The performance of the Property­Casualty 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 unit­linked and capital­efficient products. We have successfully adjusted the product offer to match the low­yield environment in our key markets, such as Germany. The new products have a balanced opportunity­risk 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.
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.
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 contributions 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.
Allianz Share − Allianz shares up by 19 %. − Dividend increases to € 7.30.
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
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.
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.
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
Accounting and auditing 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.
“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)
− Bilateral credit agreements in some cases provide for termination 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 exercised, the respective credit lines have to be replaced by new credit lines under conditions then applicable.
Details on the variable compensation components: − 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 performance 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 responsibilities, 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 functional focus, the divisional quantitative targets are determined based on their key responsibilities. Qualitative targets represent 25 % and reflect the specific individual priorities for the performance year per member of the Board of Management. The performance 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 Super visory Board based on the Chairman’s personal performance.
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 pension payment3 SC4 DBO5 SC4 DBO5 SC4 DBO5 SC4 DBO5 SC4 DBO5 2014 – – – – – – – – – – –
Where an Allianz pension is immediately payable, transition payment amounts are set off accordingly.
5 The total remuneration reflects the remuneration of the full Supervisory Board in the respective year.
Most of our insurance markets are served by local Allianz companies. However, some business lines – such as Allianz Global Corporate & Specialty (AGCS), Allianz Worldwide Partners (AWP) and Credit Insurance – are run globally.
– Asset Management – Holding & Treasury – Banking – Alternative Investments selected product rAnGe insurAnce property-cAsuAlty
Italy Our Italian insurance entity Allianz Italy has a very strong multichannel 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 Advisors S.p.A., and bancassurance, with UniCredit as our main distribution partner.
Strategy and Steering 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.
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 communication globally. This will help increase both the convenience we offer our customers and our productivity.
Ensuring successful execution 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: − We will ensure mobilization of the entire global senior leadership 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.
Our guidelines on sensitive business apply to our entire insurance 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 delivered 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.
cuStOmEr cEntricity Putting True Customer Centricity at the core of our Renewal Agenda means providing a superior customer experience. By leveraging digital 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 innovative 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.
We have been a carbon-neutral company since 2012 and in 2015 301,339 credits were offset from our own projects, each one accounting for one metric ton of carbon.
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.
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 non­controlling interests was € 371 MN (2014: € 381 MN). Our largest non-controlling interests in net income related to Euler Hermes and PIMCO.
Interest and similar income 22,408 21,443 Operating income from financial assets and liabilities carried at fair value through income (net) (2,089) (1,301) Operating realized gains/losses (net) 6,726 3,205 Interest expenses, excluding interest expenses from external debt (375) (415) Operating impairments of investments (net) (1,258) (697) Investment expenses (1,094) (961)
Fee and commission income 10,945 10,119 Other income 476 216 Claims and insurance benefits incurred (net) (51,702) (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 (25,729) (23,351) Fee and commission expenses (3,777) (3,238) Operating amortization of intangible assets (19) (19) Restructuring charges (231) (16) Other expenses (129) (135) Reclassification of tax benefits 62 901 Operating profit 10,735 10,402
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 personal lines business.
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.
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.
AGCS excl. FFIC: 0.2 percentage points. This is predominantly the result of higher losses from natural catastrophes.
Operating investment income (net) increased slightly by € 54 MN to € 3,120 MN.
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 fixedindexed annuity business in the United States.
Present value of new business premiums (PVNBP)1,2 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 %.
1 PVNBP before non-controlling interests. 2 Prior year figures changed in order to reflect the roll out of profit source reporting to Malaysia.
Our loadings and fees were up by € 381 MN to € 5,667 MN. 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 premiums in Italy and France. This was partially offset by reduced single
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.
third-party assets under management by region/country1 as of 31 December 2015 [31 December 2014] in %
Operating profit 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 in the range of € 2.2 Bn to € 2.8 Bn. 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.
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 bondpurchasing program in 2017, will exert some upward pressure on European government benchmark bond yields. However, with shortterm 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 Federal Reserve, will weigh on the Euro. However, with the economic recovery in the Eurozone on a firmer footing, the Euro will gain support.
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 currency 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.
Life/Health liabilities 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 1 Based on the closing rates on the respective balance sheet dates.
2 For further information on the development of these assets, please refer to Asset Management.
Corporate and Other liabilities 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 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.
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 Property­Casualty insurance business and related expenses, life policy benefits, surrenders and cancellations, acquisition costs and operating costs.
Short-term debt funding Short­term funding sources available are the Medium­Term 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 year­end. 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.
Interest expenses € 64 mn 5.375 % bond issued by Allianz Finance ii B.V., Amsterdam Volume € 0.8 Bn Year of issue 2006 Maturity date perpetUAL isin De 000 A0g npz 3 Interest expenses € 43 mn 5.5 % bond issued by Allianz se Volume UsD 1.0 Bn Year of issue 2012 Maturity date perpetUAL
Reconciliations 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.
3 As per notes to the consolidated financial statements. 4 Excluding one-off effects from pension revaluation. For further details, please refer to note 6 to the consolidated financial statements.
Regulatory developments 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.
1 For further details on changes in eligible capital and solvency requirement, please refer to Balance Sheet Review from page 98.
aa– Not rated Not rated 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.
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 economics 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.
allianz gRoup: impact of model change, allocated Risk accoRding to Risk pRofile (total poRtfolio BefoRe non-contRolling inteRests)
€ mn Market risk Credit risk Underwriting risk Business risk Operational risk Diversification Total
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.
Risk and Opportunity Report and Financial Control 112 Risk and Opportunity Report 131 Controls over Financial Reporting and Risk Capital
ReinsuRance RecoveRaBles By Rating class1 € Bn as of 31 December 2015 2014
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.
Underwriting 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 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.
Property-Casualty 937 987 Life/Health 3,687 3,646 Asset Management – – Corporate and Other – – Total Group 4,623 4,634 Share of total Group pre-diversified risk 8.2 % 8.7 %
these two challenges together to find solutions for the long term: bridging the public-sector infrastructure investment gap and providing 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.
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 products that can be explored and purchased online to enabling management 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 modernization of European privacy legislation.
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, 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.
Participation certificates and subordinated liabilities 24 12,258 12,037 Total liabilities 782,843 742,085
Cash flow hedges Reclassifications to net income (7) 34 Changes arising during the year (41) 50
Depreciation and amortization 1,359 1,159 Loan loss provisions 60 45 Interest credited to policyholder accounts 5,319 3,879 Net change in: Financial assets and liabilities held for trading (3,250) 375 Reverse repurchase agreements and collateral paid for securities borrowing transactions (61) 107 Repurchase agreements and collateral received from securities lending transactions 2,365 466 Reinsurance assets (806) (218) Deferred acquisition costs 202 (1,219) Unearned premiums 775 1,120 Reserves for loss and loss adjustment expenses 2,040 1,039 Reserves for insurance and investment contracts 14,031 23,036 Deferred tax assets/liabilities 262 (10)
Joint arrangements are structures over which the Allianz Group and one or more other parties contractually agreed of sharing control, 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.
Certificated liabilities (Other liabilities) Amortized cost Subordinated liabilities (Other liabilities) Amortized cost
Available-for-sale investments Available-for-sale investments comprise debt and equity securities that are designated as available-for-sale or are not classified as heldto -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 regulations when they are realized. When an available-for-sale 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 securities are generally determined by applying the average cost method at the subsidiary level.
The oversight and monitoring of the Allianz Group’s reserves culminates 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 loss reserves.
Total number of fully consolidated entities 892 903 Number of joint ventures valued at equity 33 26 Number of associates valued at equity 62 58
Income from fully consolidated private equity investments (net) – – – – – – (52) (42) (8) 19 (60) (23) Interest expenses from external debt – – – – – – (849) (846) – – (849) (846)
Claims and insurance benefits incurred (net) (7,778) (7,512) (6,907) (6,312) (2,799) (2,758) (10,711) (10,140) (306) (286) (2,220) (1,956) – 86 (30,721) (28,878) Change in reserves for insurance and investment contracts (net) (387) (464) (39) (39) (13) (6) (17) (16) – – (4) (13) – – (460) (538)
Operating impairments of investments (net) (965) (377) (218) (293) – (1) (3) – – – (13) (6) – – (1,199) (677)
10 – Loans and advances to banks and customers loans and advances to banks and customers € mn as of 31 December 2015 2014
Reclassifications (151) – Carrying amount as of 31 December 613 870 Accumulated amortization as of 31 December 2,277 2,151 Cost as of 31 December 2,889 3,021 deFerred sales inducements deFerred sales inducements € mn
Amounts already allocated under local statutory or contractual regulations As of 1 January 15,020 13,231 Foreign currency translation adjustments 29 (7) Changes in the consolidated subsidiaries of the Allianz Group – (1)
32 – Income and expenses from fully consolidated private equity investments income and exPenses from fully consolidated Private equity investments € mn
40 – Fee and commission expenses fee and Commission expenses € mn property-Casualty Fees from credit and assistance business (999) (820) Service agreements (367) (360)
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).
fair values anD carrying amounts The following table compares the carrying amount with the fair value of the Allianz Group’s financial assets and financial liabilities: 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.
Government and agency mortgage-backed securities (residential and commercial) 43 3,695 – 3,738 Corporate mortgage-backed securities (residential and commercial) – 14,146 40 14,186 Other asset-backed securities 259 4,075 218 4,552 Government and government agency bonds 29,810 162,166 39 192,016 Corporate bonds 15,885 188,946 6,452 211,284 Other debt securities 273 1,966 729 2,968
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 benchmark 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.
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)
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 pre viously received collateral was sold or repledged by the Allianz Group.
Investments in investment funds investments in investment funDs by asset class € mn as of 31 December
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 contingent 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 scheduled 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.
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.
Changes in demographic assumptions 20 6 Changes in financial assumptions (664) 3,227 Experience adjustments (47) (111)
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), respectively.
Discount rate 2.4 2.2 Rate of compensation increase 2.1 2.1 Rate of pension increase 1.8 1.8 Rate of medical cost trend 1.0 2.6
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 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).
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 compensation component for the plan beneficiaries.
The total recognized compensation expenses for Class B equity units that are outstanding are recorded as a liability in other liabilities. As of 31 December 2015, the Allianz Group recorded a liability for the Class B equity units of € 15 mn (2014: € 47 mn).
AGR Services Pte Ltd., Singapore 100.0 AIM Equity EMU 1, Paris 100.0 3 AIM Equity US, Paris 100.0 3 AIM Singapore Pte Ltd., Singapore 100.0 AIM Underwriting Limited, Toronto, ON 100.0 Allegiance Marketing Group LLC, North Palm Beach, FL 100.0 Allianz (UK) Limited, Guildford 100.0 Allianz Actio France, Paris 81.5 5 Allianz Actions Aéquitas, Paris 69.8 5 Allianz Actions Emergentes, Paris 94.6 5 Allianz Actions Euro, Paris 83.1 5 Allianz Actions Euro Convictions, Paris 88.8 5 Allianz Actions Euro MidCap, Paris 72.2 5 Allianz Actions France, Paris 74.4 5 Allianz Actions Internationales, Paris 99.3 5 Allianz Africa S.A., Paris 100.0 Allianz Air France IFC, Paris 100.0 5 Allianz Alapkezelõ Zrt., Budapest 100.0 Allianz Amerika Aandelen Fonds, Rotterdam 84.7 5 Allianz Annuity Company of Missouri, Clayton, MO 100.0 Allianz Argentina Compañía de Seguros Generales S.A., Buenos Aires 100.0 Allianz Argentina RE S.A., Buenos Aires 100.0 Allianz Asac Actions, Paris 100.0 3 Allianz Asset Management of America Holdings Inc., Dover, DE 100.0 Allianz Asset Management of America L.P., Dover, DE 100.0 Allianz Asset Management of America LLC, Dover, DE 100.0 Allianz Asset Management U.S. Holding II LLC, Dover, DE 100.0 Allianz Australia Advantage Ltd., Sydney 100.0 Allianz Australia Employee Share Plan Pty Ltd., Sydney 100.0 Allianz Australia Insurance Limited, Sydney 100.0 Allianz Australia Life Insurance Limited, Sydney 100.0 Allianz Australia Limited, Sydney 100.0
Joint ventures A&A Centri Commerciali S.r.l., Milan 50.0 Allee-Center Kft., Budapest 50.0 Allianz C.P. General Insurance Co. Ltd., Bangkok 50.0 AMLI-Allianz Investment LP, Wilmington, DE 75.0 8 Ancilyze Technologies LLC, Oakbrook Terrace, IL 50.0 Atenction Integral a la Dependencia S.L., Cordoba 50.0 AZ/JH Co-Investment Venture (DC) LP, Wilmington, DE 80.0 8 AZ/JH Co-Investment Venture (IL) LP, Wilmington, DE 80.0 8 Bajaj Allianz Financial Distributors Limited, Pune 50.0 Companhia de Seguro de Créditos S.A., Lisbon 50.0 Dorcasia Ltd., Sydney 50.0 Euromarkt Center d.o.o., Ljubljana 50.0 Europe Logistics Venture 1 FCP-FIS, Luxembourg 83.3 5,8 Fiumaranuova S.r.l., Genoa 50.1 8 Guotai Jun'an Allianz Fund Management Co. Ltd., Shanghai 49.0 8 International Shopping Centre Investment S.A., Luxembourg 50.0 Israel Credit Insurance Company Ltd., Tel Aviv 50.0 Market Street Trust, Sydney 50.0 5 NET4GAS Holdings s.r.o., Prague 50.0 NRF (Finland) AB, Västeras 50.0
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 consolidated 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 supplementary provisions of the articles of incorporation are the responsibility 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.
Prof. Dr.-ing. Dr.-ing. e.H. Hans-Peter Keitel until 31 December 2015 Vice-President of BDI-Federation of German Industries
Dr. tHomas rabe CEO & Chairman of the Executive Board Bertelsmann SE & Co. KGaA
Mandates of the Members of the Supervisory Board 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.
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)
premiums written/eArned 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.
uneArned premiums 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.