iNterest aND simiLar iNCome aND iNterest eXpeNses Interest income and interest expenses are recognized on an accrual basis. Interest income is recognized using the effective interest method. This line item also includes dividends from available-for-sale equity securities and income from investments in associates and joint ventures. Dividends are recognized in income when the right to receive the dividend is established. Share of earnings from investments in associates and joint ventures represents the share of net income from entities accounted for using the equity method.
At the Allianz Group level, processes and committees have been established to ensure sound judgment and consistent application of the Allianz Group’s standards. Furthermore, the Allianz Group has a culture that is strongly committed to reliability, encourages open and transparent discussions, provides a venue for asking questions and admitting mistakes, recognizes experts and expertise, and respects the four eyes principle of review. Committees, none of which are chaired by the CFO of the Allianz Group, ensure that judgmental decisions and selection of assumptions are discussed in an open setting among experts and that inconsistencies are identified and resolved.
− reserves for loss and loss adjustments expenses of € 66,566 MN mainly for the Property-Casualty operations, including run-off business and reinsurance business assumed,
− reserves for insurance and investment contracts of € 404,072 MN mainly for the Life/Health operations and
Life/Health reserves are dependent on estimates and assumptions, especially on the life expectancy of an insured individual (mortality and longevity risk) and on the development of interest rates and investment returns (asset-liability mismatch risk). These assumptions also have an impact on the presentation of costs arising from the origination of insurance business (acquisition costs and sales inducements) and the value of acquired insurance business (PVFP). To ensure consistency in the application of actuarial methods and 1 Please refer to note 2 Summary of significant accounting policies. For further details, please refer to note 12 Deferred acquisition costs, note 19 Reserves for loss and loss adjustment expenses and note 20 Reserves for insurance and investment contracts.
Annual Report 2013 Allianz Group 143 iNCome from fiNaNCiaL assets aND LiaBiLities CarrieD at fair VaLue throuGh iNCome (Net) Income from financial assets and liabilities carried at fair value through income includes all investment income, and realized and unrealized gains and losses from financial assets and liabilities carried at fair value through income. In addition, commissions attributable to trading operations and related interest expenses and transaction costs are included in this line item. Foreign currency gains and losses on monetary items are also reported within income from financial assets and liabilities carried at fair value through income (net).
fee aND CommissioN iNCome Fee and commission income primarily consists of asset management fees that are recognized when the service is provided.
CLaims aND iNsuraNCe BeNefits iNCurreD Benefits charged to expense consist of claims and insurance benefits incurred during the period, including benefit claims in excess of policy account balances and interest credited to policy account balances. Furthermore, it includes claim handling costs that are directly related to the processing and settlement of claims. Reinsurance recoveries are deducted from claims and insurance benefits.
assumptions in the Life/Health reserving process, the Allianz Group has designed a two-stage reserving process. In a first stage, Life/ Health reserves are calculated by qualified local staff experienced in the business of the subsidiaries. Actuaries in the local entities also conduct tests of the adequacy of the premiums and reserves to cover future claims and expenses (liability adequacy tests). The process follows Group-wide standards for applying consistent and plausible assumptions. The appropriateness of the reserves and compliance with the Group-wide standards is confirmed by the local actuary. In a second stage, the Allianz Group Actuarial Department regularly reviews the local reserving processes, including the appropriateness and consistency of assumptions, and analyzes the movements of reserves. Any adjustments to reserves and other insurance-related reporting items are reported to and analyzed together with the Allianz Group Reserve Committee.
Property-Casualty reserves are particularly dependent on the use of estimates and judgment regarding the development of loss reserves. Similar to Life/Health, a two-stage reserving process is in place.
fair VaLue aND impairmeNts of fiNaNCiaL iNstrumeNts As of 31 December 2013, the Allianz Group reported financial instruments carried at fair value as follows:1
− € 161,490 MN of the financial assets and € 81,324 MN of the financial liabilities carried at fair value are classified within level 1 of the fair value hierarchy (quoted prices in active markets)
− € 308,650 MN of the financial assets and € 4,281 MN of the financial liabilities carried at fair value are classified within level 2 of the fair value hierarchy (valuation techniques with mainly observable market inputs)
In general, the subsidiaries assume responsibility for assessing fair values and evaluating impairments of financial instruments. This process is consistent with the decentralized organizational structure and reflects the fact that local managers are often best suited to analyze securities trading in local markets. Nevertheless, the subsidiaries are responsible for adhering to the Allianz Group’s internal control policy regarding impairment assessment, measurement and disclosure. Subsidiaries must report all impairment decisions on debt securities to the Allianz Group Accounting and Reporting department, which then reviews them for consistency and resolves discrepancies.
GooDWiLL As of 31 December 2013, the Allianz Group reported total goodwill of € 11,544 MN, of which: 2
− € 2,273 MN related to the Property-Casualty business − € 2,159 MN related to the Life/Health business − € 6,805 MN related to the Asset Management business and − € 307 MN related to the business segment Corporate and Other.
Goodwill represents the excess of the consideration transferred in a business combination over the net identifiable assets acquired. Upon acquisition, goodwill is allocated to the cash generating units (CGU) that are expected to benefit from the acquisition. Since goodwill is not amortized, the Allianz Group must evaluate at least annually whether the carrying value per CGU is deemed recoverable. This is assumed as long as the carrying value is not in excess of the unit’s estimated recoverable amount. If it is not deemed recoverable, the excess goodwill will need to be impaired.
The recoverable amounts of all cash generating units are typically determined on the basis of value in use calculations. The determination of a CGU’s recoverable amount requires significant judgment regarding the selection of appropriate valuation techniques and assumptions. These assumptions include selection of appropriate discount rates, planning horizons, capitalization requirements and the expected future business results. Assumptions may need to change as economic, market and business conditions change. As such, the Allianz Group continuously evaluates external conditions and the operating performances of the CGUs.
2 Please refer to note 2 Summary of significant accounting policies and note 47 Pensions and similar obligations for further details.
peNsioN LiaBiLities aND simiLar oBLiGatioNs As of 31 December 2013, the Allianz Group reported a defined benefit obligation for defined benefit plans of € 19,110 MN which is offset by the fair value of plan assets of € 11,668 MN.2
Liabilities for pension and similar obligations and related net pension expenses are determined in accordance with actuarial valuation models. These valuations rely on extensive assumptions. Key assumptions including discount rates, inflation rates, compensation increases, pension increases and rates of medical cost trend are defined centrally at the Allianz Group level considering the circumstances in the particular countries. In order to ensure their thorough and consistent determination, all input parameters are discussed and defined, taking into consideration economic developments, peer reviews, currently available market and industry data. The discount rate assumptions are determined by reference to yields of high-quality corporate bonds of appropriate duration and currency at the balance sheet date. In countries where there is no deep market in such bonds, market yields on government bonds are generally used as discount rates.
Provisions for restructuring programs are recognized when the Allianz Group has a detailed formal plan for the restructuring and has raised a valid expectation in those affected that it will carry out the restructuring by starting to implement the plan or by announcing its main features. The detailed formal plan of a restructuring program is based on several estimates and assumptions, such as the number of employees to be dismissed, amount of compensation payments, impacts of onerous contracts, possibilities of sub-leases, timing of the various steps of the program and in consequence timing of the expected cash flows.
The amendments to IAS 19 are applied retrospectively. The following tables present the impacts of the adoption of the amendments to IAS 19 on the consolidated balance sheet as of 1 January 2012 and as of 31 December 2012.
Reserves for insurance and investment contracts 361,954 2 361,956 Deferred tax liabilities 3,881 (467) 3,414
iFrs 9, Financial Instruments: Classification and Measurement IFRS 9, Financial Instruments: Classification and Measurement, was issued by the IASB in November 2009 and is part of the project to replace IAS 39 with a new standard. The project is divided into three phases: classification and measurement, impairment and hedge accounting. The IASB announced that the effective date for IFRS 9 will be 1 January 2018. The Allianz Group is currently evaluating the impact of IFRS 9 on its consolidated financial statements.
The standard requires entities to define their rights and obligations arising from a joint arrangement such as joint operations or joint ventures and provides guidance on how to account for these rights and obligations. IFRS 12, Disclosure of Interests in Other Entities, contains disclosure requirements previously set out in IASs 27, 28 and 31. Furthermore, IFRS 12 includes disclosure requirements regarding interests in unconsolidated Structured Entities. The Allianz Group will apply these new standards and amendments for periods beginning on or after 1 January 2014. The adoption of these standards and the amendments are not expected to have a material impact on the financial position and financial results of the Allianz Group.
Annual periods beginning on or after 1 January 2014 iFrs 14, Regulatory Deferral Accounts Annual periods beginning on or after 1 January 2016 iFric 21, Levies Annual periods beginning on or after 1 January 2014 Annual Improvements to iFrs 2010-2012 Annual periods beginning on or after 1 July 2014 Annual Improvements to iFrs 2011-2013 Annual periods beginning on or after 1 July 2014
The Allianz Group believes this change in presentation results in information that is more relevant to the economic decision-making needs of users of financial statements as it better reflects the nature of the reserves in the financial statements. In addition, the key performance indicator “combined ratio” reflects the net underwriting result.
The following table presents the impact of the change in presentation of policyholders’ account deposits and withdrawals on the consolidated statements of cash flows.
cHange oF consolidated statement oF casH FloWs relating to cHange in presentation oF policyHolders’ account deposits and WitHdraWals € mn
Net cash flow provided by operating activities 17,793 1,095 18,888 Net cash flow used in financing activities (941) (1,095) (2,036) Cash and cash equivalents at end of period 12,437 – 12,437 otHer reclassiFications Certain prior-period amounts have been reclassified to conform to the current period presentation.
scope oF consolidation In addition to Allianz SE, the consolidated financial statements for the period ended 31 December 2013 generally include all German and foreign operating companies in which Allianz SE directly or indirectly holds a majority of voting rights, or whose activities it can in some other way control. The companies are consolidated from the date on which Allianz SE is able to exercise control.
Number of fully consolidated special purpose entities (spes) 7 7 Total number of fully consolidated entities 902 912 Number of joint ventures valued at equity 23 17 Number of associates valued at equity 108 125 1 Includes 4 (2012: 5) subsidiaries, in which the Allianz Group owns less than the majority of the voting power, namely CreditRas Vita S.p.A., CreditRas Assicurazioni S.p.A. (CreditRas), Antoniana Veneta Popolare Vita S.p.A. (Antoniana) and BAWAG Allianz Vorsorgekasse AG. The Allianz Group controls these entities on the basis of distinctive rights stipulated by shareholder agreements between the Allianz Group subsidiary owning 50.0 % of each such entity and the other shareholders. Pursuant to the shareholder agreement of CreditRas, the Allianz Group has the power to appoint the majority of the members of the board of directors, which is the relevant body that governs the financial and operating policies of CreditRas. Pursuant to the shareholder agreement of Antoniana, the Allianz Group has the power to appoint half of the members of the board of directors, including the chairman, who is vested with a casting vote. The board of directors is the relevant body that governs the financial and operating policies of Antoniana. Pursuant to the shareholder agreement of BAWAG Allianz Vorsorgekasse AG, the Allianz Group is entitled to appoint the majority of the members of the supervisory board, who are entitled to vote for the members of the management board. The management board is the relevant body that governs the financial and operating policies of BAWAG Allianz Vorsorgekasse AG.
Insurance activities of Mensura cca, Brussels – 1 August 2012 Property-Casualty (3) Acquisition Brokerage portfolio-related activities of Gan Eurocourtage, Paris – 1 October 2012 Property-Casualty 67 Acquisition 1 At the date of initial consolidation.
In the following section all significant acquisitions during the year ended 31 December 2013 are described.
HsBc Taiwan Life branch On 21 June 2013, the Allianz Group acquired the assets and assumed the liabilities of the Taiwan branch of HSBC Life (International) Limited as part of the regional cooperation with HSBC and integrated it into Allianz Taiwan. The total consideration paid in cash amounted to € 14 mn.
The following table summarizes the consideration transferred and amounts recognized for major classes of identifiable assets acquired and liabilities assumed: HsBc taiWan liFe BrancH – consideration transFerred and identiFiaBle assets and liaBilities € mn Fair value
The following two tables summarize the consideration transferred, the recognized amounts of assets acquired and liabilities assumed as well as the determination of goodwill: D Consolidated Financial Statements 127 Consolidated Balance Sheets 128 Consolidated Income Statements 129 Consolidated Statements of Comprehensive Income 130 Consolidated Statements of Changes in Equity 131 Consolidated Statements of Cash Flows 134 Notes to the Consolidated Financial Statements
yapi Kredi sigorta a.Ş. and yapi Kredi emeKliliK a.Ş. – consideration transFerred and identiFiaBle assets and liaBilities € mn Fair value
Cash received for sale of 19.93 % Yapı Kredi Emeklilik stake (75) Total consideration transferred 639 Identifiable assets acquired and liabilities assumed Cash and cash equivalents (excluding 19.93 % Yapı Kredi Emeklilik sale) 334 Investments 247 Loans and advances to banks and customers 7 Financial assets for unit-linked contracts 1,612 Reinsurance assets 133 Deferred acquisition costs (pVFp) 214 Other assets 197 Intangible assets 232 Unearned premiums (264) Reserves for loss and loss adjustment expenses (174) Reserves for insurance and investment contracts (193) Financial liabilities for unit-linked contracts (1,612) Deferred tax liabilities (82) Other liabilities (127) Total net identifiable assets 524 yapi Kredi sigorta a.Ş. and yapi Kredi emeKliliK a.Ş. – determination oF goodWill € mn Fair value
Goodwill from the transaction amounted to € 222 mn and primarily reflects anticipated growth opportunities in the Turkish insurance market. The impact of Yapı Kredi Sigorta and Yapı Kredi Emeklilik on the Allianz Group’s total revenues and net income since the acquisition was € 475 mn and € 3 mn, respectively. The gross premiums written, total revenues and net income of the combined entity ( Allianz Group including Yapı Kredi Sigorta and Yapı Kredi Emeklilik) for the year ended 31 December 2013 would have been € 72,433 mn, € 111,575 mn and € 6,369 mn, respectively, if the acquisition date was 1 January 2013.
The following table summarizes the consideration transferred and the recognized amounts of assets acquired and liabilities assumed: Business portFolios From pastor Vida – consideration transFerred and identiFiaBle assets and liaBilities € mn Fair value
Consideration transferred Cash consideration transferred 50 Total consideration transferred 50 Identifiable assets acquired and liabilities assumed Cash and cash equivalents 14 Reinsurance assets 1 Deferred acquisition costs (pVFp) 25 Other assets 1 Intangible assets 20 Unearned premiums (6) Reserves for loss and loss adjustment expenses (4) Deferred tax liabilities (1) Total net identifiable assets 50
The impact on the total revenues and the net income of the combined entity for the year ended 31 December 2013, as if the acquisition date had been as of 1 January 2013, was not material.
Property-Casualty In the Property-Casualty category, reportable segments offer a wide variety of insurance products to both private and corporate customers, including motor liability and own damage, accident, general liability, fire and property, legal expense, credit and travel insurance.
Asset Management The reportable segment Asset Management operates as a global provider of institutional and retail asset manage ment 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 alternative products. The United States and Germany as well as France, Italy and the Asia-Pacific region represent the primary asset management markets.
Corporate and Other The reportable segment Holding & Treasury includes the management and support of the Allianz Group’s businesses through its strategy, risk, corporate finance, treasury, financial reporting, controlling, communication, legal, human resources and technology functions. The reportable segment Banking consists of the banking activities in Germany, France, Italy, the Netherlands and Bulgaria. The banks offer a wide range of products for corporate and retail clients, with a primary focus on the latter. The reportable segment Alternative Investments provides global alternative investment management services in the private equity, real estate, renewable energy and infrastructure sectors, mainly on behalf of the Allianz Group’s insurance operations. The reportable segment Alternative Investments also includes a fully consolidated private equity investment. The income and expenses of this investment are included in the non-operating result.
Annual Report 2013 Allianz Group 155 reportable segments measure of profIt or loss The Allianz Group uses operating profit to evaluate the performance of its reportable segments and the Allianz Group as a whole. Operating profit highlights the portion of income before income taxes attributable to the ongoing core operations of the Allianz Group. The Allianz Group considers the presentation of operating profit to be useful and meaningful to investors because it enhances the understanding of the Allianz Group’s underlying operating performance and the comparability of its operating performance over time.
Against this general rule, the following exceptions apply: − In all reportable segments, income from financial assets and liabilities carried at fair value through income (net) is treated as operating profit if the income relates to operating business.
busIness segment InformatIon – consolIdated balance sheets busIness segment InformatIon – consolIdated balance sheets € mn Property-Casualty Life/Health Asset Management Corporate and Other Consolidation Group assets
Reserves for loss and loss adjustment expenses 56,614 62,711 9,961 9,854 – – – – (9) (25) 66,566 72,540 Reserves for insurance and investment contracts 13,389 10,174 390,873 380,993 – – – – (190) (182) 404,072 390,985 Financial liabilities for unit-linked contracts – – 81,064 71,197 – – – – – – 81,064 71,197
Annual Report 2013 Allianz Group 157 busIness segment InformatIon – consolIdated balance sheets busIness segment InformatIon – consolIdated balance sheets € mn Property-Casualty Life/Health Asset Management Corporate and Other Consolidation Group assets
Loans and advances to banks and customers 16,131 18,331 89,922 94,080 449 395 18,166 16,896 (7,868) (10,333) 116,800 119,369 Financial assets for unit-linked contracts – – 81,064 71,197 – – – – – – 81,064 71,197
Non-current assets classified as held for sale 131 – – 12 16 – – 3 – – 147 15 € mn Property-Casualty Life/Health Asset Management Corporate and Other Consolidation Group lIabIlItIes and eQuItY Financial liabilities carried at fair value through income 78 100 5,869 5,255 1 – 534 403 (469) (361) 6,013 5,397 Liabilities to banks and customers 1,189 1,146 2,260 1,972 1,314 1,398 21,337 22,791 (2,991) (4,882) 23,109 22,425
German Speaking Countries Western & Southern Europe Iberia & Latin America USA 1 Global Insurance Lines &
Net income (loss) attributable to: 1 The reserve strengthening for asbestos risks in 2012 at Fireman’s Fund Insurance Company of € 71 mn had no impact on the financial results of the Allianz Group and Fireman’s Fund’s combined ratio under IFRS.
4 Represents the total of acquisition and administrative expenses (net) and claims and insurance benefits incurred (net) divided by premiums earned (net).
Non-operating income from financial assets and liabilities carried at fair value through income (net) 13 (26) 12 (47) 5 (3) 2 (13) (6) 6 – 2 – 1 – – 26 (80) Non-operating realized gains/losses (net) 114 321 216 147 18 (64) 5 59 153 200 10 7 4 1 – – 520 671 Non-operating impairments of investments (net) (32) (88) (150) (90) (15) (17) – 1 (16) (18) (4) (20) – – – – (217) (232)
Income (loss) before income taxes 1,009 1,306 1,772 1,450 401 317 161 (499) 1,909 2,029 200 208 106 124 6 7 5,564 4,942
2 Represents claims and insurance benefits incurred (net) divided by premiums earned (net). 3 Represents acquisition and administrative expenses (net) divided by premiums earned (net).
Claims and insurance benefits incurred (net) (13,139) (13,942) (4,113) (3,804) (626) (595) (93) (99) (337) (352) (1,788) (1,594) – – (20,096) (20,386) Changes in reserves for insurance and investment contracts (net) (9,273) (9,278) (2,364) (2,377) (99) (127) (1,346) (1,497) (2) 15 (472) (707) – – (13,556) (13,971)
Acquisition and administrative expenses (net) (1,565) (1,302) (1,795) (1,678) (201) (207) (1,054) (1,077) (88) (80) (902) (971) 2 (1) (5,603) (5,316)
Non-operating income from financial assets and liabilities carried at fair value through income (net) – – (5) (2) – – 32 15 – – – – – – 27 13 Non-operating realized gains/losses (net) – – 35 67 – – 28 6 – – 25 59 – – 88 132 Non-operating impairments of investments (net) – – (13) (33) – – – (5) – – (3) (11) – – (16) (49)
Income before income taxes 3,106 2,839 Income taxes (1,181) (1,029) Net income 1,925 1,810
Net loss attributable to: Cost-income ratio 1 for the reportable segment Banking in % 100.9 87.0 1 Represents investment expenses, administrative expenses (net), excluding acquisition-related expenses, restructuring charges and other expenses divided by interest and similar income, operating income from financial assets and liabilities carried at fair value through income (net), fee and commission income, other income, interest expenses, excluding interest expenses from external debt and fee and commission expenses.
Annual Report 2013 Allianz Group 167 reportable segments – corporate and other reportable segments – corporate and other € mn Holding & Treasury Banking Alternative Investments Consolidation Corporate and Other
Operating income from financial assets and liabilities carried at fair value through income (net) 31 18 8 14 (1) (1) 2 (1) 40 30
Non-operating income from financial assets and liabilities carried at fair value through income (net) (44) 229 – – 1 2 (3) 5 (46) 236
Available-for-sale investments 392,023 383,254 Held-to-maturity investments 4,140 4,321 Funds held by others under reinsurance contracts assumed 894 1,188 Investments in associates and joint ventures 3,175 3,219 Real estate held for investment 10,783 9,646
7 – Cash and cash equivalents cash and cash equIvalents € mn as of 31 December 2013 2012
Debt securities Government and agency mortgage-backed securities (residential and commercial) 2,515 103 (16) 2,602 4,026 291 (2) 4,315 Corporate mortgage-backed securities (residential and commercial) 11,226 693 (86) 11,833 10,778 1,202 (107) 11,873
2 Includes shares invested in Spanish banks with a fair value of € 402 MN (2012: € 279 MN).
held-to-maturIty Investments held-to-maturIty Investments € mn as of 31 December 2013 2012
unrealIzed losses on avaIlable-For-sale Investments and held-to-maturIty Investments € mn Less than 12 months Greater than 12 months Total as of 31 December Fair Value Unrealized
Government and government agency bonds 3,881 (80) 5,528 (375) 9,409 (455)
Corporate mortgage-backed securities (residential and commercial) Total unrealized losses amounted to € 86 mn as of 31 December 2013. The unrealized loss positions mainly stem from issues in the securities markets of certain European countries. Based on a detailed analysis of the underlying securities and collaterals, the Allianz Group did not consider these investments to be impaired as of 31 December 2013.
The unrealized losses on the Allianz Group’s investment in government bonds were mainly caused by investments in certain European countries and the U.S. During 2013, government and government agency bond performance has been negative, due to a rising interest rate level in certain countries, resulting in an increase of unrealized losses of € 1,008 mn. Based on a detailed analysis of the underlying securities, the Allianz Group did not consider these invest - ments to be impaired as of 31 December 2013.
Corporate bonds Total unrealized losses amounted to € 1,405 mn as of 31 December 2013. 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”. The increase in unrealized losses of € 450 mn is spread over almost all sectors, due to a rising interest environment. Based on a detailed analysis of the underlying securities, the Allianz Group did not consider these investments to be impaired as of 31 December 2013.
Investments In assocIates and joInt ventures As of 31 December 2013, loans to associates and joint ventures and available-for-sale debt securities issued by associates and joint ventures held by the Allianz Group amounted to € 577 mn (2012: € 290 mn).
real estate held For Investment real estate held For Investment € mn
Cost as of 1 January 12,443 11,383 Accumulated depreciation as of 1 January (2,797) (2,719) Carrying amount as of 1 January 9,646 8,664
Changes in the consolidated subsidiaries of the Allianz Group 807 317
Reclassifications into non-current assets classified as held for sale (117) (20) Foreign currency translation adjustments (43) 20
Reversals of impairments 22 33 Carrying amount as of 31 December 10,783 9,646 Accumulated depreciation as of 31 December 3,054 2,797 Cost as of 31 December 13,837 12,443
Collateral paid for securities borrowing transactions and derivatives 315 – 315 365 – 365 1 Primarily include covered bonds.
loans and advances to banks and customers by contractual maturIty loans and advances to banks and customers by contractual maturIty € mn as of 31 December 2013 Up to 3 months > 3 months up to 1 year > 1 year up to 3 years > 3 years up to 5 years Greater than 5 years Total
Carrying amount as of 31 December 4,354 4,323 lIFe/health Carrying amount as of 1 January 13,521 14,579
Carrying amount as of 31 December 15,837 13,521 asset management 159 139
Carrying amount as of 1 January 4,295 4,364 Foreign currency translation adjustments (131) (47) Changes recorded in the consolidated income statements 10 66 Other changes 289 (88) Carrying amount as of 31 December 4,463 4,295
Reinsurance involves credit risk and is subject to aggregate loss limits. Reinsurance does not legally discharge the respective Allianz company from primary liability under the reinsured policies. Although the reinsurer is liable to this company to the extent of the business ceded, the Allianz company remains primarily liable as the direct insurer on all the risks it underwrites, including the share that is reinsured. The Allianz Group monitors the financial condition of its reinsurers on a regular basis and reviews its reinsurance arrangements periodically in order to evaluate the reinsurer’s ability to fulfill its obligations to the Allianz Group companies under existing and planned reinsurance contracts. The Allianz Group’s evaluation criteria, which include the degree of creditworthiness, capital levels and marketplace reputation of its reinsurers, are such that the Allianz Group believes that its reinsurance credit risk is not significant, and historically has not experienced noteworthy difficulty in collecting claims from its reinsurers. Additionally, and as appropriate, the Allianz Group may also require letters of credit, deposits, or other financial guarantees to further minimize its exposure to credit risk. In certain cases, however, the Allianz Group does establish an allowance for doubtful amounts related to reinsurance as appropriate, although this amount was not significant as of 31 December 2013 and 2012. The Allianz Group primarily maintains business relations with highly rated reinsurers.
As of 31 December 2013, the percentage of PVFP that is expected to be amortized in 2014 is 16.58 % (11.21 % in 2015, 9.72 % in 2016, 8.70 % in 2017 and 8.02 % in 2018).
Annual Report 2013 Allianz Group174 13 – Other assets other assets € mn as of 31 December 2013 2012
Derivative financial instruments used for hedging that meet the criteria for hedge accounting and firm commitments 75 129 Property and equipment
Changes in the consolidated subsidiaries of the Allianz Group 17 60
Reclassifications into non-current assets classified as held for sale (16) – Foreign currency translation adjustments (43) 14
Changes in the consolidated subsidiaries of the Allianz Group 10 (8)
Carrying amount as of 31 December 1,173 967 Accumulated depreciation as of 31 December 2,655 2,673 Cost as of 31 December 3,828 3,640
Changes in the consolidated subsidiaries of the Allianz Group 161 117
Intangible assets with finite useful lives 1 Includes primarily the brand name of Selecta AG, Muntelier. 2 Includes primarily the long-term distribution agreements with Commerzbank AG of € 373 mn (2012: € 410 mn), Banco Popular S.A. of € 369 mn (2012: € 386 mn), Yapı Kredi Bank of € 151 mn (2012: € – mn) and HSBC in Asia and Turkey of € 78 mn (2012: € – mn).
3 Includes primarily customer relationships from the acquisition of Selecta AG of € 118 mn (2012: € 152 mn) and Yapı Kredi Sigorta A.Ş. of € 10 mn (2012: € – mn). The renewal rights of € 19 mn (2012: € 31 mn), which were acquired in the context of business combinations, were reclassified from the line item “Other” to the line item “Customer relationships”.
Cost as of 1 January 12,573 12,527 Accumulated impairments as of 1 January (894) (805) Carrying amount as of 1 January 11,679 11,722
Real estate held for investment – 15 Investments in associates and joint ventures 131 – Real estate held for own use 16 –
As of 31 December 2012, the non-current assets classified as held for sale comprised only real estate held for investment which was sold as expected during the first quarter of 2013.
Non-current assets classified as held for sale comprise an investment of € 131 mn in an Italian real estate company. The real estate company is recorded as an associate allocated to the reportable segment Western and Southern Europe (Property-Casualty). The sale of the asset will be completed in 2014. Upon measurement of the noncurrent asset classified as held for sale at fair value less costs to sell, no significant impairment loss was recognized. Prior to the classification as non-current asset held for sale, an impairment loss of € 81mn was recognized for the Italian real estate company for the year ended 31 December 2013.
Real estate held for own use comprises an office building allocated to the reportable segment Asset Management. The sale is expected to be completed during the first quarter of 2014. No impairment was recognized for the year ended 31 December 2013.
Additions of 2013 mainly include goodwill from the acquisition of 93.94 % in Yapı Kredi Sigorta A.Ş., Istanbul.
Additions of 2012 mainly include goodwill from the acquisition relating to the brokerage portfolio of Gan Eurocourtage S.A., Paris.
The allocated goodwill of the CGU Selecta AG was impaired by € 89 mn in the business segment Corporate and Other. This impairment was triggered by lower expectations regarding future economic developments of Selecta’s core markets and lower multiples.
Due to the rebranding activities of the Allianz Group in the Russian market, the brand name of the Russian People’s Insurance Society
Allocation principles For the purpose of impairment testing, the Allianz Group has allocated goodwill to CGU1. These CGU represent the lowest level at which goodwill is monitored for internal management purposes.
− Global Insurance Lines & Anglo Markets including United Kingdom, Ireland and Australia,
The CGU in the Corporate and Other business segment consists of Selecta AG.
For all CGU in the Property-Casualty business segment and for the CGU Asset Management, the Allianz Group uses the discounted earnings method to derive the value in use. Generally, the basis for the determination of the discounted earnings value is the business plan (“detailed planning period”) as well as the estimate of the sustainable returns and eternal growth rates which can be assumed to be realistic on a long-term basis (“terminal value”) for the operating entities included in the CGU. The discounted earnings value is calculated by discounting the future earnings using an appropriate discount rate. The business plans applied in the value in use calculations are the results of the structured management dialogues between the Board of Management of the Allianz Group and the operating entities in connection with a reporting process integrated into these dialogues. Generally, the business plans comprise a planning horizon of three years and are based on the current market environment.
For all CGU in the Life/Health business segment the value in use is based on an Appraisal Value method which is derived from the Embedded Value and new business value calculation.
In the cases where no adequate valuation reflecting a long-term view in line with management judgment and market experience could be derived from a market-consistent methodology (mCEV), the Appraisal Value was derived from the Traditional Embedded Value (TEV) and new business calculation. The TEV and the new business calculation were used in the impairment test in the Life/Health business segment for Allianz Taiwan Life Insurance Co. Ltd., Taipei.
Significant assumptions In determining the business plans, certain key assumptions were taken in order to project future earnings.
For entities included in the CGU of the Property-Casualty business segment, the business plans are mainly based on key assumptions including expense ratio, loss ratio, investment income, risk capital, market share, premium rate changes and taxes. The basis for determining the values assigned to the key assumptions are current market trends and earnings projections.
cgu in the Property-Casualty business segment Discount rate Eternal growth rate
German Speaking Countries 7.5 1.0 Insurance Western & Southern Europe 8.6 1.0 Iberia & Latin America 14.0 3.0 Asia-Pacific and Middle East 10.4 3.0 Central and Eastern Europe 9.4 3.0 Global Insurance Lines & Anglo Markets 8.7 1.0 Specialty Lines I 7.7 1.0 Specialty Lines II 7.9 1.0
Reference rate for entities with Appraisal Value based on mcev and risk discount rate for entities with Appraisal Value based on tev
Insurance Western & Southern Europe mcev: Euro swap curve minus 10 bps credit risk adjustment plus 23 bps illiquidity premium
Asia-Pacific and Middle East mcev: Local swap curve minus 10 bps credit risk adjustment plus 0 bps illiquidity premium tev: 6.17 % for Allianz Taiwan Life Insurance Co. Ltd.
The new business value calculation is based on a best estimate of one year of value of new business, multiplied by a factor (multiple) to capture expected future new business. The best estimate of new business is generally derived from the achieved value of new business. The new business multiple accounts for the risk and the growth associated with future new business in analogy to the discount rate and the growth rate in a discounted earnings method. For all CGU in the Life/Health business segment, a multiple of not more than ten times the value of new business is applied.
It has to be noted, however, that the sensitivity analysis for the TEV with an adverse variation in the risk discount rate was performed on a ceteris paribus basis. Investment income and the respective associated profits underlying the TEV were not adjusted correspondingly.
IntangIble assets wIth FInIte useFul lIves Amortization expenses of intangible assets with finite useful lives are estimated to be € 144 mn in 2014, € 137 mn in 2015, € 132 mn in 2016, € 114 mn in 2017 and € 95 mn in 2018. Thereof, the amortization expenses relating to the intangible assets of Selecta AG are included in the line item “Expenses from fully consolidated private equity investments ”.
The long-term distribution agreements with Commerzbank AG have useful lives of 13.5 years and 15 years, which were determined by contractual agreements. They are amortized on a straight-line basis over the remaining useful life of 10 years. The long-term distribution agreements with Banco Popular S.A. have useful lives of 25 years, which were determined by contractual agreements. They are amortized on a straight-line basis over the remaining useful lives of 23 years. The long-term distribution agreements with Hongkong & Shanghai Banking Corporation Holdings PLC (HSBC) in Asia and Turkey have useful lives of 11 years and 10 years, which were determined by contractual agreements. They are amortized on a straight-line basis over the remaining useful lives of 10 years and 9.5 years. The long-term distribution agreements with Yapı Kredi Bank have useful lives of 15 years, which were determined by contractual agreements. They are amortized on a straight-line basis over the remaining useful lives of 14.5 years.
Financial liabilities designated at fair value through income – – Total 6,013 5,397 17 – Liabilities to banks and customers liabilities to banks and customers € mn as of 31 December 2013 2012
Term deposits and certificates of deposit 979 2,157 3,136 986 1,651 2,637
As of 31 December 2013, liabilities to customers include € 1,560 mn (2012: € 1,625 mn) of non-interest bearing deposits.
Reserves for loss and loss adjustment expenses for the PropertyCasualty business segment are described in detail in the following sections.
change in reserves For loss and loss adjustment expenses € mn
Reclassification of discounted loss reserves 2 (3,207) 306 (2,901) – – –
Loss payments for the individual accident years (per calendar year, net)
€ mn Accident year as of 31 December 2004 & Prior 2005 2006 2007 2008 2009 2010 2011 2012 2013 Total
Ultimate loss for the individual accident years at the respective reporting date (net)
ultimate loss For the individual accident years at the respective reporting date (net)
calendar year premiums earned and ultimate loss ratio For the individual accident years at the respective reporting date (net)
The major highlights of the reserve developments in 2013 are discussed by line of business below. The discussion is based on net loss and LAE reserves of the relevant local operating entity before consolidation and converted into Euro for uniform presentation. Only significant developments for the Allianz Group’s major operating entities are included and therefore the amounts do not fully reconcile to the line of business totals in the above table.
The ultimate loss of an accident year comprises all payments made for that accident year up to the reporting date, plus the loss reserve at the reporting date. Given complete information regarding all losses incurred up to the balance sheet date, the ultimate loss for each accident-year period would remain the same. In practice, however, the ultimate loss (based on estimates) is exposed to fluctuations that reflect the increase in knowledge regarding the loss cases. The loss ratio presented above deviates from the reported loss ratio because the ultimate loss in the table above is based on the sum of the payments plus the loss reserve, and not the incurred loss from the profit or loss account. This means that effects like changes in consolidated subsidiaries, foreign currency translation and reclassification of unwinding of discounted loss reserves are presented differently.
changes in reserves For loss and lae during 2013 As noted above, prior year loss and LAE reserves of the Allianz Group developed favorably during 2013 by € 1,689 mn net of reinsurance, representing 3.0 % of net reserves as of 31 December 2012. The following table provides a breakdown of these amounts by line of business.
D Consolidated Financial Statements 127 Consolidated Balance Sheets 128 Consolidated Income Statements 129 Consolidated Statements of Comprehensive Income 130 Consolidated Statements of Changes in Equity 131 Consolidated Statements of Cash Flows 134 Notes to the Consolidated Financial Statements
Motor For Motor, net loss and LAE reserves developed favorably during 2013 by € 748 mn, or 4.5 % of reserves at 31 December 2012. Favorable development was seen for different effects across several operating entities. The following subsidiaries were the largest contributors: € 274 mn at Allianz Italy. The reduction is due to the impact of claim initiatives being greater than expected as well as due to the introduction of more granular segmentation in the analysis.
€ 103 mn at Allianz Australia mainly related to a favorable court appeal and lower claims severity resulting from faster claims finalization.
€ 67 mn at Allianz Suisse. The favorable development of bodily injury claims continues based on active claims management, portfolio cleaning as well as a change in jurisdiction for whiplash injuries.
General Liability For General Liability, net loss and LAE reserves developed unfavorably during 2013 by € 40 mn, or 0.4 % of reserves at 31 December 2012. This overall minor development consists of several offsetting developments at different operating entities. Unfavorable development was observed at Allianz Italy mainly due to the introduction of a more granular segmentation in the analysis and at Fireman’s Fund Insurance Company mainly due to a large loss. Offsetting effects were noted at Allianz United Kingdom and for large losses at Allianz France.
Credit Insurance Credit Insurance is underwritten in the Allianz Group by Euler Hermes. During 2013, Euler Hermes experienced a favorable development of € 152 mn net of reinsurance or 15.0 % of reserves at 31 December 2012, mainly driven by a better than expected development of the previous years claims in almost all regions where Euler Hermes operates.
Allianz Global Corporate and Specialty Allianz Global Corporate and Specialty (AGCS) is the Allianz Group’s global carrier for corporate and specialty risks. Overall AGCS experienced € 257 mn of favorable development in 2013 net of reinsurance, or 4.1 % of net reserves as at 31 December 2012.
asbestos and environmental (a & e) loss reserves There are significant uncertainties in estimating A & E reserves for loss and LAE. Reserves for asbestos-related illnesses and environmental clean up losses cannot be estimated using traditional actuarial techniques due to the long latency period and changes in the legal, socio-economic and regulatory environment.
Case reserves are established when sufficient information is available to indicate the involvement of a specific insurance policy. In addition, IBnR reserves are established to cover additional exposures on both known and not yet reported claims. To the extent possible, A & E loss reserve estimates are based not only on claims reported to date, but also on a survey of policies that may be exposed to claims reported in the future (i.e. an exposure analysis).
While the U.S. A & E claims still represent a majority of the total A & E claims reported to the Allianz Group, the insurance industry is facing an increased prominence in exposures to A & E claims on a global basis. The Allianz Group continues to monitor these A & E exposures. During 2013, claim payments of € 282 mn and changes from claims development and foreign exchange of € 73 mn reduced A & E liabilities from € 3,066 mn to € 2,711 mn.
gross and net reserves For loss and lae For a & e claims € mn as of 31 December 2013 2012 a & e net reserves 2,303 2,537 a & e gross reserves 2,711 3,066 As percentage of the Allianz Group’s Property-Casualty gross reserves 4.8 % 4.9 %
change in a & e gross reserves For loss and loss adjustment expenses € mn
Aggregate policy reserves 365,519 350,244 Reserves for premium refunds 37,772 40,031 Other insurance reserves 781 710 aggregate policy reserves changes in aggregate policy reserves € mn
As of 1 January 350,244 338,318 Foreign currency translation adjustments (3,441) (189) Changes in the consolidated subsidiaries of the Allianz Group 168 – Changes recorded in the consolidated income statement 4,827 4,613 Premiums collected 18,833 17,467 Separation of embedded derivatives 960 171 Interest credited 4,163 4,790 Dividends allocated to policyholders 1,360 1,506 Releases upon death, surrender and withdrawal (13,527) (15,334) Policyholder charges (1,292) (1,464) Portfolio acquisitions and disposals (383) (91) Other changes 400 457 Reclassification of discounted loss reserves 1 3,207 – As of 31 December 365,519 350,244 1 Effective 1 January 2013, the Allianz Group changed its presentation of discounted loss reserves in the consolidated balance sheet from the line item “Reserves for loss and loss adjustment expenses” to the line item “Reserves for insurance and investment contracts”. For further information please see note 4.
As of 31 December 2013, participating life business represented approximately 56 % (2012: 56 %) of the Allianz Group’s gross insurance in force. During the year ended 31 December 2013, participating policies represented approximately 65 % (2012: 65 %) of gross statutory premiums written and 64 % (2012: 63 %) of life premiums earned.
discounting oF reserves For loss and loss adjustment expenses As of 31 December 2013 and 2012, the Allianz Group’s consolidated Property-Casualty reserves included discounted reserves of € 3,207 mn and € 3,197 mn, respectively.
In general, reserves for loss and loss adjustment expenses are not discounted, except when payment amounts are fixed and timing is reasonably determinable.
The following table shows, by line of business, the carrying amounts of reserves for loss and LAE that have been discounted, and the interest rates used for discounting for the years ended 31 December 2013 and 2012.
Discounted reserves 1 Amount of the discount 1 Interest rate used for discounting 2 1 Prior year figures adjusted due to a correction of the determination of discounted reserves. 2 The range of interest rates is the result of the presentation of the above information by line of business thus each line reflecting interest rates used in various countries. Overall, due to the low interest rate environment, interest rates used for discounting reduced.
Furthermore, all of the Allianz Group’s annuity policies issued in the United States meet the criteria for classification as insurance contracts under IFRS 4, because they include options for contract holders to elect a life-contingent annuity. These contracts currently do not expose the Allianz Group to significant longevity risk, nor are they expected to do so in the future, as the projected and observed annuitization rates are very low. Additionally, many of the Allianz Group’s traditional contracts issued in France and Italy do not incorporate significant insurance risk, although they are accounted for as insurance contracts because of their discretionary participation features. Similarly, a significant portion of the Allianz Group’s unitlinked contracts in France and Italy do not incorporate significant insurance risk.
As a result of the considerable diversity in types of contracts issued, including the offsetting effects of mortality risk and longevity risk inherent in a combined portfolio of life insurance and annuity products, and the geographic diversity of the Allianz Group’s Life/ Health business segment, as well as the substantial level of policyholder participation in mortality/morbidity risk in certain countries in Western Europe, the Allianz Group does not believe its Life/Health segment has any significant concentrations of insurance risk, nor does it believe its net income or shareholders’ equity is highly sensitive to insurance risk.
The Allianz Group’s Life/Health business segment is exposed to significant investment risk as a result of guaranteed minimum interest rates included in most of its non-unit-linked contracts. The weighted average guaranteed minimum interest rates of the Allianz Group’s largest operating entities in the business segment Life/ Health (comprising 87 % of non-unit-linked reserves in both 2013 and 2012) can be summarized by country as follows: D Consolidated Financial Statements 127 Consolidated Balance Sheets 128 Consolidated Income Statements 129 Consolidated Statements of Comprehensive Income 130 Consolidated Statements of Changes in Equity 131 Consolidated Statements of Cash Flows 134 Notes to the Consolidated Financial Statements
Annual Report 2013 Allianz Group190 21 – Financial liabilities for unit-linked contracts changes in Financial liabilities For unit-linked insurance contracts and unit-linked investment contracts € mn
Provisions Pensions and similar obligations 7,594 8,069 Employee related 2,104 2,100 Share-based compensation plans 685 558 Restructuring plans 214 304 Loan commitments 42 67 Contingent losses from non-insurance business 130 166 Other provisions 1,617 1,632
Deposits retained for reinsurance ceded 1,874 1,834 Derivative financial instruments used for hedging that meet the criteria for hedge accounting and firm commitments 158 462 Financial liabilities for puttable equity instruments 3,064 2,601 Other liabilities 6,514 6,270
Contractual interest rate 0.40 % – – – – – – –
Current interest rate – – – – – 0.53 % – –
Certificated liabilities Floating rate – – – – – – – 25 Current interest rate – – – – – – – –
3 Change due to the issuance of senior bonds in the amount of € 2.1 Bn in the first quarter of 2013 and the repayment of a € 1.5 Bn bond in the first quarter of 2013.
Foreign currency translation adjustments (3,312) (2,073) Unrealized gains and losses (net) 2 6,741 10,122
Non-controlling interests 2,765 2,575 1 As of 31 December 2013, includes € (220) mn (2012: € (218) mn) related to treasury shares. 2 As of 31 December 2013, includes € 203 mn (2012: € 256 mn) related to cash flow hedges.
authorized capital As of 31 December 2013, Allianz SE had authorized capital for the issuance of 214,843,750 shares until 4 May 2015, with a notional amount of € 550 mn (Authorized Capital 2010/I). The shareholders’ subscription rights can be excluded for capital increases against contribution in kind. For a capital increase against contributions in cash, the shareholders ’ subscription rights can be excluded: (i) for fractional amounts, (ii) if the issue price is not significantly below the market price and the shares issued under exclusion of the subscription rights pursuant to § 186 (3) sentence 4 of the German Stock Corporation Law (Aktiengesetz) do not exceed 10 % of the share capital, (iii) to the extent necessary to grant a subscription right for new shares to the holders of bonds that carry conversion or option rights or provide for
Contractual interest rate – – – – – 5.43 % – –
3 Change due to redemption of a USD 2.0 Bn bond in the second quarter of 2013 and the issuance of a € 1.5 Bn subordinated bond in the fourth quarter of 2013.
4 € 1.5 Bn subordinated bond called for redemption effective 15 January 2014.
Further, as of 31 December 2013, Allianz SE had conditional capital totaling € 250 mn (97,656,250 shares) (Conditional Capital 2010). This conditional capital increase will only be carried out if conversion or option rights attached to bonds which Allianz SE or its Group companies have issued against cash payments according to the resolution of the Annual General Meeting (AGm) on 5 May 2010, are exercised or the conversion obligations under such bonds are fulfilled, and only insofar as no other methods are used in serving these rights.
All shares issued during the years ending 31 December 2013 and 2012 are qualifying shares from the beginning of the year of issue.
dividends For the year ending 31 December 2013, the Board of Management will propose to shareholders at the Annual General Meeting the distribution of a dividend of € 5.30 per qualifying share. For the year ended 31 December 2012, Allianz SE paid a dividend of € 4.50 per qualifying share.
non-controlling interests non-controlling interests € mn as of 31 December 2013 2012
Unrealized gains and losses (net) 93 135 Share of earnings 348 327 Other equity components 2,324 2,113 capital requirements The Allianz Group’s capital requirements are primarily dependent on the type of business that it underwrites, the industry and geographic locations in which it operates and the allocation of the Allianz Group’s investments. During the Allianz Group’s annual planning dialogues with its operating entities, capital requirements are determined through business plans regarding the levels and timing of capital expenditures and investments. Regulators impose minimum capital requirements at the level of the Allianz Group’s operating entities and the Allianz Group as a whole.
As of 31 December 2013, the Allianz Group’s eligible capital for the solvency margin, required for the insurance segments and the Asset Management and Banking business, was € 46.5 Bn (2012 as published: € 48.4 Bn) including off-balance sheet reserves 1 of € 2.3 Bn (2012: € 2.2 Bn), surpassing the minimum legally stipulated level by € 20.9 Bn (2012: € 23.8 Bn). This margin resulted in a preliminary cover ratio of 182 % (2012 as published: 197 %) as of 31 December 2013. The decrease in the cover ratio was mainly driven by an approximately 16 %-points decrease due to amendments to IAS 19.
In addition to regulatory capital requirements, Allianz SE also uses an internal risk capital model to determine how much capital is required to absorb any unexpected volatility in results of operations and to steer its operations.
Going forward, with the planned introduction of Solvency II in January 2016, the Allianz Group expects the Solvency II rules to become the binding regulatory constraint for the Group.
Insurance subsidiaries of the Allianz Group including Allianz SE prepare individual financial statements based on local laws and regulations. These laws establish to some extent additional restrictions on the minimum level of capital and the amount of dividends that may be paid to shareholders. The respective local minimum capital requirements are based on various criteria including, but not limited to, volume of premiums written or claims paid, amount of insurance reserves, investment risks, mortality risks, credit risks, underwriting risks and off-balance sheet risks.
As of 31 December 2013, the Allianz Group’s insurance subsidiaries were in compliance with all applicable regulatory solvency and capital adequacy requirements.
Annual Report 2013 Allianz Group 197 28 – Income from financial assets and liabilities carried at fair value through income (net)
Income (expenses) from financial assets and liabilities held for trading (net) 33 (567) – 30 5 (499) Income (expenses) from financial assets and liabilities designated at fair value through income (net) 11 339 62 1 (2) 411 Income (expenses) from financial liabilities for puttable equity instruments (net) (2) (197) (49) – – (248) Foreign currency gains and losses (net) (92) (1,377) – (37) – (1,506)
foreign currency gains and losses (net) Foreign currency gains and losses are reported within income from financial assets and liabilities carried at fair value through income (net). These foreign currency gains and losses arise subsequent to initial recognition on all assets and liabilities denominated in a foreign currency that are monetary items. This excludes exchange differences arising on financial assets and liabilities measured at fair value through profit or loss, which do not have to be disclosed separately.
The Allianz Group uses freestanding derivatives, included in the line item income (expenses) from financial assets and liabilities held for trading (net), to hedge against foreign currency fluctuations. For these derivatives, income in the amount of € 653 mn (2012: € 20 mn) was recognized for the year ended 31 December 2013.
2 During the year ended 31 December 2013, includes no realized losses from the disposal of subsidiaries (2012: € 8 mN).
ProPerty-casualty Fees from credit and assistance business 753 721 Service agreements 473 443 Investment advisory – 1 life/health Service agreements 75 69 Investment advisory 571 465 asset management Management fees 7,317 6,528 Loading and exit fees 715 635 Performance fees 510 766 corPorate and other Service agreements 62 19 Investment advisory and banking activities 625 595 31 – Other income other income € mn
Annual Report 2013 Allianz Group 199 32 – Income and expenses from fully consolidated private equity investments income and exPenses from fully consolidated Private equity investments € mn
Expenses Cost of goods sold (219) (250) General and administrative expenses (492) (523) Interest expenses (32) (41)
1 The presented subtotal for expenses and total income and expenses from fully consolidated private equity investments for the year ended 31 December 2013 differs from the amounts presented in the “Consolidated Income Statements” and in “Total revenues and reconciliation of Operating profit (loss) to Net income (loss)”. This difference is due to a consolidation effect of € 2 mN (2012: € (33) mN) for the year ended 31 December 2013. This consolidation effect results from the deferred policyholder participation, recognized on the result from fully consolidated private equity investments within operating profit in the Life/Health segment, that was reclassified into expenses from fully consolidated private equity investments in non-operating profit to ensure a consistent presentation of the Allianz Group‘s operating profit.
Claims and insurance benefits paid (31,235) (20,215) 32 (51,418) Change in loss and loss adjustment expenses 1,589 (353) 4 1,240
Ceded Claims and insurance benefits paid 2,255 462 (26) 2,691 Change in loss and loss adjustment expenses (322) 10 (3) (315)
Net Claims and insurance benefits paid (28,980) (19,753) 6 (48,727) Change in loss and loss adjustment expenses 1,267 (343) 1 925
Claims and insurance benefits paid (30,148) (20,529) 25 (50,652) Change in loss and loss adjustment expenses (689) (411) 8 (1,092)
Ceded Claims and insurance benefits paid 2,321 479 (22) 2,778 Change in loss and loss adjustment expenses 25 75 (7) 93
Net Claims and insurance benefits paid (27,827) (20,050) 3 (47,874) Change in loss and loss adjustment expenses (664) (336) 1 (999)
34 – Change in reserves for insurance and investment contracts (net)
Other insurance reserves 7 (208) – (201) Expenses for premium refunds (161) (5,959) (46) (6,166)
Ceded Aggregate policy reserves 3 140 – 143 Other insurance reserves – 9 – 9 Expenses for premium refunds (1) 7 – 6
Other insurance reserves 7 (199) – (192) Expenses for premium refunds (162) (5,952) (46) (6,160)
Additions to allowances including direct impairments (166) (207) Amounts released 62 77 Recoveries on loans previously impaired 18 19 37 – Impairments of investments (net)
Investments in associates and joint ventures 1 (108) (23) Real estate held for investment (55) (48) Loans and advances to banks and customers (24) (58) Non-current assets classified as held for sale (31) (3)
Investment management expenses (527) (525) Depreciation of real estate held for investment (211) (190) Other expenses from real estate held for investment (167) (161)
Commissions and profit received on reinsurance business ceded 67 110 Deferrals of acquisition costs 2,980 2,790 Amortization of deferred acquisition costs (2,571) (2,241)
Realized losses from disposals of real estate held for own use (2) (3) Expenses from alternative investments (85) (88)
During the year ended 31 December 2013, current income taxes included expenses of € 138 mn (2012: € 264 mn) related to prior years.
In the tax reconciliation for 2012, the other effects of € 539 mn include € 373 mn current and deferred taxes for prior years and a oneoff tax expense from a tax law change in France of € 64 mn.
The tax rates used in the calculation of the Allianz Group’s deferred taxes are the applicable national rates, which in 2013 ranged from 10.0 % to 40.0 %. Changes to tax rates already adopted on 31 December 2013 are taken into account.
tax losses Carried forward Tax losses carried forward at 31 December 2013 of € 9,885 mn (2012: € 10,894 mn) resulted in recognition of deferred tax assets to the extent that there is sufficient certainty that the unused tax losses will be utilized. € 8,848 mn (2012: € 9,779 mn) of the tax losses carried forward can be used without time limitation.
freestanDing Derivative financial instruments As of 31 December 2013, freestanding derivatives, included in the line item financial assets and liabilities held for trading, had a notional principal amount of € 233.0 bn (2012: € 179.0 bn), as well as a positive fair value of € 2.0 bn (2012: € 1.9 bn) and a negative fair value of € 6.0 bn (2012: € 5.4 bn). Out of the total allocated to the freestanding derivatives, € 115.6 bn (2012: € 91.7 bn) of the notional principal relate to annuity products. These products are equity-indexed or contain certain embedded options or guarantees which are considered embedded derivatives under IAS 39. For these embedded derivatives, the notional principal amounts included in the table refer to the account value of the related insurance contracts. The total negative fair value of these embedded derivatives amounts to € 4.2 bn (2012: € 4.4 bn). Further information on the fair value measurement of these derivatives, can be found in note 44 – Financial instruments and fair value measurement.
Cash flow hedges During the year ended 31 December 2013, cash flow hedges were used to hedge the exposure to the variability from cash flows arising from interest rate or exchange rate fluctuations as well as inflation. As of 31 December 2013, the derivative instruments utilized had a total positive fair value of € 41 mn (2012: € 75 mn). Unrealized gains and losses (net) in shareholders’ equity decreased by € 53 mn (2012: increased by € 6 5 mn). Amounts accumulated in the other comprehensive income are reclassified to profit or loss in the periods when the hedged item affects profit or loss. This is the case when the forecast transactions that are hedged take place.
− Concentration of risks, − Quantifiable risks in the internal capital model including all subsections other than Business risk and Operational risk, − Liquidity risk.
If the fair value cannot be measured reliably, amortized cost is used as a proxy for determining fair values. As of 31 December 2013, fair values could not be reliably measured for equity investments with carrying amounts totaling € 214 mn (2012: € 223 mn). These investments are primarily investments in privately held corporations and partnerships. During the year ended 31 December 2013, such investments with carrying amounts of € 35 mn (2012: € 99 mn) were sold leading to gains of € 2 mn (2012: no gains or losses).
fair value hierarchy Assets and liabilities measured or disclosed at fair value in the consolidated financial statements are measured and classified in accordance with the fair value hierarchy in IFRS 13, which categorizes the inputs to valuation techniques used to measure fair value into three levels.
Quoted prices in active markets – Fair value level 1: The level 1 inputs of financial instruments that are traded in active markets are based on unadjusted quoted market prices or dealer price quotations on the last exchange trading day prior to or at the balance sheet date, if the latter is a trading day.
Furthermore, level 2 applies if the market for a financial instrument is not active or when the fair value is determined by using valuation techniques based on observable input parameters. Such market inputs are observable substantially over the full term of the asset or liability and include references to formerly quoted prices for identical instruments from an active market, quoted prices for identical instruments from an inactive market, quoted prices for similar instruments from active markets and quoted prices for similar instruments from inactive markets. Market observable inputs also include interest rate yield curves, volatilities and foreign currency exchange rates.
The following tables present the fair value hierarchy for financial instruments carried at fair value in the consolidated balance sheets as of 31 December 2013 and 2012.
Financial liabilities for unit-linked contracts 78,230 2,655 179 81,064 Derivative financial instruments and firm commitments included in other liabilities – 158 – 158 Financial liabilities for puttable equity instruments 2,958 18 88 3,064
Government and agency mortgage-backed securities (residential and commercial) 37 4,278 – 4,315 Corporate mortgage-backed securities (residential and commercial) 26 11,817 30 11,873 Other asset-backed securities 80 2,465 236 2,781 Government and government agency bonds 138,690 21,915 38 160,643
Financial assets for unit-linked contracts 68,508 2,504 185 71,197 Derivative financial instruments and firm commitments included in other assets – 129 – 129 financial liabilities Financial liabilities held for trading
Valuation methodologies of financial instruments carried at fair value The Allianz Group follows the new interpretation of IFRS 13 (IDW RS HFA 47) by the Institute of Public Auditors in Germany (IDW) and classifies composite prices in level 2 of the fair value hierarchy. As the Allianz Group uses prices provided by pricing agencies on a consensus level, the Allianz Group shifted most fixed income securities from level 1 to level 2 due to this new interpretation.
− Cost approach: Amount that would be currently required to replace the service capacity of an asset (replacement cost).
Available-for-sale investments – Equity securities For level 2, the fair value is mainly determined using the market approach or net asset value techniques for funds. For certain pri vate equity investments, the funds are priced based on transaction prices using the cost approach. As there are only few holders of these funds, the market is not liquid and transactions are only known to participants. For level 3, the fair value is mainly determined using net asset values. The net asset values are based on the fair value meas urement of the underlying investments and are mainly provided by fund managers. For certain level 3 equity securities, the invested capital is considered to be a reasonable proxy for the fair value.
Financial assets for unit-linked contracts For level 2, the fair value is determined using the market or the income approach. For the income approach, primary observable inputs include yield curves observable at commonly quoted intervals. For level 3, the fair value is mainly determined based on the net asset value provided by third-party vendors.
Derivative financial instruments and firm commitments included in other assets The fair value of the derivatives is mainly determined based on the income approach using present value techniques. Primary inputs include yield curves observable at commonly quoted intervals. The derivatives are mainly used for hedging purposes. Certain derivatives are priced by Bloomberg functions, such as Black-Scholes Option Pricing or the swap manager tool.
Financial liabilities held for trading – Other trading liabilities The fair value is mainly determined based on the income approach using present value techniques. Primary inputs comprise swap curves, share prices and dividend estimates.
Derivative financial instruments and firm commitments included in other liabilities For level 2, the fair value is mainly determined using the income approach. Primary inputs include interest rates and yield curves observable at commonly quoted intervals.
At the end of 2013, the Allianz Group follows the new interpretation of IFRS 13 (IDW RS HFA 47) by the Institute of Public Auditors in Germany (IDW) and transfers most fixed income securities from level 1 to level 2. Re-transfers in subsequent reporting periods are possible given that the interpretation is still under discussion.
After a reassessment of the input parameters, € 735 mn of available -for-sale securities were transferred from level 2 to level 3 in the fourth quarter of 2013.
Variable annuities 112 Deterministic discounted cash flow Surrenders 0.5 % – 35 %
Corporate mortgage-backed securities (residential and commercial) 30 – 2 (4) 3 3 – (1) – 33 –
fair value measurement on a non-recurring basis Certain financial assets are measured at fair value on a non-recurring basis when events or changes in circumstances indicate that the carrying amount may not be recoverable.
fair value information about financial assets anD liabilities not carrieD at fair value fair value hierarchy as of 31 December 2013 (items not carrieD at fair value)
Level 3 – Non-market observable inputs Total fair value financial assets Held-to-maturity investments 981 3,664 2 4,647 Investments in associates and joint ventures 393 54 3,227 3,674 Real estate held for investment – – 15,625 15,625 Loans and advances to banks and customers 402 90,443 38,683 129,528 Real estate held for own use – – 3,626 3,626 financial liabilities Liabilities to banks and customers 6,588 1,977 14,717 23,282
Loans and advances to banks and customers For loans and advances to banks and customers, quoted market prices are rarely available. Level 1 consists mainly of highly liquid advances, e. g. short-term investments. The fair value for these assets in level 2 and level 3 is mainly derived based on the income approach using deterministic discounted cash flow models.
Investments in associates and joint ventures For level 2, fair values are mainly derived based on the market approach using market multiples derived from a set of comparables as the valuation technique. For level 3, fair values are mainly based on an income approach using a discounted cash flow method or net asset values as provided by third-party vendors.
As of 31 December 2012, the carrying amount and fair value of the CDOs was € 370 mn and € 366 mn, respectively. As of 31 December 2013, the carrying amount and fair value of the CDOs was € 166 mn and € 156 mn, respectively. For the twelve months ended 31 December 2013, the net profit related to the CDOs was € 51 mn, which was primarily due to realized gains recognized in the third quarter as a result of the liquidation of two CDO tranches.
Reserves for loss and loss adjustment expenses 15,852 19,070 18,522 53,444 Other liabilities 1 For materiality reasons, the carrying amount is split up into the different contractual maturities. 2 Including investment contracts with policyholders and financial liabilities for unit-linked contracts. 3 The amount of € 3,003 mn is gross of € 60 mn related to subleases, which represent cash inflow to the
Future policy benefits Reserves for insurance and investment contracts of € 1,155,006 mn presented in the table include contracts where the timing and amount of payments are considered fixed and determinable, and contracts which have no specified maturity dates and may result in a payment to the contract beneficiary depending on mortality and morbidity experience and the incidence of surrenders, lapses or maturities. Furthermore, the amounts presented in the table above
Information on the remuneration of Board members and transactions with these persons can be found in the Remuneration Report, starting on page 37.
are undiscounted and therefore exceed the reserves for insurance and investment contracts presented in the consolidated balance sheet that reflect the time value of the money.
For contracts without fixed and determinable payments, the Allianz Group has made assumptions to estimate the undiscounted cash flows of contractual policy benefits including mortality, morbidity, interest crediting rates, policyholder participation in profits and future lapse rates. These assumptions represent current best estimates and may differ from the estimates originally used to establish the reserves for insurance and investment contracts as a result of the lock-in of assumptions on the issue dates of the contracts as required by the Allianz Group’s established accounting policy. The effect of discounting and the differences between locked-in and best estimate assumptions is € 516,977 mn. For further information, see note 2 to the consolidated financial statements. Due to the uncertainty of the assumptions used, the amount presented could be materially different from the actual incurred payments in future periods.
Transfers of financial asseTs As of 31 December 2013, the Allianz Group substantially retained all the risks and rewards out of the ownership of transferred assets. There were no transfers of financial assets that were derecognized in full or partly, in which Allianz continues to control the transferred assets. Transfers of financial assets mainly relate to securities lending and repurchase agreement transactions. Transferred financial assets in repurchase agreement and securities lending transactions are mainly available-for-sale debt and equity securities for which substantially all of the risks and rewards are retained. As of 31 December 2013, the carrying amount of the assets transferred for securities lending transactions amounted to € 6,836 mn (2012: € 1,531 mn). For repurchase agreements, the carrying amount of the assets transferred amounted to € 991 mn (2012: € 952 mn) and the carrying amount of the associated liabilities amounted to € 1,001 mn (2012: € 951 mn). Assets pledged and collateral are described in note 46 – Contingent liabilities, commitments, guarantees, and assets pledged and collateral.
The U.S. Department of Justice (DOJ) is conducting an investigation into whether certain employees of Fireman’s Fund Insurance Company (FFIC), a subsidiary of Allianz SE, engaged in violation (criminal or civil) of the False Claims Act in connection with FFIC’s involvement as a provider of federal crop insurance from 1997 to 2003. The investigation concerns the issue of whether FFIC employees submitted false claims to the government through various practices, including backdating and inappropriately designating new producer status. Two former FFIC claims employees and one contract adjuster have pled guilty to assisting farmers in asserting fraudulent crop claims. The DOJ and FFIC are in negotiations to reach a final resolution of this matter. The outcome cannot be predicted at this stage.
Allianz Life Insurance Company of North America (Allianz Life) has been named as a defendant in class action lawsuits in connection with the marketing and sale of deferred annuity products. Two of those lawsuits are pending as certified class actions in California. Those two lawsuits have been consolidated and the complaints allege generally that the defendant engaged in, among other practices, deceptive trade practices and misleading advertising in connection with the sale of such products. The ultimate outcome of these cases cannot yet be determined.
In November 2013, Allianz SE reached an agreement with the Italian Tax Authority closing a controversy regarding several independent tax issues. The result of the settlement is covered by Allianz Group’s provision and has therefore no negative impact on its income statement. The settlement includes an alleged tax liability of Allianz SE of € 1.4 bn including penalties and interest, as declared by a tax assessment notice from the Italian Tax Authority received by Allianz SE in January 2013. The Italian Tax Authority asserted that the combination of the businesses in Italy following the cross-border merger of the Italian Riunione Adriatica di Sicurtà (RAS) with and into the former Allianz AG in 2006, which led to the change of legal form into Allianz SE, represented a taxable event.
With the sale of Dresdner Bank becoming effective on 12 January 2009, Allianz terminated the indemnification undertaking issued in 2001 in favor 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.
As of 31 December 2013, the future minimum lease payments under non-cancelable operating leases were as follows: future minimum lease payments € mn
For the year ended 31 December 2013, rental expenses totaled € 350 mn (2012: € 325 mn), net of sublease rental income received of € 11 mn.
Other commitments Other principal commitments of the Allianz Group include the following: Pursuant to §§ 124 ff. of the German Insurance Supervision Act (“Versicherungsaufsichtsgesetz” – VAG), a mandatory insurance guarantee scheme (“Sicherungsfonds”) for life insurers is implemented in Germany. Each member of the scheme is obliged to make annual contributions to the scheme as well as special payments under certain circumstances. The exact amount of obligations for each member is calculated according to the provisions of a Federal Regulation (“Sicherungsfonds-Finanzierungs-Verordnung (Leben)”
In addition, EdW may levy special contributions from its members, if the funds available to EdW are insufficient to satisfy all eligible claims. Special contributions are determined by reference to the preceding yearly contribution. For 2013, the yearly contributions for above-mentioned entities have been determined by notification from the EdW in the amount of € – mn (2012: € 1 mn). With respect to the insolvency of Phoenix Kapitaldienst GmbH, the German Federal Financial Supervisory Authority (“Bundesanstalt für Finanzdienstleistungsaufsicht ” – BaFin) has determined that certain investor claims will be covered under the compensation scheme and special contributions have been levied. In this regard, special contributions were notified by EdW to above-mentioned entities in 2013 in the amount of € 2 mn (2012: € 7 mn). The above mentioned entities have appealed the special contributions. For received, but not yet paid
guarantees A summary of guarantees issued by the Allianz Group by maturity and related collateral-held is given below: guarantees € mn
Nearly all customers of the letters of credit have no external credit rating, whereas nearly all customers of the indemnification contracts have an external credit rating of A.
47 – Pensions and similar obligations overview Retirement benefits in the Allianz Group, which are granted to employees and in Germany also to agents, are either in the form of defined benefit or defined contribution plans. For defined benefit plans, the beneficiary is granted a defined benefit by the employer or via an external entity. In contrast to defined contribution arrangements, the future cost to the employer of a defined benefit plan is not known with certainty in advance.
Germany Germany accounts for 73.8 % of the Allianz Group’s defined benefit obligation and 62.3 % of the Allianz Group’s plan assets.
Most active German employees participate in a contributionbased system using different vehicles to cover the base salary both below and above the German social security ceiling. The Allianz Versorgungskasse VVaG (AVK) financed through employee contributions and the Allianz Pensionsverein e.V. (APV) financed by the employer, provide pension benefits for the base salary up to the German social security ceiling. Both plans are wholly funded. AVK is subject to German insurance regulation.
Annual Report 2013 Allianz Group 223 account as appropriate. In the bPV generally the accruals after 2005 are wholly funded, whereas the grandfathered plan is funded to a minor extent. The assets, which are allocated to a trust (Methusalem Trust e.V.), are managed by a board of trustees.
In the case of death, a pension may be paid to dependents. Surviving dependents normally receive 60 % (widow/widower) and 20 % (per child) of the original employee’s pension, in total not to exceed 100 %.
Switzerland Switzerland accounts for 5.1 % of the Allianz Group’s defined benefit obligation and 9.1 % of the Allianz Group’s plan assets.
Net amount recognized as of 1 January 8,010 5,493 Changes in the consolidated subsidiaries of the Allianz Group 6 26 Foreign currency translation adjustments (13) 13 Recognized expenses 661 497 oci recognition (before deferred taxes) (522) 2,630 Net amount recognized as of 31 December 7,500 8,010 thereof assets (94) (59) thereof liabilities 7,594 8,069 1 Please refer to note 4 Recently adopted and issued accounting pronouncements and changes in the presentation of the consolidated financial statements for further details.
Settlement gain/(loss) - 1 Settlement payments (1) (21) Defined benefit obligation as of 31 December 1 19,110 19,161 change in fair value of plan assets Fair value of plan assets as of 1 January 11,206 10,136 Interest income on plan assets 366 483 Return on plan assets greater/ (less) than interest income on plan assets 46 458 Employer contributions 364 372 Plan participants’ contributions 106 97 Foreign currency translation adjustments (70) 35
The range for the sensitivity calculations was derived by analyzing the average volatility over the past 5 years.
Due to a well diversified portfolio of more than 140,000 plan participants, there is no reasonable uncertainty of future cash flows expected which could have an impact on the liquidity of the Allianz Group.
Plan assets do not include any real estate used by the Allianz Group and include only € 4.8 mn of own transferable financial instruments.
Contributions For the year ending 31 December 2014, the Allianz Group expects to contribute € 278 mn to its defined benefit plans and to pay € 321 mn directly to participants of its defined benefit plans.
The SAR are accounted for as cash settled plans by the Allianz Group. Therefore, the Allianz Group accrues the fair value of the SAR as a compensation expense over the vesting period. Upon vesting, any changes in the fair value of the unexercised SAR are recognized as a compensation expense. During the year ended 31 December 2013, the Allianz Group recognized compensation expenses related to the unexercised SAR of € 62 mn (2012: € 59 mn).
As of 31 December 2013, the Allianz Group recorded a provision of € 86 mn (2012: € 83 mn) in other liabilities for the unexercised SAR.
In addition, upon death of a plan participant, a change of control or notice for operational reasons, the RSU vest immediately and will be exercised by the company.
In addition, upon the death of a plan participant, a change of control or notice for operational reason, the RSU vest immediately and will be exercised by the company.
The following table provides the assumptions used in calculating the fair value of the RSU at grant date: assumptions of aei plans 1 The rSU 2014 are deemed to have been granted to participants as part of their 2013 remuneration. Consequently, the assumptions for rSU grants delivered in March 2014 are based on best estimation.
The RSU are accounted for as cash settled plans as the Allianz Group intends to settle in cash. Therefore, the Allianz Group accrues the fair value of the RSU as a compensation expense over the service period of one year and afterwards over the vesting period. During the year ended 31 December 2013, the Allianz Group recognized a compensation expense related to the AEI plans of € 132 mn (2012: € 79 mn).
Annual Report 2013 Allianz Group 227 share-baseD compensation plans of subsiDiaries of the allianz group pimco llc Class B Unit Purchase Plan When acquiring Allianz Global Investors of America L.P. ( AllianzGI L.P.) during the year ended 31 December 2000, Allianz SE caused Pacific Investment Management Company LLC (PImCO LLC), a subsidiary of AllianzGI L.P., to enter into a Class B Purchase Plan (the “Class B Plan”) for the benefit of members of the management of PImCO LLC. The plan participants of the Class B Plan have rights to a 15 % priority claim on the adjusted operating profits of PImCO LLC.
Therefore, the Allianz Group accrues the fair value of the Class B equity units as a compensation expense over the vesting period. Upon vesting, any changes in the fair value of the Class B equity units are recognized as a compensation expense. During the year ended 31 December 2013, the Allianz Group recognized a compensation expense related to the Class B equity units of € 16 mn (2012: € 62 mn). In addition, the Allianz Group recognized an expense related to the priority claim on the adjusted operating profits of PImCO LLC of € 16 mn (2012: € 32 mn). The Allianz Group called in total 224 Class B equity units during the year ended 31 December 2013. The total amount paid related to the call of the Class B equity units was € 10 mn.
pimco llc Class M-unit Plan In 2008, Allianz Global Investors of America L.P. ( AllianzGI L.P.) launched a new management share-based payment incentive plan for certain senior level executives and affiliates of PImCO LLC. Participants in the plan are granted options to acquire a new class of equity instruments (M-units), which vest in one-third increments on approx-imately the third, fourth and fifth anniversary of the option grant date. Upon vesting, options will be automatically exercised in a cashless transaction, but only if they are in the money. Participants may elect to defer the receipt of M-units through the M-unit Deferral Plan until termination of their service at a maximum. With the M-unit Plan, participants can directly participate in PImCO’S performance. Class
M-units are non-voting common equity with limited information rights. They bear quarterly distributions equal to a pro-rata share of PImCO’S net distributable income. Deferred M-units have a right to receive a quarterly cash compensation equal to and in lieu of quarterly dividend payments.
Weighted average fair value of options granted € 1,047.87 1,600.50 Assumptions: Expected term (years) 3.84 3.84
Expected dividend yield % 13.2 13.0 Risk free rate of return % 0.7 0.7
The number and weighted average exercise price of the M-options outstanding and exercisable are as follows: reconciliation of outstanDing m-options
The aggregate intrinsic value of share options outstanding was € 232 mn and € 175 mn for the years ended 31 December 2013 and 2012, respectively.
As of 31 December 2013, the M-options outstanding have an exercise price of between € 6,168.58 and € 17,158.10 and a weighted average remaining contractual life of 2.93 years.
During the year ended 31 December 2007, Allianz acquired all of the remaining AGF shares from non-controlling interests in the context of the Tender Offer and Squeeze-out. Under the terms of an agreement (the “Liquidity Agreement”) between 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 ratio representing the consideration proposed in the Tender Offer for each AGF share (€ 126.43) divided by the Allianz share price on 16 January 2007 (€ 155.72). This ratio is subject to adjustments in case of transactions impacting Allianz or AGF share capital or net equity. The cash settlement is based upon the initial offer proposed for each AGF share during the Tender Offer. As of 31 December 2007, all shares issued under these plans were fully vested and exercisable.
During the year ended 31 December 2013, the Allianz Group recognized total compensation expenses related to the modified share option plans of € 2 mn (2012: € 7 mn). As of 31 December 2013, the Allianz Group recorded a provision for these plans of € 8 mn (2012: € 9 mn).
employee stock purchase plans The Allianz Group offers Allianz SE shares in 19 countries to qualified employees at favorable conditions. The shares have a minimum holding period of 1 to 5 years. During the year ended 31 December 2013, the number of shares sold to employees under these plans was 565,643 (2012: 627,118). During the year ended 31 December 2013, the Allianz Group recognized the difference between the issue price charged to the subsidiaries of the Allianz Group and the discounted price of the shares purchased by employees, of € 7 mn (2012: € 6 mn) as compensation expenses.
other share option anD shareholDing plans The Allianz Group has other local share-based compensation plans, including share option and employee share purchase plans, none of which, individually or in the aggregate, are material to the consoli- dated financial statements. During the year ended 31 December 2013, the total expense recorded for these plans was € 4 mn (2012: € 2 mn).
As of 31 December 2013, the Allianz Group has provisions for restructuring resulting from a number of restructuring programs in various segments. These provisions for restructuring primarily include personnel costs, which result from severance payments for employee terminations, and contract termination costs, including those relating to the termination of lease contracts that will arise in connection with the implementation of the respective initiatives.
As of 1 January 304 280 New provisions 166 242 Additions to existing provisions 19 29 Release of provisions recognized in prior years (53) (55) Utilization of provisions via payments (104) (100) Utilization of provisions via transfers (116) (90) Foreign currency translation adjustments (2) (2) As of 31 December 214 304
allianz bank’s restructuring plan The Allianz Bank did not grow as profitably as expected in a highly competitive retail banking environment. As a result of this, Allianz Bank was closed on 30 June 2013. The closure of operations was executed swiftly. Mutual agreements were found with almost all employees affected by the restructuring. About 400 employees left the Group.
Restructuring charges of € 87 mn were recorded in 2013 for the closure of Allianz Bank. As of 31 December 2013, restructuring provisions of € 31 mn were recorded.
During the year ended 31 December 2013, restructuring charges of € 32 mn were recorded. As of 31 December 2013, restructuring provisions of € 31 mn were recorded.
During the year ended 31 December 2013, restructuring charges of € 30 mn were recorded. As of 31 December 2013, Allianz Italy recorded restructuring provisions of € 29 mn related to this plan.
allianz benelux’ restructuring plan Following the integration of Allianz Belgium and Allianz Nederland into a regional structure (Benelux), Allianz Benelux initiated a restructuring program in December 2013 to improve profitability and cost competitiveness. An organizational restructuring plan will be executed in order to eliminate redundancies between countries and improve efficiency. The program will result in a net reduction of headcount by about 100 full time equivalents (FTE). In addition, the program resulted in the write-off of certain assets.
During the year ended 31 December 2013, restructuring charges of € 29 mn were recorded. As of 31 December 2013, restructuring provisions of € 20 mn were recorded for this program.
In addition, clearly defined activities in the area of operational functions have been transferred to newly founded service companies with their own employees. From originally approximately 200 FTE affected by the program, a reduction of 80 FTE remains as of 31 December 2013.
During the year ended 31 December 2013, restructuring charges of € 1 mn were recorded. As of 31 December 2013, the Allianz Germany Group recorded restructuring provisions of € 29 mn related to this program.
effect of the reversal of Discounting For the year ended 31 December 2013, the effect of the reversal of discounting arising from the passage of time was € 4 mn (2012: € 9 mn).
Net income attributable to shareholders 5,996 5,231 Effect of potentially dilutive common shares (76) (33) Net income used to calculate diluted earnings per share 5,920 5,198
Weighted average number of common shares outstanding 453,297,832 452,666,296 Potentially dilutive common shares resulting from assumed conversion of: Share-based compensation plans 189,395 104,344 Weighted average number of common shares outstanding after assumed conversion 453,487,227 452,770,640
The Declaration of Compliance of the publicly traded group company Oldenburgische Landesbank AG was issued in December 2013 and was made available to the shareholders on a permanent basis.
Annual Report 2013 Allianz Group 231 principal accountant fees anD services KPMG AG Wirtschaftsprüfungsgesellschaft (KPMG AG) serves as the external auditing firm for the Allianz Group.
Fees billed by KPMG AG and affiliated entities, and KPMG AG and the worldwide member firms of KPMG International (KPMG) are dis­ closed in four categories: kpmg fees € mn kpmg worldwide thereof: kpmg ag and affiliated entities 1 1 As of 31 December 2013, KPMG AG and affiliated entities comprised KPMG operations in Belgium, Germany, Luxembourg, the Netherlands, Russia, Spain, Switzerland, Turkey, Ukraine and the United Kingdom.
Tax fees KPMG fees for professional services, rendered for tax advice and tax compliance, amounted to € 4.8 Mn (2012: € 2.3 Mn) and resulted pri­ marily from tax advice.
All other fees KPMG invoiced the Allianz Group an aggregate of € 8.1 Mn (2012: € 2.2 Mn) for other products and services, which consisted primarily of services under the guidance of Allianz Group management and general consulting services.
remuneration for the BoarD of management As of 31 December 2013, the Board of Management is comprised of 11 members. The following values reflect the full Board of Manage­ ment active in the respective year.
The sum of the total remuneration of the Allianz SE Board of Management for 2013, excluding the notional accruals of the MTB 2013 – 15, amounts to € 31 Mn (2012 including the payment of the MTB 2010 – 12: € 53 Mn1).
The Equity­related remuneration is comprised in 2013 of 107,2162 (2012: 119,7433) Restricted Stock Units (RSU).
RSU with a total fair value of € 11.0 Mn (2012: € 10.5 Mn) were grant­ ed to the Board of Management for the year ended 31 December 2013.
In 2013, remuneration and other benefits totaling € 9 Mn (2012: € 7 Mn) were paid to retired members of the Board of Management and dependents. Reserves for current pensions and accrued pension rights totaled € 100 Mn (2012: € 105 Mn).
2 The relevant share price used to determine the final number of RSUs granted is only available after sign-off by the external auditors, thus numbers are based on a best estimate.
3 The disclosure in the Annual Report 2012 was based on a best estimate of the RSU grants. The figure shown here for 2012 now includes the actual fair value as of the grant date (7 March 2013). The value therefore differs from this disclosed last year.
127 Consolidated Balance Sheets 128 Consolidated Income Statements 129 Consolidated Statements of Comprehensive Income 130 Consolidated Statements of Changes in Equity 131 Consolidated Statements of Cash Flows 134 Notes to the Consolidated Financial Statements 233Annual Report 2013 Allianz Group
AZ-Argos 61 Vermögensverwaltungsgesellschaft mbH & Co. KG, Munich 100.0 AZ-Argos 64 Vermögensverwaltungsgesellschaft mbH & Co. KG, Munich 100.0 AZ-Argos 67 Vermögensverwaltungsgesellschaft mbH, Munich 100.0 AZ-Argos 68 Vermögensverwaltungsgesellschaft mbH, Munich 100.0 AZ-Argos 69 Vermögensverwaltungsgesellschaft mbH, Munich 100.0 AZ-GARI Vermögensverwaltungsgesellschaft mbH & Co. KG, Munich 100.0 AZL AI Nr. 1 GmbH, Munich 100.0 AZL PE Nr. 1 GmbH, Munich 100.0 AZRE AZD P&C Master Fund, Munich 100.0 4 AZS-Arges Vermögensverwaltungsgesellschaft mbH, Munich 100.0 AZ-SGD Private Equity Fonds 2 GmbH, Munich 100.0 AZ-SGD Private Equity Fonds GmbH, Munich 100.0 AZT Automotive GmbH, Ismaning 100.0 BCA Betriebs-Catering GmbH Verpflegungsdienste, Bad Soden am Taunus 100.0 Brahms Beteiligungs GmbH & Co. KG, Stuttgart 94.9 BrahmsQ Objekt GmbH & Co. KG, Stuttgart 95.0 Bürgel Wirtschaftsinformationen GmbH & Co. KG, Hamburg 50.1 Bürgel Wirtschaftsinformationen VerwaltungsGmbH, Hamburg 50.4 dbi-Fonds Ammerland, Frankfurt am Main 100.0 4 dbi-Fonds DAV, Frankfurt am Main 100.0 4 dbi-Fonds WE, Frankfurt am Main 100.0 4 Deutsche Lebensversicherungs-Aktiengesellschaft, Berlin 100.0 Donator Beratungs GmbH, Munich 100.0 Donator Beteiligungsverwaltung GmbH, Munich 100.0 ESA Cargo & Logistics GmbH, Bad Friedrichshall 100.0 esa EuroShip GmbH, Bad Friedrichshall 51.0 Euler Hermes Aktiengesellschaft, Hamburg 100.0 Euler Hermes Collections GmbH, Potsdam 100.0 Euler Hermes Deutschland Aktiengesellschaft, Hamburg 100.0 Euler Hermes Rating Deutschland GmbH, Hamburg 100.0 GA Global Automotive Versicherungsservice GmbH, Halle (Saale) 100.0 KVM ServicePlus - Kunden- und Vertriebsmanagement GmbH, Halle (Saale) 100.0 Mondial Kundenservice GmbH, Nuremberg 100.0 Münchener und Magdeburger Agrarversicherung Aktiengesellschaft, Munich 86.5 Münsterländische Bank Thie & Co. KG, Münster 100.0 My Finance Coach Stiftung GmbH, Munich 100.0 Objekt Burchardplatz GmbH & Co. KG, Stuttgart 100.0 Oldenburgische Landesbank Aktiengesellschaft, Oldenburg 90.2 PIMCO Deutschland GmbH, Munich 100.0 REC Frankfurt Objekt GmbH & Co. KG, Hamburg 80.0 REC Frankfurt zweite Objektverwaltungsgesellschaft mbH, Hamburg 60.0 RehaCare GmbH, Munich 100.0 risklab GmbH, Munich 100.0 Roland Holding GmbH, Munich 74.2 Selecta Deutschland GmbH, Bad Soden am Taunus 100.0 Selecta Holding GmbH, Bad Soden am Taunus 100.0 Signa 12 Verwaltungs GmbH, Düsseldorf 94.9 Spherion Beteiligungs GmbH & Co. KG, Stuttgart 94.9 Spherion Objekt GmbH & Co. KG, Stuttgart 100.0 UfS Beteiligungs-GmbH, Munich 100.0 Vereinte Spezial Krankenversicherung Aktiengesellschaft, Munich 100.0 VLS Versicherungslogistik GmbH, Berlin 100.0 Volkswagen Autoversicherung AG, Braunschweig 100.0
Other participations between 5 and 20 % of voting rights EXTREMUS Versicherungs-Aktiengesellschaft, Cologne 16.0 MLP AG, Wiesloch 8.9 Sana Kliniken AG, Ismaning 13.9
ForeiGn entities Consolidated affiliates 490 Fulton GP LLC, New York, NY 100.0 490 Fulton JV LP, New York, NY 96.5 490 Fulton REIT LP, New York, NY 100.0 490 Lower Unit GP LLC, New York, NY 100.0 490 Lower Unit LP, New York, NY 100.0 A.V.I.P. Assurance Vie de Prévoyance SA, Courbevoie 100.0 AB Servicios Selecta Espana S.L., Madrid 100.0 ACMAR SA, Casablanca 55.0 ACN 092 738 997 Pty Ltd., Milson's Point 100.0 Acropole Convertibles Monde, Paris 82.2 3 Administradora de Inversión Colseguros S.A., Bogotá D.C. 100.0 Advanz Fundo de Investimento Renda Fixa Crédito Privado, São Paulo 100.0 4 Aero-Fonte S.r.l., Catania 100.0 AGA Alarmcentrale NL B.V., Amsterdam 100.0 AGA Assistance (India) Private Limited, Gurgaon 100.0 AGA Assistance Australia Pty Ltd., Toowong 100.0 AGA Assistance Beijing Services Co. Ltd., Beijing 100.0 AGA Inc., Richmond, VA 100.0 AGA Insurance Broker (Thailand) Co. Ltd., Bangkok 100.0 AGA Service Company Corp., Richmond, VA 100.0 AGA Service Italia S.c.a.r.l., Milan 100.0 AGA Services (India) Private Limited, Gurgaon 100.0 AGA Services (Thailand) Co. Ltd., Bangkok 97.6 AGCS Marine Insurance Company, Chicago, IL 100.0 AGCS Resseguros Brasil S.A., Rio de Janeiro 100.0 AGF Balanced, Paris 100.0 3 AGF Benelux S.A., Luxembourg 100.0 AGF FCR, Paris 99.9 3 AGF Holdings (UK) Limited, Guildford 100.0 AGF Insurance Limited, Guildford 100.0 AGF Inversiones S.A., Buenos Aires 100.0 AGF Ras Holding B.V., Amsterdam 100.0 AGR Services Pte Ltd., Singapore 100.0 AIM Equity EMU 1, Paris 100.0 4 AIM Equity US, Paris 100.0 4 AIM Singapore Pte Ltd., Singapore 100.0 AIM Underwriting Limited, Toronto, ON 100.0 Allegiance Marketing Group LLC, North Palm Beach, FL 100.0 Allianz (UK) Limited, Guildford 100.0 Allianz Actio France, Paris 79.1 3 Allianz Actions Aéquitas, Paris 71.3 3 Allianz Actions Emergentes, Paris 66.4 3 Allianz Actions Euro, Paris 85.5 3 Allianz Actions Euro Convictions, Paris 85.9 3 Allianz Actions Euro MidCap, Paris 58.1 3 Allianz Actions France, Paris 56.1 3 Allianz Actions Indice US (couvert), Paris 93.8 3 Allianz Actions Internationales, Paris 98.6 3 Allianz Actions Japon, Paris 60.2 3 Allianz Actions US, Paris 80.6 3 Allianz Actions VD, Paris 99.6 3 Allianz Africa S.A., Paris 100.0 Allianz Air France IFC, Paris 99.9 3 Allianz Alapkezelõ Zrt., Budapest 100.0 Allianz Alp Sp. z o.o., Warsaw 100.0 Allianz Alternative Asset Management, Milan 100.0 4 Allianz America Holding B.V., Amsterdam 100.0
127 Consolidated Balance Sheets 128 Consolidated Income Statements 129 Consolidated Statements of Comprehensive Income 130 Consolidated Statements of Changes in Equity 131 Consolidated Statements of Cash Flows 134 Notes to the Consolidated Financial Statements 235Annual Report 2013 Allianz Group
Allianz Global Investors U.S. Holdings LLC, Dover, DE 100.0 Allianz Global Investors U.S. LLC, Dover, DE 100.0 Allianz Global Life Ltd., Dublin 100.0 Allianz Global Risks US Insurance Company Corp., Burbank, CA 100.0 Allianz Graduello, Paris 100.0 3 Allianz Greater China Dynamic, Senningerberg 83.3 3 Allianz Grenelle SAS, Paris 100.0 Allianz Hayat ve Emeklilik A.S., Istanbul 89.0 Allianz Hellas Insurance Company S.A., Athens 100.0 Allianz Héxéo, Paris 98.5 3 Allianz Hold Co Real Estate S.à r.l., Luxembourg 100.0 Allianz Holding eins GmbH, Vienna 100.0 Allianz Holding France SAS, Paris 100.0 Allianz Holdings plc, Guildford 100.0 Allianz Hospitaliers Euro, Paris 100.0 4 Allianz Hospitaliers Monde, Paris 100.0 4 Allianz Hospitaliers Valeurs Durables, Paris 100.0 4 Allianz Hungária Biztosító Zrt., Budapest 100.0 Allianz IARD S.A., Paris 100.0 Allianz IARD Vintage, Paris 100.0 4 Allianz Immo, Paris 53.5 3 Allianz Index Tracking Shares Fund, Budapest 89.8 3 Allianz Indiceo 2015, Paris 99.1 3 Allianz Individual Insurance Group LLC, Minneapolis, MN 100.0 Allianz Informatique G.I.E., Paris 100.0 Allianz Informatyka Sp. z o.o., Warsaw 100.0 Allianz Infrastructure Czech HoldCo I S.à r.l., Luxembourg 100.0 Allianz Infrastructure Czech HoldCo II S.à r.l., Luxembourg 100.0 Allianz Infrastructure Luxembourg I S.à r.l., Luxembourg 100.0 Allianz Infrastructure Luxembourg I SICAV-FIS, Luxembourg 100.0 Allianz Infrastructure Luxembourg II SICAF-FIS, Luxembourg 100.0 Allianz Insurance (Hong Kong) Ltd., Hong Kong 100.0 Allianz Insurance Cie of Ghana Limited, Accra 100.0 Allianz Insurance Company Lanka Limited, Saram 100.0 Allianz Insurance Company-Egypt S.A.E., Cairo 85.0 Allianz Insurance plc, Guildford 100.0 Allianz Inversiones S.A., Bogotá D.C. 100.0 Allianz Invest 10 Division S/U, Vienna 100.0 4 Allianz Invest 11 Division Leben/Kranken, Vienna 100.0 4 Allianz Invest 12 Division Leben/Kranken, Vienna 100.0 4 Allianz Invest 50, Vienna 100.0 3 Allianz Invest Alternativ, Vienna 100.0 3 Allianz Invest d.o.o., Zagreb 100.0 4 Allianz Invest Kapitalanlage GmbH, Vienna 100.0 Allianz Invest Ostrent, Vienna 95.5 3 Allianz Invest Spezial 3, Vienna 100.0 4 Allianz Investment Management LLC, Minneapolis, MN 100.0 Allianz Investmentbank Aktiengesellschaft, Vienna 100.0 Allianz Investments I Luxembourg S.à r.l., Luxembourg 100.0 Allianz Investments II Luxembourg S.à r.l., Luxembourg 100.0 Allianz Investments III Luxembourg S.à r.l., Luxembourg 100.0 Allianz Investments IV Luxembourg S.à r.l., Luxembourg 100.0 Allianz Irish Life Holdings p.l.c., Dublin 66.5 Allianz kontakt s.r.o., Prague 100.0 Allianz Leasing Bulgaria AD, Sofia 51.0 Allianz Life & Annuity Company, Minneapolis, MN 100.0 Allianz Life (Bermuda) Ltd., Hamilton 100.0 Allianz Life Assurance Company-Egypt S.A.E., Cairo 100.0 Allianz Life Financial Services LLC, Minneapolis, MN 100.0 Allianz Life Insurance Co. Ltd., Seoul 100.0 Allianz Life Insurance Company Ltd., Moscow 100.0 Allianz Life Insurance Company of Missouri, Clayton, MO 100.0
Allianz Popular Vida Compañía de Seguros y Reaseguros S.A., Madrid 100.0 Allianz Potential, Paris 100.0 3 Allianz Primio 2015, Paris 99.5 3 Allianz Private Equity Partners Europa I, Milan 86.8 4 Allianz Private Equity Partners Europa II, Milan 92.0 4 Allianz Private Equity Partners Europa III, Milan 99.6 4 Allianz Private Equity UK Holdings Limited, London 100.0 Allianz Properties Limited, Guildford 100.0 Allianz Prudence, Paris 99.7 3 Allianz Re Dublin Limited, Dublin 100.0 Allianz Real Estate France SAS, Paris 100.0 Allianz Real Estate of America LLC, New York, NY 100.0 Allianz Renewable Energy Fund Management 1 Ltd., London 100.0 Allianz Renewable Energy Partners I LP, London 100.0 Allianz Renewable Energy Partners II Limited, London 100.0 Allianz Renewable Energy Partners III LP, London 98.3 Allianz Renewable Energy Partners IV Limited, London 98.3 Allianz Renewable Energy Partners V plc., London 100.0 Allianz Risk Audit Ltd., Moscow 100.0 Allianz Risk Consultants Inc., Los Angeles, CA 100.0 Allianz Risk Transfer (Bermuda) Ltd., Hamilton 100.0 Allianz Risk Transfer (UK) Limited, London 100.0 Allianz Risk Transfer AG, Zurich 100.0 Allianz Risk Transfer Inc., New York, NY 100.0 Allianz Risk Transfer N.V., Amsterdam 100.0 Allianz S.A. de C.V., Mexico City 100.0 Allianz S.p.A., Trieste 100.0 Allianz Saint Marc CL, Paris 100.0 3 Allianz SAS S.A.S., Bogotá D.C. 100.0 Allianz Saude S.A., São Paulo 100.0 Allianz Scalinvest, Puteaux 98.1 3 Allianz Secteur Euro Immobilier, Paris 94.0 3 Allianz Secteur Europe Immobilier, Paris 88.7 3 Allianz Sécurité, Paris 84.9 3 Allianz Seguros de Vida S.A., Bogotá D.C. 100.0 Allianz Seguros S.A., São Paulo 100.0 Allianz Seguros S.A., Bogotá D.C. 100.0 Allianz Sénégal Assurances Vie S.A., Dakar 95.5 Allianz Sénégal dommages SA, Dakar 83.2 Allianz Services (UK) Limited, London 100.0 Allianz Sigorta A.S., Istanbul 84.2 Allianz SNA s.a.l., Beirut 100.0 Allianz Sociedad Anónima A.S. Agencia de Seguros, Barcelona 100.0 Allianz Sociedade Gestora de Fundos de Pensões S.A., Lisbon 84.4 Allianz Société Financière S.à r.l., Luxembourg 100.0 Allianz South America Holding B.V., Amsterdam 100.0 Allianz Specialised Investments Limited, London 100.0 Allianz Specjalistyczny Fundusz Inwestycyjny Otwarty Subfunduszu Allianz 1, Warsaw 100.0 4 Allianz Specjalistyczny Fundusz Inwestycyjny Otwarty Subfunduszu Allianz 2, Warsaw 100.0 4 Allianz Strategy 15, Senningerberg 95.0 3 Allianz Strategy 50, Senningerberg 95.5 3 Allianz Strategy 75, Senningerberg 92.1 3 Allianz Subalpina Holding S.p.A., Turin 98.1 Allianz Suisse Immobilien AG, Volketswil 100.0 Allianz Suisse Lebensversicherungs-Gesellschaft AG, Zurich 100.0 Allianz Suisse Rückversicherungs AG, Zurich 100.0 Allianz Suisse Versicherungs-Gesellschaft AG, Zurich 100.0 Allianz Taiwan Life Insurance Co. Ltd., Taipei 99.7 Allianz Telematics S.p.A., Rome 100.0 Allianz Tiriac Asigurari SA, Bucharest 52.2 Allianz Tiriac Pensii Private Societate de administrare a fondurilor de pensii private S.A., Bucharest 100.0 Allianz Togo dommages SA, Lome 97.9 Allianz UK Credit Fund, Paris 100.0 4 Allianz Ukraine LLC, Kiev 100.0 Allianz Underwriters Insurance Company Corp., Burbank, CA 100.0
127 Consolidated Balance Sheets 128 Consolidated Income Statements 129 Consolidated Statements of Comprehensive Income 130 Consolidated Statements of Changes in Equity 131 Consolidated Statements of Cash Flows 134 Notes to the Consolidated Financial Statements 237Annual Report 2013 Allianz Group
Mondial Contact Center Italia S.r.l., Taurisano 100.0 Mondial Protection Corretora de Seguros Ltda., São Bernardo do Campo 100.0 Mondial Service - Belgium S.A., Brussels 100.0 Mondial Service Argentina S.A., Buenos Aires 100.0 Mondial Service Colombia SAS, Bogotá D.C. 100.0 Mondial Servicios S.A. de C.V., Mexico City 100.0 Mondial Serviços Ltda., São Bernardo do Campo 100.0 Monéger SA, Dakar 100.0 Morgan Stanley Italian Office Fund, Milan 94.6 4 National Surety Corporation, Chicago, IL 100.0 Neoasistencia Manoteras S.L., Madrid 100.0 Nexam Multi Alternatives, Paris 85.6 3 Nextcare Bahrain Ancillary Services Company B.S.C., Manama 100.0 NEXtCARE Egypt LLC, Cairo 100.0 NEXtCARE Holding WLL, Manama 75.0 NEXtCARE Lebanon SAL, Beirut 100.0 NFJ Investment Group LLC, Dover, DE 100.0 Oddo Convictions, PARIS 69.7 3 Oddo Gestion Prudente, Paris 66.7 3 Oddo Indice Japon, Paris 55.3 3 Oddo Investissement, Paris 64.9 3 Oddo Patrimoine, Paris 67.2 3 Oddo Proactif Europe, Paris 65.7 3 Oddo Valeurs Rendement A, Paris 53.2 3 OJSC "Allianz Investments", Moscow 100.0 OJSC "My Clinic", Moscow 100.0 OJSC Insurance Company Allianz, Moscow 100.0 OJSC Insurance Company ROSNO-MS, Moscow 100.0 Omega Thai Investment Holding B.V., Amsterdam 100.0 Ontario Limited, Toronto, ON 100.0 OOO "IC Euler Hermes Ru", Moscow 100.0 OOO Euler Hermes Credit Management, Moscow 100.0 Oppenheimer Group Inc., Dover, DE 100.0 Orione PV S.r.l., Milan 100.0 Orsa Maggiore PV S.r.l., Milan 100.0 Orsa Minore PV S.r.l., Milan 100.0 OY Selecta AB, Helsinki 100.0 Pacific Investment Management Company LLC, Dover, DE 96.7 Paramount Group Real Estate Special Situations Fund-A L.P., New York, NY 100.0 Parc Eolien de Bonneuil S.à r.l., Versailles 100.0 Parc Eolien de Bruyère Grande SAS, Versailles 100.0 Parc Eolien de Croquettes SAS, Versailles 100.0 Parc Eolien de Fontfroide SAS, Versailles 100.0 Parc Eolien de Forge SAS, Paris 100.0 Parc Eolien de la Sole du Bois SAS, Paris 100.0 Parc Eolien de Longchamps SAS, Versailles 100.0 Parc Eolien des Barbes d'Or SAS, Versailles 100.0 Parc Eolien des Joyeuses SAS, Versailles 100.0 Parc Eolien des Mistandines SAS, Paris 100.0 Parc Eolien des Quatre Buissons SAS, Paris 100.0 Parc Eolien du Bois Guillaume SAS, Paris 100.0 Parc Eolien Les Treize SAS, Paris 100.0 Personalized Brokerage Service LLC, Topeka, KS 100.0 Pet Plan Ltd., Guildford 100.0 PFP Holdings Inc., Dover, DE 100.0 PGA Global Services LLC, Wilmington, DE 100.0 PGREF V 1301 Sixth Investors I LLC, Wilmington, DE 100.0 PGREF V 1301 Sixth Investors I LP, Wilmington, DE 100.0 PGRESS-A Equity GP LLC, Wilmington, DE 100.0 PGRESS-A Equity REIT LP, Wilmington, DE 100.0 Phenix Absolute Return, Paris 100.0 4 PIMCO (Schweiz) GmbH, Zurich 100.0 PIMCO Asia Ltd., Hong Kong 100.0 PIMCO Asia Pte Ltd., Singapore 100.0 PIMCO Australia Pty Ltd., Sydney 100.0 PIMCO Canada Corp., Toronto, ON 100.0 PIMCO Euro Low Duration Investment Grade Corporate Fund, Dublin 100.0 4 PIMCO Europe Ltd., London 100.0
PIMCO Global Advisors (Ireland) Ltd., Dublin 100.0 PIMCO Global Advisors (Luxembourg) S.A., Luxembourg 100.0 PIMCO Global Advisors (Resources) LLC, Dover, DE 100.0 PIMCO Global Advisors LLC, Dover, DE 100.0 PIMCO Global Holdings LLC, Dover, DE 100.0 PIMCO GP I LLC, Dover, DE 100.0 PIMCO GP III LLC, Dover, DE 100.0 PIMCO GP IX LLC, Dover, DE 100.0 PIMCO GP V LLC, Dover, DE 100.0 PIMCO GP VII LLC, Dover, DE 100.0 PIMCO GP X LLC, Dover, DE 100.0 PIMCO GP XI LLC, Dover, DE 100.0 PIMCO GP XII LLC, Dover, DE 100.0 PIMCO GP XIII LLC, Dover, DE 100.0 PIMCO Investments LLC, Dover, DE 100.0 PIMCO Japan Ltd., Road Town, Tortola 100.0 PIMCO Latin America Administradora de Carteiras Ltda., São Paulo 100.0 Primacy Holdings Pty Ltd., Melbourne 100.0 Primacy Underwriting Management Ltd., Wellington 100.0 Primacy Underwriting Management Pty Ltd., Melbourne 100.0 Prism Re (Bermuda) Ltd., Hamilton 99.0 Prosperaz Fundo de Investimento Renda Fixa Crédito Privado, São Paulo 100.0 4 Protexia France S.A., Paris 100.0 PT Asuransi Allianz Life Indonesia p.l.c., Jakarta 99.8 PT Asuransi Allianz Utama Indonesia Ltd., Jakarta 97.8 PTE Allianz Polska S.A., Warsaw 100.0 Q 207 GP S.à r.l., Luxembourg 100.0 Q207 S.C.S., Luxembourg 94.0 Quality 1 AG, Bubikon 100.0 Questar Agency Inc., Minneapolis, MN 100.0 Questar Asset Management Inc., Ann Arbor, MI 100.0 Questar Capital Corporation, Minneapolis, MN 100.0 Quintet Properties Ltd., Dublin 100.0 RAS Antares, Milan 100.0 4 RB Fiduciaria S.p.A., Milan 100.0 RCM Asia Pacific Ltd., Hong Kong 100.0 RCM Capital Management Pty Ltd., Sydney 100.0 Real Faubourg Haussmann SAS, Paris 100.0 Real FR Haussmann SAS, Paris 100.0 Redoma S.à r.l., Luxembourg 100.0 Retail Vending Ltd., Birmingham 100.0 Rhea SA, Luxembourg 100.0 Risikomanagement und Softwareentwicklung GmbH, Vienna 100.0 Roland Print B.V., Amsterdam 100.0 Roster Financial LLC, Mount Laurel, NJ 100.0 S.I.B.I. S.A., Paris 100.0 SA Carène Assurance, Paris 100.0 Saint-Barth Assurances S.à r.l., St. Barts 100.0 San Francisco Reinsurance Company Corp., Novato, CA 100.0 SAS 20 pompidou, Paris 100.0 SAS Allianz Colisée, Paris 100.0 SAS Allianz Forum Seine, Paris 100.0 SAS Allianz Platine, Paris 100.0 SAS Allianz Rivoli, Paris 100.0 SAS Allianz Serbie, Paris 100.0 SAS Madeleine Opéra, Paris 100.0 SAS Passage Des Princes, Paris 100.0 SAS Société d'Exploitation du Parc Eolien de Nélausa, Paris 100.0 Saudi NEXtCARE LLC, Al Khobar 52.0 SC Tour Michelet, Paris 100.0 SCI 46 Desmoulins, Paris 100.0 SCI Allianz ARC de Seine, Paris 100.0 SCI Allianz Chateaudun, Paris 100.0 SCI Allianz Messine, Paris 100.0 SCI AVIP La Templerie, Courbevoie 100.0 SCI AVIP SCPI Selection, Courbevoie 100.0 SCI ESQ, Paris 75.0
SCI Prelloyd, Paris 100.0 SCI Stratus, Courbevoie 100.0 SCI Via Pierre 1, Paris 100.0 SCI Volnay, Paris 100.0 Selecta A/S, Rodovre 100.0 Selecta AB, Stockholm 100.0 Selecta AG, Muntelier 100.0 Selecta AS, Oslo 100.0 Selecta B.V., Waardenburg 100.0 Selecta Betriebsverpflegungs GmbH, Vienna 100.0 Selecta Eesti Osauhing OÜ, Tallinn 100.0 Selecta Group B.V., Amsterdam 98.7 Selecta Holding AB, Stockholm 100.0 Selecta Holding B.V., Amsterdam 100.0 Selecta Holding Ltd., London 100.0 Selecta Holding SAS, Paris 100.0 Selecta Hungary Automataüzemeltetö Kft., Budapest 100.0 Selecta Luxembourg SA, Leudelange 100.0 Selecta Management AG, Zug 100.0 Selecta Nordic Holding AB, Stockholm 100.0 Selecta Purchasing AG, Zug 100.0 Selecta Refreshments Ltd., Dublin 100.0 Selecta SA, Zaventem 100.0 Selecta SA, Paris 99.9 Selecta TMP AG, Zug 100.0 Selecta UK Ltd., Birmingham 100.0 Selection Multi-Gerants Emergents, Paris 79.4 3 Selection Multi-Gerants Value, Paris 55.5 3 SI 173-175 Boulevard Haussmann SAS, Paris 100.0 SIA Baltic Payment Systems, Riga 100.0 SIA Selecta, Riga 100.0 Siac Services S.r.l., Rome 100.0 Silex Gas Management AS, Oslo 100.0 Silex Gas Norway AS, Oslo 100.0 Sirius S.A., Luxembourg 94.8 Sistemi Informativi Allianz S.p.c.A., Milan 100.0 SLC "Allianz Life Ukraine", Kiev 100.0 SMG Asie Emergente, Paris 54.0 3 SMG Croissance, Paris 58.6 3 Società Agricola San Felice S.p.A., Milan 100.0 Société de Production D'électricité D'harcourt Moulaine SAS, Versailles 100.0 Société d'Energie Eolien Cambon SAS, Versailles 100.0 Societe d'Exploitation du Parc Eolien d'Aussac Vadalle SAS, Paris 100.0 Société Européenne de Protection et de Services d'Assistance à Domicile S.A., Paris 56.0 Société Nationale Foncière S.A.L., Beirut 66.0 SOFE One Ltd., Bangkok 100.0 SOFE Two Ltd., Bangkok 100.0 Sofiholding S.A., Brussels 100.0 South City Office Broodthaers SA, Brussels 100.0 SpaceCo S.A., Paris 100.0 Standard General Agency Inc., Dallas, TX 100.0 StocksPLUS Management Inc., Dover, DE 100.0 Téléservices et Sécurité "TEL2S" SARL, Chatillon 99.9 TFI Allianz Polska S.A., Warsaw 100.0 The American Insurance Company Corp., Cincinnati, OH 100.0 The Annuity Store Financial & Insurance Services LLC, Sacramento, CA 100.0 The MI Group Limited, Guildford 99.4 Three Pillars Business Solutions Limited, Guildford 100.0 Tihama Investments B.V., Amsterdam 100.0 Top Assistance Service GmbH, Vienna 100.0 Top Immo A GmbH & Co. KG, Vienna 100.0 Top Immo Besitzgesellschaft B GmbH & Co. KG, Vienna 100.0 Top Versicherungsservice GmbH, Vienna 100.0 Top Vorsorge-Management GmbH, Vienna 75.0 Towarzystwo Ubezpieczen Euler Hermes S.A., Warsaw 100.0 Trafalgar Insurance Public Limited Company, Guildford 100.0 Travel Care Inc., Richmond, VA 100.0 TU Allianz Polska S.A., Warsaw 100.0
Joint ventures A&A Centri Commerciali S.r.l., Milan 50.0 Allee-Center Kft., Budapest 50.0 Allianz C.P. General Insurance Co. Ltd., Bangkok 50.0 Ancilyze Technologies LLC, Oakbrook Terrace, IL 50.0 Atenction Integral a la Dependencia S.L., Cordoba 50.0 Bajaj Allianz Financial Distributors Limited, Pune 50.0 Companhia de Seguro de Créditos S.A., Lisbon 50.0 Dorcasia Ltd., Sydney 50.0 Euromarkt Center d.o.o., Ljubljana 50.0 Europe Logistics Venture 1 FCP-FIS, Luxembourg 83.3 7 Guotai Jun'an Allianz Fund Management Co. Ltd., Shanghai 49.0 7 International Shopping Centre Investment S.A., Luxembourg 50.0 Israel Credit Insurance Company Ltd., Tel Aviv 50.0 Market Street Trust, Sydney 50.0 3 Millea Mondial Co. Ltd., Tokyo 50.0 NET4GAS Holdings s.r.o., Prague 50.0 One Beacon Joint Venture LP, Wilmington, DE 50.0 Previndustria - Fiduciaria Previdenza Imprenditori S.p.A., Milan 50.0 SC Holding SAS, Paris 50.0
127 Consolidated Balance Sheets 128 Consolidated Income Statements 129 Consolidated Statements of Comprehensive Income 130 Consolidated Statements of Changes in Equity 131 Consolidated Statements of Cash Flows 134 Notes to the Consolidated Financial Statements 239Annual Report 2013 Allianz Group
SES Shopping Center AT1 GmbH, Salzburg 50.0 Solunion Compania Internacional de Seguros y Reaseguros SA, Madrid 50.0 TopTorony Ingatlanhasznosító Zrt., Budapest 50.0
Invesco Multi Patrimoine, Paris 33.5 3 IPE Tank and Rail Investment 1 S.C.A., Luxembourg 48.8 JPMorgan IIF UK1 LP, Dublin 26.0 Le Cottage, Paris 43.7 3 Medgulf Allianz Takaful B.S.C., Seef 25.0 MMGI Euromix Action, Marseille 26.2 3 New Path S.A., Buenos Aires 40.0 OAO “Avariinyi Comissar”, Moscow 23.3 Oddo Avenir (D), Paris 23.2 3 Oddo Convertibles, Paris 32.8 3 Oddo Convertibles Taux, Paris 32.5 3 Oddo Court Terme, Paris 42.4 3 Oddo Europe, Paris 41.3 3 Oddo Generation C, Paris 33.9 3 Oddo Gestion Defen, Paris 33.8 3 Oddo Haut Rendement Monde 2018, Paris 40.3 3 Oddo Immobilier C, Paris 23.5 3 Oddo Rendement 2017, Paris 35.2 3 Oddo US Mid Cap, Paris 37.3 3 Oddo USA Index Actif, Paris 40.2 3 OeKB EH Beteiligungs- und Management AG, Vienna 49.0 OVS Opel VersicherungsService GmbH, Vienna 40.0 P H R V Paris Hotels Roissy Vaugirard SA, Paris 30.6 PAR Holdings Limited, Hamilton 21.2 PERFECTIS I Ltd., Paris 24.9 3 PGREF V 1301 Sixth Holding LP, Wilmington, DE 24.5 PGRESS Debt Holdings LP, Wilmington, DE 20.0 PGRESS Equity Holdings LP, Wilmington, DE 20.0 Pinatton France, Paris 31.2 3 RMCP PIV DPC L.P., Los Angeles, CA 25.0 3 SAS Alta Gramont, Paris 49.0 Schroder ISF Global Property Securities, Senninger-
SCI Bercy Village, Paris 49.0 SK Versicherung AG, Vienna 25.8 SNC Alta CRP Gennevilliers, Paris 49.0 SNC Alta CRP La Valette, Paris 49.0 SNC Société d’aménagement de la Gare de l’Est, Paris 49.0 Société de Distribution Automatique SA, Tunis 49.0 Solveig Gas Holdco AS, Oslo 30.0 Sunderland Insurance Services Inc., Fargo, ND 40.0 Wattinvest C, Paris 39.1 3 Wheelabrator Invest FCPR, Paris 26.9 3 Wildlife Works Carbon LLC, San Francisco, CA 10.0 8
Other participations between 5 and 20 % of voting rights Al Nisr Al Arabi, Amman 18.0 Banco BPI S.A., Porto 8.8 Zagrebacka banka d.d., Zagreb 11.7 1 Percentage includes equity participations held by dependent entities in full, even if the Allianz Group’s share in the dependent entity is below 100 %.
2 Controlled by Allianz Group. 3 Mutual, private equity or special fund. 4 Investment fund. 5 Releasing impact according to § 264 (3) HGB through the Allianz
Group’s consolidated financial statements. 6 Group share through indirect holder Roland Holding GmbH, 7 Classified as joint venture according to IAS 31. 8 Classified as associate according to IAS 28. 9 Insolvent.
To the best of our knowledge, and in accordance with the applicable reporting principles, the consolidated financial statements, in accordance with generally accepted accounting principles, give a true and fair view of the assets, liabilities, financial position and profit or loss of the group, and the group management report includes a fair review of the development and performance of the business and the position of the Group, together with a description of the principal opportunities and risks associated with the expected development of the Group.
In our opinion, based on the findings of our audit, the consolidated financial statements comply with IFRSs, as adopted by the EU, the additional requirements of German commercial law pursuant to § 315a para. 1 HGB and supplementary provisions of the articles of incorporation and give a true and fair view of the net assets, financial position and results of operations of the Group in accordance with these requirements. The group management report is consistent with the consolidated financial statements and as a whole provides a suitable view of the Group’s position and suitably presents the opportunities and risks of future development.
Klaus Becker Dr. Frank Pfaffenzeller Wirtschaftsprüfer Wirtschaftsprüfer (Independent Auditor) (Independent Auditor)
* a one-day trip should be full of rich experiences, not of concerns.
245 Joint Advisory Council of the Allianz Companies 246 International Advisory Board 247 Mandates of the Members of the Supervisory Board 248 Mandates of the Members of the Board of Management 249 Glossary 253 Index
Prof. Dr.-ing. Dr.-ing. e.H. Hans-Peter Keitel Vice-President of BDI-Federation of German Industries
Dr. tHomas rabe since 1 March 2013 CEO & Chairman of the Executive Board Bertelsmann SE & Co. KGaA
Prof. Dr. Dennis J. snower President of the Kiel Institute for the World Economy
Dr. Helmut Perlet Chairman Chairman of the Supervisory Board Allianz SE
Dr. rüDiger grube Chairman of the Board and Chief Executive Officer Deutsche Bahn AG
Dr. gianfelice rocca Chairman of Techint Group of Companies angel ron Chairman and Chief Executive Officer of Banco Popular antHoni salim President and Chief Executive Officer of Salim Group louis scHweitzer Président d’Honneur de Renault
Dr. Jürgen HambrecHt Former Chairman of the Board of Executive Directors, BASF SE
freD Hu Founder and Chairman of Primavera Capital Group franz Humer Chairman of the Board of Directors of Roche Holding Ltd iain lorD vallance of tummel Chairman of the Board of Directors, Amsphere Ltd
DR. WULf H. BERnoTaT Vice Chairman Former Chairman of the Board of Management of E.ON AG Membership in other statutory supervisory boards and SE administrative boards in Germany Bertelsmann Management SE Bertelsmann SE & Co. KGaA Deutsche Annington Immobilien SE (Chairman) since 18 June 2013 Deutsche Telekom AG METRO AG
CHRiSTinE BoSSE Former Group CEO of the Executive Management of Tryg Membership in comparable 1 supervisory bodies Aker ASA Flügger A/S (Chairwoman) Nordea Bank A/S until 14 March 2013 TDC A/S
PRof. DR. REnaTE KöCHER Head of Institut für Demoskopie Allensbach (Allensbach Institute) Membership in other statutory supervisory boards and SE administrative boards in Germany BMW AG Infineon Technologies AG Nestlé Deutschland AG Robert Bosch GmbH
iGoR LanDaU Member of the Board of Directors of Sanofi S.A. Membership in other statutory supervisory boards and SE administrative boards in Germany adidas AG (Chairman) Membership in comparable 1 supervisory bodies Sanofi S.A.
ManUEL BaUER Insurance Growth Markets Membership in comparable 1 supervisory bodies Bajaj Allianz General Insurance Co. Ltd. Bajaj Allianz Life Insurance Co. Ltd. Membership in Group bodies Allianz Hungária Biztosító Zrt. (Chairman) Allianz-Slovenská poist‘ovna a.s. (Chairman) Allianz Tiriac Asigurari S.A. (Chairman) OJSC IC Allianz (Chairman) until 1 March 2014 TUiR Allianz Polska S.A. (Chairman) TU Allianz Życie Polska S.A. (Chairman)
CLEMEnT BooTH Global Insurance Lines & Anglo Markets Membership in other statutory supervisory boards and SE administrative boards in Germany Membership in Group bodies Allianz Global Corporate & Specialty SE (Chairman) Membership in comparable 1 supervisory bodies Membership in Group bodies Allianz Australia Ltd.
DR. MaXiMiLian ZiMMERER Investments Membership in other statutory supervisory boards and SE administrative boards in Germany Membership in Group bodies Allianz Asset Management AG Allianz Investment Management SE (Chairman) Allianz Lebensversicherungs-AG (Vice Chairman)
E Further Information 245 Joint Advisory Council of the Allianz Companies 246 International Advisory Board 247 Mandates of the Members of the Supervisory Board 248 Mandates of the Members of the Board of Management 249 Glossary 253 Index
AssociAtes All entities, over which the Allianz Group has significant influence, i.e. the power to participate in the financial and operating policy decisions of these entities, but no control or joint control of those policies.
combined rAtio Represents the total of acquisition and administrative expenses (net) and claims and insurance benefits incurred (net) divided by premiums earned (net).
counter­cyclicAl premium (ccp) Under the draft Solvency ii guidelines, a full spread risk calculation is required for all fixed­income assets except government bonds in the European Economic Area. It was recognized by regulatory authorities that this could create an artificial volatility for the risk­bearing funds as well as for the risk capital which does not truly reflect an insurer’s business model, where assets are usually held to maturity to a large extent and spread risk would only become relevant in case of forced sales of assets. There­ fore, the counter­cyclical premium (ccp) was introduced (within the draft of the Level 2 implementing measures of Solvency ii) as a means to counter the exposure to this spread volatility and thus to reduce the impact of dis­ torted markets on the determination of the available financial resources due to illiquidity. Effectively, the ccp is considered as one component of the discount curve in the liability valuation. In the latest guidelines based on the trialogue agreement in November 2013 the ccp concept was abolished.
Glossary The accounting terms explained here are intended to help the reader under stand this Annual Report. Most of these terms concern the balance sheet or the income statement.
deferred tAx Assets/liAbilities The calculation of deferred taxes is based on tax loss carry forwards, tax credit carry forwards and temporary differences between the carrying amounts of assets or liabilities in the published balance sheet and their tax base, and on differences arising from applying uniform valuation policies for consolidation purposes. The tax rates used for the calculation are the local rates appli­ cable in the countries of the entities included in the con­ solidation; changes to tax rates already adopted on the balance sheet date are taken into account.
futures Standardized contracts for delivery on a future date, traded on an exchange. Normally, rather than actually delivering the underlying asset on that date, the differ­ ence between the closing market value and the exercise price is paid.
going concern reserve The going concern reserve consists of funds that are used to cover cost for new business under going concern assumptions.
gross/net In insurance terminology the terms gross and net mean before and after deduction of reinsurance, respectively. In investment terminology the term “net” is used where the relevant expenses have already been deducted from the respective income.
non­controlling interests Those parts of the equity of affiliates which are not owned by companies of the Allianz Group.
net income AttributAble to non­controlling interests That part of net income for the year which is not attribut­ able to the shareholders of the Allianz Group but to other third parties who hold shares in affiliates.
pension And similAr obligAtions Reserves for current and future post­employment ben­ efits formed for the defined benefit plans of active and former employees. These also include reserves for health care benefits.
premiums written/eArned Premiums written represent all premium revenues in the respective year. Premiums earned represent that part of the premiums written used to provide insurance coverage in that year. In the case of life insurance prod­ ucts where the policyholder carries the investment risk (e.g. variable annuities), only that part of the premiums used to cover the risk insured and costs involved is treated as premium income.
replicAting portfolio Representation of the liabilities of our Life/Health insur­ ance business via standard financial instruments. This form of representation mimics the behavior of these liabilities under different market conditions and allows for efficient risk calculations on the basis of Monte Carlo simulations.
surplus funds According to Solvency ii guidance surplus funds are deemed to be accumulated profits, which have not been made available for distribution to policy holders and beneficiaries.
swAps Agreements between two counterparties to exchange payment streams over a specified period of time. Impor­ tant examples include currency swaps (in which payment streams and capital in different currencies are exchanged) and interest rate swaps (in which the parties agree to exchange normally fixed interest payments for variable interest payments in the same currency).
vAriAble Annuities 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.
yield curve extrApolAtion The Allianz Group applies the same methodology to de­ termine the risk­ free yield curve for discounting liabili­ ties as provided by the European Insurance and Occupa­ tional Pensions Authority (eiopA). The method takes traded market data into account until the maturity where market quotes are expected to be deep and liquid. After this last liquid period the Allianz Group applies a macroeconomic extrapolation technique to construct the curve by making use of forward rate assumptions. This technique interpolates between the last observable liquid forward rate per currency and the currency­specif­ ic unconditional forward rate (ufr) for a later maturity. The ufr for each currency is based on estimates of the expected inflation as well as the long­term average of the short­term real rate. After reaching this ufr the for­ ward yield remains constant over time. These derived for­ ward rates are applied to calculate the final yield curve. Notably in Euro, the Allianz Group starts extrapolating at 20 years, applying a ufr of 4.2 % which is kept constant after 60 years.
Banking 85f. Basic earnings per share 23, 69 Belgium/Luxembourg 79 Board of Management 18f., 27f. Board of Management
Conglomerate solvency 66f., 92f. Corporate and Other 50, 67f., 85f., 91, 98 Corporate governance and declaration 13, 32f.
Corporate Social Responsibility 59ff. Cost-income ratio 82, 84 Credit insurance 72f., 112ff.
Demographic change 121 Digitalization 122 Directors’ dealings 31 Distribution 35f., 49ff. Diversity 30, 61f.
Employee stock purchase plan 13, 34 Executive remuneration principles 37 Executive summary 66ff.
Insurance markets 49ff. Intangible assets 68, 86 Internal controls over financial reporting
Investments 60, 94f. Investor Relations 23 Investors 21f., 50 Italy 52f., 72f., 79
Latin America 72, 79 Letter to the investors 5ff. Life/Health 49, 67f., 78ff., 90, 97 Liquidity 91, 99ff., 108 Loss adjustment expenses 96 Low interest rate environment 53f.,
Share 21ff. Share price 22 Shareholders’ equity 92 Shareholder structure 22 121f., 124 Sovereign debt crisis 64, 66, 88ff., 105
Talent management 62 Third-party assets under management 83 Three-year bonus 37ff. Total assets under management 82f.
Annual General Meeting _______________________________ 7 May 2014 Interim Report /Financial Results 1Q ______________________ 14 May 2014 Interim Report /Financial Results 2Q ______________________ 8 August 2014 Interim Report /Financial Results 3Q ______________________ 7 November 2014 Financial Results 2014 __________________________________ 26 February 2015 Annual Report 2014 ___________________________________ 13 March 2015 Annual General Meeting _______________________________ 6 May 2015