Real estate held for investment 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.
fiNaNCiaL assets 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 together with the offsetting changes in fair value of the corresponding financial liabilities for unit-linked contracts.
The Allianz Group accounts for fixed assets of its fully consolidated 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.
The table below summarizes estimated useful lives for real estate held for own use, equipment, software, and fixed assets of alternative investments.
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.
Intangible assets with finite useful lives comprise long-term distribution agreements, acquired business portfolios and customer relationships.
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.
Reinsurance contracts The Allianz Group’s consolidated financial statements reflect the effects of ceded and assumed reinsurance contracts. Assumed reinsurance refers to the acceptance of certain insurance risks by the Allianz Group that other companies have underwritten. Ceded reinsurance refers to the transfer of insurance risk, along with the respective 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 reinsurance 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
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 accordance with the conditions of the reinsurance contracts, and in consideration of the original contracts for which the reinsurance was concluded.
Liability adequacy tests 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 policyholders, DAC, and maintenance expenses exceeds related unearned premiums while considering anticipated investment income.
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 projecting the IBNR reserves. IBNR reserves are reviewed and revised periodically as additional information becomes available and actual claims are reported.
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 investment contracts to better reflect the nature of the reserves and to only reflect the net underwriting result within the key performance indicator combined ratio.
The aggregate policy reserves for universal life-type insurance contracts are equal to the account balance, which represents premiums 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 contracts 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.
Reserves for premium refunds 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.
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.
Restructuring provisions 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.
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.
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 instruments designated as hedges of a net investment in a foreign operation is recognized in foreign currency trans lation adjustments.
preMiuMs 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 contracts that are not cancellable by the insurance company, guaranteed to be renewable, and expected to remain in force over an extended period of time.
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-forsale 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 investments in associates and joint ventures represents the share of net income from entities accounted for using the equity method.
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 realized and unrealized gains and losses from financial assets and liabilities 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).
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
− 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,
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.
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 mis match 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 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.
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 that are directly related to the processing and settlement of claims. Reinsurance recoveries are deducted from claims and insurance benefits.
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 and assumptions in the Life/Health reserving process, the Allianz Group has designed a two-stage reserving process: 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 consistent and plausible assumptions. The appropriateness of the reserves and compliance with the group-wide standards is confirmed by the local actuary.
Property-Casualty reserves are set by leveraging the use of actuarial techniques and educated judgment. A two-stage process exists for the setting of reserves in the Allianz Group: 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 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, 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.
fair VaLue aND iMpairMeNts of fiNaNCiaL iNstruMeNts 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.
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 observable substantially over the full term of the asset or liability and include 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 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.
Level 3 applies where 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 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.
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 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.
As of 31 December 2015, the Allianz Group reported financial instruments carried at fair value as follows:1
− € 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)
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 appropriate inclusion method of these investment funds.
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 further details, please refer to the explanations to the list of participations of the Allianz Group from page 234 of this Annual Report onwards.
2 Please refer to note 2 Summary of significant accounting policies and note 42 Income taxes for further details.
Liabilities for pension and similar obligations and related net pension expenses are determined in accordance with actuarial valuation 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 circumstances 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 discount rate assumptions are determined by reference to yields of highquality 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 discount rates.
Due to changing market and economic conditions, the underlying 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 Pensions and similar obligations.
restruCturiNG proVisioNs As of 31 December 2015, the Allianz Group reported provisions for restructuring programs of € 112 mn.2
The detailed formal plan of a restructuring program necessary for recognizing a restructuring provision is based on several estimates and assumptions, such as the number of employees to be dismissed, 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.
2 Please refer to note 2 Summary of significant accounting policies and note 50 Restructuring plans for further details.
4 – Recently adopted and issued accounting pronouncements and changes in the presentation of the consolidated financial statements reCeNtLY aDopteD aCCouNtiNG proNouNCeMeNts effective 1 January 2015
The following interpretation as well as the amendments to and revisions of existing standards became effective for the Allianz Group’s consolidated financial statements as of 1 January 2015: − IFRIC 21, Levies, − IAS 19, Defined Benefit Plan: Employee Contributions, − Annual Improvements to IFRSs 2010 – 2012 Cycle, − Annual Improvements to IFRSs 2011 – 2013 Cycle.
reCeNtLY issueD aCCouNtiNG proNouNCeMeNts effective on or after 1 January 2016 and not adopted early ifrs 9, Financial Instruments 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 managed. Furthermore, the standard introduces a new impairment model for debt instruments and provides new rules for hedge accounting.
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 leading to more financial instruments being measured as at fair value through profit and loss as well as the new impairment model.
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 evaluating 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 management 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.
ifrs 16, 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. For those leases previously classified as operating leases, the most significant effect of the new requirements 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.
Further amendments and interpretations In addition to the above-mentioned recently issued accounting pronouncements, 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.
further aMeNDMeNts aND iNterpretatioNs staNDarD/iNterpretatioN effeCtiVe Date ias 1, Disclosure Initiative Annual periods beginning on or after 1 January 2016 ifrs 11, Accounting for Acquisitions of Interests in Joint Operations
ChaNGe iN preseNtatioN 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.
5 – Consolidation 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.
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.
Part of Property-Casualty insurance business of UnipolSai Assicurazioni S.p.A., Bologna – 1 July 2014 257 Acquisition 1 At the date of initial consolidation.
The following section describes all significant acquisitions during the year ended 31 December 2015.
The final consideration paid in cash amounted to € 150 mn.
The following table summarizes the recognized amounts of assets acquired and liabilities assumed in the context of the TIO business and the mAC contract: propertY-CasuaLtY iNsuraNCe BusiNess of the territorY iNsuraNCe offiCe (tio) – iDeNtifiaBLe assets aND LiaBiLities € MN Fair value
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.
The acquired TIO business comprises goodwill which was determined as follows as of 1 January 2015: propertY-CasuaLtY iNsuraNCe BusiNess of the territorY iNsuraNCe offiCe (tio) – DeterMiNatioN of GooDWiLL
Asset management activities represent a separate reportable segment. 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.
In administrative expenses, acquisition-related costs in the amount of € 1 mn were included in fiscal year 2014 and in the amount of € 3 mn in fiscal year 2015.
siGNifiCaNt DisposaLs aND DeCoNsoLiDatioNs 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.
The impacts of the disposals, net of cash disposed, on the consolidated statement of cashflows for the year ended 31 December 2015 were as follows: iMpaCts of the DisposaLs € MN Total
GeNeraL seGMeNt reportiNG iNforMatioN Prices for transactions between reportable segments are set on an arm’s length basis in a manner similar to trans actions with third parties. Transactions between reportable segments are eliminated in the Consolidation. For the reportable segment Asset Management, interest revenues are reported net of interest expenses. Financial infor mation 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 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.
reCeNt orGaNizatioNaL ChaNGes Effective 1 January 2015, the Allianz Group has reorganized the structure of its insurance activities to reflect the changes in the responsibilities 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.
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.
Non-current assets and assets of disposal groups classified as held for sale 37 61 72 92 – – – 83 – – 109 235 € mn Property-Casualty Life/Health Asset Management Corporate and Other Consolidation Group liaBilities and eQuitY Financial liabilities carried at fair value through income 112 129 8,834 8,240 – – 750 648 (489) (521) 9,207 8,496 Liabilities to banks and customers 901 878 5,807 4,273 174 174 21,777 20,749 (3,127) (3,057) 25,531 23,015
Claims and insurance benefits incurred (net) (30,721) (28,878) (20,986) (20,775) – – – – 5 3 (51,702) (49,650) Change in reserves for insurance and investment contracts (net)2 (460) (538) (13,550) (12,563) – – – – (55) (828) (14,065) (13,929)
Operating amortization of intangible assets – – (19) (19) – – – – – – (19) (19)
2 For the year ended 31 December 2015, includes expenses for premium refunds (net) in Property-Casualty of € (240) mn (2014: € (307) mn).
Business segment information – total revenues and reConCiliation of operating profit (loss) to net inCome (loss)
Operating income from financial assets and liabilities carried at fair value through income (net) (25) 6 (2,050) (1,367) (8) 5 (15) 33 9 22 (2,089) (1,301) Operating realized gains/losses (net) 252 186 6,459 3,204 – – – – 15 (184) 6,726 3,205 Interest expenses, excluding interest expenses from external debt (72) (71) (108) (107) (12) (10) (454) (573) 270 346 (375) (415) Operating impairments of investments (net) (59) (20) (1,199) (677) – – – – – – (1,258) (697)
Reclassification of tax benefits – – – – – – – – 62 901 62 901
Non-operating investment result Non-operating income from financial assets and liabilities carried at fair value through income (net) (99) (114) (51) (131) – – (58) (33) (10) (25) (219) (303) Non-operating realized gains/losses (net) 746 463 298 183 – 4 337 184 (170) (22) 1,211 812 Non-operating impairments of investments (net) (223) (168) (18) (21) – – (27) (7) – – (268) (197)
Western & Southern Europe, Middle East, Africa, India Iberia & Latin America
Acquisition and administrative expenses (net), excluding one-off effects from pension revaluation (3,039) (3,012) (3,017) (2,799) (1,049) (1,035) (4,725) (4,506) (163) (136) (1,225) (924) 11 11 (13,208) (12,400)
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 reportaBle segments – propertY-CasualtY
Operating income from financial assets and liabilities carried at fair value through income (net) (43) 8 16 (8) 14 8 (9) (2) – – (4) – – – (25) 6 Operating realized gains/losses (net) 252 186 – – – – – – – – – – – – 252 186
reportaBle segments – life/health reportaBle segments – life/health € mn German Speaking Countries and Central & Eastern Europe
Deposits from insurance and investment contracts (8,553) (8,599) (18,495) (17,779) (1,368) (1,185) (9,163) (10,734) – – (4,052) (3,345) – – (41,632) (41,643)
Acquisition and administrative expenses (net), excluding one-off effects from pension revaluation (2,062) (2,017) (1,962) (1,845) (209) (202) (1,615) (1,060) (117) (85) (956) (653) – 2 (6,922) (5,860)
reportaBle segments – asset management reportaBle segments – asset management € mn
Administrative expenses (net), excluding acquisition-related expenses and one-off effects from pension revaluation (4,141) (3,787) Restructuring charges (41) 3 Operating expenses (4,182) (3,784)
Realized gains/losses (net) – 4 Acquisition-related expenses 11 6 One-off effects from pension revaluation (31) (14) Amortization of intangible assets (11) (11) Non-operating items (31) (15)
Cost-income ratio3 in % 64.5 59.2 1 Represents fee and commission income less fee and commission expenses. 2 Represents interest and similar income less interest expenses. 3 Represents operating expenses divided by operating revenues.
Income from fully consolidated private equity investments (net) – – – – (52) (42) – – (52) (42) Interest expenses from external debt (849) (846) – – – – – – (849) (846)
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 reportaBle segments – Corporate and other reportaBle segments – Corporate and other € mn Holding & Treasury Banking Alternative Investments Consolidation Corporate and Other
Operating income from financial assets and liabilities carried at fair value through income (net) (28) 27 16 10 (2) (4) – – (15) 33
One-off effects from pension revaluation 230 563 (1) (1) (5) (4) – – 224 558 Amortization of intangible assets (8) (8) – – – – – – (8) (8)
Financial assets held for trading Debt securities 489 402 Equity securities 187 195 Derivative financial instruments 1,582 1,618
Debt securities 2,645 1,887 Equity securities 2,365 1,773 7 – Cash and cash equivalents cash and cash equivalents € mn as of 31 December 2015 2014
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 2015 2014
Government and government agency bonds 2,184 363 (2) 2,544 2,398 379 – 2,777 1 Also include corporate mortgage-backed securities.
unrealized losses on available-For-sale investments and held-to-maturity investments € mn Up to 12 months Greater than 12 months Total as of 31 December Fair Value Unrealized
Government and government agency bonds 30,016 (1,212) 2,227 (253) 32,243 (1,464)
Government and agency mortgage-backed securities (residential and commercial) 46 (1) 63 (1) 109 (2) Corporate mortgage-backed securities (residential and commercial) 1,087 (17) 1,049 (27) 2,136 (44)
Government and government agency bonds 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 Development ). 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 2015, government and government agency bond performance has been negative, due to a increasing interest rate level, resulting in an increase of unrealized losses of € 1,126 mn. The unrealized 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.
contractual term to maturity The amortized cost and fair value of available-for-sale debt securities and held-to-maturity debt securities as of 31 December 2015, by contractual term to maturity, are as follows: contractual term to maturity € mn as of 31 December 2015 Amortized Cost Fair Value available-For-sale debt securities Due in 1 year or less 28,361 28,952 Due after 1 year and up to 5 years 102,847 108,383 Due after 5 years and up to 10 years 117,713 125,753 Due after 10 years 164,399 184,654 held-to-maturity debt securities Due in 1 year or less 365 397 Due after 1 year and up to 5 years 1,104 1,209 Due after 5 years and up to 10 years 599 695 Due after 10 years 677 864
Actual maturities may deviate from the contractually defined maturities 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.
Share of earnings 292 196 Share of other comprehensive income 80 54 Share of total comprehensive income 371 250 real estate held For investment real estate held For investment € mn
Cost as of 1 January 14,403 13,837 Accumulated depreciation as of 1 January (3,054) (3,053) Carrying amount as of 1 January 11,349 10,783
Changes in the consolidated subsidiaries of the Allianz Group 247 – Disposals and reclassifications into non-current assets and assets of disposal groups classified as held for sale (330) (291)
Reversals of impairments 40 44 Carrying amount as of 31 December 11,977 11,349 Accumulated depreciation as of 31 December 3,136 3,054 Cost as of 31 December 15,113 14,403
As of 31 December 2015, real estate held for investment pledged as security and other restrictions on title were € 36 mn (2014: € 36 mn).
Short-term investments and certificates of deposit 3,106 – 3,106 3,622 – 3,622
Loans and advances to banks 2,087 3,370 7,893 8,820 33,246 55,417 Loans and advances to customers 2,717 3,042 5,333 8,225 43,203 62,519
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).
11 – Reinsurance assets reinsurance assets € mn as of 31 December 2015 2014
Changes in aggregate policy reserves ceded to reinsurers are as follows: changes in aggregate policy reserves ceded to reinsurers € mn
Carrying amount as of 1 January 4,998 4,463 Foreign currency translation adjustments 397 430 Changes recorded in the consolidated income statements 183 114 Other changes (212) (9) Carrying amount as of 31 December 5,366 4,998
deFerred acquisition costs changes in deFerred acquisition costs € mn property-casualty Carrying amount as of 1 January 4,595 4,354
Changes in the consolidated subsidiaries of the Allianz Group – 39 Foreign currency translation adjustments 44 82
Derivative financial instruments used for hedging that meet the criteria for hedge accounting and firm commitments 565 477 Property and equipment
Other assets 1,664 1,437 1 Includes other assets due within one year of € 31,068 mN (2014: € 28,069 mN).
present value oF Future proFits present value oF Future proFits € mn
Cost as of 1 January 3,021 2,954 Accumulated amortization as of 1 January (2,151) (1,908) Carrying amount as of 1 January 870 1,046 Foreign currency translation adjustments (6) 27 Changes in shadow accounting 34 (34)
Cost as of 1 January 3,637 3,497 Accumulated depreciation as of 1 January (1,071) (1,074) Carrying amount as of 1 January 2,566 2,423
Changes in the consolidated subsidiaries of the Allianz Group 84 – Disposals and reclassifications into non-current assets and assets of disposal groups classified as held for sale (110) (116)
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
Cost as of 1 January 6,360 5,632 Accumulated amortization as of 1 January (4,218) (3,800) Carrying amount as of 1 January 2,142 1,832
Changes in the consolidated subsidiaries of the Allianz Group (15) 9 Disposals and reclassifications into non-current assets and assets of disposal groups classified as held for sale (14) (7) Foreign currency translation adjustments 8 15
Cost as of 1 January 3,867 3,823 Accumulated depreciation as of 1 January (2,576) (2,651) Carrying amount as of 1 January 1,291 1,173
Changes in the consolidated subsidiaries of the Allianz Group 63 18
Carrying amount as of 31 December 1,426 1,291 Accumulated depreciation as of 31 December 2,828 2,576 Cost as of 31 December 4,254 3,867
Changes in the consolidated subsidiaries of the Allianz Group (197) –
Impairments – (1) Carrying amount as of 31 December 1,763 1,465 Accumulated depreciation as of 31 December 387 819 Cost as of 31 December 2,151 2,284 1 Include fixed assets of wind parks, solar parks and Selecta.
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 2015 2014
Bürgel Wirtschaftsinformationen, Hamburg During the fourth quarter of 2015, the Allianz Group decided to dispose 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 (PropertyCasualty ), 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.
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.
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 port folios” 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”.
Cost as of 1 January 13,156 12,534 Accumulated impairments as of 1 January (990) (990) Carrying amount as of 1 January 12,166 11,544
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)).
Compared to 2014, the composition of several CGUs and, correspondingly, 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.
Brand names Brand names in 2014 consisted primarily of the brand name “Selecta” which was disposed of in the fourth quarter of 2015.
Due to the rebranding activities of the Allianz Group in the Russian 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.
Impairment test for goodwill and other intangible assets with indefinite useful lives
− Asia Pacific, − 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 &
CGUs in the Life/Health business segment are: − Insurance German Speaking Countries, − Health Germany, − Insurance Western & Southern Europe, Middle East and Africa, including Belgium, France, Greece, Italy, Luxembourg, the Netherlands, Turkey, Egypt, Lebanon and Africa,
The CGU Selecta Group S.à r.l. in the business segment Corporate and Other was disposed of in the fourth quarter of 2015.
liFe/health Insurance German Speaking Countries 611 – 602 – Health Germany 327 – 326 – Insurance Western & Southern Europe, Middle East and Africa 654 – 656 – Asia Pacific – – 171 – Central and Eastern Europe 23 – 23 – Insurance usa 471 – 454 –
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.
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 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.
Insurance German Speaking Countries 7.8 1.0 Insurance Western & Southern Europe, Middle East and Africa 9.2 2.1 Insurance Iberia & Latin America 16.5 4.5 Asia Pacific 11.5 4.0 Central and Eastern Europe 8.8 1.5 Global Insurance Lines & Anglo Markets 8.8 1.0 Specialty Lines i 8.0 1.0 Specialty Lines ii 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.
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: reFerence rates For the cgus in the liFe/health business segment cgus in the Life/Health business segment
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
Health Germany Euro swap curve minus 10 bps credit risk adjustment plus 25 bps volatility adjustment
Asia Pacific Local swap curve minus 10 bps credit risk adjustment (South Korea only) plus 15 bps volatility adjustment (South Korea only)
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 9.6 % and the eternal growth rate is 1.0 %.
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 costincome 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.
Collateral received from securities lending transactions and derivatives 3,573 – 3,573 2,715 – 2,715 liabilities to banks and customers by contractual maturity liabilities to banks and customers by contractual maturity € mn as of 31 December 2015 Up to 3 months > 3 months up to 1 year > 1 year up to 3 years > 3 years up to 5 years Greater than 5 years Total
Reserves for loss and loss adjustment expenses for the Property- Casualty business segment are described in detail in the following sections.
Foreign currency trans lation adjustments and other changes1 1,755 (534) 1,221 2,477 (478) 1,999 Changes in the consolidated subsidiaries of the Allianz Group (39) 1 (38) – – –
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).
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), consistently using the exchange rates applicable at the respective reporting date. This ensures that the reserves reconcile with reserves in the consolidated balance sheet.
reserves For loss and loss adjustment expenses 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 2014 2015 Total 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.
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 reasonable potential outcomes for A & E liabilities provided in these analyses is particularly large. Given this inherent uncertainty in estimating A & E liabilities, significant deviation from the currently carried A & E reserve position is possible.
Foreign currency translation adjustments 9,358 9,600 Changes recorded in the consolidated income statement 2,546 3,514 Premiums collected 24,076 28,085 Separation of embedded derivatives 90 972 Interest credited 5,319 3,879 Dividends allocated to policyholders 1,368 1,356 Releases upon death, surrender and withdrawal (16,145) (13,711) Policyholder charges (1,652) (1,628) Portfolio acquisitions and disposals (270) (52) Other changes1 1,108 1,302
Global Insurance Lines & Anglo Markets 118 1,879 – 6 1,885 – 1,885
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.
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 87 % (2014: 87 %) of non-unit-linked reserves in 2015, can be summarized by country as follows: weighted average guaranteed minimum interest rates oF liFe insurance entities as of 31 December 2015 2014
Future policy benefits As of 31 December 2015, benefits for insurance and investment contracts 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 € 1,029 Bn.
Changes in the consolidated subsidiaries of the Allianz Group – 1 1 – – –
Releases upon death, surrender and withdrawal (5,842) (4,811) (10,653) (5,140) (4,453) (9,593)
Deposits retained for reinsurance ceded 1,636 1,843 Derivative financial instruments used for hedging that meet the criteria for hedge accounting and firm commitments 472 281 Financial liabilities for puttable equity instruments 2,585 1,793 Other liabilities 7,159 7,520 1 Includes other liabilities due within one year of € 25,568 mn (2014: € 25,013 mn).
1 Except for interest rates. Interest rates represent the weighted average. 2 Includes senior bonds issued by Allianz Finance II B.V., guaranteed by Allianz SE and money market securities issued by Allianz Finance Corporation, a wholly owned subsidiary of Allianz SE, which are fully and unconditionally guaranteed by Allianz SE.
24 – Subordinated liabilities subordinated liabilities € mn1 Contractual maturity date as of as of 31 December
Current interest rate – – – – – 4.47 % – –
Total Allianz SE2 – – – – – 11,962 11,962 11,371 Banking subsidiaries
Current interest rate – – – – – 1.45 % – –
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.
Non-controlling interests 2,955 2,955 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.
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 shares from the Authorized Capital 2014/I 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/II) 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).
Further, as of 31 December 2015, 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 companies have issued against cash payments according to the resolutions of the AGm on 5 May 2010 or 7 May 2014, are exercised or the conversion obligations under such bonds are fulfilled, and only insofar as 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 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 secured by the Conditional Capital 2010/2014. On or before 31 December 2015, 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 454,248,039 453,736,619 Capital increase for employee share programs – 500,000 Changes in number of treasury shares 575,599 11,420 Number of issued shares outstanding as of 31 December 454,823,638 454,248,039 Treasury shares1 2,176,362 2,751,961 Total number of issued shares 457,000,000 457,000,000 1 Thereof 2,175,776 (2014: 2,751,360) own shares held by Allianz SE.
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 subsidiaries 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.
non-controlling interests non-controlling interests € mn as of 31 December 2015 2014
Unrealized gains and losses (net) 162 189 Share of earnings 371 381 Other equity components 2,422 2,385
The share of earnings attributable to non-controlling interests mainly 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 noncontrolling interests mainly consist of Euler Hermes Group companies 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.
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.
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 %).
28 – Income from financial assets and liabilities carried at fair value through income (net)
Investments in associates and joint ventures1 148 27 Real estate held for investment 115 141 Loans and advances to banks and customers 876 287 Non-current assets classified as held for sale 108 32 realized losses Available-for-sale investments
Investments in associates and joint ventures2 (5) (12) Real estate held for investment (1) (4) Loans and advances to banks and customers (5) (1) Non-current assets classified as held for sale – (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).
Income from real estate held for own use Realized gains from disposals of real estate held for own use 31 24 Other income from real estate held for own use 4 2
Expenses Cost of goods sold (226) (216) General and administrative expenses (481) (469) Interest expenses (77) (54)
Claims and insurance benefits paid (32,194) (21,015) 72 (53,137) Change in reserves for loss and loss adjustment expenses (814) (522) – (1,335)
Ceded Claims and insurance benefits paid 2,163 476 (67) 2,572 Change in reserves for loss and loss adjustment expenses 124 75 – 198
Claims and insurance benefits paid (30,797) (20,946) 47 (51,696) Change in reserves for loss and loss adjustment expenses (224) (231) 12 (444)
Ceded Claims and insurance benefits paid 2,095 375 (42) 2,428 Change in reserves for loss and loss adjustment expenses 49 27 (14) 62
Other insurance reserves (3) (162) – (165) Expenses for premium refunds (241) (7,247) (53) (7,540)
Ceded Aggregate policy reserves 9 338 – 347 Other insurance reserves – 8 – 9 Expenses for premium refunds – 5 – 5
Additions to allowances, including direct impairments (142) (133) Amounts released 79 68 Recoveries on loans previously impaired 3 20 37 – Impairments of investments (net)
Investments in associates and joint ventures (11) – Real estate held for investment (37) (24) Loans and advances to banks and customers (26) (16) Non-current assets classified as held for sale – (5)
reversals of impairments Real estate held for investment 40 44 Loans and advances to banks and customers 8 6 38 – Investment expenses investment expenses € mn
Corporate and other Service agreements (410) (269) Investment advisory and banking activities (335) (298)
Realized losses from disposals of real estate held for own use – (7) Expenses from alternative investments (121) (103) Expenses from non-current assets classified as held for sale (5) (18)
For the years ended 31 December 2015 and 2014, the income taxes relating to components of other comprehensive income consist of the following: inCome taxes relating to Components of other Comprehensive inCome € mn
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 following 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 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
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 %).
Income before income taxes 10,196 8,848 Applied weighted income tax rate 30.0 % 29.8 % Calculated income taxes 3,054 2,636 Trade tax and similar taxes 185 210 Net tax exempt income (108) (2) Effects of tax losses 82 142 Other effects (3) (740) Effective income taxes 3,209 2,245
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 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 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 Decem ber 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).
Deferred tax assets Financial assets carried at fair value through income 136 53
Deferred acquisition costs 4,958 4,824 Other assets 1,267 1,017 Intangible assets 661 410 Insurance reserves 2,808 2,691 Pensions and similar obligations 2,674 2,609 Other liabilities 524 450 Total deferred tax liabilities 22,483 21,773 Effect of netting (18,480) (16,841) Net deferred tax liabilities 4,003 4,932 Net deferred tax assets (liabilities) (2,609) (3,886)
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 forward can be used for an unlimited period of time.
For the year ended 31 December 2015, the Allianz Group recognized 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.
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.
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.
Financial assets for unit-linked contracts 102,954 2,755 164 105,873 Derivative financial instruments and firm commitments included in other assets – 565 – 565 financial liabilities Financial liabilities held for trading
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)
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 designated at fair value through income – Debt securities The fair value is mainly determined based on net asset values for funds and the market approach.
− Other asset-backed securities, − Government and government agency bonds, − Corporate bonds, and − Other debt securities.
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 pri vate 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.
Description Fair value as of 31 December 2015 Valuation technique(s) Non-market observable input(s) Range
Available-for-sale investments Equity securities 5,719 Net asset value n/a n/a Corporate bonds 6,076 Discounted cash flow method Option-adjusted spread 40 bps – 1,415 bps
Financial liabilities for unit-linked contracts 166 5 1 (10) 2 – – – – 164 – Financial liabilities for puttable equity instruments 15 9 – (6) 1 – – – – 19 – Total financial liabilities at fair value 7,310 1,865 26 (793) (888) – – 796 – 8,317 701
Reconciliation of level 3 financial instruments The following tables show reconciliations of the financial instruments carried at fair value and classified as level 3.
Financial assets held for trading Debt securities – – – – – – – – – – –
Financial assets for unit-linked contracts 166 5 1 (10) 2 – – – – 164 – Total financial assets at fair value 14,037 5,907 164 (2,311) 381 238 (117) 611 234 19,145 (18)
Additions through purchases and issues Net transfers into (out of) level 3
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).
Level 3 – Non-market observable inputs Total financial assets Held-to-maturity investments 1,182 3,525 2 4,710 Investments in associates and joint ventures 330 18 4,472 4,820 Real estate held for investment – – 16,323 16,323 Loans and advances to banks and customers 494 96,339 43,403 140,238 financial liabilities Liabilities to banks and customers 7,984 1,608 14,015 23,607
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, 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.
Loans and advances 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.
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 course of this, the underlying assets of the CDO vehicle were recognized as available-for-sale investments. For the year ended 31 December 2015, the net profit related to the CDOs was € 19 mn.
transfers of financial assets 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 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. 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 trans actions 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).
45 – Interests in unconsolidated structured entities nature, purpose anD role of the allianz group in structureD entities 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.
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.
Investments in asset-backed securities (abs) and mortgage-backed securities (mbs) issued by securitization vehicles The Allianz Group acts as investor in AbS- or mbS-issuing securitization 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.
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 December 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.
Fund management activities Within the asset management business, investment funds are established 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.
Reinsurance business The Allianz Group also uses structured entities in the reinsurance business, where hurricane and earthquake risks are sourced to external investors via the issuance of catastrophe bonds issued by bankruptcy -remote structured entities. The performance of the issued bonds is linked to the occurrence or non-occurrence of specific catastrophe 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.
Credit card – 270 – 270 1 In 2015, € 2.2 Bn were reclassified from rmBS to CmO/CDO.
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 support to these entities, nor does it have the intention to provide such support in the future.
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 products, 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 consolidated 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 additional profit sharing payments from PImCO of at least USD 200 mn. Allianz believes that this lawsuit is without merit. The ultimate outcome of this matter cannot yet be determined.
Out of the total investment fund exposure, investments of € 10.1 bn (2014: € 10.0 bn) relate to listed investment funds, whereas investments 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 support to these entities, nor does it have the intention to provide such support in the future.
In connection with the sale of various of the Allianz Group’s former 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.
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 indemnification contracts have an external credit rating of A.
Other contingencies In accordance with § 5 (10) of the Statutes of the Joint Fund for Securing 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.
Loan commitments The Allianz Group engages in various lending commitments to meet the financing needs of its customers. They consist of advances, standby 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 commitments may expire without being drawn upon, these loan commitments are not representative of actual liquidity requirements for such commitments.
As of 31 December 2015, the future minimum lease payments under non-cancelable operating and finance leases were as follows: Operating leases future minimum lease payments - operating leases € mn
Due in 1 year or less 1 1 Due after 1 year and up to 5 years 21 21 Due after 5 years 1,071 181
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.
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.
(2014: € 10.3 mn) and an obligation for special payments of, in principle, € 157 mn (2014: € 157 mn) per year.
In accordance with §§ 221 ff. of the German Insurance Supervision Act, Allianz Private Kranken versicherungs-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 KrankenversicherungsAG to the insurance guarantee scheme amount to an obligation for special payments of € 52 mn (2014: € 51 mn).
In December 2002, Protektor Lebensversicherungs-Aktiengesellschaft (“Protektor”), a life insurance company whose role is to protect policyholders of all German life insurers, was founded. Allianz Lebens versicherungs-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 contributions to the mandatory insurance scheme mentioned above and assuming that no other life insurer is exempted from payments, the aggregate out standing commitment of Allianz LebensversicherungsAktiengesellschaft 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 Wertpapierhandelsunternehmen ”, Berlin). The annual contribution is determined in consideration 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 (“Bundesanstalt für Finanzdienst leistungsaufsicht” – 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 entities in 2015 in the amount of € 8 mn (2014: € 5 mn). The above-mentioned entities have appealed the special contributions. For received but not yet paid notifications and for the estimated special contribution for 2016, adequate provisions have been accrued.
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 48 – 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 arrangements, the future cost to the employer of a defined benefit plan is not known with certainty in advance.
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.
Germany 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.
Most active German employees participate in contributionbased systems using different vehicles to cover the base salary both below and above the German social security ceiling. The Allianz Versorgungskasse VVaG (AVK), financed through employee contributions, and the Allianz Pensionsverein e.V. (APV), financed by the employer, provide pension benefits for the base salary up to the German 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 investment of the assets and the risk management. AVK is subject to German insurance regulation.
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. Independently 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.
Since 1 January 2015 Allianz Group contributes for new entrants and for the majority of the contribution-based pension plan beneficiaries to a new low risk pension plan, My Allianz Pension, where only the contributions are preserved.
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 benefit 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.
Employees generally have a choice between lump sum payments 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.
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. PZEs almost qualify as defined contribution plans with minor risk exposure.
The U.K. operates a funded pension scheme, the Allianz Retirement 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 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 legally 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 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 (1.75 % in 2015, 1.25 % in 2016). 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.
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.
During the year ended 31 December 2015, the defined benefit costs related to post-retirement health benefits amounted to € 1 mn (2014: € – mn).
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.
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.
Due to a well-diversified portfolio of 136,000 plan parti cipants, there is no reasonable uncertainty of future cash flows expected that could have an impact on the liquidity of the Allianz Group.
Real allocation 2014 as of 31 December % % € mn € mn
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: − 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
Contributions 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.
During the year ended 31 December 2015, the Allianz Group recognized 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).
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
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).
As of 31 December 2015, the Allianz Group recorded provisions of € 26 mn (2014: € 54 mn) in other liabilities for the unexercised SARs.
Restricted stock units 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 exercise date, the Allianz Group can choose the settlement method for each unit.
As of 31 December 2015, the Allianz Group recorded provisions of € 470 mn (2014: € 399 mn) for these RSUs in other liabilities.
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. ( AllianzGI L.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 participants, 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 year ended 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.
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.
Weighted-average fair value of options granted € – 567.49 Assumptions: Expected term (years) – 3.84 Expected volatility % – 24.9 Expected dividend yield % – 13.3 Risk free rate of return % – 1.1
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 50 – Restructuring plans As of 31 December 2015, the Allianz Group has provisions for restructuring 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 weightedaverage remaining contractual life of 2.17 years.
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).
As of 1 January 109 214 New provisions 200 8 Additions to existing provisions 8 24 Release of provisions recognized in prior years (10) (28) Utilization of provisions via payments (31) (75) Utilization of provisions via transfers (163) (35) Foreign currency translation adjustments – 2 As of 31 December 112 109
allianz global investor’s restructuring plan Allianz Global Investors (AllianzGI) launched the restructuring program AllianzGI 2.0 in the third quarter of 2015. The program aims to position AllianzGI as a global investment leader and affects all functions 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 approximately 300 full-time equivalents by 2018. In addition, the reorganization and outsourcing of business processes will be going along with the impairment and shut-down of IT systems and early contract cancellation with service providers.
fireman’s funD’s restructuring plan During 2015, the Allianz Group realigned its Property-Casualty insurance 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 comprised the integration of Fireman’s Fund Insurance Company’s commercial 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.
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 expectations as well as new regulatory requirements and to strengthen sustainability 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.
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 endto -end processes and range of products will be reduced. The reduction of complexity will result in lower staffing requirements.
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 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.
Weighted average number of common shares outstanding 454,367,277 453,841,370 Potentially dilutive common shares resulting from assumed conversion of: Share-based compensation plans 61,755 425,532 Weighted average number of common shares outstanding after assumed conversion 454,429,033 454,266,902
For the year ended 31 December 2015, the weighted average number of common shares excludes 2,632,723 (2014: 2,738,082) treasury shares.
The average total number of employees for the year ended 31 Decem­ ber 2015 was 146,726.
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.
Audit fees 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.
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).
The equity­related 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).
AZ-Argos 61 Vermögensverwaltungsgesellschaft mbH & Co. KG, Munich 100.0 AZ-Argos 64 Vermögensverwaltungsgesellschaft mbH & Co. KG, Munich 100.0 AZ-Argos 68 Vermögensverwaltungsgesellschaft mbH, Munich 100.0 AZ-Argos 69 Vermögensverwaltungsgesellschaft mbH, Munich 100.0 AZ-Argos 70 Vermögensverwaltungsgesellschaft mbH & Co. KG, Munich 100.0 AZ-Argos 71 Vermögensverwaltungsgesellschaft mbH & Co.KG, Munich 100.0 AZ-GARI Vermögensverwaltungsgesellschaft mbH & Co. KG, Munich 100.0 AZL AI Nr. 1 GmbH, Munich 100.0 AZL PE Nr. 1 GmbH, Munich 100.0 AZRE AZD P&C Master Fund, Munich 100.0 3 AZS-Arges Vermögensverwaltungsgesellschaft mbH, Munich 100.0 AZ-SGD Direkt Infrastruktur GmbH, Munich 100.0 AZ-SGD Infrastrukturfonds GmbH, Munich 100.0 AZ-SGD Private Equity Fonds 2 GmbH, Munich 100.0 AZ-SGD Private Equity Fonds GmbH, Munich 100.0 AZT Automotive GmbH, Ismaning 100.0 Brahms Beteiligungs GmbH & Co. KG, Stuttgart 94.9 BrahmsQ Objekt GmbH & Co. KG, Stuttgart 95.0 Bürgel Wirtschaftsinformationen GmbH & Co. KG, Hamburg 50.1 Bürgel Wirtschaftsinformationen VerwaltungsGmbH, Hamburg 50.4 dbi-Fonds Ammerland, Frankfurt am Main 100.0 3 dbi-Fonds DAV, Frankfurt am Main 100.0 3 dbi-Fonds WE, Frankfurt am Main 100.0 3 Deutsche Lebensversicherungs-Aktiengesellschaft, Berlin 100.0 Donator Beratungs GmbH, Munich 100.0 Donator Beteiligungsverwaltung GmbH, Munich 100.0 Euler Hermes Aktiengesellschaft, Hamburg 100.0 Euler Hermes Collections GmbH, Potsdam 100.0 Euler Hermes Rating Deutschland GmbH, Hamburg 100.0 GA Global Automotive Versicherungsservice GmbH, Halle (Saale) 100.0 InnoSolutas GmbH, Bad Friedrichshall 100.0 KomfortDynamik Sondervermögen, Frankfurt am Main 99.3 5 KVM ServicePlus - Kunden- und Vertriebsmanagement GmbH, Halle (Saale) 100.0 Mondial Kundenservice GmbH, Nuremberg 100.0 Münchener und Magdeburger Agrarversicherung Aktiengesellschaft, Munich 100.0 My Finance Coach Stiftung GmbH, Munich 100.0 Objekt Burchardplatz GmbH & Co. KG, Stuttgart 100.0 Oldenburgische Landesbank Aktiengesellschaft, Oldenburg 90.2 PIMCO Deutschland GmbH, Munich 100.0 4 REC Frankfurt Objekt GmbH & Co. KG, Hamburg 80.0 REC Frankfurt zweite Objektverwaltungsgesellschaft mbH, Hamburg 60.0 RehaCare GmbH, Munich 100.0 risklab GmbH, Munich 100.0 Roland Holding GmbH, Munich 75.2 Signa 12 Verwaltungs GmbH, Düsseldorf 94.9 Spherion Beteiligungs GmbH & Co. KG, Stuttgart 94.9 Spherion Objekt GmbH & Co. KG, Stuttgart 100.0 UfS Beteiligungs-GmbH, Munich 100.0 VLS Versicherungslogistik GmbH, Berlin 100.0 Volkswagen Autoversicherung AG, Braunschweig 100.0 Volkswagen Autoversicherung Holding GmbH, Braunschweig 49.0 2 Windpark Aller-Leine-Tal GmbH & Co. KG, Sehestedt 100.0 Windpark Berge-Kleeste GmbH & Co. KG, Sehestedt 100.0
Windpark Büttel GmbH & Co. KG, Sehestedt 100.0 Windpark Calau GmbH & Co. KG, Sehestedt 100.0 Windpark Cottbuser See GmbH & Co. KG, Sehestedt 100.0 Windpark Dahme GmbH & Co. KG, Sehestedt 100.0 Windpark Eckolstädt GmbH & Co. KG, Sehestedt 100.0 Windpark Emmendorf GmbH & Co. KG, Sehestedt 100.0 Windpark Freyenstein-Halenbeck GmbH & Co. KG, Sehestedt 100.0 Windpark Kesfeld-Heckhuscheid GmbH & Co. KG, Sehestedt 100.0 Windpark Kirf GmbH & Co. KG, Sehestedt 100.0 Windpark Kittlitz GmbH & Co. KG, Sehestedt 100.0 Windpark Pröttlin GmbH & Co. KG, Sehestedt 100.0 Windpark Quitzow GmbH & Co. KG, Sehestedt 100.0 Windpark Redekin-Genthin GmbH & Co. KG, Sehestedt 100.0 Windpark Schönwalde GmbH & Co. KG, Sehestedt 100.0 Windpark Waltersdorf GmbH & Co. KG Renditefonds, Sehestedt 100.0 Windpark Werder Zinndorf GmbH & Co. KG, Sehestedt 100.0
Associates AV Packaging GmbH, Munich 51.0 9 DCSO Deutsche Cyber-Sicherheitsorganisation GmbH, Berlin 25.0 esa EuroShip GmbH & Co. KG Underwriting for Shipping, Bad Friedrichshall 40.0 Mühl Product & Service und Thüringer Baustoffhandel Beteiligungs- und Verwaltungs GmbH, Kranichfeld 25.0 Reisegarant GmbH, Hamburg 24.0 T&R GP Management GmbH, Bonn 25.0 T&R Investment GmbH & Co. KG, Frankfurt am Main 25.0 T&R MLP GmbH, Bonn 25.0 T&R Real Estate GmbH, Bonn 25.0 Umspannwerk Putlitz GmbH & Co. KG, Oldenburg 25.4
Allianz EDUKACJA S.A., Bialobrzegi 100.0 Allianz Egypt for Financial Investments Company S.A.E., New Cairo 100.0 Allianz Elementar Lebensversicherungs-Aktiengesellschaft, Vienna 100.0 Allianz Elementar Versicherungs-Aktiengesellschaft, Vienna 100.0 Allianz Emerging Markets Flexible Bond, Senninger-
Allianz Geldmarkt Fonds, Rotterdam 66.4 5 Allianz General Insurance Company (Malaysia) Berhad p.l.c., Kuala Lumpur 100.0 Allianz General Laos Ltd., Vientiane 51.0 Allianz generalni sluzby s.r.o., Prague 100.0 Allianz Global Assistance International SA, Paris 100.0 Allianz Global Assistance New Zealand Limited, Auckland 100.0 Allianz Global Corporate & Specialty do Brasil Participações Ltda., Rio de Janeiro 100.0 Allianz Global Corporate & Specialty of Africa (Proprietary) Ltd., Johannesburg 100.0 Allianz Global Corporate & Specialty South Africa Ltd., Johannesburg 100.0 Allianz Global Emerging Markets Equity Dividend, Senningerberg 60.0 5 Allianz Global Equity Selection, Senningerberg 99.0 5 Allianz Global Investors Asia Pacific Ltd., Hong Kong 100.0 Allianz Global Investors Distributors LLC, Dover, DE 100.0 Allianz Global Investors Fund Management LLC, Dover, DE 100.0 Allianz Global Investors Ireland Ltd., Dublin 100.0 Allianz Global Investors Japan Co. Ltd., Tokyo 100.0 Allianz Global Investors Korea Limited, Seoul 100.0 Allianz Global Investors Nominee Services Ltd., George Town 100.0 Allianz Global Investors Schweiz AG, Zurich 100.0 Allianz Global Investors Singapore Ltd., Singapore 100.0 Allianz Global Investors Taiwan Ltd., Taipei 100.0 Allianz Global Investors U.S. Holdings LLC, Dover, DE 100.0 Allianz Global Investors U.S. LLC, Dover, DE 100.0 Allianz Global Life Ltd., Dublin 100.0 Allianz Global Risks US Insurance Company Corp., Chicago, IL 100.0 Allianz Groen Rente Fonds, Rotterdam 100.0 5 Allianz Hayat ve Emeklilik A.S., Istanbul 89.0 Allianz Hellas Insurance Company S.A., Athens 100.0 Allianz Hold Co Real Estate S.à r.l., Luxembourg 100.0 Allianz Holding eins GmbH, Vienna 100.0 Allianz Holding France SAS, Paris 100.0 Allianz Holdings plc, Guildford 100.0 Allianz Hospitaliers Euro, Paris 100.0 3
Allianz Hospitaliers Valeurs Durables, Paris 100.0 3 Allianz Hungária Biztosító Zrt., Budapest 100.0 Allianz IARD S.A., Paris 100.0 Allianz IARD Vintage, Paris 100.0 3 Allianz Immo, Paris 42.8 2,5 Allianz Individual Insurance Group LLC, Minneapolis, MN 100.0 Allianz Informatique G.I.E., Paris 100.0 Allianz Infrastructure Czech HoldCo I S.à r.l., Luxembourg 100.0 Allianz Infrastructure Czech HoldCo II S.à r.l., Luxembourg 100.0 Allianz Infrastructure Luxembourg Holdco I S.A., Luxembourg 100.0 Allianz Infrastructure Luxembourg Holdco II S.A., Luxembourg 100.0 Allianz Infrastructure Luxembourg I S.à r.l., Luxembourg 100.0 Allianz Infrastructure Norway Holdco I S.à r.l., Luxembourg 100.0 Allianz Infrastructure Spain Holdco I S.à r.l., Luxembourg 100.0 Allianz Infrastructure Spain Holdco II S.à r.l., Luxembourg 100.0 Allianz Insurance Company Ghana Limited, Accra 100.0 Allianz Insurance Company Lanka Limited, Saram 100.0 Allianz Insurance Company of Kenya Limited, Nairobi 100.0 Allianz Insurance Company-Egypt S.A.E., Cairo 95.0 Allianz Insurance plc, Guildford 100.0 Allianz International Ltd., Guildford 100.0 Allianz Inversiones S.A., Bogotá D.C. 100.0 Allianz Invest 10 Division S/U, Vienna 100.0 3 Allianz Invest 11 Division Leben/Kranken, Vienna 100.0 3 Allianz Invest 12 Division Leben/Kranken, Vienna 100.0 3 Allianz Invest 50, Vienna 100.0 5 Allianz Invest Alternativ, Vienna 100.0 5 Allianz Invest Cash, Vienna 80.6 5 Allianz Invest d.o.o., Zagreb 100.0 Allianz Invest Kapitalanlagegesellschaft mbH, Vienna 100.0 Allianz Invest Ostrent, Vienna 95.7 5 Allianz Invest Spezial 3, Vienna 100.0 3 Allianz Investment Management LLC, Minneapolis, MN 100.0 Allianz Investmentbank Aktiengesellschaft, Vienna 100.0 Allianz Investments I Luxembourg S.à r.l., Luxembourg 100.0 Allianz Investments II Luxembourg S.à r.l., Luxembourg 100.0 Allianz Investments III Luxembourg S.à r.l., Luxembourg 100.0 Allianz Irish Life Holdings p.l.c., Dublin 66.5 Allianz kontakt s.r.o., Prague 100.0 Allianz Langlopend Obligatie Fonds, Rotterdam 100.0 5 Allianz Leasing Bulgaria AD, Sofia 51.0 Allianz Life & Annuity Company, Minneapolis, MN 100.0 Allianz Life (Bermuda) Ltd., Hamilton 100.0 Allianz Life Assurance Company-Egypt S.A.E., Cairo 100.0 Allianz Life Financial Services LLC, Minneapolis, MN 100.0 Allianz Life Insurance Co. Ltd., Seoul 100.0 Allianz Life Insurance Company Ltd., Moscow 100.0 Allianz Life Insurance Company of Missouri, Clayton, MO 100.0 Allianz Life Insurance Company of New York, New York, NY 100.0 Allianz Life Insurance Company of North America, Minneapolis, MN 100.0 Allianz Life Insurance Japan Ltd., Tokyo 100.0 Allianz Life Insurance Lanka Ltd., Colombo 100.0 Allianz Life Insurance Malaysia Berhad p.l.c., Kuala Lumpur 100.0 Allianz Life Luxembourg S.A., Luxembourg 100.0 Allianz Madagascar Assurances SA, Antananarivo 100.0 Allianz Malaysia Berhad p.l.c., Kuala Lumpur 75.0 Allianz Mali Assurances SA, Bamako 77.0 Allianz Managed Operations & Services Nether - lands B.V., Rotterdam 100.0 Allianz Managed Operations & Services Thailand Co. Ltd., Bangkok 100.0
Allianz ZB d.o.o. Company for the Management of Obligatory Pension Funds, Zagreb 51.0 Allianz ZB d.o.o. Company for the Management of Voluntary Pension Funds, Zagreb 51.0 AllianzGI Best Styles Emerging Markets Equity Fund, Boston, MA 54.0 5 AllianzGI China Equity Fund, Boston, MA 58.4 5 AllianzGI Discovery US Portfolio, Boston, MA 100.0 5 AllianzGI Emerging Markets Debt Fund, Boston, MA 96.8 5 AllianzGI Europe Equity Dividend, Boston, MA 88.5 5 AllianzGI Global Fundamental Strategy Fund, Boston, MA 95.4 5 AllianzGI Global Megatrends Fund, Boston, MA 96.7 5 AllianzGI Global Small-Cap Opportunity Portfolio, Boston, MA 97.9 5 AllianzGI Global Sustainability Fund, Boston, MA 96.8 5 AllianzGI International Growth Fund, Boston, MA 97.3 5 AllianzGI Multi-Asset Real Return Fund, Boston, MA 71.7 5 AllianzGo S.r.l., Trieste 100.0 Allianz-Slovenská DSS a.s., Bratislava 100.0 Allianz-Slovenská poist'ovna a.s., Bratislava 99.6 Amaya Compañía de Seguros y Reaseguros S.A., Madrid 100.0 American Automobile Insurance Company Corp., Earth City, MO 100.0 American Financial Marketing Inc., Minneapolis, MN 100.0 AMOS Austria GmbH, Vienna 100.0 AMOS European Services SAS, Paris 100.0 AMOS IberoLatAm S.L., Barcelona 100.0 AMOS International B.V., Amsterdam 100.0 AMOS IT Suisse AG, Wallisellen 100.0 AMOS Italy S.p.c.A., Milan 100.0 AMOS of America Inc., Wilmington, DE 100.0 Ann Arbor Annuity Exchange Inc., Ann Arbor, MI 100.0 Antoniana Veneta Popolare Vita S.p.A., Trieste 100.0 APEH Europe VI, Paris 99.6 3 APKV US Private REIT GP LLC, Wilmington, DE 100.0 APKV US Private REIT LP, Wilmington, DE 100.0 APP Broker S.r.l., Trieste 100.0 Arab Gulf Health Services LLC, Dubai 100.0 Arcalis SA, Courbevoie 100.0 Arcalis UN, Paris 100.0 5 Arges Investments I N.V., Amsterdam 100.0 Arges Investments II N.V., Amsterdam 100.0 Asit Services S.R.L., Bucharest 100.0 Assistance Courtage d'Assurance et de Réassurance S.A., Paris 100.0 Associated Indemnity Corporation, Novato, CA 100.0 Assurances Médicales SA, Paris 65.0 Avip Actions 100, Paris 100.0 5 Avip Actions 60, Paris 100.0 5 Avip Top Croissance, Paris 99.1 5 Avip Top Defensif, Paris 98.9 5 Avip Top Harmonie, Paris 94.9 5 AWP Romania S.A., Bucharest 100.0 AZ Euro Investments II S.à r.l., Luxembourg 100.0 AZ Euro Investments S.à r.l., Luxembourg 100.0 AZ Jupiter 10 B.V., Amsterdam 100.0 AZ Jupiter 4 B.V., Amsterdam 100.0 AZ Jupiter 8 B.V., Amsterdam 100.0 AZ Jupiter 9 B.V., Amsterdam 100.0 AZ Real Estate GP LLC, New York, NY 100.0 AZ Servisni centar d.o.o., Zagreb 100.0 AZ Vers US Private REIT GP LLC, Wilmington, DE 100.0 AZ Vers US Private REIT LP, Wilmington, DE 100.0 AZGA Insurance Agency Canada Ltd., Kitchener, ON 100.0 AZGA Service Canada Inc., Kitchener, ON 55.0 AZL PF Investments Inc., Minneapolis, MN 100.0 AZOA C.V., Amsterdam 100.0 AZOA Services Corporation, New York, NY 100.0 Beleggingsmaatschappij Willemsbruggen B.V., Rotterdam 100.0 Beykoz Gayrimenkul Yatirim Insaat Turizm Sanayi ve Ticaret A.S., Ankara 100.0
Bilan Services S.N.C., Nanterre 66.0 Borgo San Felice S.r.l., Castelnuovo Berardenga (Siena) 100.0 Botanic Building SPRL, Brussels 100.0 BPS Brindisi 211 S.r.l., Lecce 100.0 BPS Brindisi 213 S.r.l., Lecce 100.0 BPS Brindisi 222 S.r.l., Lecce 100.0 BPS Mesagne 214 S.r.l., Lecce 100.0 BPS Mesagne 215 S.r.l., Lecce 100.0 BPS Mesagne 216 S.r.l., Lecce 100.0 BPS Mesagne 223 S.r.l., Lecce 100.0 BPS Mesagne 224 S.r.l., Lecce 100.0 Brasil de Imóveis e Participações Ltda., São Paulo 100.0 Bright Mission Berhad Ltd., Kuala Lumpur 100.0 British Reserve Insurance Co. Ltd., Guildford 100.0 Brobacken Nät AB, Stockholm 100.0 BSMC (Thailand) Limited, Bangkok 100.0 Bulgaria Net AD, Sofia 98.4 Bureau d'Expertises Despretz S.A., Brussels 100.0 Calobra Investments Sp. z o.o., Warsaw 100.0 Calypso S.A., Paris 100.0 CAP Rechtsschutz-Versicherungsgesellschaft AG, Wallisellen 100.0 Caroline Berlin S.C.S., Luxembourg 93.2 Centrale Photovoltaique de Saint Marcel sur aude SAS, Paris 100.0 Centrale Photovoltaique de Valensole SAS, Paris 100.0 CEPE de Bajouve S.à r.l., Versailles 100.0 CEPE de Haut Chemin S.à r.l., Versailles 100.0 CEPE de la Forterre S.à r.l., Versailles 100.0 CEPE de Langres Sud S.à r.l., Versailles 100.0 CEPE de Mont Gimont S.à r.l., Versailles 100.0 CEPE de Sambres S.à r.l., Versailles 100.0 CEPE des Portes de la Côte d'Or S.à r.l., Versailles 100.0 CEPE du Bois de la Serre S.à r.l., Versailles 100.0 Château Larose Trintaudon S.A., Saint Laurent Médoc 100.0 Chicago Insurance Company Corp., Chicago, IL 100.0 CIC Allianz Insurance Ltd., Sydney 100.0 Club Marine Limited, Sydney 100.0 Colisee S.à r.l., Luxembourg 100.0 Companhia de Seguros Allianz Portugal S.A., Lisbon 64.8 Compañía Colombiana de Servicio Automotriz S.A., Bogotá D.C. 100.0 Consultatio Renta Mixta F.C.I., Buenos Aires 100.0 3 Corn Investment Ltd., London 100.0 Corsetec Assessoria e Corretagem de Seguros Ltda., São Paulo 99.5 CPRN Thailand Ltd., Bangkok 100.0 Creactif Allocation, Paris 100.0 5 CreditRas Assicurazioni S.p.A., Milan 50.0 2 CreditRas Vita S.p.A., Milan 50.0 2 Darta Saving Life Assurance Ltd., Dublin 100.0 Deeside Investments Inc., Wilmington, DE 50.1 Delta Technical Services Ltd., London 100.0 Diamond Point a.s., Prague 100.0 Dresdner Kleinwort Pfandbriefe Investments II Inc., Minneapolis, MN 100.0 EF Solutions LLC, Wilmington, DE 100.0 Energie Eolienne Lusanger S.à r.l., Versailles 100.0 Eolica Erchie S.r.l., Lecce 100.0 Etablissements J. Moneger SA, Dakar 100.0 Euler Hermes ACI Services LLP, Baltimore, MD 100.0 Euler Hermes ACMAR Services SARL, Casablanca 100.0 Euler Hermes Asset Management France S.A., Paris la Défense 100.0 Euler Hermes Canada Services Inc., Montreal, QC 100.0 Euler Hermes Cescob Service s.r.o., Prague 100.0 Euler Hermes Collections Sp. z o.o., Warsaw 100.0 Euler Hermes Consulting (Shanghai) Co. Ltd., Shanghai 100.0 Euler Hermes Crédit France S.A.S., Paris la Défense 100.0 Euler Hermes Credit Management Services Ireland Ltd., Dublin 100.0 Euler Hermes Credit Services (JP) Ltd., Tokyo 100.0
SAS 20 pompidou, Paris la Défense 100.0 SAS Allianz Etoile, Paris la Défense 100.0 SAS Allianz Forum Seine, Paris la Défense 100.0 SAS Allianz Logistique, Paris la Défense 100.0 SAS Allianz Platine, Paris la Défense 100.0 SAS Allianz Rivoli, Paris la Défense 100.0 SAS Allianz Serbie, Paris la Défense 100.0 SAS Angel Shopping Centre, Paris la Défense 90.0 SAS Madeleine Opéra, Paris la Défense 100.0 SAS Passage des princes, Paris la Défense 100.0 SAS Société d'Exploitation du Parc Eolien de Nélausa, Paris 100.0 Sättravallen Wind Power AB, Strömstad 100.0 Saudi NEXtCARE LLC, Al Khobar 52.0 SC Tour Michelet, Paris la Défense 100.0 SCI 46 Desmoulins, Paris la Défense 100.0 SCI Allianz ARC de Seine, Paris la Défense 100.0 SCI Allianz Chateaudun, Paris la Défense 100.0 SCI Allianz Invest Pierre, Paris 100.0 SCI Allianz Messine, Paris la Défense 100.0 SCI AVIP SCPI Selection, Courbevoie 100.0 SCI ESQ, Paris la Défense 75.0 SCI Stratus, Courbevoie 100.0 SCI Via Pierre 1, Paris la Défense 100.0 SCI Volnay, Paris la Défense 100.0 SDIII Energy GmbH & Co. KG, Pottenbrunn 100.0 SI 173-175 Boulevard Haussmann SAS, Paris la Défense 100.0 Siac Services S.r.l., Rome 100.0 Silex Gas Management AS, Oslo 100.0 Silex Gas Norway AS, Oslo 100.0 Sirius S.A., Luxembourg 94.8 SLC "Allianz Life Ukraine", Kiev 100.0 Società Agricola San Felice S.p.A., Milan 100.0 Société de Production D'électricité D'harcourt Moulaine SAS, Versailles 100.0 Société d'Energie Eolien Cambon SAS, Versailles 100.0 Société d'Exploitation du Parc Eolien d'Aussac Vadalle SAS, Paris 100.0 Société Européenne de Protection et de Services d'Assistance à Domicile S.A., Paris 56.0 Société Foncière Européenne B.V., Amsterdam 100.0 Société Nationale Foncière S.A.L., Beirut 66.0 SOFE One Ltd., Bangkok 100.0 SOFE Two Ltd., Bangkok 100.0 Sofiholding S.A., Brussels 100.0 South City Office Broodthaers SA, Brussels 100.0 SpaceCo S.A., Paris 100.0 Standard General Agency Inc., Dallas, TX 100.0 StocksPLUS Management Inc., Dover, DE 100.0 Téléservices et Sécurité "TEL2S" SARL, Chatillon 99.9 TFI Allianz Polska S.A., Warsaw 100.0 The American Insurance Company Corp., Cincinnati, OH 100.0 The Annuity Store Financial & Insurance Services LLC, Sacramento, CA 100.0 The MI Group Limited, Guildford 99.4 Three Pillars Business Solutions Limited, Guildford 100.0 Ticket Guard Small Amount & Short Term Insurance Co. Ltd., Tokyo 100.0 Tihama Investments B.V., Amsterdam 100.0 Top Assistance Service GmbH, Vienna 100.0 Top Immo A GmbH & Co. KG, Vienna 100.0 Top Immo Besitzgesellschaft B GmbH & Co. KG, Vienna 100.0 Top Versicherungsservice GmbH, Vienna 100.0 Top Vorsorge-Management GmbH, Vienna 75.0 Towarzystwo Ubezpieczen Euler Hermes S.A., Warsaw 100.0 Trafalgar Insurance Public Limited Company, Guildford 100.0 TU Allianz Polska S.A., Warsaw 100.0 TU Allianz Zycie Polska S.A., Warsaw 100.0 UP 36 SA, Brussels 100.0
VermögensManagement 2027 Plus, Senningerberg 87.7 5 VertBois S.à r.l., Luxembourg 100.0 Vigny Depierre Conseils SAS, Archamps 100.0 Viveole SAS, Versailles 100.0 Volta, Paris 100.0 5 Vordere Zollamtsstraße 13 GmbH, Vienna 100.0 WFC Investments Sp. z o.o., Warsaw 87.5 Windpark GHW GmbH, Pottenbrunn 100.0 Windpark Ladendorf GmbH, Vienna 100.0 Windpark Les Cent Jalois SAS, Versailles 100.0 Windpark Scharndorf GmbH, Pottenbrunn 100.0 Windpark Zistersdorf GmbH, Pottenbrunn 100.0 Wm. H McGee & Co. (Bermuda) Ltd., Hamilton 100.0 Wm. H McGee & Co. Inc., New York, NY 100.0 Wm. H McGee & Co. of Puerto Rico Inc., San Juan 100.0 YAO Investment S.à r.l., Luxembourg 100.0 Yorktown Financial Companies Inc., Minneapolis, MN 100.0 ZAD Allianz Bulgaria, Sofia 87.4 ZAD Allianz Bulgaria Zhivot, Sofia 99.0 ZAD Energia, Sofia 51.0 ZiOst Energy GmbH & Co. KG, Pottenbrunn 100.0
Non-consolidated affiliates A. Diffusion S.A., Nanterre 99.9 AGF Pension Trustees Ltd., Guildford 100.0 Allianz America Latina S.C. Ltda., Rio de Janeiro 100.0 Allianz Financial Services S.A., Athens 100.0 Allianz Global Corporate & Specialty Escritório de Representação no Brasil Ltda., Rio de Janeiro 100.0 Allianz Insurance Services Ltd., Athens 100.0 Allianz Northern Ireland Limited, Belfast 100.0 Allianz Risk Consultants B.V., Amsterdam 100.0 Assurance France Aviation S.A., Paris 100.0 business lounge GmbH, Vienna 100.0 COGAR S.à r.l., Paris 100.0 Gesellschaft für Vorsorgeberatung AG, Bern 100.0 ICC Evaluation SARL, Paris 100.0 Knightsbridge Allianz LP, Bartlesville, OK 99.5 5 Office Sénégalais de Conseils en Assurance SARL, Dakar 99.6 RE-AA SA, Abidjan 97.5 SCI AVIP de Camp Laurent, Courbevoie 100.0 SCI J.T., Courbevoie 100.0 SCI Vilaje, Courbevoie 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
One Beacon Joint Venture LP, Wilmington, DE 50.0 Porterbrook Holdings I Limited, London 30.0 8 Previndustria - Fiduciaria Previdenza Imprenditori S.p.A., Milan 50.0 Queenspoint S.L., Madrid 100.0 8 RMPA Holdings Limited, Colchester 56.0 8 SC Holding SAS, Paris 50.0 SES Shopping Center AT1 GmbH, Salzburg 50.0 Solunion Compañía Internacional de Seguros y Reaseguros SA, Madrid 50.0 TopTorony Ingatlanhasznosító Zrt., Budapest 50.0 Triskelion Property Holding Designated Activity Company, Dublin 50.0 Waterford Blue Lagoon LP, Wilmington, DE 49.0 8
Associates Adriatic Motorways d.d., Zagreb 33.3 Allianz EFU Health Insurance Ltd., Karachi 49.0 Allianz Euro Credit SRI, Paris 33.4 5 Allianz Euro Oblig Court Terme ISR, Paris 24.1 5 Allianz Euro Tactique, Paris 35.0 5 Allianz Fóndika S.A. de C.V., Mexico City 26.8 Allianz High Dividend Asia Pacific, Senningerberg 20.9 5 Allianz Invest Osteuropa, Vienna 21.5 5 Allianz Invest Vorsorgefonds, Vienna 28.6 5 Allianz Saudi Fransi Cooperative Insurance Company, Riyadh 32.5 Allianz Securicash SRI, Paris 22.3 5 Allianz Sécurité PEA, Paris 34.1 5 Archstone Multifamily Partners AC JV LP, Wilmington, DE 40.0 Archstone Multifamily Partners AC LP, Wilmington, DE 28.6 Areim Fastigheter 2 AB, Stockholm 23.3 Areim Fastigheter 3 AB, Stockholm 26.2 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 CPIC Allianz Health Insurance Co. Ltd., Shanghai 22.9 Data Quest SAL, Beirut 36.0 Douglas Emmett Partnership X LP, Wilmington, DE 28.6 Dr. Ignaz Fiala GmbH, Vienna 33.3 European Outlet Mall Fund FCP-FIS, Luxembourg 25.8 5 Foncière de Paris SIIC, Paris 22.7 Four Oaks Place LP, Wilmington, DE 49.0 Graydon Holding N.V., Amsterdam 27.5 Helios Silesia Holding B.V., Amsterdam 45.0 Henderson UK Outlet Mall Partnership LP, Edinburgh 19.5 9 IPE Tank and Rail Investment 1 S.C.A., Luxembourg 48.8 Madrid Gas Investments S.A., Luxembourg 33.3 Medgulf Allianz Takaful B.S.C., Seef 25.0 New Path S.A., Buenos Aires 40.0 OeKB EH Beteiligungs- und Management AG, Vienna 49.0 OJSC "Avariinyi Comissar", Moscow 23.3 OVS Opel VersicherungsService GmbH, Vienna 40.0 PGREF V 1301 Sixth Holding LP, Wilmington, DE 24.5 Professional Agencies Reinsurance Limited, Hamilton 22.0 Residenze CYL S.p.A., Milan 33.3 SAS Alta Gramont, Paris 49.0 SCI Bercy Village, Paris 49.0 SK Versicherung AG, Vienna 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 Wildlife Works Carbon LLC, San Francisco, CA 10.0 9
Other participations between 5 and 20 % of voting rights Al Nisr Al Arabi, Amman 18.0 Banco BPI S.A., Porto 8.4 Sri Ayudhya Capital Public Company Limited, Bangkok 16.8 Zagrebacka banka d.d., Zagreb 11.7 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 %.
8 Classified as joint venture according to IFRS 11. 9 Classified as associate according to IAS 28.
We conducted our audit of the consolidated financial statements 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 Germany ] (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 supporting 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 consolidation, 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.
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
Dr. Kurt bocK Chairman of the Board of Executive Directors BASF SE
Dr. franz b. Humer Chairman of DIageo 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.
cansen basaran-symes since 5 May 2015 President of Turkish Industry & Business Association (TUSIAD)
Peter costello Chairman of Australia’s Future Fund moHameD a. el-erian since 1 January 2016 Chief Economic Advisor to Allianz lubna olayan since 28 May 2015 Chief Executive Officer and Deputy Chairperson of Olayan Financing Company
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
JEan-JaCQUES CETTE Chairman of the Group Works Council of Allianz France S.A. Membership in comparable1 supervisory bodies Membership in Group bodies Allianz France S.A.
PRof. DR. REnaTE KöCHER Head of “Institut für Demoskopie Allensbach” (Allensbach Institute) Membership in other statutory supervisory boards and SE administrative boards in Germany BMW AG Infineon Technologies AG Nestlé Deutschland AG Robert Bosch GmbH
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
Mandates of the Members of the Board of Management 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.
ManUEL BaUER until 31 August 2015 Insurance Growth Markets 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. axEL THEiS Global Insurance Lines & Anglo Markets Global Property-Casualty since 7 May 2015 Membership in other statutory supervisory boards and SE administrative boards in Germany ProCurand GmbH & KGaA (Chairman) Membership in Group bodies Allianz Global Corporate & Specialty SE (Chairman) Membership in comparable1 supervisory bodies Membership in Group bodies Allianz Australia Ltd.
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).
AllowAnce for loAn losses 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.
AssociAtes 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.
business combinAtion 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 acqui sition method.
certificAted liAbilities Certificated liabilities comprise debentures and other liabilities for which transferable certificates have been issued.
collAterAlized debt obligAtion (cdo) 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.
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 costs.
defined benefit plAns 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.
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 under lying 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.
futures 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.
gross/net 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.
inclusive meritocrAcy index (imix) 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.
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 income from finAnciAl Assets 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).
Joint venture 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.
life/heAlth – definition of terms Further wordings used in the Life/Health business segment performance analysis: 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. Unlocking: Prospective update of assumptions for dAc calculation.
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. 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 unit­linked products are those where all of the benefits provided by a 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.
life/heAlth 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, unit­linked management fees and policyholder participation in expenses. Investment margin: Is defined as ifrs investment income net of expenses less interest credited to ifrs reserves and policyholder participation. Expenses: Includes commissions, acquisition expenses and administration expenses. 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.
net promoter score (nps) A measurement of customers’ willingness to recom­ mend Allianz. Top­down nps is measured regularly according to global cross industry standards and allows benchmarking against competitors in the respective markets.
pension And similAr obligAtions Reserves for current and future post­employment benefits formed for the defined benefit plans of active and former employees. These also include reserves for health care benefits.
reserves for premium refunds That part of the surplus which will be distributed to policy holders in the future. This refund of premiums is made on the basis of statutory, contractual, or company by­law obligations, or voluntary undertaking.
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.
uneArned revenue reserves (urr) urr contain premium components that refer to future periods, which are reserved and released over the life­ time of the corresponding contracts.
vAlue of business Acquired (vobA) vobA refers to the present value of future profits asso­ ciated with a block of business purchased.
Encouraging tomorrow Allianz Group Sustainability Report 2015 www.allianz.com/sustainability www.allianz.com/hrfactbook www.allianz.com/annualreport www.allianz.com/sustainability www.allianz.com/hrfactbook www.allianz.com/app
Annual General Meeting ______________________________________ 4 May 2016 Financial Results 1Q _________________________________________ 11 May 2016 Financial Results 2Q/Interim Report 2Q _________________________ 5 August 2016 Financial Results 3Q ____________________________________ 11 November 2016 Financial Results 2016 ____________________________________ 17 February 2017 Annual Report 2016 _______________________________________ 10 March 2017 Annual General Meeting ______________________________________ 3 May 2017 www.allianz.com/financialcalendar www.allianz.com www.allianz.com/annualreport