Interim / Quarterly Report • Sep 5, 2017
Interim / Quarterly Report
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Allianz Group Interim Report 2017
20 Consolidated Balance Sheets
The consolidated 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.
All references to chapters, pages, notes, internet pages, etc. within this report are also linked.
KEY FIGURES ALLIANZ GROUP1
| six months ended 30 June | 2017 | 2016 | Delta | |
|---|---|---|---|---|
| Total revenues2 | € mn | 66,218 | 64,759 | 1,459 |
| Operating profit3,4,5 | € mn | 5,860 | 5,063 | 797 |
| Net income3,4 | € mn | 4,013 | 3,425 | 587 |
| thereof: attributable to shareholders4 | € mn | 3,810 | 3,231 | 579 |
| Solvency II capitalization ratio6,7 | % | 219 | 218 | 2%-p |
| Return on equity4,8 | % | 13.4 | 12.3 | 1.2%-p |
| Earnings per share4 | € | 8.45 | 7.10 | 1.35 |
| Diluted earnings per share4 | € | 8.44 | 6.92 | 1.52 |
The world economy currently finds itself in fairly good shape and has gained some momentum in the course of the first half of 2017. Most industrialized countries have registered solid growth. The U.S. economy experienced only subdued growth in the first quarter of 2017, then firmed up somewhat in the second quarter. In the Eurozone, economic recovery continued. Private consumption benefited from rising employment. In the emerging markets, economic momentum improved as well. Growth in emerging Asian economies was supported by an acceleration in world trade and stable growth in China. Russia, having experienced two years of recession, enjoyed positive albeit weak growth.
The heightened global political uncertainty failed to rattle the financial markets; stock market volatility in the first half-year was – overall – low. On the monetary policy front, in light of slightly betterthan-expected Eurozone economic data, the European Central Bank started to tweak its forward guidance. Although the changes in communication were cautious, markets reacted sensitively to the prospect of potential tapering by the European Central Bank. In the United States, the Federal Reserve continued to raise the federal funds rate: In both March and June, it lifted the target policy rate range by 25 basis points, bringing it to 1.0 to 1.25%. Moreover, in June
the Federal Reserve announced its intention to begin implementing a balance sheet normalization program this year.
Yields on 10-year German government bonds closed the end of June 2017 at 0.5%, about 30 basis points higher than at year-end 2016. Spreads on Eurozone government bonds moved in different directions. Spreads on French government bonds benefited from the outcome of the presidential and parliamentary elections and ended the first half-year at 35 basis points. Major stock markets around the globe showed positive performance, with a number of indices reaching new all-time highs. The Euro appreciated strongly against the U.S. Dollar in the first half of 2017. The U.S. Dollar-to-Euro exchange rate was 1.14 at the end of June 2017 (end of 2016: 1.05).
For the insurance industry, the first half of 2017 presented a rather mixed environment: While top lines grew in many markets, yields remained suppressed and insured losses form natural catastrophes remained relatively high, albeit below the long-term average. In particular the U.S. market had to cope with numerous tornadoes, hail storms, floods, and mudslides. As a consequence, bottom lines remained under pressure. Added to that the digital transformation, which continues to gather speed, thus increasing competition and forcing insurers to adapt their business models as quickly as possible.
In the asset management industry, fund flows accelerated, particularly in the United States and Germany, both into bonds and into riskier asset types such as multi-assets and equity products. In the last week of June, bonds experienced a global sell-off, especially in the United States, as major central banks signaled they were considering a less accommodative monetary policy for the near future.
Our total revenues went up 2.3%, in the first half of 2017 – a 2.6% increase on an internal basis9 compared to the same period of the previous year. All business segments contributed to this, with the Life/Health business segment registering the strongest increase, mainly due to premium growth in capital-efficient products in Germany as well as in unit-linked products in Asia-Pacific and Italy.
Our operating investment result decreased by € 14 mn to € 12,083 mn. We recorded higher operating losses from financial assets and liabilities carried at fair value through income (net), largely due to a negative impact from fixed income duration management in our German Life business. In addition, operating realized gains/losses (net) declined as a result of lower debt realizations. We also recorded lower equity impairments, as the first half of 2016 had seen a downturn of some of the major equity markets.
9_Internal total revenue growth excludes the effects of foreign currency translation as well as acquisitions and disposals. Please refer to page 16 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.
Our operating profit1 went up, mostly owing to our Life/Health business segment, which recorded higher investment margins mainly in the United States, Spain, and the German life business, as well as higher technical margins in the United States and France. Our Asset Management business segment recorded strong operating profit growth, largely due to increased average third-party assets under management at PIMCO, as the first half of 2017 saw a high level of third-party net inflows. Operating profit also increased in our Property-Casualty business segment, mainly because the underwriting result benefited from lower claims from natural catastrophe events but also as an effect of profitability improvements at our operating entities. An increase in the operating result recorded by our Corporate and Other business segment was driven by both the Holding & Treasury and Banking reportable segments.
Our non-operating result improved by € 69 mn to a loss of € 263 mn. This development was impacted by lower realized gains and increased restructuring charges while the comparison period was burdened by the negative net impact from our South Korean Life/Health business.
Income taxes increased by € 278 mn to € 1,585 mn and the effective tax rate increased to 28.3% (6M 2016: 27.6%), mainly driven by less tax-free income.
The increase in net income reflects the higher operating profit, partly offset by the rise in income taxes.
Our shareholders' equity2 decreased by € 2.9 bn to € 64.2 bn, with € 1.6 bn of this decrease being attributable to the share buy-back program. During the first half-year of 2017, Allianz SE purchased approximately 9.6 million own shares as part of its share-buy-back program announced in February 2017 with a total volume of up to € 3.0 bn.3 Over the same period, our Solvency II capitalization ratio grew to 219%.
For a more detailed description of the results generated by our business segments – specifically, Property-Casualty insurance operations, Life/Health insurance operations, Asset Management, and Corporate and Other – please consult the respective chapter s on the following pages.
In our Annual Report 2016, we have described our opportunity and risk profile and addressed potential risks that could adversely affect our business as well as our risk profile. The statements contained in that report remain largely unchanged. We continue to monitor developments in order to be able to react in a timely and appropriate manner, should the need arise. For further information, please refer to the chapter Outlook, which starts on page 12.
For information on events after the balance sheet date, please refer to note 33 to the condensed consolidated interim financial statements.
Effective 1 January 2017, the Allianz Group reorganized the structure of its insurance activities to reflect the changes in the responsibilities of the Board of Management. The former reportable segment Asia Pacific has been allocated to the reportable segment Western & Southern Europe, Middle East, Africa, Asia Pacific. Previously reported information has been adjusted to reflect this change in the composition of the Allianz Group's reportable segments.
Additionally, some minor reallocations between the reportable segments have been made.
The Allianz Group's strategy is described in the Risk and Opportunity Report in our Annual Report 2016. 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 2016.
The Allianz Group operates and manages its activities through four business segments, which have all been mentioned above. For further information, please refer to note 4 to the condensed consolidated interim financial statements or to the Business Operations chapter in our Annual Report 2016.
Liverpool Victoria (LV=) will receive £ 500 mn from Allianz in exchange for a 49 percent stake in Liverpool Victoria General Insurance (LV= GI). The new, long-term joint venture LV= GI, will acquire Allianz's personal home and motor insurer's renewal rights while Allianz will obtain LV= GI's commercial insurer's renewal rights. For further information, please refer to note 33 to the condensed consolidated interim financial statements.
1_Prior year figures have been adjusted due to an updated operating profit definition and an accounting policy change. For further information, please refer to note 4 and note 2, respectively, to the condensed consolidated interim financial statements.
2_For further information on shareholders' equity, please refer to page 14 of the Balance Sheet chapter.
3_For further information on the share buy-back program, please refer to note 17 to the condensed consolidated interim financial statements.
| six months ended 30 June | 2017 | 2016 | Delta | |
|---|---|---|---|---|
| Gross premiums written | € mn | 29,388 | 28,856 | 532 |
| Operating profit2 | € mn | 2,705 | 2,572 | 133 |
| Net income | € mn | 2,070 | 1,922 | 148 |
| Loss ratio3 | % | 66.0 | 66.4 | (0.4) %-p |
| Expense ratio4 | % | 28.6 | 28.4 | 0.2%-p |
| Combined ratio5 | % | 94.6 | 94.9 | (0.2) %-p |
On a nominal basis, we recorded an increase in gross premiums written compared to the first six months of the previous year.
Foreign currency translation effects amounted to € 1 mn.7 Consolidation/deconsolidation effects were positive at € 176 mn, largely due to a portfolio purchase in the Netherlands and the acquisition of a new insurance entity in Morocco.
On an internal basis, our premiums went up 1.2%, driven by a positive price effect of 1.1% and a positive volume effect of 0.2%.
The following operations contributed positively to internal growth:
AWP: Gross premiums grew to € 2,749 mn – an increase of 9.1 % on an internal basis. It was owed to our U.S. travel business and our assistance business in France.
Germany: Gross premiums amounted to € 6,251 mn. This internal growth of 1.8 % was mainly due to positive price effects in our motor insurance business.
Spain: Gross premiums stood at € 1,325 mn – up 6.1 % on an internal basis. This was driven by positive price and volume effects across the portfolio.
The following operations contributed negatively to internal growth:
AGCS: Gross premiums fell to € 3,939 mn – a decrease of 8.6 % on an internal basis. It was largely due to seasonality effects at Allianz Risk Transfer, as well as to the discontinuation of our U.S. crop business and re-underwriting activities in our marine business.
Turkey: Gross premiums decreased to € 644 mn. This decrease – 8.3 % on an internal basis – largely resulted from our strategic withdrawal from the motor third-party liability insurance business following a regulatory change.
Italy: Gross premiums amounted to € 2,225 mn. The decline of 1.9 % on an internal basis resulted from unfavorable price effects in our motor insurance business.
| € MN | |||
|---|---|---|---|
| six months ended 30 June | 2017 | 2016 | Delta |
| Underwriting result | 1,136 | 1,045 | 91 |
| Operating investment income (net) | 1,490 | 1,473 | 17 |
| Other result1 | 79 | 54 | 25 |
| Operating profit | 2,705 | 2,572 | 133 |
1_Consists of fee and commission income/expenses and other income/expenses.
Our operating profit increased, compared to the same period of the previous year. This was mainly driven by the fact that our underwriting result benefited from lower claims from natural catastrophe events, but also from wide-spread profitability improvements across our operating entities.
A strong improvement on the claims side was partially offset by a lower contribution of run-off compared to the previous year and, to a smaller extent, by a slight deterioration on the expenses side. Our combined ratio improved by 0.2 percentage points to 94.6%.
| six months ended 30 June | 2017 | 2016 | Delta |
|---|---|---|---|
| Premiums earned (net) | 23,557 | 22,823 | 735 |
| Accident year claims | (16,326) | (16,302) | (23) |
| Previous year claims (run-off) | 770 | 1,141 | (371) |
| Claims and insurance benefits incurred (net) |
(15,556) | (15,162) | (394) |
| Acquisition and administrative expenses (net) |
(6,739) | (6,492) | (247) |
| Change in reserves for insurance and investment contracts (net) (without expenses for premium refunds)1 |
(127) | (124) | (3) |
| Underwriting result | 1,136 | 1,045 | 91 |
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 24 to the condensed consolidated interim financial statements.
Our accident year loss ratio8 stood at 69.3% – a 2.1 percentage point improvement compared to the first half of the previous year. In the first six months of this year our losses from natural catastrophes were lower than in the same period of 2016, reducing the impact on our combined ratio from 2.3% to 1.1%, representing a decrease of 1.2 percentage points.
Excluding losses from natural catastrophes, our accident year loss ratio improved to 68.2%. This was mainly due to profitability improvements across the Allianz Group.
1_For further information on Allianz Property-Casualty figures, please refer to note 4 to the condensed consolidated interim financial statements.
2_In light of the new operating profit definition, restructuring charges are reported outside of operating profit unless shared with policyholders. Prior year figures have been adjusted accordingly.
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 gross premium written 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 2017 compared to 2016.
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:
AGCS: 1.0 percentage points. The accident year loss ratio benefited from the absence of natural catastrophes in 2017, as opposed to the first half-year of 2016.
France: 0.3 percentage points. The improvement resulted from lower losses from natural catastrophe events but also from an improvement in the attritional profitability.
Germany: 0.2 percentage points. This was driven by a benign natural catastrophe environment.
The following operation contributed negatively to the development of our accident year loss ratio:
Australia: 0.2 percentage points. This was driven by higher losses from natural catastrophes but also by a customer reimbursement for unused insurance.
Our positive run-off result amounted to € 770 mn, compared to € 1,141 mn in the first half-year of 2016. This translates into a run-off ratio of 3.3%. The reduction in run-off is due to the fact we had seen a more positive loss development in previous years at our reinsurance operation as well as reserve releases from short-tail lines at AGCS in the first six months of 2016. Furthermore, we saw a negative impact in the beginning of 2017 stemming from the Ogden rate change which affected our operations Reinsurance, United Kingdom and Ireland.
Total expenses amounted to € 6,739 mn in the first half of 2017, compared to € 6,492 mn in the same period of 2016. Our expense ratio increased by 0.2 percentage points. This was mainly due to higher administrative expenses.
| six months ended 30 June | 2017 | 2016 | Delta |
|---|---|---|---|
| Interest and similar income (net of interest expenses) |
1,708 | 1,688 | 20 |
| Operating income from financial assets and liabilities carried at fair value through income (net) |
(51) | (25) | (26) |
| Operating realized gains (net) | 152 | 157 | (5) |
| Operating impairments of investments (net) |
(6) | (43) | 37 |
| Investment expenses | (183) | (175) | (8) |
| Expenses for premiums refunds (net)1 | (131) | (129) | (2) |
| Operating investments income (net)2 |
1,490 | 1,473 | 17 |
1_Refers to policyholder participation, mainly from APR business (accident insurance with premium refunds), and consists of the investment-related part of "change in reserves for insurance and investment contracts (net)". For further information, please refer to note 24 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 4 to the condensed consolidated interim financial statements - and expenses for premium refunds (net) (policyholder participation).
Our operating investment income (net) increased slightly, mainly due to lower impairments on equities in our APR business (accident insurance with premium refunds) and higher net interest and similar income, partially offset by an unfavorable foreign currency translation result net of hedging.
The positive development of the net interest and similar income resulted from higher income from equities that overcompensated the lower income on debt securities.
| € MN | |||
|---|---|---|---|
| six months ended 30 June | 2017 | 2016 | Delta |
| Fee and commission income | 911 | 759 | 152 |
| Other income | 32 | 1 | 31 |
| Fee and commission expenses | (864) | (706) | (158) |
| Other expenses | - | - | - |
| Other result | 79 | 54 | 25 |
Our other result increased, mainly driven by realized gains from the sale of real estate held for own use by our Italian subsidiary.
Net income increased, primarily driven by the increase in operating profit and lower income taxes.
KEY FIGURES LIFE/HEALTH1
| six months ended 30 June | 2017 | 2016 | Delta | |
|---|---|---|---|---|
| Statutory premiums2 | € mn | 33,619 | 32,968 | 650 |
| Operating profit3,4,5 | € mn | 2,282 | 1,859 | 423 |
| Net income3 | € mn | 1,611 | 941 | 670 |
| Return on equity3,6 | % | 13.3 | 10.7 | 2.6%-p |
Our South Korean business was disposed of at the end of 2016. In order to best reflect the actual underlying drivers of our operating profit, we report it for the first six months of 2016 excluding South Korea, and specify the South Korean operating loss as a separate item. Similarly, the figures for present value of new business premiums are shown without effects from the South Korean business. To ensure consistency with the group income statement, however, prior year statutory premiums are presented including premiums collected from our South Korean business. 2,3,4,5,6,
On a nominal basis, statutory premiums increased by 2.0 % in the first half of 2017. This includes favorable foreign currency translation effects of € 159 mn and negative (de-)consolidation effects of € 627 mn. On an internal basis7 , statutory premiums increased by € 1,119 mn – or 3.5 % – to € 33,446 mn.
In the German life business, statutory premiums increased to € 10,105 mn, a 13.2% growth on an internal basis. We recorded higher sales in our business with capital-efficient products, which more than offset the decline in sales of traditional life products – including long-term interest rate guarantees. Statutory premiums in the German health business climbed to € 1,674 mn, a 1.8% increase on an internal basis, driven by the acquisition of new customers in the supplementary health care coverage.
Statutory premiums in the United States amounted to € 5,068 mn, down 25.1% on an internal basis. This was caused by a decrease in
1_For further information on Allianz Life/Health figures, please refer to note 4 to the condensed consolidated interim financial statements.
sales of fixed-indexed annuities, as there was uncertainty around local legislations and the 2016 marketing activities had been concluded. Sales of traditional variable annuities declined as well.
In Italy, statutory premiums rose to € 5,577 mn, an increase of 8.5% on an internal basis. This was predominantly due to higher unitlinked single premium sales, partially offset by a decrease in traditional life business.
In France, statutory premiums stood at € 4,146 mn. The increase – 6.9% on an internal basis – was largely owed to a growth in capitalefficient and unit-linked products with guarantees.
In the Asia-Pacific region, statutory premiums went up to € 2,487 mn, a 37.7% rise on an internal basis. It was largely attributable to an increase in unit-linked sales in Taiwan and Indonesia. Statutory premiums in South Korea amounted to € 642 mn in the first half of 2016.
Premiums earned (net) went down by € 172 mn to € 11,585 mn, resulting from a decline in our business with traditional life products in Germany.
Our PVNBP increased by € 722 mn to € 30,435 mn, largely because our business with unit-linked insurance products without guarantees generated higher sales in the Asia-Pacific region and Italy, as did our capital-efficient products in the German life business. This was partly offset by a sales decline for our fixed-indexed annuities in the United States. In line with our changed product strategy, premiums continued to shift towards capital-efficient products.
| % | |||
|---|---|---|---|
| six months ended 30 June | 2017 | 2016 | Delta |
| Guaranteed savings & annuities | 23.6 | 29.3 | (5.7) |
| Protection & health | 16.7 | 16.0 | 0.7 |
| Unit-linked without guarantee | 26.1 | 19.4 | 6.7 |
| Capital-efficient products | 33.6 | 35.3 | (1.7) |
| Total | 100.0 | 100.0 | - |
8_PVNBP before non-controlling interests.
9_Prior year figures changed in order to reflect the roll out of profit source reporting to Turkey. 10_Prior year figures are presented excluding effects from the South Korean business.
| € MN | |||
|---|---|---|---|
| six months ended 30 June | 2017 | 2016 | Delta |
| Loadings and fees | 2,949 | 2,770 | 179 |
| Investment margin | 2,082 | 1,861 | 221 |
| Expenses | (3,349) | (3,359) | 10 |
| Technical margin | 549 | 480 | 69 |
| Impact of changes in DAC | 52 | 190 | (138) |
| Operating loss – South Korea1 | - | (82) | 82 |
| Operating profit | 2,282 | 1,859 | 423 |
1_The 2016 figure represents the operating loss of the first quarter only, as the negative result for the second quarter of 2016 was considered as non-operating.
Our operating profit rose, as we achieved higher investment margins mainly in the United States, Spain, and the German life business, as well as higher technical margins in the United States and France.
| six months ended 30 June | 2017 | 2016 | Delta |
|---|---|---|---|
| Loadings from premiums | 1,916 | 1,845 | 71 |
| Loadings from reserves | 720 | 649 | 71 |
| Unit-linked management fees | 313 | 276 | 37 |
| Loadings and fees1 | 2,949 | 2,770 | 179 |
| Loadings from premiums as % of statutory premiums |
5.7 | 5.7 | - |
| Loadings from reserves as % of average reserves 2,3 |
0.1 | 0.1 | - |
| Unit-linked management fees as % of average unit-linked reserves3,4 |
0.2 | 0.2 | - |
1_Prior year figures are presented excluding the effects from the South Korean business.
2_Aggregate policy reserves and unit-linked reserves.
3_Yields are pro rata.
4_Unit-linked management fees, excluding asset management fees, divided by unit-linked reserves.
Loadings from premiums went up in line with the higher sales, mainly in the German life business, and in the Asia-Pacific region. The growth in loadings from reserves was attributable to higher reserve volume, largely in the United States. Unit-linked management fees increased driven by Italy.
| € MN | |||
|---|---|---|---|
| six months ended 30 June | 2017 | 2016 | Delta |
| Interest and similar income | 9,056 | 8,905 | 151 |
| Operating income from financial assets and liabilities carried at fair value through income (net) |
(965) | (551) | (414) |
| Operating realized gains/losses (net) | 2,916 | 3,112 | (197) |
| Interest expenses | (49) | (56) | 7 |
| Operating impairments of investments (net) |
(255) | (934) | 679 |
| Investment expenses | (609) | (544) | (64) |
| Other1 | 271 | 55 | 216 |
| Technical interest | (4,401) | (4,358) | (43) |
| Policyholder participation | (3,882) | (3,768) | (114) |
| Investment margin2 | 2,082 | 1,861 | 221 |
Investment margin in basis points3,4 49.3 45.8 3.5
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_Prior year figures are presented excluding the effects from the South Korean business.
3_Investment margin divided by the average of current end-of-period and previous end-of-period aggregate policy reserves.
4_Yields are pro rata.
Our investment margin increased mainly due to lower equity impairments in Germany and favorable market conditions in our variable annuities business in the United States. This was partly offset by the negative impacts from our fixed income derivatives in the German life business.
| € MN | |||
|---|---|---|---|
| six months ended 30 June | 2017 | 2016 | Delta |
| Acquisition expenses and commissions | (2,451) | (2,487) | 36 |
| Administrative and other expenses | (898) | (872) | (26) |
| Expenses1 | (3,349) | (3,359) | 10 |
| Acquisition expenses and commissions as % of PVNBP2 |
(8.1) | (8.4) | 0.3 |
| Administrative and other expenses as % of average reserves3, 4 |
(0.2) | (0.2) | - |
1_Prior year figures are presented excluding the effects from the South Korean business.
2_PVNBP before non-controlling interests.
3_Aggregate policy reserves and unit-linked reserves.
4_Yields are pro rata.
1_Prior year figures changed in order to reflect the roll out of profit source reporting to Turkey.
2_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.
3 _Loadings and fees include premium and reserve based fees, unit-linked management fees, and policyholder participation in expenses.
4_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).
5_Expenses include acquisition expenses and commissions (excluding commission clawbacks, which are allocated to the technical margin) as well as administrative and other expenses.
Our acquisition expenses and commissions decreased, predominantly due to declined sales in the fixed-indexed annuities business in the United States. It was partly offset by higher expenses due to sales growth in our German life business and in Asia-Pacific.
Administrative and other expenses remained stable in relation to reserves.
Our technical margin increased, as the first half of 2016 was burdened by one-off reserve adjustments predominantly in the United States. A reserve release for unclaimed contracts in France also contributed to this development.
€ MN
| DAC | (814) | (813) | (1) |
|---|---|---|---|
| Impact of change in DAC1 | 52 | 190 | (138) |
1_Prior year figures are presented excluding the effects from the South Korean business.
The decrease in the impact of change in DAC was due to lower capitalization of DAC, resulting mainly from decreased sales in fixedindexed annuities in the United States.
| € MN | ||||
|---|---|---|---|---|
| six months ended 30 June | 2017 | 2016 | Delta | |
| Guaranteed savings & annuities | 1,216 | 986 | 230 | |
| Protection & health | 457 | 339 | 118 | |
| Unit-linked without guarantee | 185 | 176 | 9 | |
| Capital-efficient products | 425 | 440 | (15) | |
| Operating loss – South Korea1 | - | (82) | 82 | |
| Operating profit | 2,282 | 1,859 | 423 | |
1_The 2016 figure represents the operating loss of the first quarter only, as the negative result for the second quarter of 2016 was considered as non-operating.
The operating profit in our guaranteed savings & annuities line of business went up. Much of the increase was contributed by our traditional variable annuities business in the United States, which benefited from favorable market movements. The higher operating profit in the protection & health line of business was largely driven by a higher technical margin in the German health business. Our operating profit in the unit-linked without guarantee line of business went up slightly, too, which was primarily due to higher unit-linked fees in Italy. A decrease in operating profit in the capital-efficient products line was largely attributable to lower investment margin in the United States.
Our return on equity increased by 2.6 percentage points to 13.3% because – among other factors – the 2016 number had been negatively impacted by the unfavorable development of our South Korean business.
The increase in our net income was largely owed to our operating performance and the fact that the prior year's net income had been negatively affected by our business in South Korea.
1_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.
2_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 and front-end loadings on operating profit and therefore deviates from the IFRS financial statements.
3_Prior year figures changed in order to reflect the roll out of profit source reporting to Turkey.
| six months ended 30 June | 2017 | 2016 | Delta | |
|---|---|---|---|---|
| Operating revenues | € mn | 3,114 | 2,827 | 287 |
| Operating profit2 | € mn | 1,156 | 960 | 196 |
| Cost-income ratio3 | % | 62.9 | 66.1 | (3.2) %-p |
| Net income | € mn | 735 | 615 | 120 |
| Total assets under management as of 30 June4 |
€ bn | 1,915 | 1,871 | 44 |
| thereof: Third-party assets under management as of 30 June4 |
€ bn | 1,406 | 1,361 | 45 |
COMPOSITION OF TOTAL ASSETS UNDER MANAGEMENT € BN
| as of 30 June |
as of 31 December |
||
|---|---|---|---|
| Type of asset class | 2017 | 2016 | Delta |
| Fixed income | 1,519 | 1,489 | 30 |
| Equities | 164 | 166 | (2) |
| Multi-assets1 | 156 | 153 | 3 |
| Other2 | 77 | 63 | 13 |
| Total | 1,915 | 1,871 | 44 |
1_Multi-assets is a combination of several asset classes (e.g. bonds, stocks, cash and real property) used as an investment. Multi-assets class investments increase the diversification of an overall portfolio by distributing investments throughout several asset classes.
2_Other is composed of other asset classes than equity, fixed income and multi-assets, e.g. money markets, commodities, real estate investment trusts, infrastructure investments, private equity investments, hedge funds, etc.
Net inflows5 of total assets under management (AuM) amounted to € 73 bn, driven by third-party AuM net inflows of € 74 bn. Most of these third-party inflows occurred in the second quarter: They amounted to € 55 bn net and represented a quarterly record high, which was supported by one large mandate amounting to € 19 bn. Almost all of the first half-year's third-party AuM net inflows are attributable to PIMCO, where we recorded € 73 bn. AllianzGI recorded third-party net inflows of € 2 bn.
Favorable effects from Market and Other6 contributed € 41 bn to the increase in total AuM. This was mainly driven by fixed income assets at PIMCO and – to a lesser extent – by equities at AllianzGI.
Effects from consolidation, deconsolidation and other adjustments added € 13 bn to total AuM.
Negative foreign currency translation effects amounted to € 83 bn and were primarily driven by the depreciation of the U.S. Dollar and the British Pound against the Euro. Despite these negative effects, total AuM increased overall by 2.4%.
In the following section we focus on the development of thirdparty assets under management.
As of 30 June 2017, the share of third-party AuM by business unit remained stable at 76.0% (31 December 2016: 76.1%) attributable to PIMCO and 24.0% (31 December 2016: 23.9%) attributable to AllianzGI.
The share of fixed income assets rose from 75.5% to 76.2% over the first half-year, mainly driven by strong third-party AuM net inflows and positive market effects. The shares of equities, multi-assets and other decreased slightly or remained stable, at 9.8%, 10.0% and 4.0%, respectively, while their absolute volumes remained almost unchanged (31 December 2016: 10.3%, 10.0% and 4.2%, respectively).
The shares in third-party assets of both mutual funds and separate accounts7 were quite steady compared to year-end 2016, with mutual funds at 58.1% (31 December 2016: 57.8%) and separate accounts at 41.9% (31 December 2016: 42.2%).
As for the regional allocation of third-party AuM8 , shares shifted in favor of Europe (33.8%), while the share of America declined (54.3%) and the share of the Asia-Pacific region remained stable (11.8%) (31 December 2016: 32.8%, 55.3% and 11.9%, respectively). The shift was primarily driven by third-party AuM net inflows and positive market effects in the United Kingdom, which outpaced the overall favorable effects in the other regions. The decrease in America was due to the weakening of the U.S. Dollar, which mitigated the region's AuM increase from net inflows and positive market effects.
The overall three-year rolling investment performance9 of our Asset Management business increased over the first half of 2017, with 87% of third-party assets outperforming their respective benchmarks (31 December 2016: 83%). The increase was driven by both PIMCO's and AllianzGI's three year rolling investment performance, which rose from 88% to 91% and from 63% to 70%, respectively.
3_Represents operating expenses divided by operating revenues.
6_Market and Other represents current income earned on, and changes in the fair value of, securities held in client accounts. It also includes dividends from net investment income and from net realized capital gains to investors of open ended mutual funds and of closed end funds.
7_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).
8_Based on the location of the asset management company.
9_Three-year rolling investment performance reflects the mandate-based and volume-weighted threeyear 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).
1_For further information about our Asset Management business segment, please refer to note 4 to the condensed consolidated financial statements.
2_In light of the new operating profit definition, restructuring charges are reported outside of operating profit unless shared with policyholders. Prior year figures have been adjusted accordingly.
Our operating revenues went up by 10.1% – a 7.5% plus on an internal basis1 .
Performance fees increased, mainly in the United States.
Other net fee and commission income rose, mainly driven by increased average third-party AuM, mostly at PIMCO. The positive effect was partially mitigated by a decrease in third-party AuM-driven margins at both, PIMCO and AllianzGI.
Other operating revenues increased, mainly due to favorable foreign currency translation effects on financial assets and liabilities carried at fair value through profit and loss.
Our operating profit increased by 20.4% on a nominal basis and by 17.5% on an internal basis1 , because of strong revenue growth which was only partly offset by increased administrative expenses.
The main driver for the increase of administrative expenses was higher personnel expenses, due to a rise in variable compensation, which is related to the overall positive business development. Lower expenses associated with the Special Performance Award (SPA) could only partly offset the total increase in operating expenses. The SPA was introduced in the fourth quarter of 2014 at PIMCO to secure performance and retain talent. Furthermore, increased nonpersonnel expenses also contributed to the rise in administrative expenses, albeit to a lesser extent.
Our cost-income ratio improved significantly, as revenue growth outpaced the increase in expenses. The SPA effect added 0.4 percentage points to the cost-income ratio – net of the impact on variable compensation.
| six months ended 30 June | 2017 | 2016 | Delta |
|---|---|---|---|
| Performance fees | 149 | 127 | 23 |
| Other net fee and commission income | 2,926 | 2,702 | 225 |
| Other operating revenues | 38 | (1) | 39 |
| Operating revenues | 3,114 | 2,827 | 287 |
| Administrative expenses (net), excluding acquisition-related expenses |
(1,958) | (1,868) | (91) |
| Operating expenses | (1,958) | (1,868) | (91) |
| Operating profit | 1,156 | 960 | 196 |
The increase in our net income corresponds to the positive development of our operating profit.
1_Operating revenues/operating profit adjusted for foreign currency translation and (de-)consolidation effects.
| € MN | |||
|---|---|---|---|
| six months ended 30 June | 2017 | 2016 | Delta |
| Operating revenues | 1,680 | 1,174 | 506 |
| Operating expenses | (1,945) | (1,497) | (448) |
| Operating result2 | (265) | (323) | 58 |
| Net income (loss) | (456) | (188) | (268) |
| € MN | |||
|---|---|---|---|
| six months ended 30 June | 2017 | 2016 | Delta |
| HOLDING & TREASURY | |||
| Operating revenues | 1,044 | 544 | 500 |
| Operating expenses | (1,387) | (928) | (458) |
| Operating result | (343) | (384) | 41 |
| BANKING | |||
| Operating revenues | 519 | 519 | - |
| Operating expenses | (462) | (483) | 22 |
| Operating result | 57 | 36 | 21 |
| ALTERNATIVE INVESTMENTS | |||
| Operating revenues | 121 | 111 | 9 |
| Operating expenses | (100) | (87) | (13) |
| Operating result | 20 | 24 | (4) |
Our operating result improved due to the positive developments in Holding & Treasury and Banking.
Our net loss worsened due to lower realized gains, as the prior year had benefited from one-off gains from the sale of financial stakes, as well as from lower non-operating trading result.
In Holding & Treasury, the improvement of our operating result was mainly driven by a higher net interest result. Lower administrative expenses also contributed positively.
Banking's operating result increased. This was mainly driven by both a higher net fee and commission result as well as by lower loan loss provisions. The positive development was partly offset by a lower net interest result.
1_Consolidation included. For further information about our Corporate and Other business segment, please refer to note 4 to the condensed consolidated interim financial statements.
2_In light of the new operating profit definition, restructuring charges are reported outside of operating profit unless shared with policyholders. Prior year figures have been adjusted accordingly.
Prospects for the world economy remain favorable overall in midyear 2017, despite the heightened level of political uncertainty. In the United States, even several months after taking office, the new U.S. administration's stance across a wide range of policy areas remains highly opaque. Partly due to this backdrop, upward pressure on the U.S. Dollar has subsided, which improves the outlook for U.S. exports. All in all, the U.S. economy is likely to expand by around 2% this year. In the Eurozone, the economic recovery looks set to continue. We expect the real gross domestic product to increase by about 2%. While rising inflation will weigh on private consumption, household spending will be supported by rising employment. At a global level, overall output is likely to expand by 2.9% in 2017, compared with 2.6% in 2016. Industrialized countries are expected to register a 1.9% growth in gross domestic product, while in emerging markets growth could pick up to 4.5% from the 4.0% seen in 2016, in part driven by an economic stabilization in emerging market heavyweights such as Russia.
The uncertain global political and economic environment bears the potential for higher financial market volatility. On the monetary policy front, the Federal Reserve will probably continue to adjust its policy stance; the key rate is likely to be lifted by a further 25 basis points by year-end. In addition, the Federal Reserve has meanwhile reaffirmed its intention to begin reducing its balance sheet this year, provided that the economy performs in line with its expectations. In the Eurozone, the European Central Bank is expected to announce in September a further reduction in bond purchases for January 2018, probably from € 60 bn to € 40 bn. There are no key interest rate hikes on the cards until tapering will have been concluded. Modestly rising yields on 10-year U.S. government bonds, higher inflation rates in the Eurozone and speculation about the timing and manner of the European Central Bank's exit from its bond purchasing program will exert some upward pressure on European benchmark bond yields. For 10 year German government bonds, we see yields climbing modestly – towards 1% – in the remainder of 2017; yields on 10-year U.S. government bonds may end the year around 2.5%. We expect the U.S. Dollarto-Euro exchange rate to close the year above the year-end closing rate of 2016.
We confirm our outlook for premium growth in 2017. As expected, the first half of the year saw the global economy shift up a gear, leading to modest top-line growth, while the low-yield environment turned out much harder to escape, which led to unrelenting pressure on investment income. Further strain on the bottom line resulted from the unabated need to build new, digital business models.
In the property-casualty sector, premiums in advanced markets should grow moderately, supported by the ongoing economic recovery. The emerging markets are expected to grow much faster, with Asia being the frontrunner. Overall, we expect global premium revenue growth. Given the still challenging pricing outlook, weak investment income, and elevated catastrophe losses from severe weather events, the sector's overall profitability will remain stressed.
In the life sector, we expect advanced markets to recover and grow modestly, as demand benefits from rising employment and new product offers. Emerging markets, on the other hand, will perform more strongly, as rising incomes, urbanization, and social security reforms remain powerful engines for growing insurance demand. All in all, we expect global premium revenue to increase. To safeguard profitability, insurers will continue to review both their product mixes and their investment portfolios. As a result, overall profitability should not deteriorate any further.
1_The information presented in the sections "Economic outlook", "Insurance industry outlook" and "Asset management industry outlook" is based on our own estimates.
As described above, in the second half of 2017 we will continue to see uncertainty at a global level, both in monetary and fiscal policy as well as in trade, geopolitical processes and exchange rates. As illustrated by the bond sell-down at the end of June, 2017, the global capital markets remain volatile in the light of potential changes in central banks' monetary policy.
Overall, the current market development is presenting both risks and opportunities for asset managers. Bonds remain particularly interesting for the growing number of retirees in developed countries looking for a stable stream of income; liability-driven investors may also consider further de-risking into bonds as yields rise. The asset management industry's profitability remains under pressure from continuous flows into passive products as well as rising distribution costs; it may additionally be affected by measures aimed at strengthening regulatory oversight and reporting. As a result of this pressure on profitability, the industry is likely to consolidate further. At the same time, digital channels are expected to continue gaining prominence. To continue growing their businesses, it is vital for asset managers to maintain sufficient business volumes, ensure efficient operations, and keep their investment performance at continued high levels.
We now expect the 2017 Allianz Group operating profit to arrive near the upper end of the outlook range of € 10.8 bn, plus or minus € 0.5 bn.
As always, natural catastrophes and adverse developments in the capital markets, as well as factors stated in our cautionary note regarding forward-looking statements, may severely affect the results of our operations.
The statements contained herein may include prospects, statements of future expectations, and other forward-looking statements that are based on management's current views and assumptions and involve known and unknown risks and uncertainties. Actual results, performance, or events may differ materially from those expressed or implied in such forward-looking statements.
Such deviations may arise due to, without limitation, (i) changes of the general economic conditions and competitive situation, particularly in the Allianz Group's core business and core markets, (ii) performance of financial markets (particularly market volatility, liquidity and credit events), (iii) frequency and severity of insured loss events, including natural catastrophes, and the development of loss expenses, (iv) mortality and morbidity levels and trends, (v) persistency levels, (vi) particularly in the banking business, the extent of credit defaults, (vii) interest rate levels, (viii) currency exchange rates, including the Euro/U.S. Dollar exchange rate, (ix) changes in laws and regulations, including tax regulations, (x) the impact of acquisitions, including related integration issues and reorganization measures, and (xi) general competitive factors, in each case on a local, regional, national, and/or global basis. Many of these factors may be more likely to occur, or more pronounced, as a result of terrorist activities and their consequences.
The company assumes no obligation to update any information or forward-looking statement contained herein, save for any information required to be disclosed by law.
€ MN
| as of 30 June 2017 |
as of 31 December 2016 |
Delta | |
|---|---|---|---|
| Shareholders' equity | |||
| Paid-in capital | 28,928 | 28,928 | - |
| Retained earnings | 26,055 | 27,087 | (1,032) |
| Foreign currency translation adjustment |
(1,906) | (762) | (1,144) |
| Unrealized gains and losses (net) | 11,122 | 11,830 | (709) |
| Total1 | 64,198 | 67,083 | (2,885) |
1_Prior year figures have been adjusted in order to reflect the impact resulting from an accounting policy change to measure the Guaranteed Minimum Income Benefit (GMIB) liability at fair value for our life business. For further information, please refer to note 2 in the condensed consolidated interim financial statements.
A major share of the decrease in shareholders' equity – € 5,048 mn – was attributable to a dividend payout in May 2017(€ 3,410 mn) and the share buy-back program2 which started in February of this year (€ 1,638 mn). In addition, negative impacts from foreign currency translation and a decline in unrealized gains – mainly from debt securities – decreased the shareholders' equity by € 1,144 mn and € 709 mn, respectively. The overall decline could only partly be offset by the net income attributable to shareholders, amounting to € 3,810 mn.
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.3 Our regulatory capitalization is shown in the following table.
| as of 30 June 2017 |
as of 31 December 2016 |
Delta | ||
|---|---|---|---|---|
| Eligible own funds | € bn | 76.0 | 75.3 | 0.7 |
| Capital requirement | € bn | 34.6 | 34.6 | 0.1 |
| Capitalization ratio | % | 219 | 218 | 2%-p |
The Solvency II capitalization ratio rose from 218% to 219% over the first six months of 2017. Eligible own funds slightly increased. The positive effects of operating Solvency II earnings and of regulatory changes were widely offset by the full recognition of the share buyback program and other effects, such as taxes and foreign currency translation. The capital requirement remained almost stable, as drivers that increased capital requirements – in particular model changes – were strongly mitigated, in particular by favorable market impacts. However, on a pro forma basis, fully reflecting the € 3 bn share buy-back at year-end 2016, the Solvency II capitalization ratio increased from 209% to 219%.
1_This does not include non-controlling interests of € 2,864 mn and € 3,052 mn as of 30 June 2017 and 31 December 2016, respectively. For further information, please refer to note 17 to the condensed consolidated interim financial statements.
2_For further information, please refer to note 17 to the condensed consolidated interim financial statements.
3_Own funds are calculated under consideration of volatility adjustment and yield curve extension, as described on page 67 in the Allianz Group Annual Report 2016.
As of 30 June 2017, total assets amounted to € 887.2 bn and total liabilities were € 820.1 bn. Compared to year-end 2016, total assets and total liabilities rose by € 3.4 bn and € 6.5 bn, respectively.
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 2017 |
as of 31 December 2016 |
Delta | as of 30 June 2017 |
as of 31 December 2016 |
Delta | |
|---|---|---|---|---|---|---|
| Type of investment | € bn | € bn | € bn | % | % | %-p |
| Debt instruments; thereof: | 572.5 | 577.3 | (4.8) | 87.8 | 88.4 | (0.6) |
| Government bonds | 213.3 | 213.6 | (0.3) | 37.3 | 37.0 | 0.3 |
| Covered bonds | 85.5 | 89.9 | (4.4) | 14.9 | 15.6 | (0.7) |
| Corporate bonds (excl. banks) | 190.3 | 189.5 | 0.8 | 33.2 | 32.8 | 0.4 |
| Banks | 31.6 | 32.9 | (1.2) | 5.5 | 5.7 | (0.2) |
| Other | 51.7 | 51.4 | 0.3 | 9.0 | 8.9 | 0.1 |
| Equities | 53.2 | 49.9 | 3.3 | 8.2 | 7.6 | 0.5 |
| Real estate | 11.2 | 11.7 | (0.5) | 1.7 | 1.8 | (0.1) |
| Cash/other | 14.9 | 14.2 | 0.8 | 2.3 | 2.2 | 0.1 |
| Total | 651.8 | 653.1 | (1.2) | 100.0 | 100.0 | - |
Compared to year-end 2016, our overall asset allocation remained almost unchanged. The decrease in debt instruments, mainly covered bonds, was partially offset by new investments in equities.
Our well-diversified exposure to debt instruments decreased, primarily due to a slight rise in interest rates from their low level of year-end 2016. About 94% of this portfolio was invested in investment-grade bonds and loans.1 Our government bonds portfolio contained, amongst others, bonds from Italy and Spain that represented 4.0%, and 1.9% shares, respectively, of our debt instruments portfolio with unrealized gains (gross) of € 2,584 mn and € 827 mn. Of our covered bonds portfolio, 41.9% (31 December 2016: 41.3%) were German Pfandbriefe backed by either public-sector loans or mortgage loans. French, Spanish and Italian covered bonds had portfolio shares of 16.0%, 9.4% and 7.4%, respectively (31 December 2016: 16.0%, 9.4% and 7.5%).
Our exposure to equities increased mainly due to new investments. Our equity gearing2 remained almost unchanged at 24% (31 December 2016: 23%).
As of 30 June 2017, the business segment's gross reserves for loss and loss adjustment expenses as well as discounted loss reserves amounted to € 64.9 bn, compared to € 65.7 bn at year-end 2016. On a net basis, our reserves, including discounted loss reserves, were almost unchanged at € 56.9 bn.3
Life/Health reserves for insurance and investment contracts slightly decreased by € 0.8 bn to € 489.9 bn over the first six months of 2017. The € 9.9 bn increase in aggregate policy reserves before foreign currency translation effects was mainly driven by our operations in Germany (€ 6.1 bn), the United States (€ 3.6 bn before foreign currency translation effects) and Switzerland (€ 0.5 bn before foreign currency translation effects). Reserves for premium refund decreased by € 3.2 bn, due to lower unrealized gains to be shared with policyholders as interest rates are on the rise. Foreign currency translation effects resulted from the weaker U.S. Dollar (€ (6.9) bn), Swiss Franc, and Asian currencies (€ (0.3) bn each).
1_Excluding self-originated German private retail mortgage loans. For 3 %, no ratings were available. 2_Equity gearing is defined as the ratio of our equity holdings allocated to the shareholder after policy-
holder participation and hedges to shareholders' equity plus off-balance sheet reserves less goodwill.
3_For further information about changes in the reserves for loss and loss adjustment expenses for the Property-Casualty business segment, please refer to note 13 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 4 to the condensed consolidated interim financial statements.
Total revenues comprise statutory gross premiums written in Property-Casualty and Life/Health, operating revenues in Asset Management, and total revenues in Corporate and Other (Banking).
| € MN | ||
|---|---|---|
| six months ended 30 June | 2017 | 2016 |
| Property-Casualty | ||
| Gross premiums written | 29,388 | 28,856 |
| Life/Health | ||
| Statutory premiums | 33,619 | 32,968 |
| Asset Management | ||
| Operating revenues | 3,114 | 2,827 |
| consisting of: | ||
| Net fee and commission income | 3,076 | 2,828 |
| Net interest income1 | 7 | (3) |
| Income from financial assets and liabilities carried at fair value through income (net) |
31 | 1 |
| Other income | - | 1 |
| Corporate and Other | ||
| thereof: Total revenues (Banking) | 275 | 272 |
| consisting of: | ||
| Interest and similar income | 217 | 249 |
| Income from financial assets and liabilities carried at fair value through income (net)2 |
13 | 6 |
| Fee and commission income | 287 | 264 |
| Interest expenses, excluding interest expenses from external debt |
(72) | (90) |
| Fee and commission expenses | (172) | (160) |
| Other income | 3 | - |
| Consolidation effects within Corporate and Other |
- | 3 |
| Consolidation | (178) | (165) |
| Allianz Group total revenues | 66,218 | 64,759 |
1_Represents interest and similar income less interest expenses.
2_Includes trading income.
We believe that an 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. Accordingly, in addition to presenting nominal total revenue growth, we also present internal growth, which excludes these effects.
| six months ended 30 June 2017 |
Internal growth |
Changes in scope of consoli dation |
Foreign currency translation |
Nominal growth |
|---|---|---|---|---|
| Property-Casualty | 1.2 | 0.6 | - | 1.8 |
| Life/Health | 3.5 | (1.9) | 0.5 | 2.0 |
| Asset Management | 7.5 | 0.3 | 2.3 | 10.1 |
| Corporate and Other | 1.0 | - | - | 1.0 |
| Allianz Group | 2.6 | (0.7) | 0.3 | 2.3 |
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, 21 entities comprising 99.5% 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.1
1_In light of the new operating profit definition, restructuring charges are reported outside of operating profit unless shared with policyholders. Prior year figures have been adjusted accordingly.
| six months ended 30 June | 2017 | 2016 |
|---|---|---|
| Acquisition expenses and commissions2 | (2,451) | (2,487) |
| Definitions | 8 | 7 |
| Scope | (63) | (139) |
| Acquisition costs incurred | (2,506) | (2,619) |
| Capitalization of DAC2 | 866 | 1,003 |
| Definition: URR capitalized | 260 | 242 |
| Definition: policyholder participation3 | 495 | 475 |
| Scope | 16 | 76 |
| Capitalization of DAC | 1,638 | 1,796 |
| Amortization, unlocking, and true-up of DAC2 | (814) | (813) |
| Definition: URR amortized | (69) | (22) |
| Definition: policyholder participation3 | (662) | (270) |
| Scope | (16) | (324) |
| Amortization, unlocking, and true-up of DAC | (1,561) | (1,430) |
| Commissions and profit received on reinsurance business ceded |
39 | 28 |
| Acquisition costs4 | (2,391) | (2,225) |
| Administrative and other expenses2 | (898) | (872) |
| Definitions | 74 | 84 |
| Scope | (60) | (111) |
| Administrative expenses on reinsurance business ceded |
8 | 1 |
| Administrative expenses4 | (877) | (899) |
1_Prior year figures changed in order to reflect the roll out of profit source reporting to Turkey. 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.
| six months ended 30 June | 2017 | 2016 |
|---|---|---|
| Acquisition expenses and commissions2 | (2,451) | (2,487) |
| Administrative and other expenses2 | (898) | (872) |
| Capitalization of DAC2 | 866 | 1,003 |
| Amortization, unlocking, and true-up of DAC2 | (814) | (813) |
| Acquisition and administrative expenses | (3,297) | (3,169) |
| Definitions | 106 | 516 |
| Scope | (122) | (498) |
| Commissions and profit received on reinsurance business ceded |
39 | 28 |
| Administrative expenses on reinsurance business ceded |
8 | 1 |
| Acquisition and administrative expenses (net)3 | (3,267) | (3,123) |
1_Prior year figures changed in order to reflect the roll out of profit source reporting to Turkey. 2_As per Interim Group Management Report.
3_As per notes to the condensed consolidated interim financial statements.
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Interim Report for the First Half-Year of 2017 − Allianz Group 19
| € MN | |||
|---|---|---|---|
| note | as of 30 June 2017 |
as of 31 December 2016 |
|
|---|---|---|---|
| ASSETS | |||
| Cash and cash equivalents | 17,154 | 14,463 | |
| Financial assets carried at fair value through income | 5 | 8,454 | 8,333 |
| Investments | 6 | 535,806 | 536,869 |
| Loans and advances to banks and customers | 7 | 104,496 | 105,369 |
| Financial assets for unit-linked contracts | 115,268 | 111,325 | |
| Reinsurance assets | 8 | 15,225 | 15,562 |
| Deferred acquisition costs | 9 | 24,061 | 24,887 |
| Deferred tax assets | 951 | 1,003 | |
| Other assets | 10 | 38,041 | 38,050 |
| Non-current assets and assets of disposal groups classified as held for sale | 3 | 14,378 | 14,196 |
| Intangible assets | 11 | 13,353 | 13,752 |
| Total assets | 887,189 | 883,809 | |
| LIABILITIES AND EQUITY | |||
| Financial liabilities carried at fair value through income1 | 11,073 | 11,271 | |
| Liabilities to banks and customers | 12 | 13,666 | 13,038 |
| Unearned premiums | 24,902 | 21,360 | |
| Reserves for loss and loss adjustment expenses | 13 | 71,745 | 72,373 |
| Reserves for insurance and investment contracts | 14 | 504,404 | 505,322 |
| Financial liabilities for unit-linked contracts | 115,268 | 111,325 | |
| Deferred tax liabilities | 4,737 | 4,683 | |
| Other liabilities | 15 | 39,799 | 39,867 |
| Liabilities of disposal groups classified as held for sale | 3 | 13,401 | 13,290 |
| Certificated liabilities | 16 | 7,682 | 7,615 |
| Subordinated liabilities | 16 | 13,448 | 13,530 |
| Total liabilities | 820,127 | 813,674 | |
| Shareholders' equity | 64,198 | 67,083 | |
| Non-controlling interests | 2,864 | 3,052 | |
| Total equity | 17 | 67,062 | 70,135 |
| Total liabilities and equity | 887,189 | 883,809 | |
| 1_Include mainly derivative financial instruments. |
| € MN | |||
|---|---|---|---|
| six months ended 30 June | note | 2017 | 2016 |
| Gross premiums written | 41,425 | 41,140 | |
| Ceded premiums written | (2,643) | (2,993) | |
| Change in unearned premiums (net) | (3,639) | (3,567) | |
| Premiums earned (net) | 18 | 35,143 | 34,580 |
| Interest and similar income | 19 | 11,099 | 11,115 |
| Income from financial assets and liabilities carried at fair value through income (net) | 20 | (954) | (491) |
| Realized gains/losses (net) | 21 | 3,529 | 4,144 |
| Fee and commission income | 22 | 5,591 | 5,107 |
| Other income | 34 | 11 | |
| Total income | 54,441 | 54,466 | |
| Claims and insurance benefits incurred (gross) | (26,579) | (26,797) | |
| Claims and insurance benefits incurred (ceded) | 1,185 | 1,511 | |
| Claims and insurance benefits incurred (net) | 23 | (25,394) | (25,286) |
| Change in reserves for insurance and investment contracts (net) | 24 | (6,697) | (7,539) |
| Interest expenses | 25 | (582) | (606) |
| Loan loss provisions | (13) | (24) | |
| Impairments of investments (net) | 26 | (332) | (1,421) |
| Investment expenses | 27 | (644) | (601) |
| Acquisition and administrative expenses (net) | 28 | (12,678) | (12,173) |
| Fee and commission expenses | 29 | (2,172) | (1,923) |
| Amortization of intangible assets | (79) | (67) | |
| Restructuring charges | (252) | (94) | |
| Other expenses | (1) | (1) | |
| Total expenses | (48,844) | (49,734) | |
| Income before income taxes | 5,597 | 4,731 | |
| Income taxes | 30 | (1,585) | (1,306) |
| Net income | 4,013 | 3,425 | |
| Net income attributable to: | |||
| Non-controlling interests | 203 | 194 | |
| Shareholders | 3,810 | 3,231 | |
| Basic earnings per share (€) | 8.45 | 7.10 | |
| Diluted earnings per share (€) | 8.44 | 6.92 | |
| six months ended 30 June 2017 2016 Net income 4,013 3,425 Other comprehensive income Items that may be reclassified to profit or loss in future periods Foreign currency translation adjustments Reclassifications to net income - (6) Changes arising during the period (1,182) (313) Subtotal (1,182) (319) Available-for-sale investments Reclassifications to net income (1,635) (748) Changes arising during the period 927 6,229 Subtotal (708) 5,481 Cash flow hedges Reclassifications to net income (14) (8) Changes arising during the period (19) 285 Subtotal (34) 277 Share of other comprehensive income of associates and joint ventures Reclassifications to net income - - Changes arising during the period (25) (51) Subtotal (25) (51) Miscellaneous Reclassifications to net income - - Changes arising during the period 12 (34) Subtotal 12 (34) Items that may never be reclassified to profit or loss Changes in actuarial gains and losses on defined benefit plans 255 (604) Total other comprehensive income (1,682) 4,750 Total comprehensive income 2,330 8,175 |
€ MN | |
|---|---|---|
| Total comprehensive income attributable to: | ||
| Non-controlling interests 176 296 |
||
| Shareholders 2,154 7,879 |
For further details concerning income taxes on components of the other comprehensive income, please see note 30.
€ 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 2016, as previously reported | 28,928 | 24,222 | (926) | 10,920 | 63,144 | 2,955 | 66,099 |
| Adjustments (see note 2) | - | (329) | - | - | (329) | - | (329) |
| Balance as of 1 January 2016, as reported | 28,928 | 23,894 | (926) | 10,920 | 62,815 | 2,955 | 65,771 |
| Total comprehensive income1 | - | 2,501 | (312) | 5,690 | 7,879 | 296 | 8,175 |
| Paid-in capital | - | - | - | - | - | - | - |
| Treasury shares | - | 7 | - | - | 7 | - | 7 |
| Transactions between equity holders2 | - | (12) | 4 | (4) | (12) | 15 | 3 |
| Dividends paid | - | (3,320) | - | - | (3,320) | (222) | (3,543) |
| Balance as of 30 June 2016 | 28,928 | 23,069 | (1,234) | 16,606 | 67,369 | 3,044 | 70,413 |
| Balance as of 1 January 2017, as previously reported | 28,928 | 27,336 | (754) | 11,830 | 67,341 | 3,052 | 70,392 |
| Adjustments (see note 2) | - | (249) | (8) | - | (258) | - | (258) |
| Balance as of 1 January 2017, as reported | 28,928 | 27,087 | (762) | 11,830 | 67,083 | 3,052 | 70,135 |
| Total comprehensive income1 | - | 4,015 | (1,144) | (717) | 2,154 | 176 | 2,330 |
| Paid-in capital | - | - | - | - | - | - | - |
| Treasury shares | - | (360) | - | - | (360) | - | (360) |
| Transactions between equity holders2,3 | - | (1,277) | - | 8 | (1,269) | (162) | (1,431) |
| Dividends paid | - | (3,410) | - | - | (3,410) | (202) | (3,612) |
| Balance as of 30 June 2017 | 28,928 | 26,055 | (1,906) | 11,122 | 64,198 | 2,864 | 67,062 |
1_Total comprehensive income in shareholders' equity for the six months ended 30 June 2017 comprises net income attributable to shareholders of € 3,810 mn (2016: € 3,231 mn).
2_Includes income taxes within retained earnings.
3_During the first half-year of 2017, Allianz SE purchased for an amount of € 1,638 mn approximately 9.6 million own shares as part of its share-buy-back program announced in February 2017 with a total volume of up to € 3.0 bn. Thereof 7,472,978 own shares in the amount of € 1,271 mn were cancelled by the end of June 2017 without changing the registered capital of Allianz SE.
| € MN | ||
|---|---|---|
| six months ended 30 June | 2017 | 2016 |
| SUMMARY | ||
| Net cash flow provided by operating activities | 19,615 | 15,527 |
| Net cash flow used in investing activities | (11,565) | (13,891) |
| Net cash flow used in financing activities | (4,941) | (1,787) |
| Effect of exchange rate changes on cash and cash equivalents | (419) | (117) |
| Change in cash and cash equivalents | 2,691 | (269) |
| Cash and cash equivalents at beginning of period | 14,463 | 14,842 |
| Cash and cash equivalents reclassified to assets of disposal groups held for sale | - | - |
| Cash and cash equivalents at end of period | 17,154 | 14,573 |
| CASH FLOW FROM OPERATING ACTIVITIES | ||
| Net income | 4,013 | 3,425 |
| Adjustments to reconcile net income to net cash flow provided by operating activities | ||
| Share of earnings from investments in associates and joint ventures | (220) | (132) |
| 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 |
(3,229) | (2,724) |
| Other investments, mainly financial assets held for trading and designated at fair value through income | (1,311) | (442) |
| Depreciation and amortization | 718 | 622 |
| Loan loss provisions | 13 | 24 |
| Interest credited to policyholder accounts | 2,328 | 2,283 |
| Net change in: | ||
| Financial assets and liabilities held for trading | 2,085 | 1,384 |
| Reverse repurchase agreements and collateral paid for securities borrowing transactions | 87 | (458) |
| Repurchase agreements and collateral received from securities lending transactions | 631 | (905) |
| Reinsurance assets | (654) | (1,390) |
| Deferred acquisition costs | (405) | (649) |
| Unearned premiums | 3,921 | 3,859 |
| Reserves for loss and loss adjustment expenses | 649 | 529 |
| Reserves for insurance and investment contracts | 7,316 | 10,439 |
| Deferred tax assets/liabilities | 262 | (85) |
| Other (net) | 3,409 | (253) |
| Subtotal | 15,602 | 12,101 |
| Net cash flow provided by operating activities | 19,615 | 15,527 |
| CASH FLOW FROM INVESTING ACTIVITIES | ||
| Proceeds from the sale, maturity or repayment of: | ||
| Financial assets designated at fair value through income | 1,051 | 1,028 |
| Available-for-sale investments | 82,146 | 77,973 |
| Held-to-maturity investments | 136 | 163 |
| Investments in associates and joint ventures | 381 | 710 |
| Non-current assets and disposal groups classified as held for sale | 215 | 63 |
| Real estate held for investment | 85 | 141 |
| Fixed assets of renewable energy investments | 2 | - |
| Loans and advances to banks and customers (purchased loans) | 3,023 | 3,593 |
Property and equipment 128 43 Subtotal 87,167 83,714
€ MN
| six months ended 30 June | 2017 | 2016 |
|---|---|---|
| Payments for the purchase or origination of | ||
| Financial assets designated at fair value through income | (915) | (1,012) |
| Available-for-sale investments | (92,224) | (92,294) |
| Held-to-maturity investments | (140) | (120) |
| Investments in associates and joint ventures | (1,229) | (413) |
| Non-current assets and disposal groups classified held for sale | (50) | - |
| Real estate held for investment | (75) | (324) |
| Fixed assets of renewable energy investments | (150) | (165) |
| Loans and advances to banks and customers (purchased loans) | (1,407) | (1,539) |
| Property and equipment | (701) | (506) |
| Subtotal | (96,890) | (96,373) |
| Business combinations (note 3): | ||
| Proceeds from sale of subsidiaries, net of cash disposed | - | - |
| Acquisitions of subsidiaries, net of cash acquired | - | - |
| Change in other loans and advances to banks and customers (originated loans) | (1,729) | (1,329) |
| Other (net) | (112) | 97 |
| Net cash flow used in investing activities | (11,565) | (13,891) |
| CASH FLOW FROM FINANCING ACTIVITIES | ||
| Net change in liabilities to banks and customers | 289 | 383 |
| Proceeds from the issuance of certificated liabilities and subordinated liabilities | 3,786 | 3,864 |
| Repayments of certificated liabilities and subordinated liabilities | (3,468) | (2,477) |
| Cash inflow from capital increases | - | - |
| Transactions between equity holders | (1,431) | 3 |
| Dividends paid to shareholders | (3,612) | (3,543) |
| Net cash from sale or purchase of treasury shares | (355) | 8 |
| Other (net) | (150) | (25) |
| Net cash flow used in financing activities | (4,941) | (1,787) |
| SUPPLEMENTARY INFORMATION ON THE CONSOLIDATED STATEMENTS OF CASH FLOWS | ||
| Income taxes paid | (1,318) | (1,465) |
| Dividends received | 1,266 | 1,026 |
| Interest received | 10,048 | 10,853 |
| Interest paid | (553) | (485) |
The condensed consolidated interim financial statements of the Allianz Group 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 2016, except for the change in accounting policy as described in note 2. These condensed consolidated interim financial statements should be read in conjunction with the consolidated financial statements for the year ended 31 December 2016.
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 2017.
The following amendments and revisions to existing standards became effective for the Allianz Group's consolidated financial statements as of 1 January 2017:
No material impact arose on the financial results or the financial position of the Allianz Group.
IFRS 17 Insurance Contracts was issued by the IASB in May 2017 and is the first comprehensive IFRS Standard establishing the accounting for insurance contracts. IFRS 17 replaces the interim Standard IFRS 4 Insurance Contracts and is effective from 1 January 2021. The Allianz Group is currently evaluating the impact of adopting IFRS 17 on its consolidated financial statements.
At the beginning of 2017, the Allianz Group entered into an economic hedging program for its Guaranteed Minimum Income Benefits (GMIBs), which were sold as part of its variable annuity portfolio. In order to mitigate accounting mismatches between the hedging derivatives and the GMIBs, the Allianz Group has started measuring the GMIBs at fair value through profit or loss as of 1 January 2017. This change in measurement is permitted by IFRS 4 and represents an accounting policy change. Accounting policy changes need to be applied retrospectively. The total effect of the new measurement on prior period numbers is as follows:
| € MN | |||
|---|---|---|---|
| as of 31 December 2016 | As previously reported |
Change in accounting policies GMIBs |
As reported |
| Financial liabilities carried at fair value through income |
10,737 | 534 | 11,271 |
| Reserves for insurance and investment contracts |
505,460 | (138) | 505,322 |
| Deferred tax liabilities | 4,822 | (139) | 4,683 |
| Total liabilities | 813,417 | 258 | 813,674 |
| Shareholders' equity | 67,341 | (258) | 67,083 |
| Non-controlling interests | 3,052 | - | 3,052 |
| Total equity | 70,392 | (258) | 70,135 |
| Total liabilities and equity | 883,809 | - | 883,809 |
In the consolidated income statement for the six months ended 30 June 2016, the GMIB-related change in accounting policies led to a € 78 mn decrease in income from financial assets and liabilities carried at fair value through income (net) and a € 5 mn decrease in changes in reserves for insurance and investment contracts (net). Together with the decrease of income taxes of € 29 mn the net income decreased with an amount of € 54 mn. This led to a 12 cent decrease in earnings per share. For the year ended 31 December 2016, the implementation of the changed accounting policy lead to a € 121 mn increase of income before income taxes and an increase of income taxes of € 42 mn. In total, the net income increased by € 79 mn. This resulted in an increase of 17 cents in earnings per share.
NON-CURRENT ASSETS AND DISPOSAL GROUPS CLASSIFIED AS HELD FOR SALE € MN
| as of 30 June 2017 |
as of 31 December 2016 |
|
|---|---|---|
| Assets of disposal groups classified as held for sale | ||
| Oldenburgische Landesbank AG, Oldenburg | 13,889 | 13,915 |
| Other disposal groups | 370 | 42 |
| Subtotal | 14,259 | 13,957 |
| Non-current assets classified as held for sale | ||
| Real estate held for investment | 119 | 160 |
| Real estate held for own use | - | 79 |
| Subtotal | 119 | 239 |
| Total | 14,378 | 14,196 |
| Liabilities of disposal groups classified as held for sale | ||
| Oldenburgische Landesbank AG, Oldenburg | 13,236 | 13,282 |
| Other disposal groups | 165 | 8 |
| Total | 13,401 | 13,290 |
At the end of the second quarter of 2017, all requirements were still fulfilled to present Oldenburgische Landesbank AG, Oldenburg, allocated to the reportable segment Banking (Corporate and Other) as a disposal group classified as held for sale.
| € MN | |
|---|---|
| Cash and cash equivalents | 234 |
|---|---|
| Financial assets carried at fair value through income | 14 |
| Investments | 2,584 |
| Loans and advances to banks and customers | 10,889 |
| Deferred tax assets | 70 |
| Other assets | 97 |
| Total assets | 13,889 |
| Financial liabilities carried at fair value through income | 11 |
| Liabilities to banks and customers | 12,434 |
| Other liabilities | 414 |
| Certificated liabilities | 158 |
| Subordinated liabilities | 217 |
| Total liabilities | 13,236 |
As of 30 June 2017, cumulative gains of € 59 mn were reported in other comprehensive income relating to the disposal group classified as held for sale. A sales contract for the Allianz shares in Oldenburgische Landesbank AG was signed on 23 June 2017. The necessary approvals and the transfer to the buyer are expected in the fourth quarter of 2017.
The business activities of the Allianz Group, the business segments as well as the products and services from which the reportable segments derive revenue are consistent with the ones described in the consolidated financial statements for the year ended 31 December 2016. The statement contained therein regarding general segment reporting information is still applicable and valid. The reportable segments measure of profit or loss remained unchanged, except that effective 1 January 2017 restructuring charges are presented generally as non-operating items. Like the other non-operating items, they are shown in operating profit, if they are shared with the policyholders. There is one exception from this general rule with regard to policyholder participation in tax benefits. As IFRS requires that the consolidated income statements present all tax benefits in the line item income taxes, even when they belong to policyholders, the corresponding expenses for premium refunds are shown as nonoperating as well.
Effective 1 January 2017, the Allianz Group reorganized the structure of its insurance activities to reflect the changes in the responsibilities of the Board of Management. The former reportable segment Asia Pacific has been allocated to the reportable segment Western & Southern Europe, Middle East, Africa, Asia Pacific. Previously reported information has been adjusted to reflect this change in the composition of the Allianz Group's reportable segments.
Additionally, some minor reallocations between the reportable segments have been made.
€ MN
| as of 31 December 2016 |
as of 30 June 2017 |
as of 31 December 2016 |
|---|---|---|
| 3,429 | 9,006 | 7,014 |
| 539 | 7,496 | 7,427 |
| 102,430 | 415,600 | 415,023 |
| 11,508 | 92,368 | 93,142 |
| - | 115,268 | 111,325 |
| 10,016 | 5,345 | 5,625 |
| 4,782 | 19,035 | 20,105 |
| 1,175 | 550 | 537 |
| 22,392 | 17,895 | 19,143 |
| 97 | 404 | 146 |
| 2,870 | 3,005 | 3,078 |
| 682,564 | ||
| 159,237 685,973 |
| Property-Casualty | Life/Health | |||
|---|---|---|---|---|
| as of 30 June 2017 |
as of 31 December 2016 |
as of 30 June 2017 |
as of 31 December 2016 |
|
| LIABILITIES AND EQUITY | ||||
| Financial liabilities carried at fair value through income | 87 | 129 | 10,828 | 10,928 |
| Liabilities to banks and customers | 1,205 | 864 | 6,128 | 5,551 |
| Unearned premiums | 20,648 | 17,276 | 4,293 | 4,108 |
| Reserves for loss and loss adjustment expenses | 60,832 | 61,617 | 10,956 | 10,790 |
| Reserves for insurance and investment contracts | 14,791 | 14,837 | 489,901 | 490,739 |
| Financial liabilities for unit-linked contracts | - | - | 115,268 | 111,325 |
| Deferred tax liabilities | 2,412 | 2,674 | 3,666 | 3,697 |
| Other liabilities | 17,142 | 19,261 | 14,864 | 14,622 |
| Liabilities of disposal groups classified as held for sale | 20 | - | 139 | 3 |
| Certificated liabilities | 11 | 11 | 11 | 11 |
| Subordinated liabilities | - | - | 95 | 95 |
| Total liabilities | 117,147 | 116,668 | 656,150 | 651,869 |
| Group | Consolidation | Corporate and Other | Asset Management | ||||
|---|---|---|---|---|---|---|---|
| as of 31 December 2016 |
as of 30 June 2017 |
as of 31 December 2016 |
as of 30 June 2017 |
as of 31 December 2016 |
as of 30 June 2017 |
as of 31 December 2016 |
as of 30 June 2017 |
| 14,463 | 17,154 | (187) | (266) | 3,053 | 4,046 | 1,155 | 884 |
| 8,333 | 8,454 | (398) | (402) | 701 | 653 | 63 | 84 |
| 536,869 | 535,806 | (84,295) | (84,146) | 103,578 | 101,823 | 133 | 116 |
| 105,369 | 104,496 | (5,427) | (4,823) | 6,081 | 6,089 | 65 | 57 |
| 111,325 | 115,268 | - | - | - | - | - | - |
| 15,562 | 15,225 | (78) | (100) | - | - | - | - |
| 24,887 | 24,061 | - | - | - | - | - | - |
| 1,003 | 951 | (1,904) | (1,636) | 936 | 825 | 260 | 210 |
| 38,050 | 38,041 | (14,965) | (13,313) | 8,556 | 7,681 | 2,924 | 2,937 |
| 14,196 | 14,378 | (2) | (12) | 13,925 | 13,904 | 29 | 27 |
| 13,752 | 13,353 | - | - | 11 | 12 | 7,794 | 7,517 |
| 883,809 | 887,189 | (107,256) | (104,697) | 136,841 | 135,033 | 12,422 | 11,833 |
| Asset Management | Corporate and Other | Consolidation | Group | ||||
|---|---|---|---|---|---|---|---|
| as of 30 June 2017 |
as of 31 December 2016 |
as of 30 June 2017 |
as of 31 December 2016 |
as of 30 June 2017 |
as of 31 December 2016 |
as of 30 June 2017 |
as of 31 December 2016 |
| - | - | 566 | 615 | (409) | (400) | 11,073 | 11,271 |
| 174 | 174 | 7,806 | 8,424 | (1,646) | (1,974) | 13,666 | 13,038 |
| - | - | - | - | (38) | (24) | 24,902 | 21,360 |
| - | - | - | - | (43) | (34) | 71,745 | 72,373 |
| - | - | (92) | (57) | (196) | (196) | 504,404 | 505,322 |
| - | - | - | - | - | - | 115,268 | 111,325 |
| 87 | 29 | 208 | 188 | (1,636) | (1,904) | 4,737 | 4,683 |
| 2,644 | 2,925 | 25,495 | 25,283 | (20,346) | (22,223) | 39,799 | 39,867 |
| 5 | 5 | 13,262 | 13,306 | (25) | (25) | 13,401 | 13,290 |
| - | - | 10,434 | 10,586 | (2,774) | (2,994) | 7,682 | 7,615 |
| - | - | 13,403 | 13,485 | (50) | (50) | 13,448 | 13,530 |
| 2,910 | 3,133 | 71,081 | 71,830 | (27,161) | (29,826) | 820,127 | 813,674 |
| Total equity | 67,062 | 70,135 | |||||
| Total liabilities and equity | 887,189 | 883,809 |
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 | 2017 | 2016 | 2017 | 2016 |
| Total revenues1 | 29,388 | 28,856 | 33,619 | 32,968 |
| Premiums earned (net) | 23,557 | 22,823 | 11,585 | 11,757 |
| Operating investment result | ||||
| Interest and similar income | 1,760 | 1,736 | 9,056 | 9,128 |
| Operating income from financial assets and liabilities carried at fair value through income (net) | (51) | (25) | (965) | (551) |
| Operating realized gains/losses (net) | 152 | 157 | 2,916 | 3,114 |
| Interest expenses, excluding interest expenses from external debt | (52) | (48) | (49) | (57) |
| Operating impairments of investments (net) | (6) | (43) | (255) | (934) |
| Investment expenses | (183) | (175) | (609) | (551) |
| Subtotal | 1,621 | 1,602 | 10,094 | 10,149 |
| Fee and commission income | 911 | 759 | 708 | 679 |
| Other income | 32 | 1 | 1 | 9 |
| Claims and insurance benefits incurred (net) | (15,556) | (15,162) | (9,838) | (10,127) |
| Operating change in reserves for insurance and investment contracts (net)2 | (258) | (254) | (6,476) | (7,211) |
| Loan loss provisions | - | - | - | - |
| Acquisition and administrative expenses (net), excluding acquisition-related expenses | (6,739) | (6,492) | (3,267) | (3,123) |
| Fee and commission expenses | (864) | (706) | (350) | (305) |
| Operating amortization of intangible assets | - | - | (9) | (9) |
| Operating restructuring charges | - | - | (17) | (14) |
| Other expenses | - | - | (148) | (149) |
| Reclassifications3 | - | - | - | 203 |
| Operating profit (loss) | 2,705 | 2,572 | 2,282 | 1,859 |
| Non-operating investment result | ||||
| Non-operating income from financial assets and liabilities carried at fair value through income (net) | (2) | (21) | 22 | 11 |
| Non-operating realized gains/losses (net) | 307 | 327 | 59 | 21 |
| Non-operating impairments of investments (net) | (53) | (168) | (27) | (218) |
| Subtotal | 252 | 138 | 54 | (186) |
| Non-operating change in reserves for insurance and investment contracts (net) | - | - | 2 | - |
| Interest expenses from external debt | - | - | - | - |
| Acquisition-related expenses | - | - | - | - |
| Non-operating amortization of intangible assets | (31) | (26) | (27) | (21) |
| Non-operating restructuring charges | (165) | (33) | (7) | (49) |
| Reclassifications3 | - | - | - | (203) |
| Non-operating items | 56 | 78 | 22 | (460) |
| Income (loss) before income taxes | 2,761 | 2,651 | 2,305 | 1,399 |
| Income taxes | (691) | (729) | (693) | (458) |
| Net income (loss) | 2,070 | 1,922 | 1,611 | 941 |
| Net income (loss) attributable to: | ||||
| Non-controlling interests | 90 | 84 | 67 | 73 |
| Shareholders | 1,980 | 1,838 | 1,544 | 868 |
1_Total revenues comprise statutory gross premiums written in Property-Casualty and Life/ Health, operating revenues in Asset Management and total revenues in Corporate and Other (Banking).
2_For the six months ended 30 June 2017, includes expenses for premium refunds (net) in Property-Casualty of € (131) mn (2016: € (129) mn).
3_From the classification of the South Korean life business as "held for sale" in the second quarter of 2016 until its disposal in the fourth quarter of 2016, the total result was considered as non-operating. Furthermore tax reclassifications are included in this line.
| Asset Management | Corporate and Other | Consolidation | Group | ||||
|---|---|---|---|---|---|---|---|
| 2017 | 2016 | 2017 | 2016 | 2017 | 2016 | 2017 | 2016 |
| 3,114 | 2,827 | 275 | 272 | (178) | (165) | 66,218 | 64,759 |
| - | - | - | - | - | - | 35,143 | 34,580 |
| 12 | 2 | 383 | 370 | (112) | (121) | 11,099 | 11,115 |
| 31 | 1 | 10 | 12 | (1) | - | (976) | (563) |
| - | - | - | - | (42) | 38 | 3,026 | 3,310 |
| (5) | (6) | (163) | (194) | 107 | 118 | (161) | (188) |
| - | - | - | - | - | - | (261) | (977) |
| - | - | (49) | (40) | 197 | 166 | (644) | (601) |
| 38 | (2) | 181 | 148 | 148 | 200 | 12,083 | 12,097 |
| 3,845 | 3,496 | 1,138 | 643 | (1,012) | (471) | 5,591 | 5,107 |
| - | 1 | 149 | 148 | (148) | (149) | 34 | 11 |
| - | - | - | - | - | 3 | (25,394) | (25,286) |
| - | - | - | - | 35 | (74) | (6,699) | (7,539) |
| - | - | (13) | (24) | - | - | (13) | (24) |
| (1,958) | (1,868) | (692) | (699) | (27) | 8 | (12,684) | (12,173) |
| (769) | (668) | (1,027) | (540) | 838 | 296 | (2,172) | (1,923) |
| - | - | - | - | - | - | (9) | (9) |
| - | - | - | - | - | - | (17) | (14) |
| - | - | - | - | 148 | 148 | (1) | (1) |
| - | - | - | - | - | 34 | - | 238 |
| 1,156 | 960 | (265) | (323) | (18) | (5) | 5,860 | 5,063 |
| - | - | (29) | 79 | 31 | 4 | 22 | 71 |
| 7 | - | 71 | 354 | 59 | 132 | 504 | 835 |
| - | - | 9 | (58) | - | - | (71) | (444) |
| 7 | - | 51 | 375 | 91 | 136 | 454 | 462 |
| - | - | - | - | - | - | 2 | - |
| - | - | (421) | (418) | - | - | (421) | (418) |
| 6 | - | - | - | - | - | 6 | - |
| (7) | (6) | (5) | (4) | - | - | (69) | (58) |
| (8) | 2 | (56) | - | - | - | (235) | (80) |
| - | - | - | - | - | (34) | - | (238) |
| (2) | (4) | (430) | (47) | 91 | 101 | (263) | (332) |
| 1,154 | 956 | (695) | (371) | 73 | 97 | 5,597 | 4,731 |
| (419) | (340) | 239 | 183 | (21) | 39 | (1,585) | (1,306) |
| 735 | 615 | (456) | (188) | 52 | 135 | 4,013 | 3,425 |
| 35 | 29 | 11 | 8 | - | - | 203 | 194 |
| 700 | 586 | (467) | (196) | 52 | 135 | 3,810 | 3,231 |
| Total revenues | Premiums earned (net) | Operating profit (loss) | Net income (loss) | |||||
|---|---|---|---|---|---|---|---|---|
| six months ended 30 June | 2017 | 2016 | 2017 | 2016 | 2017 | 2016 | 2017 | 2016 |
| German Speaking Countries and Central & Eastern Europe |
9,182 | 8,925 | 6,151 | 5,961 | 765 | 756 | 638 | 608 |
| Western & Southern Europe, Middle East, Africa, Asia Pacific |
6,737 | 6,758 | 5,786 | 5,676 | 923 | 761 | 665 | 507 |
| Iberia & Latin America | 2,615 | 2,353 | 1,828 | 1,677 | 154 | 89 | 54 | 55 |
| Global Insurance Lines & Anglo Markets | 12,069 | 12,490 | 7,661 | 7,672 | 774 | 911 | 656 | 724 |
| Allianz Worldwide Partners | 2,749 | 2,479 | 2,132 | 1,837 | 87 | 55 | 57 | 30 |
| Consolidation | (3,964) | (4,149) | - | - | - | - | - | (2) |
| Total Property-Casualty | 29,388 | 28,856 | 23,557 | 22,823 | 2,705 | 2,572 | 2,070 | 1,922 |
| German Speaking Countries and Central & Eastern Europe |
13,534 | 12,305 | 7,071 | 7,214 | 818 | 797 | 549 | 543 |
| Western & Southern Europe, Middle East, Africa, Asia Pacific1 |
14,295 | 13,182 | 3,477 | 3,531 | 687 | 627 | 503 | 79 |
| Iberia & Latin America | 1,008 | 1,015 | 242 | 253 | 164 | 113 | 128 | 79 |
| USA | 5,068 | 6,575 | 609 | 547 | 587 | 302 | 410 | 220 |
| Global Insurance Lines & Anglo Markets | 297 | 321 | 185 | 211 | 17 | 15 | 13 | 13 |
| Consolidation | (584) | (430) | 1 | - | 9 | 6 | 9 | 5 |
| Total Life/Health | 33,619 | 32,968 | 11,585 | 11,757 | 2,282 | 1,859 | 1,611 | 941 |
| Asset Management | 3,114 | 2,827 | - | - | 1,156 | 960 | 735 | 615 |
| Holding & Treasury | - | - | - | - | (343) | (384) | (508) | (244) |
| Banking | 275 | 270 | - | - | 57 | 36 | 38 | 35 |
| Alternative Investments | - | - | - | - | 20 | 24 | 14 | 16 |
| Consolidation | - | 2 | - | - | - | - | - | 5 |
| Total Corporate and Other | 275 | 272 | - | - | (265) | (323) | (456) | (188) |
| Consolidation | (178) | (165) | - | - | (18) | (5) | 52 | 135 |
| Group | 66,218 | 64,759 | 35,143 | 34,580 | 5,860 | 5,063 | 4,013 | 3,425 |
1_From the classification of the South Korean life business as "held for sale" in the second quarter of 2016 until its disposal in the fourth quarter of 2016, the total result was considered as non-operating.
| € MN | ||
|---|---|---|
| as of 30 June 2017 |
as of 31 Decembe r 2016 |
|
| Financial assets held for trading | ||
| Debt securities | 431 | 264 |
| Equity securities | 201 | 210 |
| Derivative financial instruments | 2,666 | 2,433 |
| Subtotal | 3,297 | 2,907 |
| Financial assets designated at fair value through income |
||
| Debt securities | 2,691 | 2,970 |
| Equity securities | 2,466 | 2,457 |
| Subtotal | 5,157 | 5,426 |
| Total | 8,454 | 8,333 |
€ MN
| as of 30 June 2017 |
as of 31 Decembe r 2016 |
|
|---|---|---|
| Available-for-sale investments | 511,147 | 512,268 |
| Held-to-maturity investments | 2,414 | 2,399 |
| Funds held by others under reinsurance contracts assumed |
908 | 912 |
| Investments in associates and joint ventures | 7,624 | 7,161 |
| Real estate held for investment | 11,226 | 11,732 |
| Fixed assets of renewable energy investments | 2,487 | 2,397 |
| Total | 535,806 | 536,869 |
| € MN | ||||||||
|---|---|---|---|---|---|---|---|---|
| as of 30 June 2017 | as of 31 December 2016 | |||||||
| Amortized cost |
Unrealized gains |
Unrealized losses |
Fair value | Amortized cost |
Unrealized gains |
Unrealized losses |
Fair value | |
| Debt securities | ||||||||
| Corporate bonds | 227,185 | 15,050 | (917) | 241,319 | 230,504 | 15,944 | (1,575) | 244,874 |
| Government and government agency bonds1 | 178,163 | 21,728 | (1,509) | 198,383 | 173,456 | 27,121 | (1,663) | 198,914 |
| MBS/ABS | 20,648 | 401 | (179) | 20,869 | 21,258 | 441 | (303) | 21,396 |
| Other | 4,351 | 638 | (10) | 4,979 | 3,569 | 753 | (17) | 4,305 |
| Subtotal | 430,348 | 37,817 | (2,615) | 465,550 | 428,787 | 44,259 | (3,557) | 469,489 |
| Equity securities | 32,730 | 13,206 | (338) | 45,598 | 30,323 | 12,649 | (192) | 42,779 |
| Total | 463,078 | 51,023 | (2,954) | 511,147 | 459,109 | 56,908 | (3,750) | 512,268 |
1_As of 30 June 2017, fair value and amortized costs of bonds from countries with a rating below AA amounted to € 73,359 mn (31 December 2016: € 73,519 mn) and € 68,385 mn (31 December 2016: € 67,571 mn), respectively.
| as of 30 June 2017 |
as of 31 Decembe r 2016 |
|
|---|---|---|
| Short-term investments and certificates of deposit | 3,341 | 3,699 |
| Loans | 99,504 | 99,883 |
| Other | 1,747 | 1,884 |
| Subtotal | 104,591 | 105,466 |
| Loan loss allowance | (95) | (97) |
| Total | 104,496 | 105,369 |
€ MN
| as of 30 June 2017 |
as of 31 Decembe r 2016 |
|
|---|---|---|
| Unearned premiums | 1,912 | 1,543 |
| Reserves for loss and loss adjustment expenses | 8,253 | 8,685 |
| Aggregate policy reserves | 4,938 | 5,211 |
| Other insurance reserves | 122 | 124 |
| Total | 15,225 | 15,562 |
€ MN
| as of 30 June 2017 |
as of 31 Decembe r 2016 |
|
|---|---|---|
| Deferred acquisition costs | ||
| Property-Casualty | 5,026 | 4,782 |
| Life/Health | 17,962 | 18,780 |
| Subtotal | 22,988 | 23,562 |
| Deferred sales inducements | 579 | 781 |
| Present value of future profits | 494 | 544 |
| Total | 24,061 | 24,887 |
€ MN
| as of 30 June | as of 31 Decembe |
|
|---|---|---|
| 2017 | r 2016 | |
| Receivables | ||
| Policyholders | 5,991 | 5,938 |
| Agents | 4,638 | 4,217 |
| Reinsurance | 2,898 | 2,755 |
| Other | 5,587 | 5,126 |
| Less allowances for doubtful accounts | (597) | (632) |
| Subtotal | 18,518 | 17,404 |
| Tax receivables | ||
| Income taxes | 1,886 | 1,809 |
| Other taxes | 1,580 | 1,615 |
| Subtotal | 3,467 | 3,424 |
| Accrued dividends, interest and rent | 6,174 | 7,257 |
| Prepaid expenses | 530 | 390 |
| Derivative financial instruments used for hedging, that meet the criteria for hedge accounting, and firm commitments |
473 | 677 |
| Property and equipment | ||
| Real estate held for own use | 3,005 | 3,024 |
| Software | 2,711 | 2,640 |
| Equipment | 1,470 | 1,477 |
| Subtotal | 7,186 | 7,141 |
| Other assets | 1,694 | 1,756 |
| Total | 38,041 | 38,050 |
| € MN | ||
|---|---|---|
| as of 30 June 2017 |
as of 31 Decembe r 2016 |
|
| Goodwill | 12,060 | 12,372 |
| Distribution agreements1 | 898 | 951 |
| Acquired business portfolios2 | 148 | 172 |
| Customer relationships | 107 | 122 |
| Other3 | 140 | 136 |
Total 13,353 13,752 1_Primarily includes the long-term distribution agreements with Commerzbank AG of € 242 mn (2016:
€ 261 mn), Banco Popular S.A. of € 361 mn (2016: € 371 mn), Yapi ve Kredi Bankasi A.S. of € 84 mn (2016: € 96 mn), Philippine National Bank of € 73 mn (2016: € 83 mn) and HSBC Asia, HSBC Turkey, BTPN Indonesia and Maybank Indonesia of € 118 mn (2016: € 133 mn).
2_Primarily includes the acquired business portfolio of Allianz Yasam ve Emeklilik A.S. of € 87 mn (2016: € 98 mn).
3_Primarily includes heritable building rights, land use rights, lease rights and brand names.
| € MN | |
|---|---|
| as of 30 June 2017 |
as of 31 December 2016 |
|
|---|---|---|
| Payable on demand and other deposits | 927 | 897 |
| Repurchase agreements and collateral received from securities lending transactions and derivatives |
4,472 | 4,040 |
| Other | 8,267 | 8,101 |
| Total | 13,666 | 13,038 |
As of 30 June 2017, the reserves for loss and loss adjustment expenses of the Allianz Group amounted in total to € 71,745 mn (31 December 2016: € 72,373 mn). The following table reconciles the beginning and ending reserves of the Property-Casualty business segment for the half-years ended 30 June 2017 and 2016.
| 2017 | 2016 | |
|---|---|---|
| As of 1 January | 61,617 | 61,169 |
| Balance carry forward of discounted loss reserves | 4,055 | 3,882 |
| Subtotal | 65,671 | 65,051 |
| Loss and loss adjustment expenses incurred | ||
| Current year | 17,547 | 17,797 |
| Prior years | (1,016) | (1,378) |
| Subtotal | 16,531 | 16,419 |
| Loss and loss adjustment expenses paid | ||
| Current year | (6,341) | (6,395) |
| Prior years | (9,804) | (9,563) |
| Subtotal | (16,145) | (15,958) |
| Foreign currency translation adjustments and other changes |
(1,184) | (532) |
| Subtotal | 64,873 | 64,981 |
| Ending balance of discounted loss reserves | (4,041) | (3,969) |
| As of 30 June | 60,832 | 61,012 |
| € MN | ||
|---|---|---|
| as of 30 June 2017 |
as of 31 December 2016 |
|
| Aggregate policy reserves | 436,012 | 433,610 |
| Reserves for premium refunds | 67,391 | 70,664 |
| Other insurance reserves | 1,001 | 1,048 |
| Total | 504,404 | 505,322 |
| as of 30 June 2017 |
as of 31 December 2016 |
|
|---|---|---|
| Payables | ||
| Policyholders | 3,976 | 4,908 |
| Reinsurance | 1,990 | 1,745 |
| Agents | 1,491 | 1,616 |
| Subtotal | 7,457 | 8,269 |
| Payables for social security | 408 | 478 |
| Tax payables | ||
| Income taxes | 1,958 | 1,836 |
| Other taxes | 1,847 | 1,452 |
| Subtotal | 3,804 | 3,287 |
| Accrued interest and rent | 588 | 564 |
| Unearned income | 465 | 440 |
| Provisions | ||
| Pensions and similar obligations | 9,047 | 9,401 |
| Employee related | 2,292 | 2,551 |
| Share-based compensation plans | 343 | 431 |
| Restructuring plans | 305 | 95 |
| Other provisions | 1,834 | 2,121 |
| Subtotal | 13,820 | 14,599 |
| Deposits retained for reinsurance ceded | 2,090 | 2,254 |
| Derivative financial instruments used for hedging, that meet the criteria for hedge accounting, and firm |
||
| commitments | 145 | 159 |
| Financial liabilities for puttable equity instruments | 2,669 | 2,894 |
| Other liabilities | 8,353 | 6,922 |
| Total | 39,799 | 39,867 |
€ MN
| as of 30 June 2017 |
as of 31 December 2016 |
|
|---|---|---|
| Senior bonds | 6,554 | 6,574 |
| Money market securities | 1,129 | 1,041 |
| Total certificated liabilities | 7,682 | 7,615 |
| Subordinated bonds1 | 13,403 | 13,485 |
| Hybrid equity2 | 45 | 45 |
| Total subordinated bonds | 13,448 | 13,530 |
1_Change due to the issuance of € 1.0 bn and \$ 0.6 bn bonds as well as the redemption of a € 1.4 bn bond in the first half-year of 2017.
2_Relates to hybrid equity issued by subsidiaries.
| ISIN | Year of Issue | Currency | Notional amount | Coupon in % | Maturity date | |
|---|---|---|---|---|---|---|
| Certificated liabilities | ||||||
| Allianz Finance II B.V., Amsterdam | DE000A1HG1J8 | 2013 | EUR | 500 | 1.375% | 13 March 2018 |
| DE000A1AKHB8 | 2009 | EUR | 1,500 | 4.750% | 22 July 2019 | |
| DE000A180B72 | 2016 | EUR | 750 | 0.000% | 21 April 2020 | |
| DE000A1G0RU9 | 2012 | EUR | 1,500 | 3.500% | 14 February 2022 | |
| DE000A1HG1K6 | 2013 | EUR | 750 | 3.000% | 13 March 2028 | |
| 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% | 7 July 2045 | |
| DE000A2DAHN6 | 2017 | EUR | 1,000 | 3.099% | 6 July 2047 | |
| XS1556937891 | 2017 | USD | 600 | 5.100% | 30 January 2049 | |
| XS0857872500 | 2012 | USD | 1,000 | 5.500% | Perpetual | |
| DE000A1YCQ29 | 2013 | EUR | 1,500 | 4.750% | Perpetual | |
| CH0234833371 | 2014 | CHF | 500 | 3.250% | Perpetual | |
| DE000A13R7Z7 | 2014 | EUR | 1,500 | 3.375% | Perpetual | |
| XS1485742438 | 2016 | USD | 1,500 | 3.875% | Perpetual | |
| Allianz Finance II B.V., Amsterdam | DE000A1GNAH1 | 2011 | EUR | 2,000 | 5.750% | 8 July 2041 |
| DE000A0GNPZ3 | 2006 | EUR | 800 | 5.375% | Perpetual |
€ MN
| as of | as of | |
|---|---|---|
| 30 June | 31 December | |
| 2017 | 2016 | |
| Shareholders' equity | ||
| Issued capital | 1,170 | 1,170 |
| Additional paid-in capital | 27,758 | 27,758 |
| Retained earnings1,2 | 26,055 | 27,087 |
| Foreign currency translation adjustments | (1,906) | (762) |
| Unrealized gains and losses (net)3 | 11,122 | 11,830 |
| Subtotal | 64,198 | 67,083 |
| Non-controlling interests | 2,864 | 3,052 |
| Total | 67,062 | 70,135 |
1_As of 30 June 2017, include € (517) mn (31 December 2016: € (157) mn) related to treasury shares. 2_During the first half year of 2017, Allianz SE purchased for an amount of € 1,638 mn approximately 9.6 million own shares as part of its share-buy-back program announced in February 2017 with a total volume of up to € 3.0 bn. Thereof 7,472,978 own shares in the amount of € 1,271 mn were cancelled by the end of June 2017 without changing the registered capital of Allianz SE.
3_As of 30 June 2017, include € 264 mn (31 December 2016: € 297 mn) related to cash flow hedges.
In the second quarter of 2017, a total dividend of € 3,410 mn (2016: € 3,320 mn) or € 7.60(2016: € 7.30) per qualifying share was paid to the shareholders.
| Property Casualty |
Life/Health | Consoli dation |
Group |
|---|---|---|---|
| 29,388 | 12,118 | (81) | 41,425 |
| (2,424) | (300) | 81 | (2,643) |
| 26,964 | 11,818 | - | 38,782 |
| (3,406) | (232) | - | (3,639) |
| 23,557 | 11,585 | - | 35,143 |
| 28,856 | 12,357 | (73) | 41,140 |
| (2,743) | (323) | 73 | (2,993) |
| 26,113 | 12,034 | - | 38,147 |
| (3,290) | (277) | - | (3,567) |
| 22,823 | 11,757 | - | 34,580 |
| € MN | |
|---|---|
| six months ended 30 June | 2017 | 2016 |
|---|---|---|
| Dividends from available-for-sale investments | 1,227 | 1,023 |
| Interest from available-for-sale investments | 6,731 | 6,939 |
| Interest from loans to banks and customers | 2,131 | 2,274 |
| Rent from real estate held for investment | 459 | 463 |
| Other | 550 | 416 |
| Total | 11,099 | 11,115 |
| six months ended 30 June | 2017 | 2016 |
|---|---|---|
| Income from financial assets and liabilities held for trading (net) |
1,272 | (322) |
| Income from financial assets and liabilities designated at fair value through income (net) |
180 | (109) |
| Income from financial liabilities for puttable equity instruments (net) |
(85) | 134 |
| Foreign currency gains and losses (net)1 | (2,322) | (195) |
| Total | (954) | (491) |
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 | 2017 | 2016 |
| REALIZED GAINS | ||
| Available-for-sale investments | ||
| Equity securities | 1,379 | 1,319 |
| Debt securities | 2,688 | 2,972 |
| Subtotal | 4,067 | 4,291 |
| Other | 268 | 581 |
| Subtotal | 4,335 | 4,872 |
| REALIZED LOSSES | ||
| Available-for-sale investments | ||
| Equity securities | (271) | (257) |
| Debt securities | (503) | (469) |
| Subtotal | (773) | (726) |
| Other | (33) | (1) |
| Subtotal | (806) | (728) |
| Total | 3,529 | 4,144 |
| € MN | ||
|---|---|---|
| six months ended 30 June | 2017 | 2016 |
| PROPERTY-CASUALTY | ||
| Fees from credit and assistance business | 663 | 516 |
| Service agreements | 249 | 243 |
| Subtotal | 911 | 759 |
| LIFE/HEALTH | ||
| Service agreements | 60 | 64 |
| Investment advisory | 648 | 615 |
| Subtotal | 708 | 679 |
| ASSET MANAGEMENT | ||
| Management and advisory fees | 3,398 | 3,122 |
| Loading and exit fees | 283 | 231 |
| Performance fees | 149 | 127 |
| Other | 15 | 17 |
| Subtotal | 3,845 | 3,496 |
| CORPORATE AND OTHER | ||
| Service agreements | 750 | 288 |
| Investment advisory and banking activities | 388 | 355 |
| Subtotal | 1,138 | 643 |
| CONSOLIDATION | (1,012) | (471) |
| Total | 5,591 | 5,107 |
| € MN | ||||
|---|---|---|---|---|
| six months ended 30 June |
Property Casualty |
Life/Health | Consoli dation |
Group |
| 2017 | ||||
| Gross | (16,531) | (10,089) | 41 | (26,579) |
| Ceded | 975 | 251 | (41) | 1,185 |
| Net | (15,556) | (9,838) | - | (25,394) |
| 2016 | ||||
| Gross | (16,419) | (10,416) | 39 | (26,797) |
| Ceded | 1,258 | 289 | (36) | 1,511 |
| Net | (15,162) | (10,127) | 3 | (25,286) |
CHANGE IN RESERVES FOR INSURANCE AND INVESTMENT CONTRACTS (NET)
| € MN | ||||
|---|---|---|---|---|
| six months ended 30 June |
Property Casualty |
Life/Health | Consoli dation |
Group |
| 2017 | ||||
| Gross | (261) | (6,605) | 35 | (6,832) |
| Ceded | 3 | 131 | - | 134 |
| Net | (258) | (6,474) | 35 | (6,697) |
| 2016 | ||||
| Gross | (256) | (7,371) | (74) | (7,701) |
| Ceded | 3 | 160 | - | 163 |
| Net | (254) | (7,211) | (74) | (7,539) |
€ MN
| six months ended 30 June | 2017 | 2016 |
|---|---|---|
| Liabilities to banks and customers | (75) | (89) |
| Deposits retained for reinsurance ceded | (21) | (34) |
| Certificated liabilities | (119) | (142) |
| Subordinated liabilities | (315) | (286) |
| Other | (51) | (55) |
| Total | (582) | (606) |
IMPAIRMENTS OF INVESTMENTS (NET)
| 2017 | 2016 |
|---|---|
| (333) | (1,175) |
| (35) | (42) |
| (368) | (1,217) |
| (6) | (9) |
| - | (226) |
| (374) | (1,451) |
| 42 | 31 |
| (332) | (1,421) |
| € MN | ||
|---|---|---|
| six months ended 30 June | 2017 | 2016 |
|---|---|---|
| Investment management expenses | (370) | (344) |
| Expenses from real estate held for investment | (177) | (193) |
| Expenses from fixed assets of renewable energy investments |
(97) | (64) |
| Total | (644) | (601) |
| € MN | ||
|---|---|---|
| six months ended 30 June | 2017 | 2016 |
| PROPERTY-CASUALTY | ||
| Acquisition costs | (5,128) | (5,023) |
| Administrative expenses | (1,611) | (1,469) |
| Subtotal | (6,739) | (6,492) |
| LIFE/HEALTH | ||
| Acquisition costs | (2,391) | (2,225) |
| Administrative expenses | (877) | (899) |
| Subtotal | (3,267) | (3,123) |
| ASSET MANAGEMENT | ||
| Personnel expenses | (1,185) | (1,131) |
| Non-personnel expenses | (767) | (736) |
| Subtotal | (1,952) | (1,868) |
| CORPORATE AND OTHER | ||
| Administrative expenses | (692) | (698) |
| Subtotal | (692) | (698) |
| CONSOLIDATION | (27) | 8 |
| Total | (12,678) | (12,173) |
| € MN | ||
|---|---|---|
| six months ended 30 June | 2017 | 2016 |
| PROPERTY-CASUALTY | ||
| Fees from credit and assistance business | (663) | (506) |
| Service agreements | (201) | (199) |
| Subtotal | (864) | (706) |
| LIFE/HEALTH | ||
| Service agreements | (34) | (28) |
| Investment advisory | (315) | (277) |
| Subtotal | (350) | (305) |
| ASSET MANAGEMENT | ||
| Commissions | (694) | (637) |
| Other | (76) | (31) |
| Subtotal | (769) | (668) |
| CORPORATE AND OTHER | ||
| Service agreements | (859) | (384) |
| Investment advisory and banking activities | (168) | (156) |
| Subtotal | (1,027) | (540) |
| CONSOLIDATION | 838 | 296 |
| Total | (2,172) | (1,923) |
For the six months ended 30 June 2017 and 2016, the income taxes on components of other comprehensive income consist of the following:
| six months ended 30 June | 2017 | 2016 |
|---|---|---|
| Items that may be reclassified to profit or loss in future periods |
||
| Foreign currency translation adjustments | (50) | (37) |
| Available-for-sale investments | 245 | (2,835) |
| Cash flow hedges | 15 | (109) |
| Share of other comprehensive income of associates and joint ventures |
1 | 7 |
| Miscellaneous | 146 | (12) |
| Items that may never be reclassified to profit or loss | ||
| Changes in actuarial gains and losses on defined benefit plans |
(120) | 293 |
| Total | 237 | (2,694) |
| six months ended 30 June | 2017 | 2016 |
|---|---|---|
| Current income taxes | (1,367) | (1,462) |
| Deferred income taxes | (217) | 156 |
| Total | (1,585) | (1,306) |
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 2017 | as of 31 December 2016 | ||||
|---|---|---|---|---|---|
| Carrying amount |
Fair value | Carrying amount |
Fair value | ||
| FINANCIAL ASSETS | |||||
| Cash and cash equivalents | 17,154 | 17,154 | 14,463 | 14,463 | |
| Financial assets held for trading | 3,297 | 3,297 | 2,907 | 2,907 | |
| Financial assets designated at fair value through income | 5,157 | 5,157 | 5,426 | 5,426 | |
| Available-for-sale investments | 511,147 | 511,147 | 512,268 | 512,268 | |
| Held-to-maturity investments | 2,414 | 2,778 | 2,399 | 2,805 | |
| Investments in associates and joint ventures | 7,624 | 9,528 | 7,161 | 9,031 | |
| Real estate held for investment | 11,226 | 17,981 | 11,732 | 18,380 | |
| Loans and advances to banks and customers | 104,496 | 120,899 | 105,369 | 124,422 | |
| Financial assets for unit-linked contracts | 115,268 | 115,268 | 111,325 | 111,325 | |
| Derivative financial instruments and firm commitments included in other assets | 473 | 473 | 677 | 677 | |
| FINANCIAL LIABILITIES | |||||
| Financial liabilities held for trading | 11,073 | 11,073 | 11,271 | 11,271 | |
| Liabilities to banks and customers | 13,666 | 13,685 | 13,038 | 13,062 | |
| Financial liabilities for unit-linked contracts | 115,268 | 115,268 | 111,325 | 111,325 | |
| Derivative financial instruments and firm commitments included in other liabilities | 145 | 145 | 159 | 159 | |
| Financial liabilities for puttable equity instruments | 2,669 | 2,669 | 2,894 | 2,894 | |
| Certificated liabilities | 7,682 | 8,502 | 7,615 | 8,530 | |
| Subordinated liabilities | 13,448 | 14,668 | 13,530 | 14,256 |
As of 30 June 2017, fair values could not be reliably measured for equity investments whose carrying amounts totaled € 99 mn (31 December 2016: € 100 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 2017 and 31 December 2016:
| € MN | ||||||||
|---|---|---|---|---|---|---|---|---|
| as of 30 June 2017 | as of 31 December 2016 | |||||||
| 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 | 366 | 2,918 | 13 | 3,297 | 447 | 2,451 | 9 | 2,907 |
| Financial assets designated at fair value through income |
3,966 | 1,045 | 145 | 5,157 | 4,205 | 1,043 | 178 | 5,426 |
| Subtotal | 4,332 | 3,964 | 158 | 8,454 | 4,652 | 3,494 | 187 | 8,333 |
| Available-for-sale investments | ||||||||
| Corporate bonds | 28,800 | 197,682 | 14,837 | 241,319 | 29,233 | 201,489 | 14,152 | 244,874 |
| Government and government agency bonds | 32,937 | 164,890 | 555 | 198,383 | 33,476 | 165,099 | 339 | 198,914 |
| MBS/ABS | 141 | 20,535 | 193 | 20,869 | 175 | 20,702 | 519 | 21,396 |
| Other | 789 | 1,515 | 2,675 | 4,979 | 783 | 1,018 | 2,504 | 4,305 |
| Equity securities | 36,698 | 781 | 8,118 | 45,598 | 34,169 | 781 | 7,829 | 42,779 |
| Subtotal | 99,364 | 385,404 | 26,379 | 511,147 | 97,836 | 389,089 | 25,342 | 512,268 |
| Financial assets for unit-linked contracts | 93,339 | 21,445 | 485 | 115,268 | 91,071 | 19,877 | 377 | 111,325 |
| Derivative financial instruments and firm commitments included in other assets |
- | 472 | - | 473 | - | 677 | - | 677 |
| Total | 197,035 | 411,285 | 27,022 | 635,342 | 193,560 | 413,137 | 25,906 | 632,603 |
| FINANCIAL LIABILITIES | ||||||||
| Financial liabilities held for trading | 28 | 1,302 | 9,742 | 11,073 | 36 | 1,538 | 9,697 | 11,271 |
| Financial liabilities for unit-linked contracts | 93,339 | 21,445 | 485 | 115,268 | 91,071 | 19,877 | 377 | 111,325 |
| Derivative financial instruments and firm commitments included in other liabilities |
1 | 143 | - | 145 | 3 | 156 | - | 159 |
| Financial liabilities for puttable equity instruments | 2,472 | 53 | 145 | 2,669 | 2,657 | 92 | 145 | 2,894 |
| Total | 95,841 | 22,943 | 10,372 | 129,155 | 93,767 | 21,664 | 10,220 | 125,650 |
| 1_Quoted prices in active markets |
2_Market observable inputs
3_Non-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, as well as the significant Level-3 portfolios, including the respective narratives and sensitivities, are described in the Allianz Group's Annual Report 2016. No material changes have occurred since this report was published.
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. The converse policy applies for transfers from level 2 to level 1.
The following tables show reconciliations of the financial instruments carried at fair value and classified as level 3.
| Financial assets carried at fair value through income |
Available-for-sale investments – Debt securities1 |
Available-for-sale investments – Equity securities |
Financial assets for unit-linked contracts |
Total | |
|---|---|---|---|---|---|
| Carrying value (fair value) as of 1 January 2017 | 187 | 17,513 | 7,829 | 377 | 25,906 |
| Additions through purchases and issues | 24 | 2,604 | 1,082 | 149 | 3,858 |
| Net transfers into (out of) Level 3 | (36) | (600) | 1 | (25) | (660) |
| Disposals through sales and settlements | 105 | (692) | (482) | (9) | (1,079) |
| Net gains (losses) recognized in consolidated income statement | (125) | (8) | 13 | 3 | (118) |
| Net gains (losses) recognized in other comprehensive income | - | 219 | (74) | - | 145 |
| Impairments | - | (18) | (175) | - | (192) |
| Foreign currency translation adjustments | 5 | (742) | (70) | (10) | (817) |
| Changes in the consolidated subsidiaries of the Allianz Group | - | (15) | (6) | - | (21) |
| Carrying value (fair value) as of 30 June 2017 | 158 | 18,260 | 8,118 | 485 | 27,022 |
| Net gains (losses) in profit or loss attributable to a change in unrealized gains or losses for financial assets held at the reporting date |
(9) | (79) | - | 3 | (85) |
1_Primarily include corporate bonds.
€ MN
| Financial liabilities held for trading |
Financial liabilities for unit-linked contracts |
Financial liabilities for puttable equity instruments |
Total | |
|---|---|---|---|---|
| Carrying value (fair value) as of 1 January 2017 | 9,697 | 377 | 145 | 10,220 |
| Additions through purchases and issues | 505 | 149 | - | 654 |
| Net transfers into (out of) Level 3 | (1) | (25) | - | (26) |
| Disposals through sales and settlements | (427) | (9) | - | (437) |
| Net gains (losses) recognized in consolidated income statement | 727 | 3 | - | 730 |
| Net gains (losses) recognized in other comprehensive income | - | - | - | - |
| Impairments | - | - | - | - |
| Foreign currency translation adjustments | (759) | (10) | - | (769) |
| Changes in the consolidated subsidiaries of the Allianz Group | - | - | - | - |
| Carrying value (fair value) as of 30 June 2017 | 9,742 | 485 | 145 | 10,372 |
| Net gains (losses) in profit or loss attributable to a change in unrealized gains or losses for financial liabilities held at the reporting date |
676 | 3 | - | 678 |
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 26.
As of 30 June 2017, there were no significant changes in contingent liabilities, compared to the consolidated financial statements for the year ended 31 December 2016.
As of 30 June 2017, outstanding commitments to invest in private equity funds and similar financial instruments amounted to € 11,175 mn (31 December 2016: € 9,640 mn) and outstanding commitments to invest in real estate and infrastructure amounted to € 5,369 mn (31 December 2016: € 3,979 mn). All other commitments showed no significant changes.
Liverpool Victoria (LV=) will receive £ 500 mn from Allianz in exchange for a 49 percent stake in Liverpool Victoria General Insurance (LV= GI). The new, long-term joint venture LV= GI, will acquire Allianz's personal home and motor insurer's renewal rights while Allianz will obtain LV= GI's commercial insurer's renewal rights. The first stage of the transaction is expected to close during the second half of 2017. The second stage of the transaction will take place in 2019 and will see Allianz pay £ 213 mn for a further 20.9 percent stake in LV= GI through an agreed, forward purchase, based on a total valuation of £ 1.020 bn for 100 percent of LV= GI. Both stages are subject to regulatory approvals.
B _ Condensed Consolidated Interim Financial Statements
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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 2017
Allianz SE The Board of Management
We have reviewed the condensed interim consolidated financial statements of Allianz SE, Munich – comprising the consolidated balance sheets, consolidated income statements, consolidated statements of comprehensive income, consolidated statements of changes in equity, consolidated statements of cash flows and selected explanatory notes – together with the interim group management report of Allianz SE, Munich, for the period from 1 January to 30 June 2017, that are part of the semi-annual financial report according to §37w WpHG ["Wertpapierhandelsgesetz": "German Securities Trading Act"]. The preparation of the condensed interim consolidated financial statements in accordance with International Accounting Standard IAS 34 "Interim Financial Reporting" as adopted by the EU, and of the interim group management report in accordance with the requirements of the WpHG applicable to interim group management reports, is the responsibility of the Company's management. Our responsibility is to issue a report on the condensed interim consolidated financial statements and on the interim group management report based on our review.
We performed our review of the condensed interim consolidated financial statements and the interim group management report in accordance with the German generally accepted standards for the review of financial statements promulgated by the Institut der Wirtschaftsprüfer (IDW). Those standards require that we plan and perform the review so that we can preclude through critical evaluation, with a certain level of assurance, that the condensed interim consolidated financial statements have not been prepared, in material respects, in accordance with IAS 34 "Interim Financial Reporting" as adopted by the EU, and that the interim group management report has not been prepared, in material respects, in accordance with the requirements of the WpHG applicable to interim group management reports. A review is limited primarily to inquiries of company employees and analytical assessments 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 issue an auditor's report.
Based on our review, no matters have come to our attention that cause us to presume that the condensed interim consolidated financial statements have not been prepared, in material respects, in accordance with IAS 34, "Interim Financial Reporting" as adopted by the EU, or that the interim group management report has not been prepared, in material respects, in accordance with the requirements of the WpHG applicable to interim group management reports.
Munich, 3 August 2017
KPMG AG Wirtschaftsprüfungsgesellschaft
Klaus Becker Andreas Dielehner Wirtschaftsprüfer Wirtschaftsprüfer
(Independent Auditor) (Independent Auditor)
| Important dates for shareholders and analysts1 | |
|---|---|
| Financial Results 3Q _____________ 10 November 2017 | |
| Financial Results 2017 _____________ 16 February 2018 | |
| Annual Report 2017 ____________ 9 March 2018 | |
| Annual General Meeting _________ 9 May 2018 | |
| Financial Results 1Q ____________ 15 May 2018 | |
| Financial Results 2Q/Interim Report 6M ________ 3 August 2018 | |
| Financial Results 3Q ______________ 9 November 2018 |
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 them on the internet at www.allianz.com/financialcalendar.
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