Achieving
goals
together
Allianz Group
Annual Report 2013
Content
A
To Our Investors
5
10
17
18
20
21
B
27
32
34
37
Letter to the Investors
Supervisory Board Report
Supervisory Board
Board of Management
International Executive Committee
Allianz Share
Corporate Governance
Corporate Governance Report
Statement on Corporate Management pursuant to § 289a of the HGB
Takeover-related Statements and Explanations
Remuneration Report
C
Group Management Report
48
Content
Your AlliAnz
49
56
59
Business Operations and Markets
Strategy and Steering
Progress in Sustainable Development
MAnAGeMent Discussion AnD AnAlYsis
Business Environment
64
Executive Summary of 2013 Results
66
Property-Casualty Insurance Operations
71
Life/Health Insurance Operations
78
Asset Management
82
Corporate and Other
85
Outlook 2014
87
Balance Sheet Review
92
Liquidity and Funding Resources
99
Reconciliations
104
risk AnD opportunitY report AnD FinAnciAl control
105
123
Risk and Opportunity Report
Controls over Financial Reporting and Risk Capital
D Consolidated Financial
Statements
126
127
128
129
130
131
134
E
245
246
247
248
249
253
Content
Consolidated Balance Sheets
Consolidated Income Statements
Consolidated Statements of Comprehensive Income
Consolidated Statements of Changes in Equity
Consolidated Statements of Cash Flows
Notes to the Consolidated Financial Statements
Further Information
Joint Advisory Council of the Allianz Companies
International Advisory Board
Mandates of the Members of the Supervisory Board
Mandates of the Members of the Board of Management
Glossary
Index
To go directly to any chapter,
simply click on the headline or
the page number
Allianz at a glance
AnnuAl results
Income statement 1
Total revenues 2
Operating profit 3
Net income from continuing operations 4
Net income (loss) from discontinued
operations, net of income taxes 4
Net income (loss)
thereof: Attributable to shareholders
Balance sheet as of 31 December 1
Total assets
Investments
Total liabilities
thereof: Reserves for insurance
and investment contracts
thereof: Reserves for loss and loss
adjustment expenses
Shareholders’ equity
Non-controlling interests
Share information
Basic earnings per share1
Diluted earnings per share1
Dividend per share
Total dividend
Share price as of 31 December
Market capitalization as of 31 December
Other data
Return on equity after income tax 1,7,8
Conglomerate solvency 9
Standard & Poor’s rating 11
Total assets under management
as of 31 December
thereof: Third-party assets under
2012
2011
2010
2009
2008
2007
More
details on
page
106,383
103,560
106,451
97,385
92,568
9,337
5,558
–
5,558
5,231
7,764
2,853
–
2,853
2,591
8,243
5,209
–
5,209
5,053
7,044
4,650
(395)
4,255
4,207
7,455
4,268
(6,373)
(2,105)
(2,363)
97,689
10,320
7,991
723
8,714
7,966
Change
from
previous
year
4.1 %
7.8 %
14.1 %
–
14.1 %
14.6 %
2013
110,773
10,066
6,344
–
6,344
5,996
711,530
411,015
658,681
€ Mn
€ Mn
€ Mn
€ Mn
€ Mn
€ Mn
€ Mn
€ Mn
€ Mn
2.5 %
2.3 %
2.7 %
694,447
401,628
641,484
641,322
350,645
595,575
624,945
334,618
578,383
583,717
294,252
541,488
954,999
1,061,149
258,812
285,977
917,715
1,009,768
€ Mn
404,072
3.3 %
390,985
361,956
349,793
323,801
298,057
292,244
€ Mn
€ Mn
€ Mn
€
€
€
€ Mn
€
€ Mn
%
%
66,566
50,084
2,765
13.23
13.05
5.30 5
2,4195,6
130.35
59,505
(8.2) %
(0.6) %
7.4 %
14.4 %
13.7 %
17.8 %
18.6 %
24.4 %
24.5 %
72,540
50,388
2,575
11.56
11.48
4.50
2,039
104.80
47,784
68,832
43,457
2,290
66,474
44,491
2,071
64,441
40,108
2,121
63,924
33,720
3,564
5.74
5.58
4.50
2,037
73.91
11.20
11.12
4.50
2,032
88.93
9.33
9.30
4.10
1,850
87.15
(5.25)
(5.29)
3.50
1,580
75.00
33,651
40,419
39,557
33,979
63,706
47,753
3,628
18.00
17.71
5.50
2,472
147.95
66,600
11.9
182
AA
0.8 % -p
(15) % -p
–
11.1
197
AA
5.9
179
AA
11.9
173
AA
12.5
164
AA
9.9
157 10
AA
15.0
158
AA
€ Mn
1,769,551
(4.5) %
1,852,332
1,656,993
1,517,538
1,202,122
950,548
1,009,586
67
68
69
–
69
69
93
168
93
187
182
92
195
230
230
22
69
22
23
23
92
106
82
83
61
management as of 31 December
€ Mn
1,360,759
(5.4) %
1,438,425
1,281,256
1,163,982
Employees
147,627
2.5 %
144,094
141,938
151,338
925,699
153,203
703,478
182,865
764,621
181,207
1
Prior year figures have been restated to reflect the retrospective application of the amended standard
IAS 19 – Employee Benefits, effective as of 1 January 2013. For further information, please refer to note 4
to the consolidated financial statements. Figures prior to 2011 have not been adjusted retrospectively.
As of 1 January 2013, all restructuring charges are presented within operating profit and all prior year
figures have been adjusted to conform to the current accounting presentation. Figures prior to 2011 have
not been adjusted retrospectively.
Figures prior to 2008 have not been restated to reflect the change in the Allianz Group’s accounting
2
3
4
policy for fixed-indexed annuities, effective 1 July 2010.
Total revenues comprise statutory gross premiums written in Property-Casualty and Life/Health, operating
revenues in Asset Management and total revenues in Corporate and Other (Banking).
The Allianz Group uses operating profit as a key financial indicator to assess the performance of its business
segments and the Group as a whole.
Following the announcement of the sale on 31 August 2008, Dresdner Bank was classified as held for sale
and discontinued operations. Therefore, all revenue and profit figures presented for our continuing busi-
ness do not include the parts of Dresdner Bank that we sold to Commerzbank on 12 January 2009. The
results from these operations are presented in a separate net income line “Net income (loss) from
discontinued operations, net of income taxes”.
Proposal.
Total dividend based on total amount of shares. Actual dividend payment will be reduced by the dividend
amount attributable to treasury shares.
Based on average shareholders’ equity. Average shareholders’ equity has been calculated based upon
the average of the current and the preceding year’s shareholders’ equity as of 31 December.
Based on net income from continuing operations after non-controlling interests.
Solvency according to the E.U. Financial Conglomerates Directive. Off-balance sheet reserves are accepted
by the authorities as eligible capital only upon request. Allianz SE has not submitted an application so
far. Excluding off-balance sheet reserves, the solvency ratio as of 31 December 2013 would be 173 % (2012
(as published): 188 %). The conglomerate solvency ratio decreased by approximately 16 percentage
points as of 1 January 2013 due to amendments to IAS 19.
Pro-forma after sale of Dresdner Bank completed.
For further information about insurer financial strength ratings of Allianz SE, please refer to page 106.
5
6
7
8
9
10
11
Allianz Group Annual Report 2013
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Orientation guide
This sign indicates where additional information in
this Annual Report or on the internet can be found.
On pages 249 to 252, you will find a glossary of
selected accounting, insurance and financial market
terms used in this report.
Group profile
Allianz is a globAl compAny that operates in more thAn
70 countries. our experience and expertise in insurance and asset
management make us one of the world’s strongest finAnciAl
communities. with our broad portfolio of products and first-class
service, we create tailor-made solutions for a changing world.
€ bn 50.1
shareholders’ equity
AA standard & poor's rating since 2007
page 92
€ bn110.8
total revenues
page 67
€ 5.30
dividend per share (proposal)
page 22
€ Mn10,066
operating profit
page 68
€ Mn 5,996
net income attributable to shareholders
page 69
182 %
conglomerate solvency
page 92
our approximately 148,000 employees
do their utmost every day to make the
most of financial opportunities and
assess and safeguard against risks both
to the benefit of our customers and
to protect the company. thanks to our
global reach, expertise and financial
strength, we are a trusted partner for
over 83 million customers insured
by Allianz all around the world.
Achieving goAls together.
2
Annual Report 2013
Allianz Group
Bapak Faisal,
Field Officer,
Allianz Customer,
Indonesia
* One prOtectiOn fOr my family,
nO matter hOw far away i am.
Our customers are at the heart of
everything we do. Our in-depth
knowledge of the markets and the
variety of our products enable us
to find the best solutions for their
individual needs. We safeguard our
customers and take advantage of
global financial opportunities with
them.
a _ tO Our investOrs
5
10
17
18
20
21
Letter to the Investors
Supervisory Board Report
Supervisory Board
Board of Management
International Executive Committee
Allianz Share
pages 4 – 24
4
annual report 2013
allianz Group
A
To Our Investors
5
Letter to the Investors
10 Supervisory Board Report
Supervisory Board
17
18 Board of Management
20 International Executive Committee
21 Allianz Share
I am pleased to report very good results once again this year. Allianz posted
revenues of more than € 110 BN for the first time ever, while at the same
time considerably increasing profitability. At € 10.1 BN, our 2013 operating
profit was one of the highest in our history. We increased our net income by
14.1 % to € 6.3 BN. Net income attributable to shareholders amounted to
€ 6.0 BN. Therefore, we will propose a dividend of € 5.30 per share.
With these results we held up very well not only against our international
competitors. We also continued to further improve our financial strength
as evidenced by one of the best ratings of all insurance companies from the
rating agency Standard & Poor’s. Furthermore, our AA rating outlook was
updated to “stable” by the same rating agency. This represents an outstanding
assessment of our capital strength and solidity. The message is that your
money is well invested in Allianz shares.
This strong performance in such a challenging business environment is
once again the impressive result of the efficiency and skill of our employees
around the world – and of our distribution partners. I would like to thank
them for their remarkable efforts last year. And I think that I also may offer
these words of praise on your behalf, as the owners of Allianz.
It was a difficult year for all regions of the world, with growth hampered by
the need for structural adjustments, the fiscal consolidation in the
Eurozone, the fiscal gridlock in the United States and sizeable political risks
– especially in the Middle East. As a result, global economic growth in 2013
was even slightly lower than in the previous year. While central banks have
supported growth by making an almost unlimited supply of liquidity
available, the impact of persistently low interest rate levels represents a
challenge for all savers and, in turn, for us as an insurer. In addition, severe
hail, storms and floods in 2013 had an adverse effect on our results, in
particular in Germany and Eastern Europe.
Even so, we succeeded in making positive headlines for the second year in
a row. The Property-Casualty business posted an increase in operating profit
of 14.2 %, despite considerable losses from natural catastrophes. We were
more than able to make up for these losses with a big improvement at our
U.S. Property-Casualty subsidiary Fireman’s Fund and an excellent contri -
bution to operating profit from Allianz Italy.
Meanwhile, our Life/Health revenues grew by 8.5 %, supported by strong
growth in particular in Germany and Italy, despite the general uncertainty
among clients caused by the low interest rate environment, while operating
profit declined by 8.0 % from the high level in the previous year. In Germany,
we launched a new life insurance product in 2013 with separate guarantees
in the savings and payout phases, which results in much less stringent
capital adequacy requirements. In return, the client can expect higher
returns. This innovation met with a good response in the market.
The Asset Management business managed to post a record operating profit
in 2013, with growth of 7.0 % despite a challenging environment in
the second half. Our asset manager Pimco recorded outflows of funds
6
A
To Our Investors
5
Letter to the Investors
10 Supervisory Board Report
Supervisory Board
17
18 Board of Management
20 International Executive Committee
21 Allianz Share
following the debate in the United States on a gradual reduction of asset
purchases by the Federal Reserve Bank.
We continued to pursue our investments in future growth in a systematic
manner. This year, we made an acquisition in Turkey, which makes us the
market leader in one of the most attractive growth markets. We bought the
company – multi-line insurer Yapı Kredi – in July, at the same time securing
a 15-year exclusive distribution agreement with Yapı Kredi Bank. Thanks
to the acquisition of Yapı Kredi, our market share in Turkey is now almost
comparable with our position in Germany.
For the coming year, we believe that Allianz is well equipped to further boost
its competitive position despite the challenges we face.
Although the economies in Europe and the United States are continuing to
stabilize, interest rates in both regions are likely to remain low for the
foreseeable future. The Euro has meanwhile staged a strong recovery, despite
the European debt crisis being far from over. While this is a welcome
development in one sense, it also has an adverse impact on exports and on
the foreign revenues of European companies with international operations.
However, without further diversifying our investment portfolio we won’t
achieve a satisfying investment performance on new investments. In this
context, we also have to be attuned to currency fluctuations.
A further challenge is the need to tackle difficult detailed aspects of
regulation – supervisory legislation, solvency rules and the consequences
of Allianz’s systemic relevance. This ties up a lot of resources and could
potentially lead to higher capital adequacy requirements for Allianz. In our
opinion, our strong capital position already covers such higher capital
adequacy requirements today.
7
Alongside regulation, another increasingly important theme is the digitali-
zation of our business models. New technologies are enabling us to meet
the evolving needs of our clients, develop new products and tariffs and
become more efficient and competitive. In this context, keeping our clients’
and company’s data secure has been given top priority. Digitalization is
a long-term project. We have already achieved a great deal in recent years,
but there is still a lot of work to do if we are to take full advantage of the
potential available to us.
We are pleased to note that our shareholders have also benefited from our
success. We see the increase of 24.4 % in Allianz’s share price in 2013 as a
sign that the markets agree with our strategy and our earnings stability. For
2014, we are aiming for an operating profit of € 10.0 BN. Due to ongoing
market volatility, however, we believe that this result may ultimately rise or
fall by up to € 500 mN. We will continue to work hard to justify your trust in us.
Michael Diekmann
Chairman of the Board of Management
8
A
To Our Investors
5
Letter to the Investors
10 Supervisory Board Report
Supervisory Board
17
18 Board of Management
20 International Executive Committee
21 Allianz Share
Supervisory Board Report
Ladies and Gentlemen,
During the 2013 fiscal year, the Supervisory Board fulfilled all its duties and obligations as laid
out in the company Statutes and applicable law. It monitored the management of the company
and advised the Board of Management regarding the conduct of business.
Overview
Within the framework of our monitoring and advisory activities, the Board of Management
informed us on a regular basis, and in a timely and comprehensive manner, both verbally and
in writing, on the course of business, as well as on the economic and financial development
of Allianz Group and Allianz SE, including deviations in actual business developments from
existing plans. Further key areas the Board of Management reported on were business strategy,
capital adequacy, the challenges facing life insurance due to persistent low interest rates, the
effects of the sovereign debt crisis in Europe and Allianz SE’s classification as a Global Systemi-
cally Important Insurer by the Financial Stability Board (FSB) and the International Association
of Insurance Supervisors (IAIS), as well as any potentially resulting regulatory requirements.
10
Annual Report 2013
Allianz Group
A
To Our Investors
5
Letter to the Investors
10 Supervisory Board Report
Supervisory Board
17
18 Board of Management
20 International Executive Committee
21 Allianz Share
In addition, we were extensively involved in the Board of Management’s planning for both the
2014 fiscal year and the medium term. At various meetings, the Chief Executive Officers (CEOs)
of Euler Hermes, Allianz Lebensversicherungs-AG and PIMCO presented the performance and
strategic positioning of their entities.
The Board of Management’s reports were supplemented by documents which each member of
the Supervisory Board received in preparation for each meeting. Likewise, the annual financial
statements of Allianz SE, the consolidated financial statements and the auditor’s reports were
also made available to us in time for the relevant meeting. The half-yearly and quarterly financial
reports, and the results of the auditor’s review were provided in advance to members of the
Audit Committee.
In the 2013 fiscal year, the Supervisory Board held six meetings. The meetings took place in
February, March, May, August, October and December.
The Board of Management also informed us in writing of important events that occurred
between meetings. The chairmen of the Supervisory and Management Board also had regular
discussions about major developments and decisions. Details on each member’s participation
at meetings of the Supervisory Board and its committees can be found in the Corporate Gover-
nance Report, starting on
page 27.
iSSUeS DiSCUSSeD iN THe SUPerviSOrY BOArD PLeNArY SeSSiONS
In all of the Supervisory Board’s 2013 meetings, the Board of Management reported on Group
revenues and results, developments in individual business segments, and on the capital,
financial and risk situation. We were regularly informed by the Board of Management on
the impact of natural catastrophes, the status of major legal disputes and other essential
developments.
In the meeting of 20 February 2013, the Supervisory Board dealt comprehensively with the pro-
visional financial figures for the 2012 fiscal year and the Board of Management’s recommended
dividend. It also discussed the intended closure of Allianz Bank’s business operations and the
planned purchase of Turkish insurer Yapı Kredi. The appointed audit firm, KPMG AG
Wirtschaftsprüfungsgesellschaft (KPMG), Munich, reported in detail on the provisional results
of their audit. The Supervisory Board also reviewed the extent to which individual members of
the Board of Management had achieved their targets and set their variable remuneration for
the 2012 fiscal year and their 2010 – 2012 mid-term bonus.
In the meeting of 14 March 2013, the Supervisory Board discussed the audited annual Allianz SE
and consolidated financial statements as well as the recommendation for the appropriation
Annual Report 2013
Allianz Group
11
of earnings by the Board of Management for the 2012 fiscal year. KPMG confirmed there were no
discrepancies to their February report and issued an unqualified auditor’s report for the indi-
vidual and consolidated financial statements. The Supervisory Board also dealt with the agenda
for the 2013 AGM of Allianz SE and approved the Supervisory Board’s proposals for resolution. In
addition, we resolved to appoint KPMG as auditor for the individual and consolidated financial
statements for the 2013 fiscal year as well as for the auditor’s review of the 2013 half-yearly
interim report. By way of a presentation the Supervisory Board was also informed in detail
about the performance of global credit insurer Euler Hermes.
On 7 May 2013, just before the AGM, the Board of Management briefed us on the first quarter
2013 performance and on the Group’s current situation, particularly the capital adequacy. We
further used this meeting to prepare for the subsequent AGM. The Supervisory Board adopted a
resolution regarding the extension of Manual Bauer’s appointment until 31 December 2014, the
year in which he will turn 60.
In our meeting on 1 August 2013 the Board of Management reported in depth on the half-yearly
results. We examined Allianz Turkey’s business activities and the security of client data in the
wake of the NSA disclosures. We also dealt with the issuance of Allianz Shares to employees of
Allianz Group. We were given a presentation on the performance of Allianz Lebensversicherungs-
AG and had a thorough discussion about the challenges posed by persistently low interest rates
and about product initiatives featuring a new guarantee concept. In the executive session, we
agreed to a reduction in the thresholds regarding transactions in equity holdings which
require our approval as well as to the respective amendment of our Rules of Procedure.
At the meeting of 2 October 2013, we dealt extensively with the strategy of the Allianz Group,
including risk strategy and risk management, capital management and digitalization. We were
also given a presentation on the business performance and further development of the busi-
ness model at PIMCO and discussed the outflows of funds from fixed income investments. The
meeting was followed by a separate information session for members of the Supervisory Board
where Allianz managers gave presentations on current topics.
At the 12 December 2013 meeting, the Board of Management informed us of the third-quarter
results, further business developments, the situation of the Allianz Group, and several other
issues. We then discussed the planning for the 2014 fiscal year and the three-year period 2014 –
2016, as well as the remuneration structures within the Allianz Group and the Declaration of
Conformity with the German Corporate Governance Code (Code). On the recommendation of
the Personnel Committee, the Supervisory Board adopted a resolution to adjust the remunera-
12
Annual Report 2013
Allianz Group
A
To Our Investors
5
Letter to the Investors
10 Supervisory Board Report
Supervisory Board
17
18 Board of Management
20 International Executive Committee
21 Allianz Share
tion of the Board of Management with effect from 1 January 2014, to set the yearly premiums for
pension schemes for members of the Board of management, and set out their targets for 2014.
We also reviewed and approved the appropriateness of the remuneration of the Board of
Management by means of a vertical and horizontal comparison. In line with a new recommen-
dation of the Code, the “upper management” and “relevant workforce” groups were defined for
the vertical comparison. In addition, we intensively discussed the Supervisory Board’s efficiency
review, which we carried out for the first time in 2013 with the aid of an external advisor, and
we discussed potential improvements in the way the Supervisory Board operates.
DeCLArATiON OF CONFOrMiTY wiTH THe GerMAN COrPOrATe GOverNANCe CODe
The Supervisory Board dealt with the new version of the Code dated 13 May 2013.
On 12 December 2013 the Board of Management and the Supervisory Board issued the Decla-
ration of Conformity in accordance with § 161 of the German Stock Corporation Act (“Aktien-
gesetz”). The Declaration was posted on the company website, where it is available to share-
holders at all times. Allianz SE fully complies and will continue to fully comply with the
recommendations of the German Corporate Governance Code Commission made in the
Code’s version of 13 May 2013 with one exception. Deviating from Item 5.3.2 of the Code, the
Supervisory Board’s Risk Committee – rather than the Audit Committee – will be responsible
for monitoring the risk management system.
Further explanations of corporate governance in the Allianz Group can be found in the Corpo-
rate Governance Report starting on
pursuant to § 289a HGB starting on
also be found on the Allianz website at
page 27 and the Statement on Corporate Management
page 32. More information on corporate governance can
www.allianz.com/corporate-governance.
COMMiTTee ACTiviTieS
The Supervisory Board has formed various committees in order to perform its duties efficiently:
the Standing Committee, the Personnel Committee, the Audit Committee, the Risk Committee
and the Nomination Committee. The committees prepare the discussion and adoption of reso-
lutions in the plenary sessions. Furthermore, in appropriate cases, the authority to adopt reso-
lutions has been delegated to the committees. There is no Conciliation Committee because the
German Co-Determination Act (“Mitbestimmungsgesetz”) which provides for such a commit-
tee does not apply to Allianz SE as a European Company (SE). Please find the composition of the
committees at the end of the reporting period on
page 15.
Annual Report 2013
Allianz Group
13
The Standing Committee held five meetings in 2013. These related primarily to corporate gover-
nance issues, the preparation for the AGM, the Employee Stock Purchase Plan, and a review of
the Supervisory Board’s efficiency conducted by an external advisor. During the fiscal year the
committee passed resolutions requiring approval on the use of Authorized Capital 2010/II for
the issue of shares to employees and to approve loans to senior executives.
The Personnel Committee met four times over the fiscal year 2013. The committee dealt with
personnel matters for both active and former members of the Board of Management, including
succession planning and top management development. It also reviewed the extent to which
members of the Board of Management had achieved their annual targets for fiscal year 2012
and the targets for the 2010-2012 mid-term bonus. The committee prepared the review of the
Board of Management’s remuneration system, including the setting of targets for variable
remuneration in 2014. In addition, the committee dealt with the mandates held by Board of
Management members in the interests of the Allianz Group. In relation to this, resolutions
were also adopted by written procedure in April and July 2013.
The Audit Committee held five meetings in 2013. In the presence of the auditors, it discussed
the annual financial statements of Allianz SE and the consolidated financial statements of the
Allianz Group, the management reports and auditor’s reports. In addition, the committee
reviewed the half-yearly and quarterly financial reports and, together with the auditors, went
through the details of the auditor’s review of these financial statements. After carrying out
these reviews, the Audit Committee saw no reason to raise any objections. The committee also
reviewed the auditor’s engagement and established priorities for the annual audit. In addition,
assignments to the auditors for services not connected to the audit itself were discussed. An
upper limit for “non-audit services” by KPMG was agreed upon, requiring approval from the
Audit Committee if it is to be exceeded. The committee also dealt with the compliance system,
the internal auditing system as well the accounting process and internal financial reporting
control mechanisms, including the appropriateness of the respective systems and processes.
The committee received regular reports from the Head of Group Audit, from the General
Counsel and from the Chief Compliance Officer on material audit results and their status as
well as on legal and compliance issues. The committee approved the audit plan by Group
Audit for 2014.
The Risk Committee held two meetings in 2013. In both meetings, the committee discussed the
current risk situation of the Allianz Group with the Board of Management. The risk report as
well as other risk-related statements in the annual Allianz SE and consolidated financial state-
ments and management and group management reports, were reviewed with the auditor and
14
Annual Report 2013
Allianz Group
A
To Our Investors
5
Letter to the Investors
10 Supervisory Board Report
Supervisory Board
17
18 Board of Management
20 International Executive Committee
21 Allianz Share
the Audit Committee was informed of the result. The appropriateness of the early risk recogni-
tion system in Allianz was also discussed. In the August meeting, the committee looked in
detail at the effectiveness of the risk management system, including an examination of its
compliance with minimum supervisory requirements. Other matters considered were the risk
strategy and market and credit risk.
There was no business requiring a meeting of the Nomination Committee during fiscal year 2013.
The Supervisory Board was regularly and comprehensively informed of the committees’ work.
Chair and committees of the Supervisory Board – as of 31 December 2013
Chairman of the Supervisory Board: Dr. Helmut Perlet
Deputy Chairmen: Dr. Wulf H. Bernotat, Rolf Zimmermann
Standing Committee: Dr. Helmut Perlet (Chairman), Dr. Wulf H. Bernotat,
Prof. Dr. Renate Köcher, Gabriele Burkhardt-Berg, Rolf Zimmermann
Personnel Committee: Dr. Helmut Perlet (Chairman), Christine Bosse, Rolf Zimmermann
Audit Committee: Dr. Wulf H. Bernotat (Chairman), Igor Landau, Dr. Helmut Perlet,
Jean-Jacques Cette, Ira Gloe-Semler
Risk Committee: Dr. Helmut Perlet (Chairman), Christine Bosse, Peter Denis Sutherland,
Dante Barban, Franz Heiß
Nomination Committee: Dr. Helmut Perlet (Chairman), Prof. Dr. Renate Köcher,
Peter Denis Sutherland
AUDiT OF ANNUAL ACCOUNTS AND CONSOLiDATeD FiNANCiAL STATeMeNTS
In compliance with the special legal provisions applying to insurance companies, the statutory
auditor and the auditor for the review of the half-yearly financial report are appointed by the
Supervisory Board of Allianz SE and not by the AGM. The Supervisory Board has appointed KPMG
as statutory auditor for the annual Allianz SE and consolidated financial statements as well as
for the review of the half-yearly financial report. KPMG audited the financial statements of
Allianz SE and the Allianz Group as well as the respective management reports. They issued an
auditor’s report without any reservations. The consolidated financial statements were pre-
pared on the basis of the international financial reporting standards (IFRS), as adopted in the
European Union. KPMG performed a review of the half-yearly and quarterly financial reports.
All Supervisory Board members received the documentation relating to the annual financial
state ments and the auditor’s reports from KPMG for the 2013 fiscal year on schedule. The provi-
sional financial statements and KPMG’s audit results were discussed in the Audit Committee
Annual Report 2013
Allianz Group
15
on 25 February 2014 and in the plenary session of the Supervisory Board on 26 February 2014.
The final financial statements and KPMG’s audit reports were reviewed on 13 March 2014 by the
Audit Committee and in the Supervisory Board plenary session. The auditors participated in
these discussions and presented the main results from the audit. No material weaknesses in
the internal financial reporting control process were discovered. There were no circumstances
that might give cause for concern about the auditor’s independence.
On the basis of our own reviews of the annual Allianz SE and consolidated financial statements,
the management and group management reports and the recommendation for appropriation
of earnings, we raised no objections and agreed with the results of the KPMG audit. We approved
the Allianz SE and consolidated financial statements prepared by the Board of Management.
The company’s financial statements are therefore adopted. We agree with the Board of Man-
agement’s proposal on the appropriation of earnings.
The Supervisory Board would like to thank all Allianz Group employees for their great personal
commitment over the past year.
MeMBerS OF THe SUPerviSOrY BOArD AND BOArD OF MANAGeMeNT
Dr. Gerhard Cromme resigned as a member of the Supervisory Board effective 14 August 2012.
Christine Bosse was initially appointed to the Supervisory Board by court order as his successor.
On 7 May 2013, the AGM elected Ms Bosse to the Supervisory Board. The current term of the
Supervisory Board will expire following the 2017 AGM.
On 1 January 2013, Board of Management members Mr. Oliver Bäte and Dr. Dieter Wemmer
exchanged their responsibilities. Mr. Bäte took over responsibility for Insurance Western &
Southern Europe. Dr. Wemmer took over responsibility for Finance, Controlling, Risk.
Munich, 13 March 2014
For the Supervisory Board:
Dr. Helmut Perlet
Chairman
16
Annual Report 2013
Allianz Group
A
To Our Investors
5
Letter to the Investors
10 Supervisory Board Report
Supervisory Board
17
18 Board of Management
20 International Executive Committee
21 Allianz Share
Supervisory Board
Dr. Helmut Perlet
Chairman
Former Member of the Board of Management of
Allianz SE
Jean-JaCques Cette
Chairman of the Group Works Council of
Allianz France S.A.
Dr. Wulf H. Bernotat
Vice Chairman
Former Chairman of the Board of Management of
E.ON AG
rolf Zimmermann
Vice Chairman
Employee of Allianz Deutschland AG
Dante BarBan
Employee of Allianz S.p.A.
CHristine Bosse
Former Group Chief Executive Officer of
the Executive Management of Tryg
GaBriele BurkHarDt-BerG
Chairwoman of the Group Works Council of
Allianz SE
ira Gloe-semler
Chairwoman of the federal insurance group of
ver.di Germany
franZ Heiss
Employee of Allianz Beratungs- und Vertriebs-AG
Prof. Dr. renate köCHer
Head of Institut für Demoskopie Allensbach
(Allensbach Institute)
iGor lanDau
Member of the Board of Directors of
Sanofi S.A.
Peter Denis sutHerlanD
Chairman of Goldman Sachs International
Annual Report 2013
Allianz Group
17
Board of Management
miCHael Diekmann
Chairman of the Board of Management
Dr. Werner ZeDelius
Insurance German Speaking Countries,
Human Resources
Dr. Dieter Wemmer
Finance, Controlling, Risk
Gary BHoJWani
Insurance USA
Dr. CHristof masCHer
Operations
18
Annual Report 2013
Allianz Group
A
To Our Investors
5
Letter to the Investors
10 Supervisory Board Report
Supervisory Board
17
18 Board of Management
20 International Executive Committee
21 Allianz Share
Dr. HelGa JunG
Insurance Iberia & Latin America,
Legal & Compliance, M & A
oliver Bäte
Insurance Western & Southern Europe
manuel Bauer
Insurance Growth Markets
Dr. maximilian Zimmerer
Investments
Clement BootH
Global Insurance Lines & Anglo Markets
Jay ralPH
Asset Management Worldwide
Annual Report 2013
Allianz Group
19
International Executive Committee
viCente tarDío Barutel
Allianz Companía de Seguros y Reaseguros
Spain
axel tHeis
Allianz Global Corporate & Specialty
Germany
anDreW torranCe
Fireman’s Fund Insurance Company
USA
WilfrieD verstraete
Euler Hermes
France
Dieter Wemmer
Allianz SE
Germany
Walter WHite
Allianz Life Insurance Company of North America
USA
Werner ZeDelius
Allianz SE
Germany
maximilian Zimmerer
Allianz SE
Germany
rÉmi Grenier
Allianz Global Assistance
France
DouG HoDGe
as of 18 March 2014
PIMCO
USA
HelGa JunG
Allianz SE
Germany
Wolfram littiCH
Allianz Elementar
Austria
CHristof masCHer
Allianz SE
Germany
severin moser
Allianz Suisse
Switzerland
niran Peiris
Allianz Australia
Australia
Jay ralPH
Allianz SE
Germany
JaCques riCHier
Allianz France
France
markus riess
Allianz Deutschland AG
Germany
klaus-Peter röHler
Allianz S.p.A.
Italy
GeorGe sartorel
Allianz SE – Asia-Pacific
Singapore
miCHael Diekmann
Chairman, Allianz SE
Germany
amer aHmeD
Allianz Re
Germany
solmaZ altin
Allianz Sigorta A.S.
Turkey
oliver Bäte
Allianz SE
Germany
manuel Bauer
Allianz SE
Germany
Gary BHoJWani
Allianz SE
Germany
Clement BootH
Allianz SE
Germany
BruCe BoWers
CEEMA
Germany
eliZaBetH Corley
Allianz Global Investors
Germany
Jon Dye
Allianz Insurance PLC
United Kingdom
moHameD el-erian
PIMCO
USA
roBert franssen
Allianz Benelux
Belgium
20
Annual Report 2013
Allianz Group
A
To Our Investors
5
Letter to the Investors
10 Supervisory Board Report
Supervisory Board
17
18 Board of Management
20 International Executive Committee
21 Allianz Share
Allianz Share
− Allianz shares gain 24.4 % as stock markets rally.
− Dividend rises to € 5.30.
Bullish equity markets
After a lackluster start to the year 2013, European share prices started
to fall in the spring, prompted by the financial crisis in Cyprus and
the difficult political situation in Italy. As these economies started to
heal, and with markets expecting central banks to stick to their
expansionary monetary policies, share prices started to pick up con-
siderably – before coming to an abrupt stop in June. This was trig-
gered by hints made by the Federal Reserve Bank that it might start
scaling down its bond purchase program before the end of 2013.
Investors reacted by pulling considerable amounts of money out of
the stock and bond markets – particularly from emerging markets.
After further comments by the Federal Reserve Bank then suggested
that an end to – or a restriction of – bond purchases was not looming
on the horizon after all, share prices rallied during the second half of
the year.
Allianz price significantly up
The gains made by Allianz shares in the previous year continued in a
dynamic fashion in 2013, climbing by 24.4 % to € 130.35. Assuming that
the dividend was reinvested in Allianz shares, total shareholder
return amounted to 29.1 %. This rising share price reflects the com-
pany’s encouraging business development. The increase of our share
price, however, was somewhat less than the STOXX Europe 600 Insur-
ance (+ 28.9 %) as market fears intensified during the course of the year
that rising interest rates in the United States would slow down growth
of our asset manager PIMCO. Allianz shares did, however, clearly out-
perform cross-industry indices like the EURO STOXX 50 (+17.9 %).
Following the publication of the 2013 results, 59 % of analysts
issued a “buy” recommendation for Allianz shares – with an average
price target of € 140. For analysts’ current recommendations and earn-
ings estimates, please refer to
www.allianz.com/analystsrecommendations.
Rising share prices in 2013 also confirmed Allianz shares as an
attractive investment for the longer term. For example, investors who
have held our shares in their portfolios for five years and opted to
reinvest their dividends in Allianz shares will have earned an average
annual total shareholder return of 17.1 %.
Annual Report 2013
Allianz Group
Development of the AlliAnz shAre price versus stoXX europe 600 insurAnce
AnD euro stoXX 50
indexed on the Allianz share price in €
140
130
120
110
100
1Q
2Q
3Q
4Q
Allianz
STOXX Europe 600 Insurance
EURO STOXX 50
Source: Thomson Reuters Datastream
AnAlysts’ recommenDAtions
as of 28 February 2014 in %
Sell 10
Hold 31
Source: Bloomberg
Buy 59
AlliAnz shAre performAnce in compArison
average annual performance in %
Allianz (excl. dividends)
Allianz (incl. dividends)
stoXX Europe 600 Insurance
euro stoXX 50
DAX
Source: Thomson Reuters Datastream
1 year
2013
5 years
2009 – 2013
10 years
2004 – 2013
24.4
29.1
28.9
17.9
25.5
11.7
17.1
11.1
4.9
14.7
2.7
6.4
2.8
1.2
9.2
21
shAre price Development AgAinst stoXX europe 600 insurAnce
€
200
175
150
125
100
75
50
25
178.64
133.92
145.92
156.75
111.20
129.70
89.72
111.15
73.87
88.36
95.43
76.67
46.64
48.68
130.80
101.75
108.05
105.85
57.47
70.02
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
Allianz share price
Allianz highs and lows
STOXX Europe 600 Insurance (indexed on the Allianz share price)
Source: Thomson Reuters Datastream
Higher dividend
Allianz shares as a sustainable investment
Given our positive business development, we will propose to increase
the dividend by € 0.80 to € 5.30 to the Annual General Meeting. Based
on the year-end share price, this corresponds to a dividend yield of
4.1 %. The payout ratio, based on net income 1 for 2013, is 40 % 2.
High weighting in major indices
Allianz is one of the most highly valued financial services providers
in the world, with our strength reflected in the weighting of Allianz
shares in major German, European and global indices. In the STOXX
Europe 600 Insurance, which includes 37 insurance companies, our
shares carry the greatest weight. In the MSCI World Financials index
we are among the top firms.
Our sustainable entrepreneurial approach has long been recognized
and resulted in our stock’s listing in major sustainability indices such
as the Dow Jones Sustainability Index and the FTSE4Good. This is just
one of the reasons why we are considered one of the most sustainable
financial services providers worldwide.
With our Environmental, Social and Governance Board we dem-
onstrate our commitment to sustainability. We believe the Allianz
Group’s focus on and clear commitment to environmental, social
and governance issues in all our business activities enhances the
attractiveness of Allianz shares for investors.
For further information on sustainability in the Allianz Group,
please refer to the Progress in Sustainable Development chapter
starting on
www.allianz.com/sustainability.
page 59 and to
Weighting of AlliAnz shAres in mAjor inDices
Shareholder structure
as of 31 December 2013
DAX
euro stoXX 50
stoXX Europe 600 Insurance
msci World Financials
msci World
Source: Deutsche Börse Group, STOXX Limited, MSCI
Weighting
in %
Ranking
Index
members
7.3
3.1
13.4
1.2
0.3
5
10
1
14
73
30
50
37
340
1,610
With around 430,000 shareholders, Allianz is one of the most widely
held publicly-owned corporations in Europe. Apart from approxi-
mately 0.6 % of Allianz shares held in treasury, all of our shares con-
tinue to be held in free float. At the end of the year, 86 % were held by
institutional investors and 14 % by private investors. The breakdown
by region shows that 69 % of Allianz shares were owned by Europeans
and 31 % by non-Europeans.
For up-to-date information on our shareholder structure, please
refer to
www.allianz.com/shareholders.
1
2
Based on net income after non-controlling interests.
Total dividend based on total amount of shares. Actual dividend payment will be reduced by the dividend
amount attributable to treasury shares.
22
Annual Report 2013
Allianz Group
A
To Our Investors
5
Letter to the Investors
10 Supervisory Board Report
Supervisory Board
17
18 Board of Management
20 International Executive Committee
21 Allianz Share
AlliAnz shAre key indicAtors At A glAnce
Total number of issued shares as of 31 December
Weighted average number of shares outstanding
Share price as of 31 December
High of the year
Low of the year
Share price performance in the year
Beta coefficient 1
Market capitalization as of 31 December
Average number of shares traded per day (Xetra)
Basic earnings per share 2
Price-earnings ratio
Dividend per share
Total dividend
Dividend yield as of 31 December
Payout ratio 2,5
Return on equity after income tax 2,5,6
2013
2012
2011
2010
2009
456,500,000
455,950,000
455,300,000
454,500,000
453,900,000
453,297,832
452,666,296
451,764,842
451,280,092
450,845,024
€
€
€
%
€ bn
mn
€
€
€ mn
%
%
%
130.35
130.80
101.75
24.4
1.3
59.5
1.7
13.23
9.9
5.303
2,4193,4
4.13
404
11.9
104.80
105.85
70.02
41.8
1.1
47.8
2.4
11.56
9.2
4.50
2,039
4.3
39
11.1
73.91
108.05
57.47
(16.9)
1.5
33.7
3.1
5.74
13.1
4.50
2,037
6.1
79
5.9
88.93
95.43
76.67
2.0
0.9
40.4
2.5
11.20
7.9
4.50
2,032
5.1
40
11.9
87.15
88.36
48.68
16.2
1.4
39.6
3.0
9.33
9.3
4.10
1,850
4.7
40
12.5
1
2
3
In comparison with EURO STOXX 50, source: Bloomberg.
Prior year figures have been restated to reflect the retrospective application of the amended standard
IAS 19 – Employee Benefits, effective as of 1 January 2013. For further information, please refer to note 4
to the consolidated financial statements. Figures prior to 2011 have not been adjusted retrospectively.
Proposal.
4
5
6
Total dividend based on total amount of shares. Actual dividend payment will be reduced by the dividend
amount attributable to treasury shares.
Based on net income from continuing operations after non-controlling interests.
Based on average shareholders‘ equity. Average shareholders‘ equity has been calculated based upon the
average of the current and the preceding year’s shareholders’ equity as of 31 December.
bAsic shAre informAtion
Share type
Security codes
Bloomberg
Reuters
Registered shares with restricted transfer
Wkn 840 400
isin de 000 840 400 5
AlV gr
0#AlVg.deU
Service and Contact
Allianz Investor Line
Mon – Fri: 8 am – 8 pm CET
Phone: +49.89.3800-7555
Email: investor.relations@allianz.com
Find out online
www.allianz.com/investor-relations
Allianz Investor Relations App
Important dates for shareholders and analysts
See financial calendar (back cover)
Annual Report 2013
Allianz Group
23
24
Annual Report 2013
Allianz Group
Sital Bhambra,
Senior Motor Fleet Underwriter,
Allianz Employee,
United Kingdom
Our employees are key to our success.
We promote their development inten-
sively and help them expand their
knowledge and gain new experiences
on a continual basis. This enables us to
consistently improve our performance
and minimize the business risks facing
our community.
B _ CoRPoRAte GoveRnAnCe
27
32
34
37
Corporate Governance Report
Statement on Corporate Manage ment pursuant to § 289a of the HGB
(part of the Group Management Report)
Takeover-related Statements and Explanations
(part of the Group Management Report)
Remuneration Report
(part of the Group Management Report)
Pages 26 – 46
26
Annual Report 2013
Allianz Group
B
Corporate Governance
27
32
Corporate Governance Report
Statement on Corporate Management
pursuant to § 289a of the HGB
34 Takeover-related Statements
and Explanations
37 Remuneration Report
Corporate Governance Report
Good corporate governance is essential for sustainable business per-
formance. The Board of Management and the Supervisory Board of
Allianz SE attach great importance to complying with the recommen-
dations of the German Corporate Governance Code (referred to here-
inafter as the “Code”). Allianz SE complies with all but one of the cur-
rent Code’s recommendations and with all its suggestions. The
Declaration of Conformity issued by the Board of Management and
Supervisory Board on 12 December 2013 and the company’s position
regarding the Code’s suggestions can be found in the Statement on
Corporate Management pursuant to § 289a of the HGB starting on
page 32.
Corporate constitution
of the European Company
As a European Company, Allianz SE is subject to special European SE
regulations and the German SE Implementation Act (SE-Ausführungs-
gesetz) in addition to German stock corporation law. The main fea-
tures of the German stock corporation – in particular the two-tier
board system (Board of Management and Supervisory Board) and the
principle of equal employee representation on the Supervisory Board
– have been maintained by Allianz SE. For further details on the differ-
ences between a German stock corporation and a European Company
with a registered office in Germany, please refer to
www.allianz.com/
allianz-se.
Function of the Board of Management
The Board of Management manages Allianz SE and the Allianz Group.
It currently comprises eleven members. Its responsibilities include
setting business objectives and the strategic direction, coordinating
and supervising the operating entities, as well as implementing and
overseeing an efficient risk management system. In this context, the
Board of Management is responsible for monitoring adherence to
statutory provisions and official regulations. The Board of Manage-
ment also prepares the quarterly and half-yearly financial reports, as
well as the Group’s consolidated financial statements and the annu-
al financial statements of Allianz SE.
The members of the Board of Management are jointly responsi-
ble for management. Notwithstanding this overall responsibility, the
individual members of the Board head the departments they have
been assigned independently. There are divisional responsibilities
for business segments as well as functional responsibilities. The latter
include the Chairman’s division, the Finance-, Risk Management-
and Controlling-Function, Investments, Operations – including IT –,
Human Resources, Legal and Compliance, and Mergers & Acquisi-
tions. Business division responsibilities focus on geographic regions
or operating segments, such as Asset Management. Rules of proce-
dure specify in more detail the work of the Board of Management.
Such rules set out for the specific responsibilities of Board members,
matters reserved for the whole Board and other procedures necessary
to pass resolutions.
Regular Board of Management meetings are led by the Chair-
man. Each member of the Board may request a meeting, providing
notification of the proposed resolution. The Board takes decisions by
ordinary resolution of participating members. In the event of a tie,
the Chairman casts the deciding vote. The Chairman can also veto
decisions but cannot impose any decisions against the majority vote
on the Board of Management.
Board of ManaGeMent and Group CoMMittees
In the financial year 2013, the following Board committees helped to
improve the efficiency of the work done by the Board of Management.
Board CoMMittees
Board CoMMittees
responsiBiLities
Group CapitaL CoMMittee
Michael Diekmann (Chairman),
Dr. Dieter Wemmer,
Dr. Maximilian Zimmerer
Group finanCe CoMMittee
Dr. Maximilian Zimmerer (Chairman),
Dr. Helga Jung,
Jay Ralph,
Dr. Dieter Wemmer,
Dr. Werner Zedelius
Group it CoMMittee
Dr. Christof Mascher (Chairman),
Jay Ralph,
Dr. Dieter Wemmer,
Dr. Werner Zedelius
Group risk CoMMittee
Dr. Dieter Wemmer (Chairman),
Clement Booth,
Jay Ralph,
Dr. Maximilian Zimmerer
as of 31 December 2013
Proposals to the Board of Management
concerning risk strategy, strategic
asset allocation and risk capital
allocation within the Group.
Deciding on material investments,
preparing and monitoring the Group’s
investment policy, financing and
capital management.
Developing, implementing and
monitoring a Group-wide it strategy,
approval of relevant it investments.
Establishing and overseeing a
Group-wide risk management and
monitoring system.
Besides Board committees, there are also Group committees whose
job it is to prepare decisions for the Board of Management of Allianz SE,
submit proposals for resolutions and ensure the smooth flow of
information within the Group.
Annual Report 2013
Allianz Group
27
Group CoMMittees
Group CoMMittees
responsiBiLities
Group CoMpensation CoMMittee
Board members and executives reporting
to the Allianz se Board of Management
Group underwritinG CoMMittee
Members of the Board of Management,
executives below Allianz se Board level and
Chief Underwriting Officers of Group
companies
internationaL exeCutive CoMMittee
All members of the Board of Management
of Allianz se and Managing Directors of the
major subsidiaries of Allianz Group
Designing, monitoring and improving
compensation systems, annual
submission of a report on the results of
its monitoring, along with proposals
for improvements.
Monitoring of the underwriting
business and related risk management,
developing an underwriting policy and
strategy.
Discussion of overall strategic issues
for the Allianz Group (for composition,
see page 20).
The responsibilities and composition of the Board of Management
and Group committees are set out in the respective Rules of Proce-
dure, which require the approval of the Board of Management. In
December 2013, the Board approved certain changes to the responsi-
bilities of the Board and Group committees to harmonize them with
the responsibilities of Board members. These changes come into
force in financial year 2014.
The Allianz Group runs its operating entities and business seg-
ments via an integrated management and control process. The Hold-
ing and the operating entities first define the business strategies and
goals. On this basis, joint plans are then prepared for the Supervisory
Board’s consideration when setting targets for performance-based
remuneration of the members of the Board of Management (for
details, please see the Remuneration Report starting on
page 37).
When filling managerial positions, the Board of Management takes
diversity into consideration. For example, 30 % of managerial positions
in the Allianz Group in Germany are targeted to be filled by women
by 2015.
The Board of Management reports regularly and comprehen-
sively to the Supervisory Board on business development, the finan-
cial position and earnings, budgeting and achievement of objectives,
business strategy and risk exposure.
Certain important decisions of the Board of Management
require approval by the Supervisory Board. Some of these require-
ments are stipulated by law or by decisions of the Annual General
Meeting (AGM). These include approval for the Board of Management
to increase the share capital (Authorized Capital), acquire treasury
shares or issue convertible bonds or bonds with warrants. In addition,
the Statutes also provide approval requirements for certain transac-
tions, such as intercompany agreements and the launch of new busi-
ness segments or closure of existing ones, insofar as such actions are
material to the Group. Approval is also required for acquisitions of
companies and holdings in companies as well as divestments of
Group companies which exceed certain threshold levels. The Agree-
ment concerning the Participation of Employees in Allianz SE requires
28
Annual Report 2013
Allianz Group
the approval of the Supervisory Board for the appointment of the
member of the Board of Management responsible for employment
and social welfare.
Principles and function
of the Supervisory Board
The German Co-Determination Act (Mitbestimmungsgesetz) does
not apply to Allianz SE because it has the legal form of a European
Company (SE). The size and composition of the Supervisory Board are
instead determined by general European SE regulations. These regu-
lations are implemented in the Statutes and by the Agreement con-
cerning the Participation of Employees in Allianz SE dated 20 Septem-
ber 2006. The agreement can be found on our website at
www.
allianz.com/allianz-se.
The Supervisory Board comprises twelve members appointed by
the AGM. Six of these twelve members are appointed on the basis of
proposals from employees, which the AGM is bound to accept.
In accordance with the Agreement concerning the Participation
of Employees in Allianz SE, the seats for the six employee representa-
tives are allocated in proportion to the number of Allianz employees
in the different countries. The Supervisory Board currently in office
comprises four employee representatives from Germany and one
each from France and Italy. The last regular election of the Super-
visory Board took place in May 2012 for a term lasting until the end of
the ordinary AGM in 2017.
The Supervisory Board oversees and advises the Board of Man-
agement on managing the business. It is also responsible for appoint-
ing the members of the Board of Management, determining their
overall remuneration and reviewing Allianz SE’s and the Allianz
Group’s annual financial statements. The Supervisory Board’s activi-
ties in the 2013 financial year are described in the Supervisory Board
Report starting on
page 10.
The Supervisory Board held six regular meetings in financial
year 2013 and is scheduled to meet three times each half calendar
year in the future. Extraordinary meetings may be convened as needed.
The committees also hold regular meetings. The Supervisory Board
takes all decisions based on a simple majority. The special require-
ments for appointing members to the Board of Management con-
tained in the German Co-Determination Act and the requirement for
a Conciliation Committee do not apply to an SE. In the event of a tie,
the casting vote lies with the Chairman of the Supervisory Board, who
at Allianz SE must be a shareholder representative. If the Chairman is
not present in the event of a tie, the casting vote lies with the deputy
chairperson from the shareholder side. A second deputy chairperson
is elected on the proposal of the employee representatives.
The Supervisory Board regularly reviews the efficiency of its
activities. The plenary Supervisory Board discusses recommenda-
tions for improvements and adopts appropriate measures on the
basis of recommendations from the Standing Committee.
B
Corporate Governance
27
32
Corporate Governance Report
Statement on Corporate Management
pursuant to § 289a of the HGB
34 Takeover-related Statements
and Explanations
37 Remuneration Report
supervisory Board CoMMittees
Part of the Supervisory Board’s work is carried out by its committees.
The composition of committees and the tasks assigned to them are
regulated by the Supervisory Board’s Rules of Procedure. The Supervi-
sory Board receives regular reports on the activities of its committees.
puBLiCation of detaiLs
of MeMBers’ partiCipation in MeetinGs
The Supervisory Board considers it good corporate governance to
publish the details of individual members’ participation in plenary
sessions and committee meetings.
supervisory Board CoMMittees
puBLiCation of detaiLs of MeMBers’ partiCipation in MeetinGs
supervisory Board
CoMMittees
standinG CoMMittee
5 members
− Chairman: Chairman
of the Supervisory Board
(Dr. Helmut Perlet)
− Two further shareholder
representatives
(Prof. Dr. Renate Köcher,
Dr. Wulf H. Bernotat)
responsiBiLities
− Approval of certain transactions which require
approval of the Supervisory Board, e.g. capital
increases, acquisitions and disposals of
participations
− Preparation of the Declaration of Compliance
pursuant to § 161 Aktiengesetz (German Stock
Corporation Act) and control of corporate
governance
− Preparation of the self-evaluation of the
− Two employee represen tatives
Supervisory Board
− Initial review of the annual Allianz se and consoli -
dated financial statements, management reports
(incl. Risk Report) and the dividend proposal,
review of half-yearly and quarterly financial reports
− Monitoring of the financial reporting process, the
effectiveness of the internal control and audit
system and legal and compliance issues
− Monitoring of the audit procedures, including the
independence of the auditor and the services
additionally rendered, awarding of the audit
contract and discussion of key issues related to the
external audit
− Monitoring of the risk situation and special risk
developments in the Allianz Group
− Monitoring of the effectiveness of the risk
management system
− Initial review of the Risk Report and other
risk-related statements in the annual financial
statements and management reports of Allianz se
and the Allianz Group, informing the Audit
Committee on the results of such reviews
pLenary sessions
of tHe supervisory Board
Dr. Helmut Perlet (Chairman)
Dr. Wulf H. Bernotat (Vice Chairman)
Rolf Zimmermann (Vice Chairman)
Dante Barban
Christine Bosse
Gabriele Burkhardt-Berg
Jean-Jacques Cette
Ira Gloe-Semler
Franz Heiß
Prof. Dr. Renate Köcher
Igor Landau
Peter Denis Sutherland
standinG CoMMittee
Dr. Helmut Perlet (Chairman)
Dr. Wulf H. Bernotat
Gabriele Burkhardt-Berg
Prof. Dr. Renate Köcher
Rolf Zimmermann
personneL CoMMittee
Dr. Helmut Perlet (Chairman)
Christine Bosse
Rolf Zimmermann
audit CoMMittee
− Preparation of the appointment of Board of
Dr. Wulf H. Bernotat (Chairman)
Management members
− Preparation of plenary session resolutions on the
compensation system and the overall
compensation of Board of Management members
− Conclusion, amendment and termination of
service contracts of Board of Management
members unless reserved for the plenary session
− Long-term succession planning for the Board of
Management, taking diversity into account and, in
particular, aiming for adequate representation of
women
− Approval of the assumption of other mandates by
Board of Management members
− Setting of concrete objectives for the composition
of the Supervisory Board
− Establishment of selection criteria for shareholder
representatives on the Supervisory Board in
compliance with the Code’s recommendations on
the composition of the Supervisory Board
− Selection of suitable candidates for election to the
Supervisory Board as shareholder representatives
Jean-Jacques Cette
Ira Gloe-Semler
Igor Landau
Dr. Helmut Perlet
risk CoMMittee
Dr. Helmut Perlet (Chairman)
Dante Barban
Christine Bosse
Franz Heiß
Peter Denis Sutherland
1
Excused.
(Gabriele Burkhardt-Berg,
Rolf Zimmermann)
audit CoMMittee
5 members
− Chairman: appointed
by the Supervisory Board
(Dr. Wulf H. Bernotat)
− Three shareholder represen -
tatives (Dr. Wulf H. Bernotat,
Igor Landau, Dr. Helmut Perlet)
− Two employee represen tatives
(Ira Gloe-Semler,
Jean-Jacques Cette)
risk CoMMittee
5 members
− Chairman: appointed by
the Supervisory Board
(Dr. Helmut Perlet)
− Three shareholder
representatives (Christine
Bosse, Dr. Helmut Perlet,
Peter Denis Sutherland)
− Two employee represen tatives
(Dante Barban, Franz Heiß)
personneL CoMMittee
3 members
− Chairman: Chairman
of the Supervisory Board
(Dr. Helmut Perlet)
− One further shareholder
representative
(Christine Bosse)
− One employee represen tative
(Rolf Zimmermann)
noMination CoMMittee
3 members
− Chairman: Chairman
of the Supervisory Board
(Dr. Helmut Perlet)
− Two further shareholder
representatives
(Prof. Dr. Renate Köcher,
Peter Denis Sutherland)
Annual Report 2013
Allianz Group
presenCe
in perCent
6/6
6/6
6/6
6/6
6/6
6/6
6/6
4/61
6/6
4/61
6/6
5/61
5/5
5/5
5/5
3/51
5/5
4/4
4/4
4/4
5/5
5/5
4/51
5/5
5/5
2/2
2/2
2/2
2/2
2/2
100
100
100
100
100
100
100
66.67
100
66.67
100
83.33
100
100
100
60
100
100
100
100
100
100
80
100
100
100
100
100
100
100
29
oBjeCtives of tHe supervisory Board
reGardinG its CoMposition
In order to implement a recommendation by the Code, the Super-
visory Board specified the following objectives for its composition at
its meeting on 12 December 2012:
oBjeCtives of tHe supervisory Board reGardinG its CoMposition
“The aim of Allianz se’s Supervisory Board is to have members who are equipped
with the necessary skills and competence to properly supervise and advise Allianz
se’s management. Supervisory Board candidates should possess the professional
expertise and experience, integrity, motivation and commitment, independence and
personality required to successfully carry out the responsibilities of a Supervisory
Board member in a financial-services institution with international operations. To
promote additional cooperation among Supervisory Board members, care should
be taken in selecting the candidates to ensure that adequate attention is paid
to ensuring diversity in occupational backgrounds, professional expertise and
experience.
Employee representation within Allianz se, as provided for by the se Agreement
concerning the Participation of Employees dated 20 September 2006, contributes to
diversity of work experience and cultural background. Pursuant to § 6 (2) sentence 2
of the Act on the Participation of Employees in a European Company (seBG), the
number of women and men appointed as German employee representatives should
be proportional to the number of women and men working in the German companies.
However, the Supervisory Board does not have the right to select the employee
representatives.
The following requirements and objectives apply to the composition of Allianz se’s
Supervisory Board:1
I. Requirements relating to the individual members
II. Requirements relating to the composition
of the Supervisory Board
of the Board as a whole
1. Specialist knowledge
–
At least one member must have considerable experience in the insurance and
financial-services fields
At least one member must have expert knowledge of accounting and auditing as
defined by § 100 (5) AktG
–
– Specialist knowledge of, or experience in, other economic sectors.
2. International character
At least four of the members must, on the basis of their origin or function, represent
regions or cultural areas in which Allianz se conducts significant business.
Since the establishment of Allianz se as a Societas Europaea (European Company),
Allianz employees from different Member States of the eu are considered in the
distribution of Supervisory Board seats for employee representatives, according
to the Agreement concerning the Participation of Employees in Allianz se dated
20 September 2006.
3. Diversity and appropriate representation of women
The members of the Supervisory Board shall complement one another regarding their
background, professional experience and specialist knowledge, in order to provide
the Supervisory Board with the most diverse sources of experience and specialist
knowledge possible.
The aim is for at least 25 % of the Supervisory Board members to be women. The
representation of women is generally considered to be the joint responsibility of the
shareholder and employee representatives.”
1. General selection criteria
– Managerial or operational experience
– General knowledge of the insurance and financial services business
–
– Fulfillment of the regulatory requirements:
Willingness and ability to make sufficient commitments in time and substance
– Reliability
– Knowledge of the field of corporate governance and supervisory law1
– Knowledge of the main features of accounting and risk management1
Compliance with the limitation on the number of mandates as recommended by
the German Corporate Governance Code and required by § 7a (4) of the German
Insurance Supervision Act (“Versicherungsaufsichtsgesetz – vaG”).
–
2. Independence
At least eight members of the Supervisory Board should be independent as defined
by No. 5.4.2 of the Corporate Governance Code, i.e. they may not have any business
or personal relations with Allianz se or its Board of Management, a controlling
shareholder or an enterprise associated with the latter, which may cause a substantial
and not merely temporary conflict of interests. In case shareholder representatives
and employee representatives are viewed separately, at least four members should
be independent within the meaning of No. 5.4.2 of the Corporate Governance Code,
respectively. Regarding employee representatives, however, the mere fact of
employee representation and the existence of a working relationship with the
company shall not itself affect independence.
In addition, at least one member must be independent within the meaning of § 100
(5) of the German Stock Corporation Act.
It must be taken into account that the possible emergence of conflicts of interest in
individual cases cannot, as a general rule, be excluded. Potential conflicts of interest
must be disclosed to the Chairman of the Supervisory Board and will be resolved by
appropriate measures.
3. Retirement age
According to the Supervisory Board’s Rules of Procedure, its members may not, in
general, be older than 70 years of age.
1
See the BaFin notice on the monitoring of members of administrative and supervisory bodies pursuant
to the German Banking Act (KWG) and the German Insurance Supervision Act (VAG) dated 3 December
2012.
30
Annual Report 2013
Allianz Group
B
Corporate Governance
27
32
Corporate Governance Report
Statement on Corporate Management
pursuant to § 289a of the HGB
34 Takeover-related Statements
and Explanations
37 Remuneration Report
The composition of the Supervisory Board of Allianz SE reflects these
objectives. It has an appropriate number of independent members
with international backgrounds. With a current complement of four
female members, the goal of ensuring that women are adequately
represented on the Supervisory Board is being met. The current com-
position of the Supervisory Board and its committees is described on
page 15.
Shares held by members of the Board of
Management and the Supervisory Board
The total holdings of members of the Board of Management and the
Supervisory Board of Allianz SE amounted to less than 1 % of the com-
pany’s issued shares as of 31 December 2013.
Directors’ dealings
Members of the Board of Management and the Supervisory Board are
obliged by the German Securities Trading Act (Wertpapierhandels-
gesetz) to disclose any transactions involving shares of Allianz SE or
financial instruments based on them to both Allianz SE and the Ger-
man Federal Financial Supervisory Authority should the value of the
shares acquired or divested by the member or a person closely asso-
ciated to the member, amount to five thousand Euros or more within
a calendar year. Such disclosures are published on our website at
www.allianz.com/supervisory-
www.allianz.com/management-board and
board.
Annual General Meeting
Shareholders exercise their rights at the AGM. When adopting resolu-
tions, each share carries one vote. In order to facilitate the exercise of
shareholders’ rights, Allianz SE allows shareholders to follow the
AGM’s proceedings on the internet and be represented by proxies
appointed by Allianz SE. These proxies exercise voting rights exclu-
sively on the basis of instructions given by the shareholder. Share-
holders are also able to cast their votes by postal voting. This option
is also available via the internet in the form of online voting. Allianz SE
regularly promotes the use of email and internet services.
The AGM elects the members of the Supervisory Board and
approves the actions taken by the Board of Management and the
Supervisory Board. It decides on the use of profits, capital transac-
tions and the approval of intercompany agreements, as well as the
remuneration of the Supervisory Board and changes to the company’s
Statutes. In accordance with European regulations and the Statutes,
changes to the Statutes require a two-thirds majority of votes cast in
case less than half of the share capital is represented in the AGM. Each
year, an ordinary AGM takes place at which the Board of Management
and Supervisory Board give an account of the preceding financial
year. For special decisions, the German Stock Corporation Act pro-
vides for the convening of an extraordinary AGM.
Accounting policies and
audit of financial statements
The Allianz Group prepares its accounts according to § 315a of the
German Commercial Code (“Handelsgesetzbuch – HGB”), on the
basis of IFRS international accounting standards as adopted within
the European Union. The annual financial statements of Allianz SE
are prepared in accordance with German law, in particular the HGB.
In compliance with special legal provisions that apply to insur-
ance companies, the auditor of the annual financial statements and
of the half-yearly financial report is appointed by the Supervisory
Board and not by the AGM. The audit of the financial statements
covers the individual financial statements of Allianz SE and also the
consolidated financial statements of the Allianz Group.
To ensure maximum transparency, we inform our shareholders,
financial analysts, the media and the general public of the company’s
situation on a regular basis and in a timely fashion. The annual
financial statements of Allianz SE, the Allianz Group’s consolidated
financial statements and the respective management reports are
published within 90 days of the end of each financial year. Additional
information is provided in the Allianz Group’s quarterly and half-
yearly financial reports, which are reviewed by the auditor. Information
is also made available at the AGM, at press conferences and analysts’
meetings, as well as on the Allianz Group’s website. Our website also
provides a financial calendar listing the dates of major publications
and events, such as annual reports, quarterly and half-yearly financial
reports and AGMs.
The financial calendar for 2014 can be found on our website at
www.allianz.com/financialcalendar.
Outlook
As it sets about implementing the regulatory requirements of the
future Solvency II supervisory regime, the Allianz Group will continue
to develop its existing governance system – particularly in the areas
of risk management and control systems.
Annual Report 2013
Allianz Group
31
Statement on Corporate Manage ment
pursuant to § 289a of the HGB
The Statement on Corporate Management pursuant to § 289a of the
German Commercial Code (“Handelsgesetzbuch – HGB”) forms part
of the Group Management Report. According to § 317 (2), sentence 3
of the HGB, this Statement does not have to be included within the
scope of the audit.
In addition, Allianz SE follows all the suggestions of the German Cor-
porate Governance Code Commission in its 13 May 2013 version and
also followed all suggestions in the previous version of 15 May 2012.
The Declaration of Conformity and further information on
corporate governance at Allianz can be found on our website at
Declaration of conformity with the
German Corporate Governance Code
On 12 December 2013, the Board of Management and the Supervisory
Board issued the following Declaration of Compliance of Allianz SE
with the German Corporate Governance Code:
DECLARATION OF CONFORMITY WITH THE GERMAN CORPORATE GOVERNANCE CODE
“Declaration of Conformity by the Management Board and the Supervisory
Board of Allianz SE with the recommendations of the German Corporate
Governance Code Commission in accordance with § 161 of the German Stock
Corporation Act (AktG)
1. Allianz SE fully complies and will continue to fully comply with the
recommendations of the German Corporate Governance Code Commission
(Code Commission) in the version of 13 May 2013, published by the
Federal Ministry of Justice in the official section of the Federal Gazette
(Bundesanzeiger), with the following exception:
According to Item 5.3.2. of the German Corporate Governance Code, the Audit
Committee of the Supervisory Board shall be responsible for the monitoring
of the risk management system. The Supervisory Board of Allianz SE has
additionally established a specific Risk Committee, which is, inter alia,
responsible for the monitoring of the risk management system instead of the
Audit Committee.
2. Since the last Declaration of Conformity as of 12 December 2012, Allianz SE
has fully complied with the recommendations of the Code Commission in the
version of 15 May 2012.
Munich, 12 December 2013
Allianz SE
For the Board of Management:
Signed Michael Diekmann
Signed Dr. Helga Jung
For the Supervisory Board:
Signed Dr. Helmut Perlet”
www. AlliAnz.com/corporAte-governAnce.
The listed Group company Oldenburgische Landesbank AG
issued its own Declaration of Conformity in December 2013, which
states that Oldenburgische Landesbank AG complies with all of the
recommendations of the German Corporate Governance Code in its
version of 13 May 2013.
Corporate governance practices
INTERNAL CONTROL SYSTEMS
Effective internal control systems for our internal and external finan-
cial reporting are essential in order to gain the confidence of the
capital market, our customers and the public. Consequently, the
Allianz Group has implemented a comprehensive risk management
system that involves regular assessments of the effectiveness of inter-
nal controls as well as a quantitative limit system that helps the com-
pany avoid unwanted risks. The internal requirements regarding the
control of financial reporting refer to accounting, the reporting of
Market Consistent Embedded Value (MCEV), and risk capital. For fur-
ther information on the risk organization and risk principles, please
refer to
pAge 119. (For further information on the internal controls
over financial reporting and risk capital, please refer to
pAge 123.)
The quality of the internal control systems is assessed by internal
audit staff of the Allianz Group who are independent of the activities
which are audited. Internal Audit is an independent, objective assur-
ance and consulting activity designed to add value and improve our
organization’s operations. It helps us to accomplish our objectives by
introducing a systematic, disciplined approach and thus contribut-
ing to the evaluation and improvement of the effectiveness of the risk
management, control and governance processes. Therefore, internal
audit activities are geared towards helping the company to mitigate
risks as well as further assist in strengthening its governance pro-
cesses and structures.
32
Annual Report 2013
Allianz Group
DESCRIPTION OF THE FUNCTIONS OF THE BOARD
OF MANAGEMENT AND THE SUPERVISORY BOARD AND
OF THE COMPOSITION AND FUNCTIONS OF THEIR
COMMITTEES
A description of the composition of the Supervisory Board and its
committees can be found on
pAges 15 And 17 of the Annual Report.
On
pAges 18 And 19, reference is made to the composition of the
Board of Management and a description of the composition of the
Board of Management’s committees can be found on
pAge 27 of
the Corporate Governance Report. The information can also be found
on our website at
www. AlliAnz.com/corporAte-governAnce.
A general description of the functions of the Board of Manage-
ment, the Supervisory Board and their committees can be found in
the Corporate Governance Report starting on
pAge 27 and on our
website at
www. AlliAnz.com/corporAte-governAnce.
B
Corporate Governance
27
32
Corporate Governance Report
Statement on Corporate Management
pursuant to § 289a of the HGB
34 Takeover-related Statements
and Explanations
37 Remuneration Report
COMPLIANCE PROGRAM
The sustained success of the Allianz Group is based on the respon-
sible behavior of all Group employees, who embody trust, respect and
integrity. By means of the global compliance program coordinated by
its independent central compliance department, Allianz supports
and follows internationally and nationally recognized guidelines and
standards for rules-compliant and value-based corporate gover-
nance. These include the principles of the United Nations (UN)
Global Compact, the Guidelines of the Organization for Economic
Co-operation and Development (OECD) for Multinational Enterprises,
and European and international standards on combating corruption
and bribery, combating money laundering and terrorism financing,
data protection, consumer protection, and economic and financial
sanctions. Allianz counteracts the risks that might arise from non-
compliance with legal regulations and provisions (compliance risk)
through its support for and acceptance of these standards. The cen-
tral compliance department is responsible, in close cooperation with
local compliance departments, for ensuring the effective implemen-
tation and monitoring of the compliance program within the Allianz
Group as well as for the investigation of potential compliance
infringements.
The standards of conduct established by the Allianz Group’s
Code of Conduct for Business Ethics and Compliance are obligatory
for all employees worldwide. The Code of Conduct is available on our
website at
www. AlliAnz.com/corporAte-governAnce.
The Code of Conduct and the internal guidelines derived from it
provide all employees with clear guidance on behavior that lives up
to the values of the Allianz Group. In order to transmit the principles
of the Code of Conduct and the internal compliance program based
on these principles, Allianz has implemented interactive training
programs around the world. These provide practical guidelines
which enable employees to come to their own decisions. The Code of
Conduct also forms the basis for guidelines and controls to ensure
fair dealings with Allianz Group customers (sales compliance).
There are legal provisions against corruption and bribery in
almost all countries in which Allianz has a presence. The global Anti-
Corruption Program of the Allianz Group ensures the continuous
monitoring and improvement of the internal anti-corruption con-
trols. (For further information on the Anti-Corruption Program,
please refer to Progress in Sustainable Development starting on
pAge 59.)
A major component of the Allianz Group’s compliance program
is a whistleblower system that allows employees to alert the relevant
compliance department confidentially about irregularities. Employ-
ees who voice concerns about irregularities in good faith should not
fear retribution in any form, even if the concerns turn out to be
unfounded at a later date.
Annual Report 2013
Allianz Group
33
Takeover-related Statements and Explanations
Statements pursuant to § 289 (4) and § 315 (4) of the German Commercial Code
(“Handelsgesetzbuch – HGB”) and explanatory report.
Composition of share Capital
As of 31 December 2013, the share capital of Allianz SE was € 1,168,640,000.
It was divided into 456,500,000 registered and fully paid-up shares
with no-par value and a corresponding share capital amount of € 2.56
per share. All shares carry the same rights and obligations. Each no-
par-value share carries one vote.
restriCtions on voting rights and share
transfers; exerCise of voting rights in Case
of employee equity partiCipations
Shares may only be transferred with the consent of the Company. The
Company may withhold a duly applied approval only if it deems this
to be necessary in the interest of the Company on exceptional grounds.
The applicant will be informed of the reasons.
Shares acquired by employees of the Allianz Group as part of the
Employee Stock Purchase Plan are in principle subject to a one-year
lock-up period. Outside Germany, the lock-up period may in some
cases be up to five years. In some countries, in order to ensure that
the lock-up period is observed, the employee shares are held through-
out that period by a bank, another natural person or a legal entity
acting as a trustee. Nevertheless, employees may instruct the trustee
to exercise voting rights or have power-of-attorney granted to them
to exercise such voting rights. Lock-up periods contribute to the
Employee Stock Purchase Plan’s aims of committing employees to
the Company and letting them benefit from the performance of the
stock price.
interests in the share Capital
exCeeding 10 % of the voting rights
No direct or indirect interests in the share capital of Allianz SE that
exceed 10 % of the voting rights have been reported to Allianz SE; nor
are we otherwise aware of any such interests.
shares with speCial rights
Conferring powers of Control
There are no shares with special rights conferring powers of control.
legal and statutory provisions appliCable to
the appointment and removal of members of
the board of management and to amendments of
the statutes
The Supervisory Board appoints the members of Allianz SE’s Board of
Management for a maximum term of five years (Article 9 (1), Article
39 (2) and Article 46 of the SE Regulation, §§ 84, 85 of the German Stock
Corporation Act and § 5 (3) of the Statutes). Reappointments, in each
case for a maximum of five years, are permitted. A simple majority of
the votes cast in the Supervisory Board is required to appoint mem-
bers of the Board of Management. In the case of a tie vote, the Chair-
person of the Supervisory Board, who pursuant to Article 42 sentence
2 of the SE Regulation must be a shareholder representative, shall
have the casting vote (§ 8 (3) of the Statutes). If the Chairperson does
not participate in the vote, the Deputy Chairperson shall have the
casting vote, provided he or she is a shareholder representative. A
Deputy Chairperson who is an employee representative has no cast-
ing vote (§ 8 (3) of the Statutes). If a required member of the Board of
Management is missing, in urgent cases the courts must appoint
such member upon the application of an interested party (§ 85 of the
German Stock Corporation Act). The Supervisory Board may dismiss
members of the Board of Management if there is an important reason
(§ 84 (3) of the German Stock Corporation Act).
According to § 5 (1) of the Statutes, the Board of Management
shall consist of at least two persons. Otherwise, the Supervisory Board
determines the number of members. The Supervisory Board has
appointed a Chairman of the Board of Management pursuant to
§ 84 (2) of the German Stock Corporation Act.
German insurance supervisory law requires that members of
the Board of Management have the reliability and professional com-
petence needed to manage an insurance company. A person cannot
become a member of the Board of Management if he or she is already
a manager of two other insurance undertakings, pension funds,
insurance holding companies or insurance special purpose vehicles.
However, the supervisory authority may permit more than two such
mandates if they are held within the same group (§§ 121a, 7a of the
German Insurance Supervision Act (“Versicherungsaufsichts gesetz”,
VAG)). The Federal Financial Services Supervisory Authority (“Bundes-
anstalt für Finanzdienstleistungsaufsicht”) must be notified about the
intention of appointing a Board of Management member pursuant
to §§ 121a, 13d No. 1 of the German Insurance Supervision Act.
34
Annual Report 2013
Allianz Group
B
Corporate Governance
27
32
Corporate Governance Report
Statement on Corporate Management
pursuant to § 289a of the HGB
34 Takeover-related Statements
and Explanations
37 Remuneration Report
Amendments to the Statutes must be adopted by the General
Meeting. § 13 (4) sentence 2 of the Statutes of Allianz SE stipulates that,
unless this conflicts with mandatory law, changes to the Statutes
require a two-thirds majority of the votes cast, or, if at least one half
of the share capital is represented, a simple majority of the votes cast.
The Statutes thereby make use of the option set out in § 51 sentence 1
of the SE Implementation Act (“SE-Ausführungsgesetz”) which is based
upon Article 59 (1) and (2) of the SE Regulation. A larger majority is,
inter alia, required for a change in the corporate object or the reloca-
tion of the registered office to another E.U. member state (§ 51 sen-
tence 2 of the SE Implementation Act). The Supervisory Board may
alter the wording of the Statutes (§ 179 (1) sentence 2 of the German
Stock Corporation Act and § 10 of the Statutes).
AutHorizAtion of tHe BoArd of MAnAGeMent
to issue And repurcHAse sHAres
The Board of Management is authorized to issue shares as well as to
acquire and use treasury shares as follows:
It may increase the Company’s share capital, on or before 4 May
2015, with the approval of the Supervisory Board, by issuing new reg-
istered no-par-value shares against contributions in cash and/or in
kind, on one or more occasions:
− Up to a total of € 550,000,000 (Authorized Capital 2010/I). The
shareholders’ subscription rights for these shares can be exclud-
ed, with the consent of the Supervisory Board, (i) for fractional
amounts, (ii) in order to safeguard the rights pertaining to hold-
ers of convertible bonds or bonds with warrants, (iii) in the event
of a capital increase against cash contribution of up to 10 % if the
issue price of the new shares is not significantly less than the
stock market price, (iv) within certain limitations, if the shares
are issued in connection with a listing of Allianz shares on a
stock exchange in the People’s Republic of China, and (v) in the
event of a capital increase against contributions in kind.
− Up to a total of € 8,344,000 (Authorized Capital 2010/II). The share-
holders’ subscription rights can be excluded in order to issue the
new shares to employees of Allianz SE and its Group companies
as well as for fractional amounts.
The Company’s share capital is conditionally increased by up to
€ 250,000,000 (Conditional Capital 2010). This conditional capital
increase will only be carried out to the extent that conversion or
option rights resulting from bonds issued by Allianz SE or its subsid-
iaries on the basis of the authorization of the General Meeting of
5 May 2010 are exercised, or that conversion obligations tied to such
bonds are fulfilled.
The Board of Management may buy back and use Allianz shares
for other purposes until 4 May 2015 on the basis of the authorization
of the General Meeting of 5 May 2010 (§ 71 (1) No. 8 of the German
Stock Corporation Act). Together with other treasury shares that are
held by Allianz SE or which are attributable to it under §§ 71a et seq.
of the German Stock Corporation Act, such shares may not exceed
10 % of the share capital at any time. The shares acquired pursuant to
this authorization may be used, under exclusion of the shareholders’
subscription rights, for any legally admissible purposes, and in par-
ticular those specified in the authorization. Furthermore, the acqui-
sition of treasury shares under this authorization may also be carried
out using derivatives such as put options, call options, forward pur-
chases or a combination thereof, provided such derivatives do not
relate to more than 5 % of the share capital.
Domestic or foreign banks that are majority owned by Allianz SE
may buy and sell Allianz shares for trading purposes (§ 71 (1) No. 7
and (2) of the German Stock Corporation Act) under an authorization
of the General Meeting valid until 4 May 2015. The total number of
shares acquired thereunder, together with treasury shares held by
Allianz SE or attributable to it under §§ 71a et seq. of the German Stock
Corporation Act, shall at no time exceed 10 % of the share capital of
Allianz SE.
essentiAl AGreeMents of AlliAnz se witH cHAnGe
of control clAuses And coMpensAtion AGreeMents
providinG for tAkeover scenArios
The following essential agreements of the Company are subject to a
change of control condition following a takeover bid:
− Our reinsurance contracts, in principle, include a provision
under which both parties to the contract have an extraordinary
termination right in the case where the other party to the contract
merges or its ownership or control situation changes materially.
Agreements with brokers regarding services connected with the
purchase of reinsurance cover also provide for termination
rights in case of a change of control. Such clauses are standard
market practice.
− The exclusive bancassurance distribution agreement between
Allianz and HSBC for life insurance products in Asia (China, Indo-
nesia, Malaysia, Australia, Sri Lanka, Taiwan, Brunei, Philip-
pines), includes a provision under which both parties have an
extraordinary termination right in case there is a change of
control of the other party’s ultimate holding company.
− The exclusive bancassurance distribution agreement between
Allianz SE and HSBC for life insurance products in Turkey includes
a provision under which both parties have an extraordinary ter-
mination right in case there is a change of control of the other
party’s ultimate holding company.
Annual Report 2013
Allianz Group
35
Under the Allianz Sustained Performance Plan (ASPP), Restricted
Stock Units (RSU) – i.e. virtual Allianz shares – are granted as a stock-
based remuneration component to senior management of the
Allianz Group worldwide. In addition, under the Group Equity Incen-
tive (GEI) scheme, Stock Appreciation Rights (SAR) – i.e. virtual
options on Allianz shares – were also granted until 2010. Some of
these are still outstanding. The conditions for these RSU and SAR con-
tain change of control clauses which apply if a majority of the voting
share capital in Allianz SE is acquired, directly or indirectly, by one or
more third parties which do not belong to the Allianz Group and
which provide for an exception from the usual exercise periods. The
RSU will be exercised, in line with their general conditions, by the
Company for the relevant plan participants on the day of the change
of control without observing any vesting period that would otherwise
apply. The cash amount payable per RSU must be at least the price
offered per Allianz share in a preceding tender offer. In case of a
change of control as described above, SAR will be exercised, in line
with their general conditions, by the Company for the relevant plan
participants on the day of the change of control without observing
any vesting period. By providing for the non-application of the block-
ing period in the event of a change of control, the terms take into
account the fact that the conditions under which the share price
moves are very different when there is a change in control.
− The framework agreements between Allianz SE and the subsi-
diaries of various car manufacturers (FCE Bank plc, Volkswagen
Financial Services AG, respectively) relating to the distribution
of car insurance by the respective car manufacturers each
include a provision under which each party has an extraordinary
termination right in case there is a change of control of the other
party.
− Bilateral credit agreements in some cases provide for termina-
tion rights if there is a change of control, mostly defined as the
acquisition of at least 30 % of the voting rights within the meaning
of § 29 (2) of the German Takeover Act (“Wertpapiererwerbs- und
Übernahmegesetz”, WpÜG). If such termination rights are exer-
cised, the respective credit lines have to be replaced by new
credit lines under conditions then applicable.
The Company has entered into the following compensation agree-
ments with members of the Board of Management and employees
providing for the event of a takeover bid:
A change of control clause in the service contracts of the mem-
bers of Allianz SE’s Board of Management provides that, if within 12
months after the acquisition of more than 50 % of the Company’s
share capital by one shareholder or several shareholders acting in
concert (change of control), the appointment as a member of the
Board of Management is revoked unilaterally by the Supervisory
Board, or if the mandate is ended by mutual agreement, or if the Man-
agement Board member resigns his or her office because the respon-
sibilities as a Board member are significantly reduced through no
fault of the Board member, he or she shall receive his or her contrac-
tual remuneration for the remaining term of the service contract, but
limited, for the purpose hereof, to three years, in the form of a one-off
payment. The one-off payment is based on the fixed remuneration
plus 50 % of the variable remuneration, however, this basis being lim-
ited to the amount paid for the last fiscal year. To the extent that the
remaining term of the service contract is less than three years, the
one-off payment is generally increased in line with a term of three
years. This applies accordingly if, within two years of a change of con-
trol, a mandate in the Board of Management is coming to an end and
is not extended; the one-off payment will then be granted for the
period between the end of the mandate and the end of the three-year
period after the change of control. For further details, please refer to
the Remuneration Report starting on
page 37.
36
Annual Report 2013
Allianz Group
B
Corporate Governance
27
32
Corporate Governance Report
Statement on Corporate Management
pursuant to § 289a of the HGB
34 Takeover-related Statements
and Explanations
37 Remuneration Report
Remuneration Report
This report covers the remuneration arrangements for the Board of
Management and the Supervisory Board of Allianz SE.
− Alignment with shareholder interests: 25 % of total target direct
remuneration is dependent upon share price performance.
The report is prepared in accordance with the requirements of
the German Commercial Code (HGB) and the International Financial
Reporting Standards (IFRS). It also takes into account § 64b Law on the
Supervision of Insurance Undertakings (“Versicherungsaufsichts
gesetz – VAG”), the requirements of the German Ministry of Finance’s
Insurance Remuneration Regulation (“VersicherungsVergütungs
verordnung – VersVergV”), and the recommendations of the German
Corporate Governance Code.
Allianz SE Board of Management
remuneration
GOVERNANCE SYSTEM
The remuneration of the Board of Management is decided upon by
the entire Supervisory Board. Such decisions are prepared by the Per
sonnel Committee. If required, outside advice is sought from inde
pendent external consultants. The Personnel Committee and the
Super visory Board consult with the Chairman of the Board of Manage
ment as appropriate in assessing the performance and remunera
tion of members of the Board of Management. The Chairman of the
Board of Management is not present when his own remuneration is
discussed. Regarding the activities and decisions taken by the Person
nel Committee and the Supervisory Board, please refer to the Super
visory Board Report section. The remuneration system for the Board
of Management was presented and approved at the 2010 Annual
General Meeting.
REMUNERATION PRINCIPLES AND MARKET POSITIONING
The key principles of Board of Management remuneration are as
follows:
− Support of the Group’s strategy: Performance targets reflect the
Allianz Group’s business strategy.
− Alignment of pay and performance: A significant performance
based, variable component.
− Variable remuneration focused on sustainability: Two thirds of
the variable remuneration reflect longerterm performance.
One third is a deferred payout after three years based on a sus
tainability assessment covering the threeyear period. The other
third rewards sustained performance through share price devel
opment with a deferred payout after five years.
The structure, weighting and level of remuneration is decided by the
Supervisory Board. Remuneration survey data is provided by external
consultants. The peer group consists primarily of other DAX 30 com
panies. Compensation levels usually vary between the median and
around the third quartile of this group. The structure of Allianz
Group’s total remuneration is more strongly weighted to variable,
longerterm components than in other DAX 30 companies. Remu
neration and benefit arrangements are also periodically compared
with best practices. The Supervisory Board takes remuneration levels
within the Group into account when assessing the appropriateness
of the remuneration of the Board of Management.
REMUNERATION STRUCTURE,
COMPONENTS AND TARGET SETTING PROCESS
There are four main remuneration components. Each has approxi
mately the same weighting within annual target remuneration: base
salary, annual bonus, annualized midterm bonus (MTB) and equity
related remuneration. The target compensation of each variable
component does not exceed the base salary, with the total target vari
able compensation not exceeding three times the base salary. In
addition Allianz offers pensions/similar benefits and perquisites.
Base salary
Base salary is the fixed remuneration component and is expressed
as an annual cash sum, paid in twelve monthly installments.
Variable remuneration
Variable remuneration aims to balance shortterm performance,
longerterm success and sustained value creation.
Each year, the Supervisory Board agrees on performance targets
for the variable remuneration with the members of the Board of Man
agement. These are documented for the upcoming financial year.
Every three years the MTB sustainability criteria are set for the follow
ing midterm period.
All variable awards are made under the rules and conditions of
the “Allianz Sustained Performance Plan” (ASPP) which consists of
the equally weighted components below. The grant of variable remu
neration components is related to performance and can vary between
0 % and 165 % of the respective target values. For a regular member of
the Board of Management with a base salary and target variable com
pensation of € 700 THou for each variable remuneration component
the minimum payout is € 700 THou if the performance was rated with
0 % and no variable component was granted. The maximum total
direct compensation (excluding perquisites) is € 4,165 THou if the
Annual Report 2013
Allianz Group
37
performance reached the 165 % cap: base salary € 700 THou + 165 % of
€ 2,100 THou (= total of the three variable compensation components
at target).
The performance of the Chairman is determined by the average
target achievement of the other Board of Management members
and can be adjusted by the Supervisory Board based on the
Chairman’s personal performance.
Variable compensation components:
− Annual bonus (shortterm): A cash payment which rewards the
achievement of quantitative and qualitative targets for the
respective financial year and is paid the year following the per
formance year. Quantitative targets represent 75 % and consist of
50 % Group targets (equally split between annual operating profit
and annual net income) and 25 % divisional targets. For the
divisional targets a new split was introduced for 2013: 10 % annual
operating profit, 10 % annual net income and 5 % dividend.
Quantitative targets for board members with a functional focus
are determined based on their key responsibilities. Qualitative
targets reflect the specific individual priorities for 2013 per
member of the Board of Management.
− MTB (midterm): A deferred award which reflects the achieve
ment of the annual targets by accruing an amount identical to
the annual bonus. The actual award is subject to a threeyear
sustainability assess ment and is paid at the end of a threeyear
performance cycle. The following criteria are considered:
− adjusted capital growth vs. planned development in light of
risk capital employed (adjusted capital essentially represents
the fair value of the shareholders’ equity)
− balance sheet strength, i.e. development of solvency capital
− comparison with peers
− “partner of choice” for stakeholders
− extraordinary events.
ILLUSTRATION Of THE PROCESS AND THE UNDERLYING TIMELINE Of THE MTB CYCLE, fROM TARGET SETTING TO fINAL PERfORMANCE ASSESSMENT1
€ THOU
Sustainability criteria
setting for the three-year
performance period
Notional accruals
Max: 3,465
165 %
Accrual
550
Accrual
620
Accrual
930
Total 2,100
Accrual
550
Accrual
620
Accrual
930
Target:
2,100
Initial accrued
amounts
±
Sustainability
assessment
=
Final payout
Dec 2012
20132
20142
20152
Min: 0
0 %
20163
Sustainability criteria setting
Performance period
Sustainability assessment & payout
Year 1
Year 2
Year 3
1
Example based on target values of a regular member of the Board of Management with an annual target
of € 700 THOU for the MTB. Accrual is only a notional indication.
2
3
Actual accrual for the MTB (mid-term) usually equals the annual bonus payout of the respective financial
year. Since the performance assessment and the final payout occur after completion of the performance
cycle this value is only a notional indication.
Final payout is subject to the sustainability assessment of the Supervisory Board and may vary within the
full range between 0 % – 165 % of the cumulative target values independent of the notional accruals.
38
Annual Report 2013
Allianz Group
and 20 % (per child) of the original Board member’s pension, with the
aggregate not to exceed 100 %. Should Board membership cease prior
to retirement age for other reasons, the accrued pension rights are
maintained if vesting requirements are met.
Perquisites
Perquisites mainly consist of contributions to accident and liability
insurances and the provision of a company car. Where applicable,
expenses are paid for the maintenance of two households. Perqui
sites are not linked to performance. Each member of the Board of
Management is responsible for the income tax on these perquisites.
The Supervisory Board reviews regularly the level of perquisites.
B
Corporate Governance
27
32
Corporate Governance Report
Statement on Corporate Management
pursuant to § 289a of the HGB
34 Takeover-related Statements
and Explanations
37 Remuneration Report
− Equityrelated remuneration (longterm): A virtual share award,
known as “Restricted Stock Units” (RSus). RSus are granted after
the end of the financial year with the annual bonus performance
determining the value of the equity grant. The 165 % cap of the
annual bonus also applies to the RSu grant value, which must
not exceed € 1,155 THou for a regular member of the Board of
Management with a € 700 THou target. The number of RSus
granted results from dividing the grant value by the value of an
RSu at the time of grant. Following the end of the fouryear vest
ing period, the company makes a cash payment based on the
number of RSus granted and the market price of the Allianz
share at that time. To avoid extreme payouts, the RSu payout is
capped at 200 % above grant price.1
In accordance with the RSu rules, outstanding holdings are for
feited should a Board member leave at their own request or be
terminated for cause.
Variable remuneration components may not be paid, or payment
may be restricted in the case of a breach of the Allianz Code of Conduct,
risk limits or compliance requirements. Additionally, a reduction or
abandonment of variable remuneration may occur if the supervisory
authority (BaFin) requires this in accordance with its statutory powers.
Pensions and similar benefits
To provide competitive and costeffective retirement and disability
benefits, since 1 January 2005 Board of Management members par
ticipate in a contributionbased system. Prior to this date, Board
members participated in a defined benefit plan that provided fixed
benefits not linked to base salary increases. Benefits generated under
this plan were frozen at the end of 2004. Additionally, most Board
members participate in the Allianz Versorgungskasse VVaG (AVK), a
contributionbased pension plan and the Allianz Pensionsverein e.V.
(APV), which provide pension benefits for salaries up to the German
social security ceiling.
Company contributions to the current pension plan depend on
the years of service on the Board of Management. They are invested
in a fund with a guaranteed minimum interest rate per year. On
retirement, the accumulated capital is converted into a lifetime
annuity. Each year the Supervisory Board decides whether, and to
what extent, a budget is provided, also considering the targeted pen
sion level. This budget includes a risk premium paid to cover death
and disability. The earliest age a pension can be drawn is 60, except
for cases of occupational or general disability for medical reasons. In
these cases it may become payable earlier on; an increase by projec
tion may apply. In the case of death, a pension may be paid to depen
dents. Surviving dependents normally receive 60 % (surviving partner)
1
The relevant share price used to determine the final number of RSUs granted and the 200 % cap are only
available after sign-off by the external auditors.
Annual Report 2013
Allianz Group
39
2013 REMUNERATION AND LINK TO PERfORMANCE
Total remuneration: The following table shows individual remunera
tion for 2013 and 2012, including fixed and variable remuneration and
pension service costs. To provide comparable disclosure to previous
years, the remuneration table includes the annual accrual of the MTB.
INDIVIDUAL REMUNERATION: 2013 AND 2012
Total might not sum up due to rounding
€ THOU
Fixed
Variable
Total
Pensions
Total incl.
Pensions
Base salary
Perquisites
Annual bonus
(short-term)1
MTB
(mid-term)
Board members
Michael Diekmann
(Chairman)
Oliver Bäte
Manuel Bauer
Gary Bhojwani 3
Clement Booth
Dr. Helga Jung
Dr. Christof Mascher
Jay Ralph
Dr. Dieter Wemmer
Dr. Werner Zedelius
Dr. Maximilian Zimmerer
Total 8
2013
2012
2013
2012
2013
2012
2013
2012
2013
2012
2013
2012
2013
2012
2013
2012
2013
2012
2013
2012
2013
20127
2013
2012
1,280
1,280
750
750
700
700
700
700
750
750
700
700
700
700
700
700
700
700
750
750
700
408
8,430
8,495
2912
23
53
58
16
16
70
68
85
137
14
11
27
23
28
36
14
18
16
1725
1506
8
764
595
Fair value of
RSU award at
date of grant
(long-term)
1,581
1,498
1,003
946
927
899
942
793
945
926
904
857
899
841
948
943
978
958
910
896
924
543
6,315
5,798
3,811
3,646
3,497
3,412
3,597
3,146
3,670
3,664
3,426
3,281
3,423
3,247
3,571
3,566
3,649
3,592
3,497
3,611
3,622
2,044
914
824
350
277
298
272
1964
2104
410
394
279
267
304
286
236
234
230
205
527
485
369
257
7,229
6,622
4,161
3,923
3,795
3,684
3,793
3,356
4,080
4,058
3,705
3,549
3,727
3,533
3,807
3,800
3,879
3,797
4,024
4,096
3,991
2,301
1,581
1,498
1,003
1,581
1,498
1,003
946
927
899
942
793
945
926
904
857
899
841
948
943
978
958
910
896
924
543
946
927
899
942
793
945
926
904
857
899
841
948
943
978
958
910
896
924
543
10,961
10,547
10,961
10,547
10,961
10,547
42,078
40,731
4,113
4,006
46,191
44,737
1
2
3
4
Actual bonus paid in 2014 for fiscal year 2013 and in 2013 for fiscal year 2012.
Michael Diekmann received an anniversary payment of € 267 THOU.
Gary Bhojwani’s base salary and variable compensation is denominated in USD, the contractually agreed
USD/€ exchange rate of 1.347910 (2011 fourth quarter average) was applied.
Gary Bhojwani does not receive pension contributions into the Allianz SE pension plans but only under his
Allianz of America employment agreement.
5
6
7
8
Dr. Werner Zedelius received an anniversary payment of € 156 THOU.
Dr. Maximilian Zimmerer received an anniversary payment of € 146 THOU.
Dr. Maximilian Zimmerer joined Allianz SE Board of Management on 1 June 2012 and received a pro-rated
remuneration for 2012.
The total remuneration reflects the remuneration of the full Board of Management in the respective year,
Dr. Paul Achleitner left the Board of Management of Allianz SE on 31 May 2012.
40
Annual Report 2013
Allianz Group
B
Corporate Governance
27
32
Corporate Governance Report
Statement on Corporate Management
pursuant to § 289a of the HGB
34 Takeover-related Statements
and Explanations
37 Remuneration Report
Below we discuss the 2013 remuneration results and the link to per
formance against targets for all key remuneration elements and the
total remuneration of each member of the Board of Management.
between 128 % and 143 % of the target with an average bonus
award of 134 % of the target. This represents 83 % of the maximum
payout.
− Base salary: Base salaries for 2013 were maintained at their
− MTB 2013 – 15: An accrual mirroring the annual bonus was made.
existing levels.
− Annual bonus: The 2013 target achievement for the Group, the
business division/corporate functions and the qualitative per
formance was on average assessed at 134 % and ranged between
128 % and 143 %. Consequently, total annual bonus awards ranged
− Equity-related remuneration: In accordance with the approach
described earlier, a number of RSus were granted to each Board
member in March 2014 which will vest in 2017 and be distributed/
settled in 2018. At the time of grant, each award had the same value
as the award for the 2013 annual bonus.
GRANTS, OUTSTANDING HOLDINGS AND EqUITY COMPENSATION ExPENSE UNDER THE ALLIANz EqUITY PROGRAM1
Board members
Michael Diekmann (Chairman)
Oliver Bäte
Manuel Bauer
Gary Bhojwani 5
Clement Booth
Dr. Helga Jung
Dr. Christof Mascher
Jay Ralph
Dr. Dieter Wemmer
Dr. Werner Zedelius
Dr. Maximilian Zimmerer
Total
RSU 2
Number of RSU
granted on
3/13/20142
15,479
9,816
9,076
9,135
9,250
8,848
8,798
9,277
9,576
8,913
9,048
SAR 3
Number of RSU
held at
12/31/2013
Number of SAR
held at
12/31/2013
Strike Price Range
€
Equity Compensation
Expense 2013
€ THOU4
64,070
39,799
23,935
41,360
39,748
17,830
35,972
38,566
11,135
44,708
24,787
53,879
22,642
12,789
21,028
36,075
8,117
18,616
16,493
–
39,414
16,780
245,833
87.36 – 160.13
87.36 – 117.38
87.36 – 160.13
87.36 – 160.13
87.36 – 160.13
87.36 – 160.13
87.36 – 160.13
87.36 – 117.38
104.65
87.36 – 160.13
87.36 – 160.13
3,628
2,215
1,225
2,115
2,353
917
2,151
2,442
488
3,394
1,621
–
22,549
107,216
381,910
1
2
The equity-related remuneration that applied before 2010 consisted of two vehicles, virtual stock awards
known as RSUs and virtual stock options known as “Stock Appreciation Rights” (SAR). Only RSUs have been
awarded as of 2010. The remuneration system valid until December 2009 is disclosed in the Annual Report
2009 (starting on page 17).
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 as well as the maximum amount
distributed after the RSU portion has vested. As disclosed in the Annual Report 2012, the equity-related
grant in 2013 was made to participants as part of their 2012 remuneration. The disclosure in the Annual
Report 2012 was based on a best estimate of the RSU grants. The actual grants, as of 7 March 2013, deviated
from the estimated values and have to be disclosed accordingly. The actual RSU grants as of 7 March 2013
under the Allianz equity program are as follows: Michael Diekmann: 17,415, Oliver Bäte: 10,995,
Manuel Bauer: 10,446, Gary Bhojwani: 9,573, Clement Booth: 10,760, Dr. Helga Jung: 9,958, Dr. Christof
Mascher: 9,778, Jay Ralph: 10,962, Dr. Dieter Wemmer: 11,135, Dr. Werner Zedelius: 10,419, Dr. Maximilian
Zimmerer: 8,302.
3
4
5
SARs are released to plan participants upon expiry of the vesting period, assuming all other exercise
hurdles are met. For SARs granted until and including 2008, the vesting period was two years. For SARs
granted from 2009, the vesting period is four years. SARs can be exercised on condition that the price of
the Allianz SE stock is at least 20 % above the strike price at the time of grant. Additionally, the price of the
Allianz SE stock must have exceeded the Dow Jones EURO STOXX Price Index (600) over a period of five
consecutive trading days at least once during the plan period.
Grants of equity-related remuneration are accounted for as cash settled awards. The fair value of the
granted RSUs and SARs is remeasured at each reporting date and accrued as a compensation expense
proportionately over the vesting and service period. Upon vesting, any subsequent changes in the fair
value of the unexercised SARs are also recognized as a compensation expense.
Gary Bhojwani’s RSU grant will be based on his annual bonus amount of € 942 THOU. The number of RSUs
will be calculated in line with the process for other USD participants by application of the 2013 fourth
quarter USD/€ exchange rate of 1.36138.
− Pensions: Company contributions in the current plan are 27.98 %
(2012: 28.35 %) of base salary, increasing to 34.98 % (2012: 35.44 %)
after five years and to 41.98 % (2012: 42.53 %) after ten years service
on the Board of Management. These are invested in a fund and
have a minimum guaranteed interest rate of 2.75 % each year. If
the net annual return of the AVK exceeds 2.75 % the full increase
in value is credited in the same year. For members with pension
rights in the frozen defined benefit plan, the above contribution
rates are reduced by an amount equivalent to 19 % of the expected
annual pension from that plan.
The Allianz Group paid € 4 Mn (2012: € 4 Mn) to increase reserves
for pensions and similar benefits for active members of the
Board of Management. As of 31 December 2013, reserves for pen
sions and similar benefits for active members of the Board of
Management amounted to € 41 Mn (2012: € 36 Mn).
Annual Report 2013
Allianz Group
41
INDIVIDUAL PENSIONS: 2013 AND 2012
Total might not sum up due to rounding
€ THOU
Board members
Michael Diekmann
(Chairman)
Oliver Bäte
Manuel Bauer
Gary Bhojwani 7
Clement Booth
Dr. Helga Jung
Dr. Christof Mascher
Jay Ralph
Dr. Dieter Wemmer
Dr. Werner Zedelius
Dr. Maximilian Zimmerer
Defined benefit pension plan
(frozen) 1
Current pension plan
AVK/APV 2
Transition
payment 3
Total
Annual
pension
payment4
337
337
0
0
57
57
2438
2438
0
0
62
62
0
0
0
0
0
0
225
225
161
161
2013
2012
2013
2012
2013
2012
2013
2012
2013
2012
2013
2012
2013
2012
2013
2012
2013
2012
2013
2012
2013
2012
SC5
DBO6
SC5
DBO6
SC5
DBO6
SC5
DBO6
SC5
DBO6
285
226
0
0
54
43
0
0
0
0
40
29
0
0
0
0
0
0
157
119
108
48
7,527
7,297
0
0
1,261
1,216
1099
1289
0
0
806
786
0
0
0
0
0
0
4,128
4,041
2,759
2,704
585
561
318
248
234
223
19610
21010
325
315
231
232
253
249
233
231
228
204
346
344
212
103
4,867
3,861
1,839
1,367
1,306
970
0
0
2,655
2,101
1,099
824
2,035
1,619
1,086
765
509
245
2,866
2,287
1,877
1,511
9
6
3
3
9
6
0
0
3
2
9
6
3
3
3
3
2
0
9
6
9
4
192
186
16
14
120
160
0
0
19
17
152
149
19
17
10
8
3
0
194
189
188
184
35
31
29
26
0
0
0
0
82
77
0
0
49
34
0
0
0
1
15
16
39
102
1,114
1,053
194
163
1
1
0
0
693
594
0
0
337
283
1
0
1
1
522
500
522
476
914
824
350
277
298
272
196
210
410
394
279
267
304
286
236
234
230
205
527
485
369
257
13,699
12,397
2,049
1,544
2,688
2,347
109
128
3,367
2,712
2,057
1,759
2,392
1,919
1,096
773
513
246
7,709
7,017
5,346
4,875
1
2
3
4
5
6
For Gary Bhojwani the frozen Allianz Retirement Plan (ARP) and the frozen Supplemental Retirement Plan
(SRP).
Plan participants contribute 3 % of their relevant salary to the AVK. For the AVK the minimum guaranteed
interest rate is 2.75 % – 3.50 % depending on the date of joining Allianz. In general, the company funds the
balance required via the APV. Before Allianz’s founding of the APV in 1998, both Allianz and the plan par-
ticipants were contributing to the AVK.
For details on the transition payment see section termination of service. In any event a death benefit is
included.
Expected annual pension payment at assumed retirement age (age 60), excluding current pension plan.
SC = service cost. Service costs are calculatory costs for the DBO related to the reported business year.
DBO = defined benefit obligation; end of year. The figures show the obligation for Allianz resulting from
defined benefit plans taking into account realistic assumptions with regard to interest rate, dynamics and
biometric probabilities.
7
8
9
10
Gary Bhojwani only holds pension plans subject to his Allianz of America employment agreement, de-
nominated in USD. All amounts in the table are € amounts derived by applying the contractually agreed
USD/€ exchange rate of 1.347910. The Allianz Retirement Plan (ARP) and the Supplemental Retirement
Plan (SRP) are two completely frozen DB-plans, i.e. there are no future accruals in these plans. Current
pension plans for Gary Bhojwani include the Deferred Compensation Plan (DCP) and the 401(k) plan.
Both current plans are Defined Contribution plans. Their contributions are included in the table.
In the ARP he can choose between a lump sum payment or an annuity. The lump sum benefit amount
projected with actual interest rates is USD 120 THOU (2012: USD 120 THOU) and likely to change when he
retires at age 65. In the SRP he will get three annual installments of USD 69.4 THOU (2012: USD 69.4 THOU)
at the age of 65, which – as we have shown in the table – total USD 208 THOU (2012: USD 208 THOU).
The DBO for the ARP is USD 54 THOU (2012: USD 58 THOU) and for the SRP USD 93 THOU (2012: USD 115 THOU).
The contribution to the DCP is USD 246 THOU (2012: USD 266 THOU) and to the 401(k) plan USD 18 THOU
(2012: USD 17 THOU). There is no DBO as both plans are DC plans.
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 pension obligations and
accrued pension rights totaled € 100 Mn (2012: € 105 Mn).
− Perquisites: For 2013, the total value of the perquisites amounted
to € 0.8 Mn (2012: € 0.6 Mn).
− Total remuneration: The total remuneration for 2013 excludes
the notional annual accruals of the MTB 2013 – 15. The figures
for 2012 (in parentheses) include the actual payout of the
MTB 2010 – 12. Both figures exclude the pension service cost:
Michael Diekmann € 4,734(8,404) THou
Oliver Bäte € 2,808(5,282) THou
Manuel Bauer € 2,570(3,923) THou
Gary Bhojwani 1 € 2,655(3,146) THou
Clement Booth € 2,725(5,155) THou
Dr. Helga Jung € 2,522(3,281) THou
Dr. Christof Mascher € 2,524(4,724) THou
Jay Ralph € 2,623(4,936) THou
Dr. Dieter Wemmer € 2,671(3,592) THou
Dr. Werner Zedelius € 2,587(5,007) THou
Dr. Maximilian Zimmerer € 2,698(2,044) THou.
42
Annual Report 2013
Allianz Group
1
Gary Bhojwani’s total remuneration is denominated in USD. The contractually agreed USD/€ exchange
rate of 1.347910 (2011 fourth quarter average) was applied.
B
Corporate Governance
27
32
Corporate Governance Report
Statement on Corporate Management
pursuant to § 289a of the HGB
34 Takeover-related Statements
and Explanations
37 Remuneration Report
The sum of the total remuneration of the 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 Mn 1).
The corresponding amount, including pension service cost, equals
€ 35 Mn (2012 including the payment of the MTB 2010 – 12: € 57 Mn 1).
LOANS TO MEMBERS Of THE BOARD Of MANAGEMENT
As of 31 December 2013, there were no outstanding loans granted by
Allianz Group companies to members of the Board of Management.
TERMINATION Of SERVICE
Board of Management contracts are limited to a period of five years.
For new appointments, in compliance with the German Corporate
Governance Code, a shorter period is typical.
Arrangements for termination of service including retirement are as
follows:
Board members who were appointed before 1 January 2011 are
eligible to use a company car for a period of twelve months after their
retirement.
Termination of Service – details
of the payment arrangements
Transition payment (appointment before 1 January 2010)
Board members receiving a transition payment are subject to a six
months noncompete clause.
The payment is calculated based on the last base salary (paid for
a period of six months) and 25 % of the target variable remuneration
at the date when notice is given. A Board member with a base salary
of € 700 THou would receive a maximum of € 875 THou.
An Allianz pension, where immediately payable, is taken into
account in adjusting transition payment amounts.
1. Board members who were appointed before 1 January 2010 – and
who have served a term of at least five years – are eligible for a six
month transition payment after leaving the Board of Management.
Severance payment cap
Payments to Board members for early termination with a remaining
term of contract of more than two years are capped at two years’ com
pensation:
2. Severance payments made to Board members in case of an early
termination comply with the German Corporate Governance Code.
Whereby the annual compensation
3. Special terms, also compliant with the German Corporate Gover
nance Code, apply if service is terminated as a result of a “change
of control”. This requires that a shareholder of Allianz SE, acting
alone or together with other shareholders, holds more than 50 % of
voting rights in Allianz SE. Termination as a result of a change of
control occurs
1. is calculated on the basis of the previous year’s annual base
salary plus 50 % of the target variable remuneration (for a Board
member with a fixed base salary of € 700 THou the annual com
pensation would amount to € 1,750 THou; hence he/she would
receive a maximum severance payment of € 3,500 THou); and
2. shall not exceed the latest year’s actual total compensation.
if within twelve months after a change of control
In case the remaining term of contract is less than two years the pay
ment is prorated according to the remaining term of the contract.
a. the Management Board appointment is unilaterally revoked by
the Supervisory Board, or
b. the Board member resigned due to a substantial decrease in
managerial responsibilities and without giving cause for termi
nation, or
c. a Management Board appointment is terminated by mutual
agreement
Change of Control
In case of early termination as a result of a change of control, sever
ance payments made to Board members generally amount to a three
years’ compensation (annual compensation as defined above) and
shall not exceed 150 % of the severance payment cap (a Board member
with a base salary of € 700 THou would receive a maximum of
€ 5,250 THou). Consequently, the payout is less than two years’ total
remuneration at target (which would be € 5,600 THou).
or if the mandate expires and is not renewed within two years of
the change of control.
MISCELLANEOUS
Contracts do not contain provisions for any other cases of early ter
mination from the Board of Management.
1
For joining or leaving members of the Allianz SE Board only the pro-rated MTB relating to their service as
Board members is disclosed.
Internal and external Board appointments
When a member of the Board of Management holds an appointment
in another company within the Allianz Group, the full remuneration
amount is transferred to Allianz SE. In recognition of the benefits to
the organization, Board of Management members are supported if
Annual Report 2013
Allianz Group
43
they accept a limited number of nonexecutive supervisory roles in
appropriate external organizations. In these cases, 50 % of the remu
neration received is paid to Allianz SE. A Board member retains the
full remuneration only when the Supervisory Board qualifies the
appointment as a personal one. Remuneration paid by external orga
nizations is shown in the annual reports of the companies concerned.
The remuneration relating to the external appointment is set by the
governing body of the relevant organization.
REMUNERATION PRINCIPLES
− Set total remuneration at a level aligned with the scale and
scope of the Supervisory Board’s duties and appropriate to the
company’s activities and business and financial situation.
− Set a remuneration structure that takes into account the indi
vidual functions and responsibilities of Supervisory Board mem
bers, such as chair, vicechair or committee mandates.
OUTLOOK fOR 2014
The Supervisory Board approved the following changes to the remu
neration of the Board of Management in December 2013:
− Set a remuneration structure to allow for proper oversight of
business as well as for adequate decisions on executive personnel
and remuneration.
− The base salary of all regular members of the Board of Manage
ment has been harmonized for 2014. Those base salaries at
€ 700 THou for 2013 will be adjusted to € 750 THou.
− For all Board members, the respective target amounts for each
of the variable components (annual bonus, MTB and equity
related) were aligned with the applicable base salary to ensure
a pay split at target of 25 % fixed and 75 % variable compensation.
From 2014, a regular Board member has a target amount of
€ 750 THou per variable component resulting in a total direct
compensation at target of € 3,000 THou, the Chief Executive Officer
a target amount of € 1,280 THou per variable component resulting
in a total direct compensation at target of € 5,120 THou.
− The overall cap on the total variable compensation has been low
ered from 165 % to 150 %, the cap for the single targets (quantitative
Group targets, quantitative divisional targets, and qualitative
targets) remained unchanged at 165 %.
Overall, for a Board member with a current base salary of € 700 THou,
the three measures lead to a reduction of € 40 THou at cap: the maxi
mum direct compensation decreased from currently € 4,165 THou to
€ 4,125 THou. For the Chief Executive Officer this reduction equals
€ 81 THou at cap (from € 7,121 THou down to € 7,040 THou).
The pension contributions as a percentage of base salary paid by
the company to the contributionbased pension plan remain
unchanged.
Remuneration of the Supervisory Board
The remuneration of the Supervisory Board is governed by the Stat
utes of Allianz SE and the German Stock Corporation Act. The structure
of the Supervisory Board’s remuneration is regularly reviewed with
respect to German, European and international corporate gover
nance recommendations and regulations.
REMUNERATION STRUCTURE AND COMPONENTS
The remuneration structure, which comprises fixed and committee
related remuneration only, was approved by the Annual General
Meeting 2011 and is laid down in the Statutes of Allianz SE. It became
effective for the financial year 2011.
Fixed annual remuneration
The remuneration of a Supervisory Board member consists of a fixed
cash amount paid after the end of each business year for services
rendered over that period. A regular Supervisory Board member
receives a fixed remuneration of € 100 THou per year. Each deputy
Chairperson receives € 150 THou and the Chairperson € 200 THou.
Committee-related remuneration
The Chairperson and members of the Supervisory Board committees
receive additional committeerelated remuneration. The committee
related remuneration is as follows:
COMMITTEE-RELATED REMUNERATION
€ THOU
Committee
Personnel Committee, Standing
Committee, Risk Committee
Audit Committee
Nomination Committee
Chair
Member
40
80
–
20
40
–
Attendance fees and expenses
In addition to the fixed and committeerelated remuneration, mem
bers of the Supervisory Board receive an attendance fee of € 750 for
each Supervisory Board or committee meeting they attend in person.
Should several meetings be held on the same or consecutive days, the
attendance fee will be paid only once. Allianz SE reimburses the
members of the Supervisory Board for their outofpocket expenses
and the VAT payable on their Supervisory Board activity. For the per
formance of his duties, the Chairman of the Supervisory Board is
44
Annual Report 2013
Allianz Group
B
Corporate Governance
27
32
Corporate Governance Report
Statement on Corporate Management
pursuant to § 289a of the HGB
34 Takeover-related Statements
and Explanations
37 Remuneration Report
furthermore entitled to an office with secretarial support and use of
the Allianz carpool service. In the financial year 2013, Allianz SE reim
bursed expenses totaling € 67,433.
REMUNERATION fOR 2013
The total remuneration for all Supervisory Board members, including
attendance fees, amounted to € 2,018 THou in 2013 (€ 2,089 THou in
2012). The following table shows the individual remuneration for 2013
and 2012:
INDIVIDUAL REMUNERATION: 2013 AND 2012
Total might not sum up due to rounding
€ THOU
Members of the Supervisory Board
Dr. Helmut Perlet 2
(Chairman)
Dr. Henning Schulte-Noelle 3
(Chairman)
Dr. Wulf Bernotat
(Vice Chairman)5
Dr. Gerhard Cromme 4
(Vice Chairman)
Rolf Zimmermann
(Vice Chairman)
Dante Barban 2
Christine Bosse 5
Gabriele Burkhardt-Berg 2
Jean-Jacques Cette
Ira Gloe-Semler 2
Geoff Hayward 3
Franz Heiß
Prof. Dr. Renate Köcher
Peter Kossubek 3
Igor Landau
Jörg Reinbrecht 3
Peter Denis Sutherland
Total 6
Committees 1
P
C
C
C
M
M
M
M
M
A
M
M
M
C
C
M
M
M
M
M
M
M
N
C
C
C
M
M
M
M
M5
S
C
C
C
M
M
M
M
M
M
M
M
M5
M
R
C
C
C
M
M
M
M
M
M
M
M4
M
M
2013
2012
2013
2012
2013
2012
2013
2012
2013
2012
2013
2012
2013
2012
2013
2012
2013
2012
2013
2012
2013
2012
2013
2012
2013
2012
2013
2012
2013
2012
2013
2012
2013
2012
2013
2012
Fixed
remu ne ration
Commit tee
remu ne ration
Atten dance
fees
Total
remu neration
200.0
133.3
–
83.3
150.0
120.9
–
100.0
150.0
150.0
100.0
66.7
100.0
41.7
100.0
66.7
100.0
100.0
100.0
66.7
–
41.7
100.0
100.0
100.0
100.0
–
41.7
100.0
100.0
–
41.7
100.0
100.0
160.0
106.7
–
66.7
100.0
100.0
–
26.7
40.0
40.0
20.0
13.3
40.0
16.7
20.0
13.3
40.0
40.0
40.0
26.6
–
8.3
20.0
20.0
20.0
21.7
–
8.3
40.0
40.0
–
16.7
20.0
20.0
6.0
4.5
–
2.2
6.0
5.2
–
1.5
4.5
3.0
366.0
244.5
–
152.2
256.0
226.1
–
128.2
194.5
193.0
4.5
124.5
2.2
4.5
1.5
4.5
2.2
6.0
5.2
4.5
3.0
–
1.5
4.5
3.0
3.0
3.0
–
1.5
6.0
5.2
–
1.5
3.7
3.0
82.2
144.5
59.9
124.5
82.2
146.0
145.2
144.5
96.3
–
51.5
124.5
123.0
123.0
124.7
–
51.5
146.0
145.2
–
59.9
123.7
123.0
1,400.0
1,454.0
560.0
585.0
57.8
49.7
2,017.8
2,088.7
Legend: C = Chairperson of the respective committee, M = Member of the respective committee.
1
2
3
Abbreviations: A – Audit, N – Nomination, P – Personnel, R – Risk, S – Standing.
Since 9 May 2012.
Until 9 May 2012.
4
5
6
Until 14 August 2012.
Since 15 August 2012.
The total remuneration reflects the remuneration of the full Supervisory Board in the respective year.
Annual Report 2013
Allianz Group
45
Remuneration for mandates in other
Allianz companies and for other functions
Mrs. Gabriele BurkhardtBerg was a member of the Supervisory Board
of Allianz Deutschland AG until 10 April 2013 and received a pro rata
remuneration of € 20 THou for this membership. All current employee
representatives of the Supervisory Board except for Mrs. Ira Gloe
Semler are employed by Allianz Group companies and receive a mar
ket aligned remuneration for their services.
Loans to members of the Supervisory Board
On 31 December 2013, there was one outstanding loan granted by
Allianz Group companies to members of the Supervisory Board of
Allianz SE. One member received a mortgage loan of € 80 THou from
Allianz Bank in 2010. The loan has a duration of 10 years and was
granted at a normal market interest rate.
46
Annual Report 2013
Allianz Group
’
Catherine Porte Arondelle,
Allianz Global Assistance Doctor,
France
* One helping hand wherever yOu are.
The expertise of our employees and
partners who support us all around
the world is a key factor in our success
which we can rely on at all times. Our
commitment to help people whenever
and wherever they need us ensures
optimum results for our customers.
c _ grOup ManageMent repOrt
pages 48 – 124
85
86
86
Corporate and Other
Earnings summary
Earnings summaries by reportable segments
87
Outlook 2014
87
88
88
89
89
89
90
91
91
91
92
92
92
93
98
99
99
99
99
103
Overview: 2013 results versus previous year outlook
Economic outlook
Insurance industry outlook
Asset management industry outlook
Outlook for the Allianz Group
Overview: outlook and assumptions 2014
Management’s assessment of expected revenues and earnings for 2014
Financing and liquidity development and capitalization
Expected dividend development
Management’s overall assessment of the current economic situation
of the Allianz Group
Balance Sheet Review
Shareholders’ equity
Regulatory capital adequacy
Total assets and total liabilities
Off-balance sheet arrangements
Liquidity and Funding Resources
Organization
Liquidity management of our operating entities
Liquidity management and funding of Allianz SE
Allianz Group consolidated cash flows
104
Reconciliations
104
104
Composition of total revenues
Composition of total revenue growth
risk AnD opportunitY report
AnD FinAnciAl control
105
Risk and Opportunity Report
105
106
108
110
119
121
121
123
123
124
Allianz risk profile and management assessment
Capitalization
Internal risk capital framework
Internal risk assessment
Risk governance
Risk management priorities for 2014
Further future challenges and opportunities
Controls over Financial Reporting and Risk Capital
Internal controls over financial reporting
Risk capital controls
Your AlliAnz
49
Business Operations and Markets
Allianz Group structure
Insurance operations
Asset Management
Corporate and Other
49
49
50
50
51 Worldwide presence and business segments
52
Our markets
56
58
59
59
61
61
63
Strategy and Steering
Our steering
Progress in Sustainable Development
Business
Environment
People
Ethics
MAnAgeMent Discussion AnD AnAlYsis
64
64
64
66
66
67
68
68
68
69
69
70
70
70
Business Environment
Economic environment 2013
Business environment 2013: insurance and asset management industry
Executive Summary of 2013 Results
Earnings summary
Total revenues
Operating profit
Non-operating result
Income taxes
Net income
Proposal for appropriation of net earnings
Events after the balance sheet date
Changes in segment structure, presentation and accounting policies
Other parts of the Group Management Report
71
Property-Casualty Insurance Operations
71
73
74
76
Gross premiums written
Operating profit
Net income
Property-Casualty insurance operations by reportable segments
78
Life/Health Insurance Operations
Statutory premiums
78
79 Operating profit
80
81
Net income
Life/Health insurance operations by reportable segments
82
Asset Management
82 Assets under management
84 Operating revenues
84 Operating profit
84
Net income
48
annual report 2013
allianz group
C
Group Management Report
Your Allianz
Business Operations and Markets
49
56 Strategy and Steering
59 Progress in Sustainable Development
Business Operations and Markets
Allianz offers a comprehensive range of insurance and asset management
products and services and has more than 83 million insured customers.
Allianz Group structure
Allianz SE and its subsidiaries (the Allianz Group) offer Property-
Casualty insurance, Life/Health insurance and Asset Management
products and services in over 70 countries, with the largest of its
operations in Europe. Allianz SE, as the parent company of the Allianz
Group, has its headquarters in Munich, Germany.
The Allianz Group structure reflects both business segments
and geographical regions. Our business activities are first organized
by product and type of service based on how these are strategically
managed: insurance activities, asset management activities and cor-
porate and other activities. Due to differences in the nature of products,
risks and capital allocation, insurance activities are further divided
into Property-Casualty and Life/Health categories. In accordance
with the responsibilities of the Board of Management, each of the
insurance categories is grouped into regional reportable segments.
Corporate and other activities are divided into three different report-
able segments in order to differentiate between the respective products,
risks and capital allocation. In total, the Allianz Group has 17 report-
able segments.
AlliAnz Group structure – business seGments And reportAble seGments
property-cAsuAlty
life/HeAltH
Asset mAnAGement
corporAte And otHer
– German Speaking Countries
– Western & Southern Europe
– Iberia & Latin America
– USA
– Global Insurance Lines & Anglo Markets
– Growth Markets
– Allianz Worldwide Partners
– German Speaking Countries
– Western & Southern Europe
– Iberia & Latin America
– USA
– Global Insurance Lines & Anglo Markets
– Growth Markets
– Asset Management
– Holding & Treasury
– Banking
– Alternative Investments
Insurance operations
selected product rAnGe insurAnce
We offer a wide range of property-casualty and life/health insurance
products to both private and corporate customers. We are the leading
property-casualty insurer globally and rank among the top five in the
life/health insurance business. Our key markets based on premiums
are Germany, France, Italy and the United States.
Most of our insurance markets are served by local Allianz com-
panies. However, some business lines – such as Allianz Global Corpo-
rate & Specialty (AGCS), Allianz Worldwide Partners (AWP) and Credit
Insurance – are run globally. Based on premiums, the split between
private and corporate clients is approximately 50 % / 50 % for our Prop-
erty-Casualty business segment, and about 80 % / 20 % for Life/Health.
property-cAsuAlty
Private Clients
Corporate Clients
– Motor (liability/own damage)
– Liability
– Property
– Accident
– Travel and assistance
– Property
– Liability
– Motor fleets
– Directors’ and Officers’ liability
– Credit
– Marine, aviation and transport
life/HeAltH
Private Clients
Corporate Clients
– Endowment
– Annuity
– Term
– Disability
– Investment-oriented products
– Private health insurance
– Group life products
– Group health and disability products
– Pension products for employees
Annual Report 2013
Allianz Group
49
Asset Management
Corporate and Other
Our two major investment management businesses, PIMCO and
AllianzGI, operate under Allianz Asset Management (AAM). With
€ 1,770 bn assets under management (including those of the Allianz
Group), we are one of the largest asset managers in the world handling
third-party assets with active investment strategies. 63 % of third-
party assets are from institutional investors, while 37 % are from retail
clients. Our core markets are the United States, Germany, France,
Italy, the United Kingdom and the Asia-Pacific region.
selected product rAnGe Asset mAnAGement
Equity
Fixed Income
Alternatives
Solutions
retAil And institutionAl clients
– Systematic
– Sector/theme funds
– Region /country funds
– Style funds
– Small cap funds
– Stocks plus
– Money market
– Low duration
– Real return
– Global
– Investment grade
– Structured products
– Commodity funds
– Certificate funds
– Currency funds
– Life-cycle concepts
– Multi-asset solution
– Variable annuity
solutions
– Diversified income
– High yield
– Emerging markets
– Convertible bonds
– Equity long/short
– Relative value
– Infrastructure debt/
equity
– Asset/liability
management
– Risk management
concepts
The Corporate and Other business segment’s activities include the
management and support of the Allianz Group’s businesses through
its central holding functions, as well as Banking and Alternative
Investments.
HoldinG & treAsury operAtions
Holding & Treasury includes the management and support of the
Group’s businesses through its strategy, risk, corporate finance, trea-
sury, financial reporting, controlling, communication, legal, human
resources and technology functions.
bAnkinG operAtions
Our banking operations support our insurance business and comple-
ment the products we offer in Germany, Italy, France, the Nether-
lands and Bulgaria. As a division of Allianz Deutschland AG, Olden-
burgische Landesbank AG (OLb) is Allianz’s main own banking
product and service provider in Germany. OLb, Germany’s largest
private regional bank, covers the northwest of Germany and focuses
on retail and corporate clients.
AlternAtiVe inVestments operAtions
Alternative Investments provides global alternative investment man-
agement services in the private equity, real estate, renewable energy
and infrastructure sectors, mainly on behalf of our insurance opera-
tions. The Alternative Investments reportable segment also includes
a fully consolidated private equity investment.
50
Annual Report 2013
Allianz Group
C
Group Management Report
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Business Operations and Markets
49
56 Strategy and Steering
59 Progress in Sustainable Development
Worldwide presence and business segments
mArket positions of our business operAtions
insurAnce GermAn speAkinG countries
GlobAl insurAnce lines & AnGlo mArkets
insurAnce GroWtH mArkets
◼ I.
◼ I.
◼
Germany
◼ II. ◼ III.
◼ II. ◼ II.
Austria
Switzerland
insurAnce Western & soutHern europe
◼ III.
◼ II. ◼ –
◼ II.
◼ II.
◼ I.
United Kingdom
Australia
Ireland
Allianz Global Corporate and Specialty
Credit Insurance
Middle East and North Africa
◼ III. ◼ II.
Egypt
◼ III. ◼ ii.
◼ ◼
III.
Lebanon
Saudi Arabia
Europe
◼ II. ◼ II. ◼
◼ III. ◼ III.
◼
II. ◼ III.
◼ II. ◼ III. ◼
◼
III. ◼ III.
Italy
Greece
Turkey 1
France
Belgium
◼ II. ◼ III. ◼
The Netherlands
◼ II. ◼ III.
Luxembourg
Africa
◼ II.
◼ II. ◼ II.
◼ II. ◼ I.
◼ I.
◼ II.
◼ IV.
◼ II. ◼ II.
◼ II. ◼ II.
◼ II.
◼ II. ◼ II.
◼ II.
Benin
Burkina Faso
Cameroon
Central Africa
Congo Brazzaville
Ghana
Ivory Coast
Madagascar
Mali
Senegal
Togo
insurAnce iberiA & lAtin AmericA
◼ II. ◼ III.
◼ II. ◼ III.
Spain
Portugal
Latin America
◼ IV.
◼ II. ◼ –
◼ II. ◼ II.
◼ IV. ◼ III.
Argentina
Brazil
Colombia
Mexico
◼ IV. ◼ –
Reinsurance
insurAnce usA
AlliAnz WorldWide pArtners
◼ IV. ◼ III.
United States
◼ –
◼ –
Allianz Worldwide Partners
Asset mAnAGement
insurAnce GroWtH mArkets
Asia
◼ –
◼ II. ◼ IV.
◼ –
◼ II. ◼ II.
◼ IV. ◼ II.
◼ –
◼ I.
◼ I.
◼ –
◼ III.
◼ –
◼ IV.
◼ III. ◼ III.
◼ III.
◼ IV. ◼ III.
Brunei 2
China 3
Hong Kong 2
India 3
Indonesia
Japan 2
Laos
Malaysia
Pakistan
Singapore 2
South Korea
Sri Lanka
Taiwan
Thailand
Central and Eastern Europe
◼
◼ I.
Bulgaria
◼ I.
◼ II. ◼ I.
◼ II. ◼ III.
◼ I.
◼ II.
◼ II. ◼ III.
◼ II. ◼ II.
◼ III. ◼ III.
◼ I.
◼ I.
◼ IV.
Croatia
Czech Republic
Hungary
Poland
Romania
Russia
Slovakia
Ukraine
America
◼
◼
◼
◼
United States
Canada
Europe/Middle East
◼
◼
Germany
◼
◼
◼
◼
◼
◼
◼
◼
◼
◼
◼
◼
◼
◼
◼
◼
◼
◼
◼
◼
Asia-Pacific
◼
◼
◼
◼
◼
◼
◼
◼
◼
◼
◼
◼
◼
◼
◼
◼
France
Italy
Portugal
Spain
Switzerland
Austria
The Netherlands
United Kingdom
Nordics
Middle East
Japan
Hong Kong
Taiwan
Singapore
South Korea
China
India
Australia
◼ Property-Casualty ◼ Life/Health ◼ Banking ◼ Retail Asset Management ◼
II. Position 2 to 5
Insurance market position by gross premiums written: 4
I. Position 1
Institutional Asset Management
III. Position 6 to 10
IV. Not in the top 10
1
2
Reflecting our acquisition in 2013, Turkey Property-Casualty and Life/Health ranked in category I. and II.,
respectively.
Property-Casualty business belongs to Allianz Global Corporate and Specialty.
3
4
Based on total market ranking (including domestic competitors), China Property-Casualty ranked in cate-
gory IV. and India Property-Casualty in category III., respectively.
Source: Own local estimations as of 2012 (the Netherlands as of 2011).
Annual Report 2013
Allianz Group
51
Our markets
The following sections provide an overview of our business opera-
tions in certain insurance markets by business division and of our
Asset Management business. We focus on our operations in insur-
ance core markets and comment on material developments in select-
ed insurance markets as well as on our asset management market,
since these account for the major developments in our operating
results.
insurAnce core mArkets
insurAnce core mArkets
Core markets
Germany
France
Italy
United States
I.
II.
II.
IV.
I.
III.
II.
III.
Statutory/gross
premiums
written
Operating
profit
Number of
customers
€ mn
29,525
12,685
12,462
9,375
€ mn
1,724
822
1,342
641
mn
20.0
4.9
6.0
1.2
Market position ◼ Property-Casualty ◼ Life/Health
Market position by gross premiums written:
II. Position 2 to 5
I. Position 1
III. Position 6 to 10
IV. Not in the top 10
Germany
We provide our customers in Germany with a full range of insurance
and financial services through Allianz Deutschland AG. Our products
are mainly provided by Allianz Versicherungs-AG ( Allianz Sach),
Allianz Lebensversicherungs-AG ( Allianz Leben) and Allianz Private
Krankenversicherungs-AG ( Allianz Private Kranken). They are mostly
distributed through a network of full-time tied agents. Allianz Bera-
tungs- und Vertriebs-AG serves as our distribution company.
As the market leader in the German property-casualty market,
we offer a wide variety of insurance products for private and com-
mercial customers. Germany is a rather mature market for property-
casualty business, with intensive competition. 2013 showed premium
growth mostly in motor business and commercial non-motor busi-
ness. Although high natural catastrophes and large losses impacted
the operating profit heavily, our combined ratio remained below
100 %. Since the second half of 2013, PrivatSchutz product components
have grown considerably. PrivatSchutz is a new modular tariff com-
bining householder, houseowner, legal protection and personal gen-
eral liability insurance and takes into account customer demands for
flexibility and individual insurance cover. It has reduced the erosion
of our portfolio in the non-motor personal business significantly.
Although the property-casualty market continues to be competitive,
our ongoing strategic focus on strengthening sales, improving our
claims management and reducing the expense ratio has already led
to premium growth and improved profitability. Furthermore, we will
continue to extend our cooperation with the automobile industry
and increase our position in the direct market under the brand of
AllSecur.
For our life insurance business, we are active in private and com-
mercial markets and provide a comprehensive range of products.
The main classes of coverage offered include annuity, endowment,
term, disability and nursing care insurance. A lot of customers are
currently rethinking risk and return factors in their old-age provision.
For years we have been successfully enlarging our product range and
in summer 2013 we launched our new Perspektive offering. This has
separate guarantees in the savings and payout phases, from which
our customers can expect higher returns as a result of much less
stringent capital adequacy requirements. This life insurance product
meets customer needs very well. In the fourth quarter of 2013, new
business for Perspektive through our tied agents channel accounted
for 24 % of our old-age provision retail business.
In our commercial lines, we serve our customers with group life
insurance and provide companies with services and solutions in con-
nection with defined benefit pension arrangements and defined con-
tribution plans.
In total, we increased our market share in terms of revenues in
2013 by 1.4 %. After the single premium business reached a new record
level in 2013, we expect, however, that the exceptional growth will not
recur in 2014.
Through Allianz Private Kranken, we provide a wide range of
health insurance products, including full private health care coverage,
supplementary health and long-term care insurance as well as for-
eign travel medical insurance. After a reluctant demand in 2013, we
still expect growing demand for both full private health care coverage
and supplementary insurance in the future. This should be supported
by the very good external ratings we received recently for our full pri-
vate health care coverage and by our well-positioned long-term care
insurance offerings.
Italy
Our Italian insurance entity Allianz S.p.A. is strongly dedicated to the
agent channel. We also offer our products through Genialloyd (one
of the leading companies in direct business), the broker channel,
Allianz Bank Financial Advisors S.p.A. and via bancassurance, with
UniCredit as our main distribution partner.
In our property-casualty business, Allianz Italy significantly out-
performed its market in terms of premium growth and profitability.
In a market that experienced a contraction of 3.7 % 1, Allianz premium
volume declined by only 0.3 %, which allowed us to increase our market
share for the second consecutive year. In terms of profitability, the
combined ratio reached a historical low, which reflects the strong
1
Based on the first nine months of 2013.
52
Annual Report 2013
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56 Strategy and Steering
59 Progress in Sustainable Development
technical capabilities achieved through continuous investment and
innovation.
This achievement was strongly supported by the performance of
our agent network, which was merged in 2013 after operating as three
separate entities in the past. This marks a milestone in the history of
Allianz Italy and was accompanied by the introduction of the com-
mon digital platform Digital Agency. This new platform supports
simple, mobile and paperless processes, allowing for significant
increases in service quality, agent efficiency and customer satisfac-
tion. Another driver of innovation has been the introduction of Modu-
lar Offer, which provides family coverage against the most serious
risks. It is a single contract with protection modules from all insur-
ance lines and affordable pricing on a monthly subscription basis. The
success of our initiatives is reflected in a net promoter score for our
agents of + 21 %, which stands out against a market average of (11) %.
The growth of Genialloyd in terms of pure direct premiums
reached 19 % and contributed to our strong performance in Property-
Casualty.
In our life business, we increased our premium volume by 33 %,
raising our overall life market share by approximately one percentage
point. This growth was particularly supported by our bancassurance
cooperation with UniCredit and our proprietary financial advisors
network. Our unit-linked product market share increased signifi-
cantly to 20 % 1, leading to an improved new business mix. Sales of
unit-linked products accounted for over 70 % of new business, com-
pared to a market average of approximately 34 %. Progetto Reddito,
our innovative decumulation product, has generated € 1.3 bn of new
business since its launch at the beginning of 2013.
Looking ahead, we aim to further gain market share in the
property-casualty business despite the challenging market condi-
tions, and to preserve our combined ratio advantage by accelerating
our digital transformation. In our life business, we strive to further
rebalance our portfolio by improving our new business mix.
France
Allianz France S.A. is a major provider of insurance and financial ser-
vices in the French retail and commercial markets, offering a broad
range of property-casualty and life/health products for individuals
and corporate customers. These include liability insurance, disabil-
ity cover as well as investment and savings products. We distribute
these offerings mostly via agents, life and health consultants, brokers
and independent financial advisors, as well as selected external part-
ners. In addition, our customers can research and buy products on line,
either through e Allianz or via our direct sales channel AllSecur.
The French property-casualty market has seen limited growth in
recent years and remains highly competitive. Competition is likely to
remain tough, with expected higher customer churn due to local
1
Based on the first nine months of 2013.
Annual Report 2013
Allianz Group
regulatory changes regarding cancellation rules. In this business
environment, we continue to concentrate on increasing the efficiency
of our company structures, simplifying our product range and pro-
cesses and rebuilding our IT platform, with a view to delivering state-
of-the-art digital solutions and high-quality claims services. This
constant focus allows us to grow our customer base, for example in
motor insurance. Thanks to the full integration of Gan Eurocourtage
in 2013, which specializes in distributing its products via brokers, we
are now one of the leaders in the midcorp market.
Concerning the life market in France, we anticipate a continued
period of low interest rates, reinforcing the need to focus on technical
margins and cost optimization to maintain the attractiveness of our
offer. We have responded to the needs of our clients with a range of
traditional and unit-linked products in both group and individual
business, combining financial strength with the opportunity for
more attractive yields. As an example, our new offer of a discretionary
mandate is a successful illustration of this approach.
We also hold a strong position in the health market, often com-
bining elements of life, health and casualty insurance as comprehen-
sive solutions for individual and commercial customers. Recent
regulatory changes have created new opportunities for the develop-
ment of our group business. Our historic know-how will allow us to
adapt our offer and positioning rapidly.
Our retail insurance activities are complemented by Allianz
Banque, which allows us to offer one-stop solutions, in particular for
our life customers.
United States
Our property-casualty insurance business in the United States is con-
ducted through Fireman’s Fund Insurance Company (FFIC). Our life
and annuity business is managed through Allianz Life Insurance
Company of North America ( Allianz Life).
Through FFIC, we underwrite personal and commercial lines,
selling these products through independent agents and brokers. We
also participate in a crop insurance program through a reinsurance
arrangement. Our personal business unit focuses on affluent and
high-net-worth individuals while our commercial business unit
offers specialized property-casualty coverage for small and medium-
sized businesses. FFIC is one of the few carriers in the United States
that has a nationwide personal and commercial lines presence.
During 2013, catastrophe activity was relatively light and we saw
a stabilization of the U.S. property-casualty insurance market, leading
to modest market growth. At FFIC, a restructuring of the reinsurance
program for crop insurance business reduced our premiums for this
business line in 2013. While ongoing portfolio action to address prof-
itability concerns and change the business mix unfavorably impact-
ed our premiums, we saw improving results in 2013. The low interest
rate environment, however, continues to put pressure on profits. In
2014, we remain focused on niche markets, enhancing customer ser-
vice and improving FFIC’s core underwriting strengths. This should
53
allow us to better position ourselves in this competitive market over
time.
Our life and annuity business primarily underwrites fixed index
and variable annuities, and fixed index universal life insurance prod-
ucts – all of which are sold through independent distribution channels,
as well as large financial institutions such as banks and wire houses.
In 2013, we expanded our product portfolio by introducing a hybrid
product offering both variable investment allocation options and
index-linked investment allocation options. In 2013, competitiveness
increased in the fixed index annuity space due to aggressive products
offered by competitors that started to enter the industry two years
ago. Despite a more competitive market environment we continue to
be the market leader in the fixed index annuity market. In the wake
of better market conditions and product changes in 2012, product
profitability of new business significantly improved in 2013. As a
result, our life and annuity insurance business performed well over-
all. We anticipate continued economic uncertainty, equity market
volatility and a low interest rate environment in the long term. On the
upside, we continue to believe that U.S. demographic trends present
us with an excellent opportunity in the retirement market. In order
to reap these benefits, we will continuously strengthen our distribu-
tion network and value proposition to our customers through product
innovation and high-quality services.
selected insurAnce mArkets
Turkey
We serve the Turkish market mainly through our subsidiaries Allianz
Sigorta S.A., Allianz Hayat ve Emeklilik S.A. as well as the recently
acquired Yapı Kredi Sigorta S.A. and Yapı Kredi Emeklilik S.A., which
was rebranded to Allianz Yasam ve Emeklilik.
Through our subsidiary Allianz Sigorta, we continued to acceler-
ate our business in Turkey, with organic premium growth of 34 % com-
pared to a market average of 22 % in property-casualty in 2013. While
this growth was mainly driven by motor business, we are also a leading
provider of health insurance in Turkey.
Our operational success is based on a large and growing agent
distribution network, sophisticated pricing, robust underwriting and
high efficiency. Allianz is the market leader in terms of property-
casualty profits. Supported by a continuous focus on customer experi-
ence management and quality assurance, Allianz in Turkey succeeded
in increasing its customer base by over 50 % in 2013.
In addition to organic growth, the acquisition of Yapı Kredi Sig-
orta and its life and pension insurance subsidiary Yapı Kredi Emeklilik,
rebranded as Allianz Yasam ve Emeklilik, fueled our expansion in
Turkey. Through this transaction, which closed on 12 July 2013, Allianz
became the market leader in the property-casualty segment and a
top-3 player in life and pension solutions. This acquisition allows us
to accelerate our growth through strong strategic relationships in an
insurance market with significant long-term potential.
An important part of the agreement between Allianz and Yapı
Kredi is a 15-year bancassurance agreement which will provide
Allianz with exclusive access to the fifth-largest banking network in
Turkey, comprising more than 900 branches and 6.5 million custom-
ers. A further part of our profitable growth story is the successful
launch of a 10-year exclusive distribution agreement with HSbC on
23 August 2013 for the sale of Allianz life and pension products
through HSbC’s widely spread branch network in Turkey. Both part-
nerships will strengthen our presence in the Turkish market for life
and long-term provisions, which is currently dominated by bank dis-
tribution.
Based on the still very low levels of insurance penetration and
the young demographic profile, our outlook for insurance in Turkey
remains very optimistic. While we expect competitive pressure to
further increase, Allianz in Turkey benefits from its strong and diver-
sified market position to generate further profitable growth.
Allianz Worldwide Partners
In 2013, our global entities active in the b2b2C space – Allianz Global
Assistance, Allianz Worldwide Care and Allianz Global Automotive –
started to collaborate closely as Allianz Worldwide Partners (AWP).
The set-up of this division will be further enhanced during 2014 with
the reclassification of our International Health business in France
from Life/Health to the Property-Casualty business segment. Allianz
Global Assistance is the world leader in travel insurance, assistance
and personal services and has the operational platforms to offer sup-
port services on a 24/7 basis around the globe, handled by strong local
units providing on-site care. The combined activities of Allianz
Worldwide Care and Allianz France International Health will form
one of the biggest players in international health insurance, selling
and servicing health products to expatriates and high-net-worth
individuals around the globe. Allianz Global Automotive, as the lead-
ing strategic insurance partner in the automotive industry, combines
sales expertise around the car dealer point-of-sale with product
know-how embedded into the value chain of the automotive industry.
Based on premiums, we are the worldwide market leader in this seg-
ment, serving over 40 car brands across more than 25 countries.
Based on the combined strengths of these businesses, AWP can
provide a comprehensive product and service range.
AWP has seen strong growth in 2013, building on the continued
growth of its components and adding growth synergies from
increased collaboration on sales and products.
54
Annual Report 2013
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56 Strategy and Steering
59 Progress in Sustainable Development
Asset mAnAGement mArket
For the asset management industry as a whole, 2013 was a favorable
year, although it was a further year of uncertainty in capital markets
with volatility remaining at elevated levels. The announcement of the
Federal Reserve in May that it would start to take a reduction of its
asset purchases into consideration led to an increase in interest rates.
The yield on 10-year U.S. government bonds increased from 1.6 % at
the end of May 2013 to around 3 % at the end of the year. As a result of
the interest rate increase, valuations for fixed income assets declined,
while equities recorded a strong performance. On a global basis,
equities rose by 29 % last year.
Market flows into equity and fixed income strategies were par-
ticularly strong in the first half of 2013. During the second half of the
year, flows into traditional fixed income strategies were to a certain
extent impacted by the rise in interest rates. Flows into both shorter-
term and floating-rate strategies continued to be strong, while cer-
tain investors found the higher yields presented new opportunities
in longer-term strategies. Flows into equity assets, however, mostly
continued throughout the year, reaching levels not observed in the
recent past.
Allianz’s Asset Management operations recorded strong inflows
in areas such as non-traditional fixed income and multi-asset. The
overall flow development, however, was impacted by the general
market trend of outflows in the traditional bond space.
Throughout 2013 both PIMCO and AllianzGI reflected market
developments in their portfolio allocations and continued to deliver
outstanding client service. From a strategic perspective, PIMCO as
well as AllianzGI went ahead with the implementation of their longer-
term development plans. In 2013, AllianzGI engaged in further com-
plexity reduction by combining entities, while at the same time fur-
ther expanding its product offerings, e.g. in the infrastructure debt
space. PIMCO continues to focus on delivering returns and managing
risk on behalf of clients across a growing range of investment solu-
tions, and took additional steps with regard to their longer-term
development plan to broaden its product offerings into such areas as
the alternatives platform, income solutions, equities and ETFs.
Annual Report 2013
Allianz Group
55
Strategy and Steering
Our longer-term strategic ambition is to be the world’s strongest financial com-
munity: the leading property-casualty insurer in terms of revenue and profitability,
one of the three most profitable life and health insurers among our global peer
group and the number one active wealth manager by assets and operating margin.
In 2013, we stayed on target to meet this goal, achieving one of the best operating
results in our history. We remain the global number one in property-casualty
insurance, are among the top five global life and health insurers and defended
our position as the world’s most profitable and second largest active asset manager.
In an uncertain and volatile business environment, we will protect the pillars of
our business strategy – our integrity, financial strength, operational excellence
and talent base – and leverage our size to offer outstanding products and services
to our customers and business partners.
Our unique strengths
Our three business segments Property-Casualty, Life/Health and
Asset Management all contribute significantly to our operating profit.
As a result, we provide our shareholders with a high level of diversifi-
cation, while offering our customers truly global reach in practically
all business lines of insurance and asset management. We hold lead-
ing market positions in the mature economies as well as in several of
the world’s preeminent growth markets. We are one of the leading
insurers of multinational corporations and large infrastructure
projects. At the same time we are the biggest provider of microinsur-
ance solutions to low-income households in developing economies.
Our capital base is one of the strongest in the industry, while Allianz
is one of the world’s most valuable brands in financial services.
the four pillars of our strategy
Building the strongest financial community
t h
g
n
Financial str e
Truste
d
p
a
r
t
n
e
r
insurance and
investments
O
p
e
r
a
t
i
o
n
al e
xcellence
e st people
B
56
Annual Report 2013
Allianz Group
C
Group Management Report
Your Allianz
Business Operations and Markets
49
56 Strategy and Steering
59 Progress in Sustainable Development
Our Operating envirOnment
The 2013 insurance and asset management environment was char-
acterized by the ongoing depression of interest rates, suppressed
economic growth in mature economies, excess capital and risk
capacity and a resulting margin pressure across our lines of business.
In addition, we witnessed a further evolution of the regulatory frame-
work we operate in:
− In July 2013, Allianz was designated by the Financial Stability
Board as a Global Systemically Important Insurer and has, as a
consequence, become subject to additional regulatory require-
ments. Allianz continues its active engagement with supervisory
bodies and is preparing for the additional requirements
announced – for example, the implementation of a recovery
plan.
− In November 2013, the European Union agreed on the timeline
for the implementation of Solvency II, which will come into effect
from 2016 onwards. Allianz has supported Solvency II from the
beginning, convinced it will provide the Union with one of the
most advanced regulatory regimes in the world, for the benefit
of insurers and their stakeholders.
Natural catastrophes were again a major feature of the year, with
Europe witnessing the highest ever losses due to flooding and hail.
Our diversification and size helped us to absorb those risks but we
will continue to monitor closely our overall exposures and to stay at
the forefront of developments in the securitization of risks for the
capital markets. Economic growth continues to differ markedly
between our European core markets and the emerging economies. At
the same time the Euro’s appreciation against most relevant curren-
cies impacts our financial results. Consumer behavior is creating
new channels and markets, challenging an industry still working
largely on paper and face-to-face. Public scrutiny of the financial
services industry is at an all-time high, with record fines being passed
to banks and ongoing discussions in the public and within our industry
on how to best ensure good advice, particularly for life and pension
insurance.
Our fOcus gOing fOrward
In this environment we will continue to protect the pillars of our busi-
ness strategy – our integrity, financial strength, operational excel-
lence and talent base. Together with other leading financial institu-
tions we are investing time and talent to define sustainable insurance
and investment (more information on our Progress in Sustainable
Development starting on
page 59). We are continuously monitoring
the nature of our customer relationships and our investment and
insurance product portfolio to understand the potential implications
and impact of our actions for society and the environment.
We are pleased to be rated one of the strongest financial institu-
tions in terms of capital: In March 2013, Standard & Poor’s raised the
outlook for our AA rating to “stable”. It allows us to offer our clients
outstanding security in a volatile global business environment. We
intend to maintain our strong capital position through prudent man-
agement of our balance sheet, an ongoing focus on operating profit-
ability and a cautious stance on large-scale acquisitions. We will be
looking out for further consolidation opportunities in attractive mar-
kets and segments where we see a clear complementary fit with our
portfolio and capabilities. In this context we expect to generate sig-
nificant value through disciplined allocation of capital to businesses
and markets promising sustainable returns at or above our hurdle rate.
To secure our leadership in the world’s preeminent markets for
insurance and asset management, we will focus on growing with our
existing customers. We will continue to drive best practice in under-
writing, investment management and client service between our
operating entities globally. At the same time we will further increase
the pace of investments in our digital offering and processing capa-
bilities.
In each of our business activities we strive to reach the scale
necessary to offer an unparalleled development platform for our
employees and ensure an outstanding product offering and service
for our customers and business partners. Consequently, we are
evolving our structures to ensure that we capture the full potential of
our global organization. For example, as of 1 January 2014, a new
holding named “Allianz Worldwide Partners” (AWP) will steer the
activities of Allianz Global Assistance, Allianz Global Automotive,
Allianz France International Health and Allianz Worldwide Care. AWP
thus coordinates our activities in the B2B2C business, where we develop
products with corporate clients which they offer to their own customers
or employees.
Safeguarding the strategic pillars of our business and focused on
growth and scale, we are confident that over the coming years we will
build what we aim to be – the world’s strongest financial community.
Annual Report 2013
Allianz Group
57
Our steering
BOard Of management
and OrganiZatiOnaL structure
Allianz SE has a divisional Board structure that is further split into
functional and business responsibilities. The business-related divi-
sions reflect our business segments Property-Casualty, Life/Health,
memBers Of the BOard Of management and their respOnsiBiLities in 20131
Asset Management and Corporate and Other. These are overseen by
seven board members, with six members concentrating on the insur-
ance business segments and one on Asset Management as a stand-
alone segment. The remaining four divisions (i.e. Chairman of the
Board of Management, Finance, Investments and Operations) focus
on Group functions, along with business-related responsibilities.
respOnsiBiLities
Chairman of the Board of Management
Finance, Controlling, Risk
Investments, Global Life/Health
Operations, Allianz Worldwide Partners
Insurance Western & Southern Europe, Global Property-Casualty
Insurance USA
Insurance German Speaking Countries, Banking, Human Resources
Insurance Growth Markets
Asset Management Worldwide
Global Insurance Lines & Anglo Markets
Insurance Iberia & Latin America, Legal & Compliance, Mergers & Acquisitions
Asset Management. For a comprehensive view of our segment perfor-
mance, please refer to the Management Discussion and Analysis
starting on
page 64.
Besides performance steering, we also have a risk steering pro-
cess in place, which is described in the Risk and Opportunity Report
starting on
page 105.
Non-financial key performance indicators (KPIs) are mainly
used for the sustainability assessment of the mid-term bonus – under
the category “partner of choice” mainly the following KPIs are consid-
ered: Allianz Engagement Survey and Net Promoter Score results,
brand performance (measured by the Funnel Performance Index),
diversity development, organizational transparency (as measured by
the Transparency International Corporate Reporting ranking) and
sustainability development (as measured by widely recognized indi-
ces and rankings).
BOard memBers
Michael Diekmann
Dr. Dieter Wemmer
Dr. Maximilian Zimmerer
Dr. Christof Mascher
Oliver Bäte
Gary Bhojwani
Dr. Werner Zedelius
Manuel Bauer
Jay Ralph
Clement Booth
Dr. Helga Jung
1
For further information about the remuneration structure, including target setting and performance
assessment, please refer to the Remuneration Report starting on page 37.
target setting and mOnitOring
The Allianz Group steers its operating entities and business seg-
ments via an integrated management and control process. This
starts with the definition of a business-specific strategy and goals,
which are discussed and agreed between the Holding and operating
entities. According to this strategy, a three-year plan is prepared by
the operating entities and aggregated to form the financial plans for
the business divisions and the Allianz Group. The Supervisory Board
then approves the plan and sets corresponding targets for the Board
of Management. The performance-based remuneration of the Board
of Management is linked to short-, mid- and long-term targets to
ensure effectiveness and emphasize sustainability. For further
details, please refer to the Remuneration Report starting on
page 37.
This plan also forms the basis for our capital management.
We continuously monitor our business performance against
these targets through monthly reviews to ensure that appropriate
measures can be taken in the event of negative developments. During
these reviews, we monitor key operational and financial metrics.
Operating profit and net income are the main financial performance
indicators across all business segments for the Allianz Group. In
addition, we also use segment-specific figures such as the combined
ratio for Property-Casualty, in-force and new business margins and
margin on reserves for Life/Health and the cost-income ratio for
58
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56 Strategy and Steering
59 Progress in Sustainable Development
Progress in Sustainable Development
We take our responsibility for the environment and societal issues seri-
ously and focus on activities relevant to our business and stakehold-
ers. Over the course of 2013 we made good progress in further embed-
ding environmental, social and governance aspects into our business.
Our positive performance was also recognized by the Dow Jones Sus-
tainability Index, which named us the leading sustainable insurer.
At the same time, Allianz is receiving more attention from non-
governmental organizations (NGOs). As a major insurer and asset
manager, we have business relationships with companies worldwide.
Critics of some of these companies are increasingly turning to us. We
take their concerns seriously. Engagement is a key tool in under-
standing the expectations of our stakeholders, and also as a means
of starting a discussion. Our strong commitment to integrating envi-
ronmental, social and governance aspects into our core processes
supports our business strategy, ensures we live up to our values and
demonstrates responsibility in our decision-making. As signatories
to the United Nations Environment Programme Finance Initiative’s
(UNEP-FI) Principles for Sustainable Insurance (PSI) and the Principles
for Responsible Investment (PRI), we want to drive sustainability
across the board.
This chapter highlights Allianz’s sustainability performance
and presents major developments in the areas of Business, Environ-
ment, People and Ethics in 2013.1
Business 2
AlliAnz BrAnd
The Allianz brand3 plays a key role in driving sustainable business
growth. Altogether, we work with more than 600,000 Allianz ambas-
sadors such as employees, agents and partners towards creating a
One Allianz experience for our customers. In line with this goal, our
Allianz branded revenues stood at approximately 82 % (2012: 83 %) of
total revenues in 2013. Our one-brand vision leaves room for our
renowned specialty brands such as PIMCO and Euler Hermes that use
Allianz as their reference and build brand equity transfer for our
mutual benefit. Allianz is one of the most successful financial ser-
vices brands in the Interbrand 100 Best Global Brands Ranking 2013:
Our brand again demonstrated growth in value, increasing by 8 % to
approximately USD 6.7 bN (2012: USD 6.2 bN).
Authentic brand experience for trusted relationships
In 2013, we continued our global brand communication framework
ONE. Rolled out in over 30 countries, ONE supports our global position-
ing as a Trusted Partner and establishes a consistent and authentic
brand message. We further evolved our global sponsoring platforms.
With a stronger focus on digital and social media, and in close align-
ment with our distribution strategy, our premium sponsorships now
offer a new quality of customer experience and engagement with our
brand and our business. Furthermore, we anchor corporate respon-
sibility as a vital component in our strategic sponsorship approach.
More than 25 Allianz entities, for example, are engaged in our Road
Safety Program.
Overall, we continue to invest in our strong global brand, with
increased focus on strategic growth markets and a clear emphasis on
digital media. In 2013, for example, the overall share of digital spend-
ing in our local markets reached almost 25 % of our media expendi-
tures worldwide.
Our customers expect free choice across a variety of different
access channels to Allianz. Therefore, we invest in real-time custom-
er interaction and corresponding technology to stay connected to
consumers and improve our customer service. One particular focus
in our retail business is on making Allianz products and services easy
to find and to purchase, be it from Allianz agents and partners or
online. For example, offer innovations such as FastQuote from Allianz
Italy allow customers to receive a competitive motor quote simply
and quickly based on only two data feeds.
Customer BAse
Overall, our customer base has grown from approximately 78 million
customers insured by Allianz worldwide in 2012 to more than 83 mil-
lion customers in 2013. The increase was mainly due to the acquisi-
tion of Yapı Kredi in Turkey with around 3 million customers and an
organic growth of approximately 2 million customers.
Customers By region/Country 1
as of 31 December 2013 [31 December 2012] in %
Anglo Markets 7.9 [7.5]
USA 1.4 [1.6]
1
2
3
A full presentation of our sustainability strategy, approach and progress can be found online at
www. allianz.com/sustainability.
More information can be found online at www.allianz.com/sustainability/business.
Our Allianz trademark is registered and protected worldwide, as are our domain names. Furthermore,
we have registered our corporate design and brand claim “Allianz. With you from A – Z.” in all relevant
countries worldwide. With our rebranding activities we are extending the scope of our business under
the Allianz brand beyond the core area of insurance and asset management. In order to maintain the
distinctiveness and strength of our Allianz brand, we continuously monitor possible infringements of our
trademark applications and registrations by third parties.
Growth Markets 32.3 [36.2]
Rest of Europe &
Latin America 18.5 [14.0]
1
Customer figures exclude microinsurance and pension funds clients.
Annual Report 2013
Allianz Group
59
Germany 24.0 [24.2]
Rest of German Speaking
Countries 2.6 [2.7]
France 6.0 [6.4]
Italy 7.3 [7.4]
Customer foCus
The loyalty of our customers is a key factor for sustainable growth. As
part of our customer-focused activities, we use key feedback tools,
such as the Net Promoter Score (NPS). NPS is a measurement of cus-
tomers’ willingness to recommend Allianz and has been established
as our key global metric for customer loyalty in about 40 Allianz com-
panies worldwide representing around 90 % of gross premiums written.
Top-down NPS is measured annually according to global cross-
industry standards and allows benchmarking against competitors in
the respective markets. Despite shortfalls in some markets versus
local peers, we increased our global NPS performance by two percent-
age points overall in 2013. Compared to our competitors, 50 % of
Allianz businesses significantly outperformed their local peer aver-
age and 27 % have achieved loyalty leadership in their market. In 2014,
we expect the positive global trend to continue and more markets to
outperform their local peers.
To steadily improve our customer service, we apply bottom-up
NPS: asking our customers for direct feedback after key interactions
with Allianz – such as claims handling or sales – helps us to identify
areas for improvement and continuously monitor the impact of our
measures taken.
sustAinABility in Core Business
And ProduCts And serviCes
Established in 2012, the Group ESG Board, a committee with Board
Member leadership, is responsible for further promoting environ-
mental, social and governance (ESG) aspects in our insurance and
investing activities. Strengthening the governance and integration of
ESG aspects in our core business processes was a priority in 2013. We
identified sensitive business areas for both underwriting and invest-
ments, developed a global ESG business screening process and also
established an ESG dialogue format which continually engages a
group of NGOs. The dialogues allow NGOs to directly address Allianz
with their concerns and give us the opportunity to listen, understand
and respond to their different perspectives. We can also tap into the
expertise of NGOs when formulating ESG positions and guidelines,
incorporating their direct, on-the-ground experience on various topics.
Sustainability in proprietary investments
We strive to invest sustainably across all asset classes over time. The
practical implementation of sustainability in proprietary asset man-
agement involves integrating ESG factors into our investment process
through research, corporate and country analysis, asset manager
selection, monitoring and risk management. Moreover, concerns
about climate change are changing the way assets are managed and
are giving rise to new and alternative asset classes:
− As large institutional investors, insurance companies are impor-
tant players in the financing of a low-carbon economy. We are
one of the leading investors in renewables with a strong portfolio
in wind energy and solar power amounting to € 1.7 bN in 2013
(2012: € 1.3 bN). Renewables have an attractive risk-return profile
that fits well with our long-term investment strategy. We are
gradually expanding our investments in this sector with a
planned investment volume of around € 400 MN per year.
− Allianz Real Estate (ARE) has a comprehensive sustainability pro-
gram, with a focus on environmental factors. We apply specific
sustainability metrics in investment and property management
processes and actively engage with tenants.
− As part of Allianz’s Climate Change Strategy, we are an early
investor in the carbon market. The Rimba Raya project in Borneo
(Indonesia), which will prevent the emission of 90 million tons
of CO2 over a 30-year period, is Allianz’s third carbon investment
in emerging markets. We are also using the credits from these
direct investments to offset our own carbon footprint.
Sustainability in third-party asset management
Allianz manages a growing portfolio of Sustainable and Responsible
Investments (SRI). At the end of 2013, assets under management in
our SRI funds for PIMCO totaled € 78.2 bN (2012: € 49.1 bN) and AllianzGI
€ 17.5 bN (2012: € 15.3 bN), bringing the total to € 95.7 bN, which is 6 % of
our total third-party assets under management. At the heart of our
ESG strategies lay strong ESG research capabilities, engagement with
the companies we invest in and pursuit of active share ownership
through proxy voting.
Sustainability in underwriting
As a leading industrial insurer globally and one of the world’s top life
insurers, it is important that we demonstrate leadership to our cus-
tomers, the industry as a whole and wider society in embedding ESG
issues into our insurance business. Effective research and risk man-
agement are crucial to mitigating ESG risks. To support our local
insurance entities in assessing ESG risks, we have agreed to establish
an ESG Impact Desk. Entities will be required to consult this Desk in
the event that their transactions trigger key ESG issues within our
sensitive business areas. We will continue to work on integrating ESG
issues into our insurance business in 2014.
Green solutions
We offer our private and commercial customers over 150 green prod-
ucts and services that mitigate the negative effects of climate change
or take its environmental impact into account. We are able to report
on their contribution to our overall financial performance for the first
time and in 2013 revenues totaled more than € 1.1 bN.
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56 Strategy and Steering
59 Progress in Sustainable Development
Microinsurance
Many low-income families in developing countries lack access to
financial services which could help them manage the risks associated
with natural disasters, accidents and illness. Allianz offers micro-
insurance products in eleven countries in Asia, Africa and Latin
America. Our products range from life insurance and savings plans
to crop index insurance. 2013 saw strong growth again; we now
insure 24.9 million people (2012: 17.1 million) with revenues of
€ 86.1 MN (2012: € 78.6 MN) 1. For more information please refer to the
chapter Risk and Opportunity Report from
page 105 onwards.
Environment 2
CArBon reduCtion strAtegy
We are committed to reducing our environmental impact. We have a
target to reduce our carbon emissions per employee by 35 % by 2015
against a 2006 baseline. Since 98 % of the Group’s emissions come
from energy, travel and paper, we are focusing our activities on these
three areas. Because energy use is the largest contributor to our car-
bon footprint, we also have a specific energy target: to reduce energy
consumption per employee by 10 % by 2015 against a 2010 baseline.
environmentAl footPrint 1
as of 31 December
Total emissions
Per employee emissions
Total energy consumption
thereof: Renewables
2013
20122
20112
in metric
tons Co2e
in metric
tons Co2e
in gJ
in %
342,724
344,776
361,398
2.35
2.40
2.55
2,901,457
3,079,897
3,124,973
41.7
39.2
33.4
Total travel – plane, train, car
in tkm
967,210
931,356
953,717
Total paper
in metric
tons
20,894
20,193
19,525
1
2
KPMG Wirtschaftsprüfungsgesellschaft AG has provided limited assurance on the 2013 environmental
performance information. For further information, please refer to www.allianz.com/sustainability.
2012 and 2011 figures have been adjusted reflecting a methodology change for reporting on energy from
renewable sources and 2012 figures were adjusted for error corrections.
As part of our overarching climate change strategy and in addition to
our carbon reduction target, we have been a carbon neutral business
since 2012, by offsetting our emissions through our own carbon
investment projects.
People 4
BreAkdown of Co2 emissions 1
as of 31 December 2013 in %
Energy
Travel
Paper
Water
Waste
our emPloyees
Our employees’ exceptional commitment and ambition to provide
excellent service to our customers are crucial to our success. We
place great emphasis on fostering employee engagement, strong
leadership and technical expertise among an increasingly diverse
workforce of 147,627 employees as of 31 December 2013 (31 December
2012: 144,094 employees) 5.
2013
57.3
37.1
3.9
0.2
1.5
1
KPMG Wirtschaftsprüfungsgesellschaft AG has provided limited assurance on the 2013 environmental
performance information. For further information, please refer to www.allianz.com/sustainability.
In 2013, we continued to reduce our carbon footprint , cutting CO2
emissions from our business. Our overall CO2 reduction since 2006
now stands at 37.2 % 3 per employee and, whilst we have also exceeded
our energy reduction target (status minus 18.1 % per employee), as
the economy continues to improve the challenge for us will be con-
trolling our consumption and emissions over business cycles.
Diversity
Allianz recognizes the importance of having a diverse, inclusive
workforce that is made up of employees from different backgrounds.
We understand that promoting diversity is necessary for Allianz as a
global company to be successful and we have implemented a num-
ber of initiatives to support this. Consistent with our Code of Conduct,
Allianz has a zero-tolerance policy against discrimination and
harassment in the workplace. As part of the effort on the advance-
ment of women at Allianz, in 2008 we set ourselves the global target
of increasing the share of women in the talent pools for executive
positions to 30 % by 2015. A top management sponsorship program for
women and flexible work-life programs, such as part-time employ-
ment or job sharing, are part of supporting actions taken in several
1
2
3
Figures include non-consolidated entities (i.e. India).
More information can be found online at www.allianz.com/sustainability/environment.
The Allianz Group’s total reported carbon footprint already considers the compensation activities of some
of our subsidiaries.
4
5
More information can be found online at www.allianz.com/sustainability/people.
Total number of employees with an employment contract of all consolidated companies (core and non-
core business).
Annual Report 2013
Allianz Group
61
countries. We are also committed to having 30 % of management posi-
tions in Germany held by women by the end of 2015.
emPloyee engAgement index
women ACross the AlliAnz grouP 1
Employee Engagement Index
2013
73
2012
70
2011
67
in %
Women in executive positions 2
Female managers 3
Share of women in overall workforce
2013
21.2
35.5
52.8
2012
19.4
33.9
52.5
2011
19.2
33.3
52.3
1
2
3
Figures based on the number of employees in Allianz’s core business. Excluded are fully consolidated
companies which are considered as pure financial investments and companies classified as held for sale.
Including women at all executive positions below the Board of Management.
Including women functionally responsible for other staff, regardless of level, e.g. division, department,
and team managers.
Talent management
We take a common and systematic approach to developing talent
across all Allianz companies. To ensure the quality and performance
of our employees, we focus on managing and developing talent and
careers by assessing performance and potential, providing appropri-
ate development actions and ensuring robust succession plans. We
develop both leadership and functional skills to ensure our employ-
ees can achieve current and future business goals. In order to meet
future staff needs, we promote the necessity of lifelong learning. Also,
our Strategic Workforce Planning proactively supports strategic
human resources decision-making by supplying forecasts on eco-
nomic, demographic and socio-cultural trends.
Remuneration
The Allianz Group paid a total of € 9.1 bN (2012: € 8.9 bN) to its employees
worldwide in 2013. Of this, approximately 32 % was for performance-
related (variable) remuneration elements. € 2.4 bN (2012: € 2.3 bN) was
spent on social security contributions, pensions and other social
benefits.
Employee engagement
Allianz annually collects feedback from employees, managers and
board members to measure the overall level of engagement and iden-
tify its drivers through the Allianz Engagement Survey. 119,230
employees from 72 Allianz companies were invited to participate in
2013. The global response rate of 84 % was 3 percentage points up com-
pared to 2012. The Employee Engagement Index is a key measure of
employee satisfaction, loyalty, advocacy and pride. Scores on this
index have improved continuously every year since the launch of the
Group-wide survey in 2010. The survey results are factors in the remu-
neration of the Group’s Board of Management.
62
Annual Report 2013
Allianz Group
Further employee figures
further emPloyee figures 1
tenure 2
Tenure Allianz Group
Age struCture in %
Average age – Allianz Group
emPloyment relAtionshiP in %
Permanent employees
Temporary employees
Full-time employees
Part-time employees
emPloyee QuAlifiCAtion in %
University degree
Vocational training
Other qualification
emPloyee turnover
Total external recruitment
Total external leavers
2013
2012
10.8
10.7
40.1
39.8
93.3
6.7
88.5
11.5
45.3
31.6
23.1
93.5
6.5
87.6
12.4
44.5
31.3
24.2
23,477
21,115
21,324
19,815
1
2
Figures based on the number of employees in Allianz’s core business. Excluded are fully consolidated
companies which are considered as pure financial investments and companies classified as held for sale.
Tenure represents the period of employment in Allianz companies starting from the date of the first entry
into an Allianz company.
Community engAgement
We donate money to address social, environmental and cultural
issues relevant to Allianz and the societies in which we operate. In
2013 we donated € 18.6 MN (2012: € 20.4 MN) to support local communi-
ties. We also offer our employees the possibility to donate in the event
of natural catastrophes. Furthermore, we have an international net-
work of 13 Allianz affiliated corporate foundations.
We offer a number of employee volunteering opportunities in
local communities, for example My Finance Coach, which fosters
financial literacy among youth and reached more than 150,000 stu-
dents in Germany alone in 2013, and the leadership development
program Social OPEX, in which 59 employees from 21 Allianz subsid-
iaries shared their expertise with 24 socially-committed organiza-
tions.
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56 Strategy and Steering
59 Progress in Sustainable Development
Ethics 1
Our integrity calls upon us to make only promises we can keep and
take only risks we can manage. Good corporate governance and
transparency are key to gaining and keeping the trust of our stake-
holders.
ComPliAnCe mAnAgement
In 2013, we continued with measures to further strengthen the effec-
tiveness of compliance management by enhancing quality assur-
ance, global reporting on compliance risks and independent reviews
of key elements of our compliance program. Allianz applies its gen-
eral operational risk management approach to assess corruption
and fraud risks. Additional assessments and on-site reviews are com-
bined with the new Compliance Quality Assurance Program. Rolled
out in 2012, the program consists of self-assessments, on-site reviews
and monitoring via reporting. It verifies the implementation and
effectiveness of Allianz’s Compliance Management System, which
includes the Anti-Corruption Program, across the Group.
The implementation and maintenance of the Allianz Anti-
Corruption Program, which is compulsory for all employees, contin-
ued in 2013. It aims to inform employees about Allianz’s main anti-
corruption and anti-fraud rules, the essentials of our anti-corruption
and gifts and entertainment policies, and our anti-fraud principles.
Training about anti-discrimination and anti-harassment procedures
is also offered, in alignment with local legal requirements.
trust And trAnsPArenCy
One of the aftereffects of the banking and European sovereign debt
crisis is that the insurance industry has been confronted with an
increasing degree of regulation. All-time low interest rates and mar-
ket insecurity and volatility remain critical factors for our business
and particularly for our customers. Our main goal when interacting
with governments is to contribute solutions to socio-political issues
and create a stable political and economic landscape that will ben-
efit our customers and us over the long term. For example, we are
engaging in discussions on the impact of low interest rates on savings
and old-age provisions and facilitating investments in a low-carbon
economy.
Headquartered in Germany, Allianz SE is committed to the coun-
try’s long lasting democracy. Thus, we contribute to democratic
political parties in the German Parliament (Bundestag) representing
a variety of views within the political spectrum and supporting the
social market economy. Our policy governing corporate donations to
political parties in Germany rules that all contributions are made
annually on 1 July to ensure that they are in no manner connected, or
perceived to be connected, to any legislative initiative or elections. In
2013, we contributed a total of € 150,000.
1
More information can be found online at www.allianz.com/sustainability/ethics.
Annual Report 2013
Allianz Group
63
a year earlier. Despite this increase, spreads on debt-ridden Economic
and Monetary Union (EMU) countries narrowed considerably. Buoyed
not least by the ongoing low interest rate environment, stock markets
rallied. Following an initial depreciation against the U.S. Dollar in the
first quarter of 2013, the Euro gained in strength over the remainder
of the year. Progress in solving the European sovereign debt crisis and
the economic stabilization of the Eurozone have been key factors in
shoring up confidence in the Euro.
Business environment 2013:
insurance and asset management industry
2013 was another challenging year for the insurance industry. With
economic growth remaining subdued, overall premium growth was
more or less stagnant. But this stability conceals considerable differ-
ences between markets. For example, German premiums strength-
ened, along with moderate improvements in economic activity,
whereas parts of southern Europe were still in the doldrums. Emerging
markets, too, witnessed a rather turbulent year, with highly volatile
capital flows and exchange rates. But despite the economic slow-
down in many of these markets, overall premium growth proved
remarkably resilient, mainly driven by an increase in life growth.
Low interest rates and financial market volatility were still a
major challenge. As a result, investment returns stayed rather low,
putting the sector’s profitability under pressure. Furthermore, regu-
latory developments continued to have a significant impact. Most
importantly, the final agreement on Solvency II in November 2013
paved the way for its introduction on 1 January 2016 and reduced
somewhat the regulatory uncertainty that has beleaguered the
industry in recent years.
Although 2013 had its fair share of natural disasters, from
typhoons and earthquakes in Asia to flooding in Europe, catastrophe
losses remained rather low for a second consecutive year – at least in
a global context – due to the weak penetration in many of the markets
that were hit by natural catastrophes. This bolstered underwriting
profitability. The big exception was the German market, which had
to contend not only with floods in June but with big storms thereafter,
triggering large insurance losses.
Business Environment
Economic environment 2013
BRIGHTER ECONOMIC CONDITIONS DuRING THE YEAR
After a subdued start to 2013 the world economy gained momentum
starting in the second quarter, thanks mainly to an improved picture
in industrialized countries. Particularly encouraging was the return
to positive economic growth in the Eurozone following six negative
quarters in a row. In the United States and the U.K., overall output
picked up again after only tepid growth at the start of the year. In
addition, the economic recovery in Japan continued on a broader
footing thanks to expansionary monetary and fiscal policies. By con-
trast, economic growth in most emerging markets remained fairly
subdued, taking their pre-crisis growth rates as a yardstick. All in all,
global economic output is likely to have grown by 2.3 % in 2013, well
below the 10-year average of close to 3 %.
Gross domestic product (GDP) in industrialized countries
increased by about 1.1 % on average last year. While both the United
States and Japan registered fairly solid growth of close to 2 %, real GDP
in the Eurozone contracted on average by 0.4 % in 2013. As in previous
years, economic performance varied widely within the currency area.
Countries like Greece and Italy experienced a strong contraction,
while Austria, Belgium and the Slovak Republic registered positive,
albeit weak, growth. The economic impact emanating from the Euro-
pean debt crisis continued to exert a dampening effect on the Ger-
man economy. Following an already moderate expansion of 0.7 % in
2012, real GDP grew only 0.4 % in 2013. Emerging markets expanded by
4.4 % on average, with economic growth in emerging Asian markets
coming in at 6.2 %.
The primary drivers on the financial markets in 2013 were once
again the ultra-loose monetary policy of major central banks and the
gradual easing of the European sovereign debt crisis. The financial
markets took a hefty knock in the summer months after the Federal
Reserve sketched out a possible timetable for a gradual phasing-out
of its bond-purchasing program. This not only pushed up yields in
the United States, but above all exerted downward pressure on the
currencies of those emerging markets with a poor economic score-
card. Countries with yawning current account deficits like India and
Turkey proved particularly vulnerable. In December, the Federal
Reserve finally announced the first step towards a gradual normal-
ization of its monetary policy – a reduction in the volume of its
monthly bond purchases by USD 10 BN to USD 75 BN from January 2014.
On the other side of the Atlantic, the European Central Bank lowered
its key interest rate in two steps from 0.75 % to 0.25 % over the course of
2013 and continued to signal its readiness to lower key interest rates
further and even offer, yet again, exceptionally long terms for financ-
ing operations. Yields on 10-year German government bonds ended
the year at 1.9 %, an increase of about 60 basis points compared with
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Business Environment
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66 Executive Summary of 2013 Results
71
Property-Casualty Insurance Operations
78 Life/Health Insurance Operations
82 Asset Management
85 Corporate and Other
87 Outlook 2014
92 Balance Sheet Review
99 Liquidity and Funding Resources
104 Reconciliations
Market flows into equity and fixed income were strong in the
first half of 2013. During the second half of the year, fixed income
flows were to a certain extent impacted by the rise in interest rates.
Flows into equity assets mostly continued throughout the year,
reaching levels not observed in the recent past. These equity flows
were not only driven by passive products. Active equity managers
were also able to capture a portion of the organic growth. The flow
development, as well as rising asset valuations, drove revenues and
profits higher. Industry efficiency generally improved, despite the
continuing growth trend in expenses – due to higher compensation
or marketing costs, for example.
In the property-casualty sector, overall market conditions were basi-
cally unchanged from the previous year. Stable premium growth in
advanced markets was underpinned by moderate rate increases and
the gradual improvement of economic activity, for example in the
United States and Germany. On the other hand, many markets in
southern Europe, for example Italy and Spain, remained in reverse
gear with continuous declines in premium income. Premium growth
in emerging markets generally proved robust, despite turbulent
financial markets. In particular, premium increases in China and
Latin America recorded double-digit growth rates. Overall, according
to our own market estimates and based on preliminary figures, global
premiums grew around 4.5 % in 2013 (adjusted for foreign currency
translation effects).
Underwriting profitability improved slightly in 2013, reflecting
the general positive pricing momentum and the low level of natural
catastrophes. But overall profitability was restrained by the challeng-
ing investment environment. Despite small increases in the wake of
the assumed change in U.S. monetary policy (“tapering”), interest
rates remained at low levels and investment returns were therefore
subdued.
In the life sector, global premium income growth recovered slightly
in 2013. This improvement was mainly led by emerging markets,
which benefited from relatively strong increases in China and South-
East Asia. Latin America continued to post double-digit growth as
well. The performance of advanced markets was more mixed, with
some – notably the U.S. market – under pressure and others recover-
ing rather strongly, for example Germany, France and Italy. In total,
according to our own market estimates and based on preliminary
figures, global premiums grew by around 3 % in 2013 (adjusted for
foreign currency translation effects).
The persistent low-yield environment coupled with modest eco-
nomic growth depressed new business profitability for traditional
life business. Insurance savings products continued to suffer from
weak demand against a backdrop of reduced guarantees. However,
risk protection products fared better. These included not only tradi-
tional mortality, but also health insurance products such as disability
and long-term care insurance – which benefited from rising con-
sumer awareness of a “protection gap” in these fields.
For the asset management industry as a whole, 2013 was a favorable
year, although it was a further year of uncertainty in capital markets
with volatility remaining at elevated levels. The announcement of the
Federal Reserve in May that it would start to take a reduction of its
asset purchases into consideration, led to an increase in interest
rates. The yield on 10-year U.S. government bonds increased from
1.6 % at the end of May 2013 to around 3 % at the end of the year. As a
result of the interest rate increase, valuations for fixed income assets
declined, while equities recorded a strong performance. On a global
basis, equities rose by 29 % last year.
Annual Report 2013
Allianz Group
65
Executive Summary of 2013 Results
− Revenues increased to € 110.8 bn.
− Operating profit grew 7.8 % to € 10,066 mn.
− Net income increased to € 6,344 mn.
− Solvency ratio remained strong at 182 %.1
Allianz Group overview
Allianz SE and its subsidiaries (the Allianz Group) have opera-
tions in over 70 countries. The Group’s results are reported by
business segment: Property-Casualty insurance operations,
Life/Health insurance operations, Asset Management and
Corporate and Other.
Key figures
key figures AlliAnz group
€ mn
Total revenues
Operating profit 2,3
Net income 2
Solvency ratio 1 in %
2013
110,773
10,066
6,344
182
2012
106,383
9,337
5,558
197
Earnings summary
economic And industry environment in 2013
The world economy gained momentum in 2013, mainly due to a pick-
up in industrialized countries. The primary drivers of the financial
markets in 2013 were once again the ultra-loose monetary policy of
major central banks and the gradual easing of the European sovereign
debt crisis. While equity markets recorded a strong performance, per-
sistent low interest rates continued to put pressure on the insurance
industry’s investment returns. The announcement by the Federal
Reserve that it would start to consider a reduction of its asset pur-
chases not only pushed up yields in the United States but also exert-
ed downward pressure on the currencies of emerging markets such
as Turkey and Brazil. The Euro strengthened against the U.S. Dollar
and selected emerging market currencies over the course of the year.
In the property-casualty insurance industry, overall market con-
ditions were basically unchanged from the previous year. Under-
pinned by a positive pricing momentum, the industry saw stable
premium growth in advanced markets globally, while southern Euro-
pean countries in particular saw continued declines. On the other
hand, premium growth in emerging markets generally proved robust.
Claims from natural catastrophes remained rather low for a second
consecutive year, at least in a global context, as weak penetration in
many of the markets hit by natural catastrophes limited insurers’
losses – except for Germany with higher losses from floods and big
storms thereafter.
In the life insurance industry, global premium income growth
recovered slightly in 2013. This was mainly driven by premium
increases in emerging markets, while there was a mixed picture in
advanced markets with Germany, France and Italy recovering and the
U.S. market remaining under pressure. Insurance savings products
continued to suffer from weak demand against a backdrop of reduced
1
Solvency according to the E.U. Financial Conglomerates Directive. Off-balance sheet reserves are accepted
by the authorities as eligible capital only upon request. Allianz SE has not submitted an application so far.
Excluding off-balance sheet reserves, the solvency ratio as of 31 December 2013 would be 173 % (2012 (as
published): 188 %). The conglomerate solvency ratio decreased by approximately 16 percentage points as
of 1 January 2013 due to amendments to IAS 19.
2
3
Prior year figures have been restated to reflect the retrospective application of the amended standard
IAS 19 – Employee Benefits, effective as of 1 January 2013. For further information, please refer to note 4 to
the consolidated financial statements.
As of 1 January 2013, all restructuring charges are presented within operating profit and all prior year
figures have been adjusted to conform to the current accounting presentation.
66
Annual Report 2013
Allianz Group
C
Group Management Report
Management Discussion and Analysis
Business Environment
64
66 Executive Summary of 2013 Results
71
Property-Casualty Insurance Operations
78 Life/Health Insurance Operations
82 Asset Management
85 Corporate and Other
87 Outlook 2014
92 Balance Sheet Review
99 Liquidity and Funding Resources
104 Reconciliations
guarantees in the persistent low interest rate environment. By con-
trast, risk protection products fared better due to a rising awareness
of a protection gap.
For the asset management industry as a whole, 2013 was a favor-
able year, although there was continued uncertainty on capital mar-
kets with volatility remaining high. Following the tapering announce-
ment of the Federal Reserve, interest rates increased and thus
valuations for fixed income assets declined, while equities recorded
a strong performance. These developments adversely impacted fixed
income flows but continued to support favorable flows into equity
assets.
mAnAgement’s Assessment of 2013 results
We recorded growth in total revenues of 4.1 % – to € 110.8 bn – reaching
an all-time high, despite the challenges of operating in a persistently
low interest rate environment. On an internal basis 1, revenues
increased by 4.7 %. Our Life/Health and Asset Management business
segments generated strong revenue growth, while premiums in the
Property-Casualty business remained rather stable.
Our operating profit increased 7.8 % to € 10,066 mn. This was main-
ly due to the remarkable underwriting performance in our Property-
Casualty business segment despite a higher burden from natural
catastrophes. Our Asset Management business segment contributed
positively due to higher average assets under management and high-
er related margins. The operating result from the Corporate and
Other business segment improved, mainly due to a higher net fee and
commission result. However, our Life/Health business was impacted
by a lower investment result. Overall, our group performance devel-
oped favorably and we significantly exceeded our original operating
profit target of € 9.2 bn plus or minus € 0.5 bn.
Our net income increased 14.1 % to € 6,344 mn, driven by the strong
operating performance as well as a slightly improved non-operating
result. Net income attributable to shareholders and non-controlling
interests was € 5,996 mn (2012: € 5,231 mn) and € 348 mn (2012: € 327 mn),
respectively.
Our capitalization remained strong and shareholders’ equity
decreased slightly by € 0.3 bn to € 50.1 bn compared to 31 December
2012. Our conglomerate solvency ratio strengthened by one percentage
point, after reflecting the negative impact of a change in accounting
for pensions 2.
Total revenues 3
totAl revenues – Business segments
� mn
120,000
100,000
80,000
60,000
40,000
20,000
106,3831
590
6,786
52,347
+ 4.7 %
(6.6) %
+ 8.5 %
+ 9.1 %
110,7731
551
7,162
56,784
46,889
(0.3) %
46,579
2012
2013
Property-Casualty
Internal growth
Life/Health
Asset Management
Corporate and Other
1
Total revenues include € (303) mn (2012: € (229) mn) from consolidation.
Property-Casualty gross premiums written amounted to € 46.6 bn,
down 0.7 %. On an internal basis, gross premiums written decreased
by 0.3 %, reflecting the expected reduction in our U.S. crop business.
Excluding this reduction, our internal growth was positive at 2.5 %. We
experienced solid growth mainly in Latin America, Turkey, at Allianz
Global Assistance and in Germany.
Life/Health statutory premiums amounted to € 56.8 bn, an
increase of 9.1 % on an internal basis. Strong single premium increases
from unit-linked and savings products more than compensated for
the premium declines in selected markets where we were impacted
by regulatory changes or took further profitability and risk manage-
ment actions.
Asset Management operating revenues grew by 8.5 % on an inter-
nal basis. This was mainly driven by higher average assets under
management and higher related margins. Our performance fees
reached an impressive level of € 510 mn but remained € 256 mn below
the record level of € 766 mn in 2012. Once again our overall investment
performance was excellent. However, higher interest rates and vola-
tile capital markets led to third-party net outflows of € 12 bn.
Total revenues from our Banking operations (reported in our
Corporate and Other business segment) decreased by € 39 mn to
€ 551 mn, mainly as a result of a lower net interest result.
1
2
Internal total revenue growth excludes the effects of foreign currency translation as well as acquisitions
and disposals. Please refer to page 104 for a reconciliation of nominal total revenue growth to internal
total revenue growth for each of our segments and the Allianz Group as a whole.
Prior year figures have been restated to reflect the retrospective application of the amended standard
IAS 19 – Employee Benefits, effective as of 1 January 2013. For further information, please refer to note 4 to
the consolidated financial statements.
3
Total revenues comprise statutory gross premiums written in Property-Casualty and in Life/Health, oper-
ating revenues in Asset Management and total revenues in Corporate and Other (Banking).
Annual Report 2013
Allianz Group
67
Operating profit
Operating prOfit – BUSineSS SegmentS
� mn
12,000
10,000
8,000
6,000
4,000
2,000
0
9,3371
2,953
2,943
4,614
(1,114)
2012
+ 7.8 %
10,0661
3,161
2,709
5,268
(1,004)
2013
Property-Casualty
Life/Health
Asset Management
Corporate and Other
1
Total operating profit includes € (68) mn (2012: € (59) mn) from consolidation.
Our Property-Casualty operating profit went up by € 654 mn, or 14.2 %,
to € 5,268 mn. The underwriting result increased by € 728 mn to
€ 2,170 mn, largely driven by an improvement in our loss ratio. Reflect-
ing the low interest environment, however, our operating investment
income (net) decreased by € 181 mn to € 3,048 mn.
The Life/Health operating profit decreased by € 234 mn to
€ 2,709 mn, mainly as a result of the decline in the operating invest-
ment result, which was burdened by the net of adverse foreign
currency and financial derivatives impacts.
Asset Management recorded a strong operating profit of € 3,161 mn
– growth of 7.0 %. On an internal basis, operating profit grew by 10.1 %.
This was mainly driven by higher operating revenues and to a lesser
extent by lower restructuring charges compared to 2012. The cost-
income ratio improved by 0.6 percentage points to 55.9 %.
Non-operating result
Our non-operating result improved by € 196 mn to a loss of € 422 mn.
This was mainly due to lower amortization of intangible assets and
lower interest expenses from external debt.
Our non-operating investment result decreased from € 809 mn to
€ 663 mn. This was driven by a decline in our income from financial
assets and liabilities carried at fair value through income as well as
lower realizations, which was partly offset by lower impairments.
Non-operating income from financial assets and liabilities carried
at fair value through income (net) fell by € 186 mn to € 24 mn, as the
previous year’s figure benefited from the positive valuation effects of
The Hartford warrants, which were sold in April 2012.
Non-operating realized gains and losses (net) dropped from
€ 1,112 mn to € 952 mn. This was mainly due to lower realizations on
equities.
Non-operating impairments of investments (net) decreased by
€ 200 mn to € 313 mn in 2013. This was mainly due to lower equity
impairments, driven by favorable equity market developments. Lower
impairments on debt securities in 2013 further contributed to the
improvement.
Non-operating interest expenses from external debt declined by
€ 90 mn to € 901 mn due to the low interest rate environment. New issu-
ances have had lower funding costs compared to bonds that matured
or were redeemed.
Non-operating acquisition-related expenses improved by € 68 mn
to € 33 mn, mainly due to lower PImCO B-unit expenses.
Non-operating amortization of intangible assets was down by
€ 123 mn to € 136 mn, largely due to higher impairments in the previous
year. For further information, please refer to note 15 to the consoli-
dated financial statements.
Income taxes
Our operating result in Corporate and Other improved by
€ 110 mn to a loss of € 1,004 mn. An improvement in Holding & Treasury
was partly offset by a deterioration in Banking due to restructuring
charges, while the operating result in Alternative Investments
remained almost stable.
Income taxes rose by € 139 mn to € 3,300 mn, driven by a € 925 mn higher
income before income taxes in 2013 compared to 2012. The effective
tax rate improved by 2.1 percentage points to 34.2 % (2012: 36.3 %),
mainly due to lower tax charges from prior year taxes in 2013 com-
pared to 2012.
68
Annual Report 2013
Allianz Group
C
Group Management Report
Management Discussion and Analysis
Business Environment
64
66 Executive Summary of 2013 Results
71
Property-Casualty Insurance Operations
78 Life/Health Insurance Operations
82 Asset Management
85 Corporate and Other
87 Outlook 2014
92 Balance Sheet Review
99 Liquidity and Funding Resources
104 Reconciliations
Net income
totAl revenues And reconciliAtion of operAting profit (loss)
to net income (loss)
Net income increased by € 786 mn – from € 5,558 mn to € 6,344 mn – driv-
en by our strong operational performance, a lower effective tax rate
and an improved non-operating result. Net income attributable to
shareholders and non-controlling interests amounted to € 5,996 mn
(2012: € 5,231 mn) and € 348 mn (2012: € 327 mn), respectively. Our largest
non-controlling interests in net income related to Euler Hermes and
PImCO.
Basic earnings per share rose from € 11.56 to € 13.23 in 2013 and
diluted earnings per share increased from € 11.48 to € 13.05. For further
information on earnings per share, please refer to note 50 to the con-
solidated financial statements.
Proposal for appropriation of net earnings
The Board of Management and the Supervisory Board propose that
the net earnings (“Bilanzgewinn”) of Allianz SE of € 3,068,573,879.31 for
the 2013 fiscal year shall be appropriated as follows:
− Distribution of a dividend of € 5.30 per no-par share
entitled to a dividend: € 2,404,893,952.80
− Unappropriated earnings carried forward:
€ 663,679,926.51
The proposal for appropriation of net earnings reflects the 2,746,424
treasury shares held directly and indirectly by the Company at the
time of the publication of the convocation of the Annual General
Meeting in the Federal Gazette. Such treasury shares are not entitled
to the dividend pursuant to § 71b of the German Stock Corporation
Act (AktG) . Should there be any change in the number of shares
entitled to the dividend by the date of the Annual General Meeting,
the above proposal will be amended accordingly and presented for
resolution on the appropriation of net earnings at the Annual General
Meeting, with an unchanged dividend of € 5.30 per each share entitled
to dividend.
Munich, 24 February 2014
Allianz SE
€ mn
Total revenues 1
Premiums earned (net)
Operating investment result
Interest and similar income
Operating income from financial assets and liabilities
carried at fair value through income (net)
Operating realized gains/losses (net)
Interest expenses, excluding interest expenses from
external debt
Operating impairments of investments (net)
Investment expenses
Subtotal
Fee and commission income
Other income
2013
2012
110,773
106,383
66,628
66,045
20,918
21,084
(1,866)
3,333
(421)
(298)
(905)
20,761
10,492
209
(721)
3,215
(486)
(421)
(876)
21,795
9,812
214
Claims and insurance benefits incurred (net)
(47,802)
(48,873)
Change in reserves for insurance and investment
contracts (net) 2
Loan loss provisions
Acquisition and administrative expenses (net),
excluding acquisition-related expenses
Fee and commission expenses
Restructuring charges
Other expenses
Reclassification of tax benefits
Operating profit (loss)
Non-operating investment result
Non-operating income from financial assets and
liabilities carried at fair value through income (net)
Non-operating realized gains/losses (net)
Non-operating impairments of investments (net)
Subtotal
Income from fully consolidated private equity
investments (net)
Interest expenses from external debt
Acquisition-related expenses
Amortization of intangible assets
Reclassification of tax benefits
Non-operating items
Income (loss) before income taxes
Income taxes
Net income (loss)
Net income (loss) attributable to:
Non-controlling interests
Shareholders
(13,990)
(14,360)
(86)
(111)
(22,832)
(3,038)
(170)
(106)
–
10,066
(21,945)
(2,895)
(268)
(94)
17
9,337
24
952
(313)
663
(15)
(901)
(33)
(136)
–
(422)
210
1,112
(513)
809
(59)
(991)
(101)
(259)
(17)
(618)
9,644
(3,300)
6,344
8,719
(3,161)
5,558
348
5,996
327
5,231
1
2
Total revenues comprise statutory gross premiums written in Property-Casualty and in Life/Health, oper-
ating revenues in Asset Management and total revenues in Corporate and Other (Banking).
Includes expenses for premium refunds (net) in Property-Casualty of € (162) mn (2012: € (292) mn).
Annual Report 2013
Allianz Group
69
Other parts of the
Group Management Report
The following information also forms part of the Group Management
Report:
− Statement on Corporate Management pursuant to § 289a of the
HGb starting on
pagE 32,
− Takeover-related Statements and Explanations starting on
pagE 34 and the
− Remuneration Report starting on
pagE 37.
Events after the balance sheet date
AlliAnz issued A cHf 500 mn
undAted suBordinA ted Bond
In January 2014, Allianz SE issued a subordinated bond in the amount
of CHF 500 mn with no scheduled maturity, but with ordinary call
rights of Allianz beginning in July 2019. The coupon of 3.25 % p.a. is
fixed until July 2019.
Changes in segment structure,
presentation and accounting policies
In 2013, we experienced material changes in our presentation and
accounting policies due to the amendments to IAS 19 and the applica-
tion of IFRS 13, which came into effect on 1 January 2013. For further
information, please refer to note 4 to the consolidated financial state-
ments. In addition, all restructuring charges have been presented
within the operating profit effective 1 January 2013. For further infor-
mation, please refer to note 6 to the consolidated financial state-
ments. The applicable requirements of the German Accounting Stan-
dard 20 (“Deutscher Rechnungslegungs Standard – DRS”) are incorpo-
rated in the Group Management Report 2013.
In 2013, the reportable segment “Global Assistance” was renamed
“Allianz Worldwide Partners”. For further information, please refer to
Business Operations and Markets starting on
pagE 49.
There were no changes to the Board of Management in 2013. For
further information on the current composition of the Board of Man-
agement, please refer to
pagE 58.
70
Annual Report 2013
Allianz Group
C
Group Management Report
Management Discussion and Analysis
Business Environment
64
66 Executive Summary of 2013 Results
71
Property-Casualty Insurance Operations
78 Life/Health Insurance Operations
82 Asset Management
85 Corporate and Other
87 Outlook 2014
92 Balance Sheet Review
99 Liquidity and Funding Resources
104 Reconciliations
Property-Casualty Insurance Operations
− Gross premiums written at € 46.6 BN.
− Operating profit up 14.2 % to € 5,268 MN, driven by a strong underwriting result.
− Combined ratio at 94.3 %.
Business segment overview
Key figures
Our Property-Casualty business offers a wide range of products
and services for both private and corporate clients. Our offer-
ings cover many insurance classes such as motor, accident/dis-
ability, property and general liability. We conduct business
worldwide in more than 50 countries. We are also a global
leader in travel insurance, assistance services and credit insur-
ance. We distribute our products via a broad network of agents,
brokers, banks and other strategic partners, as well as through
direct channels.
key figures property-casualty
€ mn
Gross premiums written
Operating profit 1,2
Net income 1
Loss ratio in %
Expense ratio in %
Combined ratio 1 in %
2013
46,579
5,268
3,818
65.9
28.4
94.3
2012
46,889
4,614
3,505
68.3
27.9
96.2
Gross premiums written 3
On a nominal basis, we recorded gross premiums written of € 46,579 MN,
down € 310 MN or 0.7 %. Unfavorable foreign currency translation
effects were € 1,100 MN, largely due to the depreciation of the Austra-
lian Dollar, the Brazilian Real, the U.S. Dollar, and the British Pound
against the Euro.4 Consolidation/deconsolidation effects were posi-
tive and amounted to € 949 MN. These mainly stemmed from our
acquisitions of the activities of Gan Eurocourtage in France, Yapı
Kredi Sigorta in Turkey and Mensura in Belgium.
Adjusted for foreign currency translation and (de-)consolida-
tion effects, our gross premiums written decreased by 0.3 %. The
positive price effect of 0.8 % was more than offset by the negative vol-
ume effect of 1.1 %, mainly driven by the changed structure in our crop
business in the United States. Excluding the reduction in our U.S.
crop business, our internal growth was positive and amounted to
2.5 %. We experienced solid growth in Latin America, Turkey, at Allianz
Global Assistance and in Germany.
Analyzing internal premium growth in terms of price and volume,
we use four clusters based on 2013 internal growth over 2012:
Cluster 1:
Overall growth – both price and volume effects are positive.
Cluster 2:
Overall growth – either price or volume effects are positive.
Cluster 3:
Overall decline – either price or volume effects are negative.
Cluster 4:
Overall decline – both price and volume effects are negative.
1
2
Prior year figures have been restated to reflect the retrospective application of the amended standard
IAS 19 – Employee Benefits, effective as of 1 January 2013. For further information, please refer to note 4
to the consolidated financial statements.
As of 1 January 2013, all restructuring charges are presented within operating profit and all prior year
figures have been adjusted to conform to the current accounting presentation.
3
4
We comment on the development of our gross premiums written on an internal basis; meaning adjusted
for foreign currency translation and (de-)consolidation effects in order to provide more comparable
information.
Based on the average exchange rates in 2013 compared to 2012.
Annual Report 2013
Allianz Group
71
gross premiums written by region/country 1
Year 2013 [2012] in %
Asia-Pacific and Rest of World 8.1 [8.3]
USA and
Latin America 13.0 [16.3]
Other Europe 16.3 [14.9]
Spain 4.2 [4.2]
Switzerland 4.8 [4.6]
Germany 27.4 [26.1]
France 12.5 [12.0]
Italy 8.7 [8.6]
United Kingdom 5.0 [5.0]
1
After elimination of transactions between Allianz Group companies in different countries and different
reportable segments. Gross premiums written from our specialty lines have been allocated to the
respective geographic regions.
cluster 1
In Turkey gross premiums amounted to € 978 MN. Our strong internal
growth of 37.2 % was primarily driven by our motor business through
tied agents.
In Latin America we recorded gross premiums of € 2,350 MN, up
11.0 % on an internal basis. The main driver was Brazil with all lines of
business contributing to our growth.
In Allianz Global Assistance gross premiums increased to
€ 1,972 MN. Our internal growth of 10.0 % stemmed from higher vol-
umes mainly in our Brazilian, French, U.S., Spanish, and German
business, as well as price increases primarily in our Australian and
U.S. subsidiaries.
In Australia gross premiums grew to € 2,847 MN. The increase of
4.6 % on an internal basis benefited from new customers and higher
tariffs in our motor and property business.
In the United Kingdom we generated gross premiums of
€ 2,274 MN. On an internal basis, we expanded by 2.8 % with volume
growth mainly driven by our commercial motor line and tariff
increases across all commercial lines, in particular in our liability
and motor business.
In our Credit Insurance business, gross premiums increased to
€ 2,092 MN. The growth of 2.3 % on an internal basis stemmed from the
acquisition of new customers.
cluster 2
In Asia-Pacific we recorded gross premiums of € 667 MN. The 17.8 %
increase on an internal basis was mainly driven by the strong growth
in our Malaysian motor business. The overall price effect was slightly
negative.
In Central and Eastern Europe gross premiums stood at € 2,477 MN,
up 6.3 % on an internal basis. The growth was largely attributable to
higher volumes in our motor, personal accident and health business
in Russia, which outweighed a negative price effect.
In Germany gross premiums totaled € 9,261 MN. The internal
growth of 1.6 % was due to price increases mainly in motor, property
and liability lines. It was partly offset by negative volume effects, par-
ticularly in our accident and motor business.
In Switzerland gross premiums went up to € 1,489 MN. Our inter-
nal growth of 1.1 % was supported by higher volumes, mainly in our
motor and commercial property business. However, this was partly
offset by an overall negative price effect.
In France gross premiums amounted to € 4,174 MN – up 0.5 % on
an internal basis. This was driven by tariff increases across all lines
of business, which more than compensated for volume losses.
In Spain gross premiums rose to € 1,958 MN. Despite the difficult
market conditions we recorded internal growth of 0.3 %. We generated
higher volumes in our motor, property and liability lines, which offset
the effect of declining tariffs.
cluster 3
In the United States gross premiums decreased to € 2,058 MN. On an
internal basis, gross premiums dropped by 39.7 %, largely due to the
expected reduction in our crop business and, to a lesser extent,
declines in our commercial lines, which continue to be impacted by
our strict underwriting discipline. The overall price effect was positive.
In Italy gross premiums amounted to € 4,032 MN. The decrease of
0.3 % on an internal basis was largely attributable to falling prices,
mainly in our motor business. Although regulatory changes weighed
on volumes, they were supported by increases in our motor business
– particularly in our direct channel – resulting in a slightly positive
volume effect.
cluster 4
At AGCS gross premiums dropped to € 4,999 MN, down 4.7 % on an inter-
nal basis. This was mainly due to lower volumes in our property,
marine and Allianz Risk Transfer (ART) business. The overall price
effect was also slightly negative.
72
Annual Report 2013
Allianz Group
C
Group Management Report
Management Discussion and Analysis
Business Environment
64
66 Executive Summary of 2013 Results
71
Property-Casualty Insurance Operations
78 Life/Health Insurance Operations
82 Asset Management
85 Corporate and Other
87 Outlook 2014
92 Balance Sheet Review
99 Liquidity and Funding Resources
104 Reconciliations
Operating profit
operating profit
€ mn
Underwriting result
Operating investment income (net)
Other result 1
Operating profit
2013
2,170
3,048
50
5,268
2012
1,442
3,229
(57)
4,614
1
Consists of fee and commission income/expenses, other income/expenses and restructuring charges.
Operating profit amounted to € 5,268 MN, up € 654 MN and driven by a
strong underwriting result.
Our underwriting result grew by € 728 MN to € 2,170 MN. This
increase was largely due to an improvement in our accident year loss
ratio of 1.3 percentage points, supported by the continued positive
price momentum, and a more favorable run-off, despite higher
claims from natural catastrophes.
The combined ratio improved by 1.9 percentage points to 94.3 %.
The following operations contributed positively to the development
of our accident year loss ratio:
United States: 1.2 percentage points. This was largely driven by
the absence of the negative impacts of 2012 – the high natural catas-
trophe losses recorded from Storm Sandy and the severe drought in
the crop business.
Italy: 0.5 percentage points. This was mainly driven by the
recovered profitability in our non-motor business, particularly in our
general third-party liability line, and supported by lower claims fre-
quency and severity in our motor business. Additionally, the burden
from natural catastrophes in 2012, such as the earthquake in Emilia
Romagna, was above the 2013 level.
AGCS: 0.2 percentage points. The positive impact primarily
resulted from fewer large losses and a reduced burden from natural
catastrophe claims, despite higher attritional claims.
Credit Insurance: 0.2 percentage points. This was driven by
sound risk management that resulted in lower claims activity despite
increasing business volumes and still-high insolvency levels in Euro-
pean markets.
France: 0.1 percentage points. This was supported by a favorable
pricing environment, particularly in retail lines, as well as by a slightly
lower impact from large claims.
underwriting result
€ mn
Premiums earned (net)
Accident year claims
Previous year claims (run-off)
Claims and insurance benefits incurred (net)
Acquisition and administrative expenses (net)
Change in reserves for insurance and investment
contracts (net) (without expenses for premium
refunds) 1
Underwriting result
2013
42,047
(29,402)
1,689
(27,713)
(11,942)
2012
41,705
(29,698)
1,207
(28,491)
(11,634)
(222)
2,170
(138)
1,442
The following operations contributed negatively to the development
of our accident year loss ratio:
Germany: 0.9 percentage points. The negative impact was due
to higher losses from natural catastrophes. However, the attritional
claims ratio was lower than in 2012 due to a favorable price momen-
tum – particularly in our motor business.
Reinsurance: 0.2 percentage points. This was entirely driven by
higher losses from natural catastrophes. Adjusted for these, the
underlying loss ratio was lower than in 2012.
1
Consists of the underwriting-related part (aggregate policy reserves and other insurance reserves) of
“change in reserves for insurance and investment contracts (net)”. For further information, please refer
to note 34 to the consolidated financial statements.
Our accident year loss ratio stood at 69.9 %, down 1.3 percentage points
compared to the previous year. However, net losses from natural
catastrophes were up from € 715 MN to € 1,218 MN, increasing their
impact by 1.2 percentage points to 2.9 %. While 2012 was burdened
primarily by Storm Sandy, 2013 was severely impacted by floods in
Central and Eastern Europe and hailstorms in Germany.
Excluding natural catastrophes, our accident year loss ratio was
67.0 %, a 2.5 percentage point improvement on 2012. This was mainly
because of the continued positive price momentum and a favorable
development in claims frequency and severity.
Our run-off result grew by € 482 MN to € 1,689 MN, resulting in an
increase of 1.1 percentage points in the run-off ratio. This was partly
due to a more favorable previous year claims development, but pri-
marily attributable to the absence of some negative effects reported
in 2012. These included the additional reserve strengthening in the
United States and the increase in the estimated ultimate loss for the
2011 Thailand floods.
In 2013, total expenses stood at € 11,942 MN, compared to
€ 11,634 MN in the previous year. Our expense ratio increased slightly
by 0.5 percentage points to 28.4 %. This increase mainly reflects the
effects of structural changes in our portfolio in the United States
(reduced crop business), the negative impact from regulatory changes
on our business in Brazil (policy collection fee) and the acquisition
of the activities of Gan Eurocourtage in France.
Annual Report 2013
Allianz Group
73
operating investment income (net) 1
€ mn
Interest and similar income
(net of interest expenses)
Operating income from financial assets and
liabilities carried at fair value through income (net)
Operating realized gains/losses (net)
Operating impairments of investments (net)
Investment expenses
Expenses for premium refunds (net) 2
Operating investment income (net)
2013
2012
3,543
(76)
69
(11)
(315)
(162)
3,048
3,723
(46)
168
(17)
(307)
(292)
3,229
1
2
The operating investment income (net) for our Property-Casualty business segment consists of the
operating investment result – as shown in note 6 to the consolidated financial statements – and expenses
for premium refunds (net) (policyholder participation) as shown in note 34 to the consolidated financial
statements.
Refers to policyholder participation, mainly from UBR (accident insurance with premium refunds) busi-
ness, and consists of the investment-related part of “change in reserves for insurance and investment
contracts (net)”. For further information, please refer to note 34 to the consolidated financial
statements.
Operating investment income (net) amounted to € 3,048 MN, down by
€ 181 MN. This was mainly due to decreased interest and similar
income (net of interest expenses).
Interest and similar income (net of interest expenses) dropped by
€ 180 MN. This was driven by lower income on debt securities – mainly
due to lower yields. The average asset base 1 grew by 1.7 % from
€ 100.9 BN to € 102.6 BN.
Operating income from financial assets and liabilities carried at
fair value through income (net) fell by € 30 MN to a further loss of
€ 76 MN. The decline was mainly because of an unfavorable foreign
currency result.
Operating realized gains and losses (net) decreased by € 99 MN to
€ 69 MN as last year’s result benefited from gains related to portfolio
adjustments.
other result
€ mn
Fee and commission income
Other income
Fee and commission expenses
Other expenses
Restructuring charges
Other result
2013
1,226
47
2012
1,165
35
(1,141)
(1,088)
(21)
(61)
50
(23)
(146)
(57)
Net income
Net income increased by € 313 MN to € 3,818 MN, reflecting our better
operating performance and the effect of the slightly lower non-oper-
ating realized gains and losses (net).
property-casualty business segment information
€ mn
Gross premiums written 1
Ceded premiums written
Change in unearned premiums
Premiums earned (net)
Interest and similar income
Operating income from financial assets and
liabilities carried at fair value through income (net)
Operating realized gains/losses (net)
Fee and commission income
Other income
Operating revenues
2013
46,579
(3,982)
(550)
42,047
3,595
(76)
69
1,226
47
2012
46,889
(4,727)
(457)
41,705
3,770
(46)
168
1,165
35
46,908
46,797
Claims and insurance benefits incurred (net)
(27,713)
(28,491)
Change in reserves for insurance and investment
contracts (net)
Interest expenses
Operating impairments of investments (net)
Investment expenses
Acquisition and administrative expenses (net)
Fee and commission expenses
Restructuring charges
Other expenses
Operating expenses
(384)
(52)
(11)
(315)
(11,942)
(1,141)
(61)
(21)
(430)
(47)
(17)
(307)
(11,634)
(1,088)
(146)
(23)
(41,640)
(42,183)
Operating profit
5,268
4,614
Non-operating items
Income before income taxes
Income taxes
Net income
Loss ratio 2 in %
Expense ratio 3 in %
Combined ratio 4 in %
296
5,564
(1,746)
3,818
65.9
28.4
94.3
328
4,942
(1,437)
3,505
68.3
27.9
96.2
1
2
3
4
For the Property-Casualty business segment, total revenues are measured based upon gross premiums
written.
Represents claims and insurance benefits incurred (net) divided by premiums earned (net).
Represents acquisition and administrative expenses (net) divided by premiums earned (net).
Represents the total of acquisition and administrative expenses (net) and claims and insurance benefits
incurred (net) divided by premiums earned (net).
1
Including the French health business, excluding fair value option and trading.
74
Annual Report 2013
Allianz Group
C
Group Management Report
Management Discussion and Analysis
Business Environment
64
66 Executive Summary of 2013 Results
71
Property-Casualty Insurance Operations
78 Life/Health Insurance Operations
82 Asset Management
85 Corporate and Other
87 Outlook 2014
92 Balance Sheet Review
99 Liquidity and Funding Resources
104 Reconciliations
Annual Report 2013
Allianz Group
75
Property-Casualty insurance operations by reportable segments
ProPerty-Casualty insuranCe oPerations by rePortable segments
€ mn
Gross premiums written
Premiums earned (net)
Operating profit (loss)
internal 1
Germany 2
Switzerland
Austria
German Speaking Countries 3
Italy
France 4
The Netherlands
Turkey 5
Belgium 6
Greece
Africa
Western & Southern Europe 7
Latin America
Spain
Portugal
Iberia & Latin America
United States
USA 8
Allianz Global Corporate & Specialty
Reinsurance PC 2
Australia
United Kingdom
Credit Insurance
Ireland
Global Insurance Lines & Anglo Markets 9
Russia
Poland
Hungary
Slovakia
Czech Republic
Romania
Bulgaria
Croatia
Ukraine
Central and Eastern Europe 10
Asia-Pacific
Middle East and North Africa
Growth Markets
Allianz Global Assistance
Allianz Worldwide Care
Allianz Worldwide Partners 11
Consolidation and Other 12
Total
2013
9,261
1,489
966
11,748
4,032
4,174
700
978
465
111
87
10,547
2,350
1,958
312
4,620
2,058
2,058
4,999
3,345
2,847
2,274
2,092
412
15,969
808
427
268
321
276
186
82
93
16
2,477
667
67
3,211
1,972
452
2,507
2012
9,158
1,501
938
11,630
4,045
3,538
714
611
397
108
83
9,496
2,389
1,953
317
4,659
3,550
3,550
5,314
3,460
3,018
2,318
2,034
433
16,577
678
421
307
336
280
181
90
90
13
2,393
596
68
3,057
1,800
384
2,186
2013
9,261
1,518
966
11,777
4,032
3,557
700
838
374
111
87
9,699
2,651
1,958
312
4,921
2,141
2,141
5,063
3,305
3,158
2,382
2,043
412
16,363
857
428
274
321
285
185
82
94
17
2,544
702
73
3,319
1,980
452
2,515
2012
9,115
1,501
938
11,587
4,045
3,538
705
611
364
108
83
9,454
2,388
1,953
317
4,658
3,550
3,550
5,314
3,460
3,018
2,318
1,998
433
16,541
678
421
307
336
280
181
90
90
13
2,393
596
68
3,057
1,800
384
2,230
2013
7,611
1,422
814
9,861
3,950
3,804
659
753
427
87
55
9,735
1,737
1,804
269
3,810
1,988
1,988
2,926
2,880
2,235
2,122
1,435
372
11,970
598
345
230
266
228
150
63
77
7
1,964
377
46
2,387
1,842
419
2,296
2012
7,421
1,450
788
9,674
3,893
3,200
684
412
355
90
49
8,683
1,607
1,810
265
3,682
2,654
2,654
3,299
3,124
2,235
2,165
1,344
397
12,564
603
355
233
273
225
143
66
75
7
1,980
320
48
2,348
1,745
355
2,100
2013
661
194
62
916
1,126
401
27
69
50
17
11
1,712
133
236
26
395
154
154
427
317
378
201
407
62
1,785
(38)
12
27
53
44
5
19
13
–
127
67
8
202
96
30
102
2012
828
192
76
1,102
881
411
15
34
62
19
9
1,447
126
239
38
403
(546)
(546)
415
357
394
215
409
69
1,854
–
14
27
70
32
–
17
15
3
171
56
5
232
99
24
122
(4,081)
46,579
(4,266)
46,889
(4,041)
46,694
(4,224)
46,853
–
42,047
–
41,705
2
5,268
–
4,614
1
2
3
This reflects gross premiums written on an internal basis, adjusted for foreign currency translation and
(de-)consolidation effects.
The combined ratio 2013 at Germany and Reinsurance PC was impacted by a one-off effect related to the
commutation of internal reinsurance resulting in a 0.9 percentage point improvement in the combined
ratio for Germany and an increase of 2.3 percentage points in Reinsurance PC. This had no impact at Group
level.
Includes “Münchener und Magdeburger Agrarversicherung AG” with gross premiums written of € 32 mn,
premiums earned (net) of € 14 mn and operating loss of € 1 mn for 2013, and gross premiums written of
€ 33 mn, premiums earned (net) of € 15 mn and operating profit of € 6 mn for 2012.
4
5
6
7
Effective as of 1 October 2012, Allianz France acquired the property-casualty brokerage portfolio-related
activities (excluding transport) of Gan Eurocourtage.
On 12 July 2013, Allianz Turkey acquired Yapı Kredi Bank’s shareholding in the Turkish property-casualty
insurance company Yapı Kredi Sigorta.
Effective as of 1 August 2012, Allianz Belgium acquired the assets and assumed the liabilities related to the
insurance activities of Mensura.
Contains € 11 mn and € 16 mn operating profit for 2013 and 2012, respectively, from a management holding
located in Luxembourg.
76
Annual Report 2013
Allianz Group
C
Group Management Report
Management Discussion and Analysis
Business Environment
64
66 Executive Summary of 2013 Results
71
Property-Casualty Insurance Operations
78 Life/Health Insurance Operations
82 Asset Management
85 Corporate and Other
87 Outlook 2014
92 Balance Sheet Review
99 Liquidity and Funding Resources
104 Reconciliations
%
Germany 2
Switzerland
Austria
German Speaking Countries 3
Italy
France 4
The Netherlands
Turkey 5
Belgium 6
Greece
Africa
Western & Southern Europe 7
Latin America
Spain
Portugal
Iberia & Latin America
United States
USA 8
Allianz Global Corporate & Specialty
Reinsurance PC 2
Australia
United Kingdom
Credit Insurance
Ireland
Global Insurance Lines & Anglo Markets 9
Russia
Poland
Hungary
Slovakia
Czech Republic
Romania
Bulgaria
Croatia
Ukraine
Central and Eastern Europe 10
Asia-Pacific
Middle East and North Africa
Growth Markets
Allianz Global Assistance
Allianz Worldwide Care
Allianz Worldwide Partners 11
Consolidation and Other 12
Total
Combined ratio
Loss ratio
Expense ratio
2013
99.5
91.1
96.5
98.0
78.2
97.6
99.8
96.1
94.0
83.9
95.7
89.4
98.3
90.9
95.0
94.6
103.6
103.6
95.0
92.8
93.5
96.0
79.3
90.1
92.5
112.0
100.9
100.4
86.2
84.5
102.9
72.1
89.3
124.8
99.5
91.2
95.6
98.2
96.1
93.3
96.7
–
94.3
2012
96.8
92.4
96.1
96.0
85.0
96.9
103.1
98.3
93.9
82.4
94.7
91.8
98.4
91.0
92.0
94.3
129.4
129.4
96.2
92.7
95.2
95.6
79.7
91.0
93.2
103.2
100.5
101.3
81.4
90.5
105.8
75.9
88.0
85.2
96.9
91.3
105.1
96.3
95.3
93.8
95.1
–
96.2
2013
73.4
67.9
70.5
72.3
53.1
68.9
70.2
71.4
65.4
50.1
52.1
62.3
66.4
70.0
72.6
68.6
69.2
69.2
67.3
61.2
68.1
64.5
50.4
59.2
63.3
69.7
65.8
60.0
54.8
56.6
72.6
44.8
50.1
59.9
62.9
60.1
61.5
62.5
61.0
73.5
63.5
–
65.9
2012
69.2
68.9
71.4
69.3
60.3
69.1
74.7
71.5
62.0
37.7
48.9
64.9
67.4
70.1
68.5
68.8
101.1
101.1
68.7
65.5
68.7
64.3
51.9
61.0
65.2
61.1
66.9
60.4
51.4
63.7
77.7
47.4
50.6
33.5
61.3
59.7
70.1
61.3
59.6
74.5
62.1
–
68.3
2013
26.1
23.2
26.0
25.7
25.1
28.7
29.6
24.7
28.6
33.8
43.6
27.1
31.9
20.9
22.4
26.0
34.4
34.4
27.7
31.6
25.4
31.5
28.9
30.9
29.2
42.3
35.1
40.4
31.4
27.9
30.3
27.3
39.2
64.9
36.6
31.1
34.1
35.7
35.1
19.8
33.2
–
28.4
2012
27.6
23.5
24.7
26.7
24.7
27.8
28.4
26.8
31.9
44.7
45.8
26.9
31.0
20.9
23.5
25.5
28.3
28.3
27.5
27.2
26.5
31.3
27.8
30.0
28.0
42.1
33.6
40.9
30.0
26.8
28.1
28.5
37.4
51.7
35.6
31.6
35.0
35.0
35.7
19.3
33.0
–
27.9
8
9
10
11
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.
Contains € 7 mn and € 5 mn operating loss for 2013 and 2012, respectively, from AGF UK.
Contains income and expense items from a management holding and consolidations between countries
in this region.
The business division Allianz Worldwide Partners includes the legal entities of Allianz Global Assistance
and Allianz Worldwide Care as well as the reinsurance business of Allianz Global Automotive and income
and expenses of a management holding. The set-up of this division will be further enhanced during the
following quarters. The reinsurance business of Allianz Global Automotive contributed with gross premi-
ums written of € 83 mn, premiums earned (net) of € 35 mn and an operating loss of € 24 mn for 2013 and
with gross premiums written of € 2 mn, premiums earned (net) of € 0.3 mn and an operating loss of € 1 mn
for 2012. The operating profit of Allianz Worldwide Partners includes Global Automotive central costs.
Operating profit slightly up on an underlying basis.
Represents elimination of transactions between Allianz Group companies in different geographic
regions.
12
Annual Report 2013
Allianz Group
77
Life/Health Insurance Operations
− Statutory premiums rebounded 8.5 % to € 56.8 bn.
− Operating profit solid at € 2,709 mn, but impacted by a lower investment result.
Business segment overview
Key figures
Allianz offers a broad range of life, health, savings and invest-
ment-oriented products, including individual and group life
insurance contracts. Via our distribution channels – mainly tied
agents, brokers and bank partnerships – we offer life and health
products to both private and corporate clients. As one of the
worldwide market leaders in life business we serve customers
in more than 45 countries.
Key figures life/health
€ mn
Statutory premiums
Operating profit 1, 2
Net income 1
Margin on reserves (bps) 3
2013
56,784
2,709
1,941
58
2012
52,347
2,943
2,034
67
Statutory premiums 4, 5
In 2013, statutory premiums amounted to € 56,784 mn, an increase of
€ 4,437 mn. Excluding unfavorable foreign currency translation effects
of € 562 mn and consolidation/deconsolidation effects largely from
our acquisition of the activities of Yapı Kredi in Turkey, premiums
increased by 9.1 % – or € 4,741 mn – on an internal basis 5.
We saw mixed premium growth reflecting our overall product
strategy with double-digit growth in several markets – where we
achieved strong growth in targeted segments – and double-digit
declines in other markets, where we reduced business for profitability
reasons or regulatory changes.
The growth in premiums was predominantly driven by strong
single premium unit-linked product sales in Italy and Taiwan. It was
supported by an increase in single premium business with savings
products including traditional endowment and annuity products in
Germany. This was partly offset by sizeable declines in South Korea
and Switzerland where profitability and risk management actions
limited volumes, and in Poland due to regulatory changes.
Overall, we recorded a higher proportion of single premiums
over recurring premium business compared to 2012.
statutory premiums by region/country 1
Year 2013 [2012] in %
Asia-Pacific and
Rest of World 9.3 [10.3]
USA and Latin America
13.4 [14.4]
Other Europe 11.0 [9.2]
Belgium 1.7 [1.7]
Spain 2.2 [2.0]
Switzerland 2.8 [3.6]
Germany 36.1 [35.7]
France 13.1 [13.4]
Italy 10.4 [9.7]
1
After elimination of transactions between Allianz Group companies in different countries and different
reportable segments.
1
2
3
Prior year figures have been restated to reflect the retrospective application of the amended standard
IAS 19 – Employee Benefits, effective as of 1 January 2013. For further information, please refer to note 4
to the consolidated financial statements.
As of 1 January 2013, all restructuring charges are presented within operating profit and all prior year
figures have been adjusted to conform to the current accounting presentation.
Represents operating profit divided by the average of the current and previous year-end net reserves,
where net reserves equal reserves for loss and loss adjustment expenses, reserves for insurance and
investment contracts and financial liabilities for unit-linked contracts less reinsurance assets.
4
5
Statutory premiums are gross premiums written from sales of life and health insurance policies as well
as gross receipts from sales of unit-linked and other investment-oriented products, in accordance with
the statutory accounting practices applicable in the insurer’s home jurisdiction.
In the following section, we comment on the development of our statutory gross premiums written on
an internal basis, i.e. adjusted for foreign currency translation and (de-)consolidation effects in order to
provide more comparable information.
78
Annual Report 2013
Allianz Group
C
Group Management Report
Management Discussion and Analysis
Business Environment
64
66 Executive Summary of 2013 Results
71
Property-Casualty Insurance Operations
78 Life/Health Insurance Operations
82 Asset Management
85 Corporate and Other
87 Outlook 2014
92 Balance Sheet Review
99 Liquidity and Funding Resources
104 Reconciliations
Premiums in Italy increased 32.5 % to € 8,430 mn. Sustained by a favor-
able market environment, this remarkable growth was driven by our
financial advisors and bancassurance channel, with a continued
focus on unit-linked products in order to reduce our risk capital con-
sumption. The continued strong growth of unit-linked premiums
was largely due to a successful product launch via our financial advi-
sors channel in late 2012 as well as a recovery of the bancassurance
sales channel from the low level in 2012.
In Latin America, premiums were up 31.0 % to € 329 mn. This
growth was driven by Mexico, where we recorded increased premiums
from a large annuity contract and higher sales of investment-oriented
products with single premiums. In Colombia, premiums decreased
as several large contracts were not renewed.
Premiums in Spain increased 14.0 % to € 1,225 mn. This was main-
ly driven by strong sales of investment-oriented and unit-linked
products distributed through the bancassurance and agent channels.
Increased premiums in the traditional business also contributed to
this growth.
In our German life business, premiums grew 12.0 % to € 17,000 mn.
This growth was largely driven by a strong increase in single premi-
um business with savings products including traditional endowment
and annuity products, while our business with recurring premiums
was stable. Premiums in our German health business remained
broadly unchanged at € 3,264 mn. The strong business in supplemen-
tary coverage compensated for decreased business in full health care
coverage.
In France, we recorded a premium increase of 6.7 % to € 8,511 mn.
This growth was largely driven by our employee benefit products,
individual health business and the strong performance of the part-
nerships business in individual life. France experienced a beneficial
shift of its traditional life business towards unit-linked products.
In Asia-Pacific, we recorded premiums of € 5,092 mn. The growth
of 3.9 % was largely driven by the increase in unit-linked premiums in
Taiwan through the bancassurance channel. This more than com-
pensated for the decrease of single premium investment-oriented
business in South Korea, where we stopped selling one of our major
products in the third quarter of 2012.
Premiums in the United States increased to € 7,317 mn, represent-
ing growth of 3.9 %. This was primarily driven by stronger fixed-
indexed annuity sales, where we gained positive momentum partially
as a result of distribution and product promotions starting in the
third quarter of 2013. This was partly offset by a decline in the variable
annuity business. Both business lines were impacted by product
changes in reaction to low interest rates in mid-2012 that initially
resulted in a considerable drop in sales.
In Belgium/Luxembourg, we recorded premiums of € 2,049 mn,
an improvement of 1.5 %, after very strong growth in the previous year.
This improvement was supported by our bancassurance partnership
in Belgium.
In Switzerland, premiums totaled € 1,602 mn. The decrease of
14.1 % was largely the result of lower single premiums in our group life
business where we have maintained a more selective growth focus.
While recurring premiums in our group life business remained rela-
tively stable, recurring premiums in our individual life business
increased slightly.
Premiums in Central and Eastern Europe declined to € 913 mn,
representing a drop of 21.0 %. This largely relates to Poland where
regulatory changes led to a significant decrease in deposit business.
In Hungary, the increase in single premium unit-linked products as
a result of a sales campaign partly offset this decline.
Operating profit
Operating profit decreased by € 234 mn to € 2,709 mn, mainly as a result
of the € 899 mn decline in the operating investment result, which
was burdened by the net of adverse foreign currency and financial
derivatives impacts. However, this decline was partly offset by lower
allocations to policy reserves.
Interest and similar income (net of interest expenses) decreased
by € 63 mn to € 16,685 mn. We recorded lower interest income from
debt securities, mainly due to the low interest rate environment,
derisking activities and as a result of foreign currency translation
effects of our business in the United States. This decrease was largely
compensated for by higher income from dividends and real estate.
Operating income from financial assets and liabilities carried at
fair value through income (net) decreased by € 1,102 mn to a loss of
€ 1,829 mn. This was mainly due to losses from the net of foreign cur-
rency effects and financial derivatives in Germany. The appreciation
of the Euro against selective emerging markets currencies and the
rise in interest rates were the main drivers. Derivatives are used to
manage duration and other interest rate-related exposures as well as
to protect against equity and foreign currency fluctuations.
Operating realized gains and losses (net) amounted to € 3,293 mn.
The increase of € 249 mn was driven by higher realized gains on debt
securities and equities.
Operating impairments of investments (net) decreased from
€ 428 mn in 2012 to € 331 mn. This represents an improvement of
€ 97 mn as the previous year was burdened by higher equity impair-
ments, mainly on our investments in financial sector assets.
Claims and insurance benefits incurred (net) amounted to
€ 20,096 mn, a decrease of € 290 mn. This was mainly due to lower pay-
ments for maturities in Germany and was partly offset by higher
maturities in France and Thailand.
Changes in reserves for insurance and investment contracts (net)
decreased by € 415 mn to € 13,556 mn. This was largely driven by a
lower change in reserves for deferred premium refunds due to the
negative revaluation impact of decreased investment income in Ger-
many and the more favorable impact from the change in annuitization
Annual Report 2013
Allianz Group
79
and guaranteed benefit reserves in the United States. This was partly
offset by a higher increase in aggregate policy reserves in Germany
due to higher premiums, premium refunds due to the favorable
development of financial income in France and the set-up of a pre-
mium deficiency reserve in South Korea.
Investment expenses went up by € 80 mn to € 839 mn, mainly fol-
lowing slightly higher management fees for direct and equity invest-
ments.
Acquisition and administrative expenses (net) amounted to
€ 5,603 mn, an increase of € 287 mn. This was mainly driven by higher
amortization of deferred acquisition costs.
life/health business segment information
€ mn
Statutory premiums 1
Ceded premiums written
Change in unearned premiums
Statutory premiums (net)
Deposits from insurance and investment contracts
Premiums earned (net)
Interest and similar income
Operating income from financial assets and
liabilities carried at fair value through income (net)
Margin on reserves decreased from 67 to 58 basis points, driven
Operating realized gains/losses (net)
by the direct and indirect effects of continued market volatility.
Fee and commission income
Other income
Operating revenues
2013
56,784
(648)
(332)
55,804
(31,223)
24,581
16,766
(1,829)
3,293
646
157
2012
52,347
(693)
(248)
51,406
(27,013)
24,393
16,832
(727)
3,044
534
154
43,614
44,230
Claims and insurance benefits incurred (net)
(20,096)
(20,386)
Changes in reserves for insurance and
investment contracts (net)
Interest expenses
Operating impairments of investments (net)
Investment expenses
Acquisition and administrative expenses (net)
Fee and commission expenses
Restructuring charges
Other expenses
Operating expenses
(13,556)
(13,971)
(81)
(331)
(839)
(5,603)
(251)
(50)
(98)
(84)
(428)
(759)
(5,316)
(228)
(27)
(88)
(40,905)
(41,287)
Operating profit
2,709
2,943
Non-operating items
Income before income taxes
Income taxes
Net income
84
2,793
(852)
1,941
92
3,035
(1,001)
2,034
Margin on reserves 2 in basis points
58
67
1
2
Statutory premiums are gross premiums written from sales of life and health insurance policies as well
as gross receipts from sales of unit-linked and other investment-oriented products, in accordance with
the statutory accounting practices applicable in the insurer’s home jurisdiction.
Represents operating profit divided by the average of the current and previous year-end net reserves,
where net reserves equal reserves for loss and loss adjustment expenses, reserves for insurance and invest-
ment contracts and financial liabilities for unit-linked contracts less reinsurance assets.
Overall, reserve-driven fees were moderately higher, while the
decrease in our operating profit was largely driven by the investment
margin drop (i.e. investment income net of hedged item movements
and policyholder participation) in several locations. This margin was
lower in Germany as a result of hedging and foreign currency related
losses as well as higher reserve allocations. The establishment of a
premium deficiency reserve in South Korea as well as lower fair value
results related to annuity and guaranteed benefit features and lower
realized gains in the United States increased this negative impact.
However, in part due to these investment margin effects, the United
States recorded lower amortization of deferred acquisition costs,
which partly compensated for the adverse investment margin
impact; partly offsetting this effect was a deferred acquisition cost
write-down in South Korea.
Net income
Net income decreased by € 93 mn to € 1,941 mn, consistent with our
operating performance, while a slightly improved effective tax rate
contributed positively.
80
Annual Report 2013
Allianz Group
C
Group Management Report
Management Discussion and Analysis
Business Environment
64
66 Executive Summary of 2013 Results
71
Property-Casualty Insurance Operations
78 Life/Health Insurance Operations
82 Asset Management
85 Corporate and Other
87 Outlook 2014
92 Balance Sheet Review
99 Liquidity and Funding Resources
104 Reconciliations
Life/Health insurance operations by reportable segments
Life/HeaLtH insurance operations by reportabLe segments
€ mn
Germany Life
Germany Health
Switzerland
Austria
German Speaking Countries
Italy
France
Belgium/Luxembourg
The Netherlands
Greece
Turkey 4
Africa
Western & Southern Europe
Latin America
Spain
Portugal
Iberia & Latin America
United States
USA
Reinsurance LH
Global Insurance Lines & Anglo Markets
South Korea
Taiwan
Indonesia
Malaysia
Japan
Other
Asia-Pacific
Poland
Slovakia
Hungary
Czech Republic
Russia
Croatia
Bulgaria
Romania
Central and Eastern Europe 5
Middle East and North Africa
Global Life
Growth Markets
Consolidation 7
Total
Statutory premiums 1
Premiums earned (net) Operating profit (loss)
internal 3
2013
2012
2013
2012
2013
2012
17,000
3,264
1,602
385
22,251
8,430
8,511
2,049
277
90
419
54
19,830
329
1,225
232
1,786
7,317
7,317
515
515
1,354
1,745
686
381
–
926
5,092
127
245
165
172
84
62
35
23
913
163
6
6,174
15,179
3,269
1,903
407
20,758
6,364
7,977
2,019
276
95
114
52
16,897
255
1,075
190
1,520
7,289
7,289
484
484
1,871
1,352
760
330
1
789
5,103
411
244
147
171
94
55
31
23
1,176
170
4
6,453
17,000
3,264
1,634
385
22,283
8,430
8,511
2,049
277
90
184
54
19,595
334
1,225
232
1,791
7,571
7,571
515
515
1,357
1,810
789
403
–
945
5,304
127
245
168
178
90
63
35
23
929
185
6
6,424
15,179
3,269
1,903
407
20,758
6,364
7,977
2,019
276
95
114
52
16,897
255
1,075
190
1,520
7,289
7,289
484
484
1,871
1,352
760
330
1
789
5,103
411
244
147
171
94
55
31
23
1,176
170
4
6,453
11,538
3,264
488
282
15,572
483
3,401
400
140
53
81
25
4,583
145
457
83
685
883
883
430
430
494
152
247
200
6
636
1,735
40
209
46
77
83
61
30
14
560
131
2
2,428
11,282
3,268
686
288
15,524
543
3,056
416
135
57
37
24
4,268
123
495
86
704
848
848
425
425
580
129
305
211
5
622
1,852
125
206
53
66
90
52
27
13
632
139
1
2,624
(1,089)
56,784
(1,054)
52,347
(1,091)
57,088
(1,054)
52,347
–
24,581
–
24,393
2013
862
201
78
33
1,174
2012
1,026
197
79
31
1,333
216
421
61
28
2
3
4
735
9
128
21
158
487
487
23
23
(129)
–
60
18
7
80
36
16
29
9
17
–
4
4
1
78
17
–
131
1
2,709
237
353
64
58
5
5
5
727
11
107
5
123
457
457
47
47
31
9
54
17
3
49
163
17
32
4
20
(3)
3
7
1
79
15
(1)
256
–
2,943
Margin on reserves 2
(bps)
2013
2012
48
80
60
77
53
45
56
59
66
65
25
185
53
109
196
403
201
70
70
111
111
(130)
–
505
167
39
230
16
270
243
244
303
–
132
302
221
228
304
–6
49
–6
58
61
83
62
78
64
54
50
69
144
158
110
238
57
158
177
111
171
69
69
208
208
33
18
454
174
13
140
73
298
267
115
377
(185)
125
541
213
247
300
–6
99
–6
67
1
2
3
Statutory premiums are gross premiums written from sales of life and health insurance policies, as well as
gross receipts from sales of unit-linked and other investment-oriented products, in accordance with the
statutory accounting practices applicable in the insurer’s home jurisdiction.
Represents operating profit (loss) divided by the average of the current and previous year-end net reserves,
where net reserves equal reserves for loss and loss adjustment expenses, reserves for insurance and invest-
ment contracts and financial liabilities for unit-linked contracts less reinsurance assets.
Statutory premiums adjusted for foreign currency translation and (de-)consolidation effects.
4
5
6
7
On 12 July 2013, Allianz acquired Yapı Kredi Bank’s 93.94 % shareholding in the Turkish property-casualty insur-
ance company Yapı Kredi Sigorta, including its life and pension insurance subsidiary Yapı Kredi Emeklilik.
Contains income and expense items from a management holding and consolidations between countries
in this region.
Presentation not meaningful.
Represents elimination of transactions between Allianz Group companies in different geographic regions.
Annual Report 2013
Allianz Group
81
Asset Management
− Strong operating profit of € 3.2 bn.
− Cost-income ratio improved to 55.9 %.
− Third-party net outflows of € 12 bn in 2013.
− Total assets under management at € 1,770 bn.
Business segment overview
Key figures
Allianz offers Asset Management products and services for
third-party investors and the Allianz Group’s insurance opera-
tions. We serve a wide range of retail and institutional clients
worldwide with investment and distribution capacities in all
major markets. Based on total assets under management, we
are one of the largest asset managers in the world that manages
third-party assets with active investment strategies.
key figures asset management
€ mn
Operating revenues
Operating profit 1,2
Cost-income ratio 1,2 in %
Net income 1
Total assets under manage ment
as of 31 December in € bn
thereof: Third-party assets under manage ment
as of 31 December in € bn
2013
7,162
3,161
55.9
1,925
1,770
1,361
2012
6,786
2,953
56.5
1,810
1,852
1,438
Assets under management
Development of total assets unDer management
€ bn
Total AuM
(as of 12/31/2012)
Net flows
Market effects
Consolidation, deconsoli-
dation and other effects
F/X effects
Total AuM
(as of 12/31/2013)
1,681
1,571
169
2
1,852
(14)
1
(1)
(68)
197
2
1,770
0
500
1,000
1,500
2,000
Fixed income
Equities
Other
Changes
1
Prior year figures have been restated to reflect the retrospective application of the amended standard
IAS 19 – Employee Benefits, effective as of 1 January 2013. For further information, please refer to note 4
to the consolidated financial statements.
2
As of 1 January 2013, all restructuring charges are presented within operating profit and all prior year
figures have been adjusted to conform to the current accounting presentation.
82
Annual Report 2013
Allianz Group
C
Group Management Report
Management Discussion and Analysis
Business Environment
64
66 Executive Summary of 2013 Results
71
Property-Casualty Insurance Operations
78 Life/Health Insurance Operations
82 Asset Management
85 Corporate and Other
87 Outlook 2014
92 Balance Sheet Review
99 Liquidity and Funding Resources
104 Reconciliations
As of 31 December 2013, total assets under management amounted
to € 1,770 bn. Of this, € 1,361 bn related to our third-party assets under
management and € 409 bn to Allianz group assets. We show the devel-
opment of total assets under management based on asset classes as
they are relevant for the business segment’s devel opment.
In 2013, we recorded net outflows of total assets under manage-
ment of € 14 bn. Of these, € 12 bn were related to third-party assets
under management and € 2 bn to Allianz group assets. In the second
half of 2013 the rise in interest rates, especially in the United States,
led to a decline in valuations for fixed income assets, while equities
globally recorded a strong performance. These developments and the
respective volatile global bond markets resulted in fixed income net
outflows especially in the second half of 2013, which more than offset
the strong fixed income net inflows in the first half of the year. Overall,
net outflows stemmed from the United States and related to tradi-
tional fixed income products, while our non-traditional fixed income
products and equities recorded net inflows in 2013.
The major driver behind the development of total assets under
management was unfavorable foreign currency translation effects of
€ 68 bn due to the strong depreciation of the U.S. Dollar against the
Euro.1
Favorable market effects accounted for an increase of € 1bn in
total assets under management. This was entirely driven by a strong
positive market return of € 27 bn on equities and was mostly offset by
a negative impact of € 26 bn on fixed income.
In the following section, we focus on the development of third-party
assets under management.
thirD-party assets unDer management by business unit
as of 31 December 2013 [31 December 2012] in %
Other 2.3 [2.0]
AllianzGI 15.8 [12.4]
PIMCO 81.9 [85.6]
thirD-party assets unDer management by region/country 1,2,3
as of 31 December 2013 [31 December 2012] in %
Other 2.3 [2.0]
Asia-Pacific 9.8 [10.4]
Europe 26.4 [23.0]
America 61.5 [64.6]
1
2
3
Based on the location of the asset management company.
“America” consists of the United States, Canada and Brazil (approximately € 823 bn, € 11 bn and € 3 bn
third-party assets under management as of 31 December 2013, respectively).
“Other” consists of third-party assets managed by other Allianz Group companies (approximately € 32 bn
as of 31 December 2013 and € 28 bn as of 31 December 2012, respectively).
The regional allocation of third-party assets under management
shifted slightly. Europe’s share rose by 3.4 percentage points, mainly
due to a reallocation of some third-party assets under management
from the United States to Europe and a positive market return driven
by equities. America’s share decreased by 3.1 percentage points, due
to the strong depreciation of the U.S. Dollar against the Euro, net out-
flows, the negative market return on fixed income assets and the real-
location of assets.
Mainly due to the impact of market return, the share of equities
in our third-party assets under management increased by two per-
centage points in favor of equities, compared to 31 December 2012
with 87 % attributable to fixed income and 13 % to equities.
The split of third-party assets under management between our
retail and institutional clients 2 shifted slightly – up one percentage
point for retail clients (37 %) and down one percentage point for insti-
tutional clients (63 %).
1
Based on the closing rate on the respective balance sheet date.
2
Client group classification is driven by investment vehicle types.
Annual Report 2013
Allianz Group
83
three-year rolling investment performance of pimco anD allianzgi 1
Operating profit
PIMCO
AllianzGI
93
96
90
(7)
(4)
(10)
(39)
(38)
(45)
61
62
55
generally in line with our business growth.
%
100
80
60
40
20
0
(20)
(40)
Driven by higher operating revenues, our operating profit went up to
€ 3,161 Mn, an increase of € 208 Mn or 7.0 %. Excluding the unfavorable
impact of foreign currency translation effects 2 our operating profit
rose by approximately 10.0 %. This result was mainly due to higher
operating revenues and to a lesser extent the comparative benefit of
lower restructuring charges (€ 57 Mn) versus those incurred in 2012.
Administrative expenses rose by € 225 Mn to € 3,995 Mn, which was
Our cost-income ratio improved by 0.6 percentage points to 55.9 %,
reflecting our continued expense discipline. Furthermore our cost-
income ratio benefited from lower restructuring charges in 2013 com-
pared to 2012 but was burdened by lower performance fees in 2013 in
contrast to the record high in 2012. Excluding these two effects the
cost-income ratio improved by 1.0 percentage point – from 58.8 % in
2012 to 57.8 % in 2013.
Net income
Our net income increased by € 115 Mn, or 6.4 % to € 1,925 Mn. This was
largely consistent with our strong operating performance.
asset management business segment information
€ mn
Management and loading fees
Performance fees
Other
Fee and commission income
Commissions
Other
Fee and commission expenses
Net fee and commission income
Net interest income 1
Income from financial assets and liabilities
carried at fair value through income (net)
Other income
Operating revenues
Administrative expenses (net),
excluding acquisition-related expenses
Restructuring charges
Operating expenses
Operating profit
Income taxes
Net income
2013
8,032
510
69
8,611
(1,403)
(81)
(1,484)
7,127
12
13
10
7,162
(3,995)
(6)
(4,001)
2012
7,163
766
112
8,041
(1,243)
(67)
(1,310)
6,731
24
16
15
6,786
(3,770)
(63)
(3,833)
3,161
2,953
(1,181)
1,925
(1,029)
1,810
Cost-income ratio 2 in %
55.9
56.5
1
2
Represents interest and similar income less interest expenses.
Represents operating expenses divided by operating revenue.
2011
2012
2013
2011
2012
2013
Outperforming third-party assets under management
Underperforming third-party assets under management
1
The investment performance is based on Allianz Asset Management account-based, asset-weighted
three-year investment performance of third-party assets versus the primary target including all accounts
managed by portfolio managers of Allianz Asset Management. For some retail funds, the net of fee
performance is compared to the median performance of the corresponding Morningstar peer group
(first and second quartile mean outperformance). For all other retail funds and for all institutional
accounts, the gross of fee perfor mance (revaluated based on closing prices) is compared to the respective
benchmark based on different metrics.
The overall investment performance of our Asset Management busi-
ness was on a high level, with 85 % of our assets outperforming their
respective benchmarks (31 December 2012: 92 %). An outstanding 90 %
of PIMCO assets outperformed their respective benchmarks. 55 % of
AllianzGI assets outperformed their respective benchmarks.
Operating revenues
Despite unfavorable foreign currency translation effects in 2013, our
operating revenues rose by € 376 Mn, or 5.5 %, to € 7,162 Mn. On an inter-
nal basis 1, operating revenues grew by 8.5 %.This was mainly driven
by an increase in management and loading fees due to higher average
assets under management and higher related margins.
Net fee and commission income increased by € 396 Mn, or 5.9 % to
€ 7,127 Mn, benefiting from the increase in management and loading
fees. Our performance fees reached an impressive level in 2013. How-
ever, compared to the record year 2012, with its exceptionally high
performance fees, these decreased by € 256 Mn to € 510 Mn, mainly as
a result of lower performance fees from private funds and traditional
products.
Our income from financial assets and liabilities carried at fair
value through income (net), was down by € 3 Mn due to reduced levels
of seed money in 2013.
1
Operating revenues adjusted for foreign currency translation and (de-) consolidation effects.
2
Based on average exchange rates in 2013 compared to 2012.
84
Annual Report 2013
Allianz Group
C
Group Management Report
Management Discussion and Analysis
Business Environment
64
66 Executive Summary of 2013 Results
71
Property-Casualty Insurance Operations
78 Life/Health Insurance Operations
82 Asset Management
85 Corporate and Other
87 Outlook 2014
92 Balance Sheet Review
99 Liquidity and Funding Resources
104 Reconciliations
Corporate and Other
Operating loss decreased by € 110 mn to € 1,004 mn, driven by Holding & Treasury.
Business segment overview
Key figures
Corporate and Other encompasses the reportable segments
Holding & Treasury, Banking and Alternative Invest ments. Hold
ing & Treasury includes the management of and support for
Allianz Group’s businesses through its strategy, risk, corporate
finance, treasury, financial reporting, controlling, communica
tion, legal, human resources and technology functions. Our
banking products offered in Germany, Italy, France, the Nether
lands and Bulgaria complement our insurance product port folio.
We also provide global alternative investment management
services in the private equity, real estate, renewable energy and
infrastructure sectors, mainly on behalf of the Allianz Group.
Key figures Corporate and other1
€ mn
Operating revenues
Operating expenses 2,3
Operating result 2,3
2013
1,631
(2,635)
(1,004)
2012
1,632
(2,746)
(1,114)
Net income (loss) 2
(1,334)
(1,854)
Key figures reportable segments
€ mn
holding & treasury
Operating revenues
Operating expenses 2,3
Operating result 2,3
banKing
Operating revenues
Operating expenses 2,3
Operating result 2,3
alternative investments
Operating revenues
Operating expenses 2,3
Operating result 2,3
2013
2012
362
(1,301)
(939)
1,096
(1,187)
(91)
175
(151)
24
286
(1,387)
(1,101)
1,189
(1,223)
(34)
169
(147)
22
1
2
Consolidation included. For further information about our Corporate and Other business segment, please
refer to note 6 to the consolidated financial statements.
Prior year figures have been restated to reflect the retrospective application of the amended standard
IAS 19 – Employee Benefits, effective as of 1 January 2013. For further information, please refer to note 4
to the consolidated financial statements.
3
As of 1 January 2013, all restructuring charges are presented within operating profit and all prior year
figures have been adjusted to conform to the current accounting presentation.
Annual Report 2013
Allianz Group
85
Our net interest, fee and commission result decreased by € 33 mn
to € 545 mn due to a lower net interest result. Because of the low inter-
est rate environment and a reduction in our exposure to government
bonds, the net interest result was down by € 37 mn to € 332 mn. Our net
fee and commission income increased by only € 4 mn to € 213 mn as the
effects of growth in sales of insurance and investment-oriented prod-
ucts in Italy and the closure of Allianz Bank’s business operations in
Germany essentially offset each other.
Administration expenses were reduced by € 43 mn to € 468 mn,
mainly as a result of the closure of the Allianz Bank’s business oper-
ations.
Our loan loss provisions decreased by € 25 mn to € 86 mn. The pre-
vious year was burdened by increased loan loss provisions due to
financial guarantees within certain unit-linked products related to
peripheral sovereign bonds (which matured or were sold by the end
of 2012). However, we recorded higher loan loss provisions related to
our ship financing business in 2013.
Our operating income from financial assets and liabilities carried
at fair value through income (net) dropped by € 6 mn to € 8 mn.
alternative investments
Our operating result remained stable at € 24 mn (2012: € 22 mn). Lower
interest income and slightly increased investment and administrative
expenses were more than compensated for by a € 14 mn rise in our net
fee and commission income.
Earnings summary
Our operating result in Corporate and Other improved by € 110 mn to
a loss of € 1,004 mn. The € 162 mn improvement in Holding & Treasury
was partly offset by a € 57 mn deterioration in Banking. The operating
result in Alternative Investments remained almost stable at € 24 mn.
Our net loss decreased from € 1,854 mn to € 1,334 mn. This
improvement was supported by a higher non-operating investment
result, lower interest expenses from external debt and a decline in
amortization of intangible assets. Our reduced operating loss also
contributed to this development.
Earnings summaries
by reportable segments
holding & treasury
Our operating loss improved by € 162 mn to € 939 mn. This was driven
by a recovery of our net interest result and a better net fee and com-
mission result.
Our net interest result increased from € (169) mn to a net loss of
€ 63 mn. Interest and similar income increased by € 33 mn to € 278 mn
due to the resumption of interest payments on our silent participa-
tion in Commerzbank, but partly offset by lower interest income from
other debt instruments. Our interest expenses, excluding interest
expenses from external debt, decreased by € 73 mn to € 341 mn as rates
and internal borrowing diminished.
Our net fee and commission result advanced by € 54 mn to a loss
of € 178 mn. This reduction was mainly due to the higher revenues of
our internal IT service provider.
Administrative expenses (net), excluding acquisition-related
expenses, grew by € 93 mn to € 684 mn, mainly due to higher pension
costs as a result of lower discount rates.
During the second half of 2013 we reduced restructuring provi-
sions mainly related to our data center consolidation project by
€ 34 mn.
Investment expenses were down by € 22 mn to € 79 mn due to
increased cost recovery from other group companies.
banKing
Our operating loss worsened by € 57 mn to € 91 mn due to higher
restructuring charges and a decrease in the net interest result.
In 2013, we incurred restructuring charges of € 88 mn almost
completely related to the closure of the Allianz Bank’s business oper-
ations. In this context, it is worth mentioning that our restructuring
charges have been presented within the operating profit since the
beginning of 2013. Excluding the restructuring charges, the operating
result in Banking would have improved from 2012 by € 31 mn to a loss
of € 3 mn in 2013.
86
Annual Report 2013
Allianz Group
C
Group Management Report
Management Discussion and Analysis
Business Environment
64
66 Executive Summary of 2013 Results
71
Property-Casualty Insurance Operations
78 Life/Health Insurance Operations
82 Asset Management
85 Corporate and Other
87 Outlook 2014
92 Balance Sheet Review
99 Liquidity and Funding Resources
104 Reconciliations
Outlook 2014
− Global economic activity poised to pick up in 2014.
− Allianz Group operating profit outlook in the range of € 10.0 BN, plus or minus
€ 0.5 BN.
Overview: 2013 results versus previous year outlook 1
2013 results versus previous year outlook for 2013
outlook 2013 – as per annual report 2012
results 2013
allianz Group
Operating profit of € 9.2 bn, plus or minus € 0.5 bn.
Operating profit of € 10.1 bn.
Maintenance of strong capital and solvency ratios.
Protection of shareholders’ investments, while continuing to provide
attractive returns and dividends (dividend payout ratio of 40 %).
Profitable growth.
Investment strategy focused on generating attractive returns and
minimizing vulnerability to price fluctuations.
property-Casualty
Growth in gross premiums written between 2.5 % and 3.5 %.
Operating profit in the range of € 4.3 bn and € 5.1 bn.
Regulatory solvency ratio of 182 % (2012 (as published): 197 %; 2012 (pro
forma restated): 181 %).“aa” Standard & Poor’s rating with “stable” outlook
(revised upward from “negative” in March 2013). Allianz remains one of
the highest-rated insurance groups.
Return on equity, after income taxes, of 11.9 % (2012 (as published): 10.5 %;
2012 (restated): 11.1 %). Proposed dividend at € 5.30 (2012: € 4.50) per share.
Payout ratio of 40 %.
We recorded growth of 7.8 % in operating profit compared to the previous
year, driven by improvements in the Property-Casualty and Asset
Management business segments and partially offset by a lower Life/Health
contribution.
Operating investment result decreased by € 1.0 bn (4.7 %) mainly as a result
of the low interest environment and unfavorable foreign currency effects.
Non-operating investment result fell by € 0.1 bn.
Gross premiums written decreased by 0.7 % due to negative inter nal growth
of 0.3 % and unfavorable foreign currency translation effects.
Operating profit of € 5.3 bn above the higher end of our range, driven by a
strong underwriting result.
Combined ratio of 96 % over the cycle.
Combined ratio improved by 1.9 percentage points to 94.3 %.
Pressure on investment income due to reinvestments in a low
interest rate environment.
Overcompensation of the underlying claims inflation by the
aggregate effect of improvements in pricing, claims management
and productivity gains.
life/HealtH
Revenues at 2012 level.
Operating investment income (net) declined by 5.6 % to € 3.0 bn.
Accident year loss ratio excluding claims from natural catas trophes
improved from 69.5 % to 67.0 %. Expense ratio increased slightly from 27.9 %
to 28.4 %, mainly driven by the change in the crop business structure in the
United States, the regulatory changes in Brazil (policy collection fee) and
the acquisition of the activities of Gan Eurocourtage in France.
Statutory premiums of € 56.8 bn, compared to € 52.3 bn in 2012. Growth
driven by strong sales in the unit-linked business without guarantees.
Operating profit in the range of € 2.5 bn and € 3.1 bn.
Operating profit of € 2.7 bn.
Margin on reserves between 50 and 70 basis points.
Margin on reserves at 58 basis points.
Pressure on investment income due to low interest rates and
normalization of net harvesting result.
Prioritizing profitability over growth, taking further product and
pricing actions as necessary.
asset ManaGeMent
Moderate growth in total assets under management and continued
net inflows, especially into fixed income products.
Operating profit in the € 2.7 bn to € 3.1 bn range.
Cost-income ratio at or below 60 %.
Although net harvesting result was up, operating investment result
declined by 5.0 % to € 17.0 bn, driven by lower income from assets and
liabilities carried at fair value.
New business profitability improved from the previous year as a result
of continued product and pricing actions and a more favorable economic
environment.
Net outflows from total assets under management of € 14.0 bn, entirely out
of fixed income products as a result of the sharp increase in interest rates
during the second half of 2013.
Operating profit of € 3.2 bn due to higher average assets under
management and higher related margins.
Cost-income ratio improved by 0.6 percentage points to 55.9 %.
1
For more detailed information on the previous year outlook for 2013, please see the Annual Report 2012 starting on page 157.
Annual Report 2013
Allianz Group
87
Economic outlook 1
Insurance industry outlook
The improvement in the global purchasing managers’ index for the
manufacturing sector during the second half of 2013 has raised hopes
that the pickup in economic activity will continue or even intensify
well into 2014. It is particularly encouraging that the more upbeat
mood is now broadly spread across all regions. Given the expected
acceleration in growth in the industrialized world, global output is
likely to expand by slightly more than 3 % in 2014, following an
increase of 2.3 % in 2013. Fears that economic development in emerg-
ing markets would deteriorate substantially now look unfounded.
Nevertheless, they have lost steam since 2012 and will not return to
their pre-crisis growth rates. However, with an expected real GDP
increase of 4.6 % in 2014, growth in these countries will still be consid-
erably higher than in the industrialized world. In the Eurozone, the
economy is also starting to get back on its feet in crisis-ridden mem-
ber states, narrowing the “north-south divide”. Both sentiment indi-
ces and hard economic indicators such as industrial production data
suggest the economic recovery is set to continue, albeit at a moderate
pace. For 2014 as a whole, we expect real GDP growth of 1.5 %. Sup-
ported by brighter economic conditions in the Eurozone, the German
economy could expand by about 2 % in 2014. Inflation is likely to
remain subdued on a global level, not least due to the dire unemploy-
ment situation in many industrialized countries, which keeps the lid
on wages.
Financial markets will probably remain under the spell of mon-
etary policy in 2014. We expect to see a gradual exit from crisis mode,
led by the U.S. central bank reining in its asset purchases. Neverthe-
less, given its concerns about money market rates, banking liquidity
and lending growth, the European Central Bank might actually
slightly ease further – despite the recovery in the Eurozone – before
eventually starting to exit from its very expansionary policy stance in
late 2014. Even though monetary policy would still remain highly
accommodative, the first steps towards an exit could well be accom-
panied by pronounced swings in the equity, bond and currency mar-
kets. Although the sovereign debt crisis in the Eurozone is not yet
over, we expect it to continue to gradually abate.
With short-term rates close to zero, there are limited prospects
of markedly higher yields on longer-term bonds. We expect yields on
10-year German and U.S. government bonds to climb only modestly
to 2.4 % and 3.3 %, respectively, by the end of 2014.
With growth in the United States set to outpace that in the Euro-
zone, the U.S. Dollar is likely to appreciate against the Euro.
Global economic expansion is set to accelerate over 2014. Therefore,
the macroeconomic environment will be supportive of world pre-
mium growth. As in previous years, premium growth in emerging
markets will outpace that of advanced markets, although the latter’s
recovery will be more pronounced. On the other hand, the outlook for
profitability remains challenging, as investment returns are expected
to stay low and the regulatory environment continues to become
more demanding in terms of capital and reserve requirements.
In the property-casualty sector, we anticipate higher premium
growth in 2014 as the increase in economic activity bolsters demand
for insurance coverage. In particular, the expected recovery in Europe
should pave the way for a return to positive premium growth in all
parts of the region. Emerging markets should display stable growth
rates – although against the backdrop of a tougher economic envi-
ronment in some of these markets, the expansion might be moderate
by their historical standards. The increase in premium rates on the
other hand may rather slow down in 2014. Overall, we expect global
premium revenue to rise in the 4.5 % – 5.0 % range in 2014 (adjusted for
foreign currency translation effects).
Overall profitability for the property-casualty sector – although
benefiting from a continuing gradual market hardening – is expected
to remain stable in 2014, with low yields working their way through
to earnings, prices increasing modestly and reserve releases dwin-
dling somewhat but helped by the benign inflationary environment.
In the life sector, we expect premium growth to recover, too. In
mature markets, better economic prospects and a new product mix
will help to lift top-line growth. In emerging markets strong growth
will be mainly driven by rising incomes and social security reforms.
All in all, we expect that global premium revenue will rise in the
3.5 % – 4.5 % range in 2014 (adjusted for foreign currency translation
effects).
With interest rates remaining at low levels, companies will con-
tinue to adapt their business models to the challenging environment.
Besides a stronger focus on the protection business – including
health – new and more flexible guarantee concepts are set to come
to the forefront in the savings business. At the same time, insurers
will continue to look for new, long-term investment opportunities,
paying special attention to infrastructure investments. But despite
progress on these fronts, profitability will remain under pressure, not
least because of more stringent capital and reserve requirements.
1
The information presented in the sections Economic outlook, Insurance industry outlook and Asset manage-
ment industry outlook is based on our own estimates.
88
Annual Report 2013
Allianz Group
C
Group Management Report
Management Discussion and Analysis
Business Environment
64
66 Executive Summary of 2013 Results
71
Property-Casualty Insurance Operations
78 Life/Health Insurance Operations
82 Asset Management
85 Corporate and Other
87 Outlook 2014
92 Balance Sheet Review
99 Liquidity and Funding Resources
104 Reconciliations
Asset management industry outlook
Overview: outlook and assumptions 2014
Increasing asset valuations for equities, as well as growing optimism
about growth in certain developed markets, provide a potential tail-
wind for the asset management industry in 2014. Nevertheless, con-
siderable downside risks remain and could materialize if global
growth fails to meet expectations. A reduction of the currently highly
supportive monetary policy may also put the positive trends in finan-
cial markets at risk. The further development of regulatory activities
– particularly in the consumer protection and transparency fields – is
an additional source of uncertainty for the asset management industry.
Throughout 2013, investors demonstrated a growing risk appe-
tite by, among other actions, shifting their asset allocation towards
equities, multi-asset or solutions-oriented fixed income strategies.
Although equities may remain vulnerable to setbacks in the near fu-
ture due to the rising valuations, higher interest rates and global
demographic trends on the other hand, will increase the attractive-
ness of bonds. This holds true in particular for liability-driven inves-
tors or for the growing number of retirees in the developed world
looking for a stable stream of income.
Improving economic conditions in certain developed markets
as well as trends in client demand represent a positive environment
for further asset management industry growth. At the same time,
industry profitability is expected to remain challenged as asset flows
into passive products and growing expenses from higher distribution
or marketing costs put pressure on operating margins, and the
effects of increased regulatory oversight and reporting take their toll.
In such an environment a money manager’s ability to grow is
dependent on providing innovative client-focused investment solu-
tions, delivering above-benchmark investment results, offering com-
prehensive investment products and services, its ability to prudently
and holistically respond to client needs and upping the scale and
efficiency of operations.
Outlook for the Allianz Group
As discussed earlier, the world economy is poised to pick up in 2014
and we look set to enter a period of moderate growth. Despite signs
of a global recovery, however, there are clear risks for 2014. Geopoliti-
cal tensions, a renewed flare-up of the European sovereign debt crisis
in large industrialized countries and currency or trade wars all have
the potential to send the world economy into a tailspin. However, the
outlook provided here assumes the absence of such shocks.
outlook 2014
allianz Group
Operating profit of € 10.0 bn, plus or minus € 0.5 bn.
Protection of shareholders’ investments, while continuing to
provide attractive returns and dividends.
Selective profitable growth.
property-Casualty
Growth in gross premiums written by more than 3.0 %.
Operating profit in the range of € 5.1 bn to € 5.7 bn.
Combined ratio below 96 % over the cycle.
Pressure on operating investment income (net) due to
reinvestments in a low interest rate environment.
life/HealtH
Revenues in the range of € 52.0 bn to € 56.0 bn.
Operating profit between € 2.7 bn and € 3.3 bn.
Margin on reserves between 50 and 70 basis points.
Pressure on investment income due to low interest rates and
continued capital market uncertainty.
Prioritizing profitability over growth, taking further product
and pricing actions as necessary.
asset ManaGeMent
Slight growth in total assets under management due to
positive equity but subdued fixed income product inflows.
Operating profit in the € 2.5 bn to € 2.9 bn range.
Cost-income ratio at or below 60.0 %.
assuMptions
Our outlook assumes no significant deviations from the following
underlying assumptions:
− Accelerated global economic growth.
− Continued low interest rate environment.
− No dramatic interest rate movements.
− A 100 basis point increase or decrease in interest rates would,
respectively, either raise or lower operating profits by approx-
imately € 0.1 BN in the first year following the rate change. This
does not include fair value changes in interest rate sensitive
positions that are reported in our income statement.
− No disruptive fiscal or regulatory interference.
− Level of claims from natural catastrophes at expected average
levels.
− Average U.S. Dollar to Euro exchange rate of 1.35.
− A 10 % weakening or strengthening of the U.S. Dollar versus our
planned exchange rate of 1.35 to the Euro would have a negative
or positive impact on operating profits of approximately € 0.3 BN,
respectively.
We expect our business mix and profitability contributions to remain
largely unchanged compared to 2013. Our Property- Casualty busi-
ness will carry on making up the majority of our operating profit. We
anticipate that the Asset Management business segment will con-
tinue to be a significant source of operating profit, even though at a
Annual Report 2013
Allianz Group
89
lower level mainly due to lower expected performance fees and lower
average assets under management. In the Life/Health business seg-
ment, operating profitability will remain under pressure due to low
yields. However, we expect an increase compared to the 2013 results,
which were burdened by negative one-off effects.
Although the global economy is showing signs of a recovery,
investment results are likely to remain under pressure due to low
interest rates and the continued uncertainty surrounding the Euro-
pean sovereign debt crisis. These results will be partly offset by a better
operational performance in the business segments and a growth-
driven increase in our operating asset base.
Management’s assessment of expected
revenues and earnings for 2014
In 2013, our total revenues amounted to € 110.8 BN, representing a 4.1 %
and a 4.7 % increase on a nominal and internal basis, respectively,
compared to last year. We expect a rather flat development in 2014,
with Property-Casualty experiencing positive internal growth, while
Life/Health volumes and Asset Management revenues are likely to be
under pressure due to our selective focus on profitable growth and
the uncertain financial market outlook, respectively.
As our product and service offerings differ from country to country,
information about the development of our sales markets and modifi-
cations to our product portfolio also varies. Overall, we expect our mar-
ket and product mix to remain relatively unchanged in 2014. In the Life/
Health business segment, in line with expected market trends, we could
see a fall in premiums from life insurance products with guarantees.
In 2013, we exceeded our operating profit target, reaching
€ 10.1 BN. In 2014, we envisage operating profit of € 10.0 BN, plus or
minus € 0.5 BN, as we expect a lower level of performance fees and
lower average assets under management in the Asset Management
business segment, partially compensated for by an expected increase
in the Life/Health business segment.
Our net income increased substantially, reaching € 6.3 BN in 2013.
Consistent with our disclosure practice in the past and given the sus-
ceptibility of our non-operating results to adverse capital market
developments, we do not provide a precise outlook for net income.
However, since our outlook presumes no major disruptions of capital
markets, we anticipate a rather stable net income for 2014.
Premium growth in 2014 will be mainly driven by our global
insurance lines, the Anglo markets, emerging countries in Latin
America and Asia, as well as by improvements in some of our core
markets such as Germany, Italy and France.
We believe the overall slow rise in prices we witnessed in 2013 to
continue in 2014, contributing to the expected growth in our gross
premiums. However, as in previous years, we will keep focusing on
achieving outstanding underwriting results by adhering to our strict
underwriting discipline and will be willing to accept a lower top line
if target margins cannot be achieved.
For 2014, we anticipate keeping the combined ratio below 96 %
over the cycle (2013: 94.3 %). This rests on our expectation that the
aggregate effect of improvements in pricing, claims management
and productivity will more than compensate for underlying claims
inflation. Despite the high volatility of natural catastrophes in recent
years, we assume such claims will be in line with their expected aver-
age level in 2014.
As the low interest rate environment is likely to persist, invest-
ment income will remain under pressure due to the rather short
duration of investments in the Property-Casualty business segment.
We will continue to take measures to adapt our investment strategy
to ongoing market conditions.
Overall, we expect our 2014 operating profit to be in the range of
€ 5.1 BN to € 5.7 BN (2013: € 5.3 BN).
life/HealtH insuranCe
We will continue to prioritize profitability over growth in 2014. We ex-
pect revenues to be in the range of € 52.0 BN and € 56.0 BN, slightly below
the 2013 level of € 56.8 BN, which represented significant growth com-
pared to the prior year and included revenues of € 0.5 BN from our Inter-
national Health business in France, which will be moved to the Prop-
erty-Casualty business segment in 2014. Ultimately, volumes will be
dictated by our ability to write profitable business, but are also depen-
dent upon interest rate developments and the competitive landscape.
In 2013, our operating profit of € 2.7 BN was within our target
range of € 2.5 BN to € 3.1 BN. For 2014, we expect operating profit in our
Life/Health business segment to be between € 2.7 BN and € 3.3 BN, sup-
ported by growth in our underlying asset base along with the transfer
of some small asset management entities from the Asset Manage-
ment to the Life/Health business segment.
Our outlook equates to a margin on reserves ranging between 50
and 70 basis points.
property-Casualty insuranCe
We expect our revenues to increase by more than 3.0 % in 2014 (2013:
(0.7) %) on a nominal basis. We believe this moderate growth will be
supported by favorable price and volume effects, the impact of our
recent acquisition of Yapı Kredi Sigorta in Turkey and the reclassifica-
tion of our International Health business in France from the Life/
Health to the Property-Casualty business segment, which combined
will add approximately € 0.8 BN to our top line.
As in 2013, we will continue to actively work on mitigating the
impacts of the difficult market conditions, particularly low interest
rates. This includes product and distribution actions, expense and
asset/liability management as necessary, while exploring options to
further optimize the use of capital. Still, it must be noted that market
and accounting volatility along with the level of net harvesting can
significantly affect the Life/Health business segment results and make
precise predictions difficult.
90
Annual Report 2013
Allianz Group
C
Group Management Report
Management Discussion and Analysis
Business Environment
64
66 Executive Summary of 2013 Results
71
Property-Casualty Insurance Operations
78 Life/Health Insurance Operations
82 Asset Management
85 Corporate and Other
87 Outlook 2014
92 Balance Sheet Review
99 Liquidity and Funding Resources
104 Reconciliations
asset ManaGeMent
Economic conditions improved in the course of 2013 and growth
expectations have been revised upwards. Nevertheless, uncertainty
in the financial markets is likely to persist in 2014. Although we do not
anticipate market movements and flows to have a major impact on
the overall level of our assets under management, we expect them to
increase only slightly in 2014. (As of 31 December 2013, our total
assets under management decreased by 4.4 % compared to 31 Decem-
ber 2012.) While equity flows are envisaged to make a positive contri-
bution, fixed income flows are likely to remain subdued.
After the strong profit growth recorded in previous years, we do
not anticipate this development continuing in 2014 – mainly due to
a lower expected level of performance fees and a lower expected aver-
age U.S. Dollar. Asset driven revenues are also likely to remain under
their 2013 level as a result of the expected lower average assets under
management. Additionally, the transfer of certain asset management
entities from the Asset Management to the Life/Health business seg-
ment and Banking reportable segment will negatively impact our
profitability. Therefore, we envisage our operating profit to be in the
range of € 2.5 BN and € 2.9 BN in 2014 (2013: € 3.2 BN).
We expect to maintain a cost income ratio of 60 % or below in 2014
(2013: 55.9 %), supported by our focus on expense discipline and oper-
ational excellence.
Corporate and otHer
Our Corporate and Other business segment recorded an operating
loss of € 1.0 BN in 2013. Due to improving results from our banking
activities and slightly deteriorating operating results of the Holding
& Treasury reportable segment – mainly driven by our technology
investments – we predict an operating loss in the range of € 1.0 BN to
€ 1.2 BN for Corporate and Other (including consolidation) in 2014.
Financing and liquidity development
and capitalization
The Allianz Group maintains a healthy liquidity position combined
with superior financial strength and capitalization well above what
supervisory authorities currently require.
We expect to have steady access to financial markets at reason-
able costs in order to maintain our strong financial flexibility. This is
supported by prudent steering of our liquidity resources and a matu-
rity profile focusing on a long-dated average remaining term. Based
on current interest rate expectations, our average capital market
financing costs in 2014 should be broadly in line with 2013.
We closely monitor the capital positions of the Group and at the
operating entity level. Additionally, we will continue to optimize our
interest rate and spread sensitivities through asset/liability manage-
ment and life product design.
Expected dividend development
As we continuously strive to protect our investors’ capital and pro-
vide attractive returns and dividends, we aim to strike a balance
between payout, solvency and sustainability when determining our
dividend proposal. For 2013, we consider a payout ratio of 40 % of net
income attributable to shareholders to allow us to retain the capital
needed to support our growth and provide an attractive dividend.
This policy is reflected in our proposed dividend of € 5.30 per share.
In 2014, we will reevaluate our target payout ratio of 40 %.
Management’s overall assessment of
the current economic situation of the
Allianz Group
Overall, at the date of issuance of this Annual Report and given cur-
rent information regarding natural catastrophes and capital market
development – in particular foreign currency, interest rates and equi-
ties – the Board of Management has no indication that the Allianz
Group is facing any major adverse developments.
Cautionary note regarding forward-looking statements
The statements contained herein may include prospects, statements of future expectations and other forward-looking statements that are based on management’s current views and assump-
tions and involve known and unknown risks and uncertainties. Actual results, performance or events may differ materially from those expressed or implied in such forward-looking
statements.
Such deviations may arise due to, without limitation, (i) changes of the general economic conditions and competitive situation, particularly in the Allianz Group’s core business and core
markets, (ii) performance of financial markets (particularly market volatility, liquidity and credit events) (iii) frequency and severity of insured loss events, including from natural catastrophes,
and the development of loss expenses, (iv) mortality and morbidity levels and trends, (v) persistency levels, (vi) particularly in the banking business, the extent of credit defaults, (vii) interest
rate levels, (viii) currency exchange rates including the Euro/U.S. Dollar exchange rate, (ix) changes in laws and regulations, including tax regulations, (x) the impact of acquisitions, including
related integration issues, and reorganization measures, and (xi) general competitive factors, in each case on a local, regional, national and/or global basis. Many of these factors may be more
likely to occur, or more pronounced, as a result of terrorist activities and their consequences.
No duty to update
The company assumes no obligation to update any information or forward-looking statement contained herein, save for any information required to be disclosed by law.
Annual Report 2013
Allianz Group
91
Balance Sheet Review
− Shareholders’ equity remained stable at € 50.1 bn.1
− Solvency ratio strong at 182 %.2
Shareholders’1equity 1,3 23
Regulatory capital adequacy
The Allianz Group is a financial conglomerate within the scope of the
E.U. Financial Conglomerates Directive and the related German law
in force since 2005. The law requires that financial conglomerates
calculate the capital available to meet their solvency requirements
on a consolidated basis, which we refer to as “eligible capital”.
(0.6) %
50,388
50,084
Conglomerate SolvenCy1
ShareholderS’ equity
€ mn
70,000
60,000
50,000
40,000
30,000
20,000
10,000
10,122
11,451
28,815
6,741
€ bn
14,473
28,870
12/31/2012
12/31/2013
Paid-in-capital
Unrealized gains/losses (net)
Retained earnings (includes foreign currency effects)
As of 31 December 2013, shareholders’ equity amounted to € 50,084 mn,
a decrease of € 304 mn compared to 31 December 2012 (as restated).1
The net income attributable to shareholders of € 5,996 mn substan-
tially offset € 3,381 mn lower unrealized gains, our € 2,039 mn dividend
payout in May 2013 and an additional € 1,239 mn drop in equity from
negative foreign currency translation adjustments. The significant
decline in unrealized gains, predominantly on sovereign and corpo-
rate debt securities, was driven by a rise in interest rates and – to a
much lesser extent – realizations. The unfavorable development of
foreign currency translation adjustments was mainly due to the
strengthening of the Euro against the U.S. Dollar, the Turkish Lira and
the Australian Dollar.
1
2
3
As of 1 January 2013, our shareholders’ equity decreased by € 3.2 bn due to the amendments to IAS 19.
Prior year figures have been restated to reflect the retrospective application of the amended standard
IAS 19 – Employee Benefits, effective as of 1 January 2013. For further information, please refer to note 4
to the consolidated financial statements.
Off-balance sheet reserves are accepted by the authorities as eligible capital only upon request. Allianz SE
has not submitted an application so far. Excluding off-balance sheet reserves, the solvency ratio as of
31 December 2013 would be 173 % (2012 (pro forma restated): 171 %; 2012 (as published): 188 %).
This does not include non-controlling interests of € 2,765 mn and € 2,575 mn as of 31 December 2013 and
31 December 2012, respectively. For further information, please refer to note 25 to the consolidated financial
statements. Retained earnings include foreign currency translation adjustments of € (3,312) mn and
€ (2,073) mn as of 31 December 2013 and 31 December 2012, respectively.
92
Annual Report 2013
Allianz Group
197 %
181 %
182 %
48.4
44.4
46.5
24.6
24.6
25.6
50
40
30
20
10
12/31/2012
as published
12/31/2012
pro forma restated
12/31/2013
Solvency ratio
Eligible capital
Requirement
1
Off-balance sheet reserves are accepted by the authorities as eligible capital only upon request. Allianz SE
has not submitted an application so far. Excluding off-balance sheet reserves, the solvency ratio as of
31 December 2013 would be 173 % (2012 (pro forma restated): 171 %; 2012 (as published): 188 %).
After reflecting the negative impact of a change in accounting for
pensions (pro forma restated), our conglomerate solvency ratio
strengthened by one percentage point despite the redemption of a
subordinated bond. Compared to year-end 2012 (as published), our
conglomerate solvency ratio dropped by 15 percentage points to 182 %.
This was mainly due to amendments to IAS 19,4 which reduced the
Group’s eligible capital for solvency purposes by € 4.0 bn as of 1 Janu-
ary 2013. In 2013, negative currency translation adjustments and the
above-mentioned redemption of a subordinated bond further
decreased our eligible capital by € 1.0 bn and € 1.5 bn (converted
4
For further details on the amendments to IAS 19, please refer to note 4 to the consolidated financial
statements.
C
Group Management Report
Management Discussion and Analysis
Business Environment
64
66 Executive Summary of 2013 Results
71
Property-Casualty Insurance Operations
78 Life/Health Insurance Operations
82 Asset Management
85 Corporate and Other
87 Outlook 2014
92 Balance Sheet Review
99 Liquidity and Funding Resources
104 Reconciliations
value), respectively. These effects were only partly offset by our net
income (net of the proposed dividend). In total, our eligible capital
was down from € 48.4 bn to € 46.5 bn, including off-balance sheet
reserves of € 2.3 bn (31 December 2012: € 2.2 bn). The required funds
increased by € 1.0 bn to € 25.6 bn, mainly due to higher aggregate
po licy reserves in Life/Health and growth in our Asset Management
business. As a result, our eligible capital exceeded the minimum
legally stipulated level by € 20.9 bn.
Total assets and total liabilities
In the following sections, we show the asset allocation for our insur-
ance and banking portfolio and analyze important developments in
the balance sheets of our business segments.
As of 31 December 2013, total assets amounted to € 711.5 bn and
total liabilities were € 658.7 bn. Compared to year-end 2012, total assets
and total liabilities increased by € 17.1 bn and € 17.2 bn, respectively.
This section mainly focuses on our financial investments in debt
instruments, equities, real estate and cash and other – as well as our
insurance reserves and external financing – since these reflect the
major developments in our balance sheet.
market environment of different aSSet ClaSSeS
The financial markets showed a mixed picture in 2013. Equity markets
rallied, in particular during the second half of the year, fueled by the
low interest rate environment. In contrast, selected major bond
markets faced increasing government bond yields as the market
anticipated an attenuation of the ultra-loose monetary policy of the
Federal Reserve.
German and particularly U.S. government bond yields consider-
ably increased in 2013 – although starting from very low levels. In
contrast, Italian and Spanish government bond yields decreased
compared to 2012, with Spanish government bond yields showing the
higher movement.
Corporate credit spreads for A-rated debtors remained on a very
low level in Europe and narrowed slightly in the United States during
2013.
intereSt rate development in 2012 and 2013
10-year German government bond
%
10-year u.S. government bond
%
2.0
1.8
1.8
1.1
1.7
1.2
1.6
1.3
1.7
1.3
1.8
1.2
2.0
1.5
2.0
1.7
3.0
2.5
2.0
1.5
1.0
0.5
0
2.4
1.8
2.3
1.5
2.1
1.8
1.9
1.4
1.8
1.6
2.6
1.6
3.0
3.0
2.5
2.5
3.0
2.5
2.0
1.5
1.0
0.5
0
1Q
2Q
3Q
4Q
1Q
2Q
3Q
4Q
1Q
2Q
3Q
4Q
1Q
2Q
3Q
4Q
2012
2013
2012
2013
High/low
Yield at end of period
Annual Report 2013
Allianz Group
93
Credit Spread development in 2012 and 2013
Spread Europe “A”
%
Spread u.S. “A”
%
3.0
2.5
2.0
1.5
1.0
0.5
0
1.0
0.5
0.6
0.3
1Q
2Q
0.2
(0.2)
3Q
0.1
0.1
(0.1)
(0.1)
4Q
1Q
0.2
0.0
2Q
0.1
0.0
3Q
0.1
0.0
4Q
3.0
2.5
2.0
1.5
1.0
0.5
0
2.4
2.3
1.8
1.8
2.0
1.5
1.5
1.3
1.4
1.2
1.6
1.3
1.5
1.1
1.4
1.0
1Q
2Q
3Q
4Q
1Q
2Q
3Q
4Q
2012
2013
2012
2013
High/low
Spread at end of period
StruCture of inveStmentS – portfolio overview
Effective from this annual report, we changed the presentation of our
investment portfolio in our Group Management Report. From now on,
we also include investments of banking and asset management,
which were excluded in the former presentation. We believe this will
simplify a comparison with the figures presented in the notes to the
financial statements. As a result, the following portfolio review covers
all Allianz Group assets held for investment. The previous year’s fig-
ures have been adjusted accordingly. Due to this change, our total
investment portfolio was up by € 24.0 bn as of 31 December 2012 to
€ 531.5 bn (previously published: € 507.5 bn).
aSSet alloCation
Investment portfolio as of 31 December 2013: € 536.7 bn
[as of 31 December 2012: € 531.5 bn] in %
Real estate 2 [2]
Equities 7 [6]
Cash/Other 2 [2]
Debt instruments 89 [90]
Compared to the adjusted figures of 31 December 2012, our invest-
ment portfolio increased by € 5.2 bn to € 536.7 bn. This increase was
primarily driven by a larger gross exposure to equities and, to a lesser
extent, by higher real estate investments. It was partly offset by lower
net cash investments.
Our gross exposure to equities of € 35.5 bn (31 December 2012:
€ 29.7 bn) increased by one percentage point and accounted for 7 % of
our investment portfolio. This increase was mainly attributable to
positive equity market developments but also to new investments. In
line with this growth, our equity gearing1 increased by one percentage
point to 25 %.
Our exposure to real estate held for investment grew from
€ 9.7 bn to € 10.8 bn due to new investments and still accounted for 2 %
of our investment portfolio.
Our cash and other investments decreased from € 11.7 bn to
€ 9.8 bn, primarily as a result of new investments. Please refer to
Liquidity and Funding Resources from
page 99 onwards for further
information on our liquidity position.
The vast majority of our investment portfolio comprises diversi-
fied debt instruments, which remained almost unchanged at
€ 480.6 bn (31 December 2012: € 480.4 bn). Reinvested interest flows
offset declines in the fair value of our bonds, which were triggered by
rising interest rates and adverse currency effects as well as realiza-
tions. Given the growth of our total investment portfolio, the share of
debt investments decreased by one percentage point to 89 %.
1
Equity gearing is defined as the ratio of our equity holdings allocated to the shareholder after policyholder
participation and hedges to shareholders’ equity plus off-balance sheet reserves less goodwill.
94
Annual Report 2013
Allianz Group
C
Group Management Report
Management Discussion and Analysis
Business Environment
64
66 Executive Summary of 2013 Results
71
Property-Casualty Insurance Operations
78 Life/Health Insurance Operations
82 Asset Management
85 Corporate and Other
87 Outlook 2014
92 Balance Sheet Review
99 Liquidity and Funding Resources
104 Reconciliations
fixed inCome portfolio
Total fixed income portfolio as of 31 December 2013: € 480.6 bn
[as of 31 December 2012: € 480.4 bn] in %
Banks 7 [8]
Other 11 [11]
Other corporate
bonds 24 [22]
Our fixed income portfolio also includes 4 % of asset-backed
securities (AbS), which amounted to € 18.4 bn, down € 1.1 bn. This
decrease was driven by a reduction of mortgage-backed securities
(mbS) issued by U.S. agencies, which are backed by the U.S. govern-
ment. Their share declined from 21 % to 13 % of our AbS securities.
Overall, 73 % of our AbS were related to mbS and 97 % of the AbS portfolio
received an investment grade rating, with 87 % rated “AA” or better
(31 December 2012: 88 %).
Government bonds 37 [37]
inveStment reSult
Covered bonds 21 [22]
inveStment inCome (net)
€ mn
as of 31 December
2013
2012
Interest and similar income (net) 1
20,497
20,598
Group
The allocation of our fixed income portfolio remained stable, with a
slight increase in corporate bonds and a minor reduction in bank and
covered bonds. About 95 % of this portfolio of debt instruments was
invested in investment-grade bonds and loans. 1
Our government bond exposure remained almost flat at € 179.6 bn
(31 December 2012: € 177.4 bn), representing 37 % of our fixed income
portfolio. During 2013 we increased our exposure to supranational
bonds and decreased our exposure to Italy. Our sovereign exposure
in Italy and Spain equaled 6.0 % and 0.6 % of our fixed income portfolio,
respectively. The corresponding unrealized gains (gross) amounted
to € 1,922 mn in Italy and € 144 mn in Spain. Our government bond
exposure in Portugal remained limited and we reduced substantially
all our remaining exposure in Greece and Ireland at the beginning of
the year.
Our covered bonds portfolio decreased from € 107.1 bn to
€ 102.5 bn as the proceeds from matured covered bonds – mainly in
Germany – were only partially reinvested in this fixed income class.
47 % of this portfolio was German Pfandbriefe, backed by either public
sector loans or mortgage loans. Another 16 % and 9 % of the covered
bonds were allocated to France and Spain, respectively. Covered
bonds provide a cushion against real estate price deterioration and
payment defaults through minimum required security buffers and
over-collateralization.
Our corporate bond portfolio increased from € 107.1 bn to
€ 116.3 bn as new investments exceeded fair value declines.
We reduced our exposure to subordinated securities in banks by
€ 1.9 bn to € 4.8 bn in both Tier 1 and Tier 2 shares.
Income from financial assets
and liabilities carried at fair value
through income (net)
Realized gains/losses (net)
Impairments of investments (net)
Investment expenses
Investment income (net)
Delta
(101)
(1,331)
(42)
323
(29)
(1,842)
4,285
(611)
(905)
(511)
4,327
(934)
(876)
21,424
22,604
(1,180)
1
Net of interest expenses (excluding interest expenses from external debt).
Our investment income (net) decreased by € 1,180 mn to € 21,424 mn.
This was mainly due to the decline in our net income from financial
assets and liabilities carried at fair value through income.
Income from financial assets and liabilities carried at fair value
through income (net) worsened from a loss of € 511 mn to a loss of
€ 1,842 mn. This was primarily driven by the net of negative foreign
currency effects and financial derivatives that are used to protect
against equity and foreign currency fluctuations as well as to manage
duration and other interest rate-related exposures, in particular in
our German Life/Health business. The appreciation of the Euro
against selected emerging markets currencies and the rise in interest
rates were the main drivers. In addition, the drop also includes the
absence of income from The Hartford warrants, which were sold in
April 2012.
Our interest and similar income (net)2 decreased only 0.5 % to
€ 20,497 mn. Lower income from debt investments, which was impacted
by the low interest rate environment, was partly offset by higher
income from equity-related investments and real estate. Overall, our
interest and similar income (net) held up very well in this low-yield
environment. The net interest result also benefited from reduced
interest expenses.
1
Excluding self-originated German private retail mortgage loans. For 2 %, no ratings were available.
2
Net of interest expenses (excluding interest expenses from external debt).
Annual Report 2013
Allianz Group
95
2013
2012
Reserves net
Reserves ceded
Changes (net)
Impairments (net) decreased by more than one third to € 611 mn
as the previous year had a high burden of impairments on our equity
investments in the financial sector.
Realized gains and losses (net) remained almost stable at
€ 4,285 mn as lower realizations on equities and real estate were
almost offset by higher realizations on debt securities.
Investment expenses increased by € 29 mn to € 905 mn, driven by
new real estate investments.
aSSetS and liabilitieS of
the property-CaSualty buSineSS Segment
Property-Casualty assets
Compared to year-end 2012, our asset base in Property-Casualty
decreased by € 4.3 bn to € 101.0 bn. This decrease, which primarily
affected debt securities and loans and advances to banks and cus-
tomers, was driven almost equally by net flows, market and foreign
currency effects.
€ bn
12/31/2012
a
b
c
d
CompoSition of aSSet baSe – fair valueS1
€ bn
as of 31 December
Financial assets and liabilities carried
at fair value through income
Equities
Debt securities
Other 2
Subtotal
Investments 3
Equities
Debt securities
Cash and cash pool assets 4
Other
Subtotal
Loans and advances to banks and customers
0.4
0.1
–
0.5
5.0
67.0
4.9
7.5
84.4
16.1
0.3
0.2
–
0.5
3.9
69.8
5.1
7.7
86.5
18.3
Property-Casualty asset base
101.0
105.3
1
2
3
4
Loans and advances to banks and customers, held-to-maturity investments and real estate held for
investment are stated at amortized cost. Investments in associates and joint ventures are stated at either
amortized cost or equity, depending on – among other factors – our ownership percentage.
This comprises assets of € 0.1 bn and € 0.1 bn and liabilities of € (0.1) bn and € (0.1) bn as of 31 December
2013 and 31 December 2012, respectively.
These do not include affiliates of € 8.9 bn and € 8.8 bn as of 31 December 2013 and 31 December 2012,
respectively.
Including cash and cash equivalents, as stated in our business segment balance sheet of € 2.8 bn and
€ 2.7 bn and receivables from cash pooling amounting to € 3.4 bn and € 2.8 bn, net of liabilities from securi-
ties lending and derivatives of € (0.3) bn and € (0.2) bn, as well as liabilities from cash pooling of € (1.0) bn
and € (0.2) bn as of 31 December 2013 and 31 December 2012, respectively.
The business segment’s asset base comprised AbS of € 3.7 bn, repre-
senting 3.7 % as of 31 December 2013.
96
Annual Report 2013
Allianz Group
Property-Casualty liabilities
development of reServeS for loSS and loSS adjuStment expenSeS1
55.8
6.9
62.7
(13.5)
(1.7)
(4.0)
12/31/2013
50.5
25
0
+ 13.9
56.6
6.1
50
75
100
a Loss and loss adjustment expenses paid in current year relating to previous years
b Loss and loss adjustment expenses incurred in previous years
c Foreign currency translation adjustments and other changes, changes in the consolidated subsidiaries of
the Allianz Group and reclassifications
d Reserves for loss and loss adjustment expenses in current year
1
After business segment consolidation. For further information about changes in the reserves for loss and
loss adjustment expenses for the Property-Casualty business segment, please refer to note 19 to the
consolidated financial statements.
Compared to year-end 2012, the gross reserves for loss and loss
adjustment expenses for our Property-Casualty business decreased
by € 6.1 bn to € 56.6 bn. On a net basis, our reserves were down from
€ 55.8 bn to € 50.5 bn over the same period. Effective from 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”, which led to a
reclassification effect of € (2.9) bn.1 Foreign currency translation
adjustments and other changes amounted to € (1.2) bn. Excluding
both effects, the net reserves decreased by € 1.2 bn.
1
For further information on changes in presentation, please refer to note 4 to the consolidated financial
statements.
C
Group Management Report
Management Discussion and Analysis
Business Environment
64
66 Executive Summary of 2013 Results
71
Property-Casualty Insurance Operations
78 Life/Health Insurance Operations
82 Asset Management
85 Corporate and Other
87 Outlook 2014
92 Balance Sheet Review
99 Liquidity and Funding Resources
104 Reconciliations
aSSetS and liabilitieS of
the life/health buSineSS Segment
Life/Health assets
Our Life/Health asset base increased by € 14.7 bn, or 3.1 %, to € 487.0 bn.
This was primarily driven by higher financial assets for unit-linked
contracts and equities as a result of positive market developments
and new investments, but also by higher debt securities and cash
investments.
finanCial aSSetS for unit-linked ContraCtS1
€ bn
12/31/2012
a
b
c
12/31/2013
71.2
+ 7.2
+ 4.9
(2.2)
81.1
2013
2012
0
25
50
75
100
CompoSition of aSSet baSe – fair valueS
€ bn
as of 31 December
Financial assets and liabilities carried
at fair value through income
Equities
Debt securities
Other 1
Subtotal
Investments 2
Equities
Debt securities
Cash and cash pool assets 3
Other
Subtotal
Loans and advances to banks and customers
Financial assets for unit-linked contracts 4
Life/Health asset base
2.3
2.2
(4.2)
0.3
28.8
269.3
7.6
10.0
315.7
89.9
81.1
487.0
2.1
2.3
(3.5)
0.9
24.1
266.4
5.7
9.9
306.1
94.1
71.2
472.3
1
2
3
4
This comprises assets of € 1.7 bn and € 1.7 bn and liabilities (including the market value lia bility option) of
€ (5.9) bn and € (5.2) bn as of 31 December 2013 and 31 December 2012, respectively.
These do not include affiliates of € 0.8 bn and € 0.7 bn as of 31 December 2013 and 31 December 2012,
respectively.
Including cash and cash equivalents, as stated in our business segment balance sheet, of € 5.8 bn and
€ 5.6 bn and receivables from cash pooling amounting to € 3.5 bn and € 2.6 bn, net of liabilities from
securities lending and derivatives of € (1.7) bn and € (1.5) bn, as well as liabilities from cash pooling of
€ (0.0) bn and € (1.0) bn as of 31 December 2013 and 31 December 2012, respectively.
Financial assets for unit-linked contracts represent assets owned by, and managed on behalf of, policy-
holders of the Allianz Group, with all appreciation and depreciation in these assets accruing to the benefit
of policyholders. As a result, the value of financial assets for unit-linked contracts in our balance sheet
corresponds to the value of financial liabilities for unit-linked contracts. The International Financial Report-
ing Standards (IFRS) require the classification of any contract written by an insurance company either as
an insurance contract or as an investment contract, depending on whether an insurance component is
included. This requirement also applies to unit-linked products. In contrast to unit-linked investment
contracts, unit-linked insurance contracts include coverage for significant mortality or morbidity risk.
As of 31 December 2013, AbS of € 13.8 bn represented 2.8 % of the busi-
ness segment’s asset base. Compared to year-end 2012, this exposure
decreased by € 1.5 bn as a result of the previously mentioned reduction
of mbS issued by U.S. agencies.
a Change in unit-linked insurance contracts
b Change in unit-linked investment contracts
c Foreign currency translation adjustments
Financial assets for unit-linked contracts
Changes
1
Financial assets for unit-linked contracts represent assets owned by, and managed on behalf of, policy-
holders of the Allianz Group, with all appreciation and depreciation in these assets accruing to the benefit
of policyholders. As a result, the value of financial assets for unit-linked contracts in our balance sheet
corresponds to the value of financial liabilities for unit-linked contracts. The International Financial Report-
ing Standards (IFRS) require the classification of any contract written by an insurance company either as
an insurance contract or as an investment contract, depending on whether an insurance component is
included. This requirement also applies to unit-linked products. In contrast to unit-linked investment
contracts, unit-linked insurance contracts include coverage for significant mortality or morbidity risk.
Financial assets for unit-linked contracts increased by € 9.9 bn, or 13.9 %,
to € 81.1 bn. Unit-linked insurance contracts increased by € 7.2 bn to
€ 55.4 bn due to good fund performance (€ 5.5 bn) and premium
inflows exceeding outflows by € 3.6 bn. Unit-linked investment con-
tracts were up by € 4.9 bn to € 25.7 bn, with premium inflows signifi-
cantly exceeding outflows (net € 3.0 bn). The main drivers of currency
effects were the weaker U.S. Dollar (€ (1.0) bn) and Asian currencies
(€ (0.9) bn).1
Life/Health liabilities
Life/Health reserves for insurance and investment contracts grew by
€ 9.9 bn, or 2.6 %, to € 390.9 bn in 2013. The € 15.7 bn increase in aggre-
gate policy reserves was mainly driven by our operations in Germany
(€ 9.3 bn), the United States (€ 2.5 bn before currency effects), Luxem-
bourg and Italy (€ 0.7 bn each). Reserves for premium refunds
decreased by € 2.2 bn due to lower unrealized gains to be shared with
policyholders. The currency impact of € (3.6) bn mainly resulted from
the weaker U.S. Dollar (€ (2.3) bn) and Asian currencies (€ (0.9) bn).1
Annual Report 2013
Allianz Group
97
1
Based on the closing rate on the respective balance sheet dates.
Within our Corporate and Other asset base AbS increased from
€ 0.4 bn to € 0.9 bn due to new investments. Accordingly, the AbS share
of the business segment’s asset base increased from 0.9 % to 2.2 %.
Corporate and Other liabilities
As of 31 December 2013, subordinated liabilities remained almost
unchanged at € 11.5 bn (31 December 2012: € 11.6 bn) as the repayment
of a subordinated bond with a nominal amount of U.S. Dollar 2.0 bn
and a coupon of 8.375 % was approximately offset by the issuance of a
perpetual subordinated bond with a nominal amount of € 1.5 bn and
a coupon of 4.75 %. Other liabilities went up from € 21.8 bn to € 23.6 bn,
whereas certificated liabilities decreased by € 1.5 bn to € 13.2 bn.2
Off-balance sheet arrangements
In the normal course of business, the Allianz Group may enter into
arrangements that do not lead to the recognition of assets and liabil-
ities in the consolidated financial statements under IFRS. Since the
Allianz Group does not rely on off-balance sheet arrangements as a
significant source of revenue or financing, our off-balance sheet
exposure to loss is immaterial relative to our financial position.
The Allianz Group enters into various commitments including
loan and leasing commitments, purchase obligations and other
commitments. Please refer to note 46 to the consolidated financial
statements for more details.
The Allianz Group has also entered into contractual relation-
ships with various types of special purpose vehicles. They have been
designed in such a way that their relevant activities are directed by
means of contractual arrangements instead of voting or similar
rights. Typically, special purpose vehicles have been set up in connec-
tion with asset backed financings, certain investment fund products,
commercial mortgage loans and collateralized debt obligations. For
more details on our collateralized debt obligations, please refer to
note 44 to the consolidated financial statements.
Please refer to the Risk and Opportunity Report from
page 105
onwards for a description of the main concentrations of risk and
other relevant risk positions.
aSSetS and liabilitieS of
the aSSet management buSineSS Segment
Asset Management assets
The Asset Management business segment’s results are derived pri-
marily from third-party asset management. In this section, we refer
only to the business segment’s own assets.1
The main components of the business segment’s asset base
were cash and cash pool assets and debt securities. Overall, the Asset
Management asset base increased from € 3.8 bn to € 4.4 bn, entirely
driven by higher cash and cash pool assets.
Asset Management liabilities
Liabilities in our Asset Management segment decreased by € 0.4 bn to
€ 4.0 bn.
aSSetS and liabilitieS of
the Corporate and other buSineSS Segment
Corporate and Other assets
Our Corporate and Other asset base slightly decreased from € 42.0 bn
to € 41.3 bn. An increase in debt securities and loans and advances to
banks and customers was more than offset by a drop in cash and
cash pool assets.
CompoSition of aSSet baSe – fair valueS
€ bn
as of 31 December
Financial assets and liabilities carried
at fair value through income
Equities
Debt securities
Other 1
Subtotal
Investments 2
Equities
Debt securities
Cash and cash pool assets 3
Other
Subtotal
Loans and advances to banks and customers
Corporate and Other asset base
2013
2012
–
–
(0.2)
(0.2)
1.7
26.3
(5.0)
0.3
23.3
18.2
41.3
–
–
(0.2)
(0.2)
1.7
23.8
(0.4)
0.2
25.3
16.9
42.0
1
2
3
This comprises assets of € 0.3 bn and € 0.2 bn and liabilities of € (0.5) bn and € (0.4) bn as of 31 December
2013 and 31 December 2012, respectively.
These do not include affiliates of € 75.4 bn and € 74.3 bn as of 31 December 2013 and 31 December 2012,
respectively.
Including cash and cash equivalents, as stated in our business segment balance sheet, of € 1.5 bn and
€ 4.2 bn and receivables from cash pooling amounting to € 0.7 bn and € 0.2 bn, net of liabilities from
securities lending and derivatives of € (0.2) bn and € (0.1) bn, as well as liabilities from cash pooling of
€ (7.0) bn and € (4.7) bn as of 31 December 2013 and 31 December 2012, respectively.
1
For further information on the development of these third-party assets, please refer to the Asset Manage-
ment chapter.
2
For further information on Allianz SE debt as of 31 December 2013, please refer to notes 22 and 23 to the
consolidated financial statements.
98
Annual Report 2013
Allianz Group
C
Group Management Report
Management Discussion and Analysis
Business Environment
64
66 Executive Summary of 2013 Results
71
Property-Casualty Insurance Operations
78 Life/Health Insurance Operations
82 Asset Management
85 Corporate and Other
87 Outlook 2014
92 Balance Sheet Review
99 Liquidity and Funding Resources
104 Reconciliations
Liquidity and Funding Resources
Organization
The Allianz Group bases its liquidity management on policies and
guidelines approved by the Board of Management of Allianz SE. It is
the primary responsibility of Allianz SE and each of the operating sub-
sidiaries to manage their respective liquidity positions while
Allianz SE provides central liquidity pooling for the Group. Further-
more, capital allocation is steered by Allianz SE for the entire Group.
This organization enables the efficient use of liquidity and capital
resources and allows Allianz SE to ensure that the Group and its oper-
ating entities achieve the desired liquidity and capitalization levels.
Liquidity management
of our operating entities
insUrAnCe operAtions
The principal sources of liquidity for our operational activ ities
include primary and reinsurance premiums received, reinsurance
receivables collected, as well as investment income and proceeds
generated from the maturity or sale of investments. Those funds are
mainly used to pay property- casualty claims and related expenses,
life policy benefits, surrenders and cancellations, acquisition costs
as well as operating costs.
We generate strong cash flows from our insurance operations as
most premiums are received before payments of claims or policy
benefits are required, allowing us to invest these funds in the interim.
This enables us to generate investment income.
Our insurance operations also carry a high proportion of liquid
investments which can be converted into cash to pay for claims.
Generally, our investments in fixed income secu rities are sequenced
to mature when funds are expected to be needed.
The overall liquidity of our insurance operations depends on
capital market developments, interest rate levels and our ability to
realize the market value of our investment portfolio to meet insur-
ance claims and policyholder benefits. Additional factors affecting
the liquidity of our Property- Casualty insurance operations include
the timing, frequency and severity of losses underlying our policies
as well as policy renewal rates. In our Life operations, liquidity needs
are generally influenced by trends in actual mortality rates compared
to the related assumptions underlying our life insurance reserves.
They are also affected by the impact of market returns or crediting
rates and by the behavior of our life insurance clients, for example
regarding the level of surrenders and withdrawals.
Asset mAnAgement operAtions
Within our Asset Management operations, our primary sources of
liquidity include fees generated from asset management activities.
These funds are primarily used to cover operating expenses.
BAnking operAtions
The primary sources of liquidity in our Banking operations include
customer deposits, interbank loans and interest and similar income
from our lending transactions. The major uses of funds are the issu-
ance of new loans and investments in fixed income securities. The
liquidity of our Banking operations is largely dependent on the ability
of our private and corporate customers to meet their payment obliga-
tions arising from loans and other outstanding commitments. Equally
important is our ability to retain our customers’ deposits.
Liquidity management
and funding of Allianz SE
Allianz SE is responsible for managing the funding needs of the
Group, maximizing access to liquidity sources and minimizing
borrowing costs. Restrictions on the transferability of capital within
the Group result mainly from the capital maintenance rules under
applicable company laws and the regulatory solvency capital require-
ments applicable for regulated group companies.
LiQUiDitY resoUrCes AnD Uses
Allianz SE ensures adequate access to liquidity and capital for our
operating subsidiaries. The main sources of liquidity available for
Allianz SE are dividends received from subsidia ries and funding pro-
vided by capital markets. We define liquidity resources as assets that
are readily available – namely cash, money market investments as
well as highly liquid government bonds. The major uses of funds
include paying interest expenses on our debt funding, operating
costs, internal and external growth investments as well as dividends
to our shareholders.
FUnDing soUrCes
Allianz SE’s access to external funds depends on various factors such
as capital market conditions, access to credit facilities as well as
credit ratings and credit capacity. The financial resources available
to Allianz SE in the capital markets for short-, mid- and long-term
funding needs are described below. In general, mid- to long-term
financing is covered by issuing senior or subordinated bonds or ordi-
nary shares.
Annual Report 2013
Allianz Group
99
Equity funding
As of 31 December 2013, the issued capital registered at the Commer-
cial Register was € 1,168,640,000. This was divided into 456,500,000 reg-
istered shares with restricted transferability. As of 31 December 2013,
Allianz SE held 2,761,795 (2012: 2,777,438) own shares.
Allianz SE has the option to increase its equity capital base
according to authorizations provided by our shareholders. The follow-
ing table outlines Allianz SE’s capital authorizations as of 31 Decem-
ber 2013:
CApitAL AUthorizAtions oF ALLiAnz se
CApitAL AUthorizAtion
nominAL AmoUnt
Authorized Capital 2010/i
Authorized Capital 2010/ii
Authorization to issue
bonds carrying conversion
and/or option rights
Conditional Capital 2010
€ 550,000,000
(214,843,750 shares)
€ 8,344,000
(3,259,375 shares)
€ 9,500,000,000
(nominal bond value)
€ 250,000,000
(97,656,250 shares)
expirY DAte oF
the AUthorizAtion
4 May 2015
4 May 2015
4 May 2015
(issuance of bonds)
No expiry date for
Conditional Capital 2010
(issuance in case option
or conversion rights are
exercised)
mAtUritY strUCtUre oF ALLiAnz se’s senior AnD sUBorDinAteD BonDs As oF 31 DeCemBer 2013
nominal value in € Bn
Please refer to
chase shares.
page 35 regarding authorizations to issue and repur-
5
4
3
2
1
1.51
1.5
1.5
0.5
1.5
1.0
0.75
4.4
2.5
1.5
0.9
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2041
2042
2043
perpetual
Senior bonds
Subordinated bonds
1
€ 1.5 bn subordinated bond called for redemption effective January 15, 2014.
Long-term debt funding
As of 31 December 2013, Allianz SE had senior and subordinated
bonds in a variety of maturities outstanding reflecting our focus on
long-term financing. As the cost and availability of external funding
may be negatively affected by general market conditions or by matters
specific to the financial services industry or the Allianz Group, we
seek to reduce refinancing risk by actively steering the maturity profile
of our funding structure.
Interest expenses on senior bonds decreased to € 261.1 MN (2012:
€ 306.8 MN). This was primarily driven by lower funding costs on new
issuances compared to the bonds that matured in 2013. For subordi-
nated bonds, interest expenses declined to € 610.0 MN (2012:
€ 614.1 MN). This was mainly due to the redemption of a U.S. Dollar
bond with a high coupon and the issuance of a new Euro bond with
a lower coupon in 2013.
100
Annual Report 2013
Allianz Group
C
Group Management Report
Management Discussion and Analysis
Business Environment
64
66 Executive Summary of 2013 Results
71
Property-Casualty Insurance Operations
78 Life/Health Insurance Operations
82 Asset Management
85 Corporate and Other
87 Outlook 2014
92 Balance Sheet Review
99 Liquidity and Funding Resources
104 Reconciliations
Short-term debt funding
Short-term funding sources available are the Medium-Term Note Pro-
gram and the Commercial Paper Program. As of 31 December 2013,
Allianz SE had money market securities outstanding with a carrying
value of € 869 MN: a € 311 MN decrease in the use of commercial paper
compared to the previous year-end. Interest expenses on money
market secu rities decreased to € 3.7 MN (2012: € 11.4 MN) due to a lower
level of short-term interest rates on average in 2013.
moneY mArket seCUrities oF ALLiAnz se
Carrying value
€ mn
869
Interest
expense
€ mn
3.7
as of 31 December
2013
Money market securities
2012
Money market securities
1,180
11.4
Average
interest rate
%
0.4
1.0
The Group maintained its A-1+/Prime-1 ratings for short-term issues.
Thus we can continue funding our liquidity under the Euro Commer-
cial Paper Program at an average rate below Euribor and under the
U.S. Dollar Commercial Paper Program at an average rate below U.S.
Libor.
Further potential sources of short-term funding allowing the
Allianz Group to fine-tune its capital structure are letter of credit
facilities and bank credit lines.
senior AnD sUBorDinAteD BonDs issUeD or gUArAnteeD BY ALLiAnz se 1
as of 31 December
2013
Senior bonds
Subordinated bonds
Total
2012
Senior bonds
Subordinated bonds
Total
Nominal
value
€ mn
Carrying
value
€ mn
Interest
expense
€ mn
6,651
10,926
17,577
6,000
10,976
16,976
6,581
10,856
17,437
5,942
10,895
16,837
261.1
610.0
871.1
306.8
614.1
920.9
Weighted
average
interest rate2
%
4.0
5.9
5.2
4.6
6.2
5.6
1
2
For further information on Allianz SE debt (issued or guaranteed) as of 31 December 2013, please refer to
notes 23 and 24 to the consolidated financial statements.
Based on nominal value.
The table below details the long-term debt issuances and redemp-
tions of Allianz SE during 2013 and 2012:
issUAnCes AnD reDemptions oF ALLiAnz se’s senior AnD sUBorDinAteD BonDs
€ mn
as of 31 December
Issuances 1
Redemptions1
Issuances net of
redemptions
2013
Senior bonds
Subordinated bonds
2012
Senior bonds
Subordinated bonds
1
Based on nominal value.
2,151
1,500
1,500
2,259
1,500
1,517
900
2,000
651
(17)
600
259
Funding in currencies other than the Euro enables us to diversify our
investor base or to take advantage of favorable funding costs in those
markets. Funds raised in non-Euro currencies are incorporated in our
general hedging strategy. As of 31 December 2013, approximately 9.3 %
(2012: 13.4 %) of long-term debt was issued or guaranteed by Allianz SE
in currencies other than the Euro.
CUrrenCY ALLoCAtion oF ALLiAnz se’s senior AnD sUBorDinAteD BonDs
nominal value in € mn
as of 31 December
2013
Euro
Non-Euro
Total
Senior and sub ordinated bonds
15,950
1,627
17,577
2012
Senior and sub ordinated bonds
14,700
2,276
16,976
Annual Report 2013
Allianz Group
101
AlliAnz SE bondS1 outStAnding AS of 31 dEcEmbEr 2013 And intErESt ExpEnSES in 2013
1. SEnior bondS2
4.0 % bond issued by Allianz Finance ii b.V., Amsterdam
Volume
Year of issue
Maturity date
iSin
Interest expenses
1.375 % bond issued by Allianz Finance ii b.V., Amsterdam
Volume
Year of issue
Maturity date
iSin
Interest expenses
4.75 % bond issued by Allianz Finance ii b.V., Amsterdam
Volume
Year of issue
Maturity date
iSin
Interest expenses
3.5 % bond issued by Allianz Finance ii b.V., Amsterdam
Volume
Year of issue
Maturity date
iSin
Interest expenses
3.0 % bond issued by Allianz Finance ii b.V., Amsterdam
Volume
Year of issue
Maturity date
iSin
Interest expenses
4.5 % bond issued by Allianz Finance ii b.V., Amsterdam
Volume
Year of issue
Maturity date
iSin
Interest expenses
Total interest expenses for senior bonds
2. SubordinAtEd bondS3
6.5 % bond issued by Allianz Finance ii b.V., Amsterdam
Volume
Year of issue
Maturity date
iSin
Interest expenses
5.75 % bond issued by Allianz Finance ii b.V., Amsterdam
Volume
Year of issue
Maturity date
iSin
Interest expenses
5.625 % bond issued by Allianz SE
Volume
Year of issue
Maturity date
iSin
Interest expenses
102
Annual Report 2013
Allianz Group
€ 1.5 bn
2006
11/23/2016
xS 027 588 026 7
€ 0.5 bn
2013
3/13/2018
dE 000 A1H g1J 8
€ 1.5 bn
2009
7/22/2019
dE 000 A1A KHb 8
€ 1.5 bn
2012
2/14/2022
dE 000 A1g 0ru 9
€ 0.75 bn
2013
3/13/2028
dE 000 A1H g1K 6
gbp 0.75 bn
2013
3/13/2043
dE 000 A1H g1l 4
€ 1.0 bn
2002
1/13/2025
xS 015 952 750 5
€ 2.0 bn
2011
7/8/2041
dE 000 A1gnAH1
€ 1.5 bn
2012
10/17/2042
dE 000 A1rE1Q3
€ 62.1 mn
€ 5.7 mn
€ 73.6 mn
€ 54.0 mn
€ 19.1 mn
€ 33.1 mn
€ 247.6 mn
€ 66.3 mn
€ 116.4 mn
€ 86.2 mn
5.5 % bond issued by Allianz SE 4
Volume
Year of issue
Maturity date
iSin
Interest expenses
4.375 % bond issued by Allianz Finance ii b.V., Amsterdam
Volume
Year of issue
Maturity date
iSin
Interest expenses
5.375 % bond issued by Allianz Finance ii b.V., Amsterdam
Volume
Year of issue
Maturity date
iSin
Interest expenses
5.5 % bond issued by Allianz SE
Volume
Year of issue
Maturity date
iSin
Interest expenses
4.75 % bond issued by Allianz SE
Volume
Year of issue
Maturity date
iSin
Interest expenses
Total interest expenses for subordinated bonds
3. iSSuES rEdEEmEd in 2013
8.375 % bond issued by Allianz SE
Volume
Year of issue
Maturity date
iSin
Interest expenses
4. iSSuES mAturEd in 2013
5.0 % bond issued by Allianz Finance ii b.V., Amsterdam
Volume
Year of issue
Maturity date
iSin
Interest expenses
Sum of interest expenses 1
Interest expenses from external debt
not presented in the table
Total interest expenses from external debt
€ 1.5 bn
2004
pErpEtuAl bond
xS 018 716 232 5
€ 1.4 bn
2005
pErpEtuAl bond
xS 021 163 783 9
€ 0.8 bn
2006
pErpEtuAl bond
dE 000 A0g npz 3
uSd 1.0 bn
2012
pErpEtuAl bond
xS 085 787 2500
€ 1.5 bn
2013
pErpEtuAl bond
dE 000 A1Y cQ2 9
uSd 2.0 bn
2008
pErpEtuAl bond
uS 018 805 200 7
€ 1.5 bn
2008
3/6/2013
dE 000 A0t r7K 7
€ 84.5 mn
€ 63.5 mn
€ 43.0 mn
€ 42.5 mn
€ 13.6 mn
€ 516.0 mn
€ 62.6 mn
€ 13.5 mn
€ 839.7 mn
€ 61.3 mn
€ 901.0 mn
1
2
3
4
For further information on Allianz SE debt (issued or guaranteed) as of 31 December 2013, please refer
to notes 23 and 24 to the consolidated financial statements.
Senior bonds provide for early termination rights in case of non-payment of amounts due under the bond
(interest and principal) as well as in case of insolvency.
The terms of the subordinated bonds do not explicitly provide for early termination rights in favor of the
bondholder. Interest payments are subject to certain conditions which are linked, inter alia, to our net
income, and may have to be deferred. Nevertheless, the terms of the relevant bonds provide for alternative
settlement mechanisms which allow us to avoid an interest deferral using cash raised from the issuance
of specific newly issued instruments.
€ 1.5 bn subordinated bond called for redemption effective January 15, 2014.
C
Group Management Report
Management Discussion and Analysis
Business Environment
64
66 Executive Summary of 2013 Results
71
Property-Casualty Insurance Operations
78 Life/Health Insurance Operations
82 Asset Management
85 Corporate and Other
87 Outlook 2014
92 Balance Sheet Review
99 Liquidity and Funding Resources
104 Reconciliations
Moreover, we recorded lower net cash inflows from loans and
advances to banks and customers especially in our Life/Health busi-
ness in Germany.
Net cash outflow used in financing activities amounted to € 1.4 bN
in 2013, compared to € 2.0 bN in 2012. Contributing to this develop-
ment were net cash inflows from liabilities to banks and customers
(after net cash outflows in 2012), mainly attributable to our Banking
operation in Italy. This increase was partially offset by lower net cash
inflows from our refinancing activities 1.
Cash and cash equivalents decreased by € 1.2 bN to € 11.2 bN as of
31 December 2013, mainly stemming from our Banking operation in
Italy and Allianz SE. The decrease was partially offset by higher cash
inflows at Allianz Life Insurance Company of North America due to
maturities of investments.
CAsh AnD CAsh eQUiVALents
€ mn
as of 31 December
Balances with banks payable on demand
Balances with central banks
Cash on hand
Treasury bills, discounted treasury notes, similar
treasury securities, bills of exchange and checks
Total cash and cash equivalents
2013
6,574
449
202
3,982
11,207
2012
7,295
2,277
223
2,642
12,437
Allianz Group consolidated cash flows
ChAnge in CAsh AnD CAsh eQUiVALents For the YeArs enDeD 31 DeCemBer
23,239
18,888
€ mn
30,000
20,000
10,000
0
(10,000)
(20,000)
(30,000)
1,945
(2,036) (1,435)
(1,230)
(14,860)
(22,802)
Net cash flow
provided
by operating
activities1
Net cash flow
used in investing
activities1
Net cash flow
used in financing
activities1
Change in cash
and cash
equivalents 2
2012
2013
1
2
The Allianz Group has changed the presentation of policyholders’ account deposits and withdrawals in
its consolidated statements of cash flows from cash flow from financing activities to cash flow from
operating activities. The change in presentation has been applied retrospectively. For further information
please refer to note 4 to the consolidated financial statement.
Includes effect of exchange rate changes on cash and cash equivalents of € (232) Mn and € (47) Mn in 2013
and 2012, respectively.
Net cash flow provided by operating activities amounted to € 23.2 bN,
up by € 4.4 bN compared to the previous year. Net cash flow provided
by operating activities is comprised of net income plus adjustments
for non-cash charges, credits and other items included in net earn-
ings and cash flows related to the net change in operating assets and
liabilities. Net income after adding back non-cash charges and similar
items increased by € 0.2 bN to € 8.8 bN in 2013. Additionally, operating
cash flows from net changes in operating assets and liabilities,
including other items, grew by € 4.1 bN to € 14.4 bN. This was driven by
higher reserves for insurance and investment contracts in our Life/
Health business, mainly in Germany and the United States. We also
recorded net cash inflows from financial assets and liabilities held
for trading as well as higher positive net changes from our operating
receivables/payables. Lower reserves for losses and loss adjustment
expenses in particular in our Property-Casualty business in the United
States – as a result of the changed structure in our crop business –
partially offset these effects.
Net cash outflow used in investing activities increased by € 7.9 bN
to € 22.8 bN in 2013. This rise was mainly attributable to higher net
cash outflows for available-for-sale investments at our Banking busi-
ness in Italy and our Life/Health operation in the United States.
Annual Report 2013
Allianz Group
103
1
Refers to cash flows from certificated liabilities and subordinated liabilities.
Reconciliations
The previous analysis is based on our consolidated financial state-
ments and should be read in conjunction with them. In addition to
our stated figures according to the International Financial Reporting
Standards (IFRS), the Allianz Group uses operating profit and internal
growth to enhance the understanding of our results. These additional
measures should be viewed as complementary to, and not as a sub-
stitute for, our figures determined according to IFRS.
For further information, please refer to note 6 to the consolidated
financial statements.
Composition of total revenue growth
We believe that an understanding of our total revenue performance
is enhanced when the effects of foreign currency translation as well
as acquisitions and disposals (or “changes in scope of consolida-
tion”) are analyzed separately. Accordingly, in addition to presenting
nominal total revenue growth, we also present internal growth,
which excludes these effects.
reConCiliation of nominal total revenue growth
to internal total revenue growth
Composition of total revenues
Total revenues comprise statutory gross premiums written in Property-
Casualty and Life/Health, operating revenues in Asset Management,
and total revenues in Corporate and Other (Banking).
%
2013
Property-Casualty
Life/Health
Asset Management
Corporate and Other
Allianz Group
2012
2013
2012
46,579
46,889
Property-Casualty
Life/Health
56,784
52,347
Asset Management
Corporate and Other
7,162
6,786
Allianz Group
Internal
growth
Changes in
scope of
consolidation
Foreign
currency
translation
Nominal
growth
(0.3)
9.1
8.5
(6.6)
4.7
2.5
(2.6)
15.4
3.0
0.5
2.0
0.5
(0.1)
0.0
1.1
0.3
(0.2)
0.2
1.1
0.1
(2.4)
(1.1)
(2.9)
0.0
(1.7)
1.9
1.8
7.7
0.0
2.1
(0.7)
8.5
5.5
(6.6)
4.1
4.7
(1.0)
23.3
4.1
2.7
Composition of total revenues
€ mn
Property-Casualty
Gross premiums written
Life/Health
Statutory premiums
Asset Management
Operating revenues
consisting of:
Net fee and commission income
7,127
6,731
Net interest income
Income from financial assets and liabilities
carried at fair value through income (net)
Other income
Corporate and Other
Total revenues (Banking)
consisting of:
Interest and similar income
Income from financial assets and liabilities
carried at fair value through income (net)
Fee and commission income
Interest expenses
Fee and commission expenses
Consolidation effects
(Banking within Corporate and Other)
Consolidation
12
13
10
551
613
8
475
(281)
(262)
(2)
(303)
24
16
15
590
719
14
456
(350)
(247)
(2)
(229)
Allianz Group total revenues
110,773
106,383
104
Annual Report 2013
Allianz Group
C
Group Management Report
Risk and Opportunity Report and Financial Control
Risk and Opportunity Report
105
123 Controls over Financial Reporting and
Risk Capital
Risk and Opportunity Report
− The Allianz risk management approach is designed to add value by focusing on
both risk and return.
− The Allianz Group is well capitalized and its solvency ratios are resilient.
Allianz risk profile
and management assessment
Risk PRofile
Allianz is exposed to a variety of risks through its core insurance and
asset management activities. These include financial market, credit,
insurance, operational, business and strategic risks. The three largest
risks in terms of their contribution to Allianz’s internal model risk
capital results are:
− Financial market risk, especially interest rate risk, due to the
duration mismatch between assets and liabilities for long-term
savings products;
− Credit and credit spread risk, again driven by assets backing
long-term savings products;
− Property-casualty premium and reserve risk, resulting from
natural and man-made catastrophes as well as accident year
claims uncertainty.
Allianz’s risk profile is relatively stable over time as it is driven by
Allianz’s risk appetite and steered by risk management practices and
limits – which are described later in this report.
However, Allianz continues to be exposed to two external forces
which affect its risk profile and would not normally be associated
with its core operating activities: the European sovereign debt crisis
and regulatory developments – especially the European solvency
directive, Solvency II.
The European sovereign debt crisis
The European sovereign debt crisis continues to have an impact on
markets and has kept interest rates at low levels. Despite the stabili-
zation of financial markets in 2013, many of the root causes of the
crisis remain unresolved and markets could fluctuate widely again
in the future, having adverse implications for Allianz’s balance
sheet.
sure to global financial institutions. This is supported by operational
contingency planning for Allianz SE and its operating entities, with
scenario analysis being conducted regularly for both the United
States and Europe. In addition, we further adjusted our product
design and pricing in the Life/Health business segment with respect
to guarantees and surrender conditions. Looking forward, our robust
action to deal with the various crisis scenarios has bolstered our
financial and operational resilience to strong shock scenarios. Con-
tinuous monitoring remains a priority to ensure the sustained effec-
tiveness of our contingency measures.
Regulatory developments
In July 2013, the Financial Stability Board designated Allianz as one of
nine G-SII companies (Global Systemically Important Insurers). In
November 2013, the European Trialogue process involving the Coun-
cil of the E.U. and the European Parliament came to an agreement on
the Solvency II “Omnibus II” directive, allowing the new risk-based
solvency capital framework for Europe to proceed with a planned
introduction date of January 2016.
Although details of future regulatory requirements, especially
Solvency II and those applying to G-SIIs, are becoming clearer, the
final rules are still evolving. This creates some uncertainties for our
business and in terms of the ultimate capital requirements for
Allianz. In addition, due to the market value balance sheet approach,
the Solvency II regime will lead to higher volatility in regulatory capi-
tal requirements compared to Solvency I. Finally, the potential for a
multiplicity of different regulatory regimes, capital standards and
reporting requirements will increase operational costs.
ManageMent assessMent
The Allianz Group’s management feels comfortable with the Group’s
overall risk profile and has confidence in the effectiveness of its risk
management framework to meet the challenges of a rapidly chang-
ing environment as well as day-to-day business needs. This confi-
dence is based on several factors which are outlined in more detail in
the sections that follow and are summarized here:
In addition to continuously monitoring these developments, our
management has responded decisively to these external events.
During 2013, we continued to execute a derisking program focused
primarily on peripheral European sovereign exposures and our expo-
− The Allianz Group is well capitalized and is comfortably meeting
its internal and regulatory solvency targets as of 31 December
2013. In March 2013, Standard & Poor’s not only reconfirmed
Allianz’s "AA" rating, but also improved the outlook back to
Annual Report 2013
Allianz Group
105
“stable”. With this rating, Allianz remains one of the highest-
rated insurance groups in the world.
− The Group’s management also believes that Allianz is well posi-
tioned to deal with potential future adverse events, in part due
to our strong internal limit framework defined by the Group’s
risk appetite and risk management practices.
− The Group has a conservative investment profile and disciplined
business practices in the Property-Casualty, Life/Health and
Asset Management business segments, leading to sustainable
operating earnings with a well-balanced risk/return profile.
− Finally, the Group has the additional advantage of being well
diversified, both geographically and across a broad range of
products.
Capitalization
For the benefit of shareholders and policyholders alike, our aim is to
ensure that the Allianz Group is adequately capitalized at all times
and that all operating entities meet their respective capital require-
ments. Furthermore, risk capital and cost of capital are important
aspects for making business decisions.
Our internal risk capital model plays a significant role in the
management of capital. In addition, we take into account the exter-
nal requirements of regulators and rating agencies. While capital
requirements imposed by regulators constitute a binding constraint,
meeting rating agencies’ capital requirements and maintaining
strong credit ratings are strategic business objectives of the Allianz
Group. We closely monitor the capital positions of the Group and
operating entities and apply regular stress tests based on standard
adverse scenarios. This allows us to take appropriate measures to
ensure our continued capital and solvency strength. Due to our effec-
tive capital management, the Allianz Group is well capitalized and met
its internal and regulatory solvency targets as of 31 December 2013.
RegulatoRy caPital adequacy
The Allianz Group is a financial conglomerate within the scope of the
E.U. Financial Conglomerates Directive and the related German law
in force since 1 January 2005. The law requires that a financial con-
glomerate calculates the capital available to meet its solvency require-
ments on a consolidated basis, which we refer to as “eligible capital”.
Currently, the requirements for our insurance business are based on
Solvency I. These capital requirements, as well as the definition and
calculation of eligible capital, will be replaced by the Solvency II rules
once the new regulation becomes binding.
106
Annual Report 2013
Allianz Group
congloMeRate solvency 1
€ Bn
as of 31 December
Requirement
Eligible capital
Solvency ratio
2013
25.6
46.5
182 %
2012
24.6
48.4
197 %
1
Off-balance sheet reserves are included in the calculation but accepted by the authorities as eligible
capital only upon request. Allianz SE has not submitted an application so far. Excluding off-balance sheet
reserves, the solvency ratio as of 31 December 2013 would be 173 % (2012 (as published): 188 %).
The conglomerate solvency ratio decreased by 15 percentage points
to 182 %, mainly due to the retrospective application of the amend-
ments to IAS 19 .1
exteRnal Rating agency caPital adequacy
Rating agencies apply their own models to evaluate the relationship
between the required risk capital of a company and its available
capital resources. An assessment of capital adequacy is usually an
integral part of the rating process. Following a review in March 2013,
the Allianz Group’s "AA" rating was affirmed by Standard & Poor’s. In
addition Standard & Poor’s revised the outlook from “negative” to
“stable”, recognizing our capital strength, diverse business profile and
very strong Enterprise Risk Management.
Allianz Group has one of the highest ratings amongst its peers.
The following table provides evidence of the sustainable financial
strength of Allianz SE and our ability to meet ongoing obligations.
Ratings of allianz se
Ratings1
Insurer financial
strength rating
Counterparty credit
rating
Commercial paper
(short-term) rating
2013
2012
2013
2012
2013
Standard
& Poor’s
Moody’s
A.M. Best
AA
Stable
outlook
(affirmed
Novem-
ber 2013)
Aa3
Negative
outlook
(affirmed
Decem-
ber 2013)
A+
(affirmed
Septem-
ber 2013)
AA
Negative
outlook
Aa3
Negative
outlook
A+
AA
Stable
outlook
(affirmed
Novem-
ber 2013)
Aa3
Negative
outlook
(affirmed
Decem-
ber 2013)2
aa –
(affirmed
Septem-
ber 2013)
2012
A–1+
AA
Negative
outlook
A–1+
(affirmed
Novem-
ber 2013)
AA
Negative
outlook 2
Prime –1
(affirmed
Decem-
ber 2013)
Prime –1
aa –
Not rated Not rated
1
2
Includes ratings for securities issued by Allianz Finance II B.V. and Allianz Finance Corporation.
Rating reflects senior unsecured debt.
1
For further details on changes in eligible capital and solvency requirement, please refer to the chapter
Balance Sheet Review from page 92 onwards.
C
Group Management Report
Risk and Opportunity Report and Financial Control
Risk and Opportunity Report
105
123 Controls over Financial Reporting and
Risk Capital
As part of the long-term financial strength rating, Standard & Poor’s
has a rating for Enterprise Risk Management (ERM). In 2013, Standard &
Poor’s assigned Allianz its highest possible rating – “very strong” – for
the ERM capabilities of our insurance operations. This indicates that
Standard & Poor’s regards it as “unlikely that Allianz Group will expe-
rience major losses outside its risk tolerance”. Standard & Poor’s
stated that the assessment is based on our strong risk management
culture, strong controls for the majority of key risks and strong stra-
tegic risk management. In addition, Standard & Poor’s reviewed our
internal capital model in 2012 and has given further credit to the
capital position of the Allianz Group since 4Q 2012 by taking our inter-
nal model results into account when determining the capital require-
ments in order to meet specific rating classes.
Internal capItal adequacy
The Allianz Group’s available capital is based on shareholders’ equi-
ty adjusted to reflect the full economic capital base available to
absorb unexpected economic losses.1 Our objective is to maintain
available capital at the Group level that is significantly above the
minimum indicated requirements as determined by our internal risk
capital model. We consistently steer the risk at the operating entity
level based on the same internal model framework.
avaIlable capItal and Internal rIsk capItal
€ bn
as of 31 December
Available capital
Internal risk capital
Capital ratio
2013
52.4
23.6
222 %
2012
49.3
24.8
199 %
Overall, our internal model solvency ratio increased from 199 % to
222 %. This strong growth was attributable to two effects. First, an
increase in our available capital – which was mostly driven by accu-
mulated net income and the increasing present value of future profits.
Second, to a decrease of € 1.2 bn in our required internal risk capital.
This was mainly due to positive market effects, in particular, rising
interest rates, rating improvements as well as reduced credit risk
exposure.
This Risk and Opportunity Report provides the Group’s internal
risk capital results based on pre-diversified risk capital and diversifi-
cation effects. Pre-diversified internal risk capital reflects the diversi-
fication effect within each risk category (i.e. market, credit, under-
writing, business and operational risk) but does not include the
diversification effect across categories. Group-diversified internal
risk capital also captures the diversification effect across all risk cat-
egories. Pre-diversified internal risk capital is used to measure con-
centration risks.
As of 31 December 2013, the Group-diversified internal risk capi-
tal before non-controlling interests of € 23.6 bn (2012: € 24.8 bn) repre-
sented a diversification benefit of approximately 32 %2 (2012: 33 %)
across risk categories and segments. Group-diversified internal risk
capital is broken down as follows:
allocated Internal rIsk capItal (total portfolIo before non-controllIng Interests)
€ mn
Market risk
Credit risk
Underwriting risk
Business risk
Operational risk
Diversification
Total
Pre-diversified (before tax)
Group-diversified
as of 31 December
2013
2012
2013
2012
2013
2012
Property-Casualty
Life/Health
Asset Management
3,669
3,933
11,653
13,404
685
559
Corporate and Other
1,987
1,519
1,881
3,591
169
277
2,144
4,127
119
671
9,627
801
–
191
9,848
1,089
–
180
2013
992
3,743
–
–
2012
2013
2012
2013
2012
2013
2012
1,020
3,424
–
–
1,268
1,287
(6,437)
(7,319)
11,000
10,913
917
586
385
914
576
249
(6,448)
(7,084)
14,257
15,874
(1)
–
(532)
(512)
1,439
2,308
1,254
2,107
Total
17,994
19,415
5,918
7,061
10,619
11,117
4,735
4,444
3,156
3,026 (13,418) (14,915)
29,004
30,148
Tax impact
Total Group
(5,367)
(5,386)
23,637
24,762
Detailed discussions of risk capital movements are provided in the
sections that follow.
1
Available capital is calculated under consideration of liquidity premium and yield curve extension for the
Life/Health business segment as described in the section Yield curve and liquidity premium assumptions.
on page 108.
2
Diversification before tax.
Annual Report 2013
Allianz Group
107
Internal risk capital framework
We define internal risk capital as the capital required to protect us
against unexpected, extreme economic losses. On a quarterly basis,
we calculate and aggregate internal risk capital across all business
segments – providing a common standard for measuring and com-
paring risks across the wide range of different activities that we
undertake as an integrated financial services provider.
geneRal aPPRoach
We utilize an internal risk capital model for the management of our
risk and solvency position and are working towards meeting the
forthcoming Solvency II internal model requirements. Our model is
based on a best practice technical platform with an up-to-date meth-
odology covering all modeled sources of quantifiable risks. This
forms an integral part of our internal risk capital framework. The
model framework is regularly assessed by the European College of
supervisors in the course of the internal model pre-application pro-
cess of Solvency II.
inteRnal Risk caPital Model
Our internal risk capital model is based on a Value-at-Risk (VaR)
approach using a Monte Carlo simulation. Following this approach,
we determine the maximum loss in the portfolio value of our busi-
nesses in the scope of the model within a specified timeframe (“hold-
ing period”) and probability of occurrence (“confidence level”). We
assume a confidence level of 99.5 % and apply a holding period of one
year. In the risk simulation, we consider market, credit, insurance
and other business events (“sources of risk”) and calculate the port-
folio value based on the net fair value of assets and liabilities under
potentially adverse conditions.
The required internal risk capital is defined as the difference
between the current portfolio value and the portfolio value under
adverse conditions dependent on the 99.5 % confidence level. Because
we consider the impact of a negative or positive event on all sources
of risks and covered businesses at the same time, all diversification
effects across products and regions are taken into account. The
results of our Monte Carlo simulation allow us to analyze our expo-
sure to each source of risk, both separately and in aggregate. In addi-
tion, for market risks we analyze several pre-defined stress scenarios
based either on historically observed market movements or on hypo-
thetical market movement assumptions. The modeling approach we
apply therefore enables us to identify scenarios that have a positive
impact on our solvency situation.
Yield curve and liquidity premium assumptions
When calculating the fair values of assets and liabilities, the assump-
tions regarding the underlying risk-free yield curve are crucial in
determining future cash flows and how to discount them. We apply
the methodology as provided by the European Insurance and Occu-
108
Annual Report 2013
Allianz Group
pational Pensions Authority (EIOPA) based on the latest guidance for
the extension of the risk-free interest rate curves beyond the last liquid
tenor. In addition, we adjust the risk-free yield curves for the Life/
Health business segment to make allowance for a liquidity premium.
Valuation assumption: replicating portfolios
Since efficient valuation and advanced, timely analysis is desired, we
replicate the liabilities of our Life/Health insurance business. This
technique enables us to represent all options and guarantees, both
contractual and discretionary, by means of standard financial instru-
ments. Using the replicating portfolio we determine and revalue
these liabilities under all potentially adverse Monte Carlo scenarios.
Diversification and correlation assumptions
Our internal risk capital model considers concentration, accumula-
tion and correlation effects when aggregating results at Group level,
in order to reflect the fact that not all potential worst-case losses are
likely to materialize at the same time. This effect is known as diversifica-
tion and forms a central element of our risk management framework.
We strive to diversify the risks to which we are exposed in order
to limit the impact of any single source of risk and help increase the
chances that the positive developments outweigh the negative. The
degree to which diversification can be realized depends in part on the
level of relative concentration of those risks as well as the joint move-
ment of sources of risk.
Where possible, we derive correlation parameters for each pair
of market risks through statistical analysis of historical market data,
considering weekly observations over several years. In case historical
market data or other portfolio-specific observations are insufficient
or not available, correlations are set according to a well-defined,
Group-wide process. Correlations are determined by the Correlation
Settings Committee, which combines the expertise of risk and busi-
ness experts. In general, we set the correlation parameters to represent
the joint movement of risks under adverse conditions. Based on these
correlations, we use an industry-standard approach, the Gaussian
copula approach, to determine the dependency structure of quantifi-
able sources of risk within the applied Monte Carlo simulation.
Actuarial assumptions
Our internal risk capital model also includes non-market assump-
tions on claims trends, inflation, mortality, longevity, morbidity,
policyholder behavior, expense, etc. We use our own internal historical
data for actuarial assumptions wherever possible and also consider
recommendations from the insurance industry, supervisory author-
ities and actuarial associations. The derivation of our actuarial
assumptions is based on generally accepted actuarial methods.
Within our internal risk capital and financial reporting framework
comprehensive processes and controls exist for ensuring the reliabil-
ity of those assumptions.1
1
For additional information regarding our internal controls over financial reporting, please refer to the
chapter Controls over Financial Reporting and Risk Capital from page 123 onwards.
C
Group Management Report
Risk and Opportunity Report and Financial Control
Risk and Opportunity Report
105
123 Controls over Financial Reporting and
Risk Capital
scoPe
By design, our internal risk capital model takes into account the fol-
lowing risk categories: market risk, credit risk, underwriting risk, busi-
ness risk and operational risk whenever these risks are present. A
further breakdown of the risk categories can be found in the section
Quantifiable risks in the internal capital model. With the exception of
the Asset Management business segment all business segments are
exposed to the full range of stated risk categories. By contrast, the
Asset Management business segment is mainly exposed to market,
credit and operational risk.
Our internal risk capital model covers:
− All of our major insurance operations.
− Our assets (including bonds, mortgages, investment funds,
loans, equities and real estate) and liabilities (including the
cash flow run-off profile of all technical reserves as well as
deposits and issued securities).
− For the Life/Health insurance products, options and guarantees
embedded in insurance contracts including policyholder partici-
pation rules.1
For our Asset Management business segment we assign internal risk
capital requirements based on the sectoral regulatory capital
requirements envisaged in Solvency II. The capital requirements of
smaller insurance operating entities, that have an immaterial impact
on the Group’s risk profile, are based on local regulatory require-
ments. We allocate these requirements to the risk categories of our
internal risk capital model, thereby allowing a consistent aggregation
of internal risk capital for all business segments at Group level.
Internal risk capital related to our European banking operations
is allocated to the Corporate and Other business segment, based on
the approach applied by banks under the local requirements with
respect to the Basel regulation (Basel II/III standards). It represents
an insignificant amount of approximately 1.7 % (2012: 1.6 %) of total
pre-diversified internal risk capital. Therefore, risk management with
respect to banking operations is not discussed further.
liMitations
Our internal risk capital model expresses the potential “worst-case”
amount in economic value that we might lose at a certain confidence
level. However, there is a statistically low probability of 0.5 % that
actual losses could exceed this threshold at Group level in the course
of one year.
We use model and scenario parameters derived from historical
data, where available, to characterize future possible risk events. If
1
For further information about participating life business, please refer to note 20 to the consolidated finan-
cial statements.
future market conditions differ substantially from the past, for exam-
ple in an unprecedented crisis, our VaR approach may be too conser-
vative or too liberal in ways that are too difficult to predict. In order
to mitigate reliance on historical data we complement our VaR anal-
ysis with stress testing. Our ability to back-test the model’s accuracy
is limited because of the high confidence level of 99.5 %, the one-year
holding period, as well as only limited data for some insurance risk
events – such as natural catastrophes – being available. Furthermore,
as historical data is used where possible to calibrate the model, it
cannot be used for validation. Instead, we validate the model and
parameters through sensitivity analyses, independent internal peer
reviews and, where appropriate, external reviews by independent
consulting firms focusing on methods for selecting parameters and
control processes. Overall, we believe that our validation efforts are
effective and that our model adequately assesses the risks to which
we are exposed.
As described previously, insurance liability values are derived
from replicating portfolios of standard financial market instruments
in order to allow for effective risk management. This replication is
subject to the set of available replicating instruments and might
therefore be too simple or restrictive to capture all factors affecting
the change in value of liabilities. Nevertheless, we believe that the
liabilities are adequately represented by the replicating portfolios
due to our stringent data and process quality controls.
Since internal risk capital takes into account the change in the
economic fair value of our assets and liabilities, it is crucial to accu-
rately estimate the market value of each item. For some assets and
liabilities, it may be difficult, if not impossible – notably in distressed
financial markets – to obtain either a current market price or to apply
a meaningful mark-to-market approach. For certain assets and liabil-
ities, where a market price for that instrument or similar instruments
is currently not available, we apply a mark-to-model approach. Non-
standardized derivative instruments – such as derivatives embedded
in structured financial products – are represented by the most com-
parable standard derivative types, because the volume of non-stan-
dard instruments is not material at either the local or Group level. For
some of our liabilities, the accuracy of fair values depends on the
quality of the actuarial cash flow estimates. Despite these limitations,
we believe the estimated fair values are appropriately assessed.
Model uPdates in 2013
In 2013 we kept the central risk capital models for all risk categories
stable and performed only the regular exposure and assumption
updates. The only local model update with material impact at Group
level is the introduction of Surplus funds together with a Going Con-
cern Reserve at Allianz Lebensversicherungs-AG in line with Solvency II
and BaFin methodology. The introduction increases the Group’s
capital requirement by € 0.4 bn, mainly affecting equity and credit
spread risk.
Annual Report 2013
Allianz Group
109
Internal risk assessment
concentRation of Risks
As we are an integrated financial services provider offering a variety
of products across different business segments and geographic
regions, diversification is key to our business model. Diversification
helps us manage our risks efficiently by limiting the economic
impact of any single event and by contributing to relatively stable
results and risk profile in general. Therefore, our aim is to maintain
a balanced risk profile without any disproportionately large risks.
At Group level, we identify and measure concentration risks con-
sistently across business segments in terms of pre-diversified inter-
nal risk capital and in line with the risk categories covered by our
internal risk capital model. In the following sections, all risks are
presented on a pre-diversified basis and concentrations of single
sources of risk are discussed accordingly.
With respect to investments, top-down indicators – such as stra-
tegic asset allocation benchmarks – are defined and closely moni-
tored to ensure balanced investment portfolios. Limits on financial
risk are in place for the Life/Health and Property-Casualty business
segments at Group level. They are based on the internal risk capital
model, complemented by stand-alone interest rate and equity sensi-
tivity limits, in order to protect the economic capital position. In addi-
tion, the Group’s policy is to require each operating entity to match
liabilities in congruent currencies with assets – as far as possible –
and take local currency risks only within pre-defined limits.
We also closely monitor concentrations and accumulation of
non-market risks already on a stand-alone basis (i.e. before the diver-
sification effect) within a global limit framework in order to avoid
substantial losses from single events (e.g. natural catastrophes, credit
events).
In order to manage counterparty concentration risk, we run a
Group-wide country and obligor group limit management frame-
work (CRisP 1), which covers credit and equity exposures and is based
on data used by the investment and risk experts at Group and operat-
ing entity levels. This limit framework forms the basis for discussions
on credit actions and provides notification services with a quick and
broad communication of credit-related decisions across the Group.
Clearly defined processes ensure that exposure concentrations and
limit utilizations are appropriately monitored and managed.
The setting of country and obligor exposure limits from the
Group’s perspective (i.e. the maximum concentration limit) takes
into account the Allianz Group’s portfolio size and structure as well
as our overall risk strategy.
1
Credit Risk Platform.
110
Annual Report 2013
Allianz Group
It is the ultimate responsibility of the Board of Management to
decide upon limit budgets. The Board of Management delegates
authorities for limit setting and modification to the Group Risk Com-
mittee and Group Chief Risk Officer by clearly defining maximum
limit amounts. All limits are subject to annual review and approval
according to the delegated authorities.
quantifiaBle Risks in the inteRnal caPital Model
The quantifiable risks that are considered in the risk model refer to
market, credit, underwriting, business and operational risk. In the
following sections, the evolution of the risk types in 2013 is explained.
Market risk
As an inherent part of our insurance operations, we collect premiums
from our customers and invest them in a wide variety of assets.
Therefore, the Allianz Group holds and uses many different financial
instruments. The resulting investment portfolios ultimately cover
the future claims and benefits to our customers. In addition, we
invest shareholders’ capital, which is required to support the risks
underwritten. As the fair values of our investment portfolios depend
on financial markets, which may change over time, we are exposed
to market risks.
In order to limit the impact of any of these financial market
changes and to ensure that assets adequately back policyholder lia-
bilities we have several measures in place. One of these, for example,
is asset/liability management linked to the internal model frame-
work incorporating risks as well as return aspects stemming from our
insurance obligations. In addition, we are selectively using deriva-
tives to either hedge our portfolio against adverse market move-
ments or to reduce our reinvestment risk, e.g. by using forwards or
swaptions. Furthermore, we have a limit system in place comprising
global indicators like strategic asset allocation benchmarks, as well
as more detailed limits, in order to operatively manage and limit
risks. The limit system is defined at Group level separately for the
Life/Health and the Property-Casualty business segments and is
based on a variety of different risk measures including Financial VaR,
equity and interest rate sensitivities as well as investment limits
around a benchmark portfolio approved by the Board of Manage-
ment. Our limit-setting process ensures that prevailing statutory
restrictions regarding the composition of investments are taken into
account. This means that in case certain investments are restricted
by statutory requirements to a certain amount – e.g. a given percent-
age of total investments – our internal limit referring to those invest-
ments cannot exceed the required percentage. Most statutory restric-
tions apply at local level, where processes ensure bottom-up that the
statutory restrictions are binding constraints. Based on this process,
guidelines are derived within the group center for certain invest-
ments, e.g. concerning the use of derivatives, and the compliance
with those is controlled by the respective risk and controlling func-
tions.
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Group Management Report
Risk and Opportunity Report and Financial Control
Risk and Opportunity Report
105
123 Controls over Financial Reporting and
Risk Capital
Furthermore, we have put in place standards for hedging activi-
ties due to exposures to fair value options embedded in life insurance
products. Life/Health operating entities carrying these exposures are
required to follow these standards, including making a conscious
decision on the amount of hedging.1 The hedging of risks stemming
from investments is also an element applied to manage and limit
risks efficiently. For example, protective puts are used to limit down-
ward exposure of certain investments.2 In the following table, we
present our Group-wide internal risk capital related to market risks:
AllocAted internAl mArket risk cApitAl by business segment And source of risk (totAl portfolio before tAx And non-controlling interests)
pre-diversified, € mn
as of 31 December
Property-Casualty
Life/Health
Asset Management
Corporate and Other
Total Group
Interest rate
Credit spread
Equity
Real estate
Currency
Total
2013
735
2012
402
2013
976
4,181
5,227
3,174
3
334
16
216
2
183
2012
1,309
2,795
–
259
2013
924
2012
768
2,996
3,570
32
707
66
607
2013
2012
2013
752
626
6
104
880
765
5
197
282
676
642
659
2012
574
2013
2012
3,669
3,933
1,047
11,653
13,404
472
240
685
1,987
559
1,519
5,253
5,861
4,335
4,363
4,659
5,011
1,488
1,847
2,259
2,333
17,994
19,415
Share of total Group-
internal risk capital
42.4 %
43.1 %
Our total pre-diversified internal market risk capital showed a
decrease, mainly driven by market movements. In particular, rising
interest rates and reduced volatilities lead to lower sensitivities of
options and guarantees making our Life/Health business segment
the biggest contributor to the reduction in market risk. With respect
to equity risk, improved hedging activities as well as higher policy-
holder participation more than offset a higher equity exposure due
to rising markets and additional investments. Overall, this resulted
in a decrease in equity risk.
The following chart presents the sensitivity of the internal model
solvency ratio under certain standard financial scenarios. These are
defined by reasonably possible individual movements in key market
parameters while keeping all other parameters constant with the
effects impacting both the available capital and internal risk capital.
impAct of stAndArd finAnciAl scenArios on internAl cApitAl rAtios
(totAl port folio before non-controlling interests And After tAx And group
diversificAtion)
€ mn
as of 31 December
Internal capital ratio
Interest rates up by 1 %
Interest rates down by 1 %
Equity prices up by 30 %
Equity prices down by 30 %
Combined down scenarios
2013
222
230
194
232
210
182
2012
199
220
177
210
188
165
Interest rate risk
As interest rates may fall below the rates guaranteed to policyholders
in some Life/Health markets and given the long duration of insur-
ance obligations, we are specifically exposed to interest rate risk
when we have to reinvest maturing assets prior to the maturity of life
contracts. This interaction of investment strategy and obligations to
policyholders forms an integral part of our internal risk capital model.
In addition, our asset/liability management approach is closely
linked to the internal risk capital framework and designed to achieve
investment returns over the long term in excess of the obligations
related to insurance and investment contracts.
These risks are reflected in the internal risk capital results and
managed by interest rate sensitivity limits. A significant part of the
Life/Health business segment’s pre-diversified internal risk capital
for interest rate risk lies in Western Europe – 80.2 % as of 31 December
2013 (31 December 2012: 79.8 %) – mainly to cover traditional life insur-
ance products with guarantees.
We manage interest rate risk from a comprehensive corporate
perspective: While the potential payments related to our liabilities in
the Property-Casualty business segment are typically shorter in
maturity than the financial assets backing them, the opposite usually
holds true for our Life/Health business segment due to the long-term
life insurance contracts. In part, this provides us with a natural hedge
on an economic basis at Group level.
1
2
For further information about the risk concentration in the Life/Health business, please refer to note 20
to the consolidated financial statements.
Further information on derivatives used for hedging can be found in note 43 to the consolidated financial
statements.
Annual Report 2013
Allianz Group
111
As of 31 December 2013, our interest rate sensitive investments
excluding unit-linked business – amounting to a market value of
€ 457.3 bn – would gain € 32.7 bn or lose € 29.7 bn in value in case of
changing interest rates by - 100 basis points and + 100 basis points,
respectively. 1
Cyclical Premium approach and view the more relevant risk to be
credit risk rather than credit spread. The advantage of being a long-
term investor therefore gives us the opportunity to invest in bonds
yielding spreads over the risk free return and earning this additional
yield component.
As described above, the risk related to interest rates lies in the
fact that in the long run yields that can be achieved by reinvesting
may not be sufficient enough to cover the guaranteed rates. In con-
trast, opportunities may materialize when interest rates increase.
This may result in higher returns from reinvestments than the guar-
anteed rates. As the table above also demonstrates, our solvency ratio
would increase by applying a 100 basis point upward parallel shift on
the interest rate curve.
Equity risk
The Allianz Group’s insurance operating entities usually hold equity
investments to diversify their portfolios and take advantage of attrac-
tive long-term expected returns. Strategic asset allocation bench-
marks and investment limits are used to manage and monitor these
exposures. In addition, they fall within the scope of the CRisP to avoid
a disproportionately large concentration of risk.
As of 31 December 2013, our investments excluding unit-linked
business that are sensitive to changing equity markets – amounting
to a market value of € 35.3 bn – would lose € 9.3 bn in value assuming
equity markets declined by 30 %. 2
Besides diversification we mainly invest in equities since, as a
long-term investor, we expect to be able to earn an excess return on
our investments. Risks from changes in equity prices are normally
associated with decreasing share prices and increasing equity price
volatilities. As stock markets also might increase above expectations,
opportunities may arise from equity investments. The potentially
positive effect of an increase in equity prices on our capital ratio can
be seen in the table above.
Credit spread risk
Our internal model framework fully acknowledges the risk of declin-
ing market values for our fixed income assets – such as bonds – due
to the widening of credit spreads. However, for internal risk manage-
ment and appetite, we also take into account the underlying econom-
ics of our business model. For example, the cash flows of our insur-
ance liabilities are to a large degree predictable, limiting to a great
extent the risk that we would be forced to sell these bonds prior to
maturity at a loss and allowing us to keep the bonds until the matu-
rity date. Therefore, we reflect this in our model using a Counter
Currency risk
Based on our foreign exchange management limit framework, cur-
rency risk is monitored and managed with the support of Group Trea-
sury and Corporate Finance at the operating entity and Group level.
The major part of foreign currency risk results from the economic
value of our non-Euro operating entities. If non-Euro foreign
exchange rates decline against the Euro from a Group perspective,
the Euro equivalent net asset values also decrease.
Real estate risk
Because of the relative size of our real estate portfolio compared to
total investments, real estate risk is currently of lesser relevance for
the Allianz Group. As of 31 December 2013, about 3.5 % (31 December
2012: 4.1 %) of the total pre-diversified internal risk capital was related
to real estate exposures.
Credit risk
The Allianz Group monitors and manages credit risk exposures and
concentrations to ensure it is able to meet policyholder obligations
when they are due and to maintain adequate capital and solvency
positions for the operating entities and the Group as a whole. This
objective is supported by the internal credit risk model and the CRisP
as described in the section Concentration of risks. Group-wide credit
data is collected following a centralized process and using standard
obligor and obligor group mappings.
Credit risk is measured as the potential economic loss in the
value of our portfolio due to changes in the credit quality of our coun-
terparts (“migration risk”) or the inability or unwillingness of the
counterparty to fulfill contractual obligations (“default risk”).
Our internal credit risk modeling framework covers counter-
party risk and country risk. Counterparty risk arises from our fixed
income investments, cash positions, derivatives, structured trans-
actions, receivables from Allianz agents and other debtors – as well
as reinsurance recoverables and credit insurance. 3 Country risk
exposure is calculated as cross-border exposure to all obligors domi-
ciled abroad from each operating entity perspective.
1
2
The stated market value includes all investments whose market value is sensitive to interest rate move-
ments (excluding unit-linked business) and therefore is not based on classifications given by accounting
principles.
The stated market value includes all investments whose market value is sensitive to equity movements
(excluding unit-linked business) and therefore is not based on classifications given by accounting
principles.
3
Exposures to the national governments of OECD and EEA states are modeled as risk free in the credit risk
internal model, if the exposure is issued in the local currency of the govern ment. This is in line with EIOPA’s
advice on Level 2 Implementation Measures on Solvency II. For further information on receivables to poli-
cyholders, agents and reinsurers, please refer to note 13 to the consolidated financial statements.
112
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123 Controls over Financial Reporting and
Risk Capital
The internal credit risk capital model is a state-of-the-art tool
which provides bottom-up analysis. The major drivers of credit risk
for each instrument are exposure at default, ratings, seniority, col-
laterals and maturity. Additional parameters assigned to obligors are
migration probabilities and obligor asset correlations reflecting
dependencies within the portfolio. Ratings are assigned to single
obligors via an internal rating approach which is based on long-term
ratings from rating agencies. It is dynamically adjusted using market
implied ratings and the most recent information.
The loss profile of a given portfolio is obtained through a Monte
Carlo simulation taking into account interdependencies and expo-
sure concentrations per obligor or segment. To reflect portfolio spe-
cific diversification effects, the loss profiles are calculated at different
levels of the Allianz Group structure (pre-diversified). They are then
fed into the overall internal risk capital model for further aggregation
across sources of risk to derive Group-diversified internal credit risk
capital.
allocated inteRnal cRedit Risk caPital By Business segMent
(total PoRtfolio BefoRe tax and non-contRolling inteRests)
PRe-diveRsified, € Mn
as of 31 December
Property-Casualty
Life/Health
Asset Management
Corporate and Other
Total Group internal credit risk capital
Share of total Group internal risk capital
2013
1,881
3,591
169
277
5,918
14.0 %
2012
2,144
4,127
119
671
7,061
15.7 %
Credit risk capital for the Group decreased due to the stabilizing
credit environment and active portfolio management that aims to
further improve risk diversification. Additionally, the decrease in Life/
Health and Corporate business segments is driven by a reduction of
non-investment grade exposures as well as the divestment of strate-
gic assets.
The following table displays the sensitivities of credit risk capital
to certain scenarios: deterioration of credit quality measured by
issuer rating 1 downgrades and the decline of recovery rates in the
event of a default (Loss-Given-Default, LGD). The sensitivities are cal-
culated by applying each scenario to all exposures individually but
keeping all other parameters constant.2
iMPact of selected cRedit scenaRios on inteRnal cRedit Risk caPital1
PRe-diveRsified, € Mn
as of 31 December
Base case
Rating down by 1 notch
Rating down by 2 notches
lgd up by 10 %
Total
2013
5,918
7,062
8,404
6,333
2012
7,061
8,349
9,879
7,597
1
A notch is referred to rating sub-classes, such as "AA+", "AA", "AA-" at Standard & Poor's scale or "Aa1",
"Aa2", "Aa3" at Moody’s scale.
Most of the credit risk capital requirements and impact of the sensi-
tivities in the above table can be attributed to senior unsecured and
lower investment grade borrowers.
Different sources of Allianz credit risk exposure are described in
the table below:
allianz coMPonents of cRedit Risk exPosuRe
allianz coMPonents of cRedit Risk
descRiPtion
investMent PoRtfolio
ReinsuRance PoRtfolio
cRedit insuRance PoRtfolio
Premiums collected from our customers and shareholders’ capital, which is required to support the risks under written, are invested to
a great extent in fixed income instruments. These investment portfolios ultimately cover the future claims to our customers. However,
for certain life insurance products, losses due to credit events can be shared with the policyholder, as described in the context of market
risks.
Credit risk to external reinsurers appears when insurance risk exposures are transferred by us to external reinsurance companies to
mitigate insurance risk. Potential losses can arise either due to non-recoverability of reinsurance receivables already present at the as-of
date or default on benefits that are under reinsurance treaties in-force.
Credit risk arises from potential claim payments on limits granted by Euler Hermes to its policyholders. Euler Hermes protects its
policyholders (partially) from credit risk associated with short-term trade credits advanced to clients of the policyholder. If the client of
the policyholder is unable to meet its payment obligations then Euler Hermes indemnifies the loss to the policyholder.
1
2
Credit risk capital calculations are based on issuer (borrower) ratings as opposed to issue (instrument)
ratings. The difference between issue and issuer ratings is primarily due to collateralization and seniority
and is reflected in loss-given-default (LGD).
Scenarios are applied only to investment and reinsurance exposure positions in portfolios of Allianz
operating entities.
Annual Report 2013
Allianz Group
113
Credit risk – investment
As of 31 December 2013, credit risk arising from the investment port-
folio accounted for 81.8 % (2012: 83.4 %) of our total Group pre-diversi-
fied internal credit risk capital. Credit Risk in the Life/Health business
segment is primarily driven by long-term assets covering long-term
liabilities. Typical investments are government bonds, senior corpo-
rate bonds, covered bonds, self-originated mortgages and loans as
well as a modest amount of derivatives. Due to the nature of the busi-
ness, the fixed income securities in the Property-Casualty business
segment tend to be short- to mid-term, which explains the lower
credit risk consumption in this segment.1
Allianz has a well-diversified portfolio of Exchange- and OTC-
traded derivatives, used as a part of efficient exposure management.
The counterparty credit risk arising from derivatives is low, since the
derivative's usage is governed by the Group-wide internal guidelines
for collateralization of derivatives that stipulate master netting and
collateral agreements with each counterpart and require high qual-
ity and liquid collateral. In addition, Allianz closely monitors the
credit ratings of counterparts and the exposure movements. Central
clearing of certain classes of OTC derivatives as required by EMIR
(European Market Infrastructure Regulation) and additional report-
ing duties will contribute to further reducing counterparty credit risk
and operational risk at Allianz.
As of 31 December 2013, the rating distribution of our fixed
income portfolio was as follows: 2
fixed incoMe investMents By Rating class – faiR values
€ Bn
Type of
issuer
as of
31 December
AAA
AA
A
BBB
BB
B
CCC
CC
C
D
Not rated
Total
Government &
Agency
Covered Bond
Corporate
Banks
aBs / MBs
Short-term Loan
Other
Total
2013
46.2
69.8
12.9
44.2
2.1
0.5
–
–
–
–
2012
46.5
67.4
12.2
44.0
3.4
0.5
–
–
–
–
2013
61.5
21.0
14.1
5.1
0.7
–
–
–
–
–
2012
73.2
16.2
12.6
4.9
0.1
–
–
–
–
–
3.9
3.4
0.1
0.1
2013
2012
2013
2012
2.0
9.1
35.3
56.4
6.3
2.6
0.2
0.1
–
0.4
3.9
3.0
8.9
32.3
47.0
5.9
2.6
0.1
–
–
0.3
7.0
3.8
8.1
4.4
8.2
14.3
16.8
7.1
1.2
0.1
–
–
0.7
–
0.2
5.6
1.0
0.2
–
–
–
–
0.1
33.1
2013
13.8
2012
15.3
2.3
1.3
0.6
0.1
0.1
–
0.2
–
–
–
1.8
1.2
0.5
0.1
0.1
0.1
0.4
–
–
–
2013
2012
2013
2012
2013
2012
0.1
1.4
0.6
0.5
0.4
–
–
–
–
–
0.3
3.3
–
1.1
1.4
0.7
0.4
–
–
–
–
–
0.6
4.2
–
0.1
1.0
0.4
–
–
–
–
–
–
1.4
2.9
–
0.1
1.1
0.4
0.1
–
–
–
–
–
1.0
2.7
127.4
111.8
79.5
142.4
103.7
77.6
112.8
104.6
10.6
11.2
3.4
0.2
0.3
–
0.4
9.7
3.3
0.2
0.4
0.7
0.3
12.3
456.1
456.7
179.6
177.4
102.5
107.1
116.3
107.1
38.7
18.4
19.5
Credit risk – reinsurance
As of 31 December 2013, 2.5 % (31 December 2012: 2.1 %) of our total
Group pre-diversified internal credit risk capital was allocated to
reinsurance exposures – of which 59.1 % (2012: 57.5 %) was related to
reinsurance counterparties in the United States and Germany.
rating by Standard & Poor’s. As of 31 December 2013, non-rated rein-
surance recoverables represented 17.9 % (31 December 2012: 21.7 %).
Reinsurance recoverables without a Standard & Poor’s rating include
exposures to brokers, companies in run-off and pools – where no rat-
ing is available – as well as companies rated by A.M. Best.
A dedicated team selects our reinsurance partners focusing on
companies with strong credit profiles. We may also require letters of
credit, cash deposits or other financial measures to further mitigate
our exposure to credit risk. As of 31 December 2013, 80.6 % (31 Decem-
ber 2012: 76.4 %) of the Allianz Group’s reinsurance recoverables were
distributed among reinsurers that had been assigned at least an "A"
1
Additionally 4.6 % (2012: 4.1 %) of our total Group pre-diversified internal credit risk capital is allocated to
receivables and potential future exposure for derivatives and reinsurance.
2
In accordance with the change in representation within the Group Management report, stated figures
include investments of Banking and Asset Management, which were excluded in the former representa-
tion. Due to this change our total investments increased by € 12.2 Bn as of 31 December 2012 to € 456.7 Bn
(previously published: € 444.5 Bn). Table excludes private loans.
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123 Controls over Financial Reporting and
Risk Capital
ReinsuRance RecoveRaBles By Rating class1
€ Bn
as of 31 December
AAA
AA+ to AA-
A+ to A-
BBB+ to BBB-
Non-investment grade
Not assigned
Total
2013
0.02
5.99
3.38
0.18
–
2.08
11.65
2012
0.02
6.05
3.50
0.21
0.02
2.72
12.52
1
Represents gross exposure broken down by reinsurer.
Credit risk – credit insurance
Our credit insurance portfolio is modeled by Euler Hermes based on
a proprietary model component, which is a local adaptation of the
central internal credit risk module and is reviewed by Group Risk. The
result is integrated in the Group’s internal credit risk capital to cap-
ture the concentration and diversification effects. As of 31 December
2013, 11.1 % (31 December 2012: 10.4 %) of our total Group pre-diversified
internal credit risk capital is allocated to Euler Hermes credit insur-
ance exposures.
By thoroughly managing our credit risk on the basis of our limit
management and the credit risk modeling frameworks, we have com-
posed a well-diversified credit portfolio. Our long-term investment
strategy to hold investments through the cycle to maturity enables
us to keep our portfolio stable even under adverse market conditions.
It also gives us the opportunity to earn planned excess returns
throughout the entire holding period of the investments. In our cred-
it insurance business proactive credit management actions offer
opportunities to keep losses from single credit events below expected
levels and therefore strongly support writing business that contrib-
utes to a balanced Group credit portfolio.
Underwriting risk
Underwriting risk consists of premium and reserve risks in the Prop-
erty-Casualty business segment as well as biometric risks in the Life/
Health business segment. For the Asset Management business seg-
ment and our banking operations underwriting risks are not relevant.
The table below presents the average pre-diversified internal risk
capital calculated for underwriting risks stemming from our insur-
ance business over the four quarters of 2013 versus 2012, as well as
the high and low quarterly internal risk capital amounts calculated
in both years. 1
yeaR-end, aveRage, high and low allocated inteRnal undeRwRiting Risk caPital By souRce of Risk
(total PoRtfolio BefoRe non-contRolling inteRests and BefoRe gRouP diveRsification)1
€ Mn
quaRteRly
Results
Year-end
Average
High
Low
Premium risk
natural catastrophe
Premium risk
terror
Premium risk
non-catastrophe
Reserve risk
Biometric risk
Total Group
2013
2012
2013
2012
2013
2012
2013
2012
2013
2012
2013
2012
427
432
458
420
353
401
442
353
24
23
25
19
21
20
21
20
3,809
3,829
3,848
3,809
3,790
3,712
3,790
3,648
5,834
5,949
6,093
5,835
6,040
5,785
6,099
5,186
525
673
878
502
913
928
1,113
731
10,619
10,906
11,070
10,619
11,117
10,846
11,117
10,254
1
As risks are measured by an integrated approach on an economic basis, internal risk capital takes reinsurance effects into account.
As of 31 December 2013, underwriting risk slightly decreased mainly
driven by slightly lower loss reserves decreasing our reserve risk. For
biometric risk the biggest single driver for the reduction was the
above mentioned model update in our Life/Health business segment.
Premium risk
As part of our Property-Casualty business operations, we receive pre-
miums from our customers and provide insurance protection in
return. Changes in profitability over time are measured based on loss
ratios and their fluctuations.2
Underwriting risk – Property-Casualty
Our Property-Casualty insurance businesses are exposed to premium
risk related to the current year’s new and renewed business as well
as reserve risks related to the business in force.
1
2
Prior year figures changed compared to last year's report due to reporting on pre-diversified basis compared
to Group-diversified in 2012.
Please refer to the section Property-Casualty Insurance Operations – Property-Casualty operations by
reportable segments on page 76 for a regional breakdown of loss ratios over the past two years.
Annual Report 2013
Allianz Group
115
We face the risk that underwriting profitability is lower than
expected. The volatility of the underwriting profitability measured
over one year defines our premium risk.
property-casualty loss ratios 1 for the past ten years
%
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
Loss ratio
65.9
68.3
69.9
69.1
69.5
68.0
66.1
65.0
67.2
67.6
1
Represents claims and insurance benefits incurred (net) divided by premiums earned (net).
Premium risk is subdivided into natural catastrophe risk, terror risk
and non-catastrophe risk. We calculate premium risk based on actu-
arial models that are used to derive loss distributions. Premium risk
is actively managed by the Allianz Group and its local operating enti-
ties. Assessing the risks as part of the underwriting process is a key
element of our risk management framework. There are clear under-
writing limits, and restrictions are centrally defined and in place
across the Group. In addition to the centrally defined underwriting
limits, the local operating entities have limits in place that take into
account their business environments. In addition, risks are mitigated
by external reinsurance agreements. All these measures contribute
to the limitation of risk accumulation.
Natural disasters, such as earthquakes, storms and floods, rep-
resent a significant challenge for risk management due to their accu-
mulation potential and occurrence volatility. In order to measure
such risks and better estimate the potential effects of natural disas-
ters, we use special modeling techniques in which we combine data
about our portfolio (such as the geographic distribution and charac-
teristics of insured objects and their values) with simulated natural
disaster scenarios to estimate the magnitude and frequency of poten-
tial losses. Where such stochastic models do not exist, we use deter-
ministic scenario-based approaches to estimate probable losses.
The Group’s net exposure to natural catastrophes remained
within our risk appetite in 2013. The top five perils contributing to the
natural catastrophe risk capital were: European windstorm, U.S. hurri-
cane, German hail as well as Californian and German earthquakes as
of December 2013.
Reserve risk
We estimate and hold reserves for past claims that have not yet been
settled. If the reserves are not sufficient to cover claims to be settled
in the future due to unexpected changes, we would experience losses.
The volatility of past claims measured over a one-year time horizon
defines our reserve risk. An indicator of this coverage is the amount
of net surplus 1 compared to the initial reserves.2
In general, our operating entities constantly monitor the devel-
opment of reserves for insurance claims on a line of business level.3
In addition, the operating entities generally conduct annual reserve
uncertainty analyses based on similar methods used for reserve risk
calculations. The Allianz Group performs regular independent
reviews of these analyses and Group representatives participate in
the local reserve committee meetings.
Underwriting risk – Life/Health
Underwriting risks of our Life/Health operations (biometric risks)
include mortality, disability, morbidity and longevity risks.
− Mortality, disability, and morbidity risks are risks associated
with the unexpected increase in the occurrence of death, dis-
ability or medical claims on our traditional products including
on our traditional life and health insurance products.
− Longevity risk is the risk that due to changing biometric assump-
tions the reserves covering our portfolio of life annuities and
group pension products might not be sufficient. Biometric
assumptions, such as life expectancy, play a significant role.
We measure these risks within our internal risk capital model by
distinguishing between the different sub-components, whenever
relevant or material: absolute level, trend, volatility around the best
estimate assumptions and pandemic risks. Depending on the nature
and complexity of the risk involved, our Health business is repre-
sented in the internal model according to Property-Casualty or Life/
Health calculation methods and is therefore included in the relevant
Property-Casualty and Life/Health figures accordingly. However,
most of our Health business is attributable to the Life/Health busi-
ness segment. Thanks to effective product design, the diversity of our
products and the substantial level of policyholder participation in
Western European countries, there were no significant concentra-
tions of underwriting risks within our Life/Health business as of
31 December 2013.4
Underwriting risk arises from lower profitability than expected.
As profitability calculations are based on several parameters, like
historical loss information, assumptions on inflation or on mortality
and morbidity, the realized parameters can differ from the ones used
for the calculation. For example, higher inflation than that incorpo-
rated in the calculations may lead to a loss. However, deviations can
1
2
3
4
Net surplus represents the cumulative surplus from re-estimating the reserves for loss and loss adjust-
ment expenses for previous years’ claims and includes foreign currency translation adjustments. For
further information, please refer to note 19 to the consolidated financial statements.
This figure is provided on a calendar year basis in note 19 to the consolidated financial statements.
For further information, please refer to note 19 to the consolidated financial statements.
For further information about insurance risk in the Life/Health business segment, please refer to note 20
to the consolidated financial statements.
116
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Risk and Opportunity Report
105
123 Controls over Financial Reporting and
Risk Capital
also occur in the opposite direction, therefore being beneficial and
leading to additional profit, e.g. a lower morbidity rate than expected
will most likely result in lower expenses.
Business risk
Business risks include cost risks and policyholder behavior risks. Cost
risks are associated with the risk that expenses incurred in administer-
ing policies are higher than expected, or that new business volume
decreases to a level that does not allow Allianz to absorb its fixed costs.
Policyholder behavior risks are risks related to the unpredict-
ability and adverse behavior of policyholders in exercising their
different contractual options: early termination of contracts, surren-
ders, partial withdrawals, renewals and annuity take-up options.
Assumptions on policyholder behavior are set according to accepted
actuarial methods and are based on our own historical data to the
extent available, otherwise they are based on industry data or expert
judgment.
allocated inteRnal Business Risk caPital By Business segMent
(total PoRtfolio BefoRe tax and non-contRolling inteRests)
PRe-diveRsified, € Mn
as of 31 December
Property-Casualty
Life/Health
Asset Management
Corporate and Other
Total Group internal credit risk capital
Share of total Group internal risk capital
2013
992
3,743
–
–
4,735
11.2 %
2012
1,020
3,424
–
–
4,444
9.9 %
Business risk remained mostly stable in 2013. Small changes specifi-
cally in the Life/Health business segment were mainly driven by
changes in business volume and best estimate assumptions.
As for underwriting risks, a positive deviation from the underlying
parameters will lead to additional returns. For example, lower than
expected expenses in our Property-Casualty business will lead to an
improved combined ratio.
Operational risk
Operational risks represent losses resulting from inadequate or failed
internal processes, from personnel and systems, or from external
events – including legal and compliance risk but excluding losses
from strategic and reputational risk.
Operational risk remained mostly stable in the course of 2013.
Small changes were driven by refinements in exposure coverage.
Allianz has developed a Group-wide consistent operational risk
management framework that focuses on the early recognition and
proactive management of operational risks in all business and sup-
porting functions. The framework defines roles and responsibilities,
risk processes and methods and has been implemented in our major
operating entities. Local risk managers ensure this framework is
implemented in their respective operating entities. These identify
and evaluate relevant operational risks and control weaknesses via a
structured self-assessment. Furthermore, operational risk events are
collected in a central loss database. An analysis of the causes of signif-
icant losses is carried out to provide comprehensive and timely infor-
mation to senior management and operating entities so they can
implement measures aimed at avoiding or reducing future losses.
allocated inteRnal oPeRational Risk caPital By Business segMent
(total PoRtfolio BefoRe tax and non-contRolling inteRests)
PRe-diveRsified, € Mn
as of 31 December
Property-Casualty
Life/Health
Asset Management
Corporate and Other
Total Group internal credit risk capital
Share of total Group internal risk capital
2013
1,268
917
586
385
3,156
7.4 %
2012
1,287
914
576
249
3,026
6.7 %
Major failures and disasters which could cause a severe disruption to
our working environment, facilities and personnel represent signifi-
cant operational risks for the Allianz Group and its operating entities.
Our Business Continuity Management (bCM) framework strives to
protect critical business functions from these shocks and enables
them to carry out their core tasks on time and at the highest standard.
Regularly enhanced, bCM activities and knowledge are embedded in
the company’s risk management processes.
Dedicated minimum-security standards are in place for IT sys-
tems across the Allianz Group to ensure the proper use and protection
of the Group’s information assets. With respect to financial state-
ments, our internal control system is designed to mitigate opera-
tional risks.1
In general, we aim to reduce operational failures by document-
ing and sharing relevant methods, procedures, structures and pro-
cesses in a comprehensive and timely manner across the Group,
which is one of the fundamental principles of the Allianz Group Risk
Policy.
By measuring our operational risk and further developing miti-
gation actions to manage the root causes we see the opportunity to
reduce our operational risk exposure.
otheR Risks
There are certain risks that cannot be fully quantified across the
Group using our internal risk capital model. For these risks, we also
pursue a systematic approach with respect to identification, analysis,
1
For additional information regarding our internal control over financial reporting, please refer to the
chapter Controls over Financial Reporting and Risk Capital from page 123 onwards.
Annual Report 2013
Allianz Group
117
assessment and monitoring. In general, the risk assessment is based
on qualitative criteria or scenario analyses. The most important of
these other risks include strategic, liquidity and reputational risk.
Strategic risk
Strategic risk is the risk of an unexpected negative change in the com-
pany’s value arising from the adverse effect of management decisions
regarding business strategies and their implementation.
This risk is evaluated and analyzed quarterly in the same way as
reputational risk, as described below. To ensure proper implementa-
tion of strategic goals in the current business plan, strategic controls
are carried out by monitoring respective business targets. We also
constantly monitor market and competitive conditions, capital mar-
ket requirements, regulatory conditions, etc. to decide whether to
make strategic adjustments. In addition, strategic decisions are dis-
cussed in various Board of Management level committees (e. g. Group
Capital Committee, Group Risk Committee, Group Finance Commit-
tee). The assessment of the associated risks is a fundamental element
in these discussions.
Liquidity risk
Liquidity risk is defined as the risk that short-term, current or future
payment obligations cannot be met or can only be met on the basis
of adversely altered conditions. Liquidity risk can arise primarily if
there are mismatches in the timing of cash payments and funding
obligations. Detailed information regarding Allianz Group’s liquidity
risk exposure, liquidity and funding – including changes in cash and
cash equivalents – is provided in the chapter Liquidity and Funding
Resources from
page 99 onwards and in notes 17, 23, 24 and 43 to
the consolidated financial statements.
The main goal of planning and managing Allianz SE’s liquidity
position is to ensure that we are always able to meet payment obliga-
tions. To comply with this objective, the liquidity position of Allianz SE
is monitored and forecasted on a daily basis. Strategic liquidity
planning over time horizons of 12 months and three years is reported
to the Board of Management regularly.
The accumulated short-term liquidity forecast is updated daily
and is subject to an absolute minimum strategic cushion amount
and an absolute minimum liquidity target. Both are defined for the
Allianz SE cash pool in order to be protected against short-term
liquidity crises. As part of our strategic planning, contingent liquidity
requirements and sources of liquidity are taken into account to
ensure that Allianz SE is able to meet any future payment obligations
even under adverse conditions. Major contingent liquidity require-
ments include non-availability of external capital markets, combined
market and catastrophe risk scenarios for subsidiaries as well as
lower than expected profits and dividends from subsidiaries.
Our insurance operating entities manage liquidity risk locally,
using asset-liability management systems designed to ensure that
assets and liabilities are adequately matched. This decentralized
118
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Allianz Group
approach guarantees sufficient flexibility in providing liquidity. The
local investment strategies particularly focus on the quality of invest-
ments and ensure a significant portion of liquid assets (e. g. govern-
ment bonds or covered bonds) in the portfolios. This helps us to meet
high liquidity requirements in the case of unlikely events. We employ
actuarial methods for estimating our liabilities arising from insur-
ance contracts. In the course of standard liquidity planning we recon-
cile the cash flows from our investment portfolio with the estimated
liability cash flows. These analyses are performed at the operating
entity level and aggregated at Group level.
Regarding our Asset Management business, forecasting and
managing liquidity is a regular process designed to meet both regula-
tory requirements and Group standards. This process is supported by
the liquidity management framework implemented in Allianz Asset
Management.
Reputational risk
Allianz’s reputation as a well-respected and socially aware provider
of financial services is influenced by our behavior in a range of areas
such as product quality, corporate governance, financial performance,
customer service, employee relations, intellectual capital and corpo-
rate responsibility. Reputational risk is the risk of an unexpected drop
in the value of the Allianz share price, the value of the in-force business
or the value of future business caused by a decline in our reputation.
With the support of Group Communications, Group Compliance
and the ESG Office 1, Group Risk defines sensitive business areas and
applicable risk guidelines, which are mandatory for all operating enti-
ties in the Allianz Group. All affected Group and operating entity func-
tions cooperate in the identification of reputational risk. Group Com-
munications is responsible for the risk assessment, based on a
Group-wide methodology. Single reputational risk management
decisions are integrated in the overall risk management framework
and reputational risks are identified and assessed as part of a quar-
terly Top Risk Assessment, during which senior management also
decides on a risk management strategy and related actions. In addi-
tion, reputational risk is managed on a case-by-case basis. Single
cases with a potential impact on other operating entities or the Group
have to be reported to Allianz SE for pre-approval.
1
The Allianz Environmental, Social, Governance (ESG) Board and ESG office are constituted as advisor to the
Board of Management of Allianz SE and will further elevate environmental, social and governance aspects
in corporate governance and decision-making processes of Allianz Group.
C
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Risk and Opportunity Report
105
123 Controls over Financial Reporting and
Risk Capital
Risk governance
Risk ManageMent fRaMewoRk
As a provider of financial services, we consider risk management to
be one of our core competencies. It is therefore an integral part of our
business process. Our risk management framework covers, on a risk
based approach, all operations including IT, processes, products and
departments/subsidiaries within the Group. The key elements of our
risk management framework are:
− Promotion of a strong risk management culture supported by a
robust risk governance structure.
− Consistent application of an integrated risk capital framework
across the Group to protect our capital base and support effective
capital management.
− Integration of risk considerations and capital needs into man-
agement and decision-making processes through the attribution
of risk and allocation of capital to the various segments.
This comprehensive framework ensures that risks are identified, ana-
lyzed, assessed and managed in a consistent manner across the
Group. Our risk appetite is defined by a clear risk strategy and limit
structure. Close risk monitoring and reporting allows us to detect
potential deviations from our risk tolerance at an early stage at both
the Group and operating entity levels.
For the benefit of shareholders and policyholders alike, our risk
management framework adds value to Allianz SE and its operating
entities through the following four primary components:
Risk underwriting and identification: A sound risk underwriting
and identification framework forms the foundation for adequate
risk taking and management decisions such as individual trans action
approvals, new product approvals and strategic or tactical asset allo-
cations. The framework includes risk assessments, risk standards,
valuation methods and clear minimum standards for underwriting.
Risk reporting and monitoring: Our comprehensive qualitative
and quantitative risk reporting and monitoring framework provides
senior management with the transparency and risk indicators to
help them decide our overall risk profile and whether it falls within
delegated limits and authorities. For example, risk dashboards, inter-
nal risk capital allocation and limit consumption reports are regu-
larly prepared, communicated and monitored.
Risk strategy and risk appetite: Our risk strategy clearly defines
our risk appetite. It ensures that rewards are appropriate for the risks
taken and that the delegated authorities are in line with our overall
risk-bearing capacity. The risk-return profile is improved through the
integration of risk considerations and capital needs into decision-
making processes. This also keeps risk strategy and business objec-
tives consistent with each other and allows us to take opportunities
within our risk tolerance.
Communication and transparency: Finally, transparent and
robust risk disclosure provides the basis for communicating this
strategy to our internal and external stakeholders, ensuring a sus-
tainable positive impact on valuation and financing. It also strength-
ens the risk awareness and risk culture throughout the entire Group.
Risk goveRnance stRuctuRe
As a key element of our risk management framework, Allianz’s
approach to risk governance enables integrated management of our
local and global risks and ensures that our risk profile remains con-
sistent with our risk strategy and our capacity to bear risks.
Supervisory Board and Board of Management
Within our risk governance system the Supervisory Board and Board
of Management of Allianz SE have both Allianz SE and Group-wide
responsibilities and have set up committees to provide them with
support. Examples include:
Supervisory Board
The Risk Committee supervises the effectiveness of the Allianz risk
management and monitoring framework. Furthermore, it focuses on
risk-related developments as well as general risks and specific risk
exposures.
Board of Management
The Board of Management formulates business objectives and a cor-
responding, consistent risk strategy. The core elements of the risk
framework are set out in the Allianz Group Risk Policy, which is
approved by the Board of Management.
− The Group Capital Committee supports the Board of Manage-
ment with recommendations regarding risk strategy, capital
and limit allocation.
− The Group Risk Committee defines risk standards and forms the
major limit-setting authority within the framework set by the
Board of Management.
− The Group Finance Committee is authorized by the Board of
Management to oversee investment and financing activities,
including the approval of significant transactions of Allianz SE
and Allianz Group companies.
Annual Report 2013
Allianz Group
119
All business line management functions with direct profit and
loss responsibility (i.e. first line of defense, or “risk-taking units”) are
in charge of active risk-return management through adherence to
delegated limits and the operating entity policy framework. Second
line of defense functions, where possible, support business functions
in proactive risk management.
A risk function that is independent from the business line man-
agement is established by the operating entity. This function operates
under the direction of the operating entity Chief Risk Officer who is
responsible for overseeing the risk function. In addition, a local Risk
Committee supports both the operating entity Board of Management
and the Chief Risk Officer by acting as the primary risk controlling
body. Group Risk is also represented on the local Risk Committees
to enhance the risk dialogue between the Group and the operating
entities.
Other functions and bodies
In addition to Group Risk and the operating entity Risk function,
Legal and Compliance functions have been established at both
Group and operating entity level, constituting additional compo-
nents of the second line of defense.
Group Legal and Compliance seeks to mitigate legal risks with
support from other departments. Legal risks include legislative
changes, major litigation and disputes, regulatory proceedings and
contractual clauses that are unclear or construed differently by the
courts. Compliance risk is the risk of legal or regulatory sanctions,
material financial loss or loss to reputation that an undertaking may
suffer as a result of not complying with applicable laws, regulations
and administrative provisions. The objectives of Group Legal and
Compliance are to ensure that laws and regulations are observed, to
react appropriately to all impending legislative changes or new court
rulings, to attend to legal disputes and litigation, and to provide
legally appropriate solutions for transactions and business processes.
Group Legal and Compliance is in addition responsible for integrity
management – which aims to protect the Allianz Group, our operating
entities and employees from regulatory risks.
In order to adapt to a continually changing environment, the
Global Issues Forum (GIF) supports the Group in the assessment of
long-term trend changes in the risk landscape on a timely basis. As
an active participant in the Emerging Risk Initiative of the Chief Risk
Officer Forum, we monitor with other chief risk officers of major Euro-
pean insurance companies and financial conglomerates the industry-
wide risk landscape and raise awareness of major risks for the insur-
ance industry.
Overall risk organization and roles in risk management
A comprehensive system of risk governance is achieved by setting
standards related to organizational structure, risk strategy, written
policies, limit systems, documentation and reporting. These stan-
dards ensure the accurate and timely flow of risk-related information,
as well as a disciplined approach towards decision-making and
execution at both the global and local level.
As a general principle, the “first line of defense” rests with busi-
ness managers in the local operating entities and Allianz Investment
Management units. They are responsible, in the first instance, for
both the risks and returns of their decisions. Our “second line of
defense” is made up of our independent, global oversight functions
such as Risk, Compliance and Legal. Audit forms the “third line of
defense”. On a periodic basis, Group Audit independently reviews risk
governance implementation, performs quality reviews of risk pro-
cesses and tests adherence to business standards including the inter-
nal control framework.
Group Risk
Group Risk is headed by the Group Chief Risk Officer and reports to
the Board member responsible for Finance, Controlling and Risk.
Group Risk supports the aforementioned Allianz Group committees
responsible for risk oversight through the analysis and communica-
tion of risk management related information and by facilitating the
communication and implementation of committee decisions.
For example, Group Risk is operationally responsible for moni-
toring limits and accumulation of specific types of risks across busi-
ness lines, such as natural disasters and exposures to financial mar-
kets and counterparties.
In addition, Group Risk independently supports the adequacy of
the operating entity risk management through the development of a
common risk management framework and by monitoring adherence
to Group minimum requirements for methods and processes.
Group Risk strengthens and maintains the Group’s risk network
through regular and close interaction with the operating entities’
management and key areas such as the local finance, risk, actuarial
and investment departments. A strong risk network across the Group
allows us to identify risks early and bring them to the attention of
management.
Operating entities
Operating entities are responsible for their own risk management,
including adherence to both external requirements (for example,
those imposed by local regulators) and internal Group-wide standards.
The operating entities’ Board of Management is responsible for
setting and approving an operating entity risk strategy during the
annual Strategic and Planning Dialogues with the Group and ensur-
ing operating entity adherence to this risk strategy.
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Group Management Report
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Risk and Opportunity Report
105
123 Controls over Financial Reporting and
Risk Capital
Risk management priorities for 2014
In addition to maintaining our high standards and practices in day-
to-day risk management and control, we have set the following pri-
orities for 2014.
Our first priority is to continue to refine and improve our busi-
ness steering frameworks in light of the lessons learned from the
financial market uncertainty. This addresses in particular the Euro-
pean sovereign debt crisis and a sustained low interest rate environ-
ment. In addition we will reorganize our committee structure to
further strengthen our risk governance and to foster efficient risk
management decisions. In particular, we will merge the Group Risk
Committee and Group Finance Committee into a new Group Finance
and Risk Committee (GFRC). Furthermore, the Group Capital Com-
mittee will be strengthened to speed up decision processes.
Our second priority is to prepare for the Solvency II internal
model application process. To this end, we will continue to actively
participate in the pre-approval process for Solvency II with the rele-
vant European supervisors. However, given the remaining uncer-
tainty surrounding the final implementation measures and their
interpretation, we will need to adapt our internal risk capital frame-
work and risk processes as necessary to comply with the evolving
Solvency II standards. In particular, we anticipate reviewing our
transferability and fungibility restrictions, replacing the illiquidity
premium with a so-called “volatility adjustment” for the valuation of
life technical provisions, reviewing our credit and credit spread risk
approach as well as our aggregation approach, each of which may
have an impact on our internal model solvency ratio.
Our third priority is to ensure that we also meet the emerging
requirements being defined for G-SIIs, focusing especially in 2014 on
developing a Recovery Plan.
Further future challenges
and opportunities1
The success of our business is heavily affected by a variety of global,
long-term issues. To ensure our sustainable and profitable growth,
our strategy places a high priority on monitoring, analyzing and
responding to the challenges and opportunities these issues present,
today and tomorrow.
By consistently following our Group strategy, we are confident
that the Allianz Group is in a privileged position to build on this trust
and deal with the challenges and opportunities ahead.
Key challenges and opportunities, as we see them, are outlined
below.
1
For further information on the Cautionary note regarding forward-looking statements, please refer to the
chapter Outlook 2014 from page 87 onwards.
cliMate change and societal challenges
Global warming threatens to change our climate. We are well aware
that climate change could result in a range of compound risks and
opportunities that affect our entire business. We have been imple-
menting a Group-wide strategy covering climate-related risks and
opportunities for our business and our customers. We finance and
insure low-carbon energy projects, such as wind and solar, offer cus-
tomers Green Solutions and provide them with advice on weather-
related risk reduction. We incorporate environmental, social and
governance factors into our asset management and reduce and offset
our own carbon emissions.
Demographic changes are creating both opportunities and chal-
lenges for financial services providers. While the urban populations
of Asia and Africa are expanding and their middle classes growing,
Western populations are aging and their workforces shrinking. With
more people over 60 years old than ever before, and declining birth
rates, social security systems are under pressure and demand is
growing for additional pension provisions. We are responding to
these trends through integrated asset management and insurance
solutions. Our solid market position in continental Europe and the
United States, as well as our strong brand and well-diversified product
portfolio put us in an excellent position to further benefit from pro-
viding products and services for old-age, health care and assistance.
In emerging economies, the need for formal social security sys-
tems is growing due to the weakening of traditional family ties and
support networks. From life to health and crop insurance, our growing
microinsurance portfolio helps low-income families in developing
countries to protect themselves against and better manage the risks
in life to build a more secure future. Although financial returns from
microinsurance are much lower than from traditional products, we
believe that satisfied microinsurance policyholders will bring a mid-
to long-term return on investment as many of them move up the
economic ladder and graduate towards more regular Allianz products.
The evolution of the digital world has dramatically changed the
way customers consume media, search for information or recom-
mendations and buy products. Social networks and other online
channels are gaining in importance. In parallel, expectations of ser-
vice levels are increasing. We are continuously adapting to this new
digital lifestyle to stay connected with our stakeholders and improve
customer service. In the framework of the Allianz Digital Target Picture
program we leverage the opportunities that changing customer pref-
erences provide.
For more information, please refer to the chapter Progress in
Sustainable Development from
page 59 onwards.
Annual Report 2013
Allianz Group
121
Capital allocation, ensuring that capital is available and allo-
cated appropriately to finance growth initiatives and leveraging the
Group's diversification benefits: In 2013, through our focus on capital
allocation, we increased dividend payments from our operating
entities to further allow the Group to support the financing of growth
initiatives. The introduction of further refined return on capital metrics
at the level of lines of business further supports the Group’s strategic
decision making.
Leverage Group synergies: We continue to leverage Group syner-
gies via know-how and best practice sharing in underwriting, product
development and operations through Global Property-Casualty and
Global Life/Health units. At the same time, we are further developing
shared services in various areas, especially in Operations and Finance.
Numerous internal efforts are ongoing to identify improvement
potentials and share best practices, e.g. in Operations and in Claims
Management. In Human Resources, we are strengthening our efforts
for international rotation of talents.
Strategic Investments: Strategic investments also open up new
business opportunities. For example, Allianz is growing its Business
to Business to Customer (b2b2C) area. By pairing up value proposi-
tions – Automotive with Roadside Assistance, and International
Health with Corporate Assistance – under the roof of Allianz World-
wide Partners, we are taking a distinctive position in the b2b2C market.
One major advantage for us is to extend agreements with distributors
across global markets in a seamless manner. Allianz also operates an
incubator to develop and pilot innovative ideas before they are imple-
mented across the Group.
RegulatoRy and legal changes
The insurance industry is faced with increased regulation in devel-
oped markets, for example Solvency II in the European Union and the
systemic risk discussions (G-SII) led by the Financial Stability Board.
In July 2013, Allianz was identified as global systemically impor-
tant insurer (G-SII). Policy measures applicable to G-SIIs include
recovery and resolution planning requirements, enhanced group-
wide supervision and – most likely – harmonized and potentially
higher capital requirements. In any event, administrative costs relat-
ing to recovery and resolution planning measures will increase.
In addition, Solvency II in particular may heavily impact long-
term savings businesses and may also make investments in equities
and other asset classes less attractive.
However, these regulatory trends could open up major opportu-
nities as greater capital needs and regulation may lead to sector con-
solidation where only financially sound insurance companies will
survive.
Risk and oPPoRtunity ManageMent
stRategic investMents
As previously described, the Group has a well-established strategy
and planning process with all Group operating entities which allows
us to understand and respond to local risks and opportunities. This
strong diversification across markets, business segments and cus-
tomer groups gives Allianz a powerful lever to identify new opportu-
nities and manage risks.
In addition to these joint efforts, Allianz has built four opera-
tional and strategic pillars to help the Group create opportunities on
a wider basis:
Digitalization, enabling us to take advantage of new products
through channels to new markets at lower cost: Digitalization is one
of our major ongoing Group initiatives and affects all areas of Allianz,
including our customers and our employees. This initiative spans
everything from the design of new modular products, to new forms
of access, to servicing existing customers in a better way. For example
we are developing web-based and multi-access customer interaction
tools to address changing customer behaviors. On the operational
side, we are harmonizing systems across the Group to reduce com-
plexity and improve efficiency. We are making considerable progress
in this Group-wide digital transformation program and will invest
approximately € 300 Mn in 2014 to build reusable assets in the three
areas of the Allianz Digital Target Picture: Customer Interaction, Ana-
lytics & Products and Productivity. These initiatives are based on
multi-year strategic infrastructure programs. Allianz will invest
approximately € 200 Mn in 2014 focused primarily on the consolidation
of data center operations worldwide and on the implementation of a
private global network. Digitalization is also the basis for enhanced
management information systems to improve steering. When driv-
ing digitalization, security and data confidentiality remain a major
priority.
122
Annual Report 2013
Allianz Group
C
Group Management Report
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Risk and Opportunity Report
105
123 Controls over Financial Reporting and
Risk Capital
Controls over Financial Reporting and Risk Capital
Statements pursuant to § 289 (5) and § 315 (2) no. 5 of the German Commercial
Code (“Handelsgesetzbuch – HGB”) and explanatory report.
accountIng and consolIdatIon processes
The accounting and consolidation processes we use to produce con-
solidated financial statements are based on a central consolidation
and reporting IT solution and local general ledger solutions. The latter
are largely harmonized throughout the Group, using standardized
processes, master data, posting logics and interfaces for data delivery
to the Holding. Access rights to accounting systems are managed
according to strict authorization procedures.
Accounting rules for the classification, valuation and disclosure
of all items in the balance sheet, income statement and related notes
of the annual and interim financial statements are primarily defined
in our Group accounting manual. Internal controls are embedded in
the accounting and consolidation processes to safeguard the accu-
racy, completeness and consistency of the information provided in
the financial statements.
Internal controls over financial reporting
In line with both our prudent approach to risk governance and com-
pliance with regulatory requirements, we have created a structure to
identify and mitigate the risk of material errors in our consolidated
financial statements. Our internal control system over financial
reporting (ICOFR) is based on the framework developed by the Com-
mittee of Sponsoring Organizations of the Treadway Commission
(COSO) in the year 1992 and is regularly reviewed and updated. Our
approach also includes the following five interrelated components:
Control Environment, Risk Assessment, Control Activities, Informa-
tion and Communication, and Monitoring. These five components
are covered by an Entity Level Control Assessment Process (ELCA), IT
General Controls (ITGC) and controls at process levels. The ELCA
framework contains controls such as a compliance program or com-
mittee governance structure. In the ITGC framework we implemented,
for example, controls regarding access right management or project
and change management controls.
Internal control system approach
Internal control system approach
Scoping
Identify risks
Implement key controls
Assessment
Determination of significant accounts
and operating entities to be covered by
system of internal control.
Identification of risk scenarios that
could result in a material financial
misstatement.
Implementation of key controls
that prevent or detect errors or
fraud resulting from risk scenarios.
Assessment of the design and operating
effectiveness of key controls.
process
Our approach can be summarized as follows:
− We use a top-down, risk-based approach to determine the
accounts and operating entities that should fall under the scope
of our internal control system over financial reporting. The meth-
odology is described in our ICOFR manual. During the scoping
process, materiality and susceptibility to a misstatement are
considered simultaneously. The final results are documented in
the list of operating entities under the scope of ICOFR as well as
in the list of significant accounts. In addition to the quantitative
ICOFR calculation we also consider qualitative criteria – such as
expected increase in business volume – which are provided by
different Group Centers, Group Audit and external Audit.
− Then, our local entities identify risks that could lead to material
financial misstatements including all relevant root causes (i.e.
human processing errors, fraud, system weaknesses, external
factors, etc.). After identifying and analyzing the risks the potential
impacts and occurrence probabilities are evaluated.
Annual Report 2013
Allianz Group
123
Risk capital controls
Similar to our ICOFR framework, we have also established a robust
and comprehensive control concept in the risk capital calculation and
aggregation process, since our internal risk capital calculations
incorporate economic factors that are not fully reflected in the
accounting results. We have put in place additional controls within
our management reporting processes to ensure that these additional
estimates are adequately controlled.
These controls include the validation of models and assump-
tions by independent reviews and continuous benchmarking to market
and/or peer assumptions and practices. We benchmark and explain
our non-market assumptions against practices in the industry,
actuarial associations and guidance from supervisory authorities.
During 2013, we worked on further improving the internal con-
trol environment around the computation of our internal risk capital
in anticipation of the future Solvency II regime. We will continue to
make refinements as the Solvency II requirements evolve.
− Preventive and detective key controls over the financial reporting
process are put in place to reduce the likelihood and the impact
of financial misstatements. If a potential risk materializes,
actions are taken to reduce the impact of the financial misstate-
ment. Given the strong dependence of financial reporting pro-
cesses upon information technology systems, we also include IT
controls.
− Finally, we focus on ensuring that controls are appropriately
designed and effectively executed. We have set consistent docu-
mentation requirements across the Allianz Group for elements
such as processes, related key controls and their execution. We
conduct an annual assessment of our control system to maintain
and continuously enhance its effectiveness. Group Audit and
local internal audit functions ensure that the overall quality of
our control system is subjected to regular control-testing, to
assure reasonable design and operating effectiveness. Internal
Audit does so through a comprehensive risk-based approach,
which holistically assesses the key controls of the company’s
internal procedures and processes, including local and Group
internal controls over financial reporting.
governance
Responsibility for ensuring the completeness, accuracy and reliability
of our consolidated financial statements rests with the Chairman of
the Board of Management and the board member responsible for
Finance, Controlling and Risk of Allianz SE, supported by Group Center
functions, the Group Disclosure Committee and operating entities.
The Group Disclosure Committee ensures that these board
members are made aware of all material information that could
affect our disclosures and assesses the completeness and accuracy
of the information provided in the quarterly and annual financial
reports. The committee meets on a quarterly basis before the financial
reports are issued.
Subsidiaries within the scope of our control system are individu-
ally responsible for adhering to the Group’s internal control policy
and for creating local Disclosure Committees that are similar to the
Group-level committee. The entities’ CEOs and CFOs provide periodic
sign-offs to the management of Allianz SE, certifying the effectiveness
of their local system of internal controls as well as the completeness,
accuracy and reliability of financial data reported to the Holding.
Further control mechanIsms
In our opinion, a strong internal control environment is key to man-
age our company successfully and to reinforce trust with our stake-
holders. In addition to ICOFR, for example, we have implemented an
enhanced internal control environment across our largest Life insur-
ance operating entities for the Market Consistent Embedded Value
(MCEV) reporting process.
124
Annual Report 2013
Allianz Group
Armin Sandhövel,
CEO Allianz Climate Solutions,
Germany
* One success factOr in business is
wOrking with nature. nOt against it.
Our goal is to continually improve our
service while doing business in a
responsible way. For that reason, we
have always attached great impor-
tance to forward-looking investments,
which lay the foundations for profit-
able and sustainable growth in our
segments.
D _ cOnsOliDateD
financial statements
127 Consolidated BalanCe sheets
128 Consolidated inCome statements
129
130
131
Consolidated statements of Comprehensive inCome
Consolidated statements of Changes in equity
Consolidated statements of Cash flows
134
notes to the Consolidated finanCial statements
General Information
Notes to the Consolidated Income Statements
Pages 126 – 242
134
134
143
147
150
154
1 Nature of operations and basis of presentation
2 Summary of significant accounting policies
3 Use of estimates and assumptions
4
Recently adopted and issued accounting pronouncements and
changes in the presentation of the consolidated financial statements
5 Consolidation
6 Segment reporting
Notes to the Consolidated Balance Sheets
168
168
168
172
172
173
174
176
176
181
181
182
182
187
190
191
192
193
193
Financial assets carried at fair value through income
Investments
Loans and advances to banks and customers
Non-current assets classified as held for sale
Intangible assets
Financial liabilities carried at fair value through income
Liabilities to banks and customers
7 Cash and cash equivalents
8
9
10
11 Reinsurance assets
12 Deferred acquisition costs
13 Other assets
14
15
16
17
18 Unearned premiums
19 Reserves for loss and loss adjustment expenses
20 Reserves for insurance and investment contracts
21
Financial liabilities for unit-linked contracts
22 Other liabilities
23 Certificated liabilities
24
25
Subordinated liabilities
Equity
126
annual report 2013
allianz group
196
196
197
198
198
198
199
200
200
201
201
201
201
201
202
202
202
26 Premiums earned (net)
27
28
Interest and similar income
Income from financial assets and liabilities carried
at fair value through income (net)
Fee and commission income
29 Realized gains/losses (net)
30
31 Other income
32
Income and expenses from fully consolidated
private equity investments
33 Claims and insurance benefits incurred (net)
34
Change in reserves for insurance and investment
contracts (net)
Interest expenses
Loan loss provisions
Impairments of investments (net)
Investment expenses
35
36
37
38
39 Acquisition and administrative expenses (net)
40
41 Other expenses
42
Income taxes
Fee and commission expenses
Other Information
205
207
218
218
222
225
228
230
230
232
233
240
241
Financial instruments and fair value measurement
43 Derivative financial instruments
44
45 Related party transactions
46
Contingent liabilities, commitments, guarantees,
and assets pledged and collateral
47 Pensions and similar obligations
48 Share-based compensation plans
49 Restructuring plans
50
Earnings per share
51 Other information
52 Subsequent events
List of participations of the Allianz Group as of
31 December 2013 according to § 313 (2) HGB
Responsibility statement
Auditor’s report
D
Consolidated Financial Statements
127 Consolidated Balance Sheets
128 Consolidated Income Statements
129 Consolidated Statements of
Comprehensive Income
130 Consolidated Statements of
134 Notes to the Consolidated Financial
Changes in Equity
Statements
131 Consolidated Statements of
Cash Flows
Consolidated balanCe sheets
consolidated balance sheets
€ mn
assets
Cash and cash equivalents
Financial assets carried at fair value through income 1
Investments 2
Loans and advances to banks and customers
Financial assets for unit-linked contracts
Reinsurance assets
Deferred acquisition costs
Deferred tax assets
Other assets
Non-current assets classified as held for sale
Intangible assets
Total assets
liabilities and eQUitY
Financial liabilities carried at fair value through income
Liabilities to banks and customers
Unearned premiums
Reserves for loss and loss adjustment expenses
Reserves for insurance and investment contracts
Financial liabilities for unit-linked contracts
Deferred tax liabilities
Other liabilities
Certificated liabilities
Subordinated liabilities
Total liabilities
Shareholders’ equity
Non-controlling interests
Total equity
Total liabilities and equity
as of
31 December
2013
as of
31 December
2012
as of
1 January
2012
Note
7
8
9
10
11
12
42
13
14
15
16
17
18
19
20
21
42
22
23
24
25
11,207
7,245
411,015
116,800
81,064
12,609
22,203
1,508
34,632
147
13,100
711,530
6,013
23,109
18,212
66,566
12,437
7,283
401,628
119,369
71,197
13,254
19,452
1,526
35,196
15
13,090
694,447
5,397
22,425
17,939
72,540
10,492
8,466
350,645
124,738
63,500
12,874
20,772
2,474
34,043
14
13,304
641,322
6,610
22,155
17,255
68,832
404,072
390,985
361,956
81,064
3,178
36,883
8,030
11,554
71,197
4,035
37,392
7,960
11,614
63,500
3,414
33,031
7,649
11,173
658,681
641,484
595,575
50,084
2,765
52,849
50,388
2,575
52,963
43,457
2,290
45,747
711,530
694,447
641,322
1
As of 31 December 2013 and 2012, no financial assets carried at fair value through income are pledged to
creditors and can be sold or repledged.
2
As of 31 December 2013, € 2,112 mn (2012: € 2,460 mn) are pledged to creditors and can be sold or
repledged.
Annual Report 2013
Allianz Group
127
Consolidated inCome statements
consolidated income statements
€ mn
Gross premiums written
Ceded premiums written
Change in unearned premiums
Premiums earned (net)
Interest and similar income
Income from financial assets and liabilities carried at fair value through income (net)
Realized gains/losses (net)
Fee and commission income
Other income
Income from fully consolidated private equity investments
Total income
Claims and insurance benefits incurred (gross)
Claims and insurance benefits incurred (ceded)
Claims and insurance benefits incurred (net)
Change in reserves for insurance and investment contracts (net)
Interest expenses
Loan loss provisions
Impairments of investments (net)
Investment expenses
Acquisition and administrative expenses (net)
Fee and commission expenses
Amortization of intangible assets
Restructuring charges
Other expenses
Expenses from fully consolidated private equity investments
Total expenses
Income before income taxes
Income taxes
Net income
Net income attributable to:
Non-controlling interests
Shareholders
Basic earnings per share (€)
Diluted earnings per share (€)
128
Annual Report 2013
Allianz Group
Note
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
15
49
41
32
42
50
50
2013
72,051
(4,541)
(882)
66,628
20,918
(1,842)
4,285
10,492
209
726
2012
72,086
(5,336)
(705)
66,045
21,084
(511)
4,327
9,812
214
788
101,416
101,759
(50,178)
(51,744)
2,376
(47,802)
(13,990)
(1,322)
(86)
(611)
(905)
(22,865)
(3,038)
(136)
(170)
(106)
(741)
2,871
(48,873)
(14,360)
(1,477)
(111)
(934)
(876)
(22,046)
(2,895)
(259)
(268)
(94)
(847)
(91,772)
(93,040)
9,644
(3,300)
6,344
8,719
(3,161)
5,558
348
5,996
13.23
13.05
327
5,231
11.56
11.48
D
Consolidated Financial Statements
127 Consolidated Balance Sheets
128 Consolidated Income Statements
129 Consolidated Statements of
Comprehensive Income
130 Consolidated Statements of
134 Notes to the Consolidated Financial
Changes in Equity
Statements
131 Consolidated Statements of
Cash Flows
Consolidated statements of Comprehensive inCome
consolidated statements of comprehensive income
€ mn
Net income
Other comprehensive income
Items that may be reclassified to profit or loss in future periods
Foreign currency translation adjustments
Reclassifications to net income
Changes arising during the year
Subtotal
Available-for-sale investments
Reclassifications to net income
Changes arising during the year
Subtotal
Cash flow hedges
Reclassifications to net income
Changes arising during the year
Subtotal
Share of other comprehensive income of associates
Reclassifications to net income
Changes arising during the year
Subtotal
Miscellaneous
Reclassifications to net income
Changes arising during the year
Subtotal
Items that may never be reclassified to profit or loss
Actuarial gains and losses on defined benefit plans (see note 4)
Total other comprehensive income
2013
6,344
2012
5,558
(1)
(1,305)
(1,306)
(817)
(2,537)
(3,354)
10
(63)
(53)
–
(82)
(82)
–
105
105
362
(4,328)
–
(84)
(84)
(689)
6,270
5,581
(2)
67
65
(1)
10
9
–
175
175
(1,816)
3,930
Total comprehensive income
2,016
9,488
Total comprehensive income attributable to:
Non-controlling interests
Shareholders
310
1,706
524
8,964
For further details concerning income taxes relating to components
of the other comprehensive income, please see note 42.
Annual Report 2013
Allianz Group
129
Consolidated statements of Changes in equity
consolidated statements of changes in eQUitY
€ mn
Balance as of 1 January 2012, as previously reported
Adjustments (see note 4)
Balance as of 1 January 2012, as reported
Total comprehensive income 1
Paid-in capital
Treasury shares
Transactions between equity holders
Dividends paid
Balance as of 31 December 2012
Total comprehensive income 1
Paid-in capital
Treasury shares
Transactions between equity holders
Dividends paid
Paid-in capital
28,763
–
28,763
–
52
–
–
–
28,815
–
55
–
–
–
Balance as of 31 December 2013
28,870
Foreign
currency
translation
adjustments
Unrealized
gains and losses
(net)
Shareholders’
equity
Non-
controlling
interests
Total equity
(1,996)
(1)
(1,997)
(84)
–
–
8
–
4,626
–
4,626
5,493
–
–
3
–
(2,073)
(1,234)
10,122
(3,382)
–
–
(5)
–
–
–
1
–
(3,312)
6,741
44,915
(1,458)
43,457
8,964
52
5
(53)
(2,037)
50,388
1,706
55
(2)
(24)
(2,039)
50,084
2,338
(48)
2,290
524
–
–
(62)
(177)
2,575
310
–
–
144
(264)
2,765
47,253
(1,506)
45,747
9,488
52
5
(115)
(2,214)
52,963
2,016
55
(2)
120
(2,303)
52,849
Retained
earnings
13,522
(1,457)
12,065
3,555
–
5
(64)
(2,037)
13,524
6,322
–
(2)
(20)
(2,039)
17,785
1
Total comprehensive income in shareholders’ equity for the year ended 2013 comprises net income
attributable to shareholders of € 5,996 mn (2012: € 5,231 mn).
130
Annual Report 2013
Allianz Group
D
Consolidated Financial Statements
127 Consolidated Balance Sheets
128 Consolidated Income Statements
129 Consolidated Statements of
Comprehensive Income
130 Consolidated Statements of
134 Notes to the Consolidated Financial
Changes in Equity
Statements
131 Consolidated Statements of
Cash Flows
Consolidated statements of Cash flows
consolidated statements of cash flows
€ mn
sUmmarY
Net cash flow provided by operating activities
Net cash flow used in investing activities
Net cash flow used in financing activities
Effect of exchange rate changes on cash and cash equivalents
Change in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period
cash flow from operating activities
Net income
Adjustments to reconcile net income to net cash flow provided by operating activities
Share of earnings from investments in associates and joint ventures
Realized gains/losses (net) and impairments of investments (net) of:
2013
2012
23,239
(22,802)
(1,435)
(232)
(1,230)
12,437
11,207
18,888
(14,860)
(2,036)
(47)
1,945
10,492
12,437
6,344
5,558
(146)
(143)
Available-for-sale and held-to-maturity investments, investments in associates and joint ventures, real estate held for investment,
loans and advances to banks and customers
(3,674)
(3,393)
Other investments, mainly financial assets held for trading and designated at fair value through income
Depreciation and amortization
Loan loss provisions
Interest credited to policyholder accounts
Net change in:
Financial assets and liabilities held for trading
Reverse repurchase agreements and collateral paid for securities borrowing transactions
Repurchase agreements and collateral received from securities lending transactions
Reinsurance assets
Deferred acquisition costs
Unearned premiums
Reserves for loss and loss adjustment expenses
Reserves for insurance and investment contracts
Deferred tax assets/liabilities
Other (net)
Subtotal
Net cash flow provided by operating activities
920
1,108
86
4,163
300
227
95
(207)
(720)
832
(1,071)
12,005
375
2,602
16,895
23,239
518
1,124
111
4,790
(1,755)
256
724
(266)
(656)
766
1,101
9,162
(68)
1,059
13,330
18,888
Annual Report 2013
Allianz Group
131
Consolidated statements of Cash flows – Continued
2013
2012
1,451
120,354
2,076
124,720
836
457
24
663
9,863
200
133,848
990
211
276
425
11,424
229
140,351
(860)
(1,121)
(143,928)
(144,354)
(653)
(850)
–
(1,504)
(6,940)
(1,484)
(1,012)
(538)
(229)
(1,112)
(5,811)
(1,607)
(156,219)
(155,784)
81
(416)
(695)
599
–
(8)
330
251
(22,802)
(14,860)
873
6,236
(419)
9,084
(6,204)
(8,315)
47
13
(2,303)
7
(104)
(1,435)
44
(115)
(2,214)
6
(107)
(2,036)
consolidated statements of cash flows
€ mn
cash flow from investing activities
Proceeds from the sale, maturity or repayment of:
Financial assets designated at fair value through income
Available-for-sale investments
Held-to-maturity investments
Investments in associates and joint ventures
Non-current assets classified as held for sale
Real estate held for investment
Loans and advances to banks and customers (purchased loans)
Property and equipment
Subtotal
Payments for the purchase or origination of:
Financial assets designated at fair value through income
Available-for-sale investments
Held-to-maturity investments
Investments in associates and joint ventures
Non-current assets classified as held for sale
Real estate held for investment
Loans and advances to banks and customers (purchased loans)
Property and equipment
Subtotal
Business combinations (note 5):
Proceeds from sale of subsidiaries, net of cash disposed
Acquisitions of subsidiaries, net of cash acquired
Change in other loans and advances to banks and customers (originated loans)
Other (net)
Net cash flow used in investing activities
cash flow from financing activities
Net change in liabilities to banks and customers
Proceeds from the issuance of certificated liabilities and subordinated liabilities
Repayments of certificated liabilities and subordinated liabilities
Cash inflow from capital increases
Transactions between equity holders
Dividends paid to shareholders
Net cash from sale or purchase of treasury shares
Other (net)
Net cash flow used in financing activities
132
Annual Report 2013
Allianz Group
D
Consolidated Financial Statements
127 Consolidated Balance Sheets
128 Consolidated Income Statements
129 Consolidated Statements of
Comprehensive Income
130 Consolidated Statements of
134 Notes to the Consolidated Financial
Changes in Equity
Statements
131 Consolidated Statements of
Cash Flows
Consolidated statements of Cash flows – Continued
consolidated statements of cash flows
€ mn
sUpplementarY information on the consolidated statements of cash flows
Income taxes paid
Dividends received
Interest received
Interest paid
2013
2012
(3,672)
1,355
18,657
(1,308)
(2,233)
1,156
18,975
(1,503)
Annual Report 2013
Allianz Group
133
Notes to the Consolidated Financial Statements
General InformatIon
1 – Nature of operations
and basis of presentation
Nature of operatioNs
Allianz SE and its subsidiaries (the Allianz Group) maintain Property-
Casualty insurance, Life/Health insurance and Asset Management
operations in over 70 countries, with the largest of its operations in
Europe. The Allianz Group’s headquarters and Allianz SE as its parent
company are located in Munich, Germany. Allianz SE is recorded in
the Commercial Register of the municipal court in Munich under its
registered address at Koeniginstraße 28, 80802 Munich.
Allianz SE is a stock corporation in the form of a European Com-
pany (Societas Europaea). Allianz SE shares are listed on all German
stock exchanges and Allianz SE American Depositary Receipts (ADRs)
are traded in the U.S. over the counter on OTCQX.
The consolidated financial statements of the Allianz Group for
the year ended 31 December 2013 were authorized for issue by the
Board of Management on 24 February 2014.
Basis of preseNtatioN
The consolidated financial statements of the Allianz Group have
been prepared in conformity with International Financial Reporting
Standards (IFRS), as adopted under European Union (E.U.) regula-
tions in accordance with § 315a of the German Commercial Code
(HGB). Within these consolidated financial statements, the Allianz
Group has applied all standards and interpretations issued by the
IASB and endorsed by the E.U. that are compulsory as of 31 December
2013. IFRS comprise International Financial Reporting Standards
(IFRS), International Accounting Standards (IAS) and interpretations
developed by the IFRS Interpretations Committee (formerly called the
IFRIC) or the former Standing Interpretations Committee (SIC).
IFRS do not provide specific guidance concerning all aspects of
the recognition and measurement of insurance contracts, reinsur-
ance contracts and investment contracts with discretionary partici-
pation features. Therefore, as envisioned in IAS 8, Accounting Policies,
Changes in Accounting Estimates and Errors, to those aspects where
specific guidance is not provided by IFRS 4, Insurance Contracts, the
provisions embodied under accounting principles generally accepted
in the United States of America (US GAAP) as at first-time adoption of
IFRS 4 on 1 January 2005 have been applied.
The accounting policies adopted are consistent with those of the
previous financial year, except for recently adopted IFRS effective
1 January 2013.
134
Annual Report 2013
Allianz Group
The consolidated financial statements are prepared as of and for
the year ended 31 December and presented in millions of Euro (€),
unless otherwise stated.
2 – Summary of significant
accounting policies
priNCipLes of CoNsoLiDatioN
Scope of consolidation
In line with IAS 27 and SIC 12, the consolidated financial statements
of the Allianz Group comprise the financial statements of Allianz SE,
its subsidiaries and certain investment funds and special purpose
entities (SPEs). Subsidiaries, investment funds and SPEs, hereafter
“subsidiaries”, which are directly or indirectly controlled by the Allianz
Group, are consolidated. Control exists when the Allianz Group has
the power to govern the financial and operating policies of the sub-
sidiary generally either when the Allianz Group owns directly or indi-
rectly more than half of the voting rights of the subsidiary or when
control can be legally evidenced otherwise because of an agreement
with other investors or of a specific corporate charter. In order to
determine whether control exists, potential voting rights that are cur-
rently exercisable or convertible are taken into consideration. If no
control exists from a legal perspective, it is assessed whether control
exists from an economic perspective, as in the case of SPEs.
Subsidiaries are consolidated as from the date on which control
is obtained by the Allianz Group. Subsidiaries are consolidated up to
the date on which the Allianz Group no longer maintains control.
Accounting policies of subsidiaries have been adjusted where neces-
sary to ensure consistency with the accounting policies adopted by
the Allianz Group. The effects of intra-Allianz Group transactions
have been eliminated.
Third-party assets held in an agency or fiduciary capacity are not
assets of the Allianz Group and are not presented in these consoli-
dated financial statements.
Business combinations including acquisitions
and disposals of non-controlling interests
Business combinations are accounted for using the acquisition
method. Non-controlling interests in the acquiree can be measured
either at the acquisition date fair value or at the non-controlling
interest’s proportionate share of the acquired’s identifiable net
assets. This option is exercised on a case-by-case basis.
D
Consolidated Financial Statements
127 Consolidated Balance Sheets
128 Consolidated Income Statements
129 Consolidated Statements of
Comprehensive Income
130 Consolidated Statements of
134 Notes to the Consolidated Financial
Changes in Equity
Statements
131 Consolidated Statements of
Cash Flows
Investments in associates and joint ventures
In general, if the Allianz Group holds 20 % or more of voting power in
an investee but does not control the investee, it assumes to exercise
significant influence, unless it can be clearly demonstrated that this
is not the case. Investments in associates over which the Allianz
Group exercises significant influence are generally accounted for
using the equity method.
Joint ventures are entities over which the Allianz Group and one
or more other parties have joint control. Joint ventures are generally
accounted for using the equity method.
The Allianz Group accounts for all material investments in asso-
ciates on a time lag of no more than three months. Income from
investments in associates and joint ventures, which reflects the earn-
ings rather than the distributions of the associate or jointly con-
trolled entity, is included in interest and similar income. Profits or
losses resulting from transactions between the Allianz Group and the
associate or joint venture are eliminated to the extent of the interest
in the associate or joint venture. Accounting policies of associates
and joint ventures have been adjusted where necessary to ensure
consistency with the accounting policies adopted by the Allianz
Group.
foreiGN CurreNCY traNsLatioN
Translation from any foreign currency
into functional currency
The individual financial statements of each of the Allianz Group’s
subsidiaries are prepared in the prevailing currency in the primary
economic environment where the subsidiary conducts its ordinary
activities (its functional currency). Transactions recorded in curren-
cies other than the functional currency (foreign currencies) are
recorded at the exchange rate prevailing on the date of the trans-
action. At the balance sheet date, monetary assets and liabilities
denominated in foreign currencies are translated into the functional
currency using the closing exchange rate. Non-monetary assets and
liabilities denominated in foreign currencies that are measured at
historical cost are translated at historical rates and non-monetary
items that are measured at fair value are translated using the closing
rate. Foreign currency gains and losses arising from foreign currency
transactions are reported in income from financial assets and liabil-
ities carried at fair value through income (net), except when the gain
or loss on a non-monetary item measured at fair value is recognized
in other comprehensive income. In this case, any foreign exchange
component of that gain or loss is also recognized in other compre-
hensive income.
Translation to the presentation currency
For the purposes of the consolidated financial statements, the results
and financial position of each of the Allianz Group’s subsidiaries are
expressed in Euro, the presentation currency of the Allianz Group.
Assets and liabilities of subsidiaries not reporting in Euro are trans-
lated at the closing rate on the balance sheet date and income and
expenses are translated at the quarterly average exchange rate. Any
foreign currency translation differences, including those arising
from the equity method, are recorded in other comprehensive
income.
priNCipLes of aCCouNtiNG for fiNaNCiaL assets
Recognition
Financial assets are generally recognized and derecognized on the
trade date, i.e. when the Allianz Group commits to purchase or sell
securities or incur a liability.
Financial instruments are initially recognized at fair value plus,
in the case of financial instruments not carried at fair value through
income, directly attributable transaction costs.
Offsetting
Financial assets and liabilities are offset and the net amount pre-
sented in the balance sheet only when there is a legally enforceable
right to offset the recognized amounts and there is an intention to
either settle on a net basis, or to realize the asset and settle the liabil-
ity simultaneously.
Derecognition
A financial asset is derecognized when the contractual rights to the
cash flows from the financial asset expire or the Allianz Group trans-
fers the asset and substantially all of the risks and rewards of owner-
ship. A financial liability is derecognized when it is extinguished.
Securities lending and repurchase agreements
The Allianz Group enters into securities lending transactions and
repurchase agreements. If all of the risks and rewards of the securi-
ties remain substantially with the Allianz Group these securities are
not derecognized. Cash received as collateral in securities lending
transactions is recognized together with a corresponding liability,
whereas securities received as collateral are not recognized under
the terms of the agreements if risks and rewards have not been trans-
ferred.
For repurchase agreements, the proceeds received from the sale
are reported under liabilities to banks or customers. Interest expen-
ses from repo transactions are accrued over the duration of the agree-
ments and reported in interest expenses. If for reverse repo trans-
actions all of the risks and rewards of the securities remain
substantially with the counterparty over the entire lifetime of the
agreement of the transaction, the securities concerned are not recog-
nized as assets. The amounts of cash disbursed are recorded under
loans and advances to banks and customers. Interest income on
reverse repo agreements is accrued over the duration of the agree-
ments and is reported in interest and similar income.
Annual Report 2013
Allianz Group
135
Securities borrowing transactions generally require the Allianz
Group to deposit cash with the security’s lender. Fees paid are reported
as interest expenses.
Impairment of available-for-sale and held-to-maturity
investments as well as loans and advances to banks and
customers
A held-to-maturity or available-for-sale debt security, as well as a
loan, is impaired if there is objective evidence that a loss event has
occurred after initial recognition of the security and up to the rele-
vant date of the Allianz Group’s consolidated balance sheet, and that
loss event has negatively affected the estimated future cash flows, i.e.
amounts due according to the contractual terms of the security are
not considered collectible. For available-for-sale debt securities, the
cumulative loss recognized in the other comprehensive income is
reclassified to profit or loss. The cumulative loss corresponds to the
difference between amortized cost and the current fair value of the
investment. Further declines in fair value are recognized in other
comprehensive income unless there is further objective evidence
that such declines are due to a credit-related loss event. If in subse-
quent periods objective evidence results in a fair value increase after
the impairment loss was recognized, the impairment loss is reversed
through the income statement. The reversal is measured as the less-
er of the full original impairment loss previously recognized in the
income statement and the subsequent increase in fair value. For
held-to-maturity investments and loans, the impairment loss is mea-
sured as the difference between the amortized cost and the expected
future cash flows using the original effective interest rate. If the
amount of the impairment of a held-to-maturity debt security or a
loan subsequently increases or decreases due to an event occurring
after the initial measurement of impairment, the change is recorded
in the income statement.
For banking entities, valuation allowances of their loan book are
reported as loan loss allowances. For all non-banking entities, loans
to banks and customers have investment character and valuation
allowances are reported as ‘impairments of investments’. For the
loan loss allowance reported by banking entities, please refer to notes
10 and 36. Allowances for loans to banks and customers by non-ban-
king entities are reported in note 37.
An available-for-sale equity security is considered to be impaired
if there is objective evidence that the cost may not be recovered.
Objective evidence that the cost may not be recovered, in addition to
qualitative impairment criteria, includes a significant or prolonged
decline in the fair value below cost. The Allianz Group’s policy consid-
ers a decline to be significant if the fair value is below the weighted
average cost by more than 20 %. A decline is considered to be pro-
longed if the fair value is below the weighted average cost for a period
of more than nine months. If an available-for-sale equity security is
impaired, any further declines in the fair value at subsequent report-
ing dates are recognized as impairments. Therefore, at each reporting
period, for an equity security that was determined to be impaired,
additional impairments are recognized for the difference between
the fair value and the original cost basis, less any previously recog-
nized impairment. Reversals of impairments of available-for-sale
equity securities are not recorded through the income statement but
recycled out of other comprehensive income when sold.
Please refer to note 3, where the processes and controls for
ensuring an appropriate use of estimates and assumptions are
explained.
Hedge accounting
For derivative financial instruments used in hedge transactions that
meet the criteria for hedge accounting, the Allianz Group designates
the derivative as a hedging instrument in a fair value hedge, cash flow
hedge, or hedge of a net investment in a foreign entity. The Allianz
Group documents the hedge relationship, as well as its risk manage-
ment objective and strategy for entering into the hedge transaction.
The Allianz Group assesses, both at the hedge’s inception and on an
ongoing basis, whether the derivative financial instruments that are
used for hedging transactions are highly effective in offsetting chang-
es in fair values or cash flows of the hedged items.
Fair value hedges are hedges of a change in the fair value of a
recognized financial asset or liability or a firm commitment due to a
specified risk. Changes in the fair value of a derivative financial
instrument, together with the change in fair value of the hedged item
attributable to the hedged risk, are recognized in income from finan-
cial assets and liabilities carried at fair value through income (net).
Cash flow hedges offset the exposure to variability in expected
future cash flows that is attributable to a particular risk associated
with a recognized asset or liability or a forecasted transaction.
Changes in the fair value of a derivative financial instrument that
represent an effective hedge are recorded in unrealized gains and
losses (net) in other comprehensive income, and are transferred to
the consolidated income statement when the offsetting gain or loss
associated with the hedged item is recognized. Any ineffectiveness of
the cash flow hedge is recognized directly in income from financial
assets and liabilities carried at fair value through income (net).
Furthermore, hedge accounting may be applied to derivative
financial instruments used to hedge the foreign currency risk associ-
ated with a net investment in a foreign entity. The effective propor-
tion of gains or losses arising from the valuation of the derivative
financial instrument is recognized in foreign currency translation
adjustments in other comprehensive income, while any ineffective-
ness is recognized directly in income from financial assets and liabil-
ities carried at fair value through income (net).
Derivative financial instruments that meet the criteria for hedge
accounting are included in other assets or other liabilities.
The Allianz Group discontinues hedge accounting prospectively
when the hedge is no longer highly effective, when the derivative
financial instrument or the hedged item expires, or is sold, terminated
136
Annual Report 2013
Allianz Group
D
Consolidated Financial Statements
127 Consolidated Balance Sheets
128 Consolidated Income Statements
129 Consolidated Statements of
Comprehensive Income
130 Consolidated Statements of
134 Notes to the Consolidated Financial
Changes in Equity
Statements
131 Consolidated Statements of
Cash Flows
or exercised, or when the Allianz Group decides that hedge accounting
is no longer appropriate.
Derivative financial instruments designated in hedge account-
ing relationships are included in the line item other assets and liabil-
ities. Freestanding derivatives are included in the line item financial
assets or liabilities held for trading. For further information on deriv-
atives, please refer to note 43.
Disclosures relating to financial assets
The following table summarizes the relationship between the balance
sheet positions and the classes of financial instruments according to
IFRS 7. The balance sheet positions are the same as the IAS 39 catego-
ries except when noted in parentheses.
BaLaNCe sheet LiNe items, ias 39 CateGories aND ifrs 7 CLasses of fiNaNCiaL
iNstrumeNts
fiNaNCiaL assets
Cash and cash equivalents
Financial assets carried at fair value through income
Financial assets held for trading
Financial assets designated at fair value through income
Investments
Available-for-sale investments
Held-to-maturity investments
Loans and advances to banks and customers
(Loans and receivables)
Financial assets for unit-linked contracts
Other assets
Measurement basis
Nominal value
Fair value
Fair value
Fair value
Amortized cost
Amortized cost
Fair value
Derivative financial instruments used for hedging that meet
the criteria for hedge accounting and firm commitments
Fair value
fiNaNCiaL LiaBiLities
Financial liabilities carried at fair value through income
Financial liabilities held for trading
Financial liabilities designated at fair value through income
Fair value
Fair value
Liabilities to banks and customers (Other liabilities)
Amortized cost
Reserves for insurance and investment contracts
Non-unit-linked investment contracts
Financial liabilities for unit-linked contracts
Other liabilities
Amortized cost
Fair value
Derivative financial instruments used for hedging that meet
the criteria for hedge accounting and firm commitments
Fair value
Financial liabilities for puttable equity instruments
Redemption amount
Certificated liabilities (Other liabilities)
Subordinated liabilities (Other liabilities)
off-BaLaNCe sheet
Financial guarantees
Irrevocable loan commitments
Amortized cost
Amortized cost
Nominal value
Nominal value
Please refer to note 44 for details on fair value measurement and fur-
ther disclosures under IFRS 7. Please refer to note 3, where the pro-
cesses and controls for ensuring an appropriate use of estimates and
assumptions are explained.
Cash aND Cash eQuiVaLeNts
Cash and cash equivalents include balances with banks payable on
demand, balances with central banks, cash on hand, treasury bills to
the extent they are not included in financial assets held for trading,
as well as checks and bills of exchange which are eligible for refinanc-
ing at central banks, subject to a maximum term of three months
from the date of acquisition.
fiNaNCiaL assets aND LiaBiLities
CarrieD at fair VaLue throuGh iNCome
Financial assets and liabilities carried at fair value through income
include financial assets and liabilities held for trading and financial
assets and liabilities designated at fair value through income. Finan-
cial assets and liabilities held for trading consist of debt and equity
securities that have been principally acquired for the purpose of gen-
erating a profit from short-term fluctuations in price or for the pur-
pose of selling in the near future as well as of derivative financial
instruments, which include bifurcated embedded derivatives of hy-
brid financial instruments and of insurance contracts.
Financial assets and liabilities are designated at fair value
through income to eliminate or significantly reduce an accounting
mismatch. Subsidiaries must reach out to the Group Accounting and
Reporting department for approval before designating any financial
asset or liability as at fair value through income.
iNVestmeNts
Available-for-sale investments
Available-for-sale investments comprise debt and equity securities
that are designated as available-for-sale or are not classified as held-
to-maturity, loans and advances, or financial assets carried at fair
value through income. Available-for-sale investments are initially
recognized and subsequently measured at fair value. Unrealized
gains and losses, which are the difference between fair value and cost
or amortized cost, are recognized as a separate component of other
comprehensive income, net of deferred taxes and the latent reserve
for premium refunds to the extent that policyholders will participate
in such gains and losses on the basis of statutory or contractual reg-
ulations when they are realized. When an available-for-sale invest-
ment is derecognized or determined to be impaired, the cumulative
gain or loss previously recorded in other comprehensive income is
transferred and recognized in the consolidated income statement.
Realized gains and losses on securities are generally determined by
applying the average cost method at the subsidiary level.
Annual Report 2013
Allianz Group
137
Held-to-maturity investments
Held-to-maturity investments are debt securities with fixed or deter-
minable payments and fixed maturities for which the Allianz Group
has the positive intent and ability to hold to maturity. These securi-
ties are initially recognized at fair value and subsequently measured
at amortized cost using the effective interest method.
Funds held by others under reinsurance contracts assumed
Funds held by others under reinsurance contracts assumed relate to
cash deposits to which the Allianz Group is entitled, but which the
ceding insurer retains as collateral for future obligations of the
Allianz Group. The cash deposits are recorded at face value, less any
impairment for balances that are deemed not to be recoverable.
Investments in associates and joint ventures
Please see the section Principles of Consolidation for details on the
accounting for investments in associates and joint ventures.
Real estate held for investment
Real estate held for investment (i.e. real estate and rights equivalent
to real property and buildings, including buildings on leased land) is
carried at cost less accumulated depreciation and impairments. Real
estate held for investment is depreciated on a straight-line basis over
its estimated life, with a maximum of 50 years. At each reporting date
or whenever there are any indications that the carrying amount may
not be recoverable, real estate is tested for impairment by determin-
ing its recoverable amount. Subsequent costs are capitalized if they
extend the useful life or increase the value of the asset; otherwise they
are expensed as incurred.
LOANS AND ADVANCES tO bANkS AND CuStOmErS
Loans and advances are non-derivative financial assets with fixed or
determinable payments that are not quoted in an active market and
which are not classified as financial assets held for trading, desig-
nated at fair value through income or designated as available for sale.
Loans and advances are initially recognized at fair value. Subse-
quently, they are recorded at amortized cost using the effective inter-
est method. Interest income is accrued on the unpaid principal bal-
ance, net of impairments. Using the effective interest method, net
deferred fees and premiums or discounts are recorded as an adjust-
ment of other interest income yield over the lives of the related loans.
FINANCIAL ASSEtS FOr uNIt-LINkED CONtrACtS
Financial assets for unit-linked contracts are recorded at fair value
with changes in fair value recorded in net income together with the
offsetting changes in fair value of the corresponding financial liabili-
ties for unit-linked contracts.
rEINSurANCE ASSEtS
Assets and liabilities related to reinsurance are reported on a gross
basis. Reinsurance assets include balances expected to be recovered
from reinsurance companies. The amount of reserves ceded to re-
insurers is estimated in a manner consistent with the claim liability
associated with the reinsured risks. To the extent that the assuming
reinsurers are unable to meet their obligations, the respective ceding
insurers of the Allianz Group remain liable to its policyholders for the
portion reinsured. Consequently, allowances are made for receiv-
ables on reinsurance contracts which are deemed uncollectible.
DEFErrED ACQuISItION COStS
Deferred acquisition costs (DAC)
Costs that vary with and are directly related to the acquisition and
renewal of insurance contracts and investment contracts with dis-
cretionary participation features are deferred by recognizing a DAC
asset. DAC generally consists of commissions, underwriting expenses
and policy issuance costs. At inception, DAC is tested to ensure that it
is recoverable over the life of the contracts. Subsequently, loss recog-
nition tests at the end of each reporting period ensure that only the
amount of DAC that is covered by future profits is carried on the con-
solidated balance sheet. Please refer to the section reserves for insur-
ance and investment contracts, where details on the corresponding
liability adequacy test are explained.
For short-duration, traditional long-duration, and limited-pay-
ment insurance contracts, DAC is amortized in proportion to premi-
um revenue recognized. For universal life-type and participating life
insurance contracts as well as investment contracts with discretion-
ary participation features, DAC is generally amortized over the life of
a book of contracts based on estimated gross profits (EGP) or esti-
mated gross margins (EGM), respectively. EGP and EGM are based on
historical and anticipated experience, which is determined on a best
estimate basis and evaluated at the end of each reporting period,
with the effect of changes being recognized in the net income in the
period revised.
Acquisition costs for unit-linked investment contracts without
discretionary participation features accounted for under IAS 39 at fair
value are deferred in accordance with IAS 18 if the costs are incremen-
tal. For non-unit-linked investment contracts without discretionary
participation features accounted for under IAS 39 at amortized cost,
acquisition costs that meet the definition of transaction costs under
IAS 39 are considered in the aggregate policy reserves.
Please refer to note 3, where the processes and controls for ensur-
ing an appropriate use of estimates and assumptions are explained.
Present value of future profits (PVFP)
The value of an insurance business or an insurance portfolio acquired
is measured by the PVFP, which is the present value of net cash flows
138
Annual Report 2013
Allianz Group
D
Consolidated Financial Statements
127 Consolidated Balance Sheets
128 Consolidated Income Statements
129 Consolidated Statements of
Comprehensive Income
130 Consolidated Statements of
134 Notes to the Consolidated Financial
Changes in Equity
Statements
131 Consolidated Statements of
Cash Flows
anticipated in the future from insurance contracts in force at the date
of acquisition. It is amortized over the life of the related contracts.
a straight-line basis over the estimated useful service lives or contrac-
tual terms.
Deferred sales inducements
Sales inducements on insurance contracts are deferred and amor-
tized using the same methodology and assumptions as for deferred
acquisition costs when they meet the following criteria: the sales
inducements are recognized as part of the reserves, are explicitly
identified in the contract at inception and incremental to amounts
credited on similar contracts without sales inducements and higher
than the contract’s expected ongoing crediting rates for periods after
the inducement.
Shadow accounting
For insurance contracts and investment contracts with discretionary
participation features, shadow accounting is applied to DAC, PVFP
and deferred sales inducements in order to include the effect of unre-
alized gains or losses in the measurement of these assets in the same
way as it is done for realized gains or losses. Accordingly, the assets
are adjusted with corresponding charges or credits recognized
directly in other comprehensive income as a component of the related
unrealized gain or loss. When the gains or losses are realized, they
are recorded in the income statement through recycling and prior
adjustments due to shadow accounting are reversed.
DeferreD taX assets
The calculation of deferred tax assets is based on tax loss carry for-
wards, unused tax credits and on temporary differences between the
Allianz Group’s carrying amounts of assets or liabilities in its con-
solidated balance sheet and their tax bases. The tax rates used for the
calculation of deferred taxes are the local rates applicable in the
countries concerned; changes to tax rates which have been substan-
tively enacted prior to or as of the consolidated balance sheet date
are taken into account. Deferred tax assets on losses carried forward
are recognized only to the extent it is probable that sufficient future
taxable income will be available for their realization.
Please refer to note 3, where the processes and controls for ensur-
ing an appropriate use of estimates and assumptions are explained.
other assets
Other assets primarily consist of receivables, accrued dividends,
interest and rent as well as own-used property and equipment.
Receivables are generally recorded at face value less any pay-
ments received, net of valuation allowances.
Own-used property and equipment generally is carried at cost
less accumulated depreciation and impairments. The assets are
depreciated on a straight-line basis over their estimated useful lives.
Software, which includes software purchased from third parties
or developed internally, is initially recorded at cost and amortized on
The Allianz Group also records the fixed assets of its fully con-
solidated private equity investments and alternative investments
within property and equipment. These assets are carried at cost less
accumulated depreciation and impairments. Depreciation is gener-
ally computed using the straight-line method over the estimated use-
ful lives of the assets.
The table below summarizes estimated useful lives for real
estate held for own use, equipment, software and fixed assets of alter-
native investments.
estimateD usefuL LiVes (iN Years)
Real estate held for own use
Software
Equipment
Fixed assets of alternative investments
Years
max. 50
2 – 10
2 – 10
4 – 25
iNtaNGiBLe assets
Intangible assets with indefinite useful lives mainly consist of good-
will resulting from business combinations. It is initially recorded at
cost and subsequently measured at cost less accumulated impair-
ments. Goodwill is allocated to each of the Allianz Group’s cash gener-
ating units expected to benefit from the business combination. The
Allianz Group conducts an annual impairment test of goodwill dur-
ing the fourth quarter or more frequently if there is an indication that
goodwill is not recoverable. The impairment test includes comparing
the recoverable amount to the carrying amount, including goodwill,
of all relevant cash generating units. A cash generating unit is impaired
if the carrying amount is greater than the recoverable amount. The
impairment amount is allocated to first reduce any goodwill, followed
by allocation to the carrying amount of any remaining non-financial
assets of the cash generating unit. Impairments of goodwill are not
reversed. Gains or losses realized on the disposal of subsidiaries
include any related goodwill.
Intangible assets with finite useful lives primarily consist of dis-
tribution agreements. They are initially recorded at cost which gener-
ally is the purchase price plus directly attributable costs or, when
acquired with business combinations, at fair value if the intangible
asset is separable or arises from contractual or other legal rights and
its fair value can be measured reliably. Distribution agreements are
subsequently recorded at cost less accumulated depreciation and
impairments. The assets generally are depreciated on a straight-line
basis over their useful lives or contractual term.
Please refer to note 3, where the processes and controls for
ensuring an appropriate use of estimates and assumptions are
explained.
Annual Report 2013
Allianz Group
139
priNCipLes of aCCouNtiNG for iNsuraNCe,
iNVestmeNt aND reiNsuraNCe CoNtraCts
Insurance and investment contracts
Insurance contracts under which the Allianz Group accepts signifi-
cant insurance risk and investment contracts with discretionary par-
ticipating features are accounted for under the insurance accounting
provisions of US GAAP as at first-time adoption of IFRS 4 on 1 January
2005 when IFRS 4 does not provide specific guidance. Investment con-
tracts without discretionary participation features are accounted for
as financial instruments in accordance with IAS 39.
Reinsurance contracts
The Allianz Group’s consolidated financial statements reflect the
effects of ceded and assumed reinsurance contracts. Assumed rein-
surance refers to the acceptance of certain insurance risks by the
Allianz Group that other companies have underwritten. Ceded rein-
surance refers to the transfer of insurance risk, along with the respec-
tive premiums, to one or more reinsurers who will share in the risks.
When the reinsurance contracts do not transfer significant insur-
ance risk, deposit accounting is applied as required under the related
reinsurance accounting provisions of US GAAP or under IAS 39. Assumed
reinsurance premiums, commissions and claim settlements, as well
as the reinsurance element of technical provisions are accounted for
in accordance with the conditions of the reinsurance contracts and
with consideration of the original contracts for which the reinsur-
ance was concluded.
Insurance liability adequacy testing
Liability adequacy tests are performed for each insurance portfolio
on the basis of estimates of future claims, costs, premiums earned
and proportionate investment income. For short-duration contracts,
a premium deficiency is recognized if the sum of expected claim
costs and claim adjustment expenses, expected dividends to policy-
holders, capitalized DAC, and maintenance expenses exceeds related
unearned premiums while considering anticipated investment
income.
For traditional long-duration contracts and limited-payment
contracts, if actual experience regarding investment yields, mortality,
morbidity, terminations or expense indicate that existing contract
liabilities, along with the present value of future gross premiums, will
not be sufficient to cover the present value of future benefits and to
recover capitalized DAC, a premium deficiency is recognized.
For other long-duration contracts, if the present value of esti-
mated gross profits or margins, plus unearned revenue liability if
applicable, will not be sufficient to recover capitalized DAC, a premium
deficiency is recognized.
Please refer to note 3, where the processes and controls for
ensuring an appropriate use of estimates and assumptions are
explained.
140
Annual Report 2013
Allianz Group
uNearNeD premiums
For short-duration insurance contracts, like most of the property and
casualty contracts, premiums to be earned in future years are recorded
as unearned premiums. These premiums are earned in subsequent
periods in relation to the insurance coverage provided.
Amounts charged as consideration for origination of certain
long-duration insurance contracts (i.e. initiation or front-end fees)
are reported as unearned revenue which are included in unearned
premiums. These fees are recognized using the same amortization
methodology as DAC.
reserVes for Loss aND Loss aDJustmeNt eXpeNses
Reserves are established for the payment of losses and loss adjust-
ment expenses (LAE) on claims which have occurred but are not yet
settled. Reserves for loss and loss adjustment expenses fall into two
categories: case reserves for reported claims and reserves for incurred
but not reported losses (IBNR).
Case reserves for reported claims are based on estimates of
future payments that will be made with respect to claims, including
LAE relating to such claims. The estimates reflect the informed judg-
ment of claims personnel based on general insurance reserving prac-
tices and knowledge of the nature and value of a specific type of claim.
These case reserves are regularly re-evaluated in the ordinary course
of the settlement process and adjustments are made as new informa-
tion becomes available.
IBNR reserves are established to recognize the estimated cost of
losses that have occurred but where the Allianz Group has not yet
been notified. IBNR reserves, similar to case reserves for reported
claims, are established to recognize the estimated costs, including
expenses, necessary to bring claims to final settlement. The Allianz
Group relies on its past experience, adjusted for current trends and
any other relevant factors to estimate IBNR reserves. IBNR reserves are
estimates based on actuarial and statistical projections of the expect-
ed cost of the ultimate settlement and administration of claims. The
analyses are based on facts and circumstances known at the time,
predictions of future events, estimates of future inflation and other
societal and economic factors. Trends in claim frequency, severity
and time lag in reporting are examples of factors used in projecting
the IBNR reserves. IBNR reserves are reviewed and revised periodically
as additional information becomes available and actual claims are
reported.
In general, reserves for loss and loss adjustment expenses are
not discounted, except when payment amounts are fixed and timing
is reasonably determinable. Discounted loss reserves as well as their
unwinding are presented within reserves for insurance and invest-
ment contracts to better reflect the nature of the reserves and to only
reflect the net underwriting result within the key performance indi-
cator combined ratio.
D
Consolidated Financial Statements
127 Consolidated Balance Sheets
128 Consolidated Income Statements
129 Consolidated Statements of
Comprehensive Income
130 Consolidated Statements of
134 Notes to the Consolidated Financial
Changes in Equity
Statements
131 Consolidated Statements of
Cash Flows
reserVes for iNsuraNCe aND iNVestmeNt CoNtraCts
Reserves for insurance and investment contracts include aggregate
policy reserves, reserves for premium refunds and other insurance
reserves.
Aggregate policy reserves
The aggregate policy reserves for participating life insurance con-
tracts are calculated using the net level premium method based on
assumptions for mortality, morbidity and interest rates that are guar-
anteed in the contract or used in determining the policyholder divi-
dends (or premium refunds).
For traditional long-duration insurance contracts, such as tradi-
tional life and health products, aggregate policy reserves are com-
puted using the net level premium method based on best estimate
assumptions adjusted for a provision for adverse deviation for mor-
tality, morbidity, expected investment yields, surrenders and expen-
ses at the policy inception date, which remain locked in thereafter
unless a premium deficiency occurs.
The aggregate policy reserves for universal life-type insurance
contracts are equal to the account balance, which represents premi-
ums received and investment return credited to the policy less
deductions for mortality costs and expense charges. The aggregate
policy reserve for universal life-type contracts includes insurance
reserves for unit-linked insurance contracts and investment con-
tracts with discretionary participation features as well as liabilities
for guaranteed minimum death and similar mortality and morbidity
benefits related to non-traditional contracts with annuitization
options.
Universal life-type and investment-type insurance contracts fea-
tures which are not closely related to the underlying insurance con-
tracts are bifurcated from the insurance contracts and accounted for
as derivatives in line with IFRS 4 and IAS 39.
The assumptions used for aggregate policy reserves are deter-
mined using current and historical client data, industry data, and in
the case of assumptions for interest reflect expected earnings on
assets, which back the future policyholder benefits. The information
used by the Allianz Group’s actuaries in setting such assumptions
includes, but is not limited to, pricing assumptions, available experi-
ence studies, and profitability analyses. The interest rate assump-
tions used in the calculation of deferred acquisition costs and aggre-
gate policy reserves were as follows:
iNterest rate assumptioNs
Deferred acquisition costs
Aggregate policy reserves
Traditional
long-duration
insurance contracts
Participating life
insurance contracts
2.5 – 6.0 %
2.5 – 6.0 %
2.2 – 5.0 %
0.8 – 4.3 %
The Allianz Group has recognized all rights and obligations related
to issued insurance contracts according to its accounting policies,
and thus has not separately recognized an unbundled deposit com-
ponent in respect of any of its insurance contracts.
Non-unit-linked investment contracts without discretionary
participating features are accounted for under IAS 39. The aggregate
policy reserve for those contracts is initially recognized at fair value,
or the amount of the deposit by the contract holder, net of the trans-
action costs that are directly attributable to the issuance of the con-
tract. Subsequently, those contracts are measured at amortized cost
using the effective interest rate method.
Please refer to note 3, where the processes and controls for
ensuring an appropriate use of estimates and assumptions are
explained.
Reserves for premium refunds
Reserves for premium refunds include the amounts allocated under
the relevant local statutory or contractual regulations to the accounts
of the policyholders and the amounts resulting from the differences
between these IFRS-based financial statements and the local finan-
cial statements (latent reserve for premium refunds), which will
reverse and enter into future profit participation calculations. Unre-
alized gains and losses recognized for available-for-sale investments
are recognized in the latent reserve for premium refunds to the
extent that policyholders will participate in such gains and losses on
the basis of statutory or contractual regulations when they are real-
ized, based on and similar to shadow accounting. The profit partici-
pation allocated to participating policyholders or disbursed to them
reduces the reserve for premium refunds.
fiNaNCiaL LiaBiLities for uNit-LiNkeD CoNtraCts
The fair value of financial liabilities for unit-linked contracts is equal
to the fair value of the financial assets for unit-linked contracts.
DeferreD taX LiaBiLities
Deferred tax liabilities are recognized for temporary differences be-
tween the Allianz Group’s carrying amounts of assets or liabilities in
its consolidated balance sheet and their tax bases.
other LiaBiLities
Other liabilities primarily consist of payables, provisions for pensions
and similar obligations, employee-related provisions, deposits
retained for reinsurance ceded, and financial liabilities for puttable
equity instruments.
Pensions and similar obligations
For defined benefit plans, the Allianz Group uses the projected unit
credit method to determine the present value of its defined benefit
obligations and the related service cost and, where applicable, past
service cost. All actuarial gains and losses are recognized immedi-
Annual Report 2013
Allianz Group
141
ately in other comprehensive income (OCI). While all remeasure-
ments and experience adjustments need to be recognized in OCI,
service and interest costs are recognized in the profit or loss account.
The long-term return on plan assets is calculated using the same
interest rate used to discount the defined benefit obligation, i.e. high-
quality corporate bonds at the end of the reporting period.
Please refer to note 3, where the processes and controls for
ensuring an appropriate use of estimates and assumptions are
explained.
Share-based compensation plans
The share-based compensation plans of the Allianz Group are classi-
fied as either equity-settled or cash-settled plans. Equity-settled
plans are measured at fair value on the grant date and recognized as
an expense, with a corresponding increase to shareholders’ equity,
over the vesting period. Equity-settled plans include a best estimate
of the number of equity instruments that are expected to vest in
determining the amount of expense to be recognized. For cash-settled
plans, the Allianz Group accrues the fair value of the award as a com-
pensation expense over the vesting period. Upon vesting, any change
in the fair value of any unexercised awards is also recognized as a
compensation expense.
Restructuring provisions
Restructuring provisions are recognized when programs materially
change the scope of business performed by an operating entity or
business unit or the manner in which business is conducted and
when a detailed formal plan has been announced.
Please refer to note 3, where the processes and controls for ensur-
ing an appropriate use of estimates and assumptions are explained.
Financial liabilities for puttable equity instruments
Financial liabilities for puttable equity instruments primarily in-
clude the non-controlling interests in shareholders’ equity of con-
trolled mutual funds. These interests qualify as a financial liability of
the Allianz Group, as they give the holder the right to put the instru-
ment back to the Allianz Group for cash or another financial asset
(puttable instrument). These liabilities are generally required to be
recorded at the redemption amount with changes recognized in
income.
CertifiCateD LiaBiLities
aND suBorDiNateD LiaBiLities
Certificated liabilities and subordinated liabilities are subsequently
measured at amortized cost, using the effective interest method to
amortize the premium or discount to the redemption value over the
life of the liability.
eQuitY
Issued capital represents the mathematical per share value received
from the issuance of shares. Capital reserves represent the premium,
or additional paid-in capital, received from the issuance of shares.
Retained earnings comprise the net income of the current year,
not yet distributed earnings of prior years and treasury shares as well
as any amounts directly recognized in equity according to IFRS. Trea-
sury shares are deducted from shareholders’ equity. No gain or loss
is recognized on the sale, issuance, acquisition or cancellation of
these shares. Any consideration paid or received is recorded directly
in shareholders’ equity.
Unrealized gains and losses (net) include unrealized gains and
losses from available-for-sale investments and derivative financial
instruments that meet the criteria for cash hedge accounting or
hedges of a net investment in a foreign entity. Please refer to the above
sections for foreign currency, where foreign currency changes that
are recognized in other comprehensive income are explained.
Non-controlling interests represent equity in subsidiaries, not
attributable directly or indirectly, to Allianz as parent.
premiums
Premiums for short-duration insurance contracts are recognized as
revenues over the period of the contract in proportion to the amount
of insurance protection provided. Unearned premiums are calculated
separately for each individual policy to cover the unexpired portion
of written premiums.
Premiums for long-duration insurance contracts are recognized
as earned when due. Long-duration insurance contracts are contracts
that are not cancelable by the insurance company, guaranteed to be
renewable and expected to remain in force over an extended period
of time.
Revenues for universal life-type and investment contracts repre-
sent charges assessed against the policyholders’ account balances
for the front-end loads, net of the change in unearned revenue liabil-
ity, cost of insurance, surrenders and policy administration, and are
included within premiums earned (net).
Premiums ceded for reinsurance are deducted from premiums
earned.
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 ven-
tures. 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.
142
Annual Report 2013
Allianz Group
D
Consolidated Financial Statements
127 Consolidated Balance Sheets
128 Consolidated Income Statements
129 Consolidated Statements of
Comprehensive Income
130 Consolidated Statements of
134 Notes to the Consolidated Financial
Changes in Equity
Statements
131 Consolidated Statements of
Cash Flows
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 pol-
icy 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.
iNCome taXes
Income tax expense consists of current taxes on taxable income
actually charged to the individual Allianz Group companies and
changes in deferred tax assets and liabilities. Expense and income
from interest and penalties to or from tax authorities are included in
current taxes.
Please refer to note 3, where the processes and controls for ensur-
ing an appropriate use of estimates and assumptions are explained.
3 – Use of estimates and assumptions
The preceding note 2 describes the accounting policies that the Allianz
Group follows in preparing its consolidated financial statements.
The section below describes how certain reported figures can be sig-
nificantly affected by the use of estimates and assumptions, and the
processes the Allianz Group has in place to control the judgments
which are made.
Both sides of the Allianz Group’s balance sheet have a high
degree of estimation and numerous assumptions embedded in the
valuation of assets and liabilities. The estimation process and selec-
tion of appropriate assumptions requires significant judgment to be
applied and management decisions to be taken in order to establish
appropriate values for these assets and liabilities. Any change in the
assumptions and estimates could, in certain circumstances, signifi-
cantly affect the reported results and values because the range of
reasonable judgment in some cases may be very large. The Allianz
Group understands the degree of impact that these judgments may
have and has established a strong system of governance as well as
controls, procedures and guidelines to ensure consistency and
soundness over these judgments.
Subsidiaries of the Allianz Group are required to establish con-
trols which promote a culture of good judgment and sound decision-
making around accounting estimates. These include providing train-
ing programs, hiring people with the right background for the job (i.e.
certified or experienced accountants, actuaries and finance profes-
sionals), and providing formalized policies and procedures manuals
for accounting and internal controls.
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 deci-
sions and selection of assumptions are discussed in an open setting
among experts and that inconsistencies are identified and resolved.
Complex accounting areas that are especially sensitive to the
estimates and assumptions are described in the following sections.
reserVes for Loss aND Loss aDJustmeNt eXpeNses,
reserVes for iNsuraNCe aND iNVestmeNt CoNtraCts
aND DeferreD aCQuisitioN Costs
As of 31 December 2013, the Allianz Group reported:1
− 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
− deferred acquisition costs of € 22,203 MN.
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 assump-
tions 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
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.
In a first stage, in each jurisdiction, reserves are calculated for
individual lines of business, taking into consideration a wide range
of local factors. This local reserving process begins with local reserv-
ing actuaries gathering data, typically dividing reserving data into
the smallest possible homogeneous segments, while maintaining
sufficient volume to form the basis for stable projections. Once data
is collected, they derive patterns of loss payment and emergence of
claims based on historical data organized into development trian-
gles arrayed by accident year versus development year. Loss payment
and reporting patterns are selected based on observed historical
development factors and also on the judgment of the reserving actu-
ary using an understanding of the underlying business, claims pro-
cesses, data and systems as well as the market, economic, societal
and legal environment. Expected loss ratios are then developed,
which are derived from the analysis of historical observed loss ratios,
adjusted for a range of factors such as loss development, claims infla-
tion, changes in premium rates, changes in portfolio mix and changes
in policy terms and conditions.
Using the development patterns and expected loss ratios
described above, local reserving actuaries produce estimates of ulti-
mate loss and allocated loss adjustment expenses using several
methods, such as Loss Development or Chain-Ladder Method,
Bornhuetter-Ferguson Method, or Frequency-Severity Methods.
Using the above estimate of ultimate loss and LAE by accident
year – with respect to the origin year of losses – subsidiaries of the
Allianz Group directly estimate the total loss and LAE reserves by sub-
tracting cumulative payments for claims and LAE through the rele-
vant balance sheet date. Finally, local reserving actuaries calculate
the relevant IBNR reserves as the difference between
− the total loss and LAE reserves, and
− the case reserves as established by claims adjusters on a case-
by-case basis.
Estimates for the current accident year determine the loss ratios and
profitability of the business of the most recent year. For all prior acci-
dent years the change in estimates is reported as a run-off – adverse
or favorable – in the consolidated income statement.
As loss reserves represent estimates of uncertain future events,
the local reserving actuaries determine a range of reasonably possi-
ble outcomes. To analyze the variability of loss reserve estimates,
actuaries employ a range of methods and approaches, including
simple sensitivity testing using alternative assumptions, as well as
more sophisticated stochastic techniques. The Allianz Group’s
reserving standards require that all local reserve committees in
Allianz subsidiaries meet quarterly to discuss and document reserv-
ing decisions as well as to select the best estimate of the ultimate
amount of reserves within a range of possible outcomes and to docu-
ment the rationale for that selection for the particular entity.
In a second stage, the Allianz Group Actuarial department regu-
larly reviews the local reserving processes, including the appropriate-
ness and consistency of assumptions. Significant aspects are reported
to the Allianz Group Reserve Committee to initiate actions when
necessary.
For Life/Health and for Property-Casualty the central oversight
process includes the following key components:
Group-wide standards and guidelines: They define the reserving
practices which must be conducted by each subsidiary including
aspects of assumptions and estimates. This includes the organiza-
tion and structure, data, methods, and reporting. The Allianz Group
Actuarial Department monitors compliance with these standards
and guidelines.
Regular site visits: The Allianz Group Actuarial Department regu-
larly visits Allianz subsidiaries in order to ensure that they apply the
Group-wide standards and guidelines. The on-site review focuses on
all significant changes in assumptions and methodologies as well as
on procedures and professional practices relevant for the reserving
process. Furthermore, these meetings are to update knowledge of the
underlying local business developments.
Regular quantitative and qualitative reserve monitoring: On a
quarterly basis, the Allianz Group Actuarial Department monitors
re serve levels, movements and trends across the Allianz Group. This
monitoring is conducted on the basis of quarterly data submitted by
the subsidiaries as well as through frequent dialogue with local actu-
aries.
The oversight and monitoring of the Allianz Group’s reserves
culminate in quarterly meetings of the Allianz Group Reserve Com-
mittee, which is the supervising body that governs all significant
reserves. It particularly monitors key developments across the Allianz
Group affecting the adequacy of loss reserves.
144
Annual Report 2013
Allianz Group
D
Consolidated Financial Statements
127 Consolidated Balance Sheets
128 Consolidated Income Statements
129 Consolidated Statements of
Comprehensive Income
130 Consolidated Statements of
134 Notes to the Consolidated Financial
Changes in Equity
Statements
131 Consolidated Statements of
Cash Flows
fair VaLue aND impairmeNts
of fiNaNCiaL iNstrumeNts
As of 31 December 2013, the Allianz Group reported financial instru-
ments carried at fair value as follows:1
− € 161,490 MN of the financial assets and € 81,324 MN of the finan-
cial 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 observ-
able market inputs)
− € 10,267 MN of the financial assets and € 4,694 MN of the financial
liabilities carried at fair value are classified within level 3 of the
fair value hierarchy (valuation techniques with significant input
being non-observable). Level 3 financial assets represent 2.1 % of
the Allianz Group’s total financial assets carried at fair value.
Financial liabilities classified as Level 3 represent 5.2 % of the
Allianz Group’s total financial liabilities carried at fair value.
Estimates and assumptions are particularly significant when deter-
mining the fair value of financial instruments for which at least one
significant input is not based on observable market data (classified
within level 3 of the fair value hierarchy). The availability of market
information is determined by the relative trading levels of identical
or similar instruments in the market, with emphasis placed on infor-
mation that represents actual market activity or binding quotations
from brokers or dealers. When appropriate, values are adjusted on
the basis of available market information including pricing, credit-
related factors, volatility levels, and liquidity considerations. If suffi-
cient market information is unavailable, management’s best estimate
of a particular input is used to determine the value.
The evaluation of whether a financial debt security is impaired
requires analysis of the underlying credit risk/ quality of the relevant
issuer and involves significant management judgment. In particular,
current publicly available information relating to the issuer and the
particular security is considered relating to factors including, but not
limited to, evidence of significant financial difficulty of the issuer and
breach of contractual obligations of the security, such as a default or
delinquency on interest or principal payments. The Allianz Group
also considers other factors which could provide objective evidence
of a loss event, including the probability of bankruptcy and the lack
of an active market due to financial difficulty. The presence of either
a decline in fair value below amortized cost or the downgrade of an
issuer’s credit rating does not by itself represent objective evidence
of a loss event, but may represent objective evidence of a loss event
when considered with other available information.
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 inter-
nal 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 good-
will is not amortized, the Allianz Group must evaluate at least annu-
ally 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 typi-
cally determined on the basis of value in use calculations. The deter-
mination of a CGU’s recoverable amount requires significant judg-
ment regarding the selection of appropriate valuation techniques
and assumptions. These assumptions include selection of appropri-
ate 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.
The Allianz Group’s processes and controls around the estimation
of recoverable amounts are generally applied at the Allianz Group
level and are designed to minimize subjectivity. For example, the
assumptions used are required to be consistent with the parameters
1
Please refer to the consolidated financial statements note 2 Summary of significant accounting policies,
note 37 Impairments of investments (net) and note 44 Financial instruments for further details regarding
financial instruments and impairments.
2
Please refer to note 2 Summary of significant accounting policies and note 15 Intangible assets for further
details.
Annual Report 2013
Allianz Group
145
of the well-defined planning and controlling processes. Important
input factors for those calculations are the business plan, the esti-
mate of the sustainable returns and eternal growth rates, as is further
explained in note 15. The Allianz Group also performs sensitivity tests
with regard to key value drivers, such as projected long-term com-
bined ratios or discount rates. Furthermore, the Allianz Group
reviews market-based business transaction multiples where avail-
able. This information is used to assess reasonableness since directly
comparable market value information is not generally available. The
Allianz Group believes that the controls over assessing the recover-
ability of goodwill ensure both consistent and reliable results.
DeferreD taX assets
As of 31 December 2013, the Allianz Group reported deferred tax
assets of € 1,508 MN. The deferred tax assets before netting with deferred
tax liabilities amounted to € 15,555 MN. € 1,561 MN thereof resulted
from tax losses which are carried forward to future periods.1
Deferred taxes are determined based on tax loss carry forwards,
unused tax credits and on temporary differences between the Allianz
Group’s carrying amounts of assets and liabilities in its consolidated
balance sheet and their tax bases. Deferred tax assets are recognized
only to the extent it is probable that sufficient future taxable income
will be available for their realization. Assessments as to the recover-
ability of deferred tax assets require the use of judgment regarding
assumptions related to estimated future taxable profits. This includes
the character and amounts of taxable future profits, the periods in
which those profits are expected to occur as well as the availability of
tax planning opportunities.
The analysis and forecasting required in this process, and as a
result the determination of the deferred tax assets, is performed for
individual jurisdictions by qualified local tax and financial profession-
als. Given the potential significance surrounding the underlying esti-
mates and assumptions, Group-wide policies and procedures have
been designed to ensure consistency and reliability around the recov-
erability assessment process. Forecasted operating results are based
upon approved business plans which are themselves subject to a well-
defined process of control. As a matter of policy, especially strong
evidence supporting the recognition of deferred tax assets is required
if an entity has suffered a loss in either the current or preceding period.
Recognition and recoverability of all significant deferred tax
assets are reviewed by tax professionals at Group level and the Allianz
Group Tax Committee.
2
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 valu-
ation 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 con-
sistent determination, all input parameters are discussed and defined,
taking into consideration economic developments, peer reviews, cur-
rently available market and industry data. The discount rate assump-
tions 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, mar-
ket yields on government bonds are generally used as discount rates.
Due to changing market and economic conditions, the underly-
ing assumptions may differ from actual developments. Potential
financial impacts from deviations in certain critical assumptions
based on respective sensitivity analyses are disclosed in note 47.
restruCturiNG proVisioNs
As of 31 December 2013, the Allianz Group reported a provision for
restructuring programs of € 214 MN.3
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 pro-
gram is based on several estimates and assumptions, such as the
number of employees to be dismissed, amount of compensation pay-
ments, impacts of onerous contracts, possibilities of sub-leases, tim-
ing of the various steps of the program and in consequence timing of
the expected cash flows.
Generally, the subsidiaries, which are undertaking the restruc-
turing program, set up a formal plan and determine all underlying
estimates and assumptions. Therefore, it is the Allianz Group’s policy
that the subsidiaries are responsible for an adequate planning pro-
cess, controlling the execution of the program, and for the fulfillment
of all requirements of IFRS. The respective documentation has to be
submitted to the Allianz Group Accounting and Reporting department,
where qualified staff members review all restructuring programs.
This includes a review of all estimates and assumptions, and an
assessment of whether all requirements for setting up a restructuring
provision are satisfied, including which cost components can be
treated as restructuring charges.
1
2
Please refer to note 2 Summary of significant accounting policies and note 42 Income taxes for further
details.
Please refer to note 2 Summary of significant accounting policies and note 47 Pensions and similar obliga-
tions for further details.
3
Please refer to note 2 Summary of significant accounting policies and note 49 Restructuring plans for
further details.
146
Annual Report 2013
Allianz Group
D
Consolidated Financial Statements
127 Consolidated Balance Sheets
128 Consolidated Income Statements
129 Consolidated Statements of
Comprehensive Income
130 Consolidated Statements of
134 Notes to the Consolidated Financial
Changes in Equity
Statements
131 Consolidated Statements of
Cash Flows
4 – Recently adopted and issued
accounting pronouncements and changes
in the presentation of the consolidated
financial statements
recently adopted accounting pronouncements
effective 1 January 2013
Amendments to ias 19, Employee Benefits
The amendments eliminate the corridor approach and require all
actuarial gains and losses to be recognized immediately in other
comprehensive income (OCI). While all remeasurements need to be
recognized in OCI, service and interest costs have to be recognized in
the profit or loss account. The long-term return on plan assets has to
be calculated using the same interest rate used to discount the
defined benefit obligation (DBO).
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 Jan-
uary 2012 and as of 31 December 2012.
cHange oF consolidated Balance sHeet relating to amendments to ias 19,
employee BeneFits as oF 1 January 2012
€ mn
as of 1 January 2012
Deferred tax assets
Other assets
Total assets
Reserves for insurance and
investment contracts
Deferred tax liabilities
Other liabilities
Total liabilities
Shareholders’ equity
Non-controlling interests
Total equity
As previously
reported
Amendments
to ias 19
2,321
34,346
641,472
361,954
3,881
31,210
594,219
44,915
2,338
47,253
153
(303)
(150)
2
(467)
1,821
1,356
(1,458)
(48)
(1,506)
As reported
2,474
34,043
641,322
361,956
3,414
33,031
595,575
43,457
2,290
45,747
cHange oF consolidated Balance sHeet relating to amendments to ias 19,
employee BeneFits as oF 31 decemBer 2012
€ mn
as of 31 December 2012
Deferred tax assets
Other assets
Total assets
Reserves for insurance and
investment contracts
Deferred tax liabilities
Other liabilities
Total liabilities
Shareholders’ equity
Non-controlling interests
Total equity
As previously
reported
Amendments
to ias 19
1,270
35,626
694,621
390,987
5,169
33,175
638,403
53,553
2,665
56,218
256
(430)
(174)
(2)
(1,134)
4,217
3,081
(3,165)
(90)
(3,255)
As reported
1,526
35,196
694,447
390,985
4,035
37,392
641,484
50,388
2,575
52,963
Total liabilities and equity
694,621
(174)
694,447
The adoption of the amendments to IAS 19 on the consolidated
income statement for the year ended 31 December 2012 led to an
increase in income before income taxes of € 88 mn and an increase in
income taxes of € 21 mn. This resulted in an increase in the earnings
per share of 14 cents.
The impact on the total other comprehensive income was
€ (1,816) mn for the year ended 31 December 2012.
The impact on the consolidated statements of cash flows was
immaterial.
Further adopted accounting pronouncements
In addition to the amendments to IAS 19, Employee Benefits, the fol-
lowing new standard, amendments and revisions to existing stan-
dards became effective for the Allianz Group’s consolidated financial
statements as of 1 January 2013:
− IAS 1, Presentation of Financial Statements – Amendment to
Presentation of Items of Other Comprehensive Income,
Total liabilities and equity
641,472
(150)
641,322
− IFRS 7, Financial Instruments: Disclosures – Amendments to Off-
setting Financial Assets and Financial Liabilities,
− IFRS 13, Fair Value Measurement,
− Annual Improvements to IFRS 2009-2011.
The Allianz Group adopted the new standard, the revisions and
amendments as of 1 January 2013, with no material impact on its
financial results or financial position.
Annual Report 2013
Allianz Group
147
recently issued accounting pronouncements
effective on or after 1 January 2014 and not adopted early
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.
iFrss 10, 11, 12, Amendments to ias 27 and 28
– Consolidation
As part of the consolidation project, the IASB issued IFRSs 10, 11 and
12 as well as amendments to IAS 27 and IAS 28 in May 2011. Further
amendments were issued in 2012 on transition guidance and invest-
ment entities. These new standards and amendments are generally
effective for periods beginning on or after 1 January 2013. However,
the E.U. endorsed these IFRSs with a mandatory effective date for peri-
ods beginning on or after 1 January 2014. The aim of the consolidation
project was to develop a single consolidation model that applies the
same criteria for all entities. In this context, the IASB reaffirmed the
control concept as the primary determinant for consolidation, revised
the definition of ‘control’ and enhanced related disclosure require-
ments. IFRS 10, Consolidated Financial Statements, supersedes the
requirements of IAS 27, Consolidated and Separate Financial State-
ments, for consolidated financial statements as well as SIC-12, Con-
solidation – Special Purpose Entities. Financial reporting in separate
financial statements is set out by the amended version of IAS 27. The
revised version of IAS 28, Investments in Associates and Joint Ven-
tures, supersedes the former IAS 28, Investments in Associates. It
defines ‘significant influence’, provides guidance on the application
of the equity method of accounting and describes how impairment
is assessed in associates and joint ventures. IFRS 11, Joint Arrange-
ments, supersedes IAS 31, Interests in Joint Ventures, as well as SIC-13,
Jointly Controlled Entities – Non-Monetary Contributions by Ven-
tures. The standard requires entities to define their rights and obliga-
tions 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 begin-
ning 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.
Further amendments and interpretations
In addition to the above-mentioned recently issued accounting pro-
nouncements, the following amendments and revisions to standards
and interpretations have been issued by the IASB but are not yet
effective for or early adopted by the Allianz Group.
FurtHer amendments and interpretations
standard/interpretation
eFFectiVe date
ias 19, Defined Benefit Plans: Employee Contributions
Annual periods beginning on or after 1 July 2014
ias 36, Impairment of assets: Recoverable Amount Disclosures for Non-Financial Assets
Annual periods beginning on or after 1 January 2014
ias 39, Financial Instruments: Recognition and Measurement: Novation of Derivatives
and Continuation of Hedge Accounting
Annual periods beginning on or after 1 January 2014
iFrs 14, Regulatory Deferral Accounts
iFric 21, Levies
Annual Improvements to iFrs 2010-2012
Annual Improvements to iFrs 2011-2013
Annual periods beginning on or after 1 January 2016
Annual periods beginning on or after 1 January 2014
Annual periods beginning on or after 1 July 2014
Annual periods beginning on or after 1 July 2014
The amendments and interpretations are not expected to have a
material impact on the financial position and financial results of the
Allianz Group. Early adoption is generally allowed but not intended
by the Allianz Group.
148
Annual Report 2013
Allianz Group
D
Consolidated Financial Statements
127 Consolidated Balance Sheets
128 Consolidated Income Statements
129 Consolidated Statements of
Comprehensive Income
130 Consolidated Statements of
134 Notes to the Consolidated Financial
Changes in Equity
Statements
131 Consolidated Statements of
Cash Flows
Change in presentation
of consolidated statements of cash flows
The Allianz Group has changed the presentation of policyholders’
account deposits and withdrawals in its consolidated statements of
cash flows from cash flow from financing activities to cash flow from
operating activities. The change in presentation has been applied
retrospectively.
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 those cash flows relate to
the insurance activities of the Allianz Group. The change in presenta-
tion results in a consistent presentation of all cash flows from insur-
ance activities as cash flows from operating activities.
The following table presents the impact of the change in presen-
tation 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
2012
Net cash flow provided by
operating activities
Net cash flow used in financing
activities
Cash and cash equivalents at
end of period
As previously
reported
Change in
presentation
As reported
17,793
1,095
18,888
(941)
(1,095)
(2,036)
12,437
–
12,437
otHer reclassiFications
Certain prior-period amounts have been reclassified to conform to
the current period presentation.
cHanges in tHe presentation
oF tHe consolidated Financial statements
Change in presentation of discounted
loss reserves in the business segment Property-Casualty
Effective 1 January 2013, the Allianz Group prospectively 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”. In the consolidated income statement, the unwinding of
the discounted loss reserves is now presented in “Change in reserves
for insurance and investment contracts (net)”.
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 per-
formance indicator “combined ratio” reflects the net underwriting
result.
The following tables present the impacts of the change in pre-
sentation of discounted loss reserves.
cHange oF consolidated Balance sHeet relating to cHange in presentation oF
discounted loss reserVes
€ mn
as of 31 December 2013
Reserves for loss and loss
adjustment expenses
Reserves for insurance and
investment contracts
Total liabilities
Before change
in presentation
Change in
presentation
As reported
69,773
(3,207)
66,566
400,865
658,681
3,207
–
404,072
658,681
cHange oF consolidated income statement relating to cHange in presentation
oF discounted loss reserVes
€ mn
2013
Claims and insurance benefits
incurred (net)
Change in reserves for insurance
and investment contracts (net)
Net income
Loss ratio in %
Combined ratio in %
Before change
in presentation
Change in
presentation
As reported
(47,890)
88
(47,802)
(13,902)
6,344
66.1
94.5
(88)
–
(0.2)
(0.2)
(13,990)
6,344
65.9
94.3
Annual Report 2013
Allianz Group
149
5 – Consolidation
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.
The companies listed in the table below are consolidated in
addition to the parent company Allianz SE.
scope oF consolidation
Number of fully consolidated companies
(subsidiaries) 1
Germany
Other countries
Subtotal
Number of fully consolidated investment funds
Germany
Other countries
Subtotal
Number of fully consolidated special purpose
entities (spes)
Total number of fully consolidated entities
Number of joint ventures valued at equity
Number of associates valued at equity
2013
2012
130
689
819
38
38
76
7
902
23
108
130
701
831
40
34
74
7
912
17
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 sub-
sidiary owning 50.0 % of each such entity and the other shareholders. Pursuant to the shareholder agree-
ment 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.
All subsidiaries, joint ventures and associates are individually listed
in the list of participations of the Allianz Group from
page 233 of
this Annual Report onwards.
150
Annual Report 2013
Allianz Group
D
Consolidated Financial Statements
127 Consolidated Balance Sheets
128 Consolidated Income Statements
129 Consolidated Statements of
Comprehensive Income
130 Consolidated Statements of
134 Notes to the Consolidated Financial
Changes in Equity
Statements
131 Consolidated Statements of
Cash Flows
signiFicant acquisitions
signiFicant acquisitions
2013
HsBc Taiwan Life branch, Taipei
Yapı Kredi Sigorta a.Ş., Istanbul
Business portfolios from Pastor Vida s.a. de Seguros y
Reaseguros, Madrid
2012
Equity interest
Date of initial
consolidation
Segment
%
–
21 June 2013
Life/Health
94.0
12 July 2013
Property-Casualty
–
31 December 2013
Life/Health /
Asset Management
Insurance activities of Mensura cca, Brussels
Brokerage portfolio-related activities of Gan Eurocourtage, Paris
–
–
1 August 2012
Property-Casualty
1 October 2012
Property-Casualty
1
At the date of initial consolidation.
Goodwill 1
€ mn
Transaction
–
222
–
(3)
67
Acquisition
Acquisition
Acquisition
Acquisition
Acquisition
The impact of the acquisition of the HSBC Taiwan Life branch on the
total revenues and net income of the Allianz Group since the acquisi-
tion date, as well as if the acquisition date had been 1 January 2013,
was not material.
Yapı Kredi Sigorta a.Ş.
On 12 July 2013, the Allianz Group acquired Yapı Kredi Bank’s 93.94 %
shareholding in the Turkish property-casualty insurance company
Yapı Kredi Sigorta, including its life and pension insurance subsidiary
Yapı Kredi Emeklilik. Yapı Kredi Bank ultimately retains a 20 % stake in
Yapı Kredi Emeklilik to support the long-term strategic partnership
with Allianz. This transaction is consistent with the Allianz Group’s
strategy to access growth through strategic relationships in high-
growth insurance markets. The consideration paid, net of proceeds
received from the sale of the Yapı Kredi Emeklilik stake to Yapı Kredi
Bank, amounted to € 639 mn (TRY 1,603 mn), while the total gross con-
sideration paid in cash to Yapı Kredi Bank amounted to € 714 mn
(TRY 1,791 mn). For the year ended 31 December 2013, acquisition-
related expenses in the amount of approximately € 6 mn were included
in administrative expenses.
The following two tables summarize the consideration trans-
ferred, the recognized amounts of assets acquired and liabilities
assumed as well as the determination of goodwill:
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) Lim-
ited 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
Consideration transferred
Cash consideration transferred
Purchase price adjustment
Total consideration transferred
Identifiable assets acquired and liabilities assumed
Cash and cash equivalents
Investments
Loans and advances to banks and customers
Financial assets for unit-linked contracts
Deferred acquisition costs
Reserves for insurance and investment contracts
Financial liabilities for unit-linked contracts
Deferred tax liabilities
Other liabilities
Total net identifiable assets
Fair value
14
(14)
–
6
69
3
35
15
(90)
(35)
(2)
(1)
–
Annual Report 2013
Allianz Group
151
yapi Kredi sigorta a.Ş. and yapi Kredi emeKliliK a.Ş. – consideration
transFerred and identiFiaBle assets and liaBilities
€ mn
Consideration transferred
Cash paid for 93.94 % Yapı Kredi Sigorta shares
Cash received for sale of 19.93 % Yapı Kredi Emeklilik stake
Total consideration transferred
Identifiable assets acquired and liabilities assumed
Cash and cash equivalents
(excluding 19.93 % Yapı Kredi Emeklilik sale)
Investments
Loans and advances to banks and customers
Financial assets for unit-linked contracts
Reinsurance assets
Deferred acquisition costs (pVFp)
Other assets
Intangible assets
Unearned premiums
Reserves for loss and loss adjustment expenses
Reserves for insurance and investment contracts
Financial liabilities for unit-linked contracts
Deferred tax liabilities
Other liabilities
Total net identifiable assets
Fair value
714
(75)
639
334
247
7
1,612
133
214
197
232
(264)
(174)
(193)
(1,612)
(82)
(127)
524
yapi Kredi sigorta a.Ş. and yapi Kredi emeKliliK a.Ş. – determination oF
goodWill
As a result of the purchase of shares representing 93.94 % of the
share capital of Yapı Kredi Sigorta on 12 July 2013, after confirmation
by the Turkish Capital Market Board, Allianz SE made a mandatory
tender offer of TRY 18.8114 per share for the remaining shares of Yapı
Kredi Sigorta. On 14 October 2013, Allianz SE started the purchases.
Until the end of the mandatory tender offer on 18 November 2013,
Allianz SE has purchased shares in the amount of € 41 mn and
increased its ownership in Yapı Kredi Sigorta to 99.78 %. Additional
shares could be acquired during an additional mandatory tender
offer in the context of the planned delisting of the company. Terms of
this offer are subject to requested regulatory approval.
Business portfolios of
Pastor Vida s.a. de Seguros y Reaseguros
On 31 December 2013, the Allianz Group acquired the assets and
assumed the liabilities related to a life-risk insurance business and
to the pension-funds management business from Pastor Vida S.A. de
Seguros y Reaseguros, Madrid, which is a subsidiary of Banco Popular
Espanol S.A., Madrid. The acquisition of the life and pension business
from Pastor Vida represents an opportunity for the Allianz Group to
expand its existing market presence in Spain and to realize further
scale benefits. For the year ended 31 December 2013, acquisition-
related expenses in the amount of approximately € 1 mn were included
in administrative expenses.
The following table summarizes the consideration transferred
and the recognized amounts of assets acquired and liabilities
assumed:
Fair value
Business portFolios From pastor Vida – consideration transFerred and
identiFiaBle assets and liaBilities
€ mn
Goodwill recognition
Total consideration transferred
Total net identifiable assets
Non-controlling interests 1
Goodwill
€ mn
639
524
(107)
222
Consideration transferred
Cash consideration transferred
Total consideration transferred
1
Based on their proportionate interest in the recognized amounts of the assets and liabilities of the
acquiree.
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 acquisi-
tion was € 475 mn and € 3 mn, respectively. The gross premiums writ-
ten, 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.
Identifiable assets acquired and liabilities assumed
Cash and cash equivalents
Reinsurance assets
Deferred acquisition costs (pVFp)
Other assets
Intangible assets
Unearned premiums
Reserves for loss and loss adjustment expenses
Deferred tax liabilities
Total net identifiable assets
152
Annual Report 2013
Allianz Group
Fair value
50
50
14
1
25
1
20
(6)
(4)
(1)
50
D
Consolidated Financial Statements
127 Consolidated Balance Sheets
128 Consolidated Income Statements
129 Consolidated Statements of
Comprehensive Income
130 Consolidated Statements of
134 Notes to the Consolidated Financial
Changes in Equity
Statements
131 Consolidated Statements of
Cash Flows
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.
signiFicant disposals and deconsolidations
During 2013 and 2012, no significant disposals or deconsolidations
occurred.
signiFicant cHanges in non-controlling interests
acquisitions oF signiFicant non-controlling interests
Date of acquisition
Equity
interest change
2013
Protexia France s.a., Paris
Antoniana Veneta Popolare Assicurazioni S.p.A., Trieste
pt Asuransi Allianz Utama Indonesia Ltd., Jakarta
Yapı Kredi Sigorta a.Ş., Istanbul
5 March 2013
20 September 2013
12 November 2013
from 14 October
until 18 November
2013
2012
Alida Grundstücksgesellschaft mbH & Co. Kg, Hamburg
Allianz-Slovenská poist’ovna a.s., Bratislava
Allianz Insurance plc, Guildford
4 April 2012
1 June 2012
3 September 2012
%
34.0
50.0
22.8
5.8
39.8
15.0
2.0
Costs of acquisition
€ mn
22
9
9
41
22
144
29
Increase / (decrease)
in shareholders’
equity
Decrease in
non-controlling
interests
€ mn
(11)
–
(4)
(12)
12
(49)
(2)
€ mn
(11)
(9)
(5)
(29)
(34)
(95)
(27)
disposals oF signiFicant controlling interests
2012
Euler Hermes Real Estate opci, Paris
12 December 2012
(40.0)
55
Date of disposal
Equity
interest change
%
Price of sale
€ mn
Increase in
shareholders’ equity
Increase in
non-controlling
interests
€ mn
7
€ mn
48
Annual Report 2013
Allianz Group
153
Asset Management
The reportable segment Asset Management operates as a global pro-
vider of institutional and retail asset manage ment products and ser-
vices 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 pri-
mary asset management markets.
Corporate and Other
The reportable segment Holding & Treasury includes the manage-
ment and support of the Allianz Group’s businesses through its stra-
tegy, 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 pri-
mary focus on the latter. The reportable segment Alternative Invest-
ments 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 opera-
tions. 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.
general segment reportIng InformatIon
Prices for transactions between reportable segments are set on an
arm’s length basis in a manner similar to trans actions with third par-
ties. Transactions between reportable segments are eliminated in the
Consolidation. For the reportable segment Asset Management, inte-
rest revenues are reported net of interest expenses. Financial infor-
mation is recorded based on reportable segments. Cross-segmental
country-specific information is not determined.
6 – Segment reporting
IdentIfIcatIon of reportable segments
The business activities of the Allianz Group are first organized by pro-
duct and type of service: insurance activities, asset management
activities and corporate and other activ ities. Due to differences in
the nature of products, risks and capital allocation, insurance activi-
ties are further divided into the Property-Casualty and Life/Health
cat egories. In accordance with the responsibilities of the Board of
Management, each of the insurance categories is grouped into the
following reportable segments:
− German Speaking Countries,
− Western & Southern Europe,
− Iberia & Latin America,
− USA,
− Global Insurance Lines & Anglo Markets,
− Growth Markets,
− Allianz Worldwide Partners (Property-Casualty only).
Asset management activities represent a separate reportable seg-
ment. Due to differences in the nature of products, risks and capital
allocation, corporate and other activities are divided into three repor-
table segments: Holding & Treasury, Banking and Alternative Invest-
ments. In total, the Allianz Group has identified 17 reportable seg-
ments in accordance with IFRS 8, Operating Segments.
The types of products and services from which reportable seg-
ments derive revenue are described below.
Property-Casualty
In the Property-Casualty category, reportable segments offer a wide
variety of insurance products to both private and corporate custo-
mers, including motor liability and own damage, accident, general
liability, fire and property, legal expense, credit and travel insurance.
Life/Health
In the Life/Health category, reportable segments offer a comprehen-
sive range of life and health insurance products on both an individual
and a group basis, including annuities, endowment and term insu-
rance, unit-linked and investment-oriented products as well as full
private health and supplemental health and long-term care insurance.
154
Annual Report 2013
Allianz Group
D
Consolidated Financial Statements
127 Consolidated Balance Sheets
128 Consolidated Income Statements
129 Consolidated Statements of
Comprehensive Income
130 Consolidated Statements of
134 Notes to the Consolidated Financial
Changes in Equity
Statements
131 Consolidated Statements of
Cash Flows
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.
− For Life/Health insurance business and Property-Casualty insur-
ance products with premium refunds, all items listed above are
included in operating profit if the profit sources are shared with
policyholders. This is also applicable to tax benefits, which are
shared with policyholders. IFRS requires that the consolidated
income statements present all tax benefits in the income taxes
line item, even though these belong to policyholders. In the seg-
ment reporting, the tax benefits are reclassified and shown
within operating profit in order to adequately reflect the policy-
holder participation in tax benefits.
Operating profit should be viewed as complementary to, and not as
a substitute for, income before income taxes or net income as deter-
mined in accordance with IFRS.
Effective 1 January 2013, all restructuring charges are presented
within operating profit. This change does not impact recognition and
measurement of the restructuring charges, shareholders’ equity and
net income.
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. Opera-
ting profit highlights the portion of income before income taxes attri-
butable 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 under-
standing of the Allianz Group’s underlying operating performance
and the comparability of its operating performance over time.
To better understand the ongoing operations of the business, the
Allianz Group generally excludes the following non-operating effects:
− acquisition-related expenses and the amortization of intangible
assets, as these relate to business combinations,
− interest expenses from external debt, as these relate to the capi-
tal structure of the Allianz Group,
− income from fully consolidated private equity investments (net),
as this represents income from industrial holdings, which is out-
side the Allianz Group’s normal scope of operating business,
− income from financial assets and liabilities carried at fair value
through income (net), as this does not reflect the Allianz Group’s
long-term performance,
− realized capital gains and losses (net) or impairments of invest-
ments (net), as the timing of sales that would result in such real-
ized gains or losses is largely at the discretion of the Allianz
Group and impairments are largely dependent on market cycles
or issuer-specific events over which the Allianz Group has little
or no control and which can and do vary, sometimes materially,
through time.
Annual Report 2013
Allianz Group
155
busIness segment InformatIon – consolIdated balance sheets
busIness segment InformatIon – consolIdated balance sheets
Property-Casualty
Life/Health
Asset Management
Corporate and Other
Consolidation
2013
2012
2013
2012
2013
2012
2013
2012
2,773
643
88,409
16,131
–
7,922
4,354
1,083
21,664
131
2,478
145,588
2,707
624
90,168
18,331
–
8,432
4,323
1,096
21,633
–
2,336
149,650
5,828
6,165
308,919
89,922
81,064
4,717
17,690
261
17,850
–
2,640
535,056
5,574
6,150
301,111
94,080
71,197
4,858
14,990
245
16,753
12
2,207
517,177
Property-Casualty
Life/Health
Asset Management
Corporate and Other
Consolidation
2013
2012
78
1,189
15,367
56,614
13,389
–
2,154
17,109
37
–
100
1,146
15,328
62,711
10,174
–
2,562
16,887
25
–
2013
5,869
2,260
2,855
9,961
390,873
81,064
2,420
14,507
12
95
2012
5,255
1,972
2,618
9,854
380,993
71,197
3,276
14,107
–
95
105,937
108,933
509,916
489,367
(752)
(468)
(91,189)
(7,868)
(1,567)
(360)
(90,849)
(10,333)
(30)
(36)
(1,684)
(14,527)
(2,289)
(11,076)
–
–
–
–
–
–
–
–
(116,518)
(116,510)
2013
1,861
598
1,149
449
–
–
159
167
2,188
16
7,268
13,855
1
–
–
–
–
124
2,562
–
14
4,015
2012
1,514
699
1,116
395
–
–
–
139
257
2,316
7,407
13,843
–
–
–
–
–
174
2,780
–
14
4,366
1,497
307
103,727
18,166
1,681
7,457
714
133,549
–
–
–
–
–
–
–
–
4,209
170
100,082
16,896
2,217
5,570
1,140
130,287
–
–
–
3
–
–
–
–
2013
2012
2013
2012
2013
2012
1,314
1,398
534
21,337
403
22,791
(469)
(2,991)
(10)
(9)
(190)
–
(1,684)
(20,900)
(5,205)
(64)
(31,522)
(361)
(4,882)
(7)
(25)
(182)
–
(2,289)
(18,135)
(6,740)
(64)
(32,685)
Total equity
Total liabilities and equity
164
23,605
13,186
11,509
70,335
312
21,753
14,675
11,569
71,503
Group
2013
11,207
7,245
411,015
116,800
81,064
12,609
22,203
1,508
34,632
147
13,100
711,530
Group
2013
6,013
23,109
18,212
66,566
404,072
81,064
3,178
36,883
8,030
11,554
658,681
52,849
711,530
2012
12,437
7,283
401,628
119,369
71,197
13,254
19,452
1,526
35,196
15
13,090
694,447
2012
5,397
22,425
17,939
72,540
390,985
71,197
4,035
37,392
7,960
11,614
641,484
52,963
694,447
€ mn
as of 31 December
assets
Cash and cash equivalents
Financial assets carried at fair value through income
Investments
Loans and advances to banks and customers
Financial assets for unit-linked contracts
Reinsurance assets
Deferred acquisition costs
Deferred tax assets
Other assets
Non-current assets classified as held for sale
Intangible assets
Total assets
€ mn
as of 31 December
lIabIlItIes and eQuItY
Financial liabilities carried at fair value through income
Liabilities to banks and customers
Unearned premiums
Reserves for loss and loss adjustment expenses
Reserves for insurance and investment contracts
Financial liabilities for unit-linked contracts
Deferred tax liabilities
Other liabilities
Certificated liabilities
Subordinated liabilities
Total liabilities
156
Annual Report 2013
Allianz Group
D
Consolidated Financial Statements
127 Consolidated Balance Sheets
128 Consolidated Income Statements
129 Consolidated Statements of
Comprehensive Income
130 Consolidated Statements of
134 Notes to the Consolidated Financial
Changes in Equity
Statements
131 Consolidated Statements of
Cash Flows
busIness segment InformatIon – consolIdated balance sheets
busIness segment InformatIon – consolIdated balance sheets
Property-Casualty
Life/Health
Asset Management
Corporate and Other
Consolidation
2013
1,861
598
1,149
449
–
–
159
167
2,188
16
7,268
13,855
2012
1,514
699
1,116
395
–
–
139
257
2,316
–
7,407
13,843
2013
2012
2013
2012
1,497
307
103,727
18,166
–
–
–
1,681
7,457
–
714
133,549
4,209
170
100,082
16,896
–
–
–
2,217
5,570
3
1,140
130,287
(752)
(468)
(91,189)
(7,868)
–
(30)
–
(1,684)
(14,527)
–
–
(1,567)
(360)
(90,849)
(10,333)
–
(36)
–
(2,289)
(11,076)
–
–
(116,518)
(116,510)
Property-Casualty
Life/Health
Asset Management
Corporate and Other
Consolidation
2013
1
1,314
–
–
–
–
124
2,562
–
14
4,015
2012
–
1,398
–
–
–
–
174
2,780
–
14
4,366
2013
2012
2013
2012
534
21,337
–
–
–
–
164
23,605
13,186
11,509
70,335
403
22,791
–
–
–
–
312
21,753
14,675
11,569
71,503
(469)
(2,991)
(10)
(9)
(190)
–
(1,684)
(20,900)
(5,205)
(64)
(31,522)
Total equity
Total liabilities and equity
(361)
(4,882)
(7)
(25)
(182)
–
(2,289)
(18,135)
(6,740)
(64)
(32,685)
€ mn
as of 31 December
assets
Cash and cash equivalents
Financial assets carried at fair value through income
Investments
Loans and advances to banks and customers
Financial assets for unit-linked contracts
Reinsurance assets
Deferred acquisition costs
Deferred tax assets
Other assets
Intangible assets
Total assets
Non-current assets classified as held for sale
€ mn
as of 31 December
lIabIlItIes and eQuItY
Financial liabilities carried at fair value through income
Liabilities to banks and customers
Unearned premiums
Reserves for loss and loss adjustment expenses
Reserves for insurance and investment contracts
Financial liabilities for unit-linked contracts
Deferred tax liabilities
Other liabilities
Certificated liabilities
Subordinated liabilities
Total liabilities
2013
2012
2013
2012
2,773
643
88,409
16,131
–
7,922
4,354
1,083
21,664
131
2,478
145,588
78
1,189
15,367
56,614
13,389
–
2,154
17,109
37
–
2,707
624
90,168
18,331
–
8,432
4,323
1,096
21,633
–
2,336
149,650
100
1,146
15,328
62,711
10,174
–
2,562
16,887
25
–
5,828
6,165
308,919
89,922
81,064
4,717
17,690
261
17,850
–
2,640
535,056
2013
5,869
2,260
2,855
9,961
390,873
81,064
2,420
14,507
12
95
2013
2012
5,574
6,150
301,111
94,080
71,197
4,858
14,990
245
16,753
12
2,207
517,177
2012
5,255
1,972
2,618
9,854
380,993
71,197
3,276
14,107
–
95
105,937
108,933
509,916
489,367
Group
2013
11,207
7,245
411,015
116,800
81,064
12,609
22,203
1,508
34,632
147
13,100
711,530
Group
2013
6,013
23,109
18,212
66,566
404,072
81,064
3,178
36,883
8,030
11,554
658,681
52,849
711,530
2012
12,437
7,283
401,628
119,369
71,197
13,254
19,452
1,526
35,196
15
13,090
694,447
2012
5,397
22,425
17,939
72,540
390,985
71,197
4,035
37,392
7,960
11,614
641,484
52,963
694,447
Annual Report 2013
Allianz Group
157
busIness segment InformatIon – total revenues and reconcIlIatIon of operatIng profIt (loss)
to net Income (loss)
busIness segment InformatIon – total revenues and reconcIlIatIon of operatIng profIt (loss) to net Income (loss)
Property-Casualty
Life/Health
Asset Management
Corporate and Other
Consolidation
Group
€ mn
Total revenues 1
Premiums earned (net)
Operating investment result
Interest and similar income
Operating income from financial assets and liabilities carried at fair value through
income (net)
Operating realized gains/losses (net)
Interest expenses, excluding interest expenses from external debt
Operating impairments of investments (net)
Investment expenses
Subtotal
Fee and commission income
Other income
2013
46,579
42,047
3,595
(76)
69
(52)
(11)
(315)
3,210
1,226
47
2012
46,889
41,705
3,770
(46)
168
(47)
(17)
(307)
3,521
1,165
35
Claims and insurance benefits incurred (net)
(27,713)
(28,491)
Change in reserves for insurance and investment contracts (net) 2
Loan loss provisions
Acquisition and administrative expenses (net), excluding acquisition-related expenses
Fee and commission expenses
Restructuring charges
Other expenses
Reclassification of tax benefits
Operating profit (loss)
Non-operating investment result
Non-operating income from financial assets and liabilities carried at fair value through
income (net)
Non-operating realized gains/losses (net)
Non-operating impairments of investments (net)
Subtotal
Income from fully consolidated private equity investments (net)
Interest expenses from external debt
Acquisition-related expenses
Amortization of intangible assets
Reclassification of tax benefits
Non-operating items
Income (loss) before income taxes
Income taxes
Net income (loss)
Net income (loss) attributable to:
Non-controlling interests
Shareholders
(384)
–
(11,942)
(1,141)
(61)
(21)
–
5,268
26
520
(217)
329
–
–
–
(33)
–
296
5,564
(1,746)
3,818
168
3,650
(430)
–
(11,634)
(1,088)
(146)
(23)
–
4,614
(80)
671
(232)
359
–
–
–
(31)
–
328
4,942
(1,437)
3,505
179
3,326
2013
56,784
24,581
16,766
(1,829)
3,293
(81)
(331)
(839)
16,979
646
157
(20,096)
(13,556)
–
(5,603)
(251)
(50)
(98)
–
2,709
27
88
(16)
99
–
–
–
(15)
–
84
2,793
(852)
1,941
80
1,861
2012
52,347
24,393
16,832
(727)
3,044
(84)
(428)
(759)
17,878
534
154
(20,386)
(13,971)
–
(5,316)
(228)
(27)
(88)
–
2,943
13
132
(49)
96
–
–
–
(4)
–
92
3,035
(1,001)
2,034
84
1,950
(28)
(28)
(623)
2013
7,162
–
40
13
8,611
25
10
(3,995)
(1,484)
(6)
–
–
–
–
–
–
–
–
–
2
–
2
–
–
–
(31)
(26)
(55)
3,106
(1,181)
1,925
93
1,832
2012
6,786
–
52
16
–
–
–
–
–
–
–
–
8,041
40
15
(3,770)
(1,310)
(63)
–
26
(1)
25
–
–
–
(94)
(45)
(114)
2,839
(1,029)
1,810
51
1,759
2013
551
903
40
(83)
237
687
–
–
–
1
–
–
(86)
(1,295)
(493)
(53)
(2)
–
(46)
346
(80)
220
(17)
(901)
(2)
(106)
–
(806)
(1,810)
476
(1,334)
7
(1,341)
2012
590
980
30
(765)
(103)
142
614
–
–
–
8
–
–
(111)
(1,238)
(494)
(32)
(3)
–
236
166
(222)
180
(26)
(991)
(7)
(203)
–
(1,047)
(2,161)
307
(1,854)
13
(1,867)
3,161
2,953
(1,004)
(1,114)
2013
(303)
–
(386)
(14)
(29)
363
44
332
310
(678)
(6)
(50)
7
–
3
331
15
–
–
(68)
17
(4)
–
13
2
–
–
44
–
59
(9)
3
(6)
–
(6)
2012
(229)
(53)
(550)
(542)
6
3
438
24
293
214
2
4
41
–
13
–
20
17
225
(59)
41
117
(9)
149
(33)
–
–
24
(17)
123
64
(1)
63
–
63
2013
110,773
66,628
20,918
(1,866)
3,333
(421)
(298)
(905)
20,761
10,492
209
(47,802)
(13,990)
(86)
(22,832)
(3,038)
(170)
(106)
–
10,066
24
952
(313)
663
(15)
(901)
(33)
(136)
–
(422)
9,644
(3,300)
6,344
348
5,996
2012
106,383
66,045
21,084
(721)
3,215
(486)
(421)
(876)
21,795
9,812
214
(48,873)
(14,360)
(111)
(21,945)
(2,895)
(268)
(94)
17
9,337
210
1,112
(513)
809
(59)
(991)
(101)
(259)
(17)
(618)
8,719
(3,161)
5,558
327
5,231
1
Total revenues comprise statutory gross premiums written in Property-Casualty and Life/Health, operat-
ing revenues in Asset Management and total revenues in Corporate and Other (Banking).
2
For the year ended 31 December 2013, includes expenses for premium refunds (net) in Property-Casualty
of € (162) mn (2012: € (292) mn).
158
Annual Report 2013
Allianz Group
busIness segment InformatIon – total revenues and reconcIlIatIon of operatIng profIt (loss)
busIness segment InformatIon – total revenues and reconcIlIatIon of operatIng profIt (loss) to net Income (loss)
to net Income (loss)
€ mn
Total revenues 1
Premiums earned (net)
Operating investment result
Interest and similar income
Investment expenses
Subtotal
Fee and commission income
Other income
Loan loss provisions
Fee and commission expenses
Restructuring charges
Other expenses
Reclassification of tax benefits
Operating profit (loss)
Interest expenses from external debt
Acquisition-related expenses
Amortization of intangible assets
Reclassification of tax benefits
Non-operating items
Income (loss) before income taxes
Income taxes
Net income (loss)
Net income (loss) attributable to:
Non-controlling interests
Shareholders
Operating income from financial assets and liabilities carried at fair value through
income (net)
Operating realized gains/losses (net)
Interest expenses, excluding interest expenses from external debt
Operating impairments of investments (net)
Claims and insurance benefits incurred (net)
(27,713)
(28,491)
Change in reserves for insurance and investment contracts (net) 2
Acquisition and administrative expenses (net), excluding acquisition-related expenses
(11,942)
(1,141)
(11,634)
(1,088)
Non-operating investment result
Non-operating income from financial assets and liabilities carried at fair value through
Non-operating realized gains/losses (net)
Non-operating impairments of investments (net)
income (net)
Subtotal
Income from fully consolidated private equity investments (net)
2013
46,579
42,047
3,595
(76)
69
(52)
(11)
(315)
3,210
1,226
47
(384)
–
(61)
(21)
–
5,268
26
520
(217)
329
–
–
–
–
(33)
296
5,564
(1,746)
3,818
168
3,650
2012
46,889
41,705
3,770
(46)
168
(47)
(17)
(307)
3,521
1,165
35
(430)
–
(146)
(23)
–
4,614
(80)
671
(232)
359
–
–
–
–
(31)
328
4,942
(1,437)
3,505
179
3,326
2013
56,784
24,581
16,766
(1,829)
3,293
(81)
(331)
(839)
16,979
646
157
(20,096)
(13,556)
–
(5,603)
(251)
(50)
(98)
–
2,709
27
88
(16)
99
–
–
–
–
84
(15)
2,793
(852)
1,941
80
1,861
2012
52,347
24,393
16,832
(727)
3,044
(84)
(428)
(759)
17,878
534
154
(20,386)
(13,971)
–
(5,316)
(228)
(27)
(88)
–
2,943
13
132
(49)
96
–
–
–
–
(4)
92
3,035
(1,001)
2,034
84
1,950
1
Total revenues comprise statutory gross premiums written in Property-Casualty and Life/Health, operat-
2
For the year ended 31 December 2013, includes expenses for premium refunds (net) in Property-Casualty
ing revenues in Asset Management and total revenues in Corporate and Other (Banking).
of € (162) mn (2012: € (292) mn).
D
Consolidated Financial Statements
127 Consolidated Balance Sheets
128 Consolidated Income Statements
129 Consolidated Statements of
Comprehensive Income
130 Consolidated Statements of
134 Notes to the Consolidated Financial
Changes in Equity
Statements
131 Consolidated Statements of
Cash Flows
Property-Casualty
Life/Health
Asset Management
Corporate and Other
Consolidation
Group
2013
7,162
–
40
13
–
(28)
–
–
25
8,611
10
–
–
–
(3,995)
(1,484)
(6)
–
–
3,161
–
2
–
2
–
–
(31)
(26)
–
(55)
3,106
(1,181)
1,925
93
1,832
2012
6,786
–
52
16
–
(28)
–
–
40
8,041
15
–
–
–
(3,770)
(1,310)
(63)
–
–
2013
551
–
903
40
–
(623)
–
(83)
237
687
1
–
–
(86)
(1,295)
(493)
(53)
(2)
–
2012
590
–
980
30
–
(765)
–
(103)
142
614
8
–
–
(111)
(1,238)
(494)
(32)
(3)
–
2,953
(1,004)
(1,114)
–
26
(1)
25
–
–
(94)
(45)
–
(114)
2,839
(1,029)
1,810
51
1,759
(46)
346
(80)
220
(17)
(901)
(2)
(106)
–
(806)
(1,810)
476
(1,334)
7
(1,341)
236
166
(222)
180
(26)
(991)
(7)
(203)
–
(1,047)
(2,161)
307
(1,854)
13
(1,867)
2013
(303)
–
(386)
(14)
(29)
363
44
332
310
(678)
(6)
7
(50)
–
3
331
–
15
–
(68)
17
(4)
–
13
2
–
–
44
–
59
(9)
3
(6)
–
(6)
2012
(229)
(53)
(550)
6
3
438
24
293
214
(542)
2
4
41
–
13
225
–
20
17
(59)
41
117
(9)
149
(33)
–
–
24
(17)
123
64
(1)
63
–
63
2013
110,773
66,628
20,918
(1,866)
3,333
(421)
(298)
(905)
20,761
10,492
209
(47,802)
(13,990)
(86)
(22,832)
(3,038)
(170)
(106)
–
10,066
24
952
(313)
663
(15)
(901)
(33)
(136)
–
(422)
9,644
(3,300)
6,344
348
5,996
Annual Report 2013
Allianz Group
2012
106,383
66,045
21,084
(721)
3,215
(486)
(421)
(876)
21,795
9,812
214
(48,873)
(14,360)
(111)
(21,945)
(2,895)
(268)
(94)
17
9,337
210
1,112
(513)
809
(59)
(991)
(101)
(259)
(17)
(618)
8,719
(3,161)
5,558
327
5,231
159
reportable segments – propertY-casualtY
reportable segments – propertY-casualtY
€ mn
Gross premiums written
Ceded premiums written
Change in unearned premiums
Premiums earned (net)
Interest and similar income
Operating income from financial assets and liabilities carried at fair value through
income (net)
Operating realized gains/losses (net)
Fee and commission income
Other income
Operating revenues
Claims and insurance benefits incurred (net)
Change in reserves for insurance and investment contracts (net)
Interest expenses
Operating impairments of investments (net)
Investment expenses
Acquisition and administrative expenses (net)
Fee and commission expenses
Restructuring charges
Other expenses
Operating expenses
Operating profit (loss)
Non-operating income from financial assets and liabilities carried at fair value
through income (net)
Non-operating realized gains/losses (net)
Non-operating impairments of investments (net)
Amortization of intangible assets
Non-operating items
Income (loss) before income taxes
Income taxes
Net income (loss)
Net income (loss) attributable to:
Non-controlling interests
Shareholders
Loss ratio 2 in %
Expense ratio 3 in %
Combined ratio 4 in %
German Speaking Countries Western & Southern Europe
Iberia & Latin America
Growth Markets
Allianz Worldwide Partners
Consolidation and Other
Property-Casualty
USA 1
Global Insurance Lines &
Anglo Markets
2013
11,748
(1,882)
(5)
9,861
1,125
(53)
69
149
35
2012
11,630
(1,955)
(1)
9,674
1,197
(4)
168
147
29
2013
10,547
(725)
(87)
9,735
880
15
–
23
7
2012
9,496
(655)
(158)
8,683
868
5
–
20
4
2013
4,620
(738)
(72)
3,810
203
6
–
–
–
2012
4,659
(830)
(147)
3,682
208
20
–
1
–
11,186
11,211
10,660
9,580
4,019
3,911
2,224
2,892
13,484
14,215
2,630
2,572
2,801
2,566
(96)
(150)
46,908
46,797
(7,134)
(322)
(20)
(11)
(98)
(2,534)
(132)
(3)
(16)
(6,704)
(385)
(76)
(17)
(96)
(2,584)
(148)
(81)
(18)
(6,070)
(5,642)
(2,611)
(2,533)
(1,376)
(2,683)
(7,574)
(8,186)
(1,491)
(1,438)
(1,457)
(1,305)
(27,713)
(28,491)
(40)
(11)
–
(98)
–
(9)
–
(86)
(2,637)
(2,332)
(35)
(53)
(4)
(34)
(26)
(4)
(4)
(3)
–
(14)
(992)
–
–
–
(1)
(9)
–
(14)
(939)
(1)
(11)
–
(8)
(1)
(3)
(683)
(3)
(752)
(10,270)
(10,109)
(8,948)
(8,133)
(3,624)
(3,508)
(2,070)
(3,438)
(11,699)
(12,361)
(2,428)
(2,340)
(2,699)
(2,444)
150
(41,640)
(42,183)
916
1,102
1,712
1,447
395
403
154
(546)
1,785
1,854
202
232
102
122
5,268
4,614
13
114
(32)
(2)
93
1,009
(283)
726
(4)
730
72.3
25.7
98.0
(26)
321
(88)
(3)
204
1,306
(331)
975
3
972
69.3
26.7
96.0
12
216
(150)
(18)
60
1,772
(684)
1,088
15
1,073
62.3
27.1
89.4
(47)
147
(90)
(7)
3
1,450
(604)
846
17
829
64.9
26.9
91.8
5
18
(15)
(2)
6
401
(127)
274
7
267
68.6
26.0
94.6
(3)
(64)
(17)
(2)
(86)
317
(104)
213
8
205
68.8
25.5
94.3
2013
2,058
(125)
55
1,988
236
–
–
–
–
–
–
–
–
–
2
5
–
–
7
161
(34)
127
–
127
69.2
34.4
103.6
2012
3,550
(962)
66
2,654
239
(1)
–
–
–
–
–
–
1
–
(13)
59
1
–
47
(499)
203
(296)
–
(296)
101.1
28.3
129.4
2013
15,969
(3,841)
(158)
11,970
970
(45)
589
–
–
(10)
(26)
–
(92)
(3,493)
(498)
(6)
–
(6)
153
(16)
(7)
124
1,909
(529)
1,380
119
1,261
63.3
29.2
92.5
2012
16,577
(3,832)
(181)
12,564
1,129
(61)
582
–
1
(46)
(20)
–
(95)
(3,528)
(472)
(13)
(1)
6
200
(18)
(13)
175
2,029
(514)
1,515
123
1,392
65.2
28.0
93.2
2013
3,211
(674)
(150)
2,387
161
1
–
3
78
(3)
–
–
(9)
(852)
(72)
–
(1)
–
10
(4)
(8)
(2)
200
(53)
147
29
118
62.5
35.7
98.2
2012
3,057
(716)
7
2,348
166
(4)
–
61
1
(3)
2
–
(9)
(822)
(65)
(5)
–
2
7
(20)
(13)
(24)
208
(48)
160
26
134
61.3
35.0
96.3
2013
2,507
(78)
(133)
2,296
33
–
–
1
471
(2)
–
–
(1)
(763)
(477)
1
–
–
4
–
–
4
106
(36)
70
2
68
63.5
33.2
96.7
2012
2,186
(43)
(43)
2,100
34
(1)
433
–
–
(1)
1
–
(4)
(692)
(432)
(11)
–
1
1
–
–
2
124
(39)
85
2
83
62.1
33.0
95.1
2013
2012
2013
2012
(4,081)
(4,266)
4,081
4,266
(13)
(71)
(84)
(79)
46,579
(3,982)
(550)
42,047
3,595
(76)
69
1,226
47
46,889
(4,727)
(457)
41,705
3,770
(46)
168
1,165
35
13
12
73
98
–
–
–
–
1
–
–
–
–
–
–
2
–
–
–
4
4
6
–
6
–
6
71
15
64
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
7
7
7
–
7
–
7
–5
–5
–5
–5
–5
–5
(384)
(52)
(11)
(315)
(430)
(47)
(17)
(307)
(11,942)
(11,634)
(1,141)
(1,088)
(61)
(21)
(146)
(23)
26
520
(217)
(33)
296
(80)
671
(232)
(31)
328
5,564
4,942
(1,746)
(1,437)
3,818
3,505
168
3,650
65.9
28.4
94.3
179
3,326
68.3
27.9
96.2
1
2
3
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.
Represents claims and insurance benefits incurred (net) divided by premiums earned (net).
Represents acquisition and administrative expenses (net) divided by premiums earned (net).
4
5
Represents the total of acquisition and administrative expenses (net) and claims and insurance benefits
incurred (net) divided by premiums earned (net).
Presentation not meaningful.
160
Annual Report 2013
Allianz Group
D
Consolidated Financial Statements
127 Consolidated Balance Sheets
128 Consolidated Income Statements
129 Consolidated Statements of
Comprehensive Income
130 Consolidated Statements of
134 Notes to the Consolidated Financial
Changes in Equity
Statements
131 Consolidated Statements of
Cash Flows
German Speaking Countries Western & Southern Europe
Iberia & Latin America
USA 1
Global Insurance Lines &
Anglo Markets
Growth Markets
Allianz Worldwide Partners
Consolidation and Other
Property-Casualty
reportable segments – propertY-casualtY
reportable segments – propertY-casualtY
€ mn
Gross premiums written
Ceded premiums written
Change in unearned premiums
Premiums earned (net)
Interest and similar income
income (net)
Operating realized gains/losses (net)
Fee and commission income
Other income
Operating revenues
Operating income from financial assets and liabilities carried at fair value through
Claims and insurance benefits incurred (net)
Change in reserves for insurance and investment contracts (net)
Operating impairments of investments (net)
Interest expenses
Investment expenses
Acquisition and administrative expenses (net)
Fee and commission expenses
Restructuring charges
Other expenses
Operating expenses
Operating profit (loss)
Non-operating income from financial assets and liabilities carried at fair value
through income (net)
Non-operating realized gains/losses (net)
Non-operating impairments of investments (net)
Amortization of intangible assets
Non-operating items
Income (loss) before income taxes
Income taxes
Net income (loss)
Net income (loss) attributable to:
Non-controlling interests
Shareholders
Loss ratio 2 in %
Expense ratio 3 in %
Combined ratio 4 in %
(2,637)
(2,332)
2013
11,748
(1,882)
(5)
9,861
1,125
(53)
69
149
35
(7,134)
(322)
(20)
(11)
(98)
(2,534)
(132)
(3)
(16)
13
114
(32)
(2)
93
1,009
(283)
726
(4)
730
72.3
25.7
98.0
2012
11,630
(1,955)
(1)
9,674
1,197
(4)
168
147
29
(6,704)
(385)
(76)
(17)
(96)
(2,584)
(148)
(81)
(18)
(26)
321
(88)
(3)
204
1,306
(331)
975
3
972
69.3
26.7
96.0
2013
10,547
(725)
(87)
9,735
880
15
–
23
7
(40)
(11)
–
(98)
(35)
(53)
(4)
12
216
(150)
(18)
60
1,772
(684)
1,088
15
1,073
62.3
27.1
89.4
2012
9,496
(655)
(158)
8,683
868
5
–
20
4
(9)
–
–
(86)
(34)
(26)
(4)
(47)
147
(90)
(7)
3
1,450
(604)
846
17
829
64.9
26.9
91.8
2013
4,620
(738)
(72)
3,810
203
6
–
–
–
–
–
–
(4)
(3)
–
(14)
(992)
5
18
(15)
(2)
6
401
(127)
274
7
267
68.6
26.0
94.6
2012
4,659
(830)
(147)
3,682
208
20
–
1
–
(1)
(9)
–
(14)
(939)
(1)
(11)
–
(3)
(64)
(17)
(2)
(86)
317
(104)
213
8
205
68.8
25.5
94.3
1
The reserve strengthening for asbestos risks in 2012 at Fireman’s Fund Insurance Company of € 71 mn had
4
Represents the total of acquisition and administrative expenses (net) and claims and insurance benefits
no impact on the financial results of the Allianz Group and Fireman’s Fund’s combined ratio under IFRS.
incurred (net) divided by premiums earned (net).
Represents claims and insurance benefits incurred (net) divided by premiums earned (net).
5
Presentation not meaningful.
Represents acquisition and administrative expenses (net) divided by premiums earned (net).
2
3
2013
2,058
(125)
55
1,988
236
–
–
–
–
2012
3,550
(962)
66
2,654
239
(1)
–
–
–
2013
15,969
(3,841)
(158)
11,970
970
(45)
–
589
–
2012
16,577
(3,832)
(181)
12,564
1,129
(61)
–
582
1
2013
3,211
(674)
(150)
2,387
161
1
–
78
3
2012
3,057
(716)
7
2,348
166
(4)
–
61
1
11,186
11,211
10,660
9,580
4,019
3,911
2,224
2,892
13,484
14,215
2,630
2,572
2013
2,507
(78)
(133)
2,296
33
–
–
471
1
2,801
2012
2,186
(43)
(43)
2,100
34
(1)
–
433
–
2,566
(6,070)
(5,642)
(2,611)
(2,533)
(1,376)
(2,683)
(7,574)
(8,186)
(1,491)
(1,438)
(1,457)
(1,305)
(8)
–
–
(3)
(683)
–
–
–
(1)
–
–
(3)
(752)
–
1
–
(10)
(26)
–
(92)
(3,493)
(498)
(6)
–
(46)
(20)
–
(95)
(3,528)
(472)
(13)
(1)
–
(3)
–
(9)
(852)
(72)
–
(1)
2
(3)
–
(9)
(822)
(65)
(5)
–
–
(2)
–
(1)
(763)
(477)
1
–
1
(1)
–
(4)
(692)
(432)
(11)
–
(10,270)
(10,109)
(8,948)
(8,133)
(3,624)
(3,508)
(2,070)
(3,438)
(11,699)
(12,361)
(2,428)
(2,340)
(2,699)
(2,444)
916
1,102
1,712
1,447
395
403
154
(546)
1,785
1,854
202
232
102
122
2
5
–
–
7
161
(34)
127
–
127
69.2
34.4
103.6
(13)
59
1
–
47
(499)
203
(296)
–
(296)
101.1
28.3
129.4
(6)
153
(16)
(7)
124
1,909
(529)
1,380
119
1,261
63.3
29.2
92.5
6
200
(18)
(13)
175
2,029
(514)
1,515
123
1,392
65.2
28.0
93.2
–
10
(4)
(8)
(2)
200
(53)
147
29
118
62.5
35.7
98.2
2
7
(20)
(13)
(24)
208
(48)
160
26
134
61.3
35.0
96.3
–
4
–
–
4
106
(36)
70
2
68
63.5
33.2
96.7
1
1
–
–
2
124
(39)
85
2
83
62.1
33.0
95.1
Annual Report 2013
Allianz Group
2013
2012
2013
2012
(4,081)
(4,266)
4,081
4,266
–
–
–
–
(13)
(71)
–
–
(84)
1
(96)
–
–
13
–
–
12
73
–
–
98
2
–
–
–
4
4
6
–
6
–
6
–5
–5
–5
46,579
(3,982)
(550)
42,047
3,595
(76)
69
1,226
47
46,889
(4,727)
(457)
41,705
3,770
(46)
168
1,165
35
–
–
(79)
–
(150)
46,908
46,797
–
–
71
–
–
15
64
–
–
(27,713)
(28,491)
(384)
(52)
(11)
(315)
(430)
(47)
(17)
(307)
(11,942)
(11,634)
(1,141)
(1,088)
(61)
(21)
(146)
(23)
150
(41,640)
(42,183)
–
–
–
–
7
7
7
–
7
–
7
–5
–5
–5
5,268
4,614
26
520
(217)
(33)
296
(80)
671
(232)
(31)
328
5,564
4,942
(1,746)
(1,437)
3,818
3,505
168
3,650
65.9
28.4
94.3
179
3,326
68.3
27.9
96.2
161
reportable segments – lIfe/health
reportable segments – lIfe/health
€ mn
Statutory premiums 1
Ceded premiums written
Change in unearned premiums
Statutory premiums (net)
Deposits from insurance and investment contracts
Premiums earned (net)
Interest and similar income
Operating income from financial assets and liabilities carried at fair value through income (net)
Operating realized gains/losses (net)
Fee and commission income
Other income
Operating revenues
Claims and insurance benefits incurred (net)
Changes in reserves for insurance and investment contracts (net)
Interest expenses
Operating impairments of investments (net)
Investment expenses
Acquisition and administrative expenses (net)
Fee and commission expenses
Restructuring charges
Other expenses
Operating expenses
Operating profit
Non-operating income from financial assets and liabilities carried at fair value through income (net)
Non-operating realized gains/losses (net)
Non-operating impairments of investments (net)
Amortization of intangible assets
Non-operating items
Income before income taxes
Income taxes
Net income
Net income attributable to:
Non-controlling interests
Shareholders
Margin on reserves 2 in basis points
German Speaking Countries Western & Southern Europe
Iberia & Latin America
USA
Growth Markets
Consolidation
Life/Health
Global Insurance Lines &
Anglo Markets
2013
2012
2013
2012
22,251
(166)
(163)
21,922
(6,350)
15,572
8,935
(1,139)
2,647
49
126
20,758
(161)
(194)
20,403
(4,879)
15,524
8,782
48
2,277
44
134
19,830
(1,086)
22
18,766
16,897
(1,102)
45
15,840
(14,183)
(11,572)
(1,078)
(6,312)
(6,322)
(3,300)
(3,454)
(31,223)
(27,013)
4,583
3,878
138
487
437
31
4,268
3,999
(50)
587
350
20
26,190
26,809
9,554
9,174
1,096
1,064
3,022
3,213
3,366
3,565
(65)
(60)
43,614
44,230
(13,139)
(13,942)
(9,273)
(9,278)
(98)
(275)
(556)
(97)
(231)
(512)
(1,565)
(1,302)
(19)
(3)
(88)
(18)
(18)
(78)
(4,113)
(2,364)
(24)
(76)
(213)
(1,795)
(208)
(16)
(10)
(3,804)
(2,377)
(27)
(193)
(179)
(1,678)
(171)
(8)
(10)
(25,016)
(25,476)
(8,819)
(8,447)
(938)
(941)
(2,535)
(2,756)
(428)
(418)
(3,235)
(3,309)
66
60
(40,905)
(41,287)
1,174
1,333
–
–
–
(1)
(1)
1,173
(410)
763
–
763
53
–
–
–
(3)
(3)
1,330
(439)
891
–
891
64
735
(5)
35
(13)
(5)
12
747
(208)
539
20
519
53
727
(2)
67
(33)
(1)
31
758
(293)
465
33
432
57
(93)
(99)
(337)
(352)
(1,788)
(1,594)
(1,346)
(1,497)
(472)
(707)
(20,096)
(20,386)
(13,556)
(13,971)
(207)
(1,054)
(1,077)
(88)
(80)
(902)
(1)
(5,603)
(5,316)
(24)
(41)
2013
1,786
(19)
(4)
1,763
685
371
21
16
3
–
(626)
(99)
(3)
(1)
(7)
(201)
(1)
–
–
–
–
–
–
–
158
(46)
112
23
89
2012
1,520
(30)
–
1,490
(786)
704
370
22
(38)
6
–
(595)
(127)
(3)
–
(7)
(1)
(1)
–
–
–
–
–
–
123
(35)
88
20
68
2013
7,317
(115)
(7)
7,195
883
2,734
(781)
106
80
–
(7)
23
(34)
–
–
487
32
28
–
(1)
59
–
398
70
2012
7,289
(121)
2
7,170
848
2,823
(717)
194
65
–
(7)
–
(35)
–
–
457
15
6
(5)
–
16
–
319
69
546
(148)
398
473
(154)
319
2013
515
(82)
(3)
430
–
430
76
(1)
–
–
451
(54)
(2)
(1)
–
–
–
–
–
–
–
–
–
–
23
(7)
16
–
16
111
2012
484
(59)
425
–
–
425
76
(35)
(1)
–
–
465
15
(1)
–
–
–
–
–
–
–
–
–
–
47
(9)
38
–
38
208
2013
6,174
(269)
(177)
5,728
2,428
836
(16)
37
81
–
(10)
(2)
(29)
(1)
(31)
–
131
–
25
(3)
(8)
14
145
(33)
112
37
75
49
2012
6,453
(274)
(101)
6,078
2,624
841
3
24
73
–
(7)
(4)
(26)
(971)
–
–
–
256
(11)
–
59
–
48
304
(71)
233
31
202
99
2013
2012
(1,089)
(1,054)
1,089
1,054
(64)
(59)
(3)
(3)
62
58
2013
56,784
(648)
(332)
55,804
24,581
16,766
(1,829)
3,293
646
157
(81)
(331)
(839)
(251)
(50)
(98)
27
88
(16)
(15)
84
2,793
(852)
1,941
2012
52,347
(693)
(248)
51,406
24,393
16,832
(727)
3,044
534
154
(84)
(428)
(759)
(228)
(27)
(88)
13
132
(49)
(4)
92
3,035
(1,001)
2,034
80
1,861
84
1,950
–
–
–
–
2
–
–
–
–
–
–
3
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
2
–
–
–
–
–
–
2
2
–
–
1
–
–
–
–
–
1
–
1
–
1
158
123
23
47
2,709
2,943
201
171
–3
–3
58
67
1
Statutory premiums are gross premiums written from sales of life and health insurance policies, as well
as gross receipts from sales of unit-linked and other investment-oriented products, in accordance with
the statutory accounting practices applicable in the insurer’s home jurisdiction.
2
3
Represents operating profit divided by the average of the current and previous year-end net reserves,
where net reserves equal reserves for loss and loss adjustment expenses, reserves for insurance and
investment contracts and financial liabilities for unit-linked contracts less reinsurance assets.
Presentation not meaningful.
162
Annual Report 2013
Allianz Group
D
Consolidated Financial Statements
127 Consolidated Balance Sheets
128 Consolidated Income Statements
129 Consolidated Statements of
Comprehensive Income
130 Consolidated Statements of
134 Notes to the Consolidated Financial
Changes in Equity
Statements
131 Consolidated Statements of
Cash Flows
German Speaking Countries Western & Southern Europe
Iberia & Latin America
USA
Global Insurance Lines &
Anglo Markets
Growth Markets
Consolidation
Life/Health
Deposits from insurance and investment contracts
(14,183)
(11,572)
Operating income from financial assets and liabilities carried at fair value through income (net)
2013
1,786
(19)
(4)
1,763
(1,078)
685
371
21
16
3
–
2012
1,520
(30)
–
1,490
(786)
704
370
22
(38)
6
–
2013
7,317
(115)
(7)
7,195
2012
7,289
(121)
2
7,170
(6,312)
(6,322)
883
2,734
(781)
106
80
–
848
2,823
(717)
194
65
–
26,190
26,809
9,554
9,174
1,096
1,064
3,022
3,213
2013
515
(82)
(3)
430
–
430
76
(54)
–
(1)
–
451
2012
484
(59)
–
425
–
425
76
(35)
–
(1)
–
465
2013
6,174
(269)
(177)
5,728
2012
6,453
(274)
(101)
6,078
(3,300)
(3,454)
2,428
836
(16)
37
81
–
2,624
841
3
24
73
–
3,366
3,565
(93)
(99)
(337)
(352)
(1,788)
(1,594)
(472)
(707)
(626)
(99)
(3)
(1)
(7)
(201)
(1)
–
–
(595)
(127)
(3)
–
(7)
(1,346)
(1,497)
(7)
23
(34)
(7)
–
(35)
(207)
(1,054)
(1,077)
(1)
(1)
–
(24)
(41)
–
–
–
–
(2)
(1)
–
–
(88)
–
–
–
15
(1)
–
–
(10)
(2)
(29)
(80)
(902)
–
–
–
(1)
(31)
–
(7)
(4)
(26)
(971)
–
–
–
2013
2012
(1,089)
(1,054)
1,089
1,054
–
–
–
–
–
–
–
–
(64)
(59)
2013
56,784
(648)
(332)
55,804
2012
52,347
(693)
(248)
51,406
(31,223)
(27,013)
24,581
16,766
(1,829)
3,293
646
157
24,393
16,832
(727)
3,044
534
154
43,614
44,230
(20,096)
(20,386)
(13,556)
(13,971)
(81)
(331)
(839)
(84)
(428)
(759)
2
–
(3)
–
(60)
–
–
58
–
–
(1)
(5,603)
(5,316)
3
–
–
(251)
(50)
(98)
(228)
(27)
(88)
2
–
(3)
–
(65)
–
–
62
–
–
2
2
–
–
(25,016)
(25,476)
(8,819)
(8,447)
(938)
(941)
(2,535)
(2,756)
(428)
(418)
(3,235)
(3,309)
66
60
(40,905)
(41,287)
1,174
1,333
158
123
–
–
–
–
–
158
(46)
112
23
89
–
–
–
–
–
123
(35)
88
20
68
201
171
487
32
28
–
(1)
59
457
15
6
(5)
–
16
546
(148)
398
473
(154)
319
–
398
70
–
319
69
23
47
–
–
–
–
–
23
(7)
16
–
16
111
–
–
–
–
–
47
(9)
38
–
38
208
131
–
25
(3)
(8)
14
145
(33)
112
37
75
49
256
–
59
(11)
–
48
304
(71)
233
31
202
99
1
–
–
–
–
–
1
–
1
–
1
–
–
–
–
–
–
–
–
–
–
–
2,709
2,943
27
88
(16)
(15)
84
2,793
(852)
1,941
13
132
(49)
(4)
92
3,035
(1,001)
2,034
80
1,861
84
1,950
–3
–3
58
67
Annual Report 2013
Allianz Group
163
reportable segments – lIfe/health
reportable segments – lIfe/health
€ mn
Statutory premiums 1
Ceded premiums written
Change in unearned premiums
Statutory premiums (net)
Premiums earned (net)
Interest and similar income
Operating realized gains/losses (net)
Fee and commission income
Other income
Operating revenues
Claims and insurance benefits incurred (net)
Changes in reserves for insurance and investment contracts (net)
Interest expenses
Investment expenses
Operating impairments of investments (net)
Acquisition and administrative expenses (net)
Fee and commission expenses
Restructuring charges
Other expenses
Operating expenses
Operating profit
Non-operating realized gains/losses (net)
Non-operating impairments of investments (net)
Amortization of intangible assets
Non-operating items
Income before income taxes
Income taxes
Net income
Net income attributable to:
Non-controlling interests
Shareholders
Margin on reserves 2 in basis points
Non-operating income from financial assets and liabilities carried at fair value through income (net)
2013
2012
2013
2012
22,251
(166)
(163)
21,922
(6,350)
15,572
8,935
(1,139)
2,647
49
126
20,758
(161)
(194)
20,403
(4,879)
15,524
8,782
48
2,277
44
134
(13,139)
(13,942)
(9,273)
(9,278)
(1,565)
(1,302)
(98)
(275)
(556)
(19)
(3)
(88)
–
–
–
(1)
(1)
1,173
(410)
763
–
763
53
(97)
(231)
(512)
(18)
(18)
(78)
–
–
–
(3)
(3)
1,330
(439)
891
–
891
64
19,830
(1,086)
22
18,766
4,583
3,878
138
487
437
31
(4,113)
(2,364)
(24)
(76)
(213)
(1,795)
(208)
(16)
(10)
735
(5)
35
(13)
(5)
12
747
(208)
539
20
519
53
16,897
(1,102)
45
15,840
4,268
3,999
(50)
587
350
20
(3,804)
(2,377)
(27)
(193)
(179)
(1,678)
(171)
(8)
(10)
727
(2)
67
(33)
(1)
31
758
(293)
465
33
432
57
1
Statutory premiums are gross premiums written from sales of life and health insurance policies, as well
2
Represents operating profit divided by the average of the current and previous year-end net reserves,
as gross receipts from sales of unit-linked and other investment-oriented products, in accordance with
where net reserves equal reserves for loss and loss adjustment expenses, reserves for insurance and
the statutory accounting practices applicable in the insurer’s home jurisdiction.
investment contracts and financial liabilities for unit-linked contracts less reinsurance assets.
3
Presentation not meaningful.
2013
7,127
12
13
10
2012
6,731
24
16
15
7,162
6,786
(3,995)
(6)
(4,001)
3,161
2
–
(31)
(26)
(55)
3,106
(1,181)
1,925
93
1,832
55.9
(3,770)
(63)
(3,833)
2,953
26
(1)
(94)
(45)
(114)
2,839
(1,029)
1,810
51
1,759
56.5
reportable segments – asset management
reportable segments – asset management
€ mn
Net fee and commission income 1
Net interest income 2
Income from financial assets and liabilities carried at fair value through income (net)
Other income
Operating revenues
Administrative expenses (net), excluding acquisition-related expenses
Restructuring charges
Operating expenses
Operating profit
Realized gains/losses (net)
Impairments of investments (net)
Acquisition-related expenses
Amortization of intangible assets
Non-operating items
Income before income taxes
Income taxes
Net income
Net income attributable to:
Non-controlling interests
Shareholders
Cost-income ratio 3 in %
1
2
3
Represents fee and commission income less fee and commission expenses.
Represents interest and similar income less interest expenses.
Represents operating expenses divided by operating revenues.
164
Annual Report 2013
Allianz Group
D
Consolidated Financial Statements
127 Consolidated Balance Sheets
128 Consolidated Income Statements
129 Consolidated Statements of
Comprehensive Income
130 Consolidated Statements of
134 Notes to the Consolidated Financial
Changes in Equity
Statements
131 Consolidated Statements of
Cash Flows
Annual Report 2013
Allianz Group
165
reportable segments – corporate and other
reportable segments – corporate and other
€ mn
Interest and similar income
Operating income from financial assets and liabilities carried at fair value through income (net)
Fee and commission income
Other income
Operating revenues
Interest expenses, excluding interest expenses from external debt
Loan loss provisions
Investment expenses
Administrative expenses (net), excluding acquisition-related expenses
Fee and commission expenses
Restructuring charges
Other expenses
Operating expenses
Operating profit (loss)
Non-operating income from financial assets and liabilities carried at fair value through income (net)
Realized gains/losses (net)
Impairments of investments (net)
Income from fully consolidated private equity investments (net)
Interest expenses from external debt
Acquisition-related expenses
Amortization of intangible assets
Non-operating items
Income (loss) before income taxes
Income taxes
Net loss
Net loss attributable to:
Non-controlling interests
Shareholders
Holding & Treasury
Banking
Alternative Investments
Consolidation
Corporate and Other
2013
278
31
53
–
362
(341)
–
(79)
(684)
(231)
34
–
2012
245
18
17
6
286
(414)
–
(101)
(591)
(249)
(32)
–
(1,301)
(1,387)
(1,187)
(1,223)
(151)
(147)
(939)
(44)
295
(79)
–
(901)
(2)
(10)
(741)
(1,680)
456
(1,224)
–
(1,224)
(1,101)
229
72
(220)
–
(991)
(7)
(114)
(1,031)
(2,132)
311
(1,821)
–
(1,821)
Cost-income ratio 1 for the reportable segment Banking in %
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.
166
Annual Report 2013
Allianz Group
(91)
(34)
24
22
(1,004)
(1,114)
2013
613
475
8
–
1,096
(281)
(86)
–
(468)
(262)
(88)
(2)
–
23
(1)
–
–
–
–
22
(69)
20
(49)
5
(54)
100.9
2012
719
14
456
–
1,189
(350)
(111)
(1)
(511)
(247)
–
(3)
–
13
(2)
–
–
–
–
11
(23)
3
(20)
7
(27)
87.0
2013
12
(1)
163
1
175
(2)
–
(5)
–
1
–
1
–
–
–
–
(96)
(112)
(88)
5
(83)
2
(85)
(145)
(142)
(17)
(26)
2012
17
(1)
149
4
169
(2)
–
(3)
–
–
–
2
–
–
–
–
(89)
(113)
(91)
(7)
(98)
6
(104)
2013
(4)
(2)
–
2
–
1
–
1
2
–
–
–
4
2
–
–
–
–
–
(3)
28
25
27
(5)
22
–
22
2012
(1)
(1)
(8)
(2)
(12)
1
–
2
6
2
–
–
11
(1)
5
81
–
–
–
–
–
86
85
–
85
–
85
2013
903
40
687
1
1,631
(623)
(86)
(83)
(1,295)
(493)
(53)
(2)
(2,635)
(46)
346
(80)
(17)
(901)
(2)
(106)
(806)
(1,810)
476
(1,334)
7
(1,341)
2012
980
30
614
8
1,632
(765)
(111)
(103)
(1,238)
(494)
(32)
(3)
(2,746)
236
166
(222)
(26)
(991)
(7)
(203)
(1,047)
(2,161)
307
(1,854)
13
(1,867)
reportable segments – corporate and other
reportable segments – corporate and other
€ mn
Operating income from financial assets and liabilities carried at fair value through income (net)
Interest expenses, excluding interest expenses from external debt
Administrative expenses (net), excluding acquisition-related expenses
Non-operating income from financial assets and liabilities carried at fair value through income (net)
Income from fully consolidated private equity investments (net)
Interest and similar income
Fee and commission income
Other income
Operating revenues
Loan loss provisions
Investment expenses
Fee and commission expenses
Restructuring charges
Other expenses
Operating expenses
Operating profit (loss)
Realized gains/losses (net)
Impairments of investments (net)
Interest expenses from external debt
Acquisition-related expenses
Amortization of intangible assets
Non-operating items
Income (loss) before income taxes
Income taxes
Net loss
Net loss attributable to:
Non-controlling interests
Shareholders
Cost-income ratio 1 for the reportable segment Banking in %
1
Represents investment expenses, administrative expenses (net), excluding acquisition-related expenses,
other income, interest expenses, excluding interest expenses from external debt and fee and commission
restructuring charges and other expenses divided by interest and similar income, operating income from
expenses.
financial assets and liabilities carried at fair value through income (net), fee and commission income,
D
Consolidated Financial Statements
127 Consolidated Balance Sheets
128 Consolidated Income Statements
129 Consolidated Statements of
Comprehensive Income
130 Consolidated Statements of
134 Notes to the Consolidated Financial
Changes in Equity
Statements
131 Consolidated Statements of
Cash Flows
Holding & Treasury
Banking
Alternative Investments
Consolidation
Corporate and Other
2013
278
31
53
–
362
(341)
–
(79)
(684)
(231)
34
–
(939)
(44)
295
(79)
–
(901)
(2)
(10)
(741)
(1,680)
456
(1,224)
–
(1,224)
2012
245
18
17
6
286
(414)
(101)
(591)
(249)
(32)
–
–
(1,101)
229
72
(220)
–
(991)
(7)
(114)
(1,031)
(2,132)
311
(1,821)
–
(1,821)
2013
613
8
475
–
1,096
(281)
(86)
–
(468)
(262)
(88)
(2)
2012
719
14
456
–
1,189
(350)
(111)
(1)
(511)
(247)
–
(3)
2013
12
(1)
163
1
175
(2)
–
(5)
2012
17
(1)
149
4
169
(2)
–
(3)
(145)
(142)
–
1
–
–
–
–
(1,301)
(1,387)
(1,187)
(1,223)
(151)
(147)
(91)
(34)
–
23
(1)
–
–
–
–
22
(69)
20
(49)
5
(54)
100.9
–
13
(2)
–
–
–
–
11
(23)
3
(20)
7
(27)
87.0
24
1
–
–
(17)
–
–
(96)
(112)
(88)
5
(83)
2
(85)
22
2
–
–
(26)
–
–
(89)
(113)
(91)
(7)
(98)
6
(104)
2013
–
2
(4)
–
(2)
1
–
1
2
–
–
–
4
2
(3)
28
–
–
–
–
–
25
27
(5)
22
–
22
2012
(1)
(1)
(8)
(2)
(12)
1
–
2
6
2
–
–
11
(1)
5
81
–
–
–
–
–
86
85
–
85
–
85
2013
903
40
687
1
1,631
(623)
(86)
(83)
(1,295)
(493)
(53)
(2)
(2,635)
2012
980
30
614
8
1,632
(765)
(111)
(103)
(1,238)
(494)
(32)
(3)
(2,746)
(1,004)
(1,114)
(46)
346
(80)
(17)
(901)
(2)
(106)
(806)
(1,810)
476
(1,334)
7
(1,341)
236
166
(222)
(26)
(991)
(7)
(203)
(1,047)
(2,161)
307
(1,854)
13
(1,867)
Annual Report 2013
Allianz Group
167
Notes to the coNsolidated balaNce sheets
7 – Cash and cash equivalents
9 – Investments
cash and cash equIvalents
€ mn
as of 31 December
Balances with banks payable on demand
Balances with central banks
Cash on hand
Treasury bills, discounted treasury notes, similar
treasury securities, bills of exchange and checks
Total
2013
6,574
449
202
3,982
11,207
2012
7,295
2,277
223
2,642
12,437
Investments
€ mn
as of 31 December
Available-for-sale investments
Held-to-maturity investments
Funds held by others under reinsurance
contracts assumed
Investments in associates and joint ventures
Real estate held for investment
Total
2013
392,023
4,140
894
3,175
10,783
411,015
2012
383,254
4,321
1,188
3,219
9,646
401,628
As of 31 December 2013, compulsory deposits on accounts with
national central banks under restrictions due to required reserves
from the European Central Bank totaled € 169 mn (2012: € 305 mn).
8 – Financial assets carried
at fair value through income
FInancIal assets carrIed at FaIr value through Income
€ mn
as of 31 December
Financial assets held for trading
Debt securities
Equity securities
Derivative financial instruments
Subtotal
Financial assets designated at fair value
through income
Debt securities
Equity securities
Subtotal
Total
2013
2012
360
139
2,013
2,512
2,008
2,725
4,733
7,245
328
153
1,865
2,346
2,349
2,588
4,937
7,283
debt and equIty securItIes Included
In FInancIal assets held For tradIng
Debt and equity securities included in financial assets held for trading
are primarily marketable and listed securities. As of 31 December
2013, the debt securities include € 30 mn (2012: € 29 mn) from public
sector issuers and € 330 mn (2012: € 299 mn) from other issuers.
168
Annual Report 2013
Allianz Group
D
Consolidated Financial Statements
127 Consolidated Balance Sheets
128 Consolidated Income Statements
129 Consolidated Statements of
Comprehensive Income
130 Consolidated Statements of
134 Notes to the Consolidated Financial
Changes in Equity
Statements
131 Consolidated Statements of
Cash Flows
avaIlable-For-sale Investments
avaIlable-For-sale Investments
€ mn
as of 31 December
Debt securities
Government and agency mortgage-backed
securities (residential and commercial)
Corporate mortgage-backed securities
(residential and commercial)
Other asset-backed securities
Government and government agency bonds
Germany
Italy
France
United States
Spain
Belgium
Greece
Portugal
Ireland
Hungary
Supranationals
All other countries
Subtotal
Corporate bonds 1
Other
Subtotal
Equity securities 2
Total
2013
2012
Amortized
Cost
Unrealized
Gains
Unrealized
Losses
Fair Value
Amortized
Cost
Unrealized
Gains
Unrealized
Losses
Fair Value
2,515
11,226
3,460
14,852
26,304
31,410
8,411
2,813
5,968
1
196
38
773
14,571
49,596
154,933
168,353
2,223
342,710
22,819
365,529
103
693
210
918
2,001
2,471
239
178
613
2
2
1
60
663
2,328
9,476
9,212
324
20,018
9,624
29,642
(16)
(86)
(40)
(46)
(91)
(177)
(171)
(35)
(3)
–
(2)
–
–
(56)
(878)
(1,459)
(1,397)
(4)
(3,002)
(146)
(3,148)
2,602
4,026
291
(2)
4,315
11,833
3,630
15,724
28,214
33,704
8,479
2,956
6,578
3
196
39
833
15,178
51,046
162,950
176,168
2,543
359,726
32,297
392,023
10,778
2,532
13,066
29,762
31,300
8,179
2,582
6,077
7
251
76
662
8,131
45,936
146,029
161,150
2,574
327,089
17,950
345,039
1,202
276
1,521
1,483
4,421
803
32
1,060
4
1
3
42
1,029
4,670
15,069
14,142
266
31,246
8,632
39,878
(107)
(27)
(5)
(206)
(34)
(10)
(136)
(1)
–
(11)
–
–
(1)
(51)
(455)
(954)
(23)
(1,568)
(95)
(1,663)
11,873
2,781
14,582
31,039
35,687
8,972
2,478
7,136
11
241
79
704
9,159
50,555
160,643
174,338
2,817
356,767
26,487
383,254
1
Includes bonds issued by Spanish banks with a fair value of € 418 MN (2012: € 508 MN), thereof subordinated
bonds with a fair value of € 115 MN (2012: € 107 MN).
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
Government and government agency bonds
Corporate bonds 1
Other
Total
1
Also includes corporate mortgage-backed securities.
2013
2012
Amortized
Cost
Unrealized
Gains
Unrealized
Losses
Fair Value
Amortized
Cost
Unrealized
Gains
Unrealized
Losses
Fair Value
2,411
1,729
–
4,140
375
144
–
519
(4)
(8)
–
(12)
2,782
1,865
–
4,647
2,598
1,723
–
4,321
331
68
–
399
–
(1)
–
(1)
2,929
1,790
–
4,719
Annual Report 2013
Allianz Group
169
unrealIzed losses on avaIlable-For-sale
Investments and held-to-maturIty Investments
The following table sets forth gross unrealized losses on available-
for-sale investments and held-to-maturity investments and the
related fair value, broken down by investment category and length of
time such investments have been in a continuous unrealized loss
position as of 31 December 2013 and 2012.
unrealIzed losses on avaIlable-For-sale Investments and held-to-maturIty Investments
€ mn
as of 31 December
2013
Debt securities
Government and agency mortgage-backed securities
(residential and commercial)
Corporate mortgage-backed securities (residential and commercial)
Other asset-backed securities
Government and government agency bonds
Corporate bonds
Other
Subtotal
Equity securities
Total
2012
Debt securities
Government and agency mortgage-backed securities
(residential and commercial)
Corporate mortgage-backed securities (residential and commercial)
Other asset-backed securities
Government and government agency bonds
Corporate bonds
Other
Subtotal
Equity securities
Total
Less than 12 months
Greater than 12 months
Total
Fair Value
Unrealized
Losses
Fair Value
Unrealized
Losses
Fair Value
Unrealized
Losses
608
1,114
668
36,119
37,148
77
75,734
2,661
78,395
86
402
208
3,881
5,759
434
10,770
1,377
12,147
(15)
(31)
(30)
(1,258)
(1,094)
(3)
(2,431)
(144)
(2,575)
(1)
(26)
(10)
(80)
(88)
(22)
(227)
(90)
(317)
12
817
224
2,217
3,651
12
6,933
81
7,014
9
782
228
5,528
8,623
5
15,175
33
15,208
(1)
(55)
(10)
(205)
(311)
(1)
(583)
(2)
(585)
(1)
(81)
(17)
(375)
(867)
(1)
(1,342)
(5)
(1,347)
620
1,931
892
38,336
40,799
89
82,667
2,742
85,409
95
1,184
436
9,409
14,382
439
25,945
1,410
27,355
(16)
(86)
(40)
(1,463)
(1,405)
(4)
(3,014)
(146)
(3,160)
(2)
(107)
(27)
(455)
(955)
(23)
(1,569)
(95)
(1,664)
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.
Government and government agency bonds
Total unrealized losses amounted to € 1,463 mn as of 31 December
2013. The Allianz Group holds a large variety of government bonds,
mostly of OECD countries (Organization of Economic Cooperation
and Development). In general, the credit risk of government and gov-
ernment agency bonds is rather moderate since they are backed by
the fiscal capacity of the issuers who typically hold an “investment
grade” country- and/or issue-rating.
The unrealized losses on the Allianz Group’s investment in gov-
ernment bonds were mainly caused by investments in certain Euro-
pean countries and the U.S. During 2013, government and govern-
ment 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.
170
Annual Report 2013
Allianz Group
D
Consolidated Financial Statements
127 Consolidated Balance Sheets
128 Consolidated Income Statements
129 Consolidated Statements of
Comprehensive Income
130 Consolidated Statements of
134 Notes to the Consolidated Financial
Changes in Equity
Statements
131 Consolidated Statements of
Cash Flows
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 ven-
tures 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
Accumulated depreciation as of 1 January
Carrying amount as of 1 January
Additions
Changes in the consolidated subsidiaries
of the Allianz Group
Disposals
Reclassifications
Reclassifications into non-current assets classified
as held for sale
Foreign currency translation adjustments
Depreciation
Impairments
Reversals of impairments
Carrying amount as of 31 December
Accumulated depreciation as of 31 December
Cost as of 31 December
2013
12,443
(2,797)
9,646
706
807
(349)
377
(117)
(43)
(211)
(55)
22
10,783
3,054
13,837
2012
11,383
(2,719)
8,664
978
317
(192)
84
(20)
20
(190)
(48)
33
9,646
2,797
12,443
As of 31 December 2013, real estate held for investment pledged as
security and other restrictions on title were € 36 mn (2012: € 37 mn).
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 cor-
porations 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.
Equity securities
As of 31 December 2013, unrealized losses from equity securities
amounted to € 146 mn. These unrealized losses concern equity securi-
ties that did not meet the criteria of the Allianz Group’s impairment
policy for equity securities as described in note 2. The major part of
the unrealized losses have been in a continuous loss position for less
than 6 months.
contractual term to maturIty
The amortized cost and fair value of available-for-sale debt securities
and held-to-maturity debt securities as of 31 December 2013, by con-
tractual term to maturity, are as follows:
contractual term to maturIty
€ mn
as of 31 December 2013
avaIlable-For-sale debt securItIes
Due in 1 year or less
Due after 1 year and up to 5 years
Due after 5 years and up to 10 years
Due after 10 years
Total
held-to-maturIty debt securItIes
Due in 1 year or less
Due after 1 year and up to 5 years
Due after 5 years and up to 10 years
Due after 10 years
Total
Amortized Cost
Fair Value
32,793
90,833
94,354
124,730
342,710
181
1,661
898
1,400
4,140
31,467
96,673
96,402
135,184
359,726
204
1,751
977
1,715
4,647
Actual maturities may deviate from the contractually defined matur-
ities because certain security issuers have the right to call or repay
certain obligations ahead of schedule, with or without redemption or
early repayment penalties. Investments that are not due at a single
maturity date are, in general, not allocated over various maturity
buckets, but are shown within their final contractual maturity dates.
Annual Report 2013
Allianz Group
171
10 – Loans and advances to banks and customers
loans and advances to banks and customers
€ mn
as of 31 December
Short-term investments and certificates of deposit
Reverse repurchase agreements
Collateral paid for securities borrowing transactions and derivatives
Loans
Other
Subtotal
Loan loss allowance
Total
1
Primarily include covered bonds.
2013
Customers
–
–
–
51,595
15
51,610
(194)
51,416
Banks
3,275
613
315
60,5111
670
65,384
–
65,384
Total
3,275
613
315
112,106
685
116,994
(194)
116,800
2012
Customers
–
–
–
49,633
42
49,675
(152)
49,523
Banks
4,207
789
365
64,0491
436
69,846
–
69,846
Total
4,207
789
365
113,682
478
119,521
(152)
119,369
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
Loans and advances to banks
Loans and advances to customers
Total
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
3,852
3,059
6,911
3,544
3,034
6,578
7,754
6,343
14,097
10,457
5,736
16,193
39,777
33,438
73,215
Total
65,384
51,610
116,994
The following table presents information relating to the Allianz
Group’s impaired loans:
11 – Reinsurance assets
ImpaIred loans
€ mn
as of 31 December
Impaired loans
Impaired loans with specific allowances
Average balance of impaired loans
Interest income recognized on impaired loans
reInsurance assets
€ mn
as of 31 December
Unearned premiums
Reserves for loss and loss adjustment expenses
Aggregate policy reserves
Other insurance reserves
Total
2013
786
784
818
8
2012
881
875
830
10
2013
1,537
6,494
4,463
115
2012
1,546
7,318
4,295
95
12,609
13,254
172
Annual Report 2013
Allianz Group
D
Consolidated Financial Statements
127 Consolidated Balance Sheets
128 Consolidated Income Statements
129 Consolidated Statements of
Comprehensive Income
130 Consolidated Statements of
134 Notes to the Consolidated Financial
Changes in Equity
Statements
131 Consolidated Statements of
Cash Flows
Changes in aggregate policy reserves ceded to reinsurers are as fol-
lows:
12 – Deferred acquisition costs
changes In aggregate polIcy reserves ceded to reInsurers
€ mn
Carrying amount as of 1 January
Foreign currency translation adjustments
Changes recorded in the consolidated income
statements
Other changes
Carrying amount as of 31 December
2013
4,295
(131)
10
289
4,463
2012
4,364
(47)
66
(88)
4,295
deFerred acquIsItIon costs
€ mn
as of 31 December
Deferred acquisition costs
Property-Casualty
Life/Health
Asset Management
Subtotal
Present value of future profits
Deferred sales inducements
Total
deFerred acquIsItIon costs
changes In deFerred acquIsItIon costs
€ mn
property-casualty
Carrying amount as of 1 January
Additions
Changes in the consolidated subsidiaries
of the Allianz Group
Foreign currency translation adjustments
Amortization
Carrying amount as of 31 December
lIFe/health
Carrying amount as of 1 January
Additions
Foreign currency translation adjustments
Shadow accounting
Amortization
Carrying amount as of 31 December
asset management
Total
Changes in the reserves for loss and loss adjustment expenses ceded
to reinsurers in the business segment Property-Casualty are shown
in the respective table in note 19.
The Allianz Group reinsures a portion of the risks it underwrites
in an effort to control its exposure to losses and events and to protect
its capital resources. For natural catastrophe events, the Allianz
Group maintains a centralized program that pools exposures from
its subsidiaries by internal reinsurance agreements. Allianz SE limits
exposures in this portfolio through external reinsurance. For other
risks, the subsidiaries of the Allianz Group have individual reinsur-
ance programs in place. Allianz SE participates as a reinsurer with a
significant share on an arm’s length basis in these programs.
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 arrange-
ments 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 crite-
ria, 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 allow-
ance 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.
2013
2012
4,354
15,837
159
20,350
1,046
807
22,203
4,323
13,521
139
17,983
945
524
19,452
2013
2012
4,323
5,530
(3)
(135)
(5,361)
4,354
13,521
2,813
(390)
2,204
(2,311)
15,837
159
20,350
4,197
5,359
2
3
(5,238)
4,323
14,579
2,621
(27)
(1,668)
(1,984)
13,521
139
17,983
Annual Report 2013
Allianz Group
173
present value oF Future proFIts
13 – Other assets
present value oF Future proFIts
€ mn
Cost as of 1 January
Accumulated amortization as of 1 January
Carrying amount as of 1 January
Additions
Changes in the consolidated subsidiaries
of the Allianz Group
Foreign currency translation adjustments
Shadow accounting
Amortization 1
Carrying amount as of 31 December
Accumulated amortization as of 31 December
Cost as of 31 December
2013
2,783
(1,838)
945
40
214
(57)
20
(116)
1,046
1,908
2,954
2012
2,778
(1,725)
1,053
–
–
5
(24)
(89)
945
1,838
2,783
1
During the year ended 31 December 2013, includes interest accrued on unamortized PVFP of € 50 MN
(2012: € 59 MN).
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).
deFerred sales Inducements
deFerred sales Inducements
€ mn
Carrying amount as of 1 January
Additions
Foreign currency translation adjustments
Shadow accounting
Amortization
Carrying amount as of 31 December
2013
524
114
(47)
347
(131)
807
2012
797
138
(17)
(253)
(141)
524
other assets
€ mn
as of 31 December
Receivables
Policyholders
Agents
Reinsurers
Other
Less allowance for doubtful accounts
Subtotal
Tax receivables
Income taxes
Other taxes
Subtotal
Accrued dividends, interest and rent
Prepaid expenses
Interest and rent
Other prepaid expenses
Subtotal
Derivative financial instruments used for hedging
that meet the criteria for hedge accounting and
firm commitments
Property and equipment
Real estate held for own use
Software
Equipment
Fixed assets of alternative investments
Subtotal
Other assets 1
Total
2013
2012
5,489
4,424
1,844
4,160
(720)
15,197
2,159
1,215
3,374
7,706
13
255
268
75
2,423
1,832
1,173
1,304
6,732
1,280
6,005
4,497
2,421
4,054
(730)
16,247
1,363
1,278
2,641
7,780
17
300
317
129
2,885
1,590
967
1,225
6,667
1,415
34,632
35,196
1
As of 31 December 2013, includes prepaid benefit costs for defined benefit plans of € 94 MN (2012: € 59 MN).
As of 31 December 2013, other assets due within one year totaled
€ 27,547 mn (2012: € 27,367 mn), and those due in more than one year
totaled € 7,085 mn (2012: € 7,829 mn).
174
Annual Report 2013
Allianz Group
D
Consolidated Financial Statements
127 Consolidated Balance Sheets
128 Consolidated Income Statements
129 Consolidated Statements of
Comprehensive Income
130 Consolidated Statements of
134 Notes to the Consolidated Financial
Changes in Equity
Statements
131 Consolidated Statements of
Cash Flows
property and equIpment
Real estate held for own use
real estate held For own use
€ mn
Cost as of 1 January
Accumulated depreciation as of 1 January
Carrying amount as of 1 January
Additions
Changes in the consolidated subsidiaries
of the Allianz Group
Disposals
Reclassifications
Reclassifications into non-current assets classified
as held for sale
Foreign currency translation adjustments
Depreciation
Reversals of impairments
Carrying amount as of 31 December
Accumulated depreciation as of 31 December
Cost as of 31 December
2013
4,021
(1,136)
2,885
93
17
(66)
(379)
(16)
(43)
(68)
–
2,423
1,074
3,497
2012
4,022
(1,216)
2,806
198
60
(45)
(85)
–
14
(71)
8
2,885
1,136
4,021
Equipment
equIpment
€ mn
Cost as of 1 January
2013
3,640
2012
3,480
Accumulated depreciation as of 1 January
(2,673)
(2,631)
Carrying amount as of 1 January
Additions
Changes in the consolidated subsidiaries
of the Allianz Group
Disposals
Reclassifications
Foreign currency translation adjustments
Depreciation
Impairments
Carrying amount as of 31 December
Accumulated depreciation as of 31 December
Cost as of 31 December
Fixed assets of alternative investments
FIxed assets oF alternatIve Investments1
As of 31 December 2013, assets pledged as security and other restric-
tions on title were € 108 mn (2012: € 113 mn).
€ mn
Software
soFtware
€ mn
Cost as of 1 January
Cost as of 1 January
Accumulated depreciation as of 1 January
Carrying amount as of 1 January
Additions
Changes in the consolidated subsidiaries
of the Allianz Group
Disposals
Foreign currency translation adjustments
2013
5,057
2012
4,584
Accumulated amortization as of 1 January
(3,467)
(3,191)
Depreciation
Carrying amount as of 31 December
Accumulated depreciation as of 31 December
Cost as of 31 December
1
Includes fixed assets of wind parks, solar parks and Selecta.
Carrying amount as of 1 January
Additions
Changes in the consolidated subsidiaries
of the Allianz Group
Disposals
Foreign currency translation adjustments
Amortization
Impairments
Carrying amount as of 31 December 1
Accumulated amortization as of 31 December
Cost as of 31 December
1,590
657
6
(19)
(17)
(384)
(1)
1,832
3,800
5,632
1,393
638
(1)
(42)
5
(393)
(10)
1,590
3,467
5,057
1
As of 31 December 2013, includes € 1,122 MN (2012: € 980 MN) for software developed in-house and
€ 710 MN (2012: € 610 MN) for software purchased from third parties.
Annual Report 2013
Allianz Group
967
534
10
(74)
6
(27)
(242)
(1)
1,173
2,655
3,828
2013
1,804
(579)
1,225
48
161
(8)
(2)
(120)
1,304
701
2,005
849
485
(8)
(110)
(3)
–
(244)
(2)
967
2,673
3,640
2012
1,573
(460)
1,113
120
117
(7)
–
(118)
1,225
579
1,804
175
14 – Non-current assets
classified as held for sale
non-current assets classIfIed as held for sale
€ mn
as of 31 December
Real estate held for investment
Investments in associates and joint ventures
Real estate held for own use
Total
15 – Intangible assets
IntangIble assets
€ mn
as of 31 December
2013
–
131
16
147
2012
15
–
–
15
Intangible assets with indefinite useful lives
Goodwill
Brand names 1
Subtotal
Intangible assets with finite useful lives
Distribution agreements 2
Customer relationships 3
2013
2012
11,544
296
11,840
995
149
116
1,260
13,100
11,679
302
11,981
826
183
100
1,109
13,090
Other 4
Subtotal
Total
1
2
3
4
Includes primarily the brand name of Selecta AG, Muntelier.
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).
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”.
Includes primarily acquired business portfolios of € 76 mn (2012: € 42 mn) and heritable building rights of
€ 17 mn (2012: € 15 mn). The other distribution rights of € 17 mn (2012: € 20 mn) and the bancassurance
agreements of € 7 mn (2012: € 10 mn) were reclassified from the line item “Other” to the line item “Dis-
tribution agreements”.
IntangIble assets wIth IndefInIte useful lIves
Goodwill
goodwIll
€ mn
Cost as of 1 January
Accumulated impairments as of 1 January
Carrying amount as of 1 January
Additions
Disposals
Foreign currency translation adjustments
Impairments
Carrying amount as of 31 December
Accumulated impairments as of 31 December
Cost as of 31 December
2013
12,573
(894)
11,679
226
–
(265)
(96)
11,544
990
12,534
2012
12,527
(805)
11,722
72
–
(26)
(89)
11,679
894
12,573
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 invest-
ment of € 131 mn in an Italian real estate company. The real estate
company is recorded as an associate allocated to the reportable seg-
ment Western and Southern Europe (Property-Casualty). The sale of
the asset will be completed in 2014. Upon measurement of the non-
current asset classified as held for sale at fair value less costs to sell,
no significant impairment loss was recognized. Prior to the classifica-
tion 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 allo-
cated to the reportable segment Asset Management. The sale is
expected to be completed during the first quarter of 2014. No impair-
ment was recognized for the year ended 31 December 2013.
176
Annual Report 2013
Allianz Group
D
Consolidated Financial Statements
127 Consolidated Balance Sheets
128 Consolidated Income Statements
129 Consolidated Statements of
Comprehensive Income
130 Consolidated Statements of
134 Notes to the Consolidated Financial
Changes in Equity
Statements
131 Consolidated Statements of
Cash Flows
2013
Additions of 2013 mainly include goodwill from the acquisition of
93.94 % in Yapı Kredi Sigorta A.Ş., Istanbul.
Impairment test for goodwill
and intangible assets with indefinite useful lives
The allocated goodwill of the Cash Generating Unit (CGU) Selecta
AG was impaired by € 96 mn in the business segment Corporate and
Other. This impairment was triggered by a slower recovery of Selecta’s
major European vending markets and lower multiples.
Allocation principles
For the purpose of impairment testing, the Allianz Group has allo-
cated goodwill to CGU1. These CGU represent the lowest level at which
goodwill is monitored for internal management purposes.
2012
Additions of 2012 mainly include goodwill from the acquisition relat-
ing 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 impair-
ment was triggered by lower expectations regarding future economic
developments of Selecta’s core markets and lower multiples.
Brand names
The position brand names consists primarily of the brand name
“Selecta”. The brand name “Selecta” has an indefinite life, as there is
no foreseeable end to its economic life. The fair value of this brand
name, registered as a trade name, was determined using a royalty
savings approach.
Due to the rebranding activities of the Allianz Group in the Rus-
sian market, the brand name of the Russian People’s Insurance Society
“ROSnO” was amortized by € 5 mn in 2013. The brand name will be com-
pletely amortized over the next two years.
CGU in the Property-Casualty business segment are:
− German Speaking Countries,
− Insurance Western & Southern Europe including France, the
Netherlands, Turkey, Belgium, Italy, Greece, Luxembourg and
Africa,
− Iberia & Latin America including South America, Mexico, Portu-
gal and Spain,
− Asia-Pacific and Middle East,
− Central and Eastern Europe including Bulgaria, Croatia, the
Czech Republic, Hungary, Slovakia, Poland, Romania, Ukraine
and Russia,
− Global Insurance Lines & Anglo Markets including United
Kingdom, Ireland and Australia,
− Specialty Lines I including Allianz SE Re, Allianz Global
Corporate & Specialty, ART and Credit Insurance,
− Specialty Lines II including Travel Insurance and Assistance
Services.
CGU in the Life/Health business segment are:
− German Speaking Countries,
− Health Germany,
− Insurance Western & Southern Europe including France, the
Netherlands, Turkey, Belgium, Italy, Greece, Luxembourg and
Africa,
− Asia-Pacific and Middle East,
− Insurance USA.
The business segment Asset Management is represented by the CGU
Asset Management.
The CGU in the Corporate and Other business segment consists of
Selecta AG.
Annual Report 2013
Allianz Group
177
1
The following paragraphs include all cGU that contain goodwill.
The carrying amounts of goodwill and brand names are allocated to
the Allianz Group’s CGU as of 31 December 2013 and 2012 as follows:
allocatIon oF carryIng amounts oF goodwIll and brand names to cgu
€ mn
as of 31 December
cgu
property-casualty
German Speaking Countries
Insurance Western &
Southern Europe
Iberia & Latin America
Asia-Pacific and Middle East
Central and Eastern Europe
Global Insurance Lines &
Anglo Markets
Specialty Lines I
Specialty Lines II
Subtotal
lIFe/health
German Speaking Countries
Health Germany
Insurance Western &
Southern Europe
Asia-Pacific and Middle East
Insurance usa
Subtotal
asset management
corporate and other
Selecta ag
Subtotal
Total
2013
2012
Goodwill
Brand
names
Goodwill
Brand
names
284
1,086
21
83
427
314
38
20
2,273
593
326
633
171
436
2,159
6,805
–
–
–
–
10
–
–
10
–
–
–
–
–
–
–
284
924
21
89
467
323
38
18
2,164
592
325
645
171
442
2,175
6,937
–
–
–
–
16
–
–
–
16
–
–
–
–
–
–
–
307
307
11,544
286
286
296
403
403
11,679
286
286
302
Valuation techniques
The recoverable amounts for all CGU are determined on the basis of
value in use calculations. The Allianz Group applies generally
acknowledged valuation principles to determine the value in use.
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 sus-
tainable 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 calcu-
lated by discounting the future earnings using an appropriate dis-
count 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
178
Annual Report 2013
Allianz Group
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.
The terminal values are largely based on the expected profits of
the final year of the detailed planning period. Where necessary, the
planned profits are adjusted to reflect long-term sustainable earnings.
The financing of the assumed eternal growth in the terminal values
is accounted for by appropriate profit retention.
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.
As a starting point for the impairment test for the CGU in the Life/
Health business segment, the Market Consistent Embedded Value
(mCEV) and a multiple of the Market Consistent Value of New Business
is used. The mCEV is an industry-specific valuation method to assess
the current value of the in force portfolio and is in compliance with
the general principles of the discounted earnings methods. The mCEV
approach applied is based on the CFO Forum Principles and the
Allianz Group’s Embedded Value guidelines. It is a risk-neutral valua-
tion that includes explicit allowance for non-financial risk as well as
allowance for options and guarantees using market-consistent sto-
chastic simulations that are in line with market prices for similar
financial instruments.
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 busi-
ness 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 busi-
ness segment, the business plans are mainly based on key assump-
tions 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.
The discount rate is based on the capital asset pricing model
(CAPm) and appropriate eternal growth rates. The assumptions,
including the risk free interest rate, market risk premium, segment
beta and leverage ratio, used to calculate the discount rates are in
general consistent with the parameters used in the Allianz Group’s
planning and controlling process. The discount rates and eternal
growth rates for the CGU in the Property-Casualty business segment
are as follows:
D
Consolidated Financial Statements
127 Consolidated Balance Sheets
128 Consolidated Income Statements
129 Consolidated Statements of
Comprehensive Income
130 Consolidated Statements of
134 Notes to the Consolidated Financial
Changes in Equity
Statements
131 Consolidated Statements of
Cash Flows
dIscount rates and eternal growth rates For the cgu
In the property-casualty busIness segment
reFerence rates and rIsk dIscount rates For the cgu
In the lIFe/health busIness segment
%
cgu in the Property-Casualty business segment
Discount rate
Eternal
growth rate
cgu in the Life/Health
business segment
German Speaking
Countries
Health Germany
Reference rate for entities with Appraisal Value based on
mcev and risk discount rate for entities with Appraisal Value
based on tev
mcev: Euro swap curve minus 10 bps credit risk adjustment
plus 23 bps illiquidity premium
chF swap curve minus 10 bps credit risk adjustment plus
0 bps illiquidity premium
mcev: Euro swap curve minus 10 bps credit risk adjustment
plus 23 bps illiquidity premium
Insurance Western &
Southern Europe
mcev: Euro swap curve minus 10 bps credit risk adjustment
plus 23 bps illiquidity premium
Asia-Pacific and
Middle East
Insurance usa
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.
mcev: Local swap curve minus 10 bps credit risk adjustment
plus 45 bps illiquidity premium
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 busi-
ness is generally derived from the achieved value of new business.
The new business multiple accounts for the risk and the growth asso-
ciated 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.
For entities included in the CGU of the Asset Management busi-
ness segment, key assumptions include assets under management
growth, cost-income ratio and risk capital. The key assumptions are
based on the current market environment. The discount rate is 9.6 %
and the eternal growth rate is 1.0 % for the CGU Asset Management.
For the CGU Selecta AG, the calculation of the recoverable
amount is based on a multiple valuation, assuming an exit scenario
to occur in the near future. The multiple is derived from industry peer
companies and management judgment and is applied to Selecta AG’s
underlying financial results.
German Speaking Countries
Insurance Western & Southern Europe
Iberia & Latin America
Asia-Pacific and Middle East
Central and Eastern Europe
Global Insurance Lines & Anglo Markets
Specialty Lines I
Specialty Lines II
7.5
8.6
14.0
10.4
9.4
8.7
7.7
7.9
1.0
1.0
3.0
3.0
3.0
1.0
1.0
1.0
For entities included in the CGU of the business segment Life/Health,
the projection of profits underlying the mCEV and the TEV calculations
is based on assumptions set with allowance for profit-sharing as well
as a projection of unrealized capital gains and unallocated premium
reserves. The profits estimated for the mCEV and the TEV calculations
consist of premium income, investment return on technical reserves,
expenses, commissions, death and morbidity claims, surrender
claims, maturity claims, increases in technical reserves, taxation and
levies. For projecting future profits, assumptions have to be made on
the asset performance of the operating entity. This requires consid-
eration of the development of the market together with assumptions
on the operating entity’s investment strategy as well as the current
asset portfolio and allocation. The projection of investment returns
includes the consideration of projection of returns for the current
asset portfolio and a projection of returns for reinvestments. All
assumptions have been developed by management under consider-
ation of internal and external sources.
For the calculation of the mCEV the projected future profits are
discounted using risk-neutral discount rates, as the risks are already
explicitly allowed for in the market-consistent valuation. Time-
dependent and scenario-dependent discount factors are applied. As
a reference rate, the swap yield curve with appropriate adjustments
for, e.g., credit risk and illiquidity premium, was used for determining
the mCEV. For the calculation of the TEV a discount rate based on
10-year government bonds plus 4.5 % Equity Risk Premium was used.
For the valuation of the TEV the underlying government bonds were
consistently used for the valuation of starting asset values as well as
for the projection of the cash flows. The following table provides an
overview of the discount rates for the CGU in the Life/Health business
segment:
Annual Report 2013
Allianz Group
179
Sensitivity analysis
Sensitivity analyses were performed with regard to discount rates
and key value drivers of the business plans.
For the CGU in the business segments Property-Casualty and
Asset Management, sensitivity analyses were performed in respect to
the long-term sustainable combined ratios and cost-income ratios.
For all CGU, excluding Property-Casualty Asia-Pacific and Middle East
as well as Property-Casualty Central and Eastern Europe, discounted
earnings value sensitivities still exceeded their respective carrying
values. An increase of more than 0.2 % points in the discount rate or
the combined ratio may result in the recoverable amount for the CGU
Central and Eastern Europe getting close to its carrying value. The
recoverable amount of the CGU Asia-Pacific and Middle East may
decline to its carrying value as a result of an increase in the discount
rate or in the combined ratio of more than 0.5 % points.
In the Life/Health business segment, for life entities where the
Appraisal Value is based on mCEV, sensitivity analyses were performed
based on mCEV sensitivity testing on the reference rate. For Allianz
Taiwan Life Insurance Co. Ltd. where the Appraisal Value is based on
TEV, sensitivity analyses were performed with respect to the risk dis-
count rate. For the CGU Asia-Pacific and Middle East, an increase in
the risk discount rate for Allianz Taiwan Life Insurance Co. Ltd. of 100
basis points would lead to the Appraisal Value still exceeding its car-
rying value assuming five times the new business value.
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 asso-
ciated 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 expens-
es relating to the intangible assets of Selecta AG are included in the
line item “Expenses from fully consolidated private equity invest-
ments”.
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 distribu-
tion agreements with Banco Popular S.A. have useful lives of 25 years,
which were determined by contractual agreements. They are amor-
tized 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 con-
tractual 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.
The customer relationships of Selecta AG have useful lives of
10 years, which were determined by the multi-period excess earnings
method. The customer relationships of Selecta AG are amortized on
a straight-line basis over the remaining useful lives of 3.5 years. The
customer relationships of Yapı Kredi Sigorta A.Ş. have useful lives of
10 years, which were determined by reference to customer churn
rates that reflect the period over which the Allianz Group expects to
receive economic benefits. They are amortized in relation to the
expected value added over the remaining useful lives of 9 years.
180
Annual Report 2013
Allianz Group
D
Consolidated Financial Statements
127 Consolidated Balance Sheets
128 Consolidated Income Statements
129 Consolidated Statements of
Comprehensive Income
130 Consolidated Statements of
134 Notes to the Consolidated Financial
Changes in Equity
Statements
131 Consolidated Statements of
Cash Flows
16 – Financial liabilities
carried at fair value through income
Financial liabilities carried at Fair value through income
€ mn
as of 31 December
Financial liabilities held for trading
Derivative financial instruments
Other trading liabilities
Subtotal
Financial liabilities designated at fair value through
income
Total
2013
2012
6,010
3
6,013
–
6,013
5,395
2
5,397
–
5,397
17 – Liabilities to banks and customers
liabilities to banks and customers
€ mn
as of 31 December
Payable on demand
Savings deposits
Term deposits and certificates of deposit
Repurchase agreements
Collateral received from securities lending transactions and derivatives
Other
Total
2013
Banks
Customers
696
–
979
1,028
2,216
5,050
9,969
4,473
2,873
2,157
3
–
3,634
13,140
Total
5,169
2,873
3,136
1,031
2,216
8,684
23,109
2012
Banks
Customers
135
–
986
743
1,793
5,420
9,077
4,724
2,897
1,651
656
–
3,420
13,348
liabilities to banks and customers by contractual maturity
liabilities to banks and customers by contractual maturity
€ mn
as of 31 December 2013
Liabilities to banks
Liabilities to customers
Total
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
5,230
10,312
15,542
582
867
1,449
1,748
267
2,015
698
64
762
1,711
1,630
3,341
As of 31 December 2013, liabilities to customers include € 1,560 mn
(2012: € 1,625 mn) of non-interest bearing deposits.
Annual Report 2013
Allianz Group
Total
4,859
2,897
2,637
1,399
1,793
8,840
22,425
Total
9,969
13,140
23,109
181
18 – Unearned premiums
unearned premiums
€ mn
as of 31 December
Property-Casualty
Life/Health
Consolidation
Total
19 – Reserves for loss
and loss adjustment expenses
reserves For loss and loss adjustment expenses
€ mn
as of 31 December
Property-Casualty
Life/Health
Consolidation
Total
2013
56,614
9,961
(9)
66,566
2012
62,711
9,854
(25)
72,540
2013
15,367
2,855
(10)
18,212
2012
15,328
2,618
(7)
17,939
Reserves for loss and loss adjustment expenses for the Property-
Casualty business segment are described in detail in the following
sections.
change in reserves For loss
and loss adjustment expenses
The following table reconciles the beginning and ending reserves of
the Allianz Group, including the effect of reinsurance ceded, for the
Property-Casualty business segment for the years ended 31 Decem-
ber 2013 and 2012.
Gross
62,711
31,831
(2,185)
29,646
(16,136)
(15,099)
(31,235)
(1,433)
132
59,821
(3,207)
56,614
2013
2012
Ceded
(6,905)
(2,429)
496
(1,933)
687
1,568
2,255
265
(59)
(6,377)
306
(6,071)
Net
55,806
29,402
(1,689)
27,713
(15,449)
(13,531)
(28,980)
(1,168)
73
53,444
(2,901)
50,543
Gross
59,493
32,108
(1,271)
30,837
(15,016)
(15,132)
(30,148)
(96)
2,625
62,711
–
Ceded
(6,658)
(2,410)
64
(2,346)
574
1,747
2,321
(2)
(220)
(6,905)
–
62,711
(6,905)
Net
52,835
29,698
(1,207)
28,491
(14,442)
(13,385)
(27,827)
(98)
2,405
55,806
–
55,806
change in reserves For loss and loss adjustment expenses
€ mn
As of 1 January
Loss and loss adjustment expenses incurred
Current year
Prior years
Subtotal
Loss and loss adjustment expenses paid
Current year
Prior years
Subtotal
Foreign currency trans lation adjustments and other changes 1
Changes in the consolidated subsidiaries of the Allianz Group
Subtotal
Reclassification of discounted loss reserves 2
As of 31 December
1
Includes effects of foreign currency translation adjustments for prior years claims of gross € (1,371) mn
(2012: € 47 mn) and of net € (1,184) mn (2012: € 70 mn) and for current year claims of gross € (295) mn (2012:
€ (156) mn) and of net € (253) mn (2012: € (127) mn).
2
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.
182
Annual Report 2013
Allianz Group
D
Consolidated Financial Statements
127 Consolidated Balance Sheets
128 Consolidated Income Statements
129 Consolidated Statements of
Comprehensive Income
130 Consolidated Statements of
134 Notes to the Consolidated Financial
Changes in Equity
Statements
131 Consolidated Statements of
Cash Flows
Prior years’ net loss and loss adjustment expenses incurred reflect
the changes in estimation charged or credited to the consolidated
income statement in each year with respect to the reserves for loss
and loss adjustment expenses established as of the beginning of that
year. During the year ended 31 December 2013, the Allianz Group
recorded additional income of € 1,689 mn (2012: € 1,207 mn) net in
respect of losses occurring in prior years. During the year ended
31 December 2013, this amount as a percentage of the net balance of
the beginning of the year was 3.0 % (2012: 2.3 %).
changes in historical reserves For loss
and loss adjustment expenses (lae)
The analysis of loss and LAE reserves by actuaries and management
is conducted by line of business and separately for specific claim
types such as asbestos and environmental claims. The origin year of
losses is taken into consideration by analyzing each line of business
by accident year. While this determines the estimates of reserves for
loss and LAE by accident year, the effect in the consolidated income
statement in the respective calendar year combines the accident year
loss ratio for the current year with the favorable or adverse develop-
ment from prior years (run-off).
Although discounted loss reserves have been reclassified to
“Reserves for insurance and investment contracts” in the balance
sheet, the underlying business development of these non-life reserves
is still considered in the loss ratio. Therefore the tables below show
the loss development by accident year including the business develop-
ment of discounted loss reserves.
The run-off triangle, also known as the “loss triangle” is a tabular
representation of loss-related data (such as payments, loss reserves,
ultimate losses) in two, time-related dimensions. One of these is the
calendar year, while the other is the accident year (year of loss occur-
rence). Run-off triangles – as the basis for measuring loss reserves –
make clear how the loss reserves change over the course of time due
to payments made and new estimates of the expected ultimate loss
at the respective balance sheet date.
The run-off triangles are not prepared on a currency-adjusted
basis. This means all figures are translated from the respective local
currency into the Allianz Group presentation currency (Euro), con-
sistently using the exchange rates applicable at the reporting date.
This ensures that the reserves reconcile with reserves in the consoli-
dated balance sheet.
Loss payments for the individual accident years (per calendar year, net)
loss payments For the individual accident years (per calendar year, net)
€ mn
Accident year
Calendar year
2004 & Prior
2005
2006
2007
2008
2009
2010
2011
2012
2013
Total
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
23,253
10,716
5,610
3,793
2,807
2,219
1,574
1,147
1,211
1,149
11,881
6,632
2,058
1,158
531
432
294
197
201
11,760
6,403
1,643
955
586
397
265
266
12,631
6,397
1,744
934
687
483
323
13,130
7,350
2,151
1,034
716
497
13,368
6,688
1,725
1,107
712
14,094
6,945
1,972
1,113
14,316
7,434
2,090
14,442
7,180
15,449
Annual Report 2013
Allianz Group
23,253
22,597
24,002
24,885
25,135
26,167
26,459
26,545
27,827
28,980
183
Reserves for loss and loss adjustment expenses for the individual accident years at the respective reporting date (net)
reserves For loss and loss adjustment expenses For the individual accident years at the respective reporting date (net)
€ mn
Accident year
as of 31 December
2004 & Prior
2005
2006
2007
2008
2009
2010
2011
2012
2013
Total
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
45,479
34,879
27,244
22,174
18,389
16,042
14,462
13,682
13,750
12,554
14,777
8,238
4,878
3,248
2,334
1,811
1,442
1,640
1,334
13,848
7,612
4,488
3,432
2,815
2,440
2,026
1,662
14,012
7,449
5,038
3,911
2,973
2,417
1,953
14,222
7,620
5,666
4,337
3,249
2,601
14,074
7,456
5,147
4,061
3,117
14,729
7,218
5,238
3,837
15,596
7,861
5,190
15,564
7,239
13,957
45,479
49,656
49,330
48,676
47,796
48,540
50,850
52,835
55,806
53,444
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)
€ mn
Accident year
as of 31 December
2004 & Prior
2005
2006
2007
2008
2009
2010
2011
2012
2013
Total
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
Surplus 1
Reduction 2013 to 2012 2
68,732
68,848
66,823
65,546
64,568
64,440
64,434
64,801
66,080
66,033
2,699
47
26,658
26,751
25,449
24,977
24,594
24,503
24,428
24,823
24,718
1,940
105
25,608
25,775
24,294
24,193
24,162
24,184
24,035
23,937
1,671
98
26,643
26,477
25,810
25,617
25,366
25,293
25,152
1,491
141
27,352
28,100
28,297
28,002
27,630
27,479
(127)
151
27,442
27,512
26,928
26,949
26,717
725
232
28,823
28,257
28,249
27,961
862
288
29,912
29,611
29,030
882
581
30,006
28,861
1,145
1,145
29,406
–3
–3
11,288
2,788
1
2
Includes effects from foreign currency translation adjustments and other changes.
The total reduction 2013 to 2012 of € 2,788 mn represents the cumulative surplus from reestimating the
ultimate loss for prior year claims. Considering foreign currency translation adjustments of net € (1,184) mn
as well as changes in the consolidated subsidiares and other changes of in total € 85 mn, this leads to an
effective run-off result of net € 1,689 mn, which can be found in the table “Change in the reserves for loss
and loss adjustment expenses” within this note.
Presentation not meaningful.
3
184
Annual Report 2013
Allianz Group
D
Consolidated Financial Statements
127 Consolidated Balance Sheets
128 Consolidated Income Statements
129 Consolidated Statements of
Comprehensive Income
130 Consolidated Statements of
134 Notes to the Consolidated Financial
Changes in Equity
Statements
131 Consolidated Statements of
Cash Flows
Calendar year premiums earned and ultimate loss ratio
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)
as of 31 December
2005
2006
2007
2008
2009
2010
2011
2012
2013
Premiums
earned
(net)
€ mn
37,686
37,950
38,553
38,213
37,828
39,303
39,898
41,705
42,047
2005
%
70.7
71.0
67.5
66.3
65.3
65.0
64.8
65.9
65.6
2006
%
67.5
67.9
64.0
63.7
63.7
63.7
63.3
63.1
2007
%
69.1
68.7
66.9
66.4
65.8
65.6
65.2
Accident year
2008
%
2009
%
2010
%
2011
%
2012
%
2013
%
71.6
73.5
74.1
73.3
72.3
71.9
72.5
72.7
71.2
71.2
70.6
73.3
71.9
71.9
71.1
75.0
74.2
72.8
71.9
69.2
69.9
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 pay-
ments 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, rep-
resenting 3.0 % of net reserves as of 31 December 2012. The following
table provides a breakdown of these amounts by line of business.
changes in reserves For loss and lae during 2013
Net reserves
as of
31 December
2013
Net reserves
as of
31 December
2012
Net
development
related to
prior years
€ mn
16,040
9,632
5,192
3,441
5,501
1,277
2,373
1,083
6,159
2,746
€ mn
16,705
9,827
5,379
3,675
6,085
1,259
2,316
1,010
6,258
3,292
€ mn
748
(40)
(9)
396
119
59
(7)
152
257
14
Motor
General Liability
Workers
Compensation /
Employers Liability
Property
Inwards and Group
Internal Reinsurance
Personal Accident
Construction
Damage and Liability
Credit Insurance
agcs
Other
Allianz Group
53,444
55,806
1,689
1
In % of net reserves as of 31 December 2012.
% 1
4.5
(0.4)
(0.2)
10.8
2.0
4.7
(0.3)
15.0
4.1
0.4
3.0
The major highlights of the reserve developments in 2013 are dis-
cussed by line of business below. The discussion is based on net loss
and LAE reserves of the relevant local operating entity before consoli-
dation and converted into Euro for uniform presentation. Only sig-
nificant developments for the Allianz Group’s major operating enti-
ties are included and therefore the amounts do not fully reconcile to
the line of business totals in the above table.
Annual Report 2013
Allianz Group
185
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 develop-
ment 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 final-
ization.
€ 82 mn at Allianz Spain. The reduction was driven by lower claim
frequency and severity due to the economic environment, more
favorable price agreements with external suppliers and the increased
number of small claims managed directly by Allianz Global Assistance
with the benefit of a lower cost to the company.
€ 71 mn at Allianz Germany mainly due to an ongoing review of
methods and assumptions for motor third party liability and overall
improved claim handling processes.
€ 67 mn at Allianz Suisse. The favorable development of bodily
injury claims continues based on active claims management, port-
folio 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 develop-
ments 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 Insur-
ance Company mainly due to a large loss. Offsetting effects were
noted at Allianz United Kingdom and for large losses at Allianz
France.
Property
For Property Insurance, net loss and LAE reserves developed favorably
during 2013 by € 396 mn, or 10.8 % of reserves at 31 December 2012.
Favorable development was seen for different effects across several
operating entities. The following subsidiaries were the largest con-
tributors:
€ 102 mn at Fireman’s Fund Insurance Company due to favorable
experience on natural catastrophe claims.
€ 90 mn at Allianz Italy due to lower than expected claim pay-
ments on attritional and large losses as well as favorable develop-
ment on 2012 earthquake losses.
€ 80 mn at Allianz Germany mainly due to a lower claims severity
based on overall improved claims handling processes.
Inwards and Group Internal Reinsurance
For Inwards and Group Internal Reinsurance, net loss and LAE reserves
developed favorably during 2013 by € 119 mn or 2.0 % of reserves at
31 December 2012. At Allianz Re a favorable development of € 132 mn
was seen mainly driven by natural catastrophe losses and Group
internal quota share arrangements.
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 previ-
ous 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 experi-
enced € 257 mn of favorable development in 2013 net of reinsurance,
or 4.1 % of net reserves as at 31 December 2012.
The major contributors of the favorable run-off included € 83 mn
from the German entity’s corporate property portfolio, € 71 mn from
the German entity’s corporate liability portfolio and € 55 mn from the
North American entity’s aviation and marine portfolio, due to the
release of IBnR on prior year reserves based on better than expected
experience.
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 environmen-
tal 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 expo-
sures on both known and not yet reported claims. To the extent pos-
sible, 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).
In establishing liabilities for A & E claims, the management con-
siders facts currently known and the current state of the law and cov-
erage litigation. However, given the expansion of coverage and liability
by the courts and the legislatures in the past and the possibilities of
similar interpretation in the future, there is significant uncertainty
regarding the extent of insurer liability. As a result, the range of rea-
sonable potential outcomes for A & E liabilities provided in these
analyses is particularly large. Given this inherent uncertainty in esti-
mating A & E liabilities, significant deviation from the currently carried
A & E reserve position is possible.
186
Annual Report 2013
Allianz Group
D
Consolidated Financial Statements
127 Consolidated Balance Sheets
128 Consolidated Income Statements
129 Consolidated Statements of
Comprehensive Income
130 Consolidated Statements of
134 Notes to the Consolidated Financial
Changes in Equity
Statements
131 Consolidated Statements of
Cash Flows
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 expo-
sures. 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.
The following table summarizes the gross and net loss and LAE
reserves for A & E claims.
gross and net reserves For loss and lae For a & e claims
aggregate policy reserves
changes in aggregate policy reserves
€ mn
As of 1 January
Foreign currency translation adjustments
Changes in the consolidated subsidiaries
of the Allianz Group
Changes recorded in the consolidated income
statement
Premiums collected
Separation of embedded derivatives
€ mn
as of 31 December
a & e net reserves
a & e gross reserves
As percentage of the Allianz Group’s
Property-Casualty gross reserves
2013
2,303
2,711
4.8 %
2012
Interest credited
2,537
3,066
4.9 %
Dividends allocated to policyholders
Releases upon death, surrender and withdrawal
Policyholder charges
Portfolio acquisitions and disposals
Other changes
Reclassification of discounted loss reserves 1
2013
350,244
(3,441)
168
4,827
18,833
960
4,163
1,360
(13,527)
(1,292)
(383)
400
3,207
2012
338,318
(189)
–
4,613
17,467
171
4,790
1,506
(15,334)
(1,464)
(91)
457
–
The following table shows total A & E loss activity for the years ended
31 December 2013 and 2012.
change in a & e gross reserves For loss and loss adjustment expenses
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.
€ mn
Reserves for loss and LAE as of 1 January
Loss and lae payments
Change in reserves for loss and lae
Reserves for loss and LAE as of 31 December
2013
3,066
(282)
(73)
2,711
2012
3,124
(188)
130
3,066
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 poli-
cies represented approximately 65 % (2012: 65 %) of gross statutory
premiums written and 64 % (2012: 63 %) of life premiums earned.
20 – Reserves for insurance
and investment contracts
reserves For insurance and investment contracts
€ mn
as of 31 December
Aggregate policy reserves
Reserves for premium refunds
Other insurance reserves
Total
2013
365,519
37,772
781
2012
350,244
40,031
710
404,072
390,985
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 Decem-
ber 2013 and 2012.
Annual Report 2013
Allianz Group
187
discounting oF reserves For loss and lae
as of 31 December
Motor Liability
General Liability
Personal Accident
Workers Compensation / Employers Liability
Other 3
Total
Discounted reserves 1
Amount of the discount 1
2013
€ mn
954
234
494
1,500
25
3,207
2012
€ mn
916
235
458
1,562
26
3,197
2013
€ mn
786
188
272
700
11
2012
€ mn
762
183
257
734
12
1,957
1,948
Interest rate
used for discounting 2
2013
%
1.75 – 5.52
1.75 – 5.52
1.75 – 3.50
0.58 – 5.52
1.75 – 5.52
2012
%
1.75 – 5.52
1.75 – 5.52
1.75 – 3.64
0.58 – 5.52
1.75 – 5.52
1
2
Prior year figures adjusted due to a correction of the determination of discounted reserves.
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 environ-
ment, interest rates used for discounting reduced.
3
The line of business “Other” includes reserves assumed by Allianz Re, for which the Allianz Group does
not apply explicit discounting, but which are already discounted by the primary insurer at a discount rate
not known to the Allianz Group.
reserves For premium reFunds
reserves For premium reFunds
€ mn
Amounts already allocated under local statutory
or contractual regulations
As of 1 January
Foreign currency translation adjustments
Changes in the consolidated subsidiaries
of the Allianz Group
Changes
As of 31 December
Latent reserves for premium refunds
As of 1 January
Foreign currency translation adjustments
Changes in the consolidated subsidiaries
of the Allianz Group
Changes due to fluctuations in market value
Changes due to valuation differences charged
to income
As of 31 December
Total
concentration oF insurance risk
in the liFe/health business segment
The Allianz Group’s Life/Health business segment provides a wide
variety of insurance and investment contracts to individuals and
groups in over 30 countries around the world. Individual contracts
include both traditional contracts and unit-linked contracts. Without
taking policyholder participation into account, traditional contracts
generally incorporate significant investment risk for the Allianz
Group, while unit-linked contracts generally result in the contract
holder assuming the investment risk. Traditional contracts include
life, endowment, annuity, and health contracts. Traditional annuity
contracts are issued in both deferred and immediate types. In addi-
tion, the Allianz Group’s life insurance operations in the United
States issue a significant amount of equity-indexed deferred annui-
ties. In certain markets, the Allianz Group also issues group life,
group health and group pension contracts.
As of 31 December 2013 and 2012, the Allianz Group’s deferred
acquisition costs and reserves for insurance and investment con-
tracts for the business segment Life/Health per reportable segment
are summarized as follows:
2013
2012
11,979
(5)
–
1,257
13,231
28,052
(48)
10
(4,337)
864
24,541
37,772
12,124
4
(1)
(148)
11,979
10,744
7
–
14,690
2,611
28,052
40,031
188
Annual Report 2013
Allianz Group
D
Consolidated Financial Statements
127 Consolidated Balance Sheets
128 Consolidated Income Statements
129 Consolidated Statements of
Comprehensive Income
130 Consolidated Statements of
134 Notes to the Consolidated Financial
Changes in Equity
Statements
131 Consolidated Statements of
Cash Flows
concentration oF insurance risk in the liFe/health business segment per reportable segment
€ mn
as of 31 December
2013
German Speaking Countries
Western & Southern Europe
Iberia & Latin America
USA
Global Insurance Lines & Anglo Markets
Growth Markets
Consolidation
Total
2012
German Speaking Countries
Western & Southern Europe
Iberia & Latin America
USA
Global Insurance Lines & Anglo Markets
Growth Markets
Consolidation
Total
Deferred
acquisition
costs
Aggregate
policy
reserves
Reserves for
premium
refunds
Other
insurance
reserves
Total
non-unit-linked
reserves
Liabilities for
unit-linked
contracts
8,566
2,508
55
4,321
73
2,167
–
17,690
8,232
2,366
31
2,225
50
2,086
–
14,990
186,627
92,856
7,395
51,699
1,877
16,357
(2,985)
353,826
176,912
89,634
6,991
51,488
2,187
16,875
(2,312)
341,775
29,705
5,903
505
–
–
297
–
36,410
31,984
6,146
297
–
–
248
–
38,675
203
291
–
–
6
142
(5)
637
194
265
–
–
6
84
(6)
543
216,535
99,050
7,900
51,699
1,883
16,796
(2,990)
390,873
209,090
96,045
7,288
51,488
2,193
17,207
(2,318)
380,993
6,228
43,169
106
22,314
–
9,247
–
81,064
5,648
36,457
62
19,471
–
9,559
–
71,197
Total
222,763
142,219
8,006
74,013
1,883
26,043
(2,990)
471,937
214,738
132,502
7,350
70,959
2,193
26,766
(2,318)
452,190
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 policy-
holder 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 sensi-
tive to insurance risk.
The Allianz Group’s Life/Health business segment is exposed to
significant investment risk as a result of guaranteed minimum inter-
est 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:
The majority of the Allianz Group’s Life/Health business segment
operations are conducted in Europe. Insurance laws and regulations
in Europe have historically been characterized by legal or contrac-
tual minimum participation of contract holders in the profits of the
insurance company issuing the contract. In particular, Germany,
Switzerland and Austria, which comprise approximately 49 % (2012:
49 %) of the Allianz Group’s reserves for insurance and investment
contracts as of 31 December 2013, include a substantial level of poli-
cyholder participation in all sources of profit including mortality/
morbidity, investment and expense. As a result of this policyholder
participation, the Allianz Group’s exposure to insurance, investment
and expense risk is mitigated.
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 incor-
porate significant insurance risk, although they are accounted for as
insurance contracts because of their discretionary participation fea-
tures. Similarly, a significant portion of the Allianz Group’s unit-
linked contracts in France and Italy do not incorporate significant
insurance risk.
Annual Report 2013
Allianz Group
189
weighted average guaranteed minimum interest rates oF liFe insurance entities
as of 31 December
2013
2012
Germany
France
Italy
United States
Switzerland
South Korea
Belgium
Guaranteed
rate
Non-unit-linked
reserves
% of
non-unit-linked
reserves
Guaranteed
rate
Non-unit-linked
reserves
% of
non-unit-linked
reserves
%
3.0
0.6
2.3
1.1
2.1
4.7
3.2
€ bn
146.8
53.4
27.7
55.9
9.8
8.5
8.0
%
97.5
77.5
56.9
71.5
92.7
89.3
96.1
%
3.1
0.7
2.5
1.3
2.2
4.7
3.4
€ bn
138.9
52.1
27.0
54.9
9.7
8.6
7.6
%
97.7
79.2
60.0
73.8
92.5
90.4
96.7
In most of these markets, the effective interest rates earned on the
investment portfolio exceed these guaranteed minimum interest
rates. In addition, the operations in these markets may also have sig-
nificant mortality and expense margins. However, the Allianz Group’s
Life/Health operations in Switzerland, Belgium, South Korea and Tai-
wan have high guaranteed minimum interest rates on older con-
tracts in their portfolios and, as a result, may be sensitive to declines
in investment rates or a prolonged low interest rate environment. As
of 31 December 2013 the Allianz Group has written off deferred acqui-
sition costs and established premium deficiency reserves on the
most endangered part of the portfolio in South Korea, with an overall
impact of € (111) mn on the consolidated income statement. As a
result, as of 31 December 2013, the Allianz Group does not believe that
it is exposed to further significant risk of premium deficiencies in its
business segment Life/Health.
21 – Financial liabilities for unit-linked contracts
changes in Financial liabilities For unit-linked insurance contracts and unit-linked investment contracts
€ mn
As of 1 January
Foreign currency translation adjustments
Changes in the consolidated subsidiaries of the Allianz Group
Premiums collected
Interest credited
Releases upon death, surrender and withdrawal
Policyholder charges
Portfolio acquisitions and disposals
Reclassifications 1
As of 31 December
Unit-linked
insurance
contracts
2013
Unit-linked
investment
contracts
50,078
(1,909)
–
8,065
5,524
(4,689)
(1,466)
(31)
(215)
55,357
21,119
(347)
1,477
6,989
601
(3,993)
(98)
(19)
(22)
25,707
Unit-linked
insurance
contracts
43,446
(520)
–
7,754
5,467
(4,423)
(1,287)
(18)
(341)
50,078
Total
71,197
(2,256)
1,477
15,054
6,125
(8,682)
(1,564)
(50)
(237)
81,064
2012
Unit-linked
investment
contracts
20,054
41
–
4,438
1,623
(4,957)
(78)
(3)
1
21,119
Total
63,500
(479)
–
12,192
7,090
(9,380)
(1,365)
(21)
(340)
71,197
1
These reclassifications mainly relate to insurance contracts when policyholders change their contract
from a unit-linked to a universal life-type contract.
190
Annual Report 2013
Allianz Group
D
Consolidated Financial Statements
127 Consolidated Balance Sheets
128 Consolidated Income Statements
129 Consolidated Statements of
Comprehensive Income
130 Consolidated Statements of
134 Notes to the Consolidated Financial
Changes in Equity
Statements
131 Consolidated Statements of
Cash Flows
22 – Other liabilities
other liabilities
€ mn
as of 31 December
Payables
Policyholders
Reinsurance
Agents
Subtotal
Payables for social security
Tax payables
Income taxes
Other taxes
Subtotal
Accrued interest and rent
Unearned income
Interest and rent
Other
Subtotal
Provisions
Pensions and similar obligations
Employee related
Share-based compensation plans
Restructuring plans
Loan commitments
Contingent losses from non-insurance business
Other provisions
Subtotal
Deposits retained for reinsurance ceded
Derivative financial instruments used for hedging
that meet the criteria for hedge accounting and
firm commitments
Financial liabilities for puttable equity instruments
Other liabilities
Total
2013
2012
4,911
1,170
1,604
7,685
395
2,580
1,269
3,849
681
16
261
277
7,594
2,104
685
214
42
130
1,617
12,386
1,874
158
3,064
6,514
36,883
4,710
1,845
1,529
8,084
458
2,680
1,143
3,823
671
5
288
293
8,069
2,100
558
304
67
166
1,632
12,896
1,834
462
2,601
6,270
37,392
As of 31 December 2013, other liabilities due within one year amounted
to € 25,223 mn (2012: € 25,121 mn) and those due after more than one
year amounted to € 11,660 mn (2012: € 12,271 mn).
Annual Report 2013
Allianz Group
191
23 – Certificated liabilities
certiFicated liabilities
€ mn 1
Allianz se 2
Senior bonds 3
Fixed rate
Contractual interest rate
Money market securities
Fixed rate
Contractual interest rate
Total Allianz SE 2
Banking subsidiaries
Senior bonds
Fixed rate
Contractual interest rate
Floating rate
Current interest rate
Total banking subsidiaries
All other subsidiaries
Certificated liabilities
Floating rate
Current interest rate
Total all other subsidiaries
Total
Contractual Maturity Date
2014
2015
2016
2017
2018
Thereafter
as of
31 December
2013
as of
31 December
2012
–
–
869
0.40 %
869
68
2.68 %
–
–
68
–
–
–
937
–
–
–
–
–
53
1.32 %
–
–
53
–
–
–
53
1,494
4.00 %
–
–
1,494
72
1.36 %
–
–
72
–
–
–
1,566
–
–
–
–
–
–
–
–
–
–
–
–
–
–
499
1.38 %
–
–
499
–
–
–
–
–
–
–
–
4,588
4.02 %
–
–
4,588
–
–
387
0.53 %
387
–
–
–
6,581
–
869
–
7,450
193
–
387
–
580
–
–
–
5,942
–
1,180
–
7,122
409
–
404
–
813
25
–
25
499
4,975
8,030
7,960
1
2
Except for the interest rates. The interest rates represent the weighted average.
Includes senior bonds issued by Allianz Finance II B.V., guaranteed by Allianz SE and money market securi-
ties issued by Allianz Finance Corporation, a wholly-owned subsidiary of Allianz SE, which are fully and
unconditionally guaranteed by Allianz SE.
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.
192
Annual Report 2013
Allianz Group
D
Consolidated Financial Statements
127 Consolidated Balance Sheets
128 Consolidated Income Statements
129 Consolidated Statements of
Comprehensive Income
130 Consolidated Statements of
134 Notes to the Consolidated Financial
Changes in Equity
Statements
131 Consolidated Statements of
Cash Flows
24 – Subordinated liabilities
subordinated liabilities
€ mn 1
Allianz se 2
Subordinated bonds 3
Fixed rate
Contractual interest rate
Floating rate
Current interest rate
Total Allianz SE 2
Banking subsidiaries
Subordinated bonds
Fixed rate
Contractual interest rate
Total banking subsidiaries
All other subsidiaries
Subordinated liabilities
Fixed rate
Contractual interest rate
Hybrid equity
Floating rate
Current interest rate
Total all other subsidiaries
Total
Contractual Maturity Date
2014
2015
2016
2017
2018
Thereafter
–
–
1,5004
5.50 %
1,500
48
5.04 %
48
–
–
–
–
–
1,548
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
15
5.61 %
15
83
4.27 %
83
20
4.35 %
20
–
–
–
–
–
15
–
–
–
–
–
83
–
–
–
–
–
20
1,519
5.43 %
7,837
5.42 %
9,356
88
4.60 %
88
399
4.63 %
45
1.74 %
444
9,888
as of
31 December
2013
as of
31 December
2012
1,519
–
9,337
–
10,856
3,063
–
7,833
–
10,896
254
–
254
399
–
45
–
444
274
–
274
399
–
45
–
444
11,554
11,614
1
2
Except for interest rates. Interest rates represent the weighted average.
Includes subordinated bonds issued by Allianz Finance II B.V. and guaranteed by Allianz SE.
3
4
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.
€ 1.5 Bn subordinated bond called for redemption effective 15 January 2014.
25 – Equity
equity
€ mn
as of 31 December
Shareholders’ equity
Issued capital
Capital reserves
Retained earnings 1
Foreign currency translation adjustments
Unrealized gains and losses (net) 2
Subtotal
Non-controlling interests
Total
2013
2012
1,169
27,701
17,785
(3,312)
6,741
50,084
2,765
52,849
1,167
27,648
13,524
(2,073)
10,122
50,388
2,575
52,963
1
2
As of 31 December 2013, includes € (220) mn (2012: € (218) mn) related to treasury shares.
As of 31 December 2013, includes € 203 mn (2012: € 256 mn) related to cash flow hedges.
issued capital
Issued capital as of 31 December 2013 amounted to € 1,169 mn divided
into 456,500,000 registered shares. The shares have no par value but
a mathematical per share value of € 2.56 each as a proportion of the
issued capital.
authorized capital
As of 31 December 2013, Allianz SE had authorized capital for the issu-
ance of 214,843,750 shares until 4 May 2015, with a notional amount
of € 550 mn (Authorized Capital 2010/I). The shareholders’ subscrip-
tion rights can be excluded for capital increases against contribution
in kind. For a capital increase against contributions in cash, the share-
holders’ 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 pur-
suant 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
Annual Report 2013
Allianz Group
193
In October 2013, 550,000 (2012: 650,000) shares were issued for cash
out of the Authorized Capital 2010/II at a price of € 99.45 (2012: € 79.25)
per share, enabling employees of Allianz Group subsidiaries in Ger-
many and abroad to purchase shares. As a result, issued capital
increased by € 1 mn and capital reserves by € 53 mn. The Authorized
Capital 2010/II was created to enable Allianz SE to issue new shares
for such employee offerings. To be able to offer the new shares to
employees, the shareholders’ subscription rights to these new shares
were excluded with the consent of the Supervisory Board pursuant to
the authorization granted by the AGm on 5 May 2010.
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 distribu-
tion 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.
treasury shares
As of 31 December 2013, Allianz SE held 2,761,795 (2012: 2,777,438) own
shares. Of these, 155,626 (2012: 171,269) shares were held for covering
subscriptions by employees of the Allianz Group in the context of the
Employee Stock Purchase Plan 2014, whereas 2,606,169 (2012:
2,606,169) shares were held as a hedge for obligations from the Allianz
Equity Incentive Program (former Group Equity Incentive Program).
In the fourth quarter of 2013, 550,000 (2012: 650,000) new Allianz
shares were issued in the context of a capital increase for the
Employee Stock Purchase Plan 2013. In 2013, 565,643 (2012: 627,118)
shares were sold to employees of Allianz SE and its subsidiaries. Of
these, 171,269 (2012: 148,387) originated from the capital increase for
the Employee Stock Purchase Plan in 2012 and 394,374 (2012: 478,731)
from the capital increase for the Employee Stock Purchase Plan in
2013. Employees of the Allianz Group purchased shares at prices
ranging from € 71.03 (2012: € 52.17) to € 100.84 (2012: € 75.19) per share.
The remaining 155,626 (2012: 171,269) shares in 2013 will be used for
the Employee Stock Purchase Plan of Allianz SE and its subsidiaries
in 2014. The total change of holdings in Allianz SE own shares for the
year ending 31 December 2013, amounted to a decrease of 15,643
(2012: increase of 22,882) shares, which corresponds to € 40,046 (2012:
€ 58,578) or 0.003 % (2012: 0.005 %) of issued capital.
mandatory conversion, and (iv) if the new shares are issued in con-
nection with a listing of Allianz shares on a stock exchange in the
People’s Republic of China, the issue price for the new shares is not
significantly below the market price, and the new shares do not
exceed 10 % of the share capital. An overall limit for the exclusion of
subscription rights of up to € 232 mn (corresponding to 20 % of the
share capital at year-end 2009) applies for the Authorized Capital
2010/I and the Conditional Capital 2010.
In addition, Allianz SE has authorized capital (Authorized Capi-
tal 2010/II) for the issuance of shares against cash until 4 May 2015.
The shareholders’ subscription rights can be excluded in order to
issue new shares to employees of Allianz SE and its subsidiaries. As
of 31 December 2013, the Authorized Capital 2010/II amounted to
€ 8 mn (3,259,375 shares).
Further, as of 31 December 2013, Allianz SE had conditional cap-
ital 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 com-
panies have issued against cash payments according to the resolu-
tion of the Annual General Meeting (AGm) on 5 May 2010, are exer-
cised or the conversion obligations under such bonds are fulfilled,
and only insofar as no other methods are used in serving these rights.
Convertible subordinated notes totaling € 500 mn which may be
converted into Allianz shares were issued against cash in July 2011.
Within 10 years after the issuance a mandatory conversion of the
notes into Allianz shares at the then prevailing share price may apply
at the occurrence of certain events, subject to a floor price of at least
€ 75.39 per share. Within the same period, the investors have the right
to convert the notes into Allianz shares at a price of € 188.47 per share.
Both conversion prices are subject to anti-dilution provisions. The
subscription rights of shareholders for these convertible notes have
been excluded with the consent of the Supervisory Board and pursu-
ant to the authorization of the AGm on 5 May 2010. The granting of
new shares to persons entitled under such convertible notes is
secured by the Conditional Capital 2010. On or before 31 December
2013, there was no conversion of any such notes into new shares.
changes in the number
oF issued shares outstanding
number oF issued shares outstanding
2013
2012
Issued shares outstanding as of 1 January
453,171,976
452,473,025
Capital increase for employee shares
550,000
650,000
Change in treasury shares held for non-trading
purposes
14,643
48,951
Issued shares outstanding as of 31 December
453,736,619
453,171,976
Treasury shares
Total number of issued shares
2,763,381
2,778,024
456,500,000
455,950,000
194
Annual Report 2013
Allianz Group
D
Consolidated Financial Statements
127 Consolidated Balance Sheets
128 Consolidated Income Statements
129 Consolidated Statements of
Comprehensive Income
130 Consolidated Statements of
134 Notes to the Consolidated Financial
Changes in Equity
Statements
131 Consolidated Statements of
Cash Flows
Number
of shares
Issued capital
Changes in the treasury shares were:
changes in treasury shares
as of 31 December
Acquisition
costs
€ mn
2013
Allianz se
Other
Total
2012
Allianz se
Other
Total
220
–
220
218
–
218
2,761,795
1,586
2,763,381
2,777,438
586
2,778,024
non-controlling interests
non-controlling interests
€ mn
as of 31 December
Unrealized gains and losses (net)
Share of earnings
Other equity components
Total
2013
93
348
2,324
2,765
%
0.61
–
0.61
0.61
–
0.61
2012
135
327
2,113
2,575
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 deter-
mined 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.
On 1 January 2005, the Financial Conglomerates Directive (FCD),
a supplementary European Union (E.U.) directive, became effective
in Germany. Under this directive, a financial conglomerate is defined
as any financial parent holding company that, together with its sub-
sidiaries, has significant cross-border and cross-sector activities. The
Allianz Group is a financial conglomerate within the scope of the
directive and the related German laws. The directive requires that the
financial conglomerate calculates the capital needed to meet the
respective solvency requirement on a consolidated basis.
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 pub-
lished: € 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 restric-
tions 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 subsid-
iaries were in compliance with all applicable regulatory solvency and
capital adequacy requirements.
Some insurance subsidiaries are subject to regulatory restric-
tions on the amount of dividends which can be remitted to Allianz SE
without prior approval by the appropriate regulatory body. Such
restrictions provide that a company may only pay dividends up to an
amount in excess of certain regulatory capital levels or based on the
levels of undistributed earned surplus or current year income or a
percentage thereof. By way of example only, the operations of the
Allianz Group’s insurance subsidiaries located in the United States
are subject to limitations on the payment of dividends to their parent
company under applicable state insurance laws. Dividends paid in
excess of these limitations generally require prior approval of the
insurance commissioner of the state of domicile. The Allianz Group
believes that these restrictions will not affect the ability of Allianz SE
to pay dividends to its shareholders in the future.
1
Off-balance sheet reserves are accepted by the authorities as eligible capital only upon request; Allianz SE
has not submitted an application so far. The solvency ratio excluding off-balance sheet reserves would
be 173 % (2012: 188 %).
Annual Report 2013
Allianz Group
195
Notes to the CoNsolidated iNCome statemeNts
26 – Premiums earned (net)
27 – Interest and similar income
interest and similar income
€ mn
Interest from held-to-maturity investments
Dividends from available-for-sale investments
Interest from available-for-sale investments
Share of earnings from investments in associates
and joint ventures
Rent from real estate held for investment
Interest from loans to banks and customers
Other interest
Total
2013
182
1,354
13,202
146
791
5,067
176
20,918
2012
204
1,156
13,325
143
741
5,368
147
21,084
Premiums earned (net)
€ mn
2013
Premiums written
Direct
Assumed
Subtotal
Ceded
Net
Change in
unearned premiums
Direct
Assumed
Subtotal
Ceded
Net
Premiums earned
Direct
Assumed
Subtotal
Ceded
Net
2012
Premiums written
Direct
Assumed
Subtotal
Ceded
Net
Change in
unearned premiums
Direct
Assumed
Subtotal
Ceded
Net
Premiums earned
Direct
Assumed
Subtotal
Ceded
Net
Property-
Casualty
Life/Health
Consoli-
dation
Group
43,967
2,612
46,579
(3,982)
42,597
(442)
(71)
(513)
(37)
(550)
43,525
2,541
46,066
(4,019)
42,047
43,824
3,065
46,889
(4,727)
42,162
(587)
(18)
(605)
148
(457)
43,237
3,047
46,284
(4,579)
41,705
24,805
725
25,530
(617)
24,913
(323)
(7)
(330)
(2)
(332)
24,482
718
25,200
(619)
24,581
24,693
610
25,303
(662)
24,641
(243)
–
(243)
(5)
(248)
24,450
610
25,060
(667)
24,393
–
(58)
(58)
58
–
–
(1)
(1)
1
–
–
(59)
(59)
59
–
(53)
(53)
(106)
53
(53)
–
4
4
(4)
–
(53)
(49)
(102)
49
(53)
68,772
3,279
72,051
(4,541)
67,510
(765)
(79)
(844)
(38)
(882)
68,007
3,200
71,207
(4,579)
66,628
68,464
3,622
72,086
(5,336)
66,750
(830)
(14)
(844)
139
(705)
67,634
3,608
71,242
(5,197)
66,045
196
Annual Report 2013
Allianz Group
D
Consolidated Financial Statements
127 Consolidated Balance Sheets
128 Consolidated Income Statements
129 Consolidated Statements of
Comprehensive Income
130 Consolidated Statements of
134 Notes to the Consolidated Financial
Changes in Equity
Statements
131 Consolidated Statements of
Cash Flows
28 – Income from financial assets and liabilities
carried at fair value through income (net)
income from financial assets and liabilities carried at fair value through income (net)
€ mn
2013
Property-
Casualty
Life/Health
Asset
Management
Corporate
and Other Consolidation
Income (expenses) from financial assets and liabilities held for trading (net)
33
(567)
Income (expenses) from financial assets and liabilities designated at fair value
through income (net)
Income (expenses) from financial liabilities for puttable equity instruments (net)
Foreign currency gains and losses (net)
Total
2012
Income (expenses) from financial assets and liabilities held for trading (net)
Income (expenses) from financial assets and liabilities designated at fair value
through income (net)
Income (expenses) from financial liabilities for puttable equity instruments (net)
Foreign currency gains and losses (net)
Total
11
(2)
(92)
(50)
(98)
(25)
46
(49)
(126)
339
(197)
(1,377)
(1,802)
(832)
454
(240)
(96)
(714)
–
62
(49)
–
13
(2)
72
(50)
(4)
16
30
1
–
(37)
(6)
237
(1)
–
30
266
5
(2)
–
–
3
48
(1)
–
–
47
Group
(499)
411
(248)
(1,506)
(1,842)
(647)
499
(244)
(119)
(511)
income (exPenses) from financial assets
and liabilities held for trading (net)
Business segment Life/Health
For the year ended 31 December 2013, income and expenses from
financial assets and liabilities held for trading (net) in the business
segment Life/Health includes expenses of € 600 mn (2012: € 878 mn)
from derivative financial instruments. Included in this is income of
€ 245 mn (2012: € 107 mn) from financial derivative positions of Ger-
man entities, of which expenses of € 317 mn (2012: income of € 466 mn)
relate to duration management, income of € 34 mn (2012: expenses of
€ 396 mn) relates to protection against equity fluctuations and income
of € 540 mn (2012: € 37 mn) relates to protection against foreign
exchange rate fluctuations. Also included are expenses related to
fixed-indexed annuity products and guaranteed benefits under unit-
linked contracts of € 790 mn (2012: € 736 mn) from U.S. entities.
Business segment Corporate and Other
For the year ended 31 December 2013, income and expenses from
financial assets and liabilities held for trading (net) in the business
segment Corporate and Other includes income of € 152 mn (2012:
€ 354 mn) from derivative financial instruments. This includes income
of € 70 mn (2012: expenses of € 14 mn) from financial derivative instru-
ments to protect investments and liabilities against foreign exchange
rate fluctuations. In 2013, hedging of strategic equity investments not
designated for hedge accounting produced no income (2012: € 3 mn).
Financial derivatives related to The Hartford investment produced
no income (2012: € 180 mn) as The Hartford Warrants were sold by the
Allianz Group in April 2012. Expenses of € 125 mn (2012: € 126 mn) from
the hedges of share-based compensation plans (restricted stock
units) are also included.
income (exPenses) from financial assets
and liabilities designated at fair value through
income (net)
For the year ended 31 December 2013, income and expenses from
financial assets and liabilities designated at fair value through
income (net) in the business segment Life/Health includes income
from equity investments of € 228 mn (2012: € 273 mn) and income of
€ 111 mn (2012: € 181 mn) from debt investments.
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 for-
eign currency that are monetary items. This excludes exchange dif-
ferences arising on financial assets and liabilities measured at fair
value through profit or loss, which do not have to be disclosed sepa-
rately. 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.
Annual Report 2013
Allianz Group
197
29 – Realized gains/losses (net)
30 – Fee and commission income
realized gains/losses (net)
€ mn
realized gains
Available-for-sale investments
Equity securities
Debt securities
Subtotal
Investments in associates and joint ventures 1
Real estate held for investment
Loans and advances to banks and customers
Non-current assets classified as held for sale
fee and commission income
2013
2012
€ mn
ProPerty-casualty
Fees from credit and assistance business
2,102
2,308
4,410
73
147
412
104
2,524
2,325
4,849
15
221
829
36
Service agreements
Investment advisory
Subtotal
life/health
Service agreements
Investment advisory
Subtotal
asset management
Management fees
Loading and exit fees
Performance fees
Other
Subtotal
corPorate and other
Service agreements
Investment advisory and banking activities
(377)
(1,230)
(1,607)
(8)
(2)
(6)
–
(1,623)
4,327
Subtotal
Subtotal
5,146
5,950
realized losses
Available-for-sale investments
Equity securities
Debt securities
Subtotal
Investments in associates and joint ventures 2
Real estate held for investment
Loans and advances to banks and customers
Non-current assets classified as held for sale
Subtotal
Total
(253)
(578)
(831)
(12)
(11)
(4)
(3)
(861)
4,285
1
2
During the year ended 31 December 2013, includes realized gains from the disposal of subsidiaries and
businesses of € 48 mN (2012: € 12 mN).
During the year ended 31 December 2013, includes no realized losses from the disposal of subsidiaries
(2012: € 8 mN).
consolidation
Total
31 – Other income
other income
€ mn
Income from real estate held for own use
Realized gains from disposals of real estate held
for own use
Other income from real estate held for own use
Subtotal
Income from alternative investments
Other
Total
198
Annual Report 2013
Allianz Group
2013
2012
753
473
–
1,226
75
571
646
7,317
715
510
69
8,611
62
625
687
(678)
10,492
721
443
1
1,165
69
465
534
6,528
635
766
112
8,041
19
595
614
(542)
9,812
2013
2012
34
–
34
169
6
209
23
8
31
169
14
214
D
Consolidated Financial Statements
127 Consolidated Balance Sheets
128 Consolidated Income Statements
129 Consolidated Statements of
Comprehensive Income
130 Consolidated Statements of
134 Notes to the Consolidated Financial
Changes in Equity
Statements
131 Consolidated Statements of
Cash Flows
32 – Income and expenses from fully
consolidated private equity investments
income and exPenses from fully consolidated Private equity investments
€ mn
Income
Sales and service revenues
Subtotal
Expenses
Cost of goods sold
General and administrative expenses
Interest expenses
Subtotal 1
Total 1
2013
2012
726
726
(219)
(492)
(32)
(743)
(17)
788
788
(250)
(523)
(41)
(814)
(26)
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 participa-
tion, 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.
Annual Report 2013
Allianz Group
199
33 – Claims and insurance benefits
incurred (net)
34 – Change in reserves for insurance
and investment contracts (net)
Claims and insuranCe benefits inCurred (net)
Change in reserves for insuranCe and investment ContraCts (net)
€ mn
2013
Gross
Claims and insurance
benefits paid
Change in loss and loss
adjustment expenses
Subtotal
Ceded
Claims and insurance
benefits paid
Change in loss and loss
adjustment expenses
Subtotal
Net
Claims and insurance
benefits paid
Change in loss and loss
adjustment expenses
Total
2012
Gross
Claims and insurance
benefits paid
Change in loss and loss
adjustment expenses
Subtotal
Ceded
Claims and insurance
benefits paid
Change in loss and loss
adjustment expenses
Subtotal
Net
Claims and insurance
benefits paid
Change in loss and loss
adjustment expenses
Total
Property-
Casualty
Life/Health
Consoli-
dation
Group
(31,235)
(20,215)
32
(51,418)
1,589
(353)
(29,646)
(20,568)
4
36
1,240
(50,178)
2,255
(322)
1,933
462
10
472
(26)
2,691
(3)
(29)
(315)
2,376
€ mn
2013
Gross
Property-
Casualty
Life/Health
Consoli-
dation
Group
Aggregate policy reserves
(232)
(7,545)
Other insurance reserves
7
(208)
(4)
–
(7,781)
(201)
Expenses for premium
refunds
Subtotal
Ceded
Aggregate policy reserves
Other insurance reserves
Expenses for premium
refunds
Subtotal
Net
(161)
(5,959)
(386)
(13,712)
(46)
(50)
(6,166)
(14,148)
3
–
(1)
2
140
9
7
156
–
–
–
–
143
9
6
158
(28,980)
(19,753)
1,267
(343)
(27,713)
(20,096)
6
1
7
925
(47,802)
Expenses for premium
refunds
(48,727)
Aggregate policy reserves
(229)
(7,405)
Other insurance reserves
7
(199)
(4)
–
(7,638)
(192)
(162)
(5,952)
(384)
(13,556)
(46)
(50)
(6,160)
(13,990)
Total
2012
Gross
(30,148)
(20,529)
25
(50,652)
(689)
(411)
(30,837)
(20,940)
8
33
(1,092)
(51,744)
2,321
25
2,346
479
75
554
(22)
2,778
(7)
(29)
93
2,871
Aggregate policy reserves
(135)
(7,666)
Other insurance reserves
(5)
(78)
Expenses for premium
refunds
Subtotal
Ceded
Aggregate policy reserves
Other insurance reserves
Expenses for premium
refunds
Subtotal
(292)
(6,377)
(432)
(14,121)
2
–
–
2
131
6
13
150
(27,827)
(20,050)
(664)
(336)
(28,491)
(20,386)
3
1
4
(47,874)
Net
(999)
(48,873)
Aggregate policy reserves
(133)
(7,535)
Other insurance reserves
(5)
(72)
Expenses for premium
refunds
Total
(292)
(6,364)
(430)
(13,971)
50
–
(9)
41
–
–
–
–
50
–
(9)
41
(7,751)
(83)
(6,678)
(14,512)
133
6
13
152
(7,618)
(77)
(6,665)
(14,360)
200
Annual Report 2013
Allianz Group
D
Consolidated Financial Statements
127 Consolidated Balance Sheets
128 Consolidated Income Statements
129 Consolidated Statements of
Comprehensive Income
130 Consolidated Statements of
134 Notes to the Consolidated Financial
Changes in Equity
Statements
131 Consolidated Statements of
Cash Flows
35 – Interest expenses
38 – Investment expenses
interest expenses
€ mn
Liabilities to banks and customers
Deposits retained on reinsurance ceded
Certificated liabilities
Subordinated liabilities
Other
Total
investment expenses
€ mn
Investment management expenses
Depreciation of real estate held for investment
Other expenses from real estate held for
investment
Total
2013
(259)
(49)
(272)
(642)
(100)
2012
(339)
(51)
(341)
(649)
(97)
(1,322)
(1,477)
2013
(527)
(211)
(167)
(905)
2012
(525)
(190)
(161)
(876)
37 – Impairments of investments (net)
36 – Loan loss provisions
loan loss provisions
€ mn
Additions to allowances including direct
impairments
Amounts released
Recoveries on loans previously impaired
Total
impairments of investments (net)
€ mn
impairments
Available-for-sale investments
Equity securities
Debt securities
Subtotal
Investments in associates and joint ventures 1
Real estate held for investment
Loans and advances to banks and customers
Non-current assets classified as held for sale
Subtotal
reversals of impairments
Available-for-sale investments
Debt securities
Real estate held for investment
Loans and advances to banks and customers
Subtotal
Total
39 – Acquisition
and administrative expenses (net)
2013
(166)
62
18
(86)
aCquisition and administrative expenses (net)
2012
€ mn
(207)
77
19
(111)
property-Casualty
Acquisition costs
Incurred
Commissions and profit received on reinsurance
business ceded
Deferrals of acquisition costs
Amortization of deferred acquisition costs
Subtotal
Administrative expenses
Subtotal
life/health
Acquisition costs
Incurred
2013
2012
Commissions and profit received on reinsurance
business ceded
Deferrals of acquisition costs
Amortization of deferred acquisition costs
Subtotal
Administrative expenses
Subtotal
asset management
Personnel expenses
(804)
(87)
(891)
(23)
(48)
(58)
(3)
(1,023)
Non-personnel expenses
Subtotal
17
33
39
89
Corporate and other
Administrative expenses
Subtotal
Consolidation
Total
(611)
(934)
(392)
(56)
(448)
(108)
(55)
(24)
(31)
(666)
18
22
15
55
2013
2012
(9,829)
(9,471)
479
5,868
(5,705)
(9,187)
(2,755)
498
5,715
(5,605)
(8,863)
(2,771)
(11,942)
(11,634)
(4,591)
(4,535)
67
2,980
(2,571)
(4,115)
(1,488)
(5,603)
(2,607)
(1,419)
(4,026)
110
2,790
(2,241)
(3,876)
(1,440)
(5,316)
(2,578)
(1,286)
(3,864)
(1,297)
(1,297)
(1,245)
(1,245)
3
13
(22,865)
(22,046)
1
For the twelve months ended 31 December 2013, includes an impairment of an associated alternative
investment entity in the amount of € (23) mn. The fair value is classified as level 3 in the fair value hierarchy
and based on a discounted cash flow approach.
Annual Report 2013
Allianz Group
201
40 – Fee and commission expenses
42 – Income taxes
fee and Commission expenses
€ mn
property-Casualty
Fees from credit and assistance business
Service agreements
Subtotal
life/health
Service agreements
Investment advisory
Subtotal
asset management
Commissions
Other
Subtotal
Corporate and other
Service agreements
Investment advisory and banking activities
Subtotal
Consolidation
Total
41 – Other expenses
other expenses
€ mn
Realized losses from disposals of real estate held
for own use
Expenses from alternative investments
Other
Total
202
Annual Report 2013
Allianz Group
inCome taxes
€ mn
Current income taxes
Deferred income taxes
Total
2013
2012
(755)
(386)
(711)
(377)
(1,141)
(1,088)
2013
(2,899)
(401)
(3,300)
2012
(3,324)
163
(3,161)
(39)
(212)
(251)
(1,403)
(81)
(1,484)
(230)
(263)
(493)
331
(42)
(186)
(228)
For the years ended 31 December 2013 and 2012, the income taxes
relating to components of other comprehensive income consist of
the following:
inCome taxes relating to Components of other Comprehensive inCome
(1,243)
(67)
(1,310)
(247)
(247)
(494)
225
€ mn
Items that may be reclassified to profit
or loss in future periods
Foreign currency translation adjustments
Available-for-sale investments
Cash flow hedges
Share of other comprehensive income of
associates
(3,038)
(2,895)
Miscellaneous
Items that may never be reclassified to profit
or loss
Actuarial gains (losses) on defined benefit plans
Total
2013
2012
(23)
1,451
21
6
96
(11)
(2,522)
(27)
–
42
(171)
1,380
785
(1,733)
2013
(2)
(85)
(19)
(106)
2012
(3)
(88)
(3)
(94)
During the year ended 31 December 2013, current income taxes
included expenses of € 138 mn (2012: € 264 mn) related to prior years.
Of the deferred income taxes for the year ended 31 December
2013, expenses of € 47 mn (2012: income of € 399 mn) are attributable
to the recognition of deferred taxes on temporary differences and
expenses of € 356 mn (2012: € 233 mn) are attributable to tax losses car-
ried forward. Additionally, changes of applicable tax rates due to
changes in tax law produced deferred tax income of € 2 mn (2012:
expenses of € 3 mn).
The recognized income taxes for the year ended 31 December
2013 are € 418 mn (2012: € 589 mn) above the expected income taxes.
The following table shows the reconciliation from the expected
income taxes of the Allianz Group to the effectively recognized taxes.
The Allianz Group’s reconciliation is a summary of the individual
company-related reconciliations, which are based on the respective
country-specific tax rates after taking into consideration consolida-
tion effects with an impact on the Group result. The expected tax rate
for domestic Allianz Group companies applied in the reconciliation
includes corporate tax, trade tax and the solidarity surcharge, and
amounts to 31.0 % (2012: 31.0 %).
D
Consolidated Financial Statements
127 Consolidated Balance Sheets
128 Consolidated Income Statements
129 Consolidated Statements of
Comprehensive Income
130 Consolidated Statements of
134 Notes to the Consolidated Financial
Changes in Equity
Statements
131 Consolidated Statements of
Cash Flows
The effective tax rate is determined on the basis of the effective
deferred tax assets and liabilities
income tax expenses on income before income taxes.
deferred tax assets and liabilities
€ mn
as of 31 December
Deferred tax assets
Financial assets carried at fair value through
income
Investments
Deferred acquisition costs
Other assets
Intangible assets
Tax losses carried forward
Insurance reserves
Pensions and similar obligations
Other liabilities
Total deferred tax assets
Non-recognition or valuation allowance for
deferred tax assets on tax losses carried forward
Effect of netting
Net deferred tax assets
Deferred tax liabilities
Financial assets carried at fair value through
income
Investments
Deferred acquisition costs
Other assets
Intangible assets
Insurance reserves
Pensions and similar obligations
Other liabilities
Total deferred tax liabilities
Effect of netting
Net deferred tax liabilities
Net deferred tax assets (liabilities)
2013
2012
23
3,112
1,158
1,363
119
2,213
3,862
3,317
1,040
34
2,871
1,984
1,184
156
2,548
3,935
3,364
992
16,207
17,068
(652)
(714)
(14,047)
(14,828)
1,508
1,526
158
5,732
4,335
725
400
2,691
2,430
754
91
7,884
4,371
580
381
2,420
2,254
882
17,225
(14,047)
3,178
(1,670)
18,863
(14,828)
4,035
(2,509)
Taxable temporary differences associated with investments in Allianz
Group companies, for which no deferred tax liabilities are recognized
as the Allianz Group is able to control the timing of their reversal and
which will not reverse in the foreseeable future, amount to € 757 mn
(2012: € 520 mn). Deductible temporary differences arising from
investments in Allianz Group companies, for which no deferred tax
assets are recognized as it is not probable that they will reverse in the
foreseeable future, amount to € 183 mn (2012: € 185 mn).
effeCtive tax rate
€ mn
Income before income taxes
Expected income tax rate
Expected income taxes
Trade tax and similar taxes
Net tax exempt income
Effects of tax losses
Other effects
Income taxes
Effective tax rate
2013
9,644
29.9 %
2,882
244
(185)
9
350
3,300
34.2 %
2012
8,719
29.5 %
2,572
237
(189)
2
539
3,161
36.3 %
In Italy, a decree law was issued in November 2013 and was converted
into law by the Parliament in January 2014, which increased the cor-
porate income tax rate (IRES) for bank and insurance companies by
8.5 % (from 27.5 % to 36 %). This tax rate increase is applied retroactively
from beginning of 2013 and only for the financial year 2013. It resulted
in an additional tax burden on the Allianz Group operations in Italy
of € 119 mn. This one-off effect is included in the above table in the
other effects.
In the tax reconciliation for 2012, the other effects of € 539 mn
include € 373 mn current and deferred taxes for prior years and a one-
off tax expense from a tax law change in France of € 64 mn.
For the year ended 31 December 2013, the write-down of deferred
tax assets on tax losses carried forward resulted in deferred tax
expenses of € 4 mn (2012: € – mn). The non-recognition of deferred
taxes on tax losses for the current fiscal year increased the tax
expenses by € 17 mn (2012: € 52 mn). Due to the use of tax losses carried
forward for which no deferred tax asset was recognized, the current
income tax expenses decreased by € 3 mn (2012: € 8 mn). Deferred tax
income of € 9 mn (2012: € 42 mn) resulted from the recognition of
deferred tax assets on tax losses carried forward from earlier periods
for which no deferred taxes had yet been recognized. The above men-
tioned effects are shown in the reconciliation statement as “effects
of tax losses”.
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 De-
cember 2013 are taken into account.
Deferred tax assets on losses carried forward are recognized to
the extent to which it is more likely than not that sufficient future
taxable profits will be available for realization. Entities which suffered
a tax loss in either the current or the preceding period recognized
deferred tax assets in excess of deferred tax liabilities amounting to
€ 149 mn (2012: € 332 mn).
Annual Report 2013
Allianz Group
203
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.
Tax losses carried forward are scheduled according to their expiry
periods as follows:
tax losses Carried forward
€ mn
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
>10 years
Unlimited
Total
2013
54
72
132
56
73
111
43
20
65
94
317
8,848
9,885
204
Annual Report 2013
Allianz Group
D
Consolidated Financial Statements
127 Consolidated Balance Sheets
128 Consolidated Income Statements
129 Consolidated Statements of
Comprehensive Income
130 Consolidated Statements of
134 Notes to the Consolidated Financial
Changes in Equity
Statements
131 Consolidated Statements of
Cash Flows
Other InfOrmatIOn
43 – Derivative financial instruments
Derivative financial instruments
€ mn
as of 31 December
Interest rate contracts, consisting of:
OTC
Forwards
Swaps
Swaptions
Caps
Options
Exchange traded
Futures
Forwards
Swaps
Subtotal
Equity/Index contracts, consisting of:
OTC
Forwards
Swaps
Floors
Options
Warrants
Exchange traded
Futures
Forwards
Options
Warrants
Subtotal
Foreign exchange contracts, consisting of:
OTC
Futures
Forwards
Swaps
Options
Exchange traded
Futures
Subtotal
Credit contracts, consisting of:
OTC
Swaps
Floors
Exchange traded
Swaps
Subtotal
Real estate contracts, consisting of:
OTC
Forwards
Options
Subtotal
Total
Annual Report 2013
Allianz Group
2013
Maturity by notional amount
Up to 1 year
1 – 5 years Over 5 years
Notional
principal
amounts
Positive
fair
values
Negative
fair
values
Notional
principal
amounts
2012
Positive
fair
values
Negative
fair
values
774
530
–
11
–
4,498
–
–
5,813
596
1,609
–
104,036
–
12,458
15
6,316
1,620
126,650
124
33,815
50
14
3
34,006
263
–
–
263
–
–
–
166,732
671
4,437
25,429
4,933
–
23
–
–
35,493
–
78
–
2,380
–
–
–
49
7
2,514
429
213
81
32
–
755
2,014
1
–
2,015
–
6
6
40,783
160
19,204
5,072
8
–
–
–
–
24,444
50
1,393
–
223
2,679
149
–
1,454
–
5,948
–
78
97
–
–
175
231
–
6
237
1,605
24,171
30,501
4,952
–
4,521
–
–
65,750
646
3,080
–
106,639
2,679
12,607
15
7,819
1,627
135,112
553
34,106
228
46
3
34,936
2,508
1
6
2,515
77
342
404
1
–
1
–
–
825
124
6
–
469
3
95
–
61
126
884
1
332
6
11
–
350
26
–
3
29
(14)
(949)
(18)
(3)
–
(44)
–
–
(1,028)
(10)
(51)
–
(4,671)
(143)
(109)
–
(30)
–
(5,014)
(21)
(74)
(7)
–
–
(102)
(23)
(1)
–
(24)
635
21,681
26,027
4,974
26
1,641
200
450
55,634
1,181
5,207
2
85,251
1,225
5,653
13
3,780
1,231
103,543
664
21,336
175
13
–
22,188
1,912
–
6
1,918
77
878
140
–
5
4
23
24
1,151
89
27
–
278
–
13
–
29
84
520
2
287
5
–
–
294
15
–
3
18
(2)
(431)
(65)
(14)
(5)
(51)
–
(39)
(607)
(236)
(88)
(2)
(4,714)
(66)
(20)
–
(17)
–
(5,143)
(11)
(45)
(3)
–
–
(59)
(48)
–
–
(48)
–
–
–
30,804
–
6
6
238,319
–
–
–
2,088
–
–
–
(6,168)
291
6
297
183,580
10
1
11
1,994
–
–
–
(5,857)
205
Additionally, the Allianz Group uses fair value hedges to hedge
its equity portfolio against equity market risk. As of 31 December 2013,
the derivatives used as hedging instruments in the related fair value
hedges had a total fair value of € – mn (2012: total negative fair value
of € 209 mn).
For the year ended 31 December 2013, the Allianz Group recog-
nized for fair value hedges a net gain of € 36 mn (2012: net loss of
€ 210 mn) on the hedging instruments and a net loss of € 54 mn (2012:
net gain of € 168 mn) on the hedged items attributable to the hedged
risk.
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 compre-
hensive income are reclassified to profit or loss in the periods when
the hedged item affects profit or loss. This is the case when the fore-
cast transactions that are hedged take place.
Hedge of net investment in foreign operations
As of 31 December 2013, the Allianz Group hedges part of its U.S. Dollar
net investments through the issuance of U.S. Dollar denominated
liabilities with a nominal amount of USD 1.0 bn as well as the use of
forward sales of USD with a notional of USD 1.5 bn and a total positive
fair value of € 2 mn (2012: total fair value of € – mn).
offsetting
The Allianz Group mainly enters into enforceable master netting
arrangements and similar arrangements for derivatives transactions
(gross amount of financial assets in the amount of € 1.8 bn and finan-
cial liabilities in the amount of € 1.3 bn). None of these enforceable
master netting arrangements or similar arrangements meet the
requirements for offsetting in line with IAS 32.
Credit risk associated with netting arrangements is further mit-
igated by collateral. For further information on collateral, please refer
to note 46 – Contingent liabilities, commitments, guarantees, and
assets pledged and collateral.
The table above shows the fair value and notional amounts for all
freestanding derivatives as well as derivatives for which hedge
accounting is applied by the Allianz Group as of 31 December 2013
and 2012, respectively. The notional principal amounts indicated in
the table are cumulative as they include the absolute value of the
notional principal amounts of derivatives with positive and negative
fair values. Although these notional principal amounts reflect the
degree of the Allianz Group’s involvement in derivative transactions,
they do not represent amounts exposed to risk. Further information
on the use of derivatives to hedge risks can be found in the sections
on market and credit risk in the Risk Report which forms part of the
Group Management Report.
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.
Derivative financial instruments
useD in accounting heDges
As of 31 December 2013, derivatives which form part of hedge
accounting relationships, included in the line items other assets and
other liabilities, had a notional amount of € 5.3bn (2012: € 4.6 bn), as
well as a positive fair value of € 75 mn (2012: € 129 mn) and a negative
fair value of € 158 mn (2012: € 462 mn). These hedging instruments
mainly include interest rate swaps with a total negative fair value of
€ 126 mn (2012: € 193 mn).
Fair value hedges
The Allianz Group uses fair value hedges to hedge the exposure to
changes in the fair value of financial assets due to movements in
interest or exchange rates. As of 31 December 2013, the derivative
financial instruments used for the related fair value hedges of the
Allianz Group had a total negative fair value of € 126 mn (2012:
€ 199 mn). Within the Allianz Group’s Banking business, derivatives to
hedge against interest rate changes are implemented for individual
transactions (micro hedges) or for a portfolio of similar assets or
liabilities (macro hedges).
206
Annual Report 2013
Allianz Group
D
Consolidated Financial Statements
127 Consolidated Balance Sheets
128 Consolidated Income Statements
129 Consolidated Statements of
Comprehensive Income
130 Consolidated Statements of
134 Notes to the Consolidated Financial
Changes in Equity
Statements
131 Consolidated Statements of
Cash Flows
44 – Financial instruments
and fair value measurement
Certain risk disclosure requirements of IFRS 7 are reflected in the
following sections within the Risk Report in the Group Management
Report:
− Internal Risk Capital Model including all subsections,
− Limitations,
− Concentration of risks,
− Quantifiable risks in the internal capital model including all
subsections other than Business risk and Operational risk,
− Liquidity risk.
fair values anD carrying amounts
of financial instruments
The following table compares the carrying amount with the fair value
of the Allianz Group’s financial assets and financial liabilities:
fair values anD carrying amounts of financial instruments
€ mn
as of 31 December
financial assets
Cash and cash equivalents
Financial assets held for trading
Financial assets designated at fair value through income
Available-for-sale investments
Held-to-maturity investments
Loans and advances to banks and customers
Financial assets for unit-linked contracts
Derivative financial instruments and firm commitments included in other assets
financial liabilities
Financial liabilities held for trading
Liabilities to banks and customers
Financial liabilities for unit-linked contracts
Derivative financial instruments and firm commitments included in other liabilities
Financial liabilities for puttable equity instruments
Certificated liabilities and subordinated liabilities
The Allianz Group carries certain financial instruments at fair value
and discloses the fair value of most other assets and liabilities. The
fair value of an asset or liability is defined as the price that would be
received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date.
The maximum exposure to credit risk of financial assets, without
taking collateral into account, is represented by their carrying
amount except for available-for-sale financial assets, for which it is
represented by the amortized cost amount.
The degree of judgment used in measuring the fair value of
financial instruments closely correlates with the level of non-market
observable inputs. The Allianz Group maximizes the use of observ-
able inputs and minimizes the use of non-market observable inputs
when measuring fair value. Observability of input parameters is
influenced by various factors such as type of the financial instrument,
2013
2012
Carrying amount
Fair value
Carrying amount
Fair value
11,207
2,512
4,733
392,023
4,140
116,800
81,064
75
6,013
23,109
81,064
158
3,064
19,584
11,207
2,512
4,733
392,023
4,647
129,528
81,064
75
6,013
23,282
81,064
158
3,064
20,899
12,437
2,346
4,937
383,254
4,321
119,369
71,197
129
5,397
22,425
71,197
462
2,601
19,574
12,437
2,346
4,937
383,254
4,719
137,215
71,197
129
5,397
23,140
71,197
462
2,601
21,174
whether a market is established for the particular instrument, spe-
cific transaction characteristics, liquidity as well as general market
conditions.
If the fair value cannot be measured reliably, amortized cost is
used as a proxy for determining fair values. As of 31 December 2013,
fair values could not be reliably measured for equity investments
with carrying amounts totaling € 214 mn (2012: € 223 mn). These invest-
ments are primarily investments in privately held corporations and
partnerships. During the year ended 31 December 2013, such invest-
ments with carrying amounts of € 35 mn (2012: € 99 mn) were sold
leading to gains of € 2 mn (2012: no gains or losses).
Annual Report 2013
Allianz Group
207
fair value hierarchy
Assets and liabilities measured or disclosed at fair value in the con-
solidated 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.
In general, the subsidiaries assume responsibility for assessing
fair values and hierarchies of assets and liabilities. This is consistent
with the decentralized organizational structure of the Allianz Group
and reflects market insights of local managers. Estimates and
assumptions are particularly significant when determining the fair
value of financial instruments for which at least one significant input
is not based on observable market data (classified within level 3 of
the fair value hierarchy). The availability of market information is
determined by the relative trading levels of identical or similar instru-
ments in the market, with emphasis placed on information that
represents actual market activity or binding quotations from brokers
or dealers. If no sufficient market information is available, manage-
ment’s best estimate of a particular input is used to determine the
value.
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 instru-
ment is not active or when the fair value is determined by using valu-
ation 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.
Valuation techniques – Non-market observable inputs
– Fair value level 3:
Where observable market inputs are not available, the fair value is
based on valuation techniques using non-market observable inputs.
Valuation techniques include the discounted cash flow method,
comparison to similar instruments for which observable market
prices exist and other valuation models. Appropriate adjustments
are made for credit risks. In particular, when observable market
inputs are not available, the use of estimates and assumptions may
have a high impact on the valuation outcome.
fair value measurement on a recurring basis
The following financial assets and liabilities are carried at fair value
on a recurring basis:
Valuation techniques – Market observable inputs
– Fair value level 2:
At the end of 2013, the Institute of Public Auditors in Germany (IDW)
published a new interpretation of IFRS 13 (IDW RS HFA 47). For prices
provided by third parties; HFA 47 states that composite prices gen erally
have to be classified in level 2 of the fair value hierarchy and only
single (unadjusted) quotes could qualify for level 1. As the Allianz
Group uses prices provided by service agencies on a consensus level,
the Allianz Group shifted most fixed income securities from level 1 to
level 2 due to this new interpretation. However, the interpretation is
still subject to discussion and, depending on the final outcome, re-
transfers are possible in subsequent reporting periods.
− Financial assets and liabilities held for trading,
− Financial assets and liabilities designated at fair value through
income,
− Available-for-sale investments,
− Financial assets and liabilities for unit-linked contracts,
− Derivative financial instruments and firm commitments included
in other assets and other liabilities and
− Financial liabilities for puttable equity instruments.
208
Annual Report 2013
Allianz Group
D
Consolidated Financial Statements
127 Consolidated Balance Sheets
128 Consolidated Income Statements
129 Consolidated Statements of
Comprehensive Income
130 Consolidated Statements of
134 Notes to the Consolidated Financial
Changes in Equity
Statements
131 Consolidated Statements of
Cash Flows
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.
fair value hierarchy as of 31 December 2013 (items carrieD at fair value)
€ mn
financial assets
Financial assets carried at fair value through income
Financial assets held for trading
Debt securities
Equity securities
Derivative financial instruments
Subtotal
Financial assets designated at fair value through income
Debt securities
Equity securities
Subtotal
Subtotal
Available-for-sale investments
Equity securities
Government and agency mortgage-backed securities (residential and commercial)
Corporate mortgage-backed securities (residential and commercial)
Other asset-backed securities
Government and government agency bonds
Corporate bonds
Other debt securities
Subtotal
Financial assets for unit-linked contracts
Derivative financial instruments and firm commitments included in other assets
Total
financial liabilities
Financial liabilities held for trading
Derivative financial instruments
Other trading liabilities
Subtotal
Financial liabilities for unit-linked contracts
Derivative financial instruments and firm commitments included in other liabilities
Financial liabilities for puttable equity instruments
Total
Level 1 –
Quoted prices in
active markets
Level 2 –
Market
observable inputs
Level 3 –
Non-market
observable inputs
Total fair value
–
22
284
306
–
2,466
2,466
2,772
25,979
–
–
–
35,570
18,939
–
80,488
78,230
–
161,490
136
–
136
78,230
–
2,958
81,324
360
103
1,691
2,154
2,007
–
2,007
4,161
765
2,602
11,800
3,418
127,324
154,080
1,770
301,759
2,655
75
308,650
1,447
3
1,450
2,655
158
18
4,281
–
14
38
52
1
259
260
312
5,553
–
33
212
56
3,149
773
9,776
179
–
10,267
4,427
–
4,427
179
–
88
4,694
360
139
2,013
2,512
2,008
2,725
4,733
7,245
32,297
2,602
11,833
3,630
162,950
176,168
2,543
392,023
81,064
75
480,407
6,010
3
6,013
81,064
158
3,064
90,299
Annual Report 2013
Allianz Group
209
fair value hierarchy as of 31 December 2012 (items carrieD at fair value)
€ mn
financial assets
Financial assets carried at fair value through income
Financial assets held for trading
Debt securities
Equity securities
Derivative financial instruments
Subtotal
Financial assets designated at fair value through income
Debt securities
Equity securities
Subtotal
Subtotal
Available-for-sale investments
Equity securities
Government and agency mortgage-backed securities (residential and commercial)
Corporate mortgage-backed securities (residential and commercial)
Other asset-backed securities
Government and government agency bonds
Corporate bonds
Other debt securities
Subtotal
Financial assets for unit-linked contracts
Derivative financial instruments and firm commitments included in other assets
Total
financial liabilities
Financial liabilities held for trading
Derivative financial instruments
Other trading liabilities
Subtotal
Financial liabilities for unit-linked contracts
Derivative financial instruments and firm commitments included in other liabilities
Financial liabilities for puttable equity instruments
Total
Level 1 –
Quoted prices in
active markets
Level 2 –
Market
observable inputs
Level 3 –
Non-market
observable inputs
Total fair value
102
69
36
207
1,945
2,355
4,300
4,507
19,933
37
26
80
138,690
33,512
1,390
193,668
68,508
–
266,683
58
–
58
68,508
–
2,495
71,061
226
84
1,670
1,980
404
–
404
2,384
1,291
4,278
11,817
2,465
21,915
137,705
960
180,431
2,504
129
185,448
756
2
758
2,504
462
26
3,750
–
–
159
159
–
233
233
392
5,263
–
30
236
38
3,121
467
9,155
185
–
9,732
4,581
–
4,581
185
–
80
4,846
328
153
1,865
2,346
2,349
2,588
4,937
7,283
26,487
4,315
11,873
2,781
160,643
174,338
2,817
383,254
71,197
129
461,863
5,395
2
5,397
71,197
462
2,601
79,657
210
Annual Report 2013
Allianz Group
D
Consolidated Financial Statements
127 Consolidated Balance Sheets
128 Consolidated Income Statements
129 Consolidated Statements of
Comprehensive Income
130 Consolidated Statements of
134 Notes to the Consolidated Financial
Changes in Equity
Statements
131 Consolidated Statements of
Cash Flows
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 clas-
sifies composite prices in level 2 of the fair value hierarchy. As the
Allianz Group uses prices provided by pricing agencies on a consen-
sus level, the Allianz Group shifted most fixed income securities from
level 1 to level 2 due to this new interpretation.
Furthermore, the Allianz Group uses valuation techniques con-
sistent with the three widely used classes of valuation techniques
listed in IFRS 13:
− Market approach: Prices and other relevant information gener-
ated by market transactions involving identical or comparable
assets or liabilities.
− Cost approach: Amount that would be currently required to
replace the service capacity of an asset (replacement cost).
− Income approach: Conversion of future amounts such as cash
flows or income to a single current amount (present value
technique).
There is no one-to-one connection between valuation technique and
hierarchy level. Depending on whether the valuation techniques are
based on significant observable or unobservable inputs, financial
instruments are classified in the fair value hierarchy.
Financial assets carried at fair value through income
Financial assets held for trading – Debt and equity securities
The fair value is mainly determined using the market approach. In
some cases, the fair value is determined based on the income
approach using interest rates and yield curves observable at com-
monly quoted intervals.
Financial assets held for trading – Derivative financial
instruments
For level 2, the fair value is mainly determined based on the income
approach using present value techniques and the Black-Scholes-
Merton model. Primary inputs to the valuation include volatilities,
interest rates, yield curves, and foreign exchange rates observable at
commonly quoted intervals.
For level 3, derivatives are mainly priced by third-party vendors.
Controls are in place to monitor the valuations of these derivatives.
Valuations are mainly derived based on the income approach.
Financial assets designated at fair value through income
– Debt securities
The fair value is determined using the market approach.
Financial assets designated at fair value through income
– Equity securities
For level 2, the fair value is determined using the market approach.
For level 3, equity securities mainly represent private equity funds.
The fair value is in most cases derived from the net asset value based
on the valuation of the underlying private equity companies as pro-
vided by third-party vendors.
Available-for-sale investments
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 partici-
pants. 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.
Available-for-sale investments – Debt securities
Debt securities include:
− Government and agency mortgage-backed securities (residential
and commercial),
− Corporate mortgage-backed securities (residential and com-
mercial),
− Other asset-backed securities,
− Government and government agency bonds,
− Corporate bonds and
− Other debt securities.
The valuation techniques for these debt securities are similar. For
level 2 and level 3, the fair value is determined using the market and
the income approach. Primary inputs to the market approach are
quoted prices for identical or comparable assets in active markets
where the comparability between security and benchmark defines
the fair value level. The income approach in most cases means a
present value technique where either the cash flow or the discount
curve is adjusted to reflect credit risk and liquidity risk. Depending on
the observability of these risk parameters in the market, the security
is classified in level 2 or level 3.
Annual Report 2013
Allianz Group
211
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.
Financial liabilities for unit-linked contracts are valued based on
their corresponding assets.
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 – Derivative financial
instruments
For level 2, the fair value is mainly determined using the income
approach. Valuation techniques applied for the income approach
mainly include discounted cash flow models as well as the Black-
Scholes-Merton model. Main observable input parameters include
volatilities, yield curves observable at commonly quoted intervals
and credit spreads observable in the market. For level 3, the fair value
is mainly determined based on the income approach using deter-
ministic discounted cash flow models. A significant proportion of
derivative liabilities represent derivatives embedded in certain life
and annuity contracts. Significant non-market observable input
parameters include mortality rates and surrender rates.
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.
Financial liabilities for puttable equity instruments
Financial liabilities for puttable equity instruments are generally
required to be recorded at the redemption amount with changes
recognized in income. For level 2, the fair value is mainly determined
based on the income approach using present value techniques. For
level 3, equity securities mainly represent private equity funds. The
fair value is in most cases derived from the net asset value based on
the valuation of the underlying private equity companies as provided
by third-party vendors.
Significant transfers of financial instruments
carried at fair value
In general, financial assets and liabilities are transferred from level 1
to level 2 when liquidity, trade frequency and activity are no longer
indicative of an active market. Conversely, the same policy applies for
transfers from level 2 to level 1.
At the end of 2013, the Allianz Group follows the new interpreta-
tion 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 avail-
able-for-sale securities were transferred from level 2 to level 3 in the
fourth quarter of 2013.
Significant level 3 portfolios – Narrative description
and sensitivity analysis
Available-for-sale investments – Equity securities
Equity securities within available-for-sale investments classified as
level 3 mainly comprise private equity fund investments as well as
Alternative Investments of the Allianz Group and are in most cases
delivered as net asset values by the fund managers (€ 5.5 bn). The net
asset values are calculated using material non-public information
about the respective private equity companies. The Allianz Group has
only limited insight into the specific inputs used by the fund man-
agers and hence a narrative sensitivity analysis is not applicable. The
fund’s asset manager generally prices the underlying single portfolio
companies in line with the International Private Equity and Venture
Capital Valuation (IPEV) guidelines using discounted cash flow
(income approach) or multiple methods (market approach). For
certain investments, the invested capital is considered to be a rea-
sonable proxy for the fair value. In these cases, sensitivity analyses
are also not applicable.
212
Annual Report 2013
Allianz Group
D
Consolidated Financial Statements
127 Consolidated Balance Sheets
128 Consolidated Income Statements
129 Consolidated Statements of
Comprehensive Income
130 Consolidated Statements of
134 Notes to the Consolidated Financial
Changes in Equity
Statements
131 Consolidated Statements of
Cash Flows
Available-for-sale investments – Corporate bonds
Corporate bonds within available-for-sale investments classified as
level 3 are mainly priced based on the income approach (€ 2.8 bn).
The primary non-market observable input used in the discounted
cash flow method is an option adjusted spread taken from a bench-
mark security. A significant yield increase of the benchmark securi-
ties in isolation could result in a decreased fair value, while a signifi-
cant yield decrease could result in an increased fair value. However,
a 10 % stress of the main non-market observable inputs only has an
immaterial impact on fair value.
Financial liabilities held for trading
Financial liabilities held for trading mainly include embedded
de rivative financial instruments relating to annuity products that are
priced internally using discounted cash flow models (€ 4.3 bn). A sig-
nificant decrease (increase) in surrender rates, mortality rates or the
utilization of annuitization benefits could result in a higher (lower)
fair value. For products with a high death benefit, surrender rates
may show an opposite effect. However, a 10 % stress of the main non-
market observable inputs only has an immaterial impact on fair
value.
Quantification of significant non-market observable inputs
The following table shows the quantitative description of valuation
technique(s) and input(s) used for the level 3 portfolios described
above.
Quantitative Description of valuation techniQue(s) anD non-market observable input(s) useD
€ mn
Description
Available-for-sale investments
Equity securities
Corporate bonds
Financial liabilities held for trading
Derivative financial instruments
Fixed indexed annuities
Fair value as of
31 December 2013 Valuation technique(s)
Non-market
observable input(s)
4,072 Net asset value
n/a
Range
n/a
2,798 Discounted cash flow method
Option adjusted spread
36 bps – 604 bps
4,298
4,186 Present value of insurance cash flow
Annuitizations
Surrenders
Mortality
Withdrawal benefit election
Volatility
0 % – 25 %
0 % – 25 %
0 % – 100 %
0 % – 50 %
n/a
0.5 % – 35 %
0 % – 100 %
Variable annuities
112 Deterministic discounted cash flow
Surrenders
Mortality
Annual Report 2013
Allianz Group
213
Reconciliation of level 3 financial instruments
The following tables show a reconciliation of the financial instruments
carried at fair value and classified as level 3.
reconciliation of level 3 financial assets
€ mn
financial assets
Financial assets carried at fair value through income
Financial assets held for trading
Debt securities
Equity securities
Derivative financial instruments
Subtotal
Financial assets designated at fair value through income
Debt securities
Equity securities
Subtotal
Available-for-sale investments
Equity securities
Corporate mortgage-backed securities (residential and commercial)
Other asset-backed securities
Government and government agency bonds
Corporate bonds
Other debt securities
Subtotal
Financial assets for unit-linked contracts
Total financial assets at fair value
reconciliation of level 3 financial liabilities
€ mn
financial liabilities
Financial liabilities held for trading
Derivative financial instruments
Financial liabilities for unit-linked contracts
Financial liabilities for puttable equity instruments
Total financial liabilities at fair value
214
Annual Report 2013
Allianz Group
Carrying value
(fair value) as of
1 January 2013
Additions through
purchases and issues
Net transfers
into (out of) level 3
Disposals through
sales and settlements
Net gains (losses)
recognized in
consolidated
Net gains (losses)
recognized in other
Foreign currency
subsidiaries of the
Changes in the
consolidated
Carrying value
(fair value) as of
income statement
comprehensive income
Impairments
transla tion adjustments
Allianz Group
31 December 2013
–
–
159
159
–
233
233
5,263
30
236
38
3,121
467
9,155
185
9,732
5
13
11
29
1
15
16
925
–
12
42
503
79
1,561
3
1,609
–
–
–
–
1
2
3
453
2
(3)
–
(37)
237
652
8
663
(5)
–
(596)
(601)
(1)
(7)
(8)
(726)
(4)
(48)
(18)
(134)
(10)
(940)
(17)
(1,566)
Carrying value
(fair value) as of
1 January 2013
Additions through
purchases and issues
Net transfers
into (out of) level 3
Disposals
through sales and
settlements
Net losses (gains)
recognized in
consolidated
Net losses (gains)
recognized in other
Foreign currency
transla tion
adjustments
Changes in the
consolidated
subsidiaries of the
Carrying value
(fair value) as of
income statement
comprehensive income
Impairments
Allianz Group
31 December 2013
4,581
185
80
4,846
961
3
–
964
–
8
2
10
(673)
(17)
–
(690)
(1)
–
–
(1)
(197)
–
–
(197)
–
–
–
–
–
–
–
(115)
–
(1)
(3)
–
(17)
(136)
(1)
(137)
–
–
(1)
(1)
–
–
–
(76)
(1)
(6)
(1)
(132)
(216)
–
–
(217)
–
1
465
466
–
16
16
(64)
(1)
3
3
1
–
1
(58)
425
(245)
1
5
(239)
(116)
3
19
(1)
(173)
(250)
18
–
(250)
–
–
–
–
–
–
–
–
–
1
1
Net gains (losses) in
profit or loss
attributable to a change
in unrealized gains or
losses for financial
assets held at the
reporting date
–
1
11
12
–
–
–
–
–
–
–
–
–
–
–
12
549
–
–
549
Net losses (gains) in
profit or loss
attributable to a change
in unrealized gains or
losses for financial
liabilities held at the
reporting date
–
14
38
52
1
259
260
5,553
33
212
56
3,149
773
9,776
179
10,267
4,427
179
88
4,694
(1)
–
–
–
–
–
–
–
9
–
–
–
–
8
–
8
–
–
–
–
D
Consolidated Financial Statements
127 Consolidated Balance Sheets
128 Consolidated Income Statements
129 Consolidated Statements of
Comprehensive Income
130 Consolidated Statements of
134 Notes to the Consolidated Financial
Changes in Equity
Statements
131 Consolidated Statements of
Cash Flows
Reconciliation of level 3 financial instruments
The following tables show a reconciliation of the financial instruments
carried at fair value and classified as level 3.
reconciliation of level 3 financial assets
€ mn
financial assets
Financial assets carried at fair value through income
Financial assets held for trading
Debt securities
Equity securities
Derivative financial instruments
Subtotal
Financial assets designated at fair value through income
Debt securities
Equity securities
Subtotal
Available-for-sale investments
Equity securities
Corporate mortgage-backed securities (residential and commercial)
Other asset-backed securities
Government and government agency bonds
Corporate bonds
Other debt securities
Subtotal
Financial assets for unit-linked contracts
Total financial assets at fair value
reconciliation of level 3 financial liabilities
€ mn
financial liabilities
Financial liabilities held for trading
Derivative financial instruments
Financial liabilities for unit-linked contracts
Financial liabilities for puttable equity instruments
Total financial liabilities at fair value
Carrying value
(fair value) as of
1 January 2013
purchases and issues
into (out of) level 3
sales and settlements
Additions through
Net transfers
Disposals through
Net gains (losses)
recognized in
consolidated
income statement
Net gains (losses)
recognized in other
comprehensive income
Impairments
Foreign currency
transla tion adjustments
Changes in the
consolidated
subsidiaries of the
Allianz Group
Carrying value
(fair value) as of
31 December 2013
Net gains (losses) in
profit or loss
attributable to a change
in unrealized gains or
losses for financial
assets held at the
reporting date
–
–
159
159
–
233
233
5,263
30
236
38
3,121
467
9,155
185
9,732
5
13
11
29
1
15
16
925
–
12
42
503
79
1,561
3
1,609
–
–
–
–
1
2
3
(37)
453
2
(3)
–
237
652
8
663
(5)
–
(596)
(601)
(1)
(7)
(8)
(726)
(4)
(48)
(18)
(134)
(10)
(940)
(17)
(1,566)
–
1
465
466
–
16
16
(64)
3
3
(1)
1
–
(58)
1
425
–
–
–
–
–
–
–
(116)
3
19
(1)
(173)
18
(250)
–
(250)
–
–
–
–
–
–
–
(115)
–
(1)
(3)
–
(17)
(136)
(1)
(137)
–
–
(1)
(1)
–
–
–
(76)
(1)
(6)
(1)
(132)
–
(216)
–
(217)
–
–
–
–
–
–
–
9
–
–
–
–
(1)
8
–
8
–
14
38
52
1
259
260
5,553
33
212
56
3,149
773
9,776
179
10,267
–
1
11
12
–
–
–
–
–
–
–
–
–
–
–
12
Carrying value
(fair value) as of
1 January 2013
purchases and issues
into (out of) level 3
settlements
Additions through
Net transfers
through sales and
Disposals
Net losses (gains)
recognized in
consolidated
income statement
Net losses (gains)
recognized in other
comprehensive income
Foreign currency
transla tion
adjustments
Changes in the
consolidated
subsidiaries of the
Allianz Group
Carrying value
(fair value) as of
31 December 2013
Impairments
4,581
185
80
4,846
961
3
–
964
–
8
2
10
(673)
(17)
–
(690)
(245)
1
5
(239)
–
–
1
1
–
(1)
–
(1)
(197)
–
–
(197)
–
–
–
–
4,427
179
88
4,694
Annual Report 2013
Allianz Group
Net losses (gains) in
profit or loss
attributable to a change
in unrealized gains or
losses for financial
liabilities held at the
reporting date
549
–
–
549
215
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.
If financial assets are measured at fair value on a non-recurring
basis at the time of impairment, corresponding disclosures can be
found in note 37 – Impairments of investments (net). If fair value less
cost to sell is used as the measurement basis under IFRS 5, corre-
sponding disclosures can be found in note 14 – Non-current assets
classified as held for sale.
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)
€ mn
Level 1 –
Quoted prices in
active markets
Level 2 –
Market
observable inputs
Level 3 –
Non-market
observable inputs
Total fair value
981
393
–
402
–
1,776
6,588
–
–
6,588
3,664
54
–
90,443
–
94,161
1,977
7,863
12,042
21,882
2
3,227
15,625
38,683
3,626
61,163
14,717
713
281
15,711
4,647
3,674
15,625
129,528
3,626
157,100
23,282
8,576
12,323
44,181
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.
Liabilities to banks and customers
Level 1 consists mainly of highly liquid liabilities, e. g. payables on
demand. The fair value for liabilities in level 2 and level 3 is mainly
derived based on the income approach using future cash flows dis-
counted with risk-specific interest rates. Main non-market observ-
able inputs include credit spreads. In some cases, the carrying
amount (amortized cost) is considered to be a reasonable estimate
of the fair value.
financial assets
Held-to-maturity investments
Investments in associates and joint ventures
Real estate held for investment
Loans and advances to banks and customers
Real estate held for own use
Total assets
financial liabilities
Liabilities to banks and customers
Certificated liabilities
Subordinated liabilities
Total liabilities
Held-to-maturity investments
For level 2, the fair value is mainly determined based on the income
approach using deterministic discounted cash flow models. For
level 3, the carrying amount (amortized cost) is considered to be a
rea sonable estimate for the fair value.
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.
Real estate
Fair values are mainly determined based on the income approach. In
some cases, a market approach is applied using market prices of
identical or comparable assets in markets which are not active. The
fair values are either calculated internally and validated by external
experts or derived from expert appraisals with internal controls in
place to monitor these valuations.
216
Annual Report 2013
Allianz Group
D
Consolidated Financial Statements
127 Consolidated Balance Sheets
128 Consolidated Income Statements
129 Consolidated Statements of
Comprehensive Income
130 Consolidated Statements of
134 Notes to the Consolidated Financial
Changes in Equity
Statements
131 Consolidated Statements of
Cash Flows
Certificated liabilities and subordinated liabilities
For level 2, the fair value is mainly determined based on the market
approach using quoted market prices and the income approach
using deterministic discounted cash flow models. For level 3, fair
values are mainly derived based on the income approach using
deterministic cash flows with credit spreads as primary non-market
observable inputs. In some cases, the carrying amount (amortized
cost) is considered to be a reasonable estimate for the fair value.
reclassification of financial assets
On 31 January 2009, certain USD-denominated CDOs were reclassified
from financial assets held for trading to loans and advances to banks
and customers in accordance with IAS 39.
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.
maturity of financial liabilities
Tabular disclosure of contractual obligations
The table sets forth the Allianz Group’s contractual obligations as of
31 December 2013. Contractual obligations do not include contingent
liabilities or commitments. Only transactions with parties outside
the Allianz Group are considered.
The table includes only liabilities that represent fixed and deter-
minable amounts. The table excludes interest on floating rate long-
term debt obligations and interest on money market securities, as
the contractual interest rate on floating rate obligations is not fixed
and determinable. The amount and timing of interest on money mar-
ket securities is not fixed and determinable since these instruments
have a daily maturity. For further information, see notes 23 and 24 to
the consolidated financial statements.
As of 31 December 2013, the income tax obligations amounted to
€ 2,580 mn. The Allianz Group expects to pay € 1,665 mn thereof within
the twelve months after the balance sheet date. For the remaining
amount of € 915 mn, an estimate of the timing of cash outflows is not
reasonably possible. The income tax obligations are not included in
the table below.
contractual obligations
€ mn
Financial liabilities
Financial liabilities carried at fair value through income
Liabilities to banks and customers 1
Derivative financial instruments and firm commitments included in other liabilities
Financial liabilities for puttable equity instruments
Certificated liabilities and subordinated liabilities 1
Insurance liabilities
Future policy benefits 2
Reserves for loss and loss adjustment expenses
Other liabilities
Operating lease obligations 3
Purchase obligations 4
Contractual cash flows as of 31 December 2013
Due in 2014
Due in 2015 – 2018
Due after 2018
Total
4,654
16,991
14
3,064
2,485
43,536
15,852
353
485
374
2,777
63
–
2,236
155,867
19,070
1,249
1,188
985
3,341
81
–
14,863
955,603
18,522
1,401
122
6,013
23,109
158
3,064
19,584
1,155,006
53,444
3,003
1,795
1
2
3
For materiality reasons, the carrying amount is split up into the different contractual maturities.
Including investment contracts with policyholders and financial liabilities for unit-linked contracts.
The amount of € 3,003 mn is gross of € 60 mn related to subleases, which represent cash inflow to the
Allianz Group.
4
Purchase obligations only include transactions related to goods and services; purchase obligations for
financial instruments are not included.
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 con-
tracts 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
Annual Report 2013
Allianz Group
217
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, morbid-
ity, interest crediting rates, policyholder participation in profits and
future lapse rates. These assumptions represent current best esti-
mates 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.
Furthermore, these amounts do not include € 178,822 mn of pre-
miums and fees expected to be received, expenses incurred to parties
other than the policyholders such as agents and administrative
expenses; nor do they include investment income earned. In addition,
these amounts are presented net of reinsurance expected to be
received as a result of these cash flows. For further information on
reserves for insurance and investment contracts, see note 20 of the
consolidated financial statements.
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 trans-
actions 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, commit-
ments, guarantees, and assets pledged and collateral.
45 – Related party transactions
Information on the remuneration of Board members and transac-
tions with these persons can be found in the Remuneration Report,
starting on
page 37.
Transactions between Allianz SE and its subsidiaries that are to
be deemed related parties have been eliminated in the consolidation
and are not disclosed in the notes.
Business relations with joint ventures and associates are set on
an arm’s length basis.
46 – Contingent liabilities, commitments,
guarantees, and assets pledged and
collateral
conTingenT liabiliTies
Litigation
Allianz Group companies are involved in legal, regulatory, and arbi-
tration proceedings in Germany and a number of foreign jurisdic-
tions, including the United States. Such proceedings arise in the
ordinary course of businesses, including, amongst others, their
activities as insurance, banking and asset management companies,
employers, investors and taxpayers. It is not feasible to predict or
determine the ultimate outcome of the pending or threatened pro-
ceedings. Management does not believe that the outcome of these
proceedings, including those discussed below, will have a material
adverse effect on the financial position and the results of operations
of the Allianz Group, after consideration of any applicable reserves.
On 24 May 2002, pursuant to a statutory squeeze-out procedure,
the general meeting of Dresdner Bank AG resolved to transfer shares
from its minority shareholders to Allianz as principal shareholder in
return for payment of a cash settlement amounting to € 51.50 per
share. Allianz established the amount of the cash settlement on the
basis of an expert opinion, and its adequacy was confirmed by a court
appointed auditor. Some of the former minority shareholders applied
for a court review of the appropriate amount of the cash settlement
in a mediation procedure (“Spruchverfahren”). In September 2013,
the district court (“Landgericht”) of Frankfurt dismissed the minority
shareholders’ claims in their entirety. This decision has been
appealed to the higher regional court (“Oberlandesgericht”) of Frank-
furt. In the event that a final decision were to determine a higher
amount as an appropriate cash settlement, this would affect all of the
approximately 16 mn shares that were transferred to Allianz.
218
Annual Report 2013
Allianz Group
D
Consolidated Financial Statements
127 Consolidated Balance Sheets
128 Consolidated Income Statements
129 Consolidated Statements of
Comprehensive Income
130 Consolidated Statements of
134 Notes to the Consolidated Financial
Changes in Equity
Statements
131 Consolidated Statements of
Cash Flows
The U.S. Department of Justice (DOJ) is conducting an investiga-
tion 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 sub-
mitted 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 inde-
pendent 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.
Other contingencies
In accordance with § 5 (10) of the Statutes of the Joint Fund for Secur-
ing Customer Deposits (“Einlagensiche rungsfonds”), Allianz SE has
undertaken to indemnify the Federal Association of German Banks
(“Bundesverband deutscher Banken e.V.”) for any losses it may incur
by reason of supporting measures taken in favor of Oldenburgische
Landes bank AG (OLb), Münster ländische Bank Thie & Co. KG and
Bankhaus W. Fortmann & Söhne KG.
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.
Allianz and HT1 Funding GmbH have signed a Contingent
Indemnity Agreement in July 2006, pursuant to which Allianz may, in
certain circumstances, be obliged to make payments to HT1 Funding
GmbH. HT1 Funding GmbH issued nominal € 1,000 mn Tier 1 Capital
Securities with an annual coupon of 6.352 % (as of 30 June 2017, the
coupon will be 12-month EURIbOR plus a margin of 2.0 % p.a.). The con-
tingent payment obligation of the Allianz Group was reduced in 2012
following a reduction of the nominal amount of the Tier 1 Capital
Securities from € 1,000 mn to € 416 mn. The securities have no sched-
uled maturity and the security holders have no right to call for their
redemption. The securities may be redeemed at the option of the
issuer on 30 June 2017, and thereafter. The expected impact in the
foreseeable future has been recognized in other provisions, however,
it is not possible for the Allianz Group to predict the ultimate potential
payment obligations at this point in time.
commitments
Loan commitments
The Allianz Group engages in various lending commitments to meet
the financing needs of its customers. The following table represents
the amounts at risk should customers draw fully on all facilities and
then default, excluding the effect of any collateral. Since the majority
of these commitments may expire without being drawn upon, the
amounts shown are not representative of actual liquidity require-
ments for such commitments.
loan commitments
€ mn
as of 31 December
Advances
Guarantee credits
Mortgage loans/Public-sector loans
Total
2013
429
104
335
868
2012
496
95
445
1,036
Leasing commitments
The Allianz Group occupies property in many locations under various
long-term operating leases and has entered into various operating
leases covering the long-term use of data processing equipment and
other office equipment.
Annual Report 2013
Allianz Group
219
As of 31 December 2013, the future minimum lease payments
under non-cancelable operating leases were as follows:
future minimum lease payments
€ mn
2014
2015
2016
2017
2018
Thereafter
Subtotal
Subleases
Total
2013
353
349
324
299
277
1,401
3,003
(60)
2,943
For the year ended 31 December 2013, rental expenses totaled € 350 mn
(2012: € 325 mn), net of sublease rental income received of € 11 mn.
Purchase obligations
The Allianz Group has commitments for mortgage loans and to buy
multi-tranche loans of € 2,810 mn (2012: € 2,906 mn) as well as to invest
in private equity funds and similar financial instruments totaling
€ 2,978 mn (2012: € 2,507 mn) as of 31 December 2013. As of 31 December
2013, commitments outstanding to invest in real estate used by third
parties or used by the Allianz Group for its own activities and for infra-
structure investments amount to € 860 mn (2012: € 962 mn).
In addition, as of 31 December 2013, the Allianz Group has other
commitments of € 477 mn (2012: € 241 mn) mainly referring to main-
tenance, real estate development, sponsoring and other purchase
obligations.
Other commitments
Other principal commitments of the Allianz Group include the fol-
lowing:
Pursuant to §§ 124 ff. of the German Insurance Supervision Act
(“Versicherungsaufsichtsgesetz” – VAG), a mandatory insurance
guarantee scheme (“Sicherungsfonds”) for life insurers is imple-
mented 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)”
– SichLVFinV). As of 31 December 2013, the future liabilities of Allianz
Lebens versicherungs-Aktiengesellschaft and its subsidiaries to the
insurance guarantee scheme amount to annual contributions of
€ 9.7 mn (2012: € 6.7 mn) and an obligation for special payments of
€ 138 mn (2012: € 124 mn).
220
Annual Report 2013
Allianz Group
In accordance with §§ 124 ff. of the German Insurance Super vision
Act (“Versicherungsaufsichtsgesetz” - VAG), Allianz Private Kranken-
versicherungs-AG is a member of the mandatory insurance guaran-
tee scheme (Sicherungsfonds) for German health insurers. In case
the guarantee scheme has to resume responsibility for insurance
contracts, it will collect special payments from its members to fulfill
its tasks. Until today, no contributions have been requested by the
scheme. As of 31 December 2013, the potential liabilities of Allianz
Private Krankenversicherungs-AG to the insurance guarantee scheme
amount to an obligation for special payments of € 48 mn (2012:
€ 45 mn).
In December 2002, Protektor Lebensversicherungs-Aktiengesell-
schaft (“Protektor”), a life insurance company whose role is to protect
policyholders of all German life insurers, was founded. Allianz
Lebens versicherungs-Aktiengesellschaft and some of its subsidiaries
are obligated to provide additional funds either to the mandatory
insurance guarantee scheme or to Protektor, in the event that the
funds provided to the mandatory insurance guarantee scheme are
not sufficient to handle an insolvency case. Such obligation amounts
to a maximum of 1 % of the sum of the net underwriting reserve with
deduction of payments already provided to the insurance guarantee
scheme. As of 31 December 2013, and under inclusion of the contribu-
tions to the mandatory insurance scheme mentioned above, the
aggregate out standing commitment of Allianz Lebensversicherungs-
Aktiengesellschaft and its subsidiaries to the insurance guarantee
scheme and to Protektor is € 1,252 mn (2012: € 1,123 mn).
According to the German Deposit Guarantee and Investor Com-
pensation Act (EAEG – “Einlagensicherungs- und Anlegerentschädi-
gungsgesetz”) all credit institutions, investment companies and
financial services institutions licensed to do business in Germany
must adhere to a statutory compensation scheme. Allianz Global
Investors Europe GmbH, PImCO Deutschland GmbH and risklab
GmbH are currently members of EdW (“Entschädigungseinrichtung
der Wertpapierhandelsunternehmen”, Berlin). The annual contribu-
tion is determined in consideration of each member’s scope of busi-
ness. In addition, EdW may levy special contributions from its mem-
bers, 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 Finanzdienst-
leistungsaufsicht” – BaFin) has determined that certain investor
claims will be covered under the compensation scheme and special
contributions have been levied. In this regard, special contributions
were notified by EdW to above-mentioned entities in 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
D
Consolidated Financial Statements
127 Consolidated Balance Sheets
128 Consolidated Income Statements
129 Consolidated Statements of
Comprehensive Income
130 Consolidated Statements of
134 Notes to the Consolidated Financial
Changes in Equity
Statements
131 Consolidated Statements of
Cash Flows
notifications, and for the estimated special contribution for 2014,
adequate provisions have been accrued.
guarantees
A summary of guarantees issued by the Allianz Group by maturity
and related collateral-held is given below:
guarantees
€ mn
2013
Up to 1 year
1 - 3 years
3 - 5 years
Over 5 years
Total
Collateral
2012
Up to 1 year
1 - 3 years
3 - 5 years
Over 5 years
Total
Collateral
Financial
guarantees
Market value
guarantees
Indemni-
fication
contracts
Performance
guarantees
411
18
14
12
455
72
387
16
14
164
581
130
78
450
–
680
1,208
–
271
614
60
652
1,597
–
–
–
–
91
91
–
1
–
1
107
109
–
21
19
2
127
169
36
24
19
2
173
218
36
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.
Financial guarantees
The majority of the Allianz Group’s financial guarantees are issued
to customers through the normal course of banking business in
return for fee and commission income, which is generally deter-
mined based on rates subject to the nominal amount of the guaran-
tees and inherent credit risks. Once a guarantee has been drawn
upon, any amount paid by the Allianz Group to third parties is treated
as a loan to the customer, and is, therefore, basically subject to the
credit risk of the customer or the collateral pledged, respectively.
Market value guarantees
Market value guarantees represent assurances given to investors in
certain mutual funds and related to specific asset management
agreements, under which initial investment values and/or minimum
performance of such investments are guaranteed at levels as defined
under the relevant agreements. The obligation to perform under a
market value guarantee is triggered when the market value of the
affected investments does not meet the guaranteed targets at pre-
defined dates.
The Allianz Group’s Asset Management segment, in the ordinary
course of business, issues market value guarantees in connection
with investment trust accounts and mutual funds it manages. The
levels of market value guarantees and maturity dates differ based on
the separate governing agreements of the respective investment
trust accounts and mutual funds. As of 31 December 2013, the maxi-
mum potential amount of future payments of the market value guar-
antees is € 680 mn (2012: € 652 mn), which represents the total value
guaranteed under the respective agreements including the obliga-
tion that would have been due had the investments matured on that
date. The fair value of the investment trust accounts and mutual
funds related to these guarantees as of 31 December 2013, is € 802 mn
(2012: € 734 mn).
The Allianz Group’s Banking operations in France, in the ordi-
nary course of business, issue market value and performance-at-
maturity guarantees in connection with mutual funds offered by the
Allianz Group’s Asset Management operations in France. The levels
of these guarantees, as well as the maturity dates, differ based on the
underlying agreements. In most cases, both a market value guarantee
and a performance-at-maturity guarantee is offered for the same
mutual fund. As of 31 December 2013, the maximum potential
amount of future payments of the market value and performance-at-
maturity guarantees is € 528 mn (2012: € 945 mn), which represents the
total value guaranteed under the respective agreements. The fair
value of the affected mutual funds where market value guarantees
have been issued as of 31 December 2013, is approximately € 589 mn
(2012: € 853 mn). These funds have a remaining term of maturity of up
to five years.
Indemnification contracts
Indemnification contracts are executed by the Allianz Group with
various counterparties under existing service, lease or acquisition
transactions. Such contracts may also be used to indemnify counter-
parties under various contingencies, such as changes in laws and
regulations or litigation claims.
In connection with the sale of various of the Allianz Group’s for-
mer private equity investments, subsidiaries of the Allianz Group
provided indemnities to the respective buyers in the event that certain
contractual warranties arise. The terms of the indemnity contracts
cover ordinary contractual warranties, environmental costs and any
potential tax liabilities the entity incurred while owned by the Allianz
Group.
Annual Report 2013
Allianz Group
221
Performance guarantees
Performance guarantees are given by the Allianz Group to ensure
third-party entitlements if certain performance obligations of the
guarantee recipient are not fulfilled.
creDit Derivatives
Credit derivatives consist of credit default swaps, which require pay-
ment in the event of default of debt obligations, as well as of total
return swaps, under which the performance of underlying assets is
guaranteed. The notional principal amounts and fair values of the
Allianz Group’s credit derivative positions as of 31 December 2012 are
provided in note 43.
assets pleDgeD anD collateral
The carrying amounts of the assets pledged as collateral are dis-
played in the following table:
assets pleDgeD as collateral
€ mn
as of 31 December
Collaterals without right to resell or repledge
Financial assets carried at fair value through
income
Investments
Loans and advances to banks and customers
Subtotal
Collaterals with right to resell or repledge
Investments
Subtotal
Total
2013
2012
3
4,034
2,941
6,978
2,112
2,112
9,090
–
1,452
2,811
4,263
2,460
2,460
6,723
As of 31 December 2013, the Allianz Group has received collateral,
consisting of fixed income and equity securities, with a fair value of
€ 2,170 mn (2012: € 931 mn), which the Allianz Group has the right to sell
or repledge. For the years ended 31 December 2013 and 2012, no pre-
viously received collateral was sold or repledged by the Allianz Group.
As of 31 December 2013, the Allianz Group received cash collat-
eral with a carrying amount of € 191 mn (2012: € 65 mn).
222
Annual Report 2013
Allianz Group
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 arrange-
ments, the future cost to the employer of a defined benefit plan is not
known with certainty in advance.
The Allianz Group provides competitive and cost effective retire-
ment and disability benefits using risk appropriate vehicles. The
plans may vary from country to country due to the different legal, fiscal
and economic environment.
Typically associated with defined benefit plans are biometric
risks like longevity, disability and death as well as economic risks like
interest rates, inflation and compensation increases. The Allianz
Group continued to mitigate the risk impact by reviewing the benefit
rules. New plans are primarily based on contributions and may
include in some cases guarantees like preservation of contributions
or minimum interest rate.
The Allianz Group established a Pension Task Force to foster
global governance. The heads of Group HR, Group Accounting and
Reporting, Group Treasury and Corporate Finance, Group Planning
and Controlling, Group Risk and AIm are members of the Pension Task
Force which meets quarterly. This body pre-aligns all pension-related
topics prior to relevant Group Committee meetings.
Pension plans in Germany, the U.K. and Switzerland are
described in more detail regarding key risks and regulatory environ-
ment, as each of them contributes more than 5 % to the Allianz
Group’s defined benefit obligation.
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 contribution-
based system using different vehicles to cover the base salary both
below and above the German social security ceiling. The Allianz Ver-
sorgungskasse 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 Ger-
man insurance regulation.
Additionally, for salary above the German social security ceiling,
the Allianz Group contributes to the Beitragsorientierter Pensions-
vertrag (bPV). On retirement the accumulated capital is converted to
a lifetime annuity. The Allianz Group decides each year whether and
to which extent a bPV budget is provided. Independently from this
decision an additional risk premium is paid to cover death and dis-
ability. The bPV was implemented as of 1 January 2005. Formerly exist-
ing plans were transferred to the bPV, taking the retained rights into
D
Consolidated Financial Statements
127 Consolidated Balance Sheets
128 Consolidated Income Statements
129 Consolidated Statements of
Comprehensive Income
130 Consolidated Statements of
134 Notes to the Consolidated Financial
Changes in Equity
Statements
131 Consolidated Statements of
Cash Flows
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.
There is also a partly funded defined benefit pension plan for
agents (VertreterVersorgungsWerk, VVW), which has been closed for
new entrants since 31 December 2011. A part of the pension plan
serves as a replacement for the compensatory claim of agents accord-
ing to German Commercial Code (§ 89b). The pension amount guar-
anteed is based on the individual agents’ insurance portfolio, which
is regularly reassessed although there is no legal obligation. VVW is
close to a final salary benefit and pension increases are broadly
linked to inflation.
For the AVK the annual minimum interest rate guaranteed is
1.75 % – 3.50 % depending on the date of joining the Allianz Group and
for the bPV it is 2.75 %. Pension increases are guaranteed at least with
1 % p.a. Depending on legal requirements some pension increases are
linked to inflation.
The employee has a choice between lump sum payments and
annuities only in the AVK, whereas the other vehicles provide annuities.
VVW entitled agents have the option to capitalize up to one third of
the pension amount as a lump sum payment.
The period in which a retirement pension can be drawn is usu-
ally between age 60 and age 67. Disability benefits are granted prior
to retirement in the event of an occurrence of a qualifying disability.
In the case of death, a pension may be paid to dependents. Surviv-
ing dependents normally receive 60 % (widow/widower) and 20 % (per
child) of the original employee’s pension, in total not to exceed 100 %.
Additionally, the Allianz Group offers a deferred compensation
program, Pensionszusage durch Entgeltumwandlung (PZE), for
active employees. Within some boundaries they convert at their dis-
cretion parts of their gross income and receive in exchange a pension
commitment of equal value. PZEs qualify almost as defined contribu-
tion plans with minor risk exposure.
United Kingdom
The U.K. accounts for 8.3 % of the Allianz Group’s defined benefit obli-
gation and 11.9 % of the Allianz Group’s plan assets.
The U.K. operates a funded pension scheme, the Allianz Retire-
ment and Death Benefits Fund. The trustee board is required by law
to act in the best interests of members and is responsible for setting
certain policies (e.g. investment and contribution policies) of the
principal U.K. scheme. Contributions are made by both the employer
and employees.
The fund has a defined benefit pension section and a defined
contribution section. The defined contribution section was estab-
lished on 1 April 2001, from which date the defined benefit section
was closed to new entrants. The defined benefit section provides final
salary benefits. Pension increases are broadly linked to Retail Prices
Index (RPI) inflation.
From 1 July 2012, benefit changes were made to the defined ben-
efit section. Following these benefit changes, increases to pension-
able pay are capped at RPI and, in 2015, the defined benefit section will
close to future accrual and all members will switch to the defined
contribution section.
Switzerland
Switzerland accounts for 5.1 % of the Allianz Group’s defined benefit
obligation and 9.1 % of the Allianz Group’s plan assets.
There are obligatory corporate pension plans in Switzerland, eli-
gible for all employees. The plans are wholly funded through legally
separate trustee administered pension funds with the trustee board
being responsible for the investment of the assets and the risk man-
agement. The plans are contribution-based and cover the risks of
longevity, disability and death. Employees contribute only a small
amount whereas the employer contributes for the complete risk cov-
erage and a big part to the savings account. The interest rate is decid-
ed annually by the board of the pension funds. For the mandatory
part the minimum interest rate is regulated by law and reviewed
annually (1.50 % in 2013). At retirement beneficiaries can choose
between a lump sum payment, an annuity or a combination of both
where the part which is not granted as a lump sum is converted to a
fixed annuity according to the rules of the pension fund, taking legal
requirements into account.
If employees contract out of the Allianz Suisse pension plan,
they have to take their vested pension capital (“Freizügigkeitsleis-
tung”) to the next employer, which implies a small liquidity risk.
DefineD benefit plans
IAS 19 revised in 2011 has to be applied retrospectively.1 Therefore all
balance sheet and income statement items had to be restated as of
1 January 2013 and 1 January 2012. After the retrospective application
the adapted amounts recognized in the Allianz Group’s consolidated
balance sheets for defined benefit plans are as follows:
reconciliation of DefineD benefit plans on the balance sheet
€ mn
Net amount recognized as of 1 January
Changes in the consolidated subsidiaries of the
Allianz Group
Foreign currency translation adjustments
Recognized expenses
Payments
oci recognition (before deferred taxes)
Net amount recognized as of 31 December
thereof assets
thereof liabilities
2013
8,010
6
(13)
661
(642)
(522)
7,500
(94)
7,594
2012
5,493
26
13
497
(649)
2,630
8,010
(59)
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.
Annual Report 2013
Allianz Group
223
The following table sets forth the changes in the defined benefit obli-
gation, in the fair value of plan assets and in the effect of asset ceiling
for the various Allianz Group defined benefit plans:
reconciliation of DefineD benefit obligation,plan assets anD effect of asset
ceiling
€ mn
change in DefineD benefit obligation
Defined benefit obligation as of 1 January
19,161
15,563
2013
2012
Current service costs
Interest expenses
Plan participants’ contributions
Actuarial (gains)/losses due to
Changes in demographic assumptions
Changes in financial assumptions
Experience adjustments
Past service costs
Foreign currency translation adjustments
Benefits paid
Changes in the consolidated subsidiaries of the
Allianz Group
Divestitures
Settlement gain/(loss)
Settlement payments
414
619
106
40
(554)
35
(7)
(82)
(629)
9
(1)
-
(1)
Defined benefit obligation as of 31 December 1
19,110
321
697
97
44
3,084
(27)
(41)
48
(635)
30
-
1
(21)
19,161
As of 31 December 2013, post-retirement health benefits included in
the defined benefit obligation and in the net amount recognized
amounted to € 13 mn (2012: € 15 mn) and € 13 mn (2012: € 15 mn),
respectively.
During the year ended 31 December 2013, the defined benefit
costs related to post-retirement health benefits were not significant
(2012: € 3 mn).
Assumptions
The assumptions for the actuarial computation of the defined benefit
obligation and the recognized expense depend on the circumstances
in the particular country where the plan has been established.
The calculations are based on current actuarially calculated
mortality tables, projected turnover depending on age and length of
service, as well as internal Allianz Group retirement projections.
Although this represents the best estimate as of today, a further
increase in life expectancy could be reasonable. The weighted aver-
age life expectancy of a currently 65-year-old plan participant is
about 88.9 years for women and 86.4 years for men. An increase in life
expectancy by 1 year would lead to an increase of the defined benefit
obligation by € 455 mn.
The weighted average value of the assumptions for the Allianz
Group’s defined benefit plans used to determine the defined benefit
obligation and the recognized expense are as follows:
change in fair value of plan assets
Fair value of plan assets as of 1 January
11,206
10,136
assumptions for DefineD benefit plans
Interest income on plan assets
Return on plan assets greater/ (less) than interest
income on plan assets
Employer contributions
Plan participants’ contributions
Foreign currency translation adjustments
Benefits paid 2
Changes in the consolidated subsidiaries of the
Allianz Group
Divestitures
Assets distributed on settlement
366
46
364
106
(70)
(351)
3
(1)
(1)
Fair value of plan assets as of 31 December
11,668
change in effect of asset ceiling
Effect of asset ceiling as of 1 January
Interest expenses on effect of asset ceiling
Change in effect of asset ceiling in excess of
interest
Foreign currency translation adjustments
Effect of asset ceiling as of 31 December
55
1
3
(1)
58
483
458
372
97
35
(356)
4
–
(23)
11,206
66
2
(13)
–
55
1
2
As of 31 December 2013, € 6,673 mn (2012: € 6,841 mn) of the defined benefit obligation is wholly unfunded,
while € 12,437mn (2012: € 12,320 mn) is wholly or partly funded.
In addition, the Allianz Group paid € 283 mn (2012: € 280 mn) directly to plan participants.
%
as of 31 December
Discount rate
Rate of compensation increase
Rate of pension increase
Rate of medical cost trend
2013
3.5
2.2
2.0
3.7
2012
3.3
2.0
1.7
3.8
The recognized expense is recorded based on the assumptions of the
corresponding previous year.
The discount rate assumption is the most significant risk for the
defined benefit obligation. It reflects the market yields at the balance
sheet date of high-quality fixed income investments corresponding
to the currency and duration of the liabilities. In the Euro-zone, the
decision for the discount rate is based on AA-rated financial and cor-
porate bonds, provided by Allianz Investment Data Services (IDS), and
a standardized cash flow profile for a mixed population. The Internal
Controls Over Financial Reporting (ICOFR) certified Allianz Global
Risk Parameters (GRIPS) methodology is an internal development of
the Nelson-Siegel model, recommended by German auditors, and
consistently used by Group Risk, Group Audit, AIm and PImCO.
The range for the sensitivity calculations was derived by analyzing
the average volatility over the past 5 years.
224
Annual Report 2013
Allianz Group
D
Consolidated Financial Statements
127 Consolidated Balance Sheets
128 Consolidated Income Statements
129 Consolidated Statements of
Comprehensive Income
130 Consolidated Statements of
134 Notes to the Consolidated Financial
Changes in Equity
Statements
131 Consolidated Statements of
Cash Flows
An increase (a decrease) in the discount rate by 50 bPS would
lead to a decrease of € 1.4 bn (an increase of € 1.6 bn) in the defined
benefit obligation.
An increase of pre-retirement benefit assumptions (e.g. salary
increase) of 25 bPS would have an effect on the defined benefit obliga-
tion by € 64 mn. However, the increase of post-retirement assump-
tions (e.g. inflation linked increases of pension payments) of 25 bPS
would affect the defined benefit obligation by € 426 mn.
A change in the medical cost trend rate by one percentage point
would have an effect of € 1 mn on the defined benefit obligation and
no material effect on the defined benefit costs.
Plan Assets /Asset Liability Management (alm)
Based on the estimated future cash flows of € 714 mn for 2014, € 685 mn
for 2015, € 703 mn for 2016, € 729 mn for 2017, € 745 mn for 2018 and
€ 4,104 mn for 2019 – 2023, the weighted duration of the defined benefit
obligation is 17.6 years. The Allianz Group uses, based on the liability
profiles of the defined benefit obligation, stochastic asset liability
models to optimize the asset allocation from a risk-return perspective.
Due to a well diversified portfolio of more than 140,000 plan par-
ticipants, there is no reasonable uncertainty of future cash flows
expected which could have an impact on the liquidity of the Allianz
Group.
The target allocation for the plan assets compares to the current
asset allocation as follows:
asset allocation of plan assets
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.
DefineD contribution plans
Defined contribution plans are funded through independent pension
funds or similar organizations. Contributions fixed in advance (e.g.
based on salary) are paid to these institutions and the beneficiary’s
right to benefits exists against the pension fund. The employer has
no obligation beyond payment of the contributions.
During the year ended 31 December 2013, the Allianz Group re-
cognized expenses for defined contribution plans of € 213 mn (2012:
€ 190 mn). Additionally, the Allianz Group paid contributions for state
pension schemes of € 335 mn (2012: € 328 mn).
48 – Share-based compensation plans
group eQuity incentive plans
The Group Equity Incentive Plans (GEI) of the Allianz Group help
focus senior management, in particular the Board of Management,
on the long-term increase the value of the Allianz Group. Until 2010,
the GEI included grants of stock appreciation rights (SAR) and restricted
stock units (RSU). From the 2011 grant onwards, the Allianz Equity
Incentive Plan (AEI) replaces the GEI plans. With the AEI Plan, only
restricted stock units (RSU) are granted to the plan participants.
as of 31 December
Equity securities
Quoted
Non-quoted
Debt securities
Quoted
Non-quoted
Real estate
Annuity contracts
Other
Total
Target
allocation
in %
Real
allocation
in %
13.8
13.7
Real
allocation
2013
in € mn
Real
allocation
2012
in € mn
58.5
52.6
5.7
19.9
2.1
4.8
17.7
11.2
1,594
–
4,212
1,927
561
2,071
1,303
1,363
–
4,349
1,915
453
1,893
1,233
100.0
100.0
11,668
11,206
Stock appreciation rights
The SAR granted to a plan participant obligate the Allianz Group to
pay in cash the excess of the market price of an Allianz SE share over
the reference price on the exercise date for each right granted. The
excess is capped at 150 % of the reference price. The reference price
represents the average of the closing prices of an Allianz SE share for
the ten trading days following the Financial Press Conference of
Allianz SE in the year of issue. SAR which were granted until 2008 vest
after two years and expire after seven years. From the 2009 grant
onwards, the SAR vest after four years and also expire after seven
years. Upon vesting, the SAR may be exercised by the plan participant
if the following market conditions are attained:
The bulk of the plan assets are held by the Allianz Versorgungskasse
VVaG, Munich, which is not part 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.
In addition to the plan assets of € 11.7 bn, the Allianz Group has
dedicated assets at Group level amounting to € 2 bn as of 31 December
2013 which are likewise managed according to Allianz ALm standards.
− during their contractual term, the market price of the Allianz SE
share has outperformed the Dow Jones EURO STOXX Price Index
at least once for a period of five consecutive trading days; and
− the Allianz SE market price is in excess of the reference price by
at least 20 % on the exercise date.
Annual Report 2013
Allianz Group
225
In addition, upon the death of a plan participant, a change of control
or notice for operational reason, the SAR vest immediately and will be
exercised by the company provided the above market conditions
have been attained.
Upon the expiration date, any unexercised SAR will be exercised
automatically if the above market conditions have been attained. The
SAR are forfeited if the plan participant ceases to be employed by the
Allianz Group or if the exercise conditions are not attained by the
expiration date.
The fair value of the SAR at grant date is measured using a Cox-
Ross-Rubinstein binomial tree option pricing model. Volatility was
derived from observed historical market prices. In the absence of
historical information regarding employee stock appreciation exer-
cise patterns (especially all plans issued in 2007 and 2008 are signifi-
cantly “out of the money”), the expected life has been estimated to
equal the term to maturity of the SAR.
allianz eQuity incentive plan
Since the 2011 grant year, the Allianz Equity Incentive Plan (AEI) has
replaced the GEI plans. The AEI is granted in the form of restricted
stock units (RSU) and is part of a new variable compensation compo-
nent for the plan beneficiaries.
The RSU granted to a plan participant obligate the Allianz Group
to pay in cash the average closing price of an Allianz SE share on the
last day of the vesting period and the prior nine trading days or to
convert one RSU into one Allianz SE share. The payout is capped at a
200 % share price growth above the grant price.
The RSU are subject to a vesting period of four years and will be
released on the last day of the vesting period. The Allianz Group can
choose the settlement method for each unit.
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 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).
The RSU are virtual stocks without dividend payments and a
capped payout. The fair value is calculated by subtracting the net
present value of expected future dividend payments until maturity
and the fair value of the cap from the prevailing share price as of the
valuation date. The cap is valued as a European short call option,
using prevailing market data as of the valuation date.
The following table provides the assumptions used in calculating
As of 31 December 2013, the Allianz Group recorded a provision
the fair value of the RSU at grant date:
of € 86 mn (2012: € 83 mn) in other liabilities for the unexercised SAR.
assumptions of aei plans
Share price
Average dividend yield
Average interest rate
Expected volatility
20141
2013
124.55
110.40
4.4
0.5
20.6
4.6
0.5
20.9
€
%
%
%
2012
88.29
5.3
1.2
22.0
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 compensa-
tion expense related to the AEI plans of € 132 mn (2012: € 79 mn).
As of 31 December 2013, the Allianz Group recorded a provision
of € 248 mn (2012: € 117 mn) for these RSU in other liabilities.
Restricted stock units
The RSU granted to a plan participant obligate the Allianz Group to
pay in cash the average market price of an Allianz SE share in the ten
trading days preceding the vesting date or to issue one Allianz SE
share, or other equivalent equity instrument, for each unit granted.
The RSU vest after five years. The Allianz Group will exercise the RSU
on the first stock exchange day after their vesting date. On the exer-
cise date, the Allianz Group can choose the settlement method for
each unit.
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.
The RSU are virtual stocks without dividend payments. The fair
value is calculated by subtracting the net present value of expected
future dividend payments until maturity of the RSU from the prevailing
share price as of the valuation date.
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 vesting
period. During the year ended 31 December 2013, the Allianz Group
recognized a compensation expense related to the non-vested RSU of
€ 58 mn (2012: € 80 mn).
As of 31 December 2013, the Allianz Group recorded a provision
of € 141 mn (2012: € 141 mn) in other liabilities for the non-vested RSU.
226
Annual Report 2013
Allianz Group
D
Consolidated Financial Statements
127 Consolidated Balance Sheets
128 Consolidated Income Statements
129 Consolidated Statements of
Comprehensive Income
130 Consolidated Statements of
134 Notes to the Consolidated Financial
Changes in Equity
Statements
131 Consolidated Statements of
Cash Flows
share-baseD compensation plans
of subsiDiaries of the allianz group
pimco llc Class B Unit Purchase Plan
When acquiring Allianz Global Investors of America L.P. ( AllianzGI
L.P.) during the year ended 31 December 2000, Allianz SE caused Pacific
Investment Management Company LLC (PImCO LLC), a subsidiary of
AllianzGI L.P., to enter into a Class B Purchase Plan (the “Class B Plan”)
for the benefit of members of the management of PImCO LLC. The plan
participants of the Class B Plan have rights to a 15 % priority claim on
the adjusted operating profits of PImCO LLC.
The Class B equity units issued under the Class B Plan vest over
3 to 5 years and are subject to repurchase by AllianzGI L.P. upon the
death, disability or termination of the participant prior to vesting.
Starting 1 January 2005, AllianzGI L.P. has the right to repurchase, and
the participants have the right to cause AllianzGI L.P. to repurchase,
a portion of the vested Class B equity units each year. The call or put
right is exercisable for the first time 6 months after the initial vesting
of each grant. On the repurchase date, the repurchase price will be
based upon the determined value of the Class B equity units being
repurchased. As the Class B equity units are puttable by the plan par-
ticipants, the Class B Plan is accounted for as a cash settled plan.
Therefore, the Allianz Group accrues the fair value of the Class B
equity units as a compensation expense over the vesting period.
Upon vesting, any changes in the fair value of the Class B equity units
are recognized as 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.
The total recognized compensation expense for Class B equity
units that are outstanding is recorded as a liability in other liabilities.
As of 31 December 2013, the Allianz Group recorded a liability for the
Class B equity units of € 196 mn (2012: € 206 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 trans-
action, 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 quar-
terly dividend payments.
A maximum of 250,000 M-units are authorized for issuance
under the M-unit Plan.
The fair value of the underlying M-options was measured using
the Black-Scholes option pricing model. Volatility was derived in part
by considering the average historical and implied volatility of a
selected group of peers. The expected life of one granted option was
calculated based upon treating the three vesting tranches (one third
in years 3, 4, and 5) as three separate awards.
The following table provides the assumptions used in calculating
the fair value of the M-options at grant date:
assumptions of class m-unit plan
Weighted average fair value of options granted
Assumptions:
Expected term (years)
Expected volatility
Expected dividend yield
Risk free rate of return
2013
2012
1,047.87
1,600.50
3.84
31.6
13.2
0.7
3.84
43.6
13.0
0.7
€
%
%
%
The number and weighted average exercise price of the M-options
outstanding and exercisable are as follows:
reconciliation of outstanDing m-options
2013
2012
Number of
options
Weighted
average
exercise
price
€
Number of
options
Weighted
average
exercise
price
€
Outstanding as of 1 January
204,091
12,597.93
156,285
11,266.93
Granted
Exercised
Forfeited
Outstanding as of
31 December
Exercisable as of
31 December
50,600
16,959.07
71,916
14,299.31
(30,412)
8,213.51
(19,819)
6,861.28
(10,170)
13,069.76
(4,291)
12,828.34
214,109
13,709.98
204,091
12,597.93
–
–
–
–
The aggregate intrinsic value of share options outstanding was
€ 232 mn and € 175 mn for the years ended 31 December 2013 and 2012,
respectively.
Annual Report 2013
Allianz Group
227
As of 31 December 2013, the M-options outstanding have an exer-
cise price of between € 6,168.58 and € 17,158.10 and a weighted average
remaining contractual life of 2.93 years.
The shares settled by delivery of PImCO LLC shares are accounted
for as equity-settled plans by PImCO LLC. Therefore, PImCO LLC meas-
ures the total compensation expense to be recognized for the equity-
settled shares based upon their fair value as of the grant date. The
total compensation expense is recognized over the vesting period.
During the year ended 31 December 2013, the Allianz Group
recorded a compensation expense of € 74 mn (2012: € 78 mn) related to
these share options.
Allianz France share option plan
Allianz France, formerly AGF, awarded options on its former Holding
(AGF S.A.) quoted shares to eligible AGF Group executives, managers
of subsidiaries, as well as to some of the employees, whose perfor-
mance justified grants.
During the year ended 31 December 2007, Allianz acquired all of
the remaining AGF shares from non-controlling interests in the con-
text of the Tender Offer and Squeeze-out. Under the terms of an agree-
ment (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 pro-
posed 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.
Due to the change in settlement arising from the Liquidity
Agreement, the Allianz Group accounts for the AGF share option
plans as cash settled plans, as all AGF employees will receive cash for
their AGF shares. Therefore, the Allianz Group recognizes any change
in the fair value of the unexercised plans as a compensation expense.
During the year ended 31 December 2013, the Allianz Group rec-
ognized 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).
49 – Restructuring plans
As of 31 December 2013, the Allianz Group has provisions for restruc-
turing resulting from a number of restructuring programs in various
segments. These provisions for restructuring primarily include per-
sonnel 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.
The following table shows the changes in the provisions for
restructuring plans.
provisions for restructuring plans
€ mn
As of 1 January
New provisions
Additions to existing provisions
Release of provisions recognized in prior years
Utilization of provisions via payments
Utilization of provisions via transfers
Foreign currency translation adjustments
As of 31 December
2013
304
166
19
(53)
(104)
(116)
(2)
214
2012
280
242
29
(55)
(100)
(90)
(2)
304
The development of the restructuring provisions reflects the imple-
mentation status of the restructuring initiatives. Based on the specific
IFRS guidance, restructuring provisions are recognized prior to when
they qualify to be recognized under the guidance for other types of
provisions. In order to reflect the timely implementation of the various
restructuring initiatives, restructuring provisions, as far as they are
already “locked in”, are transferred to the provision type, which
would have been used if a restructuring initiative were not in place.
This applies for each single contract. For personnel costs, at the time
228
Annual Report 2013
Allianz Group
D
Consolidated Financial Statements
127 Consolidated Balance Sheets
128 Consolidated Income Statements
129 Consolidated Statements of
Comprehensive Income
130 Consolidated Statements of
134 Notes to the Consolidated Financial
Changes in Equity
Statements
131 Consolidated Statements of
Cash Flows
an employee has contractually agreed to leave the Allianz Group by
signing either an early retirement, a partial retirement (Altersteilzeit,
which is a specific type of an early retirement program in Germany), or
a termination arrangement, the respective part of the restructuring
provision is transferred to employee related provisions. In addition,
provisions for vacant office spaces that result from restructuring
initiatives are transferred to “other” provisions after the offices have
been completely vacated.
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 provi-
sions of € 31 mn were recorded.
allianz life korea’s restructuring plan
In December 2013, Allianz Life Korea initiated a restructuring pro-
gram to improve cost competitiveness and financial soundness. An
organizational restructuring and an early retirement plan will be
executed. In addition, various other cost reduction measures will be
implemented to achieve savings of general expenses. The program
will result in a reduction of headcount by about 250 employees.
During the year ended 31 December 2013, restructuring charges
of € 32 mn were recorded. As of 31 December 2013, restructuring provi-
sions of € 31 mn were recorded.
allianz italy’s restructuring plan
In December 2013, Allianz Italy announced a restructuring plan,
which will be completed within 2014. Allianz Italy aims to adapt its
business model and significantly streamline its processes. A unified
platform for all agencies including a digital agency will be imple-
mented. The program will result in a reduction of complexity and
higher automation of processes, in particular for underwriting activ-
ities. By implementing voluntary early retirement plans, headcount
will be reduced by about 100 employees.
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 provi-
sions of € 20 mn were recorded for this program.
allianz germany group’s restructuring plan
The Allianz Germany Group launched the restructuring program
“Zukunftsprogramm Sachversicherung” in order to generate further
growth impulses. The program is expected to be completed with the
objective of cost savings, improved claims management and higher
growth of revenue, thereby increasing the competitiveness and prof-
itability of Allianz Germany’s future property and casualty business.
In 2012, the project “Optimierung Stäbe” was implemented as
part of the restructuring program “Zukunftsprogramm Sachver-
sicherung” in order to reduce personnel and operating expenses by
increasing efficiency in the Allianz Germany Group’s head office.
From the original objective of reducing approximately 380 FTE by 2014,
approximately 120 FTE remain as of 31 December 2013.
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 Decem-
ber 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.
allianz manageD operations & services’s
restructuring plan (amos)
In the fourth quarter of 2012, Allianz Managed Operations & Services
(AmOS) launched a restructuring program, mainly in Germany,
regarding the global Allianz data center consolidation. In July 2013,
AmOS announced that a higher number of the affected employees in
Germany than originally expected will be assumed by a service pro-
vider, which led to a reduction of the original restructuring provisions
of € 34 mn.
effect of the reversal of Discounting
For the year ended 31 December 2013, the effect of the reversal of dis-
counting arising from the passage of time was € 4 mn (2012: € 9 mn).
Annual Report 2013
Allianz Group
229
50 – Earnings per share
Basic earnings per share
Basic earnings per share are calculated by dividing net income attrib
utable to shareholders by the weighted average number of common
shares outstanding for the period and increased by 14.4 % in 2013
compared to 2012.
Basic earnings per share
€ mn
Net income attributable to shareholders used
to calculate basic earnings per share
2013
2012
America
Total
5,996
5,231
51 – Other information
numBer of employees
numBer of employees
as of 31 December
Germany
Rest of Europe
Asia Pacific & Africa
2013
40,537
71,927
20,157
15,006
2012
40,882
70,540
17,936
14,736
147,627
144,094
Weighted average number of common shares
outstanding
453,297,832
452,666,296
Basic earnings per share (€)
13.23
11.56
The average total number of employees for the year ended 31 Decem
ber 2013 was 146,257.
personnel expenses
personnel expenses
€ mn
Salaries and wages
Social security contributions and employee
assistance
Expenses for pensions and other post-retirement
benefits
Total
2013
9,105
1,304
1,107
11,516
2012
8,875
1,214
1,052
11,141
issuance of the Declaration of compliance
with the german corporate governance coDe
accorDing to § 161 aktg
On 12 December 2013, the Board of Management and the Supervisory
Board of Allianz SE issued the Declaration of Compliance according
to § 161 AktG, which was made permanently available to the share
holders on the company’s website.
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.
DiluteD earnings per share
Diluted earnings per share are calculated by dividing net income
attributable to shareholders by the weighted average number of com
mon shares outstanding for the period, both adjusted for the effects
of potentially dilutive common shares. These effects arise from vari
ous sharebased compensation plans of the Allianz Group.
DiluteD earnings per share
€ mn
Net income attributable to shareholders
Effect of potentially dilutive common shares
Net income used to calculate diluted earnings
per share
Weighted average number of common shares
outstanding
Potentially dilutive common shares resulting from
assumed conversion of:
2013
5,996
(76)
5,920
2012
5,231
(33)
5,198
453,297,832
452,666,296
Share-based compensation plans
189,395
104,344
Weighted average number of common shares
outstanding after assumed conversion
453,487,227
452,770,640
Diluted earnings per share (€)
13.05
11.48
For the twelve months ended 31 December 2013, the weighted average
number of common shares excludes 2,753,127 (2012: 2,742,038) trea
sury shares.
230
Annual Report 2013
Allianz Group
D
Consolidated Financial Statements
127 Consolidated Balance Sheets
128 Consolidated Income Statements
129 Consolidated Statements of
Comprehensive Income
130 Consolidated Statements of
134 Notes to the Consolidated Financial
Changes in Equity
Statements
131 Consolidated Statements of
Cash Flows
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
Audit fees
Audit-related fees
Tax fees
All other fees
Total
kpmg worldwide
thereof: kpmg ag
and affiliated entities 1
2013
36.3
8.3
4.8
8.1
57.5
2012
36.8
7.9
2.3
2.2
49.2
2013
16.0
6.7
4.4
7.3
34.4
2012
16.7
6.6
1.7
1.2
26.2
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.
Audit fees
KPMG billed the Allianz Group an aggregate of € 36.3 Mn (2012:
€ 36.8 Mn) in connection with professional services rendered for the
audit of the Allianz Group’s consolidated financial statements, statu
tory audits of the financial statements of Allianz SE and its subsidiar
ies and services normally provided by KPMG in connection with statu
tory and regulatory filings or engagements. These services consisted
mainly of periodic review engagements and the annual audit.
Audit-related fees
KPMG charged the Allianz Group an aggregate of € 8.3 Mn (2012:
€ 7.9 Mn) for assurance and related services that are reasonably
re lated to the performance of the audit or review of the financial
statements and are not reported within audit fees. These services
consisted primarily of advisory and consulting services related to
accounting and financial reporting standards and financial due dili
gence services.
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.
All services provided by KPMG to Allianz Group companies must be
approved by the Audit Committee of the Allianz SE Supervisory Board.
Services other than audit services must be preapproved by the Audit
Committee. The Audit Committee preapproval process is based on
the use of a “Positive List” of activities decided by the Audit Committee
and, in addition, a “Guiding Principles and User Test” is applied.
Group Compliance and KPMG report to the Audit Committee periodi
cally with respect to services performed.
KPMG is the main auditing firm for the Allianz Group and
assigned in more than 75 % of all auditrelated tasks. Auditing firms
other than KPMG billed the Allianz Group an aggregate of € 15.0 Mn
(2012: € 14.6 Mn).
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).
The total remuneration for all Supervisory Board members,
including attendance fees, amounted to € 2.0 Mn (2012: € 2.1 Mn).
Board of Management and Supervisory Board compensation by
individual is included in the Remuneration Report. The information
provided there is considered part of these consolidated financial
statements.
1
2
3
For joining or leaving members of the Allianz SE Board only the pro-rated MTB relating to their service as
Board members is disclosed.
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.
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.
Annual Report 2013
Allianz Group
231
52 – Subsequent events
allianz issueD a chf 500 mn
unDateD suBorDi nateD BonD
In January 2014, Allianz SE issued a subordinated bond in the amount
of CHF 500 Mn with no scheduled maturity, but with ordinary call
rights of Allianz beginning in July 2019. The coupon of 3.25 % p.a. is
fixed until July 2019.
Munich, 24 February 2014
Allianz SE
The Board of Management
232
Annual Report 2013
Allianz Group
D
Consolidated Financial Statements
127 Consolidated Balance Sheets
128 Consolidated Income Statements
129 Consolidated Statements of
Comprehensive Income
130 Consolidated Statements of
134 Notes to the Consolidated Financial
Changes in Equity
Statements
131 Consolidated Statements of
Cash Flows
List of participations of the Allianz Group as of 31 December 2013
according to § 313 (2) HGB
%
owned 1
%
owned 1
%
owned 1
Germany
Consolidated affiliates
ACP GmbH & Co. Beteiligungen KG, Munich
ACP GmbH & Co. Beteiligungen KG II, Munich
ACP Vermögensverwaltung GmbH & Co. KG Nr. 4,
Munich
ACP Vermögensverwaltung GmbH & Co. KG Nr. 4a,
Munich
ACP Vermögensverwaltung GmbH & Co. KG Nr. 4c,
Munich
ACP Vermögensverwaltung GmbH & Co. KG Nr. 4d,
Munich
ACP Vermögensverwaltung GmbH Nr. 4 d. 1, Munich
ADEUS Aktienregister-Service-GmbH, Frankfurt am
Main
Alida Grundstücksgesellschaft mbH & Co. KG,
Hamburg
Allianz AADB Fonds, Frankfurt am Main
Allianz ABS Fonds, Frankfurt am Main
Allianz AKR Fonds, Frankfurt am Main
Allianz ALD Fonds, Frankfurt am Main
Allianz ALIK Fonds, Frankfurt am Main
Allianz APAV Fonds, Frankfurt am Main
Allianz APKR Fonds, Frankfurt am Main
Allianz Asset Management AG, Munich
Allianz Automotive Services GmbH, Unterföhring
Allianz AVM-B Fonds, Frankfurt am Main
Allianz AZL Vermögensverwaltung GmbH & Co. KG,
Munich
Allianz Beratungs- und Vertriebs-AG, Munich
Allianz Capital Partners GmbH, Munich
Allianz Capital Partners Verwaltungs GmbH, Munich
Allianz Climate Solutions GmbH, Munich
Allianz Deep Value Europe, Frankfurt am Main
Allianz Deutschland AG, Munich
Allianz Digital Accelerator GmbH, Munich
Allianz DLVR Fonds, Frankfurt am Main
Allianz EEE Fonds, Frankfurt am Main
Allianz FAD Fonds, Frankfurt am Main
Allianz Finanzbeteiligungs GmbH, Munich
Allianz Global Assistance Service Deutschland GmbH,
Munich
Allianz Global Corporate & Specialty SE, Munich
Allianz Global Investors Europe GmbH, Frankfurt
am Main
Allianz Global Investors GmbH, Munich
Allianz GLR Fonds, Frankfurt am Main
Allianz GLRS Fonds, Frankfurt am Main
Allianz GLU Fonds, Frankfurt am Main
Allianz GRGB Fonds, Frankfurt am Main
Allianz Handwerker Services GmbH, Aschheim
Allianz Investment Management SE, Munich
Allianz LAD Fonds, Frankfurt am Main
Allianz Leben Private Equity Fonds 1998 GmbH,
Munich
Allianz Leben Private Equity Fonds 2001 GmbH,
Munich
Allianz Leben Private Equity Fonds 2008 GmbH,
Munich
Allianz Leben Private Equity Fonds Plus GmbH,
Munich
Allianz LEBENCO Fonds, Frankfurt am Main
Allianz Lebensversicherungs-Aktiengesellschaft,
Stuttgart
Allianz LFE Fonds, Frankfurt am Main
Allianz Managed Operations & Services SE, Munich
Allianz of Asia-Pacific and Africa GmbH, Munich
Allianz Pension Partners GmbH, Munich
Allianz Pensionsfonds Aktiengesellschaft, Stuttgart
Allianz Pensionskasse Aktiengesellschaft, Stuttgart
Annual Report 2013
Allianz Group
0.0 2
0.0 2
100.0
100.0
100.0
100.0
99.3
79.6
94.8
100.0 4
100.0 4
100.0 4
100.0 4
100.0 4
100.0 4
100.0 4
100.0
100.0
100.0 4
100.0
100.0
100.0 5
100.0
100.0
55.8 3
100.0
100.0
100.0 4
100.0 4
100.0 4
100.0
100.0
100.0
100.0
100.0
100.0 4
100.0 4
100.0 4
100.0 4
95.0
100.0 5
100.0 4
100.0
100.0
100.0
100.0
100.0 4
100.0
100.0 4
100.0
100.0
100.0
100.0
100.0
Allianz Private Equity GmbH, Munich
Allianz Private Equity Partners Verwaltungs GmbH,
Munich
Allianz Private Krankenversicherungs-Aktiengesell-
schaft, Munich
Allianz ProzessFinanz GmbH, Munich
Allianz PV 1 Fonds, Frankfurt am Main
Allianz PV WS Fonds, Frankfurt am Main
Allianz PV-RD Fonds, Frankfurt am Main
Allianz Re Asia, Frankfurt am Main
Allianz Real Estate Germany GmbH, Stuttgart
Allianz Real Estate GmbH, Munich
Allianz Rechtsschutz-Service GmbH, Munich
Allianz Renewable Energy Management GmbH,
Sehestedt
Allianz Renewable Energy Subholding GmbH & Co.
KG, Sehestedt
Allianz RFG Fonds, Frankfurt am Main
Allianz Risk Consulting GmbH, Munich
Allianz SDR Fonds, Frankfurt am Main
Allianz Service Center GmbH, Munich
Allianz SOA Fonds, Frankfurt am Main
Allianz Strategiefonds Balance, Frankfurt am Main
Allianz Strategiefonds Stabilität, Frankfurt am Main
Allianz Strategiefonds Wachstum, Frankfurt am Main
Allianz Strategiefonds Wachstum Plus, Frankfurt
am Main
Allianz Taunusanlage GbR, Stuttgart
Allianz Treuhand GmbH, Stuttgart
Allianz UGD 1 Fonds, Frankfurt am Main
Allianz VAD Fonds, Frankfurt am Main
Allianz VAE Fonds, Frankfurt am Main
Allianz Venture Partners Beteiligungs GmbH, Munich
Allianz Versicherungs-Aktiengesellschaft, Munich
Allianz VGI 1 Fonds, Frankfurt am Main
Allianz VGL Fonds, Frankfurt am Main
Allianz VKA Fonds, Frankfurt am Main
Allianz VKRD Fonds, Frankfurt am Main
Allianz VSR Fonds, Frankfurt am Main
Allianz VW AV Fonds, Frankfurt am Main
AllianzGI-Fonds APF Renten, Frankfurt am Main
AllianzGI-Fonds Ferrostaal Renten 1, Frankfurt am
Main
AllianzGI-Fonds Ferrostaal Renten 2, Frankfurt am
Main
AllianzGI-Fonds Tosca, Frankfurt am Main
AllianzGI-Fonds Total Germany Bond Portfolio,
Frankfurt am Main
AllSecur Deutschland AG, Munich
APKV Private Equity Fonds GmbH, Munich
Atropos Vermögensverwaltungsgesellschaft mbH,
Munich
AUG. PRIEN Immobilien PE Verwaltung BrahmsQuar-
tier GmbH, Stuttgart
Auros GmbH, Munich
AZ-Arges Vermögensverwaltungsgesellschaft mbH,
Munich
AZ-Argos 14 Vermögensverwaltungsgesellschaft
mbH, Munich
AZ-Argos 41 Vermögensverwaltungsgesellschaft
mbH, Munich
AZ-Argos 44 Vermögensverwaltungsgesellschaft
mbH & Co. KG, Munich
AZ-Argos 50 Vermögensverwaltungsgesellschaft
mbH & Co. KG, Munich
AZ-Argos 51 Vermögensverwaltungsgesellschaft
mbH & Co. KG, Munich
AZ-Argos 57 Vermögensverwaltungsgesellschaft
mbH & Co. KG, Munich
AZ-Argos 58 Vermögensverwaltungsgesellschaft
mbH & Co. KG, Munich
100.0
100.0
100.0
100.0
100.0 4
100.0 4
100.0 4
100.0 4
100.0
100.0
100.0
100.0
100.0
100.0 4
100.0
100.0 4
100.0
100.0 4
91.5 3
98.6 3
97.9 3
60.3 3
99.5
100.0
100.0 4
100.0 4
100.0 4
100.0
100.0
100.0 4
100.0 4
100.0 4
100.0 4
100.0 4
100.0 4
100.0 3
62.4 3
61.9 3
54.6 3
100.0 3
100.0
100.0
100.0
94.9
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
AZ-Argos 61 Vermögensverwaltungsgesellschaft
mbH & Co. KG, Munich
AZ-Argos 64 Vermögensverwaltungsgesellschaft
mbH & Co. KG, Munich
AZ-Argos 67 Vermögensverwaltungsgesellschaft
mbH, Munich
AZ-Argos 68 Vermögensverwaltungsgesellschaft
mbH, Munich
AZ-Argos 69 Vermögensverwaltungsgesellschaft
mbH, Munich
AZ-GARI Vermögensverwaltungsgesellschaft mbH &
Co. KG, Munich
AZL AI Nr. 1 GmbH, Munich
AZL PE Nr. 1 GmbH, Munich
AZRE AZD P&C Master Fund, Munich
AZS-Arges Vermögensverwaltungsgesellschaft mbH,
Munich
AZ-SGD Private Equity Fonds 2 GmbH, Munich
AZ-SGD Private Equity Fonds GmbH, Munich
AZT Automotive GmbH, Ismaning
BCA Betriebs-Catering GmbH Verpflegungsdienste,
Bad Soden am Taunus
Brahms Beteiligungs GmbH & Co. KG, Stuttgart
BrahmsQ Objekt GmbH & Co. KG, Stuttgart
Bürgel Wirtschaftsinformationen GmbH & Co. KG,
Hamburg
Bürgel Wirtschaftsinformationen Verwaltungs-
GmbH, Hamburg
dbi-Fonds Ammerland, Frankfurt am Main
dbi-Fonds DAV, Frankfurt am Main
dbi-Fonds WE, Frankfurt am Main
Deutsche Lebensversicherungs-Aktiengesellschaft,
Berlin
Donator Beratungs GmbH, Munich
Donator Beteiligungsverwaltung GmbH, Munich
ESA Cargo & Logistics GmbH, Bad Friedrichshall
esa EuroShip GmbH, Bad Friedrichshall
Euler Hermes Aktiengesellschaft, Hamburg
Euler Hermes Collections GmbH, Potsdam
Euler Hermes Deutschland Aktiengesellschaft,
Hamburg
Euler Hermes Rating Deutschland GmbH, Hamburg
GA Global Automotive Versicherungsservice GmbH,
Halle (Saale)
KVM ServicePlus - Kunden- und Vertriebsmanage-
ment GmbH, Halle (Saale)
Mondial Kundenservice GmbH, Nuremberg
Münchener und Magdeburger Agrarversicherung
Aktiengesellschaft, Munich
Münsterländische Bank Thie & Co. KG, Münster
My Finance Coach Stiftung GmbH, Munich
Objekt Burchardplatz GmbH & Co. KG, Stuttgart
Oldenburgische Landesbank Aktiengesellschaft,
Oldenburg
PIMCO Deutschland GmbH, Munich
REC Frankfurt Objekt GmbH & Co. KG, Hamburg
REC Frankfurt zweite Objektverwaltungsgesellschaft
mbH, Hamburg
RehaCare GmbH, Munich
risklab GmbH, Munich
Roland Holding GmbH, Munich
Selecta Deutschland GmbH, Bad Soden am Taunus
Selecta Holding GmbH, Bad Soden am Taunus
Signa 12 Verwaltungs GmbH, Düsseldorf
Spherion Beteiligungs GmbH & Co. KG, Stuttgart
Spherion Objekt GmbH & Co. KG, Stuttgart
UfS Beteiligungs-GmbH, Munich
Vereinte Spezial Krankenversicherung Aktiengesell-
schaft, Munich
VLS Versicherungslogistik GmbH, Berlin
Volkswagen Autoversicherung AG, Braunschweig
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0 4
100.0
100.0
100.0
100.0
100.0
94.9
95.0
50.1
50.4
100.0 4
100.0 4
100.0 4
100.0
100.0
100.0
100.0
51.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
86.5
100.0
100.0
100.0
90.2
100.0
80.0
60.0
100.0
100.0
74.2
100.0
100.0
94.9
94.9
100.0
100.0
100.0
100.0
100.0
233
Volkswagen Autoversicherung Holding GmbH,
Braunschweig
W. Fortmann & Söhne KG, Oldenburg
Windpark Aller-Leine-Tal GmbH & Co. KG, Sehestedt
Windpark Berge-Kleeste GmbH & Co. KG, Sehestedt
Windpark Büttel GmbH & Co. KG, Sehestedt
Windpark Dahme GmbH & Co. KG, Hamburg
Windpark Eckolstädt GmbH & Co. KG, Sehestedt
Windpark Emmendorf GmbH & Co. KG, Sehestedt
Windpark Freyenstein-Halenbeck GmbH & Co. KG,
Sehestedt
Windpark Kesfeld-Heckhuscheid GmbH & Co. KG,
Sehestedt
Windpark Kirf GmbH & Co. KG, Sehestedt
Windpark Kittlitz GmbH & Co. KG, Sehestedt
Windpark Pröttlin GmbH & Co. KG, Sehestedt
Windpark Quitzow GmbH & Co. KG, Sehestedt
Windpark Redekin-Genthin GmbH & Co. KG,
Sehestedt
Windpark Schönwalde GmbH & Co. KG, Sehestedt
Windpark Waltersdorf GmbH & Co. KG Renditefonds,
Sehestedt
Windpark Werder Zinndorf GmbH & Co. KG,
Sehestedt
Non-consolidated affiliates
AERS Consortio Aktiengesellschaft, Stuttgart
Alida Grundstücksverwaltung GmbH, Hamburg
All Net GmbH, Stuttgart
Allianz Immobilienfonds GmbH, Stuttgart
Allianz Objektbeteiligungs-GmbH, Stuttgart
Allianz Pension Consult GmbH, Stuttgart
AZ Beteiligungs-Management GmbH, Munich
AZ-Argos 56 Vermögensverwaltungsgesellschaft
mbH, Munich
Bürgel Beteiligungs GmbH, Hamburg
Bürgel Erfurt Beteiligungsgesellschaft mbH, Erfurt
Bürgel Erfurt GmbH & Co. KG, Erfurt
Bürgel Wirtschaftsinformationen Vertriebsgesell-
schaft mbH, Hamburg
Elbe Forderungsmanagement GmbH, Hamburg
EURO-PRO Gesellschaft für Data Processing mbH,
Grävenwiesbach
Grundstücksgesellschaft der Vereinten Versicherun-
gen mbH, Munich
IDS GmbH - Analysis and Reporting Services, Munich
Infrastruktur Putlitz Ost GmbH & Co. KG, Husum
Lola Vermögensverwaltungsgesellschaft mbH & Co.
KG, Munich
manroland AG, Offenbach am Main
manroland Versicherungsvermittlung GmbH,
Offenbach am Main
manroland Vertrieb und Service GmbH, Mühlheim
am Main
META Finanz-Informationssysteme GmbH, Munich
OLB-Immobiliendienst-GmbH, Oldenburg
OLB-Service GmbH, Oldenburg
Supercheck GmbH, Cologne
Joint ventures
BEG Weser-Ems Baugrund- und Erschließungsgesell-
schaft mbH & Co. OHG, Oldenburg
Dealis Fund Operations GmbH, Frankfurt am Main
Associates
AV Packaging GmbH, Munich
Capiton IV ConFlex Co-Investment GmbH & Co. KG,
Berlin
esa EuroShip GmbH & Co. KG Underwriting for
Shipping, Bad Friedrichshall
Fondsdepot Bank GmbH, Hof
Global Real Estate Fund, Frankfurt am Main
Mühl Product & Service und Thüringer Baustoff-
handel Beteiligungs- und Verwaltungs GmbH,
Kranichfeld
Reisegarant GmbH, Hamburg
%
owned 1
49.0 2
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
55.3
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
75.2
100.0
100.0
70.8
100.0
100.0 6,9
100.0
100.0 9
100.0
100.0
100.0
100.0
50.0
50.1 7
51.0 8
50.0 8
40.0
49.0
32.8 3
25.0
24.0
234
Annual Report 2013
Allianz Group
Umspannwerk Putlitz GmbH & Co. KG, Frankfurt
am Main
Wohnen Deutschland II, Frankfurt am Main
Other participations between 5 and 20 %
of voting rights
EXTREMUS Versicherungs-Aktiengesellschaft,
Cologne
MLP AG, Wiesloch
Sana Kliniken AG, Ismaning
ForeiGn entities
Consolidated affiliates
490 Fulton GP LLC, New York, NY
490 Fulton JV LP, New York, NY
490 Fulton REIT LP, New York, NY
490 Lower Unit GP LLC, New York, NY
490 Lower Unit LP, New York, NY
A.V.I.P. Assurance Vie de Prévoyance SA, Courbevoie
AB Servicios Selecta Espana S.L., Madrid
ACMAR SA, Casablanca
ACN 092 738 997 Pty Ltd., Milson's Point
Acropole Convertibles Monde, Paris
Administradora de Inversión Colseguros S.A., Bogotá
D.C.
Advanz Fundo de Investimento Renda Fixa Crédito
Privado, São Paulo
Aero-Fonte S.r.l., Catania
AGA Alarmcentrale NL B.V., Amsterdam
AGA Assistance (India) Private Limited, Gurgaon
AGA Assistance Australia Pty Ltd., Toowong
AGA Assistance Beijing Services Co. Ltd., Beijing
AGA Inc., Richmond, VA
AGA Insurance Broker (Thailand) Co. Ltd., Bangkok
AGA Service Company Corp., Richmond, VA
AGA Service Italia S.c.a.r.l., Milan
AGA Services (India) Private Limited, Gurgaon
AGA Services (Thailand) Co. Ltd., Bangkok
AGCS Marine Insurance Company, Chicago, IL
AGCS Resseguros Brasil S.A., Rio de Janeiro
AGF Balanced, Paris
AGF Benelux S.A., Luxembourg
AGF FCR, Paris
AGF Holdings (UK) Limited, Guildford
AGF Insurance Limited, Guildford
AGF Inversiones S.A., Buenos Aires
AGF Ras Holding B.V., Amsterdam
AGR Services Pte Ltd., Singapore
AIM Equity EMU 1, Paris
AIM Equity US, Paris
AIM Singapore Pte Ltd., Singapore
AIM Underwriting Limited, Toronto, ON
Allegiance Marketing Group LLC, North Palm Beach,
FL
Allianz (UK) Limited, Guildford
Allianz Actio France, Paris
Allianz Actions Aéquitas, Paris
Allianz Actions Emergentes, Paris
Allianz Actions Euro, Paris
Allianz Actions Euro Convictions, Paris
Allianz Actions Euro MidCap, Paris
Allianz Actions France, Paris
Allianz Actions Indice US (couvert), Paris
Allianz Actions Internationales, Paris
Allianz Actions Japon, Paris
Allianz Actions US, Paris
Allianz Actions VD, Paris
Allianz Africa S.A., Paris
Allianz Air France IFC, Paris
Allianz Alapkezelõ Zrt., Budapest
Allianz Alp Sp. z o.o., Warsaw
Allianz Alternative Asset Management, Milan
Allianz America Holding B.V., Amsterdam
%
owned 1
25.4
37.3 3
16.0
8.9
13.9
100.0
96.5
100.0
100.0
100.0
100.0
100.0
55.0
100.0
82.2 3
100.0
100.0 4
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
97.6
100.0
100.0
100.0 3
100.0
99.9 3
100.0
100.0
100.0
100.0
100.0
100.0 4
100.0 4
100.0
100.0
100.0
100.0
79.1 3
71.3 3
66.4 3
85.5 3
85.9 3
58.1 3
56.1 3
93.8 3
98.6 3
60.2 3
80.6 3
99.6 3
100.0
99.9 3
100.0
100.0
100.0 4
100.0
Allianz Annuity Company of Missouri, Clayton, MO
Allianz Argentina Compañía de Seguros Generales
S.A., Buenos Aires
Allianz Argentina RE S.A., Buenos Aires
Allianz Asac Actions, Paris
Allianz Asian Multi Income Plus, Luxembourg
Allianz Asset Management of America Holdings Inc.,
Dover, DE
Allianz Asset Management of America L.P., Dover, DE
Allianz Asset Management of America LLC, Dover, DE
Allianz Asset Management U.S. Holding II LLC,
Dover, DE
Allianz Australia Advantage Ltd., Sydney
Allianz Australia Employee Share Plan Pty Ltd.,
Sydney
Allianz Australia Insurance Limited, Sydney
Allianz Australia Life Insurance Limited, Sydney
Allianz Australia Limited, Sydney
Allianz Australia Partnership Services Limited, Sydney
Allianz Australia Services Pty Limited, Sydney
Allianz Australia Workers Compensation (NSW)
Limited, Sydney
Allianz Australia Workers Compensation (Victoria)
Limited, Melbourne
Allianz Australian Claims Services Limited, Sydney
Allianz Aviation Managers LLC, Burbank, CA
Allianz Ayudhya Assurance Public Company Limited,
Bangkok
Allianz Bank Bulgaria JSC, Sofia
Allianz Bank Financial Advisors S.p.A., Milan
Allianz Banque S.A., Courbevoie
Allianz Belgium S.A., Brussels
Allianz Bénin dommages SA, Cotonou
Allianz Best Styles Euroland, Luxembourg
Allianz Bonds Diversified Euro, Paris
Allianz Bonds Euro High Yield, Paris
Allianz Bulgaria Holding Company Ltd., Sofia
Allianz Bulgaria Insurance and Reinsurance Company
Ltd., Sofia
Allianz Bulgaria Life Insurance Company Ltd., Sofia
Allianz Bulgaria Pension Company AD, Sofia
Allianz Burkina dommages SA, Ouagadougou
Allianz Burkina vie SA, Ouagadougou
Allianz Business Services Limited, Lancaster
Allianz business services s.r.o., Bratislava
Allianz Cameroun dommages SA, Douala
Allianz Cameroun Vie SA, Douala
Allianz Cap ISR 2016, Paris
Allianz Capital Partners of America Inc., New York, NY
Allianz Carbon Investments B.V., Amsterdam
Allianz Cash SAS, Paris
Allianz Centrafrique Assurances S.A., Bangui
Allianz China General Insurance Company Ltd.,
Guangzhou
Allianz China Life Insurance Co. Ltd., Shanghai
Allianz Citizen Care SRI, Paris
Allianz Clearing S.N.C., Paris
Allianz Colombia S.A., Bogotá D.C.
Allianz Compagnia Italiana Finanziamenti S.p.A.,
Milan
Allianz CompanÍa de Seguros y Reaseguros S.A.,
Barcelona
Allianz Congo Assurances SA, Brazzaville
Allianz Cornhill Information Services Private Ltd.,
Trivandrum
Allianz Côte d'Ivoire Assurances S.A., Abidjan
Allianz Côte d'Ivoire vie SA, Abidjan
Allianz Creactions 1, Paris
Allianz Creactions 2, Paris
Allianz Destination 2014, Paris
Allianz do Brasil Ltda., São Paulo
Allianz Dynamic Global Bond, Grand Cayman
Allianz EDUKACJA S.A., Bialobrzegi
Allianz Efficio, Paris
Allianz Efficio Plus, Paris
%
owned 1
100.0
100.0
100.0
100.0 4
79.3 3
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
62.6
99.9
100.0
100.0
100.0
83.5
63.1 3
100.0 4
100.0 4
66.2
87.4
99.0
65.9
60.3
71.8
100.0
100.0
75.4
75.8
98.7 3
100.0
100.0
100.0
88.3
100.0
51.0
81.8 3
100.0
100.0
100.0
99.9
100.0
100.0
74.1
71.0
100.0 4
100.0 4
100.0 3
100.0
98.8 3
100.0
99.7 3
99.8 3
D
Consolidated Financial Statements
127 Consolidated Balance Sheets
128 Consolidated Income Statements
129 Consolidated Statements of
Comprehensive Income
130 Consolidated Statements of
134 Notes to the Consolidated Financial
Changes in Equity
Statements
131 Consolidated Statements of
Cash Flows
%
owned 1
%
owned 1
%
owned 1
Allianz Elementar Lebensversicherungs-Aktiengesell-
schaft, Vienna
Allianz Elementar Versicherungs-Aktiengesellschaft,
Vienna
Allianz Engineering Services Limited, Guildford
Allianz Equity Emerging Markets 1, Paris
Allianz Equity Investments Ltd., Guildford
Allianz Equity Large Cap EMU, Paris
Allianz EURECO Equity, Paris
Allianz Euro Bond Plus, Paris
Allianz Euro Credit SRI, Paris
Allianz Euro Inflation, Paris
Allianz Euro Investment Grade, Paris
Allianz Euro Oblig 1-3 Plus, Paris
Allianz Euro Obligations Crédit ISR, Paris
Allianz Euro Tactique, Paris
Allianz Europe B.V., Amsterdam
Allianz Europe Convertible, Paris
Allianz Europe Ltd., Amsterdam
Allianz Finance Corporation, Westport, CT
Allianz Finance II B.V., Amsterdam
Allianz Finance II Luxembourg S.à r.l., Luxembourg
Allianz Finance III B.V., Amsterdam
Allianz Finance IV Luxembourg S.à r.l., Luxembourg
Allianz Finance Obligations Monde, Paris
Allianz Finance Pty Ltd., Sydney
Allianz Finance V Luxembourg S.à r.l., Luxembourg
Allianz Finance VII Luxembourg S.A., Luxembourg
Allianz Finance VIII Luxembourg S.A., Luxembourg
Allianz FinanzPlan 2015, Senningerberg
Allianz FinanzPlan 2020, Senningerberg
Allianz FinanzPlan 2025, Senningerberg
Allianz FinanzPlan 2030, Senningerberg
Allianz FinanzPlan 2035, Senningerberg
Allianz FinanzPlan 2040, Senningerberg
Allianz FinanzPlan 2045, Senningerberg
Allianz FinanzPlan 2050, Senningerberg
Allianz FinanzPlan 2055, Senningerberg
Allianz Fire and Marine Insurance Japan Ltd., Tokyo
Allianz Foncier, Paris
Allianz Formuléo ISR, Paris
Allianz France Favart I, Paris
Allianz France Investissement OPCI, Paris
Allianz France Real Estate Invest SPPICAV, Paris
Allianz France Richelieu 1 S.A.S., Paris
Allianz France S.A., Paris
Allianz Fund Investments Inc., Wilmington, DE
Allianz General Insurance Company (Malaysia)
Berhad p.l.c., Kuala Lumpur
Allianz General Laos Ltd., Vientiane
Allianz generalni sluzby s.r.o., Prague
Allianz Global Assistance International SA, Paris
Allianz Global Assistance S.A.S., Paris
Allianz Global Corporate & Specialty do Brasil Partici-
pações Ltda., Rio de Janeiro
Allianz Global Corporate & Specialty South Africa
Ltd., Johannesburg
Allianz Global Corporate and Specialty of Africa
(Proprietary) Ltd., Johannesburg
Allianz Global Investors Capital Limited, Cardiff
Allianz Global Investors Distributors LLC, Dover, DE
Allianz Global Investors France S.A., Paris
Allianz Global Investors Fund Management LLC,
Dover, DE
Allianz Global Investors Hong Kong Ltd., Hong Kong
Allianz Global Investors Ireland Ltd., Dublin
Allianz Global Investors Japan Co. Ltd., Tokyo
Allianz Global Investors Korea Limited, Seoul
Allianz Global Investors Luxembourg S.A.,
Senningerberg
Allianz Global Investors Nominee Services Ltd.,
Grand Cayman
Allianz Global Investors Singapore Ltd., Singapore
Allianz Global Investors Taiwan Ltd., Taipei
Annual Report 2013
Allianz Group
100.0
100.0
100.0
100.0 4
100.0
100.0 4
96.5 3
87.0 3
51.0 3
76.6 3
50.1 3
71.0 3
87.9 3
50.2 3
100.0
52.1 3
100.0
100.0
100.0
100.0
100.0
100.0
99.9 3
100.0
100.0
100.0
100.0
79.2 3
96.1 3
92.5 3
95.8 3
97.3 3
98.2 3
99.3 3
99.9 3
100.0 3
100.0
62.2 3
99.4 3
100.0 4
100.0
100.0
100.0
100.0
100.0
100.0
51.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
Allianz Global Investors U.S. Holdings LLC, Dover, DE
Allianz Global Investors U.S. LLC, Dover, DE
Allianz Global Life Ltd., Dublin
Allianz Global Risks US Insurance Company Corp.,
Burbank, CA
Allianz Graduello, Paris
Allianz Greater China Dynamic, Senningerberg
Allianz Grenelle SAS, Paris
Allianz Hayat ve Emeklilik A.S., Istanbul
Allianz Hellas Insurance Company S.A., Athens
Allianz Héxéo, Paris
Allianz Hold Co Real Estate S.à r.l., Luxembourg
Allianz Holding eins GmbH, Vienna
Allianz Holding France SAS, Paris
Allianz Holdings plc, Guildford
Allianz Hospitaliers Euro, Paris
Allianz Hospitaliers Monde, Paris
Allianz Hospitaliers Valeurs Durables, Paris
Allianz Hungária Biztosító Zrt., Budapest
Allianz IARD S.A., Paris
Allianz IARD Vintage, Paris
Allianz Immo, Paris
Allianz Index Tracking Shares Fund, Budapest
Allianz Indiceo 2015, Paris
Allianz Individual Insurance Group LLC,
Minneapolis, MN
Allianz Informatique G.I.E., Paris
Allianz Informatyka Sp. z o.o., Warsaw
Allianz Infrastructure Czech HoldCo I S.à r.l.,
Luxembourg
Allianz Infrastructure Czech HoldCo II S.à r.l.,
Luxembourg
Allianz Infrastructure Luxembourg I S.à r.l.,
Luxembourg
Allianz Infrastructure Luxembourg I SICAV-FIS,
Luxembourg
Allianz Infrastructure Luxembourg II SICAF-FIS,
Luxembourg
Allianz Insurance (Hong Kong) Ltd., Hong Kong
Allianz Insurance Cie of Ghana Limited, Accra
Allianz Insurance Company Lanka Limited, Saram
Allianz Insurance Company-Egypt S.A.E., Cairo
Allianz Insurance plc, Guildford
Allianz Inversiones S.A., Bogotá D.C.
Allianz Invest 10 Division S/U, Vienna
Allianz Invest 11 Division Leben/Kranken, Vienna
Allianz Invest 12 Division Leben/Kranken, Vienna
Allianz Invest 50, Vienna
Allianz Invest Alternativ, Vienna
Allianz Invest d.o.o., Zagreb
Allianz Invest Kapitalanlage GmbH, Vienna
Allianz Invest Ostrent, Vienna
Allianz Invest Spezial 3, Vienna
Allianz Investment Management LLC, Minneapolis, MN
Allianz Investmentbank Aktiengesellschaft, Vienna
Allianz Investments I Luxembourg S.à r.l.,
Luxembourg
Allianz Investments II Luxembourg S.à r.l.,
Luxembourg
Allianz Investments III Luxembourg S.à r.l.,
Luxembourg
Allianz Investments IV Luxembourg S.à r.l.,
Luxembourg
Allianz Irish Life Holdings p.l.c., Dublin
Allianz kontakt s.r.o., Prague
Allianz Leasing Bulgaria AD, Sofia
Allianz Life & Annuity Company, Minneapolis, MN
Allianz Life (Bermuda) Ltd., Hamilton
Allianz Life Assurance Company-Egypt S.A.E., Cairo
Allianz Life Financial Services LLC, Minneapolis, MN
Allianz Life Insurance Co. Ltd., Seoul
Allianz Life Insurance Company Ltd., Moscow
Allianz Life Insurance Company of Missouri,
Clayton, MO
100.0
100.0
100.0
100.0
100.0 3
83.3 3
100.0
89.0
100.0
98.5 3
100.0
100.0
100.0
100.0
100.0 4
100.0 4
100.0 4
100.0
100.0
100.0 4
53.5 3
89.8 3
99.1 3
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
85.0
100.0
100.0
100.0 4
100.0 4
100.0 4
100.0 3
100.0 3
100.0 4
100.0
95.5 3
100.0 4
100.0
100.0
100.0
100.0
100.0
100.0
66.5
100.0
51.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
Allianz Life Insurance Company of New York, New
York, NY
Allianz Life Insurance Company of North America,
Minneapolis, MN
Allianz Life Insurance Japan Ltd., Tokyo
Allianz Life Insurance Lanka Ltd., Colombo
Allianz Life Insurance Malaysia Berhad p.l.c., Kuala
Lumpur
Allianz Life Luxembourg S.A., Luxembourg
Allianz Madagascar Assurances S.A., Antananarivo
Allianz Malaysia Berhad p.l.c., Kuala Lumpur
Allianz Mali dommages SA, Bamako
Allianz Managed Operations and Services Nether-
lands B.V., Rotterdam
Allianz Management Services Limited, Guildford
Allianz Marine & Transit Underwriting Agency Pty
Ltd., Sydney
Allianz Marine (UK) Ltd., Ipswich
Allianz Mena Holding Bermuda Ltd., Beirut
Allianz México S.A. Compañía de Seguros, Mexico City
Allianz Multi Actions Europe, Paris
Allianz Multi Actions Monde, Paris
Allianz Multi Croissance, Paris
Allianz Multi Dynamic, Paris
Allianz Multi Dynamisme, Paris
Allianz Multi Equilibre, Paris
Allianz Multi Horizon 2016-2017, Paris
Allianz Multi Horizon 2018-2020, Paris
Allianz Multi Horizon 2021-2023, Paris
Allianz Multi Horizon 2024-2026, Paris
Allianz Multi Horizon 2027-2029, Paris
Allianz Multi Horizon 2030-2032, Paris
Allianz Multi Horizon 2033-2035, Paris
Allianz Multi Horizon 2036-2038, Paris
Allianz Multi Horizon 2039-2041, Paris
Allianz Multi Horizon Court Terme, Paris
Allianz Multi Horizon Long Terme, Paris
Allianz Multi Opportunités, Paris
Allianz Multi Rendement Premium (R), Paris
Allianz Multi Rendement Réel, Paris
Allianz Multi Sérénité, Paris
Allianz Mutual Funds Management Hellas S.A.,
Athens
Allianz Nederland Administratie B.V., Utrecht
Allianz Nederland Asset Management B.V.,
Nieuwegein
Allianz Nederland Groep N.V., Rotterdam
Allianz Nederland Levensverzekering N.V., Rotterdam
Allianz Nederland Schadeverzekering N.V., Rotterdam
Allianz New Europe Holding GmbH, Vienna
Allianz New Zealand Limited, Auckland
Allianz Obligations Court Terme, Paris
Allianz Obligations Internationales, Paris
Allianz Obligations Monde, Paris
Allianz of America Inc., Westport, CT
Allianz One Beacon GP LLC, Wilmington, DE
Allianz One Beacon LP, Wilmington, DE
Allianz Opéra, Paris
Allianz Optéo, Paris
Allianz Osmea 4, Paris
Allianz p.l.c., Dublin
Allianz Pan Asian REITs Fund Segregated Portfolio,
George Town
Allianz Participations B.V., Amsterdam
Allianz Pension Fund Trustees Ltd., Guildford
Allianz Pensionskasse Aktiengesellschaft, Vienna
Allianz penzijní spolecnost a.s., Prague
Allianz Pimco Corporate, Vienna
Allianz Pimco Mortgage, Vienna
Allianz pojistovna a.s., Prague
Allianz Polska Services Sp. z o.o., Warsaw
Allianz Popular Asset Management SGIIC S.A., Madrid
Allianz Popular Pensiones EGFP S.A., Madrid
Allianz Popular S.L., Madrid
100.0
100.0
100.0
100.0
100.0
100.0
100.0
71.8
77.0
100.0
100.0
65.0
100.0
99.9
100.0
98.8 3
94.3 3
99.8 3
99.7 3
94.6 3
97.9 3
62.3 3
81.5 3
71.5 3
99.6 3
99.7 3
99.7 3
99.7 3
99.7 3
99.7 3
68.2 3
59.8 3
99.4 3
97.3 3
89.1 3
99.6 3
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
92.0 3
79.2 3
99.9 3
100.0
100.0
100.0
100.0 4
98.4 3
99.9 3
100.0
100.0 4
100.0
100.0
100.0
100.0
75.3 3
96.3 3
100.0
100.0
100.0
100.0
60.0
235
%
owned 1
%
owned 1
%
owned 1
Allianz Popular Vida Compañía de Seguros y
Reaseguros S.A., Madrid
Allianz Potential, Paris
Allianz Primio 2015, Paris
Allianz Private Equity Partners Europa I, Milan
Allianz Private Equity Partners Europa II, Milan
Allianz Private Equity Partners Europa III, Milan
Allianz Private Equity UK Holdings Limited, London
Allianz Properties Limited, Guildford
Allianz Prudence, Paris
Allianz Re Dublin Limited, Dublin
Allianz Real Estate France SAS, Paris
Allianz Real Estate of America LLC, New York, NY
Allianz Renewable Energy Fund Management 1 Ltd.,
London
Allianz Renewable Energy Partners I LP, London
Allianz Renewable Energy Partners II Limited, London
Allianz Renewable Energy Partners III LP, London
Allianz Renewable Energy Partners IV Limited, London
Allianz Renewable Energy Partners V plc., London
Allianz Risk Audit Ltd., Moscow
Allianz Risk Consultants Inc., Los Angeles, CA
Allianz Risk Transfer (Bermuda) Ltd., Hamilton
Allianz Risk Transfer (UK) Limited, London
Allianz Risk Transfer AG, Zurich
Allianz Risk Transfer Inc., New York, NY
Allianz Risk Transfer N.V., Amsterdam
Allianz S.A. de C.V., Mexico City
Allianz S.p.A., Trieste
Allianz Saint Marc CL, Paris
Allianz SAS S.A.S., Bogotá D.C.
Allianz Saude S.A., São Paulo
Allianz Scalinvest, Puteaux
Allianz Secteur Euro Immobilier, Paris
Allianz Secteur Europe Immobilier, Paris
Allianz Sécurité, Paris
Allianz Seguros de Vida S.A., Bogotá D.C.
Allianz Seguros S.A., São Paulo
Allianz Seguros S.A., Bogotá D.C.
Allianz Sénégal Assurances Vie S.A., Dakar
Allianz Sénégal dommages SA, Dakar
Allianz Services (UK) Limited, London
Allianz Sigorta A.S., Istanbul
Allianz SNA s.a.l., Beirut
Allianz Sociedad Anónima A.S. Agencia de Seguros,
Barcelona
Allianz Sociedade Gestora de Fundos de Pensões
S.A., Lisbon
Allianz Société Financière S.à r.l., Luxembourg
Allianz South America Holding B.V., Amsterdam
Allianz Specialised Investments Limited, London
Allianz Specjalistyczny Fundusz Inwestycyjny Otwarty
Subfunduszu Allianz 1, Warsaw
Allianz Specjalistyczny Fundusz Inwestycyjny Otwarty
Subfunduszu Allianz 2, Warsaw
Allianz Strategy 15, Senningerberg
Allianz Strategy 50, Senningerberg
Allianz Strategy 75, Senningerberg
Allianz Subalpina Holding S.p.A., Turin
Allianz Suisse Immobilien AG, Volketswil
Allianz Suisse Lebensversicherungs-Gesellschaft AG,
Zurich
Allianz Suisse Rückversicherungs AG, Zurich
Allianz Suisse Versicherungs-Gesellschaft AG, Zurich
Allianz Taiwan Life Insurance Co. Ltd., Taipei
Allianz Telematics S.p.A., Rome
Allianz Tiriac Asigurari SA, Bucharest
Allianz Tiriac Pensii Private Societate de administrare
a fondurilor de pensii private S.A., Bucharest
Allianz Togo dommages SA, Lome
Allianz UK Credit Fund, Paris
Allianz Ukraine LLC, Kiev
Allianz Underwriters Insurance Company Corp.,
Burbank, CA
100.0
100.0 3
99.5 3
86.8 4
92.0 4
99.6 4
100.0
100.0
99.7 3
100.0
100.0
100.0
100.0
100.0
100.0
98.3
98.3
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0 3
100.0
100.0
98.1 3
94.0 3
88.7 3
84.9 3
100.0
100.0
100.0
95.5
83.2
100.0
84.2
100.0
100.0
84.4
100.0
100.0
100.0
100.0 4
100.0 4
95.0 3
95.5 3
92.1 3
98.1
100.0
100.0
100.0
100.0
99.7
100.0
52.2
100.0
97.9
100.0 4
100.0
100.0
236
Annual Report 2013
Allianz Group
Allianz US Investment GP LLC, Wilmington, DE
Allianz US Investment LP, Wilmington, DE
Allianz US Private REIT GP LLC, Wilmington, DE
Allianz US Private REIT LP, Wilmington, DE
Allianz Valeurs Durables, Paris
Allianz Vermögenskonzept Ausgewogen,
Luxembourg
Allianz Vermögenskonzept Defensiv, Luxembourg
Allianz Vermögenskonzept Dynamisch, Luxembourg
Allianz Vie S.A., Paris
Allianz Worldwide Care Ltd., Dublin
Allianz Worldwide Care Services Ltd., Dublin
Allianz Yasam ve Emeklilik A.S., Istanbul
Allianz Zagreb d.d., Zagreb
Allianz ZB d.o.o. Company for the Management of
Obligatory Pension Funds, Zagreb
Allianz ZB d.o.o. Company for the Management of
Voluntary Pension Funds, Zagreb
AllianzGo S.r.l., Trieste
Allianz-Slovenská DSS a.s., Bratislava
Allianz-Slovenská poist'ovna a.s., Bratislava
AllSecur B.V., Den Bosch
Amaya Compania de Seguros y Reaseguros S.A.,
Madrid
American Automobile Insurance Company Corp.,
Earth City, MO
American Financial Marketing Inc., Minneapolis, MN
AMOS Austria GmbH, Vienna
AMOS IT Suisse AG, Zurich
AMOS of America LLC, Novato, CA
Ann Arbor Annuity Exchange Inc., Ann Arbor, MI
Antoniana Veneta Popolare Assicurazioni S.p.A.,
Trieste
Antoniana Veneta Popolare Vita S.p.A., Trieste
APEH Europe III FCPR, Paris
APEH Europe V FCPR, Paris
APKV US Private REIT GP LLC, New York, NY
APKV US Private REIT LP, New York, NY
Approfrais SA, Evreux
Arab Gulf Health Services LLC, Beirut
Arcalis Assur 5, Paris
Arcalis SA, Courbevoie
Arcalis UN, Paris
Arges Investments I N.V., Amsterdam
Arges Investments II N.V., Amsterdam
AS Selecta s.r.o., Bratislava
Asit Services S.R.L., Bucharest
Assistance Courtage d'Assurance et de
Réassurance S.A., Paris
Associated Indemnity Corporation, Novato, CA
Automaty Servis Selecta s.r.o., Prague
Avip Actions 100, Paris
Avip Actions 60, Paris
Avip Top Croissance, Paris
Avip Top Defensif, Paris
Avip Top Harmonie, Paris
AZ Euro Investments II S.à r.l., Luxembourg
AZ Euro Investments S.à r.l., Luxembourg
AZ Jupiter 4 B.V., Amsterdam
AZ Jupiter 8 B.V., Amsterdam
AZ Jupiter 9 B.V., Amsterdam
AZ Servisni centar d.o.o., Zagreb
AZ Vers US Private REIT GP LLC, New York, NY
AZ Vers US Private REIT LP, New York, NY
AZGA Insurance Agency Canada Ltd., Waterloo, ON
AZGA Service Canada Inc., Waterloo, ON
AZL PF Investments Inc., Minneapolis, MN
AZOA Services Corporation, Novato, CA
BAWAG Allianz Vorsorgekasse AG, Vienna
Beleggingsmaatschappij Willemsbruggen B.V.,
Rotterdam
Bilan Services S.N.C., Nanterre
Borgo San Felice S.r.l., Castelnuovo Berardenga
(Siena)
100.0
100.0
100.0
100.0
59.1 3
100.0 3
97.3 3
98.4 3
100.0
100.0
100.0
80.0
83.2
51.0
51.0
100.0
100.0
99.6
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
50.0 2
56.0 3
69.4 3
100.0
100.0
100.0
100.0
99.3 3
100.0
100.0 3
100.0
100.0
100.0
100.0
100.0
100.0
100.0
99.7 3
99.8 3
98.9 3
98.7 3
95.0 3
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
50.0 2
100.0
66.0
100.0
Botanic Building SPRL, Brussels
BPS Brindisi 211 S.r.l., Lecce
BPS Brindisi 213 S.r.l., Lecce
BPS Brindisi 222 S.r.l., Lecce
BPS Mesagne 214 S.r.l., Lecce
BPS Mesagne 215 S.r.l., Lecce
BPS Mesagne 216 S.r.l., Lecce
BPS Mesagne 223 S.r.l., Lecce
BPS Mesagne 224 S.r.l., Lecce
Brasil de Imoveis e Participacoes Ltda., São Paulo
Bright Mission Berhad Ltd., Kuala Lumpur
British Reserve Insurance Co. Ltd., Guildford
BSMC (Thailand) Limited, Bangkok
Bulgaria Net Co. Ltd., Sofia
Bureau d'Expertises Despretz S.A., Brussels
Bx3 S.r.l., Trieste
C.E.P.E. de Haut Chemin S.à r.l., Versailles
Calobra Investments Sp. z o.o., Warsaw
Calypso S.A., Paris
CAP Rechtsschutz-Versicherungsgesellschaft AG,
Zurich
CAPEX, Paris
Centrale Photovoltaique de Saint Marcel sur aude
SAS, Paris
Centrale Photovoltaique de Valensole SAS, Paris
CEPE de Langres Sud S.à r.l., Versailles
CEPE de Mont Gimont S.à r.l., Versailles
Château Larose Trintaudon S.A., Saint Laurent Médoc
Chicago Insurance Company Corp., Chicago, IL
CIC Allianz Insurance Ltd., Sydney
Club Marine Limited, Sydney
Colisee S.à r.l., Luxembourg
Compagnie de Gestion et de Prévoyance SA,
Strasbourg
Companhia de Seguros Allianz Portugal S.A., Lisbon
Compañía Colombiana de Servicio Automotriz S.A.,
Bogotá D.C.
Comprehensive Travel Insurance 2004 Ltd., Auckland
Cornhill Trustee (Guernsey) Ltd., St. Peter Port
Corsetec Ltda., São Paulo
CPRN Thailand Ltd., Bangkok
CPRN-Holdings Limited, Bangkok
Creactif Allocation, Paris
CreditRas Assicurazioni S.p.A., Milan
CreditRas Vita S.p.A., Milan
Darta Saving Life Assurance Ltd., Dublin
Deeside Investments Inc., Wilmington, DE
Delta Technical Services Ltd., London
Diamond Point a.s., Prague
Dresdner Kleinwort Pfandbriefe Investments II Inc.,
Minneapolis, MN
EF Solutions LLC, Wilmington, DE
EHPAD Assur S.A.S., Paris
Emerald Global Investments, Paris
Energie Eolienne Lusanger S.à r.l., Versailles
Eolica Erchie S.r.l., Lecce
Euler Gestion, Courbevoie
Euler Hermes ACI Services LLP, Baltimore, MD
Euler Hermes ACMAR Services SARL, Casablanca
Euler Hermes Asset Management France S.A., Paris
Euler Hermes Canada Services Inc., Montreal, QC
Euler Hermes Cescob Service s.r.o., Prague
Euler Hermes Collections Sp. z o.o., Warsaw
Euler Hermes Collections UK Limited, London
Euler Hermes Consulting (Shanghai) Co. Ltd., Shanghai
Euler Hermes Crédit France S.A.S., Paris
Euler Hermes Credit Management Services
Ireland Ltd., Dublin
Euler Hermes Credit Services (JP) Ltd., Tokyo
Euler Hermes Europe S.A./N.V., Brussels
Euler Hermes France S.A., Paris
Euler Hermes Hellas Credit Insurance SA, Athens
Euler Hermes Hellas Services Ltd., Athens
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
98.4
100.0
100.0
100.0
100.0
100.0
100.0
84.6 3
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
99.9
64.8
100.0
100.0
100.0
99.5
100.0
100.0
100.0 3
50.0 2
50.0 2
100.0
50.1
100.0
100.0
100.0
100.0
100.0
100.0 3
100.0
100.0
100.0 4
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
80.3
100.0
D
Consolidated Financial Statements
127 Consolidated Balance Sheets
128 Consolidated Income Statements
129 Consolidated Statements of
Comprehensive Income
130 Consolidated Statements of
134 Notes to the Consolidated Financial
Changes in Equity
Statements
131 Consolidated Statements of
Cash Flows
%
owned 1
%
owned 1
%
owned 1
Euler Hermes Hong Kong Service Limited, Hong Kong
Euler Hermes Luxembourg Holding S.à r.l., Luxem-
bourg
Euler Hermes Magyar Követeleskezelö Kft., Budapest
Euler Hermes North America Holding Inc., Owings
Mills, MD
Euler Hermes North America Insurance Company Inc.,
Baltimore, MD
Euler Hermes Patrimonia SA, Brussels
Euler Hermes Ré SA, Senningerberg
Euler Hermes Real Estate SPPICAV, Paris
Euler Hermes Recouvrement France S.A.S., Paris
Euler Hermes Reinsurance AG, Zurich
Euler Hermes Risk Services UK Limited, London
Euler Hermes Risk Yönetimi A.S., Istanbul
Euler Hermes S.A., Paris
Euler Hermes Seguros de Crédito à Exportação S.A.,
São Paulo
Euler Hermes Seguros de Crédito S.A., São Paulo
Euler Hermes Service AB, Stockholm
Euler Hermes Services AG, Zurich
Euler Hermes Services B.V., Hertogenbosch
Euler Hermes Services Belgium S.A., Brussels
Euler Hermes Services India Privat Limited, Mumbai
Euler Hermes Services S.A.S., Paris
Euler Hermes Services South Africa Ltd., Johannesburg
Euler Hermes Services Sp. z o.o., Warsaw
Euler Hermes Services UK Limited, London
Euler Hermes Servicii Financiare S.R.L., Bucharest
Euler Hermes Serviços Ltda., São Paulo
Euler Hermes Servis s.r.o., Bratislava
Euler Hermes Sigorta A.S., Istanbul
Euler Hermes Singapore Services Pte. Ltd., Singapore
Euler Hermes South Express S.A., Brussels
Euler Hermes Tech SAS, Nanterre
Euler Hermes Trade Credit Limited, Auckland
Euler Hermes Trade Credit Underwriting Agents
Pty Ltd., Sydney
Euler Hermes UMA, Louisville, KY
Euler Hermes World Agency SASU, Paris
Euler Hermes, Mierzejewska-Kancelaria Prawna
Sp.k, Warsaw
Eurl 20/22 Le Peletier, Paris
Euro Garantie AG, Pfäffikon
Eurosol Invest S.r.l., Udine
Expositio Sp. z o.o., Warsaw
FAI Allianz Ltd., Sydney
FCP LBPAM IDR, Paris
FCPR Fregate, Paris
FCT CIMU 92, Pantin
FCT Rocade L2 Marseille, Marseille
Fenix Directo Compania de Seguros y Reaseguros
S.A., Madrid
Ferme Eolienne de Villemur-sur-Tarn S.à r.l.,
Versailles
Ferme Eolienne des Jaladeaux S.à r.l., Versailles
Fiduciaria Colseguros S.A., Bogotá D.C.
Financière Aldebaran SAS, Paris
Financière Callisto SAS, Paris
Fireman's Fund County Mutual Insurance Company
Corp., Dallas, TX
Fireman's Fund Financial Services LLC, Dallas, TX
Fireman's Fund Indemnity Corporation, Liberty
Corner, NJ
Fireman's Fund Insurance Company Corp., Novato, CA
Fireman's Fund Insurance Company of Bermuda,
Hamilton
Fireman's Fund Insurance Company of Hawaii Inc.,
Honolulu, HI
Fireman's Fund Insurance Company of Ohio Corp.,
Cincinnati, OH
Floralis, Paris
Fondo Chiuso Allianz Infrastructure Partners I, Milan
Fragonard Assurance S.A., Paris
Friederike MLP S.à r.l., Luxembourg
Fusion Brokerage Inc., Richmond, VA
Annual Report 2013
Allianz Group
100.0
100.0
100.0
100.0
100.0
100.0
100.0
60.0
100.0
100.0
100.0
100.0
69.6
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0 3
58.3 3
100.0 4
100.0 4
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
99.6 3
100.0 4
100.0
100.0
100.0
Fusion Company Inc., Richmond, VA
Gaipare Action, Paris
GamePlan Financial Marketing LLC, Woodstock, GA
GAP Reactif Canton A, Paris
Generation Vie S.A., Courbevoie
Genialloyd S.p.A., Milan
Gestion de Téléassistance et de Services S.A., Chatillon
Gestion Produits Structures, Puteaux
Gestion Produits Structures Dynamique, Puteaux
GIE Euler Hermes SFAC Services, Paris
Global Transport & Automotive Insurance Solutions
Pty Limited, Sydney
Hauteville Insurance Company Limited, Guernsey
Havelaar et Van Stolk B.V., Rotterdam
Helviass Verzekeringen B.V., Rotterdam
Home & Legacy (Holdings) Limited, London
Home & Legacy Insurance Services Limited, London
Hunter Premium Funding Ltd., Sydney
IDR Actions Euros, Paris
Immovalor Gestion S.A., Paris
Insurance and Reinsurance AG Energy, Sofia
Insurance CJSC Medexpress, Saint Petersburg
Intermediass S.r.l., Milan
International Film Guarantors Limited, London
International Film Guarantors LLC, Santa Monica, CA
Interstate Fire & Casualty Company, Chicago, IL
Investitori SGR S.p.A., Milan
ITEB B.V., Rotterdam
IZAN Investment S.à r.l., Luxembourg
JCR Intertrade Ltd., Bangkok
Jefferson Insurance Company Corp., New York, NY
Ken Tame & Associates Pty Ltd., Sydney
Kiinteistö OY Eteläesplanadi 2, Helsinki
Königinstrasse I S.à r.l., Luxembourg
La Rurale SA, Paris
LCF IDR, Paris
Les Vignobles de Larose S.A.S., Saint Laurent Médoc
Life Sales LLC, Novato, CA
LLC "Allianz Eurasia Healthcare", Saint Petersburg
LLC "Progress-Med", Moscow
Lloyd Adriatico Holding S.p.A., Trieste
London Verzekeringen N.V., Rotterdam
Magdeburger Sigorta A.S., Istanbul
Managed Insurance Operations B.V., Rotterdam
Martin Maurel Vie SA, Courbevoie
Medi24 AG, Bern
MetallRente Fonds Portfolio, Senningerberg
MM Allocation Monde, Marseille
MM Composition Amerique, Marseille
Mondial Assistance Asia Pte Ltd., Singapore
Mondial Assistance Australia Holding Pty Ltd.,
Toowong
Mondial Assistance France SAS, Paris
Mondial Assistance France Services à la personne SAS,
Paris
Mondial Assistance GmbH, Vienna
Mondial Assistance Indian Ocean LLC, Ebene
Mondial Assistance Ireland Ltd., Dublin
Mondial Assistance Mexico S.A. de C.V., Mexico City
Mondial Assistance OOO, Moscow
Mondial Assistance Portugal Serviços de Assistência
Lda., Paco de Aros
Mondial Assistance Réunion S.A., Saint Denis
Mondial Assistance S.r.l., Bucharest
Mondial Assistance s.r.o., Prague
Mondial Assistance Service Chile Limitada, Las Condes
Mondial Assistance Service España S.A., Madrid
Mondial Assistance Services Hellas A.E., Athens
Mondial Assistance Servis Hizmetleri A.S., Istanbul
Mondial Assistance Sigorta Aracilik Hizmetleri LS,
Istanbul
Mondial Assistance Sp. z o.o., Warsaw
Mondial Assistance United Kingdom Ltd., Croydon
Surrey
80.0
99.7 3
100.0
66.3 3
52.5
100.0
100.0
73.6 3
65.1 3
100.0
73.1
100.0
100.0
100.0
100.0
100.0
100.0
100.0 3
100.0
50.9
99.8
100.0
100.0
100.0
100.0
100.0
100.0
100.0
40.0 2
100.0
69.0
100.0
100.0
99.9
100.0 3
100.0
100.0
100.0
100.0
99.9
100.0
100.0
100.0
100.0
100.0
57.7 3
61.7 3
52.7 3
100.0
100.0
95.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
51.0
97.0
100.0
100.0
100.0
Mondial Contact Center Italia S.r.l., Taurisano
Mondial Protection Corretora de Seguros Ltda.,
São Bernardo do Campo
Mondial Service - Belgium S.A., Brussels
Mondial Service Argentina S.A., Buenos Aires
Mondial Service Colombia SAS, Bogotá D.C.
Mondial Servicios S.A. de C.V., Mexico City
Mondial Serviços Ltda., São Bernardo do Campo
Monéger SA, Dakar
Morgan Stanley Italian Office Fund, Milan
National Surety Corporation, Chicago, IL
Neoasistencia Manoteras S.L., Madrid
Nexam Multi Alternatives, Paris
Nextcare Bahrain Ancillary Services Company B.S.C.,
Manama
NEXtCARE Egypt LLC, Cairo
NEXtCARE Holding WLL, Manama
NEXtCARE Lebanon SAL, Beirut
NFJ Investment Group LLC, Dover, DE
Oddo Convictions, PARIS
Oddo Gestion Prudente, Paris
Oddo Indice Japon, Paris
Oddo Investissement, Paris
Oddo Patrimoine, Paris
Oddo Proactif Europe, Paris
Oddo Valeurs Rendement A, Paris
OJSC "Allianz Investments", Moscow
OJSC "My Clinic", Moscow
OJSC Insurance Company Allianz, Moscow
OJSC Insurance Company ROSNO-MS, Moscow
Omega Thai Investment Holding B.V., Amsterdam
Ontario Limited, Toronto, ON
OOO "IC Euler Hermes Ru", Moscow
OOO Euler Hermes Credit Management, Moscow
Oppenheimer Group Inc., Dover, DE
Orione PV S.r.l., Milan
Orsa Maggiore PV S.r.l., Milan
Orsa Minore PV S.r.l., Milan
OY Selecta AB, Helsinki
Pacific Investment Management Company LLC,
Dover, DE
Paramount Group Real Estate Special Situations
Fund-A L.P., New York, NY
Parc Eolien de Bonneuil S.à r.l., Versailles
Parc Eolien de Bruyère Grande SAS, Versailles
Parc Eolien de Croquettes SAS, Versailles
Parc Eolien de Fontfroide SAS, Versailles
Parc Eolien de Forge SAS, Paris
Parc Eolien de la Sole du Bois SAS, Paris
Parc Eolien de Longchamps SAS, Versailles
Parc Eolien des Barbes d'Or SAS, Versailles
Parc Eolien des Joyeuses SAS, Versailles
Parc Eolien des Mistandines SAS, Paris
Parc Eolien des Quatre Buissons SAS, Paris
Parc Eolien du Bois Guillaume SAS, Paris
Parc Eolien Les Treize SAS, Paris
Personalized Brokerage Service LLC, Topeka, KS
Pet Plan Ltd., Guildford
PFP Holdings Inc., Dover, DE
PGA Global Services LLC, Wilmington, DE
PGREF V 1301 Sixth Investors I LLC, Wilmington, DE
PGREF V 1301 Sixth Investors I LP, Wilmington, DE
PGRESS-A Equity GP LLC, Wilmington, DE
PGRESS-A Equity REIT LP, Wilmington, DE
Phenix Absolute Return, Paris
PIMCO (Schweiz) GmbH, Zurich
PIMCO Asia Ltd., Hong Kong
PIMCO Asia Pte Ltd., Singapore
PIMCO Australia Pty Ltd., Sydney
PIMCO Canada Corp., Toronto, ON
PIMCO Euro Low Duration Investment Grade Corpo-
rate Fund, Dublin
PIMCO Europe Ltd., London
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
94.6 4
100.0
100.0
85.6 3
100.0
100.0
75.0
100.0
100.0
69.7 3
66.7 3
55.3 3
64.9 3
67.2 3
65.7 3
53.2 3
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
96.7
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0 4
100.0
100.0
100.0
100.0
100.0
100.0 4
100.0
237
%
owned 1
%
owned 1
PIMCO Global Advisors (Ireland) Ltd., Dublin
PIMCO Global Advisors (Luxembourg) S.A.,
Luxembourg
PIMCO Global Advisors (Resources) LLC, Dover, DE
PIMCO Global Advisors LLC, Dover, DE
PIMCO Global Holdings LLC, Dover, DE
PIMCO GP I LLC, Dover, DE
PIMCO GP III LLC, Dover, DE
PIMCO GP IX LLC, Dover, DE
PIMCO GP V LLC, Dover, DE
PIMCO GP VII LLC, Dover, DE
PIMCO GP X LLC, Dover, DE
PIMCO GP XI LLC, Dover, DE
PIMCO GP XII LLC, Dover, DE
PIMCO GP XIII LLC, Dover, DE
PIMCO Investments LLC, Dover, DE
PIMCO Japan Ltd., Road Town, Tortola
PIMCO Latin America Administradora de Carteiras
Ltda., São Paulo
Primacy Holdings Pty Ltd., Melbourne
Primacy Underwriting Management Ltd., Wellington
Primacy Underwriting Management Pty Ltd.,
Melbourne
Prism Re (Bermuda) Ltd., Hamilton
Prosperaz Fundo de Investimento Renda Fixa Crédito
Privado, São Paulo
Protexia France S.A., Paris
PT Asuransi Allianz Life Indonesia p.l.c., Jakarta
PT Asuransi Allianz Utama Indonesia Ltd., Jakarta
PTE Allianz Polska S.A., Warsaw
Q 207 GP S.à r.l., Luxembourg
Q207 S.C.S., Luxembourg
Quality 1 AG, Bubikon
Questar Agency Inc., Minneapolis, MN
Questar Asset Management Inc., Ann Arbor, MI
Questar Capital Corporation, Minneapolis, MN
Quintet Properties Ltd., Dublin
RAS Antares, Milan
RB Fiduciaria S.p.A., Milan
RCM Asia Pacific Ltd., Hong Kong
RCM Capital Management Pty Ltd., Sydney
Real Faubourg Haussmann SAS, Paris
Real FR Haussmann SAS, Paris
Redoma S.à r.l., Luxembourg
Retail Vending Ltd., Birmingham
Rhea SA, Luxembourg
Risikomanagement und Softwareentwicklung GmbH,
Vienna
Roland Print B.V., Amsterdam
Roster Financial LLC, Mount Laurel, NJ
S.I.B.I. S.A., Paris
SA Carène Assurance, Paris
Saint-Barth Assurances S.à r.l., St. Barts
San Francisco Reinsurance Company Corp., Novato, CA
SAS 20 pompidou, Paris
SAS Allianz Colisée, Paris
SAS Allianz Forum Seine, Paris
SAS Allianz Platine, Paris
SAS Allianz Rivoli, Paris
SAS Allianz Serbie, Paris
SAS Madeleine Opéra, Paris
SAS Passage Des Princes, Paris
SAS Société d'Exploitation du Parc Eolien de Nélausa,
Paris
Saudi NEXtCARE LLC, Al Khobar
SC Tour Michelet, Paris
SCI 46 Desmoulins, Paris
SCI Allianz ARC de Seine, Paris
SCI Allianz Chateaudun, Paris
SCI Allianz Messine, Paris
SCI AVIP La Templerie, Courbevoie
SCI AVIP SCPI Selection, Courbevoie
SCI ESQ, Paris
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
99.0
100.0 4
100.0
99.8
97.8
100.0
100.0
94.0
100.0
100.0
100.0
100.0
100.0
100.0 4
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
52.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
75.0
238
Annual Report 2013
Allianz Group
SCI Prelloyd, Paris
SCI Stratus, Courbevoie
SCI Via Pierre 1, Paris
SCI Volnay, Paris
Selecta A/S, Rodovre
Selecta AB, Stockholm
Selecta AG, Muntelier
Selecta AS, Oslo
Selecta B.V., Waardenburg
Selecta Betriebsverpflegungs GmbH, Vienna
Selecta Eesti Osauhing OÜ, Tallinn
Selecta Group B.V., Amsterdam
Selecta Holding AB, Stockholm
Selecta Holding B.V., Amsterdam
Selecta Holding Ltd., London
Selecta Holding SAS, Paris
Selecta Hungary Automataüzemeltetö Kft., Budapest
Selecta Luxembourg SA, Leudelange
Selecta Management AG, Zug
Selecta Nordic Holding AB, Stockholm
Selecta Purchasing AG, Zug
Selecta Refreshments Ltd., Dublin
Selecta SA, Zaventem
Selecta SA, Paris
Selecta TMP AG, Zug
Selecta UK Ltd., Birmingham
Selection Multi-Gerants Emergents, Paris
Selection Multi-Gerants Value, Paris
SI 173-175 Boulevard Haussmann SAS, Paris
SIA Baltic Payment Systems, Riga
SIA Selecta, Riga
Siac Services S.r.l., Rome
Silex Gas Management AS, Oslo
Silex Gas Norway AS, Oslo
Sirius S.A., Luxembourg
Sistemi Informativi Allianz S.p.c.A., Milan
SLC "Allianz Life Ukraine", Kiev
SMG Asie Emergente, Paris
SMG Croissance, Paris
Società Agricola San Felice S.p.A., Milan
Société de Production D'électricité D'harcourt
Moulaine SAS, Versailles
Société d'Energie Eolien Cambon SAS, Versailles
Societe d'Exploitation du Parc Eolien d'Aussac
Vadalle SAS, Paris
Société Européenne de Protection et de Services
d'Assistance à Domicile S.A., Paris
Société Nationale Foncière S.A.L., Beirut
SOFE One Ltd., Bangkok
SOFE Two Ltd., Bangkok
Sofiholding S.A., Brussels
South City Office Broodthaers SA, Brussels
SpaceCo S.A., Paris
Standard General Agency Inc., Dallas, TX
StocksPLUS Management Inc., Dover, DE
Téléservices et Sécurité "TEL2S" SARL, Chatillon
TFI Allianz Polska S.A., Warsaw
The American Insurance Company Corp.,
Cincinnati, OH
The Annuity Store Financial & Insurance Services LLC,
Sacramento, CA
The MI Group Limited, Guildford
Three Pillars Business Solutions Limited, Guildford
Tihama Investments B.V., Amsterdam
Top Assistance Service GmbH, Vienna
Top Immo A GmbH & Co. KG, Vienna
Top Immo Besitzgesellschaft B GmbH & Co. KG, Vienna
Top Versicherungsservice GmbH, Vienna
Top Vorsorge-Management GmbH, Vienna
Towarzystwo Ubezpieczen Euler Hermes S.A., Warsaw
Trafalgar Insurance Public Limited Company, Guildford
Travel Care Inc., Richmond, VA
TU Allianz Polska S.A., Warsaw
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
98.7
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
99.9
100.0
100.0
79.4 3
55.5 3
100.0
100.0
100.0
100.0
100.0
100.0
94.8
100.0
100.0
54.0 3
58.6 3
100.0
100.0
100.0
100.0
56.0
66.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
99.9
100.0
100.0
100.0
99.4
100.0
100.0
100.0
100.0
100.0
100.0
75.0
100.0
100.0
100.0
100.0
TU Allianz Zycie Polska S.A., Warsaw
UAB Selecta, Vilnius
UP 36 SA, Brussels
UTE Gesecopri Servecarve S.r.l., Madrid
Vendcare (Holdings) Limited, Birmingham
Vendcare Services Ltd., Birmingham
VertBois S.à r.l., Luxembourg
Viveole SAS, Versailles
Volta, Paris
WFC Investments Sp. z o.o., Warsaw
Windpark Les Cent Jalois SAS, Versailles
Wm. H McGee & Co. (Bermuda) Ltd., Hamilton
Wm. H McGee & Co. Inc., New York, NY
Wm. H McGee & Co. of Puerto Rico Inc., San Juan
World Access Europe Ltd., Croydon Surrey
YAO Investment S.à r.l., Luxembourg
Yapı Kredi Sigorta A.S., Istanbul
Yorktown Financial Companies Inc., Minneapolis, MN
Non-consolidated affiliates
A. Diffusion S.A., Nanterre
AGF Pension Trustees Ltd., Guildford
Allianz America Latina S.C. Ltda., Rio de Janeiro
Allianz Financial Services S.A., Athens
Allianz Global Corporate & Specialty AG Escritorio de
Representacao no Brasil Ltda., São Paulo
Allianz Insurance Services Ltd., Athens
Allianz International Ltd., Guildford
Allianz Northern Ireland Limited, Belfast
Allianz Risk Consultants B.V., Rotterdam
Assurance France Aviation S.A., Paris
business lounge GmbH, Vienna
CCA SAS, Paris
COGAR S.à r.l., Paris
First Rate Direct Limited, Belfast
Gesellschaft für Vorsorgeberatung AG, Bern
ICC Evaluation SARL, Paris
Knightsbridge Allianz LP, Bartlesville, OK
Office Sénégalais de Conseils en Assurance (OSECA)
S.A.R.L., Dakar
RE-AA S.A., Abidjan
SA Immobilière de L'Avenue du Roule, Courbevoie
SCI champ laurent, Courbevoie
SCI J.T., Courbevoie
SCI Paris X, Courbevoie
SCI Vilaje, Courbevoie
SIFCOM Assur S.A., Abidjan
Societe Fonciere Europeenne B.V, Amsterdam
Top Versicherungs-Vermittler Service GmbH, Vienna
Joint ventures
A&A Centri Commerciali S.r.l., Milan
Allee-Center Kft., Budapest
Allianz C.P. General Insurance Co. Ltd., Bangkok
Ancilyze Technologies LLC, Oakbrook Terrace, IL
Atenction Integral a la Dependencia S.L., Cordoba
Bajaj Allianz Financial Distributors Limited, Pune
Companhia de Seguro de Créditos S.A., Lisbon
Dorcasia Ltd., Sydney
Euromarkt Center d.o.o., Ljubljana
Europe Logistics Venture 1 FCP-FIS, Luxembourg
Guotai Jun'an Allianz Fund Management Co. Ltd.,
Shanghai
International Shopping Centre Investment S.A.,
Luxembourg
Israel Credit Insurance Company Ltd., Tel Aviv
Market Street Trust, Sydney
Millea Mondial Co. Ltd., Tokyo
NET4GAS Holdings s.r.o., Prague
One Beacon Joint Venture LP, Wilmington, DE
Previndustria - Fiduciaria Previdenza Imprenditori
S.p.A., Milan
SC Holding SAS, Paris
%
owned 1
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
99.9 3
87.5
100.0
100.0
100.0
100.0
100.0
100.0
99.8
100.0
99.9
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
99.9
100.0
100.0
100.0
100.0
100.0
100.0
99.5
99.6
97.5
100.0
100.0
100.0
100.0
100.0
60.0
100.0
100.0
50.0
50.0
50.0
50.0
50.0
50.0
50.0
50.0
50.0
83.3 7
49.0 7
50.0
50.0
50.0 3
50.0
50.0
50.0
50.0
50.0
D
Consolidated Financial Statements
127 Consolidated Balance Sheets
128 Consolidated Income Statements
129 Consolidated Statements of
Comprehensive Income
130 Consolidated Statements of
134 Notes to the Consolidated Financial
Changes in Equity
Statements
131 Consolidated Statements of
Cash Flows
%
owned 1
%
owned 1
Invesco Multi Patrimoine, Paris
IPE Tank and Rail Investment 1 S.C.A., Luxembourg
JPMorgan IIF UK1 LP, Dublin
Le Cottage, Paris
Medgulf Allianz Takaful B.S.C., Seef
MMGI Euromix Action, Marseille
New Path S.A., Buenos Aires
OAO “Avariinyi Comissar”, Moscow
Oddo Avenir (D), Paris
Oddo Convertibles, Paris
Oddo Convertibles Taux, Paris
Oddo Court Terme, Paris
Oddo Europe, Paris
Oddo Generation C, Paris
Oddo Gestion Defen, Paris
Oddo Haut Rendement Monde 2018, Paris
Oddo Immobilier C, Paris
Oddo Rendement 2017, Paris
Oddo US Mid Cap, Paris
Oddo USA Index Actif, Paris
OeKB EH Beteiligungs- und Management AG, Vienna
OVS Opel VersicherungsService GmbH, Vienna
P H R V Paris Hotels Roissy Vaugirard SA, Paris
PAR Holdings Limited, Hamilton
PERFECTIS I Ltd., Paris
PGREF V 1301 Sixth Holding LP, Wilmington, DE
PGRESS Debt Holdings LP, Wilmington, DE
PGRESS Equity Holdings LP, Wilmington, DE
Pinatton France, Paris
RMCP PIV DPC L.P., Los Angeles, CA
SAS Alta Gramont, Paris
Schroder ISF Global Property Securities, Senninger-
berg
SCI Bercy Village, Paris
SK Versicherung AG, Vienna
SNC Alta CRP Gennevilliers, Paris
SNC Alta CRP La Valette, Paris
SNC Société d’aménagement de la Gare de l’Est, Paris
Société de Distribution Automatique SA, Tunis
Solveig Gas Holdco AS, Oslo
Sunderland Insurance Services Inc., Fargo, ND
Wattinvest C, Paris
Wheelabrator Invest FCPR, Paris
Wildlife Works Carbon LLC, San Francisco, CA
Other participations between 5 and 20 %
of voting rights
Al Nisr Al Arabi, Amman
Banco BPI S.A., Porto
Zagrebacka banka d.d., Zagreb
33.5 3
48.8
26.0
43.7 3
25.0
26.2 3
40.0
23.3
23.2 3
32.8 3
32.5 3
42.4 3
41.3 3
33.9 3
33.8 3
40.3 3
23.5 3
35.2 3
37.3 3
40.2 3
49.0
40.0
30.6
21.2
24.9 3
24.5
20.0
20.0
31.2 3
25.0 3
49.0
30.1 3
49.0
25.8
49.0
49.0
49.0
49.0
30.0
40.0
39.1 3
26.9 3
10.0 8
18.0
8.8
11.7
1
2
3
4
5
6
7
8
9
Percentage includes equity participations held by dependent
entities in full, even if the Allianz Group’s share in the depend-
ent entity is below 100 %.
Controlled by Allianz Group.
Mutual, private equity or special fund.
Investment fund.
Releasing impact according to § 264 (3) HGB through the Allianz
Group’s consolidated financial statements.
Group share through indirect holder Roland Holding GmbH,
Munich: 74.2 %.
Classified as joint venture according to IAS 31.
Classified as associate according to IAS 28.
Insolvent.
SES Shopping Center AT1 GmbH, Salzburg
Solunion Compania Internacional de Seguros y
Reaseguros SA, Madrid
TopTorony Ingatlanhasznosító Zrt., Budapest
Associates
21 Gestion Active, Paris
ABS Credit Plus, Paris
Allianz Actions Indice Japon (couvert), Paris
Allianz EFU Health Insurance Ltd., Karachi
Allianz Euro Emprunts d'Etat, Paris
Allianz Euro Oblig Court Terme ISR, Paris
Allianz Fóndika S.A. de C.V., Mexico City
Allianz Global Emerging Markets Equity, Dublin
Allianz Global Sustainability, Senningerberg
Allianz Invest Cash, Vienna
Allianz Invest Eurorent Liquid, Vienna
Allianz Invest Osteuropa, Vienna
Allianz Invest Vorsorgefonds, Vienna
Allianz Merger Arbitrage Strategy Fund, Luxembourg
Allianz PIMCO Euro Bond Total Return, Senningerberg
Allianz PIMCO Inflationsschutz, Senningerberg
Allianz Saudi Fransi Cooperative Insurance Company,
Riyadh
Allianz Securicash SRI, Paris
Altaprofits SA, Paris
APEH Europe IV FCPR, Paris
APEH France Investissement 1 FCPR, Paris
APEH France Investissement 2 FCPR, Paris
Archstone Multifamily Partners AC JV LP,
Engelwood, CO
Archstone Multifamily Partners AC LP, Wilmington, DE
Areim Fastigheter 2 AB, Stockholm
Ariel, Paris
Assurances médicales de France SAS, Paris
Assurcard N.V., Haasrode
Autoelektro tehnicki pregledi d.o.o., Vojni´c
Bajaj Allianz General Insurance Company Ltd., Pune
Bajaj Allianz Life Insurance Company Ltd., Pune
Berkshire Hathaway Services India Private Limited,
New Delhi
Berkshire India Private Limited, New Delhi
BMM Audace, Marseille
BMM France Croissance, Marseille
BMM Long Terme, Marseille
BMM Obligations, Marseille
BMM Obliplus, Marseille
Broker on-line de productores de seguros S.A.,
Buenos Aires
Brunei National Insurance Company Berhad Ltd.,
Bandar Seri Begawan
Capimmovalor SCPI, Paris
Chicago Parking Meters LLC, Wilmington, DE
Citylife S.r.l., Milan
CJSC "MedCentreStrakh", Moscow
CJSC "Roskurort", Moscow
Data Quest SAL, Beirut
Dinvest Core Liquid FCP, Paris
Douglas Emmett Partnership X LP, Santa Monica, CA
Dr. Ignaz Fiala GmbH, Vienna
DSB BlackRock India Investment Fund, Ebene
Euro Media Group S.A., Bry-sur-Marne
Foncière des 6e et 7e arrondissements de Paris
(SIIC) SA, Paris
Four Oaks Place LP, Wilmington, DE
GAP 1 AN Canton, Paris
GAP Euros Canton, Paris
Graydon Holding N.V., Amsterdam
Helios Silesia Holding B.V., Amsterdam
Henderson UK Outlet Mall Partnership LP, Edinburgh
ICG Convertibles-Rendement, Paris
Interpolis Kredietverzekeringen N.V., Hertogenbosch
Inventus Capital Partners Fund II Ltd., Ebene
50.0
50.0
50.0
25.2 3
24.1 3
43.9 3
49.0
45.9 3
44.1 3
26.8
39.7 3
25.8 3
38.7 3
30.2 3
45.0 3
35.4 3
32.8 3
21.8 3
21.6 3
32.5
21.7 3
20.0
50.7 3,8
36.2 3
44.9 3
40.0
28.6
23.3
31.1 3
30.0
25.0
49.0
26.0
26.0
20.0
20.0
35.0 3
29.8 3
48.3 3
21.6 3
34.2 3
30.0
25.0
33.6
49.9
33.0
36.4
50.0 8
36.0
37.6 3
28.6
33.3
27.8 3
21.5
26.5
49.0
33.7 3
38.9 3
27.5
45.0
19.5 8
38.0 3
45.0
28.1
Annual Report 2013
Allianz Group
239
Responsibility statement
To the best of our knowledge, and in accordance with the applicable
reporting principles, the consolidated financial statements, in accor-
dance 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 opportuni-
ties and risks associated with the expected development of the Group.
Munich, 24 February 2014
Allianz SE
The Board of Management
240
Annual Report 2013
Allianz Group
D
Consolidated Financial Statements
127 Consolidated Balance Sheets
128 Consolidated Income Statements
129 Consolidated Statements of
Comprehensive Income
130 Consolidated Statements of
134 Notes to the Consolidated Financial
Changes in Equity
Statements
131 Consolidated Statements of
Cash Flows
In our opinion, based on the findings of our audit, the consoli-
dated 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.
Munich, 3 March 2014
KPMG AG
Wirtschaftsprüfungsgesellschaft
Klaus Becker
Wirtschaftsprüfer
(Independent Auditor)
Dr. Frank Pfaffenzeller
Wirtschaftsprüfer
(Independent Auditor)
auditoR’s RepoRt
We have audited the consolidated financial statements prepared by
Allianz SE, Munich, comprising the consolidated balance sheet, the
consolidated income statement, the consolidated statement of com-
prehensive income, the consolidated statement of changes in equity,
the consolidated statements of cash flows and the notes, together
with the group management report for the business year from 1 Jan-
uary to 31 December 2013. The preparation of the consolidated finan-
cial statements and the group management report in accordance
with IFRSs, as adopted by the EU, and the additional requirements of
German commercial law pursuant to § 315a para. 1 HGB and supple-
mentary provisions of the articles of incorporation are the responsi-
bility of the parent company’s management. Our responsibility is to
express an opinion on the consolidated financial statements and on
the group management report based on our audit.
We conducted our audit of the consolidated financial state-
ments in accordance with § 317 HGB [Handelsgesetzbuch “German
Commercial Code”] and German generally accepted standards for
the audit of financial statements promulgated by the Institut der
Wirtschaftsprüfer [Institute of Public Auditors in Germany] (IDW).
Those standards require that we plan and perform the audit such
that misstatements materially affecting the presentation of the net
assets, financial position and results of operations in the consoli-
dated financial statements in accordance with the applicable finan-
cial reporting framework and in the group management report are
detected with reasonable assurance. Knowledge of the business
activities and the economic and legal environment of the Group and
expectations as to possible misstatements are taken into account in
the determination of audit procedures. The effectiveness of the
accounting-related internal control system and the evidence sup-
porting the disclosures in the consolidated financial statements and
the group management report are examined primarily on a test basis
within the framework of the audit. The audit includes assessing the
annual financial statements of those entities included in consolida-
tion, the determination of entities to be included in consolidation,
the accounting and consolidation principles used and significant
estimates made by management, as well as evaluating the overall
presentation of the consolidated financial statements and group
management report. We believe that our audit provides a reasonable
basis for our opinion.
Our audit has not led to any reservations.
Annual Report 2013
Allianz Group
241
242
Annual Report 2013
Allianz Group
Juraj Pápay with his grandson,
Allianz Customer,
Slovakia
* a one-day trip should be full of rich
experiences, not of concerns.
We strive to preserve capital and build
our business on a strong capital base
so that we are prepared for unfore-
seen situations. Giving our customers
the best possible protection through
optimum coverage enables them to
enjoy a worry-free life after retirement.
e _ further information
pages 244 – 253
Joint Advisory Council of the Allianz Companies
International Advisory Board
245
246
247 Mandates of the Members of the Supervisory Board
248 Mandates of the Members of the Board of Management
249
253
Glossary
Index
244
annual report 2013
allianz Group
E
Further Information
245 Joint Advisory Council of the
247 Mandates of the Members of
Allianz Companies
the Supervisory Board
249 Glossary
253 Index
246 International Advisory Board
248 Mandates of the Members of
the Board of Management
Joint Advisory Council of the Allianz Companies
Dr. Helmut Perlet
Chairman
Chairman of the Supervisory Board
Allianz SE
Dr. Kurt bocK
Chairman of the Board of Executive Directors
BASF SE
Dr. Jürgen Heraeus
Chairman of the Supervisory Board
Heraeus Holding GmbH
Prof. Dr. Dieter HunDt,
senator e. H.
Chairman of the Supervisory Board
Allgaier Werke GmbH
Dr. manfreD scHneiDer
Chairman of the Supervisory Board
Linde AG
RWE AG
Prof. Dr. Dennis J. snower
President of the Kiel Institute for the World Economy
Dr. tHomas enDers
Chief Executive Officer
EADS N.V.
franz feHrenbacH
Managing Partner
Robert Bosch Industrietreuhand KG
Chairman of the Supervisory Board
Robert Bosch GmbH
Prof. Dr.-ing. Dr.-ing. e.H.
Hans-Peter Keitel
Vice-President of BDI-Federation of German Industries
Peter terium
since 1 March 2013
Chief Executive Officer
RWE AG
Dr. nicola leibinger-Kammüller
Chief Executive Officer
TRUMPF GmbH & Co. KG
Dr.-ing. e. H. HeinricH weiss
Chairman of the Supervisory Board
SMS Holding GmbH
manfreD wennemer
Chairman of the Administrative Board
Sulzer AG
Dr. rüDiger grube
Chairman of the Board and Chief Executive Officer
Deutsche Bahn AG
Dr. tHomas rabe
since 1 March 2013
CEO & Chairman of the Executive Board
Bertelsmann SE & Co. KGaA
Jim Hagemann snabe
Co-Chief Executive Officer
SAP AG
Herbert Hainer
Chairman of the Board of Management
adidas AG
Dr.-ing. Dr.-ing. e.H. norbert
reitHofer
Chairman of the Board of Management
BMW AG
Harry roels
KasPer rorsteD
Chairman of the Board of Management
Henkel AG & Co. KGaA
Annual Report 2013
Allianz Group
245
International Advisory Board
Dr. Paul acHleitner
Chairman of the Supervisory Board
Deutsche Bank AG
Paulo De azeveDo
Chief Executive Officer of Sonae SGPS, S.A.
alfonso cortina De alcocer
Vice Chairman Rothschild Europe BV,
Senior Advisor at Texas Pacific Group
ambassaDor robert m. Kimmitt
Senior International Counsel,
Wilmer Cutler Pickering Hale and Dorr
Peter costello
Guardian of the Australian Future Fund
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
minoru maKiHara
Senior Corporate Advisor of Mitsubishi Corporation
cHristoPHe De margerie
Chairman and Chief Executive Officer of Total S.A.
Jacques nasser
Chairman BHP Billiton,
Senior Advisor of One Equity Partners
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. marco troncHetti Provera
Chairman and Chief Executive Officer of
Pirelli & C. S.p.A.
246
Annual Report 2013
Allianz Group
E
Further Information
245 Joint Advisory Council of the
247 Mandates of the Members of
Allianz Companies
the Supervisory Board
249 Glossary
253 Index
246 International Advisory Board
248 Mandates of the Members of
the Board of Management
Mandates of the Members
of the Supervisory Board
JEan-JaCQUES CETTE
Chairman of the Group Works Council of
Allianz France S.A.
Membership in comparable 1 supervisory bodies
Membership in Group bodies
Allianz France S. A.
iRa GLoE-SEMLER
Chairwoman of the federal insurance group of
ver.di Germany
fRanZ HEiSS
Employee of Allianz Beratungs- und Vertriebs-AG
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.
PETER DEniS SUTHERLanD
Chairman of Goldman Sachs International
Membership in comparable 1 supervisory bodies
BW Group Ltd.
Goldman Sachs International (Chairman)
Koç Holding A.Ş.
DR. HELMUT PERLET
Chairman
Former Member of the Board of Management of
Allianz SE
Membership in other statutory supervisory boards
and SE administrative boards in Germany
Commerzbank AG
GEA Group AG
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
RoLf ZiMMERMann
Vice Chairman
Employee of Allianz Deutschland AG
DanTE BaRBan
Employee of Allianz S.p.A.
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
GaBRiELE BURKHaRDT-BERG
Chairwoman of the Group Works Council of Allianz SE
Membership in other statutory supervisory boards
and SE administrative boards in Germany
Membership in Group bodies
Allianz Deutschland AG (Vice Chairwoman)
until 10 April 2013
1
We regard memberships in other supervisory bodies as “comparable” if the company is listed on a stock exchange or has more than 500 employees.
Annual Report 2013
Allianz Group
247
Mandates of the Members
of the Board of Management
MiCHaEL DiEKMann
Chairman of the Board of Management
Membership in other statutory supervisory boards
and SE administrative boards in Germany
BASF SE (Vice Chairman)
Linde AG (Vice Chairman)
Siemens AG
Membership in Group bodies
Allianz Asset Management AG (Chairman)
Allianz Deutschland AG
Membership in comparable 1 supervisory bodies
Membership in Group bodies
Allianz France S.A. (Vice Chairman)
Allianz S.p.A.
oLivER BäTE
Insurance Western & Southern Europe
Membership in other statutory supervisory boards
and SE administrative boards in Germany
Membership in Group bodies
Allianz Global Corporate & Specialty SE
(Vice Chairman)
until 8 May 2013
Membership in comparable 1 supervisory bodies
Membership in Group bodies
Allianz France S.A.
Allianz Sigorta A.S. (Vice Chairman)
Allianz S.p.A. (Vice Chairman)
Allianz Yasam ve Emeklilik A.S.
since 12 July 2013
Yapı Kredi Sigorta A.S. (Vice Chairman)
since 12 July 2013
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)
GaRy BHoJWani
Insurance USA
Membership in comparable 1 supervisory bodies
Allina Health
until 12 June 2013
Membership in Group bodies
Allianz Life Insurance Company of North America
(Chairman)
Allianz of America, Inc. (Chairman)
AZOA Services Corp. (Chairman)
Fireman’s Fund Insurance Company (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.
Allianz Insurance plc (Chairman)
Allianz Irish Life Holdings plc
Euler Hermes S.A. (Chairman)
DR. HELGa JUnG
Insurance Iberia & Latin America, Legal & Compliance,
Mergers & Acquisitions
Membership in other statutory supervisory boards
and SE administrative boards in Germany
Membership in Group bodies
Allianz Global Corporate & Specialty SE (Vice Chairwoman)
since 8 May 2013
Membership in comparable 1 supervisory bodies
Unicredit S.p.A.
Membership in Group bodies
Allianz Compañía de Seguros y Reaseguros S.A.
Companhia de Seguros Allianz Portugal S.A.
DR. CHRiSTof MaSCHER
Operations
Membership in other statutory supervisory boards
and SE administrative boards in Germany
Volkswagen Autoversicherung AG
Membership in Group bodies
Allianz Managed Operations and Services SE (Chairman)
Membership in comparable 1 supervisory bodies
Membership in Group bodies
Allianz Worldwide Partners SAS (formerly Allianz Global
Assistance SAS) (Chairman)
Jay RaLPH
Asset Management Worldwide
DR. DiETER WEMMER
Finance, Controlling, Risk
Membership in other statutory supervisory boards
and SE administrative boards in Germany
Membership in Group bodies
Allianz Asset Management AG
Allianz Investment Management SE
since 18 February 2013
DR. WERnER ZEDELiUS
Insurance German Speaking Countries, Human
Resources
Membership in other statutory supervisory boards
and SE administrative boards in Germany
Membership in Group bodies
Allianz Deutschland AG (Chairman)
Membership in comparable 1 supervisory bodies
Membership in Group bodies
Allianz Elementar Lebensversicherungs-AG (Chairman)
Allianz Elementar Versicherungs-AG (Chairman)
Allianz Investmentbank AG (Vice Chairman)
Allianz Suisse Lebensversicherungs-Gesellschaft AG
(Vice Chairman)
Allianz Suisse Versicherungs-Gesellschaft AG
(Vice Chairman)
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)
since 15 April 2013
1
We regard memberships in other supervisory bodies as “comparable” if the company is listed on a stock exchange or has more than 500 employees.
248
Annual Report 2013
Allianz Group
E
Further Information
245 Joint Advisory Council of the
247 Mandates of the Members of
Allianz Companies
the Supervisory Board
249 Glossary
253 Index
246 International Advisory Board
248 Mandates of the Members of
the Board of Management
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.
A
Acquisition cost
The amount of cash or cash equivalents paid or the fair
value of the other consideration given to acquire an asset
at the time of its acquisition.
ActuAriAl gAins And losses
Actuarial gains and losses are changes in the present
value of the defined benefit obligation resulting from
experience adjustments (i.e. the effects of differences
between the previous actuarial assumptions and what
has actually occurred) and the effects of changes in
actuarial assumptions (e.g. changes in demographic
and in financial assumptions).
AffiliAtes
The parent company of the Group and all subsidiaries.
Subsidiaries are entities where the parent company can
exercise a significant influence over their corporate
strategy in accordance with the control concept. This is
possible, for example, where the parent company holds,
directly or indirectly, a majority of the voting rights, has
the power to appoint or remove a majority of the mem
bers of the Board of Management or equivalent govern
ing body, or where there are contractual rights of control.
AggregAte policy reserves
Policies in force – especially in life, health, and personal
accident insurance – give rise to potential liabilities for
which funds have to be set aside. The amount required is
calculated actuarially.
AllowAnce for loAn losses
The overall volume of provisions includes allowances for
credit losses – deducted from the asset side of the bal
ance sheet – and provisions for risks associated with con
tingencies, such as guarantees, loan commitments or
other obligations, which are stated as liabilities. Where
it is determined that a loan cannot be repaid, the uncol
lectable amount is written off against any existing specific
loan loss allowance, or directly recognized as expense in
the income statement. Recoveries on loans previously
written off are recognized in the income statement un
der net loan loss provisions.
Assets under mAnAgement
Assets under management are assets or securities port
folios, valued at current market value, for which Allianz
Asset Management companies provide discretionary
investment management decisions and have the port
folio management responsibility. They are managed on
behalf of third parties as well as on behalf of the Allianz
Group.
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.
Amortized cost
The amortized cost of a financial asset or financial liability
is the amount at which the financial instrument is mea
sured at initial recognition minus principal repayments,
plus or minus the cumulative amortization using the
effective interest method of any difference between that
initial amount and the maturity amount.
AvAilAbleforsAle investments
Availableforsale investments are securities which are
neither held to maturity nor have been acquired for sale in
the near term; availableforsale investments are carried
at fair value in the balance sheet.
B
business combinAtion
A business combination is a transaction or event in which
an acquirer obtains control of one or more businesses.
Business combinations are accounted for using the acqui
sition method.
C
cAsh flow stAtement
Statement showing movements of cash and cash equi
valents during a reporting period, classified by three
types of activity; operating activities, investing activities
and financing activities.
certificAted liAbilities
Certificated liabilities comprise debentures and other
liabilities for which transferable certificates have been
issued.
collAterAlized debt obligAtion
(cdo)
A way of packaging credit risk. Several classes of securities
(known as tranches) are created from a portfolio of
bonds and there are rules for determining how the cost
of defaults are allocated to classes.
combined rAtio
Represents the total of acquisition and administrative
expenses (net) and claims and insurance benefits
incurred (net) divided by premiums earned (net).
contingent liAbilities
Financial obligations not shown as liabilities on the bal
ance sheet because the probability of a liability actually
being incurred is low. Example: guarantee obligations.
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.
costincome rAtio
Represents operating expenses divided by operating
revenues.
Annual Report 2013
Allianz Group
249
E
eArnings per shAre
(bAsic/diluted)
Ratio calculated by dividing the net income for the year
attributable to shareholders by the weighted average
number of shares outstanding. In order to calculate di
luted earnings per share, the number of common shares
outstanding and the net income for the year attributable
to shareholders are adjusted by the effects of potentially
dilutive common shares which could still be exercised.
Potentially dilutive common shares arise in connection
with sharebased compensation plans.
equity method
The equity method is a method of accounting whereby
the investment is initially recognized at cost and adjusted
thereafter for the postacquisition change in the investor’s
share of the investee’s net assets.
expense rAtio
Represents acquisition and administrative expenses
(net) divided by premiums earned (net).
F
fAir vAlue
The price that would be received to sell an asset or paid
to transfer a liability in an orderly transaction between
market participants at the measurement date.
finAnciAl Assets cArried At fAir
vAlue through income
Financial assets carried at fair value through income in
clude financial assets held for trading and financial assets
designated at fair value through income.
finAnciAl liAbilities cArried
At fAir vAlue through income
Financial liabilities carried at fair value through income
include financial liabilities held for trading and financial
liabilities designated at fair value through income.
finAnciAl vAr
Financial Value at Risk (VaR) is the aggregation of market
risk and credit risk taking diversification benefits into
account.
forwArds
The parties to this type of transaction agree to buy or sell
at a specified future date. The price of the underlying
assets is fixed when the deal is struck.
functionAl currency
The functional currency is the prevailing currency in the
primary economic environment where the subsidiary
conducts its ordinary activities.
funds held by others under
reinsurAnce contrActs
Assumed/deposits retAined for
reinsurAnce business ceded
Funds held by others are funds to which the reinsurer is
entitled but which the ceding insurer retains as collateral
for future obligations of the reinsurer. The ceding insurer
shows these amounts as “deposits retained for reinsur
ance business ceded”.
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.
G
going concern reserve
The going concern reserve consists of funds that are
used to cover cost for new business under going concern
assumptions.
goodwill
Difference between the cost of acquisition and the fair
value of the net assets acquired.
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.
H
hedging
The use of special financial contracts, especially derivative
financial instruments, to reduce losses which may arise
as a result of unfavorable movements in rates or prices.
held for sAle
A noncurrent asset is classified as held for sale if its
carrying amount will be recovered principally through
sale rather than through continuing use. On the date a
noncurrent asset meets the criteria as held for sale, it
is measured at the lower of its carrying amount and fair
value less costs to sell.
credit risk
The risk of a loss incurring due to a counterparty’s dete
rioration of credit quality or its default.
current employer service cost
Net expense incurred in connection with a defined benefit
plan less any contributions made by the beneficiary to a
pension fund.
D
deferred Acquisition costs
Expenses of an insurance company which are incurred in
connection with the acquisition of new insurance policies
or the renewal of existing policies. They include commis
sions paid, underwriting expenses and policy issuance
costs.
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.
defined benefit plAns
For defined benefit plans, the participant is granted a
defined benefit by the employer or via an external entity.
In contrast to defined contribution arrangements, the
future cost of a defined benefit to the employer plan is
not known with certainty in advance. To determine the
expense over the period, accounting regulations require
that actuarial calculations are carried out according to a
fixed set of rules.
defined contribution plAns
Defined contribution plans are funded through indepen
dent pension funds or similar organizations. Contributions
fixed in advance (e.g. based on salary) are paid to these
institutions and the beneficiary’s right to benefits exists
against the pension fund. The employer has no obligation
beyond payment of the contributions and does not par
ticipate in the investment success of the contributions.
derivAtive finAnciAl
instruments
Financial contracts, the values of which move in relation
ship to the price of an underlying asset. Derivative finan
cial instruments can be classified in relation to their un
derlying assets (e.g. interest rates, share prices, foreign
currency exchange rates or prices of goods). Important
examples of derivative financial instruments are options,
futures, forwards and swaps.
250
Annual Report 2013
Allianz Group
E
Further Information
245 Joint Advisory Council of the
247 Mandates of the Members of
Allianz Companies
the Supervisory Board
249 Glossary
253 Index
246 International Advisory Board
248 Mandates of the Members of
the Board of Management
heldtomAturity investments
Heldtomaturity investments comprise debt securities
held with the intent and ability that they will be heldto
maturity. They are valued at amortized cost.
I
iAs
International Accounting Standards.
ifrs
International Financial Reporting Standards. Since 2002,
the designation ifrs applies to the overall framework of
all standards approved by the International Accounting
Standards Board. Already approved standards will con
tinue to be cited as International Accounting Standards
(iAs).
ifrs frAmework
The framework for International Financial Reporting
Standards (ifrs) which sets out the concepts that underlie
the preparation and presentation of financial statements
for external users.
income from finAnciAl Assets
And liAbilities cArried At fAir
vAlue through income (net)
Income from financial assets and liabilities carried at fair
value through income (net) includes all realized and
unrealized gains and losses including interest and divi
dend income from financial assets and financial liabilities
carried at fair value through income, the income (net)
from financial liabilities for puttable equity instruments
and the foreign currency gains and losses (net).
issued cApitAl And cApitAl
reserves
This heading comprises the capital stock, the premium
received on the issue of shares, and amounts allocated
when option rights are exercised.
J
Joint venture
A joint venture is a joint arrangement whereby the parties
that have joint control of the arrangement have rights to
the net assets of the arrangement.
L
loss rAtio
Represents claims and insurance benefits incurred (net)
divided by premiums earned (net).
N
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.
O
options
Derivative financial instruments where the holder is
entitled – but not obliged – to buy (call option) or sell
(put option) the underlying asset at a predetermined
price sometime in the future. The grantor (writer) of the
option, on the other hand, is obliged to transfer or buy
the asset and receives a premium for granting the option
to the purchaser.
otc derivAtives
Derivative financial instruments which are not stan
dardized and not traded on an exchange but are traded
directly between two counterparties via overthecounter
(otc) transactions.
P
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.
R
reinsurAnce
An insurance company transfers part of its insurance risk
assumed to another insurance company.
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.
repurchAse And reverse
repurchAse Agreements
A repurchase (repo) transaction involves the sale of
securities by the Group to a counterparty, subject to the
simultaneous agreement to repurchase these securities
at a certain later date, at an agreed price. The securities
concerned are retained in the Group’s balance sheet for
the entire lifetime of the transaction, and are valued in
accordance with the accounting principles for financial
assets carried at fair value through income or investment
securities, respectively. The proceeds of the sale are
reported in liabilities to banks or to customers, as appro
priate. A reverse repo transaction involves the purchase
of securities with the simultaneous obligation to sell
these securities at a future date, at an agreed price. Such
transactions are reported in loans and advances to banks,
or loans and advances to customers, respectively. Interest
income from reverse repos and interest expenses from
repos are accrued evenly over the lifetime of the trans
actions and reported under interest and similar income
or interest expenses.
reserves for loss And
loss AdJustment expenses
Reserves are established for the payment of losses and
loss adjustment expenses (lAe) on claims which have
occurred but are not yet settled.
reserves for premium refunds
That part of the surplus which will be distributed to policy
holders in the future. This refund of premiums is made
on the basis of statutory, contractual, or company bylaw
obligations, or voluntary undertaking.
retAined eArnings
In addition to the reserve required by law in the financial
statements of the Group parent company, this item con
sists mainly of the undistributed profits of Group entities
and amounts transferred from consolidated net income.
risk Appetite
The level of risk that an organization is prepared to ac
cept, before action is deemed necessary to reduce it. Risk
appetite is therefore clearly and comprehensively defined
by using target and minimum risk indicators, (quantita
tive) limit systems, or adequate policies, standards and
guidelines to determine the “boundaries” of the Group’s
business operations.
Annual Report 2013
Allianz Group
251
S
Y
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.
segment reporting
Financial information based on the consolidated financial
statements, reported by business segments (Property
Casualty, Life/Health, Asset Management and Corporate
and Other) as well as by reportable segments.
subordinAted liAbilities
Liabilities which, in the event of liquidation or bankruptcy,
are not settled until after all other liabilities.
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).
U
uneArned premiums
Premiums written attributable to income of future years.
The amount is calculated separately for each policy and
for every day that the premium still has to cover.
us gAAp
Generally Accepted Accounting Principles in the United
States of America.
V
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.
252
Annual Report 2013
Allianz Group
E
Further Information
245 Joint Advisory Council of the
247 Mandates of the Members of
Allianz Companies
the Supervisory Board
249 Glossary
253 Index
246 International Advisory Board
248 Mandates of the Members of
the Board of Management
Index
A
Accounting policies 31, 70
AGCS 72f.
Allianz Worldwide Partners 54, 57,
70, 122
Alternative Investments 50, 85f.
Analysts 21
Asia-Pacific 72, 79
Asset Management 50f., 55, 65, 67f.,
82ff., 89, 91, 98
Audit Committee 14, 29
Australia 72
B
Banking 85f.
Basic earnings per share 23, 69
Belgium/Luxembourg 79
Board of Management 18f., 27f.
Board of Management
Remuneration 37ff.
Board of Management
committees 27, 33
Brand 56ff., 59
Business environment 64f.
Business operations 49ff.
C
Cash flows 103, 108ff.
Central and Eastern Europe 72, 79
Changes 28, 31, 44, 53f., 70
Climate change 60ff., 121
Combined ratio 71ff.
Conglomerate solvency 66f., 92f.
Corporate and Other 50, 67f., 85f.,
91, 98
Corporate governance and declara-
tion 13, 32f.
Corporate governance report 27ff.
Statement on Corporate Management
pursuant to § 289 a of the German
Commercial Code 32f.
Corporate Social Responsibility 59ff.
Cost-income ratio 82, 84
Credit insurance 72f., 112ff.
Crop business 53, 67, 71ff., 87, 103
Customers 52ff., 59f.
D
Demographic change 121
Digitalization 122
Directors’ dealings 31
Distribution 35f., 49ff.
Diversity 30, 61f.
Dividend 21ff., 69, 87, 91
E
Economic environment 64
Employees 61f.
Employee stock purchase plan 13, 34
Executive remuneration principles 37
Executive summary 66ff.
F
Financial calendar Cover
France 53, 72f., 79
Funding 99ff.
G
General Meeting 31, 69
Germany 52, 72f., 79
Growth Markets 56, 59
H
M
T
Management’s assessment of 2013
Takeover-related statements and
results 67
Management’s overall assessment of
the current economic situation 91
explanations 34ff.
Talent management 62
Third-party assets under
management 83
Three-year bonus 37ff.
Total assets under management 82f.
U
United Kingdom 72
United States 21, 53f., 64f., 66, 71ff.,
79f., 83, 88
Market position 51ff., 56, 121
Markets 51ff.
Media expenses 59
Microinsurance 56, 61, 121
Multi-year review Cover
N
Net Promoter Score (NPS) 58, 60
Nomination Committee 14f., 29
O
Off-balance sheet arrangements 98
Outlook 87ff.
P
Performance fees 84
Personnel Committee 13ff., 29
Products and services 49ff.
Property-Casualty 49, 67f., 71ff., 87, 90,
96, 115
Publication date Cover
Holding & Treasury 50, 85f., 91
R
I
Insurance markets 49ff.
Intangible assets 68, 86
Internal controls over financial reporting
(ICOFR) 123f.
International Executive Committee 20
Investment result 67ff., 74, 78ff., 86,
87ff., 95f.
Investments 60, 94f.
Investor Relations 23
Investors 21f., 50
Italy 52f., 72f., 79
K
Key financial indicator/Key performance
indicator Cover, 58
L
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.,
63ff., 66ff., 79, 87, 90, 105, 121
Rating 57, 87, 95, 105ff.
Regulatory changes 53, 57, 67, 72f.,
78f., 87, 105ff.
Reinsurance PC 73
Remuneration of the Supervisory
Board 44ff.
Reportable segments 49, 76f., 81
Reserves 96f.
Results 2013 actual versus prior year
outlook for 2013 87
Risk Committee 14f., 27, 29, 121
S
Share 21ff.
Share price 22
Shareholders’ equity 92
Shareholder structure 22
Solvency II 31, 57, 64, 105f., 108f.,
121f., 124
Sovereign debt crisis 64, 66, 88ff., 105
Spain 72, 79
Special purpose entities (SPEs) 34, 98
Standing Committee 13, 15, 28f.
Strategy 56ff.
Subsequent events 70
Supervisory Board 17, 28ff.
Sustainable development 59ff.
Switzerland 72, 79
Annual Report 2013
Allianz Group
253
Financial calendar
Important dates for shareholders and analysts 1
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
1
The German Securities Trading Act (“Wertpapierhandelsgesetz”) obliges issuers to announce immediately any information which may have a substantial price impact.
Therefore we cannot exclude that we have to announce key figures related to quarterly and fiscal year results ahead of the dates mentioned above. As we can never
rule out changes of dates, we recommend checking them on the internet at www.allianz.com/financialcalendar.
Allianz SE – Königinstrasse 28 – 80802 Munich – Germany – Telephone +49. 89. 3800-0 – info@allianz.com – www.allianz.com
Annual Report on the internet: www.allianz.com/annualreport – Design / Concept: hw.design GmbH
Photography: Andreas Pohlmann (Board of Management, Chairman of the Supervisory Board) – Date of publication: 14 March 2014
This is a translation of the German Annual Report of Allianz Group. In case of any divergences, the German original is legally binding.