As of December 31, 2006, the fair value of real estate held for use was € 6,379 mn (2005: € 6,227 mn). As of December 31, 2006, assets pledged as security and other restrictions on title were € 27mn (2005: € 25 mn).
Cost as of December 31, 3,764 3,472 3,320 1) As of December 31, 2006, includes € 683 mn (2005: € 772 mn; 2004: € 608 mn) for software developed in-house and € 395 mn (2005: € 319 mn; 2004: € 364 mn) for software purchased from third parties.
Non-current assets and disposal groups held for sale During the year ended December 31, 2005, the Allianz Group reclassified the assets, including goodwill, and liabilities related to its ownership of Four Seasons Health Care Ltd., Wilmslow and BetterCare Group Limited, Kingston upon Thames to disposal groups held for sale as the classification criteria in IFRS 5 were met. On the date of reclassification, as the fair value less cost to sell was in excess of the carrying amount a gain or loss was not recognized. The disposal of Four Seasons Health Care Ltd., Wilmslow and BetterCare Group Limited, Kingston upon Thames occurred August 31, 2006. In 2005, the assets and liabilities of the disposal group held for sale related to Four Seasons Health Care Ltd., Wilmslow and BetterCare Group Limited, Kingston upon Thames were included in the Corporate segment.
Amortization expense of intangible assets is estimated to be € 42mn in 2007, € 42 mn in 2008, € 42 mn in 2009, € 42 mn in 2010 and € 42mn in 2011.
• the acquisition of 100.0% interest in 1. Pensionssparkasse, a.s., Bratislava,
• increasing the interest in PremierLine Direct Ltd., Lancaster, from 20.0% to 100.0%,
The reclassification affects intangible assets of AllianzSlovenská poist’ovna a.s., Bratislava as they were reclassified to goodwill due to a change in the accounting treatment.
The reclassification affects the goodwill of Four Seasons Health Care Ltd., Wilmslow and BetterCare Group Limited, Kingston upon Thames as these subsidiaries were reclassified to disposal groups held for sale.
Impairment tests for goodwill and intangible assets with indefinite lives For purposes of impairment testing, the Allianz Group has allocated goodwill to cash generating units. These cash generating units represent the lowest level at which goodwill is monitored for internal measurement purposes. During 2006, the Allianz Group realigned its cash generating units in the Property-Casualty and Life/
The groups of cash generating units of the PropertyCasualty segment are: Insurance Germany; Europe I, including Italy, Spain, Portugal, Switzerland, Austria and Greece; Europe II, including France, Netherlands, Belgium, Luxemburg, and South America; Anglo Broker Markets, including United Kingdom, Ireland and Australia; NAFTA Markets, including the United States and Mexico; Asia Pacific; Eastern Europe; Specialty Lines I, including Allianz Global Corporate & Specialty and Specialty Lines II, including Credit Insurance, Travel Insurance and Assistance Services.
The cash generating units of the Life/Health segment are: Insurance Germany Life; Insurance Germany Health; Europe I, including Italy, Spain, Portugal, Switzerland, Austria and Greece; Europe II, including France, Netherlands, Belgium, Luxemburg and South America; NAFTA Markets, including the United States; and Asia Pacific.
The cash generating units of the Banking segment are Private & Business Clients; Corporate & Investment Banking and Other Banking. The Asset Management segment is considered a cash generating unit. The cash generating unit of the Corporate segment is Private Equity. The recoverable amounts of all cash generating units are determined on the basis of value in use calculations.
sustainable returns which can be assumed to be realistic on a long term basis (“terminal value”) of the companies included in the cash generating units. The capitalized earnings value is calculated by discounting the future earnings using an appropriate discount rate.
The business plans applied in the value in use are the results of the structuredmanagement dialogues between the Board of Management of the Allianz Group and the companies in connection with a reporting process integrated into these dialogues. Generally, the business plans comprise a planning horizon of three years.
Europe II 632 — 632 — NAFTA Markets 115 — 115 — Asia Pacific 31 — 31 — Eastern Europe 108 — 71 — Anglo Broker Markets 304 — 200 — Specialty Lines I 5 — 5 — Specialty Lines II 19 — 20 —
Europe II 538 — 538 — NAFTA Markets 436 — 405 — Asia Pacific 320 — 320 —
Private Equity 144 — — — Subtotal 144 — — —
Less than 3 months € mn 3 months to less than 1 year € mn 1 year to less than 3 years € mn 3 years to less than 5 years € mn
As of December 31, 2006, liabilities to customers include € 33,302 mn (2005: € 30,049 mn) of noninterest bearing deposits.
Prior year’s loss and loss adjustment expenses incurred reflects the changes in estimation charged or credited to the consolidated income statement in each year with respect to the reserves for loss and loss adjustment expenses established as of the beginning of that year. During the year ended December 31, 2006, the Allianz Group recorded additional income of respect of losses occurring in prior years. During the year ended December 31, 2006, these amounts as percentages of the net balance of the beginning of the
Loss and loss adjustment expenses development for the Property-Casualty segment The following table illustrates the development of the Allianz Group’s reserves for loss and loss adjustment expenses, over the past five years. The table presents calendar year data, not accident year data. In addition, the table includes (excludes) subsidiaries from the date acquired (disposed).
Three years later 29,984 29,007 26,148 Four years later 33,586 32,838 Five years later 36,430 Liability re-estimated as of
Three years later 56,056 57,386 53,906 Four years later 57,640 56,802 Five years later 57,005 Cumulative surplus (deficiency)
The discount reflected in the reserves is related to annuities for certain long-tailed liabilities, primarily in workers’ compensation, personal accident, general liability, motor liability, individual and group health disability and employers’ liability. All of the reserves that have been discounted have payment amounts that are fixed and timing that is reasonably determinable.
As of December 31, 2006 € mn € mn € mn € mn
Aggregate policy reserves 256,333 249,012 Reserves for premium refunds 30,689 28,510 Other insurance reserves 675 790
Changes in aggregate policy reserves for universal-life type insurance contracts and non unit linked investment contracts for the year ended December 31, 2006 were as follows: Universal-life type insurance contracts (SFAS 97)
Premiums collected 13,092 142 Separation of embedded derivatives (543) — Interest credited 3,106 20 Releases upon death, surrender and
Comprised of: Universal life type insurance contracts 88,078 Non unit linked investment contracts 288 Unit linked insurance contracts 30,320 Unit linked investment contracts 24,341 Total 143,027
As of December 31, 2006, participating life business represented approximately 62% (2005: 62%) of the Allianz Group’s gross insurance in-force. During the year ended December 31, 2006, participating policies represented approximately 66% (2005: 66%) of gross premiums written and 63% (2005: 63%) of life premiums earned. As of December 31, 2006, reserves for conventional participating policies were approximately 54% (2005: 53%) of the Allianz Group’s consolidated aggregate policy reserves.
Amounts already allocated under local statutory or contractual regulations: Foreign currency translation
Countries with legal or contractual policyholder participation in insurance, investment and/or expense risk: Other Countries: Other Western and Southern Europe 305 2,188 126 — 2,314 3,564 5,878
Countries with legal or contractual policyholder participation in insurance, investment and/or expense risk: Other Countries: Other Western and Southern Europe 321 2,194 44 — 2,238 3,258 5,496
As a result of the significant diversity in types of contracts issued, including the offsetting effects of mortality risk and longevity risk inherent in a combined portfolio of life insurance and annuity products, and the geographic diversity of the Allianz Group’s Life/Health segment, as well as the significant level of policyholder participation inmortality/morbidity risk in certain countries inWestern Europe, the Allianz Group does not believe its Life/Health segment has any significant concentrations of insurance risk, nor does it believe its net income or shareholders’ equity is highly sensitive to insurance risk.
The Allianz Group’s Life/Health segment is exposed to significant investment risk as a result of guaranteed minimum interest rates included inmost of its traditional contracts. A summary of the weighted average guaranteedminimum interest rates of the Allianz Group’s most significant operating entities in the Life/ Health segment by country is as follows: As of December 31, 2006 %
Unit linked insurance contracts 36,296 30,320 Unit linked investment contracts 25,568 24,341
Changes in financial liabilities for unit linked insurance contracts and unit linked investment contracts for the year ended December 31, 2006 were as follows: Unit linked insurance contracts € mn
Premiums collected 8,313 5,987 Interest credited 3,013 705 Releases upon death, surrender, and
Derivative financial instruments used for hedging purposes that meet the criteria for hedge accounting and firm commitments 907 1,019 Financial liabilities for puttable equity instruments 3,750 3,137 Disposal groups held for sale — 1,389 Other liabilities 11,498 10,338
Other liabilities due within one year amounted to € 40,839 mn (2005: € 43,635 mn) and those due after more than one year totaled € 8,925 mn (2005:
Total all other subsidiaries — 60 — — — 890 950 975 1) Except for interest rates. Interest rates represent the weighted-average. 2) Includes subordinated bonds issued by Allianz Finance B.V. and Allianz Finance II B.V. and guaranteed by Allianz SE. 3) The terms of the profit participation certificates provide for an annual cash distribution of 240% of the dividend paid by Allianz SE per one Allianz SE share.
Holders of profit participation certificates do not have voting rights, or any rights to convert the certificates into Allianz SE shares, or rights to liquidation proceeds. Profit participation certificates are unsecured and rank pari passu with the claims of other unsecured creditors. Profit participation certificates can be redeemed by holders upon twelve months prior notice every fifth year. Allianz SE has the right to call the profit participation certificates for redemption, upon six months’ prior notice every year. The next call date is December 31, 2007. Upon redemption by Allianz SE, the cash redemption price per certificate would be equal to 122.9% of the then current price of one Allianz SE share during the last three months preceding the recall of the participation certificate. In lieu of redemption for cash, Allianz SE may offer 10 Allianz SE ordinary shares per 8 profit participation certificates.
4) Participation certificates issued by the Dresdner Bank Group entitle holders to annual interest payments, which take priority over its shareholders’ dividend entitlements. They are subordinated to obligations for all other creditors of the respective issuer, except those similarly subordinated, and share in losses of the respective issuers in accordance with the conditions attached to the participation certificates. The profit participation certificates will be redeemed subject to the provisions regarding loss sharing.
Issued capital Issued capital at December 31, 2006 amounted to € 1,106,304,000 divided into 432,150,000 registered shares. The shares have no par value but a mathematical per share value of € 2.56 each as a proportion of the issued capital.
As of December 31, 2006, Allianz SE had € 12,473,943 (4,872,634 shares) of authorized unissued capital (Authorized Capital 2006/II) which can be issued at any time up to February 7, 2011. The Board of Management, with approval of the Supervisory Board, is authorized to exclude the pre-emptive rights of shareholders if the shares are issued to employees of the Allianz Group. Further, as of December 31, 2006, Allianz SE had € 5,632,000 (2,200,000 shares) of unissued conditional authorized capital which will be carried out only to the extent that conversion or option rights are exercised by holders of bonds issued by Allianz SE or any of its subsidiaries or that mandatory conversion obligations are fulfilled.
Capital increase for merger with RAS 25,123,259 — — Exercise of warrants — 9,000,000 — Capital increase for cash — 10,116,850 — Capital increase for
Change in treasury shares held for trading purposes (2,014,874) 1,008,088 (666,288) Issued shares outstanding as of
(2005: 3,954) shareswerewarehoused and booked as treasury shares for further subscriptions by employees in the context of the employee share purchase plan in 2007. As a result, issued capital increased by € 3mnand capital reserve increased by € 126mn.
In September 2005, the AllianzGroup issued 10,116,850 shares for proceeds of € 1,062mn, which increased issued capital by € 26mnand capital reserve of € 1,036mn.
Dividends For the year ended December 31, 2006, the Board of Management will propose to shareholders at the Annual General Meeting the distribution of a dividend of € 3.80 per qualifying share. During the years ended December 31, 2005 and 2004, Allianz SE paid a dividend of € 2.00 and € 1.75, respectively, per qualifying share.
In order to enable Dresdner Bank Group to trade in shares of Allianz SE, the Annual General Meeting on May 3, 2006 authorized the Allianz Group’s domestic or foreign credit institutions in which Allianz SE has a majority holding to acquire treasury shares for trading purposes pursuant to clause 71(1) no. 7 of the Aktiengesetz. During the year ended December 31, 2006, in accordance with this authorization, the credit institutions of the Allianz Group purchased 44,741,900 (2005: 83,202,188) of Allianz SE’s shares at an average price of € 131.45 per share (2005: € 104.66), which included previously held Allianz SE shares. During the year ended December 31, 2006, 42,180,935 shares (2005: 87,652,805) were disposed of holdings at an average price of € 132.76 per share (2005: € 105.06). During the year ended December 31, 2006, the gains arising from treasury share transactions and in consideration of the holding, were € 29mn (2005: losses of € 31 mn), which were recorded directly in revenue reserves.
The resulting short position in own shares is hedged by the use of derivatives and is reflected in the revenue reserves. Due to written put options the Allianz Group is obliged to buy own shares amounting to € 2mn (2005: € 1,261mn), in case the put options are exercised.
Dresdner Bank Group 382 2,332,442 0.54 Dresdner Bank Group (obligation for written put options on Allianz SE shares) 2 — —
Dresdner Bank Group 40 317,568 0.08 Dresdner Bank Group (obligation for written put options on Allianz SE shares) 1,261 — —
At December 31, 2006, our eligible capital for the solvency margin, required for insurance groups under German law, was € 54.0 bn (2005: € 43.6 bn), surpassing the minimum legally stipulated level by € 38.5 bn (2005: € 29.4 bn). This margin resulted in preliminary cover ratio2) of 349% (2005: 307%).
The following table sets forth Dresdner Bank’s BIS capital ratios: As of December 31, 2006 € mn € mn
Tier I capital (core capital) 12,469 11,126 Tier I & Tier II capital 18,668 18,211 Tier III capital (supplementary capital) — — Total capital 18,668 18,211
the appropriate regulatory body. Such restrictions provide that a companymay only pay dividends up to an amount in excess of certain regulatory capital levels or based on the levels of undistributed earned surplus or current year income or a percentage thereof. By way of example only, the operations of our insurance subsidiaries located in the United States are subject to limitations on the payment of dividends to their parent company under applicable state insurance laws.
Share of earnings from investments in associates and joint ventures 287 253 253 Rent from real estate held
Income (expense) from financial assets and liabilities held for trading 83 (808) 1,282 7 (273) 72 363 Income (expense) from financial assets designated at fair value through
Life/Health Segment Income from financial assets and liabilities held for trading for the year ended December 31, 2006 includes expenses of € 811 mn (2005: € 377 mn; 2004: € 104 mn) from derivative financial instruments in the Life/Health insurance segment. This includes expenses from derivative financial instruments related to equity indexed annuity contracts and guaranteed benefits under unit-linked contracts of € 350 mn (2005: € 199 mn; 2004: € 128 mn) and expenses from other derivative financial instruments of € 461 mn (2005: € 178 mn; 2004: income: € 24 mn).
Real estate held for 1) During the year ended December 31, 2006, includes realized gains from the disposal of subsidiaries and businesses of € 613 mn (2005: € 394 mn; 2004: 2) During the year ended December 31, 2006, includes realized losses from the disposal of subsidiaries of € 3 mn (2005: € 14 mn; 2004: € 251 mn).
Sales and service revenues — 173 173 Other operating revenues — — — Interest income — 2 2
Ceded Claims and insurance benefits paid 3,130 777 (27) 3,880 Change in loss and loss adjustment expenses (774) 118 2 (654)
Ceded Claims and insurance benefits paid 3,429 875 (8) 4,296 Change in loss and loss adjustment expenses (282) 18 — (264)
Ceded Claims and insurance benefits paid 3,421 1,045 27 4,493 Change in loss and loss adjustment expenses (1,292) (14) 1 (1,305)
Aggregate policy reserves (225) (5,162) — — (5,387) Other insurance reserves (11) (12) — — (23) Expenses for premium refunds (521) (5,409) — (26) (5,956)
Net Aggregate policy reserves (225) (4,204) — — (4,429) Other insurance reserves (56) (32) — — (88)
Investments in associates and joint ventures (12) (50) (59) Real estate held for
Cost of goods sold — — — Commissions — — — General and administrative
During the year ended December, 31, 2006, current income tax expense included a benefit of € 51 mn (2005: charge of € 44 mn; 2004: charge of € 17 mn) related to prior periods. The dividend distribution for the year ended December 31, 2005, reduced corporate taxes for the year ended December 31, 2006, by € 38mn. Due to the “moratorium” introduced by the “bill on the reduction of tax privileges”, the dividend distribution for the year ended December 31, 2004, did not lead to a reduction of corporate taxes for the year ended December 31, 2005.
The tax rates used in the calculation of the Allianz Group deferred taxes are the applicable national rates, which in 2006 ranged from 10.0% to 46.1%. Changes to tax rates already adopted on December 31, 2006, are taken into account.
Tax losses carried forward are scheduled according to their expiry periods as follows: € mn 2014 — 2015 — 2016 — >10 years 2,245 Unlimited 10,414 Total 13,336
The net fee and commission income of the Allianz Group’s Banking segment includes the following: € mn € mn € mn
Volume of foreign currency exposure from the Banking segment The amounts reported constitute aggregate Euro equivalents of a wide variety of currencies outside the European Monetary Union (“EMU”). Any differences between assets and liabilities are a result of differingmeasurements under current accounting policies. Loans and advances to banks, loans and advances to customers, liabilities to banks and liabilities to customers are reported at amortized cost, while all derivative transactions are accounted for at fair value.
Trustee business in the Banking segment The following presents trustee business within the Allianz Group’s Banking segment not recorded in the balance sheet: As of December 31, 2006 € mn € mn
Liabilities to banks 870 1,035 Liabilities to customers 3,020 2,972 Total liabilities 3,890 4,007 1) Including € 1,964 mn (2005: € 2,170 mn) of trustee loans.
Other banking information As of December 31, 2006, the Allianz Group had deposits that have been reclassified as loan balances of € 6,697mn (2005: € 6,131 mn) and deposits with related parties of € 627 mn (2005: € 2,297 mn). The Allianz Group received no deposits on terms other than those available in the normal course of banking operations. An amount of € –mn (2005: € 132 mn) eligible for refinancing with the central bank is held in cash funds.
The counterparty settlement risk is virtually excluded in the case of exchange-traded products, as these are standardized products. By contrast, over-the-counter (“OTC”) products, which are individually traded contracts, carry a theoretical credit risk amounting to the replacement value. The Allianz Group therefore closely monitors the credit rating of counterparties for OTC derivatives. In the derivatives portfolios of the Allianz Group’s banking operations 96% of the positive replacement values, which are essential for assessing counterparty risk, involve counterparties with “investment grade” ratings. To reduce the counterparty risk from trading activities, so-called cross-product nettingmaster agreements with the business partners are established. In the case of a defaulting counterparty, nettingmakes it possible to offset claims and liabilities not yet due.
Derivative financial instruments indexed to Allianz Group’s shares The Allianz Group enters into various types of contracts indexed to Allianz Group shares with third-parties. Allianz Group uses such contracts as a hedge of its future obligations under its share-based compensation plans. In addition, in connection with various banking products offered by the Dresdner Bank Group, the Dresdner Bank Group has entered into various types of option contracts indexed to Allianz SE shares and AGF shares.
These contracts that are cash settled are accounted for as financial assets and liabilities held for trading. The contracts that are share settled are accounted for as equity transactions, with the exception of written put options and short forward contracts. The Allianz Group records a liability for the present value of its obligation to purchase the share with an offset to shareholders’ equity.
The following table summarizes these option positions: Total shares Maturity Settlement Fair Value Weighted average strike price/ forward rate €As of December 31,
The fair value of a financial instrument is defined as the amount for which a financial instrument could be exchanged between two willing parties in the ordinary course of business. If market prices are not available, the fair value is based on estimates using the present value of future cash flowsmethod or another appropriate valuationmethod. These methods are significantly influenced by the assumptionsmade, including the discount rate applied and the estimates of future cash flows. Specific financial instruments are discussed below.
The fair value of derivative financial instruments is derived from the value of the underlying assets and other market parameters. Exchange-traded derivative financial instruments are valued using the fair-valuemethod and based on publicly quotedmarket prices. Valuation models established in financial markets (such as present value models or option pricingmodels) are used to value OTC-traded derivatives. In addition to interest rate curves and volatilities, these models also take into account market and counterparty risks. Fair value represents the capital required to settle in full all the future rights and obligations arising from the financial contract.
The following table presents the carrying amount and estimated fair value of the Allianz Group’s financial instruments: As of December 31, 2006 2005
Financial liabilities Financial liabilities held for trading 78,762 78,762 86,392 86,392 Financial liabilities designated at fair value through income 937 937 450 450 Liabilities to banks and customers 361,078 361,278 310,316 310,591 Investment contracts with policyholders 87,108 87,267 88,884 91,092 Financial liabilities for unit linked contracts 61,864 61,864 54,661 54,661 Derivative financial instruments and firm commitments included in other
Financial liabilities for puttable equity instruments 3,750 3,750 3,137 3,137 Certificated liabilities, participation certificates and subordinated liabilities 71,284 73,212 73,887 76,454 45 Related party transactions
Schering Disposal In June 2006, the Allianz Group sold its 10.6% shareholding in Schering AG for approximately € 1.8 bn to Dritte BV GmbH, a 100% subsidiary of Bayer AG. Following this sale, Bayer AG acquired control of Schering AG. Onemember of the Board of Management of Allianz SE is a member of the Supervisory Board of Bayer AG, but this individual did not participate in the meeting of the Supervisory Board of Bayer AG that approved the acquisition of Schering AG. In addition, at the time of the transaction, the Chairman of the Supervisory Board of Bayer AG was also amember of Allianz’s Supervisory Board but was not involved in Allianz SE’s decision to sell its interest in Schering AG to Bayer AG, which occurred at the level of the Board of Management.
resolved to transfer shares from its minority shareholders to Allianz SE as principal shareholder in return for payment of a cash settlement amounting to € 51.50 per share. The amount of the cash settlement was established by Allianz SE on the basis of an expert opinion, and its adequacy was confirmed by a court appointed auditor. Some of the formerminority shareholders applied for a court review of the appropriate amount of the cash settlement in a mediation procedure (Spruchverfahren), which is pending with the district court (Landgericht) of Frankfurt. We believe that a claim to increase the cash settlement does not exist. In the event that the court were to determine a higher amount as an appropriate cash settlement, this would affect all approximately 16 mn shares that were transferred to Allianz SE.
The U.S. Department of Justice has alleged False Claims Act violations related to FFIC’s involvement as a provider of Federal crop insurance from 1997 to 2003. The majority of the allegations concern falsified documentation in FFIC’s Lambert, Mississippi and Modesto, California field offices. Two former FFIC claims employees and one contract adjuster have pled guilty to assisting farmers in asserting fraudulent crop claims. In November 2006, the Department of Justice proposed to FFIC a resolution of all civil, criminal and administrative allegations in the form of an offer to settle. FFIC is in the process of evaluating the offer, and the outcome of this matter cannot be predicted at this stage.
Three members of the Fireman’s Fund group of companies in the United States, all subsidiaries of Allianz SE, are amongst the roughly 135 defendants named in a class action filed on August 1, 2005 in the United States District Court of New Jersey in connection with allegations relating to contingent commissions in the insurance industry. No class has been certified for this class action proceeding and the discovery stage is still underway. As a result, it is not possible to predict potential outcomes or assess any eventual exposure at this point.
Dresdner Bank AG is a member of the German banks’ Joint Fund for Securing Customer Deposits (Joint Fund),
Other commitments Other principal commitments of the Allianz Group include the following: For Allianz of America Inc., Wilmington, Allianz Group posted a surety declaration for obligations in connection with the acquisition of Allianz Global Investors of America L.P., Delaware (“AGI L.P.”). The Allianz Group had originally acquired a 69.5% interest in AGI L.P., whereby minority interest holders had the option of putting their shares to Allianz of America, Inc. On December 31, 2006, the remaining interest of Pacific Life (theminority interest holder) in AGI L.P. was 2.0%, resulting in a commitment to Pacific Life amounting to USD 0.3 bn on December 31, 2006.
Pursuant to para. 124 ff. of the German Insurance Supervision Act (Versicherungsaufsichtsgesetz, VAG), a mandatory insurance guarantee scheme
(Sicherungsfonds) for life insurers was implemented in Germany. Eachmember of the scheme is obliged to make to the scheme annual contributions as well as special payments under certain circumstances. The exact amount of obligations for eachmember is calculated according to the provisions of a Federal Regulation („Sicherungsfonds-Finanzierungs-Verordnung (Leben) – SichLVFinV“). As of December 31, 2006, the future liabilities of Allianz LebensversicherungsAktiengesellschaft and its subsidiaries to the insurance guarantee scheme amount to annual contributions of € 47 mn and an obligation for special payments of
Assets pledged and collateral The carrying amount of the assets pledged as collateral where the secured party does not have the right by contract or custom to sell or repledge the assets are as follows: As of December 31, 2006 € mn € mn
As of December 31, 2006, the Allianz Group has received collateral with a fair value of € 254,653 mn (2005: € 213,333 mn), respectively, which the Allianz Group has the right to sell or repledge. As of December 31, 2006, € 134,005 mn (2005: € 137,559 mn), respectively, related to collateral that the Allianz Group has received and sold or repledged.
Prepaid benefit cost (265) (262) Accrued benefit cost 4,120 5,856 Net amount recognized 3,855 5,594
The following table sets forth the changes in the projected benefit obligations, the changes in fair value of plan assets and the net amount recognized for the various Allianz Group defined benefit plans: € mn € mn
Service cost 472 353 Interest cost 725 693 Plan participants’ contributions 61 66
Benefits paid (678) (655) Changes in the consolidated subsidiaries of the Allianz Group 321 74 Projected benefit obligations as of
Benefits paid3) (307) (293) Changes in the consolidated subsidiaries of the Allianz Group 256 27 Fair value of plan assets as of
As of December 31, 2006, post-retirement health benefits included in the projected benefit obligation and net amount recognized amounted to € 142 mn (2005: € 165 mn) and € 152 mn (2005: € 151 mn), respectively. As of December 31, 2006, the accumulated benefit obligation for all defined benefit plans was € 16,457 mn
Projected benefit obligation 15,567 16,069 Accumulated benefit obligation 14,954 15,242 Fair value of plan assets 9,130 7,215
The net periodic benefit cost related to defined benefit plans consists of the following components: € mn € mn € mn
The actual return on plan assets amounted to € 467 mn, € 883 mn, € 431 mn during the years ended
A summary of amounts related to defined benefit plans is as follows: € mn
Projected benefit obligation 17,280 Fair value of plan assets 10,888 Funded status 6,392 Actuarial (gains) / losses from experience adjustments on: Plan obligations 8 Plan assets 90
The weighted-average value of the assumptions for the Allianz Group’s defined benefit plans used to determine projected and accumulated benefit obligation: As of December 31, 2006 %
The weighted-average value of the assumptions used to determine net periodic benefit cost: %
Expected long-term return on plan assets 5.3 5.8 6.4 Rate of compensation
Equity securities 28.3 28.4 Debt securities 66.6 66.0 Real estate 2.9 3.6
Contributions During the year ending December 31, 2007, the Allianz Group expects to contribute € 254 mn to its defined benefit plans and pay € 375 mn directly to plan participants of its defined benefit plans.
Defined contribution plans Defined contribution plans are funded through independent pension funds or similar organizations. Contributions fixed in advance (e.g., based on salary) are paid to these institutions and the beneficiary’s right to benefits exists against the pension fund. The employer has no obligation beyond payment of the contributions. Themain pension fund is the Versicherungsverein des Bankgewerbes a.G., Berlin, which covers most of the banking employees in Germany.
During the year ended December 31, 2006, the Allianz Group recognized expense for defined contribution plans 48 Share-based compensation plans
of the reference price. The reference price represents the average of the closing prices of an Allianz SE share on the ten trading days prior to the grant date. The stock appreciation rights vest after two years and expire after seven years. Upon vesting, the stock appreciation rights may be exercised by the plan participant if the following market conditions are attained: • during their contractual term, themarket price of Allianz SE share has outperformed the Dow Jones Europe STOXX Price Index at least once for a period of five consecutive trading days; and
In addition, upon death of plan participants, a change in control of the Allianz Group or the sale of the subsidiary that employs the plan participant, the stock appreciation rights vest immediately.
The fair value of the options at grant date is measured using a Cox-Rubinstein binomial tree option pricing model. Option valuationmodels require the input of subjective assumptions including the expected stock price volatility and the expected life of the options. Volatility was derived from observed historical market prices. In the absence of historical information regarding employee stock appreciation exercise patterns (all plans issued between 1999 and 2002 are significantly “out of themoney”), the expected life has been estimated to equal the term tomaturity of the stock appreciation rights.
A summary of the number and the weighted-average grant date fair value of the nonvested stock appreciation rights are as follows: Number Weighted average grant date fair value €
As of December 31, 2006, there were 1,951,716 stock appreciation rights, with a weighted average reference price of € 76.99, that were granted during the years ended December 31, 2003 and 2004, exercisable as the vesting andmarket conditions were met.
As of December 31, 2006, 1,103,025 stock appreciation rights, with a weighted average reference price of € 285.62, that were granted before 2003, were not exercisable as themarket conditions were not met.
The stock appreciation rights are accounted for as cash settled plans by the Allianz Group. Therefore, the Allianz Group accrues the fair value of the stock appreciation rights as compensation expense over the vesting period. Upon vesting, any changes in the fair value of the unexercised stock appreciation rights are recognized as compensation expense. During the year ended December 31, 2006, the Allianz Group recognized compensation expense related to the unexercised stock appreciation rights of € 116mn (2005: € 99 mn; 2004: € 23 mn). During the year ended December 31, 2006, the Allianz Group recognized a deferred tax benefit related to the unexercised stock appreciation rights of € 30 mn (2005: € 24 mn; 2004: € 6 mn). During the year ended December 31, 2006, the total amount paid related to stock appreciation rights exercised was € 46mn (2005: As of December 31, 2006, the Allianz Group recorded a liability, in other liabilities, for the unexercised stock appreciation rights of € 276 mn (2005: € 160 mn). Based upon the fair value of the stock appreciation rights as of December 31, 2006, the total compensation expense not yet recognized related to the nonvested stock appreciation rights, due to vesting requirements was € 72mn. The total compensation expense not yet recognized related to the nonvested stock appreciation rights is expected to be recognized over a weightedaverage period of 1 year.
Restricted stock units The restricted stock units 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 issue one Allianz SE share, or other equivalent equity instrument, for each restricted stock unit granted. The restricted stock units vest after five years. The Allianz Group will exercise the restricted stock units on the first stock exchange day after their vesting date. On the exercise date, the Allianz Group can choose the settlement method for each restricted stock unit.
In addition, upon death of plan participants, a change in control of the Allianz Group or the sale of the subsidiary that employs the plan participant, the restricted stock units vest immediately.
€ 18mn). During the year ended December 31, 2006, the Allianz Group recognized a deferred tax benefit related to the nonvested restricted stock units of € 25 mn (2005: € 14 mn; 2004: € 5 mn). During the year ended December 31, 2006, the total amount paid related to restricted stock units exercised was € 0.2 mn (2005: As of December 31, 2006, the Allianz Group recorded a liability, in other liabilities, of € 157 mn (2005: € 72 mn) for the nonvested restricted stock units. Based upon the fair value of the restricted stock units as of December 31, 2006, the total compensation expense not yet recognized related to the nonvested restricted stock units, due to vesting requirements, was € 247 mn. The total compensation expense not yet recognized related to the nonvested restricted stock units is expected to be recognized over a weighted-average period of 3 years.
PIMCO LLC Class B Unit Purchase Plan When acquiring AGI L.P. during the year ended December 31, 2000, Allianz SE caused Pacific Investment Management Company LLC (“PIMCO LLC”) to enter into a Class B Purchase Plan (the “Class B Plan”) for the benefit of members of themanagement 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.
A summary of the number and the weighted-average grant date fair value of the outstanding Class B equity units are as follows: Number Weighted average grant date fair value €
A summary of the number and theweighted-average grant date fair value of the nonvested share units are as follows: Number Weighted average grant date fair value €
AGF Group share option plan The AGF Group has awarded share options on AGF shares to eligible AGF Group executives andmanagers of subsidiaries, as well as to certain employees, whose performance justified grants. The primary objective of the share option plan is to encourage the retention of key personnel of AGF Group and to link their compensation to the performance of AGF Group. These share options are independent of the remuneration plans of the Allianz Group. Share options granted have an exercise price of at least 85% of themarket price on the day of grant. The maximum term for the share option granted is eight years.
The fair value of the options at grant date is measured using a Cox-Rubinstein binomial tree option pricing model. Option valuationmodels require the input of subjective assumptions including the expected stock price volatility and the expected life of the options. Volatility was derived from observed historical market prices aligned with the expected life of the options. The expected life has been estimated to equal the term to maturity of the options.
A summary of the number, weighted-average exercise price, weighted-average remaining contractual term and aggregate intrinsic value of the options outstanding and exercisable are as follows: Number Weighted average exercise price €
During the year ended December 31, 2006, the total intrinsic value of share options exercised was € 77mn (2005: € 50 mn; 2004: € 9 mn). During the year ended December 31, 2006, the AGF Group recorded compensation expense related to the share options of € 30 mn (2005: € 14 mn; 2004: € 16 mn). During the year ended December 31, 2006, the Allianz Group did not recognize a deferred tax benefit related to the share options as the share compensation expense is not tax deductible in France. As of December 31, 2006, the total compensation expense not yet recognized related to the share options was € 22mn (2005: € 5 mn). The total compensation expense not yet recognized related to the share options is expected to be recognized over a weighted-average period of 1 year.
The share options allow for exercise at any time after the vesting period and before expiration, provided that: • on the date of exercise, the RAS share price is at least 20% higher than the average share price in January of the grant year (for share options granted during the year ended December 31, 2001, the hurdle is 10%), and
The fair value of the options at grant date wasmeasured using a trinomial tree option pricingmodel. Option valuationmodels require the input of subjective assumptions including the expected stock price, volatility and the expected life of the options. Volatility was derived from observed historical market prices aligned with the expected life of the options. The expected life was estimated to be equal the term to maturity of the options.
During the year ended December 31, 2006, the Allianz Group recorded compensation expense of € 1 mn (2005: € 1 mn; 2004: € 3 mn) related to these share options. During the year ended December 31, 2006, the Allianz Group did not recognize a deferred tax benefit related to the share options as the expenses are not tax deductible in Italy.
The following table provides the grant date fair value and the assumptions used in calculating their fair value: Fair value € 66.35 Assumptions: Share price on modification date € 145.41 Expected life (years) 5 Risk free interest rate 3.9% Expected volatility 30. 5% Dividend yield 1.5%
During the year ended December 31, 2006, the Allianz Group recorded compensation expense of € 6 mn related to share options. During the year ended December 31, 2006, the Allianz Group did not recognize a deferred tax benefit related to the share options as the expenses are not tax deductible. As of December 31, 2006, the total compensation expense not yet recognized related to the share options was € 4mn. The total compensation expense not yet recognized related to the share options is expected to be recognized over a weighted-average period of 1 year.
In addition, during the year ended December 31, 2006, the AGF Group offered AGF shares to qualified employees in France at favorable conditions. The shares have aminimumholding period of five years. During the year ended December 31, 2006 the number of shares sold to employees under this plan was 651,012 (2005: -; 2004: 787,685). During the year ended December 31, 2006 the compensation expense recorded was € 12mn (2005: Other share option and shareholding plans The Allianz Group has other local share-based compensation plans, including share option and employee share purchase plans, none of which, individually or in the aggregate, are material to the consolidated financial statements. During the year ended December 31, 2006, the total expense, in the aggregate, recorded for these plans was € 3mn (2005: 49 Restructuring plans
As of December 31, 2006, the Allianz Group has provisions for restructuring resulting from a number of restructuring programs in various 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 respective initiatives.
Release of provisions via payments (2) (13) (83) (98) (288) (68) (356) (274) (8) (282) Release of provisions via transfers (69) (20) — (89) (294) — (294) — — — Changes in the consolidated subsidiaries of
Allianz Deutschland AG´s provisions for restructuring During the year ended December 31, 2006, Allianz Deutschland AG announced a restructuring plan for the insurance business in Germany, which is expected to continue through 2008. The objective of the restructuring program is to make the insurance businessmore customer focused, operate more efficiently and achieve growth.
The insurance business in Germany was formally reorganized in 2005 with the integration of the three companies, Allianz Versicherungs-AG, Allianz Lebensversicherungs-AG and Allianz Private Krankenversicherungs-AG under the newly founded Allianz Deutschland AG. As part of the restructuring, the business and distribution structure has been changed and activities of central staff functions have been transferred to Allianz Deutschland AG.
Dresdner Bank Group’s provisions for restructuring Dresdner Bank Group supplemented its existing restructuring programs introduced since 2000 with the program ‘New Dresdner Plus’. For these combined initiatives, Dresdner Bank Group has announced plans to eliminate an aggregate of approximately 19,500 positions. As of December 31, 2006, an aggregate of approximately 16,350 positions had been eliminated and approximately 425 additional employees had contractually agreed to leave Dresdner Bank Group under these initiatives.
include themeasures “2005 Measures”, “2004 Measures”, “New Dresdner” and “Other programs”.
The organisational structure and the processes of the segment Business Services with its back-office functions Banking Services, IT and Human Recourses follow the new businessmodel. In particular Banking Services is focused on establishing a consistent industrialization of its respective back office processes. Also the Corporate Function units will align their processes to the new businessmodel.
Through the program “New Dresdner Plus”, Dresdner Bank Group plans to eliminate 2,480 positions. Approximately 85 employees had been terminated and approximately 170 additional employees had contractually agreed to leave Dresdner Bank Group pursuant to program “New Dresdner Plus” as of
Provisions recorded during 2006 Release of provisions via transfers € mn
The Allianz Group’s share compensation plans with potentially dilutive securities of 335,346 (2005: 493,229) are included in the calculation of diluted earnings per share for the year ended December 31, 2006.
Employee information As of December 31, 2006, the AllianzGroup employed a total of 166,505 people (2005: 177,625; 2004: 176,501). Of those people, 76,154 (2005: 72,195; 2004: 75,667) were employed inGermany and 90,351 (2005: 105,430; 2004: 100,834) abroad. During the year endedDecember 31, 2006, the number of employees undergoing training decreased by 68 to 3,955. The average total number of employees for the year endedDecember 31, 2006was 172,065 people.
Issuance of the Declaration of Compliance with the German Corporate Governance Code according to clause 161 AktG On December 18, 2006, the Board of Management and the Supervisory Board of Allianz SE issued the Declaration of Compliance according to clause 161 AktG andmade it available on a permanent basis to the shareholders on the company’s website. The text of the Declaration of Compliance is also reproduced in the Corporate Governance section beginning on page 10 of this annual report.
Total compensation of the Board of Management for the year ended December 31, 2006 amounts to € 28.9 mn stock appreciation rights and 66,280 (127,207) restricted stock units with a total fair value at grant date of € 12.3 mn (2005: € 16.8 mn) were granted to the Board of Management for the year ended December 31, 2006. Compensation to formermembers of the Board of Management and their beneficiaries totaled € 4.3 mn
Early partial redemption of BITES exchangeable bond On January 29, 2007, the Allianz Group announced its intention to make an early redemption of 64.35% of the BITES bond issued in February 2005 with shares of Munich Re. The number of Munich Re shares used to redeem the bond was based on the averages of the DAX index and the Munich Re share price during a 20-day reference period which started on February 1, 2007 and ended on February 28, 2007. The delivery of the Munich Re shares took place on March 9, 2007.
BITES bond was reduced to 35.65% of the original principal value. The number of outstanding bonds remained unchanged.
As a result of the partial redemption of this exchangeable bond, the Allianz Group’s shareholding in Munich Re was reduced from approximately 9.4% to approximately 4.9%.
Net claims from the “Kyrill” winter storm in Europe On January 31, 2007, the Allianz Group published its initial estimate for the net claims arising from the “Kyrill” winter storm in Europe in January 2007. Based on the current information, net claims are expected to amount to approximately € 350 mn.
Sale of shares in BMW AG On February 7, 2007, as a part of its active portfolio management, Allianz SE sold approximately 16.1 million ordinary shares in BMWAG. The shares were placed with institutional investors. The sale resulted in proceeds of approximately € 736 mn.
Acquisition of 50% in Sdu Group OnMarch 5, 2007, a subsidiary of Allianz Capital Partners GmbH has entered into an agreement to acquire 50% of Sdu Group from the Dutch State. The proportionate investment volume amounts to approximately € 207 mn. The acquisition is expected to be completed by the end of March 2007.
Selected subsidiaries and other holdings OPERATING SUBSIDIARIES – GERMANY Equity € mn % owned1)
AAAM S.A., Paris 31 84.9 Adriatica de Seguros C.A., Caracas 20 98.3 AGF Allianz Argentina Compania de Seguros Generales S.A., Buenos Aires 16 100.0 AGF Asset Management S.A., Paris 90 99.8 AGF Belgium Insurance S.A., Brussels 390 100.0 AGF Brasil Seguros S.A., Sao Paulo 151 72.5 AFG La Lilloise S.A., Paris 85 100.0 Alba Allgemeine Versicherungs-Gesellschaft, Basel 23 100.0 Allianz Australia Limited, Sydney 972 100.0 Allianz Bulgaria Insurance and Reinsurance Company Ltd., Sofia 21 78.0 Allianz Bulgaria Life Insurance Company Ltd., Sofia 11 99.0 Allianz Compañia de Seguros y Reaseguros S.A., Barcelona 676 99.9 Allianz Cornhill Insurance plc., Guildford 1,182 98.02)
dit-Euro Bond Total Return Fonds 5,729 22.6 AGF Euribor 3,461 4.03)
Phenix Alternative Holding 3,275 36.4 AGF Eurocash 1,827 31.9 Deutsche Schiffsbank AG, Bremen und Hamburg 559 40.0 Oddo, Paris 304 20.0 Objectif Japon 302 20.8 Cofitem Cofimur, Paris 236 21.8 AGF Euro Credit Alpha 214 29.4 FONCIERE DES 6 ET 7 PARIS 197 23.6 PHRV (Paris Hotels Roissy Vaugirard), Paris 178 24.9 MFG Flughafen-Grundstücksverwaltunggesellschaft mbH & Co. BETA KG, Gruenwald 171 29.4 W Finance Europe 170 14.83)
Dresdner-Cetelem Kreditbank GmbH, Munich 162 49.9 Kommanditgesellschaft Allgemeine Leasing GmbH & Co, Gruenwald 152 40.5 Citylife Srl., Milano 129 26.7 Koç Allianz Sigorta T.A.S., Istanbul 117 37.1 Russian People's Insurance Society "Rosno", Moskau 116 47.7 Depfa Holding III, Frankfurt 109 22.4 AGF Haut Rendement 105 25.9 Parv Tar Ret + Eur 84 37.4 Bajaj Allianz Life Insurance Company Ltd., Pune 59 26.0 AGF Peh Eur. IV FCPR 58 49.2 Bajaj Allianz General Insurance Company Ltd., Pune 52 26.0 UBF N.V., Hilversum 22 39.7 1) Associated enterprises are all those enterprises other than affiliated enterprises or joint ventures, in which the Allianz Group has an interest of between 20% and 50% regardless of whether a significant influence is exercised or not. The presented associated enterprises represent 90% of total carrying amount of investments in associated enterprises.
% Group equity € mn Net profit € mn Balance sheet date
Münchener Rückversicherungs-Gesellschaft Aktiengesellschaft in München, Munich 2,915 9.7 26,429 3,440 12/31/2006 Pirelli & Co. SpA, Mailand 176 6.5 5,614 327 12/31/2005 Rhön-Klinikum AG, Bad Neustadt/Saale 128 6.8 642 84 12/31/2005 Royal Dutch Shell plc, London 551 0.3 90,924 25,311 12/31/2005 1) Market value greater than or equal to €100 mn and percentage of shares owned greater than or equal to 5%, or market value greater than or equal to €500 mn, excluding trading portfolio of banking business.
2) Including shares held by dependent subsidiaries (incl. consolidated investment funds).
In our opinion, based on the findings of our audit, the consolidated financial statements comply with IFRS, as adopted by the EU, the additional requirements of the German commercial law pursuant to § 315a Abs. 1 HGB and supplementary provisions of the articles of incorporation and give a true and fair view of the net assets, financial position and results of operations of the Group in accordance with these requirements. The group management report is consistent with the consolidated financial statements and as a whole provides a suitable view of the Group’s position and suitably presents the opportunities and risks of future development.
Affiliated enterprises The parent company of the Group and all consolidated subsidiaries. Subsidiaries are enterprises where the parent company can exercise a dominant influence over their corporate strategy in accordance with the control concept. This is possible, for example, where the parent Group holds, directly or indirectly, a majority of the voting rights, has the power to appoint or remove a majority of themembers of the Board of Management or equivalent governing body, or where there are contractual rights of control.
Country risk allowances are established for transfer risks. Transfer risk is a reflection of the ability of certain country to serve its external debt. These country risk allowances are based on an internal country rating systemwhich incorporates economic data as well as other facts to categorize countries.
Assets under management The total of all investments, valued at current market value, which the Group has under management with responsibility for maintaining and improving their performance. In addition to the Group’s own investments, they include investments held under management for third parties.
Cash flow statement Statement showingmovements of cash and cash equivalents during an accounting period, classified by three types of activity: • normal operating activities • investing activities • financing activities
Combined ratio Represents the total of acquisition and administrative expenses (net) and claims and insurance benefits incurred (net) divided by premiums earned (net).
Current employer service cost Net expense incurred in connection with a deferred benefit plan less any contributionsmade by the beneficiary to a pension fund.
Deferred tax assets/liabilities The calculation of deferred tax is based on temporary differences between the carrying amounts of assets or liabilities in the published balance sheet and their tax base, and on differences arising from applying uniform valuation policies for consolidation purposes. The tax rates used for the calculation are the local rates applicable in the countries of the enterprises included in the consolidation; changes to tax rates already adopted on the balance sheet date are taken into account.
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 realized and unrealized profits and losses from financial assets carried at fair value through income and financial liabilities carried at fair value through income. In addition, it includes commissions as well as any interest or dividend income from trading activities as well as refinancing costs.
Minority interests Those parts of the equity of affiliated enterprises which are not owned by companies in the Group.
OTC derivatives Derivative financial instruments which are not standardized and not traded on an exchange but are traded directly between two counterparties via over-thecounter (OTC) transactions.
Participating certificates Amount payable on redemption of participating certificates issued. The participating certificates of Allianz SE carry distribution rights based on the dividends paid, and subscription rights when the capital stock is increased; but they carry no voting rights, no rights to participate in any proceeds of liquidation, and no rights to be converted into shares.
Pension and similar obligations Reserves for current and future post-employment benefits formed for the defined benefit plans of active and former employees. These also include reserves for health care benefits and processing payments.
Premiums written/earned Premiums written represent all premium revenues in the year under review. Premiums earned represent that part of the premiums written used to provide insurance coverage in that year. In the case of life insurance products where the policyholder carries the investment
Reserve for loss and loss adjustment expenses Reserves for the cost of insurance claims incurred by the end of the year under review but not yet settled.
Segment reporting Financial information based on the consolidated financial statements, reported by business segments (Property-Casualty, Life/Health, Banking, Asset Management and Corporate) and by regions.
Unrecognized past service cost Present value of increases in pension benefits relating to previous years’ service, not yet recognized in the pension reserve.
US GAAP Generally Accepted Accounting Principles in the United States of America.
Dr. Jürgen F. Kammer until December 31, 2006 until June 13, 2006 Chairman of the Supervisory Board Süd-Chemie AG
Dr.-Ing. Norbert Reithofer since January 1, 2007 Chairman of the Board of Management BMWGroup
Dr. h. c. Rudolf Rupprecht until December, 2006 Member of the Supervisory Board MAN AG
Professor Dr. Dennis J. Snower since October 14, 2006 President Institut für Weltwirtschaft, University of Kiel
Dr. Jörg Spiekerkötter until December 31, 2006 Member of the Board of Management Schering AG
Rahmi Koç Honorary Chairman of the Board of Directors Koç Holding AS
Dr. Wulf H. Bernotat Membership in other statutory supervisory boards in Germany METRO AG, RAG AG (Chairman), Bertelsmann AG Membership in Group bodies E.ON Energie AG (Chairman), E.ON Ruhrgas AG (Chairman) Membership in comparable *) supervisory bodies Membership in Group bodies E.ON Nordic AB (Chairman), E.ON Sverige AB (Chairman), E.ON UK plc (Chairman), E.ON U.S. Investments Corp. (Chairman)
Dr. Gerhard Cromme Membership in other statutory supervisory boards in Germany Axel Springer AG, Deutsche Lufthansa AG, E.ON AG, Siemens AG, ThyssenKrupp AG (Chairman) Membership in comparable *) supervisory bodies BNP PARIBAS S. A., Compagnie de Saint-Gobain S. A., Suez S. A.
Franz Fehrenbach until October 13, 2006 Membership in comparable *) supervisory bodies Membership in Group bodies Robert Bosch Corporation
Prof. Dr. Rudolf Hickel until October 13, 2006 Membership in other statutory supervisory boards in Germany GEWOBA AG Wohnen und Bauen in Bremen, Howaldtswerke-Deutsche Werft GmbH, Salzgitter AG Stahl und Technologie
Dr. Franz B. Humer Membership in other statutory supervisory boards in Germany Membership in Group bodies Hoffmann-La Roche AG (Chairman), Roche Deutschland Holding GmbH (Chairman), Roche Diagnostics GmbH (Chairman) Membership in comparable *) supervisory bodies DIAGEO plc London Membership in Group bodies Chugai Pharmaceutical Co. Ltd. Tokio, Roche Holding AG Basel (Chairman)
Sultan Salam until October 13, 2006 Membership in other statutory supervisory boards in Germany Dresdner Bank AG (until November 30, 2006)
Margit Schoffer Membership in other statutory supervisory boards in Germany Dresdner Bank AG
Clement B. Booth Membership in other statutory supervisory boards in Germany Membership in Group bodies Allianz Global Corporate & Specialty AG (Chairman) Membership in comparable*) supervisory bodies Membership in Group bodies Allianz Australia Ltd., Allianz Cornhill Insurance plc (Chairman), Allianz Irish Life plc, Euler Hermes S. A.
Dr. Helmut Perlet Membership in other statutory supervisory boards in Germany GEA-Group AG Membership in Group bodies Allianz Deutschland AG, Allianz Global Corporate & Specialty AG (Vice Chairman), Dresdner Bank AG, Allianz Global Investors AG, Dresdner Bank AG Membership in comparable*) supervisory bodies Membership in Group bodiesAllianz Life Insurance of North America, Fireman’s Fund Insurance Company, Lloyd Adriatico S. p. A., Riunione Adriatica di Sicurtà S. p. A. ,
As of December 31, 2006 or (with members who resigned) day of resignation. *) We regard memberships in other supervisory bodies as “comparable” if the company is listed on a stock exchange or has more than 500 employees.
Jean-Philippe Thierry Membership in other statutory supervisory boards in Germany Membership in Group bodies Allianz Global Corporate & Specialty AG Membership in comparable *) supervisory bodies Baron Philippe de Rothschild, Compagnie Financière Saint-Honoré, Eurazeo, Paris Orléans, Pinault Printemps Redoute, Société Financière et Foncière de participation Membership in Group bodies AGF International, Allianz Compañia de Seguros y Reaseguros S. A., Allianz Nederland Groep N.V., Euler Hermes S. A. (Chairman), Mondial Assistance AG (Chairman),
Claims from natural catastrophes 36 Climate change and strategy 27, 99 Combined Ratio 36, 44 Convertible bond BITES 70 Corporate 63 Corporate Governance 6, 10ff. Cost-Income Ratios 36, 55, 61 Credit insurance 44, 68 Customer focus initiative 2, 26
E Earnings per share 37 Economic Value Added® 2, 75, 94-95
L Life and Health 48-53, 105-108 Liquidity and Capital Resources 70- 74 Lloyd Adriatico 44
N Net income 37 Net result 2 Neue Dresdner Plus program 37, 55, 93 NFJ Investment Group 59 Non-operating results 37
Share 28-31 Shareholder hotline 31 Shareholder structure 29 Shareholders’ equity 2 Slovakia 49
International Presence The following table sets forth selected Allianz Group operating subsidiaries by geographic region at December 31, 2006, including our ownership percentage. It does not contain all subsidiaries of the Allianz Group, nor does it indicate whether an interest is held directly or indirectly by Allianz SE. Further, the ownership percentage presented in the following table includes equity participations held by dependent enterprises of the Allianz Group in full, even if the Allianz Group’s ownership in the dependent enterprise is below 100 %. Please see pages 225 to 228 for a more extensive list of Allianz Group subsidiaries.
�� Operating entity contributes a substantial portion of our total revenues within our primary geographic markets. Total revenues comprise Property-Casualty segment’s gross premiums written, Life/Health segment’s statutory premiums, Banking segment’s operating revenues and Asset Management segment’s operating revenues.
1) 99.99% of the voting share capital. 2) Controlled by the Allianz Group.
Photography: Michael Diekmann: Armin Brosch Dr. Henning Schulte-Noelle, IEC: Andreas Pohlmann