Interim / Quarterly Report • Aug 5, 2020
Interim / Quarterly Report
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FIRST HALF-YEAR 2020
INTERIM REPORT 2020
ALLIANZ GROUP
within this report are also linked.
The condensed consolidated interim financial statements are presented in millions of Euros (€ mn) unless otherwise stated. Due to rounding, numbers presented may not add up precisely to the totals provided and percentages may not precisely reflect the absolute figures.
For further information on the definition of our Alternative Performance Measures and their components, as well as the basis of calculation adopted, please refer to www.allianz.com/results.
Key figures Allianz Group1
| Six months ended 30 June | 2020 | 2019 | Delta | |
|---|---|---|---|---|
| Total revenues2 | € mn | 73,495 | 73,479 | 16 |
| Operating profit3 | € mn | 4,869 | 6,121 | (1,252) |
| Net income3 | € mn | 3,101 | 4,316 | (1,215) |
| thereof: attributable to shareholders | € mn | 2,927 | 4,109 | (1,181) |
| Solvency II capitalization ratio4 | % | 187 | 212 | (26) %-p |
| Return on equity5 | % | 10.0 | 13.6 | (3.5) %-p |
| Earnings per share | € | 7.07 | 9.76 | (2.69) |
| Diluted earnings per share | € | 6.94 | 9.75 | (2.80) |
The first half-year of 2020 was marked by the COVID-19 pandemic. What was set to become a year of unspectacular growth is now expected to see a very severe recession, as the COVID-19 outbreak forced governments around the world to put the economy on an unprecedented pause in order to fight the pandemic. Although the trough of the crisis might already be behind us, the global economy is still operating at only 70 – 80% capacity, reflecting the need for targeted lockdowns to combat new outbreaks of the virus and prolonged sanitary restrictions. It will take time before we can witness a return to business as usual.
Governments have come to the rescue with huge fiscal support packages, amounting to more than € 9 tn at the global level (around 12% of global GDP). Central banks, too, have responded quickly and boldly to contain the pandemic-related crisis, using the whole toolbox of monetary instruments (more than € 7 tn or close to 10% of global GDP). These expansionary fiscal and monetary policy measures have left their mark on financial markets, in particular equity markets: After initially falling by around 30% in reaction to COVID-19, equity markets started to recover as early as March and recouped most of their losses, leading to a decoupling between the real economy and equity market performance.
The insurance industry is affected by the COVID-19 outbreak in three ways: First, claims, which will evolve over a much longer time horizon, as compared to property related catastrophes such as hurricanes, while the reduced claims frequency observed during the lockdown period has a positive effect. Second, in the capital markets, falling interest rates,wideningspreads,andvolatilestockmarkets willweighon profit and loss accounts and balance sheets of insurers. Third, there will be second-round effects of the recession, as new business was virtually brought to a halt during lockdowns and will recover only gradually. On top of these market challenges, there is the operational challenge of business continuity: maintaining operations and serving clients while protecting employees.
The global asset management industry ended 2019 on a high note, only to face a new chapter of economic turmoil when the COVID-19 pandemic broke out in early 2020. As already described, the volatility seen in stock markets reached new heights in March 2020, as investors sold their positions in a wave of uncertainty about consequences of the pandemic. Central banks around the world have been implementing stimulus packages in an attempt to lessen the impact of the pandemic on the economy. Thus, though volatile, there was a turnaround in the stock markets with the MSCI World listing not even 10% below end of 2019 as per end of June 2020. For fixed-income indices, U.S. interest rates have been a shock absorber. In light of progressive market recovery, long-term net inflows were starting to stabilize in May 2020, yet with a mixed picture across asset classes: Equity fund outflows were worsening in May 2020. Fixed-income funds on the other hand saw an improvement to a robust level of growth.
Our total revenues decreased by 1.5% on an internal basis6 , compared to the same period of the previous year, driven by our Life/Health business segment. Our Asset Management business segment recorded volume-driven revenue growth, while our revenues from our Property-Casualty business segment increased very slightly.
COVID-19 severely impacted the operating profit from our insurance operations. Our Property-Casualty business segment's operating profit was burdened by a much lower underwriting result, due to COVID-19-related losses as well as higher claims from natural catastrophes. In our Life/Health business segment we recorded a lower operating profit. This decline was mainly due to a lower investment margin – a result of the financial market turmoil as well as a change in the amortization period for deferred acquisition cost, which the United States had introduced in the second quarter of 2019, resulting in a favorable effect that year. Despite difficult markets, our Asset Management business segment's operating profit grew due to higher average assets under management. The operating result of our Corporate and Other business segment worsened, driven by a lower operating investment result and a contribution to a COVID-19 solidarity fund.
Our operating investment result decreased by € 2,838 mn to € 8,827 mn, compared to the previous year's period. This decrease was due to significantly higher impairments and a lower trading result, partly offset by higher realizations on debt securities.
Our non-operating result worsened by € 284 mn to a loss of € 745 mn. This was partly due to higher investments in productivity and efficiency. In addition, COVID-19-related market impacts reduced our non-operating investment result.
1_For further information on Allianz Group figures, please refer to note 5 to the condensed consolidated interim financial statements.
2_Total revenues comprise Property-Casualty total revenues (gross premiums written and fee and commission income), Life/Health statutory gross premiums written, operating revenues in Asset Management, and total revenues in Corporate and Other (Banking).
3_The Allianz Group uses operating profit and net income as key financial indicators to assess the performance of its business segments and of the Group as a whole.
4_2019 figures as of 31 December 2019. 2020 figures as of 30 June 2020, and exclude the application of transitional measures for technical provisions. 5_Represents the (annualized) ratio of net income attributable to shareholders to the average shareholders' equity excluding
unrealized gains/losses on bonds, net of shadow accounting, at the beginning of the period and at the end of the period. Annualized figures are not a forecast for full year numbers. For 2019, the return on equity for the full year is shown.
6_Internal total revenue growth excludes the effects of foreign currency translation as well as acquisitions and disposals. For a reconciliation of nominal total revenue growth to internal total revenue growth for each of our business segments and the Allianz Group as a whole, please refer to the chapter Reconciliations.
Income taxes decreased by € 321 mn to € 1,023 mn, due to lower income before taxes. The effective tax rate increased to 24.8% (23.7%), in particular as a result of a lower positive impact from DTA recognition (+0.7percentage points) and a higher negative impact from local taxes (+0.3percentage points).
The decrease in net income was largely driven by the drop in operating profit.
Our shareholders' equity1 decreased by € 1.9 bn to € 72.1 bn, compared to 31 December 2019, driven by a dividend payout of € 4.0 bn and € 750 mn for the purchase of 4.9 million own shares as part of the latest share buy-back program announced in March 20202 This was partly offset by a net income attributable to shareholders of € 2.9 bn. Over the same period, our Solvency II capitalization ratio decreased to 187% 3 .
For a more detailed description of the results generated by our business segments – Property-Casualty insurance operations, Life/Health insurance operations, Asset Management, and Corporate and Other – please consult the respective chapters on the following pages.
Group Risk has a central role within our risk governance framework: It is both the key Group function to support the Board of Management in fulfilling its risk oversight responsibilities, and also Allianz SE's Risk Management function. This also includes the ongoing assessment of risks in the context of pandemics such as COVID-19. For assessing current developments with potentially significant effects on the Allianz Group, such as COVID-19, it is particularly important to perform specific analyses. Therefore, our risk management processes include measures such as risk assessments, scenario analyses, solvency projections, and an increased reporting frequency if and as needed, making them suitable for coping with adverse developments such as COVID-19.
In our Life/Health insurance business, the COVID-19 pandemic could affect, amongst other things, the frequency and severity of diseases, mortality, and inflation. In our Property-Casualty insurance business, we continue to expect our Global lines to be hit the hardest – Allianz Partners via travel insurance, Euler Hermes via credit insurance, and AGCS in the entertainment or business interruption line of business – since the ongoing COVID-19 pandemic still leadsto the cancelation or postponement of big events such as trade fairs or sporting events, or has the potential to increase insolvencies in case the termination of state aid is not accompanied by increasing economic activity. Decreasing claims frequency in motor business especially observed during the lockdown period has an offsetting effect, provided we do not face significant premium refunds.
In addition, there is the risk that political pressure to retroactively extend insurance coverage may lead to legislative developments with adverse impacts on the insurance business.
For underwriting risk, emerging events such as pandemics are analyzed and taken into account as part of the specific analyses or regular model reviews carried out by our experts.
The COVID-19 pandemic continues to have an impact on the Group's market risk, as it is causing significant price impacts on the financial market especially for equities. It is also expected to continue having an impact on credit risk, in particular that associated with loans granted, investments in fixed-income securities, and reinsurance as well as credit spread risk – mainly when these are associated with investments in fixed-income securities. Nevertheless, due to the high quality of our fixed-income portfolio, which is characterized by highly rated investments, the impact on credit risk should remain limited. The resulting impact on our financial risk is estimated based on specific analyses.
In the current market environment, which is under the influence of the COVID-19 pandemic, Allianz's liquidity situation is affected in particular by the economic and solvency situation of our related entities as well as the political and regulatory requirements regarding corporate capital management activities, such as the general ability to pay dividends. We are carefully monitoring this development to ensure that Allianz SE in its role as the Group's holding company has sufficient resources to support solvency capital needs within the Group as well as its own operative liquidity needs. We still expect to retain a satisfactory liquidity position, as we define our risk appetite based on stress scenarios, and in Allianz SE's liquidity risk reporting we consider specific stress scenarios. For example, a dedicated scenario simultaneously assumes disturbances in the financial market as well as potential recapitalization needs of related undertakings. Furthermore, we have been in ongoing contact with our entities to get a timely and comprehensive picture on COVID-19-related impacts on liquidity and developments that could potentially have an adverse effect.
The Group's operational risks associated with the COVID-19 pandemic mainly result from possible operational delays due to public measures to restrict social contacts, as well as from employee health problems, costs of evoking the business continuity plans, and delays or failures in the provision of external services. The advanced digitalization of our operations has enhanced the Group's ability to deal with the consequences of the crisis. In particular, it has helped us to shift the workforce to "Work from Home"-mode without major challenges and to ensure that all business processes continued without interruptions.
In the first six months of 2020, our capitalization decreased from 212% as of 31 December 2019, to 187% 3 as of 30 June 2020. The drop was mainly driven by the impact the pandemic and respective policy measures had on the financial markets. Key drivers have been declining interest rates in combination with falling equity prices and increased credit spreads. While equity markets have recovered most of their losses in the second quarter, especially interest rates still remain at very low levels.
1_For further information on shareholders' equity, please refer to the Balance Sheet Review.
2_For further information on the share buy-back program, please refer to note 18 to the condensed consolidated interim financial statements.
3_Including the application of transitional measures for technical provisions, the Solvency II capitalization ratio amounted to 217 % as of 30 June 2020. For further information, please refer to the Balance Sheet Review.
We are carefully monitoring the development of the COVID-19 crisis and are also managing our portfolios with great diligence to ensure that the Group and its entities continue to have sufficient resources to back their solvency capital needs in line with our dynamic own-risk and solvency management processes. Based on stress tests conducted, there is currently no indication of Allianz Group not being compliant with its Solvency Capital Requirement (SCR) or minimum consolidated Group Solvency Capital Requirement. This statement takes into account the known impacts of the COVID-19 pandemic as well as expected developments, based on the conditions that existed as of 30 June 2020.
Allianz has expanded its security and business continuity management measures to ensure the safety of employees and their families, while continuing to operate as smoothly as possible for the sake of our customers.
Our statements on risks associated with the COVID-19 pandemic are based on our assessments as of end of June 2020. The overall impacts associated with the COVID-19 pandemic still cannot be predicted with any certainty, due to the fact that the crisis is still ongoing.
For information on any events occurring after the balance sheet date, please refer to note 34 to the condensed consolidated interim financial statements.
In the course of the first half-year of 2020, there were some minor reallocations between the reportable segments.
The Allianz Group's strategy is described in the Risk and Opportunity Report that forms part of our Annual Report 2019. There have been no material changes to our Group strategy.
For an overview of the products and services offered by the Allianz Group as well as of sales channels, please refer to the Business Operations chapter in our Annual Report 2019.
The Allianz Group operates and manages its activities through the four business segments mentioned above. For further information, please refer to note 5 to the condensed consolidated interim financial statements or to the Business Operations chapter in our Annual Report 2019.
Key figures Property-Casualty12345
| Six months ended 30 June | 2020 | 2019 | Delta | |
|---|---|---|---|---|
| Total revenues2 | € mn | 33,785 | 32,916 | 869 |
| Operating profit | € mn | 2,175 | 2,838 | (663) |
| Net income | € mn | 926 | 2,079 | (1,153) |
| Loss ratio3 | % | 70.1 | 66.4 | 3.7 %-p |
| Expense ratio4 | % | 26.5 | 27.6 | (1.0) %-p |
| Combined ratio5 | % | 96.7 | 94.0 | 2.7 %-p |
Operating profit
| € mn | |||
|---|---|---|---|
| Six months ended 30 June | 2020 | 2019 | Delta |
| Underwriting result | 717 | 1,346 | (629) |
| Operating investment income (net) | 1,287 | 1,454 | (167) |
| Other result1 | 171 | 37 | 134 |
| Operating profit | 2,175 | 2,838 | (663) |
1_Consists of fee and commission income/expenses and other income/expenses.
On a nominal basis, we recorded a 2.6% increase in total revenues compared to the first six months of the previous year.
This includes unfavorable foreign currency translation effects of € 171 mn7 and positive (de)consolidation effects of € 956 mn. On an internal basis, our total revenues went up 0.3%, driven by a positive price effect of 3.8% and a negative volume effect of 3.5%.
The following operations contributed positively to internal growth:
AGCS: Total revenues increased to € 5,532 mn – up 12.1% on an internal basis. Much of this was a result of positive price effects across our Property, Liability, and Financial Lines lines of business.
Asia-Pacific: Total revenues amounted to € 660 mn, corresponding to 14.9% internal growth. It was mainly due to favorable volume effects in China through our partnership with JD.com.
Germany: Total revenues grew to € 6,770 mn, an increase of 1.1% on an internal basis. It was the result of positive price effects in our motor and houseowner insurance business.
The following operations weighed on internal growth:
Allianz Partners: Total revenues decreased to € 3,261 mn, a 10.7% drop on an internal basis. Much of this was a result of COVID-19-related negative volume effects in our travel insurance business, particularly in the U.S.
Italy: Total revenues fell to € 1,835 mn. This decrease of 4.9% on an internal basis was mainly due to unfavorable volume and price effects in our motor insurance business.
Allianz Direct: Total revenues amounted to € 597 mn – a decline of 11.5% on an internal basis. This was based on negative volume effects in our motor insurance business.
Driven largely by the deterioration of our underwriting result, our operating profit decreased compared to the first six months of the previous year. A decline in our operating investment income added to that outcome.
The significant decrease in our underwriting result was driven by higher claims from natural catastrophes and an overall negative impact of COVID-19 that amounted to € 0.8 bn. Strong improvements on the expense side stood in contrast to a lower contribution from run-off, compared to the first six months of the previous year. Overall, our combined ratio worsened by 2.7 percentage points to 96.7%.
| € mn | |||
|---|---|---|---|
| Six months ended 30 June | 2020 | 2019 | Delta |
| Premiums earned (net) | 26,030 | 25,179 | 850 |
| Accident year claims | (18,706) | (17,468) | (1,239) |
| Previous year claims (run-off) | 456 | 740 | (284) |
| Claims and insurance benefits incurred (net) | (18,250) | (16,727) | (1,523) |
| Acquisition and administrative expenses (net) |
(6,909) | (6,939) | 31 |
| Change in reserves for insurance and investment contracts (net) (without expenses for premium refunds)1 |
(154) | (167) | 13 |
| Underwriting result | 717 | 1,346 | (629) |
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 25 to the condensed consolidated interim financial statements.
Our accident year loss ratio8 stood at 71.9% – a 2.5 percentage point deterioration compared to the first half of the previous year, due to COVID-19-related losses and higher losses from natural catastrophes. This translates into a negative impact on our combined ratio of 0.8 percentage points: from 1.5% to 2.3%.
Leaving aside losses from natural catastrophes, our accident year loss ratio was 69.6%, an increase by 1.7 percentage points in comparison to previous year's ratio.
1_For further information on Property-Casualty figures, please refer to note 5 to the condensed consolidated interim financial statements.
2_Total revenues in Property-Casualty also include fee and commission income.
3_Represents claims and insurance benefits incurred (net) divided by premiums earned (net).
4_Represents acquisition and administrative expenses (net) divided by premiums earned (net).
5_Represents the total of acquisition and administrative expenses (net) and claims and insurance benefits incurred (net) divided by premiums earned (net).
6_We comment on the development of our total revenues on an internal basis, which means figures have been adjusted for foreign currency translation and (de-)consolidation effects in order to provide more comparable information. 7_Based on the average exchange rates in 2020 compared to 2019.
8_Represents claims and insurance benefits incurred (net) less previous year claims (run-off), divided by premiums earned (net).
The following operations contributed positively to the development of our accident year loss ratio:
Italy: 0.5 percentage points. This was driven by a lower claims frequency in our retail insurance business as a consequence of the lockdown.
Allianz Direct: 0.4 percentage points. The improvement resulted from a significant reduction in claims frequency in our motor insurance business across all markets, also due to COVID-19. The biggest impact stemmed from Italy.
The following operations weighed on the development of our accident year loss ratio:
AGCS: 2.1 percentage points. This deterioration resulted from an increase in natural catastrophes and a severe impact of COVID-19, mostly on the Entertainment line of business.
Reinsurance: 1.5 percentage points. This increase was almost exclusively due to the negative effects from the COVID-19 pandemic.
Our positive run-off result amounted to € 456 mn, compared to € 740 mn in the first half-year of 2019. This translates into a run-off ratio of 1.8%, after the 2.9% we saw in the prior year. Most of our operations contributed positively to our run-off result.
Total expenses amounted to € 6,909 mn in the first six months of 2020, compared to € 6,939 mn in the same period of 2019. Our expense ratio improved significantly by 1.0 percentage points, benefiting from our acquisitions in the United Kingdom and a positive cost development at AGCS.
| Six months ended 30 June | 2020 | 2019 | Delta |
|---|---|---|---|
| Interest and similar income (net of interest expenses) |
1,517 | 1,665 | (149) |
| Operating income from financial assets and liabilities carried at fair value through income (net) |
(59) | (20) | (40) |
| Operating realized gains (net) | 58 | 117 | (59) |
| Operating impairments of investments (net) | (117) | (19) | (99) |
| Investment expenses | (201) | (192) | (10) |
| Expenses for premiums refunds (net)1 | 90 | (98) | 188 |
| Operating investment income (net)2 | 1,287 | 1,454 | (167) |
1_Refers to policyholder participation, mainly from APR business (accident insurance with premium refunds), reported within "change in reserves for insurance and investment contracts (net)". For further information, please refer to note 25 to the condensed consolidated interim financial statements.
2_The operating investment income (net) of our Property-Casualty business segment consists of the operating investment result – as shown in note 5 to the condensed consolidated interim financial statements – and expenses for premium refunds (net) (policyholder participation).
Our operating investment income (net) decreased in the first half-year of 2020. Almost all line items contributed to that development, which was particularly driven by turbulent financial markets.
| Delta |
|---|
| (140) |
| 148 |
| 124 |
| 2 |
| 134 |
Our other result benefited from the sale of an owner-occupied property in Germany.
Our net income decreased strongly in the first six months of 2020. Beside the decline in operating profit, a deterioration of our non-operating investment result – which was due to the aforementioned turbulent financial markets – as well as an increase in our expenditure on efficiency measures contributed to this outcome. The overall effect was only partially offset by lower income taxes.
Key figures Life/Health1
| Six months ended 30 June | 2020 | 2019 | Delta | |
|---|---|---|---|---|
| Statutory premiums2 | € mn | 36,356 | 37,399 | (1,043) |
| Operating profit | € mn | 1,810 | 2,327 | (517) |
| Net income | € mn | 1,802 | 1,788 | 14 |
| Return on equity3 | % | 12.3 | 12.7 | (0.4) %-p |
On a nominal basis, statutory premiums decreased by 2.8% in the first half of 2020, affected by social distancing due to COVID-19. Favorable foreign currency translation effects amounted to € 177 mn and positive (de-)consolidation effects stood at € 59 mn. On an internal basis4 , statutory premiums declined by € 1,280 mn – or 3.4% – to € 36,356 mn.
Statutory premiums in the German life business increased to € 13,782 mn. This 1.6% growth on an internal basis was mainly driven by higher sales in our business with capital-efficient products. In the German health business, statutory premiums reached € 1,864 mn, up 4.9% on an internal basis. This was largely attributable to premium adjustments in the comprehensive health care coverage and from the acquisition of new customers in supplementary health care coverage.
In the United States, statutory premiums declined to € 4,863 mn. The decrease – 18.4% on an internal basis – was mostly caused by weakened sales of fixed index annuity products, with the effect partly offset by higher sales of non-traditional variable annuity products.
In Italy, statutory premiums grew to € 5,213 mn, up 7.8% on an internal basis. This resulted mainly from stronger sales in our business with unit-linked and capital-efficient products.
In France, statutory premiums decreased to € 3,207 mn. Most of this drop – 26.4% on an internal basis – was due to lower sales of our guaranteed savings & annuities products compared to a high base in the first half of 2019.
In the Asia-Pacific region, statutory premiums went up to € 2,948 mn, translating into an 8.2% rise on an internal basis. It was mainly driven by a sales increase in unit-linked products in Indonesia and Taiwan.
Our PVNBP decreased by € 3,292 mn to € 31,269 mn, under the impact of the pandemic. Most of the drop was a result of the lower sales of capital-efficient products in the German life business and in the United States. Another contributing factor was the decline in sales of guaranteed savings & annuities products in France. The negative effects were partly offset by increased volumes from protection & health products in the German health business as well as in the United States, and from unit-linked products in Italy.
| % | |||
|---|---|---|---|
| Six months ended 30 June | 2020 | 2019 | Delta |
| Guaranteed savings & annuities | 12.2 | 20.3 | (8.1) |
| Protection & health | 20.3 | 16.8 | 3.5 |
| Unit-linked without guarantee | 22.3 | 18.7 | 3.6 |
| Capital-efficient products | 45.2 | 44.1 | 1.0 |
| Total | 100.0 | 100.0 | - |
| € mn | |||
|---|---|---|---|
| Six months ended 30 June | 2020 | 2019 | Delta |
| Loadings and fees | 3,257 | 3,266 | (9) |
| Investment margin | 1,602 | 1,729 | (127) |
| Expenses | (3,674) | (3,602) | (72) |
| Technical margin | 688 | 616 | 72 |
| Impact of changes in DAC | (63) | 319 | (382) |
| Operating profit | 1,810 | 2,327 | (517) |
Our operating profit decreased, which was mainly due to the fact that in the second quarter of 2019, the amortization period for deferred acquisition costs had been extended in the United States, resulting in a favorable effect in that year. Further contributing factors included a COVID-19-induced decrease in the investment margin – driven by higher impairments in the first quarter of 2020 and increased hedging expenses in our U.S. variable-annuities business in the first half of 2020 – as well as the disposal of Allianz Popular S.L. in Spain. The overall COVID-19-related negative impact on the operating profit amounted to € 0.4 bn in the first half of 2020.
1_For further information on Life/Health figures, please refer to note 5 to the condensed consolidated interim financial statements.
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.
3_Represents the annualized ratio of net income to the average total equity, excluding unrealized gains/losses on bonds, net of shadow accounting, at the beginning and at the end of the period. Annualized figures are not a forecast for full year numbers. For 2019, the return on equity for the full year is shown.
4_Our comments in the following section on the development of our statutory gross premiums written refer to figures determined "on an internal basis", i.e. adjusted for foreign currency translation and (de-)consolidation effects, in order to provide more comparable information.
5_PVNBP before non-controlling interests.
6_The purpose of the Life/Health operating profit sources analysis is to explain movements in IFRS results by analyzing underlying drivers of performance on a Life/Health business segment consolidated basis.
7_Prior year figures changed in order to reflect the refinement of profit source reporting in the USA.
€ mn
| Six months ended 30 June | 2020 | 2019 | Delta |
|---|---|---|---|
| Loadings from premiums | 2,094 | 2,119 | (25) |
| Loadings from reserves | 818 | 793 | 25 |
| Unit-linked management fees | 346 | 354 | (8) |
| Loadings and fees | 3,257 | 3,266 | (9) |
| Loadings from premiums as % of statutory premiums |
5.8 | 5.7 | 0.1 |
| Loadings from reserves as % of average reserves1,2 |
0.1 | 0.1 | - |
| Unit-linked management fees as % of average unit-linked reserves2,3 |
0.2 | 0.2 | - |
1_Aggregate policy reserves and unit-linked reserves.
2_Yields are pro rata.
3_Unit-linked management fees, excluding asset management fees, divided by unit-linked reserves.
Loadings from premiums went down, mostly due to lower sales of single-premium capital-efficient products in the German life business in the second quarter of 2020. Loadings from reserves rose, largely driven by higher reserve volumes mainly in Germany and in the United States, and were stable in relation to reserves. Unit-linked management fees decreased, which was primarily caused by the disposal of Allianz Popular S.L. in Spain. This was partly compensated by an increase in Italy, predominantly attributable to a rise in the assets under management.
| € mn | |
|---|---|
| Six months ended 30 June | 2020 | 2019 | Delta |
|---|---|---|---|
| Interest and similar income | 9,130 | 9,283 | (153) |
| Operating income from financial assets and liabilities carried at fair value through income (net) |
(2,159) | (351) | (1,808) |
| Operating realized gains/losses (net) | 4,791 | 2,081 | 2,710 |
| Interest expenses | (52) | (56) | 3 |
| Operating impairments of investments (net) | (3,557) | (539) | (3,017) |
| Investment expenses | (787) | (697) | (90) |
| Other1 | (205) | 233 | (437) |
| Technical interest | (4,588) | (4,498) | (90) |
| Policyholder participation | (970) | (3,727) | 2,756 |
| Investment margin | 1,602 | 1,729 | (127) |
| Investment margin in basis points2,3 | 32.8 | 37.5 | (4.8) |
1_"Other" comprises the delta of out-of-scope entities, on the one hand, which are added here with their respective operating profit, and different line item definitions compared to the financial statements, such as interest paid on deposits for reinsurance, fee and commission income, and expenses excluding unit-linked management fees, on the other hand.
2_Investment margin divided by the average of current end-of-period and previous end-of-period aggregate policy reserves.
3_Yields are pro rata.
Our investment margin decreased. In the United States, we saw increased hedging expenses, which were due to market turbulences in our variable-annuities business. In most countries of the Eurozone, we recorded higher impairments in the first quarter of 2020, mostly for equities, driven by the market turmoil caused by the COVID-19 pandemic. This was partly offset by higher realizations and lower policyholder participations.
| € mn | |||
|---|---|---|---|
| Six months ended 30 June | 2020 | 2019 | Delta |
| Acquisition expenses and commissions | (2,722) | (2,681) | (41) |
| Administrative and other expenses | (952) | (922) | (30) |
| Expenses | (3,674) | (3,602) | (72) |
| Acquisition expenses and commissions as % of PVNBP1 |
(8.7) | (7.8) | (0.9) |
| Administrative and other expenses as % of average reserves2,3 |
(0.2) | (0.2) | - |
| 1_PVNBP before non-controlling interests. |
2_Aggregate policy reserves and unit-linked reserves.
3_Yields are pro rata.
Our acquisition expenses and commissions increased. Much of this was due to higher commissions in France and to a shift from administrative and other expenses in Thailand. In addition, stronger unit-linked sales in Indonesia and Italy, as well as higher protection & health sales in Turkey also contributed to the increase. The positive effects were partly offset by a decline in our product sales for fixed index annuities in the United States.
Administrative and other expenses went up, largely due to higher IT and sponsorship expenses in Italy and increased social security contributions as well as IT expenses in France.
Our technical margin improved, mainly due to lower claims experience and growth in the Asia-Pacific region. A release of claim reserves as well as a large claim in the first half of 2019 in France and a stronger lapse result in Italy also helped the upswing. Negative drivers included the deconsolidation of Allianz Popular S.L. in Spain, reduced disability margin in Switzerland, and a worsened risk margin in the German health business due to a higher policyholder participation.
4_The technical margin comprises risk result (risk premiums less benefits in excess of reserves less policyholder participation), lapse result (surrender charges and commission clawbacks) and reinsurance result.
1_Loadings and fees include premium and reserve based fees, unit-linked management fees, and policyholder participation in expenses.
2_The investment margin is defined as IFRS investment income net of expenses, less interest credited to IFRS reserves and policyholder participation (including policyholder participation beyond contractual and regulatory requirements mainly for the German life business).
3_Expenses include acquisition expenses and commissions (excluding commission clawbacks, which are allocated to the technical margin) as well as administrative and other expenses.
| € mn | |||
|---|---|---|---|
| Six months ended 30 June | 2020 | 2019 | Delta |
| Capitalization of DAC | 831 | 881 | (50) |
| Amortization, unlocking and true-up of DAC | (894) | (563) | (332) |
| Impact of change in DAC | (63) | 319 | (382) |
The impact of change in DAC turned negative. This was mainly caused by a change in the U.S. DAC amortization period in the second quarter of 2019, leading to a favorable effect in that year, and by true-ups due to market turmoil in the traditional variable-annuities business in the United States, as well as in the unit-linked business in Taiwan. The lower capitalization was largely driven by the weakened sales of fixed index annuity products in the United States.
| € mn | |||
|---|---|---|---|
| Six months ended 30 June | 2020 | 2019 | Delta |
| Guaranteed savings & annuities | 783 | 1,127 | (344) |
| Protection & health | 443 | 473 | (31) |
| Unit-linked without guarantee | 220 | 241 | (20) |
| Capital-efficient products | 364 | 486 | (122) |
| Operating profit | 1,810 | 2,327 | (517) |
The operating profit in our guaranteed savings & annuities line of business decreased. Most of this was a consequence of a declined investment margin in the United States. A product re-allocation to the capital-efficient products line of business coupled with a lower contribution due to the decreased portfolio share in the German life business were further key factors. The drop in our operating profit in the protection & health line of business was largely driven by the lower investment margins in France, and in the German health business. The deconsolidation of Allianz Popular S.L. in Spain also contributed negatively, while lower claims as well as growth in the Asia-Pacific region had a partially offsetting effect. The operating profit generated by our unit-linked without guarantee line of business decreased, mainly due to the disposal of Allianz Popular S.L. in Spain but also due to developments in our business in Taiwan. The decline in the operating profit in the capitalefficient products line of business resulted primarily from a change in the DAC amortization period in the United States in the second quarter of 2019, leading to a favorable effect in that year. This was partly compensated by higher volumes in the German life business.
Our net income remained stable. A higher non-operating result – mainly due to increased realizations resulting from the disposal of Allianz Popular S.L. in Spain – and reduced income taxes in the first half-year of 2020 compensated for the decrease in the operating profit.
Our return on equity decreased slightly by 0.4 percentage points to 12.3%. This was largely attributable to the increase in total equity compared to year-end 2019.
2_Prior year figures changed in order to reflect the refinement of profit source reporting in the USA.
1_"Impact of change in DAC" includes effects of change in DAC, unearned revenue reserves (URR) and value of business acquired (VOBA). It represents the net impact of deferral and amortization of acquisition costs as well as of front-end loadings on operating profit, and therefore differs from the figures reported in our IFRS financial statements.
€ bn
Key figures Asset Management1
| Six months ended 30 June | 2020 | 2019 | Delta | |
|---|---|---|---|---|
| Operating revenues | € mn | 3,493 | 3,320 | 173 |
| Operating profit | € mn | 1,319 | 1,251 | 68 |
| Cost-income ratio2 | % | 62.2 | 62.3 | (0.1) %-p |
| Net income | € mn | 906 | 926 | (20) |
| Total assets under management as of 30 June3 | € bn | 2,250 | 2,268 | (18) |
| thereof: Third-party assets under management as of 30 June3 |
€ bn | 1,658 | 1,686 | (28) |
| Type of asset class | As of 30 June 2020 |
As of 31 December 2019 |
Delta |
|---|---|---|---|
| Fixed income | 1,815 | 1,801 | 14 |
| Equities | 155 | 170 | (15) |
| Multi-assets1 | 168 | 177 | (9) |
| Alternatives | 113 | 120 | (7) |
| Total | 2,250 | 2,268 | (18) |
1_The term "multi-assets" refers to a combination of several asset classes (e.g. bonds, stocks, cash and real property) used as an investment. Multi-asset class investments increase the diversification of an overall portfolio by distributing investments over several asset classes.
Net outflows4 of total assets under management (AuM) amounted to € 20.5 bn for the first half of 2020, driven by third-party AuM net outflows of € 20.6 bn. A major part of these net outflows was attributable to PIMCO, although AllianzGI contributed as well. (PIMCO: € 16.6 bn total/€ 20.3 bn third-party; AllianzGI: € 3.9 bn total/€ 0.3 bn thirdparty). Caused by COVID-19-related market turbulences, the net outflows concentrated in the first quarter of the year, while in the second quarter we saw net inflows again.
Positive effects from market and dividends5 totaled € 6.2 bn. Of these, € 27.8 bn came from PIMCO and were related to fixed-income assets, while € 21.6 bn negative effects stemmed from AllianzGI and were attributable to all asset classes except fixed-income assets.
Positive effects from consolidation, deconsolidation, and other adjustments added € 0.3 bn to total AuM.
Unfavorable foreign currency translation effects amounted to € 4.0 bn and concerned PIMCO.
| As of 30 June 2020 |
As of 31 December 2019 |
Delta | ||
|---|---|---|---|---|
| Third-party assets under management | € bn | 1,658 | 1,686 | (1.7) % |
| Business units' share | ||||
| PIMCO | % | 79.6 | 78.8 | 0.7 %-p |
| AllianzGI | % | 20.4 | 21.2 | (0.7) %-p |
| Asset classes split | ||||
| Fixed income | % | 79.8 | 78.6 | 1.2 %-p |
| Equities | % | 8.3 | 8.6 | (0.3) %-p |
| Multi-assets | % | 9.1 | 9.5 | (0.4) %-p |
| Alternatives | % | 2.8 | 3.3 | (0.5) %-p |
| Investment vehicle split1 | ||||
| Mutual funds | % | 57.3 | 58.8 | (1.5) %-p |
| Separate accounts | % | 42.7 | 41.2 | 1.5 %-p |
| Regional allocation2 | ||||
| America | % | 56.3 | 55.4 | 0.9 %-p |
| Europe | % | 31.7 | 33.4 | (1.7) %-p |
| Asia-Pacific | % | 11.9 | 11.2 | 0.7 %-p |
| Overall three-year rolling investment outperformance3 |
% | 67 | 92 | (25) %-p |
1_Mutual funds are investment vehicles (in the United States, investment companies subject to the U.S. code; in Germany, vehicles subject to the "Standard-Anlagerichtlinien des Fonds" Investmentgesetz) where the money of several individual investors is pooled into one account to be managed by the asset manager, e.g. open-end funds, closed-end funds. Separate accounts are investment vehicles where the money of a single investor is directly managed by the asset manager in a separate dedicated account (e.g. public or private institutions, high net worth individuals, and corporates).
2_Based on the location of the asset management company.
3_Three-year rolling investment outperformance reflects the mandate-based and volume-weighted three-year investment success of all third-party assets that are managed by Allianz Asset Management's portfolio-management units. For separate accounts and mutual funds, the investment success (valued on the basis of the closing prices) is compared with the investment success prior to cost deduction of the respective benchmark, based on various metrics. For some mutual funds, the investment success, reduced by fees, is compared with the investment success of the median of the respective Morningstar peer group (a position in the first and second quartile is equivalent to outperformance).
The decrease in the overall three-year rolling investment outperformance is due to COVID-19-driven significant market dislocation; also investorsshifted significant amounts of capital from both debt and equity capital markets into money market funds during the first quarter of the year, which created a challenging performance environment for some of our funds.
1_For further information on Asset Management figures, please refer note 5 to the condensed consolidated interim financial statements.
2_Represents operating expenses divided by operating revenues.
3_2019 figure as of 31 December 2019.
4_Net flows represent the sum of new client assets, additional contributions from existing clients – including dividend reinvestment – withdrawals of assets from, and termination of, client accounts and distributions to investors.
5_"Market and dividends" represents current income earned on the securities held in client accounts, as well as changes in the fair value of these securities. This also includes dividends from net investment income and from net realized capital gains to investors of both open-ended mutual funds and closed-end funds.
Our operating revenues increased by 5.2% on a nominal basis. This development was driven by higher average third-party AuM at PIMCO, due to strong market effects – despite a downturn in the first quarter of 2020 – especially from fixed-income assets. Net inflows and favorable foreign currency translation effects supported the increase. On an internal basis1 operating revenues increased by 3.0%.
We recorded lower performance fees at both AllianzGI and PIMCO due to a challenging performance environment following COVID-19.
Other net fee and commission income rose, driven by increased average third-party AuM at PIMCO.
Our operating profit increased by 5.4% on a nominal basis, as growth in operating revenues exceeded an increase in operating expenses. On an internal basis1 , our operating profit grew by 3.3%, which was due to higher average third-party AuM.
The nominal increase in administrative expenses was driven by PIMCO, where an increase in headcount as well as a positive business development led to higher personnel expenses. AllianzGI, on the other hand, recorded lower expenses due to cost containment.
Our cost-income ratio remained almost unchanged.
| Six months ended 30 June | 2020 | 2019 | Delta |
|---|---|---|---|
| Performance fees | 72 | 122 | (50) |
| Other net fee and commission income | 3,423 | 3,198 | 225 |
| Other operating revenues | (2) | - | (2) |
| Operating revenues | 3,493 | 3,320 | 173 |
| Administrative expenses (net), excluding acquisition-related expenses |
(2,174) | (2,069) | (105) |
| Operating expenses | (2,174) | (2,069) | (105) |
| Operating profit | 1,319 | 1,251 | 68 |
The decrease in our net income was driven by a lower non-operating result due to restructuring expenses.
1_Operating revenues/operating profit adjusted for foreign currency translation and (de-)consolidation effects.
Key figures Corporate and Other1
| € mn | |||
|---|---|---|---|
| Six months ended 30 June | 2020 | 2019 | Delta |
| Operating revenues | 1,402 | 1,399 | 3 |
| Operating expenses | (1,833) | (1,694) | (139) |
| Operating result | (432) | (296) | (136) |
| Net loss | (535) | (482) | (53) |
Our operating result declined strongly, compared to the first six months of the previous year, mainly due to a deterioration in our operating investment result and a contribution to a COVID-19 solidarity fund.
Our net loss worsened as well. The decline of our operating result was partly offset by lower interest expenses for external debt and a higher income tax result.
1_For further information on Corporate and Other figures, please refer to note 5 to the condensed consolidated interim financial statements.
Given the gradual recovery from lockdowns, we expect the global GDP (gross domestic product)to fall by 4.7% in 2020, followed by growth of 4.8% in 2021. The return to pre-crisis levels, mainly driven by China and the United States, is expected at the end of 2021 at the earliest. Uncertainty, however, remains extremely high. This U-shaped scenario hinges upon the assumption that fiscal and monetary policies remain effective and no second wave of infections force governments to re-impose generalized domestic lockdowns. The unprecedented health and economic crisis triggered by COVID-19 creates unprecedented levels of uncertainty, too.
In our base case, the U.S. GDP will shrink by 5.3% in 2020 and grow by 3.7% in 2021. In the Eurozone, the shape of the U will be even more pronounced, plunging by 9% in 2020 and recovering by 6% in 2021. Continued sanitary restrictions, lingering contagion fears, heightened economic uncertainty, and the expected uneven global recovery will shape consumption and investment decisions and have an impact on underlying growth dynamics. As a result, the Eurozone GDP is expected to recover to pre-crisis levels in late 2022.
Fiscal and monetary policy will remain expansionary for the time being. For money markets, in particular, a new cycle of interest rate hikes seems to be a long way off. It is very likely, after this very severe recession, that central banks will be more cautious than ever when it comes to monetary normalization. In this context, yields in developed markets are expected to remain on a long-term downward slope. For 2020, we expect 10-year Bunds to finish the year at -0.5% and 10-year U.S. Treasuries at 1.0%, slightly above current levels.
The COVID-19 pandemic rendered our forecast at the beginning of the year, which predicted rising premiums in 2020, obsolete. Now, a decline in global premiums has to be expected.
In the property-casualty sector, the link between economic activity and insurance demand is close. Therefore, the recession and gradual recovery, affecting new business in many lines of business, are expected to have an impact on premium growth.
In the life sector, demand for some products, such as unit-linked policies, is directly influenced by capital markets; therefore, higher volatility could influence premium growth. Industry profitability could be affected by two factors: Increased market volatility and suppressed yields may put pressure on investment income while COVID-19-related claims may shape underwriting profitability. Visibility on claims remains still relatively low and capital market developments are hardly predictable amidst an evolving pandemic. The trend of market hardening, however, might not be stopped by the pandemic, quite the contrary.
Over the long-term, COVID-19 might accelerate structural changes in the industry: The digitalization of the business model, the pivot to Asia, and the growing significance of ESG-factors (ESG = Environment, Social, Governance) are likely to gather steam after COVID-19.
The industry's profitability remains under pressure from continuous flows into passive products, new pricing models, and rising distribution costs. Digital channels such as robo-advisory platforms are gaining prominence and the strengthening of regulatory oversight could also affect profitability. At the same time, opportunities in the area of active management will continue to exist, particularly in alternative / illiquid and solutions-oriented strategies, but also in equity and fixed-income products. In order to continue growing, it is vital for asset managers to keep sufficient business volumes, ensure efficient operations, and maintain a strong investment performance. Overall, it will be essential for asset managers to address their asset flows and profitability through continued structural changes in areas such as product innovation, cost structure, and growth strategies.
The outlook for 2020 assumed no significant deviation from the underlying assumptions, i.e. stable global economic growth and no major disruption. In light of the macroeconomic development caused by the pandemic, however, and the expected impact on the financial development of the operating entities of the Group, the Board of Management does not assume that Allianz Group will be able to achieve the target range for the operating profit 2020 in the amount of € 12 bn +/- € 500 mn as communicated in the 2019 Annual Report. Therefore, the overall outlook for 2020 was withdrawn on 30 April 2020.
In our Property-Casualty insurance business, the strongest impact from the pandemic concerns the underwriting result, with a negative net effect of € 0.8 bn at the end of the first half of 2020 which is equally split over the first two quarters. The negative impact was primarily in entertainment, business interruption, business closure, Euler Hermes and travel. This negative impact is partly offset by a decline in frequency. Overall, the impact for 2020 will depend on the further development of the pandemic. Consequently, despite some positive impacts as described above, we expect a reduction in annual operating profit compared to the prior year.
The impact of the pandemic on the Life/Health business is largely due to the capital markets development. The market turbulences seen in the first six months led to a negative impact of € 0.4 bn, mainly via higher impairments and a spike in market volatility affecting the hedge result of our U.S. business. The overall impact for 2020 will depend on the further pandemic development and its impact on capital markets. We expect a lower operating profit compared to 2019.
The Asset Managementsegment was affected by the financial market downturn and related investor uncertainties which led to negative market valuation of AuM, net outflows and lower performance fees in the first quarter 2020. Although latest market developments have provided some tailwind, markets still face high volatility and a pronounced level of risk.
Our Corporate and Other segment is also affected by the development of the capital markets due to a lower expected investment result.
Given the overall uncertainty due to the pandemic as described above, a quantitative outlook in the usual manner cannot be given at the moment.
This document includes forward-looking statements, such as prospects or expectations, that are based on management's current views and assumptions and subject to known and unknown risks and uncertainties. Actual results, performance figures, or events may differ significantly from those expressed or implied in such forward-looking statements.
Deviations may arise due to changes in factors including, but not limited to, the following: (i) the general economic and competitive situation in the Allianz Group's core business and core markets, (ii) the performance of financial markets (in particular market volatility, liquidity, and credit events), (iii) the frequency and severity of insured loss events, including those resulting 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, most notably the EUR/USD exchange rate, (ix) changes in laws and regulations, including tax regulations, (x) the impact of acquisitions including and related integration issues and reorganization measures, and (xi) the general competitive conditions that, in each individual case, apply at a local, regional, national, and/or global level. Many of these changes can be exacerbated by terrorist activities.
The Allianz Group assumes no obligation to update any information or forward-looking statement contained herein, save for any information we are required to disclose by law.
| As of 30 June 2020 |
As of 31 December 2019 |
Delta |
|---|---|---|
| 28,928 | 28,928 | - |
| 27,654 | 29,577 | (1,924) |
| (2,937) | (2,195) | (742) |
| 18,491 | 17,691 | 800 |
| 72,136 | 74,002 | (1,866) |
The decrease in shareholders' equity – € 1,866 mn – was attributable to the dividend payout in May 2020 (€ 3,952 mn) and the change in treasury shares (€ 760 mn) due to the share buy-back. The net income attributable to shareholders amounting to € 2,927 mn partly offset these effects.
The Allianz Group's own funds and capital requirements are based on the market value balance sheet approach as the major economic principle of Solvency II rules.2 Our regulatory capitalization is shown in the following table.
| As of 30 June 20203 |
As of 31 December 2019 |
Delta | ||
|---|---|---|---|---|
| Eligible own funds | € bn | 80.7 | 84.0 | (3.3) |
| Capital requirement | € bn | 43.2 | 39.5 | 3.7 |
| Capitalization ratio | % | 187 | 212 | (26) %-p |
Our Solvency II capitalization ratio decreased from 212% to 187% over the first six months of 2020. The decrease was predominantly driven by negative market developments following the COVID-19 pandemic and associated policy responses. This impact was only partly offset by capital generation and management actions.
Two of our operating entities (Allianz Leben and Allianz Private Krankenversicherung) requested approval from the BaFin to apply transitional measures on their technical provisions, which the BaFin granted in June 2020. The application of transitionals decreases the value of technical provisions as disclosed in the market value balance sheet, with a partially offsetting impact in deferred taxes. As a result, Group eligible own funds increased by € 13.5 bn and our Solvency II capitalization ratio by 31 percentage points to 217%. Our general capital steering will continue to be based on the past approach, excluding the application of transitional measures for technical provisions. As this is the first-time application, we neither restate nor recalculate previously disclosed ratios.
1_This does not include non-controlling interests of € 3,228 mn and € 3,363 mn as of 30 June 2020 and 31 December 2019, respectively. For further information, please refer to note 18 to the condensed consolidated interim financial statements.
2_Own funds are calculated under consideration of volatility adjustment and yield curve extension, as described on page 84 in the Allianz Group Annual Report 2019.
3_Eligible own funds excluding the application of transitional measures for technical provisions. Including the application of transitional measures for technical provisions, the own funds amounted to € 94.2 bn; and a Solvency II ratio of 217 % as of 30 June 2020.
As of 30 June 2020, total assets amounted to € 1,018.8 bn (up € 7.6 bn compared to year-end 2019). Total liabilities were € 943.4 bn, representing a rise of € 9.6 bn compared to year-end 2019.
The following section focuses on our financial investments in debt instruments, equities, real estate, and cash, as these reflect the major developments in our asset base.
The following portfolio overview covers the Allianz Group's assets held for investment, which are largely driven by our insurance businesses.
| As of 30 June 2020 |
As of 31 December 2019 |
Delta | As of 30 June 2020 |
As of 31 December 2019 |
Delta | |
|---|---|---|---|---|---|---|
| Type of investment | € bn | € bn | € bn | % | % | %-p |
| Debt instruments; thereof: | 663.7 | 643.6 | 20.1 | 86.6 | 85.3 | 1.3 |
| Government bonds | 246.3 | 238.1 | 8.2 | 37.1 | 37.0 | 0.1 |
| Covered bonds | 68.1 | 71.3 | (3.2) | 10.3 | 11.1 | (0.8) |
| Corporate bonds | 241.9 | 228.9 | 13.0 | 36.4 | 35.6 | 0.9 |
| Banks | 36.3 | 35.8 | 0.5 | 5.5 | 5.6 | (0.1) |
| Other | 71.0 | 69.4 | 1.6 | 10.7 | 10.8 | (0.1) |
| Equities | 68.3 | 78.3 | (10.0) | 8.9 | 10.4 | (1.5) |
| Real estate | 13.3 | 13.0 | 0.2 | 1.7 | 1.7 | - |
| Cash, cash equivalents, and other | 20.9 | 19.4 | 1.5 | 2.7 | 2.6 | 0.2 |
| Total | 766.2 | 754.4 | 11.8 | 100.0 | 100.0 | - |
Compared to year-end 2019, our overall asset allocation remained rather stable, with a decrease in our equity investments.
Our well-diversified exposure to debt instruments increased compared to year-end 2019, mainly due to new investments. About 92% of this portfolio was invested in investment-grade bonds and loans.1Our government bonds portfolio contained bonds from France, Germany, Italy, and Spain that represented 17.4%, 13.7%, 7.2% and 6.2% of our portfolio shares. Our corporate bonds portfolio contained bonds from the United States, Eurozone, and Europe excl. Eurozone. They represented 39.4%, 33.2% and 12.1% of our portfolio shares.
Our exposure to equities decreased due to sales and market movements.
As of 30 June 2020, the business segment's gross reserves for loss and loss adjustment expenses as well as discounted loss reserves amounted to € 71.9 bn, compared to € 70.0 bn at year-end 2019. On a net basis, our reserves, including discounted loss reserves, increased from € 60.1 bn to € 61.1 bn.2
Life/Health reserves for insurance and investment contracts increased by € 8.0 bn to € 580.9 bn over the first six months of 2020. The € 9.3 bn increase in aggregate policy reserves before foreign currency translation effects was mainly driven by our operations in Germany (€ 8.2 bn). Reserves for premium refunds decreased by € 0.8 bn (before foreign currency translation effects) and foreign currency translation effects reduced the balance sheet value by € 0.5 bn.
2_For further information about changes in the reserves for loss and loss adjustment expenses for the Property-Casualty business segment, please refer to note 14 to the condensed consolidated interim financial statements.
The previous analysis is based on our condensed consolidated interim financial statements and should be read in conjunction with them. In addition to our figures stated in accordance with 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, rather than a substitute for, our figures determined according to IFRS.
For further information, please refer to note 5 to the condensed consolidated interim financial statements.
Total revenues comprise total revenues in Property-Casualty, statutory premiums in Life/Health, operating revenues in Asset Management, and total revenues in Corporate and Other (Banking).
| € mn | ||
|---|---|---|
| Six months ended 30 June | 2020 | 2019 |
| PROPERTY-CASUALTY | ||
| Total revenues | 33,785 | 32,916 |
| consisting of: | ||
| Gross premiums written | 32,933 | 31,924 |
| Fee and commission income | 851 | 992 |
| LIFE/HEALTH | ||
| Statutory premiums | 36,356 | 37,399 |
| ASSET MANAGEMENT | ||
| Operating revenues | 3,493 | 3,320 |
| consisting of: | ||
| Net fee and commission income | 3,495 | 3,320 |
| Net interest and similar income | (8) | (6) |
| Income from financial assets and liabilities carried at fair value through income (net) |
5 | 6 |
| CORPORATE AND OTHER | ||
| thereof: Total revenues (Banking) | 111 | 118 |
| consisting of: | ||
| Interest and similar income | 34 | 38 |
| Income from financial assets and liabilities carried at fair value through income (net)1 |
1 | 2 |
| Fee and commission income | 265 | 285 |
| Interest expenses, excluding interest expenses from external debt |
(10) | (10) |
| Fee and commission expenses | (179) | (195) |
| CONSOLIDATION | (250) | (275) |
| Allianz Group total revenues | 73,495 | 73,479 |
1_Includes trading income.
We believe that the understanding of our total revenue performance is enhanced when the effects of foreign currency translation as well as acquisitions, disposals, and transfers (or "changes in scope of consolidation") are analyzed separately. Therefore, in addition to presenting nominal total revenue growth, we also present internal growth, which excludes these effects.
| Six months ended 30 June 2020 |
Internal Growth |
Changes in scope of consolidation |
Foreign currency translation |
Nominal Growth |
|---|---|---|---|---|
| Property-Casualty | 0.3 | 2.9 | (0.5) | 2.6 |
| Life/Health | (3.4) | 0.2 | 0.5 | (2.8) |
| Asset Management | 3.0 | - | 2.2 | 5.2 |
| Corporate and Other | (6.0) | - | - | (6.0) |
| Allianz Group | (1.5) | 1.4 | 0.1 | - |
The reconciling item scope comprises the effects from out-of-scope entities in the profit sources reporting compilation. Operating profit from operating entities that are not in-scope entities is included in the investment margin. Currently, 23 entities – comprising the vast majority of Life/Health total statutory premiums – are in scope.
Expenses comprise acquisition expenses and commissions as well as administrative and other expenses.
The delta shown as definitions in acquisition expenses and commissions represents commission clawbacks, which are allocated to the technical margin. The delta shown as definitions in administrative and other expenses mainly represents restructuring charges, which are stated in a separate line item in the Group income statement.
| Acquisition, administrative, capitalization, and amortization of DAC1 | |||
|---|---|---|---|
| € mn |
| Six months ended 30 June | 2020 | 2019 |
|---|---|---|
| Acquisition expenses and commissions2 | (2,722) | (2,681) |
| Definitions | 6 | 7 |
| Scope | (68) | (42) |
| Acquisition costs incurred | (2,783) | (2,716) |
| Capitalization of DAC2 | 831 | 881 |
| Definition: URR capitalized | 319 | 283 |
| Definition: policyholder participation3 | 527 | 594 |
| Scope | 17 | 14 |
| Capitalization of DAC | 1,694 | 1,773 |
| Amortization, unlocking, and true-up of DAC2 | (894) | (563) |
| Definition: URR amortized | (45) | (29) |
| Definition: policyholder participation3 | (543) | (450) |
| Scope | (19) | (11) |
| Amortization, unlocking, and true-up of DAC | (1,501) | (1,052) |
| Commissions and profit received on reinsurance business ceded | 59 | 45 |
| Acquisition costs4 | (2,531) | (1,950) |
| Administrative and other expenses2 | (952) | (922) |
| Definitions | 79 | 73 |
| Scope | (78) | (84) |
| Administrative expenses on reinsurance business ceded | 4 | 6 |
| Administrative expenses4 | (947) | (926) |
Reconciliation to Notes1
€ mn
| Six months ended 30 June | 2020 | 2019 |
|---|---|---|
| Acquisition expenses and commissions2 | (2,722) | (2,681) |
| Administrative and other expenses2 | (952) | (922) |
| Capitalization of DAC2 | 831 | 881 |
| Amortization, unlocking, and true-up of DAC2 | (894) | (563) |
| Acquisition and administrative expenses | (3,737) | (3,284) |
| Definitions | 343 | 479 |
| Scope | (148) | (122) |
| Commissions and profit received on reinsurance business ceded | 59 | 45 |
| Administrative expenses on reinsurance business ceded | 4 | 6 |
| Acquisition and administrative expenses (net)3 | (3,478) | (2,876) |
1_Prior year figures changed in order to reflect the refinement of profit source reporting in the USA.
2_As per Interim Group Management Report.
3_As per notes to the condensed consolidated interim financial statements.
1_Prior year figures changed in order to reflect the refinement of profit source reporting in the USA.
2_As per Interim Group Management Report.
3_For German Speaking Countries, policyholder participation on revaluation of DAC/URR capitalization/amortization. 4_As per notes to the condensed consolidated interim financial statements.
"Impact of change in DAC" includes effects of change in DAC, unearned revenue reserves (URR), and value of business acquired (VOBA), and is the net impact of the deferral and amortization of acquisition costs and front-end loadings on operating profit.
URR capitalized: Capitalization amount of unearned revenue reserves (URR) and deferred profit liabilities (DPL) for FAS 97 LP.
URR amortized: Total amount of URR amortized includes scheduled URR amortization, true-up, and unlocking.
Both capitalization and amortization are included in the line item premiums earned (net) in the Group income statement.
Policyholder participation is included within "change in our reserves for insurance and investment contracts (net)" in the Group income statement.
| € mn | |||
|---|---|---|---|
| Note | As of 30 June 2020 |
As of 31 December 2019 |
|
| ASSETS | |||
| Cash and cash equivalents | 22,987 | 21,075 | |
| Financial assets carried at fair value through income | 6 | 14,569 | 13,187 |
| Investments | 7 | 633,163 | 625,746 |
| Loans and advances to banks and customers | 8 | 115,591 | 112,672 |
| Financial assets for unit-linked contracts | 125,728 | 132,168 | |
| Reinsurance assets | 9 | 19,413 | 17,545 |
| Deferred acquisition costs | 10 | 23,478 | 24,777 |
| Deferred tax assets | 1,090 | 1,133 | |
| Other assets | 11 | 46,606 | 44,532 |
| Non-current assets and assets of disposal groups classified as held for sale | 4 | 1,644 | 3,555 |
| Intangible assets | 12 | 14,537 | 14,796 |
| Total assets | 1,018,806 | 1,011,185 | |
| LIABILITIES AND EQUITY | |||
| Financial liabilities carried at fair value through income1 | 19,270 | 18,049 | |
| Liabilities to banks and customers | 13 | 14,558 | 13,445 |
| Unearned premiums | 29,313 | 25,468 | |
| Reserves for loss and loss adjustment expenses | 14 | 79,790 | 77,541 |
| Reserves for insurance and investment contracts | 15 | 595,667 | 588,023 |
| Financial liabilities for unit-linked contracts | 125,728 | 132,168 | |
| Deferred tax liabilities | 7,404 | 6,538 | |
| Other liabilities | 16 | 46,998 | 47,904 |
| Liabilities of disposal groups classified as held for sale | 4 | 716 | 2,236 |
| Certificated liabilities | 17 | 9,745 | 9,209 |
| Subordinated liabilities | 17 | 14,254 | 13,238 |
| Total liabilities | 943,443 | 933,820 | |
| Shareholders' equity | 72,136 | 74,002 | |
| Non-controlling interests | 3,228 | 3,363 | |
| Total equity | 18 | 75,363 | 77,364 |
| Total liabilities and equity | 1,018,806 | 1,011,185 | |
| 1_Include mainly derivative financial instruments. |
| € mn | |||
|---|---|---|---|
| Six months ended 30 June | Note | 2020 | 2019 |
| Gross premiums written | 45,660 | 44,803 | |
| Ceded premiums written | (4,012) | (3,106) | |
| Change in unearned premiums (net) | (3,578) | (4,192) | |
| Premiums earned (net) | 19 | 38,071 | 37,505 |
| Interest and similar income | 20 | 10,808 | 11,199 |
| Income from financial assets and liabilities carried at fair value through income (net) | 21 | (2,341) | (350) |
| Realized gains/losses (net) | 22 | 5,555 | 2,503 |
| Fee and commission income | 23 | 5,881 | 5,891 |
| Other income | 160 | 6 | |
| Total income | 58,135 | 56,755 | |
| Claims and insurance benefits incurred (gross) | (31,199) | (28,328) | |
| Claims and insurance benefits incurred (ceded) | 2,774 | 1,540 | |
| Claims and insurance benefits incurred (net) | 24 | (28,424) | (26,787) |
| Change in reserves for insurance and investment contracts (net) | 25 | (4,374) | (7,457) |
| Interest expenses | 26 | (491) | (559) |
| Loan loss provisions | (4) | (1) | |
| Impairments of investments (net) | 27 | (4,319) | (703) |
| Investment expenses Acquisition and administrative expenses (net) |
28 29 |
(782) (13,161) |
(682) (12,459) |
| Fee and commission expenses Amortization of intangible assets |
30 | (2,062) (105) |
(2,258) (105) |
| Restructuring and integration expenses | (288) | (77) | |
| Other expenses | - | (6) | |
| Total expenses | (54,011) | (51,096) | |
| Income before income taxes | 4,124 | 5,659 | |
| Income taxes | 31 | (1,023) | (1,344) |
| Net income | 3,101 | 4,316 | |
| Net income attributable to: | |||
| Non-controlling interests | 174 | 207 | |
| Shareholders | 2,927 | 4,109 | |
| Basic earnings per share (€) | 7.07 | 9.76 | |
| Diluted earnings per share (€) | 6.94 | 9.75 | |
| € mn | ||
|---|---|---|
| Six months ended 30 June | 2020 | 2019 |
| Net income | 3,101 | 4,316 |
| Other comprehensive income | ||
| Items that may be reclassified to profit or loss in future periods | ||
| Foreign currency translation adjustments | ||
| Reclassifications to net income | (16) | - |
| Changes arising during the period | (761) | 38 |
| Subtotal | (776) | 38 |
| Available-for-sale investments | ||
| Reclassifications to net income | 436 | (387) |
| Changes arising during the period | 243 | 9,368 |
| Subtotal | 679 | 8,982 |
| Cash flow hedges | ||
| Reclassifications to net income | (27) | (3) |
| Changes arising during the period | 141 | 144 |
| Subtotal | 114 | 141 |
| Share of other comprehensive income of associates and joint ventures | ||
| Reclassifications to net income | - | 18 |
| Changes arising during the period | (96) | 58 |
| Subtotal | (96) | 76 |
| Miscellaneous | ||
| Reclassifications to net income | - | - |
| Changes arising during the period | 85 | 226 |
| Subtotal | 85 | 226 |
| Items that may never be reclassified to profit or loss | ||
| Changes in actuarial gains and losses on defined benefit plans | (155) | (839) |
| Total other comprehensive income | (149) | 8,623 |
| Total comprehensive income | 2,952 | 12,939 |
| Total comprehensive income attributable to: | ||
| Non-controlling interests | 112 | 745 |
| Shareholders | 2,840 | 12,194 |
For further details concerning income taxes on components of the other comprehensive income, please see note 31.
€ mn
| Paid-in capital | Retained earnings |
Foreign currency translation adjustments |
Unrealized gains and losses (net) |
Share holders' equity |
Non controlling interests |
Total equity | |
|---|---|---|---|---|---|---|---|
| Balance as of 1 January 2019 | 28,928 | 27,967 | (2,607) | 6,945 | 61,232 | 2,447 | 63,679 |
| Total comprehensive income1 | - | 3,171 | 29 | 8,994 | 12,194 | 745 | 12,939 |
| Paid-in capital | - | - | - | - | - | - | - |
| Treasury shares | - | (1,275) | - | - | (1,275) | - | (1,275) |
| Transactions between equity holders | - | (11) | 3 | 4 | (4) | 168 | 164 |
| Dividends paid | - | (3,767) | - | - | (3,767) | (97) | (3,865) |
| Balance as of 30 June 2019 | 28,928 | 26,084 | (2,576) | 15,943 | 68,379 | 3,263 | 71,642 |
| Balance as of 1 January 2020 | 28,928 | 29,577 | (2,195) | 17,691 | 74,002 | 3,363 | 77,364 |
| Total comprehensive income1 | - | 2,782 | (742) | 800 | 2,840 | 112 | 2,952 |
| Paid-in capital | - | - | - | - | - | - | - |
| Treasury shares2 | - | (760) | - | - | (760) | - | (760) |
| Transactions between equity holders | - | 6 | - | - | 6 | (126) | (120) |
| Dividends paid | - | (3,952) | - | - | (3,952) | (121) | (4,073) |
| Balance as of 30 June 2020 | 28,928 | 27,654 | (2,937) | 18,491 | 72,136 | 3,228 | 75,363 |
1_Total comprehensive income in shareholders' equity for the six months ended 30 June 2020 comprises net income attributable to shareholders of € 2,927 mn (2019: € 4,109 mn).
2_In February 2020, a share buy-back with an intended volume of € 1.5 bn was announced and executed since 9 March 2020. During the first half-year of 2020, Allianz SE purchased 4.9 million own shares for an amount of € 750 mn as a first tranche. The second tranche with a volume of € 750 mn was suspended in April 2020.
| € mn | ||
|---|---|---|
| Six months ended 30 June | 2020 | 2019 |
| SUMMARY | ||
| Net cash flow provided by operating activities | 14,401 | 23,301 |
| Net cash flow used in investing activities | (9,591) | (16,904) |
| Net cash flow used in financing activities | (2,958) | (3,083) |
| Effect of exchange rate changes on cash and cash equivalents | (249) | 5 |
| Change in cash and cash equivalents | 1,604 | 3,319 |
| Cash and cash equivalents at beginning of period | 21,075 | 17,234 |
| Cash and cash equivalents reclassified to assets of disposal groups held for sale in 2019 | - | (168) |
| Cash and cash equivalents reclassified to assets of disposal groups held for sale and disposed of in 2020 | 309 | - |
| Cash and cash equivalents at end of period | 22,987 | 20,385 |
| CASH FLOW FROM OPERATING ACTIVITIES | ||
| Net income | 3,101 | 4,316 |
| Adjustments to reconcile net income to net cash flow provided by operating activities | ||
| Share of earnings from investments in associates and joint ventures | (174) | (169) |
| Realized gains/losses (net) and impairments of investments (net) of: | ||
| 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, non-current assets and disposal groups classified as held for sale |
(1,378) | (1,800) |
| Other investments, mainly financial assets held for trading and designated at fair value through income | 1,560 | 171 |
| Depreciation and amortization | 1,064 | 968 |
| Loan loss provisions | 4 | 1 |
| Interest credited to policyholder accounts | 2,143 | 2,917 |
| Net change in: | ||
| Financial assets and liabilities held for trading | (593) | 243 |
| Reverse repurchase agreements and collateral paid for securities borrowing transactions | (1,082) | 34 |
| Repurchase agreements and collateral received from securities lending transactions | 618 | 956 |
| Reinsurance assets | (2,313) | (558) |
| Deferred acquisition costs | (334) | (1,315) |
| Unearned premiums | 4,410 | 4,654 |
| Reserves for loss and loss adjustment expenses | 2,982 | 1,214 |
| Reserves for insurance and investment contracts | 5,698 | 12,386 |
| Deferred tax assets/liabilities | 561 | (77) |
| Other (net) | (1,866) | (640) |
| Subtotal | 11,300 | 18,985 |
| Net cash flow provided by operating activities | 14,401 | 23,301 |
| CASH FLOW FROM INVESTING ACTIVITIES | ||
| Proceeds from the sale, maturity or repayment of: | ||
| Financial assets designated at fair value through income | 1,797 | 980 |
| Available-for-sale investments | 89,030 | 75,642 |
| Held-to-maturity investments | 157 | 325 |
| Investments in associates and joint ventures | 264 | 235 |
| Non-current assets and disposal groups classified as held for sale | 345 | 4 |
| Real estate held for investment | 112 | 56 |
| Loans and advances to banks and customers (purchased loans) | 2,044 | 3,430 |
| Property and equipment | 63 | 39 |
| Subtotal | 93,812 | 80,712 |
| Six months ended 30 June 2020 2019 Payments for the purchase or origination of: Financial assets designated at fair value through income (1,783) (1,612) Available-for-sale investments (94,915) (89,157) Held-to-maturity investments (115) (148) Investments in associates and joint ventures (1,244) (1,407) Non-current assets and disposal groups classified as held for sale (66) - Real estate held for investment (422) (514) Fixed assets from alternative investments (5) (8) Loans and advances to banks and customers (purchased loans) (1,142) (1,849) Property and equipment (632) (535) Subtotal (100,325) (95,229) Business combinations (note 4): Proceeds from sale of subsidiaries, net of cash disposed 470 - Change in other loans and advances to banks and customers (originated loans) (3,051) (2,001) Other (net) (496) (386) Net cash flow used in investing activities (9,591) (16,904) CASH FLOW FROM FINANCING ACTIVITIES Net change in liabilities to banks and customers 479 514 Proceeds from the issuance of certificated liabilities and subordinated liabilities 4,169 3,092 Repayments of certificated liabilities and subordinated liabilities (2,562) (1,599) Net change in lease liabilities (188) (51) Transactions between equity holders 31 164 Dividends paid to shareholders (4,073) (3,865) Net cash from sale or purchase of treasury shares (760) (1,276) Other (net) (54) (62) Net cash flow used in financing activities (2,958) (3,083) SUPPLEMENTARY INFORMATION ON THE CONSOLIDATED STATEMENT OF CASH FLOWS Income taxes paid (from operating activities) (1,360) (1,006) Dividends received (from operating activities) 1,059 1,394 Interest received (from operating activities) 9,465 9,552 Interest paid (from operating activities) (465) (364) |
€ mn | |
|---|---|---|
| € mn | ||
|---|---|---|
| Liabilities to banks and customers |
Certificated and subordinated liabilities |
Lease liabilities |
Total | |
|---|---|---|---|---|
| As of 1 January 2019 | 10,049 | 22,674 | - | 32,723 |
| Net cash flows | 514 | 1,493 | (51) | 1,956 |
| Non-cash transactions | ||||
| Changes in the consolidated subsidiaries of the Allianz Group | (3) | - | - | (3) |
| Foreign currency translation adjustments | 24 | 4 | - | 28 |
| Fair value and other changes | 3 | 72 | 2,737 | 2,813 |
| As of 30 June 2019 | 10,588 | 24,243 | 2,687 | 37,517 |
| As of 1 January 2020 | 8,894 | 22,448 | 2,791 | 34,132 |
| Net cash flows | 479 | 1,608 | (188) | 1,898 |
| Non-cash transactions | ||||
| Changes in the consolidated subsidiaries of the Allianz Group | 34 | - | - | 34 |
| Foreign currency translation adjustments | (26) | (4) | (20) | (49) |
| Fair value and other changes | 2 | (53) | 165 | 114 |
| As of 30 June 2020 | 9,383 | 23,999 | 2,748 | 36,129 |
The Allianz Group's condensed consolidated interim financial statements are presented in accordance with the requirements of IAS 34 and have been prepared in conformity with International Financial Reporting Standards (IFRSs), as adopted under European Union regulations.
For existing and unchanged IFRSs, the condensed consolidated interim financial statements use the same accounting policies for recognition, measurement, consolidation and presentation as applied in the consolidated financial statements for the year ended 31 December 2019. These condensed consolidated interim financial statements should be read in conjunction with the consolidated financial statements for the year ended 31 December 2019.
In accordance with the provisions of IFRS 4, insurance contracts are recognized and measured on the basis of accounting principles generally accepted in the United States of America (US GAAP) as at first-time adoption of IFRS 4 on 1 January 2005.
Amounts are rounded to millions of Euro (€ mn), unless otherwise stated.
These condensed consolidated interim financial statements of the Allianz Group were authorized for issue by the Board of Management on 3 August 2020.
The following amendments and revisions to existing standards became effective for the Allianz Group's consolidated financial statements as of 1 January 2020:
These changes had no material impact on the Allianz Group's financial results or financial position.
The COVID-19 pandemic is currently affecting all aspects of personal and professional lives, global economic development, and the financial markets. Despite all these uncertainties, the Allianz Group is very well prepared for the situation. The interim financial statements for the first half-year of 2020 have been prepared on a going concern basis.
Consequently, the pandemic had impacts on all business segments. In the business segment Property-Casualty, the business interruption, entertainment, and credit were concerned due to higher claims. These effects were partly compensated by lower claims from reduced frequencies of claims in motor. In addition, the net income was lowered by reduced realized gains / losses (net) and higher impairments of investments. The business segment Life/Health was also impacted by negative effects, especially due to market turndowns in the investment areas and higher hedging costs. The business segment Asset Management was impacted by the severe financial market disruption and related investor uncertainties which led to a negative market valuation of assets under management and net outflows in the first quarter of 2020. In the second quarter of 2020, the business units PIMCO and Allianz GI were able to almost fully recover from the aforementioned impacts by reaching strong positive market effects and third-party net inflows.
According to the US CARES Act which has been signed into law on 27 March 2020 in response to COVID-19, a carryback of tax losses generated in 2018, 2019, and 2020 to tax years 2015 and following years is permissible. For Allianz Life Insurance of North America, a tax loss carry back potential to those periods occurred leading to a tax asset valued with a tax rate of 35% instead of a tax loss carry forward valued with a tax rate of 21%. The resulting tax benefit amounts to € 92 mn.
Given to the Solvency II capitalization ratio of 187% 1 , the Allianz Group does not see any indication of any non-compliance with its Solvency Capital Requirements of the minimum consolidated Group Solvency Capital Requirement.
Due to the COVID-19 pandemic, the default risk for trade credits provided by suppliers has increased significantly. In order to protect the real economy, many governments, particularly European Union member states, established temporary state support schemes for the area of private credit insurance. In return for these state support schemes, the insurance companies have committed to maintaining their current level of credit limits.
Euler Hermes, the credit insurer within the Allianz Group, entered into agreements with Germany, Denmark, Belgium, the Netherlands, and Norway as of 30 June 2020. Whereas some of the state support
1_Without transitionals.
schemes the Allianz Group entered into are reinsurance schemes, others are structured as guarantee contracts from a legal point of view. Irrespective of this legal qualification, for IFRS accounting purposes these contracts fulfill the definition of reinsurance contracts. Consequently, the state support schemes are consistently accounted for as reinsurance contracts. Until 30 June 2020, the total of premiums ceded under the state support schemes are € 164 mn. Against the backdrop of COVID-19, no active market exists for such transactions with comparable volume and price.
Regarding impairments of assets next to investments (e.g. software, deferred tax assets, right-of-use assets, and property, plant and equipment), the Allianz Group did not realize any material impairments. After evaluation, the Allianz Group concludes that the COVID-19 pandemic and the respective economic slowdown does not result in an impairment of goodwill.
So far, the Allianz Group has not observed any material nor sustained impacts on mortality, longevity, lapses, or health to justify significant changes of assumption in projections parameters. In the second half-year of 2020, the assumptions will be reviewed in detail.
Regarding the valuation methodologies used for financial instruments carried at fair value, the policy for determining the levels within the fair value hierarchy, and the significant Level-3 portfolios, no material changes have occurred in combination with the COVID-19 pandemic.
In total, the operating profit of the Allianz Group was reduced by € 1.2 bn due to COVID-19. Of this amount, € 0.8 bn were related to Property-Casualty and the remaining € 0.4 bn to Life/Health.
In light of the macroeconomic developments caused by the pandemic and the expected impact on the financial development of the operating entities of the Group, the outlook for 2020 was withdrawn on 30 April 2020.
Effective10 July 2020, Allianz Seguros S.A. Brazil acquired 100% in automobile and other Property-Casualty business from SulAmérica ("Sul-América Auto e Massificados" – "SASAM"). The acquisition strengthens the competitive position of Allianz in Brazil, making it one of the top 3 insurers of the largest economy in South America with a market share of around 15 percent in motor and 9 percent in Property-Casualty insurance, and establishing Allianz as the number 2 in motor insurance.
Allianz Brazil acquired approximately € 0.6 bn in assets and € 0.4 bn in liabilities of SASAM in consideration for a total purchase price of approximately up to € 0.5 bn. At the time the condensed consolidated interim financial statements of Allianz Group were authorized for issue, the initial accounting for the business combination wasincomplete. Specifically, the initial valuation of identifiable intangible assets as well as the transition of accounting policies of SASAM to IFRS requirements was still pending. Therefore, detailed disclosures of the amounts to be recognized as of the acquisition date for major classes of identifiable assets acquired and liabilities assumed including goodwill cannot be made at this point. Furthermore, the impact on revenue and net income of the consolidated income statement of the Allianz Group had SASAM been consolidated from 1 January 2020 cannot be reliably disclosed.
Non-current assets and disposal groups classified as held for sale € mn
| As of 30 June 2020 |
As of 31 December 2019 |
|
|---|---|---|
| Assets of disposal groups classified as held for sale | ||
| Allianz Popular | - | 1,884 |
| Allianz Sakura | 1,266 | 1,132 |
| Other disposal groups | 15 | 15 |
| Subtotal | 1,281 | 3,031 |
| Non-current assets classified as held for sale | ||
| Real estate held for investment | 363 | 501 |
| Real estate held for own use | - | 23 |
| Subtotal | 363 | 524 |
| Total | 1,644 | 3,555 |
| Liabilities of disposal groups classified as held for sale | ||
| Allianz Popular | - | 1,589 |
| Allianz Sakura | 706 | 637 |
| Other disposal groups | 10 | 10 |
| Total | 716 | 2,236 |
As of 30 June 2020, all requirements were fulfilled to present the Sakura investment in Japan, allocated to the reportable segments German Speaking Countries and Central & Eastern Europe (Life/Health) and Corporate and Other, as a disposal group classified as held for sale.
€ mn
| Cash and cash equivalents | 28 |
|---|---|
| Investments | 1,237 |
| Other assets | 1 |
| Total assets | 1,266 |
| Liabilities to banks and customers | 695 |
| Other liabilities | 10 |
| Total liabilities | 706 |
No impairment loss has been recognized in connection with this transaction. The closing of the transaction was completed on 1 July 2020. With the completion of the sale, the Allianz Group lost control of the Sakura investment, but retained a 50%-interest in Sakura subject to at equity accounting.
Effective 31 January 2020, the Allianz Group disposed of Allianz Popular S.L., Madrid, a 60% owned subsidiary of the Allianz Group allocated to the reportable segment Iberia & Latin America (Life/Health). The entity had been classified as held for sale since 30 June 2019. Until its deconsolidation on 31 January 2020, no impairment loss had been recognized. Upon closing of the sale, the Allianz Group recognized a gain of € 483 mn, included in the line realized gains/losses (net) of the consolidated income statement.
The impact of the disposal, net of cash disposed, on the consolidated statement of cash flows for the first six months of 2020 was as follows:
| € mn | |
|---|---|
| Investments | 1,402 |
| Loans and advances to banks and customers | 13 |
| Financial assets for unit-linked contracts | 7 |
| Reinsurance assets | 6 |
| Deferred acquisitions costs | 17 |
| Other assets | 327 |
| Unearned premiums | (29) |
| Reserves for loss and loss adjustment expenses | (75) |
| Reserves for insurance and investment contracts | (1,468) |
| Financial liabilities for unit-linked contracts | (7) |
| Deferred tax liabilities | (72) |
| Other liabilities | (45) |
| Other comprehensive income | (17) |
| Derecognition of a derivate asset | 78 |
| Realized gain from the disposal | 483 |
| Non-controlling interests | (150) |
| Proceeds from sale of the subsidiary, net of cash disposed1 | 470 |
1_Includes cash and cash equivalents at an amount of € 309 mn which were disposed of with the entity.
The business activities of the Allianz Group, the business segments as well as the products and services from which the reportable segments derive their revenues are consistent with those described in the consolidated financial statements for the year ended 31 December 2019. The statement contained therein regarding general segment reporting information is still applicable and valid.
Only minor reallocations between the reportable segments have been made.
Business segment information – consolidated balance sheets
| € mn | |
|---|---|
| Property-Casualty | Life/Health | |||
|---|---|---|---|---|
| As of 30 June 2020 |
As of 31 December 2019 |
As of 30 June 2020 |
As of 31 December 2019 |
|
| ASSETS | ||||
| Cash and cash equivalents | 5,473 | 5,334 | 10,888 | 10,165 |
| Financial assets carried at fair value through income | 1,408 | 1,415 | 13,001 | 11,661 |
| Investments | 105,478 | 107,740 | 509,853 | 500,885 |
| Loans and advances to banks and customers | 10,755 | 11,016 | 104,556 | 100,466 |
| Financial assets for unit-linked contracts | - | - | 125,728 | 132,168 |
| Reinsurance assets | 13,405 | 11,739 | 6,102 | 5,898 |
| Deferred acquisition costs | 5,218 | 4,936 | 18,260 | 19,841 |
| Deferred tax assets | 782 | 794 | 709 | 836 |
| Other assets | 30,208 | 27,296 | 19,123 | 20,592 |
| Non-current assets and assets of disposal groups classified as held for sale | 95 | 100 | 912 | 3,016 |
| Intangible assets | 4,116 | 4,335 | 2,660 | 2,695 |
| Total assets | 176,938 | 174,706 | 811,791 | 808,223 |
| Property-Casualty | Life/Health | |||
|---|---|---|---|---|
| As of 30 June 2020 |
As of 31 December 2019 |
As of 30 June 2020 |
As of 31 December 2019 |
|
| LIABILITIES AND EQUITY | ||||
| Financial liabilities carried at fair value through income | 193 | 114 | 18,932 | 17,900 |
| Liabilities to banks and customers | 1,223 | 1,556 | 5,105 | 4,616 |
| Unearned premiums | 23,639 | 20,022 | 5,702 | 5,472 |
| Reserves for loss and loss adjustment expenses | 67,301 | 65,414 | 12,549 | 12,184 |
| Reserves for insurance and investment contracts | 14,982 | 15,333 | 580,887 | 572,904 |
| Financial liabilities for unit-linked contracts | - | - | 125,728 | 132,168 |
| Deferred tax liabilities | 2,659 | 2,712 | 6,137 | 5,273 |
| Other liabilities | 20,396 | 22,574 | 15,148 | 15,704 |
| Liabilities of disposal groups classified as held for sale | 10 | 10 | 353 | 1,958 |
| Certificated liabilities | - | - | - | 12 |
| Subordinated liabilities | 12 | 12 | 68 | 69 |
| Total liabilities | 130,414 | 127,746 | 770,610 | 768,261 |
| Asset Management | Corporate and Other | Consolidation | Group | ||||
|---|---|---|---|---|---|---|---|
| As of 30 June 2020 |
As of 31 December 2019 |
As of 30 June 2020 |
As of 31 December 2019 |
As of 30 June 2020 |
As of 31 December 2019 |
As of 30 June 2020 |
As of 31 December 2019 |
| 819 | 967 | 5,988 | 4,773 | (180) | (165) | 22,987 | 21,075 |
| 50 | 66 | 498 | 517 | (388) | (473) | 14,569 | 13,187 |
| 81 | 79 | 107,607 | 106,426 | (89,855) | (89,383) | 633,163 | 625,746 |
| 54 | 270 | 5,570 | 5,739 | (5,345) | (4,820) | 115,591 | 112,672 |
| - | - | - | - | - | - | 125,728 | 132,168 |
| - | - | - | - | (94) | (92) | 19,413 | 17,545 |
| - | - | - | - | - | - | 23,478 | 24,777 |
| 185 | 166 | 1,164 | 1,092 | (1,749) | (1,755) | 1,090 | 1,133 |
| 4,674 | 4,582 | 6,287 | 7,668 | (13,685) | (15,607) | 46,606 | 44,532 |
| - | - | 637 | 566 | - | (127) | 1,644 | 3,555 |
| 7,596 | 7,607 | 165 | 159 | - | - | 14,537 | 14,796 |
| 13,458 | 13,739 | 127,916 | 126,940 | (111,296) | (112,423) | 1,018,806 | 1,011,185 |
| Asset Management | Corporate and Other | Consolidation | Group | ||||
|---|---|---|---|---|---|---|---|
| As of 30 June 2020 |
As of 31 December 2019 |
As of 30 June 2020 |
As of 31 December 2019 |
As of 30 June 2020 |
As of 31 December 2019 |
As of 30 June 2020 |
As of 31 December 2019 |
| - | - | 534 | 523 | (389) | (487) | 19,270 | 18,049 |
| 43 | 43 | 10,767 | 8,827 | (2,579) | (1,597) | 14,558 | 13,445 |
| - | - | - | - | (28) | (26) | 29,313 | 25,468 |
| - | - | - | - | (59) | (56) | 79,790 | 77,541 |
| - | - | (72) | (82) | (129) | (131) | 595,667 | 588,023 |
| - | - | - | - | - | - | 125,728 | 132,168 |
| 31 | 24 | 326 | 284 | (1,749) | (1,755) | 7,404 | 6,538 |
| 4,016 | 4,408 | 28,651 | 27,960 | (21,214) | (22,742) | 46,998 | 47,904 |
| - | - | 353 | 319 | - | (51) | 716 | 2,236 |
| - | - | 12,423 | 12,336 | (2,677) | (3,139) | 9,745 | 9,209 |
| - | - | 14,193 | 13,177 | (20) | (20) | 14,254 | 13,238 |
| 4,090 | 4,475 | 67,175 | 63,344 | (28,846) | (30,006) | 943,443 | 933,820 |
| Total equity | 75,363 | 77,364 | |||||
| Total liabilities and equity | 1,018,806 | 1,011,185 | |||||
Business segment information – total revenues and reconciliation of operating profit (loss) to net income (loss) € mn
| Property-Casualty | Life/Health | |||
|---|---|---|---|---|
| Six months ended 30 June | 2020 | 2019 | 2020 | 2019 |
| Total revenues1 | 33,785 | 32,916 | 36,356 | 37,399 |
| Premiums earned (net) | 26,030 | 25,179 | 12,041 | 12,326 |
| Operating investment result | ||||
| Interest and similar income | 1,577 | 1,723 | 9,130 | 9,283 |
| Operating income from financial assets and liabilities carried at fair value through income (net) | (59) | (20) | (2,159) | (351) |
| Operating realized gains/losses (net) | 58 | 117 | 4,791 | 2,081 |
| Interest expenses, excluding interest expenses from external debt | (60) | (57) | (52) | (56) |
| Operating impairments of investments (net) | (117) | (19) | (3,557) | (539) |
| Investment expenses | (201) | (192) | (787) | (697) |
| Subtotal | 1,197 | 1,553 | 7,366 | 9,721 |
| Fee and commission income | 851 | 992 | 742 | 800 |
| Other income | 150 | 1 | 10 | 4 |
| Claims and insurance benefits incurred (net) | (18,250) | (16,727) | (10,174) | (10,062) |
| Operating change in reserves for insurance and investment contracts (net)2 | (64) | (265) | (4,326) | (7,169) |
| Loan loss provisions | - | - | - | - |
| Acquisition and administrative expenses (net), excluding acquisition-related expenses | (6,909) | (6,939) | (3,478) | (2,876) |
| Fee and commission expenses | (830) | (954) | (354) | (403) |
| Operating amortization of intangible assets | - | - | (10) | (10) |
| Operating restructuring and integration expenses | - | - | (6) | (1) |
| Other expenses | - | (2) | - | (4) |
| Operating profit (loss) | 2,175 | 2,838 | 1,810 | 2,327 |
| Non-operating investment result | ||||
| Non-operating income from financial assets and liabilities carried at fair value through income (net) | (3) | (56) | (19) | 81 |
| Non-operating realized gains/losses (net) | (31) | 226 | 586 | 30 |
| Non-operating impairments of investments (net) | (463) | (110) | (118) | (20) |
| Subtotal | (497) | 60 | 449 | 90 |
| Non-operating change in reserves for insurance and investment contracts (net) | - | - | 27 | (34) |
| Interest expenses from external debt | - | - | - | - |
| Acquisition-related expenses | - | - | - | - |
| Non-operating amortization of intangible assets | (55) | (56) | (23) | (26) |
| Non-operating restructuring and integration expenses | (133) | (41) | (28) | (15) |
| Non-operating items | (685) | (37) | 425 | 15 |
| Income (loss) before income taxes | 1,490 | 2,801 | 2,236 | 2,342 |
| Income taxes | (563) | (721) | (433) | (553) |
| Net income (loss) | 926 | 2,079 | 1,802 | 1,788 |
| Net income (loss) attributable to: | ||||
| Non-controlling interests | 54 | 38 | 79 | 90 |
| Shareholders | 872 | 2,041 | 1,724 | 1,698 |
1_Total revenues comprise gross premiums written and fee and commission income in Property-Casualty, statutory premiums in Life/Health, operating revenues in Asset Management and total revenues in Corporate and Other (Banking). 2_For the six months ended 30 June 2020, includes expenses for premium refunds (net) in Property-Casualty of € 90 mn (2019: € (98) mn).
| Asset Management | Corporate and Other | Consolidation | Group | ||||
|---|---|---|---|---|---|---|---|
| 2020 | 2019 | 2020 | 2019 | 2020 | 2019 | 2020 | 2019 |
| 3,493 | 3,320 | 111 | 118 | (250) | (275) | 73,495 | 73,479 |
| - | - | - | - | - | - | 38,071 | 37,505 |
| 6 | 10 | 188 | 259 | (93) | (76) | 10,808 | 11,199 |
| 5 | 6 | (34) | 12 | (3) | (3) | (2,250) | (356) |
| - | - | - | - | 4 | (8) | 4,853 | 2,190 |
| (14) | (16) | (98) | (79) | 96 | 78 | (128) | (130) |
| - | - | - | - | - | - | (3,674) | (558) |
| - | - | (52) | (39) | 259 | 246 | (782) | (682) |
| (3) | - | 4 | 154 | 263 | 237 | 8,827 | 11,664 |
| 4,396 | 4,211 | 1,248 | 1,127 | (1,357) | (1,238) | 5,881 | 5,891 |
| - | - | - | - | - | - | 160 | 6 |
| - | - | - | - | - | 2 | (28,424) | (26,787) |
| - | - | - | - | (11) | 11 | (4,401) | (7,423) |
| - | - | (4) | (1) | - | - | (4) | (1) |
| (2,174) | (2,069) | (586) | (559) | (14) | (15) | (13,161) | (12,459) |
| (901) | (891) | (1,093) | (1,016) | 1,115 | 1,005 | (2,062) | (2,258) |
| - | - | - | - | - | - | (10) | (10) |
| - | - | - | - | - | - | (6) | (1) |
| - | - | - | - | - | - | - | (6) |
| 1,319 | 1,251 | (432) | (296) | (3) | 1 | 4,869 | 6,121 |
| (2) | - | (65) | (22) | (2) | 3 | (90) | 6 |
| - | - | 141 | 55 | 6 | 1 | 702 | 313 |
| - | - | (64) | (15) | - | - | (645) | (145) |
| (2) | - | 13 | 18 | 4 | 5 | (33) | 173 |
| - | - | - | - | - | - | 27 | (34) |
| - | - | (362) | (429) | - | - | (362) | (429) |
| - | - | - | - | - | - | - | - |
| (8) | (8) | (9) | (5) | - | - | (95) | (95) |
| (86) | (1) | (36) | (20) | - | - | (282) | (76) |
| (96) | (9) | (394) | (435) | 4 | 5 | (745) | (461) |
| 1,223 | 1,242 | (825) | (731) | 1 | 6 | 4,124 | 5,659 |
| (317) | (316) | 290 | 249 | 1 | (2) | (1,023) | (1,344) |
| 906 | 926 | (535) | (482) | 2 | 4 | 3,101 | 4,316 |
| 53 | 40 | (12) | 39 | - | - | 174 | 207 |
| 853 | 885 | (523) | (520) | 2 | 5 | 2,927 | 4,109 |
€ mn
| Total revenues | Operating profit (loss) | Net income (loss) | ||||
|---|---|---|---|---|---|---|
| Six months ended 30 June | 2020 | 2019 | 2020 | 2019 | 2020 | 2019 |
| German Speaking Countries and Central & Eastern Europe | 9,935 | 9,805 | 877 | 798 | 438 | 608 |
| Western & Southern Europe and Asia Pacific | 6,356 | 6,405 | 910 | 815 | 475 | 573 |
| Iberia & Latin America and Allianz Partners | 6,207 | 6,799 | 373 | 247 | 227 | 155 |
| Global Insurance Lines & Anglo Markets, Middle East and Africa | 15,433 | 14,142 | 14 | 979 | (213) | 743 |
| Consolidation | (4,146) | (4,235) | 1 | - | - | - |
| Total Property-Casualty | 33,785 | 32,916 | 2,175 | 2,838 | 926 | 2,079 |
| German Speaking Countries and Central & Eastern Europe | 17,563 | 17,240 | 753 | 820 | 515 | 565 |
| Western & Southern Europe and Asia Pacific | 12,856 | 13,644 | 775 | 777 | 561 | 578 |
| Iberia & Latin America | 679 | 787 | 72 | 131 | 542 | 133 |
| USA | 4,863 | 5,817 | 216 | 588 | 243 | 506 |
| Global Insurance Lines & Anglo Markets, Middle East and Africa | 573 | 432 | 19 | 30 | (40) | 21 |
| Consolidation and Other | (178) | (520) | (24) | (20) | (19) | (16) |
| Total Life/Health | 36,356 | 37,399 | 1,810 | 2,327 | 1,802 | 1,788 |
| Asset Management | 3,493 | 3,320 | 1,319 | 1,251 | 906 | 926 |
| Corporate and Other | 111 | 118 | (432) | (296) | (535) | (482) |
| Consolidation | (250) | (275) | (3) | 1 | 2 | 4 |
| Group | 73,495 | 73,479 | 4,869 | 6,121 | 3,101 | 4,316 |
€ mn
| As of 30 June 2020 |
As of 31 December 2019 |
|
|---|---|---|
| Financial assets held for trading | ||
| Debt securities | 423 | 431 |
| Equity securities | 234 | 251 |
| Derivative financial instruments | 8,049 | 6,884 |
| Subtotal | 8,706 | 7,566 |
| Financial assets designated at fair value through income | ||
| Debt securities | 3,362 | 3,005 |
| Equity securities | 2,501 | 2,616 |
| Subtotal | 5,863 | 5,620 |
| Total | 14,569 | 13,187 |
| As of 30 June 2020 |
As of 31 December 2019 |
|
|---|---|---|
| Available-for-sale investments | 599,416 | 593,178 |
| Held-to-maturity investments | 2,498 | 2,589 |
| Funds held by others under reinsurance contracts assumed | 770 | 752 |
| Investments in associates and joint ventures | 14,495 | 13,462 |
| Real estate held for investment | 13,269 | 13,049 |
| Fixed assets of alternative investments | 2,716 | 2,716 |
| Total | 633,163 | 625,746 |
€ mn
| As of 30 June 2020 | As of 31 December 2019 | |||||||
|---|---|---|---|---|---|---|---|---|
| Amortized cost | Unrealized gains |
Unrealized losses |
Fair value | Amortized cost | Unrealized gains |
Unrealized losses |
Fair value | |
| Debt securities | ||||||||
| Corporate bonds | 254,152 | 23,599 | (1,163) | 276,588 | 247,684 | 21,033 | (354) | 268,363 |
| Government and government agency bonds1 | 193,062 | 39,150 | (492) | 231,720 | 189,229 | 34,743 | (573) | 223,400 |
| MBS/ABS | 27,917 | 1,234 | (268) | 28,883 | 27,752 | 762 | (61) | 28,453 |
| Other | 6,973 | 1,484 | (38) | 8,420 | 6,721 | 1,465 | (30) | 8,156 |
| Subtotal | 482,105 | 65,468 | (1,962) | 545,612 | 471,387 | 58,004 | (1,018) | 528,373 |
| Equity securities | 42,358 | 11,915 | (469) | 53,804 | 48,723 | 16,337 | (255) | 64,805 |
| Total | 524,463 | 77,383 | (2,431) | 599,416 | 520,110 | 74,341 | (1,273) | 593,178 |
| € mn | ||
|---|---|---|
| As of 30 June 2020 |
As of 31 December 2019 |
|
| Short-term investments and certificates of deposit | 2,153 | 2,574 |
| Loans | 109,391 | 107,084 |
| Other | 4,110 | 3,072 |
| Subtotal | 115,654 | 112,730 |
| Loan loss allowance | (63) | (58) |
| Total | 115,591 | 112,672 |
| € mn | |
|---|---|
| As of 30 June 2020 |
As of 31 December 2019 |
|
|---|---|---|
| Unearned premiums | 2,632 | 1,853 |
| Reserves for loss and loss adjustment expenses | 11,237 | 10,304 |
| Aggregate policy reserves | 5,413 | 5,260 |
| Other insurance reserves | 131 | 128 |
| Total | 19,413 | 17,545 |
| Other assets | |
|---|---|
| € mn |
| As of 30 June 2020 |
As of 31 December 2019 |
|
|---|---|---|
| Receivables | ||
| Policyholders | 7,460 | 7,241 |
| Agents | 5,273 | 4,676 |
| Reinsurance | 4,549 | 3,636 |
| Other | 6,271 | 5,848 |
| Less allowances for doubtful accounts | (674) | (673) |
| Subtotal | 22,879 | 20,728 |
| Tax receivables | ||
| Income taxes | 1,933 | 1,504 |
| Other taxes | 1,966 | 2,329 |
| Subtotal | 3,899 | 3,833 |
| Accrued dividends, interest and rent | 5,746 | 6,388 |
| Prepaid expenses | 846 | 621 |
| Derivative financial instruments used for hedging, that meet the criteria for hedge accounting, and firm commitments |
976 | 702 |
| Property and equipment | ||
| Real estate held for own use | 2,934 | 2,848 |
| Software | 3,165 | 3,183 |
| Equipment | 1,322 | 1,379 |
| Right-of-use assets | 2,349 | 2,416 |
| Subtotal | 9,770 | 9,826 |
| Other assets | 2,491 | 2,434 |
| Total | 46,606 | 44,532 |
| € mn | ||
|---|---|---|
| As of 30 June 2020 |
As of 31 December 2019 |
|
|---|---|---|
| Deferred acquisition costs | ||
| Property-Casualty | 5,218 | 4,936 |
| Life/Health | 17,783 | 19,195 |
| Subtotal | 23,001 | 24,130 |
| Deferred sales inducements | 204 | 351 |
| Present value of future profits | 273 | 295 |
| Total | 23,478 | 24,777 |
| As of 30 June 2020 |
As of 31 December 2019 |
|
|---|---|---|
| Goodwill | 13,146 | 13,207 |
| Distribution agreements1 | 543 | 598 |
| Other2 | 848 | 991 |
| Total | 14,537 | 14,796 |
1_Primarily includes the long-term distribution agreements with Commerzbank AG.
2_Primarily include acquired business portfolios, customer relationships, heritable building rights, land use rights, lease rights, and brand names.
| € mn | ||
|---|---|---|
| As of 30 June 2020 |
As of 31 December 2019 |
|
| Payables on demand and other deposits | 1,201 | 1,082 |
| Repurchase agreements and collateral received from securities lending transactions and derivatives |
5,175 | 4,551 |
| Other | 8,182 | 7,812 |
| Total | 14,558 | 13,445 |
As of 30 June 2020, the reserves for loss and loss adjustment expenses of the Allianz Group totaled € 79,790 mn (31 December 2019: € 77,541 mn). The following table reconciles the beginning and ending reserves of the Property-Casualty business segment for the half-years ended 30 June 2020 and 2019.
| 2020 | 2019 | |
|---|---|---|
| As of 1 January | 65,414 | 61,442 |
| Balance carry forward of discounted loss reserves | 4,552 | 4,157 |
| Subtotal | 69,965 | 65,598 |
| Loss and loss adjustment expenses incurred | ||
| Current year | 21,248 | 18,786 |
| Prior years | (494) | (768) |
| Subtotal | 20,754 | 18,018 |
| Loss and loss adjustment expenses paid | ||
| Current year | (6,448) | (6,522) |
| Prior years | (11,635) | (11,018) |
| Subtotal | (18,083) | (17,540) |
| Foreign currency translation adjustments and other changes | (760) | 250 |
| Changes in the consolidated subsidiaries of the Allianz Group | - | 224 |
| Subtotal | 71,876 | 66,550 |
| Ending balance of discounted loss reserves | (4,575) | (4,347) |
| As of 30 June | 67,301 | 62,203 |
| € mn | ||
|---|---|---|
| As of 30 June 2020 |
As of 31 December 2019 |
|
| Aggregate policy reserves | 506,275 | 497,558 |
| Reserves for premium refunds | 88,788 | 89,781 |
| Other insurance reserves | 604 | 685 |
| Total | 595,667 | 588,023 |
| As of 30 June 2020 |
As of 31 December 2019 |
|
|---|---|---|
| Payables | ||
| Policyholders | 3,936 | 5,425 |
| Reinsurance | 3,101 | 2,103 |
| Agents | 1,745 | 1,760 |
| Subtotal | 8,782 | 9,288 |
| Payables for social security | 387 | 425 |
| Tax payables | ||
| Income taxes | 1,405 | 1,773 |
| Other taxes | 2,182 | 1,988 |
| Subtotal | 3,587 | 3,761 |
| Accrued interest and rent | 553 | 537 |
| Unearned income | 525 | 502 |
| Provisions | ||
| Pensions and similar obligations | 10,699 | 10,556 |
| Employee related | 2,635 | 2,849 |
| Share-based compensation plans | 272 | 429 |
| Restructuring plans | 304 | 322 |
| Other provisions | 1,916 | 1,957 |
| Subtotal | 15,826 | 16,114 |
| Deposits retained for reinsurance ceded | 2,308 | 2,443 |
| Derivative financial instruments used for hedging, that meet the criteria for hedge accounting, and firm commitments |
290 | 532 |
| Financial liabilities for puttable equity instruments | 2,464 | 2,073 |
| Lease liabilities | 2,748 | 2,791 |
| Other liabilities | 9,529 | 9,439 |
| Total | 46,998 | 47,904 |
| € mn | ||
|---|---|---|
| As of 30 June 2020 |
As of 31 December 2019 |
|
| Senior bonds1 | 8,520 | 8,085 |
| Money market securities | 1,225 | 1,124 |
| Total certificated liabilities | 9,745 | 9,209 |
| Subordinated bonds2 | 14,209 | 13,193 |
| Hybrid equity3 | 45 | 45 |
| Total subordinated liabilities | 14,254 | 13,238 |
1_Change due to the issuance of two senior bonds with a total volume of € 1.25 bn and the redemption of a € 0.75 bn senior bond in the first half-year of 2020.
2_Change due to the issuance of a subordinated bond in the first half-year of 2020 with a volume of € 1.0 bn.
3_Relates to hybrid equity issued by subsidiaries.
mn
| ISIN | Year of issue | Currency | Notional amount | Coupon in % | Maturity date | |
|---|---|---|---|---|---|---|
| Certificated liabilities | ||||||
| 3-months Euribor + | ||||||
| Allianz Finance II B.V., Amsterdam | DE000A19S4T0 | 2017 | EUR | 500 | 50 bps | 07 December 2020 |
| DE000A1G0RU9 | 2012 | EUR | 1,500 | 3.500 | 14 February 2022 | |
| DE000A19S4U8 | 2017 | EUR | 750 | 0.250 | 06 June 2023 | |
| DE000A28RSQ8 | 2020 | EUR | 500 | Non-interest bearing |
14 January 2025 | |
| DE000A2RWAX4 | 2019 | EUR | 750 | 0.875 | 15 January 2026 | |
| DE000A19S4V6 | 2017 | EUR | 750 | 0.875 | 06 December 2027 | |
| DE000A1HG1K6 | 2013 | EUR | 750 | 3.000 | 13 March 2028 | |
| DE000A2RWAY2 | 2019 | EUR | 750 | 1.500 | 15 January 2030 | |
| DE000A28RSR6 | 2020 | EUR | 750 | 0.500 | 14 January 2031 | |
| DE000A180B80 | 2016 | EUR | 750 | 1.375 | 21 April 2031 | |
| DE000A1HG1L4 | 2013 | GBP | 750 | 4.500 | 13 March 2043 | |
| Subordinated liabilities | ||||||
| Allianz SE, Munich | DE000A1RE1Q3 | 2012 | EUR | 1,500 | 5.625 | 17 October 2042 |
| DE000A14J9N8 | 2015 | EUR | 1,500 | 2.241 | 07 July 2045 | |
| DE000A2DAHN6 | 2017 | EUR | 1,000 | 3.099 | 06 July 2047 | |
| XS1556937891 | 2017 | USD | 600 | 5.100 | 30 January 2049 | |
| DE000A2YPFA1 | 2019 | EUR | 1,000 | 1.301 | 25 September 2049 | |
| DE000A254TM8 | 2020 | EUR | 1,000 | 2.121 | 08 July 2050 | |
| XS0857872500 | 2012 | USD | 1,000 | 5.500 | Perpetual bond | |
| DE000A1YCQ29 | 2013 | EUR | 1,500 | 4.750 | Perpetual bond | |
| DE000A13R7Z7 | 2014 | EUR | 1,500 | 3.375 | Perpetual bond | |
| XS1485742438 | 2016 | USD | 1,500 | 3.875 | Perpetual bond | |
| Allianz Finance II B.V., Amsterdam | DE000A1GNAH1 | 2011 | EUR | 1,096 | 5.750 | 08 July 2041 |
| DE000A0GNPZ3 | 2006 | EUR | 800 | 5.375 | Perpetual bond | |
| € mn | ||
|---|---|---|
| As of 30 June 2020 |
As of 31 December 2019 |
|
| Shareholders' equity | ||
| Issued capital | 1,170 | 1,170 |
| Additional paid-in capital | 27,758 | 27,758 |
| Retained earnings1,2 | 27,654 | 29,577 |
| Foreign currency translation adjustments | (2,937) | (2,195) |
| Unrealized gains and losses (net)3 | 18,491 | 17,691 |
| Subtotal | 72,136 | 74,002 |
| Non-controlling interests | 3,228 | 3,363 |
| Total | 75,363 | 77,364 |
1_As of 30 June 2020, include € (815) mn (31 December 2019: € (55) mn) related to treasury shares.
2_In February 2020, a share buy-back with an intended volume of € 1.5 bn was announced and executed since 9 March 2020. During the first half-year of 2020, Allianz SE purchased 4.9 million own shares for an amount of € 750 mn as a first tranche. The second tranche with a volume of € 750 mn was suspended in April 2020.
3_As of 30 June 2020, include € 533 mn (31 December 2019: € 415 mn) related to cash flow hedges.
In the second quarter of 2020, a total dividend of € 3,952 mn (2019: € 3, 767 mn) or € 9.60(2019: € 9.00) per qualifying share was paid to the shareholders.
| Premiums earned (net) € mn |
||||
|---|---|---|---|---|
| Six months ended 30 June |
Property Casualty |
Life/Health | Consoli dation |
Group |
| 2020 | ||||
| Premiums written | ||||
| Gross | 32,933 | 12,779 | (52) | 45,660 |
| Ceded | (3,651) | (412) | 52 | (4,012) |
| Net | 29,282 | 12,367 | - | 41,649 |
| Change in unearned premiums (net) |
(3,252) | (326) | - | (3,578) |
| Premiums earned (net) |
26,030 | 12,041 | - | 38,071 |
| 2019 | ||||
| Premiums written | ||||
| Gross | 31,924 | 12,936 | (57) | 44,803 |
| Ceded | (2,861) | (302) | 57 | (3,106) |
| Net | 29,063 | 12,634 | - | 41,697 |
| Change in unearned premiums (net) |
(3,884) | (308) | - | (4,192) |
| Premiums earned (net) |
25,179 | 12,326 | - | 37,505 |
| € mn | ||
|---|---|---|
| Six months ended 30 June | 2020 | 2019 |
| Dividends from available-for-sale investments | 1,063 | 1,420 |
| Interest from available-for-sale investments | 6,816 | 6,834 |
| Interest from loans to banks and customers | 1,857 | 1,949 |
| Rent from real estate held for investment | 497 | 461 |
| Other | 575 | 535 |
| Total | 10,808 | 11,199 |
| € mn | ||
|---|---|---|
| Six months ended 30 June | 2020 | 2019 |
| Income from financial assets and liabilities held for trading (net) |
(1,290) | (681) |
| Income from financial assets and liabilities designated at fair value through income (net) |
(10) | 407 |
| Income from financial liabilities for puttable equity instruments (net) |
(15) | (186) |
| Foreign currency gains and losses (net)1 | (1,026) | 110 |
| Total | (2,341) | (350) |
| 1_These foreign currency gains and losses arise subsequent to initial recognition on all assets and liabilities denominated |
in a foreign currency that are monetary items and not measured at fair value through income.
| € mn | ||
|---|---|---|
| Six months ended 30 June | 2020 | 2019 |
| REALIZED GAINS | ||
| Available-for-sale investments | ||
| Equity securities | 2,533 | 1,197 |
| Debt securities | 4,244 | 1,616 |
| Subtotal | 6,778 | 2,813 |
| Other | 757 | 199 |
| Subtotal | 7,534 | 3,012 |
| REALIZED LOSSES | ||
| Available-for-sale investments | ||
| Equity securities | (1,480) | (191) |
| Debt securities | (469) | (265) |
| Subtotal | (1,949) | (457) |
| Other | (30) | (52) |
| Subtotal | (1,979) | (509) |
| Total | 5,555 | 2,503 |
| € mn | ||
|---|---|---|
| Six months ended 30 June | 2020 | 2019 |
| PROPERTY-CASUALTY | ||
| Fees from credit and assistance business | 661 | 798 |
| Service agreements | 191 | 194 |
| Subtotal | 851 | 992 |
| LIFE/HEALTH | ||
| Investment advisory | 660 | 707 |
| Service agreements | 82 | 94 |
| Subtotal | 742 | 800 |
| ASSET MANAGEMENT | ||
| Management and advisory fees | 4,091 | 3,870 |
| Loading and exit fees | 199 | 193 |
| Performance fees | 72 | 122 |
| Other | 34 | 26 |
| Subtotal | 4,396 | 4,211 |
| CORPORATE AND OTHER | ||
| Service agreements | 910 | 781 |
| Investment advisory and banking activities | 338 | 346 |
| Subtotal | 1,248 | 1,127 |
| CONSOLIDATION | (1,357) | (1,238) |
| Total | 5,881 | 5,891 |
Claims and insurance benefits incurred (net)
| € mn | ||||
|---|---|---|---|---|
| Six months ended 30 June |
Property Casualty |
Life/Health | Consoli dation |
Group |
| 2020 | ||||
| Gross | (20,754) | (10,479) | 34 | (31,199) |
| Ceded | 2,504 | 305 | (34) | 2,774 |
| Net | (18,250) | (10,174) | - | (28,424) |
| 2019 | ||||
| Gross | (18,018) | (10,346) | 36 | (28,328) |
| Ceded | 1,291 | 284 | (34) | 1,540 |
| Net | (16,727) | (10,062) | 2 | (26,787) |
| € mn | ||||
|---|---|---|---|---|
| Six months ended 30 June |
Property Casualty |
Life/Health | Consoli dation |
Group |
| 2020 | ||||
| Gross | (75) | (4,428) | (11) | (4,513) |
| Ceded | 11 | 128 | - | 139 |
| Net | (64) | (4,299) | (11) | (4,374) |
| 2019 | ||||
| Gross | (266) | (7,314) | 11 | (7,570) |
| Ceded | 1 | 111 | - | 113 |
| Net | (265) | (7,203) | 11 | (7,457) |
€ mn
| Six months ended 30 June | 2020 | 2019 |
|---|---|---|
| Liabilities to banks and customers | (37) | (44) |
| Deposits retained for reinsurance ceded | (42) | (36) |
| Certificated liabilities | (80) | (127) |
| Subordinated liabilities | (280) | (304) |
| Other | (52) | (48) |
| Total | (491) | (559) |
| € mn | ||
|---|---|---|
| Six months ended 30 June | 2020 | 2019 |
| Impairments | ||
| Available-for-sale investments | ||
| Equity securities | (3,694) | (625) |
| Debt securities | (511) | (15) |
| Subtotal | (4,205) | (639) |
| Other | (115) | (65) |
| Non-current assets and assets of disposal groups classified as held for sale |
- | (2) |
| Subtotal | (4,320) | (706) |
| Reversals of impairments | 1 | 3 |
| Total | (4,319) | (703) |
€ mn
| Six months ended 30 June | 2020 | 2019 |
|---|---|---|
| Investment management expenses | (436) | (390) |
| Expenses from real estate held for investment | (205) | (186) |
| Expenses from fixed assets of alternative investments | (141) | (106) |
| Total | (782) | (682) |
| € mn | ||
|---|---|---|
| Six months ended 30 June | 2020 | 2019 |
| PROPERTY-CASUALTY | ||
| Acquisition costs1 | (5,177) | (5,269) |
| Administrative expenses | (1,731) | (1,671) |
| Subtotal | (6,909) | (6,939) |
| LIFE/HEALTH | ||
| Acquisition costs | (2,531) | (1,950) |
| Administrative expenses | (947) | (926) |
| Subtotal | (3,478) | (2,876) |
| ASSET MANAGEMENT | ||
| Personnel expenses | (1,348) | (1,268) |
| Non-personnel expenses | (826) | (802) |
| Subtotal | (2,174) | (2,069) |
| CORPORATE AND OTHER | ||
| Administrative expenses | (586) | (559) |
| Subtotal | (586) | (559) |
| CONSOLIDATION | (14) | (15) |
| Total | (13,161) | (12,459) |
| 1_Include € 457 mn (2019: € 328 mn) ceded acquisition costs. |
| € mn | ||
|---|---|---|
| Six months ended 30 June | 2020 | 2019 |
| PROPERTY-CASUALTY | ||
| Fees from credit and assistance business | (652) | (773) |
| Service agreements | (178) | (181) |
| Subtotal | (830) | (954) |
| LIFE/HEALTH | ||
| Investment advisory | (299) | (339) |
| Service agreements | (55) | (64) |
| Subtotal | (354) | (403) |
| ASSET MANAGEMENT | ||
| Commissions | (883) | (881) |
| Other | (18) | (10) |
| Subtotal | (901) | (891) |
| CORPORATE AND OTHER | ||
| Service agreements | (917) | (823) |
| Investment advisory and banking activities | (176) | (193) |
| Subtotal | (1,093) | (1,016) |
| CONSOLIDATION | 1,115 | 1,005 |
| Total | (2,062) | (2,258) |
€ mn
| Six months ended 30 June | 2020 | 2019 |
|---|---|---|
| Current income taxes | (564) | (1,650) |
| Deferred income taxes | (459) | 307 |
| Total | (1,023) | (1,344) |
For the six months ended 30 June 2020 and 2019, the income taxes on components of other comprehensive income consist of the following:
| Total | (467) | (2,418) |
|---|---|---|
| Changes in actuarial gains and losses on defined benefit plans |
74 | 326 |
| Items that may never be reclassified to profit or loss | ||
| Miscellaneous | 35 | (5) |
| Share of other comprehensive income of associates and joint ventures |
(24) | (2) |
| Cash flow hedges | (29) | (54) |
| Available-for-sale investments | (533) | (2,716) |
| Foreign currency translation adjustments | 10 | 33 |
| Items that may be reclassified to profit or loss in future periods | ||
| Six months ended 30 June | 2020 | 2019 |
The following table compares the carrying amount with the fair value of the Allianz Group's financial assets and financial liabilities:
| As of 30 June 2020 | As of 31 December 2019 | ||||
|---|---|---|---|---|---|
| Carrying amount |
Fair value | Carrying amount |
Fair value | ||
| FINANCIAL ASSETS | |||||
| Cash and cash equivalents | 22,987 | 22,987 | 21,075 | 21,075 | |
| Financial assets held for trading | 8,706 | 8,706 | 7,566 | 7,566 | |
| Financial assets designated at fair value through income | 5,863 | 5,863 | 5,620 | 5,620 | |
| Available-for-sale investments | 599,416 | 599,416 | 593,178 | 593,178 | |
| Held-to-maturity investments | 2,498 | 2,829 | 2,589 | 2,887 | |
| Investments in associates and joint ventures | 14,495 | 17,722 | 13,462 | 16,754 | |
| Real estate held for investment | 13,269 | 23,745 | 13,049 | 23,463 | |
| Loans and advances to banks and customers | 115,591 | 136,456 | 112,672 | 131,216 | |
| Financial assets for unit-linked contracts | 125,728 | 125,728 | 132,168 | 132,168 | |
| FINANCIAL LIABILITIES | |||||
| Financial liabilities held for trading | 19,270 | 19,270 | 18,049 | 18,049 | |
| Liabilities to banks and customers | 14,558 | 14,604 | 13,445 | 13,475 | |
| Financial liabilities for unit-linked contracts | 125,728 | 125,728 | 132,168 | 132,168 | |
| Financial liabilities for puttable equity instruments | 2,464 | 2,464 | 2,073 | 2,073 | |
| Certificated liabilities | 9,745 | 10,830 | 9,209 | 10,375 | |
| Subordinated liabilities | 14,254 | 14,910 | 13,238 | 14,334 |
As of 30 June 2020, fair values could not be reliably measured for equity investments whose carrying amounts totaled € 78 mn (31 December 2019: € 81 mn). These investments are primarily investments in privately held corporations and partnerships.
The following financial assets and liabilities are carried at fair value on a recurring basis:
The following tables present the fair value hierarchy for financial instruments carried at fair value in the consolidated balance sheets as of 30 June 2020 and 31 December 2019:
| € mn | ||||||||
|---|---|---|---|---|---|---|---|---|
| As of 30 June 2020 | As of 31 December 2019 | |||||||
| Level 11 | Level 22 | Level 33 | Total | Level 11 | Level 22 | Level 33 | Total | |
| FINANCIAL ASSETS | ||||||||
| Financial assets carried at fair value through income | ||||||||
| Financial assets held for trading | 1,085 | 7,577 | 44 | 8,706 | 394 | 7,099 | 73 | 7,566 |
| Financial assets designated at fair value through income | 3,751 | 1,902 | 211 | 5,863 | 3,740 | 1,723 | 158 | 5,620 |
| Subtotal | 4,836 | 9,479 | 255 | 14,569 | 4,133 | 8,822 | 231 | 13,187 |
| Available-for-sale investments | ||||||||
| Corporate bonds | 12,142 | 236,640 | 27,807 | 276,588 | 11,645 | 230,327 | 26,391 | 268,363 |
| Government and government agency bonds | 17,479 | 213,430 | 811 | 231,720 | 17,836 | 204,721 | 843 | 223,400 |
| MBS/ABS | 38 | 28,560 | 286 | 28,883 | 46 | 28,154 | 253 | 28,453 |
| Other | 933 | 1,243 | 6,244 | 8,420 | 1,102 | 1,123 | 5,932 | 8,156 |
| Equity securities | 33,941 | 512 | 19,352 | 53,804 | 45,755 | 878 | 18,173 | 64,805 |
| Subtotal | 64,532 | 480,384 | 54,499 | 599,416 | 76,384 | 465,203 | 51,591 | 593,178 |
| Financial assets for unit-linked contracts | 96,154 | 28,334 | 1,239 | 125,728 | 103,695 | 27,314 | 1,159 | 132,168 |
| Total | 165,522 | 518,198 | 55,993 | 739,713 | 184,212 | 501,338 | 52,982 | 738,532 |
| FINANCIAL LIABILITIES | ||||||||
| Financial liabilities carried at fair value through income | 148 | 5,021 | 14,101 | 19,270 | 130 | 4,832 | 13,087 | 18,049 |
| Financial liabilities for unit-linked contracts | 96,154 | 28,334 | 1,239 | 125,728 | 103,695 | 27,314 | 1,159 | 132,168 |
| Financial liabilities for puttable equity instruments | 1,927 | 242 | 295 | 2,464 | 1,674 | 85 | 314 | 2,073 |
| Total | 98,229 | 33,597 | 15,635 | 147,461 | 105,499 | 32,231 | 14,561 | 152,290 |
| 1_Quoted prices in active markets. 2_Market observable inputs. |
The valuation methodologies used for financial instruments carried at fair value, the policy for determining the levels within the fair value hierarchy, and the significant Level-3 portfolios, including the respective narratives and sensitivities, are described in the Allianz Group's Annual Report 2019. No material changes have occurred since this report was published.
3_Non-market observable inputs.
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.
Transfers into/out of level 3 may occur due to a reassessment of the input parameters.
The following tables show reconciliations of the financial instruments carried at fair value and classified as level 3.
| Financial | Available-for | Available-for | |||
|---|---|---|---|---|---|
| assets carried at fair value through income |
sale investments – Debt securities1 |
sale investments – Equity securities |
Financial assets for unit linked contracts |
Total | |
| Carrying value (fair value) as of 1 January 2020 | 231 | 33,418 | 18,173 | 1,159 | 52,982 |
| Additions through purchases and issues | 64 | 2,191 | 3,095 | 119 | 5,469 |
| Net transfers into (out of) Level 3 | 3 | (148) | (36) | (11) | (193) |
| Disposal through sales and settlements | (361) | (832) | (830) | (27) | (2,050) |
| Net gains (losses) recognized in consolidated income statement | 319 | (129) | (9) | 4 | 185 |
| Net gains (losses) recognized in other comprehensive income | - | 629 | (684) | - | (55) |
| Impairments | - | (5) | (350) | - | (355) |
| Foreign currency translation adjustments | (2) | (52) | (7) | (2) | (63) |
| Changes in the consolidated subsidiaries of the Allianz Group | - | 77 | (1) | (3) | 73 |
| Carrying value (fair value) as of 30 June 2020 | 255 | 35,148 | 19,352 | 1,239 | 55,993 |
| Net gains (losses) recognized in consolidated income statement held at the reporting date | (35) | (72) | - | 4 | (102) |
| 1_Primarily include corporate bonds. |
€ mn
| Financial liabilities carried at fair value through income |
Financial liabilities for unit-linked contracts |
Financial liabilities for puttable equity instruments |
Total | |
|---|---|---|---|---|
| Carrying value (fair value) as of 1 January 2020 | 13,087 | 1,159 | 314 | 14,561 |
| Additions through purchases and issues | 362 | 119 | - | 481 |
| Net transfers into (out of) Level 3 | - | (11) | - | (11) |
| Disposal through sales and settlements | (546) | (27) | (19) | (592) |
| Net losses (gains) recognized in consolidated income statement | 1,219 | 4 | - | 1,223 |
| Net losses (gains) recognized in other comprehensive income | - | - | - | - |
| Impairments | - | - | - | - |
| Foreign currency translation adjustments | (22) | (2) | - | (24) |
| Changes in the consolidated subsidiaries of the Allianz Group | - | (3) | - | (3) |
| Carrying value (fair value) as of 30 June 2020 | 14,101 | 1,239 | 295 | 15,635 |
| Net losses (gains) recognized in consolidated income statement held at the reporting date | 1,195 | 4 | - | 1,199 |
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, or if fair value less cost to sell is used as the measurement basis under IFRS 5, corresponding disclosures can be found in note 27.
In July 2020, complaintswere filed against certain Allianz Global Investors (AllianzGI) entities as well as, in part, Allianz SE and Allianz Asset Management GmbH in the U.S. Federal Court for the Southern District of New York, in connection with losses suffered by investors in AllianzGI's Structured Alpha funds during the COVID-19-related market downturn. Allianz expects that other investors in such AllianzGI funds may bring similar actions. Allianz is currently reviewing the complaints and intends to defend vigorously against the allegations therein, which Allianz believes to be legally and factually flawed. AllianzGI U.S. has also received a related information request from the U.S. Securities and Exchange Commission (SEC) regarding AllianzGI's Structured Alpha funds, and is fully cooperating with the SEC.
The following table shows the composition of commitments as of 30 June 2020:
| € mn | ||
|---|---|---|
| As of 30 June 2020 |
As of 31 December 2019 |
|
| Commitments to acquire interests in associates and available for-sale investments |
21,715 | 20,691 |
| Debt investments | 7,688 | 8,197 |
| Other | 4,670 | 4,545 |
| Total | 34,073 | 33,433 |
As described in the Allianz Group's Annual Report 2019, the Tier 1 Capital Securities issued by HT1 Funding GmbH have been redeemed on 30 June 2020. This automatically terminated the contingent indemnity agreement between Allianz and HT1 Funding GmbH, pursuant to which Allianz was, under certain circumstances, obliged to make payments to HT1.
All other contingent liabilities and commitments had no significant changes compared to the consolidated financial statements for the year ended 31 December 2019.
The Allianz Group was not subject to any subsequent events that significantly impacted the Group's financial results after the balance sheet date and before the condensed consolidated interim financial statements were authorized for issue.
To the best of our knowledge, and in accordance with the applicable reporting principles for interim financial reporting, the condensed consolidated interim financial statements give a true and fair view of the assets, liabilities, financial position and profit or loss of the group, and the interim 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 material opportunities and risks associated with the expected development of the group for the remaining months of the financial year.
Munich, 3 August 2020
Allianz SE The Board of Management
Iván de la Sota Giulio Terzariol
Oliver Bäte Sergio Balbinot
Jacqueline Hunt Dr. Christof Mascher
Niran Peiris Dr. Klaus-Peter Röhler
We have reviewed the condensed consolidated interim financial statements - comprising the consolidated balance sheet, consolidated income statement, consolidated statement of comprehensive income, consolidated statement of changes in equity, consolidated statement of cash flows and selected explanatory notes – and the interim group management report of Allianz SE, Munich, for the period from 1 January to 30 June 2020 which are part of the half-year financial report pursuant to § (Article) 115 WpHG ("Wertpapierhandelsgesetz": German Securities Trading Act). The preparation of the condensed consolidated interim financial statements in accordance with the IFRS applicable to interim financial reporting as adopted by the EU and of the interim group management report in accordance with the provisions of the German Securities Trading Act applicable to interim group management reports is the responsibility of the parent Company's Board of Managing Directors. Our responsibility is to issue a review report on the condensed consolidated interim financial statements and on the interim group management report based on our review.
We conducted our review of the condensed consolidated interim financial statements and the interim group management report in accordance with German generally accepted standards for the review 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 review so that we can preclude through critical evaluation, with moderate assurance, that the condensed consolidated interim financial statements have not been prepared, in all material respects, in accordance with the IFRS applicable to interim financial reporting as adopted by the EU and that the interim group management report has not been prepared, in all material respects, in accordance with the provisions of the German Securities Trading Act applicable to interim group management reports. A review is limited primarily to inquiries of company personnel and analytical procedures and therefore does not provide the assurance attainable in a financial statement audit. Since, in accordance with our engagement, we have not performed a financial statement audit, we cannot express an audit opinion.
Based on our review, no matters have come to our attention that cause us to presume that the condensed consolidated interim financial statements have not been prepared, in all material respects, in accordance with the IFRS applicable to interim financial reporting as adopted by the EU nor that the interim group management report has not been prepared, in all material respects, in accordance with the provisions of the German Securities Trading Act applicable to interim group management reports.
Munich, 4 August 2020
PricewaterhouseCoopers GmbH Wirtschaftsprüfungsgesellschaft
Richard Burger Clemens Koch Wirtschaftsprüfer Wirtschaftsprüfer
(German Public Auditor) (German Public Auditor)
| Important dates for shareholders and analysts1 | |
|---|---|
| Financial Results 3Q | 6 November 2020 |
| Financial Results 2020 | 19 February 2021 |
| Annual Report 2020 | 5 March 2021 |
| Annual General Meeting | 5 May 2021 |
| Financial Results 1Q | 12 May 2021 |
| Financial Results 2Q/Interim Report 6M | 6 August 2021 |
| Financial Results 3Q | 10 November 2021 |
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 financial-year results ahead of the dates mentioned above. As we can never rule out changes of dates, we recommend checking our financial calendar at www.allianz.com/financialcalendar.
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