Expected volatility of the Allianz SE share price % 15.8 18.6 20.2 1_The AEI RSUs are granted as part of the remuneration of the respective prior year.
The contractual vesting period ends on the tenth trading day following the annual financial media conference in the year the respective RSU award expires. The payout per RSU is subject to a 200 % share price cap relative to the share price at the grant date and a 200 % cap applied to the performance factor. In addition, there is a cap applicable to the total compensation including the LTI payout and various other compensation components.
Expected correlation of the Allianz SE share price and index % 88.6 1_The LTI RSUs are granted as part of the remuneration of the respective prior year.
The index-linked RSUs are accounted for as cash-settled plans because the Allianz Group settles in cash. Therefore, the Allianz Group accrues the fair value of the RSUs as compensation expenses over the
IFRS vesting period. During the year ended 31 December 2019, the
PIMCO LLC CLASS M-UNIT PLAN In 2008, Allianz GI L.P. launched a new management share-based payment incentive plan for certain senior-level executives and affiliates of
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.
The following table provides the assumptions used in calculating the fair value of the M-unit options at grant date:
Earnings per share are calculated by dividing net income attributable to shareholders by the weighted-average number of shares outstanding. For the calculation of diluted earnings per share, the nominator and denominator are adjusted for the effects of potentially dilutive shares. These effects arise from various share-based compensation plans of the Allianz Group.
The sum of the total remuneration of the Allianz SE Board of Management for 2019, excluding the pension service cost, amounts to € 39 mn (2018 excluding the payments of the MTB 2016 – 2018 as well as the pension service cost: € 27 mn).
RSUs with a total fair value of € 18.3 mn (2018: € 9.4 mn) were granted to the Board of Management for the year ended 31 Decem-
In 2019, former members of the Board of Management and their dependents received remunerations and other benefits totaling € 8 mn (2018: € 8 mn), while reserves for current pension obligations and accrued pension rights totaled € 159 mn (2018: € 152 mn).
The total remuneration for all Supervisory Board members, including attendance fees, amounted to € 2.7 mn (2018: € 2.7 mn).
Audit services primarily relate to services rendered for the audit of the
Tax services primarily refer to tax compliance services, other services mainly refer to consulting services.
ISSUANCE OF CERTIFICATED LIABILITIES In January 2020, Allianz Finance II B.V. issued two certificated liabilities.
1_The relevant share price used to determine the final number of RSUs granted is only available after the sign-off of the
2_The disclosure in the Annual Report 2018 was based on a best estimate of the RSU grants. The figures shown here for 2018 now include the actual fair value as of the grant date (1 March 2019). The value therefore differs from the amount disclosed last year.
Allianz SE Ashmore Emerging Markets Corporates Fund, Frankfurt am Main 100.0 3
EASTSIDE Joint Venture GmbH & Co. KG, Frankfurt am Main 50.0 2
Euler Hermes Collections GmbH, Potsdam 100.0 finanzen.de Maklerservice GmbH, Berlin 100.0 finanzen.de Vermittlungsgesellschaft für Verbraucherverträge GmbH, Berlin 100.0
AllianzGI Renewable Energy Infrastructure Fund III (US) GP LLC, Wilmington, DE 100.0
AllianzGI US Private Credit Solutions GP II LLC, Wilmington, DE 100.0
Euler Hermes Serviços de Gestão de Riscos Ltda., São Paulo 100.0
FinOS Technology Vietnam Single-Member Limited Liability Company, Ho Chi Minh City 100.0
Multimags - Multiassistência e Gestão de Sinistros, Unipessoal Lda., Lisbon 100.0
Northstar Mezzanine Partners VI U.S. Feeder II L.P., Dover, DE 100.0 3
Niederösterreichische Glasfaserinfrastrukturgesellschaft mbH, St. Pölten 100.0 nöGIG Phase Zwei GmbH, St. Pölten 100.0
Joint ventures 114 Venture LP, Wilmington, DE 49.5 7 1515 Broadway Realty LP, Dover, DE 49.6 7 1800 M Street Venture LP, Wilmington, DE 42.8 7 30 HY WM REIT Owner LP, Wilmington, DE 49.0 7 53 State JV L.P., Wilmington, DE 49.0 7
Brunei National Insurance Company Berhad Ltd., Bandar Seri Begawan 25.0 owned1
Scape Investment Operating Company No. 2 Pty Ltd., Sydney 50.0 8
The Allianz Group refrains from disclosure of participations which are not included in one of the above categories, as they are of minor importance for giving a true and fair view of the assets, liabilities, financial position, and profit or loss of the Allianz Group.
§ [Article] 315e Abs. [paragraph] 1 HGB [Handelsgesetzbuch: German Commercial Code] and, in compliance with these requirements, give a true and fair view of the assets, liabilities, and financial position of the Group as at 31 December 2019, and of its financial performance for the financial year from 1 January to 31 December 2019, and
German professional responsibilities in accordance with these requirements. In addition, in accordance with Article 10 (2) point (f) of the EU
Audit Regulation, we declare that we have not provided non-audit services prohibited under Article 5 (1) of the EU Audit Regulation. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions on the consolidated financial statements and on the group management report.
Our presentation of these key audit matters has been structured in each case as follows: ① Matter and issue
① In the consolidated financial statements of the Company, assets and liabilities of the Life and Health Insurance business segment amounting to € 19,841 mn and € 572,904 mn (2.0 % or 56.7 % of consolidated total assets) are reported under the "Deferred acquisition costs" and "Reserves for insurance and investment contracts"
balance sheet items, respectively. Furthermore, financial liabilities from the life and health insurance segment amounting to € 14,246 mn (1.4% of consolidated total assets) are reported that are classified as Level 3 of the fair value hierarchy according to the requirements of IFRS 13. These technical assets and liabilities are measured using complex actuarial methods and models based on a comprehensive process for arriving at assumptions about future developments relating to the insurance portfolios to be measured. The methods used and the actuarial assumptions determined in connection with interest rates, investment yields, mortality, invalidity, longevity, costs and future behavior of policyholders could materially affect the measurement of these technical assets and liabilities. The financial liabilities concerned mainly include derivative financial instruments resulting from insurance contracts and are assigned to Level 3 of the fair value hierarchy as for the measurement in the underlying valuation models sufficient observable market data was not available and therefore significant unobservable inputs had to be used instead. These inputs may include data derived from approximations using, inter alia, historical data. In this context, the derivative financial instruments resulting from insurance contracts are subject to an increased valuation risk due to lower objectivity and the underlying assumptions and estimates of the executive directors.
② As part of our audit, we assessed the appropriateness of selected controls established by the Company for the purpose of selecting the valuation methods applied, determining assumptions and making estimates for the measurement of certain technical assets and liabilities as well as financial liabilities carried at fair value
(Level 3). In doing so we evaluated, among others, the integrity of the underlying data and the process for determining the assumptions and estimates used in the valuation. With the support of our internal valuation specialists, we have compared the respective valuation methods applied and the material assumptions with generally recognized methods and industry standards and examined to what extent these are appropriate for the valuation of technical assets and liabilities as well as financial liabilities carried at fair value (Level 3). A key point of our audit was the assessment of the liability adequacy test, the evaluation of the expected gross margins/profits, which are used, among others, as the basis for amortizing the deferred acquisition costs and the evaluation of the appropriateness of significant assumptions not observable on the market for the valuation of derivative financial instruments, such as mortality and lapse rates. Our audit also included an evaluation of the plausibility and integrity of the data and assumptions used in the valuation and of the
Reserves for loss and loss adjustment expenses in propertycasualty insurance represent the Company's expectations regarding future payments for known and unknown claims including associated expenses. The Company uses various methods to estimate these obligations. Furthermore, the measurement of these provisions requires a significant degree of judgment by the executive directors of the Company regarding the assumptions made, such as inflation, loss developments and regulatory changes. In particular, the lines of products with low loss frequency, high individual losses or long claims settlement periods are usually subject to increased estimation uncertainties.
③ The Company's disclosures on the measurement of the provisions for claims outstanding in property-casualty insurance are included in section 2 of the notes to the consolidated financial statements.
and § 315d HGB included in section “Other Parts of the Group
The other information comprises further the remaining parts of the group annual report – excluding cross-references to external information – with the exception of the audited consolidated financial statements, the audited group management report and our auditor’s report.
Our audit opinions on the consolidated financial statements and on the group management report do not cover the other information, and consequently we do not express an audit opinion or any other form of assurance conclusion thereon.
German commercial law pursuant to § 315e Abs. 1 HGB and that the consolidated financial statements, in compliance with these requirements, give a true and fair view of the assets, liabilities, financial position, and financial performance of the Group. In addition, the executive directors are responsible for such internal control as they have determined necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.
German legal requirements, and appropriately presents the opportunities and risks of future development. In addition, the executive directors are responsible for such arrangements and measures (systems) as they have considered necessary to enable the preparation of a group management report that is in accordance with the applicable German legal requirements, and to be able to provide sufficient appropriate evidence for the assertions in the group management report.
Institut der Wirtschaftsprüfer (IDW) will always detect a material misstatement. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements and this group management report.
We exercise professional judgment and maintain professional skepticism throughout the audit. We also:
The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
 Obtain an understanding of internal control relevant to the audit of the consolidated financial statements and of arrangements and measures (systems) relevant to the audit of the group management report in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an audit opinion on the effectiveness of these systems.
 Evaluate the appropriateness of accounting policies used by the executive directors and the reasonableness of estimates made by the executive directors and related disclosures.
 Evaluate the consistency of the group management report with the consolidated financial statements, its conformity with German law, and the view of the Group’s position it provides.
FURTHER INFORMATION PURSUANT TO ARTICLE 10 OF THE EU AUDIT REGULATION We were elected as group auditor by the supervisory board on 7 March 2019. We were engaged by the supervisory board on 13 May 2019. We have been the group auditor of the Allianz SE, Munich, without interruption since the financial year 2018.
We declare that the audit opinions expressed in this auditor’s report are consistent with the additional report to the audit committee pursuant to Article 11 of the EU Audit Regulation (long-form audit report ).
GERMAN PUBLIC AUDITOR RESPONSIBLE FOR THE ENGAGEMENT The German Public Auditor responsible for the engagement is Richard
of Allianz SE, Munich, (hereinafter the “Company”) for the period from 1 January to 31 December 2019 (hereinafter the “Non-financial Report ”).
Wirtschaftsprüfer und vereidigte Buchprüfer“: “BS WP/vBP”] as well as the Standard on Quality Control 1 published by the Institut der
Wirtschaftsprüfer [Institute of Public Auditors in Germany] (IDW): Requirements to quality control for audit firms [IDW Qualitätssicherungsstandard 1: Anforderungen an die Qualitätssicherung in der
Wirtschaftsprüferpraxis - IDW QS 1] – and accordingly maintains a comprehensive system of quality control including documented policies and procedures regarding compliance with ethical requirements, professional standards and applicable legal and regulatory requirements.
PRACTITIONER´S RESPONSIBILITY Our responsibility is to express a reasonable assurance conclusion on the information in the Non-financial Report based on the assurance engagement we have performed.
Within the scope of our engagement we did not perform an evaluation on external sources of information or expert opinions, referred to in the Non-financial Report.
International Standard on Assurance Engagements (ISAE) 3000 (Revised ): Assurance Engagements other than Audits or Reviews of Historical Financial Information, issued by the IAASB. This Standard requires that we plan and perform the assurance engagement to obtain reasonable assurance whether the Company’s Non-financial Report for the period from 1 January to 31 December 2019 has been prepared, in all material aspects, in accordance with §§ 315c in conjunction with 289c to 289e HGB.
Within the scope of our assurance engagement, we performed amongst others the following assurance procedures and further activities:  Obtaining an understanding of the structure of the sustainability organization and of the stakeholder engagement.
 Identification of the likely risks of material misstatement of the
 Obtaining an understanding of the work of external experts providing data as well as evaluation of competence, capabilities and objectivity of these external experts.
ASSURANCE CONCLUSION In our opinion, the Non-financial Report for the period from 1 January to 31 December 2019 has been prepared, in all material aspects, in accordance with §§ 315c in conjunction with 289c to 289e HGB.
Company. The assurance engagement has been performed for purposes of the Company and the report is solely intended to inform the
The report is not intended for any third parties to base any (financial ) decision thereon. Our responsibility lies only with the Company.
The People Fact Book is the official and most comprehensive report on our workforce facts and figures, highlighting major HR achievements over the past year and revealing the outlook for 2020. Date of publication: March 2020. www.allianz.com/hrfactbook
The Allianz Group Sustainability Report “Collaborating for a Sustainable Future” covers our contribution to the environment, society and economy. It provides full details of our sustainability strategy, approach and progress in 2019 as well as an outlook for 2020. Date of publication: 29 April 2020. www.allianz.com/sustainability