IAS 38 Expenditures relating to advertising and promotional activities are recognized as expense when the entity has the right to access the goods or has received the services. These activities now also specifically include mail order catalogues. Amendment deletes references to there being rarely, if ever, persuasive evidence to support an amortisation method for intangible assets with finite useful lives that results in a lower amount of accumulated amortisation than under the straight-line method, thereby effectively allowing the use of the unit of production method.
IAS 39 Changes in circumstances relating to derivatives are not reclassifications. When financial assets are reclassified as a result of an insurance company changing its accounting policy in accordance with IFRS 4, this is a change in circumstance, not a reclassification. The reference to “segment” is removed when determining whether an instrument qualifies as a hedge. The use of the revised effective interest rate rather than the original effective interest rate is required when remeasuring a debt instrument on the cessation of fair value hedge accounting.
IAS 40 The scope is being revised now including property that is being constructed or developed for future use as an investment property. Where an entity is unable to determine the fair value of an investment property under construction but expects to be able to determine its fair value on completion, the investment under construction shall be measured at cost until the fair value can be determined or the construction is complete.
In October 2008, the IASB released an exposure draft: Improving Disclosures about Financial Instruments, proposed amendments to IFRS 7. This exposure draft proposes in particular amendments to disclosure requirements that are based on a three-level fair value hierarchy (similar to that used in SFAS 157). The amendments apply to financial instruments and require disclosures about: – the level of the fair value hierarchy into which fair value measurements are categorized in their entirety. This requirement would apply both for fair values included in the consolidated balance sheet and for other fair values that are disclosed but not included in that statement.
For these measurements, the disclosures include a reconciliation from the beginning balances to the ending balances.
– the movements between different levels of the fair value hierarchy, and the reasons for those movements.
when buying goods or services, should account for their obligation to provide free or discounted goods or services if and when the customers redeem the points. Customers are implicitly paying for the points they receive when they buy other goods or services. Some revenue should be allocated to the points. Therefore, IFRIC 13 requires companies to estimate the value of the points to the customer and defer this amount of revenue as a liability until they have fulfilled their obligations to supply awards. IFRIC 13 is mandatory for annual periods beginning on or after July 1, 2008. Earlier application is permitted. The interpretation is expected to have no material impact the Allianz Group’s consolidated financial statements.
Construction of Real Estate. IFRIC 15 clarifies the definition of a construction contract and the articulation between IAS
In November 2008, the IFRIC issued IFRIC 17, Distributions of Non-cash Assets to Owners. IFRIC 17 clarifies that: – a dividend payable should be recognized when the dividend is appropriately authorized and is no longer at the discretion of the entity.
– an entity should recognise the difference between the dividend paid and the carrying amount of the net assets distributed in profit or loss.
IFRIC 17 applies to pro rata distributions of non-cash assets except for common control transactions. IFRIC 17 is effective for annual periods beginning on or after 1 July 2009 and is to be applied prospectively. Earlier application is permitted. The Allianz Group is currently evaluating the potential impact, if any, that the adoption of IFRIC 17 will have on the
In January 2009, the IFRIC issues IFRIC 18, Transfers of Assets from Customers. IFRIC 18 is particularly relevant for the utility sector. It clarifies the requirements of IFRS for agreements in which an entity receives from a customer an item of property, plant and equipment that the entity must then use either to connect the customer to a network or to provide the customer with ongoing access to a supply of goods and services. The entity might in certain cases receive cash from a customer which must be used only to acquire or construct the item of property, plant and equipment in order to connect the customer to a network or provide the customer with ongoing access to a supply of goods or services or both. IFRIC 18 includes a clarification with regard to
– the circumstances in which the definition of an asset is met,
Reclassification of Dresdner Bank Group as disposal group held for sale and discontinued operation
Thus, almost all assets and liabilities of Dresdner Bank have been reclassified and presented as separate line items
“Non-current assets and assets of disposal groups classified as held for sale” and “Liabilities of disposal groups classified as held for sale”, respectively, on the face of the consolidated balance sheet as of December 31, 2008. Comparative information has not been adjusted in accordance with IFRS 5.
� mn � mn � mn � mn � mn � mn
Income from fully consolidated private equity investments 2,367 — 2,367 1,392 — 1,392
Claims and insurance benefits incurred (gross) (46,409) — (46,409) (45,523) — (45,523) Claims and Insurance benefits incurred (ceded) 3,287 — 3,287 3,226 — 3,226 Claims and insurance benefits incurred (net) (43,122) — (43,122) (42,297) — (42,297)
Change in reserves for insurance and investment contracts (net) (10,685) — (10,685) (11,375) — (11,375)
Income before income taxes and minority interests in earnings 11,568 (1,005) 10,563 10,323 (760) 9,563
Few of Allianz Group’s subsidiaries have incorrectly allocated some of the costs into acquisition costs and administrative expenses in the past. These incorrect allocations have been corrected in the notes to the consolidated financial statements. This reclassification from administrative expenses to acquisition costs affects only the Property-Casualty segment.
The change in presentation has had no effect on consolidation, reported earnings or equity.
Commissions and profit received on reinsurance business ceded 691 (20) 671 689 (20) 669 Deferrals of acquisition costs 4,511 — 4,511 4,511 — 4,511 Amortization of deferred acquisition costs (4,384) — (4,384) (4,384) — (4,384)
ot es 4 Assets and liabilities of disposal groups classified as held for sale and discontinued operations
On November 27, 2008, Allianz and Commerzbank agreed to accelerate the change in ownership of Dresdner Bank.
According to the new agreement, Commerzbank will also immediately take ownership of the 39.8 % share, which was originally contemplated in the second step, in exchange for an additional cash payment of � 1.4 bn at the beginning of 2009. The trust fund agreed upon in the original transaction agreement will be foregone. In exchange, Allianz will receive a compensation payment of � 250 mn in cash. Other agreements remain unchanged. According to the agreement in
November 2008, Allianz will receive a total of � 3.215 bn in cash and 163.5 mn Commerzbank shares equal to an 18.4 %
Manager cominvest and a long-term distribution agreement in exchange for Dresdner Bank. With this new agreement, Dresdner Bank and Commerzbank should be able to merge approximately six to nine months earlier than originally planned.
(SoFFin), Allianz and Commerzbank agreed on January 9, 2009, to strengthen the new Commerzbank’s core capital ratio with a silent participation of � 750 mn from Allianz in
SoFFin in Commerzbank will dilute the newly acquired stake of Allianz in Commerzbank to about 13.8 %. The fair value of these considerations amounts to � 5.1 bn as of
The transfer of ownership of Dresdner Bank to Commerzbank was completed on January 12, 2009 as scheduled.
All income and expenses relating to the discontinued operations of Dresdner Bank have been reclassified and presented in a separate line item “Net income (loss) from discontinued operations, net of income taxes and minority interests in earnings” in the consolidated income statements for all years presented in accordance with IFRS 5.
The following tables shows the assets and liabilities of disposal groups classified as held for sale.
Financial liabilities carried at fair value through income 180,249 Liabilities to banks and customers 193,315 Deferred tax liabilities 214 Other liabilities 7,983 Certificated liabilities 22,419 Participation certificates and subordinated liabilities 6,289 Total liabilities of disposal groups classified as held for sale 410,469
� 3.5 bn, stemming from Dresdner Bank’s net loss of � 2.1 bn until the change in ownership and an impairment charge of
� 1.4 bn, reflecting the difference between the fair value of considerations agreed (� 7.8 bn) and the carrying value of
� 9.2 bn. Between October 1, 2008 and the date of completion of the transaction on January 12, 2009, the fair value of the agreed consideration declined by � 2.7 bn.
Interest and similar income 5,257 7,423 6,526 Income from financial assets and liabilities carried at fair value through income (net) (1,439) (430) 1,310 Realized gains/losses (net) 285 540 230 Fee and commission income 1,760 2,887 2,831 Other income — — 25 Total income from discontinued operations 5,863 10,420 10,922
Acquisition and administrative expenses (net) (3,326) (4,430) (5,018) Fee and commission expenses (267) (360) (311) Amortization of intangible assets (2) — —
Result from discontinued operations before income taxes and minority interests in earnings (1,633) 1,005 760
Minority interests in earnings (43) (73) (86) Result from operating activities of discontinued operations (2,074) 650 381
Impairment loss recognized on remeasurement of assets of disposal group to fair value less costs to sell as of September 30, 2008 2) (1,409) — — Result from transaction between September 30, 2008 and December 31, 2008 2) (2,928) — — After-tax loss on remeasurement of assets of disposal group to fair value less costs to sell (4,337) — —
Net income (loss) from discontinued operations (6,411) 650 381 1) For the year ended 2008 the result from operating activities of discontinued operations represents the nine months ended September 30, 2008. Previous year figures represent 12 months ended December 31.
Number of fully consolidated Special Purpose Entities (“SPE”) 59 55 46
Gazette as well as on the Company’s Website. The disclosure of equity investments includes individually listed commercial partnerships which are exempt from preparing single financial statements in accordance with section 264b of the German Commercial Code (“HGB”) as they are included in the consolidated financial statements of the
Allianz Group. Selected subsidiaries and associated entities are listed in the selected subsidiaries and other holdings section.
Allianz Hayat ve Emeklilik AŞ, Istanbul 89.0 07/21/2008 Life/Health 81 Increase in equity interest Allianz Sigorta AŞ, Istanbul 84.2 07/21/2008 Property-
In April 2008, the Allianz Group signed a share purchase agreement to acquire 47.1 % of shares in the non-life insurer
Emeklilik AŞ, Istanbul, for a total consideration of � 373 mn.
The transaction has been approved by the relevant regulatory and competition board on July 21, 2008 so that Allianz
The impact of the acquisition, net of cash acquired, on the consolidated statement of cash flows for the year ended
1) Classified as “held for sale” 2) At the date of first-time consolidation 3) Group share through indirect holder Roland Holding GmbH, Munich at the date of first-time consolidation: 65,0 %
Purchase price (49.8 % interest) 571 Subsequent acquisition costs 1 Total purchase price 572
Financial assets for unit-linked contracts 150 150 Reinsurance assets 136 136 Deferred acquisition costs 51 6 Other assets 201 183
At the date of acquisition the goodwill reflects mainly the market position and growth potential of the turkish insurance market.
Selecta AG, Muntelier at a purchase price of � 1,126 mn.
Intangible assets (1,113) Loans and advances to banks and customers (107) Other assets (301) Other liabilities 258 Deferred tax liabilities 190 Acquisition of subsidiary, net of cash acquired (1,073)
The impact on the Allianz Group’s net income for the year ended December 31, 2007 was � (11) mn.
Selecta AG, Muntelier was reclassified to disposal groups held for sale.
AG, Offenbach, at a purchase price of � 554 mn. Manroland
The impact of the acquisition of manroland AG, Offenbach, net of cash acquired, on the consolidated statement of cash flows for the year ended December 31, 2006 was: � mn
Other assets 1,316 1,131 Intangible assets 125 78 Total assets 1,661 1,426
The revenues of the combined entity (Allianz Group including manroland AG) for the year ended December 31, 2006 would have been � 102,137 mn if the acquisition date had been on January 1, 2006. The net income of the combined entity for the year ended December 31, 2006 would have been � 7,024 mn if the acquisition date had been on
DEGI Deutsche Gesellschaft für Immobilienfonds m.b.H, Frankfurt am Main 94.0 01/01/2008 103 Banking — Sale to third party
Allianz PFI (UK) Ltd., London 100.0 08/17/2007 52 Corporate — Sale to third party
Allianz Lebensversicherungs-Aktiengesellschaft, Stuttgart during 2008 5.2 425 (352) (73) Allianz Global Investors of America L.P., Dover/Delaware 02/28/2008 2.5 122 (122) — Russian People‘s Insurance Society „ROSNO“, Moscow 10/27/2008 2.6 34 (30) (4) Allianz Mena Holding Bermuda, Beirut 08/25/2008 30.3 26 (16) (10)
Assurances Générales de France, Paris 1) during 2007 39.8 10,052 (3,419) (3,868) Allianz Lebensversicherungs-Aktiengesellschaft, Stuttgart during 2007 3.8 303 (211) (92) Allianz Taiwan Life Insurance Co. Ltd., Taipei 04/19/2007 49.6 40 (39) (1)
ot es alternative products. The United States and Germany as well as France, Italy and the Asia-Pacific region represent the primary asset management markets.
The Corporate segment activities include the management and support of Allianz Group’s businesses through its strategy, risk, corporate finance, treasury, financial control, communication, legal, human resources and technology functions. The Corporate segment also includes the Group’s alternative investment activities.
The Allianz Group uses operating profit to evaluate the performance of its business segments and the Group as a whole. The Allianz Group considers the presentation of operating profit to be useful and meaningful to investors because it enhances the understanding of the Allianz
The Allianz Group believes that trends in the underlying profitability of its business can be more clearly identified without the fluctuating effects of the realized capital gains and losses or impairments of investment securities, as these are largely dependent on market cycles or issuer-specific events over which the Allianz Group has little or no control, and can and do vary, sometimes materially, across periods.
Similarly, restructuring charges are excluded because the timing of the restructuring charges are largely within the control of the Allianz Group, and accordingly their exclusion provides additional insight into the operating trends of the underlying business. This differentiation is not made if the profit sources are shared with policyholders.
Corporate. The insurance segments of the Allianz Group are further analyzed by geographical areas or regions.
Europe. The banks offer a wide range of products for corporate and retail clients with its main focus on the latter.
The Asset Management segment operates as a global provider of institutional and retail asset management products and services to third-party investors and provides investment management services to the Allianz Group’s insurance operations. The products for retail and institutional customers include equity and fixed-income funds as well as
Loans and advances to banks and customers 17,648 20,712 90,619 91,188 Financial assets for unit-linked contracts — — 50,450 66,060
Non-current assets and assets of disposal groups classified as held for sale — 455 — 777
Financial liabilities carried at fair value through income 103 96 5,833 5,147 Liabilities to banks and customers 530 6,865 1,274 6,078
Income from fully consolidated private equity investments 3 — — 18 — — — — —
Claims and insurance benefits incurred (gross) (28,157) (28,131) (27,028) (20,146) (18,292) (18,520) — — — Claims and insurance benefits incurred (ceded) 2,171 2,646 2,356 473 655 895 — — — Claims and insurance benefits incurred (net) (25,986) (25,485) (24,672) (19,673) (17,637) (17,625) — — —
Income (loss) from continuing operations before income taxes and minority interests in earnings 5,936 7,261 7,560 673 3,102 2,700 (161) 45 76
Net income (loss) from continuing operations 4,335 5,174 4,746 327 1,991 1,643 (114) 55 69
Net income (loss) from discontinued operations, net of income taxes and minority interests in earnings — — — — — — (6,304) 322 849
Allianz Global Corporate and Specialty 1,981 1,800 1,545 59.7 67.9 62.5
As of and for the years 2008 2007 2006 2008 2007 2006 ended December 31, � mn � mn � mn % % %
As of and for the years 2008 2007 2006 2008 2007 2006 2008 2007 2006 2008 2007 ended December 31, � mn � mn � mn � mn � mn � mn % % % � mn � mn 1) Does not include � 420,695 mn assets of disposal groups classified as held for sale of Dresdner Bank as of December 31, 2008 . 2) Presentation not meaningful.
Operating income from financial assets and liabilities carried at fair value through income (net) (158) 144 106 (235) (945) (361) (5) 2 45 Operating realized gains/losses (net) 37 46 46 874 3,579 3,087 — — —
Income from fully consolidated private equity investments 3 — — 18 — — — — — Claims and insurance benefits incurred (net) (25,986) (25,485) (24,672) (19,673) (17,637) (17,625) — — — Change in reserves for insurance and investment contracts (net) 3 (339) (425) (5,122) (10,268) (10,525) — — — Interest expenses, excluding interest expenses from external debt (295) (402) (273) (283) (374) (280) (677) (558) (443)
Operating impairments of investments (net) (437) (67) (25) (5,747) (824) (390) — — —
Acquisition and administrative expenses (net), excluding acquisition-related expenses (10,356) (10,616) (10,590) (4,375) (4,588) (4,437) (552) (589) (550)
3) The total of these items equals income from financial assets and liabilities carried at fair value through income (net) in the segment income statement. 4) The total of these items equals realized gains/losses (net) in the segment income statement.
7) Represents acquisition and administrative expenses (net) divided by premiums earned (net). 8) Represents the total of acquisition and administrative expenses (net) and claims and insurance benefits incurred (net) divided by premiums earned (net).
Acquisition and administrative expenses (net) (4,375) (4,588) (4,437) Fee and commission expenses (253) (209) (223)
Realized gains/losses (net) (6) 18 15 Impairments of investments (net) (120) (3) — Amortization of intangible assets (2) — —
Income (loss) from continuing operations before income taxes and minority interests in earnings (161) 45 76
Minority interests in earnings (7) — (6) Net income (loss) from continuing operations (114) 55 69
Net income (loss) (6,418) 377 918 1) Represents interest and similar income less interest expenses.
Income from financial assets and liabilities carried at fair value through income (net) (77) (80) 31 29 38 37
Operating income from financial assets and liabilities carried at fair value through income (net) 1) (98) (26) (60) Fee and commission income 221 198 190
Interest expenses, excluding interest expenses from external debt 2) (635) (535) (507) Loan loss provision — (10) (5)
Loss before income taxes and minority interests in earnings (1,344) (354) (987)
Supplementary Information to the Consolidated Balance Sheets 7 Cash and cash equivalents
As of December 31, 2008 all of the loans to banks and customers designated at fair value through income related to the discontinued operations of Dresdner Bank and thus have been reclassified and presented as “Non-current assets and assets from disposal groups held for sale” in accordance with IFRS 5.
Equity securities 3,027 4,232 Loans to banks and customers — 1,764 1) Does not include financial assets carried at fair value through income of Dresdner Bank which were classified as held for sale. See Note 4.
2) Debt securities designated at fair value through income include � 0.2 bn of asset-backed securities of the Life/Health segment as of December 31, 2008.
Debt and equity securities included in financial assets held for trading
Equity and debt securities included in financial assets held for trading are primarily marketable and listed securities.
(2007: � 17,281 mn) from public sector issuers and � 492 mn
Available-for-sale investments 242,099 268,001 Held-to-maturity investments 4,934 4,659 Funds held by others under reinsurance contracts assumed 1,039 1,063 Investments in associates and joint ventures 4,524 5,471 Real estate held for investment 7,551 7,758 1) Does not include investments of Dresdner Bank which were classified as held for sale. See Note 4.
Government and government agency bonds 1) includes asset-backed-securities of the Property-Casualty segment of � 4.4 bn and of the Life/Health segment of � 14.5 bn as of December 31, 2008.
Based on a detailed analysis of the underlying securities and collaterals the Allianz Group does not consider these investments to be impaired at December 31, 2008.
Allianz Group’s investment in government bonds were mainly caused by interest rate increases between the purchase date of the individual securities and the balance sheet date. In 2008, interest rates decreased and thereby induced a positive effect on unrealized losses on government and government agency bonds by � 469 mn. Because the after these positive effects still existing unrealized loss is attributable to changes in interest rates in prior years and, to a lesser extent, to instances of insignificant deterioration of credit quality, the Allianz Group does not consider these investments to be impaired at December 31, 2008.
Total unrealized losses amounted to � 7,048 mn as of December 31, 2008. The Allianz Group holds a large variety of bonds issued by corporations mostly domiciled in OECD
countries. For the vast majority of the Allianz Group’s corporate bonds, issuers and/or issues are of “investment grade”. Therefore, the unrealized losses on Allianz Group’s investment in corporate debt securities were primarily caused by effects from credit spread widening in 2008. This effect is characterized by a general market trend and does not allow direct conclusions on the quality of these securities.
The amortized cost and estimated fair value of availablefor -sale debt securities and held-to-maturity debt securities as of December 31, 2008, by contractual term to maturity, are as follows: Amortized Cost
Due in 1 year or less 16,400 16,444 Due after 1 year and in less than 5 years 68,640 69,013 Due after 5 years and in less than 10 years 60,462 58,910 Due after 10 years 70,773 68,243
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 are shown within their final contractual maturity dates.
As of December 31, 2008, loans to associated enterprises and joint ventures and debt securities available-for-sale issued by associated enterprises and joint ventures held by the Allianz Group amounted to � 73 mn (2007: � 1,232 mn). As of December 31, 2008, the fair value of investments in associates and joint ventures was � 4,560 mn (2007: � 5,654 mn).
As of December 31, 2008 Up to 3 months > 3 months up to 1 year > 1 year up to 3 years > 3 years up to 5 years
Loans and advances to banks 12,258 7,180 13,907 9,164 35,682 78,191 Loans and advances to customers 2,706 3,598 4,603 4,689 21,987 37,583
Reclassifications into noncurrent assets and assets of disposal groups classified as held for sale (62) (1,382) — Foreign currency translation adjustments 93 (92) (71)
Reversals of impairments 54 6 80 Carrying amount as of December 31, 7,551 7,758 9,555
As of December 31, 2008, the fair value of real estate held for investment was � 11,995 mn (2007: � 12,031 mn). As of
Corporate customers 10,448 148,848 Private customers 23,309 55,761 Public authorities 3,826 8,647
As of December 31, 2008 all finance lease receivables included in loans to banks and customers related to the discontinued operations of Dresdner Bank and thus have been reclassified and presented as “Non-current assets and assets from disposal groups held for sale” in accordance with IFRS 5.
Short-term investments and certificates of deposit 2,957 6,665 9,622 3,188 7,128 10,316
Changes in the consolidated subsidiaries of the Allianz Group — — (1) — — — — — (1) Additions charged to the income statement 76 537 456 3 35 77 79 572 533
1) The unwinding-interest income for the year ended December 31, 2006 relates to loans in the non-homogeneous portfolio belonging to the Allianz Group in Germany that have been called in and for which the process of realising the collateral has started. For the year ended December 31, 2007 the unwinding interest income additionally includes loans in the homogeneous portfolio belonging to the Allianz Group in Germany.
Changes in the consolidated subsidiaries of the Allianz Group — — (1) — — — — — (1) Additions charged to the income statement 47 559 511 32 13 22 79 572 533
Reclassifications to non-current assets and assets of disposal groups classified as held for sale (517) — — (396) — — (913) — —
1) The category country risk allowance, disclosed separately in previous years financial statements, has been be due to simplicity and materiality reasons allocated to the categories of specific and general allowances going forward, using objective criteria. The amount of � 95 mn as of December 31, 2006 have been allocated completely to general allowance.
Notes to the Consolidated Financial Statements Allianz Group Annual Report 2008 11 Reinsurance assets
Group maintains a centralized program for natural catastrophe events that pools exposures from a number of subsidiaries by internal reinsurance agreements with Allianz
SE. Allianz SE limits exposures in this portfolio through external reinsurance. For other risks, the subsidiaries of the
Reinsurance involves credit risk and is subject to aggregate loss limits. Reinsurance does not legally discharge the Allianz
Although the reinsurer is liable to the Allianz Group to the extent of the reinsurance ceded, the Allianz Group remains primarily liable as the direct insurer on all risks it underwrites, including the portion that is reinsured. The Allianz
Allianz Group’s impaired and non-accrual loans: As of December 31, 2008 2007 � mn � mn
As of December 31, 2008, the Allianz Group had � — mn
Changes in the consolidated subsidiaries of the Allianz Group (13) 66 — Foreign currency translation adjustments (85) (72) (35)
Changes in the consolidated subsidiaries of the Allianz Group 18 — — Foreign currency translation adjustments 53 (555) (464)
Carrying amount as of December 31, 16,709 14,118 13,619 1) For the year ended December 31, 2008, consists of amortization of � (1,240) mn (2007: � (1,577) mn; 2006: � (1,628) mn) and of shadow accounting of � 1,360 mn (2007: � (18) mn; 2006: � 216 mn).
Changes in the consolidated subsidiaries of the Allianz Group 54 5 — Foreign currency translation adjustments 3 (6) (6)
Accumulated amortization as of December 31, 1,176 1,138 1,132 Cost as of December 31, 2,415 2,344 2,359 1) During the year ended December 31, 2008, includes interest accrued on unamortized PVFP of � 65 mn (2007: � 70 mn; 2006: � 62 mn).
As of December 31, 2008, the percentage of PVFP that is expected to be amortized in 2009 is 12.03 % (11.06 % in 2010,
Carrying amount as of December 31, 747 520 547 1) For the year ended December 31, 2008, consists of amortization of � 10 mn (2007: � (52) mn; 2006: � (39) mn) and of shadow accounting of � 98 mn (2007: � (2) mn; 2006: � 7 mn).
Real estate held for own use 3,122 3,708 1) Does not include other assets of Dresdner Bank which were classified as held for sale. See Note 4.
Other assets due within one year amounted to � 29,490 mn
(2007: � 30,229 mn), and those due after more than one year totaled � 4,514 mn (2007: � 7,796 mn).
Cost as of January 1, 4,847 6,153 5,894 Accumulated depreciation as of January 1, (1,139) (1,395) (1,503) Carrying amount as of January 1, 3,708 4,758 4,391
As of December 31, 2008, the fair value of real estate held for own use was � 4,497 mn (2007: � 5,070 mn). As of December 31, 2008, assets pledged as security and other restrictions on title were � 216 mn (2007: � 107 mn).
ot es 14 Non-current assets and assets and liabilities of disposal groups classified as held for sale
Non-current assets and assets of disposal groups classified as held for sale
Dresdner Bank Group 410,469 — Selecta AG 1,347 1,292 Other — 1
As described in detail in Note 4, with the announcement of the sale of Dresdner Bank Group as of August 31, 2008,
Brand names 24 737 1) Does not include intangible assets of Dresdner Bank which were classified as held for sale. See Note 4.
2) Includes primarily research and development costs, renewal rights and bancassurance agreements.
Cost as of January 1, 12,677 12,368 12,384 Accumulated impairments as of January 1, (224) (224) (224) Carrying amount as of January 1, 12,453 12,144 12,160
Accumulated impairments as of December 31, 224 224 224 Cost as of December 31, 11,445 12,677 12,368
AG, Frankfurt am Main, which was reclassified to “Noncurrent assets and assets of disposal groups classified as held for sale”.
Muntelier, which was reclassified to “Non-current assets and assets of disposal groups classified as held for sale”.
Changes in the consolidated subsidiaries of the Allianz Group (10) (9) 73
Reclassification into noncurrent assets and assets of disposal groups classified as held for sale (234) — — Carrying amount as of December 31,1) 1,116 1,165 1,078
Accumulated amortization as of December 31, 2,284 2,781 2,686 Cost as of December 31, 3,400 3,946 3,764 1) As of December 31, 2008, includes � 701 mn (2007: � 746 mn; 2006: � 683 mn;) for software developed inhouse and � 415 mn (2007: � 419 mn; 2006: � 395 mn) for software purchased from third parties.
Slovenská poist’ovna a.s., Bratislava, as they were reclassified to goodwill due to a change in the accounting treatment.
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.
The Allianz Group has allocated goodwill to nine cash generating units in the Property- Casualty segment, six cash generating units in the Life/ Health segment, one cash generating unit in the Banking segment, one cash generating unit in the Asset Management segment and one cash generating unit in the Corporate segment. In 2007 the goodwill of
Dresdner Bank and the brand name ‘Dresdner Bank’ were allocated to two cash generating units in the Banking segment and to one cash generating unit in the Asset Management segment. In 2008 the goodwill of Dresdner Bank and the brand name ‘Dresdner Bank’ are reclassified to Noncurrent assets and assets of disposal groups classified as held for sale. The goodwill for Oldenburgische Landesbank
Allianz Group utilizes the capitalized earnings method to derive the value in use for all cash generating units in the
The terminal values are largely based on the expected profits of the final year of the detailed planning period. Where necessary, the planned profits are adjusted so that long term sustainable earnings are reflected. The financing of the assumed eternal growth in the terminal values is accounted for by appropriate profit retention.
The discount rate is based on the capital asset pricing model and appropriate eternal growth rates. The assumptions, including the risk free interest rate, market risk premium, segment beta and leverage ratio, used to calculate the discount rates are in general consistent with the parameters used in the Allianz Group’s planning and controlling process, specifically those utilized in the calculation of
The discount rates and eternal growth rates for the significant cash generating units used for the allocation of the fair values are as follows: Cash generating unit Discount rate Eternal growth rate
Sensitivity analysis with regards to discount rates and/or key value drivers of the business plans were performed.
Changes of capitalized earnings values of Property-Casualty cash generating units due to changes in applied long term sustainable combined ratios and changes of capitalized earnings values of the Asset Management cash generating units due to changes in assumptions regarding cost income ratios were analyzed.
Casualty Asia & Middle East and Banking respective capitalized earnings value sensitivities still exceeded respective carrying values.
Market Consistent Embedded Value approach utilized is based on the Allianz Group’s Embedded Value guidelines.
Value Calculation. Taiwan is included in the cash generating unit Asia & Middle East, US is included in the cash generating unit Anglo Broker Market & Global Lines.
Sensitivity analysis with regard to considered new business values are performed. For all Life cash generating units excluding Asia & Middle East, respective Appraisal Value sensitivities still exceeded respective carrying values.
The carrying amounts of goodwill and brand names allocated to Allianz Group’s cash generating units as of
December 31, 2008 and 2007 are as follows: As of December 31, 2008 2007
Anglo, Broker & Global Lines 388 — 410 — Specialty Lines I 8 — 7 — Specialty Lines II 28 — 27 —
Germany Speaking Countries 554 — 554 — Health Germany 325 — 325 —
Europe II 538 — 538 — Asia & Middle East 320 — 320 — Anglo, Broker & Global Lines 435 — 425 —
As of December 31, 2008 all of the financial liabilities designated at fair value through income related to the discontinued operations of Dresdner Bank and thus have been reclassified and presented as “Liabilities of disposal groups classified as held for sale” in accordance with IFRS 5.
Property-Casualty 12,984 13,163 Life/Health 2,258 1,858 19 Reserves for loss and loss adjustment expenses
Changes in the reserves for loss and loss adjustment expenses for the Property-Casualty segment
Foreign currency translation adjustments and other changes1) (497) 48 (449) (2,022) 666 (1,356) (1,491) 497 (994)
Changes in the consolidated subsidiaries of the Allianz Group 127 (39) 88 125 (23) 102 — — —
1) Includes effects of foreign currency translation adjustments for loss and loss adjustment expenses for prior years claims of gross � (313) mn (2007: � (1,690) mn; 2006: � (1,141) mn) and net of � (284) mn (2007: � (1,052) mn; 2006: � (962) mn).
Prior years’ loss and loss adjustment expenses incurred reflect the changes in estimation charged or credited to the consolidated income statement in each year with respect to the reserves for loss and loss adjustment expenses established as of the beginning of that year. During the year ended
Casualty reserves for loss and loss adjustment expenses reflected discounts of � 1,139 mn and � 1,100 mn, respectively.
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.
The following table shows, by line of business, the carrying amounts of reserves for loss and loss adjustment expenses that have been discounted, and the interest rates used for discounting: Discounted reserves for loss and loss adjustment expenses
1) Gross/net surplus represents the cumulative surplus from re-estimating the reserves for loss and loss adjustment expenses for prior years claims and includes foreign currency translation adjustments of gross � 313 mn (2007: � 1,690 mn) and net � 284 mn (2007: � 1,052 mn). This leads to an effective run off result excluding effects of foreign currency translation of gross � 2,241 mn (2007: � 1,708 mn) and net � 1,443 mn (2007: � 1,360 mn) which can be found in the table for changes in the reserves for loss and loss adjustment expenses within this footnote. Please note that the 2007 numbers refer to the surplus presented in the consolidated financial statements 2007 and not the cumulative surplus of the calendar year 2007 presented in the table above.
Foreign currency translation adjustments 390 (929) (104) (755) Changes in the consolidated subsidiaries of the Allianz Group — 266 — 10 Changes recorded in consolidated income statements 1,187 828 2,445 954 Dividends allocated to policyholders 1,153 244 1,278 207 Additions and disposals (160) (34) — (2)
1) For the year ended December 31, 2008, consists of shadow accounting of � (135) mn. 2) Mainly relating to a reclassification from reserves for premium refunds and other insurances reserves.
Changes in aggregate policy reserves for universal life-type insurance contracts and non unit-linked investment contracts for the years ended December 31, 2008 and 2007 were as follows: Universal life-type insurance contracts
As of December 31, � mn � mn � mn � mn � mn � mn � mn
Other Western and Southern Europe 318 1,865 151 — 2,016 3,819 5,835
Allianz Group’s unit-linked contracts in France and Italy do not incorporate significant insurance risk.
United States 2.35 2.70 South Korea 5.43 5.29 1) Guarantees only on 10.4 % of reserves in 2008 and 5.3 % in 2007.
Notes to the Consolidated Financial Statements Allianz Group Annual Report 2008 21 Financial liabilities for unit-linked contracts
Dresdner Bank was classified as a disposal group held for sale and discontinued operations. Following this classification, contractual obligations of Dresdner Bank are presented as part of the disposal group held for sale and discontinued operations. The following table includes only continuing operations.
The table includes only liabilities that represent fixed and determinable amounts. The table excludes interest on floating rate long-term debt obligations and interest on money market securities, as the contractual interest rate on floating rate interest is not fixed and determinable. The amount and timing of interest on money market securities is not fixed and determinable since these instruments have a daily maturity. For further information, see Notes 23 and 24 to the consolidated financial statements.
As of December 31, 2008, the income tax obligations amounted to � 1,446 mn. Thereof � 1,106 mn the Allianz Group expects to pay within the twelve months after the balance sheet date. For the remaining amount of � 340 mn an estimate of the timing of cash outflows is not reasonably possible. The income tax obligations are not included in the table below.
Less than 1 year 1–3 years 3–5 years More than 5 years
Interest on long-term debt obligations 2) 21 9 129 285 444
The following table presents a reconciliation of future policy benefits to the total balance sheet positions, which include reserves for insurance and investment contracts and financial liabilities for unit-linked contracts, as presented in the consolidated balance sheet: As of December 31, 2008 � mn
Thereof: Reserves for insurance and investment contracts 296,557 Financial liabilities for unit-linked contracts 50,450 Market value liability options 5,163
Derivative financial instruments used for hedging that meet the criteria for hedge accounting and firm commitments 208 2,210
Reconciling items related to the effect of discounting and differences between locked-in and best estimate assumptions occur because future policy benefits are presented on an undiscounted basis, while reserves for insurance and investment contracts in the consolidated balance sheet reflect the time value of money. Furthermore, future policy benefits are based on current best estimate assumptions such as mortality, morbidity, interest rates, policyholder participation in profits and future lapse rates. For certain contracts (SFAS 60 and SFAS 97), current best estimate assumptions may differ from the locked-in estimates required to be used to establish the reserves for insurance and investment contracts in the consolidated balance sheet, which also include provisions for adverse deviations as required by the Allianz Group’s established accounting policy.
Reconciling items related to expected future premiums and expenses occur because future policy benefits take into account best estimates of future premiums expected to be received and future expenditures expected to be incurred.
Future policy benefits implicitly include embedded derivatives or market value liability options (“MVLO”) of our equity indexed annuity business that are accounted for as derivatives and are presented within financial liabilities carried at fair value through income in our consolidated balance sheet.
Current interest rate 4.05 % — — — — — — —
Contractual interest rate 4.47 % — — — — — — —
Fixed rate — — — — — — — 16,289 Contractual interest rate — — — — — — — — Floating rate — — — — — — — 9 Current interest rate — — — — — — — — Subtotal — — — — — — — 16,298
Total all other subsidiaries — 25 — — — 3 28 3 1) Does not include certificated liabilities of Dresdner Bank which were classified as held for sale. See Note 4. 2) Except for the interest rates. The interest rates represent the weighted average. 3) Includes senior bonds and exchangeable bonds issued by Allianz Finance B.V. and Allianz Finance II B.V., guaranteed by Allianz SE and money market securities issued by Allianz
� mn 2) � mn 2) � mn 2) � mn 2) � mn 2) � mn 2) � mn � mn
Contractual interest rate — — — — — 7.28 % — —
Floating rate — — — — — — — 1,007 Current interest rate — — — — — — — —
Fixed rate — — — — — — — 2,429 Contractual interest rate — — — — — — — —
Fixed rate — — — — — — — 1,686 Contractual interest rate — — — — — — — —
2) Except for interest rates. Interest rates represent the weighted average. 3) Includes subordinated bonds issued by Allianz Finance II B.V. and guaranteed by Allianz SE.
Issued capital 1,160 1,152 Capital reserve 27,409 27,169 Revenue reserves 7,257 12,790 Treasury shares (147) (172) Foreign currency translation adjustments (4,006) (3,656) Unrealized gains and losses (net)1) 2,011 10,470
Minority interests 3,564 3,628 1) As of December 31, 2008 includes � 203 mn related to cash flow hedges (2007: � 175 mn).
(158,806,893 shares) of authorized unissued capital (Authorized Capital 2006/I) which can be issued at any time up to
(3,146,991 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 preemptive rights of shareholders if the shares are issued to employees of the Allianz Group. Further, as of December 31, 2008, Allianz SE had an unissued conditional capital in the amount of � 250,000,000 (97,656,250 shares), authorized in 2006. In February 2008 the remaining 2.2 mn warrants were exercised which the Allianz Group had issued in February 2005 as part of the „All-in-One” transaction. In conjunction with the exercise, 2.2 mn new shares of Allianz SE resulting from conditional capital were issued leading to proceeds from this increased equity of � 202 mn. The new shares are entitled to dividend as of the financial year 2008.
In November 2008, 700,000 (2007:1,025,643) shares were issued at a price of � 64.30 (2007: � 154.07 ) per share, enabling employees of Allianz Group subsidiaries in
(2007:143,663) shares were warehoused and booked as treasury shares for further subscriptions by employees in the context of the employee share purchase plan in 2009.
As a result, issued capital increased by � 2 mn and capital reserve increased by � 43 mn.
The increase in share capital due to the minority buyout of
On October 13, 2006, Allianz AG and RAS merged resulting in the issuance of 25,123,259 shares of Allianz SE to the shareholders of RAS. As a result, share capital increased by
� 64 mn and capital reserve increased by � 3,589 mn.
All shares issued during the years ended December 31, 2008, 2007 and 2006 are qualifying shares from the beginning of the year of issue.
For the year ended December 31, 2008, the Board of Management will propose to shareholders at the Annual General
Allianz SE to acquire its own shares for other purposes pursuant to clause 71(1) no. 8 of the German Stock Corporation Law (“Aktiengesetz”). During the year ended December 31, 2008 the authorization was used to acquire 39,300 (2007: 143,663) shares of Allianz SE.
December 31, 2008, the gains arising from treasury share transactions and in consideration of the holding, were
On January 1, 2005, the Financial Conglomerates Directive, a supplementary European Union (“EU”) directive, became effective in Germany. Under this directive, a financial conglomerate is defined as any financial parent holding company that, together with its subsidiaries, has significant cross-border and cross-sector activities. The Allianz Group is a financial conglomerate within the scope of the directive and the related German law. The law requires that the financial conglomerate calculates the capital needed to meet the respective solvency requirements on a consolidated basis.
At December 31, 2008, based on the current status of discussion, our eligible capital for the solvency margin, required for our insurance segments and our banking and asset management business, was � 39.5 bn (2007: � 46.5 bn) including off-balance sheet reserves1), surpassing the minimum legally stipulated level by � 9.9 bn (2007: � 17.6 bn).
at December 31, 2008 (2007: 161 %). In 2008, all Allianz Group companies also have met their local solvency requirements.
Starting with the third quarter 2008, unrealized gains and losses on bonds are excluded from the calculation of our eligible capital. This new methodology, which better reflects economic reality, added around 6 (2007: 4) percentage points to Allianz Group’s Solvency Ratio.
also uses an internal risk capital model to determine how much capital is required to absorb any unexpected volatility in results of operations.
Allianz SE is not subject to legal restrictions on the amount of dividends it can pay to its shareholders, except the legal reserve in the appropriated retained earnings, which is required according to clause 150 (1) of the Aktiengesetz.
Dividends from availablefor -sale investments 1,864 2,282 2,086 Interest from availablefor -sale investments 10,164 9,164 8,741 Share of earnings from investments in associates and joint ventures (37) 284 223 Rent from real estate held for investment 703 780 805 Interest from loans to banks and customers 5,928 5,670 5,177 26 Premiums earned (net) – continued
� mn � mn � mn � mn � mn � mn � mn
Income (expenses) from financial assets and liabilities held for trading (51) (1,337) 2 — 44 (37) (1,379) Income from financial assets designated at fair value through income 150 345 — 64 7 (8) 558 Income from financial liabilities designated at fair value through income 3 11 — — — (1) 13 Income (expenses) from financial liabilities for puttable equity instruments (net) (17) 41 — (33) — — (9)
Income (expenses) from financial assets and liabilities held for trading 83 (808) 45 7 (274) 52 (895) Income (expenses) from financial assets designated at fair value through income 121 742 — (105) 5 — 763 Expenses from financial liabilities designated at fair value through income (1) (2) — — — 1 (2) Income (expenses) from financial liabilities for puttable equity instruments (net) (14) (293) — 136 (65) — (236)
(2007: expenses of � 756 mn; 2006: expenses of � 513 mn)
(2007: income of � 26 mn; 2006: income of � 29 mn).
are related to financial derivative instruments for which hedge accounting is not applied. This includes income from financial derivative instruments embedded in exchangeable bonds of � 133 mn (2007: expenses of � 222 mn; 2006: expenses of � 570 mn), expenses from derivative financial instruments of � 7 mn (2007: income of � 164 mn; 2006: income of � 290 mn) which partially hedge the exchangeable bonds, however which do not qualify for hedge accounting, and expenses from other derivative financial instruments of
� 122 mn) from the hedges of share based compensation plans granted by restricted stock units.
2) During the year ended December 31, 2008, includes realized losses from the disposal of subsidiaries of � 1 mn (2007: � 83 mn; 2006: � 2 mn).
Fees from credit and assistance business 769 (2) 767 703 (2) 701 681 — 681
Income from non-current assets and disposal groups held for sale — 4 1
Sales and service revenues 1,727 749 — 40 2,516 Other operating revenues 19 — — 1 20
General and administrative expenses (40) — (264) — (304) Other operating expenses (93) — — — (93)
Claims and insurance benefits paid (27,656) (20,057) 13 (47,700) Change in loss and loss adjustment expenses (501) (89) 3 (587)
Claims and insurance benefits paid 2,521 490 (13) 2,998 Change in loss and loss adjustment expenses (350) (17) (3) (370)
Claims and insurance benefits paid (27,955) (18,258) 9 (46,204) Change in loss and loss adjustment expenses (176) (34) 5 (205)
Claims and insurance benefits paid (27,132) (18,485) 27 (45,590) Change in loss and loss adjustment expenses 104 (35) (2) 67
Claims and insurance benefits paid 3,130 777 (27) 3,880 Change in loss and loss adjustment expenses (774) 118 2 (654)
Aggregate policy reserves 16 92 — 108 Other insurance reserves 2 5 — 7 Expenses for premium refunds 15 18 — 33
Aggregate policy reserves (217) (4,776) — (4,993) Other insurance reserves 26 (255) — (229) Expenses for premium refunds (148) (5,237) (78) (5,463)
Other insurance reserves 31 (78) — (47) Expenses for premium refunds (211) (6,136) (426) (6,773)
Other insurance reserves 2 11 — 13 Expenses for premium refunds 15 23 — 38
Other insurance reserves 33 (67) — (34) Expenses for premium refunds (196) (6,113) (426) (6,735)
Notes to the Consolidated Financial Statements Allianz Group Annual Report 2008 35 Interest expenses
Commissions and profit received on reinsurance business ceded 643 (5) 638 671 (2) 669 717 (1) 716
Amortization of deferred acquisition costs (4,089) — (4,089) (4,384) — (4,384) (3,843) — (3,843)
Amortization of deferred acquisition costs (1,392) — (1,392) (1,643) — (1,643) (1,772) — (1,772)
Fees from credit and assistance business (606) — (606) (615) 1 (614) (487) 1 (486)
The following table shows the reconciliation from the expected income tax expense of the Allianz Group to the effectively recognized tax expense. The Allianz Group’s reconciliation is a summary of the individual companyrelated reconciliations, which are based on the respective country-specific tax rates after taking into consideration consolidation effects with impact on the group result. The expected tax rate for domestic Allianz Group companies applied in the reconciliation includes corporate tax, trade tax and the solidarity surcharge and amounts to 31.00 %
Expected income tax rate in % 29.2 % 29.6 % 30.4 % Expected income tax expense 1,599 3,129 2,903
Municipal trade tax and similar taxes 166 405 151 Net tax exempt income (469) (592) (773) Effects of tax losses 28 (17) (29) Effects of German tax law changes — (291) (521)
Net deferred tax assets/(liabilities) 163 798 1) Compared to the presentation in prior years notes to the financial statements, the presentation of the individual positions in the above table has been changed in order to better refer to the individual underlying balance sheet positions.
Group companies, for which no deferred tax assets are recognized because it is not probable that they reverse in the foreseeable future amount to � 219 mn (2007: � 588 mn).
Tax losses carried forward are scheduled according to their expiry periods as follows: � mn >10 years 134 Unlimited 8,244 Total 8,856
Group comply with the relevant supervisory regulations and the Allianz Group’s own internal guidelines. The Allianz
Group’s investment and monitoring rules exceed regulations imposed by supervisory authorities. In addition to local management supervision, comprehensive financial and risk management systems are in force across the Allianz Group.
Credit risks related to counterparties are assessed by calculating gross replacement values. Market risks are monitored by means of up-to-date value-at-risk calculations and stress tests and limited by specific stop-loss limits.
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. To reduce the counterparty risk from trading activities, so-called crossproduct netting master agreements with the business partners are established. In the case of a defaulting counterparty, netting makes it possible to offset claims and liabilities not yet due.
Exchange traded 1) As of December 31, 2008, includes embedded derivatives related to equity indexed annuities with negative fair values of � 5,163 mn (2007: � 4,327 mn).
Warrants — — — — — — — — — Other — — — — — — 39 — — Exchange traded
The Allianz Group principally uses fair value hedging. Important hedging instruments are equity forward contracts, interest rate swaps, interest rate forwards, currency swaps and currency forwards. Hedging instruments may be implemented for individual transactions (micro hedge) or for a portfolio of similar assets or liabilities (portfolio hedge).
The Allianz Group uses fair value hedges to hedge its equity portfolio against equity market risk. The financial instruments used in the related fair value hedges had a total fair value of � 902 mn (2007: � (2,050) mn) as of December 31,
Additionally the Allianz Group uses fair value hedges to protect against the change in the fair value of financial assets due to movements in interest rates or exchange rates. The derivative financial instruments used for the related fair value hedges of the Allianz Group had a total negative fair value as of December 31, 2008 of � 39 mn
For the year ended December 31, 2008, the Allianz Group recognized for fair value hedges a net gain of � 2,115 mn
(2007: net gain of � 494 mn; 2006: net gain of � 698 mn) on the hedged item attributable to the hedged risk.
During the year ended December 31, 2008, cash flow hedges were used to hedge variable cash flows exposed to interest rate and exchange rate fluctuations. As of December 31, 2008, the derivative instruments utilized had a positive fair value of � 31 mn (2007: negative fair value of � 2 mn). Other reserves in shareholders’ equity increased by � 27 mn
Financial liabilities held for trading 6,244 6,244 124,083 124,083 Financial liabilities designated at fair value through income — — 1,970 1,970 Liabilities to banks and customers 18,451 18,494 336,494 335,394 Investment contracts with policyholders 101,898 101,898 90,404 90,404 Financial liabilities for unit-linked contracts 50,450 50,450 66,060 66,060 Derivative financial instruments and firm commitments included in other liabilities 208 208 2,210 2,210 Financial liabilities for puttable equity instruments 2,718 2,718 4,162 4,162 Certificated liabilities, participation certificates and subordinated liabilities 18,890 17,643 56,894 57,961
In the following the determination of the fair value for financial instruments, that are not carried at fair value in the consolidated balance sheet, but for which a fair value has to be disclosed under IFRS 7, is described: Cash and cash equivalents
Cash and cash equivalents comprises cash and demand deposits with banks together with short-term highly liquid investments that are readily convertible to known amounts of cash and subject to insignificant risk of change in value.
The following table presents the fair value hierarchy for financial instruments carried at fair value in the consolidated balance sheet as of December 31, 2008.
Financial assets for unit-linked contracts 47,171 3,279 — 50,450 66,060 Derivative financial instruments used for hedging that meet the criteria for hedge accounting and firm commitments 365 736 — 1,101 344
Financial liabilities held for trading 63 1,018 5,163 6,244 124,083 Financial liabilities designated at fair value through income — — — — 1,970
For short-term liabilities the carrying amount represents a reasonable estimate of the fair value. For long-term instruments the fair value is determined by discounting future cash flows. The fair value determination reflects current market interest rates and the credit rating of the Allianz
The fair value of certificated liabilities, participation certificates and subordinated liabilities is determined using quoted market prices, if available. If quoted prices are not available, for short-term liabilities the carrying amount represents a reasonable estimate of the fair value. For long-term instruments the fair value is determined by discounting the remaining contractual future cash flows at a discount-rate at which Allianz Group could issue debt with similar remaining maturity. The fair value determination reflects current market interest rates and the credit rating of the Allianz
The fair value of a financial instrument is determined using quoted prices for an identical instrument in active markets
Available-for-sale investments assigned to Level II included corporate bonds of � 23 bn and ABS-related instruments of � 16 bn as of December 31, 2008 for which valuation techniques with observable market inputs are used.
Due to the sale of Dresdner Bank to Commerzbank on January 12, 2009 the table above does not include certain CDOs that Allianz Group has repurchased from Dresdner Bank after the completion of the sale to Commerzbank. The amount of these assets as of December 31, 2008 was � 1.1 bn and is presented in non-current assets and assets from disposal groups classified as held for sale.
Allianz Group companies maintain various types of ordinary course business relations (particularly in the area of insurance, banking and asset management) with related enterprises. In particular, the business relations with associated companies, which are active in the insurance business, take on various forms and may also include special service, computing, reinsurance, costsharing and asset management agreements, whose terms are deemed appropriate by management. Similar relationships may exist with pension funds, foundations, joint ventures and companies, which provide services to Allianz Group companies.
On November 5, 2001, a lawsuit, Silverstein v. Swiss Re International Business Insurance Company Ltd., was filed in the
York against certain insurers and reinsurers, including a subsidiary of Allianz SE which is now named Allianz Global
Allianz Group on the basis of one occurrence. On October 18, 2006, the United States Court of Appeals for the Second
The settlement amount is within our set case reserve and secured by letters of credit from SCOR, which is a reinsurer of AGR US for the relevant insurance policy. On May 24, 2007,
Two nearly identical class action civil complaints were filed against Pacific Investment Management Company LLC
L.P., in August 2005, in the Northern District of Illinois Eastern Division. The complaints alleged that the plaintiffs each purchased and sold a 10-year Treasury note futures contract and suffered damages from an alleged shortage when
Treasury notes for its client accounts. The two actions have been consolidated into one single action and the two separate complaints have been replaced by a consolidated complaint, which claims that PIMCO violated the federal Commodity Exchange Act by engaging in market manipulation.
In addition to PIMCO as a named defendant, PIMCO Funds has been added as a defendant to the consolidated action.
PIMCO Funds for leave to appeal the class certification ruling. That appeal is pending. Management currently believes the complaint is without merit but the outcome of this action cannot be predicted at this time.
The U.S. Department of Justice has alleged False Claims Act violations related to Fireman’s Fund Insurance Company’s
(“FFIC”) 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
Three members of the Fireman’s Fund group of companies in the United States, all subsidiaries of Allianz SE, are among the roughly 135 defendants named in a class action filed on August 1, 2005 in the United States District Court of
Life”) has been named as a defendant in various putative class action lawsuits, mainly in Minnesota and California, in connection with the marketing and sale of deferred annuity products. One lawsuit in Minnesota and three in California are currently pending as certified class actions. The complaints allege that the defendant engaged in, among other practices, deceptive trade practices and misleading advertising in connection with the sale of such products.
In accordance with Section 5 (10) of the Statutes of the Joint
Fund for Securing Customer Deposits (“Einlagensicherungsfonds ”), Allianz SE has undertaken to indemnify the Federal
Banken e.V.”) for any losses it may incur by reason of support-
The Allianz Group engages in various lending commitments to meet the financing needs of its customers. The following table 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, the amounts shown may not be representative of actual liquidity requirements for such commitments.
Stand-by facilities 29 1,635 Guarantee credits 3 1,604 Discount credits — 64 Mortgage loans/public-sector loans 85 527
The Allianz Group has commitments for mortgage loans and to buy multi-tranche loans of � 5,102 mn (2007: � 4,489 mn)
(2007: � 2,045 mn) as of December 31, 2008. As of December 31, 2008, commitments outstanding to purchase real estate used by third-parties and owned by the Allianz Group used for its own activities amounted to � 650 mn (2007: � 219 mn).
Group has other commitments of � 224 mn (2007: � 229 mn)
– SichLVFinV”). As of December 31, 2008, the future liabilities of Allianz Lebensversicherungs-Aktiengesellschaft and its subsidiaries to the insurance guarantee scheme amount to annual contributions of � 24 mn (2007: � 36 mn) and an obligation for special payments of � 95 mn (2007: � 85 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 Lebensversicherungs-Aktiengesellschaft and some of its subsidiaries are obligated to provide additional funds either to the mandatory insurance guarantee scheme or to Protektor, in the event that the funds provided to the mandatory insurance guarantee scheme are not sufficient to handle an insolvency case. Such obligation amounts to a maximum of 1 % of the sum of the net underwriting reserve with deduction of payments already provided to the insurance guarantee scheme. As of December 31, 2008, and under inclusion of the contributions to the ing measures taken in favour of Oldenburgische Landesbank AG (OLB), Münsterländische Bank Thie & Co.KG and
With the sale of Dresdner Bank becoming effective on January 12, 2009, Allianz terminated the indemnification undertaking issued in 2001 in favour of the Federal Association of German
Banks with respect to Dresdner Bank. As a result, the indemnification is only relevant for supporting measures that are based on facts that were already existing at the time of the termination.
A summary of guarantees issued by the Allianz Group by maturity and related collateral-held is as follows: Letters of credit and other financial guarantees
The customers of the letters of credit and of the indemnification contracts have the following external credit ranking: � mn
AAA — AA 4 A 444 BBB 6 BB — B and lower — without rating 597 Total 1,051
Allianz Group to third-parties is treated as a loan to the customer, and is, therefore, principally subject to collateral pledged by the customer as specified in the agreement.
The Allianz Group’s banking operations in France, in the ordinary course of business, issue market value and performance -at-maturity guarantees in connection with mutual funds offered by the Allianz Group’s asset management operations in France. The levels of market value and performance -at-maturity guarantees, as well as the maturity dates, differ based on the underlying agreements. In most cases, the same mutual fund offers both a market value guarantee and a performance-at-maturity guarantee. Additionally, the performance-at-maturity guarantees are generally linked to the performance of an equity index or group of equity indexes. As of December 31, 2008, the maximum potential amount of future payments of the market value and performance-atmaturity guarantees was � 1,356 mn (2007: � 1,355 mn), which represents the total value guaranteed under the respective agreements. The fair value of the mutual funds related to the market guarantees as of December 31, 2008, was approximately � 1,260 mn (2007: � 1,316 mn). Such funds generally have a duration of five to eight years.
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 December 31, 2008, the Allianz Group has received collateral, consisting of fixed income and equity securities, with a fair value of � 1,672 mn (2007: � 212,894 mn), which the
Allianz Group has the right to sell or repledge. As of December 31, 2008, � — mn (2007: � 156,096 mn) related to collateral that the Allianz Group has received and sold or repledged.
� — mn. These financial assets will be systematically sold in the market.
Notes to the Consolidated Financial Statements Allianz Group Annual Report 2008 47 Pensions and similar obligations
Retirement benefits in the Allianz Group are either in the form of defined benefit or defined contribution plans.
Allianz Group. In Germany, these are primarily defined benefit plans in nature.
Amounts recognized in the Allianz Group’s consolidated balance sheets for defined benefit plans are as follows: As of December 31, 2008 2007 � mn � mn
Service cost 321 437 Interest cost 672 785 Plan participants’ contributions 65 67
Changes in the consolidated subsidiaries of the Allianz Group (36) (68)
Fair value of plan assets as of December 31, 7,964 10,931
3) In addition, the Allianz Group paid � 249 mn (2007: � 370 mn) directly to plan participants.
The net periodic benefit cost related to defined benefit plans of the Allianz Group consists of the following components: � mn � mn � mn
Expected return on plan assets (448) (432) (407) Amortization of prior service cost 38 — (33) Amortization of net actuarial loss 6 62 84 (Income)/expenses of plan curtailments or settlements — (51) (13) Net periodic benefit cost 1) 589 578 619 1) 2007 and 2006 adjusted due to the reclassification of net periodic benefit costs of Dresdner Bank Group to net income from discontinued operations
� 246 mn and � 467 mn during the years ended December 31,
Projected benefit obligation 12,247 16,142 17,280 Fair value of plan assets 7,964 10,931 10,888
The calculations are based on current actuarially calculated mortality estimates. Projected turnover depending on age and length of service have also been used, as well as internal
Discount rate 5.8 5.5 Rate of compensation increase 2.5 2.6 Rate of pension increase 1.9 1.8
For the year ended December 31, 2008, the weighted expected long-term return on plan assets was derived from the following target allocation and expected long-term rate of return for each asset category: Target allocation
Equity securities 28.7 7.6 Debt securities 66.4 4.6 Real estate 4.2 4.6
Equity securities 16.2 28.1 Debt securities 78.4 65.1 Real estate 3.6 2.8
The bulk of the plan assets are held by the Allianz Versorgungskasse VVaG, Munich. This entity insures effectively all employees of the German insurance operations and is not part of the Allianz Group.
Group expects to contribute � 226 mn to its defined benefit plans and pay � 240 mn directly to plan participants of its defined benefit plans.
During the year ended December 31, 2008, the Allianz Group recognized expense for defined contribution plans of
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 SAR 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. The SARs vest after two years and expire after seven years. Upon vesting, the SARs may be exercised by the plan participant if the following market conditions are attained: – during their contractual term, the market price of
In addition, upon death of plan participants, a change of control of the Allianz Group or notice for operational reason the SARs vest immediately and will be exercised by the company provided the above market conditions have been attained.
Allianz Group. Therefore, the Allianz Group accrues the fair value of the SARs as compensation expense over the vesting period. Upon vesting, any changes in the fair value of the unexercised SARs are recognized as compensation expense.
In addition, upon death of plan participants, a change of control of the Allianz Group or notice for operational reason the RSUs vest immediately and will be exercised by the company.
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
upon death, disability or termination of the participant prior to vesting. As of January 1, 2005, AGI L.P. has the right to repurchase, and the participants have the right to cause
AGI L.P. to repurchase, a portion of the vested Class B equity units each year. The call or put right is exercisable for the first time 6 months after the initial vesting of each grant. On the repurchase date, the repurchase price will be based upon the determined value of the Class B equity units being repurchased. As the Class B equity units are puttable by the plan participants, the Class B Plan is accounted for as a cash settled plan.
Group accrues the fair value of the RSUs as compensation expense over the vesting period. During the year ended December 31, 2008, the Allianz Group recognized compensation expense related to the nonvested RSUs of � (19) mn (2007: As of December 31, 2008, the Allianz Group recorded a liability, in other liabilities, of � 87 mn (2007: � 209 mn) for the nonvested RSUs.
equity units that are outstanding is recorded as a liability in other liabilities. As of December 31, 2008, the Allianz Group recorded a liability for the Class B equity units of � 1,151 mn
Allianz Global Investors (AGI) has launched a new management share-based payment incentive plan for certain senior level executives of PIMCO LLC and certain of its affiliates.
Participants in the plan are granted options to acquire a new class of equity instruments (M-Units), which vest in one-third increments on approximately the third, fourth and fifth anniversary of the option valuation date. Upon vesting, options will be automatically exercised in a cashless transaction. Participants may elect to defer the receipt of M-Units through the M-Unit Deferral Plan. 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 quarterly cash compensation equal to and in lieu of quarterly dividend payments.
The fair value of the underlying M-Options was measured using the Black-Scholes option-pricing model. Volatility was derived in part by considering the average historical and implied volatility of a select group of peers. The expected life was calculated based upon treating the three vesting tranches
(one third in years 3, 4, and 5) as three separate awards.
The following table provides the assumptions used in calculating the fair value of the M-Options at grant date: Weighted average fair value of options granted � 577.44 Assumptions: Expected term (years) 3.85 Expected volatility 32.5 % Expected dividends 11.1 % Risk free rate of return 2.7 %
A summary of the number and weighted average exercise price of the M-Options outstanding and exercisable are as follows: Number of options
The aggregate intrinsic value of share options outstanding was � (1) mn for the year ended December 31, 2008.
The M-Units outstanding as of December 31, 2008 have an exercise price between of � 6,190.13 and of � 6,230.86 and a weighted average remaining contractual life of 4.46 years.
The shares settled by delivery of PIMCO LLC shares are accounted for as equity settled plans by PIMCO LLC. Therefore,
The AGF Group has awarded share options on AGF shares to eligible AGF Group executives and managers 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.
Allianz SE, AGF and the beneficiaries of the AGF share option plans 2003-2006 (AGF employees), Allianz has the right to purchase all AGF shares issued through the exercise of these AGF share option plans after the put period (where the beneficiaries have the right to sell to Allianz). The price payable by Allianz per AGF share is a cash consideration equal to the Allianz 20-day-average share price prior to the date the right to buy or to sell is exercised, multiplied by a
Originally, the AGF share options plans were granted independently from the remuneration plans of the Allianz
June 30, 2007, the parameters for the valuation of the AGF
During the year ended December 31, 2008, the Allianz Group recognized total compensation expenses related to the modified AGF share option plans of � (33) mn (2007: � 15 mn).
As of December 31, 2008, the Allianz Group recorded a liability for the AGF plans of � 11 mn (2007: � 46 mn).
The share options had a vesting period of 18 months to 2 years and a term of 6.5 to 7 years.
higher than the average share price in January of the grant year (for share options granted during the year ended
– the performance of the RAS share in the year of grant exceeds the Milan Insurance Index in the same year.
RAS, the RAS share option plan was modified. The outstanding share options, which were granted in 2005, on the date of the merger were replaced with Allianz SE share options on the basis of 1 Allianz SE option for every 5.501 RAS share options outstanding. The outstanding RAS Group options of 953,000 were replaced by 173,241 Allianz SE options. The
Allianz SE share options have the same vesting period of 2 years; however, the market conditions noted above were replaced with a performance condition, which was already achieved on the date of the modification.
During the year ended December 31, 2006, the Allianz Group recorded compensation expense of � 1 mn (2005: � 1 mn)
October 10, 2008) and the discounted price of the shares purchased by employees, of � 10 mn (2007: � 30 mn; 2006: In addition, during the year ended December 31, 2006, the
Due to the Tender Offer all AGF shares were purchased by
The options outstanding as of December 31, 2008 have an exercise price of � 48.96 and a weighted average remaining contractual life of 3 years.
Based on the specific IFRS guidance, restructuring provisions are recognized prior to when they qualify to be recognized under the guidance for other types of provisions. In order to reflect the timely implementation of the various restructuring initiatives, restructuring provisions, as far as they are already “locked in”, have been transferred to the provision type, which would have been used not having a restructuring initiative in place. This applies for each single contract.
For personnel costs, at the time an employee has contractually agreed to leave Allianz Group by signing either an early retirement, a partial retirement (Altersteilzeit, which is a specific type of an early retirement program in Germany), or a termination arrangement the respective part of the restructuring provision has been transferred to provisions for employee expenses. In addition, provisions for vacant office spaces that result from restructuring initiatives have been transferred to “other” provisions after the offices have been completely vacated.
Additions to existing provisions 22 19 — 4 45 Release of provisions recognized in previous years (65) (29) — (1) (95) Release of provisions via payments (27) (65) — (52) (144) Release of provisions via transfers (159) (140) — — (299) Foreign currency translation adjustments — (6) — — (6)
Approximately 4,695 full time equivalent positions have already been terminated, a part of which are related to natural employee turnover and early retirement agreements
(Altersteilzeit) that were agreed upon before the restructuring provision was recorded and are not part of the restructuring provision.
New provisions — Additions to existing provisions 3 Release of provisions recognized in previous years (10) Restructuring charges directly reflected in the consolidated income statement (2) Total restructuring charges during the year ended December 31, 2008 (9)
A summary of the changes in the provisions for restructuring of the Allianz Deutschland AG during the year ended December 31, 2008 is: Provisions as of
Allianz Deutschland AG recorded releases of provisions via transfers to other provision categories of � 61 mn as of December 31, 2008 (2007: � 159 mn).
The restructuring activities of the AGF Group will result in a reduction of locations within France from 14 to 10 and a relocation of workers and activities with critical team size purpose as well as a strong reduction of non-HR costs
New provisions 77 Additions to existing provisions — Release of provisions recognized in previous years — Restructuring charges directly reflected in the consolidated income statement 4 Total restructuring charges during the year ended December 31, 2008 81
The objective is to reorganize its strategic and commercial direction by aligning the underwriting strategies, refocusing some lines of business in the insurance business, as well as in the asset management segment, unifying all the support functions leveraging on best practices. Further some activities will be relocated within Italian sites whereas other operations will be integrated into one single organization.
During the year ended December 31, 2008, ASIC SE recognized restructuring charges of � — mn (2007: � 79 mn) in total. As of December 31, 2008 ASIC SE recorded a provision for restructuring of � 15 mn (2007: � 42 mn).
Basic earnings per share (in �) (5.43) 18.00 17.09 from continuing operations (in �) 8.81 16.53 16.16 from discontinued operations (in �) (14.24) 1.47 0.93
and share-based compensation plans into Allianz shares, as well as from the conversion of derivatives on own shares.
Potentially dilutive common shares resulting from assumed conversion of: Share-based compensation plans 3,226,670 1,321,100 335,346 Derivatives on own shares 1,139,945 3,265,298 4,868,560
Weighted average number of common shares outstanding after assumed conversion 456,033,541 449,563,365 418,282,798
During the year ended December 31, 2008, the weighted average number of common shares does not include held by the Allianz Group.
Other countries 111,598 109,144 1) Includes as of December 31, 2008, 27,597 employees of Dresdner Bank Group.
In the table above are included the personnel expenses from the discontinued operations of Dresdner Bank, which amounted to � 2,532 mn in 2008.
For a summary of fees billed by the Allianz Group’s principal auditors, see page 128. The information provided there is considered part of these consolidated financial statements.
Board of Management and their beneficiaries are accrued in the amount of � 47.0 mn (2007: � 49.0 mn).
AG. The transaction agreement was adjusted on November 27, 2008, and January 9, 2009. For details on the transaction agreement and financial effects please refer to Note 4 of the consolidated financial statements. The transaction was closed as scheduled on January 12, 2009. In exchange for
In addition, Commerzbank AG and Allianz Group entered into a long-term distribution agreement.
Subsequent to the sale, Allianz Group repurchased Colleraterized Debt Obligations (CDOs) for a consideration of about � 1.1 bn from Dresdner Bank AG. Furthermore, Allianz will provide a silent participation of � 750 mn in Dresdner
◽ Allianz Capital Partners GmbH, Munich 0.03 100.0 ◽ Allianz Capital Partners Verwaltungs GmbH, Munich 632 100.0 ◽ Allianz Climate Solutions GmbH, Munich 0.04 100.0 ◽ Allianz Dresdner Bauspar AG, Bad Vilbel 2) 99 100.0 ◽◽ Allianz Global Corporate & Specialty AG, Munich 778 100.0 ◽ Allianz Global Investors Advisory GmbH, Frankfurt/Main 3 100.0 ◽ Allianz Global Investors AG, Munich 2,401 100.0 ◽ Allianz Global Investors Europe GmbH, Munich 17 100.0 ◽ ◽ Allianz Global Investors Kapitalanlagegesellschaft mbH, Frankfurt/Main 146 100.0 ◽ Allianz Global Investors Product Solutions GmbH, Munich 0.1 100.0 ◽ ◽ Allianz Lebensversicherungs-Aktiengesellschaft, Stuttgart 1,456 100.0 ◽ Allianz Pension Partners GmbH, Munich 0.5 100.0 ◽ Allianz Pensionskasse Aktiengesellschaft, Munich 182 100.0 ◽ Allianz Private Equity Partners GmbH, Munich 0.04 100.0 ◽ ◽ Allianz Private Krankenversicherungs-Aktiengesellschaft, Munich 360 100.0 ◽ Allianz ProzessFinanz GmbH, Munich 0.4 100.0 ◽ Allianz Real Estate Germany GmbH, Stuttgart 5 100.0 ◽ Allianz Shared Infrastructure Services SE, Munich 111 100.0 ◽ Allianz Treuhand GmbH, Munich 0.01 100.0 ◽ ◽ Allianz Versicherungs-Aktiengesellschaft, Munich 2,566 100.0 ◽ AZT Automotive GmbH, Ismaning 0.2 100.0 ◽ Deutsche Lebensversicherungs-Aktiengesellschaft, Berlin 56 100.0 ◽ ◽ Dresdner Bank Aktiengesellschaft, Frankfurt/Main 2) 2,496 100.0 ◽ ◽ Euler Hermes Kreditversicherungs-AG, Hamburg 220 100.0 ◽ manroland AG, Offenbach 332 100.0 3)
◽ AAAM S.A., Paris 15 84.9 ◽ Allianz Global Corporate & Specialty France, Paris 238 100.0 ◽ Allianz Global Investors S.A., Paris 93 99.8
◽ Assurances Générales de France IART S.A., Paris 2,719 100.0 ◽ Assurances Générales de France Vie S.A., Paris 2,592 100.0 ◽ Assurances Générales de France, Paris 6,821 100.0
◽ Banque AGF S.A., Paris 110 100.0 ◽ Euler Hermes SFAC S.A., Paris 337 100.0
◽ PT Asuransi Allianz Life Indonesia p.l.c., Jakarta 28 99.8 ◽ PT Asuransi Allianz Utama Indonesia Ltd., Jakarta 14 76.0 Ireland
◽ Allianz Global Investors Ireland Ltd., Dublin 9 100.0 ◽ Allianz Irish Life Holdings p.l.c., Dublin 285 66.4 ◽ Allianz Re Dublin Limited, Dublin 93 100.0 ◽ Allianz Worldwide Care Ltd., Dublin 6 100.0 1) Percentage includes equity participations held by dependent enterprises in full, even if the Allianz Group’s share in the dependent enterprise is under 100.0 %. 2) No subsidiary of the Allianz Group since January 12, 2009.
◽ Allianz Global Investors Luxembourg S.A., Senningerberg 70 100.0 ◽ Dresdner Bank Luxembourg S.A., Luxembourg 2) 796 100.0 Malaysia
◽ Allianz Europe Ltd., Amsterdam 27,315 100.0 ◽ Allianz Nederland Asset Management B.V., Amsterdam 33 100.0 ◽ Allianz Nederland Levensverzekering N.V., Utrecht 207 100.0 ◽ Allianz Nederland Schadeverzekering N.V., Rotterdam 260 100.0 ◽ Dresdner VPV N.V., Gouda 2) 47 100.0 Poland
◽ TU Allianz Polska S.A., Warsaw 154 100.0 ◽ TU Allianz Zycie Polska S.A., Warsaw 38 100.0 Portugal
◽ ◽ Companhia de Seguros Allianz Portugal S.A., Lisboa 161 64.8 Republic of Korea
◽ Allianz Global Investors Korea Limited, Seoul 14 100.0 ◽ Allianz Life Insurance Co. Ltd., Seoul 398 100.0 Romania
◽ ◽ Allianz Compañia de Seguros y Reaseguros S.A., Madrid 458 99.9 ◽ Euler Hermes Crédito Compañia de Seguros y Reaseguros, S.A., Madrid 7 100.0 ◽ Eurovida, S.A. Compañia de Seguros y Reaseguros, Madrid 94 51.0 1) Percentage includes equity participations held by dependent enterprises in full, even if the Allianz Group’s share in the dependent enterprise is under 100.0 %. 2) No subsidiary of the Allianz Group since January 12, 2009.
◽ Alba Allgemeine Versicherungs-Gesellschaft, Basel 54 100.0 ◽ ◽ Allianz Risk Transfer AG, Zurich 285 100.0 ◽◽ Allianz Suisse Lebensversicherungs-Gesellschaft AG, Zurich 604 100.0 ◽ ◽ Allianz Suisse Versicherungs-Gesellschaft, Zurich 450 100.0 ◽ CAP Rechtsschutz-Versicherungsgesellschaft AG, Zürich 4 100.0 ◽ Dresdner Bank (Schweiz) AG, Zurich 2) 131 99.8 ◽ ELVIA Reiseversicherungs-Gesellschaft AG, Wallisellen 224 100.0 ◽ Selecta AG, Muntelier 3) 113 100.0 Taiwan
◽ Allianz Hayat ve Emeklilik AS, Istanbul 87 89.0 ◽ Allianz Sigorta AS, Istanbul 157 84.2 United Kingdom
◽ Allianz (UK) Limited, Guildford 418 100.0 ◽ Allianz Insurance plc., Guildford 861 98.0 4)
◽ Dresdner Kleinwort Group Limited, London 2) 45 100.0 ◽ Dresdner Kleinwort Limited, London 2) 258 100.0 ◽ Kleinwort Benson Channel Islands Holdings Limited, St. Peter Port 2) 225 100.0 ◽ Kleinwort Benson Private Bank Limited, London 2) 65 100.0 ◽ RCM (UK) Ltd., London 18 100.0 United States
◽ Allianz Global Investors of America L.P., Dover/Delaware 1,395 100.0 Allianz Global Risks US Insurance Company, Burbank/California 2,909 100.0
Phenix Alternative Holding, Paris 2 007 41.6 AGF SECURICASH L, Paris 1 583 27.2 Allianz Euribor, Paris 1 162 45.8 AGF Eurocash, Paris 848 43.6 Allianz Euro Liquid, Paris 675 42.5
GEA Group Aktiengesellschaft, Bochum 232 10.2 1,414 284 12/31/2007 The Hartford Financial Services Group, Inc., Hartford 286 8.1 13,784 2,117 12/31/2007 Industrial & Commercial Bank of China Limited, Beijing 2,433 1.9 56,996 8,623 12/31/2007
We have audited the consolidated financial statements prepared by Allianz SE, Munich – comprising the balance sheet, the income statement, statement of changes in equity, statement of cash flows and the notes to the consolidated financial statements – together with the group management report for the business year from January 1 to December 31, 2008. The preparation of the consolidated financial statements and the group management report in accordance with IFRS as adopted by the EU, and the additional requirements of German commercial law pursuant to
§ 315 a Abs. 1 HGB (Handelsgesetzbuch, “German Commercial Code”) and supplementary provisions of the articles of incorporation are the responsibility of the parent company’s management. Our responsibility is to express an opinion on the consolidated financial statements and on the group management report based on our audit. In addition we have been instructed to express an opinion as to whether the consolidated financial statements comply with full IFRS.
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 Wirtschaftspüfer (IDW,
Membership in other statutory supervisory boards and SE administrative councils in Germany E.ON AG,
Membership in other statutory supervisory boards and SE administrative councils in Germany Bertelsmann AG,
Membership in other statutory supervisory boards and SE administrative councils in Germany Dresdner Bank AG
Membership in other statutory supervisory boards and SE administrative councils in Germany BMW AG, Infineon
Membership in other statutory supervisory boards and SE administrative councils in Germany SEB AG
Membership in other statutory supervisory boards and SE administrative councils in Germany BASF SE (Deputy
Membership in other statutory supervisory boards and SE administrative councils in Germany Bayerische
Membership in other statutory supervisory boards and SE administrative councils in Germany Fresenius SE,
Terminology relating to particular segments of the insurance or banking business has not been included.
The amount of cash or cash equivalents paid or the fair value of other consideration given to acquire an asset at the time of its acquisition.
This is possible, for example, where the parent company holds, directly or indirectly, a majority of the voting rights, has the power to appoint or remove a majority of the members of the Board of Management or equivalent governing body, or where there are contractual rights of control.
Policies in force – especially in life, health, and personal accident insurance – give rise to potential liabilities for which funds have to be set aside. The amount required is calculated actuarially.
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.
All enterprises, other than affiliated enterprises or joint ventures, in which the Group has an interest of between 20 % and 50 %, regardless of whether a significant influence is actually exercised or not.
Under this accounting principle the difference between the acquisition cost and redemption value (of an investment) is added to or subtracted from the original cost figure over the period from acquisition to maturity and credited or charged to income over the same period.
Available-for-sale investments are securities which are neither held to maturity nor have been acquired for sale in the near term; available-for-sale investments are shown at fair value on the balance sheet.
Represents the total of acquisition and administrative expenses (net) and claims and insurance benefits incurred
Financial obligations not shown as liabilities on the balance sheet because the probability of a liability actually being incurred is low. Example: guarantee obligations.
With defined benefit plans, differences come about between the actuarial gains and losses which, when the corridor approach is applied, are not immediately recognized as income or expenses as they occur. Only when the cumulative actuarial gains or losses fall outside the corridor is redemption made from the following year onwards. The corridor is 10 % of the present value of the pension rights accrued or of the market value of the pension fund assets, if this is higher.
The risk that one party to a contract will fail to discharge its obligations and thereby cause the other party to incur financial loss.
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 to the employer of a defined benefit 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.
The relevant proportion of cost for the investment in a subsidiary is set off against the relevant proportion of the shareholders ’ equity of the subsidiary.
Group’s proportionate share of the net assets of the companies concerned. In the case of investments in companies which prepare consolidated financial statements of their own, the valuation is based on the sub-group’s consolidated net assets. The valuation is subsequently adjusted to reflect the proportionate share of changes in the company’s net assets, a proportionate share of the company’s net earnings for the year being added to the Group’s consolidated income.
The amount for which an asset could be exchanged between knowledgeable, willing parties in an arm’s length transaction.
Funds held by others are funds to which the reinsurer is entitled but which the ceding insurer retains as collateral for future obligations of the reinsurer. The ceding insurer shows these amounts as “funds held under reinsurance business ceded.”
Difference between the purchase price of a subsidiary and the relevant proportion of its net assets valued at the current value of all assets and liabilities at the time of acquisition.
The use of special financial contracts, especially derivative financial instruments, to reduce losses which may arise as a result of unfavorable movements in rates or prices.
Held-to-maturity investments comprise debt securities held with the intent and ability that they will be held-to-maturity.
International Financial Reporting Standards. Since 2002, the designation IFRS applies to the overall framework of all standards approved by the International Accounting Standards Board. Already approved standards will continue to be cited as International Accounting Standards (IAS).
That part of net earnings for the year which is not attributable to the Group but to others outside the Group who hold shares in affiliated enterprises.
– but not obliged – to buy (call option) or sell (put option) the underlying asset at a predetermined price sometime in the future. The grantor (writer) of the option, on the other hand, is obliged to transfer or buy the asset and receives a premium for granting the option to the purchaser.
Derivative financial instruments which are not standardized and not traded on an exchange but are traded directly between two counterparties via over-the-counter (OTC)
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.
Interest income from reverse repos and interest expenses from repos are accrued evenly over the lifetime of the transactions and reported under interest and similar income or interest expenses.
The benefits payable under this type of life insurance depend primarily on the performance of the investments in a mutual fund. The policyholder shares equally in the profits or losses of the underlying investments.
Allianz Global Investors 66-67 Allianz Lebensversicherungs-AG 117, 126 Allianz Life US 122 Appropriation of Profit 48
B Banking 64-65 Basic earnings per share 34 Business model 106-108
Convertible bond BITES 84, 85 Corporate Activities 70-71 Corporate Governance 11-15
L Life/Health 58-63, 116-125 Liquidity and Capital Resources 83-86 Lloyd Adriatico 119
N Net income 45 Net income from continuing operations 44 Net income from discontinued operations 44 Non-operating result 44