing equity price volatilities. As stock markets might also
increase, opportunities may arise from equity investments.
CREDIT SPREAD RISK
Fixed-income assets such as bonds may lose value if credit spreads
widen. However, our risk appetite for credit spread risk takes into
account the underlying economics of our business model: As a liability-
driven investor, we typically hold fixed-income assets until maturity.
This implies that short-term changes in market prices do not affect us.
In our capacity as a long-term investor, this gives us the opportunity to
invest in bonds yielding spreads over the risk-free return and earning
this additional yield component.
1_The return on risk capital is defined as the present value of future real world profits on the capital requirement (including
buffer to regulatory requirements) held at local level.
2_Internal pensions are evaluated and modelled based on deterministic models, following IAS19 principles.
As an insurance company, we are exposed to changing inflation rates,
predominantly due to our Non-Life insurance obligations but also due
to inflation-indexed internal pension obligations. While inflation
assumptions are taken into account in our product development and
pricing, unexpected inflation increases both future claims and
expenses, leading to high liabilities; conversely, if future inflation rates
were to be lower than assumed, liabilities would be lower than antici-
pated. The risk of changing inflation rates is incorporated in our inter-
nal model.
Annual Report 2019 - Allianz Group
C_Group Management Report
CURRENCY RISK
Our operating entities typically invest in assets which are denominated
in the same currency as their liabilities; however, some foreign currency
exposures are allowed to support portfolio diversification and tactical
investment decisions. Our largest exposure to foreign currency risk
comes from our ownership of non-Euro entities: Whenever the Euro
strengthens, the Euro equivalent net asset value of our foreign sub-
sidiaries will decline from a Group perspective; however, at the same
time the capital requirements in Euro will decrease, partially mitigating
the total impact on Group capitalization. Based on our foreign ex-
change management limit framework, currency risk is monitored and
managed at both the local and Group level.
REAL ESTATE RISK
Despite the risk of decreasing real estate values, real estate is a suita-
ble addition to our investment portfolio due to good diversification
benefits as well as to the contribution of relatively predictable, long-
term cash flows.
The Allianz's Group Investment Committee has defined a frame-
work for standard transactions for real estate equity and commercial
real estate loan investments. These standards outline diversification
targets, minimum-return thresholds, and other qualitative and quanti-
tative requirements. All transactions that do not meet these standards
or have a total investment volume (including costs) exceeding a
defined threshold must be reviewed individually by Group Risk and
other Group center functions. In addition, all applicable limits must be
respected, in particular those resulting from strategic asset allocation
as well as its leeways and risk limits, with regards to an investing entity's
portfolio.
79
INFLATION RISK
Allianz is a liability-driven investor. We may suffer an economic loss in
the event of falling interest rates as we reinvest maturing assets at
lower rates prior to the maturity of liability contracts, if the duration of
our assets is shorter than our liabilities. This risk is higher for long-dated
life investment and savings products as well as for internal pensions,
with a significant part of the Life/Health business segment's interest
rate risk coming from Western Europe, mainly from traditional life in-
surance products with guarantees. Conversely, opportunities may arise
when interest rates increase, as this may result in returns from reinvest-
ments being higher than the rates guaranteed. Interest rate risk is man-
aged within our asset/liability management process and controlled via
interest rate sensitivity and duration mismatch limits for the Group and
the local entities.
INTEREST RATE RISK
3,824
3,911
3,863
11,211
4,976
4,917
18,928
C_Group Management Report
Allianz steers its portfolio taking a comprehensive view at risk and
return, which is based on the internal model and includes scenario
analysis: Risk and concentrations are actively restricted by limits based
on our internal model and there is a comprehensive analysis of the
return on risk capital¹ (RORC). RORC allows us to identify profitable
lines of business and products on a sustainable basis, reflecting the
capital commitment over the life time of the products, and is a key cri-
terion for capital allocation decisions.
As a consequence, the internal model is fully integrated in busi-
ness steering and its application satisfies the so-called "use test"
requirement under Solvency II.
MARKET RISK
As an inherent part of our insurance operations, we collect premiums
from our policyholders and invest them in a wide variety of assets; the
resulting investment portfolios back the future claims payments and
benefits to our customers. In addition, we also invest shareholders' cap-
ital, which is required to support the business. Finally, we use deriva-
tives, mostly to hedge our portfolio against adverse market move-
ments (for example, protective puts) or to reduce our reinvestment risk
(for example, by using forwards, swaps, or swaptions). Asset/liability
management (ALM) decisions are taken based on the internal model,
considering both the risks and the returns on the financial market.
As the fair values of our investment portfolios and liabilities
depend on the changes observed in the financial markets, we are
exposed to the risk of adverse financial market developments. The
long-dated liabilities in our Life/Health business segment and those
attributable to internal pensions contribute to interest rate risk, in par-
ticular if they cannot be fully matched by available investments due to
long maturities. In addition, we are also exposed to adverse changes
in equity and real estate prices, credit spread levels, inflation, implied
volatilities, and currencies, which might impact the value of our portfo-
lios.
To measure these market risks, real-world stochastic models² for
the relevant risk factors are calibrated using historical time series to
generate possible future market developments. After the scenarios for
all the risk factors are generated, the asset and liability positions are
revalued under each scenario. The worst-case outcome of the sorted
portfolio profit and loss distribution at a certain confidence level
(99.5%) defines the market Value at Risk (VaR). For entities modeled
using the standard formula, the market risk is based on aggregating
the losses under specified standard formula shocks.
Strategic asset allocation benchmarks and risk limits, including
financial VaR, stand-alone interest rate and equity sensitivity limits,
and foreign exchange exposure limits, are defined for the Group and
related undertakings. Limits are closely monitored and, if a breach
occurs, countermeasures are implemented which may include escala-
tion to the respective decision-making bodies and/or the closing of
positions. Furthermore, we have put in place standards for hedging
activities, due to the exposure to fair-value options embedded in our
life insurance products. Finally, guidelines are provided by the Group
regarding certain investments, new investment products, and the use
of derivatives. Compliance with these guidelines is controlled by the
respective risk and controlling functions.
CREDIT RISK
3,873
Credit risk is measured as the potential economic loss in the value of
our portfolio that would result from either changes in the credit quality
of our counterparties ("migration risk") or the inability or unwillingness
of a counterparty to fulfill contractual obligations ("default risk").
ance.
Premium risk is subdivided into three categories: natural catastro-
phe risk, terror risk, and non-catastrophe risk including man-made
catastrophes.
Premium risk is estimated based on actuarial models that are
used to derive loss distributions. Non-catastrophe risks are modeled
using frequency and severity models for large losses and aggregate
loss distribution models for attritional losses. Natural disasters such as
earthquakes, storms, and floods represent a significant challenge for
risk management due to their accumulation potential and occurrence
volatility. For natural catastrophe risks, we use special modeling tech-
niques which combine portfolio data (geographic location, character-
istics of insured objects, and their values) with simulated natural disas-
ter scenarios to estimate the magnitude and frequency of potential
losses. Where such stochastic models do not exist, we use deterministic,
scenario-based approaches to estimate potential losses. Similar
approaches are used to evaluate risk concentrations for terror and
man-made catastrophes, including losses from cyber incidents and in-
dustrial concentrations.
These loss distributions are then used within the internal model to
calculate potential losses with a predefined confidence level of 99.5%.
Reserve risk
Reserve risk represents the risk of adverse developments in best-esti-
mate reserves over a one-year time horizon, resulting from fluctuations
in the timing and/or amount of claims settlement. We estimate and
hold reserves for claims resulting from past events that have not yet
been settled. In case of unexpected developments, we will experience
a reserve gain or loss dependent on the assumptions applied for the
estimate.
Similar to premium risk, reserve risk is calculated based on actu-
arial models. The reserve distributions derived are then used within the
internal model to calculate potential losses based on a predefined
confidence level of 99.5%.
As part of our Property-Casualty business operations, we receive pre-
miums from our customers and provide insurance protection in return.
Premium risk is the risk that actual claims for the business in the current
year develop adversely relative to expected claims ratios. Premium risk
can be mitigated by reinsurance as well as by technical excellence in
underwriting. Assessing risks as part of the underwriting process is a
key element of our risk management framework. There are clear
underwriting limits and restrictions which are defined centrally and
applied across the Group.
In order to reduce the risk of unexpected reserve volatility, our
operating entities constantly monitor the development of reserves for
insurance claims on a line-of-business level. In addition, operating
entities generally conduct annual reserve uncertainty analyses based
on similar methods used for reserve risk calculations. The Allianz Group
performs regular independent reviews of these analyses and Group
representatives participate in the local reserve committee meetings.
Underwriting risks in our Life/Health operations (biometric risks)
include mortality, disability, morbidity, and longevity risks. Mortality,
disability, and morbidity risks are associated with the unexpected
increase in the occurrence of death, disability, or medical claims. Lon-
gevity risk is the risk that the reserves covering life annuities and group
pension products might not be sufficient due to longer life expectan-
cies of the insured.
Life/Health underwriting risk arises from profitability being lower
than expected. As profitability calculations are based on several
parameters - such as historical loss information and assumptions on
inflation, mortality, or morbidity – realized parameters may differ from
the ones used for underwriting. For example, higher-than-expected
inflation may lead to higher medical claims in the future. However,
beneficial deviations are also possible; for example, a lower morbidity
rate than expected will most likely result in lower claims in income pro-
tection products.
We measure these risks within our internal model, distinguishing,
where appropriate, between risks affecting the absolute level and
trend development of the actuarial assumptions on the one hand and
pandemic risk scenarios on the other. Depending on the nature and
complexity of the risk involved, our health business is represented in the
internal model according to Property-Casualty or Life/Health calcula-
tion methods and is therefore included in the relevant Property-Casu-
alty and Life/Health figures accordingly. However, most of our health
business is attributable to the Life/Health business segment.
BUSINESS RISK
Business risks include cost risks and policyholder behavior risks. They
are mostly driven by the Life/Health business and to a lesser extent by
the Property-Casualty business. Cost risks are associated with the risk
that expenses incurred in administering policies are higher than
expected or that new business volume decreases to a level that does
not allow Allianz to absorb its fixed costs. Business risk is measured
relative to baseline plans.
For the Life/Health business, policyholder behavior risks are risks
related to the unpredictable, adverse behavior of policyholders in
exercising their contractual options, such as, for instance, early termi-
nation of contracts, surrenders, partial withdrawals, renewals, and
annuity take-up options.
LIFE/HEALTH
Premium risk
Our Property-Casualty insurance businesses are exposed to premium-
risk-related adverse developments in the current year's new and
renewed business as well as to reserve risks related to the business in
force.
PROPERTY-CASUALTY
Investment portfolio: Credit risk results from our investments in
fixed-income bonds, loans, derivatives, cash positions, and receiv-
ables whose value may decrease depending on the credit quality
of the obligor. However, losses due to credit events can be shared
with the policyholder for certain life insurance products.
Credit insurance: Credit risk arises from potential claim payments
on limits granted by Euler Hermes to its policyholders. Euler
Hermes insures its policyholders against credit risk associated with
short-term trade credits advanced to clients of the policyholder.
When the client of the policyholder is unable to meet its payment
obligations, Euler Hermes indemnifies the loss to the policyholder.
Reinsurance: Credit risk arises from potential losses from non-
recoverability of reinsurance receivables or due to default on ben-
efits under in-force reinsurance treaties. Our reinsurance partners
are carefully selected by a dedicated team. Besides focusing on
companies with strong credit profiles, we may also require letters
of credit, cash deposits, or other financial measures to further
mitigate our exposure to credit risk.
The internal credit risk capital model takes into account the major
determinants of credit risk for each instrument, including exposure at
default, rating, seniority, collateral, and maturity. Additional parame-
ters assigned to obligors are migration probabilities and obligor asset
correlations reflecting dependencies within the portfolio. Ratings are
assigned to single obligors via an internal rating approach. It is based
on long-term ratings from rating agencies, which are dynamically
adjusted using market-implied ratings and the most recent qualitative
information available.
The loss profile of a given portfolio is obtained through Monte
Carlo simulation, taking into account interdependencies and exposure
concentrations per obligor segment. The loss profiles are calculated at
different levels of the Allianz Group, and then fed into the internal
model at each level for further aggregation across sources of risk to
derive diversified credit risk.
Our credit insurance portfolio is modeled by Euler Hermes, based
on a proprietary model component which is a local adaptation of the
central internal credit risk model. Euler Hermes' loss profile is inte-
grated in the Group's internal credit risk model to capture the concen-
tration and diversification effects.
To ensure effective credit risk management, credit VaR limits are
derived from our internal risk capital framework, and rating bucket
benchmarks are used to define our risk appetite for exposures in the
lower investment grade and non-investment-grade area.
Our group-wide country and obligor group limit management
framework (CRISP1) allows us to manage counterparty concentration
risk, covering both credit and equity exposures at the Group and oper-
ating-entity levels. This limit framework forms the basis for discussions
on credit actions and provides notification services featuring the quick
and broad communication of credit-related decisions across the
Group.
Clearly defined processes ensure that exposure concentrations
and limit utilizations are appropriately monitored and managed. The
setting of country and obligor exposure limits from the Group's per-
spective (i.e. the maximum concentration limit) takes into account the
Allianz Group's portfolio size and structure as well as our overall risk
strategy.
1 Credit Risk Platform
80
80
Annual Report 2019 - Allianz Group
C_Group Management Report
UNDERWRITING RISK
Underwriting risk consists of premium and reserve risks in the Property-
Casualty¹ business segment as well as biometric risks in the
Life/Health² business segment. Underwriting risks are not relevant for
the Asset Management business segment and our banking opera-
tions.
The Group's credit risk profile originates from three sources: our invest-
ment portfolio, our credit insurance business, and our external reinsur-
(11,432)
(11,491)
31,279
Finally, the potential for a multiplicity of different regulatory
regimes, capital standards, and reporting requirements will increase
operational complexity and costs.
Therefore, future Solvency II Capital Requirements might change
depending on the outcome of the 2020 review of the Solvency II frame-
work by EIOPA. Concrete effects of the Solvency II review for the Group,
however, can only be assessed after final results are available.
In addition, the EU Commission has commissioned EIOPA to carry
out investigations into the upcoming review of the Solvency II directive
in 2020. The order contains an extensive list of topics from a wide vari-
ety of areas, from capital requirements to reporting and on to propor-
tionality. Based on a holistic impact study to be carried out in
March 2020, EIOPA will carry out impact assessments and submit its
recommendations to the European Commission by 30 June 2020. Ac-
cording to the required trilog negotiations at European level as well as
transposition into national law, final implementation is not expected
before 2022. In this context, the Allianz Group actively participates in
discussions with the EU Commission, EIOPA, local regulators, Insurance
Europe, and GDV.
As Solvency II became effective in 2016, our approved internal model
has been applied since the beginning of that year. There is still some
uncertainty about future regulatory requirements, as potential future
capital requirements for Internationally Active Insurance Groups (so-
called IAIG) as well as Global Systemically Important Insurers (so-
called G-SIIs) are yet to be finalized by the International Association of
Insurance Supervisors (IAIS).
REGULATORY DEVELOPMENTS
Even under conservative assumptions (driven by assumed adverse
financial market developments), the Group will remain well-capi-
talized.
MANAGEMENT ASSESSMENT
No issues are expected regarding derivatives, as we are in the pro-
cess of shifting our derivatives to EU markets as appropriate. In
addition, we expect that all outstanding derivatives will be valid
for a reasonable time period post Brexit.
Based on our assessments, the Allianz Group is well prepared for the
Brexit and confident that it will have only minimal direct impact on
both the Group and its activities. This is because our insurance, asset
management, and investment management entities have taken ac-
tions to ensure that they will be in a position to handle various Brexit
scenarios. Examples:
Political risk is the risk that returns could suffer as a result of political
changes or instability in a country, a region, or globally. One current
example is the Brexit (i.e., the withdrawal of the United Kingdom from
the European Union). The Allianz Group is exposed to it through busi-
ness and insurance / derivative contract continuity risk, and the impact
on earnings and solvency.
Risk caused by Brexit in the United Kingdom
C_Group Management Report
Annual Report 2019 - Allianz Group
86
Allianz insurance and asset management entities will be able to
continue coverage and services by using legal possibilities such as
temporary permission, run-off regimes, and/or branch solutions,
depending on the respective business case.
The Allianz Group's management feels comfortable with the Group's
overall risk profile, and confident that the effectiveness of its risk
management framework meets both the challenges of a rapidly
changing environment and day-to-day business needs. This
confidence is based on several factors:
Due to its effective capital management, the Allianz Group is well
capitalized and has met its internal, rating agency, and regulatory
solvency targets as of 31 December 2019. Allianz remains one of
the most highly rated insurance groups in the world, as reflected
by our external ratings.
Allianz is well positioned to deal with potentially adverse future
events - due, in part, to our strong internal limit framework, stress
testing, internal model, and risk management practices.
The Group has a conservative investment profile and disciplined
business practices in the Property-Casualty, Life/Health, and Asset
Management business segments, leading to sustainable
operating earnings with a well-balanced risk-return profile.
Finally, the Group has the additional advantage of being well-
diversified, both geographically and across a broad range of
businesses and products.
212
%
33.5
39.5
€bn
76.8
84.0
€ bn
2018
2019
As of 31 December
Own Funds
Capital requirement
Capitalization ratio
€ mn
Allianz Group: Solvency II regulatory capitalization
The Allianz Group's Own Funds and capital requirements are based on
the market value balance sheet approach, which is consistent with the
economic principles of Solvency II¹. Our regulatory capitalization is
shown in the following table.
SOLVENCY II REGULATORY CAPITALIZATION
98
Financial markets are characterized by historically low interest rates
and risk premiums, causing some investors to look for higher-yielding
- and potentially higher-risk - investments. In addition to sustained low
interest rates, the challenges of implementing long-term structural
reforms in key Eurozone countries, the uncertainty about future
monetary and fiscal policies, rising populism, and increased trade
tension may lead to increasing market volatility. The increasing
reliance on digital technologies - to enhance efficiency and
competitiveness - increases the risk of cyber attacks, data breaches,
and system failures. There is also the risk of noncompliance with
increasing regulation covering IT-related business processes. This could
be accompanied by a flight to quality, combined with falling equity
and bond prices due to rising spread levels, even in the face of
potentially lower interest rates. We therefore continue to closely
monitor political and financial developments - such as the Brexit in the
United Kingdom, the potential rise of Euroscepticism, and the global
trade situation - in order to manage our overall risk profile to specific
event risks.
-
POTENTIAL RISKS IN THE FINANCIAL MARKET AND IN
OUR OPERATING ENVIRONMENT
33,679 33,487
Total Group
1,937
1,937
Sectoral requirement
3,132
3,132
Third country equivalent
1,266
1,567
Capital Add-On
(4,258)
(4,236)
Tax
31,408
1_2018 risk profile figures adjusted based on the 2019 model changes impact.
Assumptions on policyholder behavior are set in line with ac-
cepted actuarial methods and based on own historical data, where
available. If there is no historical data, assumptions are based on
industry data or expert judgment. It is used as a basis to determine the
economic impact of policyholder behavior under different scenarios
within our internal model.
2_2018 risk profile figures as reported previously. However, capital add-on, sectoral requirement and third country equivalent figures have been isolated.
MARKET RISK
Our risk profile and relative contributions changed in 2019,
predominantly due to changes in the market environment,
management actions, and regulatory and model changes. Please
refer to the section "Solvency II regulatory capitalization" for further
details.
Financial risk, especially equity risk, credit and credit spread risks
driven by assets backing long-term liabilities, which we take to
benefit from the expected risk premium. The interest rate risk has
increased due to the low interest rate environment.
Property-Casualty premium and reserve risks resulting from
natural and man-made catastrophes as well as from claims
uncertainty.
The Allianz Group is exposed to a variety of risks. The largest risks in
terms of their contribution to Allianz's risk profile are:
RISK PROFILE AND MARKET ENVIRONMENT
Allianz risk profile and management assessment
The regulatory and model changes in 2019 resulted in a € 0.2 bn
decrease of Own Funds, mainly driven by the modeling of dynamic
cost inflation at Lebensversicherungs-Aktiengesellschatft, the adjust-
ment of the UFR by -15 basis points, and the update of contract bound-
aries at Allianz Vie, partially offset by the first-time recognition of the
unallocated mathematical reserve (provision pour participation aux
excédents, PPE) as surplus funds at Allianz Vie.
IMPACT OF MODEL CHANGES ON ELIGIBLE GROUP
OWN FUNDS
The increase of the risk capital requirement of € 0.3 bn is mainly driven
by the introduction of a capital add-on to reflect not modeled cross-
effects in the surplus funds of Allianz Lebensversicherungs-Aktiengesell-
schaft.
CAPITAL ADD-ONS
The changes to these risk categories shown in the table above are
driven by minor and immaterial model changes as well as by the up-
date in the central correlation matrix.
RISKS
UNDERWRITING, BUSINESS AND OPERATIONAL
No material model change was applied to the risk capital model for
credit risk in 2019. However, minor model changes and model updates
in the credit risk model as well as model changes in other risk modules
that affect the credit risk model resulted in a decrease of credit risk by
€ 59 mn to € 4.9 bn (2018: € 5.0 bn).
CREDIT RISK
The negative effects of minor and immaterial model changes as well
as regulatory changes - mostly allocated to market risk including the
reduction in the ultimate forward rate - compensated the positive ef-
fect of the cross-effect model change. This resulted in an overall in-
crease of market risk which affected all business segments, with the
largest impact concerning the Life/Health business segment. The com-
bined impact on the total market risk of Allianz Group was an increase
of € 0.1 bn to € 19.0 bn (2018: € 18.9 bn).
In 2019, the impact of model changes to our internal model concerned
the following risk categories:
229
1 Property-Casualty is also referred to as Non-Life.
2_Life/Health is also referred to as Life.
2018²
2018¹
20182
2018¹
2018²
2018¹
2018¹
2018²
2018²
Property-Casualty
4,274
4,266
2,215
2,242
2018¹
2018²
2018¹
2018²
In all subsequent sections, the figures including model changes
will form the basis for the movement analysis of our risk profile in 2019.
85
Annual Report 2019 - Allianz Group
€ mn
C_Group Management Report
Allianz Group: Impact of regulatory and model changes - allocated risk according to the risk profile (total portfolio before non-controlling
interests)
Market risk
Credit risk
Underwriting risk
Business risk
Operational risk
Diversification
Total
As of 31 December
2018¹
10,592
The net impact of regulatory and model changes on the Sol-
vency II risk capital of the Group in 2019 was € 0.2 bn. This is mainly
driven by the positive impact of the regulatory change for the reduc-
tion in the ultimate forward rate (UFR) and a refinement of our cross-
effect modeling as well as the modeling of surplus funds in Allianz Le-
bensversicherungs-Aktiengesellschaft. This was partly offset by the in-
troduction of several minor and immaterial model changes at both the
Group and entity levels. Cross-effects are defined as the effects arising
due to the interaction between different risk categories. In addition, in
an effort to enhance its explanatory power, our approach for allocat-
ing risk capital to business segments, related undertakings, and risk
types was updated to reduce artificial volatility in risk contributions
over time. The presentation of risk capital was also updated by explic-
itly showing risk capital attributed to capital add-ons, sectoral require-
ments, and third-country equivalent entities, in line with the Solvency II
aggregation logic.
10,777
693
14,806 14,556
Corporate and Other
1,517
1,576
472
478
(6,038)
112
528
518
(848)
(940)
1,781
1,720
88
(5,913)
1,687
1,689
1,606
1,668
(4,671)
(4,513)
14,692
15,132
Life/Health
13,245
13,087
2,230
2,257
367
346
3,189
3,218
674
In 2019, our internal model was further enhanced based on regulatory
developments, model validation results, and the feedback received in
the course of our consultations with regulators.
REGULATORY AND MODEL CHANGES IN 2019
Since the internal model takes into account the change in the eco-
nomic fair value of our assets and liabilities, it is crucial to estimate the
market value of each item accurately. For some assets and liabilities it
may be difficult, if not impossible - notably in distressed financial mar-
kets - to either obtain a current market price or apply a meaningful
mark-to-market approach. For such assets we apply a mark-to-model
approach. For some of our liabilities, the accuracy of their values also
depends on the quality of the actuarial cash flow estimates. Despite
these limitations, we believe the estimated fair values are appropri-
ately assessed.
Each legal entity of the Allianz Group manages liquidity risk
locally, using asset/liability management systems designed to ensure
that assets and liabilities are adequately matched. Local investment
strategies particularly focus on the quality of the investments and
ensure a significant portion of liquid assets (e.g. high-rated govern-
ment bonds or covered bonds) in the portfolios. In the course of liquid-
ity planning, liquidity sources (e.g. cash from investments and premi-
ums) and liquidity needs (e.g. payments due to insurance claims and
expenses) are reconciled under a best-estimate plan, as well as under
idiosyncratic and systemic adverse liquidity scenarios, to allow for a
group-wide consistent view on liquidity risk. These analyses are per-
formed at legal entity level and are monitored by the Group.
An identical liquidity stress-testing framework is applied at
Allianz SE. Major contingent liquidity requirements arise mainly from
market risk scenarios for Allianz SE and its subsidiaries, from the non-
availability of external capital markets, and from reinsurance risk sce-
narios for Allianz SE.
In addition, the cash position of the Group cash pool investment
portfolio is monitored and forecast on a daily basis and is subject to an
absolute minimum amount and an absolute alert amount. Both limits
are defined for the Allianz SE cash pool in order to be protected
against short-term liquidity crises.
The strategic liquidity planning process addresses future potential
liquidity needs and manages available liquidity sources in an efficient
and effective manner. The annual and high-level three-year cash flow
plan for the Holding and Treasury reportable segment of the
82
22
Liquidity risk is defined as the risk that current or future payment obli-
gations cannot be met or can only be met on the basis of adversely
altered conditions. Liquidity risk can arise primarily if there are mis-
matches in the timing of cash in- and out-flows.
Annual Report 2019 - Allianz Group
Allianz SE reflects the overall operating, financing, and investing strat-
egy of the Allianz Group and is subject to the approval of the Board of
Management. Liquidity planning is constantly monitored and regularly
reported on to the Board of Management.
REPUTATIONAL RISK
Allianz's reputation as a well-respected and socially aware provider of
financial services is influenced by our behavior in a range of areas such
as product quality, corporate governance, financial performance, cus-
tomer service, employee relations, intellectual capital, and corporate
responsibility.
Reputational risk is the risk of an unexpected drop in the value of
the Allianz SE share price, the value of the in-force business, or the
value of future business caused by a decline in our reputation in exter-
nal stakeholders' judgment.
The identification and assessment of reputational risks is part of
the annual Top Risk Assessment process. During this process, senior
management decides on a risk management strategy for the most sig-
nificant risks facing the company, including those with a potentially se-
vere reputational impact.
The management of Environmental, Social and Governance
(ESG) risks - which are closely related to reputational risk - is sup-
ported by a dedicated Group ESG Board and Group ESG Office, 1 which
help steer the integration of ESG aspects into core investment and
insurance activities. Significant ESG and other reputational risks iden-
tified in the course of business are escalated to experts from Group
Communications and Corporate Responsibility, Group Risk, and Group
ESG for assessment and decision-making, with the GFRC acting as the
ultimate escalation/decision-making body.
C_Group Management Report
LIQUIDITY RISK
The most important strategic risks are directly addressed through
Allianz's Renewal Agenda, which focuses on five themes: True Cus-
tomer Centricity, Digital by Default, Technical Excellence, Growth
Engines, and Inclusive Meritocracy. Progress on mitigating strategic
risks and meeting the Renewal Agenda objectives is monitored and
evaluated in the course of the Strategic and Planning Dialogs between
Allianz Group and the related undertakings.
Strategic risks are identified and evaluated as part of the Group's
Top Risk Assessment process, and discussed in various Board of Man-
agement-level committees (for example GFRC). We also monitor mar-
ket and competitive conditions, capital market requirements, regula-
tory conditions, etc., to decide if strategic adjustments are necessary.
81
C_Group Management Report
OPERATIONAL RISK
Operational risks refer to losses resulting from inadequate or failed
internal processes, human errors, system failures, and external events,
and can stem from a wide variety of sources, including the following:
"Clients, Products & Business Practices": potential losses due to a
failure to meet the professional obligations or from the design of
products. Examples include misselling, non-compliance with inter-
nal or external requirements related to products, anti-trust behav-
ior, data protection, sanctions and embargoes, etc. These losses
tend to be less frequent but, when they occur, can have high finan-
cial impact.
"Execution, Delivery and Process Management": potential losses
arising from transaction or process management failures. Exam-
ples include interest and penalties from non-payment or under-
payment of taxes or losses associated with broker and agent dis-
tribution processes. These losses tend to be of a relatively higher
frequency but with little financial impact (although single large-
loss events can occur).
Other operational risks including, for example, internal or external
fraud, financial misstatement risk, a cyber security incident causing
business disruption or fines, a potential failure at our outsourcing
partners causing a disruption to our working environment, etc.
The Group's operational risk capital is dominated (more than 80%) by
the risk of potential losses within the categories "Clients, Products, and
Business Practices" and "Execution, Delivery, and Process Manage-
ment". With regard to the largest category "Clients, Products, and Busi-
ness Practices", key external drivers are changes in laws and regula-
tions. Internal drivers reflect potential failures of internal processes.
These drivers are considered in the local scenario analyses.
Operational risk capital is calculated using a scenario-based
approach based on expert judgment as well as internal and external
operational loss data. The estimates for frequency and severity of
potential loss events for each material operational risk category are
assessed and used as a basis for our internal model calibration.
Allianz has developed a consistent operational risk management
framework, which is applied across the Group based on proportional-
ity and focuses on the early recognition and proactive management of
material operational risks. The framework defines roles and responsi-
bilities as well as management processes and methods: Local risk
managers, in their capacity as the "Second Line of Defense", identify
and evaluate relevant operational risks and control weaknesses via a
dialog with the "First Line of Defense", report operational risk events in
a central database, and ensure that the framework is implemented in
their respective operating entity.
This framework triggers specific mitigating control programs. For
example, compliance risks are addressed with written policies and
dedicated compliance programs monitored by the Group Compliance
function at Allianz Group. The risk of financial misstatement is miti-
gated by a system of internal controls covering financial reporting.
Outsourcing risks are covered by our Outsourcing Policy, Service Level
Agreements, and Business Continuity and Crisis Management pro-
grams to protect critical business functions from these events. Cyber
risks are mitigated through investments in cyber security, cyber insur-
ance that Allianz buys from third-party insurers, and a variety of ongo-
ing control activities.
OTHER RISKS NOT MODELED IN THE INTERNAL
MODEL
There are risks which, due to their nature, cannot be adequately
addressed or mitigated by setting aside dedicated capital and are
therefore not considered in the internal model. For the identification,
analysis, assessment, monitoring, and management of these risks we
also use a systematic approach, with risk assessment generally based
on qualitative criteria or scenario analyses. The most important of
these other risks are strategic, liquidity, and reputational risk.
STRATEGIC RISK
Strategic risk is the risk of a decrease in the company's value that will
arise from adverse management decisions on business strategies and
their implementation.
Internal risk capital framework
We define internal risk capital as the capital required to protect us
against unexpected, extreme economic losses, and which forms the
basis for determining our Solvency II regulatory capitalization. On a
quarterly basis, we calculate and consistently aggregate internal risk
capital across all business segments. We also project risk capital
requirements on a bi-weekly basis during periods of financial market
turbulence.
GENERAL APPROACH
For the management of our risk profile and solvency position, we utilize
an approach that reflects the Solvency II rules in that it comprises our
approved internal model and covers all major insurance operations.
Other entities are reflected based on standard formula results, others
under the deduction and aggregation approach as well as on sectoral
or local requirements for non-insurance operations, in accordance with
the Solvency II framework.
DIVERSIFICATION AND CORRELATION ASSUMPTIONS
Our internal model considers concentration, accumulation, and corre-
lation effects when aggregating results at the Group level. The result-
ing diversification reflects the fact that all potential worst-case losses
are not likely to materialize at the same time. As we are an integrated
financial services provider offering a variety of products across differ-
ent business segments and geographic regions, diversification is key to
our business model.
Diversification typically occurs when looking at combined risks
that are not, or only partly, interdependent. Important diversification
factors include regions (for example, windstorm in Australia vs. wind-
storm in Germany), risk categories (for example, market risk vs. under-
writing risk), and subcategories within the same risk category (for ex-
ample, commercial vs. personal lines of property and casualty risk). Ul-
timately, diversification is driven by the specific features of the invest-
ment or insurance products in question and their respective risk expo-
sures. For example, an operational risk event at an Australian entity
can be considered to be highly independent of a change in credit
spreads for a French government bond held by a German entity.
Where possible, we derive correlation parameters for each pair of
market risks through statistical analysis of historical data, considering
quarterly observations over more than a decade. In case historical
data or other portfolio-specific observations are insufficient or unavail-
able, correlations are set by the Correlation Settings Committee, which
combines the expertise of risk and business experts in a well-defined
and controlled process. In general, when using expert judgment we set
the correlation parameters to represent the joint movement of risks un-
der adverse conditions. Based on these correlations, we use an indus-
try-standard approach, the Gaussian copula, to determine the de-
pendency structure of quantifiable sources of risk within the applied
Monte Carlo simulation.
1_Due to late availability of EIOPA publication, the risk-free interest rate term structure used might slightly differ from the
one published by EIOPA.
84
Annual Report 2019 - Allianz Group
C_Group Management Report
ACTUARIAL ASSUMPTIONS
Our internal model also includes assumptions on claims trends, liability
inflation, mortality, longevity, morbidity, policyholder behavior, ex-
pense, etc. We use our own internal historical data for actuarial
assumptions wherever possible, additionally considering recommen-
dations from the insurance industry, supervisory authorities, and actu-
arial associations. The derivation of our actuarial assumptions is based
on generally accepted actuarial methods. Within our internal risk cap-
ital and financial reporting framework, comprehensive processes and
controls exist for ensuring the reliability of these assumptions.
MODEL LIMITATIONS
As the internal model is based on a 99.5% confidence level, there is a
low statistical probability of 0.5% that actual losses could exceed this
threshold at the Group level in the course of one year.
We use model and scenario parameters derived from historical
data, where available, to characterize future possible risk events. If
future market conditions were to differ substantially from the past, for
example in an unprecedented crisis, our VaR approach might be too
conservative or too liberal in ways that are difficult to predict. In order
to mitigate reliance on historical data, we complement our VaR anal-
ysis with stress testing.
Furthermore, we validate the model and parameters through sen-
sitivity analyses, independent internal peer reviews, and, where appro-
priate, independent external reviews, focusing on methods for select-
ing parameters and control processes. To ensure that the model is val-
idated adequately, we have established an Independent Validation
Unit (IVU) within Group Risk, responsible for validating our internal
model within a comprehensive model validation process. Any limita-
tions identified during the validation process are remedied after con-
sultation with the Group regulator. Overall, we believe that our valida-
tion efforts are effective and that the model adequately assesses the
risks to which we are exposed.
The construction and application of the replicating portfolios
mentioned are subject to the set of replicating instruments available
and might be too simple or restrictive to capture all factors affecting
the change in value of liabilities. As with other model components, the
replication framework is subject to independent validation and to suit-
ability assessments as well as to stringent data and process quality
controls. Therefore, we believe that our liabilities are adequately rep-
resented by the replicating portfolios.
We replicate the liabilities of our Life/Health insurance business. This
technique enables us to represent all product-related options and
guarantees, both contractual and discretionary, by means of standard
financial instruments. In the risk calculation, we use the replicating
portfolio to determine and revalue these liabilities under all potentially
adverse Monte Carlo scenarios.
Annual Report 2019 - Allianz Group
VALUATION ASSUMPTIONS: REPLICATING
PORTFOLIOS
In addition, we adjust the risk-free yield curves by a volatility
adjustment (VA) in most markets where a volatility adjustment is de-
fined by EIOPA and approved by the local regulator. This is done to
better reflect the underlying economics of our business, as the cash
flows of our insurance liabilities are largely predictable. The advantage
of being a long-term investor is the opportunity to invest in bonds yield-
ing spreads over the risk-free return and earning this additional yield
component over the duration of the bonds. Being a long-term investor
mitigates much of the risk of having to sell debt instruments at a loss
prior to maturity.
INTERNAL MODEL
Our internal model is based on a VaR approach using a Monte Carlo
simulation. Following this approach, we determine the maximum loss
in portfolio value in scope of the model within a specified timeframe
("holding period", set at one year) and probability of occurrence ("con-
fidence level", set at 99.5%). We simulate risk events from all risk cate-
gories ("sources of risk") modeled and calculate the portfolio value
based on the net fair value of assets minus liabilities, including risk-mit-
igating measures such as reinsurance contracts or derivatives, under
each scenario.
The risk capital required is defined as the difference between the
current portfolio value and the portfolio value under adverse condi-
tions at the 99.5% confidence level. As we consider the impacts of a
negative or positive event on all risk sources and covered businesses at
the same time, diversification effects across products and regions are
taken into account. The results of our Monte Carlo simulation allow us
to analyze our exposure to each source of risk both separately and in
aggregate. We also analyze several pre-defined stress scenarios rep-
resenting historical events, reverse stress tests, and adverse scenarios
relevant for our portfolio. Furthermore, we conduct ad-hoc stress tests
monthly to reflect current political and financial developments and to
analyze specific non-financial risks more closely.
COVERAGE OF THE RISK CAPITAL CALCULATIONS
The Allianz Group's internal model to calculate our Solvency Capital
Requirement (SCR) covers all major insurance operations². This in-
cludes both relevant assets (including fixed-income, equities, real es-
tate, and derivatives) and liabilities (including the run-off of all current
and planned technical provisions as well as deposits, issued debt and
other liabilities). For with-profit products in the Life/Health business
segment, the options and guarantees embedded in insurance con-
tracts - including policyholder behavior - are taken into account.
Smaller related undertakings in the European Economic Area
which are not covered by the internal model are reflected with their
standard formula results. At the Group level, the Solvency Capital Re-
quirements for smaller insurance undertakings outside the European
Economic Area with only immaterial impact on the Group's risk profile
are accounted for by means of book value deduction.³
1 The Allianz Environmental, Social, Governance (ESG) Board and the ESG office are constituted as advisor to the Board of
Management of Allianz SE and will further elevate environmental, social, and governance aspects in corporate govern-
ance and decision-making processes at the Allianz Group.
2_Allianz Life US is based on third-country equivalence.
3_Under book value deduction, the book value of the respective entity is deducted from eligible Own Funds of the Group.
Annual Report 2019 - Allianz Group
83
C_Group Management Report
For our Asset Management business segment, we assign internal
risk capital requirements based on sectoral regulatory capital require-
ments. The Asset Management business is affected mainly by opera-
tional risks. However, since most of our Asset Management business is
not located in the Eurozone, at Group level its participation value
bears a foreign exchange rate risk. Our Asset Management business is
covered by adequate risk controlling processes, including qualitative
risk assessments (such as the Top Risk Assessment) and regular report-
ing to the Group. As the impact on the Group's total Solvency Capital
Requirement is minor, risk management with respect to Asset Manage-
ment is not discussed in greater detail.
In view of the above, Allianz's risk capital framework covers all
material and quantifiable risks. Risks not specifically covered by the in-
ternal model include strategic, liquidity, and reputational risks.
ASSUMPTIONS AND LIMITATIONS
RISK-FREE RATE AND VOLATILITY ADJUSTMENT
When calculating the fair values of assets and liabilities, the assump-
tions regarding the underlying risk-free yield curve are crucial in deter-
mining and discounting future cash flows. For liability valuation, we
apply the methodology provided by the European Insurance and
Occupational Pensions Authority (EIOPA) as part of its technical docu-
mentation (EIOPA-BOS-15/035) to extrapolate the risk-free interest
rate curves beyond the last liquid tenor.¹
We take account of this by applying volatility adjustment to miti-
gate the credit spread risk, which we consider to be less meaningful for
long-term investors than the default risk. Allianz also models the vola-
tility adjustment dynamically within our approved internal model,
which differs from the static EIOPA VA concept applied in the standard
formula. For risk capital calculations, we assume a dynamic movement
of the volatility adjustment broadly consistent with the way the VA
would react in practice; however, we base the movement on our own
portfolio rather than the EIOPA portfolio. To account for this deviation,
Allianz applies a more conservative, reduced application ratio for the
dynamic volatility adjustment. Validation is performed regularly to
verify the appropriateness and prudency of the approach.
Total Group
The following table summarizes our Solvency II regulatory capitaliza-
tion ratios disclosed over the course of the year 2019:
31 Dec 2019
367
2,855 3,189
1,536
1,689
(4,934)
(5,913)
439
20,481 14,806
1,955
1,517
474
472
Total Group
25,446
Corporate and Other
2,230
2,726
13,245
5,632
4,274
2,283
2,215
11,529
10,592
691
674
1,602
1,606
(6,259)
(4,671)
15,478 14,692
Life/Health
17,859
19,036
5,484
4,917
127
12,095
Third country equivalent
3,218
3,132
Sectoral requirement
Total Group
2,038
1,937
39,525 33,679
1_2018 risk profile figures adjusted based on the 2019 model changes impact.
The following sections explain the evolution of our risk profile per mod-
eled risk category. All risks are presented on a pre-diversified basis and
concentrations of single sources of risk are discussed accordingly.
As of 31 December 2019, the Group diversified risk capital, which
reflects our risk profile before considering non-controlling interests,
amounted to € 39.5 bn (2018: € 33.5 bn). This represents a slight incre-
ment in the diversification benefit – before tax - of 0.4% to 23.8%. The
increase in Solvency II Capital Requirement was mainly due to market
impacts that are essentially driven by the strong decrease in interest
rates and the increase in equity indices over the year. Business evolu-
tion also increased the SCR as net earned premiums in the Property-
Casualty business segment increased and the Life/Health business
segment grew. Management actions - such as the acquisition of ADAC
Autoversicherung AG, Liverpool Victoria General Insurance Group Lim-
ited, Legal & General Insurance Limited, and Taikang - also contrib-
uted to the increase in the Capital Requirement of the Group. Some
targeted asset de-risking measures we implemented created an off-
setting effect.
88
88
Annual Report 2019 - Allianz Group
Allianz Group: Solvency II regulatory capitalization ratios
%
1,567
Property-Casualty
1,506
(5,434) (4,236)
112
406
528
(726)
(848)
2,237
1,781
11,070
3,546
3,863
3,545
3,824 (11,918)
(11,432)
38,196 31,279
Tax
Capital Add-On
2018¹
19,036
2018¹
2019
Base capitalization ratio
Interest rates up by 0.5%¹
Interest rates down by 0.5%¹
Equity prices up by 30%
Equity prices down by 30%
Combined scenario:
Equity prices down by 30%
Interest rate down by 0.5%¹
2019
2018
212
229
217
231
%
203
Allianz Group: Solvency II regulatory capitalization ratio sensitivities
the positive effects were partly offset by capital management activities
such as the share buy-back program and the dividend accrual, as well
as the acquisition of shares of Taikang and of businesses from Liver-
pool Victoria General Insurance Group Limited and Legal & General
Insurance Limited. Unfavorable market developments - predomi-
nantly characterized by lower interest rates - as well as regulatory and
model changes also contributed to the reduction of our Solvency II ratio.
Additional impacts such as taxes, changes in transferability restrictions,
and diversification effects were broadly offsetting.
30 Sept 2019
30 Jun 2019
31 Mar 2019
31 Dec 2018
Capitalization
ratio
212
202
213
218
229
Compared to year-end 2018, our Solvency II capitalization ratio
decreased by 17%-p to 212% (2018: 229 %) as the increase in Sol-
vency II Capital Requirement was only partially offset by the increase
in Own Funds. Over the course of the year, Solvency II earnings com-
bined with business growth had a positive impact on our Solvency II
capitalization. This was supported by management actions such as
asset de-risking and mitigating measures that improved our interest
rate risk profile in the current low interest rate environment. However,
1_Own Funds and capital requirement are calculated under consideration of volatility adjustment and yield curve extension,
as described in section "Risk-free rate and volatility adjustment".
Annual Report 2019 - Allianz Group
87
C_Group Management Report
The following table presents the sensitivities of our Solvency II
capitalization ratio under certain standard financial market scenarios.
226
As of 31 December
238
Operational risk
Diversification
Total
As of 31 December
2019
2019
2018¹
2019
2018¹
2019
2018¹
2019
2018¹
225
2019
Business risk
Underwriting risk
2018¹
Market risk
197
Credit risk
190
217
1_Non-parallel interest rate shifts due to extrapolation of the yield curve beyond the last liquid point in line with
Solvency II rules.
Quantifiable risks and opportunities by risk
category
This Risk and Opportunity Report outlines the Group's risk figures,
reflecting its risk profile based on pre-diversified risk figures and Group
diversification effects.
221
With the exception of the Asset Management business segment,
all business segments are exposed to the full range of risk categories.
As mentioned earlier, the Asset Management business segment is pre-
dominantly exposed to operational and market risks and to a lesser
extent to credit risk. The risk capital for the Asset Management busi-
ness segment is allocated to sectoral requirement.
The pre-diversified risk figures reflect the diversification effect
within each modeled risk category (i.e. market, credit, underwriting,
business, and operational risk) but do not include the diversification
effects across risk categories. Group diversified risk figures also capture
the diversification effect across all risk categories.
The Group diversified risk is broken down as follows:
The Allianz Group is a financial conglomerate within the scope of the
Financial Conglomerate Directive (FCD). The FCD does not impose a
materially different capital requirement on Allianz Group compared to
Solvency II.
Allianz Group: Allocated risk according to the risk profile (total portfolio before non-controlling interests)
€ mn
At the Allianz Group, we measure and steer risk based on an
approved internal model which measures the potential adverse devel-
opments of Own Funds. This results in an overview of how our risk pro-
file is distributed over different risk categories, and determines the reg-
ulatory capital requirements in accordance with Solvency II.
Publication of details of members' participation in meetings
OVERVIEW OF THE MEMBER PARTICIPATION IN SUPERVISORY BOARD AND
COMMITTEE MEETINGS FOR THE FISCAL YEAR 2020
The Supervisory Board was informed regularly and comprehensively of the committees' work.
At one meeting in the fiscal year 2020, the Nomination Committee reviewed the objectives for the composition of
the Supervisory Board and its actual composition. In addition, the preparation for the Supervisory Board elections
at the AGM 2022 was discussed in detail as was succession planning for the Supervisory Board. The nomination
of substitute candidates for the Chairperson of the Supervisory Board and the Chairpersons of the Technology
and Audit Committee in case they need to be replaced at short notice formed another focus. Subsequently,
their preparedness to step in was agreed with the substitute candidates and first conversations with potential
succession candidates were held.
The Technology Committee held two meetings in the fiscal year 2020 in which it continued to discuss the compre-
hensive IT transformation. In its first meeting, in addition to an update on the IT strategy, the committee looked in
particular at Allianz's "Data Fitness" - a program that analyses the completeness, quality and accessibility of data.
In addition, the committee discussed how to deal with disruptive trends in a forward-looking way and how to
integrate them into the business model. In the second meeting, the Technology Committee discussed the progress
of key strategic IT transformation initiatives, such as the implementation of the Business Master Platform (BMP),
the legacy system decommissioning strategy, and infrastructure modernization. In this context the external
evaluation of the status of the implementation of the transformation measures was presented and discussed.
Furthermore, against the background of the many initiatives, the objectives and planning for the next three years
were discussed.
In addition, special regulatory topics, such as the EIOPA review of Solvency II, as well as business strategy topics,
such as the further development of the life insurance business, the realignment of industrial insurance, the product
governance in the property insurance business and the effects of the strong volatility on the capital market on
financial investments were discussed. The link of the business strategy and the risk strategy was
reviewed in depth in the Supervisory Board meeting on 10 December 2020.
8
Annual Report 2020 - Allianz Group
7
The Risk Committee held two meetings in 2020, in March and September. In both meetings, the committee
discussed the current risk situation of the Allianz Group and Allianz SE with the Board of Management. In the
March meeting, the risk report and other risk-related statements in the annual Allianz SE and consolidated
financial statements as well as management and group management reports were reviewed with the auditor
and approved. The Audit Committee was recommended to include the Risk Report as presented in the Annual
Report. The appropriateness of the early risk recognition system at Allianz SE and Allianz Group and the result
of further risk assessments by the auditor were discussed. The committee took a detailed look at the risk strategy,
including risk appetite and capital management, the external rating as well as the effectiveness of the risk
management system for the Allianz Group and Allianz SE. Other matters for discussion were the report on Allianz's
own risk and solvency assessment (ORSA), and the changes to the internal Solvency II model. Moreover, the Risk
Committee intensively discussed the consequences of the COVID-19 pandemic with regard to business develop-
ment and the risk situation. In this context, the quality of the solvency model and the calculation of the corre-
sponding sensitivities were discussed. In addition, at the request of the Risk Committee, the Board of Management
reported on various measures already implemented and possible further measures to safeguard the solvency ratio.
The Audit Committee held six regular meetings in 2020. In the presence of the auditors, the committee discussed
both Allianz SE's annual financial statements and the Allianz Group's consolidated financial statements as well as
the management and auditor's reports and the half-yearly financial report. These reviews revealed no reasons for
objection. The Board of Management reported on the quarterly results and discussed them in detail with the Audit
Committee together with the results of the auditor's review. One focus of the Audit Committee's activities was the
regular review of the impact of the COVID-19 pandemic on all areas of the Allianz Group. In this context, the Audit
Committee held an additional extraordinary meeting in May and dealt with the withdrawal of the profit target for
2020 by the Board of Management and the proposal for the appropriation of net earnings submitted to the AGM.
Furthermore, it prepared the engagement of the external auditor and defined key audit areas for the 2020 finan-
cial year and assessed the quality of the audit. The committee also discussed the awarding of non-audit services
to the auditor and approved an updated positive list of pre-approved audit and non-audit services. In addition, it
discussed in depth the compliance system, the internal audit system, and the financial reporting processes as well
as the respective internal controls and held intensive discussions with the Board of Management on short and
midterm measures to improve and further develop systems and processes. At all regular meetings reports on legal
and compliance issues in the Group, including lawsuits filed against Allianz Global Investors in a court in New York,
as well as on the work of the Internal Audit department were discussed in detail. Furthermore, the head of the
actuarial function (Group Actuarial, Planning & Controlling) presented his annual report. In addition, the Audit
Committee discussed the internal audit plan for 2021 and had the head of the Group Taxation Department
explain the processes and procedures for tax compliance.
The Personnel Committee held six meetings in 2020 and dealt in detail with the succession to the Board of Manage-
ment for Dr. Mascher and Mr. Peiris as well as the extension to the mandates of Mr. Balbinot, Mr. de la Sota and
Mr. Terzariol. Other key topics included the preparatory review of the Board of Management's remuneration
system, target achievement of the Board of Management members in the financial year 2019, and the definition
of the targets for the 2021 variable remuneration. The committee also looked at various mandate matters of
individual board members and at further succession planning for the Board of Management.
Presence
The Standing Committee held five meetings in 2020 and adopted two written resolutions. In doing so, the
Committee primarily dealt with corporate governance topics, the preparations for the AGM, the Supervisory Board
self-evaluation as required by supervisory law and associated development plan, and the efficiency review of the
Supervisory Board. Collective and, if necessary, individual trainings are continuously carried out as part of the
implementation of the development plan. In addition, the Standing Committee has passed resolutions approving
the granting of loans to senior executives. In November, the Standing Committee gave its approval by written
procedure to the exclusion of subscription rights in connection with the issue of certain financial instruments
(Perpetual Fixed Rate Resettable Restricted Tier 1 bonds).
A To our Investors
%
Martina Grundler
%
៖៖៖៖៖
7/7 100
Sophie Boissard
Jean-Claude Le Goaër
7/7 100
Jim Hagemann Snabe (Vice Chairman)
Michael Diekmann
7/7 100
Gabriele Burkhardt-Berg (Vice Chairwoman)
Dr. Friedrich Eichiner (Chairman)
Sophie Boissard
7/7 100
Michael Diekmann (Chairman)
SUPERVISORY BOARD
AUDIT COMMITTEE
PLENARY SESSIONS OF THE
Presence
The Supervisory Board has formed various committees in order to perform its duties efficiently. The committees
prepare the consultations in plenary sessions as well as the adoption of resolutions. They can also adopt their own
resolutions. The composition of the committees can be found in the Statement on Corporate Management.
Sincerely yours,
A_To our Investors
Other focal points of reporting, in addition to the status and impact of the COVID-19 pandemic, were strategic
topics such as the implementation of the Allianz strategy "Simplicity Wins" with its three pillars "Outperform",
"Transform" and "Rebalance", the risk strategy, the Allianz Customer Model (ACM), and the IT strategy. In addition,
the Supervisory Board was intensively involved in the Board of Management's planning for both the fiscal year
2021 and the three-year period from 2021 to 2023. Cyber risk security and developments of the life insurance
business in the continuous low-interest environment were also regularly discussed. Implications of Brexit for Allianz
and the trade conflict between the United States and China were other ongoing topics. Furthermore, the Supervisory
Board dealt in depth with personnel matters relating to the Board of Management, the requirements of the new
German Corporate Governance Code, which came into effect in 2020, and the Act Implementing the Second
Shareholders' Rights Directive (ARUG II). Further, the Supervisory Board discussed the sustainability concept (ESG
concept) of the Allianz Group with the Board of Management and debated its adequate treatment in the context
of the work of the Supervisory Board.
In all of the meetings in 2020, the Board of Management reported on Group revenues and results as well as busi-
ness developments in the individual business segments. The Board of Management informed the Supervisory
Board on the course of business as well as on the development of Allianz SE and the Allianz Group, including
deviations in actual business developments from the planning. In this context, the adequacy of capitalization, the
solvency ratio, and the respective stress and risk scenarios were discussed. The annual Allianz SE and the Group's
consolidated financial statements including the respective auditor's reports, the half-yearly as well as the quarterly
reports were reviewed in detail by the Supervisory Board after preparation by the Audit Committee.
In the financial year 2020, the Supervisory Board held six regular meetings as well as one extraordinary meeting.
The regular meetings took place in February, March, May, June, September, and December, and the extraordinary
meeting took place in April.
OVERVIEW
During the financial year 2020, the Supervisory Board fulfilled all its duties and obligations as laid out in the
company statutes and applicable law. It monitored the activities of the company's Board of Management, dealt
with the succession planning for the Board of Management and advised it on business management issues. The
Supervisory Board discussed the status and impact of the COVID-19 pandemic at each meeting.
Ladies and Gentlemen,
SUPERVISORY BOARD REPORT
4
A To our Investors
3
A_To our Investors
Annual Report 2020 - Allianz Group
Chivas Bée
ॐ
6/6 100
Thank you for your continuous support - we look forward to the joint path ahead.
The Supervisory Board received regular, timely, and comprehensive reports from the Board of Management. The
Board of Management's verbal reports at the meetings were accompanied by written documents, which were
sent to each member of the Supervisory Board in time for the relevant meeting. The Board of Management also
informed the Supervisory Board in writing about important events that occurred between meetings. The chairmen
of the Supervisory and Management Boards had regular discussions about major developments and decisions.
The Chairman of the Supervisory Board also had individual discussions with each member of the Board of
Management about their respective half-year as well as full-year performance.
Also in the financial year 2020, individual trainings and group sessions were held on the basis of an agreed
development plan for continued training of the members of the Supervisory Board, for example on underwriting
topics and the implications of the new IFRS accounting standards IFRS 9 and 17.
Annual Report 2020 - Allianz Group
ISSUES DISCUSSED IN THE SUPERVISORY BOARD PLENARY SESSIONS
Annual Report 2020 - Allianz Group
Further explanations on corporate governance in the Allianz Group can be found in the Statement on Corporate
Management. More details on corporate governance are provided on the Allianz website, specifically:
> www.allianz.com/corporate-governance.
DECLARATION OF CONFORMITY WITH THE GERMAN CORPORATE GOVERNANCE CODE
On 10 December 2020, the Board of Management and the Supervisory Board issued the Declaration of Conformity
in accordance with § 161 of the German Stock Corporation Act ("Aktiengesetz"). The declaration was posted on the
company website, where it is available to shareholders at all times. Allianz SE fully complies and will continue to
fully comply with the recommendations of the German Corporate Governance Code in its version of 16 December
2019. Since the last Declaration of Conformity as of 13 December 2019, all recommendations of the Code in the
version of 7 February 2017 have been complied with.
In the meeting of 10 December 2020, the Board of Management first provided information about the third-
quarter results, the further course of business, and the situation of Allianz Group. Furthermore, the Supervisory
Board discussed the planning for fiscal year 2021 and the three-year plan for 2021 to 2023. In the context of the
three-year plan the Board of Management reported on the updated risk strategy. The Supervisory Board ascer-
tained that both elements are closely interlinked. With the Africa strategy and the initiative "push-to-pull", the
Board of Management presented further elements of the Allianz strategy. In addition, the Board of Manage-
ment provided a status report on the issue of cyber risk security. The Supervisory Board discussed the declaration
of conformity with the German Corporate Governance Code and various corporate governance topics. In this
context, the Supervisory Board agreed to propose to the 2021 AGM an amendment to the Articles of Association
regarding the reduction of Supervisory Board members' term of office to four years. The Supervisory Board
discussed in depth the Board of Management remuneration system and the appropriateness of the Board of
Management remuneration. The system of Supervisory Board remuneration was also reviewed for appropriateness
on the basis of an external benchmark analysis. Furthermore, the Supervisory Board set targets for the variable
remuneration of members of the Board of Management for 2021. As part of the individual target-setting process,
the climate strategy was added as a new indicator. The Supervisory Board reviewed the succession planning for
the Board of Management. Finally, the results of this year's efficiency review of the Supervisory Board's activities
were addressed.
The meeting on 25 September 2020 focused on the continuation of the presentation on the strategic direction
of Allianz Group and Allianz SE (solo). The main focus here was on implementation under the slogan "Simply
Deliver" and the definition of priorities within the framework of the Allianz strategy. In this context, the key HR
initiatives to support the strategy were also presented. The Supervisory Board also discussed the transformation
at Allianz Global Investors, corporate governance issues and the self-evaluation of the Supervisory Board
required by supervisory law and the development plan drawn up on this basis. In addition, the Supervisory Board
decided on the succession of Mr. Niran Peiris, who retired from the Board of Management on 31 December 2020,
and appointed Mr. Christopher Townsend to the Board of Management with effect from 1 January 2021. In addition,
the status of the COVID-19 pandemic and the Board of Management's measures with respect to the handling of
the second wave of infections were in focus of the discussion.
Furthermore, the Supervisory Board dealt in detail with personnel matters relating to the Board of Management.
Dr. Barbara Karuth-Zelle was appointed to the Board of Management with effect from 1 January 2021 to replace
Dr. Christof Mascher, who left the Board of Management at the end of 2020. The mandates of Mr. de la Sota
and Mr. Terzariol, which were to expire at the end of 2020, were extended by five years, and the mandate of
Mr. Balbinot, which was also expiring, was extended by two years. Finally, the Supervisory Board reviewed the key
criteria for the selection of Board of Management members and amended them accordingly by the competencies
leadership, employee engagement and change management.
6
COMMITTEE ACTIVITIES
A To our Investors
A_To our Investors
Annual Report 2020 - Allianz Group
In the meeting of 25 June 2020, the Board of Management first reported in detail on the course of business in
fiscal year 2020 to date and provided an outlook on the expected half-year results. In addition, the Board of
Management reported on various M&A activities, such as the acquisition of the property insurance business of
SulAmérica in Brazil, and the cooperation in the bancassurance channel with BBVA in Spain. Furthermore, the
Board of Management reported on the impact of the COVID-19 pandemic on Allianz Group employees and the
individual business units, business closure and business interruption insurance and reinsurance. Other topics covered
in the report were the current status of the cyber security insurance business and Allianz's ESG concept and
related reporting. The Supervisory Board discussed the overall economic impact of the COVID-19 pandemic,
including the consequences for the insurance industry. The Board of Management then presented the first part of
the annual strategy presentation (trends and implications) for discussion. In addition, the Board of Management
provided its regular status report on the issue of cyber risk security as well as the life insurance business strategy.
On 6 May 2020, just before the AGM, the Board of Management briefed the Supervisory Board on business per-
formance in the first quarter of 2020 as well as on the current situation of both the Allianz Group and Allianz SE,
in particular with regard to share price development, capitalization, and capital as well as liquidity management.
In addition to the update on the COVID-19 pandemic, the meeting also dealt with the withdrawal of the profit
target for the 2020 financial year, which had been published in an ad hoc announcement.
In an extraordinary conference call meeting on 2 April 2020, the Board of Management first reported on the
impact of the COVID-19 pandemic on employees, distributors and customers, the financial situation and the
planned dividend payment. The Supervisory Board also approved the cancellation of the already scheduled AGM
and the convening of a virtual AGM, which was made possible at short notice by the legislator, with the
corresponding stipulations of the Board of Management. The specific succession planning for the Board of
Management was also discussed further at this meeting.
In the meeting of 5 March 2020, the Supervisory Board discussed and approved the audited annual Allianz SE
and consolidated Group financial statements, including market value balance sheets, as well as the Board of
Management's recommendation for the appropriation of earnings for the financial year 2019. The auditors
confirmed that there were no discrepancies compared to their February report and issued an unqualified auditor's
report for the individual and consolidated financial statements. The Supervisory Board also reviewed and
approved the separate non-financial report for both Allianz SE and the Group, taking into account the report of
the external auditor. Further presentations included the Board of Management's report on risk development in
2019, the annual compliance report, and the annual report of the Head of Group Audit. Next, the Supervisory
Board reviewed the agenda and proposals for resolution for Allianz SE's 2020 Annual General Meeting (AGM). At the
recommendation of the Audit Committee, the Supervisory Board appointed PwC as auditor for the 2020 individual
and consolidated financial statements, the auditor's review of the 2020 half-yearly financial report, and the assurance
engagement of the combined separate non-financial report. Furthermore, the Supervisory Board dealt with and
approved the control and profit transfer agreement with Allianz Africa Holding GmbH. The Supervisory Board
further received reports on the strategy in the area of "business customers" as well as the Allianz X investment unit.
Furthermore, the Supervisory Board discussed the succession planning for the Board of Management.
In the meeting of 20 February 2020, the Supervisory Board comprehensively dealt with the preliminary financial
figures for the financial year 2019 as well as the Board of Management's dividend proposal. The appointed audit
firm, PricewaterhouseCoopers GmbH Wirtschaftsprüfungsgesellschaft (PwC), Munich, reported in detail on the
preliminary results of their audit. In the further course of the meeting, the Supervisory Board also discussed the
target achievement of each individual member of the Board of Management and, on this basis, set their variable
remuneration for the financial year 2019, subject to the approval of the annual financial statements. As part
of this performance assessment, the fitness and propriety of the members of the Board of Management were
confirmed. The Supervisory Board also dealt with the remuneration systems for the Board of Management and
the Supervisory Board and received reports on the strategy of Allianz Partners and the IT strategy. Finally, the
Supervisory Board appointed Dr. Klaus-Peter Röhler to the Board of Management of Allianz SE with effect from
1 April 2020 as successor to Dr. Axel Theis, who had resigned his mandate with effect from 31 March 2020.
5
6/6 100
100
6/6 100
5/5 100
Jim Hagemann Snabe
2/2 100
Jürgen Lawrenz
5/5 100
Jürgen Lawrenz
2/2 100
Dr. Friedrich Eichiner
5/5 100
Herbert Hainer
2/2 100
Michael Diekmann
5/5 100
Jean-Claude Le Goaër
100
NOMINATION COMMITTEE
2/2
PERSONNEL COMMITTEE
1/1 100
While 2020 was not a record year in terms of financial performance, it was a record year in terms of customer and employee
satisfaction. It is these impressive results that make me confident that we are not just weathering the COVID-19 crisis but
building an even stronger Allianz. Our "Simplicity wins" strategy continues to deliver, and we are on track with implementing
our Allianz Customer Model (ACM). Through ACM we are making insurance and investing simpler for our clients while building
an integrated global IT platform that features standardized and scalable processes.
We are also moving forward with our ESG agenda: With a view to our net-zero commitment for 2050 - that is, net-zero CO2
emissions for all Allianz insurance assets and operations - we have now set a first intermediate target for 2025. Making such
clear and specific commitments to portfolio decarbonization is a unique feature of the UN-convened Net-Zero Asset Owner
Alliance: Together with 32 other member organizations, covering a total of more than USD 5 trillion assets under management,
we are working to create real impact towards a sustainable future for our planet.
100
6/6
Herbert Hainer
100
1/1
Jim Hagemann Snabe
100
6/6
Gabriele Burkhardt-Berg
1/1 100
Christine Bosse
6/6 100
Michael Diekmann (Chairman)
Michael Diekmann (Chairman)
6/6 100
Gabriele Burkhardt-Berg
Michael Diekmann (Chairman)
7/7 100
2/2
Michael Diekmann (Chairman)
7/7 100
RISK COMMITTEE
7/7 100
7/7 100
Godfrey Hayward
Herbert Hainer
Martina Grundler
Jean-Claude Le Goaër
Dr. Friedrich Eichiner
Christine Bosse
100
6/6
Christine Bosse
5/5 100
2/2
Dr. Friedrich Eichiner
2/2
Jim Hagemann Snabe (Chairman)
STANDING COMMITTEE
TECHNOLOGY COMMITTEE
7/7 100
Jürgen Lawrenz
88888
2/2
Frank Kirsch
7/7 100
Frank Kirsch
2/2
Godfrey Hayward
7/7 100
2/2
7/7 100
Annual Report 2020 - Allianz Group
Strong brands and customer loyalty are created by strong organizations. The exceptional quality and resilience of our
employees are at the heart of our success. Despite the challenges this past year presented, our employees remained focused
on serving our clients and executing our strategy. And while we are all physically distanced, I have never felt a stronger sense
of togetherness and unity across our global organization - a sentiment that is also reflected in our employee engagement
results, which reached record levels in 2020. For example, our Inclusive Meritocracy Index increased to 78%, 5 percentage
points above the previous year's level, and already ahead of our 2021 ambition. Like our customers, our employees valued
the stability, support, and security that Allianz offers in these uncertain times. I, on the other hand, certainly value our employees'
tremendous commitment in serving our clients and their enthusiasm and drive in transforming our company into a simpler,
more digital, and scalable organization. On behalf of the entire Board of Management - and I trust on your behalf as well -
I sincerely thank our people around the world for their outstanding work.
Even if our business environment continues to remain challenging due to economic uncertainty and prolonged low interest
rates, our strategy combined with our globally diversified business model, strong balance sheet, and highly qualified and
dedicated employees provide a solid base for resilience and profitable growth. We are working hard to be prepared for what
lies ahead.
60 Business Operations
63 Business Environment
64 Executive Summary of 2020 Results
65 Property-Casualty Insurance Operations
67 Life/Health Insurance Operations
70 Asset Management
C Group Management Report
72 Corporate and Other
77 Balance Sheet Review
79 Liquidity and Funding Resources
82
Reconciliations
84 Risk and Opportunity Report
101 Integrated Risk and Control System for Financial Reporting
73 Outlook 2021
46 Combined Separate Non-Financial Report
23 Remuneration Report (part of the Group Management Report)
21 Takeover-Related Statements and Explanations (part of the Group Management Report)
OUTPERFORM
TRANSFORM
REBALANCE
ANNUAL REPORT 2020
ALLIANZ GROUP
Allianz
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within this report are also linked.
CONTENT
2 Letter to the Investors
4 Supervisory Board Report
11 Mandates of the Members of the Supervisory Board
12 Mandates of the Members of the Board of Management
B_Corporate Governance
14 Statement on Corporate Management (part of the Group Management Report)
D_Consolidated Financial Statements
104 Consolidated Balance Sheet
A_ To our Investors
106 Consolidated Statement of Comprehensive Income
TO OUR INVESTORS
A
Annual Report 2020 - Allianz Group
1
A_ To our Investors
2
OLIVER BÄTE
Chief Executive Officer
Dear Juvestors
-
Our financial performance has been remarkably robust across business segments, though COVID-19 also left its mark on our
numbers, especially in the Property-Casualty commercial lines. We generated € 140.5 bn in revenues and our operating profit
came to € 10.8 bn. Adjusted for the adverse effects of COVID-19, our operating profit even exceeded the prior year's record
levels. This shows how well-diversified and healthy our underlying business performance is. Let me share just a few highlights
with you: In Life/Health, we are successfully moving towards capital-efficient insurance products and have entered into
reinsurance transactions for some of our European back books. In Property-Casualty, our persistent focus on productivity has
led to further improvements in underlying profitability, as we managed to reduce our expense ratio for the third consecutive
year. And our Asset Management segment proved highly resilient, with solid net inflows and excellent operating profitability.
All in all, our 2020 net income attributable to you, our shareholders, was € 6.8 bn.
What is more, our capital position also remained strong. Despite the considerable capital market turmoil, our Solvency II
capitalization stayed above our 180% target at all times, and we closed the year at a very strong 207%. Our disciplined
capital and cash management approach enabled us to pay out a dividend in early 2020, in the midst of the first wave of the
pandemic. We are determined to continue on this path and pay a dividend per share at the previous year's level or higher in
line with our dividend policy.
Aside from financial results, the key indicator for the quality of our organization is the feedback we receive from our clients.
We ask our customers to rate our services and to indicate their willingness to recommend us to friends and colleagues. The
latter is captured in the so-called Net Promoter Score (NPSTM). In 2020, NPS results reached all-time highs: 60% of Allianz
businesses were rated "loyalty leaders" in their respective markets and 79% above market average. With these outstanding
ratings, we outperformed our 2021 targets (75%+ above market average) one year ahead of time. They prove that our
customer-centric strategy is spot on - also, and especially, in times of crisis. We have quickly adapted to the new circumstances
and, thanks to previous investments in our global IT infrastructure, continued to offer excellent service even with 90% of our
employees working remotely. We helped small and medium-sized businesses to survive financially, we offered telemedicine
and psychological counseling, and our doctors dedicated part of their free time to support the healthcare system in covering
the extra needs related to the pandemic.
Annual Report 2020 - Allianz Group
All our actions are guided by our purpose "We secure your future". The power of this promise and the increasing role Allianz
plays in people's lives were impressively confirmed by our ranking in Interbrand's 2020 Best Global Brands list: Not only was
Allianz recognized once again as the number one insurance brand globally – for the first time we also ranked among the top
40 global brands across all industries.
105 Consolidated Income Statement
Pages 181 - 190
Pages 103 - 180
2020 will be remembered as the year of COVID-19. As the pandemic swept the globe, it caused an unprecedented public
health crisis that threw the world economy into a recession. Yet, even in this very challenging environment, we were able to
deliver solid results, thanks to our strong balance sheet and globally diversified business model, proving once again that
Allianz is a reliable partner for all its stakeholders.
Pages 13 - 58
107 Consolidated Statement of Changes in Equity
Pages 59 - 102
108 Consolidated Statement of Cash Flows
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
133 Notes to the Consolidated Balance Sheet
150 Notes to the Consolidated Income Statement
155 Other Information
E
Further Information
111 General Information
Pages 1 - 12
182 Responsibility Statement
183 Independent Auditor's Report
189 Independent Practitioner's Reasonable Assurance Report
Disclaimer regarding roundings
-
The Consolidated Financial Statements are presented in millions of Euros (€ mn) unless otherwise stated.
Due to rounding, numbers presented may not add up precisely to the totals provided and percentages may
not precisely reflect the absolute figures.
The risk capital required is defined as the difference between the
current portfolio value and the portfolio value under adverse condi-
tions at the 99.5% confidence level. As we consider the impacts of a
negative or positive event on all risk sources and covered businesses at
the same time, diversification effects across products and regions are
taken into account. The results of our Monte Carlo simulation allow us
to analyze our exposure to each source of risk both separately and in
aggregate. We also analyze several pre-defined stress scenarios rep-
resenting historical events, reverse stress tests, and adverse scenarios
relevant for our portfolio. Furthermore, we conduct ad-hoc stress tests
on a monthly basis to reflect current political and financial develop-
ments and to analyze specific non-financial risks more closely.
For our Asset Management business segment, we assign internal
risk capital requirements based on sectoral regulatory capital require-
ments. The Asset Management business is affected mainly by opera-
tional risks. However, since most of our Asset Management business is
not located in the Eurozone, at Group level its participation value
bears a foreign exchange rate risk. Our Asset Management business is
covered by adequate risk controlling processes, including qualitative
risk assessments (such as Top Risk Assessment) set up by the respective
entities, with key results regularly reported to the Group. As the impact
on the Group's total Solvency Capital Requirement is minor, risk man-
agement with respect to Asset Management is not discussed in greater
detail.
C_Group Management Report
91
Annual Report 2020 - Allianz Group
1_Allianz Life Insurance Company of North America is based on third-country equivalence.
Risk capital related to our European banking operations is allo-
cated to the Corporate and Other business segment and calculated
based on the approach applied by banks in accordance with the local
requirements resulting from the Basel regulation (Basel standards). As
the capital requirement for the banking business is only approximately
0.8% (2019: 0.9%) of our total pre-diversified Group Solvency Capital
Requirement, risk management for the banking operations is not dis-
cussed in greater detail.
Smaller related undertakings in the European Economic Area
which are not covered by the internal model are reflected with their
standard formula results. At the Group level, the Solvency Capital
Requirements for smaller insurance undertakings outside the Euro-
pean Economic Area with only immaterial impact on the Group's risk
profile are accounted for by means of book value deduction.²
In view of the above, Allianz's risk capital framework covers all
material and quantifiable risks. Risks not specifically covered by the
internal model include strategic, liquidity, and reputational risks.
COVERAGE OF THE RISK CAPITAL CALCULATIONS
The Allianz Group's internal model to calculate our Solvency Capital
Requirement (SCR) covers all major insurance operations¹. This
includes both relevant assets (including fixed-income, equities, real
estate, and derivatives) and liabilities (including the run-off of all cur-
rent and planned technical provisions as well as deposits, issued debt
and other liabilities). For with-profit products in the Life/Health busi-
ness segment, the options and guarantees embedded in insurance
contracts - including policyholder behavior - are taken into account.
2_Under book value deduction, the book value of the respective entity is deducted from eligible Own Funds of the Group.
ASSUMPTIONS AND LIMITATIONS
DIVERSIFICATION AND CORRELATION ASSUMPTIONS
Our internal model considers concentration, accumulation, and corre-
lation effects when aggregating results at the Group level. The result-
ing diversification reflects the fact that all potential worst-case losses
are not likely to materialize at the same time. As we are an integrated
financial services provider offering a variety of products across differ-
ent business segments and geographic regions, diversification is key to
our business model.
In addition, we adjust the risk-free yield curves by a volatility
adjustment (VA) in most markets where a volatility adjustment is de-
fined by EIOPA and approved by the local regulator. This is done to
better reflect the underlying economics of our business, as the cash
flows of our insurance liabilities are largely predictable. The advantage
of being a long-term investor is the opportunity to invest in bonds yield-
ing spreads over the risk-free return and earning this additional yield
component over the duration of the bonds. Being a long-term investor
mitigates much of the risk of having to sell debt instruments at a loss
prior to maturity.
We take account of this by applying the volatility adjustment to
mitigate the credit spread risk, which we consider to be less meaningful
for long-term investors than the default risk. Allianz also models the
volatility adjustment dynamically within our approved internal model,
which differs from the static EIOPA VA concept applied in the standard
formula. For risk capital calculations, we assume a dynamic movement
of the volatility adjustment broadly consistent with the way the VA
would react in practice; however, we base the movement on our own
portfolio rather than the EIOPA portfolio. To account for this deviation,
Allianz applies a more conservative, reduced application ratio for the
dynamic volatility adjustment. Validation is performed regularly to
verify the appropriateness and prudency of the approach.
VALUATION ASSUMPTIONS: REPLICATING
PORTFOLIOS
We replicate the liabilities of our Life/Health insurance business. This
technique enables us to represent all product-related options and
guarantees, both contractual and discretionary, by means of standard
financial instruments. In the risk calculation, we use the replicating
portfolio - together with a Least Square Monte Carlo approach for
risks that are not covered by the replication – to determine and revalue
these liabilities under all potentially adverse Monte Carlo scenarios.
Diversification typically occurs when looking at combined risks
that are not, or only partly, interdependent. Important diversification
factors include regions (for example, windstorm in Australia vs. wind-
storm in Germany), risk categories (for example, market risk vs. under-
writing risk), and subcategories within the same risk category (for ex-
ample, commercial vs. personal lines of property and casualty risk). Ul-
timately, diversification is driven by the specific features of the invest-
ment or insurance products in question and their respective risk expo-
sures. For example, an operational risk event at an Australian entity
can be considered to be highly independent of a change in credit
spreads for a French government bond held by a German entity.
Where possible, we derive correlation parameters for each pair of
market risks through statistical analysis of historical data, considering
observations over more than a decade. In case historical data or other
portfolio-specific observations are insufficient or unavailable, correla-
tions are set by the Correlation Settings Committee, which combines
the expertise of risk and business experts in a well-defined and con-
trolled process. In general, when using expert judgment we set the cor-
relation parameters to represent the joint movement of risks under
adverse conditions. Based on these correlations, we use an industry-
standard approach, the Gaussian copula, to determine the depend-
ency structure of quantifiable sources of risk within the applied Monte
Carlo simulation.
ACTUARIAL ASSUMPTIONS
Our internal model also includes assumptions on claims trends, liability
inflation, mortality, longevity, morbidity, policyholder behavior,
expense, etc. We use our own internal historical data for actuarial
assumptions wherever possible, additionally considering recommen-
dations from the insurance industry, supervisory authorities, and actu-
arial associations. The derivation of our actuarial assumptions is based
on generally accepted actuarial methods. Within our internal risk cap-
ital and financial reporting framework, comprehensive processes and
controls exist for ensuring the reliability of these assumptions.
Our internal model is based on a VaR approach using a Monte Carlo
simulation. Following this approach, we determine the maximum loss
in portfolio value in scope of the model within a specified timeframe
("holding period", set at one year) and probability of occurrence ("con-
fidence level", set at 99.5%). We simulate risk events from all risk cate-
gories ("sources of risk") modeled and calculate the portfolio value
based on the net fair value of assets minus liabilities, including risk-mit-
igating measures such as reinsurance contracts or derivatives, under
each scenario.
MODEL LIMITATIONS
RISK-FREE RATE AND VOLATILITY ADJUSTMENT
When calculating the fair values of assets and liabilities, the assump-
tions regarding the underlying risk-free yield curve are crucial in deter-
mining and discounting future cash flows. For liability valuation, we
apply the methodology provided by the European Insurance and
Occupational Pensions Authority (EIOPA) as part of its technical docu-
mentation (EIOPA-BOS-20/109) to extrapolate the risk-free interest
rate curves beyond the last liquid tenor.¹
INTERNAL MODEL
1 The Allianz Environmental, Social, Governance (ESG) Board and the ESG office are constituted as advisors to the Board
of Management of Allianz SE and will further elevate environmental, social, and governance aspects in corporate gov-
ernance and decision-making processes at the Allianz Group.
GENERAL APPROACH
As the internal model is based on a 99.5% confidence level, there is a
low statistical probability of 0.5% that actual losses could exceed this
threshold at the Group level in the course of one year.
An identical liquidity stress-testing framework is applied at
Allianz SE. Major contingent liquidity requirements arise mainly from
market risk scenarios for Allianz SE and its subsidiaries, from the non-
availability of external capital markets, and from reinsurance risk sce-
narios for Allianz SE.
In addition, the cash position of the Group cash pool investment
portfolio is monitored and forecast on a daily basis and is subject to an
absolute minimum liquidity threshold and an absolute target liquidity
threshold. Both thresholds are defined for the Allianz SE cash pool in
order to be protected against short-term liquidity crises.
The liquidity planning process addresses future potential liquidity
needs and aims to manage available liquidity sources in an efficient
and effective manner. The annual and high-level three-year cash flow
plan for Allianz SE and the Holding and Treasury reportable segment
of Allianz SE reflects the overall operating, financing, and investing
strategy of Allianz Group. The annual liquidity plan for Allianz SE and
for the Holding and Treasury reportable segment is subject to the ap-
proval of the Board of Management. Liquidity planning is constantly
monitored and regularly reported to the Board of Management via
GFRC.
REPUTATIONAL RISK
Allianz's reputation as a well-respected and socially aware provider of
financial services is influenced by our behavior in a range of areas such
as product quality, corporate governance, financial performance, cus-
tomer service, employee relations, intellectual capital, and corporate
responsibility.
Reputational risk is the risk of an unexpected drop in the value of
the Allianz SE share price, the value of the in-force business, or the
value of future business caused by a decline in our reputation in inter-
nal or external stakeholders' judgment.
The identification and assessment of reputational risks is part of
the annual Top Risk Assessment process. As part of this process, senior
management approves the risk management strategy for the most
significant risks facing the company, including those with a potentially
severe reputational impact.
The management of Environmental, Social and Governance
(ESG) risks - which are closely related to reputational risk - is sup-
ported by a dedicated Group ESG Board and Group ESG Office¹, which
help steer the integration of ESG aspects into core investment and
insurance activities. Significant ESG and other reputational risks iden-
tified in the course of business are escalated to experts from Group
Communications and Corporate Responsibility2, Group Risk, and
Annual Report 2020 - Allianz Group
2_Until 31 December 2020, the corporate responsibility function was part of Group Communications and Corporate Respon-
sibility. As of 1 January 2021, Allianz's ESG agenda will be managed by a new Global Sustainability function and Group
Communications and Corporate Responsibility is renamed into Group Communications and Reputation.
90
90
C_Group Management Report
Group ESG for assessment and decision-making, with the GFRC acting
as the ultimate escalation/decision-making body.
CLIMATE CHANGE
Climate change has the potential to materially affect the global econ-
omy and our business, especially in the long run. Risks arising from cli-
mate change can be seen already today and their relevance will in-
crease over the mid- and long-term. These can for instance be acute
and chronic physical risks such as warming temperatures, extreme
weather events, rising sea levels, intensifying heatwaves and droughts,
or a change in vector-borne diseases, with impacts on property or
health. The risks also result from the cross-sectoral structural change
stemming from the transition towards a low-carbon economy. These
include changes in climate policy, technology, or market sentiment,
and impact thereof on the market value of financial assets as well as
impact resulting from climate change litigation.
Climate change also creates opportunities - be it in connection
with financing a low-carbon and climate-resilient future, e.g., by invest-
ing in renewable energy, energy efficiency in real estate, and electric
vehicle infrastructure -, or by providing insurance solutions to protect
against physical climate impacts and to support low-carbon business
models.
Climate change impacts Allianz's business in two key ways:
Firstly, through insurance policies e.g., covering health impacts,
property damage, and other losses, and
Secondly, through changes in the sectors and business models it
underwrites.
Furthermore, Allianz is affected by climate change as a large-scale in-
stitutional investor. It has significant stakes in various economies, com-
panies, infrastructure, and real estate that might be affected by the
physical impact of climate change and by the transition to a low-car-
bon economy. This can directly influence the ability of assets to gener-
ate long-term value.
We address immediate risks from climate change factors follow-
ing the management approach for the primary underlying risks e.g.,
building on our long-term expertise in the modeling of extreme
weather events or analyzing emission profiles of our proprietary invest-
ments. On a forward-looking basis, we consider risks from climate
change factors under emerging risks, where we closely monitor the de-
velopment of the risk landscape supported by selective analyses on
our portfolios.
Internal risk capital framework
We define internal risk capital as the capital required to protect us
against unexpected, extreme economic losses, and which forms the
basis for determining our Solvency II regulatory capitalization. On a
quarterly basis, we calculate and consistently aggregate internal risk
capital across all business segments. We also project risk capital re-
quirements regularly between reporting periods in times of financial
market turbulence.
For the management of our risk profile and solvency position, we utilize
an approach that reflects the Solvency II rules in that it comprises our
approved internal model covering all major insurance operations.
Other entities are reflected based on standard formula results, others
under the deduction and aggregation approach as well as on sectoral
or local requirements for non-insurance operations, in accordance with
the Solvency II framework.
We use model and scenario parameters derived from historical
data, where available, to characterize future possible risk events. If
future market conditions were to differ substantially from the past, for
example, in an unprecedented crisis, our VaR approach might be too
conservative or too liberal in ways that are difficult to predict. In order
11,529
92
5,638
5,632
2,286
2,283
11,542
strategies particularly focus on the quality of the investments and en-
sure a significant portion of liquid assets (for example, high-rated gov-
ernment bonds or covered bonds) in the portfolios. In the course of
liquidity planning, liquidity sources (for example, cash from invest-
ments and premiums) and liquidity needs (for example, payments due
to insurance claims and expenses) are reconciled under a best-esti-
mate plan, as well as under adverse idiosyncratic and systemic liquidity
scenarios, to allow for a group-wide consistent view on liquidity risk.
These analyses are performed at legal entity level and are monitored
by the Group.
692
691
2019¹ 20192
1,604 1,602
Life/Health
17,749
17,859
2,711
2,726
437
439
2,839
2,855
Corporate and Other
1,940
1,955
471
474
127
127
Property-Casualty
1_Due to late availability of EIOPA's publication, the risk-free interest rate term structure used might slightly differ from the
one published by EIOPA.
2019²
Diversification
Annual Report 2020 - Allianz Group
C_Group Management Report
to mitigate reliance on historical data, we complement our VaR anal-
ysis with stress testing.
Furthermore, we validate the model and parameters through sen-
sitivity analyses, independent internal peer reviews, and, where appro-
priate, independent external reviews, focusing on methods for select-
ing parameters and control processes. To ensure that the model is val-
idated adequately, we have established an Independent Validation
Unit (IVU) within Group Risk, responsible for validating our internal
model within a comprehensive model validation process. Any limita-
tions identified during the validation process are remedied after con-
sultation with the Group regulator. Overall, we believe that our valida-
tion efforts are effective and that the model adequately assesses the
risks to which we are exposed.
The construction and application of the replicating portfolios
mentioned are subject to the set of replicating instruments that are
available and might be too simple or restrictive to capture all factors
affecting the change in value of liabilities. As with other model compo-
nents, the replication framework is subject to independent validation
and to suitability assessments as well as to stringent data and process
quality controls. Therefore, we believe that our liabilities are ade-
quately represented by the replicating portfolios.
Since the internal model takes into account the change in the eco-
nomic fair value of our assets and liabilities, it is crucial to estimate the
market value of each item accurately. For some assets and liabilities it
may be difficult, if not impossible - notably in distressed financial
markets - to either obtain a current market price or apply a meaning-
ful mark-to-market approach. For such assets we apply a mark-to-
model approach. For some of our liabilities, the accuracy of their val-
ues also depends on the quality of the actuarial cash flow estimates.
Despite these limitations, we believe the estimated fair values are ap-
propriately assessed.
REGULATORY AND MODEL CHANGES IN 2020
In 2020, our internal model was further enhanced based on regulatory
developments, model validation results, and the feedback received in
the course of our consultations with regulators.
The net impact of regulatory and model changes on the Sol-
vency II risk capital of the Group in 2020 was € (0.6) bn. This reduction
in SCR is mainly driven by the introduction of several minor and imma-
terial model changes at both the Group and entity levels and the im-
plementation of the final aspects of the cross-effect model change.
Cross-effects are defined as the effects arising due to the interaction
between different risk categories and/or risk types. This is partly offset
by impacts of the regulatory change of a reduction in the ultimate for-
ward rate (UFR) and the refinement of the calibration of equity volatil-
ity. The change in the modeling approach for surplus funds of Allianz
Lebensversicherungs-Aktiengesellschaft contributed to the significant
reduction of the capital add-on.
In all subsequent sections, the figures including model changes
will form the basis for the movement analyses of our risk profile in 2020.
As our general capital steering continues to focus on the Solvency II ra-
tio impacts excluding the application of transitional measures for tech-
nical provisions, the figures in the following table exclude transitional
measures unless specifically stated.
Allianz Group: Impact of regulatory and model changes - allocated risk according to the risk profile (total portfolio before non-controlling
interests)
€ mn
Market risk
Credit risk
Underwriting risk
As of 31 December
20191
20192
2019¹
20192
2019¹
2019²
Business risk
2019¹
Operational risk
Total
Each legal entity of Allianz Group manages liquidity risk
locally, using asset/liability management systems designed to ensure
that assets and liabilities are adequately matched. Local investment
C_Group Management Report
LIQUIDITY RISK
2019¹
2020
As of 31 December
The counterparty credit risk arising from derivatives is low, since
derivatives usage is governed by the group-wide internal guideline for
collateralization of derivatives, which stipulates master netting and
collateral agreements with each counterparty and requires high-qual-
ity and liquid collateral. In addition, Allianz closely monitors counter-
parties' credit ratings and exposure movements.
Credit risk in the Life/Health business segment is primarily driven
by long-term assets covering long-term liabilities. Typical investments
are government bonds, senior corporate bonds, covered bonds, self-
originated mortgages and loans, and a modest amount of derivatives.
In the Property-Casualty business segment, fixed-income securities
tend to be short- to mid-term, due to the nature of the business, which
explains the lower credit risk in this segment.
As of 31 December 2020, the credit risk arising from our investment
portfolio accounted for 81.5% (2019: 80.6%) of our total Group pre-
diversified internal credit risk.
CREDIT RISK - - INVESTMENTS
Allianz Group: Risk profile - allocated credit risk by business segment
(total portfolio before tax and non-controlling interests)
pre-diversified
The following table presents our group-wide risk figures for credit risks
by business segment.
CREDIT RISK
As of 31 December 2020, about 5.4% (2019: 5.5%) of the total pre-
diversified risk was related to real estate exposures.
Property-Casualty
REAL ESTATE RISK
EQUITY RISK
As of 31 December 2020, our interest-rate-sensitive investments
excluding unit-linked business amounting to a market value of
€ 486.5 bn (2019: € 460.8 bn) ¹ - would have gained € 58.6 bn (2019:
€ 49.8 bn) or lost € 49.8 bn (2019: € 42.8 bn)² in value in the event of
interest rates shifting by -100 and + 100 basis points, respectively. How-
ever, these impacts would have been partially offset by policyholder
participation. In addition, the Solvency II Own Funds effect is much
more limited due to our active duration management, limiting the du-
ration mismatch of the Group to negative 0.1 years, representing Sol-
vency II liabilities of longer duration than assets.
INTEREST RATE RISK
C_Group Management Report
97
Annual Report 2020 - Allianz Group
estate risk remained broadly unchanged. The higher inflation risk was
mainly driven by exposure especially in the Property-Casualty business
segment. The overall increase in market risk was also supported by
business growth, while exposure changes due to asset/liability man-
agement measures and the corresponding effects on the diversifica-
tion between market risk factors reduced the impact to some extent.
The Group's total pre-diversified market risk increased by €2.0 bn,
which was mainly driven by credit spread risk, especially in the
Life/Health business segment, due to higher exposures and lower pol-
icyholder participation following the decline in interest rates. The lower
interest rates together with lower interest rate volatilities contributed
to lower interest rate risk, which was supported by management
actions in particular duration management measures - that
improved the interest rate risk profile. The volatility in equity markets
caused by the COVID-19 pandemic resulted in equity de-risking
activities at most entities and investment in alternatives and infra-
structure. However, most equity indices fully recovered from the
COVID-19 shock in the first half of the year. This effect combined with
the lower policyholder participation increased the equity risk. Real
1_2019 risk profile figures adjusted based on the 2020 model changes impact.
25,327
45.0%
27,313
46.4%
As of 31 December 2020, our investments excluding unit-linked busi-
ness that are sensitive to changing equity markets - amounting to a
market value of € 66.6 bn³ (2019: € 75.7 bn) - would have lost
€ 17.9 bn (2019: € 20.0 bn) in value assuming equity markets had
declined by 30%. However, this impact would have been partially off-
set by policyholder participation.
€ mn
2,334
2,286
Annual Report 2020 - Allianz Group
88
98
5_Additionally, 8.7 % (2019: 7.4%) of our total Group pre-diversified internal credit risk is allocated to receivables, potential
future exposure for derivatives and reinsurance, and other off-balance sheet exposures.
3_The stated market value includes all assets whose market value is sensitive to equity movements (excluding unit-linked
business) reflecting the Solvency II framework, and therefore is not based on classifications given by accounting principles.
4_The effect does not consider policyholder participation.
2 The effects do not consider policyholder participation.
1 The stated market value includes all assets whose market value is sensitive to interest rate movements (excluding unit-
linked business) reflecting the Solvency II framework, and therefore is not based on classifications given by accounting
principles.
The overall credit risk for the Allianz Group increased by € 0.6 bn
to € 6.1 bn (2019: € 5.5 bn). This was mainly driven by the lower interest
rate environment compared to the previous year, which generally in-
creased credit risk exposures, thereby increasing credit risk. This also
contributed to a decrease in the loss-absorbing capacity of technical
provisions in the traditional life business, which increased the credit risk
after considering policyholder participation.
Throughout 2020 and the COVID-19 pandemic, there were no mate-
rial events with regard to credit migration risk and default risk.
1_2019 risk profile figures adjusted based on the 2020 model changes impact.
9.7
5,467
6,101
10.4
%
Share of total Group pre-diversified risk
€ mn
Total Group
471
526
€ mn
Corporate and Other
2,711
3,241
€ mn
Life/Health
Share of total Group pre-diversified risk
55
172
3,142
Life/Health underwriting risk arises from profitability being lower
than expected. As profitability calculations are based on several
parameters - such as historical loss information and assumptions on
inflation, mortality, or morbidity - realized parameters may differ from
the ones used for underwriting. For example, higher-than-expected
inflation may lead to higher medical claims in the future. However,
beneficial deviations are also possible; for example, a lower morbidity
rate than expected will most likely result in lower claims in income pro-
tection products.
We measure these risks within our internal model, distinguishing,
where appropriate, between risks affecting the absolute level and
trend development of the actuarial assumptions on the one hand and
pandemic risk scenarios on the other. Depending on the nature and
complexity of the risks involved, our health business is represented in
the internal model according to Property-Casualty or Life/Health cal-
culation methods and is therefore included in the relevant Property-
Casualty and Life/Health figures accordingly. However, most of our
health business is attributable to the Life/Health business segment.
BUSINESS RISK
Business risks include cost risks and policyholder behavior risks. They
are mostly driven by the Life/Health business and to a lesser extent by
the Property-Casualty business. Cost risks are associated with the risk
that expenses incurred in administering policies are higher than
expected or that new business volume decreases to a level that does
not allow Allianz to absorb its fixed costs. Business risk is measured
relative to baseline plans.
For the Life/Health business, policyholder behavior risks are risks
related to unpredictable, adverse behavior of policyholders in
exercising their contractual options, such as, for instance, early termi-
nation of contracts, surrenders, partial withdrawals, renewals, and
annuity take-up options.
Assumptions on policyholder behavior are set in line with ac-
cepted actuarial methods and based on own historical data, where
available. If there is no historical data, assumptions are based on
industry data or expert judgment. It is used as a basis to determine the
economic impact of policyholder behavior under different scenarios
within our internal model.
OPERATIONAL RISK
Operational risks refer to losses resulting from inadequate or failed
internal processes, human errors, system failures, and external events,
and can stem from a wide variety of sources, including the following:
"Clients, Products & Business Practices": potential losses due to a
failure to meet the professional obligations or from the design of
products. Examples include misselling, non-compliance with inter-
nal or external requirements related to products, anti-trust behav-
ior, data protection, sanctions and embargoes, etc. These losses
tend to be less frequent but, when they occur, can have high finan-
cial impact.
"Execution, Delivery and Process Management": potential losses
arising from transaction or process management failures. Exam-
ples include interest and penalties from non-payment or under-
payment of taxes or losses associated with broker and agent dis-
tribution processes. These losses tend to be of a relatively higher
frequency but with little financial impact (although single large-
loss events can occur).
Other operational risks including, for example, internal or external
fraud, financial misstatement risk, a cyber security incident causing
business disruption or fines, a potential failure at our outsourcing
partners causing a disruption to our working environment, etc.
The Group's operational risk capital is dominated (by more than 80%)
by the risk of potential losses within the categories "Clients, Products,
and Business Practices" and "Execution, Delivery, and Process Man-
agement". With regard to the largest category "Clients, Products, and
Business Practices", key external drivers are changes in laws and regu-
lations. Internal drivers reflect potential failures of internal processes.
These drivers are considered in the local scenario analyses.
Operational risk capital is calculated using a scenario-based
approach based on expert judgment as well as internal and external
operational loss data. The estimates for frequency and severity of
potential loss events for each material operational risk category are
assessed and used as a basis for our internal model calibration.
Allianz has developed a consistent operational risk management
framework, which is applied across the Group based on
Annual Report 2020 - Allianz Group
89
C_Group Management Report
proportionality and focuses on the early recognition and proactive
management of material operational risks. The framework defines
roles and responsibilities as well as management processes and meth-
ods: Local risk managers, in their capacity as Second Line of Defense,
identify and evaluate relevant operational risks and control deficien-
cies via a dialog with the First Line of Defense, report operational risk
events in a central database, and ensure that the framework is imple-
mented in their respective operating entity.
This framework triggers specific mitigating control programs. For
example, compliance risks are addressed with written policies and
dedicated compliance programs monitored by the Group Compliance
function at Allianz Group. The risk of financial misstatement is miti-
gated by a system of internal controls covering financial reporting.
Outsourcing risks are covered by our Outsourcing Policy, Service Level
Agreements, and Business Continuity and Crisis Management pro-
grams to protect critical business functions from these events. Cyber
risks are mitigated through investments in cyber security, cyber insur-
ance that Allianz buys from third-party insurers, and a variety of ongo-
ing control activities.
OTHER MATERIAL RISKS NOT MODELED IN THE
INTERNAL MODEL
There are risks which, due to their nature, cannot be adequately
addressed or mitigated by setting aside dedicated capital. These risks
are therefore not considered in the internal model. For the identifica-
tion, analysis, assessment, monitoring, and management of these risks
we also use a systematic approach, with risk assessment generally
based on qualitative criteria or scenario analyses. The most important
of these other risks are strategic, liquidity, and reputational risk.
STRATEGIC RISK
Strategic risk is the risk of a decrease in the company's value that will
arise from adverse management decisions on business strategies and
their implementation.
Strategic risks are identified and evaluated as part of the Group's
Top Risk Assessment process, and discussed in various Board of Man-
agement-level committees (for example, GFRC). We also monitor mar-
ket and competitive conditions, capital market requirements, regula-
tory conditions, etc., to decide if strategic adjustments are necessary.
The most important strategic risks are directly addressed through
Allianz's Renewal Agenda, which focuses on five themes: True Cus-
tomer Centricity, Digital by Default, Technical Excellence, Growth
Engines, and Inclusive Meritocracy. Progress on mitigating strategic
risks and meeting the Renewal Agenda objectives is monitored and
evaluated in the course of the Strategic and Planning Dialogs between
Allianz Group and the related undertakings.
Underwriting risks in our Life/Health operations (biometric risks)
include mortality, disability, morbidity, and longevity risks. Mortality,
disability, and morbidity risks are associated with an unexpected
increase in the occurrence of death, disability, or medical claims. Lon-
gevity risk is the risk that the reserves covering life annuities and group
pension products might not be sufficient due to longer life expectan-
cies of the insured.
Liquidity risk is defined as the risk that current or future payment obli-
gations cannot be met or can only be met on the basis of adversely
altered conditions. Liquidity risk can arise primarily if there are mis-
matches in the timing of cash in- and out-flows.
LIFE/HEALTH
Similar to premium risk, reserve risk is calculated based on actu-
arial models. The reserve distributions derived are then used within the
internal model to calculate potential losses based on a predefined
confidence level of 99.5 %.
3,068
11,187
11,525
10,542
1,940
1,609
43
103
204
120
1,152
1,101
563
424
14,969
(1,931)
(3,214)
2,332
793
Total Group
(272)
Total Group
techniques which combine portfolio data (geographic location, char-
acteristics of insured objects, and their values) with simulated natural
disaster scenarios to estimate the magnitude and frequency of poten-
tial losses. Where such stochastic models do not exist, we use deter-
ministic, scenario-based approaches to estimate potential losses. Sim-
ilar approaches are used to evaluate risk concentrations for terror and
man-made catastrophes, including losses from cyber incidents and in-
dustrial concentrations.
These loss distributions are then used within the internal model to
calculate potential losses with a predefined confidence level of 99.5%.
Reserve risk
Reserve risk represents the risk of adverse developments in best-
estimate reserves over a one-year time horizon, resulting from fluctu-
ations in the timing and/or amount of claims settlement. We estimate
and hold reserves for claims resulting from past events that have not
yet been settled. In case of unexpected developments, we would ex-
perience a reserve gain or loss dependent on the assumptions applied
for the estimate.
In order to reduce the risk of unexpected reserve volatility, our
operating entities constantly monitor the development of reserves for
insurance claims on a line-of-business level. In addition, operating
entities generally conduct annual reserve uncertainty analyses based
on similar methods used for reserve risk calculations. The Allianz Group
performs regular independent reviews of these analyses and Group
representatives participate in the local reserve committee meetings.
25,327
The Group has a conservative investment profile and disciplined
business practices in the Property-Casualty, Life/Health, and Asset
Management business segments, leading to sustainable operat-
ing earnings with a well-balanced risk-return profile.
5,467
2020
2019¹
2020
2019¹
2020
2019¹
2020 2019¹
Property-Casualty
5,638
2,334
2,286
11,300
11,542
749
4,439
2019¹
Total
Diversification
Annual Report 2020 - Allianz Group
The Group diversified risk is broken down as follows:
Allianz Group: Allocated risk according to the risk profile (total portfolio before non-controlling interests)
€ mn
C_Group Management Report
Market risk
Credit risk
As of 31 December
2020
2019¹
2020
2019¹
Underwriting risk
2020
Business risk
Operational risk
692
1,530
1,604
(6,843)
1,940
526
471
207
127
363
403
(651)
(720)
2,054
2,220
Total Group
27,313
25,327
6,101
1,609
96
Corporate and Other
24,321
(6,266)
13,508 15,495
Life/Health
21,264
17,749
3,241
2,711
652
437
2,255
2,839
1,442
1,527
(4,534)
(4,907)
20,356
1_Own Funds and capital requirement are calculated under consideration of volatility adjustment and yield curve extension,
as described in section "Risk-free rate and volatility adjustment".
The pre-diversified risk figures reflect the diversification effect
within each modeled risk category (i.e., market, credit, underwriting,
business, and operational risk), but do not include the diversification
effects across risk categories. Group diversified risk figures also capture
the diversification effect across all risk categories.
With the exception of the Asset Management business segment,
all business segments are exposed to the full range of risk categories.
As mentioned earlier, the Asset Management business segment is pre-
dominantly exposed to operational and market risks and to a lesser
extent to credit risk. The risk capital for the Asset Management busi-
ness segment is allocated to sectoral requirement.
2020
2019
207
212
214
217
198
203
222
225
197
Equity prices down by 30%
As of 31 December
2020
2019
Equity prices up by 30%
Combined scenario:
Interest rates down by 0.5 %¹
%
As a result of COVID-19 pandemic, the Group experienced the
following:
Losses in the Property-Casualty business segment resulted
from business interruption coverage and accumulations from
the entertainment sector. The Group also lost revenue in the
travel and credit business lines.
Higher market risk mainly due to the volatility of equity prices
and interest rates. The Group implemented risk mitigating
measures such as equity sales, increasing asset duration, and
the purchase of credit default swap protection.
Elevated reputational risk, as law suits with respect to business
interruption policies could affect our purpose statement
depending on media coverage and public perception. In
addition, increased regulatory pressure can be observed
regarding dividend payments of insurance companies,
premium deferrals, or customer friendly interpretation of
policy cover.
Business continuity and employer liability remain a focus area.
The implementation of a new work model is key to addressing
employer liability risks resulting from the accelerated trend by
COVID-19 to work from home. This is accompanied with
respective changes in IT risk management.
Allianz is well positioned to deal with potentially adverse future
events such as the COVID-19 pandemic due to our strong
internal limit framework, stress testing, internal model, and risk
management practices.
Finally, the Group has the additional advantage of being well-
diversified, both geographically and across a broad range of
businesses and products.
Based on the information available to us at the moment of report
completion, including the known impacts of COVID-19, we expect the
Group to continue to be sufficiently capitalized and compliant with
both the regulatory Solvency Capital Requirement and minimum
consolidated Group Solvency Capital Requirement. However, we are
carefully monitoring the development of the COVID-19 pandemic and
managing our portfolios to ensure that the Group and its entities have
sufficient resources to meet their solvency capital needs.
Annual Report 2020 - Allianz Group
95
C_Group Management Report
SOLVENCY II REGULATORY CAPITALIZATION
The Allianz Group's Own Funds and capital requirements are based on
the market value balance sheet approach, which is consistent with the
economic principles of Solvency II¹. Our regulatory capitalization is
shown in the following table.
Allianz Group: Solvency II regulatory capitalization¹
Allianz Group: Solvency II regulatory capitalization ratio sensitivities
As of 31 December
Base capitalization ratio
Interest rates up by 0.5%¹
5,467
Equity prices down by 30%
€ bn
30 Jun 2020
31 Mar 2020
31 Dec 2019
Capitalization
ratio
207
192
187
190
212
Compared to year-end 2019, our Solvency II capitalization ratio
declined by 5 percentage points to 207% (2019: 212%) since the
slight increase in Own Funds was overcompensated by the increase of
the Solvency II Capital Requirement. The decrease of the Solvency II
ratio was mainly driven by the COVID-19 triggered negative market
developments ((27) percentage points) especially due to the decline in
interest rates. Taxes and other changes ((8) percentage points) also
contributed negatively. This was partially compensated by operating
Solvency Il capital generation and business evolution (23 percentage
points), model changes (1 percentage point), and (capital) manage-
ment actions (7 percentage points). The latter was mostly driven by the
issuance of subordinated debts in May and November 2020 as well as
de-risking measures (e.g., duration management and reduction of
equity exposure). The impacts are partially offset by the executed
share buy-back in the first quarter of 2020, dividend accrual, and M&A
transactions (e.g., acquisition of SulAmerica and Control Expert as well
as the joint venture with BBVA).
The following table presents the sensitivities of our Solvency II
capitalization ratio under certain standard financial market scenarios.
The Allianz Group is a financial conglomerate within the scope of the
Financial Conglomerate Directive (FCD). The FCD does not impose a
materially different capital requirement on Allianz Group compared to
Solvency II.
Quantifiable risks and opportunities by risk
category
This Risk and Opportunity Report outlines the Group's risk figures,
reflecting its risk profile based on pre-diversified risk figures and Group
diversification effects.
At the Allianz Group, we measure and steer risk based on an
approved internal model which quantifies the potential adverse devel-
opments of Own Funds. The results provide an overview of how our risk
profile is distributed over different risk categories, and determine the
regulatory capital requirements in accordance with Solvency II.
31 Dec 2020 30 Sept 2020
Own Funds
Allianz Group: Solvency II regulatory capitalization ratios
%
In the second quarter of 2020, Allianz has been granted approval for
the application of transitionals on technical provisions for the two
entities Allianz Lebensversicherungs-Aktiengesellschaft and
Allianz Private Krankenversicherungs-Aktiengesellschaft. Including
the application of transitional measures for technical provisions, the
Own Funds and SCR as of 31 December 2020 amounted to € 98.5 bn
and € 40.9 bn leading to a Solvency II ratio of 240 %. Our general
capital steering, however, continues to focus on the previous
approach, i.e., excluding the application of transitional
measures for technical provisions. Consequently, the figures in all sub-
sequent sections exclude transitional measures unless otherwise
stated.
84.9
84.0
Interest rate down by 0.5 % 1
185
190
Capital requirement
€ bn
40.9
39.5
Capitalization ratio
%
207
212
1_Non-parallel interest rate shifts due to extrapolation of the yield curve beyond the last liquid point in line with Solvency
Il rules.
1_Excluding the application of transitional measures for technical provisions
The following table summarizes our Solvency II regulatory capi-
talization ratios disclosed over the course of the year 2020:
12,159
12,105
3,004
Financial markets are characterized by historically low interest rates
and risk premiums, causing some investors to look for higher-yielding
- and potentially higher-risk - investments. In addition to sustained low
interest rates, the challenges of implementing long-term structural re-
forms in key Eurozone countries, the uncertainty about future mone-
tary and fiscal policies, rising populism, amplified geopolitical tensions
and economic nationalism amid the pandemic, which weigh on global
trade with the potential of prompting long-term structural shifts in
global supply chains may lead to increasing market volatility. The in-
creasing reliance on digital technologies which has been greatly ac-
celerated by the COVID-19 pandemic - to ensure business continuity
and enhance efficiency and competitiveness - increases the risk of
technology obsolescence, cyber-attacks, data breaches, system fail-
ures as well as the risk of non-compliance with increasing regulation
covering IT-related business processes.
POTENTIAL RISKS IN THE FINANCIAL MARKET AND IN
OUR OPERATING ENVIRONMENT
Other non-financial risks: These risks are inherent to the Group's
core business and need to be carefully managed via continuous
improvements in risk identification, risk assessment and control
environments. This occurs through elements of the Group Risk
management framework such as the Top Risk Assessment (TRA),
Integrated Risk and Control System (IRCS), Reputational Risk
Management Framework, and Liquidity Risk Management.
and profitable business, secure consistency, align with the risk
appetite of the Group and of the operating entities as well as
avoid undesired and/or excessive risks and accumulations. The full
economic consequences of a pandemic event such as COVID-19
are uninsurable. The required capital for an effective protection
against such an accumulation of risks would require premium
rates, that are unattractive for the customers, if not unaffordable.
In addition, a pandemic affects multiple factors such as business
interruption, impact on global capital markets, increase in medical
costs, and mortality.
Financial risks: Allianz Group's ultimate objective is to assure that
financial risk taking is in line with risk bearing capacity at the Group
and legal entity level and it creates shareholder's equity. To man-
age financial risk effectively and avoid accumulated losses in times
of financial crisis, it is essential to clearly identify, measure, monitor
and control the risks inherent in the investment portfolios and in
insurance products including the development of new products.
Underwriting risks: Exposures to these risks are required to serve
customers and generate shareholder value. Quality control mech-
anisms are applied to ensure adherence to Allianz's underwriting
standards and monitor the quality of the portfolio and underwrit-
ing process. The underwriting processes must support sustainable
To support the development of a risk appetite and a risk manage-
ment framework for these core risks, the Allianz Group has elaborated
the following risk management philosophy:
RISK PROFILE AND MARKET ENVIRONMENT
Allianz's core business as a global insurer and asset manager predom-
inantly exposes it to a variety of risks such as underwriting risks, finan-
cial market and credit risks, and several other non-financial risks (i.e.,
operational, reputational, liquidity, and strategic risks). The execution
of the Renewal Agenda may impact the potential severity or likelihood
of these existing risks, contribute towards concentrations of certain
types of risk, or potentially even give rise to new risks within a given risk
category. However, from a broad perspective, the overall risk profile of
Allianz has remained and is expected to remain stable. "Stable" in this
context means a relatively high exposure to market and credit risks, a
moderate exposure to underwriting risks and a modest exposure to
operational, business, and other risks (i.e., measured as a share of the
Allianz Group's Solvency II risk capital). Please refer to section
Solvency II regulatory capitalization for further details.
Allianz risk profile and management assessment
The application of transitional measures on technical provisions for
Allianz Lebensversicherungs-Aktiengesellschaft and Allianz Private
Krankenversicherungs-Aktiengesellschaft resulted in an increase in the
SCR of € 66 mn and an increase in the Own Funds of € 13.6 bn at the
Group level.
IMPACTS OF TRANSITIONAL MEASURES
The regulatory and model changes in 2020 resulted in a € 1.0 bn
decrease of Own Funds which was mainly driven by the adjustment
of the UFR by - 15 basis points and the model changes at Allianz
Lebensversicherungs-Aktiengesellschaft and Allianz Private Kranken-
versicherungs-Aktiengesellschaft such as the introduction of a simpli-
fied look-through on asset participations and the implementation of
model changes in cashflow modeling.
IMPACT OF MODEL CHANGES ON ELIGIBLE GROUP
OWN FUNDS
The decrease of the risk capital requirement of € 0.5 bn is mainly driven
by the reversal of the capital add-on introduced previously to reflect
not modeled cross-effects in the surplus funds of Allianz Lebensver-
sicherungs-Aktiengesellschaft. This add-on is no longer necessary due
to the approach introduced for modeling these cross-effects.
CAPITAL ADD-ONS
C_Group Management Report
The uncertainty around the evolution of the COVID-19 pandemic
remains a significant risk. The approval, production, distribution, and
correct administration of the vaccines are critical in alleviating the so-
cial, economic, and financial repercussions of the pandemic. The steps
are subject to a number of challenges such as the efficacy of the vac-
cines, high-quality mass production, potential long-term side effects,
and the willingness of a majority of the population to get vaccinated.
Full economic recovery is not expected to occur until the health con-
cerns are forcefully and credibly addressed, i.e., for herd immunity to be
achieved. Global vaccination is expected to be eventually successful;
however, the timing and progress appear uncertain. Residual risks will
remain such as further virus mutations, emerging side effects, length of
the immunity, or refusal to take vaccines by the majority of the popula-
tion as most authorities do not intend to make vaccination compulsory.
The extended containment (lockdown) measures risk delaying eco-
nomic recovery, with significant credit implications in some industries.
The pace and timing of recovery, the overall economic cost, and credit
implications will depend on an effective transition to post-COVID poli-
cies, as less supportive fiscal packages could hurt employment and the
solvency of small or more exposed businesses.
93
Another strain is the future relationship between the United King-
dom and the European Union as the Trade and Cooperation Agree-
ment negotiated between them enters into force in 2021.
24
Corporate and Other
225
250
(364)
-
The management feels comfortable with the Group's overall risk
profile, and confident that the effectiveness of its risk management
framework meets both the challenges of a rapidly changing environ-
ment and day-to-day business needs. This confidence is based on
several factors:
MANAGEMENT ASSESSMENT
Finally, the potential for a multiplicity of different regulatory
regimes, capital standards, and reporting requirements will increase
operational complexity and costs.
Therefore, future Solvency II Capital Requirements might change
depending on the outcome of the 2020 review of the Solvency II frame-
work by EIOPA. Concrete effects of the Solvency II review for the Group,
however, can only be assessed after final results are available.
The frameworks for potential future capital requirements for Inter-
nationally Active Insurance Groups (IAIGS) and Global Systemically
Important Insurers (G-SIIs) are yet to be finalized by the International
Association of Insurance Supervisors (IAIS) and the Financial Stability
Board (FSB).In addition, the European Commission is conducting a re-
view of the Solvency II directive as foreseen in European legislation.
The review covers an extensive list of topics from a wide variety of ar-
eas, from capital requirements to reporting and on to proportionality,
for which EIOPA provided technical advice to the European Com-
mission in December 2020, suggesting amendments in each area.
Based on this and further input from stakeholders, the European Com-
mission is expected to provide a first legislative proposal by the third
quarter of 2021, followed by trilog negotiations at the European level
before changes to the directive can become effective. Depending on
circumstances, a further transposition into national law will be re-
quired, so that final implementation is not expected before end of
2022. In this context, the Allianz Group is actively participating in dis-
cussions with the European Commission, EIOPA, local regulators, Insur-
ance Europe, and GDV.
Our approved internal model has been applied since the beginning of
2016 when Solvency II became effective. There is some uncertainty
about future regulatory requirements resulting from the potential in-
troduction of future global capital requirements and from the cur-
rent Solvency II review.
REGULATORY DEVELOPMENTS
Therefore, we continue to closely monitor political and financial
developments as well as the global trade situation to manage our
overall risk profile to specific event risks.
C_Group Management Report
Annual Report 2020 - Allianz Group
94
17,749
Annual Report 2020 - Allianz Group
RISKS
Tax
2,237
15,495 15,478
20,356 20,481
2,220
38,071 38,196
(11,918)
20192
2019¹
20192
2019¹
(6,266) (6,259)
(4,907) (4,934)
(720)
(726)
(11,893)
406
3,545
1,527 1,536
403
3,534
3,546
3,530
12,095
12,105
5,484
(5,481) (5,434)
The changes to these risk categories shown in the table above are
driven by minor and immaterial model changes.
Capital add-on
1,506
UNDERWRITING, BUSINESS AND OPERATIONAL
No material model change was applied to the risk capital model for
credit risk in 2020. However, minor model changes and model updates
in the credit risk model as well as model changes in other risk modules
that affect the credit risk model resulted in a marginal decrease of
credit risk.
CREDIT RISK
The overall decrease in market risk especially for the Life/Health busi-
ness segment is mainly driven by the impacts of minor and immaterial
model changes and the cross-effect model change. This is partly com-
pensated by the regulatory change - the reduction in the ultimate for-
ward rate that is mostly allocated to market risk -, the refinement of
calibration of equity volatility, and the modeling of cross-effects in the
surplus funds of Allianz Lebensversicherungs-Aktiengesellschaft. The
combined impact on the market risk of Allianz Group was a decrease
of € 0.1 bn to € 25.3 bn (2019: € 25.4 bn).
MARKET RISK
In 2020, the impact of model changes to our internal model concerned
the following risk categories:
2_2019 risk profile figures as reported previously.
1_2019 risk profile figures adjusted based on the 2020 model changes impact.
38,888 39,525
2,038
2,038
Sectoral requirement
Total Group
3,218
3,218
Third country equivalent
1,042
Due to its effective capital management, the Allianz Group is well
capitalized and has met its internal, rating agency, and regulatory
solvency targets as of 31 December 2020. Allianz remains one of
the most highly rated insurance groups in the world, as reflected
by our external ratings.
21,264
(83)
The following sections explain the evolution of our risk profile per mod-
eled risk category. All risks are presented on a pre-diversified basis and
concentrations of single sources of risk are discussed accordingly.
As of 31 December 2020, the Group-diversified risk capital, which
reflects our risk profile before considering non-controlling interests,
amounted to € 40.9 bn (2019: € 39.5 bn). This represents a slight dec-
rement in the diversification benefit - before tax - of 0.6% to 23.2%.
The increase in Solvency II Capital Requirement was mainly due to
market impacts driven by adverse market movements especially in the
first half of 2020 triggered by the COVID-19 pandemic. Business
evolution also contributed slightly to a higher SCR, driven by the net
earned premiums in the Property-Casualty business segment. Other
effects such as model updates or the loss in diversification benefit fur-
ther contributed to the increment. This was partially compensated by
management actions such as risk mitigating measures, including, but
not limited to equity de-risking, increasing asset duration, and the pur-
chase of credit default swap protection to dampen the impacts of
COVID-19.
MARKET RISK
The following table presents our group-wide risk figures related to
market risks by business segment and source of risk.
Allianz Group: Risk profile - market risk by business segment and source of risk (total portfolio before tax and non-controlling interests)
pre-diversified, € mn
Interest rate
Inflation
Credit spread
Equity
Real estate
Currency
Total
As of 31 December
2020
1_2019 risk profile figures adjusted based on the 2020 model changes impact.
2019¹
40,950 38,888
2,650
3,530
3,335
3,534
(12,028) (11,893)
39,883
38,071
Tax
(5,879)
(5,481)
Capital add-on
970
1,042
Third country equivalent
Sectoral requirement
Total Group
3,326
3,218
2,038
(236)
2020
2020
1,422
152
248
4,439
5,638
Life/Health
1,032
2,480
(372)
(131) 10,997
7,279
8,083
6,841
1,609
1,515
1,339
20191
3,193
2,700
2019¹
2020
20191
2020
2019¹
2020
20191
2020
2019¹
Property-Casualty
(464)
(397)
(2,478)
(1,528)
3,548
2,341
25,446
193
4
2020
Note
Reinsurance assets
Financial assets for unit-linked contracts
Loans and advances to banks and customers
Investments¹
Financial assets carried at fair value through income¹
Cash and cash equivalents
ASSETS
As of 31 December
€ mn
Consolidated balance sheet
CONSOLIDATED BALANCE SHEET
D_Consolidated Financial Statements
103
Annual Report 2020 - Allianz Group
D
CONSOLIDATED FINANCIAL STATEMENTS
Allianz Group Annual Report Confidential draft. For internal use only ⚫04. Mrz 2021, 22:46
Annual Report 2020 - Allianz Group
102
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C_Group Management Report
101
Annual Report 2020 - Allianz Group
1_Solvency and Financial Condition Report and Regular Supervisory Report.
Subsidiaries within the scope of our control system are individually
responsible for adhering to the Group's internal governance and con-
trol policy and for creating local Disclosure Committees that are similar
to the Group-level committee. The entities' CEOs and CFOs provide
periodic sign-offs to the management of Allianz SE, certifying the
effectiveness of their local systems of internal control as well as the
completeness, accuracy, and reliability of financial data reported to
the Holding.
The Group Disclosure Committee ensures that the board mem-
bers are made aware of all material information that could affect our
disclosures, and assesses the completeness and accuracy of the infor-
mation provided in the quarterly statements, half-year and annual
financial reports as well as in the Solvency II qualitative reports¹. In
2020, the Group Disclosure Committee met on a quarterly basis before
the quarterly statements and financial reports were issued. An addi-
tional meeting was held prior to issuance of the Solvency II qualitative
reports.
The Group center functions, the Group Disclosure Committee, and our
operating entities support the Allianz SE Board of Management to
ensure the completeness, accuracy, and reliability of our Consolidated
Financial Statements.
2019
GOVERNANCE
22,443
6
Intangible assets
3,555
1,790
Non-current assets and assets of disposal groups classified as held for sale
44,532
45,573
11
Other assets
1,133
1,006
33
Deferred tax assets
24,777
21,830
10
Deferred acquisition costs
17,545
20,170
9
132,168
137,307
112,672
116,576
8
625,746
656,522
7
13,187
21,191
21,075
12
Last but not least, we focus on ensuring that controls are appro-
priately designed and effectively executed to mitigate risks. We
have set consistent process and documentation requirements
across the Allianz Group for elements such as the design of key
controls and evidence of their execution as well as related con-
trol design and effectiveness testing procedures. We conduct an
annual assessment of our internal control system to maintain
and continuously enhance its effectiveness. Group Audit and lo-
cal internal audit functions ensure that the overall quality of our
control system is subject to regular control testing, in order to as-
sure reasonable design and operating effectiveness. Internal Au-
dit does so through a comprehensive risk-based approach that
assesses the key controls of the company's internal procedures
and processes, including local and group-internal controls over
financial reporting risks, from an integrated perspective.
We use a centrally developed risk catalog which is linked to indi-
vidual accounts. This risk catalog is reviewed on a yearly basis and
is the starting point for the definition of the Group's as well as the
operating entities' scope of financial reporting risks. The method-
ology is described in our IRCS Guideline. In the course of the scop-
ing process, both materiality and susceptibility to a misstatement
are considered simultaneously. In addition to the quantitative cal-
culation, we also consider qualitative criteria, such as the expected
increase in business volume or the complexity of transactions.
Based on the centrally provided risk catalog, our local entities
identify risks that could lead to material financial misstatements.
The loss ratios for the Property-Casualty business segment are
presented in the following table:
Nevertheless, the underwriting guidelines were refined to miti-
gate significant future accumulations from pandemics and an ad-
ditional retrocession cover for natural catastrophe frequency losses
was placed.
Overall, the underwriting risk profile for the Allianz Group is not
expected to change much, as we do not plan to significantly
change our underwriting standards (Allianz Standard for P&C Un-
derwriting) or our risk appetite with regards to natural catastrophe,
man-made, or terror risks and our corresponding retrocession rein-
surance strategy.
The decrease in Property-Casualty underwriting risk was mainly
driven by premium non-catastrophe risk due to model and expo-
sure updates. This was partly offset by reserve risk which increased
in line with the underlying reserve level.
PROPERTY-CASUALTY
C_Group Management Report
99
Annual Report 2020 - Allianz Group
During 2020, the total Group pre-diversified underwriting risk capi-
tal increased marginally by € 54 mn.
1_As risks are measured in an integrated approach and on an economic basis, internal risk profile takes reinsurance effects into account.
2_2019 risk profile figures adjusted based on the impact of the 2020 model changes.
21.52%
20.66%
Share of total Group pre-diversified risk
12,105
12,159
676
1,026
5,521
6,115
4,952
4,195
29
17
927
806
Total Group
127
207
127
Property-Casualty loss ratios¹ for the past ten years
Preventive and detective key controls addressing financial report-
ing risks have been put in place to reduce the likelihood and
impact of financial misstatements. When a potential risk material-
izes, actions are taken to reduce the impact of the financial mis-
statement. Given the strong dependence of financial reporting
processes on information technology systems, we have also imple-
mented IT controls.
%
2020 2019 2018 2017 2016 2015 2014 2013
69.5 68.0 66.0 66.5 65.6 66.2 66.0
INTERNAL RISK AND CONTROL SYSTEM APPROACH
Our approach can be summarized as follows:
Accounting rules for the classification, valuation, and disclosure of
all items in the balance sheet, the income statement, and notes related
to the annual and interim financial statements are defined primarily in
our Group accounting manual. Internal controls are embedded in the
accounting and consolidation processes to safeguard the accuracy,
completeness, and consistency of the information provided in our
financial statements.
ACCOUNTING AND CONSOLIDATION PROCESSES
The accounting and consolidation processes we use to produce our
Consolidated Financial Statements are based on a central consolida-
tion and reporting IT solution and local general ledger solutions. The
latter are largely harmonized throughout the Group, using standard-
ized processes, master data, posting logics, and interfaces for data
delivery to the Holding. Access rights to accounting systems are man-
aged according to strict authorization procedures.
In line with both our prudent approach to risk governance and
compliance with regulatory requirements, we have created a frame-
work and processes to identify and mitigate the risk of material errors
in our Consolidated Financial Statements (this also includes our mar-
ket value balance sheet and risk capital calculation risks). The Inte-
grated Risk and Control System (IRCS) is regularly reviewed and
updated. It covers three buckets of risks: financial reporting risks, com-
pliance risks, and other operational risks (including IT risks). The IT con-
trols are based on COBIT 5 and include, for example, controls for
access right management, project and change management. In addi-
tion, our Entity Level Control Assessment (ELCA) framework contains
controls to monitor the effectiveness of our system of governance.
The following information is provided pursuant to § 289 (4) and
§315 (4) of the German Commercial Code ("Handelsgesetzbuch -
HGB").
INTEGRATED RISK AND CONTROL SYSTEM FOR
FINANCIAL REPORTING
C_Group Management Report
Annual Report 2020 - Allianz Group
100
The risk capital contribution of business risk decreased by € 0.5 bn
compared to the previous year. This is driven by the impact of lower
interest rates and other adverse market movements triggered by
the COVID-19 pandemic on the lapse and lapse mass risk for most
major Life/Health insurance portfolios.
BUSINESS RISK
Due to effective product design and the diversity of our prod-
ucts, there were no significant concentrations of underwriting risks
within our Life/Health business segment.
The underwriting risk capital contribution of biometric risk in-
creased by € 0.35 bn compared to the previous year. This is mainly
due to the impact of lower interest rates and other adverse market
movements triggered by the COVID-19 pandemic on the longevity
risk for most major Life/Health portfolios. Contributions from the
Property-Casualty and the Corporate and Other business seg-
ments are generated by the longevity risk of the internal pension
schemes they contain.
LIFE/HEALTH
The top three perils contributing to the natural catastrophe risk
as of 31 December 2020 were: windstorms in Europe, floods in
Germany, and earthquakes in Australia.
1_Represents claims and insurance benefits incurred (net), divided by premiums earned (net).
65.5
66.6
67.8 66.5 64.0 64.2 64.2 64.6 65.1 63.0
catastrophes
natural
Detailed information regarding the Allianz Group's liquidity risk ex-
posure, liquidity, and funding - including changes in cash and cash
equivalents - is provided in Liquidity and Funding Resources and in
notes 13, 19 and 34 to the Consolidated Financial Statements. As
can be inferred from the section on the management of liquidity
risks, while these are quantified and monitored through regular
stress test reporting as well as properly managed, they are not
quantified for risk capital purposes.
LIQUIDITY RISK
The decrease in risk capital for operational risks was driven by the
regular annual update of local parameters. The decrease is largely
due to reduced regulatory risks based on observed fines in the in-
dustry, e.g., for the General Data Protection Regulation (GDPR), but
also due to a reduction of the originally too conservatively set pru-
dency margin in the estimation of internal frauds. The increasing
risk due to the pandemic was compensated by the decrease of op-
erational risk in case of business continuity events based on the ob-
served effectiveness of business continuity measures during the
COVID-19 crisis. This finally led to a neutral risk capital impact of
COVID-19 on operational risk capital. Foreign currency exchange
effects played a minor role.
OPERATIONAL RISK
excluding
Loss ratio
2012 2011
68.3 69.9
65.9
Loss ratio
15,604
14,796
Total assets
Net income attributable to:
Non-controlling interests
Net income
Income taxes
Income before income taxes
Total expenses
Other expenses
Restructuring and integration expenses
Amortization of intangible assets
Fee and commission expenses
Acquisition and administrative expenses (net)
Investment expenses
Impairments of investments (net)
Loan loss provisions
Interest expenses
Change in reserves for insurance and investment contracts (net)
Claims and insurance benefits incurred (net)
Claims and insurance benefits incurred (ceded)
Claims and insurance benefits incurred (gross)
Total income
Other income
Fee and commission income
Realized gains/losses (net)
Income from financial assets and liabilities carried at fair value through income (net)
Interest and similar income
Premiums earned (net)
Change in unearned premiums (net)
Ceded premiums written
Gross premiums written
€ mn
Shareholders
Consolidated income statement
Basic earnings per share (€)
D_Consolidated Financial Statements
4,728
(59,532)
(61,818)
116,469
119,508
158
163
12,296
12,049
7,276
10,256
24
(1,609)
(69)
23
22,433
21,395
75,914
75,714
22222
(1,458)
(520)
(5,547)
(6,752)
82,919
82,986
2019
2020
Note
Diluted earnings per share (€)
CONSOLIDATED INCOME STATEMENT
Annual Report 2020 - Allianz Group
104
15
25,468
25,341
14
13,445
14,722
13
18,049
24,079
1_For 2020, the amounts include the impact from changes in accounting policy. For further information, please refer to note 2.
2_Include mainly derivative financial instruments.
Total liabilities and equity
Total equity
Non-controlling interests
Shareholders' equity
Total liabilities
Subordinated liabilities
Certificated liabilities
Liabilities of disposal groups classified as held for sale
Other liabilities
Deferred tax liabilities
Financial liabilities for unit-linked contracts
Reserves for insurance and investment contracts
Reserves for loss and loss adjustment expenses
Unearned premiums
Liabilities to banks and customers
Financial liabilities carried at fair value through income²
LIABILITIES AND EQUITY
1,011,185
1,060,012
80,897
77,541
16
611,096
1,011,185
1,060,012
77,364
84,594
20
3,363
3,773
74,002
80,821
933,820
975,417
13,238
14,034
19
207
9,209
19
2,236
1,134
4
47,904
0.0
18
6,538
8,595
33
132,168
137,307
17
588,023
9,206
Corporate and Other
437
652
20.5
0.0
0.0
122.5
118.7
AA
111.5
105.0
18.2
17.2
24.3
20.7
4.3
5.2
6.2
5.6
0.6
1.1
0.1
0.1
165.3
154.8
A
43.4
37.0
0.4
6.8
71.1
69.1
19.1
19.0
2.7
2.5
Corporate
Banks
ABS / MBS
Short-term loan
Other
Total
As of 31 December
2020
2019
2020
2019
2020
2019
2020
2019
2020
2019
2020
2019
2020
2019
2020
2019
AAA
49.5
46.5
47.7
46.4
3.2
3.0
19.3
0.9
1.2
0.0
0.0
0.0
18.4
12.2
B
3.6
5.1
4.0
2.3
0.2
0.2
0.1
0.1
0.0
0.0
0.0
8.0
7.7
CCC
0.3
0.0
0.2
0.2
0.0
0.0
0.1
0.1
0.0
0.0
0.1
0.1
1.3
0.5
0.6
0.0
0.2
135.3
134.2
BBB
41.9
37.3
0.4
0.7
124.8
116.6
8.2
Covered bond
6.6
0.7
0.4
0.5
1.7
1.7
178.7
164.2
BB
6.7
5.0
0.0
10.5
5.9
1.0
1.2
3,681
Government/
agency
C_Group Management Report
Premium terror
Premium natural
catastrophe
Allianz Group: Risk profile – allocated underwriting risk by business segment and source of risk (total portfolio before non-controlling interests)¹
pre-diversified, € mn
The following table presents the pre-diversified risk calculated for
underwriting risks associated with our insurance business.
20.39
22.46
3.57
5.49
0.03
0.01
8.36
8.03
2.32
3.24
6.12
5.67
0.02
2019
2020
UNDERWRITING RISK
1_Represents gross exposure for external reinsurance, broken down by rating classes.
Not assigned
Total
Non-investment grade
BBB+ to BBB-
A+ to A-
AA+ to AA-
As of 31 December
AAA
€bn
Reinsurance recoverables by rating class¹
Premium non-catastrophe
Of the Allianz Group's reinsurance recoverables, 75.5% (2019:
82.4%) were distributed among reinsurers that had been assigned an
investment-grade rating; the remaining 24.4% (2019: 17.5%) were non-
rated reinsurance recoverables. The movements in the reinsurance ex-
posure are mainly due to an expanded reinsurance program. For sub-
stantial single-name reinsurance exposures or exposures to non-rated
captives, risk-mitigating techniques such as collateral agreements or
funds-withheld concepts are in place. In particular, the economic rein-
surance exposure to General Electric was reduced in 2020 by increas-
ing the amount of trust assets and obtaining credit protection.
Reserve
Total
437
652
Life/Health
11,542
11,300
112
167
5,521
6,115
4,952
4,195
29
17
927
806
Property-Casualty
20192
2020
2019²
2020
20192
2020
2019²
2020
20192
2020
20192
2020
As of 31 December
Biometric
As of 31 December 2020, 1.2% (2019: 1.1%) of our total Group pre-
diversified internal credit risk was allocated to reinsurance exposures.
CREDIT RISK - REINSURANCE
As of 31 December 2020, 8.6% (2019: 11.0%) of our total Group pre-
diversified internal credit risk was allocated to Euler Hermes credit
insurance exposures.
0.0
0.0
0.0
0.0
0.0
0.1
0.0
D
0.0
0.0
0.0
0.0
0.0
0.0
C
0.4
0.1
0.1
0.1
0.0
0.0
0.0
0.0
0.4
0.0
CC
0.4
As of 31 December 2020, the rating distribution based on issue (instru-
ment) ratings of our fixed-income portfolio was as follows:
Rating distribution of Allianz Group's fixed-income portfolio¹ - fair value
€bn
0.1
0.1
Not rated
1.5
CREDIT RISK - CREDIT INSURANCE
1 In accordance with practice adhered to in our Group Management Report, figures stated include investments of Banking and Asset Management. Table excludes private loans. Stated market values include investments not in scope of the
Solvency II framework.
613.9
649.5
8.6
9.1
2.5
1.8
28.5
28.1
35.8
35.9
21.2
20.4
Type of issuer
6.6
0.2
0.2
0.1
0.1
0.5
0.2
11.6
228.9
11.2
249.5
0.2
71.3
66.7
0.1
2.0
238.1
258.5
Total
7.2
26
49,005
(55,851)
32,049
2019
2020
Cash and cash equivalents at end of period
Cash and cash equivalents reclassified to assets of disposal groups held for sale and disposed of in 2020
Cash and cash equivalents reclassified to assets of disposal groups held for sale in 2019
Cash and cash equivalents at beginning of period
Change in cash and cash equivalents
Effect of exchange rate changes on cash and cash equivalents
Net cash flow used in financing activities
Net cash flow used in investing activities
Net cash flow provided by operating activities
SUMMARY
€ mn
Consolidated statement of cash flows
CONSOLIDATED STATEMENT OF CASH FLOWS
D_Consolidated Financial Statements
36,448
(28,870)
(27,703)
(1,390)
(112)
Share of earnings from investments in associates and joint ventures
Adjustments to reconcile net income to net cash flow provided by operating activities
8,302
7,133
Net income
CASH FLOW FROM OPERATING ACTIVITIES
21,075
(57,091)
22,443
(145)
17,234
21,075
3,986
1,031
90
(758)
(4,850)
337
(422)
107
4_For further information regarding the undated subordinated bonds, please refer to note 19.
25
25
25
Treasury shares
Paid-in capital
9,524
285
9,238
4,956
(2,189)
6,471
77,364
3,363
74,002
17,691
(2,195)
29,577
Transactions between equity holders³
2,2594
(750)
1,509
3_For further information regarding the share buy-back program 2020, please refer to note 20.
1_Total comprehensive income in shareholders' equity for the year ended 31 December 2020 comprises net income attributable to shareholders of € 6,807 mn (2019: € 7,914 mn).
2 In the second quarter of 2020, a dividend of € 9.60 (2019: € 9.00) per qualifying share was paid to the shareholders.
84,594
3,773
80,821
22,648
(4,384)
31,371
Annual Report 2020 - Allianz Group
2,259
Balance as of 31 December 2020
(4,146)
(194)
(3,952)
(3,952)
Dividends paid²
1,827
319
28,928
Realized gains/losses (net) and impairments of investments (net) of:
Available-for-sale and held-to-maturity investments, investments in associates and joint ventures, real estate held for investment, loans and advances to banks and
customers, non-current assets and disposal groups classified as held for sale
(4,930)
28,146
24,916
668
(1,035)
208
341
22,414
14,702
2,475
4,869
1,456
381
(1,560)
(201)
(253)
(2,318)
322
32,049
36,448
Subtotal
3,689
160,053
Annual Report 2020 - Allianz Group
108
1_Other non-cash income/expenses previously included within the position Other (net) are reported separately from 2020 onwards. The comparison period has been adjusted correspondingly.
166,237
170,134
283
125
5,459
792
3,980
806
4
349
871
869
404
262
3,157
155,556
503
(595)
(689)
(674)
Repurchase agreements and collateral received from securities lending transactions
Reverse repurchase agreements and collateral paid for securities borrowing transactions
Financial assets and liabilities held for trading
Net change in:
Other non-cash income/expenses¹
5,774
5,580
Interest credited to policyholder accounts
Reinsurance assets
2
Loan loss provisions
2,068
2,244
Depreciation and amortization
2,074
(4,765)
Other investments, mainly financial assets held for trading and designated at fair value through income
(5,593)
15
(4,062)
Deferred acquisition costs
Reserves for loss and loss adjustment expenses
4,190
(218)
5,854
Property and equipment
Loans and advances to banks and customers (purchased loans)
Real estate held for investment
Non-current assets and disposal groups classified as held for sale
Investments in associates and joint ventures
Unearned premiums
Held-to-maturity investments
Financial assets designated at fair value through income
Proceeds from the sale, maturity or repayment of:
CASH FLOW FROM INVESTING ACTIVITIES
Net cash flow provided by operating activities
Subtotal
Other (net)¹
Deferred tax assets/liabilities
Reserves for insurance and investment contracts
Available-for-sale investments
(295)
0.6
(3,767)
4,877
11,618
5,117
(867)
(241)
438
(2,259)
438
(2,221)
(38)
8,302
2019
2020
7,133
10,750
For further information on the income taxes associated with different
components of other comprehensive income, please see note 33.
Non-controlling interests
Total comprehensive income attributable to:
Total comprehensive income
Total other comprehensive income
Changes in actuarial gains and losses on defined benefit plans
Items that may never be reclassified to profit or loss
Subtotal
Changes arising during the year
Miscellaneous
Subtotal
Changes arising during the year
Reclassifications to net income
Share of other comprehensive income of associates and joint ventures
(3,767)
Subtotal
(47)
122
D_Consolidated Financial Statements
Foreign
€ mn
Consolidated statement of changes in equity
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Annual Report 2020 - Allianz Group
106
1,017
17,966
9,238
285
18,983
9,524
10,681
(15)
2,391
(165)
263
(27)
263
(27)
137
(110)
42
(111)
95
156
75
171
(1,064)
Changes arising during the year
Reclassifications to net income
Cash flow hedges
9,604
(105,391)
(109,905)
(6)
(426)
(788)
(196)
(260)
(4,509)
(4,024)
(26,247)
(26,644)
31
11,077
(1,494)
30
(1,824)
(5,467)
29
2333
(2)
(15)
(1,110)
(999)
28
(13,726)
(12,976)
27
(1,640)
33
(2,471)
(2,776)
Subtotal
Changes arising during the year
Reclassifications to net income
Available-for-sale investments
Subtotal
Changes arising during the year
Reclassifications to net income
Foreign currency translation adjustments
Items that may be reclassified to profit or loss in future periods
Other comprehensive income
Net income
€ mn
Consolidated statement of comprehensive income
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
D_Consolidated Financial Statements
105
Annual Report 2020 - Allianz Group
18.83
16.32
42
18.90
16.48
42
7,914
6,807
387
326
8,302
7,133
Paid-in capital
Undated
subordinated
bonds
Shareholders
Treasury shares
63,679
2,447
6,945
(2,607)
Total equity
controlling
interests
equity
losses (net)
holders'
gains and
translation
adjustments
Retained
earnings
27,967
6,813
Total comprehensive income¹
28,928
Balance as of 1 January 2019
Non-
Share-
Unrealized
currency
409
10,743
61,232
1,017
(1,264)
193
(1,457)
17,966
3
(1,464)
29
29
29
4
28,928
Balance as of 31 December 2019
Dividends paid²
Transactions between equity holders
Paid-in capital
18,983
Total comprehensive income¹
5,506
5,719
Proceeds from the issuance of certificated liabilities and subordinated liabilities
1,353
659
Net change in liabilities to banks and customers
(2)
(27,703)
(5,483)
(115)
Net cash flow used in investing activities
Repayments of certificated liabilities and subordinated liabilities
(28,870)
CASH FLOW FROM FINANCING ACTIVITIES
(4,615)
(4,062)
Proceeds from the issuance of undated subordinated bonds classified as shareholders' equity
(159)
Other (net)
(67)
Net cash from sale or purchase of treasury shares
(6,844)
(4,146)
(5,924)
Dividends paid to shareholders
(644)
Transactions between equity holders
(354)
(409)
Net change in lease liabilities
2,272
(1,312)
Change in other loans and advances to banks and customers (originated loans)
Other (net)
(175,594)
(857)
(60)
(179,986)
(4,150)
(3,807)
2019
2020
(279)
Business combinations (note 4):
Property and equipment
Loans and advances to banks and customers (purchased loans)
Fixed assets from alternative investments
Real estate held for investment
Non-current assets and disposal groups classified as held for sale
Investments in associates and joint ventures
Subtotal
348
(168)
(2,141)
Acquisitions of subsidiaries, net of cash acquired
721
Proceeds from sale of subsidiaries, net of cash disposed
(188,691)
(192,022)
(1,238)
(2,005)
(1,429)
(2,380)
(75)
(19)
(2,328)
(2,043)
(72)
(2,996)
Net cash flow used in financing activities
(1,390)
(4,850)
3,120
183
(2,538)
46
3
10
33
19
22
(3)
580
764
(354)
1,353
32,723
22,674
10,049
Total
Lease liabilities
liabilities
customers
subordinated
Certificated and
Liabilities to
banks and
(419)
110
8,894
2,791
STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL
D_Consolidated Financial Statements
Annual Report 2020 - Allianz Group
35,525
2,725
23,241
9,559
217
514
(289)
22,448
(8)
(88)
(22)
(28)
(42)
(83)
42
1,354
(409)
1,104
659
34,132
(138)
Held-to-maturity investments
As of 31 December 2020
Foreign currency translation adjustments
3,658
8,245
10,188
2019
2020
Cash on hand
Balances with central banks
Balances with banks payable on demand
As of 31 December
€ mn
Cash and cash equivalents
3,215
(1,129)
18,340
17,829
2,408
2,285
(2,469)
(2,691)
Interest paid (from operating activities)
Interest received (from operating activities)
Dividends received (from operating activities)
Income taxes paid (from operating activities)
SUPPLEMENTARY INFORMATION ON THE CONSOLIDATED STATEMENT OF CASH FLOWS
(1,074)
Fair value and other changes
64
Treasury bills, discounted treasury notes, similar treasury
Changes in the consolidated subsidiaries of the Allianz Group
Non-cash transactions
Net cash flows
As of 31 December 2019
Fair value and other changes
Foreign currency translation adjustments
Changes in the consolidated subsidiaries of the Allianz Group
Non-cash transactions
Net cash flows
As of 1 January 2019
€ mn
64
Changes in liabilities arising from financing activities
109
Annual Report 2020 - Allianz Group
21,075
22,443
Total
2,598
2,685
Reverse repurchase agreements (due in three months or less)
6,952
5,847
securities, bills of exchange and checks
D_Consolidated Financial Statements
Available-for-sale investments
Funds held by others under reinsurance contracts assumed
Funds held by others under reinsurance contracts assumed relate to
cash deposits to which the Allianz Group is entitled, but which the ced-
ing insurer retains as collateral for future obligations of the
Allianz Group. The cash deposits are recorded at the amount due on
repayment, less any impairment for balances that are deemed not to
be recoverable.
Payments for the purchase or origination of:
Amounts charged as consideration for origination of certain long-
duration insurance contracts (i.e., initiation or front-end fees) are
reported as unearned revenues and, as such, included in unearned
premiums. These fees are recognized using the same amortization
methodology as DAC, including shadow accounting.
For short-duration insurance contracts, such as most of the property
and casualty contracts, premiums to be earned in future years are
recorded as unearned premiums. These premiums are earned in sub-
sequent periods in relation to the insurance coverage provided.
UNEARNED PREMIUMS
For long-duration contracts, a premium deficiency is recognized,
if actual experience regarding investment yields, mortality, morbidity,
terminations, or expense indicates that existing contract liabilities,
along with the present value of future gross premiums, will not be suf-
ficient to cover the present value of future benefits and to recover DAC.
D_Consolidated Financial Statements
115
Annual Report 2020 - Allianz Group
Liability adequacy tests are performed for each insurance portfolio,
based on estimates of future claims, costs, premiums earned, and pro-
portionate expected investment income. For short-duration contracts,
a premium deficiency is recognized if the sum of expected claim costs
and claim adjustment expenses, expected dividends to policyholders,
DAC, and maintenance expenses exceeds related unearned premiums
while considering anticipated investment income.
Liability adequacy tests
Reinsurance contracts
The Allianz Group's consolidated financial statements reflect the effects
of assumed and ceded reinsurance contracts. Assumed reinsurance pre-
miums, commissions, and claim settlements as well as the reinsurance
element of technical provisions, are accounted for in accordance with
the conditions of the reinsurance contracts and in consideration of the
original contracts for which the reinsurance was concluded. When the
reinsurance contracts do not transfer significant insurance risk, deposit
accounting is applied as required under the related reinsurance ac-
counting provisions of US GAAP or under IAS 39.
Insurance and investment contracts with discretionary participation
features are accounted for under the insurance accounting provisions
of US GAAP, as have been applied at first-time adoption of IFRS 4 on
1 January 2005, wherever IFRS 4 does not provide specific guidance.
Investment contracts without discretionary participation features are
accounted for as financial instruments in accordance with IAS 39.
Insurance and investment contracts
INSURANCE, INVESTMENT AND REINSURANCE
CONTRACTS
Further explanations on the impairment test for goodwill and its
significant assumptions as well as respective sensitivity analyses are
given in note 12.
Held-to-maturity investments
For business combinations, goodwill is recognized in the amount of the
consideration transferred plus the amount of any non-controlling inter-
est in the acquiree held by the direct parent in excess of the fair values
assigned to the identifiable assets acquired and liabilities assumed.
Goodwill is accounted for at the acquiree in the acquiree's functional
currency. There is at least an annual evaluation whether it is deemed
recoverable.
in proportion to the consumption of
future economic benefit
straight-line or in relation to
customer churn rates
terms
Amortization method
straight-line considering contractual
RESERVES FOR LOSS AND LOSS ADJUSTMENT
EXPENSES
4-15
Reserves are established for the payment of losses and loss adjust-
ment expenses (LAE) on claims which have occurred but are not yet
settled. Reserves for loss and loss adjustment expenses fall into two
categories: case reserves for reported claims and reserves for incurred
but not reported losses (IBNR).
IBNR reserves are established to recognize the estimated cost of
losses that have occurred but where the Allianz Group has not yet
been notified. IBNR reserves, similar to case reserves for reported
claims, are established to recognize the estimated costs, including ex-
penses, necessary to bring claims to final settlement. The
Allianz Group relies on its past experience, adjusted for current trends
and any other relevant factors, in estimating IBNR reserves.
life insurance
contracts
insurance
contracts
Participating
Traditional
long-duration
Deferred acquisition costs
Aggregate policy reserves
%
Interest rate assumptions
The average interest rate assumptions per operating entity used
in the calculation of deferred acquisition costs and aggregate policy
reserves are as follows:
The assumptions used for aggregate policy reserves are deter-
mined using current and historical client data, industry data, and, in the
case of assumptions for interest rates, reflect expected earnings on as-
sets that back the future policyholder benefits. The information used
by Allianz Group's actuaries in setting such assumptions includes, but
is not limited to, pricing assumptions, available experience studies, and
profitability analyses.
Insurance contract features not closely related to the underlying
insurance contracts are bifurcated from the insurance contracts and
accounted for as derivatives in line with IFRS 4 and IAS 39. The embed-
ded derivatives separated from certain life insurance and annuity con-
tracts are recognized as financial liabilities held for trading.
The aggregate policy reserves for universal life-type insurance con-
tracts are equal to the account balance, which represents premiums re-
ceived and investment return credited to the policy, less deductions for
mortality costs and expense charges. The aggregate policy reserve also
includes reserves for investment contracts with discretionary participa-
tion features as well as for liabilities for guaranteed minimum mortality
and morbidity benefits related to non-traditional contracts with annuiti-
zation options and unit-linked insurance contracts. For contracts with a
discretionary participation feature, the whole contract is classified as
one liability rather than separately recognizing the participation fea-
ture.
For traditional long-duration insurance contracts, such as tradi-
tional life and health products, aggregate policy reserves are computed
using the net level premium method, based on best-estimate
assumptions adjusted for a provision for adverse deviation for mortality,
morbidity, expected investment yields, surrenders, and expenses at the
policy inception date, which remain locked in thereafter unless a pre-
mium deficiency occurs.
The aggregate policy reserves for participating life insurance contracts
are calculated using the net level premium method based on assump-
tions for mortality, morbidity, and interest rates that are guaranteed in
the contract or used in determining the policyholder dividends (or pre-
mium refunds).
Aggregate policy reserves
serves.
Reserves for insurance and investment contracts include aggregate
policy reserves, reserves for premium refunds, and other insurance re-
RESERVES FOR INSURANCE AND INVESTMENT
CONTRACTS
Reserves for loss and loss adjustment expenses are not dis-
counted, except when payment amounts are fixed and timing is rea-
sonably determinable.
IBNR reserves are estimates based on actuarial and statistical
projections of the expected cost of the ultimate settlement and ad-
ministration of claims. The analyses are based on facts and circum-
stances known at the time, predictions of future events, estimates of
future inflation, and other societal and economic factors. Trends in
claim frequency, severity, and time lag in reporting are examples of
factors used in projecting the IBNR reserves. IBNR reserves are re-
viewed and revised periodically, as additional information becomes
available and actual claims are reported.
Case reserves for reported claims are based on estimates of fu-
ture payments that will be made with respect to these claims, including
LAE relating to such claims. These estimates reflect the informed judg-
ment of claims personnel based on general insurance reserving prac-
tices and knowledge of the nature and value of a specific type of claim.
These case reserves are regularly re-evaluated in the ordinary course
of the settlement process and adjustments are made as new infor-
mation becomes available.
2.5-6.0
1-40
Useful lives
114
Acquisition costs for unit-linked investment contracts are deferred
in accordance with IFRS 15, if the costs are incremental. For non-unit-
linked investment contracts accounted for under IAS 39 at amortized
For short-duration, traditional long-duration, and limited-pay-
ment insurance contracts, DAC is amortized in proportion to premium
revenue recognized. For universal life-type and participating life insur-
ance contracts as well as investment contracts with discretionary par-
ticipation features, DAC is generally amortized over the life of a book
of contracts based on estimated gross profits (EGP) or estimated gross
margins (EGM), respectively.
Costs that vary with and are directly related to the acquisition and
renewal of insurance contracts and investment contracts with discre-
tionary participation features are deferred by recognizing a DAC asset.
At inception, DAC is tested to ensure that it is recoverable over the life
of the contracts. Subsequently, loss recognition tests at the end of each
reporting period ensure that the DAC is covered by future profits.
Deferred acquisition costs (DAC)
DEFERRED ACQUISITION COSTS
Assets and liabilities related to reinsurance are reported on a gross
basis. Reinsurance assets include balances expected to be recovered
from reinsurance companies. The amount of reserves ceded to reinsur-
ers is estimated in a manner consistent with the claim liability associ-
ated with the reinsured risks. To the extent that the assuming reinsurers
are unable to meet their obligations, the respective ceding insurers of
the Allianz Group remain liable to their policyholders for the portion
reinsured. Consequently, allowances are made for receivables on rein-
surance contracts which are deemed uncollectible.
REINSURANCE ASSETS
Financial assets for unit-linked contracts are recorded at fair value,
with changes in fair value recognized in the income statement to-
gether with the offsetting changes in fair value of the corresponding
financial liabilities for unit-linked contracts. They are included in the
line item Income from financial assets and liabilities carried at fair
value through income (net).
FINANCIAL ASSETS AND LIABILITIES FOR UNIT-LINKED
CONTRACTS
LOANS AND ADVANCES TO BANKS AND CUSTOMERS
Loans and advances are non-derivative financial assets with fixed or
determinable payments which are not quoted in an active market and
which are not classified as financial assets held for trading, designated
at fair value through income, or designated as available for sale. These
assets are initially measured at fair value plus any directly attributable
transaction costs. Subsequent to initial recognition, they are measured
at amortized cost using the effective interest method.
ment.
These assets are carried at cost less accumulated depreciation and im-
pairments. They are depreciated on a straight-line basis over their use-
ful life, with a maximum of 30 years, and regularly tested for impair-
Fixed assets from alternative investments
depreciated on a straight-line basis over its useful life, with a maximum
of 50 years, and regularly tested for impairment.
Real estate held for investment is carried at cost less accumulated de-
preciation and impairments. Real estate held for investment is
Real estate held for investment
For details on the accounting for investments in associates and joint
ventures, please see the section principles of consolidation.
Investments in associates and joint ventures
Annual Report 2020 - Allianz Group
10-15
D_Consolidated Financial Statements
Present value of future profits (PVFP)
Customer relationships
Acquired business portfolios
Long-term distribution agreements
Estimated useful lives (in years) and amortization methods
The table below summarizes estimated useful lives and the amor-
tization methods for each class of intangible assets with finite useful
lives.
INTANGIBLE ASSETS AND GOODWILL
Intangible assets with finite useful lives are measured at cost less accu-
mulated amortization and impairments. Intangible assets with indefi-
nite useful lives are tested for impairment annually and whenever
there is a triggering event. They are also reviewed annually to deter-
mine whether the indefinite-life classification is still appropriate.
Years
max. 50
2-13
2-10
Equipment
Software
Real estate held for own use
Estimated useful lives (in years)
The table below summarizes estimated useful lives for real estate
held for own use, software, and equipment.
Other assets primarily consist of receivables, accrued dividends, inter-
est, rent and deferred compensation amounts as well as leased or own
used real estate, software and equipment. Depreciation is generally
computed using the straight-line method over the estimated useful
lives of the assets. The right-of-use assets related to leased property
and equipment are depreciated generally over the lease term.
OTHER ASSETS
For insurance contracts and investment contracts with discretionary
participation features, shadow accounting is applied to DAC, PVFP,
and deferred sales inducements, in order to include the effect of unre-
alized gains or losses in the measurement of these assets in the same
way as it is done for realized gains or losses. Accordingly, the assets are
adjusted with corresponding charges or credits recognized directly in
other comprehensive income as a component of the related unreal-
ized gain or loss. When the gains or losses are realized, they are recog-
nized in the income statement through recycling and prior adjustments
due to shadow accounting are reversed.
Shadow accounting
Sales inducements on non-traditional insurance contracts are deferred
and amortized using the same methodology and assumptions as for
deferred acquisition costs.
Deferred sales inducements
The value of an insurance business or an insurance portfolio acquired
is measured by the PVFP, which is the present value of net cash flows
anticipated in the future from insurance contracts in force at the date
of acquisition. It is amortized over the life of the relevant contracts.
cost, acquisition costs that meet the definition of transaction costs
under IAS 39 are considered in the aggregate policy reserves.
Financial assets designated at fair value through income
GENERAL INFORMATION
Available-for-sale investments
For certain entities, voting or similar rights are not the dominant
factor of control, such as when voting rights relate to administrative
tasks only and returns are directed by means of contractual arrange-
ments, as is the case mainly for investment funds managed by
Allianz Group internal asset managers. In such cases, the investment
fund qualifies as a subsidiary if the Allianz Group is in a principal in-
stead of an agent role with regard to the investment fund. Above all,
this qualification takes into account kick-out rights held by third-party
investors as well as the aggregate economic interest of the
Allianz Group in the investment funds.
Subsidiaries are consolidated as from the date on which control is
obtained by the Allianz Group, up to the date on which the
Allianz Group no longer maintains control. Accounting policies of sub-
sidiaries are adjusted as necessary to ensure consistency with the
Annual Report 2020 - Allianz Group
111
D_Consolidated Financial Statements
accounting policies adopted by the Allianz Group. The effects of intra-
Allianz Group transactions are eliminated.
Business combinations and measurement of non-controlling
interests
Where newly acquired subsidiaries are subject to business combina-
tion accounting, the provisions of IFRS 3 are applied. Non-controlling
interests in the acquiree that are present ownership interests and enti-
tle their holders to a proportionate share of the acquiree's net assets in
the event of liquidation can be measured either at their fair value at
the acquisition date or at the non-controlling interest's proportionate
share of the acquiree's identifiable net assets. This option is exercised
on a case-by-case basis.
Associates and joint arrangements
Associates are entities over which the Allianz Group can exercise signif-
icant influence. In general, if the Allianz Group holds 20% or more of
the voting power in an investee but does not control the investee, it is
assumed to have significant influence. Investments in associates are
generally accounted for using the equity method.
Although the Allianz Group's share in some entities is below 20%,
management has assessed that the Allianz Group has significant influ-
ence over these entities because it is sufficiently represented in the gov-
erning bodies that decide on the relevant activities of these entities.
For certain investment funds in which the Allianz Group holds a
stake of above 20%, management has assessed that the Allianz Group
has no significant influence because it is not represented in the govern-
ing bodies of these investment funds or their investment activities are
largely predetermined.
Pursuant to IFRS 11, investments in joint arrangements have to be
classified as either joint operations or joint ventures, depending on the
contractual rights and obligations of each investor. The Allianz Group
has assessed the nature of all its joint arrangements and determined
them to be joint ventures in most cases. Those are generally
accounted for using the equity method.
The Allianz Group accounts for investments in associates and joint
arrangements with a time lag of no more than three months. Income
from investments in associates and joint arrangements - excluding dis-
tributions - is included in interest and similar income. Accounting poli-
cies of associates and joint arrangements are generally adjusted
where necessary to ensure consistency with the accounting policies
adopted by the Allianz Group.
For further information, please refer to note 45.
FOREIGN CURRENCY TRANSLATION
Translation from any foreign currency to the functional
currency
The individual financial statements of each of the Allianz Group's sub-
sidiaries are prepared in their respective functional currency. The func-
tional currency is the currency of the primary economic environment in
which the subsidiary operates. Transactions recorded in currencies
other than the functional currency (foreign currencies) are recorded at
the exchange rate prevailing on the date of the transaction. At the
balance sheet date, monetary assets and liabilities denominated in
foreign currencies are translated into the functional currency using the
closing exchange rate. While non-monetary items denominated in for-
eign currencies and measured at historical cost are translated at
historical rates, non-monetary items measured at fair value are trans-
lated using the closing rate. Foreign currency gains and losses arising
from foreign currency transactions are reported in income from finan-
cial assets and liabilities carried at fair value through income (net), ex-
cept when the gain or loss on a non-monetary item measured at fair
value is recognized in other comprehensive income. In this case, any
foreign exchange component of that gain or loss is also recognized in
other comprehensive income.
There are some entities where the Allianz Group holds a majority
stake but where management has assessed that the Allianz Group
does not control these entities, because it has no majority representa-
tion in the governing bodies and/or it requires at least the confirmative
vote of another investor to pass any decisions over relevant activities.
Translation from the functional currency to the presentation
currency
For some subsidiaries where the Allianz Group does not hold a
majority stake, management has assessed that the Allianz Group con-
trols these entities. The Allianz Group controls these entities based on
distinctive rights stipulated by shareholder agreements between the
Allianz Group and the other shareholders in these companies or voting
rights held by the Allianz Group are sufficient to direct the relevant ac-
tivities unilaterally.
Scope of consolidation and consolidation procedures
€ mn
Consolidated statement of cash flows
CONSOLIDATED STATEMENT OF CASH FLOWS - CONTINUED
D_Consolidated Financial Statements
Held-to-maturity investments are debt securities with fixed or deter-
minable payments and fixed maturities for which the Allianz Group
has the positive intent and ability to hold to maturity. These assets are
initially measured at fair value plus any directly attributable transac-
tion costs. Subsequent to initial recognition, they are measured at
amortized cost using the effective interest method.
The accompanying consolidated financial statements present the
operations of Allianz SE with its registered office in Königinstrasse 28,
80802 Munich, Germany, and its subsidiaries (the Allianz Group).
Allianz SE is recorded in the Commercial Register of the municipal
court in Munich under the number HRB 164232.
They have been prepared in conformity with International
Financial Reporting Standards (IFRS), as adopted under European Un-
ion (E.U.) regulations in accordance with §315e (1) of the German
Commercial Code (HGB). Within these consolidated financial state-
ments, the Allianz Group has applied all standards and interpretations
issued by the IASB and endorsed by the E.U. that are compulsory as of
31 December 2020.
In accordance with the provisions of IFRS 4, insurance contracts
are recognized and measured on the basis of accounting principles
generally accepted in the United States of America (US GAAP) as at
first-time adoption of IFRS 4 on 1 January 2005.
The consolidated financial statements have been prepared as of
and for the year ended 31 December 2020. The Allianz Group's presen-
tation currency is the Euro (€). Amounts are rounded to the nearest
million (€ mn) unless otherwise stated.
The consolidated financial statements were authorized for issue
by the Board of Management on 16 February 2021.
The Allianz Group offers property-casualty insurance, life/health
insurance, and asset management products and services in over 70
countries.
2_Accounting policies, significant estimates,
and new accounting pronouncements
SIGNIFICANT ACCOUNTING POLICIES AND USE OF
ESTIMATES AND ASSUMPTIONS
The following paragraphs describe important accounting policies as
well as significant estimates and assumptions that are relevant for the
Allianz Group's consolidated financial statements. Estimates and as-
sumptions particularly influence the inclusion method as well as the
accounting treatment of financial instruments and insurance contracts,
goodwill, pension liabilities and similar obligations, and deferred
taxes. Significant estimates and assumptions are explained in the re-
spective paragraphs.
The Allianz Group's consolidated balance sheet is not presented
using a current/non-current classification. The following balances are
generally considered to be current: cash and cash equivalents,
deferred acquisition costs on property & casualty contracts, non-
current assets and assets of disposal groups classified as held for sale,
and liabilities of disposal groups classified as held for sale.
The following balances are generally considered to be non-
current: investments, deferred tax assets, intangible assets, and de-
ferred tax liabilities.
All other balances are mixed in nature (including both current and
non-current portions).
PRINCIPLES OF CONSOLIDATION
In accordance with IFRS 10, the Allianz Group's consolidated financial
statements include the financial statements of Allianz SE and its sub-
sidiaries. The Allianz Group controls a subsidiary when it is exposed to,
or has rights to, variable returns from its involvement with the subsidi-
ary and has the ability to affect those returns through its power over
the subsidiary. Subsidiaries are usually entities where Allianz SE,
directly or indirectly, owns more than half of the voting rights or similar
rights with the ability to affect the returns of these entities for its own
benefit. In order to determine whether entities qualify as subsidiaries,
potential voting rights that are currently exercisable or convertible are
taken into consideration.
Available-for-sale investments comprise debt and equity instruments
that are designated as available for sale or do not fall into the other
measurement categories. These investments are measured at fair
value through other comprehensive income. When an investment is
derecognized or determined to be impaired, the cumulative gain or
loss previously recorded in other comprehensive income is transferred
and recognized in the consolidated income statement. Realized gains
and losses on those instruments are generally determined by applying
the average cost method at the subsidiary or the portfolio level.
For the consolidated financial statements, the results and financial
position of each of the Allianz Group's subsidiaries are expressed in
Euro, the presentation currency of the Allianz Group. Assets and liabili-
ties of subsidiaries not reporting in Euro are translated at the closing
rate on the balance sheet date; income and expenses are translated
at the quarterly average exchange rate. Any foreign currency transla-
tion differences, including those arising from the equity method, are
recorded in other comprehensive income.
Recognition and derecognition
Impairments
The evaluation of whether a financial debt instrument is impaired
requires analysis of the underlying credit risk/quality of the relevant
issuer and involves significant management judgment. In particular,
current publicly available information with regard to the issuer and the
particular security is considered relating to factors including, but not
limited to, evidence of significant financial difficulty of the issuer and
breach of contractual obligations of the security, such as a default or
delinquency on interest or principal payments. The Allianz Group also
considers other factors that could provide objective evidence of a loss
event, including the probability of bankruptcy and the lack of an active
market due to financial difficulty. The presence of either a decline in
fair value below amortized cost or the downgrade of an issuer's credit
rating does not in itself represent objective evidence of a loss event,
but may represent objective evidence of a loss event when considered
with other available information.
Once impairment is triggered for an available-for-sale debt
instrument, the cumulative loss recognized in other comprehensive
income is reclassified to profit or loss. The cumulative loss corresponds
to the difference between amortized cost and the current fair value of
the investment. Further declines in fair value are recognized in other
comprehensive income unless there is further objective evidence that
such declines are due to a credit-related loss event. If in subsequent
periods the impairment loss is reversed, the reversal is measured as the
lesser of the full original impairment loss previously recognized in the
income statement and the subsequent increase in fair value.
For held-to-maturity investments and loans, the impairment loss
is measured as the difference between the amortized cost and the
estimated future cash flows discounted at the financial asset's original
effective interest rate.
An available-for-sale equity security is considered to be impaired
if there is objective evidence that the cost may not be recovered. The
Allianz Group's policy considers a decline to be significant if the fair
value is below the weighted average cost by more than 20%. A decline
is considered to be prolonged if the fair value is below the weighted
average cost for a period of more than nine consecutive months. If an
available-for-sale equity security is impaired, any further declines in
the fair value at subsequent reporting dates are recognized as impair-
ments.
Reversals of impairments of available-for-sale equity securities
are not recorded in the income statement but in other comprehensive
income and recycled upon derecognition.
Hedge accounting
For derivative financial instruments used in hedge transactions that
meet the criteria for hedge accounting, the Allianz Group designates
the derivative as a hedging instrument in a fair value hedge, cash flow
hedge, or hedge of a net investment in a foreign operation. The
Allianz Group documents the hedge relationship as well as its risk
management objective and strategy for entering into the hedge trans-
action. The Allianz Group assesses, both at the hedge's inception and
on an ongoing basis, whether the hedging instruments used are highly
effective in offsetting changes in fair values or cash flows of the
hedged items.
Derivative financial instruments designated as hedging instru-
ments in hedge accounting relationships are included in the line items
Other assets and Other liabilities. Freestanding derivatives are
Annual Report 2020 - Allianz Group
113
D_Consolidated Financial Statements
included in the line items Financial assets held for trading or Financial
liabilities held for trading.
For further information on derivatives, please refer to note 34.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents include balances with banks payable on
demand, balances with central banks, cash on hand, treasury bills to
the extent they are not included in financial assets held for trading, and
checks and bills of exchange that are eligible for refinancing at central
banks, subject to a maximum term of three months from the date of
acquisition.
FINANCIAL ASSETS AND LIABILITIES CARRIED AT FAIR
VALUE THROUGH INCOME
Financial assets and liabilities carried at fair value through income
include financial assets and liabilities held for trading as well as finan-
cial assets and liabilities designated at fair value through income.
While the former category includes trading instruments and financial
derivatives, the latter category is mainly designated at fair value to
avoid accounting mismatches.
INVESTMENTS
For further information, please refer to note 35.
FINANCIAL INSTRUMENTS
The degree of judgment used in measuring the fair value of finan-
cial instruments closely correlates with the use of non-market observa-
ble inputs. The Allianz Group uses a maximum of observable inputs
and a minimum of non-market observable inputs when measuring fair
value. Observability of input parameters is influenced by various fac-
tors such as type of the financial instrument, whether a market is es-
tablished for the particular instrument, specific transaction character-
istics, liquidity, and general market conditions. If the fair value cannot
be measured reliably, amortized cost is used as a proxy for determin-
ing fair values.
There is no one-to-one connection between valuation technique and
hierarchy level. Depending on whether valuation techniques are
based on significant observable or unobservable inputs, financial in-
struments are classified in the fair value hierarchy.
Financial assets are generally recognized and derecognized on the
trade date, i.e., when the Allianz Group commits to purchase or sell
securities.
A financial asset is derecognized when the contractual rights to
the cash flows from the financial asset expire or the Allianz Group
transfers the asset and substantially all of the risks and rewards of own-
ership. A financial liability is derecognized when it is extinguished.
Offsetting
Financial assets and liabilities are offset and the net amount is pre-
sented in the balance sheet only when there is a legally enforceable
right to offset the recognized amounts and there is an intention to ei-
ther settle on a net basis or to realize the asset and settle the
liability simultaneously.
Securities lending and repurchase agreements
The Allianz Group enters into securities lending transactions and repur-
chase agreements. Cash received in the course of those transactions is
recognized together with a corresponding liability. Securities received
as collateral under lending transactions are not recognized, and secu-
rities sold under repurchase agreements are not derecognized, if risks
and rewards have not been transferred. Securities borrowing transac-
tions generally require the Allianz Group to deposit cash with the secu-
rities lender. Fees paid are reported as interest expenses.
Measurement at fair value
The Allianz Group carries certain financial instruments at fair value
and discloses the fair value of all financial instruments. The fair value
of an asset or liability is defined as the price that would be received to
sell an asset, or paid to transfer a liability, in an orderly transaction
between market participants at the measurement date.
Assets and liabilities measured or disclosed at fair value in the
consolidated financial statements are measured and classified in
accordance with the fair value hierarchy in IFRS 13, which categorizes
112
Annual Report 2020 - Allianz Group
D_Consolidated Financial Statements
the inputs to valuation techniques used to measure fair value into three
levels.
Level 1 inputs of financial instruments traded in active markets are
based on unadjusted quoted market prices or dealer price quotations
for identical assets or liabilities on the last exchange trading day prior
to or at the reporting date, if the latter is a trading day.
Level 2 applies if the market for a financial instrument is not active
or when the fair value is determined by using valuation techniques
based on observable input parameters. Such market inputs are ob-
servable substantially over the full term of the asset or liability and in-
clude references to formerly quoted prices for identical instruments
from an active market, quoted prices for identical instruments from an
inactive market, quoted prices for similar instruments from active mar-
kets, and quoted prices for similar instruments from inactive markets.
Market observable inputs also include interest rate yield curves, vola-
tilities, and foreign currency exchange rates.
Level 3 applies if not all input parameters are observable in the
market. Accordingly, the fair value is based on valuation techniques us-
ing non-market observable inputs. Valuation techniques include the
discounted cashflow method, comparison to similar instruments for
which observable market prices exist, and other valuation models. Ap-
propriate adjustments are made, for example, for credit risks.
For fair value measurements categorized as level 2 and level 3,
the Allianz Group uses valuation techniques consistent with the three
widely used valuation techniques listed in IFRS 13:
Market approach: Prices and other relevant information gener-
ated by market transactions involving identical or comparable
assets or liabilities.
Cost approach: Amount that would currently be required to
replace the service capacity of an asset (replacement cost).
Income approach: Conversion of future amounts such as cash
flows or income to a single current amount (present value tech-
nique).
Estimates and assumptions of fair values and hierarchies are par-
ticularly significant when determining the fair value of financial instru-
ments for which at least one significant input is not based on observa-
ble market data (classified as level 3 of the fair value hierarchy). The
availability of market information is determined by the relative trading
levels of identical or similar instruments in the market, with emphasis
placed on information that represents actual market activity or bind-
ing quotations from brokers or dealers.
The recoverable amounts of all cash generating units (CGUs) to
test goodwill and other intangible assets with indefinite life for impair-
ment are typically determined on the basis of value in use calculations.
The determination of a CGU's recoverable amount requires significant
judgment regarding the selection of appropriate valuation techniques
and assumptions.
1 Nature of operations and basis of
presentation
The Allianz Group has recognized all rights and obligations related to
issued insurance contracts according to its accounting policies, and
thus has not separately recognized an unbundled deposit component
in respect of any of its insurance contracts.
The share-based compensation plans of the Allianz Group are classi-
fied as either equity-settled or cash-settled plans. Equity-settled plans
are measured at fair value on the grant date (grant-date fair value) and
the grant-date fair value is recognized as an expense over the vesting
period. Where equity-settled plans involve Allianz SE equity instru-
ments, a corresponding increase in shareholders' equity is recognized.
Where equity-settled plans involve equity instruments of Allianz Group
subsidiaries, the corresponding increase is recognized in non-control-
ling interests. Equity-settled plans include a best estimate of the number
of equity instruments that are expected to vest in determining the
Share-based compensation plans
Further explanations and sensitivity calculations are given in
note 40
Pensions and similar obligations are measured at present value and
presented net of plan assets by applying the provisions of IAS 19. These
valuations rely on extensive assumptions. Key assumptions such as dis-
count rates, inflation rates, compensation increases, pension increases,
and rates of medical cost trends are defined centrally at the
Allianz Group level, considering the circumstances in the individual
countries. In order to ensure their thorough and consistent determina-
tion, all input parameters are discussed and defined, taking into con-
sideration economic developments, peer reviews, and currently avail-
able market and industry data.
Pensions and similar obligations
OTHER LIABILITIES
Stage two: The Allianz Group Actuarial function forms an opinion on
the adequacy of the reserves proposed by the local entities. The
Allianz Group Actuarial function challenges the operating entities' selec-
tion through their continuous interaction with local teams and quarterly
attendance in the local reserve committees. The ability to form a view on
reserve adequacy is further enabled by regular reviews of the local
reserving practices. Such reviews consist of an evaluation of the reserving
process as well as of the appropriateness and consistency of the
assumptions, and an analysis of the movements of the reserves. Signifi-
cant findings from these reviews are communicated in the Allianz Group
Reserve Committee to initiate actions where necessary.
Stage one: Property-Casualty reserves are calculated by local
reserving actuaries at the Allianz operating entities. The reserves are set
based on a thorough analysis of historical data, enhanced by inter-
actions with other business functions (e.g. Underwriting, Claims and
Reinsurance). Actuarial judgment is applied where necessary, especially
in cases where data is unreliable, scanty, or unavailable. The judgment
of Property-Casualty actuaries is based on past experience of the char-
acteristics of each line of business, the current stage of the underwriting
cycle, and the external environment in which the subsidiary operates.
The reserves are proposed to a local reserve committee, whereat the
rationale of the selections is discussed and subsequently documented. A
final decision on the reserve selection is made in the reserve committee.
Local actuaries are responsible for their compliance with the Group Ac-
tuarial Standards and Guidelines.
Property-Casualty reserves are set by leveraging the use of actuar-
ial techniques and educated judgment. A two-stage process exists for
the setting of reserves in the Allianz Group:
reporting items are reported to and analyzed together with the
Allianz Group Reserve Committee.
Stage two: The Allianz Group Actuarial function regularly reviews
the local reserving processes, including the appropriateness and con-
sistency of the assumptions, and analyzes the movements of the
reserves. Any adjustments to the reserves and other insurance-related
Stage one: Life/Health reserves are calculated by qualified local
staff experienced in the subsidiaries' business. Actuaries in the local enti-
ties also conduct tests of the adequacy of the premiums and reserves to
cover future claims and expenses (liability adequacy tests). The process
follows group-wide standards for applying consistent and plausible
assumptions. The appropriateness of the reserves and their compliance
with group-wide standards is confirmed by the local actuary.
Life/Health reserves are subject to estimates and assumptions,
especially on the life expectancy and health of an insured individual
(mortality, longevity, and morbidity risk) and on the development of in-
terest rates and investment returns (asset-liability mismatch risk). These
assumptions also have an impact on the presentation of costs arising
from the origination of insurance business (acquisition costs and sales
inducements) and the value of acquired insurance business (PVFP). To
ensure consistency in the application of actuarial methods and as-
sumptions in the Life/Health reserving process, the Allianz Group has de-
signed a two-stage reserving process:
The oversight and monitoring of the Allianz Group's reserves cul-
minate in quarterly meetings of the Allianz Group Reserve Committee,
which is the supervising body that governs all significant reserves. It
particularly monitors key developments across the Allianz Group
affecting the adequacy of reserves.
RESERVING PROCESS
Reserves for premium refunds include the amounts allocated under
the relevant local statutory/contractual regulations or, at the entity's
discretion, to the accounts of the policyholders and the amounts result-
ing from the differences between these IFRS-based financial state-
ments and the local financial statements (latent reserves for premium
refunds), which will reverse and enter into future profit participation
calculations. Unrealized gains and losses recognized for available-for-
sale investments are recognized in the latent reserves for premium re-
funds to the extent that policyholders will participate in such gains and
losses on the basis of statutory or contractual regulations when they
are realized, based on and similar to shadow accounting. The latent
profit participation rates are significant accounting estimates, which
take into account legal and/or contractual obligations or - in some
jurisdictions - the common market practice. The profit participation
allocated to participating policyholders or disbursed to them reduces
the reserves for premium refunds.
Reserves for premium refunds
For contracts where the policyholder has the option to transfer the
amounts invested in unit-linked funds to non-unit-linked funds, the in-
surance contract is reported in both aggregate policy reserves and fi-
nancial liabilities for unit-linked contracts based upon the investment
election at the reporting date.
costs, that are directly attributable to the issuance of the contract. Sub-
sequently, those contracts are measured at amortized cost using the
effective interest method.
D_Consolidated Financial Statements
Annual Report 2020 - Allianz Group
116
Non-unit-linked investment contracts without discretionary parti-
cipation features are accounted for under IAS 39. The aggregate pol-
icy reserves for those contracts are initially recognized at fair value, or
the amount of the deposit by the contract holder, net of the transaction
1.9-4.2
0.0-4.3
2.5-6.0
Annual Report 2020 - Allianz Group
117
For the business segments Life/Health and Property-Casualty, the cen-
tral oversight process around reserve estimates includes the setting of
group-wide standards and guidelines, regular site visits, as well as
regular quantitative and qualitative reserve monitoring.
amount of expense to be recognized. For cash-settled plans, the
Allianz Group accrues the fair value of the award as compensation ex-
penses over the vesting period. Upon vesting, any change in the fair
value of any unexercised awards is also recognized as a compensation
expense. Where expected tax deductions differ, in terms of amount and
timing, from the cumulative share-based payment expense recognized
in profit or loss, deferred taxes are recognized on temporary differences.
D_Consolidated Financial Statements
Annual Report 2020 - Allianz Group
118
INCOME FROM FINANCIAL ASSETS AND LIABILITIES
CARRIED AT FAIR VALUE THROUGH INCOME (NET)
Income from financial assets and liabilities carried at fair value
through income (net) includes all investment income as well as rea-
lized and unrealized gains and losses from financial assets and liabili-
ties carried at fair value through income. In addition, commissions at-
tributable to trading operations and related interest expenses as well
as refinancing and transaction costs are included in this line item.
Foreign currency gains and losses on monetary items are also reported
within income from financial assets and liabilities carried at fair value
through income (net).
Interest income and interest expenses are recognized on an accrual
basis using the effective interest method. This line item also includes
dividends from available-for-sale equity securities as well as income
from investments in associates and joint ventures. Dividends are recog-
nized in income when the right to receive the dividend is established.
The share of earnings from investments in associates and joint ventures
represents the share of net income from entities accounted for using
the equity method.
INTEREST AND SIMILAR INCOME AND INTEREST
EXPENSES
Premiums ceded for reinsurance are deducted from premiums
Revenues for universal life-type and investment contracts repre-
sent charges assessed against the policyholders' account balances for
front-end loads, net of the change in unearned revenue liabilities and
cost of insurance, surrenders, and policy administration, and are in-
cluded within premiums earned (net).
Premiums for short-duration insurance contracts are recognized as rev-
enues over the period of the contract in proportion to the amount of
insurance protection provided. Premiums for long-duration insurance
contracts are recognized as earned when due.
PREMIUMS
Non-controlling interests represent equity in subsidiaries, not at-
tributable directly or indirectly, to Allianz SE as parent.
Undated subordinated bonds comprises Restricted Tier 1 notes
that do not qualify as financial liabilities under IFRS. The instruments
are classified as shareholders' equity and any related interest charges
are classified as distributions from shareholders' equity. The notes are
measured at their historical value or their closing value as regards ex-
change rates. The corresponding foreign exchange differences are rec-
ognized as foreign currency translation adjustments in equity.
written.
Please refer to the section above for an explanation of foreign
currency changes that are recognized in equity. The effective portion
of gains and losses of hedging instruments designated as hedges of a
net investment in a foreign operation is recognized in foreign currency
translation adjustments.
Financial liabilities for puttable financial instruments
The Allianz Group records financial liabilities where non-controlling
shareholders have the right to put their financial instruments back to
the Allianz Group (puttable instruments). If these non-controlling
shareholders still have present access to the risks and rewards associ-
ated with the underlying ownership interests, the non-controlling inter-
ests remain recognized and profit and loss is allocated between con-
trolling and non-controlling interests. The financial liabilities for putta-
ble instruments are generally required to be recorded at the redemp-
tion amount, with changes recognized in equity where the non-control-
ling shareholders have present access to risks and rewards of owner-
ship and in the income statement in all other cases. As an exception,
for puttable instruments that are to be classified as equity instruments
in the separate or individual financial statements of the issuer in ac-
cordance with IAS 32.16A - 16B and are to be presented as liabilities in
the consolidated financial statements of the Allianz Group instead of
non-controlling interests, valuation changes of these liabilities are al-
ways recognized in the income statement. This is the case for puttable
instruments issued by mutual funds controlled but not wholly owned
by the Allianz Group.
Unrealized gains and losses (net) include unrealized gains and
losses from available-for-sale investments and from derivative finan-
cial instruments that meet the criteria for cash flow hedge accounting.
Lease Liabilities
The Allianz Group as a lessee measures its lease liability at the present
value of the lease payments that are not paid at the commencement
date, discounted at the interest rate implicit in the lease or, if that rate
cannot be readily determined, the Group's incremental borrowing rate.
The lease liability is measured at amortized cost using the effective in-
terest method.
The Allianz Group has elected not to recognize right-of-use assets
and lease liabilities for short-term leases and leases of low-value
assets. Furthermore, the Allianz Group does not recognize right-of-use
assets and lease liabilities for car leases. The expenses relating to the
short-term leases and leases of low-value assets including car leases
are expensed on a straight-line basis over the lease term.
CERTIFICATED LIABILITIES AND SUBORDINATED
LIABILITIES
For further information on these expenses, please refer to note 39.
Certificated liabilities and subordinated liabilities are subsequently
measured at amortized cost, using the effective interest method to
amortize the premium or discount to the redemption value over the life
of the liability.
EQUITY
Issued capital represents the mathematical per-share value received
at the issuance of shares. Additional paid-in capital represents the pre-
mium exceeding the issued capital received at the issuance of shares.
Retained earnings comprise the net income of the current year
and of prior years not yet distributed, treasury shares, amounts recog-
nized in other comprehensive income, and any amounts directly
recognized in equity according to IFRS. Treasury shares are deducted
from shareholders' equity. No gain or loss is recognized on the sale, is-
suance, acquisition, or cancellation of these shares. Any consideration
paid or received is recorded directly in shareholders' equity.
BUSINESS SEGMENT INFORMATION - CONSOLIDATED BALANCE SHEET
Property-Casualty
€ mn
2020
Business segment information - consolidated balance sheet
Life/Health
D_Consolidated Financial Statements
Annual Report 2020 - Allianz Group
Annual Report 2020 - Allianz Group
D_Consolidated Financial Statements
This page intentionally left blank.
126
2019
Additionally, some minor reallocations between the reportable
segments have been made.
127
2020
754
As of 31 December
As of October 2020, Allianz Real Estate was transferred from the Cor-
porate and Other reportable segment into the Asset Management re-
portable segment.
11,661
20,320
1,415
10,165
10,907
2019
5,334
Financial assets for unit-linked contracts
Loans and advances to banks and customers
Investments
Financial assets carried at fair value through income
Cash and cash equivalents
ASSETS
4,961
RECENT ORGANIZATIONAL CHANGES
Both asset management as well as corporate and other activities
represent separate reportable segments. In total, the Allianz Group
has identified 11 reportable segments in accordance with IFRS 8.
For life/health insurance business and property-casualty insurance
products with premium refunds, all items listed above are included
in operating profit if the profit sources are shared with policyhold-
ers. There is one exception from this general rule with regard to
policyholder participation in extraordinary tax benefits and ex-
penses. As IFRS require that the consolidated income statement
present all tax effects in the line item income taxes, even when they
belong to policyholders, the corresponding expenses for premium
refunds are shown as non-operating as well.
ASSET MANAGEMENT
In the business segment Life/Health, reportable segments offer a com-
prehensive range of life and health insurance products on both an in-
dividual and a group basis, including annuities, endowment and term
insurance, unit-linked and investment-oriented products, as well as full
private health, supplemental health, and long-term care insurance.
LIFE/HEALTH
In the business segment Property-Casualty, reportable segments offer
a wide variety of insurance products to both private and corporate cus-
tomers, including motor liability and own damage, accident, general
liability, fire and property, legal expense, credit, and travel insurance.
PROPERTY-CASUALTY
The types of products and services from which the reportable seg-
ments derive revenues are described below.
The reportable segment Asset Management operates as a global pro-
vider of institutional and retail asset management products and ser-
vices to third-party investors. It also provides investment management
services to the Allianz Group's insurance operations. The products for
retail and institutional customers include equity and fixed-income
funds as well as multi-assets and alternative products. The United
States, Canada, Europe, and the Asia-Pacific region represent the pri-
mary asset management markets.
109,040
USA (Life/Health only),
1_Includes cash and cash equivalents at an amount of € 28 mn which were disposed of with the entity.
251
Proceeds from sale of the subsidiary, net of cash disposed¹
(3)
Non-controlling interests
Global Insurance Lines & Anglo Markets, Middle East and Africa.
CORPORATE AND OTHER
The reportable segment Corporate and Other includes the manage-
ment and support of the Allianz Group's businesses through its strat-
egy, risk, corporate finance, treasury, financial reporting, controlling,
communication, legal, human resources, technology, and other func-
tions. Furthermore, it includes the banking activities in France, Italy, and
Bulgaria, as well as digital investments.
Annual Report 2020 - Allianz Group
In all reportable segments, income from financial assets and liabil-
ities carried at fair value through income (net) is treated as oper-
ating profit if the income relates to operating business.
The following exceptions apply to this general rule:
profit (loss) of substantial subsidiaries classified as held for sale.
restructuring and integration expenses, and
amortization of intangible assets,
acquisition-related expenses (from business combinations),
realized gains/losses (net) and impairments of investments (net),
interest expenses from external debt,
income from financial assets and liabilities carried at fair value
through income (net),
To better understand the ongoing operations of the business, the
Allianz Group generally excludes the following non-operating effects:
The Allianz Group uses operating profit to evaluate the performance
of its reportable segments as well as of the Allianz Group as a whole.
Operating profit highlights the portion of income before income taxes
that is attributable to the ongoing core operations of the Allianz Group.
The Allianz Group considers the presentation of operating profit to be
useful and meaningful to investors because it enhances the under-
standing of the Allianz Group's underlying operating performance and
the comparability of its operating performance over time.
LOSS
REPORTABLE SEGMENTS MEASURE OF PROFIT OR
GENERAL SEGMENT REPORTING INFORMATION
Prices for transactions between reportable segments are set on an
arm's length basis in a manner similar to transactions with third parties.
Lease transactions are accounted for in accordance with IFRS except
for intragroup lease transactions which are classified as operating
leases (i.e. off-balance sheet treatment by lessee) for internal and seg-
ment reporting purposes. Transactions between reportable segments
are eliminated in the consolidation. Financial information is recorded
based on reportable segments; cross-segmental country-specific infor-
mation is not determined.
D_Consolidated Financial Statements
125
Operating profit should be viewed as complementary to, and not as a
substitute for, income before income taxes or net income as deter-
mined in accordance with IFRS.
107,740
20,592
500,885
140
Financial liabilities carried at fair value through income
LIABILITIES AND EQUITY
2019
2020
2019
114
2020
Property-Casualty
As of 31 December
808,223
850,722
174,706
179,502
Life/Health
Total assets
23,858
Liabilities to banks and customers
12,184
12,763
65,414
68,171
Reserves for loss and loss adjustment expenses
5,472
17,900
5,679
19,681
Unearned premiums
4,616
5,209
1,556
1,252
20,022
2,695
2,599
4,335
4,936
4,876
Deferred acquisition costs
5,898
7,535
11,739
16,953
12,713
132,168
137,307
100,466
105,209
11,016
10,987
Reinsurance assets
19,841
Deferred tax assets
886
5,531
Intangible assets
3,016
1,701
100
85
Non-current assets and assets of disposal groups classified as held for sale
11
21,282
27,296
29,670
Other assets
836
744
794
526,165
Realized gain from the disposal
15
(10)
3,555
1,790
524
398
1
འབྲུ་ཛྷལ།
1,589
637
397
1,392
As of 31 December 2015, the Allianz Group's total carrying
amount of liabilities connected with insurance amounted to € 722 bn,
which represented more than 90% of its total liabilities of € 783 bn.
Thereof, non-derivative investment contract liabilities measured at fair
value through income applying IAS 39 amounted to € 107 bn, mostly
consisting of financial liabilities for unit-linked contracts. Other insur-
ance-related liabilities amounted to € 40 bn and included mainly other
liabilities (e.g., payables as well as employee-related liabilities) as well
as subordinated liabilities and financial liabilities carried at fair value
through income related to certain derivatives. No change in the activi-
ties of the Allianz Group occurred subsequently that would have
required a reassessment.
In order to qualify for the temporary exemption, an entity has to
prove that its activities are predominantly connected to insurance as of
31 December 2015. Under the amended IFRS 4, this condition is met if
the insurer carries significant liabilities arising from contracts within the
scope of IFRS 4. Significant insurance-related liabilities are given,
among others, if the percentage of the total carrying amount of liabil-
ities connected with insurance relative to the total carrying amount of
all liabilities is greater than 90%. A reassessment at a subsequent
annual reporting date is required if, and only if, there was a change in
the entity's activities during the annual period that ended on that date.
Given the strong interrelation between the measurement of direct
participating insurance contracts and the underlying assets held, the
Allianz Group has decided to use the option to defer the full implemen-
tation of IFRS 9 until IFRS 17 becomes effective.
from applying IFRS 9 to annual periods beginning on or after 1 Janu-
ary 2023.
The amendments to IFRS 4, Applying IFRS 9 Financial Instruments
with IFRS 4 Insurance Contracts, issued in September 2016, allow enti-
ties that issue insurance contracts within the scope of IFRS 4 to defer
the implementation of IFRS 9 until 1 January 2021 under certain cir-
cumstances. However, together with the Amendments to IFRS 17 that
were issued in June 2020, the IASB also published 'Extension of the
Temporary Exemption from Applying IFRS 9 (Amendments to IFRS 4)'
to defer the fixed expiry date in IFRS 4 for the temporary exemption
3,031
It can be assumed that the main impact from IFRS 9 will arise from
the new classification rules leading to more financial instruments be-
ing measured at fair value through income as well as the new impair-
ment model. Interdependencies with IFRS 17 will need to be consid-
ered to assess the ultimate combined impact of both standards.
1,125
10
Total assets
9
Other assets
14
Deferred acquisition costs
441
10
1,134
Loans and advances to banks and customers
Investments
124
€ mn
Reclassified assets and liabilities
As of 31 December 2020, all requirements were fulfilled to present the
closed book portfolio covering classical life retail insurances together
with mortgage loans of Allianz Benelux S.A., Brussels, allocated to the
reportable segment Western & Southern Europe and Asia
(Life/Health) as a disposal group classified as held for sale.
2,236
913
IFRS 9, Financial instruments, issued by the IASB in July 2014, fully
replaces IAS 39 and provides a new approach on how to classify finan-
cial instruments based on their cash flow characteristics and the busi-
ness model under which they are managed. Furthermore, the standard
introduces a new forward-looking impairment model for debt instru-
ments and provides new rules for hedge accounting.
IFRS 9, Financial Instruments
For long-duration life insurance contracts, IFRS 17 is expected to
have a significant impact on actuarial modeling, as more granular
cash flow projections and regular updates of all assumptions will be
required, either resulting in profit or loss or impacting the "contractual
service margin", a separate component of the insurance liabilities rep-
resenting unearned profits from in-force contracts. Further, IFRS 17 in-
troduces different measurement approaches for the insurance con-
tract liabilities, reflecting a different extent of policyholder participa-
tion in investment or insurance entity performance. In the statement of
financial position, the Allianz Group expects changes in particular for
the L/H segment. Due to the shift to a valuation of insurance liabilities
at current fulfilment value, the Allianz Group expects to present the
predominant part of the underlying investments at fair value in the
statement of financial position. Current IFRS equity contains the share-
holder share of unrealized capital gains. These will be part of the in-
surance liabilities under IFRS 17, which contain an explicit future profit
margin (Contractual Service Margin, CSM). In profit or loss, a number
of partially offsetting effects are expected. The final figures will also
depend on the calibration of transition approaches. The Allianz Group
is currently assessing the impact of the application of IFRS 17. As of the
date of the publication of these consolidated financial statements, it is
not practicable to reliably quantify the effect on the Allianz Group con-
solidated financial statements.
Further explanations are given in note 33.
Changes in deferred tax assets and liabilities are generally recog-
nized through profit and loss in the consolidated income statement,
except for changes recognized directly in equity.
been designed to ensure consistency and reliability around the recov-
erability assessment process. Forecast operating results are based
upon approved business plans, which are themselves subject to a well-
defined process of control. As a matter of policy, especially strong evi-
dence supporting the recognition of deferred tax assets is required if
an entity has suffered a loss in either the current or the preceding pe-
riod. Recognition and recoverability of all significant deferred tax as-
sets are reviewed by tax professionals at Group level and by the
Allianz Group Tax Committee.
The analysis and forecasting required in this process are performed
for individual jurisdictions by qualified local tax and financial profes-
sionals. Given the potential significance surrounding the underlying es-
timates and assumptions, group-wide policies and procedures have
Deferred tax assets or liabilities are calculated for temporary dif-
ferences between the tax bases and the financial statement carrying
amounts, including differences from consolidation, unused tax loss
carry-forwards, and unused tax credits. Measurement is based on
enacted or substantively enacted tax rates and tax rules. Assessments
as to the recoverability of deferred tax assets require the use of judg-
ment regarding assumptions related to estimated future taxable prof-
its. This includes the character and amounts of taxable future profits, the
periods in which those profits are expected to occur, and the availability
of tax planning opportunities. The Allianz Group recognizes a valuation
allowance for deferred tax assets when it is unlikely that a correspond-
ing amount of future taxable profit will be available against which the
deductible temporary differences, tax loss carry forwards and tax cred-
its can be utilized.
Current income taxes are calculated based on the respective local tax-
able income and local tax rules for the period. In addition, current
income taxes presented for the period include adjustments for uncer-
tain tax payments or tax refunds for periods not yet finally assessed,
excluding interest expenses and penalties on the underpayment of
taxes. In the event that amounts included in the tax return are consid-
ered unlikely to be accepted by the tax authorities (uncertain tax posi-
tions), a provision for income taxes is recognized. The amount is based
on the best possible assessment of the tax payment expected. Tax re-
fund claims from uncertain tax positions are recognized when it is prob-
able that they can be realized.
CHANGE IN ACCOUNTING POLICIES
INCOME TAXES
Lease income from operating leases (excluding receipts for services
provided such as insurance and maintenance which are recognized di-
rectly as income) is recognized on a straight-line basis over the lease
term even if the receipts are not on such a basis, for example upfront
payments.
LEASE INCOME
Fee and commission income primarily consists of asset management
fees which are recognized when the service is provided. For those fees,
the service is considered to be provided periodically. Performance fees
may not be recognized as fee income before the respective bench-
mark period is completed. Before its completion, the obligation to pay
the fee is conditional, the fund performance is regularly not reliably es-
timable, and the related service is not fully performed. In any case per-
formance-related fees from alternative investment products (carried
interest) are not recognized as revenue prior to the date of the official
declaration of distribution by the fund. The transaction price for asset
management services is determined by the fees contractually agreed.
FEE AND COMMISSION INCOME
D_Consolidated Financial Statements
Reserves for loss and loss adjustment expenses
Deferred tax liabilities
CLAIMS AND INSURANCE BENEFITS INCURRED
These expenses consist of claims and insurance benefits incurred dur-
ing the period, including benefit claims in excess of policy account
balances and interest credited to policy account balances. Further-
more, it includes claims handling costs directly related to the pro-
cessing and settlement of claims. Reinsurance recoveries are deducted
from claims and insurance benefits.
In 2020, Allianz Group changed its accounting policy with regard to
specific features embedded in some reinsurance contracts on a funds
withheld basis. The interest payments on the funds withheld are based
on the investment yield from a specified investment portfolio. These
embedded interest features have been accounted for as embedded
derivatives that were separated from the host reinsurance contracts
and accounted for at fair value through income. In order to mitigate
an accounting mismatch, the underlying assets related to these sepa-
rated derivatives were designated at fair value through income. Allianz
Group has decided to change its accounting policy, so that such fea-
tures are not separated anymore. The new treatment provides more
relevant information and increases comparability. Correspondingly,
the underlying assets are no longer measured at fair value through in-
come. The changes were made in the third quarter of 2020 without re-
stating the prior years' consolidated financial statements due to mate-
riality considerations.
In the consolidated balance sheet for the year ended 31 Decem-
ber 2020, the accounting policy changes in connection with prior years
led to a reclassification from financial assets carried at fair value
through income to investments in the amount of € 803mn compared
to 31 December 2019 (€ 207mn compared to 31 December 2018). All
other impacts are immaterial.
NEW ACCOUNTING PRONOUNCEMENTS
In May 2017, the IASB issued IFRS 17, Insurance Contracts. In addition,
the IASB issued further amendments to IFRS 17 in June 2020. The ef-
fective date of the standard was postponed until 1 January 2023. IFRS
17 provides comprehensive guidance on accounting for insurance con-
tracts and investment contracts with discretionary participation fea-
tures. For non-life insurance contracts, IFRS 17 introduces mandatory
discounting of loss reserves as well as a risk adjustment for non-finan-
cial risk. Further, IFRS 17 will change the presentation of insurance con-
tract revenue; a gross written premium will no longer be presented in
the statement of comprehensive income.
IFRS 17, Insurance Contracts
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
D_Consolidated Financial Statements
119
Annual Report 2020 - Allianz Group
These changes had no material impact on the Allianz Group's financial
results or financial position.
Amendments to References to the Conceptual Framework in IFRS
Standards
IFRS 16, COVID-19-Related Rent Concessions
IFRS 9, IAS 39 and IFRS 7, Interest Rate Benchmark Reform
Phase 1
IAS 1 and IAS 8, Definition of Material
IFRS 3, Definition of a Business
The following amendments and revisions to existing standards be-
came effective for the Allianz Group's consolidated financial state-
ments as of 1 January 2020:
PRONOUNCEMENTS
RECENTLY ADOPTED ACCOUNTING
1,377
(10)
(280)
Reserves for insurance and investment contracts
Deferred tax liabilities
483
78
Non-controlling interests
Realized gain from the disposal
1,132
1,377
(150)
15
Derecognition of a derivate asset
(17)
(45)
(72)
Other comprehensive income
Other liabilities
Reserves for insurance and investment contracts
Deferred tax liabilities
470
1_Includes cash and cash equivalents at an amount of € 309 mn which were disposed of with the entity.
(695)
1
1,237
Recognition of investments in associates and joint ventures
Other comprehensive income
Other liabilities
Proceeds from sale of the subsidiary, net of cash disposed¹
Liabilities to banks and customers
Investments
€ mn
Impact of the disposal
The impact of the disposal, net of cash disposed, on the consoli-
dated statement of cash flows for the year ended 2020 was as follows:
Effective 1 July 2020, the Allianz Group disposed of 50% of the Sakura
investment in Japan, allocated to the reportable segments German
Speaking Countries and Central & Eastern Europe (Life/Health) and
Corporate and Other. With the completion of the sale, the
Allianz Group lost control of the Sakura investment, but retained a
50% interest in Sakura subject to at equity accounting. The entity had
been classified as held for sale since 31 December 2019. Until its de-
consolidation, no impairment loss had been recognized. Upon closing
of the sale, the Allianz Group recognized a gain of € 11 mn, included
in the line realized gains/losses (net) of the consolidated income state-
ment.
ALLIANZ SAKURA, TOKYO
Other assets
(7)
Financial liabilities for unit-linked contracts
(1,468)
Reinsurance assets
Financial assets for unit-linked contracts
Loans and advances to banks and customers
Investments
Impact of the disposal
€ mn
The impact of the disposal, net of cash disposed, on the consoli-
dated statement of cash flows for the year ended 2020 was as follows:
Deferred acquisition costs
of € 483 mn, included in the line realized gains/losses (net) of the con-
solidated income statement.
Annual Report 2020 - Allianz Group
Effective 31 January 2020, the Allianz Group disposed of Allianz Popu-
lar S.L., Madrid, a 60% owned subsidiary of the Allianz Group allocated
to the reportable segment Iberia & Latin America (Life/Health). The en-
tity had been classified as held for sale since 30 June 2019. Until its de-
consolidation on 31 January 2020, no impairment loss had been rec-
ognized. Upon closing of the sale, the Allianz Group recognized a gain
ALLIANZ POPULAR, MADRID
No impairment loss has been recognized in connection with this
transaction. The closing of the transaction is expected to be completed
in 2021.
69
1,125
Total liabilities
D_Consolidated Financial Statements
Other assets
Unearned premiums
1,402
Reserves for insurance and investment contracts
(75)
Reserves for loss and loss adjustment expenses
Iberia & Latin America and Allianz Partners,
(29)
Western & Southern Europe and Asia Pacific,
327
German Speaking Countries and Central & Eastern Europe,
17
6
7
The business activities of the Allianz Group are organized by product
and type of service: insurance activities, asset management activities,
and corporate and other activities. Due to differences in the nature of
products, risks, and capital allocation, insurance activities are further
divided into the business segments Property-Casualty and Life/Health.
In accordance with the responsibilities of the Board of Management,
each of the insurance business segments is grouped into the following
reportable segments:
IDENTIFICATION OF REPORTABLE SEGMENTS
5 Segment reporting
13
1,056
15,263
273
596,074
BBB
A
AA
AAA
Investment grade
As of 31 December 2020
€ mn
SPPI criterion. It includes the carrying amounts applying IAS 39 (in the
case of financial assets measured at amortized cost before adjusting
for any impairment allowances):
Carrying amounts of financial assets that meet the SPPI¹ criterion by rating
The following table provides information about the credit risk
exposures for financial assets with contractual terms that meet the
Financial assets that meet the SPPI criterion are those with contractual
terms that give rise on specified dates to cash flows that are solely pay-
ments of principal and interest (SPPI) on the principal amount out-
standing.
D_Consolidated Financial Statements
Annual Report 2020 - Allianz Group
120
1_Excluding any financial asset that meets the definition of held for trading in IFRS 9 or that is managed and whose
performance is evaluated on a fair value basis.
11,693
249,734
Non-investment grade
Not rated
Total
Government
and
42,695
10,998
5,740
27,946
17,918
111,009
425
16,047
25,667
6,313
49,424
Other
Other debt
securities
MBS/ABS
Corporate
bonds
Covered
bonds
government
agency bonds
Cash and cash
equivalents
46,689
18,705
712,158
Total
Other
14,652
9,029
276,011
191
2,831
871
73,150
106
65
3,364
260,338
Debt securities
Government and
government agency
bonds
Covered bonds
Corporate bonds
MBS/ABS
period
Cash and cash
equivalents
(4)
22,443
Fair value
period
13,842
401
23,728
4,338
5,665
16,598
6,473
137,307
Financial assets for unit-
linked contracts
Derivative financial
instruments
(580)
61,007
Equity securities
362
135
25,671
671,010
(63)
9,638
1,568
37,783
Other debt securities
Subtotal
(163)
34,822
Fair value
88,133
11,744
4_Consolidation and classification
Regarding the valuation methodologies used for financial instru-
ments carried at fair value, the policy for determining the levels within
the fair value hierarchy, and the significant Level-3 portfolios, no mate-
rial changes have occurred in combination with the COVID-19 pan-
demic.
Regarding impairments of assets next to investments (e.g., soft-
ware, deferred tax assets, right-of-use assets, and property, plant and
equipment), the Allianz Group did not realize any material impair-
ments. The COVID-19 pandemic and the respective economic slow-
down did not result in an impairment of goodwill.
Euler Hermes, the credit insurer within the Allianz Group, entered
into agreements with Germany, France, the U.K., Italy, the Netherlands,
Denmark, Belgium, and Norway. The state support schemes are con-
sistently accounted for as reinsurance contracts. Until 31 Decem-
ber 2020, the total of premiums ceded under the state support
schemes are € 582 mn. Against the backdrop of COVID-19, no active
market exists for such transactions with comparable volume and price.
Due to the COVID-19 pandemic, the default risk for trade credits
provided by suppliers has increased significantly. In order to protect the
real economy, many governments, particularly European Union mem-
ber states, established temporary state support schemes for the area
of private credit insurance. In return for these state support schemes,
the insurance companies have committed to maintaining their current
level of credit limits.
Given to the Solvency II capitalization ratio of 207%, the
Allianz Group is continuously strongly capitalized and compliant with
both the regulatory Solvency Capital Requirement and the minimum
consolidated Group Solvency Capital Requirement.
The business segment Asset Management was impacted by the
severe financial market disruption and related investor uncertainties
which led to a negative market valuation of assets under manage-
ment, and net outflows in the first quarter of 2020. In the subsequent
quarters of 2020, the business segment was able to fully recover from
the aforementioned impacts by reaching strong positive market ef-
fects and third-party net inflows.
As of 31 December 2020, the Allianz Group has observed an im-
pact of € (0.2) bn related to COVID-19 for the business segment
Life/Health, mainly driven by market downturn in the first quarter of
2020 and partially recovered afterwards. Actuarial assumptions have
been reviewed with no significant COVID-related impacts on biometric
and lapse parameters due to the very long projection horizon they
need to capture.
The business segment Property-Casualty of the Allianz Group was
negatively impacted with an amount of € 1.1 bn as of 31 Decem-
ber 2020. Losses resulted from unintended business interruption cover-
age, entertainment, and credit. These effects were partly compen-
sated by lower claims from reduced frequencies of claims mainly in
motor.
D_Consolidated Financial Statements
121
Annual Report 2020 - Allianz Group
The profitability of the Allianz Group was negatively impacted by
COVID-19. In light of the macroeconomic developments caused by the
pandemic and the expected impact on the financial development of
the Group's operating entities, the outlook for 2020 was withdrawn on
30 April 2020. In total, the operating profit of the Allianz Group was re-
duced by € 1.3 bn due to COVID-19.
The COVID-19 pandemic is affecting all aspects of personal and pro-
fessional lives, global economic development, and the financial mar-
kets. Despite all these uncertainties, the Allianz Group is very well pre-
pared for this situation. The consolidated financial statements for 2020
have been prepared on a going concern basis.
3 Impact due to COVID-19
The amendments and interpretations are not expected to have a ma-
terial impact on the financial position and financial results of the
Allianz Group. Early adoption is generally allowed but not intended by
the Allianz Group.
Annual periods beginning on or after
1 January 2023
as held for sale
SIGNIFICANT BUSINESS COMBINATIONS IN 2020
SULAMÉRICA SEGUROS DE AUTOMÓVEIS E
MASSIFICADOS S.A., RIO DE JANEIRO
Effective 10 July 2020, Allianz Seguros S.A., São Paulo, acquired 100%
of SulAmérica Seguros de Automóveis e Massificados S.A., Rio de Ja-
neiro, ("SASAM") which contains the former automobile and other Pro-
perty-Casualty business of SulAmérica. The acquisition strengthens the
competitive position of Allianz in Brazil, making it one of the top 3
Property-Casualty insurers of the largest economy in South America
with a market share of around 15 % in motor and 9% in Property-Cas-
ualty insurance and establishing Allianz as the number 2 in motor in-
surance.
15,333
Unearned premiums
720
181
209
24
1
292
Annual periods beginning on or after
1 January 2022
12
Intangible assets (excluding goodwill)
Other assets
Deferred tax assets
Reinsurance assets
Financial assets carried at fair value through income
Investments
Cash and cash equivalents
Identifiable assets acquired and liabilities assumed
€ mn
The amounts recognized as of the acquisition date for major clas-
ses of identifiable assets acquired and liabilities assumed are as fol-
lows:
2
Annual periods beginning on or after
1 January 2022
Annual periods beginning on or after
1 January 2022
Annual periods beginning on or after
1 January 2022
255,588
22,443
18,705
2,513
52
8,889
60
580
65,424
22,443
331
12,779
10,044
7,137
913
128,564
356
41,836
822
646
272,625
33,637
Annual periods beginning on or after
1 January 2021
Annual periods beginning on or after
1 January 2021
Effective date
IAS 1, Classification of Liabilities as Current or Non-
current
Annual Improvements to IFRS Standards 2018-2020
cycle (Amendments to IFRS 1, IFRS 9, IFRS 16 and
IAS 41)
IAS 37, Onerous Contracts - Cost of Fulfilling a
Contract
IAS 16, Property, Plant and Equipment: Proceeds
before Intended Use
IFRS 4, Insurance Contracts - Extension of the
Temporary Exemption from Applying IFRS 9
IFRS 3, Updating a Reference to the Conceptual
Framework
23,728
IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16, Interest
Rate Benchmark Reform - Phase 2
Further amendments and interpretations
In addition to the above-mentioned accounting pronouncements re-
cently issued, the following amendments and revisions to standards
and interpretations have been issued by the IASB but are not yet effec-
tive for or have not been adopted early by the Allianz Group.
Further amendments and interpretations
The Allianz Group's investments in associates and joint ventures
that are insurance entities also apply the temporary exemption of ap-
plying IFRS 9 to the extent they qualify. All other investments in associ-
ates and joint ventures held by the Allianz Group had already adopted
IFRS 9 as of 1 January 2018. The impact of adopting or deferring the
application of IFRS 9 for the investments in associates or joint ventures
is not material for the Allianz Group.
The publicly available IFRS 9 information disclosed by some sub-
sidiaries that already apply IFRS 9 is not material from the
Allianz Group's perspective. Furthermore, the vast majority of the
financial instruments of these subsidiaries are financial assets for unit-
linked contracts that are recorded at fair value through income under
IAS 39 as well as under IFRS 9.
The fair values of financial assets included in the table above that are
non-investment grade, and thus do not have low credit risk as of 31 De-
cember 2020, approximately equal the respective carrying amounts.
The same also applies to non-rated financial assets.
1_Excluding any financial asset that meets the definition of held for trading in IFRS 9 or that is managed and whose performance is evaluated on a fair value basis.
18,705
Standard/Interpretation
Fair value
change during
the reporting
Total identifiable liabilities
100
19
Other assets
Total consideration transferred and determination of goodwill
The following table summarizes the total consideration transferred
and the goodwill recognized at the acquisition date:
8
Deferred tax assets
220
731
Cash and cash equivalents
59
€ mn
61
30
25
6
120
Identifiable assets acquired and liabilities assumed
66
Total identifiable assets
Liabilities to banks and customers
271
The following table provides an overview of the fair values as of
31 December 2020 and the amounts of change in the fair values dur-
ing the reporting period separately for financial assets that meet the
SPPI criterion and for all other financial assets:
286
Less: Total identifiable net assets
Plus: Initial carrying amount of non-controlling interests
Contingent consideration
Cash and cash equivalents
978
61
44
Reserves for loss and loss adjustment expenses
€ mn
157
Unearned premiums
9
572,904
Deferred tax liabilities
33
49
Effective 14 December 2020, Allianz, Compañía de Seguros y Rease-
guros, S.A., Madrid, acquired 50% plus one share in the newly formed
venture BBVA Allianz Seguros y Reaseguros, S.A., Madrid. The venture
creates one of the largest non-life bancassurance alliances in Spain by
coupling two global leaders with common strategic priorities. The ven-
ture offers a full range of non-life products (excluding health insur-
ance) exclusively for BBVA's Spanish clients through BBVA's extensive
branch network and leading digital platforms over the next 15 years.
The amounts recognized as of the acquisition date for major clas-
ses of identifiable assets acquired and liabilities assumed are as fol-
lows:
The impact on revenue and net income of the consolidated in-
come statement of the Allianz Group had SASAM been consolidated
from 1 January 2020 cannot be reliably disclosed.
The revenue included in the consolidated income statement of
Allianz Group contributed by SASAM since the acquisition date until
31 December 2020 was € 270 mn. SASAM also contributed a net in-
come of € 4 mn over the same period.
Allianz, allowing a more sustainable growth in an intensely competi-
tive and concentrated Brazilian automobile insurance market.
D_Consolidated Financial Statements
Annual Report 2020 - Allianz Group
The total goodwill of € 364 mn arising from the acquisition consists
largely of economies of scale and synergies expected from combining
the operations of SASAM with Allianz Seguros S.A. The efficiency of
both companies combined will enhance the competitiveness of
122
For the year ended 31 December 2020, acquisition-related costs
in the amount of € 3 mn were included in administrative expenses.
1 Without transitionals.
(160)
524
Less: Total identifiable net assets
Goodwill
Cash and cash equivalents
€ mn
Total consideration transferred and determination of goodwill
The following table summarizes the total consideration transferred
and the goodwill recognized at the acquisition date:
364
5
CONTROLEXPERT HOLDING B.V., AMSTERDAM
Effective 27 October 2020, Allianz Strategic Investments S.à.r.l., Luxem-
bourg, acquired 90% of ControlExpert Holding B.V., Amsterdam. Con-
trolExpert is a globally recognized service provider in the automation
of artificial intelligence supported claims handling which gives the
Allianz Group the opportunity to offer customers new services and sig-
nificantly faster claims settlement.
Identifiable assets acquired and liabilities assumed
BBVA ALLIANZ SEGUROS Y REASEGUROS S.A.,
MADRID
For the year ended 31 December 2020, acquisition-related costs
in the amount of € 3 mn were included in administrative expenses.
The impact on revenue and net income of the consolidated in-
come statement of the Allianz Group had ControlExpert been consoli-
dated from 1 January 2020 cannot be reliably disclosed.
The revenue included in the consolidated income statement of
Allianz Group contributed by ControlExpert since the acquisition date
until 31 December 2020 was € 12 mn. ControlExpert also contributed
a net loss of € 3 mn over the same period.
The total goodwill of € 266 mn arising from the acquisition con-
sists largely of expected cost synergies which in the short- and medium-
term will be realized through the improvement of a data-driven, seam-
less and custom-fit claims journey along the full motor insurance value
chain of Allianz Group.
The initial carrying amount of the non-controlling interests is
measured at the proportionate share of the acquiree's recognized to-
tal identifiable net assets.
Total identifiable net assets
The amounts recognized as of the acquisition date for major clas-
ses of identifiable assets acquired and liabilities assumed are as fol-
lows:
Total identifiable liabilities
Deferred tax liabilities
Liabilities to banks and customers
Total identifiable assets
Intangible assets (excluding goodwill)
Other assets
Cash and cash equivalents
€ mn
Other liabilities
Total identifiable net assets
707
6
Subordinated liabilities
12
12
68
69
Total liabilities
131,102
12
127,746
768,261
128
Annual Report 2020 - Allianz Group
1,884
2019
2020
CLOSED BOOK PORTFOLIO OF
ALLIANZ BENELUX S.A., BRUSSELS
806,686
Total
Certificated liabilities
1,125
Financial liabilities for unit-linked contracts
137,307
132,168
Deferred tax liabilities
3,011
2,712
6,807
1,958
5,273
23,562
22,574
17,797
15,704
Liabilities of disposal groups classified as held for sale
10
10
Other liabilities
Closed book portfolio of Allianz Benelux
Other disposal groups
Allianz Sakura
Liabilities of disposal groups classified as held for sale
Allianz Popular
Less: Total identifiable net assets
Goodwill
Plus: Initial carrying amount of non-controlling interests
Contingent consideration
Cash and cash equivalents
Non-current assets and disposal groups classified as held for sale
CLASSIFICATION AS HELD FOR SALE
€ mn
274
Total consideration transferred and determination of goodwill
123
Annual Report 2020 - Allianz Group
The following table summarizes the total consideration transferred
and the goodwill recognized at the acquisition date:
The contingent consideration arrangement requires the Allianz Group
to pay the former owners of ControlExpert an amount of up to € 45 mn
(undiscounted) mainly dependent on the achievement of revenues
and gross margin of the acquiree during 2021. The fair value of the
contingent consideration was derived from probability-weighted ex-
pectations on revenues and gross margin.
266
Goodwill
(59)
D_Consolidated Financial Statements
€ mn
As of 31 December
353
Total
Non-current assets classified as held for sale
Real estate held for investment
Real estate held for own use
Associates and joint ventures
Subtotal
In 2019, Allianz UK acquired 100% in each Liverpool Victoria General
Insurance Limited and Legal & General Insurance Limited. For more in-
formation, please see Annual Report 2019 note 3.
SIGNIFICANT BUSINESS COMBINATIONS IN 2019
For the year ended 31 December 2020, acquisition-related costs
in the amount of € 4 mn were included in administrative expenses.
The impact on revenue and net income of the consolidated in-
come statement of the Allianz Group had BBVA Allianz Seguros been
consolidated from 1 January 2020 cannot be reliably disclosed.
The revenue included in the consolidated income statement of
Allianz Group contributed by BBVA Allianz Seguros since the acquisi-
tion date until 31 December 2020 was € 26 mn. BBVA Allianz Seguros
also contributed a net loss of € 4 mn over the same period.
The initial carrying amount of the non-controlling interests is
measured at the proportionate share of the venture's recognized total
identifiable net assets.
The contingent consideration arrangement requires the Allianz Group
to pay BBVA, the seller, an amount of up to € 100 mn (undiscounted)
mainly dependent on the achievement of cumulative profit targets by
the venture within the first five years from the acquisition date. The fair
value of the contingent consideration was derived from probability-
weighted expectations on the achievement of the cumulative profit
targets.
Subtotal
Other disposal groups
Closed book portfolio of Allianz Benelux
Allianz Sakura
21
Allianz Popular
(707)
Assets of disposal groups classified as held for sale
Total identifiable liabilities
Total identifiable net assets
Other liabilities
Intangible assets (excluding goodwill)
160
All other financial assets
Financial assets that meet the
SPPI criterion¹
As of 31 December 2020
Fair value
change during
the reporting
Total identifiable assets
204
18
66
560
Financial assets under IFRS 9 classification rules
€ mn
2019
2020
2019
2020
2019
2020
7,164
245
239
2020
(593)
(616)
7,347
(664)
Annual Report 2020 - Allianz Group
Consolidation
Corporate and Other
Asset Management
D_Consolidated Financial Statements
140,455
130
1_Total revenues comprise gross premiums written and fee and commission income in Property-Casualty, statutory gross premiums in Life/Health, operating revenues in Asset Management, and total revenues in Corporate and Other (Banking).
2_For the year ended 31 December 2020, includes expenses for premium refunds (net) in Property-Casualty of € (45) mn (2019: € (153) mn).
3,336
3,606
3,910
187
160
73
96
2,509
Group
2019
20
75,714
2,659
2,656
(1,773)
(1,549)
5
(3)
9,604
11,077
(686)
8,798
(29)
(20)
(1,717)
(41)
(1)
(3)
47
(45)
1
3
22,433
21,395
(157)
(163)
458
343
Shareholders
10
75,914
142,369
Non-controlling interests
3,983
Net income (loss)
27
Non-operating change in reserves for insurance and investment contracts (net)
133
651
518
(20)
557
355
1
(2,471)
(2,776)
1,973
1,992
(1,216)
(1,194)
5
(2)
7,133
8,302
110
1,863
Annual Report 2020 - Allianz Group
85
1,907
(40)
(1,176)
43
(1,237)
326
387
(2)
2
Interest expenses from external debt
Acquisition-related expenses
Non-operating amortization of intangible assets
3,523
3,766
(778)
2,605
(1,227)
(1,168)
(1,241)
(1,173)
4,750
4,934
5,224
3,778
43
575
Net income (loss) attributable to:
179
1
(43)
(60)
(241)
(409)
(49)
(44)
(98)
(163)
Income taxes
Income (loss) before income taxes
Non-operating items
Reclassifications
Non-operating restructuring and integration expenses
(592)
(1,148)
(194)
6
ཀྑུས
9,190
(1,494)
(1,640)
625
575
(102)
(112)
(1,243)
(4,608)
(297)
(270)
156
6,807
161
(153)
(169)
(29)
(1,134)
(35)
(61)
(26,637)
(26,223)
(1,833)
(1,864)
(2,284)
(2,106)
2,421
2,143
(13)
(9)
18
250
(1,221)
(4,460)
(4,494)
(2)
(15)
(2)
(15)
(13,728)
(13,003)
29
17
(55,851)
(57,091)
4
(4,024)
158
(1)
(1)
1
12,296
12,049
(2,709)
(2,953)
2,390
2,671
9,035
23,854
23,634
595
549
163
(3)
(4,509)
(21)
(3)
570
630
27
2
(729)
(813)
(729)
(813)
(8)
(24)
(8)
(24)
(16)
(16)
(18)
(13)
(240)
(176)
(171)
(9)
(128)
(104)
(768)
(398)
1
(49)
(942)
(947)
6
(17)
(68)
(581)
(20)
(28)
1
1
(6)
(25)
(1)
6,172
2,853
2,704
(831)
(602)
(1)
10,751
(20)
11,855
12
(3)
2
(28)
107
221
76
9
(5)
1,458
1,104
(138)
(105)
(860)
(150)
7,914
(255)
D_Consolidated Financial Statements
14,294
13,049
Derivative financial instruments
15,463
6,884
Fixed assets from alternative investments
2,548
2,716
Subtotal
16,107
7,566
Total
656,522
625,746
Financial assets designated at fair value through income
Debt securities
2,569
3,005
Equity securities
2,418
2,616
Loans
Subtotal
Total
97
5,084
5,620
21,191
13,187
Real estate held for investment
251
45
Equity securities
Financial assets carried
at fair value through income
7 _ Investments
D_Consolidated Financial Statements
Financial assets carried at fair value through income
Investments
€ mn
As of 31 December
2020
2019
€ mn
As of 31 December
Available-for-sale investments
621,777
AVAILABLE-FOR-SALE INVESTMENTS
593,178
2019
Held-to-maturity investments
2,563
2,589
Financial assets held for trading
Funds held by others under reinsurance contracts assumed
770
752
Debt securities
599
431
Investments in associates and joint ventures
14,570
13,462
2020
6
Available-for-sale investments
As of 31 December
(98)
28,023
27,752
762
(61)
28,453
Other
7,542
1,279
(82)
8,740
6,721
1,465
(30)
8,156
Subtotal³
486,697
77,141
(604)
563,234
471,387
58,004
(1,018)
528,373
Equity securities¹
Total
43,053
529,750
15,891
(400)
1,466
26,654
MBS/ABS
223,400
2020
2019
Unrealized
Amortized cost
gains
Unrealized
losses
Unrealized
Fair value
Amortized cost
gains
Unrealized
losses
Fair value
Debt securities¹
Corporate bonds
€ mn
253,234
(238)
282,651
247,684
21,033
(354)
268,363
Government and government agency bonds²
199,267
44,740
(187)
243,820
189,229
34,743
(573)
29,655
131
NOTES TO THE CONSOLIDATED BALANCE SHEET
132
Global Insurance Lines & Anglo Markets, Middle East and Africa
27,047
25,177
188
1,159
(118)
982
Consolidation
(6,875)
(6,808)
(1)
28
20
Total Property-Casualty
59,412
59,156
4,371
5,045
2,605
3,983
German Speaking Countries and Central & Eastern Europe
33,113
34,380
1,725
1,649
1,186
1,132
Western & Southern Europe and Asia Pacific
29,498
274
357
457
680
RECONCILIATION OF REPORTABLE SEGMENTS TO ALLIANZ GROUP FIGURES
Reconciliation of reportable segments to Allianz Group figures
€ mn
Total revenues
Operating profit (loss)
Net income (loss)
2020
2019
2020
2019
2020
2019
German Speaking Countries and Central & Eastern Europe
16,108
28,053
15,919
1,884
1,258
1,624
Western & Southern Europe and Asia Pacific
12,081
12,320
1,646
Subtotal
1,518
1,108
1,083
Iberia & Latin America and Allianz Partners
11,051
12,547
1,858
Annual Report 2020 - Allianz Group
1,561
1,205
3,766
3,523
Asset Management
Corporate and Other
Consolidation
Group
7,347
7,164
2,853
2,704
1,973
1,992
245
239
(831)
(602)
(1,216)
(1,194)
(593)
(616)
(1)
5
(2)
140,455
142,369
10,751
11,855
7,133
8,302
4,708
4,359
76,426
74,044
1,235
Iberia & Latin America
1,419
1,653
159
267
606
235
USA
9,915
12,265
907
1,153
820
1,620
1,006
1,034
885
49
59
(21)
(55)
Consolidation and Other
(936)
(810)
(41)
(40)
(30)
(30)
Total Life/Health
Global Insurance Lines & Anglo Markets, Middle East and Africa
(131)
204
(345)
Annual Report 2020 - Allianz Group
D_Consolidated Financial Statements
9 Reinsurance assets
Reinsurance assets
€ mn
As of 31 December
2019
2020
Unearned premiums
1,810
1,853
Reserves for loss and loss adjustment expenses
11,274
10,304
Aggregate policy reserves
6,917
5,260
169
20,170
Other insurance reserves
Total
128
17,545
Changes in aggregate policy reserves ceded to reinsurers are as fol-
lows:
Changes in aggregate policy reserves ceded to reinsurers
€ mn
insurer for all the risks it underwrites, including the share that is rein-
sured. The Allianz Group monitors the financial condition of its reinsur-
ers on a regular basis and reviews its reinsurance arrangements peri-
odically in order to evaluate the reinsurer's ability to fulfill its obliga-
tions to the Allianz Group companies under existing and planned rein-
surance contracts. The Allianz Group's evaluation criteria, which in-
clude the degree of creditworthiness, capital levels, and marketplace
reputation of its reinsurers, are such that the Allianz Group believes
that its reinsurance credit risk is not significant, and historically has not
experienced noteworthy difficulty in collecting claims from its reinsur-
ers. Additionally, and as appropriate, the Allianz Group may also re-
quire letters of credit, deposits, or other financial guarantees to further
minimize its exposure to credit risk. In certain cases, however, the Alli-
anz Group does establish an allowance for doubtful amounts related
to reinsurance as appropriate, although this amount was not signifi-
cant as of 31 December 2020 and 2019. The Allianz Group primarily
maintains business relations with highly rated reinsurers.
10 Deferred acquisition costs
2020
2019
1_Includes loans and advances to banks and customers due within one year of € 11,057 mn (2019: € 11,031 mn).
Carrying amount as of 1 January
134
116,576
Share of earnings
111
422
Share of other comprehensive income
Loans and advances to banks and customers
(110)
137
€ mn
Share of total comprehensive income
1
559
As of 31 December
2020
2019
Short-term investments and certificates of deposit
1,824
2,574
Loans
111,100
107,084
Other
3,720
3,072
Subtotal
116,644
112,730
Loan loss allowance
(67)
Total¹
(58)
112,672
5,260
4,887
Foreign currency translation adjustments
21,830
24,777
Changes in deferred acquisition costs
€ mn
Carrying amount as of 1 January
Additions
Changes in the consolidated subsidiaries
of the Allianz Group
Foreign currency translation adjustments
Changes in shadow accounting
Amortization
D_Consolidated Financial Statements
Asset Management
Corporate and Other
Consolidation
Group
2020
2019
2020
2019
2020
2019
2020
2019
953
967
5,791
4,773
(170)
(165)
22,443
21,075
65
66
295
213
Present value of future profits
Total
351
(390)
75
Changes recorded in the consolidated income statement
Other changes
303
231
1,744
66
€ mn
Carrying amount as of 31 December
6,917
5,260
Deferred acquisition costs
The reserves for loss and loss adjustment expenses ceded to reinsurers
in the business segment Property-Casualty amounted to € 10,471 mn
(2019: € 9,496 mn) as of 31 December 2020. Their change is shown in
the respective table in note 15.
The Allianz Group reinsures a portion of the risks it underwrites in
an effort to control its exposure to losses and events and to protect its
capital resources. For natural catastrophe events, the Allianz Group
has a centralized program in place that pools exposures from its sub-
sidiaries by internal reinsurance agreements. Allianz SE limits expo-
sures in this portfolio through external reinsurance. For other risks, the
subsidiaries of the Allianz Group have individual reinsurance programs
in place. Allianz SE participates with up to 100% on an arm's length
basis in these cessions, in line with local requirements. The risk coming
from these cessions is also limited by external retrocessions.
2019
Reinsurance involves credit risk and is subject to aggregate loss
limits. Reinsurance does not legally discharge the respective Allianz
company from primary liability under the reinsured policies. Although
the reinsurer is liable to this company to the extent of the business
ceded, the Allianz company remains primarily liable as the direct
2019
As of 31 December
Deferred acquisition costs
Property-Casualty
Life/Health
Subtotal
4,876
4,936
16,550
19,195
21,426
24,130
Deferred sales inducements
190
2020
2020
8 Loans and advances to banks and customers
3,868
Total²
2,563
325
(4)
2,884
2,589
300
(2)
296
2,887
1_Also include corporate mortgage-backed securities.
2_As of 31 December 2020, fair value and amortized cost of debt securities with a contractual maturity of less than one year amount to € 116 mn (2019: € 215 mn) and € 114 mn (2019: € 212 mn), respectively.
Annual Report 2020 - Allianz Group
133
D_Consolidated Financial Statements
UNREALIZED LOSSES ON AVAILABLE-FOR-SALE
INVESTMENTS AND HELD-TO-MATURITY
INVESTMENTS
DEBT SECURITIES
Total unrealized losses amounted to € 608 mn as of 31 Decem-
ber 2020. The Allianz Group holds a large variety of government and
government agency bonds and corporate bonds, mostly of or dom-
iciled in OECD countries.
In general, the credit risk of government and government agency
bonds is rather moderate since they are backed by the fiscal capacity
of the issuers, who typically hold an investment grade country and/or
issue-rating. During 2020, interest rates of most government and
government agency bonds held by Allianz Group decreased. This de-
velopment, supported by purchases and realizations, led to a de-
crease in unrealized losses on government and government agency
bonds of € 383 mn.
The unrealized losses on the Allianz Group's investments in
government and government agency bonds are spread over several
countries.
For the majority of corporate bonds, the issuer/issues have an
investment-grade rating. The decrease in unrealized losses of
€ 116 mn compared to 31 December 2019 is due to decreasing inter-
est rates.
The main impact from unrealized losses on corporate bonds
comes from the financial, consumer and energy sector.
Based on a detailed analysis of the underlying securities, the
Allianz Group did not consider these investments to be impaired as of
31 December 2020.
EQUITY SECURITIES
As of 31 December 2020, unrealized losses amounted to € 400 mn, an
increase of € 145 mn compared to 31 December 2019. They concern
equity securities that did not meet the criteria of the
Allianz Group's impairment policy for equity instruments as described
in note 2. Half of these unrealized losses have been in a continuous loss
position of less than 6 months
INVESTMENTS IN ASSOCIATES AND JOINT VENTURES
As of 31 December 2020, loans to associates and joint ventures
amounted to € 2,457 mn (2019: € 2,256 mn).
Associates and joint ventures
€ mn
REAL ESTATE HELD FOR INVESTMENT
Real estate held for investment
€ mn
55
241
2,591
Fair value
64,805
93,031
(1,004)
621,777
520,110
74,341
(1,273)
593,178
1_For the year ended 31 December 2020, € 607 mn related to specific REIT investments were reclassified from debt securities - other to equity securities.
2_As of 31 December 2020, fair value and amortized cost of bonds from countries with a rating below AA amount to € 95,096 mn (2019: € 84,788 mn) and € 82,202 mn (2019: € 74,997 mn), respectively.
3_As of 31 December 2020, fair value and amortized cost of debt securities with a contractual maturity of less than one year amount to € 38,472 mn (2019: € 35,645 mn) and € 36,403 mn (2019: € 34,333 mn), respectively.
HELD-TO-MATURITY INVESTMENTS
Held-to-maturity investments
€ mn
As of 31 December
2020
Cost as of 1 January
2019
Unrealized
gains
Government and government agency bonds
Corporate bonds¹
2,322
273
Unrealized
losses
(4)
Unrealized
241
52
Fair value
2,591
293
Amortized cost
gains
2,347
245
Unrealized
losses
(1)
Amortized cost
460
Accumulated depreciation as of 1 January
Carrying amount as of 1 January
Additions
Foreign currency translation adjustments
Depreciation
Fixed assets from alternative investments
€ mn
Cost as of 1 January
Accumulated depreciation as of 1 January
Carrying amount as of 1 January
Additions
Changes in the consolidated subsidiaries of the Allianz Group
Disposals
Reclassifications
Foreign currency translation adjustments
Depreciation
Impairments
2020
2019
3,868
3,240
(1,152)
(726)
2,716
2,514
129
83
312
(17)
(169)
(165)
(111)
(28)
Carrying amount as of 31 December
Accumulated depreciation as of 31 December
Cost as of 31 December
2,548
2,716
1,416
1,152
3,965
FIXED ASSETS FROM ALTERNATIVE INVESTMENTS
Reversals of impairments
Impairments
16,390
2020
2019
16,390
15,613
(3,341)
(3,158)
13,049
12,455
1,854
1,171
189
118
(382)
(570)
Changes in the consolidated subsidiaries of the Allianz Group
Disposals and reclassifications into non-current assets and
assets of disposal groups classified as held for sale
Reclassifications
(9)
(21)
98
(284)
(266)
(115)
(33)
13
11
Carrying amount as of 31 December
Accumulated depreciation as of 31 December
Cost as of 31 December
14,294
13,049
3,579
3,341
17,873
65
(144)
517
(473)
Interest and similar income
3,182
3,464
18,022
18,648
Operating income from financial assets and liabilities carried at fair value through income (net)
(28)
(57)
33
(1,707)
Operating realized gains/losses (net)
131
16,337
8,687
5,997
Interest expenses, excluding interest expenses from external debt
(121)
(150)
(117)
(121)
Operating impairments of investments (net)
(141)
(42)
(4,466)
(1,201)
Investment expenses
Subtotal
Fee and commission income
Other income
Operating investment result
Claims and insurance benefits incurred (net)
24,586
51,328
(20)
14,034
13,238
(30,006)
975,417
933,820
Total equity
Total liabilities and equity
84,594
1,060,012
77,364
1,011,185
Annual Report 2020 - Allianz Group
129
D_Consolidated Financial Statements
BUSINESS SEGMENT INFORMATION - TOTAL REVENUES AND RECONCILIATION OF OPERATING PROFIT (LOSS)
TO NET INCOME (LOSS)
Business segment information - total revenues and reconciliation of operating profit (loss) to net income (loss)
€ mn
Property-Casualty
Life/Health
2020
2019
Total revenues¹
59,412
59,156
2020
74,044
2019
76,426
Premiums earned (net)
51,631
24,083
(421)
(426)
(1,681)
(20)
(21)
Operating restructuring and integration expenses
(20)
(28)
Other expenses
(1)
(2)
(4)
Reclassifications
(1)
Operating profit (loss)
4,371
5,045
4,359
4,708
Non-operating investment result
Non-operating income from financial assets and liabilities carried at fair value through income (net)
68
(15)
57
109
Non-operating realized gains/losses (net)
490
878
738
155
Non-operating impairments of investments (net)
(577)
Operating amortization of intangible assets
(795)
(712)
(1,888)
(1,592)
2,602
2,993
20,478
20,025
1,640
1,946
1,500
1,635
152
153
11
5
(35,883)
(20)
(33,732)
(34,900)
(20,956)
Operating change in reserves for insurance and investment contracts (net)²
(308)
(465)
(12,711)
(13,291)
Loan loss provisions
Acquisition and administrative expenses (net), excluding acquisition-related expenses
(13,846)
(14,119)
(7,042)
(6,449)
Fee and commission expenses
(1,617)
(21,208)
63,344
66,843
4,475
5,011
4,582
8,033
7,668
(18,422)
(15,607)
45,573
44,532
1
4
566
(127)
1,790
3,555
7,301
13,624
7,607
13,739
172
159
15,604
14,796
133,253
126,940
(117,089)
(112,423)
1,060,012
1,011,185
Asset Management
2020
1,133
1,006
(1,755)
(1,571)
21,191
13,187
76
79
111,997
106,426
(90,756)
(89,383)
656,522
625,746
51
270
6,014
5,739
2019
(5,685)
116,576
112,672
137,307
132,168
(77)
(92)
20,170
17,545
21,830
24,777
166
166
782
1,092
(4,820)
(409)
Corporate and Other
Consolidation
132,168
22
4,453
24
4,408
325
284
(1,571)
(1,755)
8,595
6,538
29,140
27,960
(25,947)
(22,742)
49,005
47,904
319
(51)
1,134
2,236
11,883
12,336
(2,677)
(3,139)
9,206
9,209
13,974
13,177
4,518
137,307
588,023
611,096
(131)
Group
2019
2020
2019
2020
2019
490
523
(409)
(487)
24,079
18,049
43
43
2020
11,129
(2,910)
(1,597)
14,722
13,445
(18)
(26)
25,341
25,468
(37)
(56)
77,541
(98)
(82)
(144)
8,827
80,897
48,723
Carrying amount as of 31 December
1_The following paragraphs only include the CGUS that contain goodwill.
The business segment Corporate and Other mainly includes Digi-
tal Investments.
The business segment Asset Management is represented by the CGU
Asset Management, mainly including Allianz Global Investors and
PIMCO.
US Life Insurance.
Global Insurance Lines & Anglo Markets, Middle East and Africa
including Australia, Ireland, the United Kingdom, Middle East and
Africa, and
Insurance Western & Southern Europe, including Belgium, France,
Greece, Italy, Luxembourg, the Netherlands, and Turkey,
Insurance Central & Eastern Europe, including Austria, Bulgaria,
Croatia, Czech Republic, Hungary, Poland, Romania, Russia,
Slovakia, and Ukraine,
Insurance German Speaking Countries, including Germany and
Switzerland
CGUS in the Life/Health business segment are:
Specialty Lines II, including Allianz Partners and Allianz Direct.
Specialty Lines I, including Allianz Re, Allianz Global Corporate &
Specialty and Credit Insurance, and
Annual Report 2020 - Allianz Group
Global Insurance Lines & Anglo Markets, Middle East and Africa
including Australia, Ireland, the United Kingdom, Middle East and
Africa,
Insurance Iberia & Latin America, including Mexico, Portugal,
South America and Spain,
Insurance Western & Southern Europe, including Belgium, France,
Greece, Italy, Luxembourg, the Netherlands, and Turkey,
Insurance Asia,
Insurance German Speaking Countries, including Germany and
Switzerland,
CGUS in the Property-Casualty business segment are:
For the purpose of impairment testing, the Allianz Group has allocated
goodwill to CGUs¹. These CGUS represent the lowest level at which
goodwill is monitored for internal management purposes.
ALLOCATION PRINCIPLES
IMPAIRMENT TEST FOR GOODWILL
Additions are mainly related to goodwill arising from the acquisitions
of Liverpool Victoria General Insurance Group Limited, Guildford, and
Legal & General Insurance Limited, Guildford.
2019
Additions are mainly related to goodwill arising from the acquisitions
of SulAmérica Seguros Automóveis e Massificados S.A, Rio de Janeiro,
ControlExpert Holding B.V., Amsterdam and BBVA Allianz Seguros y
Reaseguros S.A., Madrid.
Insurance Central & Eastern Europe, including Austria, Bulgaria,
Croatia, Czech Republic, Hungary, Poland, Romania, Russia,
Slovakia, and Ukraine,
137
D_Consolidated Financial Statements
The carrying amounts of goodwill are allocated to the
Allianz Group's CGUS as of 31 December 2020 and 2019 as follows:
Africa
Global Insurance Lines & Anglo Markets, Middle East and
300
300
Insurance Central & Eastern Europe
21
406
Insurance Iberia & Latin America
159
148
Insurance Asia
1,083
Insurance Western & Southern Europe
588
1,115
328
2019
2020
Insurance German Speaking Countries
PROPERTY-CASUALTY
As of 31 December
€ mn
Allocation of carrying amounts of goodwill to CGUS
2020
1,148
292
13,499
292
14,796
991
598
15,604
1,120
995
13,207
2020
2019
13,489
1 Primarily includes the long-term distribution agreements with BBVA Allianz Seguros y Reaseguros S.A. and with
Commerzbank AG.
Other²
Total
Goodwill
As of 31 December
€ mn
Intangible assets
12 Intangible assets
D_Consolidated Financial Statements
Annual Report 2020 - Allianz Group
136
3_Consists mainly of real estate.
1_As of 31 December 2020, assets pledged as security and other restrictions on title were € 90 mn (2019: € 103 mn).
2_As of 31 December 2020, includes € 2,870 mn (2019: € 2,701 mn) for self-developed software and € 470 mn (2019: € 483 mn) for software purchased from third parties. Previous year figures have been adjusted due to a refinement in the
classification.
Distribution agreements¹
2_Primarily include acquired business portfolios, customer relationships, heritable building rights, land use rights, renewal
rights, and brand names.
GOODWILL
Goodwill
Accumulated impairments as of 31 December
Cost as of 31 December
13,207
13,489
Carrying amount as of 31 December
Impairments
70
(410)
Foreign currency translation adjustments
Disposals
807
692
Additions
(292)
12,330
13,207
Carrying amount as of 1 January
(292)
Accumulated impairments as of 1 January
12,622
13,499
2020
2019
Cost as of 1 January
€ mn
13,781
1,182
Specialty Lines I
38
2.8
10.5
America
Insurance Iberia & Latin
5.6
12.1
4.4
10.6
Insurance Asia
2.8
10.5
9.9
8.8
Southern Europe
Insurance Western &
0.3
63
7.4
0.4
7.4
rate
Discount rate
1.8
2.1
Insurance Central &
Eastern Europe
58,543
Annual Report 2020 - Allianz Group
138
1_The table provides an overview of weighted key parameters on CGU level of the country-specific discount rates and
eternal growth rates used.
10
0.5
7.9
0.5
7.9
Specialty Lines II
1.0
7.7
0.9
7.7
1.4
8.9
0.8
8.2
Global Insurance Lines &
Anglo Markets, Middle
East and Africa
Specialty Lines I
1.0
8.6
1.5
8.8
rate
Discount rate
Eternal growth
Eternal growth
456
US Life Insurance
16
15
Africa
Global Insurance Lines & Anglo Markets, Middle East and
56
56
Insurance Central & Eastern Europe
628
628
Insurance Western & Southern Europe
946
961
Insurance German Speaking Countries
3,479
336
38
LIFE/HEALTH
Subtotal
4,047
336
Specialty Lines II
470
2,838
Subtotal
2,117
2019
2020
Insurance German
Speaking Countries
%
Discount rates and eternal growth rates for the CGUS
in the Property-Casualty business segment¹
The discount rate is based on the capital asset pricing model
(CAPM) and appropriate eternal growth rates. The assumptions, in-
cluding the risk-free interest rate, market risk premium, segment beta,
and leverage ratio used to calculate the discount rates, are generally
consistent with the parameters used in the Allianz Group's planning
and controlling process. The discount rates and eternal growth rates
for the CGUs in the Property-Casualty business segment are as follows:
In determining the business plans, certain key assumptions were made
in order to project future earnings.
SIGNIFICANT ASSUMPTIONS
In the Corporate and Other business segment, the Value in use in
the Digital Investments is derived by using the discounted cash flow
and multiple method. Discounted cash flows are calculated based on
the companies' business plan as well as an estimate of sustainable re-
turns and eternal growth rates (terminal value). The discounted earn-
ings value is calculated by discounting the future earnings using an ap-
propriate discount rate. For the multiple, method transactions and rev-
enues of comparable companies are used.
point for the impairment test for the CGUs in the Life/Health business
segment, the Market Consistent Embedded Value (MCEV) and a mul-
tiple of the Market Consistent Value of New Business is used. MCEV is
an industry-specific valuation method to assess the current value of the
in-force portfolio. The Allianz Group uses an economic balance sheet
approach to derive the MCEV, which is directly taken out of the market
value balance sheet (MVBS) as determined using Solvency II guid-
ance. In cases where no adequate valuation reflecting a long-term
view in line with management judgment and market experience could
be derived from market-consistent methodology, the Appraisal Value
can be derived from a Traditional Embedded Value (TEV). This was the
case for the CGU US Life Insurance in 2020.
For all CGUs in the Life/Health business segment, the value in use
is based on an Appraisal Value method, which is derived from the
Embedded Value and New Business Value calculation. As a starting
The terminal values are largely based on the expected profits of
the final year of the detailed planning period. Where necessary, the
planned profits are adjusted to reflect long-term sustainable earnings.
The financing of the assumed eternal growth in the terminal values is
accounted for by appropriate profit retention.
For all CGUS in the Property-Casualty business segment and for
the CGU Asset Management, the Allianz Group mainly uses the dis-
counted earnings method to derive the value in use. Generally, the
basis for the determination of the discounted earnings value is the
business plan ("detailed planning period") as well as the estimate of
the sustainable returns and eternal growth rates, which can be as-
sumed to be realistic on a long-term basis ("terminal value") for the
operating entities included in the CGU. The discounted earnings value
is calculated by discounting the future earnings using an appropriate
discount rate. The business plans applied in the value in use calcula-
tions are the results of the structured management dialogues between
the Board of Management of Allianz SE and the operating entities in
connection with a reporting process integrated into these dialogues.
Generally, the business plans comprise a planning horizon of three
years and are based on the current market environment.
The recoverable amounts for all CGUS are determined on the basis of
value in use calculations. The Allianz Group applies generally acknowl-
edged valuation principles to determine the value in use.
13,207
97
112
13,489
VALUATION TECHNIQUES
Total
CORPORATE AND OTHER
ASSET MANAGEMENT
7,515
7,214
2,116
4,008
For entities included in the CGUS of the Property-Casualty busi-
ness segment, the business plans are mainly based on key assump-
tions including expense ratio, loss ratio, investment income, risk capital,
market share, premium rate changes, and taxes. The bases for deter-
mining the values assigned to the key assumptions are current market
trends and earnings projections.
3,874
2,332
1,379
1,240
3,183
3,340
2,848
2,914
1_Mainly level 2 for fair value measurement.
Total³
Other assets²
2,416
Subtotal
Equipment
Software
Real estate held for own use
Property and equipment
702
1,134
Derivative financial instruments used for hedging that meet the
criteria for hedge accounting, and firm commitments¹
621
793
Prepaid expenses
Right-of-use assets
9,827
9,826
2,853
3,874
Cost as of 1 January
Software
own use
assets
Equipment
Software
own use
held for
Right-of-use
held for
Real estate
Real estate
2019
2020
€ mn
Property and equipment
PROPERTY AND EQUIPMENT
3_Includes other assets due within one year of € 38,166 mn (2019: € 37,337 mn).
2_Include € 989 mn (2019: € 892 mn) assets for deferred compensation programs which are mainly level 2 for fair value
measurement.
44,532
45,573
2,434
6,388
8,850
5,955
3,833
2019
2020
As of 31 December
€ mn
Other assets
11 _ Other assets
D_Consolidated Financial Statements
135
Annual Report 2020 - Allianz Group
24,777
Receivables
21,830
(9,523)
(4,573)
(2,308)
317
(984)
(1)
22
2019
27,709
10,193
2020
24,777
9,845
8,850
(8,868)
Policyholders
7,214
7,241
4,296
Subtotal
2,329
2,310
Other taxes
1,504
1,986
Income taxes
Tax receivables
20,728
20,715
Subtotal
(673)
(788)
Less allowances for doubtful accounts
5,848
6,092
Other
3,636
Reinsurance
4,676
4,592
Agents
Accrued dividends, interest, and rent
4,008
3,604
3,870
(34)
(13)
(10)
(9)
(401)
(325)
(618)
(72)
(410)
(344)
(724)
(74)
Impairments
Depreciation/Amortization
3
15
5
14
(61)
(36)
(26)
(36)
Foreign currency translation adjustments
(1)
3
(11)
2
3,099
3,849
2,838
9,383
3,902
Cost as of 31 December
423
2,629
5,667
1,025
7673
2,609
6,043
988
Accumulated depreciation/amortization as of 31 December
2,416
1,379
2,848
2,3323
1,240
3,3402
2,914¹
Carrying amount as of 31 December
Reversals of impairments
(6)
3,183
(67)
939
238
Additions
2,290
1,378
2,934
2,856
2,416
1,379
3,183
2,848
Carrying amount as of 1 January
(2,880)
Equipment
4,259
(1,014)
423
(2,629)
(5,667)
(1,025)
Accumulated depreciation/amortization as of 1 January
161
7,812
Right-of-use
assets
297
660
(4,879)
688
9
(5)
(16)
172
(41)
Reclassifications
(45)
(57)
(56)
(160)
(45)
(39)
(42)
Disposals and reclassifications into non-current assets and
assets of disposal groups classified as held for sale
26
1
104
362
(83)
9
549
(21)
Changes in the consolidated subsidiaries of the Allianz
Group
28,498
29,490
30,560
32,649
2016
29,206
77,631
28,334
30,244
32,211
33,116
2017
78,380
75,937
28,076
2015
30,007
29,560
2018
2019
2017
2020
Total
2011
79,381
30,625
2012
2013
78,528
28,863
29,407
2014
78,752
28,736
80,173
28,837
36,867
31,888
2020
75,317
27,638
28,672
29,460
31,613
32,183
33,063
34,363
36,570
36,398
Surplus¹
2016
4,064
2,369
34,358
33,447
32,182
31,801
32,705
33,242
2018
75,646
27,871
28,764
29,665
29,896
31,713
32,972
34,165
2019
75,517
27,743
28,726
29,542
32,158
Accident year
5,407
2014
16,708
57,254
2017
16,818
2,356
2,815
3,891
8,454
16,573
56,314
2018
14,299
1,808
2,352
2,954
7,991
4,114
5,262
3,040
28,080
735
5,223
7,101
15,215
55,619
2015
24,436
3,931
5,182
7,585
16,358
57,492
2016
20,360
3,894
5,424
8,327
17,081
5,873
9,646
19,294
61,958
Annual Report 2020 - Allianz Group
141
D_Consolidated Financial Statements
ULTIMATE LOSS FOR THE INDIVIDUAL ACCIDENT YEARS AT THE RESPECTIVE REPORTING DATE (NET)
Ultimate loss for the individual accident years at the respective reporting date (net)
€ mn
2011
Calendar year
and prior
2012
2013
4,387
3,466
2,642
1,956
56,358
2019
12,918
1,485
2,001
2,341
3,413
2015
4,403
8,751
18,762
60,122
2020
11,751
1,217
1,725
6,049
1,165
70.5
933
67.3
68.1
69.1
70.0
71.1
71.2
The ultimate loss of an accident year comprises all payments made for
that accident year up to the reporting date, plus the loss reserves at
the reporting date. Given complete information regarding all losses in-
curred up to the reporting date, the ultimate loss for each accident-
year period would remain unchanged. In practice, however, the ulti-
mate loss (based on estimates) is exposed to fluctuations that reflect
the increase in knowledge regarding the loss cases. The loss ratio pre-
sented above deviates from the reported loss ratio because the ulti-
mate loss in the table above is based on the sum of the payments plus
the loss reserves, not the incurred loss as stated in the consolidated in-
come statement. This means that effects like changes in consolidated
subsidiaries, foreign currency translation and unwinding of discounted
loss reserves are presented differently.
CONCENTRATION OF INSURANCE RISK
IN THE PROPERTY-CASUALTY BUSINESS SEGMENT
Further risk disclosure requirements of IFRS 4 in connection with IFRS 7
are reflected in the following sections of the Risk and Opportunity Re-
port within the Group Management Report:
Internal risk capital framework,
Risk-based steering and risk management,
Underwriting risk in the section Quantifiable risks and opportuni-
ties by risk category.
CONTRACTUAL CASH FLOWS
As of 31 December 2020, the reserves for loss and loss adjustment ex-
penses in the Property-Casualty business segment, which are expected
to be due in 2021 amounted to € 19,459 mn, while those expected to
142
68.2
Annual Report 2020 - Allianz Group
66.3
2020
67.8
68.3
69.0
69.8
70.7
2019
51,328
66.5
68.3
67.5
68.5
69.1
70.8
71.1
71.8
51,631
be due between 2022 and 2025 amounted to € 22,675 mn and those
expected to be due after 2025 amounted to € 19,824 mn.
16 Reserves for insurance and investment
contracts
Reserves for insurance and investment contracts
Foreign currency translation adjustments
(3)
7
Changes in the consolidated subsidiaries
of the Allianz Group
2020
2019
Changes
531
600
507,184
497,558
As of 31 December
18,036
2014
16,901
17,508
As of 1 January
or contractual regulations
€ mn
As of 31 December
Aggregate policy reserves
Reserves for premium refunds
Other insurance reserves
Total
AGGREGATE POLICY RESERVES
68.4
Aggregate policy reserves
D_Consolidated Financial Statements
RESERVES FOR PREMIUM REFUNDS
Reserves for premium refunds
€ mn
2020
2019
Amounts already allocated under local statutory
€ mn
1,036
66.8
2018
2_The total development 2020 to 2019 of € 1,304 mn represents the cumulative surplus from re-estimating the ultimate loss for prior year claims. Considering foreign currency translation adjustments of net € (1,105) mn as well as changes in the
consolidated subsidiaries of the Allianz Group and other changes of in total € 232 mn, this leads to an effective run-off of net € 431 mn, which can be found in the table "Change in reserves for loss and loss adjustment expenses" within this note.
3_Presentation not meaningful.
CALENDAR YEAR PREMIUMS EARNED AND ULTIMATE LOSS RATIOS FOR THE INDIVIDUAL ACCIDENT YEARS AT
THE RESPECTIVE REPORTING DATE (NET)
Calendar year premiums earned and ultimate loss ratios for the individual accident years at the respective reporting date (net)
Premiums
earned (net)
2012
2013
2014
2015
€ mn
%
%
%
%
Accident year
2016
%
2017
1_Includes effects from foreign currency translation adjustments and other changes.
2018
1,304
298
179
(199)
298
3
10,580
Reduction/(increase)
2020 versus 20192
200
105
54
83
188
(1)
384
(6)
_3
%
%
2019
%
2016
46,588
67.9
69.5
69.1
69.4
71.1
2017
47,242
67.3
68.6
68.3
68.7
70.2
70.4
70.3
69.8
70.1
68.3
2020
%
2012
41,705
72.0
2013
42,047
48,305
69.2
2014
43,759
68.9
70.3
70.0
2015
46,430
69.9
53,445
61,442
7,239
Ceded
(8,966)
Net
52,475
4,552
(348)
4,204
4,157
(274)
3,883
69,965
(9,844)
60,122
65,598
(9,240)
56,358
17,508
40,321
55,918
65,414
Prior years
Subtotal
Loss and loss adjustments expenses paid
Current year
Prior years
Subtotal
Foreign currency translation adjustments and other changes¹
Changes in the consolidated subsidiaries of the Allianz Group
Subtotal
Ending balance of discounted loss reserves
As of 31 December
2020
2019
Gross
Ceded
Net
Gross
(9,496)
(4,007)
36,314
38,874
(18,171)
2,017
(16,154)
(17,905)
2,546
(15,360)
(35,778)
2,520
(33,258)
(36,606)
3,141
(33,465)
(1,708)
691
(1,017)
(18,105)
596
(18,701)
(17,104)
(2,915)
35,959
(255)
(176)
(431)
(801)
(258)
Current year
(1,059)
(4,183)
35,883
38,073
(3,173)
34,900
(17,607)
503
40,066
Loss and loss adjustments expenses incurred
Subtotal
Balance carry forward of discounted loss reserves
Local swap curve minus 17 bps (2019: 13 bps) credit risk adjustment plus
27 bps (2019: 28 bps) volatility adjustment
the key assumptions are current market trends and earnings projec-
tions. The discount rate is based on the capital asset pricing model
(CAPM) and appropriate eternal growth rates. The discount rate and
the eternal growth rates are calculated in line with market practice
and are subject to company-specific factors, its development status
and the markets in which the company operates.
SENSITIVITY ANALYSIS
Sensitivity analyses were performed with regard to discount rates and
key value drivers of the business plans.
For the CGUs in the Property-Casualty business segment and for
the CGU Asset Management, sensitivity analyses were performed with
respect to the long-term sustainable combined ratios and cost-income
ratios. For all CGUS discounted earnings, value sensitivities still ex-
ceeded their respective carrying amounts - however for the CGU Insur-
ance Asia in the business segment Property-Casualty, an increase of
0.5% points in the discount rate and the combined ratio results in the
recoverable amount of the CGU getting close to its respective carrying
value.
In the Life/Health business segment, sensitivity analyses were per-
formed based on MCEV sensitivity testing on the reference rate. The
analyses have shown that in case of a decrease in reference rates by
50 basis points, the appraisal value of each CGU - except for the CGU
Insurance Western & Southern Europe still exceeds its carrying
amount. In the case of the CGU Insurance Western & Southern Europe
the appraisal value is already close to its carrying amount.
-
In the Corporate and Other business segment, a sensitivity analy-
sis was performed with respect to interest rates. The analysis has shown
that in case of an increase in the interest rates by 50 basis points and
under consideration of a holding period usual for the asset class, the
recoverable amount approximates its carrying value.
13 _ Liabilities to banks and customers
Liabilities to banks and customers
€ mn
As of 31 December
The new-business value calculation is based on a best estimate of one
year of value of new business, multiplied by a factor (multiple) to cap-
ture expected future new business. The best estimate of new business
is generally derived from the achieved value of new business. The new
business multiple accounts for the risk and the growth associated with
future new business in analogy to the discount rate and the growth
rate in a discounted earnings method. For all CGUS in the Life/Health
business segment other than CGU US Life Insurance, a multiple of not
more than ten times the value of new business is applied.
For entities included in the CGU of the Asset Management busi-
ness segment, key assumptions include assets under management
growth, cost-income ratio, and risk capital. The key assumptions are
based on the current market environment. The discount rate for the
CGU Asset Management is 9.5% (2019: 10.6%) and the eternal growth
rate is 0.8% (2019: 1.6%).
For the Digital Investments included in the Corporate and Other
business segment, the bases for determining the values assigned to
2020
Euro swap curve minus 10 bps (2019: 10 bps) credit risk adjustment plus 7
bps (2019: 7 bps) volatility adjustment
For those entities reporting in Euro:
Local swap curve minus 10 bps (2019: 10 bps) credit risk adjustment plus
volatility adjustment for the following currencies only [CZK: 10 bps (2019:
12 bps), HUF: 2 bps (2019: 1 bps), PLN: 4 bps (2019: 8 bps)]
For other entities:
Reference rates used for the calculation of the best estimate fol-
low EIOPA specifications for the Solvency II guidance.
The following table provides an overview of the reference rates
for the CGUS in the Life/Health business segment:
Reference rates for the CGUS in the Life/Health business segment
CGUS in the Life/Health
business segment
Insurance German
Speaking Countries
Insurance Western &
Southern Europe
Insurance Central &
Eastern Europe
2019
Global Insurance Lines
& Anglo Markets,
Middle East and Africa
US Life Insurance
with Appraisal Value based on MCEV
Euro swap curve minus 10 bps (2019: 10 bps) credit risk adjustment plus 7
bps (2019: 7 bps) volatility adjustment
CHF swap curve minus 10 bps (2019: 10 bps) credit risk adjustment plus 9
bps (2019: 5 bps) volatility adjustment
For those entities reporting in Euro:
Euro swap curve minus 10 bps (2019: 10 bps) credit risk adjustment plus 7
bps (2019: 7 bps) volatility adjustment
For those entities reporting in Euro:
Euro swap curve minus 10 bps (2019: 10 bps) credit risk adjustment plus 7
bps (2019: 7 bps) volatility adjustment
Reference rate for entities
895
Payable on demand and other deposits
1,082
Consolidation
Total
2019
20,022
15 Reserves for loss and loss adjustment
expenses
As of 31 December 2020, the reserves for loss and loss adjustment ex-
penses of the Allianz Group totaled € 80,897 mn (2019: € 77,541mn).
The following table reconciles the beginning and ending reserves for
the Property-Casualty business segment for the years ended 31 De-
cember 2020 and 2019.
2020
19,681
5,679
5,472
(18)
25,341
(26)
25,468
Change in the reserves for loss and loss adjustment expenses in the Property-Casualty business segment
€ mn
As of 1 January
Life/Health
Property-Casualty
As of 31 December
€ mn
Repurchase agreements and collateral received from securities
lending transactions and derivatives
5,164
4,551
8,296
7,812
Total¹
14,722
1,263
13,445
Other
€ 1,359 mn (2019: € 898 mn) and over 5 years of € 689 mn (2019: € 633 mn).
Annual Report 2020 - Allianz Group
139
D_Consolidated Financial Statements
14 Unearned premiums
Unearned premiums
1_Consists of liabilities to banks and customers due within one year of € 12,674 mn (2019: € 11,914 mn), 1 - 5 years of
13,957
(91)
229
1,119
2,484
7,976
17,084
32,330
2019
1,253
195
314
490
788
1,044
2,753
8,524
18,105
707
33,465
389
2,228
1,004
2,007
7,929
16,409
31,403
2017
1,848
425
710
1,022
2,261
7,842
16,669
30,778
2018
344
2020
966
163
2016
2017
2018
2019
2020
Total
2011
52,836
52,836
2012
40,243
15,564
55,807
2013
32,249
2015
2014
2013
2012
222
302
584
938
1,278
2,883
8,818
727
17,104
RESERVES FOR LOSS AND LOSS ADJUSTMENT EXPENSES FOR THE INDIVIDUAL ACCIDENT YEARS AT THE
RESPECTIVE REPORTING DATE (NET)
Reserves for loss and loss adjustment expenses for the individual accident years at the respective reporting date (net)
€ mn
Accident year
2011
As of 31 December
and prior
33,258
3,327
2016
30,031
(9,496)
55,918
1_Include effects of foreign currency translation adjustments for prior year's claims of gross € (1,639) mn (2019: € 493 mn) and of net € (1,105) mn (2019: € 391 mn) and for current year claims of gross € (409) mn (2019: € 31 mn) and of net € (275)
mn (2019: € 40 mn).
Prior years' net loss and loss adjustment expenses incurred reflect the
changes in estimation charged or credited to the consolidated income
statement in each year with respect to the reserves for loss and loss
adjustment expenses established as of the beginning of that year. Dur-
ing the year ended 31 December 2020, additional income of € 431 mn
(2019: € 1,059 mn) net was recorded in the Property-Casualty business
segment in respect of losses occurring in prior years. During the year
ended 31 December 2020, this amount, expressed as a percentage of
the net balance of the beginning of the year, was 0.7 % (2019: 1.9%).
CHANGES IN HISTORICAL RESERVES
FOR LOSS AND LOSS ADJUSTMENT EXPENSES (LAE)
The analysis of loss and LAE reserves by actuaries and management is
conducted by line of business and separately for specific claim types
such as asbestos and environmental claims. The origin year of losses is
taken into consideration by analyzing each line of business by accident
year. While this determines the estimates of reserves for loss and LAE
by accident year, the effect in the consolidated income statement in
the respective calendar year combines the accident year loss ratio for
the current year with the favorable or adverse development from prior
years (run-off).
Although discounted loss reserves have been reclassified to
"Reserves for insurance and investment contracts" in the balance
sheet, the underlying business development of these non-life reserves
is still considered in the loss ratio. Therefore the tables below show the
loss development by accident year including the business develop-
ment of discounted loss reserves.
The run-off triangle, also known as the "loss triangle", is a tabular
representation of loss-related data (such as payments, loss reserves,
ultimate losses) in two time-related dimensions. One of these is the cal-
endar year, the other is the accident year (year of loss occurrence).
Run-off triangles - as the basis for measuring loss reserves - express
how the loss reserves change over the course of time due to payments
made and new estimates of the expected ultimate loss at the respec-
tive reporting date.
The data is only presented on a net basis, as this is considered to
be more meaningful in order to represent the retained impact on
Group results. The run-off triangles are not prepared on a currency-ad-
justed basis. This means all figures are translated from the respective
local currency into the Allianz Group presentation currency (Euro), con-
sistently using the exchange rates applicable at the respective report-
ing date. This ensures that the reserves reconcile with reserves in the
consolidated balance sheet.
140
Annual Report 2020 - Allianz Group
LOSS PAYMENTS FOR THE INDIVIDUAL ACCIDENT YEARS (PER CALENDAR YEAR, NET)
Loss payments for the individual accident years (per calendar year, net)
€ mn
65,414
57,700
(10,471)
(4,204)
(1)
228
2,006
(480)
1,526
72,774
(10,817)
D_Consolidated Financial Statements
61,958
(9,844)
60,122
(4,603)
68,171
346
(4,258)
(4,552)
348
69,965
803
Accident year
Calendar year
7,181
15,449
28,979
2014
4,393
1,890
7,009
15,410
28,702
2015
3,272
1,054
1,850
7,564
16,291
6,349
2013
27,828
14,443
and prior
2012
2013
2014
2015
2016
2017
2011
2018
2020
Total
2011
26,545
26,545
2012
13,385
2019
103,170
(930)
Latent reserves for premium refunds
Non-interest
DE000A28RSQ8
2020
EUR
500
bearing
14 January 2025
DE000A2RWAX4
2019
EUR
750
0.875
15 January 2026
DE000A19S4V6
2017
6 June 2023
EUR
14 February 2022
750
1 Allianz resolved to call for redemption in March 2021.
D_Consolidated Financial Statements
ISIN
Year of issue
Currency
Notional amount
Coupon in %
Maturity date
DE000A1GORU9
2012
EUR
1,500
DE000A19S4U8
2017
EUR
3.500
0.250
750
0.875
6 December 2027
EUR
750
1.375
21 April 2031
DE000A1HG1L4
2013
GBP
750
4.500
13 March 2043
DE000A1RE1Q3
2012
EUR
1,500
5.625
2016
DE000A180B80
14 January 2031
0.500
DE000A1HG1K6
2013
EUR
750
3.000
13 March 2028
DE000A2RWAY2
Allianz Finance II B.V., Amsterdam
2019
750
1.500
15 January 2030
DE000A28RSR6
2020
EUR
750
EUR
Allianz SE, Munich
Subordinated liabilities
Allianz Finance II B.V., Amsterdam
Floating rate
Current interest rate
Hybrid equity³
Floating rate
Current interest rate
Total subordinated liabilities
1_Except for interest rates. Interest rates represent the weighted average.
2_Includes two subordinated bonds which Allianz resolved to call for redemption in March 2021.
3_Relates to hybrid equity issued by subsidiaries.
Contractual maturity date
As of
As of
31 December
31 December
Up to 1 year
1-5 years
Contractual interest rate
Fixed rate²
Subordinated bonds
Total certificated liabilities
2_Includes other liabilities due within one year of € 33,237 mn (2019: € 31,982 mn).
Annual Report 2020 - Allianz Group
D_Consolidated Financial Statements
145
D_Consolidated Financial Statements
19 Certificated and subordinated liabilities
Certificated and subordinated liabilities
Over 5 years
€ mn¹
Fixed rate
Contractual interest rate
Floating rate
Current interest rate
Money market securities
Fixed rate
Contractual interest rate
Senior bonds
17 October 2042
2020
2,745
11,148
10,170
3.82%
45
45
45
1.12%
14,034
14,034
13,238
146
Annual Report 2020 - Allianz Group
Bonds outstanding as of 31 December 2020
mn
Certificated liabilities
11,148
4.76%
3,023
2,841
5,291
8,036
7,583
1.98%
1.85%
502
1,170
2019
1,170
0.50%
1,170
2,745
5,291
9,206
9,209
2,841
1,124
1_Mainly level 2 for fair value measurement.
DE000A14J9N8
EUR
Unrealized gains and losses (net)²
22,648
17,691
Subtotal
80,821
74,002
Non-controlling interests
3,773
Total
84,594
1_As of 31 December 2020, include € (30) mn (2019: € (55) mn) related to treasury shares.
2_As of 31 December 2020, include € 494 mn (2019: € 415 mn) related to cash flow hedges.
1_Mathematical per-share value € 2.84 (rounded).
Annual Report 2020 - Allianz Group
2020
2019
(2,195)
3,363
77,364
(4,384)
29,577
20_Equity
Equity
€ mn
As of 31 December
Shareholders' equity
Issued capital
1,170
1,170
Additional paid-in capital
27,758
27,758
Undated subordinated bonds
2,259
Retained earnings¹
31,371
Foreign currency translation adjustments
ISSUED CAPITAL
Issued capital as of 31 December 2020 amounted to € 1,170 mn, di-
vided into 412,293,128 fully paid registered shares. The shares have
no-par value but a mathematical per-share value as a proportion of
the issued capital.¹
AUTHORIZED CAPITAL
Total number of issued shares
247,489
412,293,128
416,577,182
595,677
417,172,859
1 Thereof 247,489 (2019: 595,677) own shares held by Allianz SE.
PROPOSAL FOR APPROPRIATION OF NET EARNINGS
The Board of Management and the Supervisory Board propose that
the net earnings ("Bilanzgewinn") of Allianz SE of € 4,375,716,820.22
for the 2020 fiscal year shall be appropriated as follows:
Distribution of a dividend of € 9.60 per no-par share entitled to a
dividend: €3,955,638,134.40
Unappropriated earnings carried forward: € 420,078,685.82
The proposal for appropriation of net earnings reflects the 247,489
treasury shares held directly and indirectly by the company as of
31 December 2020. Such treasury shares are not entitled to the divi-
dend pursuant to §71b of the German Stock Corporation Act (AktG).
Should there be any change in the number of shares entitled to
the dividend by the date of the Annual General Meeting, the above
proposal will be amended accordingly and presented for resolution
on the appropriation of net earnings at the Annual General Meeting,
with an unchanged dividend of € 9.60 per each share entitled to div-
idend.
TREASURY SHARES
As of 31 December 2020, Allianz SE held 247,489 (2019: 595,677)
treasury shares. Of these, 47,489 (2019: 395,677) were held for cov-
ering future subscriptions by employees in Germany and abroad in
the context of Employee Stock Purchase Plans, whereas 200,000
(2019: 200,000) were held as a hedge for obligations from the Allianz
Equity Incentive Program.
In 2020, 748,482 (2019: 365,959) treasury shares were trans-
ferred to employees of Allianz SE and its subsidiaries in Germany and
abroad. This number includes 74,873 granted free shares. The 395,677
treasury shares earmarked for these purposes were fully consumed. In
addition, 400,294 treasury shares were acquired from the market. As in
the previous years, no capital increase for the purpose of Employee
Stock Purchase Plans was carried out in 2020. Employees of the
Allianz Group purchased approximately 75% of the shares of the
purchase plan at a reference price of € 167.76 (2019: € 210.21) per
share and were allocated one additional share per three shares pur-
chased, which is equivalent to a discount of approximately 25%. The
shares were sold to employees at a mean price of € 125.82 (2019: be-
tween € 157.66 and € 161.59). As of 31 December 2020, the remaining
treasury shares of Allianz SE held for covering subscriptions by employ-
ees in the context of the Employee Stock Purchase Plans of Allianz SE
and its subsidiaries in Germany and abroad amounted to 47,489
shares.
In the year ending 31 December 2020, the total number of treas-
ury shares of Allianz SE decreased by 348,188 (2019: a decrease of
365,959), which corresponds to € 988,015.75 (2019: € 1,026,295.80) or
0.08% (2019: 0.09%) of issued capital as of 31 December 2020.
The treasury shares of Allianz SE and its subsidiaries represented
€ 0.7 mn (2019: € 1.7 mn) or 0.06% (2019: 0.14%) of the issued capital
as of 31 December 2020.
148
Annual Report 2020 - Allianz Group
Treasury shares¹
412,045,639
Number of issued shares outstanding as of 31
December
423,498,025
365,959
(7,286,802)
As of 31 December 2020, Allianz SE had authorized capital with a
notional amount of € 335 mn for the issuance of new shares until
8 May 2023 (Authorized Capital 2018/1). The shareholders' subscrip-
tion rights can be excluded for capital increases against contribution
in kind. For a capital increase against contributions in cash, the share-
holders' subscription rights can be excluded: (i) for fractional
amounts, (ii) if the issue price is not significantly below the market
price and the shares issued under exclusion of the subscription rights
pursuant to § 186 (3) sentence 4 of the German Stock Corporation Act
(Aktiengesetz) do not exceed 10% of the share capital, and (iii) to
the extent necessary to grant a subscription right for new shares to
the holders of bonds that carry conversion or option rights or pro-
vide for mandatory conversion. The subscription rights for new shares
from the Authorized Capital 2018/1 and the Conditional Capital
2010/2018 may only be excluded for the proportionate amount of
147
D_Consolidated Financial Statements
the share capital of up to € 117 mn (corresponding to 10% of the
share capital at year-end 2020).
In addition, Allianz SE has authorized capital (Authorized Capital
2018/11) for the issuance of new shares against contributions in cash
until 8 May 2023. The shareholders' subscription rights are excluded.
The new shares may only be offered to employees of Allianz SE and
its Group companies. As of 31 December 2020, the Authorized Capital
2018/11 amounted to € 15 mn.
CONDITIONAL CAPITAL
As of 31 December 2020, Allianz SE had conditional capital totaling
€ 250 mn (Conditional Capital 2010/2018). This conditional capital in-
crease will only be carried out if conversion or option rights attached
to convertible bonds, bonds with warrants, convertible participation
rights, participation rights, and subordinated financial instruments,
which Allianz SE or its Group companies have issued against cash pay-
ments according to the resolutions of the Annual General Meeting
(AGM) on 5 May 2010 or 9 May 2018, are exercised or the conversion
obligations under such bonds are fulfilled, and only to the extent that
the conversion or option rights or conversion obligations are not ser-
viced through treasury shares or through shares from authorized
capital.
2 In November 2020, Allianz SE issued a dual tranche restricted tier 1 (RT1) transaction denominated in EUR and USD. Both tranches are classified as shareholders' equity.
Convertible subordinated notes totaling € 500 mn, which may be
converted into Allianz shares, were issued against cash in July 2011.
Within 10 years after the issuance a mandatory conversion of the
notes into Allianz shares at the then prevailing share price may apply
if certain events occur, subject to a floor price of at least € 74.90 per
share. Within the same period, investors have the right to convert the
notes into Allianz shares at a price of € 187.26 per share. Both conver-
sion prices are as of inception and subject to antidilution provisions.
The subscription rights of shareholders for these convertible notes
have been excluded with the consent of the Supervisory Board and
pursuant to the authorization of the AGM on 5 May 2010. The granting
of new shares to persons entitled under such convertible notes is se-
cured by the Conditional Capital 2010/2018. On or before 31 Decem-
ber 2020, there was no conversion of any such notes into new shares.
Number of issued shares outstanding
2019
2020
Number of issued shares outstanding as of 1 January
Changes in number of treasury shares
Cancellation of issued shares
416,577,182
348,188
(4,879,731)
CHANGES IN THE NUMBER OF ISSUED SHARES
OUTSTANDING
Perpetual bond¹
5.375
800
1.301
25 September 2049
DE000A254TM8
2020
EUR
1,000
2.121
8 July 2050
XS0857872500
2012
USD
1,000
5.500
Perpetual bond¹
DE000A1YCQ29
1,000
EUR
2019
DE000A2YPFA1
1,500
2.241
7 July 2045
DE000A2DAHN6
2017
EUR
1,000
2013
3.099
XS1556937891
2017
USD
600
5.100
་་ བ་ བ་ ཐ
30 January 2049
6 July 2047
2015
EUR
4.750
USX10001AA78
2020
USD
1,250
3.500
Perpetual bond²
DE000A1GNAH1
DE000A0GNPZ3
2011
EUR
1,096
5.750
8 July 2041
2006
EUR
US018820AA81/
Perpetual bond²
2.625
1,250
Perpetual bond
DE000A13R7Z7
2014
EUR
1,500
3.375
Perpetual bond
1,500
XS1485742438
USD
1,500
3.875
Perpetual bond
DE000A289FK7
2020
EUR
2016
89,781
47,904
Total²
127,173
104,404
231,577
126,811
97,241
224,052
Iberia & Latin America
8,047
1,500
9,546
8,358
1,203
9,560
USA
104,413
Western & Southern Europe and Asia Pacific
19,164
345,699
334,285
€ mn
As of 31 December
2020
2019
Reserves for
insurance and
investments
contracts
Financial
liabilities for
unit-linked
contracts
German Speaking Countries and Central & Eastern Europe
359,708
11,802
Total
371,510
Reserves for
insurance and
investments
contracts
Financial
liabilities for
unit-linked
contracts
Total
11,414
123,577
106,706
21,944
The majority of the Allianz Group's Life/Health business segment oper-
ations are conducted in Western Europe. Insurance laws and regula-
tions in Europe have historically been characterized by legal or con-
tractual minimum participation of contract holders in the profits of the
insurance company issuing the contract. In particular, life insurance
business in Germany, Switzerland, and Austria, which comprises ap-
proximately 54% (2019: 52 %) of the Allianz Group's reserves for insur-
ance and investment contracts as of 31 December 2020, includes a
substantial level of policyholder participation in all sources of profit,
including mortality/morbidity, investment, and expense. As a result of
this policyholder participation, the Allianz Group's exposure to insur-
ance, investment and expense risk is mitigated.
Furthermore, all of the Allianz Group's annuity policies issued in
the United States meet the criteria for classification as insurance con-
tracts under IFRS 4 because they include options for contract holders
to elect a life-contingent annuity. These contracts currently do expose
the Allianz Group to a certain longevity risk, however, adverse devel-
opments can be counteracted by using the flexible crediting options
on the in-force book. Additionally, many of the Allianz Group's tradi-
tional contracts issued in France and Italy do not incorporate signifi-
cant insurance risk, although they are accounted for as insurance con-
tracts because of their discretionary participation features. Similarly, a
significant portion of the Allianz Group's unit-linked contracts in France
and Italy do not incorporate significant insurance risk.
As a result of the considerable diversity in types of contracts is-
sued, including the offsetting effects of mortality risk and longevity risk
inherent in a combined portfolio of life insurance and annuity products,
the geographic diversity of the Allianz Group's Life/Health business
segment and the substantial level of policyholder participation in mor-
tality/morbidity risk in certain countries in Western Europe, the Allianz
Group does not believe its Life/Health segment has any significant con-
centrations of insurance risk, nor does it believe its net income or share-
holders' equity is highly sensitive to insurance risk.
The Allianz Group's Life/Health business segment is exposed to
significant investment risk as a result of guaranteed minimum interest
rates being included in most of its non-unit-linked contracts. The
weighted average guaranteed minimum interest rates of the Allianz
Group's largest operating entities in the business segment Life/Health,
comprising 86% (2019: 86%) of the aggregate policy reserves in this
business segment in 2020, can be summarized by country as follows:
Weighted average guaranteed minimum interest rates of life
insurance entities
As of 31 December
2019
In most of these markets, the effective interest rates earned on the in-
vestment portfolio exceed these guaranteed minimum interest rates.
In addition, the operations in these markets may also have significant
mortality and expense margins. However, the Allianz Group's
Life/Health operations in Switzerland and Belgium have high guaran-
teed minimum interest rates on older contracts in their portfolios and,
as a result, may be sensitive to declines in investment rates or a pro-
longed low interest rate environment.
Further risk disclosure requirements of IFRS 4 in connection with
IFRS 7 are reflected in the following sections of the Risk and Oppor-
tunity Report within the Group Management Report:
Internal risk capital framework,
Risk-based steering and risk management,
Underwriting risk in the section Quantifiable risks and opportuni-
ties by risk category.
FUTURE POLICY BENEFITS
As of 31 December 2020, benefits for insurance and investment con-
tracts which are expected to be due in 2021 amounted to € 61 bn,
while those expected to be due between 2022 and 2025 amounted to
€ 202 bn and those expected to be due after 2025 amounted to
€ 1,154 bn.
The resulting total benefits for insurance and investment contracts
in the amount of € 1,417 bn include contracts where the timing and
amount of payments are considered fixed and determinable, as well
as contracts which have no specified maturity dates and may result in
a payment to the contract beneficiary, depending on mortality and
morbidity experience and the incidence of surrenders, lapses, or ma-
turities. Furthermore, the amounts are undiscounted and do not in-
clude any expected future premiums; therefore they significantly ex-
ceed the reserves for insurance and investment contracts presented in
the consolidated balance sheet.
D_Consolidated Financial Statements
143
Annual Report 2020 - Allianz Group
705,072
128,651
Global Insurance Lines & Anglo Markets, Middle East and Africa
Consolidation and Other
2,585
(5,850)
437
1
Total
596,074
Concentration of insurance risk in the Life/Health business segment per reportable segment
137,307
1,642
(4,898)
366
1
2,008
(4,898)
572,904
132,168
3,021
(5,849)
733,382
As of 31 December 2020 and 2019, the Allianz Group's reserves
for insurance and investment contracts for the business segment
Life/Health are summarized per reportable segment as follows:
IN THE LIFE/HEALTH BUSINESS SEGMENT
The Allianz Group's Life/Health business segment provides a wide vari-
ety of insurance and investment contracts to individuals and groups in
over 30 countries around the world. Individual contracts include both
traditional contracts and unit-linked contracts. Without taking policy-
holder participation into account, traditional contracts generally incor-
porate significant investment risk for the Allianz Group, while unit-linked
contracts generally result in the contract holder assuming the invest-
ment risk. Traditional contracts include life, endowment, annuity and
health contracts. Traditional annuity contracts are issued in both de-
ferred and immediate types. In addition, the Allianz Group's life insur-
ance operations in the United States issue a significant amount of eq-
uity-indexed deferred annuities. In certain markets, the Allianz Group
also issues group life, group health and group pension contracts.
CONCENTRATION OF INSURANCE RISK
85,134
72,273
Total
103,170
89,781
2020
2019
As of 1 January
497,558
466,406
Balance carry forward of discounted loss reserves
(4,552)
Subtotal
493,006
Foreign currency translation adjustments
As of 31 December
2,566
1,537
Changes due to valuation differences charged to income
741
685
As of 1 January
72,273
45,673
611,096
588,023
(10,220)
Foreign currency translation adjustments
115
Changes in the consolidated subsidiaries
of the Allianz Group
(5)
Changes due to fluctuations in market value
11,381
23,919
(52)
For contracts without fixed and determinable payments, the
Allianz Group has made assumptions in estimating the undiscounted
cash flows of contractual policy benefits including mortality, morbidity,
interest crediting rates, policyholder participation in profits, and future
lapse rates. These assumptions represent current best estimates and
may differ from the estimates used to establish the reserves for insur-
ance and investment contracts in accordance with the Allianz Group's
established accounting policy. Due to the uncertainty of the assump-
tions used, the amount presented could be materially different from
the actual incurred payments in future periods.
(4,157)
462,249
2,893
of the Allianz Group
17
Other changes¹
1,219
Subtotal
502,581
493,006
Ending balance of discounted loss reserves
4,603
As of 31 December
507,184
4,552
497,558
1_Mainly relate to insurance contracts, when policyholders change their contract from an unit-linked to an universal life-
type contract.
(38)
(1,714)
68
3,560
Portfolio acquisitions and disposals
(1,760)
Policyholder charges
1,626
(18,681)
(38)
Changes recorded in the consolidated income statement
1,587
2,267
Premiums collected
31,181
35,002
Changes in the consolidated subsidiaries
Separation of embedded derivatives
Interest credited
5,580
5,774
Dividends allocated to policyholders
1,845
Releases upon death, surrender, and withdrawal
(21,192)
1,356
49,005
2020
Aggregate
policy
9,288
397
425
Tax payables
Income taxes
1,812
1,773
Other taxes, interest, and penalties
1,983
1,988
Subtotal
3,795
3,761
Accrued interest and rent
457
9,642
537
1,760
2,103
18 Other liabilities
Other liabilities
€ mn
As of 31 December
Payables
Policyholders
Reinsurance
Agents
2020
2019
Subtotal
Payables for social security
4,741
5,425
2,846
2,055
Unearned income
551
502
3,903
2,443
Derivative financial instruments used for hedging that meet the
criteria for hedge accounting, and firm commitments¹
245
532
Financial liabilities for puttable financial instruments
2,072
2,073
Lease liabilities
2,725
2,791
Other liabilities
9,005
9,439
Deposits retained for reinsurance ceded
16,114
16,211
Subtotal
Provisions
Pensions and similar obligations
10,725
10,556
Employee related
2,774
2,849
2_Consists of € 86,340 mn (2019: € 82,584 mn) unit-linked insurance contracts and € 50,967 mn (2019: € 49,584 mn) unit-
linked investment contracts.
Share-based compensation plans
429
Restructuring plans
306
322
Other provisions
2,040
1,957
367
1 These reclassifications mainly relate to insurance contracts when policyholders change their contracts from an unit-
linked to an universal life-type contract.
132,168
137,307
France
0.3
56.0
0.3
56.6
Italy
1.3
28.8
1.3
29.5
Switzerland
1.5
12.0
1.5
11.8
106.7
0.5
104.3
0.5
Guaranteed
Aggregate
policy
rate
reserves
rate
reserves
%
Belgium
€ bn
€ bn
Germany
1.8
218.3
2.0
205.5
United States
%
Guaranteed
1.9
2.0
5,330
15,584
Releases upon death, surrender, and withdrawal
(13,702)
(14,619)
Policyholder charges
(2,159)
(2,244)
Portfolio acquisitions and disposals
(5)
(40)
Reclassifications¹
(1,867)
(2,099)
As of 31 December²
Interest credited
19,516
21,490
Premiums collected
8.4
144
Annual Report 2020 - Allianz Group
17 Financial liabilities for unit-linked contracts
Financial liabilities for unit-linked contracts
€ mn
2020
7.1
2019
132,168
115,361
Foreign currency translation adjustments
(3,016)
709
Changes in the consolidated subsidiaries of the Allianz Group
D_Consolidated Financial Statements
As of 1 January
For entities included in the CGUs of the Life/Health business segment,
the MCEV is the excess of assets over liabilities of the MVBS according
to the Solvency II requirements. Assets and liabilities included in the
MVBS are measured at their market value as of the reporting date.
Technical provisions are an essential part of the liabilities included in
the MVBS and generally consist of the best estimate plus a risk margin.
The best estimate corresponds to the probability-weighted average of
future cash flows considering the time value of money, using the rele-
vant risk-free interest rate term structure. The calculation of the best
estimate is based on assumptions made for demographic factors (e.g.,
mortality, morbidity, lapse/surrender rates), expense allowances, tax-
ation, assumptions on market conditions for market consistent projec-
tions (e.g., reference rates, volatilities) as well as investment strategy
and asset allocation of the entity. The risk margin ensures that the
value of the technical provisions is equivalent to the amount that the
entity would be expected to require in order to take on and meet the
insurance and reinsurance obligations.
(2,370)
SHARE BUY-BACK PROGRAM 2020
(17,767)
Foreign exchange contracts
111,716
3,348
1,637
116,701
1,493
(471)
95,045
765
(646)
Other
1,557
24,105
817
26,479
34
(2)
7,397
23
(5)
Total
Annual Report 2020 - Allianz Group
158
Transfers into/out of level 3 may occur due to a reassessment of
input parameters.
In general, financial assets and liabilities are transferred from level 1
to level 2 when their liquidity, trade frequency, and activity are no
longer indicative of an active market. The same policy applies
conversely for transfers from level 2 to level 1.
SIGNIFICANT TRANSFERS OF FINANCIAL
INSTRUMENTS CARRIED AT FAIR VALUE
Financial liabilities for puttable financial instruments are generally
required to be recorded at the redemption amount with changes
recognized in income or equity. The fair value is based on the net asset
value or the use of present value techniques.
FINANCIAL LIABILITIES FOR PUTTABLE FINANCIAL
INSTRUMENTS
5,599
360,266
(23,733)
13,530
Maturity by notional amount
Notional
principal
Positive fair
Negative fair
Positive fair
Up to 1 year
1-5 years
Over 5 years
amounts
values
values
amounts
values
D_Consolidated Financial Statements
Negative fair
values
39,459
25,127
73,427
138,013
1,541
(117)
118,719
1,199
(163)
Equity/index contracts
311,528
3,536
18,643
333,707
Interest rate contracts
464,260
56,116
94,524
As of 31 December 2020, the Allianz Group hedged part of its foreign
currency net investments through the issuance of several foreign cur-
rency denominated liabilities and the use of forward sales. The total
positive fair value in 2020 was € 212 mn (2019: total negative fair
value of € 310 mn).
OFFSETTING
The Allianz Group enters into enforceable master netting arrange-
ments and similar arrangements mainly for derivatives transactions.
None of these enforceable master netting arrangements or similar ar-
rangements meet the requirements for offsetting in line with IAS 32.
Credit risk associated with netting arrangements is further miti-
gated by collateral. For further information on collateral, please refer
to note 35. The maximum credit risk exposure is represented by the
carrying amount of the financial assets.
Annual Report 2020 - Allianz Group
155
D_Consolidated Financial Statements
35 Fair values and carrying amounts
of financial instruments
Certain risk disclosure requirements of IFRS 7 are reflected in the fol-
lowing sections of the Risk and Opportunity Report within the Group
Management Report:
Risk-based steering and risk management,
Internal risk capital framework,
Allianz risk profile and management assessment,
Market risk, credit risk, and liquidity risk in the section Quantifiable
HEDGE OF NET INVESTMENT IN FOREIGN
OPERATIONS
risks and opportunities by risk category.
The following table compares the carrying amount and fair value of
the Allianz Group's financial assets and financial liabilities:
Fair values and carrying amounts of financial instruments
€ mn
As of 31 December
2020
2019
Carrying
amount
Fair value
Carrying
amount
Fair value
FINANCIAL ASSETS
Cash and cash equivalents
22,443
FAIR VALUES AND CARRYING AMOUNTS
2019
The ineffectiveness that arises from cash flow hedges is immaterial.
CASH FLOW HEDGES
614,900
16,598
(24,323)
581,427
7,586
(18,581)
thereof OTC¹
thereof exchange-traded
374,439
89,821
55,609
94,524
507
524,572
90,328
15,738
860
During the year ended 31 December 2020, cash flow hedges were
used to hedge the exposure to the variability of cash flows arising from
interest rate or exchange rate fluctuations as well as inflation. As of
31 December 2020, the derivative instruments utilized had a total pos-
itive fair value of € 620 mn (2019: € 503 mn).
(24,223)
(100)
7,284
(18,517)
99,681
302
(64)
1_Consists mainly of equity/index contracts and foreign exchange contracts.
The table shows the fair value and notional amounts of all freestanding
derivatives, as well as derivatives for which hedge accounting is applied
by the Allianz Group, as of 31 December 2020 and 2019, respectively.
The notional principal amounts indicated in the table are cumulative,
as they include the absolute value of the notional principal amounts of
derivatives with positive and negative fair values. Although these
notional principal amounts reflect the degree of the Allianz Group's
involvement in derivative transactions, they do not represent amounts
exposed to risk. Further information on the use of derivatives to hedge
risk can be found in the sections on market and credit risk of the Risk
and Opportunity Report, which forms part of the Group Management
Report.
FREESTANDING DERIVATIVE FINANCIAL
INSTRUMENTS
As of 31 December 2020, freestanding derivatives, which are included
in the line item financial assets and liabilities held for trading, had a
notional principal amount of € 586.9 bn (2019: € 560.3 bn) as well as
a positive fair value of € 15.5 bn (2019: € 6.9 bn) and a negative fair
value of € 24.1 bn (2019: € 18.0 bn). Out of the total allocated to
the freestanding derivatives, € 111.6 bn (2019: € 119.9 bn) of the no-
tional principal relate to annuity products. Annuity products are equity-
indexed or contain certain embedded options or guarantees which are
considered embedded derivatives under IAS 39. For these embedded
derivatives, the notional principal amounts included in the table refer
to the account value of the related insurance contracts. The total
negative fair value of these embedded derivatives amounts to
€ 12.4 bn (2019: € 13.5 bn). Further information on the fair value
measurement of these derivatives can be found in note 35.
DERIVATIVE FINANCIAL INSTRUMENTS USED IN
ACCOUNTING HEDGES
As of 31 December 2020, derivatives, which form part of hedge
accounting relationships and which are included in the line items other
assets and other liabilities, had a notional amount of € 28.0 bn (2019:
€ 21.1 bn) as well as a positive fair value of € 1.1 bn (2019: € 0.7 bn)
and a negative fair value of € 0.2 bn (2019: € 0.5 bn). These hedging
instruments mainly include interest rate forwards with a total positive
fair value of € 0.5 bn (2019: € 0.4 bn).
FAIR VALUE HEDGES
The Allianz Group uses fair value hedges to hedge the exposure to
changes in the fair value of financial assets due to movements in inter-
est or exchange rates and to hedge its equity portfolio against equity
market risk. As of 31 December 2020, the derivative financial instru-
ments used for the related fair value hedges of the Allianz Group had
a total positive fair value of € 58 mn (2019: total negative fair value of
€ 24 mn).
481,746
2020
D_Consolidated Financial Statements
As of 31 December
Income before income taxes
9,604
11,077
Net deferred tax assets
1,006
1,133
Applied weighted income tax rate
24.4%
25.5%
Calculated income taxes
2,348
2,823
DEFERRED TAX LIABILITIES
Trade tax and similar taxes
(60,732)
216
Financial assets carried at fair value through income
651
519
Net tax-exempt income
(183)
(389)
Investments
42,266
35,154
Effects of tax losses
Other effects
27
21
Deferred acquisition costs
223
7,338
(69,665)
2019
DEFERRED TAX ASSETS
Financial assets carried at fair value through income
Investments
111
24
14,648
12,423
2,098
1,593
1,239
1,207
221
168
1,544
1,724
Effect of netting
44,215
5,168
4,997
Other liabilities
2,141
1,942
Effective tax rate
€ mn
Total deferred tax assets
71,383
62,607
Non-recognition or valuation allowance for deferred tax assets
on tax losses carried forward
(712)
(742)
2020
38,529
22,443
7,245
98
(5,405)
Annual Report 2020 - Allianz Group
153
D_Consolidated Financial Statements
deferred tax assets are recognized, as it is not probable that they will
reverse in the foreseeable future, amounted to € 41 mn (2019: € 68 mn).
TAX LOSSES CARRIED FORWARD
Tax losses carried forward at 31 December 2020 of € 6,417 mn (2019:
€ 7,379 mn) resulted in the recognition of deferred tax assets to the ex-
tent that there is sufficient certainty that the unused tax losses will be
utilized. At the reporting date, this prerequisite was not fulfilled for a
partial amount of € 2,755 mn (2019: € 2,803 mn). According to tax
legislation as of 31 December 2020, an amount of € 2,484 mn (2019:
€ 2,510 mn) of these tax losses may be carried forward indefinitely and
in unlimited amounts, whereas an amount of €271 mn (2019:
€ 293 mn) of these tax losses carried forward will expire over the next
20 years if not utilized.
Tax losses carried forward are scheduled according to their expiry
periods as follows:
Tax losses carried forward
€ mn
2021
2022-2023
2024-2025
2026-2030
(7,589)
>10 years
Unlimited
2020
18
28
43
560
1,079
4,689
6,417
154
Annual Report 2020 - Allianz Group
OTHER INFORMATION
34_Derivative financial instruments
Derivative financial instruments
€ mn
Total
63
6,538
(60,732)
Other assets
2,336
1,695
Effective income taxes
Effective tax rate
2,471
25.7%
2,776
Intangible assets
908
770
25.1%
Insurance reserves
21,276
18,420
8,595
For the year ended 31 December 2020, the write-down of deferred
taxes on tax losses carried forward increased the tax expenses by
€ 46 mn (2019: € 137 mn). The reversal of write-down of deferred tax
assets on tax losses carried forward resulted in deferred tax income of
€0 mn (2019: € 66 mn). Due to the use of tax losses carried forward,
for which deferred tax assets had previously been written off, the cur-
rent income tax expenses decreased by € 1 mn (2019: € 1 mn). De-
ferred tax income increased by € 19 mn (2019: € 48 mn) due to the use
of tax losses carried forward, for which deferred tax assets had previ-
ously been written off. The above-mentioned effects are shown in the
reconciliation statement as "effects of tax losses".
Pensions and similar obligations
Other liabilities
Total deferred tax liabilities
Effect of netting
Net deferred tax liabilities
Net deferred tax assets (liabilities)
Taxable temporary differences associated with investments in
Allianz Group companies for which no deferred tax liabilities are rec-
ognized, as the Allianz Group is able to control the timing of their re-
versal, and which will not reverse in the foreseeable future, amounted
to € 1,866 mn (2019: € 1,951 mn). Deductible temporary differences
arising from investments in Allianz Group companies for which no
3,023
2,903
461
564
78,260
67,269
(69,665)
The reconciling item "other effects" includes expenses of € 17 mn
(2019: € 29 mn) related to the write-down of deferred tax assets on
21,075
21,075
Financial assets held for trading
878
18,173
64,805
Subtotal
65,504
496,814
59,459
621,777
76,384
465,203
51,591
593,178
Financial assets for unit-linked contracts
103,746
45,755
32,260
137,307
103,695
27,314
1,159
132,168
Total
174,262
544,941
61,071
780,274
184,212
501,338
52,982
738,532
1,302
FINANCIAL LIABILITIES
58,543
433
268,363
Government and government agency bonds
15,431
227,551
839
243,820
17,836
204,721
843
223,400
MBS/ABS
35
27,703
284
21,628
28,023
28,154
253
28,453
Other
569
973
7,197
8,740
1,102
1,123
5,932
8,156
Equity securities
36,483
46
26,391
Financial liabilities held for trading
11,573
157
D_Consolidated Financial Statements
Level 3 investments are mainly priced based on the income
approach. The primary non-market observable input used in the
discounted cash flow method is an option-adjusted spread taken
from a set of benchmark securities with similar characteristics. A sig-
nificant yield increase of the benchmark securities in isolation could
result in a decreased fair value, while a significant yield
decrease could result in an increased fair value. However, a 10%
stress of the main non-market observable inputs has only immate-
rial impact on fair value.
Equity securities
For level 2, the fair value is mainly determined using the market
approach or net asset value techniques for funds. For certain private
equity investments, the funds are priced based on transaction prices
using the cost approach. As there are only few holders of these funds,
the market is not liquid and transactions are only known to partici-
pants.
Level 3 mainly comprise private equity fund investments as well as
alternative investments of the Allianz Group, and in most cases are
delivered as net asset values by the fund managers. These net asset
values are calculated using material, non-public information about
the respective private equity companies. The Allianz Group has only
limited insight into the specific inputs used by the fund managers,
hence a narrative sensitivity analysis is not applicable. The fund's asset
manager generally prices the underlying single portfolio companies in
line with the International Private Equity and Venture Capital Valua-
tion (IPEV) guidelines, using discounted cash flow (income approach)
or multiple methods (market approach). For certain investments, the
capital invested is considered to be a reasonable proxy for the fair
value. In these cases, sensitivity analyses are also not applicable.
FINANCIAL ASSETS FOR UNIT-LINKED CONTRACTS
For level 2, the fair value is determined using the market or the income
approach. Valuation techniques applied for the income approach
mainly include discounted cash flow models as well as the Black-
Scholes-Merton model. Financial liabilities for unit-linked contracts are
valued based on their corresponding assets.
FINANCIAL LIABILITIES HELD FOR TRADING
This position mainly includes derivative financial instruments.
For level 2, the fair value is determined using the income or the
market approach. Valuation techniques applied for the income
approach mainly include discounted cash flow models as well as the
Black-Scholes-Merton model. Main observable input parameters
include volatilities, yield curves observable at commonly quoted inter-
vals, and credit spreads observable in the market.
For level 3, the fair value is determined using the income or the
market approach. Valuation techniques applied for the income
approach mainly include discounted cash flow models. A significant
proportion of level 3 liabilities represent derivatives embedded in
certain life insurance and annuity contracts. Significant non-market
observable input parameters include mortality rates and surrender
rates. A significant decrease (increase) in surrender rates, in mortality
rates, or in the utilization of annuitization benefits could result in a
higher (lower) fair value. For products with a high death benefit,
surrender rates may show an opposite effect.
A significant decrease (increase) in withdrawal benefit election could
result in a lower (higher) fair value. A 10% change of the mortality
assumption for all fixed index annuities and variable annuities could
lead to a change in fair value of the embedded derivatives of up to
3.2%. A 10% change of the surrender assumption for all fixed index
annuities and variable annuities could lead to a change in fair value of
the embedded derivatives of up to 3.3%.
Quantitative description of non-market observable input(s) used for
the level 3 portfolios
Description
Annual Report 2020 - Allianz Group
Fixed index annuities
Non-market observable
input(s)
Range
Annuitizations
Surrenders
0%-25%
0%-25%
Mortality
n/a¹
Withdrawal benefit
election
0%-50%
Surrenders
Mortality
0.5%-35%
n/a¹
1_Mortality assumptions are mainly derived from the Annuity 2000 Mortality Table.
Variable annuities
202
The valuation techniques for these debt securities are similar. The
fair value is determined using the market and the income approach.
Primary inputs for the market approach are quoted prices for identical
or comparable assets in active markets where comparability between
the security and the benchmark defines the fair value level. The income
approach in most cases means that a present value technique is
applied where either the cash flows or the discount curve is adjusted
to reflect credit risk and/or liquidity risk. Depending on the observabil-
ity of these risk parameters in the market, the security is classified as
level 2 or level 3.
Debt securities
12,304
Financial liabilities for unit-linked contracts
103,746
32,260
Financial liabilities for puttable financial instruments
1,662
106
Total
105,609
43,939
1,302
305
13,910
24,079
137,307
2,072
163,458
130
103,695
1,674
105,499
4,832
27,314
Debt securities include corporate and government and government
agency bonds, MBS/ABS, and other debt securities.
13,087
1,159
85
314
32,231
14,561
2,073
152,290
1_Quoted prices in active markets.
2 Market observable inputs.
3_Non-market observable inputs.
FINANCIAL ASSETS CARRIED AT FAIR VALUE
THROUGH INCOME
Financial assets held for trading
This position mainly includes derivative financial instruments. The fair
value of these derivatives is mostly determined based on the income ap-
proach, using present value techniques and the Black-Scholes-Merton
model. Primary inputs for the valuation include volatilities, interest rates,
yield curves, and foreign exchange rates observable at commonly
quoted intervals. In some cases, it is determined based on the market
approach.
Financial assets designated at fair value through income
The fair value is mainly determined based on net asset values for funds
and using the market approach.
AVAILABLE-FOR-SALE INVESTMENTS
18,049
132,168
2019
230,327
282,651
137,307
137,307
132,168
132,168
Financial assets for unit-linked contracts
FINANCIAL LIABILITIES
Financial liabilities held for trading
Liabilities to banks and customers
Financial liabilities for unit-linked contracts
Financial liabilities for puttable financial instruments
Certificated liabilities
Subordinated liabilities
As of 31 December 2020, fair values could not reliably be measured for
equity investments with carrying amounts totaling € 98 mn (2019:
€ 81 mn). These investments are primarily investments in privately held
corporations and partnerships. During the year ended 31 Decem-
ber 2020, such investments with carrying amounts of € 93 mn (2019:
€ 61 mn) were sold. The gains and losses from these disposals were im-
material.
156
131,216
24,079
18,049
18,049
14,722
14,768
13,445
13,475
137,307
137,307
132,168
132,168
2,072
2,072
2,073
2,073
24,079
9,206
112,672
116,576
16,107
16,107
7,566
7,566
Financial assets designated at fair value through income
5,084
5,084
5,620
5,620
Available-for-sale investments
621,777
621,777
593,178
593,178
138,198
Held-to-maturity investments
2,884
2,589
2,887
Investments in associates and joint ventures
14,570
17,706
13,462
16,754
Real estate held for investment
14,294
25,094
13,049
23,463
Loans and advances to banks and customers
2,563
11,645
10,409
10,375
15,070
8
16,107
394
7,099
73
7,566
Financial assets designated at fair value through income
3,983
798
303
5,084
3,740
1,723
1,029
158
Subtotal
5,012
15,868
311
21,190
4,133
8,822
231
13,187
Available-for-sale investments
Corporate bonds
12,986
240,154
29,511
5,620
9,209
Financial assets held for trading
FINANCIAL ASSETS
14,034
15,039
13,238
14,334
Annual Report 2020 - Allianz Group
FAIR VALUE MEASUREMENT ON A RECURRING BASIS
The following financial assets and liabilities are carried at fair value on
a recurring basis:
Financial assets and liabilities held for trading,
Financial assets and liabilities designated at fair value through in-
come,
Available-for-sale investments,
-
Financial assets and liabilities for unit-linked contracts, and
-
Financial assets carried at fair value through income
Financial liabilities for puttable financial instruments.
Fair value hierarchy (items carried at fair value)
€ mn
As of 31 December
D_Consolidated Financial Statements
2020
2019
Level 1¹
Level 2²
Level 33
Total
Level 1¹
Level 22
Level 33
Total
The following table presents the fair value hierarchy for financial in-
struments carried at fair value in the consolidated balance sheet as of
31 December 2020 and 2019:
2020
Notional
principal
Tax losses carried forward
Insurance reserves
12,721
8,440
Interest from available-for-sale investments
13,575
13,936
Interest from loans to banks and customers
Subtotal
3,676
REALIZED LOSSES
Rent from real estate held for investment
1,007
929
Available-for-sale investments
Other
3,879
877
2,405
Dividends from available-for-sale investments
3,104
Interest and similar income
€ mn
Debt securities
6,838
4,467
2,260
Subtotal
7,571
2020
2019
Other
1,443
869
11,277
4,440
1,283
(1,731)
7,276
150
Other
Annual Report 2020 - Allianz Group
25 Fee and commission income
Fee and commission income
10,256
€ mn
2019
D_Consolidated Financial Statements
27 Change in reserves for insurance and
investment contracts (net)
Change in reserves for insurance and investment contracts (net)
€ mn
PROPERTY-CASUALTY
Property-
Casualty
2020
Equity securities
(1,163)
Total
(444)
Total
21,395
Debt securities
22,433
(639)
(2,465)
(539)
(983)
Other
(95)
Pensions and similar obligations
(181)
Subtotal
Subtotal
Equity securities
Available-for-sale investments
REALIZED GAINS
premiums (net)
22
(542)
(520)
Premiums earned
Income from financial liabilities for puttable financial
instruments (net)
557
(140)
(net)
51,631
24,083
75,714
Foreign currency gains and losses (net)¹
(5,130)
(199)
741
218
Change in unearned
82,986
Ceded
(6,163)
(690)
101
(6,752)
designated at fair value through income (net)
Income from financial assets and liabilities held for
trading (net)
(2,709)
Net
51,609
24,625
76,234
Income from financial assets and liabilities
4,983
2019
Total
(69)
(826)
(632)
(1,458)
Premiums earned
24 Realized gains/losses (net)
(net)
premiums (net)
51,328
75,914
Realized gains/losses (net)
€ mn
2020
2019
22 Interest and similar income
24,586
Change in unearned
77,372
25,218
(1,609)
Premiums written
Gross
57,210
25,820
(111)
82,919
1 These foreign currency gains and losses arise subsequent to initial recognition on all assets and liabilities denominated
in a foreign currency that are monetary items and not measured at fair value through income.
Ceded
(5,056)
(602)
111
(5,547)
Net
52,154
Life/Health
Consoli-
dation
Group
Fees from credit and assistance business
63
Other
490
402
Performance fees
405
51
389
8,089
8,336
Management and advisory fees
(13,726)
29
(13,289)
Loading and exit fees
(465)
Subtotal
9,035
2020
2,390
2,671
Subtotal
€ mn
Interest expenses
9,190
705
Investment advisory and banking activities
1,684
2,001
Service agreements
CORPORATE AND OTHER
28 Interest expenses
670
Net
ASSET MANAGEMENT
(13,997)
271
17
(12,684)
(308)
Net
LIFE/HEALTH
279
(12,976)
(13)
12
Ceded
(13,255)
30
(12,965)
(320)
281
Investment advisory
1,345
1,450
270
1
Ceded
20
29
(13,559)
(466)
Gross
1,635
1,500
Subtotal
2019
185
155
Service agreements
2019
(101)
CONSOLIDATION
(2,709)
Net
Ceded
(38,073)
Gross
Equity securities
2019
3,173
(34,900)
Available-for-sale investments
(61,818)
4,728
(57,091)
(21,208)
(35,883)
Net
46
(46)
591
Impairments
4,183
(20,956)
69
1,225
1,568
Service agreements
415
378
2020
(21,528)
573
Subtotal
(55,851)
4
Subtotal
Debt securities
(59,532)
3,681
(65)
1,640
Ceded
(21,799)
(40,066)
(565)
Subordinated liabilities
(217)
(159)
Certificated liabilities
(78)
(595)
(88)
12,296
12,049
Total
(120)
(83)
Liabilities to banks and customers
Deposits retained for reinsurance ceded
Other
(104)
(99)
Gross
€ mn
Impairments of investments (net)
2020
Group
Consoli-
dation
Life/Health
Property-
Casualty
29 Impairments of investments (net)
€ mn
Claims and insurance benefits incurred (net)
26 Claims and insurance benefits incurred (net)
(1,110)
(999)
Total
(2,953)
25,315
57,772
Gross
(4,509)
(4,024)
Total
2,143
2,421
CONSOLIDATION
LIFE/HEALTH
(14,119)
(3,318)
(3,487)
Subtotal
Administrative expenses
(2,106)
(2,284)
(13,846)
Subtotal
Acquisition costs
(4,624)
(1,696)
(2,774)
(2,805)
Subtotal
Non-personnel expenses²
Personnel expenses
(5,144)
33 Income taxes
(6,449)
(7,042)
Subtotal
(1,825)
(1,898)
Administrative expenses
ASSET MANAGEMENT
(1,710)
(10,801)
(387)
Acquisition and administrative expenses (net)
(795)
(712)
(111)
(108)
(683)
Subtotal
(605)
Commissions
ASSET MANAGEMENT
Subtotal
Service agreements
administrative expenses (net)
31 Acquisition and
Other
(10,359)
(1,794)
(38)
(353)
Investment advisory and banking activities
Acquisition costs¹
PROPERTY-CASUALTY
(1,719)
(1,931)
(1,843)
Service agreements
2019
2020
€ mn
(1,864)
(1,833)
(21)
CORPORATE AND OTHER
Income taxes
(4,501)
(4,483)
37
(7)
Miscellaneous
14
(16)
Share of other comprehensive income of associates and joint
ventures
Items that may never be reclassified to profit or loss
(57)
Cash flow hedges
(2,923)
(2,018)
Available-for-sale investments
(155)
Foreign currency translation adjustments
(26)
Items that may be reclassified to profit or loss in future periods
Changes in actuarial gains and losses on defined benefit
plans
78
Intangible assets
Other assets
Deferred acquisition costs
As of 31 December
Deferred tax assets and liabilities
€ mn
DEFERRED TAX ASSETS AND LIABILITIES
Total
Deferred tax assets on losses carried forward are recognized to
the extent to which it is more likely than not that sufficient future taxa-
ble profits will be available for realization. Entities which suffered a tax
loss in either the current or the preceding period recognized deferred
tax assets in excess of deferred tax liabilities amounting to € 363 mn
(2019: € 459 mn), as there was convincing other evidence that suffi-
cient future taxable profit will be available.
temporary differences and tax credits. Deferred tax income increased by
€ 1 mn (2019: € 12 mn) due to the reversal of write-down of deferred tax
assets on temporary differences and tax credits.
The effective tax rate is determined on the basis of the effective
income tax expenses on income before income taxes.
The recognized income taxes for the year ended 31 December 2020
are € 123 mn above (2019: € 47 mn below) the calculated income
taxes, which are determined by multiplying the respective income be-
fore income taxes with the applicable country-specific tax rates. The
following table shows the reconciliation from the calculated income
taxes to the effectively recognized income taxes for the Allianz Group.
The Allianz Group's reconciliation is a summary of the individual
company-related reconciliations, which are based on the respective
country-specific tax rates taking into consideration consolidation ef-
fects with an impact on the Group result. The applicable tax rate
used in the reconciliation for domestic Allianz Group companies in-
cludes corporate tax, trade tax, and the solidarity surcharge, and
amounted to 31.0 % (2019: 31.0 %).
(2,421)
411
(2,145)
The tax rates used in the calculation of the Allianz Group's de-
ferred taxes are the applicable national rates, which in 2020 ranged
from 10.0% to 40.0%, with changes to tax rates that had already been
adopted in the Netherlands and the United Kingdom by 31 December
2020 taken into account.
2020
98
2019
(35)
Total
Deferred income taxes
(1,134)
(1,221)
Current income taxes
(61)
(1,134)
Total
CONSOLIDATION
Subtotal
Administrative expenses
CORPORATE AND OTHER
€ mn
(1,221)
(26,644)
(26,247)
2020
(2,264)
€ mn
Income taxes relating to components of other comprehensive income
D_Consolidated Financial Statements
Annual Report 2020 - Allianz Group
152
For the years ended 31 December 2020 and 2019, the income
taxes relating to components of other comprehensive income consist
of the following:
Of the deferred income taxes for the year ended 31 Decem-
ber 2020, expenses of € 70 mn (2019: income of € 326 mn) are attribut-
able to the recognition of deferred taxes on temporary differences,
and expenses of € 129 mn (2019: € 93 mn) are attributable to tax
losses carried forward. Changes of applicable tax rates due to
changes in tax law lead to deferred tax expenses of € 8 mn (2019:
€ 3 mn).
During the year ended 31 December 2020, current income taxes in-
cluded expenses of € 55 mn (2019: € 149 mn) related to prior years, de-
ferred income taxes included income of € 18 mn (2019: € 102 mn) re-
lated to prior years.
1_Include € 904 mn (2019: € 699 mn) ceded acquisition costs.
2_Include € 57 mn (2019: € 95 mn) changes in assets and € (57) mn (2019: € (95) mn) changes in liabilities related to
certain deferred compensation programs, entirely offsetting each other.
(2,776)
(2,471)
230
(207)
(3,006)
2019
Investment advisory
Gross
LIFE/HEALTH
(1,617)
The Allianz Group is a financial conglomerate within the scope of
the Financial Conglomerates Directive (FCD). The FCD does not
impose a materially different capital requirement on Allianz Group
compared to Solvency II.
Based on the information available to the Allianz Group as of the
end of December 2020 and with a Solvency II capitalization of 207%
(2019: 212%), including the known impacts of COVID-19, it is expected
that the Group continues to be sufficiently capitalized and compliant
with both the regulatory Solvency Capital Requirement and the mini-
mum consolidated Group Solvency Capital Requirement. However, the
Allianz Group carefully monitors the development of the COVID-19
pandemic and manages the portfolios to ensure that the Group and
its entities have sufficient resources to meet their solvency capital
needs. For further information on Solvency II capitalization, please re-
fer to the section "Solvency II regulatory capitalization" of the Risk and
Opportunity Report.
to the Group of internal model and standard formula entities essen-
tially consist of the MVBS excess of assets over liabilities plus qualifying
subordinated liabilities, less deductions for foreseeable dividends as
well as further deductions relating, for example, to transferability re-
strictions.
The Allianz Group's Own Funds are composed of the eligible Own
Funds relating to the Group of internal model and standard formula
entities, the sectoral Own Funds of entities from other financial sectors,
as well as the equivalent Own Funds of entities included via the deduc-
tion and aggregation (D&A) method. The eligible Own Funds relating
With Solvency II being the regulatory regime relevant for the
Group as of 1 January 2016, the risk profile is measured and steered
based on the approved Solvency II internal model¹. The Allianz Group
has introduced a target Solvency ratio range in accordance with Sol-
vency II, based on pre-defined stress scenarios for both the Group and
related undertakings, supplemented by ad-hoc scenarios, historical
and reverse stress tests, and sensitivity analyses.
The Allianz Group's capital requirements primarily depend on the type
of business that it underwrites, the industry and geographic locations
in which it operates, and the allocation of the Allianz Group's invest-
ments. During the Allianz Group's annual planning and strategic dia-
logs with its related undertakings, internal capital requirements are
determined through business plans regarding the levels and timing of
capital expenditures and investments. These plans also form the basis
for the Allianz Group's capital management. Resilience under stress
conditions is also considered when determining the internal capital
requirements of the Group. The regulators impose minimum capital
requirements on the Group and its related undertakings. For further
details on how Allianz Group manages its capital, please refer to the
section "Target and strategy of risk management" of the Risk and Op-
portunity Report.
3,363
3,773
387
2,649
3,093
326
326
354
2020
2019
CAPITAL REQUIREMENTS
Total
Other equity components
Share of earnings
Unrealized gains and losses (net)
As of 31 December
€ mn
Non-controlling interests
NON-CONTROLLING INTERESTS
All of the treasury shares acquired within the Share Buy-Back
Program 2020 have been redeemed according to the simplified pro-
cedure without reduction of the share capital.
The Allianz Group's insurance subsidiaries (including Allianz SE)
prepare individual financial statements based on local laws and regu-
lations. The local regulations establish additional restrictions on the
minimum level of capital and the amount of dividends that may be
paid to shareholders. The respective local minimum capital require-
ments are based on various criteria including, but not limited to, the
volume of premiums written or claims paid, amount of insurance re-
serves, investment risks, credit risks, and underwriting risks.
In its meeting on 20 February 2020, the Board of Management of
Allianz SE resolved to carry out a share buy-back program in an
amount of up to € 1.5 bn within a period between March 2020 and
31 December 2020 (Share Buy-Back Program 2020) based on the
authorization granted by the Annual General Meeting on 9 May 2018.
In the period between 9 March 2020 and 28 April 2020, a total of
4,879,731 treasury shares with a market value of € 749,999,985.35
were acquired for an average price of € 153.70. By resolution dated 4
November 2020, the Board of Management of Allianz SE decided to
cancel the execution of the second tranche of the Share Buy-Back Pro-
gram 2020 in the amount of € 750 mn.
As of 31 December 2020, the Allianz Group believes that there are
no outstanding regulatory capital or compliance matters that would
have materially adverse effects on the financial position or the results
of operations of the Allianz Group.
1_From a formalistic perspective, the German Supervisory Authority deems the model to be "partial" because not all of the
related entities are using the internal model. Some of the smaller entities report under the standard formula and others
under the deduction and aggregation approach. Without loss of generality, the term internal model might be used in the
following chapters, e.g., in case descriptions also referring to entities that use the internal model, or descriptions focusing
on processes with respect to the internal model components.
2019
2020
Premiums written
Income from financial assets and liabilities
carried at fair value through income (net)
€ mn
2020
Group
Life/Health Consolidation
Casualty
Property-
and liabilities carried at fair value through
income (net)
23 _ Income from financial assets
€ mn
Premiums earned (net)
21 Premiums earned (net)
NOTES TO THE CONSOLIDATED INCOME STATEMENT
D_Consolidated Financial Statements
149
Annual Report 2020 - Allianz Group
Non-current assets and assets of disposal groups classified
as held for sale
Subtotal
Reversals of impairments
Total
2020
2019
Annual Report 2020 - Allianz Group
Some insurance subsidiaries of the Allianz Group are subject to
regulatory restrictions on the amount of dividends that can be remitted
to Allianz SE without prior approval by the appropriate regulatory
body. These restrictions require that a company may only pay divi-
dends up to an amount in excess of certain regulatory capital levels, or
based on the levels of undistributed earned surplus or current year in-
come or a percentage thereof. Allianz Group's Board of Management
believes that these restrictions will not affect the ability of Allianz SE to
pay dividends to its shareholders in the future.
(1,888)
1,946
(1,555)
€ mn
Fee and commission expenses
€ mn
Investment expenses
32 Fee and commission expenses
30_Investment expenses
D_Consolidated Financial Statements
151
(1,824)
2020
(5,467)
14
(4,549)
(1,192)
(493)
(363)
(5,041)
(1,839)
(439)
(275)
15
2019
2020
2019
Subtotal
(337)
(375)
Service agreements
(1,494)
(1,640)
Total
(286)
(288)
(10)
Expenses from fixed assets from alternative investments
(1,242)
Fees from credit and assistance business
(403)
(447)
PROPERTY-CASUALTY
(805)
(905)
Expenses from real estate held for investment
Investment management expenses
(1,550)
(5,481)
(44)
477
(109)
286
465
Interest expenses
(295)
(109)
(44)
472
437
563
2019
2020
Balance as of 1 January
Current service costs
26,483
23,436
16,226
2020
437
477
10,302
Other²
295
183
Interest income
465
286
Net defined benefit balance
8,853
III
2019
14,624
2020
2019
2020
2019
44
40
(1-11+111)
(183)
3,001
Effect of asset ceiling¹
6
21
18
2019
2020
Total
Share-based payment
Post-employment benefits
Short-term employee benefits
As of 31 December
€ mn
162
5
Remuneration of the board members according to IAS 24.17
37 Related party transactions
Besides the above-mentioned investments in investment funds,
the Allianz Group also holds investment funds to fund unit-linked insur-
ance contracts. However, these holdings are held on behalf and for the
benefit of unit-linked policyholders only. For that reason, these hold-
ings are not included in the above-mentioned table. As of 31 Decem-
ber 2020, the volume of unit-linked assets amounted to € 137,307 mn
(2019: € 132,168 mn). Any exposure to loss on these investments is
solely borne by the unit-linked policyholder.
As of the reporting date, the Allianz Group has receivables from
unconsolidated investment funds, which are mainly due in return for
asset management services, amounting to € 1,056 mn (2019:
€ 1,036 mn). Furthermore, the Allianz Group has entered commit-
ments to invest in private equity funds and further financial instruments
of up to € 25,017 mn as of 31 December 2020 (2019: € 20,691 mn).
The carrying amounts in the tables listed above correspond to an
aggregated amortized cost amount of € 36,425 mn (2019:
€ 32,421 mn). In a very extreme scenario, this amortized cost amount
represents the maximum exposure to loss for the Allianz Group from
these investments. In the reporting period, the Allianz Group has not
provided any financial or other support to these entities, nor does it
have the intention to provide such support in the future.
Of this investment fund exposure of Allianz Group, investments of
€ 11.3 bn (2019: € 14.1 bn) relate to listed investment funds, whereas
investments of € 30.2 bn (2019: € 24.2 bn) relate to unlisted invest-
ment funds.
38,372
41,563
1,072
1,617
5,417
3,440
7,132
7,774
The following table sets out the remuneration of the board members
according to IAS 24.17:
21
20
45
23
104
106
43
81
2019
2020
Commitments
COMMITMENTS
Performance guarantees
Total
As of 31 December
Financial guarantees
Indemnification contracts
€ mn
Guarantees
Since July 2020, multiple complaints have been filed in the U.S.
Federal Court for the Southern District of New York (the "S.D.N.Y."), and
also in certain U.S. State Courts against Allianz Global Investors U.S.
LLC ("Allianz GI U.S. LLC") and in certain complaints, against certain of
Allianz GI U.S. LLC's affiliates, including Allianz SE and Allianz Asset
Management GmbH ("Affiliate Allianz Defendants"), in connection
with losses suffered by investors in Allianz GI U.S. LLC's Structured Al-
pha funds ("Funds") during the COVID-19 related market downturn.
The actions brought to date have included institutional investor plain-
tiffs and individual plaintiffs with certain plaintiffs asserting claims on
behalf of putative classes. An investment consultant has also asserted
third-party claims against Allianz GI U.S. LLC. Plaintiffs in the pending
actions have alleged losses of several billion dollars. In exchange for a
tolling agreement, plaintiffs in the actions filed in the S.D.N.Y. have
agreed to voluntarily dismiss claims against the Affiliate Allianz
In September 2015 and in January 2017, two separate putative
class action complaints were filed against Allianz Life Insurance Com-
pany of North America ("Allianz Life") making allegations similar to
those made in prior class actions regarding the sale of Allianz Life's an-
nuity products, including allegations of breach of contract and viola-
tion of California unfair competition law. In one matter, the Court de-
nied class certification. The case, which continued as an individual ac-
tion, was settled between the parties with no effect on Allianz Group's
financial position. The ultimate outcome of the remaining case cannot
yet be determined.
Allianz Group companies are involved in legal, regulatory, and arbitra-
tion proceedings in Germany and a number of foreign jurisdictions, in-
cluding the United States. Such proceedings arise in the ordinary
course of business, including, amongst others, their activities as insur-
ance, banking and asset management companies, employers, inves-
tors and taxpayers. While it is not feasible to predict or determine the
ultimate outcome of such proceedings, they may result in substantial
damages or other payments or penalties or result in adverse publicity
and damage to the Allianz Group's reputation. As a result, such pro-
ceedings could have an adverse effect on the Allianz Group's business,
financial condition and results of operations. Apart from the proceed-
ings discussed below, Allianz SE is not aware of any threatened or
pending legal, regulatory or arbitration proceedings which may have,
or have had in the recent past, significant effects on its and/or the
Allianz Group's financial position or profitability. Material proceedings
in which Allianz Group companies are involved are in particular the fol-
lowing:
LITIGATION
38 Litigation, guarantees, and other
contingencies and commitments
GUARANTEES
Defendants. In addition to the complaints filed to date, other investors
in the Funds, or other third parties, may bring similar actions. Allianz
intends to defend vigorously against the allegations contained in the
complaints. Allianz GI U.S. LLC has also received information requests
from the U.S. Securities and Exchange Commission ("SEC") regarding
an SEC investigation of the Funds, and is fully cooperating with the
SEC's investigation. The ultimate outcome of the court proceedings as
well as the SEC investigation cannot yet be determined.
Due to reinsurance agreements with the joint venture Enhanzed
Reinsurance Ltd., Allianz SE recognized reinsurance assets and depos-
its retained for reinsurance ceded amounting to each € 2.3 bn for the
year ended 31 December 2020.
Business relations with joint ventures and associates are set on an
arm's length basis.
Transactions between Allianz SE and its subsidiaries that are to be
deemed related parties have been eliminated in the consolidation
and are not disclosed in the notes.
D_Consolidated Financial Statements
Annual Report 2020 - Allianz Group
Further information on the remuneration of board members and trans-
actions with these persons can be found in the Remuneration Report.
45
8,817
9,695
15,933
19,037
CMO/CDO
CMBS
As of 31 December
€ mn
Carrying amounts of ABS and MBS investments by type of category
INTERESTS IN ASSET-BACKED SECURITIES (ABS)
AND MORTGAGE-BACKED SECURITIES (MBS) ISSUED
BY SECURITIZATION VEHICLES
NATURE OF RISKS ASSOCIATED WITH
UNCONSOLIDATED STRUCTURED ENTITIES
Income derived from the management of investment funds
mainly includes asset management fees and performance-based fees.
Investment funds launched by group-internal asset managers can
be considered to be sponsored by the Allianz Group. As a sponsor, the
Allianz Group is involved in the legal set-up and marketing of internally
managed investment funds through its asset management subsidiar-
ies. This may include providing seed capital to the funds and providing
administrative services to ensure the investment funds' operation. In-
vestment funds managed by group-internal asset managers can be
reasonably associated with the Allianz Group. The use of the Allianz
name for investment funds is another indicator that the Allianz Group
has acted as a sponsor for the respective funds. Information on the
management fees generated in the asset management business is dis-
closed in note 25.
internal asset managers. Investment funds managed by Allianz Group
may include mutual funds, special funds, and other funds.
D_Consolidated Financial Statements
161
Annual Report 2020 - Allianz Group
Within the asset management business, investment funds are estab-
lished and managed to accommodate retail and institutional clients'
requirements to hold investments in specific asset classes, market seg-
ments, or regions. Within the insurance business, policyholder money is
partly invested in investment funds managed by Allianz's group-
ASSET MANAGEMENT ACTIVITIES
With regard to investment activities, income mainly includes
distributions from the funds as well as realized gains and losses from
disposals.
Investment funds are generally subject to stringent regulatory
requirements from financial authorities in all jurisdictions across the
world. Comprehensive regulation of funds protects fund investors and
also helps to limit investment risk. These mechanisms result in a legal
set-up of funds that the Allianz Group has to accept as investor and
which may lead to a classification as structured entities under IFRS 12.
INVESTMENTS IN INVESTMENT FUNDS
Considering the broad variety of investment funds across different
jurisdictions, the classification of investment funds as structured entities
based on the definition in IFRS 12 is judgmental. As a general rule, the
management of relevant activities of an investment fund is delegated
to the fund manager via asset management agreements. In contrast,
influence from investors on the relevant activities of investment funds
is usually either precluded by legal or regulatory provisions or not
deemed substantial.
Income derived from the management of securitization vehicles
comprises asset management fees.
Within the asset management business, the Allianz Group acts as
asset manager for some securitization vehicles. The assets under man-
agement of these vehicles amounted to € 1,517 mn as of 31 Decem-
ber 2020 (2019: € 1,034 mn). Some of the affected vehicles have been
set up by the Allianz Group, others by third parties. In this context, the
role of the Allianz Group is limited to asset management. The
Allianz Group has not invested in these vehicles being managed.
Income derived from investments in securitization vehicles mainly
includes interest income generated from ABS and MBS, as well as real-
ized gains and losses from disposals of these securities.
Securitization vehicles invested in by the Allianz Group have gen-
erally been set up by third parties. Furthermore, the Allianz Group has
neither transferred any assets to these vehicles nor has it provided any
further credit enhancements to them.
The Allianz Group acts as an investor in ABS- or MBS-issuing securiti-
zation vehicles that purchase pools of assets including commercial
mortgage loans (CMBS), auto loans, credit card receivables, and oth-
ers. These securitization vehicles refinance the purchase of assets by
issuing tranches of ABS or MBS whose repayment is linked to the per-
formance of the assets held by the vehicles.
INVESTMENTS IN ASSET-BACKED SECURITIES (ABS)
AND MORTGAGE-BACKED SECURITIES (MBS) ISSUED
BY SECURITIZATION VEHICLES
In the following sections, the business activities involving uncon-
solidated structured entities are described.
investors as part of its reinsurance business. Generally, the classifica-
tion of an entity as a structured entity may require significant judge-
ment.
The Allianz Group engages in some business activities that involve
the use of entities that meet the above-mentioned definition of struc-
tured entities. Primarily, the Allianz Group is involved with such entities
due to its investment activities associated with its insurance business
and due to its asset management activities. Furthermore, structured
entities are used by the Allianz Group to source out certain risks to
Expenses recognized in the consolidated
U.S. Agency
34
Auto
Other
2019
2020
1_Comprises mainly investments.
Total¹
Stock funds
Other funds
As of 31 December
Private equity funds
Debt funds
Property funds
€ mn
Investments in investment funds by asset class
INVESTMENTS IN INVESTMENT FUNDS
The carrying amounts in the tables listed above correspond to an
aggregated amortized cost amount of € 26,711 mn (2019:
€ 28,162mn). In a very extreme scenario, this amortized cost amount
represents the maximum exposure to loss for the Allianz Group from
these investments. In the reporting period, the Allianz Group has not
provided any financial or other support to these entities, nor does it
intend to provide such support in the future.
4,279
28,858
3,940
28,074
107
65
940
677
5,096
3,919
5,575
6,394
12,862
13,079
2019
2020
2_Thereof rated AAA or AA € 25,357 mn (2019: € 26,445 mn).
1_Comprises mainly investments.
Total¹,2
Credit Card
||
210
€ mn
1,303
1,187
123
1,310
1,156
131
1,287
1,071
113
1,184
453
47
121
500
40
507
lease payments
Interest
payments
payments
Interest
payments
of minimum
Present value
Future
minimum
lease
Present value
of minimum
lease
467
1,182
276
2,725
Fair value of plan assets
Defined benefit obligation
€ mn
Reconciliation of defined benefit obligation, fair value of plan assets, effect of asset ceiling, and net defined benefit balance
The following table sets out the changes in the defined benefit
obligation, in the fair value of plan assets, in the effect of the asset ceil-
ing as well as in the net defined benefit balance for the various
Allianz Group defined benefit plans:
DEFINED BENEFIT PLANS
D_Consolidated Financial Statements
165
Annual Report 2020 - Allianz Group
Additionally, the Allianz Group offers a deferred compensation
program, "Pensionszusage durch Entgeltumwandlung (PZE)", for
active employees. Within some boundaries they convert at their
discretion parts of their gross income and, in exchange, receive a
pension commitment of equal value. PZE is qualified as a defined
benefit plan with small risk exposure.
The period in which a retirement benefit can be drawn is usually
between the ages of 60 and 67. Disability benefits are granted until
retirement pension is paid. In the case of death under the previous
plans, surviving dependents normally receive 60% (widow/widower)
and 20% (per child) of the original employee's pension, in total not to
exceed 100%. Under the "My Allianz Pension" plan, the surviving
dependents receive the capital accrued.
Pension increases apart from AVK and APV are guaranteed at
least with 1% p.a. Depending on legal requirements, some pension
increases are linked to inflation. In AVK the complete surplus share of
the retirees is used to increase their pension.
There is also a partly funded defined benefit pension plan for
agents (Vertreter VersorgungsWerk, VVW), which has been closed for
new entrants as of 31 December 2011. A part of the pension plan
serves as a replacement for the compensatory claim of agents
according to German Commercial Code (§89b). VVW is similar to a fi-
nal salary benefit plan and pension increases are broadly linked to in-
flation.
contribution-based pension plans are allocated to a trust (Methusa-
lem Trust e.V.) and managed by a board of trustees. For the AVK the
annual minimum interest rate guaranteed is 1.75% - 3.50%, depend-
ing on the date of joining the Allianz Group, and for the closed part of
the contribution-based pension plan it is 2.75%.
Employees who joined Allianz before 1 January 2015 participate
in the Allianz Versorgungskasse VVaG (AVK), financed through
employee contributions, and the Allianz Pensionsverein e.V. (APV),
which is financed by the employer. Both pension funds provide
pension benefits for the base salary up to the GSSC and are wholly
funded along local regulatory requirements and were closed to new
entrants, effective 31 December 2014. AVK and APV are legally
separate administered pension funds with trustee boards being
responsible for the investment of the assets and the risk management.
AVK is subject to German insurance regulation. The assets of the
Most active German employees participate in contribution-
based plans using different vehicles to cover the base salary both
below and above the German social security ceiling (GSSC). Since
1 January 2015, the Allianz Group contributes for new entrants and for
the majority of contribution-based pension plan beneficiaries above
the GSSC to the low-risk pension plan "My Allianz Pension", where only
contributions are preserved. For salaries above the GSSC, the
Allianz Group decides each year whether and to which extent a
budget for the contribution-based pension plans is provided.
Independently of this decision, an additional risk premium is paid to
cover death and disability. Generally the accruals of the contribution-
based pension plans are wholly funded, whereas the grandfathered
plans are funded to a minor extent. On retirement, the accumulated
capital is paid as a lump sum or converted to a lifetime annuity.
Each of the pension plans in Germany, the U.K. and Switzerland
contributes more than 5% to the Allianz Group's defined benefit
obligation or its plan assets. As the Allianz Retirement and Death
Benefits Fund in the U.K. closed from 1 July 2015 to future accrual and
the plans in Switzerland are nearly negligible from a risk perspective,
except a minor liquidity risk due to the "Freizügigkeitsleistung", only the
defined benefit plans in Germany are described in more detail regard-
ing key risks and regulatory environment.
In the Pension Task Force, the heads of Group HR, Group
Accounting and Reporting, Group Treasury and Corporate Finance,
Group Actuarial, Planning & Controlling, Group Risk and AIM met four
times to provide global governance and pre-align pension-related
topics such as risk management and Solvency II prior to relevant
Group Committee meetings.
Risks typically associated with defined benefit plans are biometric
risks such as longevity, disability, and death as well as economic risks
such as interest rates, inflation and compensation increases. New
plans are primarily based on contributions and may include, in some
cases, guarantees such as the preservation of contributions or mini-
mum interest rates.
The Allianz Group provides competitive and cost-effective
retirement and disability benefits using risk appropriate vehicles. The
plans may vary from country to country due to the different legal, fiscal
and economic environment.
Retirement benefits in the Allianz Group, which are granted to
employees and in Germany also to agents, are either in the form of
defined benefit or defined contribution plans. For defined benefit
plans, the beneficiary is granted a defined benefit by the employer or
via an external entity. In contrast to defined contribution arrange-
ments, the future cost to the employer of a defined benefit plan is not
known with certainty in advance.
40 Pensions and similar obligations
D_Consolidated Financial Statements
Annual Report 2020 - Allianz Group
2,791
299
3,089
lease
Future
minimum
2019
2020
€ mn
Maturities for lease liabilities
ment.
The Allianz Group occupies property in many locations under various
long-term leases and has entered into various leases covering the
long-term use of data processing equipment and other office equip-
39_Lease arrangements
31 December 2020, and under inclusion of the contributions to the
mandatory insurance scheme mentioned above for a limited period of
time, and assuming that no other life insurer is exempted from pay-
ments, the aggregate outstanding commitment of Allianz Lebensver-
sicherungs-AG and its subsidiaries to the insurance guarantee scheme
and to Protektor is € 2,449 mn (2019: € 1,910 mn).
D_Consolidated Financial Statements
163
Annual Report 2020 - Allianz Group
The insurance guarantee scheme for life insurers levies annual
contributions and, under certain circumstances, special contributions.
As of 31 December 2020, the future liabilities of Allianz Lebensversi-
cherungs-AG and its subsidiaries to the insurance guarantee scheme
pursuant to the SichLVFinV amount to annual contributions of
€ 19.5 mn (2019: € 19.5 mn) and potential special contributions of, in
principle, €270 mn (2019: € 210 mn) per year. In addition, Allianz
Lebensversicherungs-AG and some of its subsidiaries have assumed a
contractual obligation to provide, if required, further funds to Protektor
Lebensversicherungs-AG ("Protektor"), a life insurance company that
has assumed the task of the mandatory insurance guarantee scheme
for life insurers. Such obligation is, in principle, based on a maximum of
1% of the sum of the net underwriting reserves with deduction of pay-
ments already provided to the insurance guarantee scheme. As of
Pursuant to §§221 et seq. of the German Insurance Supervision
Act ("Versicherungsaufsichtsgesetz" - VAG), mandatory insurance
guarantee schemes ("Sicherungsfonds") for life insurers as well as for
health insurers are implemented in Germany, which are financed
through their member undertakings.
OTHER COMMITMENTS AND CONTINGENCIES
The Tier 1 Capital Securities issued by HT1 Funding GmbH were re-
deemed on 30 June 2020. This automatically terminated the contin-
gent indemnity agreement between Allianz and HT1 Funding GmbH,
pursuant to which Allianz was, under certain circumstances, obliged to
make payments to HT1.
Total
Other
33,433
37,500
4,545
5,416
8,197
7,067
Debt investments
20,691
25,017
Commitments to acquire interests in associates and available-
for-sale investments
2019
2020
As of 31 December
As of 31 December
181
Less than one year
More than five years
As of 31 December 2020, the maturities for lease liabilities were as fol-
lows:
AS A LESSEE
164
6,741
Total
2,847
More than 5 years
670
Between 4 and up to 5 years
689
Between 3 and up to 4 years
767
Between 2 and up to 3 years
834
Between 1 and up to 2 years
933
2020
One year and less
As of 31 December
€ mn
Operating leases - maturities for the future minimum lease payments
As of 31 December 2020, the maturities for the future minimum
lease payments of operating leases were as follows:
The Allianz Group leases out its investment properties (see note 7)
under operating leases because they do not transfer substantially all
of the risks and rewards incidental to the ownership of the assets. In-
vestment property comprises a number of commercial properties that
are leased to third parties.
For the year ended 31 December 2020, the lease income for operating
leases amounted to € 1,016 mn.
AS A LESSOR
For the year ended 31 December 2020, the total cash outflow for
leases amounted to € 576 mn.
Total
Between one and five years
income statement
An increase in the discount rate by 50 basis points would lead to
a decrease of € 1.8 bn (2019: € 1.7 bn) in the defined benefit
obligation, whereas a decrease in the discount rate by 50 basis points
would lead to an increase of € 2.0 bn (2019: 2.0 bn).
857
Due to a well-diversified portfolio of approximately 135,000
(2019: 140,000) plan participants, no reasonable uncertainty is
expected with regard to future cash flows that could affect the liquidity
of the Allianz Group. The chart below shows the asset allocation:
PLAN ASSETS/ASSET LIABILITY MANAGEMENT (ALM)
Based on the estimated future cash flows of € 855 mn for 2021,
€ 899 mn for 2022, € 901 mn for 2023, € 947 mn for 2024, € 924 mn for
2025, and € 4,753 mn for 2026 - 2030, the weighted duration of the
defined benefit obligation is 17.4 (2019: 17.5) years. Based on the lia-
bility profiles of the defined benefit obligation and on the regulatory
funding requirements, the Allianz Group uses stochastic asset liability
models to optimize the asset allocation from a risk-return perspective.
An increase of pre-retirement benefit assumptions (e.g. a salary
increase) of 25 basis points would have an effect of € 73 mn (2019:
€ 73 mn) on the defined benefit obligation. However, the increase of
post-retirement assumptions (e.g. inflation-linked increases of pension
payments) of 25 basis points would increase the defined benefit
obligation by € 586 mn (2019: € 579 mn).
NATURE, PURPOSE, AND ROLE OF THE
ALLIANZ GROUP IN STRUCTURED ENTITIES
Under IFRS 12, a structured entity is defined as an entity that has been
designed so that voting rights or similar rights held by an investor are
not the dominant factor in deciding who controls the entity, such as
when any voting rights relate to administrative tasks only and the rele-
vant activities are directed by means of contractual arrangements.
The range for the sensitivity calculations was derived by analyzing
the average volatility over a five-year period.
The discount rate assumption is the most significant risk for the
defined benefit obligation. It reflects market yields at the balance
sheet date of high-quality fixed income investments corresponding to
the currency and duration of the liabilities. In the Eurozone, the deci-
sion for the discount rate is based on AA-rated financial and corporate
bonds and a standardized cash flow profile for a mixed population.
For the year ending 31 December 2020, the discount curve, previously
provided by Allianz Investment Data Services (IDS), was replaced by a
curve provided by the external pension consultant Willis Towers Wat-
son. This represents the market environment for pension obligations
more accurately. As of 31 December 2020, the effect from this modifi-
cation on the Defined Benefit Obligation is € 454 mn. For the year end-
ing 31 December 2021, the service cost will be lower by € 16 mn and
the net interest expense will be higher by € 18 mn.
1_Real estate, Annuity contracts and Life insurance investment products are generally non-quoted.
2_Includes as of 31 December 2019 € 521 mn in cash and cash equivalents in the Netherlands due to a plan change.
The recognized expense is recorded based on the assumptions of the
corresponding previous year.
16,130
713
341
1,077
1,168
3,877
16,226
The bulk of the plan assets are held by Allianz Versorgungskasse
VVaG, Munich, which is not part of the Allianz Group. Plan assets do
not include any real estate used by the Allianz Group and include only
€ 3.1 mn (2019: 3.3 mn) of its own transferable financial instruments.
In addition to the plan assets of € 16.1 bn (2019: € 16.2 bn), the
Allianz Group has dedicated assets at Group level amounting to
€9.7 bn as of 31 December 2020 (2019: € 9.3 bn), which are likewise
managed according to Allianz ALM standards.
CONTRIBUTIONS
For the year ending 31 December 2021, the Allianz Group expects to
contribute € 271 mn to its defined benefit plans (2019: € 341 mn for
the year ending 31 December 2020) and to pay € 363 mn directly to
participants in its defined benefit plans (2019: € 335 mn for the year
ending 31 December 2020).
between share price performance and relative performance compared
to the index as well as the relevant caps and thresholds as defined in
the payout formula. The expected future payout is determined on the
basis of observable market data as of the valuation date and market
standard simulation techniques.
The following table shows the assumptions used in calculating the
fair value of the RSUs at grant date:
The RSUs are virtual stocks without dividend payments and with
a capped payout. The fair value is calculated by subtracting the net
present value of expected future dividend payments until maturity as
well as the fair value of the cap from the prevailing share price as of
the valuation date. The cap is valued as a European short call option,
using prevailing market data as of the valuation date.
In addition, upon the death of a plan participant, a change of con-
trol or notice for operational reasons, the RSUs vest immediately and
are exercised by the company.
The RSUs are subject to a contractual vesting period of four years
and the payout per RSU is fixed on the last day of the contractual vest-
ing period, which ends on the tenth trading day following the annual
financial media conference in the year the respective AEI plan expires.
D_Consolidated Financial Statements
167
Annual Report 2020 - Allianz Group
The RSU granted to a plan participant obligate the Allianz Group
to pay in cash the ten-day average Xetra closing price of the Allianz SE
share on the vesting day, or to convert one RSU into one Allianz SE
share. The Allianz Group can choose the settlement method for each
unit. The payout is capped at a 200% share price growth above the
grant price.
The AEI plan is granted in the form of restricted stock units (RSUs) and
is part of the variable compensation component for the plan benefi-
ciaries.
ALLIANZ EQUITY INCENTIVE PLAN (AEI PLAN)
41 Share-based compensation plans
During the year ended 31 December 2020, the Allianz Group rec-
ognized expenses for defined contribution plans of € 311 mn (2019:
€ 273 mn). Additionally, the Allianz Group paid contributions for state
pension schemes of € 329 mn (2019: € 355 mn).
Defined contribution plans are funded through independent pension
funds or similar organizations. Contributions fixed in advance (e.g.
based on salary) are paid to these institutions and the beneficiary's
right to benefits exists against the pension fund. The employer has no
obligation beyond payment of the contributions.
DEFINED CONTRIBUTION PLANS
4,065
The following table shows the assumptions used in calculating the
fair value of the index-linked RSUs at grant date:
827
3,391
Annuity contracts¹
1.9
1.8
Rate of compensation increase
Real estate¹
0.3
Rate of pension increase
0.3
Non-quoted
2.1
1.3
United Kingdom
Quoted
0.9
Switzerland
1.3
1.5
Life insurance investment products¹
3,494
4,671
4,858
14
3
1,656
1,302
2019
2020
D_Consolidated Financial Statements
Total
Other²
0.9
0.9
Rate of medical cost trend
900
Assumptions of LTI plans
Year of issue¹
Share price
19.2
22.5
%
Allianz SE share price
Expected volatility of the
(0.1)
18.6
(0.6)
%
Average interest rate
4.9
5.2
5.5
%
(0.5)
1_The AEI RSUs are granted as part of the remuneration of the respective prior year.
2_The assumptions for RSU grants delivered in March 2021 are based on best estimate.
The RSUs are accounted for as cash-settled plans because the
Allianz Group intends to settle in cash. Therefore, the Allianz Group ac-
crues the fair value of the RSUs as compensation expenses over the
IFRS vesting period. During the year ended 31 December 2020, the
Allianz Group recognized compensation expenses related to the AEI
plans of € 98 mn (2019: € 216 mn).
As of 31 December 2020, the Allianz Group recorded provisions of
€ 346 mn (2019: € 426 mn) for these RSUs in Other liabilities.
Annual Report 2020 - Allianz Group
168
1_For detailed information regarding the LTI plans and the remuneration policy for the members of the Allianz SE's Board
of Management please see the Remuneration Report.
The fair value of the underlying M-unit options was measured
using the Black-Scholes option pricing model. Volatility was derived in
part by considering the average historical and implied volatility of a
selected group of peers. The expected life of one granted option was
According to an amendment of the PIMCO LLC Class M-unit Plan,
no new M-unit options will be issued after 14 March 2020. Already is-
sued and outstanding M-unit options remain valid and continue as is.
A maximum of 250,000 M-units are authorized for issuance under
the M-unit Plan.
In 2008, Allianz GIL.P. launched a management share-based payment
incentive plan for certain senior-level executives and affiliates of
PIMCO LLC. Participants in the plan are granted options to acquire an
own class of equity instruments (M-units), which vest in one-third incre-
ments on approximately the third, fourth, and fifth anniversary of the
option grant date. Upon vesting, options will automatically be exer-
cised in a cashless transaction, provided they are in the money. Partic-
ipants may elect to defer the receipt of M-units through the M-unit De-
ferral Plan until termination of their service at the latest. With the M-
unit Plan, participants can directly participate in PIMCO's perfor-
mance. Class M-units are non-voting common equity with limited infor-
mation rights. They bear quarterly distributions equal to a pro-rata
share of PIMCO's net distributable income. Deferred M-units have a
right to receive a quarterly cash compensation equal to and in lieu of
quarterly dividend payments.
PIMCO LLC CLASS M-UNIT PLAN
As of 31 December 2020, the Allianz Group recorded provisions of
€ 19 mn (2019: € 3 mn) for these index-linked RSUs in Other liabilities.
The index-linked RSUs are accounted for as cash-settled plans
because the Allianz Group settles in cash. Therefore, the Allianz Group
accrues the fair value of the RSUs as compensation expenses over the
IFRS vesting period. During the year ended 31 December 2020, the
Allianz Group recognized compensation expenses related to the LTI
plans of € 16 mn (2019: € 3 mn).
The fair value of the index-linked RSUs is calculated as the present
value of the expected future payout, taking into account the link
The contractual vesting period ends on the tenth trading day
following the annual financial media conference in the year the respec-
tive RSU award expires. The payout per RSU is subject to a 200% share
price cap relative to the share price at the grant date and a 200% cap
applied to the performance factor. In addition, there is a cap applicable
to the total compensation including the LTI payout and various other
compensation components.
RSUS granted to the members of the Board of Management obli-
gate Allianz SE to pay per RSU a cash amount equal to the ten-day
average Xetra closing price of the Allianz SE share on the last day of the
contractual vesting period, multiplied by a performance factor which
reflects the total performance of the Allianz stock relative to the total
performance of the Stoxx Europe 600 Insurance Index during the four-
year contractual vesting period.
Under the LTI plan, awards are granted in the form of index-linked
restricted stock units (RSUs) which are part of the remuneration
policy¹ for the members of the Allianz SE's Board of Management.
LONG-TERM INCENTIVE PLAN (LTI PLAN)
Allianz SE share
Average dividend yield of
197.34
1_The LTI RSUs are granted as part of the remuneration of the respective prior year.
2_The assumptions for RSU grants delivered in March 2021 are based on best estimate.
price
Expected volatility of the Allianz SE share
(0.6)
(0.5)
%
Average interest rate
5.2
5.5
%
Average dividend yield of Allianz SE share
202.46
186.52
€
2020
20212
%
0.5
22.5
Expected volatility of the index
2019
2020
202.46
186.52
€
Share price
20212
Year of issue¹
90.1
93.9
%
Expected correlation of the Allianz SE share
price and index
Assumptions of AEI plans
15.8
18.6
%
19.2
655
short duration
Non-quoted
(467)
(787)
(786)
Benefits paid
127
115
(479)
127
Plan participants' contributions
(313)
(352)
313
352
1,469
115
(319)
(308)
Acquisitions and divestitures
(124)
156
(122)
Foreign currency translation adjustments
(1)
(1)
(845)
(1)
(846)
Settlement payments/assets distributed on settlement³
42
11
7
42
18
259
163
2
1,172
680
Return on plan assets greater/(less) than interest income on
plan assets
(48)
47
Experience adjustments
2,719
1,172
867
(31)
20
Changes in demographic assumptions
Actuarial (gains)/losses due to
295
183
Changes in financial assumptions
Change in effect of asset ceiling in excess of interest
Remeasurements recognized in the
consolidated statement of comprehensive
680
2,640
933
Employer contributions
income (before deferred taxes)
2
7
(1,172)
(680)
(48)
47
2,719
867
(31)
20
7
2
(5)
Changes in the consolidated subsidiaries of the Allianz
Group
Annual Report 2020 - Allianz Group
166
The weighted average values of the assumptions for the
Allianz Group's defined benefit plans used to determine the defined
benefit obligation and the recognized expense are as follows:
average life expectancy of a currently 65-year-old plan participant is
about 89.4(2019: 89.3) years for women and 86.7 (2019: 86.5) years for
men. An increase in life expectancy by one year would lead to an in-
crease of the defined benefit obligation by € 821 mn (2019: € 833 mn).
The calculations are based on current actuarially calculated
mortality tables, projected turnover depending on age and length of
service, and internal Allianz Group retirement projections. Although
this represents the best estimate as of today, considering a further
increase in life expectancy could be reasonable. The weighted
The assumptions for the actuarial computation of the defined benefit
obligation and the recognized expense depend on the circumstances
in the country where the plan has been established.
Assumptions for defined benefit plans
ASSUMPTIONS
1_The asset ceiling is determined by taking into account the reduction of future contributions.
2_Includes for 2020 past service cost of € 113 mn in the United Kingdom due to a change in indexation of pension payments and for 2019 past service cost of € 48 mn due to a plan change in the Netherlands.
3_Includes for 2020 € 833 mn in the Netherlands and € 12 mn in Columbia due to plan settlements.
4_As of 31 December 2020, € 6,448 mn (2019: € 6,199 mn) of the defined benefit obligation are wholly unfunded, while € 20,002 mn (2019: € 20,285 mn) are wholly or partly funded.
(62)
(71)
44
(73)
(142)
As of 31 December 2020 and 2019, post-retirement health benefits
were immaterial.
%
As of 31 December
Discount rate
1.1
0.8
long duration
Germany
This includes the following country rates:
Quoted
0
Equity securities
1.2
0.8
As of 31 December
2019
2020
€ mn
Asset allocation of plan assets
9,889
10,096
50
1,842
1,608
thereof assets
10,302
10,370
44
50
16,226
16,130
26,483
26,450
Balance as of 31 December
1
(4)
12
4
13
(354)
Debt securities
(255)
10,725
1,652
1,502
1,530
1,903
1,769
1,761
10,590
11,204
20,479
21,301
Switzerland
United Kingdom
Germany
Thereof allotted to:
10,556
thereof liabilities
structured entities
OVERVIEW
In addition, as part of these transactions, the Allianz Group has
received collateral that it is permitted to sell or repledge in the
absence of default. As of 31 December 2020, the Allianz Group
received collateral consisting of fixed income and equity securities with
a fair value of € 14,187 mn (2019: €8,972 mn), which the
Allianz Group has the right to sell or repledge. For the years ended
31 December 2020 and 2019, no previously received collateral was
sold or repledged by the Allianz Group.
13,087
Foreign currency translation adjustments
Net losses (gains) recognized in consolidated income statement
Disposals through sales and settlements
Net transfers into (out of) level 3
Additions through purchases and issues
Carrying value (fair value) as of 1 January 2020
instruments
contracts
financial
unit-linked
puttable
Financial
liabilities for
Financial
liabilities for
Financial
liabilities held
for trading
€ mn
Reconciliation of level 3 financial liabilities
(348)
14
4
(298)
(68)
Net gains (losses) recognized in consolidated income statement held at the reporting date
1 Primarily include corporate bonds.
61,071
1,302
21,628
37,831
1,159
583
206
314
5
FAIR VALUE MEASUREMENT ON A NON-RECURRING
BASIS
D_Consolidated Financial Statements
159
Annual Report 2020 - Allianz Group
13,910
652
14
Net losses (gains) recognized in consolidated income statement held at the reporting date
305
1,302
12,304
Carrying value (fair value) as of 31 December 2020
(22)
(22)
311
Changes in the consolidated subsidiaries of the Allianz Group
(4)
(1,135)
1,138
14
1,124
(1,415)
(14)
(44)
(1,356)
(7)
(7)
794
Total
14,561
(1,139)
Certain financial assets are measured at fair value on a non-recurring
basis when events or changes in circumstances indicate that the carry-
ing amount may not be recoverable.
Carrying value (fair value) as of 31 December 2020
(22)
5,475
166
Total
52,982
1,159
18,173
33,418
231
Foreign currency translation adjustments
Net gains (losses) recognized in other comprehensive income
Impairments
Net gains (losses) recognized in consolidated income statement
Disposals through sales and settlements
Net transfers into (out of) level 3
Additions through purchases and issues
Carrying value (fair value) as of 1 January 2020
contracts
securities
linked
Equity
Debt
securities¹
Financial
assets for unit-
Available-for-
sale
investments -
investments -
Available-for-
sale
Financial
assets carried
at fair value
through
income
D_Consolidated Financial Statements
€ mn
Reconciliation of level 3 financial assets
6,802
206
12,649
1
(335)
431
Changes in the consolidated subsidiaries of the Allianz Group
(1,523)
(4)
(173)
(1,329)
(18)
(751)
(704)
(47)
815
(409)
74
1,224
14
4
(211)
772
(4,159)
(44)
(1,781)
(1,492)
(841)
407
(7)
51
362
578
If financial assets are measured at fair value on a non-recurring
basis at the time of impairment or if fair value less cost to sell is used
as the measurement basis under IFRS 5, corresponding disclosures can
be found in note 29.
FAIR VALUE INFORMATION ABOUT FINANCIAL ASSETS AND LIABILITIES NOT CARRIED AT FAIR VALUE
Fair value hierarchy (items not carried at fair value)
€ mn
Fair values are mostly determined using the market or the income
approach. Valuation techniques applied for the market
approach include market prices of identical or comparable assets in
markets that are not active. The fair values are either calculated
internally and validated by external experts or derived from expert
appraisals with internal controls in place to monitor these valuations.
REAL ESTATE HELD FOR INVESTMENT
INVESTMENTS IN ASSOCIATES AND JOINT VENTURES
For level 2 and level 3, fair values are mainly based on the income
approach, using a discounted cash flow method or net asset values
as provided by third-party vendors.
For level 2 and level 3, the fair value is mainly determined based on
the market approach using quoted market prices and the income
approach using deterministic discounted cash flow models.
HELD-TO-MATURITY INVESTMENTS
38,184
2,954
27,868
7,362
40,216
2,938
28,605
8,674
14,334
14,334
15,039
15,039
10,375
184
10,191
10,409
178
10,231
13,475
2,770
3,343
7,362
LOANS AND ADVANCES TO BANKS AND CUSTOMERS
For loans and advances to banks and customers, quoted market prices
are rarely available. Level 1 mainly consists of highly liquid advances,
e.g., short-term investments. The fair value for these assets in level 2
and level 3 is mainly derived based on the income approach using de-
terministic discounted cash flow models.
LIABILITIES TO BANKS AND CUSTOMERS
Level 1 mainly consists of highly liquid liabilities, e.g., payables on
demand. The fair value for liabilities in level 2 and level 3 is mainly de-
rived based on the income approach, using future cash flows
discounted with risk-specific interest rates. Main non-market observa-
ble inputs include credit spreads. In some cases, the carrying amount
(amortized cost) is considered to be a reasonable estimate of the fair
value.
CERTIFICATED LIABILITIES AND SUBORDINATED
LIABILITIES
Subtotal
4,224
7,090
Investments
Collaterals with right to resell or repledge
11,455
12,111
Subtotal
11,450
5
5
Other
12,106
Investments
14,768
Collaterals without right to resell or repledge
2020
As of 31 December
€ mn
Assets pledged as collateral
The carrying amounts of the assets pledged as collateral are displayed
in the following table:
ASSETS PLEDGED AS COLLATERAL
assets transferred in the context of repurchase agreement and
securities lending transactions are mainly available-for-sale debt and
equity securities for which substantially all of the risks and rewards are
retained. As of 31 December 2020, the carrying amount of the assets
transferred for securities lending transactions amounted to
€ 11,352 mn (2019: € 9,009 mn). For repurchase agreements, the car-
rying amount of the assets transferred amounted to € 908 mn
(2019: € 910 mn) and the carrying amount of the associated liabilities
amounted to € 906 mn (2019: € 914 mn).
D_Consolidated Financial Statements
Annual Report 2020 - Allianz Group
160
As of 31 December 2020, the Allianz Group substantially retained all
the risks and rewards from the ownership of transferred assets. There
have not been any transfers of financial assets that were
derecognized in full or partly in which Allianz continues to control the
transferred assets. Transfers of financial assets mainly relate to
securities lending and repurchase agreement transactions. Financial
TRANSFERS OF FINANCIAL ASSETS
For level 2, the fair value is mainly determined based on the market
approach, using quoted market prices, and based on the income
approach, using present value techniques. For level 3, fair values are
mainly derived based on the income approach, using deterministic
cash flows with credit spreads as primary non-market observable
inputs. In some cases, the carrying amount (amortized cost) is
considered to be a reasonable estimate for the fair value.
2019
2,760
3,335
8,674
661
1
17,706
17,121
584
1
Investments in associates and joint ventures
2,887
5
1,744
1,137
2,884
5
16,092
1,711
Held-to-maturity investments
Total
Level 33
Level 22
Level 1¹
Total
Level 33
Level 22²
Level 1¹
2019
2020
FINANCIAL ASSETS
As of 31 December
1,169
The following tables show reconciliations of the financial instruments
carried at fair value and classified as level 3:
16,754
25,094
3_Non-market observable inputs.
2 Market observable inputs.
1_Quoted prices in active markets.
Total
Subordinated liabilities
Certificated liabilities
Liabilities to banks and customers
FINANCIAL LIABILITIES
174,320
97,575
69,113
7,631
183,883
Real estate held for investment
108,429
7,112
131,216
58,015
66,708
6,493
138,198
66,209
66,046
5,943
Loans and advances to banks and customers
Total
23,463
23,463
25,094
68,341
Reconciliation of level 3 financial instruments
638
7,090
19,201
Total
4,224
15,679
Financial assets are pledged as collateral as part of sales and repur-
chases, securities borrowing, and transactions with derivatives, under
terms that are usual and customary for such activities.
36 Interests in unconsolidated
Allianz p.l.c., Dublin
Allianz Global Investors U.S. LLC, Dover, DE
100.0
Allianz Finance II Luxembourg S.à r.L., Luxembourg
100.0
Allianz Finance II B.V., Amsterdam
100.0 3
DE
100.0
100.0
Allianz Global Investors U.S. Holdings LLC, Dover,
100.0
Allianz Finance Corporation, Wilmington, DE
100.0
Allianz Balanced Return, Senningerberg
Allianz Bank Bulgaria AD, Sofia
Allianz Finance III B.V., Amsterdam
Allianz Bank Financial Advisors S.p.A., Milan
100.0
100.0
Allianz Banque S.A., Puteaux
100.0
Allianz Benelux S.A., Brussels
100.0
Allianz Bonds Euro High Yield, Paris
100.0 3
Allianz Finance IV Luxembourg S.à r.L., Luxembourg
Allianz Finance IX Luxembourg S.A., Luxembourg
Allianz Finance Pty Ltd., Sydney
Allianz Global Investors UK Limited, London
Allianz Global Life dac, Dublin
100.0
100.0
100.0
99.9
Company Limited, Bangkok
100.0
100.0
Allianz Global Investors Japan Co. Ltd., Tokyo
100.0
100.0
Allianz Europe B.V., Amsterdam
100.0
Allianz Australian Real Estate Trust, Sydney
100.03
Allianz Aviation Managers LLC, Burbank, CA
100.0
Allianz Europe Conviction Equity, Senningerberg
Allianz Europe Ltd., Amsterdam
51.13
Allianz Global Investors Nominee Services Ltd.,
George Town
100.0
100.0
Allianz Ayudhya General Insurance Public
Allianz Ayudhya Assurance Public Company
Limited, Bangkok
100.0
82.8
Allianz Europe Small and Micro Cap Equity,
Senningerberg
100.0 3
Allianz Global Investors Schweiz AG, Zurich
100.0
Allianz Ayudhya Capital Public Company Limited,
Bangkok
Allianz European Real Estate Securities,
Allianz Global Investors Singapore Ltd., Singapore
100.0
49.02
Senningerberg
93.83
Allianz Global Investors Taiwan Ltd., Taipei
Allianz Global Investors Overseas Asset
Management (Shanghai) Limited, Shanghai
Allianz Global Opportunistic Bond, Senningerberg
Allianz Global Risks US Insurance Company Corp.,
Chicago, IL
100.0
100.0
Allianz Food Security, Senningerberg
98.4 3
Allianz Holding France SAS, Paris la Défense
100.0
Allianz Cash SAS, Paris la Défense
100.0
Allianz France Favart I, Paris
100.0 3
Allianz Holdings p.l.c., Dublin
100.0
Allianz Chicago Private Reit LP, Wilmington, DE
100.0
Allianz France Investissement OPCI, Paris la
Allianz Holdings plc, Guildford
100.0
Allianz China Insurance Holding Limited, Shanghai
99.33
Allianz Clean Planet, Senningerberg
100.0
Défense
100.0
Allianz Hospitaliers Valeurs Durables, Paris
Allianz Carbon Investments B.V., Amsterdam
51.0
Allianz China Life Insurance Co. Ltd., Shanghai
100.0 3
Allianz Hospitaliers Euro, Paris
100.0
100.0
Défense
Allianz France Real Estate Invest SPPICAV, Paris la
40.9 2.3
100.0
100.0
100.0 3
100.0
Allianz Brasil Seguradora S.A., Rio de Janeiro
100.0
Allianz Finance VII Luxembourg S.A., Luxembourg
Allianz Finance VIII Luxembourg S.A., Luxembourg
100.0
Allianz Groen Rente Fonds, Rotterdam
100.0
100.0
Allianz Bulgaria Holding AD, Sofia
66.2
Allianz Hayat ve Emeklilik A.S., Istanbul
89.0
Allianz Business Services Limited, Guildford
Allianz FinanzPlan 2055, Senningerberg
46.7 2,3
100.0
Budapest
100.0
Allianz Capital Partners of America LLC, Dover, DE
Allianz Foglalkoztatói Nyugdíjszolgáltató Zrt.,
100.0
Allianz Hold Co Real Estate S.à r.L., Luxembourg
Allianz Holding eins GmbH, Vienna
76.4
100.0
100.0
Allianz Hellas Single Member Insurance S.A.,
Athens
Allianz Fire and Marine Insurance Japan Ltd.,
Tokyo
75.4
Allianz Cameroun Assurances SA, Douala
Allianz Cameroun Assurances Vie SA, Douala
Allianz Euro Credit Risk Control, Senningerberg
Allianz Australia Workers Compensation (Victoria)
Limited, Melbourne
100.0
Allianz General Insurance Company (Malaysia)
Berhad, Kuala Lumpur
98.3 3
Allianz Debt Fund SCSP SICAV-SIF, Luxembourg
Allianz Debt Investments S.à r.l., Luxembourg
Allianz Asset Management of America Holdings
Inc., Dover, DE
100.0
Senningerberg
100.0
100.0
Allianz Asia Private Credit Funds S.A. SICAV-RAIF,
100.0
Allianz General Insurance Co. Ltd., Bangkok
100.0
100.0 3
Allianz Debt Fund FPS, Paris
Allianz Debt Fund S.à r.L., Luxembourg
Allianz Asia Holding Pte. Ltd., Singapore
Allianz General Laos Co. Ltd., Vientiane
100.0
Allianz Digital Services Pte. Ltd., Singapore
100.0
Allianz Asset Management of America LLC, Dover,
DE
100.0
Allianz Global Corporate & Specialty do Brasil
Participações Ltda., Rio de Janeiro
100.0 3
51.0
Allianz Defensief Mix Fonds, Rotterdam
100.0 3
78.7 3
Allianz Global Aggregate Bond, Senningerberg
Allianz Debt Investments SCSP SICAV-SIF,
Luxembourg
Allianz Asset Management of America L.P., Dover,
DE
100.0
100.0
Allianz Global Corporate & Specialty of Africa
100.0
100.0 3
Allianz Creactions 1, Paris
99.8
100.0
Allianz Fund Investments S.A., Luxembourg
71.0
Allianz Côte d'Ivoire Assurances Vie SA, Abidjan
100.0 3
Allianz Allvest Invest SICAV-SIF - Allvest Passive
Invest, Luxembourg
Allianz Fund Investments Inc., Wilmington, DE
74.1
Allianz Côte d'Ivoire Assurances SA, Abidjan
99.7 3
Invest, Luxembourg
100.0
100.0
Allianz Garantiefonds 5%, Rotterdam
Allianz Garantie Fonds 3%, Rotterdam
Allianz Argentina Compañía de Seguros Generales
S.A., Buenos Aires
Allianz Crowdlending FSPI, Paris
100.0 3
Allianz Asac Actions, Paris
100.0 3
Allianz Garantiefonds 3,35%, Rotterdam
100.0 3
100.0 3
Allianz Crowdfunding Fund I FPCI, Paris
Allianz Argentina RE S.A., Buenos Aires
100.0 3
Allianz Garantie Fonds 4,75%, Rotterdam
100.0
100.0 3
Allianz Creactions 2, Paris
100.0
100.0
100.0
100.0
Allianz Australia Partnership Services Pty Limited,
Sydney
100.0
100.0
Allianz Global Investors Asia Pacific Ltd., Hong
Kong
Allianz Engineering Inspection Services Limited,
Guildford
100.0
100.0
Allianz Australia Limited, Sydney
Senningerberg
100.0
Allianz Australia Life Insurance Limited, Sydney
99.03
42.7 2.3
Allianz Global Government Bond, Senningerberg
31.8 2,3
Allianz Emerging Markets SRI Corporate Bond,
Allianz Equity Emerging Markets 1, Paris
Allianz Global Investors Asset Management
(Shanghai) Limited, Shanghai
Allianz Global Investors Ireland Ltd., Dublin
100.0
100.0
Allianz Global Investors Holdings Ltd., London
Allianz Euro Core Infrastructure Debt GP S.à r.L.,
Senningerberg
100.0
100.0 3
Allianz Australia Workers Compensation (NSW)
Limited, Sydney
Allianz Global Investors Distributors LLC, Dover, DE
100.0
Allianz Equity Investments Ltd., Guildford
100.0
Allianz Australia Services Pty Limited, Sydney
100.0
100.0
(Proprietary) Ltd., Johannesburg
100.0
Allianz Global Fundamental Strategy,
Senningerberg
100.0
Sydney
100.0
Allianz Eiffel Square Kft., Budapest
Allianz Australia Claim Services Pty Limited,
100.0
Allianz Elementar Lebensversicherungs-
Ltd., Hamilton
Allianz do Brasil Participações Ltda., São Paulo
100.0
Allianz Global Corporate & Specialty of Bermuda
100.0
Allianz Direct S.p.A., Milan
Allianz Asset Management U.S. Holding II LLC,
Dover, DE
100.0
Sydney
Allianz Global Corporate & Specialty South Africa
Ltd., Johannesburg
Allianz Australia Employee Share Plan Pty Ltd.,
100.0
Allianz EM Loans S.C.S., Luxembourg
Allianz Australia Life Insurance Holdings Limited,
100.0
Aktiengesellschaft, Vienna
100.0
100.0
Allianz Australia Insurance Limited, Sydney
Allianz Global Diversified Infrastructure Equity GP
S.à r.l., Senningerberg
Allianz Elementar Versicherungs-
100.0
Sydney
100.0
Aktiengesellschaft, Vienna
100.0
Allianz Investment Management Singapore Pte.
Ltd., Singapore
100.0
100.0
100.0
Allianz Polska Services Sp. z o.o., Warsaw
Allianz Life Insurance Company Ltd., Moscow
100.0
Allianz Infrastructure Czech HoldCo II S.à r.l.,
Luxembourg
100.0
100.0
Allianz pojistovna a.s., Prague
Allianz Life Financial Services LLC, Minneapolis,
MN
100.0
51.0
Allianz PNB Life Insurance Inc., Makati City
100.0
92.03
Allianz Pimco Mortgage, Vienna
Allianz Life Assurance Company-Egypt S.A.E., New
Cairo
Allianz Infrastructure Czech HoldCo I S.à r.l.,
Luxembourg
Allianz Pensionskasse Aktiengesellschaft, Vienna
100.0
100.0
Allianz penzijní spolecnost a.s., Prague
100.0
Allianz Individual Insurance Group LLC,
100.0
Minneapolis, MN
Allianz Life (Bermuda) Ltd., Hamilton
100.0
Allianz Pimco Corporate, Vienna
82.4 3
Allianz Informatique G.I.E., Paris la Défense
100.0
100.0
Allianz Infrastructure Holding | Pte. Ltd., Singapore
Allianz Infrastructure Luxembourg Holdco I S.A.,
Luxembourg
100.0
Allianz Life Insurance Company of Ghana Limited,
Accra
Allianz Presse US REIT LP, Wilmington, DE
Allianz Private Equity GP S.à r.L., Senningerberg
92.4
100.0
100.0
Allianz Infrastructure Luxembourg Holdco IV S.A.,
Luxembourg
Allianz Life Insurance Lanka Ltd., Colombo
Allianz Life Insurance Company of North America,
Minneapolis, MN
100.0
Allianz Infrastructure Luxembourg I S.à r.L.,
Luxembourg
100.0
Allianz Life Insurance Malaysia Berhad, Kuala
Lumpur
Allianz Private Equity Partners Europa II, Milan
Allianz Private Equity Partners Europa III, Milan
Allianz Private Equity Partners IV, Milan
92.0
99.63
100.0
Allianz Leben Real Estate Holding II S.à r.L.,
Luxembourg
100.0
100.0
Allianz Positive Change, Senningerberg
100.0
Allianz Presse Infra GP S.à r.l., Luxembourg
92.4
100.0
Allianz Infrastructure Luxembourg Holdco II S.A.,
Luxembourg
Allianz Infrastructure Luxembourg Holdco III S.A.,
Luxembourg
Allianz Life Insurance Company of Missouri,
Clayton, MO
92.4
100.0
Allianz Presse US REIT GP LLC, Wilmington, DE
92.4
100.0
Allianz Life Insurance Company of New York, New
York, NY
Allianz Presse Infra S.C.S., Luxembourg
78.5
Senningerberg
Allianz IndexManagement Wachstum,
%
%
D_Consolidated Financial Statements
173
Annual Report 2020 - Allianz Group
100.0
%
Allianz HY Investor LP, Wilmington, DE
Allianz France US REIT GP LLC, Wilmington, DE
100.0
Allianz HY Investor GP LLC, Wilmington, DE
100.0 3
Allianz Combinatie Fonds, Rotterdam
100.0
100.0
Allianz France S.A., Paris la Défense
owned¹
owned¹
100.0 3
Allianz Jewel Fund ICAV, Dublin
100.0 3
Allianz IARD Vintage, Paris
100.0 3
Allianz Opéra, Paris
owned¹
100.0
Allianz Offensief Mix Fonds, Rotterdam
Allianz Investments III Luxembourg S.A.,
Luxembourg
100.0
Allianz IARD S.A., Paris la Défense
100.03
Allianz IARD EM Debt, Paris
100.0 3
100.0 3
100.0
100.0
Défense
100.0
Allianz Leasing Bulgaria AD, Sofia
100.0
Allianz IndexManagement Substanz,
Allianz PCREL US Debt S.A., Luxembourg
93.23
100.0
94.5
Allianz Leben Real Estate Holding I S.à r.l.,
Luxembourg
Allianz Pension Fund Trustees Ltd., Guildford
100.0
100.0
Senningerberg
Allianz Hungária Biztosító Zrt., Budapest
Allianz IndexManagement Chance, Senningerberg
Allianz Patrimoine Immobilier SAS, Paris la
Allianz Colombia S.A., Bogotá D.C.
100.0
Allianz France Richelieu 1 S.A.S., Paris la Défense
83.2
Allianz Hrvatska d.d., Zagreb
Allianz Impact Green Bond, Paris
100.0
100.0
50.0 2
Allianz Partners S.A.S., Saint-Ouen
100.0
Allianz IndexManagement Balance, Senningerberg
86.7 3
Allianz kontakt s.r.o., Prague
Allianz Jingdong General Insurance Company Ltd.,
Guangzhou
100.0
Allianz Private Equity Partners V, Milan
100.0 3
Allianz Invest 10 Division S/U, Vienna
100.0 3
Allianz Multi Horizon 2027-2029, Paris
67.23
Allianz Renewable Energy Fund III GP SCSP,
Senningerberg
100.0
69.1 3
Allianz Invest 11 Division Leben/Kranken, Vienna
Allianz Invest 12 Division Leben/Kranken, Vienna
100.0 3
Allianz Invest 50, Vienna
100.0
Allianz Invest d.o.o., Zagreb
100.0
100.0 3
Allianz Multi Horizon 2030-2032, Paris
Allianz Multi Horizon 2033-2035, Paris
Allianz Multi Horizon 2036-2038, Paris
Allianz Multi Horizon 2039-2041, Paris
Allianz Multi Horizon 2024-2026, Paris
100.0
94.23
Allianz Insurance Singapore Pte. Ltd., Singapore
100.0
Allianz Multi Equilibre, Paris
98.23
Allianz Reinsurance America Inc., Los Angeles, CA
100.0
100.0
100.0
Allianz Multi Harmonie, Paris
99.73
Allianz Reinsurance Management Services Inc.,
Allianz Inversiones S.A., Bogotá D.C.
Wilmington, DE
Allianz International Ltd., Guildford
95.5 3
68.9 3
Allianz Renewable Energy Fund III Lux GP S.à r.l.,
Senningerberg
Allianz Multi Opportunités, Paris
90.4 3
Allianz Renewable Energy Management AT II
GmbH, Pottenbrunn
100.0
Allianz Invest Spezial 3, Vienna
100.0 3
100.0 3
Allianz Multi Rendement Réel, Paris
Allianz Renewable Energy Partners I LP, London
100.0
Allianz Investment Management LLC, Minneapolis,
MN
Allianz Mutual Funds Management Company S.A.,
Athens
Allianz Renewable Energy Partners II Limited,
London
100.0
86.7 3
100.0 3
Allianz Invest Spezial 13, Vienna
Allianz Multi Horizon Long Terme, Paris
100.0
100.0 3
Allianz Renewable Energy Fund Management 1
Ltd., London
100.0
100.0 3
Allianz Invest Kapitalanlagegesellschaft mbH,
Vienna
41.6 2,3
Allianz Renewable Energy Management AT GmbH,
74.6 3
Pottenbrunn
100.0
100.0
Allianz Invest Ostrent, Vienna
94.03
Allianz Multi Horizon Court Terme, Paris
100.0
Allianz Real Estate Trust IV, Sydney
100.0
100.0
Allianz Infrastructure Spain Holdco | S.à r.L.,
Luxembourg
Allianz Real Estate Asia Pacific Pte. Ltd., Singapore
100.0
100.0
Allianz Marine & Transit Underwriting Agency Pty
Ltd., Sydney
Allianz Management Services Limited, Guildford
Allianz Real Estate Investment S.A., Luxembourg
75.0
Allianz Infrastructure Spain Holdco II S.à r.L.,
Luxembourg
100.0
Allianz Marine (UK) Ltd., Ipswich
Allianz Real Estate Japan GK, Tokyo
100.0
100.0
100.0
100.0
Allianz Real Estate (Shanghai) Co. Ltd., Shanghai
Allianz Infrastructure Luxembourg II S.à r.L.,
Luxembourg
Allianz Life Luxembourg S.A., Luxembourg
100.0
Allianz Properties Limited, Guildford
100.0
100.0
Luxembourg
Allianz Madagascar Assurances SA, Antananarivo
Allianz Re Dublin dac, Dublin
100.0
Allianz Infrastructure Norway Holdco | S.à r.L.,
Luxembourg
Allianz Malaysia Berhad, Kuala Lumpur
75.0
100.0
100.0
Allianz Multi Dynamisme, Paris
Allianz Insurance Company of Ghana Limited,
Accra
Allianz Real Estate of America LLC, Wilmington, DE
95.0
Allianz Mid Cap Loans FCT, Paris
100.0
3
Allianz Real Estate Trust III (1) Sub-trust (1),
Sydney
100.0 3
100.0
Allianz Insurance Lanka Limited, Colombo
Allianz Multi Croissance, Paris
3
Allianz Real Estate Trust III (2), Sydney
97.93
74.6
Allianz Insurance plc, Guildford
100.0
Allianz Maroc S.A., Casablanca
97.93
Allianz México S.A. Compañía de Seguros, Mexico
City
100.0
98.9
100.0
Allianz MENA Holding (Bermuda) Ltd., Hamilton
Allianz Real Estate Trust II (1), Sydney
99.23
Allianz Real Estate Trust III (1), Sydney
100.0
Allianz Meridiam Infra Avenir SCSp, Luxembourg
100.0 3
Allianz Real Estate Trust II (2), Sydney
99.23
100.0
Allianz Insurance Company-Egypt S.A.E., New
Cairo
Allianz Insurance Company of Kenya Limited,
Nairobi
100.0
Allianz Fund Investments 2 S.A. (Compartment),
Allianz Allvest Invest SICAV-SIF - Allvest Active
100.0
atpacvc Fund GmbH & Co. KG, Munich
100.0
Allianz Private Equity GmbH, Munich
94.8
ALIDA Grundstücksgesellschaft mbH & Co. KG,
Hamburg
100.0 3
Ashmore EM Corporates, Frankfurt am Main
100.0 3
Allianz PKV-PD Fonds, Frankfurt am Main
100.0
100.0
AREF III GER GmbH & Co. KG, Frankfurt am Main
100.0 3
Allianz PK-PD Fonds, Frankfurt am Main
AGCS-Argos 86 Vermögensverwaltungsgesellschaft
mbH, Munich
100.0
AREF III GER 2 GmbH, Frankfurt am Main
100.0
Allianz Pensionskasse Aktiengesellschaft, Stuttgart
100.0
Allianz AADB Fonds, Frankfurt am Main
100.0
Allianz Private Equity Partners Verwaltungs GmbH,
Munich
atpacvc GmbH, Munich
Allianz ALD Fonds, Frankfurt am Main
100.0
Auros II GmbH, Munich
100.0
Allianz ProzessFinanz GmbH, Munich
100.0 3
Allianz AKR Fonds, Frankfurt am Main
100.0
Munich
100.0
mbH, Munich
Aktiengesellschaft, Munich
Allianz Africa Holding GmbH, Munich
Atropos Vermögensverwaltungsgesellschaft mbH,
Allianz Private Krankenversicherungs-
3
100.0
Allianz ADAC AV Fonds, Frankfurt am Main
100.0
atpacvc GP GmbH, Munich
100.0
100.0
100.0
100.0 3
100.0
AREF III GER 1 GmbH, Frankfurt am Main
APKV-Argos 84
100.0
Allianz of Asia-Pacific and Africa GmbH, Munich
51.0
ADAC Autoversicherung AG, Munich
100.0
Vermögensverwaltungsgesellschaft mbH, Munich
93.3
Allianz NM 28 GmbH & Co. KG, Stuttgart
100.0
APKV-Argos 74
ACP Vermögensverwaltung GmbH & Co. KG Nr. 4d,
Munich
100.0 3
Allianz L-PD Fonds, Frankfurt am Main
100.0
APKV Private Equity Fonds GmbH, Munich
100.0
100.0 3
Allianz LFE Fonds, Frankfurt am Main
ACP Vermögensverwaltung GmbH & Co. KG Nr. 4c,
Munich
100.0
ADEUS Aktienregister-Service-GmbH, Munich
79.6
Allianz Partners Deutschland GmbH, Aschheim
100.0
Allianz Pensionsfonds Aktiengesellschaft, Stuttgart
AGCS-Argos 76 Vermögensverwaltungsgesellschaft
100.0
100.0
ARE Funds AZV GmbH, Munich
Allianz Pension Service GmbH, Munich
100.0
AGCS Infrastrukturfonds GmbH, Munich
100.0
100.0
100.0
ARE Funds AZL GmbH, Munich
100.0
AfricaGrow GP GmbH, Munich
100.0
ARE Funds APKV GmbH, Munich
100.0
Allianz Pension Direkt Infrastruktur GmbH, Munich
60.0
ADVANIA GmbH, Hamburg
100.0
Vermögensverwaltungsgesellschaft mbH, Munich
Allianz Pension Partners GmbH, Munich
Allianz PV 1 Fonds, Frankfurt am Main
92.43
Allianz APAV Fonds, Frankfurt am Main
100.0
AZL PE Nr. 1 GmbH, Munich
3
100.0
Fund, Frankfurt am Main
3
100.0
Allianz DLVR Fonds, Frankfurt am Main
100.0
AZL AI Nr. 1 GmbH, Munich
Allianz SE Ashmore Emerging Markets Corporates
100.0
Allianz Direct Versicherungs-AG, Munich
100.0
mbH & Co. KG, Munich
100.0 3
Allianz SDR Fonds, Frankfurt am Main
100.0
Allianz Digital Health GmbH, Munich
AZ-Argos 71 Vermögensverwaltungsgesellschaft
100.0
Allianz EEE Fonds, Frankfurt am Main
100.0
3
Allianz SE-PD Fonds, Frankfurt am Main
Allianz Taunusanlage GbR, Stuttgart
100.0 3
Allianz FAD Fonds, Frankfurt am Main
100.0
100.0
mbH, Munich
Allianz Stromversorgungs-GmbH, Munich
100.0
Allianz Esa GmbH, Bad Friedrichshall
AZL-Argos 83 Vermögensverwaltungsgesellschaft
Allianz Risk Consulting GmbH, Munich
100.0 3
51.0
Allianz Esa EuroShip GmbH, Bad Friedrichshall
100.0
mbH, Munich
100.0
Allianz Service Center GmbH, Munich
100.0
Allianz EP GmbH, Munich
AZL-Argos 73 Vermögensverwaltungsgesellschaft
100.0 3
Allianz SOA Fonds, Frankfurt am Main
100.0
Allianz Deutschland AG, Munich
100.0
AZ ATLAS Verwaltungs-GmbH, Stuttgart
100.0
Allianz Real Estate GmbH, Munich
Allianz AZL Vermögensverwaltung GmbH & Co.
KG, Munich
100.0
AZ ATLAS Immo GmbH, Stuttgart
100.0 3
Allianz Re Asia, Frankfurt am Main
100.0
Allianz Asset Management GmbH, Munich
100.0
94.9
92.4 3
Allianz PV-RD Fonds, Frankfurt am Main
100.0
Allianz Argos 14 GmbH, Munich
100.0
AVS Automotive VersicherungsService GmbH,
Rüsselsheim
3
92.4
Allianz PV WS Fonds, Frankfurt am Main
100.0 3
AZ ATLAS GmbH & Co. KG, Stuttgart
APKV Infrastrukturfonds GmbH, Munich
100.0
100.0
AZ-Argos 56 Vermögensverwaltungsgesellschaft
mbH, Munich
100.0 3
Allianz RFG Fonds, Frankfurt am Main
100.0
Allianz Climate Solutions GmbH, Munich
100.0
100.0
AZ-Argos 41 Vermögensverwaltungsgesellschaft
mbH, Munich
Allianz Renewable Energy Subholding GmbH & Co.
KG, Sehestedt
100.0
Allianz Rechtsschutz-Service GmbH, Munich
Allianz Capital Partners Verwaltungs GmbH,
Munich
100.0
AZ-Arges Vermögensverwaltungsgesellschaft mbH,
Munich
Allianz Renewable Energy Management GmbH,
Sehestedt
4
100.0
Allianz Capital Partners GmbH, Munich
100.0
Allianz Beratungs- und Vertriebs-AG, Munich
94.0
AZ Northside GmbH & Co. KG, Stuttgart
100.0
100.0
Stuttgart
100.0
Net income attributable to shareholders -
diluted
(28)
(44)
7,914
6,807
Net income attributable to shareholders - basic
Effect of potentially dilutive shares
31 December
Exercisable as of
2019
2020
12,019.69
153,400
11,993.37
148,726
31 December
Outstanding as of
€ mn
Earnings per share
12,934.96
14,451.99
11,241.04
(23,492)
(6,717)
39,751
6,762
7,886
As of 31 December 2020, the aggregate intrinsic value of share
options outstanding was € 600 mn (2019: € 571 mn).
As of 31 December 2020, the M-unit options outstanding have an
exercise price between € 9,250.95 and € 14,552.74 and a weighted-
average remaining contractual life of 2.52 years.
Personnel expenses
PERSONNEL EXPENSES
As of 31 December 2020, the Allianz Group employed 150,269 (2019:
147,268) people, thereof 39,768 (2019: 38,412) in Germany. The aver-
age total number of employees for the year ended 31 December 2020
was 148,737.
NUMBER OF EMPLOYEES
43 Other information
D_Consolidated Financial Statements
169
18.83
18.90
16.48
16.32
14,552.74
9,453.45
11,781.75
Diluted earnings per share (€)
418,749,031
414,464,395
Weighted-average number of shares
outstanding - diluted
418,653,403
95,628
1,536,909
412,927,486
Weighted-average number of shares outstanding - basic
Potentially dilutive shares
Annual Report 2020 - Allianz Group
During the year ended 31 December 2020, the Allianz Group
recorded compensation expenses of € 14 mn (2019: € 13 mn) related
to these share options.
The share options settled by delivery of PIMCO LLC shares are
accounted for as equity-settled plans. Therefore, PIMCO LLC measures
the total compensation expense to be recognized for the equity-
settled shares based on their fair value as of the grant date. The total
compensation expense is recognized over the vesting period.
Basic earnings per share (€)
(6,701)
Forfeited
(27,775)
%
13.2
11.1
%
17.9
25.1
%
3.84
3.84
194.79
0.6
2020
719.44
Risk free rate of return
Expected dividend yield
Expected volatility
Expected return (in years)
Assumptions:
Weighted-average fair value of options granted
Assumptions of Class M-Unit plan
The following table provides the assumptions used in calculating
the fair value of the M-unit options at grant date:
calculated based on treating the three vesting tranches (one third in
years 3, 4, and 5) as three separate awards.
D_Consolidated Financial Statements
2019
€ mn
2.4
Reconciliation of outstanding M-unit options
Exercised
29,802
Granted
11,902.16
143,858
12,019.69
153,400
1 January
Outstanding as of
€
The number and weighted-average exercise price of the M-unit
options outstanding and exercisable are as follows:
For the calculation of diluted earnings per share, the nominator
and denominator are adjusted for the effects of potentially dilutive
shares. These effects arise from various share-based compensation
plans of the Allianz Group.
42 Earnings per share
OTHER SHARE OPTION AND SHAREHOLDING PLANS
The Allianz Group has other local share-based compensation plans,
including share option and employee share purchase plans, none of
which, individually or in the aggregate, are material to the consoli-
dated financial statements.
The Allianz Group offers Allianz SE shares in 40 countries to entitled
employees at favorable conditions. The shares have a minimum hold-
ing period of three to five years. During the year ended 31 Decem-
ber 2020, the number of shares sold to employees under these plans
was 748,482 (2019: 365,959). In addition, during the year ended 31 De-
cember 2020, employees were granted 74,873 (2019: -) free shares.
From 2018 onwards, the employees receive one bonus share for three
shares bought. For the year ended 31 December 2020, these bonus
shares had an equivalent value of € 28 mn (2019: € 19 mn).
EMPLOYEE STOCK PURCHASE PLANS
Weighted-
average
exercise price
2019
Number of
options
Weighted-
average
exercise price
Number of
options
2020
Earnings per share are generally calculated by dividing net income at-
tributable to shareholders by the weighted-average number of shares
outstanding.
99.5
Board of Management and Supervisory Board compensation by
individual is included in the Remuneration Report. The information
provided there is considered part of these consolidated financial state-
ments.
Wirtschaftsprüfungsgesellschaft
Consolidated affiliates
GERMANY
100.0 3
Allianz LAD Fonds, Frankfurt am Main
%
owned¹
owned¹
%
%
owned¹
45 List of participations of the Allianz Group as of 31 December 2020 according to § 313 (2) HGB
D_Consolidated Financial Statements
Annual Report 2020 - Allianz Group
170
2_The disclosure in the Annual Report 2019 was based on a best estimate of the RSU grants. The figures shown here for
2019 now include the actual fair value as of the grant date (6 March 2020). The value therefore differs from the amount
disclosed last year.
1_The relevant share price used to determine the final number of RSUs granted is only available after the sign-off of the
Annual Report by the external auditors, thus numbers are based on a best estimate.
The Allianz Group was not subject to any subsequent events that signifi-
cantly impacted the Group's financial results after the balance sheet
date and before the financial statements were authorized for issue.
44 Subsequent events
Tax services primarily refer to tax compliance services, other ser-
vices mainly refer to consulting services.
Audit services primarily relate to services rendered for the audit of the
Allianz Group's consolidated financial statements, the audit of the stat-
utory financial statements of Allianz SE and its subsidiaries, the audit
of the Allianz Group's Solvency II market value balance sheet as well
as those of Allianz SE and its subsidiaries. In addition, a review of the
Allianz Group's consolidated interim financial statements was per-
formed.
As of 31 December 2020, there were no outstanding loans
granted by Allianz Group companies to members of the Board of Man-
agement or the Supervisory Board.
The total remuneration for all Supervisory Board members,
including attendance fees, amounted to € 2.7 mn (2019: € 2.7 mn).
In 2020, former members of the Board of Management and their
dependents received remunerations and other benefits totaling
€ 8 mn (2019: € 8 mn), while reserves for current pension obligations
and accrued pension rights totaled € 171 mn (2019: € 159 mn).
abracar GmbH, Munich
Allianz Leben Direkt Infrastruktur GmbH, Munich
100.0
Allianz ZWK Nürnberg GmbH & Co. KG, Hamburg
Allvest GmbH, Munich
100.0
APKV Direkt Infrastruktur GmbH, Munich
Allianz Lebensversicherungs-Aktiengesellschaft,
ACP Vermögensverwaltung GmbH & Co. KG Nr. 4a,
Munich
100.0
APK-Argos 85 Vermögensverwaltungsgesellschaft
mbH, Munich
100.0
Allianz Leben Private Equity Fonds Plus GmbH,
Munich
100.0
ACP Vermögensverwaltung GmbH & Co. KG Nr. 4,
Munich
RSUS with a total fair value of € 13.9 mn (2019: € 18.3 mn) were
granted to the Board of Management for the year ended 31 Decem-
ber 2020.
100.0
100.0
100.0
APK Infrastrukturfonds GmbH, Munich
100.0
Allianz Leben Infrastrukturfonds GmbH, Munich
Allianz Leben Private Equity Fonds 2001 GmbH,
Munich
0.0 2
ACP GmbH & Co. Beteiligungen KG II, Munich
100.0
100.0
100.0
APK-Argos 75 Vermögensverwaltungsgesellschaft
mbH, Munich
The equity-related remuneration in 2020 is comprised of 86,097¹
(2019: 112,2522) Restricted Stock Units (RSUs).
The sum of the total remuneration of the Allianz SE Board of Man-
agement for 2020, excluding pension service cost, amounts to € 32 mn
(2019: € 39 mn).
As of 31 December 2020, the Board of Management is comprised of
ten members. The following values reflect the full Board of Manage-
ment active in the respective year.
12,422
12,509
2019
2020
2019
2020
1,200
1,129
thereof: PwC GmbH
PwCIL
Audit services
1,435
Social security contributions and employee assistance
Expenses for pensions and other post-retirement benefits
Total
€ mn
9,787
9,942
Salaries and wages
PwC fees
2019
2020
For services rendered by PwC GmbH and the worldwide member
firms of PricewaterhouseCoopers International Limited (PwCIL), the
following fees were recognized in the fiscal year:
(PwC GmbH) is the external auditing firm for the Allianz Group.
1,439
FEES TO THE AUDITOR
PricewaterhouseCoopers GmbH
45.6
13.8
REMUNERATION FOR THE BOARD OF MANAGEMENT
AND THE SUPERVISORY BOARD ACCORDING TO
§314 (6) HGB
On 10 December 2020, the Board of Management and the Supervi-
sory Board of Allianz SE issued the Declaration of Compliance
according to § 161 AktG, which has been made permanently available
to shareholders on the company's website.
ISSUANCE OF THE DECLARATION OF COMPLIANCE
WITH THE GERMAN CORPORATE GOVERNANCE
CODE ACCORDING TO § 161 AKTG
17.2
18.3
59.5
3.0
2.7
8.7
6.5
59.3
44.2
Other services
Total
0.4
4.0
3.3
Tax services
0.8
1.4
2.6
4.0
Other attestation services
12.8
0.5
AZL-Argos 89 Vermögensverwaltungsgesellschaft
mbH, Munich
100.0
100.0 6
manroland Vertrieb und Service GmbH, Mühlheim
am Main
REC Frankfurt zweite
80.0
REC Frankfurt Objekt GmbH & Co. KG, Hamburg
100.0
AGCS International Holding B.V., Amsterdam
100,0 5,6
manroland AG, Offenbach am Main
94.9
100.0
AGA Service Company Corp., Richmond, VA
70.8
Infrastruktur Putlitz Ost GmbH & Co. KG, Husum
Projekt Hirschgarten MK8 GmbH & Co. KG,
Stuttgart
100.0
AGA Insurance Broker (Thailand) Co. Ltd., Bangkok
100.0
Versicherungen mbH, Munich
100.0 4
PIMCO Europe GmbH, Munich
Objektverwaltungsgesellschaft mbH, Hamburg
60.0
RehaCare GmbH, Munich
100.0
AIM Equity US, Paris
50.0
100.0 3
AIM Equity PG Vie, Paris
AQ Focus Teleport GmbH & Co. KG, Hamburg
100.0
Seine II GmbH, Munich
Joint ventures
100.0
Seine GmbH, Munich
100.0
100.0 3
75.6
Roland Holding GmbH, Munich
100.0
AGF Inversiones S.A., Buenos Aires
100.0
100.0 3
100.0
100.0
AGCS Marine Insurance Company, Chicago, IL
AGCS Resseguros Brasil S.A., São Paulo
AGF FCR, Paris
Stiftung Allianz für Kinder gemeinnützige GmbH,
Munich
AIM Equity Europe Cantons, Paris
Luxembourg
Grundstücksgesellschaft der Vereinten
100.0 3
100.0
Allianz OrtungsServices GmbH, Munich
100.0
META Finanz-Informationssysteme GmbH, Munich
100.0
490 Fulton REIT LP, Wilmington, DE
100.0
Allianz Objektbeteiligungs-GmbH, Stuttgart
100.0
96.5
490 Lower Unit GP LLC, Wilmington, DE
490 Fulton JV LP, Wilmington, DE
Allianz Global Benefits GmbH, Stuttgart
Mercato Leadmanagement Investments Holdings
GmbH, Berlin
100.0
35° East SAS, Paris la Défense
55.3
AERS Consortio Aktiengesellschaft, Stuttgart
100.0
MAWISTA GmbH, Wendlingen am Neckar
100.0
2media GmbH, Wallisellen
100.0
100.0 3
100.0
100.0
PIMCO EM Corporates, Frankfurt am Main
AF12 Real Estate Fund (Compartment),
100.0
Euler Hermes Rating GmbH, Hamburg
100.0
myHealth X GmbH, Munich
100.0
Aero-Fonte S.r.L., Catania
100.0
AZ Beteiligungs-Management GmbH, Munich
Mondial Kundenservice GmbH, Nuremberg
100.0
100.0
ACRE Hinoki Pte. Ltd., Singapore
100.0
Allianz zweite Objektbeteiligungs-GmbH, Stuttgart
100.0
Münchener & Magdeburger Agrar AG, Munich
100.0
490 Lower Unit LP, Wilmington, DE
100.0
Allianz Pension Consult GmbH, Stuttgart
My Finance Coach Stiftung GmbH, Munich
Non-consolidated affiliates
Signa 12 Verwaltungs GmbH, Stuttgart
AQ Focus Teleport Verwaltungs GmbH, Hamburg
100.0
Allianz Africa Financial Services S.à r.L., Casablanca
48.97
VGP Park München GmbH, Vaterstetten-Baldham
100.0
100.0
Allianz Advisory Pte. Ltd., Singapore
41.87
UGG TopCo/HoldCo General Partner GmbH,
Ismaning
Windpark Berge-Kleeste GmbH & Co. KG,
Sehestedt
100.0
54.0 3
Allianz Actions France, Paris
41.87
65.03
Allianz Actions Euro Convictions, Paris
30.07
44.5 2,3
Allianz Actions Euro, Paris
50.0
95.4 3
Windpark Büttel GmbH & Co. KG, Sehestedt
100.0
Allianz Africa SAS, Paris la Défense
100.0
Allianz Nederland Groep N.V., Rotterdam
Allianz Neo ISR 2019, Senningerberg
100.0
99.9
100.0
Allianz France US REIT LP, Wilmington, DE
Allianz Compañía de Seguros y Reaseguros S.A.,
Madrid
Allianz Alapkezelő Zrt., Budapest
100.0
Allianz Air France IFC, Paris
owned¹
Allianz Actions Emergentes, Paris
owned¹
%
%
%
D_Consolidated Financial Statements
Annual Report 2020 - Allianz Group
172
100.0
Allianz Africa Services SA, Abidjan
100.0
Windpark Calau GmbH & Co. KG, Sehestedt
owned¹
50.0
70.1 3
Allianz Actions Aéquitas, Paris
50.0
AlianzIM U.S. Large Cap Buffer20 Oct ETF,
mbH, Augsburg
97.1
Syncier GmbH, Munich
AVAG Versicherungsvermittlungs-Gesellschaft
100.0
Syncier Consulting GmbH, Unterföhring
72.23
Wilmington, DE
Wilmington, DE
50.0
AQ Überseehaus Verwaltungs GmbH, Hamburg
100.0
Spherion Objekt GmbH & Co. KG, Stuttgart
39.9
AQ Überseehaus GmbH & Co. KG, Hamburg
94.9
Spherion Beteiligungs GmbH & Co. KG, Stuttgart
100.0
AIM Underwriting Limited, Toronto, ON
50.0
AlianzIM U.S. Large Cap Buffer10 Oct ETF,
94.9
85.13
VCIS Germany GmbH, Cologne
78.43
26.2 3,7
NeuConnect Deutschland GmbH, Wilhelmshaven
PNE WIND Infrastruktur Calau II GmbH, Cuxhaven
PNE WIND Park III GmbH & Co. KG, Cuxhaven
SPN Service Partner Netzwerk GmbH, Munich
UGG TopCo GmbH & Co. KG, Ismaning
Windpark Aller-Leine-Tal GmbH & Co. KG,
Sehestedt
49.0
Braunschweig
Volkswagen Autoversicherung Holding GmbH,
100.0
Volkswagen Autoversicherung AG, Braunschweig
100.0
UfS Beteiligungs-GmbH, Munich
VLS Versicherungslogistik GmbH, Berlin
100.0
Vivy GmbH, Berlin
50.0 3
52.0
Allianz 311 S.r.l., Milan
100.0
Allianz (UK) Limited, Guildford
50.0
Dealis Fund Operations GmbH, Frankfurt am Main
Die Brückenköpfe X BKX GmbH & Co. Invest KG,
Berlin
100.0
50.0 2
Allianz Actio France, Paris
Allianz Congo Assurances SA, Brazzaville
100.0
Lola Vermögensverwaltungsgesellschaft mbH &
100.0
Allianz Warranty GmbH, Unterföhring
100.0
Allianz Hirschgarten GmbH & Co. KG, Stuttgart
100.0
mbH, Munich
100.0 3
Allianz VW AV Fonds, Frankfurt am Main
100.0
AZV-Argos 77 Vermögensverwaltungsgesellschaft
Allianz Handwerker Services GmbH, Aschheim
100.0 3
Allianz VSR Fonds, Frankfurt am Main
100.0
Allianz GRGB Fonds, Frankfurt am Main
100.0
mbH, Munich
100.0 3
Allianz V-PD Fonds, Frankfurt am Main
AZV-Argos 72 Vermögensverwaltungsgesellschaft
100.0
Allianz Investment Management SE, Munich
100.0
AZV-Argos 82 Vermögensverwaltungsgesellschaft
mbH, Munich
100.0
ControlExpert GmbH, Langenfeld
100.0
Windpark Dahme GmbH & Co. KG, Sehestedt
94.8
BrahmsQ Objekt GmbH & Co. KG, Stuttgart
11.38
Arabesque S-Ray GmbH, Frankfurt am Main
100.0
Associates
Windpark Cottbuser See GmbH & Co. KG,
Sehestedt
Allianz GLRS Fonds, Frankfurt am Main
100.0
owned¹
owned¹
%
%
%
owned¹
D_Consolidated Financial Statements
171
Annual Report 2020 - Allianz Group
100.0
Allianz X GmbH, Munich
AZV-Argos 87 Vermögensverwaltungsgesellschaft
mbH, Munich
100.0 3
Allianz VKRD Fonds, Frankfurt am Main
100.0
3
100.0
Allianz VAE Fonds, Frankfurt am Main
100.0
Allianz Global Corporate & Specialty SE, Munich
100.0
AZ-SGD Classic Infrastrukturfonds GmbH, Munich
100.0 3
Allianz UGD 1 Fonds, Frankfurt am Main
100.0
AZ-SGD Direkt Infrastruktur GmbH, Munich
KG, Stuttgart
AZRE AZD P&C Master Fund, Munich
100.0
Allianz Treuhand GmbH, Stuttgart
Allianz Focus Teleport Beteiligungs-GmbH & Co.
100.0
AZL-Private Finance GmbH, Stuttgart
100.0
Allianz Technology SE, Munich
100.0
Allianz Finanzbeteiligungs GmbH, Munich
100.0 3
100.0
100.0
100.0
AZT Automotive GmbH, Ismaning
100.0 3
Allianz GLR Fonds, Frankfurt am Main
100.0 3
Allianz VKA Fonds, Frankfurt am Main
100.0
AZ-SGD Private Equity Fonds GmbH, Munich
100.0
100.0 3
Allianz VGL Fonds, Frankfurt am Main
Allianz Global Health GmbH, Munich
100.0
Allianz Global Investors Holdings GmbH, Frankfurt
am Main
3
100.0
Allianz VGI 1 Fonds, Frankfurt am Main
100.0
Allianz Global Investors GmbH, Frankfurt am Main
100.0
AZ-SGD Infrastrukturfonds GmbH, Munich
100.0
Allianz Versicherungs-Aktiengesellschaft, Munich
AZ-SGD Private Equity Fonds 2 GmbH, Munich
Co. KG, Munich
Windpark Dahme Repowering GmbH & Co. KG,
Sehestedt
25.0
100.0
Halle (Saale)
GA Global Automotive Versicherungsservice GmbH,
25.4
Umspannwerk Putlitz GmbH & Co. KG, Oldenburg
100.0
Windpark Quitzow GmbH & Co. KG, Sehestedt
100.0
Verbraucherverträge GmbH, Berlin
25.0
T&R Real Estate GmbH, Bonn
100.0
Windpark Pröttlin GmbH & Co. KG, Sehestedt
finanzen.de Vermittlungsgesellschaft für
25.0
T&R MLP GmbH, Bonn
100.0
Windpark Kleeste Repowering GmbH & Co. KG,
Sehestedt
100.0
finanzen.de Maklerservice GmbH, Berlin
25.0
Windpark Redekin-Genthin GmbH & Co. KG,
Sehestedt
Verimi GmbH, Berlin
19.98
100.0
100.0
1739908 Ontario Ltd., Toronto, ON
100.0
Vertriebsmanagement GmbH, Halle (Saale)
Consolidated affiliates
100.0
FOREIGN ENTITIES
Windpark Werder Zinndorf GmbH & Co. KG,
Sehestedt
KVM ServicePlus - Kunden- und
100.0
SDA SE Open Industry Solutions, Hamburg
Kaiser X Labs GmbH, Munich
Renditefonds, Sehestedt
Windpark Waltersdorf GmbH & Co. KG
100.0
IDS GmbH - Analysis and Reporting Services,
Munich
50.0 8
Windkraft Kirf Infrastruktur GmbH, Neumagen-
Dhron
100.0
Windpark Schönwalde GmbH & Co. KG, Sehestedt
100.0
Iconic Finance GmbH, Munich
100.0
100.0
Euler Hermes Collections GmbH, Potsdam
100.0
Donator Beteiligungsverwaltung GmbH, Munich
DCSO Deutsche Cyber-Sicherheitsorganisation
100.0
Windpark Emmendorf Repowering GmbH & Co.
KG, Sehestedt
100.0
Donator Beratungs GmbH, Munich
25.1
Caldera Service GmbH, Hamburg
100.0
Windpark Emmendorf GmbH & Co. KG, Sehestedt
100.0
100.0
100.0 8
AV Packaging GmbH, Munich
100.0
Windpark Eckolstädt GmbH & Co. KG, Sehestedt
Deutsche Lebensversicherungs-Aktiengesellschaft,
25.0
Autobahn Tank & Rast Management GmbH, Bonn
100.0
ControlExpert Holding GmbH, Langenfeld
100.0
Berlin
Autobahn Tank & Rast Gruppe GmbH & Co. KG,
Bonn
GmbH, Berlin
Driven By GmbH, Munich
28.0
Norsea Gas GmbH, Friedeburg-Etzel
Windpark Kittlitz GmbH & Co. KG, Sehestedt
100.0
Euler Hermes Aktiengesellschaft, Hamburg
100.0
Windpark Kirf GmbH & Co. KG, Sehestedt
25.6
Instamotion Retail GmbH, Grünwald
50.0
25.0
EASTSIDE TAMARA GmbH, Frankfurt am Main
25.0
InnoSolutas GmbH, Bad Friedrichshall
Windpark Kesfeld-Heckhuscheid GmbH & Co. KG,
Sehestedt
50.0 2
40.0
esa EuroShip GmbH & Co. KG Underwriting for
Shipping, Bad Friedrichshall
EASTSIDE Joint Venture GmbH & Co. KG, Frankfurt
am Main
100.0
Windpark Freyenstein-Halenbeck GmbH & Co. KG,
Sehestedt
100.0
100.0
100.0
89.63
99.3
100.0
100.0
Home & Legacy Insurance Services Limited,
Guildford
Multiassistance Luxembourg S.à r.L., Luxembourg
100.0
100.0
Euler Hermes South Express S.A., Brussels
100.0
Multiassistance S.A., Paris
100.0
Humble Bright Limited, Hong Kong
100.0
Euler Hermes Taiwan Services Limited, Taipei
100.0
Hunter Premium Funding Ltd., Sydney
100.0
Multimags - Multiassistência e Gestão de Sinistros,
Multiasistencia S.A., Madrid
Euler Hermes Singapore Services Pte. Ltd.,
Singapore
100.0
Highway Insurance Group Limited, Guildford
Euler Hermes Services UK Limited, London
100.0
Havelaar & van Stolk B.V., Rotterdam
100.0
do Campo
100.0
Euler Hermes Serviços de Gestão de Riscos Ltda.,
São Paulo
Helviass Verzekeringen B.V., Rotterdam
Euler Hermes, Mierzejewska-Kancelaria Prawna
Sp.k, Warsaw
100.0
100.0
100.0
Highway Insurance Company Limited, Guildford
100.0
Morningchapter S.A., Grandaços
100.0
Euler Hermes Sigorta A.S., Istanbul
100.0
Mombyasen Wind Farm AB, Halmstad
Unipessoal Lda., Lisbon
100.0
Hwang Affin Income Fund 5, Kuala Lumpur
100.0
NEXTCARE Claims Management LLC, Dubai
100.0
Fairmead Insurance Limited, Guildford
100.0
FCP Allianz Africa Equity WAEMU, Abidjan
100.0 3
ImWind PDV GmbH & Co. KG, Pottenbrunn
Immovalor Gestion S.A., Paris la Défense
100.0
70.0
ImWind PL GmbH & Co. KG, Pottenbrunn
100.0
FCP LBPAM IDR, Paris
100.0 3
NEXTCARE Egypt LLC, New Cairo
100.0
FCPI InnovAllianz 2, Paris
NEXTCARE Claims Management LLC, Al Khuwair
Mindseg Corretora de Seguros Ltda., São Bernardo
100.0
100.0
100.0 3
100.0
National Surety Corporation, Chicago, IL
100.0
ICON Immobilien GmbH & Co. KG, Vienna
100.0
Eurl 20/22 Le Peletier, Paris la Défense
100.0
B.S.C., Manama
Neoasistencia Manoteras S.L., Madrid
ICON Inter GmbH & Co. KG, Vienna
100.0
Eurosol Invest S.r.l., Udine
100.0
Nextcare Bahrain Ancillary Services Company
Fairmead Distribution Services Limited, Guildford
100.0
IEELV GP S.à r.L., Luxembourg
100.0
100.0 3
100.0
Medicount Healthcare Private Limited, Bangalore
Euler Hermes Services Ireland Limited, Dublin
100.0
100.0
Diamond Point a.s., Prague
100.0
176
Annual Report 2020 - Allianz Group
D_Consolidated Financial Statements
%
%
owned¹
owned¹
%
owned¹
Euler Hermes Services Italia S.r.L., Rome
Allianz Renewable Energy Partners III LP, London
Global Azawaki S.L., Madrid
100.0
100.0
Demand Side Media Ltd., Bristol
CAP Rechtsschutz-Versicherungsgesellschaft AG,
Wallisellen
100.0
Euler Hermes Services Ceská republika s.r.o.,
Darta Saving Life Assurance dac, Dublin
Prague
100.0
100.0
Buddies Enterprises Limited, Guildford
100.0
Calobra Investments Sp. z o.o., Warsaw
LV Assistance Services Limited, Guildford
Deeside Investments Inc., Wilmington, DE
100.0
50.1
100.0
Candid Web Assets Ltd., Bristol
Delta Technical Services Ltd., London
100.0
100.0
Euler Hermes Services India Private Limited,
Mumbai
Euler Hermes Services G.C.C. Limited, Dubai
100.0
Euler Hermes Services North America LLC, Owings
Mills, MD
Global Carena S.L., Madrid
100.0
Medi24 AG, Bern
100.0
Euler Hermes Services Slovensko s.r.o., Bratislava
100.0
Gurtin Fixed Income Management LLC, Dover, DE
100.0
Medicount (Private) Limited, Islamabad
Grupo Multiasistencia S.A., Madrid
100.0
Harro Development Praha s.r.o., Prague
100.0
MediCount Global Ltd., Ebene
71.6
100.0
Euler Hermes Services Tunisia S.à r.l., Tunis
100.0
Hauteville Insurance Company Limited, St Peter
Port
Euler Hermes Services South Africa Ltd.,
Johannesburg
100.0
100.0
100.0
100.0
LV Insurance Management Limited, Guildford
100.0
100.0
Global Transport & Automotive Insurance Solutions
LV Repair Services Limited, Guildford
100.0
Euler Hermes Services Romania S.R.L., Bucharest
Euler Hermes Services Schweiz AG, Wallisellen
100.0
100.0
Maevaara Vind 2 AB, Stockholm
100.0
Euler Hermes Services S.A.S., Paris la Défense
100.0
Great Lake Funding I LP, Wilmington, DE
100.0 3
Maevaara Vind AB, Stockholm
Pty Limited, Sydney
100.0
Inforce Solutions LLC, Woodstock, GA
NEXTCARE Lebanon SAL, Beirut
100.0
Keyeast Pte. Ltd., Singapore
100.0
Foshan Geluo Storage Services Co. Ltd., Foshan
100.0
Kiinteistöosakeyhtiö Eteläesplanadi 2 Oy, Helsinki
Parc Eolien de Fontfroide SAS, Versailles
100.0
100.0
FPCI Allianz Synergies, Paris
100.0 3
KLGCREF II Holdco Pte. Ltd., Singapore
Parc Eolien de Forge SAS, Versailles
100.0
100.0
FPCI APEH Europe VII, Paris
100.0 3
Parc Eolien de Dye SAS, Versailles
100.0 3
100.0
100.0
Parc Eolien de Bruyère Grande SAS, Versailles
100.0
Fireman's Fund Insurance Company Corp., Los
Angeles, CA
100.0
KaiLong Greater China Real Estate Fund II S.C.Sp.,
Luxembourg
Parc Eolien de Chaourse SAS, Versailles
100.0
Parc Eolien de la Sole du Bois SAS, Paris
100.0
100.0
Ken Tame & Associates Pty Ltd., Sydney
Parc Eolien de Chateau Garnier SAS, Versailles
100.0
100.0
Fondo Chiuso Allianz Infrastructure Partners I,
Milan
Kensington Fund, Milan
Parc Eolien de Croquettes SAS, Versailles
Flying Desire Limited, Hong Kong
100.0
Fragonard Assurance S.A., Paris
100.0
Gaipare Action, Paris
100.0
Liverpool Victoria General Insurance Group
Parc Eolien des Barbes d'Or SAS, Versailles
100.0
Limited, Guildford
100.0
Galore Expert Limited, Hong Kong
100.0
100.0
100.0
Liverpool Victoria Insurance Company Limited,
Generation Vie S.A., Courbevoie
52.5
Parc Eolien des Mistandines SAS, Paris
100.0
Guildford
100.0
Parc Eolien des Joyeuses SAS, Versailles
100.0
Parc Eolien de Remigny SAS, Versailles
Lincoln Infrastructure USA Inc., Wilmington, DE
Kohlenberg & Ruppert Premium Properties S.à r.l.,
Luxembourg
100.0
Parc Eolien de Longchamps SAS, Versailles
100.0
Franklin S.C.S., Luxembourg
94.5
Kuolavaara-Keulakkopään Tuulipuisto Oy, Oulu
100.0
100.0
Parc Eolien de Ly-Fontaine SAS, Versailles
Friederike MLP S.à r.l., Luxembourg
100.0
La Rurale SA, Courbevoie
99.9
Parc Eolien de Pliboux SAS, Versailles
100.0
Fu An Management Consulting Co. Ltd., Beijing
1.0
100.0
100.0
Beijing
Corner, NJ
100.0
Northstar Mezzanine Partners VI U.S. Feeder II L.P.,
Ferme Eolienne de Villemur-sur-Tarn S.à r.l.,
Versailles
Investitori Logistic Fund, Milan
100.0
Dover, DE
100.0 3
100.0
Investitori Real Estate Fund, Milan
100.0 3
ÖGIG GmbH, St. Pölten
100.0
Ferme Eolienne des Jaladeaux S.à r.L., Versailles
100.0
Investitori SGR S.p.A., Milan
100.0
ÖGIG Netzbetrieb GmbH, St. Pölten
100.0
nöGIG Phase Zwei GmbH, St. Pölten
Interstate Fire & Casualty Company, Chicago, IL
100.0
100.0
FCT CIMU 92, Pantin
100.0 3
InnovAllianz, Paris
99.6
3
NEXTCARE Tunisie LLC, Tunis
100.0
100.0
FCT Rocade L2 Marseille, Paris
Insurance CJSC "Medexpress", Saint Petersburg
100.0
Niederösterreichische
Fénix Directo Compañía de Seguros y Reaseguros
S.A., Madrid
Intermediass S.r.l., Milan
Glasfaserinfrastrukturgesellschaft mbH, St. Pölten
100.0
100.0
100.0 3
Financière Callisto SAS, Paris la Défense
100.0
Järvsö Sörby Vindkraft AB, Danderyd
100.0
FinOS Technology Vietnam Single-Member Limited
Liability Company, Ho Chi Minh City
Pacific Investment Management Company LLC,
100.0
JSC Insurance Company Allianz, Moscow
100.0
Dover, DE
94.5
Jouttikallio Wind Oy, Kotka
Fireman's Fund Financial Services LLC, Dallas, TX
JUSTIS GmbH, Etoy
100.0
PAF GP S.à r.L., Luxembourg
100.0
Fireman's Fund Indemnity Corporation, Liberty
KAIGO Hi-Tech Development (Beijing) Co. Ltd.,
Parc Eolien de Bonneuil S.à r.l., Versailles
100.0
100.0
100.0
100.0
100.0
100.0
OPCI Allianz France Angel, Paris la Défense
100.0
Finanzen France SAS, Paris
100.0
JCR Intertrade Co. Ltd., Bangkok
40.0 2
Orione PV S.r.l., Milan
Orsa Minore PV S.r.l., Milan
100.0
100.0
Jefferson Insurance Company Corp., New York, NY
100.0
Orsa Maggiore PV S.r.l., Milan
100.0
FinOS Technology Malaysia Sdn. Bhd., Kuala
Lumpur
Joukhaisselän Tuulipuisto Oy, Oulu
100.0
FinOS Technology Holding Pte. Ltd., Singapore
D23E GP LLC, Wilmington, DE
100.0
BSMC (Thailand) Limited, Bangkok
100.0
Euler Hermes Acmar SA, Casablanca
55.0
AWP Ticket Guard Small Amount & Short Term
CEPE de Mont Gimont S.à r.l., Versailles
100.0
Insurance Co. Ltd., Tokyo
100.0
Euler Hermes Acmar Services SARL, Casablanca
100.0
CEPE de Sambres S.à r.l., Versailles
100.0
AWP USA Inc., Richmond, VA
100.0
AZ Euro Investments II S.à r.L., Luxembourg
CEPE de Vieille Carrière S.à r.L., Versailles
100.0
CEPE de Langres Sud S.à r.L., Versailles
100.0
AWP Solutions CR a SR s.r.o., Prague
100.0 3
100.0
AWP Services Singapore Pte. Ltd., Singapore
100.0
CEPE de Haut Chemin S.à r.l., Versailles
100.0
EP Tactical GP LLC, Wilmington, DE
100.0
AWP Servicios Mexico S.A. de C.V., Mexico City
Euler Hermes Asset Management France S.A., Paris
la Défense
100.0
100.0
Etablissements J. Moneger SA, Dakar
100.0
AWP Servis Hizmetleri A.S., Istanbul
97.0
CEPE de la Forterre S.à r.L., Versailles
100.0
Euler Hermes 39 Ouest, Paris la Défense
CEPE de la Baume S.à r.L., Versailles
100.0
100.0
AZ Euro Investments S.A., Luxembourg
CIC Allianz Insurance Ltd., Sydney
100.0
Euler Hermes Collections Sp. z o.o., Warsaw
100.0
100.0
Citizen Capital Impact Initiative, Paris
90.0 3
Euler Hermes Consulting (Shanghai) Co. Ltd.,
AZ Jupiter 8 B.V., Amsterdam
AZ Jupiter 9 B.V., Amsterdam
Shanghai
100.0
Climmolux Holding SA, Luxembourg
100.0
AZ Real Estate GP LLC, New York, NY
100.0
Euler Hermes Crédit France S.A.S., Paris la Défense
100.0
100.0
Eolica Erchie S.r.L., Lecce
100.0
Owings Mills, MD
CEPE des Portes de la Côte d'Or S.à r.l., Versailles
100.0
Euler Hermes Australia Pty Limited, Sydney
100.0
100.0
AZ Jupiter 10 B.V., Amsterdam
CEPE du Blaiseron S.à r.L., Versailles
100.0
100.0
100.0
100.0
AZ Jupiter 11 B.V., Amsterdam
Euler Hermes Canada Services Inc., Montreal, QC
Euler Hermes Collections North America Company,
100.0
97.8
AZ Jupiter 14 B.V., Amsterdam
Chicago Insurance Company Corp., Chicago, IL
100.0
CEPE du Bois de la Serre S.à r.l., Versailles
AZ Servisni centar d.o.o., Zagreb
100.0
100.0
80.0
100.0
Allianz Sigorta A.S., Istanbul
96.2
Allianz ZB d.o.o. Mandatory and Voluntary
AWP Health & Life S.A., Saint-Ouen
100.0
Pension Funds Management Company, Zagreb
51.0
AWP Health & Life Services Limited, Dublin
100.0
Allianz SNA s.a.l., Beirut
Annual Report 2020 - Allianz Group
175
D_Consolidated Financial Statements
%
owned¹
%
Allianz Yasam ve Emeklilik A.S., Istanbul
Allianz Servizi S.p.A., Milan
95.0
AWP France SAS, Saint-Ouen
100.0
Allianz Worldwide Partners (Hong Kong) Ltd.,
AWP Chile Limitada, Santiago
100.0
Allianz Services Mauritius LLC, Ebene
100.0
Hong Kong
100.0
owned¹
AWP Colombia SAS, Bogotá D.C.
Allianz Services Private Ltd., Thiruvananthapuram
100.0
Allianz Serviços e Participações S.A., Rio de Janeiro
100.0
Allianz X Euler Hermes Co-Investments S.à r.l.,
Luxembourg
AWP Contact Center Italia S.r.L., Milan
100.0
100.0
100.0
%
owned¹
AWP RUS LLC, Moscow
100.0
100.0
Centrale Photovoltaique de Saint Marcel sur Aude
SAS, Versailles
100.0
ELVIA elnvest AG, Wallisellen
100.0
AWP Services New Zealand Limited, Auckland
100.0
AWP Services Belgium S.A., Brussels
Centrale Photovoltaique de Valensole SAS,
100.0
Energie Eolienne Lusanger S.à r.L., Versailles
100.0
Versailles
100.0
AWP Services Sdn. Bhd., Kuala Lumpur
Enertrag-Dunowo Sp. z o.o., Szczecin
100.0
AWP Services NL B.V., Amsterdam
CEPE de Bajouve S.à r.l., Versailles
100.0
100.0
Caroline Berlin S.C.S., Luxembourg
93.2
AWP Service Brasil Ltda., São Bernardo do Campo
AWP Services (India) Private Limited, Gurgaon
100.0
Castle Field Limited, Hong Kong
Dresdner Kleinwort Pfandbriefe Investments II Inc.,
Minneapolis, MN
100.0
100.0
Elite Prize Limited, Hong Kong
100.0
EF Solutions LLC, Wilmington, DE
100.0
100.0
Eiger Institutional Fund, Basel
100.0 3
AWP Services (Thailand) Co. Ltd., Bangkok
97.6
Central Shopping Center a.s., Bratislava
CELUHO S.à r.l., Luxembourg
Club Marine Limited, Sydney
100.0
100.0
100.0
ControlExpert Schweiz GmbH, Cham
100.0
Défense
60.0
BPS Mesagne 214 S.r.L., Lecce
100.0
ControlExpert Thailand Co. Ltd., Bangkok
100.0
Euler Hermes Recouvrement France S.A.S., Paris la
Défense
100.0
BPS Mesagne 215 S.r.L., Lecce
100.0
ControlExpert UK Limited, Farnborough
87.0
BPS Mesagne 216 S.r.l., Lecce
100.0
BPS Brindisi 222 S.r.l., Lecce
Euler Hermes Real Estate SPPICAV, Paris la
100.0
ControlExpert Polska Sp. z o.o., Warsaw
90.0
Euler Hermes North America Insurance Company
Inc., Owings Mills, MD
100.0
Borgo San Felice S.r.L., Castelnuovo Berardenga
100.0
ControlExpert Inc., Wilmington, DE
90.0
Corn Investment Ltd., London
Euler Hermes Patrimonia SA, Brussels
BPS Brindisi 211 S.r.l., Lecce
100.0
ControlExpert Japan KK, Tokyo
100.0
Euler Hermes Ré SA, Luxembourg
100.0
BPS Brindisi 213 S.r.l., Lecce
100.0
100.0
100.0
Euler Hermes Reinsurance AG, Wallisellen
100.0
100.0
BRAVO III CIV LLC, Wilmington, DE
CreditRas Assicurazioni S.p.A., Milan
50.0 2
100.0
BRAVO IV CIV LLC, Wilmington, DE
CreditRas Vita S.p.A., Milan
50.0 2
Euler Hermes Service AB, Stockholm
100.0
100.0
100.0
CURATIO DMCC LLC, Dubai
100.0
Brobacken Nät AB, Stockholm
100.0
Euler Hermes Services Bulgaria EOOD, Sofia
100.0
Euler Hermes Services B.V., 's-Hertogenbosch
Euler Hermes Services Belgium S.A., Brussels
Kong
100.0
100.0
BPS Mesagne 223 S.r.l., Lecce
100.0
Corsetec Assessoria e Corretagem de Seguros
Euler Hermes Risk Yönetimi A.S., Istanbul
100.0
Ltda., São Paulo
100.0
BPS Mesagne 224 S.r.l., Lecce
CPRN Thailand Ltd., Bangkok
100.0
100.0
Cova Beijing Zpark Investment Pte. Ltd., Singapore
98.0
Brasil de Imóveis e Participações Ltda., São Paulo
100.0
Euler Hermes Seguros S.A., São Paulo
100.0
BRAVO II CIV LLC, Wilmington, DE
Euler Hermes S.A., Brussels
74.9
BN Infrastruktur GmbH, St. Pölten
ControlExpert Hong Kong Corp. Limited, Hong
100.0
100.0
Consultatio Renta Mixta F.C.I., Buenos Aires
100.0 3
AZGA Service Canada Inc., Kitchener, ON
55.0
Control Expert Gestao Comercio e
Euler Hermes Hong Kong Service Limited, Hong
Kong
Euler Hermes Group SA, Paris la Défense
100.0
100.0
Desenvolvimento Ltda., Jundiaí
95.0
Euler Hermes Intermediary Agency S.r.L., Milan
100.0
AZOA Services Corporation, New York, NY
100.0
Control Expert Italia S.r.L., Venice
AZL PF Investments Inc., Minneapolis, MN
80.0
100.0
AZGA Insurance Agency Canada Ltd., Kitchener,
ON
AZ Vers US Private REIT GP LLC, Wilmington, DE
COF II CIV LLC, Wilmington, DE
100.0
Euler Hermes Digital Ventures OPCVM, Paris la
Défense
100.0 3
100.0
AZ Vers US Private REIT LP, Wilmington, DE
100.0
Bogotá D.C.
Companhia de Seguros Allianz Portugal S.A.,
Lisbon
100.0
64.8
AZ-CR Seed Investor LP, Wilmington, DE
100.0
Euler Hermes Excess North America LLC, Owings
Compañía Colombiana de Servicio Automotriz S.A.,
Mills, MD
100.0
Euler Hermes Emporiki Services Ltd., Athens
Gestion de Téléassistance et de Services S.A.,
Châtillon
Euler Hermes Japan Services Ltd., Tokyo
AZP Malaysia Agency Sdn. Bhd., Kuala Lumpur
100.0
ControlExpert China Co. Ltd., Beijing
30.0 2
Budapest
100.0
Euler Hermes New Zealand Limited, Auckland
100.0
Beykoz Gayrimenkul Yatirim Insaat Turizm Sanayi
ve Ticaret A.S., Ankara
Rotterdam
ControlExpert Colombia SAS, Bogotá D.C.
100.0
ControlExpert Holding B.V., Amsterdam
90.0
Euler Hermes North America Holding Inc., Owings
Mills, MD
100.0
Bilan Services S.N.C., Nanterre
66.0
90.0
100.0
Euler Hermes Magyar Követeleskezelő Kft.,
ControlExpert Chile Spa, Las Condes
100.0
Control Expert Mexico S. de R.L. de C.V., Mexico
City
Euler Hermes Korea Non-life Broker Company
95.0
AZWP Services Portugal Lda., Lisbon
100.0
Limited, Seoul
100.0
95.0
BBVA Allianz Seguros y Reaseguros S.A., Madrid
BCP-AZ Investment L.P., Wilmington, DE
Beleggingsmaatschappij Willemsbruggen B.V.,
Control Expert Systems Technologies S.L., Madrid
94.9
Euler Hermes Luxembourg Holding S.à r.l.,
98.0
ControlExpert Argentina SRL, Buenos Aires
90.0
Luxembourg
100.0
50.0 2
Parc Eolien des Quatre Buissons SAS, Paris
100.0
LLC "Euler Hermes Credit Management", Moscow
100.0
AWP Argentina S.A., Buenos Aires
100.0
Allianz US Private REIT GP LLC, Wilmington, DE
64.3 3
Allianz Sécurité, Paris
100.0
AVS Automotive VersicherungsService GmbH,
Vienna
100.0
Wilmington, DE
87.03
Allianz Secteur Europe Immobilier, Paris
Allianz US Private Credit Solutions GP LLC,
51.0
Company, Riyadh
99.5 3
Avip Top Tempéré, Paris
Allianz Seguros de Vida S.A., Bogotá D.C.
100.0
Allianz US Private REIT LP, Wilmington, DE
100.0
100.0
Allianz Vermogen B.V., Rotterdam
100.0 3
Allianz Selection Alternative, Senningerberg
100.0
AWP Assistance Service España S.A., Madrid
100.0
Allianz Value S.r.l., Milan
100.0
100.0
100.0
AWP Assistance Ireland Limited, Dublin
56.93
Allianz Valeurs Durables, Paris
100.0
Allianz Seguros S.A., São Paulo
100.0
AWP Assistance (India) Private Limited, Gurgaon
Allianz Seguros S.A., Bogotá D.C.
Allianz US Investment LP, Wilmington, DE
Allianz Saudi Fransi Cooperative Insurance
98.43
atpacvc Ltd., London
Allianz Sakura Multifamily Lux GP S.à r.l.,
100.0
100.0
atpacvc LLC, Wilmington, DE
Allianz Underwriters Insurance Company Corp.,
Burbank, CA
100.0
Allianz Sakura Multifamily 2 Pte. Ltd., Singapore
100.0
100.0
Assurances Médicales SA, Metz
100.0
Allianz Ukraine LLC, Kiev
Allianz Sakura Multifamily 1 Pte. Ltd., Singapore
100.0
Associated Indemnity Corporation, Los Angeles, CA
100.0
Allianz Saint Marc CL, Paris
100.0
AWP Assistance UK Ltd., London
Luxembourg
Allianz US Debt Holding S.A., Luxembourg
Avip Top Harmonie, Paris
100.0
Allianz US Investment GP LLC, Wilmington, DE
100.0
Allianz Saúde S.A., São Paulo
99.33
Avip Top Croissance, Paris
100.0 3
100.0
100.0 3
Allianz US Income Growth Advisory Master Fundo
de Investimento Multimercado Investimento no
Exterior, São Paulo
100.0
Allianz SAS S.A.S., Bogotá D.C.
100.0
Allianz Sakura Multifamily Lux SCSp, Luxembourg
100.0 3
Avip Actions 100, Paris
100.0
Avip Actions 60, Paris
100.0
100.0
100.0 3
100.0
SAS Allianz Platine, Paris la Défense
100.0
PIMCO GP XXV LLC, Wilmington, DE
Tihama Investments B.V., Amsterdam
100.0
100.0
PIMCO GP XXVI LLC, Wilmington, DE
SAS Allianz Prony, Paris la Défense
100.0
toconnect GmbH, Lucerne
100.0
100.0
SAS Allianz Rivoli, Paris la Défense
100.0
PIMCO GP XXVII LLC, Wilmington, DE
Top Immo A GmbH & Co. KG, Vienna
Three Pillars Business Solutions Limited, Guildford
100.0
SAS Allianz Logistique, Paris la Défense
100.0
PIMCO GP XXII LLC, Wilmington, DE
SAS 20 pompidou, Paris la Défense
100.0
100.0
The American Insurance Company Corp.,
SAS Allianz Etoile, Paris la Défense
100.0
Cincinnati, OH
100.0
100.0
100.0
SAS Allianz Forum Seine, Paris la Défense
100.0
PIMCO GP XXIV LLC, Wilmington, DE
The MI Group Limited, Guildford
99.4
100.0
PIMCO GP XXIX LLC, Wilmington, DE
PIMCO GP XXIII Ltd., George Town
100.0
PIMCO GP XXVIII LLC, Wilmington, DE
SAS Allianz Serbie, Paris la Défense
Allianz Vorsorgekasse AG, Vienna
83.4
Allianz Sénégal Assurances SA, Dakar
100.0
AWP Austria GmbH, Vienna
100.0 3
Allianz Vie Sub Sovereign Debt FCP, Paris
100.0 3
100.0
Senningerberg
AWP Australia Pty Ltd., Toowong
100.0
Allianz Vie S.A., Paris la Défense
Allianz Selection Small and Midcap Equity,
100.0
AWP Australia Holdings Pty Ltd., Toowong
100.0 3
Allianz Vie EM Debt, Paris
100.0
Allianz Selection Fixed Income, Senningerberg
AWP Brokers & Services Hellas S.A., Athens
Allianz Sénégal Assurances Vie SA, Dakar
100.0
100.0
PIMCO GP XXX LLC, Wilmington, DE
100.0
SAS Angel Shopping Centre, Paris la Défense
90.0
Top Immo Besitzgesellschaft B GmbH & Co. KG,
Vienna
100.0
100.0
Top Versicherungsservice GmbH, Vienna
178
Annual Report 2020 - Allianz Group
Allianz Services (UK) Limited, London
100.0
AWP Business Services Co. Ltd., Beijing
95.03
Allianz Voyager Asia I, Senningerberg
98.5
100.0
Allianz UK Infrastructure Debt GP Limited, London
100.0
100.0
100.0
Allianz Suisse Immobilien AG, Wallisellen
Allianz Renewable Green Infrastructure Fund IV
(Lux) S.A. SICAV-RAIF, Senningerberg
79.53
Wilmington, DE
100.0 3
AllianzIM U.S. Large Cap Buffer10 Jul ETF,
Allianz Structured Alpha US Equity 250,
Senningerberg
100.0
Allianz Renewable Energy Partners VIII Limited,
London
79.53
AllianzIM U.S. Large Cap Buffer10 Apr ETF,
Wilmington, DE
50.0 2,3
100.0
Allianz Strategic Investments S.à r.l., Luxembourg
Allianz Strategy Select 50, Senningerberg
100.0
Allianz Renewable Energy Partners VII LP, London
AllianzIM U.S. Large Cap Buffer20 Apr ETF,
100.0 3
Wilmington, DE
80.23
99.73
Senningerberg
Allianz Renewal Energy Partners Luxembourg V
S.A., Luxembourg
99.6
Allianz-Slovenská poisťovňa a.s., Bratislava
Allianz Sustainable Health Evolution,
99.3
100.0
100.0
100.0
Allianz Suisse Versicherungs-Gesellschaft AG,
Wallisellen
Allianz Renewal Energy Partners Luxembourg IV
S.A., Luxembourg
63.7 3
AllianzIM U.S. Large Cap Buffer20 Jul ETF,
Wilmington, DE
100.0
100.0
Allianz Suisse Lebensversicherungs-Gesellschaft
AG, Wallisellen
Allianz Renewal Energy Partners Luxembourg II
S.A., Luxembourg
Allianz-Slovenská DSS a.s., Bratislava
100.0
AllianzGI USD Infrastructure Debt Fund GP LLC,
Wilmington, DE
100.0 3
Allianz Nigeria Insurance Limited, Lagos
100.0
Allianz Investmentbank Aktiengesellschaft, Vienna
100.0
100.0
Allianz New Zealand Limited, Auckland
Allianz Investment Real Estate Solutions S.à r.l.,
Luxembourg
99.2
Allianz Renewable Energy Partners of America 2
LLC, Wilmington, DE
Allianz Renewable Energy Partners IX Limited,
London
Allianz New Europe Holding GmbH, Vienna
100.0
100.0 3
Allianz Neo Isr 2020, Senningerberg
Allianz Investment Management U.S. LLC, St. Paul,
MN
99.3
Allianz Renewable Energy Partners IV Limited,
London
100.0 3
100.0
Alma S.r.L., Bologna
100.0
Allianz Investments | Luxembourg S.à r.L.,
Luxembourg
Allianz Special Opportunities Alternative Fund,
Milan
100.0
100.0
%
owned¹
owned¹
owned¹
%
%
100.0
D_Consolidated Financial Statements
174
100.0
Allianz of America Inc., Wilmington, DE
100.0
100.0
Allianz Renewable Energy Partners of America
LLC, Wilmington, DE
87.2
Allianz Obligations Internationales, Paris
Annual Report 2020 - Allianz Group
100.0
100.0
Allianz Renewal Energy Partners Luxembourg VI
S.A., Luxembourg
100.0
52.2
Allianz Tiriac Asigurari SA, Bucharest
Allianz Risk Transfer (UK) Limited, London
100.0
AREAP Core 1 GP Pte. Ltd., Singapore
100.0
Allianz Technology SAS, Paris
Arges Investments I N.V., Amsterdam
100.0
57.6
Appia Investments S.r.L., Milan
100.0
100.0
PIMCO COF III Offshore GP Ltd., George Town
Allianz Technology S.p.A., Milan
Allianz Risk Consultants Inc., Los Angeles, CA
100.0
Allianz Risk Transfer (Bermuda) Ltd., Hamilton
APP Broker S.r.l., Trieste
100.0
Allianz Risk Transfer AG, Schaan
Réassurance S.A., Courbevoie
Allianz S.p.A., Milan
100.0
London
Assistance Courtage d'Assurance et de
Allianz UK Infrastructure Debt GP 2 Limited,
100.0
Allianz S.A. de C.V., Mexico City
Allianz Tiriac Pensii Private Societate de
100.0
100.0
Bucharest
100.0
Allianz Risk Transfer Inc., New York, NY
100.0
Arges Investments II N.V., Amsterdam
administrare a fondurilor de pensii private S.A.,
100.0
Asit Services S.R.L., Bucharest
100.0
100.0
Allianz Technology S.L., Barcelona
Allianz Residential Mortgage Company S.A.,
Luxembourg
99.63
APEH Europe VI, Paris
100.0
Allianz Technology (Thailand) Co. Ltd., Bangkok
100.0
100.0
American Automobile Insurance Company Corp.,
Earth City, MO
Allianz Technology AG, Wallisellen
98.93
Allianz Renewal Energy Partners Luxembourg VIII
S.A., Luxembourg
100.0 3
Immobiliare di Tipo Chiuso, Rome
86.83
Altair - Fondo di Investimento Alternativo
99.7
Allianz Taiwan Life Insurance Co. Ltd., Taipei
Allianz Team, Paris
100.0
Allianz Team Formule 1, Paris
100.0
100.0
APK US Investment GP LLC, Wilmington, DE
Allianz Retraite S.A., Paris la Défense
100.0
APKV US Private REIT LP, Wilmington, DE
100.0
Allianz Technology of America Inc., Wilmington, DE
100.0
Allianz Resilient Credit UK GP Limited, London
100.0
100.0
APKV US Private REIT GP LLC, Wilmington, DE
100.0
Allianz Technology International B.V., Amsterdam
100.0
APK US Investment LP, Wilmington, DE
Allianz Resilient Credit Euro Fund GP S.à r.L.,
Senningerberg
100.0
Allianz Technology GmbH, Vienna
100.0
100.0
TFI Allianz Polska S.A., Warsaw
Allianz Renewable Energy Partners V plc., London
Allianz Renewable Energy Partners VI Limited,
London
PIMCO GP XXI-C LLC, Wilmington, DE
100.0
100.0
AllianzGI Core Plus Bond Fund, Boston, MA
93.9 3
AWP Japan Co. Ltd., Tokyo
100.0
Allianz Sociedad Anónima A.S. Agencia de
Seguros, Barcelona
100.0
AllianzGI Preferred Securities and Income Fund,
Boston, MA
AWP MEA Holdings Co. W.L.L., Manama
100.0
55.03
Allianz Sociedade Gestora de Fundos de Pensões
AWP Mexico S.A. de C.V., Mexico City
100.0
S.A., Lisbon
SCI Allianz Messine, Paris la Défense
PIMCO Latin America Administradora de Carteiras
Ltda., Rio de Janeiro
100.0
PIMCO COF II LLC, Wilmington, DE
PIMCO Canada Corp., Toronto, ON
Limited, Shanghai
100.0
SCI Allianz Citylights, Paris la Défense
100.0
100.0
PIMCO Investments LLC, Dover, DE
100.0
88.6
SCI Allianz Immobilier Durable, Paris la Défense
PIMCO Climate Bond Fund, Dublin
60.4
PIMCO Climate Bond Fund, Boston, MA
32.7 2.3
PIMCO Japan Ltd., Road Town
100.0
SCI Allianz Invest Pierre, Paris la Défense
100.0
100.0
AllianzGI Structured Alpha Large Cap Equity 350
AWP P&C S.A., Saint-Ouen
100.0
75.0
PIMCO Europe Ltd., London
100.0
PIMCO Services LLC, Dover, DE
100.0
PIMCO GIS Emerging Markets Opportunities Fund,
SCI Onnaing Escaut Logistics, Paris la Défense
100.0
100.0
PIMCO StocksPLUS AR Fund, Dublin
Dublin
70.0
PIMCO Taiwan Ltd., Taipei
100.0
SCI Pont D'Ain Septembre Logistics, Paris la
Défense
100.0
PIMCO Global Advisors (Ireland) Ltd., Dublin
100.0
88.23
PIMCO Investment Management (Shanghai)
100.0
100.0
GP LLC, Wilmington, DE
100.0
Allianz Société Financière S.à r.L., Luxembourg
100.0
Allianz South America Holding B.V., Amsterdam
100.0
AllianzGI US Private Credit Solutions GP II LLC,
Wilmington, DE
AWP Polska Sp. z o.o., Warsaw
SCI Allianz Value Pierre, Paris la Défense
SCI AVIP SCPI Selection, Paris la Défense
SCI ESQ, Paris la Défense
100.0
AWP Réunion SAS, Saint-Denis
100.0
100.0
PIMCO REALPATH Blend 2060 Fund, Boston, MA
47.3 2,3
PIMCO ESG Income Fund, Boston, MA
34.0 2,3
PIMCO REIT Management LLC, Wilmington, DE
100.0
100.0
100.0
SCI Allianz Arc de Seine, Paris la Défense
LLC "Risk Audit", Moscow
100.0
Annual Report 2020 - Allianz Group
177
D_Consolidated Financial Statements
%
%
%
100.0
owned¹
owned¹
PFP Holdings Inc., Dover, DE
100.0
PIMCO GP XXXI LLC, Wilmington, DE
100.0
PGA Global Services LLC, Dover, DE
100.0
PIMCO GP XXXII LLC, Wilmington, DE
owned¹
100.0
Pet Plan Ltd., Guildford
100.0
100.0
100.0
100.0
Parc Eolien du Bois Guillaume SAS, Paris
100.0
GIE Euler Hermes Facturation France, Paris la
Défense
LLC "IC Euler Hermes Ru", Moscow
100.0
100.0 3
Parc Eolien Les Treize SAS, Paris
100.0
LLC "Medexpress-service", Saint Petersburg
100.0
GIE Euler Hermes SFAC Services, Paris la Défense
Glärnisch Institutional Fund, Basel
100.0
LLC "Progress-Med", Moscow
100.0
PCRED CIV LLC, Wilmington, DE
100.0
PIMCO Global Advisors (Luxembourg) S.A.,
Luxembourg
SAS Chaponnay Mérieux Logistics, Paris la Défense
SAS Madeleine Opéra, Paris la Défense
100.0
100.0
PIMCO Australia Pty Ltd., Sydney
100.0
PIMCO GP XXXVI LLC, Wilmington, DE
Saudi NEXTCARE LLC, Al Khobar
68.0
100.0
PIMCO BRAVO III Offshore GP LP., George Town
PIMCO BRAVO III Offshore GP Ltd., George Town
PIMCO BRAVO IV Offshore GP Ltd., George Town
100.0
100.0
SC Tour Michelet, Paris la Défense
100.0
100.0
SCI 46 Desmoulins, Paris la Défense
100.0
100.0
PIMCO GP XXXVIII LLC, Wilmington, DE
100.0
PIMCO GP XXXVII LLC, Wilmington, DE
100.0
Sättravallen Wind Power AB, Strömstad
100.0
PIMCO (Schweiz) GmbH, Zurich
100.0
PIMCO GP XXXIII LLC, Wilmington, DE
100.0
SAS Passage des princes, Paris la Défense
100.0
PIMCO Asia Ltd., Hong Kong
100.0
PIMCO GP XXXV LLC, Wilmington, DE
PIMCO GP XXXIV LLC, Wilmington, DE
SAS Société d'Exploitation du Parc Eolien de
PIMCO Asia Pte Ltd., Singapore
100.0
PIMCO GP XXXIX LLC, Wilmington, DE
Nélausa, Versailles
100.0
100.0
PIMCO Australia Management Limited, Sydney
100.0
POD Allianz Bulgaria AD, Sofia
100.0
100.0
100.0
Real Faubourg Haussmann SAS, Paris la Défense
100.0
SOFE Two Co. Ltd., Bangkok
100.0
Real FR Haussmann SAS, Paris la Défense
100.0
PIMCO GP XIX LLC, Wilmington, DE
100.0
Sofiholding S.A., Brussels
100.0
PIMCO GP XL LLC, Wilmington, DE
100.0
Redoma 2 S.A., Luxembourg
100.0
South City Office Broodthaers SA, Brussels
100.0
PIMCO GP XIV LLC, Wilmington, DE
100.0
SOFE One Co. Ltd., Bangkok
100.0
100.0
Société Européenne de Protection et de Services
d'Assistance à Domicile S.A., Paris
56.0
PIMCO GP XI LLC, Wilmington, DE
100.0
RAS Antares, Milan
100.0 3
Société Foncière Européenne B.V., Amsterdam
PIMCO GP XLI LLC, Wilmington, DE
100.0
100.0
PIMCO GP XII LLC, Wilmington, DE
100.0
Société Nationale Foncière S.A.L., Beirut
66.0
PIMCO GP XIII LLC, Wilmington, DE
RE-AA SA, Abidjan
100.0
RB Fiduciaria S.p.A., Milan
Redoma S.à r.l., Luxembourg
100.0
100.0
PIMCO GP XVII LLC, Wilmington, DE
100.0
Syncier Consulting GmbH, Vienna
100.0
PIMCO GP XVIII LLC, Wilmington, DE
SA Vignobles de Larose, Saint-Laurent-Médoc
100.0
100.0
100.0
100.0
100.0
Saarenkylä Tuulipuisto Oy, Oulu
100.0
Téléservices et Sécurité S.à r.l., Châtillon
99.9
Säntis Umbrella Fund, Zurich
65.9
100.0 3
PIMCO GP XX LLC, Wilmington, DE
Questar Capital Corporation, Minneapolis, MN
SA Carène Assurance, Paris
StocksPLUS Management Inc., Dover, DE
SpaceCo S.A., Paris
100.0
PIMCO GP XLIV LLC, Wilmington, DE
Rivage Richelieu 1 FCP, Paris
100.03
100.0
Stam Fem Gångaren 11 AB, Stockholm
100.0
100.0
PIMCO GP XV LLC, Wilmington, DE
Rogge Selective Global High Yield Bond, Istanbul
33.0 2,3
Starterslening.nl B.V., Amsterdam
60.0
PIMCO GP XVI LLC, Wilmington, DE
100.0
Rokko Development Praha s.r.o., Prague
100.0
100.0
100.0
Taone SAS, Paris la Défense
100.0
Protexia France S.A., Paris la Défense
100.0
PIMCO Global Holdings LLC, Dover, DE
100.0
SIFCOM Assur S.A., Abidjan
60.0
PSS Allianz Protect 85 I, Senningerberg
100.0 3
100.0
PIMCO GP I Canada Corporation, Toronto, ON
Sigma Reparaciones S.L., Madrid
100.0
PT Asuransi Allianz Life Indonesia, Jakarta
99.8
PIMCO GP I LLC, Wilmington, DE
100.0
Silex Gas Norway AS, Oslo
100.0
100.0
PIMCO GP II S.à r.L., Luxembourg
Sicredi - Fundo de Investimento Sulamérica Renda
Fixa Crédito Privado, Porto Alegre
100.0
SCI Réau Papin Logistics, Paris la Défense
SCI Stratus, Courbevoie
PIMCO GP X LLC, Wilmington, DE
Primacy Underwriting Management Limited,
100.0
100.0
PIMCO Global Advisors (Resources) LLC, Dover, DE
Wellington
100.0
43.1 2,3
SCI Via Pierre 1, Paris la Défense
PIMCO Global Advisors LLC, Dover, DE
100.0
Primacy Underwriting Management Pty Ltd.,
Melbourne
Servicios Compartidos Multiasistencia S.L., Madrid
100.0
100.0
PIMCO Global Financials Credit FIC FIM IE, Rio de
Janeiro
Promultitravaux SAS, Paris
100.0
PT Asuransi Allianz Utama Indonesia, Jakarta
100.0
100.0
Moulaine SAS, Versailles
100.0
100.0
PIMCO GP V LLC, Wilmington, DE
Quality 1 AG, Bubikon
100.0
Société d'Energie Eolien Cambon SAS, Versailles
100.0
94.0
100.0
Questar Agency Inc., Minneapolis, MN
100.0
100.0
100.0
Questar Asset Management Inc., Ann Arbor, MI
PIMCO GP VII LLC, Wilmington, DE
97.8
100.0
PIMCO GP V S.à r.l., Luxembourg
Q207 S.C.S., Luxembourg
Société d'Exploitation du Parc Eolien d'Aussac
Vadalle SAS, Paris
Société de Production D'électricité D'harcourt
PT Blue Dot Services, Jakarta
PIMCO GP S.à r.L., Luxembourg
100.0
100.0
SLC "Allianz Life Ukraine", Kiev
100.0
PTE Allianz Polska S.A., Warsaw
100.0
PIMCO GP III LLC, Wilmington, DE
PIMCO GP IV S.à r.L., Luxembourg
100.0
PIMCO GP IX LLC, Wilmington, DE
Sirius S.A., Luxembourg
100.0
94.8
100.0
100.0
Società Agricola San Felice S.p.A., Milan
Q 207 GP S.à r.L., Luxembourg
9.2 8
Tikehau Real Estate III SPPICAV, Paris
12.28
Carlyle China Rome Logistics L.P., George Town
38.33
OeKB EH Beteiligungs- und Management AG,
Vienna
CBRE Dutch Office Fund, Schiphol
26.0
Chicago Parking Meters LLC, Wilmington, DE
32.23
PIMCO Corporate Opportunities Fund III Lux
Feeder SCSp, Luxembourg
UK Outlet Mall Partnership LP, Edinburgh
Wildlife Works Carbon LLC, San Francisco, CA
19.5 8
20.0
49.0
49.9
New Try Limited, Hong Kong
50.0 3,8
Summer Blaze Limited, Hong Kong
16.4 8
CPIC Allianz Health Insurance Co. Ltd., Shanghai
30.0
New Path S.A., Buenos Aires
40.0
Brunei National Insurance Company Berhad Ltd.,
Supreme Cosmo Limited, Hong Kong
16.4 8
Bandar Seri Begawan
25.0
16.48
Sure Rainbow Limited, Hong Kong
16.4 8
Carlyle China Realty L.P., George Town
Ocean Properties LLP, Singapore
22.9
16.4
Data Quest SAL, Beirut
Prime Space Limited, Hong Kong
16.48
European Outlet Mall Fund FCP-FIS, Luxembourg
Four Oaks Place LP, Wilmington, DE
25.9 3
Professional Agencies Reinsurance Limited,
Hamilton
16.1 8
4_Releasing impact according to § 264 (3) HGB through the Allianz Group's
consolidated financial statements.
5_Group share through indirect holder Roland Holding GmbH, Munich: 75.6%.
6_Insolvent.
7_Classified as joint venture according to IFRS 11.
49.0
Quadgas Holdings Topco Limited, Saint Helier
13.08
8 Classified as associate according to IAS 28.
27.3
France Investissement Relance 2020, Paris
30.7 3
ERES APAC II (GP) S.à r.L., Luxembourg
8
Praise Creator Limited, Hong Kong
36.0
Feeder L.P., Wilmington, DE
0.8
3,8
1_Percentage includes equity participations held by dependent entities in full,
even if the Allianz Group's share in the dependent entity is below 100%.
2_Classified as affiliate according to IFRS 10.
Delgaz Grid S.A., Târgu Mures
30.0
PIMCO Corporate Opportunities Fund III Onshore
PIMCO ILS Fund SP I, George Town
3_Investment fund.
Delong Limited, Hong Kong
16.4 8
PIMCO ILS Fund SP II, George Town
19.9 3,8
Douglas Emmett Partnership X LP, Wilmington, DE
28.1
19.4 3,8
MTech Capital Fund (EU) SCSp, Luxembourg
Scape Investment Trust No. 2, Sydney
49.0
%
owned¹
%
owned¹
%
owned¹
Bajaj Allianz General Insurance Company Ltd.,
Pune
IndInfravit Trust, Chennai
22.7
26.0
Jumble Succeed Limited, Hong Kong
16.4 8
Scape Investment Operating Company No. 2 Pty
Ltd., Sydney
Bajaj Allianz Life Insurance Company Ltd., Pune
Bazalgette Equity Ltd., London
26.0
Lennar Multifamily Venture LP, Wilmington, DE
11.3 8
D_Consolidated Financial Statements
179
Annual Report 2020 - Allianz Group
50.0
74.4 3,8
20.0
Allianz Northern Ireland Limited, Belfast
100.0
NET4GAS Holdings s.r.o., Prague
50.0
Autoelektro tehnicki pregledi d.o.o., Vojnić
50.0 8
50.0 3,8
49.0
100.0
NeuConnect Britain Ltd., London
26.23,7
AWP Insurance Brokerage (Beijing) Co. Ltd., Beijing
100.0 8
100.0
NRF (Finland) AB, Västeras
Assurance France Aviation S.A., Paris
COGAR S.à r.L., Paris
Broker on-line de Productores de Seguros S.A.,
Buenos Aires
34.3
Beacon Platform Incorporated, Wilmington, DE
49.0
Best Regain Limited, Hong Kong
16.4 8
MFM Holding Ltd., London
37.3
SNC Alta CRP La Valette, Paris
49.0
Blue Vista Student Housing Select Strategies Fund
L.P., Dover, DE
Milvik AB, Stockholm
34.8
24.9
Modern Diamond Limited, Hong Kong
SNC Société d'aménagement de la Gare de l'Est,
16.48
Paris
SNC Alta CRP Gennevilliers, Paris
25.0
Medgulf Takaful B.S.C.(c), Manama
20.0
16.4 8
SCI Bercy Village, Paris
49.0
26.9
Long Coast Limited, Hong Kong
16.4 8
Sierra European Retail Real Estate Assets Holdings
Link (LRM) Limited, Hong Kong
Berkshire Hathaway Services India Private Limited,
New Delhi
25.0
20.0
Luxury Gain Limited, Hong Kong
16.48
Sino Phil Limited, Hong Kong
16.4 8
Berkshire India Private Limited, New Delhi
B.V., Amsterdam
Global Stream Limited, Hong Kong
Annual Report 2020 - Allianz Group
Redwood Japan Logistics Fund II LP, Singapore
Residenze CYL S.p.A., Milan
The executive directors are responsible for the preparation of the
consolidated financial statements that comply, in all material respects,
with IFRSS as adopted by the EU and the additional requirements of
German commercial law pursuant to § 315e Abs. 1 HGB and that the
consolidated financial statements, in compliance with these require-
ments, give a true and fair view of the assets, liabilities, financial posi-
tion, and financial performance of the Group. In addition, the executive
directors are responsible for such internal control as they have deter-
mined necessary to enable the preparation of consolidated financial
statements that are free from material misstatement, whether due to
fraud or error.
In preparing the consolidated financial statements, the executive
directors are responsible for assessing the Group's ability to continue
as a going concern. They also have the responsibility for disclosing, as
applicable, matters related to going concern. In addition, they are re-
sponsible for financial reporting based on the going concern basis of
accounting unless there is an intention to liquidate the Group or to
cease operations, or there is no realistic alternative but to do so.
Furthermore, the executive directors are responsible for the prep-
aration of the group management report that, as a whole, provides an
appropriate view of the Group's position and is, in all material respects,
consistent with the consolidated financial statements, complies with
German legal requirements, and appropriately presents the opportu-
nities and risks of future development. In addition, the executive direc-
tors are responsible for such arrangements and measures (systems) as
they have considered necessary to enable the preparation of a group
management report that is in accordance with the applicable German
legal requirements, and to be able to provide sufficient appropriate
evidence for the assertions in the group management report.
The supervisory board is responsible for overseeing the Group's
financial reporting process for the preparation of the consolidated fi-
nancial statements and of the group management report.
AUDITOR'S RESPONSIBILITIES FOR THE AUDIT OF THE
CONSOLIDATED FINANCIAL STATEMENTS AND OF THE
GROUP MANAGEMENT REPORT
Our objectives are to obtain reasonable assurance about whether the
consolidated financial statements as a whole are free from material
misstatement, whether due to fraud or error, and whether the group
management report as a whole provides an appropriate view of the
Group's position and, in all material respects, is consistent with the con-
solidated financial statements and the knowledge obtained in the au-
dit, complies with the German legal requirements and appropriately
presents the opportunities and risks of future development, as well as
Annual Report 2020 - Allianz Group
185
E_Further Information
to issue an auditor's report that includes our audit opinions on the con-
solidated financial statements and on the group management report.
Reasonable assurance is a high level of assurance, but is not a
guarantee that an audit conducted in accordance with § 317 HGB and
the EU Audit Regulation and in compliance with German Generally Ac-
cepted Standards for Financial Statement Audits promulgated by the
Institut der Wirtschaftsprüfer (IDW) will always detect a material mis-
statement. Misstatements can arise from fraud or error and are con-
sidered material if, individually or in the aggregate, they could reason-
ably be expected to influence the economic decisions of users taken
on the basis of these consolidated financial statements and this group
management report.
We exercise professional judgment and maintain professional skepti-
cism throughout the audit. We also:
Identify and assess the risks of material misstatement of the con-
solidated financial statements and of the group management re-
port, whether due to fraud or error, design and perform audit pro-
cedures responsive to those risks, and obtain audit evidence that is
sufficient and appropriate to provide a basis for our audit opinions.
The risk of not detecting a material misstatement resulting from
fraud is higher than for one resulting from error, as fraud may in-
volve collusion, forgery, intentional omissions, misrepresentations,
or the override of internal controls.
Obtain an understanding of internal control relevant to the audit
of the consolidated financial statements and of arrangements and
measures (systems) relevant to the audit of the group manage-
ment report in order to design audit procedures that are appropri-
ate in the circumstances, but not for the purpose of expressing an
audit opinion on the effectiveness of these systems.
Evaluate the appropriateness of accounting policies used by the
executive directors and the reasonableness of estimates made by
the executive directors and related disclosures.
RESPONSIBILITIES OF THE EXECUTIVE DIRECTORS AND
THE SUPERVISORY BOARD FOR THE CONSOLIDATED
FINANCIAL STATEMENTS AND THE GROUP
MANAGEMENT REPORT
otherwise appears to be materially misstated.
is materially inconsistent with the consolidated financial state-
ments, with the group management report or our knowledge ob-
tained in the audit, or
In connection with our audit, our responsibility is to read the other in-
formation and, in so doing, to consider whether the other information
Reserves for loss and loss adjustment expenses in property-
casualty insurance represent the Company's expectations regard-
ing future payments for known and unknown claims including as-
sociated expenses. This also includes the expected effects of the
ongoing COVID-19 pandemic on the recognition of the claims pro-
visions of the affected lines of business. The Company uses various
methods to estimate these obligations. Furthermore, the measure-
ment of these provisions requires a significant degree of judgment
by the executive directors of the Company regarding the assump-
tions made, such as inflation, loss developments and regulatory
changes. In particular, the lines of products with low loss frequency,
high individual losses or long claims settlement periods are usually
subject to increased estimation uncertainties.
Due to the material significance of these provisions for the
assets, liabilities and financial performance of the Group as well as
the considerable scope for judgment on the part of the executive
directors and the associated uncertainties in the estimations
made, the measurement of the technical provisions in property-
casualty insurance was of particular significance to our audit.
②As part of our audit, we evaluated the appropriateness of selected
controls established by the Company for the purpose of selecting
actuarial methods, determining assumptions and making
184
Assurcard N.V., Haasrode
E Further Information
estimates for the measurement of certain technical provisions in
property-casualty insurance.
Conclude on the appropriateness of the executive directors' use of
the going concern basis of accounting and, based on the audit ev-
idence obtained, whether a material uncertainty exists related to
events or conditions that may cast significant doubt on the Group's
ability to continue as a going concern. If we conclude that a mate-
rial uncertainty exists, we are required to draw attention in the au-
ditor's report to the related disclosures in the consolidated finan-
cial statements and in the group management report or, if such
disclosures are inadequate, to modify our respective audit opin-
ions. Our conclusions are based on the audit evidence obtained up
to the date of our auditor's report. However, future events or con-
ditions may cause the Group to cease to be able to continue as a
going concern.
With the support of our property-casualty insurance valua-
tion specialists, we have compared the respective actuarial meth-
ods applied and the material assumptions with generally recog-
nized actuarial methods and industry standards and examined to
what extent these are appropriate for the valuation. Our audit also
included an evaluation of the plausibility and integrity of the data
and assumptions used in the valuation and a reconstruction of the
claims settlement processes. In this connection, we also evaluated
the assessment of the executive directors regarding the effects of
the COVID-19 pandemic on the affected lines of business. Further-
more, we recalculated the amount of the provisions for selected
lines of products, in particular lines of products with large reserves
or increased estimation uncertainties. For these lines of products
we compared the recalculated provisions with the provisions cal-
culated by the Company and evaluated any differences. We also
examined whether any adjustments to estimates in loss reserves at
Group level were adequately documented and substantiated. Our
audit also included an evaluation of the Group's Actuarial depart-
ment's reporting to the Group Reserve Committee.
③ The Company's disclosures on the measurement of the provisions
for claims outstanding in property-casualty insurance are included
in section 2 of the notes to the consolidated financial statements.
OTHER INFORMATION
The executive directors are responsible for the other information. The
other information comprises the following non-audited parts of the
group management report:
the statement on corporate governance pursuant to § 289f HGB
and § 315d HGB included in section "Other Parts of the Group
Management Report" of the group management report
the separate non-financial report pursuant to § 289b Abs. 3 HGB
and § 315b Abs. 3 HGB
The other information comprises further the remaining parts of the
group annual report - excluding cross-references to external infor-
mation with the exception of the audited consolidated financial
statements, the audited group management report and our auditor's
report.
Our audit opinions on the consolidated financial statements and
on the group management report do not cover the other information,
and consequently we do not express an audit opinion or any other
form of assurance conclusion thereon.
Based on our audit procedures, we were able to satisfy our-
selves that the estimates and assumptions made by the executive
directors are appropriate overall for measuring the technical pro-
visions in property-casualty insurance.
① In the consolidated financial statements of the Company, tech-
nical provisions (so called "claims provisions") amounting to
€ 80,897 million (7.6% of consolidated total assets) are reported
under the "Reserves for loss and loss adjustment expenses" bal-
ance sheet item. Of this amount, € 68,171 million is attributable to
the Property-Casualty Insurance business segment.
Evaluate the overall presentation, structure and content of the
consolidated financial statements, including the disclosures, and
whether the consolidated financial statements present the under-
lying transactions and events in a manner that the consolidated
financial statements give a true and fair view of the assets, liabili-
ties, financial position and financial performance of the Group in
compliance with IFRSS as adopted by the EU and the additional
Obtain sufficient appropriate audit evidence regarding the finan-
cial information of the entities or business activities within the
Group to express audit opinions on the consolidated financial
statements and on the group management report. We are respon-
sible for the direction, supervision and performance of the group
audit. We remain solely responsible for our audit opinions.
Evaluate the consistency of the group management report with
the consolidated financial statements, its conformity with German
law, and the view of the Group's position it provides.
Perform audit procedures on the prospective information pre-
sented by the executive directors in the group management re-
port. On the basis of sufficient appropriate audit evidence we eval-
uate, in particular, the significant assumptions used by the execu-
tive directors as a basis for the prospective information, and eval-
uate the proper derivation of the prospective information from
these assumptions. We do not express a separate audit opinion on
the prospective information and on the assumptions used as a ba-
sis. There is a substantial unavoidable risk that future events will
differ materially from the prospective information.
Evaluate whether the ESEF documents enables a XHTML repro-
duction with content equivalent to the audited consolidated finan-
cial statements and to the audited group management report.
Evaluate whether the tagging of the ESEF documents with Inline
XBRL technology (iXBRL) enables an appropriate and complete
machine-readable XBRL copy of the XHTML reproduction.
Annual Report 2020 - Allianz Group
187
E_Further Information
FURTHER INFORMATION PURSUANT TO ARTICLE 10
OF THE EU AUDIT REGULATION
We were elected as group auditor by the supervisory board on
5 March 2020. We were engaged by the supervisory board on 11 May
2020. We have been the group auditor of the Allianz SE, Munich, with-
out interruption since the financial year 2018.
We declare that the audit opinions expressed in this auditor's re-
port are consistent with the additional report to the audit committee
pursuant to Article 11 of the EU Audit Regulation (long-form audit re-
port).
GERMAN PUBLIC AUDITOR RESPONSIBLE FOR THE
ENGAGEMENT
The German Public Auditor responsible for the engagement is Richard
Burger.
Munich, 22 February 2021
PricewaterhouseCoopers GmbH
Wirtschaftsprüfungsgesellschaft
Richard Burger
Wirtschaftsprüfer
(German Public Auditor)
Clemens Koch
Wirtschaftsprüfer
(German Public Auditor)
Evaluate the technical validity of the ESEF documents, i.e., whether
the electronic file containing the ESEF documents meets the re-
quirements of the Delegated Regulation (EU) 2019/815 in the ver-
sion applicable as at the balance sheet date on the technical spec-
ification for this electronic file.
Identify and assess the risks of material non-compliance with the
requirements of § 328 Abs. 1 HGB, whether due to fraud or error,
design and perform assurance procedures responsive to those
risks, and obtain assurance evidence that is sufficient and appro-
priate to provide a basis for our assurance conclusion.
Obtain an understanding of internal control relevant to the assur-
ance engagement on the ESEF documents in order to design as-
surance procedures that are appropriate in the circumstances, but
not for the purpose of expressing an assurance conclusion on the
effectiveness of these controls.
GROUP AUDITOR'S RESPONSIBILITIES FOR THE
ASSURANCE ENGAGEMENT ON THE ESEF DOCUMENTS
Our objective is to obtain reasonable assurance about whether the
ESEF documents are free from material non-compliance with the re-
quirements of § 328 Abs. 1 HGB, whether due to fraud or error. We ex-
ercise professional judgment and maintain professional skepticism
throughout the assurance engagement. We also:
The supervisory board is responsible for overseeing the prepara-
tion of the ESEF documents as part of the financial reporting process.
We communicate with those charged with governance regarding,
among other matters, the planned scope and timing of the audit and
significant audit findings, including any significant deficiencies in inter-
nal control that we identify during our audit.
We also provide those charged with governance with a statement
that we have complied with the relevant independence requirements,
and communicate with them all relationships and other matters that
may reasonably be thought to bear on our independence, and where
applicable, the related safeguards.
From the matters communicated with those charged with govern-
ance, we determine those matters that were of most significance in the
audit of the consolidated financial statements of the current period
and are therefore the key audit matters. We describe these matters in
our auditor's report unless law or regulation precludes public disclo-
sure about the matter.
186
Annual Report 2020 - Allianz Group
E Further Information
Other legal and regulatory requirements
requirements of German commercial law pursuant to § 315e
Abs. 1 HGB.
Assurance Report in Accordance with § 317 Abs. 3b
HGB on the Electronic Reproduction of the
Consolidated Financial Statements and the
Group Management Report Prepared for
Publication Purposes
We have performed an assurance engagement in accordance with
§ 317 Abs. 3b HGB to obtain reasonable assurance about whether the
reproduction of the consolidated financial statements and the group
management report (hereinafter the "ESEF documents") contained in
the attached electronic file Allianz SE_KA+KLB_ESEF-2021-02-22.zip
and prepared for publication purposes complies in all material re-
spects with the requirements of § 328 Abs. 1 HGB for the electronic re-
porting format ("ESEF format"). In accordance with German legal re-
quirements, this assurance engagement only extends to the conversion
of the information contained in the consolidated financial statements
and the group management report into the ESEF format and therefore
relates neither to the information contained within this reproduction
nor to any other information contained in the above-mentioned elec-
tronic file.
In our opinion, the reproduction of the consolidated financial
statements and the group management report contained in the
above-mentioned attached electronic file and prepared for publica-
tion purposes complies in all material respects with the requirements
of § 328 Abs. 1 HGB for the electronic reporting format. We do not ex-
press any opinion on the information contained in this reproduction nor
on any other information contained in the above-mentioned electronic
file beyond this reasonable assurance conclusion and our audit opin-
ion on the accompanying consolidated financial statements and the
accompanying group management report for the financial year from
1 January to 31 December 2020 contained in the "Report on the Audit
of the Consolidated Financial Statements and on the Group Manage-
ment Report" above.
BASIS FOR THE REASONABLE ASSURANCE CONCLUSION
We conducted our assurance engagement on the reproduction of the
consolidated financial statements and the group management report
contained in the above-mentioned attached electronic file in accord-
ance with § 317 Abs. 3b HGB and the Exposure Draft of IDW Assurance
Standard: Assurance in Accordance with § 317 Abs. 3b HGB on the
Electronic Reproduction of Financial Statements and Management
Reports Prepared for Publication Purposes (ED IDW ASS 410) and the
International Standard on Assurance Engagements 3000 (Revised).
Accordingly, our responsibilities are further described below in the
"Group Auditor's Responsibilities for the Assurance Engagement on the
ESEF Documents" section. Our audit firm has applied the IDW
Standard on Quality Management: Requirements for Quality Man-
agement in the Audit Firm (IDW QS 1).
RESPONSIBILITIES OF THE EXECUTIVE DIRECTORS AND
THE SUPERVISORY BOARD FOR THE ESEF DOCUMENTS
The executive directors of the Company are responsible for the prepa-
ration of the ESEF documents including the electronic reproduction of
the consolidated financial statements and the group management re-
port in accordance with § 328 Abs. 1 Satz 4 Nr. 1 HGB and for the tag-
ging of the consolidated financial statements in accordance with § 328
Abs. 1 Satz 4 Nr. 2 HGB.
In addition, the executive directors of the Company are responsi-
ble for such internal control as they have considered necessary to en-
able the preparation of ESEF documents that are free from material
non-compliance with the requirements of § 328 Abs. 1 HGB for the
electronic reporting format, whether due to fraud or error.
The executive directors of the Company are also responsible for
the submission of the ESEF documents together with the auditor's re-
port and the attached audited consolidated financial statements and
audited group management report as well as other documents to be
published to the operator of the German Federal Gazette [Bundesan-
zeiger].
REASONABLE ASSURANCE CONCLUSION
16.48
2 Measurement of certain technical provisions in property-casualty
insurance
Based on our audit procedures, we were able to satisfy our-
selves that the methods and assumptions used by the executive di-
rectors are appropriate overall for measuring certain technical as-
sets and liabilities as well as the financial liabilities carried at fair
value (Level 3).
Allianz SE
The Board of Management
Qains Béla Serpico Ballinst
Oliver Bäte
the
Jacqueline Hunt
Sergio Balbinot
B. Kamila fille
Dr. Barbara Karuth-Zelle
Men - Ack
Dr. Klaus-Peter Röhler
Suiko Zazonial
Giulio Terzariol
вид
Christopher Townsend
Munich, 16 February 2021
To the best of our knowledge, and in accordance with the applicable
reporting principles, the consolidated financial statements give a true
and fair view of the assets, liabilities, financial position and profit or loss
of the group, and the group management report includes a fair review
of the development and performance of the business and the position
of the group, together with a description of the material opportunities
and risks associated with the expected development of the group.
RESPONSIBILITY STATEMENT
E_Further Information
38.3 3
33.3
Glory Basic Limited, Hong Kong
16.4 8
Helios Silesia Holding B.V., Amsterdam
45.0
Saint-Barth Assurances S.à r.l., Saint Barthelemy
SAS Alta Gramont, Paris
Iván de la Sota
33.0
The Allianz Group refrains from disclosure of participations which are
not included in one of the above categories, as they are of minor im-
portance for giving a true and fair view of the assets, liabilities, financial
position, and profit or loss of the Allianz Group.
180
Annual Report 2020 - Allianz Group
FURTHER INFORMATION
E
Annual Report 2020- Allianz Group
181
49.0
③ The Company's disclosures on the measurement of certain tech-
nical assets and liabilities as well as the measurement of certain
financial liabilities carried at fair value (Level 3) in life and health
insurance are included in sections 2 and 16 and sections 2 and 35,
respectively, of the notes to the consolidated financial statements.
Sty
R. Wagner
Our presentation of these key audit matters has been structured in
each case as follows:
(1) Matter and issue
2 Audit approach and findings
③ Reference to further information
Hereinafter we present the key audit matters:
Annual Report 2020 - Allianz Group
183
E_Further Information
1 Measurement of certain technical assets and liabilities as well as
certain financial liabilities carried at fair value (Level 3) in life and
health insurance
①⑪ In the consolidated financial statements of the Company, assets
and liabilities of the Life and Health Insurance business segment
amounting to € 16,953 million and € 596,074 million (1.6% or
56.2% of consolidated total assets) are reported under the "De-
ferred acquisition costs" and "Reserves for insurance and invest-
ment contracts" balance sheet items, respectively. Furthermore, fi-
nancial liabilities from the life and health insurance segment
amounting to € 13,606 million (1.3 % of consolidated total assets)
are reported that are classified as Level 3 of the fair value hierar-
chy according to the requirements of IFRS 13.
These technical assets and liabilities are measured using
complex actuarial methods and models based on a comprehen-
sive process for arriving at assumptions about future develop-
ments relating to the insurance portfolios to be measured. The
methods used and the actuarial assumptions determined in con-
nection with interest rates, investment yields, mortality, invalidity,
longevity, costs and future behavior of policyholders could materi-
ally affect the measurement of these technical assets and liabili-
ties.
The financial liabilities concerned mainly include derivative
financial instruments resulting from insurance contracts and are
assigned to Level 3 of the fair value hierarchy as for the measure-
ment in the underlying valuation models sufficient observable
market data was not available and therefore significant unobserv-
able inputs had to be used instead. These inputs may include data
derived from approximations using, inter alia, historical data. In
this context, the derivative financial instruments resulting from in-
surance contracts are subject to an increased valuation risk due to
lower objectivity and the underlying assumptions and estimates of
the executive directors.
Against this background and due to the material signifi-
cance of the amounts for the assets, liabilities and financial perfor-
mance of the Group and the complex process for determining the
underlying assumptions and estimates of the executive directors,
the measurement of these technical assets and liabilities as well as
of the financial liabilities carried at fair value (Level 3) was of par-
ticular significance in the context of our audit.
② As part of our audit, we assessed the appropriateness of selected
controls established by the Company for the purpose of selecting
the valuation methods applied, determining assumptions and
making estimates for the measurement of certain technical assets
and liabilities as well as financial liabilities carried at fair value
(Level 3). In doing so we evaluated, among others, the integrity of
the underlying data and the process for determining the assump-
tions and estimates used in the valuation.
With the support of our internal valuation specialists, we
have compared the respective valuation methods applied and the
material assumptions with generally recognized methods and in-
dustry standards and examined to what extent these are appro-
priate for the valuation of technical assets and liabilities as well as
financial liabilities carried at fair value (Level 3). A key point of our
audit was the assessment of the liability adequacy test, the evalu-
ation of the expected gross margins/profits, which are used,
among others, as the basis for amortizing the deferred acquisition
costs and the evaluation of the appropriateness of significant as-
sumptions not observable on the market for the valuation of deriv-
ative financial instruments, such as mortality and lapse rates. Our
audit also included an evaluation of the plausibility and integrity
of the data and assumptions used in the valuation and of the
Group's Actuarial department's reporting to the Group Reserve
Committee.
2 Measurement of certain technical provisions in property-casualty
insurance
1 Measurement of certain technical assets and liabilities as well as
certain financial liabilities carried at fair value (level 3) in life and
health insurance
In our view, the matters of most significance in our audit were as fol-
lows:
Key audit matters are those matters that, in our professional judgment,
were of most significance in our audit of the consolidated financial
statements for the financial year from 1 January to 31 December 2020.
These matters were addressed in the context of our audit of the con-
solidated financial statements as a whole, and in forming our audit
opinion thereon; we do not provide a separate audit opinion on these
matters.
Renate Wagner
182
Annual Report 2020 - Allianz Group
INDEPENDENT AUDITOR'S REPORT
E Further Information
To Allianz SE, Munich
Report on the audit of the consolidated financial
statements and of the group management
report
Dr. Günther Thollinger
AUDIT OPINIONS
In our opinion, on the basis of the knowledge obtained in the audit,
the accompanying consolidated financial statements comply, in
all material respects, with the IFRSS as adopted by the EU, and the
additional requirements of German commercial law pursuant to
§ [Article] 315e Abs. [paragraph] 1 HGB [Handelsgesetzbuch: Ger-
man Commercial Code] and, in compliance with these require-
ments, give a true and fair view of the assets, liabilities, and finan-
cial position of the Group as at 31 December 2020, and of its finan-
cial performance for the financial year from 1 January to 31 De-
cember 2020, and
the accompanying group management report as a whole pro-
vides an appropriate view of the Group's position. In all material
respects, this group management report is consistent with the con-
solidated financial statements, complies with German legal re-
quirements and appropriately presents the opportunities and risks
of future development. Our audit opinion on the group manage-
ment report does not cover the content of those parts of the group
management report listed in the "Other Information" section of our
auditor's report.
Pursuant to § 322 Abs. 3 Satz [sentence] 1 HGB, we declare that our
audit has not led to any reservations relating to the legal compliance
of the consolidated financial statements and of the group manage-
ment report.
BASIS FOR THE AUDIT OPINIONS
We conducted our audit of the consolidated financial statements and
of the group management report in accordance with § 317 HGB and
the EU Audit Regulation (No. 537/2014, referred to subsequently as
"EU Audit Regulation") in compliance with German Generally Accepted
Standards for Financial Statement Audits promulgated by the Institut
der Wirtschaftsprüfer [Institute of Public Auditors in Germany] (IDW).
Our responsibilities under those requirements and principles are fur-
ther described in the "Auditor's Responsibilities for the Audit of the Con-
solidated Financial Statements and of the Group Management Re-
port" section of our auditor's report. We are independent of the group
entities in accordance with the requirements of European law and Ger-
man commercial and professional law, and we have fulfilled our other
German professional responsibilities in accordance with these require-
ments. In addition, in accordance with Article 10 (2) point (f) of the EU
Audit Regulation, we declare that we have not provided non-audit ser-
vices prohibited under Article 5 (1) of the EU Audit Regulation. We be-
lieve that the audit evidence we have obtained is sufficient and appro-
priate to provide a basis for our audit opinions on the consolidated fi-
nancial statements and on the group management report.
KEY AUDIT MATTERS IN THE AUDIT OF THE
CONSOLIDATED FINANCIAL STATEMENTS
We have audited the consolidated financial statements of Allianz SE,
Munich, and its subsidiaries (the Group), which comprise the consoli-
dated balance sheet as at 31 December 2020, and the consolidated
income statement, consolidated statement of comprehensive income,
consolidated statement of changes in equity and consolidated state-
ment of cash flows for the financial year from 1 January to 31 Decem-
ber 2020, and notes to the consolidated financial statements, includ-
ing a summary of significant accounting policies. In addition, we have
audited the group management report of Allianz SE for the financial
year from 1 January to 31 December 2020. In accordance with the Ger-
man legal requirements, we have not audited the content of those
parts of the group management report listed in the "Other Infor-
mation" section of our auditor's report.
31.7 1
100.0
100.0
Valderrama S.A., Luxembourg
100.0
AMLI-Allianz Investment LP, Wilmington, DE
75.0 7
SCI Docks V3, Paris la Défense
50.0
Vanilla Capital Markets S.A., Luxembourg
100.0
AREAP Core I LP, Singapore
50.0
SES Shopping Center AT1 GmbH, Salzburg
50.0
VertBois S.à r.l., Luxembourg
100.0
AS Gasinfrastruktur Beteiligung GmbH, Vienna
50.0
55.67
49.97
Altair MF TMK, Tokyo
ACRE Acacia Investment Trust I, Sydney
50.03
UP 36 SA, Brussels
100.0
Vailog Hong Kong DC17 Limited, Hong Kong
100.0
ACRE Acacia Management | Pty Ltd., Sydney
Allee-Center Kft., Budapest
50.0
Scape Investment Operating Company No. 3 Pty
Ltd., Sydney
35.8 7
50.0
Scape Investment Trust No. 3, Sydney
35.8 3,7
Vailog Hong Kong DC19 Limited, Hong Kong
100.0
SCI Docks V2, Paris la Défense
Vet Envoy Limited, Colwyn Bay
100.0
Vigny Depierre Conseils SAS, Archamps
SPREF II Pte. Ltd., Singapore
Weihong (Shanghai) Storage Services Co. Ltd.,
Shanghai
100.0
Bajaj Allianz Financial Distributors Limited, Pune
BCal Houston JV L.P., Wilmington, DE
50.0
40.0 7
Tempo Multiasistencia Gestão de Rede Ltda.,
Barueri
50.0
Weilong (Hubei) Storage Services Co. Ltd., Ezhou
100.0
CH A Logistics Wholesale Fund, Sydney
50.0 3
Terminal Venture LP, Wilmington, DE
30.97
Weilong (Jiaxing) Storage Services Co. Ltd., Jiaxing
80.0 7
40.0 7
Spanish Gas Distribution Investments S.à r.l.,
Luxembourg
AZ/JH Co-Investment Venture (IL) LP, Wilmington,
DE
100.0
Austin West Campus Student Housing LP,
Wilmington, DE
SES Shopping Center FP 1 GmbH, Salzburg
Sirius MF TMK, Tokyo
50.0
49.97
44.7 7
Viveole SAS, Versailles
100.0
100.0
Solunion Compañía Internacional de Seguros y
Reaseguros SA, Madrid
50.0
80.0 7
Volta, Paris
100.0
Vordere Zollamtsstraße 13 GmbH, Vienna
100.0
AZ/JH Co-Investment Venture (DC) LP, Wilmington,
DE
UK Logistics S.C.Sp., Luxembourg
35.8 3,7
Scape Australia Holding Trust, Sydney
Top Versicherungs-Vermittler Service GmbH,
Vienna
Orion MF TMK, Tokyo
49.97
100.0
Piaf Bidco B.V., Amsterdam
23.97
TruChoice Financial Group LLC, Minneapolis, MN
100.0
Podium Fund HY REIT Owner LP, Wilmington, DE
44.37
TU Allianz Zycie Polska S.A., Warsaw
100.0
Joint ventures
Porterbrook Holdings | Limited, London
30.0 7
100.0
Trafalgar Insurance Limited, Guildford
100.0
60.07
D_Consolidated Financial Statements
%
%
%
owned¹
owned¹
owned¹
TUIR Allianz Polska S.A., Warsaw
Top Vorsorge-Management GmbH, Vienna
Towarzystwo Ubezpieczen Euler Hermes S.A.,
Warsaw
Gesellschaft für Vorsorgeberatung AG, Wallisellen
Knightsbridge Allianz LP, Bartlesville, OK
100.0
NRP Nordic Logistics Fund AS, Oslo
49.57
99.53
Ophir-Rochor Commercial Pte. Ltd., Singapore
75.0
100.0
100.0
49.57
100.0
53 State JV LP., Wilmington, DE
49.07
SC Holding SAS, Paris
50.0
UK Logistics PropCo IV S.à r.L., Luxembourg
100.0
A&A Centri Commerciali S.r.L., Milan
50.0
Scape Australia (Vulture) Trust, Sydney
35.8 3,7
UK Logistics PropCo V S.à r.L., Luxembourg
100.0
AA Ronsin Investment Holding Limited, Hong Kong
62.07
UK Logistics PropCo III S.à r.L., Luxembourg
56.07
RMPA Holdings Limited, Colchester
49.07
Previndustria - Fiduciaria Previdenza Imprenditori
UK Logistics GP S.à r.L., Luxembourg
100.0
1515 Broadway Realty LP, Dover, DE
49.67
S.p.A., Milan
50.0
114 Venture LP, Wilmington, DE
UK Logistics PropCo I S.à r.L., Luxembourg
1800 M Street Venture LP, Wilmington, DE
42.87
Queenspoint S.L., Madrid
50.0
UK Logistics PropCo II S.à r.L., Luxembourg
100.0
30 HY WM REIT Owner LP, Wilmington, DE
100.0
Chapter Master Limited Partnership, London
45.57
The FIZZ Student Housing Fund S.C.S., Luxembourg
99.0
Euromarkt Center d.o.o., Ljubljana
50.0
Allianz Impact Investment Fund S.A. SICAV-RAIF,
Senningerberg
16,7 3,8
ZAD Energia, Sofia
Fiumaranuova S.r.L., Genoa
50.0
51.0
Allianz Invest Vorsorgefonds, Vienna
28.13
GBTC I LP, Singapore
50.0
Allianz Life Insurance Japan Ltd., Tokyo
40.0
ZAD Allianz Bulgaria Zhivot, Sofia
50.0
ESR India Logistics Fund Pte. Ltd., Singapore
87.4
YAO NEWREP Investments S.A., Luxembourg
94.0
Allianz France Investissement IV, Paris
73.3 3,8
Elton Investments S.à r.l., Luxembourg
32.57
Yorktown Financial Companies Inc., Minneapolis,
Non-consolidated affiliates
Allianz Global Multi-Asset Credit, Senningerberg
MN
Enhanzed Reinsurance Ltd., Hamilton
24.97
100.0
Allianz Global Small Cap Equity, Senningerberg
29.73
ZAD Allianz Bulgaria, Sofia
6.7 3,8
50.0
Helios SCC Sp. z o.o., Katowice
Allianz 071 S.r.l, Milan
DE
28.6
de Representação no Brasil Ltda., Rio de Janeiro
100.0
LBA IV-PPII-Office Venture LLC, Dover, DE
45.0 7
Areim Fastigheter 2 AB, Stockholm
23.3
Allianz Infrastructure Holding II Pte. Ltd., Singapore
100.0
LBA IV-PPII-Retail Venture LLC, Dover, DE
45.0
Areim Fastigheter 3 AB, Stockholm
31.6
Allianz Insurance Services Ltd., Athens
45.0 7
LBA IV-PPI Venture LLC, Dover, DE
Allianz Global Corporate & Specialty SE Escritório
Archstone Multifamily Partners AC LP, Wilmington,
51.0
Hudson One Ferry JV L.P., Wilmington, DE
45.0 7
Alpha Asia Macro Trends Fund III Private Limited,
Singapore
27.7 3
Allianz 901 S.r.l, Milan
51.0
45.0 7
Israel Credit Insurance Company Ltd., Tel Aviv
Archstone Multifamily Partners AC JV LP,
Wilmington, DE
40.0
Allianz Financial Services S.A., Athens
100.0
Italian Shopping Centre Investment S.r.L., Milan
50.0
50.0
LPC Logistics Venture One LP, Wilmington, DE
Dundrum Retail Limited Partnership, Dublin
Allianz Fóndika S.A. de C.V., Mexico City
Windpark EDM GmbH & Co. KG, Pottenbrunn
100.0
DE
44.7 1
Triskelion Property Holding Designated Activity
Windpark GHW GmbH, Pottenbrunn
100.0
Windpark Ladendorf GmbH, Vienna
100.0
Columbia REIT-University Circle LP, Wilmington, DE
Companhia de Seguro de Créditos S.A., Lisbon
44.7 1
Company, Dublin
50.0
50.0
Valley (III) Pte. Ltd., Singapore
50.0
Top Torony Ingatlanhasznosító Zrt., Budapest
Columbia REIT - 333 Market Street LP, Wilmington,
100.0
49.57
Weiyi (Shenyang) Storage Services Co. Ltd.,
Shenyang
100.0
CHP-AZ Seeded Industrial L.P., Wilmington, DE
49.07
The State-Whitehall Company LP, Dover, DE
41.5
49.97
100.0
Columbia REIT - 221 Main Street LP, Wilmington,
DE
Tokio Marine Rogge Asset Management Ltd.,
London
45.07
50.0
Windpark EDM GmbH, Pottenbrunn
Windpark AO GmbH, Pottenbrunn
26.8
Windpark Les Cent Jalois SAS, Versailles
CPIC Fund Management Co. Ltd., Shanghai
100.0
Dundrum Car Park GP Limited, Dublin
50.0
Windpark Zistersdorf GmbH, Pottenbrunn
100.0
Dundrum Car Park Limited Partnership, Dublin
50.0
Associates
Wm. H McGee & Co. (Bermuda) Ltd., Hamilton
Dundrum Retail GP Designated Activity Company,
Dublin
Allianz EFU Health Insurance Ltd., Karachi
49.0
50.0
Wm. H McGee & Co. Inc., New York, NY
100.0
Windpark Scharndorf GmbH, Pottenbrunn
49.07
Waterford Blue Lagoon LP, Wilmington, DE
36.67
49.07
VGP European Logistics 2 S.à r.L., Senningerberg
50.0
Windpark LOI GmbH, Pottenbrunn
100.0
Windpark PDV GmbH, Pottenbrunn
100.0
100.0
CPPIC Euler Hermes Insurance Sales Co. Ltd.,
Shanghai
50.0
49.0 7
VISION (III) Pte Ltd., Singapore
30.0 7
Windpark PL GmbH, Pottenbrunn
100.0
Daiwater Investment Limited, London
VGP European Logistics S.à r.L., Senningerberg
50.0
Annual Report 2020 - Allianz Group
188
Membership in other statutory supervisory boards
B_Corporate Governance
STATEMENT ON CORPORATE MANAGEMENT
The Statement on Corporate Management forms part of the Group
Management Report. According to § 317 (2) sentence 6 of the German
Commercial Code ("Handelsgesetzbuch - HGB"), the audit of the dis-
closures is limited to whether the relevant disclosures have been made.
Corporate Constitution
of the European Company (SE)
As a European Company, Allianz SE is subject to special European SE
regulations and the German SE Implementation Act ("SE-Ausfüh-
rungsgesetz") in addition to the German SE Employee Involvement Act
("SE-Beteiligungsgesetz"). Notwithstanding, the main features of a
German stock corporation - in particular the two-tier board system
(Board of Management and Supervisory Board) and the principle of
equal employee representation on the Supervisory Board – have been
maintained by Allianz SE. The Corporate Constitution of Allianz SE is
laid down in its Statutes. The current version of the Statutes is available
on our website at www.allianz.com/statutes.
Declaration of Conformity in accordance with § 161 of the German
Stock Corporation Act
Declaration of Conformity by the Management Board and the Supervisory Board of
Allianz SE with the recommendations of the German Corporate Governance Code
Commission in accordance with § 161 of the German Stock Corporation Act (AktG)
Allianz SE currently complies with all recommendations of the German Corporate Governance
Code (Code) in the version of December 16, 2019 and will comply with them in the future.
Since the last Declaration of Conformity as of December 13, 2019, Allianz SE has complied
with all recommendations of the German Corporate Governance Code in the version of
February 7, 2017.
Munich, December 10, 2020
Allianz SE
For the Management Board:
Signed Oliver Bäte
For the Supervisory Board:
Signed Michael Diekmann
Signed Renate Wagner
Regulatory requirements
The regulatory requirements for corporate governance (system of
governance) applicable for insurance companies, insurance groups,
and financial conglomerates apply. Specifically, they include the
establishment and further design of significant control functions
(independent risk control function, actuarial function, compliance
function, and internal audit) as well as general principles for a sound
In addition, Allianz SE follows all the suggestions of the Code in its
16 December 2019 version.
The Declaration of Conformity and further information on corpo-
rate governance at Allianz can be found on our website at
> www.allianz.com/corporate-governance.
Function of the Board of Management and the
business organization. These regulatory requirements are applicable composition and functions of committees
throughout the Group in accordance with the principle of propor-
tionality. The implementation of the regulatory requirements is sup-
ported by written guidelines issued by the Board of Management of
Allianz SE. Furthermore, Solvency II requires the publication of
qualitative and quantitative information including a market value
balance sheet. Details on the implementation of the regulatory
requirements for corporate governance by Allianz SE and by the
Allianz Group can be found in the Solvency and Financial Condition
Report of Allianz SE and of the Allianz Group, which are published
on our website at > www.allianz.com/sfcr.
Declaration of Conformity with the German
Corporate Governance Code
Good corporate governance is essential for sustainable business per-
formance. The Board of Management and the Supervisory Board of
Allianz SE therefore attach great importance to complying with the
recommendations of the German Corporate Governance Code (here-
inafter referred to as the "Code"). On 10 December 2020, the Board of
Management and the Supervisory Board issued the following Decla-
ration of Conformity of Allianz SE with the Code:
The Board of Management of Allianz SE has ten members. Its mem-
bers may not, in general, be older than 62 years of age.
The Board of Management is responsible for setting business
objectives and the strategic direction, for coordinating and supervising
the operating entities, and for implementing and overseeing an effi-
cient risk management system. The Board of Management also pre-
pares the annual financial statements of Allianz SE, the Allianz Group's
consolidated financial statements, the market value balance sheet,
and the interim report.
The members of the Board of Management are jointly responsi-
ble for management and for complying with legal requirements. Not-
withstanding this overall responsibility, the individual members head
the departments they have been assigned independently. There are
divisional responsibilities for business segments as well as functional
responsibilities. The latter include the Finance, Risk Management
and Controlling Functions, Investments, Operations and IT, Human
Resources, Legal, Compliance, Internal Audit, or Mergers & Acquisi-
tions. Business division responsibilities focus on geographical regions
or Global Lines. Rules of procedure specify in more detail the structure
and departmental responsibilities of the Board of Management.
Board of Management meetings are led by the Chairman. Each
member of the Board may request a meeting, providing notification of
the proposed subject. The Board makes decisions by a simple majority
of participating members. In the event of a tie, the Chairman casts the
13
Annual Report 2020 - Allianz Group
B
CORPORATE GOVERNANCE
Allianz Versicherungs-AG
DR. AXEL THEIS
until 31 March 2020
Insurance German Speaking Countries and
Central & Eastern Europe
Membership in other statutory supervisory boards
and SE administrative boards in Germany
Gemeinnützige ProCurand GmbH (Chairman)
Membership in Group bodies
Allianz Deutschland AG (Chairman)
until 19 March 2020
Allianz Investment Management SE
Membership in comparable¹ supervisory bodies
Membership in Group bodies
Allianz Elementar Lebensversicherungs-AG
(Chairman)
Allianz Elementar Versicherungs-AG (Chairman)
Allianz Investmentbank AG
Allianz Suisse Lebensversicherungs-Gesellschaft AG
Allianz Suisse Versicherungs-Gesellschaft AG
14
CHRISTOPHER TOWNSEND
Global Insurance Lines & Anglo Markets,
Reinsurance, Middle East, Africa
Membership in other statutory supervisory boards
and SE administrative boards in Germany
Membership in Group bodies
Allianz Global Corporate & Specialty SE (Chairman)
Membership in comparable¹ supervisory bodies
Membership in Group bodies
Allianz p.l.c.
RENATE WAGNER
Human Resources, Legal, Compliance,
Mergers & Acquisitions
Membership in other statutory supervisory boards
and SE administrative boards in Germany
Membership in Group bodies
Allianz Global Investors GmbH
until 30 June 2020
1_Generally, we regard memberships in other supervisory bodies as comparable if the company is listed on a stock exchange or has more than 500 employees.
12
Annual Report 2020 - Allianz Group
since 1 January 2021
Annual Report 2020 - Allianz Group
B_Corporate Governance
deciding vote. The Chairman can also veto decisions, but he cannot
impose any decisions against the majority vote.
As of 31 December 2020
Responsibilities
Designing, monitoring, and improving
group-wide compensation systems in line
with regulatory requirements and submitting
an annual report on the monitoring results,
along with proposals for improvement.
Specifying the strategic asset allocation for the
Group to enable consistent implementation by
the operating units, particularly in relation to
alternative assets, monitoring of performance
across all asset classes and ensuring consistent
organization of the Investment Management
function and Investment Governance across the
Group.
The Allianz Group runs its operating entities and business segments via
an integrated management and control process. First, the Holding and
the operating entities define the business strategies and goals. On this
basis, joint plans are then prepared for the Supervisory Board's consid-
eration when setting targets for the performance-based remuneration
of the members of the Board of Management. For details, please refer
to the Remuneration Report.
Diversity concept for the Board of Management
and succession planning
In accordance with the legislation on the implementation of the Euro-
pean guidelines as regards the disclosure of non-financial and diver-
sity information (CSR Directive), the diversity concept for the Board of
Management, its objectives, implementation, and results achieved are
to be reported for the 2020 financial year.
The Supervisory Board adopted the following diversity concept
for the Board of Management of Allianz SE:
"For the composition of the Management Board, the Supervisory
Board aims for an adequate 'Diversity of Minds'. This comprises broad
diversity with regard to gender, internationality, and educational as
well as professional background.
The Supervisory Board assesses the achievement of such target, inter
alia, on the basis of the following specific indicators:
Adequate proportion of women on the Management Board: at
least 30% by 31 December 2021;
Adequate share of members with an international background
(e.g., based on origin or extensive professional experience
abroad), ideally with a connection to the regions in which
Allianz Group is operating;
Adequate diversity with regard to educational and professional
background, taking into account the limitations for the Supervisory
Board by regulatory requirements (fitness)."
This diversity concept is implemented in the appointment procedure
for members of the Board of Management by the Supervisory Board.
For the purpose of long-term succession planning, a list of candidates
GROUP INVESTMENT COMMITTEE
Board members of Allianz SE and
Allianz Group executives.
Annual Report 2020 - Allianz Group
B_Corporate Governance
is prepared and updated on an ongoing basis by the Chairman of
the Board of Management in consultation with the Chairman of the
Supervisory Board. It is ensured that lists of successors will comprise
appropriate percentages of female candidates as well as of candi-
dates with international experience. The Personnel Committee takes
this into consideration especially in succession planning. The list of can-
didates includes internal and external candidates who generally meet
the requirements for a mandate in the Board of Management. In the
event of a vacancy on the Board of Management, the Personnel
Committee, after a thorough examination, recommends a suitable
candidate to the Supervisory Board plenary session and reports on the
selection process and, if necessary, alternative candidates. Prior to an
appointment to the Board of Management, all members of the Super-
visory Board are given the opportunity to meet the candidate in per-
son.
Currently there are three women on the Management Board rep-
resenting a share of 30%. Five members of the Management Board
have international backgrounds. There is an adequate degree of vari-
ety as regards educational and professional backgrounds. The Board
of Management of Allianz SE is thus composed in accordance with the
diversity concept.
Corporate governance practices
INTERNAL CONTROL SYSTEM
The Allianz Group has an effective internal risk and control system for
verifying and monitoring its operating activities and business pro-
cesses, in particular financial reporting, as well as compliance with reg-
ulatory requirements. The requirements placed on the internal control
system are essential not only for the resilience and franchise value of
the company, but also to maintain the confidence of the capital mar-
ket, our customers, and the public. An assessment of the adequacy and
effectiveness of the internal control system as part of the System of
Governance is conducted regularly in the course of the review of the
business organization. For further information on our risk organization
and risk principles, please refer to the section "Risk governance system"
in the Risk and Opportunity Report. For further information on our
Integrated Risk and Control System for Financial Reporting, please
refer to the respective chapter.
In addition, the quality of our internal control system is assessed
by the Allianz Group's Internal Audit function. This function conducts
independent, objective assurance activities, analyzing the structure
and efficiency of the internal control system as a whole. In addition, it
also examines the potential for additional value and improvement of
our organization's operations. Fully compliant with all international
auditing principles and standards, Internal Audit contributes to the eval-
uation and improvement of the effectiveness of the risk management,
control, and governance processes. Therefore, internal audit activities are
geared towards helping the company to mitigate risks, and further as-
sist in strengthening its governance processes and structures.
COMPLIANCE MANAGEMENT SYSTEM
Integrity is at the core of our compliance programs and the basis for
the trust of our customers, shareholders, business partners, and em-
ployees. The compliance function fosters a corporate culture of individ-
ual and collective responsibility for ethical conduct and adherence to
the rules by:
Advising the Board of Management, managers, and employees
on business conduct that is lawful and ethical;
Identifying and assessing material compliance risks and oversee-
ing the implementation of adequate and effective internal con-
trols to mitigate them;
Providing a speak-up facility that employees and third parties can use
to confidentially report possible illegal or inappropriate behavior;
Communicating transparently and trustfully with supervisory author-
ities.
15
Allianz Private Krankenversicherungs-AG
GROUP COMPENSATION COMMITTEE
Board members of Allianz SE and executives
below Allianz SE Board level.
Group committees
BOARD OF MANAGEMENT AND GROUP COMMITTEES
In the financial year 2020, the following Board of Management com-
mittees were in place:
Board committees
Board committees
GROUP FINANCE AND RISK COMMITTEE
Giulio Terzariol (Chairman),
Niran Peiris,
Dr. Klaus-Peter Röhler,
Dr. Günther Thallinger.
GROUP IT COMMITTEE
Dr. Christof Mascher (Chairman),
Niran Peiris,
Dr. Klaus-Peter Röhler,
Ivan de la Sota,
Giulio Terzariol,
Dr. Günther Thallinger.
Group committees
GROUP MERGERS
Renate Wagner (Chairwoman),
Oliver Bäte,
Responsibilities
Preparing the capital and liquidity planning for
the Group and Allianz SE, implementing and
overseeing the principles of group-wide capital
and liquidity management as well as risk
standards and preparing risk strategy.
This includes, in particular, significant individual
financing transactions and guidelines for
derivatives, Group financing and internal Group
capital management as well as establishing
and overseeing a group-wide risk management
and monitoring system including stress tests.
Developing and proposing a group-wide IT
strategy, monitoring its implementation and,
approving local and group-wide IT investments
as well as reviewing and overseeing individual
IT projects.
Managing and overseeing Group M&A
transactions, including approval of
individual transactions within certain
thresholds.
The Board of Management reports regularly and comprehen-
sively to the Supervisory Board on business development, the com-
pany's financial position and earnings, planning and achievement of
objectives, business strategy, and risk exposure. Details on the Board
of Management's reporting to the Supervisory Board are laid down in
the information rules issued by the Supervisory Board.
Important decisions of the Board of Management require
approval by the Supervisory Board. These requirements are stipulated
by law, by the Statutes, or in individual cases by decisions of the Annual
General Meeting (AGM). Supervisory Board approval is required, for
example, for certain capital transactions, intercompany agreements,
and the launch of new business segments or the closure of existing
ones. Approval is also required for acquisitions of companies and hold-
ings in companies as well as for divestments of Group companies that
exceed certain threshold levels. The Agreement concerning the Par-
ticipation of Employees in Allianz SE, in the version dated 3 July 2014
(hereinafter "SE Agreement"), requires the approval of the Supervisory
Board for the appointment of the member of the Board of Manage-
ment responsible for employment and social welfare.
The composition of the Board of Management is described
in Mandates of the Members of the Board of Management or on
our website at www.allianz.com/management-board. A general
description of the function of the Board of Management can also be
found there.
Niran Peiris,
Giulio Terzariol.
As of 31 December 2020
In addition to Board committees, there are also Group committees.
They are responsible for preparing decisions for the Board of Manage-
ment of Allianz SE, submitting proposals for resolutions, and ensuring
a smooth flow of information within the Group.
In the financial year 2020, the following Group committees were in
place:
AND ACQUISITIONS COMMITTEE
Allianz Lebensversicherungs-AG
Allianz Investment Management SE (Chairman)
since 19 March 2020
Member of various Supervisory Boards
Membership in other statutory supervisory boards
and SE administrative boards in Germany
Deutsche Lufthansa AG
until 5 May 2020
FC Bayern München AG (Chairman)
Membership in comparable¹ supervisory bodies
Accenture Plc
GODFREY ROBERT HAYWARD
Employee of Allianz Insurance plc
FRANK KIRSCH
Employee of Allianz Beratungs- und Vertriebs-AG
JÜRGEN LAWRENZ
Employee of Allianz Technology SE
Membership in other statutory supervisory boards
and SE administrative boards in Germany
HERBERT HAINER
Membership in Group bodies
1_Generally, we regard memberships in other supervisory bodies as comparable if the company is listed on a stock exchange or has more than 500 employees.
Annual Report 2020 - Allianz Group
11
A To our Investors
MANDATES OF THE MEMBERS
OF THE BOARD OF MANAGEMENT
OLIVER BÄTE
Chairman of the Board of Management
Membership in other statutory supervisory boards
and SE administrative boards in Germany
Membership in Group bodies
Allianz Deutschland AG
(Chairman since 19 March 2020)
SERGIO BALBINOT
Allianz Technology SE
Insurance Western & Southern Europe,
National Representative Insurances, ver.di Berlin
Allianz France S.A.
Siemens AG
JIM HAGEMANN SNABE
Vice Chairman
Member of various Supervisory Boards
SOPHIE BOISSARD
Chairwoman of the Board of Management of Korian S.A.
Membership in other statutory supervisory boards
and SE administrative boards in Germany
Korian Deutschland AG (Chairwoman)
Korian Management AG (Chairwoman)
Membership in comparable¹ supervisory bodies
Over SpA
since 21 January 2020
Segesta SpA (Korian Group company)
Senior Living Group NV (Korian Group company)
Membership in other statutory supervisory boards CHRISTINE BOSSE
and SE administrative boards in Germany
Siemens AG (Chairman)
Membership in comparable¹ supervisory bodies
A.P. Møller-Mærsk A/S (Chairman)
MARTINA GRUNDLER
GABRIELE BURKHARDT-BERG
Vice Chairwoman
Member of various Supervisory Boards
Membership in comparable¹ supervisory bodies
Coop Amba
since 25 April 2020
P/F BankNordik (Chairwoman)
until 26 March 2020
DR. FRIEDRICH EICHINER
Member of various Supervisory Boards
Membership in other statutory supervisory boards
and SE administrative boards in Germany
Festo AG (Chairman)
until 18 January 2021
Festo Management SE (Chairman)
Infineon Technologies AG
since 20 February 2020
JEAN-CLAUDE LE GOAËR
Employee of Allianz Informatique G.I.E.
Membership in comparable¹ supervisory bodies
Membership in Group bodies
Chairwoman of the Group Works Council of Allianz SE
The global compliance programs coordinated by Allianz SE's central
Group Compliance function support our employees, managers, and
executive board members to act responsibly and with integrity in all
situations.
Asia Pacific
Bajaj Allianz General Insurance Company Ltd.
Bajaj Allianz Life Insurance Company Ltd.
Membership in Group bodies
since 1 April 2020
Insurance German Speaking Countries and
Central & Eastern Europe
Membership in other statutory supervisory boards
and SE administrative boards in Germany
EUROKAI GmbH & Co. KGaA
Membership in Group bodies
Allianz Beratungs- und Vertriebs-AG (Chairman)
Allianz Lebensversicherungs-AG (Chairman)
Allianz Private Krankenversicherungs-AG (Chairman)
Allianz Versicherungs-AG (Chairman)
Membership in comparable¹ supervisory bodies
Membership in Group bodies
Allianz Suisse Lebensversicherungs-Gesellschaft AG
since 28 April 2020
Allianz Suisse Versicherungs-Gesellschaft AG
since 28 April 2020
IVAN DE LA SOTA
Business Transformation, Insurance Iberia & Latin
America, Allianz Partners
Membership in other statutory supervisory boards
and SE administrative boards in Germany
Volkswagen Autoversicherung AG
since 1 January 2021
Membership in Group bodies
Allianz Deutschland AG
KLAUS-PETER RÖHLER
since 19 March 2020
Allianz Compañía de Seguros y Reaseguros S.A., Spain
Allianz Partners S.A.S. (Chairman)
Allianz Seguros S.A., Brazil (Chairman)
Companhia de Seguros Allianz Portugal S.A.
GIULIO TERZARIOL
Finance, Controlling, Risk
Membership in other statutory supervisory boards
and SE administrative boards in Germany
Membership in Group bodies
Allianz Deutschland AG
since 19 March 2020
DR. GÜNTHER THALLINGER
Investment Management
Membership in other statutory supervisory boards
and SE administrative boards in Germany
Membership in Group bodies
Allianz Deutschland AG
Membership in comparable¹ supervisory bodies
Membership in Group bodies
Membership in comparable¹ supervisory bodies
UniCredit S.p.A.
Allianz p.l.c.
Membership in other statutory supervisory boards
and SE administrative boards in Germany
Membership in Group bodies
Allianz (China) Insurance Holding Company Ltd.
(Chairman)
Allianz France S.A.
Allianz Sigorta A.S.
Allianz Yasam ve Emeklilik A.S.
JACQUELINE HUNT
Asset Management, US Life Insurance
Membership in comparable¹ supervisory bodies
Membership in Group bodies
Allianz Life Insurance Company of North America (Chair-
woman)
DR. BARBARA KARUTH-ZELLE
since 1 January 2021
Operations, Allianz Services
Membership in other statutory supervisory boards
and SE administrative boards in Germany
Membership in Group bodies
Allianz Global Corporate & Specialty SE (Chairman)
Membership in comparable¹ supervisory bodies
Membership in Group bodies
Allianz Technology SE (Chairwoman)
Allianz Partners S.A.S.
DR. CHRISTOF MASCHER
until 31 December 2020
Operations and IT
Membership in other statutory supervisory boards
and SE administrative boards in Germany
Volkswagen Autoversicherung AG
Membership in Group bodies
Allianz Technology SE (Chairman)
Membership in comparable¹ supervisory bodies
Membership in Group bodies
Allianz Partners S.A.S.
NIRAN PEIRIS
until 31 December 2020
Global Insurance Lines & Anglo Markets,
Reinsurance, Middle East, Africa
Membership in comparable¹ supervisory bodies
Membership in Group bodies
Moreover, Allianz SE's central Group Compliance function is
responsible - in close cooperation with local compliance functions -
for ensuring the effective implementation and monitoring of the com-
pliance programs within the Allianz Group as well as for investigating
potential compliance infringements. Furthermore, as a key function,
the compliance function carries out the advisory, risk identification and
assessment, monitoring, and early warning tasks required under the
Solvency II regime.
Fresenius Management SE
The German Co-Determination Act ("Mitbestimmungsgesetz") does
not apply to Allianz SE because it has the legal form of a European
Company (SE). Instead, the size and composition of the Supervisory
Board is determined by general European SE regulations. These regu-
lations are implemented in the Statutes and via the SE Agreement.
On the basis of its own reviews of the annual Allianz SE and consolidated financial statements, the management
and group management reports, and the recommendation for the appropriation of earnings, the Supervisory
Board has raised no objections and agreed with the results of the PwC audit. It has also approved the Allianz SE
and consolidated financial statements prepared by the Board of Management. The financial statements have
thus been formally adopted. The Supervisory Board agrees with the Board of Management's proposal on the
appropriation of earnings.
All Supervisory Board members received the documentation relating to the annual financial statements and the
auditor's reports from PwC on schedule. The preliminary financial statements and PwC's preliminary audit results
were discussed in the Audit Committee on 17 February 2021 as well as in the Supervisory Board's plenary session
on 18 February 2021. The finalized financial statements and PwC's audit reports (dated 22 February 2021) were
reviewed by the Audit Committee on 3 March 2021 and in the Supervisory Board plenary session on 4 March 2021.
The auditors participated in the discussions and presented key results from their audit. Particular emphasis was
placed on the key audit matters described in the auditor's report and on the audit procedures performed. No
material weaknesses in the internal financial reporting control process were discovered. There were no circum-
stances that might give cause for concern about the auditor's independence. In addition, the market value
balance sheets dated 31 December 2020 for both Allianz SE and the Allianz Group as well as the respective PwC
reports were reviewed by the Audit Committee and the Supervisory Board.
In compliance with the special legal provisions applying to insurance companies, the statutory auditor and the
auditor for the review of the half-yearly financial report are appointed by the Supervisory Board of Allianz SE, not
by the AGM. The Supervisory Board appointed PwC as statutory auditor for the annual Allianz SE and consoli-
dated financial statements as well as for the review of the half-yearly financial report of the financial year 2020.
PwC audited the financial statements of Allianz SE and the Allianz Group as well as the respective management
reports. They issued an auditor's report without any reservations. The consolidated financial statements were
prepared on the basis of the International Financial Reporting Standards (IFRS) as adopted in the European Union.
The annual financial statements of Allianz SE were prepared in accordance with German law and accounting
standards. PwC performed a review of the half-yearly financial report. In addition, PwC was also mandated
to perform an audit of the market value balance sheet according to Solvency II as of 31 December 2020 for
Allianz SE and the Allianz Group.
AUDIT OF ANNUAL ACCOUNTS AND CONSOLIDATED FINANCIAL STATEMENTS
CODE OF CONDUCT
Our Code of Conduct and the internal Compliance policies and
guidelines derived from it provide all employees, managers, and
executive board members with clear and practical guidance,
enabling them to act in line with the values of the Allianz Group. The
rules of conduct established by the Code of Conduct are binding
for all employees worldwide and build the basis for our compliance
programs. We did not identify any material violations of the Code of
Conduct in 2020. The Code of Conduct is available on our website at
www.allianz.com/compliance.
SPEAK UP
A major component of the Allianz Group's compliance management
system is a speak-up facility that allows employees and third parties
to notify the relevant compliance department confidentially about
potential illegal or inappropriate conduct. No employee voicing con-
cerns about irregularities in good faith needs to fear retribution, even
if the concerns later turn out to be unfounded. Third parties can con-
tact the compliance department via an electronic mailbox on our
website www.allianz.com/complaint-system.
COMPLIANCE PROGRAMS
Allianz SE's central Group Compliance function has set up inter-
nal guidelines for the following identified compliance risk areas:
financial crime, market integrity, customer protection, and com-
pliance with legal requirements. For further information on the
compliance risk areas, please refer to the Combined Separate
Non-Financial Report for Allianz Group and Allianz SE of the
Allianz Group's Annual Report 2020 and the Sustainability Report on
our website at www.allianz.com/sustainability.
COMPLIANCE TRAINING
and SE administrative boards in Germany
In order to convey the principles of the Code of Conduct and the com-
pliance programs based on these principles, Allianz has implemented
interactive training programs around the world. These provide
166
Annual Report 2020 - Allianz Group
B_Corporate Governance
practical guidance that enables employees to make their own deci-
sions based on internal and external requirements as well as ethical
principles. Training programs comprise in-person and e-learning train-
ings and are delivered in several languages.
The Supervisory Board would like to express its special thanks to all Allianz Group employees for their great
personal commitment over the past fiscal year under the difficult conditions caused by the pandemic.
Training courses to prevent corruption and money laundering are
mandatory for all Allianz employees worldwide. The same is true for
the antitrust training to exposed employees. Further trainings exist for
the other compliance programs.
ASSURANCE ENGAGEMENT OF THE COMBINED SEPARATE NON-FINANCIAL REPORT
In the financial year 2020, the company was required to issue a separate non-financial report. This report was
combined for Allianz SE and the Allianz Group. The Supervisory Board commissioned PwC to perform an
assurance engagement of this report. All Supervisory Board members received the combined separate non-financial
report and the independent practitioner's assurance report in due time. The report and PwC's assurance report
were discussed in the plenary session of the Supervisory Board on 4 March 2021. PwC participated in these
discussions and presented the results of their assurance engagement. Based on its own review of the combined
separate non-financial report, the Supervisory Board did not raise any objections and approved by acknowledge-
ment the results of the PwC assurance engagement.
A_To our Investors
MICHAEL DIEKMANN
A_To our Investors
OF THE SUPERVISORY BOARD
MANDATES OF THE MEMBERS
Annual Report 2020 - Allianz Group
10
10
Chairman
Michael Diekmann
ار
M. Miam
For the Supervisory Board:
Munich, 4 March 2021
Dr. Klaus-Peter Röhler was appointed to the Board of Management of Allianz SE with effect from 1 April 2020.
He succeeded Dr. Axel Theis, who resigned from office as of 31 March 2020. Furthermore, Dr. Christof Mascher
and Mr. Niran Peiris left the Board of Management as of 31 December 2020. Dr. Barbara Karuth-Zelle and
Mr. Christopher Townsend were appointed as new members of the Board of Management with effect from
1 January 2021.
MEMBERS OF THE SUPERVISORY BOARD AND BOARD OF MANAGEMENT
There were no changes in the composition of the Supervisory Board in fiscal year 2020.
A To our Investors
9
Annual Report 2020 - Allianz Group
Function of the Supervisory Board and the
composition and functions of committees
Fresenius SE & Co. KGaA
The Supervisory Board comprises twelve members, including six
shareholder representatives appointed by the AGM. The six employee
representatives are appointed by the SE works council. The specific
procedure for their appointment is laid down in the SE Agreement.
This agreement stipulates that the six employee representatives must
be allocated in proportion to the number of Allianz employees in the
different countries. The Supervisory Board currently in office includes
four employee representatives from Germany and one each from
France and the United Kingdom. According to §17 (2) of the German
SE Implementation Act ("SE-Ausführungsgesetz"), the Supervisory
Board of Allianz SE shall be composed of at least 30% women and at
least 30% men. It is to be proposed to the AGM on 5 May 2021 that the
regular term of appointment for the Supervisory Board of Allianz SE
be shortened to four years in the future.
- Two employee representatives
(Jean-Claude Le Goaër, Martina Grundler)
RISK COMMITTEE
5 members
- Chairman: appointed by the Supervisory
Board (Michael Diekmann)
-Three shareholder representatives
(in addition to Michael Diekmann:
Christine Bosse, Dr. Friedrich Eichiner)
- Two employee representatives (Godfrey
Hayward, Frank Kirsch)
PERSONNEL COMMITTEE
3 members
- Chairman: Chairman
of the Supervisory Board (Michael
Diekmann)
- One further shareholder representative
(Herbert Hainer)
- One employee representative (Gabriele
Burkhardt-Berg)
NOMINATION COMMITTEE
3 members
Chairman: Chairman
of the Supervisory Board (Michael
Diekmann)
- Two further shareholder representatives
(Christine Bosse, Jim Hagemann Snabe)
TECHNOLOGY COMMITTEE
Dr. Friedrich Eichiner: Sophie Boissard,
Michael Diekmann)
representatives (in addition to
- Three shareholder
(Dr. Friedrich Eichiner)
The Supervisory Board oversees and advises the Board of Man-
agement on managing the business. It is also responsible for appoint-
ing the members of the Board of Management, determining their
overall remuneration, succession planning for the Board of Manage-
ment, and reviewing Allianz SE's and the Allianz Group's annual finan-
cial statements. The Supervisory Board's activities in the 2020 financial
year, including an individualized disclosure of the meeting participa-
tion, are described in the Supervisory Board Report.
The Supervisory Board makes all decisions based on a simple
majority. The special requirements for appointing members to the
Board of Management, as stipulated in the German Co-Determina-
tion Act, and the requirement to have a Conciliation Committee do not
apply to an SE. In the event of a tie, the casting vote lies with the Chair-
man of the Supervisory Board, who at Allianz SE must be a share-
holder representative. If the Chairman is not present in the event of a
tie, the casting vote lies with the vice chairperson from the shareholder
side. A second vice chairperson is elected at the employee representa-
tives' proposal.
The Supervisory Board regularly reviews the efficiency of its
activities. The review is carried out either on the basis of a self-
evaluation using a questionnaire or by consulting an external con-
sultant. The entire Supervisory Board discusses recommendations for
improvements and adopts appropriate measures on the basis of
recommendations from the Standing Committee. In addition, the fit-
ness and propriety of the individual members of the Supervisory Board
are reviewed as part of an annual self-evaluation required by
supervisory law, and a development plan for the Supervisory Board is
drawn up on this basis.
SUPERVISORY BOARD COMMITTEES
Part of the Supervisory Board's work is carried out by its commit-
tees. The Supervisory Board receives regular reports on the
activities of its committees. The composition of committees and
the tasks assigned to them are regulated by the Supervisory
Board's Rules of Procedure, which can be found on our website at
www.allianz.com/supervisory-board.
Supervisory Board committees
Supervisory Board committees
Chairman
STANDING COMMITTEE
- Chairman: Chairman
of the Supervisory Board
(Michael Diekmann)
- Two further shareholder representatives
(Herbert Hainer, Jim Hagemann Snabe)
- Two employee representatives (Jürgen
Lawrenz, Jean-Claude Le Goaër)
AUDIT COMMITTEE
5 members
- Chairman: appointed
by the Supervisory Board
5 members
5 members
Member of various Supervisory Boards
As of 31 December 2020
The members of the Supervisory Board shall, as a rule, not be older than 70 years of age.
5. Retirement age
they can attend extraordinary meetings of the Supervisory Board or of a special committee to
deal with special matters as and when required.
depending on possible membership in one or more of the current six Supervisory Board special
committees, this involves extra time planning to participate in these Committee meetings and do
the necessary preparation for these meetings; this applies in particular for the Audit and risk
Committees;
they can attend the General Meeting;
The following requirements and objectives apply to the composition of Allianz SE's Supervisory
Board:
Employee representation within Allianz SE, according to the Agreement concerning the Participation
of Employees in Allianz SE, contributes to the diversity of work experience and cultural background.
Pursuant to the provisions of the German SE Participation Act (SEBG), the number of women and
men appointed as German employee representatives should be proportional to the number of
women and men working in the German companies. However, the Supervisory Board does not have
the right to select the employee representatives.
accordance with the legislation on the implementation of the Euro-
pean guideline as regards the disclosure of non-financial and diversity
information (CSR Directive) is also included. The objectives for the com-
position of the Supervisory Board can be found on our website at
> www.allianz.com/supervisory-board.
they have sufficient time for the audit of the annual and consolidated financial statements;
they can attend at least four, usually six ordinary Supervisory Board meetings per year, each of
which requires adequate preparation;
With respect to the Allianz SE mandate, the members shall ensure that
In addition to the mandatory mandate limitations and the GCGC recommendation for active
Management Board members of listed companies (max. two mandates), the common capital markets
requirements shall be considered.
Each member of the Supervisory Board must ensure that they have sufficient time to dedicate
to the proper fulfilment of the mandate of this Supervisory Board position.
4. Time of availability
It has to be considered that the possible emergence of conflicts of interests in individual cases cannot
generally be excluded. Potential conflicts of interest must be disclosed to the Chairman of the
Supervisory Board and will be resolved by appropriate measures.
Applying such definition, at least eight members of the Supervisory Board shall be independent. In
case shareholder representatives and employee representatives are viewed separately, at least four
of each should be independent.
regarding employee representatives, the mere fact of employee representation and the existence
of a working relationship with the company shall not in itself affect the independence of the
employee representatives.
6. Term of membership
members of the Supervisory Board of Allianz SE in office for more than 12 years shall not be
deemed independent.
The continuous period of membership for any member of the Supervisory Board should, as a rule,
not exceed 12 years.
Former Allianz SE Management Board members are subject to the mandatory corporate law cooling-
off period of two years.
Annual Report 2020 - Allianz Group
18
including the diversity concept. According to the assessment by the
Supervisory Board, all shareholder representatives, i.e., Ms. Boissard,
Ms. Bosse as well as Mr. Diekmann, Dr. Eichiner, Mr. Hainer and
Mr. Snabe, are independent within the meaning of the objectives (see
No. 1.3). With four female and eight male Supervisory Board members,
the current legislation for equal participation of women and men in
The Supervisory Board pursues these objectives, and thus also the
diversity concept, when nominating candidates for shareholder repre-
sentatives. As employee representatives are appointed according to
different national provisions, there is only limited potential influence
to the selection of employee representatives. The Supervisory Board of
Allianz SE is currently composed in accordance with these objectives,
- in order to provide the Board with the most diverse sources of experience and specialist
knowledge possible, the members of the Supervisory Board shall complement each other with
respect to their background, professional experience, and specialist knowledge."
For Allianz SE as a Societas Europaea, the agreement concerning the participation of employees in
Allianz SE provides the following: Allianz employees from different EU member states be
considered in the allocation of employee representatives' Supervisory Board seats.
- at least four of the members must, on the basis of their origin or function, represent regions or
cultural areas in which Allianz SE conducts significant business.
-the Supervisory Board shall be composed of at least 30% women and at least 30% men. The
representation of women is generally considered to be the joint responsibility of the shareholder
and employee representatives.
To promote an integrative cooperation among the Supervisory Board members, the Supervisory
Board strives for an adequate diversity with respect to gender, internationality, different occupational
backgrounds, professional expertise, and experience:
2. Diversity concept
at least one member with considerable experience in the fields of insurance and financial services;
at least one member with comprehensive expertise in the fields of accounting or auditing;
at least one member with comprehensive expertise in the field of digital transformation;
- specialist expertise or experience in other economic sectors;
managerial or operational experience.
- adequate expertise of the entire board with respect to investment management, insurance
actuarial practice, accounting, technology and employee engagement;
- familiarity of members in their entirety with the insurance and financial services sector;
In addition to the expertise-related requirements for the individual members, the following shall
apply with respect to the expertise and experience of the entire Supervisory Board:
1. Profile of skills and expertise for the entire Supervisory Board
II. Requirements for the entire Supervisory Board
According to regulatory provisions, no more than two former Allianz SE Management Board
members shall be members of the Supervisory Board.
7. Former Allianz SE Management Board members
former members of the Allianz SE Board of Management shall not be deemed independent
during the mandatory corporate law cooling-off period.
To further specify the definition of independence, the Supervisory Board of Allianz SE states the
following:
The GCGC defines a person as independent who, in particular, does not have any business or
personal relations with Allianz SE or its executive bodies, a controlling shareholder, or an
enterprise associated with the latter, which may cause a substantial and not merely temporary
conflict of interest.
-Approval of the assumption of other mandates
by Board of Management members
- Long-term succession planning for the Board of
Management
- Conclusion, amendment, and termination of service
contracts of Board of Management members
unless reserved for the plenary session
compensation of Board of Management members
- Preparation of plenary session resolutions on the
compensation system and the overall
- Preparation of the appointment of Board of
Management members
- Initial review of the Risk Report and other risk-
related statements in the annual financial
statements and management reports of Allianz SE
and the Allianz Group, informing the Audit
Committee of the results of such reviews
- Monitoring of the effectiveness of the risk
management system
- Monitoring of the general risk situation and special
risk developments in the Allianz Group
- Monitoring of the audit procedures, including
the independence of the auditor and the services
additionally rendered, awarding of the audit
contract and determining the focal points of the
audit
- Monitoring of the financial reporting process,
the effectiveness of the internal control and audit
system and legal and compliance issues
- Initial review of the annual Allianz SE and consoli-
dated financial statements, management reports
(including Risk Report) and the dividend proposal,
review of half-yearly reports or, where applicable,
quarterly financial reports or statements
- Preparation of the efficiency review of the
Supervisory Board
pursuant to § 161 "Aktiengesetz" (German Stock
Corporation Act) and checks on corporate
governance
- Preparation of the Declaration of Conformity
-Approval of certain transactions which require the
approval of the Supervisory Board, e.g., capital
measures, acquisitions, and disposals of
participations
Responsibilities
- Setting of concrete objectives for the composition
of the Supervisory Board
- Establishment of selection criteria for shareholder
representatives on the Supervisory Board in
compliance with the Code's recommendations on
the composition of the Supervisory Board
- Selection of suitable candidates for election to the
Supervisory Board as shareholder representatives
- Regular exchange regarding technological
developments
3. Independence
knowledge of accounting and risk management basics.
adequate expertise in the regulatory provisions material for Allianz SE (supervisory law,
including Solvency II regulation, corporate and capital markets law, corporate governance);
ability to assess the business risks;
adequate expertise in the insurance and finance sector or comparable relevant experience and
expertise in other sectors;
- adequate expertise in all business areas;
The members of the Supervisory Board must have the expertise and experience necessary for a
diligent and autonomous exercise of the Allianz SE Supervisory Board mandate, in particular for
exercising control of and giving advice to the Board of Management as well as for the active support
of the development of the company. This comprises in particular:
The members of the Supervisory Board must be proper as defined by the regulatory provisions. A
person is assumed to be proper as long as no facts are to be known which may cause impropriety.
Therefore, no personal circumstances shall exist which - according to general experience - lead to the
assumption that the diligent and orderly exercise of the mandate may be affected (in particular,
administrative offenses or violation of criminal law, esp. in connection with commercial activity).
2. Fitness
1. Propriety
- Three shareholder representatives
(in addition to Jim Hagemann Snabe:
Michael Diekmann, Dr. Friedrich Eichiner)
- Two employee representatives (Gabriele
Burkhardt-Berg, Jürgen Lawrenz)
I. Requirements relating to the individual members of the Supervisory Board
"The aim of Allianz SE's Supervisory Board is to have members who are equipped with the necessary
skills and competence to properly supervise and advise Allianz SE's management. Supervisory Board
candidates should possess the professional expertise and experience, integrity, motivation and
commitment, independence, and personality required to successfully carry out the responsibilities of a
Supervisory Board member in a financial services institution with international operations.
Objectives of Allianz SE's Supervisory Board regarding its composition
OBJECTIVES OF THE SUPERVISORY BOARD
REGARDING ITS COMPOSITION; DIVERSITY CONCEPT
The objectives for the composition of the Supervisory Board in the ver-
sion of June 2020, as specified to implement legal requirements and a
recommendation by the Code, are set out below. In addition to the
skills profile for the overall Supervisory Board, the diversity concept in
B_Corporate Governance
17
Annual Report 2020 - Allianz Group
- Support of the Supervisory Board in monitoring the
implementation of the Board of Management's
technology and innovation strategy
- In-depth monitoring of the Board of Management's
technology and innovation strategy
These objectives take into account the regulatory requirements for the composition of the Supervisory
Board as well as the relevant recommendations of the German Corporate Governance Code
("GCGC"). In addition to the requirements for each individual member, a profile of skills and expertise
("Kompetenzprofil") as well as a diversity concept are provided for the entire Supervisory Board.
- Chairman: appointed by the Supervisory
Board (Jim Hagemann Snabe)
Annual Report on the internet: www.allianz.com/annualreport - Date of publication: 5 March 2021
INDEPENDENT PRACTITIONER'S REASONABLE ASSURANCE REPORT
BELOW FOR THOSE V3 an
PEOPLE FACT BOOK 2019
ALLIANZ
TRANSFORM
We
WE!
OUTPERFOR
We
ALLIANZ PEOPLE FACT BOOK 2020
www.allianz.com/key-indicators-share
www.allianz.com/key-indicators-group
Allianz share key indicators:
Allianz Group key indicators:
You can find on our website informative overviews of the past
years:
ALLIANZ AT A GLANCE
www.allianz.com/sustainability
Date of publication: 29 April 2021
The Allianz Group Sustainability Report "Collaborating for a
Sustainable Future" covers our contribution to the environment,
society and economy. It provides full details of our sustainability
strategy, approach and progress in 2020 as well as an outlook
for 2021.
Further information on the definition of our Alternative Perfor-
mance Measures and their components, as well as the basis of
calculation adopted
www.allianz.com/results
Allianz ⑪
PERFORMANCE MEASURES
The People Fact Book is the official and most comprehensive
report on our workforce facts and figures, highlighting major HR
achievements over the past year and revealing the outlook for
Date of publication: 24 March 2021
Front page design: hw.design GmbH - Photography: Andreas Pohlmann - Typesetting: Produced in-house with SmartNotes
Allianz SE - Königinstrasse 28 - 80802 Munich - Germany - Phone +49 89 3800 0 - www.allianz.com
1_The German Securities Trading Act ("Wertpapierhandelsgesetz") obliges issuers to announce immediately any information which may have a substantial price impact. Therefore
we cannot exclude that we have to announce key figures related to quarterly and fiscal year results ahead of the dates mentioned above. As we can never rule out changes
of dates, we recommend checking them on the internet at www.allianz.com/financialcalendar.
4 May 2022
10 November 2021
18 February 2022
4 March 2022
12 May 2021
6 August 2021
5 May 2021
Annual General Meeting
Annual Report 2021
Financial Results 2021
Financial Results 3Q
Financial Results 2Q/Interim Report 6M
Financial Results 1Q
Annual General Meeting
Important dates for shareholders and analysts¹
Financial calendar
www.allianz.com/hrfactbook
2021.
GUIDELINE ON ALTERNATIVE
for a sustainable
future
Collaborating
Evaluation of the internal control system regarding the prepara-
tion process of the Non-financial Report.
Obtaining an understanding of the structure of the sustainability
organization and of the stakeholder engagement.
Inquiries of personnel involved in the preparation of the Non-fi-
nancial Report regarding the preparation process, the internal
control system relating to this process and selected disclosures in
the Non-financial Report.
Within the scope of our assurance engagement, we performed
amongst others the following assurance procedures and further activ-
ities:
A reasonable assurance engagement involves performing proce-
dures to obtain sufficient appropriate evidence whether the Non-fi-
nancial Report has been prepared in accordance with §§ 315c in con-
junction with 289c to 289e HGB. The assurance procedures selected
depend on the practitioner's judgment.
We conducted our assurance engagement in accordance with the
International Standard on Assurance Engagements (ISAE) 3000 (Re-
vised): Assurance Engagements other than Audits or Reviews of Histor-
ical Financial Information, issued by the IAASB. This Standard requires
that we plan and perform the assurance engagement to obtain rea-
sonable assurance whether the Company's Non-financial Report for
the period from 1 January to 31 December 2020 has been prepared,
in all material aspects, in accordance with §§ 315c in conjunction with
289c to 289e HGB.
Within the scope of our engagement we did not perform an eval-
uation on external sources of information or expert opinions, referred
to in the Non-financial Report.
Our responsibility is to express a reasonable assurance conclusion on
the information in the Non-financial Report based on the assurance
engagement we have performed.
PRACTITIONER'S RESPONSIBILITY
ments.
Our audit firm applies the national legal requirements and pro-
fessional standards - in particular the Professional Code for German
Public Auditors and German Chartered Auditors ["Berufssatzung für
Wirtschaftsprüfer und vereidigte Buchprüfer": "BS WP/VBP"] as well as
the Standard on Quality Control 1 published by the Institut der
Wirtschaftsprüfer [Institute of Public Auditors in Germany] (IDW): Re-
quirements to quality control for audit firms [IDW Qualitätssicher-
ungsstandard 1: Anforderungen an die Qualitätssicherung in der
Wirtschaftsprüferpraxis - IDW QS 1] - and accordingly maintains a
comprehensive system of quality control including documented poli-
cies and procedures regarding compliance with ethical requirements,
professional standards and applicable legal and regulatory require-
We have complied with the German professional provisions regarding
independence as well as other ethical requirements.
INDEPENDENCE AND QUALITY CONTROL OF THE
AUDIT FIRM
This responsibility of the Company's executive directors includes
the selection and application of appropriate methods of non-financial
reporting as well as making assumptions and estimates related to in-
dividual non-financial disclosures which are reasonable in the circum-
stances. Furthermore, the executive directors are responsible for such
internal control as they have considered necessary to enable the prep-
aration of a Non-financial Report that is free from material misstate-
ment whether due to fraud or error.
RESPONSIBILITIES OF THE EXECUTIVE DIRECTORS
The executive directors of the Company are responsible for the prepa-
ration of the Non-financial Report in accordance with §§ 315c in con-
junction with 289c to 289e HGB.
We have performed a reasonable assurance engagement on the com-
bined separate non-financial report pursuant to §§ [Articles] 341a Abs.
[paragraph] 1a and 341j Abs. 4 in conjunction with 289b Abs. 3 and
315b Abs. 3 HGB ["Handelsgesetzbuch": "German Commercial Code"]
of Allianz SE, Munich, (hereinafter the "Company") for the period from
1 January to 31 December 2020 (hereinafter the Non-financial Re-
port").
To Allianz SE, Munich
Independent Practitioner's Report on a
Reasonable Assurance Engagement on Non-
financial Reporting
Inspection of processes for collecting, controlling, analyzing and
aggregating selected data at specific sites of the Company.
Identification of the likely risks of material misstatement of the
Non-financial Report.
Analytical evaluation of selected disclosures in the Non-financial
Report.
Obtaining an understanding of the work of external experts
providing data as well as evaluation of competence, capabilities
and objectivity of these external experts.
Evaluation of the presentation of the information in the Non-finan-
cial Report.
Allianz ⑪
ALLIANZ SUSTAINABLLITY REPORT 2020
Further Allianz publications
Annual Report 2020 - Allianz Group
190
(German Public Auditor)
Wirtschaftsprüfer
Hendrik Fink
E Further Information
(German Public Auditor)
PricewaterhouseCoopers GmbH
Wirtschaftsprüfungsgesellschaft
Munich, 22 February 2021
The report is not intended for any third parties to base any (finan-
cial) decision thereon. Our responsibility lies only with the Company.
We do not assume any responsibility towards third parties.
INTENDED USE OF THE ASSURANCE REPORT
We issue this report on the basis of the engagement agreed with the
Company. The assurance engagement has been performed for pur-
poses of the Company and the report is solely intended to inform the
Company about the results of the reasonable assurance engagement.
E_Further Information
189
Annual Report 2020 - Allianz Group
In our opinion, the Non-financial Report for the period from 1 January
to 31 December 2020 has been prepared, in all material aspects, in
accordance with §§ 315c in conjunction with 289c to 289e HGB.
Richard Burger
Wirtschaftsprüfer
This is a translation of the German Annual Report of Allianz Group. In case of any divergences, the German original is legally binding.
ASSURANCE CONCLUSION
Bosse
tions abroad required by Allianz in individual cases may also give rise
to additional pension entitlements.
SENSITIVITY OF TOTAL COMPENSATION
The variable remuneration is designed to help achieve the operational
targets and to reward sustainable performance. Therefore, payout of
almost two thirds of the annual variable compensation will not occur
for a period of four years; such payout is subject to sustainability
assessment adjustments.
A failure to meet targets may result in a maximum reduction of
the variable compensation to zero, with the overall payout being
capped: The sum of variable compensation and base salary payout
including pension service cost, which is paid in relation to one financial
performance year, will be capped at a maximum amount of
€ 6,000 thou for a regular member of the Board of Management and
at € 10,000 thou for the Chairman of the Board of Management:
28
Annual Report 2020 - Allianz Group
Other
characteristics
Shareholding requirement
⚫ Cap incl. pension contribution: CEO: 10,000, RBM:
6,000
CEO: 6,540
RBM: 3,739
Total compensation
15% of target compensation (50% of base salary)
CEO: 853
RBM: 488
Members of the Board of Management may have additional
pension entitlements under former pension plans based on previous
positions in the Allianz Group or due to membership of the Board of
Management prior to 2015. Payments of social insurance contribu-
+ Pension contribution
CEO: 5,687
RBM: 3,251
100%
☑ Sustainability check (100% down to 0)
(peer index)
4-year relative
0-272%2
performance
☑ share price ☑ performance
4-year
Annual bonus
target
achievement
factor
Individual
contribution factor
0-150%
CEO: 2,559
RBM: 1,463
Severance payment ≤ 2 x target compensation
☑
Apart from cases of occupational or general disability for medical
reasons, the earliest age a pension can be drawn is 62. Should board
membership cease before the retirement age is reached, accrued
pension rights are maintained if vesting requirements are met.
Additionally, a reduction or cancellation of variable remuneration
may occur if the supervisory authority (BaFin) requires this in accord-
ance with its statutory powers.
10,058
LTI payout at vesting based on:
⚫RSUS x share price at vesting (€ 250)
2,515
⚫TSR relative performance factor: 2 x (TSR Allianz: 45% - TSR Stoxx Europe 600 Insurance: 40%) + 100%
Payout
110
2,766
LTI payout: Performance remains below expectation (scenario 2)
Illustrative example for RBM
%
Number RSUs
€ thou
Initial grant based on:
PENSION CONTRIBUTION AND SIMILAR BENEFITS
To provide competitive and cost-effective retirement and disability
benefits, company contributions to the defined-contribution pension
plan "My Allianz Pension" are invested with a guarantee for the contri-
butions paid, but no further interest guarantee. Each year the Supervi-
sory Board decides whether a budget is provided and, if so, to what
extent. The current pension contribution generally represents 15%
of the target compensation of the board members.
⚫LTI target
1,463
90
1,317
⚫RSU grant (listed share price: € 200, for the calculation of the allocation relevant share price: € 160 (= reduced by the net present value of estimated
future dividends of € 40))
8,229
LTI payout at vesting based on:
•RSUS x share price at vesting (€ 190)
1,564
•TSR relative performance factor: 2 x (TSR Allianz: 15% - TSR Stoxx Europe 600 Insurance: 40%) +100%
Payout
50
782
Malus/Clawback
Variable remuneration components may not be paid, or payment may
be restricted, in the case of a significant breach of the Allianz Code
of Conduct or regulatory Solvency II policies or standards, including
risk limits. In the same way, variable remuneration components
already paid may be subject to a clawback for three years after pay-
out.
⚫LTI allocation value: annual bonus achievement factor applied to LTI target
Group result
CEO: 1,422
RBM: 813
for target level
Support of the Group's strategy: The design of variable compen-
sation and in particular of performance targets reflects the busi-
ness strategy and sustainable long-term development of the
Allianz Group.
KEY PRINCIPLES OF THE BOARD REMUNERATION
Remuneration is designed to be appropriate compared to peers, given
the Allianz Group's range of business activities, operating environment,
and business results achieved. The aim is to ensure and promote sus-
tainable and value-oriented management of the company that is in
line with our corporate strategy. The key principles of Board of Man-
agement remuneration are as follows:
Remuneration of the Allianz SE Board of
Management
All information provided here concerning the remuneration of
the Allianz SE Board of Management as well as some additional
information can also be found on our remuneration website at
› www.allianz.com/remuneration.
The report has been prepared in accordance with the require-
ments of the German Commercial Code, the applicable German
Accounting Standard No. 17, and the International Financial Report-
ing Standards (IFRS). It also takes into account the relevant regulatory
provisions, the recommendations of the German Corporate Govern-
ance Code, and, with regard to the target achievement, the
requirements of the Act implementing the Second Shareholders'
Rights Directive (ARUG II) dated 12 December 2019.
The remuneration report describes the remuneration structure and
arrangements for the Board of Management and the Supervisory
Board of Allianz SE.
B_Corporate Governance
REMUNERATION REPORT
Annual Report 2020 - Allianz Group
22
Under the Allianz Sustained Performance Plan (ASPP), Restricted
Stock Units (RSUs) - i.e. virtual Allianz shares - are granted to sen-
ior management of the Allianz Group worldwide as a stock-based
remuneration component. The conditions for these RSUs contain
change-of-control clauses, which apply when a majority of the vot-
ing share capital in Allianz SE is directly or indirectly acquired by
one or more third parties who do not belong to the Allianz Group,
and which provide for an exception from the usual vesting and ex-
ercise periods. In line with the relevant general conditions, the
company will release the RSUs to plan participants on the day of
the change of control, without observing any vesting period that
would otherwise apply. The cash amount payable per RSU must
equal or exceed the average market value of the Allianz share and
the price offered per Allianz share in a preceding tender offer. By
providing for the non-application of the vesting period in the event
of a change of control, the terms take into account the fact that
the conditions influencing the share price are substantially differ-
ent when there is a change of control.
The framework agreements between Allianz SE and the subsidiaries
of various car manufacturers relating to the distribution of car in-
surance by the respective car manufacturers each include a clause
under which each party has an extraordinary termination right in
case there is a change of control of the other party.
Bilateral credit agreements in some cases provide for termination
rights in the event of a change of control, mostly defined as the
acquisition of at least 30% of the voting rights within the meaning
of §29(2) of the German Takeover Act ("Wertpapiererwerbs- und
Übernahmegesetz - WpÜG"). Where such termination rights are
exercised, the respective credit lines have to be replaced by new
credit lines under conditions then applicable.
Allianz SE is also party to various bancassurance distribution
agreements for insurance products in various regions. These distri-
bution agreements normally include a clause under which the par-
ties have an extraordinary termination right in the event of a
change of control of the other party's ultimate holding company.
Shareholder agreements and joint ventures to which Allianz SE is
a party often contain change-of-control clauses that provide, as
the case may be, for the termination of the agreement, or for put
or call rights that one party can exercise with regard to the joint
venture or the target company, if there is a change of control of
the other party.
Alignment of pay and performance: The performance-based vari-
able component of the board members' remuneration forms a sig-
nificant portion of the overall remuneration, corresponding to 70%
of the target compensation.
Our reinsurance contracts, in principle, include a clause under
which both parties to the contract have an extraordinary termina-
tion right, if and when the counterparty merges with another entity
or its ownership or control situation changes materially. Agree-
ments with brokers regarding services connected with the pur-
chase of reinsurance cover also provide for termination rights in
case of a change of control. Such clauses are standard market
practice.
The following essential agreements of the company are subject to a
change-of-control condition following a takeover bid:
COMPENSATION AGREEMENTS PROVIDING FOR
TAKEOVER SCENARIOS
ESSENTIAL AGREEMENTS OF ALLIANZ SE WITH
CHANGE-OF-CONTROL CLAUSES AND
Domestic or foreign banks that are majority-owned by Allianz SE
may buy and sell Allianz shares for trading purposes (§71 (1) No. 7 and
(2) AktG) under an authorization of the General Meeting valid until
8 May 2023. The total number of shares acquired thereunder, together
with treasury shares held by Allianz SE or attributable to it under §§71a
et seq. AktG, shall at no time exceed 10% of the share capital of
Allianz SE.
shares corresponding to up to 10% of the lower of (i) the share capital
at the moment of the shareholder resolution and (ii) the share capital
at the moment of the buy-back, and to use those shares for other pur-
poses (§71 (1) No. 8 AktG). Together with other treasury shares that are
held by Allianz SE, or which are attributable to it under §§71a et seq.
AktG, such shares may not exceed 10% of the share capital at any time.
The shares acquired pursuant to this authorization may be used, under
exclusion of the shareholders' subscription rights, for any legally ad-
missible purposes, in particular those specified in the authorization.
Furthermore, the acquisition of treasury shares under this authoriza-
tion may also be carried out using derivatives, provided such deriva-
tives do not relate to more than 5% of the share capital.
B_Corporate Governance
21
Annual Report 2020 - Allianz Group
Under an authorization by the General Meeting on 9 May 2018,
the Board of Management may, until 8 May 2023, buy back Allianz
The company's share capital is conditionally increased by up to
€ 250,000,000 (Conditional Capital 2010/2018). This conditional capi-
tal increase will only be carried out to the extent that the holders of
convertible bonds, bonds with warrants, convertible participation
rights, participation rights, and subordinated financial instruments is-
sued against cash by Allianz SE or its subsidiaries, based on the author-
izations granted by the General Meeting on 5 May 2010 or
9 May 2018, exercise their conversion or option rights, or to the extent
that conversion obligations from such bonds are fulfilled, and to such
extent that treasury shares or shares from authorized capital are not
used for such purpose.
Up to a total of € 15,000,000 (Authorized Capital 2018/11): The
shareholders' subscription rights are excluded. New shares may
only be issued to employees of Allianz SE and its Group compa-
nies.
Up to a total of € 334,960,000 (Authorized Capital 2018/1): In case
of a capital increase against cash contribution, the Board of Man-
agement may exclude the shareholders' subscription rights for
these shares with the consent of the Supervisory Board (i) for frac-
tional amounts, (ii) in order to safeguard the rights pertaining to
holders of convertible bonds or bonds with warrants, including
mandatory convertible bonds, and (iii) in the event of a capital in-
crease of up to 10%, if the issue price of the new shares is not sig-
nificantly below the stock market price. The Board of Manage-
ment may furthermore exclude the shareholders' subscription
rights with the consent of the Supervisory Board in the event of a
capital increase against contributions in kind.
It may increase the company's share capital on or before
8 May 2023, with the approval of the Supervisory Board, by issuing
new registered no-par value shares against contributions in cash
and/or in kind, on one or more occasions:
-
Sustainability of performance and alignment with shareholder in-
terests: A major part of the variable remuneration reflects longer-
term performance, with deferred payout (64%), and is linked to the
absolute and relative performance of the Allianz share.
DETERMINATION OF THE REMUNERATION SYSTEM
The Board of Management's remuneration is decided upon by the
entire Supervisory Board, based on proposals prepared by the Super-
visory Board's Personnel Committee. If required, the Supervisory
Board may seek outside advice from independent external consult-
ants. The Personnel Committee and the Supervisory Board consult
with the Chairman of the Board of Management, in assessing the per-
formance and remuneration of Board of Management members. The
Chairman of the Board of Management is generally not involved in the
discussion about his own remuneration. The Supervisory Board
designs the remuneration system for the members of the Board of Man-
agement in accordance with the requirements of the German Stock
Corporation Act (AktG) in its currently valid version as well as with
regulatory requirements and the recommendations of the German
Corporate Governance Code, while ensuring clarity and comprehensi-
bility. Feedback from investors is also considered.
Modifier
• Fix
CEO*: 1,706
RBM*: 975
Long-term
incentive
(LTI)1
45%
70%
variable
64%
Annual bonus
25%
Base salary
30%
fix
30%
Target
compensation
in € thou
% of target
compensation
36%
cash
B Corporate Governance
23
Annual Report 2020 - Allianz Group
The structure of the remuneration system of the Board of Manage-
ment became effective on 1 January 2019. It was approved by
Allianz SE's Annual Shareholder Meeting on 8 May 2019 on the basis
of the former § 120 (4) AktG, with a majority vote of 92%.
REMUNERATION STRUCTURE
This comparison is based on the total direct compensation of a member
of the Board of Management and the average direct compensation of
an employee of the Allianz workforce in Germany. The Supervisory
Board's decision in December is based on the factor resulting from this
comparison for the previous fiscal year. For the fiscal year 2019, the
factor for the Chairman of Board of Management to employee is "77"
and the factor regular board member to employee is "42". For the fiscal
year 2020, the respective factor for the Chairman of Board of Manage-
ment to employee is "66" and the factor regular board member to
employee is "36".
VERTICAL APPROPRIATENESS
The horizontal comparison has shown that the ratio of the Chair-
man of the Board of Management's target compensation to that of a
regular member of the Board of Management is equivalent to a factor
of 1.75, whereas the average factor in the DAX is 1.96. Furthermore,
Allianz is well above average relative to size (revenue, number of
employees, and market capitalization) compared to the DAX compa-
nies, while the level of target compensation for Allianz SE's Chairman
of the Board of Management is average. For 2021, it was therefore
decided to propose to the Annual Shareholders' Meeting to adjust the
Chairman of the Board of Management's target compensation
> Outlook for 2021.
The Supervisory Board regularly benchmarks the Allianz SE Board of
Management's remuneration against other DAX companies and
selected international competitors, taking into account the situation of
the Allianz Group as well as its longer-term performance, relative size,
complexity, and global reach.
HORIZONTAL APPROPRIATENESS
The structure, weighting, and level of each remuneration compo-
nent should be adequate and appropriate.
Based on the remuneration system, the Supervisory Board determines
the target total compensation and regularly reviews the appropriate-
ness of the remuneration. This is based on both a horizontal compari-
son (i.e., with peer companies) and a vertical comparison (in relation
to Allianz employees). Again, the Supervisory Board's Personnel Com-
mittee develops respective recommendations, if necessary with the
assistance of external consultants.
DETERMINATION OF AND ADEQUACY OF THE BOARD
OF MANAGEMENT REMUNERATION
⚫RSU grant (listed share price: € 200, for the calculation of the allocation relevant share price: € 160 (= reduced by the net present value of estimated
future dividends of € 40))
1,609
110
•LTI allocation value: annual bonus achievement factor applied to LTI target
B_Corporate Governance
Non-financial targets
✓ Customer and employee satisfaction
✓ Individual and overall strategic target
✓ Leadership and behavioral aspects:
。 Social responsibility
• Diversity
。 Sustainability / climate protection
Quantitative and qualitative targets
dependent on divisional responsibility:
✓ Business-related division
responsibilities: profitability and
productivity
✓ Functional focus: key responsibilities
GROUP FINANCIAL TARGETS
Individual contribution factor
0.8-1.2
The Group financial targets are based on equally weighted targets for
Group operating profit and Group net income attributable to share-
holders. Adjustments are only applied to acquisitions and disposals
that account for more than 10% of the Group's operating profit or net
income attributable to shareholders or have a value-adding effect
from a risk management perspective (e.g. portfolio transfers) and were
not yet known at the time the plan was prepared. This regulation is in-
tended to prevent meaningful transactions from having a negative
impact on the remuneration of the Management Board. Operating
profit highlights the underlying performance of ongoing core oper-
ations. Net income attributable to shareholders is the profit after tax
and non-controlling interests (minorities). Furthermore, the net income
forms the basis for the dividend payout and for the return on equity cal-
culation. Both key performance indicators (KPIs) are important steer-
ing parameters for the Allianz Group and therefore reflect the level
of implementation of the Group's strategy.
The minimum, target, and maximum values for the Group finan-
cial targets are set annually by the Supervisory Board. These are doc-
umented for the respective next fiscal year and published ex-post in
the compensation report.
INDIVIDUAL CONTRIBUTION FACTOR (ICF)
The Group financial target achievement is multiplied by the ICF for
each board member. The ICF is based on an assessment by the
Allianz SE Supervisory Board, resting upon KPIs reflecting the respec-
tive board member's area of responsibility and his or her personal
contribution.
The ICF takes into account each board member's individual
contribution to the implementation of the business strategy.
Since the performance is determined without a specified
weighting, the ICF covers a narrow range of 0.8 to 1.2. The concept of
non-specified weighting allows the Supervisory Board to react appro-
priately to changes in priorities during the year.
Business division targets: For board members with business-
related division responsibilities, the contribution to the financial
performance considers various indicators of profitability (e.g.,
operating profit and net income) and productivity (e.g., expense
ratio) for the respective business division. For board members with
a functional focus, division-specific performance targets are deter-
mined based on their key responsibilities and qualitatively
assessed.
Annual Report 2020 - Allianz Group
25
B_Corporate Governance
Non-financial targets: Non-financial targets take into account cus-
tomer satisfaction (e.g., Net Promoter Score (NPS¹)), employee
engagement (e.g., Allianz Engagement Survey) and leadership
quality, including strategic priorities. The assessment of the individ-
ual leadership quality also includes a review of behavioral aspects,
such as customer orientation, collaborative leadership, entrepre-
neurship, and trust (e.g., corporate social responsibility, integrity,
diversity, and sustainability as measured by the reduction of the
carbon footprint, greenhouse gas reduction, and a step-by-step
plan to achieve net-zero compliant asset allocation until 2050 at
the latest). For further information, please refer to the Combined
Separate Non-Financial Report for the Allianz Group and
Allianz SE.
Variable remuneration components
The performance-related variable remuneration consists of an
annual bonus and a long-term compensation (Long-Term Incentive
-LTI).
ANNUAL BONUS
The Group's financial target achievement is limited to a maximum
of 150% and can drop to zero.
shareholders (50%)
attributable to ☑
+
Eichiner
⚫ CEO: 2 x Base salary
⚫RBM: 1x Base salary
• Malus
(up to 100%)
⚫ Clawback
(up to 3 years)
Total stock exposure³
⚫ CEO: 800% of base salary
RBM: 700% of base salary
* CEO = Chief Executive Officer, RBM = regular Board member.
1_For simplicity reasons, the LTI percentage as well as the LTI target amount are based on target allocation values.
2 The overall compensation cap of € 10,000 thou | € 6,000 thou including pension contributions limits the effective payout of the LTI to a maximum of 255 % (CEO) and 272% (RBM), respectively.
3_Shareholding requirement plus LTI at full run-rate.
REMUNERATION COMPONENTS AND TARGET
SETTING PROCESS
BASE SALARY
The base salary, which is not performance-related, is paid in twelve
equal monthly installments.
PERQUISITES
Perquisites mainly consist of contributions to accident and liability
insurances, tax consultant fees (if in the interest of Allianz) and the
provision of a company car. Perquisites are not linked to performance.
Each member of the Board of Management is responsible for pay-
ing the income tax due on these perquisites. The Supervisory Board
regularly reviews the level of perquisites; a contractual annual cap
applies. If an appointment to the Board of Management requires a
change of residence, relocation expenses are reimbursed to an ap-
propriate extent.
VARIABLE REMUNERATION
Variable remuneration aims for balance between short-term perfor-
mance, longer-term success and sustained value creation; the pay-
out of two-thirds of this compensation components are deferred. It is
designed to balance risk and opportunity while promoting the sus-
tainable implementation of the Allianz Group's strategy. The Super-
visory Board ensures that the targets underlying the variable com-
pensation are challenging, sustainable and ambitious.
Target achievement factor to determine the variable
remuneration
In line with the overarching strategic objective "simplicity wins", the cal-
culation of variable remuneration follows a simple system. The annual
bonus and LTI allocation are based on only two Group financial targets
for the relevant fiscal year: operating profit and net income attributa-
ble to shareholders, each at 50%. The resulting target achievement is
adjusted by an individual contribution factor (ICF) in the range of 0.8
to 1.2, which reflects both the results of the business division and the
performance of the individual board member. If targets are not met,
the variable compensation can be reduced to zero. If targets are sig-
nificantly exceeded, the target achievement is limited to 150%.
24
Annual Report 2020 - Allianz Group
Operating profit
(50%)
Target achievement factor (maximum 150 %) to calculate:
⚫ Annual bonus and
LTI allocation value
Net income,
The annual bonus is derived by multiplying the target achievement
factor by the target amount for the annual bonus and is paid out in
cash after the end of the relevant fiscal year, with payment limited to
a maximum of 150% of the target amount.
The Board of Management is authorized to issue shares as well as to
acquire and use treasury shares as follows:
LONG-TERM INCENTIVE (LTI)
LTI key features
n+2
n+3
Actual share price in March n+1
Payout:
n+4
n+5
Actual share price in March n+5, adjusted
by the relative performance and the
sustainability assessment
Sustainability assessment: Prior to the payout of each LTI tranche,
the Supervisory Board determines, following a preliminary assess-
ment by the Personnel Committee and the external auditor,
whether there are any sustainability-related concerns regarding a
full payout. If so, payment of the tranche may be canceled in full
or in part.
Subject of the sustainability assessment are:
-
Compliance breaches,
Balance sheet issues such as reserve strength, solvency,
indebtedness, and ratings,
KPIs entailed in the individual board members' targets, such as
NPS, employee satisfaction, and climate targets.
n+1
The assessment is made applying a comparable basis, i.e., any reg-
ulatory changes, changes in accounting regulations, or changes in
calculation methods for the KPIs in question are taken into ac-
count.
Outstanding RSU holdings are forfeited, should a board member
leave at his/her own request or be terminated for cause.
Annual Report 2020 - Allianz Group
27
B_Corporate Governance
Illustrative Examples
LTI payout: Performance exceeds expectation (scenario 1)
Illustrative example for RBM
Initial grant based on:
⚫LTI target
%
Number RSUs
€ thou
1,463
Allianz share performance, payout, and cap: Following the end of
the four-year contractual vesting period, the granted RSUs are set-
tled in cash based on the ten-day average Xetra closing price of
the Allianz SE share following the annual financial media confer-
ence in the year the respective RSU plan vests, multiplied by the
relative TSR performance factor and adjusted by the sustainability
assessment, if necessary. The relevant share price is capped at
200% of the grant price. Likewise, the relative TSR performance
factor is capped at a maximum of 200%. Taking into account the
overall compensation cap (€ 6,000 thou for a regular board mem-
ber and € 10,000 thou for the Chairman of the Board of Manage-
ment), the LTI payout in relation to the LTI target - which deviates
from the individual LTI component caps - is limited to 255% for the
Chairman of the Board of Management and 272% for a regular
board member. See also > Sensitivity of total compensation.
Four-year performance of Allianz share:
。 Absolute share price development
o Relative to STOXX Europe 600 Index
Grant:
Performance year (n)
LTI allocation value = LTI target multiplied with the annual bonus target achievement factor (maximum 150%)
4-year
Grant of virtual shares, so-called Restricted Stock Units
Share price development Allianz
(Factor, at pay-out, maximum 200%):
☑
4-year
relative performance Allianz vs. STOXX Europe
600 Insurance Index
(Factor, at pay-out, maximum 200%):
Payout
Sustainability assessment (100% to 0%)
Grant and contractual vesting period: The LTI is granted annually
in the form of virtual Allianz shares, so-called restricted stock units
(RSUs). The number of RSUs to be granted corresponds to the LTI
allocation amount divided by the allocation value of an RSU at
grant:
-
The LTI allocation amount is derived by multiplying the LTI tar-
get amount by the annual bonus achievement factor and
capped at 150% of the target level.
The RSU allocation value is based on the ten-day-average
Xetra closing price of the Allianz stock following the annual
financial media conference². As RSUs are virtual stock without
dividend payments, the relevant share price is reduced by the
net present value of the expected future dividend payments
during the four-year contractual vesting period.
The LTI grant is followed by a contractual vesting period of four
years. After that period, the LTI amount to be paid is determined
based on the relative performance of the Allianz share, the
relevant share price, and the results of the sustainability
assessment.
1_Net Promoter, NPS®, NPS Prism, and the NPS-related emoticons are registered trademarks of Bain & Company, Inc.,
Satmetrix Systems, Inc., and Fred Reichheld. Net Promoter ScoreSM and Net Promoter SystemSM are service marks of Bain
& Company, Inc., Satmetrix Systems, Inc., and Fred Reichheld.
2_For accounting purposes, the determination of the fair value of RSUs is based on an option pricing model taking into
account additional input parameters, including the term structure of interest rates and the expected relative performance
of the Allianz share price compared to the peer index. For the latter, simulation techniques are applied at the valuation
date to determine the volatility of the Allianz stock, the volatility of the peer index, their correlation, and the expected
dividends. The value of the RSUs used for the board members compensation may deviate from this IFRS value, as a
simplified calculation method was applied to increase transparency and traceability.
26
26
Annual Report 2020 - Allianz Group
B_Corporate Governance
Relative performance versus peers: Besides the absolute share-
price development, the LTI payout takes the relative performance
of the Allianz share into account. The total shareholder return
(TSR) of the Allianz share is benchmarked against the TSR of the
STOXX Europe 600 insurance index by reflecting the relation of the
total performance of the Allianz share ("Allianz TSR") and the total
performance of the STOXX Europe 600 insurance index ("Index
TSR") between the start and end of the four-year contractual vest-
ing period. The payout will be based on the TSR performance fac-
tor which is calculated as follows:
At the end of the contractual vesting period the difference
between the Allianz TSR and the Index TSR is determined in
percentage points; the result is multiplied with "2": As the com-
parison with competitors and the market is of outstanding im-
portance, the outperformance/underperformance is weighted
twofold.
To determine the factor, 100 percentage point are added to
the result. Example: 1 percentage point outperformance
results in a relative performance factor of 102%, 1 percentage
point underperformance results in a relative performance fac-
tor of 98%.
In order to avoid incentivizing excessive risk-taking, the relative TSR
performance factor is limited: it can vary between zero (for underper-
formance of the index by -50 percentage points or lower) and 200%
(for outperformance of the index by + 50 percentage points or higher).
Equity-based compensation
LTI
Annual bonus
The long-term, share-based compensation component makes up the
largest portion of variable compensation. It promotes alignment with
shareholders and reflects the sustainable implementation of the com-
pany's long-term strategy. The LTI is based on the performance in
absolute and relative terms (i.e., versus competitors) of the Allianz
share. Furthermore, the long-term development of KPIs is reflected in
the deferred sustainability assessment following the four-year contrac-
tual vesting period.
AUTHORIZATION OF THE BOARD OF MANAGEMENT
TO ISSUE AND REPURCHASE SHARES
deferred
she is a shareholder representative. A Vice Chairperson who is an em-
ployee representative has no casting vote (§8(3) of the Statutes).
German
German
German
French
German
British
German
German
Accounting
✓
✓
✓
✓
✓
✓
Danish
French
Danish
German
Overboarding¹
Gender
male
male
female
female
male
✓
male
male
female
male
male
male
Diversity
Nationality
female
✓
✓
✓
Technology
✓
✓
✓
✓
Digital
>
✓
✓
、
、
Transformation
Employee
✓
✓
Management
Expertise
༨
✓
✓
Insurance
Actuarial
Practice
>
>
Amendments to the Statutes are governed by Article 59 SE Regu-
lation, § 179 AktG, and the Statutes. § 13 (4) of the Statutes of Allianz SE
stipulates that, unless mandatory law requires otherwise, changes to
the Statutes require a two-thirds majority of the votes cast at a General
Meeting or, if at least one half of the share capital is represented, a
simple majority of the votes cast. Where the law requires a majority in
capital for a shareholder resolution, a simple majority of the capital
represented at the General Meeting is sufficient, provided this is in line
with legal requirements. The Supervisory Board may alter the wording
of the Statutes (§ 179 (1) AktG and § 10 of the Statutes).
✓
✓
✓
༨
Investment
✓
༨
✓
>
✓
>
✓
༨
2017
2012
2018
2016
2017
2018
2015
Regulatory
requirement
✓
✓
✓
✓
✓
༨
2016
2012
2017
2014
Boissard
Snabe
Diekmann
the Supervisory Board of Allianz SE has developed the following skill
matrix. From the 2021 financial year onwards, it will be expanded to
include "Environment, Social & Governance" (ESG).
Supervisory Board of Allianz SE: skill matrix
leadership positions (statutory gender quota of 30%) is being met. In
addition, the Supervisory Board has five members with international
backgrounds. The skills profile is also met by all current members of the
Supervisory Board. Based on the objectives regarding its composition,
B_Corporate Governance
✓
Hainer
Le Goaër
Grundler Hayward
Kirsch
Lawrenz
Tenure
Joined Board in
2017
Burkhardt-
Berg
✓
>>
✓
✓
✓
ness
No
<
✓
、
✓
✓
༨
✓
>>
✓
✓
✓
✓
✓
✓
✓
✓
༨
✓
、
✓
Personal
(Fit & Proper)
✓
appro-
Independence¹
✓
✓
✓
✓
✓
✓
priate-
✓
、
North America
✓
✓
✓
༨
✓
༨
༨
✓
Engagement
✓
✓
✓
✓
✓
✓
✓
✓ Criteria met. Expertise criteria based on yearly self-assessment. Tick means at least "Good knowledge" and implies the capacity to well understand the relevant matters and to take educated decisions. Good knowledge may result from existing
qualifications and from the training measures regularly attended by all members of the Supervisory Board. On a scale from A-E this requires at least grade B.
✓
✓
✓
✓
✓
>
✓
✓
✓
✓
✓
✓
༨
✓
༨
✓
✓
༨
1 According to German Corporate Governance Code.
The current composition of the Supervisory Board can be found in the
Supervisory Board Report. In addition, the composition of the Super-
visory Board as well as a general description of the functions of the
Supervisory Board and its committees can be found on our website at
> www.allianz.com/supervisory-board.
Directors' dealings
TAKEOVER-RELATED STATEMENTS AND
EXPLANATIONS
B_Corporate Governance
The following information is provided pursuant to §289a and §315a of
the German Commercial Code ("Handelsgesetzbuch - HGB") and
§176(1) of the German Stock Company Act ("Aktiengesetz - AktG").
COMPOSITION OF SHARE CAPITAL
As of 31 December 2020, the share capital of Allianz SE was
€ 1,169,920,000. It was divided into 412,293,128 registered and fully
paid-up shares with no par value. All shares carry the same rights and
obligations. Each no-par value share carries one vote.
RESTRICTIONS ON VOTING RIGHTS AND SHARE
TRANSFERS; EXERCISE OF VOTING RIGHTS IN CASE
OF EMPLOYEE EQUITY PARTICIPATIONS
Shares may only be transferred with the consent of the company. An
approval duly applied for may only be withheld if it is deemed neces-
sary in the company's interest on exceptional grounds. The applicant will
be informed of the reasons.
Shares acquired by employees of the Allianz Group as part of the
employee stock purchase plan are generally subject to a three-year
lock-up period. During the lock-up period, employees can exercise
their voting rights.
INTERESTS IN THE SHARE CAPITAL
EXCEEDING 10% OF THE VOTING RIGHTS
Allianz SE is not aware of any direct or indirect interests in the share
capital that exceed 10% of the voting rights.
SHARES WITH SPECIAL RIGHTS
CONFERRING POWERS OF CONTROL
There are no shares with special rights conferring powers of control.
LEGAL AND STATUTORY PROVISIONS APPLICABLE
TO THE APPOINTMENT AND REMOVAL OF MEMBERS
OF THE BOARD OF MANAGEMENT AND TO
AMENDMENTS OF THE STATUTES
The appointment and removal of members of Allianz SE's Board of
Management is governed by Articles 9(1), 39(2) and 46 of the SE Reg-
ulation, §§ 84, 85 AktG, §24(3) and § 47 No. 1 German Insurance Super-
vision Act ("Versicherungsaufsichtsgesetz - VAG"), and the Statutes. Ac-
cording to the Statutes, the Board of Management shall consist of at
least two persons; the Supervisory Board determines the number of
any additional members (§5 (1) of the Statutes). The members of the
Board of Management are appointed by the Supervisory Board for a
term of up to five years; reappointment is permitted for a maximum of
five years in each case (§5 (3) of the Statutes). A simple majority of the
votes cast in the Supervisory Board is required to appoint members of
the Board of Management. In the case of a tie vote, the Chairperson
of the Supervisory Board, who pursuant to Article 42 of the SE Regula-
tion must be a shareholder representative, shall have the casting vote
(§8 (3) of the Statutes). If the Chairperson does not participate in the
vote, the Vice Chairperson shall have the casting vote, provided he or
Annual Report 2020 - Allianz Group
20
20
In the longer term, Allianz aims to place women in at least 30% of
the positions at these two management levels throughout the Group.
With regard to the Supervisory Boards of the subsidiaries con-
cerned, the target quotas for eight out of nine subsidiaries concerned
were set at 30% and the target quota for the remaining subsidiary con-
cerned was set at 33% for 31 December 2021. Seven of the nine sub-
sidiaries already reached this target as of 31 December 2020. The tar-
get quotas for the respective Board of Management of the subsidiaries
concerned were between 20% and 30% (24% on average) for 31 De-
cember 2021 and were met by six of the nine companies as of 31 De-
cember 2020. For the two management levels below the Board of
Management, the respective Boards of Management of the sub-
sidiaries concerned had set target quotas between 17% and 33% (23%
on average) for 31 December 2021 for the first management level and
target quotas between 20% and 33% (26% on average) for 31 De-
cember 2021 for the second management level below the Board of
Management. As of 31 December 2020, the targets were met by five
of the nine subsidiaries concerned at the first management level, while
five of the nine companies likewise met the targets set for the second
management level. Despite increased efforts to promote women in the
Allianz Group and also at the individual subsidiaries, it was not possi-
ble to achieve the targets ahead of time in these cases, as it was not
always possible to identify suitable female candidates for all vacant
positions. Allianz continues to work to achieve these targets.
Members of the Board of Management and the Supervisory Board as
well as persons closely associated with them, are obliged by the E.U.
Market Abuse Directive to disclose to both Allianz SE and the German
Federal Financial Supervisory Authority any transactions involving
shares or debt securities of Allianz SE or financial derivatives or other
instruments based on them, as soon as the value of the securities
acquired or divested by the member amounts to twenty thousand
Euros or more within a calendar year. These disclosures are published
on our website at > www.allianz.com/directorsdealings.
Annual Report 2020 - Allianz Group
19
B_Corporate Governance
Annual General Meeting
Shareholders exercise their rights at the AGM. When adopting resolu-
tions, each share carries one vote. Shareholders can follow the AGM's
proceedings on the internet and be represented by proxies. These
proxies exercise voting rights exclusively on the basis of instructions
given by the shareholder. Shareholders are also able to cast their votes
via the internet in the form of online voting. Allianz SE regularly pro-
motes the use of internet services.
The AGM elects the shareholder representatives of the Supervisory
Board and approves the actions taken by the Board of Management
and the Supervisory Board. It decides on the appropriation of net earn-
ings, capital transactions, the approval of intercompany agreements,
also on the approval of the remuneration system presented by the
Supervisory Board for the members of the Board of Management and
the remuneration of the Supervisory Board, as well as changes to the
company's Statutes. Resolutions of the AGM shall be passed, unless
mandatory legal provisions require otherwise, by a simple majority of
the valid votes cast. In accordance with European regulations and the
Statutes, changes to the Statutes require a two-thirds majority of votes
cast, which at the same time represents the majority of the capital stock
represented at the time of the resolution, in case less than half of the
share capital is represented in the AGM. Each year, an ordinary AGM
takes place at which the Board of Management and the Supervisory
Board give an account of the preceding financial year. For special
decisions, the German Stock Corporation Act provides for the con-
vening of an extraordinary AGM.
>
Accounting and auditing
In compliance with the special legal provisions that apply to insur-
ance companies, the auditor of the annual financial statements and of
the half-yearly financial report is appointed by the Supervisory Board,
not the AGM. The audit of the financial statements covers the indi-
vidual financial statements of Allianz SE and the consolidated finan-
cial statements of the Allianz Group.
We inform our shareholders, financial analysts, the media, and the
general public about the company's situation on a regular basis and in
a timely manner. The annual financial statements of Allianz SE, the
Allianz Group's consolidated financial statements, and the respective
management reports are publicly available within 90 days of the end
of each financial year. Additional information is provided in the
Allianz Group's half-yearly financial reports and quarterly statements.
Information is also made available at the AGM, at telephone con-
ferences for analysts and journalists, and on the Allianz Group's web-
site. Our website also provides a financial calendar listing the dates
of major publications and events, such as annual reports, half-yearly
financial reports, and quarterly statements, AGMs, and analyst con-
ference calls as well as financial press conferences.
You can find the 2021 financial calendar on our website at
> www.allianz.com/financialcalendar.
Information in accordance with the German Act
on Equal Participation of Women and Men in
Executive Positions in the Private and the Public
Sector
This section outlines the targets set for Allianz SE and the other com-
panies of the Allianz Group in Germany that are subject to co-determi-
nation (the "subsidiaries concerned") for the Supervisory Board, the
Board of Management, and the two management levels below the
Board of Management.
Article 17 (2) of the German SE Implementation Act stipulates that
as of 1 January 2016, the share of women and men among the mem-
bers of the Supervisory Board of Allianz SE must each total up to 30%
at least. The Supervisory Board currently in office fulfils this require-
ment as it includes four women (33%) and eight men (67%).
In August 2017, the Supervisory Board set a target for the per-
centage of women on Allianz SE's Board of Management at 30% to be
achieved by 31 December 2021. As of 31 December 2020, the per-
centage of women on Allianz SE's Board of Management was to 20%.
As regards the proportion of women on the first and second manage-
ment levels below the Board of Management, the Board of Manage-
ment of Allianz SE has set a target of 20% and 30%, respectively, to be
met by 31 December 2021. As of 31 December 2020, this target was
already met for the first management level, with a percentage of
women of 28%, but could not yet be met on the second level with a
percentage of 23%. The first two management levels below the Board
of Management comprise a very small comparative group of execu-
tives. No suitable female candidates could be identified for the very
few positions that became vacant in the period considered.
The Allianz Group prepares its accounts according to §315e of the Ger-
man Commercial Code ("Handelsgesetzbuch – HGB") on the basis of
the International Financial Reporting Standards (IFRS) adopted by the
European Union. The annual financial statements of Allianz SE are pre-
pared in accordance with German law and accounting rules.
༨
✓
>
✓
✓
Regional
Growth
✓
✓
✓
Europe (EU)
✓
✓
✓
-------
>>
Expertise Markets
✓
✓
✓
༨
✓
、
、
✓
>
、
1,787
1,801
3,336
822
1,512
1,516
1,062
3,775
756
244
336
Pension service cost
376
Total
1,988
Total
AEI 2015/RSU4
AEI 2016/RSU4
LTI 2019-2020/RSU4
LTI 2020-2021/RSU
Deferred compensation
514
2,221
564
150
Annual bonus
Annual variable compensation
Total fixed compensation
Perquisites
Base salary
€ thou (total might not sum up due to rounding)
Individual remuneration: 2020 and 2019
B_Corporate Governance
37
Annual Report 2020 - Allianz Group
6_The appointment of Dr. Axel Theis as member of the Board of Management of Allianz SE ended as of 31 March 2020. On the basis of a post-contractual one-year non-compete clause already provided for in his service agreement, Dr. Axel Theis
is entitled to an allowance ("Karenzentschädigung") of 50% of his annual target compensation (sum of base salary and variable target compensation), i.e. a total of € 1,625.5 thou. Dr. Axel Theis waived payment of the transitional allowance to
which he would have been entitled. In any case, the transitional allowance would have been set-off against the non-compete allowance.
5_Pension service cost in accordance with IAS 19: represents the company cost, not the actual entitlement or a payment.
4_The share price related value increase is capped at 200% above grant price for the AEI/RSU and at 100% above grant price for the LTI/RSU. Furthermore, the value increase is limited by the overall payout cap. The relevant share price used to
determine the RSU value, and hence the final number of RSUs granted, and the caps are only available after sign-off by the external auditors.
3_The annual bonus disclosed for performance year 2020 is paid in 2021 and for performance year 2019 in 2020. The payments for share-based deferred compensation (AEI and LTI), however, are disclosed for the year in which the actual payment
was made.
176
2_The column "Actual grant" is in line with the disclosure requirements under the German Accounting Standard No. 17.
2,371
2,552
906
4,340
1,212
394
972
3,900
150
564
150
564
150
150
1_The disclosed LTI target/min/max and LTI actual figures of 2020 and 2019 represent the LTI fair values, which differ from the LTI allocation values. The determination of the LTI fair values is based on an option pricing model taking into account
additional input parameters, including the term structure of interest rates and the expected relative performance of the Allianz share price compared to the peer index. For the latter, simulation techniques are applied at the valuation date to
determine the volatility of the Allianz stock, the volatility of the peer index and their correlation.
981
813
981
244
244
244
975
Base salary
Max
Min
Target
Target
2020
2019
2020
2019
2020
2019
Payout³
Actual grant¹2
Grant¹
Dr. Axel Theis (Appointed: 01/2015; end of service: 03/2020)
2,212
Deferred compensation
2,400
3,535
4,137
4,800
975
244
975
244
303
202
3,837
Annual bonus
Total
3,783
535
Annual variable compensation
244
1,007
244
1,007
176
244
244
1,007
Total fixed compensation
1
32
1
32
1
1
1
32
Perquisites
244
LTI 2020-2021/RSU
Share Ownership requirement:
AEI 2016/RSU4
In combination with the virtual shares (RSU) accumulated over four
years through the LTI plan, the Allianz SE Board of Management has
significant economic exposure to the Allianz stock: It amounts to ap-
prox. 800% of base salary for the Chairman and approx. 700% of
base salary for a regular board member:
Holding is required for the entire term of service on the Board of
Management. Shares will be acquired through mandatory pay com-
ponent conversion. In case of a base salary increase, the shareholding
obligation increases accordingly. The holding obligation ceases with
the end of the mandate.
Regular Board of Management member: one time base salary,
i.e. € 975 thou.
Chairman of the Board of Management: two times base salary,
i.e. €3,412 thou,
Members of the Board of Management must build share ownership
within three years, with the minimum levels defined as follows:
SHAREHOLDING REQUIREMENTS AND
SHAREHOLDING EXPOSURE
2,133/1,220 (Zielwert x 150%)
Annual bonus
5,308/3,317
-> limited by overall cap:
x 200% relative TSR;
Target value x 150% x 200% share price
development
473
LTI
Annual bonus
1,422/813
2,559/1,463
LTI
MAXIMUM
10,000/6,000
@TARGET
6,540/3,739
Base salary (1,706/975) + Pension contribution (853/488)
Fix 2,559/1,463
MINIMUM
2,559/1,463
€ thou CEO/RBM
Compensation sensitivity
Annual Report 2020 - Allianz Group
38
B_Corporate Governance
5_Pension service cost in accordance with IAS 19: represents the company cost, not the actual entitlement or a payment.
CEO: 2x base; RBM: 1x base
⚫ Annual grant of virtual shares
B_Corporate Governance
29
Annual Report 2020 - Allianz Group
Board members appointed before 1 January 2010 are eligible for
a transition payment after leaving the Board of Management. The
transition payment comprises an amount corresponding to the most
recent base salary (paid for a period of six months), plus a one-time
payment of 25% of the target variable remuneration at notice date.
Where an Allianz pension is due at the same time, such pension is
deducted from the monthly transition payments. In the event of a con-
tractually agreed non-compete clause, the remittance of the transi-
tional payment will be offset against the payment resulting from the
non-compete clause.
TRANSITION PAYMENT
In the event of a contractually agreed non-compete clause, a sev-
erance payment is offset against compensation resulting from the
non-compete clause in case of premature termination of service.
Payments for early termination to board members with a remaining
term of contract of more than two years are capped at twice the
annual compensation, consisting of last financial year's base salary
and 100% of the variable target compensation. If the remaining term
of contract is less than two years, the payment is pro-rated for the
remaining term of the contract. Contracts do not contain provisions
for any other cases of early termination of Board of Management
service.
SEVERANCE PAYMENT CAP
Board of Management contracts are limited to a period of five years.
For new appointments, a shorter period of up to three years is provided
based on the recommendation by the German Corporate Governance
Code. Severance payments made to board members in case of early
termination are restricted according to the German Corporate Govern-
ance Code.
TERMINATION OF SERVICE
13,648 6,827
800% 700%
1,463 10,236 5,852
600% 600%
LTI RSU (virtual shares)
% of base
€ thou
% of base
2,559
€ thou
€ thou 1,706 975 3.412975
Stock exposure
CEO RBM
CEO RBM
Target
⚫ No personal hedging
• Similar economic exposure as physical
stock
are subject to share price development
⚫ Deferred for four years, i.e. four LTI grants
Total
LTI 2019-2020/RSU4
4_The share price related value increase is capped at 200% above grant price for the AEI/RSU and at 100% above grant price for the LTI/RSU. Furthermore, the value increase is limited by the overall payout cap. The relevant share price used to
determine the RSU value, and hence the final number of RSUs granted, and the caps are only available after sign-off by the external auditors.
2_The column "Actual grant" is in line with the disclosure requirements under the German Accounting Standard No. 17.
32
32
32
975
975
975
975
975
Max
Min
Target
Target
32
2020
2020
2019
2020
2019
Payout³
Actual grant¹2
Grant¹
Renate Wagner (Appointed: 01/2020)
Total
Pension service cost
Total
AEI 2015/RSU4
2019
3_The annual bonus disclosed for performance year 2020 is paid in 2021 and for performance year 2019 in 2020. The payments for share-based deferred compensation (AEI and LTI), however, are disclosed for the year in which the actual payment
was made.
32
1,007
1_The disclosed LTI target/min/max and LTI actual figures of 2020 and 2019 represent the LTI fair values, which differ from the LTI allocation values. The determination of the LTI fair values is based on an option pricing model taking into account
additional input parameters, including the term structure of interest rates and the expected relative performance of the Allianz share price compared to the peer index. For the latter, simulation techniques are applied at the valuation date to
determine the volatility of the Allianz stock, the volatility of the peer index and their correlation.
2,185
477
477
3,508
4,773
1,484
3,809
477
477
477
1,708
3,032
1,007
4,296
3,332
1,324
2,069
1,512
700
700
00
1,220
813
1,007
1,007
1,007
1,007
535
4,884
535
390
390
390
2,891
1,144
3,615
2,302
390
2,692
1,285
390
1,675
1_The disclosed LTI target/min/max and LTI actual figures of 2020 and 2019 represent the LTI fair values, which differ from the LTI allocation values. The determination of the LTI fair values is based on an option pricing model taking into account
additional input parameters, including the term structure of interest rates and the expected relative performance of the Allianz share price compared to the peer index. For the latter, simulation techniques are applied at the valuation date to
determine the volatility of the Allianz stock, the volatility of the peer index and their correlation.
2_The column "Actual grant" is in line with the disclosure requirements under the German Accounting Standard No. 17.
3_The annual bonus disclosed for performance year 2020 is paid in 2021 and for performance year 2019 in 2020. The payments for share-based deferred compensation (AEI and LTI), however, are disclosed for the year in which the actual payment
was made.
4_The share price related value increase is capped at 200% above grant price for the AEI/RSU and at 100% above grant price for the LTI/RSU. Furthermore, the value increase is limited by the overall payout cap. The relevant share price used to
determine the RSU value, and hence the final number of RSUs granted, and the caps are only available after sign-off by the external auditors.
5_Pension service cost in accordance with IAS 19: represents the company cost, not the actual entitlement or a payment.
6_The appointment of Niran Peiris as member of the Board of Management of Allianz SE ended as of 31 December 2020. On the basis of a post-contractual one-year non-compete clause already provided for in his service agreement, Niran Peiris
is entitled to an allowance ("Karenzentschädigung") of 50% of his annual target compensation (sum of base salary and variable target compensation), i.e. a total of € 1,625.5 thou.
Annual Report 2020 - Allianz Group
35
36
36
B_Corporate Governance
3,225
Individual remuneration: 2020 and 2019
754
1,017
731
731
731
731
731
23
23
23
23
23
754
754
754
754
754
611
916
531
531
1,136
1,555
2,501
€ thou (total might not sum up due to rounding)
Ivan de la Sota (Appointed: 04/2018)
Grant¹
18
60
18
60
Total fixed compensation
993
1,035
1,035
1,035
993
1,035
993
1,035
Annual variable compensation
Annual bonus
813
813
1,220
840
682
840
60
60
60
18
Actual grant¹, 2
Payout³
2019
2020
2019
2020
2019
2020
Target
Target
Max
Min
Base salary
975
975
975
975
975
975
975
975
Perquisites
Max
Min
Target
Target
1,015
1,022
1,015
Annual variable compensation
Annual bonus
813
813
1,220
707
492
707
492
Deferred compensation
LTI 2020-2021/RSU
LTI 2019-2020/RSU4
1,512
2,069
942
1,516
1,331
AEI 2016/RSU4
1,022
1,015
1,015
1,015
MISCELLANEOUS
Max
Base salary
975
975
975
975
975
975
975
AEI 2015/RSU4
975
47
40
40
40
47
40
47
40
Total fixed compensation
1,022
Perquisites
682
Total
3,340
Total fixed compensation
Annual variable compensation
Annual bonus
Deferred compensation
LTI 2020-2021/RSU
LTI 2019-2020/RSU4
AEI 2016/RSU4
AEI 2015/RSU4
Total
Pension service cost
Total
Dr. Klaus-Peter Röhler (Appointed: 04/2020)
Grant¹
Actual grant¹2
Payout³
2019
2020
2019
2020
2019
2020
Perquisites
Base salary
1,936
2,143
1,015
4,303
3,060
2,448
1,730
1,507
Pension service cost
413
429
429
3,351
429
429
413
429
Total
3,764
3,769
1,444
4,733
3,473
2,877
413
Deferred compensation
LTI 2020-2021/RSU
LTI 2019-2020/RSU4
Dr. Günther Thallinger (Appointed: 01/2017)
Grant¹
Actual grant¹2
Payout³
2019
2020
2019
2020
2019
2020
Target
Target
Min
Max
Base salary
975
975
975
975
975
975
B_Corporate Governance
€ thou (total might not sum up due to rounding)
Individual remuneration: 2020 and 2019
Annual Report 2020 - Allianz Group
3,016
1,946
1,694
483
3,812
556
556
556
483
556
483
975
556
1,550
4,838
4,166
3,572
2,429
2,250
1_The disclosed LTI target/min/max and LTI actual figures of 2020 and 2019 represent the LTI fair values, which differ from the LTI allocation values. The determination of the LTI fair values is based on an option pricing model taking into account
additional input parameters, including the term structure of interest rates and the expected relative performance of the Allianz share price compared to the peer index. For the latter, simulation techniques are applied at the valuation date to
determine the volatility of the Allianz stock, the volatility of the peer index and their correlation.
2_The column "Actual grant" is in line with the disclosure requirements under the German Accounting Standard No. 17.
3_The annual bonus disclosed for performance year 2020 is paid in 2021 and for performance year 2019 in 2020. The payments for share-based deferred compensation (AEI and LTI), however, are disclosed for the year in which the actual payment
was made.
4_The share price related value increase is capped at 200% above grant price for the AEI/RSU and at 100% above grant price for the LTI/RSU. Furthermore, the value increase is limited by the overall payout cap. The relevant share price used to
determine the RSU value, and hence the final number of RSUs granted, and the caps are only available after sign-off by the external auditors.
5_Pension service cost in accordance with IAS 19: represents the company cost, not the actual entitlement or a payment.
3,874
3,683
975
6
LTI 2019-2020/RSU4
AEI 2016/RSU4
1,512
2,069
1,322
1,516
1,737
AEI 2015/RSU4
Total
3,310
3,302
977
4,266
3,664
3,000
1,926
1,678
Pension service cost
473
535
535
LTI 2020-2021/RSU
700
946
700
2
2
2
6
2
6
2
Total fixed compensation
981
977
Perquisites
977
981
977
981
977
Annual variable compensation
Annual bonus
813
813
1,220
946
977
473
4,282
3,318
3,810
3,920
1,595
3,883
3,567
2,321
2,277
Giulio Terzariol (Appointed: 01/2018)
Grant¹
Actual grant¹2
Payout³
2019
2020
2019
2020
2019
2020
Target
Target
Min
Max
Total
560
488
560
1,512
2,069
1,290
1,516
1,562
AEI 2016/RSU4
AEI 2015/RSU4
Total
3,322
3,360
Base salary
1,035
3,395
3,007
1,833
1,717
Pension service cost
488
560
560
560
488
4,324
993
975
975
813
1,220
946
700
700
946
700
Deferred compensation
LTI 2020-2021/RSU
LTI 2019-2020/RSU4
AEI 2016/RSU4
AEI 2015/RSU4
Total
Pension service cost
Total
1,512
2,069
1,322
1,516
1,737
3,329
813
Annual bonus
Annual variable compensation
993
975
975
975
975
975
Perquisites
26
18
18
18
975
26
26
18
Total fixed compensation
1,001
993
993
993
1,001
993
1,001
18
INTERNAL AND EXTERNAL BOARD APPOINTMENTS
When a member of the Board of Management simultaneously holds
an appointment at another company within the Allianz Group or their
joint ventures with outside partners, the full amount of the respective
remuneration is transferred to Allianz SE. In recognition of related
benefits to the organization and subject to prior approval by the
Supervisory Board of Allianz SE, board members are also allowed
to accept a limited number of non-executive supervisory roles at
appropriate external organizations. In these cases, 50% of the remu-
neration received is paid to Allianz SE. The respective board member
will retain the full remuneration for that position only if the Allianz SE
Supervisory Board classifies the appointment as a personal one (ad
personam). Any remuneration paid by external organizations will be
itemized in those organizations' annual reports; its level will be
determined by the governing body of the relevant organization.
Deferred compensation
Annual Report 2020 - Allianz Group
981
1,220
813
813
Annual bonus
Annual variable compensation
1,049
1,049
1,049
713
1,049
1,049
1,049
1,049
Total fixed compensation
74
74
74
74
74
1,049
981
713
Deferred compensation
3,644
2,030
3,107
3,826
4,337
1,049
3,374
3,378
1,883
1,795
1,516
1,345
2,069
1,512
Total
Pension service cost
Total
AEI 2015/RSU4
AEI 2016/RSU4
LTI 2019-2020/RSU4
LTI 2020-2021/RSU
74
74
74
Perquisites
6,364
7,507
8,425
2,758
6,800
6,676
Total
1,041
891
1,041
891
1,041
1,041
1,041
891
Pension service cost
5,350
5,058
5,323
6,616
7,384
5,949
435
6,391
Grant¹
975
975
975
975
975
975
975
975
Base salary
Μαχ
Min
Target
Target
2020
2019
2020
2019
2020
2019
Payout³
Actual grant¹2
Sergio Balbinot (Appointed: 01/2015)
1,717
472
472
972
1,220
813
813
Annual bonus
Annual variable compensation
998
995
998
700
995
998
998
995
Total fixed compensation
23
20
23
20
23
998
972
700
Deferred compensation
458
449
Pension service cost
1,699
1,967
3,023
3,748
4,287
998
3,323
3,324
Total
AEI 2015/RSU4
AEI 2016/RSU4
1,781
1,516
1,324
2,069
1,512
LTI 2019-2020/RSU4
LTI 2020-2021/RSU
23
23
20
Perquisites
B_Corporate Governance
33
Annual Report 2020 - Allianz Group
6_Sergio Balbinot received a buyout award in 2015 to compensate for forfeited grants from his previous employer. Half of this compensation was granted in the form of RSUs, which vested in March 2019. A payment of € 4,807 thou was made.
5_Pension service cost in accordance with IAS 19: represents the company cost, not the actual entitlement or a payment.
4_The share price related value increase is capped at 200% above grant price for the AEI/RSU and at 100% above grant price for the LTI/RSU. Furthermore, the value increase is limited by the overall payout cap. The relevant share price used to
determine the RSU value, and hence the final number of RSUs granted, and the caps are only available after sign-off by the external auditors.
3_The annual bonus disclosed for performance year 2020 is paid in 2021 and for performance year 2019 in 2020. The payments for share-based deferred compensation (AEI and LTI), however, are disclosed for the year in which the actual payment
was made.
2_The column "Actual grant" is in line with the disclosure requirements under the German Accounting Standard No. 17.
1_The disclosed LTI target/min/max and LTI actual figures of 2020 and 2019 represent the LTI fair values, which differ from the LTI allocation values. The determination of the LTI fair values is based on an option pricing model taking into account
additional input parameters, including the term structure of interest rates and the expected relative performance of the Allianz share price compared to the peer index. For the latter, simulation techniques are applied at the valuation date to
determine the volatility of the Allianz stock, the volatility of the peer index and their correlation.
4,116
2,465
3,578
4,260
4,809
1,520
3,845
3,813
472
435
472
435
Individual remuneration: 2020 and 2019
472
€ thou (total might not sum up due to rounding)
Grant¹
975
975
975
975
975
975
975
975
Base salary
Max
Min
Target
Target
2020
2019
2020
2019
2020
2019
Payout³
Actual grant¹2
Jacqueline Hunt (Appointed: 07/2016)
458
5,759
Total
LTI allocation
€ thou value in € thou
payout in
88.43
factor in %
Target Annual bonus
achievement
75.58
Group
financial
32
The sum of the total remuneration of the Board of Management
for 2020, excluding pension service cost, amounts to € 32 mn (2019:
€39 mn). The corresponding amount including pension service cost is
€ 38 mn (2019: € 44 mn).
1,257
The column "Actual grant" is compliant with the disclosure require-
ments stipulated by the applicable German Accounting Standard
No. 17. It includes the fixed compensation components, the annual
bonuses paid for both performance years, and the fair value of the
RSU grant for 2020 and 2019. It shows that the compensation system
breathes with business development: The compensation reported for
2020 is significantly lower than in the previous year. The actual 2020
payout, on the other hand, may be higher for members of the Board
of Management who were already appointed in 2015, as the payment
of share-based compensation was due and the good share price per-
formance had an impact on payout.
The Grant column specifies the target, minimum, and maximum
remuneration.
The following table shows the individual board members' remunera-
tion for 2020 and 2019, including fixed and variable remuneration
components and pension service cost.
REMUNERATION FOR 2020 AND 2019
Renate Wagner
Dr. Axel Theis
Dr. Günther Thallinger
Giulio Terzariol
Ivan de la Sota
Dr. Klaus-Peter Röhler
The Payout column lists the 2020 and 2019 payments. The base
salary, annual bonus, and perquisites are linked to the performance
reporting years 2020 and 2019, whereas the Allianz Equity Incentive
(AEI) payouts result from grants related to performance years 2015
and 2014.
2,263
11111
performance
0.80
75.58
1,238
688
84.65
1.12
75.58
1,261
700
86.16
1.14
75.58
1,283
713
87.67
1.16
75.58
1.17
0.8-1.2
in %
ICF range:
Niran Peiris
Dr. Christof Mascher
Jacqueline Hunt
Sergio Balbinot
7.90
3.80
4.00
shareholders
108.72
75.58
Net income attributable to
50.00
50.00
106.24
79.19
11.86
10.75
14.35
15.00
11.50
12.00
5.80
6.00
Operating profit
2019
7.50
60.46
9.85
6.81
Oliver Bäte
Target achievement 2020
With regard to the assessment of quantitative Group target
achievement, no modifications have been made.
Variable compensation 2020
Furthermore, the ambitious climate strategy developed by the
Board of Management was published on 14 January 2021. For further
information, please refer to the Combined Separate Non-Financial
Report for the Allianz Group and Allianz SE.
B_Corporate Governance
31
Annual Report 2020 - Allianz Group
3_Group target achievement is based on an operating profit of € 10,751,118.35 (2019: 11,855,449.63) thou and net income
attributable to shareholders of € 6,806,669.99 (2019: 7,914,009.88) thou.
In addition to mastering the operational challenges, the Board of
Management has also invested in the future: firstly, by improving the
Property-Casualty retail and commercial lines and, secondly, by repo-
sitioning Allianz Global Investors and redefining the Life strategy in the
view of the continued drop of interest rates. The digitalization strategy
was accelerated, and the risk and business strategies were adapted to
the changed market conditions and aligned even more closely.
European insurance sector. Renate Wagner and the functional units
she leads - Human Resources, Legal, Compliance, and M&A units -
have also managed to contribute positively. One particular achieve-
ment was the fast implementation of specific supporting measures to
help the organization weather the crisis, such as flexible remote work-
ing models, digital training and development offerings, and the crea-
tion of the necessary legal requirements for the virtual Annual Share-
holders' Meeting. In addition, the fact that Allianz was able to go
through with several acquisitions in Latin America, Spain, and Australia,
despite the difficult conditions, also stands out positively. Dr. Christof
Mascher's foresighted planning was another key factor in the smooth
transition to remote working models, ensuring a high level of system
stability. At peak times, up to 90% of employees worked from home. At
the same time, Dr. Günther Thallinger continued to manage Allianz
assets professionally and with a steady hand, in particular through the
periods of considerable capital market volatility. Last but not least,
Oliver Bäte steered the overall company prudently and firmly, provid-
ing his Board of Management team with just the right impetus to defy
the crisis. He was a true role model to the entire Allianz management
team.
In the assessments of the individual board members' perfor-
mance, the underperformance of Niran Peiris' business division has
been addressed. However, in the area of credit insurance, one note-
worthy achievement was the joint development of a protective shield
for German manufacturers and suppliers in cooperation with the Ger-
man government. The divisions of Ivan de la Sota, Sergio Balbinot,
Dr. Klaus-Peter Röhler, until 31 March 2020 under the responsibility of
Dr. Axel Theis, and Jacqueline Hunt have carried the Group's operating
result through the crisis. Giulio Terzariol as CFO ensured the balance
sheet strength of the Allianz Group and thus secured the dividend pay-
ment to shareholders in the difficult crisis environment. His achieve-
ments in capital market communications were also highly recognized
by the investment community when he was voted "Best CFO" in the
The Board's overall strong performance was achieved on a sus-
tainable basis. On the one hand, both employees and customers rated
its crisis management as excellent, as reflected by indicators such as
the Net Promoter Score, the Inclusive Meritocracy Index, and the Work
Well Index Plus; on the other hand, Allianz fully achieved the target for
reducing CO2 emissions. As a result, the combined ICF for the Board of
Management was above 1.
In view of the unusual circumstances presented with the COVID-
19 crisis, the financial performance of the Board of Management,
including stabilizing the Group's solvency, has been rated as very
strong for the financial year 2020. All business divisions are close to tar-
get or even slightly above. As in the previous year, the only exception is
the business division comprising the Global Insurance Lines, Anglo-
Saxon Markets, MENA, and Africa; consequently, it is almost the only
area weighing down the Group's target achievement level.
To calculate the annual bonus, the combined level of target achieve-
ment for the financial Group targets is multiplied by the individual con-
tribution factor (ICF) determined for each board member by the
Supervisory Board.
INDIVIDUAL CONTRIBUTION FACTOR AND VARIABLE
COMPENSATION 2020
50.00
50.00
111.19
71.97
7.91
9.35
5,785
492
75.58
1,717
1,717
1,717
1,726
Total fixed compensation
11
20
11
20
1,726
11
11
20
Perquisites
1,706
1,706
1,706
1,706
1,706
1,706
11
1,717
1,726
1,717
1,585
AEI 2015/RSU4
2,375
AEI 2016/RSU4
3,143
2,637
2,348
3,534
2,620
LTI 2019-2020/RSU4
LTI 2020-2021/RSU
Deferred compensation
1,257
1,747
1,257
1,747
2,133
1,422
1,422
Annual bonus
Annual variable compensation
1,706
1,706
Base salary
Max
86.92
1.15
75.58
1,261
700
86.16
1.14
75.58
1,261
700
86.16
1.14
75.58
1,227
682
83.89
1.11
956
531
86.92
1.15
176
885
316
1.14
30
Target
Target
2020
2019
2020
2019
2020
2019
Payout³
Actual grant¹, 2
Grant¹
Oliver Bäte (Appointed: 01/2008; CEO since 05/2015)
B_Corporate Governance
€ thou (total might not sum up due to rounding)
Individual remuneration: 2020 and 2019
Annual Report 2020 - Allianz Group
75.58
1,261
700
86.16
75.58
458
Min
458
479
479
489
479
489
479
3,782
1,457
4,745
4,155
3,447
3,844
3,764
1_The disclosed LTI target/min/max and LTI actual figures of 2020 and 2019 represent the LTI fair values, which differ from the LTI allocation values. The determination of the LTI fair values is based on an option pricing model taking into account
additional input parameters, including the term structure of interest rates and the expected relative performance of the Allianz share price compared to the peer index. For the latter, simulation techniques are applied at the valuation date to
determine the volatility of the Allianz stock, the volatility of the peer index and their correlation.
2_The column "Actual grant" is in line with the disclosure requirements under the German Accounting Standard No. 17.
3_The annual bonus disclosed for performance year 2020 is paid in 2021 and for performance year 2019 in 2020. The payments for share-based deferred compensation (AEI and LTI), however, are disclosed for the year in which the actual payment
was made.
4_The share price related value increase is capped at 200% above grant price for the AEI/RSU and at 100% above grant price for the LTI/RSU. Furthermore, the value increase is limited by the overall payout cap. The relevant share price used to
determine the RSU value, and hence the final number of RSUs granted, and the caps are only available after sign-off by the external auditors.
5_Pension service cost in accordance with IAS 19: represents the company cost, not the actual entitlement or a payment.
6_The appointment of Dr. Christof Mascher as member of the Board of Management of Allianz SE ended as of 31 December 2020. On the basis of a post-contractual one-year non-compete clause already provided for in his service agreement, Dr.
Christof Mascher is entitled to an allowance ("Karenzentschädigung") of 50% of his annual target compensation (sum of base salary and variable target compensation), i.e. a total of € 1,625.5 thou. Dr. Christof Mascher waived payment of the
transitional allowance to which he would have been entitled. In any case, the transitional allowance would have been set-off against the non-compete allowance.
479
34
489
3,801
3,356
LTI 2020-2021/RSU
LTI 2019-2020/RSU4
AEI 2016/RSU4
AEI 2015/RSU4
Total
Total
1,512
2,069
1,302
1,516
1,737
1,619
1,426
3,313
3,303
978
4,266
3,666
2,968
3,285
+4
Annual Report 2020 - Allianz Group
Individual remuneration: 2020 and 2019
2019
2020
2019
2020
combined in %
Weight in %
Achievement level in %
Actual in € bn
150%-Max in € bn
100% - Target in € bn
0% - Floor in € bn
Financial Group targets
Achievement level
B_Corporate Governance
Group financial target achievement level
The combined target achievement level of the Group's financial tar-
gets is calculated as the simple average of the achievement of the
targets for the Group operating profit and Group net income at-
tributable to shareholders. The targets set for both indicators were not
achieved. This was due to the COVID-19 pandemic and its effects; the
overall achievement of these Group targets was only 75.58%. If the ef-
fects of COVID-19 had been eliminated, the results would have been
at least at the target level³.
GROUP FINANCIAL TARGETS
TARGET ACHIEVEMENT FOR 2020
449
2020
2019
2020
2019
€ thou (total might not sum up due to rounding)
B_Corporate Governance
Niran Peiris (Appointed: 01/2018; end of service: 12/2020)
Grant¹
Actual grant¹, 2
Payout³
2019
2020
2019
Deferred compensation
2020
2020
Target
Target
Min
2020
2019
2020
2019
2020
2019
688
Pension service cost
Grant¹
2019
2020
Target
Target
Min
Max
2020
Base salary
975
9
3
449
Total fixed compensation
984
975
978
2019
2019
3
3
9
Perquisites
975
975
2020
975
975
975
Dr. Christof Mascher (Appointed: 09/2009; end of service: 12/2020)6
3
Actual grant¹2
Payout³
975
3
978
984
458
Total
3,773
3,781
978
4,744
4,197
3,481
2,416
2,156
1,456
688
946
978
984
978
Annual variable compensation
9
813
813
1,220
946
Annual bonus
746
6,839
6,093
746
741
12,633
10,022
2,611
salary in %
Total portfolio
701
ESG APPROACH
5,234
4,971
5,717
586
6,019
6,019
617
1,035
1,035
746
106
Renate Wagner
40
40
Annual Report 2020 - Allianz Group
B_Corporate Governance
PENSIONS
Company contributions to the current pension plan "My Allianz Pension"
are generally 15% of total target direct compensation, reduced by an
amount covering the death and occupational or general disability risk.
They are invested in a fund with a guarantee on the contributions paid,
but no further interest guarantee.
For members with pension rights under the now frozen defined
benefit plan, the above contribution rates are reduced by 19% of the
expected annual pension from that frozen plan.
1_Based of the XETRA closing price of the Allianz share as of 30 December 2020. Shareholdings as of 31 December 2020: Oliver Bäte: 13,011 shares, Sergio Balbinot, Jacqueline Hunt, Dr. Christof Mascher, Niran Peiris, Ivan de la Sota, Giulio Terzariol
and Dr. Günther Thallinger: 3,717 shares each. As part of the shareownership guideline, the first acquisition for Dr. Klaus-Peter Röhler and Renate Wagner will take place in 2021.
2_Based on the XETRA closing price of the Allianz share as of 30 December 2020 and the portfolio as of 31 December 2020 shown in the table reporting the share-based compensation.
RSU portfolio²
510
4,225
5,980
613
746
5,566
6,312
647
746
4,153
4,971
4,899
3,692
3,692
379
746
4,334
5,080
521
746
502
ship portfolio¹
total portfolio
value on base
Proportion of
2019
150
3
110
SHARE-BASED REMUNERATION AND
SHAREHOLDINGS
In accordance with the method described earlier, a number of RSUs
were granted to each member of the Board of Management in
March 2021. They will vest and be settled in 2025.
Grants, outstanding holdings, and equity compensation expense under
the Allianz Equity Program (AEI, until and including for financial year
2018) and the LTI from the financial year 2019
Board members
RSUs
Equity
compensation
expense 2020
€ thou²
Number of
RSUs granted
120
Number of
RSUS held at
31/12/2020¹
Oliver Bäte
Sergio Balbinot
Jacqueline Hunt
14,749
49,935
2,289
8,360
30,361
1,365
8,216
26,077
on 5/3/2021¹
92
3,479
34
Annual Report 2020 - Allianz Group
8_As Dr. Axel Theis retired on 31 March 2020, his employer-financed DBO of € 9,141 thou (of which € 3,748 thou for the frozen defined benefit pension plan, €3,087 thou for the frozen contribution-based pension plan, € 1,858 thou for the current
pension plan and € 448 thou AVK/APV) as of 31 December 2020, is taken into account at the former board members. He waived the transitional allowance to which he would have been entitled. In any case, the transitional allowance would
have been set-off against the non-compete allowance.
6_DBO = defined benefit obligation, end of year. The figures show the obligation for Allianz resulting from defined benefit plans, taking into account realistic assumptions with regard to interest rate, dynamics, and biometric probabilities.
7_Dr. Christof Mascher waived the transitional allowance to which he would have been entitled. Such transitional allowance would have been set-off against the non-compete allowance ("Karenzentschädigung") in any case.
4_Expected annual pension payment at assumed retirement age for the frozen defined benefit pension plan, excluding payments for the current pension plan.
5_SC = service cost. Service costs are calculatory costs for the DBO related to the business year reported.
1 The service cost of the frozen contribution-based pension plan reflects the continued death and disability cover.
2_Plan participants contribute 3% of their relevant salary to the AVK. For the AVK the minimum guaranteed interest rate is 1.75% - 3.50% depending on the date of joining Allianz. In general, the company funds the balance required via the APV.
Before Allianz's founding of the APV in 1998, both Allianz and the plan participants were contributing to the AVK.
3_For details on the transition payment, see section "Termination of service". In any event a death benefit is included.
2019
948
477
15
4
683
464
250
9
2020
Renate Wagner
9,327
564
896
22
330
11
1,712
406
2,910
1,305
Dr. Christof Mascher
8,072
27,732
461
86,097
275,747
21,312
1_The relevant value of an RSU is only available after sign-off of the Annual Report by the external auditors, therefore
numbers are based on a best estimate. As disclosed in the Annual Report 2019, the share-based grant in 2020 was
made to participants as part of their 2019 remuneration. The disclosure in the Annual Report 2019 was based on a
best estimate of the RSU grants. The actual grants deviated from the estimated values and have to be disclosed
accordingly. The actual RSU grants as of 6 March 2020 under the LTI are as follows: Oliver Bäte: 19,588, Sergio
Balbinot: 11,001, Jacqueline Hunt: 10,902, Dr. Christof Mascher: 10,604, Niran Peiris: 7,929, Ivan de la Sota: 9,415, Giulio
Terzariol: 10,604, Dr. Günther Thallinger: 10,604, Dr. Axel Theis: 11,001.
2_Share-based remuneration plans are accounted for as cash-settled awards. The fair value of the RSUS granted is
generally accrued, as a compensation expense, proportionately over the entire vesting period as long as there is no
sufficient evidence that the appointment of a board member will cease earlier. Changes on assumptions of the
expected termination date of a board member result in an accelerated expense recognition.
Annual Report 2020 - Allianz Group
B_Corporate Governance
39
B_Corporate Governance
Under the shareholding requirements, members of the Board of
Management must build share ownership within three years > share-
holding requirements.
Shareholding exposure as of 31 December 2020
€ thou
Board members
Oliver Bäte
Sergio Balbinot
Jacqueline Hunt
Dr. Christof Mascher
Niran Peiris
Dr. Klaus-Peter Röhler
Ivan de la Sota
Giulio Terzariol
Dr. Günther Thallinger
Dr. Axel Theis
Shareowner-
5,159
Individual pensions: 2020 and 2019
8,216
29,990
4,414
Niran Peiris
5,765
20,691
3,706
Dr. Klaus-Peter Röhler
6,228
18,394
912
Ivan de la Sota
7,999
21,592
1,071
Giulio Terzariol
8,216
21,049
1,092
Dr. Günther Thallinger
8,216
24,767
1,222
Dr. Axel Theis
Renate Wagner
Total
2,060
3,476
€ thou (total might not sum up due to rounding)
SC5
In 2020, former members of the Board of Management and their
dependents received remunerations and other benefits totaling
€ 8 mn (2019: € 8 mn), while reserves for current pension obligations
and accrued pension rights totaled € 171 mn (2019: € 159 mn).
2020
14
13
407
74
73
462
1,197
11
137
560
1,814
2019
14
11
377
42
61
426
710
9
Ivan de la Sota
122
2019
390
429
1,188
429
1,188
2019
413
751
413
751
Dr. Klaus-Peter Röhler
2020
17
15
486
22
222
1,783
346
1,302
8
249
3,821
2020
488
Giulio Terzariol
2020
63
1,885
464
1,927
7
47
535
3,860
2019
38
1,700
429
1,420
7
42
473
3,162
Dr. Axel Theis
2020
120
Dr. Günther Thallinger
1,270
2,260
277
2020
19
17
429
61
739
462
1,427
17
297
556
2,891
2019
19
14
387
30
660
425
935
14
483
In 2020, Allianz Group paid € 6 mn (2019: € 5 mn) to increase
reserves for pensions and similar benefits for active members of the
Board of Management. As of 31 December 2020, reserves for pen-
sions and similar benefits for active members of the Board of Manage-
ment amounted to € 35 mn (2019: € 41 mn).
Niran Peiris
489
2020
151
4,255
812
3,765
7
51
72
1,332
1,041
9,403
2019
82
3,898
750
2,868
6
46
53
1,201
891
Oliver Bäte
8,013
DBO6
DBO'
Defined benefit pension plan
(frozen)
Contribution-based
pension plan
(frozen)¹
Transition
Current pension plan
AVK/APV²
payment³
Total
Expected
annual
pension
Board of Management
payment
SC5
DBO
41
DBO6
SC5
DBO6
SC5
DBO6
SC5
SC5
6,631
Sergio Balbinot
5
449
1,270
Dr. Christof Mascher
2020
9
4,010
464
2,417
6
58
479
6,485
2019
6
3,770
429
1,897
6
52
49
912
1,270
2020
449
1,720
34
464
2,354
3
11
472
2,400
2019
4
32
429
1,836
3
9
435
1,877
Jacqueline Hunt
2020
458
1,720
458
2019
B_Corporate Governance
The Supervisory Board is also entitled to take appropriate
account of extraordinary unforeseeable developments when deter-
mining the amount of the variable compensation. This rule takes up a
recommendation of the German Corporate Governance Code and al-
lows to adjust the remuneration in rare unforeseeable exceptional
cases. Conceivable cases of application include, for example, signifi-
cant changes in accounting rules or in the tax or regulatory framework,
as well as catastrophic events not yet known at the time of target set-
ting. The application of this rule may also lead to a reduction in the
variable compensation.
As of 31 December 2020, there were no outstanding loans by
Allianz Group companies to members of the Board of Management
of Allianz SE.
UN initiatives
Achievements 2020
Further ESG-related measures include our systematic engage-
ment with investee companies, launched in 2017 and rolled out in
2018, as well as ESG considerations in our selection and manage-
ment of asset managers.
The data related to our ESG integration approach will be included in
our Group Sustainability Report 2020. An in-depth overview of our
approach and processes to integrating ESG is published in the Allianz
ESG Integration Framework at >> www.allianz.com/esg-framework.
In our Asset Management business segment, AllianzGI and
PIMCO have developed and implemented their own processes to
manage risks and capture opportunities from ESG issues. For proprie-
tary assets that AllianzGI and PIMCO manage on behalf of other
Allianz Group entities, group-level requirements are observed in com-
bination with the asset management entities' own approaches.
Allianz co-led a multi-year project together with UNEP FI's Principles
for Sustainable Insurance initiative which resulted in the publication of
the first global guide to manage ESG risks in non-life insurance in
June 2020.
The guide shows how insurers can develop a systematic approach to
managing ESG risks such as climate change, protected sites, human
rights, controversial weapons, among others.
Targets 2021
We will actively contribute to the establishment of the UN-convened
Net-Zero Underwriting Alliance alongside other insurance firms around
the world.
Environmental Matters
This section describes the impact of environmental matters on our
business activities and relationships, as well as the impact of Allianz's
activities and relationships on the environment. Furthermore, we de-
scribe our concepts for the management of these impacts and related
achievements.
CONCEPTS
Within our Sustainability Approach, the pillar "Climate change and de-
carbonization" addresses climate change and environmental issues,
which were both identified among the three most material risks in our
materiality analysis. As a company dealing with risk, managing impact
on environmental matters - and their impact on us - is a key element
of our business approach. Not only is climate change a major risk for
societies and economies, it also directly affects our business, from our
insurance products to our proprietary and third-party investments, and
to our company's operations. We are tackling climate challenges by
promoting the transition to a low carbon economy, through our invest-
ments and insurance solutions. In addition, we actively manage emis-
sions from our operations and are committed to achieving net-zero
greenhouse gas emissions by 2050.
CLIMATE CHANGE STRATEGY
At Allianz, we anticipate the risks of climate change. Besides caring for
our customers through our insurance products, we also leverage our
position as one of the world's largest insurers and institutional investors
to help drive the transition to a low-carbon economy.
We are committed to making climate protection an integral part
of our core business and to pursuing, for both our proprietary invest-
ments and our business operations, long-term climate targets in line
with the 1.5°C ambition set forth in the Paris Climate Agreement. The
Allianz SE Board of Management's 2020 remuneration is tied to the
attainment of climate-related targets, among other things, which in-
clude the successful execution of our climate change strategy. Specifi-
cally, as a long-term target, we have committed to reducing the green-
house gas emissions from our proprietary investments to net-zero by
2050. To achieve this target - and in general to support the global tran-
sition to a low-carbon economy -, we have co-founded the U.N.-con-
vened Net Zero Asset Owner Alliance. As a first milestone towards our
net-zero target, by 2025 we aim to reduce GHG emissions in equities
and corporate bonds by 25% compared to 2019. In addition, by 2025,
our real estate portfolio will be in line with a 1.5°C pathway.
1_Cluster munitions, anti-personnel landmines, chemical and biological weapons.
48
48
Topic
2_Utilities generating 30% or more of their electricity from thermal coal and planning more than 0.3 gigawatts of coal
capacity additions as well as mining companies generating 30% or more of their revenue from thermal coal.
Targets and Achievements: ESG approach
Furthermore, we have excluded proprietary investments in coal-
based business models² since November 2015. Our criteria for the
exclusion of coal-based business-models were further expanded
in 2020.
125.0
2019
M
152.0
2.0
25.0
125.0
2020
M
181.0
6.0
50.0
125.0
In underwriting and proprietary investments in non-listed asset
classes, ESG risks have been managed through the ESG-sensitive
business guidelines outlined in the AS RRIM since 2014.
For investments in listed asset classes, the Allianz ESG scoring ap-
proach (defined in EFRI) is applied to manage related risks, since
December 2016.
Annual Report 2020 - Allianz Group
47
B_Corporate Governance
For proprietary investments, Allianz has excluded investments in
companies involved in controversial weapons¹ since 2011. Addi-
tionally, we do not provide insurance cover for activities related to
such weapons.
For the Property-Casualty insurance business, we have decided to
no longer cover single-site coal-fired power plants and coal mines
that have been operated or planned as of 2018. Furthermore, in
April 2020, Allianz publicized its approach to dealing with clients
involved with coal-based business models on a larger scale (be-
yond single sites). See our climate change strategy below for fur-
ther details.
Annual Report 2020 - Allianz Group
225.0
9.0
M
M
2019
187.5
50.0
6.0
243.5
M
M
M
M
2020
125.0
50.0
3.0
178.0
2019
125.0
50.0
240.5
3.0
50.0
187.5
484.0
M
M
C
2020
187.5
75.0
4.0
266.5
25.0
M
с
2019
187.5
75.0
6.0
268.5
M
M
2020
M
9.0
6.0
M
46
1 Environment, social and governance
The Group Underwriting Committee monitors the underwriting
business and related risk management. It also develops new un-
derwriting policies and strategies.
The Group Finance and Risk Committee oversees risk manage-
ment and monitoring, including sustainability risk. The Committee
is the point of escalation for ESG-related risk management, based
on analysis and deliberations within the ESG Board.
In addition to the Group ESG Board, there are other committees under
board member leadership that play an important role in our decision-
making processes:
Our principle governing body responsible for sustainability-related is-
sues is the Group ESG Board. Established in 2012, it is composed of
Allianz SE board members and meets quarterly. The Group ESG Board
is responsible for the sustainability agenda, including climate-related
topics, the integration of ESG into our business lines, operations and
into the core processes related to insurance and investment, and the
Group's activities related to our societal impact. The board members
each assume responsibility for specific sustainability matters and ded-
icated departments directly provide the Group ESG Board with regular
updates on sustainability matters.
GOVERNANCE
We aim to create sustainable economic value by pursuing a long-term
approach to environmental stewardship, social responsibility, and cor-
porate governance. This is critical to our business success, as we are
committed to delivering on our promises to our stakeholders, in partic-
ular our customers, investors, and society as a whole. To deliver on our
purpose "We secure your future" and the ambition to be a global sus-
tainability leader, we continually strive to adapt our business strategy
to any issues that arise.
Strategy
Any references to information published outside the Group Man-
agement Report and Allianz SE's Management Report are supple-
mentary, do not form an integral part of this non-financial information,
and are not subject to any assurance engagement (unless specified in
the respective document).
PricewaterhouseCoopers GmbH Wirtschaftsprüfungsgesellschaft
has performed a reasonable assurance engagement on the 2020 non-
financial information. All 2020 data included in this report was assessed
based on this reasonable assurance engagement, whereas baseline
data on GHG emissions and green electricity was assessed based on a
limited assurance engagement. For further information, please refer to
our Independent Practitioner's Report on a Reasonable Assurance
Engagement on Non-Financial Reporting.
This non-financial section of our 2020 annual report covers the en-
tire Allianz Group and also includes the relevant non-financial infor-
mation for Allianz SE. Where Allianz SE's concepts and processes differ
from those applied on the Group level, they are described separately.
All measures, activities, and key figures refer to the 2020 financial year
(1 January 2020 to 31 December 2020). Where appropriate, we com-
pare our targets, set in the previous year with the achievements from
this year, and define our targets for next year. Unless otherwise stated,
we use the control principle defined by the International Financial Re-
porting Standards when determining the scope of our reporting for
Allianz Group.
The concepts contained in this report are in line with the content
of our 2020 Group Sustainability Report, which is compiled in accord-
ance with the standards set out by the Global Reporting Initiative (GRI)
and will be published on 29 April 2021.
information, please see www.allianz.com/sustainability/low-
carbon-economy/decarbonization.
and our performance will be disclosed in future reporting. For further Corporate Responsibility Governance and
our
We provide property-casualty and life/health insurance as well as
asset management products and service to our customers around the
world. In our activities as a financial services provider, we take
sustainability-related risks such as climate change into consideration
and pursue opportunities from ESG¹ trends. We describe our
management approach to these matters in this section. For further
information on our Business Model, see our Business Operations, and
Group Sustainability Report 2020, > section 01.2,
> www.allianz.com/sustainability.
Company description
This section has been compiled in accordance with the Corporate Social
Responsibility (CSR) Directive Implementation Act (EU Directive
2014/95/EU). It focuses on the concepts and key performance
indicators (KPIs) that reflect our most material sustainability issues. The
KPIs included are the Net Promoter Score (NPS), the Inclusive
Meritocracy Index (IMIX), and our environmental indicators
(greenhouse gas (GHG) emissions per employee and percentage of
green electricity). Based on our commitment to setting ourselves long-
term climate targets, we have devoted 2020 to developing indicators
and intermediary targets for the carbon performance of our proprietary
investment portfolio. These targets were published in January 2021,
Annual Report 2020 - Allianz Group
About the report
B_Corporate Governance
Our group-level sustainability function is responsible for manag-
ing the strategic framework for all group-wide sustainability activities,
developing and introducing relevant policies supporting with report-
ing on non-financial matters, and supporting operating entities (OES)
in integrating the Group's strategic approach and policies.
As a global insurer, investor and asset manager, understanding
ESG issues allows us to reduce risks and capture opportunities in un-
derwriting, claims, proprietary investment management, and asset
management. Our concepts for all other matters for which reporting is
required will be addressed in subsequent chapters. The ESG approach
provides part of the foundation for these concepts.
With regard to the requirements introduced in 2017 through the Ger-
man CSR Directive Implementation Act, we have not identified any re-
maining principal risks resulting from our operations, business activi-
ties, and business relations that could have severe adverse effects on
material non-financial matters. Any potential risks and impacts identi-
fied throughout our risk assessment have been addressed by the re-
spective concepts we have in place, which we describe in this report.
RISK MANAGEMENT
Moreover, we seize business opportunities associated with sus-
tainability matters for example, in the areas of sustainable solutions
and sustainable investments (such as in renewable energy or afforda-
ble housing).
we address risks and trends that might affect us. Through our ESG Busi-
ness Integration approach, we also review and evaluate social and en-
vironmental effects arising from our business activities and business re-
lations.
ESG Business Integration
Climate change and decarbonization,
Societal Impact,
Within the three main themes comprised in our sustainability ap-
proach
SUSTAINABILITY APPROACH
Additionally, for information on the materiality analysis process
and outcomes, please refer to our Group Sustainability Report 2019,
> section 02:5 > www.allianz.com/sustainability.
While we did not conduct a new materiality assessment in 2020,
we did review our 2019 results with colleagues from Group Regulatory
and Public Affairs, Group Economic Research and Global Sustainabil-
ity in light of the COVID-19 pandemic and other developments to high-
light its impact on our strategy and reporting. No new material topics
were identified during this review. For more details on the outcome of
this review, please refer to our Group Sustainability Report 2020,
> ___:_:_:_:_:_:_: 02:55 > www.allianz.com/sustainability.
All climate and environment-related topics are covered in "Environ-
mental Matters", while product-related issues are covered in "Social
Matters", which covers topics like emerging consumers and data pri-
vacy concepts.
Providing environmental and social products,
Environmental issues.
Climate change,
Our most recent materiality assessment was carried out in 2019.
Our top-3 material topics in 2019 were:
We consider the outcomes of the materiality assessment in our
sustainability approach, strategy and reporting. This drives us to focus
on the risks, opportunities, issues and impacts that matter most to our
stakeholders and which we have the ability to influence.
We need to understand and respond to the changing world around us
in order to succeed and make a positive impact on society. Our mate-
riality assessment identifies the ESG issues that are perceived as being
most important to our stakeholders and our businesses. We have rec-
ognized four stakeholder groups most immediately affected by our
business activities: customers, employees, investors, and society as a
whole.
MATERIALITY
Until 31 December 2020, the corporate responsibility function
was part of Group Communications and Corporate Responsibility. As
of 1 January 2021, Allianz's ESG agenda will be managed by a new
Global Sustainability function. Along with this new function, Allianz is
establishing the role of a Chief Sustainability Officer (CSO). The crea-
tion of a dedicated sustainability function reflects the increasing im-
portance of these topics to Allianz. The CSO will be reporting to the
Chair of the ESG Board.
The Board of Management and the Supervisory Board are also up-
dated and involved in relevant decisions about sustainability-related
matters.
COMBINED SEPARATE NON-FINANCIAL REPORT
B_Corporate Governance
45
M
179.0
4.0
50.0
125.0
2020
M
M
156.0
6.0
25.0
125.0
2019
M
154.0
4.0
25.0
125.0
2020
M
2019
125.0
50.0
Annual Report 2020 - Allianz Group
In 2021, the Supervisory Board will also set up a Sustainability
Committee, in particular, to closely monitor the sustainability strategy
of the Allianz SE Board of Management. The remuneration is set at the
usual committee remuneration level of € 50 thou for the Chairperson
and € 25 thou for a regular member.
The remuneration of the Supervisory Board of Allianz SE was last
amended by the Annual General Meeting on 9 May 2018. In light
of the statutory provisions, the Annual General Meeting of Allianz SE
I will vote on the Supervisory Board's Remuneration System on
5 May 2021, which will also entail remuneration for members of the
Nomination Committee. The remuneration is set at half of the usual
committee remuneration and amounts to € 25 thou for the Chairper-
son and € 12.5 thou for a regular member. This remuneration takes
into account the increased tasks in the selection of suitable candi-
dates for the election of shareholder representatives on the Supervi-
sory Board as well as the increased selection frequency due to the
proposed shortening of the term of office of shareholder representa-
tives on the Supervisory Board from five to four years.
OUTLOOK 2021
LOANS TO MEMBERS OF THE SUPERVISORY BOARD
As of 31 December 2020, there were no outstanding loans by
Allianz Group companies to members of the Supervisory Board.
Mr. Jürgen Lawrenz did not receive any remuneration for his service on
the Supervisory Board of Allianz Technology SE. All current employee
representatives of the Supervisory Board, except for Ms. Martina
Grundler, are employed by Allianz Group companies and receive
market-based remuneration for their services.
REMUNERATION FOR MANDATES IN OTHER ALLIANZ
COMPANIES AND FOR OTHER FUNCTIONS
2_The total reflects the remuneration of the full Supervisory Board in the respective year.
Legend: C = Chairperson of the respective committee, M = Member of the respective committee
1_Abbreviations: A - Audit, N - Nomination, P - Personnel, R - Risk, S - Standing, T-Technology
156.0
2,685.0
850.0
2,652.0
52.0
850.0
1,750.0
1,750.0
2019
2020
181.0
6.0
85.0
LOANS TO MEMBERS OF THE BOARD OF
MANAGEMENT
184.0
2020
Nomination
Committee
Technology
Committee
Standing
Committee
€ 125 thou
Regular Member
€ 50 thou
€ 25 thou
Risk Committee
€ 100 thou
€ 50 thou
Chairperson
Regular Member
Committee
Personnel.
Audit Committee
COMMITTEE-RELATED REMUNERATION
€ 187,5 thou
Vice Chairperson
FIXED ANNUAL REMUNERATION
€ 250 thou
Chairperson
The Chairperson and members of the Supervisory Board committees
receive additional committee-related remuneration. The committee-
related remuneration is as follows:
ATTENDANCE FEES AND EXPENSES
COMMITTEE-RELATED REMUNERATION
none
In addition to the fixed and committee-related remuneration, members
of the Supervisory Board receive an attendance fee of € 1,000 for each
Supervisory Board or committee meeting they attend. Should several
meetings be held on the same or consecutive days, the attendance fee
will only be paid once. In addition, Allianz SE reimburses the Supervi-
sory Board members for their out-of-pocket expenses and the VAT
payable on their Supervisory Board service. The company provides in-
surance coverage and technical support to the Supervisory Board
members to an extent reasonable for carrying out their Supervisory
Board duties. In the course of the latest change to the German Corpo-
rate Governance Code, the recommendation for a 10% deductible for
members of the Supervisory Board in the D&O insurance was deleted
without replacement. In light of the reasons of the respective Code
Commission for this change, i.e., that a deductible would not present a
suitable means to increase the sense of responsibility and motivation
of Supervisory Board members, it was decided to waive the deductible
when signing a new D&O insurance contract in 2020.
Godfrey Robert Hayward
Herbert Hainer
Martina Grundler
Jean-Claude Le Goaër
Dr. Friedrich Eichiner
Christine Bosse
Sophie Boissard
(Vice Chairwoman)
Gabriele Burkhardt-Berg
(Vice Chairman)
Jim Hagemann Snabe
(Chairman)
Michael Diekmann
Members of the Supervisory Board
€ thou (total might not sum up due to rounding)
The total remuneration for all Supervisory Board members, including
attendance fees, amounted to € 2,652 thou (2019: € 2,685 thou). The
following table shows the individual remuneration for 2020 and 2019:
REMUNERATION FOR 2020
Annual Report 2020 - Allianz Group
44
none
The remuneration of a Supervisory Board member consists of a fixed
cash amount paid pro rata temporis after the end of the respective
quarter of the business year for services rendered over that period. In
2020, each regular Supervisory Board member received a fixed com-
pensation amounting to € 125 thou per year. The Chairperson
received € 250 thou, each Vice Chairperson received € 187.5 thou.
FIXED ANNUAL REMUNERATION
REMUNERATION STRUCTURE AND COMPONENTS
The remuneration structure, which comprises fixed and committee-
related remuneration only, was approved by the Annual General
Meeting in 2018 and is laid down in the Statutes of Allianz SE.
1,593
1,911
2021
1,422
1,706
2020
compensation
Total
Pension
contribution
Long-term 100%
incentive
bonus
In € thou
Annual
Base salary
The Supervisory Board has decided to adjust the total target and
overall compensation cap of the Chairman of the Board of Man-
agement effective 1 January 2021. The increase of the target
compensation was actually already planned for 2020 due to the
contract extension of Oliver Bäte on 1 October 2019 and is in line
with the usual approach at Allianz to increase the target compen-
sation of the Chairman of the Board to market level only if - as
in the case of Oliver Bäte - performance and success prove to be
sustainable. The increase was postponed and the originally
planned resolution on the Board of Management remuneration
system was not submitted to the Annual Shareholders' Meeting
for approval in 2020 in order to be able to update the horizontal
comparison once again on the basis of the remuneration reports
of peer companies published in 2020. This horizontal comparison
has led to the following conclusion: The annual target compen-
sation excluding pension contributions will be increased from
€ 5,687 thou to € 6,371 thou, and the overall compensation cap
will be adjusted from € 10,000 thou to € 11,750 thou respectively.
The ratio of the Chairman of the Board's target compensation to
that of an regular board member has thus been set at 1.96, up
from the previous factor of 1.75. This factor corresponds to the
average ratio of regular board members to board chairmen in
the DAX. In addition, the compensation of the Board of Manage-
ment was subjected to a horizontal comparison with DAX com-
panies and international competitors. This showed that Allianz is
in the 86th percentile of DAX companies relative to its size (reve-
nue, number of employees and market capitalization). The
Supervisory Board has set the 75th percentile as the appropriate
level of target compensation in terms of the horizontal compari-
son. The target compensation of the regular board members is at
the 75th percentile and was therefore found to be appropriate,
while the target compensation of the Chairman of the Board is
only at the 55th percentile and was therefore not appropriate. The
new target compensation of the Chairman of the Board is also at
the 75th percentile. The adjustment of the target compensation of
the Chairman was made with the consent of the social partners
(employee representatives of the Supervisory Board) of
Allianz SE.
TARGET COMPENSATION ADJUSTMENT FOR THE
CHAIRMAN OF THE BOARD OF MANAGEMENT OF
ALLIANZ SE
The remuneration of the new regular members of the Board of
Management of Allianz SE, Dr. Barbara Karuth-Zelle and Christo-
pher Townsend, has been set at the same level as for the other regular
members of the Board of Management.
NEW BOARD MEMBERS
OUTLOOK FOR 2021
2,559
2,867
5,687
853
6,371
The remuneration structure allows proper oversight of business as
well as independent decisions on executive personnel and remu-
neration.
The remuneration structure takes into account the individual
functions and responsibilities of Supervisory Board members, such
as chair, vice chair, or committee mandates.
In view of the activities and its business and financial situation of
Allianz, the amount of the remuneration for the Supervisory Board
is based on the fourth quartile of the Supervisory Board remuner-
ation of the companies reported in the DAX.
REMUNERATION PRINCIPLES
The remuneration of the Supervisory Board is governed by the Statutes
of Allianz SE and the German Stock Corporation Act. The structure
of the Supervisory Board's remuneration is regularly reviewed with
regard to its compliance with German, European, and international
corporate governance recommendations and regulations.
Remuneration of the Allianz SE Supervisory
Board
B_Corporate Governance
Annual Report 2020 - Allianz Group
43
Frank Kirsch
B_Corporate Governance
The Supervisory Board may also adjust the target compensation
of the members of the Board of Management insofar as this is appro-
priate to ensure that the compensation of the Chairman of the Board
of Management or a regular member of the Board of Management is
appropriate with regard to their duties and performance. In doing so,
it shall take into account the comparison of board compensation hor-
izontally and vertically. The aim of this rule is to adjust board compen-
sation moderately on the basis of horizontal and vertical compensa-
tion trends and thus avoid major compensation increases. It does not
constitute an automatic adjustment, but requires a justified decision by
the Supervisory Board in each case. Such a moderate adjustment of
the target compensation does not in itself represent a significant
change to the compensation system. These adjustments or deviations
must be justified in detail in the respective remuneration report for the
reported financial year. The remuneration report is prepared in accord-
ance with ARUG II and submitted to the Annual Shareholders' Meeting
for approval.
Annual Report 2020 - Allianz Group
42
The types of ESG risks Allianz considers to be material in its insurance
and investment activities are summarized in the Allianz ESG Integra-
tion Framework. ESG risks can turn into legal risks, reputational risks,
supply chain and business disruption risks, quality risks, operational
risks, human-rights risks, financial risks, and/or investment risks for
Allianz, its customers, and/or its invested companies. ESG topics are in-
tegrated in our insurance, investment, and asset management busi-
nesses through multiple instruments. They include internal standards,
guidelines, and processes such as the Allianz Standard for Reputa-
tional Risk and Issue Management (AS RRIM), the Allianz Standards
for P&C Underwriting (ASU) and the Allianz ESG Functional Rule for
Investments (EFRI). An overview of the Group's key ESG integration
processes is described below:
The first change relates to the possibility of temporarily deviating
from the remuneration system in exceptional circumstances in accord-
ance with the statutory provision (§87a (2) German Stock Corporation
Act), if this is necessary in the interests of the long-term welfare of the
company. The assessment may take into account both macroeco-
nomic and company-related exceptional circumstances, such as
impairment of the long-term viability and profitability of the company.
Any deviation requires a prior proposal by the Personnel Committee.
The components of the remuneration system from which deviations
may be made in exceptional cases include in particular the base sal-
ary, the annual bonus and the long-term incentive (LTI), including their
relationship to each other, their respective assessment bases where
applicable, the target setting and target achievement assessment
principles, and the determination of any payout and payment dates.
The duration of the deviation shall be determined by the Supervisory
Board at its due discretion, but should not exceed a period of four
years. In a crisis situation, for example, this provision is intended to
allow the appointment of a new board member, e.g., with crisis man-
agement expertise, with a compensation structure that temporarily
deviates from the remuneration structure.
At its meeting on 18 February 2021, the Supervisory Board adopted
the current remuneration system for the Board of Management of
Allianz SE. It differs only slightly from the system applicable until 2020
and takes into account, among other things, the current requirements
of the German Stock Corporation Act (ARUG II) and the German Cor-
porate Governance Code through technical adjustments. The remu-
neration system for the Board of Management thus adopted will be
submitted to the 2021 Annual Shareholders' Meeting for approval.
ADJUSTMENT OF THE BOARD OF MANAGEMENT'S
REMUNERATION SYSTEM OF ALLIANZ SE
6,540
7,327
956
By way of clarification, it is mentioned that members of the Board
of Management appointed for the first time may be granted corre-
sponding payments or benefit commitments in connection with the
commencement of their appointment to the Board of Management of
Allianz SE in order to compensate for compensation or pension enti-
tlements forfeited with previous employers. Such compensation com-
mitments are important for the possibility of attracting external candi-
dates for the Board of Management. Payments made on the basis of
these commitments are by their nature not considered with regard to
the calculation of the overall compensation cap.
M
Jürgen Lawrenz
B_Corporate Governance
284.0
M
2020
125.0
75.0
3.0
203.0
M
2019
125.0
75.0
9.0
209.0
2020
125.0
50.0
4.0
179.0
2019
9.0
125.0
150.0
2019
125.0
25.0
3.0
153.0
Ο Ο Σ Σ Σ Σ
C
Σ Σ Σ
2019
125.0
25.0
6.0
156.0
M
2020
125.0
150.0
6.0
281.0
M
125.0
50.0
7.0
182.0
C
C
C
M
tion
Total
remunera-
Attend-
ance fees
tion
remunera-
remunera-
tion
T
S
R
P
N
A
Committee
Fixed
Committees¹
с
M
2020
250.0
M
M
ΣΣ
2020
125.0
50.0
5.0
180.0
2019
Total²
250.0
M
с
C
C
C
M
486.0
11.0
225.0
2019
Individual remuneration: 2020 and 2019
10
26
We continue to support low-income consumers in Asia, Africa, and
Latin America, where the majority of people are still severely underin-
sured. Responsibility for managing the emerging consumers business
lies with the local Allianz OEs. We are determined to expand our range
of offerings to emerging consumers further with the goal being to close
the protection gap for people currently lacking access to low-cost fi-
nancial services tailored to their needs.
In 2020, Allianz Group contributed through
Corporate Giving and employee volunteering, as
well as activities through its 12 corporate
foundations. We had corporate citizenship
activities benefiting communities worldwide. For
further insights into our corporate citizenship
activities, please refer to our Group
Sustainability Report 2020, section 04.9.
In 2020 our partnership with SOS CVI with a
focus on Emergency Preparedness & Response
and Youth Employability programs (e.g.
international Online Mentoring program
connecting Allianz employees and SOS CV
youth) continued. SOS CVI was also our global
disaster relief partner, through which we
provided immediate relief and/or long-term care
on the grounds in response to e.g. COVID-19 in
Italy and Indonesia, explosion in Lebanon and
the refugee camp Moria in Greece. For further
insights to our partnership, refer to our Group
Sustainability Report 2020, section 04.9.
Continue to contribute to society through
corporate giving and employee volunteering in
alignment with our strategy.
Continue to work with our partner to increase
resilience of and equal opportunities for children
and young people.
Since many of those markets lack an established financial
services infrastructure, our emerging consumers approach also
focuses on digitalization. To make the most of existing opportunities,
we are partnering with digital businesses to distribute and expand our
reach, for example through mobile-phone-based insurance products.
Further information on the Allianz concept for emerging consumers is
disclosed in our
Emerging Consumers Report.
www.allianz.com/en/sustainability/publications-news/publications.
Annual Report 2020 - Allianz Group
51
B_Corporate Governance
Targets and Achievements: Emerging Consumers Concept
Topic
Achievements 2020
Allianz's Emerging Consumers business and partnerships Despite the COVID-19 pandemic's negative social and economic
impact, we were able to maintain or even increase our outreach to
emerging consumers in a number of target countries in 2020. We also
continued to intensify our strategic partnership with the Swedish
microinsurance and telehealth specialist BIMA: Following our initial
investment in 2017 and the start of our joint collaboration with the
German development agency GIZ to develop the next generation of
mobile insurance products in 2019, we reiterated our commitment to
BIMA and the emerging consumers segment by a follow-on investment
in BIMA in 2020.
Increase the resilience and equal opportunities
of children and young people in 2020 by
focusing specifically on Emergency Preparedness
& Response and Youth Employability programs.
EMERGING CONSUMERS
Long-term global partnership with SOS Children's
Villages International (SOS CVI)
Corporate citizenship activities
CONCEPTS
As a global insurer, we uphold the principle of solidarity. Pooling risks
is at the heart of our business model, and we have a keen interest in
supporting stable communities. With the COVID-19 pandemic impact-
ing the lives, health, and livelihood of people in many countries world-
wide, the subject of social responsibility has assumed even greater
importance for Allianz in 2020. This has strengthened our conviction
that businesses can thrive best in equitable societies. We approach our
social responsibility with a long-term view on relevant developments,
and we dedicate our time, skills, and money to social issues both within
company walls and beyond. For further insights into our concepts,
please refer to our Group Sustainability Report 2020, section 04.9.
SOCIETAL IMPACT
In 2020, we further developed our existing approach to social matters
and developed our new strategy. Our overall mission is to drive
Targets and Achievements: Societal Impact
transformative changes in order to enable the next generation to
achieve self-sustaining livelihoods. Based on our materiality assess-
ment, we have defined three key areas:
Supporting equal opportunities while mitigate inequality.
Targets 2021
We pursue these targets by offering a range of solutions to emerging
consumers, which are designed to provide people with access to finan-
cial services suited to their needs. Inside our company, we promote
equal opportunities, fight inequality, and work to establish and main-
tain a culture of diversity and inclusion. Specifically, we support women
in management as well as people with disabilities, and we have dedi-
cated networks in place for the LGBT (Lesbian, gay, bisexual,
transgender) community. Moreover, we run health and well-being pro-
grams for our employees. Responsibility for the implementation of the
framework lies with the Corporate Responsibility Team at the Group
level and with our OEs at the local level. The responsible teams regu-
larly report on progress to the Group ESG Board.
Topic
Evolution of the Encouraging Future Generations
Program
Targets 2020
Achievements 2020
In 2020, we started to implement our new
strategy for corporate citizenship activities as an
evolution to our Encouraging Future Generations
Program.
Targets 2021
Continue with the implementation of the new
strategy.
For the external public, Allianz publishes annual updates on its
progress in each of these three areas - insurer, employer, and commit-
ted corporate citizen - in three reports: the Emerging Consumers Re-
port, the People Fact Book, and the Group Sustainability Report.
We aim to continue our expansion in Africa, Asia, and Latin America and
to support a growing number of Emerging Consumers - especially with
digital products and services - by partnering with insurtechs, mobile
network operators, mobility platforms, and other digitally operating
partners. Following the extension of our footprint in East Africa, we will
also seek to expand our outreach to emerging consumers in this region
in 2021.
DATA ETHICS internal governance framework for Al, in 2020 we developed Al Prac-
Our strong reputation is built on customers', shareholders', employees'
and the general public's trust in our integrity. This trust hinges on the
quality of our products, the information and advice we provide to our
customers, and the personal conduct and capabilities of our sales em-
ployees and representatives.
We achieved the highest ever measured NPS results for Allianz:
- 45 out of 57 measured segments have been either above local
market or Loyalty Leaders resulting in a share of 79 % (2019: 70%).
- 34 out of 57 measured segments have been Loyalty Leaders
resulting in a share of 60 % (2019: 46 %).
This means that we exceeded the 2021 group target (75% +
outperforming) one year ahead of time. Main drivers for this success
have been Voice of the customer, Product simplifications, Expanding
digital service offerings and COVID-19 measures.
For over 75% of Allianz Group business segments to outperform their
local market (meaning either above market or Loyalty Leader position).
DATA PRIVACY
Digitalization enables more people to access insurance products. We
embrace the resulting opportunities through our Digital by Default
strategy, which was implemented along with our Data Privacy Renewal
Agenda in 2015. Digitalization, however, also comes with data privacy
and protection risks. Data privacy matters are managed by the Data
Privacy function. We take these risks very seriously, and we are enforc-
ing robust security and privacy controls to reassure our customers that
their personal data is safe and secure.
Our Allianz Privacy Framework includes a global standard for
data privacy, a privacy impact assessment and risk management pro-
cess, integration with information security standards and practices,
and dedicated training programs to familiarize employees with the
procedures to correctly process customers', employees', and third-party
partners' personal data. All measures are subject to regular audit and
assurance activities.
Global NPS performance, Allianz Group
The Allianz Privacy Standard defines rules and principles for col-
lecting and processing personal data. Established in 2018, it sets out
six privacy principles we expect all our employees to respect: due care,
purpose specification, reasonable limitation, transparency and open-
ness, choice and consent, and privacy by design. In addition, we pub-
lish a privacy notice on our Allianz.com website which clearly states
what information we collect and why.
In 2016, we introduced an application across all Allianz Group
companies to facilitate the execution of PIAs. In conjunction with training
sessions, the PIA tool permits a more uniform approach to the assess-
ment and mitigation of privacy risks across the Allianz Group. We regu-
larly reassess the methods we applied in performing PIAs and monitor-
ing the risk of processing activities, and ensure that any PIA enhance-
ments are adopted quickly. Privacy risks are also included in our Inte-
grated Risk and Control System (IRCS).
Another, equally important matter is the security of the personal
data we handle. As part of our Robust Information Security Frame-
work, we consistently apply exacting security processes, standards, and
tools at a global level. The framework also defines minimum require-
ments based on the ISO 27001 Standard for Information Security Man-
agement. This standard specifies various requirements for three fields:
vulnerability assessment along the software development value chain
(including penetration tests and security audits), system monitoring via
multi-level security systems, and effective IT security management and
business continuity management.
We keep abreast of regulatory and industry developments and
aim to reflect these in our operational and governance processes. For
example, in response to the changes in the E.U. General Data Protec-
tion Regulation (GDPR) that came into force in May 2018, we initiated
the Allianz Privacy Renewal Program (APRP) - a major effort to align
our privacy practices with the requirements of the GDPR. This work included
work streams across the topics of data subject rights, data handling,
training, accountability & governance, security & confidentiality,
change management, and assurance & monitoring. In June 2020, the
OES certified that all of the required controls introduced by the APRP
were fully deployed.
Additionally over the past two years, we have addressed new
data privacy developments in Brazil, India, and the United States,
among other jurisdictions. More recently, we have responded to judi-
cial and regulatory statements on the GDPR, including as concerns
cross-border data transfers and the use of social media, for which we
have drafted practical guidance for our OEs.
Digital privacy guidelines provide guidance on privacy-related
topics that affect digital projects, both for privacy by design as part of
new-product and service design processes, and for privacy by default
which means that wherever individuals are given choices on the use
and sharing of their personal data, default settings restrict the disclo-
sure.
Annual Report 2020 - Allianz Group
As part of our Privacy Risk Management, we consider the identi-
fication and management of privacy risks as an integral part of our
operational processes. Consequently, we measure, monitor, and reme-
diate risks across Allianz's core businesses. For so-called high-exposure
processes that use personal data, we carry out Privacy Impact Assess-
ments (PIAs) to allow early identification of high-risk areas and ensure
they are appropriately managed over the project lifecycle, including
when changing an existing product or service.
This section describes the impact of social matters on our business
activities and relationships as well as, vice versa, the impact of Allianz's
activities and relationships on society as a whole. In addition, we
describe the concepts and achievements related to the management
of these impacts with a focus on social inclusion, emerging consumers,
responsible consumer/sales policies, and data privacy.
Ensure the new Sales Compliance Framework implementation
throughout the Group.
The new Allianz Standard for Sales Compliance outlines rules and
principles to ensure that our companies offer fair and transparent
products. We will continue the review of new products so that these
are in line with the parameters set out in the Standard.
Since 2011, we have been adhering to a Global Sales Compli-
ance Framework Program managed by the compliance team, which
specifies standardized processes and controls for communication,
monitoring, and review. In 2020, we revised this framework to reflect
recent developments in regulatory standards. Our existing sales com-
pliance requirements were condensed into a new corporate rule, the
Allianz Standard for Sales Compliance. This standard is now our consol-
idated customer protection framework. In addition to providing ground
rules for compliant and ethical sales practices across the Allianz Group, it
lays down a set of key principles to ensure fairness and transparent
information to customers - including on distributors' remuneration -
and outlines the specific sales compliance risks our business segments
face.
This framework and the associated controls allow us to highlight
our clear commitment to fairness and transparency, as expressed in
our Code of Conduct. The Code emphasizes that fairness towards cus-
tomers and transparent communication about our products and ser-
vices, including their limitations, maximizes our chances to earn cus-
tomers' long-standing trust. A responsible sales approach is likely to
increase customer satisfaction - and satisfied customers, in turn, are
more likely to be loyal to Allianz and recommend us. Our customers'
interests take priority whenever they seek advice from us.
Since 2006, we have been measuring customer loyalty using the
Net Promoter Score (NPS). The NPS measures our customers' willing-
ness to recommend Allianz, and we regularly apply the Top-Down NPS
in accordance with global, cross-industry standards, allowing us to
benchmark our scores against those of competitors in the respective
markets. In 2016, we refined the NPS methodology and established a
group-wide standard for the retail customer NPS, which helps us rate
Allianz businesses with regard to key business drivers such as brand,
product, price, and service. Around the same time, we introduced our Cus-
tomer Excellence Program to systematically measure customer experi-
ence, identify key areas for improvement, and pursue an integrated
approach to enhance the drivers of customer satisfaction along the
entire customer journey.
In 2019, we introduced the Voice of the Customer Program (as
part of the Customer Excellence Program), which allows us to continu-
ally monitor and improve customer journeys based on a standard rat-
ing method: After several touchpoints along our five customer jour-
neys, customers are invited to rate their satisfaction level on a five-star
scale. When ratings are at 3 stars or below, we follow up within 48
hours to gain more insights and, if possible, resolve the issue directly
with the customer. The learnings from this approach allow Allianz to
systematically improve not only our internal processes but also cus-
tomers' experience in dealing with us. In the interest of full transpar-
ency, we intend to publish all feedback from motor claims customers
on our website, making them visible to all existing and potential cus-
tomers.
Complaints are another important source of customer feedback,
and we analyze them carefully to identify potential levers for improve-
ment. All matters related to NPS and customer feedback are man-
aged by the Group Strategy, Marketing, Distribution team.
In 2020, we kicked off a transition process to digitalize our Top-
Down NPS process, in line with our three principles "simple, digital &
scalable." In this pilot phase, we applied the digital process to 30 met-
rics in 15 OEs. In 2021, we will roll it out to include 66 measurements in
38 OEs. The entire transition will be completed in 2022 until then, cur-
rent procedures remain standard for any external communications.
In order to ensure that we will achieve our global ambitions for
2021, we plan to continue hosting so-called "NPS activation work-
shops" with all entities in scope. Global initiatives addressing custom-
ers' pain points - such as Voice of the Customer, Product Simplification,
or Digital Services - will be extended. In addition, we will continue to
implement our Allianz-specific COVID-19 measures like dedicated
communication, customer care and corporate social responsibility. We
will also develop new initiatives to support our customers during this
pandemic.
Targets 2021
OES which faced challenges in implementing either global initia-
tives or COVID-19 measures received dedicated support in 2020 and
will also be supported going forward. The process is orchestrated by
Group Strategy, Marketing, and Distribution
52
Annual Report 2020 - Allianz Group
B_Corporate Governance
Targets and Achievements: Responsible consumer/sales
Topic
Allianz Standard for Sales Compliance
Achievements 2020
662
RESPONSIBLE CONSUMER / SALES
Social Matters
Annual Report 2020 - Allianz Group
As part of our dedication to our customers, we advise them on
how to reduce climate change-related risks and minimize related
damages, while indemnifying those who have suffered losses. We are
also working on insurance solutions for climate-vulnerable popula-
tions in developing countries. Partnering with peers, NGOs, scientists,
and the public sector, we are piloting new approaches that combine
insurance offerings with resilience-strengthening measures. For in-
stance, approaches to incentivizing risk reduction include dedicated
training and advice as well as risk-differentiated premium structures.
Key initiatives in this field that we engage in include the Insurance De-
velopment Forum (IDF), the Munich Climate Insurance Initiative (MCII),
the Geneva Association and the InsuResilience Global Partnership.
Since 2018, we have been implementing disaster risk management
and transfer projects within our Strategic Alliance with the German De-
velopment Agency (GIZ).
Promoting the transition to a low-carbon economy and contrib-
uting our share to limit global warming to 1.5°C are among our key
concerns. We therefore provide insurance solutions for renewable-
energy products and energy efficiency. We are also investing in low-
carbon technologies such as renewables and energy efficiency.
We work with policymakers and regulators to support sustainable
financing and achieve the goals laid down in the Paris Climate Agree-
ment. We also promote the expansion of companies' climate-related
reporting. At Allianz, we report on climate-related opportunities and
risks based on the framework developed by the G20's Task Force on
Climate related Financial Disclosures (TCFD). The relevant disclosure
can be found in our Group Sustainability Report 2020, > section 05.1
www.allianz.com/sustainability.
Achievements 2020
We set our first intermediate 2025 target as part
of our "net-zero by 2050" commitment for our
proprietary investment portfolio as well as
operations (see subsequent section
"environmental concept" for operational
emission targets).
We further worked on the implementation of our
coal exclusion approach in proprietary
investments and Property-Casualty
underwriting. We engaged with more than 30
insurance clients on transitioning away from
coal. For further insights into our divestments,
please refer to our Group Sustainability Report
2020, Section 05.6.
Together with our partners at the AOA we
achieved the following:
- Grew to 33 members across three continents
with > USD 5 tn AUM.
- Developed inaugural Target-Setting Protocol.
- Started engagements with policy-makers,
regulators, sectors and companies.
- First position papers and statements
published.
Targets 2021 and beyond
For our proprietary investment portfolio, we aim
to reduce GHG emissions to net-zero by 2050. As
intermediary target, we aim to reduce our
emissions in listed equities and corporate bonds
by 25% by 2025 compared to 2019 level. The fully
owned real estate portfolio will be in line with
scientifically based 1.5-degree pathways by 2025.
For our operational emission targets see
subsequent section "environmental concept".
- Fully phase out coal-based business models
across our proprietary investments and
Property-Casualty portfolios by 2040 at the
latest.
- Develop inaugural Target-Setting Protocol.
- Engage with policy-makers, regulators,
sectors and companies.
- Further increase the number of members and
assets under management.
- Engage with companies in proprietary
investment as well as P&C portfolios to move
away from coal.
Fully phase out coal-based business models
across our proprietary investments and P&C
portfolios by 2040 at the latest along 1.5°C
pathway.
B_Corporate Governance
Our climate change strategy anticipates, across our lines of
business, the risks associated with a changing climate. Climate change
considerations are an integral part of our insurance and investment
strategy, which is informed by regular climate-related scenario
analyses: Using internal models and external tools, we perform
sensitivity and scenario analyses with time horizons extending to 2050,
and with global warming scenarios ranging from 1.5°C to 4°C. For
more details on climate scenario analyses, see section 05.4 of our
Group Sustainability Report. In pursuing our investment business, we
consider climate-related criteria such as carbon emissions, energy
efficiency, vulnerability to climate change, and opportunities in clean
tech as part of our ESG integration approach for listed and non-listed
assets. We also systematically engage with investee companies
exposed to high ESG risks, offering advice and encouraging them to
define and pursue their own climate strategies in line with the latest
scientific findings. For further insights into Allianz's ESG engagement
approach, please refer to our Group Sustainability Report 2020,
> ___:_:_:_:_: 03:2 > www.allianz.com/sustainability.
For several years we have been pursuing a decarbonization
strategy. We are committed to fully withdrawing from
coal-based business models across our entire proprietary
investment and Property-Casualty portfolios by 2040 at the latest.
For further information on our coal policy, please refer to
coal-based business models"
our
"statement
on
> www.allianz.com/press/news/business/insurance/180504-allianz-
- Reduce threshold for coal-based business
models for P&C insurance as well as
investment portfolios from current 30 % to
25% as of 31 December 2022.
announces-climate-protection-package.
Targets and Achievements: Climate Change Strategy
Topic
Decarbonizing our investments
Phase out of coal-based business models
Net-Zero Asset Owner Alliance
Targets 2020
Set long-term and intermediary climate targets
(2025) for proprietary investments in line with
1.5°C based on AOA framework for target
setting.
For more information on our current state of progress, please see
section 05.6 of our Group Sustainability Report on "targets and target
performance">www.allianz.com/sustainability.
- Carry out and disclose portfolio baseline
assessments.
- Develop climate strategies and actions plans,
including trajectories.
Achievements 2020
- Our carbon footprint per employee was 1.4
tons (2019: 2.4). This represents a 62%
reduction, against a 2010 baseline¹.
- Key approaches to meet the 2020 target were
improvements in energy efficiency, due to
data center consolidation, as well as an
increase of the share of renewable power in
our energy mix. Further emissions reductions
were the result of COVID-19 pandemic-
related effects including working from home
and reduction of business travel, leading us
to exceed our target for this year.
The share of green electricity in total electricity
used was 57 % (2019: 49 %); this improvement is
due to the expansion of green electricity use
across various regions, including Asia.
- Our carbon footprint per employee was 1.1
tons (2019: 2.7). This represents a 61 %
reduction against the 2016 baseline¹. The
improvement is mainly due to protective
measures taken during the COVID-19
pandemic, such as a restriction of non-critical
business travel and a reduction of occupancy
in Allianz SE premises, resulting from
employees' working from home.
- We have achieved our targets for 2020.
We achieved a share of 100% green electricity
in total electricity used (2019: 100 %) at our
Munich headquarter, which is certified according
to ISO 14001.
Achieve 100% green electricity for our
operations by 2023.
Targets 2021 and beyond
Achieve 100% green electricity for our operations
by 2023.
1 Baseline data was assessed based on a limited assurance engagement.
2_2016 baseline Allianz SE data was adjusted to the physical scope of our Munich headquarter location. Allianz RE and international hubs are included in our Group reporting. The majority of the environmental impacts reported are in scope of
an SE environmental management system certified to ISO14001. Allianz SE targets for 2021 and beyond are set in line with targets for other OEs.
Allianz undertakes various efforts to collect relevant environmental
data from the major entities and their operations. The scope of our en-
vironmental reporting includes all entities that, at the time reports are
written, have been part of Allianz for a full reporting year at minimum.
In 2020, we collected environmental data for entities corresponding to
97% of our total employee base. The data is based on meter readings
(where available), invoice amounts (where available), and entities'
own estimations. Wherever the necessary data cannot be determined
in this way and with reasonable effort, it is extrapolated – either for
entire entities or for part(s) of them - based on the relevant headcount.
This permits the performance monitoring as well as the compari-
son and benchmarking of entities based on comparable system
boundaries. Please note that the CO2 values reported refer to the sum
of Scopes 1, 2, and 3 as defined in the Greenhouse Gas (GHG) Protocol.
CO2 emissions considered under Scope 3 include business travel, pa-
per use, and energy-related emissions such as transmission and distri-
bution losses. Scope 2 emissions are calculated applying market-
based factors, with Allianz applying CO2 conversion factors mainly
from IEA and DEFRA.
50
50
In 2020, we worked to develop our next GHG
emission target, to be achieved by 2025, in line
with the latest climate-related science findings.
The new GHG emission target is a further 30%
GHG reduction per employee by 2025 (baseline
year 2019).
B_Corporate Governance
Green electricity, Allianz SE²
Achieve 100% green electricity for our
operations by 2023.
- By 2023: Disclosure of quantitative joint
Alliance report.
Annual Report 2020 - Allianz Group
49
B_Corporate Governance
ENVIRONMENTAL CONCEPT
At Allianz, we are committed to actively managing our environmental
performance, above all by preventing/reducing pollution and other
climate-related effects of our business operations. We work to contin-
ually improve these aspects - specifically:
Reduce the amount and carbon intensity of the energy consumed
by our operations, in particular by making/keeping the planning,
construction, and operation of buildings energy-efficient,
Reduce the environmental impact of our business travel,
Use resources - in particular paper and water – efficiently, and
Minimize the environmental impact of waste by avoiding, reduc-
ing, re-using, and recycling it as appropriate.
Reduce carbon emissions by 2% per employee
by 2020, against a 2016 baseline¹.
Targets and Achievements: Environmental matters:
Our group-wide environmental management system (EMS) pro-
vides standards and controls, supports environmental data collection,
and promotes transparent reporting on environmental impacts across
our operations. It guides us in monitoring and managing our use of re-
sources. Operational implementation is monitored by the Group Environ-
mental Officer, and supported by the Board of Management of Allianz SE.
Topic
GHG emissions per employee, Allianz Group
Green electricity, Allianz Group
GHG emissions per employee, Allianz SE²
Targets 2020
Reduce carbon emissions by 30% per employee
by 2020, against a 2010 baseline¹.
Further, we include various environmental factors in our sourcing and
procurement processes. By doing that, we seek to raise suppliers' and
contractors' awareness of our environmental commitment and to en-
courage them to act accordingly.
53
Building resilient communities
Promoting health and wellbeing
In response to the increasing regulatory initiatives and public debates
on ethics and artificial intelligence (AI) worldwide, we have set up the
Allianz Data Ethics Project including experts from various functions
and Allianz Group companies. Aiming to further strengthen the
Moreover, the global pandemic cast a spotlight on the importance
of health and mental well-being and therefore various measures have
been introduced to provide employees with extra support during the
crisis. These have included help/advisory lines for physical and mental
health issues, preventative health measures such as online relaxation
and similar, and special support for working parents such as additional
leave to enable parents to take care of unexpected childcare needs.
The GCU established a return-to-office strategy, which lays out a
cautious three-wave approach to gradually bring employees back to
their offices. Each of the three waves is subject to certain conditions,
such as national or regional infection rates and other criteria. For each
wave, hygiene measures and restrictions on meetings have been defined.
The GCU taskforce constantly monitors the global situation and regu-
larly reports to the Board of Management. It also provides advice and
guidance to all OEs across the Group.
as to ensure that existing processes work as efficiently in a remote set-
ting as they do when everyone is on the premises. In addition, to
strengthening technical defenses against common types of cyber-at-
tacks, we have also modified our training and awareness regimes to
enhance their impact with a more distributed workforce.
priate data protection in place for employees working remotely as well
reviewed our ongoing protective measures to make sure we have appro- Compliance/Anti-Corruption and Bribery Matters
B_Corporate Governance
Annual Report 2020 - Allianz Group
56
56
GCU
In response to the COVID-19 pandemic, the Allianz Group established
a Global Crisis Unit (GCU), which comprises three Allianz SE Board
Members. It is supported by a multi-disciplinary task force with experts
from Protection and Resilience, HR, IT, Chief Medical Officer (Allianz
Partners), Legal, Communications, Corporate Security, and others. The
task force monitors the situation in each region where we do business
and proposes appropriate measures. Measures include policies for remote
working, strict office rules for hygiene and distancing (which also apply to
external providers working on Allianz premises), restrictions on busi-
ness travel, quarantining rules, and various others. All measures are
constantly updated. Policies and guidelines have been issued globally,
with local task forces responsible for implementing and, as applicable,
adapting them to local conditions. Moreover, the
OUR RESPONSE TO THE COVID-19 PANDEMIC
The purpose behind the Strategic Workforce Planning initiative is to
gain an understanding of what the transition to a digital future means
for Allianz and its people. As a result, major upskilling and reskilling
initiatives will be required to prepare our workforce for the future. In
addition, a smart recruiting strategy will be crucial to ensure we recruit
the right talent. In our Strategic Workforce Planning approach, we
compare our forecasted labor supply per job profile for the next five
years against our workforce demand. This enables us to determine
early on where we need to invest in our workforce and how best to pre-
pare our people for the future. At year-end 2020, the program included
around 50% percent of the global Allianz workforce, up from 32% in
2019. We are planning to extend it to 80% of our workforce by the end
of 2021 and to address the identified learning gaps through our Learn-
ing & Development strategy.
Strategic Workforce Planning
In the context of the current HR transformation, we are building a
global HR function which, with the company's underlying business
needs in mind, will act as an impactful, strategic partner and service
provider to our business lines. The HR transformation will provide a
foundation for all HR processes and increase the level of standardiza-
tion and automation. We are also working to ensure a state-of-the-art
customer orientation in our HR functions to enhance employees' expe-
rience.
HR Transformation
TRANSFORMATION PROJECTS
Our initiative #learn will prepare our employees for emerging
trends and transformations by creating a lifelong-learning ecosystem
and culture. The initiative combines insights gained from Strategic
Workforce Planning, offerings from AllianzU (Allianz University) and a
modern recruitment strategy. Following the introduction of LinkedIn
Learning in 2018, we have further accelerated the transition to modern
digital learning by introducing the AllianzU Learning Platform, pow-
ered by degreed. This platform is a state-of-the-art learning technol-
ogy providing high quality training content with a particular focus on
digital skills needed for our future.
A major highlight in 2020 was the launch of #lead, a leadership
development initiative for all Allianz people leaders around the globe.
The program aims to set a minimum standard for all people leaders
with an equal focus on hard skills and soft skills to improve the balance
between IQ (intelligence quotient) and EQ (emotional quotient) of our
leaders.
Learning and development is a key focus area in the rapidly evolving
financial services industry. Companies that develop skills for the long
term will be the best prepared to respond to emerging trends and op-
portunities, and attract the best talent. We are responding to this with
two initiatives #lead and #learn.
Learning & Development
Motivation & Engagement including inspiration from external
speakers, regular virtual team-building and virtual coffee sessions.
Work effectiveness consisting of remote working guidelines on the
organizational, team and individual level.
Mental Health & Well-being including professional support for all
employees.
At Allianz, we strongly advocate workplace health through a variety of
initiatives and have introduced a global minimum standard for address-
ing work-related stress and mental health in 2015. In 2020, we intro-
duced global minimum health requirements, in order to address cor-
porate health and well-being issues. In October 2020, the Global Men-
tal Health Day was celebrated to educate on mental health and stress
prevention, and to promote good health. The mental health and well-
being of our employees is our ultimate goal and we therefore devel-
oped a consistent framework for all our OEs around the world that
comprises the following three dimensions:
Mental and physical resilience
Influenced by the #BlackLivesMatter movement, Allianz is cur-
rently setting up a new global employee network focusing on racial
and cultural ethnicity inclusion. In addition, two global networks focus-
ing on inclusion across generations as well as of people with disabili-
ties are being established: They will complement our two existing net-
works that focus on LGBT+ inclusion and gender equality.
To help bring "Inclusive.21" to life and demonstrate to the general
public our deep commitment to the topics of gender, LGBT+, and disa-
bility inclusion, Allianz has signed the UN Women Empowerment Prin-
ciples, the UN LGBT Code of Conduct, and The Valuable 500 commit-
ment.
In 2020, the Allianz SE Board affirmed the importance Allianz attaches
to Diversity & Inclusion (D&I) matters when it granted its approval to
our new D&I strategy, "Inclusive.21". The strategy is built on three pillars:
employees, customers, and brand & reputation.
Diversity & Inclusion
New Work Model
areas.
Our New Work Model is designed to shape where and how we want
to work in the future. It aims to capitalize on positive impacts for cus-
tomers and employees brought about by the COVID-19 pandemic
and which acted as a catalyst for the transformation we had already
started. The model includes a global framework and is based on the
following four pillars:
This section describes the impact of compliance matters on Allianz's
business activities and relationships as well as the impact of Allianz's
activities and relationships on compliance. Furthermore, the concepts
and achievements related to the management of these impacts are
described, with a focus on the compliance management system, anti-
corruption, and bribery matters. All compliance matters are overseen
by the Compliance team.
B_Corporate Governance
Annual Report 2020 - Allianz Group
- Continue enhance the effectiveness of local compliance organizations
by enriching our compliance reviews, to bolster further the
governance and processes of underlying compliance organizations
across our OEs.
- Complete the fifth cycle of the integrated compliance risk scoping and
assessment activities as part of the company's IRCS process in 2021.
Targets 2021
Completed the fourth cycle of our integrated compliance risk scoping
and assessment activities as part of the company's IRCS.
Achievements 2020
Compliance
Targets and Achievements: Compliance/anti-corruption and bribery matters
Topic
The obligations laid down in our various compliance programs have
been derived from the Allianz Group Code of Conduct and detailed in
various Allianz standards - specifically, the Economics Sanctions, the
Anti-Money Laundering, the Antitrust, the Data Privacy, and the Anti-
Corruption Standards.
Aimed at employees and certain third parties with whom Allianz
does business, the Anti-Corruption policy and program prohibits the of-
fering, acceptance, payment, or authorization of any bribe or other
form of corruption, be it in dealings with the private sector or with gov-
ernment officials. Anti-corruption training is compulsory for all employ-
ees, with online and classroom training delivered in multiple lan-
guages.
We take a zero-tolerance approach toward fraud and corruption,
as we are strongly committed to fully complying with local and inter-
national anti-corruption and anti-bribery laws. Indeed, we are deter-
mined to do more than comply with minimum legal requirements: The
Allianz Anti-Corruption Program sets high standards for a comprehen-
sive approach that is consistent throughout the Group and across juris-
dictions.
and other relevant compliance risk areas. We thoroughly investigate
allegations of violations of laws as well as of breaches of Allianz-spe-
cific rules.
As part of our global compliance program, we follow interna-
tional standards and applicable laws related to corruption and brib-
ery, money laundering and terrorism financing, trade and financial
sanctions, capital markets, data privacy, customer protection, antitrust,
In the upcoming months and years, we will continue to strengthen
our risk-based approach to compliance control reviews and testing.
We will also continue to improve the IT solutions we have in place to
support, optimize and standardize these activities, including related
reporting activities across the Group, with a particular focus on the
quality of the data collected. Our compliance assurance approach
includes general reviews of the compliance of newly acquired entities
as well as risk-based (targeted and general) reviews of existing entities,
which includes the testing of key controls as appropriate.
Furthermore, we have an Integrity Committee in place, chaired by
Group Compliance and with members from various functions. It reviews
all activities and issues related to the prevention and detection of cor-
ruption and fraud as well as the summary reports of all actions to fol-
low up on whistleblowing cases.
The information gathered through this compliance issue man-
agement tool also provides the primary basis for reports to the Group
Board as well as to the Allianz SE Supervisory Board's Audit Commit-
tee.
B_Corporate Governance
58
58
57
Annual Report 2020 - Allianz Group
To ensure continuous improvement in how we address compli-
ance risks, these risks are regularly assessed, monitored, and reported
across the Group. Our Compliance Quality Assurance Program, which
has been in place since 2012, comprises self-assessments, independ-
ent on-site reviews, targeted reviews, and testing of key controls. An
online tool for compliance issue management provides an overview of
issues detected in the course of the above activities. It requires report-
ing on mitigating activities as well as on follow-up procedures, includ-
ing a review of actions undertaken and documented in the tool.
In view of new and upcoming regulatory requirements and expecta-
tions, the compliance risks associated with IT regulations, increased
oversight requirements, anti-money laundering, and conduct-related
as well as sustainable finance standards are growing in significance.
Money laundering,
Anti-trust.
Customer protection,
Compliance risk is covered as part of the operational risk cate-
gory, as laid down in the Allianz Integrated Risk and Control System
(IRCS). Since 2017, in-scope OEs have been required to conduct an annual
compliance risk assessment, based on group-defined risk scenarios.
Together with compliance organizational maturity assessments, they
form the annual cycle of our integrated compliance risk scoping and
assessment activities. In 2020, the following key areas of compliance
risk have been identified and aligned with the Group's top-risk assess-
ment procedures, as coordinated by the Group's Risk Management
function:
One key element of our risk management framework is our Compli-
ance Management System (CMS), which helps to ensure compliance
with internationally recognized laws, rules and regulations and to pro-
mote a culture of integrity in order to safeguard the company's repu-
tation. We take a proactive stance, working with organizations such as
the German Institute for Compliance and the Global Insurance Chief
Compliance Officers Forum (CCO Forum) to enhance our understand-
ing of compliance issues and to share best practices.
CONCEPTS AND PROGRAMS
Employees: We want to provide a flexible work environment to all
employees as a mix of working from home and office work will be-
come the norm. Additionally, we want to significantly reduce non-
critical business travel by leveraging technology.
Customers: Besides offering a multi-channel interaction to custom-
ers, we will further increase the digitalization of our agency net-
work. Developing end-to-end customer solutions and achieving a
good mix of physical and virtual customer interactions will speed
up our service and improve our customer relations.
Organization & Culture: We want to create a flatter, faster and
more agile organization. Moreover, we will offer continuous learn-
ing to employees and focus on building the right leadership skills.
Resilience: On the one hand, we want to increase the resilience
maturity at OE level to ensure business continuity while on the
other hand also increase the resilience of our global workforce
through Strategic Workforce Planning.
Although both the Group and Allianz SE already exceeded their 2021
targets in 2020, we will start working on new global focus areas and
continue with the VOICE initiative in order to tackle the identified focus
Data privacy (see section Data Privacy Concepts above),
Economic sanctions,
55
Topic
Targets and Achievements: Human rights matters
B_Corporate Governance
Annual Report 2020 - Allianz Group
54
54
For further details on the Allianz Group's referral process and our
Human Rights Guideline, see the Allianz ESG Integration Framework
> www.allianz.com/esg-framework.
For insurance transactions and proprietary investments such as real
estate, infrastructure, and private equity, we address ESG risks, including
human rights, in our mandatory referral process for sensitive business
transactions. This process is set off by specific standard steps of the trans-
action and by data driven analysis of major human rights issues prevailing
in the country of transaction. Please refer to our "ESG approach” for
further details on the concepts.
As part of our support of and commitment to said human rights
principles, we also take an active stance against modern slavery and
human trafficking as we pursue a risk-based approach across our busi-
ness and supply chain. In its Allianz Group Modern Slavery Statement,
published in August 2020, the Group confirms that over the five pre-
ceding years, no incident of modern slavery, human trafficking, or child
labor has been found involving any of the Allianz Group entities.
Screening data and information on compliance with the Code of
Conduct forms part of our procurement KPI reporting.
and our Allianz Group Vendor Code of Conduct. All vendors with a
spend volume greater than € 250,000 undergo a vendor integrity
screening that is based on the requirements laid down in the Allianz
Global Standard for Procurement. As of 2017, vendors must adhere to
our Allianz Group Vendor Code of Conduct. Also, in order to be accepted
as contractors and pass the supplier on-boarding process included in
our supply chain management system, vendors must answer a series
of environmental, social, and governance questions.
We require our vendors to meet fair labor requirements and prac-
tices with the aim of preventing forms of modern slavery in the supply
chain and to ensure compliance with the Declaration of Human Rights
We are committed to applying key human rights principles such as the
United Nations Universal Declaration of Human Rights across our en-
tire organization. As a participant in the United Nations Global Com-
pact since 2002, we have integrated its ten principles into our globally
binding Code of Conduct. We annually communicate our progress,
covering both human rights and labor standards.
CONCEPTS
Human rights integration
To increase transparency on our human rights initiatives and to
reaffirm our public position, we are working to include a dedicated sec-
tion on our human rights approach in our Allianz ESG Integration
Framework. In addition, we have expanded our human rights report-
ing in the Group Sustainability Report.
Human Rights Matters
Data Champions will be appointed in all business
units that process personal data across
Allianz Group companies. Privacy Champions are
employees who dedicate a portion of their time to
deal with privacy related topics, including PIAS,
records of processing activities, data incidents,
and data access requests.
Targets 2021
Accordingly, our emphasis and, along with it,
resources deployed have been shifted from the
implementation of the privacy program to
monitoring activities, including on-site reviews.
These efforts focus on the maturation of our
group-wide privacy activities.
We successfully concluded efforts we had begun
in 2016, working with Allianz Group companies
and other Group Centers on realizing the group-
wide deployment of the APRP in 2020. Having
reached this milestone, the data privacy
program has transitioned to a business-as-usual
environment.
Achievements 2020
tical Guidance for our data science/analytics departments, extended
our Privacy Impact Assessment procedure to a "Privacy & Ethics Impact
Assessment," and amended the Allianz Privacy Framework respec-
tively.
We will target a sample of Allianz OEs for data
privacy reviews.
Implement the APRP across all Allianz Group
companies by mid-2020 and transform into a
business-as-usual environment.
Targets 2020
Allianz Privacy Renewal Program (APRP)
Topic
B_Corporate Governance
Targets and Achievements: Data privacy
In 2020, we observed an increase in attention to human rights
matters, particularly their regulatory and legislative aspects. We are
closely monitoring these developments in various jurisdictions and are
ready to further develop our internal approach to fulfill any additional
requirements.
Modern Slavery Act
This section describes the impact of human rights issues on our busi-
ness activities and relationships, as well as the impact of Allianz's ac-
tivities and relationships on human rights issues. We describe the con-
cepts and achievements related to the management of those impacts.
As we are a financial services provider, these concepts mainly relate to
insurance transactions, proprietary investments, and our supply chain.
Human rights are part of our business guidelines in our ESG risk
framework and thus of our core due diligence processes on sensitive
business transactions. For further details, please refer to our Group
Sustainability Report 2020, section 02.4.
1 Allianz SE targets for 2021 are set in line with targets for other OES
Achievements 2020
76% (+3 %-p vs. 2019)
IMIX, Allianz SE¹
Targets 2021
73% plus
Achievements 2020
78% (+5%-p vs. 2019)
IMIX, Allianz Group
Annual Report 2020 - Allianz Group
Targets and Achievements: Employee matters
VOICE has been launched successfully at Allianz Partners and, as of
2021, Allianz Germany.
The "Meet the eAZy way" initiative created 10 golden rules on how
to run effective meetings, and to reinforce monthly Lunch & Learn
sessions.
"Team Check-in", a work and health activity, where a structured
and continuous dialogue between managers and their teammates
around well-being, workload and other stress factors is enforced.
"Triple-E" is an initiative to further improve the transparency in our
company's rewards system.
One activity resulting from the AES is Allianz SE's VOICE initiative.
Under the sponsorship of the CEO himself, it brings together employ-
ees from different levels and functions to work on key topics related to
employee engagement. Apart from the ongoing implementation of
2019 ideas, three new ideas were developed and implemented in
2020:
At a global level, activities resulting from the AES survey findings
have focused on the three areas in 2020: Recognition and Rewards,
Work-life Balance as well as Top Management and Strategy.
The results of the AES are directly linked to the performance targets
for the Group's Board of Management. The Group's Chief HR Officer is
responsible for all people-related activities and reports to a member
of the Board of Management.
Topic
As employee engagement is a high priority to us, we work to build and
maintain a highly motivated workforce that excels by integrity and
maintains a strong customer focus. With a view to all these aspects, the
Allianz Engagement Survey (AES), introduced in 2010, has proven to be
a valuable platform for employee feedback. It is carried out on an annual
basis.
- Allianz Group Modern Slavery Statement was updated in mid-2020.
One part of the AES is the Inclusive Meritocracy Index (IMIX). It
measures our progress in building a culture where both people and
performance matter, as we seek to enable employees to unlock their
full potential. The IMIX score comprises 10 AES questions covering the
areas of leadership, performance, and corporate culture.
Targets 2021
Continue to apply ESG Sector Guidelines and Human Rights
Guidelines for sensitive countries into all business lines and core
processes dealing with insurance, investment and procurement
decisions.
Employee Matters
This section describes our employees' impact on our business activities
and relationships as well as the impact of Allianz's business activities
and relationships on employees, and sets out the concepts and
achievements in managing these impacts. All employee matters are
managed by the Group HR function.
- Continue to develop and improve our approach to human rights
integration in the business and the organization and disclose this
approach as part of the formal Allianz ESG Integration Framework.
Continue to report on human rights issues as defined in the Modern
Slavery Act.
Our employees are our most valuable asset and key to the success of
our company. It is therefore of utmost importance that we retain peo-
ple and keep them motivated and engaged. We do this by managing
talent, rewarding personal achievements, promoting inclusion and
employee rights, and supporting employee wellbeing and engage-
ment. In 2020, our main focus was on keeping our employees safe dur-
ing the global COVID-19 pandemic, minimizing health risks, and cre-
ating flexible working conditions such as remote solutions. These aspi-
rations are underpinned by our HR strategy, including a globally con-
sistent set of people attributes - Customer and Market Excellence, Col-
laborative Leadership, Entrepreneurship and Trust - which we uphold
along the entire people value chain, from recruiting and talent man-
agement to learning and performance management.
Our purpose to guide our efforts is "We secure your future". As we
believe that a key to employee engagement is a company strategy
both widely accepted and filled with life, on 8 July 2020 we celebrated
our first-ever group-wide Global Purpose & Strategy Day. Employees
from all over the world came together online to explore Allianz's cor-
porate purpose and role in society and to discuss how each of us con-
tributes to implementing our company strategy.
BUSINESS AS USUAL
Allianz Engagement Survey
CONCEPTS
No issues were raised in regard to human rights issues in accordance
with the Modern Slavery Act in 2020.
Luxembourg
Belgium
Taiwan
Thailand
India
Spain
Ireland
Switzerland
--
and Allianz Partners
The Netherlands
Iberia
Spain
Portugal
United Kingdom
Sweden
Asia Pacific
Japan
Latin America
Insurance Iberia & Latin America
Italy
Japan²
Sri Lanka
Asset Management
Argentina
Brazil
Colombia
Mexico
Luxembourg
North and Latin America
China
Hong Kong2
Indonesia
Laos
Malaysia
Europe
United States
Canada
Brazil
Germany
Austria
Pakistan
Philippines
Singapore
France
Hong Kong
2020 was the year of the COVID-19 pandemic, which claimed almost
two million lives globally last year and brought entire economies to a
standstill. As a result, the world gross domestic product slumped by
around 4%, by far the worst performance since the Second World War.
(By comparison, the Financial Crisis caused a drop of only 0.1% in 2009.)
The blow from the pandemic on livelihoods could be cushioned, how-
ever - first and foremost in advanced economies - by unprecedented
fiscal policy measures: Governments' outlays totaled more than €10tn
globally. This staggering level of support helped people and companies
to endure lockdowns, trade disruptions, and social distancing - at least
economically. Corporate insolvencies, for example, even declined by
around 10% globally in 2020, defying economic logic in the face of a
severe recession. The flip side of generous fiscal support is rapidly esca-
lating public debt: It reached around 130% of world gross domestic
product in advanced economies in 2020.
Allianz Partners
1_This member of the Board of Management also oversees Insurance Iberia & Latin America and Allianz Partners.
2_Excluding unrealized gains/losses on bonds net of shadow accounting.
3_NPS is a measurement of customers' willingness to recommend Allianz. Top-down NPS is measured regularly according
to global cross-industry standards and allows benchmarking against competitors in the respective markets.
62
Annual Report 2020 - Allianz Group
C_Group Management Report
BUSINESS ENVIRONMENT
Economic environment 2020¹
The big fall in global economic activity conceals an unusually large
dispersion of performance in large economies. Reflecting diverging
strategies as well as their differing success in combating the pandemic,
the growth gap between China (+2.3% in 2020) and the Eurozone
(-6.8% in 2020) amounted to nine percentage points; the gross domes-
tic product of the United States declined by 3.5% in 2020.
Capital markets initially reacted with panic to the outbreak of
COVID-19; even the U.S. sovereign bond market, the backbone of the
global financial system, was not immune to dislocations. But as central
banks quickly stepped in, offering provisions of liquidity of unparalleled
scale, functionality was restored. As a consequence of the ongoing
monetary support, markets enjoyed a strong recovery since the March
turbulences, even setting new records in some areas such as corporate
bond issuance or initial public offers. Most equity markets concluded
2020 in positive territory, with the U.S. market, measured by the market-
wide index S&P 500, setting the pace with a plus of 16%. On the other
hand, interest rates and yields dropped to new record lows: The 10-year
U.S. Treasury yield declined from 1.9 % to 0.9%, while the 10-year Bund
yield dropped from -0.2% to -0.6% at the end of 2020.
Business environment 2020 for the insurance
industry
Initially, COVID-19 impacted both sides of the balance sheet of the
insurance industry. But entering the crisis with strong, well-capitalized
balance sheets and the quick rebound of markets helped to manage
temporary losses on the asset side. On the liability side, however,
underwriting losses emerged in particular in travel and event cancel-
lation, credit, and business interruption insurance. At the same time,
frozen activity during lockdowns lowered claims frequencies in some
lines of business. Global insured losses of natural catastrophes
increased sharply in 2020, mainly due to severe storms and wildfires in
the United States.
The industry also had to cope with the operational challenge of
business continuity amidst lockdowns and social distancing: Accelerat-
ing digitalization was the answer to serving clients and maintaining
operations while protecting employees during the pandemic.
The property-casualty sector proved remarkably resilient in 2020.
Specifically, a hardening of rates helped stabilize premium income in
commercial lines, while in personal lines the intensive use of digital
channels mitigated the impact to new business that was caused by
mobility restrictions. Industry profitability came under stress as invest-
ment income kept declining. The impact on underwriting profitability,
however, was mixed: While some lines of business suffered from
COVID-19-related and natural catastrophe losses, others, in particular
motor, benefitted from lower claims frequencies during lockdowns.
In the life sector, premium income is very likely to have declined in
2020. To start with, products are in general less commoditized and thus
less suitable for digital channels. Furthermore, the high uncertainty
and ultra-low interest rates weighed on the demand for savings-type
insurance products, a trend that could only partially be offset by grow-
ing demand for protection products. The overall impact of COVID-19
on industry profitability was ambiguous as lines of business were dif-
ferently impacted. By and large, profitability remained challenged as
falling interest rates and yields affected investment income.
Business environment 2020 for the asset
management industry
Nigeria
Senegal
In 2020, the asset management industry was severely impacted by the
COVID-19 driven market disruption at the end of the first quarter. After
years of steady growth, the industry's asset base was hit by financial
market volatility. Yet, with aid of monetary and fiscal stimulus, markets
recovered and the global economy was supported through the crisis.
Both bonds and equities saw a year of high returns with the MSCI
World Index increasing by 16% in 2020, overcompensating the effects
at the end of the first quarter of 2020.
Non-financial key performance indicators (KPIs) are used to as-
sess the organizational health of Allianz and are reflected in the an-
nual bonus of the Board of Management. In line with our Renewal
Agenda 2.0 motto "Simplicity Wins", Customer Centricity and em-
ployee commitment - the two key levers identified - are reflected in
two KPIs: the Net Promoter Score (NPS³) and the Inclusive Meritoc-
racy Index. For further information on non-financial KPIs, please re-
fer to the Combined Separate Non-Financial Report for the
Allianz Group and Allianz SE (according to §§289b (3), 315b (3), sen-
tence 1, sentence 2 in conjunction with §298 (2) of the HGB) and for
an overview of the development and expected development of
these non-financial KPIs, please refer to the chapter Outlook 2021.
Taiwan
Singapore
China
Besides performance steering, we also have a risk steering pro-
cess in place, which is described in the Risk and Opportunity Report.
The Allianz Group steers its operating entities and business segments
via an integrated management and control process. It begins with the
definition of a business-specific strategy and goals, which are dis-
cussed and agreed upon between the Holding and operating entities.
Based on this strategy, our operating entities prepare three-year plans,
which are then aggregated to form the financial plans for the business
divisions and for the Allianz Group as a whole. This plan also forms the
basis for our capital management. The Supervisory Board approves
the plan and sets corresponding targets for the Board of Manage-
ment. The performance-based remuneration of the Board of Manage-
ment is linked to short-term and long-term targets to ensure effective-
ness and emphasize sustainability. For further details about our remu-
neration structure, including target setting and performance assess-
ment, please refer to the Remuneration Report.
Australia
Allianz Partners
Allianz Direct
Allianz Direct
US life insurance
United States
Property-Casualty Life/Health Banking Retail Asset Management Institutional Asset Management
1_This overview is based on our organizational structure as of 31 December 2020.
2_Property-Casualty business belongs to Allianz Global Corporate & Specialty.
Annual Report 2020 - Allianz Group
C_Group Management Report
61
C_Group Management Report
Our steering
BOARD OF MANAGEMENT
AND ORGANIZATIONAL STRUCTURE
Allianz SE has a divisional Board structure based on functional and
business responsibilities. Business-related divisions reflect our business
segments Property-Casualty, Life/Health, Asset Management, and
Corporate and Other. In 2020, they were overseen by five board mem-
bers. The following divisions focus on Group functions and come with
business-related responsibilities: Chairman of the Board of Manage-
ment; Finance, Controlling and Risk; Investment Management; Opera-
tions and Allianz Services; Human Resources, Legal, Compliance and
M&A; and Business Transformation¹.
For further information on Board of Management members and
their responsibilities, please refer to Mandates of the Members of the
Board of Management.
TARGET SETTING AND MONITORING
We continuously monitor our business performance against these
targets through monthly reviews - which cover key operational and fi-
nancial metrics - to ensure we can move quickly and take appropriate
measures in the event of negative developments. The Allianz Group
uses operating profit and net income as key financial performance in-
dicators across all its business segments. Other indicators include seg-
ment-specific figures, such as the combined ratio for Property-Casu-
alty, return on equity² and new business margins for Life/Health, and
the cost-income ratio for Asset Management. For a comprehensive
view of our business segment performance, please refer to the respec-
tive chapters on the following pages.
The Netherlands
Western & Southern Europe and
Asia Pacific
Morocco
Asset Management
Insurance operations
LIFE/HEALTH
- Iberia & Latin America
- USA
- Global Insurance Lines & Anglo Markets,
Middle East and Africa
CORPORATE AND OTHER
- Corporate and Other
We offer a wide range of property-casualty and life/health insurance
products to both retail and corporate customers. For the Property-Cas-
ualty business segment, these include motor, accident, property, gen-
eral liability, travel insurances, and assistance services. The Life/Health
business segment offers savings and investment-oriented products in
addition to life and health insurance. We are the leading property-cas-
ualty insurer worldwide and rank among the top five in the life/health
insurance business³. Our key markets (in terms of premiums) are Ger-
many, France, Italy, and the United States.
Corporate and Other
The Corporate and Other business segment's activities include the
management and support of the Allianz Group's businesses through
its central Holding functions, Banking and Alternative as well as Digital
Investments. The Holding functions manage and support the Group's
businesses through its strategy, risk, corporate finance, treasury, finan-
cial reporting, controlling, communication, legal, human resources,
technology, and other functions. Our Banking operations, which
place a primary focus on retail clients, support our insurance business
and complement the products we offer in Italy, France, and Bulgaria.
Digital Investments identifies and invests in digital growth companies
and provides digital investment management services and an inter-
face between portfolio companies and the Allianz Group.
Annual Report 2020 - Allianz Group
1_Including non-consolidated entities with Allianz customers.
2_For further information on organizational changes, please refer to the Executive Summary of 2020 Results.
3_Based on currently available peer data. Final peer analysis first available after publication of this Annual Report, due to
the ongoing peers' full year reporting season.
60
60
ASSET MANAGEMENT
Worldwide presence and business segments
- Global Insurance Lines & Anglo Markets,
Middle East and Africa
Central & Eastern Europe
Overall, global assets continued to grow and exceeded
USD 110 tn for the first time. Although active investments still make up
for most assets under management, growth in both passive and alter-
native investments is continuing. Related acceleration in fee and prof-
itability compression for asset managers is partly compensated by an
expansion of alternative and private market offerings. Also, asset
managers are putting more focus on the growing importance of ESG-
engagement (ESG = Environment, Social, Governance) with investors,
impacting product design, fund allocation and performance objec-
tives.
GROUP MANAGEMENT REPORT
C
Annual Report 2020 - Allianz Group
59
C_Group Management Report
BUSINESS OPERATIONS
Allianz Group structure
Allianz SE and its subsidiaries (the Allianz Group) offer property-casu-
alty insurance, life/health insurance, and asset management products
and services in over 70 countries, with the largest of our operations
located in Europe. The Allianz Group serves more than 100 million pri-
vate and corporate customers¹. Allianz SE, the parent company of the
Allianz Group, has its headquarters in Munich, Germany.
The Allianz Group's structure reflects both our business segments
and geographical regions. Business activities are organized by product
and type of service, based on how these are strategically managed:
insurance activities, asset management activities, and corporate and
other activities. Due to differences in the nature of products, risks, and
capital allocation, insurance activities are further divided into the two
categories property-casualty and life/health. In accordance with the
Board of Management's responsibilities, each of the insurance cate-
gories is grouped into regional reportable segments. In 2020, the
Allianz Group had 11 reportable segments.
Allianz Group structure -
business segments and reportable segments²
Most of our insurance markets are served by local Allianz compa-
nies. However, some business lines - such as Allianz Global Corporate
& Specialty (AGCS), Allianz Partners (AP), and Euler Hermes - are run
globally.
Asset Management
Our two major investment management entities, PIMCO and
AllianzGI, operate under the governance of Allianz Asset Manage-
ment (AAM). We are one of the largest asset managers in the world
that actively manage assets. Our offerings cover a wide range of
equity, fixed income, cash, and multi-assets products as well as a
strongly growing number of alternative investment products, such as
infrastructure debt/equity, real assets, liquid alternatives, and solution
business. Our core markets are the United States, Canada, Germany,
France, Italy, the United Kingdom, and the Asia-Pacific region. As of
October 2020, PIMCO officially assumed oversight of Allianz Real Estate
and, as a result, Allianz Real Estate was transferred from the Corporate
and Other business segment into the Asset Management business seg-
ment. The combined entity forms one of the world's largest and most
diversified real estate platforms.
PROPERTY-CASUALTY
- German Speaking Countries and
- Iberia & Latin America and
Allianz Partners
Market presence of our business operations¹
Insurance German Speaking Countries,
Insurance Central & Eastern Europe
Germany
Russia
Africa
Ukraine
Insurance Western & Southern
Europe and Asia Pacific
Europe
Asia Pacific
Cameroon
Congo Brazzaville
Ghana
Ivory Coast
Kenya
Madagascar
Italy
Greece
Turkey
France
Saudi Arabia
Lebanon
Egypt
Slovakia
Switzerland
Central & Eastern Europe
Austria
Global Insurance Lines & Anglo Markets,
Insurance Middle East and Africa
Global Insurance Lines & Anglo Markets
United Kingdom
Australia
Ireland
Allianz Global Corporate &
Specialty
Belgium
Euler Hermes
Croatia
Czech Republic
Reinsurance
Hungary
Middle East
--
Poland
Romania
Bulgaria
During 2020, asset managers continued to invest in digitalization.
Accelerated by COVID-19, technology has become even more essen-
tial to drive customer engagement, data mining for information on
clients, operational efficiency, and regulatory and tax reporting.
1_At the date of the publication of this report, not all general market data for the year 2020 used in the chapter Business
Environment was final. Also, please note that the information provided in this chapter is based on our estimates.
Annual Report 2020 - Allianz Group
Total
100.0
100.0
(0.9)
45.5
44.6
Capital-efficient products
4.2
20.2
24.4
Unit-linked without guarantee
driven by lower single premium sales in our business with capital-effi- Operating profit
2.0
17.4
Protection & health
(5.3)
18.9
13.6
Guaranteed savings & annuities
Delta
2019
2020
Present value of new business premiums (PVNBP) by lines of business
%
€ 26,232 mn, a 5.4% decrease on an internal basis that was largely
15.4
cient products. In the German health business, statutory premiums
went up to € 3,741 mn. The increase - 4.6% on an internal basis -
mainly resulted from premium adjustments in comprehensive
healthcare coverage as well as from the acquisition of new customers
in supplementary healthcare coverage.
In the United States, statutory premiums declined to € 9,915 mn,
a decrease of 17.6% on an internal basis. Most of it was caused by
declining sales of fixed index annuity products, with the effect partly
offset by higher sales for non-traditional variable annuity products.
In Italy, statutory premiums grew to € 12,487 mn. Key drivers of
this increase - 15.4% on an internal basis - were stronger sales for unit-
linked and capital-efficient products, while weaker sales of guaran-
teed savings & annuities contributed negatively.
243
(206)
Impact of changes in DAC
Operating profit
(42)
1,174
1,132
Technical margin
96
(7,461)
(7,365)
155
4,039
4,194
Investment margin
Expenses
(108)
6,713
6,605
Delta
2019
2020
Loadings and fees
Operating profit by profit sources
€ mn
OPERATING PROFIT BY PROFIT SOURCES
In the Asia-Pacific region, statutory premiums went up to
€ 6,049 mn, translating into a 9.3% increase on an internal basis. For
the most part, it was due to sales increases for unit-linked products in
Indonesia as well as guaranteed savings & annuity products in Taiwan.
In France, statutory premiums decreased to € 7,409 mn, an 8.8%
drop on an internal basis. It was largely attributable to lower sales of
our guaranteed savings & annuity products.
In the German life business, statutory premiums totaled
(450)
On a nominal basis, our statutory premiums decreased by 3.1%,
impacted by COVID-19 restrictions. This includes unfavorable foreign
currency translation effects of € 510 mn as well as positive (de-)con-
solidation effects of € 137 mn. On an internal basis, statutory premi-
ums dropped by 2.6% - or € 2,009 mn - to € 74,296 mn.
Our PVNBP decreased by € 5,450 mn to € 65,448 mn, impacted by
COVID-19 restrictions. Most of the drop was a result of the lower sales
volumes for capital-efficient products in the German life business, fixed
index annuities in the United States, and guaranteed savings & annui-
ties in France. The negative effects were partly offset by increased vol-
umes from unit-linked products in Italy.
1_Refers to policyholder participation, mainly from APR business (accident insurance with premium refunds), reported
within "change in reserves for insurance and investment contracts (net)". For further information, please refer to note
27 to the Consolidated Financial Statements.
(283)
2,840
2,556
(net)²
Operating investments income
108
(153)
(45)
Expenses for premiums refunds (net)¹
5
2_The operating investment income (net) of our Property-Casualty business segment consists of the operating investment
result - as shown in note 5 to the Consolidated Financial Statements and expenses for premium refunds (net)
(policyholder participation).
(426)
Investment expenses
(99)
(42)
(141)
Operating impairments of investments (net)
(73)
204
131
Operating realized gains (net)
28
(57)
(421)
Our operating investment income (net) decreased, mainly because
the interest and similar income (net of interest expenses) worsened
due to a lower reinvestment yield and a lower dividend income.
66
66
Present value of new business
premiums (PVNBP)5
0.0%-p
12.7
12.8
243
3,523
3,766
(349)
4,708
4,359
(2,382)
74,044 76,426
Delta
2019
2020
|| 1| 1| 1| × |
Net income
Return on equity³
Operating profit
Statutory premiums²
Key figures Life/Health¹
KEY FIGURES
LIFE/HEALTH INSURANCE OPERATIONS
C_Group Management Report
Annual Report 2020 - Allianz Group
Statutory premiums
4,359
4,708
(349)
5.7
5.7
534
(7,552)
(7,019)
Policyholder participation
Loadings from premiums as % of statutory
premiums
(10)
(9,071)
(9,081)
Technical interest
0.1
(822)
(185)
Other¹
(108)
6,713
6,605
Loadings and fees¹
(89)
(1,592)
(1,681)
Investment expenses
(31)
637
Investment margin
4,194
4,039
Annual Report 2020 - Allianz Group
2_The investment margin is defined as IFRS investment income net of expenses, less interest credited to IFRS reserves and
policyholder participation (including policyholder participation beyond contractual and regulatory requirements mainly
for the German life business).
1_Loadings and fees include premium and reserve based fees, unit-linked management fees, and policyholder participation
in expenses.
Our investment margin increased. In the United States, we registered
positive effects from the unlocking of assumptions and from a model
refinement in both our fixed index and our variable annuity businesses
as well as from a recovered spread margin in the fixed index annuity
business. On the other hand, we saw increased hedging expenses, due
to market turbulences caused by the COVID-19 pandemic in our vari-
able annuity business, which, however, only partly offset the positive
developments. In our German life business, higher realizations from
debt securities and equity instruments and an increased trading result
outweighed higher impairments from equities and a decrease in inter-
est income. In Switzerland, increased realizations and reduced reserve
strengthening contributed positively. Negative developments included
an increase in impairments from equities, due to the pandemic, and a
decline in interest income in France, which could not be offset by higher
realizations and lower policyholder participations.
3_Yields are pro rata.
2_Investment margin divided by the average of current end-of-period and previous end-of-period aggregate policy
reserves.
1_"Other" comprises the delta of out-of-scope entities, on the one hand, which are added here with their respective
operating profit and different line item definitions compared to the financial statements, such as interest paid on
deposits for reinsurance, fee and commission income, and expenses excluding unit-linked management fees on the
other hand.
Loadings from premiums decreased as sales volumes declined, above
all, for capital-efficient products in our German life business, but also
in guaranteed savings & annuities in Thailand. Stronger sales of pro-
tection & health products in the United States partly offset this devel-
opment. Loadings from reserves went up, largely driven by higher
reserve volumes in our German life business and remained stable in
relation to reserves. Unit-linked management fees went down, mainly
due to the disposal of Allianz Popular S.L. in Spain, an effect partly
compensated by an increase in Italy that, for the most part, resulted
from an increase in assets under management.
3_Unit-linked management fees, excluding asset management fees, divided by unit-linked reserves.
2 Yields are pro rata.
1 Aggregate policy reserves and unit-linked reserves.
0.5
0.5
average unit-linked reserves²,3
Unit-linked management fees as % of
86
86
Investment margin in basis points²,3
13
0.3
63
0.3
reserves¹,2
Loadings from reserves as % of average
155
752
721
Unit-linked management fees
(3,266)
(626)
18,648
18,022
Interest and similar income
Delta
2019
2020
€ mn
Investment margin
INVESTMENT MARGIN²
Loadings and fees
LOADINGS AND FEES¹
The negative effects on our operating profit that were due to
COVID-19 amounted to € 0.2 bn in 2020, and resulted mainly from
market downturns in the first quarter of 2020.
C_Group Management Report
88
68
67
Annual Report 2020 - Allianz Group
7_The purpose of the analysis of Life/Health operating profit sources is to explain movements in IFRS results by analyzing
underlying drivers of performance, consolidated for the Life/Health business segment.
6_Prior year figures changed in order to reflect the refinement of profit source reporting in the USA.
5_PVNBP before non-controlling interests.
4_In this section, our comments in the following section on the development of statutory gross premiums written refer to
values determined "on an internal basis", i.e. adjusted for foreign currency translation and (de-) consolidation effects, in
order to provide more comparable information.
3_Represents the ratio of net income to the average total equity, excluding unrealized gains/losses on bonds, net of shadow
accounting, at the beginning of the year and at the end of the year.
1_For further information on Allianz Life/Health figures, please refer to note 5 to the Consolidated Financial Statements.
2 Statutory premiums are gross premiums written from sales of life and health insurance policies, as well as gross receipts
from sales of unit-linked and other investment-oriented products, in accordance with the statutory accounting practices
applicable in the insurer's home jurisdiction.
Our operating profit decreased, mainly due to increased hedging
expenses and a loss recognition in the United States, as well as a
lower investment margin in France. Other drivers included the exten-
sion of the amortization period for deferred acquisition costs in the
United States in 2019, resulting in a favorable effect in that year, as well
as the disposal of Allianz Popular S.L. in Spain. Positive effects partly
offsetting the decrease came from the unlocking of assumptions, as
well as from a model refinement in the United States, an improved
investment margin in our German life business due to a higher
reserve base, and increased unit-linked management fees in Italy. We
also registered higher volumes and lower claims in the Asia-Pacific
region.
Operating income from financial assets and
(28)
liabilities carried at fair value through
income (net)
(1,201)
(4,466)
Operating impairments of investments (net)
16
1,639
1,655
Loadings from reserves
4
(121)
(117)
Interest expenses
(93)
4,322
4,229
Loadings from premiums
2,690
5,997
8,687
Operating realized gains/losses (net)
Delta
2019
2020
1,740
(1,707)
33
€ mn
- German Speaking Countries and
Central & Eastern Europe
income (net)
Operating income from financial assets and
Operating profit
Total revenues²
Delta
2019
2020
Delta
2019
2020
€ mn
Operating profit
Operating profit
Net income
Key figures Property-Casualty¹
PROPERTY-CASUALTY INSURANCE OPERATIONS
C_Group Management Report
Annual Report 2020 - Allianz Group
54
64
9_Including the application of transitional measures for technical provisions, the Solvency II capitalization ratio amounted to
240% as of 31 December 2020. For further information, please refer to the Risk and Opportunity Report.
8_For further information on the share buy-back program, please refer to note 20 to the Consolidated Financial
Statements.
7_For further information on shareholders' equity, please refer to the Balance Sheet Review.
subordinated bonds classified as shareholders' equity and unrealized gains/losses on bonds net of shadow accounting
are excluded.
6_Internal total revenue growth excludes the effects of foreign currency translation as well as acquisitions and disposals. For
a reconciliation of nominal total revenue growth to internal total revenue growth for each of our business segments and
the Allianz Group as a whole, please refer to the chapter Reconciliations.
5_Represents the ratio of net income attributable to shareholders to the average shareholders' equity at the beginning of
the period and at the end of the period. The net income attributable to shareholders is adjusted for net financial charges
related to undated subordinated bonds classified as shareholders' equity. From the average shareholders' equity undated
4_Figures as of 31 December. Figure as of 31 December 2020 excludes the application of transitional measures for technical
provisions.
KEY FIGURES
Loss ratio³
€ mn
59,412
68.0
69.5
%
(33)
208
175
Other result¹
(1,378)
3,983
2,605
€ mn
(283)
2,840
2,556
Operating investment income (net)
(674)
5,045
4,371
€ mn
(358)
1,997
1,639
Underwriting result
256
59,156
3_The Allianz Group uses operating profit and net income as key financial indicators to assess the performance of its business
segments and of the Group as a whole.
1.5%-p
1_For further information on Allianz Group figures, please refer to note 5 to the Consolidated Financial Statements.
2_Total revenues comprise Property-Casualty total revenues (gross premiums written and fee and commission income),
Life/Health statutory gross premiums written, operating revenues in Asset Management, and total revenues in Corporate
and Other (Banking).
-
11,855
10,751
140,455 142,369 (1,914)
ཟླ」 ༔」 ༔ སྒྱུ༩།༠༩། ཡ། ཡ
Diluted earnings per share
Earnings per share
Return on equity
Solvency II capitalization ratio
thereof: attributable to shareholders
Net income³
Operating profit³
(1,104)
Total revenues²
2019
2020
For a more detailed description of the results generated by each
individual business segment (Property-Casualty insurance operations,
Life/Health insurance operations, Asset Management, and Corporate
and Other), please consult the respective chapters on the following
pages.
Our shareholders' equity increased by € 6.8 bn to € 80.8 bn,
largely due to a net income attributable to shareholders of € 6.8 bn, a
€ 5.0 bn increase in unrealized gains and losses (net) and the issuance
of undated subordinated bonds of € 2.3 bn. Part of the increase was
offset by a € 4.0 bn dividend payout, the € 2.2 bn lower foreign currency
translation adjustments, as well as € 750 mn for the purchase of 4.9
million own shares. Our Solvency II capitalization ratio was strong at
207%9⁹
The lower operating profit and worsened non-operating result led
to a decrease in net income.
25.1%), mostly due to the absence of one-off tax benefits compared to
2019.
Key figures Allianz Group¹
KEY FIGURES
EXECUTIVE SUMMARY OF 2020 RESULTS
C_Group Management Report
63
Delta
€ mn
7,133
8,302
The Group Management Report also entails the following sections:
Statement on Corporate Management,
Other parts of the Group Management Report
In the course of 2020, there were only minor reallocations between
reportable segments.
As of October 2020, Allianz Real Estate was transferred from the Corpo-
rate and Other business segment into the Asset Management business
segment.
RECENT ORGANIZATIONAL CHANGES
Other information
Income taxes decreased by € 305 mn to € 2,471 mn, a result of
lower pre-tax income. The effective tax rate increased to 25.7% (2019:
Our non-operating result worsened by € 370 mn, resulting in a
€1,148 mn loss. Key drivers were higher restructuring and integration
expenses.
Our operating investment result decreased by €220 mn to
€ 23,634 mn, driven by significantly higher impairments and lower interest
and similar income, partly offset by higher realizations on debt securi-
ties and a higher trading result.
Our operating profit decreased by 9.3% mostly due to adverse
impacts from COVID-19. We registered a decrease in operating profits in
three of our four business segments: in Property-Casualty, this was caused
by a sharp drop in the underwriting result as well as in the operating
investment result, with the former being due to COVID-19-related
losses and lower run-off. In Life/Health, operating profit decreased but
still remained on a strong level supported by a resilient investment
margin. The decline was mainly due to a positive prior-year impact in
the United States and the disposal of Allianz Popular S.L. in Spain. In
Corporate and Other, the operating result worsened, mainly driven by
a lower operating investment result. Our Asset Management business
segment, on the other hand, registered operating profit growth from
higher average AuM and continued cautious cost management.
MANAGEMENT'S ASSESSMENT OF 2020 RESULTS
On an internal basis, our total revenues declined by 1.8% compared
to the previous year. Although most of this decline was attributable to
our Life/Health business in the United States and Germany, our Property-
Casualty business segment also registered a decrease, due to lower
volumes. Our Asset Management business segment, on the other
hand, generated higher revenues based on an all-time high total assets
under management (AUM) level.
Earnings summary
(1,169)
(1,107)
(5) %-p
(2.2)%-p
(2.42)
(2.52)
18.83
16.32
€
18.90
16.48
€
13.6
11.4
212
207
7,914
6,807
Takeover-Related Statements and Explanations, and the
Remuneration Report.
Operating profit
4,371
5,045
Delta
2019
2020
€ mn
Other result
Operating investment income (net)
Acquisition and administrative expenses amounted to € 13,846 mn in
2020, after € 14,119 mn in the previous year. Our expense ratio
improved significantly by 0.7 percentage points to 26.8%, as it bene-
fited from our acquisitions in the United Kingdom and a positive busi-
ness mix development at Allianz Partners.
Our positive run-off result was € 431 mn - after € 1,059 mn in 2019 -
translating into a run-off ratio of 0.8%. Reserve releases stemmed par-
ticularly from our operations in Reinsurance, Australia, and Italy, but
were in many operations lower compared to 2019, leading to a drop
in run-off. AGCS continued to have a negative impact on our run-off
result.
Reinsurance: 0.7 percentage points. This increase was mainly
due to the negative effects from the COVID-19 pandemic.
AGCS: 0.9 percentage points. The deterioration resulted from an
increase in natural catastrophes and a severe impact of COVID-19,
mostly on the losses from the Entertainment line of business.
The following operations weighed on the development of our accident
year loss ratio:
Fee and commission income
Other income
Allianz Direct: 0.3 percentage points, due to reduced claims fre-
quencies across all markets, with the strongest impact recorded in our
motor insurance business in Italy.
Italy: 0.5 percentage points, due to a reduction in claims fre-
quency.
The following operations contributed positively to the development of
our accident year loss ratio:
C_Group Management Report
65
Annual Report 2020 - Allianz Group
8 Represents claims and insurance benefits incurred (net) less previous year claims (run-off), divided by premiums earned
(net).
6_We comment on the development of our total revenues on an internal basis, which means figures have been adjusted for
foreign currency translation and (de-)consolidation effects to provide more comparable information.
7_Based on the average exchange rates in 2020 compared to 2019.
5_Represents the total of claims and insurance benefits incurred (net) plus acquisition and administrative expenses (net),
divided by premiums earned (net).
1_For further information on Property-Casualty figures, please refer to note 5 to the Consolidated Financial Statements.
2_Total revenues in Property-Casualty also include fee and commission income.
3_Represents claims and insurance benefits incurred (net) divided by premiums earned (net).
4_Represents acquisition and administrative expenses (net) divided by premiums earned (net).
Leaving aside losses from natural catastrophes, our accident year
loss ratio worsened by 0.1 percentage points to 68.6%.
Our accident year loss ratio stood at 70.3%, an increase by 0.3 per-
centage points compared to the previous year. Losses from natural
catastrophes were € 880 mn, compared to € 771 mn in 2019. This
translates into a negative effect on our combined ratio of 0.2 percent-
age points, as the impact from natural catastrophes increased from
1.5 percentage points in 2019 to 1.7 percentage points in 2020.
France: 0.4 percentage points, also driven by a reduction in
claims frequency.
1,640
1,946
(305)
(252)
3,314
3,061
(net of interest expenses)
Interest and similar income
Delta
2019
2020
€ mn
Our net income decreased by a significant € 1,378 mn. Along with the
reduction in our operating profit, our non-operating result decreased
significantly by € 771 mn. It was strongly affected by a deterioration of
our non-operating investment result and increasing restructuring
expenses related to our efficiency initiatives.
Net income
Our other result declined mostly due to negative developments in our
credit insurance business.
(33)
208
175
2
(2)
(1)
271
(1,888)
(1,617)
Fee and commission expenses
Other expenses
Other result
(1)
153
152
1_Consists of the underwriting-related part (aggregate policy reserves and other insurance reserves) of "change in
reserves for insurance and investment contracts (net)". For further information, please refer to note 27 to the
Consolidated Financial Statements.
(358)
49
1,997
Underwriting result
The decrease in our underwriting result was due to an overall
negative impact of COVID-19 amounting to € 1.1 bn, higher claims
from natural catastrophes, and a lower contribution from run-off. On
the other hand, strong improvements on the expenses side had a par-
tially offsetting effect. Overall, our combined ratio deteriorated by
0.8 percentage points to 96.3%.
We registered a sharp drop in our operating profit. While most of it was
driven by our underwriting result, our operating investment income
also contributed negatively.
Italy: Total revenues fell to € 3,794 mn, a decrease of 5.0% on an
internal basis. It was largely due to negative price effects in our motor
insurance business.
Euler Hermes: Total revenues amounted to € 2,755 mn, an inter-
nal decrease by 7.0%. Much of it was due to COVID-19-related unfa-
vorable volume effects in our credit insurance business.
Allianz Partners: Total revenues went down 19.0% on an internal
basis, totaling € 5,336 mn. The main reason for this was that the
COVID-19 pandemic caused a volume decline in our travel insurance
business.
The following operations weighed on internal growth:
Germany: Total revenues amounted to € 10,918 mn, an internal
growth of 1.6%. Key drivers were price increases in our motor and prop-
erty insurance business.
Turkey: Total revenues went up 17.1% on an internal basis, total-
ing € 1,003 mn. Much of this increase was owed to favorable volume
effects in our health and motor insurance business.
The following operations contributed positively to internal growth:
AGCS: Total revenues were € 9,339 mn, a 4.2% increase on an
internal basis. Key drivers were price increases in our Liability, Financial
Lines, and Property lines of business.
This included unfavorable foreign currency translation effects to
the amount of € 1,088 mn and positive (de)consolidation effects of
€ 2,201 mn. On an internal basis, our revenues decreased by 1.5%,
driven mainly by a negative volume effect of 4.8% and a positive price
effect of 3.8%.
On a nominal basis, we recorded a slight increase in total revenues by
0.4% compared to the previous year.
Total revenues
0.8%-p
95.5
96.3
%
Combined ratio5
1_Consists of fee and commission income/expenses and other income/expenses.
(0.7)%-p
27.5
26.8
%
Expense ratio
(674)
€ mn
liabilities carried at fair value through
Premiums earned (net)
2019
(312)
(263)
1,639
Underwriting result
investment contracts (net) (without expenses
for premium refunds)¹
Change in reserves for insurance and
273
(14,119)
(13,846)
(net)
(983)
(34,900)
(35,883)
Claims and insurance benefits incurred (net)
Acquisition and administrative expenses
(628)
1,059
431
Previous year claims (run-off)
(355)
(35,959)
(36,314)
Accident year claims
303
51,328
51,631
Delta
2020
Western & Southern Europe and
Asia Pacific
EXPENSES¹
78
2,268
2,389
0.9%-p
41.2
42.1
%
121
Separate accounts
120
182
(0.9) %-p
58.8
57.9
%
62
Regional allocation²
1_The term "multi-assets" refers to a combination of several asset classes (e.g., bonds, stocks, cash and real property)
used as an investment. Multi-asset class investments increase the diversification of an overall portfolio by distributing
investments over several asset classes.
America
Positive effects from market and dividends totaled € 131.5 bn. Of
these, € 108.2 bn came from PIMCO and were mainly related to fixed-
income assets, while € 23.3 bn were attributable to AllianzGI and
related to equity, fixed-income assets and multi-assets.
Net inflows of total assets under management (AUM) amounted to
€ 41.4 bn in 2020 (2019: € 74.2 bn) third-party net inflows were
€ 32.8 bn (2019: € 75.8 bn). The full year's net inflows were attributable
to both, PIMCO (€ 34.8 bn total and € 25.7 bn third-party) and
AllianzGI (€ 6.6 bn total and € 7.0 bn third-party).
1.3%-p
11.2
12.4
%
(0.6) %-p
33.4
32.8
%
Europe
Asia-Pacific
(0.6)%-p
55.4
54.8
%
Mutual funds
1
177
178
9.4
%
Multi-assets
Delta
2019
2020
Type of asset class
1.0%-p
8.6
9.5
%
Equities
31 December
31 December
As of
9.5
Overall three-year rolling
(0.1) %-p
Equities
Investment vehicle split¹
11
170
181
(0.6) %-p
3.3
2.7
%
Alternatives
47
1,801
1,848
Total
Alternatives
Multi-assets¹
Fixed income
As of
investment outperformance³
79
149
2,704
2,853
Net income
Operating profit
(34)
A decrease of € 19 mn in our net income was driven by a lower non-
operating result, a consequence of restructuring expenses. Another
contributing factor were higher income taxes due to the increase in op-
erating profit.
(4,460)
Operating expenses
(34)
(4,460)
(4,494)
Administrative expenses (net), excluding
acquisition-related expenses
183
(4,494)
1_Operating revenues/operating profit adjusted for foreign currency translation and (de-)consolidation effects.
Annual Report 2020 - Allianz Group
71
75
2,895
2,969
Delta
2019
2020
Net loss
Operating result
Operating expenses
Operating revenues
€ mn
Key figures Corporate and Other¹
KEY FIGURES
CORPORATE AND OTHER
C_Group Management Report
7,164
7,347
(3)
(7)
Performance fees were lower in alternative assets as a result of
the extreme volatility in the first quarter of 2020. While PIMCO recov-
ered strongly in the second half of the year, AllianzGI was burdened by
the challenging performance environment in the context of COVID-19
over the year.
Our operating revenues increased by 2.6% on a nominal basis. This
was driven by higher average third-party AuM mainly at PIMCO, due
to strong market effects - especially from fixed-income assets - com-
bined with net inflows. These positive impacts were partly offset by un-
favorable foreign currency translation effects. On an internal basis¹,
operating revenues grew by 3.6%.
Operating revenues
C_Group Management Report
Annual Report 2020 - Allianz Group
The decline in the overall three-year rolling investment outperfor-
mance is due to COVID-19-driven significant market dislocations and
the fact that often the investment universe for a global active manager
is significantly different from the respective benchmark.
70
4_Market and dividends represents current income earned on the securities held in client accounts as well as changes in the
fair value of these securities. This also includes dividends from net investment income and from net realized capital gains
to investors of both open-ended mutual funds and closed-end funds.
3_Net flows represent the sum of new client assets, additional contributions from existing clients - including dividend rein-
vestment - withdrawals of assets from and termination of client accounts and distributions to investors.
1_For further information on our Asset Management figures, please refer to note 5 to the Consolidated Financial Statements.
2_Represents operating expenses divided by operating revenues.
3_Three-year rolling investment outperformance reflects the mandate-based and volume-weighted three-year
investment success of all third-party assets that are managed by Allianz Asset Management's portfolio-management
units. For separate accounts and mutual funds, the investment success (valued on the basis of the closing prices) is
compared with the investment success prior to cost deduction of the respective benchmark, based on various metrics.
For some mutual funds, the investment success, reduced by fees, is compared with the investment success of the
median of the respective Morningstar peer group (a position in the first and second quartile is equivalent to
outperformance).
2 Based on the location of the asset management company.
1_Mutual funds are investment vehicles (in the United States, investment companies subject to the U.S. code; in Germany,
vehicles subject to the "Standard-Anlagerichtlinien des Fonds" Investmentgesetz) where the money of several
individual investors is pooled into one account to be managed by the asset manager, e.g., open-end funds, closed-end
funds. Separate accounts are investment vehicles where the money of a single investor is directly managed by the
asset manager in a separate dedicated account (e.g., public or private institutions, high net worth individuals, and
corporates).
(14) %-p
92
Other net fee and commission income rose, driven by higher av-
erage third-party AuM mainly at PIMCO.
%
Other operating revenues decreased due to a lower net interest
and similar income.
Our operating profit increased by 5.5% on a nominal basis, as growth
in operating revenues by far exceeded an increase in operating ex-
penses. On an internal basis¹, our operating profit went up by 7.2%,
which was due to higher average third-party AuM.
(11)
275
6,681
6,956
Other net fee and commission income
Other operating revenues
Operating revenues
(89)
490
402
Performance fees
Delta
2019
2020
€ mn
Asset Management business segment information
The nominal increase in administrative expenses was driven by
PIMCO and due to investments in business growth and infrastructure.
Our cost-income ratio went down as a consequence of stronger
growth in operating revenue and a lower increase in operating ex-
penses, compared to the previous year.
Operating profit
(3,800)
(0.2) %-p
78.3
1_PVNBP before non-controlling interests.
(0.3)
(0.3)
Administrative and other expenses as % of
average reserves².3
(0.4)
(8.0)
2 Aggregate policy reserves and unit-linked reserves.
3_Yields are pro rata.
(8.3)
4,708
4,359
Operating profit
Acquisition expenses and commissions as %
of PVNBP1
205
883
(349)
Acquisition expenses and commissions decreased along with lower
sales volumes, particularly in our U.S. fixed index annuity business and
in our capital-efficient products in our German life business. This was
partly offset by higher unit-linked sales in Italy as well as stronger pro-
tection & health sales in France. Administrative and other expenses
went up along with the increase in our reserves.
TECHNICAL MARGIN²
Our technical margin decreased, mainly because of a lower lapse
margin in the United States but also deteriorated risk margins in Swit-
zerland and France. The deconsolidation of Allianz Popular S.L. in
Spain also weighed on the margin. Positive factors included lower
claims and volume growth in the Asia-Pacific region as well as an
improved lapse result in Italy.
(206)
Impact of change in DAC
(1,570)
(1,951)
Amortization, unlocking, and true-up of DAC
1,813
1,745
Capitalization of DAC
2019
2020
€ mn
Impact of change in DAC
A decline in operating profit in our guaranteed savings & annuities line
of business was largely driven by increased hedging expenses and
lower loadings and fees in our U.S. variable annuity business. Another
key development was a shift to capital-efficient products, combined
with a lower contribution due to a smaller portfolio share in the Ger-
man life business. The operating profit in the protection & health line
of business decreased. Key drivers included the loss recognition in the
U.S. long-term care business, a deteriorated combined ratio in France,
and the deconsolidation of Allianz Popular S.L. in Spain. Lower claims
as well as growth in the Asia-Pacific region had a partially offsetting
effect. The operating profit generated by our unit-linked without guar-
antee line of business went down. Most of the decline resulted from the
disposal of Allianz Popular S.L. in Spain and a lower technical margin
in France, due to negative one-off effects. The rise registered in the op-
erating profit in the capital-efficient products line of business was pri-
marily due to lower acquisition costs and a higher portfolio share in the
German life business. Other contributing factors included the unlock-
ing of assumptions and a model refinement, as well as the recovered
spread margin in the United States. This was partly offset by a change
in the DAC amortization period in the United States in 2019, leading to
a favorable effect in that year, and in a corresponding negative impact
in 2020.
IN DEFERRED ACQUISITION COSTS (DAC)³
IMPACT OF CHANGE
1,087
Capital-efficient products
(65)
552
(5,638)
(5,458)
Acquisition expenses and commissions
Delta
2019
2020
Delta
2019
2020
€ mn
€ mn
Expenses
Operating profit by lines of business
OPERATING PROFIT BY LINES OF BUSINESS
C_Group Management Report
180
243
Guaranteed savings & annuities
2,421
488
Unit-linked without guarantee
96
(7,461)
(7,365)
Expenses
(70)
851
781
Protection & health
(84)
(1,823)
(1,907)
Administrative and other expenses
(418)
2,003
78.6
Delta
(68)
(382)
(450)
The impact of change in DAC turned negative, driven mainly by our
business in the United States. After an extension of the DAC amortiza-
tion period had caused a favorable effect in the previous year, amorti-
zation rose, also due to the loss recognition in the long-term care busi-
ness. Other drivers included the unlocking of assumptions in both our
fixed index and our variable annuity businesses as well as the recov-
ered spread margin in the fixed index annuity business. Lower capital-
ization was largely due to lower sales volumes in our fixed index annu-
ity products in the United States, an effect partly compensated by
stronger sales of unit-linked products in Italy and guaranteed savings
& annuity products in Taiwan.
€bn
Third-party assets under
management
Assets under management
Delta
2019
31 December
1,712
31 December
2020
As of
Third-party assets under management
Negative foreign currency translation effects amounted to
€ 114.4 bn and, for the most part, weighed on PIMCO's AuM.
Positive effects from consolidation, deconsolidation, and other
adjustments added € 62.6 bn to total AuM. This is mainly related to
Allianz Real Estate (ARE), which was transferred from the Corporate
and Other to the Asset Management business segment as of 1 Octo-
ber 2020, adding € 62.5 bn total AuM to PIMCO's total AuM. By the
end of the year, they had developed to a value of € 66.1 bn.
26
1,686
As of
1,686
1.5%
Business units' share
%
Fixed income
€ bn
Asset classes split
Composition of total assets under management
0.7%-p
21.2
21.9
%
AllianzGl
(0.7) %-p
78.8
78.1
%
PIMCO
1,712
€ bn
thereof: third-party assets under management as of
31 December
༄།ཟ།g།༅།ཟ།
Operating revenues
2019
2020
Key figures Asset Management¹
KEY FIGURES
ASSET MANAGEMENT
C_Group Management Report
69
Annual Report 2020 - Allianz Group
3_The impact of change in DAC includes effects of the change in DAC, unearned revenue reserves (URR), and the value of
business acquired (VOBA). It represents the net impact of deferral and amortization of acquisition costs and front-end
loadings on operating profit and therefore deviates from the IFRS financial statements.
2_The technical margin comprises the risk result (risk premiums less benefits in excess of reserves less policyholder partici-
pation), the lapse result (surrender charges and commission clawbacks) and the reinsurance result.
1 Expenses include acquisition expenses and commissions (excluding commission clawbacks, which are allocated to the
technical margin) as well as administrative and other expenses.
Our return on equity remained stable at 12.8%.
Return on equity
Our net income increased by € 243 mn. A higher non-operating result
- mainly due to increased realizations from the disposal of Allianz
Popular S.L. in Spain - and reduced income taxes outweighed the
decrease in operating profit.
€ mn
Net income
7,347
Operating profit
2,268
2,389
€ bn
Total assets under management as of 31 December
1,992
1,973
€ mn
Net income
62.3
61.2
%
Cost-income ratio²
2,704
2,853
€ mn
7,164
(3,496)
(304)
(831)
Our exposure to equities decreased due to sales and market
About 93% of the debt portfolio was invested in investment-
grade bonds and loans.³ Our government bonds portfolio contained
bonds from France, Germany, Italy and Spain that represented 17.0%,
13.7%, 7.6% and 6.2% of our portfolio shares. Our corporate bonds
portfolio contained bonds from the United States, Eurozone, and
Europe excl. Eurozone. They represented 38.4%, 33.6 % and 12.6 %
of our portfolio shares.
Compared to year-end 2019, our overall asset portfolio increased by
€ 35.9 bn mainly in our debt investments.
Total
Cash/other
Real estate
movements.
Equities
Banks
Corporate bonds
Covered bonds
Government bonds
Debt instruments, thereof:
Type of investment
Other
1_This does not include non-controlling interests of €3,773 mn and € 3,363 mn as of 31 December 2020 and 31 Decem-
ber 2019, respectively. For further information, please refer to note 20 to the Consolidated Financial Statements.
2_For further information, please refer to note 20 to the Consolidated Financial Statements
3_Excluding self-originated German private retail mortgage loans. For 3%, no ratings were available.
Annual Report 2020 - Allianz Group
%
€ bn
€ bn
€ bn
Delta
2019
31 December
As of
As of
31 December
2020
Delta
2019
31 December
31 December
2020
As of
As of
Asset allocation and fixed-income portfolio overview
Shareholders' equity increased largely due to the issuance of undated
subordinated bonds of € 2.3 bn, higher unrealized gains and losses
(net), and net income attributable to shareholders of € 6.8 bn. The div-
idend payout in May 2020 (€ 4.0 bn), the share buy-back program²
with an amount of € 750 mn, and the lower foreign currency transla-
tion adjustments (€ 2.2 bn) partly offset this increase.
The following portfolio overview covers the Allianz Group's assets held
for investment, which are largely driven by our insurance businesses.
STRUCTURE OF INVESTMENTS - PORTFOLIO
OVERVIEW
Undated subordinated bonds
28,928
28,928
Paid-in capital
Shareholders' equity
Delta
2019
2020
31 December
31 December
As of
As of
€ mn
Shareholders' equity
Shareholders' equity¹
2,259
%
2,259
31,371
The following section focuses on our financial investments in debt
instruments, equities, real estate, and cash, as these reflect the major
developments in our asset base.
As of 31 December 2020, total assets amounted to € 1,060.0 bn and
total liabilities were € 975.4 bn. Compared to year-end 2019, total
assets and total liabilities increased by € 48.8 bn and € 41.6 bn,
respectively.
Total assets and total liabilities
4,956
6,820
74,002
80,821
17,691
22,648
Unrealized gains and losses (net)
Total
(2,189)
(2,195)
(4,384)
Foreign currency translation adjustment
1,793
29,577
Retained earnings
BALANCE SHEET REVIEW
%-p
643.6
790.3
2.6%
2.6%
1.0
19.4
20.5
754.4
0.1
1.8%
1.2
13.0
14.3
(1.1)
10.4%
1.7%
35.9
100.0%
100.0%
1_For further information about changes in the reserves for loss and loss adjustment expenses for the Property-Casualty
business segment, please refer to note 15 to the Consolidated Financial Statements.
For details on the regulatory capitalization of the Allianz Group, please
refer to our Risk and Opportunity Report.
Regulatory capital adequacy
Please refer to the Risk and Opportunity Report for a description
of the main concentrations of risk and other relevant risk positions.
The Allianz Group has also entered into contractual relationships
with various types of structured entities. They have been designed in
such a way that their relevant activities are directed by means of con-
tractual arrangements rather than voting or similar rights. Typically,
structured entities have been set up in connection with asset-backed
financing and certain investment fund products. For more details on our
involvement with structured entities, please refer to note 36 to the Con-
solidated Financial Statements.
The Allianz Group enters into various commitments including loan
commitments, purchase obligations, and other commitments. For more
details, please refer to note 38 to the Consolidated Financial State-
ments.
In the normal course of business, the Allianz Group may enter into
arrangements that do not lead to the recognition of assets and liabili-
ties in the Consolidated Financial Statements under IFRS. Since the
Allianz Group does not rely on off-balance sheet arrangements as a sig-
nificant source of revenue or financing, our off-balance sheet exposure
to loss is immaterial relative to our financial position.
Off-balance sheet arrangements
Life/Health reserves for insurance and investment contracts increased
by €23.2 bn to € 596.1 bn. A € 20.0 bn increase (before foreign cur-
rency translation effects) in aggregate policy reserves was driven by
our operations in Germany (€ 14.5 bn) and the United States (€ 6.9 bn
before foreign currency translation effects). Reserves for premium
refunds increased by € 13.3 bn (before foreign currency translation
effects), due to higher unrealized gains to be shared with policyhold-
ers. Foreign currency translation effects decreased the balance sheet
value by € 10.3 bn, mainly due to the weaker U.S. Dollar (€ 9.2 bn).
LIFE/HEALTH LIABILITIES
As of 31 December 2020, the business segment's gross reserves for loss
and loss adjustment expenses as well as discounted loss reserves
amounted to € 72.8 bn, compared to € 70.0 bn at year-end 2019. On
a net basis, our reserves, including discounted loss reserves, increased
from € 60.1 bn to € 62.0 bn.¹
PROPERTY-CASUALTY LIABILITIES
LIABILITIES
C_Group Management Report
77
9.3%
(5.2)
78.3
73.1
11.1%
9.8%
(4.6)
71.3
66.7
0.9
37.0%
37.9%
20.3
238.1
258.5
1.0
85.3%
86.3%
38.7
(1.3)
682.4
249.5
20.6
(0.3)
10.8%
10.5%
2.4
69.4
71.8
(0.3)
5.6%
5.3%
0.1
35.8
35.9
1.0
35.6%
36.6%
228.9
C_Group Management Report
Annual Report 2020 - Allianz Group
76
C_Group Management Report
73
Annual Report 2020 - Allianz Group
2_The information presented in the sections "Economic outlook", "Insurance industry outlook", and "Asset management in-
dustry outlook" is based on our own estimates.
At the beginning of 2021, equity markets have already consumed
most of the optimism story and high valuations provide very little
In our base case scenario, however, we expect policymakers to
step up support to limit long-term scarring to the economy and provide
a tailwind to the recovery. On the fiscal side, in Europe, safety net
measures look set to be extended while in the United States stimulus
spending will be stepped up in 2021. Meanwhile, central banks will
continue with their bond purchases to ensure favorable refinancing
rates to the public and the private sectors, with the U.S. Federal
Reserve and European Central Bank maintaining record-low interest
rates for the time being.
cushion against unexpected bad news. On the other hand, markets for
safe assets, i.e., government bonds, embrace a more cautious stance.
Our baseline scenario assumes a slight increase in yields due to refla-
tionary expectations as the economic recovery unfolds.
The downside risks are sizeable. First and foremost, vaccination
hurdles on the demand side (vaccination skepticism) as well as the
supply side (production and distribution bottlenecks) could easily
derail the recovery; in that respect, the slow start to the vaccination
rollout in Europe is not promising. Other risks include an unexpected
strong bout of inflation, a premature withdrawal of fiscal and mone-
tary support, a spike in insolvencies and social unrest in response to
rising inequalities and poverty in the aftermath of the pandemic.
2021 will be the year of the vaccine. The progress of the global vac-
cination campaign will be the decisive factor for the economic recovery
from the pandemic. After a lackluster start into 2021 - due to new
COVID-19 restrictions in Europe and other parts of the world - a suc-
cessful vaccination of vulnerable populations (20-40% of the total)
should set the stage for moderate growth in the second half of 2021.
Main driver of the rebound will be the return of confidence, helping to
restart the service economy, to unleash forced and precautionary sav-
ings, and to resume corporate investments. All in all, we expect global
gross domestic product to expand by 4.6% in 2021, with China setting
the pace (+8.4%) and the United States and the Eurozone registering
more modest growth of 3.6% and 4.3%, respectively.
Economic outlook²
1_Represents the ratio of net income attributable to shareholders to the average shareholders' equity at the beginning of the period and at the end of the period. The net income attributable to shareholders is adjusted for net financial charges
related to undated subordinated bonds, classified as shareholders' equity. From the average shareholders' equity undated subordinated bonds, classified as shareholders' equity, and unrealized gains/losses on bonds net of shadow
accounting are excluded.
2_Represents the ratio of net income to the average total equity, excluding unrealized gains/losses on bonds, net of shadow accounting, at the beginning of the year and at the end of the year.
Operating profit amounted to € 2.9 bn, continuing the organic growth driven by higher AuM-driven fees.
At 61.2%, the cost-income ratio is clearly below 64%.
Total AuM recorded a growth of 5.3 % (despite negative currency effects of 114 bn) due to an outstanding
market return (€ 131 bn) and strong third-party net inflows (€ 33 bn).
Operating investment result reached € 20.5 bn, due to higher realized gains and a better trading result
partly offset by higher impairments, and lower interest and similar income.
1_For more detailed information on the previous year's outlook for 2020, please see the Annual Report 2019 from page 65
onwards.
COVID-19 pandemic to accelerate the already existing trends within
the industry. In order to continue growing, it will remain vital for asset
managers to keep sufficient business volumes, ensure efficient opera-
tions, and maintain a strong investment performance.
Insurance industry outlook
The expected economic recovery and heightened risk awareness after
the pandemic should give insurance markets some tailwinds in 2021.
Premiums are likely to increase in some lines of business. One of the
legacies of the pandemic that will shape 2021 (and the following
years) is accelerated digitalization: digital processes and distribution
channels will continue to become more relevant. Another legacy, less
pleasant, are low or even negative interest rates, which have become
even more entrenched. Thus, falling investment returns will impact
industry profitability in 2021 and beyond.
Selective profitable growth.
Protect shareholder value while continuing to provide attractive returns
and dividends.
Operating profit of € 12.0 bn, plus or minus € 1 bn.
ASSUMPTIONS
ASSET MANAGEMENT
LIFE/HEALTH
PROPERTY-CASUALTY
ALLIANZ GROUP
Outlook 2021
Overview: outlook and assumptions 2021 for the
Allianz Group
The asset management industry benefits from the strong market
performance, but nevertheless industry profitability remains under
pressure, due to continuous flows into passive products, new pricing
models and rising distribution costs. We also expect the trend towards
industry consolidation to persist, accompanied by a growing cost
awareness. Both developments lead to respective restructuring activ-
ities within the industry. At the same time, digital channels such as
robo-advisory platforms are likely to continue gaining traction. The
strengthening of regulatory oversight and reporting could also affect
profitability in the asset management sector. Opportunities in the
area of active asset management will continue to exist, particularly in
alternative and solutions-oriented strategies, but also in the area of
ESG (Environment, Social, Governance) investing. We expect the
Monetary easing by central banks across the globe as well as fiscal
support by many governments in the context of the COVID-19 pan-
demic, massively helped capital markets. Market volatility, on the
other hand, is very likely to persist and investors are expected to stay
alert. We therefore expect a volatile and overall moderate capital
market contribution to assets under management growth.
Asset management industry outlook
In the life sector, premium income should largely rebound in 2021.
This optimism is based on two observations: the pandemic should have
raised the awareness of the need for risk cover, especially for
healthcare and life insurance, and the lockdowns have swollen the
amount of excess savings, parts of which might be used to bolster old-
age provisions. But there are also reasons to be cautious: first and fore-
most, ultra-low interest rates, which will not only impact profitability
but also continue to weigh on the demand for savings-type insurance
products.
In the non-life sector, premium growth is expected to return to pre-
crisis levels, with emerging markets - and particularly China - outper-
forming advanced markets by a wide margin. Besides the recovery,
another supportive factor is the ongoing hard market in commercial
lines. On the other hand, investment income will remain under pressure
and in some business lines claims from COVID-19 are likely to drag on.
Social inflation and impacts from natural catastrophes are other fac-
tors that could drive claims higher and thus require thorough claims
management to preserve underwriting profitability.
At € 4.4 bn, our operating profit was within the target range. Positive contribution from growth in Germany
and Asia as well as a favorable investment margin from the unlocking of assumption in the United States
are offset by higher hedge costs driven by higher market volatility due to COVID-19 in the United States.
Our 12.8% ROE² is at the upper end of the outlook range.
Revenues of € 74.0 bn are in the range indicated in our outlook. Stronger unit-linked sales in Italy were
offset by lower growth of capital-efficient products in Germany and in the United States.
Operating investment income (net) decreased, driven by lower interest and similar income.
Combined ratio was at 96.3 %, missing our target. Despite an approximate 2 percentage points negative
COVID-19 impact, our accident year loss remained almost stable. Strong improvements in our expense ratio
could not compensate for this COVID-19 deterioration and a lower run-off level.
2020 results versus previous year's outlook for 2020
C_Group Management Report
Overview: 2020 results versus previous year's outlook¹
OUTLOOK 2021
Annual Report 2020 - Allianz Group
72
1_For further information on Corporate and Other figures, please refer to note 5 to the Consolidated Financial Statements.
Our net loss increased, driven by the decline of our operating
result, which was only partly offset by a significantly higher income tax
result.
We recorded a decline in our operating result in 2020, mainly due to a
weaker operating investment result and higher administrative
expenses compared to the previous year - with part of that cost
increase resulting from our contribution to a COVID-19 solidarity fund.
However, the result of our internal IT provider improved.
Earnings summary
(22)
(1,194)
(1,216)
(229)
(602)
Allianz Group
NPS: for over 75% of Allianz Group business segments to outperform
Property-Casualty
Asset Management
Operating profit of € 4.4 bn was below our target range. Our underwriting result was negatively impacted
by COVID-19.
Total revenues increased by 0.4%. Internal growth of (1.5)% was mainly driven by Allianz Partners partially
offset by AGCS.
Return on equity (ROE)¹ amounted to 11.4% (2019: 13.6%). In the interest of dividend continuity, our
ambition is to keep the regular dividend per share at least at the previous year's level. We therefore
propose a stable dividend at € 9.60 (2019: € 9.60) per share. This leads to a pay-out ratio of 58 %.
Total revenues decreased by 1.8% on an internal basis, compared to 2019. The decrease was driven by the
Life/Health as well as the Property-Casualty segments.
The outlook for 2020 assumed no significant deviation from underlying assumptions, i.e., stable global
economic growth and no major disruption. Due to the impact of the pandemic, the overall outlook for 2020
was withdrawn on 30 April. Our operating profit in 2020 was € 10.8 bn. Adjusted for the negative impact of
COVID-19 of EUR 1.3 bn, the outlook would have been achieved.
Results 2020
Operating profit in the range of € 2.4 bn to € 3.0 bn.
Cost-income ratio below 64%.
Pressure on investment income due to low and even negative
interest rates and continued capital market volatility.
Moderate increase in total AuM due to moderate third-party net
inflows, supported by an overall slightly positive market return in
a volatile market environment.
RoE² between 10.0% and 13.0%.
Pressure on operating investment income (net) to continue, due to
reinvestments in a consistently low interest rate environment.
Continue to focus on profitable growth; keep developing capital-
efficient products; expand to new markets. Revenues expected to
be in the range of € 71.0 bn to € 77.0 bn.
Operating profit between € 4.1 bn and € 4.7 bn.
Combined ratio of approximately 94%.
Operating profit in the range of € 5.2 bn to € 6.0 bn.
Revenue growth of approximately 6% of which 4% come from
our acquisitions in the United Kingdom.
Selective profitable growth.
Protection of shareholder value while continuing to provide
attractive returns and dividends.
Outlook 2020 - as per Annual Report 2019
Operating profit of € 12.0 bn, plus or minus € 0.5 bn.
Life/Health
their local market (meaning either above market or Loyalty Leader
position).
IMIX of 73% plus.
Revenue growth of up to 6% of which 1% will come from our acquisition
in Spain.
In addition, as part of our policy to return capital to the sharehold-
ers on a flexible basis, Allianz SE executed five share buy-back pro-
grams with an aggregate volume of EUR 8.2 bn in the period from
2017 to 2020. Due to the ongoing economic uncertainties caused by
the COVID-19 pandemic, Allianz SE's Board of Management an-
nounced on 6 November 2020 that it would no longer execute the sec-
ond tranche of € 750 mn of the initial announced € 1.5 bn 2020 share
buy-back program.
While the 2020 earnings are impacted by the COVID-19 crisis,
Allianz Group aims to keep the regular dividend per share at least at
the previous year's level. For 2020, the Allianz SE Board of Manage-
ment and the Supervisory Board propose a dividend of € 9.60 per
share.
For further information on our non-financial key performance in-
Our IMIX was 78% in 2020, a five percentage point improvement com-
pared to 2019. For 2021, our IMIX target is 73% plus. Although the
Allianz Group already exceeded its 2021 targets in 2020, we will start
working on new global focus areas and continue with the VOICE initi-
ative in order to further improve results.
INCLUSIVE MERITOCRACY INDEX (IMIX)
This means that we exceeded the 2021 group target (75% plus outper-
forming) one year ahead of time. Main drivers for this success have
been the VOICE of the customer initiative, product simplifications, ex-
panding digital service offerings and COVID-19 measures.
45 out of 57 measured segments having been either above local
market or Loyalty Leaders resulting in a share of 79% (2019: 70%)
34 out of 57 measured segments having been Loyalty Leaders re-
sulting in a share of 60 % (2019: 46%).
We achieved the highest ever measured NPS results for Allianz, with:
NET PROMOTER SCORE (NPS)
C_Group Management Report
75
Annual Report 2020 - Allianz Group
1_Operating revenues adjusted for foreign currency translation and (de)consolidation effects.
As outlined in our Remuneration Report as well as the section "Our
Strategy" in our Risk and Opportunity Report, we have set ourselves
non-financial targets. Below, we provide an overview of how the most
important of these targets have developed, and are expected to de-
velop in 2021.
Non-financial key performance indicators
All of the above remains subject to our sustainable Solvency II
capitalization ratio above 160% - which is considerably below our
year-end 2020 level of 207 %2 and 20 percentage points below our
minimum solvency ambition for the Solvency II capitalization ratio of
180%.
We recorded an operating loss of € 0.8 bn in Corporate and Other in
2020. For 2021, we envisage an operating loss of € 0.8 bn, plus or mi-
nus 10%.
dicators, please refer to the Combined Separate Non-Financial Re- Management's overall assessment of the current
Financing, liquidity development,
and capitalization
2_Including the application of transitional measures for technical provisions, the Solvency II capitalization ratio amounted to
240 % as of 31 December 2020.
1_This represents management's current state of planning and may be revised in the future. Also, note that the decision
regarding dividend payments in any given year is subject to specific dividend proposals by the Management and Super-
visory Boards, each of which may elect to deviate, if and as appropriate under the then prevailing circumstances, as well
as to the approval of the Annual General Meeting.
The Allianz Group assumes no obligation to update any information or forward-looking statement
contained herein, save for any information we are required to disclose by law.
No duty to update
Deviations may arise due to changes in factors including, but not limited to, the following: (i) the general
economic and competitive situation in the Allianz Group's core business and core markets, (ii) the
performance of financial markets (in particular market volatility, liquidity, and credit events), (iii) the
frequency and severity of insured loss events, including those resulting from natural catastrophes, and the
development of loss expenses, (iv) mortality and morbidity levels and trends, (v) persistency levels, (vi)
particularly in the banking business, the extent of credit defaults, (vii) interest rate levels, (viii) currency
exchange rates, most notably the EUR/USD exchange rate, (ix) changes in laws and regulations, including
tax regulations, (x) the impact of acquisitions including and related integration issues and reorganization
measures, and (xi) the general competitive conditions that, in each individual case, apply at a local, regional,
national, and/or global level. Many of these changes can be exacerbated by terrorist activities.
This document includes forward-looking statements, such as prospects or expectations, that are based on
management's current views and assumptions and subject to known and unknown risks and uncertainties.
Actual results, performance figures, or events may differ significantly from those expressed or implied in
such forward-looking statements.
Cautionary note regarding forward-looking statements
The COVID-19 pandemic continues to have a significant impact
on individuals, society, business and the wider economy across the
globe. The insurance industry was hit, but the Allianz Group has re-
sponded quickly, has introduced measures to mitigate the adverse im-
pact and still continues to run its business profitably.
At the date of issuance of this Annual Report and based on current in-
formation regarding natural catastrophes and capital market trends -
in particular foreign currency, interest rates, and equities -, the Board
of Management has no indication that the Allianz Group is facing any
major adverse developments.
economic situation of the Allianz Group
Allianz management is committed to have shareholders participate in
the economic development of Allianz Group through dividend pay-
ments. Through prudent capital management, Allianz Group aims to
maintain a healthy balance between an attractive yield and invest-
ment in profitable growth. Of the Group's net income attributable to
shareholders, we will continue to pay out 50% as a regular dividend.
Expected dividend development¹
We are managing our portfolios with great diligence to ensure
that the Group has sufficient resources to back its solvency capital and
liquidity needs. In addition, we will continue to monitor the sensitivity
of our Solvency II capitalization ratio with regard to changes in inter-
est rates and spreads, by continuing to ensure prudent asset/liability
management and life product design.
As a result, we have full access to financial markets and are in a
position to raise financing at low cost. We are determined to maintain
our financial flexibility, which is supported by both prudent steering of
our liquidity resources and our well-balanced debt maturity profile.
Allianz Group enjoys a very robust liquidity position and excellent fi-
nancial strength as well as healthy business mix and global diversifi-
cation, which allow us to outperform despite challenges in the perfor-
mance of our industrial insurance segment following the COVID-19
pandemic. Allianz Group Solvency II capitalization is well above regu-
latory requirements.
port.
Annual Report 2020 - Allianz Group
CORPORATE AND OTHER (INCLUDING
CONSOLIDATION)
For 2021, we envisage overall moderate third-party net inflows and
market returns at both PIMCO and AllianzGI, with relatively stable
margins and stable performance fees, resulting in modest growth in
operating revenues. We also assume the U.S. Dollar to remain rela-
tively stable compared to 2020. All things considered, we expect our
2021 operating profit to be at € 2.8 bn, plus or minus 10% (2020:
€ 2.9 bn).
For further information on our ambitions for the period 2019-2021,
please see section "Our business aspirations" in the Risk and
Opportunity Report.
A 10% weakening (strengthening) of the U.S. Dollar, com-
pared to the assumed exchange rate of 1.17 to the Euro,
would have a negative (positive) effect on operating profits of
approximately € 0.4 bn.
An average U.S. Dollar to Euro exchange rate of 1.17.
No major disruptions in the capital markets,
No disruptive fiscal or regulatory interference,
Level of claims from natural catastrophes at expected average
levels,
A 100 basis point increase (decrease) in interest rates would
raise (lower) the expected operating profit by less than
€ 0.1 bn in the first year that follows the rate change.
Expected global economic recovery,
Interest rates to remain at the current level,
Our outlook assumes no significant deviations from our underlying as-
sumptions - specifically:
Moderate increase in AuM driven by slight positive market return
combined with third-party net inflows at PIMCO and Allianz Gl.
Operating profit € 2.8 bn, plus or minus 10 %.
Cost-income ratio approximately 62%
Pressure on investment income due to low interest rates and continued
capital market volatility.
RoE between 10.0 % and 13.0 %.
Operating profit of € 4.4 bn, plus or minus 10 %.
Continue to focus on profitable growth; keep developing capital-efficient
products; expand to new markets. Revenues expected to be in the range
of € 67.0 bn to € 73.0 bn.
Pressure on operating investment income (net) to continue, due to
reinvestments in a consistently low interest rate environment.
Combined ratio of approximately 93 %.
Operating profit of € 5.6 bn, plus or minus 10%.
74
Our cost-income ratio is expected to be approximately 62% in
2021 (2020: 61.2 %) as we continue to invest in business growth. Over
the mid-term, we expect to maintain it at that level.
Annual Report 2020 - Allianz Group
Management's assessment of expected revenues
and earnings for 2021
ASSET MANAGEMENT
Allianz continuously works to make the Life/Health business
model more resilient to market volatility, for instance, by adjusting our
products to market needs while keeping in line with our strategy. Go-
ing forward, we will continue to pursue profitable growth and to im-
prove our capital-efficient products - always with a particular focus
on the customer - while exploring new market opportunities and
building on our strong track record of product innovation. In addition,
we will continue to actively manage both our new and our in-force
business through continuous price reviews, expense management, as-
set/liability management, crediting strategies and reinsurance solu-
tions. As in the past years, this should allow us to mitigate the impacts
of difficult market conditions, in particular negative interest rates, and
achieve our profitability targets.
One of the key performance indicators used in steering our
Life/Health business segment is RoE. In 2021, we expect it to be be-
tween 10.0 % and 13.0%.
At € 4.4 bn, our Life/Health operating profit was within the target range
in 2020. For 2021, we expect this business segment's operating profit
to be at € 4.4 bn, plus or minus 10%.
LIFE/HEALTH INSURANCE
Overall, we expect our 2021 operating profit to be at € 5.6 bn, plus
or minus 10% (2020: € 4.4 bn).
As the low-interest-rate environment is likely to stay, investment in-
come will remain under pressure due to the rather short investment
spans in our Property-Casualty business segment. Going forward, we
will continue to actively adapt our investment strategy to changing
market conditions.
Our combined ratio was 96.3 % in 2020, missing our target. This
was mainly due to negative COVID-19 impacts. In 2021, we envisage a
combined ratio of approximately 93%. The underlying assumption is
that the aggregate effect of improvements in pricing, claims manage-
ment, and productivity will compensate for any inflation in underlying
claims. Furthermore, impacts from COVID-19 are mainly expected from
Euler Hermes and Allianz Partners. As for impacts from natural catas-
trophes, despite the highly volatile nature of such catastrophes in recent
years we assume claims to continue at comparable levels going for-
ward.
We believe that the overall rise in prices that we saw in a number
of markets in the past year will continue in 2021. Nevertheless, we will
maintain our focus on achieving strong underwriting results by adher-
ing to our strict underwriting discipline, as we have in previous years,
and we will be prepared to accept a lower top line if we fail to achieve
target margins.
We expect revenue growth at Allianz Partners where we have
pooled our B2B2C activities. We expect growth to pick up here in the
second half of the year, depending on further developments of the
COVID-19 pandemic. Further growth is likely to happen in Germany
and Ireland as well as in Asian markets such as China.
We expect our revenues to increase by up to 6% in 2021 (2020: 0.4%),
assuming a fast recovery from the COVID-19 pandemic, of which 1%
will come from our acquisition in Spain. Organic growth will be sup-
ported by favorable price and volume effects.
PROPERTY-CASUALTY INSURANCE
Our net income attributable to shareholders was also affected by
the pandemic in 2020, reaching a total of € 6.8 bn in 2020. Consistent
with our disclosure practice in the past, and given the susceptibility of
our non-operating results to capital market developments, we refrain
from providing a precise outlook for net income. However, as our out-
look presumes no major disruptions in our capital markets we antici-
pate a higher net income for 2021.
Our 2020 operating profit was € 10.8 bn, with the pandemic re-
ducing it by an estimated € 1.3 bn. As we do not expect continued ma-
terial impact from the pandemic for 2021 comparable to last year, we
envisage strong performance in all business segments and an overall
operating profit of € 12.0 bn, plus or minus € 1.0 bn for this year.
In 2020, our total revenues were € 140.5 bn, a 1.3% decrease on a
nominal and a 1.8 % decrease on an internal basis, ¹ compared to 2019.
For 2021, we envisage moderate growth, with strong growth in Prop-
erty-Casualty, moderate growth in Asset Management and
Life/Health revenues remaining rather stable, owing to our selective
focus on profitable growth.
C_Group Management Report
1,250
Non-Euro
2019
OUR BUSINESS ASPIRATIONS
OUR STRATEGY
Risk identification and underwriting: A robust system of risk identi-
fication and underwriting forms the foundation for adequate risk
management decisions. Supporting activities include standards
for underwriting, valuation methods, individual transaction and
new product approvals, emerging-/operational-/top-risk assess-
ments, liquidity risk and scenario analyses, amongst others.
Risk strategy and risk appetite: Our risk strategy defines our risk
appetite consistent with our business strategy. It ensures that
rewards are appropriate based on the taken risks and the required
capital. It also ensures that delegated decision-making bodies are
in line with our overall risk-bearing capacity and strategy.
Risk reporting and monitoring: Our comprehensive qualitative
and quantitative risk monitoring and reporting framework pro-
vides management with the transparency needed to assess
whether our risk profile remains within the approved limits and to
identify emerging issues and risks quickly. For example, risk dash-
board and limit utilization reports as well as scenario analyses and
stress tests are regularly prepared and communicated.
Communication and transparency: Transparent risk disclosure
provides the basis for communicating our strategy and perfor-
mance to internal and external stakeholders, ensuring a sustain-
able positive impact on valuation and financing. It also strength-
ens the risk awareness and risk culture throughout the entire
Group.
Our risk management system is based on the following four pillars:
Integration of risk considerations and capital needs into manage-
ment and decision-making processes by attributing risk and allo-
cating capital to business segments, products, and strategies.
Consistent and proportional application of an integrated risk cap-
ital framework to protect our capital base and support effective
capital management.
Promotion of a strong risk management culture, supported by a
robust risk governance structure.
As a provider of financial services, we consider risk management to be
a core competency and an integral part of our business. Our risk man-
agement framework covers all operations and subsidiaries within the
Group in proportion to the inherent risks of their activities, ensuring that
risks across the Group are consistently identified, analyzed, assessed,
and adequately managed. The key elements of our risk management
framework are:
RISK MANAGEMENT FRAMEWORK
Risk governance system
In addition, our liquidity risk management framework ensures that
all legal entities in scope are responsible for managing their liquidity
risks and maintaining a sufficient liquidity position under both market
conditions (expected as well as stressed) and business conditions.
We closely monitor the capital position and risk concentrations of
the Group and its related undertakings and apply regular stress tests
(including standardized, historical, and reverse stress test scenarios as
well as monthly stress and scenario analyses focusing on current and
possible future developments). These analyses allow us to take appro-
priate measures to preserve our continued capital and solvency
strength. For example, the risk capital reflecting the risk profile and the
cost of capital being an important aspect which is considered in busi-
ness decisions. Furthermore, we ensure a close alignment of the risk
and business strategy by the fact that business decisions to achieve our
set targets are taken within the determined risk appetite and in line
with the risk strategy. The implemented sound processes to steer the
business and assess and manage associated risks ensure a continuous
alignment of the risk and business strategy and enable us to detect
and address any potential deviations.
In addition, we take the requirements of rating agencies into
account. While capital requirements imposed by regulators constitute
a binding constraint, meeting rating agencies' capital requirements
and maintaining strong credit ratings are strategic business objectives
of the Allianz Group.
Allianz aims to ensure that the Group is adequately capitalized at all
times and that all related undertakings at least meet their respective
regulatory capital requirements for the benefit of both shareholders
and policyholders.
Target and strategy of risk management
The Board of Management of Allianz SE has defined the following
objectives for Allianz Group's medium-term strategy with the motto
"Simplicity wins":
Outperform: We seek to move ahead of our competitors, both tra-
ditional businesses and disruptors.
Transform: We seek to become simpler and deeply digital and to
make our businesses more scalable.
Rebalance: We seek to build leading positions in large, profitable,
and fast-growing geographies as well as in new areas of business.
Inclusive Meritocracy: Reinforce a culture where both people and
performance matter.
Growth Engines: Systematically exploit new sources for profitable
growth.
Technical Excellence: Move to data-driven product design, pricing,
and claims handling.
Digital by Default: Build legacy-free platforms with automated
core processes.
True Customer Centricity: Design intuitive products and processes
to achieve loyalty leadership in our core markets.
-
To implement these strategic objectives, we have defined a number of
strategic priorities, and are implementing initiatives and programs to
address the five dimensions of our Renewal Agenda.
RISK AND OPPORTUNITY REPORT
OUR BUSINESS STRATEGY
and the transition of our proprietary investment portfolio to net-zero
emissions by 2050.
C_Group Management Report
Annual Report 2020 - Allianz Group
84
4
To ensure the sustainability of our performance, we have set our-
selves non-financial health targets: For customer loyalty, our ambition
is for more than 75% of the business segments of our entities to be or
become rated by their customers as a loyalty leader or above-market
in terms of Net Promoter Score (NPS). In terms of employee engage-
ment, our ambition is to have the Inclusive Meritocracy Index above
73%. At the same time, we have also set a number of sustainability tar-
gets such as the reduction of our corporate greenhouse gas emissions
These objectives have been translated into clear ambitions for the
period 2019-2021. With regard to financial performance, we strive
for a return on equity (excluding unrealized gains/losses on bonds) of
more than 13%, while growing our earnings per share at a compound
annual growth rate of more than 5% (baseline full year 2018).
The COVID-19 pandemic has accelerated some trends that shape
the insurance markets, while halting others. The altered environment
has reinforced many of our strategic priorities, for example, digital by
default, simplification, and rebalancing of our product portfolios, for
example towards Health and Protection insurance, and the transfor-
mation towards higher resilience and agility.
Allianz SE's Board of Management has also defined a strategy for the
management of risks. This risk strategy places particular emphasis on
protecting the Allianz brand and reputation, remaining solvent even in
the event of extremely adverse scenarios, maintaining sufficient liquid-
ity to meet financial obligations, and providing resilient profitability.
C_Group Management Report
Annual Report 2020 - Allianz Group
Acquisition costs
95
131
on reinsurance business ceded
Commissions and profit received
(2,672)
(3,194)
Amortization, unlocking, and true-up of DAC
(31)
(36)
Scope
(1,109)
(1,127)
Definition: policyholder participation³
38
(5,144)
(4,624)
Administrative and other expenses²
(1,907)
3_For German Speaking Countries, policyholder participation on revaluation of DAC/URR capitalization/amortization.
4_As per notes to the Consolidated Financial Statements.
1_Prior year figures changed in order to reflect the refinement of profit source reporting in the USA.
2_As per Group Management Report.
(1,825)
(1,898)
9
9
Administrative expenses
83
on reinsurance business ceded
(174)
(166)
Scope
164
166
Definitions
(1,823)
Administrative expenses
(79)
Opportunities
By combining close customer understanding and evolving data
analytics techniques, we provide superior insurance products and
raise productivity.
INTEREST RATE RISK
Strategic asset allocation benchmarks and risk limits, including
financial VaR, stand-alone interest rate and equity sensitivity limits,
and foreign exchange exposure limits, are defined for both the Group
and related undertakings. Limits are closely monitored and, if a breach
occurs, countermeasures are implemented which may include escala-
tion to the respective decision-making bodies and/or the closing of
positions. Furthermore, we have put in place standards for hedging
activities, due to the exposure to fair-value options embedded in our
life insurance products. Finally, guidelines are provided by the Group
regarding certain investments, new investment products, and the use
of derivatives. Compliance with these guidelines is controlled by the
respective risk and controlling functions.
To measure these market risks, real-world stochastic models ¹ for
the relevant risk factors are calibrated using historical time series to
generate possible future market developments. After the scenarios for
all the risk factors are generated, the asset and liability positions are
revalued under each scenario. The worst-case outcome of the sorted
portfolio profit and loss distribution at a certain confidence level
(99.5%) defines the market Value at Risk (VaR). For entities modeled
using the standard formula, the market risk is based on aggregating
the losses under specified standard formula shock scenarios.
As the fair values of our investment portfolios and liabilities
depend on the changes observed in the financial markets, we are
exposed to the risk of adverse financial market developments. The
long-dated liabilities in our Life/Health business segment and those
attributable to internal pensions contribute to interest rate risk, in par-
ticular when they cannot be fully matched by available investments
due to long maturities. In addition, we are also exposed to adverse
changes in equity and real estate prices, credit spread levels, inflation,
implied volatilities, and currencies, which might impact the value of our
portfolios.
As an inherent part of our insurance operations, we collect premiums
from our policyholders and invest them in a wide variety of assets; the
resulting investment portfolios back the future claims payments and
benefits to our customers. In addition, we also invest shareholders' cap-
ital, which is required to support the business. Finally, we use deriva-
tives, mostly to hedge our portfolio against adverse market move-
ments (for example, protective puts) or to reduce our reinvestment risk
(for example, by using forwards, swaps, or swaptions). Asset/liability
management (ALM) decisions are taken based on the internal model,
considering both the risks and the returns on the financial market.
MARKET RISK
C_Group Management Report
Annual Report 2020 - Allianz Group
3_The return on risk capital is defined as the present value of future real world profits on the capital requirement (including
buffer to regulatory requirements) held at the local level.
chapters, e.g., in case descriptions also referring to entities that use the internal model, or descriptions focusing on pro-
cesses with respect to the internal model components.
2_From a formalistic perspective, the German Supervisory Authority deems our model to be "partial" because not all of our
entities are using the internal model. Some of our smaller entities report under the standard formula and others under
the deduction and aggregation approach. Without loss of generality, we might use the term internal model in the following
1 Related undertakings are also referred to as operating entities.
As a consequence, the internal model is fully integrated in busi-
ness steering, and its application satisfies the so-called "use test"
requirement, under Solvency II.
Allianz steers its portfolio taking a comprehensive view at risk and
return, which is based on the internal model and is supported by sce-
nario analyses. Risk and concentrations are actively restricted by limits
based on our internal model, and there is a comprehensive analysis of
the return on risk capital³ (RORC). The RORC is a new business indicator
that allows us to identify profitable lines of new business and products
on a sustainable basis, reflecting the capital commitment over the life
time of the products, and is a key criterion for capital allocation deci-
sions.
In addition, central elements of Allianz's dividend policy are linked
to Solvency II capitalization based on the internal model. This helps us
to ensure a consistent view on risk steering and capitalization in line
with the Solvency II framework.
Allianz is a liability-driven investor. We may suffer an economic loss in
the event of falling interest rates as we reinvest maturing assets at
lower rates prior to the maturity of liability contracts, if the duration of
our assets is shorter than our liabilities. This risk is higher for long-dated
life investment and savings products as well as for internal pensions,
with a significant part of the Life/Health business segment's interest
rate risk coming from Western Europe, mainly from traditional life in-
surance products with guarantees. Conversely, opportunities may arise
when interest rates increase, as this may result in returns from reinvest-
ments being higher than the guaranteed rates. Interest rate risk is man-
aged within our asset/liability management process and controlled via
interest rate sensitivity and duration mismatch limits for the Group and
the local entities.
INFLATION RISK
As an insurance company, we are exposed to changing inflation rates,
predominantly due to our Non-Life insurance obligations but also due
to inflation-indexed internal pension obligations. While inflation
assumptions are taken into account in our product development and
pricing, unexpected rising rate of inflation will increase both future
claims and expenses, leading to higher liabilities; conversely, if future
inflation rates were to be lower than assumed, liabilities would be
lower than anticipated. The risk of changing inflation rates is incorpo-
rated in our internal model.
Credit risk is measured as the potential economic loss in the value of
our portfolio that would result from either changes in the credit quality
of our counterparties ("migration risk") or the inability or unwillingness
of a counterparty to fulfill contractual obligations ("default risk").
CREDIT RISK
estate loan investments. These standards outline diversification tar-
gets, minimum-return thresholds, and other qualitative and quantita-
tive requirements. All transactions that do not meet these standards or
have a total investment volume (including costs) exceeding a
defined threshold must be reviewed individually by Group Risk and
other Group center functions. In addition, all applicable limits must be
respected, in particular those resulting from strategic asset allocation
as well as its leeways and risk limits, with regards to an investing entity's
portfolio.
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87
Annual Report 2020 - Allianz Group
1_Internal pensions are evaluated and modeled based on deterministic models, following IAS 19 principles.
With Solvency II being the regulatory regime relevant for the
Group as of 1 January 2016, our risk profile is measured and steered
based on our approved Solvency II internal model². We have intro-
duced a target solvency ratio range in accordance with Solvency II,
based on pre-defined stress scenarios for both the Group and related
undertakings, supplemented by ad-hoc scenarios, historical and
reverse stress tests, and sensitivity analyses.
Allianz's Group Investment Committee has defined a framework
for standard transactions for real estate equity and commercial real
REAL ESTATE RISK
Our operating entities typically invest in assets which are denominated
in the same currency as their liabilities. However, some foreign currency
exposures are allowed to support portfolio diversification and tactical
investment decisions. Our largest exposure to foreign currency risk
comes from our ownership of non-Euro entities: Whenever the Euro
strengthens, the Euro equivalent net asset value of our foreign sub-
sidiaries will decline from a Group perspective; however, at the same
time the capital requirements in Euro will decrease, partially mitigating
the total impact on Group capitalization. Based on our foreign
exchange management limit framework, currency risk is monitored
and managed at both the local and Group level.
CURRENCY RISK
Fixed-income assets such as bonds may lose value if credit spreads
widen. However, our risk appetite for credit spread risk takes into
account the underlying economics of our business model: As a liability-
driven investor, we typically hold fixed-income assets until maturity.
This implies that we are less affected economically by short-term
changes in market prices. In our capacity as a long-term investor, this
gives us the opportunity to invest in bonds yielding spreads over the
risk-free return and earning this additional yield component.
CREDIT SPREAD RISK
The Group's insurance-focused operating entities may hold equity
investments to diversify their portfolios and take advantage of ex-
pected long-term returns. Strategic asset allocation benchmarks, in-
vestment and equity sensitivity limits are used to monitor and manage
these exposures. In addition, equity investments fall within the scope of
the credit risk platform to avoid single-name risk concentrations. Risks
from changes in equity prices are normally associated with decreasing
share prices and increasing equity price volatilities. As stock markets
might also increase, opportunities may arise from equity investments
in those events.
EQUITY RISK
Despite the risk of decreasing real estate values, real estate is a suita-
ble addition to our investment portfolio due to good diversification
benefits as well as to the contribution of relatively predictable, long-
term cash flows.
Our financial strength, coupled with ongoing transformation, renders
us resilient and allows us to profit from new opportunities in a fast-
changing business environment as well, for example:
As an integrated financial services provider, we consider diversifi-
cation across different business segments and regions to be an
important element in managing our risks efficiently, as it limits the eco-
nomic impact of any single event and contributes to relatively stable
results. Our aim is to maintain a balanced risk profile without any
disproportionately large risk concentrations and accumulations.
Risk-based steering and risk management
A comprehensive system of risk governance is achieved by setting
standards related to organizational structure, risk strategy and appe-
tite, limit systems, documentation, and reporting. These standards
ensure the accurate and timely flow of risk-related information and a
disciplined approach towards decision-making and execution at both
the global and local levels.
Overall risk organization and roles in risk management
The Group Finance and Risk Committee (GFRC) provides oversight of
the Group's and Allianz SE's risk management framework, acting as a
primary early-warning function by monitoring the Allianz Group's and
Allianz SE's risk profiles as well as the availability of capital. The GFRC
also ensures that an adequate relationship between return and risk is
maintained. Additionally, the GFRC defines risk standards, is the limit-
setting authority within the framework set by the Board of Manage-
ment, and approves major financing and capital management trans-
actions. Finally, the GFRC supports the Board of Management with
recommendations regarding the capital structure, capital allocation,
liquidity position, and investment strategy, including strategic asset
allocation for the different business segments.
Group Finance and Risk Committee
For more information, please refer to the paragraph "Risk Com-
mittee" in the Supervisory Board Report.
The Risk Committee reports to the Supervisory Board, where the infor-
mation and the findings are discussed with the Board of Management.
It monitors the effectiveness of the Allianz risk management frame-
work. Furthermore, it focuses on risk-related developments as well as
general risks and specific risk exposures and ensures that the business
strategy is aligned with the risk strategy.
Supervisory Board Risk Committee
Within our risk governance system, the Supervisory Board and
Board of Management of Allianz SE have both Allianz SE and group-
wide responsibilities. The Board of Management formulates business
objectives and a corresponding risk strategy; the core elements of the
risk framework are set out in the Allianz Group Risk Policy and
approved by the Board of Management. The Supervisory Board
advises, challenges, and supervises the Board of Management in the
execution of its management activities. The following committees sup-
port the Board and the Supervisory Board on risk issues:
Allianz Group's approach to risk governance permits integrated man-
agement of local and global risks and ensures that our risk profile
remains consistent with both our risk strategy and our capacity to bear
risks.
SUPERVISORY BOARD AND BOARD OF
MANAGEMENT
RISK GOVERNANCE STRUCTURE
In a continuously evolving market where the demands of customers
constantly change, our knowledge of the industry and our expertise in
product development and risk management offers us great
opportunities to create customer-focused solutions. For further details
on opportunities envisaged by the Allianz Group in the various seg-
ments, please refer to Outlook 2021.
As the world's population ages, we are improving our offerings in
the retirement savings markets.
We are building expertise and business models to benefit from
new risk pools, including cyber risk (insurance, risk mitigation, and
recovery services) and mobility fleets.
As a diversified financial group that is active in over 70 countries,
we can innovate locally, then spread ideas and best practices
across the Group in order to exploit economies of scale.
We seek to grow in fast-growing regions, including Asia-Pacific,
and want to profit from consolidation in developed markets such
as Europe.
As a general principle, the responsibility for the First Line of
Defense rests with business managers in the related undertaking. They
are responsible for both the risks taken and the returns from their
decisions. The Second Line of Defense is made up of independent
global oversight functions including Risk, Actuarial, Compliance, and
Legal, which support the Board in defining the risk frameworks within
which the business can operate. Group Audit forms the Third Line of
Defense, independently and regularly reviewing risk governance
implementation, compliance with risk principles, performing quality
Annual Report 2020 - Allianz Group
85
90
Group Actuarial, Planning and Controlling contributes towards
assessing and managing risks in line with regulatory requirements, in
particular for those risks whose management requires actuarial exper-
tise. The range of tasks includes, amongst others, the calculation and
monitoring of technical provisions, technical actuarial assistance in
business planning, reporting and monitoring of the results, and sup-
porting the effective implementation of the risk management system.
are to ensure that laws and regulations are observed, to react appro-
priately to all impending legislative changes or new court rulings, to
attend to legal disputes and litigation, and to provide legally appro-
priate solutions for transactions and business processes. In addition,
Group Compliance - in conjunction with Group Legal and other
experts involved - is responsible for integrity management, which
aims to protect the Allianz Group as well as our related undertakings
and employees from regulatory risks.
Group Legal and Group Compliance seek to mitigate legal risks
with support from other departments. The objectives of both functions
In addition to Group Risk and the local risk functions, legal, compli-
ance, and actuarial functions established at both the Group and the
entity levels constitute additional components of the Second Line of
Defense.
Other functions and bodies
Consistent implementation of the Group's risk management
framework in the related undertakings, including regular dialog
between the Group and the entity, is ensured, for example, through
Group Risk representation on local Risk Committees and through reg-
ular assessment of the appropriateness of the local risk management
framework and performance of the Chief Risk Officers by Group Risk.
Moreover, the Group Chief Risk Officer must be consulted on decisions
regarding the staffing, objectives, and performance evaluation of lo-
cal Chief Risk Officers.
A risk function, headed by a Chief Risk Officer which is independ-
ent from business line management, is established by each related
undertaking. A local Risk Committee supports both the Board of Man-
agement and the Chief Risk Officer by acting as the primary risk con-
trolling body.
The Allianz Group is exposed to a variety of risks through its core insur-
ance and asset management activities, including market, credit,
underwriting, business, operational, strategic, liquidity, and reputa-
tional risks.
Related undertakings ¹ are responsible for their own risk management,
including adherence to both external requirements (for example,
those imposed by local regulators) and internal standards. Their
Boards of Management are responsible for setting and approving a
local risk strategy - supporting the Group's risk strategy - during the
annual Strategic and Planning Dialogs with the Group and for ensuring
adherence to their risk strategy.
Group Risk strengthens and maintains the Group's risk network
through regular and close interaction with the management of related
undertakings and with other key stakeholders such as the local
finance, risk, actuarial, underwriting and investment departments. A
strong group-wide risk network enables the Allianz Group to influence
risk culture across the Group, identify risks at an early stage, and make
management aware of these risks.
Group Risk also supports the Board of Management in develop-
ing the risk management framework - which covers risk governance,
risk strategy and appetite - and risk monitoring and reporting. Group
Risk's operational responsibility encompasses assessing risks and
monitoring limits and accumulations of specific risks across business
lines, including natural and man-made disasters and exposures to
financial markets and counterparties.
Group Risk is managed by the Group Chief Risk Officer and supports
Allianz SE's Board of Management, including its committees, by
performing various analyses, communicating risk management
related information and preparing and implementing committee
decisions.
Group Risk management function
reviews of risk processes, and testing adherence to business standards,
including the internal control framework.
C_Group Management Report
86
Related undertakings
The Group's credit risk profile originates from three sources: our invest-
ment portfolio, our credit insurance business, and our external reinsur-
Definition: URR amortized
1_Prior year figures changed in order to reflect the refinement of profit source reporting in the USA.
2_As per Group Management Report.
Interest expenses, excluding interest expenses from
576
561
Fee and commission income
3
2
value through income (net)¹
Income from financial assets and liabilities carried at fair
73
63
Interest and similar income
consisting of:
239
245
thereof: Total revenues (Banking)
external debt
(22)
(21)
Fee and commission expenses
Life/Health insurance operations
C_Group Management Report
Annual Report 2020 - Allianz Group
22
82
1 Includes trading income.
142,369
CORPORATE AND OTHER
140,455
(616)
(593)
CONSOLIDATION
1
Consolidation effects within Corporate and Other
(394)
(359)
Allianz Group total revenues
OPERATING PROFIT
1
Other income
0.7
5.9
Allianz Group
1,946
1,640
Fee and commission income
(12.9)
(11.1)
(2.0)
Corporate and Other
57,210
57,772
Gross premiums written
6.4
4.3
1.0
7.6
LIFE/HEALTH
Statutory premiums
1
3
Income from financial assets and liabilities carried at fair
value through income (net)
(10)
(15)
Net interest and similar income
7,171
2
7,358
7,164
7,347
consisting of:
Operating revenues
ASSET MANAGEMENT
76,426
74,044
Net fee and commission income
3_As per notes to the Consolidated Financial Statements.
The reconciling item scope comprises the effects from out-of-scope
entities in the profit sources reporting compilation. Operating profit
from operating entities that are out of scope is included in the invest-
ment margin. Currently, 23 entities - comprising the vast majority of
Life/Health total statutory premiums - are in scope.
Expenses include acquisition expenses and commissions as well as ad-
ministrative and other expenses.
625
642
Definition: URR capitalized
(276)
(302)
Scope
1,813
1,745
941
691
Definitions
(5,818)
(5,575)
Capitalization of DAC²
Acquisition costs incurred
Definition: policyholder participation³
1,078
1,210
Commissions and profit received on reinsurance business ceded
Administrative expenses on reinsurance business ceded
(1,570)
(1,951)
Amortization, unlocking, and true-up of DAC²
3,772
3,494
Capitalization of DAC
(6,449)
(7,218)
(7,042)
124
30
Scope
9
9
95
131
Acquisition and administrative expenses (net)³
EXPENSES
(7,571)
(194)
(5,458)
Acquisition expenses and commissions²
€ mn
2019
2020
€ mn
Reconciliation to Notes to the Consolidated Financial Statements¹
Policyholder participation is included in "Change in our
reserves for insurance and investment contracts (net)" in the Group in-
come statement.
Both capitalization and amortization are included in the line item
premiums earned (net) in the Group income statement.
URR amortized: total amount of URR amortized includes sched-
uled URR amortization, true-up, and unlocking.
URR capitalized: capitalization amount of unearned revenue re-
serves (URR) and deferred profit liabilities (DPL) for FAS 97 LP.
IN DEFERRED ACQUISITION COSTS (DAC)
"Impact of change in DAC" includes the effects of changes in DAC, un-
earned revenue reserves (URR), and value of business acquired
(VOBA). As such, it is the net impact of the deferral and amortization
of acquisition costs and front-end loadings on operating profit.
IMPACT OF CHANGE
Acquisition, administrative, capitalization, and amortization of DAC¹
The delta shown as definitions in acquisition expenses and com-
missions represents commission clawbacks, which are allocated to the
technical margin. The delta shown as definitions in administrative and
other expenses mainly represents restructuring charges, which are
stated in a separate line item in the Group income statement.
(5,638)
2020
2019
Administrative and other expenses²
(129)
(1,570)
(1,951)
Amortization, unlocking, and true-up of DAC²
13
12
1,813
Acquisition and administrative expenses
1,745
(5,638)
(5,458)
Scope
Definitions
Acquisition expenses and commissions²
(1,823)
(1,907)
Capitalization of DAC²
ance.
Investment portfolio: Credit risk results from our investments in
fixed-income bonds, loans, derivatives, cash positions, and receiv-
ables whose value may decrease depending on the credit quality
of the obligor. However, losses due to credit events can be shared
with the policyholder for certain life insurance products.
Credit insurance: Credit risk arises from potential claim payments
on limits granted by Euler Hermes to its policyholders. Euler
Hermes insures its policyholders against credit risk associated with
short-term trade credits advanced to policyholder's clients. When
the client of the policyholder is unable to meet its payment obliga-
tions, Euler Hermes indemnifies the loss to the policyholder.
Reinsurance: Credit risk arises from potential losses from non-
recoverability of reinsurance receivables or due to default on ben-
efits under in-force reinsurance treaties. Our reinsurance partners
are carefully selected by a dedicated team. Besides focusing on
companies with strong credit profiles, we may also require letters
of credit, cash deposits, or other financial measures to further
mitigate our exposure to credit risk.
The internal credit risk capital model takes into account the major
determinants of credit risk for each instrument, including exposure at
default, rating, seniority, collateral, and maturity. Additional parame-
ters assigned to obligors are migration probabilities and obligor asset
correlations reflecting dependencies within the portfolio. Ratings are
assigned to single obligors using a clearly defined assignment process.
Central components of this assignment process are long-term ratings
from external rating agencies, and internal rating models in case of
specific internal investment strategies. If available, a dynamic adjust-
ment using market-implied ratings and the most recent qualitative
information available is applied.
1_For further information on Allianz SE debt (issued or guaranteed) as of 31 December 2020, please refer to note 19 to
the Consolidated Financial Statements.
2_Based on nominal value.
3_Accrued interest (not part of the consolidated income statement).
The following table details the long-term debt issuances and
redemptions/buy-backs of Allianz SE during 2020 and 2019:
Issuances and redemptions of Allianz SE's senior and subordinated
bonds
€ mn
€ mn
As of 31 December
Up to 1 year
Contractual maturity date
1-5 years Over 5 years
As of 31 December
Issuances¹
Redemptions/
buy-backs¹
Issuance net of
redemptions/
buy-backs
Total
3.6
4.5
795
595
For further information on our share capital and regarding authoriza-
tions to issue and repurchase shares, please refer to the chapter
Takeover-Related Statements and Explanations (part of the Group
Management Report).
LONG-TERM DEBT FUNDING
As of 31 December 2020, Allianz SE had senior and subordinated
bonds with a variety of maturities outstanding, reflecting our focus on
long-term financing. As the cost and availability of external funding
may be negatively affected by general market conditions or by
matters specific to the financial services industry or the Allianz Group,
we seek to reduce refinancing risk by actively steering the maturity
profile of our funding structure.
Maturity structure of Allianz SE's senior and subordinated bonds¹
2019
Senior bonds
8,135
2020
8,085
2.2
Subordinated bonds
(debt)
13,157
13,177
Total bonds (debt)
21,293
21,262
200
3.0
2020
1,250
1,500
(equity)
Total bonds (equity)
2,2727
2,272
2,272
2,272
Subordinated bonds (debt)
1 Based on nominal value.
1,000
1,364
(364)
2019
Senior bonds
1,252
2,243
4,590
8,085
1,500
Senior bonds
Subordinated bonds
2019
Senior bonds
2,7453
5,2914
8,036
Subordinated bonds (debt)
1,000
Subordinated bonds
Senior bonds
Subordinated bonds (equity)
1,000
2,272
(debt)
Total bonds (debt)
2,745
13,9745,6
19,265
13,974
22,010
2,272
Subordinated bonds
(debt)
8
2,272
As of 31 December 2020, the issued share capital as registered at the
Commercial Register was € 1,169,920,000. This was divided into
412,293,128 no-par value shares. As of 31 December 2020, the
Allianz Group held 247,489 (2019: 595,677) own shares.
Allianz SE has the option to increase its share capital according to
authorizations provided by the AGM. The following table outlines
Allianz SE's capital authorizations as of 31 December 2020:
Annual Report 2020 - Allianz Group
79
C_Group Management Report
Capital authorizations of Allianz SE
Senior and subordinated bonds issued or guaranteed by Allianz SE¹
Capital authorization
Authorized Capital
2018/1¹
Authorized Capital
2018/11²
Conditional Capital
2010/2018³
Nominal amount
SHARE CAPITAL
Allianz SE's access to external funds depends on various factors such
as capital market conditions, access to credit facilities, credit ratings,
and credit capacity. The financial resources available to Allianz SE in
the capital markets for short-, mid- and long-term funding needs are
described below. In general, mid- to long-term financing is covered by
issuing senior or subordinated bonds or ordinary no-par value shares.
FUNDING SOURCES
Allianz SE ensures adequate access to liquidity and capital for our
operating subsidiaries. The main sources of liquidity available for
Allianz SE are dividends received from subsidiaries and funding pro-
vided by capital markets. Liquidity resources are defined as readily
available assets - specifically cash, money market investments, and
highly liquid government bonds. Our funds are primarily used for
interest payments on our debt funding, operating costs, internal and
external growth investments, and dividends to our shareholders.
C_Group Management Report
LIQUIDITY AND FUNDING RESOURCES
Organization
The Allianz Group's liquidity management is based on policies and
guidelines approved by the Allianz SE Board of Management.
Allianz SE and each of the operating entities are responsible for
managing their respective liquidity positions, while Allianz SE provides
ASSET MANAGEMENT OPERATIONS
Within our Asset Management operations, the most important sources
of liquidity are fees generated from asset management activities.
These are primarily used to cover operating expenses.
central cash pooling for the Group. Capital allocation is managed by Liquidity management and funding of Allianz SE
Expiry date of
the authorization
Allianz SE for the entire Group. This structure allows the efficient use of
liquidity and capital resources and enables Allianz SE to achieve the
desired liquidity and capitalization levels for the Group and its operat-
ing entities.
INSURANCE OPERATIONS
Major sources of liquidity for our operational activities are
primary and reinsurance premiums received, reinsurance receivables
collected, investment income, and proceeds generated from the
maturity or sale of investments. These funds are mainly used to pay
claims arising from the Property-Casualty insurance business and
related expenses, life policy benefits, surrenders and cancellations,
acquisition costs, and operating costs.
We receive a large part of premiums before payments of claims
or policy benefits are required, generating solid cash flows from our
insurance operations. This allows us to invest the funds in the interim to
create investment income.
Our insurance operations also carry a high proportion of liquid
investments, which can be converted into cash to pay for claims.
Generally, our investments in fixed-income securities are sequenced to
mature when funds are expected to be needed.
The overall liquidity of our insurance operations depends on cap-
ital market developments, interest rate levels, and our ability to realize
the market value of our investment portfolio to meet insurance claims
and policyholder benefits. Other factors affecting the liquidity of our
Property-Casualty insurance operations include the timing, frequency,
and severity of losses underlying our policies and policy renewal rates.
In our Life operations, liquidity needs are generally influenced by
trends in actual mortality rates compared to the assumptions underly-
ing our life insurance reserves. Market returns, crediting rates, and the
behavior of our life insurance clients - for example, regarding the level
of surrenders and withdrawals - can also have significant impacts.
The responsibility for managing the funding needs within the Group,
maximizing access to liquidity sources and minimizing borrowing costs,
lies with Allianz SE. We therefore comment on the liquidity and funding
resources of Allianz SE in the following sections. Restrictions on the
transferability of capital within the Group mainly result from the capital
maintenance rules under applicable company laws, as well as from
the regulatory solvency capital requirements for regulated Group
companies.
LIQUIDITY RESOURCES AND USES
Liquidity management of our operating entities.
2,272
Weighted-
€ 334,960,000
13,929
13,974
565
4.2
Total bonds (debt)
Subordinated bonds
22,017
22,010
723
3.3
(equity)
2,272
2,272
83
3.0
Total bonds (equity)
Subordinated bonds
(debt)
3 To cover convertible bonds, bonds with warrants, convertible participation rights, participation rights, and
subordinated financial instruments, each with the authorization to exclude shareholders' subscription rights.
2_For issuance of shares to employees with exclusion of shareholders' subscription rights.
1_For issuance of shares against contribution in cash and/or in kind, with the authorization to exclude shareholders'
subscription rights.
8 May 2023
Nominal value
€ mn
Carrying value
€ mn
Interest
expenses
€ mn
average
interest rate²
%
€ 15,000,000
As of 31 December
8 May 2023
Senior bonds
8,088
8,036
158
1.8
€ 250,000,000
8 May 2023
2020
13,177
Total bonds (debt)
1,252
0.2
(0.7)
(3.1)
Asset Management
3.6
0.6
(1.6)
2.6
Composition of total revenues
Corporate and Other
2.5
2.5
€ mn
Allianz Group
(1.8)
(2.6)
Life/Health
0.4
(1.8)
The analysis in the previous chapters is based on our Consolidated
Financial Statements and should be read in conjunction with them. In
addition to our figures stated in accordance with the International
Financial Reporting Standards (IFRS), the Allianz Group uses operat-
ing profit and internal growth to enhance the understanding of our
results. These additional measures should be viewed as complemen-
tary to, rather than a substitute for, our figures determined according
to IFRS.
For further information, please refer to note 5 to the Consolidated
Financial Statements.
Composition of total revenue growth
We believe that an understanding of our total revenue performance is
enhanced when the effects of foreign currency translation as well as
acquisitions, disposals, and transfers (or "changes in scope of consoli-
dation") are analyzed separately. Accordingly, in addition to present-
ing nominal total revenue growth, we also present internal growth,
which excludes these effects.
Reconciliation of nominal total revenue growth
to internal total revenue growth
%
Composition of total revenues
1.6
Total revenues comprise total revenues in Property-Casualty, statutory
premiums in Life/Health, operating revenues in Asset Management,
and total revenues in Corporate and Other (Banking).
Internal
growth
Changes in
scope of
consolidation
Foreign
currency
translation
Nominal
growth
Property-Casualty
(1.5)
3.7
2020
RECONCILIATIONS
(1.2)
2020
2_Property-Casualty is also referred to as Non-Life.
1 Credit Risk Platform
Premium risk is estimated based on actuarial models that are
used to derive loss distributions. Non-catastrophe risks are modeled
using frequency and severity models for large losses and aggregate
loss distribution models for attritional losses. Natural disasters such as
earthquakes, storms, and floods represent a significant challenge for
risk management due to their high accumulation potential for higher
return periods. For natural catastrophe risks, we use special modeling
Premium risk is subdivided into three categories: natural catastro-
phe risk, terror risk, and non-catastrophe risk including man-made
catastrophes.
As part of our Property-Casualty business operations, we receive pre-
miums from our customers and provide insurance protection in return.
Premium risk is the risk that actual claims for the business in the current
year develop adversely relative to expected claims ratios. Premium risk
can be mitigated by reinsurance as well as by technical excellence in
underwriting. Assessing risks as part of the underwriting process is
therefore a key element of our risk management framework. There are
clear underwriting limits and restrictions which are defined centrally
and applied across the Group.
Premium risk
Our Property-Casualty insurance businesses are exposed to premium-
risk-related adverse developments in the current year's new and
renewed business as well as to reserve risks related to the business in
force.
PROPERTY-CASUALTY
Underwriting risk consists of premium and reserve risks in the Property-
Casualty business segment as well as biometric risks in the
Life/Health3 business segment. Underwriting risks are not relevant for
the Asset Management business segment and our banking opera-
tions.
UNDERWRITING RISK
Clearly defined processes ensure that exposure concentrations
and limit utilizations are appropriately monitored and managed. The
setting of country and obligor exposure limits from the Group's per-
spective (i.e., the maximum concentration limit) takes into account the
Allianz Group's portfolio size and structure as well as our overall risk
strategy.
Our group-wide country and obligor group limit management
framework (CRISP¹) allows us to manage counterparty concentration
risk, covering both credit and equity exposures at the Group and oper-
ating-entity levels. This limit framework forms the basis for discussions
on credit actions and provides notification services featuring the quick
and broad communication of credit-related decisions across the
Group.
To ensure effective credit risk management, credit VaR limits are
derived from our internal risk capital framework, and rating bucket
benchmarks are used to define our risk appetite for exposures in the
lower investment-grade and non-investment-grade area.
Our credit insurance portfolio is modeled by Euler Hermes, based
on a proprietary model component which is a local adaptation of the
central internal credit risk model. Euler Hermes' loss profile is inte-
grated in the Group's internal credit risk model to capture the concen-
tration and diversification effects.
The loss profile of a given portfolio is obtained using a Monte
Carlo simulation, taking into account interdependencies and exposure
concentrations per obligor segment. The loss profiles are calculated at
different levels of the Allianz Group, and then fed into the internal
model at each level for further aggregation across sources of risk to
derive diversified credit risk.
88
88
3_Life/Health is also referred to as Life.
Annual Report 2020 - Allianz Group
2019
PROPERTY-CASUALTY
Total revenues
Property-Casualty
4.7
1.7
0.4
(1.3)
6.8
59,156
Life/Health
7.3
1.2
8.5
consisting of:
Asset Management
59,412
0.3
C_Group Management Report
Annual Report 2020 - Allianz Group
2020
€ mn
Senior and subordinated bonds (debt and
equity)
2020
2019
Delta
19,896
4,393
24,289
Net cash flow provided by operating
activities
32,049
36,448
(4,399)
2019
Senior and subordinated bonds (debt)
1_Based on nominal value.
Annual changes in cash and cash equivalents
Total
Euro
As of 31 December
2,243
17,767
13,177
21,262
1_Based on carrying value.
2_Senior bonds of € 0.5 bn and € 0.75 bn were redeemed in the first and fourth quarter of 2020.
3_A senior bond of € 0.5 bn was issued in the first quarter of 2020.
4_A senior bond of € 0.75 bn was issued in the first quarter of 2020.
5_Includes two subordinated bonds which Allianz resolved to call for redemption in March 2021.
6_Includes the issuance of a € 1.0 bn subordinated bond in the second quarter of 2020.
17,646
7_Includes the issuance of a dual tranche RT1 bond (€ 1.25 bn and USD 1.25 bn) in the fourth quarter of 2020.
Interest expenses on senior bonds decreased, mainly due to lower
funding costs on average in 2020. For subordinated bonds, the
decrease of interest expenses was also driven by lower funding costs
on average in 2020, partially offset by higher volumes outstanding.
80
80
Annual Report 2020 - Allianz Group
Currency allocation of Allianz SE's senior and subordinated bonds¹
€ mn
C_Group Management Report
Allianz Group consolidated cash flows
Funding in non-Euro currencies enables us to diversify our investor
base or to take advantage of favorable funding costs in those markets.
Funds raised in non-Euro currencies are incorporated in our general
hedging strategy. As of 31 December 2020, approximately 18.1%
(2019: 17.1%) of the long-term debt was issued or guaranteed by
Allianz SE in currencies other than the Euro.
81
3,647
Net cash flow used in investing activities
Net cash flow used in financing activities
Change in cash and cash equivalents¹
Money market securities
1,170
5
0.5
2019
Money market securities
1,124
2020
17
The Group maintained its A-1+/Prime-1 ratings for short-term
issuances. We can therefore continue funding our liquidity under the
Euro Commercial Paper Program at an average rate for each tranche
below Euribor, and under the U.S. Dollar Commercial Paper Program
at an average rate for each tranche below U.S. Libor.
Further potential sources of short-term funding that allow the
Allianz Group to fine-tune its capital structure are letter of credit facili-
ties and bank credit lines.
Net cash flow provided by operating activities amounted to € 32.0 bn
in 2020, down by € 4.4 bn compared to the previous year. This figure
comprises net income plus adjustments for non-cash charges, credits,
and other items included in net earnings, as well as cash flows related
to the net change in operating assets and liabilities. Net income after
adding back non-cash charges and similar items decreased to
€ 11.0 bn in 2020. Additionally, operating cash flows from net changes
in operating assets and liabilities decreased by € 3.4 bn to € 21.0 bn.
This was mainly driven by lower reserves for insurance and investment
contracts in our Life/Health business segment in Germany, the United
States and France. Part of the effect was offset by higher net cash
inflows from assets and liabilities held for trading.
Net cash outflow used in investing activities increased by € 1.2 bn
to € 28.9 bn. The main driver were higher net cash outflows from loans
and advances to banks and customers, mainly at our Life/Health busi-
ness in Germany, Allianz SE and the United States. This was partly com-
pensated by lower net cash outflows from financial assets and liabili-
ties designated at fair value through income, especially in our
Life/Health business in Germany and in our Property-Casualty rein-
surance business.
Net cash outflow used in financing activities amounted to
€ 1.4 bn, compared to € 4.9 bn in 2019. This development was largely
driven by higher net cash inflows from our refinancing activities -
including the issuance of a dual tranche RT1 bond and lower net cash
outflows from transactions between equity holders, in particular from
the Allianz SE share buy-back program.
Cash and cash equivalents increased by € 1.4 bn. This figure
includes € 0.3 bn cash and cash equivalents reclassified to assets of
disposal groups held for sale which were disposed of in 2020.
For further information on the above, please refer to our Consoli-
dated Statement of Cash Flows.
1.5
21,293
As of 31 December
Interest
expense
€ mn
(28,870)
(27,703)
(1,167)
(1,390)
(4,850)
3,460
Average
interest rate
%
1,031
(2,955)
1_Includes effects of exchange rate changes on cash and cash equivalents of € (758) mn and € 90 mn in 2020 and 2019,
respectively.
SHORT-TERM DEBT FUNDING
Available short-term funding sources are the Medium-Term Note
Program and the Commercial Paper Program. Money market securi-
ties increased in the use of commercial paper, compared to the previ-
ous year-end. Interest expenses on money market securities decreased
mainly due to lower funding costs on average in 2020.
Money market securities of Allianz SE
Carrying value
€ mn
3,986
1.8
Allianz (1
ALLIANZ GROUP
8
As in previous years, the Supervisory Board comprehensively fulfilled
its duties and obligations as laid out in the company's statutes and
applicable law in the financial year 2023. It monitored the activities of
the company's Board of Management, addressed the succession
planning for the Board of Management and the Supervisory Board,
and advised the Board of Management on business management
issues.
Overview
In the financial year 2023, the Supervisory Board held six meetings and
adopted one written resolution. The meetings took place in February,
March, May, June, September, and December. The written resolution
was adopted in October. All meetings were held as in-person
meetings.
At all meetings held in the financial year under review, the Board of
Management informed the Supervisory Board about the
development of business at Allianz SE and the Allianz Group. In
particular, the Board of Management presented the development of
Group revenues and results as well as business developments in the
individual business segments. The Board of Management provided
comprehensive information about the development of Allianz SE and
the Allianz Group, including the planning as well as deviations of
actual business developments from the planning. In this context, the
Board of Management also regularly discussed the adequacy of
capitalization, the solvency ratio of Allianz SE and the Group, and the
corresponding stress and risk scenarios with the Supervisory Board.
The annual and consolidated financial statements, including the
respective auditor's reports, the half-year report as well as quarterly
earnings releases were reviewed in detail by the Supervisory Board
after preparation by the Audit Committee.
In the first half of 2023 in particular, the meetings again focused on the
review of the Structured Alpha matter in close dialogue with the Board
of Management, assisted by the law firm mandated by the
Supervisory Board. The reports and deliberations also focused on the
impact of rising inflation rates and interest rates on the overall
economy and the insurance sector as well as a range of strategic
topics, including the risk strategy and IT strategy, and the Board of
Management's planning for the financial year 2024. The status of the
digital implementation of the Allianz Customer Model by means of the
Allianz Business Master Platform and the merger of the global
MidCorp business with the business of Allianz Global Corporate &
Specialty SE under the trading name Allianz Commercial was reported
on at several meetings. Another regular item discussed was cyber risk
security. The Supervisory Board also dealt extensively with personnel
matters relating to the Board of Management as well as succession
planning for the Board of Management and the Supervisory Board.
The deliberations of the Supervisory Board and in particular the
Personnel Committee and Sustainability Committee also included
establishing target achievement and setting targets for the
remuneration of the Board of Management.
Ladies and Gentlemen,
The Supervisory Board received regular, timely and comprehensive
reports from the Board of Management. The Board of Management's
oral reports at the meetings were prepared with written documents,
sent to each member of the Supervisory Board in good time before the
relevant meeting. The Board of Management also informed the
Supervisory Board in writing about important events, including
between meetings. The Chairmen of the Supervisory Board and the
Board of Management held regular discussions about key
developments and decisions. The Chairman of the Supervisory Board
held separate talks with each member of the Board of Management
on each individual's status of target achievement, both for the
respective half year and the full year.
Issues discussed in the Supervisory Board plenary
sessions
At the meeting on 16 February 2023, the Supervisory Board dealt
extensively with the preliminary business figures for the financial year
2022 and the Board of Management's dividend proposal. The
appointed audit firm, PricewaterhouseCoopers GmbH
Wirtschaftsprüfungsgesellschaft (PwC), Frankfurt am Main, reported
in detail on the preliminary results of its audit. In the further course of
the meeting, the Supervisory Board also discussed the status of the
measures taken to implement results from the audit carried out by the
Federal Financial Supervisory Authority (BaFin) regarding the Group
steering processes and the System of Governance. Comprehensive
discussions were also held on the status of implementation of the
actions adopted by the Board of Management following the
Structured Alpha matter. The Supervisory Board also obtained a
detailed report on the status of the investigations carried out by the
external lawyers into the question of potential misconduct at the level
of subsidiaries in connection with the Structured Alpha matter. The
Board of Management also reported on PIMCO's Asset Management
business, focusing in particular on governance topics. The Supervisory
Board also discussed the target achievement of the individual
members of the Board of Management and, on that basis, set their
variable remuneration for the financial year 2022, subject to the
approval of the annual financial statements. In this context, the
Supervisory Board decided to make use of its discretion to take
unforeseeable extraordinary developments into account in
determining target achievement and to use the net income
attributable to shareholders, adjusted for the effects of Allianz's
divestment in Russia, as the basis for target achievement. Against the
backdrop of the Structured Alpha matter, the Supervisory Board once
more also discussed the question of the applicability of the so-called
compliance caveat in paying variable remuneration components to
members of the Board of Management. The independent
investigations of potential breaches of duty by members of the Board
of Management had already concluded in December 2022 that there
were no indications of misconduct by any members of the Board of
Management of Allianz SE. Hence there was no reason to apply the
compliance caveat. As part of the performance assessment, the
Supervisory Board carried out a fit and proper assessment of the
4
Annual Report 2023 - Allianz Group
A_To our Investors
members of the Board of Management. The Supervisory Board also
dealt with succession planning for the Supervisory Board. At the end of
the meeting, the Supervisory Board held an executive session without
the Board of Management members being present and discussed
questions relating to succession planning for the Board of
Management as well as the talks of the Supervisory Board Chairman
with investors and proxy advisors.
Once again in 2023, individual and group training sessions were
implemented on the basis of a development plan adopted for the
further training of the members of the Supervisory Board, for example
on the topics of cybersecurity, the sales strategy, and the auditing of
financial statements.
At the meeting on 2 March 2023, the Board of Management first
reported on the business developments to that date in the financial
year 2023. The Board of Management also presented its report on the
development of risks and solvency in the financial year 2022 and the
outlook for 2023. The annual reports from Internal Audit and
Compliance were also presented and discussed at the meeting. The
Supervisory Board then discussed the audited annual and
consolidated financial statements and the Management and Group
Management Report, including the Non-Financial Statement and the
Remuneration Report, the solvency statements for Allianz SE and the
Allianz Group, as well as the Board of Management's
recommendation for the appropriation of earnings. The auditor
confirmed that there had been no discrepancies since their February
report and issued an unqualified auditor's report for the individual and
consolidated financial statements and for the solvency statements.
The auditor did not have any reservations, either, regarding the audit
of the Non-Financial Statement and the Remuneration Report, which
partly went beyond legal requirements. The Supervisory Board then
approved the audited annual and consolidated financial statements.
It approved the Board of Management's proposal for the
appropriation of earnings for the financial year 2022, the
Remuneration Report and the Supervisory Board Report, the
Corporate Governance Statement, and the Non-Financial Statement.
Furthermore, the Board of Management reported on the status of
investigations into potential misconduct at the level of subsidiaries in
relation to the Structured Alpha matter. In addition, the Supervisory
Board resolved, at the recommendation of the Audit Committee, to
propose to the Annual General Meeting the election of PwC as auditor
for the 2023 individual and consolidated financial statements and for
the review of the half-year financial report for 2023, and to mandate
PwC with the supplementary audit of the Remuneration Report and
the Non-Financial Statement for the financial year 2023. Moreover, the
Supervisory Board reviewed the agenda and proposals for resolution
for Allianz SE's 2023 Annual General Meeting (AGM) and approved
the stipulations of the Board of Management for the virtual AGM. It
SUPERVISORY BOARD REPORT
Annual Report 2023 - Allianz Group
2
Annual Report 2023 - Allianz Group
A_To our Investors
Our brand value is stronger than ever before. Allianz is the world's
leading insurance and asset management brand for the fifth time in a
row according to Interbrand's 2023 Best Global Brands ranking, with
our brand value exceeding USD 20 bn for the first time. In addition, in
an increasingly polarized world, Allianz remains the most trusted
insurance brand among our peer set across all stakeholder groups,
according to Edelman Trust Intelligence data. We embrace our
societal responsibility and leverage our strength, stability, and skills to
address the root causes of polarization and secure the future of those
who put their trust in us.
Our customers value the care and service we provide in their moments
of greatest need. We evaluate our business performance based on the
experience of our customers, as their satisfaction and loyalty are
among the most important drivers of our growth. Our latest Net
Promoter Score results, which measure our customers' loyalty through
customers' willingness to recommend Allianz, show that three-quarters
of our operating entities outperformed their peers, a remarkable jump
of 11 percentage points from last year. And we are also proud that
59% of our operating entities have achieved the distinction of Loyalty
Leadership status, which is a leading indicator for our future market
expansion.
Our success would be impossible without our engaged and healthy
workforce. We are therefore extremely proud that Allianz achieved
record results in all three globally benchmarked indices of employee
engagement against a declining industry trend: our Inclusive
Meritocracy Index increased by 2 percentage points reaching best-in-
class levels, our Work Well Index+ rose by 5 percentage points, and our
Employee Engagement Index by 3 percentage points. In addition, our
employee share ownership reached 70%, which is a remarkable
expression of our people's confidence in our organization. Our industry
leadership in diversity reflects the strength of our workforce and its
preparedness for the future, and this talent advantage is recognized
by the global Refinitiv Diversity & Inclusion Index 2023, which ranked
Allianz first in the insurance category for the 5th consecutive year.
A_To our Investors
However, our efforts to ensure resilience and to protect what is most
valuable to our customers exceed our organization and touch on
society at large. In 2023, we again demonstrated our industry
leadership in sustainability by publishing our first comprehensive net-
zero transition plan – with concrete milestones to be achieved by 2030
detailing our commitment to achieve net-zero emissions in the
investment of policyholder funds and our property and casualty
portfolios by 2050.
On behalf of our management team and our employees, I thank you
for your trust in the Allianz Group and look forward to earning your
continued support in the year ahead.
Sincere
ey yous,
مایی عنفه
ॐ
3
As we look ahead, our corporate health and resilience are
foundational to our ability to deliver strong results and returns amid
even the most challenging environments especially in the
increasingly polarized world we live in today. We are well-prepared to
lead in this context, drawing on the principles of sustainability,
strength, and inclusion at which Allianz has excelled since our founding
134 years ago. Our company and our purpose are as relevant and
important today as they have ever been, and we will not shy away
from this calling.
also obtained extensive information on the status of implementation
of the Allianz Business Master Platform. Lastly, the Supervisory Board
dealt with succession planning for the Supervisory Board and the
Board of Management.
On 4 May 2023, just before the Annual General Meeting, the Board of
Management briefed the Supervisory Board on business
developments in the first quarter of 2023, as well as on the current
situation of both the Allianz Group and Allianz SE, in particular with
regard to the development of the Group's solvency. The Supervisory
Board also once again dealt with the status of the measures initiated
by the Board of Management following the Structured Alpha matter
and the status of the measures to implement results of the audit
carried out by the BaFin regarding the Group steering processes and
the System of Governance.
The meeting on 23 June 2023 was held at Allianz UK in London. At the
meeting, the Board of Management provided a comprehensive report
on the business developments in the financial year 2023 to that date.
The Supervisory Board also dealt with BaFin's findings from the review
of the implementation of the insurance supervisory law requirements
for IT and the measures initiated by the Board of Management in
response to these findings. Furthermore, given the substantial progress
in implementing the measures initiated following the Structured Alpha
matter, and at the recommendation of the lawyers mandated by the
Supervisory Board, the Supervisory Board decided to dissolve the
Audit Committee working group specifically set up for this purpose in
2021 and to return to regular reporting. In addition, the Supervisory
Board obtained a comprehensive report on the status of the merger of
the global MidCorp business with the business of Allianz Global
Corporate & Specialty SE under the trading name Allianz Commercial.
The Board of Management also reported in detail on the current
concept of the Allianz Business Master Platform and its
implementation status. Other topics covered by reports included the
Board of Management's decision to leave the Net-Zero Insurance
Alliance, and the business of Allianz UK, which was reported on by the
CEO of Allianz UK. In addition, the Board of Management provided its
regular status report on cyber risks and cybersecurity at Allianz as well
as its annual report on Group data privacy. Finally, the Supervisory
Board again dealt with succession planning for the Board of
Management and Supervisory Board. The mandates of Board of
Management members Dr. Karuth-Zelle and Mr. Townsend were each
extended by five years up until 31 December 2028. At the end of the
February and April 2023 before this working group was dissolved by
the Supervisory Board in June 2023.
over
In addition, the committee dealt with the proposal to the Annual
General Meeting for the appointment of the auditor and, following the
Annual General Meeting, the awarding of the audit mandates and
determined key audit areas for the financial year 2023. At Group level,
the focus was on governance processes in connection with ESG
commitments. A review of the design and effectiveness of control
functions, which were transferred to Allianz Technology together with
a large number of IT services, was established as another key audit
area at Group level. Other key audit areas were the review of controls
non-financial reporting and the assessment of the
appropriateness of horizontal monitoring by Compliance. The results
of the audits of the key audit areas were subsequently reported by the
auditor at individual meetings. The Audit Committee discussed the
assessment of the audit risk, the audit strategy, and the audit planning
with the auditor. In addition, the Audit Committee held several
discussions with the auditor in the absence of the Board of
Management. Moreover, the Audit Committee conducted an
assessment of the quality of the audit and discussed the auditor's fees.
It also dealt with the awarding of non-audit services to the auditor and
approved an updated positive list of pre-approved audit and non-
audit services. As before, the Audit Committee obtained a separate
report from the PwC auditors in charge of the Asset Management.
Furthermore, the Audit Committee was regularly informed by the
Board of Management about the status of implementation of the
measures taken by the Board of Management in response to the
results of a review by BaFin of the implementation of the insurance
supervisory law requirements for IT.
In addition, the Audit Committee dealt extensively with the internal
control systems, the accounting process and internal controls in the
context of financial reporting, the annual review of the Group's system
of governance and the audit plan prepared by Internal Audit for 2024.
The committee also received reports on the implementation of the
requirements of the German Supply Chain Act and discussed the
Board of Management's further planning with regard to the Allianz
Customer Model and the Business Master Platform with the auditor. At
all meetings, reports on legal and compliance issues within the Group,
operational risks, the work performed by Internal Audit, and data
privacy issues were presented and discussed in detail. Furthermore, the
head of the actuarial function (Group Actuarial, Planning &
Controlling) presented his annual report.
A_To our Investors
The Risk Committee held two meetings in 2023, both of which were
held in person. At both meetings, the committee discussed the current
risk situation of the Allianz Group and Allianz SE with the Board of
Management. At the March meeting, the Risk Report and other risk-
related statements in the annual and consolidated financial
statements as well as management and Group management reports
were reviewed with the auditor and acknowledged with approval. The
appropriateness of the early risk detection system at Allianz SE and the
Allianz Group and the result of further risk assessments by the auditor
were also discussed. A recommendation was provided to the Audit
Committee to include the Risk Report, as presented and discussed, in
the Annual Report.
the implementation of the insurance supervisory law requirements for
IT.
The Technology Committee held two meetings in the financial year
2023, both of which were held as in-person meetings. At these
meetings, the committee extensively discussed the Business Master
Platform and technological innovations. Detailed discussions were
held regarding process mining, data analytics, and artificial
intelligence, as well as the operational implications and profit
contribution potential of these topics. In this context, the Technology
Committee also dealt with the strategy for the use of data and artificial
intelligence. Lastly, the Technology Committee received a report from
the Board of Management on regulatory issues, for instance on the
implementation of the Digital Operational Resilience Act (DORA).
The Nomination Committee held five meetings in the financial year
2023, all of which were held in person. A major focus was on succession
planning for the Supervisory Board, in particular with regard to the
elections to the Supervisory Board due in the next few years. The
Nomination Committee intensively discussed potential candidates to
succeed the members of the Supervisory Board who will be retiring in
the coming years. Excellently suited candidates were identified for
each retiring member of the Supervisory Board. They have all declared
their willingness to stand for election to the Supervisory Board at the
Annual General Meetings in 2024, 2025, and 2026. In addition, the
Nomination Committee, together with the Board of Management and
in consultation with BaFin, agreed on specific measures to prepare the
candidates at an early stage for the duties of members of the
Supervisory Board of Allianz SE. These measures include, for example,
preparing candidates in the framework of a mandate or a guest role
on the Supervisory Board of a European subsidiary of Allianz SE, or
other suitable measures, as well as the early identification of training
measures, taking particular account of the fitness requirements
communicated by BaFin. The Nomination Committee also prepared
the discussions regarding the composition of the Supervisory Board
committees from the 2024 Annual General Meeting onwards.
The Sustainability Committee held four meetings in the financial year
2023. One meeting was held as a video conference, while three
meetings were held in person. The committee prepared the
assessment of target achievement by the Board of Management
regarding the sustainability targets for the financial year 2022 and
the definition of sustainability targets for the financial year 2023 by
7
Annual Report 2023 - Allianz Group
At both meetings, the Risk Committee extensively dealt with the risk
strategy, risk appetite, capital management, the external rating, as
well as the effectiveness of the risk management system for the Allianz
Group and Allianz SE. In this context, the committee discussed the
current implementation status of enhancements of the risk and control
framework. The committee also obtained reports on Allianz's own risk
and solvency assessment and changes to the internal Solvency II
model and discussed the reports in detail with the Board of
Management and the head of the risk function. Moreover, the Risk
Committee again dealt with the war in Ukraine, in particular with
regard to possible scenarios for its further development, and its
potential impact on the risk situation of Allianz. In addition, the Risk
Committee intensively dealt with the impact of rising interest rates and
inflation. In this context, discussions with the Board of Management
and the head of the risk function focused, in particular, on potential
effects on policy-holder termination behavior, as well as - with a view
to liquidity risks - stress scenarios for the life insurance segment and
the asset management segment as well as possible countermeasures.
Furthermore, the Risk Committee dealt with the newly developed risk
metrics for considering the asset management segment when
establishing the risk capital requirements and obtained reports on the
real estate portfolio, its quality, as well as current risk management
measures. In addition, its deliberations focused on the respective
implementation status of the transformation program for the Business
Master Platform and the measures taken by the Board of
Management in response to the BaFin's findings as part of a review of
Annual Report 2023 - Allianz Group
16
At all meetings, the Audit Committee also reviewed and monitored the
status of the processing of the Structured Alpha matter. The focus of its
deliberations in this context was on the status of implementation of the
measures taken in response to the Structured Alpha matter to remedy
the deficiencies identified. The Supervisory Board was regularly
briefed on this matter by the Board of Management and the external
lawyers assisting the Board of Management, and additionally
obtained advice from the independent lawyers mandated by the
Supervisory Board. In the framework of these monitoring activities, the
Committee also discussed the appropriateness and completeness of
these measures. With the support of the lawyers mandated by the
Board of Management and the lawyers commissioned by the
Supervisory Board, the Audit Committee also comprehensively dealt
with the question of potential claims for damages against employees
working for subsidiaries in connection with the Structured Alpha
matter, and prepared the discussion of this topic at the plenary
meetings of the Supervisory Board. The Audit Committee's special
working group specifically set up for this purpose also met twice in
meeting, the Supervisory Board held an executive session without the
members of the Board of Management being present and informed
itself about the mid-year talks held between the Chairman of the
Supervisory Board and the members of the Board of Management.
Furthermore, the Supervisory Board discussed the assessment of
Allianz made by an external finance and insurance analyst from the
independent analyst firm Autonomous Research with that analyst.
At the meeting on 28 September 2023, the Board of Management
firstly again reported on the business developments in the financial
year 2023 to that date, focusing in particular on the effects of
damages from natural catastrophes. One of the key items discussed at
the meeting was the Board of Management's IT strategy, and, in that
context, the implementation status of the current strategy to launch
the Business Master Platform. The Board of Management also
reported on the motor vehicle liability insurance segment in Germany
and provided an update on the business of Allianz Direct. The
Supervisory Board also dealt with the status of business activities in the
Latin America region. Moreover, the Supervisory Board discussed the
upcoming decisions regarding personnel matters relating to the Board
of Management, and – in accordance with the proposal submitted by
the Personnel Committee - approved Mr. Terzariol's resignation from
the Board of Management and the termination of his service contract
by way of mutual agreement with effect from 31 December 2023. The
Supervisory Board appointed Ms. Claire-Marie Coste-Lepoutre to the
Board of Management of Allianz SE to succeed Mr. Terzariol with
effect from 1 January 2024. Subsequently, the Supervisory Board
discussed the results of the self-evaluation of the Supervisory Board
required by supervisory law and the resulting development plan, which
includes training programs on accounting and the internal model for
the financial year 2024. The Supervisory Board also discussed the
succession planning for the Supervisory Board. The Supervisory Board
then held its executive session without the members of the Board of
Management being present.
On 1 October 2023, the Supervisory Board extended the mandate of
Mr. Bäte as member and Chairman of the Board of Management until
the end of the day of the Annual General Meeting resolving on the
approval of the actions of the Board of Management for the financial
year 2027 by way of a written resolution. In the same circular
resolution, the Supervisory Board extended the mandate of
Dr. Wimmer as member of the Board of Management up until
30 September 2029.
5
Annual Report 2023 - Allianz Group
A_To our Investors
At the meeting on 14 December 2023, the Board of Management first
informed the Supervisory Board about the results for the third quarter,
the further business developments, and the situation of the
Allianz Group. Furthermore, the Supervisory Board discussed the risk
strategy for the financial year 2024 and, closely linked with the risk
strategy, the planning for the financial year 2024. It also obtained a
report from the Board of Management on the status of
implementation of the Allianz Commercial project and on the Asset
Management business of Allianz Global Investors. The Board of
Management also presented its regular status report on cyber risk
security, dealing in particular with global staff shortages in IT. The
Board of Management also reported on the M&A strategy and current
M&A transactions. At that meeting, the Supervisory Board again
discussed succession planning for the Board of Management. It also
reviewed the appropriateness of the Board of Management's
remuneration and set the targets for the variable remuneration for the
members of the Board of Management for 2024. The appropriateness
of the remuneration for the Supervisory Board members was also
reviewed on the basis of an external benchmark analysis. The
Supervisory Board also dealt with the Declaration of Conformity with
the German Corporate Governance Code. The Supervisory Board then
discussed the results of the self-assessment of its own activities (so-
called efficiency review), once again carried out using an internal
questionnaire in 2023. The Supervisory Board also discussed
succession planning for the Supervisory Board. The Supervisory Board
then held an executive session without the members of the Board of
Management being present and discussed the planning of
Supervisory Board activities for the financial year 2024.
Declaration of Conformity with the German
Corporate Governance Code
On 14 December 2023, the Board of Management and the
Supervisory Board issued the Declaration of Conformity in accordance
with section 161 of the German Stock Corporation Act ("Aktiengesetz”)
and posted it on the company website, where it is available at all times.
Allianz SE has complied with all recommendations set out by the
German Corporate Governance Code in the version of 28 April 2022,
and will continue to comply with them in the future. Further
explanations on corporate governance in the Allianz Group can be
found in the Corporate Governance Statement. More details on
corporate governance are also provided on the Allianz company
website.
Committee activities
The Supervisory Board has formed various committees in order to
perform its duties efficiently. The committees prepare the consultations
in plenary sessions as well as the adoption of resolutions. They can also
adopt their own resolutions. The composition of the committees can
be found in the Corporate Governance Statement.
The Standing Committee held five meetings in the financial year 2023,
all of which were held as in-person meetings. The committee dealt with
corporate governance issues, in particular the preparation of the
Declaration of Conformity with the German Corporate Governance
Code. The committee also dealt with the preparation of and follow-up
to the Annual General Meeting, extensively deliberating on the format
for the Annual General Meeting. The Standing Committee also
prepared the Supervisory Board self-evaluation as required by
supervisory law and the associated development plan. Collective and,
if necessary, individual training measures are continuously carried out
as part of the implementation of the development plan. The Standing
Committee also reviewed the appropriateness of the remuneration of
the members of the Supervisory Board. Regarding the Supervisory
Board's annual efficiency review, the committee also discussed the
implementation of the results of the efficiency review conducted in
2022 and prepared the efficiency review for 2023. As planned, the
review was implemented without any external support. Lastly, the
Standing Committee prepared the analysis of the results of the
efficiency review 2023 by the Supervisory Board.
The Personnel Committee held four regular meetings and one
extraordinary meeting in 2023. The regular meetings were held in
person, while the extraordinary meeting took place in a virtual format.
At the meetings, the committee discussed in detail the preparatory
review of the Remuneration Report for 2022 and target achievement
of the members of the Board of Management for the financial year
2022, including the annual Fit & Proper assessment of each member
of the Board of Management. As part of the target-assessment
process, the Personnel Committee discussed in particular the
adjustment of the net income, as a target performance indicator for
variable remuneration, to reflect the extraordinary charges resulting
from the divestment of the Russian business. The Personnel Committee
also prepared the annual review of the appropriateness of the
remuneration of the Board of Management and dealt with potential
amendments to the remuneration system for the Board of
Management. Furthermore, discussions focused on the preparation of
the target setting for the variable remuneration for 2024. The
committee also dealt with the departure of Mr. Terzariol from the
Board of Management. Against this background and in light of the
expiry of various mandates at the Board of Management, the
Personnel Committee intensively dealt with succession planning for
the Board of Management. Lastly, it discussed individual issues related
to mandates or contracts of (former) Board of Management members.
The Audit Committee held five meetings in 2023. All meetings were
held in person. In the presence of the auditor, the committee discussed
both Allianz SE's annual financial statements and the Allianz Group's
consolidated financial statements, the management reports including
non-financial reporting, the respective solvency statements, and the
half-year financial report as well as the Remuneration Report. The
auditor presented his respective audit reports. Reviews by the Audit
Committee revealed no reasons for objection. The Board of
Management reported on the quarterly results and discussed them in
detail with the Audit Committee together with the results of the
auditor's review. The Board of Management also reported regularly on
relevant special topics. In this context, the Audit Committee dealt, in
particular, with the impact of the rise in inflation rates, the divestment
of the majority stake in Allianz's Russian business, and the
implementation of the new accounting standards IFRS 9 and 17.
Alongside our strong financial performance, Allianz's organizational
health further raises our confidence that our company will remain
resilient in the face of volatility and be able to exceed our stakeholders'
expectations in the future:
A_To our Investors
Our shareholders benefited from an outstanding total return of 27%
for the year, outperforming the European insurance sector, our direct
peers, and the broader European stock market. This performance is
backed by our financial strength and affirmed by the leading financial
rating agencies which place Allianz in the top of our category, at
AA (S&P Global), Aa2 (Moody's) and A+ (AM Best) respectively, and
fully in line with our ratings objectives. Looking ahead, we will focus on
unlocking the benefits of our scale, further increasing our productivity,
and translating excellent customer experience into profitable
customer growth.
Our Life/Health segment demonstrated robust growth, with the value
of new business increasing by 2.2% to € 4.0 bn as we developed
attractive solutions to protect our customers from the effects of
inflation on their savings. The operating profit of € 5.2 bn was strong,
making the Life/Health segment a resilient contributor to our earnings
power.
150 Consolidated Balance Sheet
151 Consolidated Income Statement
152 Consolidated Statement of Comprehensive Income
153 Consolidated Statement of Changes in Equity
154 Consolidated Statement of Cash Flows
Notes to the Consolidated Financial Statements
155
General Information
Pages 149-257
177 Notes to Insurance Operations
206 Notes to Financial Operations
225 Other Information
259 Responsibility Statement
260
Independent Auditor's Report
267 Auditor's Report
Pages 258-267
13 Corporate Governance Statement (part of the Group Management Report)
22 Takeover-Related Statements and Explanations (part of the Group Management Report)
E Further Information
24 Remuneration Report
D_Consolidated Financial Statements
Pages 12-49
Annual Report 2023 - Allianz Group
Courage to
move forward
Annual Report 2023
► To go directly to any chapter, simply click
on the headline or the page number.
CONTENT
A_ To Our Investors
Pages 50-148
2 Letter to the Investors
10 Mandates of the Members of the Supervisory Board
11 Mandates of the Members of the Board of Management
B_Corporate Governance
▸ All references to chapters, notes, web pages, etc.
within this report are also linked.
Pages 1 – 11
4 Supervisory Board Report
C_Group Management Report
51 Business Operations
54
TO OUR INVESTORS
A
1
Annual Report 2023 - Allianz Group
A_To our Investors
OLIVER BÄTE
Chief Executive Officer
New IFRS 9/17 accounting standards
Dear
-
In 2023, the theme that dominated the global economy, capital
markets and society alike was the fight against inflation. Over the past
year, no one has been immune to inflation's corrosive effects on
savings and the affordability of goods. The monetary policies that
were taken to mitigate inflation now appear to have arrested its
trajectory, but present manifold challenges both for businesses and
consumers.
Throughout a period in which our customers and partners experienced
significant increases in their cost of living and challenges in sustaining
their businesses, we maintained our focus on delivering the greatest
possible value to them through our customer service and product
offerings. For our shareholders, we steered our business model and
managed our capital position to overcome inflationary challenges,
ultimately contributing to a record performance. Our ability to
manage inflation in all its forms is proving to be a distinct competitive
advantage for Allianz.
We have successfully consolidated our leading position as one of the
largest global insurers and active asset managers, one that is able to
leverage its scale, global reach, and diversified business model to
address the financial and protection needs of more people around the
world. At the end of the 2023, our share price reached a 20-year high,
our total business volume increased by 5.5% to € 162 bn, and our
operating profit reached another record level, rising by 6.7% to
€ 14.7 bn.
Our Property-Casualty segment grew strongly by 8.4% to almost
€ 77 bn in total business volume. The operating profit topped € 6.9 bn
for the first time, despite another year that was marked by increased
claims resulting from more frequent and severe natural catastrophes.
This clearly confirms our healthy underlying profitability and
underwriting expertise.
Investors
For further information on the definition of our Alternative Performance Measures and their components, as well as the basis of
calculation adopted, please refer to the Allianz company website.
Guideline on Alternative Performance Measures
The Consolidated Financial Statements are presented in millions of euro (€ mn) unless otherwise stated. Due to rounding, numbers
presented may not add up precisely to the totals provided and percentages may not precisely reflect the absolute figures.
Non-Financial Statement
109 Business Environment
110 Executive Summary of 2023 Results
111 Property-Casualty Insurance Operations
113
Life/Health Insurance Operations
115 Asset Management
117 Corporate and Other
118 Outlook 2024
122 Balance Sheet Review
124 Liquidity and Funding Resources
127
Reconciliations
128 Risk and Opportunity Report
Disclaimer regarding roundings
Our Asset Management segment proved resilient managing through
a volatile environment to deliver an operating profit of € 3.1 bn. We
recorded third-party net inflows of € 21.5 bn - a signal of active
investors' readiness to invest in the market through us - and we
achieved growth in third-party assets under management to € 1.7 tn.
Together with our continued strong investment outperformance, this
bodes well for further improvements in growth and profitability.
100
The financial results are based on the new IFRS 9 (Financial Instruments) and IFRS 17 (Insurance Contracts) accounting standards,
which have been adopted as of 1 January 2023. Comparative periods have been adjusted to reflect the application of these new
accounting standards.
Upon a proposal submitted by the Supervisory Board, the company's
Annual General Meeting held on 4 May 2023 appointed PwC as
auditor for the annual and consolidated financial statements as well
as the review of the half-year Financial Report 2023. PwC audited the
financial statements of Allianz SE and the Allianz Group as well as the
respective management reports and issued an unqualified auditor's
report in each case. The management reports each also contain the
Non-Financial Statement. The consolidated financial statements were
prepared on the basis of the International Financial Reporting
Standards (IFRS) as applicable in the European Union. The annual
financial statements of Allianz SE were prepared in accordance with
German law and accounting standards. PwC performed a review of
the half-year Financial Report. In addition, PwC was also mandated to
perform an audit of the solvency statements according to Solvency II
as of 31 December 2023 for Allianz SE and the Allianz Group.
Furthermore, PwC was commissioned to conduct an audit of the
contents of the Non-Financial Statement and the Remuneration
Report.
5/5
100
Gabriele Burkhardt-Berg (Vice Chairwoman)
6/6
100
Sustainability Committee
Dr. Friedrich Eichiner
Herbert Hainer (Vice Chairman)
100
Christine Bosse (Chairwoman)
4/4
100
Sophie Boissard
6/6
6/6
100
100
Michael Diekmann (Chairman)
100
Jürgen Lawrenz
2/2
100
Nomination Committee
Presence
6/6
%
5/5
100
Plenary sessions of the Supervisory Board
Christine Bosse
5/5
100
Michael Diekmann (Chairman)
Sophie Boissard
3/4
75
616
100
6/6
100
Frank Kirsch
6/6
75
100
6/6
100
Primiano Di Paolo
6/6
Audit of annual accounts and consolidated
financial statements
100
Jürgen Lawrenz
3/4
Frank Kirsch
100
Christine Bosse
Rashmy Chatterjee
Dr. Friedrich Eichiner
Jean-Claude Le Goaër
6/6
100
Gabriele Burkhardt-Berg
4/4
100
6/6
100
Michael Diekmann
4/4
100
6/16
2/2
Dr. Friedrich Eichiner
Martina Grundler
2/2
5/5
100
5/5
100
Personnel Committee
Michael Diekmann (Chairman)
Gabriele Burkhardt-Berg
Herbert Hainer
100
5/5
5/5
100
5/5
100
Dr. Friedrich Eichiner (Chairman)
5/5
100
5/5
100
100
All Supervisory Board members received the documentation relating
to the annual financial statements and the audit reports from PwC in
due time. The preliminary financial statements and PwC's preliminary
audit results were discussed in the Audit Committee on
21 February 2024, as well as in the Supervisory Board's plenary session
on 22 February 2024. The finalized financial statements and PwC's
audit reports (dated 26 February 2024) were reviewed by the Audit
Committee on 5 March 2024 and discussed in the Supervisory Board
plenary session on 6 March 2024. The auditors participated in the
discussions and presented the results of their audit. Particular
emphasis was placed on the key audit matters described in the
auditor's report and on the audit procedures performed. No material
weaknesses in the internal financial reporting control process were
discovered. There were no circumstances that might give cause for
concern about the auditor's independence. In addition, the solvency
statements dated 31 December 2023 for both Allianz SE and the
Allianz Group, as well as the related reports by PwC, were reviewed by
the Audit Committee and the Supervisory Board.
the Personnel Committee and the Supervisory Board. In addition,
the committee dealt in detail with sustainability-related reporting
(Sustainability
Non-Financial
Report,
Statement and Tax
Transparency Report, each for the financial year 2022), including the
planned amendments resulting from an E.U. Directive (Corporate
Sustainability Reporting Directive - CSRD). At the September meeting,
the committee also held discussions with the Board of Management
on the Allianz Group's long-term climate targets resulting from the
published "Net-zero plan with interim targets for 2030 for key business
areas", and prepared the setting of sustainability targets for 2024 by
the Personnel Committee. The committee also focused on the ongoing
development of the sustainability strategy, particularly with regard to
the general socio-political and business environment, as well as on the
application of new artificial intelligence technologies for data usage
in customer products. In view of the particular importance of the latter
topic for the Allianz Group's business activities, also with regard to
aspects of data ethics, the members of the Technology Committee also
participated in the discussion of this topic at the relevant meeting.
100
The Supervisory Board obtained regular and comprehensive
information on the work performed by the committees.
Overview of members' participation in Supervisory
Board and committee meetings in the financial
year 2023
Individualized publication of members' participation in meetings
Standing Committee
Michael Diekmann (Chairman)
Sophie Boissard
Jean-Claude Le Goaër
Herbert Hainer
Jürgen Lawrenz
Audit Committee
Presence
%
5/5
Sophie Boissard
5/5
5/5
Michael Diekmann
Michael Diekmann
2/2
100
2/2
100
100
Frank Kirsch
Primiano Di Paolo
Technology Committee
Rashmy Chatterjee (Chairwoman)
2/2
100
Gabriele Burkhardt-Berg
100
2/2
100
2/2
Dr. Friedrich Eichiner
2/2
100
100
Jean-Claude Le Goaër
5/5
100
Martina Grundler
5/5
5/5
Risk Committee
Michael Diekmann (Chairman)
2/2
100
Christine Bosse
100
Germany
Workplace
representation
(EEA only)¹
Global Insurance
Lines & Anglo
Markets, Iberia &
Latin America,
Middle East and
Africa
1_For countries with at least 10% of Allianz's total number of employees.
Employees -
Non-EEA²
Corporate and
Other³
Social Dialogue
Asia Pacific
Diversity is a core element of our culture. Our customers are diverse,
and in order to best understand and serve them, our workforce needs
to be diverse, too. We believe that diverse teams create better results,
show higher resilience, and are more innovative and more productive,
provided they can act in an environment where everyone can be
themselves and unique views are appreciated. Being both diverse and
inclusive has a positive impact on our business.
2_For business segments with at least 10% of Allianz's total number of employees.
3_For further information on Corporate and Other (incl. Allianz Technology) figures, please refer
to note 5 to the consolidated financial statements.
4_Location of employees.
2nd Strategic Pillar: Business
This section outlines the two strategic sub-sections Diversity, Equity,
and Inclusion (DEI), focusing on Gender and Age distribution, and
Persons with disabilities. We further describe the Strategic Workforce
Planning topic.
Diversity, Equity, and Inclusion (DEI)
We are committed to strengthening inclusion in our workplace, by
ensuring equal opportunities for all, and shaping a diverse workforce
along five DEI dimensions: gender, people with disabilities,
nationalities/ethnicities, generations, and LGBTQ+. With our Allianz
Functional Guidelines for DEI and our Anti-Harassment & Anti-
Discrimination Functional Guideline, we aim to ensure that across our
operating entities and functions there is no discrimination for reasons
including gender, age, sexual orientation, ethnicity, nationality,
physical or mental abilities, religious beliefs, or social background.
DEI Employee Networks: Employee networks enable us to engage
with our employees. They help us to raise awareness, support
employees, advocate for change, and shape the agenda for DEI.
We have five global employee networks: "Allianz NEO" for gender
inclusion, "Allianz Beyond" for disability inclusion, "Allianz GRACE"
for ethnicity and cultural inclusion, "Allianz Engage" for
generational inclusion, and "Allianz Pride" for LGBTQ+ inclusion.
15 new networks operating locally were added in 2023.
Global Inclusion Council: Our Global Inclusion Council (GIC) sets
the DEI strategy and plays a crucial role in driving initiatives to
achieve our targets and ambitions, in integrating DEI into the
business and monitoring progress. The GIC has been in place since
2007 and consists of more than 20 Allianz senior managers from
operating entities, Allianz Group Center representatives, and the
leads of our five global employee networks for DEI which leads to
81 local network chapters.
At Allianz, we want to achieve our targets and ambitions for our DEI
dimensions in a sustainable manner. The key to this is an inclusive
workplace environment. We have multiple actions in place to
strengthen our inclusive workplace environment, such as:
Germany4
Employees EEA¹
Employee representation is widespread across Europe. The right
of workers to establish workers' representative bodies and thus
negotiate working conditions is guaranteed by law in many
jurisdictions. The mandate of workers' representatives and the role of
the employer in regard to collective bargaining and the social
dialogue is very much shaped by local legal requirements.
80-100%
Collective bargaining coverage and social
dialogue
8.56
32.78
67.06
DEI as part of daily business - Mentoring Campaign: At Allianz,
DEI is integrated into the way we conduct business. Our global
Mentoring Campaign #KeepExploring, which took place
throughout 2023, championed an intersectional approach
featuring personal experiences of employees presenting more
than one diversity dimension, e.g. combining different generations
with nationalities, and/or genders.
1_Comprises non-binary and not reported.
0.16
We aim to ensure that employee rights are protected across all Allianz
operating entities. Allianz was one of the first companies to create pan-
European worker participation standards and to establish a European
SE Works Council under the legislation for Societas Europaea (SE)
companies (an agreement concerning the participation of employees
in Allianz SE).
Through this body and the regular dialogue between
management and employee representatives and their trade unions,
Allianz ensures effective representation of all its employees at
European level. Our (European) Works Council Executive Committee
is evidence that Allianz endorses the establishment of employee
representatives in its Group companies and welcomes their
cooperation with the trade unions.
Allianz supports the principles enshrined in the ILO (International
Labour Organization) core conventions on freedom of association and
collective bargaining. In countries where those principles have been
enshrined in local law, we fully respect and implement local rules on
trade unions and worker representation. In countries that have not
ratified the relevant ILO conventions, we respect the primacy of local
laws and look for ways to allow our employees to organize and voice
their interests vis-à-vis management. Globally, the percentage of
Allianz's workforce covered by collective bargaining agreements is
48.46%.
Collective Bargaining Coverage
According to CSRD reporting requirements, "coverage" includes
the number of employees to whom the companies concerned are
obliged to apply the collective agreements. Irrespective of the
obligation, there are a large number of companies that apply the
collective agreements and provisions on a voluntary basis.
Annual Report 2023 - Allianz Group
C_Group Management Report
Collective bargaining coverage and social dialogue (S1-8)
Coverage
Rate
0-19%
20-39%
40-59%
60-79%
We work closely with employee representatives (members of the
(European) SE Works Council's Executive Committee and employee
representatives on the supervisory board of Allianz SE) to support
change implementation, manage impacts on employees, and
promote opportunities. The "social dialogue" is our pan-European
forum that has existed for over a decade. It supports the progress of
our business strategy, our agenda, and our response to the increased
pace of change in topics such as the digital revolution. Discussions in
2023 included the Strategic Workforce Planning program.
Global People and Culture monitor the development of our targets
and ambitions on a regular basis and report progress to the Allianz
Board of Management on a semi-annual basis (for gender, this is done
on a quarterly basis). Additionally, we support operating entities in
setting up their individual local action plans to reach DEI targets and
foster best practice exchange.
63
with the most diverse and inclusive workplaces. In 2023, Allianz was
ranked #1 in the Insurance industry and #1 in Germany across all
industries. Our reputation as a DEI leader strengthens Allianz's brand
as a trusted provider of financial services.
41.67
Not reported as female or male¹
9
66.67
33.33
in Allianz SE Board of Management
Male
Female
Not reported as female or male¹
in Executive positions (top management)²
6,788
Male
4,461
65.72
Female
2,327
34.28
Not reported as female or male¹
235
Male (share of employees that took family-related leave)
Female (share of employees that took family-related leave)
Not reported as female or male (share of employees that took
family-related leave)¹
in Allianz Global Executive (AGE) positions
5
The achievements of our DEI strategy are recognized by external
global awards and rankings. For example, Refinitiv - a global Diversity
and Inclusion Index - identifies the top 100 publicly traded companies
Female
7
For further information on DEI targets and ambitions, see our DEI
Booklet 2023 on the Allianz company website.
Gender
At Allianz, we have already attained overall numerical gender parity
in our workforce with 80,949 female and 73,884 male employees. We
are committed to equal opportunities for all, regardless of gender, and
put measures in place to see this reflected in the staffing of leadership
positions. As outlined in our Allianz Functional Guidelines for DEI¹, our
2024 targets are to have 30% women in Allianz Global Executive
positions, and 30% women in Allianz Senior Executive positions. In
addition, we aim to have 40% women in Allianz Executive positions
and 50% women in our talent pools. For further information, please
refer to section the "Fair remuneration". Allianz NEO, our employee
network for gender inclusion currently has 20 local networks in place.
Allianz NEO focuses on helping to find concrete improvement
opportunities, creating dialogue and allyship, and endorsing new
perspectives and novel working models for both women and men.
Generations
With five different generations currently working together at Allianz,
we are committed to leveraging the combined strengths, individual
skills, and experiences of all generations. We aim to have a balanced
generational representation, where GenZ and GenY (employees
under 35) represent at least 25% of our global workforce. As of the end
of 2023, 34.31% of our global workforce (see table S1-9.2) is younger
than 35, which ensures a balanced generational representation.
Our efforts for age inclusion are strongly supported by Allianz Engage,
our employee network for generational diversity with 11 local networks in
place. Through Allianz Engage, our employees are invited to proactively
contribute to a company culture where the knowledge of all generations is
called upon, for example, through mentoring. In the Allianz Group, we have
more than 700 mutual mentoring arrangements in place, allowing people
from different generations to enter into mentoring partnerships to connect
and to share knowledge, experiences, skills and perspectives in a genuine
learning exchange beneficial for everyone involved.
1 The Guidelines including any targets stated therein do not apply to Allianz Asset Management
companies, which have their own initiatives to promote equal opportunity.
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C_Group Management Report
Diversity, Equity & Inclusion (S1-9.1)
As of 31 December
2023
#
%
Gender distribution
in Allianz SE Supervisory Board
12
Male
58.33
Work-life balance metrics (S1-15)
Adequate wages
Most of our employees across the globe have the opportunity to
spend a minimum of 40% of their working hours working from outside
the office. Our global minimum offering provides a lot of
empowerment, trust, and flexibility to our local teams to decide what
C_Group Management Report
Fair remuneration
Allianz is committed to equity and fairness as defined in our
Allianz Group Code of Conduct. This includes ensuring Allianz
operating entities enforce equal pay for equal work in the same or
comparable roles for all genders. This principle is outlined in our
Allianz Group Remuneration Policy. An annual global equal pay
review across the organization identifies equal pay gaps which can be
mitigated with appropriate action.
In addition to equal pay, there is also a gender pay gap to be
considered. This consists of the difference in average remuneration
between men and women across a whole organization, irrespective of
role or seniority. If one gender is more represented in higher paid,
senior roles in one organization, for example, there will be a gender
pay gap. Allianz takes several actions to foster gender equity in
representation and thus close the gender pay gap. One important
action is the ambition to have higher female representation in senior
positions. To reach our gender representation targets, we monitor the
percentage of our female employees on a quarterly basis and
implement concrete actions towards target achievement. We also
foster best practice exchange among operating entities to drive
gender equality in representation (see also the section "Diversity,
Equity, and Inclusion (DEI)").
To measure our progress towards equity and fairness and to
continue to move forward on our journey, in 2021 we launched the
EDGE (Economic Dividends for Gender Equality) certification process
for our insurance business segment and several global lines, currently
covering 73% of the Allianz Group's global headcount. EDGE is the
leading standard for diversity, equity, and inclusion and monitors
companies' progress on gender equality against established criteria,
including equal pay. We are proud that Allianz has been recertified by
EDGE in 2023.
Benefits
Reward and recognition at Allianz go beyond remuneration. Allianz
also supports its employees around the world with attractive benefits.
This shows that we care about employees' Health, Money, Career, and
Time and support them to find professional and personal fulfillment.
Our Global Benefits Strategy for the insurance business is
structured around these four pillars. We introduced minimum
standards for benefits available to employees across Allianz in 1Q
2023, and we expect our global rebranding and communication
campaign to further increase the transparency and visibility of Allianz
benefits among employees in 2024.
Benefits take economic, environmental, and social factors into
account, and incentives are oriented towards creating long-term value
and financial protection. The Allianz Employee Share Purchase Plan
(ESPP) for instance offers employees Allianz shares at favorable
conditions in 43 countries, allowing them to benefit from the success of
the company and its long-term performance. As a token of
appreciation for meeting previous year Group targets, Allianz offered
one Allianz Free Share - or its cash equivalent in countries that do not
offer the ESPP - to employees globally in 2023.
For further information on employee benefits, please refer to our
People Fact Book 2023 and our Global recruiting homepage.
Social protection
We operate in countries where our employees have at least access to
social protection programs against loss of income due to major life
events: sickness, unemployment, employment injury, parental leave,
and retirement. In countries where social protection is not provided
through public social security schemes, we aim to close potential gaps
through additional offerings. Best practice examples are our entities in
the United States, where Allianz provides health insurance benefits, or
India, where we provide paternity, and carer leave options. 1
Health and safety
The health, safety, physical, and mental well-being of our employees is
a top priority. We aim to sustain and improve employee health and
well-being across our global workforce. Two key levers to achieve this
ambition are our Minimum Health Requirements and our
Occupational Health and Safety (OHS) Management system.
The four Minimum Health Requirements are:
1.
2.
3.
4.
Annual Report 2023 - Allianz Group
Professional Support: Allianz offers employees 24/7 free of
charge access to professional psychological support through
Employee Assistance Programs.
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Fair remuneration, benefits, and social protection
This section summarizes the topic of Adequate Wages and outlines the
strategic topic Fair remuneration. Furthermore, we will address the
topics Benefits and Social Protection.
69.99
Male
At Allianz, we are committed to developing and growing our people,
including through performance management. Our performance
management aims both to enhance the employees' individual
performance and to align their priorities with Allianz's corporate
purpose and strategic business goals. Setting priorities properly and
conducting regular check-ins enables employees to let their full
potential unfold, which in turn helps Allianz achieve its business
ambitions. Performance management is an ongoing, continuous
process of communicating on-the-job priorities, performance
expectations, and development goals.
The framework for Performance Management is implemented
within the Allianz Group, documented in the Allianz Group
Remuneration Policy.
The global People and Culture template on our leading People
and Culture IT system enables the consistent application of the key
steps making up the performance management cycle. The template is
available to both the executive and non-executive employee
populations. Execution and outcomes of the Performance
Management process are subject to local legal regulations and
respective governance bodies, e.g., local or global Compensation
Committees.
The key steps of the Performance Management Process at Allianz can
be described as follows:
Priority setting is the initial kick-off of the annual performance
management cycle and refers to setting clear, transparent,
outcome-oriented, and flexible goals to be achieved throughout
the year while giving guidance on desired behaviors.
Mid-year check-in is the time to request and provide feedback for
the first half of the year. Line manager and employee reflect on
priorities and behaviors, and agree on joint measures to
continuously improve performance through development
opportunities on the job and off the job. Mid-year check-in is
supported by our Multi-Rater feedback process. The Multi-Rater
feedback is a tool for getting 360-degree feedback from
colleagues. It is mandatory for Allianz's executive population,
whereas implementation for the non-executive population is subject
to the local rules and regulations of our operating entities. Based
on the "People Attributes", Multi-Rater provides employees with
valuable insights into their strengths and developmental areas.
The Personal Development Plan (PDP) lays out the employee's
yearly development goals. Employees are expected to agree with
their manager on their individual development measures, usually
during the mid-year review discussion. The PDP helps the employee
record and track progress towards their own development goals.
The 2023 target of 80% PDP completion by the Allianz executive
population was achieved, as displayed in table "S1-13.2". The
same target is set for 2024. For the Allianz non-executive
population, the 2024 target is a 60% PDP completion rate.
Year-End-Review is the assessment of individual performance of
an employee by the line manager at the end of each year. The
assessment is based on a 3-point rating scale: below, at, or above
target. The overall individual performance of an employee is
reflected in the Individual Performance Assessment.
Performance and Talent Dialogue is a calibration of an
employee's individual performance on the basis of cross-
comparison within the relevant population. This ensures the
application of consistent performance standards and an
appropriate level of differentiation with close attention to non-
discrimination of employees in any regard.
Communication of final Individual Performance Assessment is the
feedback discussion between the line manager and employee,
which normally takes place in 1Q of the following year and seeks
a common understanding of accomplishments and development
opportunities.
Allianz Executives and levels above 3,4 (AE+) with a Personal
Development Plan (PDP), broken down by gender (S1-13.2)
in %
As of 31 December
Executives with a PDP¹
% of male executives with a PDP out of all male executives
% of female executives with a PDP out of all female executives
% of not reported as female or male executives with a PDP out of
all executives not reported as female or male²
2023
83.87
84.94
1_Includes all executive positions (Allianz Global Executive Positions, Allianz Senior Executive
Positions, and Allianz Executive Positions).
2_Comprises non-binary and not reported.
3_Allianz Asset Management companies excluded from global reporting of AE and ASE cluster as
Allianz Global Grading System is not applicable to them.
4_Liverpool Victoria General Insurance Group Limited, Guildford and Liverpool Victoria Insurance
Company Limited, Guildford are excluded from Allianz UK's data due to grading data
unavailability for PDP.
In accordance with the Allianz Group Remuneration Policy, internal
and external benchmarking is performed to ensure appropriateness
of (individual) remuneration and general pay levels. Allianz expects all
operating entities to follow the principles described in the
Allianz Group Remuneration Policy.
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Leadership Enablement: Allianz offers targeted health and well-
being training for people leaders, through both the #lead
program and other platforms to ensure managers are equipped
with the knowledge to sustain employee health and well-being
as well as to strengthen resilience in their teams.
Employee Feedback: Employees have the opportunity to give
once a year feedback on their health and well-being through
global surveys, such as Pulse surveys. For further information,
please refer to the section "Engaging with own workforce".
Focus Time: Meeting-free calendar days have been introduced to
provide most employees with time to focus on their work.
The minimum health requirements were monitored regularly and
reported to both management and employee representatives once a
year, which shows our commitment to the well-being of our global
workforce.
Per one
million
work hours
3.71
#
355
#
16,665
1_The data of reporting unit Allianz Partners Service is not included in cases of recordable work-
related ill-health and number of days lost to work-related injuries/fatalities/accidents/ill health.
2_Globally, where national legislation or local culture/norms do not prevent this.
In %
As of 31 December
2023
Employees entitled to take family-related leave (share of total
employees)
99.07
Employees that took family-related leave (share of entitled
employees)
Work-life balance
This section covers Flexible working options and the Family-related
leave topic.
Flexible working
Allianz offers a wide range of offerings. For us, hybrid working
combines the best of both worlds: the flexibility of mobile working with
the benefits of targeted collaboration and in-person connection.
Flexible work options are key for talent attraction and employee
engagement, while regular in-person touch points help us foster team
spirit, co-creation, and cross-team exchange.
1
847
The four Minimum Health Requirements are reinforced by the
"Agreement on Guidelines concerning Work Related Stress and
Minimum Health Requirements" between the Allianz SE and the
(European) SE Works Council of Allianz SE. It applies to Allianz SE and its
subsidiaries with registered offices in the Member States of the E.U., the
contracting states of the EEA, the UK, and Switzerland. All best endeavors
will be made to adopt the minimum health requirements across the
Allianz Group, where national legislation does not prevent this.
#
Being a parent and caring for family members are important
responsibilities. Our Allianz employees deserve support in fulfilling
these roles and keeping a positive work-life balance. Allianz is
committed to supporting parents and families by offering childcare
facilities, leisure activities, emergency assistance, and other family
services. Family-related leave is specific to countries and usually covers
maternity leave, paternity leave, parental leave, and carers' leave.
Allianz adheres to all statutory requirements in the countries we
operate in and aims to exceed those standards where possible and
appropriate.
To effectively manage OHS matters, most local Allianz entities
have furthermore implemented OHS management systems. They
include OHS risk and hazards assessments, dedicated action plans to
mitigate these risks as well as emergency actions. Internal inspections
take place frequently and progress in reducing and preventing health
issues and risks is assessed against targets on a regular basis. This
includes procedures to investigate work-related injuries, ill health,
diseases, and incidents. Our workforce is trained regularly to raise
awareness and reduce operational health and safety incidents.
The health and safety of our global workforce is measured via our
Work Well Index+ (WWI +) and other KPIs.
1_The following major exceptions apply: Unemployment benefits are not available for non-citizens in
Malaysia and Taiwan who are usually expats covered by their home countries' social welfare benefits. In
a few countries, unemployment benefits are excluded in case of self-termination of work contract, for
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example in Croatia or in Türkiye. In Singapore and Hong Kong unemployment benefits are generally not
part of the social security system.
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Work Well Index+: To track well-being globally, we refer to the
WWI+ index, which monitors the progress of health and well-being
throughout the organization. We also use pulse check surveys to
check in with employees during the year. For further information,
please refer to the section "Engaging with own workforce".
Regular monitoring of further health and safety indicators: Local
Employee Assistance Program providers perform quarterly
monitoring of additional indicators, which are reported to the
Allianz Board of Management on a semiannual basis. Finally,
CSRD-compliant KPIs, covering work-related injuries, ill health,
accidents, fatalities, and days lost (see table S1-14) are monitored
annually and serve as a point of reference for the health, safety,
and well-being of our global workforce.
Health and safety (S1-14)
As of 31 December
Number of fatalities related to work-related
injuries/ill health
Number of recordable work-related accidents
Rate of recordable work-related accidents
Cases of recordable work-related ill health¹
Number of days lost to work-related injuries/
fatalities/accidents/ ill health 1,2
Unit
2023
works best for their customers, their business, and their teams. The
flexible work offerings therefore differ in our operating entities but for
all of them customer centricity and customer needs are the north star.
We track the actual employee time that was spent working
outside the Allianz offices on a biannual basis and collect employee
feedback in our AES survey. The survey results show that flexible work
has been one of the positive drivers for employee engagement in
2023.
For further information on further flexible work options, please
refer to our People Fact Book 2023 on the Allianz company website.
Family-related leave
#
174
Pollution prevention and control: improve quality of air, water, and
land.
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Risk-based rewards for preventive actions taken by policyholders (2.1):
The regulator expects an insurance product to include risk-based
rewards for customers to take preventive actions in order to protect
themselves or their insured assets against climate change risks. Other
than for the previous criterion ("Provide incentives for risk-reduction),
differentiation only related to the location of a risk is not sufficient. We
define preventive actions as any specific measures that can be taken
by customers if they are suitable to reduce either the frequency or
severity of climate change related claims. They must be considered in
the product and be offered to all customers. Risk-based rewards must
be reflected in the technical price, and there has to be a direct relation
between the preventive measure taken by the customer, and the risk-
based reward granted. Hence, general deductibles which do not refer
to specific preventive measures or no claims discounts are not
sufficient.
The distribution strategy for such products covers measures to
ensure that policyholders are informed on the relevance of preventive
measures (2.2): The regulator sees adaptation to climate change risks
as an overall societal objective to which insurers and their customers
should contribute, since risk-prevention is a key lever for reducing the
overall economic burden. Thus, the distribution strategy must include
measures to ensure that customers (new and existing) are informed
about the preventive measures and the relevance of such preventive
measure that they could take. Information on the relevance of
preventive measures can be shared individually (e.g., through
customer specific risk assessment reports in commercial business) or in
general, which is appropriate for retail business (e.g., through
information in newsletters, regular contract related communication or
terms and conditions). It is also appropriate to briefly inform the
customers about the topic and direct them to more detailed
information, for instance on a company website.
Do no significant harm ("DNSH") - Climate change mitigation
The DNSH criterion defines which insurance activities related to
customers engaged in the fossil fuel value chain must not be classified
as sustainable (Taxonomy-aligned). We are taking a mainly
conservative approach and define the fossil fuel value chain
extensively as upstream (e.g., exploration, extraction), midstream (e.g.,
transport, storage, pipelines) or downstream (e.g., refinery, trading and
sales including gas stations) activities or related assets. Additionally,
we consider commercially used fossil fuel power plants to be part of
the fossil fuel value chain. Beyond that, the end-use of fossil fuels is not
in scope of this criterion (e.g., combustion engine vehicles or oil-fired
heating systems). Thus, the DNSH criterion is automatically fulfilled for
retail business, as private use is considered as end-use.
In our portfolio screening approach, we applied the International
Standard of Industrial Classification of economic activities (ISIC codes)
to identify policies which are not in line with the DNSH criterion as
defined above: The different ISIC codes have been classified as either
compliant with DNSH, not compliant with DNSH or to be assessed on
an individual customer level. We have screened our portfolios against
this internal classification system. As our commercial risks are allocated
to ISIC codes (or comparable national or internal classifications), we
could identify policies and revenues which do not comply with DNSH.
There are no further environmental objectives next to "climate
change mitigation" that insurance activities could significantly harm
according to the EU Taxonomy Regulation, meaning that an
assessment of further DNSH criteria is not applicable. These are still
indicated with a "Y" in the template "Taxonomy KPIs for non-life
underwriting" below.
Minimum Safeguards
Taxonomy-aligned activities needs to be carried out in compliance
with Minimum Safeguards with respect to the value chain (i.e., with
respect to policyholders in the insurance context). Minimum
Safeguards require a due diligence process which is aligned with UN
Guiding Principles on Business and Human Rights (UNGP) and OECD
Guidelines for Multinational Enterprises. This is ensured by our
Sustainability referral process governed by the Allianz Standard for
Reputational Risk Management (AS RRIM), which applies to insurance
transactions following a risk-based approach. For more information on
the Sustainability referral process, please refer to the Allianz
Sustainability Integration Framework, version 5.0 on the Allianz
company website.
Overall results of EU Taxonomy Screening
For the financial year 2023 we are reporting a relatively low share of
Taxonomy-aligned revenues. Risk-based rewards for preventative
actions and the respective advice to customers turned out to be the
most important aspects. We have been focusing on screening our
existing product portfolio, identifying gaps, working on immediate
actions to close gaps in existing products, and started developing and
implementing further new Taxonomy-aligned products.
Allianz's Sustainable Solutions
Changing customer expectations and demands as well as regulatory
evolution are modifying the role of the insurance industry and require
a dedicated strategy to manage the impact of sustainability in P&C
Business. The Principles for Sustainable Insurance published by the
United Nations Environment Programme Finance Initiative (UNEP FI)
outline a strategic approach where all activities in the insurance value
chain - including interactions with stakeholders - are performed in a
responsible and forward-looking way by identifying, assessing,
managing, and monitoring risks and opportunities associated with
environmental and social issues. The sustainability requirements aim
to reduce risks, develop innovative solutions, improve business
performance, and contribute to environmental, social, and economic
sustainability.1
1_Principles for Sustainable Insurance - United Nations Environment - Finance Initiative (unepfi.org).
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Against this background, we developed an enhanced Allianz
Sustainable Solutions framework. As a result, our overall approach for
assessing and classifying Sustainable Solutions was revised. The
former Sustainable Solution definition and its application were
replaced by the new Sustainable Solutions framework as of January
1st, 2023. This also enables us to report on Sustainable Solutions based
on the new Sustainable Solutions framework for the financial year
2023.
The Sustainable Solutions framework is based on regulatory
requirements (e.g., the EU Taxonomy Regulation) as an integral part.
However, it goes beyond and includes additional product elements
which contribute to ESG objectives beyond climate change adaptation
to support our customers in their transition.
Product design
We define a Sustainable (P&C insurance) Solution as an insurance
product or service that substantially contributes to climate change
adaptation and to one or more further environmental, social, or
governance objectives, without doing significant harm to any of the
other objectives, which is in line with the principles of Minimum
Safeguards and hence supports our customers in transitioning towards
an environmentally or socially sustainable way of doing business or
living.
Provide incentives for risk reduction (1.3): This criterion is based on
the fundamental understanding, that the insurer should protect itself
and set incentives for customers to protect themselves or their assets,
against the adverse effects of climate change. Therefore, it is
necessary, however sufficient, if the climate-related exposure is
considered in pricing as a price signal of risk (e.g., hazard zones) or in
terms and conditions such as deductibles or limits, that serve as a
differentiator for respective exposures.
C_Group Management Report
It is an integral part of our strategy to not only insure our
customers against risks, but also to support them in their challenges of
a world which is about to transition to a more sustainable way of living
and doing business. We aim to create real world impact through our
business activities and contribute to ESG objectives based on science
and in line with regulatory requirements and international
agreements. This is based on the understanding that property-
casualty (P&C) insurance can support multiple ESG objectives beyond
climate change adaptation. The role of the insurance industry is not
limited to the classic role as risk managers but goes beyond and
includes the public expectations to accelerate a fair and just transition
of economies and societies.
Therefore, we have established a comprehensive framework for
Allianz Sustainable Solutions, including guidelines, screening criteria
and definitions, a certification grid, governance, and defined processes
to safeguard us against greenwashing risks, provide strategic
guidance to explore business opportunities, and take corporate
responsibility for our planet.
Under the Allianz Sustainable Solutions framework, the Technical
Screening Criteria (Annex 2, 10.1, Commission Delegated Regulation
(EU) 2021/2139) (Climate Delegated Act) supplementing the EU
Taxonomy Regulation) serve as minimum requirements to qualify
products as sustainable. Simultaneously, the Technical Screening
Criteria are used as guidance for our product development with the
objective to increase the resilience of our insurance activities and
support our customers in building adaptive capacity.
In 2023, the first year of Taxonomy-alignment reporting, we have
been focusing on screening our existing product portfolio, identifying
gaps, working on immediate actions to close gaps in existing products,
and have started developing and implementing further new
Taxonomy-aligned products.
EU Taxonomy Regulation for non-life insurance
business: Underwriting of climate-related perils
For non-life insurance activities, the Climate Delegated Act has
established "climate change adaptation" as (the only) potential
substantial contribution to environmental objectives as laid out in the
EU Taxonomy Regulation.
The Climate Delegated Act and the Technical Screening Criteria
set forth therein predominantly expect insurance activities to
adequately reflect climate-related risks and support customers and
society in building resilience against the adverse effects of climate
change. It consequently reflects the traditional role of the insurance
industry as risk manager. Only the "do no significant harm" and
"minimum safeguards" criteria set additional requirements for
Taxonomy-alignment beyond the contribution to climate change
adaptation.
The EU Taxonomy Regulation does not impose business
restrictions or material requirements for insurance activities but
introduces disclosure obligations for the insurance Lines of Business
(LoBs) in scope. The disclosure of the proportion of Taxonomy-aligned
revenues allows for the comparison of companies and investment
portfolios, to channel capital flows towards Sustainable Investments.?
EU Taxonomy-eligibility
The eight LoBs of non-life insurance laid down in the Technical
Screening Criteria are in scope of the EU Taxonomy Regulation
("Taxonomy-eligible"), as the insurance products sold under these LoBs
have the potential to contribute to climate change adaptation. We
define all P&C LoBs laid down in Annex 2 section 10.1 of the Climate
Delegated as eligible and they have been included in the Taxonomy-
alignment screening. The template "Taxonomy KPIs for non-life
underwriting" below also includes our Taxonomy-eligible and
Taxonomy-non-eligible proportions for financial year 2022. Since
Taxonomy-alignment has been assessed for the first time by Allianz for
financial year 2023, the 2022 figures are not applicable for these lines
and marked as such.
EU Taxonomy-alignment
Taxonomy-alignment of an activity goes beyond Taxonomy-eligibility.
For non-life insurance business, it implies that the insurance activity
substantially contributes to climate change adaptation, does not
significantly harm the environmental objective of climate change
mitigation, is carried out in compliance with the minimum safeguards,
and complies with the Technical Screening Criteria. We have screened
our entire eligible non-life insurance portfolio under the Article 3
Taxonomy Regulation and the Technical Screening Criteria and are
reporting accordingly.
It is in the nature of new regulations that not all details are
specified, and a common understanding and application needs to be
developed across markets to achieve consistency and comparability.
In order to ensure a consistent application across all Allianz entities, we
have developed internal guidelines and also taken a conservative
approach, where screening criteria left room for interpretation. The
following illustrates those aspects that we deem to be the most
important and challenging:
1_Draft Commission Notice on the interpretation and implementation of certain legal provisions of the
Disclosures Delegated Act under Article 8 of the EU Taxonomy Regulation on the reporting of Taxonomy-
eligible and Taxonomy-aligned economic activities and assets (21 December 2023).
95
2_Further information on Sustainable Investments can be found in section "02.2" of the Group Sustainability
Report 2023 on the Allianz company website.
Annual Report 2023 - Allianz Group
Leadership in modeling and pricing of climate risks
State-of-the-art modelling techniques (1.1): Assessing and pricing risks
adequately is key for a sustainable and resilient insurance operation.
The Allianz approach to state-of-the-art pricing is the Technical Price
System as part of our Technical Excellence initiative. In the existing
Technical Price Certification (TPC), portfolios are screened on a regular
basis across the Allianz Group. A successful TPC requires (but is not
limited to), that the technical price is available at policy level. This
includes the best estimate of all future, expected costs of the risk
(including the expected ultimate loss) as a forward-looking scenario.
Both output from hazard mapping and NatCat risk models are
included in expected claims costs. Where and to the extent that a
portfolio meets our internal TPC requirements, we have concluded
that predicted costs of climate related hazards are properly reflected
in the Technical Price at best estimate.
We are regarding the EU Taxonomy Regulation in the broader context
of sustainable insurance solutions and are consequently reporting on
it in combination with our Sustainable Solutions framework.
To ensure compliance across the Allianz Group, the Sustainable
Solutions framework is codified in internal policies and applies as a
harmonized and mandatory framework for all Allianz P&C entities,
including a certification process for sustainable products and services.
Eligible objectives and suitable product elements have been
predefined. They were derived from the EU Taxonomy Regulation
where available¹ – and the United Nation Sustainable Development
Goals, and can be summarized as follows:
-
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Allianz's actions and measurements
The Sustainable Solutions framework incorporates material ESG
objectives into P&C decision-making and portfolio management
processes. We aim to shift our product portfolio towards sustainable
products by using the Sustainable Solutions framework as guiding
considerations in the product development process.
Allianz has always offered comprehensive insurance cover for
climate-related perils. Still, closing the insurance protection gap
remains a major challenge in many markets. To increase the
penetration rate of covers for natural catastrophes, our product
strategy is moving towards coverage for natural catastrophes per
default (with opt-out elements).
To manage climate-related risks adequately, we are continuously
improving our risk- and pricing-models by integrating the latest data
and information on climate change impacts through forward-looking
NatCat scenarios and global hazard maps. However, effective
adaptation to climate change does not only require adequate pricing
of risks, but also individual measures by customers. We have therefore
started considering preventative actions taken by the customer in our
products and pricing models. Living up to our role as a climate risk
manager, we are also integrating advisory services into our customer
communication and provide relevant information to customers, for
example, on how to build stronger resilience against climate-related
events.
-
In addition, we are committed to offering comprehensive
insurance products for low-carbon technologies such as battery
electric vehicles (BEV) and the related ecosystem - as well as for
renewable energy technologies, to support the transition of our
customers towards more environment-friendly solutions. For instance,
Allianz entities offer BEV insurance products, which meet the specific
needs of the new ecosystem such as range anxiety, comprehensive
coverage of accessory equipment, and coverage for battery disposal.
Within our commercial energy and construction business, we offer
insurance to cover the setup, installation, and operation of renewable
energy projects such as solar and wind farms, both onshore and
offshore.
Material ESG objectives are also considered in our claims
processes. We have started integrating environmental standards into
our claims processes by encouraging or incentivizing our customers,
car repair shops, and manufacturers to repair instead of replace or to
use refurbished parts, where possible. Moreover, we started increasing
our claims payments to our customers to not only rebuild damaged
assets such as buildings, but to use more sustainable or energy-
efficient building materials or elements (build back better), as well as
building more resilience against the adverse effects of climate change
(build back stronger).
Allianz's ambition
Our ambition is to be a trusted partner for our customers and investee
companies across different sectors in their transition to net zero, as
well as to support our customers in their transition to environment-
friendly choices.
The new Allianz Sustainable Solutions framework was launched
in January 2023 across all our entities. This includes qualitative targets
for the financial year 2023 for to the Board of Management and CEOS
of our operating entities to ensure the implementation of Sustainable
Solutions. To accelerate the journey in 2024, we have set quantitative
growth targets for to the Board of Management and CEOs of our
operating entities.
In our reinsurance lines, we initiated discussions with our clients on
their fossil fuel related exposures in order to support their net-zero
transition pathways.
As of 2024, our entities will continue to report internally on a regular
basis on the following KPIs:
Taxonomy-aligned revenues
Sustainable Solutions-certified revenues.
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2023
50.01
47.52
52.67
2_Draft Commission Notice on the interpretation and implementation of certain legal provisions of the
Disclosures Delegated Act under Article 8 of the EU Taxonomy Regulation on the reporting of Taxonomy-
eligible and Taxonomy-aligned economic activities and assets (21 December 2023).
Environmental objectives
1_The Allianz Sustainable Solutions framework applies to all P&C insurance LoBs.
As of January 2023, all newly developed products and services
must be assessed and classified under the Sustainable Solutions
framework in the product development process by our operating
entities. Results are validated by a dedicated function within our Group
Center Global P&C, which has the responsibility to approve or not
approve submitted products as a sustainable and in case of a positive
approval, issue a respective certification.
Climate change mitigation: avoid, reduce or remove GHG
emissions.
Sustainable use and protection of water and marine resources:
contribute to good status of water bodies.
Transition to a circular economy: promote durability, re-use and
recycling.
Protection, conservation and restoration of biodiversity and
ecosystems.
Social objectives
-
Encourage and expand access to insurance and services for
helpers or socially disadvantaged groups.
Foster socially responsible behavior or engagement.
In 2023, we generated € 3,026 mn revenues from certified Sustainable
Solutions in our P&C business. Hence, the Sustainable Solutions
framework contributes to our overall purpose: We secure your future.
Information on data sources for revenue disclosure
Data collection is conducted in the Solvency II P&C LoB reporting
infrastructure. The system is set up in SAP. Information is based on non-
consolidated LoB reporting.
Definition of premiums
In line with the requirements that are set forth by the EU Taxonomy
Regulation, Allianz follows the principle to use figures as premium
base that relate to financial reporting and are communicated
externally through Allianz financial statements - Total Business
Volume (TBV). TBV presents a measure for the overall amount of
business generated during a specific reporting period. As TBV by itself
does not represent a premium related to the insurance coverage (it
also includes fee and commission income), the following adjustment
has been performed: As fee and commission income are not directly
linked to the provision of insurance coverage, they are eliminated to
arrive at the coverage related premium figure.
This premium figure represents the required gross written
premiums level.
Determination of (retro)ceded premium share
For natural catastrophe events, the Allianz Group has a centralized
program in place that pools exposures from its subsidiaries through
internal reinsurance agreements. Allianz SE limits exposures in this
portfolio through external reinsurance. Subsidiaries of the
Allianz Group generally do not enter into individual external
reinsurance agreements for natural catastrophe events. Accordingly, a
breakdown into single Taxonomy-aligned products is not available, as
indicated in the template below.
The guidance on EU Taxonomy Reporting2 published by the EU
Commission in December 2023 states that insurance undertakings
should use those insurance premiums that only pertain to the coverage
of climate-related perils for the purpose of computing Taxonomy-
alignment. Hence, only the portion of the premium from Taxonomy-
aligned products related to the exposure stemming from climate
related perils could be reported as sustainable revenue. We applied
this guidance to calculate the share of Taxonomy-aligned revenues.
For our reinsurance contracts issued (third party), we prepared our
systems to report the entire premium of any treaty providing coverage
for climate-related perils for financial year 2023 reporting, based on
the prevailing market practice and interpretation of the EU Taxonomy
Regulation. With the new requirement to unbundle the premium into
solely climate risk related, our systems need further adaptation to
systematically allow this premium unbundling in the required quality
and could not be done in time for financial year 2023.
Ensure implementation into our business
Our Sustainable Solutions framework and its application have been
integrated into the binding Allianz Standard for P&C Underwriting
(ASU), which governs the rules and principles for P&C underwriting
within the Allianz Group and is an integral part of the overall Group
risk architecture as described in the Group Risk Policy.
In addition, as of January 2024, products or services may only be
labeled, advertised, or in any other way promoted as Sustainable
Solutions (or any other term that implies the sustainability of a solution,
such as "green" or "social"), if the product or service is certified under
our Sustainable Solutions framework.
Allianz's approach to Sustainable Solutions in the
Property and Casualty insurance business
EU Taxonomy for non-life insurance
On 21 December 2023, the EU Commission published a guidance
on Art. 8 EU Taxonomy Regulation. The document was assessed by
Allianz but could not be fully considered for the 2023 reporting.¹
Details about the implemented changes can be found in the
respective subchapters.
Age distribution¹
Share of employees < 30 years old
Share of employees 30-50 years old
Share of employees > 50 years old
Share of employees < 35 years old
2023
#
%
28,757
19.13
82,598
39,004
54.93
25.94
51,595
34.31
1_Age distribution is calculated based on active headcount, excluding, e.g., employees with a
dormant employment relationship (for example due to sabbatical leave, in military or civilian
service, or on parental leave).
Persons with disabilities
Allianz Functional Guidelines for DEI explicitly outline that we
prioritize the well-being of all our employees and work hard to ensure
that our processes and workplaces are equally accessible to everyone,
irrespective of their disability status.
Allianz Beyond, our employee network for disability inclusion,
currently has 12 local networks in place, with three local networks
launched in 2023. It focuses on raising awareness of disability inclusion,
identifying ways to make Allianz more accessible (physically and
digitally). It also aims at creating a safe space for employees to
disclose their disability and voice their workplace assistance needs in
order to perform at their best. And it promotes Allianz externally as an
attractive employer for people with disabilities.
Allianz has been a Valuable 500 member since 2020 and is
committed to increasing transparency on disabilities in the corporate
landscape through increased disclosure. As an Iconic Leader, Allianz
played a crucial role in the identification and definition of five Valuable
500 Disability Inclusion KPIs. These were announced at the World
Economic Forum in 2023 and cover five dimensions: Workforce
Representation, Goals, Training, Employee Resource Groups, and
Digital Accessibility. Allianz reports on the Valuable 500 Disability
Inclusion KPIs in our DEI Booklet 2023 on the Allianz company website
and is working with Valuable 500 to secure commitment from other
members to disclose Disability Inclusion KPIs and ultimately grant
people with disabilities more equity in the workplace.
Allianz has been a trusted partner of the Paralympic Movement
since 2006 and became the first international partner of the
International Paralympics Committee (IPC) in 2011. Through our
continuous support, we recognize the athleticism and professionalism
of Paralympians. Our efforts have a positive impact on career
As of 31 December
opportunities for people with disabilities, including through career fairs
for Paralympic and Olympic athletes, with tangible results, leading to
the hiring of 27 Paralympians and Olympians. For further information,
see also our People Fact Book 2023 on the Allianz company website.
Age distribution (S1-9.2)
2_Includes all executive positions (Allianz Global Executive Positions, Allianz Senior Executive
Positions, and Allianz Executive Positions).
3.46
74.04
25.96
Not reported as female or male¹
in Allianz Senior Executive (ASE) positions³
803
Male
579
Female
224
11.83
72.10
27.90
Not reported as female or male¹
in Allianz Executive (AE) positions³
5,750
Male
3,708
2,042
84.71
64.49
35.51
Female
Not reported as female or male¹
1_Comprises non-binary and not reported.
3_Allianz Asset Management companies excluded from global reporting of AE and ASE cluster as
Allianz Global Grading System is not applicable to them.
Allianz is committed to strengthening its inclusive workplace
culture for its entire global workforce, including employees with
disabilities. For more details regarding our local ambitions, please see
our DEI Booklet 2023 on the Allianz company website.
Strategic Workforce Planning
Allianz has implemented Strategic Workforce Planning (SWP) to
create transparency on upcoming workforce developments. SWP
compares workforce supply by cluster of job profiles (called Talent
Segments) against projected workforce demand over the next five
years. At Allianz, this is a structured yearly process that is integrated
into the annual planning cycle. The result goes far beyond providing
transparency on possible recruiting gaps. We are able to steer the mix
of roles that we need in our workforce in order to implement Allianz
strategies and fulfil our future vision. SWP provides a quantitative
assessment of the resources required for ongoing transformations and
indicates how our workforce can be equipped with the skills they need
to remain employable in the future.
Employees are encouraged to report concerns and have multiple
channels for doing so. These include via management, speaking
directly with Allianz Group Compliance, by e-mail, and anonymously
via a third-party solution provided by Business Keeper GmbH and
accessible via the intranet.
The same tool is also accessible to external parties on the Allianz
company website. Some operating entities provide employees with the
option to report via an ombudsman.
All reported incidents are assessed, documented, and managed
according to internal guidelines and with strict confidentiality. The
Allianz Group has specific procedures in place to ensure that no
retaliation measures are taken against whistleblowers; reflecting our
commitment to enable a healthy Speak Up culture within the company.
Retaliation measures are not accepted in any form.
Group Compliance runs an annual awareness campaign to
remind employees of the avenues available for reporting.
Objectives and actions: compliance/anti-corruption and bribery
matters
Topic
Compliance
Objectives
Continue to enhance the
effectiveness of local
compliance organizations by
enriching our compliance
reviews, to further bolster
the governance and
processes of underlying
compliance organizations
across our OEs.
Progress and actions 2023
2023 Compliance Review
Plan executed.
24
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EU Taxonomy Regulation
Regulatory background
The EU Taxonomy Regulation (Regulation (EU) 2020/852) is a "green"
classification system that translates the EU's environmental objectives
into criteria for determining whether an economic activity qualifies as
environmentally sustainable and the degree to which an investment is
environmentally sustainable. The EU Taxonomy Regulation came into
effect in 2020 and Allianz is reporting Taxonomy-eligibility for the third
year in a row; however, Taxonomy-alignment is reported from the
financial year 2023 onwards (described subsequently) only. The EU
Taxonomy Regulation intends to provide increased transparency for
stakeholders.
Anti-corruption training must be provided at least once every
three years to all employees.
Similarly, Allianz does not tolerate bribery and corruption.
Employees are strictly prohibited from directly or indirectly offering,
requesting, accepting, providing, paying, soliciting, promising,
authorizing or receiving anything of value (anything monetary or non-
monetary that provides a benefit of any kind) to or from any public
official or anyone in the private sector in order to obtain or retain
business or gain an improper personal or business advantage.
Zero tolerance applies regardless of who benefits from the fraud -
Allianz as a company, other internal parties (employees, tied agents,
intermediaries) or any third parties acting on behalf of Allianz. To
protect against fraud, we will take prompt and appropriate action
where necessary - against employees, others acting on behalf of
Allianz or third parties. This includes appropriately protecting customer
and third-party data.
Allianz has zero tolerance of fraud. We are committed to
complying with all applicable anti-fraud, anti-bribery, and anti-
corruption laws and regulations in all jurisdictions in which we operate.
This global transparency allows us to decide what to focus our
work on and customize solutions for up- and reskilling as well as
retention and recruiting. SWP currently covers approximately 85% of
our 2023 employee population. Global monitoring and steering using
SWP KPIs ensures the implementation of Strategic Workforce
Planning and maximizes its value within the business functions.
3rd Strategic Pillar 3: Brand and Society
Good working conditions along with equal treatment and equal
opportunities for all are the basis for the CSRD convergence approach
discussed in this Employee matters section. These subjects are an
integral part of our brand value and societal commitments, as
reflected in our ratings.
Our positive social impact is verified and acknowledged by
external certifications and global rankings (for further information,
please refer to Great Place to Work certification in the section
"Processes to engage with own workforce", EDGE certification in the
section "Fair remuneration", and Refinitiv in the section "Diversity,
equity, and inclusion (DEI)"). Beyond certifications and rankings, Allianz
is a member of the Valuable 500 and a trusted partner of the
International Paralympics Committee (for further information, please
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refer to section "Persons with disabilities"). Allianz is a member of the
World Economic Forum Good Work Alliance; for more information,
please refer to the Good Work Alliance website. We are committed to
human rights (for further information, please refer to the section
"Human Rights in own workforce"), the U.N. Charter, U.N. SDGs, as well
as our external certifications, rankings, and partnerships.
For further information on our social positioning, please refer to
section "Corporate Citizenship".
Female
Compliance/anti-corruption and
bribery matters
Concept and programs
Our Compliance Management System helps to ensure compliance
with applicable laws and regulations, and to promote a culture of
integrity in order to safeguard the company's reputation. We take a
proactive stance, working with organizations such as the Global
Insurance Chief Compliance Officers Forum to enhance our
understanding of compliance issues and to share best practices.
In 2021, the Compliance Assurance of Risks and Effectiveness
(CARE) program was initiated. In 2023, the Compliance Function
continued to develop the way it assesses Group and local Compliance
departments. Review procedures have been expanded to confirm
adequate compliance scope, ensure adequate skills to meet the scope,
and confirm compliance with global programs and local specificities.
While CARE is primarily a challenged self-assessment exercise, it is
reinforced with Compliance Reviews of operating entities that are
completed and coordinated by Allianz Group Compliance.
Compliance Reviews are completed on a risk-based, three-yearly
cycle.
Compliance Reviews are supplemented by Targeted Reviews,
which assess the implementation status and effectiveness of individual
programs such as Antitrust and Sales Compliance. This multi-faceted
review and confirmation strategy has several benefits. First, operating
entities are monitored more frequently and are engaged in more
holistic assurance activities. Second, frequent interactions with
operating entities provide additional opportunities to monitor, guide,
and if necessary - enforce remedial activities. Finally, people can
learn from local and Group best practices, which further reinforces our
compliance culture.
An online compliance management tool provides an overview of
issues detected during the above activities. Users are required to use
the tool to report and document actions taken to mitigate and follow
up on any issues identified.
The information gathered is the primary basis of reports to the
Group Board and the Allianz SE Supervisory Board's Audit Committee.
An Integrity Committee is chaired by Allianz Group Compliance. This
committee reviews all activities and issues related to misconduct
and/or violations of internal/external rules and regulations, and the
Allianz Group Code of Conduct infractions, including reports of actions
to follow up on whistleblowing cases.
As part of our Global Compliance Program, we follow
international standards and applicable laws in relation to corruption
and bribery, money laundering and terrorism financing, trade and
financial sanctions, capital markets, data privacy, customer protection,
antitrust, and other relevant compliance risk areas. We thoroughly
investigate allegations of violations of laws as well as of breaches of
Allianz-specific rules.
The Allianz Group Code of Conduct outlines the basic principles
and values that guide the everyday decisions and conduct of all
employees. The current version of the Allianz Group Code of Conduct
was approved by the Allianz SE Board of Management in 2020. New
joiners at Allianz are informed of their obligation to adhere to the
Allianz Group Code of Conduct. The key principles addressed by the
Allianz Group Code of Conduct and the accompanying training are
mutual respect, integrity, transparency, and responsibility.
This section describes the impact of ethics, responsible business, and
compliance matters on the Allianz Group's activities. Further, it
describes the impact of the Allianz Group's activities and relationships
on compliance. The concepts and achievements related to the
management of these impacts are described with a focus on the
compliance management system, anti-corruption, and bribery
matters. All compliance matters are overseen by Allianz Group
Compliance.
Performance management
83.31
Not reported as female or male²
Male
Female
Average training hours¹
As of 31 December
Average training hours per employee, broken down by gender
(S1-13.1)
To achieve our commitment to employee lifelong learning, Allianz
set the global target of a yearly minimum average of 43 hours of
training per employee by 2024. In 2023, our employees learned on
average for 50.01 hours, as reported in table "S1-13.1". Additionally, a
commitment to lifelong learning is included in the Board of Management
targets for 2024. To support strong performance in current and future
responsibilities, employee upskilling and development, we offer them
a minimum of one hour working time per week dedicated to training.
The training hours per employee metric is monitored on a
quarterly basis.
In addition to the global programs, all leaders are encouraged to
obtain the Allianz Leadership Passport, which is the "license" to be a
people leader at Allianz globally. The program sets minimum
standards for all people leaders, with an equal focus on hard and soft
skills, for our leaders to balance IQ and EQ. After obtaining their
Leadership Passport, leaders must refresh their passports on a yearly
basis by undertaking further training. Monitoring and reporting on the
take up of the #lead passport as well as the five global programs is
managed globally by Group People and Culture. We monitor usage
and learning consumption on a monthly basis.
C_Group Management Report
1_Calculated as a ratio of total training hours divided by active headcount.
2_Comprises non-binary and not reported.
4_Activity numbers 4.26 - 4.31 correspond to the following activities:
4.26: The undertaking carries out, funds or has exposures to research, development, demonstration and deployment of innovative electricity generation facilities that produce energy from nuclear processes with minimal waste from the fuel cycle.
4.27: The undertaking carries out, funds or has exposures to construction and safe operation of new nuclear installations to produce electricity or process heat, including for the purposes of district heating or industrial processes such as hydrogen production, as well as their safety upgrades, using best
available technologies.
4.28: The undertaking carries out, funds or has exposures to safe operation of existing nuclear installations that produce electricity or process heat, including for the purposes of district heating or industrial processes such as hydrogen production from nuclear energy, as well as their safety upgrades.
4.29: The undertaking carries out, funds or has exposures to construction or operation of electricity generation facilities that produce electricity using fossil gaseous fuels.
4.30: The undertaking carries out, funds or has exposures to construction, refurbishment, and operation of combined heat/cool and power generation facilities using fossil gaseous fuels.
4.31: The undertaking carries out, funds or has exposures to construction, refurbishment and operation of heat generation facilities that produce heat/cool using fossil gaseous fuels.
5_n.a. refers to information "not available".
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CAPEX
Templates 2-5 Taxonomy-aligned, -eligible but not taxonomy-aligned, and non-eligible activities (part II)
Allianz Group Reporting under the Taxonomy Regulation (for FY 2023)
Turnover
3_Due to data constraints, alignment quotas could not be allocated to climate objectives or nuclear/gas activities.
Nuclear and Gas relevant exposures
CCM+CCA
CCM 1,3,4
C_Group Management Report
2_CCA: Climate change adaptation.
97.73
0.8
0.02
0.0
0.02
0.0
0.02
Investments funding other Taxonomy-aligned economic activities other than nuclear & gas related economic activities
1 CCM: Climate change mitigation.
10.8
100.00
98.12
98.06
0.0
100.00
14.7
CCA2,3,4
13.5
97.54
10.5
CCM+CCA
Book
value
CCA 2,3,4
n.a.
n.a.
114.7
15.46
n.a.
n.a.
n.a.
n.a.
Investments funding Taxonomy-eligible, but not Taxonomy-aligned economic activities referred to 4.26
Investments funding Taxonomy-eligible, but not Taxonomy-aligned economic activities referred to 4.27
Investments funding Taxonomy-eligible, but not Taxonomy-aligned economic activities referred to 4.28
Investments funding Taxonomy-eligible, but not Taxonomy-aligned economic activities referred to 4.29
Investments funding Taxonomy-eligible, but not Taxonomy-aligned economic activities referred to 4.30
Investments funding Taxonomy-eligible, but not Taxonomy-aligned economic activities referred to 4.31
Investments funding other Taxonomy-eligible, but not Taxonomy-aligned economic activities other than nuclear & gas
related economic activities
0.3
0.1
0.04
0.02
0.01
0.0
0.01
n.a.
n.a.5
17.27
128.1
KPI figures in € bn
0.0
Book
%
value
%
Book
value
CCM 1,3,4
Book
value
%
Book
value
%
Book
value
%
Nuclear & gas related Taxonomy-eligible, but not Taxonomy-aligned economic activities relative to assets covered
by the KPI
%
0.01
0.3
2.15
741.9
n.a.
n.a.
n.a.
n.a.
0.2
0.03
0.2
0.03
0.0
0.01
0.0
0.01
0.3
0.04
n.a.
n.a.
n.a.
n.a.5
Book
value
Book
%
value
%
Book
value
Book
0.3
%
%
Book
value
Book
%
value
%
741.9
value
0.0
0.04
10.8
0.11
100.00
0.0
0.2
0.01
1.86
0.0
0.01
0.2
1.92
0.0
0.25
0.0
0.27
0.1
1.99
0.3
0.8
0.8
100.00
13.8
100.00
1.46
10.5
1.42
0.0
0.01
14.7
1.98
Investments funding other Taxonomy-aligned economic activities other than nuclear & gas related economic activities
Nuclear & gas related Taxonomy-aligned economic activities relative to total Taxonomy-aligned economic activities
Investments funding Taxonomy-aligned economic activities referred to 4.26
Investments funding Taxonomy-aligned economic activities referred to 4.27
Investments funding Taxonomy-aligned economic activities referred to 4.28
Investments funding Taxonomy-aligned economic activities referred to 4.29
Investments funding Taxonomy-aligned economic activities referred to 4.30
Investments funding Taxonomy-aligned economic activities referred to 4.31
13.5
11.0
100.00
10.7
100.00
0.0
100.00
15.0
1.82
0.01
17.22
0.01
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
37.16
275.7
n.a.
n.a.
n.a.
n.a.
35.92
n.a.
266.5
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
0.01
n.a.
n.a.
༤། ༤། ༤། ༩
0.01
0.1
n.a.
n.a.
n.a.
n.a.
37.20
276.0
n.a.
n.a.
n.a.
n.a.
35.93
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
0.0
0.04
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
0.3
n.a.
n.a.
n.a.
Regarding "Consumers and end-users" (ESRS S4), we identify
actual positive impacts through our Life/Health and Property-
Casualty retail, as well as our asset management business, by
providing coverage in relation to personal life and health,
strengthening protection against poverty, and fostering access
to services for clients to reach their financial goals. In addition,
securing data privacy and confidentiality of consumer data is
key for us. Financial implications may particularly arise in case
of policy changes.
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107
1 As regards proprietary investments, this disclosure was developed using, among other sources,
information from MSCI ESG Research LLC; for disclaimer visit https://www.msci.com/notice-and-
disclaimer.
Potential adverse impacts related to "Workers in the value
chain" (ESRS S2) and "Affected communities" (ESRS S3) may
materialize for our Property-Casualty commercial lines and
proprietary investments, given the large underwriting and
proprietary investment portfolios, in which potential cases of
insuring and financing activities that adversely affect workers
or communities' economic, social, civil, political, and cultural
rights may arise. In addition, the topic "Workers in the value
chain" (ESRS S2) is assessed to be material for Allianz from an
impact perspective regarding our suppliers (incl. service
providers relevant for our Property-Casualty retail business). In
accordance with the German Supply Chain Act, Allianz actively
engages with suppliers that are exposed to potential human
rights (or certain environmental) risks and expects that all
suppliers respect human rights and environmental regulations
in their own operations and alongside their supply chain.
As to risks, potential cases of adverse impacts regarding value
chain workers or affected communities in the value chain can
also lead to spill-over effects for Allianz.
-
The social topics alongside the value chain (ESRS S2-S4) are
assessed to be material for Allianz from an impact and financial
perspective.
We also see opportunities associated with our employees, in
that the practices mentioned above allow us to attract and
retain talent as a key success factor for our business.
In terms of financial materiality, risk drivers relate to policy
changes as well as skill shortage and retention risk, either
associated with demographic change, or by not meeting
employee expectations, especially compared to other
employers.
working time, paying above industry-average wages, and
fostering freedom of association and dialogue with our
employees. Furthermore, securing the confidentiality of
employee data is key for us. By implementing these and further
practices - including annual risk assessments regarding the
protection of human/employee rights in accordance with the
German Supply Chain Act - we continue to work to ensure
(potential) adverse impacts are prevented and reduced.
Positive impacts are created through Allianz practices on
employee engagement, training, learning, and personal
development, accompanied by strategic workforce planning.
We have a strong focus on diversity, equal treatment, and
inclusion as well as on talent acquisition and retention. The
health and well-being of our employees continues to be an
area of focus - our practices include offering flexibility in
The topic "Own workforce" (ESRS S1) is assessed to be material for
Allianz, as our employees are a key success factor for our business,
and as we are committed to creating a Great Place To Work®.
The materiality of nature-related risks for our own operations
and supply chain is related to potential supply chain
interruptions and implications for our resource inflows/use,
overall dependency on water, as well as potential policy
changes in water-stressed areas and regarding resource
outflow, especially (IT) waste, also with view to stakeholder
expectations.
The topic "Business conduct" (ESRS G1) is assessed to be material
for Allianz primarily from an own operations perspective.
Given our practices related to corporate culture health,
whistleblower protection, supplier management, and
prevention of corruption and bribery, we deem our impacts on
business conduct to be positive. In addition, we engage with
political stakeholders with regards to sustainability-related
aspects, and we actively engage in and support regulatory
developments. Potential adverse impacts may arise from our
proprietary investment portfolio, given exposures to sectors or
governments with higher likelihood of business conduct-
related issues.
As business conduct is also reliant on the proper behavior of
individuals, potential risks can never be fully eliminated. As a
result, the matters of ethics and responsible business are also
considered material from a financial perspective in our own
operations and value chain. In addition, cybersecurity is
assessed and tracked as one of the top risks faced by Allianz
in our own operations.
Opportunities are associated with enhancing our corporate
culture, with the aim of increasing risk awareness of our
employees and avoiding misbehavior. In addition, engaging
on sustainability-related matters with political stakeholders -
such as the net-zero transition or via our contributions to (EU)
standard-setting activities - is an opportunity for us to credibly
convey our sustainability ambition and strategy.
Nuclear & gas related Taxonomy non-eligible economic activities relative to assets covered by the KPI
Investments funding Taxonomy non-eligible economic activities referred to 4.26
Investments funding Taxonomy non-eligible economic activities referred to 4.27
Investments funding Taxonomy non-eligible economic activities referred to 4.28
Investments funding Taxonomy non-eligible economic activities referred to 4.29
Investments funding Taxonomy non-eligible economic activities referred to 4.30
Investments funding Taxonomy non-eligible economic activities referred to 4.31
Investments funding other Taxonomy non-eligible economic activities other than nuclear & gas related economic
activities
127.7
CCA 2,3,4
n.a.
n.a.
n.a.
n.a.
Given our provision of insurance coverage, the increase of
physical hazards - also induced through biodiversity loss
poses a risk for Property-Casualty, which also puts pressure on
insurability. This also applies for proprietary investments, given
potential nature-related risks for our portfolio. In addition,
there is also a potential short-term technology and resource
scarcity/price risk for Property-Casualty retail insurance
related to "Resource use and circular economy".
114.6
n.a.
n.a.
n.a.
n.a.
266.6
Annual Report 2023 - Allianz Group
For further information on how we address these material matters (e.g.
prevention, mitigation) and contribute to sustainability, please refer to
the previous sections of the Non-Financial Statement as well as the
Group Sustainability Report 2023 on the Allianz company website.
15.44
For Property-Casualty commercial lines and investments,
(potential) adverse impacts with respect to these topics can
materialize through insuring and financing pollution-, water
use-/resource use-intensive and biodiversity-affecting
activities, sectors, and governments. For our Property-Casualty
retail insurance portfolio, particularly "Resource use and
circular economy" is material, also giving rise to opportunities
associated with our sustainable claims initiative (repair instead
of replace).
(ESRS E4), and "Resource use and circular economy" (ESRS E5) -
are assessed to be material for Allianz, primarily from a general
value chain perspective.
The environmental topics beyond the topic of "Climate change"
which are nature-related - namely "Pollution" (ESRS E2), "Water
and marine resources" (ESRS E3), "Biodiversity and ecosystems"
our impact assessment will be regularly reviewed to reflect, for
example, evolving regulation and methodology as well as increasing
availability of portfolio-specific data.
As to risks, besides the broad range of risk assessments
established within the Allianz Group (e.g. Top Risk Assessment), a
dedicated in-depth risk assessment covering the CSRD topics
alongside the value chain was launched in the fourth quarter of 2023
to enhance the CSRD DMA going forward. Until this deep-dive is
completed and given that guidance for financial companies and
industry practice is still evolving, for 2023 reporting, all CSRD topics are
generally considered in scope due to potential risks (e.g. policy or
reputational risks). This means that we describe (potential) risks based
on a conservative initial approach, thereby reporting on topics broadly,
despite the majority of them being (currently) considered to be at most
designated "low materiality" from a risk perspective. In a similar vein,
When assessing impact materiality, we consider positive and
adverse actual and potential impacts caused by, contributed to, or
connected with the Allianz Group. Such impacts are assessed based on
the criteria scale, scope, remediation possibility, and likelihood. When
assessing financial materiality - namely, the materiality of risks and
opportunities for the Allianz Group - we take into account the
likelihood of occurrence and the magnitude of the potential financial
effects. In this context, we also consider our dependencies on the
continuing use of natural, human, and social resources. Financial
materiality is assessed in accordance with established Allianz-specific
risk assessment processes. For opportunities, the identification is tied to
our strategy, as the fact that a strategy to exploit opportunities exists is
a precondition for (likely) materialization.
The CSRD DMA is conducted alongside the Allianz Group's value
chain, thus covering own operations, supply chain, Life and Health
(re)insurance (Life/Health), Property and Casualty (re)insurance
(Property-Casualty), as well as our proprietary and third-party
investments business. It follows the double materiality principles as per
the CSRD/ESRS and the guidance provided by EFRAG in its Draft
Implementation Guidance on the materiality assessment from
December 2023. The CSRD DMA identifies material impacts, risks, and
opportunities that (may) arise in the short-, medium- or long-term, or a
mix thereof, following ESRS 1. In terms of topical scope, the CSRD DMA
covers both the sustainability matters addressed by the topical ESRS
as well as Allianz-specific sustainability matters not (sufficiently)
covered therein, based on the previous GRI materiality assessment.
CSRD Double Materiality Assessment (DMA) -
Process to identify and assess material impacts,
risks, and opportunities
Outlook
C_Group Management Report
The CSRD DMA is primarily based on desktop research and internal
experts' evaluations, with consideration of in-house and external data
where available and appropriate, depending on the area of the value
chain being assessed:
Annual Report 2023 - Allianz Group
4.30: The undertaking carries out, funds or has exposures to construction, refurbishment, and operation of combined heat/cool and power generation facilities using fossil gaseous fuels.
4.31: The undertaking carries out, funds or has exposures to construction, refurbishment and operation of heat generation facilities that produce heat/cool using fossil gaseous fuels.
5_n.a. refers to information "not available".
4.28: The undertaking carries out, funds or has exposures to safe operation of existing nuclear installations that produce electricity or process heat, including for the purposes of district heating or industrial processes such as hydrogen production from nuclear energy, as well as their safety upgrades.
4.29: The undertaking carries out, funds or has exposures to construction or operation of electricity generation facilities that produce electricity using fossil gaseous fuels.
4.26: The undertaking carries out, funds or has exposures to research, development, demonstration and deployment of innovative electricity generation facilities that produce energy from nuclear processes with minimal waste from the fuel cycle.
4.27: The undertaking carries out, funds or has exposures to construction and safe operation of new nuclear installations to produce electricity or process heat, including for the purposes of district heating or industrial processes such as hydrogen production, as well as their safety upgrades, using best
available technologies.
4_Activity numbers 4.26 - 4.31 correspond to the following activities:
3_Due to data constraints, alignment quotas could not be allocated to climate objectives or nuclear/gas activities.
2_CCA: Climate change adaptation.
1_CCM: Climate change mitigation.
105
0.1
For our own operations, supply chain, Life/Health, and Property-
Casualty retail business, we use desktop research as well as in-
house and external data, where available (e.g. GHG emissions),
tailored to the Allianz business context and complemented by
expert evaluations. In addition, for our Life/Health commercial
lines, a country analysis is performed to assess impacts regarding
potential business conduct and human rights issues.
(potential) adverse impacts in the reporting scope at this stage,
following a conservative approach.
For further information, please refer to the Group
Sustainability Report 2023 on the Allianz company website.
The materiality of climate change risks, especially in our value
chain, is mainly driven through physical climate-related risks,
with climate-related transition risks - such as policy and
litigation risks - increasing with longer time horizons.
Related opportunities are considered material for our
Property-Casualty lines and proprietary investments in that we
are supporting our clients in their low-carbon transition journey
in accordance with our Allianz sustainability strategy and
targets.
For Property-Casualty insurance and proprietary investments,
(potential) adverse impacts with respect to climate change
can materialize through insuring and financing carbon-
intensive activities or sectors, or government exposures with
high CO2 emissions (per capita). This is a current reflection,
while (potential) adverse impacts for the current portfolios are
expected to decrease over time as we work to implement our
net-zero transition plan. Regarding positive impacts in our
(re)insurance activities and investments, we focus on offering
insurance products in line with our Sustainable Solutions
framework and on enlarging our Sustainable Investments. For
further information, please refer to the section "02.1.1" in our
Group Sustainability Report 2023 on the Allianz company
website.
Adverse impacts in our own operations result from energy
usage of our operations and our carbon footprint (mainly
driven by this energy usage as well as by business travel), while
positive measures are in place via in-place practices of energy
savings and renewables usage.
-
-
For our Property-Casualty commercial lines and proprietary
investments, the CSRD DMA is data-driven with the aim to identify
(potential) impacts, risks, and opportunities related to the
portfolio(s) of the Allianz Group, leveraging internal and external
available data sources at country, sector, and investment level.
Sources include sector proxies for environmental impacts from the
Exploring Natural Capital Opportunities, Risks and Exposure
(ENCORE) data base, as well as, for investments, for example
principle adverse impacts on sustainability factors (SFDR PAIs) or
ESG sub-scores by MSCI. In addition, we conduct a country analysis
to assess impacts regarding potential business conduct and
human rights issues, similar to the analysis mentioned above for
our Life/Health commercial lines. The evaluations of these criteria
were enhanced by consulting a broad range of relevant business
experts, in order to ensure consideration of Allianz portfolio-
specific information, especially where there was of a lack of
(sufficiently granular) data. Allianz will continue to work on data
coverage and quality over the coming years. As to proprietary
investments, the first CSRD DMA focuses on General Account
investments. The inclusion of unit-linked investments into the CSRD
DMA will be revisited during the annual revision process. When
assessing impact materiality at portfolio level, we apply absolute
thresholds based on gross written premiums for our commercial
(re)insurance business and based on assets under management
for proprietary investments. This ensures that both multiple smaller
impacts and fewer larger impacts are considered in the
assessment. Similar to the approach for risks, we tend to include
-
Material (potential) impacts, risks, and opportunities for Allianz are
outlined below in more detail:1
C_Group Management Report
Annual Report 2023 - Allianz Group
106
The CSRD DMA conducted for the financial year 2023 suggests that
topics across all topical ESRS are generally material for the Allianz
Group, with the level of materiality, the number of material matters
considered therein, and the primary drivers of materiality alongside
the value chain differing across topics. For example, while the topic
"Climate change" (ESRS E1) is material from an own operations and
value chain perspective, the materiality of further environmental
topics (ESRS E2-E5) is generally associated with providing financing
and insurance to corporate clients. As to social and governance-
related topics, they are particularly relevant from our own operations
perspective (esp. ESRS S1, G1), while also playing a role in our value
chain (esp. ESRS S2, S3, S4). For our third-party asset management, we
have initiated a more detailed assessment, which will be reflected in
our reporting for 2024. In addition to the topics "Climate change" and
"Own workforce", "Business conduct" remains a key topic for the Allianz
Group. Also, our ongoing focus on customer experience alongside the
customer journey remains unchanged (ESRS S4), given its materiality
and relevance to the Allianz sustainability strategy.
CSRD DMA - Material impacts, risks, and
opportunities for Allianz
Given that regulatory requirements and market practice are
evolving, the assessment of impacts, risks, and opportunities for
our third-party asset management has been initiated based on
business experts' indicative qualitative assessment as a first step,
assessing the extent to which the asset management services
offered are associated with (potential) sustainability impacts, risks,
and opportunities. We will further develop our materiality
assessment process for the third-party asset management
business for the financial year 2024.
The topic "Climate change" (ESRS E1) is assessed to be material
from an own operations and value chain perspective.
CCM 1,3,4
0.2
CCA2,3,4
Y
Y
n.a.
n.a.
n.a.
Y
Y
Y
Y
Y
Y
n.a.
0.9
644.6
Minimum safeguards
Y/N
Y
Y
Y
Y
Y
Y
Y
Y
n.a.
0
0
Y/N
Y
Y
Y
Y
Y
n.a.
0
0
Y
Y
Biodiversity and
ecosystems
Y/N
C_Group Management Report
For non-financial undertakings
221.0
For financial undertakings
94.3
The proportion of exposures to financial and non-financial undertakings from non-EU countries not
subject to Articles 19a and 29a of Directive 2013/34/EU over total assets covered by the KPI³:
Value of exposures to financial and non-financial undertakings from non-EU countries not subject to
Articles 19a and 29a of Directive 2013/34/EU:
For non-financial undertakings
22.66
For non-financial undertakings
168.1
For financial undertakings
10.15
For financial undertakings
75.3
Template: The underwriting KPI for non-life insurance and reinsurance undertakings
Substantial contribution to climate change adaptation
Economic activities
A.1. Non-life insurance and reinsurance
underwriting Taxonomy-aligned activities
(environmentally sustainable)
Y/N
Circular economy
Water and marine
resources
Climate change
mitigation
Y/N
%
%
Proportion of
premiums 2022
Pollution
Y/N
Proportion of
premiums 2023
Absolute premiums
DNSH (Do Not Significant Harm)
A.2 Non-life insurance and reinsurance
A.1.2.1 Of which reinsured
(retrocession)
reinsurance activities
A.1.2 Of which stemming from
A.1.1 Of which reinsured
2023
Y
underwriting Taxonomy-eligible but not
environmentally sustainable activities (not
Taxonomy-aligned activities)
56,055.5
CAPEX
The weighted average value of all the investments of insurance or reinsurance undertakings that are
directed at funding, or are associated with Taxonomy-aligned economic activities relative to the value
of total assets covered by the KPI, with following weights for investments in undertakings per below:
Turnover
12.72
29.80
Ratios (relative to
total assets covered
by the KPI)
in %
Allianz Group proprietary investments
Taxonomy KPIs for insurance undertakings
Allianz Group reporting under the Taxonomy Regulation
Template: The proportion of the insurance or reinsurance undertaking's investments that are directed at funding, or are associated with, Taxonomy-aligned economic activities in relation to total investments - part I
C_Group Management Report
Annual Report 2023 - Allianz Group
100
Under the EU Taxonomy Regulation, our business strategy,
product design processes, and engagement with customers and
counterparties concept are being integrated into our business
activities, but are evolving and can be further developed as alignment
reporting matures and a market-based solution for fund look-through
is widely adopted.
In addition, a complete screening of our renewables portfolio was
not possible for United States based SPVs. The said investments are
100% eligible and likely have a high degree of alignment but have not
been considered as such for 2023 reporting due to inadequate data at
the time of reporting.
For investment funds, Allianz uses a fund look-through approach
where possible to report fund eligibility, leveraging data in the
Tripartite Template (TPT). However, look-through coverage of
companies was limited for 2023 due to limited adoption of the TPT and
the inability to obtain underlying investment eligibility. In addition, the
aforementioned data hierarchy approach is suppressed for investment
funds: if investment level look-through data is not available, eligibility
is assumed to be zero. This is because listed asset data for Allianz SE
has been collected for the underwriting KPI, which has a high eligibility
share of 79%. This is deemed inappropriately high for investment
funds. The conservative approach is designed to mitigate the risk of
reporting eligibility figures that may not be representative of the
underlying investments. Going forward, Allianz aims to expand the
look-through capability for investment funds.
The percentage and value of assets covered by the KPI relative to total investments of insurance or
reinsurance undertakings (total AuM). Excluding investments in sovereign entities¹:
The percentage of derivatives relative to total assets covered by the KPI²:
Monetary amounts
(€ bn)
Value of exposures to financial and non-financial undertakings not subject to Articles 19a and 29a of
Directive 2013/34/EU:
20.8
For financial undertakings
For non-financial undertakings
The proportion of exposures to financial and non-financial undertakings not subject to Articles 19a and
29a of Directive 2013/34/EU over total assets covered by the KPI³:
Additional, complementary disclosures: breakdown of denominator of the KPI
2.80 Value in monetary amounts of derivatives:
741.9
For 2023, Allianz is relying on reported information from investees for
the year 2022. For that year, financial institutions were not required to
report alignment figures; as a result, alignment quotas for the said
companies will be low or zero.
75.46
15.0
11.0
CCM+CCA
CAPEX
Turnover
1.49
2.02
The weighted average value of all the investments of insurance or reinsurance undertakings that are
directed at funding, or are associated with Taxonomy-aligned economic activities, with following
weights for investments in undertakings per below:
The monetary value of assets covered by the KPI. Excluding investments in sovereign entities:
Limitations of reported numbers
Finally, in 2023, the transition to a new accounting regime has
meant that most of Allianz's real estate investment held for
investments are measured at fair value, as opposed to cost less
accumulated depreciation. In particular, this has led to higher
valuations of the stated asset class compared to the previous year.
investments should also be 100 % eligible. The impact of this
reassessment leads to a small reclassification from non-eligible to
eligible for this asset class for 2023.
the two published environmental objectives of climate change
mitigation and climate change adaptation.
99
The eligibility and alignment share includes activities of controlled
subsidiaries, NFRD-related investments, and non-NFRD funds that
may have underlying NFRD investments or non-financial assets. For
controlled investments and mortgages with property as collateral,
Allianz has three main asset classes: real estate held for investment,
commercial and retail mortgages, and renewable investments.
Allianz's minority interest investments in investees are mostly through
publicly listed stocks and bonds. Eligibility for Allianz's controlled assets
has been determined for all six environmental objectives that are listed
in the EU Taxonomy Regulation. Alignment reporting is produced for
For investments, the EU Taxonomy Regulation currently limits the
scope of financial investments that can be considered as "Taxonomy-
eligible" to exposures to undertakings that are obliged to publish non-
financial information pursuant to Article 19a or 29a of Directive
2013/34/EU. This means that for Taxonomy reporting as an investor in
other undertakings, the Allianz Group can only consider reported data
of economic activities of investees in scope of the NFRD that are, thus,
obliged to disclose under Art. 8 of the EU Taxonomy Regulation. Where
the Allianz Group fully controls a non-financial investment - including
real estate – the scope is not limited in that regard.
Scope of application and methodology
EU Taxonomy for proprietary investments
23.3
100
As in 2022, all real estate asset classes including mortgages are
considered 100% eligible, with the addition in 2023 of joint ventures in
real estate. For further information, please refer to section "Changes to
proprietary investment reporting". Eligibility (and alignment) for
Allianz investments in investees is attained via reported data provided
by Moody's Analytics.
100
22.8
16,788.5
Total (A.1 + A.2 + B.)
underwriting Taxonomy-non-eligible
activities
B. Non-life insurance and reinsurance
76.7
76.3
73,488.6
The proportion of exposures to financial and non-financial undertakings subject to Articles 19a and 29a
of Directive 2013/34/EU over total assets covered by the KPI:
The focus of Taxonomy reporting for 2023 is alignment, which is a
step beyond eligibility. For an asset to be aligned, three steps are
necessary, which is first, the substantial contribution to one or more
environmental objectives in line with specific Technical Screening
Criteria, second, meeting the DNSH criterion (related to the other
environmental objectives) and third, meeting the minimum safeguards
criteria. Naturally, eligibility is a prerequisite for alignment.
For retail mortgage loans especially, Allianz uses a third-party
provider (SkenData) that employs an EU Taxonomy model to screen
real estate objects at a building level. The criteria used to assess
energy performance are equal to the ones used in energy
performance certificates. The DNSH criteria considers both the
exposure and vulnerability (after considering mitigating action).
Overall risk materiality is then determined for each building jointly
assessing the said factors. Only when such risk is classified as low or
medium, the real estate object can be considered Taxonomy-aligned.
The second change relates to the asset classes considered
relevant for eligibility. In 2022, Allianz considered investments in real
estate funds to be 100 % eligible on the basis that the vast majority of
the underlying investments were in real estate. In 2023, Allianz
determined that, by the same logic, its joint venture real estate
The first change relates to the treatment of cash and cash
equivalents. In 2022, Allianz considered these as non-eligible; however,
they were included as part of the denominator for KPI calculations.
After reassessing the EU Taxonomy Regulation, Allianz has determined
that cash and cash equivalents should not be included in the scope of
assets covered by the investment KPI. Annex X of the Disclosure
Delegated Act defines in-scope assets of insurance and reinsurance
undertakings as "all direct and indirect investments, including
investments in collective investment undertakings and participations,
loans and mortgages, property, plant and equipment, as well as,
where relevant, intangibles". Cash and cash equivalents are
specifically not included in the scope of assets covered by the
investment KPI. This view is affirmed by EIOPA's technical advice on key
performance indicators under Article 8 of the EU Taxonomy Regulation
of February 26, 2021 (EIOPA-21-184).
Changes to proprietary investment reporting
For Taxonomy reporting in 2023, there were some changes to how
Allianz presents its numbers.
For 2023, Allianz has followed the disclosure guidance for insurer
investment KPIs detailed in Annex IX/X of the Commission Delegated
Regulation (EU) 2021/2178 (Disclosure Delegated Act). As mentioned
earlier, the main changes regarding the Commission Delegated
Regulation (EU) 2022/1214 for 2023 are the introduction of alignment
KPIs (by turnover and CAPEX) and the separate tables required for
nuclear/gas exposures. The Annex X template has a number of
shortcomings, with the main one concerning its specification of the
non-eligible KPIs. Eligibility and alignment fractions are determined as
a percentage of the turnover or CAPEX denominators. As such, these
rows need to be made explicit in the template. In the absence of these
rows, the numbers have been provided in the footnotes for
completeness.
renewable investments. The total alignment KPI based on CAPEX is
determined in the same way.
The main alignment KPIs for 2023 include alignment based on
turnover and alignment based on CAPEX. For our financial
investments, each KPI is determined using only reported data for the
investee. If, for example, Allianz has an investment in a company with
a turnover alignment of 10% and the book value of the investment is
100, Allianz would report a turnover alignment balance of 10. And if
Allianz has covered assets of 200, then the final alignment share based
on turnover would be 10/200, or 5%. The total alignment based on
turnover additionally includes alignment shares from Allianz's own
investment real estate held for investment, retail mortgages, and
Calculation of KPIs
Alignment screening relates to the first two climate change
objectives, climate change mitigation and climate change adaptation.
Allianz has attained a relatively low alignment quota from screening
our own portfolio. The main constraints included lack of data
availability for commercial mortgages, and lack of comparative data
for real estate held for investment (typically for Energy Performance
Certificates determined on demand data that could not be
benchmarked to the top 15% of real estate stock).
In 2023, Allianz took the decision to de-scope third-party asset
management from EU Taxonomy investment reporting, in line with
current market practice and interpretation of existing regulatory
requirements for 2023 reporting.
In addition, as part of the 2023 Taxonomy reporting, Allianz is required
to disclose its exposure to the six nuclear and gas activities stipulated
in the Commission Delegated Regulation (EU) 2022/1214 (Annex III).
This disclosure seeks to elicit the portion of aligned investments that
are a result of the stated activities. For 2023, Allianz's exposure to
nuclear and gas activities is considered very small (around 2% of
aligned assets for turnover and CAPEX based on total alignment
figures). However, additional disclosure tables have been produced
with the limitation that some KPIs were unable to be calculated due to
lack of data at the climate objective level.
Nuclear and Gas Delegated act
Allianz complies with the EU Taxonomy Regulation by reporting
the respective Taxonomy KPIs. For investments, these numbers give us
a technical view on the current status of our investment portfolio with
regards to their Taxonomy-alignment. At this stage, the EU Taxonomy
investment criteria is not used for business or investment steering
purposes. However, we continue to monitor the evolution of the
Taxonomy Regulation to cover further sectors of the economy and
become a tool for portfolio steering in the future.
C_Group Management Report
Annual Report 2023 - Allianz Group
For investments, a look-through approach applies for investment
funds and unit-linked products. However, such reporting for the
financial year 2023 is limited due to lack of available data at issuer
level. For further information, please refer to section "Limitations of
reported numbers".
The Allianz Group uses only reported data for listed assets (no
estimated data is used). For single listed asset products, Allianz
employs a data hierarchy prioritizing data reported at issuer level. If
reported data is not available at issuer level, then parent-level data is
sourced. If that is unavailable, Allianz uses reported data from the
ultimate group parent entity. Taxonomy-alignment is considered only
for NFRD companies that publish reported data. The data hierarchy
logic is suppressed for investment funds. For further information,
please refer to section "Limitations of reported numbers".
Reporting about third-party asset management
Value of exposures to financial and non-financial undertakings subject to Articles 19a and 29a of
Directive 2013/34/EU:
€ mn
8.96
0.06
0.4
0.21
1.6
0.33
2.4
0.01
0.0
0.11
0.8
(1) Climate change mitigation
a) Transitional Activities
For non-financial undertakings
(2) Climate change adaptation
a) Enabling Activities
(3) The sustainable use and protection of water and marine
a) Enabling Activities
0.2
(4) The transition to a circular economy
0.03
1.87
Template: The proportion of the insurance or reinsurance undertaking's investments that are directed at funding, or are associated with, Taxonomy-aligned economic activities in relation to total investments - part III
Breakdown of the numerator of the KPI per environmental objective
Taxonomy-aligned activities - provided "do-not-significant-harm" (DNSH) and social safeguards positive assessment:
Turnover
CAPEX
Monetary
Monetary
Ratio
amount
Ratio
amount
Taxonomy-aligned activities
in %
in bn €
in %
in bn €
1.44
10.7
13.8
C_Group Management Report
a) Enabling Activities
a) Enabling Activities
The undertaking carries out, funds or has exposures to construction, refurbishment, and operation of combined heat/cool
and power generation facilities using fossil gaseous fuels.
No
6.
The undertaking carries out, funds or has exposures to construction, refurbishment and operation of heat generation
facilities that produce heat/cool using fossil gaseous fuels.
No
103
Annual Report 2023 - Allianz Group
C_Group Management Report
Templates 2-5 Taxonomy-aligned, -eligible but not taxonomy-aligned, and non-eligible activities (part I)
Allianz Group Reporting under the Taxonomy Regulation (for FY 2023)
Nuclear and Gas relevant exposures
KPI figures in € bn
Nuclear & gas related Taxonomy-aligned economic activities relative to assets covered by the KPI
Investments funding Taxonomy-aligned economic activities referred to 4.26
Investments funding Taxonomy-aligned economic activities referred to 4.27
Investments funding Taxonomy-aligned economic activities referred to 4.28
Investments funding Taxonomy-aligned economic activities referred to 4.29
Investments funding Taxonomy-aligned economic activities referred to 4.30
Investments funding Taxonomy-aligned economic activities referred to 4.31
Turnover
CAPEX
CCM+CCA
CCM 1,3,4
5.
(5) Pollution prevention and control
No
4.
(6) The protection and restoration of biodiversity and ecosystems
a) Enabling Activities
1_Total alignment quotas for turnover and CAPEX are not fully allocated to Climate Change Mitigation and Climate Change Adaptation objectives due to data limitations for investments in
undertakings.
Template 1: Nuclear and fossil gas related activities
Row
1.
2.
3.
Nuclear energy related activities
The undertaking carries out, funds or has exposures to research, development, demonstration and deployment of
innovative electricity generation facilities that produce energy from nuclear processes with minimal waste from the fuel
cycle.
The undertaking carries out, funds or has exposures to construction and safe operation of new nuclear installations to
produce electricity or process heat, including for the purposes of district heating or industrial processes such as hydrogen
production, as well as their safety upgrades, using best available technologies.
The undertaking carries out, funds or has exposures to safe operation of existing nuclear installations that produce
electricity or process heat, including for the purposes of district heating or industrial processes such as hydrogen
production from nuclear energy, as well as their safety upgrades.
Fossil gas related activities
No
Yes
Yes
The undertaking carries out, funds or has exposures to construction or operation of electricity generation facilities that
produce electricity using fossil gaseous fuels.
Annual Report 2023 - Allianz Group
b) Enabling Activities
3.2
17.27
Value of all the investments that are funding Taxonomy-eligible economic activities, but not
Taxonomy-aligned:
128.1
1_€ 5.1 bn of exposure has been allocated to sovereign exposures from funds with sovereign balances.
2_The difference in balance sheet exposure to derivatives is a result of allocating derivatives from fund balances (including from unit-linked based products) into this line (€ 5.7 bn).
3_Funds have been categorized as "financial" undertakings apart from real estate funds, which have been categorized as "non-financial".
4_Numbers in table based on turnover. Numbers based on CAPEX: € 276 bn and 37.20%. The balance for non-eligible share contains balances from NFRD companies where data was not available: € 212.1 bn for based on turnover, € 247.4 bn based on CAPEX.
5_Numbers in table based on turnover. Numbers based on CAPEX: € 114.7 bn and 15.46%.
The value of all the investments that are funding Taxonomy-eligible economic activities, but not
Taxonomy-aligned relative to the value of total assets covered by the KPI5:
101
C_Group Management Report
Template: The proportion of the insurance or reinsurance undertaking's investments that are directed at funding, or are associated with, Taxonomy-aligned economic activities in relation to total investments - part II
Allianz Group reporting under the Taxonomy Regulation - Allianz Group proprietary investments
Turnover
CAPEX
Ratio
in %
Additional, complementary disclosures: breakdown of numerator of the KPI
Annual Report 2023 - Allianz Group
The proportion of Taxonomy-aligned
exposures to financial and non-financial
undertakings subject to Articles 19a and
29a of Directive 2013/34/EU over total
assets covered by the KPI:
266.6
The value of all the investments that are funding economic activities that are not Taxonomy-eligible
relative to the value of total assets covered by the KPI4:
For non-financial undertakings
66.5
For financial undertakings
33.59
102
For financial undertakings
35.93
249.2
12.13
Value of exposures to other counterparties and assets:
90.0
85.62
Value of insurance or reinsurance undertaking's investments other than investments held in respect of
life insurance contracts where the investment risk is borne by the policy holders:
635.2
The proportion of exposures to other counterparties and assets over total assets covered by the KPI:
The proportion of the insurance or reinsurance undertaking's investments other than investments held in
respect of life insurance contracts where the investment risk is borne by the policy holders.
For non-financial undertakings
The value of all the investments that are funding economic activities that are not Taxonomy-eligible
relative to the value of total assets covered by the KPI:
Value of Taxonomy-aligned exposures to
financial and non-financial undertakings
subject to Articles 19a and 29a of Directive
2013/34/EU:
11.3
0.5
The proportion of the insurance or
reinsurance undertaking's investments
other than investments held in respect of
life insurance contracts where the
investment risk is borne by the policy
holders, that are directed at funding, or are
associated with, Taxonomy-aligned:
The proportion of Taxonomy-aligned
exposures to other counterparties and
assets over total assets covered by the KPI:
Value of insurance or reinsurance
undertaking's investments other than
investments held in respect of life
insurance contracts where the investment
risk is borne by the policy holders, that are
directed at funding, or are associated with,
0.98 Taxonomy-aligned:
For financial undertakings
0.48
Value of Taxonomy-aligned exposures to
other counterparties over total assets
covered by the KPI:
3.6
The proportion of the insurance or
reinsurance undertaking's investments
other than investments held in respect of
life insurance contracts where the
investment risk is borne by the policy
holders, that are directed at funding, or
are associated with, Taxonomy-aligned:
The proportion of Taxonomy-aligned
exposures to other counterparties and
assets over total assets covered by the KPI:
Value of insurance or reinsurance
undertaking's investments other than
investments held in respect of life
insurance contracts where the investment
risk is borne by the policy holders, that are
directed at funding, or are associated with,
1.94 Taxonomy-aligned:
14.4
0.43
Value of Taxonomy-aligned exposures to
other counterparties over total assets
covered by the KPI:
For financial undertakings
0.07
7.3
For non-financial undertakings
For non-financial undertakings
7.3
amount
in € bn
0.03
For financial undertakings
0.2
For financial undertakings
Value of Taxonomy-aligned exposures to
financial and non-financial undertakings
subject to Articles 19a and 29a of Directive
2013/34/EU:
Monetary
Ratio
in %
Monetary
amount
in € bn
For non-financial undertakings
1.52
0.98
The proportion of Taxonomy-aligned
exposures to financial and non-financial
undertakings subject to Articles 19a and
29a of Directive 2013/34/EU over total
assets covered by the KPI:
Annual Report 2023 - Allianz Group
C_Group Management Report
Operating profit
Operating profit by profit sources¹
Operating profit by profit sources
€ mn
74
CSM release¹
3_PVNBP before non-controlling interests.
to the chapter Reconciliations.
business volume growth for each of our business segments and the Allianz Group as a whole, please refer
2_Internal total business volume growth, excludes the effects of foreign currency translation as well as
acquisitions and disposals. For a reconciliation of nominal total business volume growth to internal total
statements.
1_For further information on Allianz Life/Health figures, please refer to note 5 to the consolidated financial
1_Selected business in Germany Life and Mexico, with PVNBP of € 3.1 bn and VNB of € 292 mn,
was reclassified from capital-efficient to unit-linked in 2023.
87
3,898
3,985
113
2023
566
Delta
(1,067)
Non-attributable expenses
71
(88)
(17)
onerous contracts³
Losses and reversals of losses on
(54)
244
(625)
(380)
(1,066)
Variances from claims & expenses²
512
Release of risk adjustment¹
(53)
5,020
4,967
2022
232
2023
Guaranteed savings & annuities
Total
6,124
5,277
Guaranteed savings & annuities
1,168
13,328
14,496
Protection & health
2022
(847)
Delta
30,702
31,385
(683)
Unit-linked without guarantee¹
16,806
15,378
1,428
(1)
Capital-efficient products¹
306
Total
66,216
51
1,110
1,161
267
477
743
(304)
2,079
67,281
1,775
Delta
2022
2023
Value of new business by lines of business
€ mn
Our VNB increased. This was primarily driven by increased margin in
guaranteed savings and annuities in France, as well as a large
reinsurance treaty at Allianz Reinsurance in protection and health. This
was partially offset by lower single premium sales in Germany Life in
capital-efficient products.
Value of new business (VNB)
1_Selected business in Germany Life and Mexico, with PVNBP of € 3.1 bn and VNB of € 292 mn,
was reclassified from capital-efficient to unit-linked in 2023.
1,065
Capital-efficient products¹
Unit-linked without guarantee¹
Protection & health
Operating investment result
1_Represents operating expenses divided by operating revenues.
137
41.8
41.8
Regional allocation
America
Europe
Asia Pacific
%
51.0
50.5
0.5%-p
%
%
30.9
(2.5)%-p
%
18.1
16.0
2.1 %-p
As of
As of
31 December
31 December
Type of asset class
2023
33.5
2022
Separate accounts
58.2
21.4
20.8
0.6%-p
Asset classes split
Fixed income
%
76.3
76.3
%
8.6
8.4
58.2
0.2%-p
%
10.1
10.3
(0.2) %-p
Alternatives
%
5.0
5.0
Investment vehicle split
Mutual funds
%
Multi-assets
Delta
Fixed income
1,648
115
3_Net flows represent the sum of new client assets, additional contributions from existing clients - including
dividend reinvestment - withdrawals of assets from and termination of client accounts, and distributions
to investors.
4_Market and dividends represents current income earned on the securities held in client accounts as well
as changes in the fair value of these securities. This also includes dividends from net investment income
and from net realized capital gains to investors of both open-ended mutual funds and closed-end funds.
Annual Report 2023 - Allianz Group
C_Group Management Report
Operating revenues
Our operating revenues decreased by 1.8% on a nominal basis. This
development was driven by lower net fee and commission income
mainly at AllianzGI, partially offset by higher other operating revenues,
primarily driven by higher net interest income. On an internal basis¹,
operating revenues increased by 2.4%.
Net fee and commission income declined, mainly driven by a
lower average third-party AuM level at both PIMCO and AllianzGI,
while we recorded higher performance fees predominantly at
PIMCO.
Net income
The increase of € 1.4 bn in our net income was mainly driven by an
increase in provision for litigation expenses for Structured Alpha²
booked in the prior year.
Shareholders' core net income
2_Assets under management include portfolios sub-managed by third-party investment firms.
Our shareholders' core net income increased by € 1.4 bn compared to
the previous year, a development in line with the net income.
Our operating profit decreased by 2.2% on a nominal basis, as the
decline in operating revenues exceeded a decrease in operating
expenses. On an internal basis¹, our operating profit remained
stable at last year's level.
The nominal decrease in administrative expenses stemmed from
AllianzGl.
Our cost-income ratio remained stable.
Asset Management business segment information
€ mn
2023
2022
Delta
Net fee and commission income
excl. performance fees
Present value of new business premiums (PVNBP) by lines of business
€ mn
Operating profit
1_For further information on our Asset Management figures, please refer to note 5 to the consolidated
financial statements.
1 Three-year rolling investment outperformance reflects the mandate-based and volume-
weighted three-year investment success of all third-party assets. For separate accounts and
mutual funds, the investment success (valued on the basis of the closing prices) is compared with
the investment success prior to cost deduction of the respective benchmark. For some mutual
funds, the investment success, reduced by fees, is compared with the investment success of the
median of the respective Morningstar peer group (a position in the first and second quartile is
equivalent to outperformance).
(1)%-p
1,580
67
Equities
Multi-assets¹
158
148
10
184
179
5
Alternatives
234
235
(1)
Total
2,224
2,141
82
1_The term "multi-assets" refers to a combination of several asset classes (e.g. bonds, stocks, cash,
and real property) used as an investment. Multi-asset class investments increase the
diversification of an overall portfolio by distributing investments over several asset classes.
Overall three-year rolling
investment
outperformance¹
%
78
79
%
890
AllianzGl
79.2
CSM release of € 4,967 mn is in line with expectation.
Net income
Our net income increased by € 471 mn, driven by the increase in the
operating profit, which was partly offset by a lower non-operating
result. The latter was largely driven by tax reclassification in Germany
and France, offset by lower income taxes. In addition, we recorded a
negative contribution from non-operating investment result in
Lebanon, mainly due to the recognition of an onerous contract
provision for the expected disposal loss from the sale of our Lebanese
business operations.
Shareholders' core net income
Shareholders' core net income increased by € 390 mn to € 3,595 mn,
which is in line with the development of the net income.
Core return on equity
Our core return on equity increased by 2.3 percentage points to 16.3 %,
mainly as a result of the increase in shareholders' core net income.
1 The purpose of Life/Health operating profit presentation is to explain movements in IFRS results by
focusing on underlying drivers of performance, consolidated for the Life/Health business segment.
114
Annual Report 2023 - Allianz Group
C_Group Management Report
IFRS 17 to IFRS 9 (impact was negative € 0.7 bn), and a one-off cost
correction in Germany (impact was negative € 0.8 bn). The latter had
no material impact on net CSM.
ASSET MANAGEMENT
Key figures Asset Management¹
2023
2022
Operating revenues
€ mn
8,086
8,234
(149)
Operating profit
€ mn
3,126
Key figures
3,198
Non-economic variances reduced CSM by €2,696 mn, mainly
driven by model and assumption changes and experience variances
(€ 1.2 bn), reclassification of investment business in Mexico from
Expected in-force return of € 3,022 mn is in line with an implied
risk-free rate of 4.4% plus an overreturn yield of 1.4%.
753
Other operating result
288
275
13
Operating profit
5,191
4,218
974
1_Please refer to note 6.1 to the consolidated financial statements.
2_Including reinsurance result.
Economic variances of € 500 mn were caused by favorable
impact from market movements (€ 0.9 bn), driven by higher equity
markets and lower interest rates, offsetting adverse impact from
weaker real estate. In addition, there was a negative foreign currency
translation impact of € 0.4 bn.
3_Excluding amortization of loss component. For further information, please refer to note 6.6 to
the consolidated financial statements. The figure there includes amortization of loss component.
4_For further information, please refer to note 8.3 to the consolidated financial statements. Non-
attributable expenses are the sum of non-attributable acquisition costs, non-attributable
administrative expenses and non-attributable settlement costs. The above view includes
insurance entities only.
Operating profit was strong at € 5,191 mn, up 23.1%, mainly due to
Allianz Life hedge alignment and normalization. The main drivers of
the increase in operating profit are described below:
Contractual Service Margin (CSM) release is the main source of
profit. The slight decrease was mainly driven by our United States and
Reinsurance business caused by a high release in 2022, and Mexico
from reclassification of investment business to IFRS 9 following a
contract modification. This was partially offset by France from higher
release on repriced protection and health products, and Italy from
profitable new business and better economics.
Release of risk adjustment decreased, mainly driven by an
assumption update.
Variance from claims and expenses improved, mainly from
France and Asia-Pacific, with improved claims experience in protection
and health.
Losses and reversals of losses on onerous contracts improved
primarily driven by prior year negative impacts with unprofitable unit-
linked and protection business in France, losses in Russia following the
war in Ukraine, as well as Taiwan savings, driven by favorable interest
rates.
Non-attributable expenses were stable.
Operating investment result increased significantly from an
extraordinary low result in the prior year. In the United States, we
recorded negative hedge impacts on variable annuities in 2022 that
turned positive as the hedging strategy of our United States business
has been aligned from IFRS 4 to IFRS 17 accounting. This was partially
offset by an adverse impact from discounting in protection and health
in France in line with interest rates evolution.
Other operating result increased slightly, mainly due to a
reclassification of the investment business to IFRS 9 in Mexico
following a contract modification and a one-off gain realized on
headquarter sale in Luxembourg. This was partly offset mainly by a
lower result of Investment Contracts as a result of reduced Assets under
Management in Italy.
Contractual service margin (CSM)
development
The CSM increased by 0.7%, compared to 31 December 2022, from
€ 52,227 mn to € 52,601 mn. The drivers of the € 375 mn increase were
as follows:
New business contribution was strong at € 4,515 mn, mostly
driven by the United States with € 1,320 mn, Germany Life with
€ 880 mn, Asia-Pacific with € 649 mn, Italy with € 496 mn, and France
with € 416 mn.
5_For further information, please refer to note 5 to the consolidated financial statements.
6_For further information, please refer to note 5 to the consolidated financial statements. Other
operating result represents the sum of Operating result from investment contracts, Operating
fee and commission result, and Operating other result.
(72)
Cost-income ratio¹
%
€ bn
Delta
In 2023, net inflows³ of total assets under management (AUM)
amounted to € 3.1 bn (2022: net outflows of € 96.3 bn) - and third-
party net inflows were € 21.5 bn (2022: net outflows of € 81.4 bn).
PIMCO contributed to this inflow development (€ 10.0 bn
total/€ 24.4 bn third-party AuM), while AllianzGI recorded net outflows
of € 6.8 bn in total AuM and € 2.9 bn in third-party AuM.
Positive effects from market and dividends 4 totaled € 130.0 bn. Of
this, positive effects of € 90.7 bn came from PIMCO and were mainly
related to fixed-income assets, while € 39.4 bn of positive effects came
from AllianzGl and were attributable to all asset classes, but mainly to
equities.
Negative effects from consolidation, deconsolidation, and other
adjustments amounted to € 1.2 bn.
Unfavorable foreign currency translation effects amounted to
€ 49.6 bn and were mainly related to PIMCO's AuM.
Third-party assets under management
Third-party assets under
management
Business units' share
Equities
As of
Composition of total assets under management
As of
31 December
2023
2022
Delta
€ bn
1,712
1,635
4.7%
PIMCO
%
78.6
31 December
Assets under management2
77
1,635
61.3
61.2
0.2%-p
Net income
€ mn
2,353
935
thereof: attributable to shareholders
€ mn
2,158
755
Shareholders' core net income
€ mn
2,150
759
1,418
1,404
1,391
Total assets under management as of
31 December
€ bn
2,224
2,141
82
thereof: Third-party assets under
management as of 31 December
€ bn
1,712
(0.6) %-p
Our PVNBP increased by 1.6% to € 67,281 mn. The increase is
predominantly driven by the United States due to higher sales in the
fixed indexed annuity business and Allianz Reinsurance, through a
large reinsurance treaty. Additionally, there were negative foreign
currency translation impacts of around € 0.9 bn, primarily from the
United States, Asia-Pacific, and Türkiye.
The shareholders' core net loss increased by € 238mn to
€ 1,062 mn compared to the prior year, mainly driven by the decrease
in our non-operating investment result.
Asia-Pacific: Total business volume decreased across the region,
except for Thailand and Indonesia, to € 5,872 mn, a 5.7% decrease, on
an internal basis. This was driven mainly by Taiwan (€ 380 mn) due to
lower unit-linked without guarantees business as a result of
contraction in the unit-linked market because of regulatory changes,
and China (€ 254 mn), mainly from a decrease in savings and
annuities.
Total business volume
On a nominal basis, we recorded a rise of 8.4% in total business
volume compared to the previous year.
This included unfavorable foreign currency translation effects of
€2,611 mn² and positive (de)consolidation effects of € 671 mn. On an
internal basis³, our total business volume increased by 11.2%. This was
driven by a positive price effect of 6.9%, a positive volume effect of
4.0%, and a positive service effect of 0.3%.
Most of our operations contributed positively to internal growth, there
were no significant negative contributions. The following entities
contributed positively to internal growth:
Allianz Partners: Total business volume increased to € 9,272 mn,
an internal growth of 12.7%. This was mainly driven by favorable
volume effects in our health business as well as in our travel insurance
business.
AGCS: Total business volume increased to € 12,245 mn, an
internal growth of 7.1%, driven by positive volume and price effects.
Germany: Total business volume went up 6.6% on an internal
basis, totaling € 12,400 mn. This was mainly caused by price increases,
predominantly from motor and property business.
Türkiye: Total business volume amounted to €1,419 mn - up
109.1% on an internal basis. This development is driven by strong price
increases due to the hyperinflationary environment and to a lower
extent volume effects, predominantly in the health business.
Operating profit
Operating profit
€ mn
2023
2022
Operating insurance service result
Operating investment result
Operating fee and other result
Operating profit
4,242
4,298
2,748
2,432
Delta
(56)
316
(81)
97
(178)
6,909
6,827
4_Represents the total of claims and benefits, operating acquisition and administrative expenses
including non-attributable acquisition and administrative expenses, and the reinsurance result,
divided by insurance revenue.
82
2_Represents claims and benefits and the reinsurance result, divided by insurance revenue.
3_Represents operating acquisition and administrative expenses including non-attributable
acquisition and administrative expenses, divided by insurance revenue.
Combined ratio4
3,357
82
917
thereof: attributable to shareholders
€ mn
4,154
3,251
Shareholders' core net income
€ mn
4,421
3,750
Loss ratio²
%
69.3
68.4
903
671
0.9 %-p
%
24.6
%
93.8
24.9
93.3
(0.3)%-p
0.6%-p
Expense ratio³
1_Total business volume in Property-Casualty comprises gross written premiums and fee and
commission income.
4,274
Our operating profit increase was due to a strong operating
investment result, partly offset by a decrease in our insurance service
result as well as in our operating fee and other result.
contribution from our run-off result was partly offset by an
improvement in both our accident year loss ratio and our expense
statements.
2_Based on average exchange rates in 2023 compared to 2022, and based on spot rates in countries with
hyperinflation (Türkiye, Argentina, Lebanon).
3_Internal total business volume growth, excludes the effects of foreign currency translation as well as
acquisitions and disposals. For a reconciliation of nominal total business volume growth to internal total
business volume growth for each of our business segments and the Allianz Group as a whole, please refer
to the chapter Reconciliations.
4_Represents the loss ratio excluding the net result of the previous year claims (run-off).
111
Annual Report 2023 - Allianz Group
C_Group Management Report
The main operation weighing on the development of our accident year
loss ratio:
Germany: 0.8 percentage points. This was primarily driven by a
high level of claims from natural catastrophes in 2023.
Our run-off ratio¹ reduced to 3.2% - compared to 4.2% in 2022, in line
with expectations. Most of our operations contributed positively to our
run-off result.
Acquisition and administrative expenses amounted to € 16,893 mn in
2023, compared to € 15,934 mn in 2022. Our expense ratio improved
by 0.3 percentage points to 24.6%, driven by the acquisition cost ratio.
Operating investment result
€ mn
Operating fee and other result
€ mn
2023
2022
Delta
Fee and commission income
Other income
2,534
2,391
143
Present value of new business
premiums (PVNBP)³
1_For further information on Property-Casualty figures, please refer to note 5 to the consolidated financial
Despite our strong insurance revenue growth, our operating
insurance service result decreased slightly due to an increase of our
combined ratio by 0.6 percentage points to 93.8%. A lower
AGCS: 0.2 percentage points. The biggest driver was a lower
level of large losses in 2023 compared to the previous year.
recovery.
ratio.
Operating insurance service result
€ mn
Insurance revenue
2023
68,757
2022
63,963
Delta
4,794
Claims and benefits including
reinsurance result
Acquisition and administrative
expenses
(47,629)
(43,735)
(3,895)
(16,893)
(15,934)
(959)
Other insurance service result
Operating insurance service result
7
4
3
4,242
4,298
(56)
Our accident year loss ratio 4 stood at 72.5% - an improvement of
0.1 percentage points compared to the previous year. The impact of
claims from natural catastrophes on our combined ratio increased by
0.6 percentage points to 3.4%.
Leaving aside losses from natural catastrophes, our accident year
loss ratio improved by 0.7 percentage points to 69.1%. This was mainly
due to a positive discounting impact of 2.9%, a change of
1.2 percentage points compared to the previous year due to the high
interest rate environment. This positive effect was, however, partially
offset by higher claims inflation, in particular in retail business.
Most of our operations contributed positively to the development of
our accident year loss ratio. The main positive contributors were:
Brazil: 0.3 percentage points, driven by a business profitability
France: 0.2 percentage points, mostly due to a lower level of
large losses in 2023 compared to the previous year.
91
€ mn
6,827
2023
€ mn
161,700
2022
153,324
€ mn
14,746
13,814
€ mn
9,032
6,856
thereof: attributable to shareholders
€ mn
8,541
6,421
Delta
8,377
931
2,176
2,120
Shareholders' core net income 2,3
€ mn
9,101
6,984
Solvency II capitalization ratio
%
206
201
Net income²
Core return on equity
Operating profit²
Key figures Allianz Group¹
C_Group Management Report
BUSINESS ENVIRONMENT
Economic environment 20231
In economic terms, 2023 provided a few surprises: primarily, the
resilience of the U.S. economy. The failure of the predicted recession to
materialize was mainly due to U.S. consumers, who remained keen to
consume thanks to a robust labor market and excess savings
accumulated during the pandemic. As many companies had also
secured the previous low interest rates for the long term, the
turnaround in interest rates was not yet fully reflected in corporate
balance sheets. The bottom line was relatively strong growth of 2.5%;
at the same time, inflation fell sharply to 4.1% (annual average).
The expected upturn in China following the reopening of the
economy after the long COVID-19 lockdowns turned out to be short-
lived. Structural weaknesses - particularly the challenging situation in
the real-estate market quickly regained the upper hand and
dampened sentiment. Nevertheless, the Chinese economy grew by
5.2% in 2023, although this was a rather modest development
compared to previous years. Finally, the eurozone recorded weak
growth of only 0.5%; at the same time, inflation remained at an annual
average of over 5%, although it fell below 3% again at the end of the
year. This weak growth was mainly due to developments in Germany,
where the economic output fell by 0.3% as a result of the energy price
shock. Global economic growth slowed to 2.7%, remaining only slightly
below the pre-pandemic average. The fears of recession stoked at the
beginning of 2023 did not materialize.
The interest rate turnaround remained the dominant topic in the
financial markets, with the focus increasingly shifting to the question of
the end-of-interest-rate-hike cycle. In fact, the U.S. Federal Reserve and
the European Central Bank conducted their last interest rate hikes for
the time being in July and September, respectively. In 2023, the key
interest rates in the United States rose by 100 basis points to 5.5%, and
in the eurozone by 200 basis points to 4.0% (deposit rate). Despite this
fundamentally restrictive monetary policy, the end-of-interest-rate-
hikes and the expectation of future interest rate cuts led to strong price
gains and optimism in the stock markets. U.S. equities (S&P 500) rose
by 24% and even German equities (DAX) increased by 20% - despite
the shrinking economy. A similar trend was also observed in
government bond yields. Contrary to the further rise in key interest
rates, yields on German government bonds fell by 53 basis points to
2.0%; U.S. government bonds remained virtually unchanged at 3.9%.
Business environment 2023 for the
insurance industry
Inflation remained the defining issue for the insurance industry in 2023.
Even though consumer price inflation slowed, claims inflation
remained high, not least due to rising wages. This development had a
negative impact on underwriting results in property and casualty
insurance. Higher repair costs were also a factor – in addition to the
climate change-related increase in damage events - that pushed
insured losses from natural disasters above the USD 100 bn mark for
the fourth year in a row.
The interest rate level was generally higher, which resulted in rising
investment income for insurers from new investments and
reinvestments. At the same time, however, this also intensified
competition in the life business: simple investment products such as
term deposits were once again able to score points with savers, which
had a particularly negative impact on the single premium business.
However, the feared wave of life policy lapses did not materialize,
insurers' business remained stable.
In 2023, two familiar topics also became increasingly urgent:
digitalization and sustainability. The breakthrough of generative
artificial intelligence took the digitalization of business processes -
especially the customer interface - to a new level. In terms of
sustainability, insurability became a particular focus. Increasing
natural hazards mean that some risk areas are no longer insurable at
affordable prices. Some insurers in the United States have already
responded by discontinuing new business in certain lines of business.
In the property-casualty sector, we observed strong premium
growth in some areas in the reporting year, although this was primarily
due to rising prices: all insurers had to increase premiums in response
to the persistent claims inflation. Nevertheless, underwriting results
remained under pressure in some divisions, like motor. Investment
income also increased further due to higher yields.
In the life sector, premium development was much more subdued.
There were also very large differences between the markets due to
diverging market and product structures. In general, however, demand
for risk products remained strong. Following the end of the pandemic,
the topic of old-age provision is once again attracting more attention
from consumers. As in property and casualty insurance, the sector has
benefited from higher investment returns.
Business environment 2023 for the
asset management industry
The asset management industry has faced considerable volatility in
the capital market over the past 12 months. The key drivers for this
were surging inflation and rapidly changing interest rates,
compounded by banking turmoil and geopolitical upheaval. Another
relevant change is the structural shift towards CO2-neutral business
models, bringing with it a requirement for new investment solutions.
Stock markets rose, with the MSCI World Index up by 23.8% in
2023. For bonds, active management demonstrated its value for
achieving returns against the backdrop of rapidly changing interest
rates. Although active investments still account for most of the assets
under management, growth in passive and alternative investments
continued in 2023. Besides the focus on CO2 emissions and the
ongoing growth in ESG-oriented offerings (ESG = Environment, Social,
Governance), digitalization with the application of artificial
intelligence (AI) and other technologies is becoming increasingly
important. Al, for example, is creating new opportunities when it comes
to analyzing large and unstructured sets of data. Furthermore, Al is
finding its way into supporting operational efficiency via innovative
forms of automation. Client satisfaction remains a high priority for the
asset management value chain as a whole.
1_At the date of the publication of this report, not all general market data for the year 2023 used in this
chapter was final. Also, please note that the information provided in this chapter is based on our
estimates.
109
Annual Report 2023 - Allianz Group
C_Group Management Report
EXECUTIVE SUMMARY OF 2023 RESULTS
Key figures
Total business volume¹
Net income
%
12.7
Effective 1 January 2023, the Allianz Group reorganized the structure
of its insurance activities to reflect the changes in the responsibilities of
the Board of Management. The insurance activities in Iberia & Latin
America have been included in the reportable segment Global
Insurance Lines & Anglo Markets, Iberia & Latin America, Middle East
and Africa. Greece was moved into the reportable segment Western &
Southern Europe, Allianz Direct and Allianz Partners. Previously
reported information has been adjusted to reflect this change in the
composition of the Allianz Group's reportable segments.
Additionally, some minor reallocations between the reportable
segments have been made.
Other parts of the Group Management
Report
The Group Management Report also includes the following sections:
Corporate Governance Statement and
Takeover-Related Statements and Explanations.
1_For further information on the Allianz Group figures, please refer to note 5 to the consolidated financial
statements. The financial results are based on the new IFRS 9 (Financial Instruments) and IFRS 17
(Insurance Contracts) accounting standards, which have been adopted as of 1 January 2023.
Comparative periods have been adjusted to reflect the application of these new accounting standards.
110
2_Internal total business volume growth, excludes the effects of foreign currency translation as well as
acquisitions and disposals. For a reconciliation of nominal total business volume growth to internal total
business volume growth for each of our business segments and the Allianz Group as a whole, please refer
to the chapter Reconciliations.
3_For further information on shareholders' equity, please refer to the Balance Sheet Review.
4_Including the application of transitional measures for technical provisions, the Solvency II capitalization
ratio amounted to 229 % as of 31 December 2023. For further information, please refer to the Risk and
Opportunity Report.
Annual Report 2023 - Allianz Group
C_Group Management Report
PROPERTY-CASUALTY INSURANCE OPERATIONS
Key figures
Key figures Property-Casualty¹
2023
2022
Total business volume¹
€ mn
76,531
70,613
Delta
5,918
Operating profit
€ mn
6,909
Recent organizational changes
16.0
Other information
Our shareholders' equity³ increased by € 4,062 mn to € 58.5 bn,
compared to 31 December 2022. This increase was mainly driven by
the net income and positive net OCI, partly offset by the dividend
payout and share-buy-back program. Over the same period, our
Solvency II capitalization ratio increased to 206 %4.
Core earnings per share
€
22.61
16.96
Core diluted earnings per share
€
22.59
16.87
2,117
5%-p
3.3 %-p
5.65
5.72
1_Total business volume in the Allianz Group comprises: gross premiums written as well as fee and
commission income in Property-Casualty; statutory gross premiums written in Life/Health; and
operating revenues in Asset Management.
2_The Allianz Group uses operating profit, net income and shareholders' core net income as key
financial indicators to assess the performance of its business segments and of the Group as a
whole.
3_Presents the portion of net income attributable to shareholders before non-operating market
movements and before amortization of intangible assets from business combinations (including
any related income tax effects).
4_Figures as of 31 December. Figures exclude the application of transitional measures for
technical provisions.
5_Represents the ratio of shareholders' core net income to the average shareholders' equity at the
beginning and at the end of the year. Shareholders' core net income is adjusted for net financial
charges related to undated subordinated bonds classified as shareholders' equity. From the
average shareholders' equity, undated subordinated bonds classified as shareholders' equity,
unrealized gains and losses from insurance contracts and other unrealized gains and losses are
excluded.
6_Calculated by dividing the respective period's shareholders' core net income, adjusted for net
financial charges related to undated subordinated bonds classified as shareholders' equity, by
the weighted average number of shares outstanding (basic core EPS).
7_From basic core EPS, the number of common shares outstanding and the shareholders' core net
income are adjusted to include the effects of potentially dilutive common shares that could still
be exercised. Potentially dilutive common shares result from share-based compensation plans
(diluted core EPS).
Earnings summary
Management's assessment
Our total business volume increased by 8.0% on an internal basis²,
compared to the previous year. This was mostly driven by our Property-
Casualty business segment due to positive price effects and volume
effects, from many entities including Allianz Partners, AGCS, and
Germany. The Life/Health and the Asset Management business
segments also recorded positive internal growth.
Our operating profit increased by 6.7% in comparison to 2022.
This was mainly due to a higher operating investment result from our
United States operations in the Life/Health business segment. Our
Property-Casualty business segment recorded a solid operating profit
driven by a higher operating investment result; this was partly offset by
a lower operating fee and other result as well as the insurance service
result. Operating profit from our Asset Management business segment
declined slightly, mainly as a result of unfavorable foreign currency
translation effects.
Our operating investment result increased by € 1,025 mn to
€ 4.8 bn, largely driven by the United States due to an accounting
mismatch in the prior year. In addition, in our Property-Casualty
business segment we recorded higher interest and similar income
mostly due to higher interest rates.
Our non-operating result improved by € 1.0 bn to a loss of
€ 3.2 bn as the prior year result was negatively impacted by the
increase in the Structured Alpha provision. In the current year, we
recorded lower non-operating net investment income.
Income taxes decreased by € 259 mn to € 2.5 bn, and the
effective tax rate decreased to 22.0% (29.1%), due to a more
favorable profit mix, tax benefits from write-up of deferred tax assets
on tax losses, higher tax-exempted income, and the absence of non-
recurring items.
The increase in net income was largely driven by an increase in
the provision for litigation expenses for Structured Alpha booked in the
first quarter of 2022, higher operating profit, and lower income taxes.
Shareholders' core net income was strong at € 9.1 bn.
For a more detailed description of the results generated by each
individual business segment (Property-Casualty insurance operations,
Life/Health insurance operations, Asset Management, and Corporate and
Other), please consult the respective chapters on the following pages.
(52)
39
(2,353)
€ mn
Key figures Corporate and Other¹
Key figures
CORPORATE AND OTHER
C_Group Management Report
Annual Report 2023 - Allianz Group
116
2_For further information on Structured Alpha, please refer to note 8.13 to the consolidated financial
statements.
1 Operating revenues/operating profit adjusted for foreign currency translation and (de-)consolidation
effects.
(72)
3,198
3,126
Operating profit
77
(5,036)
(4,959)
Operating expenses
77
(5,036)
(4,959)
expenses
excluding acquisition-related
Administrative expenses (net),
2023
(149)
2022
Operating investment result
(2,547)
(835)
(1,361)
thereof: attributable to shareholders
(543)
(842)
(1,385)
Net loss
66
(540)
(474)
Operating result
42
307
349
result
Operating fee and commission
(7)
31
436
(1,282)
(1,289)
Operating administrative expenses¹
467
Delta
Shareholders' core net loss
8,234
Operating revenues
Core return on equity²
%
16.3
14.0
2.3 %-p
Value of new business (VNB)³
€ mn
3,985
3,898
Contractual service margin (CSM)4
€ mn
52,601
52,227
375
87
1_Total business volume in Life/Health comprises statutory gross premiums written.
2_Effective 2023, core return on equity represents the ratio of shareholders' core net income to the
average shareholders' equity at the beginning and at the end of the year. From the average
shareholders' equity, unrealized gains and losses from insurance contracts and other unrealized
gains and losses are excluded and participations in affiliates not already consolidated in this
segment are deducted. The comparative period has been adjusted.
3_VNB is the additional value to shareholders that results from the writing of new business. The
VNB is determined as the present value of pre-tax future profits, adjusted for acquisition
expenses overrun or underrun and non-attributable costs, minus a risk adjustment, all
determined at issue date. Value of new business is calculated at point of sale, interpreted as at
the beginning of each quarter assumptions.
4_Figures as of 31 December.
Total business volume
On a nominal basis, total business volume increased by 3.5% for 2023.
This includes both unfavorable foreign currency translation effects of
(€ 1,378 mn) and negative (de-)consolidation effects of (€ 212 mn). On
an internal basis², total business volume increased by 5.6%, or
€ 4,210 mn.
Germany: Total business volume decreased to € 21,915 mn, a
0.7% decrease on an internal basis, mainly driven by reduced single
premium sales. In the German health business, total business volume
reached €4,150 mn, a 4.0% increase on an internal basis, mainly
driven by premium adjustments.
United States: Total business volume increased to € 18,308 mn, a
22.2% increase on an internal basis. This was due to higher sales in the
fixed index annuities business.
Italy: Total business volume increased to € 11,229 mn, a 0.9%
increase on an internal basis, mainly due to increases in capital
efficient guarantee products and protection and health.
France: Total business volume fell slightly to € 7,167 mn, a 1.0%
decrease on an internal basis.
390
8,086
3,205
€ mn
103
23
126
Other operating revenues
343
474
817
Performance fees
(595)
7,737
7,142
974
Net income
€ mn
3,788
3,317
471
thereof: attributable to shareholders
€ mn
3,589
3,160
428
Shareholders' core net income
3,595
(1,062)
(526)
(238)
(474)
(16)
Operating investment result¹
2,748
2,432
316
1 For further information please refer to note 6.4 to the consolidated financial statements.
'Valuation results & other' comprises realized gains/losses (net), investment expenses, foreign
currency gains/losses (net) on (re-)insurance contracts issued and held, and other items.
Our operating investment result went up considerably, driven by
Net income
Our net income increased by € 917 mn, predominantly driven by our
non-operating result. The € 843 mn rise in our non-operating result
was largely due to the higher non-operating investment result, which
increased by € 722 mn, mainly due to favorable valuation and lower
impairments. The non-operating other result also contributed to the
increase, mainly due to lower restructuring expenses.
higher interest and similar income (net of interest expenses) mostly Shareholders' core net income
due to higher interest rates. This was partially offset by a higher impact
from interest accretion, due to higher interest rates, as well as by our
valuation results and other.
Compared to the previous year our shareholders' core net income rose
by € 671 mn to € 4,421 mn, a development in line with our net income.
1_Represents the net result of the previous year claims (run-off) as a percentage of insurance revenue.
112
Annual Report 2023 - Allianz Group
C_Group Management Report
LIFE/HEALTH INSURANCE OPERATIONS
Key figures
Key figures Life/Health¹
2023
2022
(824)
(490)
Total business volume¹
thereof: Investment expenses
(737)
(195)
(107)
(81)
(32)
(75)
97
(178)
Fee and commission expenses
Other expenses¹
Operating fee and other result
1_Including reclassifications of € (11) mn from other non-operating result in 2023.
Our operating fee and other result declined, driven by an unfavorable
other result, because of extra profit charges and prior year one-off
gains from sale of own-use property. The fee and commission result
also contributed to the decrease, especially at Allianz Partners.
2023
2022
Delta
Interest and similar income (net of
interest expenses)
4,160
3,576
584
Interest accretion
(664)
(407)
(257)
Valuation results & other
(748)
(11)
€ mn
Delta
75,258
77,878
Operating profit of € 7.0 bn, plus or minus 10%.
Total business volume growth of 6% to 8%.
Selective profitable growth.
Protect shareholder value while continuing to provide attractive returns and
dividends.
Operating profit of € 14.2 bn, plus or minus € 1 bn.
Outlook 2023 - as per Annual Report 2022
Asset Management
Life/Health
Property-Casualty
Operating investment income (net) benefiting from increased interest-rate
environment while unwinding of discounted loss reserves weighing
negatively.
Allianz Group
Overview: 2023 results versus previous year's outlook¹
OUTLOOK 2024
C_Group Management Report
Annual Report 2023 - Allianz Group
117
1_For further information on Corporate and Other figures, please refer to note 5 to the consolidated
financial statements.
The increase in our net loss was mainly because of a lower non-
operating investment result, which was burdened by a lower valuation
result from financial assets and liabilities, lower income from
derivatives as well as lower non-operating realized gains and losses
(net). This was partly offset by a higher positive income tax result.
The operating result improved in 2023 compared to the previous year.
This was due to a higher contribution from Banking and Alternative
Investments, which more than offsets the decline in operating result
from Holding & Treasury.
Earnings summary
1_The position operating administrative expenses is part of the operating other result. For further
information, please refer to note 5 to the consolidated financial statements.
2023 results versus previous year's outlook for 2023
Continue to focus on profitable growth; keep developing capital-efficient
products; expand to new markets. Total business volume expected to be in
the range of € 75.0 bn to € 85.0 bn.
Combined ratio of approximately 93%.
Core RoE² expected to be higher than in 2022.
2,620
Operating profit
€ mn
5,191
4,218
Annual Report 2023 - Allianz Group
1_For more detailed information on the previous year's outlook for 2023, please see the Annual Report 2022 from page 89 onwards.
118
2_Effective 2023, core return on equity represents the ratio of shareholders' core net income to the average shareholders' equity at the beginning and at the end of the year. From the average shareholders' equity, unrealized gains and losses from insurance contracts and other unrealized gains and
losses are excluded and participations in affiliates not already consolidated in this segment are deducted. The comparative period has been adjusted.
Operating profit of € 5.0 bn, plus or minus 10%.
Operating profit was € 3.1 bn.
Cost-income ratio was 61.3%.
Total AuM increased by 3.8 %, third-party AuM by 4.7%.
1_Represents the ratio of shareholders' core net income to the average shareholders' equity at the beginning and at the end of the year. Shareholders' core net income is adjusted for net financial charges related to undated subordinated bonds classified as shareholders' equity. From the average
shareholders' equity, undated subordinated bonds classified as shareholders' equity, unrealized gains and losses from insurance contracts and other unrealized gains and losses are excluded.
Operating profit was € 5.2 bn.
Moderate increase in AuM, driven by recurrence to slightly positive market
returns combined with third-party net inflows at PIMCO and AllianzGI.
Operating profit € 3.0 bn, plus or minus 10%.
Cost-income ratio around 62 %.
16.3% core RoE² was higher than 2022.
Operating profit was € 14.7 bn.
Core return on equity (ROE)¹ was 16.0%. Dividend proposal is € 13.80 per share. Furthermore, Allianz SE completed a € 1.5 bn
share buy-back program in 2023.
Results 2023
Total business volume increased by 8.4%, above our target range. Internal growth was 11.2%.
Operating profit of € 6.9 bn was well within our target range.
Combined ratio was at 93.8%, missing our target.
Operating investment income (net) increased, supporting our operating profit target.
Revenues were within the outlook range at € 77.9 bn.
Total revenues increased by 8.0% on an internal basis, compared to 2022.
Insurance industry outlook
C_Group Management Report
Economic outlook¹
2024 is likely to be another year of interest rate reversals, but this time
in the opposite direction: the leading central banks will likely start to
cut key interest rates in the second half of the year. On the one hand,
this reflects the expectation that inflation is largely under control, as
annual average inflation will probably be within striking distance of
inflation targets in both the United States (2.3%) and the eurozone
(2.5%). On the other hand, it is a reaction to the continued weakness
in demand, which is fed by several sources: the delayed effect of
interest rate hikes on investment, declining fiscal policy support, and
depleted savings reserves. Overall, we therefore expect economic
growth to decline in 2024, falling by 0.3 percentage points to 2.4%
worldwide; for the United States, we expect it to decline to 1.4%
(-1.0 percentage points). Only the eurozone is likely to reach around
the previous year's level with a rate of 0.8%, as a return to positive
growth is assumed for Germany. China will also face headwinds, not
least due to its structural problems: we expect rather modest growth of
4.6%.
Ongoing uncertainty about the timing and extent of the next
interest rate moves means volatility in the financial markets will remain
high in 2024. As the expected cuts in interest rates have already been
anticipated in many market prices, disappointment and
corresponding market reactions cannot be ruled out. Overall, equities
and bonds are likely to move more or less sideways.
The outlook for 2024 is subject to a special caveat since it is a
super election year. Citizens will go to the polls in countries that
account for 60% of global economic output – from India to the United
States - with election results significantly impacting the economic and
geopolitical constellation. First and foremost, this applies to the U.S.
elections in November. The associated global political uncertainty is
fostering a wait-and-see-attitude among companies and households.
There is also the threat of rising political and social tensions as a result
of increasing polarization in a weak economic environment.
Inflation will remain a dominant topic for the insurance industry in
2024, as claims inflation is unlikely to fall as quickly as consumer price
inflation, mainly due to rising wages. However, continued premium
increases mean that pressure on underwriting results should ease. On
the other hand, the challenging macroeconomic and geopolitical
environment is hampering premium growth.
Operating profit of € 3.1 bn, plus or minus 10%.
Cost-income ratio of approximately 61%.
Despite ongoing high volatility, the investment environment
should remain relatively friendly in 2024. The higher interest rate level
offers good opportunities for long-term investors, and insurers'
investment income is likely to continue to rise.
20,121
(190)
581
2.9
Subordinated bonds (debt)
2,500
1,500
1,500
(1,500)
1,000
Subordinated bonds
Subordinated bonds (equity)
19,922
to senior bonds
(119)
(equity)
4,763
4,764
142
3.0
Subordinated bonds (debt)4,5
12,715
12,715
Total bonds
(119)
1_Based on nominal value.
Total bonds (debt)
3,641
Total
Senior bonds4
7,366
7,407
In view of the increasing geopolitical upheavals, climate-related
natural hazards, and technological risks worldwide, the need for risk
protection and prevention remains high. Thanks to its financial
strength, the insurance industry can meet these needs with innovative
solutions, so its role as a partner for strengthening social resilience will
continue to grow in importance.
(119)
122
1.6
Subordinated bonds
2022
7,407
2023
12,556
12,715
(71)
460
3.7
Senior bonds
Senior bonds²,3
Fair value hedge effects related
303
3,462
(debt)
years
(equity)
4,764
12,096
(101)
429
Total bonds (debt)
20,063
20,228
(231)
547
3.6
2.7
2022
11,968
Subordinated bonds
Fair value hedge effects related
to senior bonds
Subordinated bonds (debt)5
Fair value hedge effects related
to subordinated bonds (debt)
Total bonds (debt)
751
3,002
4,380
8,132
Senior bonds³
4,763
(debt)5
4,764
142
3.0
Fair value hedge effects related
to subordinated bonds (debt)
Total bonds (debt)
303
(71)
3,391
(71)
2022
16,237
4,764
19,931
8,095
8,132
(130)
118
1.4
Subordinated bonds (equity)
4,764
4,764
Subordinated bonds
Total bonds (equity)
Senior bonds4
(equity)
Subordinated bonds (equity)
1-5
years
LIQUIDITY AND FUNDING RESOURCES
Organization
The Allianz Group's liquidity management is based on policies and
guidelines approved by the Allianz SE Board of Management.
Allianz SE and each of the operating entities are responsible for
managing their respective liquidity positions, while Allianz SE provides
central cash pooling for the Group. Capital allocation is managed by
Allianz SE for the entire Group. This structure allows the efficient use of
liquidity and capital resources, and enables Allianz SE to achieve the
desired liquidity and capitalization levels for the Group and its
operating entities.
Liquidity management of our
operating entities
Insurance operations
The major sources of liquidity for our operational activities are
primary and reinsurance premiums received, reinsurance receivables
collected, investment income, and proceeds generated from the
maturity or sale of investments. These funds are mainly used to pay
claims arising from the Property-Casualty insurance business and
related expenses, life policy benefits, surrenders and cancellations,
acquisition costs, and operating costs.
We receive a large part of premiums before payments of claims
or policy benefits are required, generating solid cash flows from our
insurance operations. This allows us to invest the funds in the interim to
create investment income.
Our insurance operations also carry a high proportion of liquid
investments, which can be converted into cash to pay for claims.
Generally, our investments in fixed-income securities are sequenced to
mature when funds are expected to be needed.
The overall liquidity of our insurance operations depends on
capital market developments, interest rate levels, and our ability to
realize the market value of our investment portfolio to meet insurance
claims and policyholder benefits. Other factors affecting the liquidity
of our Property-Casualty insurance operations include the timing,
frequency, and severity of losses underlying our policies and policy
renewal rates. In our Life operations, liquidity needs are generally
influenced by trends in actual mortality rates compared to the
assumptions underlying our life insurance reserves. Market returns,
crediting rates, and the behavior of our life insurance clients - for
example, regarding the level of surrenders and withdrawals - can
also have a significant impact.
C_Group Management Report
Asset Management operations
Liquidity management and funding of
Allianz SE
The main responsibility for managing the funding needs of the
Allianz Group, maximizing access to liquidity sources and optimizing
the trade off between borrowing costs, balancing the maturity profile,
and the choice between senior and subordinated funding instruments,
lies with Allianz SE. As such, the following sections include comments
on the liquidity and funding resources of Allianz SE. Restrictions on the
transferability of capital within the Group mainly result from the capital
maintenance rules under applicable corporate laws as well as from
the regulatory solvency capital requirements for regulated Group
companies.
Liquidity resources and uses
Allianz SE ensures adequate access to liquidity and capital for our
operating entities. The main sources of liquidity available to Allianz SE
are dividends received from its subsidiaries and external funding
raised in the capital markets. Liquidity resources are defined as readily
available assets - specifically cash, money market securities, and
highly liquid fixed-income securities. Our funds are primarily used
for interest payments on our debt funding, operating costs, internal
and external growth investments, and dividends or share buy-backs to
our shareholders.
Funding sources
Allianz SE's access to external funds depends on various factors such
as capital market conditions, access to credit facilities, credit ratings,
and credit capacity. The financial resources available to Allianz SE in
the capital markets for short-, mid- and long-term funding needs are
described below. In general, mid- to long-term financing is covered by
issuing senior bonds, subordinated bonds or ordinary no-par value
shares.
Share capital
As of 31 December 2023, the issued share capital as registered at the
Commercial Register was €1,169,920,000. This was divided into
391,718,983 no-par value shares. As of 31 December 2023, the
Allianz Group held 260,394 (2022: 1,724,834) own shares.
Allianz SE has the option to increase its share capital according to
authorizations provided by the Annual General Meeting. The following
table outlines Allianz SE's capital authorizations as of 31 December 2023:
Capital authorizations of Allianz SE
Within our Asset Management operations, the most important sources
of liquidity are fees generated from asset management activities.
These are primarily used to cover operating expenses.
Capital authorization
Authorized Capital
2022/11
Annual Report 2023 - Allianz Group
Please refer to the Risk and Opportunity Report for a description
of the main concentrations of risk and other relevant risk positions.
32.4
25.2
7.2
4.4%
3.6%
0.8
736.8
703.3
33.5
100.0%
1 Excluding self-originated German private retail mortgage loans. For 2%, no ratings were available.
123
100.0%
C_Group Management Report
Compared to year-end 2022, our overall asset portfolio increased by Regulatory capital adequacy
€ 33.5 bn, mainly in our debt instruments.
Our well-diversified exposure to debt instruments increased
compared to year-end 2022, mainly due to market movements. About
94% of the debt portfolio was invested in investment-grade bonds and
loans.¹ Our government bonds portfolio contained bonds from France,
Germany, Italy, and the United States, representing 13.0%, 12.4 %, 9.7%
and 8.8% of our portfolio shares. Our corporate bonds portfolio
contained bonds from the United States, the eurozone, and Europe excl.
the eurozone. They represented 41.7%, 31.7% and 12.3% of our
portfolio shares.
Our exposure to equities decreased, mainly due to decreasing
volume.
For details on the regulatory capitalization of the Allianz Group, please
refer to our Risk and Opportunity Report.
Off-balance sheet arrangements
In the normal course of business, the Allianz Group may enter into
arrangements that do not lead to the recognition of assets and
liabilities in the consolidated financial statements under IFRS. Since
the Allianz Group does not rely on off-balance sheet arrangements as
a significant source of revenue or financing, our off-balance sheet
exposure to loss is immaterial relative to our financial position.
The Allianz Group enters into various commitments including loan
commitments, purchase obligations, and other commitments. For
more details, please refer to note 8.13 to the consolidated financial
statements.
The Allianz Group has also entered into contractual relationships
with various types of structured entities. They have been designed in
such a way that their relevant activities are directed by means of
contractual arrangements rather than voting or similar rights. Typically,
structured entities have been set up in connection with asset-backed
financing and certain investment fund products. For more details on
our involvement with structured entities, please refer to note 8.11 to the
consolidated financial statements.
Annual Report 2023 - Allianz Group
Over 5
Authorized Capital
2022/112
20223
Carrying
value²
Fair
value
hedge
effects
Interest
expenses
Weigh-
ted-
average
interest
As of 31 December
rate³
2023
€ mn
€ mn
€ mn
Nominal
value
€ mn
Senior bonds
Contractual maturity date
Subordinated bonds (debt)
2,166
750
1,500
(750)
666
2023
As of 31 December
Up to 1
year
%
Conditional Capital
As of 31 December
of redemp-
tions/
buy-backs
Nominal amount
Expiry date of
the authorization
€ 467,968,000
3 May 2027
€ 15,000,000
3 May 2027
3 May 2027
€ 116,992,000
1_For issuance of shares against contribution in cash and/or in kind.
2_For issuance of shares to employees (without shareholders' subscription rights).
3_To cover conversion or option rights of holders of bonds.
For further information on our share capital and regarding
authorizations to issue and repurchase shares, please refer to the
chapter Takeover-Related Statements and Explanations (part of the
Group Management Report).
Maturity structure of Allianz SE's senior and subordinated bonds¹
€ mn
124
C_Group Management Report
Long-term debt funding
As of 31 December 2023, Allianz SE had senior and subordinated
bonds with a variety of maturities outstanding, reflecting our focus on
long-term financing. As the cost and availability of external funding
may be negatively affected by general market conditions or by
matters specific to the financial services industry or the Allianz Group,
we seek to reduce refinancing risk by actively steering the maturity
profile of our funding structure.
Interest expenses on senior bonds increased, mainly due to higher
funding costs on average in 2023. For subordinated bonds classified
as debt, the increase of interest expenses was mainly driven by higher
amounts outstanding on average in 2023.
Senior and subordinated bonds issued or guaranteed by Allianz SE¹
The following table details the long-term debt issuances and
redemptions/buy-backs of Allianz SE during 2023 and 2022:
Issuances and redemptions of Allianz SE's senior and subordinated
bonds
€ mn
Issuances¹
Redemp-
tions/
buy-backs¹
Annual Report 2023 - Allianz Group
4,842
4,843
119
(1.8)
(2.4)
(1.8)
8.0
0.2
(2.7)
5.5
1_For 2022, not applicable due to the implementation of IFRS 9 and IFRS 17.
Property-Casualty
2023
2.4
2022
76,531
70,613
consisting of:
Gross premiums written
73,998
68,222
Fee and commission income
2,534
2,391
Life/Health
Total business volume
Statutory gross premiums
3.5
(0.3)
For further information, please refer to note 5 to the consolidated
financial statements.
Internal growth
We believe that an understanding of our total business volume
performance is enhanced when the effects of foreign currency
translation as well as acquisitions, disposals, and transfers (or
"changes in scope of consolidation") are analyzed separately.
Accordingly, in addition to presenting nominal total business volume
growth, we also present internal growth, which excludes these effects.
Reconciliation of nominal total business volume growth
to internal total business volume growth
%
Total business volume
Total business volume comprises gross premiums written as well as fee
and commission income in Property-Casualty, statutory gross
premiums in Life/Health, and operating revenues in Asset
Management.
Composition of total business volume
€ mn
20231
(1.8)
Property-Casualty
Asset Management
Allianz Group
Internal
growth
Changes in
Foreign
scope of
currency
consolidation translation
Nominal
growth
11.2
1.0
(3.7)
8.4
5.6
Life/Health
The analysis in the previous chapters is based on our consolidated
financial statements and should be read in conjunction with them. In
addition to our figures stated in accordance with the International
Financial Reporting Standards (IFRS), the Allianz Group uses total
business volume, operating profit, shareholders' core net income, and
internal growth to enhance the understanding of our results. These
additional measures should be viewed as complementary to, rather
than a substitute for, our figures determined according to IFRS.
77,878
Asset Management
We closely monitor the capital position and risk concentrations of
the Group, Allianz SE and its other related undertakings, and apply
regular stress tests (including standardized, historical, and reverse
stress test scenarios as well as monthly stress and scenario analyses
focusing on current and possible future developments). These analyses
allow us to take appropriate measures to preserve our continued
capital and solvency strength. For example, the risk capital reflecting
the risk profile and the cost of capital is an important aspect that is
considered in business decisions. Furthermore, we ensure a close
alignment of the risk and business strategy by the fact that business
decisions to achieve our set targets are taken within the determined
risk appetite and in line with the risk strategy. The implemented sound
processes to steer the business and assess and manage associated
risks ensure a continuous alignment of the risk and business strategy,
and enable us to detect and address any potential deviations.
In addition, our liquidity risk management framework ensures that
all legal entities in scope are responsible for managing their liquidity
risks and maintaining a sufficient liquidity position under both market
and business conditions (expected as well as stressed).
Risk governance system and internal
control system
Risk management framework
As a provider of financial services, we consider risk management,
including an internal control system (ICS), to be a core competency
and an integral part of our business. Our risk management framework
covers all operations and subsidiaries within the Group in proportion
to the inherent risks of their activities, ensuring that risks across the
Group are consistently identified, analyzed, assessed, and adequately
managed. The key elements of our risk management and internal
control system framework are:
-
Promotion of a strong risk management culture, supported by a
robust risk governance structure.
Consistent and proportional application of an integrated risk
capital framework to protect our capital base and support
effective capital management.
Integration of risk considerations and capital needs into
management and decision-making processes by attributing risk
and allocating capital to business segments, products, and
strategies.
Our risk management system is based on the following four pillars:
In addition, we take the requirements of rating agencies into
account. While capital requirements imposed by regulators constitute
a binding constraint, meeting rating agencies' capital requirements
and maintaining strong credit ratings are strategic business objectives.
Risk identification, assessment and underwriting: A robust system
of risk identification, assessment and underwriting forms the
foundation for appropriate risk management decisions.
Supporting activities include standards for underwriting, valuation
methods, individual transaction and new product approvals,
emerging/operational/top risk assessments, liquidity risk and
scenario analyses, amongst others.
Risk reporting and monitoring: Our comprehensive qualitative
and quantitative risk monitoring and reporting framework
provides management with the transparency needed to assess
whether our risk profile remains within the approved limits and to
identify emerging issues and risks quickly. For example, risk
dashboard and limit utilization reports as well as scenario
analyses and stress tests are regularly prepared and
communicated.
Communication and transparency: Transparent risk disclosure
provides the basis for communicating our strategy and
performance to internal and external stakeholders, ensuring a
sustainable positive impact on valuation and financing. It also
strengthens the risk awareness and risk culture.
Internal control system
In order to support these pillars, especially risk identification,
assessment and monitoring, the Allianz Group has established an ICS,
which consists of both specific risk controls and further control
elements. Its objectives are to:
Safeguard the Group's existence and business continuity.
Ensure compliance with applicable laws and regulations.
Create a strong internal control environment, ensuring that all
personnel are aware of the importance of internal controls and
their role within the internal control system.
Provide the management bodies with the relevant information for
their decision-making processes.
Notwithstanding the oversight exercised by the Supervisory Board of
the Allianz SE, controls are performed within the Allianz Group in terms
of control areas, activities, and reporting, taking into account
independence requirements, where applicable. The controls are
embedded into the operational and organizational set-up throughout
the Allianz Group and are subject to periodic reviews. Where
appropriate, internationally recognized control frameworks such as
the Committee of Sponsoring Organizations of the Treadway
Commission (COSO) or the IT-related Control Objectives for
Information and Related Technology (COBIT) are used.
128
Annual Report 2023 - Allianz Group
Risk strategy and risk appetite: Our risk strategy defines our risk
appetite in line with our business strategy. It ensures that rewards
are appropriate based on the risks taken and the required capital.
It also ensures that delegated decision-making bodies work in line
with our overall risk-bearing capacity and strategy.
75,258
Allianz aims to ensure that the Group is adequately capitalized at all
times and that Allianz SE and all other related undertakings meet or
exceed their respective regulatory capital requirements for the benefit
of both shareholders and policyholders.
RISK AND OPPORTUNITY REPORT
Operating revenues
8,086
8,234
consisting of:
Net fee and commission income
7,960
8,211
Net investment result
95
7
Target and strategy of risk
management
Other income and expenses
16
Consolidation
Allianz Group total business volume
(795)
(781)
161,700
153,324
127
Annual Report 2023 - Allianz Group
C_Group Management Report
31
RECONCILIATIONS
C_Group Management Report
Annual Report 2023 - Allianz Group
4,843
4,843
4_As of 31 December 2023, carrying value includes accrued interest of € 80 mn (2022: € 79 mn).
5_As of 31 December 2023, carrying value includes accrued interest of € 183 mn (2022: € 147 mn).
6_Interest expenses include interest and fees paid (not part of the Consolidated Income
Statement).
As of 31 December
Euro
Non-euro
Total
2023
Senior and subordinated bonds
(debt and equity)
18,750
5,935
4,843
24,685
4_Includes the issuance of two subordinated bonds (€ 1.25 bn and USD 1.0 bn) and the redemption
of a € 1.5 bn subordinated bond in 2023.
5_As of 31 December 2023, includes accrued interest of € 183 mn (2022: € 147 mn).
2022
Senior and subordinated bonds
(debt and equity)
19,750
5,155
24,905
1_Based on nominal value.
125
3_As of 31 December 2023, includes accrued interest of € 80 mn (2022: € 79 mn).
Annual Report 2023 - Allianz Group
3_Based on nominal value.
Currency allocation of Allianz SE's senior and subordinated bonds¹
3.0
Total bonds
(130)
(130)
(equity)
4,842
4,843
119
3.0
12,096
€ mn
12,096
751
2,901
Subordinated bonds (equity)
Total bonds (equity)
1_Based on carrying value (including accrued interest).
2_A senior bond of € 0.75 bn was redeemed in 2023.
16,346
4,843
(101)
19,998
1_For further information on Allianz SE debt (issued or guaranteed) as of 31 December 2023,
please refer to note 7.3 to the consolidated financial statements.
2_Carrying value including accrued interest.
Funding in non-euro currencies enables us to diversify our investor
base or to take advantage of favorable funding costs in those markets.
Funds raised in non-euro currencies are incorporated in our general
hedging strategy. As of 31 December 2023, approximately 24.0%
(2022: 20.7%) of the long-term debt was issued or guaranteed by
Allianz SE in currencies other than the euro.
(101)
C_Group Management Report
Short-term debt funding
The Medium-Term Note Program and the Commercial Paper
Program constitute the available short-term sources of funding.
Money market securities slightly decreased in the use of commercial
paper, compared to the previous year-end. Interest expenses on
money market securities increased, mainly due to higher funding costs
on average in 2023.
6,262
(1,140)
7,402
%
2023
Money market securities
1,103
48
4.4
2022
equivalents²
Money market securities
12
1.1
1_As of 1 January 2023, some changes have been made to the classification of cash flows from
operating, investing and financing activities to reflect the cash flows in the most useful manner
for the Allianz Group. These changes have also been reflected in comparative periods.
2_Includes effects of exchange rate changes on cash and cash equivalents of € (468) mn and
€ 268 mn in 2023 and 2022, respectively.
Net cash outflow used in financing activities increased by
€ 1.4 bn and amounted to € 5.7 bn in 2023. This development was
largely driven by lower net cash inflows from liabilities to banks and
customers and other financial liabilities as well as higher net cash
outflows from the Allianz SE share buy-back program. Lower net cash
outflows from our refinancing activities and higher net cash inflows
from transactions between equityholders partially offset these effects.
Cash and cash equivalents increased by € 6.3 bn, mainly
stemming from our Life/Health business operations in Germany and
the United States.
For further information on the above, please refer to our
Consolidated Statement of Cash Flows.
The Allianz Group maintained its A-1+/Prime-1 ratings for short-term
issuances. We can therefore continue funding our liquidity under the
Euro Commercial Paper Program at an average rate below Euribor,
and under the U.S. Dollar Commercial Paper Program at an average
rate slightly above SOFR (Secured Overnight Financing Rate).
Further potential sources of short-term funding that allow the
Allianz Group to fine-tune its capital structure include letter of
credit facilities and bank credit lines.
Net cash flow provided by operating activities increased by € 6.5 bn
to € 24.5 bn in 2023. This figure comprises net income plus adjustments
for non-cash charges, credits, and other items included in net earnings,
as well as cash flows related to the net change in operating assets and
liabilities. Net income after adding back non-cash charges and similar
items decreased by € 10.5 bn to € 20.5 bn in 2023. Operating cash
flows from net changes in operating assets and liabilities rose by
€ 17.0 bn. This was mainly driven by higher net changes from our
insurance and investment contract liabilities with partially offsetting
effects from financial assets for unit-linked contracts. In addition, last
year we recorded the settlement of the majority of the provision
related to the Structured Alpha matter.
Net cash flow used in investing activities decreased by € 3.0 bn to
€ 12.0 bn in 2023. This was mainly due to net cash inflows from
derivative assets and liabilities after material net cash outflows in
2022, in particular in our Life/Health business operations. Lower net
cash inflows from investments measured at fair value through other
comprehensive income mainly in our Life/Health business operations
in Germany, France, and the United States, as well as higher net cash
outflows from investments measured at fair value through profit or
loss, partly compensated this effect.
126
1,123
interest rate
Change in cash and cash
Average
Money market securities of Allianz SE
As of 31 December
Allianz Group consolidated cash flows
Annual changes in cash and cash equivalents¹
€ mn
Net cash flow provided by operating
activities
2023
2022
Delta
24,462
17,952
6,510
Net cash flow used in investing
activities
(12,007)
(14,992)
2,986
Net cash flow used in financing
activities
(5,724)
(4,367)
(1,357)
Carrying
value
€ mn
Interest
expenses
€ mn
(0.4)
3.9%
Issuance net
Delta
Equities
Funds
Real estate
Other
Total
1_This does not include non-controlling interests of € 5,103 mn and € 4,320 mn as of 31 December 2023 and
2022, respectively. For further information, please refer to note 8.10 to the consolidated financial
statements.
122
Total assets and total liabilities
As of 31 December 2023, total assets amounted to € 983.2 bn and
total liabilities were € 919.6 bn. Compared to year-end 2022, total
Other
As of
As of
As of
31 December
31 December
31 December
2023
2022
2023
31 December
2022
Delta
As of
€ bn
Corporate bonds
Government bonds
Retained earnings
30,702
29,354
(79)
1,348
Foreign currency translation
adjustments
(2,883)
(3,048)
165
Unrealized gains and losses from
Covered bonds
insurance contracts (net)
54,854
(20,647)
Other unrealized gains and losses
(net)
Total
(37,215)
58,477
(60,490)
54,415
23,275
4,062
Asset allocation and fixed income portfolio overview
Debt instruments, thereof:
34,207
4,843
€ bn
%
126.2
117.1
9.1
22.7%
21.9%
0.8
48.1
49.1
(1.0)
6.5%
0.1
7.0%
73.6
66.6
7.0
10.0%
9.5%
0.5
25.7
27.6
(2.0)
3.5%
(0.5)
€ bn
35.6%
8.7
%
%-p
557.1
534.8
22.3
75.6%
76.0%
(0.4)
187.6
182.2
35.7%
5.4
34.1%
(0.4)
44.4
45.3
(0.9)
8.0%
8.5%
(0.5)
198.9
190.2
33.7%
4,764
Type of investment
28,902
Our outlook assumes no significant deviations from our underlying
assumptions - specifically:
Undated subordinated bonds
no major volatility in the capital markets,
no disruptive fiscal or regulatory interference or major litigation,
level of claims from natural catastrophes at expected average
levels,
an average U.S. dollar-to-euro exchange rate of 1.091.
A 10% weakening (strengthening) of the U.S. dollar, compared
to the assumed exchange rate of 1.091 to the euro, would have
a negative (positive) effect on Group operating profit of
approximately € 0.5 bn.
For further information on our ambitions for the period 2022 - 2024,
please see the section "Our business aspirations" in the Risk and
Opportunity Report.
Management's assessment of
expected revenues and earnings for
2024
In 2023, our total revenues were € 161.7 bn, a 5.5% increase on a
nominal and an 8.0% increase on an internal basis¹, compared to
2022. For 2024, we envisage 3% growth overall, resulting from growth
in Property-Casualty and Asset Management, combined with
relatively stable revenues in Life/Health, owing to our selective focus
on profitable growth.
Our operating profit was € 14.7 bn in 2023. For 2024, we envisage
strong performance in all business segments and an overall operating
profit of € 14.8 bn, plus or minus € 1.0 bn.
Core RoE expected to be between 14.0 % and 17.0%.
Moderate increase in AuM, driven by recurrence to slightly
positive market returns combined with third-party net
inflows at PIMCO and AllianzGl.
Our core net income attributable to shareholders was € 9.1 bn in
2023. Consistent with our disclosure practice in the past and given the
sensitivity of our non-operating results to capital market
developments, we have chosen not to provide a precise outlook for net
income. However, since our outlook presumes no major disruptions in
our capital markets, we anticipate a positive development for both net
income and core net income in 2024.
In this business segment, we expect total business volume to increase
by 5% to 7% in 2024 (total business volume growth in 2023: 8.4%) due
to organic growth, which is supported by favorable price and volume
effects across our subsidiaries.
We believe that the rise in prices we saw in a number of markets
in 2023 will continue in 2024. That said, we will continue to focus on
achieving strong insurance service results by adhering to our strict
underwriting discipline, as in previous years.
Our combined ratio was 93.8% in 2023, which is above target. In
2024, we envisage a combined ratio in the range of approximately
93% to 94%. The underlying assumption is that the aggregate effect of
improvements in pricing, claims management, and productivity will
compensate for inflation in attritional claims. The impact of
discounting loss reserves on our combined ratio depends on the
development of interest rate levels throughout 2024. As for impacts
from natural catastrophes, despite the highly volatile nature of such
catastrophes in recent years, we expect those claims to be at
approximately 3%.
The investment income is expected to further benefit from the
high interest-rate environment, despite a likely reduction of interest
rates in the second half of 2024. Going forward, we will continue to
actively adapt our investment strategy to changing market conditions.
It should be noted that, with the introduction of the new IFRS 17
accounting standard, the unwinding of discounted loss reserves will
weigh on our investment income, dependent on interest rate levels of
prior years.
Overall, we expect our 2024 operating profit to be € 7.3 bn, plus
or minus 10% (2023: € 6.9 bn).
Life/Health insurance
Core RoE is one of the KPIs used in the financial steering of Life/Health.
In 2024, we expect this KPI to be between 14% and 17% (2023: 16.3%).
We expect that CSM normalized growth will be between 4% and 5%,
which will support long-term stability and growth of operating profit.
At € 5.2 bn, the operating profit of our Life/Health business
segment was within the target range in 2023. For 2024, we expect an
operating profit of around € 5.2 bn, plus or minus 10%.
Asset Management
Property-Casualty insurance
Operating profit of € 5.2 bn, plus or minus 10%.
Continue to focus on profitable growth; keep developing
capital-efficient products; expand to new markets. Total
business volume expected to be in the range of € 73.0 bn to
€ 83.0 bn.
Operating investment income (net) further benefiting from
high interest-rate environment while unwinding of
discounted loss reserves weighing negatively.
Premium growth in the property-casualty insurance sector will
continue at a slower pace; however, as in the previous year it is likely to
be driven primarily by rising prices. At the same time, claims
development remains challenging, with structural factors such as
increasing climate-related natural catastrophes also playing a role.
Investment income is expected to increase. As higher wages are
putting pressure on operating costs, increasing productivity through
fully digitalized processes is essential.
In the life insurance sector, providers are increasingly reflecting
the higher interest rate level in their products, which should benefit
demand for savings and pension products. This is possible because
awareness of the need for protection in old age not only remains high
but should also continue to rise in the future. The same applies to
demand in the risk business. Furthermore, higher investment income
will strengthen profitability.
Asset management industry outlook.
In 2024, the asset management industry will probably face a different
economic landscape to 2023, and will also be impacted by
megatrends, including disruptive technologies and sustainability.
This challenging environment is an opportunity for active asset
management to demonstrate its value potential by focusing on
diversification and risk management, which help to deliver
outperformance.
With inflation falling and rate cuts expected in the United States
and the eurozone, there will be many opportunities in bond markets.
Fixed income will therefore be an important asset class for investors in
2024. Investment grade, for example, is likely to benefit from strong
yield levels, manageable supply and still decent fundamentals.
Demand for alternatives - especially private market assets - is also
expected to remain high. This trend is supported by investors looking
for both diversification and protection against inflation. Infrastructure
― including renewable energy - is expected to grow further, driven by
the effort to limit CO2 emissions. In this context, ESG-oriented
investments are becoming more complex and competitive, as many
investors seek ways to make a real-world impact by focusing on
environmental and inclusive-growth themes.
Technology, especially artificial intelligence (AI), will emerge as a
core part of the long-term opportunity set. Al will be increasingly
implemented and will help raise global productivity by both
automating laborious tasks and analyzing large data sets.
Margin pressure is very likely to persist, driven by passive products
as well as fierce competition. Despite this multifaceted situation, the
asset management industry meets all the prerequisites to remain
attractive and return to a long-term growth path.
1_The information presented in the sections "Economic outlook", "Insurance industry outlook", and "Asset
management industry outlook" is based on our own estimates.
119
Annual Report 2023 - Allianz Group
C_Group Management Report
Overview: outlook and assumptions for
the Allianz Group in 2024
Outlook 2024
Allianz Group
Property-Casualty
Life/Health
Asset Management
Assumptions
Operating profit of € 14.8 bn, plus or minus € 1 bn.
Protect shareholder value while continuing to provide
attractive returns and dividends.
Selective profitable growth.
Total business volume growth of 5% to 7 %.
Operating profit of € 7.3 bn, plus or minus 10%.
Combined ratio to be in a range of approximately 93 % to
94%.
For 2024, we envisage overall moderate third-party net inflows and
market returns at both PIMCO and AllianzGI, after a year of capital
market volatility and high inflation. Margins should remain relatively
stable, and we expect a normal level of performance fees, resulting in
modest operating revenue growth. We further assume an average
U.S. dollar-to-euro exchange rate of 1.091. All things considered and
reflecting our current asset base, we expect our 2024 operating profit
to be € 3.1 bn, plus or minus 10% (2023: € 3.1 bn).
Our cost-income ratio should be approximately 61% in
2024 (2023: 61.3%) as we continue to invest in business growth. Over
the medium term, we expect to grow further; this also depends on the
market development.
interest rate environment to remain at a high level compared to
previous years,
In this business segment, we recorded an operating loss of € 0.5 bn in
2023. For 2024, we envisage an operating loss of € 0.8 bn plus or minus
10%.
No duty to update
Allianz assumes no obligation to update any information or forward-
looking statement contained herein, save for any information we are
required to disclose by law.
1_This represents management's current state of planning and may be revised in the future. Also, note that
the decision regarding dividend payments in any given year is subject to specific dividend proposals by
121
the Management and Supervisory Boards, each of which may elect to deviate, if and as appropriate,
under the then prevailing circumstances, as well as to the approval of the Annual General Meeting.
2_Including the application of transitional measures for technical provisions, the Solvency II capitalization
ratio amounted to 229% as of 31 December 2023.
Annual Report 2023 - Allianz Group
C_Group Management Report
BALANCE SHEET REVIEW
Shareholders' equity¹
Shareholders' equity
frequency and severity of insured loss events, including those resulting
from natural catastrophes, and the development of loss expenses, (v)
mortality and morbidity levels and trends, (vi) persistency levels, (vii)
the extent of credit defaults, (viii) interest rate levels, (ix) currency
exchange rates, most notably the EUR/USD exchange rate, (x)
changes in laws and regulations, including tax regulations, (xi) the
impact of acquisitions, including and related to integration issues and
reorganization measures, and (xii) the general competitive conditions
that, in each individual case, apply at a local, regional, national,
and/or global level. Many of these changes can be exacerbated by
terrorist activities.
€ mn
Compared to 31 December 2022, shareholders' equity increased by
€ 4.1 bn. The retained earnings were mainly decreased by the share
buy-back program with an amount of € 2.2 bn and the dividend
payout in May 2023 (€ 4.5 bn). This was compensated by the net
income attributable to shareholders of € 8.5 bn for the year ended
31 December 2023. The increase in other unrealized gains and losses
(net) of € 23.3 bn was almost offset by the decrease of unrealized
gains and loss from insurance contracts (net) with an amount of
€ 20.6 bn. The development of unrealized gains and losses is driven by
the increase of interest rate level over the course of the year 2023.
assets and total liabilities increased by €47.3 bn and € 42.4 bn,
respectively.
The following section focuses on our financial investments in debt
instruments, equities, real estate, and cash, as these reflect the major
developments in our asset base.
For further information on our dominant balance sheet position,
the insurance liabilities, please refer to the chapter Insurance
Operations in the notes to the consolidated financial statements.
Structure of investments - portfolio overview
The following portfolio overview covers the Allianz Group's assets held
for investment, which are largely driven by our insurance businesses.
As of 31 December
2023
2022
Corporate and Other (including consolidation)
28,902
Delta
Deviations may arise due to changes in factors including, but not
limited to, the following: (i) the general economic and competitive
situation in Allianz's core business and core markets, (ii) the
performance of financial markets (in particular market volatility,
liquidity, and credit events), (iii) adverse publicity, regulatory actions or
litigation with respect to the Allianz Group, other well-known
companies, and the financial services industry generally, (iv) the
Paid-in capital
Cautionary note regarding forward-
looking statements
This document includes forward-looking statements, such as prospects
or expectations, that are based on management's current views and
assumptions and subject to known and unknown risks and
uncertainties. Actual results, performance figures, or events may differ
significantly from those expressed or implied in such forward-looking
statements.
1_Operating revenues adjusted for foreign currency translation and (de)consolidation effects.
Annual Report 2023 - Allianz Group
C_Group Management Report
Non-financial KPIs
As outlined in the "Our Steering" section in our Business Operations
chapter, we have also set ourselves non-financial targets. For further
information on the past and expected development of these non-
financial KPIs, please refer to the Non-Financial Statement.
Financing, liquidity development,
and capitalization
The Allianz Group enjoys a very robust liquidity position and excellent
financial strength, as well as a healthy business mix and global
will increase the regular payout ratio from 50% to 60% of the Group's
net income attributable to shareholders, adjusted for extraordinary
and volatile items. For 2023, the Allianz SE Board of Management and
the Supervisory Board propose a dividend of € 13.80 per share.
In addition, as part of our policy to return capital to shareholders
on a flexible basis, Allianz SE executed nine share buy-back programs
with an aggregate volume of € 12.5 bn in the period from 2017 to
2023. An additional € 1.0 bn will be executed in 2024.
All of the above is subject to our sustainable Solvency II
capitalization ratio being above 150% - which is considerably below
our year-end 2023 level of 206%².
120
challenges and market volatility faced by our insurance segment. The
Allianz Group's Solvency II capitalization is well above regulatory
requirements.
As a result, we have full access to financial markets and are in a
position to raise financing at lower cost. We are determined to
maintain our financial flexibility, which is supported by both the
prudent steering of our liquidity resources, and our well-balanced debt
maturity profile.
We are managing our portfolios with great diligence, in order to
ensure that the Group has sufficient resources to back its solvency
capital and liquidity needs. In addition, we will continue to monitor the
sensitivity of our Solvency Il capitalization ratio with regard to changes
in interest rates and spreads, by continuing to ensure prudent
asset/liability management and life product design.
Expected dividend development¹
Allianz management is committed to shareholder participation in the
economic development of the Allianz Group in the form of dividend
payments and share buy-back programs. Through prudent capital
management, the Allianz Group aims to maintain a healthy balance
between achieving attractive yields and investing in profitable
growth, while assuring an adequate capitalization. Due to our strong
business development and an attractive dividend policy, the dividend
has increased by an average of 10% over the past 10 years (2013-
2022). In the interest of an attractive dividend to our shareholders, we
the Allianz Group's current economic
situation
At the date of issuance of this Annual Report and based on current
information regarding natural catastrophes and capital market trends
- in particular foreign currency, interest rates, and equities - the Board
of Management has no indication of the Allianz Group facing any
major adverse developments.
diversification. This allows us to maintain high performance, despite Management's overall assessment of
Additional recent examples are the European Commission's
Digital Operational Resilience Act (DORA) and similar requirements
from local regulators relevant for the Allianz Group. To achieve
compliance with the large number of very granular DORA standards,
an extensive program coordinated by Group Protection & Resilience
was initiated during 2023. The program aims to implement adequate
solutions by January 2025, when the requirements set by the act need
to be effectively met by Allianz. Group Risk is participating in the
project and is actively involved in contributing to the design required
by DORA.
The second operational risk is compliance with rising regulatory
requirements on the management of IT risks. In the second quarter
2022, BaFin conducted an audit on the implementation of the
supervisory requirements for insurance on IT (VAIT) at Allianz SE, with
the new version published on 3 March 2022. To address the findings,
Allianz SE has set up a program under the lead of the division
"Operations, IT and Organization" and approved and submitted to
BaFin a corresponding remediation plan. The remediation plan has
been accepted by BaFin.
which is already rolled out in various OEs. It basically includes a
practical guidance for Al promoting transparency, privacy, fairness,
human agency and accountability in the development and
deployment of Al solutions. Privacy and ethics impact assessments
help to implement these Al principles on a case-by-case basis. These
activities are supported by various training and awareness campaigns
for Allianz employees, and by a data advisory board preparing
decisions for the Board of Management in the area of Al and data
ethics. The Allianz Al governance framework will be further adjusted,
especially to implement the European Union Al Act in its final version,
and structurally rolled out in the operating entities.
"Execution, Delivery, and Process Management": potential losses
arising from transaction or process management failures.
Examples include interest and penalties from non-payment or
underpayment of taxes, or losses associated with broker and
agent distribution processes. These losses tend to be of a relatively
higher frequency but with little financial impact (although single
large-loss events can occur).
In the last year, the following two operational risks related to IT have
gained in importance in particular:
Other operational risks including, for example, internal or external
fraud, financial misstatement risk, IT risks (such as a cybersecurity
incident causing limited availability, loss of confidentiality or
integrity, or regulatory fines ¹), IT-related risks (such as improper
delivery/design or operational stability), a potential failure at our
outsourcing partners causing a disruption to our working
environment, etc.
In the last year, one operational risk related to IT has reduced in
importance. The project risk related to the Allianz Group's IT
transformation program, which aimed at accelerating complexity
reduction and achieving additional synergy effects and cost savings in
IT, was reduced due to formal closure of the program and transfer of
remaining activities to a local project in the Asia region. The program
was supported with a tailored risk assessment approach, which will
now happen in a similar way for the local project. Risks at all levels of
the program at operating entities, business areas and the global
program - were independently identified, assessed, and will - where
necessary continue to be managed, and monitored in a harmonized
way.
"Clients, Products, and Business Practices": potential losses due to
a failure to meet the professional obligations or from the design of
products. Examples include mis-selling, non-compliance with
internal or external requirements related to products, anti-trust
behavior, data protection, sanctions and embargoes, etc. These
losses tend to be less frequent but, when they occur, can have a
high financial (and reputational) impact.
The first operational risk results from fast developments in the
area of artificial intelligence (AI) including generative Al. Al can help
Allianz to further improve customer services and internal processes but
also comes with new operational risks: Public and regulatory concerns
about discriminating Al and "Black Box Al" triggered various
regulatory initiatives by supervisory authorities and regulators across
the globe, especially the upcoming European Union Al Act, which is
expected to be finalized in 2024. Allianz addresses these new legal
and reputational risks seriously with its Al governance framework,
1_For further information on cyber risk, see section "Cybersecurity" in the Non-Financial Statement.
The Allianz Group's operational risk primarily refers to losses in
either the insurance or the asset management business, or both.
Annual Report 2023 - Allianz Group
C_Group Management Report
The Group's operational risk capital is dominated by the risk of
potential losses within the categories "Clients, Products, and Business
Practices" and "Execution, Delivery, and Process Management". With
regard to the largest category "Clients, Products, and Business
Practices", key external drivers are changes in laws and regulations.
Internal drivers reflect potential failures of internal processes. These
drivers are considered in the local scenario analyses.
Operational risk capital is calculated using a scenario-based
approach based on expert judgment, as well as internal and external
operational loss data. The estimates for frequency and severity of
potential loss events for each material operational risk category are
assessed and used as a basis for our internal model calibration.
Allianz has developed a consistent operational risk management
framework, which is applied across the Group based on
proportionality and focuses on the early recognition and proactive
management of material operational risks. The framework defines
roles and responsibilities as well as management processes and
methods: Local risk managers at Allianz SE and at the other operating
entities of the Allianz Group, in their capacity as Second Line of
Defense, identify and evaluate relevant operational risks and control
deficiencies via a dialogue with the First Line of Defense, report
operational risk events in a central database, and ensure that the
framework is implemented in their respective operating entity.
This framework triggers specific mitigating control programs. For
example, compliance risks are addressed with written policies and
dedicated compliance programs monitored by compliance functions
across the Allianz Group. The risk of financial misstatement is
mitigated by a system of internal controls covering financial reporting.
Outsourcing risks are covered by our Outsourcing Policy, Service Level
Agreements, and Business Continuity and Crisis Management
programs to protect critical business functions from these events.
Cyber risks are mitigated through investments in cybersecurity, cyber
insurance that Allianz buys from third-party insurers, and a variety of
ongoing control activities, developed and implemented along the
following main themes: slow down hackers, increase threat detection,
reduce the damage of attacks, and enhance the skills as well as the
organizational structure.
With regards to the last year, in particular IT risk management and
information and cybersecurity were further improved via
implementation of the following strategic themes, which were derived
from both observed and anticipated risks, considering the strategic
Due to the particular importance of operational risks for the Asset
Management business, a key task for the local Risk Management
functions in the related entities is a regular monitoring of the internal
controls attached to material processes. This is also supported by the
introduction of the concept on Non-Financial Risk Management
(NFRM).
-
outlook of information security, the threat landscape, and industry
trends: (1) protection of digital identity, (2) security service health, (3)
cyber resilience.
136
Operational risks refer to losses resulting from inadequate or failed
internal processes, human errors, system failures, and external events,
and can stem from a wide variety of sources, including the following:
C_Group Management Report
Cross effects: This part takes into account that a combined impact
of a market rate change and a lapse rate change could deviate
significantly from the sum of the two impacts.
The ICS for operational risk encompasses the management of
compliance, financial reporting, and other operational risks. The
effectiveness of this internal control system is monitored along two
dimensions:
Reserve risk
Reserve risk represents the risk of adverse developments in best-
estimate reserves over a one-year time horizon, resulting from
fluctuations in the timing and/or amount of claims settlement. We
estimate and hold reserves for claims resulting from past events that
have not yet been settled. In case of unexpected developments, we
would experience a gain or loss dependent on the assumptions
applied for the estimate. In addition, the risk of inflation volatility
deviating from historical observations and of changes in yield curves is
covered in the specific market risk modules.
Similar to premium risk, reserve risk is calculated based on
actuarial models. The reserve distributions derived are then used
within the internal model to calculate potential losses based on a
predefined confidence level of 99.5%.
In order to reduce the risk of unexpected reserve volatility,
Allianz SE and the other related undertakings of the Allianz Group
constantly monitor the development of reserves for insurance claims
on a line-of-business level. In addition, related undertakings generally
conduct annual reserve uncertainty analyses based on similar
methods used for reserve risk calculations. The Allianz Group performs
regular independent reviews of these analyses and Group
representatives participate in the local reserve committee meetings.
Retrocession is another important instrument to mitigate reserve
risk.
Life/Health
Underwriting risks in our Life/Health operations (biometric risks)
include mortality, disability, morbidity, and longevity risks. Mortality,
disability, and morbidity risks are associated with an unexpected
increase in the occurrence of death, disability, or medical claims.
Longevity risk is the risk that the reserves covering life annuities and
pension products might not be sufficient due to longer life
expectancies of the insured.
Life/Health underwriting risk arises from profitability being lower
than expected. As profitability calculations are based on several
parameters such as assumptions on future mortality rates, or
morbidity claims the actual development may differ from the
expected one. For example, lower-than-expected mortality rates
would lead to additional annuity payments in the future. However,
3_Life/Health is also referred to as Life.
1_Credit Risk Platform.
135
Annual Report 2023 - Allianz Group
beneficial deviations are also possible; for example, a trend towards
healthier lifestyles will most likely result in lower overall health
insurance claims.
We measure these risks within our internal model, distinguishing,
where appropriate, between risks affecting the absolute level and
trend development of the actuarial assumptions on the one hand and
pandemic risk scenarios on the other. Depending on the nature and
complexity of the risks involved, our health business is represented in
the internal model according to Property-Casualty or Life/Health
calculation methods and is therefore included in the relevant Property-
Casualty and Life/Health figures accordingly. However, most of our
health business is attributable to the Life/Health business segment.
Business risk
Business risks include cost risks and policyholder behavior risks. They
are mostly driven by the Life/Health business and to a lesser extent by
the Property-Casualty and the Asset Management business. Cost risks
are associated with the risk that expenses incurred in administering
insurance policies - or investment management expenses for portfolio
management - are higher than expected or that new business volume
decreases to a level that does not allow Allianz to absorb its fixed costs.
Business risk is measured relative to baseline plans.
Allianz SE's Board of Management has also defined a strategy for the
management of risks. This risk strategy places particular emphasis on
ensuring the integrity of the Allianz brand and reputation, remaining
solvent even in the event of extremely adverse scenarios, maintaining
sufficient liquidity to meet financial obligations, and providing resilient
profitability.
Assumptions on policyholder behavior are set in line with
accepted actuarial methods and based on own historical data, where
available. If there is no historical data, assumptions are based on
industry data or expert judgment. These are used as a basis to
determine the economic impact of policyholder behavior under
different scenarios within our internal model.
The potential interaction between market risks (in particular interest
rate risk) and lapse risk is covered by two different modeling aspects:
Financial rationality: The Life/Health cash flow models generally
contain a dynamic modeling of lapse where the best estimate
lapse rate is increased if market returns are significantly higher
than the overall return of the insurance policy and vice versa.
Operational risk
Monitoring the effective implementation of the Non-Financial Risk
Management (NFRM) framework, which is progressively replacing
the Integrated Risk and Control System (IRCS) framework. If
correctly implemented, these frameworks ensure that risks are
identified in time, and controls are appropriately set up and tested
frequently to identify potential weaknesses or gaps in the internal
control system.
Reinforcing capital productivity and resilience: Retain industry-
leading financial strength and unlock further value creation
potential through an improved risk/return profile and an active
management and reduction of tail-risk exposure. Our focus on
capital resilience is matched with a focus on talent development
and diversity that also strengthens our organizational resilience.
NFRM strengthens the internal control system by using a new risk
taxonomy consistent across the Group, which helps to aggregate the
risks at Group level, and by using an even more rigorous testing
approach. It is being rolled out in so-called waves with close
monitoring by Group Risk and Group Compliance. Insurance and Asset
Management entities of the first two waves - 44 operating entities out
of 67 - have already undergone important implementation steps in
2023 to further bolster assurance activities. Operating entities part of
the last wave 3 have continued to apply the IRCS framework and will
implement NFRM in 2024.
The most important strategic risks are related to the value
creation levers, which focus on three themes: Growth, Margin
Expansion, and Capital Efficiency. Progress on mitigating strategic
risks and meeting the value creation levers is monitored and evaluated
in the course of the Strategic and Planning Dialogues between the
Allianz Group and Allianz SE and the other related undertakings.
Liquidity risk
Liquidity risk is defined as the risk that current or future payment
obligations cannot be met or can only be met on the basis of adversely
altered conditions. Liquidity risk can arise primarily if there are
mismatches in the timing of cash in- and outflows.
The liquidity risk profile of Allianz predominantly originates from the
uncertainty about the volume and timing of cash needs from
insurances liabilities. This relates especially to:
Coverage of various types of catastrophes in the Property-
Casualty business, with the frequency of such events anticipated to
increase going forward as a result of the unfolding climate change
effects.
Mass lapse events or rising lapse rates in the Life/Health insurance
business, especially in combination with changes in the relevant
capital market environment.
Major risks can also result from derivative transactions used by Allianz
to hedge specific market risks.
Allianz is exposed to liquidity risk as well due to large operational
risk events, which may potentially result in significant cash outflows.
Another source of liquidity risk for Allianz are potential regulatory
actions by local supervisors, which may reduce dividends from
subsidiaries to the Group (e.g., due to global events such as those
partially observed during the COVID-19 crisis).
Each legal entity of the Allianz Group measures and manages
liquidity risk locally, using asset/liability management systems
designed to ensure that assets and liabilities are adequately matched.
Local investment strategies particularly focus on the quality of the
investments and ensure a significant portion of liquid assets (e.g., high-
rated government bonds or covered bonds) in the portfolios. In the
course of the liquidity planning, liquidity sources (e.g., cash from
investments and premiums) and liquidity needs (e.g., payments due to
insurance claims and expenses) are reconciled under a best-estimate
plan, as well as under adverse idiosyncratic and systemic liquidity
scenarios with time horizons of up to 12 months, to allow for a
consistent view on liquidity risk across the Group. These analyses are
predominantly performed at legal entity level and are monitored by
the Group for large- and mid-sized units.
The annual and the high-level three-year cash flow plan for
Allianz SE and the Holding and Treasury reportable segment reflect
the overall operating, financing, and investing strategy of the
Allianz Group. The liquidity stress-testing framework of Allianz SE is
identical to that of the other legal entities. Major contingent liquidity
requirements arise mainly from market risk scenarios for Allianz SE and
its subsidiaries, from the non-availability of external capital markets,
and from reinsurance risk scenarios for Allianz SE.
In addition, the cash position of the Group cash pool investment
portfolio is monitored and forecast on a daily basis.
In the liquidity risk measurement process, early warning and limit
thresholds are applied to regularly measure the local (stressed)
liquidity position, inform senior management, and decide on actions if
needed.
The management of Allianz's liquidity risk at a local level is
facilitated by a dedicated governance and organizational setup. In
general, the First Line of Defense is responsible for managing liquidity
risk. Monitoring of liquidity risk is the responsibility of the local Risk
Management functions, and potential liquidity gaps are reported to
the respective local boards of management.
Reputational risk
Allianz's reputation as a well-respected and socially aware provider of
financial services is influenced by our behavior in a range of areas such
as product quality, corporate governance, financial performance,
customer service, employee relations, intellectual capital, and
corporate responsibility.
Reputational risk is the risk of an unexpected drop in the value of
the Allianz SE share price, the value of the in-force business, or the
value of future business caused by a decline in our reputation in the
eyes of internal or external stakeholders.
The identification and assessment of reputational risks is part of
the annual Top Risk Assessment process, undertaken by the
Allianz Group and all operating entities. As part of this process, senior
management approves the risk strategy for the most significant risks
and their potential reputational impact.
Annual Report 2023 - Allianz Group
These loss distributions are then used within the internal model to
calculate potential losses with a predefined confidence level of 99.5%.
market and competitive conditions, capital market requirements,
regulatory conditions, etc., to decide if strategic adjustments are
necessary.
Monitoring the resolution of identified weaknesses in the internal
control system.
138
Strategic risk is the risk of a decrease in the company's value arising
from adverse management decisions on business strategies and their
implementation.
The full implementation of the new framework across the Group
is expected to be completed by year-end 2024. Meanwhile, Group Risk
and Group Compliance are closely monitoring all waves, seamlessly
bridging an effective migration between IRCS and NFRM.
The NFRM is an integral part of the overall ICS, whose
fundamentals are described in the section "Risk Governance System
and Internal Control System".
The NFRM is the framework by which the Second Line of Defense
supports and facilitates the fulfillment of First Line of Defense
responsibility to implement an adequate and effective system for
managing Non-Financial Risks. The NFRM aims to strengthen the
control system by using a harmonized methodology to:
Achieve a consistent and commonly accepted definition of risks
that fall under the category Non-Financial Risk, via establishing a
set of non-financial risk vectors.
Facilitate the implementation of adequate controls via an NFRM
control catalog, consisting of control objectives, risk scenarios, and
exemplary key controls.
Ensure a robust testing of these controls, using a systematic risk-
based approach.
To achieve these targets, NFRM has connected and evolved already
existing pillars and tools of the Allianz Risk Management and Internal
Control System framework, e.g., the Top Risk Assessment (TRA)
methodology, the Integrated Risk and Control (IRCS) framework, and
the use of internal and external operational loss events.
The NFRM framework has the following key features:
Objective data is used through a consistent methodology to
facilitate a baseline assessment of non-financial risks.
An assessment of top non-financial risks prioritizes risks to better
allocate resources.
A process-level view is used to approach risks and controls from a
business view, and to facilitate integrated assurance.
Standardized key controls are defined to support compliance and
risk management by design, and to enforce integrated assurance
and testing rigor.
Fundamental to the NFRM is the concept of a holistic approach. While
there are several different sources of operational risks, the process
towards the management of the risks always follows the same core
principle. This is that operational risks must be identified, assessed, and
prioritized, and underlying mitigating controls have to be effective. This
is the basic premise behind establishing an integrated approach.
At the Allianz Group level, it is important to monitor the quality of
the local implementation of this framework as a means of ensuring
that internal control system weaknesses are identified prior to the
occurrence of operational risk events (ex-ante).
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To fulfill this objective, Allianz relies on a methodology known as
the OE control environment rating. The OE control environment rating
evaluates the effectiveness of the framework at the operating entity
level by leveraging several sources of data and KPIs, which are then
further enhanced via certain qualitative criteria.
Additionally, an Allianz group-wide Executive Accountability
Regime (EAR) is in place to further support the integration of risk
management into business processes. It is essential that the Board of
Management demonstrates a strong risk culture to support this
integration - they lead by example in order to make clear throughout
the business that the management of risks is an important factor when
it comes to the achievement of business objectives.
For a selection of key executives, the EAR formalizes clear
accountability and ownership for risk management through tailored
individual accountability statements, which concretely outline role-
specific responsibilities to reinforce the Allianz purpose and strategy in
thinking and behavior across Allianz, as well as to mitigate key risks. In
addition, to reinforce these accountabilities amongst business leaders,
compliance with internal and external regulations as well as vigilance
in living the Group's risk culture is taken into account when determining
performance. In 2023, the EAR has been further enhanced to include
a minimum set of clearly defined key indicators to measure OE
management's timely responsiveness in the areas of Risk, Compliance,
Legal, Data Privacy, Audit, and People & Culture. These quantitative
indicators are complemented with a holistic qualitative assessment.
Other material risks not modeled in the internal
model
There are risks which, due to their nature, cannot be adequately
addressed or mitigated by setting aside dedicated capital. These risks
are therefore not considered in the internal model. For the identification,
analysis, assessment, monitoring, and management of these risks we
also use a systematic approach, with risk assessment generally based
on qualitative criteria or scenario analyses. The most important of
these other risks are strategic, liquidity, and reputational risk.
Strategic risk
Strategic risks are identified and evaluated as part of the Group's
Top Risk Assessment process and discussed in various Board of
Management-level committees (for example, GFRC). We also monitor
2_Property-Casualty is also referred to as Non-Life.
For the Life/Health business, policyholder behavior risks are risks
related to unpredictable, adverse behavior of policyholders in
exercising their contractual options, such as, for instance, early
termination of contracts, surrenders, partial withdrawals, renewals,
and annuity take-up options.
3_The return on risk capital is defined as the present value of future real-world profits on the capital
requirement (including buffer to regulatory requirements) held at the local level.
4_Internal pensions are evaluated and modeled based on deterministic cash flow models, following IAS 19
principles.
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In the Three Lines of Defense model, as a general principle, the
responsibility for the First Line of Defense rests with business managers
in the related undertaking. They are responsible for both the risks
taken and the returns from their decisions. The Second Line of Defense
is made up of independent global oversight functions including Risk,
Actuarial, Compliance, and Legal, which support the Board of
Management in defining the risk frameworks within which the business
can operate. Group Audit forms the Third Line of Defense,
independently and regularly reviewing risk governance
implementation, compliance with risk principles, performing quality
reviews of risk processes, and testing adherence to business standards,
including the internal control framework.
To ensure the effectiveness of our internal control system, all
functions are obliged to cooperate and exchange necessary
information and advice. Given that control activities may be exercised
by staff in different organizational units, appropriate mechanisms are
in place between the control functions to allow fully informed and
educated decision-making.
Group Risk Management function
Premium risk is subdivided into three categories: natural
catastrophe risk, terror risk, and non-catastrophe risk including man-
made catastrophes.
As part of our Property-Casualty business operations, we receive
premiums from our customers and provide insurance protection in
return. Premium risk is the risk that actual claims for the business in the
current year develop adversely relative to expected claims ratios.
Premium risk can be mitigated by reinsurance as well as by technical
excellence in underwriting. Assessing risks as part of the underwriting
process is therefore a key element of our risk management framework.
There are clear underwriting limits and restrictions which are defined
centrally and applied across the Group.
Premium risk
The Property-Casualty primary and reinsurance business of the
Allianz Group is exposed to premium-risk-related adverse
developments in the current year's new and renewed business, as well
as to reserve risks related to the business in force.
Property-Casualty
A comprehensive system of risk governance is achieved via the Policy
Framework by setting standards related to organizational structure,
risk strategy and appetite, limit systems, documentation, and
reporting. These standards ensure the accurate and timely flow of risk-
related information (e.g., to the Board of Management via the
Management Reporting) and a disciplined approach towards
decision-making and execution at both the global level (Board of
Management of Allianz SE) and local levels (i.e., the Operating and
Legal Entities).
Apart from risks from internal pensions, underwriting risk consists of
premium and reserve risks in the Property-Casualty business segment²
as well as biometric risks in the Life/Health business segment³ and
underwriting risks are not relevant for the Asset Management business
segment and our banking operations.
Clearly defined processes ensure that exposure concentrations
and limit utilizations are appropriately monitored and managed. The
setting of country and obligor exposure limits from the Group's
perspective (i.e., the maximum concentration limit), which are adopted
by Allianz SE and serve as maximum local limits for the other
operating entities, takes into account the Allianz Group's portfolio size
and structure as well as the overall risk strategy.
Our group-wide country and obligor group limit management
framework (Crisp¹) allows us to manage counterparty concentration
risk, covering both credit and equity exposures at the Group, Allianz SE,
and other operating-entity levels. This limit framework forms the basis
for discussions on credit actions and provides notification services
featuring the quick and broad communication of credit-related
decisions across the Group.
To ensure effective credit risk management, credit VaR limits are
derived from our internal risk capital framework, and rating bucket
benchmarks are used to define our risk appetite for exposures in the
lower investment-grade and non-investment-grade area.
Our credit insurance portfolio is modeled by Allianz Trade, based
on a proprietary model component which is a local adaptation of the
central internal credit risk model. Allianz Trade's loss profile is
integrated in the Group's internal credit risk model to capture the
concentration and diversification effects.
The loss profile of a given portfolio is obtained using a Monte
Carlo simulation, taking into account interdependencies and exposure
concentrations per obligor segment. The loss profiles are calculated at
different levels of the Allianz Group, and then fed into the internal
model at each level for further aggregation across sources of risk to
derive diversified credit risk.
The internal credit risk capital model takes into account the major
determinants of credit risk for each instrument, including exposure at
default, rating, seniority, collateral, and maturity. Additional
parameters assigned to obligors are migration probabilities and
obligor asset correlations reflecting dependencies within the portfolio.
Ratings are assigned to single obligors using a clearly defined
assignment process. The central components of this assignment
process are long-term ratings from external rating agencies, and
internal rating models in case of specific internal investment strategies.
If available, a dynamic adjustment using market-implied ratings and
the most recent qualitative information available is applied.
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Investment portfolio: Credit risk results from our investments in
fixed-income bonds, loans, derivatives, cash positions, and
receivables whose value may decrease depending on the credit
quality of the obligor. However, losses due to credit events can be
shared with the policyholder for certain life insurance products.
Credit insurance: Credit risk arises from potential claim payments
on limits granted by Allianz Trade to its policyholders. Allianz
Trade insures its policyholders against credit risk associated with
short-term trade credits advanced to policyholder's clients. When
the client of the policyholder is unable to meet its payment
obligations, Allianz Trade indemnifies the loss to the policyholder.
Reinsurance: Credit risk arises from potential losses from non-
recoverability of reinsurance receivables or due to default on
benefits under in force reinsurance treaties. Our reinsurance
partners are carefully selected by a dedicated team. Besides
focusing on companies with strong credit profiles, we may also
require letters of credit, cash deposits, funds withheld, or assets
held in trust, or other financial measures to further mitigate our
exposure to credit risk.
The Group's credit risk profile originates from three sources: our
investment portfolio, our credit insurance business, and our external
reinsurance.
Underwriting risk
Overall risk organization and roles in risk management
In the context of the Group's Committee Framework, the Group
Finance and Risk Committee (GFRC) reports to the Board of
Management and provides oversight of the Group's and Allianz SE's
risk management framework, acting as a primary early-warning
function by monitoring the Allianz Group's and Allianz SE's risk profiles
as well as the availability of capital. The GFRC also ensures that an
adequate relationship between return and risk is maintained.
Additionally, the GFRC defines risk standards, is the limit-setting
authority within the framework set by the Board of Management, and
approves major financing and capital management transactions.
Finally, the GFRC supports the Board of Management with
recommendations regarding the capital structure, capital allocation,
liquidity position, and investment strategy, including strategic asset
allocation for the different business segments.
Group Finance and Risk Committee
reports.
The ICS comprises various control concepts. Besides general
elements related to all control activities, and in addition to the Risk
Management Framework, specific controls are utilized, in particular,
but not exclusively, around entity level controls, financial reporting, IT,
risk capital calculation, underwriting (including products and
distribution), investments, data privacy, customer protection, and
protection/resilience. These are supplemented by management
Internal controls, therefore, describe the set of activities
undertaken by and within the Allianz Group to achieve defined control
objectives, applied across all business segments and lines of business.
These controls help to continuously review the effectiveness of the
relevant processes and procedures (including operations and
reporting), their coherence and proportionality within the Group, and
to identify potential actions for the timely rectification of deficiencies.
The ICS of the Allianz Group encompasses the entirety of activities
undertaken to perform controls in different areas.
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Opportunities
Our financial strength renders us resilient against market stress, while
our ongoing transformation creates capabilities allowing us to profit
from new opportunities in a fast-changing business environment. For
example:
We are continuously simplifying our products and processes,
harmonizing them across our businesses to consequently exploit
economies of scale.
We scale our customer-facing platforms (e.g., Mobility, Health, and
Travel) and integrate our business models with digital
marketplaces for customers and business partners (e.g., claims).
Building on a strong customer base, a deep understanding of
customer needs, and excellence in distribution, we strive to achieve
customer loyalty leadership in all countries we operate in.
In fast-growing regions, including Asia-Pacific, we are well-
positioned to capture growth opportunities from increasing
customer demand for Health & Protection.
-
Worldwide, there is growth potential from providing our asset
management clients (institutional and retail) with opportunities to
invest in both private and public markets, pursue returns
commensurate with their stated risk appetites, and engage in
various investment strategies, be they equity, fixed income or
alternatives.
Building on our strong footprint in Europe, we aim to profit from
ongoing consolidations, transform the capital productivity of in
force businesses, and gain market share in previously unexploited
markets.
Together with our partners, we capture opportunities in
bancassurance as well as future embedded insurance solutions
across products and geographies, tapping into new customer
segments.
We are enhancing Allianz's unit-linked platform by converging the
Group factory expertise from Life Insurance and Asset
Management.
We are focusing on sustainability by realizing ESG-based
investment products, social value-added insurance coverages
(e.g., flood, earthquake, and storm) and health prevention
products (e.g., oncological).
In a continuously evolving market where the demands of customers
constantly change, our knowledge of the industry and our expertise in
product development and risk management offers us great
opportunities to create timely customer-focused solutions.
Risk governance structure
Supervisory Board and Board of Management
Our approach to risk governance permits the integrated
management of local and global risks and ensures that our risk
profile remains consistent with both our risk strategy and our capacity
to bear risks.
Within our risk governance system, the Supervisory Board and the
Board of Management of Allianz SE have both Allianz SE and group-
wide responsibilities.
The Board of Management formulates business objectives and
sets a corresponding business strategy, risk strategy, and investment
strategy. It also defines risk limits and allocates risk capital to the
business activities within the Allianz Group. The core elements of the
risk framework are set out in the Allianz Group Risk Policy and
approved by the Board of Management. The Board of
Management reports to the Supervisory Board.
The Supervisory Board advises, challenges, and supervises the
Board of Management in the execution of its management activities.
The following committees support the Board and the Supervisory
Board on risk issues:
Supervisory Board Risk Committee
The Supervisory Board Risk Committee reports to the Supervisory
Board, where the information and the findings are discussed with the
Board of Management. It monitors the effectiveness of the Allianz risk
management framework. Furthermore, it focuses on risk-related
developments as well as general risks and specific risk exposures, and
ensures that the business strategy is aligned with the risk strategy.
For more information, please refer to the paragraph "Risk
Committee" in the Supervisory Board Report.
Credit risk is measured as the potential economic loss in the value of
our portfolio that would result from either changes in the credit quality
of our counterparties ("migration risk") or the inability or unwillingness
of a counterparty to fulfill contractual obligations ("default risk”).
Credit risk
Allianz's Group Investment Committee has defined a framework
for standard transactions for real estate equity and commercial real
estate loan investments. These standards outline diversification
targets, minimum-return thresholds, and other qualitative and
quantitative requirements. All transactions that do not meet these
standards or have a total investment volume (including costs)
exceeding a defined threshold must be reviewed individually by Group
Risk and other Group center functions. In addition, all applicable limits
must be respected, in particular those resulting from strategic asset
allocation as well as its leeways and risk limits, with regards to an
investing entity's portfolio.
Despite the risk of decreasing real estate values, real estate is a
suitable addition to our investment portfolio due to good
diversification benefits, as well as to the contribution of relatively
predictable, long-term cash flows.
Qualitative assessments as part of the Insurance and Asset
Management risk framework include Top Risk Assessments, as well as
group-challenged self-assessments and selected group reviews of the
maturity of the local risk management systems and the adherence to
the risk policy framework. Key results of the entities' qualitative risk
assessments are reported to the Group on a regular basis.
As a consequence, the internal model is fully integrated in the
steering of the insurance business, and its application satisfies the so-
called "use test" requirement under Solvency II.
Consistent with industry practices, the Asset Management
business segment is measured on its efficiency based upon cost to
income, i.e., the Cost Income Ratio (CIR).
RORC and RoE insurance are indicators that allow us to identify
profitable lines of business and products on a sustainable basis. For
new Life/Health insurance business, RORC reflects the expected
average return against the capital commitment over the lifetime of the
products and is a key criterion for capital allocation decisions. For
Property-Casualty insurance business, the RoE insurance reflects the
return against the underlying equity which is allocated to the specific
portfolios based on the respective risk capital requirements. This
allows us to take appropriate risk-based decisions.
of risk and return, which is based on the internal model and is
supported by scenario analyses. Risk and concentrations are actively
restricted by limits based on our internal model. The Life/Health
business segment is steered - in addition to the Return on Equity - by
a return on risk capital³ (RoRC) approach for new business at the
product level, while for the Property-Casualty business segment a
return on equity (RoE insurance) at the portfolio level is used.
Allianz steers its business portfolio taking a comprehensive view
In addition, central elements of Allianz's dividend policy are linked
to Solvency II capitalization based on the internal model. This helps us
to ensure a consistent view on risk steering and capitalization in line
with the Solvency II framework.
Unlike the insurance business, which is balance-sheet sensitive,
our Asset Management business is mainly a cash flow business.
Therefore, the risk of the Asset Management business segment is also
analyzed through the impact of pre-defined material stress scenarios
on the operating profit. These are one component in a system of key
risk indicators for Asset Management and are regularly monitored.
These risk limits are reviewed on a regular basis with First Line of
Defense business owners, confirming the pre-assessments derived by
the entity's Risk Management functions. These risk limits (sometimes
called risk bearing capacity thresholds) are presented to the
underlying Risk Committee and are ultimately ratified by the Audit
Committees and/or Executive Management Boards.
With Solvency II being the regulatory regime relevant for the
Group, our risk profile is measured and steered based on our approved
Solvency II internal model². We have introduced a target solvency ratio
range in accordance with Solvency II, based on pre-defined stress
scenarios for both. the Group and related undertakings,
supplemented by ad-hoc scenarios, historical and reverse stress
tests, and sensitivity analyses.
We consider diversification across different business segments,
lines of business and regions to be an important element in managing
our risks efficiently, as it limits the economic impact of any single event
and contributes to relatively stable results. Our aim is to maintain a
balanced risk profile without any disproportionately large risk
concentrations and accumulations.
Allianz's Asset Management business segment is primarily
exposed to operational risk, reputational risk, and business risk.
Market and credit risk are primarily borne by the segment's underlying
investors, be they internal or third-party clients.
We are exposed to a variety of risks, including market, credit,
underwriting, business, operational, strategic, liquidity,
and
reputational risks.
Risk-based steering and risk
management¹
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Annual Report 2023 - Allianz Group
132
Group Actuarial contributes towards assessing and managing
risks of the Allianz Group and Allianz SE in line with regulatory
requirements, in particular for those risks whose management requires
actuarial expertise. The range of tasks includes, amongst others, the
calculation and monitoring of technical provisions, technical actuarial
assistance in business planning, reporting and monitoring of the
results, and supporting the effective implementation of the risk
management system. The latter includes joining Group Risk in a
discipline to regularly monitor internal risk capital models,
assumptions, and parameters - as well as their changes. It also
includes providing support regarding capital efficiency management,
contributing to the modeling of insurance risk capital, and supporting
the identification of underwriting risks via independent reserve reviews.
Group Compliance has defined preventive, detective, and
responsive controls for the assigned compliance risk areas, which are
based on requirements specified in the compliance standards and
Code of Conduct. A compliance control catalog, including the
development of control objectives arising from the various corporate
compliance guidelines, as well as a cataloging of normative risk
scenarios and defined key control activities, are available.
Group Legal and Group Compliance seek to mitigate legal risks
for the Allianz Group and Allianz SE with support from other
departments. The objectives of both functions are to ensure that laws
and regulations are observed, to react appropriately to all impending
legislative changes or new court rulings, to attend to legal disputes
and litigation, and to provide legally appropriate solutions for
transactions and business processes. In addition, Group Compliance
- in conjunction with Group Legal and other experts involved - is
responsible for integrity management, which aims to protect the
Allianz Group as well as Allianz SE and our other related undertakings
and employees from regulatory and reputational risks.
In addition to Group Risk and the local Risk Management functions,
legal, compliance, and actuarial functions established at both the
Group and the entity levels constitute additional components of the
Second Line of Defense.
Other functions and bodies
Consistent implementation of the Group's risk management
framework in the related undertakings, including regular dialogue
between the Group and the entity, is ensured, for example, through
Group Risk representation on local Risk Committees (or equivalent),
and through regular assessment of the appropriateness of the local
risk management framework and performance of the Chief Risk
Officers by Group Risk. Moreover, the Group Chief Risk Officer must be
consulted on decisions regarding the staffing, objectives, and
performance evaluation of local Chief Risk Officers. To further
enhance the regular dialogue at management level focusing on the
internal control environment, the Group is implementing the
Governance and Controls Dialogue as one key instrument that should
further enhance the already existing strong strategic and financial
planning procedures known as the Strategic Dialogue and the
Planning Dialogue. The Governance and Controls Dialogue will be
enabled by an integrated Governance and Controls Dashboard, to
assure a holistic overview of the risk landscape as well as external
factors that may be potential risk drivers.
The insurance and asset management operations of our related
undertakings are subject to regular reviews in the context of the group-
wide internal risk management and control system. The control
measures are accompanied by local Risk Management functions,
headed by Chief Risk Officers, which are independent from business
line management. The Risk Management functions run risk-
monitoring and -controlling processes, locally set up by the respective
entities. Furthermore, the local activities are subject to additional
reviews by regional entities, or the Allianz Asset Management GmbH
for asset management. This ensures the adherence to Group
requirements and the related reporting. A local Risk Committee
supports both the Board of Management (or an equivalent executive
committee) and the Chief Risk Officer by acting as the primary risk
monitoring and controlling body.
Related undertakings are responsible for their own risk management,
including adherence to both external requirements (for example,
those imposed by local regulators) and internal standards. Their
Boards of Management are responsible for setting and approving a
local risk strategy - supporting the Group's risk strategy - during the
annual Strategic and Planning Dialogues with the Group and for
ensuring adherence to their risk strategy.
Related undertakings
Market risk
Integrated Risk and Control System for financial
and non-financial reporting
As an inherent part of our insurance operations, we collect premiums
from our policyholders and invest them in a wide variety of assets. The
resulting investment portfolios back the future claims payments and
benefits to our customers. In addition, we also invest shareholders'
capital, which is required to support the business. Finally, we use
derivatives, mostly to hedge our portfolio against adverse market
movements (for example, protective puts) or to reduce our
reinvestment risk (for example, by using forwards, swaps, or
As the fair values of our investment portfolios and liabilities
depend on the changes observed in the financial markets, we are
exposed to the risk of adverse financial market developments. The
long-dated liabilities in our Life/Health business segment and those
attributable to internal pensions contribute to interest rate risk, in
particular when they cannot be fully matched by available
investments due to long maturities. In addition, we are also exposed to
adverse changes in equity and real estate prices, credit spread levels,
inflation, implied volatilities, and currencies, which might impact the
value of our assets and liabilities.
Real estate risk
Allianz SE and the other related undertakings of the Allianz Group
typically invest in assets which are denominated in the same currency
as their liabilities. However, some foreign currency exposures are
allowed to support portfolio diversification and tactical investment
decisions. Our largest exposure to foreign currency risk comes from our
non-euro Group companies: Whenever the euro strengthens, the euro
equivalent net asset value of our foreign subsidiaries will decline
from an Allianz Group and Allianz SE perspective; however, at the
same time, the capital requirements in euro will decrease, partially
mitigating the total impact on Allianz Group's and Allianz SE's
capitalization. Based on the Allianz Group's foreign exchange
management limit framework, currency risk is monitored and
managed at the levels of the Allianz Group, Allianz SE, and the other
operating entities of the Allianz Group.
Currency risk
Fixed-income assets such as bonds may lose value if credit spreads
widen. However, our risk appetite for credit spread risk takes into
account the underlying economics of our business model: As a liability-
driven investor, we typically hold fixed-income assets until maturity.
This implies that we are less affected economically by short-term
changes in market prices. In our capacity as a long-term investor, this
gives us the opportunity to invest in bonds yielding spreads over the
risk-free return and earning this additional yield component.
Credit spread risk
events.
Insurance-focused Allianz entities may hold equity investments to
diversify their portfolios and to take advantage of expected long-term
returns. Strategic asset allocation benchmarks, investment and equity
sensitivity limits are used to monitor and manage these exposures. In
addition, equity investments fall within the scope of the credit risk
platform to avoid single-name risk concentrations. Risks from changes
in equity prices are normally associated with decreasing share prices
and increasing equity price volatilities. As stock markets might also
increase, opportunities may arise from equity investments in those
Equity risk
We are exposed to changing inflation rates, predominantly due to our
Property-Casualty insurance obligations but also due to inflation-
indexed internal pension obligations. While inflation assumptions are
taken into account in our underwriting, unexpected rising rates of
inflation will increase both future claims and expenses, leading to
higher liabilities; conversely, if future inflation rates were to be lower
than assumed, liabilities would be lower than anticipated. The risk that
inflation rates deviate from inflation assumptions is incorporated in our
internal model. Potential severe structural breaks are monitored via
historical and ad-hoc stress tests. Measures have been taken to
manage currently observed elevated inflation levels. On the Property-
Casualty side, this includes continuous monitoring of claims inflation,
sufficient provisioning, and timely adjustments of premium rates to
reflect both actual and expected inflation.
Inflation risk
Allianz is a liability-driven investor. We may suffer an economic loss in
the event of falling interest rates as we reinvest maturing assets at
lower rates prior to the maturity of liability contracts, if the duration of
our assets is shorter than our liabilities. This risk is higher for long-dated
life investment and savings products as well as for internal pensions,
with a significant part of the Life/Health business segment's interest
rate risk coming from Western Europe, mainly from traditional life
insurance products with guarantees. Conversely, opportunities may
arise when interest rates increase. Interest rate risk is managed within
our asset/liability management process and controlled via interest
rate sensitivity and duration mismatch limits for the Group and the
local entities.
Interest rate risk
With respect to investment assets of the Property-Casualty and
Life/Health business segments managed by Allianz's asset managers,
guidelines applicable to our insurance undertakings must be clearly
elaborated as part of the asset managers' client investment
guidelines. Notwithstanding the above, portfolios managed by
Allianz's asset managers for the benefit of third-party investment
clients must adhere to the investment frameworks and constraints as
defined by and agreed with them.
Finally, guidelines are provided by the Group regarding certain
investments, new investment products, and the use of derivatives.
Compliance with these guidelines is controlled by the risk and
controlling functions at Allianz SE and the other operating entities.
Group Risk is managed by the Group Chief Risk Officer, who also serves
as the Chief Risk Officer of Allianz SE. Group Risk supports Allianz SE's
Board of Management, including its committees, by performing
various analyses, communicating information related to risk
management, and preparing and implementing committee
decisions.
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Annual Report 2023 - Allianz Group
-
Institutions for Occupational Retirement Provision (IORP), sectoral requirements are applied. Without
loss of generality, we might use the term internal model in the following chapters, e.g., in case of
descriptions also referring to entities that use the internal model, or descriptions focusing on processes
with respect to the internal model components.
133
2_From a formalistic perspective, the German Supervisory Authority deems our model to be "partial"
because not all our entities use the internal model. Some of our smaller insurance entities report under
the standard formula and others apply third country equivalence. For asset management, banking, and
1_This section contains specific risk disclosures as required by IFRS 17 and IFRS 7 relating to the Notes to
the Consolidated Financial Statements.
Furthermore, we have put in place standards for hedging
activities, due to the exposure to fair-value options embedded in our
life insurance products. In addition, we optimize our in-force portfolio
through transactional levers, such as partly or entirely divesting
discontinued products and businesses; structural levers, such as
adjusting the product mix; and operational levers, such as partnering
with specialists to manage these books of legacy products, also called
life back books.
Strategic asset allocation benchmarks and risk limits - including
stand-alone interest rate and equity sensitivity limits, and foreign
exchange exposure limits - are defined for the Group, Allianz SE, and
the other related undertakings. Limits are closely monitored and, if a
breach occurs, countermeasures are implemented which may include
escalation to the respective decision-making bodies and/or the closing
of positions.
To measure these market risks, real-world stochastic models for
the relevant risk factors are calibrated using historical time series to
generate possible future market developments. After the scenarios for
all the risk factors are generated, the asset and liability positions are
revalued under each scenario. The worst-case outcome of the sorted
portfolio profit and loss distribution at a certain confidence level
(99.5%) defines the market Value at Risk (VaR). For entities modeled
using the standard formula, the market risk is based on aggregating
the losses under specified standard formula shock scenarios.
swaptions). Asset/liability management (ALM) decisions are taken
based on the internal model, considering both the risks and the returns
on the financial market.
-
The following information is provided pursuant to §289(4) and §315(4)
of the German Commercial Code ("Handelsgesetzbuch – HGB"). For
general information about our Integrated Risk and Control System
(IRCS) and the Non-Financial Risk Management (NFRM), please refer
to the section "Operational risk".
Accounting and consolidation processes
Going beyond Management's evaluation of control measures
and tactics, various audits undertaken by both internal and external
auditors have been completed to confirm the robustness and
persistence of the internal control system. The Asset Management
segment in particular has also undergone various regulatory reviews
and audits throughout various regions, and no significant issues or
topics have been raised by the regulators.
As part of our settlement procedures, Allianz has also completed
control environment assessment steps related to our U.S. investment
advisory services. These assessments were finalized and conclusions
reported to the U.S. Securities and Exchange Commission earlier in
2023. As this was one of the final key milestones, the Allianz Group has
fulfilled its legal obligations to the U.S. authorities.
In addition to efforts triggered by the AllianzGI Structured Alpha
matter, a strengthening of trainings for safeguarding functions and
Allianz Global Executives further improved the Allianz Group's risk
management framework in the last year.
Premium risk is estimated based on actuarial models that are
used to derive loss distributions. Non-catastrophe risks are modeled
using frequency and severity models for large losses and aggregate
loss distribution models for attritional losses. Natural disasters such as
earthquakes, storms, and floods represent a significant challenge for
risk management due to their high accumulation potential for higher
return periods. For natural catastrophe risks, we use special modeling
techniques which combine portfolio data (geographic location,
characteristics of insured objects, and their values) with simulated
natural disaster scenarios to estimate the magnitude and frequency of
potential losses. Where such stochastic models do not exist, we use
deterministic, scenario-based approaches to estimate potential losses.
Similar approaches are used to evaluate risk concentrations for terror
events and man-made catastrophes, including losses from cyber
incidents and industrial concentrations.
Our strategy
Our business aspirations
The Board of Management of Allianz SE has defined the following
objectives for the Allianz Group's medium-term strategy, building on
the success of the efforts to simplify the company, with the motto
"Simplicity at Scale":
Growth: We consistently seek to capture growth opportunities for
our business, and to create growth opportunities for our
employees. This is how we ensure our leading market position. Due
to our full breadth of products and services, we offer
comprehensive solutions that meet our customers' needs and
make us a trusted partner.
Margin Expansion: We need to be profitable and efficient. To do
so we are continuously improving our productivity, including in our
distribution channels, while seeking to grow in high margin
business segments. Additionally, we will continue our
transformation so that our processes are simpler, digital, and
scalable.
Capital Efficiency: We consistently seek ways to use our capital in
the most effective way and take action when, among others, it falls
below our RoE threshold.
These objectives have been translated into clear ambitions for the
2022 to 2024 period. With regard to financial performance, we strive
for a return on equity (excluding unrealized gains/losses on bonds²) of
more than 13 %, while aiming to grow our earnings per share from € 21
(baseline full year 2021, as communicated in the Allianz Capital
Markets Day 2021) to approximately €25³ by 2024 (reflecting a
compound annual growth rate of 5% to 7 %).
To ensure the sustainability of our performance, we have set
ourselves non-financial targets that reflect strong underlying
organizational health. For customer loyalty, our ambition is for more
than 50% of the business segments of our entities to be or become
rated by their customers as a "loyalty leader" in terms of the digital Net
Promoter Score (dNPS) by 2024. In terms of employee engagement,
our ambition is to score above 75 % on the Inclusive Meritocracy Index.
At the same time, we have also set the target to become a clear leader
in sustainability and diversity.
Our business strategy
To implement these strategic objectives, to realize our growth
ambition, and to accelerate our value creation, we have defined five
additional strategic areas of focus:
Transforming the Life/Health and Asset Management franchise:
Fully address protection and savings needs and accelerate
transformation to a capital-efficient model, leveraging our
1_Unaudited.
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2_Based on IFRS 4.
3_Mid-point of our EPS target range.
Annual Report 2023 - Allianz Group
C_Group Management Report
strengths in Asset Management to deliver investor-defined
risk/return requirements, through various investment disciplines.
Expanding our Property & Casualty leadership position: Beat the
best players in each market, building on productivity gains and
scale, in retail motor and beyond.
Boosting growth through scalable platforms: Scale our customer-
facing platforms and build new operating platforms to grow our
business volume and margin.
Group Risk strengthens and maintains the Group's risk network
through regular and close interaction with the management of related
undertakings and with other key stakeholders, such as the local
finance, risk, actuarial, underwriting, and investment departments. A
strong group-wide risk network enables the Allianz Group to influence
risk culture across the Group, identify risks at an early stage, and make
management aware of these risks.
Deepening the global vertical integration and execution of
agility: Verticalize operating models across lines of business to
unleash value from our skills and scale.
As highlighted in our prior year report, the settlement of Structured
Alpha related litigations was finalized both with investors and the U.S.
Securities and Exchange Commission. While the uncertainties linked to
this litigation have now been completely curtailed, the Allianz Group
continues to exercise diligence in assuring that the Asset Management
segment's internal control systems, as well as those of the Group,
benefit from the key learnings stemming from this event. We continue
to enhance risk management, compliance, and other assurance
measures. This covers not only our response to Structured Alpha
derived root causes, but we have ensured that periodic reviews of our
internal controls systems' frameworks and underlying procedures also
remain sensitive to a constant and rapidly evolving risk landscape.
Structured Alpha funds of AllianzGI U.S.
Group Risk also supports the Board of Management in
developing the risk management framework which covers risk
governance, risk strategy and appetite - and risk monitoring and
reporting. Group Risk's operational responsibility encompasses
assessing risks across all risk categories and monitoring limits and
accumulations of specific risks across business lines, including natural
and human-caused (regulatory terminology: man-made)
disasters and exposures to financial markets and counterparties.
Allianz will be required to comply with Corporate Sustainability
Reporting Directive (CSRD) regulations by the end of the financial year
2024. While the new CSRD reporting requirements are being
established, our internal control system is undergoing continual
enhancements. A dedicated project helps to ensure diligent
preparation for CSRD implementation, including the early
identification of where improvements are necessary.
The accounting and consolidation processes we use to produce our
Consolidated Financial Statements are based on a central
consolidation and reporting IT solution and local general ledger
solutions. The latter are largely harmonized throughout the Group,
using standardized processes, master data, posting logics, and
interfaces for data delivery to the Holding. Access rights to accounting
systems are managed according to strict authorization and hierarchy-
linked procedures.
Accounting rules for the classification, valuation, and disclosure of
all items in the balance sheet, the income statement, and notes related
to the annual and interim financial statements are defined primarily in
our Group accounting manual.
Control system for financial and non-financial reporting
Specific internal controls for financial reporting, which follow the Non-
Financial Risk Management (NFRM) approach and the general
Integrated Risk and Control System (IRCS), are embedded in the
accounting and consolidation processes to safeguard the accuracy,
completeness, and consistency of the information provided in our
financial statements.
The dedicated financial reporting control system approach can be
summarized as follows:
-
A centrally developed risk catalog is linked to individual accounts.
This risk catalog is reviewed on a yearly basis and is the starting
point for the definition of the Group's as well as the operating
entities' scope of financial reporting risks. In the course of the
scoping process, both materiality and susceptibility to a
misstatement are considered simultaneously. In addition to the
quantitative calculation, we also consider qualitative criteria, such
as the expected increase in business volume or the complexity of
transactions.
Based on the centrally provided risk catalog, our local entities
identify risks that could lead to material financial misstatements.
Preventive and detective key controls addressing financial
reporting risks have been put in place to reduce the likelihood and
impact of financial misstatements. When a potential risk is
detected or materializes, actions are taken to reduce the impact of
the financial misstatement. Given the strong dependence of
financial reporting processes on information technology systems,
we have also implemented IT controls.
Governance
Group Accounting & Reporting and other Group center functions, the
Group Disclosure Committee, and our operating entities support the
Allianz SE Board of Management to ensure the completeness,
accuracy, and reliability of our Consolidated Financial Statements.
Group Accounting & Reporting also helps to ensure that non-financial
reporting requirements are fulfilled and that data quality requirements
are adhered to.
The Group Disclosure Committee ensures that the Board
members are made aware of all material information that could affect
our disclosures and assesses the completeness and accuracy of the
information provided in the quarterly statements, half-year and
annual financial reports (including the Non-Financial Statement) as
Iwell as in the Solvency and Financial Condition Report and the
Regular Supervisory Report. In 2023, the Group Disclosure Committee
met on a quarterly basis before the quarterly statements and financial
reports were issued. In addition, the Group Disclosure Committee
reviewed and approved the Solvency II reports prior to issuance.
Subsidiaries within the scope of our control system are individually
responsible for adhering to the Group's internal governance and
control policy and for creating local Disclosure Committees that are
similar to the Group-level committee. The entities' CEOs and CFOs
provide periodic signoffs to the management of Allianz SE, certifying
the effectiveness of their local systems of internal control as well as the
completeness, accuracy, and reliability of financial data and non-
financial information reported to the Holding.
Compliance management system
Operating entity level controls to address non-financial reporting
risks have been introduced and will be expanded going forward.
Group Audit and local internal audit functions ensure that these
controls are subject to regular control testing, in order to assure
reasonable design and operating effectiveness. Internal Audit
does so through a comprehensive risk-based approach that
assesses the key controls of the company's internal procedures
and processes, including local and group-internal controls over
financial reporting risks, from an integrated perspective.
For the management of compliance risks, Allianz maintains a
Compliance Management System (CMS). At the center of the CMS,
Allianz has established compliance functions at the levels of the
Allianz Group and the local operating entities as part of the Second
Line of Defense. For details of the CMS, or more specifically of anti-
corruption and bribery matters, please refer to the Non-Financial
Statement.
An assessment of the effectiveness of the Allianz operating entities'
Risk Management functions, as well as of the implementation
maturity of the risk management framework and corresponding
risk management processes, is performed following the Risk
Assessment, Diagnostics, Analysis and Reporting (RADAR) process.
Allianz has dedicated guidelines and policies that clearly define
the general principles, the roles and responsibilities, as well as the
processes, for both the risk management framework and the
internal control system.
In addition, external auditors are independently and regularly
reviewing Allianz Group's risk governance as well as performing
quality reviews of risk processes, including the ICS.
The risk management system encompasses both a set of principles for
specifically addressing the operational and reputational risks
stemming from non-compliance with laws, regulations, and other
external requirements that represent a significant compliance risk
(hereafter referred to as "compliance risks"), as well as their reflection
in internal corporate rules.
Our Group risk management framework, including the Group's
internal control system, are regularly the subject of audit activities
performed by our Group's Internal Audit function.
This assessment is based on several factors:
We run an established system to monitor the effectiveness of the
internal control system and to report and promptly address
deficiencies, such as control failures, operational loss events,
financial limit breaches, or system of governance issues. On a
quarterly basis, the Group's Internal Control System Report is
jointly prepared by the Group's key control functions, and shared
with the Supervisory Board Audit Committee and the members of
the Board of Management of the Allianz SE. The report
aggregates and rates the severity of known weaknesses in the
internal control system, while also tracking their timely and
satisfactory resolution.
Management assessment¹
C_Group Management Report
Annual Report 2023 - Allianz Group
129
The management feels comfortable with the Group's overall risk
profile. It has no indication that, as of 31 December 2023, our risk
management system or internal control system is inappropriate or
ineffective, and is therefore confident that they meet both the
challenges of a rapidly changing environment and day-to-day
business needs.
65.6
18.3
125.8
20.3
74.3
A
0.3
31.6
110.4
5.2
1.0
3.6
101.5
0.8
132.4
117.7
BBB
37.7
35.0
0.1
0.3
99.7
0.9
6.0
7.5
2.2
0.6
0.8
82.7
10.0
Equity
2023
2022
2023
2023
2022
AAA
30.3
38.6
34.5
33.9
5.3
4.6
2.6
2.1
10.0
13.9
93
AA
78.7
69.1
9.6
9.8
22.8
21.0
3.9
3.2
6.3
2022
C_Group Management Report
1.9
Total Group
Share of total Group pre-diversified
risk
2023
€ mn
2,748
2022¹
2,695
€ mn
1,657
1,531
€ mn
286
€ mn
4,691
%
Corporate and Other
6.86
As of 31 December
Property-Casualty
Life/Health
by business segment.
25,982
39.7%
1_2022 risk profile figures adjusted based on the impact of 2023 model changes.
In 2023, the Allianz Group's total pre-diversified market risk barely
changed, as a strong increase in equity risk was offset by a decrease in
interest rate risk and a higher risk relief from inflation risk.
The rise in the contribution of equity risk to market risk, especially
in the Life/Health business segment, primarily resulted from stronger
equity markets, together with a higher exposure to alternative equity
investments and diversification effects within market risk. A decrease
in interest rates, together with a lower duration gap, caused a shift in
the contribution of interest rate risk and inflation risk to market risk.
145
Annual Report 2023 - Allianz Group
C_Group Management Report
Interest rate risk
As of 31 December 2023, our interest-rate-sensitive investments
excluding unit-linked business - amounting to a market value of
€360.7 bn (2022: € 347.1 bn)¹ - would have gained € 32.4 bn (2022:
€32.1bn) or lost € 27.7 bn (2022: € 27.7 bn)² in value in the event of
interest rates shifting by -100 and +100 basis points, respectively.
However, these impacts would have been partially offset by
policyholder participation. In addition, the Solvency II Own Funds
effect is much more limited due to our active duration management,
reducing the duration mismatch of the Group to 0.2 years (from 0.6
years in 2022), representing Solvency II liabilities of shorter duration
than assets.
The impact of a 0.5% increase in interest rates on the Solvency II
ratio is shown in the table "Solvency II regulatory capitalization ratio
sensitivities" in the section "Solvency II regulatory capitalization".
Equity risk
As of 31 December 2023, our investments excluding unit-linked
business that are sensitive to changing equity markets - amounting to
a market value of €77.4 bn³ (2022: € 73.6 bn) would have lost
€ 19.7 bn (2022: € 18.4 bn) in value assuming equity markets had
declined by 30%. However, this impact would have been partially
offset by policyholder participation.
Credit risk
The following table presents our group-wide risk figures for credit risks
Allianz Group: Risk profile - allocated credit risk by business segment
(total portfolio before tax and non-controlling interests)
pre-diversified
1_2022 risk profile figures adjusted based on the impact of 2023 model changes.
286
4,513
6.89
2022
2023
2022
2023
Total
Short-term investments
ABS/MBS
Banks
Corporate bonds
Covered bonds
Government bonds
As of 31 December
Type of issuer
Book values, € bn
Rating distribution of Allianz Group's fixed-income portfolio¹
2023
2022
2023
2022
Throughout 2023, the Allianz credit portfolio was not affected by
significant movements or events with respect to credit migration risk
and default risk.
Ultimately, the overall credit risk for the Allianz Group increased
by € 0.2 bn to € 4.7 bn (2022: € 4.5 bn).
As of 31 December 2023, the maximum exposure to credit risk5
from debt investments measured at fair value through other
comprehensive income amounted to € 583.8 bn (2022: € 594.1 bn), the
theoretical maximum exposure to credit risk from credit insurance
amounted to € 1,185.7 bn (2022: € 1,102.0 bn), and the maximum
exposure to credit risk from reinsurance amounted to € 28.1 bn (2022:
€ 28.8 bn).
Credit risk - investments
As of 31 December 2023, the credit risk arising from our investment
portfolio accounted for 64.8% (2022: 64.2 %) of our total Group pre-
diversified internal credit risk.
Credit risk in the Life/Health business segment is primarily driven
by long-term assets covering long-term policyholder liabilities. Typical
investments are government bonds, senior corporate bonds, covered
bonds, self-originated mortgages and loans, and a modest number of
derivatives. In the Property-Casualty business segment, fixed-income
securities tend to be short- to mid-term, due to the nature of the
business, and are not subject to policyholder participation.
25,849
37.8%
The counterparty credit risk arising from derivatives is low, since
derivatives usage is governed by the group-wide internal guideline for
collateralization of derivatives, which stipulates master netting and
collateral agreements with each counterparty and requires high-
quality and liquid collateral. In addition, Allianz closely monitors
counterparties' credit ratings and exposure movements.
1 The stated market value includes all assets from internal model entities whose market value is sensitive
to interest rate movements (excluding unit-linked business) reflecting the Solvency II framework, and
therefore is not based on classifications given by accounting principles.
2_The effects do not consider policyholder participation.
3 The stated market value includes all assets from internal model entities whose market value is sensitive
to equity movements (excluding unit-linked business) reflecting the Solvency II framework, and therefore
is not based on classifications given by accounting principles.
4 The effect does not consider policyholder participation.
5 The stated investment exposure figures reflect gross carrying amounts. They are based on IFRS
requirements and include investments that are not within the scope of the Solvency II framework.
6_Additionally, 10.8 % (2022: 11.7 %) of our total Group pre-diversified internal credit risk is allocated to
receivables, potential future exposure for derivatives and reinsurance, and other off-balance sheet
exposures.
146
As of 31 December 2023, the rating distribution of our fixed-
income portfolio based on issue (instrument) ratings was as follows:
Annual Report 2023 - Allianz Group
631
3,566
Share of total Group pre-diversified risk
(244)
328
(1,171)
(407)
2,429
2,451
2,908
2,891
1,741
1,585
541
216
6,205
7,064
Life/Health
Property-Casualty
(27)
2022¹
2022¹
Real estate
Currency
Total
As of 31 December
2023
2022¹
2023
2022¹
2023
2022¹
2023
2022¹
2023
2022¹
2023
2023
3,434
(237)
(58)
168
(76)
46
2,053
1,853
Total Group
(194)
3,581
(1,511)
(472)
6,908
7,004
15,959
11,672
3,626
166
1,517
1,773
310
4,262
4,242
11,278
7,264
1,719
1,813
596
1,061
369
17,064
Corporate and Other
77
(181)
(103)
(7)
216
17,591
0.3
13,344
145.8
6,620
22
47
14,693
2,280
1,647
2,280
1,647
1,580
1,178
29
25
5,970
5,473
7,092
6,620
33
2,336
Share of total Group pre-diversified risk
73
33
1,768
17,006
24.87 %
73
15,064
22.99%
1_As risks are measured in an integrated approach and on an economic basis, internal risk profile takes reinsurance effects into account.
2_2022 risk profile figures adjusted based on the impact of the 2023 model changes.
7,092
During 2023, the total Group pre-diversified underwriting risk capital
increased by € 1.9 bn.
5,473
25
Life/Health
Corporate and Other
Total Group
Premium natural catastrophe
2023
20222
Premium terror
2023
Premium non-catastrophe
Reserve
Biometric
Total
20222
2023
20222
2023
20222
2023
20222
2023
20222
1,580
1178
29
5,970
Property-Casualty
Property-Casualty
Property-Casualty loss ratios
69.5
67.8
68.0
66.5
66.0
64.0
66.5
64.2
65.6
64.2
66.2
64.6
66.0
65.1
The top five perils contributing to the natural catastrophe risk as of
31 December 2023 were: windstorms in Europe, tropical cyclones in the
USA, floods in Germany, earthquake in Australia, and hail in Germany.
Life/Health
The underwriting risk capital contribution of biometric risk increased by
€0.6 bn compared to the previous year. This is mainly due to changes
in the interest rates environment. Materially lower EUR interest rates in
particular led to a significant increase in longevity risk. In addition, local
model calibration updates had an upward impact on mortality risk.
Contributions from the Property-Casualty and the Corporate and
Other business segments are generated by the longevity risk of the
internal pension schemes they contain.
Due to effective product design and the diversity of our products,
there were no significant concentrations of underwriting risks within
our Life/Health business segment.
Business risk
Business risk capital increased by 0.4 bn to € 6.5 bn (2022: € 6.1 bn).
The main reason is the impact of the significantly lower EUR interest
rates on the cost risk.
Operational risk
Overall, the operational risk capital showed a slightly increased risk
profile after the regular annual update of central and local
parameters (increase by 0.4 bn from €3.9 bn in 2022 to € 4.3 bn in
2023), mainly due to regulations and increasing cyber threats in some
local markets.
Liquidity risk
Detailed information regarding our liquidity risk exposure, liquidity,
and funding - including changes in cash and cash equivalents - is
provided in Liquidity and Funding Resources and in notes 7.3.1, 7.3.2
and 7.5 to the consolidated financial statements. As can be inferred
from the section on the management of liquidity risks, while these are
quantified and monitored through regular stress test reporting as well
as properly managed, they are not quantified for risk capital purposes.
148
Annual Report 2023 - Allianz Group
Credit spread
63.9
The increase in Property-Casualty underwriting risk was mainly driven
by exposure increases affecting all sources of risk. The increase in
64.5
67.4
%
Loss ratios IFRS 17¹
Loss ratio including reinsurance results
Loss ratio without natural catastrophe including reinsurance results
Loss ratios IFRS 42
premium natural catastrophe risk was mainly impacted by a change in
Group reinsurance structure.
The loss ratios for the Property-Casualty business segment for the
past ten years are presented in the following table:
2023
2022
2021
2020
2019
2018
2017
2016
2015
2014
69.3
68.4
65.9
65.6
Loss ratio
Loss ratio without natural catastrophes
1_Represents (discounted) claims and insurance benefits incurred including risk adjustment and reinsurance results, divided by insurance revenue.
2_Represents claims and insurance benefits incurred (net), divided by premiums earned (net).
67.0
As of 31 December
Allianz Group: Risk profile - allocated underwriting risk by business segment and source of risk (total portfolio before non-controlling interests)¹
pre-diversified, € mn
C_Group Management Report
CCC
0.3
0.4
0.2
0.2
0.1
0.1
0.1
0.8
0.8
CC
0.2
0.2
0.1
0.1
0.2
0.2
0.1
0.1
C
D
Not rated
Total
5.7
0.4
188.1
5.3
0.2
146.4
BB
7.2
6.7
9.1
11.5
0.4
0.4
0.2
0.1
0.0
0.0
16.8
18.7
B
1.6
2.9
3.2
2.5
0.1
0.1
0.1
0.1
0.1
0.2
181.5
44.5
0.1
45.1
0.01
5.32
5.73
27.92
29.35
12.15
12.38
Non-investment grade
0.14
0.13
3.83
6.48
49.46
54.08
AA+ to AA-
A+ to A-
BBB+ to BBB-
Not assigned
Total
1_Represents gross exposure for external reinsurance, broken down by rating classes.
147
Underwriting risk
The following table presents the pre-diversified risk calculated for
underwriting risks associated with our insurance business.
Annual Report 2023 - Allianz Group
0.10
2022
2023
Allianz Group: Reinsurance recoverables by rating class¹
€ bn
0.1
8.4
223.0
5.8
212.8
0.2
0.1
33.4
0.1
31.6
0.3
28.2
0.1
26.3
0.3
2.2
0.1
0.2
9.4
2.2
519.4
499.5
1 In accordance with the Group Management Report, figures stated include investments of Banking and Asset Management. Table excludes private loans. Stated book values include investments not in scope of the Solvency II framework. Figures for both years are based on IFRS 9.
Credit risk - credit insurance
As of 31 December 2023, 20.7% (2022: 19.6 %) of our total Group pre-
diversified internal credit risk was allocated to Allianz Trade credit
insurance exposures.
Credit risk - reinsurance
As of 31 December 2023, 3.8% (2022: 4.5 %) of our total Group pre-
diversified internal credit risk was allocated to reinsurance exposures.
Of the Allianz Group's reinsurance recoverables, 92.0% (2022:
87.8%) were distributed among reinsurers that had been assigned an
investment-grade rating; 7.7% (2022: 12.0%) were non-rated
reinsurance recoverables, the remaining 0.3% (2022: 0.2%) were
towards non-investment grade reinsurers. For substantial single-name
reinsurance exposures or exposures to non-rated captives, risk-
As of 31 December
AAA
mitigating techniques such as collateral agreements or funds-withheld
concepts are in place.
6.4
Inflation
28.4
Allianz Group: Risk profile – market risk by business segment and source of risk (total portfolio before tax and non-controlling interests)
pre-diversified, € mn
(547)
(459)
2,038
2,104
Total Group
25,982
22,798
4,513
3,926
15,064
12,706
6,083
4,549
3,889
3,311
(18,544)
(11,406)
36,987
35,884
Tax relief
(5,339)
380
372
63
73
16,401
15,194
Life/Health
17,064
15,159
1,531
1,328
1,647
804
5,490
(4,355)
4,072
1,433
(8,830)
(4,209)
18,548
18,586
Corporate and Other
1,853
1,834
286
287
1,645
(6,738)
Capital add-on
937
Diversification benefits and tax relief
The higher diversification benefits and tax relief figures are due to the
explicit reflection of diversification benefits and the loss-absorbing
capacity of deferred taxes from the standard formula entities.
Capital add-on
The reduction in the capital add-on is mainly due to a decrease in the
replicating portfolio add-on due to the dynamic inflation
extrapolation model change.
Minor non-EEA insurance entities
Due to regulatory requirements, starting from the fourth quarter 2023,
the book value deduction approach will no longer be used for certain
minor non-EEA insurance entities. Instead, a value for the contribution
of solvency capital requirements from these entities to the Group is
derived from an approach based on experience values from the
standard formula calculations for the Allianz Group, which has been
aligned with the regulator.
Impact of model changes on Eligible Group Own
Funds
As a result of regulatory and model changes, we registered a € 7.3 bn
increase of Own Funds after tax in 2023, mainly driven by the change
for the minor non-EEA insurance entities that were formerly included
via book-value-deduction in the amount of € 6.3 bn.
The remaining impacts of central, minor and immaterial model
changes are mainly driven by Allianz Lebensversicherungs-AG.
Impacts of transitional measures
The continued application of transitional measures on technical
provisions for Allianz Lebensversicherungs-AG and Allianz Private
Krankenversicherungs-AG resulted in an increase in the Own Funds of
€ 10.2 bn at the Group level.
Allianz risk profile and management
assessment¹
Risk profile and market environment
Allianz's core business as a global insurer and asset manager
predominantly exposes it to a variety of risks such as underwriting risks,
financial market and credit risks, and several other non-financial risks
(i.e., operational, reputational, liquidity, and strategic risks). The
execution of the strategic objectives may impact the potential severity
or likelihood of these existing risks, contribute towards concentrations
of certain types of risk, or potentially even give rise to new risks within
a given risk category. However, from a broad perspective, the overall
risk profile of Allianz has remained and is expected to remain stable.
"Stable" in this context means a relatively high exposure to financial
risks (i.e., the sum of financial market and credit risks), a moderate
exposure to underwriting risks, and a modest exposure to operational,
business, and other risks (i.e., measured as a share of the
Allianz Group's Solvency II risk capital). Please refer to section
"Solvency II Regulatory Capitalization" for further details.
To support the development of a risk appetite and a risk management
framework for these core risks, the Allianz Group has elaborated the
following risk management philosophy:
Financial risks: The Allianz Group's ultimate objective is to assure
that financial risk taking is in line with risk-bearing capacity at the
Group and legal entity level, and that it creates shareholder equity.
To manage financial risk effectively and avoid accumulated losses
in times of financial crisis, it is essential to clearly identify, measure,
monitor, and control the risks inherent in the investment portfolios
and in insurance products, including the development of new
products.
Underwriting risks: Exposures to these risks are required to serve
customers and generate shareholder value. Quality control
mechanisms are applied to ensure adherence to Allianz's
underwriting standards and monitor the quality of the portfolio
and underwriting process. The underwriting processes must
support sustainable and profitable business, secure consistency,
align with the risk appetite of the Group and of the operating
entities as well as avoid undesired and/or excessive risks and
accumulations.
Other non-financial risks: These risks are inherent to the core
business and need to be carefully managed via continuous
improvements in risk identification, risk assessment, and control
environments. This occurs through elements of the Group Risk
management framework such as the Top Risk Assessment (TRA),
Non-Financial Risk Management (NFRM), Reputational Risk
Management Framework, and Liquidity Risk Management.
Potential risks in the financial market and in our
operating environment
Allianz faces a challenging financial market and operating
environment. Markets are characterized by the risk of persistently high
volatility. Interest rates have further increased, reflecting continued
monetary policy tightening by key central banks to counter current
inflation rates and long-term inflation expectations being above
central banks' long-term inflation targets. Bonds and equity markets
are fragile, as inflation and economic growth prospects for Europe and
the United States are still impacted by repercussions from the war in
Ukraine and supply chain disruptions from the COVID-19 pandemic,
1_This section contains specific risk disclosures as required by IFRS 17 and IFRS 7 relating to the notes to
the consolidated financial statements.
The minor model changes in 2023 do not materially impact
underwriting risk and business risk.
For underwriting risk and business risk, the higher figures at
Allianz Group level are mainly resulting from the improved approach
for the allocation of risks from standard formula entities.
Underwriting risk and business risk
The minor model changes in 2023 do not have a material impact
on credit risk and operational risk.
Minor non-EEA insurers
2,930
Third country equivalent
3,520
3,520
Sectoral requirements
2,783
2,783
Total Group
41,646
764
38,769
1 Formerly, both capital requirements and Own Funds of those minor non-EEA entities did not enter
Solvency II capitalization figures, as Allianz made use of the book value deduction approach.
141
Annual Report 2023 - Allianz Group
C_Group Management Report
In 2023, the impact of model changes on our internal model
concerned the following risk categories:
Market risk
The higher market risk is mainly due to the change in the approach for
allocating risk contributions from standard formula entities, as well as
the net impact of several minor model changes at Allianz companies.
This is partially offset by the SCR reduction due to the dynamic inflation
extrapolation model change.
Overall, these model change result in a € 3.2 bn higher market risk
of the Allianz Group at € 26.0 bn (2022: € 22.8 bn).
Credit risk and operational risk
The higher credit risk, and operational risk figures at Allianz Group
level are mainly driven by the improved approach for allocating risk
capital from major Group standard formula entities to the risk
categories.
1_Allocation of underwriting risk from standard formula entities according to the subcategories in the internal model.
2_Allocation of business risk from standard formula entities according to the subcategories in the internal model.
3_2022 risk profile figures adjusted based on the impact of the 2023 model changes.
4_2022 risk profile figures as reported previously.
142
(9,167)
1,872
139
2_Allianz Life Insurance Company of North America is based on third-country equivalence.
3_Under book value deduction, the book value of the respective entity is deducted from eligible Own Funds
of the Group.
Annual Report 2023 - Allianz Group
C_Group Management Report
Risk capital related to our European banking operations is
allocated to the Corporate and Other business segment and
calculated based on the approach applied by banks in accordance
with the local requirements resulting from the Basel regulation (Basel
standards). As the impact on the Group's total Solvency Capital
Requirement is minor, risk management for the banking operations is
not discussed in greater detail.
For our Asset Management business segment, we assign internal risk
capital requirements based on sectoral regulatory capital requirements.
In view of the above, Allianz's risk capital framework covers all
material and quantifiable risks. Risks not specifically covered by the
internal model include strategic, liquidity, and reputational risks.
Assumptions and limitations
Risk-free rate and volatility adjustment
When calculating the fair values of assets and liabilities, the
assumptions regarding the underlying risk-free yield curve are crucial
in determining and discounting future cash flows. For liability
valuation, we apply the methodology provided by the European
Insurance and Occupational Pensions Authority (EIOPA) to
extrapolate the risk-free interest rate curves beyond the last liquid tenor.
In addition, we adjust the risk-free yield curves by a volatility
adjustment (VA) in most markets where a volatility adjustment is
defined by EIOPA and approved by the local regulator. This is done to
better reflect the underlying economics of our business, as the cash
flows of our insurance liabilities are largely predictable. The
advantage of being a long-term investor is the opportunity to invest in
bonds yielding spreads over the risk-free return and earning this
additional yield component over the duration of the bonds. Being a
long-term investor mitigates much of the risk of having to sell debt
instruments at a loss prior to maturity.
We take account of this by applying the volatility adjustment to
mitigate the credit spread risk, which we consider to be less meaningful
for long-term investors than the default risk. Allianz also models the
volatility adjustment dynamically within our approved internal model,
which differs from the static EIOPA VA concept applied in the standard
formula. For risk capital calculations, we assume a dynamic movement
of the volatility adjustment broadly consistent with the way the VA
would react in practice; however, we base the movement on our own
portfolio rather than the EIOPA portfolio. To account for this deviation,
Allianz applies a more conservative, reduced application ratio for the
dynamic volatility adjustment. Validation is performed regularly to
verify the appropriateness and prudency of the approach.
Valuation assumptions: replicating portfolios
We replicate the liabilities of our Life/Health insurance business. This
technique enables us to represent all product-related options and
guarantees, both contractual and discretionary, by means of standard
financial instruments. In the risk calculation, we use the replicating
portfolio - together with a Least Square Monte Carlo approach for
risks that are not covered by the replication - to determine and revalue
these liabilities under all potentially adverse Monte Carlo scenarios.
Diversification and correlation assumptions
As Allianz is an integrated financial services provider offering a variety
of products across different business segments and geographic
regions, diversification is key to our business model.
Diversification typically occurs when looking at combined risks
that are not, or only partly, interdependent. Important diversification
factors include regions (e.g., windstorm in Australia vs. windstorm in
Germany), risk categories (e.g., market risk vs. underwriting risk), and
subcategories within the same risk category (e.g., commercial vs.
personal lines of property and casualty risk). Ultimately, diversification
is driven by the specific features of the investment or (re)insurance
products in question and their respective risk exposures. For example,
an operational risk event in Australia can be considered to be highly
independent of a change in credit spreads for a French government
bond held as investment.
Where possible, we derive correlation parameters for each pair of
market risks through statistical analysis of historical data, considering
observations over more than a decade. In cases where historical data
or other portfolio-specific observations are insufficient or unavailable,
correlations are set by the Correlation Settings Committee, which
combines the expertise of risk and business experts in a well-defined
and controlled process. In general, when using expert judgment, we
set the correlation parameters to represent the joint movement of risks
under adverse conditions. Based on these correlations, we use an
industry-standard approach, the Gaussian copula, to determine the
dependency structure of quantifiable sources of risk within the applied
Monte Carlo simulation.
Actuarial assumptions
1_This section contains specific risk disclosures as required by IFRS 17 and IFRS 7 relating to the notes to
the consolidated financial statements.
Smaller related undertakings in the European Economic Area
which are not covered by the internal model are reflected with their
standard formula results. Until the third quarter 2023, the Solvency
Capital Requirements for certain smaller insurance undertakings
outside the European Economic Area with only immaterial impact on
the Group's risk profile were accounted for at the level of Allianz Group
by means of book value deduction³. Due to regulatory requirements,
starting from the fourth quarter 2023, the book value deduction
approach is no longer used for these entities. Instead, the contribution
of the solvency capital requirement from these entities to the Group is
derived through experience values from the standard model, in
alignment with the regulator.
The Allianz Group's internal model to calculate our Solvency Capital
Requirement (SCR) covers all major insurance operations². This
includes both relevant assets (including fixed income, equities, real
estate, and derivatives) and liabilities (including the run-off of all
current and planned technical provisions as well as deposits, issued
debt, and other liabilities). For with-profit products in the Life/Health
business segment, the options and guarantees embedded in
insurance contracts - including policyholder behavior - are taken into
account.
Coverage of the risk capital calculations
Interest rate
C_Group Management Report
ESG risks
Environmental, social or governance events and conditions (ESG
factors), such as climate change, loss of biodiversity or human rights
abuses, are increasingly becoming a relevant source of adverse
impacts on our balance sheet, profitability or reputation. These ESG-
related risks are characterized by their transversal nature, meaning
they may materialize within any of Allianz's existing risk categories
(e.g., market risk, underwriting risk, operational risk) as either a
consequence of societal responses to ESG factors including
regulatory changes, litigation, technological developments and
changes in human behavior - or due to events causing physical
damage, such as droughts, floods or storms, whereby the magnitude
or likelihood is attributable to an ESG factor.
Allianz's strategy for the management of these risks begins with
establishing a comprehensive understanding of all the ways ESG
factors can trigger adverse events within the investment, underwriting,
and operations areas of our business, as well as from a broader
reputational perspective. For this purpose, a dedicated ESG risk
inventory has been established and a corresponding risk assessment
performed, which enables us to take a risk-based view in terms of
evaluating the adequacy of mitigation measures in place.
ESG-related mitigation measures may vary substantially,
depending on the precise nature of the underlying risk, ranging from
establishment of specific controls at the business process level through
to adjustments in Allianz's long-term business strategy. Given that all
adverse impacts attributable to ESG factors are ultimately realized
within one of Allianz's existing risk categories, we aim to the greatest
extent possible to embed the identification and management of
these risks directly within risk management processes already in place.
-
At the Group level, the GFRC is responsible for overseeing ESG-
related risks. In addition, a Group Sustainability Board is in place, which
is responsible for Allianz's overall ESG strategy and for steering the
integration of ESG aspects into core investment and insurance activities.
For a broader perspective on our key ESG integration processes,
please refer to the sections "Sustainability integration approach" and
"Transition plan and strategy" in the Non-Financial Statement.
With respect to consideration of ESG risks in the management of
third-party assets, our asset managers AllianzGI and PIMCO each
have their own global ESG framework, which supports their client-
Our internal model also includes assumptions on claims trends, liability
inflation, mortality, longevity, morbidity, policyholder behavior,
expenses, etc. We use our own internal historical data for actuarial
assumptions wherever possible, additionally considering
recommendations from the insurance industry, supervisory authorities,
and actuarial associations. The derivation of our actuarial
assumptions is based on generally accepted actuarial methods. Our
internal risk capital and financial reporting framework incorporates
comprehensive processes and controls to ensure the reliability of these
assumptions.
derived objectives of ESG investing, while complying with globally and
locally relevant rules and regulations.
Within the broad scope of ESG, climate change is currently the ESG
factor of primary emphasis, both in terms of regulatory focus and
potential to materially influence our risk profile over a short- to mid-
term and long-term horizon. Commensurate with this emphasis, an
assessment of Allianz's climate change-related risks has been
conducted during 2023, including both a qualitative risk assessment
following the structure of the ESG risk inventory, as well as quantitative
scenario analyses and stress-testing.
For information about the climate change risk management
methodology, the outcome of the assessments and next steps, please
refer to the section "Climate-related risks" in the Non-Financial Statement.
Internal risk capital framework¹
We define internal risk capital as the capital required to protect us
against unexpected, extreme economic losses, and which forms the
basis for determining our Solvency II regulatory capitalization. We
calculate and consistently aggregate internal risk capital across all
business segments on a quarterly basis. We also regularly project risk
capital requirements between reporting periods in times of financial
market turbulence.
General approach
For the management of our risk profile and solvency position, we utilize
an approach that reflects the Solvency II rules in that it comprises our
approved internal model covering Allianz SE and all other major
insurance operations. Other entities are reflected based on standard
formula results, others under the deduction and aggregation
approach as well as on sectoral requirements (e.g., Asset
Management) or local requirements for non-insurance operations, in
accordance with the Solvency II framework.
Internal model
Our internal model is based on a VaR approach using a Monte Carlo
simulation. Following this approach, we determine the maximum loss
of portfolio value in scope of the model within a specified timeframe
("holding period", set at one year) and probability of occurrence
("confidence level", set at 99.5%). We simulate risk events from all risk
categories ("sources of risk") modeled and calculate the portfolio
value based on the net fair value of assets minus liabilities, including
risk-mitigating measures such as reinsurance contracts or derivatives,
under each scenario.
The risk capital required is defined as the difference between the
current portfolio value and the portfolio value under adverse
conditions at the 99.5% confidence level. As we consider the impact of
a negative or positive event on all risk sources and covered businesses
at the same time, diversification effects across products and regions
are taken into account. The results of our Monte Carlo simulation allow
us to analyze our exposure to each source of risk, both separately and
in aggregate. We also analyze several pre-defined stress scenarios
representing historical events, reverse stress tests, and adverse
scenarios relevant for our portfolio. Furthermore, we conduct ad-hoc
stress tests on a monthly basis to reflect current political and financial
developments, and to analyze specific non-financial risks more closely.
Climate change
1,498
Model limitations
We use model and scenario parameters derived from historical
data, where available, to characterize future possible risk events. If
future market conditions were to differ substantially from the past, for
example, in an unprecedented crisis or as a possible result of severe
structural breaks resulting from climate change, our VaR approach
might be too conservative or too liberal in ways that are difficult to
predict. In order to mitigate reliance on historical data, we
complement our VaR analysis with stress testing.
20224
Business risk²
20223
Operational risk
Diversification
Total
20224
20223
20224
20223
20224
20223
20224
Property-Casualty
7,064
5,805
2,695
2,312
13,344
11,839
593
478
Underwriting risk¹
20223
20224
20223
20224
Furthermore, we validate the model and parameters through
sensitivity analyses, independent internal peer reviews, and, where
appropriate, independent external reviews, focusing on methods for
selecting parameters and control processes. To ensure that the model
is validated adequately, we have established an Independent
Validation Unit (IVU) within Group Risk, responsible for validating our
internal model within a comprehensive model validation process. Any
limitations identified during the validation process are remedied after
consultation with the Group regulator. Overall, we believe that our
validation efforts are effective and that the model adequately
assesses the risks to which we are exposed.
The construction and application of the replicating portfolios
mentioned are subject to the set of replicating instruments that are
available and might be too simple or restrictive to capture all factors
affecting the change in value of liabilities. As with other model
components, the replication framework is subject to independent
140
Annual Report 2023 - Allianz Group
C_Group Management Report
validation and to suitability assessments as well as to stringent data
and process quality controls. Therefore, we believe that our liabilities
are adequately represented by the replicating portfolios.
Since the internal model takes into account the change in the
economic fair value of our assets and liabilities, it is crucial to estimate
the market value of each item accurately. For some assets and
liabilities, it may be difficult, if not impossible - notably in distressed
financial markets - to either obtain a current market price or to apply
a meaningful mark-to-market approach. For such assets we apply a
mark-to-model approach. For some of our liabilities, the accuracy of
their values also depends on the quality of the actuarial cash flow
estimates. Despite these limitations, we believe the estimated fair
values are appropriately assessed.
Regulatory and model changes in 2023
In 2023, our internal model was further enhanced based on regulatory
developments, model validation results, and the feedback received in
the course of our consultations with regulators.
The net impact of regulatory and model changes on the
Solvency II risk capital of the Group in 2023 was € 2.9 bn.
As the internal model is based on a 99.5% confidence level, there is a
low statistical probability of 0.5% that actual losses could exceed this
threshold in the course of one year.
The most important changes are:
Change in the modeling of contingent capital reinsurance at
Allianz Lebensversicherungs-AG (€ 0.2 bn).
Dynamic inflation extrapolation, which improves the inflation
modeling by refining both the coverage of the term structure and
the extrapolation to the central bank's long-term inflation target
(€ (0.3) bn).
In addition, in an effort to enhance the explanatory power of the risk
capital movement analyses, our approach for allocating the risk
capital from Group insurance entities which are modeled based on the
Solvency II standard formula was improved. In the refined approach,
the risk contributions to single risk categories are better aligned to the
risk profile of the standard formula entities, and the diversification as
well as the loss absorbing capacity of deferred taxes in the standard
formula are more appropriately reflected. The change in the allocation
approach does not impact the total SCR of the Allianz Group, but it
increases all contributions of these standard formula entities to the
single risk categories.
In all subsequent sections, the figures including model changes
will form the basis for the movement analyses of our risk profile in 2023.
As our general capital steering continues to focus on the Solvency II
ratio impacts, excluding the application of transitional measures on
technical provisions, the figures in the following table exclude
transitional measures unless specifically stated.
Allianz Group: Impact of regulatory and model changes - Allocated risk according to the risk profile (total portfolio before non-controlling interests)
€ mn
Market risk
Credit risk
As of 31 December
20223
Inclusion of capital requirements for certain previously not
modeled minor non-EEA insurance entities ¹, including currency risk
(impact: € 3.0 bn).
Annual Report 2023 - Allianz Group
The internal model considers concentration, accumulation, and
correlation effects when aggregating results at the Group level,
Allianz SE level, or at the level of other Group companies. The resulting
diversification reflects the fact that all potential worst-case losses are
not likely to materialize at the same time.
and there is the risk of further global political and economic
destabilization.
593
1,957
1,872
(10,039)
(9,167)
16,285
16,401
Life/Health
17,591
17,064
1,657
1,531
2,280
1,647
5,729
5,490
1,854
1,645
(8,858)
(8,830)
20,254
722
13,344
14,693
2,695
Operational risk
Diversification
Total
As of 31 December
2023
2022¹
2023
2022¹
2023
2022¹
18,548
2023
2023
20221
2023
2022¹
2023
20221
Property-Casualty
6,205
7,064
2,748
2022¹
Business risk
Corporate and Other
1,853
764
Minor non-EEA insurers
2,930
2,930
Third country equivalent
3,649
3,520
Sectoral requirements
2,821
2,783
Total Group
43,485
41,646
1_2022 risk profile figures adjusted based on the impact of 2023 model changes.
As of 31 December 2023, the Group-diversified risk capital, which
reflects our risk profile before considering non-controlling interests,
amounted to € 43.5 bn (2022: € 41.6 bn).
The € 1.8 bn increase in the Solvency II Capital Requirement was
driven by the positive business evolution in the Property-Casualty
business segment. This was partially compensated by risk capital relief
from effects such as model and assumptions updates at Allianz
Lebensversicherungs-AG and various other companies of the Group.
The following sections explain the evolution of our risk profile per
modeled risk category. All risks are presented on a pre-diversified basis
and concentrations of single sources of risk are discussed accordingly.
Market risk
C_Group Management Report
The following table presents our group-wide risk figures related to
market risks by business segment and source of risk.
723
Capital add-on
(5,506)
Tax relief
286
Total Group
25,849
25,982
4,691
286
4,513
33
17,006
73
15,064
6,450
2,053
6,083
372
(484)
(547)
2,329
2,038
3,889
(19,381)
(18,544)
38,868
36,987
441
4,252
Underwriting risk
(5,339)
Market risk
2023
2022
€ bn
89.6
€ bn
43.5
77.9
38.8
%
206
201
1_Excluding the application of transitional measures on technical provisions.
In the second quarter of 2020, Allianz had been granted approval for
the application of transitionals on technical provisions for the two
entities Allianz Lebensversicherungs-AG and Allianz Private
Krankenversicherungs-AG. As of 31 December 2023 and including the
application of transitional measures on technical provisions, the Own
Funds and SCR amounted to € 99.7 bn and € 43.5 bn, leading to a
Solvency II ratio of 229%. Our general capital steering, however,
continues to focus on the previous approach, i.e., excluding the
application of transitional measures on technical provisions.
Consequently, the figures in all subsequent sections exclude
transitional measures unless otherwise stated.
The following table summarizes our Solvency II regulatory
capitalization ratios disclosed over the course of the year 2023:
Allianz Group: Solvency II regulatory capitalization ratios
Compared to year-end 2022, our Solvency II capitalization ratio
increased by 5 percentage points to 206% (2022: 201 %) since the
increase in the Solvency II Capital Requirement was overcompensated
by significantly higher Own Funds.
The development of the Solvency II ratio was positively supported
by a solid operating Solvency II capital generation and business
evolution (27 percentage points pre-tax) and a favorable impact of
regulatory and model changes (4 percentage points), the latter
primarily resulting from the dynamic inflation extrapolation model
change and other central and local model changes.
This was partially compensated by negative effects. The main
impact came from (capital) management actions ((16) percentage
points), dominated by dividend accruals and share buy backs. Taxes
also contributed to the decrease of the capitalization ratio ((8)
percentage points). A small negative contribution ((1) percentage
point) resulted from the net impact of capital market developments,
whereby strain, especially from lower real estate valuations and
interest rates, was largely offset by positive impacts, e.g., from stronger
equity markets and lower inflation.
The following table presents the sensitivities of our Solvency II
capitalization ratio under certain standard financial market scenarios.
Allianz Group: Solvency II regulatory capitalization ratio sensitivities
%
As of 31 December
2023
Capitalization ratio
Capital requirement
Own Funds
As of 31 December
In addition to the geopolitical crises, there are several other
factors that may lead to a persistent high financial market volatility.
Lasting momentum for populist and radical parties in the Americas, in
Europe, and around the globe could make international cooperation
and coordination more challenging and complex, leading to a lower
chance of impactful political action on geopolitical and regional crises,
as well as on issues such as climate change, due to conflicting
objectives. The risk factors also include further disruptions to global
supply chains, which weigh on global trade, with the potential to
prompt long-term structural shifts in these chains. Lasting risk factors
include the challenges of implementing long-term structural reforms
in key eurozone countries.
Credit risk
Lasting geopolitical and new regional political crises dominate
the political and economic agenda. There is no clear resolution on the
horizon for the lasting war in Ukraine. In addition, the Israel-Hamas
war in Gaza risks escalating into a regional military conflict with the
involvement of Iran and the U.S., encompassing new risks for energy
prices and inflation. Furthermore, there is the risk of a deterioration in
the United States-China relationship, as well as of a further hardening
of China's attitudes towards Taiwan.
The increasing reliance on digital technologies, combined with
the rising use of artificial intelligence, increases the risk of technology
obsolescence, cyberattacks, data breaches, system failures, negative
impacts from the use of deepfake tools on political and business
processes, as well as the risk of non-compliance with increasing
regulation covering IT-related business processes.
Therefore, we continue to closely monitor political, financial and
technological developments as well as the global trade situation to
manage our overall risk profile to specific event risks.
Regulatory developments
Our approved partial internal model has been applied since the
beginning of 2016 when Solvency II came into effect. There is some
uncertainty whether the provisional equivalence of the U.S. solvency
regime for Solvency II purposes will be extended beyond 2025, as well
as about future regulatory requirements resulting from the potential
introduction of future global capital requirements and from the
current Solvency II review.
The Solvency II concept of "equivalence" allows third country
solvency regimes to be recognized and used for Solvency II purposes.
Most relevant for Allianz today, it allows the integration of Allianz Life
Insurance Company of North America into the Group capital
calculation based on U.S. solvency requirements. The current
provisional equivalent treatment of the U.S. expires at the end of 2025
and there is some risk that the equivalence will not be extended
beyond 2025, with a potential negative impact on the solvency ratio of
the Allianz Group.
The framework for potential future capital requirements for
Internationally Active Insurance Groups (IAIGS) is yet to be finalized by
the International Association of Insurance Supervisors (IAIS) and the
Financial Stability Board (FSB).
In addition, in recent years, the European Commission reviewed
the Solvency II directive as foreseen in European legislation. The review
has been politically agreed by the trilogue parties (European
Commission, European Parliament, and European Council) in
December 2023, and the final text of the directive is expected to be
published in the official journal of the European Union in the second or
the third quarter of 2024. The corresponding update of Level 2
legislation (Solvency II regulation) as well as EIOPA guidelines will be
performed by the European Commission and EIOPA during 2024 and
2025 and will cover outstanding technical details as delegated by the
directive. The application of the new rules will start 24 months after
their publication in the official journal of the European Union, i.e., for
the second quarter of 2026 at the earliest.
2022
Finally, the potential for a multiplicity of different regulatory
regimes, capital standards, and reporting requirements based on a
parallel application of a global capital framework (Insurance Capital
Standard ICS) as well as Solvency II could increase operational
complexity and costs.
The management feels comfortable with the Group's overall risk
profile and capitalization level. This confidence is based on several
factors:
The Group has a conservative investment profile and disciplined
business practices in the Property-Casualty, Life/Health, and Asset
Management business segments, leading to sustainable
operating earnings with a well-balanced risk-return profile.
Allianz is well-positioned to deal with potentially adverse future
events such as those related to the ongoing war in Ukraine - due
to our strong internal limit framework, stress testing, internal
model, and risk management practices.
Furthermore, the Group has the additional advantage of being
well-diversified, both geographically and across a broad range of
businesses and products.
Based on the information available to us at the moment of report
completion, we expect to continue to be sufficiently capitalized and
compliant with both the regulatory Solvency Capital Requirement and
the Minimum Capital Requirement. However, Allianz is carefully
monitoring the development of the war in Ukraine, geopolitical
tensions and regional political crises in particular, and manages its
portfolios to ensure that the Group, Allianz SE, and the other Group
companies have sufficient resources to meet their solvency capital
needs.
143
Annual Report 2023 - Allianz Group
C_Group Management Report
Solvency II regulatory capitalization
The Own Funds and capital requirements are based on the market
value balance sheet approach, which is consistent with the economic
principles of Solvency II¹. Our regulatory capitalization is shown in the
following table.
Allianz Group: Solvency II regulatory capitalization¹
Management assessment
Base capitalization ratio
Due to its effective capital management, the Allianz Group is well
capitalized and has met its internal, rating agency, and regulatory
solvency targets as of 31 December 2023. Allianz remains one of
the most highly rated insurance groups in the world, as reflected
by our external ratings.
201
ratio
206
212
208
206
201
1_Non-parallel interest rate shifts due to extrapolation of the yield curve beyond the last liquid
point in line with Solvency II rules.
%
The presented sensitivity analyses are based on defined variations of
specific parameters and describe the resulting development of our
Solvency II capitalization under such idealized scenarios (e.g.,
decrease in interest rates by 50 basis points). The observed
developments will, however, typically materialize in a more complex
way (e.g., interest rates are typically not decreasing in a parallel shift
manner along the term structure). Therefore, sensitivities are to be
interpreted in a way such that they provide valuable information on
areas to which our capitalization is particularly sensitive together with
an indication of the estimated magnitude. The actual observed
developments in the capitalization can, however, be more or less
pronounced depending on the specific realized circumstances. Our
comprehensive stress testing framework is regularly analyzed in order
to identify potential enhancements to support the explanatory power
of stress tests conducted in light of our risk profile.
The Allianz Group is a financial conglomerate within the scope of
the Financial Conglomerate Directive (FCD). The FCD does not impose
a materially different capital requirement on the Allianz Group
compared to Solvency II.
179
Quantifiable risks and opportunities by
risk category²
We measure and steer risk based on an approved internal model
which quantifies the potential adverse developments of Own Funds.
The results provide an overview of how our risk profile is distributed
over different risk categories and determine the regulatory capital
requirements in accordance with Solvency II.
The Group diversified risk is broken down as follows:
1_Own Funds and capital requirement are calculated under consideration of volatility adjustment and yield
curve extension, as described in section "Risk-free rate and volatility adjustment".
144
2_This section contains specific risk disclosures as required by IFRS 17 and IFRS 7 relating to the Notes to
the Consolidated Financial Statements.
Annual Report 2023 - Allianz Group
206
C_Group Management Report
€ mn
Allianz Group: Allocated risk according to the risk profile (total portfolio before non-controlling interests)
This Risk and Opportunity Report outlines the Group's risk figures,
reflecting its risk profile based on pre-diversified risk figures and Group
diversification effects.
179
The pre-diversified risk figures reflect the diversification effect
within each modeled risk category (i.e., market, credit, underwriting,
business, and operational risk), but do not include the diversification
effects across risk categories. Group diversified risk figures also capture
the diversification effect across all risk categories.
198
Interest rates up by 0.5%¹
Interest rates down by 0.5%¹
201
208
Equity prices up by 30%
217
211
191
188
202
Equity prices down by 30%
31 Dec
2023
Capitalization
Interest rate down by 0.5% 1
Combined scenario:
2022
31 Dec
Equity prices down by 30%
30 Jun
2023
30 Sept
2023
31 Mar
2023
Credit spreads up by 0.5%
33,403
Restated balance as of 1 January 2022
(46,554)
(251)
(3,474)
27,391
4,699
28,902
6,421
Adjustments of initial application of IFRS 9
and 17, net of tax
84,222
4,270
79,952
Total equity
interests
Non-controlling
(5,393)
(18,794)
144
(18,829)
thereof net income
Shareholders'
equity
(754)
189
(943)
(110,677)
101,408
(35)
425
Total comprehensive income
65,392
4,235
61,157
50,192
(46,554)
6,421
7,757
Other unrealized
gains and losses
(net)
16,789
(943)
32,784
189
510
Shareholders
Changes arising during the period
Subtotal
Reclassifications to net income
Insurance liabilities
Non-controlling interests
10,888
(166)
(160)
15
15
Subtotal
Changes arising during the period
435
(6)
Reclassifications to net income
Total comprehensive income attributable to:
(3,223)
12,875
(31,913)
(19,037)
100,916
Unrealized gains
and losses from
insurance contracts
(net)
adjustments
Retained earnings
bonds¹
4,699
28,902
Balance as of 31 December 2021 as stated
Paid-in capital
(3,647)
104,563
Foreign currency
translation
€ mn
Consolidated statement of changes in equity
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
D_Consolidated Financial Statements
Annual Report 2023 - Allianz Group
For further information on the income taxes associated with different components of other comprehensive
income, please see note 8.4.
152
Undated
subordinated
6,856
55,242
treasury shares²
4,843
28,902
Restated balance as of 1 January 2023
3,493
552
2,941
(45,275)
29,354
54,854
(5,995)
Adjustments of initial application of IFRS 9
and 17, net of tax
3,768
51,474
(15,215)
(2,406)
35,350
(642)
4,843
(3,048)
(60,490)
491
(754)
8,541
11,398
510
10,888
23,275
54,854
(20,647)
8,174
8,541
thereof net income
(79)
Total comprehensive income
58,735
4,320
54,415
165
28,902
Balance as of 31 December 2022 as stated
58,735
Other changes
291
291
(60)
(21)
(40)
(5)
Dividends paid
Capital increases and decreases
subsidiaries
Changes in ownership interests in
(1,301)
151
151
Changes in scope of consolidation
(1,301)
(1,301)
(34)
Other distributions
44
44
4,320
54,415
(60,490)
54,854
(3,048)
29,354
4,843
28,902
Balance as of 31 December 2022
(119)
(119)
(119)
(4,870)
(487)
(4,383)
(4,383)
(40)
Purchase, sale, use and cancellation of
11,398
3
Share of other comprehensive income of associates and joint ventures
(5,487)
8.2
13,094
13,651
ཚ
8.1
3,014
(4,955)
2,951
(21,577)
1,422
556
6.4
14,142
(22,133)
6.4
15,564
(12,550)
(238)
8.3
9,032
(2,808)
(2,550)
8.4
9,664
11,582
(951)
(60)
(568)
(319)
(32)
(363)
103
104
(11,209)
(9,513)
(323)
6,856
24,528
(1,849)
91,251
6.1
2022
2023
Note
151
1_Includes interest expenses from external debt.
2_Excluding investment result and fee income.
86,985
Diluted earnings per share (€)
Shareholders
Non-controlling interests
Net income attributable to:
Net income
Income taxes
Income before income taxes
9,032
Basic earnings per share (€)
(1,919)
6.2
(73,911)
7.1
(36,392)
6,509
7.1
959
(5,518)
7.1
(77,145)
24,801
7.1
FFFF
10,983
11,364
(2,090)
(2,742)
6.3
25,386
Total comprehensive income
491
8,541
1,796
(378)
Actuarial gains and losses on defined benefit plans
Items that may never be reclassified to profit or loss
624
(99,933)
(99,309)
17,183
21,169
Subtotal
Cash flow hedges
Changes arising during the period
Reclassifications to net income
(651)
(33)
(651)
(33)
Changes arising during the period
Subtotal
Reclassifications to net income
3,986
Miscellaneous
Equity investments measured at fair value through other comprehensive income
Insurance liabilities
(10,137)
(2,047)
(7,610)
2,366
Total other comprehensive income
(1,758)
(164)
638
Subtotal
1,655
Changes arising during the period
(8)
Miscellaneous
(288)
802
Reclassifications to net income
4,192
(1,730)
318
435
Debt investments measured at fair value through other comprehensive income
126
2022
2023
2022
2023
€ mn
Consolidated statement of comprehensive income
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Net income
D_Consolidated Financial Statements
15.48
21.18
8.5
15.57
21.20
8.5
6,421
Annual Report 2023 - Allianz Group
501
9,032
Items that may be reclassified to profit or loss in future periods (continued)
Reinsurance assets
Subtotal
508
(567)
Changes arising during the period
(7)
694
(3,023)
6,856
(50)
(50)
Changes arising during the period
Subtotal
Reclassifications to net income
Foreign currency translation adjustments
Items that may be reclassified to profit or loss in future periods
Reclassifications to net income
Other comprehensive income
(3,023)
Purchase, sale, use and cancellation of
treasury shares²
602
(2,202)
The following paragraphs describe important accounting policies and
significant estimates and assumptions relevant for the Allianz Group's
consolidated financial statements. Estimates and assumptions
particularly influence the inclusion method as well as the accounting
treatment of financial instruments and insurance contracts, goodwill,
litigation provisions, pension liabilities and similar obligations, and
deferred taxes. Significant estimates and assumptions are explained
in the respective paragraphs.
Significant accounting policies and use of estimates
and assumptions
2_Accounting policies, significant
estimates, and new accounting
pronouncements
The Allianz Group offers property-casualty insurance, life/health
insurance, and asset management products and services in almost 70
countries.
The consolidated financial statements were authorized for issue
by the Board of Management on 22 February 2024.
The consolidated financial statements have been prepared as of
and for the year ended 31 December 2023. The Allianz Group's
presentation currency is the euro (€). Amounts are rounded to the
nearest million (€ mn) unless otherwise stated.
In these consolidated financial statements, the Allianz Group has
applied IFRS 9 and IFRS 17 for the first time. The related changes in
significant accounting policies are described in note 2.
Reporting and presentation principles
They have been prepared in conformity with International
Financial Reporting Standards (IFRSS), as adopted under European
Union (E.U.) regulations in accordance with § 315e (1) of the German
Commercial Code (HGB). Within these consolidated financial
statements, the Allianz Group has applied all standards and
interpretations issued by the IASB and endorsed by the E.U. that are
compulsory as of 31 December 2023.
1 Nature of operations and basis of
presentation
GENERAL INFORMATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
D_Consolidated Financial Statements
Annual Report 2023 - Allianz Group
154
Fixed assets from alternative investments
The accompanying consolidated financial statements present the
operations of Allianz SE with its registered office in Königinstrasse 28,
80802 Munich, Germany, and its subsidiaries (the Allianz Group).
Allianz SE is recorded in the Commercial Register of the municipal
court in Munich under the number HRB 164232.
Restructuring and integration expenses
The Allianz Group's consolidated balance sheet is not presented using
a current/non-current classification. The following balances are
generally considered to be current: cash and cash equivalents, non-
current assets and assets of disposal groups classified as held for sale,
and liabilities of disposal groups classified as held for sale. The
following balances are generally considered to be non-current:
investments, deferred tax assets, intangible assets, and deferred tax
liabilities.
The Allianz Group has made an accounting policy choice to apply
the year-to-date approach for the accounting for insurance contracts.
Therefore, the treatment of accounting estimates made in previous
For certain third party managed investment funds in which the
Allianz Group holds a stake of above 20%, the Allianz Group has no
significant influence if it is not represented in the governing bodies of
these investment funds or their investment activities are largely
predetermined.
Although the Allianz Group's share in some entities is below 20%,
the Allianz Group has significant influence over these entities if it is
sufficiently represented in the governing bodies that decide on the
relevant activities of these entities.
Associates and joint arrangements
Associates are entities over which the Allianz Group can exercise
significant influence. In general, if the Allianz Group holds 20% or more
of the voting power in an investee but does not control the investee, it
is assumed to have significant influence.
Where newly acquired subsidiaries are subject to business
combination accounting, the provisions of IFRS 3 are applied. During
the IFRS 3 measurement period, which is for a maximum of one year
post the acquisition date, it may be necessary to adjust existing or
recognize additional assets and liabilities if new information is
obtained about facts and circumstances that existed as of the
acquisition date. Non-controlling interests in the acquiree that are
present ownership interests and entitle their holders to a proportionate
share of the acquiree's net assets in the event of liquidation are
generally measured at the non-controlling interest's proportionate
share of the acquiree's identifiable net assets.
Initial accounting for business combinations and measurement
of non-controlling interests
investment funds' financial and operating policies are largely
predetermined or other parties engaged in the investment funds have
substantive spin-off rights.
D_Consolidated Financial Statements
Insurance contracts are split by contracts issued (insurance) and
held (reinsurance). Insurance contract portfolios in asset and liability
position are further presented separately on the balance sheet.
IFRS 17 is conceptually based on a prospective cash view, therefore all
payables and receivables from insurance contracts as well as any
deposits are part of the (re)insurance contract assets or liabilities.
Annual Report 2023 - Allianz Group
For certain entities, voting or similar rights are not the dominant
factor of control, such as when voting rights relate to administrative
tasks only and returns are directed by means of contractual
arrangements, as is the case mainly for investment funds managed by
Allianz Group internal asset managers. For investment funds
managed by Allianz Group entities on the basis of contractual
arrangements, the Allianz Group considers an exposure to variability
from the aggregate economic interests (consisting of fees and direct
interests in the investment funds) of more than 30% as indicative for
control, unless there is evidence to the contrary, for example, if the
Entities where the Allianz Group holds a majority stake are not
included in the consolidated financial statements if the Allianz Group
does not control these entities because it has no majority
representation in the governing bodies and/or it requires at least the
confirmative vote of another investor to pass any decisions over
relevant activities.
Entities where the Allianz Group does not hold a majority stake
are included in the consolidated financial statements if the
Allianz Group controls these entities based on either distinctive rights
stipulated by shareholder agreements between the Allianz Group and
the other shareholders in these companies or voting rights held by the
Allianz Group which are sufficient to direct the relevant activities
unilaterally.
In accordance with IFRS 10, the Allianz Group's consolidated financial
statements include the financial statements of Allianz SE and its
subsidiaries. Subsidiaries are generally entities where Allianz SE,
directly or indirectly, owns more than half of the voting rights or similar
rights with the ability to affect the returns of these entities for its own
benefit.
Scope of consolidation and consolidation procedures
Principles of consolidation
interim financial statements may change under IFRS 17 in subsequent
interim financial statements and in the annual reporting period.
155
Pursuant to IFRS 11, investments in joint arrangements have to be
classified as either joint operations or joint ventures, depending on the
contractual rights and obligations of each investor. The Allianz Group
has assessed the nature of its joint arrangements and determined
them to be joint ventures in most cases.
1,064
362
11,096
15,430
(303)
(41)
Other (net)
(6,227)
(420)
Net cash flow used in financing activities
(1,311)
Net cash from sale or purchase of treasury stock
418
13
(4,870)
(4,931)
Dividends paid to shareholders
15,651
(2,202)
Real estate held for investment
(4,367)
17,952
99
Non-current assets and disposal groups classified as held for sale
1,376
339
Investments in associates and joint ventures
861
875
24,462
Investments measured at amortized cost
184,757
Investments measured at fair value through other comprehensive income
26,616
19,294
Investments measured at fair value through profit or loss
Proceeds from the sale/maturity/repayment of:
1_As of 1 January 2023, some changes have been made to the classification of cash flows from operating, investing and financing activities to reflect
the cash flows in the most useful manner for the Allianz Group. These changes have also been reflected in comparative periods.
247,475
198
Generally, investments in associates and joint ventures are
accounted for using the equity method, which may imply a time lag of
up to three months. Income from investments in associates and joint
arrangements - excluding distributions - is included in the interest
result. Accounting policies of associates and joint arrangements are
However, if investments in associates or joint ventures are held as
the underlying items for a group of insurance contracts with direct
participation features, the Allianz Group elects the exemption from
applying the equity method and measures these investments at fair
value through profit or loss in accordance with IFRS 9 instead. For the
purposes of this election, insurance contracts include investment
contracts with discretionary participation features.
As IFRS 17 does not provide any threshold for determining whether a
share or proportion is substantial, this assessment requires judgment.
Allianz has set up a group-wide process for assessing insurance
contracts based on qualitative and quantitative criteria in order to
appropriately reflect the individual contract specifics. For this
the Allianz Group expects a substantial proportion of any change
in the amounts to be paid to the policyholder to vary with the
change in fair value of the underlying items.
the contractual terms specify that the policyholder participates in
a share of a clearly identified pool of underlying items;
the Allianz Group expects to pay the policyholder an amount
equal to a substantial share of the fair value returns on the
underlying items; and
Insurance contracts are classified as direct participating contracts or
contracts without direct participation features. The classification of
insurance contracts forms the basis for the measurement model
applied (see section "Measurement"). Direct participating contracts
are contracts for which, at inception:
Insurance contracts and investment contracts with discretionary
participation features are accounted for under the insurance
accounting provisions of IFRS 17. Investment contracts without
discretionary participation features are accounted for as financial
instruments in accordance with IFRS 9, please see section "Investment
contracts liabilities".
Insurance and investment contracts
Insurance contracts
assessment, the terms "substantial share" and "substantial proportion"
have been applied by using 50% as rebuttable presumption.
For further information on derivatives, please refer to note 7.4.
The Allianz Group has chosen as its accounting policy to apply the
IFRS 9 hedge accounting requirements, except for fair value hedges of
the interest rate exposure of a portfolio of financial assets or financial
liabilities, which continue to be accounted for in accordance with
IAS 39.
Hedge accounting
D_Consolidated Financial Statements
Annual Report 2023 - Allianz Group
157
The quantitative assessment is required in case the qualitative
assessment is not sufficient to establish that the terms of the modified
financial asset are substantially different from those of the original
financial asset. For the quantitative assessment, the Allianz Group
applies the criteria for the extinguishment of financial liabilities
analogically. Accordingly, a modification is deemed to be substantial if
the net present value of the cash flows under the modified contractual
terms, including any fees paid or received and discounted at the
original effective interest rate, is at least 10% different from the gross
carrying amount of the financial asset prior to the modification.
In some circumstances, the renegotiation or modification of the
contractual cash flows of a financial asset can lead to the
derecognition of the existing financial asset in accordance with IFRS 9.
The Allianz Group accounting policies prescribe that a substantial
modification of the terms of an existing financial asset shall lead to the
derecognition of the original financial asset and the recognition of a
new financial asset. The determination whether the contractual terms
have been modified substantially is based on a qualitative and/or
quantitative assessment.
Derivative financial instruments designated as hedging
instruments in hedge accounting relationships are included in the line
items investments measured at fair value through profit or loss and
financial liabilities measured at fair value through profit or loss.
Freestanding derivatives are included in the same line items.
Modifications of financial assets
Separation of components
The Allianz Group applies IFRS 9 to determine whether there is an
embedded derivative to be separated and, if so, how to account for
that derivative, unless the derivative is itself a contract within the scope
of IFRS 17. The majority of embedded derivatives identified in
insurance contracts issued by the Allianz Group have been considered
closely related or to include significant insurance risk, because there
are usually strong interdependencies with other components of the
contract such as contractual options, policyholder behavior,
contractual surplus sharing, and mortality.
Annual Report 2023 - Allianz Group
158
The Allianz Group applies the same accounting policies to the
measurement of a group of reinsurance contracts held as to insurance
contracts issued without direct participation features, with following
adjustments:
The Allianz Group generally applies the same accounting policies to
reinsurance contracts held as to insurance contracts issued.
without direct participation features can be measured under the
PAA, if selected instead of GMM and eligibility criteria are fulfilled.
without direct participation features are measured under the
General Measurement Model (GMM, also referred to as Building
Block approach) applied; or
with direct participation features are measured in line with the
Variable Fee Approach (VFA);
IFRS 17 requires the separation of embedded derivatives, investment
components, and performance obligations to provide non-insurance
goods and services at inception of a contract, if certain conditions are
met. The separated components need to be accounted for separately
according to IFRS 9 (embedded derivatives, investment components)
or IFRS 15 (non-insurance goods and services). The Allianz Group has
not identified material performance obligations embedded in
insurance contracts to provide non-insurance goods and services.
IFRS 17 includes three measurement models. Insurance contracts
Contracts in different currencies can fulfill the standard
requirements of similar risks that are managed together. At the
Allianz Group, there is one calculation currency per group of contract
(GoC). In case of a GoC with contracts with different transaction
currencies, a leading currency (GoC currency) is determined.
Measurement is not carried out at the level of individual contracts, but
based on groups of contracts. To allocate individual insurance
contracts to groups of contracts, the Allianz Group first defines
portfolios which include contracts with similar risks that are managed
together. These portfolios are subdivided into groups of contracts on
the basis of profitability and annual cohorts. Both portfolios and
groups of insurance contracts are always determined by the individual
operating entities, considering their respective circumstances. The
requirement to form annual cohorts that prevents contracts issued
more than one year apart from being included in the same group
(IFRS 17.22) is subject to an optional exemption in the E.U.
endorsement of IFRS 17. The E.U. Commission grants E.U. users the
right to choose whether or not to apply the requirement in IFRS 17.22
for certain contracts. The Allianz Group does not make use of this
exemption.
Level of aggregation
participation, which the Allianz Group defines as non-distinct
investment components, if all respective criteria are met.
Investment components that are non-distinct are not to be
separated from the host insurance contract but are excluded from
insurance revenue and insurance service expenses. For most common
life insurance products, the Allianz Group defines the cash surrender
value as the non-distinct investment component. Generally, property-
casualty contracts do not have a surrender or maturity value and only
have a benefit payment when a claim occurs. Therefore, a standard
property-casualty contract without additional guaranteed payment
features does not include any investment component. However, it is
common with property-casualty contracts to have other explicit
guaranteed payments, for example a low or no claim bonus or profit
An investment component is classified as being distinct or non-
distinct. The Allianz Group has not identified material distinct
investment components.
IFRS 17 defines investment components as the amounts that an
insurance contract requires the entity to repay to a policyholder in all
circumstances, regardless of whether an insured event occurs. The
Allianz Group identifies the investment component of a contract by
determining the amount that it would be required to repay to the
policyholder in all scenarios with commercial substance. These include
circumstances in which an insured event occurs or the contract matures
or is terminated without an insured event occurring.
Measurement
generally adjusted where necessary to ensure consistency with the
accounting policies adopted by the Allianz Group.
portfolio of the Allianz Group is based on external agency ratings
enhanced by the Group's internal credit assessment. The internal credit
assessment is used to add a point-in-time component to long-term
ratings in order to capture current market information and to add
forward-looking information. The Allianz Group uses hurdle ratings
that indicate a significant increase in credit risk and consequently a
transfer from Stage 1 to Stage 2 on a notch-by-notch basis. In addition,
the rating hurdle is dependent on the expected maturity of the
investment. A transfer to Stage 3 is triggered by a D rating or when one
or more events that have a detrimental impact on the estimated future
cash flows of that financial asset have occurred. The loss-given default
assignment is performed based on the established methods applied
for Solvency II purposes. The Allianz Group follows a cash-flow-based
approach for the expected credit loss (ECL) calculation. In order to
calculate the ECL, the Allianz Group uses transition matrices that take
into account the probability of default (PD) as a quantitative measure
of the credit quality of a financial instrument or counterparty assigned
per rating notch as well as the transition probabilities quantifying the
likelihood of rating changes over time.
Impairments
Classification and measurement of financial liabilities
In general, financial liabilities are classified as subsequently measured
at amortized cost, except for:
Measurement at fair value through profit or loss is only applied in
exceptional cases, e.g., to reduce an accounting mismatch that would
otherwise arise or if the above-mentioned preconditions for fair value
through other comprehensive income measurement are not fulfilled.
In accordance with IFRS 9, investments in equity financial
instruments are measured at fair value. The Allianz Group generally
uses the irrevocable election at initial recognition to present
subsequent changes in the instrument's fair value in other
comprehensive income, provided that the instrument is neither held for
trading nor contingent consideration recognized by an acquirer in a
business combination to which IFRS 3 applies.
At the Allianz Group, financial assets that are backing insurance
liabilities are generally considered to be held in a business model
whose objective is achieved by both collecting contractual cash flows
and selling financial assets ("hold and sell" business model).
fair value through other comprehensive income, or
fair value through profit or loss.
amortized cost,
-
Financial liabilities that are classified as measured at fair value
through profit or loss, either because they are held for trading
(including derivatives) or irrevocably designated to be measured
at fair value through profit or loss upon initial recognition in
accordance with IFRS 9.4.2.2.
Based on the applicable business model and the respective
contractual cash flow characteristics, the Allianz Group classifies a
financial asset on initial recognition into one of the three measurement
categories:
Financial assets are generally recognized and derecognized on the
trade date, i.e., when the Allianz Group commits to purchase or sell
securities.
Recognition and derecognition
Financial instruments
Foreign currency gains and losses arising from foreign currency
transactions are reported in the valuation result in the consolidated
income statement, unless they relate to the foreign exchange
component of fair value changes that are recognized in other
comprehensive income. In the latter case, the foreign exchange
component is also recognized in other comprehensive income.
Foreign currency translation follows the guidance set forth in IAS 21.
Income and expenses from subsidiaries that have a functional
currency other than the Allianz Group's presentation currency (euro)
are translated to euro at the quarterly average exchange rate, unless
the subsidiary's functional currency is that of a hyperinflationary
economy, in which case the closing rate is applied in accordance with
IAS 21.42.
Foreign currency translation
For further information, please refer to note 7.2.
Classification and measurement of financial assets
The Allianz Group's central risk framework under Solvency II serves as
the basis for IFRS 9 impairment calculations. In regard of credit ratings
which represent a central parameter of credit risk, the Allianz Group re-
uses the Solvency II assessment of the long-term creditworthiness of its
debtors. In detail, the Solvency II rating assignment for the investment
Financial liabilities that arise when a transfer of a financial asset
does not qualify for derecognition or when the continuing
involvement approach applies. These liabilities are measured in
accordance with paragraphs 3.2.15 and 3.2.17 of IFRS 9.
Financial guarantee contracts. Provided that the measurement
rules in any of the first two points above do not apply, financial
guarantee contracts are measured at the higher of the amount of
the loss allowance determined in accordance with IFRS 9 and the
amount initially recognized less (where appropriate) the
cumulative amount of income recognized in accordance with the
principles of IFRS 15.
156
For further information with regards to the measurement at fair
value, please refer to note 7.5.
In discharging its responsibilities in the area of the fair value
measurement of illiquid investments (level 3), the Allianz Group has set
up an independent Group Valuation Committee (GVC). The GVC is a
cross-functional body which includes representation from the Allianz
Group's accounting and reporting, risk, and, investment management
functions as well as major operating entities. The GVC's objectives are
the establishment and maintenance of appropriate market valuation
standards as well as checks and balances in order to successfully
manage the risks inherent in the internal and external fair valuation of
illiquid investments. In this regard, the GVC initiates, approves, and
maintains documented valuation best practices by illiquid asset
cluster. Furthermore, the GVC is responsible for performing regular
independent price verifications, onsite visits of operating entities, and
for requiring the implementation of best practices in the area of the
illiquid assets valuation. It also has prerogatives to implement
measures to resolve any related findings and valuation disputes.
The degree of judgment used in measuring the fair value of
financial instruments closely correlates with the use of non-market
observable inputs. The Allianz Group uses a maximum of observable
inputs and a minimum of non-market observable inputs when
measuring fair value. Observability of input parameters is influenced
by various factors such as type of the financial instrument, whether a
market is established for the particular instrument, specific transaction
characteristics, liquidity, and general market conditions. If the fair
value cannot be measured reliably, amortized cost is used as a proxy
for determining fair values.
Estimates and assumptions of fair values and hierarchies are
particularly significant when determining the fair value of financial
instruments for which at least one significant input is not based on
observable market data (classified as level 3 of the fair value
hierarchy). The availability of market information is determined by the
relative trading levels of identical or similar instruments in the market,
with emphasis placed on information that represents actual market
activity or binding quotations from brokers or dealers.
There is no one-to-one connection between valuation technique and
hierarchy level. Depending on whether valuation techniques are
based on significant observable or unobservable inputs, financial
instruments are classified in the fair value hierarchy.
Cost approach: Amount that would currently be required to
replace the service capacity of an asset (current replacement cost).
Income approach: Conversion of future amounts such as cash
flows or income to a single current amount (present value
technique).
Market approach: Prices and other relevant information
generated by market transactions involving identical or
comparable assets or liabilities.
Contingent consideration recognized by an acquirer in a business
combination to which IFRS 3 applies; such contingent
consideration shall subsequently be measured at fair value
through profit or loss.
For fair value measurements categorized as level 2 and level 3, the
Allianz Group uses valuation techniques consistent with the three
widely used valuation techniques listed in IFRS 13:
Level 2 applies if the market for a financial instrument is not active
or when the fair value is determined by using valuation techniques
based on observable input parameters.
Level 1 inputs of financial instruments traded in active markets are
based on unadjusted quoted market prices or dealer price quotations
for identical assets or liabilities on the last exchange trading day prior
to or at the reporting date, if the latter is a trading day.
Assets and liabilities measured or disclosed at fair value in the
consolidated financial statements are measured and classified in
accordance with the fair value hierarchy in IFRS 13, which categorizes
the inputs to valuation techniques used to measure fair value into three
levels.
The Allianz Group carries certain financial instruments at fair value
and discloses the fair value of all financial instruments.
Measurement at fair value
D_Consolidated Financial Statements
Annual Report 2023 - Allianz Group
Level 3 applies if not all input parameters that are significant to
the entire measurement are observable in the market. Accordingly, the
fair value is based on valuation techniques using non-market
observable inputs. Valuation techniques include the discounted cash
flow method, comparison to similar instruments for which observable
market prices exist, and other valuation models. Appropriate
adjustments are made, for example, for credit risks.
(2,202)
601
(450)
188
Property and equipment
Cash and cash equivalents at beginning of period
Change in cash and cash equivalents
Effect of exchange rate changes on cash and cash equivalents
Net cash flow used in financing activities
Net cash flow used in investing activities
220
Net cash flow provided by operating activities
2022
2023
2022
2023
€ mn
Consolidated statement of cash flows¹
CONSOLIDATED STATEMENT OF CASH FLOWS
Summary
D_Consolidated Financial Statements
24,462
(12,007)
(5,724)
(468)
Subtotal
22,896
(3,457)
(1,844)
Investments measured at amortized cost
(1,140)
6,262
(228,168)
17,952
(14,992)
(4,367)
(182,211)
268
(32,661)
(30,064)
Investments measured at fair value through profit or loss
Payments for the purchase or origination of:
277,511
206,616
Investments measured at fair value through other comprehensive income
24,247
Annual Report 2023 - Allianz Group
1_For further information regarding the undated subordinated bonds, please refer to note 7.3.2.
2_For further information regarding the share buy-backs, please refer to note 8.10.
9
Other changes
596
596
Capital increases and decreases
(1)
(4)
9
3
subsidiaries
Changes in ownership interests in
(2,202)
126
80
46
46
Changes in scope of consolidation
3
153
(9)
(4,541)
63,580
5,103
(142)
(142)
58,477
(37,215)
34,207
(2,883)
Dividends paid
30,702
28,902
Balance as of 31 December 2023
(142)
Other distributions
(4,931)
(389)
(4,541)
4,764
Transactions between equity holders
Investments in associates and joint ventures
(2,488)
Other (net)
Deferred tax assets/liabilities
Financial assets for unit-linked contracts
Investment contract liabilities
Insurance contract assets and liabilities
Reinsurance contract assets and liabilities
Net change in:
Subtotal
Other non-cash income/expenses
Cash flow from financing activities
18,680
(2,026)
Other investments, mainly derivatives
(14,992)
(12,007)
Net cash flow used in investing activities
Depreciation and amortization
5,102
Net cash flow provided by operating activities
2,272
2,131
(401)
Net change in lease liabilities
(12,598)
(7,398)
Proceeds from the issuance of undated subordinated bonds classified as shareholders' equity
(2,873)
210
16,023
644
(12,530)
(6,455)
Cash flow from investing activities
(5,619)
5,848
5,505
2,975
1,364
Net change in liabilities to banks and customers and other financial liabilities
Proceeds from the issuance of certificated liabilities and subordinated liabilities
(1,732)
2,179
Repayments of certificated liabilities and subordinated liabilities
(801)
9,280
(152)
(1,553)
Property and equipment
22,896
29,210
Cash and cash equivalents at end of period
(174)
(587)
(1,444)
Fixed assets from alternative investments
(1,771)
(1,510)
Real estate held for investment
(174)
Non-current assets and disposal groups classified as held for sale
(211)
Cash and cash equivalents reclassified to assets of disposal groups held for sale in 2022
Cash and cash equivalents reclassified to assets of disposal groups held for sale and disposed
of in 2023
51
(21,878)
(264)
Cash flow from operating activities
(218,745)
670
Net change from derivative assets and liabilities
Other (net)
Realized gains/losses (net), impairments of investments (net), valuation result (net)
Investments measured at fair value through profit or loss/other comprehensive income
and at amortized costs, investments in associates and joint ventures, real estate held for
investments, non-current assets and disposal groups classified as held for sale
(199)
(106)
Acquisitions of subsidiaries, net of cash acquired
(107)
Subtotal
(168)
Proceeds from sale of subsidiaries, net of cash disposed
Adjustments to reconcile net income to net cash flow provided by operating activities
Share of earnings from investments in associates and joint ventures
Business combinations (note 3):
6,856
9,032
Net income
(270,163)
(290)
Amortization of intangible assets
(5,724)
Other income
7.2
721,802
22,896
690,991
24,247
837,869
8.6
152,872
141,034
158,359
6.6
172
327
36
6.7
24,719
25,605
26,141
935,897
983,174
18,186
18,442
18,649
8.9
29,210
27,222
29,757
8.7
4,709
6,369
5,992
8.4
30,234
4
As of 1 January 2022¹
As of 31 December 2022
Reinsurance contract assets
Insurance contract assets
Financial assets for unit-linked contracts
Investments
Cash and cash equivalents
Assets
Deferred tax assets
Consolidated balance sheet
D_Consolidated Financial Statements
Annual Report 2023 - Allianz Group
149
D
CONSOLIDATED FINANCIAL STATEMENTS
Other expenses
CONSOLIDATED BALANCE SHEET
1,096,770
Other assets
Total assets
As of 31 December 2023
Note
Total liabilities and equity
Total equity
Non-controlling interests
Shareholders' equity
Intangible assets
Total liabilities
Deferred tax liabilities
Investment contract liabilities
Reinsurance contract liabilities
Insurance contract liabilities
Financial liabilities
Liabilities and equity
Other liabilities
7.3
€ mn
51,310
Contractual service margin (CSM)
Risk adjustment
53,818
6,600
53,382
59,381
7,219
8,875
1_The Annual Report 2022 was released in March 2023 and included a preliminary version of the IFRS 9/17 opening balance sheet for 2022 based on assessments made until mid-February 2023 with the aim of illustrating the possible impacts of IFRS 9/17. After the release of the Annual Report 2022,
the Allianz Group continued with the preparation of the IFRS 9/17 opening balance sheet and made some non-material adjustments. As such, the final version of the IFRS 9/17 opening balance sheet for 2022 is slightly different from the preliminary version in the Annual Report 2022.
150
Annual Report 2023 - Allianz Group
D_Consolidated Financial Statements
CONSOLIDATED INCOME STATEMENT
Consolidated income statement
€ mn
Insurance revenue
Insurance service expenses
Reinsurance result
56,282
Acquisition and administrative expenses
Net result from investment contracts²
Fee and commission expenses
Fee and commission income
Net insurance finance expenses
Supplementary information for insurance contracts issued
Finance income from reinsurance contracts (net)
Net investment income
Investment expenses
Valuation result
Realized gains/losses (net)
Interest result¹
Insurance service result
Finance income (expenses) from insurance contracts (net)
1,096,770
Investment result
983,174
47,827
2,158
2,124
8.4
49,686
8.6
55
55,872
257
6.7
883,250
776,944
6.6
935,897
50,877
231
2,368
740,799
34,328
8.8
4,320
58,735
5,103
8.10
61,157
54,415
63,580
58,477
919,594
65,392
34,810
877,163
4,235
1,031,378
8.10
38,956
IFRS 9 carrying
amount 1 January
2023
To receivables (in Other assets) at fair value through profit or loss
(iv) (v) = (i) + (ii) + (iii)+(iv)
amount 31
December 2022
(i)
IAS 39 carrying
Total financial assets balances (affected by IFRS 9)
Receivables (in Other assets) (IAS 39)
Loans and advances to banks and customers (IAS 39)
Held to maturity (IAS 39)
Available for sale (IAS 39)
Fair value through profit or loss (IAS 39)
Categories according to IAS 39
167
From held to maturity (IAS 39)
Other assets
Total amortized cost
From loans and advances to banks and customers (IAS 39)
From fair value through profit or loss (IAS 39)
From available for sale (IAS 39)
Amortized cost
Total fair value through other comprehensive income
From loans and advances to banks and customers (IAS 39)
From fair value through profit or loss (IAS 39)
From held to maturity (IAS 39)
Reclassifications
From available for sale (IAS 39)
Fair value through other comprehensive income
From receivables (in Other assets) (IAS 39)
Remeasurements
(1,069)
(ii)
118,289
Total fair value through profit or loss
1,611
16
1,595
1,658
19
(165)
1,804
430,131
3,161
426,970
87,498
434
88,133
2,215
28
(1,069)
16,040
360
15,680
4
4
69,239
46
69,193
(iii)
Accrued interest
From loans and advances to banks and customers (IAS 39)
the risk mitigation option between profit or loss and other
comprehensive income (OCI) based on a systematic allocation.
Furthermore, the Allianz Group chooses to disaggregate the change in
risk adjustment for non-financial risk between a change related to
non-financial risk and the effect of the time value of money and
changes in the time value of money, which are included in net
insurance finance expenses.
From held to maturity (IAS 39)
165
Generally, the Allianz Group chooses to disaggregate the
insurance finance income or expenses other than those arising from
Net insurance finance expenses consist of finance income or expenses
from insurance contracts issued and the finance income or expenses
from reinsurance contracts held including the effect of time value of
money and the effect of financial risk. It includes the interest accretion
of the fulfillment cash flows and the CSM as well as the changes in the
fulfillment cash flows due to changes in financial assumptions. For
groups of insurance contracts with direct participation features,
changes in the value of underlying items excluding additions and
withdrawals are included in net insurance finance expenses.
Net insurance finance expenses
For further details on the composition of this line item, please refer
to note 7.1.
In addition, commissions attributable to trading operations and
related interest expenses, as well as refinancing and transaction costs
are included in this line item. Foreign currency gains and losses on
monetary items are also reported within valuation result.
Valuation result contains all investment income and expenses as well
as realized and unrealized gains and losses from financial assets and
liabilities measured at fair value through profit or loss, except for
income and expenses that are recognized in interest result.
Valuation result
Lease income from operating leases (excluding receipts for
services provided such as insurance and maintenance, which are
recognized as income under fee and commission income) is
recognized on a straight-line basis over the lease term, even if the
receipts are not on such a basis, for example upfront payments.
Interest result is recognized on an accrual basis using the effective
interest method. This line item also includes dividends from equity
securities, income from investments in associates and joint ventures
measured using the equity method, as well as lease income. Dividends
are recognized in income when the right to receive the dividend is
established.
Interest result
The Allianz Group applies the accounting policy option outlined in
IFRS 17.86 to present income and expenses from a group of
reinsurance contracts held, other than insurance finance income and
expenses, as a single amount.
Reinsurance result
D_Consolidated Financial Statements
Annual Report 2023 - Allianz Group
164
Insurance service expenses include only costs that relate directly
to the fulfillment of the insurance contracts. The Allianz Group
furthermore distinguishes between direct costs and overhead costs.
These expenses consist of claims and other insurance service expenses
incurred during the period as well as the amortization of insurance
acquisition cash flows, but exclude repayments of investment
components. Furthermore, they include the changes in the fulfillment
cash flows relating to the LIC, the losses on onerous groups of contracts
and reversals of such losses and the impairment loss on the assets for
the pre-coverage acquisition cash flows and the reversals of such
losses. For the insurance contracts with direct participation features, it
also includes an adjustment for experience adjustments of the non-
financial underlying items.
Insurance service expenses
In applying the PAA, insurance revenue for the period is the amount of
expected premium receipts (excluding any investment component
and adjusted to reflect the time value of money and the effect of
financial risk, if applicable) allocated to the period. As such, for
contracts measured under the PAA at the Allianz Group, the expected
premium receipts are allocated to insurance revenue based on the
passage of time, unless the expected pattern of incurring the insurance
service expenses differs significantly from the passage of time, in which
case the latter should be used.
Insurance revenue under the PAA
Other amounts, including experience adjustments for premium
receipts for current or past services.
Claims and other insurance service expenses incurred in the year,
generally measured at the amounts expected at the beginning of
the year, excluding amounts allocated to a potential loss
component, repayments of investment components, insurance
acquisition expenses, and amounts that relate to transaction-
based taxes collected on behalf of third parties.
Changes in the risk adjustment for non-financial risk relating to
current services.
A release of the CSM, measured based on coverage units
provided.
that relate to services for which the Allianz Group expects to receive
consideration, and comprises the following items:
(8,509)
For groups of insurance contracts accounted for under the GMM,
the systematic allocation for the finance income or expenses is
determined using the discount rates by which estimated future cash
flows have been discounted on initial recognition, i.e., the "locked-in"
interest rate. For Life/Health entities, the Allianz Group applies a cash
flow-weighted average of interest curves through the quarters. It
means averaging each quarterly interest curve for each maturity over
the cash flows with maturity over the quarters. For the indirect
participating insurance contracts accounted for under the GMM, for
which changes in assumptions that relate to financial risk have a
substantial effect on the amounts paid to the policyholder, the
systematic allocation for the finance income or expenses arising from
the future cash flows is determined by using the effective yield
approach or expected crediting rate approach for contracts that use a
crediting rate to determine amounts due to the policyholders. An
expected crediting rate approach uses an allocation that is based on
the amounts credited in the period and expected to be credited in
future periods based on the crediting strategy of the operating entities
and under the contractual features. For the finance income or
expenses arising from the CSM, a systematic allocation is determined
using the "locked-in rate".
For groups of insurance contracts with direct participation
features accounted for under the VFA, the Allianz Group generally
holds the underlying items. The insurance finance income or expense
included in profit or loss is the amount that exactly matches the income
or expenses included in profit or loss for the underlying items (i.e., the
current period book yield of the underlying items), resulting in the net
of the separately presented items being nil.
For groups of insurance contracts accounted for under the PAA,
the systematic allocation for the finance income or expenses is
determined using the discount rates at the date of the incurred claim,
i.e., the "locked-in" interest rate based on accident year. For Property-
Casualty entities, the Allianz approach is the simple average of interest
curves through the quarters weighted by 1/4 each.
Net result from investment contracts
The net result from investment contracts consists of changes to the
investment contracts liabilities, benefits paid to the policyholders,
acquisition costs, settlement costs and administrative expenses from
unit-linked investment contracts and non-unit-linked investment
contracts without discretionary participation features as well as
investment income and expenses from unit-linked investment
contracts.
From available for sale (IAS 39)
Fair value through profit or loss
Transition from IAS 39 to IFRS 9
€ mn
Transition from IAS 39 to IFRS 9
D_Consolidated Financial Statements
Annual Report 2023 - Allianz Group
166
Upon transition to IFRS 17 and IFRS 9, the Allianz Group has elected
to restate the comparative information of financial assets for IFRS 9. This
includes the application of the classification overlay to all financial assets
derecognized in the comparative period. In connection with the
classification overlay, the Allianz Group also applies the impairment
requirements of IFRS 9 to all financial assets in scope.
Given the strong interrelation between the measurement of direct
participating insurance contracts and the underlying assets held, the
Allianz Group decided to use the option to defer the full implementation
of IFRS 9 until annual reporting periods beginning on or after
1 January 2023 when IFRS 17 came into effect.
IFRS 9, issued by the IASB in July 2014, fully replaces IAS 39 and
provides a new approach on how to classify financial instruments based
on their cash flow characteristics and the business model under which
they are managed. Furthermore, the standard introduces a new forward-
looking impairment model for debt instruments and provides new rules
for hedge accounting.
Besides the determination of the contractual service margin, another
crucial key topic at transition is the determination of historic interest rates.
The Allianz Group makes use of the introduction of Solvency II, which is the
general basis for the interest rates.
Allianz Group has determined the exit price either based on a real-world
projection of the present value of future profits of the group of contracts
or using an internal rate of return methodology based on distributable
earnings. For most groups of contracts for which the internal rate of return
methodology was applied, the Allianz Group used an internal rate of
return of 13%.
The Allianz Group applied modifications under the modified
retrospective approach only to the extent that it did not have reasonable
and supportable information available to apply IFRS 17 retrospectively.
Under the fair value approach, the contractual service margin of a
group of contracts at transition is determined as the difference between
the fair value of this group at transition determined in accordance with
IFRS 13 and the corresponding IFRS 17 fulfillment cash flows measured
at transition. Conceptually, the contractual service margin usually reflects
the insurer's expected future profits from writing business (entry price
concept). Under the fair value approach, however, the contractual service
margin reflects the margin an average market participant would require
taking over the contracts (exit price concept). Therefore, when
determining the fair value of a group of contracts, the Allianz Group
replaces entity-specific assumptions with objective assumptions that an
average market participant would use for pricing the liability. For this, the
From fair value through profit or loss (IAS 39)
contractual service margin ("unearned profits") is required but is often
judgmental. If a full retrospective application is impracticable, an entity
can choose between a modified retrospective approach or a fair value
approach. This accounting policy choice for the transition approach was
made on a group of contract level. The decision involved the
consideration of multiple criteria, such as availability of reliable and
objective information, operational complexity, or the reasonableness of
the split between earned and unearned profits. For contracts measured
under the variable fee approach, the Allianz Group has generally applied
the modified retrospective approach using the fair value of the underlying
items as the basis from which to determine the contractual service margin
at transition. The most significant portion of insurance contracts measured
under the fair value approach is the life business in the U.S.
The Allianz Group has initially applied IFRS 17 and IFRS 9, including
any consequential amendments to other standards, from
1 January 2023. These standards have brought significant changes to
the accounting for insurance contracts and financial instruments.
General information
First application of IFRS 9 and 17
Recently adopted and issued accounting
pronouncements
Further explanations are given in note 8.4.
The Allianz Group recognizes a valuation allowance for deferred tax
assets when it is unlikely that a corresponding amount of future
taxable profit will be available against which the deductible
temporary differences, tax loss carryforwards, and tax credits can be
utilized.
D_Consolidated Financial Statements
Annual Report 2023 - Allianz Group
Deferred tax assets and liabilities are calculated for temporary
differences between the tax bases and the financial statement
carrying amounts, including differences from consolidation, unused
tax loss carry-forwards, and unused tax credits. The measurement of
deferred tax assets has to take into account estimates on the
availability of future taxable profits. This includes the character and
amounts of taxable future profits, the periods in which those profits are
expected to occur, and the availability of tax planning opportunities.
Current income taxes are calculated based on the respective local
taxable income and local tax rules for the period. In addition, current
income taxes presented for the period include adjustments for
uncertain tax payments or tax refunds for periods not yet finally
assessed, excluding interest expenses and penalties on the
underpayment of taxes. In the event that amounts included in the tax
return are considered unlikely to be accepted by the tax authorities
(uncertain tax positions), a provision for income taxes is recognized.
The amount is based on the best possible assessment of the tax
payment expected. Tax refund claims from uncertain tax positions are
recognized when it is probable that they can be realized.
Income taxes
Fee and commission income primarily consists of asset management
fees which are recognized when the service is provided. For those fees,
the service is considered to be provided periodically. Performance fees
from funds are not usually recognized as income until the end of the
funds' term. Before its completion, the payment claim depends on the
occurrence of certain events, such as the future development of the
fund, which is regularly not reliably estimable. Carried interest is
generally recognized as revenue on the date of the formal declaration
of distribution by the investee and only earlier if sufficient evidence
exists to support that it is highly probable that a significant reversal of
carried interest revenue will not occur. The transaction price for asset
management services is determined by the fees contractually agreed.
Fee and commission income
IFRS 17 supersedes IFRS 4 and establishes principles for the
recognition, measurement, presentation and disclosure of insurance
contracts issued, reinsurance contracts held, and investment contracts
with discretionary participation features. Detailed qualitative and
quantitative descriptions of the effects from the initial application of
IFRS 17 on the Allianz Group's financial statements have been included in
note 2 of the Annual Report 2022. IFRS 17 has to be applied
retrospectively unless this is impracticable. Fulfillment cash flows are
determined prospectively at every reporting date, including the date of
initial application. However, the contractual service margin is rolled
forward over time, a split of profits between equity ("earned profits") and
1,712
Innovation Group's capabilities complement the Allianz Group's
existing claims management options. For example, Innovation Group
operates a proprietary software platform to outsource claims
management which enables largely automated claims management
through a simple, intuitive user interface and connects all relevant
participants, including data providers, in the claims process.
548,659
938
27
33
202
240
463
2,549
484
2022
2023
Non-current assets classified as held for sale
Real estate held for investment
Real estate held for own use
Associates and joint ventures
Subtotal
Swedish real estate portfolio
Other disposal groups
Subtotal
African business operations¹
Russian insurance operations
Allianz Saudi Arabia
Euler Hermes Re
Assets of disposal groups classified as held for
sale
As of 31 December
Non-current assets and disposal groups classified as held for sale
€ mn
Classification as held for sale
In 2022, the Allianz Group acquired 100% of the shares of European
Reliance General Insurance Company S.A., Chalandri, a leading Greek
insurer. For more information, please see note 4 to the Annual Report
2022.
Significant business combinations in 2022
The Allianz Group acquired identifiable assets and liabilities with
a preliminary fair value of €456 mn and € 377 mn, respectively.
Expected cost synergies are the main factors that make up the
goodwill recognized at a preliminary amount of € 40 mn.
On 30 November 2023, the Allianz Group completed the acquisition of
50% of the shares of Incontra Assicurazioni S.p.A., Milan, a non-life
insurance business to strengthen the bancassurance partnership with
UniCredit.
Incontra Assicurazioni S.p.A., Milan
The Allianz Group acquired identifiable assets and liabilities with
a fair value of € 259 mn and € 402 mn, respectively. Expected cost
synergies and future revenues from operating Innovation Group
independently serving all customers are the main factors that make up
the goodwill recognized in an amount of € 270 mn.
The Allianz Group recognizes insurance revenue as it provides services
under groups of insurance contracts. For contracts measured under the
GMM or VFA, the insurance revenue relating to services provided for
each reporting period represents the total of the changes in the LRC
On 12 January 2023, the Allianz Group completed the acquisition of
100% of the shares of Innovation Group Holdings Ltd., Whiteley, a
leading global provider of claims and technology solutions to the
insurance and automotive sectors.
Innovation Group Holdings Ltd., Whiteley
Business combinations in 2023
as held for sale
3,061
100
15
1
Annual Report 2023 - Allianz Group
168
The impact of the disposal, net of cash disposed, on the
consolidated statement of cash flows for the year ended
31 December 2023 was as follows:
The assets and liabilities of the affected operations across Africa
contributed to the partnership were allocated to the reportable
segments Global Insurance Lines & Anglo Markets, Iberia & Latin
America, Middle East and Africa (Property-Casualty and Life/Health).
On 4 September 2023, the Allianz Group completed the formation of
the partnership with Sanlam Ltd., Cape Town, a non-banking financial
service company in Africa, by contributing its African business
operations and further assets in consideration for a 41 % shareholding
in the partnership.
2,842
332
160
38
9
32
252
775
3 Consolidation and classification
1,907
1 African business of the Global Insurance Lines is not affected.
Swedish real estate portfolio
Other disposal groups
Total
Euler Hermes Re
Allianz Saudi Arabia
Total
Russian insurance operations
African business operations¹
Liabilities of disposal groups classified as held for
sale
3,062
1,121
1
183
69
African business operations
111,492
These amendments are not expected to have a material impact on the
financial position and financial results of the Allianz Group. Early
adoption is generally allowed but not intended by the Allianz Group.
Annual periods beginning on or after
1 January 2024
(167)
586
417
(2)
(167)
586
7,942
14
(421)
8,349
3,996
10
(444)
4,430
(20)
(21)
1,062
2
1,059
2,904
1
22
22
2,881
544,892
4,908
(8,675)
(2)
417
17,254
499,044
Annual periods beginning on or after
1 January 2024
Annual periods beginning on or after
1 January 2024
Annual periods beginning on or after
1 January 2024
Effective date
IAS 21, Lack of Exchangeability
IAS 7 and IFRS 7, Supplier Finance
Arrangements
IFRS 16, Lease Liability in a Sale and
Leaseback
IAS 1, Non-current Liabilities with
Covenants
IAS 1, Classification of Liabilities as
Current or Non-current
Standard/Interpretation
The following amendments and revisions to standards and
interpretations have been issued by the IASB but are not yet effective
for or have not been adopted early by the Allianz Group.
Recently issued accounting pronouncements
These changes had no material impact on the Allianz Group's financial
results or financial position.
Annual periods beginning on or after
1 January 2025
IAS 12, International Tax Reform - Pillar Two Model Rules.
IAS 8, Changes in Accounting Estimates and Errors: Definition of
Accounting Estimates,
IAS 1, Disclosure of Accounting Policies, and IFRS Practice
Statement 2, Making Materiality Judgements,
-
In addition to the new accounting standards IFRS 9 and IFRS 17, the
following amendments and revisions to existing standards became
effective for the Allianz Group's consolidated financial statements as
of 1 January 2023:
Further recently adopted accounting
pronouncements
D_Consolidated Financial Statements
Annual Report 2023 - Allianz Group
640,748
5,353
(10,332)
645,726
125,975
586
645,726
2,867
IAS 12, Deferred Tax Related to Assets and Liabilities Arising from
a Single Transaction,
Insurance revenue under the GMM/VFA
3,256
The unrealized gains and losses from insurance contacts (net) are
the cumulative amounts between the total insurance finance income
or expenses and the amount included in profit or loss.
5.34
USD
1.12
0.56
0.31
0.02
(0.49)
2.91
3.01
3.33
3.36
3.41
2.71
2.68
2.67
2.60
3.60
EUR
Immediate fixed annuity and property-casualty liability
for incurred claims
1.82
1.70
1.53
1.32
0.49
3.30
3.57
3.69
4.13
4.08
4.10
3.95
0.48 -0.99
2.03 2.11
0.19 -0.70
1.81 1.89
(0.32) - 0.19
0.99 -1.07
2.87 - 3.27
3.87 -4.37
2.95 -3.45
4.16 - 4.69
4.28 -4.80
4.47 -4.99
3.27-3.76
3.31-3.80
3.35-3.84
5.54-6.06
2.67-3.07
4.39-4.70
2.63 -3.11
4.61 -4.97
4.64 -5.00 4.60 -4.96
3.88
2.61-3.10
3.55-4.03
5.84-6.20
EUR
USD¹
Traditional participating and other insurance contracts
2.10
2.00
1.83
1.61
0.79
4.05
4.35
4.47
4.66
5.73
2.54-3.03
0.73 -1.24
4.96
3.41
20 years
10 years
As of 31 December 2022
5 years
1 year
As of 31 December 2023
in %
Discount rates
D_Consolidated Financial Statements
Annual Report 2023 - Allianz Group
159
The table below sets out the continuously compounded rates
used to discount the cash flows of insurance contracts for major
currencies:
According to IFRS 17, all future cash flows must be discounted. The
IFRS 17 requirements for the interest curves used in the discounting are
principle-based. An entity should use observable market data based
on a risk-free base curve and portfolio-specific adjustments to reflect
the illiquidity of insurance obligations in determining the interest
curves. The Allianz Group applies a bottom-up approach in which the
basic risk-free liquid yield curves are usually derived from swap rates
or government yields for the specific currency and adjusted for
remaining credit risk. These risk-free liquid yield curves are then
adjusted to reflect illiquidity of the underlying insurance liabilities
based on reference portfolios. In case of participating business, the
reference portfolio reflects own assets and it is a currency-specific
portfolio for non-participating business.
Discounting
income tax and other costs specifically chargeable to the
policyholders under the terms of the contracts.
costs that the Allianz Group will incur in performing investment
activities to the extent that the Allianz Group performs them to
enhance benefits from insurance coverage for policyholders by
generating an investment return from which policyholders will
benefit if an insured event occurs; and
claims handling, maintenance and administration costs;
recurring commissions payable on
receivable within the contract boundary;
costs that the Allianz Group will incur in providing investment
services;
instalment premiums
Depending on the type of services provided, other costs that are
incurred in fulfilling the contracts include:
Insurance acquisition cash flows arise from the activities of selling,
underwriting and starting a group of contracts that are directly
attributable to the portfolio of contracts to which the group belongs.
reasonable and supportable information that is available without
undue cost or effort at the reporting date. Cash flows within the
boundary of a contract relate directly to the fulfillment of the contract,
including those for which the Allianz Group has discretion over the
amount or timing. These include premiums from policyholders,
payments to (or on behalf of) policyholders, insurance acquisition cash
flows, and other costs incurred in fulfilling the contracts.
The estimates of future cash flows comprise all cash flows expected to
arise as the insurance contract is fulfilled. In estimating these future
cash flows, the Allianz Group incorporates, in an unbiased way, all
Estimates of expected cash flows
Liability for remaining coverage under the GMM/VFA
The liability for remaining coverage (LRC) under the GMM consists of
the fulfillment cash flows related to future services and the contractual
service margin (CSM). The fulfillment cash flows represent the risk-
adjusted present value of Allianz's rights and obligations to the
policyholders, comprising the building blocks of estimates of expected
future cash flows, discounting, and an explicit risk adjustment for non-
financial risk. The CSM represents the unearned profit from in-force
contracts that an entity will recognize as it provides services over the
coverage period. Each building block is measured separately, both on
initial recognition and for subsequent measurement.
The estimates of the present value of future cash flows are
measured using assumptions that are consistent with those used to
measure the estimates of the present value of future cash flows for the
underlying insurance contracts, with an adjustment for any risk of non-
performance by the reinsurer. The effect of the non-performance risk
of the reinsurer is assessed at each reporting date and the effect of
changes in the non-performance risk is recognized in profit or loss.
D_Consolidated Financial Statements
Insurance revenue
30 years
1 year
5 years
As of 1 January 2022
3.39
3.44
4.65
USD
1.12
0.56
0.31
0.02
(0.49)
2.74
2.80
3.12
3.16
3.35
3.20
2.47
2.46
2.39
3.40
EUR
30 years
20 years
10 years
5 years
1 year
30 years
20 years
10 years
2.54
1.25 -1.67
Unit-linked contracts
2.29 -2.36
4-40
10-20
Useful lives
Customer relationships
Long-term distribution agreements
Estimated useful lives (in years) and amortization methods
The table below summarizes estimated useful lives and the
amortization methods for each material class of intangible assets with
finite useful lives.
Intangible assets with finite useful lives are measured at cost less
accumulated amortization and impairments.
max. 50
3-13
2-10
Years
Intangible assets and goodwill
Equipment
Real estate held for own use
Software
Estimated useful lives (in years)
The table below summarizes estimated useful lives for real estate
held for own use, software, and equipment.
All other items of property, plant and equipment are subsequently
measured based on the cost model pursuant to IAS 16.30. When
applying the cost model, depreciation is generally computed using the
straight-line method over the estimated useful lives of the assets.
Software is generally amortized straight-line over its expected useful
life. The right-of-use assets related to leased property and equipment
are generally depreciated over the lease term.
The Allianz Group has elected the fair value model in accordance
with IAS 40 as its accounting policy to measure properties held for own
use that are underlying items of (a group of) insurance contracts with
direct participation features. For the purpose of this election, insurance
contracts include investment contracts with discretionary participation
features.
Other assets primarily consist of leased or owned real estate held for
own use, software and equipment, receivables, non-current assets and
assets of disposal groups classified as held for sale, and assets for
deferred compensation programs.
Other assets
The balance sheet position differentiation by IFRS 17 into insurance
and reinsurance contracts relates to contracts issued ("insurance
contracts") or held ("reinsurance contracts"). For details regarding main
accounting policies and significant estimates please see separate
section Insurance contracts.
(Re-)Insurance contract assets
Financial assets for unit-linked contracts are neither held within a "hold
to collect" nor within a "hold and sell" business model. Consequently,
they are classified as measured at fair value through profit or loss.
Financial assets for unit-linked contracts
D_Consolidated Financial Statements
Annual Report 2023 - Allianz Group
162
They are depreciated on a straight-line basis over their useful life,
with a maximum of 35 years, and regularly tested for impairment.
Biological assets are measured at fair value less costs to sell, with
changes therein recognized in profit or loss.
Amortization method
straight-line considering
contractual terms
straight-line or in relation
to customer churn rates
Goodwill arising from business combinations is recognized in the
amount of the consideration transferred plus the amount of any non-
controlling interest in the acquiree held by the direct parent in excess
of the fair values assigned to the identifiable assets acquired and
liabilities assumed. Goodwill is generally carried in the acquiree's
functional currency. An evaluation of whether the goodwill is deemed
recoverable takes place at least once a year.
Further explanations on the impairment test for goodwill and its
significant assumptions as well as respective sensitivity analyses are
given in note 8.9.
Financial liabilities
Other unrealized gains and losses (net) include unrealized gains
and losses from investments measured at fair value through other
comprehensive income and from derivative financial instruments that
either meet the criteria for cash flow hedge accounting or, in the case
of a fair value hedging relationship, hedge equity financial instruments
that are designated to be measured at fair value through other
comprehensive income.
Please refer to the section "Foreign currency translation" above for
an explanation of foreign currency changes that are recognized in
equity. The effective portion of gains and losses of hedging instruments
designated as hedges of a net investment in a foreign operation is
recognized in foreign currency translation adjustments.
2.19-2.28
Retained earnings comprise the net income of the current year
and of prior years not yet distributed, treasury shares, amounts
recognized in other comprehensive income, and any amounts directly
recognized in equity according to IFRS.
Non-controlling interests represent equity in subsidiaries, not
attributable directly or indirectly, to Allianz SE as parent.
Undated subordinated bonds comprise Restricted Tier 1 notes
that qualify as equity instruments pursuant to IAS 32. The instruments
are presented within shareholders' equity and any related interest
charges are classified as distributions from shareholders' equity,
without affecting profit or loss. The notes are measured at their
historical value. In addition, notes denominated in foreign currencies
are translated to euro at the quarterly closing exchange rate. The
corresponding foreign exchange differences are recognized as foreign
currency translation adjustments in equity.
Additional paid-in capital represents the premium exceeding the
issued capital received at the issuance of shares.
Issued capital represents the mathematical per-share value received
at the issuance of shares.
Equity
note 8.15.
For further information on these expenses, please refer to
The Allianz Group has elected not to recognize right-of-use assets and
lease liabilities for short-term leases and leases of low-value assets.
Furthermore, the Allianz Group does not recognize right-of-use assets
and lease liabilities for car leases. The expenses relating to the short-
term leases and leases of low-value assets including car leases are
expensed on a straight-line basis over the lease term.
Lease liabilities
Fixed assets from alternative investments
Except for biological assets, these assets are carried at cost less
accumulated depreciation and impairments in accordance with
IAS 16.
The share-based compensation plans of the Allianz Group are
classified as either equity-settled or cash-settled plans. Where equity-
settled plans involve equity instruments of Allianz SE, a corresponding
increase in shareholders' equity is recognized. Where equity-settled
plans involve equity instruments of subsidiaries of the Allianz Group,
the corresponding increase is recognized in non-controlling interests.
Where expected tax deductions differ, in terms of amount and timing,
from the cumulative share-based payment expense recognized in
profit or loss, deferred taxes are recognized on temporary differences.
Further explanations and sensitivity calculations are given in
note 8.16.
Pensions and similar obligations are measured at present value and
presented net of plan assets by applying the provisions of IAS 19. For a
reliable estimate of the obligations owed to employees, the
Allianz Group makes separate estimates (actuarial assumptions)
about demographic variables (such as employee turnover and
mortality) and financial variables (such as discount rates, inflation
rates, compensation increases, pension increases, and rates of medical
cost trends) for each material pension plan, considering the
circumstances in the individual countries.
Pensions and similar obligations
Other liabilities
issuance of the contract. Subsequently, the non-unit-linked investment
contracts are measured at amortized cost using the effective interest
method, while the unit-linked contracts are recorded at fair value with
changes in fair value recognized in the income statement.
D_Consolidated Financial Statements
163
Investment contract liabilities include financial liabilities of investment
contracts without discretionary participation features accounted for
under IFRS 9. The financial liabilities for those contracts are initially
recognized at fair value, or the amount of the deposit by the contract
holder, net of the transaction costs, that are directly attributable to the
Investment contract liabilities
The balance sheet position differentiation by IFRS 17 into insurance
and reinsurance contracts relates to contracts issued ("insurance
contracts") or held ("reinsurance contracts"). For details regarding
main accounting policies and significant estimates please see
separate section Insurance contracts.
(Re-)Insurance contract liabilities
Certificated liabilities and subordinated liabilities
Certificated liabilities and subordinated liabilities are subsequently
measured at amortized cost, using the effective interest method to
amortize the premium or discount to the redemption value over the life
of the liability.
Financial liabilities for puttable financial instruments
The Allianz Group records financial liabilities where non-controlling
shareholders have the right to put their ownership interests back to the
Allianz Group (puttable instruments). If these non-controlling
shareholders still have present access to the risks and rewards
associated with the underlying ownership interests, the non-controlling
interests remain recognized, and profit or loss is allocated between
controlling and non-controlling interests. The financial liabilities for
puttable instruments are generally required to be recorded at the
redemption amount. The Allianz Group recognizes valuation changes
in equity where the non-controlling shareholders have present access
to risks and rewards of ownership. In all other cases, valuation changes
are recognized in the income statement. As an exception, for puttable
instruments that are classified as equity instruments in the separate or
individual financial statements of the issuer in accordance with
IAS 32.16A-16B and are to be presented as liabilities in the
consolidated financial statements of the Allianz Group instead of non-
controlling interests, valuation changes of these liabilities are always
recognized in the income statement. This is the case for puttable
instruments issued by mutual funds controlled but not wholly owned
by the Allianz Group.
Share-based compensation plans
Depreciation is recognized on a straight-line basis over the
property's useful life, with a maximum of 50 years. Furthermore, real
estate held for investment is regularly tested for impairment.
Annual Report 2023 - Allianz Group
For the subsequent measurement, the Allianz Group applies the
fair value model in accordance with IAS 40.33 if the property is held as
an underlying item for insurance contracts with direct participation
features and investment contracts with discretionary participation
features.
Risk adjustment for non-financial risk under PAA
For the insurance contracts measured under the PAA, the
Allianz Group decided to discount the future cash flows relating to
incurred claims, even if those cash flows are expected to be paid or
received in one year or less from the date the claims are incurred.
The LIC is measured at the fulfillment cash flows relating to incurred
claims. It comprises the fulfillment cash flows related to past service at
the reporting date. It is calculated at a level of aggregation, which is
determined at the local level based on relevant factors, e.g., line of
business, region, or distribution channel. The LIC consists of the present
value of future cash flows relating to incurred claims and the risk
adjustment for non-financial risk, applying the same principles for the
estimates of future cash flows, the discount rate and the risk
adjustment for non-financial risk that apply to the LRC.
Liability for incurred claims (LIC)
4. Perform an assessment regarding the recoverability of the pre-
coverage DAC, if facts and circumstances indicate potential
impairment.
3. Regular assumption review of pre-coverage DAC per reporting
period.
2. As soon as the expected contract renewals turn into insurance
contracts, the pre-coverage DAC has to be transferred into in-
coverage DAC and included in the contractual cash flows.
1. Identify and allocate insurance acquisition cash flows that relate
to expected contract renewals and recognize those insurance
acquisition cash flows as an asset (pre-coverage DAC).
coverage DAC, a four-step approach applies to ensure standard
compliant measurement:
At the Allianz Group, insurance acquisition cash flows are not
expensed as incurred, but deferred over the coverage period for all
measurement models. IFRS 17 foresees two levels of deferral (pre-
coverage DAC and in-coverage DAC, DAC = deferred acquisition
costs). Firstly, when insurance acquisition cash flows are incurred
before the group of contracts is recognized (pre-coverage), and
secondly, when the contracts are recognized following IFRS 17.38 (c)
and IFRS 17.B125, where the insurance acquisition cash flows are
implicitly deferred over the coverage period of the contracts to which
the insurance acquisition cash flows relate. Regarding the pre-
Insurance acquisition cash flow asset
If facts and circumstances (e.g., an expected combined ratio
above 100%) indicate that a group of insurance contracts measured
under the PAA is onerous on initial recognition or subsequently
becomes onerous, the Allianz Group increases the carrying amount of
the LRC to the amounts of the fulfillment cash flows determined under
the GMM with the amount of such an increase recognized in insurance
service expenses and a loss component is established for the amount
of the loss recognized. Subsequently, the loss component is
remeasured at each reporting date as the difference between the
amounts of the fulfillment cash flows determined under the GMM
relating to the future service and the carrying amount of the LRC
without the loss component.
The Allianz Group uses the PAA for measuring contracts with a
coverage period of one year or less and for groups of contracts where
it is reasonably expected that the measurement of the LRC does not
differ materially from the one that would be produced by applying the
GMM or the VFA. The PAA eligibility per group of contract is regularly
assessed. This assessment takes into account qualitative and
quantitative factors which are determined at the Group level. The
qualitative factors include but are not limited to the volatility of
financial variables, related embedded derivatives, and the average
length of the coverage period. For the quantitative test, the
Allianz Group provides detailed scenarios including interest rate
shocks per selected currency. Overall, the PAA is applied for the vast
majority of the Allianz Group's property-casualty business (gross and
ceded).
The risk adjustment for LIC for property-casualty corresponds to a
confidence level in the range of 65% to 70% and is calculated based
on distribution assumptions consistent to Solvency II (please refer also
to risk adjustment for non-financial risk at Liability for remaining
coverage under the GMM/VFA).
LRC under the PAA
Annual Report 2023 - Allianz Group
160
If certain criteria are met, an entity may apply the so-called risk
mitigation option when it uses a derivative, a non-derivative financial
instrument measured at fair value through profit or loss, or a
reinsurance contract held to mitigate financial risk. The entity may then
choose to exclude from the CSM some or all of the changes in the
effect of the time value of money and financial risk on the amount of
the entity's share of the underlying items, if the entity mitigates the
effect of financial risk on that amount using derivatives or reinsurance
contracts held; and changes in the effect of the time value of money
and financial risks not arising from the underlying items, if the entity
mitigates the effect of financial risk on those fulfillment cash flows
using derivatives, non-derivative financial instruments measured at
fair value through profit or loss, or reinsurance contracts held. The
An additional CSM release is considered to avoid a delayed profit
recognition by systematic real-world returns of direct participating
business measured with the VFA. This adjustment reflects the expected
real-world returns in relation to the risk-neutral returns applied in
IFRS 17 measurement for a more appropriate allocation of the
services provided in the current period, i.e., the relating income in the
P&L is based on real-world assumptions. The adjustment is applied by
the life/health entities in Germany, France, Italy, and Switzerland.
Expected real-world returns are updated once a year based on a
fundamental analysis of long-term expectations.
underlying items. No explicit interest accretion is required since the
CSM is effectively remeasured when it is adjusted for changes in
financial risks.
The VFA is a mandatory modification of the GMM regarding the
treatment of the CSM to accommodate direct participating contracts.
The assessment of whether an insurance contract meets the VFA
eligibility criteria is made at the contract's inception and not revised
later, except in case of a substantial modification of the contract. For
contracts with direct participation features, the CSM is adjusted for
changes in the amount of the entity's share of the fair value of the
At initial recognition, the CSM is measured to result in no income or
expenses arising from the fulfillment cash flows, any cash flows arising
from the contracts in the group at that date, and the derecognition at
the date of initial recognition of any asset for insurance acquisition
cash flows and any other asset. If the fulfillment cash flows lead to a
negative CSM at inception, it will be set to zero and the negative
amount will be recorded immediately in the statement of profit or loss.
At subsequent measurement, the CSM gets adjusted for changes in
cash flows related to future services and for the interest accretion at
interest rates locked-in at initial recognition of the group of contracts.
A release from the CSM is recognized in profit or loss each period to
reflect the services provided in that period based on "coverage units".
IFRS 17 only provides principle-based guidance on how to determine
these coverage units. Generally, the Allianz Group has defined the
account value for the reflection of investment services and the sum at
risk for insurance services as the default approach to determine these
coverage units. If multiple services are provided in one contract, a
weighting is applied, which is determined by the respective
operational entity based on the respective features of the contract.
Contractual service margin
The risk adjustment for LRC for life/health corresponds to a
confidence level of 72% to 77% and is calculated based on distribution
assumptions consistent to Solvency II (where applicable). For
life/health, an ultimate distribution is estimated based on the
Solvency II one-year-view used in the Cost of Capital methodology for
calculation of the risk adjustment for the LRC, projected to ultimate
horizon per entity and aggregated to diversified group level. The
confidence level is derived as the quantile of the Group net of
reinsurance risk adjustment in the ultimate distribution of the Group.
In all other cases, the Allianz Group applies the cost model
pursuant to IAS 40.56 and carries real estate held for investment at
cost less any accumulated depreciation and any accumulated
impairment losses.
The risk adjustment reflects the compensation an entity would require
for bearing non-financial risks, i.e., the uncertainty of cash flows that
arise from insurance contracts, other than the uncertainty arising from
financial risks. Such non-financial risks include insurance risks, lapse
and expense risk. IFRS 17 does not prescribe a specific approach for
determining the risk adjustment. Allianz applies a Cost of Capital
approach with a Cost of Capital rate of currently 6% as under
Solvency II. The main differences in disclosure are that IFRS 17 requires
a separate presentation of the risk adjustment for non-financial risk for
gross and ceded business, and a split for LRC and LIC. The main
valuation differences are the reflection of diversification across Group
subsidiaries in the risk adjustment of individual entities which is not
allowed in the Solvency II risk margin, the exclusion of operational risk
in the risk adjustment, differences in discounting, and the smoothing of
risk inputs to address cross effects with financial risks not in scope of
the risk adjustment.
Risk adjustment for non-financial risk
1 In 2023, the basis for the disclosed USD rates changed to reflect the most relevant insurance portfolios. The impact of this change on the disclosed range is +67 bps on the lower bound and +45 bps on the upper bound.
Allianz Group applies the risk mitigation option only for a limited
number of portfolios in the Life/Health segment.
For property-casualty, this is based on the ultimate distribution
underlying the Solvency II one-year-view used in the Cost of Capital
methodology for the calculation of the risk adjustment for the LIC,
aggregated and diversified at Group level. The confidence level is
derived as the quantile of the Group net of reinsurance risk adjustment
in the ultimate distribution of the Group.
D_Consolidated Financial Statements
In the following, the term reserves is meant to include the present value
of future cash flows, the risk adjustment and the CSM.
Investments in associates and joint ventures
For details on the accounting for investments in associates and joint
ventures, please see the section "Principles of consolidation".
Real estate held for investment
Reserving process
Real estate held for investment is initially measured at cost, including
directly attributable transaction costs.
Investments measured at amortized cost relate to debt financial assets
that are held within a business model whose objective is to hold
financial assets in order to collect contractual cash flows ("hold to
collect" business model) and whose contractual cash flows are solely
payments of principal and interest on the principal amount
outstanding (SPPI).
Investments measured at amortized cost
In addition, investments in equity instruments that are designated
to be measured at fair value through other comprehensive income are
presented in this line item. As prescribed by IFRS 9, amounts presented
in other comprehensive income are not subsequently transferred to
profit or loss. Instead, the Allianz Group accounting policies foresee
that the cumulative amounts are transferred directly within equity
upon derecognition of an investment in an equity instrument that is
measured at fair value through other comprehensive income.
These investments include debt financial assets that are held within a
"hold and sell" business model and whose contractual cash flows are
solely payments of principal and interest on the principal amount
outstanding (SPPI).
Investments measured at fair value through other
comprehensive income
Investments
Cash and cash equivalents comprise balances with banks payable on
demand, balances with central banks, cash on hand, and treasury bills
to the extent they are not included in investments measured at fair
value through profit or loss. Furthermore, this balance sheet item
contains checks and bills of exchange that are eligible for refinancing
at central banks, subject to a maximum term of three months from the
date of acquisition as well as reverse purchase agreements that are
due within three months.
Cash and cash equivalents
Accounting policies for selected line items of the
consolidated balance sheet and income statement
In general, the Allianz Group recognizes inflation as a financial risk for
claims benefits and other insurance expenses (e.g., claims handling)
only when inflation is contractually linked to an index. There are
insurance products where the amounts to be paid are legally or
contractually linked to an inflation-index such as a consumer price
index.
Investments measured at fair value through profit or loss
Investments measured at fair value through profit or loss comprise
debt instruments that are classified as measured at fair value through
profit or loss based on the underlying business model or cash flow
characteristics as well as financial assets that are irrevocably
designated to be measured at fair value through profit or loss at
inception. Equity instruments are included in this line item if Allianz
deviates from its general approach to designate them as measured at
fair value through other comprehensive income or if they do not fulfill
the prerequisites for such a designation.
Stage two: The Allianz Group Actuarial function forms an opinion
on the best-estimate level of the reserves proposed by the local
entities. The Allianz Group Actuarial function challenges the operating
entities' selection through their continuous interaction with local teams
and quarterly attendance in the local reserve committees. The ability
to form a view on the reserve best-estimate level is further enabled by
regular reviews of the local reserving practices. Such reviews consist of
an evaluation of the reserving process as well as of the
appropriateness of models, methods, and assumptions, and an
analysis of the movements of the reserves. Significant findings from
these reviews are communicated in the Allianz Group Reserve
Committee to initiate actions where necessary. The Allianz Group
Actuarial function monitors and assesses the documentation of the
validation work performed by the Allianz subsidiaries.
Distinction between financial and non-financial risk
Stage two: The Allianz Group actuarial function regularly
evaluates the local reserving processes as well as reserving results,
including the appropriateness and consistency of the assumptions,
monitors and approves the validation of the actuarial models, and
analyzes the movements of the reserves. Any adjustments to the
reserves and other insurance-related reporting items are reported to
and analyzed together with the Allianz Group Reserve Committee.
Property-Casualty reserves are set by leveraging the use of
actuarial techniques and educated judgment. These include the best
estimate of the cash flows (e.g., claims, premiums, and expenses) and
the discounting of the claims. A two-stage process exists for the setting
of the P&C reserves in the Allianz Group:
The oversight and monitoring of the Allianz Group's reserves
culminate in quarterly meetings of the Allianz Group Reserve
Committee, which is the supervising body that governs all significant
reserves. It particularly monitors key developments across the
Allianz Group affecting the level of the best estimate reserves.
Stage one: Life/Health reserves are calculated by qualified local
staff experienced in the subsidiaries' business. The process follows
group-wide standards for applying consistent and reasonable
assumptions. The appropriateness of the best-estimate reserves and
their compliance with group-wide standards is confirmed by the local
chief actuary and local reserve committee.
For the business segments Life/Health and Property-Casualty, the
central oversight process around reserve estimates includes the setting
of group-wide standards and guidelines, regular site visits, as well as
regular quantitative and qualitative reserve monitoring.
161
D_Consolidated Financial Statements
Stage one: Property-Casualty reserves are calculated by local
reserving actuaries at the Allianz subsidiaries. The reserves are set at a
best-estimate level based on a thorough analysis of historical data,
enhanced by interactions with other business functions (e.g.,
Underwriting, Claims and Reinsurance). Actuarial judgment is applied
where necessary, especially in cases where data is unreliable, scanty,
or unavailable. The judgment of Property-Casualty actuaries is based
on past experience of the characteristics of each line of business, the
current stage of the underwriting cycle, and the external environment
in which the subsidiary operates. The reserves are proposed to a local
reserve committee, where the rationale of the selections is discussed
and subsequently documented. The appropriateness of the best-
estimate reserves and their compliance with group-wide standards is
confirmed by the local chief actuary and local reserve committee.
Annual Report 2023 - Allianz Group
Life/Health reserves are subject to estimates and assumptions,
especially on the life expectancy and health of an insured individual
(mortality, longevity, and morbidity risk), on portfolio persistency
(surrender and premium increase), and on the development of interest
rates and investment returns (including asset-liability mismatch risk).
These assumptions also have an impact on the presentation of costs
arising from the origination of insurance business (acquisition cash
flows). To ensure consistency in the application of actuarial methods
and assumptions in the Life/Health reserving process, the
Allianz Group has designed a two-stage reserving process:
(23,603)
(26,526)
26,870
66,908
34,328
71,927
34,810
(36,407)
877,163
919,594
Shareholders' equity
1,359
Non-controlling interests
5,802
20,934
46,216
43,848
(32,790)
5,668
111,130
2,158
1,914
2,482
133
1,459
125
Other liabilities
16,288
15,806
Total liabilities
117,117
8,533
761,290
10,196
5,419
5,542
396
30,614
363
(2,182)
(2,472)
2,124
726,112
Total equity
15,922
45,306
156,436
783,905
746,563
15,945
145,998
142,757
(127,343)
(125,804)
164,692
983,174
172
Annual Report 2023 - Allianz Group
D_Consolidated Financial Statements
Business segment information - total business volume and reconciliation of operating profit (loss) to net income (loss) and of income (loss) before income taxes
to shareholders' core net income (loss)
Business segment information - total business volume and reconciliation of operating profit (loss) to net income (loss)
€ mn
Life/Health
1,661
Property-Casualty
935,897
47,574
Total liabilities and equity
63,580
1,682
22,615
18,923
1,528
20,451
10,131
10,024
72,102
74,408
(90,904)
(92,788)
58,735
58,477
123
10,254
119
10,143
1,970
74,072
1,441
75,849
(31)
(90,936)
(227)
(93,015)
5,103
4,320
54,415
1,863
6,202
47,827
16,752
17,599
5,890
5,687
6,284
4,596
4,517
7,476
22,211
7,615
1,859
8,422
106
(51)
(2,175)
(26,556)
(18)
(2,492)
24,719
25,605
5,992
6,369
(23,686)
1,575
10,109
290
29,757
23,562
Intangible assets
141,034
Asset Management
42
172
327
Reinsurance contract assets
10,855
10,173
Total assets
13,915
Deferred tax assets
1,554
1,781
4,813
4,914
225
307
Other assets
15,450
Deferred tax liabilities
30,234
3
19
Investment contract liabilities
20,398
680,654
105
49,686
16,185
649,184
116
135
40,917
39,675
125
(7,651)
(49)
56,282
776,944
51,310
740,799
239
231
257
47,827
49,686
(6,689)
(26)
3
Reinsurance contract liabilities
96,339
18,649
18,442
164,692
156,436
783,905
746,563
15,922
15,945
2,004
91,641
145,998
(127,343)
(125,804)
983,174
935,897
Liabilities and equity
Financial liabilities
2,502
Insurance contract liabilities
142,757
Corporate and Other
202
Group
95
7
467
436
566
730
(21,967)
4,765
15,292
137
3,741
181
56
86
237
288
(13)
38
195
Operating result from investment contracts
179
890
2,748
3,113
2,911
22,411
(15,635)
95
7
467
436
2,432
646
26,732
(11,551)
(365)
(480)
(21,521)
15,771
(80)
Subtotal
730
Operating net investment income, excluding interest expenses from external debt
Net operating (re)insurance finance income (expenses)
7,960
349
3,198
(474)
(540)
(7)
112
14,746
13,814
Operating fee and commission result
3,126
Operating other result³
Non-operating investment result
Non-operating investment income (net)
(544)
(1,267)
(217)
442
14
152,872
Operating profit (loss)
8,211
4,218
6,827
307
(852)
(894)
7,639
7,840
(68)
59
(88)
5,191
(106)
(5,020)
(1,289)
(1,282)
146
129
(6,228)
(6,221)
6,909
(4,928)
Consolidation
Operating investment result
8,332
Total revenues²
71,291
66,353
22,580
23,114
8,086
8,234
(755)
153,324
(773)
96,928
Operating insurance service result
Insurance revenue
Claims and benefits
Acquisition and administrative expenses
Reinsurance result
Other insurance service result
Subtotal
101,201
68,757
161,700
(795)
2023
2022
Total business volume¹
76,531
70,613
2023
77,878
2022
2023
(781)
2022
2022
2023
2022
2023
2022
75,258
8,086
8,234
2023
8,165
63,963
23,114
91,251
86,985
70
60
(58,040)
(55,345)
76
67
(91)
(22,466)
17
25
(2,742)
(2,090)
330
179
77
61
(21,563)
22,580
(86)
4,014
(45,021)
(42,009)
(13,089)
(13,396)
(16,893)
(15,934)
(5,649)
(5,696)
3,806
(2,608)
(151)
(390)
7
4
323
175
4,242
4,298
(1,725)
141,034
2023
D_Consolidated Financial Statements
46,376
2,730
21,145
22,502
31 December 2023
As of
507
414
2023
51
other changes
Fair value and
(277)
(28)
(7)
(242)
adjustments
translation
43
Foreign currency
2022
10,769
Annual Report 2023 - Allianz Group
170
22,896
29,210
Total
(3)
(1)
Expected credit losses
Balances with banks payable on demand
Balances with central banks
2,751
7,009
8,109
Treasury bills, discounted treasury notes, similar
treasury securities, bills of exchange and checks
Reverse repurchase agreements (due in three
months or less)
46
42
2,423
2,652
10,670
7,638
D_Consolidated Financial Statements
241
236
As of 31 December
€ mn
Cash and cash equivalents
1_The transfer to Voya without impacting the cash flows led to adjustments in the following
positions.
Realized gains/losses (net of taxes)
Other (net)
As of 31 December 2023, cumulative losses of €8mn were
reported in other comprehensive income relating to the disposal group
classified as held for sale.
The assets and liabilities of Euler Hermes Re S.A. classified as held
for sale are allocated to the reportable segment Global Insurance
Lines & Anglo Markets, Iberia & Latin America, Middle East and Africa
(Property-Casualty).
Cash on hand
On 26 January 2024, the Allianz Group entered into a binding
agreement to sell its 100% stake in Euler Hermes Re S.A., Luxembourg,
to a Luxembourg captive reinsurance company. Pending receipt of
regulatory approvals, the sale is expected to be completed in the
second quarter of 2024.
As of 31 December 2023, cumulative gains of € 14 mn were reported
in other comprehensive income relating to the disposal group
classified as held for sale.
45,057
2,740
21,215
21,101
31 December 2022
As of
261
Euler Hermes Re S.A., Luxembourg
5
Investments measured at fair value through
other comprehensive income
Goodwill and other intangible assets
Deferred tax liabilities
As of 1 January 2023
Allianz Group
subsidiaries of the
319
consolidated
Changes in the
28
Non-cash changes
(109)
518
849
(114)
1,364
Net cash flows
(118)
45,057
2,740
21,215
21,101
(401)
352
5_ Segment reporting
The business activities of the Allianz Group are organized by product
and type of service: insurance activities, asset management activities,
and corporate and other activities. Due to differences in the nature of
products, risks, and capital allocation, insurance activities are further
divided into the business segments Property-Casualty and Life/Health.
In accordance with the responsibilities of the Board of Management,
each of the insurance business segments is grouped into the following
reportable segments:
2022
2023
2022
2023
2022
Group
Consolidation
Corporate and Other
2023
As of 31 December
2022
2022
2023
2022
2023
Asset Management
Life/Health
Property-Casualty
Business segment information - consolidated balance sheet
€ mn
443
Additionally, some minor reallocations between the reportable
segments have been made.
Assets
5,887
Insurance contract assets
Financial assets for unit-linked contracts
22,896
690,991
721,802
29,210
(292)
(99,319)
(249)
(98,315)
4,515
127,855
Cash and cash equivalents
4,689
129,335
1,149
1,290
1,183
12,040
550,968
17,700
573,187
5,342
110,442
116,447
Investments
1,046
Identification of reportable segments
Southern Europe, Allianz Direct and Allianz Partners. Previously
reported information has been adjusted to reflect this change in the
composition of the Allianz Group's reportable segments.
Effective 1 January 2023, the Allianz Group reorganized the structure
of its insurance activities to reflect the changes in the responsibilities of
the Board of Management. The insurance activities in Iberia & Latin
America have been included in the reportable segment Global
Insurance Lines & Anglo Markets, Iberia & Latin America, Middle East
and Africa. Greece was moved into the reportable segment Western &
To better understand the ongoing operations of the business, the
Allianz Group generally excludes the following non-operating effects:
Operating profit highlights the portion of income before income
taxes that is attributable to the ongoing core operations of the
Allianz Group. The Allianz Group considers the presentation of
operating profit to be useful and meaningful to investors because it
enhances the understanding of the Allianz Group's underlying operating
performance and the comparability of its operating performance over
time.
Reportable segments measures of profit or loss
The Allianz Group uses operating profit and shareholders' core net
income to evaluate the performance of its reportable segments as well
as of the Allianz Group as a whole.
Prices for transactions between reportable segments are set on an
arm's length basis in a manner similar to transactions with third parties.
Lease transactions are accounted for in accordance with IFRS, except
for intra-group lease transactions which are classified as operating
leases (i.e., off-balance sheet treatment by lessee) for internal and
segment reporting purposes. Transactions between reportable
segments are eliminated in the consolidation. Financial information is
recorded based on reportable segments; cross-segmental country-
specific information is not determined.
General segment reporting information
The reportable segment Corporate and Other includes the
management and support of the Allianz Group's businesses through
its strategy, risk, corporate finance, treasury, financial reporting,
controlling, communication, legal, human resources, technology, and
other functions. Furthermore, it includes the banking activities in
France, Italy, and Bulgaria, as well as digital investments.
Corporate and Other
The reportable segment Asset Management operates as a global
provider of institutional and retail asset management products and
services to third-party investors. It also provides investment
management services to the Allianz Group's insurance operations. The
products for retail and institutional customers include equity and fixed-
income funds as well as multi-assets and alternative products. The
United States, Canada, Europe, and the Asia-Pacific region represent
the primary asset management markets.
realized gains/losses (net),
Asset Management
Life/Health
In the business segment Property-Casualty, reportable segments offer
a wide variety of insurance products to both private and corporate
customers, including motor liability and own damage, accident,
general liability, fire and property, legal expense, credit, and travel
insurance.
Property-Casualty
The types of products and services from which the reportable
segments derive revenues are described below.
Both asset management as well as corporate and other activities
represent separate reportable segments. In total, the Allianz Group
has identified 11 reportable segments in accordance with IFRS 8.
Global Insurance Lines & Anglo Markets, Iberia & Latin America,
Middle East and Africa.
USA (Life/Health only),
German Speaking Countries and Central & Eastern Europe,
Western & Southern Europe, Allianz Direct and Allianz Partners,
Asia Pacific,
In the business segment Life/Health, reportable segments offer a
comprehensive range of life and health insurance products on both an
individual and a group basis, including annuities, endowment and
term insurance, unit-linked and investment-oriented products, as well
as full private health, supplemental health, and long-term care
insurance.
Business segment information - consolidated balance sheet
expected credit loss allowance,
income from derivatives (net),
valuation result from investments and other assets and financial
liabilities measured at fair value through profit or loss,
specific acquisition and administrative expenses, consisting of
acquisition-related expenses (from business combinations), income
taxes related incidental benefits/expenses, litigation expenses, and
one-time effects from significant reinsurance transactions with
disposal character,
Recent organizational changes
Operating profit and shareholders' core net income should be viewed
as complementary to, and not as a substitute for, income before
income taxes or net income as determined in accordance with IFRS.
Non-operating amortization and impairments of intangible assets
from business combinations except for insurance, investment or
service contracts or agreements for the distribution of such
contracts.
income from derivatives.
valuation result from investments and other assets and
financial liabilities measured at fair value through profit or loss,
and
-
Non-operating market movements:
D_Consolidated Financial Statements
interest expenses from external debt,
impairments of investments (net),
Annual Report 2023 - Allianz Group
When determining shareholders' core net income, the
Allianz Group generally excludes the following non-operating items
(including any related tax effects):
Shareholders' core net income presents the shareholders' portion of
income before market movements and amortization of specific
intangible assets from business combinations (including any related
tax effects). The Allianz Group considers the presentation of
shareholders' core net income to be useful and meaningful because it
reduces the volatility and impact caused by non-operating items which
are not attendant to the Allianz Group's sustainable performance.
For life/health insurance business and property-casualty insurance
products with policyholder participation, all items listed above are
included in operating profit if the profit sources are shared with
policyholders.
In all reportable segments, the valuation result from investments
and other assets and financial liabilities measured at fair value
through profit or loss is treated as operating profit if it relates to
operating business.
The following exceptions apply to this general rule:
income and expenses from the application of hyperinflation
accounting.
restructuring and integration expenses, and
amortization of intangible assets,
171
152,872
69
(179)
other changes
Other assets
20
5
Reinsurance contract assets
10
36
Financial assets for unit-linked contracts
16
27
137
355
The impact of the disposal, net of cash disposed, on the
consolidated statement of cash flows for the year ended
31 December 2023 was as follows:
The assets and liabilities of the Russian insurance operations sold
were allocated to the reportable segments German Speaking
Countries and Central & Eastern Europe (Property-Casualty and
Life/Health).
On 17 May 2023, the Allianz Group completed the sale of 50% plus
one share in its Russian insurance operations to Interholding LLC,
Moscow.
Russian insurance operations
On completion, cumulative losses of € 194 mn previously reported in
other comprehensive income relating to the business operations
contributed to the partnership mainly consisting of foreign currency
translation effects were reclassified to profit or loss.
Proceeds from sale of the subsidiary, net of cash disposed¹
1_Includes cash and cash equivalents at an amount of € 168 mn which were disposed of with the
entity.
Consideration received
Investments
Loss on disposal
(308)
(148)
On completion of the sale in the second quarter of 2023, in particular
the required reclassification of the cumulative losses, largely consisting
of foreign currency translation effects from the past, from other
comprehensive income to profit or loss significantly contributed to the
loss on disposal of € 435 mn, which was almost completely anticipated
by the recognition of an onerous contract provision in the fourth
quarter of 2022.
1_Includes cash and cash equivalents at an amount of € 27 mn which were disposed of with the
entity.
(27)
1_Includes cash and cash equivalents at an amount of € 10 mn which were disposed of with the
entity.
(52)
(435)
31
Proceeds from sale of the subsidiary, net of cash disposed¹
Insurance contract liabilities
409
Loss on disposal
(28)
138
Other comprehensive income
(9)
(22)
Other liabilities
(5)
(141)
Allianz Lebanon
Non-controlling interests
Other liabilities
Deferred tax assets
Deferred tax assets
62
Reinsurance contract assets
Reinsurance contract assets
410
Financial assets for unit-linked contracts
Investments
20
1,445
Insurance contract liabilities
Financial liabilities
€ mn
Impact of the disposal
€ mn
Impact of the disposal
€ mn
Impact of the disposal
Investments
Other comprehensive income
Other assets
145
Deferred tax liabilities
(1)
(899)
(294)
Proceeds from sale of the subsidiary, net of cash disposed¹
(35)
Consideration received
194
Loss on disposal
(151)
Other assets
Release of onerous contract provision
IFRS 5 impairment recognized in 2022
(1,580)
Other liabilities
(2)
Deferred tax liabilities
Insurance contract liabilities
119
Intangible assets
(21)
88
On 3 July 2023, the Allianz Group completed the sale of 100% of its
Lebanese business operations to GGC SNA Holdings Limited.
The impact of the disposal, net of cash disposed, on the
consolidated statement of cash flows for the year ended
31 December 2023 was as follows:
430
2
427
Allianz Group
subsidiaries of the
(3,163)
(3,068)
Income taxes paid (from operating activities)
249
463
Changes in the
Supplementary information on the consolidated
statement of cash flows
17
70
Total liabilities
Other liabilities
Insurance contracts that are liabilities
Total assets
consolidated
Intangible assets
Dividends received (from operating activities)
5,783
Transfer of U.S. investment teams and assets to
Voya Investment Management, Atlanta¹
Fair value and
400
45
45
13
341
adjustments
4,504
(961)
Interest paid (from operating activities)
Significant non-cash transactions
252
translation
18,190
20,037
Interest received (from operating activities)
3
Foreign currency
(1,311)
The assets and liabilities of the Lebanese business operations sold
were allocated to the reportable segments Global Insurance Lines &
Anglo Markets, Iberia & Latin America, Middle East and Africa
(Property-Casualty and Life/Health).
Other assets
2022
116
Financial assets for unit-linked contracts
182
Investments
57
Cash and cash equivalents
€ mn
Changes in liabilities arising from financing activities
flows
4 Supplementary information on the
consolidated statement of cash flows
Reclassified assets and liabilities
D_Consolidated Financial Statements
Annual Report 2023 - Allianz Group
169
The assets and liabilities of Allianz Saudi Fransi classified as held
for sale are allocated to the reportable segments Global Insurance
Lines & Anglo Markets, Iberia & Latin America, Middle East and Africa
(Property-Casualty).
On 27 September 2023, the Allianz Group entered into a binding
agreement to sell its 51 % stake in Allianz Saudi Fransi to Abu Dhabi
National Insurance Company (ADNIC). Pending receipt of regulatory
approvals, the sale is expected to be completed in the first quarter of
2024.
Allianz Saudi Arabia
On completion, cumulative losses of € 138 mn previously reported in
other comprehensive income relating to the business operation sold
mainly consisting of foreign currency translation effects of the
hyperinflationary economy were reclassified to profit or loss.
€ mn
Non-cash changes
Reinsurance contracts that are assets
€ mn
2023
1
Deferred tax assets
1,919
(450)
(607)
2,975
42,047
20
2,790
17,270
Total
Lease
liabilities
liabilities
Certificated
and subor-
dinated
Liabilities to
banks and
customers
and other
Liabilities
As of 1 January 2022
Net cash flows
Supplementary information on the consolidated statement of cash
21,988
(787)
7,840
10
Global Insurance Lines & Anglo Markets, Iberia & Latin America,
Middle East and Africa
2,582
2,561
218
245
97
267
104
276
Consolidation and Other
(200)
(236)
(49)
(51)
(57)
(49)
(57)
432
959
452
919
849
805
889
859
Asia Pacific
5,872
6,603
589
(49)
436
324
481
395
USA
18,310
15,417
1,088
399
408
Total Life/Health
77,878
75,258
(824)
(1,385)
(795)
(781)
(7)
112
(3)
94
(1,062)
(842)
89
161,700
153,324
14,746
13,814
9,101
6,984
9,032
2
1,295
(540)
935
5,191
4,218
3,595
3,205
3,788
3,317
Asset Management
Corporate and Other
(474)
Consolidation
176
8,086
8,234
3,126
3,198
2,150
759
2,353
Group
1,487
21,065
21,442
2023
2022
German Speaking Countries and Central & Eastern Europe
Western & Southern Europe, Allianz Direct and Allianz Partners
Asia Pacific
18,837
17,619
2,013
2,422
1,338
2022
1,217
999
22,847
20,756
1,792
1,578
1,094
875
1,078
1,241
794
2023
2023
Income taxes
6,856
1_Includes acquisition and administrative expenses, other income, other expenses, amortization of intangible assets, and restructuring and integration expenses.
9,032
6,856
Net income
175
Annual Report 2023 - Allianz Group
2022
D_Consolidated Financial Statements
Reportable segment information - key indicators
€ mn
Total business volume
Operating profit (loss)
Shareholders' core net income (loss)
Net income (loss)
2023
2022
Reportable segment information - key indicators
6,856
6,332
376
70,613
6,909
6,827
4,421
3,750
4,274
3,357
Total Property-Casualty
76,531
German Speaking Countries and Central & Eastern Europe
29,847
1,859
1,895
1,379
1,407
1,413
1,404
Western & Southern Europe
29,872
6,050
1
1
545
235
356
259
359
Global Insurance Lines & Anglo Markets, Iberia & Latin America,
Middle East and Africa
33,028
30,209
1
2,728
1,753
1,300
1,694
1,203
Consolidation
(4,512)
(4,021)
1
2,281
Annual Report 2023 - Allianz Group
D_Consolidated Financial Statements
6
(4,648)
96
89
(19,211)
(18,604)
Total
(59,640)
(56,035)
(4,604)
(17,671)
166
149
(77,145)
(73,911)
177
Annual Report 2023 - Allianz Group
D_Consolidated Financial Statements
6.3
(18,026)
Reinsurance result
(14,045)
Acquisition and administrative expenses
Consolidation
Group
2023
Incurred claims
(44,938)
2022
(41,990)
2023
2022
(14,702)
2023
2023
2022
(13,066)
(13,378)
70
60
(57,934)
(55,307)
2022
Life/Health
Reinsurance result
Property-Casualty
4,035
3,120
2,109
(66)
(69)
6,806
Total
(2,608)
3,752
(1,725)
(390)
17
25
(2,742)
6,074
(2,090)
178
Annual Report 2023 - Allianz Group
103
(151)
€ mn
Amounts recoverable from reinsurers for incurred claims
(9,548)
Life/Health
Consolidation
Group
2023
2022
2023
2022
2023
(8,165)
2022
2022
Allocation of reinsurance premiums
(6,360)
(5,760)
(3,271)
(2,499)
83
94
2023
(2,808)
Property-Casualty
91,251
2022
2023
2022
68,393
63,504
956
998
(24)
2023
(32)
2022
64,470
183
289
13,626
13,916
(70)
109
107
2023
69,326
4,967
2022
Consolidation
NOTES TO INSURANCE OPERATIONS
6.1 Insurance revenue
Insurance revenue
€ mn
Insurance revenue from contracts measured under the PAA
Insurance revenue from contracts not measured under the PAA
Amounts relating to changes in the liability for remaining
coverage
Insurance service expenses incurred
CSM recognized for services provided
Change in the risk adjustment
2023
Other
Subtotal
Total
6.2 Insurance service expenses
Insurance service expenses
€ mn
Group
Property-Casualty
Life/Health
Recovery of insurance acquisition cash flows
86,985
5,020
4
$་་ཞ་8 8
(64)
13,740
14,141
(34)
5,057
5,093
516
(86)
574
(68)
(29)
2,679
2,736
(60)
21,925
22,515
(91)
38
(18)
23,114
63,963
9
512
566
9
11
(103)
(78)
26
22,580
57
2,622
2,692
364
459
21,624
22,116
(62)
68,757
44
(2,550)
Income before income taxes
9,664
2022
2023
2022
Income (loss) before income taxes
5,736
4,811
4,750
4,491
2023
3,165
(2,073)
(1,334)
3
119
11,582
9,664
Adjustment for non-operating market movements
246
1,578
596
2022
2022
2_Total revenues comprise insurance revenue and fee and commission income in Property-Casualty, insurance revenue in Life/Health, and operating revenues in Asset Management.
3_Includes acquisition and administrative expenses, other income, and other expenses.
4_Includes, if applicable, acquisition-related expenses, income taxes related incidental benefits/expenses, litigation expenses, one-time effects from significant reinsurance transactions with disposal character, and income and expenses from the application of hyperinflation accounting. Until 2022, the
effects from the application of hyperinflation accounting were included in non-operating investment income (net).
173
Annual Report 2023 - Allianz Group
D_Consolidated Financial Statements
Business segment information - reconciliation of income (loss) before income taxes to shareholders' core net income (loss)
€ mn
Property-Casualty
2023
Life/Health
Corporate and Other
Consolidation
Group
2023
2022
2023
2022
2023
Asset Management
1_Total business volume comprises gross written premiums and fee and commission income in Property-Casualty, statutory gross premiums in Life/Health, and operating revenues in Asset Management. The definition of total business volume is comparable to the definition of total revenues previously
used within the Allianz Group. The revenues from the banking business are, however, not part of the total business volume anymore as the remaining banking activities can be considered immaterial. Moreover, in Property-Casualty and in Life/Health, smaller adjustments to premiums at some entities
are applied, following some interpretation/presentation changes.
(2)
(13)
4,565
3,154
1,585
(1,508)
(1,237)
(2)
122
12,466
4,760
10,528
(1,513)
(1,613)
(965)
(1,189)
(809)
(646)
571
464
Income taxes related to core income (loss)
62
5,493
Core income (loss) before income taxes
2
553
90
(4)
4
780
753
Adjustment for amortization of intangible assets from business
combinations
6,062
80
11
12
2
4
11
7
105
110
87
(1)
435
6,421
(1)
90
(629)
(749)
(225)
(169)
25
(2,063)
(181)
(122)
Non-operating other result
3
(3,100)
Income (loss) before income taxes
5,736
4,811
4,750
4,491
3,165
1,578
(1,010)
(2,073)
(1,050)
3
3
(1,524)
(489)
Interest expenses from external debt
(631)
(561)
(631)
(561)
(2,155)
Subtotal
(1,267)
(217)
442
14
443
(1,418)
(672)
10
(544)
491
8,541
(1,334)
(1,462)
(2,808)
2
89
9,032
6,856
Net income (loss) attributable to:
Non-controlling interests
Shareholders
(2,550)
120
4,154
200
3,589
157
3,160
195
2,158
180
755
(23)
(1,361)
(7)
(835)
2
105
3,251
Income taxes
(29)
9,664
(1,454)
(962)
(1,174)
(812)
(644)
Net income (loss)
4,274
3,357
(1)
3,788
2,353
935
688
(1,385)
492
(842)
NEW
119
11,582
3,317
(111)
(29)
(3,013)
372
64
24,578
(12,600)
Net investment income
26,732
(11,551)
thereof operating net investment
income
(114)
(1,524)
thereof non-operating net investment
income
thereof interest expenses from
(631)
(561)
external debt
Net insurance finance expenses
(21,577)
15,564
(489)
(390)
(322)
24,528
(2,996)
330
179
179
Claims and benefits
(58,040)
(55,345)
(22,466)
(21,563)
(12,550)
expenses
(2,090)
330
8,332
179
8,165
Acquisition and administrative
Reinsurance result
Other insurance service result
Operating insurance service result
Net investment income
(2,742)
(3,361)
(273)
15,292
60
94
(7,237)
(9,321)
Other result
(6,228)
(6,221)
thereof operating other result
2,996
(1,010)
thereof non-operating other result
Income before income taxes
Income taxes
11,582
(2,550)
9,664
(2,808)
Net income
9,032
11,582
(3,100)
(21,967)
3,361
288
Net insurance finance income
(expenses)
Fee and commission income and
expenses (net)
8,164
8,139
(153)
(235)
(372)
(64)
contracts
7,639
Operating fee and commission income
and expenses (net)
Operating net result from investment
Other result¹
(238)
(10,659)
(60)
(12,411)
475
349
237
Net result from investment
contracts
(2,717)
10,983
Insurance service result
9,101
6,984
Reconciliation from external to management
reporting
For steering purposes, the Allianz Group classifies certain income and
expenses differently than required by IFRS as this is considered to
provide more meaningful information. The main line items affected
are the operating insurance service result, the operating net result from
investment contracts, and the operating net investment income.
The Allianz Group uses operating insurance service result as a
performance indicator. In contrast to the IFRS 17 definition of
insurance service result, the following components not included in the
IFRS insurance service result are included in the operating insurance
service result:
-
-
non-attributable acquisition, administrative, and claims expenses
which before adoption of IFRS 17 were also included in the
underwriting result. These expenses are included in the line
acquisition and administrative expenses in the consolidated
income statement¹;
94
adjustments for experience variances at claims and expenses if the
technical result is shared with the policyholders. In the
consolidated income statement, these experience variances are
part of the net insurance finance expenses;
For a better analysis of the result from investment contracts, all related
income and expenses are included in the line operating result from
investment contracts. For this, fee and commission income and
expenses as well as net investment income are reclassified from the
respective line items in the Group income statement.
Fee and commission income and expenses are reclassified to
operating net investment income if they are related to insurance
contracts.
The following table reconciles the amounts in the consolidated
Group income statement to the amounts presented in the
reconciliation of operating profit (loss) to net income (loss) (OP
reconciliation).
1_For the following reconciliation, non-attributable acquisition, administrative, and claims expenses and
restructuring charges and amortization of intangible assets are included in the line Other result.
174
Annual Report 2023 - Allianz Group
D_Consolidated Financial Statements
Reconciliation for special line items between Group income statement and reconciliation of operating profit to net income
specific restructuring charges and amortization of intangible
assets which are shared with the policyholders.
€ mn
(3)
7,515
Core net income (loss)
4,549
3,881
3,795
3,376
2,345
thereof: Shareholders' core net income (loss)
4,421
(824)
3,750
3,205
2,150
939
759
(937)
(1,062)
(773)
(3)
93
9,749
3,595
11,364
Reclassification of income
related to investment
contracts
2023
(73,911)
thereof incurred claims and
other insurance service
expenses
(57,934)
(55,307)
(106)
(38)
(77,145)
thereof acquisition and
(19,211)
(18,604)
(3,255)
(2,958)
Reinsurance result
(2,742)
(2,090)
330
administrative expenses
2022
Insurance service expenses
91,251
2022
Reclassification of fee
income related to
insurance contracts
2023
OP reconciliation
OP reconciliation line items
2022
2023
91,251
2022
86,985
Insurance revenue
86,985
Consolidated income statement
line items
statement
2023
2022
Reclassification of non-
attributable expenses
2023
Reclassification of
variances and
restructuring expenses
2022
2023
Insurance revenue
Consolidated income
285
Annual Report 2023 - Allianz Group
(1,027)
680,584
(49)
776,772
91,356
649,142
(26)
740,472
Annual Report 2023 - Allianz Group
D_Consolidated Financial Statements
Reinsurance contracts¹
€ mn
As of 31 December
Asset (liability) for remaining coverage
Property-Casualty
2023
Life/Health
Consolidation
Total
Property-Casualty
2022
Life/Health
Consolidation
Total
Contracts measured under the PAA
1,959
688
(7)
2,639
1,953
96,237
83,232
(26)
8,211
Total
1_Amounts relevant for the analysis by measurement component in note 6.6.
2_Includes € 106,937 mn future discretionary benefits.
1_Insurance contract liabilities net of insurance contract assets.
180
341
10
350
251
8
259
37
237
58
(1)
93
880
58
1
102
8,350
(27)
8,560
262
7,783
(17)
8,028
79,148
8,789
(47)
87,890
75,048
44
Subtotal
(4)
Deposits
9,576
(15)
9,541
(23)
thereof deposits
thereof receivables
thereof payables
Risk adjustment
CSM
Subtotal
Subtotal
(23,081)
9
(23,072)
10,467
(24,061)
18
10,462
(24,061)
1
52
53
48
49
(5)
(752)
3
(754)
(7)
(534)
(20)
Present value of future cash flows
Contracts not measured under the PAA¹
50
Receivables
Payables
(152)
(4)
(155)
(257)
5
(252)
(10)
2
(3)
(12)
44
(4)
2,830
41
(25)
22
(2,532)
(2,583)
6
Subtotal
(732)
664
8
(59)
(843)
887
96
(2,568)
(2,529)
24
Subtotal
thereof payables and deposits
2,205
Risk adjustment
CSM
77
4,647
(1)
4,724
65
5,194
(5)
5,255
1,239
52,601
(22)
53,818
1,172
52,227
(16)
53,382
Subtotal
7,744
671,118
5
678,867
8,176
639,544
11
647,731
Subtotal
(1)
2,163
43
2,167
9,345
677
(7)
10,015
8,133
1,387
(11)
9,509
Contracts not measured under the PAA¹
Present value of future cash flows2
6,428
613,869
28
620,325
17,088
6,940
32
589,094
thereof receivables
(169)
(2,824)
14
(2,979)
(126)
(2,738)
29
(2,835)
thereof payables and deposits
16
2,151
582,123
Risk adjustment
671,795
688,882
1,358
Risk adjustment
1,782
1
1,783
1,862
1
(1)
1,862
Subtotal
78,911
439
(20)
79,330
74,786
428
(9)
75,204
Contracts not measured under the PAA¹
Present value of future cash flows
200
8,292
(26)
8,467
204
7,740
(18)
7,926
thereof receivables
(1)
129
1,230
1,117
16,309
640,931
657,240
thereof asset for acquisition cash flows
(1,413)
(40)
(1,453)
(1,258)
(36)
(1,294)
Liability for incurred claims
Contracts measured under the PAA
Present value of future cash flows
77,129
(1)
439
77,547
72,924
427
(8)
73,342
thereof receivables
(161)
(161)
(212)
(212)
thereof payables and deposits
975
143
(2)
(20)
Subtotal
(518)
910
component component
Insurance contract assets as of 1 January
(534)
Insurance contract liabilities as of 1 January
657,213
Net insurance contract liabilities as of 1 January
656,680
560
560
8,028
8,028
future cash
flows
207
73,136
73,342
Risk
Excluding
loss
Present
value of
adjustment
(327)
1,862
1,862
740,799
740,472
Insurance revenue
(91,251)
(91,251)
component
(50)
795,468
795,418
(86,985)
Loss
component
future cash
flows
Risk
adjustment
14
434
434
8,459
Loss
value of
loss
Excluding
11,581
25,347
6.6 Movements in insurance contract
balances
The following tables analyze the movements in the net insurance
contract liabilities during the reporting period. The first set of tables
analyzes the movements in the liability for remaining coverage and
liability for incurred claims for the Allianz Group and the business
segments. The second set analyzes the movements of contracts not
measured under the PAA by measurement components.
The corresponding analyses for reinsurance contracts are
included in note 6.7.
1_Reinsurance contract assets net of reinsurance contract liabilities.
181
Annual Report 2023 - Allianz Group
D_Consolidated Financial Statements
6.6.1 Analysis by remaining coverage and incurred claims - Allianz Group
Analysis by remaining coverage and incurred claims - Allianz Group
€ mn
2023
8,459
2022
Liability for incurred claims
Total
Liability for remaining
coverage
Liability for incurred claims
Total
Contracts
Contracts
not
not
measured
under the
PAA
Contracts measured under
the PAA
measured
under the
PAA
Contracts measured under
the PAA
Present
Liability for remaining
coverage
1,321
76,616
76,630
2,273
40
40
7,107
(134)
21,864
(47,112)
46,403
48,473
709
(165)
77,145
14,837
86
(46,270)
14,107
45,150
45,036
1,120
(154)
73,911
Cash flows in the period
Premiums received
Insurance acquisition cash flows
Incurred claims paid and other insurance service expenses paid
Deposits
143,287
(17,930)
143,287
137,216
(262)
(17,930)
(17,275)
(17,275)
4
4
Investment component
Impairments of assets for insurance acquisition cash flows
(36)
883,250
883,214
(86,985)
Insurance service expenses
Incurred claims and other incurred insurance service expenses
Amortization of insurance acquisition cash flows
(2,156)
9,259
18,759
24,980
41,583
5,825
10,670
23,327
39,821
9,259
8,972
2,273
8,972
3,105
23,493
(165)
26,433
3,437
21,709
(154)
24,992
Losses on onerous groups of contracts and reversals of such losses
(134)
(134)
86
86
Subtotal
Changes in the liability for incurred claims
7
23
291
230
(38)
10,460
9,797
160
thereof deposits
(1,186)
5
(1,181)
(1,280)
thereof receivables
1,023
202
1,226
900
118
thereof payables
(49)
(49)
(67)
(1)
Risk adjustment
333
333
344
Subtotal
10,601
230
(38)
10,267
Present value of future cash flows
Contracts measured under the PAA
Asset for incurred claims
1
918
4
1,275
(1)
1,279
18
1,897
8
1,922
19
1,950
6
1,976
10,793
4
(6)
12,381
1
13,692
23
13,716
(727)
13,047
2
12,322
(841)
14,579
29
13,767
12,383
(12)
10,141
Contracts not measured under the PAA¹
29
(7)
857
532
(15)
1,374
855
472
11,458
762
(53)
12,167
10,730
13,810
(51)
24,489
10,996
10,155
632
(47)
15,211
(18)
༔ སྦྱ^@S་བྱ་-༠ཊྛུ་
9,918
(1,275)
1,006
(65)
342
10,260
1,298
(175)
18
(1)
3
17
Present value of future cash flows
840
529
(13)
1,356
826
479
thereof deposits
thereof receivables
thereof payables
Risk adjustment
Subtotal
Subtotal
Total
160
1_Amounts relevant for the analysis by measurement component in note 6.7.
(176)
(1)
(175)
57
325
(7)
375
2
290
(18)
3
(15)
(7)
(6)
(176)
(68,091)
1,739
11
(691)
(22,133)
(80)
(21,465)
(589)
153,917
(3)
145,371
8,549
(50,192)
(82)
(278)
(232)
(45)
་@
(46,894)
(3,216)
Recognized in profit or loss
Subtotal
30
(27)
57
Foreign currency gains/losses¹
1,830
1,830
485
485
Effects of risk mitigation option
116,089
14,833
14,142
Recognized in other comprehensive income
(2,627)
588
Subtotal
33
33
63
2
61
(4,106)
10
(3,027)
(1,089)
2
(12)
(337)
114,240
351
1,048
898
150
579
403
177
Finance income (expenses) from reinsurance contracts (net)
Interest accreted
139,775
(3)
130,539
9,240
(28,059)
(2)
(25,430)
Effect of changes in interest rates and other financial assumptions
Foreign currency gains/losses¹
68
1,849
(80)
(2,372)
5
(1,902)
(475)
(2,332)
53,382
655,760
(1)
4,817
53,818
687,521
597,022
5,357
53,382
(1)
655,761
1_As of 31 December 2023, the CSM is € 0.8 bn less due to a correction of the present value of non-attributable costs.
185
Annual Report 2023 - Allianz Group
D_Consolidated Financial Statements
6.6.5 Analysis by measurement component - contracts not measured under the PAA - Property-Casualty
Analysis by measurement component - contracts not measured under the PAA - Property-Casualty
€ mn
2023
2022
Present value of
future cash flows
Risk adjustment
CSM
Total
Present value of
future cash flows
4,189
26,931
31,120
6,758
(34,255)
(390)
Change in fair value of underlying items
42,562
(3)
35,263
7,303
(8,946)
(2)
(6,902)
(2,042)
Effect of changes in interest rates and other financial assumptions
(6,286)
(5,729)
(34,725)
(557)
(6,195)
(841)
Interest accreted
Finance income (expenses) from insurance contracts (net)
Net insurance finance result
(157,678)
6
(146,677)
(144,187)
(131,536)
(12,651)
(11,007)
55,821
54
49,009
(7,036)
Risk adjustment
(12)
(906)
46,591
Finance income and expenses from insurance contracts (net)
3,811
3,811
(3,553)
(3,553)
Subtotal
(491)
(491)
(85)
(85)
Receivables and payables (net)
91
(59,011)
(5,214)
68,436
91
3
3
Deposits
(59,011)
(68,034)
(68,034)
Incurred claims paid and other insurance service expenses paid,
including investment component
68,436
(5,214)
(5,562)
70,125
70,125
(5,562)
Insurance acquisition cash flows
606
47,263
(147,755)
(721)
(2)
(17)
(281)
Net insurance contract liabilities as of 31 December
Insurance contract assets as of 31 December
Insurance contract liabilities as of 31 December
(1,792)
628,839
(47)
628,886
13
4,817
(638)
53,818
(2,417)
687,474
(47)
(277)
(95)
69
(303)
Premiums received for insurance contracts issued
597,021
sale
Changes in the consolidated subsidiaries of the Allianz Group
Reclassification into assets of disposal groups classified as held for
5
4
1
(147,933)
11,816
544
694
261
10,861
(4,472)
(361)
(70)
(4,042)
Foreign currency translation adjustments
5,357
644
Cash flows in the period
(17)
(370)
(923)
Changes in estimates that adjust CSM¹
Changes that relate to future service
(5,519)
4,131
Amounts recognized in other comprehensive income
Amounts recognized in profit or loss
Total
(4,446)
10
(3,336)
(1,120)
88
(5,117)
(12)
(258)
358
Recognized in other comprehensive income
1,422
1,207
215
556
326
231
Recognized in profit or loss
(3,024)
10
(2,130)
1,293
7,416
(605)
(6,749)
218
109
(11)
120
Changes in fulfillment cash flows relating to incurred claims
(changes in the liability for incurred claims)
Changes that relate to past service
75
(2,172)
(99)
2,345
(8)
5,882
(24)
(5,866)
201
Subtotal
506
(5,083)
4,589
346
(4,935)
Effects of contracts initially recognized in the period
12
12
(8)
(8)
onerous contracts and reversals of such losses)
Changes in estimates that do not adjust CSM (losses on groups of
62
62
4,577
(6)
CSM
Insurance contract assets as of 1 January
(1,282)
(1,036)
10
(43,199)
(38)
(1)
(44,632)
(114)
(1,481)
(46,913)
11,369
55,530
(1,424)
(43,238)
10,868
Finance income and expenses from insurance contracts (net)
384
40
2,747
101
3,273
(1,865)
(26)
(6,469)
(201)
(8,560)
Foreign currency translation adjustments
(9)
(2)
(441)
(13)
(188)
4
(1,098)
59,763
Subtotal
47,905
709
(164)
59,640
11,107
78
(1,941)
301
929
44,705
1,012
(156)
56,035
Cash flows in the period
Premiums received
72,731
Insurance acquisition cash flows
(465)
(11,885)
(1,485)
(46,722)
72,731
(11,885)
(48,207)
68,168
68,168
(11,525)
(11,525)
(1,434)
Deposits
15
(3)
11
(76)
Receivables and payables (net)
Incurred claims paid and other insurance service expenses paid
610
912
8
(93)
Total Property-Casualty
2022
Life/Health
Consolidation
Total
Contracts measured under the PAA
21,237
983
(11)
22,209
18,872
1,381
(1)
20,251
Receivables
(13,894)
(314)
8
(14,200)
(12,473)
(4)
(4)
(12,481)
Payables and deposits
2,002
8
(4)
2,006
1,734
Consolidation
Life/Health
2023
Property-Casualty
193
2,183
2,211
1,920
940
1,242
(40)
6,273
(3,364)
(26)
(14)
3,125
3,148
1,168
(3,436)
900
(4,531)
(4,333)
80
13
(6,785)
2,074
(8,858)
1_Foreign currency gains/losses are included in the line foreign currency translation adjustments for the analysis of movements in insurance and reinsurance contract balances in notes 6.6 and 6.7. The remaining deviation from the amounts disclosed as finance income (expenses) (net) in notes 6.6 and
6.7 results from different exchange rates used for the translation of profit or loss and balance sheet amounts.
179
Annual Report 2023 - Allianz Group
D_Consolidated Financial Statements
6.5 Insurance and reinsurance
contract balances
The following tables show the composition of insurance and
reinsurance contract balances.
Insurance contracts¹
€ mn
As of 31 December
Liability for remaining coverage
6
7
Total
7,783
1
234
(4)
(109)
120
246
(9)
(107)
130
Changes that relate to future service
Changes in estimates that adjust CSM
(100)
7
22
92
172
(195)
23
Changes in estimates that do not adjust CSM (losses on groups of
onerous contracts and reversals of such losses)
5
5
Effects of contracts initially recognized in the period
Subtotal
(88)
(187)
6
(1,848)
(490)
(36,219)
(34,722)
Subtotal
246
246
234
Insurance contract liabilities as of 1 January
Net insurance contract liabilities as of 1 January
7,144
7,144
123
1,172
8,438
9,667
123
1,172
8,438
9,667
139
1,351
11,157
(1,496)
139
11,157
Changes that relate to current service
CSM recognized for the services provided
(109)
(109)
(107)
(107)
Change in RA, that does not relate to future or past service
(4)
(4)
(9)
(9)
Experience adjustments
234
1,351
427
7,229
(691)
6.4 Total investment result
D_Consolidated Financial Statements
Insurance contract assets as of 1 January
2022
2023
€ mn
Analysis by measurement component - contracts not measured under the PAA - Allianz Group
6.6.4 Analysis by measurement component - contracts not measured under the PAA - Allianz Group
D_Consolidated Financial Statements
Annual Report 2023 - Allianz Group
649,184
1
410
7,783
177
640,813
(42)
17
(59)
(69)
680,654
1
433
8,334
116
671,770
5
16
(91)
649,142
The following table analyzes the total investment result of the
Property-Casualty and Life/Health business segments recognized
in profit or loss and other comprehensive income in the period:
Total investment result
€ mn
Total investment income
346
1
305
40
(5,508)
48
(5,146)
(410)
24,754
21,179
3,576
25,312
21,152
4,160
7,920
Total
Life/Health
2022
Property-Casualty
Total
Consolidation
Life/Health
Property-Casualty
2023
Subtotal
Amounts recognized in other comprehensive income
Investment expenses
Valuation result
Realized gains/losses (net)
Interest result
Consolidation
(47,242)
137,216
15
62
Changes in estimates that do not adjust CSM (losses on groups of
onerous contracts and reversals of such losses)
(8)
(8)
7
7
Effects of contracts initially recognized in the period
(4,854)
339
4,515
(5,008)
317
4,691
Subtotal
(5,701)
(43)
5,735
(8)
2,231
(93)
(2,069)
70
Changes that relate to past service
Changes in fulfillment cash flows relating to incurred claims
(changes in the liability for incurred claims)
142
13
155
318
(6,760)
(409)
7,232
1,220
782,735
Changes that relate to current service
CSM recognized for the services provided
(4,967)
(4,967)
(5,043)
(5,043)
Change in RA, that does not relate to future or past service
(512)
(512)
(564)
(564)
Experience adjustments
249
(11)
249
51
Subtotal
249
(512)
(4,967)
(5,229)
51
(564)
(5,043)
(5,557)
Changes that relate to future service
Changes in estimates that adjust CSM¹
(839)
(382)
51
58,052
306
Premiums received for insurance contracts issued
(715)
545
(146,045)
Foreign currency translation adjustments
(4,038)
(68)
(363)
(4,469)
10,850
257
694
11,801
Changes in the consolidated subsidiaries of the Allianz Group
Reclassification into assets of disposal groups classified as held for
1
4
5
sale
(262)
(2)
(17)
(281)
Other changes
(1,827)
14
Net insurance contract liabilities as of 31 December
Insurance contract assets as of 31 December
Insurance contract liabilities as of 31 December
622,208
(47)
622,255
4,705
(145,875)
46,865
606
63
Insurance acquisition cash flows
69,539
(5,457)
69,539
67,812
67,812
(5,457)
(5,116)
(5,116)
Incurred claims paid and other insurance service expenses paid,
including investment component
(66,760)
(66,760)
(57,738)
(57,738)
Deposits
Cash flows in the period
1
93
93
Receivables and payables (net)
(2)
(2)
(447)
(447)
Subtotal
(2,678)
(2,678)
4,603
4,603
Finance income and expenses from insurance contracts (net)
46,197
1
(641)
52,601
6,464
58,052
670
675
Insurance acquisition cash flows
(104)
(104)
(98)
Incurred claims paid and other insurance service expenses paid,
including investment component
(1,435)
(1,435)
(1,421)
Deposits
Receivables and payables (net)
(68)
(68)
(28)
Subtotal
(938)
(938)
(872)
675
(98)
(1,421)
(28)
(872)
Finance income and expenses from insurance contracts (net)
393
4
1
Foreign currency translation adjustments
670
Premiums received for insurance contracts issued
Cash flows in the period
(107)
(1)
(1,727)
(180)
(115,333)
(114)
26
(266)
671,679
116
8,350
439
1
680,584
640,754
(2)
177
15
172
83
(2)
(76)
5
Changes that relate to past service
Changes in fulfillment cash flows relating to incurred claims
(changes in the liability for incurred claims)
(13)
(21)
(34)
(101)
(6)
(100)
782,735
(1)
(1,884)
D_Consolidated Financial Statements
6.6.6 Analysis by measurement component - contracts not measured under the PAA - Life/Health
Analysis by measurement component - contracts not measured under the PAA - Life/Health
€ mn
2023
2022
Insurance contract assets as of 1 January
Present value of
future cash flows
Risk adjustment
(1)
CSM
Total
Present value of
future cash flows
Risk adjustment
CSM
Total
(1)
Insurance contract liabilities as of 1 January
589,864
5,238
52,227
647,329
Net insurance contract liabilities as of 1 January
589,863
5,238
52,227
647,328
718,219
718,219
6,464
Annual Report 2023 - Allianz Group
186
8,438
1,172
11
(6)
4
(1,891)
14
Changes in the consolidated subsidiaries of the Allianz Group
Reclassification into assets of disposal groups classified as held for
sale
Other changes
(2)
3
1
(6)
3
4
Net insurance contract liabilities as of 31 December
397
(3)
6,628
1,239
7,981
7,144
123
1,172
1
8,438
Insurance contract assets as of 31 December
Insurance contract liabilities as of 31 December
6,628
114
1,239
7,981
7,144
123
114
(12)
(2,454)
679,515
(98)
(3,641)
2,024
10,589
(2,888)
(3,625)
4,076
Finance income and expenses from reinsurance contracts (net)
40
72
452
17
581
(2,010)
(173)
(695)
(20)
(2,898)
thereof effect of changes in the risk of reinsurers' non-performance
Foreign currency translation adjustments
1
(8)
(7)
3
32
35
(500)
(32)
(159)
(6)
(697)
(3,990)
9,656
Subtotal
122
Cash flows in the period
Premiums paid, including amounts held in deposits
9,837
Amounts received
(280)
(4,085)
(4,033)
9,837
(8,398)
8,149
(360)
(2,861)
(3,327)
8,149
(6,548)
Deposits
813
422
155
576
2,220
(8)
141
2,354
Receivables and payables (net)
(324)
97
236
10
580
(20)
(438)
(2)
164
72
13
10,460
333
24,489
13,749
18
1,321
9,918
342
25,347
12,544
18
1,362
10,462
333
24,719
14,053
18
1,273
9,918
342
25,605
(240)
12
(2)
(231)
(305)
48
(257)
188
1,374
18
12,304
(958)
884
Changes in the consolidated subsidiaries of the Allianz Group
Reclassification into assets of disposal groups classified as held for sale
Other changes
Net reinsurance contract assets as of 31 December
Reinsurance contract assets as of 31 December
Reinsurance contract liabilities as of 31 December
(20)
(1)
47
1
27
(3)
10
8
37
(12)
(47)
(14)
(21)
56
107
1
240
(98)
(46)
120
(7)
(31)
(1,210)
10
(92)
318
16
77
(272)
849
4
Contracts measured under
the PAA
measured
under the
PAA
Contracts measured under
the PAA
Excluding
loss
recovery
Present
Loss
recovery
value of
Excluding
loss
future cash
Risk
component component
flows
adjustment
Loss
recovery
recovery
component component
Present
value of
future cash
flows
Risk
adjustment
Reinsurance contract assets as of 1 January
Reinsurance contract liabilities as of 1 January
14,053
18
1,273
9,918
342
25,605
measured
under the
PAA
not
not
Contracts
589,863
5,238
65
52,227
(305)
647,328
4,705
52,601
(47)
679,562
(1)
589,864
5,238
52,227
(1)
647,329
1_As of 31 December 2023, the CSM is € 0.8 bn less due to a correction of the present value of non-attributable costs.
14,501
187
D_Consolidated Financial Statements
6.7 _ Movements in reinsurance contract balances
6.7.1 Analysis by remaining coverage and incurred claims - Allianz Group
Analysis by remaining coverage and incurred claims - Allianz Group
€ mn
2023
2022
Asset for remaining
coverage
Asset for incurred claims
Total
Asset for remaining
coverage
Asset for incurred claims
Total
Contracts
Annual Report 2023 - Allianz Group
(1,012)
21
9,625
3,061
(13)
3,366
1,805
596
2,645
188
3,432
(178)
3,442
Recoveries and reversals of recoveries of losses on onerous underlying
contracts
(13)
(13)
Subtotal
(520)
3,573
3,766
(13)
6,806
244
(13)
1,993
4,028
(178)
6,074
Investment component
(492)
488
318
244
3,441
705
511
26,141
(305)
48
(257)
(76)
Net reinsurance contract assets as of 1 January
13,749
18
1,321
9,918
342
25,347
14,425
1,484
21
(55)
9,625
511
26,086
Allocation of reinsurance premiums
(9,548)
(9,548)
(8,165)
(8,165)
Amounts recoverable from reinsurers
Incurred claims recovered and other expenses recovered
(520)
Changes in the asset for incurred claims
3,255
21
1,505
(40)
3
(150)
(2,735)
91,356
18,396
288
384
76,279
2,275
97,622
Insurance revenue
(68,757)
(68,757)
(63,963)
(63,963)
Insurance service expenses
Incurred claims and other incurred insurance service expenses
1,862
371
294
23,009
Amortization of insurance acquisition cash flows
Changes in the liability for incurred claims
4,443
6,969
29,285
4,344
27,647
6,969
6,737
6,737
239
23,434
(164)
24,471
23,509
72,924
395
Present
value of
component component
Insurance contract assets as of 1 January
(475)
flows
190
adjustment
component
Loss
component
future cash
Risk
flows
adjustment
(285)
(5)
262
(5)
16,388
395
262
72,734
1,862
91,641
18,402
288
384
76,279
2,275
97,627
Net insurance contract liabilities as of 1 January
15,914
Insurance contract liabilities as of 1 January
Excluding
loss
7
(156)
Total
727,909
727,909
6,602
59,381
793,892
6,602
59,381
793,892
Changes that relate to current service
CSM recognized for the services provided
(5,057)
(5,057)
(5,117)
(5,117)
CSM
Change in RA, that does not relate to future or past service
(516)
(573)
(573)
Experience adjustments
359
359
171
171
Subtotal
359
(516)
(5,057)
(5,214)
171
(516)
21,697
655,761
655,760
5,357
21,547
Losses on onerous groups of contracts and reversals of such losses
(126)
(126)
78
78
Subtotal
Impairments of assets for insurance acquisition cash flows
Investment component
4
4
26
26
11,415
53,382
(126)
Insurance contract liabilities as of 1 January
Net insurance contract liabilities as of 1 January
Present value of
future cash flows
Risk adjustment
(1)
597,022
597,021
CSM
Total
Present value of
future cash flows
Risk adjustment
(1)
5,357
53,382
(1,621)
Risk
future cash
Loss
(442)
(13)
(4,962)
11,362
4
472
11
11,859
Changes in the consolidated subsidiaries of the Allianz Group
(204)
(9)
63
51
2
(32)
(97)
6
69
Reclassification into assets of disposal groups classified as held for sale
(396)
(4)
(129)
(1)
(530)
(1,893)
(50)
(444)
(3)
(2,390)
Other changes
63
(2,709)
(1)
Foreign currency translation adjustments
2
(3)
14
19
Receivables and payables (net)
(1,498)
109
(174)
Subtotal
123,874
(67,980)
(47,419)
Finance income and expenses from insurance contracts (net)
47,003
(4,474)
367
103
(1,563)
8,474
50,222
(875)
119,085
(147,552)
(59,052)
(4)
(187)
(59,243)
(380)
(43,634)
(38)
49
(102,686)
(23)
(1,013)
(43,624)
16,219
(6,472)
(201)
(154,605)
2,749
(53)
(149)
213
740,472
(327)
1,862
740,799
182
Annual Report 2023 - Allianz Group
D_Consolidated Financial Statements
6.6.2 Analysis by remaining coverage and incurred claims - Property-Casualty
Analysis by remaining coverage and incurred claims - Property-Casualty
€ mn
2023
2022
Liability for remaining
coverage
Liability for incurred claims
1,862
Total
Liability for incurred claims
Total
Contracts
Contracts
not
not
measured
under the
PAA
Contracts measured under
the PAA
measured
under the
PAA
Contracts measured under
the PAA
Present
Excluding
loss
value of
Liability for remaining
coverage
73,342
207
73,136
8,028
560
(4)
(2,702)
(1,322)
32
(19)
562
(71)
(818)
Net insurance contract liabilities as of 31 December
688,518
364
8,560
77,547
1,783
776,772
656,680
560
657,213
(534)
(172)
776,944
1,783
77,541
8,544
(5)
364
Insurance contract liabilities as of 31 December
6
16
(194)
Insurance contract assets as of 31 December
8,028
688,711
(1,674)
11
11
7
14
14
Investment component
(4,308)
(45,500)
(8)
21,422
45,500
565
17,671
3,732
(44,331)
7
13,920
366
7
18,026
107
Cash flows in the period
Premiums received
Insurance acquisition cash flows
Incurred claims paid and other insurance service expenses paid
Deposits
Receivables and payables (net)
Subtotal
Finance income and expenses from insurance contracts (net)
Foreign currency translation adjustments
Changes in the consolidated subsidiaries of the Allianz Group
Reclassification into assets of disposal groups classified as held for sale
Other changes
Net insurance contract liabilities as of 31 December
44,223
(8)
3,478
20
Insurance revenue
(22,580)
474
(23,114)
(23,114)
Insurance service expenses
Incurred claims and other incurred insurance service expenses
(6,599)
18,497
516
12,414
1,482
10,462
345
12,290
Amortization of insurance acquisition cash flows
2,291
Changes in the liability for incurred claims
Losses on onerous groups of contracts and reversals of such losses
Impairments of assets for insurance acquisition cash flows
Subtotal
2,926
(8)
་ཝ
2,291
2,236
2,236
49
2,974
3,458
Insurance contract assets as of 31 December
Insurance contract liabilities as of 31 December
184
70,665
(411)
5,278
46,538
326
3
46,867
(145,688)
(357)
(3)
(4,466)
(1)
(30)
(1)
(4,498)
11,366
(7)
(1)
(146,048)
11,367
(172)
(9)
(5)
(185)
(144)
(1)
(5)
(2,664)
(44)
15
(42)
(57,951)
785,625
63,641
(507)
(6,045)
70,665
69,131
69,131
(6,045)
(5,752)
(5,752)
(66,767)
(522)
(67,288)
(57,746)
(466)
(58,212)
1
1
1
95
(3)
93
(399)
105
14
(280)
167
(203)
54
19
64,221
(66,662)
(2,948)
2
(22,580)
8,108
248
237
77,129
1,782
96,237
15,914
395
262
Insurance contract assets as of 31 December
(103)
(103)
(475)
(573)
Insurance contract liabilities as of 31 December
16,943
248
237
Annual Report 2023 - Allianz Group
183
91,641
1,862
(285)
91,356
16,840
1,862
262
395
16,388
96,339
1,782
77,129
72,924
190
72,734
Net insurance contract liabilities as of 31 December
(541)
(71)
(124)
(3)
(252)
Reclassification into assets of disposal groups classified as held for sale
69
6
(1)
63
2
51
67
(32)
Changes in the consolidated subsidiaries of the Allianz Group
491
88
D_Consolidated Financial Statements
(380)
(10)
529
97
29
(1,125)
113
(4)
(221)
271
(21)
35
Other changes
(665)
(2)
(432)
(168)
356
6.6.3 Analysis by remaining coverage and incurred claims - Life/Health
€ mn
Present
value of
Insurance contract assets as of 1 January
(59)
17
(42)
Insurance contract liabilities as of 1 January
640,813
177
7,783
410
1
649,184
Net insurance contract liabilities as of 1 January
640,754
177
7,783
427
158
(31)
785,656
2
343
8,108
158
Excluding
loss
13
Risk
future cash
flows
Loss
component
component
(45)
777,046
777,001
649,142
1
adjustment
Risk
adjustment
future cash
flows
component component
Contracts measured under
measured
under the
PAA
not
not
Contracts
Contracts
the PAA
Total
Liability for remaining
coverage
Total
Liability for incurred claims
Liability for remaining
coverage
2022
2023
Liability for incurred claims
Analysis by remaining coverage and incurred claims - Life/Health
measured
under the
PAA
Other changes
Loss
value of
loss
Excluding
Present
Contracts measured under
the PAA
2. Diversity concept
Annual Report 2023 - Allianz Group
-
The Supervisory Board shall be composed of at least 30% women and at least 30% men. The representation of women is
generally considered to be the joint responsibility of the shareholder and employee representatives.
At least four of the members must, on the basis of their origin or function, represent regions or cultural areas in which
Allianz SE conducts significant business.
For Allianz SE as a Societas Europaea, the agreement concerning the Participation of Employees in Allianz SE provides
that Allianz employees from different E.U. member states are considered in the allocation of employee representatives'
Supervisory Board seats.
In order to provide the Board with the most diverse sources of experience and specialist knowledge possible, the members
of the Supervisory Board shall complement each other with respect to their background, professional experience, and
specialist knowledge."
18
-
To promote an integrative cooperation among the Supervisory Board members, the Supervisory Board strives for an
adequate diversity with respect to gender, internationality, different occupational backgrounds, professional expertise, and
experience:
since 1 January 2024
- specialist expertise or experience in other economic sectors,
Allianz Investment Management SE (Chairman)
Allianz Lebensversicherungs-AG
until 10 March 2023
Allianz Private Krankenversicherungs-AG
Allianz Versicherungs-AG
until 9 March 2023
Christopher Townsend
Global Insurance Lines, Reinsurance, Anglo Markets, Iberia, Latin America, Africa
Membership in other statutory supervisory boards and
SE administrative boards in Germany
Membership in Group bodies
Allianz Global Corporate & Specialty SE (Chairman)
Membership in comparable¹ supervisory bodies
Sanlam Allianz Africa (Pty) Ltd. (Chairman)
since 5 September 2023
Membership in Group bodies
Allianz Australia Ltd.
Allianz Plc
Euler Hermes Group SAS (Chairman)
Renate Wagner
Membership in Group bodies
Asia Pacific, Mergers & Acquisitions, People and Culture
Membership in comparable¹ supervisory bodies
SE administrative boards in Germany
Investment Management
SE administrative boards in Germany
Membership in Group bodies
Allianz Technology SE (Chairwoman)
Membership in comparable¹ supervisory bodies
Membership in Group bodies
Allianz Partners S.A.S.
Dr. Klaus-Peter Röhler
Insurance German Speaking Countries, Central Europe, Global P&C
Membership in other statutory supervisory boards and
SE administrative boards in Germany
EUROKAI GmbH & Co. KGaA
Membership in Group bodies
Allianz Beratungs- und Vertriebs-AG (Chairman)
Allianz Lebensversicherungs-AG (Chairman)
Allianz Private Krankenversicherungs-AG (Chairman)
Allianz Versicherungs-AG (Chairman)
Membership in comparable¹ supervisory bodies
Membership in Group bodies
Allianz Suisse Lebensversicherungs-Gesellschaft AG
Allianz Suisse Versicherungs-Gesellschaft AG
Giulio Terzariol
until 31 December 2023
Finance, Risk Actuarial, Legal, Compliance
Dr. Günther Thallinger
Membership in other statutory supervisory boards and
Bajaj Allianz General Insurance Company Ltd.
Bajaj Allianz Life Insurance Company Ltd.
UniCredit S.p.A.
Membership in Group bodies
including a solvency statement. Details on the implementation of
the regulatory requirements for corporate governance by Allianz SE
and by the Allianz Group can be found in the Solvency and Financial
Condition Report of Allianz SE and of the Allianz Group, which are
published on the Allianz company website.
In addition, Allianz SE follows all suggestions of the Code in its version
of 28 April 2022.
The Declaration of Conformity and further information on
corporate governance at Allianz is available on the Allianz company
website.
Corporate Constitution
of the European Company (SE)
As a European company, Allianz SE is subject to special European SE
regulations and the German SE Implementation Act ("SE-
Ausführungsgesetz - SEAG") and the German Act on the Involvement
of Employees in a European Company ("SE-Beteiligungsgesetz
SEBG"), in addition to German Stock Corporation Law.
Notwithstanding, key features of a German stock corporation - in
particular the two-tier board system (Board of Management and
Supervisory Board) and the principle of equal employee
representation on the Supervisory Board - have been maintained by
Allianz SE. The Corporate Constitution of Allianz SE is laid down in its
Statutes. The current version of the Statutes is available on the Allianz
company website.
Regulatory requirements
The regulatory requirements for corporate governance (System of
Governance) applicable for insurance companies, insurance
groups, and financial conglomerates apply. In particular, they
include the establishment and further design of significant control
functions (independent risk control function, actuarial function,
compliance function, and internal audit) as well as general principles
for an effective and proper business organization. These regulatory
requirements are applicable throughout the Group in accordance
with the principle of proportionality. The implementation of the
regulatory requirements is supported by written guidelines issued by
the Board of Management of Allianz SE. Furthermore, Solvency II
requires the publication of qualitative and quantitative information,
13
Declaration of Conformity with the
German Corporate Governance Code
Good corporate governance is essential for sustainable business
performance. The Board of Management and the Supervisory Board
of Allianz SE therefore attach great importance to complying with the
recommendations of the German Corporate Governance Code
(hereinafter "Code"), as amended from time to time. There are no
statutory provisions on the basis of which recommendations of the
Code are not applicable to Allianz SE. On 14 December 2023, the
Board of Management and the Supervisory Board issued the
following Declaration of Conformity of Allianz SE with the Code:
Declaration of Conformity in accordance with § 161 of the German
Stock Corporation Act
Declaration of Conformity with the recommendations of the German
Corporate Governance Code Commission by the Board of Management and
the Supervisory Board of Allianz SE in accordance with § 161 of the German
Stock Corporation Act
Since issuing the last Declaration of Conformity on 15 December 2022,
Allianz SE has complied with all recommendations of the German
Corporate Governance Code Commission in the version of 28 April 2022,
and will comply with the recommendations in the future.
Munich, 14 December 2023
Allianz SE
On behalf of the Board of Management:
Signed Oliver Bäte
Signed Giulio Terzariol
On behalf of the Supervisory Board:
Signed Michael Diekmann
Board of Management
The Corporate Governance Statements according to §§ 289f and 315d
of the German Commercial Code ("Handelsgesetzbuch - HGB") form
part of the Management Report and the Group Management Report,
respectively. According to §317 (2) sentence 6 HGB, the audit of the
disclosures is limited to whether the relevant disclosures have been
made.
CORPORATE GOVERNANCE STATEMENT
B_Corporate Governance
Annual Report 2023 - Allianz Group
Allianz Australia Ltd.
since 15 May 2023
Allianz (China) Insurance Holding Company Ltd. (Chairwoman)
since 20 February 2023
Dr. Andreas Wimmer
Asset Management, US Life Insurance
Membership in other statutory supervisory boards and
SE administrative boards in Germany
Membership in Group bodies
Membership in other statutory supervisory boards and
Allianz Lebensversicherungs-AG
Membership in comparable¹ supervisory bodies
Membership in Group bodies
Allianz Life Insurance Company of North America (Chairman)
1_Generally, we regard memberships in other supervisory bodies as comparable if the company is listed on a stock exchange or has more than 500 employees.
11
Annual Report 2023 - Allianz Group
CORPORATE GOVERNANCE
B
12
since 10 March 2023
Operations, IT and Organization
Dr. Barbara Karuth-Zelle
Finance, Risk Actuarial, Legal, Compliance
Martina Grundler
National Representative Insurances, ver.di Berlin
Membership in other statutory supervisory boards and
SE administrative boards in Germany
Allianz Lebensversicherungs-AG
Frank Kirsch
Employee of Allianz Beratungs- und Vertriebs-AG
Jürgen Lawrenz
Employee of Allianz Technology SE
Membership in other statutory supervisory boards and
SE administrative boards in Germany
Membership in Group bodies
Allianz Technology SE
Primiano Di Paolo
Employee of Allianz Technology S.p.A.
1_Generally, we regard memberships in other supervisory bodies as comparable if the company is listed on a stock exchange or has more than 500 employees.
10
Annual Report 2023 - Allianz Group
A_To our Investors
FC Bayern München AG (Chairman)
Allianz France S.A.
Membership in Group bodies
Membership in comparable¹ supervisory bodies
Employee of Allianz LA.R.D. S.A.
Sophie Boissard
SE administrative boards in Germany
Korian Deutschland GmbH (Clariane Group Company)
Korian Management AG (Clariane Group Company, Chairwoman)
Membership in comparable¹ supervisory bodies
Korian Belgium (Clariane Group Company)
Segesta SpA (Clariane Group Company)
Christine Bosse
Member of various Supervisory Boards
Membership in comparable¹ supervisory bodies
Coop Amba
SE administrative boards in Germany
until 28 April 2023
since 25 April 2023
Rashmy Chatterjee
Chief Executive Officer ISTARI Global Ltd.
Membership in comparable¹ supervisory bodies
BlueVoyant LLC, USA (ISTARI Portfolio company)
Ensign InfoSecurity Pte. Ltd., Singapore (ISTARI Portfolio company)
Sygnia, Inc., Israel (ISTARI Group company)
ISTARI Global (Singapore) Pte. Ltd. (ISTARI Group company)
ISTARI International (UK) Ltd. (ISTARI Group company)
ISTARI International (US) LLC (ISTARI Group company)
Dr. Friedrich Eichiner
Member of various Supervisory Boards
Membership in other statutory supervisory boards and
SE administrative boards in Germany
Festo Management SE (Chairman)
Infineon Technologies AG
Jean-Claude Le Goaër
DNB ASA
The Board of Management is responsible for setting business
objectives and the strategic direction, for coordinating and supervising
the operating entities, and for implementing and overseeing an
appropriate and effective control and risk management system. The
Board of Management also prepares the annual financial statements of
Allianz SE, the consolidated financial statements of the Allianz Group,
the respective solvency statements, and the interim reports.
Membership in other statutory supervisory boards and
Vice Chairman
On the basis of its own reviews of the annual and consolidated
financial statements, the management and Group management
reports, and the recommendation for the appropriation of earnings,
the Supervisory Board has not raised any objections and agreed with
the results of PwC's audit. It approved the annual and consolidated
financial statements prepared by the Board of Management. The
financial statements have thus been formally adopted. The
Supervisory Board agrees with the Board of Management's proposal
on the appropriation of earnings.
A_To our Investors
managerial or operational experience.
Membership in other statutory supervisory boards and
MANDATES OF THE MEMBERS OF THE BOARD OF MANAGEMENT
Oliver Bäte
Chairman of the Board of Management
Membership in comparable¹ supervisory bodies
Coalition, Inc.
since 28 November 2023
Sirma Boshnakova
Insurance Western & Southern Europe, Allianz Direct, Allianz Partners
Membership in comparable¹ supervisory bodies
Membership in Group bodies
Allianz Holding France SAS
Allianz Sigorta A.S.
since 7 March 2023
Allianz Yasam ve Emeklilik A.S.
since 7 March 2023
Claire-Marie Coste-Lepoutre
The Supervisory Board would like to express its special thanks to all
Allianz Group employees for their great personal commitment over the
past financial year.
Members of the Supervisory Board and Board of
Management
There were no changes in the composition of the Supervisory Board in
the financial year 2023.
With effect from 1 January 2024, Claire-Marie Coste-Lepoutre was
appointed as a member of the Board of Management. She succeeds
Giulio Terzariol, who resigned from office as of 31 December 2023.
Herbert Hainer
SE administrative boards in Germany
Allianz Versicherungs-AG
Chairwoman of the Group Works Council of Allianz SE
Membership in other statutory supervisory boards and
Vice Chairwoman
Gabriele Burkhardt-Berg
Fresenius SE & Co. KGaA
Fresenius Management SE
SE administrative boards in Germany
Membership in other statutory supervisory boards and
Member of various Supervisory Boards
Member of various Supervisory Boards
Michael Diekmann
MANDATES OF THE MEMBERS OF THE SUPERVISORY BOARD
A_To our Investors
Annual Report 2023 - Allianz Group
9
Michael Diekmann
Chairman
M. Mien
For the Supervisory Board:
Munich, 6 March 2024
Chairman
Composition and operations of the Board of
Management
Chairwoman of the Board of Management of Clariane SE
The members of the Board of Management are jointly
responsible for the management of the company and compliance with
legal requirements. Notwithstanding this overall responsibility, the
individual members independently head the departments assigned to
them. They consult with the Chairperson of the Board of Management
on important issues. The Chairperson of the Board of Management is
also responsible for coordinating the departments.
1. Profile of skills and expertise for the entire Supervisory Board
II. Requirements for the entire Supervisory Board
Former Allianz SE Management Board members are subject to the mandatory corporate law cooling-off period of two years.
According to regulatory provisions, no more than two former Allianz SE Management Board members shall be members of
the Supervisory Board.
7. Former Allianz SE Management Board members
The continuous period of membership for any member of the Supervisory Board should, as a rule, not exceed 12 years.
6. Term of membership
The members of the Supervisory Board shall, as a rule, not be older than 70 years of age.
5. Retirement age
- attendance of extraordinary meetings of the Supervisory Board or of a Committee might be required to deal with special
matters.
The following requirements and objectives apply to the composition of Allianz SE's Supervisory Board:
Employee representation within Allianz SE, according to the Agreement concerning the Participation of Employees in Allianz SE,
contributes to the diversity of work experience and cultural background. Pursuant to the provisions of the German SE
Participation Act (SEBG), the number of women and men appointed as German employee representatives should be
proportional to the number of women and men working in the German companies. However, the Supervisory Board does not
have the right to select the employee representatives.
depending on possible membership in one or more of the Supervisory Board Committees, extra time planning is required
for participation in these Committee meetings and to do the necessary preparation for these meetings; this applies in
particular for the Audit and Risk Committee,
sufficient time must be set aside for the audit of the annual and consolidated financial statements,
- at least four, but as a rule six, ordinary Supervisory Board meetings are held each year, each of which requires adequate
preparation,
With regard to the Allianz SE mandate, the members shall take into account that:
In addition to the mandatory mandate limitations and the GCGC recommendation for active Management Board members of
listed companies (max. two mandates), the common capital markets requirements shall be considered.
Each member of the Supervisory Board must ensure that he/she has sufficient time to dedicate to the proper fulfillment of the
mandate of this Supervisory Board position.
4. Time of availability
Members of the Supervisory Board of Allianz SE in office for more than 12 years shall not be deemed independent.
- Regarding employee representatives, the mere fact of employee representation and the existence of a working
relationship with the company shall not itself affect the independence of the employee representatives.
Applying such definition, at least eight members of the Supervisory Board shall be independent. In case shareholder
representatives and employee representatives are viewed separately, at least four of each should be independent.
It has to be considered that the possible emergence of conflicts of interests in individual cases cannot generally be excluded.
Potential conflicts of interest must be disclosed to the Chairperson of the Supervisory Board and will be resolved by
appropriate measures.
In addition to the expertise-related requirements for the individual members, the following shall apply with respect to the
expertise and experience of the entire Supervisory Board:
- familiarity of members in their entirety with the insurance and financial services sector,
-
5 members
at least one member with comprehensive expertise in the field of digital transformation,
- Monitoring of the effectiveness of the
risk management system.
- Initial review of the Risk Report and
other risk-related statements in the
annual financial statements and
consolidated financial statements as
well as management reports, informing
the Audit Committee of the results of
such reviews.
Supervisory Board committees
Personnel Committee
3 members
- Chairperson: Chairperson of the
Supervisory Board
(Michael Diekmann)
- One further shareholder
representative
(Herbert Hainer)
The Supervisory Board of Allianz SE states the following with regard to the further specification of independence:
- Former members of the Allianz SE Management Board shall not be deemed independent
during the mandatory corporate law cooling-off period.
- One employee representative
(Gabriele Burkhardt-Berg)
3 members
- Chairperson: Chairperson of the
Supervisory Board
(Michael Diekmann)
- Two further shareholder
representatives (Christine Bosse,
Dr. Friedrich Eichiner)
Technology Committee
- at least one member with comprehensive expertise in the field of accounting and at least one other member with
comprehensive expertise in the field of auditing. The expertise in the field of accounting shall consist of special knowledge
and experience in the application of accounting principles and internal control and risk management systems, and the
expertise in the field of auditing shall consist of special knowledge and experience in the auditing of financial statements.
Accounting and auditing also include sustainability reporting and its audit and assurance,
- at least one member with considerable experience in the insurance and financial services fields,
adequate expertise of the entire Board with respect to technology, including cybersecurity, employee engagement and
sustainability (especially Environment, Social responsibility and Governance as well as data privacy),
adequate expertise of the entire Board with respect to regulatorily required areas of investment management, insurance
actuarial practice, accounting,
Nomination Committee
- Monitoring of the general risk situation
and special risk developments in the
Allianz Group.
The GCGC defines a person as independent who, in particular, does not have any business or personal relations with
Allianz SE or its executive bodies, a controlling shareholder, or an enterprise associated with the latter, which may cause a
substantial and not merely temporary conflict of interest.
- knowledge of accounting basics and insurance specific risk management basics.
- Setting of concrete objectives for the
composition of the Supervisory Board.
- Establishment of selection criteria for
shareholder representatives on the
Supervisory Board in compliance with
the Code's recommendations on the
composition of the Supervisory Board.
- Selection of suitable candidates for
election to the Supervisory Board as
shareholder representatives.
- Long-term succession planning for the
Board of Management.
-Approval of the assumption of other
mandates by Board of Management
members.
of contracts with Board of Management
members unless reserved for the
plenary session.
- Conclusion, amendment, and termination
- Preparation of the Remuneration Report.
- Preparation of plenary session
resolutions on the compensation system
and resolutions on setting of the total
compensation of Board of
Management members.
- Preparation of the appointment of
Board of Management members.
Responsibilities
As of 31 December 2023
- Two employee representatives
(Gabriele Burkhardt-Berg,
Frank Kirsch)
- Three shareholder representatives
(in addition to Christine Bosse:
Sophie Boissard, Michael
Diekmann)
(Christine Bosse)
- Chairperson: appointed by the
Supervisory Board
5 members
- Two employee representatives
(Gabriele Burkhardt-Berg,
Jürgen Lawrenz)
Sustainability Committee
- Three shareholder representatives
(in addition to Rashmy
Chatterjee: Michael Diekmann,
Dr. Friedrich Eichiner)
(Rashmy Chatterjee)
The Board of Management of Allianz SE currently has nine members.
As a general rule, its members may not be older than 62. Further
information on the members of the Board of Management can be
found in Mandates of the Members of the Board of Management. The
composition is also available on the Allianz company website, which
also provides the CVs of the members of the Board of Management.
- Chairperson: appointed by the
Supervisory Board
- Regular exchange regarding
technological developments.
- In-depth monitoring of the Board of
Management's technology and
innovation strategy.
- Support of the Supervisory Board in the
oversight of the implementation of the
Board of Management's technology
and innovation strategy.
- Regular exchange regarding
sustainability-related issues
(Environment, Social, Governance -
ESG).
- ability to assess the business risks,
- adequate expertise in the insurance and finance sector or comparable relevant experience and expertise in other sectors,
- adequate expertise in the regulatory provisions material for Allianz SE (supervisory law,
including Solvency II regulation, corporate and capital markets law, corporate governance),
The members of the Supervisory Board must have the expertise and experience necessary for a diligent and autonomous
exercise of the Allianz SE Supervisory Board mandate, in particular for exercising control of and giving advice to the
Management Board as well as for the active support of the development of the company. This comprises in particular:
- adequate expertise in all business areas,
2. Fitness
The members of the Supervisory Board must be proper as defined by the regulatory provisions. A person is assumed to be
proper as long as no facts are to be known which may cause impropriety. Therefore, no personal circumstances shall exist
which - according to general experience - lead to the assumption that the diligent and orderly exercise of the mandate may
be affected (in particular, administrative offenses or violation of criminal law, especially in connection with commercial
activity).
1. Propriety
I. Requirements relating to the individual members of the Supervisory Board
"The aim of Allianz SE's Supervisory Board is to have members who are equipped with the necessary skills and competence to
properly supervise and advise Allianz SE's management. Supervisory Board candidates should possess the professional
expertise and experience, integrity, motivation and commitment, independence, and personality required to successfully carry
out the responsibilities of a Supervisory Board member in a financial services institution with international operations.
These objectives take into account the regulatory requirements for the composition of the Supervisory Board as well as the
relevant recommendations of the German Corporate Governance Code ("GCGC"). In addition to the requirements for each
individual member, a profile of skills and expertise ("Kompetenzprofil") as well as a diversity concept are provided for the entire
Supervisory Board.
Objectives for the composition of Allianz SE's Supervisory Board
3. Independence
B_Corporate Governance
The objectives for the composition of the Supervisory Board (in the
version of September 2022), as specified to implement legal
requirements and the recommendation of the Code, are set out below.
In addition to the skills profile for the overall Supervisory Board to be
drawn up under the Code, the diversity concept is also included. The
objectives for the composition of the Supervisory Board can be found
on the Allianz company website.
Objectives of the Supervisory Board regarding its
composition - diversity concept
B_Corporate Governance
17
Annual Report 2023 - Allianz Group
16
- Support of the Personnel Committee of
the Supervisory Board in the
preparation of the ESG-related target
setting as well as the assessment of the
fulfillment of the set targets for the
Board of Management's remuneration.
- Support of the Supervisory Board in the
oversight of the execution of the Board
of Management's sustainability strategy.
- Close monitoring of the Board of
Management's sustainability strategy.
Annual Report 2023 - Allianz Group
independence of the auditor, the quality
of the audit procedures and the services
additionally rendered by the auditor,
awarding of the audit contract, and
determining the audit areas of focus.
- Discussion to evaluate the audit risk,
audit strategy, and audit planning.
- participation in the General Meeting is required,
- Monitoring of the financial reporting
process, the effectiveness of the internal
control and risk management system,
internal audit system, and legal and
compliance issues.
In the financial year 2023, the following Group committees were
in place:
Group committees
Group committees
Group Compensation Committee
Board members of Allianz SE and
executives below Allianz SE Board
level.
Group Investment Committee
Board members of Allianz SE and
Allianz Group executives.
As of 31 December 2023
Responsibilities
Designing, monitoring, and improving
group-wide compensation systems in
line with regulatory requirements and
submitting an annual report on the
monitoring results, along with
proposals for improvement.
Specifying the strategic asset
allocation for the Group to enable
consistent implementation by the
operating entities, particularly in
relation to alternative assets;
monitoring performance across all
asset classes, and ensuring consistent
organization of the Investment
Management function and Investment
Governance across the Group.
Defining requirements for sustainable
investments and providing guidance
on the implementation of
sustainability aspects in proprietary
investments.
14
14
Annual Report 2023 - Allianz Group
B_Corporate Governance
Diversity concept for the Board of Management
and succession planning
The Supervisory Board has adopted the following diversity concept for
the Board of Management of Allianz SE:
For the composition of the Management Board, the Supervisory Board
aims for an adequate "Diversity of Minds". This comprises broad
diversity with regard to gender, internationality, and educational as
well as professional background.
The Supervisory Board assesses the achievement of such target, inter
alia, on the basis of the following specific indicators:
adequate proportion of women on the Management Board;
adequate share of members with an international background
(e.g., based on origin or extensive professional experience
abroad), ideally with connection to the regions in which the
Allianz Group is operating;
adequate diversity with regard to educational and professional
background, taking into account the limitations for the Supervisory
Board by regulatory requirements (fitness).
This diversity concept is implemented via the appointment procedure
for members of the Board of Management by the Supervisory Board.
For the purpose of long-term succession planning, a list of candidates
is prepared and updated on an ongoing basis by the Chairperson of
the Board of Management in consultation with the Chairperson of the
Supervisory Board. It is ensured that lists of successors will comprise
appropriate percentages of candidates with international experience.
This is especially taken into account by the Personnel Committee in
succession planning. The list of candidates includes internal and
external candidates generally meeting the requirements for a
mandate in the Board of Management. In the event of a vacancy on
the Board of Management, the Personnel Committee, after a
thorough examination, recommends a suitable candidate to the
Supervisory Board plenary session. It also reports on the selection
process and, if necessary, alternative candidates. Prior to an
appointment to the Board of Management, all members of the
Supervisory Board are given the opportunity to meet the candidate in
person.
In addition to Board of Management committees, there are also Group
committees. They, too, are responsible for coordinating and deciding
on matters of the Board of Management referred to them, for
preparing decisions for the Board of Management of Allianz SE,
reserved to it, and submitting proposals for resolutions. They are also
responsible for ensuring a smooth flow of information within the
Group.
Managing and overseeing Group
M&A transactions, including approval
of individual transactions within
certain thresholds.
Developing and proposing a group-
wide IT strategy, monitoring its
implementation, and approving local
and group-wide IT investments as well
as reviewing and overseeing
individual IT projects.
Preparing the capital and liquidity
planning for the Group and Allianz SE;
implementing and overseeing the
principles of group-wide capital and
liquidity management; defining risk
standards and preparing the risk
strategy; approving key financial
transactions and pension-related
transactions; preparing guidelines for
derivatives, Group financing and
internal Group capital management
as well as establishing and overseeing
a group-wide risk management and
risk monitoring system.
Annual Report 2023 - Allianz Group
B_Corporate Governance
Divisional responsibilities for business segments and/or functional
responsibilities are assigned to the individual departments. The
latter include, inter alia, Finance, Risk Management and Controlling
Functions, Investments, Operations and IT, Human Resources, Legal,
Compliance, Internal Audit, and Mergers & Acquisitions. Business
division responsibilities focus on geographical regions or global lines.
Rules of procedure specify the inner organization of the Board of
Management as well as the departmental responsibilities.
The meetings of the Board of Management are convened and
chaired by the Chairperson. In addition, any member of the Board may
request a meeting, stating the proposed subject of discussion. As a rule,
a meeting of the Board of Management was held every two weeks in
the financial year 2023.
The Board of Management has a quorum if all members of the
Board of Management have been invited to a meeting and at least
half its members - including the Chairperson or a member of the
Board of Management appointed by him – attend the meeting. Unless
otherwise stipulated by law, the full Board of Management takes
decisions with a simple majority of participating members. In the event
of a tie, the Chairperson of the Board of Management has the
deciding vote. The Chairperson can also veto decisions, but he cannot
enforce a decision against the majority vote of the Board of
Management.
Composition and operations of the Board of
Management committees and the Group
committees
The Board of Management has formed committees from among its
members. The task of these committees is to coordinate and decide on
matters of the Board of Management referred to them, to prepare
decisions for the Board of Management reserved to it, and to submit
proposals for resolutions. The committees advise the full Board of
Management. The responsibilities and composition of the committees
are defined in the respective rules of procedure.
- Monitoring of the audit procedures,
including the selection and
Board committees
Currently, the Board of Management of Allianz SE comprises four
female members, accounting for 44.4%. Four members of the Board
of Management have international backgrounds based on their
Board committees
Group IT Committee
Dr. Barbara Karuth-Zelle
(Chairwoman),
Sirma Boshnakova,
Dr. Klaus-Peter Röhler,
Giulio Terzariol,
Dr. Günther Thallinger,
Christopher Townsend.
Group Mergers
and Acquisitions Committee
Renate Wagner (Chairwoman),
Oliver Bäte,
Giulio Terzariol,
Dr. Andreas Wimmer.
As of 31 December 2023
Responsibilities
Group Finance and Risk Committee
Giulio Terzariol (Chairman),
Dr. Klaus-Peter Röhler,
Dr. Günther Thallinger,
Christopher Townsend,
Dr. Andreas Wimmer.
15
In the financial year 2023, the following Board of Management
committees were in place:
Remuneration of the Board of Management
- Two further shareholder
representatives (Herbert Hainer,
Sophie Boissard)
- Two employee representatives
(Jürgen Lawrenz, Jean-Claude
Le Goaër)
Audit Committee
5 members
- Chairperson: appointed by the
Supervisory Board
(Dr. Friedrich Eichiner)
- Three shareholder representatives
(in addition to Dr. Friedrich
Eichiner: Sophie Boissard,
Michael Diekmann)
- Two employee representatives
(Jean-Claude Le Goaër, Martina
Grundler)
Risk Committee
- Chairperson: Chairperson of the
Supervisory Board
(Michael Diekmann)
5 members
(Michael Diekmann)
- Three shareholder representatives
(in addition to Michael
Diekmann: Christine Bosse,
Dr. Friedrich Eichiner)
- Two employee representatives
(Primiano Di Paolo, Frank Kirsch)
-Approval of certain transactions which
require the approval of the Supervisory
Board, e.g., capital measures,
acquisitions, and disposals of
participations.
- Preparation of the Declaration of
Conformity pursuant to § 161 of the
German Stock Corporation Act and
review of corporate governance.
origin. There is an adequate degree of diversity with regard to
educational and professional backgrounds. The Board of
Management of Allianz SE is thus composed in accordance with the
diversity concept.
- Preparation of the self-assessment of
the Supervisory Board.
- Initial review of the annual financial
statements of Allianz SE and the
Allianz Group, the Management
Reports (including Non-financial
Statement and Risk Report) and the
proposal for the appropriation of net
earnings, review of half-yearly reports
and, where applicable, quarterly
financial reports or statements.
- Chairperson: appointed by the
Supervisory Board
5 members
Responsibilities
Supervisory Board committees
In addition, the Board of Management and Supervisory Board
must prepare a clear and comprehensible annual report on the
remuneration of current and former Board members, which must be
submitted to the General Meeting for approval each year.
Supervisory Board committees
Standing Committee
The Supervisory Board of Allianz SE has adopted a clear and
comprehensible system for the remuneration of the members of the
Board of Management. The Board of Management remuneration
system must be submitted to the General Meeting for approval
whenever a material amendment is planned to be effected, but at
least every four years. The most recent submission of the remuneration
system for the Board of Management of Allianz SE to the General
Meeting for approval was on 5 May 2021.
The Board of Management reports regularly and comprehensively to
the Supervisory Board on business development, the company's net
assets, financial position and earnings, planning and achievement of
objectives, business strategy, and risk exposure. Details on the Board
of Management's reporting to the Supervisory Board are laid down in
the information rules issued by the Supervisory Board.
Important decisions of the Board of Management require
approval by the Supervisory Board. Approval requirements are
stipulated by law, by the Statutes, or in individual cases by decisions of
the General Meeting. Supervisory Board approval is required, for
example, for certain capital measures, intercompany agreements, and
the launch of new business segments or the closure of existing ones.
Approval is also required for acquisitions of companies and holdings
in companies as well as for divestments of Group companies that
exceed certain thresholds. Moreover, the Agreement concerning the
Participation of Employees in Allianz SE in the version dated June 2021
(hereinafter "SE Agreement") requires the approval of the Supervisory
Board for the appointment of the member of the Board of
Management responsible for labor and social affairs.
Supervisory Board
The Supervisory Board oversees and advises the Board of
Management on managing the business. It is also responsible for
appointing the members of the Board of Management, determining
their overall remuneration, succession planning for the Board of
Management, and reviewing Allianz SE's and the Allianz Group's
annual financial statements. The Supervisory Board's activities in the
financial year 2023, including an individualized disclosure of the
meeting participation, are described in the Supervisory Board Report.
Composition and operations of the Supervisory
Board
The German Co-Determination Act ("Mitbestimmungsgesetz") does
not apply to Allianz SE because it has the legal form of a European
Company (SE). Instead, the size and composition of the Supervisory
Board is determined by general European SE regulations. These
regulations are implemented in the Statutes and via the
SE Agreement.
Cooperation with the Supervisory Board
The composition of the Supervisory Board is presented in the
Supervisory Board Report. Further information on the Supervisory
Board members is presented in Mandates of the Members of the
Board of Management. Furthermore, the composition and a general
description of the operations of the Supervisory Board are available
on the Allianz company website, which also provides the CVs of the
Supervisory Board members.
Part of the Supervisory Board's work is carried out by its committees.
The Supervisory Board receives regular reports on the activities of its
committees. The composition of committees and the tasks assigned to
them are governed by the Supervisory Board's Rules of Procedure,
which can be found on the Allianz company website.
Composition and operations of the Supervisory
Board committees
recommendations for improvements and adopts
appropriate measures on the basis of recommendations from the
Standing Committee. In addition, the fitness and propriety of the
individual members of the Supervisory Board are reviewed as part of
an annual self-evaluation required by supervisory law, and a
development plan for the Supervisory Board is drawn up on this basis.
The Supervisory Board and the Audit Committee also hold regular
sessions that are not attended by any of the members of the Board of
Management.
The Supervisory Board comprises twelve members, including six
shareholder representatives appointed by the General Meeting. The
six employee representatives are appointed by the SE Works Council.
The specific procedure for their appointment is laid down in the SE
Agreement, which stipulates that the six employee representatives
must be allocated in proportion to the number of Allianz employees
in the different countries. The Supervisory Board currently in office
includes four employee representatives from Germany - including
one trade union representative - and one each from France and Italy.
According to §17 (2) SEAG, the Supervisory Board of Allianz SE shall
comprise at least 30% women and at least 30% men. The regular term
of appointment for the members of the Supervisory Board of
Allianz SE is four years. Moreover, a staggered board with different
appointment periods was introduced with the elections to the
Supervisory Board on 4 May 2022.
The Supervisory Board regularly reviews the efficiency of its
activities and the activities of its committees in the framework of a
so-called self-assessment. The self-assessment is carried out either
by means of an internal questionnaire or by consulting an external
consultant. In 2023, the self-assessment was carried out using an
internal questionnaire. The Supervisory Board plenary session
discusses
The current remuneration system for the Board of Management
and the Remuneration Report, including the auditor's report, are
available on the Allianz company website.
The Supervisory Board takes all decisions with a simple majority.
The special requirements for appointing members to the Board of
Management, as stipulated in the German Co-Determination Act, and
the requirement to have a Conciliation Committee, do not apply to an
SE. In the event of a tie, the casting vote lies with the Chairperson of
the Supervisory Board, who - at Allianz SE - must be a shareholder
representative. If there is a tie and the Chairperson is not present, the
casting vote lies with the vice chairperson elected at the shareholder
representatives' proposal. A second vice chairperson is elected at the
employee representatives' proposal.
Annual Report 2023 - Allianz Group
B_Corporate Governance
1,058
41
(2)
1,097
(1)
123
(8)
123
(1)
(4)
(1)
(1)
123
(8)
122
4
41
19
Total
(1)
Present value of
future cash flows
Risk adjustment
CSM
Total
840
34
19
893
1,058
(2)
1,097
(19)
(19)
822
34
875
(2)
47
3
2
(26)
(1)
2
6
7
(124)
3
8
23
(71)
37
56
(142)
(4)
CSM
47
52
(71)
(124)
(5)
2
3
(8)
2
5
2
(1)
(10)
2
9
(65)
(14)
(79)
(143)
(6)
6
(1)
Risk adjustment
(17)
2022
Receivables and payables (net)
2,274
2,274
323
323
(3,003)
(3,003)
(4,294)
(4,294)
1,118
1,118
1,143
66
16,052
15,450
(150)
Loss
recovery
component
(150)
113
thereof effect of changes in the risk of reinsurers' non-performance
Foreign currency translation adjustments
(2,182)
70
(263)
(1,989)
123
75
24
24
Finance income and expenses from reinsurance contracts (net)
502
502
(2,978)
(2,978)
Subtotal
113
component
adjustment
flows
160
Asset for incurred claims
Asset for remaining
coverage
(3,271)
Allocation of reinsurance premiums
14,579
Net reinsurance contract assets as of 1 January
(305)
14,884
Reinsurance contract liabilities as of 1 January
Reinsurance contract assets as of 1 January
2023
€ mn
Analysis by remaining coverage and incurred claims - Life/Health
6.7.3 Analysis by remaining coverage and incurred claims - Life/Health
D_Consolidated Financial Statements
Total
Asset for remaining
coverage
Contracts
not
406
recovery
Risk
future cash
loss
value of
Loss
1
Excluding
recovery
component
loss
Excluding
component
recovery
Contracts measured under
the PAA
measured
under the
PAA
Present
1
3
3
Change in risk adjustment
CSM recognized for the services provided
Net reinsurance contract assets as of 1 January
Changes that relate to current service
Reinsurance contract assets as of 1 January
Reinsurance contract liabilities as of 1 January
€ mn
Analysis by measurement component - contracts not measured under the PAA - Property-Casualty
6.7.5 Analysis by measurement component - contracts not measured under the PAA - Property-Casualty
D_Consolidated Financial Statements
Annual Report 2023 - Allianz Group
191
(257)
(257)
(125)
(125)
15,551
Experience adjustments
Subtotal
Changes that relate to future service
Changes in estimates that adjust CSM
2023
192
Net reinsurance contract assets as of 31 December
Reinsurance contract assets as of 31 December
Reinsurance contract liabilities as of 31 December
Changes in the consolidated subsidiaries of the Allianz Group
Reclassification into assets of disposal groups classified as held for sale
Other changes
thereof effect of changes in the risk of reinsurers' non-performance
Foreign currency translation adjustments
Finance income and expenses from reinsurance contracts (net)
Subtotal
1,976
Receivables and payables (net)
Amounts received
Premiums paid
Cash flows in the period
Changes in the asset for incurred claims
Changes that relate to past service
Subtotal
Changes in estimates that do not adjust CSM (loss recovery component)
Effects of contracts initially recognized in the period
Deposits
Present value of
future cash flows
1,302
14,003
1
Reclassification into assets of disposal groups classified as held for sale
Other changes
(3)
(3)
2
2
Changes in the consolidated subsidiaries of the Allianz Group
850
10
119
721
(511)
(54)
(32)
(425)
1
(18)
(2)
12
1,922
936
11,145
15,294
1,976
1,302
12,017
12,274
13,878
936
11,020
Net reinsurance contract assets as of 31 December
Reinsurance contract assets as of 31 December
Reinsurance contract liabilities as of 31 December
(129)
65
(177)
(8)
1,922
2022
Changes in the asset for incurred claims
2
(53)
(483)
650
117
10
776
Changes in the consolidated subsidiaries of the Allianz Group
(3)
(3)
Reclassification into assets of disposal groups classified as held for sale
1
1
Other changes
(18)
(2)
12
(9)
(136)
(17)
52
(100)
Net reinsurance contract assets as of 31 December
Reinsurance contract assets as of 31 December
Reinsurance contract liabilities as of 31 December
10,211
913
1,897
13,020
11,184
1,268
1,950
(31)
(399)
thereof effect of changes in the risk of reinsurers' non-performance
Foreign currency translation adjustments
454
(2,036)
Deposits
1,196
1,196
1,128
1,128
(4,182)
(4,182)
(3,034)
(3,034)
313
313
2,274
2,274
Receivables and payables (net)
14,403
(170)
87
87
Subtotal
(2,842)
(2,842)
454
Finance income and expenses from reinsurance contracts (net)
(29)
20
75
66
(1,847)
(259)
70
(170)
Amounts received
10,316
1,897
(14)
(40)
Foreign currency translation adjustments
9
9
Changes in the consolidated subsidiaries of the Allianz Group
Other changes
Balance as of 31 December 2022
6
6
1,258
36
1,294
Balance as of 1 January 2023
1,258
36
1,294
Cash flows recognized as an asset during the year
3,975
5
3,980
Amounts derecognized on initial recognition of groups of insurance contracts
(3,844)
(3,845)
Impairment losses recognized during the year
(4)
(4)
Foreign currency translation adjustments
6
(3,659)
(1)
འ€
(26)
13,125
11,423
1,268
1,950
14,641
(105)
(105)
(239)
(239)
193
Annual Report 2023 - Allianz Group
D_Consolidated Financial Statements
6.8 Assets for insurance acquisition cash flows
Assets for insurance acquisition cash flows
913
€ mn
Casualty
Life/Health Consolidation
Group
Balance as of 1 January 2022
1,215
8
1,222
Cash flows recognized as an asset during the year
3,713
43
3,756
Amounts derecognized on initial recognition of groups of insurance contracts
(3,658)
Impairment losses recognized during the year
Property-
2
Premiums paid
44
(20)
(20)
(19)
(19)
Annual Report 2023 - Allianz Group
D_Consolidated Financial Statements
6.7.6 Analysis by measurement component - contracts not measured under the PAA - Life/Health
Analysis by measurement component - contracts not measured under the PAA - Life/Health
€ mn
2023
2022
Present value of
future cash flows
Risk adjustment
CSM
Total
Present value of
future cash flows
Risk adjustment
CSM
Total
Reinsurance contract assets as of 1 January
Reinsurance contract liabilities as of 1 January
Net reinsurance contract assets as of 1 January
Changes that relate to current service
CSM recognized for the services provided
Change in risk adjustment
Experience adjustments
Subtotal
11,423
1,268
1,950
14,641
12,518
893
19
34
840
(27)
71
2
2
(1)
(8)
(9)
(149)
7
8
23
37
(146)
2
1,679
73
13
(29)
838
23
18
879
822
34
19
875
857
23
18
899
(41)
Cash flows in the period
1,569
(239)
(55)
(70)
(124)
203
9
Changes in estimates that do not adjust CSM (loss recovery component)
Effects of contracts initially recognized in the period
(153)
3
150
(415)
25
391
1
Subtotal
135
(230)
95
(485)
(99)
594
10
Changes that relate to past service
Annual Report 2023 - Allianz Group
29
38
62
52
(8)
(234)
288
Changes in estimates that adjust CSM
Changes that relate to future service
(239)
11,184
1,268
1,950
14,403
(55)
12,463
(55)
1,679
1,569
15,710
(182)
(182)
(345)
(345)
15,766
(121)
(145)
(145)
2,150
2,150
36
36
2,150
(121)
(182)
1,847
36
(145)
(345)
(454)
(121)
189
adjustment
(19)
406
160
15,450
Reinsurance contract liabilities as of 31 December
(135)
30
(105)
(305)
66
(239)
190
Annual Report 2023 - Allianz Group
D_Consolidated Financial Statements
6.7.4 Analysis by measurement component - contracts not measured under the PAA - Allianz Group
Analysis by measurement component - contracts not measured under the PAA - Allianz Group
€ mn
2023
2022
Reinsurance contract assets as of 1 January
Reinsurance contract liabilities as of 1 January
Net reinsurance contract assets as of 1 January
Changes that relate to current service
CSM recognized for the services provided
Change in risk adjustment
Experience adjustments
Subtotal
Present value of
future cash flows
Risk adjustment
CSM
14,884
Total
13,915
502
(2)
(5)
(10)
20
13
2
35
Other changes
(78)
(36)
(5)
(119)
(305)
62
(5)
(249)
Net reinsurance contract liabilities as of 31 December
13,047
532
230
13,810
14,579
472
160
15,211
Reinsurance contract assets as of 31 December
13,182
230
Present value of
future cash flows
Risk adjustment
CSM
2,295
(122)
(173)
2,000
19
(146)
(340)
(467)
Changes that relate to future service
Changes in estimates that adjust CSM
295
(231)
(64)
(71)
(125)
206
9
Changes in estimates that do not adjust CSM (loss recovery component)
Effects of contracts initially recognized in the period
(155)
5
150
(430)
26
Subtotal
139
(226)
19
19
2,295
2,295
Total
12,274
1,302
1,976
15,551
13,591
1,720
1,561
16,871
(257)
(257)
12,017
1,302
(2)
1,976
(55)
13,535
(55)
1,720
1,561
16,816
(173)
(173)
(340)
(340)
(122)
(122)
(146)
(146)
15,294
(2)
1
(3)
2,852
37
1,820
Changes in the asset for incurred claims
264
3
268
210
22
222
19
1,877
232
Recoveries and reversals of recoveries of losses on onerous underlying
contracts
Subtotal
(610)
3,548
182
3,120
37
2,030
41
2,109
Investment component
(499)
496
3
179
3,284
(610)
Incurred claims recovered and other expenses recovered
(1)
(76)
472
160
15,211
15,976
(3,271)
(2,499)
Asset for incurred claims
Total
Contracts
not
measured
under the
PAA
(849)
Contracts measured under
Present
value of
387
future cash
flows
149
Risk
adjustment
21
408
149
16,588
(55)
16,533
(2,499)
Amounts recoverable from reinsurers
the PAA
87
847
Cash flows in the period
(3,960)
(108)
(683)
3,399
(2,861)
(29)
509
Finance income and expenses from reinsurance contracts (net)
44
22
66
(2,010)
(25)
(2,036)
thereof effect of changes in the risk of reinsurers' non-performance
Foreign currency translation adjustments
(499)
(5)
(1)
(504)
813
(2)
(1)
811
Changes in the consolidated subsidiaries of the Allianz Group
Reclassification into assets of disposal groups classified as held for sale
(1)
(3)
4
3,385
Subtotal
77
11
Premiums paid, including amounts held in deposits
Amounts received
3,508
3,508
1,238
1,238
(189)
(4,008)
(193)
(4,391)
(154)
(2,885)
(40)
3
(3,080)
315
(2)
314
2,281
(8)
2,274
Receivables and payables (net)
(249)
49
85
(114)
34
32
Deposits
(501)
(99)
405
610
7,284
(53)
(3,651)
3,580
Finance income and expenses from reinsurance contracts (net)
(4)
64
452
thereof effect of changes in the risk of reinsurers' non-performance
Foreign currency translation adjustments
1
(8)
(27)
(161)
Changes in the consolidated subsidiaries of the Allianz Group
(18)
2
43
Reclassification into assets of disposal groups classified as held for sale
40
(10)
(42)
Other changes
(25)
(27)
133
Net reinsurance contract liabilities as of 31 December
(745)
2,760
(3,595)
(37)
6,393
Amounts received
6,445
6,445
7,001
7,001
(91)
(91)
Deposits
105
Receivables and payables (net)
(67)
54
(3,893)
155
142
18
(4,074)
1
(3,323)
(3,534)
261
(61)
136
75
128
556
(54)
(464)
39
Subtotal
(212)
Premiums paid, including amounts held in deposits
857
333
(177)
(717)
10,730
(859)
18
855
9,797
344
10,155
Reinsurance contract assets as of 31 December
(640)
18
875
10,270
333
10,855
(859)
18
874
9,797
344
10,173
Reinsurance contract liabilities as of 31 December
(105)
(18)
(2)
(125)
315
38
10
(904)
ཧྥ 'SE'Sལྷ
15
527
(148)
(705)
(20)
(873)
(7)
3
32
35
(7)
(194)
10,268
74
13
88
28
9
9
(11)
57
45
105
1
207
(7)
74
2
(19)
Cash flows in the period
(161)
Asset for incurred claims
Contracts
not
measured
under the
PAA
Contracts measured under
the PAA
Total
Excluding
loss
Loss
Present
value of
Excluding
loss
recovery
component
recovery
component
future cash
flows
Risk
adjustment
recovery
component
Loss
recovery
component
(859)
18
874
9,797
344
10,173
(1,588)
2022
coverage
Total
Asset for remaining
1
10
Changes that relate to past service
Changes in the asset for incurred claims
(37)
(7)
(45)
(92)
(12)
(104)
Cash flows in the period
Premiums paid
Amounts received
21
Deposits
D_Consolidated Financial Statements
6.7.2 Analysis by remaining coverage and incurred claims - Property-Casualty
Analysis by remaining coverage and incurred claims - Property-Casualty
€ mn
Reinsurance contract assets as of 1 January
Reinsurance contract liabilities as of 1 January
2023
Asset for remaining
coverage
Asset for incurred claims
Contracts
not
measured
under the
PAA
Contracts measured under
the PAA
1,143
161
1,104
future cash
3,141
(6)
589
796
(199)
3,440
12
3,253
Recoveries and reversals of recoveries of losses on onerous underlying
contracts
(13)
(13)
Subtotal
90
36
3,639
(13)
3,752
213
(13)
(205)
4,028
12
4,035
Investment component
(1)
1
(13)
3,086
68
213
Risk
flows
9,533
9,585
(19)
(859)
18
855
9,797
344
(6,360)
(19)
10,155
(6,360)
(1,588)
(5,760)
Present
value of
21
9,533
515
9,585
(5,760)
Net reinsurance contract assets as of 1 January
Allocation of reinsurance premiums
Amounts recoverable from reinsurers
Incurred claims recovered and other expenses recovered
90
Changes in the asset for incurred claims
(32)
553
611
1,104
5
515
(3)
768
71
Subtotal
405
405
150
150
Effects of contracts initially recognized in the period
206
(76)
164
(745)
118
(895)
768
71
Changes in estimates that adjust CSM
Changes that relate to future service
(340)
(43)
(95)
(202)
(173)
(66)
(56)
95
118
164
4
581
(463)
(115)
Other changes
10
11
5
(6)
(54)
1
(53)
(2)
Foreign currency translation adjustments
70
(94)
161
3
75
(4)
76
4
Finance income and expenses from reinsurance contracts held (net)
610
329
(86)
(21)
CSM recognized for services provided
1,561
14,130
32,572
53,818
10,411
12,594
30,814
CSM as of 31 December
52
(436)
24
464
(634)
(289)
(313)
(32)
Other changes
694
(134)
672
156
(361)
(108)
(350)
97
Foreign currency translation adjustments
6,680
152
53,382
Annual Report 2023 - Allianz Group
56
Total
under the full
retrospective
transition approach
Contracts measured
under the fair value
transition approach
1,430
75
1,976
59
1,777
140
Changes that relate to current service
CSM as of 1 January
under the modified
retrospective
transition approach
Contracts measured
Total
under the full
retrospective
transition approach
Contracts measured
under the fair value
transition approach
retrospective
transition approach
Contracts measured
under the modified
New contracts and
contracts measured
2022
New contracts and
contracts measured
2023
CSM by transition method - Allianz Group
€ mn
6.11.2 Reinsurance contracts
D_Consolidated Financial Statements
196
112
CSM as of 31 December
77
20
(3,059)
(2,357)
(702)
625
445
180
Gains or losses recognized in other comprehensive income in the period
Amounts recognized in profit or loss and reassignment during the period
Related income tax
1,609
1,340
Total
Life/Health
Property-
Casualty
270
(863)
(541)
(322)
Balance as of 1 January
Total
Life/Health
Property-
Casualty
2022
2023
€ mn
Reconciliation for contracts without direct participation features
(39,683)
(14)
(39,524)
6
(53)
Changes in the consolidated subsidiaries of the Allianz Group
(239)
Annual Report 2023 - Allianz Group
198
(863)
(541)
(322)
(357)
(213)
(144)
Balance as of 31 December
4
(1)
5
11
(1)
12
Foreign currency translation adjustments
691
530
161
(136)
(102)
(34)
(109)
(55)
544
(159)
(22,658)
(159)
Balance as of 1 January
Total
Life/Health
Property-
Casualty
Total
Life/Health
Property-
Casualty
2022
2023
€ mn
Reconciliation for contracts with direct participation features
On transition to IFRS 17, the Allianz Group determined the cumulative
insurance finance income and expenses recognized in OCI using the
modified retrospective or the fair value transition approach for certain
groups of insurance contracts. Please refer to note 2 for further details.
The movement in the fair value reserve for financial assets
measured at fair value through OCI that are related to those groups of
contracts is presented below:
6.12 _ Reconciliation of amounts
included in OCI for financial assets
measured at fair value through OCI
D_Consolidated Financial Statements
Annual Report 2023 - Allianz Group
197
1,976
65
(199)
59
1,777
140
1,922
(174)
2,019
Gains or losses recognized in other comprehensive income in the period
Amounts recognized in profit or loss and reassignment during the period
Related income tax
(22,773)
62
223
(115)
Balance as of 31 December
66
66
(9)
(9)
Foreign currency translation adjustments
29,588
29,428
160
(6,800)
(6,782)
(18)
(8,054)
(8,033)
(21)
7,929
7,929
(0)
(96,000)
(95,479)
(521)
15,790
34,717
34,494
(39,683)
32
(39,524)
15,728
26
Subtotal
52,596
Claims and other insurance expenses payable
Insurance acquisition cash flows
2022
2023
Present value of future cash outflows
€ mn
Insurance contracts initially recognized in the period - Allianz Group
6.9.1 Insurance contracts initially recognized in the
period
No material groups of onerous contracts which are not measured
under the PAA were initially recognized in the periods ended
31 December 2023 and 2022, nor were material groups of contracts
not measured under the PAA were acquired.
The effects on the measurement components arising from contracts
initially recognized in the period which are not measured under the
PAA are summarized in the following tables.
4,835
57,431
(62,366)
6.9 Contracts initially recognized in
the period
Annual Report 2023 - Allianz Group
1,294
366
121
153
187
230
236
36
16
3
D_Consolidated Financial Statements
53,552
2,670
56,222
(61,305)
346
4,589
506
4,577
Reinsurance contracts held
Insurance contracts issued
2023
As of 31 December
€ mn
CSM release projection
The pattern of recognition does not contain unwinding of
valuation rates and expected over-return of assets for contracts
measured using the VFA and interest accretion of the CSM arising from
unwind of locked-in rates for contracts using the building block
approach. Furthermore, the future CSM release will also include
amounts related to new contracts written in future periods.
Consequently, the CSM release projection should not be interpreted as
the CSM release expected for future periods.
The following table sets out when the Allianz Group expects to
recognize the remaining CSM in profit or loss after the reporting date
for contracts not measured under the PAA.
6.10 CSM release projection
(1,030)
405
26
5
150
(913)
483
875
2022
2023
Present value of future cash outflows
Present value of future cash inflows
Risk adjustment
CSM
€ mn
Reinsurance contracts initially recognized in the period - Allianz Group
6.9.2 Reinsurance contracts initially recognized in
the period
CSM
Risk adjustment
Present value of future cash inflows
4
5
7
1
2-3 years
1-2 years
Up to 1 year
Total
194
Life/Health
Total
Property-Casualty
2022
Total
Life/Health
Property-Casualty
2023
As of 31 December
€ mn
Derecognition of assets for insurance acquisition cash flows
The following table sets out when the Allianz Group expects to
derecognize assets for insurance acquisition cash flows and include
them in the measurement of the group of insurance contracts to which
they are allocated:
1,453
40
1,413
25
24
Balance as of 31 December 2023
Other changes
485
(3)
3-4 years
3,228
(91)
4-5 years
272
1,258
350
118
149
182
224
236
40
1,453
452
121
191
233
273
18
3
4
5
8
1
1,413
434
118
178
186
225
Over 5 years
2022
182
1-2 years
(1,386)
(2,823)
(5,057)
(1,089)
(1,319)
(2,649)
59,381
3,832
86,985
66,851
Total
14,374
41,175
53,382
6,680
under the full
retrospective
transition approach
New contracts and
contracts measured
2022
Contracts measured
under the fair value
transition approach
3,736
under the modified
retrospective
transition approach
16,398
Contracts measured
Total
91,251
72,016
New contracts and
contracts measured
under the full
retrospective
transition approach
14,130
(908)
32,572
(5,117)
(9)
606
122
Less than 1 year
455
29
Finance income and expenses from insurance contracts issued (net)
(2,172)
4,295
(40)
(6,427)
5,882
5,094
(9)
796
Subtotal
4,577
4,577
4,589
4,589
Effects of contracts initially recognized in the period
(6,749)
(282)
(40)
(6,427)
505
796
Contracts measured
under the fair value
transition approach
3,380
1,293
Changes in estimates that adjust CSM
2,894
3,134
3,396
3,689
4,051
Insurance contracts issued
2,967
(92)
(1,922)
53,818
12,560
(684)
11,986
(362)
(92)
3,507
(96)
3,823
(162)
4,206
Total
Over 20 years
10-20 years
5-10 years
15,855
4-5 years
2-3 years
3-4 years
11,451
13,238
11,541
(344)
6.11.1 Insurance contracts
Changes that relate to current service
Insurance revenue
11,530
Changes that relate to future service
Contracts measured
under the modified
retrospective
transition approach
2023
€ mn
Insurance revenue and CSM by transition method - Allianz Group
The following table sets out insurance revenue and the CSM per
transition approach.
6.11 Insurance revenue and CSM by
transition method
D_Consolidated Financial Statements
CSM recognized for services provided
Annual Report 2023 - Allianz Group
CSM as of 1 January
(1,976)
(160)
195
53,382
(83)
(78)
(79)
(300)
(588)
(611)
(78)
Reinsurance contracts held
(25)
143
236
4,647
6,501
189
614,547
4,670
175
(14)
118
4,551
2,024
619,194
135,102
6,358
D_Consolidated Financial Statements
6.18 Liquidity risk
5,194
Annual Report 2023 - Allianz Group
133,077
Analysis of the maturitites of the remaining undiscounted net cash flows of portfolios of insurance contracts issued
204
The following table provides a maturity analysis of the Allianz
Group's insurance contracts based on the remaining contractual
undiscounted net cash flows. Liabilities for remaining coverage for
contracts measured under the PAA have been excluded from this
analysis.
A description of how the Allianz Group manages the liquidity risk
arising from contracts within the scope of IFRS 17 is reflected in the
section "Risk-based steering and risk management" of the Risk and
Opportunity Report within the Group Management Report and is
therefore an integrated part of the notes to the consolidated financial
statements.
583,510
Further credit risk disclosure requirements of IFRS 17 are reflected
in the section "Quantifiable risks and opportunities by risk category" of
the Risk and Opportunity Report within the Group Management
Report and are therefore an integrated part of the notes to the
consolidated financial statements.
6.17 Credit risk
Underwriting risk in the section "Quantifiable risks and
opportunities by risk category".
"Risk-based steering and risk management",
"Internal risk capital framework",
Further risk disclosure requirements of IFRS 17 in connection with
IFRS 7 are reflected in the following sections of the Risk and
Opportunity Report within the Group Management Report and are
therefore an integrated part of the notes to the consolidated financial
statements:
212
588,704
The Allianz Group's reinsurance contract assets were mainly
distributed among reinsurers that had been assigned an investment-
grade rating.
142,860
future cash flows¹,2
141,300
Risk adjustment¹
Present value of
future cash flows 1,2
Total
Risk adjustment¹
Present value of
2022
Total
2023
1_Excluding liability for incurred claims.
Total
Consolidation and Other
€ mn
USA
Global Insurance Lines & Anglo Markets, Iberia & Latin America, Middle East and Africa
2_Including liability for remaining coverage of contracts measured under the PAA, receivables, payables, and deposits.
309,689
1,358
311,048
20,144
627
19,517
20,955
678
20,276
132,013
1,041
130,972
139,487
946
138,541
294,732
1,384
293,349
1,560
Over 5
Amount payable on
1-2 years
2023
205
Other non-participating insurance contracts
Total
Investment contracts with DPF
Indirect participating contracts
Direct participating contracts
2022
As of 31 December
Amounts payable on demand
The amounts from insurance contract liabilities that are payable on
demand and the carrying amounts of the related portfolios of
contracts are set out below:
74,617
1,114,627
1,189,244
22,152
966,052
988,203
4,114
31,499
35,612
36,715
€ mn
39,280
demand
Carrying amount
326,581
134,406
Asia Pacific
130,084
100,200
109,699
102,866
288,981
108,027
9,707
10,387
10,159
Carrying amount
311,670
286,279
Amount payable on
demand
9,525
42,187
47,246
30,930
14,098
20,568
Life/Health
Total
Property-Casualty
2022
Total
8,980
Life/Health
As of 31 December
2023
Total
years
4-5 years
3-4 years
2-3 years
Property-Casualty
33,460
36,559
37,139
30,713
28,737
26,697
5,785
8,567
13,450
20,549
77,242
1,217,717
1,294,958
23,219
1,035,432
42,005 1,058,652
43,496
46,119
50,658
54,028
4,312
37,693
6,064
37,433
Up to 1 year
Western & Southern Europe
2018
As of 31 December
33,242
32,705
31,888
79,393
2017
33,116
2018
32,211
2016
32,649
83,576
2015
84,321
2014
82,063
Total
78,593
32,158
33,063
32,183
31,613
77,735
2020
36,867
31,713
34,358
32,182
31,801
78,176
2019
34,165
32,972
33,447
2023
2022
2021
(10,266)
75,126
24,290
10,035
6,544
5,669
1,469
4,568
2,588
2,145
1,709
14,595
71,499
121,650
2,983
1,361
67,690
79,148
2020
2019
2017
2016
2015
and prior
Calendar year
2014
Accident year
€ mn
Ultimate loss for the individual accident years at the respective reporting date (net)
Ultimate loss for the individual accident years at the respective reporting date (net)
D_Consolidated Financial Statements
Annual Report 2023 - Allianz Group
(11,458)
34,363
German Speaking Countries and Central & Eastern Europe
36,570
2021
%
%
%
%
Change to IFRS 17
%
%
%
€ mn
2020
2019
2018
2017
2016
2015
2021
2014
%
2023
€ mn
Concentration of insurance risk in the Life/Health business segment per reportable segment
As of 31 December 2023 and 2022, the Allianz Group's present value
of future cash flows and risk adjustment, both excluding incurred
claims liabilities, for the business segment Life/Health are summarized
per reportable segment as follows:
6.16_ Concentration of insurance risk
D_Consolidated Financial Statements
Annual Report 2023 - Allianz Group
2022
%
68.2
66.5
203
in consolidated subsidiaries and foreign currency translation are
presented differently, while other effects (as e.g. discounting, risk
adjustment) are fully excluded from above loss ratio triangle.
The loss ratio presented above deviates from the reported loss ratio
because the ultimate loss in the table above is based on the sum of the
payments plus the loss reserves, not the incurred loss as stated in the
consolidated income statement. This means that effects like changes
63,963
68,757
%
66.2
Accident year
Insurance
revenue
2022
2023
33,342
32,323
31,757
79,366
2022
Change to IFRS 17
34,835
37,668
36,917
34,762
33,167
32,193
31,596
77,847
35,364
37,080
35,090
37,107
Calendar year insurance revenue and ultimate loss ratios for the individual accident years at the respective reporting date (net)
Calendar year insurance revenue and ultimate loss ratios for the individual accident years at the respective reporting date (net)
408,104
46,906
42,323
36,534
34,189
36,956
34,682
33,137
32,313
31,648
79,416
2023
42,537
36,398
122,714
་
574,240
25,643
269
697
1,243
105
119
(141)
18,106
Total
Financial
liabilities
Other
Alternative
investments¹
Real estate
Associates and joint
ventures
5,103
Amortized cost
(700)
5,103
(25)
(4,616)
107
924
1
4,744
(841)
24,801
127
697
1,243
105
119
18,106
(700)
comprehensive
income
Fair value through
profit or loss
other
2022
€ mn
Net investment income by measurement categories (continued)
D_Consolidated Financial Statements
Annual Report 2023 - Allianz Group
24,528
Interest result
(1,349)
(1,056)
8,226
268
(1,664)
(1,304)
368
13,786
(1,849)
Interest income and similar income
Interest expenses
Subtotal
according to IAS 16
according to IAS 40
according to IAS 28
Financial instruments
Fair value through
Other investments
Subtotal
Reversal of impairment
Impairments
Impairments (net)
Expected credit loss allowance
Valuation result
Subtotal
Realized losses
Realized gains
Realized gains/losses (net)
(127)
6,196
(9)
(25)
207
(12,237)
(24)
(559)
452
(5)
Investment expenses
(490)
Subtotal
(15,517)
(15,517)
(net)
Investment result from unit-linked assets
(5,015)
3,728
(23,736)
3,728
(397)
(1,133)
Annual Report 2023 - Allianz Group
208
1_Mainly investments in wind parks.
(12,550)
(493)
(13,282)
(389)
284
1,355
90
17,743
(18,632)
Total
(36,392)
(1,919)
385
Foreign currency gains/losses
207
(13)
24
(46)
(40)
(153)
114
(27)
22
21,106
(21)
(27)
(5)
(490)
98
798
ཟླུས
4
(24)
(446)
11
(435)
(563)
479
(5,126)
measured at fair value through profit or
loss
Valuation result on investments
(18,609)
(18,609)
Income from derivatives
(482)
57
(539)
(495)
959
(4,930)
5,889
128
537,251
(374)
6,509
other
according to IAS 16
according to IAS 40
according to IAS 28
Other investments
Financial instruments
Fair value through
comprehensive
income
Fair value through
profit or loss
Reversal of impairment
Impairments
Impairments (net)
Expected credit loss allowance
Valuation result
Subtotal
Subtotal
Realized losses
Amortized cost
Real estate
(1,006)
(243)
26,635
947
619
1,241
Associates and joint
ventures
166
19,064
4,223
Total
Financial
liabilities
Other
Alternative
investments¹
375
Realized gains
Realized gains/losses (net)
Subtotal
(5,518)
Realized gains/losses (net)
24,801
25,386
Interest result
2022
959
2023
7.1 Net investment income
7 _ NOTES TO FINANCIAL OPERATIONS
D_Consolidated Financial Statements
Annual Report 2023 - Allianz Group
544,109
527,336
Net investment income
€ mn
Valuation result
6,509
(36,392)
Interest expenses
Interest income and similar income
Interest result
2023
€ mn
Net investment income by measurement categories
D_Consolidated Financial Statements
Annual Report 2023 - Allianz Group
206
(12,550)
24,528
Total
(1,919)
(1,849)
Investment expenses
(1,249)
(419)
4,223
375
(155)
57
(212)
213
(5,518)
(6,325)
2,150
807
(64)
$་༔
24
(74)
(41)
56
(64)
1
(1,317)
(6)
(343)
8,544
24
(2,546)
(1,358)
(7)
(2,471)
220
10,594
10,594
(1,980)
(1,980)
(4,315)
(343)
1,973
(32)
(75)
(41)
(net)
Investment result from unit-linked assets
Foreign currency gains/losses
(177)
measured at fair value through profit or
loss
Valuation result on investments
Subtotal
2,150
25,386
(1,006)
704
619
1,241
166
Income from derivatives
Investment expenses
Total
1_Mainly investments in wind parks.
34
(1)
35
(7)
220
59
(113)
(1)
(244)
60
131
(5,498)
(6,079)
581
207
19,064
9,646
8,454
5,680
%
(0.5) -0
(0.5) - 0
(1)
%
0-0.5
(0.5) -0
0-0.5
%
(1)
(0.5) 0
(1)
%
(1)
(0.5) 0
(5)
(14)
(4)
%
Interest rates down by 0.5 %
Credit spread on government bonds up by 0.5 %
Credit spread on non-government bonds up by 0.5%
Property-Casualty
1 in 10 years natural catastrophe excess loss
Life/Health
Shareholders'
equity
(1)
2023
Shareholders'
net income
€ mn
58,477
%
4
8,541
12
52,601
5
CSM¹
%
(1)
(7)
€ mn
2014
Calendar year
and prior
2015
2016
2017
Loss payments for the individual accident years (per calendar year, net)
2018
28,702
2015
13,740
16,291
2016
7,065
7,929
2014
Interest rates up by 0.5%
Loss payments for the individual accident years (per calendar year, net)
has been used for the calendar year 2022 loss development. While the
first disclosure of calendar year 2022 followed IFRS 4 accounting, the
below restated calendar year 2022 loss developments are disclosed
according to IFRS 17. The simplified approach adopted relies on the
split by accident year of the undiscounted IFRS 4 reserves, applied on
the IFRS 17 undiscounted reserves underlying the financial year 2023
opening balance sheet.
Lapse rates up by 10%
%
(0.5) - 0
(1)
(3)
1_CSM sensitivities are presented for the Life/Health business segment only.
200
The data is only presented on a net basis, as this is considered to
be more meaningful in order to represent the retained impact on
Group results. The loss triangles are not prepared on a currency-
adjusted basis. This means all figures are translated from the
respective local currency into the Allianz Group presentation currency
(euro), consistently using the exchange rates applicable at the
respective reporting date. This ensures that the reserves reconcile with
reserves in the consolidated balance sheet.
Annual Report 2023 - Allianz Group
6.15 Claims development
The loss triangle is a tabular representation of loss-related data (such
as payments, loss reserves, ultimate losses) in two time-related
dimensions. One of these is the calendar year, the other is the accident
year (year of loss occurrence). Loss triangles - as the basis for
measuring loss reserves - express how the loss reserves change over
the course of time due to payments made and new estimates of the
expected ultimate loss at the respective reporting date.
The ultimate loss of an accident year comprises all payments
made for that accident year up to the reporting date, plus the loss
reserves at the reporting date. Given complete information regarding
all losses incurred up to the reporting date, the ultimate loss for each
accident-year period would remain unchanged. In practice, however,
the ultimate loss (based on estimates) is exposed to fluctuations that
reflect the increase in knowledge regarding the loss cases.
It is important to highlight that the following triangles, which show
only figures of the Property-Casualty business segment, follow
different accounting standards on the disclosure of the payments, loss
reserves, and ultimate losses.
Calendar years 2021 and prior are disclosed according to IFRS 4,
meaning that the overall development of loss reserves considers
undiscounted non-annuities and discounted annuities.
Calendar years 2022 and onward are disclosed according to
IFRS 17, hence loss development by accident year is fully on an
undiscounted basis (for both annuities and non-annuities). A full
reconciliation of the undiscounted reserves disclosed in below
triangles to the net liabilities for incurred claims (LIC) is presented in
the second table below. It should be noted, that a simplified approach
D_Consolidated Financial Statements
Equity markets down by 30%
Equity markets up by 30%
Base amount
108,625
110,551
Property-
Casualty¹
2,011
Life/Health
Total
112,475
114,486
1,925
6,859
290,502
7,141
269,365
276,506
25
12,466
12,491
283,644
21
Derivatives
Real estate
7,675
D_Consolidated Financial Statements
6.13 Fair values of underlying items
The underlying items are determined from a single entity view, i.e.,
not from a consolidated Allianz Group view, and are based on the
specific contractual terms including applicable rules imposed by law
or regulation. This includes underlying items that are not solely
financial in nature, e.g., an entity's profit based on local accounting
principles.
The composition of underlying items for contracts with direct
participation features and their fair values are disclosed in the
following table:
Fair values of underlying items
€ mn
Fixed assets of alternative investments
As of 31 December
2022
Property-
Casualty¹
Life/Health
Total
Equities
Debt securities
Investment funds
2023
16,409
13,446
139
102,894
204
102,894
509,863
267
519,209
1_Consists mainly of the underlying items of the accident insurance with premium refunds.
199
Annual Report 2023 - Allianz Group
64
9,347
D_Consolidated Financial Statements
The following table sets out sensitivities for the Allianz Group's
shareholders' equity and shareholders' net income, as well as the CSM
of the Life/Health business segment, reflecting relevant scenarios for
market risk and insurance risk.
Deriving these sensitivities requires complex and judgmental
valuations. Furthermore, market developments or insurance events
reflected in the scenarios would usually trigger management reactions
to balance the impact, reflecting the overall circumstances and the
variety of simultaneous sensitivities including cross effects. The impact
taking into account these reactions cannot be reasonably reflected in
a single number.
The sensitivities are thus calculating the theoretical impact of an
instantaneous shock at the end of the reporting period. They do not
fully take into account all management actions and indirect effects,
such as changes in the asset allocation.
Consequently, the shareholders' net income sensitivity should not
be interpreted as a comprehensive reflection of the respective
scenarios.
Sensitivity analysis
As of 31 December
Allianz Group
6.14 _ Sensitivity analysis
13,466
112,707
634
540,025
8,950
12,501
12,640
110
10,815
10,926
287
287
112,707
633
531,075
214
246
417
246
417
Financial assets for unit-linked contracts
Other
2
Total
214
2017
Underlying items determine some of the amounts payable to
policyholders. They can comprise any items; for example, a reference
portfolio of assets, the net assets of the entity, or a specified subset of
the net assets of the entity.
2,261
2018
55,619
41,133
16,358
32,555
7,991
16,708
25,880
5,407
16,573
21,413
4,114
5,424
8,327
17,081
2017
2016
2015
and prior
2016
2017
2018
2019
2020
2021
2022
18,744
2023
Effect of discounting
Receivables/Payables/Deposits/Other
Net liability for incurred claims
thereof liability for incurred claims
thereof asset for incurred claims
202
2014
Risk adjustment
3,413
4,403
6,049
2022
2023
Total
55,619
57,492
57,254
56,314
2021
56,358
61,958
65,821
Change to IFRS 17
15,721
2,034
3,222
4,006
60,122
2015
2020
19,081
8,751
18,762
16,649
2,642
3,466
4,387
5,873
2019
9,646
15,346
2,246
2,837
3,720
4,942
6,939
10,708
19,294
2014
2,518
Accident year
1,278
2,883
8,818
17,104
2021
1,415
379
938
639
1,329
3,054
7,552
18,587
Accident year
2019
2020
770
2021
584
2020
7,842
Calendar year
16,669
2018
3,668
1,119
2,484
1,654
7,976
2019
2,251
788
1,044
2,753
8,524
18,105
17,084
2022
3,896
Total
362
429
760
988
1,106
2,529
21,431
10,856
216
38,246
41,039
201
Annual Report 2023 - Allianz Group
D_Consolidated Financial Statements
Reserves for loss and loss adjustment expenses for the individual accident years at the respective reporting date (net)
Reserves for loss and loss adjustment expenses for the individual accident years at the respective reporting date (net)
2023
22,616
1,177
€ mn
8,875
28,702
30,031
2023
30,778
32,330
33,465
33,258
33,726
31,403
2022
1,143
373
450
674
2,758
1,120
Change to IFRS 17
1,423
174
70,578
Alternative debt
13,542
25
(1,911)
Other
11,738
2,807
9
(6)
(8,167)
62
2,872
82
73
43,858
Loans
177,143
214,270
678
(32,918)
2,427
184,456
46,859
818
(4,498)
679
27,202
56
(2,504)
243
24,996
78,498
Total
Reconciliation of gross carrying amount and expected credit loss per stage as of 31 December 2023 and 2022
4,087
Gross carrying
Gross carrying
Expected credit loss
220
amount
3,104
Expected credit loss
amount
Expected credit loss
Total
796
1,436
154,522
(1,282)
(154,149)
(92)
2,809
(3,184)
(266)
594,101
594,101
Credit impaired¹
420
(88,052)
5,504
515,641
209
Annual Report 2023 - Allianz Group
D_Consolidated Financial Statements
€ mn
Lifetime, but not credit impaired
Gross carrying
amount
7,022
1 January 2023
Changes in the consolidated subsidiaries of the Allianz Group
Changes in models and risk parameters and due to modifications
Matured or sold
Reclassification into non-current assets and assets of disposal
groups classified as held for sale
12-month
Gross carrying
amount
Expected credit loss
1,838
Additions
583,975
79
2,428
21,187
22,437
Covered bonds
44,338
1,074
(3,141)
579
42,850
Real estate held for investment
Fixed assets from alternative investments
Total
1_Includes derivative financial instruments of € 15,114 mn (2022: € 9,547 mn).
2_As of 31 December 2023, fair value and gross carrying amount with a contractual life of less
than one year amounted to € 47,371 mn (2022: € 47,139 mn) and € 44,317 mn (2022:
€ 47,472 mn), respectively.
3_As of 31 December 2023, fair value and gross carrying amount with a contractual life of less
than one year amounted to € 2,803 mn (2022: € 2,763 mn) and €2,771 (2022: €2,760 mn),
respectively.
4_Includes investments in associates and joint ventures accounted for using the equity method of
€3,014 mn (2022: € 2,100 mn).
Investments in associates and joint ventures4
192,976
2,429
(22,008)
Investments measured at fair value through other
comprehensive income²
297
562,693
544,892
Investments measured at amortized cost³
8,829
7,870
5 Consists of real estate held for investment measured at fair value of € 21,208 mn (2022:
€ 23,314 mn) and measured at amortized cost of €2,716 mn (2022: € 2,546 mn).
Government bonds
203,719
4,047
(28,096)
2,204
181,875
210,450
2,105
Corporate bonds
Corporate bonds
Covered bonds
ABS/MBS
23,924
12,314
Other
2,319
29
62
43
2,453
(1,350)
Total
7,719
(62,612)
5,811
534,681
31 December 2022
Government bonds
210,925
583,763
(38,048)
51
Alternative debt
25,861
27,459
104
(1,873)
269
25,959
2,854
13,534
2,433
81,943
309
(6,206)
208
76,255
721,802
690,991
Loans
ABS/MBS
211,005
546
1,053
(1,841)
(620)
2,638
686
46
17
25
44
800
(158)
10
155
1,356
(24)
(3)
(44)
1,103
10,844
(49,063)
(99)
(682)
(212)
(216,536)
(386)
(214)
259
(5)
(2,037)
(16)
(16,083)
(511)
(41)
(5)
(468)
163
30
65
5
Other changes
31 December 2023
1 January 2022
Additions
(4,246)
(3,444)
574,940
567,613
166,491
Changes in the consolidated subsidiaries of the Allianz Group
(493)
Changes in models and risk parameters and due to modifications
Matured or sold
5
(166,791)
31 December 2023
Foreign currency translation adjustments
Amortization
Write-offs
Transfer to credit impaired
11,730
80
(6,168)
6
623
93
(2,733)
216
108
220
3,104
796
594,101
1,436
Transfer to 12-month
Transfer to lifetime, but not credit impaired
7,022
5
(505)
127
(157,562)
(503)
(76)
142
(8)
(26)
(5)
(2,809)
(87)
(71)
3,184
200
181
(61)
(5)
(315)
(1,267)
(108)
(2,146)
11,254
ཤྰཀླུ་® སནྟུ་c་སྒྱེགླུ*༔ སྐྱའྱིའྱི སྐྱེསྒྱེ་ཀྑུཊྛཋ
1,234
3
108
27
155,864
326
106
(1)
(1)
(2)
(1,262)
(26)
2
(3)
21
(6)
163
17
་⌘°⌘ཀླུ་ངལ་ལ
81
6
(6)
7
461
(84)
(1)
(4,527)
(3,280)
88
524
583,763
1,125
591,818
843
(84)
(797)
(12)
7
1
(50)
(178)
(22)
(103)
(38)
55
64
31
6,409
253
2,415
24,048
417
157
44,450
109
87,498
2
Fair value
Other
Total
212
Reconciliation of gross carrying amount and expected credit loss as of
31 December 2023 and 2023
€ mn
Gross
carrying
amount
Unrealized
gains
Unrealized
losses
Accrued
interest
Fair value
2023
2022
4,589
42
Other debt
Loans
ABS/MBS
Covered bonds
D_Consolidated Financial Statements
7.2.3 Investments measured at amortized cost
Government bonds and loans measured at amortized cost are held by
banking entities, for which IFRS 9 allows the valuation "at amortized
costs" due to their business model.
Investments measured at amortized cost - Fair value
€ mn
As of 31 December 2023
Government bonds
Corporate bonds
21
Covered bonds
Loans
Other debt
Other
Total
As of 31 December 2022
Government bonds
Corporate bonds
ABS/MBS
Annual Report 2023 - Allianz Group
4,610
42
As of 1 January
Allianz Group
(5)
13
13
Changes in models
8,856
21
(2)
and risk parameters
33
8,908
and due to
modifications
3,934
27
92
92
subsidiaries of the
4,151
7,930
Expected
credit loss²
72
Gross
carrying
amount¹
Expected
credit loss²
5,427
Additions
Gross
carrying
amount¹
2,619
3,101
77
10
Changes in the
consolidated
4,120
(2)
33
13
211
Disposals of equity investments are driven by overall risk
management considerations including sensitivity considerations as
well as changed market conditions such as higher interest rate levels.
Equity investments are held by insurance-focused Allianz entities to
diversify the portfolios and to take advantage of expected long-term
returns.
For the year ended 31 December 2023, the dividend income for equity
investments designated at fair value through OCI without recycling
amounted to € 863 mn (2022: € 1,132 mn), thereof € 193 mn (2022:
€ 514 mn) for derecognized investments. The fair value of these
derecognized instruments was € 8,705 mn (2022: € 25,761 mn). The
Allianz Group realized a loss of € 229 mn for the year ended
31 December 2023 (2022: a gain of € 6,021 mn).
Total
574,940
6,409
2,223
192
583,763
As of 31 December 2022
AAA
AA
A
BBB
Non-investment grade
Not rated
Total
113,956
34,307
201
1,392
32,714
90,458
138,786
138,786
A
132,106
132,106
BBB
113,956
Non-investment grade
159,572
159,572
21,303
5,017
2,021
192
28,534
Not rated
144,976
144,976
141,735
21,491
21,205
Non-redeemable preferred shares
316
262
Unlisted shares
2,333
Listed shares
2,114
1,679
1,714
Other
1,085
26,904
1,334
26,628
Total
Infrastucture
(20)
2022
As of 31 December
141,735
163,849
163,849
16,124
6,437
2,083
3,336
583,975
2023
585
7,022
2,892
178
34
212
24,822
4,764
594,101
7.2.2.2 Equity investments designated at fair value
through OCI
Equity investments designated at fair value through OCI
€ mn
810
102,316
(6)
Matured or sold
50
68
Disposals
རྐྱས
(3)
2
(1)
90,458
AA
AAA
As of 31 December 2023
Total
originated
credit
impaired
or
Purchased
67
Changes in the consolidated subsidiaries of the Allianz Group
Changes in the consolidated subsidiaries of the
Allianz Group
22,771
1,802
3,674
3,798
Carrying amount as of 1 January
2,433
2,473
(1,128)
(1,164)
Credit
impaired
Additions
175
2,546
2,634
Additions
300
91
23,314
1,132
586
Carrying amount as of 1 January
Lifetime,
but not
credit
impaired
€ mn
7.2.1 Overview
Investments
€ mn
7.2.2 Investments measured at fair value through other comprehensive income
7.2.2.1 Debt investments
Debt investments - Fair value
€ mn
2023
2022
As of 31 December
Investments measured at fair value through profit
or loss¹
Gross
carrying
amount
Unrealized
gains
Unrealized
losses
Accrued
interest
7.2 Investments
D_Consolidated Financial Statements
Transfer to 12-month
16,123
Gross carrying amount per investment grade
The following table presents the gross carrying amount per investment
grade and stage:
D_Consolidated Financial Statements
Annual Report 2023 - Allianz Group
210
1_Also includes purchased or originated credit-impaired assets.
583,975
12-month
31 December 2022
Other changes
Foreign currency translation adjustments
Amortization
Write-offs
Transfer to credit impaired
(10,801)
Transfer to lifetime, but not credit impaired
2,812
Accumulated depreciation as of 1 January
Cost as of 1 January
(1,563)
15
Amortization
32
7,930
(26)
12
7,915
Foreign currency
translation
adjustments
Other changes
As of 31 December
(1)
12
(14)
15
(2)
Write-offs
27
(1,725)
(9)
(476)
(8)
Reclassification into
non-current assets
and assets of
(60)
disposal groups
3,927
10
3,936
sale
(6)
(61)
27
classified as held for
(6)
8,856
61
7.2.6 Fixed assets from alternative investments
Fixed assets from alternative investments
€ mn
Measured at amortized
2023
2022
cost
Measured at fair value
€ mn
Cost as of 1 January
4,036
2023
2022
2023
2022
Accumulated depreciation as of 1 January
(1,750)
4,183
3,915
21
Real estate held for investment
(167)
(61)
7,930
72
1_Consists mainly of financial instruments in stage "12-month".
2_Consists mainly of financial instruments in stages "12-month" and "credit impaired".
7.2.4 Investments in associates and joint ventures
As of 31 December 2023, loans to associates and joint ventures
amounted to € 2,582 mn (2022: € 2,363 mn), with interest received of
€ 145 mn (2022: € 141 mn).
Annual Report 2023 - Allianz Group
D_Consolidated Financial Statements
Associates and joint ventures
€ mn
7.2.5 Real estate held for investment
2023
Share of earnings
166
105
Share of other comprehensive income
14
Share of total comprehensive income
180
2022
Reclassification into non-current assets and assets of disposal
groups classified as held for sale
(1,987)
€ mn
80,487
62,724
487,116
14,809
(9,239)
454,183
343,904
8,839
75,549
62,724
419,565
14,141
(9,074)
403,616
281,292
(23)
34
15,311
(4,061)
114,820
53
114,872
1,500
(481)
120,417
2,654
(530)
650
28,336
220
29,206
240
(141)
7,834
5,206
(5,288)
4,938
thereof fair value hedges¹
993
1-5 years
954
Over 5 years
566
Notional
principal
amounts
Assets
Total
Liabilities
3
(654)
1,845
1,845
64
(129)
2,513
Foreign exchange contracts
Equity/index contracts
Interest rate contracts
67,551
668
(165)
50,567
1,005
(5)
Annual Report 2023 - Allianz Group
D_Consolidated Financial Statements
Derivative financial instruments used hedge accounting relationships
Derivative financial instruments held for risk management per instrument type
€ mn
As of 31 December
2023
Maturity by notional amount
Up to 1 year
62,612
209,800
(679)
946
DE000A3E5TRO
2021
EUR
1,250
2.600
Perpetual
Perpetual
US018820AB64/
2021
USD
1,250
3.200
Perpetual
Annual Report 2023 - Allianz Group
USX10001AB51
3.500
1,250
USD
XS1485742438
2016
USD
1,500
3.875
Perpetual
DE000A289FK7
2020
EUR
1,250
2.625
Perpetual
US018820AA81/
USX10001AA78
2020
D_Consolidated Financial Statements
7.4 Derivative financial instruments
Derivatives which form part of hedge accounting relationships or are
used as freestanding derivatives are included in the line items
investments and financial liabilities, respectively. The following two
tables show the fair values and the notional amounts of all freestanding
derivatives and all derivatives for which hedge accounting is applied by
the Allianz Group, as of 31 December 2023. The notional principal
amounts indicated in the tables are cumulative, as they include the
absolute value of the notional principal amounts of derivatives with
positive and negative fair values. Although these notional principal
amounts reflect the degree of the Allianz Group's involvement in
1-5 years
26,001
Over 5 years
53,496
Notional
principal
amounts
103,689
Assets
Liabilities
Notional
principal
amounts
Assets
Liabilities
26,098
9,008
239,347
703
12,366
(658)
(7,959)
108,655
24,193
204,242
4,651
Up to 1 year
2022
derivative transactions, they do not represent amounts exposed to risk.
Further information on the use of derivatives to hedge risk can be found
in the sections on market and credit risk of the Risk and Opportunity
Report, which forms part of the Group Management Report.
Freestanding derivative financial instruments
Freestanding derivative financial instruments per instrument type
As of 31 December
Interest rate contracts
Equity/index contracts
Foreign exchange contracts
Other
Total
thereof OTC¹
thereof exchange-traded
1_Consists mainly of equity/interest contracts.
Further information on the fair value measurement of these derivatives
can be found in note 7.5.
216
2023
Maturity by notional amount
Perpetual
1,569
8,261
20,337
20,337
21,208
21,208
23,314
23,314
18,173
2,716
2,546
5,812
152,872
152,872
141,034
141,034
5,753
18,173
2,481
2,100
29,210
102,316
22,896
22,896
87,498
87,498
562,693
562,693
544,892
544,892
8,829
8,908
7,870
7,915
3,014
3,385
Financial liabilities
102,316
Financial liabilities measured at fair value through profit or loss
Certificated liabilities
2,273
1,882
1,882
39,489
39,489
37,510
2,273
37,510
10,196
10,189
10,317
10,317
218
Annual Report 2023 - Allianz Group
Non-unit-linked investment contracts measured at amortized cost
Other (Financial liabilities measured at amortized costs)
Unit-linked investment contracts measured at fair value
10,937
12,089
Subordinated liabilities
12,683
12,683
8,994
8,994
20,181
20,080
19,219
19,063
8,407
8,138
9,126
8,490
12,738
12,258
Liabilities to banks and customers
29,210
Fair value
Carrying amount
276
690
thereof net investment hedges³
4,349
638
4,987
5,471
28
1_Consists mainly of equity/index contracts.
2_Consists mainly of interest rate contracts and foreign exchange contracts.
3_Consists solely of foreign exchange contracts.
Fair value hedges
The Allianz Group uses fair value hedges to hedge the exposure to
changes in the fair value of financial assets and financial liabilities due
to movements in interest or exchange rates, and to hedge its equity
portfolio against equity market risk. As of 31 December 2023, the
derivative financial instruments used for the related fair value hedges
of the Allianz Group had a total negative fair value of € 128 mn.
The ineffectiveness that arises from fair value hedges amounted to
€ (10) mn for the year ended 31 December 2023.
Cash flow hedges
135
2,191
1,734
1,546
239
(172)
7,489
2,523
2,607
12,619
306
(954)
1,594
151
416
2,161
2
130
thereof cash flow hedges²
Cash flow hedges were used to hedge the exposure to the variability
of cash flows arising from interest rate or exchange rate fluctuations
as well as inflation. As of 31 December 2023, the derivative
instruments utilized had a total negative fair value of € 414 mn.
The ineffectiveness that arises from cash flow hedges amounted to
€ (1) mn for the year ended 31 December 2023. The change in the
value of the hedging instrument recognized in other comprehensive
income was € 948 mn for the year ended 31 December 2023.
Hedges of net investment in foreign operations
As of 31 December 2023, the Allianz Group hedged part of its foreign
currency net investments through the issuance of several foreign
currency denominated liabilities and the use of forward contracts. The
total negative fair value was € 107 mn for the year ended
31 December 2023.
Offsetting
As of 31 December
Financial assets
Cash and cash equivalents
Financial assets measured at fair value through profit or loss
Financial assets measured at fair value through other comprehensive income
Financial assets measured at amortized costs
Investments in associates and joint ventures at equity
Investments in associates and joint ventures at fair value
Real estate held for investment measured at fair value
Real estate held for investment measured at cost
Financial assets for unit-linked contracts
2023
2022
Carrying amount
Fair value
€ mn
2,041
Fair values and carrying amounts of financial instruments
The following table compares the carrying amount and fair value of
The Allianz Group enters into enforceable master netting
arrangements and similar arrangements mainly for derivatives
transactions. None of these enforceable master netting arrangements
or similar arrangements meet the requirements for offsetting in line
with IAS 32.
Credit risk associated with netting arrangements is further
mitigated by collateral. For further information on collateral, please
refer to note 7.5. The maximum credit risk exposure is represented by
the carrying amount of the financial asset.
Interest Rate Benchmark Reform (Phase 2)
Regarding IBOR Reform, the transition to alternative benchmark rates
affects two components, the risk-free rates for discounting cash flows
in derivative transactions as well as reference rates of variable
financial instruments and transactions.
In the meantime, the derivatives of the Allianz Group are fully
migrated due to the already implemented transition of the risk-free
discount rate in major currency blocks. For cash instruments, the
transition of the risk-free discount rate and the transition of the
reference rate Euribor used for the euro region, where the majority of
the relevant financial instruments are, has already happened. The USD
Libor transition happened by mid 2023. Overall the associated or
expected effect of this transition is not material for the Allianz Group.
217
Annual Report 2023 - Allianz Group
D_Consolidated Financial Statements
7.5 Fair values and carrying amounts
of financial instruments
Certain risk disclosure requirements of IFRS 7 are reflected in the
following sections of the Risk and Opportunity Report within the Group
Management Report and are therefore an integrated part of the notes
to the consolidated financial statements:
Risk-based steering and risk management,
Internal risk capital framework,
Allianz risk profile and management assessment,
Market risk, credit risk, and liquidity risk in the section Quantifiable
risks and opportunities by risk category.
Fair values and carrying amounts
the Allianz Group's financial assets and financial liabilities:
3.375
(5,293)
EUR
Total subordinated liabilities³
Designated at fair value through profit or loss
47
Subtotal¹
12,683
8,994
8,994
1_As of 31 December 2023, includes accrued interest of € 80 mn (2022: € 79 mn).
2_Relates to subordinated loans issued by subsidiaries.
Financial liabilities measured at amortized cost
Liabilities to banks
8,838
Liabilities to customers
11,343
8,283
10,936
3_As of 31 December 2023, includes accrued interest of € 185 mn (2022: € 149 mn).
12,636
Subtotal
Fair value hedge effects related to subordinated liabilities
Senior bonds
Money market securities
Fair value hedge effects related to certificated liabilities
Financial liabilities measured at fair value
through profit or loss
Total certificated liabilities¹
Mandatory at fair value through profit or loss
Subordinated bonds
Derivatives
10,194
6,586
Subordinated loans²
Puttable instruments
2,441
2,408
Certificated liabilities
8,407
9,126
Subordinated liabilities
303
3,478
3,641
7,423
8,132
1,103
1,103
1,123
(119)
(119)
(130)
1,407
3,478
3,522
8,407
2022
As of 31 December
2023
1-5 years
12,738
12,089
Other
2,273
1,882
Subtotal²
43,599
42,316
56,282
51,310
Total
1_Consists of puttable instruments and financial liabilities designated at fair value through profit
or loss due within one year of € 1,866 mn (2022: € 1,656 mn), 1-5 years of € 41 mn (2022: € 9 mn),
and over 5 years of € 581 mn (2022: € 742 mn). Information on the maturity of the derivatives
can be found in note 7.4.
2_Consists of financial liabilities measured at amortized cost due within one year of € 16,934 mn
(2022: € 15,846 mn), 1-5 years of € 7,465 mn (2022: € 7,051 mn), and over 5 years of € 19,200 mn
(2022: € 19,419 mn).
214
Up to 1 year
Over 5 years
9,126
€ mn
7.3.2 Certificated and subordinated liabilities
Depreciation
(193)
(182)
Depreciation
(57)
(60)
290
Impairments
(46)
Impairments
(75)
(21)
Reversals of impairments
59
(32)
(8)
(14)
Foreign currency translation adjustments
Disposals and reclassifications into non-current assets and assets of disposal groups classified as held for
sale
(64)
(167)
(1,210)
(1,219)
Reclassifications from /into non-current assets and
assets of disposal groups classified as held for sale
15
Reclassifications
(48)
(62)
Foreign currency translation adjustments
47
58
67
177
101
22
Reversals of impairments
Changes in fair value
Other changes
23,314
(1,236)
(1,128)
3,952
3,674
213
Annual Report 2023 - Allianz Group
D_Consolidated Financial Statements
7.3 Financial liabilities
7.3.1 Overview
Financial liabilities
€ mn
As of 31 December
2023
2022
4,183
Certificated and subordinated liabilities
4,752
16
21,208
Carrying amount as of 31 December
Accumulated depreciation as of 31 December
Cost as of 31 December
1
24
Carrying amount as of 31 December
2,854
1,500
(2,287)
(498)
Accumulated depreciation as of 31 December
(1,900)
(1,750)
2,716
2,546
Cost as of 31 December
12,763
2,433
12,145
7 September 2038
DE000A14J9N8
2015
EUR
1,500
2.241
4.597
7 July 2045
2017
EUR
1,000
3.099
6 July 2047
XS1556937891
DE000A2DAHN6
1,250
EUR
2022
1.375
21 April 2031
DE000A3KY359
2021
EUR
500
0.500
22 November 2033
DE000A1HG1L4
2013
GBP
750
4.500
13 March 2043
DE000A30VTT8
2017
USD
600
5.100
2023
EUR
1,250
5.824
25 July 2053
US018820AC48/
USX10001AC35
2023
USD
1,000
6.350
6 September 2053
DE000A13R7Z7
2014
12,763
DE000A351U49
750
5 July 2052
1,250
30 January 2049
DE000A2YPFA1
2019
EUR
1,000
1.301
25 September 2049
DE000A254TM8
2020
EUR
1,000
8 July 2050
DE000A30VJZ6
2022
EUR
4.252
EUR
2.121
DE000A180B80
ISIN
Year of issue
Currency
Notional amount
Coupon in %
Maturity date
215
DE000A3KY367
EUR
300
3-months Euribor
+100 bps
22 November 2024
DE000A28RSQ8
2020
2021
Allianz SE, Munich
Subordinated liabilities
Allianz Finance II B.V., Amsterdam
45
2016
45
45
(71)
(71)
(101)
(71)
12,808
12,738
12,089
Annual Report 2023 - Allianz Group
D_Consolidated Financial Statements
mn
Certificated liabilities
EUR
500
Outstanding bonds issued or guaranteed by Allianz SE as of 31 December 2023
2019
750
3.000
13 March 2028
DE000A2RWAY2
2019
EUR
1.500
15 January 2030
DE000A28RSR6
2020
EUR
750
DE000A2RWAX4
0.500
14 January 2031
EUR
2013
750
6 December 2027
EUR
14 January 2025
15 January 2026
DE000A3KY342
2021
Non-interest
bearing
0.875
EUR
700
750
DE000A1HG1K6
2017
EUR
750
Non-interest
bearing
0.875
22 November 2026
DE000A19S4V6
46,293
392,610
562,693
400,991
48,518
26,628
5,285
113,184
105,989
20,155
114
18,059
18,173
181
20,337
21,208
21,208
Financial assets for unit-linked contracts
Total
393
23,314
23,314
544,892
20,950
Equity investments
5,051
3,651
4,649
116,281
67,955
76,255
3,093
4,541
62,943
70,578
Other
Subtotal
Investments in associates and joint ventures
Real estate held for investment
1,750
1,516
12,608
15,874
3,459
1,453
12,322
17,234
21,498
355
26,904
34,224
18,878
152,872
6
8,994
37,510
1,216
52,172
27,236
390
46,504
1_Quoted prices in active markets.
2_Market observable inputs.
3_Non-market observable inputs.
12,983
4_Changes in the derivatives level 3 fair values mainly result from a clarification regarding the significant inputs observability of certain contracts. Applied to 2022, the comparative level 3 assets would increase by € 1,084 mn, financial liabilities measured at fair value through profit or loss by € 1,054 mn,
with a concurrent decrease of level 1 fair values.
Annual Report 2023 - Allianz Group
D_Consolidated Financial Statements
Reconciliation of level 3 financial instruments
The following tables show reconciliations of the financial instruments
carried at fair value and classified as level 3:
Reconciliation of level 3 financial assets
€ mn
or loss
Carrying value (fair value) as of 1 January 2023
Loans
Additions through purchases and issues
219
24,521
39,489
6
108,032
175,372
460,923
220,967
857,262
165,871
30,792
444,632
2,210
141,034
206,572
817,075
Financial Liabilities
Financial liabilities measured at fair value through profit or loss
Unit-linked investment contracts measured at fair value
Total
2,309
9,165
1,210
12,683
2,715
5,895
384
28,160
30,468
11,324
20,488
2,368
43,858
Equity investments
39,674
69
9,535
3,983
13,587
436
2
2
4
1
9,017
3
Debt investments
1,852
12
15
Funds
9,815
2,582
61,214
73,611
9,631
4,313
52,688
11,304
66,632
Financial assets measured at fair value through profit or loss
Total
Net transfers into (out of) level 3
D_Consolidated Financial Statements
Fair value measurement on a recurring basis
The following financial assets and liabilities are carried at fair value on
a recurring basis:
financial assets measured at fair value through profit or loss,
financial assets measured at fair value through other
comprehensive income,
-
real estate held for investment,
financial assets for unit-linked contracts
financial liabilities measured at fair value through profit or loss,
unit-linked investment contracts
The following table presents the fair value hierarchy for financial
instruments carried at fair value in the consolidated balance sheet:
Financial Assets
Fair value hierarchy (items carried at fair value)
As of 31 December
2023
2022
Level 11
Level 22
Level 33
Total
Level 1¹
Level 22
Level 33
€ mn
Derivatives
689
13,476
169,021
555
181,875
11,242
164,340
1,561
177,143
MBS/ABS
119
22,290
12,298
3,550
125
21,858
3,014
24,996
Covered Bonds
4,674
38,167
9
42,850
4,175
25,959
Government and government agency bonds
184,456
20,856
949
15,114
1,479
7,716
352
9,547
Subtotal
10,574
25,594
66,148
102,316
11,547
21,048
54,903
87,498
Financial assets measured at fair value through other
comprehensive income
Corporate bonds
4,527
164,992
23,457
192,976
3,248
160,352
10
Disposals through sales and settlements
investments in associates and joint ventures (under the VFA),
Net gains (losses) recognized in consolidated income statement
Reinsurance assets
(162)
1,477
Effective tax rate
22.0%
29.1%
Miscellaneous
145
(179)
During the year ended 31 December 2023, current income taxes
included expenses of € 136 mn (2022: € 344 mn) related to prior years,
and deferred income taxes included income of € 129 mn (2022:
€ 191 mn) related to prior years.
Of the deferred income taxes for the year ended
31 December 2023, income of € 89 mn (2022: expenses of € 1,227 mn) is
attributable to the recognition of deferred taxes on temporary
differences, and income of € 112 mn (2022: € 798 mn) is attributable
to tax losses carried forward. Changes to applicable tax rates due to
changes in tax law led to deferred tax income of € 0 mn (2022: € 2 mn).
For the years ended 31 December 2023 and 2022, the income
taxes relating to components of other comprehensive income consist
of the following:
Items that may never be reclassified to profit or loss
Actuarial gains and losses on defined benefit
plans
Equity investments measured at fair value
through other comprehensive income
Insurance liabilities
Miscellaneous
Total
197
(831)
(657)
758
3,520
(1,443)
(1)
(276)
2,808
(56)
2,096
2,550
(38,721)
204
(7,652)
37,140
(2,808)
Net tax-exempt income
(304)
(142)
Cash flow hedges
(305)
862
Effects of tax losses
(104)
56
Share of other comprehensive income of
associates and joint ventures
1
1
Other effects
36
325
Insurance liabilities
7,476
Effective income taxes
243
The recognized income taxes for the year ended 31 December 2023
are € 129 mn below (2022: € 443 mn above) the expected income
taxes, which are determined by multiplying the respective income
before income taxes with the applicable country-specific tax rates. The
following table shows the reconciliation from the expected income
taxes to the effectively recognized income taxes for the Allianz Group.
The Allianz Group's reconciliation is a summary of the individual
company-related reconciliations, which are based on the respective
country-specific tax rates, taking into consideration consolidation
effects with an impact on the Group result. The applicable tax rate
used in the reconciliation for domestic Allianz Group companies
includes corporate tax, trade tax, and the solidarity surcharge, and
amounted to 31.0 % (2022: 31.0%).
For the year ended 31 December 2023, the write-down of deferred
taxes on tax losses carried forward increased the tax expenses by
€ 33 mn (2022: € 108 mn). The reversal of write-down of deferred tax
assets on tax losses carried forward resulted in deferred tax income of
€ 122 mn (2022: € 24 mn). Due to the use of tax losses carried forward,
for which deferred tax assets had previously been written off, the
current income tax expenses decreased by €0 mn (2022: € 0mn).
Deferred tax income increased by € 16 mn (2022: € 29 mn) due to the
use of tax losses carried forward, for which deferred tax assets had
previously been written off. The aforementioned effects are shown in
the reconciliation statement as "effects of tax losses".
Insurance contract assets/liabilities
20,457
Other assets
2,025
17,984
2,385
Intangible assets
150
148
Tax losses carried forward
2,541
2,379
Pensions and similar obligations
2,066
1,957
Other liabilities
4,152
3,248
Total deferred tax assets
60,034
63,155
Non-recognition or valuation allowance for
35,054
The effective tax rate is determined on the basis of the effective
income tax expenses on income before income taxes.
28,643
Deferred tax assets
The reconciling item "other effects" includes expenses of € 18 mn
(2022: € 29mn) related to the write-down of deferred tax assets on
temporary differences and tax credits. Deferred tax income increased by
€0 mn (2022: €0 mn) due to the reversal of write-down of deferred tax
assets on temporary differences and tax credits.
The tax rates used in the calculation of the Allianz Group's deferred
taxes are the applicable national rates, which in 2023 ranged from 10.0%
to 40.0%, with changes to tax rates that had already been adopted in the
Czech Republic and Türkiye by 31 December 2023 taken into account.
Deferred tax assets on losses carried forward are recognized to
the extent to which it is more likely than not that sufficient future
taxable profits will be available for realization. Entities which suffered
a tax loss in either the current or the preceding period recognized
deferred tax assets in excess of deferred tax liabilities amounting to
€ 4,271 mn (2022: € 3,644 mn), as there was convincing other evidence
that sufficient future taxable profit will be available, including recovery
of assets for more than their carrying amount.
226
Annual Report 2023 - Allianz Group
D_Consolidated Financial Statements
Deferred tax assets and liabilities
Deferred tax assets and liabilities
€ mn
As of 31 December
2023
2022
Tax losses carried forward
Tax losses carried forward at 31 December 2023 of € 9,653 mn (2022:
€ 9,307 mn) resulted in the recognition of deferred tax assets to the
extent that there is sufficient certainty that the unused tax losses will
be utilized. At the reporting date, this prerequisite was considered not
fulfilled for a partial amount of €2,839 mn (2022: € 2,752 mn).
According to tax legislation as of 31 December 2023, an amount of
€2,599 mn (2022: € 2,519 mn) of these tax losses may be carried
forward indefinitely, whereas an amount of € 240 mn (2022: € 233 mn)
of these tax losses carried forward will expire over the next 20 years if
not utilized.
Tax losses carried forward are scheduled according to their expiry
periods as follows:
Tax losses carried forward
situated that have an overall enacted income tax rate of below 15%,
like Bulgaria, Ireland, and Liechtenstein, or in countries with a potential
Pillar Two effective tax rate of below 15 %, like China, Luxembourg, and
Switzerland.
8.5 Earnings per share
Earnings per share are generally calculated by dividing net income
attributable to shareholders by the weighted-average number of
shares outstanding. According to IFRS, the net income attributable to
shareholders was adjusted for net financial charges related to
undated subordinated bonds classified as shareholders' equity.
The Allianz Group recognized net financial charges of € (142) mn
for 2023 (2022: € (119) mn).
For the calculation of diluted earnings per share, the nominator
and denominator are adjusted for the effects of potentially dilutive
shares. These effects arise from various share-based compensation
plans of the Allianz Group.
Investments
Trade tax and similar taxes
Debt investments measured at fair value through
other comprehensive income
(427)
4,027
3,040
Subtotal
(4,322)
(3,384)
Administrative expenses
(1,292)
(1,313)
Investment advisory and banking activities
643
650
Consolidation
Subtotal
4,671
3,691
Total
4,082
(5,487)
3,469
Subtotal
(1,292)
(1,313)
Service agreements
(4,955)
Corporate and Other
(416)
Personnel expenses
(3,061)
(3,108)
Other
63
49
Corporate and Other
Non-personnel expenses 1,2
(1,832)
(3,784)
Subtotal
10,028
10,327
Service agreements
(3,906)
(2,965)
Subtotal
(4,893)
(6,893)
Corporate and Other
Investment advisory and banking activities
(419)
Consolidation
127
110
€ mn
2023
2022
Items that may be reclassified to profit or loss in
future periods
Income before income taxes
11,582
9,664
Applied weighted income tax rate
23.1%
24.5%
Foreign currency translation adjustments
(76)
327
Current income taxes
(2,751)
(2,382)
Expected income taxes
2,679
2,365
Deferred income taxes
Total
201
(2,550)
Income taxes
2022
2023
2022
Consolidation
(4,944)
(4,280)
Total
(9,513)
(11,209)
Total
13,651
13,094
225
deferred tax assets on tax losses carried forward
8.3 Acquisition and administrative
expenses
1_Includes € 202 mn (2022: € (168) mn) changes in assets and € (202) mn (2022: € 168 mn) changes
in liabilities related to certain deferred compensation programs, entirely offsetting each other.
2_For 2022, includes € (1,857) mn for a litigation provision for Structured Alpha. For further
information, please see note 38 to the Annual Report 2022.
Annual Report 2023 - Allianz Group
D_Consolidated Financial Statements
8.4
Income taxes
Income taxes relating to components of other comprehensive income
Effective tax rate
€ mn
€ mn
2023
The acquisition and administrative expenses disclosed in the following
table are the administrative expenses of the Allianz Group's non-
insurance entities and the acquisition and administrative expenses, as
well as settlement costs of the Allianz Group's insurance entities that
are not directly attributable to fulfilling insurance contracts. Expenses
which are directly attributable to fulfilling insurance contracts are
included in insurance service expenses.
(2,116)
(704)
Reclassifications
Receivables
of disposal groups classified as held for sale
409
(1,959)
Write-offs
Gross receivables
8,045
7,189
2023
2022
Expected credit loss
Amortization
(102)
(91)
Financial assets for unit-linked insurance contracts
Financial assets for unit-linked investment contracts
Total
113,383
39,489
152,872
103,524
37,510
141,034
Subtotal
7,943
7,098
Reclassification into non-current assets and assets
Foreign currency translation adjustments
10,354
Subtotal
Real estate held for own use¹
Changes in the consolidated subsidiaries of the
3,434
3,520
Allianz Group
(195)
34
Software
3,493
3,457
Equipment
1,074
1,108
Changes in models and risk parameters and due to
modifications
22
Right-of-use assets
2,214
2,269
Matured or sold
(819)
(23)
(692)
10,216
1,105
80
Tax receivables
4,275
3,930
As of 31 December 2023, the corresponding expected credit loss
amounted to € 102 mn (31 December 2022: € 91 mn).
As of 31 December
2023
Unit-linked investment contracts
39,489
2022
37,510
Total³
29,757
30,234
Non-unit-linked investment contracts
10,196
10,317
Total
49,686
47,827
1_Consists of real estate held for own use measured at fair value of € 1,747 mn (2022: € 1,762 mn)
and of real estate held for own use measured at amortized cost of € 1,688 mn (2022: € 1,757 mn).
2_Includes € 1,548 mn (2022: € 1,295 mn) assets for deferred compensation programs which are
mainly level 2 for fair value measurement.
3_Includes other assets due within one year of € 20,419 mn (2022: € 25,204 mn).
228
Annual Report 2023 - Allianz Group
Other assets²
161
€ mn
1,121
Other changes
1,033
552
31 December
7,209
6,039
Income taxes
2,914
2,345
Other taxes
2,500
2,525
Subtotal
5,414
4,870
Prepaid expenses
788
921
Investment contract liabilities
Non-current assets and assets of disposal groups
classified as held for sale
3,062
640
6,860
6,039
628
714
Unlimited
Other liabilities
3,009
4,183
Total
Total deferred tax liabilities
55,462
Effect of netting
(53,338)
58,261
(56,103)
Net deferred tax liabilities
Net deferred tax assets (liabilities)
2,124
3,868
2,158
4,210
2023
15
44
746
239
Earnings per share
Pensions and similar obligations
2,060
>10 years
1,459
(53,338)
(56,103)
€ mn
Net deferred tax assets
5,992
6,369
Deferred tax liabilities
2024
Investments
20,266
21,629
2025-2026
Insurance contract assets/liabilities
27,536
28,541
2027-2028
Other assets
2,564
1,729
2029-2033
Intangible assets
1,463
€ mn
6,550
2023
Annual Report 2023 - Allianz Group
D_Consolidated Financial Statements
For 2023, the core basic earnings per share and the core diluted
earnings per share amounted to € 22.61 (2022: € 16.96) and
€ 22.59 (2022: € 16.87), respectively.
8.6 Financial assets for unit-linked
contracts and investment contract
liabilities
Financial assets for unit-linked contracts
€ mn
As of 31 December
8.7 Other assets
Other assets
€ mn
As of 31 December
Reconciliation of gross carrying amount for trade and lease
receivables as of 31 December 2023 and 2022
€ mn
2023
2022
1 January
Additions
Property and equipment.
2023
2022
227
The Allianz Group also uses core earnings per share as a measure for
profitability per share. In the determination of core earnings per share,
the net income attributable to shareholders is replaced by the
shareholders' core net income. For further information on the
shareholders' core net income, please refer to note 5.
15.57
15.48
21.20
21.18
2022
9,653
Net income attributable to shareholders -
basic
8,399
Effect of potentially dilutive shares
(6)
6,302
(13)
Net income attributable to shareholders -
diluted
8,393
6,289
(684)
As Allianz is able to control the timing of the reversal of taxable
temporary differences arising from investments in Allianz Group
companies, deferred tax liabilities are only recognized to the extent
these differences will reverse in the foreseeable future. For an amount
of € 4,589 mn (2022: €4,664 mn) no deferred tax liabilities are
recognized, because they will not reverse in the foreseeable future. For
deductible temporary differences arising from investments in
Allianz Group companies in the amount of € 355 mn (2022: € 437 mn)
no deferred tax assets are recognized because it is not probable that
these differences will reverse in the foreseeable future.
Therefore, the Allianz Group has no related current tax exposure.
The Allianz Group applies the exception to recognizing and disclosing
information about deferred tax assets and liabilities related to Pillar
Two income taxes, as provided in the amendments to IAS 12 issued in
May 2023.
The Allianz Group is not expecting any material impacts from the
OECD Pillar Two rules. Impacts are expected in jurisdictions Allianz is
Weighted-average number of shares
outstanding - basic
396,190,104
Potentially dilutive shares
Weighted-average number of shares
outstanding - diluted
125,880
404,793,132
1,467,572
396,315,983
406,260,704
Basic earnings per share (€)
Diluted earnings per share (€)
OECD Pillar Two regulations
Under the Pillar Two legislation, a multinational Group is liable to pay
a top-up tax for the difference between its Pillar Two effective tax rate
per jurisdiction and the 15 % minimum rate. The Allianz Group is within
the scope of the OECD Pillar Two rules. The Pillar Two legislation was
enacted in Germany, the jurisdiction in which Allianz SE as the ultimate
parent entity of the Allianz Group is incorporated, and is applicable
starting from 1 January 2024. As of the reporting date, local Pillar Two
legislations were not applicable in any of the jurisdictions in which
Allianz Group entities are domiciled.
(2,068)
Effect of netting
343
Financial Assets
2023
2022
Level 11
Level 22
Level 33
Total
Level 1¹
Level 22
Level 33
Total
Financial assets measured at amortized costs
4,721
1,278
2,909
8,908
3,915
63
3,936
7,915
Investments in associates and joint ventures at equity
As of 31 December
320
€ mn
Fair value information about financial assets and liabilities not carried at fair value
Changes in the consolidated subsidiaries of the Allianz Group
Change in accrued interest recognized in consolidated income statement
Change in accrued interest recognized in other comprehensive income - cash settlement
Carrying value (fair value) as of 31 December 2023
Net losses (gains) recognized in consolidated income statement held at the reporting date
Financial liabilities measured at fair value
through profit or loss
384
129
688
(75)
76
(1)
2
(10)
18
1,210
1
Fair value measurement on a non-recurring basis
Certain financial assets are measured at fair value on a non-recurring
basis when events or changes in circumstances indicate that the
carrying amount may not be recoverable.
If financial assets are measured at fair value on a non-recurring
basis at the time of impairment, or if fair value less cost to sell is used
as the measurement basis under IFRS 5, corresponding disclosures can
be found in note 7.1.
221
Annual Report 2023 - Allianz Group
D_Consolidated Financial Statements
Fair value hierarchy (items not carried at fair value)
3,065
3,385
398
4,682
4,745
20,080
10,333
4,249
4,481
19,063
7,939
199
8,138
8,287
203
8,490
12,258
2,273
12,258
2,273
10,937
10,937
1,882
1,882
713
11,367
10,653
3_Non-market observable inputs.
2 Market observable inputs.
1_Quoted prices in active markets.
2,083
2,481
Real estate held for investment
Total
5,753
5,753
5,812
5,812
4,721
1,598
11,727
Foreign currency translation adjustments
18,046
462
11,831
16,208
Financial Liabilities
Financial liabilities measured at amortized costs
Liabilities to banks and customers
Certificated liabilities
Subordinated liabilities
Other (Financial liabilities measured at amortized costs)
Non-unit-linked investment contracts5
Total
3,915
9,413
Disposals through sales and settlements
Additions through purchases and issues
655
1,132
625
34,673
589
(1,429)
5
18
(0)
26
(3,265)
(8,186)
(260)
(1,400)
(669)
(377)
(791)
(14,157)
67
67
(1,215)
(47)
206,572
18
2,210
20,155
Subtotal
Net gains (losses) recognized in other comprehensive income
Impairments
Foreign currency translation adjustments
Changes in the consolidated subsidiaries of the Allianz Group²
Change in accrued interest recognized in consolidated income statement
Change in accrued interest recognized in other comprehensive income - cash settlement
Carrying value (fair value) as of 31 December 2023
54,903
100,704
14,798
17,024
Financial assets
measured at fair
value through profit
Financial assets
measured at fair
value through other
comprehensive
income-Debt
securities¹
Financial assets
measured at fair
value through other
comprehensive
income Equity
securities
5,285
439
Investments in
associates and joint
ventures
Real estate held for
investment
Financial assets for
unit-linked contracts
Total
23,314
(1,185)
(2,272)
11
66,148
108,103
5,051
18,059
Net gains (losses) recognized in consolidated income statement held at the reporting date
(1,007)
(60)
27
(1,182)
21,208
(2,309)
2,368
11
220,937
(4,521)
1 Primarily include loans.
2_Include for real estate held for investment reclassifications into non-current assets and assets of disposal groups classified as held for sale of € (542) mn.
220
Annual Report 2023 - Allianz Group
D_Consolidated Financial Statements
Reconciliation of level 3 financial liabilities
€ mn
Carrying value (fair value) as of 1 January 2023
(2,730)
(0)
(2,634)
(96)
(4,691)
1,916
(276)
1,640
(11)
(11)
(191)
(1,231)
(25)
(184)
Net transfers into (out of) level 3
177
(1,453)
675
(721)
(135)
(542)
(127)
(850)
(50)
2,717
2,668
1
63
Net losses (gains) recognized in consolidated income statement
7,279
Non-attributable and non-insurance administrative
Investment advisory
61
1
Other
(35)
expenses
(1,093)
(959)
Non-attributable settlement costs
(83)
(20)
Subtotal
Life/Health
2,534
2,392
Subtotal
(2,547)
(2,353)
Subtotal
(2,266)
(635)
Life/Health
(644)
704
2022
Acquisition and administrative expenses
€ mn
2023
2022
2023
2022
Property-Casualty
Property-Casualty
Property-Casualty
Fees from credit and assistance business
1,807
1,687
Fees from credit and assistance business
(1,868)
(1,718)
Non-attributable acquisition costs
(1,090)
(955)
Service agreements
665
Service agreements
Investment advisory
1,161
747
(23)
(18)
Management and advisory fees
8,821
9,461
Commissions
(2,057)
(2,103)
Subtotal
(1,189)
(1,180)
Performance fees
817
474
Other
(12)
(14)
Asset Management
Loading and exit fees
34,292
327
Non-attributable settlement costs
Asset Management
Asset Management
(666)
Investment advisory
(428)
(342)
Life/Health
Non-attributable acquisition costs
(509)
(495)
Service agreements
200
217
2023
Service agreements
(229)
Non-attributable and non-insurance administrative
Subtotal
1,362
964
Subtotal
(631)
(571)
expenses
(657)
(203)
€ mn
(1,934)
Fee and commission expenses
For loans measured at fair value through other comprehensive
income, quoted market prices are rarely available. Level 1 mainly
consists of highly liquid advances, e.g., short-term investments. The fair
value for assets in level 2 and level 3 is mainly derived based on the
income approach using deterministic discounted cash flow models.
Financial assets measured at amortized costs only include debt
investments. For the valuation measurement please refer to the
passage debt investments.
Associates and joint ventures
For level 2 and level 3, fair values are mainly based on the income
approach, using a discounted cash flow method or net asset values as
provided by third-party vendors.
Real estate held for investment
Fair values are mostly determined using the market or the income
approach. Valuation techniques applied for the market approach
include market prices of comparable assets in markets that are not
active. The fair values are either calculated internally and validated by
external experts or derived from expert appraisals with internal
controls in place to monitor these valuations.
Financial assets for unit-linked contracts
For level 2, the fair value is determined using the market or the income
approach. Valuation techniques applied for the income approach
mainly include discounted cash flow models as well as the Black-
Scholes-Merton model.
Financial liabilities
Financial liabilities measured at fair value through profit or
loss
This position mainly includes derivative financial instruments.
For level 2, the fair value is determined using the income or the
market approach. Valuation techniques applied for the income
approach mainly include discounted cash flow models as well as the
Black-Scholes-Merton model. Main observable input parameters
include volatilities, yield curves observable at commonly quoted
intervals, and credit spreads observable in the market.
For level 3, the fair value is determined using the income or the
market approach. Valuation techniques applied for the income
approach mainly include discounted cash flow models. A significant
proportion of level 3 liabilities represent derivatives embedded in
certain life insurance and annuity contracts. Significant non-market
observable input parameters include mortality rates and surrender
rates. A significant decrease (increase) in surrender rates, in mortality
rates, or in the utilization of annuitization benefits could result in a
higher (lower) fair value. For products with a high death benefit,
surrender rates may show an opposite effect.
Liabilities to banks and customers
Level 1 mainly consists of highly liquid liabilities, e.g., payables on
demand. The fair value for liabilities in level 2 and level 3 is mainly
derived based on the income approach, using future cash flows
discounted with risk-specific interest rates. Main non-market
observable inputs include credit spreads. In some cases, the carrying
amount (amortized cost) is considered to be a reasonable estimate of
the fair value.
Certificated and subordinated liabilities
For level 2, the fair value is mainly determined based on the market
approach, using quoted market prices, and based on the income
approach, using present value techniques. For level 3, fair values are
mainly derived based on the income approach, using deterministic
cash flows with credit spreads as primary non-market observable
inputs. In some cases, the carrying amount (amortized cost) is
considered to be a reasonable estimate for the fair value.
Unit-linked investment contracts at fair value
Financial liabilities for unit-linked investment contracts are valued
based on their corresponding financial assets for unit-linked
investment contracts.
Non-unit-linked investment contracts at cost
The fair value for non-unit-linked investment contracts in level 2 is
mainly derived based on the income approach, using future cash flows
discounted with risk-specific interest rates. Main non-market
observable inputs include credit spreads. In some cases, the carrying
amount (amortized cost) is considered to be a reasonable estimate of
the fair value.
Loans measured at fair value through other comprehensive
income
Significant transfers of financial instruments
carried at fair value
observable at commonly quoted intervals. In some cases, the fair value
is determined based on the market approach.
Annual Report 2023 - Allianz Group
10,189
52,937
10,333
2,771
26,244
7,546
10,317
14,112
50,689
4_The increase within Level 2 compared to 31 December 2022 is mainly driven by the reassessment and the underlying reclassification by Allianz Bulgaria.
5_The increase in Level 2 fair values is mainly driven by an improved valuation for a German investment product.
Valuation methodologies of financial instruments
Financial assets
Debt investments in fair value through profit or loss and in fair
value through other comprehensive income
Debt investments are part of financial assets measured at fair value
through profit or loss and financial assets measured at fair value
through other comprehensive income which include corporate and
government and government agency bonds, MBS/ABS, covered
bonds, and other debt investments.
The valuation techniques for these debt investments are similar.
The fair value is determined using the market and the income
approach. Primary inputs for the market approach are quoted prices
for identical or comparable assets in active markets, where
comparability between the security and the benchmark defines the
fair value level. The income approach in most cases means that a
present value technique is applied where either the cash flows or the
222
discount curve are adjusted to reflect credit risk and/or liquidity risk.
Depending on the observability of these risk parameters in the market,
the security is classified as level 2 or level 3.
Level 3 investments are mainly priced based on the income
approach. The primary non-market observable input used in the
discounted cash flow method is an option-adjusted spread taken from
a set of benchmark securities with similar characteristics. A significant
yield increase of the benchmark securities in isolation could result in a
decreased fair value, while a significant yield decrease could result in
an increased fair value. However, a 10% stress of the main non-market
observable inputs has only immaterial impact on fair value.
Equity investments in fair value through other comprehensive
income and funds
For level 2, the fair value is mainly determined using the market
approach or net asset value techniques for funds.
Level 3 mainly comprises private equity fund investments as well
as alternative investments of the Allianz Group, and in most cases
these are delivered as net asset values by the fund managers. These
net asset values are calculated using material, non-public information
about the respective private equity companies. The Allianz Group has
only limited insight into the specific inputs used by the fund managers,
hence a sensitivity analysis is not applicable. The fund's asset manager
generally prices the underlying single portfolio companies in line with
the International Private Equity and Venture Capital Valuation (IPEV)
guidelines, using discounted cash flow (income approach) or multiple
methods (market approach). For certain investments, the capital
invested is considered to be a reasonable proxy for the fair value. In
these cases, sensitivity analyses are also not applicable.
Derivatives
The fair value of these derivatives is mostly determined based on the
income approach, using present value techniques and the Black-
Scholes-Merton model. Primary inputs for the valuation include
volatilities, interest rates, yield curves and foreign exchange rates
D_Consolidated Financial Statements
In general, financial assets and liabilities are transferred from level 1
to level 2 when their liquidity, trade frequency, and activity are no
longer indicative of an active market. The same policy applies
conversely for transfers from level 2 to level 1.
Financial assets measured at amortized cost
€ mn
Collaterals with right to resell or repledge
Investments carried at fair value through other
comprehensive income
1,768
3,031
Subtotal
1,768
3,031
13,128
14,063
Financial assets are pledged as collateral as part of sales and
repurchases, securities borrowing, and transactions with derivatives,
under terms that are usual and customary for such activities.
In addition, as part of these transactions, the Allianz Group has
received collateral that it is permitted to sell or repledge in the absence
of default. As of 31 December 2023, the Allianz Group received
collateral consisting of fixed income and equity securities with a fair
value of € 9,644 mn (2022: € 9,351 mn), which the Allianz Group has
the right to sell or repledge. For the years ended 31 December 2023
and 2022, no previously received collateral was sold or repledged by
the Allianz Group.
224
Annual Report 2023 - Allianz Group
D_Consolidated Financial Statements
8
OTHER INFORMATION
-
8.1 Fee and commission income
Fee and commission income
Transfers into/out of level 3 may occur due to a reassessment of
input parameters.
8.2 Fee and commission expenses
11,031
11,360
Total
133
Transfers of financial assets carried at fair value
As of 31 December 2023, the Allianz Group substantially retained all
the risks and rewards from the ownership of transferred assets. There
have not been any transfers of financial assets that were derecognized
in full or partly in which Allianz continues to control the transferred
assets. Transfers of financial assets mainly relate to securities lending
and repurchase agreement transactions. Financial assets transferred
in the context of repurchase agreement and securities lending
transactions are mainly debt and equity securities held at fair value
through other comprehensive income for which substantially all of the
risks and rewards are retained. As of 31 December 2023, the carrying
amount of the assets transferred for securities lending transactions
amounted to € 6,329 mn (2022: € 8,008 mn). For repurchase
agreements, the carrying amount of the assets transferred amounted
to € 183 mn (2022: € 217 mn), and the carrying amount of the
associated liabilities amounted to € 183 mn (2022: € 217 mn).
Subtotal
Annual Report 2023 - Allianz Group
D_Consolidated Financial Statements
Assets pledged as collateral
The carrying amounts of the assets pledged as collateral are displayed
in the following table:
Assets pledged as collateral
€ mn
As of 31 December
2023
2022
223
Investments carried at fair value through other
comprehensive income
Collaterals without right to resell or repledge
Investments carried at amortized cost
10,215
10,276
161
683
922
Investments carried at fair value through profit or
loss
Insurance German Speaking Countries, including Germany and
Switzerland,
For further information, please see note 3.
CGUS in the Property-Casualty business segment are:
For the purpose of impairment testing, the Allianz Group has allocated
goodwill to CGUs¹. These CGUs represent the lowest level at which
goodwill is monitored for internal management purposes.
Allocation principles
Impairment test for goodwill
For further information, please see note 4 to the Annual Report
2022.
Insurance Western & Southern Europe, including Belgium, France,
Greece, Italy, Luxembourg, the Netherlands, and Türkiye,
Additions are mainly related to goodwill arising from the acquisitions
of simplesurance GmbH, Berlin, European Reliance General Insurance
Company S.A., Chalandri, and Aqua Holdings (Thailand) Company
Limited, Bangkok. Disposals are mainly related to the sale of Mercato
Leadmanagement Investments Holdings GmbH, Berlin, and from the
transfer of business from Allianz Global Investors U.S. LLC, Dover
(Delaware) to Voya Investment Management LLC, Atlanta.
2022
18,442
320
2_Primarily results from business combinations.
1 Primarily includes the long-term distribution agreements with Banco Bilbao Vizcaya Argentaria,
S.A., and Santander Aviva Life.
18,649
Total
320
691
Other²
Insurance Asia Pacific, including Australia, Indonesia, Malaysia, Sri
Lanka, and Thailand,
656
Additions are mainly related to goodwill arising from the acquisitions
of Innovation Group Holdings Limited, Whiteley, and Incontra
Assicurazioni S.p.A., Milan.
Insurance Iberia & Latin America, including Mexico, Portugal,
South America, and Spain,
593
Global Insurance Lines & Anglo Markets, Middle East and Africa,
including Ireland, the United Kingdom, Middle East and Africa,
Specialty Lines I, including Allianz Commercial, Allianz Re, and
Allianz Trade, and
Insurance Western & Southern Europe
Customer relationships²
732
Insurance German Speaking Countries
2022
2023
Property-Casualty
As of 31 December
€ mn
Allocation of carrying amounts of goodwill to CGUS
Insurance Central & Eastern Europe, including Austria, Bulgaria,
Croatia, Czech Republic, Hungary, Poland, Romania, and
Slovakia,
D_Consolidated Financial Statements
230
1_The following paragraphs only include the CGUS that contain goodwill.
The carrying amounts of goodwill are allocated to the
Allianz Group's CGUS as of 31 December 2023 and 2022 as follows:
The business segment Corporate and Other mainly includes
Digital Investments.
The business segment Asset Management is represented by the CGU
Asset Management, mainly including Allianz Global Investors and
PIMCO.
Global Insurance Lines & Anglo Markets, Middle East and Africa,
including Ireland, the United Kingdom, Middle East and Africa, and
US Life Insurance.
Insurance Western & Southern Europe, including Belgium, France,
Greece, Italy, Luxembourg, the Netherlands, and Türkiye,
Insurance Central & Eastern Europe, including Austria, Bulgaria,
Croatia, Czech Republic, Hungary, Lithuania, Poland, Romania,
and Slovakia,
Insurance German Speaking Countries, including Germany and
Switzerland,
CGUS in the Life/Health business segment are:
Specialty Lines II, including Allianz Direct and Allianz Partners.
Annual Report 2023 - Allianz Group
2022
16,255
1,176
Pensions and similar obligations
Distribution agreements¹
309
151
Restructuring plans
(152)
Accumulated impairments as of 31 December¹
369
495
Share-based compensation plans
(115)
16,255
16,621
Cost as of 31 December
Carrying amount as of 31 December
3,124
Employee related
(17)
Reclassifications
7,994
431
8,669
Provisions
1,442
Impairments
3,092
2023
16,621
1,052
16,773
Other provisions
Goodwill
As of 31 December
€ mn
Intangible assets
8.9 Intangible assets
1_Includes other liabilities due within one year of € 19,756 mn (2022: € 23,350 mn).
2023
34,810
34,328
Total¹
(292)
16,547
12,278
Other liabilities
2,842
332
Liabilities of disposal groups held for sale
14,418
15,088
Subtotal
1_Decrease due to the disposal of the Russian insurance operations.
2,654
2,649
13,022
1,345
9.0
717
0.4
7.6
0.5
Eternal
growth rate
rate
Discount
Eternal
rate growth rate
Discount
2022
2023
%
Discount rates and eternal growth rates for the CGUS
in the Property-Casualty business segment¹
The discount rate is based on the capital asset pricing model
(CAPM) and appropriate eternal growth rates. The assumptions,
including the risk-free interest rate, market risk premium, segment
beta, and leverage ratio used to calculate the discount rates, are
generally consistent with the parameters used in the Allianz Group's
planning and controlling process. The discount rates and eternal
growth rates for the CGUs in the Property-Casualty business segment
are as follows:
For entities included in the CGUS of the Property-Casualty
business segment, the business plans are mainly based on key
assumptions including expense ratio, loss ratio, investment income, risk
capital, market share, premium rate changes, and taxes. The bases for
determining the values assigned to the key assumptions are current
market trends and earnings projections.
In determining the business plans, certain key assumptions were made
in order to project future earnings.
Significant assumptions
In the Corporate and Other business segment, the value in use in
the Digital Investments is derived by using the discounted cash flow
and multiple method. Discounted cash flows are calculated based on
the companies' business plan as well as an estimate of sustainable
returns and eternal growth rates (terminal value). The discounted
earnings value is calculated by discounting the future earnings using
an appropriate discount rate. For the multiple method, transactions
and revenues of comparable companies are used.
The implementation of IFRS 9 and 17 standards is a fundamental
new development in the financial reporting process for insurance
entities. Considering the key advantages of these standards for
insurance entities, the Allianz Group changed the input basis for the
value in use calculation to the IFRS balance sheet for year-end 2023.
The change in the input assumption from embedded value or
appraisal value to an IFRS balance sheet basis is recognized as an
IAS 8 change of estimate.
In 2023 for all CGUS in the Life/Health business segment, the value
in use is mainly derived from the IFRS net asset value (NAV), a New
Business Value calculation (VNB), and a multiple of the value of New
Business. For valuation purposes, the Allianz Group defines the NAV as
the sum of the IFRS total equity without goodwill plus the CSM net of
tax, net of reinsurance and net of the present value of non-attributable
costs. This NAV reflects the in-force value including expected profits in
the form of CSM. As it is based on the IFRS balance sheet, the NAV
reflects a market consistent valuation in line with core steering
measures applied at the Allianz Group, in particular (net) CSM and
VNB.
In the prior years, the value in use for all CGUS in the Life/Health
business segment was mainly based on an Appraisal Value method
which was derived from the Market Consistent Embedded Value and
a multiple of the New Business Value (VNB) calculation.
The terminal values are largely based on the expected profits of
the final year of the detailed planning period. Where necessary, the
planned profits are adjusted to reflect long-term sustainable earnings.
The financing of the assumed eternal growth in the terminal values is
accounted for by appropriate profit retention.
Insurance German
Speaking Countries
Insurance Western &
Southern Europe
Insurance Asia
Pacific
8.1
10.1
1.7
Specialty Lines I
23
9.0
1.0
1.4
9.2
and Africa
Markets, Middle East
1.8
9.8
entities in connection with a reporting process integrated into these
dialogues. Generally, the business plans comprise a planning horizon
of three years and are based on the current market environment.
Insurance Central &
Eastern Europe
Global Insurance
Lines & Anglo
11.1
3.6
15.1
Insurance Iberia &
Latin America
2.0
9.7
1.5
9.6
0.5
7.9
2.7
For all CGUS in the Property-Casualty business segment and for
the CGU Asset Management, the Allianz Group mainly uses the
discounted earnings method to derive the value in use. Generally, the
basis for the determination of the discounted earnings value is the
business plan ("detailed planning period") as well as the estimate of
the sustainable returns and eternal growth rates, which can be
assumed to be realistic on a long-term basis ("terminal value") for the
operating entities included in the CGU. The discounted earnings value
is calculated by discounting the future earnings using an appropriate
discount rate. The business plans applied in the value in use
calculations are the results of the structured management dialogues
between the Board of Management of Allianz SE and the operating
The recoverable amounts for all CGUs are determined on the basis of
value in use calculations. The Allianz Group applies generally
acknowledged valuation principles to determine the value in use.
Valuation techniques
Insurance German Speaking Countries
Life/Health
4,791
4,988
Subtotal
411
411
Specialty Lines II
39
39
995
Specialty Lines |
737
East and Africa
Global Insurance Lines & Anglo Markets, Middle
480
494
Insurance Central & Eastern Europe
398
416
Insurance Iberia & Latin America
235
1,290
Insurance Asia Pacific
979
712
Total
Corporate and Other
Asset Management
Subtotal
US Life Insurance
84
16,255
221
16,621
7,543
7,419
3,837
Insurance Western & Southern Europe
3,993
465
9
East and Africa
Global Insurance Lines & Anglo Markets, Middle
1,684
1,812
Insurance Central & Eastern Europe
10
Insurance Asia Pacific
672
13
479
Foreign currency translation adjustments
Real estate
672
34
Changes in the consolidated subsidiaries of the Allianz Group
453
273
956
126
52
207
283
1,033
181
65
Additions
2,339
1,179
3,377
1,415
2,138
2,269
1,108
3,457
5
5
27
20
6
(1)
306
(342)
(35)
(12)
(6)
9
(14)
Reclassifications
1,762
(113)
(96)
(69)
180
(24)
(39)
(28)
(50)
Disposals and reclassifications into non-current assets and assets of disposal groups classified as held for
sale
1
6
(60)
1,757
(1,168)
(2,703)
at fair value
cost¹
use
at
Right-of-
own use
measured
amortized
at
held for
Real estate
Software²
held for
own use
measured
Real estate
held for
own use
measured
2022
Real estate
2023
€ mn
Property and equipment
Property and equipment
1.2
D_Consolidated Financial Statements
held for
(13)
Equipment
amortized
cost
(6,654)
(675)
(1,396)
(2,785)
(7,259)
(750)
3,507
3,882
10,031
2,812
assets³
3,665
10,716
2,508
Carrying amount as of 1 January
Accumulated depreciation/amortization as of 1 January
Cost as of 1 January
use
assets
Equipment
Software
Right-of-
own use
measured
at fair value
3,893
610
Foreign currency translation adjustments
9
2022
2023
2022
2023
€ mn
Goodwill
Income taxes
Tax payables
As of 31 December
€ mn
Other liabilities
8.8 Other liabilities
Goodwill
D_Consolidated Financial Statements
Annual Report 2023 - Allianz Group
229
1_As of 31 December 2023, assets pledged as security and other restrictions on title were € 89 mn (2022: € 96 mn).
2_Carrying amount as of 31 December 2023, includes € 2,996 mn (2022: €2,911 mn) for self-developed software and € 497 mn (2022: € 546 mn) for software purchased from third parties.
3_Consists mainly of real estate.
(1,396)
3,665
(2,785)
3,893
10,716
2,508
Cost as of 1 January
16,547
16,237
1,980
Unearned income
(241)
Disposals
804
873
Payables for social security and other payables
235
360
Additions
3,858
3,766
4,341
15,945
16,255
Carrying amount as of 1 January
2,115
2,361
Other taxes, interest, and penalties
(292)
(292)
Accumulated impairments as of 1 January
1,743
Subtotal
3,999
11,286
(7,259)
Accumulated depreciation/amortization as of 31 December
Carrying amount as of 31 December
Changes in fair value
Reversals of impairments
Impairments
(416)
(301)
(766)
(57)
(385)
(11)
(279)
(53)
Depreciation/Amortization
27
3
2
7
17
(13)
(2)
(4)
(822)
(6)
(160)
(16)
(750)
(1,552)
(2,925)
(7,793)
(747)
2,435
Cost as of 31 December
2,269
1,108
3,457
1,762
(5)
1,757
1,074
3,493
1,747
1,688
(92)
(186)
2
(10)
(36)
(8)
2,214
8.3
The Allianz Group is a financial conglomerate within the scope of
the Financial Conglomerates Directive (FCD). The FCD does not
impose a materially different capital requirement on Allianz Group
compared to Solvency II.
Specialty Lines II
3,104
8,126
2023
As of 1 January
€ mn
Reconciliation of gross carrying amount for financial guarantees and
commitments to purchase debt investments as of 31 December 2023
and 2022
Total
Other commitments
36,605
8,072
4,164
48,841
3,465
46,194
7,383
Commitments to purchase debt investments
35,346
associates and equity investments
Commitments to acquire interests in joint ventures,
2023
As of 31 December
€ mn
Commitments
2022
0.7
2022
6,283
2,713
Additions
Changes in the consolidated subsidiaries of the
Allianz Group
Changes in models and risk parameters and due to
8.14 Hyperinflationary economies
The insurance guarantee scheme for life insurers levies annual
contributions and, under certain circumstances, special contributions.
As of 31 December 2023, the future liabilities of Allianz
Lebensversicherungs-AG and further subsidiaries of Allianz SE to the
insurance guarantee scheme pursuant to the SichLVFinV amount to
annual contributions of €32.1mn (2022: € 4.8 mn) and potential
special contributions of, in principle, € 357 mn (2022: € 303 mn) per
year. In addition, Allianz Lebensversicherungs-AG and further
subsidiaries have assumed a contractual obligation to provide, if
required, further funds to Protektor Lebensversicherungs-AG
("Protektor"), a life insurance company that has assumed the task of
the mandatory insurance guarantee scheme for life insurers. Such
obligation is, in principle, based on a maximum of 1% of the sum of the
net underwriting reserves with deduction of payments already
provided to the insurance guarantee scheme. As of
31 December 2023, and under inclusion of the contributions to the
mandatory insurance scheme mentioned above for a limited period of
time, and assuming that no other life insurer is exempted from
payments, the aggregate outstanding commitment of Allianz
Lebensversicherungs-AG and further subsidiaries to the insurance
guarantee scheme and to Protektor is € 3,243 mn (2022: € 2,734 mn).
Pursuant to §§221 et seq. of the German Insurance Supervision
Act ("Versicherungsaufsichtsgesetz VAG"), mandatory insurance
guarantee schemes ("Sicherungsfonds") for life insurers as well as for
health insurers are implemented in Germany, which are financed
through their member undertakings.
Any material contingent liabilities resulting from litigation matters are
captured in the litigation section above.
Other contingencies
8,126
8,186
As of 31 December
703
(2,011)
1,593
Other changes
(91)
Foreign currency translation adjustments
Amortization
Write-offs
(34)
Reclassifications between stages
(1,590)
(942)
Matured or sold
modifications
51
Subsidiaries of the Allianz Group that operate in Türkiye and Argentina
have to apply hyperinflation accounting in accordance with IAS 29.
Total
790
2022
2023
1_Includes base salary, perquisites as well as short-term annual bonus.
Total
Share-based payment
Post-employment benefits
Short-term employee benefits¹
As of 31 December
€ mn
Remuneration of the Board of Management (expenses of the year)
The following table shows the remuneration of the Board of
Management:
contractual vesting period.
deferred sustainability assessment following the four-year commitments, and other contingencies
Litigation, guarantees,
8.13
For information on the formation of the partnership with Sanlam
Ltd., please see note 3.
Business relations with joint ventures and associates are set on an
arm's length basis and are mainly related to loans (please refer to
note 7.2.4) and reinsurance agreements.
Transactions between Allianz SE and its subsidiaries that are to be
deemed related parties have been eliminated in the consolidation and
are not disclosed in the notes.
Other related party transactions
The fixed remuneration component comprises the base salary,
perquisites (e.g., contributions to accident and liability insurances,
tax consultant fees, and a company car) and pension
contributions. The pension contributions of the company to the
current defined contribution pension plan "My Allianz Pension" are
generally 15% of the target remuneration of the Board members.
The performance-based variable remuneration includes the short-
term annual bonus and long-term share-based remuneration. The
long-term, share-based compensation (Long-Term Incentive - LTI)
is based on the performance in absolute and relative terms (i.e.,
versus competitors) of the Allianz share. Furthermore, the long-
term development of key performance indicators is reflected in the
-
21
23
5
6
Non-financial guarantees
54
803
Financial guarantees
2022
2023
As of 31 December
€ mn
Guarantees
Guarantees and commitments
929
D_Consolidated Financial Statements
236
In January 2023 a putative class action complaint has been filed
against Allianz SE and, in its amended version, against AllianzGI U.S. in
the United States District Court for the Central District of California. The
complaint alleges violation of Federal U.S. Securities Laws by making
false or misleading statements in public disclosures such as the annual
reports of Allianz in the period between March 2018 and May 2022
regarding the AllianzGI U.S. Structured Alpha matter and internal
controls. Allianz SE considers the action to be unfounded.
Allianz Group companies are involved in legal, regulatory, and
arbitration proceedings in Germany and a number of foreign
jurisdictions, including the United States. Such proceedings arise in the
ordinary course of business, including, amongst others, their activities
as insurance, banking and asset management companies, employers,
investors and taxpayers. While it is not feasible to predict or determine
the ultimate outcome of such proceedings, they may result in
substantial damages or other payments or penalties, or result in
adverse publicity and damage to the Allianz Group's reputation. As a
result, such proceedings could have an adverse effect on the
Allianz Group's business, financial condition and results of operations.
Apart from the proceedings discussed below, Allianz SE is not aware
of any threatened or pending legal, regulatory or arbitration
proceedings which may have, or have had in the recent past,
significant effects on its and/or the Allianz Group's financial position or
profitability. Material proceedings in which Allianz Group companies
are involved include in particular the following:
Litigation
The remuneration for the Supervisory Board of Allianz SE consists
of a fixed remuneration, committee-related remuneration, as well as
attendance fees and reimbursement of expenses. These are
considered as short-term employee benefits. For the year ended
31 December 2023, the remuneration of the members of the
Supervisory Board was € 4 mn (2022: € 3 mn).
Existing provisions are mainly related to post-employment benefits
and share-based payment. As of 31 December 2023, reserves for
pensions and similar benefits for active members of the Board of
Management amounted to € 35 mn (2022: € 35 mn). Provisions for
share-based payment amounted to € 47 mn (2022: € 40 mn).
46
54
17
28
Annual Report 2023 - Allianz Group
In applying IAS 29, the Allianz Group has adopted the accounting
policy to present the combined effect of the restatement in accordance
with IAS 29 and the translation according to IAS 21 as a net change for
the year in other comprehensive income.
The identities and levels of the price indices applied by the
operating entities concerned are as follows:
Hyperinflationary economies
322
3,063
2,730
329
3,059
1,225
131
1,356
1,111
133
1,244
1,142
143
1,285
1,159
145
1,303
373
48
421
461
2,740
Operating leases - maturities for the future minimum lease payments
€ mn
As of 31 December
Annual Report 2023 - Allianz Group
5,181
5,909
1,690
1,730
496
502
Between 4 and up to 5 years
More than 5 years
Total
599
765
51
Between 3 and up to 4 years
855
Between 2 and up to 3 years
778
948
Between 1 and up to 2 years
916
1,110
One year and less
2022
2023
702
512
payments
Interest
As a lessee
The Allianz Group occupies property in many locations under various
long-term leases and has entered into various leases covering the
long-term use of data processing equipment and other office
equipment.
8.15 Lease arrangements
D_Consolidated Financial Statements
Annual Report 2023 - Allianz Group
237
As of 31 December 2023, the corresponding expected credit loss
amounted to € 28 mn (2022: € 28 mn).
Overall, for the year ended 31 December 2023, the application of
hyperinflation accounting according to IAS 29 had a negative impact
on net income of € (264) mn (2022: € (282) mn). This also includes an
impact from the Lebanese business operations which were sold on
3 July 2023.
1,134.59
3,533.19
As of 31 December 2023, the maturities for lease liabilities were as
follows:
Consumer Price Index
published by the Argentinian
Statistical Institute
1,128.45
1,859.38
(TURKSTAT)
Statistical Institute
Consumer Price Index
published by the Turkish
As of
31 December
2022
31 December
2023
As of
Index
Türkiye
Argentina
-
Maturities for lease liabilities
As of 31 December
lease
minimum
value of
Present
Future
minimum
lease
payments
value of
minimum
lease
payments
Interest
payments
Future
minimum
lease
Present
€ mn
2022
238
As of 31 December 2023, the maturities for the future minimum
lease payments of operating leases were as follows:
The Allianz Group leases out its investment properties (see
note 7.2.1) under operating leases because they do not transfer
substantially all of the risks and rewards incidental to the ownership of
the assets. Investment property comprises a number of commercial
properties that are leased to third parties.
For the year ended 31 December 2023, the lease income for operating
leases amounted to € 1,270 mn (2022: € 1,271 mn).
As a lessor
For the year ended 31 December 2023, the total cash outflow for
leases amounted to € 516 mn (2022: € 635 mn).
Total
More than five years
Between one and five years
Less than one year
2023
The remuneration of the Board of Management consists of a fixed
remuneration component and a performance-based remuneration
component:
983
Remuneration of the Board of Management and
Supervisory Board
Total number of issued shares
Treasury shares¹
Number of issued shares outstanding as of
31 December
Changes in number of treasury shares
Cancellation of issued shares
Number of issued shares outstanding as of 1
January
Number of issued shares outstanding
Changes in the number of issued shares outstanding
As of 31 December 2023, Allianz SE had conditional capital totaling
€ 117 mn (Conditional Capital 2022). This conditional capital
increase shall be carried out only if conversion or option rights
attached to bonds (including participation rights) which Allianz SE or
its Group companies have issued against cash payments according to
the resolutions of the Annual General Meeting (AGM) on 4 May 2022
are exercised, or the conversion obligations under such bonds are
fulfilled, and only to the extent that the conversion or option rights or
conversion obligations are not serviced through treasury shares or
through shares from authorized capital.
Conditional capital
In addition, Allianz SE has authorized capital (Authorized Capital
2022/11) for the issuance of new shares against contributions in cash
until 3 May 2027. The shareholders' subscription rights are excluded.
The new shares may only be offered to employees of Allianz SE and
its Group companies. As of 31 December 2023, the Authorized Capital
2022/11 amounted to € 15 mn.
this limitation, provided that the sale occurs during the term of this
authorization, subject to the exclusion of subscription rights in the
corresponding application of § 186 (3) sentence 4 AktG. Furthermore,
such shares shall count towards this limitation that are to be issued
to service bonds (including participation rights) with conversion or
option rights and/or conversion obligations, provided that these
bonds (including participation rights) were issued during the term of
this authorization, subject to exclusion of subscription rights in the
corresponding application of § 186 (3) sentence 4 AktG. The
subscription rights for new shares from the Authorized Capital 2022/1
and the Conditional Capital 2022 may only be excluded for the
proportionate amount of the share capital of up to € 117 mn
(corresponding to 10% of the share capital at year-end 2023).
D_Consolidated Financial Statements
Annual Report 2023 - Allianz Group
232
1_Mathematical per-share value € 2.99 (rounded).
As of 31 December 2023, Allianz SE had authorized capital with a
notional amount of € 468 mn for the issuance of new shares until
3 May 2027 (Authorized Capital 2022/1). The shareholders'
subscription rights can be excluded for capital increases against
contribution in kind. For a capital increase against contributions in
cash, the subscription rights can be excluded: (i) for fractional
amounts, (ii) to the extent necessary to grant a subscription right for
new shares to the holders of bonds that carry conversion or option
rights or provide for mandatory conversion, and (iii) if the issue price
is not significantly below the market price and the shares issued
under exclusion of the subscription rights pursuant to § 186 (3)
sentence 4 of the German Stock Corporation Act (Aktiengesetz) do
not exceed 10% of the share capital, neither on the date on which
this authorization takes effect nor on the date of exercise of this
authorization. The sale of treasury shares shall be counted towards
Authorized capital
Issued capital as of 31 December 2023 amounted to € 1,170 mn,
divided into 391,718,983 fully paid registered shares. The shares have
no-par value but a mathematical per-share value as a proportion of
the issued capital.¹
Issued capital
1_As of 31 December 2023, includes € (38) mn (2022: € (333) mn) related to treasury shares.
2_As of 31 December 2023, includes € 844 mn (2022: € 1,059 mn) related to expected credit losses.
3_As of 31 December 2023, includes € (818) mn (2022: € (1,460) mn) related to cash flow hedges.
58,735
2023
2022
401,589,162
1,464,440
(11,595,013)
408,219,153
(1,486,114)
(5,143,877)
D_Consolidated Financial Statements
Annual Report 2023 - Allianz Group
233
In its meeting on 9 November 2022, the Board of Management of
Allianz SE resolved to carry out a share buy-back program in an
amount of up to € 1 bn within a period between mid-November 2022
and 31 December 2023 (Share Buy-Back Program 2022/11), based
on the authorization granted by the Annual General Meeting on
4 May 2022. In the period between 21 November 2022 and
17 March 2023, a total of 4,682,857 treasury shares with a market
value of € 999,999,983.29 were acquired for an average price of
€ 213.54.
Share Buy-Back Programs 2022/11 and 2023
In the second quarter of 2023, a total dividend of € 4,541 mn (2022:
€ 4,383 mn), or € 11.40 (2022: € 10.80) per qualifying share, was paid
to the shareholders.
Dividends
The treasury shares of Allianz SE and its subsidiaries represented
€ 0.8 mn (2022: € 5.0 mn) or 0.07% (2022: 0.43%) of the issued capital.
In the year ending 31 December 2023, the total number of
treasury shares of Allianz SE decreased by 1,464,440, which
corresponds to a decrease by € 4 mn or by 0.37% of issued capital.
As in the previous years, no capital increase for the purpose of
Employee Stock Purchase Plans was carried out in 2023. Employees of
the Allianz Group purchased approximately 75% of the shares of the
purchase plan at a reference price of € 224.11 (2022: € 164.61) per
share and were allocated one additional share per three shares
purchased, which is equivalent to a discount of approximately 25%.
The shares were sold to employees at an average price of
€168.08 (2022: € 123.46).
63,580
In 2023, 818,526 (2022: 964,487) treasury shares were
transferred to employees of Allianz SE and its subsidiaries in Germany
and abroad. This includes 104,383 (2022: 87,172) shares granted as
part of the so-called "free share program" ("Gratisaktienprogramm").
The 54,482 (2022: 38,720) treasury shares earmarked for the
purposes of Employee Stock Purchase Plans from the previous year
were fully consumed and, in addition, 824,435 (2022: 980,249) treasury
shares were acquired from the market for this purpose. In addition,
10,240 (2022:0) shares were acquired from the market and transferred
free of charge to tied agents in Germany.
Treasury shares
The proposal for appropriation of net earnings reflects the 260,394
treasury shares held directly and indirectly by the company as of
31 December 2023. Such treasury shares are not entitled to the
dividend pursuant to §71b of the German Stock Corporation Act
(AktG). Should there be any change in the number of shares entitled to
the dividend by the date of the Annual General Meeting, the above
proposal will be amended accordingly and presented for resolution
on the appropriation of net earnings at the Annual General Meeting,
with an unchanged dividend of € 13.80 per each share entitled to
dividend.
Unappropriated earnings carried forward: € 537,017,351.95.
Distribution of a dividend of € 13.80 per no-par share entitled to a
dividend: € 5,402,128,528.20
-
Proposal for appropriation of net earnings
The Board of Management and the Supervisory Board propose that
the net earnings ("Bilanzgewinn") of Allianz SE of € 5,939,145,880.15
for the 2023 fiscal year shall be appropriated as follows:
401,589,162
1,724,834
403,313,996
1 Thereof 260,394 (2022: 1,724,834) own shares held by Allianz SE.
260,394
391,718,983
391,458,589
As of 31 December 2023, Allianz SE held 260,394 (2022: 1,724,834)
treasury shares. Of these, 60,394 (2022: 54,482) were held for
covering future subscriptions by employees in Germany and abroad
in the context of Employee Stock Purchase Plans. 200,000 (2022:
200,000) were held as a hedge for obligations from the Allianz Equity
Incentive Program.
Total
4,320
5,103
In the Corporate and Other business segment, a sensitivity
analysis was performed with respect to earnings and interest rates for
the Digital Investments. The analysis has shown that in case of an
increase in the interest rates by 50 basis points and under
consideration of a holding period usual for the asset class, the
recoverable amount approximates its carrying value.
In the Life/Health business segment, sensitivity analyses were
performed mainly based on NAV and VNB sensitivity testing on the
reference rate. The analyses have shown that in case of a change in
reference rates by 50 basis points, the value in use of each CGU still
exceeds its carrying amount.
For the CGUs in the Property-Casualty business segment and for
the CGU Asset Management, sensitivity analyses were performed with
respect to the long-term sustainable combined ratios/cost-income
ratios and the discount rate. For all CGUs discounted earnings, value
sensitivities still exceeded their respective carrying amounts.
Sensitivity analyses were performed with regard to discount rates and
key value drivers of the business plans.
Sensitivity analyses
practice and are subject to company-specific factors, its development
status, and the markets in which the company operates.
For the Digital Investments included in the Corporate and Other
business segment, the bases for determining the values assigned to
the key assumptions are current market trends and earnings
projections. The discount rate is based on the capital asset pricing
model (CAPM) and appropriate eternal growth rates. The discount
rate and the eternal growth rates are calculated in line with market
For entities included in the CGU of the Asset Management
business segment, key assumptions include assets under management
growth, cost-income ratio, and risk capital. The key assumptions are
based on the current market environment. The discount rate for the
CGU Asset Management is 12.0% (2022: 10.8 %) and the eternal
growth rate is 2.6% (2022: 1.3%).
The VNB calculation is based on a best estimate of one year of
VNB, multiplied by a factor (multiple) to capture expected future new
business. The best estimate of new business is generally derived from
the achieved value of new business. The new business multiple
accounts for the risk and the growth associated with future new
business analogous to the discount rate and the growth rate in a
discounted earnings method. For all CGUs in the Life/Health business
segment, a multiple of not more than ten times the VNB is applied.
The present value of future cash flows corresponds to the
probability-weighted average of future cash flows considering the
time value of money, using the relevant risk-free interest rate term
structure. The calculation of the best estimate is based on assumptions
made for demographic factors (e.g., mortality, morbidity,
lapse/surrender rates), expense allowances, taxation, assumptions on
market conditions for market consistent projections (e.g., reference
rates, volatilities) as well as investment strategy and asset allocation of
the entity. The risk adjustment reflects an additional provision to
account for the uncertainty in future cash flows with respect to non-
financial risk. For further information regarding the different
components, please refer to the section "Insurance contracts" in note 2.
8.10 _ Equity
For entities included in the CGUS of the Life/Health business segment,
the valuation is based on the NAV that reflects the in-force value
including the expected profits in the form of the CSM. The CSM is part
of the insurance contract liabilities in the IFRS balance sheet consisting
of the present value of future cash flows, a risk adjustment, and the
value of unearned profits. These unearned profits are also included
from a shareholder's perspective for the company value, i.e., after tax
and reinsurance.
Annual Report 2023 - Allianz Group
231
1_The table provides an overview of weighted key parameters on the CGU level of the country-
specific discount rates and eternal growth rates used.
1.5
9.4
བུ་
0.5
8.4
1.1
9.2
D_Consolidated Financial Statements
In its meeting on 10 May 2023, the Board of Management of
Allianz SE resolved to carry out an additional share buy-back program
in an amount of up to € 1.5 bn within a period between end of
May 2023 and 31 December 2023 (Share Buy-Back Program 2023),
based on the authorization granted by the Annual General Meeting
on 4 May 2022. In the period between 29 May 2023 and
24 November 2023, a total of 6,912,156 treasury shares with a market
value of €1,499,999,820.26 were acquired for an average price of
€ 217.01.
Equity
As of 31 December
Shareholders' equity
54,415
Detailed information on the remuneration of the Board of
Management and Supervisory Board according to the German Stock
Corporation Act (AktG) and the recommendations of the German
Corporate Governance Code are disclosed in the Remuneration
Report. The following descriptions are made in accordance with
IAS 24.17 and IAS 24.18.
(60,490)
(37,215)
Other unrealized gains and losses (net)2,3
Subtotal
Non-controlling interests
54,854
34,207
(3,048)
(2,883)
Foreign currency translation adjustments
Unrealized gains and losses from insurance
contracts (net)
€ mn
29,354
4,843
4,764
27,732
27,732
1,170
1,170
2022
2023
Additional paid-in capital
Undated subordinated bonds
Retained earnings¹
Issued capital
30,702
All of the treasury shares acquired within the Share Buy-Back
Programs 2022/11 and 2023 have been redeemed according to the
simplified procedure without reduction of the share capital.
58,477
Non-controlling interests
As of 31 December
Investments in investment funds by asset class
€ mn
Investments in investment funds
The carrying amounts in the tables listed above correspond to an
aggregated amortized cost amount of € 29,791 mn (2022:
€ 28,902 mn). In a very extreme scenario, this amortized cost amount
represents the maximum exposure to loss for the Allianz Group from
these investments. In the reporting period, the Allianz Group has not
provided any financial or other support to these entities, nor does it
intend to provide such support in the future.
26,402
28,104
6,435
8,514
558
737
2,730
2,818
6,897
7,652
9,783
8,383
2022
2023
2_Thereof rated AAA or AA € 19,947 mn (2022: € 20,229 mn).
1_Comprises mainly investments.
Other
Total¹,2
2023
2022
26,754
26,003
Non-controlling interests
8.12 Related party transactions
Besides the investments in investment funds described above, the
Allianz Group also holds investment funds to fund unit-linked
insurance contracts. However, these holdings are held on behalf and
for the benefit of unit-linked policyholders only. For that reason, these
holdings are not included in the table above. As of 31 December 2023,
the volume of unit-linked assets amounted to € 152,872 mn (2022:
€ 141,034 mn). Any exposure to loss on these investments is solely
borne by the unit-linked policyholder.
The carrying amounts in the tables listed above correspond to an
aggregated amortized cost amount of € 63,231 mn (2022:
€ 56,538 mn). In a very extreme scenario, this amortized cost amount
represents the maximum exposure to loss for the Allianz Group from
these investments. In the reporting period, the Allianz Group has not
provided any financial or other support to these entities, nor does it
have the intention to provide such support in the future.
As of the reporting date, the Allianz Group has receivables from
unconsolidated investment funds, which are mainly due in return for
asset management services, amounting to € 1,107 mn (2022:
€ 1,085 mn). Furthermore, the Allianz Group has entered
commitments to invest in private equity funds and further financial
instruments of up to € 35,346 mn as of 31 December 2023 (2022:
€ 36,605 mn).
Of this investment fund exposure of the Allianz Group, investments of
€ 7.9 bn (2022: € 8.7 bn) relate to listed investment funds, whereas
investments of € 63.3 bn (2022: € 56.5 bn) relate to unlisted
investment funds.
D_Consolidated Financial Statements
Annual Report 2023 - Allianz Group
235
1_Comprises mainly investments.
Auto
65,226
Total¹
7,260
8,984
Other funds
14,074
13,227
Property funds
17,890
22,275
Debt funds
71,240
As of 31 December
CMBS
CMO/CDO
U.S. agency
Equity funds
Carrying amounts of ABS and MBS investments by type of category
operations of the Allianz Group. For further information on the
Structured Alpha matter please refer to note 8.13.
As of 31 December 2023, the Allianz Group believes that there are
no outstanding regulatory capital or compliance matters that would
have material adverse effects on the financial position or the results of
The Allianz Group's insurance subsidiaries (including Allianz SE)
prepare individual financial statements based on local laws and
regulations. The local regulations establish additional restrictions on
the minimum level of capital and the amount of dividends that may be
paid to shareholders. The respective local minimum capital
requirements are based on various criteria including, but not limited to,
the volume of premiums written or claims paid, amount of insurance
reserves, investment risks, credit risks, and underwriting risks.
Based on the information available to the Allianz Group as of the
end of 31 December 2023 and with a Solvency II capitalization of
206% (2022: 201 %)², it is expected that the Group continues to be
sufficiently capitalized and compliant with both the regulatory
Solvency Capital Requirement and the minimum consolidated Group
Solvency Capital Requirement. For further information on Solvency II
capitalization, please refer to the section "Solvency II regulatory
capitalization” of the Risk and Opportunity Report.
The Allianz Group's Own Funds are composed of the eligible Own
Funds relating to the Group of internal model and standard formula
entities, the sectoral Own Funds of entities from other financial sectors,
as well as the equivalent Own Funds of entities included via the
deduction and aggregation (D&A) method. The eligible Own Funds
relating to the Group of internal model and standard formula entities
essentially consist of the MVBS excess of assets over liabilities plus
qualifying subordinated liabilities, less deductions for foreseeable
dividends as well as further deductions relating, for example, to
transferability restrictions.
With Solvency II being the regulatory regime relevant for the
Group as of 1 January 2016, the risk profile is measured and steered
based on the approved Solvency II internal model¹. The Allianz Group
has introduced a target Solvency ratio range in accordance with
Solvency II, based on pre-defined stress scenarios for both the Group
and related undertakings, supplemented by ad-hoc scenarios,
historical and reverse stress tests, and sensitivity analyses.
The Allianz Group's capital requirements primarily depend on the type
of business that it underwrites, the industry and geographic locations
in which it operates, and the allocation of the Allianz Group's
investments. During the Allianz Group's annual planning and strategic
dialogues with its related undertakings, internal capital requirements
are determined through business plans regarding the levels and timing
of capital expenditures and investments. These plans also form the
basis for the Allianz Group's capital management. Resilience under
stress conditions is also considered when determining the internal
capital requirements of the Group. The regulators impose minimum
capital requirements on the Group and its related undertakings. For
further details on how Allianz Group manages its capital, please refer
to the section "Target and strategy of risk management" of the Risk
and Opportunity Report.
Capital requirements
4,792
5,103
Total
Other equity components
491
Share of earnings
(236)
(180)
Unrealized gains and losses (net)
2022
2023
As of 31 December
€ mn
€ mn
Some insurance subsidiaries of the Allianz Group are subject to
regulatory restrictions on the amount of dividends that can be remitted
to Allianz SE without prior approval by the appropriate regulatory
body. These restrictions require that a company may only pay
dividends up to an amount in excess of certain regulatory capital
levels, or based on the levels of undistributed earned surplus or current
year income or a percentage thereof. The Allianz Group's Board of
Management believes that these restrictions will not affect the ability
of Allianz SE to pay dividends to its shareholders in the future.
8.11 Interests in unconsolidated
structured entities
435
4,121
4,320
Investments in investment funds
Nature of risks associated with unconsolidated
structured entities
Nature, purpose, and role of the Allianz Group in
structured entities
Income derived from the management of investment funds
mainly includes asset management fees and performance-based fees.
Investment funds launched by group-internal asset managers can
be considered to be sponsored by the Allianz Group. As a sponsor, the
Allianz Group is involved in the legal set-up and marketing of internally
managed investment funds through its asset management
subsidiaries. This may include providing seed capital to the funds and
providing administrative services to ensure the investment funds'
operation. Investment funds managed by group-internal asset
managers can be reasonably associated with the Allianz Group. The
use of the Allianz name for investment funds is another indicator that
the Allianz Group has acted as a sponsor for the respective funds.
Information on the management fees generated in the asset
management business is disclosed in note 8.1.
Within the asset management business, investment funds are
established and managed to accommodate retail and institutional
clients' requirements to hold investments in specific asset classes,
market segments, or regions. Within the insurance business,
policyholder money is partly invested in investment funds managed by
Allianz's group-internal asset managers. Investment funds managed
by the Allianz Group may include mutual funds, special funds, and
other funds.
Asset management activities
With regard to investment activities, income mainly includes
distributions from the funds as well as realized gains and losses from
disposals.
Investment funds are generally subject to stringent regulatory
requirements from financial authorities in all jurisdictions across the
world. Comprehensive regulation of funds protects fund investors and
also helps to limit investment risk. These mechanisms result in a legal
set-up of funds that the Allianz Group has to accept as investor and
which may lead to a classification as structured entities under IFRS 12.
Considering the broad variety of investment funds across different
jurisdictions, the classification of investment funds as structured entities
based on the definition in IFRS 12 is judgmental. As a general rule, the
management of relevant activities of an investment fund is delegated
to the fund manager via asset management agreements. In contrast,
influence from investors on the relevant activities of investment funds
is usually either precluded by legal or regulatory provisions or not
deemed substantial.
Within the asset management business, the Allianz Group acts as
asset manager for some securitization vehicles. The assets under
management of these vehicles amounted to € 3,884 mn as of
31 December 2023 (2022: € 3,051 mn). Some of the affected vehicles
have been set up by the Allianz Group, others by third parties. In this
context, the role of the Allianz Group is limited to asset management.
Income derived from the management of securitization vehicles
comprises asset management fees.
Income derived from investments in securitization vehicles mainly
includes interest income generated from ABS and MBS, as well as
realized gains and losses from disposals of these securities.
The Allianz Group acts as an investor in ABS- or MBS-issuing
securitization vehicles that purchase pools of assets, including
commercial mortgage loans (CMBS), auto loans, credit card
receivables, and others. These securitization vehicles refinance the
purchase of assets by issuing tranches of ABS or MBS whose
repayment is linked to the performance of the assets held by the
vehicles.
Securitization vehicles invested in by the Allianz Group have
generally been set up by third parties. Furthermore, the Allianz Group
has neither transferred any assets to these vehicles nor has it provided
any further credit enhancements to them.
Investments in asset-backed securities (ABS) and
mortgage-backed securities (MBS) issued by
securitization vehicles
D_Consolidated Financial Statements
Annual Report 2023 - Allianz Group
2_Including the application of transitional measures for technical provisions, the Solvency II capitalization
ratio amounts to 229 % as of 31.12.2023 (2022: 230 %).
generality, the term internal model might be used in the following chapters, e.g., in case descriptions also
referring to entities that use the internal model, or descriptions focusing on processes with respect to the
internal model components.
234
1_From a formalistic perspective, the German Supervisory Authority deems the model to be "partial"
because not all of the related entities are using the internal model. Some of the smaller entities report
under the standard formula and others under the deduction and aggregation approach. Without loss of
In the following sections, the business activities involving
unconsolidated structured entities are described.
The Allianz Group engages in some business activities that involve
the use of entities that meet the above-mentioned definition of
structured entities. Primarily, the Allianz Group is involved with such
entities due to its investment activities associated with its insurance
business and due to its asset management activities. Furthermore,
structured entities are used by the Allianz Group to source out certain
risks to investors as part of its reinsurance business. Generally, the
classification of an entity as a structured entity may require significant
judgment.
Under IFRS 12, a structured entity is defined as an entity that has been
designed so that voting rights or similar rights held by an investor are
not the dominant factor in deciding who controls the entity, such as
when any voting rights relate to administrative tasks only and the
relevant activities are directed by means of contractual arrangements.
Interests in asset-backed securities (ABS) and
mortgage-backed securities (MBS) issued by
securitization vehicles
Actuarial (gains)/losses due to
638
19
612
33
199
(82)
(199)
(40)
(82)
Changes in demographic assumptions
(479)
(1-11+111)
747
456
350
10,691
7,635
67
2022
2023
2022
(40)
2
322
Changes in financial assumptions
195
(5,935)
479
39
(8)
(2,965)
(5,612)
769
Remeasurements recognized in the consolidated statement of
comprehensive income (before deferred taxes)
2,965
39
(8)
39
(8)
805
Change in effect of asset ceiling in excess of interest
(2,965)
195
assets
Return on plan assets greater/(less) than interest income on plan
363
46
363
46
Experience adjustments
(5,935)
805
(195)
811
Retirement benefits in the Allianz Group, which are granted to
employees and in Germany also to agents, are either in the form of
defined benefit or defined contribution plans. For defined benefit
plans, the beneficiary is granted a defined benefit by the employer or
via an
external entity. In contrast to defined contribution
arrangements, the future cost to the employer of a defined benefit
plan is not known with certainty in advance.
Expenses recognized in the consolidated income statement
Fair value of plan assets
Defined benefit obligation
€ mn
Reconciliation of defined benefit obligation, fair value of plan assets, effect of asset ceiling, and net defined benefit balance
D_Consolidated Financial Statements
Annual Report 2023 - Allianz Group
239
The following table sets out the changes in the defined benefit
obligation, in the fair value of plan assets, in the effect of the asset
ceiling as well as in the net defined benefit balance for the various
Allianz Group defined benefit plans:
Defined benefit plans
Additionally, the Allianz Group offers a deferred compensation
program, "Pensionszusage durch Entgeltumwandlung (PZE)", for
active employees. Within some boundaries they convert at their
discretion parts of their gross income and, in exchange, receive a
pension commitment of equal value. PZE is qualified as a defined
benefit plan with small risk exposure.
The period in which a retirement benefit can be drawn is usually
between the ages of 60 and 67. Disability benefits are granted until
retirement pension is paid. In the case of death under the previous
plans, surviving dependents normally receive 60% (widow/widower)
and 20% (per child) of the original employee's pension, in total not to
exceed 100%. Under the "My Allianz Pension" plan, the surviving
dependents receive the capital accrued.
Effect of asset ceiling¹
Pension increases apart from AVK and APV are guaranteed at 1%
p.a. at a minimum. Depending on legal requirements, some pension
increases are linked to inflation. In AVK, the complete surplus share of
the retirees is used to increase their pension.
Employees who joined Allianz before 1 January 2015 participate
in the Allianz Versorgungskasse VVaG (AVK), financed through
employee contributions, and the Allianz Pensionsverein e.V. (APV),
which is financed by the employer. Both pension funds provide
pension benefits for the base salary up to the GSSC, are wholly funded
along local regulatory requirements, and were closed to new entrants,
effective 31 December 2014. AVK and APV are legally separate
administered pension funds with trustee boards being responsible for
the investment of the assets and the risk management. AVK is subject
to German insurance regulation. The assets of the contribution-based
pension plans are allocated to a trust (Methusalem Trust e.V.) and
managed by a board of trustees. For the AVK, the annual minimum
interest rate guaranteed is 1.75% - 3.50%, depending on the date of
joining the Allianz Group, and for the closed part of the contribution-
based pension plan it is 2.75%.
the majority of contribution-based pension plan beneficiaries to the
low-risk pension plan "My Allianz Pension", where only contributions
are preserved. For salaries above the GSSC, the
Allianz Group decides each year whether and to which extent a
budget for the contribution-based pension plans is provided.
Independently of this decision, an additional risk premium is paid to
cover death and disability. Generally the accruals of the contribution-
based pension plans are wholly funded, whereas the grandfathered
plans are funded to a minor extent. On retirement, the accumulated
capital is paid as a lump sum or converted to a lifetime annuity.
Most active German employees participate in contribution-
based plans using different vehicles to cover the base salary both
below and above the German social security ceiling (GSSC). Since
1 January 2015, the Allianz Group contributes for new entrants and for
Each of the pension plans in Germany, the U.K. and Switzerland
contributes more than 5% to the Allianz Group's defined benefit
obligation or its plan assets. As the Allianz Retirement and Death
Benefits Fund in the U.K. closed from 1 July 2015 to future accrual and
the plans in Switzerland are nearly negligible from a risk perspective,
except a minor liquidity risk due to the "Freizügigkeitsleistung", only the
defined benefit plans in Germany are described in more detail
regarding key risks and regulatory environment.
Risks typically associated with defined benefit plans are biometric
risks such as longevity, disability, and death, as well as economic risks
such as interest rates, inflation, and compensation increases. New
plans are primarily based on contributions and may include, in some
cases, guarantees such as the preservation of contributions or
minimum interest rates.
The Allianz Group provides competitive and cost-effective
retirement and disability benefits using risk-appropriate vehicles. The
plans may vary from country to country due to the different legal,
fiscal, and economic environments.
Overview
8.16 Pensions and similar obligations
D_Consolidated Financial Statements
565
Number of
options
There is also a partly funded defined benefit pension plan for
agents ("VertreterVersorgungsWerk, VVW"), which has been closed for
new entrants since 31 December 2011. A part of the pension plan
serves as a replacement for the compensatory claim of agents
according to German Commercial Code (§89b). VVW is similar to a
final salary benefit plan.
1,114
Net defined benefit balance
||
33
19
Other
199
479
2
322
745
Interest income
Interest expenses
456
|
350
16,471
2022
13,749
27,095
21,274
Current service costs
Balance as of 1 January
2023
2022
2023
III
2023
110
Employer contributions
2022
691
Allianz Alpha Sector Rotation, Jakarta
100.0
36.6 2,3
DCSO Deutsche Cyber-Sicherheitsorganisation GmbH, Berlin
25.0
AGA Service Company Corp., Richmond, VA
100.0
Allianz Argentina Compañía de Seguros S.A., Buenos Aires
100.0
esa EuroShip GmbH & Co. KG Underwriting for Shipping, Bad
Friedrichshall
AGCS International Holding B.V., Amsterdam
100.0
Allianz Asia Holding Pte. Ltd., Singapore
100.0
100.0
40.0
100.0
ESG Book GmbH, Frankfurt am Main
11.1 8
AGF Inversiones S.A., Buenos Aires
100.0
Allianz Asia Pacific Private Credit Debt Holdings S.à r.l.,
Senningerberg
0.0
InnoSolutas GmbH, Bad Friedrichshall
25.0
AIM Equity Europe Cantons, Paris
100.0 3
KomfortDynamik Sondervermögen, Frankfurt am Main
0.6 3,8
AGCS Marine Insurance Company Corp., Chicago, IL
AIM Equity US, Paris
AF12 Real Estate Fund (Compartment), Luxembourg
Clark Holding SE, Frankfurt am Main
AEM Energy Systems Ltd., Chalandri
100.0
Allianz Actions Euro Convictions, Paris
41.7 2,3
Associates
Aero-Fonte S.r.l., Misterbianco
100.0
Allianz Actions France, Paris
75.2 3
Autobahn Tank & Rast Gruppe GmbH & Co. KG, Bonn
Autobahn Tank & Rast Management GmbH, Bonn
AV Packaging GmbH, Munich
25.0
25.0
AEV Allianz Invest Spezial 4, Vienna
AEV EM PIMCO, Vienna
24.0
100.0
100.0
100.0
Allianz Africa Services SA, Abidjan
100.0
100.0 8
Caldera Service GmbH, Hamburg
25.1
AEV Health Allianz Invest Spezial 14, Vienna
Affordable Housing CIV LLC, Wilmington, DE
100.0 3
Allianz Air France IFC, Paris
100.0 3
100.0
Allianz Alapkezelő Zrt., Budapest
Allianz Advisory Pte. Ltd., Singapore
37.9 2,3
100.0 3
0.0 2
Windkraft Kirf Infrastruktur GmbH, Neumagen-Dhron
50.0 8
Allianz 003 S.r.L., Rome
51.0
Allianz Australia Employee Share Plan Pty Limited, Sydney
Allianz Australia General Insurance Pty Ltd., Sydney
100.0
100.0
Allianz 004 S.r.l., Rome
51.0
Foreign entities
Allianz Australia Insurance Limited, Sydney
100.0
Allianz 071 S.r.L., Sassari
51.0
51.0
Allianz Australia Life Insurance Holdings Limited, Sydney
100.0
Allianz 1 Liverpool Street Holding S.à r.L., Luxembourg
100.0
1739908 Ontario Ltd., Toronto, ON
100.0
Allianz Australia Life Insurance Limited, Sydney
100.0
Allianz 101 Moorgate Holding S.à r.l., Luxembourg
100.0
1800 M Owner GP LLC, Wilmington, DE
100.0
Allianz Australia Life Policy Services Pty Limited, Sydney
Consolidated affiliates
Allianz Asia Pacific Private Credit Debt SecCo S.à r.l., Luxembourg
Allianz Asia Private Credit Funds S.A. SICAV-RAIF, Senningerberg
Allianz 002 S.r.l., Rome
100.0
100.0
Norsea Gas GmbH, Friedeburg-Etzel
28.0
AIM Underwriting Limited, Toronto, ON
100.0
Seagull Deutschland GP GmbH, Frankfurt am Main
49.9
Allianz Asia Private Credit Funds S.A. SICAV-RAIF
(Compartment III), Senningerberg
0.0 2,3
Allianz - Slovenská DSS a.s., Bratislava
100.0
T&R MLP GmbH, Bonn
25.0
100.0
Allianz - Slovenská poisťovňa a.s., Bratislava
T&R Real Estate GmbH, Bonn
25.0
Allianz (UK) Limited, Guildford
100.0
Umspannwerk Putlitz GmbH & Co. KG, Oldenburg
25.4
Allianz 001 S.r.l., Velletri
51.0
Verimi GmbH, Berlin
8.2 8
Allianz Asset Management of America Holdings Inc., Dover, DE
Allianz Asset Management of America LLC, Dover, DE
Allianz Asset Management U.S. Holding II LLC, Dover, DE
Allianz Australia Claim Services Pty Limited, Sydney
100.0
100.0
99.6
100.0
Allianz Actions Euro, Paris
AEL EM PIMCO, Vienna
100.0
Gateway Digital Services GmbH, Stuttgart
100.0
Iconic Finance GmbH, Munich
100.0
Windpark Cottbuser See Repowering GmbH & Co. KG, Sehestedt
Windpark Dahme GmbH & Co. KG, Sehestedt
100.0
AQ Focus Teleport Verwaltungs GmbH, Hamburg
AQ Überseehaus GmbH & Co. KG, Hamburg
50.0
50.0
39.97
100.0
AQ Überseehaus Verwaltungs GmbH, Hamburg
50.0
Windpark Cottbuser See GmbH & Co. KG, Sehestedt
246
D_Consolidated Financial Statements
% owned¹
% owned¹
% owned¹
AVAG Versicherungsvermittlungs-Gesellschaft mbH, Augsburg
Dealis Fund Operations GmbH, Frankfurt am Main
50.0
1Insurer Holdings Limited, Fareham
100.0
Allianz 371 S.r.l., Verona
51.0
50.0
1Insurer Inc., Schaumburg, IL
100.0
Annual Report 2023 - Allianz Group
Allianz 391 S.r.l., Bolzano
100.0
100.0
70.8
100.0 5,6
Volkswagen Autoversicherung Holding GmbH, Braunschweig
49.0 2
Driven By GmbH, Munich
100.0
VW AV, Frankfurt am Main
100.0 3
EASTSIDE Joint Venture GmbH & Co. KG, Frankfurt am Main
50.0 2
manroland Vertrieb und Service GmbH, Mühlheim am Main
Stiftung Allianz für Kinder gemeinnützige GmbH, Munich
100.06
100.0
GA Global Automotive Versicherungsservice GmbH, Halle (Saale)
Windpark Aller-Leine-Tal GmbH & Co. KG, Sehestedt
EASTSIDE TAMARA GmbH, Frankfurt am Main
50.0 2
Windpark Berge-Kleeste GmbH & Co. KG, Sehestedt
100.0
Euler Hermes Aktiengesellschaft, Hamburg
100.0
Joint ventures
Windpark Büttel GmbH & Co. KG, Sehestedt
100.0
Euler Hermes Collections GmbH, Potsdam
100.0
AQ Focus Teleport GmbH & Co. KG, Hamburg
Windpark Calau GmbH & Co. KG, Sehestedt
100.0
100.0 3
51.0
50.0 3
100.0
Allianz 701 S.r.l., Corato
51.0
100.0
Allianz 841 S.r.l., Salerno
51.0
Seagull Portfolio GmbH & Co. KG, Frankfurt am Main
SPN Service Partner Netzwerk GmbH, Munich
UGG TopCo GmbH & Co. KG, Ismaning
56.3 7
30.07
ACRE Hinoki Pte. Ltd., Singapore
ACRE Sugi Pte. Ltd., Singapore
100.0
Allianz 871 S.r.l., Cosenza
51.0
490 Lower Unit LP, Wilmington, DE
ACRE Ginko Pte. Ltd., Singapore
100.0
51.0
41.87
ACRE Yuzu Pte. Ltd., Singapore
100.0
Allianz Actions Aéquitas, Paris
63.1 3
UGG TopCo/HoldCo General Partner GmbH, Ismaning
VGP Park München GmbH, Vaterstetten-Baldham
41.87
AEIF II S.A. SICAV-RAIF, Senningerberg
100.0 3
Allianz Actions Emergentes, Paris
91.23
48.97
Allianz 901 S.r.l., Palermo
Die Brückenköpfe X BKX GmbH & Co. Invest KG, Berlin
50.0
51.0
1Insurer Limited, Fareham
100.0
Allianz 421 S.r.l., Reggio Emilia
51.0
EDGE Wriezener Karree Berlin GmbH & Co. KG, Frankfurt am Main
He Dreiht Investor GmbH, Karlsruhe
47.5 7
35° East SAS, Paris la Défense
100.0
Allianz 441 S.r.L., Ferrara
51.0
33.3 7
490 Fulton JV LP, Wilmington, DE
96.5
50.0
Allianz 481 S.r.l., Faenza
K&S Partnersysteme GmbH, Berlin
PNE WIND Park III GmbH & Co. KG, Cuxhaven
Rhino Management GmbH, Frankfurt am Main
50.0
490 Fulton REIT LP, Wilmington, DE
100.0
Allianz 501 S.r.l., Florence
51.0
PNE WIND Infrastruktur Calau II GmbH, Cuxhaven
50.0
490 Lower Unit GP LLC, Wilmington, DE
100.0
Allianz 671 S.r.l., L'Aquila
51.0
Allianz 101 S.r.l., Turin
51.0
1800 M REIT GP LLC, Wilmington, DE
Allianz Crowdlending, Paris
100.0 3
Allianz Global Private Debt Opportunities Fund GP S.à r.l.,
Senningerberg
100.0
Allianz France US REIT GP LLC, Wilmington, DE
100.0
Allianz CV Investor GP LLC, Wilmington, DE
100.0
Allianz France US REIT LP, Wilmington, DE
100.0
Allianz CV Management LLC, Wilmington, DE
Allianz Global Real Assets and Private Markets Fund S.A.
SICAV-RAIF, Senningerberg
100.0 3
100.0
100.0
100.0
Allianz Debt Fund FPS, Paris
100.0 3
Allianz Fund Investments Inc., Wilmington, DE
100.0
Allianz Global Real Estate Debt Opportunities Fund GP S.à r.L.,
Senningerberg
100.0
Allianz Debt Fund S.à r.l., Luxembourg
100.0
Allianz Fund Investments S.A., Luxembourg
100.0
Allianz Debt Fund SCSP SICAV-SIF, Luxembourg
89.33
Allianz Fund Investments 2 S.A. (Compartment), Luxembourg
Allianz Debt Investments PCREL S.à r.l., Luxembourg
Allianz Debt Investments S.à r.l., Luxembourg
Allianz France S.A., Paris la Défense
Allianz Crowdfunding Fund I FPCI, Paris
Allianz Colombia S.A., Bogotá D.C.
Allianz Global Investors U.S. Holdings LLC, Dover, DE
100.0
100.0
Allianz Compañía de Seguros y Reaseguros S.A., Madrid
99.9
Allianz Core Private Markets, Senningerberg
100.0 3
Allianz France Immobilier Expansion - AFIX, Paris la Défense
Allianz France Real Estate Invest SPPICAV, Paris la Défense
Allianz France Real Estate S.à r.l., Luxembourg
100.0
Allianz Global Investors U.S. LLC, Dover, DE
100.0
100.0
100.0 3
Allianz Global Investors UK Limited, London
100.0
Allianz Global Life dac, Dublin
100.0
Allianz Creactions 1, Paris
100.0 3
Allianz France Relance, Senningerberg
77.4 3
Allianz Creactions II, Paris
100.0 3
Allianz France Richelieu 1 S.A.S., Paris la Défense
100.0
Allianz Global Private Debt Opportunities Feeder Fund SA
SICAV-RAIF, Senningerberg
100.0
100.0
100.0 3
100.0 3
Allianz Global Risks US Insurance Company Corp., Chicago, IL
Allianz Hayat ve Emeklilik A.S., Istanbul
100.0
Allianz Global Corporate & Specialty South Africa Ltd.,
Johannesburg
Allianz Home Equity Income GP 1 Limited, London
100.0
100.0
Allianz Hospitaliers Valeurs Durables, Paris
100.0 3
100.0
Allianz Global Diversified Dividend, Senningerberg
99.33
Allianz Hrvatska d.d., Zagreb
100.0
46.2 2,3
Allianz Elementar Lebensversicherungs-Aktiengesellschaft, Vienna
Allianz Elementar Versicherungs-Aktiengesellschaft, Vienna
Allianz Emerging Markets Sovereign Bond, Senningerberg
Allianz Engineering Inspection Services Limited, Guildford
Allianz Equity Emerging Markets 1, Paris
Allianz Equity Investments Ltd., Guildford
Allianz Global Diversified Infrastructure Equity GP S.à r.l.,
Senningerberg
Allianz Hungária Biztosító Zrt., Budapest
100.0
100.0
100.0 3
Allianz Global Diversified Infrastructure Equity II GP S.à r.l.,
Senningerberg
Allianz HY Investor GP LLC, Wilmington, DE
100.0
100.0
Allianz HY Investor LP, Wilmington, DE
100.0
100.0
Allianz I.A.R.D. S.A., Paris la Défense
100.0
248
100.0
Allianz General Insurance Company (Malaysia) Berhad, Kuala
Lumpur
100.0
100.0
100.0
89.0
100.0
Allianz Hedeland Logistics ApS, Copenhagen
100.0
100.0
Allianz Debt Investments SCSP SICAV-SIF, Luxembourg
100,0 3
Allianz Global Corporate & Specialty do Brasil Participações
Ltda., Rio de Janeiro
Allianz Hold Co Real Estate S.à r.l., Luxembourg
100.0
100.0
Allianz Holding eins GmbH, Vienna
Allianz Eiffel Square Kft., Budapest
100.0
100.0
Allianz Global Corporate & Specialty of Africa (Proprietary) Ltd.,
Johannesburg
100.0
Allianz Direct S.p.A., Milan
100.0
Allianz do Brasil Participações Ltda., São Paulo
100.0
Allianz Global Corporate & Specialty Resseguros Brasil S.A., São
Paulo
Allianz Holding France SAS, Paris la Défense
Allianz Holdings p.l.c., Dublin
100.0
100.0
100.0
Allianz Holdings plc, Guildford
Allianz Digital Services Pte. Ltd., Singapore
Allianz France Favart I, Paris
42.7 2,3
100.0
51.0
247
Annual Report 2023 - Allianz Group
D_Consolidated Financial Statements
% owned¹
% owned¹
% owned¹
Allianz Ayudhya Assurance Public Company Limited, Bangkok
Allianz Ayudhya Capital Public Company Limited, Bangkok
Allianz Ayudhya General Insurance Public Company Limited,
Bangkok
82.8
49.0 2
Allianz Euro Core Infrastructure Debt GP S.à r.l., Senningerberg
100.0
Allianz Europe B.V., Amsterdam
100.0
Allianz 351 S.r.l., Este
Allianz Global Diversified Private Debt Fund GP S.à r.L.,
Senningerberg
100.0
Allianz Bank Bulgaria AD, Sofia
99.9
Allianz Bank Financial Advisors S.p.A., Milan
100.0
Allianz Banque S.A., Paris la Défense
Allianz Benelux S.A., Brussels
100.0
Allianz Europe Small and Micro Cap Equity, Senningerberg
Allianz European Infrastructure II GP S.à r.L., Senningerberg
Allianz European Private Credit Debt Fund, Senningerberg
Allianz European Reliance Single Member Insurance S.A., Athens
Allianz Finance Corporation, Wilmington, DE
100.0
Allianz Global Diversified Private Debt Fund II GP S.à r.l.,
Senningerberg
100.0
100.0
100.0
0.0 2,3
100.0
100.0
100.0
Allianz Australia Limited, Sydney
100.0
Allianz 111 S.r.L., Saint-Christophe
51.0
1800 M Street Owner LP, Wilmington, DE
100.0
Allianz Australia Services Pty Limited, Sydney
100.0
Allianz 231 S.r.l., Merate
51.0
1800 M Street REIT LP, Wilmington, DE
100.0
Allianz Aviation Managers LLC, Wilmington, DE
Allianz Australia Workers' Compensation (NSW) Limited, Sydney
Allianz 261 S.r.L., Crema
51.0
1800 M Street TRS LP, Wilmington, DE
100.0
Allianz 311 S.r.l., Milan
51.0
1800 M Street Venture LP, Wilmington, DE
1Insurer Australia Pty Limited, Melbourne
45.0 2
Allianz Australia Workers' Compensation (Victoria) Limited, Sydney
Allianz Australian Real Estate Trust, Sydney
100.0
99.9
Allianz 312 S.r.l., Castelfranco Veneto
51.0
100.0
Allianz Global Infrastructure and Energy Transition Debt Fund
GP S.à r.l., Senningerberg
100.0
100.0
72.4 3
97.23
Allianz Finance IX Luxembourg S.A., Luxembourg
Allianz Finance VII Luxembourg S.A., Luxembourg
Allianz Finance VIII Luxembourg S.A., Luxembourg
Allianz Finance X Luxembourg S.A., Luxembourg
Allianz Fire and Marine Insurance Japan Ltd., Tokyo
Allianz Global Investors Ireland Ltd., Dublin
100.0
100.0
100.0
Allianz Global Investors Japan Co. Ltd., Tokyo
100.0
100.0
Allianz Global Investors Management Consulting (Shanghai)
Limited, Shanghai
100.0
93.2
100.0
average
exercise
price
€
Allianz FMO SDG Loan Fund S.C.A. SICAV-SIF, Senningerberg
Allianz Global Investors Nominee Services Ltd., George Town
Allianz Global Investors Overseas Asset Management
(Shanghai) Limited, Shanghai
100.0
100.0
Allianz China Insurance Holding Limited, Shanghai
Allianz China Life Insurance Co. Ltd., Shanghai
100.0
100.0
Allianz Foglalkoztatói Nyugdíjszolgáltató Zrt., Budapest
Allianz France Avenir, Paris
100.0
Allianz Global Investors Singapore Ltd., Singapore
100.0
56.4 3
Allianz Climate Transition, Senningerberg
Allianz Global Investors Taiwan Ltd., Taipei
100.0
Allianz Chicago Private Reit LP, Wilmington, DE
Allianz China Future Technologies, Senningerberg
Allianz China Healthy Living, Senningerberg
100.0
100.0
Allianz Cash SAS, Paris la Défense
100.0
Allianz Global Infrastructure and Energy Transition Debt Fund
SCSP SICAV-RAIF, Senningerberg
100.0 3
100.0
Allianz Finance II B.V., Amsterdam
100.0
Allianz Global Investors (Schweiz) AG, Zurich
100.0
Allianz Bonds Euro High Yield, Paris
100.0 3
Allianz Finance II Luxembourg S.à r.l., Luxembourg
100.0
Allianz Global Investors Asia Pacific Ltd., Hong Kong
100.0
Allianz Bulgaria Holding AD, Sofia
66.2
Allianz Finance III B.V., Amsterdam
100.0
Allianz Global Investors Fund Management Co. Ltd., Shanghai
100.0
Allianz Business Services Limited, Guildford
100.0
Allianz Finance IV Luxembourg S.à r.l., Luxembourg
100.0
Allianz Global Investors Holdings Ltd., London
100.0
Allianz Capital Partners of America LLC, Dover, DE
100.0
Allianz Carbon Investments B.V., Amsterdam
Infrastruktur Putlitz Ost GmbH & Co. KG, Husum
manroland AG, Offenbach am Main
100.0
DONATOR Beteiligungsverwaltung GmbH, Munich
100.0
100.0 3
100.0
Allianz VKA Fonds, Frankfurt am Main
100.0 3
100.0
Allianz V-PD Fonds, Frankfurt am Main
100.0
AGCS-Argos 76 Vermögensverwaltungsgesellschaft mbH, Munich
AGCS-Argos 86 Vermögensverwaltungsgesellschaft mbH, Munich
100.0
Allianz L-PD Fonds, Frankfurt am Main
100.0 3
Allianz VSR Fonds, Frankfurt am Main
100.0
Allianz VK Renten Direkt Fonds, Frankfurt am Main
ALIDA Grundstücksgesellschaft mbH & Co. KG, Hamburg
Allianz NM 28 GmbH & Co. KG, Stuttgart
93.3
Allianz Warranty GmbH, Unterföhring
100.0
Allianz AADB Fonds, Frankfurt am Main
100.0 3
Allianz of Asia-Pacific and Africa GmbH, Munich
Allianz ONE - Business Solutions GmbH, Munich
100.0
Allianz X GmbH, Munich
100.0
100.0
Allianz ZWK Nürnberg GmbH & Co. KG, Stuttgart
100.0
100.0
94.8
Allianz ADAC AV Fonds, Frankfurt am Main
100.0
100.0
Allianz Investment Management SE, Munich
Allianz Kunde und Markt GmbH, Munich
100.0 4
Allianz UGD 1 Fonds, Frankfurt am Main
100.0 3
ACP Vermögensverwaltung GmbH & Co. KG Nr. 4 d, Munich
ADAC Autoversicherung AG, Munich
100.0
Allianz LAD Fonds, Frankfurt am Main
100.0
100.0 3
Allianz VAE Fonds, Frankfurt am Main
100.0 3
Allianz Versicherungs-Aktiengesellschaft, Munich
100.0
51.0
Allianz Leben Private Equity Fonds 2001 GmbH, Munich
Allianz Leben Private Equity Fonds Plus GmbH, Munich
Allianz Lebensversicherungs-Aktiengesellschaft, Stuttgart
Allianz Leben Direkt Infrastruktur GmbH, Munich
Allianz VGI 1 Fonds, Frankfurt am Main
100.0 3
ADEUS Aktienregister-Service-GmbH, Munich
79.6
Allianz Leben Infrastrukturfonds GmbH, Munich
100.0
Allianz VGL Fonds, Frankfurt am Main
100.0
ADVANIA GmbH, Hamburg
60.0
Africa Grow GP GmbH, Munich
100.0
AGCS Infrastrukturfonds GmbH, Munich
100.0
100.0
Allianz Agrar AG, Munich
100.0 3
100.0
100.0
Allianz AZSE Master Funds, Frankfurt am Main
100.0 3
Allianz PKV-PD Fonds, Frankfurt am Main
100.0 3
APKV Direkt Infrastruktur GmbH, Munich
100.0
Allianz Beratungs- und Vertriebs-AG, Munich
100.0
Allianz Polch Logistics GmbH & Co. KG, Stuttgart
88.0
Allianz Capital Partners GmbH, Munich
APK-Argos 85 Vermögensverwaltungsgesellschaft mbH, Munich
APK-Argos 95 Vermögensverwaltungsgesellschaft mbH, Munich
100.0
100.0
APKV Infrastrukturfonds GmbH, Munich
APKV Private Equity Fonds GmbH, Munich
100.0
100.0
Allianz Capital Partners Verwaltungs GmbH, Munich
100.0
Allianz Private Equity Partners Verwaltungs GmbH, Munich
100.0
Allianz Deutschland AG, Munich
100.0
Allianz Digital Health GmbH, Munich
Allianz Direct Fonds, Frankfurt am Main
100.0
100,0 3
Allianz Private Equity GmbH, Munich
Allianz AKR Fonds, Frankfurt am Main
100.0
100.0
100.0 4
100.0 3
Allianz Partners Deutschland GmbH, Aschheim
Allianz Pension Direkt Infrastruktur GmbH, Munich
Allianz Pension Partners GmbH, Munich
100.0
Allvest GmbH, Munich
100.0
100.0
AP Solutions GmbH, Munich
100.0
100.0
APK Infrastrukturfonds GmbH, Munich
100.0
Allianz ALD Fonds, Frankfurt am Main
Allianz PK-PD Fonds, Frankfurt am Main
100.0 3
100.0
APK-Argos 65 Vermögensverwaltungsgesellschaft mbH, Munich
100.0
Allianz APAV Fonds, Frankfurt am Main
100.0 3
Allianz Asset Management GmbH, Munich
100.0
Allianz Pensionsfonds Aktiengesellschaft, Stuttgart
Allianz Pensionskasse Aktiengesellschaft, Stuttgart
100.0
APK-Argos 75 Vermögensverwaltungsgesellschaft mbH, Munich
100.0
100.0
Allianz AZL Vermögensverwaltung GmbH & Co. KG, Munich
Allianz Pension Service GmbH, Munich
ACP Vermögensverwaltung GmbH & Co. KG Nr. 4 a, Munich
100.0
ACP Vermögensverwaltung GmbH & Co. KG Nr. 4, Munich
People and Culture reporting standard (which includes all companies in and related to the insurance,
asset management and banking business).
243
Salaries and wages
2023
11,656
2022
11,090
Social security contributions and employee
assistance
1,730
1,595
Expenses for pensions and other post-retirement
benefits
1,359
1,280
1 Thereof, 154,862 (2022: 154,023) people in Allianz Group companies are fully covered under the global
Total
13,965
Annual Report 2023 - Allianz Group
D_Consolidated Financial Statements
Issuance of the Declaration of Conformity with the
German Corporate Governance Code according to
§ 161 AktG
On 14 December 2023, the Board of Management and the
Supervisory Board of Allianz SE issued the Declaration of Conformity
with the German Corporate Governance Code required by § 161 AktG
and made it permanently available on the company's website.
Remuneration for the Board of Management and
the Supervisory Board according to §314 (1) No.
6 HGB
As of 31 December 2023, the Board of Management is comprised of
nine members (2022: eleven members). The following values reflect
the expenses for the full Board of Management active in the respective
year.
The sum of the total remuneration of the Allianz SE Board of
Management for 2023, excluding pension service cost, amounts to
€ 36 mn (2022: € 42 mn).
The equity-related remuneration in 2023 is comprised of 83,654¹
(2022: 119,4342) Restricted Stock Units (RSUs).
RSUS with a total fair value of € 14.9 mn (2022: € 18.7 mn) were
granted to the Board of Management for the year ended
31 December 2023.
In 2023, former members of the Board of Management and their
dependents received remunerations and other benefits totaling
€ 12 mn (2022: € 8 mn), while reserves for current pension obligations
and accrued pension rights totaled € 176 mn (2022: € 171 mn).
The total remuneration for all Supervisory Board members,
including attendance fees, amounted to € 3.5 mn (2022: € 2.9 mn).
As of 31 December 2023, advances granted, loans and
contingent liabilities entered into by Allianz SE or its subsidiaries for
members of the Board of Management of Allianz SE amounted to
€ 300 thou (2022: € 2.0 mn). The interest rates as well as the
collateralization of the loans to members of the Board of
Management are at arm's length. For the members of the Supervisory
Board of Allianz SE, there were no outstanding advances or loans
granted or contingent liabilities entered as of
14,744
31 December 2023 (2022: € 13.6 thou).
€ mn
Personnel expenses
Weighted-
average
exercise
price
€
102,231
13,480.70
Outstanding as of 1
January
Granted
Exercised
Forfeited
59,004
14,364.26
(31,613) 14,299.41
(2,666) 15,112.58
(38,379)
(4,848)
13,080.42
15,165.61
Outstanding as of 31
December
24,725
Personnel expenses
14,979.42
14,364.26
Exercisable as of 31
December
As of 31 December 2023, the aggregate intrinsic value of share
options outstanding was € 121 mn (2022: € 173 mn).
As of 31 December 2023, the M-unit options outstanding have an
exercise price between € 13,140.81 and € 16,119.13, and a weighted-
average remaining contractual life of 0.87 years.
The share options settled by delivery of PIMCO LLC shares are
accounted for as equity-settled plans. Therefore, PIMCO LLC measures
the total compensation expense to be recognized for the equity-
settled shares based on their fair value as of the grant date. The total
compensation expense is recognized over the vesting period.
During the year ended 31 December 2023, the Allianz Group
recorded compensation expenses of € 2 mn (2022: € 7 mn) related to
these share options.
Employee stock purchase plan
The Allianz Group offers Allianz SE shares in 43 countries to entitled
employees at favorable conditions. The shares have a minimum
holding period of three to five years. During the year ended
31 December 2023, the number of shares sold to employees under
these plans was 714,143 (2022: 877,315). From 2018 onwards, the
employees receive one bonus share for three shares bought. For the
year ended 31 December 2023, these bonus shares had an equivalent
value of €41 mn (2022: € 35 mn). During the year ended
31 December 2023, employees were additionally granted
104,383 (2022: 87,172) free shares.
Other share option and shareholding plans
The Allianz Group has other local share-based compensation plans,
including share option and employee share purchase plans, none of
which, individually or in the aggregate, are material to the
consolidated financial statements.
8.18_ Other information
Number of employees
As of 31 December 2023, the Allianz Group employed 157,883 (2022:
159,253) people¹, thereof 39,287 (2022: 39,198) in Germany. The
average total number of employees for the year ended
31 December 2023 was 158,568 (2022: 157,332).
59,004
Board of Management and Supervisory Board compensation by
individual is included in the Remuneration Report.
Fees to the Auditor
PricewaterhouseCoopers GmbH
Wirtschaftsprüfungsgesellschaft
In January 2024, Allianz SE has placed a subordinated bond in the
amount of € 1.0 bn. The bond has a scheduled maturity in July 2054
and is callable at the option of the issuer from January 2034. The
coupon is fixed at 4.851% per annum until July 2034. Thereafter,
bondholders will receive a floating rate coupon.
Allianz SE bought back an amount of € 874.3 mn of its € 1.5 bn
3.375% subordinated bond via a tender offer. € 625.7 mn remain
outstanding. This bond has no scheduled maturity and has ordinary call
rights of the issuer from September 2024.
Share buy-back program 2024
In February 2024, Allianz SE has resolved a new share buy-back
program with a volume of up to € 1.0 bn, starting in March 2024.
Allianz SE will cancel all repurchased shares.
1_The relevant share price used to determine the final number of RSUs granted is only available after the
sign-off of the Annual Report by the external auditors, thus numbers are based on a best estimate.
2_The disclosure in the Annual Report 2022 was based on a best estimate of the RSU grants. The figures
shown here for 2022 now include the actual fair value as of the grant date (3 March 2023). The value
therefore differs from the amount disclosed last year.
244
Annual Report 2023 - Allianz Group
D_Consolidated Financial Statements
8.20 List of participations of the Allianz Group as of 31 December 2023 according to § 313 (2) HGB
% owned¹
% owned¹
% owned¹
Placement and partial buy-back of subordinated
bonds
Germany
100.0 3
Consolidated affiliates
ACP GmbH & Co. Beteiligungen KG II, Munich
Allianz Hanau Logistics GmbH & Co. KG, Stuttgart
100.0
Allianz Taunusanlage GbR, Stuttgart
Allianz Technology SE, Munich
99.5
100.0
0.0 2
Allianz Hirschgarten GmbH & Co. KG, Stuttgart
100.0
Allianz Treuhand GmbH, Stuttgart
100.0
Allianz GRGB Fonds, Frankfurt am Main
8.19_Subsequent events
Tax services primarily refer to tax compliance services, other
services mainly refer to consulting services.
Audit services primarily relate to services rendered for the audit of the
Allianz Group's consolidated financial statements, the audit of the
statutory financial statements of Allianz SE and its subsidiaries, the
audit of the Allianz Group's Solvency II market value balance sheet as
well as those of Allianz SE and its subsidiaries. In addition, a review of
the Allianz Group's consolidated interim financial statements was
performed. The 2023 and 2022 fees for audit services include fees for
the implementation audit of IFRS 9 and IFRS 17.
(PwC GmbH) is the external auditing firm for the Allianz Group.
In the financial year, the following fees were recognized for
services rendered by PwC GmbH and the worldwide member firms of
PricewaterhouseCoopers International Limited (PwCIL):
PwC fees
€ mn
PwCIL
2023
2022
thereof: PwC GmbH
2023
2022
Audit services
79.3
79.0
21.0
22.9
Other attestation
services
6.8
6.0
2.0
1.6
Tax services
1.5
1.5
Other services
Total
5.4
6.3
1.8
93.0
92.8
24.8
0.9
25.4
Allianz Private Krankenversicherungs-Aktiengesellschaft, Munich
Allianz ProzessFinanz GmbH, Munich
Annual Report 2023 - Allianz Group
100.0
100.0
100.0
AZRE AZD P&C Master Fund, Frankfurt am Main
AZ-SGD Classic Infrastrukturfonds GmbH, Munich
100.0 3
REC Frankfurt Objekt GmbH & Co. KG, Hamburg
80.0
100.0
REC Frankfurt zweite Objektverwaltungsgesellschaft mbH,
Hamburg
60.0
AZ-SGD Direkt Infrastruktur GmbH, Munich
AZ-SGD Infrastrukturfonds GmbH, Munich
100.0
Windpark Quitzow Repowering GmbH & Co. KG, Sehestedt
Windpark Redekin-Genthin GmbH & Co. KG, Sehestedt
Windpark Redekin-Genthin Repowering GmbH & Co. KG, Sehestedt
Windpark Schönwalde GmbH & Co. KG, Sehestedt
100.0
100.0
100.0
100.0
100.0
RehaCare GmbH Gesellschaft der medizinischen und
beruflichen Rehabilitation, Munich
100.0
AZ-SGD Private Equity Fonds 2 GmbH, Munich
100.0
Roland Holding GmbH, Munich
75.6
AZ-SGD Private Equity Fonds GmbH, Munich
100.0
Seine GmbH, Munich
100.0
AZT Automotive GmbH, Ismaning
100.0
100.0
Windpark Pröttlin Repowering GmbH & Co. KG, Sehestedt
Windpark Quitzow GmbH & Co. KG, Sehestedt
Projekt Hirschgarten MK8 GmbH & Co. KG, Stuttgart
AZL-Argos 43 Vermögensverwaltungsgesellschaft mbH, Munich
AZL-Argos 53 Vermögensverwaltungsgesellschaft mbH, Munich
AZL-Argos 63 Vermögensverwaltungsgesellschaft mbH, Munich
AZL-Argos 73 Vermögensverwaltungsgesellschaft mbH, Munich
AZL-Argos 83 Vermögensverwaltungsgesellschaft mbH, Munich
AZL-Argos 89 Vermögensverwaltungsgesellschaft mbH, Munich
AZL-Argos 93 Vermögensverwaltungsgesellschaft mbH, Munich
AZL-Private Finance GmbH, Stuttgart
100.0
MAWISTA GmbH, Plochingen
100.0
Windpark Kirf Repowering GmbH & Co. KG, Sehestedt
100.0
100.0
META Finanz-Informationssysteme GmbH, Munich
100.0
Windpark Kittlitz GmbH & Co. KG, Sehestedt
100.0
100.0
Mondial Kundenservice GmbH, Nuremberg
100.0
100.0 4
94.9
100.0
myHealth X GmbH, Munich
100.0
PIMCO EM Corporates, Frankfurt am Main
100.0
100.0 3
Windpark Kittlitz Repowering GmbH & Co. KG, Sehestedt
Windpark Kleeste Repowering GmbH & Co. KG, Sehestedt
Windpark Pröttlin GmbH & Co. KG, Sehestedt
100.0
100.0
100.0
100.0
PIMCO Europe GmbH, Munich
100.0
PIMCO Prime Real Estate GmbH, Munich
100.0
100.0
100.0
Windpark Schönwalde Repowering GmbH & Co. KG, Sehestedt
Windpark Waltersdorf GmbH & Co. KG Renditefonds, Sehestedt
Windpark Waltersdorf Repowering GmbH & Co. KG, Sehestedt
Windpark Werder Zinndorf GmbH & Co. KG, Sehestedt
100.0
100.0
BrahmsQ Objekt GmbH & Co. KG, Stuttgart
94.8
UfS Beteiligungs-GmbH, Munich
100.0
Allianz Objektbeteiligungs-GmbH, Stuttgart
100.0
ControlExpert GmbH, Langenfeld
100.0
VCIS Germany GmbH, Cologne
50.0 2
Allianz Pension Consult GmbH, Stuttgart
100.0
100.0
ControlExpert Holding GmbH, Langenfeld
Vivy GmbH, Berlin
Allianz zweite Objektbeteiligungs-GmbH, Stuttgart
100.0
100.0
Deutsche Lebensversicherungs-Aktiengesellschaft, Berlin
100.0
AZ Beteiligungs-Management GmbH, Munich
100.0
VLS Versicherungslogistik GmbH, Berlin
100.0
DONATOR Beratungs GmbH, Munich
100.0
Volkswagen Autoversicherung AG, Braunschweig
100.0
100.0
Allianz Global Benefits GmbH, Stuttgart
52.0
100.0
100.0
Seine Il GmbH, Munich
100.0
AZV-Argos 72 Vermögensverwaltungsgesellschaft mbH, Munich
100.0
simplesurance GmbH, Berlin
100.0
AZV-Argos 77 Vermögensverwaltungsgesellschaft mbH, Munich
AZV-Argos 82 Vermögensverwaltungsgesellschaft mbH, Munich
AZV-Argos 87 Vermögensverwaltungsgesellschaft mbH, Munich
Blitz 23-354 GmbH, Munich
100.0
Windpark Werder Zinndorf Repowering GmbH & Co. KG, Sehestedt
Wintec Autoglas GmbH, Limburg an der Lahn
100.0
100.0
Syncier GmbH, Munich
Solvd GmbH, Munich
100.0
Spherion Beteiligungs GmbH & Co. KG, Stuttgart
100.0
100.0
Non-consolidated affiliates
Spherion Objekt GmbH & Co. KG, Stuttgart
89.9
100.0
AERS Consortio Aktiengesellschaft, Stuttgart
55.3
Spherion Verwaltungs GmbH, Stuttgart
100.0
Blue Incite GmbH, Munich
100.0
100.0
100.0
Windpark Kesfeld Repowering GmbH & Co. KG, Sehestedt
Windpark Kesfeld-Heckhuscheid GmbH & Co. KG, Sehestedt
Windpark Kirf GmbH & Co. KG, Sehestedt
100.0
AREF III GER 2 GmbH, Frankfurt am Main
100.0
100.0
AREF III GER GmbH & Co. KG, Frankfurt am Main
100.0
100.0 3
Ashmore Emerging Market Corporates, Frankfurt am Main
100.0
Allianz Risk Consulting GmbH, Munich
100.0
atpacvc Fund GmbH & Co. KG, Munich
100.0
Allianz Renewable Energy Management GmbH, Sehestedt
Allianz Renewable Energy Subholding GmbH & Co. KG, Sehestedt
Allianz RFG Fonds, Frankfurt am Main
Allianz SDR Fonds, Frankfurt am Main
atpacvc GmbH, Munich
100.0
Allianz Focus Teleport Beteiligungs-GmbH & Co. KG, Stuttgart
100.0
Allianz Global Corporate & Specialty SE, Munich
100.0
Allianz SE Ashmore Emerging Markets Corporates Fund,
Frankfurt am Main
atpacvc GP GmbH, Munich
100.0
100.0 3
Atropos Vermögensverwaltungsgesellschaft mbH, Munich
100.0
Allianz Global Investors GmbH, Frankfurt am Main
100.0 3
100.0
100.0
100.0 3
100.0
Allianz FAD Fonds, Frankfurt am Main
100.0
100.0
Allianz PV-RD Fonds, Frankfurt am Main
92.4 3
Allianz Direct Versicherungs-AG, Munich
100.0
Allianz PV-WS Fonds, Frankfurt am Main
92.43
Allianz DLVR Fonds, Frankfurt am Main
100.0 3
Allianz Re Asia Fonds, Frankfurt am Main
100.0 3
ARE Funds APK GmbH, Munich
ARE Funds APKV GmbH, Munich
ARE Funds AZL GmbH, Munich
ARE Funds AZV GmbH, Munich
Allianz Finanzbeteiligungs GmbH, Munich
100.0
100.0
100.0
Allianz EEE Fonds, Frankfurt am Main
100,0 3
Allianz Rechtsschutz-Service GmbH, Munich
100.0
AREF III GER 1 GmbH, Frankfurt am Main
100.0
Allianz EP GmbH, Munich
100.0
Allianz Esa EuroShip GmbH, Bad Friedrichshall
51.0
Allianz Esa GmbH, Bad Friedrichshall
100.0
Allianz SE-PD Fonds, Frankfurt am Main
100.0 3
Auros II GmbH, Munich
AZ-Arges Vermögensverwaltungsgesellschaft mbH, Munich
AZ-Argos 56 Vermögensverwaltungsgesellschaft mbH, Munich
AZ-Argos 71 Vermögensverwaltungsgesellschaft mbH & Co. KG,
Munich
100.0
Innovation Group Fleet & Mobility GmbH, Stuttgart
Innovation Group Germany GmbH, Stuttgart
100.0
Windpark Emmendorf GmbH & Co. KG, Sehestedt
100.0
100.0
100.0
Innovation Group Parts GmbH, Lauchhammer
100.0
Innovation Group Property GmbH, Cologne
100.0
100.0
94.0
Windpark Emmendorf Repowering GmbH & Co. KG, Sehestedt
Windpark Freyenstein-Halenbeck GmbH & Co. KG, Sehestedt
Windpark Freyenstein-Halenbeck Repowering GmbH & Co. KG,
Sehestedt
100.0
100.0
Innovation Group Services GmbH, Leipzig
100.0
AZ-Argos 88 Vermögensverwaltungsgesellschaft mbH, Munich
AZL FOUR T1 GmbH, Frankfurt am Main
100.0
Kaiser X Labs GmbH, Munich
100.0
100.0
AZL PE Nr. 1 GmbH, Munich
100.0
KVM ServicePlus - Kunden- und Vertriebsmanagement GmbH,
Halle (Saale)
100.0
100.0
100.0
100.0
Windpark Dahme Repowering GmbH & Co. KG, Sehestedt
Windpark Eckolstädt GmbH & Co. KG, Sehestedt
100.0
Allianz Global Investors Holdings GmbH, Frankfurt am Main
100.0
Allianz Service Center GmbH, Unterföhring
100.0
AV8 Ventures II GmbH & Co. KG, Munich
100.0
Allianz GLR Fonds, Frankfurt am Main
100.0 3
Allianz GLRS Fonds, Frankfurt am Main
100.0 3
Allianz SOA Fonds, Frankfurt am Main
Allianz Stromversorgungs-GmbH, Munich
100.0
100.0
AVS Automotive VersicherungsService GmbH, Rüsselsheim
AZ ATLAS GmbH & Co. KG, Stuttgart
100.0
94.9
245
Annual Report 2023 - Allianz Group
D_Consolidated Financial Statements
% owned¹
% owned¹
% owned¹
AZ ATLAS Immo GmbH, Stuttgart
AZ ATLAS Verwaltungs-GmbH, Stuttgart
AZ Northside GmbH & Co. KG, Stuttgart
100.0
100.0
IDS GmbH - Analysis and Reporting Services, Munich
Innovation Group AG, Stuttgart
100.0
100.0
APKV-Argos 74 Vermögensverwaltungsgesellschaft mbH, Munich
APKV-Argos 84 Vermögensverwaltungsgesellschaft mbH, Munich
369
100.0
2023
219.06
Annual Report 2023 - Allianz Group
D_Consolidated Financial Statements
Defined contribution plans
Defined contribution plans are funded through independent pension
funds or similar organizations. Contributions fixed in advance (e.g.,
based on salary) are paid to these institutions and the beneficiary's
right to benefits exists against the pension fund. The employer has no
obligation beyond payment of the contributions.
During the year ended 31 December 2023, the Allianz Group
recognized expenses for defined contribution plans of € 319 mn (2022:
€ 345 mn). Additionally, the Allianz Group paid contributions for state
pension schemes of € 402 mn (2022: € 342 mn).
The following table shows the assumptions used in calculating the
fair value of the RSUs at grant date:
Assumptions of AEI plans
Year of issue¹
Share price
Average dividend
yield of Allianz SE
share
€
20242
247.32
Number of
options
Weighted-
2023
Reconciliation of outstanding M-unit options
The number and weighted-average exercise price of the M-unit
options outstanding and exercisable are as follows:
According to an amendment of the PIMCO LLC Class M-unit Plan,
no new M-unit options will be issued after 14 March 2020. Already
issued and outstanding M-unit options remain valid and continue as is.
The fair value of the underlying M-unit options was measured
using the Black-Scholes option pricing model. Volatility was derived in
part by considering the average historical and implied volatility of a
selected group of peers. The expected life of one granted option was
calculated based on treating the three vesting tranches (one third in
years 3, 4, and 5) as three separate awards.
A maximum of 250,000 M-units are authorized for issuance under
the M-unit Plan.
In 2008, AllianzGI L.P. launched a management share-based payment
incentive plan for certain senior-level executives and affiliates of
PIMCO LLC. Participants in the plan are granted options to acquire an
own class of equity instruments (M-units), which vest in one-third
increments on approximately the third, fourth, and fifth anniversary of
the option grant date. Upon vesting, options will automatically be
exercised in a cashless transaction, provided they are in the money.
Participants may elect to defer the receipt of M-units through the M-
unit Deferral Plan until termination of their service at the latest. With
the M-unit Plan, participants can directly participate in PIMCO's
performance. Class M-units are non-voting common equity with
limited information rights. They bear quarterly distributions equal to a
pro-rata share of PIMCO's net distributable income. Deferred M-units
have a right to receive a quarterly cash compensation equal to and in
lieu of quarterly dividend payments.
PIMCO LLC Class M-unit plan
D_Consolidated Financial Statements
Annual Report 2023 - Allianz Group
242
1_For detailed information regarding the LTI plans and the remuneration policy for the members of the
Allianz SE's Board of Management, please see the Remuneration Report.
As of 31 December 2023, the Allianz Group recorded provisions of
€ 79 mn (2022: € 41 mn) for these index-linked RSUs in other liabilities.
The index-linked RSUs are accounted for as cash-settled plans
because the Allianz Group settles in cash. Therefore, the Allianz Group
accrues the fair value of the RSUs as compensation expenses over the
IFRS vesting period. During the year ended 31 December 2023, the
Allianz Group recognized compensation expenses related to the LTI
plans of € 38 mn (2022: € 16 mn).
241
92.3
For the year ending 31 December 2024, the Allianz Group expects to
contribute € 235 mn to its defined benefit plans (2022: € 229 mn for
the year ending 31 December 2023), and to pay € 486 mn directly to
participants in its defined benefit plans (2022: € 431 mn for the year
ending 31 December 2023).
The bulk of the plan assets are held by Allianz Versorgungskasse
VVaG, Munich, which is not part of the Allianz Group. Plan assets do
not include any real estate used by the Allianz Group, and include only
€ 4.7 mn (2022: € 4.0 mn) of its own transferable financial instruments.
In addition to the plan assets of € 14.4 bn (2022: € 13.7 bn), the
Allianz Group has dedicated assets at Group level amounting to
€ 8.7 bn as of 31 December 2023 (2022: € 7.1 bn), which are likewise
managed according to Allianz ALM standards.
Debt securities
Quoted
Non-quoted
Real estate¹
%
Life insurance investment products¹
Other³
Total
2023
2022
1,444
43
1,268
31
3,233
3,174
2,197
1,837
910
948
5,208
4,845
1,440
1,329
(30)
315
14,445
13,749
1_Real estate, annuity contracts, and life insurance investment products are generally non-quoted.
2_Includes as of 31 December 2023 € 608 mn (2022: € 467 mn) in the United Kingdom due to buy-
ins.
3_Includes as of 31 December 2023 € (305) mn in the U.K. due to gilt repurchase agreements within
the Fund's gilt portfolios. The loan leg of this structure, which is used to hedge the interest rate
and inflation risk of the Fund's liabilities efficiently, is treated as a negative cash balance.
Contributions
1_The LTI RSUs are granted as part of the remuneration of the respective prior year.
2_The assumptions for RSU grants delivered in March 2024 are based on best estimate.
86.8
88.4
Long-term incentive plan (LTI plan)
As of 31 December 2023, the Allianz Group recorded provisions of
€ 415 mn (2022: € 326 mn) for these RSUs in other liabilities.
The RSUs are accounted for as cash-settled plans because the
Allianz Group intends to settle in cash. Therefore, the Allianz Group
accrues the fair value of the RSUs as compensation expenses over the
IFRS vesting period. During the year ended 31 December 2023, the
Allianz Group recognized compensation expenses related to the AEI
plans of € 219 mn (2022: € 113 mn).
1_The AEI RSUs are granted as part of the remuneration of the respective prior year.
2_The assumptions for RSU grants delivered in March 2024 are based on best estimate.
The RSUs are virtual stocks without dividend payments and with
a capped payout. The fair value is calculated by subtracting the net
present value of expected future dividend payments until maturity, as
well as the fair value of the cap from the prevailing share price as of
the valuation date. The cap is valued as a European short call option,
using prevailing market data as of the valuation date.
In addition, upon the death of a plan participant, a change of
control or notice for operational reasons, the RSUs vest immediately
and are exercised by the company.
The RSUs are subject to a contractual vesting period of four years
and the payout per RSU is fixed on the last day of the contractual
vesting period, which ends on the tenth trading day following the
annual financial media conference in the year the respective AEI plan
expires.
The RSU granted to a plan participant obligates the Allianz Group
to pay in cash the ten-day average Xetra closing price of the Allianz SE
share on the vesting day, or to convert one RSU into one Allianz SE
share. The Allianz Group can choose the settlement method for each
unit. The payout is capped at a 200% share price growth above the
grant price.
The AEI plan is granted in the form of restricted stock units (RSUs) and
is part of the variable compensation component for the plan
beneficiaries.
Allianz equity incentive plan (AEI plan)
8.17 Share-based compensation
plans
The following table shows the assumptions used in calculating the
fair value of the index-linked RSUs at grant date:
The fair value of the index-linked RSUs is calculated as the present
value of the expected future payout, taking into account the link
between share price performance and relative performance compared
to the index, as well as the relevant caps and thresholds as defined in
the payout formula. The expected future payout is determined on the
basis of observable market data as of the valuation date and market
standard simulation techniques.
applicable to the total compensation including the LTI payout and
various other compensation components.
21.2
20.2
2022
200.99
%
5.1
5.3
Average interest rate
%
3.0
3.3
5.8
(0.3)
Expected volatility of
the Allianz SE share
price
Under the LTI plan, awards are granted in the form of index-linked
restricted stock units (RSUs) which are part of the remuneration policy¹
for the members of Allianz SE's Board of Management.
RSUS granted to the members of the Board of Management
obligate Allianz SE to pay per RSU a cash amount equal to the ten-day
average Xetra closing price of the Allianz SE share on the last day of the
contractual vesting period, multiplied by a performance factor which
reflects the total performance of the Allianz stock, relative to the total
performance of the STOXX Europe 600 Insurance Index during the four-
year contractual vesting period.
The contractual vesting period ends on the tenth trading day
following the annual financial media conference in the year the
respective RSU award expires. The payout per RSU is subject to a 200%
share price cap relative to the share price at the grant date and a 200%
cap applied to the performance factor. In addition, there is a cap
Assumptions of LTI plans
%
share price and index
of the Allianz SE
Expected correlation
18.4
16.4
17.1
%
Expected volatility of
the index
21.9
20.3
19.3
%
As of 31 December
Equity securities
Quoted
Non-quoted
0.0
2.3
%
Average interest rate
Expected volatility of
the Allianz SE share
price
5.8
5.3
5.1
%
2022
200.99
2023
219.06
20242
247.32
€
Share price
Average dividend
yield of Allianz SE
share
Year of issue¹
3.2
€ mn
Annuity contracts¹,2
Due to а well-diversified portfolio of approximately
132,000 (2022: 129,000) plan participants, no reasonable uncertainty
is expected with regard to future cash flows that could affect the
liquidity of the Allianz Group. The following chart shows the asset
allocation:
46
24
19
23
(19)
Balance as of 31 December²
22,576
21,274
14,445
13,749
110
110
8,242
7,635
Changes in the consolidated subsidiaries of the Allianz Group
thereof assets
(358)
thereof liabilities
8,669
7,994
Thereof allotted to:
Germany
United Kingdom
Switzerland
18,617
1,129
1,640
17,513
1,055
1,511
10,468
9,998
8,150
(427)
7,515
(2)
4
(369)
(2,607)
(691)
Plan participants' contributions
Benefits paid
Acquisitions and divestitures
113
118
113
118
(855)
(839)
(621)
(496)
(233)
(19)
(342)
3
1
3
Settlement payments/assets distributed on settlement
(1)
(329)
(1)
(321)
(8)
Foreign currency translation adjustments
115
27
140
33
1
1,210
1,214
(81)
3.2
3.6
This includes the following country rates:
Germany
long duration
3.2
3.7
short duration
3.2
3.7
United Kingdom
4.5
4.8
Switzerland
Discount rate
1.5
Rate of compensation increase
1.9
1.8
Rate of pension increase
2.2
2.2
Rate of medical cost trend
5.6
9.4
The recognized expenses are recorded based on the assumptions of
the corresponding previous year.
The discount rate assumption is the most significant risk for the
defined benefit obligation. It reflects market yields at the balance
sheet date of high-quality fixed-income investments corresponding to
the currency and duration of the liabilities. In the eurozone, the decision
for the discount rate is based on AA-rated financial and corporate
bonds, and a standardized cash flow profile for a mixed population.
The range for the sensitivity calculations was derived by analyzing
the average volatility over a five-year period.
An increase in the discount rate by 50 basis points would lead to
a decrease of € 1.0 bn (2022: € 1.0 bn) in the defined benefit
obligation, whereas a decrease in the discount rate by 50 basis points
would lead to an increase of € 1.2 bn (2022: 1.1 bn).
An increase of pre-retirement benefit assumptions (e.g., a salary
increase) of 25 basis points would have an effect of € 42 mn (2022:
€ 39 mn) on the defined benefit obligation. However, the increase of
post-retirement assumptions (e.g., inflation-linked increases of pension
payments) of 25 basis points would increase the defined benefit
obligation by € 359 mn (2022: € 343 mn).
Plan assets/Asset liability management (ALM)
Based on the estimated future cash flows of € 1,058 mn for 2024,
€ 989 mn for 2025, € 1,035 mn for 2026, € 1,087 mn for 2027,
€ 1,109 mn for 2028, and € 5,585 mn for 2029 - 2033, the weighted
duration of the defined benefit obligation is 13.9 (2022: 14.0) years.
Based on the liability profiles of the defined benefit obligation and on
the regulatory funding requirements, the Allianz Group uses stochastic
asset liability models to optimize the asset allocation from a risk-return
perspective.
1.8
2022
2023
As of 31 December
(159)
1,930
1,718
109
109
(181)
(97)
1_The asset ceiling is determined by taking into account the reduction of future contributions.
2_As of 31 December 2023, € 5,335 mn (2022: € 4,934 mn) of the defined benefit obligation is wholly unfunded, while € 17,241 mn (2022: € 16,339 mn) is wholly or partly funded.
As of 31 December 2023 and 2022, post-retirement health benefits
were immaterial.
Asset allocation of plan assets
18.0
Annual Report 2023 - Allianz Group
%
Assumptions for defined benefit plans
The weighted average values of the assumptions for the
Allianz Group's defined benefit plans used to determine the defined
benefit obligation and the recognized expenses are as follows:
old male plan participant about 87.4(2022: 86.9) years. An
increase in life expectancy by one year would lead to an increase of
the defined benefit obligation by € 519 mn (2022: € 493 mn).
The calculations are based on current actuarially calculated
mortality tables, projected turnover depending on age and length of
service, and internal Allianz Group retirement projections. Although
this represents the best estimate as of today, considering a further
increase in life expectancy could be reasonable. The weighted
average life expectancy of a currently 65-year-old female plan
participant is about 89.3 (2022: 89.6) years, and of a currently 65-year-
The assumptions for the actuarial computation of the defined benefit
obligation and the recognized expenses depend on the circumstances
in the country where the plan has been established.
Assumptions
D_Consolidated Financial Statements
240
MFM Holding Ltd., London
Lennar Multifamily Venture LP, Wilmington, DE
113 3,8
Sino Phil Limited, Hong Kong
16.4 8
Link (LRM) Limited, Hong Kong
Smart Citylife S.r.l., Milan
Luxury Gain Limited, Hong Kong
Medgulf Takaful B.S.C.(c), Sanabis
16.4 8
Long Coast Limited, Hong Kong
50.1
Sierra European Retail Real Estate Assets Holdings B.V., Amsterdam
30.0
Delong Limited, Hong Kong
16.4 8
Quadgas Holdings Topco Limited, Saint Helier
Redwood Japan Logistics Fund II LP, Singapore
Residenze CYL S.p.A., Milan
13.08
32.2
33.3
10.0 8
Douglas Emmett Partnership X LP, Wilmington, DE
28.13
33.0
ERES APAC II (GP) S.à r.l., Luxembourg
29.5 3
Sanlam Allianz Africa (Pty) Ltd., Cape Town
41.0
European Outlet Mall Fund, Luxembourg
Saint-Barth Assurances S.à r.L., Saint Barthelemy
Santéclair S.A., Nantes
Delgaz Grid S.A., Târgu Mures
The Allianz Group refrains from disclosure of participations which are
not included in one of the above categories, as they are of minor
importance for giving a true and fair view of the assets, liabilities,
financial position, and profit or loss of the Allianz Group.
29.0
Broker on-line de Productores de Seguros S.A., Buenos Aires
PIMCO Income Fundo De Investimento Multimercado
Investimento No Exterior, Rio de Janeiro
30.0
Carlyle China Realty L.P., George Town
50.0 3,8
Carlyle China Rome Logistics L.P., George Town
Cronos Vita S.p.A., Milan
38.2 3
CBRE Dutch Office Fund, Schiphol
Prime Space Limited, Hong Kong
Chicago Parking Meters LLC, Wilmington, DE
26.03
49.9
4.5 3,8
15.0 8
16.4 8
16.4 8
Professional Agencies Reinsurance Limited, Hamilton
17.5 8
Pool-ul de Asigurare Impotriva Dezastrelor Naturale SA, Bucharest
Praise Creator Limited, Hong Kong
25.0
26.03
Fóndika S.A. de C.V. Distribuidora de Acciones de Fondos de
Scape Core Fund Operator Pty Ltd., Sydney
27.63
Glory Basic Limited, Hong Kong
16.4 8
Scape Core Fund Trust, Sydney
27.63
HPS A-Life Direct Lending Fund L.P., Wilmington, DE
16.4 8
100.0 8
50.0 3,8
HUB Platform Technology Partners Ltd., London
28.6
SCI Bercy Village, Paris
49.0
Jumble Succeed Limited, Hong Kong
16.4 8
Scape Holding Operator 2 Pty Ltd., Sydney
46.6
Global Stream Limited, Hong Kong
27.63
SAS Alta Gramont, Paris
49.0
Inversión, Mexico City
26.8
Scape Australia (Vulture) Trust, Sydney
27.63
Four Oaks Place LP, Wilmington, DE
8.6 8
49.0
Fuella AS, Sandsli
35.0
74.4 3,8
Scape Australia Holding Trust, Sydney
Scape Australia Investment Trust No. 2, Sydney
Scape Australia Management Pty Ltd., Sydney
50.0 3,8
France Investissement Relance 2020, Paris
16.4 8
100.0
49.0
100.0
Innovation Holdings (South Africa) (Pty) Ltd., Johannesburg
100.0
Mombyasen Wind Farm AB, Halmstad
100.0
Global Carena S.L., Madrid
100.0
Innovation IP (Pty) Ltd., Johannesburg
100.0
Morningchapter S.A., Ourique
100.0
Global Manzana S.L., Madrid
100.0
Innovation Property (UK) Limited, Whiteley
100.0
Motorcare Services Limited, Whiteley
100.0
Global Besande S.L., Madrid
100.0
Mindseg Corretora de Seguros Ltda., São Bernardo do Campo
100.0
100.0
100.0
Medicount (Private) Limited, Islamabad
100.0
100.0
MediCount Global Ltd., Ebene
71.6
100.0
Global Transport & Automotive Insurance Solutions Pty Limited,
Innovation Group Namibia (Pty) Ltd., Windhoek
Medicount Healthcare Private Limited, Bangalore
100.0
100.0 3
100.0
Innovation Group Poland Sp. z o.o., Warsaw
100.0
Michael Ostlund Property S.A., Brussels
100.0
Innovation Group Services (Pty) Ltd., Johannesburg
100.0
Medi24 AG, Bern
Innovation ROA Limited, Grand Baie
Multiasistencia S.A., Madrid
100.0
Neoasistencia Manoteras S.L., Madrid
100.0
GT Motive Einsa Unipessoal Lda., Lisbon
100.0
Investitori SGR S.p.A., Milan
100.0
Nextcare Bahrain Ancillary Services Company B.S.C., Manama
100.0
GT Motive GmbH, Freienbach
100.0
Järvsö Sörby Vindkraft AB, Danderyd
100.0
NEXTCARE Claims Management LLC, Dubai
100.0
GT Motive Limited, London
100.0
Investitori Real Estate Fund, Milan
100.0
Grus MF GK, Tokyo
100.0
100.0
Sydney
100.0
Intermediass S.r.l., Milan
100.0
Multiassistance S.A., Saint-Ouen
100.0
Great Lake Funding I LP, Wilmington, DE
100.0
100.0 3
100.0
My Health Services (Thailand) Company Limited, Bangkok
100.0
Grupo Multiasistencia S.A., Madrid
100.0
Investitori Logistic Fund, Milan
100.0 3
National Surety Corporation, Chicago, IL
Interstate Fire & Casualty Company Corp., Chicago, IL
SNC Alta CRP Gennevilliers, Paris
100.0
24.9
12.28
19.5
New Try Limited, Hong Kong
16.4 8
Nordic Ren-Gas Oy, Espoo
30.0
Ocean Properties LLP, Singapore
20.0
ULLIS Investments S.A. SICAV-RAIF, Luxembourg
Upward America Venture LP, Wilmington, DE
Vanbreda Nederland B.V., Gouda
27.9
24.03
25.0
Wildlife Works Carbon LLC, Wilmington, DE
9.6 8
257
Annual Report 2023 - Allianz Group
FURTHER INFORMATION
Tikehau Real Estate III SPPICAV, Paris
UK Outlet Mall Partnership LP, Edinburgh
25.0
National Insurance Company Berhad Ltd., Bandar Seri Begawan
27.3
16.4 8
SNC Alta CRP La Valette, Paris
49.0
25.0
SNC Société d'aménagement de la Gare de l'Est, Paris
49.0
30.1
Summer Blaze Limited, Hong Kong
E
16.4 8
16.4 8
Supreme Cosmo Limited, Hong Kong
16.4 8
MSP Equity Fund LP, Wilmington, DE
21.0
Sure Rainbow Limited, Hong Kong
16.4 8
MTech Capital Fund (EU) SCSp, Luxembourg
Modern Diamond Limited, Hong Kong
Innovation Group Distribution (Pty) Ltd., Johannesburg
Innovation Group Fund Management (Pty) Ltd., Johannesburg
Innovation Group Holdings Limited, Whiteley
258
100.0
% owned¹
% owned¹
% owned¹
Fu An Management Consulting Co. Ltd., Beijing
Galore Expert Limited, Hong Kong
1.0 2
100.0
Innovation Group (Pty) Ltd., Johannesburg
75.0
Magni Holding JV S.à r.L., Luxembourg
57.7
Innovation Group Business Services Limited, Whiteley
100.0
MCF Immocap Value, Paris
100.0
Generation Vie S.A., Paris la Défense
52.5
Gestion de Téléassistance et de Services S.A., Châtillon
GIE Euler Hermes Facturation France, Paris la Défense
GIE Euler Hermes SFAC Services, Paris la Défense
Glärnisch Institutional Fund - Obligationen Welt, Basel
Global Azawaki S.L., Madrid
100.0
D_Consolidated Financial Statements
Annual Report 2023 - Allianz Group
252
100.0
Euler Hermes Recouvrement France S.A.S., Paris la Défense
100.0
Dimo Computing Ltd., Whiteley
100.0
Dresdner Kleinwort Pfandbriefe Investments II Inc., Wilmington, DE
EDCO Berkeley S.à r.L., Luxembourg
Euler Hermes Reinsurance AG, Wallisellen
100.0
100.0
Annual Report 2023- Allianz Group
Euler Hermes Risk Yönetimi A.S., Istanbul
100.0
FPCI InnovAllianz, Paris
Fragonard Assurances S.A., Saint-Ouen
Franklin S.C.S., Luxembourg
Friederike MLP S.à r.L., Luxembourg
99.63
100.0
94.5
100.0
19.9 3,8
Allianz Impact Investment Fund S.A. SICAV-RAIF, Senningerberg
Blue Vista Student Housing Select Strategies Fund L.P.,
Wilmington, DE
50.0
34.37
SCI Docks V3, Paris la Défense
50.0
100.0
BCal Houston JV L.P., Wilmington, DE
39.27
SES Shopping Center AT 1 GmbH, Salzburg
50.0
Windpark Zistersdorf GmbH, Pottenbrunn
100.0
BL West End Offices Limited, London
75.07
SES Shopping Center FP 1 GmbH, Salzburg
50.0
Windpower Ujscie Sp. z o.o., Poznan
100.0
SCI Docks V2, Paris la Défense
50.0
56.0 7
RMPA Holdings Limited, Colchester
Porterbrook Holdings I Limited, Derby
30.07
Windpark Ladendorf GmbH, Pottenbrunn
Windpark Les Cent Jalois SAS, Versailles
Windpark LOI GmbH, Pottenbrunn
Windpark PDV GmbH, Pottenbrunn
Windpark PL GmbH, Pottenbrunn
Windpark Scharndorf GmbH, Pottenbrunn
100.0
100.0
Canis MF TMK, Tokyo
100.0
100.0
Austin West Campus Student Housing LP, Wilmington, DE
AZ/JH Co-Investment Venture (DC) LP, Wilmington, DE
AZ/JH Co-Investment Venture (IL) LP, Wilmington, DE
Bajaj Allianz Financial Distributors Limited, Pune
Bazalgette Equity Ltd., London
45.0
80.0 7
Previndustria - Fiduciaria Previdenza Imprenditori S.p.A., Milan
Queenspoint S.L., Madrid
50.0
50.0
80.0 7
100.0
55.67
49.97
YAO NEWREP Investments S.A., Luxembourg
ZAD Energy AD, Sofia
51.0
CPPIC Euler Hermes Insurance Sales Co. Ltd., Shanghai
49.0 7
Stonecutter JV Limited, London
50.0
Daiwater Investment Limited, Hatfield
36.67
Terminal Venture LP, Wilmington, DE
31.27
Non-consolidated affiliates
Dundrum Car Park GP Limited, Dublin
50.0
Allianz 121 S.r.L., Saluzzo
Allianz 341 S.r.l., Trieste
Allianz CV Investor LP, Wilmington, DE
51.0
50.0
SPREF II Pte. Ltd., Singapore
49.07
CPIC Fund Management Co. Ltd., Shanghai
49.97
94.0
Chapter Master Limited Partnership, New York, NY
45.5 7
Yorktown Financial Companies Inc., Minneapolis, MN
100.0
CHP-AZ Seeded Industrial L.P., Wilmington, DE
49.0
Sirius MF TMK, Tokyo
Solunion Seguros Compañía Internacional de Seguros y
Reaseguros SA, Madrid
ZAD Allianz Bulgaria AD, Sofia
87.4
Corvus MF TMK, Tokyo
25.4
Spanish Gas Distribution Investments S.à r.l., Senningerberg
40.0 7
ZAD Allianz Bulgaria Life AD, Sofia
99.0
50.0
Dundrum Car Park Limited Partnership, Dublin
AS Gasinfrastruktur Beteiligung GmbH, Vienna
44.37
100.0
South City Office Broodthaers SA, Brussels
100.0
SAS Chaponnay Mérieux Logistics, Paris la Défense
100.0
SAS Passage des princes, Paris la Défense
100.0
SpaceCo S.A., Paris la Défense
Vordere Zollamtsstraße 13 GmbH, Vienna
100.0
100.0
SAS Pershing Hall, Paris la Défense
SpecFin CIV LLC, Wilmington, DE
100.0
Warwick Consulting Loss Adjusters Limited, Birmingham
100.0
100.0
Viveole SAS, Versailles
100.0
100.0
Vintage Rents S.L., Madrid
100.0
Vailog Hong Kong DC19 Limited, Hong Kong
Valderrama S.A., Luxembourg
100.0
100.0
100.0
SOFE One Co. Ltd., Bangkok
Vanilla Capital Markets S.A., Luxembourg
100.0 3
Stam Fem Gångaren 11 AB, Stockholm
100.0
SOFE Two Co. Ltd., Bangkok
Vet Envoy Limited, Guildford
100.0
100.0
100.0
SAS Angel Shopping Centre, Paris la Défense
Sofiholding S.A., Brussels
100.0
100.0
100.0
100.0
100.0
100.0
Arcturus MF TMK, Tokyo
51.07
Orion MF TMK, Tokyo
49.9
Windpark EDM GmbH, Pottenbrunn
100.0
AREAP Core | LP, Singapore
50.0
Piaf Bidco B.V., Amsterdam
23.9
Windpark EDM GmbH & Co. KG, Pottenbrunn
100.0
AREAP JMF 1 LP, Singapore
33.3
Windpark GHW GmbH, Pottenbrunn
Podium Fund HY REIT Owner LP, Wilmington, DE
60.0 7
Windpark AO GmbH, Pottenbrunn
Ophir-Rochor Commercial Pte. Ltd., Singapore
75.07
SAS Société d'Exploitation du Parc Eolien de Nélausa, Versailles
100.0
StocksPLUS Management Inc., Dover, DE
Weihong (Shanghai) Storage Services Co. Ltd., Shanghai
Weilong (Hubei) Storage Services Co. Ltd., Ezhou
100.0
100.0
100.0
Weilong (Jiaxing) Storage Services Co. Ltd., Jiaxing
SAS Société d'Exploitation du Parc Eolien d'Aussac Vadalle, Versailles
100.0
Annual Report 2023 - Allianz Group
D_Consolidated Financial Statements
% owned¹
% owned¹
% owned¹
Weiyi (Shenyang) Storage Services Co. Ltd., Shenyang
100.0
AMLI-Allianz Investment LP, Wilmington, DE
255
50.0
51.0
Dundrum Retail GP Designated Activity Company, Dublin
27.7 3
49.97
Archstone Multifamily Partners AC LP, Wilmington, DE
28.6
3
50.0 3
NeuConnect Holdings B.V., Amsterdam
25.07
Areim Fastigheter 2 AB, Stockholm
23.3
50.0
49.97
NRF (Finland) AB, Stockholm
50.0
NRP Nordic Logistics Fund AS, Oslo
49.5 7
Areim Fastigheter 3 AB, Stockholm
Assurcard S.A., Louvain
Alpha Asia Macro Trends Fund III Private Limited, Singapore
31.7
LPC Logistics Venture One LP, Wilmington, DE
Muralis MF TMK, Tokyo
50.0
A&A Centri Commerciali S.r.l., Bolzano
50.0
AA Ronsin Investment Holding Limited, Hong Kong
62.07
LBA IV-PPII-Office Venture LLC, Wilmington, DE
LBA IV-PPII-Retail Venture LLC, Wilmington, DE
45.07
Allianz Invest Mündelrenten, Vienna
29.4
31.6
45.0
40.0
ACRE Acacia Investment Trust I, Sydney
ACRE Acacia Management | Pty Ltd., Sydney
ACRE Karri Investment Trust, Sydney
Allee-Center Kft., Budapest
Altair MF TMK, Tokyo
256
50.0
Allianz Life Insurance Co. Ltd., Tokyo
28.03
20.0
D_Consolidated Financial Statements
4_Releasing impact according to § 264 (3) HGB through the Allianz Group's consolidated
financial statements.
Beacon Platform Incorporated, Wilmington, DE
26.9
Berkshire Hathaway Services India Private Limited, New Delhi
PIMCO Corporate Opportunities Fund III Onshore Feeder L.P.,
Wilmington, DE
0.8 3,8
5_Group share through indirect holder Roland Holding GmbH, Munich: 75.6%.
6_Insolvent.
20.0
Berkshire India Private Limited, New Delhi
PIMCO Corporate Opportunities Fund IV CE L.P., Wilmington, DE
17.9 8
20.0
7_Classified as joint venture according to IFRS 11.
8_Classified as associate according to IAS 28.
Best Regain Limited, Hong Kong
16.4 8
PIMCO ILS Fund SP I, George Town
19.4 3,8
3_Investment fund.
2_Classified as affiliate according to IFRS 10.
1_Percentage includes equity participations held by dependent entities in full, even if the
Allianz Group's share in the dependent entity is below 100%.
% owned¹
% owned¹
% owned¹
Assurpath S.A., Buenos Aires
Autoelektro tehnicki pregledi d.o.o., Vojnić
40.0
49.0
OeKB EH Beteiligungs- und Management AG, Vienna
Osiris Exchange Inc., Wilmington, DE
49.0
35.6
Annual Report 2023 - Allianz Group
AWP Insurance Brokerage (Beijing) Co. Ltd., Beijing
PIMCO BRAVO Fund IV Lux Feeder SCSp, Luxembourg
13.9 3,8
Bajaj Allianz General Insurance Company Ltd., Pune
26.0
Bajaj Allianz Life Insurance Company Ltd., Pune
26.0
PIMCO Corporate Opportunities Fund III Lux Feeder SCSP,
Luxembourg
38.0 3
100.0 8
JCR Intertrad Co. Ltd., Bangkok
45.07
73.3 3,8
100.0
Delphine Fund, Milan
100.0
Joint ventures
1 Liverpool Street GP Limited, Whiteley
1 Liverpool Street LP, Whiteley
EUROMARKT Center d.o.o., Ljubljana
Evadata LLC, Dover, DE
Fiumaranuova S.r.l., Milan
Floene Energias S.A., Lisbon
50.0
14.6
Triskelion Property Holding Designated Activity Company, Dublin
Valley (III) Pte. Ltd., Singapore
50.0
41.57
50.0
VGP European Logistics 2 S.à r.L., Senningerberg
50.0
Cogar S.à r.l., Paris
50.0
TopTorony Ingatlanhasznosító Zrt., Budapest
50.0
50.0
100.0
Dundrum Retail Limited Partnership, Dublin
50.0
The FIZZ Student Housing Fund S.C.S., Luxembourg
The Israeli Credit Insurance Company Ltd., Ramat Gan
The State-Whitehall Company LP, Wilmington, DE
Tokio Marine Rogge Asset Management Ltd., London
49.0 3,7
50.0
49.97
45.5 7
50.0
100.0
Elton Investments S.à r.l., Luxembourg
32.57
Top Vorsorge-Management GmbH, Vienna
50.0
Allianz Pension Services AG, Wallisellen
100.0
ESR India Logistics Fund Pte. Ltd., Singapore
Allianz Northern Ireland Limited, Belfast
50.0
GBTC I LP, Singapore
50.0
45.0 7
1515 Broadway Realty LP, Wilmington, DE
43.07
HKZ Investor Holding B.V., Arnhem
ABT SAS, Paris
51.07
30 HY WM REIT Owner LP, Wilmington, DE
49.07
Associates
53 State JV L.P., Wilmington, DE
55-15 Grand Avenue Investor JV L.P., Wilmington, DE
44.97
Hudson One Ferry JV L.P., Wilmington, DE
Italian Shopping Centre Investment S.r.l., Milan
LBA IV-PPI Venture LLC, Wilmington, DE
45.0 7
Allianz Europe Small Cap Equity, Senningerberg
25.0
14.7 3,8
50.0
Allianz France Investissement IV, Paris
49.07
PIMCO ILS Fund SP II, George Town
56.37
Heimstaden Eagle AB, Malmö
VGP European Logistics S.à r.L., Senningerberg
VISION (III) Pte. Ltd., Singapore
50.0
30.0 7
70.07
GBTC II LP, Singapore
50.0
Wallcon Operating L.P., Wilmington, DE
49.07
Helios SCC Sp. z o.o., Katowice
101 Moorgate GP Limited, Whiteley
114 Venture LP, Wilmington, DE
50.0
Grus MF TMK, Tokyo
51.07
Waterford Blue Lagoon LP, Wilmington, DE
49.07
70.07
49.5 7
101 Moorgate LP, Whiteley
40.0 2
Innovation Group (Australia) Pty Limited, Melbourne
70.0
8633
PIMCO Flexible Emerging Markets Income Fund, Boston, MA
100.0
Porowneo.pl Sp. z o.o., Warsaw
100.0
100.0
PIMCO GP XL LLC, Wilmington, DE
PIMCO GP XLI LLC, Wilmington, DE
100.0 3
PIMCO European Data Centre Opportunity Fund SCSp,
Luxembourg
65.9
POD Allianz Bulgaria AD, Sofia
60.6 3
100.0
PIMCO GP XIX LLC, Wilmington, DE
PIMCO European Data Centre Opportunity Fund Feeder SCSP,
Luxembourg
PIMCO GP XLIV LLC, Wilmington, DE
100.0
Primacy Underwriting Management Pty Ltd., Melbourne
100.0
PT Asuransi Allianz Utama Indonesia, Jakarta
PT Asuransi Allianz Life Syariah Indonesia, Jakarta
PT Asuransi Allianz Life Indonesia, Jakarta
PT Allianz Global Investors Asset Management Indonesia, Jakarta
Protexia France S.A., Paris la Défense
% owned¹
% owned¹
% owned¹
D_Consolidated Financial Statements
Annual Report 2023 - Allianz Group
254
100.0
PIMCO GP XLIX LLC, Wilmington, DE
100.0
Promultitravaux SAS, Saint-Ouen
100.0
PT Blue Dot Services, Jakarta
PIMCO Taiwan Ltd., Taipei
PIMCO GP XIV LLC, Wilmington, DE
PIMCO Prime Real Estate Japan GK, Tokyo
100.0
100.0
PIMCO Prime Real Estate Asia Pacific Pte. Ltd., Singapore
100.0
100.0
PIMCO Prime Real Estate (Shanghai) Co. Ltd., Shanghai
100.0
PIMCO GP VI S.à r.l., Luxembourg
PIMCO GP VII S.à r.L., Luxembourg
PIMCO GP VIII S.à r.L., Luxembourg
PIMCO GP X LLC, Wilmington, DE
PIMCO GP XI LLC, Wilmington, DE
100.0
PIMCO COF IV Offshore GP Ltd., George Town
100.0
PIMCO COF IV Offshore GP LP, George Town
100.0
PIMCO COF III Offshore GP Ltd., George Town
100.0
100.0
100.0
PIMCO Prime Real Estate LLC, Wilmington, DE
100.0
70.8
PIMCO StocksPLUS AR Fund, Dublin
100.0
PIMCO REIT Management LLC, Wilmington, DE
100.0
PIMCO GP XIII LLC, Wilmington, DE
100.0
100.0
PIMCO GP XII LLC, Wilmington, DE
33.5 2,3
PIMCO REALPATH Blend 2065 Fund, Wilmington, DE
25.7 2,3
PIMCO Commercial Real Estate Debt Fund II L.P., Wilmington, DE
PIMCO CRE Opportunities Offshore GP Ltd., George Town
PIMCO Europe Ltd., London
100.0
100.0
100.0
PTE Allianz Polska S.A., Warsaw
Q207 S.C.S., Luxembourg
SCI Allianz Immobilier Durable, Paris La Défense
100.0
Questar Agency Inc., Minneapolis, MN
95.0
Thor Spain City Link HoldCo S.L., Madrid
100.0
SCI Allianz Citylights, Paris la Défense
100.0
100.0
The Warwick Partnership Limited, Whiteley
100.0
SCI Allianz Arc de Seine, Paris la Défense
94.0
100.0
The Innovation Group Limited, Whiteley
100.0
100.0
Thor Spain City Link PropCo 1 S.L., Madrid
Questar Capital Corporation, Minneapolis, MN
Raloriz S.L., Madrid
100.0
TIG Acquisition Holdings Limited, Fareham
100.0
SCI Allianz Laennec Retail, Paris la Défense
100.0
RB Fiduciaria S.p.A., Milan
100.0
100.0
Thor Spain City Link PropCo 2 S.L., Madrid
TIG Acquisition Co., Wilmington, DE
100.0
SCI Allianz Invest Pierre, Paris la Défense
100.0
100.0
SCI Allianz Immobilier Durable 18, Paris la Défense
100.0
100.0
Q 207 GP S.à r.L., Luxembourg
SCI Allianz 7 Drouot, Paris la Défense
100.0
100.0
Taone SAS, Paris la Défense
100.0
100.0
Syncier Consulting GmbH, Vienna
68.0
Saudi NEXTCARE LLC, Al Khobar
SC Tour Michelet, Paris la Défense
99.8
100.0
100.0
SurePlan USA Inc., Schaumburg, IL
100.0
Sättravallen Wind Power AB, Strömstad
100.0
Quality1 AG, Bubikon
100.0
100.0
SCI 46 Desmoulins, Paris la Défense
Téléservices et Sécurité S.à r.l., Châtillon
The Innovation Group (EMEA) Limited, Whiteley
100.0
SCI Allianz 67 Courcelles, Paris la Défense
100.0
100.0
TFI Allianz Polska S.A., Warsaw
100.0
SCI Allianz 38 Opéra, Paris la Défense
100.0
100.0
Tempo Multiasistencia Gestão de Rede Ltda., Barueri
100.0
SCI Allianz 13-15 Lamennais, Paris la Défense
97.8
99.9
100.0
Real Estate Opportunities CIV LLC, Wilmington, DE
PIMCO COF II LLC, Wilmington, DE
100.0
PIMCO GP LII LLC, Wilmington, DE
50.02
PCRED CIV LLC, Wilmington, DE
Partner Hotel S.A., Chalandri
100.0
PIMCO GP XXV LLC, Wilmington, DE
100.0
100.0
PIMCO GP XXIX LLC, Wilmington, DE
100.0
PIMCO GP L LLC, Wilmington, DE
PIMCO GP LI LLC, Wilmington, DE
100.0
Parc Eolien Les Treize SAS, Versailles
100.0
100.0
100.0
PIMCO GP XXIV LLC, Wilmington, DE
PIMCO GP XXVI LLC, Wilmington, DE
100.0
100.0
100.0
PIMCO GP XXVIII LLC, Wilmington, DE
PIMCO GP XXX LLC, Wilmington, DE
100.0
PIMCO GP LIV LLC, Wilmington, DE
100.0
Pericialcar S.L., Cordoba
100.0
PIMCO GP LIV - Series I LLC, Wilmington, DE
100.0
PCRED II CIV LLC, Wilmington, DE
100.0
PIMCO GP XXVII LLC, Wilmington, DE
100.0
PIMCO GP LIII LLC, Wilmington, DE
100.0
Pet Plan Ltd., Guildford
100.0
PIMCO GP XXIII Ltd., George Town
PIMCO GP I LLC, Wilmington, DE
100.0
100.0
PIMCO GP XVIII LLC, Wilmington, DE
100.0
PIMCO GP I Canada Corporation, Toronto, ON
100.0
100.0
PIMCO GP XVII LLC, Wilmington, DE
100.0
PIMCO Global Holdings LLC, Dover, DE
100.0
100.0
PIMCO GP XVI LLC, Wilmington, DE
100.0
100.0
100.0
PIMCO GP XX LLC, Wilmington, DE
Parc Eolien des Barbes d'Or SAS, Versailles
100.0
100.0
PIMCO GP XXII LLC, Wilmington, DE
100.0
PIMCO GP IV S.à r.l., Luxembourg
PIMCO GP IX LLC, Wilmington, DE
PIMCO GP IX S.à r.l., Luxembourg
100.0
Parc Eolien des Quatre Buissons SAS, Versailles
Parc Eolien du Bois Guillaume SAS, Versailles
100.0
100.0
Parc Eolien des Joyeuses SAS, Versailles
Parc Eolien des Mistandines SAS, Versailles
100.0
PIMCO GP XXI-C LLC, Wilmington, DE
100.0
PIMCO GP II S.à r.L., Luxembourg
100.0
100.0
100.0
100.0
100.0
PIMCO GP LXVI LLC, Wilmington, DE
100.0
100.0
PIMCO GP XXXVIII LLC, Wilmington, DE
100.0
PIMCO GP LXV LLC, Wilmington, DE
100.0
100.0
PIMCO GP XXXVII LLC, Wilmington, DE
100.0
PIMCO GP LXIV LLC, Wilmington, DE
100.0
100.0
PIMCO GP XXXVI LLC, Wilmington, DE
100.0
100.0
PIMCO GP LXIII LLC, Wilmington, DE
PIMCO BRAVO III Offshore GP Ltd., George Town
PIMCO GP S.à r.l., Luxembourg
PIMCO Latin America Administradora de Carteiras Ltda., Rio de
Janeiro
100.0
PIMCO GP V S.à r.l., Luxembourg
31.0 2,3
PIMCO California Flexible Municipal Income Fund, Boston, MA
PIMCO Canada Corp., Halifax, NS
100.0
PIMCO Japan Ltd., Road Town
100.0
PIMCO GP V LLC, Wilmington, DE
100.0
PIMCO BRAVO IV Offshore GP Ltd., George Town
100.0
100.0
PIMCO Investment Management (Shanghai) Limited, Shanghai
PIMCO Investments LLC, Dover, DE
100.0
100.0
PIMCO GP LIX LLC, Wilmington, DE
100.0
PIMCO GP XXXV LLC, Wilmington, DE
PIMCO (Schweiz) GmbH, Zurich
100.0
PIMCO GP XXXIII LLC, Wilmington, DE
100.0
PIMCO GP LVI LLC, Wilmington, DE
100.0
PGA Global Services LLC, Dover, DE
100.0
PIMCO GP XXXII LLC, Wilmington, DE
100.0
PIMCO GP LV LLC, Wilmington, DE
100.0
PFP Holdings LLC, Wilmington, DE
100.0
PIMCO GP XXXI LLC, Wilmington, DE
100.0
100.0
PIMCO GP LVII LLC, Wilmington, DE
PIMCO GP XXXIV LLC, Wilmington, DE
100.0
PIMCO GP LXII LLC, Wilmington, DE
100.0
PIMCO BRAVO III Offshore GP L.P., George Town
PIMCO Australia Pty Limited, Sydney
PIMCO Australia Management Limited, Sydney
PIMCO Aurora LLC, Dover, DE
PIMCO Asia Pte. Ltd., Singapore
100.0
PIMCO GP XXXIX LLC, Wilmington, DE
100.0
PIMCO GP LX LLC, Wilmington, DE
100.0
PIMCO Asia Ltd., Hong Kong
100.0
100.0
100.0
SCI Allianz Messine, Paris la Défense
100.0
Lincoln Infrastructure USA Inc., Wilmington, DE
100.0
InnovAllianz 2, Paris
100.0 3
Orsa Minore PV S.r.L., Lecce
100.0
Liverpool Victoria General Insurance Group Limited, Guildford
100.0
Innovation Auto Inc., Schaumburg, IL
100.0
Liverpool Victoria Insurance Company Limited, Guildford
100.0
Innovation Fleet Services Limited, Whiteley
100.0
Pacific Investment Management Company LLC, Dover, DE
PAF GP S.à r.l., Luxembourg
100.0
91.0
Orsa Maggiore PV S.r.L., Lecce
InFront Insurance PCC Limited, St. Peter Port
100.0
100.0
Kuolavaara-Keulakkopään Tuulipuisto Oy, Oulu
100.0
OPCI Allianz France Angel, Paris la Défense
100.0
100.0
La Rurale SA, Paris la Défense
100.0
Incontra Assicurazioni S.p.A., Milan
50.0 2
Orione PV S.r.l., Lecce
100.0
Life Plus Sp. z o.o., Warsaw
100.0
100.0
ÖGIG Netzbetrieb GmbH, St. Pölten
100.0
100.0
Innovation Group (Fleet) Pty Ltd., Melbourne
100.0
LV Repair Services Limited, Guildford
100.0
Innovation Group (Japan) Pty Limited, Melbourne
100.0
Maevaara Vind 2 AB, Stockholm
100.0
Innovation Group (Motorconsult) Pty Ltd., Melbourne
100.0
Parc Eolien de Chateau Garnier SAS, Versailles
Parc Eolien de Croquettes SAS, Versailles
100.0
100.0
Maevaara Vind AB, Stockholm
100.0
100.0
LLC "Euler Hermes Credit Management", Moscow
100.0
100.0
Innovation FSP (Pty) Ltd., Johannesburg
100.0
PAF Lux SCA SICAV-RAIF (Compartment), Luxembourg
100.0 3
LLC "IC Euler Hermes Ru", Moscow
100.0
Parc Eolien de Bonneuil S.à r.l., Versailles
100.0
Société Foncière Européenne B.V., Amsterdam
100.0
LV Assistance Services Limited, Guildford
100.0
Innovation Group (Claims Services) Pty Ltd., Melbourne
100.0
LV Insurance Management Limited, Guildford
Parc Eolien de Bruyère Grande SAS, Versailles
Parc Eolien de Chaourse SAS, Versailles
253
100.0
100.0
100.0
KAIGO Hi-Tech Development (Beijing) Co. Ltd., Beijing
100.0
Niederösterreichische Glasfaserinfrastrukturgesellschaft mbH,
Harro Development Praha s.r.o., Prague
100.0
St. Pölten
100.0
KaiLong Greater China Real Estate Fund II S.C.Sp., Luxembourg
100.0
Health Care Management Company Limited, Bangkok
100.0
Kensington Fund, Milan
100.0 3
Nobilas Iberica S.L., Barcelona
Händelö Logistics Holding AB, Stockholm
100.0
100.0
100.0
GT Motive S.L., San Sebastian de los Reyes
86.0
Jefferson Insurance Company Corp., New York, NY
100.0
NEXTCARE Egypt LLC, New Cairo
100.0
GT Motive SASU, Montrouge
100.0
Joukhaisselän Tuulipuisto Oy, Oulu
100.0
NEXTCARE Lebanon SAL, Beirut
100.0
Händelö Logistics AB, Stockholm
100.0
Jouttikallio Wind Oy, Helsinki
NEXTCARE Tunisie LLC, Tunis
Kromgatan 4-6 Logistics AB, Gothenburg
Highway Insurance Company Limited, Guildford
nöGIG Phase Drei GmbH, St. Pölten
Hunter Premium Funding Limited, Sydney
OANS Open Access Network Süd GmbH, Klagenfurt am
Wörthersee
50.0 2
100.0
Kohlenberg & Ruppert Premium Properties S.à r.l., Luxembourg
100.0
Hwang Affin Income Fund 5, Kuala Lumpur
ICON Immobilien GmbH & Co. KG, Vienna
ICON Inter GmbH & Co. KG, Vienna
IEELV GP S.à r.l., Luxembourg
100.0 3
ÖGIG Fiber GmbH, St. Pölten
100.0
Kroknet S.à r.l., Paris
100.0
ÖGIG GmbH, St. Pölten
80.0
100.0
100.0
KLGCREF II Holdco Pte. Ltd., Singapore
Humble Bright Limited, Hong Kong
74.9
Keyeast Pte. Ltd., Singapore
100.0
Highway Insurance Group Limited, Guildford
100.0
nöGIG Phase Zwei GmbH, St. Pölten
100.0
Kiinteistö Oy Rahtiraitti 6, Vantaa
100.0
Home & Legacy Insurance Services Limited, Guildford
100.0
Kiinteistöosakeyhtiö Eteläesplanadi 2 Oy, Helsinki
100.0
Northstar Mezzanine Partners VI U.S. Feeder II L.P., Wilmington, DE
100.0 3
100.0
Annual Report 2023 - Allianz Group
D_Consolidated Financial Statements
% owned¹
UK Logistics PropCo I S.à r.l., Luxembourg
100.0
SCI Via Pierre 1, Paris la Défense
100.0 3
Rivage Richelieu 1 FCP, Paris
100.0
UK Logistics GP S.à r.L., Luxembourg
100.0
SCI Stratus, Paris la Défense
100.0
Reliance Single-Member Insurance Agents S.A., Chalandri
100.0
TUIR Allianz Polska S.A., Warsaw
100.0
SCI Réau Papin Logistics, Paris la Défense
100.0
81.83
Rokko Development Praha s.r.o., Prague
Seagull Holding SCS, Luxembourg
Saarenkylä Tuulipuisto Oy, Oulu
100.0
100.0
UK Logistics PropCo III S.à r.l., Luxembourg
UK Logistics PropCo IV S.à r.l., Luxembourg
100.0
Sigma Reparaciones S.L., Madrid
100.0
SA Vignobles de Larose, Saint-Laurent-Médoc
100.0
Servicios Compartidos Multiasistencia S.L., Madrid
100.0
SA Carène Assurance, Paris
100.0
UK Logistics PropCo II S.à r.L., Luxembourg
100.0
100.0
100.0
100.0
100.0
Redoma 2 S.A., Luxembourg
100.0
Toplmmo Besitzgesellschaft B GmbH & Co. KG, Vienna
100.0
SCI Allianz Value Pierre, Paris la Défense
100.0
Real FR Haussmann SAS, Paris la Défense
100.0
TopImmo A GmbH & Co. KG, Vienna
100.0
SCI Allianz Valence, Paris la Défense
100.0
Real Faubourg Haussmann SAS, Paris la Défense
100.0
Top Versicherungsservice GmbH, Vienna
100.0
TU Euler Hermes S.A., Warsaw
SCI Allianz Work'In Park, Paris la Défense
Trafalgar Insurance Limited, Guildford
SCI Pont D'Ain Septembre Logistics, Paris la Défense
Reksa Dana Syariah Allianz High Dividend Global Sharia Equity
Dollar, Jakarta
100.0
TU Allianz Zycie Polska S.A., Warsaw
100.0
SCI Onnaing Escaut Logistics, Paris la Défense
100.0 3
Reksa Dana Allianz USD Fixed Income Fund, Jakarta
100.0
Triton Lux SCS, Luxembourg
100.0
SCI ESQ, Paris la Défense
100.0
Redoma S.à r.L., Luxembourg
100.0
100.0
Silex Gas Norway AS, Oslo
100.0
Santander Allianz TU na Zycie S.A., Warsaw
PIMCO Global Advisors (Luxembourg) S.A., Luxembourg
100.0
PIMCO GP XLVIII LLC, Wilmington, DE
100.0
Parc Eolien de la Sole du Bois SAS, Versailles
Parc Eolien de Longchamps SAS, Versailles
Parc Eolien de Ly-Fontaine SAS, Versailles
Parc Eolien de Pliboux SAS, Versailles
Parc Eolien de Remigny SAS, Versailles
100.0
PIMCO Global Advisors (Resources) LLC, Dover, DE
100.0
PIMCO GP XV LLC, Wilmington, DE
100.0
100.0
PIMCO Global Advisors LLC, Dover, DE
SAS Allianz Rivoli, Paris la Défense
SAS Allianz Prony, Paris la Défense
100.0
100.0
SAS Allianz Platine, Paris la Défense
100.0
100.0
% owned¹
% owned¹
Parc Eolien de Derval SAS, Versailles
Parc Eolien de Dyé SAS, Versailles
100.0
PIMCO Flexible Real Estate Income Fund, Wilmington, DE
58.83
PIMCO GP XLV LLC, Wilmington, DE
100.0
100.0
PIMCO Formations LLC, Wilmington, DE
Parc Eolien de Fontfroide SAS, Versailles
Parc Eolien de Forge SAS, Versailles
100.0
PIMCO Global Advisors (Ireland) Ltd., Dublin
100.0
100.0
PIMCO GP XLVI LLC, Wilmington, DE
PIMCO GP XLVII LLC, Wilmington, DE
56.0
Société Européenne de Protection et de Services d'Assistance à
Domicile S.A., Saint-Ouen
100.0
Societé de la Rocade L2 de Marseille S.A., Marseille
100.0 3
Säntis Umbrella Fund - Tödi, Zurich
50.0 2
Unicredit Allianz Assicurazioni S.p.A., Milan
100.0
Societa' Agricola San Felice S.p.A., Milan
51.0
Santander Allianz TU S.A., Warsaw
100.0
100.0
UK Logistics PropCo V S.à r.l., Luxembourg
UK Logistics S.C.Sp., Luxembourg
94.8
Sirius S.A., Luxembourg
51.0
53.53
Unicredit Allianz Vita S.p.A., Milan
50.0 2
SAS Allianz Etoile, Paris la Défense
SAS Allianz PH, Paris la Défense
100.0
Vailog Hong Kong DC17 Limited, Hong Kong
100.0
Société d'Energie Eolienne de Cambon SAS, Versailles
100.0
SAS Allianz Logistique, Paris la Défense
NEXTCARE Claims Management LLC, Qurum
100.0
100.0
100.0
UP 36 SA, Brussels
Société de Production d'Electricité d'Haucourt Moulaine SAS,
Versailles
100.0
SAS Allianz Forum Seine, Paris la Défense
100.0
VAAM US Private Credit Solutions GP II LLC, Wilmington, DE
SAS Allianz Serbie, Paris la Défense
Top Versicherungs-Vermittler Service GmbH, Vienna
100.0
100.0
Brobacken Nät AB, Stockholm
AWP Ticket Guard Small Amount & Short Term Insurance Co.
Ltd., Tokyo
100.0
Arges Investments II N.V., Amsterdam
100.0 3
100.0
BRAVO IV Holding Fund CIV I LP, George Town
AWP Solutions CR a SR s.r.o., Prague
100.0
Arges Investments I N.V., Amsterdam
100.0
BRAVO IV CIV LLC, Wilmington, DE
97.0
100.0
AWP Servis Hizmetleri A.S., Istanbul
Argos US Forest Invest L.P., Wilmington, DE
Brunswick S.à r.L., Luxembourg
AZ Euro Investments II S.à r.L., Luxembourg
100.0
Buddies Enterprises Limited, Guildford
100.0
Argos US Forest Invest REIT L.P., Wilmington, DE
100.0
100.0
Axios Bidco Limited, Whiteley
BSMC (Thailand) Company Limited, Bangkok
100.0
Argos US Forest Invest REIT GP Inc., Wilmington, DE
100.0
AWP USA Inc., Richmond, VA
100.0
100.0
100.0
Arcturus MF GK, Tokyo
100.0
100.0
AWP Services NL B.V., Amsterdam
57.6
Appia Investments S.r.l., Milan
100.0
BPS Mesagne 223 S.r.l., Lecce
BPS Mesagne 224 S.r.L., Lecce
100.0
100.0
APP Broker S.r.l., Trieste
100.0
BPS Mesagne 216 S.r.l., Lecce
100.0
AWP Services Belgium S.A., Brussels
AWP Services New Zealand Limited, Auckland
100.0
APTO DC Limited, London
100.0
BRAVO III CIV LLC, Wilmington, DE
100.0
AWP Servicios Mexico S.A. de C.V., Mexico City
100.0 3
ARAGO, Paris
100.0
BRAVO II CIV LLC, Wilmington, DE
100.0
AWP Services Singapore Pte. Ltd., Singapore
100.0
Aqua Holdings (Thailand) Company Limited, Bangkok
100.0
Brasil de Imóveis e Participações Ltda., São Paulo
100.0
AWP Services Sdn. Bhd., Kuala Lumpur
100.0
100.0
Argos US Forest Invest REIT TRS Inc., Wilmington, DE
Asit Services S.R.L., Bucharest
Business Process Innovation Botswana Pty Limited, Gaborone
100.0
AWP Assistance Ireland Limited, Dublin
100.0
CAP, Rechtsschutz-Versicherungsgesellschaft AG, Wallisellen
100.0
AZ Vers US Private REIT LP, Wilmington, DE
AZ-CR Seed Investor LP, Wilmington, DE
100.0
100.0
Calobra Investments Sp. z o.o., Warsaw
100.0
AZ Vers US Private REIT GP LLC, Wilmington, DE
100.0
AWP Argentina S.A., Buenos Aires
AWP Assistance (India) Private Limited, Gurgaon
100.0
100.0
93.2
CCAF GP I LLC, Wilmington, DE
55.0
AZGA Service Canada Inc., Kitchener, ON
100.0
AWP Austria GmbH, Vienna
AWP Australia Pty Ltd., Brisbane
Caroline Berlin S.C.S., Luxembourg
AWP Australia Holdings Pty Ltd., Brisbane
100.0
Castle Field Limited, Hong Kong
100.0
AZGA Insurance Agency Canada Ltd., Kitchener, ON
100.0
AWP Assistance Service España S.A., Madrid
AWP Assistance UK Ltd., London
C.E.P.E. du Bois de la Serre S.à r.l., Versailles
100.0
AZ Servisni centar d.o.o., Zagreb
C.E.P.E. de Haut Chemin S.à r.l., Versailles
100.0
AZ Jupiter 10 B.V., Amsterdam
AZ Jupiter 11 B.V., Amsterdam
AZ Jupiter 8 B.V., Amsterdam
100.0
100.0 3
Atlas Fund, Milan
Assurances Médicales SA, Metz
100.0
100.0
100.0
C.E.P.E. de Bajouve S.à r.l., Versailles
100.0
100.0
AZ Euro Investments S.A., Luxembourg
100.0
Assistance, Courtage d'Assurance et de Réassurance S.A., Paris
la Défense
97.8
C.E.P.E. de la Baume S.à r.l., Versailles
100.0
100.0
AVS Automotive Versicherungsvermittlung GmbH, Vienna
100.0
C.E.P.E. du Blaiseron S.à r.L., Versailles
100.0
AZ Real Estate GP LLC, Wilmington, DE
100.0
atpacvc LLC, Wilmington, DE
100.0
C.E.P.E. de Vieille Carrière S.à r.l., Versailles
100.0
AZ Jupiter 9 B.V., Amsterdam
100.0
C.E.P.E. de la Forterre S.à r.l., Versailles
100.0
100.0
APKV US Private REIT LP, Wilmington, DE
100.0
BPS Mesagne 215 S.r.l., Lecce
100.0
AllianzGI USD Infrastructure Debt Fund GP LLC, Wilmington, DE
100.0
Allianz Retraite S.A., Paris la Défense
85.4 3
Allianz Team, Paris
Allianz Team Formule 1, Paris
51.0
99.7
100.0 3
Allianz Yield Plus Fund, Hong Kong
73.5 3
Allianz Sustainable Health Evolution, Senningerberg
Allianz Taiwan Life Insurance Co. Ltd., Taipei
90.93
Allianz ZB d.o.o. Mandatory and Voluntary Pension Funds
Management Company, Zagreb
Allianz Resilient Opportunistic Credit Fund SCSP SICAV-RAIF,
Senningerberg
96.63
100.0
Allianz Saint-Marc CL, Paris
Allianz S.p.A., Milan
Allianz S.A. de C.V., Mexico City
Allianz Rupiah Liquid Fund, Jakarta
Allianz Risk Transfer Inc., New York, NY
Allianz Risk Transfer AG, Schaan
Allianz Risk Consulting LLC, Glendale, CA
52.2
100.0
100.0
Allianz Technology (Slovakia) s.r.o., Bratislava
Allianz Risk Transfer (Bermuda) Ltd., Hamilton
66.7 3
AllianzIM U.S. Large Cap Buffer 10 Mar ETF, Wilmington, DE
Allianz-Tiriac Asigurari SA, Bucharest
100.0
80.0
Allianz Yasam ve Emeklilik A.S., Istanbul
Allianz Vorsorgekasse AG, Vienna
100.0
Allianz Strategic Investments LLC, St. Paul, MN
100.0
100.0
Allianz Viva S.p.A., Milan
100.0
76.5 3
100.0
Allianz Renewable Energy Partners V Limited, London
Allianz Renewable Energy Partners VI Limited, London
Allianz Renewable Energy Partners VII LP, London
Allianz Renewable Energy Partners VIII Limited, London
Allianz Residential Mortgage Company S.A., Luxembourg
Allianz Resilient Credit Euro Fund GP S.à r.l., Senningerberg
Allianz Resilient Opportunistic Credit Fund GP S.à r.l.,
Senningerberg
100.0
Allianz Vie S.A., Paris la Défense
100.0 3
Allianz Special Opportunities Alternative Fund, Milan
Allianz Sport et Bien-être, Paris
100.0
Allianz Strategic Investments S.à r.L., Luxembourg
100.0
100.0
100.0
100.0
100.0
80.0
Allianz Working Capital Investment Grade Fund, Senningerberg
Allianz Worldwide Partners (Hong Kong) Ltd., Hong Kong
Allianz X Euler Hermes Co-Investments S.à r.l., Luxembourg
Allianz X North America LLC, Wilmington, DE
100.0
Allianz Suisse Lebensversicherungs-Gesellschaft AG, Wallisellen
Allianz Suisse Versicherungs-Gesellschaft AG, Wallisellen
100.0
100.0
Allianz Suisse Immobilien AG, Wallisellen
100.0
50.0 2,3
Allianz Strategy Select 50, Senningerberg
100.0
Allianz Technology (Thailand) Co. Ltd., Bangkok
100.0
100.0
Allianz-Tiriac Unit Asigurari S.A., Bucharest
100.0 3
APEH Europe VII, Paris
% owned¹
% owned¹
% owned¹
D_Consolidated Financial Statements
AWP RUS LLC, Moscow
Annual Report 2023 - Allianz Group
99.63
APEH Europe VI, Paris
100.0
100.0
Allianz Technology SAS, Paris la Défense
46.4 2,3
250
100.0
BPS Brindisi 213 S.r.l., Lecce
100.0
100.0
AWP Services (Thailand) Co. Ltd., Bangkok
100.0
APKV US Private REIT GP LLC, Wilmington, DE
100.0
BPS Mesagne 214 S.r.l., Lecce
100.0
AWP Services (India) Private Limited, Gurgaon
100.0
100.0
BPS Brindisi 222 S.r.l., Lecce
100.0
AWP Service Brasil Ltda., São Bernardo do Campo
100.0
APK US Investment GP LLC, Wilmington, DE
APK US Investment LP, Wilmington, DE
APEF Feeder FCP-RAIF, Luxembourg
100.0
100.0
Allianz Technology s.r.o., Prague
100.0 3
100.0
100.0
92.03
Allvest Passive Invest, Luxembourg
100.0
Allianz Technology International B.V., Amsterdam
Allianz Technology Ltda., São Bernardo do Campo
Allianz Technology of America Inc., Wilmington, DE
Allianz Technology GmbH, Vienna
86.03
Allvest Active Invest, Luxembourg
100.0
100.0
Allianz Technology AG, Wallisellen
100.0
77.73
100.0
100.0
Altair - Fondo di Investimento Alternativo Immobiliare di Tipo
Chiuso, Rome
100.0
APECO GP S.à r.l., Luxembourg
100.0
100.0
Allianz Technology S.p.A., Milan
100.0
American Automobile Insurance Company Corp., Clayton, MO
100.0
Allianz Technology S.L., Barcelona
100.0
Allianz Sakura Multifamily 1 Pte. Ltd., Singapore
Allianz Sakura Multifamily 2 Pte. Ltd., Singapore
Allianz Sakura Multifamily Lux GP S.à r.l., Luxembourg
Allianz Sakura Multifamily Lux SCSp, Luxembourg
97.3
Alter Ego S.A., Chalandri
100.0
100.0 3
100.0
100.0
100.0
100.0
100.0
ControlExpert Hong Kong Corp. Limited, Hong Kong
100.0
Euler Hermes South Express S.A., Ixelles
100.0
Euler Hermes Australia Pty Limited, Sydney
Euler Hermes Canada Services Inc., Montreal, QC
100.0
100.0
Euler Hermes Singapore Services Pte. Ltd., Singapore
100.0
Euler Hermes Asset Management France S.A., Paris la Défense
100.0
ControlExpert Colombia SAS, Bogotá D.C.
ControlExpert Holding B.V., Amsterdam
100.0
100.0
100.0
100.0
Eurl 20-22 Rue Le Peletier, Paris la Défense
Euler Hermes Consulting (Shanghai) Co. Ltd., Shanghai
100.0
ControlExpert Polska Sp. z o.o., Warsaw
100.0
Euler Hermes Taiwan Services Limited, Taipei
100.0
100.0
Euler Hermes Collections North America Company, Owings Mills, MD
Euler Hermes Collections Sp. z o.o., Warsaw
100.0
ControlExpert Japan KK, Tokyo
100.0
ControlExpert Inc., Wilmington, DE
Euler Hermes, Okurowska-Minkiewicz, Maliszewski - Kancelaria
Prawna Sp.k, Warsaw
100.0
Euler Hermes Serviços de Gestão de Riscos Ltda., São Paulo
Euler Hermes Sigorta A.S., Istanbul
100.0
Control Expert Systems Technologies S.L., Madrid
100.0
Enertrag-Dunowo Sp. z o.o., Szczecin
95.0
Control Expert Mexico S. de R.L. de C.V., Mexico City
100.0
100.0
Euler Hermes Services Schweiz AG, Wallisellen
100.0
Euler Hermes Services S.A.S., Paris la Défense
100.0
Emerging Market Climate Action Fund GP S.à r.l., Senningerberg
Energie Eolienne Lusanger S.à r.l., Versailles
100.0
100.0
100.0
Eolica Erchie S.r.l., Lecce
100.0
Euler Hermes Services South Africa (Pty) Ltd., Johannesburg
Euler Hermes Services Tunisia S.à r.l., Tunis
Euler Hermes Acmar Services SARL, Casablanca
100.0
ControlExpert Chile Spa, Las Condes
55.0
Euler Hermes Acmar SA, Casablanca
100.0
ControlExpert Australia Pty Ltd., Sydney
100.0
Euler Hermes Services UK Limited, London
100.0
EP Tactical GP LLC, Wilmington, DE
100.0
ControlExpert Argentina SRL, Buenos Aires
100.0
100.0
100.0
Control Expert Gestao Comercio e Desenvolvimento Ltda., Jundiaí
Control Expert Italia S.r.l., Venice
Eurosol Invest S.r.L., Udine
ControlExpert Schweiz GmbH, Cham
100.0
100.0
Euler Hermes Korea Non-life Broker Company Limited, Seoul
Euler Hermes Luxembourg Holding S.à r.L., Luxembourg
Euler Hermes New Zealand Limited, Auckland
100.0
D23E GP LLC, Wilmington, DE
100.0
100.0
Curatio DMCC LLC, Dubai
Cross Point Wakefield Management Company Limited, London
100.0
Euler Hermes Japan Services Ltd., Tokyo
100.0
CPRN Thailand Ltd., Bangkok
100.0
100.0
Euler Hermes Intermediary Agency S.r.l., Milan
Darta Saving Life Assurance dac, Dublin
DCCF GP I Series 1 LLC, Wilmington, DE
100.0
100.0
Flexible Real Estate Income GP LLC, Wilmington, DE
Flying Desire Limited, Hong Kong
Deeside Investments Inc., Wilmington, DE
100.0
100.0
100.0
100.0
100.0
100.0
FinOS Technology Holding Pte. Ltd., Singapore
Fireman's Fund Financial Services LLC, Wilmington, DE
Fireman's Fund Indemnity Corporation, Trenton, NJ
Fireman's Fund Insurance Company Corp., Chicago, IL
First Notice Systems Inc., Wilmington, DE
100.0
Euler Hermes North America Holding Inc., Wilmington, DE
Euler Hermes North America Insurance Company Inc.,
Lutherville, MD
100.0
100.0
98.0
Cova Beijing Zpark Investment Pte. Ltd., Singapore
100.0
Fairmead Insurance Limited, Guildford
100.0
Euler Hermes Excess North America LLC, Owings Mills, MD
100.0
ControlExpert UK Limited, Farnborough
100.0
100.0
Expander Advisors Sp. z o.o., Warsaw
Euler Hermes Digital Ventures, Paris
100.0
ControlExpert Sdn. Bhd., Kuala Lumpur
100.0
Euler Hermes Crédit France S.A.S., Paris la Défense
100.0
100.0 3
FCP Helliot, Paris
Corn Investment Ltd., London
100.0
100.0
Ferme Eolienne des Jaladeaux S.à r.l., Versailles
Financière Callisto SAS, Paris la Défense
100.0
Euler Hermes Hong Kong Services Limited, Hong Kong
100.0
COSEC-Companhia de Seguro de Créditos S.A., Lisbon
100.0
Euler Hermes Hellas Services Ltd., Athens
100.0
Corsetec Assessoria e Corretagem de Seguros Ltda., São Paulo
100.0
Ferme Eolienne de Villemur-sur-Tarn S.à r.l., Versailles
99.93
100.0
Euler Hermes Group SAS, Paris la Défense
100.0
100.0
100.0
Euler Hermes Services North America LLC, Owings Mills, MD
Euler Hermes Services Romania S.R.L., Bucharest
AWP Japan Co. Ltd., Tokyo
100.0
Berkley Investments S.A., Warsaw
100.0
AWP Health & Life Services Limited, Dublin
100.0
100.0
Ceres Holding I S.à r.L., Luxembourg
Beleggingsmaatschappij Willemsbruggen B.V., Rotterdam
100.0
AWP Health & Life S.A., Saint-Ouen
100.0
CEPE des Portes de la Côte d'Or S.à r.l., Versailles
98.0
100.0
BCP-AZ Investment L.P., Wilmington, DE
Beykoz Gayrimenkul Yatirim Insaat Turizm Sanayi ve Ticaret
A.S., Ankara
100.0
Borgo San Felice S.r.L., Castelnuovo Berardenga
100.0
AWP P&C S.A., Saint-Ouen
BN Infrastruktur GmbH, St. Pölten
100.0
AWP Mexico S.A. de C.V., Mexico City
Ceres Warsaw Gorzow Sp. z o.o., Warsaw
Ceres Weert B.V., Amsterdam
100.0
50,02
Bilans Service S.N.C., Courbevoie
100.0
AWP MEA Holdings Co. W.L.L., Manama
100.0
100.0
Chicago Insurance Company Corp., Chicago, IL
95.0
AWP France SAS, Saint-Ouen
100.0
Centrale Photovoltaique de Saint Marcel sur Aude SAS, Versailles
Centrale Photovoltaique de Valensole SAS, Versailles
100.0
AZWP Services Portugal Lda., Lisbon
AWP Brokers & Services Hellas S.A., Athens
100.0
AZP Malaysia Agency Sdn. Bhd., Kuala Lumpur
100.0
100.0
Central Shopping Center a.s., Bratislava
100.0
AZOA Services Corporation, New York, NY
100.0
100.0
CELUHO S.à r.l., Luxembourg
100.0
100.0
AWP Business Services (Beijing) Co. Ltd., Beijing
100.0
CEPE de Sambres S.à r.L., Versailles
50.0 2
BBVA Allianz Seguros y Reaseguros S.A., Madrid
100.0
AWP Contact Center Italia S.r.l., Milan
100.0
CEPE de Mont Gimont S.à r.l., Versailles
100.0
Barcelona Sea Offices S.A., Barcelona
100.0
AWP Colombia SAS, Bogotá D.C.
100.0
CEPE de Langres Sud S.à r.l., Versailles
51.0
B & G Group S.r.L., Rome
74.9
100.0
CIC Allianz Insurance Limited, Sydney
CIMU 92, Saint-Denis
100.0
53.5
100.0 3
Eiger Institutional Fund - Obligationen Welt, Basel
Elite Prize Limited, Hong Kong
100.0
45.0 2
100.0 3
EH 39 Ouest, Paris la Défense
100.0
100.0
EF Solutions LLC, Wilmington, DE
100.0
Euler Hermes Services Belgium S.A., Brussels
100.0
EDCO UK CIV LLC, Wilmington, DE
100.0
100.0 3
100.0
Euler Hermes Services Bulgaria EOOD, Sofia
Euler Hermes Services Ceská republika s.r.o., Prague
Euler Hermes Services India Private Limited, Mumbai
Euler Hermes Services Ireland Limited, Dublin
100.0
100.0
100.0
EMac Limited, Whiteley
100.0 3
100.0
ELVIA e-invest AG, Wallisellen
100.0
Compañía Colombiana de Servicio Automotriz S.A., Bogotá D.C.
Consultatio Renta Mixta F.C.I., Buenos Aires
100.0
Euler Hermes Services Italia S.r.l., Rome
100.0
Elix Vintage Residencial SOCIMI S.A., Madrid
64.8
Companhia de Seguros Allianz Portugal S.A., Lisbon
100.0
100.0
COF IV Holding Fund CIV I LP, George Town
Columbia REIT - 221 Main Street LP, Wilmington, DE
Columbia REIT - 333 Market Street LP, Wilmington, DE
Columbia REIT - University Circle LP, Wilmington, DE
AZL PF Investments Inc., Minneapolis, MN
100.0
100.0
COF II CIV LLC, Wilmington, DE
Club Marine Limited, Sydney
D_Consolidated Financial Statements
Annual Report 2023 - Allianz Group
251
100.0
% owned¹
72.03
100.0
AWP Réunion SAS, Sainte-Marie
100.0
BPS Brindisi 211 S.r.l., Lecce
100.0
AWP Polska Sp. z o.o., Warsaw
Citizen Capital Impact Initiative, Paris
Climmolux Holding SA, Luxembourg
100.0
% owned¹
% owned¹
100.0
Euler Hermes Service AB, Stockholm
100.0
100.0
Euler Hermes Seguros S.A., São Paulo
100.0
100.0
Euler Hermes S.A., Brussels
100.0
EDCO CIV LLC, Wilmington, DE
EDCO Holdco S.à r.l., Luxembourg
EDCO Nevern S.à r.L., Luxembourg
EDCO Pembroke S.à r.l., Luxembourg
100.0 3
100.0
100.0
COF IV CIV LLC, Wilmington, DE
COF III Holding Fund CIV I LP, George Town
COF III CIV LLC, Wilmington, DE
Euler Hermes Services B.V., 's-Hertogenbosch
100.0 3
Allianz Meridiam Infra Avenir SCSp, Luxembourg
100.0
100.0
Allianz Invest Spezial 3, Vienna
100.0 3
Allianz Mutual Funds Management Company S.A., Athens
Allianz Re Dublin dac, Dublin
100.0
100.0
Allianz Investment Management LLC, St. Paul, MN
100.0
Allianz Nederland Groep N.V., Rotterdam
100.0
Allianz Real Estate Investment S.A., Luxembourg
100.0
Allianz Investment Management Singapore Pte. Ltd., Singapore
100.0
Allianz Neo ISR 2022, Senningerberg
100.0 3
97.9 3
Allianz Real Estate Trust III (1), Sydney
100.0
Allianz Nikko Pte. Ltd., Singapore
100.0
Allianz Investments HoldCo S.à r.L., Luxembourg
Allianz Re Argentina S.A., Buenos Aires
99.23
100.0
Allianz New Zealand Limited, Auckland
100.0
Allianz Investment Management U.S. LLC, St. Paul, MN
99.23
Allianz Real Estate Trust II (1), Sydney
Allianz Real Estate Trust II (2), Sydney
99.83
Allianz Multi Tempéré ISR, Paris
100.0 3
100.0 3
Allianz Private Markets Solutions Fund S.A. SICAV-RAIF,
Senningerberg
57,73
Allianz Multi Horizon Court Terme, Paris
100.0 3
Allianz Invest 12, Vienna
Allianz Invest d.o.o., Zagreb
99.5
Allianz Private Markets GP S.à r.l., Senningerberg
100.0
Allianz Multi Horizon 2036-2038, Paris
Allianz Multi Horizon 2039-2041, Paris
100.0 3
Allianz Invest 11, Vienna
100.0 3
100.0
Allianz Investments | Luxembourg S.à r.L., Luxembourg
100.0
38.8 2.3
Allianz Invest Spezial 13, Vienna
100.0
Allianz Quantitative Analytics Sp. z o.o., Warsaw
79.83
Allianz Multi Rendement Réel, Paris
92.03
Allianz Multi Horizon Long Terme, Paris
Allianz Invest Osteuropa Rentenfonds, Vienna
Allianz Protect 85, Luxembourg
99.63
Allianz Multi Opportunités, Paris
100.0
Allianz Invest Kapitalanlagegesellschaft mbH, Vienna
Allianz Properties Limited, Guildford
100.0
100.0 3
100.0
100.0
100.0
100.0
Allianz Renewable Energy Fund Management 1 Ltd., London
100.0
100.0
249
Annual Report 2023 - Allianz Group
D_Consolidated Financial Statements
% owned¹
% owned¹
% owned¹
Allianz Renewable Energy Management AT II GmbH, Pottenbrunn
Allianz Renewable Energy Partners | LP, London
Allianz Renewable Energy Partners II Limited, London
Allianz Renewable Energy Partners III LP, London
Allianz Renewable Energy Partners IV Limited, London
Allianz Renewable Energy Partners IX Limited, London
Allianz Renewable Energy Partners Luxembourg Holdco II S.à
r.l., Luxembourg
100.0
Allianz SAS S.A.S., Bogotá D.C.
100.0
Allianz Technology Sdn. Bhd., Kuala Lumpur
100.0
100.0
100.0
Allianz Tulip GP S.à r.l., Senningerberg
89.4 3
32,7 2,3
Allianz Sécurité PEA, Paris
99.3
Allianz Sécurité, Paris
Allianz Partners SAS, Saint-Ouen
99.3
Allianz Tiriac Pensii Private Societate de administrare a
fondurilor de pensii private S.A., Bucharest
51.0
Allianz Saudi Fransi Cooperative Insurance Company, Riyadh
100.0
100.0
Allianz Saúde S.A., São Paulo
100.0
100.0
100.0
100.0
53.3
Allianz Jingdong General Insurance Company Ltd., Guangzhou
95.5
Allianz Real Estate Trust IV, Sydney
100.0
97.93
Allianz Obligations Internationales, Paris
Allianz Real Estate Trust III (2), Sydney
Allianz Nikko2 Pte. Ltd., Singapore
Allianz Nikko3 Pte. Ltd., Singapore
100.0 3
100.0
Allianz Investments III Luxembourg S.A., Luxembourg
Allianz Jewel Fund ICAV, Dublin
100.0 3
Allianz Real Estate Trust III (1) Sub-trust (1), Sydney
100.0
Allianz Nikko1 Pte. Ltd., Singapore
82.33
100.0
Allianz Reinsurance Management Services Inc., Wilmington, DE
Allianz Renewable Energy Fund III GP SCSP, Senningerberg
Allianz Renewable Energy Fund III Lux GP S.à r.l.,
Senningerberg
Allianz Leben Real Estate Holding II S.à r.L., Luxembourg
100.0
Allianz p.l.c., Dublin
100.0
Allianz Leben Real Estate Holding I S.à r.L., Luxembourg
Allianz Reinsurance America Inc., Glendale, CA
100.0 3
100.0
Allianz Leasing Bulgaria AD, Sofia
100.0
Allianz of America Inc., Wilmington, DE
100.0
Allianz kontakt s.r.o., Prague
Allianz Opéra, Paris
Allianz Private Equity Partners V, Milan
65.6
Allianz Multi Horizon 2033-2035, Paris
Allianz Impact Green Bond, Paris
100.0 3
Allianz Life Insurance Company of Missouri Corp., Clayton, MO
Allianz Life Insurance Company of New York Corp., New York, NY
Allianz Life Insurance Company of North America Corp.,
Minneapolis, MN
100.0
Allianz Pension Fund Trustees Ltd., Guildford
100.0
100.0
Allianz Pensionskasse Aktiengesellschaft, Vienna
100.0
Allianz penzijní spolecnost a.s., Prague
100.0
100.0
Allianz Perfekta 71 S.A., Luxembourg
94.9
Allianz Infrastructure Holding I Pte. Ltd., Singapore
Allianz Infrastructure Luxembourg Holdco I S.A., Luxembourg
Allianz Infrastructure Luxembourg Holdco II S.A., Luxembourg
Allianz Infrastructure Luxembourg Holdco III S.A., Luxembourg
Allianz Infrastructure Luxembourg Holdco IV S.A., Luxembourg
Allianz Infrastructure Luxembourg I S.à r.L., Luxembourg
Allianz Infrastructure Luxembourg II S.à r.L., Luxembourg
Allianz Infrastructure Luxembourg III S.A., Luxembourg
Allianz Infrastructure Norway Holdco I S.à r.l., Luxembourg
Allianz Infrastructure Spain Holdco I S.à r.L., Luxembourg
Allianz Infrastructure Spain Holdco II S.à r.l., Luxembourg
100.0
Allianz Life Insurance Lanka Ltd., Colombo
75.0
Allianz Malaysia Berhad, Kuala Lumpur
100.0
100.0
Allianz Polska Services Sp. z o.o., Warsaw
100.0
100.0
100.0
Allianz PNB Life Insurance Inc., Makati City
Allianz pojistovna a.s., Prague
100.0
Allianz Life Insurance Malaysia Berhad, Kuala Lumpur
Allianz Life Luxembourg S.A., Luxembourg
100.0
100.0
100.0
51.0
Allianz Impact Credit Solutions GP S.à r.L., Senningerberg
100.0
Allianz Immovalor S.A., Paris la Défense
Euler Hermes Patrimonia SA, Brussels
100.0
Fondo Chiuso Allianz Infrastructure Partners I, Milan
100.0
Euler Hermes Ré SA, Luxembourg
100.0
D_Consolidated Financial Statements
Foshan Geluo Storage Services Co. Ltd., Foshan
Delta Technical Services Ltd., London
100.0
Diamond Point a.s., Prague
Euler Hermes Real Estate SPPICAV, Paris la Défense
60.0
Allianz VIE Multi-Assets, Paris
100.0
100.0
% owned¹
% owned¹
100.0
3
Allianz IARD Vintage FCPR, Paris
100.0
100.0
Allianz Patrimoine Immobilier SAS, Paris la Défense
Allianz PCREL US Debt S.A., Luxembourg
% owned¹
100.0
100,0 3
100.0
Allianz Lietuva gyvybės draudimas UAB, Vilnius
100.0 3
Allianz IARD Multi-Assets, Paris
Allianz IARD EM Debt, Paris
Allianz Life Financial Services LLC, Minneapolis, MN
Allianz Management Services Limited, Guildford
100.0
Allianz Premie Pensioen Instelling B.V., Rotterdam
Allianz Premium Champions, Senningerberg
51.0
Allianz Insurance Laos Co. Ltd., Vientiane
98.13
100.0
100.0
Allianz Private Debt Secondary Fund I GP S.à r.l., Senningerberg
Allianz Private Equity Co-Investment Fund SCSp, Senningerberg
Allianz Private Equity Fund SCSp, Senningerberg
Allianz Multi Harmonie, Paris
98.1
100.0
Allianz Insurance Lanka Limited, Colombo
94.23
Allianz Multi Dynamisme, Paris
100.0
Allianz Insurance Asset Management Co. Ltd., Beijing
Allianz Multi Equilibre, Paris
100,0 3
99.2 3
100.0
100.0
Allianz Inversiones S.A., Bogotá D.C.
100.0
Allianz Private Equity Partners IV, Milan
37.5 2,3
Allianz Multi Horizon 2030-2032, Paris
Allianz Private Equity GP S.à r.l., Senningerberg
100.0
99.63
Allianz Private Equity Partners Europa III, Milan
41,7 2,3
Allianz Multi Horizon 2027-2029, Paris
100.0
Allianz Insurance plc, Guildford
Allianz Insurance Singapore Pte. Ltd., Singapore
Allianz U.S. Investment GP LLC, Wilmington, DE
Allianz Multi Croissance, Paris
100.0
100.0
Allianz MENA Holding (Bermuda) Limited, Hamilton
100.0
92.4
Allianz Presse Infra S.C.S., Luxembourg
100.0
Allianz Presse US REIT GP LLC, Wilmington, DE
92.4
100.0
Allianz Marine & Transit Underwriting Agency Pty Ltd., Sydney
Allianz Marine (UK) Ltd., London
100.0
100.0
97.3 3
100.0
Allianz Presse Infra GP S.à r.l., Luxembourg
100.0
92.4
100.0 3
Allianz Private Debt Secondary Feeder Fund I SA SICAV-RAIF,
Senningerberg
100.0 3
100.0
Allianz México S.A. Compañía de Seguros, Mexico City
Allianz Mid Cap Loans FCT, Paris
Allianz Insurance Agents - Insurance Agents' Coordinators
Single-member Ltd., Athens
100.0
100.0
100.0 3
94.83
Allianz Metaverse, Senningerberg
100.0
92.4
Allianz Presse US REIT LP, Wilmington, DE
100.0 3
Allianz Private Credit Fund S.A. SICAV-RAIF, Senningerberg
100.0
Allianz Invest 10, Vienna
100.0
100.0 3
100.0
Allianz Renewable Energy Partners Luxembourg II S.A.,
Luxembourg
100.0
Allianz Selection Small and Midcap Equity, Senningerberg
Allianz Senior European Infrastructure Debt Fund GP S.à r.l.,
Senningerberg
100.0 3
Allianz UK Infrastructure Debt GP Limited, London
Allianz Ukraine LLC, Kyiv
100.0
100.0
100.0
Allianz Underwriters Insurance Company Corp., Chicago, IL
Allianz US Debt Holding S.A., Luxembourg
100.0
100.0
Allianz Renewable Energy Partners Luxembourg IV S.A.,
Luxembourg
Allianz Services (UK) Limited, London
Allianz Selection Fixed Income, Senningerberg
100.0
Allianz Renewable Energy Partners Luxembourg Holdco VI S.A.,
Luxembourg
Allianz UK Infrastructure Debt GP 2 Limited, London
99.2
Allianz Seguros S.A., São Paulo
100.0
100.0
Allianz U.S. Investment LP, Wilmington, DE
Allianz U.S. Private REIT GP LLC, Wilmington, DE
100.0
100.0
100.0
Allianz Seguros S.A., Bogotá D.C.
100.0
Allianz U.S. Private REIT LP, Wilmington, DE
100.0
Allianz Renewable Energy Partners Luxembourg Holdco IV S.A.,
Luxembourg
98.7
Allianz Selection Alternative, Senningerberg
100.0 3
100.0
Allianz US Income Growth Advisory Master Fundo de
Allianz Seguros de Vida S.A., Bogotá D.C.
Allianz Services Mauritius LLC, Ebene
Allianz Société Financière S.à r.l., Luxembourg
100.0
Allianz Value S.r.l., Milan
100.0
100.0
100.0
Allianz Renewable Energy Partners Luxembourg VIII S.A.,
Luxembourg
Allianz Renewable Energy Partners of America LLC,
Wilmington, DE
100.0
Allianz Vermogen B.V., Rotterdam
100.0
Allianz Vie EM Debt, Paris
100.0 3
100.0
Allianz Soluciones de Inversión AV S.A., Madrid
Allianz South America Holding B.V., Amsterdam
Allianz Sp. z o.o., Warsaw
38.5 2,3
Allianz Renewable Energy Partners of America 2 LLC,
Wilmington, DE
75.0 3
Investimento Multimercado Investimento no Exterior, São Paulo
Allianz Valeurs Durables, Paris
96.43
Allianz Renewable Energy Partners Luxembourg V S.A.,
Luxembourg
100.0
Allianz Services Private Ltd., Thiruvananthapuram
Allianz Sigorta A.S., Istanbul
100.0
Allianz Renewable Energy Partners Luxembourg VI S.A.,
Luxembourg
100.0
77.63
96.2
Allianz US Private Credit Solutions GP LLC, Wilmington, DE
100.0
100.0
Allianz Social Conviction Equity, Senningerberg
Allianz US Large CAP Value, Senningerberg
(1) Matter and issue
In the consolidated financial statements of the Company, liabilities
amounting to € 776,944 million (79.0% of the consolidated total
assets) are reported under the "Insurance contracts liabilities"
balance sheet item, which are accounted for in accordance with
Measurement of certain liabilities from insurance contracts issued
in life and health insurance
Hereinafter we present the key audit matters:
② Audit approach and findings
(3) Reference to further information
Our presentation of these key audit matters has been structured in
each case as follows:
management report and on the non-financial group statement
included in the group management report.
2 Measurement of certain liabilities from insurance contracts issued
in property-casualty insurance
1 Measurement of certain liabilities from insurance contracts issued
in life and health insurance
In our view, the matters of most significance in our audit were as
follows:
Key audit matters are those matters that, in our professional judgment,
were of most significance in our audit of the consolidated financial
statements for the financial year from 1 January to 31 December 2023.
These matters were addressed in the context of our audit of the
consolidated financial statements as a whole, and in forming our audit
opinion thereon; we do not provide a separate audit opinion on these
matters.
Key audit matters in the audit of the consolidated
financial statements
We conducted our audit of the consolidated financial statements and
of the group management report in accordance with § 317 HGB and
the EU Audit Regulation (No. 537/2014, referred to subsequently as
"EU Audit Regulation") in compliance with German Generally Accepted
Standards for Financial Statement Audits promulgated by the Institut
der Wirtschaftsprüfer [Institute of Public Auditors in Germany] (IDW).
Our responsibilities under those requirements and principles are
further described in the "Auditor's Responsibilities for the Audit of the
Consolidated Financial Statements and of the Group Management
Report" section of our auditor's report. We are independent of the
group entities in accordance with the requirements of European law
and German commercial and professional law, and we have fulfilled
our other German professional responsibilities in accordance with
these requirements. In addition, in accordance with Article 10 (2)
point (f) of the EU Audit Regulation, we declare that we have not
provided non-audit services prohibited under Article 5 (1) of the EU
Audit Regulation. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for our audit
opinions on the consolidated financial statements, on the group
260
3 Measurement of financial instruments using parameters not
observable on the market and forward-looking information
Annual Report 2023 - Allianz Group
Based on our audit procedures, we were able to satisfy
ourselves that the estimates and assumptions used by the
executive directors are appropriate overall for measuring the
technical liabilities in property and casualty insurance.
IFRS 17 beginning 1 January 2023. Of this amount, liabilities of
€ 680,654 million (69.2% of the consolidated total assets) are
relating to the life and health business segment. Within the life and
health business segment, € 671,886 million of this is attributable to
the liability, which is measured using the variable fee approach
(VFA) or the general measurement model (GMM, also known as
the building block approach).
③ The company's disclosures on the measurement of liabilities for
outstanding claims in property and casualty insurance are
contained in sections "Accounting policies" and on "Insurance
operations" of the notes to the consolidated financial statements.
Basis for the audit opinions
With the involvement of our internal valuation specialists, we
have compared the respective actuarial methods and key
assumptions with generally recognised actuarial methods and
industry standards and examined to what extent these are
suitable for measuring the liabilities. Our audit also included an
evaluation of the appropriateness and integrity of the data and
assumptions, including the assessment of the executive directors
regarding the impact of changing inflation rates, used in the
valuation and a reconstruction of the claims settlement process.
Furthermore, we recalculated the amount of the liability for
selected lines of product, in particular lines of product with large
liability amounts or increased estimation uncertainties. For these
lines of product, we compared the amounts calculated by us with
the values determined by the Company for the liabilities and
evaluated any differences. We also examined whether any
adjustments to estimates in the loss reserves were adequately
documented and substantiated.
② As part of our audit, we assessed the appropriateness of selected
controls of the Group for selecting actuarial methods as well as for
determining assumptions and making estimates for the
measurement of certain liabilities from insurance contracts issued
in the property and casualty insurance.
Due to the material significance of the amount of this liability
for the Group's assets, liabilities, and financial performance as well
as the considerable scope for judgement of the executive directors
and the associated uncertainties in the estimations made, the
measurement of certain liabilities from insurance contracts issued
in property and casualty insurance was of particular significance
in the context of our audit.
Within the insurance contracts liabilities, € 79,148 million is
attributable to "Liability for incurred claims" in the property and
casualty insurance segment, which recognises the expectations
regarding insurance claims that have been incurred but not yet
settled. These represent the company's expectation of future
payments for known and unknown claims as well as the
associated expenses. The company uses various methods to
estimate these obligations. In addition, the measurement of this
liability requires a significant degree of judgement by the
executive directors of the Company regarding assumptions to be
made, such as the impact of changing inflation rates, loss
developments and regulatory changes. In addition, there is a
significant judgement of the executive directors regarding the
determination of the discount rate for calculating the liability. In
particular, product lines with a low claims frequency, high
individual claims or long claims settlement periods are usually
subject to increased estimation uncertainties.
In the consolidated financial statements of the Company, liabilities
amounting to € 776,944 million (79.0% of the consolidated total
assets) are reported under the balance sheet item "Insurance
contract liabilities" which are accounted for in accordance with
IFRS 17 beginning 1 January 2023. Of this amount, liabilities
€ 96,339 million (9.8% of the consolidated total assets) is
attributable to the Property and Casualty Insurance business
segment.
2 Measurement of certain liabilities from insurance contracts issued
in property-casualty insurance
③ The company's disclosures on the measurement of certain
liabilities from insurance contracts issued in life and health
insurance are contained in sections "Accounting policies" and
"Insurance operations" of the notes to the consolidated financial
statements.
Based on our audit procedures, we were able to satisfy
ourselves that the methods and assumptions used by the executive
directors are appropriate overall for measuring certain technical
liabilities.
With the involvement of our internal valuation specialists, we
have compared the valuation methods and key assumptions with
generally recognised actuarial methods and industry standards
and examined to what extent these are suitable for measuring the
liabilities. One focus was the assessment of the cash flows used by
the IT systems used as well as the appropriate derivation and use
of assumptions for the measurement of selected liabilities.
as well as for determining assumptions and making estimates for
the measurement of certain liabilities from insurance contracts
issued.
② As part of our audit, we assessed the appropriateness of selected
controls of the Group for selecting the valuation methods applied
Against this background and due to the material
significance of the amounts for the group's assets, liabilities and
financial performance as well as the complexity of determining
the underlying assumptions and estimates made by the executive
directors, the measurement of these liabilities was of particular
significance in the context of our audit.
To the extent that the above-mentioned liabilities are
measured using the two measurement models, the measurement
is based on complex actuarial methods (hereinafter referred to as
the "measurement methods") on the basis of comprehensive
processes for determining assumptions about future
developments of the insurance portfolios to be valued. Within the
measurement of the liabilities, the present values of the estimated
future cash flows in particular are affected by possible material
uncertainties. This uncertainty stems in particular from the
methods used and the actuarial assumptions determined in
connection with interest rates, investment income, mortality,
disability, longevity, costs and policyholder behaviour.
E_Further Information
Pursuant to § 322 Abs. 3 Satz [sentence] 1 HGB, we declare that our
audit has not led to any reservations relating to the legal compliance
of the consolidated financial statements and of the group
management report.
Claire-Marie Coste-Lepoutre
management report is consistent with the consolidated financial
statements, complies with German legal requirements and
appropriately presents the opportunities and risks of future
development; we do not express an audit opinion on those parts
of the group management report listed in the "Other Information"
section of our auditor's report and
вид 2. Wagner
Dr. Klaus-Peter Röhler
Dr. Barbara Karuth-Zelle
B. Maule fille on he
Sirma Boshnakova
Oliver Bäte
Cain's Béa Mam
The Board of Management
Allianz SE
Munich, 22 February 2024
To the best of our knowledge, and in accordance with the applicable reporting principles, the consolidated
financial statements give a true and fair view of the assets, liabilities, financial position and profit or loss of
the Group, and the Group Management Report includes a fair review of the development and
performance of the business and the position of the Group, together with a description of the material
opportunities and risks associated with the expected development of the Group.
RESPONSIBILITY STATEMENT
E_Further Information
③ Measurement of financial instruments using parameters not
observable on the market and forward-looking information
You can find informative overviews of the past years on our website:
Allianz share key indicators:
Allianz Group key indicators:
Christopher Townsend
the non-financial group statement included in section "Non-
Financial Statement" of the group management report is
prepared, in all material respects, in accordance with the
applicable German legal and European requirements as well as
with the specifying criteria disclosed by the Group's executive
directors.
R.
CM. Coste. Leportie.
the accompanying group management report (excluding the non-
financial group statement) as a whole provides an appropriate
view of the Group's position. In all material respects, this group
the accompanying consolidated financial statements comply, in
all material respects, with the IFRSS as adopted by the EU and the
additional requirements of German commercial law pursuant to
§315e Abs. [paragraph] 1 HGB and, in compliance with these
requirements, give a true and fair view of the assets, liabilities, and
financial position of the Group as at 31 December 2023, and of its
financial performance for the financial year from 1 January to
31 December 2023,
In our opinion, on the basis of the knowledge obtained in the audit,
We have audited the consolidated financial statements of Allianz SE,
Munich, and its subsidiaries (the Group), which comprise the
consolidated statement of financial position as at 31 December 2023,
and the consolidated income statement, consolidated statement of
comprehensive income, consolidated statement of changes in equity
and consolidated statement of cash flows for the financial year from
1 January to 31 December 2023, and notes to the consolidated
financial statements, including material accounting policy
information. In addition, we have audited the group management
report of Allianz SE including the non-financial group statement to
comply with §§ [Articles] 315b to 315c HGB [Handelsgesetzbuch:
German Commercial Code] included in section "Non-Financial
Statement" for the financial year from 1 January to 31 December
2023. In accordance with the German legal requirements, we have not
audited the content of those parts of the group management report
listed in the "Other Information" section of our auditor's report.
Audit opinions
financial statements and of the group
management report
Report on the audit of the consolidated
To Allianz SE, Munich
INDEPENDENT AUDITOR'S REPORT
E_Further Information
Annual Report 2023 - Allianz Group
259
Dr. Andreas Wimmer
Aulieos Свішшак
Wimmer
Dr. Günther Thalinger
Renate Wagner
Financial instruments of €721,802 million (73.4% of the
consolidated total assets) are reported in the consolidated
financial statements of the Company.
www.allianz.com/key-indicators-share
www.allianz.com/key-indicators-group
261
(German Public Auditor)
Clemens Koch
Wirtschaftsprüfer
(German Public Auditor)
266
Annual Report 2023 - Allianz Group
Wirtschaftsprüfer
E_Further Information
Auditor's report
To Allianz SE, Munich
We have audited the remuneration report of Allianz SE, Munich, for the
financial year from 1. January to 31. December 2023 including the
related disclosures, which was prepared to comply with § [Article] 162
AktG [Aktiengesetz: German Stock Corporation Act].
Responsibilities of the executive directors and the
supervisory board
The executive directors and the supervisory board of Allianz SE are
responsible for the preparation of the remuneration report, including
the related disclosures, that complies with the requirements of § 162
AktG. The executive directors and the supervisory board are also
responsible for such internal control as they determine is necessary to
enable the preparation of a remuneration report, including the related
disclosures, that is free from material misstatement, whether due to
fraud or error.
Auditor's responsibilities
AUDITOR'S REPORT
Florian Möller
PricewaterhouseCoopers GmbH
Wirtschaftsprüfungsgesellschaft
Munich, 26 February 2024
Evaluate whether the tagging of the ESEF documents with Inline
XBRL technology (iXBRL) in accordance with the requirements of
Articles 4 and 6 of the Delegated Regulation (EU) 2019/815, in the
version in force at the date of the consolidated financial
statements, enables an appropriate and complete machine-
readable XBRL copy of the XHTML rendering.
Further information pursuant to Article 10 of the
EU Audit Regulation
We were elected as group auditor by the annual general meeting on
4 May 2023. We were engaged by the supervisory board on 11 May
2023. We have been the group auditor of the Allianz SE, Munich,
without interruption since the financial year 2018.
We declare that the audit opinions expressed in this auditor's
report are consistent with the additional report to the audit committee
pursuant to Article 11 of the EU Audit Regulation (long-form audit
report).
Reference to another matter
report
-
use of the auditor's
Our auditor's report must always be read together with the audited
consolidated financial statements and the audited group
management report as well as the assured ESEF documents. The
consolidated financial statements and the group management report
converted to the ESEF format - including the versions to be filed in the
company register - are merely electronic renderings of the audited
consolidated financial statements and the audited
group
265
Annual Report 2023 - Allianz Group
E_Further Information
management report and do not take their place. In particular, the
"Report on the Assurance on the Electronic Rendering of the
Consolidated Financial Statements and the Group Management
Report Prepared for Publication Purposes in Accordance with § 317
Abs. 3a HGB" and our assurance opinion contained therein are to be
used solely together with the assured ESEF documents made available
in electronic form.
German public auditor responsible for the
engagement
The German Public Auditor responsible for the engagement is Florian
Möller.
Our responsibility is to express an opinion on this remuneration report,
including the related disclosures, based on our audit. We conducted
our audit in accordance with German generally accepted standards
for the audit of financial statements promulgated by the Institut der
Wirtschaftsprüfer (Institute of Public Auditors in Germany) (IDW).
Those standards require that we comply with ethical requirements and
plan and perform the audit to obtain reasonable assurance about
whether the remuneration report, including the related disclosures, is
free from material misstatement.
Evaluate the technical validity of the ESEF documents, i.e., whether
the electronic file containing the ESEF documents meets the
requirements of the Delegated Regulation (EU) 2019/815 in the
version in force at the date of the consolidated financial
statements on the technical specification for this electronic file.
Evaluate whether the ESEF documents provide an XHTML
rendering with content equivalent to the audited consolidated
financial statements and to the audited group management
report.
An audit involves performing procedures to obtain audit evidence
about the amounts including the related disclosures stated in the
remuneration report. The procedures selected depend on the auditor's
judgment. This includes the assessment of the risks of material
misstatement of the remuneration report including the related
disclosures, whether due to fraud or error.
perform audit procedures that are appropriate in the circumstances,
but not for the purpose of expressing an opinion on the effectiveness
of the company's internal control. An audit also includes evaluating the
appropriateness of accounting policies used and the reasonableness
of accounting estimates made by the executive directors and the
supervisory board, as well as evaluating the overall presentation of the
remuneration report including the related disclosures.
Further information on the definition of our Alternative Performance Measures and their components,
as well as the basis of the calculation adopted
www.allianz.com/results
The Allianz Group Sustainability Report "Courage to move forward" covers our contribution to the
environment, society and economy. It provides full details of our sustainability strategy, approach and
progress in 2023 as well as an outlook for 2024.
Date of publication: 7 March 2024
www.allianz.com/sustainability
Allianz at a glance
Guideline on Alternative Performance Measures
www.allianz.com/hrfactbook
The People Fact Book is the official and most comprehensive report on our workforce facts and figures,
highlighting major HR achievements over the past year and revealing the outlook for 2024.
move forward
Courage to
Allianz
Of these financial instruments, financial assets totalling
€ 704,390 million are measured at fair value, of which in turn the
fair values of € 220.967 million are calculated using valuation
models or based on third-party value indicators. These financial
instruments in particular relate to unlisted securities, other loans,
Allianz People Fact Book 2023
Date of publication: 7 March 2024
move forward
Courage to
ALLIANZ GROUP
We believe that the audit evidence we have obtained is sufficient
and appropriate to provide a basis for our audit opinion.
Audit opinion
In our opinion, based on the findings of our audit, the remuneration
report for the financial year from 1. January to 31. December 2023,
including the related disclosures, complies in all material respects with
the accounting provisions of § 162 AktG.
Reference to another matter - formal audit of the
remuneration report according to § 162 AktG
Restriction on use
We issue this auditor's report on the basis of the engagement agreed
with Allianz SE. The audit has been performed only for purposes of the
company and the auditor's report is solely intended to inform the
company as to the results of the audit. Our responsibility for the audit
and for our auditor's report is only towards the company in accordance
with this engagement. The auditor's report is not intended for any third
parties to base any (financial) decisions thereon. We do not assume
any responsibility, duty of care or liability towards third parties; no third
parties are included in the scope of protection of the underlying
engagement. § 334 BGB [Bürgerliches Gesetzbuch: German Civil
Code], according to which objections arising from a contract may also
be raised against third parties, is not waived.
Munich, 26 February 2024
PricewaterhouseCoopers GmbH
Wirtschaftsprüfungsgesellschaft
Florian Möller
Wirtschaftsprüfer
(German Public Auditor)
Dennis Schnittger
Wirtschaftsprüfer
(German Public Auditor)
267
Annual Report 2023 - Allianz Group
Further Allianz publications
Allianz Sustainability Report 2023
Allianz ⑪
In making those risk assessments, the auditor considers internal
control relevant to the preparation of the remuneration report
including the related disclosures. The objective of this is to plan and
Obtain an understanding of internal control relevant to the
assurance work on the ESEF documents in order to design
assurance procedures that are appropriate in the circumstances,
but not for the purpose of expressing an assurance opinion on the
effectiveness of these controls.
The audit of the content of the remuneration report described in this
auditor's report includes the formal audit of the remuneration report
required by § 162 Abs. [paragraph] 3 AktG, including the issuance of a
report on this audit. As we express an unqualified audit opinion on the
content of the remuneration report, this audit opinion includes that the
information required by § 162 Abs. 1 and 2 AktG has been disclosed in
all material respects in the remuneration report.
Identify and assess the risks of material non-compliance with the
requirements of § 328 Abs. 1 HGB, whether due to fraud or error,
design and perform assurance procedures responsive to those
all remaining parts of the group annual report - excluding cross-
references to external information with the exception of the
audited consolidated financial statements, the audited group
management report and our auditor's report
Our audit opinions on the consolidated financial statements, on the
group management report and on the non-financial group statement
included in the group management report do not cover the other
information, and consequently we do not express an audit opinion or
any other form of assurance conclusion thereon.
In connection with our audit, our responsibility is to read the other
information mentioned above and, in so doing, to consider whether
the other information
is materially inconsistent with the consolidated financial
statements, with the group management report disclosures
audited in terms of content or with our knowledge obtained in the
audit, or
otherwise appears to be materially misstated.
Responsibilities of the executive directors and the
supervisory board for the consolidated financial
statements and the group management report
the remuneration report pursuant to § 162 AktG [Aktiengesetz:
German Stock Corporation Act], for which the supervisory board is
also responsible
The executive directors are responsible for the preparation of the
consolidated financial statements that comply, in all material respects,
with IFRSS as adopted by the EU and the additional requirements of
German commercial law pursuant to § 315e Abs. 1 HGB and that the
consolidated financial statements, in compliance with these
requirements, give a true and fair view of the assets, liabilities, financial
position, and financial performance of the Group. In addition, the
executive directors are responsible for such internal control as they
have determined necessary to enable the preparation of consolidated
financial statements that are free from material misstatement,
whether due to fraud (i.e., fraudulent financial reporting and
misappropriation of assets) or error.
Furthermore, the executive directors are responsible for the
preparation of the group management report that, as a whole,
provides an appropriate view of the Group's position and is, in all
material respects, consistent with the consolidated financial
statements, complies with German legal requirements, and
Annual Report 2023 - Allianz Group
E_Further Information
appropriately presents the opportunities and risks of future
development. In addition, the executive directors are responsible for
such arrangements and measures (systems) as they have considered
necessary to enable the preparation of a group management report
that is in accordance with the applicable German legal requirements,
and to be able to provide sufficient appropriate evidence for the
assertions in the group management report.
The executive directors are also responsible for the preparation of
the non-financial group statement included in the group management
report in accordance with the applicable German legal and European
requirements as well as with the specifying criteria disclosed by the
Group's executive directors. Furthermore, the executive directors are
responsible for such arrangements and measures (systems) as they
have considered necessary to enable the preparation of a non-
financial group statement that is free from material misstatement,
whether due to fraud (i.e., fraudulent reporting in the non-financial
group statement) or error.
The applicable requirements contain wording and terms that are
subject to considerable interpretation uncertainties and for which
authoritative comprehensive interpretations have not yet been
published. Accordingly, the executive directors have disclosed their
interpretations of such wording and terms in section "EU Taxonomy
Regulation" of the non-financial group statement. The executive
directors are responsible for the defensibility of these interpretations.
As such wording and terms may be interpreted differently by
regulators or courts, the legal conformity of these interpretations is
uncertain.
In preparing the consolidated financial statements, the executive
directors are responsible for assessing the Group's ability to continue
as a going concern. They also have the responsibility for disclosing, as
applicable, matters related to going concern. In addition, they are
responsible for financial reporting based on the going concern basis
of accounting unless there is an intention to liquidate the Group or to
cease operations, or there is no realistic alternative but to do so.
The other information comprises further
the disclosures marked as unaudited in the group management
report
group statement on corporate governance pursuant to § 315d
HGB included in section "Corporate Governance Statement" of the
group management report
Annual Report 2023 - Allianz Group
risks, and obtain assurance evidence that is sufficient and
appropriate to provide a basis for our assurance opinion.
E_Further Information
derivatives and investments in infrastructure, private equity and
real estate.
Of the financial instruments reported in the consolidated
financial statements, financial assets in the amount of
€ 8,829 million are measured at amortised cost and
€ 562,693 million at fair value through other comprehensive
income. Of this amount, € 543,510 million is attributable to debt
instruments for which a risk provision totalling € 1,125 million was
recognised as at the reporting date to take account of
impairments for expected credit losses in accordance with the
requirements of IFRS 9 (Expected Credit Loss), as applicable since
1 January 2023.
The measurement of financial instruments whose fair value
must be determined using valuation models or value indicators
from third parties is subject to uncertainty, as input parameters
that are not observable in an active market are used for the
measurement or comparative values are not always available and
therefore estimated values are also used. Forward-looking
macroeconomic forecasts are also included in the model valuation
to take account of impairments for expected credit losses.
Model-measured financial instruments are subject to an
increased measurement risk due to the reduced objectivity and the
underlying judgements, estimates and assumptions made by the
executive directors. As the estimates and assumptions used, in
particular those relating to interest rates and cash flows, and the
valuation methods applied may have a material impact on the
valuation of these financial instruments and on the Group's assets,
liabilities and financial performance, and extensive disclosures on
valuation methods and judgements are also required in the notes,
this matter was of particular significance in the context of our
audit.
② As part of our audit, we assessed the appropriateness and
effectiveness of the controls for the valuation of model-measured
financial instruments and financial instruments measured on the
basis of third-party indicators. In addition, we assessed, among
other things, the integrity of the underlying data and the process
for determining the assumptions, estimates and forward-looking
information used in the valuation.
262
used to calculate valuation adjustments in the financial year with
recognised practices and industry standards and examined the
extent to which they are suitable for proper accounting. To assess
the inclusion of forward-looking information in the model-based
calculation of impairment for expected credit losses, we involved
internal specialists with particular expertise in the field of credit risk
modelling. We also evaluated the disclosures on valuation
methods and judgements contained in the notes to the
consolidated financial statements.
On the basis of the audit procedures performed, we were
able to satisfy ourselves that the methods and assumptions used
by the executive directors to measure certain financial instruments
(modelled and measured based on third-party indicators) and the
consideration of forward-looking information in determining the
impairment for expected credit losses are appropriate overall and
that the explanations and disclosures presented in the notes to the
consolidated financial statements are appropriate.
③ The company's disclosures on the measurement of financial
instruments are contained in sections "Accounting policies" and
"Investments" of the notes to the consolidated financial
statements.
Other information
The executive directors are responsible for the other information. The
other information comprises the following non-audited parts of the
group management report:
the
The supervisory board is responsible for overseeing the Group's
financial reporting process for the preparation of the consolidated
financial statements, of the group management report as well as of
the non-financial group statement included in the group management
report.
Auditor's responsibilities for the audit of the
consolidated financial statements and of the group
management report
With the support of our internal valuation specialists, we also
assessed the appropriateness of the methods applied by the
executive directors to determine the fair values and the
parameters used. We compared the methods and assumptions
263
E_Further Information
Other legal and regulatory
requirements
Report on the assurance on the
electronic rendering of the
consolidated financial statements and
the group management report
prepared for publication purposes in
accordance with § 317 Abs. 3a HGB
Assurance opinion
We have performed assurance work in accordance with § 317 Abs. 3a
HGB to obtain reasonable assurance as to whether the rendering of
the consolidated financial statements and the group management
report (hereinafter the "ESEF documents") contained in the electronic
file Allianz SE_KA+KLB_ESEF-2023-12-31.zip and prepared for
publication purposes complies in all material respects with the
requirements of § 328 Abs. 1 HGB for the electronic reporting format
("ESEF format"). In accordance with German legal requirements, this
assurance work extends only to the conversion of the information
contained in the consolidated financial statements and the group
management report into the ESEF format and therefore relates neither
to the information contained within these renderings nor to any other
information contained in the electronic file identified above.
In our opinion, the rendering of the consolidated financial
statements and the group management report contained in the
electronic file identified above and prepared for publication purposes
complies in all material respects with the requirements of § 328 Abs. 1
HGB for the electronic reporting format. Beyond this assurance
opinion and our audit opinion on the accompanying consolidated
financial statements and the accompanying group management
report for the financial year from 1 January to 31 December 2023
contained in the "Report on the Audit of the Consolidated Financial
Statements and on the Group Management Report" above, we do not
express any assurance opinion on the information contained within
these renderings or on the other information contained in the
electronic file identified above.
Basis for the assurance opinion
We conducted our assurance work on the rendering of the
consolidated financial statements and the group management report
contained in the electronic file identified above in accordance with
§ 317 Abs. 3a HGB and the IDW Assurance Standard: Assurance Work
on the Electronic Rendering, of Financial Statements and
Management Reports, Prepared for Publication Purposes in
Accordance with § 317 Abs. 3a HGB (IDW ASS 410 (06.2022)) and the
International Standard on Assurance Engagements 3000 (Revised).
Our responsibility in accordance therewith is further described in the
"Group Auditor's Responsibilities for the Assurance Work on the ESEF
Documents" section. Our audit firm applies the IDW Standard on
Quality Management: Requirements for Quality Management in the
Audit Firm (IDW QMS 1 (09.2022)).
Responsibilities of the executive directors and the
supervisory board for the ESEF documents
In addition, the executive directors of the Company are
responsible for such internal control as they have considered
necessary to enable the preparation of ESEF documents that are free
from material non-compliance with the requirements of § 328 Abs. 1
HGB for the electronic reporting format, whether due to fraud or error.
The supervisory board is responsible for overseeing the process
for preparing the ESEF documents as part of the financial reporting
process.
Group auditor's responsibilities for the assurance
work on the ESEF documents
Our objectives are to obtain reasonable assurance about whether the
consolidated financial statements as a whole are free from material
misstatement, whether due to fraud or error, and whether the group
management report as a whole provides an appropriate view of the
Group's position and, in all material respects, is consistent with the
consolidated financial statements and the knowledge obtained in the
audit, complies with the German legal requirements and appropriately
Our objective is to obtain reasonable assurance about whether the
ESEF documents are free from material non-compliance with the
requirements of § 328 Abs. 1 HGB, whether due to fraud or error. We
exercise professional judgment and maintain professional skepticism
throughout the assurance work. We also:
Annual Report 2023 - Allianz Group
264
The executive directors of the Company are responsible for the
preparation of the ESEF documents including the electronic rendering
of the consolidated financial statements and the group management
report in accordance with § 328 Abs. 1 Satz 4 Nr. [number] 1 HGB and
for the tagging of the consolidated financial statements in accordance
with § 328 Abs. 1 Satz 4 Nr. 2 HGB.
From the matters communicated with those charged with
governance, we determine those matters that were of most
significance in the audit of the consolidated financial statements of the
current period and are therefore the key audit matters. We describe
these matters in our auditor's report unless law or regulation precludes
public disclosure about the matter.
Reasonable assurance is a high level of assurance, but is not a
guarantee that an audit conducted in accordance with § 317 HGB and
the EU Audit Regulation and in compliance with German Generally
Accepted Standards for Financial Statement Audits promulgated by
the Institut der Wirtschaftsprüfer (IDW) will always detect a material
misstatement. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users
taken on the basis of these consolidated financial statements and this
group management report.
We exercise professional judgment and maintain professional
skepticism throughout the audit. We also:
-
Evaluate the appropriateness of accounting policies used by the
executive directors and the reasonableness of estimates made by
the executive directors and related disclosures.
Conclude on the appropriateness of the executive directors' use of
the going concern basis of accounting and, based on the audit
evidence obtained, whether a material uncertainty exists related
to events or conditions that may cast significant doubt on the
Group's ability to continue as a going concern. If we conclude that
a material uncertainty exists, we are required to draw attention in
the auditor's report to the related disclosures in the consolidated
financial statements and in the group management report or, if
such disclosures are inadequate, to modify our respective audit
opinions. Our conclusions are based on the audit evidence
obtained up to the date of our auditor's report. However, future
events or conditions may cause the Group to cease to be able to
continue as a going concern.
Evaluate the overall presentation, structure and content of the
consolidated financial statements, including the disclosures, and
whether the consolidated financial statements present the
underlying transactions and events in a manner that the
consolidated financial statements give a true and fair view of the
assets, liabilities, financial position and financial performance of
the Group in compliance with IFRSS as adopted by the EU and the
additional requirements of German commercial law pursuant to
§ 315e Abs. 1 HGB.
Identify and assess the risks of material misstatement of the
consolidated financial statements and of the group management
report, whether due to fraud or error, design and perform audit
procedures responsive to those risks, and obtain audit evidence
that is sufficient and appropriate to provide a basis for our audit
opinions. The risk of not detecting a material misstatement
resulting from fraud is higher than for one resulting from error, as
fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal controls.
Obtain an understanding of internal control relevant to the audit
of the consolidated financial statements and of arrangements and
measures (systems) relevant to the audit of the group
management report and of the non-financial group statement
included in the group management report in order to design audit
procedures that are appropriate in the circumstances, but not for
the purpose of expressing an audit opinion on the effectiveness of
these systems.
Obtain sufficient appropriate audit evidence regarding the
financial information of the entities or business activities within the
Group to express audit opinions on the consolidated financial
statements and on the group management report. We are
responsible for the direction, supervision and performance of the
group audit. We remain solely responsible for our audit opinions.
Evaluate the consistency of the group management report with
the consolidated financial statements, its conformity with German
law, and the view of the Group's position it provides.
Perform audit procedures on the prospective information
presented by the executive directors in the group management
report. On the basis of sufficient appropriate audit evidence we
evaluate, in particular, the significant assumptions used by the
executive directors as a basis for the prospective information, and
evaluate the proper derivation of the prospective information
from these assumptions. We do not express a separate audit
opinion on the prospective information and on the assumptions
used as a basis. There is a substantial unavoidable risk that future
events will differ materially from the prospective information.
Evaluate the suitability of the criteria presented by the executive
directors in the non-financial group statement as a whole. As
We also provide those charged with governance with a statement
that we have complied with the relevant independence requirements,
and communicate with them all relationships and other matters that
may reasonably be thought to bear on our independence, and where
applicable, actions taken to eliminate threats or safeguards applied.
We communicate with those charged with governance regarding,
among other matters, the planned scope and timing of the audit and
significant audit findings, including any significant deficiencies in
internal control that we identify during our audit.
explained in the description of the responsibilities of the executive
directors, the executive directors have interpreted the wording and
terms contained in the relevant regulations; the legal conformity
of these interpretations is subject to inherent uncertainties
mentioned in this description. Those inherent uncertainties in the
interpretation apply to our audit accordingly.
presents the opportunities and risks of future development, and
whether the non-financial group statement has been prepared, in all
material respects, in accordance with the applicable German legal
and European requirements and with the specifying criteria disclosed
by the Company's executive directors, as well as to issue an auditor's
report that includes our audit opinions on the consolidated financial
statements, on the group management report and on the non-
financial group statement.
E_Further Information
Annual Report 2023 - Allianz Group
8 August 2024
www.allianz.com
This is a translation of the German Annual Report of the Allianz Group.
In case of any divergences, the German original is legally binding.
Königinstrasse 28
Phone +49 89 3800 0
Imprint
1 The German Securities Trading Act ("Wertpapierhandelsgesetz") obliges issuers to announce immediately any information which may have a substantial price
impact, irrespective of the communicated schedules. Therefore we cannot exclude that we have to announce key figures related to quarterly and fiscal year results
ahead of the dates mentioned above. As we can never rule out changes to these dates, we recommend checking them online on the Allianz company website.
8 May 2025
14 March 2025
28 February 2025
13 November 2024
Annual Report online: www.allianz.com/annualreport
Date of publication: 7 March 2024
Allianz SE
Financial Results 2024
8 May 2024
Annual General Meeting
Annual Report 2024
Financial Results 3Q
Financial Results 2Q/Interim Report 6M
Financial Results 1Q
Annual General Meeting
Important dates¹
Financial calendar
Germany
15 May 2024
80802 Munich
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓
Sustainability
✓
✓
✓
✓
✓
Investment
✓
✓
✓
✓
✓
✓
Employee Engagement
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓
Management
Expertise
✓
Technology
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓
Digital Transformation
✓
✓
✓
✓
With regard to the proportion of women on the first and second
management levels below the Board of Management, the Board of
Management has set targets of 30% for each, to be met by
31 December 2024. As at 31 December 2023, this target was already
met for the first management level with a percentage of women of
34.2%, but was not yet met for the second level with a percentage of
28.6%.
✓
The Allianz Group has an appropriate and effective internal control
system for reviewing and monitoring its operating activities and
business processes, in particular financial reporting, as well as
compliance with regulatory requirements. The requirements placed on
the internal control system are essential, not only for the resilience and
value of the company, but also to retain the confidence of the capital
market, our customers, and the public. An assessment of the
appropriateness and effectiveness of the internal control system as
part of the System of Governance is conducted regularly in the course
of the review of the business organization.
In addition, the Allianz Group has implemented an appropriate
and effective framework and measures to identify, assess, manage,
and communicate risks. For further information on the internal control
system and risk management system of Allianz, please refer to the Risk
and Opportunity Report.
Compliance management system
Integrity is at the core of our compliance programs and underpins the
trust of our customers, shareholders, business partners, and
employees. The Compliance function fosters a corporate culture of
individual and collective responsibility for ethical conduct and
adherence to the rules. For further information on the compliance
management system of Allianz, please refer to the Non-Financial
Statement.
Code of Conduct
Our Code of Conduct and the internal compliance policies and
guidelines derived from it provide all employees, managers, and
executive board members with clear and practical guidance,
enabling them to act in line with the values of the Allianz Group. The
rules of conduct established by the Code of Conduct are binding
for all employees worldwide and form the basis for our compliance
programs. The Code of Conduct is available on the Allianz company
website.
Directors' Dealings
Members of the Board of Management and the Supervisory Board, as
well as persons closely associated with them, are obliged by the E.U.
Market Abuse Regulation to notify both Allianz SE and the German
Federal Financial Supervisory Authority of any transactions carried out
by them involving shares or debt securities of Allianz SE or related
financial derivatives or other related financial instruments as soon as
the value of the acquisition or disposal transactions by the member
reaches or exceeds € 20 thou in total within a calendar year. These
disclosures are published on the Allianz company website.
Accounting and auditing
The Allianz Group prepares its accounts according to §315e HGB on
the basis of the International Financial Reporting Standards (IFRS) as
applicable in the European Union. The annual financial statements of
Allianz SE are prepared in accordance with German law and
accounting standards.
The auditor of the annual financial statements and the auditor in
charge of the review of the half-yearly financial report were elected by
the Annual General Meeting on 4 May 2023. The audit of the
financial statements covers the individual financial statements of
Allianz SE and the consolidated financial statements of the
Allianz Group. In addition, the auditor audits the (Group) Management
Report, including the Non-Financial Statement. In accordance with
regulatory requirements, the solvency statements are also audited by
the auditor, who also has to audit the Remuneration Report.
The Non-Financial Statement and the Remuneration Report for the
financial year 2023 were also subjected to a substantive audit by the
auditor, in addition to the statutory audit scope.
20
20
Annual Report 2023 - Allianz Group
B_Corporate Governance
We inform our shareholders, financial analysts, the media, and
the general public about the Company's situation on a regular basis
and in a timely manner. The annual financial statements of Allianz SE,
the consolidated financial statements of the Allianz Group, and the
respective Management Reports are made publicly available within
90 days of the end of each financial year. Additional information is
provided in the Allianz Group's half-yearly financial reports and
quarterly statements. Information is also made available at the
Annual General Meeting, at conference calls for analysts and
journalists, and on the corporate website. The Allianz company website
also provides a financial calendar listing the dates of major
publications and events, such as annual reports, half-yearly
financial reports, quarterly statements, Annual General Meetings,
and analyst conference calls as well as financial press conferences.
Information in accordance with the
German Act on the Equal Participation
of Women and Men in Executive
Positions in the Private and the Public
Sectors
The section below outlines the targets set for Allianz SE and the other
companies of the Allianz Group in Germany that are subject to co-
determination (the "subsidiaries concerned") for the Supervisory
Board, the Board of Management, and the two management levels
below the Board of Management.
Pursuant to §17 (2) SEAG, the share of women and men among
the members of the Supervisory Board of Allianz SE has to be at least
30% each. The Supervisory Board fulfills this requirement as it includes
five women (41.7%) and seven men (58.3%).
Pursuant to §16 (2) SEAG, it has to be ensured that the Board of
Management includes at least one female and at least one male
member when appointing members to the Board of Management.
This statutory requirement is met by the current Board of Management
of Allianz SE. As at 31 December 2023, the proportion of women on
the Board of Management was 33.3%. Since 1 January 2024, the
proportion of women on the Board of Management has been 44.4%.
Practice
With regard to the Supervisory Boards of the subsidiaries
concerned, the target quotas for nine of those eleven subsidiaries were
set at 33%, the target quota for one subsidiary concerned was set at
35%, and the target quota for the remaining subsidiary concerned was
set at 50% for 31 December 2024. Eight of the eleven subsidiaries
reached this target ahead of the due date as at 31 December 2023.
The target quotas for the respective Boards of Management of
the subsidiaries concerned were between 25% and 50% (35.7% on
average) for 31 December 2024 and were already met by eight of the
eleven companies as of 31 December 2023. For the subsidiaries
concerned, the respective Boards of Management have set target
quotas of 30% to 40% (32.9% on average) for 31 December 2024 for
the first management level and target quotas of 30% to 43.5% (39.2%
on average) for the second management level below the Board of
Management. Due to internal restructurings, one of the eleven
subsidiaries no longer has any employees below the level of the Board
of Management. Therefore, reference will only be made to ten
subsidiaries in the following paragraph.
As at 31 December 2023, the targets were met by four of the ten
subsidiaries concerned for the first management level, while two of the
ten companies met the target set for the second management level
ahead of the due date. Despite increased efforts to promote women
in the Allianz Group and in the individual subsidiaries, it was not
possible to reach the targets ahead of the due date in the other cases
as it was not always possible to identify suitable female candidates for
all vacant positions. Allianz continues to work to achieve these targets.
21
Annual Report 2023 - Allianz Group
B_Corporate Governance
TAKEOVER-RELATED STATEMENTS AND EXPLANATIONS
Internal control system and risk management
system
Corporate governance practices
Each year, an Annual General Meeting is held, at which the Board
of Management and Supervisory Board give an account of the
preceding financial year. For special circumstances, the German Stock
Corporation Act provides for the convening of an Extraordinary
General Meeting. If authorized by the Statutes, general meetings can
also be held in virtual format.
Shareholders exercise their rights at the General Meeting. The General
Meeting elects the shareholder representatives of the Supervisory
Board and decides on the approval of the actions taken by the Board
of Management and the Supervisory Board. It decides, in particular, on
the appropriation of net earnings, capital measures, the election of the
auditor, and approval of intercompany agreements. It also decides on
the approval of the remuneration system for the members of the
Board of Management presented by the Supervisory Board, the
remuneration of the Supervisory Board, the approval of the
Remuneration Report prepared by the Board of Management and the
Supervisory Board, as well as changes to the Company's Statutes.
Resolutions of the General Meeting shall be passed, unless mandatory
legal provisions require otherwise, by a simple majority of the votes cast.
In accordance with European regulations and the Statutes,
amendments to the Statutes require at least a two-thirds majority of the
votes cast if less than half of the share capital is represented at the
General Meeting. In addition, such resolutions require the simple
majority of the capital stock represented at the time of the resolution,
unless higher thresholds are stipulated by law. When adopting
resolutions, each share confers one vote.
✓
North America
✓
✓
✓
✓
Regional
Growth Markets
Expertise
Europe (E.U.)
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓ Criteria met. Expertise criteria based on annual self-evaluation by the Supervisory Board. Tick means at least "Good knowledge" and implies the capacity to understand the relevant matters well, and to take educated decisions. Good knowledge may result from existing qualifications and from the
training regularly attended by all members of the Supervisory Board. On a scale from A-E this requires at least grade B.
1_According to the German Corporate Governance Code.
19
Annual Report 2023 - Allianz Group
B_Corporate Governance
Supervisory Board remuneration
The remuneration of the Supervisory Board is laid down in the Statutes
of Allianz SE. The most recent resolution on Supervisory Board
remuneration was passed at the Annual General Meeting on
4 May 2023. The corresponding resolution of the Annual General
Meeting and the Remuneration Report, including the auditor's report,
are available at the Allianz company website.
General Meeting
✓
✓
✓
✓
2018
2016
2018
2015
2022
Regulatory Requirement
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓
、
Personal
(Fit & Proper)
Appropriateness
Independence¹
✓
✓
✓
✓
✓
✓
✓
Di Paolo
Lawrenz
Kirsch
Grundler
The following information is provided pursuant to §289a and §315a of
the German Commercial Code ("Handelsgesetzbuch - HGB") and
§ 176 (1) of the German Stock Company Act ("Aktiengesetz - AktG").
B_Corporate Governance
The Supervisory Board pursues these objectives, and thus also the
diversity concept, when nominating candidates for shareholder
representatives. As employee representatives are appointed
according to different national provisions, the potential to influence
the selection of employee representatives is limited.
The Supervisory Board of Allianz SE is composed in accordance
with these objectives, including the diversity concept:
-
According to the assessment of the Supervisory Board, all
shareholder representatives i.e., Ms. Boissard, Ms. Bosse, Ms.
Chatterjee as well as Mr. Diekmann, Dr. Eichiner and Mr. Hainer - are
independent within the meaning of the objectives (see No. 1.3).
The members of the Audit Committee as a whole are familiar with
the sector in which the company operates. All shareholder
representatives on the Audit Committee, including the Chairperson of
the Committee, have comprehensive expertise in the fields of
accounting and auditing. The expertise in the field of accounting
consists of special knowledge and experience in the application of
accounting principles and internal control and risk management
systems, and the expertise in the field of auditing consists of special
knowledge and experience in the auditing of financial statements.
Accounting and auditing also include sustainability reporting and its
audit.
The Chairperson of the Audit Committee, Dr. Eichiner, is a business
administration graduate. He gained extensive knowledge and
experience in both accounting and auditing during his many years as
Chief Financial Officer of a DAX-listed company. Ms. Boissard also
acquired extensive knowledge and experience in both of these areas
during her many years as a member of the Audit Committee and as
part of her role as CEO of Korian S.A.. Finally, Mr. Diekmann also has
in-depth knowledge and experience in both areas due to his many
years of service first as CEO and later as Chairperson of the
Supervisory Board and long-standing member of the Audit Committee
of the Supervisory Board of Allianz SE.
The employee representatives on the Audit Committee, Ms.
Grundler and Mr. Le Goaër, also have expertise in the fields of
accounting and auditing due to their long-standing membership of the
Audit Committee of the Supervisory Board of Allianz SE.
With five female and seven male Supervisory Board members,
the gender ratio of 30% required under the German Act on the Equal
Participation of Women and Men in Executive Positions is met. In
addition, the Supervisory Board has five members with international
backgrounds.
The skills profile is also met by the Supervisory Board as a whole.
Based on the objectives for its composition, the Supervisory Board of
Allianz SE has developed the following qualification matrix.
Supervisory Board of Allianz SE: Qualification matrix
✓
Diekmann
Boissard
Bosse
Chatterjee
Eichiner
Tenure
Joined Board in
2017
2017
2017
2012
2022
2016
Burkhardt-
Berg
2012
Le Goaër
Hainer
✓
✓
✓
German
French
German
German
German
male
Italian
Accounting
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓
Insurance Actuarial
✓
✓
✓
✓
✓
✓
✓
✓
✓
German
Singaporean
Danish
French
✓
No Overboarding¹
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓
Gender
male
female
female
female
male
female
male
female
male
male
Diversity
Nationality
German
German
male
Composition of share capital
Net income attributable to shareholders amounted to € 8.54 bn
in the past financial year and was therefore within the target range
of € 7.9 - 8.9 bn, resulting in a target achievement of 100.00%.
Restrictions on voting rights and share transfers;
exercise of voting rights in case of employee equity
participations
Shareholding requirement
•
CEO: 2 x base salary
BM: 1 x base salary
Total stock exposure, including
LTI at full run-rate:
• CEO: 8 x base salary
⚫ BM: 7 x base salary
• 15% of the target remuneration (50% of the base
salary)
.
Pension provision
(pension
contributions)
CEO: € 1,003 thou, BM: € 512 thou
Target achievement factor
3,011
1,536
annual bonus
☑
4-year
share price development
Relative performance factor
(index comparison)
incentive
.
(LTI), deferred
Malus
Clawback
Severance payment limit ≤ 2 x target remuneration
excluding pension contributions
.
Shareholding
requirement
45%
Long-term
This comparison is based on the total direct remuneration of a member
of the Board of Management and the average direct remuneration of
an employee of the German Allianz companies. The Supervisory
Board's decision in December is based on the factor resulting from this
comparison for the previous financial year. For the 2022 financial year,
the factor for the Chairperson of the Board of Management to an
employee was "65" and the factor for a regular Board member to an
employee was "37". For the 2023 financial year, the respective factor
for the Chairperson of the Board of Management to an employee is
"68" and the factor regular board member to employee is "36".
26
Annual Report 2023 - Allianz Group
B_Corporate Governance
Overview of the Allianz SE remuneration system
The following diagram provides an overview of the structure and
amount of the target remuneration of the members of the Board of
Management in the 2023 financial year.
In € thou
CEO / BM
Components
Other elements
Severance payment
30%
Fix
Base salary
Target achievement factor (0-150%)
25%
1,673
854
Annual bonus
Group result
(50% operating result, 50% net income)
☑ Individual contribution factor (0.8-1.2)
LTI payout factor (0-272%¹)
•
2,007
1,024
Malus: up to 100%
☑Sustainability check² (100% down to 0) ④
Applicable to the entire variable remuneration:
The annual bonus provides incentives for profitable growth and further
development of the operating business by successfully implementing
the business objectives for the respective financial year. In doing so, the
overall responsibility for reaching the Group targets as well as the
individual performance with regard to the operational responsibilities
of the individual members of the Board of Management are taken into
consideration.
The annual bonus is calculated by multiplying the target
achievement factor by the target amount for the annual bonus. It is
paid out in cash after the end of the relevant financial year, with
payment limited to a maximum of 150% of the target amount.
Long-term incentive - LTI
The long-term, share-based remuneration is oriented mainly towards
the sustainable increase in the enterprise value. Taking the share price
performance in absolute and relative terms as a basis, it encourages
combining the interests of the shareholders with those of the members
of the Board of Management.
Other stakeholder aspects are taken into consideration by setting
strategic sustainability targets. The achievement of these targets forms
the basis for the final assessment at the end of the four-year
contractual vesting period.
Almost two thirds (64%) of the variable remuneration is share-
based, so as to adequately reflect the long-term performance of the
company in the Board of Management remuneration.
Additional remuneration principles
Shareholding obligation and shareholding exposure
The members of the Board of Management are obliged to build up
the following degree of share ownership within three years:
Chairperson of the Board of Management: two times base salary,
i.e., € 4,013 thou,
Annual bonus
Regular Board of Management member: one time base salary,
i.e., € 1,024 thou.
In combination with the virtual shares (RSU) accumulated over
four years through the LTI plan, the Allianz SE Board of Management
has significant economic exposure to Allianz stock. This amounts to
approximately 800% of base salary for the Chairperson and
approximately 700% of base salary for a regular Board member.
Malus/clawback
In order to ensure sustainable corporate development and to avoid
taking inappropriate risks, variable remuneration components may
not be paid, or payment may be restricted, in the event of a significant
breach of the Allianz Code of Conduct or regulatory Solvency II
policies or standards, including risk limits.
In the same way, variable remuneration components already paid
may be subject to a clawback for three years after payout.
Additionally, a reduction or cancellation of variable remuneration may
be implemented if this is required by the supervisory authority (BaFin)
in accordance with its statutory powers.
Payout cap
In
accordance with §87a (1) sentence 2 (1) AktG and the
recommendations of the German Corporate Governance Code, the
Supervisory Board has determined a remuneration cap.
28
Annual Report 2023 - Allianz Group
As of 31 December 2023, the share capital of Allianz SE was
€ 1,169,920,000. It was divided into 391,718,983 registered and fully
paid-up shares with no par value. All shares carry the same rights and
obligations. Each no-par value share carries one vote.
Ownership is required for the entire term of service on the Board of
Management. Shares will be acquired through mandatory pay
component conversion. In the event of a base salary increase, the
shareholding obligation increases accordingly. The ownership
obligation ceases with the end of the mandate.
The performance-based variable remuneration includes the short-
term annual bonus and long-term share-based remuneration. This
composition aims to balance short-term performance, longer-term
success, and sustained value creation. The Supervisory Board ensures
that the variable remuneration targets are challenging, sustainable,
and ambitious.
Performance-based remuneration
Members of the Board of Management may have additional
pension entitlements under former pension plans based on previous
positions in the Allianz Group or due to membership of the Board of
Management prior to 2015. Payments of social insurance
contributions abroad required by Allianz in individual cases may also
give rise to additional pension entitlements.
• Clawback: up to 3 years
100%
6,691
3,414
CEO = Chief Executive Officer, BM = regular Board member.
Consideration of sustainability criteria.
1_The cap of € 11,750 thou, or € 6,000 thou including pension contributions, limits the LTI effective payout to a maximum of 272% of the target allocation value.
2_Review of target achievement for sustainability on the basis of financial, environmental, and social criteria.
27
22
• Remuneration cap including pension contributions
in € thou:
CEO: € 11,750, BM: € 6,000
Cap
•
Annual Report 2023 - Allianz Group
B_Corporate Governance
Fixed remuneration
The fixed remuneration components comprise the base salary,
perquisites, and pension contributions. These components provide
competitive remuneration to attract and retain Board of Management
members with experience and skills that enable them to develop and
successfully implement the Allianz Group's strategy. They secure a
reasonable level of income in line with market conditions and promote
a company management that is commensurate with risk.
Base salary
The base salary, which is not performance-related, is paid in twelve
equal monthly installments.
Perquisites
Perquisites mainly consist of contributions to accident and liability
insurances, tax consultant fees, and the provision of a company car
and further individual perquisites if applicable. Perquisites are not
linked to performance. Each member of the Board of Management is
responsible for paying the income tax due on these perquisites. The
Supervisory Board regularly reviews the level of perquisites; a
contractual annual cap applies. If an appointment to the Board of
Management requires a change of residence, relocation expenses are
reimbursed to an appropriate extent.
Pension contribution
To provide competitive and cost-effective retirement and disability
benefits, company contributions to the defined-contribution pension
plan "My Allianz Pension" are invested with a guarantee for the
contributions paid but no further interest guarantee.
Each year, the Supervisory Board decides whether a budget is
provided and, if so, to what extent. The current pension contribution
generally represents 15% of the target remuneration of the Board
members.
Apart from cases of occupational or general disability for medical
reasons, the earliest age a pension can be drawn is 62. Should Board
membership cease before the retirement age is reached, accrued
pension rights are maintained if vesting requirements are met.
Vertical appropriateness
As part of the review in 2022 of the appropriateness of the
remuneration of the Board of Management, a need to adjust the level
of remuneration for the Board members at Allianz SE was identified
for 2023 and going forward. A comparison of Board of Management
remuneration with the DAX 40 companies on the basis of turnover,
number of employees and market capitalization shows that the
remuneration of the Chairperson of the Management Board and the
ordinary members of the Management Board is below the
comparative value. In addition, the reduction of the entire Board of
Management to nine members and the associated redistribution of
tasks led to an increase in the workload for the remaining Board
members. For these reasons, the Supervisory Board deemed an
increase in the annual target remuneration of 5% for all Board
members to be appropriate. The exact amounts can be found in the
graph relating to the overview of the structure of the target
remuneration.
Components of the Board of Management
remuneration and their relation to strategy
Horizontal appropriateness
-
Under the Allianz Equity Incentive Program, Restricted Stock Units
(RSUs) i.e., virtual Allianz shares - are granted to senior
management of the Allianz Group worldwide as a stock-based
remuneration component. The conditions for these RSUs contain
change-of-control clauses, which apply when a majority of the
voting share capital in Allianz SE is directly or indirectly acquired
by one or more third parties who do not belong to the
Allianz Group, and which provide for an exception from the usual
vesting and exercise periods. In line with the relevant general
conditions, the company will release the RSUs to plan participants
on the day of the change of control, without observing any vesting
period that would otherwise apply. The cash amount payable per
RSU must equal or exceed the average market value of the Allianz
share and the price offered per Allianz share in a preceding tender
offer. By providing for the non-application of the vesting period in
the event of a change of control, the terms take into account the
fact that the conditions influencing the share price are
substantially different when there is a change of control.
23
Annual Report 2023 - Allianz Group
B_Corporate Governance
REMUNERATION REPORT
The Remuneration Report describes the structure and arrangements
of the remuneration system for the Board of Management and the
Supervisory Board of Allianz SE. It explains the application of the
remuneration system in the 2023 financial year, using detailed and
individualized specifications on the remuneration of current and
former members of the Board of Management and the Supervisory
Board.
The report was jointly created by the Board of Management and
the Supervisory Board, taking into consideration the requirements of
§162 of the German Stock Corporation Act (AktG), and the
recommendations of the German Corporate Governance Code in its
currently valid version.
It was also decided to allow the auditor to carry out a
comprehensive, content audit of the Remuneration Report going
above and beyond the legal requirements of § 162 (3) AktG.
The remuneration year of 2023 at a
glance
Allianz Group sponsoring and similar partnership agreements
may provide for termination rights for the other party where there
is a change of control in relation to Allianz SE. These termination
rights are largely discretionary.
The economic and geopolitical environment
The Supervisory Board's Personnel Committee closely monitored
business developments, particularly with regard to potential target
achievement at Group level and individual remuneration targets at
the half-year and year-end 2023. In addition to the financial targets,
the non-financial targets and target achievement for 2023 were also
discussed intensively, and changes to the Management Board were
prepared and implemented.
Group financial targets
The annual bonus and the long-term incentive (LTI) allocation are
based on two Group financial targets for the relevant financial year:
operating profit and net income attributable to shareholders, each at
50%.
The operating profit target of € 14.20 bn was exceeded to
€ 14.75 bn, as the Property-Casualty, Life/Health, and Corporate and
Other business segments achieved growth in operating profit and
more than compensated for the slight decline in the Asset
Management business segment. This resulted in a target
achievement of 107.69% for the operating profit.
Operating profit
150%
107.69%
100%
The transition to IFRS 9 means a significant increase in the share
of assets measured at fair value through profit or loss on the balance
sheet in the Property-Casualty business segment and thus
significantly higher volatility of the net income in combination with
fewer steering options. In the Board's remuneration system, which will
be submitted for approval by the 2025 Annual General Meeting, the
Group's financial target of net income attributable to shareholders
will be adjusted going forward by eliminating certain non-operating
effects such as fluctuations from market movements.
For the 2023 financial year, the bonus curve was adjusted in
order to address fluctuations in the net income that the Board of
Management cannot control in either direction. For this purpose,
100% target achievement was defined as a plateau with an upward
or downward fluctuation range of € 500 mn.
In the first half of the year in particular, 2023 was characterized by
the continued dynamic inflation trend in many leading economies.
Only in the second half of the year was a slow normalization of
inflation rates achieved thanks to rapid interest rate hikes by central
banks. The economic impact of high inflation and restrictive
monetary policy was also evident on the international capital
markets. In addition to high claims inflation, the insurance industry
and asset management therefore also had to successfully navigate a
very volatile investment environment. Natural disasters, such as the
earthquake in Türkiye and Syria as well as thunderstorms in Germany,
also posed major challenges for our industry in 2023. The ongoing
war in Ukraine and the conflict in the Middle East contributed to the
challenging geopolitical and economic environment.
In some cases, bilateral credit agreements provide for termination
rights in the event of a change of control, mostly defined as the
acquisition of at least 30% of the voting rights within the meaning
of §29 (2) of the German Takeover Act ("Wertpapiererwerbs- und
Übernahmegesetz - WpÜG"). Where such termination rights are
exercised, the respective credit lines have to be replaced by new
credit lines under conditions then applicable.
The framework agreements between Allianz SE and the
subsidiaries of various car manufacturers relating to the
distribution of car insurance by the respective car manufacturers
each include a clause under which each party has an
extraordinary termination right in case there is a change of control
of the other party.
-
Shares may only be transferred with the consent of the company. An
approval duly applied for may only be withheld if it is deemed
necessary in the company's interest on exceptional grounds. The
applicant will be informed of the reasons.
The Supervisory Board regularly benchmarks the remuneration of the
Board of Management of Allianz SE against other DAX companies
and selected international companies (including, for example, the top
positions in the STOXX Europe 600 Insurance), taking into account the
company's position, and the Allianz Group's long-term performance,
relative size, complexity, and internationality.
Shares acquired by employees of the Allianz Group as part of the
employee stock purchase plan are generally subject to a three-year
lock-up period. During the lock-up period, employees can exercise
their voting rights.
Interests in the share capital exceeding 10% of the
voting rights
Allianz SE is not aware of any direct or indirect interests in the share
capital that exceed 10% of the voting rights.
Shares with special rights conferring powers of
control
There are no shares with special rights conferring powers of control.
Legal and statutory provisions applicable to the
appointment and removal of members of the
Board of Management and to amendments of the
Statutes
The appointment and removal of members of Allianz SE's Board of
Management is governed by Articles 9 (1), 39 (2) and 46 of the SE
Regulation, §§84, 85 AktG, §24 (3) and §47 No. 1 of the German
Insurance Supervision Act ("Versicherungsaufsichtsgesetz - VAG"), and
the Statutes. According to the Statutes, the Board of Management
shall consist of at least two persons; the Supervisory Board determines
the number of any additional members (§5 (1) of the Statutes). The
members of the Board of Management are appointed by the
Supervisory Board for a term of up to five years; reappointment is
permitted for a maximum of five years in each case (§5 (3) of the
Statutes). A simple majority of the votes cast in the Supervisory Board
is required to appoint members to the Board of Management. In the
case of a tie vote, the Chairperson of the Supervisory Board, who
pursuant to Article 42 of the SE Regulation must be a shareholder
representative, shall have the casting vote (§8 (3) of the Statutes). If
the Chairperson does not participate in the vote, the Vice-Chairperson
shall have the casting vote, provided they are a shareholder
representative. A Vice-Chairperson who is an employee representative
has no casting vote (§8 (3) of the Statutes).
Amendments to the Statutes are governed by Article 59 SE
Regulation, §179 AktG, and the Statutes. § 13 (4) of the Statutes of
Allianz SE stipulates that, unless mandatory law requires otherwise,
changes to the Statutes require a two-thirds majority of the votes cast
at a General Meeting or, if at least one half of the share capital is
represented, a simple majority of the votes cast. Where the law
requires a majority in capital for a shareholder resolution, a simple
majority of the capital represented at the General Meeting is sufficient,
provided this is in line with legal requirements. The Supervisory Board
may alter the wording of the Statutes (§ 179 (1) AktG and § 10 of the
Statutes).
Authorization of the Board of Management to issue
and repurchase shares
The Board of Management is authorized to issue shares as well as to
acquire and use treasury shares as follows:
It may increase the company's share capital on or before 3 May 2027,
with the approval of the Supervisory Board, by issuing new registered
no-par value shares against contributions in cash and/or in kind, on
one or more occasions:
Up to a total of € 467,968,000 (Authorized Capital 2022/1): In case
of a capital increase against cash contribution, the Board of
Management may exclude the shareholders' subscription rights
for these shares with the consent of the Supervisory Board (i) for
fractional amounts, (ii) in order to safeguard the rights pertaining
to holders of convertible bonds or bonds with warrants, including
mandatory convertible bonds, and (iii) in the event of a capital
increase of up to 10%, if the issue price of the new shares is not
significantly below the stock market price. The Board of
Management may furthermore exclude the shareholders'
subscription rights with the consent of the Supervisory Board in the
event of a capital increase against contributions in kind.
Up to a total of € 15,000,000 (Authorized Capital 2022/11): The
shareholders' subscription rights are excluded. New shares may
only be issued to employees of Allianz SE and its Group
companies.
The company's share capital is conditionally increased by up to
€ 116,992,000 (Conditional Capital 2022). This conditional capital
increase will only be carried out to the extent that the holders of
convertible bonds, bonds with warrants, convertible participation
rights, participation rights, and subordinated financial instruments
issued against cash by Allianz SE or its subsidiaries, based on the
authorizations granted by the General Meeting on 4 May 2022,
exercise their conversion or option rights, or to the extent that
conversion obligations from such bonds are fulfilled, and to such
extent that treasury shares or shares from authorized capital are not
used for such purpose.
22
22
Annual Report 2023 - Allianz Group
B_Corporate Governance
Essential agreements of Allianz SE with change-of-
control clauses and compensation agreements
providing for takeover scenarios
The following essential agreements of the company are subject to a
change-of-control condition following a takeover bid:
Our reinsurance contracts, in principle, include a clause under
which both parties to the contract have an extraordinary
termination right if and when the counterparty merges with
another entity or its ownership or control situation changes
materially. Agreements with brokers regarding services connected
with the purchase of reinsurance cover also provide for
termination rights in case of a change of control. Such clauses are
standard market practice.
Allianz SE is also party to various bancassurance distribution
agreements for insurance products in various regions. These
distribution agreements normally include a clause under which the
parties have an extraordinary termination right in the event of a
change of control of the other party's ultimate holding company.
Shareholder agreements and joint ventures to which Allianz SE is
a party often contain change-of-control clauses that provide, as
the case may be, for the termination of the agreement, or for put
or call rights that one party can exercise with regard to the joint
venture or the target company, if there is a change of control of
the other party.
Overall, this results in a target achievement rate for the Group's
financial targets of 103.85%.
150%
Under an authorization by the General Meeting on 4 May 2022,
the Board of Management may, until 3 May 2025, buy back Allianz
shares corresponding to up to 10% of the lower of (i) the share capital
at the moment of the shareholder resolution and (ii) the share capital
at the moment of the buy-back, and to use those shares for other
purposes (§71 (1) No. 8 AktG). Together with other treasury shares that
are held by Allianz SE, or which are attributable to it under §§ 71a et
seq. AktG, such shares may not exceed 10% of the share capital at any
time. The shares acquired pursuant to this authorization may be used,
under exclusion of the shareholders' subscription rights, for any legally
admissible purposes, in particular those specified in the authorization.
Furthermore, the acquisition of treasury shares under this
authorization may also be carried out using derivatives, provided such
derivatives do not relate to more than 5% of the share capital.
100%
Potential application of malus and clawback
In the financial year, there was no reason to reduce the payment of
variable remuneration (malus) or to reclaim variable remuneration
already paid out (clawback).
Approval of remuneration system and
Remuneration Report
The system for the remuneration of members of the Board of
Management was approved by the Annual General Meeting on
5 May 2021 with a majority vote of 87.14%. The remuneration system
applies to all members of the Board of Management who were in
office in the 2023 financial year.
The Remuneration Report for 2022 was approved at the Annual
General Meeting on 4 May 2023 with a majority vote of 82.94%.
Overall, the remuneration system and the Remuneration Report
are strongly supported by investors and proxy advisors. In discussions
with the Supervisory Board, it is emphasized, among other things,
that the transparency provided with regard to Board of Management
remuneration exceeds the best practice standard in Germany in many
respects and that the Supervisory Board exercises its discretionary
powers, as granted to them to the usual extent, very responsibly.
Changes to the composition of the Board of
Management
Giulio Terzariol was released from his mandate as a member of the
Board of Management on 31 December 2023 so that he can pursue
a career opportunity outside the company in his home country.
Claire-Marie Coste-Lepoutre took over from Giulio Terzariol on
1 January 2024 and has been working with Mr. Terzariol on a
seamless handover of his responsibilities.
25
25
Annual Report 2023 - Allianz Group
B_Corporate Governance
The structure, weighting, and level of each remuneration
component should be adequate and appropriate.
Key principles of Board remuneration
Remuneration is designed to be appropriate compared to peer
companies, given the Allianz Group's range of business activities,
operating environment, and business results achieved. The aim is to
ensure and promote sustainable and value-oriented management of
the company that is in line with our corporate strategy. The key
principles are as follows:
Support of the Group's strategy: The design of variable
compensation, and in particular of performance targets, reflects
the business strategy and sustainable long-term development of
the Allianz Group.
Alignment of pay and performance: The performance-based
variable component of the remuneration of members of the Board
of Management forms a significant portion of the overall
remuneration, corresponding to 70% of the target compensation.
Sustainability of performance and alignment with shareholder
interests: A major part of the variable remuneration reflects
longer-term performance, with deferred payout (64%), and is
linked to the absolute and relative performance of the Allianz
share price.
Determination of the remuneration system
The Board of Management's remuneration is decided upon by the
entire Supervisory Board, based on proposals prepared by the
Supervisory Board's Personnel Committee. If required, the Supervisory
Board may seek outside advice from independent external
consultants. The Personnel Committee and the Supervisory Board
consult with the Chairperson of the Board of Management in
assessing the performance and remuneration of Board of
Management members. The Chairperson of the Board of
Management is generally not involved in discussion about their own
remuneration. The Supervisory Board designs the remuneration system
for the members of the Board of Management in accordance with the
requirements of the AktG in its currently valid version, as well as with
regulatory requirements and the recommendations of the German
Corporate Governance Code.
Clarity and comprehensibility are ensured at all times. Feedback
from investors is also considered.
Determination and adequacy of Board of
Management remuneration
Net income attributable to shareholders
Based on the remuneration system, the Supervisory Board determines
the target total compensation and regularly reviews the
appropriateness of the remuneration. This is based on both a
horizontal comparison (i.e., with peer companies) and a vertical
comparison (in relation to Allianz employees). Again, the Supervisory
Board's Personnel Committee develops respective recommendations,
if necessary with the assistance of external consultants.
Due to the very good overall team performance of the Board of
Management in all cross-divisional matters, for the first time the
Supervisory Board unanimously decided to refrain from
differentiating the individual contribution factor for the annual bonus
for the 2023 financial year and to set a common factor of 1.15 for the
regular Board members and to assess Mr. Bäte's performance in
leading the Board of Management team with a factor of 1.17.
Individual performance by the individual members of the Board of
Management is described in detail below.
As a result, the Board of Management achieved a record result
in terms of operating profit and net income, despite a massive
adverse impact resulting from natural disasters, high inflation, and
rapidly rising interest rates. This strong overall performance was
achieved on a sustainable basis: Customer satisfaction at Allianz
once again reached top scores. The proportion of local business
segments considered as market leaders in terms of customer
satisfaction as measured by the digital Net Promoter Score (dNPS),
for example, grew to 59%. Employee testimonials were also very
positive. The Inclusive Meritocracy Index and Work Well Index Plus,
which are used to measure employee satisfaction, rose to new record
levels of 81% and 76%, respectively, bucking a negative trend in the
industry. In addition, the Board of Management also met its
ambitious environmental targets. Examples include CO2 emissions
per employee, which were reduced by 62% versus the baseline year
2019 and were thus further reduced compared to the previous year
(-57%) despite a normalization of travel behavior after the end of the
COVID-19 pandemic.
Remuneration of the Allianz SE Board
of Management
Board of Management performance in 2023
Actual value
2023
In the financial year under review, the Board of Management faced
unprecedented challenges requiring a team effort. In addition to the
geopolitical and macroeconomic challenges, the Board of
Management had to meet supervisory requirements and adopt
decisions to implement the digital future. These topics had to be
jointly addressed by the entire Board of Management across the
divisional areas of responsibility. The members of the Board of
Management also successfully handled the additional tasks arising
from the streamlining effected in the financial year under review. This
applies in particular to the business activities in Spain, Portugal and
Latin America, Allianz X, and the implementation of IT verticalization
and business model transformation.
€14.75
bn
Actual value
2023
0%
0%
100%
€ 14.2 bn
€ 17.75 bn
Floor
100% target
Cap
€ 7.1 bn
€ 8.54
bn
€ 7.9 - 8.9 bn
€ 11 bn
100% target
Cap
24
24
€ 3.7 bn
Floor
Annual Report 2023 - Allianz Group
B_Corporate Governance
117.99
119.43
854
1,280
1,020
1,536
2022
1,835
Appointed: 01/2021
105.35
1.12
813
2,304
1.15
1.12
2023
2,304
1,536
1,835
Appointed: 1/2022
2022
105.35
103.85
117.99
1,220
959
1,463
2,195
1,726
Dr. Barbara Karuth-Zelle
813
1,220
1,463
1,463
1,280
1,020
854
119.43
1.15
103.85
2023
Giulio Terzariol
1,757
2,195
976
1,220
813
120.10
1.14
105.35
2022
2,195
1,726
Dr. Klaus-Peter Röhler
2023
103.85
1.15
959
119.43
1,280
1,020
1,536
2,304
1,835
Appointed: 04/2020
854
1,280
LTI allocation¹
119.43
Payout
Max
Min
Target
Target
achievement
factor
ICF
0.8-1.2
1.17
103.85
2023
Oliver Bäte
%
Active Board members in 2023
Group
financial
performance
Board member
Annual bonus
Target achievement
Target achievement and variable remuneration of the members of the Board of Management for the financial year
The following table shows the amounts for annual payout and LTI-
allocation resulting from the target achievement of the financial year,
as well as the target, minimum, and maximum amount of the variable
compensation components.
1,020
Sirma Boshnakova successfully drove the growth of the platform
business ahead in the completed financial year: Apart from the
continued strong development of Allianz Partners, Ms. Boshnakova
successfully launched the Solvd claims service platform in several
markets. The Allianz Direct direct insurance company also reported
robust growth and was migrated to a new IT infrastructure. In addition,
the conclusion of a partnership in the bancassurance channel in the
Netherlands forms an important basis for further growth. Alongside
the continued scaling of Solvd, the Supervisory Board expects Ms.
Boshnakova's area of responsibility to deliver further improvement in
profitability in 2024.
Barbara Karuth-Zelle delivered significant progress in major
technology projects, in particular the realignment of the Business
Master Platform. She also achieved considerable enhancements of
the stability of infrastructure services and user satisfaction with
workplace services. Ms. Karuth-Zelle was also responsible for the
implementation of important productivity and digitalization initiatives.
In addition, Ms. Karuth-Zelle consistently improved the company's IT
security and reinforced Group IT Governance by driving ambitious
transformation projects forward. Also, the economic management of
the IT budget progressed in the completed financial year. For 2024, the
Supervisory Board expects to see continued steady improvements,
particularly with regard to the speed of implementation and
profitability of the IT portfolio, as well as significant and visible
productivity gains at Allianz Technology.
Klaus-Peter Röhler delivered further productivity gains in the
portfolio he manages by and drove important transformation projects
forward within the Allianz Group. The significant improvement in
customer satisfaction, for example in life insurance in Germany and
Switzerland, is particularly noteworthy. Employee satisfaction also
continued to improve year-on-year in almost all subsidiaries in Mr.
Röhler's portfolio. The achievement of financial targets in Mr. Röhler's
portfolio was adversely affected by losses from natural disasters,
particularly in Germany. For 2024, the Supervisory Board expects to
see further efficiency gains through IT investments and the consistent
further development of pricing and claims models in property
insurance, particularly with regard to the mapping of natural events
resulting from climate change.
As CFO, Giulio Terzariol once again contributed significantly to
the company's very solid position in all key financial indicators. Despite
an extremely challenging economic environment, he further
strengthened the solvency ratio, achieved the confirmation of or even
improvements in key credit ratings, and safeguarded Group liquidity.
He was also instrumental in ensuring that the high inflation rate only
had a moderate impact on the combined ratio in property insurance
and the Group result. Mr. Terzariol also successfully implemented the
integration of the control functions and strengthened Group
Governance in the long term. After a career spanning 25 years at
Allianz with assignments in various places including the U.S., Asia and
at the Munich head office, Mr. Terzariol left the company at the end of
the year at his own request. The Supervisory Board thanks Mr. Terzariol
for his outstanding contributions to the sustainable success of Allianz
and wishes him all the best for the future.
Günther Thallinger once again achieved a solid investment result
in a challenging capital market environment characterized by extreme
interest rate increases in many economies. Moreover, Mr. Thallinger's
consistent reallocation of the investment portfolio helped secure the
company's strong positioning, even with regard to a potential
continued increase in capital market volatility, as well as Group
liquidity. Allianz's leading position in the area of sustainability was
further expanded, in particular due to Mr. Thallinger's strong personal
commitment in formulating and implementing the new, ambitious
Net-Zero Plan. For 2024, the Supervisory Board expects to see a
Target
consistent adjustment of the investment portfolio to the changing
economic framework, taking account of capital market requirements,
as well as further profitable growth in the health insurance business.
Renate Wagner quickly adjusted to her new responsibility for the
Asia-Pacific business in the completed financial year and achieved
robust growth and solid profitability despite continued challenges in
Australia. Moreover, Ms. Wagner's efforts relating to the workforce and
culture at Allianz again delivered very good results. Examples include
employee satisfaction, which reached a record level and the top score
among Allianz's competitors in the completed financial year. Allianz
once again won several awards to honor its success in the area of
Diversity & Inclusion. For 2024, the Supervisory Board expects further
profitable growth in Asia and improved results in Australia.
Furthermore, strategic HR planning will remain a top priority in times
of shortages of skilled labor.
Andreas Wimmer safeguarded the resilience of the Asset
Management business segment and U.S. Life Insurance in a very
challenging capital market environment. In Asset Management, he
cushioned adverse market effects through disciplined cost
management and achieved robust new business despite strong
volatility. In addition to very good growth in U.S. Life Insurance, he also
successfully drove an ambitious IT transformation forward. For 2024,
the Supervisory Board expects to see the expansion of business with
alternative asset classes for third-party customers and the consistent
continuation of the integration of the Life Insurance and Asset
Management business segments in order to strengthen the resulting
business opportunities and the capital efficiency of the Allianz Group.
36
Annual Report 2023 - Allianz Group
B_Corporate Governance
Overview target achievement and variable
remuneration for the financial year
Christopher Townsend again achieved strong results in the
Commercial Lines business in the 2023 financial year, driven by a very
gratifying performance delivered by both Allianz Commercial and
Allianz Trade. The entities in Spain, Portugal and Latin America, newly
allocated to his area of responsibility, also delivered notably improved
results. In addition, Mr. Townsend continued to drive the development
of the global Commercial Lines business forward. For 2024, the
Supervisory Board expects to see sustained improvements in the
results of Allianz UK and the realization of the financial targets and
visible productivity gains from the globalization of the Commercial
Lines business.
854
Min
Allocation
1.15
103.85
2023
Sirma Boshnakova
3,504
4,301
2,867
1,947
2,390
1,593
122.21
1.16
105.35
2022
CEO since 05/2015
Appointed: 01/2008
€ thou
3,658
%
€ thou
€ thou
€ thou
€ thou
€ thou
Max
€ thou
121.50
1,673
2,510
2,033
3,011
4,516
€ thou
1,536
The following tables show the individual remuneration of those
members of the Board of Management who were active in the
reporting year.
Appointed: 01/2018
As CEO, Oliver Bäte and his Board of Management team once again
led the company to a record profit. In addition to the very good
financial performance, his strong personal commitment also helped
the company to again achieve top scores for brand value as well as
customer and employee satisfaction, forming an excellent basis for the
continued successful development of Allianz. With regard to the
Capital Markets Day to be held in December 2024, the Supervisory
Board expects to see the formulation and implementation of the
updated corporate strategy in the new financial year. Moreover, the
initiatives launched to deliver further productivity gains in the core
business and accelerate profitable customer growth are expected to
be consistently pursued.
Individual remuneration of members of the Board
of Management
B_Corporate Governance
Annual Report 2023 - Allianz Group
37
1_Derived by multiplying the LTI target amount by the target achievement factor.
1,726
2,195
1,463
959
1,220
813
117.99
1.12
105.35
2022
Appointed: 10/2021
1,463
2,195
1,757
Dr. Andreas Wimmer
2023
103.85
The table "Remuneration in the financial year" features the
remuneration awarded and due in accordance with § 162 (1)
sentence 1 AktG. It includes the payments made in the financial year
for base salary, perquisites, and other remuneration. For the variable
remuneration, the components for performance fully rendered in the
financial year are reported. This requirement is met where the
applicable performance criteria are fulfilled and conditions
subsequent and suspensive have been met or have ceased to exist. For
the 2023 financial year, this is the annual bonus that refers to the 2023
performance period and is paid out in March 2024. For the share-
based renumeration, the payout of the Allianz Equity Incentive (AEI)
1.15
854
1,280
1,020
1,536
2,304
1,835
119.43
976
RSU allocated in 2019 for the 2018 financial year, which vested in the
2023 financial year, is reported.
The amounts for the annual bonus and LTI allocation reported
here result from the achievement of the targets for the financial year.
The information therefore directly depicts the correlation between
remuneration and business development.
Annual Report 2023 - Allianz Group
2028
Payout LTI/RSU 2023/2024
March 2028:
Payment of annual bonus 2024:
Allocation LTI/RSU 2023/2024
March 2024
2024
2027
2026
2025
and Payout in 2023
End of performance period
AEI 2019 RSU
2023
(payout)
pursuant to
Section 162 AktG
year
Furthermore, the remuneration for the financial year is decisive for
reviewing the retention of the general payout cap of € 11,750 thou for
the Chairperson of the Board of Management and € 6,000 thou for a
regular member. It is reviewed prior to the payout in 2028 of the LTI
tranches allocated for the 2023 financial year, and reported in the
Remuneration Report for the respective financial year.
Furthermore, the pension expenses in the financial year are listed
in both tables, even if these expenses are not regarded as
remuneration awarded and due in accordance with § 162 AktG. Finally,
in addition to the absolute amounts, the share of the individual
remuneration components relative to the total remuneration is stated.
For the sake of clarity, the information provided for by the Stock
Corporation Act on remuneration awarded and due to former
members of the Board of Management is shown in a separate table.
The following diagram presents the allocation of the
remuneration components in the two tables, using the financial year
2023 as an example:
38
LTI/RSU 2023/2024
The additional table "Remuneration for the financial year" goes
above and beyond the requirements of § 162 AktG. It includes the
contributions to base salary and perquisites made in the respective
financial year, as well as the annual bonus for the respective financial
year and the allocation amount of the share-based remuneration for
the financial year.
Fixed remuneration +
annual bonus 2023
Four-year performance of the Allianz share:
• Absolute share price performance
•
Relative to the STOXX Europe 600 Index
Remuneration in
the financial
Remuneration for the
financial year
(actual grant)
1,220
813
120.10
968
1,220
813
119.05
1.13
105.35
2022
Appointed: 01/2020
Appointed: 01/2017
Christopher Townsend
Appointed: 01/2021
Renate Wagner
1,835
2,304
1,536
1,020
1,280
854
119.43
1.15
End of service: 12/2023
2022
105.35
1.13
119.05
813
1,463
1,220
1,463
2,195
1,742
Dr. Günther Thallinger
2023
103.85
968
2,195
1,742
2023
1,742
2023
103.85
1.15
119.43
854
2,195
1,280
1,536
2,304
1,835
2022
105.35
1.14
1,020
2,304
1,463
1,220
103.85
1.15
119.43
854
1,280
1,020
968
1,536
1,835
2022
105.35
1.13
119.05
813
2,304
B_Corporate Governance
March 2024:
1.15
50
1,536
1,383
8,133
1,651
825
Application of the remuneration
system in the financial year
Variable remuneration for the financial year
Group financial targets and target achievement
The degree of target achievement for the Group's financial targets is
calculated as the simple average of the target achievement of the
operating profit for the year and the net income attributable to
shareholders for the year. The operating profit target of € 14.20 bn was
exceeded to € 14.75 bn as the Property-Casualty, Life/Health,
Group financial target achievement 2022 und 2023
Group financial target achievement
Financial year
Bonus curve
0% - Floor in € bn
100% Target in € bn
150% Max in € bn
Target achievement
Achievement level in € bn¹
6.70
2023
2022
2023
Achievement level combined in %
Net income attributable to shareholders
2022
90
2023
Overall, this results in a target achievement rate for the Group's
financial targets of 103.85 %.
downward fluctuation range of € 500 mn. Net income attributable to
shareholders amounted to € 8.54 bn in the past financial year and was
therefore within the target range of € 7.9 - 8.9 bn, resulting in a target
achievement of 100.00 %.
The transition to IFRS 9 means a significant increase in the share
of assets measured at fair value through profit or loss on the balance
sheet in the Property-Casualty business segment and thus significantly
higher volatility of the net income in combination with fewer steering
options. For the 2023 financial year, the bonus curve was adjusted in
order to address fluctuations in the net income that the Board of
Management cannot control in either direction. For this purpose, 100%
target achievement was defined as a plateau with an upward or
Corporate and Other business segments achieved growth in operating
profit and more than compensated for the slight decline in the Asset
Management business segment. This resulted in a target achievement
of 107.69% for the operating profit.
Weight in %
Achievement level in %
Operating profit
2022
7.10
90
Number of RSUs
Illustrative examples:
LTI payout: performance exceeds expectation (scenario 1)
Illustrative example for a regular Board member
LTI initial grant based on:
⚫LTI target
⚫LTI allocation amount: annual bonus achievement factor applied to LTI target
%
Number of RSUs
€ thou
1,536
110
1,690
⚫RSU grant (listed share price: € 220, share price relevant to the calculation of the allocation: € 170 (= reduced by the net present value of estimated future dividends of € 50))
LTI payout at vesting based on:
9,940
⚫RSUs x share price at vesting (€ 269)
2,674
⚫TSR relative performance factor: 2 x (TSR Allianz: 45 % - TSR STOXX Europe 600 Insurance: 40%) + 100%
%
⚫TSR relative performance factor: 2 x (TSR Allianz: 15 % - TSR STOXX Europe 600 Insurance: 40 %) + 100 %
Payout
⚫RSUs x share price at vesting (€ 203)
⚫RSU grant (listed share price: € 220, share price relevant to the calculation of the allocation: € 170 (= reduced by the net present value of estimated future dividends of € 50))
LTI payout at vesting based on:
⚫LTI allocation amount: annual bonus achievement factor applied to LTI target
⚫LTI target
€ thou
LTI initial grant based on:
LTI payout: performance remains below expectation (scenario 2)
B_Corporate Governance
Annual Report 2023 - Allianz Group
2,941
Payout
110
Illustrative example for regular Board member
Outstanding RSU holdings are forfeited should a Board member leave
at their own request or be terminated for important cause.
3.60
13.40
29
Annual Report 2023 - Allianz Group
B_Corporate Governance
Variable remuneration system
Target achievement factor to determine the
variable remuneration
In line with the overarching strategic objective "simplicity wins", the
calculation of variable remuneration follows a simple system. The
annual bonus and LTI allocation are based on only two Group financial
targets for the relevant financial year: operating profit and net income
attributable to shareholders, each at 50%. The resulting target
achievement is adjusted by an individual contribution factor (ICF) in
the range of 0.8 to 1.2, which reflects both the results of the business
division and the performance of the individual Board member. If
targets are not met, the variable compensation can be reduced to
zero. If targets are significantly exceeded, the target achievement is
limited to 150%.
.
Target achievement factor
(maximum 150%)
to determine:
annual bonus and
•
LTI grant value
Group financial targets
Operating profit
(50%)
+
Net income attributable
to shareholders
(50%)
8.54
100.00
50.00
14.16
111.40
50.00
14.75
107.69
50.00
The respective Board member will only retain the full
remuneration for that position if the Allianz SE Supervisory Board
classifies the appointment as a personal one (ad personam). Any
remuneration paid by external organizations will be itemized in those
organizations' annual reports; the level of remuneration will be
determined by the governing body of the relevant organization.
7.17
The Group's financial target achievement is limited to a maximum
of 150% and can drop to zero.
Net income attributable to shareholders is the profit after tax and
non-controlling interests (minorities). Furthermore, the net income
forms the basis for the dividend payout, as well as for calculating the
return on equity. Both key performance indicators (KPIs) are important
steering parameters for the Allianz Group and therefore reflect the
level of implementation of the Group's strategy.
Operating profit highlights the underlying performance of
ongoing core operations.
The Group financial targets are based on equally weighted targets for
Group operating profit and Group net income attributable to
shareholders. Adjustments are only applied to acquisitions and
disposals that account for more than 10% of the Group's operating
profit or net income attributable to shareholders, or that have a value-
adding effect from a risk management perspective (e.g., portfolio
transfers) and were not yet known at the time the plan was prepared.
This regulation is intended to prevent meaningful transactions from
having a negative impact on the remuneration of the Board of
Management.
Group financial targets
✓
99.29
3.70
In recognition of related benefits to the organization, and subject
to prior approval by the Supervisory Board of Allianz SE, Board
members are also allowed to accept a limited number of non-
executive supervisory roles at appropriate external organizations. In
these cases, 50% of the remuneration received is paid to Allianz SE.
Internal and external Board appointments
14.20
7.20
7.9-8.9
16.75
17.75
9.00
11.00
105.35
103.85
The minimum, target, and maximum values for the Group
financial targets are set annually by the Supervisory Board. These
targets are documented for the respective next financial year and
published ex-post in the Remuneration Report.
B_Corporate Governance
Thus, the actual payout for the underlying financial year
comprising the base salary, variable remuneration and pension service
cost will be capped at maximum of €11,750 thou for the
Chairperson of the Board of Management, and at € 6,000 thou for a
regular member of the Board of Management. If the remuneration for
the financial year exceeds this amount, compliance with the maximum
limit will be ensured by reducing the payout of the long-term variable
remuneration accordingly.
This payout cap principle was introduced for the first time for the
2019 financial year. Given that the actual amount of the long-term
variable remuneration paid out cannot be determined until after
vesting and the final sustainability assessment, compliance with the
payout cap will be reported on for the first time in the Remuneration
Report for the 2024 financial year.
Deviation from the remuneration system
The Supervisory Board can temporarily deviate from the remuneration
system in exceptional circumstances in accordance with the statutory
requirements (§87a (2) AktG), if this is necessary in the interests of the
long-term welfare of the company. The assessment may take into
account both macroeconomic and company-related exceptional
circumstances, such as impairment of the long-term viability and
profitability of the company. The deviation requires a prior proposal by
the Personnel Committee.
Particular components of the remuneration system from which
deviations may be made in exceptional cases include the base salary,
the annual bonus and the LTI, including their relationship to each other,
their respective assessment bases where applicable, the target setting
and target achievement assessment principles, and the determination
of any payout and payment dates. The duration of the deviation shall
be determined by the Supervisory Board at its due discretion, but
should not exceed a period of four years. In a crisis situation, for
example, this principle is intended to allow the appointment of a new
Board member with skills such as crisis management expertise, with a
remuneration structure that temporarily deviates from the
remuneration structure.
In the 2023 financial year, the Supervisory Board did not make use
of the option to deviate from the remuneration system.
Miscellaneous
Board members appointed before 1 January 2010 are eligible for a
transition payment after leaving the Board of Management. The
transition payment comprises an amount corresponding to the most
recent base salary (paid for a period of six months), plus a one-time
payment of 25% of the target variable remuneration at notice date.
Where an Allianz pension is due at the same time, this pension is
deducted from the monthly transition payments. In the event of a
contractually agreed non-compete clause, the remittance of the
transitional payment will be offset against the payment resulting from
the non-compete clause.
Transition payment
In the event of a contractually agreed non-compete clause, a
severance payment is offset against compensation resulting from the
non-compete clause in the event of premature termination of service.
contain provisions for any other cases of early termination of Board of
Management service.
Payments for early termination to Board members with a remaining
term of contract of more than two years are capped at twice the
annual compensation, consisting of the last financial year's base
salary and 100% of the variable target compensation. If the remaining
term of contract is less than two years, the payment is made on a pro-
rata basis for the remaining term of the contract. Contracts do not
When a member of the Board of Management simultaneously holds
an appointment at another company within the Allianz Group or their
joint ventures with outside partners, the full amount of the respective
remuneration is transferred to Allianz SE.
Severance payment cap
Termination of service
Rather than being automatic, adjustment requires a justified
decision by the Supervisory Board on a case-by-case basis. Such a
moderate adjustment of the target remuneration does not in itself
represent a significant change to the remuneration system. These
adjustments or deviations must be justified in detail in the respective
Remuneration Report for the financial year.
The Supervisory Board may also adjust the target remuneration
of members of the Board of Management, insofar as this is
appropriate to ensure that the remuneration of the Chairperson of the
Board of Management or a regular member of the Board of
Management is appropriate with regard to their duties and
performance. In doing so, it shall take into account the horizontal and
vertical comparison of the Board of Management remuneration. The
aim of this rule is to moderately adjust Board of Management
remuneration on the basis of horizontal and vertical salary trends, and
thus to avoid major salary increases.
Conceivable cases of application include, for example, significant
changes in accounting rules, or in the tax or regulatory framework, as
well as catastrophic events not yet known at the time of target setting.
The application of this rule may also lead to a reduction in the variable
remuneration.
The Supervisory Board is also entitled to take appropriate account of
extraordinary unforeseeable developments when determining the
amount of the variable remuneration components. This rule takes up
a recommendation of the German Corporate Governance Code and
allows for the adjustment of the remuneration in rare unforeseeable
exceptional cases.
Remuneration adjustment
Board of Management contracts are limited to a period of five years.
For new appointments, a shorter period of up to three years is provided
based on the recommendation by the German Corporate Governance
Code.
Annual Report 2023 - Allianz Group
Allianz share performance, payout, and cap: Following the end of
the four-year contractual vesting period, the granted RSUs are
settled in cash, based on the ten-day average Xetra closing price
of the Allianz SE share following the annual financial media
conference in the year the respective RSU plan vests, multiplied by
the relative TSR performance factor, and adjusted by the
sustainability assessment, if necessary. The relevant share price is
capped at 200% of the grant price. Likewise, the relative TSR
performance factor is capped at a maximum of 200%. Taking into
account the overall compensation cap (€ 6,000 thou for a regular
Board member and € 11,750 thou for the Chairperson of the
Board of Management), the LTI payout in relation to the LTI target
- which deviates from the individual LTI component caps - is
limited to 272%.
KPls contained in the individual Board members' targets, such
as dNPS, employee satisfaction, and climate targets.
Dr. Klaus-Peter Röhler
Dr. Barbara Karuth-Zelle
Sirma Boshnakova
Oliver Bäte
Board members
Individual performance indicators
In order to calculate the annual bonus, the target achievement level of
the Group's financial targets is multiplied by the individual contribution
factor (ICF). The Supervisory Board determines the ICF for each Board
member in line with their achievement of the targets defined in the
individual agreement on the individual performance indicators.
Individual performance indicators and application
of the individual contribution factor
B_Corporate Governance
35
5
Annual Report 2023 - Allianz Group
34
1 The 2022 operating profit and net income attributable to shareholders shown in this table (and also in the following tables within the Remuneration Report) are as published in the Annual Report 2022 and have not been adjusted to reflect the application of the new accounting standards IFRS 9
(Financial Instruments) and IFRS 17 (Insurance Contracts), which have been adopted as of 1 January 2023.
50.00
Individual contribution factor
0.8-1.2
•
⚫ Individual strategic objective: set at the beginning of the respective performance year and linked to a corresponding performance indicator.
Individual contribution factor (ICF): 0.8 - 1.2
Annual bonus (short-term)
Environmental
Social
Governance
Productivity
Giulio Terzariol
Profitability
Non-financial
targets
حدا
Strategic priority
olo
B_Corporate Governance
Annual Report 2023 - Allianz Group
Performance
Divisional focus: business division operating profit and net income.
Dr. Günther Thallinger
Renate Wagner
1.15
1.15
1.15
1.15
1.15
1.15
1.15
1.17
factor (ICF)
Individual
contribution
• Cushioning adverse market effects in Asset Management through disciplined cost management and achievement of robust new business despite strong volatility.
• Very good growth in U.S. Life Insurance and successful pursuit of an ambitious IT transformation.
⚫ Top scores in terms of employee satisfaction and further progress in Diversity & Inclusion, externally recognized through the granting of numerous awards.
• Robust growth and solid profitability in the Asia-Pacific business despite continued challenges in Australia.
⚫ Further progress in developing the cross-border Commercial Lines platform.
• Improvements of results in the entities in Spain, Portugal, and Latin America.
• Strong results in the Commercial Lines business, driven by a very gratifying performance of Allianz Commercial and Allianz Trade.
⚫ Safeguarding Group liquidity through consistent reallocation of the investment portfolio, and positioning for a potentially sustained increase in capital market volatility.
• Strong commitment in formulating and implementing the new ambitious Net-Zero Plan, which contributes to the expansion of Allianz's leading position in sustainability.
Dr. Andreas Wimmer
Summary of individual performance in 2023
• Another record result in a challenging economic and geopolitical environment.
⚫ Top results in terms of brand value and customer and employee satisfaction as the basis for future success.
• Very good growth of the platform businesses Allianz Partners, Allianz Direct and the Solvd claims platform.
• Foundation laid for further growth, e.g., through the successful conclusion of a bancassurance partnership in the Netherlands.
Christopher Townsend
⚫ Significant progress in large technology projects, in particular the realignment of the Business Master Platform.
⚫ Consistent improvement in the company's IT security and strengthening of Group IT Governance by way of driving ambitious transformation projects forward.
• Further productivity gains and pursuit of key transformation projects within the Allianz Group.
• Considerable improvements in customer and employee satisfaction.
• Financial target achievement was adversely impacted by claims arising from natural disasters, in particular in Germany.
• Further strengthening of the solvency ratio, confirmation of or improvement in key credit ratings, and safeguarding Group liquidity.
• Very good management of the inflationary environment as the basis for only moderate impacts on the combined ratio in property insurance and on Group results.
• Successful integration of control functions and sustained strengthening of Group Governance.
• Solid investment result in a capital market environment characterized by extreme interest rate hikes.
• Substantial improvements in the stability of infrastructure services and user satisfaction with workplace services.
The assessment is made by applying a comparable basis; i.e., any
regulatory changes, changes in accounting regulations, or
changes in calculation methods for the KPIs in question are taken
into account.
•
Divisional property-casualty cost ratio and asset management cost-income ratio.
n+4
n+5
March 2028:
Payout LTI/RSU 2023/2024
Determining the individual contribution factor (ICF)
The Supervisory Board determines the ICF for each member of the
Board of Management based on the fulfillment of the individual
performance indicators. Most of the performance indicators are
provided with quantitative criteria, and therefore offer a sufficiently
concrete basis for the combined assessment.
Each ICF category strategic priority, performance, and
sustainability - has a significant weighting, and all three categories are
of equal importance and make an equal contribution to the overall
assessment. However, the individual indicators are not weighted on a
fixed percentage basis, so that the ICF is not determined on the basis
of a formulaic calculation. This allows the Supervisory Board to take
appropriate consideration of the individual criteria and to react
appropriately to changes in priorities during the year. In particular,
significantly underperforming in one category should allow a low
overall rating without being balanced out by the other indicators.
Since performance is determined without a specified weighting,
the ICF covers a narrow range of 0.8 to 1.2.
Long-term incentive (LTI) design
The long-term, share-based compensation component makes up the
largest portion of variable compensation. It promotes alignment with
shareholders and reflects the sustainable implementation of the
company's long-term strategy. The LTI is based on the performance in
absolute and relative terms (i.e., versus competitors) of the Allianz
share. Furthermore, the long-term development of KPIs is reflected in
the deferred sustainability assessment following the four-year
contractual vesting period.
Grant and contractual vesting period: The LTI is granted annually
in the form of virtual Allianz shares, known as restricted stock units
(RSUs). The number of RSUs to be granted corresponds to the LTI
allocation amount, divided by the allocation value of an RSU at
grant:
The LTI allocation amount is calculated by multiplying the LTI
target amount by the annual bonus achievement factor, and
capped at a maximum of 150% of the target level.
The RSU allocation value is based on the ten-day-average
Xetra closing price of the Allianz stock following the annual
financial media conference ¹. As RSUs are virtual stock without
dividend payments, the relevant share price is reduced by the
net present value of the expected future dividend payments
during the four-year contractual vesting period.
The LTI grant is followed by a contractual vesting period of four years.
After that period, the LTI amount to be paid is determined based on
the relative performance of the Allianz share, the relevant share price,
and the results of the sustainability assessment.
Relative performance versus peers: Besides the absolute share-
price development, the LTI payout takes the relative performance
of the Allianz share into account. The total shareholder return
(TSR) of the Allianz share is benchmarked against the TSR of the
STOXX Europe 600 insurance index by reflecting the relation of
the total performance of the Allianz share ("Allianz TSR") and the
total performance of the STOXX Europe 600 insurance index
("Index TSR") between the start and end of the four-year
1_For accounting purposes, the determination of the fair value of RSUs is based on an option pricing model,
taking into account additional input parameters, including the term structure of interest rates and the
expected relative performance of the Allianz share price compared to the peer index. For the latter,
32
simulation techniques are applied at the valuation date to determine the volatility of the Allianz stock,
the volatility of the peer index, their correlation, and the expected dividends. The value of the RSUs used
balance sheet issues, such as reserve strength, solvency,
indebtedness, and ratings,
compliance breaches,
The sustainability assessment covers:
Sustainability assessment: Prior to the payout of each LTI tranche,
the Personnel Committee makes a preliminary assessment before
the Supervisory Board determines, whether there are any
sustainability-related concerns regarding a full payout. If any
concerns are identified, payment of the tranche may be cancelled
in full or in part.
In order to avoid incentivizing excessive risk-taking, the relative TSR
performance factor is limited: it can vary between zero (for
underperformance of the index by -50 percentage points or lower)
and 200% (for outperformance of the index by minimum
+50 percentage points or higher).
To determine the factor, 100 percentage points are added to
the result. Example: 1 percentage point outperformance
results in a relative performance factor of 102%; 1 percentage
point underperformance results in a relative performance
factor of 98%.
n+3
At the end of the contractual vesting period, the difference
between the Allianz TSR and the Index TSR is determined in
percentage points; the result is multiplied by "2" because the
comparison with competitors and the market is critically
important, so the outperformance/underperformance is given
a twofold weighting.
contractual vesting period. The payout is based on the TSR
performance factor, which is calculated as follows:
B_Corporate Governance
33
33
Annual Report 2023 - Allianz Group
for the board members' compensation may deviate from this IFRS value, as a simplified calculation
method was applied to increase transparency and traceability.
-
Functional focus: special quantitative targets if applicable.
Sustainability check (100% to 0%)
Allocation LTI/RSU 2023/2024
⋅
Sustainability as measured by the greenhouse gas reduction of Allianz companies and by the development of a roadmap to reduce CO2 emissions in the context of
capital allocation.
•
Customer satisfaction: development of digital Net Promoter Score.
.
Employee engagement: development of the Allianz Engagement Survey including Inclusive Meritocracy Index, Work Well Index Plus.
Leadership contribution with particular focus on customer & market excellence, collaborative leadership, entrepreneurship and trust.
+
Impact on
LTI allocation (long-term)
+
LTI sustainability check (long-term)
Individual performance indicators
The Group financial target achievement is multiplied by the ICF for
each member of the Board of Management. The ICF is based on an
assessment by the Allianz SE Supervisory Board of performance,
sustainability and strategic goals, based on KPIs reflecting the
respective Board member's area of responsibility and their personal
contribution.
Strategic priority: An individual strategic priority will be set for
every Board member at the beginning of each performance year,
linked to a corresponding KPI and qualitatively assessed by the
Supervisory Board. In addition, overarching strategic goals that
apply to all Board members are set.
Performance (business division targets): For Board members with
business-related division responsibilities, the contribution to the
financial performance is based on various indicators of
profitability (e.g., operating profit and net income) and
productivity (e.g., expense ratio) for the respective business
division. For Board members with a functional focus, division-
specific performance targets are determined based on their key
responsibilities, and are qualitatively assessed.
Sustainability targets: Non-financial sustainability targets take
into account customer satisfaction (e.g., digital Net Promoter
Score (dNPS), employee engagement (e.g., Allianz Engagement
Survey), and leadership quality. The assessment of the individual
leadership quality also includes a review of behavioral aspects,
such as customer orientation, collaborative leadership,
entrepreneurship, and trust (e.g., corporate social responsibility,
integrity, diversity, and sustainability as measured by the
greenhouse gas reduction of Allianz companies and by the
development of a roadmap to reduce CO2 emissions in the context
of capital allocation).
n+1
Performance Year (n)
Current share price March n+5, adjusted by the relative performance
and the sustainability check
Payout:
4-year Allianz relative performance vs.
STOXX Europe 600 Insurance Index
(factor, with maximum 200% at payout)
Grant of virtual shares, so-called Restricted Stock Units
n+2
Allianz share price development
(factor, with maximum 200% at payout)
LTI key features
4-year
B_Corporate Governance
Annual Report 2023 - Allianz Group
31
Additional information, in particular regarding the annual
sustainability targets for the Allianz SE Board of Management can be
found in the Non-Financial Statement for the Allianz Group and
Allianz SE.
LTI allocation value = LTI target multiplied by the annual bonus target achievement factor (maximum 150%)
30
48
1,024
32
2,007
2023
€ thou
in % of TC
€ thou
in % of TC
€ thou
in % of TC
€ thou
Total
35
Pension
service
cost
§ 162 AktG
Other compensation
Share-based
compensation
Annual bonus
Perquisites
Base salary
Appointed: 01/2008
Board members active in financial year
Oliver Bäte
Board members
Total
Variable long-term
compen-
sation acc.
Variable short-term
1
32
2023
Sirma Boshnakova
6,782
1,122
5,660
32
1,786
34
1,947
15
34
2,033
1,911
CEO since 05/2015
7,466
1,109
6,357
€ thou
€ thou
€ thou
in % of TC
€ thou
in % of TC
36
2,283
2022
1,024
Fixed compensation
The following table shows the remuneration awarded and due in
accordance with §162 (1) sentence 1 AktG. It includes the payments
made in the financial year for base salary and perquisites, the annual
bonus that refers to the performance period of the financial year, and
the payout amount of the share-based remuneration that vested in the
financial year. Furthermore, the pension expenses in the financial year
are listed, even if these are not regarded as remuneration awarded
and due in accordance with § 162 AktG.
10,107
20,310
Christopher Townsend
AEI/RSU
LTI/RSU
18,084
10,196
28,280
Renate Wagner
AEI/RSU
2,532
10,203
1,327
LTI/RSU
2,638
10,017
12,655
Dr. Andreas Wimmer
AEI/RSU
9,844
1,101
8,743
1_All RSUs held by Giulio Terzariol on 31 December 2023 were forfeited on 2 January 2024.
222
1,205
Individual remuneration: 2023 and 2022
€ thou (total might not sum up due to rounding)
LTI/RSU
5,834
Remuneration in the financial year
B_Corporate Governance
16,201
10,196
26,397
Dr. Klaus-Peter Röhler
AEI/RSU
12,166
4,903
7,263
LTI/RSU
5,834
28,590
38,697
Giulio Terzariol¹ (until 12/2023)
AEI/RSU
5,713
5,713
LTI/RSU
28,590
10,107
38,697
Dr. Günther Thallinger
AEI/RSU
10,107
42
49
1
2
30
49
975
2022
End of service: 12/2023
Appointed: 01/2018
3,933
555
3,378
37
968
1,251
1,020
2
83
30
1,024
2023
Giulio Terzariol
2,503
533
1,970
50
30
976
49
570
548
3,051
36
1,106
32
968
2
32
975
2022
Appointed: 01/2017
1,973
3,872
3,325
38
1,278
31
1,020
4
31
1,024
2023
Dr. Günther Thallinger
2,543
547
29
1
49
49
1,020
1
27
49
1,024
2023
Dr. Barbara Karuth-Zelle
2,373
412
1,961
2,071
49
1
271
50
975
2022
Appointed: 01/2022
2,516
444
2,072
49
1,020
959
19
552
Appointed: 01/2021
975
2022
Appointed: 04/2020
2,599
502
2,097
49
1,020
3
54
49
2,622
1,024
Dr. Klaus-Peter Röhler
2,502
556
1,945
49
959
1
11
50
975
2022
2023
3,599
Annual Report 2023 - Allianz Group
43
78
1,064
555
4,090
2022
462
2,460
108
1,001
570
3,461
3,026
2023
3,598
67
1,193
547
4,791
2022
466
3,005
82
1,252
548
480
4,257
477
4,174
73
840
552
2,987
2022
464
1,608
92
804
556
2,412
2023
2023
2,894
24
1,880
502
4,774
2022
462
2,331
71
1,843
533
478
2,147
2023
1,308
2022
367
1,222
46
237
413
1,459
2_SC = service cost. Service costs are calculatory costs for the DBO related to the business year reported.
3_DBO = Defined Benefit Obligation, end of year. The figures show the obligation for Allianz resulting from defined benefit plans, taking into account realistic assumptions with regard to interest rate, dynamics, and biometric probabilities.
44
Annual Report 2023 - Allianz Group
1,989
B_Corporate Governance
The following overview compares the annual development of the
remuneration of the members of the Board of Management, the
average remuneration of the employees, and selected earnings
parameters over the last five financial years.
The remuneration of the members of the Board of Management
presented in the table corresponds to the total remuneration
rewarded and due in the respective financial year. The earnings
development is shown using the two key performance indicators for
the Group's financial target achievement - operating profit and net
income attributable to shareholders, as well as net income as reported
in the individual financial statements of Allianz SE. The workforce of
the German companies of the Allianz Group is used to present the
average employee remuneration on the basis of full-time equivalents.
Dr. Günther Thallinger received the share-based compensation
for the first time in the 2022 financial year and Giulio Terzariol in 2023.
The significant change from 2020 to 2021 in Dr. Klaus-Peter Röhler's
remuneration is explained by the fact that he joined the Board of
Management during the year, so the remuneration reported for 2020 is
pro rata only. The same rationale applies to the increase from 2021 to
2022 in Dr. Andreas Wimmer's remuneration, as he joined during 2021.
Remuneration awarded and due to former members of the Board
of Management for the financial years following their departure
comprises mainly pension payments, share-based compensation
payouts, and other remuneration.
45
Annual Report 2023 - Allianz Group
B_Corporate Governance
Comparative presentation
Development of Board of Management compensation, profit, and average compensation of employees
Change
2019 to 2020
Financial year
Comparative presentation
434
538
58
434
1,308
2022
412
845
412
845
2023
480
2,220
49
238
168
2,388
2022
465
1,678
61
176
526
1,854
2023
481
1,751
529
33
479
739
9,001
879
Giulio Terzariol (until 12/2023)
1,265
9,135
10,400
1,016
Dr. Günther Thallinger
Christopher Townsend
Renate Wagner
Dr. Andreas Wimmer
1,265
9,135
7,866
10,400
1,154
4,708
5,862
573
1,159
6,861
8,020
783
545
4,866
5,411
1,016
529
1,135
6,961
B_Corporate Governance
Shareholding requirements
Under the shareholding requirements, members of the Board of
Management must build share ownership within three years. The
following table shows the values of the share ownership and RSU
portfolios, and their proportion of base salary.
Shareholding exposure as of 31 December 2023
in € thou
Board members active in financial year
Oliver Bäte
Sirma Boshnakova
Dr. Barbara Karuth-Zelle
Dr. Klaus-Peter Röhler
Share-ownership portfolio¹
680
RSU portfolio²
Proportion of total portfolio
value of base salary in %
4,942
17,195
22,137
1,103
545
4,786
5,331
521
1,154
5,806
Total portfolio
2023
1_Based on the XETRA closing price of the Allianz share as of 29 December 2023. Shareholdings as of 31 December 2023: Oliver Bäte: 20,427 shares; Giulio Terzariol and Dr. Günther Thallinger: 5,230 shares each, Renate Wagner: 4,789 shares, Dr. Barbara Karuth-Zelle and Christopher Townsend: 4,771
shares each, Dr. Klaus-Peter Röhler: 4,693 shares, Sirma Boshnakova and Dr. Andreas Wimmer: 2,252 shares each.
Annual Report 2023 - Allianz Group
DBO³
2023
942
7,012
167
4,713
1,109
11,725
2022
913
5,848
SC²
209
1,122
10,456
2023
444
1,202
444
1,202
2022
412
739
412
4,608
2_Based on fair value of RSU portfolio as of 31 December 2023 shown in the table reporting the share-based compensation. The determination of the LTI fair values is based on an option pricing model taking into account additional input parameters, including the term structure of interest rates and the
expected relative performance of the Allianz share price compared to the peer index. For the latter, simulation techniques are applied at the valuation date to determine the volatility of the Allianz stock, the volatility of the peer index, and their correlation. All RSUs held by Giulio Terzariol on
31 December 2023 were forfeited on 2 January 2024.
DBO³
DBO³
B_Corporate Governance
Pensions
Company contributions to the current pension plan "My Allianz
Pension" are 15% of total target direct compensation, reduced by an
amount covering the death and occupational or general disability risk.
The contributions are invested in a fund with a guarantee on the
contributions paid, but no further interest guarantee.
For members with pension rights under the now frozen defined
benefit plan, the above contribution rates are reduced by 19% of the
expected annual pension from that frozen plan.
Individual pensions: 2023 and 2022
€ thou (total might not sum up due to rounding)
In 2023, the Allianz Group paid € 5 mn (2022: € 6 mn) to increase
reserves for pensions and similar benefits for active members of the
Board of Management. As of 31 December 2023, reserves for
pensions and similar benefits for active members of the Board of
Management amounted to € 35 mn (2022: € 35 mn).
Reserves for current pension obligations and accrued pension
rights for former members of the Board of Management totaled
€ 176 mn (2022: € 171 mn).
Board members
Oliver Bäte
SC²
Sirma Boshnakova
Dr. Klaus-Peter Röhler
Giulio Terzariol (until 12/2023)
Dr. Günther Thallinger
Christopher Townsend
Renate Wagner
Dr. Andreas Wimmer
1 Previous closed and frozen plans, including transition payment for Oliver Bäte.
Current pension plan
Previous pension plans¹
Total
SC²
Dr. Barbara Karuth-Zelle
2019
Christopher Townsend
Appointed: 01/2021
Renate Wagner
Dr. Andreas Wimmer
26
1,020
8
26
LTI/RSU
2023
4,261
526
3,735
47
1,757
1,835
26
1
26
26
975
2022
4,437
529
3,908
47
1,835
26
976
1,020
47
538
According to §162 (5) AktG, reporting is done at individual
employee level for up to 10 years after the end of the financial year in
which the Board member in question has ended their activity.
Remuneration awarded and due totaling € 4 mn was awarded in the
2023 financial year to 12 members of the Board of Management who
had left before this period.
Sergio Balbinot has made use of the option to draw his pension
benefits mainly as a lump sum. The "other compensation" column
shows the compensation (in total: € 1,625.5) for the post-contractual
non-competition clause to the extent already paid in 2023.
The following table shows the components awarded and due to
former members of the Board of Management in the 2023 financial
year, in accordance with § 162 AktG, and their relative share of total
remuneration.
Remuneration awarded and due in the 2023
financial year for former members of the Board of
Management
Giulio Terzariol left the Board of Management of Allianz SE as of
31 December 2023 at his own request. All RSUs held by him on
31 December 2023 were forfeited on 2 January 2024.
Members who retired from the Board of
Management in the reporting year
B_Corporate Governance
Annual Report 2023 - Allianz Group
40
40
1_Ms. Boshnakova's perquisites include the payment by Allianz Partners of accommodation expenses totaling € 11 thou until 30 June 2022, the date of termination of her employment with Allianz Partners.
3,885
4,083
3,670
47
1,726
26
959
9
27
975
2022
Appointed: 10/2021
4,424
413
Individual remuneration: 2023
1
26
4,235
548
3,687
47
1,742
26
968
2
26
975
2022
Christopher Townsend
Appointed: 01/2021
Renate Wagner
Appointed: 01/2017
547
3,882
47
1,835
26
1,020
4
26
1,024
2023
Dr. Günther Thallinger
4,429
30
Appointed: 01/2020
2023
1,024
2023
4,126
412
3,714
47
1,742
26
968
1
30
Dr. Andreas Wimmer
26
2022
4,330
434
3,896
47
1,835
26
1,020
18
26
1,024
975
4,285
€ thou (total might not sum up due to rounding)
Former members of the Board of Management
Ivan de la Sota (until 12/2022)
RSU plan
Oliver Bäte
Board members
RSU portfolio development in financial year
The reported RSU portfolios may include RSUs which have been
granted prior to the appointment as member of the Board of
Management of Allianz SE. The decisive price of the Allianz share at
the time of payout was €219.06.
The following table shows the development of the RSU portfolios of
the members of the Board of Management in the reporting year. The
number of RSUs granted under the former Allianz Equity Incentive (AEI
- up to and including the allocation for the 2018 financial year) and
under the current Long Term Incentive (LTI - from the 2019 financial
year) are displayed separately. As Giulio Terzariol left the Executive
Board on 31 December 2023, all RSUs (38,697 units) expired on
2 January 2024.
Share-based remuneration
B_Corporate Governance
Annual Report 2023 - Allianz Group
151
100
LTI/RSU
151
100
136
100
136
282
100
282
482
100
482
95
682
100
AEI/RSU
Number of RSUs on
6,723
AEI/RSU
Dr. Barbara Karuth-Zelle
20,220
10,017
10,203
LTI/RSU
11,144
1,591
12,735
AEI/RSU
Development during financial year
Sirma Boshnakova
10,017
LTI/RSU
10,422
10,422
74,278
Number of RSUs on
31 December 2023
Number of RSUs forfeited
in 2023
Number of RSUs settled in
March 2023
Number of RSUs allocated
in March 2023
20,335
53,943
1 January 2023
10,017
Sergio Balbinot (until 12/2022)
95
3
€ thou
in % of total
54
3,359
21
1,318
€ thou
in % of total
€ thou
Total
Other compensation
Pensions
in % of total
Share-based compensation
Clement Booth (until 12/2014)
Michael Diekmann (until 04/2015)
Manuel Bauer (until 08/2015)
Dr. Maximilian Zimmerer (until 12/2016)
Dr. Werner Zedelius (until 12/2017)
Dr. Dieter Wemmer (until 12/2017)
Dr. Helga Jung (until 12/2019)
Dr. Axel Theis (until 03/2020)
Niran Peiris (until 12/2020)
Dr. Christof Mascher (until 12/2020)
Jacqueline Hunt (until 09/2021)
41
1,266
€ thou
24
41
1,652
20
334
1,225
1,291
10
132
སྐྱ་་ཝ་ ལྕསྐྱ ལྕ
97
1,225
1,499
80
100
1,225
90
1,159
1,287
99
1,278
1,082
100
1,082
6,176
1,318
Appointed: 01/2020
570
47
Annual bonus
Perquisites
Base salary
Appointed: 01/2008
Board members active in financial year
Board members
Oliver Bäte
Pension
Total
Variable long-term
Variable short-term
Share-based
compensation
Fixed compensation
Individual remuneration: 2023 and 2022
The following table shows the remuneration for the financial year. It
contains the variable remuneration amounts resulting directly from the
target achievement of the financial year: the annual bonus - as in the
remuneration in the financial year table above - and the allocation
amount of the LTI grant for the financial year.
Remuneration for the financial year
In the 2023 financial year, the RSU tranches for the 2018 financial year,
allocated in March 2019, were paid out to Oliver Bäte, Giulio Terzariol,
and Dr. Günther Thallinger. According to the remuneration system
applicable at the time of the allocation, the RSU payout is solely
dependent on the absolute share price performance and capped at
200% above the grant price. During the term of the AEI/RSU 2019
tranche, the decisive price of the Allianz share rose from € 193.66 to
€219.06. The increase, and therefore the payout, remained
significantly below this cap.
Compliance with the maximum remuneration principles on
payouts for share-based remuneration in the 2023 financial
year
B_Corporate Governance
Annual Report 2023 - Allianz Group
39
1_Ms. Boshnakova's perquisites include the payment by Allianz Partners of accommodation expenses totaling € 11 thou until 30 June 2022, the date of termination of her employment with Allianz Partners.
2,357
413
€ thou (total might not sum up due to rounding)
1,944
Other compensation
service
1,109
7,732
€ thou
€ thou
€ thou
in % of TC
€ thou
in % of TC
47
3,658
26
2,033
compen-
sation
35
2,007
2023
€ thou
in % of TC
€ thou
in % of TC
€ thou
in % of TC
€ thou
Total
cost
26
8,841
49
538
30
49
1,024
2023
2,384
412
1,972
49
968
2
30
1
49
2022
2,496
434
2,062
49
1,020
1
18
50
1,024
2023
975
2,589
1,020
2,074
2,051
50
1,020
959
9
50
975
2022
Appointed: 10/2021
8
50
1,024
49
2023
526
1,977
49
976
1
26
49
975
2022
2,602
529
2,504
3,715
CEO since 05/2015
1,911
47
4,228
556
3,672
47
4,457
552
3,905
47
4,099
412
3,932
3,687
4,351
444
3,907
47
8,500
1,122
7,378
47
5555777
1,757
26
47
976
502
47
1,742
26
968
1
30
26
975
2022
End of service: 12/2023
Appointed: 01/2018
2,682
4,434
555
48
1,020
4
83
48
1,024
2023
Giulio Terzariol
4,260
533
3,727
2,126
2022
1
26
Dr. Barbara Karuth-Zelle
1,726
26
959
1
271
26
975
2022
1,835
26
2023
1,020
29
26
1,024
2023
Appointed: 01/2022
Sirma Boshnakova
3,504
26
1,947
15
26
1
19
1,024
27
975
2022
Appointed: 04/2020
1,835
26
1,020
1
54
26
1,024
2023
26
Dr. Klaus-Peter Röhler
26
959
11
27
975
2022
Appointed: 01/2021
1,835
26
1,020
1
1,726
in %
Change
2020 to 2021
2020
87.5
62
150.0
2023
Christine Bosse
221.7
2
5.0
41
91.7
56
125.0
2022
36
282.0
7.0
44
125.0
53
150.0
2023
Sophie Boissard
C
C
Ο Σ Σ Σ Σ
220.7
2
4.0
2
6.0
2
243.5
150.0
2023
119.7
3
3.0
28
33.3
70
83.3
2022
Dr. Friedrich Eichiner
(from 05/2022)
205.0
2
5.0
24
50.0
73
150.0
2023
Rashmy Chatterjee
215.5
1
3.0
41
87.5
58
125.0
2022
23
40
50.0
166.7
12.0
51
275.0
47
250.0
2022
(Chairperson)
C
C
C
C
M
759.0
2
1
40
300.0
59
450.0
2023
Michael Diekmann
€ thou
total
€ thou
total
€ thou
total
€ thou
9.0
537.0
M
C
2022
(Deputy Chairperson: from 05/2022)
281.0
2
6.0
18
50.0
80
225.0
2023
Herbert Hainer
265.5
1
3.0
28
75.0
71
187.5
2022
(Deputy Chairperson)
306.0
2
6.0
25
75.0
74
225.0
2023
Gabriele Burkhardt-Berg
76
212.5
57
10.0
6.0
14
25.0
83
150.0
2023
Total
(from 05/2022)
Primiano Di Paolo
178.0
2
3.0
28
3
50.0
125.0
2022
206.0
3
6.0
24
50.0
73
150.0
2023
Jürgen Lawrenz
178.0
2
70
181.0
2022
83.3
48
Legend: C = Chairperson of the respective committee, M = Member of the respective committee.
1_Abbreviations: A = Audit, N = Nomination, P = Personnel, R = Risk, S = Standing, T = Technology, SU = Sustainability.
2,890.4
2
55.0
37
1,059.4
61
1,776.0
2022
3,534.0
2
84.0
34
1,200.0
64
2,250.0
2023
Σ Σ
Σ Σ
Σ Σ
ΣΣ
ΣΣ
103.0
3
3.0
16
16.7
81
3.0
28
50.0
70
2023
Martina Grundler
206.0
3
6.0
36
75.0
61
125.0
2022
259.0
3
9.0
39
100.0
58
150.0
2023
Jean-Claude Le Goaër
289.3
2
6.0
55
158.3
43
125.0
2022
372.5
3
150.0
Members active in financial year
64
32
125.0
2022
206.0
3
6.0
24
1,955
73
150.0
2023
Frank Kirsch
Σ Σ
ΣΣ
ΣΣ
C
Σ Σ Σ Σ
Ο Ο Σ Σ Σ Σ
Σ Σ
179.0
2
4.0
28
50.0
70
125.0
2022
233.0
3
8.0
75.0
in % of
50.0
in % of
3,356
Dr. Christof Mascher (end of service: 12/2020)
2,357
39
1,699
(14)
1,967
Jacqueline Hunt (end of service: 09/2021)
1,814
6
1,717
(6)
1,833
(2)
3,453
3,644
80
2,030
Sergio Balbinot (end of service 12/2022)
Ivan de la Sota¹ (end of service 12/2022)
Former members
2,051
6
1,944
312
472
Dr. Andreas Wimmer (appointed: 10/2021)
2,074
5
(5)
3,285
(56)
1,452
1,472
1,225
30,5252
4
1,291
8
1,200
1,287
(56)
2,903
1,082
(38)
1,755
6,167
94
3,184
ཊྛི, @@
(17)
1,773
(26)
2,405
21
1,988
Dr. Axel Theis (end of service: 03/2020)
1,507
(13)
1,730
Niran Peiris (end of service: 12/2020)
(17)
1,977
5
1,883
10
Giulio Terzariol (end of service: 12/2023)
1,888
47
1,285
Dr. Klaus-Peter Röhler
1,861
2,072
6
1,961
Sirma Boshnakova (appointed: 01/2022)
Dr. Barbara Karuth-Zelle
6,357
12
5,660
(4)
5,912
11
5,350
5,058
Board members active in financial year
Oliver Bäte
Board of management compensation in € thou
2023
2022 to 2023
in %
2022
2021 to 2022
in %
2021
Change
Change
in %
in % of
1,946
12
(13)
10
1,708
Renate Wagner
2,062
5
1,972
4
1,903
Christopher Townsend
3,325
9
3,051
65
1,852
10
1,678
(13)
1,926
Dr. Günther Thallinger
3,378
71
1,973
2,097
6
1,970
2,071
6
1,945
546
1,870
1,694
1,652
4,768
3,135
€ 25 thou
€ 25 thou
€ 50 thou
€ 75 thou
€ 150 thou
Sustainability Nomination
Committee Committee
Technology
Committee
Standing
Committee
Risk
Committee
Personnel
Committee
Audit
Committee
€ 150 thou
Regular member
€ 12.5 thou
Committee remuneration
Deputy Chairperson
Fixed annual remuneration
In addition, the Supervisory Board members are reimbursed for
expenses incurred in connection with their Supervisory Board activities.
The company provides insurance coverage and technical support to
the Supervisory Board members to an extent reasonable for carrying
out their Supervisory Board duties.
In addition to the fixed and committee-related remuneration,
members of the Supervisory Board receive an attendance fee of
€ 1,000 for each Supervisory Board or committee meeting they attend
in person. Should several meetings be held on the same or consecutive
days, the attendance fee will only be paid once. The attendance fee is
payable after the respective meeting.
Attendance fees and expenses
€ 450 thou
Chairperson
Member
Chairperson
The Chairperson and members of the Supervisory Board committees
receive additional committee-related remuneration which is also paid
pro rata temporis after the end of the respective quarter of the
financial year. The committee-related remuneration is as shown in the
graph below:
Committee-related remuneration
The remuneration of a Supervisory Board member consists of a fixed
cash amount paid pro rata temporis after the end of the respective
quarter of the financial year. Each regular Supervisory Board member
receives a fixed remuneration amounting to € 150 thou per year. The
Chairperson receives € 450 thou, each Deputy Chairperson receives
€ 225 thou.
Fixed annual remuneration
€ 225 thou
47
Annual Report 2023 - Allianz Group
Remuneration awarded and due
Dr. Helga Jung (end of service: 12/2019)
S
R
Committees¹
P
N
A
ration
remune-
Total
Attendance fees
Committee
remuneration
Fixed remuneration
Members of the Supervisory Board
M
M
Σ Σ
| Ο Ο Σ Σ
C
C
Σ Σ Ο Ο
Σ Σ Σ Σ
Σ Σ Σ Σ
SU
T
B_Corporate Governance
€ thou (total might not sum up due to rounding)
Individual remuneration: 2023 and 2022
The following table shows the remuneration awarded and due in
accordance with § 162 AktG. It comprises the fixed remuneration,
committee remuneration, and attendance fees as well as members'
relative share of the total remuneration.
The Supervisory Board's Remuneration System was presented to
the Annual General Meeting of Allianz SE on 4 May 2023 and was
approved with a majority vote of 95.07 %.
The remuneration for the Supervisory Board of Allianz SE provides for
a fixed remuneration. Supervisory Board members who had only
served on the Supervisory Board during part of the financial year
receive one twelfth of the remuneration for each month of service
commenced. This shall apply accordingly for membership of
Supervisory Board committees.
C
Given Allianz's relative size and complexity as well as its
sustainable performance, the remuneration of the Supervisory
Board is oriented towards the fourth quartile of the supervisory
board remuneration of peers in the DAX.
8.54
27
6.743
2
6.61
(3)
6.81
(14)
7.91
14.75
4
14.16
6
13.40
25
10.75
(9)
11.86
Net income attributable to shareholders
Profit development in € bn
Operating profit
1,266
13
1,118
(17)
1,354
(5)
Remuneration structure and components
(54)
1,428
4.60
4.61
Net income acc. Allianz SE financial statement
5.35
and
The set total remuneration is both aligned with the scale and
scope of the Supervisory Board's duties and appropriate in view of
the Company's activities and its business and financial situation.
This also reflects the contribution made by the monitoring activity
of the Supervisory Board to the long-term development of the
Company.
The remuneration takes into account the individual functions and
responsibilities of Supervisory Board members, such as
Chairperson, Deputy Chairperson, or Committee memberships.
The remuneration structure allows proper oversight of
management as well as independent decisions on executive
personnel and remuneration.
16
recommendations
Remuneration principles
The remuneration of the Supervisory Board is governed by the Statutes
of Allianz SE and the German Stock Corporation Act. Furthermore, the
structure of the Supervisory Board's remuneration is regularly reviewed
with regard to its compliance with German, European, and
international corporate governance
regulations.
Remuneration of the Allianz SE
Supervisory Board
Annual Report 2023 - Allianz Group
46
46
2_The significant increase reported is due to the fact that Niran Peiris received a payment from share-based remuneration in 2023, while only expenses for tax consultancy fees were reimbursed in 2022.
3_Including the adjustment impact of the deconsolidation in Russia, Group net income amounted to € 7.17 bn, with a growth rate of 19%.
1_In order to ensure actual comparability for Mr. de la Sota, Mr. de la Sota's compensation for the 2022 financial year is shown as € 6,502 thou, excluding the severance payment made in January 2023. Including the severance payment, his compensation amounts to € 8,257 thou, and the change
2021 to 2022 is 355 %.
93
7
B_Corporate Governance
Annual Report 2023 - Allianz Group
68
87
4.79
(10)
Average employee compensation in € thou
8.05
86
Average compensation based on full-time equivalent
81
4
84
4
(6)
✗
Global Insurance Lines & Anglo Markets, Insurance Iberia & Latin America,
Insurance Middle East, and Africa²,3
X
Brazil
X
Canada
X
✗
United States¹
X
North and Latin America
Asset Management
Management
Institutional
Asset
Europe
Banking
Retail Asset
Management
X
X
X
X
X
Life/
Health
Hungary
✗
X
Italy
✗
Ireland
✗
Bulgaria
X
X
Germany
Global Insurance Lines & Anglo Markets
United Kingdom
Czech Republic
X
X
Croatia
✗
✗
France
Property-
Casualty
Corporate and Other
USA
3_Based on currently available peer data. Final peer analysis first available after publication of this Annual
Report, due to the ongoing peers' full year reporting season. Allianz has defined a group of comparable
2_For further information on organizational changes, please refer to the chapter Executive Summary of
2023 Results.
1_Including non-consolidated entities with Allianz customers.
The Corporate and Other business segment's activities include the
management and support of the Allianz Group's businesses through
its central Holding functions, Banking and Alternative as well as Digital
Investments. The Holding functions manage and support the Group's
businesses through its strategy, risk, corporate finance, treasury,
financial reporting, controlling, communication, legal, human
resources, technology, and other functions. Our Banking operations,
which place a primary focus on retail clients, support our insurance
business and complement the products we offer in Italy, France, and
Bulgaria. Digital Investments identifies and invests in digital growth
companies for the Allianz Group.
Our two major asset management entities, PIMCO and AllianzGI,
operate under the governance of Allianz Asset Management (AAM).
We are one of the leading global asset managers that actively
manages assets. Our offerings cover a wide range of equity, fixed
income, cash, and multi-assets products as well as a strongly growing
number of alternative investment products, such as real estate,
infrastructure debt/equity, real assets, liquid alternatives, and solution
business. Our core markets are the United States, Canada, Germany,
France, Italy, the United Kingdom, and the Asia-Pacific region.
Asset management
Most of our insurance markets are served by local Allianz
companies. However, some business lines such as Allianz Global
Corporate & Specialty (AGCS), Allianz Partners (AP), and Allianz Trade
- are run globally.
We offer a wide range of property-casualty and life/health insurance
products to both retail and corporate customers. For the Property-
Casualty business segment, these include motor, accident, property,
general liability, travel insurances, and assistance services. The
Life/Health business segment offers savings and investment-oriented
products in addition to life and health insurance. We are the leading
property-casualty insurer worldwide and rank among the top five in
the life/health insurance business.³ Our key markets (in terms of
premiums) are Germany, France, Italy, and the United States.
Insurance operations
peers with a similar business mix and global footprint, which includes AIG, AXA, Chubb, Generali, and
Zurich.
- Corporate and Other
- Global Insurance Lines & Anglo
Markets, Iberia & Latin America,
Middle East, and Africa
- USA
- Western & Southern Europe
- Asia Pacific
- German Speaking Countries and
Central & Eastern Europe
Life/Health
- Asset Management
Asset Management
- Global Insurance Lines & Anglo
Markets, Iberia & Latin America,
Middle East, and Africa
✗
Corporate and Other
U.S. life insurance
51
C_Group Management Report
Australia
Australia
India
Banking
✗
X
Austria
Central & Eastern Europe
X
Annual Report 2023 - Allianz Group
X
X
X
Germany
German Speaking Countries
Insurance German Speaking Countries, Insurance Central & Eastern Europe
Life/
Health
Property-
Casualty
Market presence of our business operations¹
Worldwide presence and business segments
Switzerland
Allianz Global Corporate &
X
X
X
X
Mexico
Colombia
Brazil
X
- Asia Pacific
Belgium
X
X
X
France
X
X
Türkiye
X
Argentina
X
✗
X
X
X
X
3_In Africa, all businesses were contributed to a joint venture with Sanlam, where the Allianz Group
held a minority stake of 41% at the end of the year 2023. This joint venture also includes the
Allianz Egypt business. In the Middle East, we sold our Lebanon operations in July 2023.
1_This overview is based on our organizational structure as of 31 December 2023.
2_The Global Insurance Lines serve clients through a worldwide network of Allianz-owned offices
plus network partners in other locations - the table above does not list every country separately
in which the global insurance lines operate.
Asia Pacific
Insurance Asia Pacific
X
Allianz Direct
Allianz Direct
X
✗
Italy
Allianz Partners
Greece
✗
X
Saudi Arabia
Middle East
Luxembourg
X
X
The Netherlands
Allianz Partners
Latin America
Europe
X
Switzerland
X
X
Reinsurance
X
X
Romania
X
X
X
Spain
Allianz Trade
Poland
X
X
Luxembourg
Specialty
X
Lithuania
X
X
Ireland
X
X
Sweden³
X
X
United Kingdom²
Spain
Portugal
Insurance Western & Southern Europe, Allianz Direct and Allianz Partners
X
Ukraine
X
Slovakia
X
Iberia
X
X
Slovenia
X
X
Belgium
Insurance Iberia & Latin America
X
The Netherlands
- Western & Southern Europe,
Allianz Direct, and Allianz
Partners
16
Property-Casualty
156.0
Christine Bosse
282.0
27
221.7
10
200.9
178.0
(3)
184.0
Sophie Boissard
281.0
27
220.7
25
176.0
(2)
180.0
(1)
(2)
153.0
37
209.3
Martina Grundler
203.0
203.0
(3)
209.0
Jean-Claude Le Goaër
278.0
(1)
281.0
181.0
(1)
Dr. Friedrich Eichiner
Rashmy Chatterjee (since 05/2022)
205.0
71
119.7
243.5
13
215.5
3
284.0
182.0
Herbert Hainer
15
in %
2021
in %
2020
Change
2021 to 2022
2020 to 2021
Change
in %
2019
2019 to 2020
Change
Development of Supervisory Board compensation, profit, and average compensation of employees
income as reported in the individual financial statements of Allianz SE.
The workforce of the German companies of the Allianz Group is used
to present the average employee remuneration on the basis of full-
time equivalents.
The earnings development is shown using the two key performance
indicators for the Group's financial target achievement - operating
profit and net income attributable to shareholders, as well as net
In the case of Ms. Rashmy Chatterjee and Mr. Primiano Di Paolo,
the significant change from 2022 to 2023 is due to the fact that only
pro rata remuneration is reported for both of them for the 2022
financial year, as they joined the Supervisory Board during the year.
Comparative information
The following overview compares the annual development of the
remuneration of the members of the Supervisory Board, the average
remuneration of employees, and selected earnings parameters over
the last five financial years. The remuneration of the members of the
Supervisory Board presented in the table corresponds to the total
remuneration awarded and due in the respective financial year.
Comparative presentation
Comparative presentation
B_Corporate Governance
Change
2022
2022 to 2023
in %
2023
265.5
2
261.4
9
240.5
(1)
243.5
Gabriele Burkhardt-Berg
759.0
306.0
41
1
530.9
9
486.0
484.0
Michael Diekmann
Active members in financial year
Supervisory Board compensation in € thou
Financial year
537.0
(2)
179.0
(2)
81
(6)
86
Average compensation based on full-time equivalent
Average employee compensation in € thou
8.05
68
4.79
(10)
5.35
16
4.61
4.60
8.54
27
6.74¹
2
6.61
(3)
4
84
4
87
business segments and reportable segments²
Allianz Group structure -
The Allianz Group's structure reflects both our business segments
and geographical regions. Business activities are organized by product
and type of service, based on how these are strategically managed:
insurance activities, asset management activities, and corporate and
other activities. Due to differences in the nature of products, risks, and
capital allocation, insurance activities are further divided into the two
categories property-casualty and life/health. In accordance with the
Board of Management's responsibilities, each of the insurance
categories is grouped into regional reportable segments. In 2023, the
Allianz Group had 11 reportable segments.
Allianz SE and its subsidiaries (the Allianz Group) offer property-
casualty insurance, life/health insurance, and asset management
products and services in almost 70 countries, with the largest of our
operations located in Europe. The Allianz Group serves around 125
million private and corporate customers¹. Allianz SE, the parent
company of the Allianz Group, has its headquarters in Munich,
Germany.
Allianz Group structure
BUSINESS OPERATIONS
C_Group Management Report
Annual Report 2023 - Allianz Group
50
6.81
50
GROUP MANAGEMENT REPORT
Annual Report 2023 - Allianz Group
40
49
Mr. Jürgen Lawrenz did not receive any remuneration for his service on
the Supervisory Board of Allianz Technology SE. All current employee
representatives of the Supervisory Board, except for Ms. Martina
Grundler, are employed by Allianz Group companies and receive
market-based remuneration for their services.
Remuneration for mandates in other Allianz
companies and for other functions
1_Including the adjustment impact of the deconsolidation in Russia, Group net income amounted to € 7.17 bn, with a growth rate of 19%.
93
7
C
(14)
7.91
14.75
289.3
41221
176.0
(2)
179.0
(1)
181.0
173.9
13
29
154.0
156.0
Net income acc. Allianz SE financial statement
Net income attributable to shareholders
Operating profit
Profit development in € bn
Primiano Di Paolo (since 05/2022)
Jürgen Lawrenz
Frank Kirsch
176.0
(1)
- German Speaking Countries and
Central & Eastern Europe
372.5
26
4
14.16
6
13.40
25
10.75
(9)
11.86
181.0
206.0
76
206.0
16
178.0
206.0
178.0
233.0
30
179.0
259.0
103.0
13
Asia Pacific
By screening insurance, investment, and asset management
projects from a sustainability perspective, we extend
understanding of risks and can exploit potential business
opportunities to benefit shareholders, customers, and other
stakeholders.
C_Group Management Report
Annual Report 2023 - Allianz Group
X
✗
X
X
X
X
X
X
X
Our steering
Thailand
Sri Lanka
Singapore
Philippines
Malaysia
Laos
Japan
Indonesia
52
China
X
X
Taiwan
X
Board of Management
The members of the Board of Management of Allianz SE are jointly
responsible for the management of the company and compliance with
legal requirements. Notwithstanding this overall responsibility, the
individual members independently head the departments assigned to
them. They consult with the Chairperson of the Board of Management
on important issues. The Chairperson of the Board of Management is
also responsible for coordinating the departments.
otherwise stated, we use the control principle defined by the
International Financial Reporting Standards (IFRS) when determining
the scope of reporting for the Allianz Group. This Non-Financial
Statement is an integral part of the management report and is subject
statutory audit by PricewaterhouseCoopers GmbH
present the objectives and actions taken in the reporting year. Unless Company description
This non-financial chapter of our 2023 Annual Report covers the
entire Allianz Group. All measures, activities, and key figures refer to the
2023 financial year (1 January 2023 to 31 December 2023). For
targets relevant for the remuneration of the Board of Management,
we disclose the targets that were set for this year, the achievements
from this year and the targets for next year. For all other topics, we
The concepts and key performance indicators (KPIs) that reflect
our material sustainability matters, based on the 2021 GRI materiality
assessment, have been prepared in accordance with the latest GRI
standards. For further information on our materiality assessment,
please refer to section "06.6" in our Group Sustainability Report 2023
on the Allianz company website.
The topics "Climate change" and "Own workforce" are strategic
sustainability focus areas at the Allianz Group, supported by our 2021
GRI materiality assessment and confirmed by the 2023 Corporate
Sustainability Reporting Directive (CSRD) materiality assessment.
Allianz will be required to report under the new sustainability
reporting regime of Corporate Sustainability Reporting Directive
(CSRD) in its sustainability statement for financial year 2024. We are
moving towards compliance with the CSRD with our financial year
2023 reporting for "Climate change" (European Sustainability
Reporting Standards (ESRS) E1) and "Own workforce" (ESRS S1), in
terms of anticipating structural and many content requirements of
CSRD. All material topics will be covered as per the CSRD as of
financial year 2024 reporting. Going forward, the focus for Allianz will
shift from reporting in accordance with Global Reporting Initiative
(GRI) towards full CSRD compliance for financial year 2024.
This section has been compiled in accordance with the Corporate
Social Responsibility (CSR) Directive Implementation Act (EU Directive
2014/95/EU), which has been transposed into German law via
§§ 315d, 289f HGB.
About the statement
NON-FINANCIAL STATEMENT
C_Group Management Report
Annual Report 2023 - Allianz Group
and organizational structure
and participations in affiliates not already consolidated in this segment are deducted.
53
1 Effective 2023, core return on equity represents the ratio of shareholders' core net income to the average
shareholders' equity at the beginning and at the end of the year. From the average shareholders' equity
Non-financial key performance indicators (KPIs) too, are taken
into account when determining the variable remuneration of the
Board of Management. Non-financial KPIs include customer
satisfaction, employee satisfaction as well as various environmental
indicators. For further information on non-financial KPIs, as well as an
overview of the development and expected development of these
non-financial KPIs, please refer to the Non-Financial Statement.
Besides performance steering, we also have a risk-steering
process in place, which is described in the Risk and Opportunity
Report.
pages.
appropriate measures in the event of negative developments. The
Allianz Group uses operating profit and core net income as key
financial performance indicators across all its business segments.
Other indicators include segment-specific figures, such as the
combined ratio for Property-Casualty, core return on equity¹ and new
business margins for Life/Health, and the cost-income ratio for Asset
Management. For a comprehensive overview of our business segment
performance, please refer to the respective chapters on the following
We continuously monitor our business performance against these
targets through monthly reviews - which cover key operational and
financial metrics - to ensure we can move quickly and take
The Allianz Group steers its operating entities and business segments
via an integrated management and control process. It begins with the
definition of a business-specific strategy and goals, which are
discussed and agreed upon between the Holding and operating
entities. Based on this strategy, our operating entities prepare three-
year plans, which are then aggregated to form the financial plans for
the business divisions and for the Allianz Group as a whole. This plan
also forms the basis for our capital management. On the basis of this
plan, the Supervisory Board sets corresponding targets for the Board
of Management. The performance-based remuneration of the Board
of Management is linked to short-term and long-term targets to
ensure effectiveness and emphasize sustainability. For further details
about our remuneration structure, including target setting and
performance assessment, please refer to the Remuneration Report.
Target setting and monitoring
For further information on Board of Management members and
their responsibilities, please refer to Mandates of the Members of the
Board of Management.
Divisional responsibilities for business segments and/or functional
responsibilities are assigned to the individual departments. The latter
include Finance, Risk Management and Controlling Functions, Invest-
ments, Operations and IT, Human Resources, Legal, Compliance,
Internal Audit, and Mergers & Acquisitions. Business division
responsibilities focus on geographical regions or global lines. Rules of
procedure specify the inner organization of the Board of Management
as well as the departmental responsibilities in more detail.
unrealized gains and losses from insurance contracts and other unrealized gains and losses are excluded
X
X
X
In everything we do across our priorities of E, S, and G, we strive to
embed the sustainability principles and activities that are outlined in
our Group Sustainability Report 2023 on the Allianz company website.
Risk management
We ground our strategy in proactive risk management to detect and
address risks across the businesses. Group Risk is responsible for this
process. We have not identified any remaining principal risks resulting
from our operations, business activities, and business relations that
could have severe adverse effects on material non-financial matters.
Any potential risks and impacts identified throughout our risk
assessment have been addressed by the respective concepts we have
in place, which we describe in this report.
As a global insurer, investor and asset manager, understanding
sustainability issues allows us to reduce risks and capture opportunities
in underwriting, claims, proprietary investment management, and
asset management. For further information on climate-related risks,
please refer to the Risk and Opportunity Report. Our concepts for all
other matters for which reporting is required will be addressed in
subsequent sections. The ESG approach provides part of the
foundation for these concepts and is managed by Global
Sustainability.
We continue to expand and strengthen our sustainability risk
management framework. Understanding the requirements and
limitations of our operating entities helps us to develop global
sustainability processes that can be integrated into local processes
and systems.
Sustainability integration approach
Our commitment to tackling sustainability topics applies to our own
operations and our insurance, investment, and asset management
activities.
As a global insurer, investor and asset manager, understanding
and addressing sustainability issues helps us to reduce risks and
capitalize on impacts and opportunities in all areas of our business.
As well as managing risks, sustainability integration directs us to
create products and services that add value to society. We collaborate
with clients and investee companies to deliver real-world benefits, and
channel capital flows towards sustainable outcomes for all
stakeholders.
Sustainability opportunities and risks
As an insurance company that manages risks ranging from single
events to decades, it is important for Allianz to make a holistic
assessment of risk.
Governance: our priority is to create trust through strong
leadership. We aspire to be a trusted partner for protecting and
growing our stakeholders' most valuable assets. Against that
background, strong leadership is a key contributor to a company's
culture and governance.
In the Allianz Group Risk Policy, we define sustainability risks as
events or conditions that could have significant negative impacts on
the assets, liabilities, profitability, or reputation of the Allianz Group or
one of its companies. Examples include environmental and climate
change risks, human rights violations, risks to local communities, and
workforce risks.
our
Our group-wide rules and processes
Our group-wide corporate rules and sustainability processes apply to
all relevant underwriting, proprietary investment, and operations
activities. They require strong collaboration between relevant
functions and business areas.
Key processes are included in the internal Allianz Standard for
Reputational Risk Management (AS RRIM) and other corporate rules
such as the Allianz Standard for P&C Underwriting and Allianz ESG
Functional Rule for Investments. A new corporate rule, the Allianz
Standard for Integration of Sustainability (ASIS), captures and updates
some of the sustainability components of the AS RRIM in effect from
1 January 2024.
The publicly available Allianz Sustainability Integration
Framework provides transparency around our sustainability-related
processes and guidelines. We published the fifth version of the
Framework in 2023 on the Allianz company website.
Our asset management units have developed processes, rules,
and governance for integrating sustainability into their investment
activities.
Consistent application of sustainability processes in our own
business operations, insurance, and proprietary investment activities is
crucial to mitigate risks and exploit the opportunities from the
transition to a sustainable economy and society. It is also essential to
our transformation into a sustainable financial service provider.
Regulation as a driver of sustainability integration
We welcome sustainability regulation as a major driver for fair
competition and a level playing field. We believe that sound
regulation can improve the structure and clarity of sustainability
information.
In 2023, we also actively engaged in and supported regulatory
developments. For example, we are a member of the European
Commission's Platform on Sustainable Finance and have contributed
to the work of the European Financial Reporting Advisory Group
(EFRAG) on EU sustainability reporting standards. Until April 2022, we
did this via in-kind membership of the Project Task Force on European
Sustainability Reporting Standards (PTF-ESRS). Since May 2022, when
the new EFRAG governance was set up, our contribution has been via
an in-kind membership representing the EU insurance industry in the
Sustainability Reporting Technical Expert Group (SR TEG).
In this context, Allianz aims to contribute expert input with respect
to the insurance industry, such as on the dual role of insurers as
preparers and users of sustainability information, as well as on existing
interconnected regulation.
58
If sustainability risks are not identified and managed effectively,
they can have significant repercussions for Allianz and our customers,
suppliers, investee companies and other stakeholders These
repercussions include impacts on our reputation, supply chains,
business continuity, quality, operations, and finances.
Social: our priority is Decent work and economic growth/SDG 8,
including education upskilling and employability. We want to be a
partner to our stakeholders, among them customers, governments,
regulators, and societies. Our goal is to support the next generations
and persons with disabilities so that they can access high-quality
employment. Investing in learning and development for our diverse
workforce is key to making all of this happen in a changing world of
work.
C_Group Management Report
Annual Report 2023 - Allianz Group
X
X
X
✗
X
3_AllianzGI GmbH - Sweden Branch is offering sales support only, no regulated services are
performed locally.
1_Due to the restructuring of AllianzGI's U.S. business, all U.S. institutional business is conducted
out of Allianz Capital Partners of America. Distribution in the United States is done through Voya.
2_Following Brexit, during 2023, the business of the UK Branch has been transferred to Allianz Gl
UK Ltd. and also the business of the Allianz Capital Partners - London Branch has been
transferred to AllianzGI UK Ltd.
Indonesia
Australia
Singapore
China
Taiwan
Hong Kong
Japan
Ethics and responsible business,
Cybersecurity.
For further details on the GRI materiality assessment, please refer to
the "06.6" section in the Group Sustainability Report 2023 on the
Allianz company website.
The CSRD DMA confirms the relevance of the previously identified
topics. In addition, it forms the basis for introducing further topics to
our sustainability reporting going forward, primarily from more
broadly looking into impacts in the value chain. Regarding
sustainability-related risks, the CSRD DMA does not identify additional
principal risks with expected significant adverse impacts on Allianz (as
according to the German Commercial Code (Handelsgesetzbuch -
HGB). For further information on (potential) sustainability-related risks,
please refer to the section "Outlook".
While taxation is not covered under CSRD, it remains a relevant
topic for Allianz in 2023 under the NFRD and is reported based on GRI
207-Tax. The respective information can be found in the section "04.5"
in our Group Sustainability Report 2023 on the Allianz company
website as well as in our Group Tax Strategy published separately on
the Allianz company website.
Partnerships also remain a relevant topic; going forward,
respective details will be covered under the CSRD topic to which a
partnership relates.
The topics "Climate change" (ESRS E1) and "Own workforce"
(ESRS S1) are strategic sustainability focus areas at the Allianz Group,
supported by the GRI materiality assessment and confirmed by the
CSRD DMA. As such, we chose to already converge towards the CSRD
with our financial year 2023 reporting for these two topics, in terms of
anticipating its structural and many of its content requirements. For all
material matters, disclosures in accordance with the topical ESRS and
the cross-cutting ESRS will be fully covered as per the CSRD as of
financial year 2024 reporting. As at financial year-end 2023, the
stakeholder engagement process was still ongoing, so that reporting
on this process and reflection of the results will be introduced next year.
For a description of the CSRD DMA process and outcome for the
financial year 2023, please refer to the section "Outlook".
Sustainability approach
Our purpose drives our sustainability priorities. This means supporting
the transformation of economies that do not breach environmental
barriers. It also means aspiring to achieve a social minimum for
everyone. Building on our business strategy, we have set sustainability
priorities that reflect our values and the areas where we think we can
make an impact across Environment, Social, and Governance (E, S,
and G).
We prioritize three UN Sustainable Development Goals (SDGs) to
guide the integration of sustainability across Allianz and help us to
contribute to societal, environmental, and economic change. In
addition to SDG 13, Climate action, we have chosen SDG 8, Decent
work and economic growth, to guide our work. We believe that
delivering the sustainability agenda is only possible if stakeholders
work together. This is why we also prioritize SDG 17, Partnership for the
goals.
Environment: our priority is Climate action/SDG 13. Our
businesses spanning insurance, investment, and asset management
are focused on understanding and shaping the climate
transformation.
1_It should be noted that the national transposition of the CSRD is still outstanding. The materiality
assessment conducted for the financial year 2023 and described in this section and the Outlook section
is based on the guidance from the European Financial Reporting Advisory Group (EFRAG) available as
57
at December 2023. In the event of changes to the CSRD upon becoming national law, those changes will
be reflected in next year's reporting.
to
Annual Report 2023 - Allianz Group
Wirtschaftsprüfungsgesellschaft.
The governance process for non-financial reporting is aligned
with financial reporting and follows the same review principles as the
Annual Report, engaging with the Board of Management and
Supervisory Board.
matters
For further insights, please refer to section Employee
For further insights, please refer to section
Responsible consumer/sales
For further insights, please refer to section
Environmental matters
For further insights, please refer to section
Environmental matters
For further insights, please refer to section Social
matters
For further insights, please refer to section
Environmental matters and EU Taxonomy
Regulation
For further insights, please refer to section Corporate
sustainability governance and strategy
More Details
Leadership Contribution with particular focus on
Allianz People Attributes (Customer & Market
Excellence, Collaborative Leadership,
Entrepreneurship and Trust)
Digital Net Promoter Score (dNPS) development
against previous year and overall ambition level
Inclusive Meritocracy Index (IMIX) and Work Well
Index+ (WWI +) development against previous year
and overall ambition level
Ensure Lifelong Learning
For further insights, please refer to section Employee
matters
Follow through on the transition plan to reach the
net-zero commitments from our business and
operations
in proprietary investments and products
Ensure sustainable solutions
Achieve strong sustainability position
(top performance in DJSI, MSCI)
Board Targets 2024
All board members fully meet leadership standards
and requirements based on the evaluation of
extensive 360 degree feedback (incl. peers,
reporting lines and other personnel)
n.a.
IMIX: 81% (2022: 79%)
WWI +: 76% (2022: 71%)
GHG emissions from Proprietary Investments
reduced ahead of target (exceeding 40 %);
Additionally, Allianz Net Zero Transition Plan
published, including 2030 targets for Proprietary
investments, Property-Casualty and Operations
Achieved 59% Loyalty Leaders across all business
segments4
GHG emissions from Operations reduced (-62 %)
and renewable electricity share increased to 100%³
Sustainable Investments scope grew with the
addition of sub-sovereigns, active increase, market
value growth and further scope expansion;
framework for sustainable Life savings products
established and growth plan for Sustainable
Insurance Solutions in Property-Casualty developed
Social positioning defined with focus on societal
resilience, (financial-) education and employability,
including Lifelong Learning
MSCI²: AA
n.a.
DJSI/S&P Global CSA¹: 3rd
For further insights, please refer to section Employee
1_Top 5 of assessed companies, which are DJSI eligible at industry level; 3rd highest score among the insurance industry with 82/100 - score date 31 December 2023.
2_The use by Allianz of any MSCI ESG research LLC or its affiliates ('MSCI) data, and the use of MSCI logos, trademarks, service marks or index names herein, does not constitute a sponsorship, endorsement, recommendation, or promotion of Allianz by MSCI. MSCI services and data are the property of
MSCI or its information providers, and are provided as-is and without warranty. MSCI names and logos are trademarks or service marks of MSCI.
3_For more details about the sources of the renewable electricity, please refer to section Energy consumption & mix.
The CSRD double materiality assessment (CSRD DMA) will form the
basis of our future reporting and will be reviewed annually. It has also
been used to test our 2021 materiality assessment, which was based
on the GRI Standards. This GRI materiality assessment, which identified
19 material issues, is still applicable. Topics were ranked and presented
in a materiality matrix based on key stakeholder views on their
importance to society and our business. The highest-ranked topics
under the GRI materiality assessment were:
areas so far, but are now moving more into focus, as data,
methodologies, and overall research and regulatory guidance evolve.
The process, methodology, and outcome of the double materiality
assessment were thoroughly reviewed and endorsed by our Group
Sustainability Board and the Board of Management. In addition,
Board of Management approval has been granted via the Allianz
Group Annual Report sign-off process.
In 2023, we carried out a robust and comprehensive double
materiality assessment process (in accordance with the CSRD) and
accompanying European Sustainability Reporting Standards (ESRS)¹,
accounting for the evolving methodology to cover financial materiality
(risks and opportunities from a business perspective) and impact
materiality (impacts on people and planet). This has allowed us to
deepen our understanding of matters previously identified as being
material to our key stakeholders. It also enabled us to extend our
assessment to those sustainability matters that have not been focus
Having an in-depth understanding and being able to appropriately
respond to the changing context in which we operate is fundamental
to us, both to have a positive impact and to manage any potentially
adverse impacts. To this end and to stay abreast of the trends that are
most relevant to our stakeholders and our business, as well as to align
our sustainability strategy, implementation measures, and reporting,
we assess the materiality of sustainability matters on a regular basis.
Materiality
2_The use by Allianz of any MSCI ESG research LLC or its affiliates ('MSCI) data, and the use of
MSCI logos, trademarks, service marks or index names herein, does not constitute a
sponsorship, endorsement, recommendation, or promotion of Allianz by MSCI. MSCI services
and data are the property of MSCI or its information providers, and are provided as-is and
without warranty. MSCI names and logos are trademarks or service marks of MSCI.
1_Top 5 of assessed companies, which are DJSI eligible at industry level; 3rd highest score among
the insurance industry with 82/100-score date 31 December 2023.
(2022: AA)
AA
AA-AAA
MSCI²
matters
Global CSA
3rd¹
Board targets 2023
Top 5
DJSI/S&P
Rating
Target and achievements: sustainability ratings
For further information on the targets and achievements, please
refer to the respective sections. These KPIs are also used for steering
local entities. For further information on the remuneration system,
please refer to the Remuneration Report. In addition to these
sustainability-related targets, we also describe objectives and actions
which help further strengthen our sustainability approach to the
matters described in this chapter.
In 2023, the variable component of the board members' remuneration
(individual contribution factor) considered a range of sustainability-
related targets, as shown in the table above.
C_Group Management Report
Annual Report 2023 - Allianz Group
56
4_Loyalty Leadership is a category within dNPS describing the performance of Allianz versus the rest of market at a local level. Loyalty Leadership is the best of four categories in the rating systematic (Below Market/At Market/Above Market/Loyalty Leader).
Achievements 2023
(2022: 3rd)
Achievement 2023
Leadership Contribution with particular focus on
Allianz People Attributes (Customer & Market
Excellence, Collaborative Leadership,
Entrepreneurship and Trust)
n.a.
also supports the Personnel Committee in the preparation of the
sustainability-related target setting, as well as the review of the set
targets' fulfillment for the Management Board's remuneration. In
2023, the Sustainability Committee prepared the recommendation of
the sustainability-related targets for the members of the Board of
Management of Allianz SE, reviewed the respective achievements of
the Board of Management, and gave its recommendation to the
Personnel Committee of the Supervisory Board. The Sustainability
Committee was kept informed on the sustainability strategy and
provided advice and guidance on critical issues.
The core objectives of the Sustainability Committee include:
advising the Supervisory Board on sustainability-related issues to
support economically sound and sustainable development and
positioning of the Allianz Group, closely monitoring and supporting
oversight of the Management Board's sustainability strategy, in
particular the management and execution of the strategic framework
for group-wide sustainability measures and conducting preliminary
examination of the sustainability-related disclosures, including the
non-financial statement as part of the Supervisory Board's review. It
Allianz established a Sustainability Committee (as a committee
of the Supervisory Board) to strengthen the integration and
implementation of our sustainability strategy throughout the
organization and business functions.
We are dedicated to responsible and transparent governance. Allianz
has increased the importance of sustainability with the ambition to
fully integrate sustainability across the company. Ultimate
responsibility for all matters relating to sustainability resides with the
Board of Management of Allianz SE as the Group's parent company.
To support the Board of Management in its decision-making,
Allianz SE established a dedicated Group Sustainability Board. It is
composed of members of the Board of Management of Allianz SE and
Group Center heads, and meets quarterly. The core objectives of the
Group Sustainability Board are: preparing the overall framework for
sustainability for the Allianz Group, integrating sustainability into the
Group's business processes with Allianz as an organization (operations
and organization) and Allianz as a financial institution (investments,
insurance, asset management), and maintaining oversight of and
steering overarching sustainability matters.
Governance
C_Group Management Report
Annual Report 2023 - Allianz Group
54
1_Including non-consolidated entities with Allianz customers.
Our purpose - We secure your future - guides our actions across the
Allianz Group and drives us to pursue constant innovation and
collaboration. It also guides our interactions with our customers,
partners, employees, investors, governments, regulators, society,
people with disabilities and next generations across all our businesses.
Our ambition is to support the transformation towards
sustainable economies as a partner to our stakeholders. In doing so,
we want to drive real-world impact across societies, economies, and
the environment. This includes helping to shape the economy to
provide the social minimum for all while maintaining environmental
barriers.
Corporate sustainability governance
and strategy
Global Sustainability was established in 2021 and supports the
Group Sustainability Board in the execution of its responsibilities. This
includes preparation, coordination, and implementation of the
decisions by the Group Sustainability Board. It supports Allianz's Group
Centers and operating entities to effectively integrate the Group's
sustainability strategy into their business processes and policy
framework. Global Sustainability drives the integration of
sustainability-related matters across the organization and business to
ensure Allianz plays a role in shaping the societies and economies in
which it operates.
For further information on our business model, see our Business
Operations chapter in the Allianz Group's Annual Report 2023 and
section "01.2" of our Group Sustainability Report 2023 on the Allianz
company website.
Our customers benefit from a broad range of personal and
corporate insurance services. This includes property, life and health
insurance, assistance services, credit insurance, and global business
insurance.
The Allianz Group is one of the world's leading insurers and asset
managers with around 125 million private and corporate customers¹
in almost 70 countries.
EU Taxonomy Regulation,
Outlook.
Compliance/anti-corruption and bribery matters,
Human rights matters,
Employee matters,
Responsible consumer/sales,
Cybersecurity,
Social matters,
Corporate sustainability governance and strategy,
Environmental matters,
Company description
-
The Non-Financial Statement has the following main chapters:
As one of the world's largest investors, Allianz manages around
€ 737 bn on behalf of its insurance customers. Our asset managers -
PIMCO and Allianz Global Investors - manage € 1.7 tn of third-party
assets.
Group Centers take responsibility for sustainability within their
functions with the purpose of embedding sustainability across the
Allianz organization and business. Global Sustainability and Group
Centers work with an extensive network of sustainability and business
experts located across Allianz's operating entities, globally providing
guidance and setting minimum standards to ensure they embed
sustainability in their strategies and approaches. This network
supports implementation of the group-wide sustainability strategy,
shares best practice and scales positive impacts across the
organization.
Other Board of Management committees play an important role in
decision-making processes:
Digital Net Promoter Score (dNPS) development
against previous year and overall ambition level
Inclusive Meritocracy Index (IMIX) and Work Well
Index+ (WWI+) development against previous year
and overall ambition level
Follow through on net-zero ambition, in particular
in line with our Net-Zero Alliances commitments
50% reduction of GHG (greenhouse gas) emissions
per employee from Operations by 2023 (vs 2019)
and 100% renewable electricity (RE) as share of
total electricity consumption in 2023
with Allianz purpose focusing on
Sustainable Development Goal 8 (SDG 8)
Define positioning on Social in line
Ensure sustainable solutions in
proprietary investments and products
Achieve strong sustainability position (top
performance in DJSI, MSCI)
Board Targets 2023
Governance
Employability &
Lifelong Learning
Employee
Engagement
Social
Customer Loyalty
Decarbonization
Environmental
Overarching
Our Targets
Sustainability-related targets linked to the remuneration of the Board of Management
C_Group Management Report
Annual Report 2023 - Allianz Group
55
In 2023 and for 2024, the targets for the Board of Management
have been further developed to reflect sustainability priorities. The
table below describes the targets in more detail. Minor wording
changes were applied compared to the publications last year to create
consistency with the Allianz SE Board Member target letters. The
underlying targets remain unchanged compared to last year.
While many operating entities (OES) had already established local
responsibilities for sustainability integration, this was formalized
during 2023 with mandatory roles. Each OE must nominate one Board
member to be responsible for sustainability, who will be supported by
at least one Sustainability Lead.
The Group Investment Committee focuses on fundamental
investment-related topics, including sustainability-related matters.
The Group Finance and Risk Committee oversees risk
management and monitoring, including sustainability risk.
The Group Underwriting Committee monitors the underwriting
business, its risk management and development of underwriting
policies and strategies. This includes the integration of
sustainability into these processes and strategies.
Any references to information published outside the Group
Management Report and Allianz SE's Management Report are
supplementary, do not form an integral part of this non-financial
information, and are not subject to any assurance engagement (unless
specified in the respective document).
-
Climate change,
5.5
66.6
0.9
0.1
0.0
73.6
Investment funds measured at fair value through profit or loss
66.6
65.9
No methodology yet¹
0.4
Real estate
1.5
0.0
0.0
9.5
0.8
4.9
0.1
25.9
64.9
4.2
0.1
4.9
0.1
25.9
64.9
0.0
1.5
Corporates
17.4
36.7
37.7
1.6
56.5
Other (book value < € 20 bn and cash)
30.5
27.1
No methodology yet¹
12.6
2.4
0.0
6.0
Real estate
153.5
1.4
8.5
99.6
175.0
0.9
6.0
Public debt
87.9
0.7
7.1
80.3
39.1
0.7
4.2
0.1
35.7
0.5
3.3
Real estate
Shares in affiliates and associated enterprises
No methodology yet¹
10.7
Real estate
7.3
Corporates
C_Group Management Report
We aim to leverage regulation on sustainability by ensuring
consistent implementation across all Allianz businesses. At the same
time, we aim to build business opportunities in line with regulatory
concepts.
Allianz has established a Sustainable Finance Regulation
implementation project at Group level to drive this. Internal guidance
is designed in close interaction with Group Centers and Operating
Entities, to ensure consistent interpretation and implementation. The
focus in 2023 was on the implementation of Sustainable Finance
Disclosure Regulation (SFDR), namely regarding pre-contractual and
periodic product disclosure as well as website disclosure in
consideration of "Principal Adverse Impact" for the Life-Asset product
offering.
In 2023, Allianz started convergence into future CSRD reporting
with a respective implementation project. The project is managed by
the Group Accounting and Reporting function and defines policies,
processes and reporting content in line with future ESRS requirements.
The Group Sustainability Board oversees progress and deliverables of
the project and provides directional guidance. The CSRD project is
underpinned by the ambition to implement ESRS requirements with
the same quality and diligence as for financial reporting processes.
Environmental matters
The net-zero challenge
Human-made climate change, one of the greatest global challenges
of our time, has already caused far-reaching negative consequences
and losses for nature and people. Various human and natural systems
are being stressed beyond the limits of their adaptive capacity.
Therefore, irreversible damage has already started to occur.
In order to mitigate these developments, the 2015 Paris
Agreement set the goal of limiting global warming to a maximum of
1.5 °C by the end of the century. This has resulted in a fixed greenhouse
gas emissions (GHG) budget; i.e., an upper limit for global emissions
that may still be released. Based on modeled emission pathways from
the Intergovernmental Panel on Climate Change (IPCC) 6th
Assessment Report, emissions need to be almost halved every decade
to restrict warming to 1.5 °C with limited or no overshoot, with a 50%
probability of success. This would allow carbon (CO2) emissions to
reach net-zero by 2050, meaning that residual emissions would be
balanced by atmospheric carbon removal. Climate scientists estimate
that halting GHG emissions on a net level would subsequently put a
stop to further warming.
In 2022, however, annual energy-related carbon emissions
reached a record level of 37 billion tons according to the International
Energy Agency. If current trends continue, the GHG budget will be
exceeded way before 2030 and the target of 1.5 °C will be overshot
significantly. This increases the need for an even more rapid transition
later on, as well as the use of atmospheric carbon removal - i.e.,
negative emission solutions - to bring warming back to 1.5 °C by the
end of this century. Recent research has shown this is still possible but
requires urgent action by companies and policymakers alike.
Transition plan and strategy
Our approach to climate change is grounded in the Allianz Group
Climate Change Strategy. First published in 2005, it steers our response
to climate-related impacts, risks, and opportunities in our insurance
and investment business. Since 2015, the Climate Change Strategy has
been built around our efforts to anticipate climate risks, care for our
customers, and enable the net-zero transition.
Since 2018, our Climate Change Strategy has committed us to
contribute to pursuing efforts that limit global warming to 1.5 °C by the
end of the century. To anticipate and enable this transition, Allianz has
committed to net-zero greenhouse gases (GHG) for our proprietary
investments, Property-Casualty insurance, and our own operations. In
September 2023, we published our Inaugural Net-Zero Transition Plan
on the Allianz company website, which describes our intermediary
targets for 2030 and key actions to achieve them. This approach builds
on the previously released 2025 emissions targets for proprietary
investments and own operations.
Our priorities include quantitative emission targets, strategic
growth of financing and insuring of low-carbon technologies that
support net-zero, targeted restrictions for fossil fuel-based business
models to manage transition risks, and a systemic approach to
investee engagement and policy advocacy, supported by climate
action in our own operations.
These elements, which address the impacts, risks, and
opportunities of climate change, are explained in more detail in the
subsequent sections on insurance, investments, own operations, and
risks. Our ambition is to be a trusted partner for our customers and
investee companies across different sectors in their transition toward
net-zero.
Since the net-zero transition is a systemic issue, it requires a whole-
of-society response. Therefore, we are also seeking to join forces with
other stakeholders. Our approach on the investment side builds on the
work of the U.N.-convened Net-Zero Asset Owner Alliance, which
Allianz co-founded and currently chairs. Furthermore, we encourage
companies to implement net-zero strategies via our participation in
The B Team, Climate Action 100+, the Transition Pathway Initiative,
and the Principles for Responsible Investment.
For further information and a full list of sustainability related
memberships, please refer to the section "06.3" in our Group
Sustainability Report 2023 on the Allianz company website.
Climate-related opportunities
Our materiality analysis under CSRD found climate-related
opportunities to be material for the Property-Casualty insurance and
proprietary investments. Our business strategy and our net-zero
transition plan aim to systematically leverage opportunities to finance
and insure a low-carbon and climate-resilient future, e.g., by investing
in renewable energy, energy efficiency in real estate, and electric
vehicle infrastructure.
21.2
46.1
23.9
Annual Report 2023 - Allianz Group
22.4
60.9
26.9
9.3
20.5
0.2
9.1
77.1
24.9
0.3
69.1
0.3
4.1
64.4
34.8
0.3
52.4
1.1
26.6
85.3
46.5
1.1
#33་ 8 g¢ 8
7.3
23.9
Public debt
Corporates
Real estate held for investment
2.1
121.7
1_This includes asset classes for which no methodology exists yet, e.g. covered bonds.
Portfolio company decarbonization
We have defined two additional requirements for our
investments. Firstly, we will predominantly invest in Article 8 or Article 9
funds (or equivalent) as defined by the EU Sustainable Finance
Disclosure Regulation (SFDR). Secondly, we will require a credible
transition plan for all unlisted direct investment with a carbon intensity
above 100 t CO₂e/€ mn invested.
As a first step to reach this target, we have defined all low-carbon
technologies that qualify as climate solutions¹. We need to develop a
process to align and agree on concrete volumes per annum with all
relevant stakeholders: operating entities, asset managers, and
relevant Group centers.
We have therefore included a quantitative 2030 target for
investments in climate solutions, which is to increase climate solution
investments by at least € 20 bn by 2030, subject to market environment
and constraints.
Portfolio decarbonization will also be fostered by increasing our
share in Sustainable Investments. We have achieved our 2025 target
for financing the transition; i.e., we have created between 4 and 5 new
blended finance vehicles and have made initial investments in forestry
and hydrogen.
In 2023, we added the sectors Steel and Automobile. For both sectors,
we are currently implementing data flows as a first step.
Scope 3 (cat 11): 41.68 g CO₂e/km in line with IEA Net-Zero
GHG Emissions by 2050 scenario
Automobile (Coverage TPI):
Scope 1 and 2: 1.18 t CO₂e/t steel in line with IEA Net-Zero
GHG Emissions by 2050 scenario
Steel (Coverage TPI):
Coal phase out in line with 1.5 °C pathway
Scope 1: 0.17 t CO2e/MWh in line with IEA Net-Zero GHG
Emissions by 2050 scenario
Utilities (Coverage Transition Pathway Initiative (TPI)):
100% of AuM to set net-zero targets across all 3 emission
scopes (target year 2025)
Scope 1, 2 and 3 (cat 11): 43.07 g CO2e/MJ in line with IEA Net-
Zero GHG Emissions by 2050 scenario
Oil & Gas (coverage Allianz O&G 100 list):
We have set sector targets for the high-emitting sectors listed below.
These targets will trigger three types of actions supporting our overall
GHG emission reduction target: sector engagements (for further
information, please refer to section "Portfolio company
decarbonization"), exclusions, and moving from climate laggards to
climate leaders within the respective sectors:
We aim to finance the transition of companies in the hard-to-
abate cement and steel sector that are aligned with a 1.5 °C world and
have well-defined decarbonization strategies. We will therefore create
a separate emission bucket and adjust the sub-portfolio target for
listed equity and corporate bonds to reflect additional exposure in
those transition leaders included on our new steel and cement climate
list.
As well as setting decarbonization targets per mandate, we
exclude certain companies in line with our global energy-related
guidelines for thermal coal, oil sands, oil & gas. For further information,
please refer to section "Overarching Policies". These exclusions
therefore contribute to the implementation of our sector targets for oil
&
gas s and utilities that are outlined below. All excluded companies are
included in the Allianz Group Risk Global Restricted List and are shared
with all asset managers on a regular basis. Asset managers are
obliged to comply with these restrictions.
As we have set overall GHG reduction targets on a Group-wide
level, we start by breaking down the global target to individual
mandate level. Each asset manager is then responsible for reaching
the respective mandate decarbonization target by taking appropriate
actions. For real estate, for example, these actions might include
tenant engagement, portfolio transactions, and deep refurbishments.
We hold regular deep-dive meetings where we monitor and discuss
the decarbonization performance of our asset managers against the
set targets.
As an investment management function, we have set targets and
frameworks for our asset managers that will ultimately lead to a
change in our portfolio allocation with respect to asset classes,
investees, and sectors.
The scope of actions outlined below to implement portfolio allocation
changes is in line with the scope of our overall GHG emission reduction
targets; i.e., covering our global exposure in corporates and real estate.
Portfolio allocation change
Decarbonization levers
C_Group Management Report
Annual Report 2023 - Allianz Group
3_Target-Setting Protocol Third Edition - United Nations Environment - Finance Initiative
The extent to which we can achieve reduction of GHG emissions for our
investee companies and real estate investments depends on the
respective ownership structure. For example, in the case of fully-owned
real estate assets, we can directly influence GHG emissions by deep
refurbishments. However, if we are only a minority owner, we are
restricted to indirectly impacting GHG emissions through engagement,
for example, or proxy voting (public equity).
2_Explaining Allianz Intermediate Climate Target Setting 2030 for Proprietary Investments.
One indirect lever to reach our 2030 GHG emission reduction
targets is therefore continued engagement and support of our
portfolio companies. We have consequently implemented a
systematic and strong engagement approach across all types of
engagements: bilateral, multilateral, and asset manager. For further
information on our engagement approach, please refer to our 2023 -
Allianz Investment Management - Our Engagement Approach on the
Allianz company website.
1_We have started working on harmonizing terminology and underlying eligible technologies related to
In our own operations, we aim to reduce our environmental footprint
over time. We have established a dedicated unit - Group Sustainable
Operations - within Group Operations & IT to align the strategic
approach across all Allianz entities, with the aim of reducing their
environmental footprint and accelerating impact through setting clear
targets and sharing best practice. The main operations in scope are
Travel and Fleet, Procurement, Facility Management, and IT.
Current emissions
The EFRI is mandatory within the Allianz Group for all insurance
and reinsurance legal entities, including related pension schemes and
all types of investment assets. Sustainability governance is fully
integrated into existing governance structures and makes use of
existing committees (e.g., the Group Investment Committee).
Own operations
The EFRI applies to all proprietary investment assets excluding
unit-linked assets and is owned by the Sustainable Investing team. It is
authorized by the respective Allianz SE Board Member responsible for
Investments. The EFRI is published in the Allianz Corporate Rules Book
and is available to all relevant stakeholders.
For further details, please refer to section "02.2.1" in our Group
Sustainability Report 2023 on the Allianz company website.
Risk management: The Allianz Climate Change Risk Solution
(ACCRIS) tool must be used to assess physical climate change risk
for fully-owned real estate and prospectively for all single location
assets. Whenever a certain level of physical risk is identified, a
climate change adaptation plan needs to be implemented.
Sustainable Investments: We define sustainable investments in line
with the SFDR Article 2 (17) and actively pursue investment
opportunities that support solutions to environmental and societal
challenges, aligned with the U.N. Sustainable Development Goals
(U.N. SDGs).
Exclusions of certain sectors, companies and sovereigns: Certain
investments need to be excluded based on the Allianz guidelines
for Oil and Gas and Coal-based business models. Some exclusions
are triggered by engagement.
engagements.
Active engagements: As an integral part of our strategy, we
perform bilateral engagements based on systematic sustainability
scoring, multilateral
engagements, and asset manager
Selecting and monitoring asset managers: Asset managers need
to adhere to their own qualified sustainability policy including
climate as a key topic. Regular review meetings with asset
managers covering sustainability topics need to be performed.
Systematic evaluation and scoring of investments: For unlisted
assets, a case-by-case evaluation needs to be performed to
identify potential sustainability risks. For listed assets, sustainability
criteria based on MSCI data are used to screen all investments and
inform our investment decision-making.
-
-
The EFRI provides a detailed description of all relevant processes for
integrating climate into the investment processes and managing
climate risk:
We are committed to managing climate change risk identified as a
material risk for our proprietary investment portfolio. To align our
investment management function with this commitment, we have set
ambitious GHG emission reduction targets that incentivize respective
decision-making (see table "2030 Targets for emissions associated
with proprietary investments"). Our Allianz ESG Functional Rule for
Investments (EFRI) sets out the rules, principles, and processes that
govern the integration and application of climate topics to the
Insurance Investment Assets of Allianz.
Proprietary investment specific policies
The whole investment management function of Allianz is
responsible for implementing climate topics in the existing processes
and hence in the investment portfolio.
As many of our high emitters in the portfolio can only decarbonize
properly if the whole sector - including the value chain - decarbonizes,
we are also active in sector engagements via multilateral engagement
initiatives. Sector engagements are supporting our sector targets for
2030, in particular in the oil & gas and steel sectors. For more
information on our sector targets, please refer to the section "Portfolio
allocation changes".
Thirdly, we aim to engage with 15 non-multilaterally engaged
portfolio emitters among the top 100. We will screen the financed GHG
emissions of our portfolio companies to identify those qualifying for
engagement; i.e., those with the highest financed GHG emissions that
are not already engaged.
Secondly, we want to participate in 30 multilateral engagements
(at least 15 of them with a focus on climate), either as the lead
organization or as a member. In order to reach this target, we will
continuously review existing or new multilateral engagement
initiatives. In 2023, we joined the collaborative engagement initiative
"Investor Initiative on Hazardous Chemicals" (IIHC).
We have therefore updated our engagement targets earlier than
originally planned. By 2030 (versus September 2023), we firstly want
to engage with all external asset managers who are "below
expectations" based on a systematic assessment. In order to reach this
target, we initially need to perform a systematic sustainability
assessment of all of our public and private asset managers. If an asset
manager does meet our minimum expectations, we will start
engagement to close identified gaps. We regularly review our public
equity asset managers against best practice guidance (e.g., NZAOA
guidance on best practice for proxy voting and climate lobbying).
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67
the targets for climate solutions (currently used for proprietary investments) and transition solutions
(currently used for P&C insurance). We expect to conclude this work and report on it in FY2024.
We have already achieved our 2025 engagement targets in 2023
as we have engaged the top 30 (non-aligned) emitters in our portfolio,
increased our engagement activities by 100%, and fully participated
in all NZAOA sector and asset manager engagements.
We have strategically insured and invested in low-carbon assets
for over a decade. With our 2023 Inaugural Net-Zero Transition Plan,
we have also set quantitative targets for investing and insuring
solutions that are needed in the net-zero transition. Our Sustainable
Solutions program provides products and services that aim to create
positive impacts with our (re-)insurance activities and investments.
Growing sustainable solutions is among the topics included in the
annual financial planning processes of our operating entities, in order
to systematically identify growth and profitability potential. For further
information on sustainable solutions, please refer to the section EU
Taxonomy for non-life insurance.
100.0
36.7
3_This includes asset classes for which no methodology exists yet, e.g. covered bonds and cash.
4_This includes asset classes for which we calculate owned emissions but have no targets yet, e.g. sovereign bonds.
5_Target 2030: Exact target depends on regional and sectorial portfolio composition 12/2029.
2_Including Pimco Prime Real Estate portfolio.
1_Including 50% of real estate funds and w/o retail mortgages.
Total
No target yet
No methodology³
Real Estate (Equity and Debt) 1,2,5
thereof: Listed Corporates (Traded Equity / Corporate Bonds)
All Corporates (Listed and Unlisted)
The table below shows Allianz intermediate 2030
decarbonization targets as well as the respective baseline year values,
where available. We have defined GHG emission reduction targets for
corporates and real estate.
Our progress toward target achievement will be monitored
regularly and reported in the Non-Financial Statement.
We have set 2030 targets that are aligned with the Carbon Risk
Real Estate Monitor (CRREM) for our real estate equity and debt
portfolios. These sectoral decarbonization pathways are based on the
latest science, supported by the Science Based Targets initiative, and
widely accepted as best practice.
For unlisted corporates, we are still in the process of
gathering emission data and we do not know beforehand how many
of our portfolio companies and indirect investments via funds will
deliver data in the coming years until 2030. As data coverage is
uncertain and changing, we cannot set a reasonable absolute GHG
emission reduction target for our overall corporate portfolio. An
intensity metric does not rely on coverage as absolute GHG emissions
are divided by the respective portfolio exposure. We therefore decided
to set an emission intensity reduction target for our listed and unlisted
corporates portfolio for 2030.
further information, please refer to section "1.5 °C alignment of
targets" and the work of the NZAOA with the IPCC scenarios³.
A reduction of 50% is in line with latest IPCC scenarios and equals the
midpoint of the respective scenario range from 40% to 60%. For
We have added a 2030 emission intensity reduction target
covering all listed and unlisted corporate exposure (e.g., infrastructure
debt) in the amount of 50% compared to the 2019 baseline emission
intensity (see table "2030 Targets for emissions associated with
proprietary investments").
We have set an absolute GHG emission reduction target for listed
corporates (corporate bonds and public equity). Our target is to reduce
absolute GHG emissions in the respective asset classes by 50% by 2030
compared to the 2019 baseline emissions.
Overall GHG emission reduction target
As of the financial year 2024, we will only report on our new 2030
targets.
industries, especially the E.U. and the U.S., based on the latest climate
law and regulation; i.e., "Fit for 55" and the "Inflation Reduction Act".
We also wanted our new targets to include what we have learned from
previous years; e.g., related to data availability. The targets remain in
line with the latest science (IPCC report) and industry best practice
(NZAOA TSP) and are broader in terms of coverage and depth. For a
detailed explanation of our 2030 targets, please refer to Explaining
Allianz Intermediate Climate Target Setting 2030 for Proprietary
Investments² on the Allianz company website.
2030 Targets for emissions associated with proprietary investments
We have therefore decided to update our complete range of
targets in 2023 and define new targets for 2030. When setting these
targets, we considered potential future developments in large
We have already reached our intermediate 2025
decarbonization target for corporate bonds and listed equities in 2023
as we reduced our financed GHG emissions by 44% against the target
of a 25% reduction. For full 2025 target reporting, please refer to the
section "03.2" in our Group Sustainability Report 2023 on the Allianz
company website. We have also reached our targets for engagements
and financing the transition. For further information, please refer to the
section "Decarbonization Levers".
We deem the framework laid out by the UN-convened Net-Zero Asset
Owner Alliance (NZAOA) for target setting for GHG emission reduction
to be best practice. Thus we in general follow the recommendations of
the NZAOA for setting intermediate decarbonization targets. While
the NZAOA Target Setting Protocol (NZAOA TSP) defines targets for
engagements, sectors and financing the transition, we display these as
actions in line with ESRS E1. The NZAOA TSP was aligned with all
relevant stakeholders and vetted in a public consultation and was
developed with a strong reference to the 1.5°C no/low overshoot
climate scenarios in the latest report of the IPCC. For further
information, please see section "The scientific basis for establishing
net-zero targets" of the NZAOA TSP¹.
Target setting for GHG emission reduction -
introduction
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Annual Report 2023 - Allianz Group
1_AOA-Target-Setting-Protocol-Third-edition.pdf
736.8
66
(€ bn)
mnt CO₂e
22.6
166.6
22.4
165.4
33.5
ca. 25.0
kg CO2/m²
15.0
110.6
(50.0)
(50.0)
108.1
24.9
64.7
14.0
12.5
mnt CO₂e
26.1
192.2
54.0
t CO2e/€ mn
invested
39.9
294.2
Delta Target 2030 vs
Baseline 2019 (%)
Baseline year 2019
Current year 2023
Target 2030
Unit of targets
% of total
Book value 2023
Equity investments designated at fair value through other
comprehensive income
We believe our intermediate climate targets will help us realize
growth potential. For commercial insurance in particular, our transition
plan includes a target to achieve 150% profitable growth in revenues
from renewable energy and low-carbon technology solutions by 2030.
Annual Report 2023 - Allianz Group
Coverage
Book value
invested)
(%)
(€ bn)
emissions
(mn t CO₂e)
Carbon intensity
(t CO₂e/€ mn
invested)
Coverage
(%)
294.2
20.1
64.7
Absolute financed
90.6
16.6
75.1
166.6
36.7
204.1
99.5
130.8
29.5
192.6
99.7
110.6
0.4
194.3
Carbon intensity
(t CO₂e/€ mn
emissions
(mn t CO₂e)
Book value
(€ bn)
The ASU is published in the Allianz Corporate Rules Book and is
available to all relevant internal stakeholders.
Investments
Current emissions
For our proprietary investment portfolio, we are calculating financed
GHG emissions according to PCAF guidance and expanding the
methodology to asset classes not yet covered by PCAF. Although we
aspire to calculate financed GHG emissions for as much of our
portfolio as possible, we are constrained by the development of
methodologies and availability of data. Nevertheless, we remain
committed to progressively expanding the coverage of our portfolio
over time.
We do not calculate financed GHG emissions for covered bonds,
ABS/MBS and cash as there is no methodology available yet for these
asset classes. To see these asset classes, please see lines "no
methodology" in table "Financed emissions".
We calculate three types of financed GHG emissions defined by
the underlying investment: 1) Corporates, which includes all investees
with a balance sheet, i.e., - in PCAF terminology - listed equity and
corporate bonds, business loans and unlisted equity, as well as project
finance; 2) Real Estate, which includes commercial real estate loans
and real estate equity investments; and 3) Public Debt, which includes
sovereign debt, sub-sovereign debt, and supranational debt. As there
is no specific PCAF guidance on carbon accounting for sub-sovereigns
and supranationals, we have adapted the methodology for sovereign
debt to these two asset classes. We do not cover 100% of our exposure
in these three types of financed GHG emissions (i.e., Corporates, Real
Estate and Public Debt) due to the lack of relevant emission data
information. To see this data coverage gap, please see column
"coverage" in table "Financed emissions".
For a detailed description of our carbon accounting
methodology, please refer to our explanatory notes on the Allianz
company website.
In 2023, our total financed GHG emissions were 57.3 mn t CO₂e
compared to 46.4 mn t CO₂e in 2022 (see table "Financed emissions").
The increase was driven in particular by adding new asset classes like
sub-sovereigns, supranationals, and infrastructure debt.
Our total coverage of financed GHG emissions increased from
59.6% to 62.1%.
The table below shows the book value, financed GHG emissions,
and coverage (i.e., percentage of book value for which financed GHG
emissions are calculated) per carbon footprint methodology and is
split into IFRS 9 asset classes.
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Financed emissions
Corporates
Public debt
Real estate
No methodology yet¹
Total
Corporates
Public debt
Real estate
2023
2022
Absolute financed
9.7
22.9
35.0
0.3
0.0
49.3
69.1
231.5
No methodology yet¹
Debt investments measured at fair value through other
comprehensive income
534.7
53.9
93.5
71.8
515.6
42.6
128.4
Corporates
25.3
1.1
48.7
90.8
21.2
1.1
52.4
Real Estate
0.7
0.0
2.1
No methodology yet¹
1.0
0.0
The objectives of the Sustainable Insurance section of the ASU
include: developing sustainable business opportunities, building
resilience and anticipating future developments and adapting to
them, safeguarding against reputational risks, and taking adequate
corporate responsibility for our planet.
1.0
0.0
10.5
74.3
165.4
343.3
736.8
57.3
77.6
62.1
703.3
46.4
115.8
59.6
237.6
18.1
70.5
94.5
161.9
14.5
77.3
159.3
35.8
204.9
99.5
122.3
28.1
194.9
68.6
6.2
All relevant aspects of our insurance portfolios are governed by the
Allianz Standard for P&C Underwriting (ASU). Ownership and
execution of the Standard sits with Global P&C and is governed by the
Group Underwriting Committee (GUC). However, ultimate
responsibility resides with the Allianz SE Board of Management. The
ASU governs the rules and principles for P&C Underwriting within the
Allianz Group and is an integral part of the overall Group risk
architecture. Its rules and principles focus on underwriting sustainable
and profitable business. The ASU includes our principles for
sustainability and codifies roles and responsibilities within operating
entities related to the decarbonization of underwriting portfolios.
Insurance-specific policies
Additionally, to support the implementation of the overall
decarbonization strategy for motor retail, a dedicated team within
Global P&C at Allianz SE oversees target and strategy development,
portfolio steering, reporting and monitoring, data maintenance, and
quality assurance.
To address the remaining 30%² of the emissions we will use high-
quality carbon removal solutions.
Key levers for GHG emission reduction will be the areas of
Renewable Electricity, Buildings, as well as Fleet, Business Travel, and
Procurement. In the area of Renewable Electricity, we source 100%
renewable electricity from 2023 onwards and implement energy
efficiency measures.³ For Buildings, we have developed a Buildings
Standards Catalogue that includes various measures addressing GHG
emission reduction. For Fleet and Business Travel, we aim to shift to a
fully electric corporate car fleet by 2030 at the latest, achieve a 40%
reduction of GHG emissions from travel activities by 2025 compared to
a 2019 baseline, and purchase sustainable aviation fuel (SAF) in order
to address GHG emissions from air travel. For Procurement, we will ask
100% of global framework vendors in our supply chain that provide
services globally to establish a public commitment to net-zero GHG
emissions in line with the 1.5 °C path by 2025.
Carbon removal and carbon credits
In the past reporting year, we did not use carbon removal and
associated carbon credits when accounting for our GHG and the
associated reduction targets. Our net-zero targets will likely require the
use of atmospheric carbon removal in the respective net-zero targets
year. For this, we expect to only use high-quality carbon removal. Our
focus remains on GHG emission reductions.
Governance
Ultimate responsibility for all matters relating to sustainability,
including climate, resides with the Board of Management of Allianz SE
as the Group's parent company. This includes climate change and the
net-zero transition plan, which has been approved by the Board of
Management. Climate-related matters are typically part of all Group
Sustainability Board meetings, which are held at least quarterly. For
further information, please refer to the section "Corporate
sustainability governance and strategy".
Our Climate Change Strategy is rooted in the established
sustainability governance (for further information, please refer to the
section "Corporate sustainability governance and strategy") and its
associated policies on sustainability, climate, and the energy sector.
For further information, please refer to the section "Overarching
Policies".
Progress
In the following sections on insurance, investments, and operations, we
report on the details and progress of the implementation of the
transition plan.
Overarching policies
The Allianz sustainability approach integrates climate and
sustainability-related considerations by applying group-wide
corporate rules and sustainability instruments across underwriting and
investment activities. Key processes include the internal Allianz
Standard for Reputational Risk Management (AS RRIM) and other
corporate rules, such as the Allianz Standard for P&C Underwriting
(ASU) and Allianz ESG Functional Rule for Investments (EFRI).
The AS RRIM has been in place since 2013 and establishes a core
set of principles and processes for the management of reputational
risks and sustainability issues within the Group. It is owned by Group
Risk, authorized by the Group Finance and Risk Committee and
acknowledged by the Allianz SE Board of Management. The objective
of the Standard is to proactively identify business decisions and
business activities with the potential to trigger reputational issues and,
where appropriate, take action to minimize their probability and/or
impact. This Standard is mandatory for all operating entities of the
Allianz Group. For 2024, the intention is for it to be superseded by the
Allianz Standard for Communications and the Allianz Standard for
Integration of Sustainability.
Furthermore, Allianz has four energy-related guidelines in place:
thermal coal, oil sands, oil & gas, and renewable/low-carbon energy.
The guidelines are owned by Global Sustainability and authorized by
the Allianz SE Board of Management. They apply to proprietary
investments and P&C insurance, including facultative reinsurance.
Their common goals are to contribute to the transition from fossil fuels
to cleaner energy technologies, to manage sustainability and
reputational risks, and to achieve our net-zero related targets. The
three fossil fuel guidelines define business practices and business
models where we do not provide further services or investments along
defined technical exclusion criteria. They typically differentiate
between single-site restrictions which apply to stand-alone P&C
covers as well as direct project investments - and restrictions on
company-level exposures. Purely to support renewable and low-
carbon technologies, we allow ring-fenced coverages of and
investments into projects and subsidiaries of companies that are
otherwise restricted due to the fossil-related energy guidelines. This is
described in the Renewable/Low-Carbon Energy Guideline. The
guidelines were introduced in 2015 (thermal coal), 2021 (oil sands),
2022 (oil & gas), and 2023 (renewable/low-carbon) respectively.
-
1_The strategy review for own operations is currently ongoing and will be updated accordingly in 2024.
2_Remaining 30 % means, that if we achieve 70% reduction by year-end 2030, we will remove 30%. If the
reduction target is overachieved, then we remove the remaining gap to 100%.
3_For more details about the sources of the renewable electricity, please refer to section "Energy and
consumption mix".
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As in previous years, we report on the exemptions granted based
on the rules outlined in the guideline to companies breaching thermal
coal thresholds. In 2023, we received two coal-related requests from
our operating entities to exempt corporate clients from company-
based restrictions related to both P&C insurance and proprietary
investment segments. Of these, one was granted and one was not
granted. The granted one was a 1.5 °C exemption, which means that
the company was assessed to be on a 1.5 °C pathway despite its coal
exposure. The option to grant a grace period of one year for
companies aligned with well below 2 °C was granted four times in
2022. As of January 2023, this was no longer possible as per the
guideline's rules. The requirement to refer business for so-called green
exemptions i.e., permission to underwrite or invest in renewable
energy projects of companies restricted based on the coal guideline,
for example was removed in February 2023 when the new
Renewable/Low-Carbon Energy Guideline was published. As a result,
there is no further reporting on those exemptions.
-
-
The publicly available 5th version of the Allianz Sustainability
Integration Framework (formerly the ESG Integration Framework) on
the Allianz company website, lays out these main internal policies and
processes related to our overarching sustainability risk approach.
The subsequent sections will outline specific policies applicable to
proprietary investments and insurance.
Insurance
By 2025 we aim to reduce GHG emissions per employee by 50%
versus a 2019 baseline across Scope 1, Scope 2, and selected Scope 3
emissions (for further information, please refer to the section "Own
Operations"). For year-end 2030, we target GHG emission reductions
of 70% and for year-end 2029, 65%¹ versus a 2019 baseline.
Current emissions
As the specific definition of net-zero is still evolving for financial
institutions and we anticipate CSRD requirements, we are no longer
referring to the 2030 target for our Own Operations as a net-zero
commitment. We will instead refer to it as a 2030 intermediate target.
The rest of the decarbonization and removal targets for Own
Operations remain as communicated in the Inaugural Net-Zero
Transition Plan.
In order to achieve GHG emission reductions in the companies in
our portfolio, we cultivate all types of engagement: bilateral,
multilateral, and asset manager engagement. As part of our
multilateral engagement activities, the transition of whole sectors is a
particular focus.
C_Group Management Report
Climate policy dialogue
We can achieve our targets only jointly with public policy and the real
economy, as the necessary changes require broad support. For
instance, sufficient frameworks and market incentives are required to
bring down demand for emission-intensive products and to allocate
capital in line with a 1.5 °C trajectory. The private sector, including
insurers, can play an important role in raising awareness and making
the business case for getting on track to limit global warming. To that
end, we also work with policymakers and regulators to support
sustainable financing and achieve the goals laid down in the Paris
Agreement. We are advocating for global effective climate policy
which should achieve the following:
Embedding "net-zero by 2050" in short and long-term
governmental climate targets, climate strategies, and emissions
reduction plans, following the latest climate science in line with
pathways of no or low overshoot of a 1.5 °C temperature rise.
Developing sector policies to promote a swift and socially fair
transition, including the development of more granular short-,
medium- and long-term net-zero infrastructure plans.
Implementing stringent carbon pricing to internalize the external
costs of pollution, including a phase-out of direct and indirect fossil
fuel subsidies.
Protecting nature and supporting regenerative forestry and
agriculture. Supporting and redirecting fossil fuel-related subsidies
to scale up new technologies that will provide solutions in hard-to-
abate sectors, e.g., carbon capture and storage, and green
hydrogen.
Promoting mandatory assured climate disclosure, including
transition plans, GHG emissions, associated reduction targets, and
alignment with 1.5 °C trajectories, ideally aligned internationally.
Ensuring sustainable finance regulation that provides a defined,
science-based, and reliable framework via a common taxonomy
of sustainability, clarification of asset managers' duties, inclusion
of sustainability in prudential regulation, and enhanced
transparency of corporate reporting.
1.5 °C alignment of targets
Our emission targets are aligned with credible, science-backed climate
scenarios – such as those provided by the IPCC¹ – that limit global
warming in 2100 to 1.5 °C with only a limited or no overshoot of this
temperature during this century. While the individual scenarios differ
in their assumptions and narratives, they agree on a necessary
emission reduction range for CO2 emissions of 36% to 69% from 2020
to 2030, with a median reduction of 48%.² All our existing sub-portfolio
targets with a global focus are in line with this. For our motor retail
portfolio, the targeted reductions, which apply to nine European
markets, are aligned with respective net-zero pathways.³
Our target year 2030 is defined as year-end 2029. Our base years
for the 2030 targets in proprietary investments and operations
continue to be the base year 2019 (building on existing 2025 targets).
This also allows us to filter out the temporary effects of the COVID-19
pandemic. The approach taken for our P&C insurance targets was to
focus on the most recent year for which data was available, this being
2022.
Decarbonization levers
For our portfolio targets, there are generally two levers for
decarbonization, that is reducing GHG emissions: either our portfolio
companies - i.e., the customers we insure or the companies we invest
in - reduce their GHG emissions, or we change the composition of our
portfolio over time.
The former relies directly on GHG emission reductions in the real
economy, which is not under our control. The latter can also occur
naturally as part of typical insurance and investment business cycles in
different lines of business, sectors, and individual customers, and is
generally more under our control.
We aim to achieve GHG emission reductions through actions such
as engaging customers, increasing exposures to lower-carbon
business, and setting targets for lower-carbon technologies, as well as
reducing our exposure to defined fossil-fuel business such as thermal
coal. For our own operational GHG emissions, the main levers for
reduction are Electricity, Buildings as well as Fleet, Business Travel, and
Procurement. These elements are described in more detail in the
following sections.
We apply both absolute and intensity GHG emission targets.
Absolute GHG emissions refer to an absolute amount of GHG
emissions associated with the respective business activity such as
investing or insuring; absolute GHG emission targets seek to reduce the
absolute amount of GHG emissions. GHG emission intensity and
associated targets, on the other hand, harmonize the GHG emissions
through a denominator that relates to a business activity. For example,
GHG emissions per million invested or per million of premium.
Property-Casualty insurance
The GHG emissions associated with our commercial portfolio will be
reduced as we continue the planned implementation of our
underwriting guidelines for coal as well as for oil and gas in line with
announced thresholds and timelines. Our portfolio will also change as
we continue to expand our risk appetite in the segment of renewable
energy, low-carbon, and transition technologies. We will also benefit
from GHG emission reductions in the real economy that our corporate
customers pursue as part of their own net-zero strategies as required
by governments, investors, and other stakeholders, and in addition,
enabled by us as an insurer. A supportive policy environment is crucial
here and is an important lever both for the net-zero transition in the
global economy and for our target achievement.
The GHG emissions associated with our motor retail portfolio are
planned to be reduced through various initiatives; firstly, by increasing
our share of battery electric vehicles for our markets in scope. It is also
clear from market research that customers want to drive less, so we will
encourage sustainable behaviors by providing offerings that reward
these lifestyle changes. Another key lever will therefore be providing
further incentives for reducing GHG emissions via mileage-based
product offerings. When considering potential initiatives we took into
account future projections in each of the countries for which we have
set targets, including energy usage, vehicle usage and vehicle types.
Our incentives will therefore balance the improvements we expect to
see in the respective markets with Allianz actions aimed at closing the
gap to our stated targets. We will therefore actively steer our in-scope
portfolios to be more sustainable whilst benefiting from changes we
predict to observe in market behavior.
We will also engage with customers to support their transition to
electric mobility and meet their changing needs. We are committed to
offering comprehensive insurance products for battery electric
vehicles and the related ecosystem, and to supporting our customers
in transitioning to new forms of mobility.
1_6th Assessment Report. Further scenarios used include the IEA's Net-Zero by 2050 and the One Earth
Climate Model.
2_For GHG emissions, the range is 34 to 60, with a median of 43.
3_Target applies to the most relevant markets for Allianz, where adequate and reliable data is available.
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Proprietary investment
Our investment management function allows us to influence our
portfolio allocation by setting targets and frameworks for our asset
managers. These include defining concrete decarbonization targets
for individual mandates, excluding certain high-emitting companies
without reduction plans, and increasing target volumes for investments
in climate solutions.
Own operations
59
According to the GHG protocol, reporting on emissions associated with
insurance underwriting activities is optional. In our motor retail and
commercial insurance portfolios, we have made important progress in
measuring insurance-associated emissions and we set inaugural
emission reduction targets in 2023. For these targets, we follow the
methodology of the Partnership for Carbon Accounting Financials
(PCAF) Insurance-Associated Emissions Standard.¹
re/insured customer or asset. The attribution factor determines what
share of the absolute emissions of an insured customer or asset is
attributable to re/insurance.
0.14
1.47
0.26
2.10
(45.0)
(30.0)
1_Motor retail target is CO2 emissions only, not CO₂e, to be consistent with the data which is
currently available.
Decarbonization levers
Insured customers decarbonization
In the commercial insurance business, our aim is to drive
decarbonization across all industry sectors and partner with our
customers on their net-zero journeys by leveraging collaboration,
sustainability expertise, and best practice, as well as our influence as a
major global insurance company.
To this end, we will proactively approach customers to foster
dialogue and encourage a shift toward science-based net-zero
strategies. Firstly, each year we will engage with the top 100 customers,
selected by premium size and average industry sector emission
intensity, who do not currently have an emissions reporting or a
disclosure approach and are therefore currently not in scope for our
emission reduction target. By taking this step, we are endeavoring to
raise awareness for increased transparency and data exchange and
ultimately aiming to close the GHG reporting gap in our portfolio.
Secondly, we will engage with customers within the transportation
industry specifically aviation and marine - by leveraging best-
practice exchanges on decarbonization strategies for these sectors.
Thirdly, we will seek dedicated exchanges with two to three companies
per year on their net-zero strategies. For this engagement category, we
will screen our portfolio to identify high-emitting companies who have
not yet developed science-based net-zero strategies. Sustainability
teams within AGCS will support in the selection of engagement
candidates and prepare the engagement dialogues, which will be
conducted jointly with the distribution and underwriting teams.
For motor retail insurance, we will also actively engage with our
customers to encourage the transition to net-zero. We aim to engage
with 20 million current and potential customers by 2030 to support
their transition to electric mobility, mainly through Allianz-developed
online platforms, newsletters and advertising. The 20 million target
reflects the current and estimated future number of customers in the
markets defined as in scope, who do not own a battery electric vehicle
(BEV). Engagement will include focusing on the benefits of switching
to electric mobility and the practicalities of doing so, for example home
charging infrastructure and insurance options.
To increase our share of sustainably-minded customers, we will
offer mileage-based products to reward customers who are actively
seeking to reduce their emissions. Our aim in offering such solutions is
to encourage change across the insurance sector in how we, as an
industry, approach motor insurance.
By offering mileage-based products, we will ensure fair and risk-
adequate pricing for our customers that aligns with our technical
excellence program. Increasing our market share of BEVS will enable
us to collect more data and thus improve the accuracy of our risk
models. We are committed to understanding the risks, gathering data,
and being actively involved in research in order to ensure our net-zero
plan invests in society to the benefit of all.
To support the implementation of our actions, a dedicated team
within Global P&C at Allianz SE will support engagement activities,
which will be achieved in collaboration with OES.
Portfolio steering
Furthermore, for commercial portfolios, we are committing to actively
supporting the net-zero transition by fostering profitable growth and
scaling up of renewable energy, low-carbon and other transition
technologies that are a key element of the net-zero transformation.
Concretely, we aim to profitably grow revenues in Property Damage
(PD) and Business Interruption (BI) coverages related to these
transition solutions ¹ by 150 % by 2030 compared to 2022.
In addition, we are applying the energy-related guidelines as laid
out in the section "Overarching Policies". The focus on these high-
emitting sectors is an important lever and contributor to the targeted
reduction of emissions intensity at portfolio level.
Restricted companies are listed in the Global ESG Risk List, which
is available to all underwriters globally. Training on the application of
the policies is offered regularly to support underwriting teams with
their implementation.
26.9
Additionally, to support the implementation of our
decarbonization strategy for commercial lines, we have set up two
dedicated sustainability teams in the AGCS Chief Technical Office
(CTO). The Sustainability Governance team oversees the
implementation of portfolio strategy, target setting, monitoring, and
reporting. The Sustainability Solutions team focuses on business
growth and expansion in line with our "insuring the transition" actions.
Both teams work closely together and support our distribution and
underwriting teams. In addition, our Allianz Risk Consulting teams
continue to provide expertise on emerging technology requirements
and challenges.
To further support the transition to net-zero within our motor retail
portfolio, we aim by 2030 to insure a larger percentage of BEVs in the
Allianz portfolios compared to the share of BEVS in the respective in-
scope markets.
To enable this portfolio change, we are committed to offering
comprehensive insurance products for BEVS and the related
ecosystem, in order to support our customers in transitioning to this
new technology. Our ambition is to be a market leader for BEVS and
we have implemented a mobility strategy in order to support this
transition. This strategy is an ongoing project with key deliverables and
drives our ambition to be a market leader through strategy
development, global exchanges, monitoring, and reporting.
A workstream within the technical area oversees the
implementation of our mobility strategy. This workstream has a focus
on technical leadership in electric vehicles, supporting our markets in
the development and implementation of action plans to meet our
targets, as well as ensuring the regular delivery and monitoring of key
performance indicators. It also utilizes Allianz's global presence
through regular exchanges with OEs as part of internal Mobility Smart
Circle meetings and optimizing the pooling of mobility data across
countries, leveraging the Group's expertise.
1_Transition solutions include the technologies mentioned in the Allianz Renewable/Low-Carbon Energy
Statement, as well as waste to energy, carbon capture and storage (CCS)/direct air capture, battery
storage and grid-stability-related investments, smart grids and electrification, electric transportation, EV
and battery manufacturing plants, electric mass transit infrastructure construction (rail), certified green
buildings, industry projects related to energy transition (ammonia and bio-based/synthetic fuels), and
green shipping. We have started working on harmonizing terminology and underlying eligible
technologies related to the targets for climate solutions (currently used for proprietary investments) and
transition solutions (currently used for P&C insurance). We expect to conclude this work and report on it
in 2024 fiscal year.
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mnt CO₂¹
According to the standard, insurance-associated emissions (IAE)
for commercial lines are calculated by multiplying an attribution factor
(i.e., for commercial lines this is the insurance premium divided by
insured customer's revenue) by the absolute GHG emissions of the
mn GWP
Baseline
2022
For the portfolio in scope of the emission reduction target for
commercial insurance, the baseline insurance-associated emissions in
2022 was 1.00 mn t CO2e and the insurance-associated emission
intensity was 0.26 kt CO₂e/€ mn GWP.2 Given the lack of reliable and
comparable data on customer Scope 3 emissions, our commercial
baseline currently only covers our customers' Scope 1 and Scope 2
emissions.
For motor retail, the calculation considers the Scope 1 and 2
emissions of insured vehicles within a portfolio and multiplies them by
an attribution factor. The attribution factor represents the insurance
industry's share of the total cost of ownership of a vehicle, which
includes other costs such as depreciation, fuel, and maintenance. The
carbon emissions of the insured vehicles are multiplied by the industry
attribution factor (calculated by PCAF as 6.99 % for 2023) to calculate
the insurance-associated emissions.
For the motor retail portfolios covered by the emission reduction
target, the baseline for absolute insurance-associated emissions in
2022 was 2.10 mn t CO2³ (Scope 1 and Scope 2 emissions) in line with
the PCAF standard.
Overall GHG emission reduction target
For commercial insurance, we are setting an intensity target for the
sub-portfolio of large companies in all sectors, which is managed by
Allianz Global Corporate and Specialty. We are focusing on those
companies for which GHG emission data is available. For the 2022
baseline, this cohort represented 13% of the premiums in the
commercial segment for which emission accounting methodologies
are currently available. Our target is to reduce the emission intensity
of this sub-portfolio by 45% by 2030 against our 2022 baseline (see
table "2030 Targets for insurance-associated emissions").
4
Our target of a 45% emission intensity reduction for this sub-
portfolio refers to emission intensity as the main KPI and not to the
absolute insurance-associated emissions (in tonnes of CO2e). Emission
intensity shows the volume of customer-generated emissions
associated with every €1 million of premium we write (tonnes
CO2e/million EUR). While defining an intensity target allows us to
reflect the expected growth of our portfolio by 2030 in a dynamic way,
our targeted reduction is still within the scenario range of necessary
absolute reduction to limit global warming to 1.5 °C. For further
information, please refer to section "Transition Plan & Strategy". In
addition to factoring in expected portfolio growth, our target definition
was also informed by the anticipated real economy decarbonization,
which we modeled using authoritative scenarios such as the Stated
Policies Scenario (STEPS) of the International Energy Agency.
Our first intermediary target for commercial lines targets the sub-
portfolio with the largest climate impact and adequate GHG data
quality. This will allow us to steer our portfolio and measure our
progress based on reasonable and verifiable GHG emission data,
rather than overly relying on sector estimates.
For retail insurance, we are setting a target to reduce the absolute
carbon emissions within our motor retail portfolio. For the motor retail
portfolio, the target covers nine key European markets, namely:
Austria, Belgium, France, Italy, Germany, the Netherlands, Spain,
Switzerland, and the UK. Our target is to reduce the absolute carbon
emissions within our in-scope portfolios by 30% by 2030 against our
2022 baseline. Portfolios classified as in scope are aligned with the
PCAF standard for personal motor.
For the 2022 baseline, the in-scope portfolios within these markets
represent 55% of the motor retail premiums. The target focuses on the
most relevant motor markets for Allianz where the biggest impact can
be made. This includes where there is adequate and reliable data
available, in order for emissions to be measured and progress against
our target to be accurately tracked.
In addition, our target setting is aligned with limiting global
warming to 1.5 °C and was informed by the anticipated real economy
decarbonization, which we modeled using scenarios from external
data partners.
1_For further details on the methodology please refer to the explanatory notes on the Allianz company
website. An exception to the application of the PCAF standard is made for the calculation of Insurance-
Associated Emissions (IEAs) for insurance policies as defined in the Allianz Statement on renewable/low-
carbon energy, as the standard does not yet specify accounting rules for the measurement of IEAs related
to these types of assets.
2_With an average data quality score of 2.41. For more details on the calculation of the data quality score
following the PCAF standard, please refer to the explanatory notes on the Allianz company website.
3_With an average data quality score of 2.61. For more details on the calculation of the data quality score
following the PCAF standard, please refer to the explanatory notes on the Allianz company website.
4_In line with Lines of Business currently covered by the PCAF Standard. Scope coverage is unchanged
compared to the Inaugural Net-Zero Transition Plan. Share of premiums related to GHG reduction target
follows IFRS definition of gross written premiums and deviates from PCAF, which excludes external
acquisition costs; following PCAF definition of insurance premiums, scope coverage represents roughly
16% of the eligible premiums in the commercial segment. More details can be found in the explanatory
notes.
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63
33
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2030 Targets for insurance-associated emissions
Commercial
Retail motor
Delta target
2030 vs
Baseline
2022 (%)
Unit of
targets
Target
2030
kt CO₂e/€
To ensure we deliver on our targets, we have clearly defined roles
and responsibilities to allow for ownership of the topics and monitoring
of progression toward completion. Although targets are stated as
2030, there are clear internal interim timelines and reporting processes
that will allow for regular monitoring of progress.
The total GHG emissions arising from Allianz Operations were
136,448 t CO2e in 2023. Of that, 31,774 t CO2e result from Scope 1,
7,929 t CO2e from Scope 2, and 96,745 t CO₂e from Scope 3. Included
Scope 3 GHG emissions from categories 3.1, 3.3, 3.6 and 3.7 cover fuel-
and energy-related emissions, business travel, remote working, public
cloud, and paper use. Scope 3 GHG financed emissions which fall
under category 3.15 are excluded. For further information, please refer
to the section "Insurance Overarching" and the section "Investments
Overarching". For further details on 2023 GHG emissions and a
comparison to 2022 GHG emissions, please see table "Greenhouse gas
emissions".
Scenario
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- In addition to impacts derived from policy exposures, it may also become increasingly cost-prohibitive for Allianz to obtain
reinsurance coverages in line with our risk appetite and risk bearing capacity. Such developments might restrict our ability to
underwrite some risk exposures and – in extreme cases - precipitate an exit from certain insurance markets.
- Claims for liability coverages may also increase insofar as policyholders are considered negligent in protecting customers or other
third parties from damages caused by extreme weather events.
- Increases in the frequency and severity of claims are almost certain to occur across both retail and commercial P&C business lines.
This projection concerns not only property claims due to direct physical damage, but other coverages as well, such as those typically
contained within business interruption, accident, entertainment, and travel policies.
Underwriting
- Allianz is susceptible to financial market losses based on investment exposures to those companies and sectors most likely to be
impacted by the above developments.
- At a more general level, corporate bonds and equities may be impacted to various degrees depending on the sector and
geographic location. For example, floods, fires, droughts and heat waves can trigger large loss events in many different sectors, such
as agriculture, tourism, energy production, shipping and manufacturing. This injects a new source of risk and volatility into corporate
financial outcomes, which may challenge their ability to consistently deliver reliable profits or, in extreme cases, trigger instances of
bankruptcy. Ultimately these issues will be reflected in share prices and bond valuations.
- At a sovereign level, government finances may become strained through an ever increasing need to finance recovery and repair
efforts following catastrophic weather events. Over time this support may lead to a deterioration in the creditworthiness of sovereign
debt, further compounding losses via higher debt servicing costs, or in extreme cases may even lead to default scenarios.
Alternatively, governments may choose to invest in mitigation or adaption initiatives, however in many cases these solutions come
with high costs that may likewise place pressure on government finances.
- Within the real estate sector property valuations may increasingly be dependent on exposure to extreme weather events, both from
a macro- and micro-geographic perspective. The most exposed properties might experience higher losses from property damage, a
loss of rental income due to business disruptions and higher insurance and financing costs. While measures may be taken to help
mitigate the real estate impact of extreme weather events, such as strengthening structures against wind and flood damage, these
typically require costly investments. These issues also largely apply towards the construction and infrastructure sectors as well.
Investments
Risk driver
Main potential risk impacts
Context
event)
(acute physical risk
Extreme weather
Risk driver
Key climate change physical risks
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The above climate litigation drivers for investments may also adversely impact Allianz' risk profile with respect to Underwriting Risks.
Greenwashing, advances in climate attribution science, new and expanded regulations and an overall increase in climate-change
related litigation all introduce new and potentially significant legal exposures for many of Allianz' commercial policyholders,
especially those operating in high-emission sectors such as oil & gas, energy generation or transportation. Allianz risk exposures arise
from indemnity coverages for legal proceedings against these policyholders, in particular within the D&O and Liability lines of
business.
Underwriting
- Allianz is susceptible to financial market losses based on investment exposures to those companies and sectors most likely to be
impacted by the above developments.
Climate change is the primary driver behind a contemporary increase
in the frequency and severity of extreme weather events, which
trigger losses in the form of human casualties, physical damages and
disruptions to business or leisure activities.
- In addition to the costs or losses directly attributable to climate-change related regulations, companies also face legal exposures
for failure to comply. Against the backdrop of sweeping regulations and tight timelines for their adoption - which is unavoidable in
the light of nations' legally binding emission reduction commitments - it may prove challenging for certain companies or even entire
sectors to fully comply. This is relevant not only for operations and product design, but also climate-change related reporting and
disclosure requirements.
Climate volatility
(chronic physical risk
event)
A meaningful portion of economic activity is dependent on the climate
and susceptible to changes against the current status-quo. For
example, with respect to raw materials, a volatile climate may lead to
losses of arable land to desertification, losses of timber due to
wildfires, reduced fishery yields due to ocean acidification or water
scarcity that diminishes production capacity in high water use sectors,
such as the manufacturing of apparels and textiles.
The stress test covers both sides of the balance sheet by
measuring asset- or liability-specific stress impacts, as well as their
dependencies for a static balance sheet. We take into account a
period up to 2050, which is relevant both for the implementation of key
political and business strategies linked to the Paris Climate Agreement
and for the onset of increasing global warming and its negative
consequences. Impacts are estimated for market stresses, as well as
property-casualty and life/health underwriting stresses, using
NGFS1/IPCC² scenario-based data from various sources. NGFS
scenarios are selected for this analysis since they are compiled on
behalf of central banks and supervisory authorities for financial stress
testing, provide pathways for macroeconomic variables in a variety of
scenarios representing different levels of transition and physical risk,
and are available open source. IPCC Representative Concentration
Pathways (RCPs) are the starting point of well-established scientific
studies on the development of climate-related hazards in climate
change scenarios, which can be adapted for modelling underwriting
risks. All entities contributing to the Allianz Group's Solvency II model
The integrated climate change stress test presented in the following
section complements the holistic qualitative risk assessment with
quantitative information for a limited set of risks and risk transmission
channels. It demonstrates our continuing efforts to build capabilities
and capacities for quantitative climate change risk assessments and
gain experience with sizing balance sheet exposures to climate
change risks.
Approach
Quantitative assessment of climate change risks
For further information on mitigation measures to address and
manage risk impacts, please refer to the section "Conclusion".
When considering the above results, it is important to understand
that outcomes of this qualitative process are highly dependent on the
input of individual risk experts. Although the process leveraged
research and statistical information where possible, professional
judgment was applied in determining the impacts specific to Allianz.
Provided that professional judgment is subject to various forms of bias,
results are liable to change. In addition, the emergence of further
statistical and other fact-based research may also influence
conclusions.
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and frequency, the presumption is that adaptive measures will help
blunt impact severity in the longer term. This includes both adaptive
measures by external parties - such as regulations restricting or
encouraging movement away from disaster prone areas - and
mitigation measures by Allianz, such as improvements in the
management of insurance risk concentrations and the pricing of
insurance coverages.
In terms of the most relevant physical risks, acute physical risks are
likewise considered more significant over the short to medium term
than the long term. While this may run contrary to the understanding
that acute physical risks will continue to increase in both magnitude
Agreement is rigorously pursued. This reflects the view that a large
proportion of measures to address climate change will need to be
introduced in the next 5 to 15 years, which will constitute a
comparatively dynamic period of transition risk relevance.
Context
In terms of time frames, the assessment foresees transition risks as
more significant in the short to medium term than in the long term
under scenarios where alignment with the goals of the Paris
- Overall, while climate volatility risks are generally considered more long term in nature, if not carefully managed these
developments will increase the potential risk for Allianz of losing market share, premium income or profitability.
- For example, rising sea levels that make coastal areas more prone to flooding are likely to increase claims costs and expenses for
both retail and commercial property coverages. On the revenues side, necessary premium increases may not be able to fully capture
increased losses due to political and consumer pressure to maintain insurance affordability, while in the most exposed regions the
uninsurability of certain risks may cause a reduction in the total size of the insurance market.
- Insurance portfolios may experience consequential shifts in the risk profile for those regions or sectors with the highest exposures to
climate volatility, affecting both claims and insurance demand. In contrast to acute physical risks, these risks are not attributable to
individual extreme weather events, but rather reflect permanent trends or slow-developing climate change impacts.
Underwriting
- Allianz is susceptible to financial market losses based on investment exposures to those companies and sectors most likely to be
impacted by the above developments.
- Beyond manufacturing and raw material processing, temperature volatility may also adversely impact weather dependent sectors,
such as construction, tourism and sustainable energy generation.
-Companies may struggle to optimally price their goods against a backdrop of higher price volatility for their production inputs.
Participation in commodity markets to hedge against price volatility will likely come with a higher cost than in the past, as
commodity markets react to the volatility by increasing the risk premium on futures contracts.
- Resource availability will emerge as an increasingly important consideration in the capital investment decisions of companies
within certain sectors (e.g. manufacturing, timber, agriculture, fisheries). Volatility and scarcity risks in raw material inputs will
increase the required risk-adjusted return on such investments, which may lead to a higher number of boardroom decisions to forego
potential profit-generating opportunities (i.e. will trigger corporate retrenchment instead of expansion).
-An increased volatility in the availability - and therefore price - of raw materials has various implications at the individual company
level, especially for those companies whose value generation is primarily dependent on the processing of raw materials. Collectively,
these implications may have consequential impacts on overall economic activity.
Investments
Main potential risk impacts
Impacts beyond availability of resources include phenomena such as
permanent decreases in worker productivity due to frequent
heatwaves or a loss in attractiveness for those tourist destinations no
longer reliably providing the desired weather.
The above results demonstrate that the most relevant climate change
risks for Allianz as an organization relate to proprietary investments
and property-casualty underwriting. Risks related to company
operations and life/health underwriting are also present, albeit to a
lesser extent.
- Climate attribution science supports the assignment of responsibility for climate-change related damages to those companies
historically responsible for a large share of emissions, whether from the extraction and processing of fossil fuels or their consumption
via production or product use (e.g. energy generation, transportation). As the confidence levels of climate attribution models improve
they may increasingly be recognized by courts and juries in determining culpability and corresponding damages. Given past studies
suggesting a relatively small number of companies are responsible for an outsized share of total historical emissions - primarily
within the oil & gas and utility sectors - the legal exposure of these companies in particular may be quite significant.
- Companies may be subject to litigation arising from discrepancies between publicly declared long-term net-zero commitments and
emissions reductions that are realistically achievable based on actions taken, as well as general (vague) sustainability statements
deemed misleading or otherwise not supported by actual outcomes ("Greenwashing").
Investments
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For a summary of the main climate change risks faced by the Allianz Group
as well as corresponding impacts derived from the qualitative risk
assessment, please see tables "Key climate change transition risks" and
"Key climate change physical risks".
Results
The initial qualitative risk assessment was performed throughout
2022 at the Allianz Group level. During 2023, subsidiaries adapted the
assessment according to their local risk profiles. The outcome of this
exercise provides further insights into the relevance of climate change risk
drivers for both the Allianz Group as a whole and individual subsidiaries,
taking into account their specific business profile, geographical presence,
and locally applicable regulations.
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For each risk driver, a range of potential short- to medium-term and
long-term impacts for the insurance sector was considered, utilizing
knowledge acquired via a combination of desktop research and
consultation with subject matter experts both internal and external to
Allianz. Lastly, the potential magnitude of each of these risk impacts was
assessed against various dimensions of financial and non-financial
performance.
To achieve full coverage of Allianz's business footprint, the assessment
was structured along investments, property-casualty underwriting,
life/health underwriting, operations, with investments and underwriting
further subdivided into asset class and line of business, respectively. For
each area (or alternatively, asset class for investments, and line of business
for underwriting), the main relevant climate change-related risk drivers
were identified. In this context, a risk driver is any development or event
wholly or primarily attributable to climate change that potentially impacts
Allianz's risk profile. Such risk drivers can be categorized into technological,
regulatory, legal, and consumer behavior developments (transition risks),
as well as physical risks such as floods, drought, or wildfires.
The guiding objective of the qualitative climate change risk assessment is
comprehensiveness, whereby it is important to identify the many ways that
Allianz's risk profile can be adversely affected across all areas of the
business, in both the short, medium and long term. There are multiple ways
in which climate change may trigger risk events, so it is essential that this
understanding is established in enough detail for it to provide a solid basis
for applying risk-based prioritization with the aim of evaluating mitigation
effectiveness and management actions.
Key climate change transition risks
Approach
It should be noted that the analyses included in this report reflect our
current approaches to climate change risk assessments. Prevailing
methodological and data limitations as well as the high degree of
uncertainty inherent in any long-term analysis may still limit the decision-
making usefulness of some results. However, these approaches will
change over time as climate scenarios evolve in line with research,
developmental-stage methods improve further, and industry best
practices emerge.
developed to assess risks at the level of our balance sheet.
Complementary bottom-up modeling for the most relevant exposures
provides insights into climate change risks at the level of individual
investment or underwriting projects and may support contextualization of
results from top-down analyses.
When conducting outside-in impact scenario analysis, we use a
broader range of scenarios in terms of temperature outcomes and
characteristics. Qualitative assessments are conducted to explore to what
extent and across which channels climate change risks affect distinct
aspects of our business, unconstrained by the still limited availability of
quantitative models to fully cover all aspects of climate change across our
entire business activities. We deploy quantitative assessments for indicative
sizing of our exposure to climate change risks. A top-down approach is
When we conduct analyses that assess 1.5 °C scenario alignment, we
adjust our scenario selection using guidance developed by the NZAOA
that is focused on 1.5 °C scenarios with no or low overshoot of 1.5 °C of
warming. This limits the need to remove GHG emissions from the
atmosphere in the second half of the century.
We perform sensitivity and scenario analyses with time horizons up to
2050 and including scenarios ranging from 1.5 °C to 4°C of average
warming by the end of the century. While time horizons naturally differ
depending on the lines of business under consideration, the range of
scenarios we apply allows us to better assess a variety of risks associated
with climate change.
We apply various quantitative and qualitative strategies when
carrying out climate stress testing and scenario analysis. Considerations in
this regard include the long-term horizons over which climate change may
unfold and the high level of uncertainty over the direction of future climate
and economic developments. Our objective is to foster risk awareness,
build expertise in the assessment of financial risks from climate change,
test our business strategy resilience, and inform risk management and
business decision-making.
Climate change considerations are an integral part of our insurance and
investment strategy.
Strategy resilience, stress tests, and climate scenario
analysis
As well as being impacted by climate change, the choices Allianz makes
about how to conduct our business have an impact on climate change,
e.g., by investing in or insuring activities that either cause or reduce GHG
emissions. To manage potentially detrimental impacts on both the climate
and our business, we have committed to align our proprietary investment
and insurance underwriting portfolios to 1.5 °C climate scenarios.
As a large-scale institutional investor with significant interests in various
economies, companies, infrastructure, and real estate that might be
affected by the physical impact of climate change and the transition
to a low-carbon economy.
As an insurer providing insurance policies e.g., covering health
impacts, property damage, or litigation claims - and through changes
in the sectors and business models we underwrite.
The Allianz Group is exposed to risks that are influenced by climate change
in a multitude of ways. Our core business activities mean that we are
affected in two key ways, both of which can influence the ability of assets
to generate long-term value:
Qualitative assessment of climate change risks
Risk driver
Emerging technologies
Regulatory
developments
Main potential risk impacts
This trend is expected to continue as both litigants seek compensation
for climate related damages and activists turn to court systems in
response to real or perceived political and business failures to
adequately address climate change.
Climate change has emerged to become a source of potential high-
impact litigation, whether in terms of monetary losses (e.g. fines,
awarding of damages) or through court ordered changes in
defendants' business practices that negatively impact profitability or
- in extreme cases - viability of the business model itself.
Context
Climate litigation
Risk driver
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- Beyond the direct costs, regulations are likely to result in an increase in Allianz' operational complexity - for example in the form of
expanded data gathering and reporting requirements or additional sustainability considerations to be applied in the design,
marketing and service of products. This increased complexity in turn may drive an increase in the likelihood and severity of process
failures and accompanying operational losses.
- Allianz is committed to full compliance with all climate-change regulations applicable to the organization. The design and
implementation of processes needed to comply will require investments in employees, external expertise, 3rd party databases, IT
systems and more.
Operations
- Allianz is susceptible to financial market losses based on investment exposures to those companies and sectors most likely to be
impacted by the above developments.
- Furthermore, fragmentation of regulations at a regional and global level may lead to competitive disadvantages based on a
company's geographic location, especially for companies that are highly dependent on international trade. Competitive
disadvantages may result from either operating under a comparatively strict set of regulations relative to peers (e.g. carbon emission
limits), or conversely, due to regulations enacted to counter such environmental arbitrage (e.g. border taxes, restricted market access
for companies with poor climate practices).
-Increasingly complex and partly untested regulations promoting mitigation and adaptation to climate change may trigger
significant costs or losses for companies operating in high emission sectors, both in terms of implementation costs and as a direct
consequence of the policies themselves. Direct consequences include write-down costs, whereby as a result of a regulatory directive,
the projected financial return on company assets is diminished.
Investments
The introduction of new technologies may lead to more frequent and severe malfunctions, damage or process disruptions, especially
in the early application phase. Areas of particular vulnerability include electric vehicles and renewable energy technologies, such as
battery energy storage systems. In this context, providing insurance coverage may represent a challenge for insurers due to the lack
of historical claims data as a basis for modeling and pricing, which may trigger an increase in insured manufacturers' product liability
exposure.
Underwriting
-Allianz is susceptible to financial market losses based on investment exposures to those companies and sectors most likely to be
impacted by the above developments.
- Stranded assets are also possible, whereby technological breakthroughs render older, high emission technologies obsolete, in
particular when further squeezed by decarbonization-related regulations. Conversely, it is also possible that promising technologies
ultimately fail to deliver on their potential and earn a return on substantial investments in research and development.
- Companies that fail to adopt these new technologies may face future cost disadvantages via a combination of higher energy costs,
higher financing costs or costs from participation in carbon emissions trading schemes. On the revenues side, customers may become
adverse towards companies that fail to adopt climate-related technologies. This risk is particularly relevant for those business sectors
with a comparatively high emissions footprint, such as energy, transportation and construction.
Investments
Main potential risk impacts
To deliver on these commitments countries are enacting increasingly
stringent regulations designed to reduce carbon emissions, such as
the phase out of combustion engines, encouraging the adoption of
heat pumps or increasing the share of sustainably produced energy.
Given the swift and drastic reduction required, the impact of these
regulations is widespread across many business sectors, although
naturally most consequential for those responsible for the largest
share of emissions.
As signatories to the Paris Agreement, many countries have adopted
legally binding commitments in line with the Paris Agreement target
of holding the increase in the global average temperature to well
below 2 °C above pre-industrial levels and pursuing efforts to limit the
temperature increase to 1.5 °C above pre-industrial levels.
Although many of these technologies presently face challenges in
terms of quickly scaling up - whether due to prohibitive cost, an
inadequate supply of raw inputs, missing infrastructure, customer
skepticism or a need to further develop the technology itself - it is
expected that many of these issues will be resolved over time and the
technologies will become widely adopted.
Context
are in scope for the assessment. The main focus of the analysis is to
provide a best estimate for market value balance sheet impacts.
Scenarios
For the current implementation of the integrated climate change stress
test, we have considered five scenario narratives from the suite of
NGFS reference scenarios. The (1) Net Zero 2050 scenario is
determined by an orderly transition to net-zero emissions by 2050
following the target to limit global warming to 1.5 °C through stringent
climate policies at the cost of moderate economic strain in the initial
years. The (2) Below 2 °C scenario assumes an early and orderly
transition to a low-carbon economy, with an unambitious policy target
to limit global warming to below 2 °C by the end of the century. In this
scenario, policy action has limited impact on economic growth. In the
(3) Delayed Transition scenario, GHG emissions remain high until 2030,
when strong policy measures are taken to limit warming to below 2 °C.
Physical risks are relatively small in these scenarios over the 2050 time
horizon.
The (4) Nationally Determined Contributions scenario includes all
pledged climate policies, even if not yet implemented. However, these
pledged policies are still insufficient to limit global warming to below
2°C, leading to increasing physical risks. Accounting only for climate
policies that were in place before 2019, the (5) Current Policies
scenario is characterized by limited transition risks and high physical
risks, which start to become more visible over the second half of the
projection period.
Greenhouse gas emission targets
t CO₂e per employee
Scope 1, 2 and
selected scope 3
emissions¹
Emissions Target
Emissions Target
2030
2025
Target 2023
0.828
1.183
We expect in 2023 emissions at a
comparable level to 2022 with
some post COVID-19 corrections.
Our decarbonization and removal targets for Own Operations
remain as communicated in the Inaugural Net-Zero Transition Plan.
By 2025 we aim to reduce GHG emissions per employee by 50%
versus a 2019 baseline across Scope 1, Scope 2, and selected Scope 3
emissions (see section "Current Emissions"). For year-end 2030, we
target GHG emission reductions of 70% and for year-end 2029, 65%
versus a 2019 baseline. The target was defined in alignment with the
latest climate science. The progress towards our 2030 target is
assessed on a yearly basis as part of our annual reporting cycles. In
2023, we made progress by reducing our GHG emissions by 62% per
employee compared to our 2019 baseline.
Achievement 2023
1_Scope 3 includes fuel- and energy-related activities, business travel, remote working, paper and public cloud.
2_For more details about the sources of the renewable electricity, please refer to section "Energy & consumption mix".
Emissions current
year 2023
Emissions Baseline
2019
Delta Target 2030
vs Baseline 2019
Delta Target 2025 vs
Baseline 2019
Energy consumption & mix
In 2023, we had a total energy consumption of 1,574,357 GJ.
We achieved a 47% reduction in energy consumption in our office
buildings per employee against a target reduction of 20% by year-end
2025 against a 2019 baseline (2022: 32 % reduction).
100%¹ of the electricity we used in our office buildings and data
centers came from renewable, low-carbon sources (2022: 89%).
The above was achieved through a combination of green tariffs
(65.7%), expanding the use of on-site renewable technologies (0.2%),
and sourcing unbundled renewable Energy Attribute Certificates
(EACs) (34.1%). For a comprehensive overview of our energy
consumption and mix, please see table "Energy consumption and mix".
1_For more information, please refer to the section "Decarbonization levers - Renewable Electricity".
Our carbon footprint per employee was 0.9 tons
(2022: 1.0). This represents a 62% reduction (2022:
57%) against a 2019 baseline. This reduction was
mainly the result of sourcing 100% renewable
electricity² for our office buildings and data centers
and a reduction in our energy consumption, which
balanced increasing business travel post COVID-19.
As explained in the "Transition Plan & Strategy" section, anticipating
CSRD, we are no longer referring to the 2030 target for our Own
Operations as a Net-Zero commitment. We will instead refer to it as a
2030 intermediate target.
Own operations GHG emission reduction target
1_Not included in the calculation of total emissions.
2_Including fuel- and energy-related activities, business travel, remote working, paper and public
cloud.
C_Group Management Report
Greenhouse gas emissions
t CO₂e
Delta (%)
2.7
2023
2022
Gross Scope 1 GHG emissions
31,774
30,953
Gross market-based Scope 2 GHG
emissions
7,929
30,490
(74.0)
Gross location-based Scope 2 GHG
emissions¹
112,228
138,339
(18.9)
Gross Scope 3 GHG emissions
(selected)²
96,745
92,467
4.6
Total emissions from own
operation and further value chain
136,448
153,910
(11.3)
69
Impact on and impact of our business
0.894
(65.0) %
Nationally Determined Contributions
Current Policies
Delayed Transition
Net Zero 2050
Below 2 °C
%
Estimated maximum adverse cumulative market value balance sheet
impacts in NGFS/IPCC scenarios relative to a baseline scenario
without climate change
An excerpt from the aggregated stress test results is shown in table
"Estimated maximum adverse cumulative market value balance sheet
impacts in NGFS/IPCC scenarios relative to a baseline scenario
without climate change". The complete analysis covers the period from
now until 2050, whereas the excerpt here shows the estimated
maximum adverse impacts over the 5-20 year period, taking into
account, amongst other considerations, that the current NGFS
scenarios are primarily aimed at modeling long-term climate-
economic relationships.
more material losses as impacts from physical risks increase and
outweigh transition risk impacts.
Determined Contributions scenarios are expected to entail even
In the absence of stringent climate policy implementation, stress
impacts are relatively muted until the second half of the time
horizon for the Current Policies scenario, similar to the Delayed
Transition scenario, where stress impacts from physical risk phase
in bringing about moderate cumulative market value balance
sheet impacts of approximately (5.5) % in the long term. Beyond
this period, both the Current Policies and the Nationally
Initial losses from transition risk in the Nationally Determined
Contributions scenarios, comparable to losses in the Below 2°C
scenarios, turn into losses from physical risk in later years that
gradually increase over time.
In the Delayed Transition scenario, very low stress impacts
materialize in initial years, followed by high cumulative market
value balance sheet impacts of (13.6) % after 2035 with the start
of the delayed implementation of a policy ambition that is
comparable to that in the Below 2 °C scenario. Economic recovery
is rather slow in this scenario.
The orderly implementation of the not too ambitious policy target
in the Below 2 °C scenario comes with a low transition risk initially.
While stress impacts in the long term in the Below 2 °C scenario are
comparable to stress impacts in the Net Zero 2050 scenario, an
overall negative trend compared to the 1.5 °C scenario is
predicted in the second half of the century due to higher physical
risk associated with higher mean temperatures.
Conclusion
Moderate cumulative market value balance sheet impacts are
realized in the Net Zero 2050 scenario, where the initial economic
strain subsides rapidly until 2030.
In terms of the aggregate market and property-casualty and
life/health underwriting stress impacts, two key overarching
observations may be derived. Firstly, with the exception of the Delayed
Transition scenario, cumulative market value balance sheet impacts
over the first 5-10 years of the projection period are largely determined
by the different levels of transition risk in the scenarios, whereas
impacts from physical risks are small in comparison but increase
gradually. Secondly, market stress is the largest contributor to overall
cumulative market value balance sheet impacts, exceeding the
combined contribution from property-casualty and life/health
underwriting stresses by a considerable margin.
Results
C_Group Management Report
Annual Report 2023 - Allianz Group
3_Gasparrini et. al. (2017) Projections of temperature-related excess mortality under climate change
scenarios, Lancet Planet Health 1(9):e360-e367.
77
1_NGFS: Network for Greening the Financial System.
2_IPCC: Intergovernmental Panel on Climate Change.
Impact estimates from the integrated climate change stress test
rely on scientific research and scenario data that is available and
considered relevant as of the current point in time. Nevertheless, the
magnitude of outcomes has to be treated with caution when
accounting for the significant uncertainties inherent in climate change
modeling and the crucial role of assumptions in long-term projections.
These include, but are not limited to, uncertainties in the scientific
studies underlying the projected distributions of NatCat events,
uncertainties in the modeling of macroeconomic impacts of physical
risks, as well as uncertainties due to the limitations of climate change
scenarios in capturing environmental, social, and economic cascading
effects or tipping points. Uncertainties around assumptions for the
counterfactual scenario can also have a critical impact on results.
To separate the impact of climate change risk from trend growth,
stress levels are assessed relative to a baseline or counterfactual
scenario as defined by the NGFS, a hypothetical scenario in which
neither progression of climate change nor the implementation of
transition measures is assumed. Furthermore, the calculation of stress
impacts is based on instantaneous stresses on the static year-end 2023
balance sheet, without adaptation or mitigation actions from Allianz
and its business partners. In particular, internal measures such as
contract repricing, deployment of reinsurance strategies, or portfolio
steering have not been taken into account, as well as external
measures such as public investment in flood defences. Impact
estimates from the different stress test modules are integrated based
on a matching of global mean temperatures for 2050 between NGFS
and IPCC scenarios as well as consideration of the overall scenario
characteristics. No diversification between market stresses and
underwriting stresses is assumed for the aggregation.
liabilities for biometric risk exposure. The property-casualty
underwriting stress module relies on projections for Average Annual
Loss under RCP scenarios for a selection of the most climate change-
relevant country and peril combinations (i.e., inland flooding, hail and
tropical cyclone) developed by NatCat modeling experts at Allianz Re.
The property-casualty underwriting stresses are applied to the best
estimate of liabilities for NatCat risk exposures.
NGFS scenarios are used to obtain financial market variables for
application in the market stress module of the integrated climate
change stress test. The market stresses themselves are applied to
market values of both assets and liabilities of in-scope entities, where
a simplified approach is used to assess the mitigation of stress impacts
due to policyholder profit sharing. Scenario variables used in the
property-casualty and life/health underwriting stress modules are
derived from hazard models that are contingent on the IPCC's RCPs
2.6, 4.5, 6.0, and 8.5. For the life/health underwriting stress module,
stress variables are based on a study by Gasparrini et al.3 that projects
temperature-related excess mortality under various heat and cold
pathways and their net change up to the end of the century. The
life/health underwriting stresses are applied to the best estimate of
Methods, assumptions & limitations
Expounding upon the above general observations at the individual
scenario level, we note the following:
Long-term
5-20 years
(2.8)
(2.7)
(13.6)
(5.2)
(5.5)
It is apparent from a review of the results of the qualitative risk
assessment and consideration of potential risk responses that while
some new mitigation measures (such as processes, controls, strategies)
tailored to climate change may be necessary, the current risk
management approaches are generally either adequate, or only
require smaller modifications. For example, with respect to property-
casualty underwriting, well-established techniques such as premium
adjustments, changes in coverages, exclusions, expansions, or revisions
to risk limits can all be effectively utilized. Despite this conclusion, the
consequences in areas where climate change is set to fundamentally
transform insurance markets are less predictable and require strategic
attention. Fundamental transformation includes aspects such as
coverage affordability, the shrinkage of existing markets, or the
emergence of new markets, as well as products or coverages
encompassing difficult-to-price risks (e.g., similar to industry
experience around the emergence of cyber insurance).
(50.0) %
Annual Report 2023 - Allianz Group
C_Group Management Report
Energy consumption and mix
As of 31 December
2023
2022
Delta (%)
Energy consumption
from office buildings
GJ
1,232,510
1,578,675
(21.9)
Energy consumption
from data centers
GJ
286,312
325,212
(12.0)
GJ
1,574,357
Annual Report 2023 - Allianz Group
78
We will continue to refine our climate change risk assessments in
line with the evolving understanding of assessment methodologies
and improving data availability and quality, while also accounting for
a shifting climatic and political baseline.
Addressing the immediate effects of climate policy
implementation requires the incorporation of climate change-specific
measures. These include long-term strategies aimed at aligning
investment and insurance portfolios with climate policy targets, as
formulated in our transition plan, see the section "Transition plan &
strategy". However, successfully managing an economic crisis that may
unfold as an indirect effect of climate policy implementation - e.g., in
the Delayed Transition scenario - necessitates having well-established
mitigation measures ready and operational, such as limiting or
hedging equity and corporate bond exposures, or effective asset
liability management.
From the quantitative perspective, the overall impact estimates
derived from the integrated climate change stress test are considered
to be within Allianz's risk tolerance, considering both the magnitude of
predicted losses and the time horizon over which they materialize.
Extending this analysis to a dynamic balance sheet view would further
support this assessment; for example, accounting for risk mitigating
management actions such as adaptation of derivatives hedging and
reinsurance programs, repricing of insurance products, or strategic
repositioning of investment and insurance portfolios. The approximate
estimates we carried out on the effectiveness of selected management
actions confirm this view.
2.367
Risks and opportunities also result from the cross-sectoral structural
change stemming from the transition to a low-carbon economy. These
transition risks include the impacts of changes in climate policy, technology,
and market sentiment, and their impact on the market value of financial
assets, as well as impacts resulting from climate change litigation.
Climate change mitigation and adaption is driving the rapid
development of new or modification of existing technologies (e.g.
sustainable aviation fuels, carbon capture and storage, electric
vehicles).
Climate-related risks
2022
72.5
67.4
Fossil fuels
9.6
12.4
Long distance heating
16.8
18.8
Delta
5.1%-p
(2.8) %-p
(2.0) %-p
Other sources (incl. energy from own
sources including photovoltaic,
internal waste heat)
1.1
1.4
Renewable electricity
(0.3) %-p
2023
(15.1) %-p
Electricity
As of 31 December
Climate change will materially affect global economies and Allianz, with
its international footprint and many different lines of business, is no
exception - as already highlighted in the section on materiality analysis.
The risks and opportunities emerging today will evolve and increase over
the mid to long term. They include acute and chronic physical impacts on
property and human health, such as increasing temperatures, extreme
weather events, rising sea levels, intensifying heatwaves, droughts, and
potential changes in vector-borne diseases.
1,965,294
(19.9)
Total energy
consumption¹
Energy consumption
from office buildings
8.1
10.4
(22.3)
As of 31 December
per employee
Energy reduction in
office buildings per
employee since 2019
%
(47)
(32)
Energy source
%
GJ/employee
Renewable electricity
1_The total energy consumption includes also energy from remote working.
2023¹
1,122,821
In 2023, we achieved a 47% reduction in energy consumption in
our office buildings per employee compared to our 2019 baseline
(2022:32%).
Fleet and business travel
When it comes to fleet and business travel, our aim is to continuously
reduce corresponding GHG emissions now that COVID-19 measures
have been lifted and business trips are permitted again. We aim to
reduce our GHG emissions from business travel by 40% by 2025
against a 2019 baseline. As a signatory of the EV100 initiative, Allianz
has committed to fully electrify the company fleet by 2030 at the latest.
The current travel regulation is under review and - once updated
in 2024 - will encompass climate-related topics for business travel. In
addition, our travel tools offer a sort and filter function based on CO2
emissions for flight searches. Further, meetings should be held digitally
whenever possible.
In 2023, GHG emissions from business travel were reduced by 44%
per employee against a 2019 baseline³ (2022: 47 %). As of 2023, 22%
of our fleet vehicles are electrified 4 (2022: 11%).
Procurement
―
With regard to our supply chain, our target is to ensure that 100% of
global framework vendors i.e., vendors providing products and
services for Allianz globally - have made a public commitment to net-
zero GHG emissions in line with a 1.5 °C path by 2025.
The procurement function sources services and products for the
Allianz Group by partnering with thousands of vendors all around the
world for activities such as IT, professional services, and marketing. Our
procurement policy and processes are reviewed regularly. In 2022, they
were updated to align with the Allianz Group sustainability strategy
and to embed the operations sustainability strategy across
procurement activities. To ensure our IT partners are following our
We have set up a Buildings Standards Catalogue to harmonize
Allianz's approach to sustainability in buildings. This comprehensive
listing of minimum standards includes elements of governance-
/certifications, furnishings, construction/renovations, renewable
energy, energy efficiency, water, waste, food, and commuting, as well
as guidance on green lease selection criteria.
2_LEED (Leadership in Energy and Environmental Design) and BREEAM (Building Research Establishment
Environmental Assessment Methodology) are certifications assessing the sustainability of buildings
based on a rating system.
70
Annual Report 2023 - Allianz Group
C_Group Management Report
decarbonization ambition, we have implemented sustainability
criteria in all Requests for Information (RFIs)/Requests for Proposal
(RFPs) and tenders. The catalogue of questions covers environmental
aspects in four categories (Hardware, Software, Application/
Infrastructure & Communication) and produces a rating based on
defined sustainability criteria.
Our assessment indicates that, in 2023, 76% of global framework
vendors had an existing net-zero commitment (2022: 65%).
Sustainability incentive schemes
GJ
Sustainability forms part of the individual contribution factor of the
remuneration of each member of the Allianz SE Board of
Management. This extends to the decarbonization targets of
proprietary investments as well as own operations. For further
information, please refer to Remuneration Report and the section
"Corporate responsibility governance and strategy".
3_GHG emissions from business travel were restated for 2019 (new absolute: 140,787 t CO2e, new relative:
1.0 t CO₂e per employee). For air travel emissions, 2022 emission factors were applied to consider post-
Covid air travel load factors and to ensure comparability.
4_Including battery electric and plug-in hybrid vehicles.
energy efficiency and reduction holistically, our operating entities are
encouraged to develop approaches to reduce energy consumption.
1_Full list of countries: Hong Kong, Bahrain, Cameroon, Ghana, Tunisia, Ivory Coast, Kenya, Lebanon,
Senegal, Madagascar, Laos, Myanmar, Qatar, Reunion Island, Saudi Arabia, Ukraine.
Embedding sustainability in our buildings encompasses energy
efficiency and reduction. We aim to reduce the energy consumption in
our office buildings per employee by 20% by year-end 2025 against a
2019 baseline.
2022
1,153,987
We implement environmental management systems (EMS) and
energy efficiency processes based on ISO14001 and ISO50001
standards to improve environmental management governance
practices at some of our major locations and entities. Some locations
also pursue certifications such as LEED, BREEAM², etc. To address
Delta (%)
(2.7)
Renewable electricity
as a share of all
electricity
%
89
11%-p
100
1_For more information, please refer to the section "Decarbonization levers Renewable
Electricity".
Buildings
To achieve our GHG emission reduction targets, we have the following
decarbonization levers.
Decarbonization levers
Renewable electricity
As a signatory of the RE100 initiative, we have committed to sourcing
100% renewable electricity (RE) for our group-wide operations and
data centers by 2023. RE100 is a global initiative bringing together
businesses committed to 100% renewable electricity.
Energy sourcing has been a strategic procurement function since
2021 and plays a key role in our transition toward 100% renewable
electricity, mainly by shifting energy procurement from locally driven to
globally driven processes. Activities in 2023 included leveraging
opportunities to agree green tariffs with local power providers and
holding conversations with landlords supported by green lease
clauses. We encourage green tariffs and local direct investments in
Allianz-owned self-generation, centrally supported by PIMCO Prime
Real Estate. Furthermore, renewable Energy Attribute Certificates
have played a role in the transition to 100% renewable electricity as an
interim solution for markets and Allianz entities with limited access to
renewable electricity.
In 2023, we achieved our goal of covering 100% (2022: 89%) of
our electricity for all office buildings and data centers with renewable,
low carbon sources. 98.6% of this is in line with the RE100 technical
criteria and 1.4% is secured via renewable Energy Attribute Certificates
from neighboring countries as we operate in some countries like
Ukraine, Saudi Arabia and Ghana¹ where there is currently no
availability of renewable electricity meeting the RE100 criteria. We
continue our efforts to cover all our renewable electricity in line with
RE100 technical criteria and will closely monitor the market
development in the respective countries.
Our global Pulse surveys constitute the second employee listening
channel. Pulse surveys took place in the first and second quarters of
2023 to check the impact of engagement plans and ask our
employees about focus topics including Sustainability, Health and
Safety, Personal Development and Risk Culture.
The AES results are directly linked to the performance targets of
the Allianz Board of Management. We aim to achieve an IMIX score
above 75% and WWI+ development against previous year and overall
ambition level in 2024.
These positive 2023 results were achieved against the backdrop
of deteriorating scores of external global benchmarks. We consider
these good results to be a positive reflection of our ongoing follow-up
activity in the aftermath of the survey and our efforts to continuously
enhance the employee experience. Each Allianz entity thoroughly
analyzes its results to gain an in-depth insight and agree on effective
action plans with their teams. In addition, we expanded our global
Engagement Matters program in 2023. This initiative provides
frameworks of measures to increase employee engagement, offering
support to all entities in identifying initiatives to implement on a global
and local level in response to the feedback received. The focus areas
identified are connected locally and globally so that Allianz operating
entities can work on impactful measures.
The AES is our well-established employee platform for gathering
employee feedback globally and has been in place since 2010. Our
two key indicators recorded with the survey are the Inclusive
Meritocracy Index (IMIX) and the Work Well Index+ (WWI +). The IMIX
measures our progress in building a culture where both people and
performance matter, meaning that we enable employees to unlock
their full potential. The IMIX score is derived out of a basket of ten
questions. In 2023, the IMIX increased by 2 percentage points to 81%
(2022: 79%). Improvements in our IMIX scores demonstrate that we are
making progress in the areas of leadership, performance, and
corporate culture.
80
87
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Our efforts in engaging with our employees have been
recognized with awards and certifications. In 2023, we proudly
achieved GPTW certifications at 43 entities across 26 countries,
marking a substantial leap from 15 entities certified in 2022. Allianz
also reached a commendable 82% in the Trust Index and further
narrowed the gap to the 86% score required for Top 25 World's Best
Annual Report 2023 - Allianz Group
The WWI + measures employee well-being. A higher index score
is associated with higher employee well-being. The WWI+ score rose
by +5pp to 76% (2022: 71%). For further information, please refer to
the section "Health and safety".
Workplaces. Moving forward, our ambition is to increase the number
To live up to this commitment, we offer global learning through
our global #learn initiative. We have set up programs targeted to key
areas, such as property and casualty, life and health, IT, strategy,
finance, sustainability, communications, market management, and
operations. Allianz operating entities have access to global and local
offers as part of their broader action plans to support employee
learning and development.
For further information on our processes for engaging with our
workforce, please refer to the section "Collective bargaining and social
dialogue".
Learning and development and performance
management
This section addresses the strategic sub-section Training and skills
development including Performance management.
Training and skills development
Learning and development is a key differentiator in the financial
services industry where customer need are constantly changing in
response to a rapidly evolving external context, as observed in various
industries. Our ambition is for employees to develop skills for today
and for the future to ensure Allianz is prepared for emerging trends
and opportunities and able to attract the best talent.
Allianz fosters personal, professional, and leadership skills, as well
as digital skills and technical expertise, and emphasizes the
development of EQ (emotional quotient, such as curiosity, resilience,
"we mentality", and flexibility) as well as IQ (intelligence quotient, such
as digital and data, problem-solving and business, sustainability, and
leadership) skills. Allianz is committed globally to employee lifelong
learning and development.
A special focus in 2023 was put on the topics of IT, data, and
artificial intelligence. We offered generative Al and ChatGPT training
to all managers with the aim of explaining the new technology to
Allianz leaders and in order to develop relevant use cases for Allianz.
More than a thousand managers took part in the training between
October and December 2023. Additionally, we held the inaugural
global Fit4IT day in 40 operating entities, covering approximately 85%
of employees. Our employees were able to invest half a day in
upskilling, familiarizing themselves with various IT tools.
-
We employ a wide range of learning and development
approaches including on-the-job learning, mentoring and coaching,
classroom trainings, peer circles, and digital learning. We encourage
employee learning in all formats, and all are included in the learning
hours reported. The total hours reported in table "S1-13.1" thus include
self-directed learning (such as videos and podcasts) as well as other,
alternative, learning formats (such as coaching), which together
account for 32.08% of total learning hours.
Listening and engaging with our employees are the cornerstones of
implementing our People and Culture strategy. The member of the
Board of Management responsible for People and Culture is
accountable for developing our framework for listening to employees
and steering activities to ensure progress towards implementation of
our ambition and reaching our ambitions. Operational responsibility is
assigned to the Global People and Culture Officer and Local Human
Resources Directors. Our employee listening framework consists of the
annual Allianz Engagement Survey (AES) and biannual Pulse surveys.
We are also proud of our Allianz Sustainability Training for all our
employees which covers the basics on sustainability why it is
important and what Allianz is doing to integrate sustainability into our
business model - and offers inspiration on how employees can
contribute to a more sustainable future.
of GPTW-certified entities as well as the number of OEs on the
National Best Workplace lists.
Engaging with own workforce
Total external leavers¹ excl. employees whose
Our risk management system also encompasses an annual
(public) Policy Statement on Human Rights, a global complaints
mechanism (Speak Up@Allianz), independent monitoring through the
Group Human Rights Officer, and an annual (public) report to the
Federal Office for Economic Affairs and Export Control.
Employee turnover (S1-6.5)
We have a strong focus on digital learning. Through our digital
learning ecosystem, employees are able to source learning both from
our AllianzU learning platform powered by Degreed and LinkedIn
Learning. Our internally developed global learning offers are
available in five languages and are available to all employees.
Learning consumption is measured globally on a monthly basis.
As of 31 December
Total external leavers¹
#
Employee turnover rate²
%
2023
21,181
13.97
temporary contract ends during the reporting
period
#
19,616
Employee turnover rate² excl. employees whose
temporary contract ends during the reporting
period
%
1_Employees who left the company during the reporting period due to layoffs, (un)voluntary
leaving, retirement, death, and other.
12.94
2_The employee turnover rate is defined as the number of total external leavers divided by
average contracted headcount. The average contracted headcount is calculated over the four
quarters of the current year and the last quarter of the previous year. Hence, it is the sum of
contracted headcount of the four quarters of the current year and the last quarter of the previous
year divided by 5.
Processes to remediate negative impacts and
channels for own workforce to raise concerns
For further information, please refer to the section "Compliance/anti-
corruption and bribery matters".
Human rights in own workforce
At Allianz, we are committed to respecting the human rights outlined
in the OECD Guidelines for Multinational Enterprises, the UN Guiding
Principles on Business and Human Rights, the principles and rights set
out in the eight fundamental conventions identified in the Declaration
of the International Labour Organization (ILO) on Fundamental
Principles and Rights at Work, and the International Bill of Human
Rights. For further information, please refer to the Allianz company
website.
Allianz SE, as the holding company of the Allianz Group, has been
subject to the Lieferkettensorgfaltspflichtengesetz (German Supply
Chain Act (GSCA)) since January 2023. The GSCA requires us to
establish worldwide risk management systems concerning the human
rights of our own employees and the employees of our suppliers,
amongst others.
In our own operations, Allianz has established a risk management
system that is designed to identify, analyze, and prioritize risks to the
human rights of employees. Allianz will continue to further rollout and
strengthen these processes over the course of 2024.
Among protected rights listed in the GSCA, the risk categories that
are most relevant for our own operations are: occupational health and
safety, equal treatment (which includes DEI and equal pay), freedom
of association/collective bargaining, and adequate / living wages.
If risks are identified, we take preventive measures to mitigate
those risks. If violations are found, Allianz is legally obliged to remedy
them promptly. The effectiveness of measures is regularly reviewed.
1st Strategic Pillar: Employee and Candidates
The section "1st Strategic Pillar: Employees and Candidates" outlines
the topics engaging with own workforce, learning and development
and performance management, fair remuneration, benefits, social
protection, health and safety, work-life balance, and collective
bargaining and social dialogue.
Developing our leaders is of the utmost importance to us. We run five
global programs every year to develop strong leaders:
73,884
80,949
#lead Transform was created for future and recently appointed
top executives. The program is built around our core #lead
mindsets: curiosity, resilience, "we-mentality", and flexibility.
#lead Accelerator prepares future and current board members for
leading the organization with strategic project work, board
exposure, peer coaching, and external insights.
154,862
employees
29
Number of
Total
Not
reported as
female or
male¹
Male
Female
As of 31 December
2023
1_Non-guaranteed hours employees are employees with a working contract but without a guaranteed number of working hours and thus not having a guaranteed salary.
2_For further information on Corporate and Other (incl. Allianz Technology) figures, please refer to note 5 to the consolidated financial statements.
3_Location of employees.
Number of
employees
(headcount)
(headcount)
Employee headcount by contract type, broken down by gender
(S1-6.3)
As of 31 December 2023
Male
Female
Table "S1-6.3" shows that the majority of our employees hold a
permanent contract. Temporary contracts are sometimes offered to
new employees before an offer of permanent employment is made, to
seasonal workers to meet customer demands, or to career entrants for
summer internships in some operating entities. A minor part of our
employees, for instance, those operating as medical professionals for
Allianz or working students, are non-guaranteed hours employees. The
majority of our active headcount are full-time employees, while some
employees use the flexibility that Allianz offers to work part-time. For
further information, please refer to the section "Work-life balance".
The split into the different business segments in tables "S1-6.2"
and "S1-6.4" reflects the Allianz Group structure and ensures
consistency throughout the report. For further information, please refer
to Business operations chapter. In addition, Germany as a country is
displayed separately in accordance with CSRD requirements as it
represents over 10% of the total contracted headcount.
The metrics in the section "Employee matters" are collected
centrally by Allianz Group People and Culture according to globally
defined standards. Their definitions are documented in our People and
Culture metrics definition handbook.
As of 31 December 2023, 154,8621 employees hold a working contract
with Allianz (for more information on number of employees, please see
table "S1-6.1" and refer to the note 8.18 to the consolidated financial
statements). This contracted headcount figure is the basis for the
figures in the remainder of the section "Employee matters”.
Characteristics of our employees
C_Group Management Report
Annual Report 2023 - Allianz Group
Secure Allianz's position as DEI leader by
global rankings and through certifications
At least 25% of our global workforce is
younger than 35 years old
80% of the Allianz executive population
complete the Personal Development Plan
60% of the Allianz non-executive population
complete the Personal Development Plan
Allianz Global Executives (AGE): 30% female
Allianz Senior Executives (ASE): 30% female
Allianz Executives (AE): 40% female
Employee headcount¹, broken down by gender (S1-6.1)
80,949
73,884
29
#sheleads sets the standard for effective gender balance via
sponsorship, peer coaching, and learning sessions with our alumni
community. The program enables our female leaders to make
their next career move.
88
88
4,631
Number of non-
(headcount)
thereof: Germany²
Global Insurance Lines & Anglo Markets, Iberia & Latin America,
Middle East and Africa
Asset Management
Corporate and Other¹
Total employees
USA
German Speaking Countries and Central & Eastern Europe
Western & Southern Europe, Allianz Direct and Allianz Partners
Asia Pacific
As of 31 December 2023
Employee headcount in Allianz's business segments and in countries
with at least 10% of Allianz's total number of employees (S1-6.2)
1_Number of employees in Allianz's companies fully covered under global People and Culture
reporting standard (which includes all companies in and related to the insurance, asset
management, and banking business). Contracted headcount working at consolidated Allianz
Group companies: 157,883.
2_Comprises non-binary and not reported.
Not reported as female or male²
Total employees
employees
temporary
Number of
146,656
28
70,310
76,318
employees
(headcount)
permanent
Number of
154,862
#lead Ignite is targeted at new people leaders who qualify as
potential or new Allianz executives. It aims to equip them with the
knowledge, mindset, and skills needed to lead at Allianz.
#lead Empower develops the leadership capabilities needed for
leaders at the future and recently identified Allianz Senior
Executive level to make the transition from leading teams to
leading leaders and the business.
thereof: Germany³
707
7,948
USA
Global Insurance Lines & Anglo Markets, Iberia & Latin America, Middle East and Africa
Asset Management
Corporate and Other²
Number of
Number of
employees
(headcount)
permanent
employees
(headcount)
Number of
temporary
employees
(headcount)
Asia Pacific
Number of non-
guaranteed hours
Number of full-time
employees (active
headcount)
Number of part-time
employees (active
headcount)
35,595
32,948
2,647
26,478
7,222
40,286
38,430
employees
(headcount)¹
Western & Southern Europe, Allianz Direct and Allianz Partners
German Speaking Countries and Central & Eastern Europe
As of 31 December 2023
43 hours of learning on average per
employee p.a.
Number of part-time
40,286
employees (active
headcount)³
14,774
3,802
18,576
15,887
2,125
1_Comprises non-binary and not reported.
25,648
6,999
2_Employees with a working contract but without a guaranteed number of working hours and thus
not having a guaranteed salary.
3_Full-time and part-time employees are calculated based on active headcount, excluding, e.g.,
employees on sabbatical leave, in military or civilian service, or on parental leave.
28,322
154,862
38,792
1_For further information on Corporate and Other (incl. Allianz Technology) figures, please refer
to note 5 to the consolidated financial statements.
2_Location of employees.
1_Number of employees in Allianz's companies fully covered under global People and Culture reporting
standard (which includes all companies in and related to the insurance, asset management, and banking
business). Contracted headcount working at consolidated Allianz Group companies: 157,883.
86
Annual Report 2023 - Allianz Group
C_Group Management Report
Employee headcount by contract type, broken down by business segment (S1-6.4)
1,856
Total Group
68
5,825
guaranteed hours
employees
8,206
1
3,574
6,673
326
6,506
365
28,322
27,544
778
(headcount)²
6
1,983
154,862
38,792
146,656
35,533
8,206
83
131,784
18,576
3,259
9
28,805
25,745
56
27
83
15,887
14,003
1,884
1
15,120
598
35,595
2,125
2,117
8
2,097
20
25,648
24,941
8
22,539
2,563
6,999
131,784
29
68,929
62,826
headcount)³
Number of full-time
employees (active
Number of
employees
(headcount)
33,299
Inclusive Meritocracy Index (IMIX) 75% plus
and Work Well Index+ (WWI +)
development against previous year and
overall ambition level.
Social matters
1_Allianz Asset Management companies do not apply the Allianz Global Grading System. They have their own initiatives to promote equal opportunity.
2_Liverpool Victoria General Insurance Group Limited, Guildford and Liverpool Victoria Insurance Company Limited, Guildford are excluded from Allianz UK's data due to grading data unavailability for PDP.
Annual Report 2023 - Allianz Group
As part of our Privacy Risk Management process, we identify and
manage privacy risks at the operational process level to ensure they
are measured, monitored, and mitigated across our core businesses.
Privacy Impact Assessments (PIAs) of processes that use personal
data - such as customer health data and employee data - enable the
early identification of privacy risks and ensure they are managed
appropriately. We also undertake case-by-case Transfer Impact
Our employees play a critical role in upholding our commitment
to protect personal data. To ensure all our employees have the
knowledge to properly use and safeguard personal data, they are
required to complete annual privacy training. This training covers the
Allianz Privacy Framework requirements in detail and provides a solid
foundational understanding of core privacy concepts and the proper
handling of personal data. For Privacy Experts, five-day Privacy Expert
Training is focused on providing Data Privacy Professionals and Data
Protection Officers with the practical knowledge to effectively conduct
their day-to-day activities. For Privacy Champions, two-day Privacy
Champion Training is focused on the practical knowledge and
exercises required for the Privacy Champion role to ensure data
protection compliance within the business.
In addition to the APS, our data protection authority has approved our
Binding Corporate Rules (BCRs), which allow Allianz Group
companies to lawfully transfer personal data from within the
European Economic Area to other jurisdictions, where it is required for
business purposes.
10. Cooperation with data protection authorities.
9. Privacy by design and default.
8. Timely reporting of personal data breaches.
6. Adequate protection of personal data when it is transferred.
7. Security and confidentiality (appropriate technical and
organizational security safeguards are in place to protect
personal data).
5. Relationships with data processors (ensure organizations that
process personal data on our behalf adhere to our privacy
requirements).
4. Transparency and openness towards employees and customers
on where personal data is stored and used.
3. Lawful basis (personal data is only processed if we have a lawful
basis to do so).
C_Group Management Report
2. Data quality (purpose limitation, data minimization and storage
limitation).
The Allianz Privacy Standard (APS) is our global standard for data
privacy and the foundation of the Allianz Privacy Framework. As the
highest policy document in the Allianz Privacy Framework, the APS
defines rules and principles for collecting and processing personal
data, including the ten privacy principles that all employees must
respect wherever they are in the world:
Our group-wide privacy program ensures compliance with all
relevant data privacy laws and regulations. All data privacy matters
are overseen by Group Data Privacy.
Protecting personal data and maintaining trust in our processes are
key priorities. Our customers, employees, and other stakeholders
expect us to treat their data with the utmost care and we take this
responsibility extremely seriously. We are committed to the highest
standards to protect customer privacy and we work closely with other
stakeholders involved in the update and modernization of European
privacy legislation, including industry associations, members of
parliament, and authorities. We also strive to communicate honestly
and openly about actions that involve the personal data we process
by publishing privacy notices that explain who we are, how we collect,
share, and use personal data, and how individuals can exercise their
privacy rights.
Data privacy
Further information on our commitment to information security is
described in the section "05.1.1" in our Group Sustainability Report
2023 on the Allianz company website.
All employees are required to participate in cyber-awareness
training at least quarterly. This training includes activities like
simulated phishing e-mails, awareness campaigns, and dedicated
information security training, with the latter being offered regularly.
We also participate in industry and global/regional initiatives to
support the security of the internet ecosystem as a whole.
Specific actions to improve security controls are continuously
evaluated and developed with priorities assigned on a global, risk-
based view that is informed by the current and expected threat
landscape. Actions to achieve our cyber risk targets focus on five key
risk areas: reducing the likelihood of incidents; increasing the
likelihood of detection; reducing damage from incidents; streamlining
compliance; and training/educating the organization to further
improve security awareness.
81
To fulfill our commitment, cyber risk is assessed and tracked as
one of the top risks faced by Allianz and is closely managed along key
risk indicators covering security maturity, risk exposure, and security
operations across the Allianz Group. Performance against these
indicators is discussed, reviewed, and reported quarterly to the Board
of Management and Supervisory Board. Monitoring for cyber
incidents, and measures to prevent them from occurring, are
implemented at a global level and supplemented locally where
required, together with the local CISOS that exist in all Allianz
operating entities.
The functional rules are complemented by detailed descriptions
of best practices to be followed across 16 defined topics to ensure the
""security by design" principle. Information security is regularly audited,
both internally and externally, and regular training is provided through
dedicated exercises across all layers of the organization.
The Allianz Information Security Governance Framework
comprises multiple layers of corporate rules and processes. An overall
policy establishes core principles, roles, and responsibilities, as well as
the Information Technology and Information Security organizational
framework within the Allianz Group.
1. Due care.
As a core business discipline, information security is managed
globally through a robust and mature governance framework aligned
with international standard ISO 27001. Our approach is closely
monitored by a dedicated Group Chief Information Security Officer
(CISO) function and the Allianz SE Board of Management. An
executive accountability regime supports the enforcement of the
governance framework for all entities.
Assessments (TIAs) for processes that transfer personal data from the
European Economic Area (EEA) to suppliers in third countries in order
to confirm an adequate level of data privacy is maintained. We
designed a TIA template in our privacy management platform, which
was rolled out to all our operating entities in the EEA to ensure such
assessments are conducted in a consistent, semi-automated way.
For further information on our commitment to data privacy,
please refer to the section "05.1.2" in our Group Sustainability Report
2023 on the Allianz company website.
- Additionally, a mechanism was devised to ensure a direct link between information security standing
and reward.
- Target objectives for all operating entities included key information security risk indicators in
addition to targets for strategic programs related to information security.
Progress and actions 2023
- Develop guidance for generative Al usage.
- Monitor final implementation of the Al Practical Guidance in all EU Renewal Agenda Committee
(RACO) operating entities.
- Deploy a rigorous training program for privacy professionals and privacy champions.
- Ensure our Record of Processing Activities (ROPA) and Privacy Impact Assessments (PIAs) are
accurate and kept up-to-date.
- Further upgrade targets and risk indicator monitoring, linking them to quantified risk exposure and
roll-out of global cyber risk management strategy.
- Define and include information security targets for all responsible board members, including local
operating entities, to ensure appropriate focus on securing Allianz.
Objectives
Data privacy and data ethics
In committing to the highest standards of data protection, we
believe the maintenance of a state-of-the-art privacy program needs
to be supported by diligent and continuous monitoring and assurance
activities. Privacy reviews require every operating entity, global line,
and regional office to undergo a rigorous examination of the design,
implementation, and effectiveness of its local privacy program and
related process and controls. The frequency of these reviews is based
on risk, but they are carried out at least once every five years. As of the
end of 2023, we have conducted 22 privacy reviews, including joint
reviews with Information Security and peer Data Protection Officers
(DPOs). This is a 37% increase compared to 2022 and concludes the
five-year privacy review cycle.
Information security executive accountability
Objectives and actions: cybersecurity
We are constantly developing our solutions to enable customers to
manage cyber threats. As an example, Allianz (within its commercial
Property-Casualty products) has eradicated around 98% of silent
cyber exposure, therefore providing clarity to customers on what is and
is not covered within the products. As an insurer, we combine policy and
service improvements to help businesses understand the need to
strengthen their controls. We continue to evolve cyber risk exposure
coverage across Property-Casualty policies spanning commercial,
corporate, and specialty insurance segments. The Cyber Underwriting
Strategy addresses exposures to cyber risks and is reviewed regularly
to ensure policies are updated and clarified in response to cyber risks.
For further information on cyber risk, please refer to the section
"05.1.4" in our Group Sustainability Report 2023 on the Allianz
company website.
Cyber risk
For further information on our commitment to data ethics, please
refer to the section "05.1.3" in our Group Sustainability Report 2023 on
the Allianz company website.
Allianz Practical Guidance for Al. Training led by Group Privacy and
Group Data Analytics has been expanded to target a broader
employee base as well as employees who develop and/or use Al in
applicable OES.
Furthermore, emerging risks regarding generative Al have been
addressed by dedicated guidelines in further development of the
Following its establishment in 2021, the Data Advisory Board
(DAB) has continued its work to elevate and integrate data ethics into
governance and decision-making, as well as to support the positioning
of Allianz as both a leading insurer and investor in the data ethics
space and wider sustainability efforts. In 2023, the DAB monitored the
final implementation of the Allianz Practical Guidance for Al in OES
that are members of the Renewal Agenda Committee.
Ensuring compliance with current and upcoming regulations and
embedding best practices in anticipation of regulatory change are
also high priorities in fulfilling our data ethics commitments.
We strive for a responsible use of artificial intelligence (AI) in our
business activities based on a strong Al Governance Framework. This
includes ensuring a human-centric approach in our usage of Al
systems. For each Al system, an appropriate level of human control
must be determined according to the inherent risks of harm for
individuals as part of a Privacy and Ethics Impact Assessment.
Our aim is to maintain stakeholder trust and position Allianz as a
leader in conducting data-driven business in a trustworthy and ethical
manner. This includes elevating data ethics as well as selected data
and analytics-related topics in the governance and decision-making
processes of the Allianz Group.
Data ethics
Topic
Information security is the application of technologies, processes, and
controls to protect systems, networks, programs, devices, and data
from unauthorized access and against cyberattacks, and to meet
related regulatory requirements. Our dedicated Information Security
function aims to ensure the confidentiality, availability, and integrity of
information across the Allianz Group.
Information security
In this section, we describe the impact of cybersecurity on our business
activities and relationships, as well as the impact of the Allianz Group's
activities and relationships with regard to IT topics. In addition, we
describe the concepts and achievements related to the management
of these impacts with a focus on information security, data privacy, and
data ethics.
- Continue to contribute to society through corporate giving and employee volunteering in alignment
with our strategy.
Continue with the implementation of the new strategy and roll-out of the impact measurement
framework.
Objectives
Corporate citizenship activities
Corporate citizenship strategy
Topic
For further information, please refer to section "04.4" in our Group
Sustainability Report 2023 on the Allianz company website.
For MoveNow, the SIF picks up and leverages existing formats
from the partnerships with the IOC and the IPC. In 2023, it provided
resources for 18 local partnerships that focus on the goals of SDG 8. To
further support its local entities in setting their ambitions and
measuring and reporting on the impact of corporate citizenship
activities at a local level, Allianz has introduced the Allianz Social
Impact Measurement Framework.
On top of this social work and based on the lessons learned from
existing partnerships with the International Olympic Committee (IOC)
and the International Paralympic Committee (IPC) Allianz has further
developed a major global initiative: Move Now is a program that
prepares our focus groups for their professional future by offering
opportunities to move mentally and physically. It is an initiative that
OEs can run in the countries we operate in and an initiative which we
support financially with our SIF.
In 2021, we launched the Social Impact Fund (SIF) which supports
our OE's strategic opportunities by focusing on creating measurable
impact through intersectoral partnerships.
Our ambition is shaped by our company purpose, "We secure
your future", defined by our group-wide business strategy, and brought
to life through our employees and the local efforts of our operating
entities (OE) who actively implement our Corporate Citizenship
Strategy and strengthen its alignment with the SDG 8 but also with
SDG 17 via philanthropic initiatives, global partnerships and
volunteerism.
- Identify and launch activities that would be supported through the Allianz Social Impact Fund.
We view supporting and upskilling young people and persons
with disabilities to help them get into education and employability as
one way to contribute to SDGs, and in particular to SDG 8: Decent work
and economic growth.
We are aware that our actions have the potential to influence the
future living conditions, employability and well-being of young people
and persons with disabilities and that our decisions play an integral
part in determining this future.
Corporate citizenship
In 2023, we have consolidated our tax transparency reporting
products while keeping the same level of information. We are
presenting our total tax contribution and our country-by-country
reporting now in our Sustainability Report along with other
information about current tax topics and developments.
Our ambition is to take a responsible approach to the
management of taxes. We aim for being recognized as a compliant,
co-operative and reliable taxpayer in each country we operate. For a
comprehensive description of our approach see our Group Tax
Strategy on the Allianz company website.
At Allianz, we are continuously engaging in tax transparency. We
consider taxes to be a core component of corporate responsibility and
sustainability.
Tax transparency
Objectives and actions: societal impact
Our long-term approach as an investor and insurer is an
opportunity to offer measures that can mitigate future risks and shape
societies for generations; for example, through pension systems,
environmental and climate protection. As a global insurer, we uphold
the principle of solidarity. Pooling risks is part of our core business
model and we have a keen interest in supporting stable communities.
We have a role to play in enabling future generations and persons with
disabilities to overcome the economic and social impacts of social
risks.
Allianz is committed to having a positive social impact and helping to
deliver the United Nations Sustainable Development Goals (UN
SDGs). For further information on our commitment to the UN SDGs,
please refer to the sections "01.4", "01.5" and "04.4" in our Group
Sustainability Report 2023 on the Allianz company website. We
understand social impact as the effect that our global organization
has on the well-being of the community - from global society to local
communities where we live and work. This ambition is lived out through
our company purpose, our group-wide business strategy, and the local
efforts of our operating entities.
Concepts
The following section describes the impact of social matters on our
business activities and relationships, and the impact of the
Allianz Group's activities and relationships on society. We describe the
concepts and achievements related to the management of these
impacts with a focus on social impact and responsible consumer/sales
policies.
Allianz wants to shape its social impact in a meaningful and
lasting way. This social impact stems from both the nature of our
business and the effect that our global organization has on the well-
being of the communities it is active in.
Progress and actions 2023
Integrated Social Impact Measurement Framework into data collection process to enhance input-
output-outcome-impact (IOOI) reporting in support of local entities setting their ambitions and
measuring the impact of corporate citizenship activities.
Social Impact Fund supported 18 corporate citizenship programs led by operating entities (OES) in
partnership with NGOs in delivery of social impact locally in alignment with global strategy.
Cybersecurity
C_Group Management Report
Annual Report 2023 - Allianz Group
60
80
Our approach to customer responsibility and compliance is
described in the section "04.3" of our Group Sustainability Report 2023
on the Allianz company website.
Rather than selling individual insurance products, our vision is to
evolve our products into full ecosystems and offer customers relevant
and trusted solutions. In addition, we are using the ACM to upgrade
customer journeys at the Group level.
This involves transforming the whole value chain across products,
sales, claims, and operations. Our aim is to continuously roll out the
model across Allianz OES.
A tangible example of how the Allianz Customer Model is
transforming our business is our Master Products. A Master Product is
a template available in the Allianz Product Lab with streamlined
product elements that are linked to harmonized claims and pricing
values. Allianz OEs can configure Master Products to create the right
product for their market and make adaptations that are required by
regulation. So far, we have created 21 Property-Casualty Master
Products which cover more than 90% of Property-Casualty GWP in our
OES (excluding global lines). Harmonized Master Products allow us to
efficiently scale essential IT assets such as Quote & Buy and First
Notification of Loss in the Business Master Platform. This platform
digitalizes the business requirements of the ACM. It comprises
a combination of scalable technological elements, systems and
services plus functionalities and configurations, to better serve our
customers, intermediaries, partners, and employees.
Our target has been to continuously roll out the model across
Allianz operating entities. As of the second quarter of 2023, ACM has
been rolled out to 39 operating entities, comprising 99% of gross
written premium (GWP) for our retail Property and Casualty business.
Within this context, the Allianz Customer Model was designed first
for Retail Property and Casualty lines and then extended to Health,
Life, B2B2C, MidCorp, Large Corporate and Reinsurance.
The Allianz Customer Model (ACM) is our end-to-end global
business model that puts the customer at the center of our business
and enables Allianz to be simple, digital, and scalable. Our ambition
is to simplify and harmonize our business globally.
Secondly, we worked together with the Allianz Behavioral
Economics team to improve the policy renewal communication
template by providing customers with more clarity and transparency.
And thirdly, in June 2023, we launched a global Prewarning &
Prevention initiative, focused on helping customers prevent damage to
their property due to climate-related events. Working with climate
scientists and risk experts across the Group, we co-created the Global
Risk Assessment (GloRiA) tool and customer education assets, which
enable users to learn more about the Nat Cat risks associated with
their place of residence.
Findings from the VoC and dNPS programs also help us design
the global Allianz experience for our customers. In 2023, we continued
our journey to co-create and scale one global Allianz customer
experience by developing additional initiatives. Firstly, we continued to
implement the Annual Policy Review initiative, which was launched in
November 2022, as a way to engage with customers and discuss their
insurance portfolio and current needs.
We use insights from Voice of the Customer and NPS to improve
our products, services, communications, and processes. We combine
and analyze sources of customer data in strict accordance with
applicable privacy laws to prioritize and implement structural
improvements. Local operating entities use customer feedback to
derive concrete actions.
Our Voice of the Customer program applies a holistic and
standardized methodology to monitor and improve the customer
experience by collecting real-time qualitative and quantitative
feedback. Customers are invited to rate their satisfaction on a five-star
scale after their recent experience at predefined touch points along
five customer journeys. To this end, we map the main interactions a
customer has with Allianz along the following journeys: Sales &
Onboarding; Claims; Issue Resolution & Contract Management;
Renewal, Cancelation & Termination; and Outbound Communication.
If customers rate their experience with three stars or fewer, we follow
up with them to resolve the issue directly and gather more insights.
We use the globally recognized Net Promoter Score® (NPS) as our
key metric for measuring customer loyalty through customers'
willingness to recommend Allianz. In 2022, we switched to digital NPS
tracking. The digital NPS paradigm allows us to measure customer
loyalty continuously, eliminating seasonality and deepening our
understanding of customers' sentiment. Additionally, the new
measurement sets higher standards for our operating entities, which
are measured against a broader set of competitors. This year, we
achieved a remarkable NPS of 59% Loyalty Leadership across all our
business segments. This result exceeds our target (50% loyalty leaders
by 2024) and reinforces our position as a trusted and preferred
insurance and financial service partner.
The Allianz Standard for Sales Compliance aims to promote and
protect the interests of our customers. It is designed to ensure
transparency and the fair, honest, and responsible treatment of Allianz
customers in their purchase of our financial products and their
dealings with us. The Standard lays the foundation for a
comprehensive customer protection framework designed to ensure all
Allianz entities adhere to its prudential norms and robust protection. It
covers five key areas to address conduct risk: Product Oversight and
Governance, Incentives and Steering of Distributors, Standard of
Distribution, Sales Force Selection and Training, and Monitoring and
Reporting.
The Allianz Group Code of Conduct (CoC) is at the core of our
corporate culture. The Code emphasizes that fairness towards
customers and transparent communication about our products and
services including their limitations - maximizes our opportunity to
earn the long-term trust of customers. This is expressed through our
Global Sales Compliance Framework program, which specifies
standardized processes and controls for communication, monitoring,
and review, and is regularly updated to reflect regulatory
developments.
-
Our strong reputation is built on the trust our customers, shareholders,
employees, and the general public place in our integrity. This trust
hinges on the quality of our products, information, and advice, and on
the personal conduct and capabilities of our sales employees and
representatives.
Responsible consumer/sales
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-A self-assessment on the completeness and quality of ROPA and PIAs was conducted by all
operating entities and followed up with sample-based targeted reviews of 21 operating entities by
Group Data Privacy.
- Conducted 2 Privacy Expert Trainings and 4 Privacy Champion Trainings, attended by 33 and 203
participants respectively.
- Instituted a quarterly program to train relevant employees on the Practical Guidance for Al and
Guidance for Generative Al.
- Monitoring program and actions for final implementation of Practical Guidance for Al in EU RACO
OES.
Candidates
1st Strategic Pillar
Employees/
Overview of Employees matters, targets and ambitions (S1-5)
The Group Remuneration Policy is reviewed once a year in
accordance with the regulatory requirements under Solvency II and
Compliance with the Group Remuneration Policy is mandatory
within the Allianz Group. The implementation of the policy is guided by
the principle of proportionality, taking into account the nature of
business, size, complexity, and regulation of the respective operating
entity. This principle of proportionality only applies to the "how" and
not to the "if" of the implementation.
The Allianz Group Remuneration Policy establishes the general
and specific basic principles of the remuneration system. It defines
processes related to performance evaluation, the remuneration
system (including remuneration plans), and corresponding roles and
responsibilities.
and health and safety (for further information, please refer to the sub-
section "Health and safety"). The ASHR is reviewed once a year and
considers interests of key stakeholders, particularly Allianz SE Group
centers. Material changes must be approved by the respective
Allianz SE Board Member in charge of People and Culture. The ASHR
will be reviewed in 2024 and updated due to the requirements of CSRD
and the German Supply Chain Due Diligence Act, for instance.
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Annual Report 2023 - Allianz Group
Employee matters section
Engaging with our workforce
84
The Allianz Standard for Human Resources (ASHR) establishes
core rules and principles for People and Culture management, and it
specifies the role of the respective Group People and Culture functions
including professional, organizational, and procedural requirements.
The People and Culture function is committed to these principles and
acts as a service provider for the business. The Standard applies to the
entire Allianz Group except Allianz Asset Management companies
which are covered by separate standards aligning the general
principles outlined in the ASHR. The following People and Culture
topics are covered by the ASHR: Learning and development and
performance management (for further information, please refer to the
section "Learning and development and performance management")
The Allianz Group Code of Conduct reflects our values and
principles and thus guides our employees in their actions and
decisions. How we act, how we operate, and the decisions that we
make are focused on caring for each other and treating everyone fairly
and with respect. The Allianz Group Code of Conduct outlines the
importance of diversity, equity, and inclusion as well as the health and
safety of our employees and clearly commits to a zero-tolerance policy
toward discrimination, bullying, or harassment. For further information
on the Allianz Group Code of Conduct, please refer to the section
"Compliances/anti-corruption and bribery matters".
Policies are instrumental in implementing our Group People and
Culture strategy. We consider our established Allianz Corporate Rules
as policies according to the ESRS' policy definition. At Allianz, we are
committed to respecting the human rights outlined in the OECD
Guidelines for Multinational Enterprises, the UN Guiding Principles on
Business and Human Rights, the principles and rights set out in the
eight fundamental conventions identified in the Declaration of the
International Labour Organization (ILO) on Fundamental Principles
and Rights at Work, and the International Bill of Human Rights.
Furthermore, Allianz explicitly supports the goal of observing and
implementing the fundamental rights of these external charters. For
further information, please refer to the section "Compliance/anti-
corruption and bribery matters", the section "Collective bargaining and
social dialogue", and the section "Human Rights in own workforce".
Policies related to own workforce
and Culture operations contribute to generating sustainable and
inclusive growth and help to deliver on U.N. Sustainable
Development Goal 8, "Decent work and Economic growth".
The Brand and Society pillar displays the contribution our People
and Culture function makes to business and society and that we
create positive social impact. Our contribution is verified and
acknowledged by external certifications like Great Place to Work®
(GPTW) and EDGE as well as global rankings like Refinitiv.
Furthermore, we engage with the World Economic Forum, for
instance, as a member of the Good Work Alliance for a more
resilient, equitable, inclusive, and humane future of work. Our People
The Business pillar includes our Diversity, Equity, and Inclusion
(DEI) engagement and Strategic Workforce Planning (SWP)
initiative, which fuel our business to deliver on Allianz's strategic
goals. We are committed to strengthening diversity, equity, and
inclusion in the workplace by providing equal opportunities for
all, fostering gender balance, and embracing a diverse workforce
not only in terms of gender representation but also in terms of
generations, disability, nationalities, ethnicities, religious beliefs,
and LGBTQ+ identity. A diverse workforce enables us to better
understand and fulfill the needs of our equally diverse customer
base. Strategic Workforce Planning, on the other hand, aims to
understand workforce development in response to global
megatrends and how we can equip our workforce with the skills
they need for today and for the future.
The Employees and Candidates pillar includes all our strategic
priorities that enable us to attract top talents and to engage,
retain, and develop our employees. Strong employee
engagement is important to us, and we foster a culture and
working environment where people and performance matter. We
ensure lifelong learning and are committed to growing and
developing our people to be prepared for the future. Fair
remuneration as well as health and safety for our employees are
of utmost importance. Accordingly, we offer a broad range of
flexible work options.
3.
2.
1.
1_Contracted headcount working in companies fully covered under global People and Culture reporting
standard. Contracted headcount working at consolidated Allianz Group operating entities: 157,883.
approved by the Allianz SE Board of Management. The review process
considers the interests of key stakeholders, particularly Allianz SE
Group centers.
Group People and Culture ensures consistent implementation
and application of the Group Remuneration Policy. Each operating
entity concerned is obliged to provide a Statement of Accountability to
the management of Allianz SE to confirm local implementation of the
Group Remuneration Policy. Both the ASHR and the Group
Remuneration Policy are published in the Allianz Corporate Rule Book.
Our Allianz Functional Guidelines for Diversity, Equity, and
Inclusion (DEI) describe our strategy, rationale, and principles for DEI.
They show which targets and ambitions we have set ourselves, and
how we implement and monitor those targets. In 2023, we published
an update that includes our 2024 Diversity, Equity, and Inclusion
targets and ambitions. The Guidelines are applicable to the entire
Allianz Group except Allianz Asset Management companies, which
have their own initiatives to promote equal opportunity. Our
Functional Guidelines for DEI describe our commitments to the U.N.
Women's Empowerment Principles, the U.N. Free & Equal LGBTQ+
Standards of Conduct, and membership of the Valuable 500.
Refinitiv in the subsection Diversity, equity,
and inclusion (DEI)
EDGE certification in the sub-section Fair
remuneration
Allianz Executives (AE): 35.51 % female
34.31 % employees < 35 years old
Allianz Senior Executives (ASE): 27.90%
female
Allianz Global Executives (AGE): 25.96%
female
83.87% of the Allianz executive² population
with completed Personal Development Plan
50.01 hours/employee
80% of the Allianz executive² population
complete the Personal Development Plan
Generations
Brand and Society
3rd Strategic Pillar
Gender
Diversity, Equity, and Inclusion (DEI)
2nd Strategic Pillar
Business
Performance management
Training and skills development
Learning and development and
performance management
81% IMIX
76% WWI +
Inclusive Meritocracy Index (IMIX) and
Work Well Index+ (WWI +) development
against previous year and overall ambition
level.
Targets and ambitions 20231
Achievements¹
Beyond policies, it is crucial that targets and ambitions are
implemented according to our Group People and Culture strategy.
Table "S1-5" shows our targets as defined under CSRD as well as our
ambitions where relevant.
All mentioned policies are reviewed once a year. If one of the
mentioned policies or single items within the policy are in conflict with
local law or regulations, the local law or regulations will prevail.
Our Allianz Global Anti-Harassment & Anti-Discrimination
Functional Guideline outlines our global zero-tolerance standard
against harassment (including but not limited to sexual harassment)
and discrimination. We encourage employees to speak up in line with
our open communication and feedback culture and to use the Allianz
Group's whistleblowing channels. For further information, please refer
to the section "Compliance/anti-corruption and bribery matters". To
reflect important changes, both the Allianz Functional Guidelines for
DEI and the Anti-Harassment & Anti-Discrimination Functional
Guideline are updated by the respective departments and
subsequently approved by the Group People and Culture Officer.
Employee matters sub-section
AES Survey
To reach this ambition, we have based our People and Culture strategy
on three pillars:
Targets and ambitions 2024¹
Our ambition is to be the top employer in the financial services
industry globally. We work to attract top talent and support our
employees on their growth and development journey, delivering a
strong business impact and making a positive social contribution
wherever we operate.
All employee matters are managed by the People and Culture function
at Allianz Group level and across all Allianz operating entities. The KPI
tables in the following sections anticipate future CSRD requirements
under ESRS S1 where applicable, indicated in the table name.
Further measures have been implemented to minimize risks to
relevant human rights and labor standards in our own operations.
These include:
The Allianz Group Code of Conduct reflects Allianz's values and
principles and gives our employees guidance in their actions and
decisions. At Allianz, we expect employees to support and adhere to
human rights in alignment with international standards. For further
information, please refer to the Allianz Group Code of Conduct on the
Allianz company website.
For further information on our people and culture strategies,
please refer to the section "Employee matters" and the section "04.2"
in our Group Sustainability Report 2023 on the Allianz company
website.
A Group Human Rights Officer was appointed in 2023 to monitor
the effectiveness of our risk management systems in our own
operations and supply chain worldwide.
Allianz SE publishes an annual human rights policy statement
and reports annually to the responsible regulator (Bundesamt für
Wirtschaft und Ausfuhrkontrolle) about our human rights due
diligence.
At the heart of our due diligence processes are annual and ad-
hoc analyses of human rights risks in our own operations and supplier
base worldwide. If risks are identified, we take appropriate measures
to minimize them. If human rights violations are identified, we take
immediate remedial action to address those violations, in line with our
influence on respective suppliers.
As part of GSCA implementation, Allianz has implemented further
due diligence procedures that are appropriate to ensure that risks to
the human rights of people working for Allianz or for our suppliers, and
those whose human rights may otherwise be directly affected by the
economic activities of Allianz or its suppliers are minimized, and that
breaches are remedied promptly and adequately.
For further information, please refer to the Allianz Policy
Statement on Human Rights¹ on the Allianz company website.
based in Germany and their "own business area". The own business
area of Allianz SE (as the holding company of the Allianz Group)
encompasses all entities that are part of the Allianz System of
Governance, irrespective of location. Therefore, our GSCA risk
management covers all those Allianz entities and their suppliers
worldwide.
Allianz SE has been subject to the German Supply Chain Due Diligence
Act (GSCA) since 1 January 2023. GSCA applies to large companies
Human rights in our own operations and supply
chain
The protection of human rights has been enshrined in our internal
corporate rules, depending on local laws and requirements.
Anonymous feedback tools and surveys give our employees the
opportunity to evaluate issues such as workload, wages, and
diversity.
Allianz aims to identify, prevent, mitigate, or remediate adverse
human rights impacts linked to our business activities and operations,
including in our supply chain. Our approach is guided by the OECD
Guidelines for Multinational Enterprises and the U.N. Guiding
Principles on Business and Human Rights (UNGP).
The core International Labor Organization (ILO) Conventions:
These include the prohibition of child labor and forced labor;
freedom of association and the right to collective bargaining;
occupational health and safety; and the elimination of
discrimination in respect of employment and occupation.
The International Bill of Human Rights: This consists of the
Universal Declaration of Human Rights; the International
Covenant on Economic, Social and Cultural Rights; and the
International Covenant on Civil and Political Rights and its two
Optional Protocols.
The human rights that Allianz is committed to respecting are those
agreed by governments in:
Relevant frameworks
The following section describes how we address human rights
risks in our business activities, own operations, and supply chain. The
Allianz Sustainability Board oversees human rights due diligence for
the Allianz Group, while Global Sustainability seeks to continuously
improve human rights related governance.
Allianz is committed to respecting and protecting international human
rights, and to ensuring that Allianz is not complicit in human rights
abuses.
Human rights matters
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Allianz has been a member of the U.N. Global Compact (UNGC) since
2002 and uses the UNGC principles to guide its business activities.
These principles cover human rights, labor rights, environmental
protection, and anti-corruption. For further information on Allianz's
Communication on Progress, please refer to the UNGC website.
Extensive measures have been put in place to ensure the physical
safety of employees, as well as to improve their health and well-
being.
We at Allianz expect all our suppliers to act with integrity and to
respect the rights of their own employees and other people who may
be affected by the supplier's business activities. These expectations are
embedded in our Vendor Code of Conduct and Sustainable
Procurement Charter.
Allianz has established a worldwide complaints mechanism that
is open to Allianz employees, the employees of our suppliers, and other
people whose rights might be impacted by Allianz's operations and
business activities.
- Human rights policy
statement published
- Group Human Rights Officer
monitored Allianz risk
management
Progress and actions 2023
-Risk analyses conducted in
own operations and supply
chain, using a risk-based
approach
Employee matters
- Appropriate due diligence
processes for the own
operations and global
supply chain of Allianz SE,
with the objective to identify
and minimize human rights
risks and certain
environmental risks
Objectives
German Supply
Chain Act
Topic
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Objectives and actions: regulatory requirements
For further information, please refer to the Allianz Sustainability
Integration Framework and chapter "02" in our Sustainability Report
2023 on the Allianz company website.
If no mitigation measures exist or if leverage cannot be increased,
and the risk is determined to be unacceptable, Allianz declines to
engage in the business transaction.
Where an issue is detected and the (re)insurer/investor has
leverage, engagement is encouraged to address and mitigate a
potential human rights risk.
due diligence by sustainability experts and the involvement of central
units such as the risk and communication departments.
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website, an annual Modern Slavery Act Statement that complies with the relevant UK Act, even though
the content is also covered in the GSCA Policy Statement.
due diligence approach on a wide range of human rights risks, including child labor, forced labor, and
slavery. Until further regulatory clarification, Allianz will continue to publish, on the Allianz company
1_As part of its human rights due diligence under the German Supply Chain Act (GSCA), Allianz SE publishes
an annual Human Rights Policy Statement for the Allianz Group. This Statement covers our policies and
83
When a human rights risk is identified by an underwriter or
investment manager, a mandatory referral process starts for further
We maintain a mandatory referral list for sensitive countries
where systematic human rights violations occur. For business
transactions located in these countries, we carry out explicit due
diligence in accordance with our Human Rights Guideline that covers
various human rights violations.
Human rights-related due diligence has been integrated into all
sensitive business areas where relevant, to ensure that human rights
are part of the overall risk assessment for insurance and investments
in non-listed asset classes.
We use a combination of sector and country-specific approaches
to identify human rights risks.
As a corporate insurer and investor, our human rights due diligence
process forms part of our overall sustainability approach which is
integrated into our broader risk management system.
Human rights in our business activities
Group People and Culture strategy highlights
"We secure your future" is our corporate purpose and living up to it
starts with our 154,862¹ (see table "S1-6.1") employees. Our Group
People and Culture strategy is based on fulfilling this purpose and on
our employer value proposition "We care for tomorrow", staying true
to our brand promise of expressing confidence in tomorrow, and
putting our customers at the center of what we do. This is what drives
our decisions and actions and we do it in line with our people
attributes: Entrepreneurship, Customer & Market Excellence, Trust, and
Collaborative Leadership.
Annual Report 2023 - Allianz Group