Annual Report • May 21, 2015
Annual Report
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| three months ended 31 March | 2015 | 2014 | Change from previous year |
More details on page |
|
|---|---|---|---|---|---|
| Income statement | |||||
| Total revenues1 | € mn | 37,769 | 33,963 | 11.2% | 6 |
| Operating profit2 | € mn | 2,855 | 2,723 | 4.8% | 7 |
| Net income2 | € mn | 1,937 | 1,740 | 11.3% | 7 |
| thereof: attributable to shareholders | € mn | 1,822 | 1,640 | 11.0% | 7 |
| Business segments3 | |||||
| Property-Casualty | |||||
| Gross premiums written | € mn | 17,339 | 15,217 | 13.9% | 10 |
| Operating profit2 | € mn | 1,285 | 1,489 | (13.7)% | 11 |
| Net income2 | € mn | 922 | 645 | 42.9% | 13 |
| Combined ratio | % | 94.6 | 92.6 | 2.0%-p | 11 |
| Life/Health | |||||
| Statutory premiums | € mn | 18,822 | 17,163 | 9.7% | 16 |
| Operating profit2 | € mn | 1,104 | 880 | 25.5% | 18 |
| Net income2 | € mn | 739 | 629 | 17.5% | 20 |
| Margin on reserves | bps | 77 | 73 | 5 | 20 |
| Asset Management | |||||
| Operating revenues | € mn | 1,573 | 1,517 | 3.7% | 25 |
| Operating profit2 | € mn | 555 | 646 | (14.0)% | 25 |
| Net income2 | € mn | 329 | 406 | (19.0)% | 26 |
| Cost-income ratio | % | 64.7 | 57.4 | 7.3%-p | 25 |
| Corporate and Other | |||||
| Total revenues | € mn | 140 | 139 | 0.7% | – |
| Operating result2 | € mn | (101) | (222) | 54.4% | 28 |
| Net income (loss)2 | € mn | (49) | 131 | n.m. | 28 |
| Balance sheet as of 31 March4 | |||||
| Total assets | € mn | 878,313 | 805,787 | 9.0% | 31 |
| Shareholders' equity | € mn | 68,397 | 60,747 | 12.6% | 30 |
| Non-controlling interests | € mn | 3,103 | 2,955 | 5.0% | 30 |
| Share information | |||||
| Basic earnings per share | € | 4.01 | 3.62 | 10.9% | 88 |
| Diluted earnings per share | € | 4.00 | 3.55 | 12.9% | 88 |
| Share price as of 31 March4 | € | 161.85 | 137.35 | 17.8% | 1 |
| Market capitalization as of 31 March4 | € mn | 73,965 | 62,769 | 17.8% | – |
| Other data | |||||
| Standard&Poor's rating5 | AA Stable outlook | AA Stable outlook | – | – | |
| Conglomerate solvency ratio4, 6 |
% | 190 | 181 | 10%-p | 30 |
| Total assets under management as of 31 March4 | € Bn | 1,933 | 1,801 | 7.3% | 24 |
| thereof: third-party assets under management as of 31 March4 | € Bn | 1,408 | 1,313 | 7.2% | 24 |
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 The Allianz Group uses operating profit and net income as key financial indicators to assess the performance of its business segments and the Group as a whole.
3 The Allianz Group operates and manages its activities through four business segments: Property-Casualty, Life/Health, Asset Management, and Corporate and Other. For further information, please refer to note 4 to the condensed consolidated interim financial statements.
4 2014 figures as of 31 December 2014.
5 Insurer financial strength rating, affirmed on 22 December 2014.
6 Conglomerate solvency ratios as of 31 March 2015 and 31 December 2014 were adjusted for an upcoming redemption of hybrid capital (subordinated bonds) of € 0.4 bn in June 2015, for which a call notice was published in April 2015. Excluding these adjustments, the solvency ratios would be 192% and 182% (including off-balance sheet reserves) as of 31 March 2015 and 31 December 2014, respectively. Off-balance sheet reserves are accepted by the authorities as eligible capital only upon request. Allianz SE has not submitted an application so far. Excluding off-balance sheet reserves and adjusted for the upcoming redemption of hybrid capital, the solvency ratios as of 31 March 2015 and 31 December 2014 would be 182% and 172%, respectively.
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Development of the Allianz share price versus STOXX Europe 600 Insurance and EURO STOXX 50
| Security codes | WKN 840 400 |
|---|---|
| ISIN DE 000 840 400 5 | |
| Bloomberg | ALV GR |
| Reuters | 0#ALVG.DEU |
The condensed consolidated interim financial statements are presented in millions of Euros (€ MN) unless otherwise stated. Due to rounding, numbers presented may not add up precisely to the totals provided and percentages may not precisely reflect the absolute figures. Previously published figures have been adjusted accordingly.
Pages 4 – 38
23 Asset Management
16 Life/Health Insurance Operations
27 Corporate and Other
30 Balance Sheet Review 37 Reconciliations
First quarter 2015
Allianz SE and its subsidiaries (the Allianz Group) have operations in over 70 countries. The Group's results are reported by business segment: Property-Casualty insurance operations, Life/Health insurance operations, Asset Management, and Corporate and Other.
| € mn three months ended 31 March |
2015 | 2014 |
|---|---|---|
| Total revenues | 37,769 | 33,963 |
| Operating profit | 2,855 | 2,723 |
| Net income | 1,937 | 1,740 |
| Solvency ratio1 in % | 190 | 181 |
Most industrialized countries registered a fairly solid start to 2015. The Eurozone economy benefited from lower oil prices and the depreciation of the Euro. Growth performance in many major emerging market economies remained subdued, among other things for structural reasons. Overall, global economic activity continued to trend moderately upwards.
In March 2015, the European Central Bank started its bond purchasing program and in the United States, the Federal Reserve Bank changed its forward guidance, thus in principle paving the way for an initial rate hike later this year. The increasingly divergent monetary policy stances of the European Central Bank and the Federal Reserve Bank contributed to a further pronounced weakening of the Euro against the U.S. Dollar. The U.S. Dollar to Euro exchange rate was 1.07 at the end of the first quarter (beginning of the year: 1.21).
Yields on 10-year German government bonds continued to decline and closed the quarter at 0.2%, 30 basis points lower than at the beginning of the year. Spreads on government bonds in most Eurozone periphery countries tightened further in the first quarter of 2015. Equity markets in many emerging and mature economies strengthened during the first quarter, with strong gains in the Eurozone in particular.
U.S. winter weather losses, storms in Europe, pricing weakness in the property-casualty sector and big movements on the currency markets all caused headaches in the first quarter of 2015. One challenge stands out, however: the continuous drop in European yields, which has put investment returns under heavy pressure and impacted capital positions. This prompted the industry to shift up a gear in its response: diversifying investments into so-called alternatives, reducing expenses and shifting the business mix, especially in the life segment.
1 Conglomerate solvency ratios as of 31 March 2015 and 31 December 2014 were adjusted for an upcoming redemption of hybrid capital (subordinated bonds) of € 0.4 bn in June 2015, for which a call notice was published in April 2015. Excluding these adjustments, the solvency ratios would be 192% and 182% (including off-balance sheet reserves) as of 31 March 2015 and 31 December 2014, respectively. Off-balance sheet
reserves are accepted by the authorities as eligible capital only upon request. Allianz SE has not submitted an application so far. Excluding off-balance sheet reserves and adjusted for the upcoming redemption of hybrid capital, the solvency ratios as of 31 March 2015 and 31 December 2014 would be 182% and 172%, respectively.
Our total revenues grew 11.2% to € 37.8 bn. This equals an increase of 3.7% on an internal basis1, and was mainly driven by strong revenue growth in our Life/Health business and in our Property-Casualty business. However, lower operating revenues in our Asset Management business segment partly offset this growth.
Our operating profit was up 4.8% to € 2,855 mn. The main driver behind this was a higher investment margin in our Life/Health business. An improvement of the result in our Corporate and Other business also contributed to the increase. These positive developments were partly offset by a lower underwriting result and restructuring charges in our Property-Casualty business, while increased operating expenses were the main driver for a decline in operating profit in our Asset Management business.
Net income rose 11.3% to € 1,937 mn, primarily due to our strong operating performance and favorable market developments. Net income attributable to shareholders and non-controlling interests amounted to € 1,822 mn (1Q 2014: € 1,640 mn) and € 115 mn (1Q 2014: € 100 mn), respectively.
Our shareholders' equity amounted to € 68.4 bn, an increase of € 7.7 bn compared to year-end 2014. Our conglomerate solvency ratio grew 10 percentage points to 190%2.
1 Internal total revenue growth excludes the effects of foreign currency translation as well as acquisitions and disposals. Please refer to page 37 for a reconciliation of nominal total revenue growth to internal total revenue growth for each of our segments and the Allianz Group as a whole.
2 Conglomerate solvency ratios as of 31 March 2015 and 31 December 2014 were adjusted for an upcoming redemption of hybrid capital (subordinated bonds) of € 0.4 bn in June 2015, for which a call notice was published in April 2015. Excluding these adjustments, the solvency ratios would be 192% and 182% (including off-balance sheet reserves) as of 31 March 2015 and 31 December 2014, respectively. Off-balance sheet reserves are accepted by the authorities as eligible capital only upon request. Allianz SE has not submitted an application so far. Excluding off-balance sheet reserves and adjusted for the upcoming redemption of hybrid capital, the solvency ratios as of 31 March 2015 and 31 December 2014 would be 182% and 172%, respectively.
� mn
1 Total revenues include € (103) mn (1Q 2014: € (72) mn) from consolidation for 1Q 2015.
Property-Casualty gross premiums written grew 13.9% and amounted to € 17.3 bn. On an internal basis1, we recorded an increase in gross premiums written of 3.5%. This was largely driven by positive volume effects. We registered strong growth particularly at AGCS, Allianz Worldwide Partners, in Germany and in Latin America.
Life/Health statutory premiums amounted to € 18.8 bn, an increase of 5.3% on an internal basis1. Strong growth of single premium unit-linked products in Italy and in the Asia-Pacific region more than compensated for the decreases in France and Benelux, while favorable foreign currency translation effects offset a decrease in the United States.
Asset Management operating revenues increased by € 56 mn – or 3.7% – to € 1,573 mn. Excluding the positive foreign currency translation effects of € 218 mn, operating revenues decreased by 10.7% on an internal basis1. This decrease was mainly driven by lower net fee and commission income due to continued third-party assets under management net outflows, partly offset by higher performance fees.
Total revenues in our Banking operations (reported in our Corporate and Other business segment) were flat at € 140 mn.
3 Total revenues comprise statutory gross premiums written in Property-Casualty and in Life/Health, operating revenues in Asset Management and total revenues in Corporate and Other (Banking).
A Interim Group Management Report
23 Asset Management
5 Executive Summary
27 Corporate and Other
29 Outlook
30 Balance Sheet Review 37 Reconciliations
Operating profit
€ 1,285 mn. This was mainly due to a less favorable underwriting result, compared to the first quarter 2014, and restructuring charges. However, our operating investment income (net) went up by € 51 mn to € 799 mn.
Life/Health operating profit increased by € 224 mn – or 25.5% – to € 1,104 mn. This was largely driven by higher net harvesting and favorable fair value effects in Germany, a higher investment margin due to an increased asset base in the United States, and also supported by favorable foreign currency translation effects.
Asset Management operating profit decreased by € 91 mn – or 14.0% – to € 555 mn. Excluding the positive foreign currency translation effects of € 82 mn, operating profit dropped by 26.7% on an internal basis1. Adjusted for foreign currency translation effects, lower net fee and commission income, resulting from lower average thirdparty assets under management and lower margins, could not be offset by higher performance fees. PIMCO's Special Performance Award also had an impact on operating profit.
Our operating result in Corporate and Other improved by € 121 mn to a loss of € 101 mn. This was mainly due to the adapted cost allocation scheme for the pension provisions between the German subsidiaries and Allianz SE, which led to higher other income in our reportable segment Holding&Treasury.
Our non-operating result improved by € 56 mn to a loss of € 61 mn, mainly driven by higher non-operating realized gains and losses (net). This was partially offset by lower non-operating income from financial assets and liabilities carried at fair value through income (net) and the absence of a positive one-off effect from a pension revaluation of € 117 mn reported in the first quarter of 2014.
Non-operating income from financial assets and liabilities carried at fair value through income (net) decreased by € 55 mn to a loss of € 124 mn, mainly due to unfavorable impacts from hedging-related activities.
Non-operating realized gains and losses (net) increased from € 126 mn to € 318 mn as a result of higher realizations on debt securities and equities.
Non-operating impairments of investments (net) improved by € 46 mn to a loss of € 20 mn, mainly due to lower impairments on debt securities.
Income taxes decreased by € 9 MN to € 858 MN and the effective tax rate declined to 30.7% (2014: 33.2%). This was mostly due to variations in the regional development of the Group's results, as well as to lower tax expenses relating to previous years.
Net income increased by € 197 mn to € 1,937 mn, driven primarily by the higher operating result. Net income attributable to shareholders and non-controlling interests amounted to € 1,822 mn (1Q 2014: € 1,640 mn) and € 115 mn(1Q 2014: € 100 mn), respectively. The largest non-controlling interests in net income related to Euler Hermes and PIMCO.
Basic earnings per share increased from € 3.62 to € 4.01; diluted earnings per share increased from € 3.55 to € 4.00. For further information on earnings per share, please refer to note 39 to the condensed consolidated interim financial statements.
1 Operating profit adjusted for foreign currency translation and (de-)consolidation effects.
Total revenues and reconciliation of operating profit (Loss) to net income (loss)
| € mn three months ended 31 March |
2015 | 2014 |
|---|---|---|
| Total revenues1 | 37,769 | 33,963 |
| Premiums earned (net) | 18,272 | 16,686 |
| Operating investment result | ||
| Interest and similar income | 5,404 | 5,139 |
| Operating income from financial assets and liabilities carried at fair value through income (net) |
683 | (250) |
| Operating realized gains/losses (net) | 2,519 | 780 |
| Interest expenses, excluding interest expenses from external debt |
(103) | (98) |
| Operating impairments of investments (net) | (89) | (296) |
| Investment expenses | (238) | (199) |
| Subtotal | 8,176 | 5,077 |
| Fee and commission income | 2,644 | 2,408 |
| Other income | 77 | 78 |
| Claims and insurance benefits incurred (net) | (12,804) | (11,809) |
| Change in reserves for insurance and investment contracts (net)2 |
(6,139) | (3,440) |
| Loan loss provisions | (8) | (9) |
| Acquisition and administrative expenses (net), excluding acquisition-related expenses and one-off effects from pension revaluation |
(6,303) | (5,452) |
| Fee and commission expenses | (942) | (782) |
| Operating amortization of intangible assets | (5) | (5) |
| Restructuring charges | (90) | 1 |
| Other expenses | (28) | (30) |
| Reclassification of tax benefits | 5 | – |
| Operating profit | 2,855 | 2,723 |
| Non-operating investment result | ||
| Non-operating income from financial assets and liabilities carried at fair value through income (net) |
(124) | (70) |
| Non-operating realized gains/losses (net) | 318 | 126 |
| Non-operating impairments of investments (net) | (20) | (66) |
| Subtotal | 174 | (9) |
| Income from fully consolidated private equity investments (net) |
2 | (5) |
| Interest expenses from external debt | (212) | (205) |
| Acquisition-related expenses | 7 | 5 |
| One-off effects from pension revaluation | ||
| Non-operating amortization of intangible assets | – (28) |
117 (20) |
| Reclassification of tax benefits | (5) | – |
| Non-operating items | (61) | (117) |
| Income (loss) before income taxes | 2,794 | 2,607 |
| Income taxes | (858) | (867) |
| Net income (loss) | 1,937 | 1,740 |
| Net income (loss) attributable to: | ||
| Non-controlling interests | 115 | 100 |
| Shareholders | 1,822 | 1,640 |
| Basic earnings per share in € | 4.01 | 3.62 |
| Diluted earnings per share in € | 4.00 | 3.55 |
1 Total revenues comprise statutory gross premiums written in Property-Casualty and in Life/Health, operating revenues in Asset Management and total revenues in Corporate and Other (Banking). 2 Includes expenses for premium refunds (net) in Property-Casualty of € (109) MN (2014: € (59) MN).
Risk management is an integral part of our business and supports our value-based management. For further information please refer to the Risk and Opportunity Report in our Annual Report 2014. The Allianz Group's management feels comfortable with our overall risk profile and has confidence in the effectiveness of our risk management framework to meet the challenges of a rapidly changing environment as well as day-to-day business needs. The risk profile described in the latest Risk and Opportunity Report remains largely unchanged. We consider the current state of the economy, combined with the persisting low interest rate environment in the Eurozone, as an increasingly challenging risk to our investment targets. Ongoing geopolitical uncertainties also represent risks which we are monitoring closely. In addition, Allianz continues to be exposed to regulatory developments – especially the European solvency directive (Solvency II) and the designation of Allianz as a global systemically important insurer.
Many countries within the Eurozone currently face weak economic growth and low inflation rates. The economic malaise is being addressed by the ECB through its expansive monetary policy. As a result, financial markets are characterized by historically low interest rates and risk premia, prompting investors to look for higher yielding – and potentially higher risk – investments. In addition to sustained low interest rates, the weakening of the Eurozone's growth momentum, the challenges of implementing long-term structural reforms in key Eurozone countries, and uncertainty about the future path of monetary policy may lead to higher market volatility accompanied by a flight to quality and a scenario with falling equity and bond prices due to rising spread levels along with even lower interest rates.
Continuing geopolitical risks, including the conflicts in the Middle East and between Russia and Ukraine – and the resulting international sanctions against Russia – are manageable for the Allianz Group because our direct exposure to these regions remains relatively small in the context of our overall portfolio. Nevertheless, we are monitoring these developments since a significant deterioration may lead to spillover effects on global financial markets, triggering indirect effects which may have a negative impact on our business and risk profile. Over the past years Allianz Group and its operating entities have developed operational contingency plans for various crisis scenarios and continue to conduct scenario analyses on a regular basis to bolster our financial and operational resilience to strong shock scenarios. In addition, we continue to optimize our product design and pricing in the Life/Health business segment with respect to guarantees and surrender conditions. Continuous monitoring as well as prudent risk positions and contingency planning remain priorities for our management.
5 Executive Summary
30 Balance Sheet Review 37 Reconciliations
Regulatory developments
In March 2014, the European Parliament approved the Solvency II "Omnibus II" directive, allowing the new risk-based solvency capital framework for the E.U. to proceed with a planned introduction date of January 2016. Although the European Commission's draft for the delegated regulation of Solvency II was approved and published in January 2015, the interpretation of some of the important final requirements remains unclear. This situation creates some uncertainty with respect to Allianz's ultimate Solvency II capital requirements, especially under the application of our internal model in case the final rules deviate from our current understanding of them – for example the application of third-country equivalence for the United States.
In addition to Solvency II uncertainty, the future capital requirements applicable to Global Systemically Important Insurers (socalled G-SIIs) are also unclear, contributing to uncertainty in terms of the ultimate capital requirements for Allianz. Finally, the potential for a multiplicity of different regulatory regimes, capital standards and reporting requirements will increase operational complexity and costs.
In any case, due to the market value balance sheet approach, the Solvency II regime will lead to higher volatility in solvency ratios, compared to Solvency I.
For information on events after the balance sheet date, please refer to note 41 to the condensed consolidated interim financial statements.
For information on recent organizational changes, please refer to note 4 to the condensed consolidated interim financial statements.
The Allianz Group's strategy is described in the Strategy and Steering chapter in our Annual Report 2014. 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 sales channels, please refer to the Business Operations and Markets chapter in our Annual Report 2014. Information on our brand can also be found in the Progress in Sustainable Development chapter in our Annual Report 2014.
First quarter 2015
| € mn three months ended 31 March |
2015 | 2014 |
|---|---|---|
| Gross premiums written | 17,339 | 15,217 |
| Operating profit | 1,285 | 1,489 |
| Net income | 922 | 645 |
| Loss ratio in % | 66.4 | 64.6 |
| Expense ratio in % | 28.2 | 28.0 |
| Combined ratio in % | 94.6 | 92.6 |
On a nominal basis, we recorded gross premiums written of € 17,339 MN, an increase of € 2,122 MN or 13.9% compared to the first quarter of 2014. Foreign currency translation effects were positive and amounted to € 715 MN, largely due to favorable effects from the U.S. Dollar, the Swiss Franc, the British Pound and the Australian Dollar against the Euro.2 Consolidation/deconsolidation effects were positive at € 853 MN, mainly because of the transfer of the French International Health business to the reportable segment Allianz Worldwide Partners3, the acquisition of a part of the insurance business of UnipolSai, and the takeover of the Property-Casualty insurance business of the Territory Insurance Office in Australia.
1 We comment on the development of our gross premiums written on an internal basis; meaning adjusted for foreign currency translation and (de-)consolidation effects in order to provide more comparable information.
3 In the fourth quarter of 2014, our French International Health business was transferred from France (Life/ Health) to the reportable segment Allianz Worldwide Partners effective 1 January 2014.
On an internal basis, our gross premiums written were up 3.5% driven by favorable volume effects of 2.8% and price effects of 0.7%. We registered strong growth at AGCS, Allianz Worldwide Partners, in Germany and Latin America.
Analyzing internal premium growth in terms of price and volume, we use four clusters based on 1Q 2015 internal growth over 1Q 2014:
Overall growth – both price and volume effects are positive.
Overall growth – either price or volume effects are positive.
Overall decline – either price or volume effects are negative.
Overall decline – both price and volume effects are negative.
2 Based on the average exchange rates in 2015 compared to 2014.
5 Executive Summary
30 Balance Sheet Review 37 Reconciliations
In Ireland, gross premiums were at € 138 MN. The internal growth of 15.5% was largely the result of positive volume effects in our motor business.
In Australia, gross premiums were up 9.2% on an internal basis and amounted to € 686 MN. Volume gains in our domestic motor and home business supported by positive price effects in the compulsory third party (CTP) insurance and workers compensation business drove this development.
At Allianz Worldwide Partners, gross premiums rose to € 1,601 MN, a growth of 8.3 % on an internal basis. This was driven by volume growth in our travel business in the United States, France and Australia.
In Spain, gross premiums increased 6.7% on an internal basis and stood at € 655 MN. This was due to positive price and volume effects across all our lines of business.
In the United Kingdom, gross premiums amounted to € 747 MN. The internal growth of 5.1% was driven by positive price effects across almost all our lines of business and supported by higher volumes in the pet insurance and our retail motor business.
In Germany, gross premiums were at € 4,219 MN – a rise of 2.6% on an internal basis due to favorable price and volume effects in our motor and commercial non-motor business.
In Latin America, we recorded gross premiums of € 517 MN – an increase of 26.6% on an internal basis. This strong growth was mainly driven by volume effects in our motor business in Argentina and Brazil.
At AGCS1, gross premiums totaled € 2,382 MN. The internal growth of 5.5% was mainly due to favorable volume effects in our risk transfer business as well as in our aviation and liability lines of business.
In Asia-Pacific, we recorded gross premiums of € 211 MN. The increase of 2.8% on an internal basis was largely driven by volume effects in Indonesia and our motor business in Malaysia.
In Credit Insurance, gross premiums grew by 1.8% to € 652 MN on an internal basis. This result was mainly generated by positive volume effects in our growth markets in the Americas, Asia and the Middle East.
In France, gross premiums were at € 1,530 MN – up 1.0 % on an internal basis due to positive price effects in our personal and commercial lines.
In Italy, gross premiums were down 0.3 % on an internal basis to € 1,174 MN. This was mainly driven by our non-motor business which was partly compensated by our motor business due to higher volume effects.
In Central and Eastern Europe, gross premiums decreased 14.5% on an internal basis and were at € 569 MN. Negative volume effects in Russia following the downscaling of our motor and other retail business mainly drove this development.
In Switzerland, gross premiums amounted to € 1,069 MN – a decrease of 0.7 % on an internal basis due to a shift towards more flexible renewal dates in our motor business.
Operating Profit
| 2015 | 2014 |
|---|---|
| 555 | 704 |
| 799 | 748 |
| (69) | 38 |
| 1,285 | 1,489 |
1 Consists of fee and commission income/expenses, other income/expenses and restructuring charges.
Operating profit fell by € 205 MN to € 1,285 MN. This was mainly driven by a lower underwriting result and restructuring charges for the Fireman's Fund reorganization.
Affected by significantly higher losses from natural catastrophes as well as higher attritional losses, which were partly offset by a higher run-off result, our underwriting result dropped by € 149 MN to € 555 MN and our combined ratio worsened by 2.0 percentage points to 94.6%.
| Underwriting result | |
|---|---|
| --------------------- | -- |
| 2015 | 2014 |
|---|---|
| 11,519 | 10,410 |
| (8,024) | (6,980) |
| 373 | 252 |
| (7,651) | (6,727) |
| (3,249) | (2,912) |
| (66) | |
| 555 | 704 |
| (64) |
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 29 to the condensed consolidated interim financial statements.
1 Effective 1 January 2015, Fireman's Fund Insurance Company was integrated into AGCS Group. Previous period figures were not adjusted. 1Q 2015 numbers still include the contribution from personal lines. The sale of the renewal rights for personal lines is effective 1 April 2015. The results from the run-off portfolio included in San Francisco Reinsurance Company Corp., a former subsidiary of Fireman's Fund Insurance Company, have been reported within Reinsurance PC since 1 January 2015.
Our accident year loss ratio stood at 69.7% – a 2.6 percentage point deterioration compared to the previous year's figure. This included a sharp increase in losses from natural catastrophes from € 54 MN to € 222 MN resulting in an increased impact on our combined ratio from 0.5% to 1.9%.
Excluding losses from natural catastrophes, our accident year loss ratio was 67.7%, up 1.2 percentage points compared to the previous year. This increase was mainly driven by an attritional loss ratio deterioration in our reinsurance operations and our Italian portfolio that could not be compensated by favorable developments in Central and Eastern Europe, Germany and France.
The following operations contributed positively to the development of our accident year loss ratio:
Central and Eastern Europe: 0.2 percentage points. This was largely because of motor downscaling in Russia and a favorable loss development in the Czech Republic.
The following operations contributed negatively to the development of our accident year loss ratio:
Germany: 1.3 percentage points. This was due to a significantly higher impact from natural catastrophes driven by the storms Elon/ Felix in January and Niklas/Mike at the end of March. On the other hand, the attritional loss ratio improved, supported by pricing strength and lower overall attritional claims frequency.
Reinsurance: 0.6 percentage points. The deterioration was driven both by higher losses from natural catastrophes as well as a higher attritional loss ratio following a shift in business mix towards a higher share of volume from proportional treaties.
Italy: 0.3 percentage points. The negative impact was mainly from our motor business where average premiums continued to decrease and attritional severity worsened. Furthermore, the share of direct business increased further.
Australia: 0.3 percentage points. Australia's accident year loss ratio was affected by claims from cyclone Marcia in February.
Latin America: 0.2 percentage points. This was mainly driven by Brazil, but a comprehensive turn-around program is underway.
Our run-off result increased by € 121 MN to € 373 MN – resulting in a run-off ratio of 3.2% – a 0.8 percentage point higher contribution than in the first quarter of 2014, following reserve releases across most of the portfolio.
Total expenses amounted to € 3,249 MN in the first quarter of 2015, compared to € 2,912 MN in the same period of the previous year. Our expense ratio rose slightly to 28.2% with an improved administrative expense ratio more than offset by higher acquisition expenses.
| € mn three months ended 31 March |
2015 | 2014 |
|---|---|---|
| Interest and similar income (net of interest expenses) |
843 | 840 |
| Operating income from financial assets and liabilities carried at fair value through income (net) |
62 | 14 |
| Operating realized gains/losses (net) | 80 | 26 |
| Operating impairments of investments (net) | (2) | (5) |
| Investment expenses | (75) | (69) |
| Expenses for premium refunds (net)2 | (109) | (59) |
| Operating investment income (net) | 799 | 748 |
1 The operating investment income (net) for 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) as shown in note 29 to the condensed consolidated interim financial statements.
2 Refers to policyholder participation, mainly from APR (accident insurance with premium refunds) business, and consists of the investment-related part of "change in reserves for insurance and investment contracts (net)". For further information, please refer to note 29 to the condensed consolidated interim financial statements.
Operating investment income (net) totaled € 799 MN – an increase of € 51 MN compared to the first quarter of the previous year.
Interest and similar income (net of interest expenses) was stable at € 843 MN. Lower income on debt securities was almost offset by income on equities. The average asset base1 went up by 9.8 % to € 112.4 BN in the first quarter of 2015 from € 102.3 Bn in the first quarter of 2014.
Operating income from financial assets and liabilities carried at fair value through income (net) amounted € 62 MN – up € 48 MN. This was driven by positive foreign currency translation effects net of hedging.
Operating realized gains and losses (net) increased by € 54 MN to € 80 MN compared to the first quarter of 2014. We recorded higher realizations mainly on debt securities in Germany.
Expenses for premium refunds (net) increased by € 50 MN to € 109 MN driven by higher policyholder participation on higher investment results in Germany.
1 Including French health business, excluding fair value option and trading.
30 Balance Sheet Review
37 Reconciliations
| € mn three months ended 31 March |
2015 | 2014 |
|---|---|---|
| Fee and commission income | 357 | 307 |
| Other income | 15 | 29 |
| Fee and commission expenses | (344) | (291) |
| Other expenses | (6) | (6) |
| Restructuring charges | (90) | (1) |
| Other result | (69) | 38 |
We incurred restructuring charges of € 90 MN, thereof € 89 MN in conjunction with the reorganization of Fireman's Fund in the United States.
Net income grew by € 277 MN to € 922 MN compared to the first quarter of 2014. The decreased operating profit was offset by a lower one-off expense from pension revaluation and higher non-operating realized gains in the first quarter of the current year.
| € mn | ||
|---|---|---|
| three months ended 31 March | 2015 | 2014 |
| Gross premiums written1 | 17,339 | 15,217 |
| Ceded premiums written | (1,500) | (1,227) |
| Change in unearned premiums | (4,320) | (3,580) |
| Premiums earned (net) | 11,519 | 10,410 |
| Interest and similar income | 865 | 853 |
| Operating income from financial assets and liabilities carried at fair value through income (net) |
62 | 14 |
| Operating realized gains/losses (net) | 80 | 26 |
| Fee and commission income | 357 | 307 |
| Other income | 15 | 29 |
| Operating revenues | 12,898 | 11,638 |
| Claims and insurance benefits incurred (net) | (7,651) | (6,727) |
| Change in reserves for insurance and investment contracts (net) |
(173) | (125) |
| Interest expenses | (22) | (13) |
| Operating impairments of investments (net) | (2) | (5) |
| Investment expenses | (75) | (69) |
| Acquisition and administrative expenses (net), excluding one-off effects from pension revaluation |
(3,249) | (2,912) |
| Fee and commission expenses | (344) | (291) |
| Restructuring charges | (90) | (1) |
| Other expenses | (6) | (6) |
| Operating expenses | (11,613) | (10,149) |
| Operating profit | 1,285 | 1,489 |
| Non-operating items | – | (576) |
| Income before income taxes | 1,284 | 913 |
| Income taxes | (362) | (268) |
| Net income | 922 | 645 |
| Loss ratio2 in % | 66.4 | 64.6 |
| Expense ratio3 in % | 28.2 | 28.0 |
| Combined ratio4 in % | 94.6 | 92.6 |
1 For the Property-Casualty business segment, total revenues are measured based upon gross premiums written.
2 Represents claims and insurance benefits incurred (net) divided by premiums earned (net).
3 Represents acquisition and administrative expenses (net), excluding one-off effects from pension revaluation, divided by premiums earned (net).
4 Represents the total of acquisition and administrative expenses (net), excluding one-off effects from pension revaluation, and claims and insurance benefits incurred (net) divided by premiums earned (net).
| Gross premiums written Operating profit (loss) internal1 three months ended 31 March 2015 2014 2015 2014 2015 2014 2015 Germany 4,219 4,090 4,196 4,090 1,909 1,871 218 Switzerland 1,069 944 937 944 422 369 69 Austria 352 350 352 350 205 209 22 German Speaking Countries 5,640 5,384 5,485 5,384 2,535 2,448 309 Italy2 1,174 961 959 961 1,176 957 248 France 1,530 1,442 1,523 1,508 993 975 116 Benelux 405 399 405 399 266 267 16 Turkey 317 290 290 290 239 214 25 Greece 28 31 28 31 20 22 2 Africa 45 41 45 41 17 16 5 Western&Southern Europe3 3,499 3,164 3,249 3,230 2,711 2,453 415 Latin America 517 399 505 399 414 410 6 Spain 655 614 655 614 462 440 56 Portugal 126 116 126 116 69 66 5 Iberia&Latin America 1,298 1,129 1,286 1,129 946 916 67 Allianz Global Corporate&Specialty4 2,382 1,588 2,109 2,000 1,326 721 45 AGCS excl. Fireman's Fund 1,920 1,588 1,729 1,584 848 721 157 Fireman's Fund 462 – 380 415 478 – (112) Reinsurance PC5 2,104 1,568 2,078 1,568 988 748 122 Reinsurance PC excl. San Francisco RE 2,104 1,568 2,078 1,568 988 748 114 San Francisco RE – – – – – – 8 United Kingdom 747 638 671 638 561 560 40 Credit Insurance 652 612 623 612 403 378 117 Ireland 138 120 138 120 102 90 44 United States – 415 – – – 405 – Global Insurance Lines&Anglo Markets6 6,023 4,942 5,620 4,938 3,380 2,902 366 Russia 81 231 119 231 68 150 (3) Poland 109 113 109 113 83 86 1 Hungary 86 87 86 87 53 53 4 Slovakia 106 107 106 107 65 64 16 Czech Republic 80 74 81 74 62 57 8 Romania 55 53 55 53 39 36 3 Bulgaria 17 16 17 16 18 16 4 Croatia 34 28 34 28 18 19 2 Ukraine 2 5 3 5 1 2 – Central and Eastern Europe7 569 713 610 713 408 483 33 Asia-Pacific 211 183 188 183 128 100 26 Australia8 686 574 627 574 585 520 32 Middle East and North Africa 25 20 21 20 16 12 2 Growth Markets 1,492 1,490 1,446 1,490 1,137 1,115 93 Allianz Worldwide Partners9 1,601 785 1,485 1,370 809 575 34 Consolidation10 (2,215) (1,679) (2,215) (1,741) – – – |
€ mn | ||||||
|---|---|---|---|---|---|---|---|
| Premiums earned (net) | |||||||
| 2014 | |||||||
| 330 | |||||||
| 61 | |||||||
| 16 | |||||||
| 407 | |||||||
| 213 | |||||||
| 128 | |||||||
| 22 | |||||||
| 23 | |||||||
| 7 | |||||||
| 4 | |||||||
| 399 | |||||||
| 41 | |||||||
| 67 | |||||||
| 5 | |||||||
| 113 | |||||||
| 143 | |||||||
| 143 | |||||||
| – | |||||||
| 162 | |||||||
| 162 | |||||||
| – | |||||||
| 30 | |||||||
| 112 | |||||||
| 5 | |||||||
| 24 | |||||||
| 474 | |||||||
| (51) | |||||||
| 4 | |||||||
| 5 | |||||||
| 20 | |||||||
| 15 | |||||||
| 2 | |||||||
| 5 | |||||||
| 3 | |||||||
| (1) | |||||||
| – | |||||||
| 23 | |||||||
| 51 | |||||||
| 1 | |||||||
| 75 | |||||||
| 21 | |||||||
| – | |||||||
| Total 17,339 15,217 16,356 15,802 11,519 10,410 1,285 |
1,489 |
1 This reflects gross premiums written on an internal basis, adjusted for foreign currency translation and (de-)consolidation effects.
sale of the renewal rights for personal lines is effective 1 April 2015. The results from the run-off portfolio included in San Francisco Reinsurance Company Corp., a former subsidiary of Fireman's Fund Insurance Company, have been reported within Reinsurance PC since 1 January 2015.
2 Effective 1 July 2014, the Allianz Group acquired parts of the insurance business of UnipolSai Assicurazioni S.p.A., Bologna. 3 Contains € 2 MN and € 2 MN operating profit for 2015 and 2014, respectively, from a management holding
located in Luxembourg.
4 Effective 1 January 2015, Fireman's Fund Insurance Company was integrated into AGCS Group. Previous period figures were not adjusted. 1Q 2015 numbers still include the contribution from personal lines. The 5 Effective 1 January 2015, Fireman's Fund Insurance Company was integrated into AGCS Group. The results from the run-off portfolio included in San Francisco Reinsurance Company Corp., a former subsidiary of Fireman's Fund Insurance Company, have been reported within Reinsurance PC since 1 January 2015.
23 Asset Management
30 Balance Sheet Review 37 Reconciliations
% Combined ratio Loss ratio Expense ratio three months ended 31 March 2015 2014 2015 2014 2015 2014 Germany 98.0 90.6 72.5 64.6 25.6 26.0 Switzerland 89.3 89.1 67.2 66.9 22.0 22.2 Austria 94.3 96.1 67.2 68.7 27.1 27.4 German Speaking Countries 96.3 90.8 71.2 65.3 25.1 25.5 Italy2 83.5 83.7 56.8 57.6 26.6 26.2 France 94.7 93.6 66.6 67.1 28.1 26.6 Benelux 97.3 98.0 68.2 68.3 29.1 29.7 Turkey 101.0 96.0 76.9 72.9 24.2 23.1 Greece 92.3 70.8 56.3 39.2 36.0 31.5 Africa 80.1 77.3 56.6 54.0 23.6 23.2 Western&Southern Europe3 90.6 90.1 63.3 63.7 27.3 26.5 Latin America 106.0 101.4 72.4 70.1 33.5 31.3 Spain 91.6 89.1 71.0 68.6 20.6 20.5 Portugal 96.0 96.2 72.9 74.2 23.0 22.1 Iberia&Latin America 98.2 95.1 71.8 69.7 26.4 25.5 Allianz Global Corporate&Specialty4 99.6 91.9 67.2 64.4 32.4 27.5 AGCS excl. Fireman's Fund 92.4 91.9 63.5 64.4 28.9 27.5 Fireman's Fund 112.5 – 73.9 – 38.7 – Reinsurance PC5 91.5 81.8 61.5 53.2 30.1 28.6 Reinsurance PC excl. San Francisco RE 91.4 81.8 61.5 53.2 30.0 28.6 San Francisco RE – – – – – – United Kingdom 97.7 99.7 66.8 68.2 30.9 31.5 Credit Insurance 78.4 77.8 50.8 49.1 27.6 28.7 Ireland 64.6 100.9 34.6 67.1 30.1 33.8 United States – 107.2 – 70.8 – 36.4
| Russia | 110.8 | 139.6 | 75.3 | 91.4 | 35.5 | 48.2 |
|---|---|---|---|---|---|---|
| Poland | 103.3 | 99.6 | 69.7 | 65.5 | 33.7 | 34.1 |
| Hungary | 103.2 | 105.4 | 60.1 | 62.1 | 43.1 | 43.3 |
| Slovakia | 82.9 | 75.9 | 53.1 | 45.2 | 29.8 | 30.6 |
| Czech Republic | 91.4 | 76.1 | 64.4 | 48.5 | 27.1 | 27.6 |
| Romania | 98.0 | 102.2 | 68.3 | 71.6 | 29.7 | 30.5 |
| Bulgaria | 87.1 | 71.9 | 56.6 | 48.1 | 30.5 | 23.8 |
| Croatia | 97.8 | 91.0 | 59.4 | 54.5 | 38.4 | 36.5 |
| Ukraine | 106.7 | 128.3 | 56.0 | 63.1 | 50.8 | 65.1 |
| Central and Eastern Europe7 | 98.3 | 106.1 | 64.7 | 68.0 | 33.6 | 38.1 |
| Asia-Pacific | 92.1 | 84.2 | 62.2 | 54.5 | 29.9 | 29.8 |
| Australia8 | 103.0 | 99.7 | 77.0 | 75.4 | 26.1 | 24.3 |
| Middle East and North Africa | 93.2 | 98.7 | 58.7 | 61.3 | 34.5 | 37.4 |
| Growth Markets | 100.0 | 101.1 | 70.6 | 70.1 | 29.3 | 30.9 |
| Allianz Worldwide Partners9 | 97.3 | 96.7 | 66.1 | 64.2 | 31.2 | 32.5 |
| Consolidation10 | – | – | – | – | – | – |
| Total | 94.6 | 92.6 | 66.4 | 64.6 | 28.2 | 28.0 |
Global Insurance Lines&Anglo Markets6 93.4 91.5 62.5 61.2 30.9 30.2
6 Contains € 2 MN and € 1 MN operating loss for 2015 and 2014, respectively, from AGF UK.
7 Contains income and expense items from a management holding and consolidations between countries in this region.
addition to income and expenses from a management holding. At year-end 2014, our French International Health business was reclassified from Life/Health to the Property-Casualty business segment. The premium accounting method changed for this portfolio which is adjusted in the internal growth.
8 Effective 1 January 2015, the Allianz Group acquired the Property-Casualty insurance business of the Territory Insurance Office (TIO Business), Darwin.
9 The reportable segment Allianz Worldwide Partners includes the Global Assistance business as well as the business of Allianz Worldwide Care and the reinsurance business of Allianz Global Automotive in
10 Represents elimination of transactions between Allianz Group companies in different geographic regions.
First quarter 2015
Margin on reserves (bps)1,
Allianz offers a broad range of life, health, savings and investment-oriented products, including individual and group life insurance contracts. Via our distribution channels – mainly tied agents, brokers and bank partnerships – we offer life and health products to both retail and corporate clients. As one of the worldwide market leaders in life business, we serve customers in more than 45 countries.
Net income1 739 629
2 77 73
In the first quarter of 2015, our statutory premiums amounted to € 18,822 mn, an increase of € 1,659 mn. On an internal basis4, premiums increased by 5.3% or € 905 mn. This excludes favorable foreign currency translation effects of € 899 mn and adverse consolidation/ deconsolidation effects of € 145 mn from the transfer – effective 1 January 2014 – of our French International Health business to the reportable segment Allianz Worldwide Partners in the business segment Property-Casualty in the fourth quarter of 2014.
Overall, we recorded premium growth primarily with unit-linked products – largely driven by our single premium business. In absolute terms, premium growth was particularly strong in Italy and Taiwan, which more than offset the decreases in France, Benelux and Germany. In the United States, favorable foreign currency translation effects more than compensated for a decrease.
In our German life business, premiums decreased 3.8 % to € 4,788 mn due to a lower single premium business with capitalization products distributed via our agents and bancassurance channel. This was partly offset by higher premiums in our traditional life business and business of products with alternative guarantees. Statutory premiums in our German health business grew 0.7% to € 814 mn. This was mainly due to premium rate increases in full health care coverage in January 2015 and the higher number of policies in our supplementary coverage insurance.
Premiums in the United States amounted to € 2,699 mn, representing a decrease of 13.3%. This was driven by lower fixed-indexed annuity sales due to the impact of pricing changes in response to the decreasing interest rate environment.
Premiums in Italy increased 56.4% to € 3,706 mn. This was particularly due to the strong growth of our single premium unit-linked business across all distribution channels. Along with a decrease in
1 In the fourth quarter of 2014, we transferred our French International Health business to the reportable segment Allianz Worldwide Partners effective 1 January 2014.
3 Statutory premiums are gross premiums written from sales of life and health insurance policies as well as gross receipts from sales of unit-linked and other investment-oriented products, in accordance with the statutory accounting practices applicable in the insurer's home jurisdiction.
2 Represents annualized operating profit divided by the average of the current quarter-end and previous year-end net reserves, where net reserves equal reserves for loss and loss adjustment expenses, reserves for insurance and investment contracts and financial liabilities for unit-linked contracts less reinsurance assets.
4 In the following section, we comment on the development of our statutory gross premiums written on an internal basis, i.e. adjusted for foreign currency translation and (de-)consolidation effects in order to provide more comparable information.
23 Asset Management
30 Balance Sheet Review 37 Reconciliations
traditional life business, the share of unit-linked premiums of total statutory premiums increased significantly.
Premiums in France decreased 8.1 % to € 2,140 mn. This was mainly because of less business resulting from cooperation between Allianz companies in France and Luxembourg, compared to the strong first quarter of 2014. The continued strong growth in our protection and health business partially offset this decrease.
In Asia-Pacific, premiums grew 8.7% to € 1,703 mn. This was due to favorable developments in all markets with the exception of South Korea. Increased sales of single premium unit-linked products distributed via the bancassurance channel in Taiwan, as well as higher sales of group saving products in Indonesia, more than compensated for the reduced traditional life business distributed via the bancassurance channel in South Korea.
In Switzerland, premiums totaled € 1,107 mn. The increase of 2.1% was primarily driven by our regular premium business in group life. Stable individual life business backed this development.
In Benelux, we recorded premiums of € 787 mn, a decrease of 27.4%. This was mainly because of a lower single premium business – we actively restricted sales in Luxembourg to mitigate dilution effects from the low interest rate environment – resulting from the cooperation between Allianz companies in France and Luxembourg, compared to the strong first quarter of 2014. In Belgium, premiums decreased as the first quarter of 2014 benefited from a commercial campaign.
Premiums in Spain increased 14.3 % to € 403 mn. We recorded strong growth in regular premiums in all business lines – mainly driven by traditional life products distributed via the bancassurance channel, which benefited from sales campaigns. This favorable development was also supported by risk and unit-linked products.
Premiums in Central and Eastern Europe remained relatively stable, increasing 0.2% to € 232 mn. Growth in unit-linked and group pension business in Bulgaria compensated for a premium decrease of our unit-linked business in Hungary.
Premiums earned (net) increased by € 476 mn to € 6,753 mn. This was mainly due to the increased traditional life business in Germany. Favorable foreign currency translation effects from most major currencies (U.S. Dollar and Asian currencies) contributed to this growth.
Present value of new business premiums (PVNBP) increased by € 3,874 mn to € 18,974 mn. This was largely driven by an increase in our single premium unit-linked business in Italy and a higher proportion of regular premium over single premium products in Germany. Due to favorable foreign currency translation effects, our U.S. business contributed to this improvement.
The PVNBP share of guaranteed savings&annuities decreased in favor of the unit-linked without guarantee line of business. In absolute terms, we recorded PVNBP growth across all business lines with particularly strong sales growth of unit-linked products in Italy.
three months ended 31 March 2015 [31 March 2014] in %
The objective 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.
| € mn three months ended 31 March |
2015 | 2014 |
|---|---|---|
| Loadings and fees | 1,441 | 1,272 |
| Investment margin | 1,002 | 670 |
| Expenses | (1,659) | (1,522) |
| Technical margin | 301 | 270 |
| Impact of change in DAC | 19 | 189 |
| Operating profit | 1,104 | 880 |
Our operating profit increased by € 224 mn to € 1,104 mn. This was driven by a significantly higher investment margin, particularly in Germany, and favorable foreign currency translation effects in the United States and Asia-Pacific. While higher performance fees in Italy in the first quarter of 2015 contributed to an increase in our loadings and fees, the positive impact of changes in DAC decreased due to base effects from DAC amortization in the first quarter of 2014 in the United States.
Loadings and fees includes premium and reserve based fees, unitlinked management fees and policyholder participation in expenses.
| € mn three months ended 31 March |
2015 | 2014 |
|---|---|---|
| Loadings from premiums | 951 | 858 |
| Loadings from reserves | 284 | 266 |
| Unit-linked management fees | 206 | 148 |
| Loadings and fees | 1,441 | 1,272 |
| Loadings from premiums as % of statutory premiums |
5.1 | 5.0 |
| Loadings from reserves as % of average reserves1, 2 |
0.1 | 0.1 |
| Unit-linked management fees as % of average unit-linked reserves2, 3 |
0.2 | 0.1 |
1 Aggregate policy reserves and unit-linked reserves.
2 Yields are pro-rata.
3 Calculation based on only unit-linked management fees, excluding Asset Management fees, on unitlinked reserves.
Our loadings and fees increased by € 169 mn to € 1,441 mn. This was largely due to increased fees earned in Italy, higher sales in Asia-Pacific, and business mix changes in the United States. Favorable foreign currency translation effects accompanied the increase.
The increase in loadings from premiums by € 93 mn to € 951 mn was largely due to lower volumes of products with sales inducements in the United States, increased sales in regular premiums business in Germany Life, and higher sales in Asia-Pacific, along with favorable foreign currency translation effects. Loadings from premiums as a percentage of statutory premiums slightly increased by 5 basis points due to a higher weight of regular premiums in Germany.
The increase in loadings from reserves by € 18 mn to € 284 mn was mainly driven by higher reserve volume.
The growth in unit-linked management fees by € 58 mn to € 206 mn was largely driven by higher performance fees in Italy. Consequently, unit-linked management fees as a percentage of average unit-linked reserves increased by 3 basis points.
23 Asset Management
30 Balance Sheet Review 37 Reconciliations
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 for German life business).
| € mn | ||
|---|---|---|
| three months ended 31 March | 2015 | 2014 |
| Interest and similar income | 4,426 | 4,159 |
| Operating income from financial assets and liabilities carried at fair value through income (net) |
585 | (268) |
| Operating realized gains/losses (net) | 2,438 | 827 |
| Interest expenses | (27) | (25) |
| Operating impairments of investments (net) | (87) | (291) |
| Investment expenses | (227) | (195) |
| Other1 | 224 | 107 |
| Technical interest | (2,282) | (2,163) |
| Policyholder participation | (4,048) | (1,481) |
| Investment margin | 1,002 | 670 |
| Investment margin2, 3 in basis points |
25 | 19 |
1 Other comprises the delta of out-of-scope entities, 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.
2 Investment margin divided by the average of current quarter-end and previous year-end aggregate policy reserves.
3 Yields are pro-rata.
Our investment margin increased by € 331 mn to € 1,002 mn, largely due to higher net harvesting in Germany and, aside from positive foreign currency translation effects, a higher investment spread margin due to an increased asset base in the United States. Together with favorable fair value effects, these increases drove the improvement of 7 basis points to 25 basis points in the investment margin as a percentage of reserves.
Higher realizations of both equity and debt investments mainly in Germany – in line with market development –, higher interest income from debt investments largely due to favorable foreign currency translation effects, and lower impairments of investments after higher impairments on emerging markets debt bond funds in the first quarter of 2014 contributed to this increase. Furthermore, the net of foreign currency translation effects and financial derivatives to lengthen duration as well as to protect against equity and foreign currency fluctuations contributed favorably.
The policyholder participation of € 4,048 mn also includes policyholder benefits of € 220 mn beyond contractual or regulatory requirements for the German life business.
Expenses include acquisition expenses and commissions (excluding commission clawbacks, which are allocated to the technical margin) as well as administrative and other expenses.
| € mn three months ended 31 March |
2015 | 2014 |
|---|---|---|
| Acquisition expenses and commissions Administrative and other expenses |
(1,249) (410) |
(1,151) (370) |
| Expenses | (1,659) | (1,522) |
| Acquisition expenses and commissions as % of PVNBP 1 |
(6.6) | (7.6) |
| Administrative and other expenses as % of average reserves2, 3 |
(0.1) | (0.1) |
1 PVNBP before non-controlling interests.
2 Aggregate policy reserves and unit-linked reserves.
3 Yields are pro-rata.
Our expenses increased by € 138 mn to € 1,659 mn. This was largely due to adverse foreign currency translation effects from our business in the United States, as well as increases in line with business mix shifts in Germany and sales growth in Italy.
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.
Our technical margin increased by € 31 mn to € 301 mn. Overall, the technical margin remained stable with the exception of an improved risk margin in Switzerland due to lower claims and release of reserves due to a reassessment of the risk profile.
Impact of change in DAC (deferred acquisition costs) includes effects of change in DAC, unearned revenue reserves (URR) and value of business acquired (VOBA) and is the net impact of deferral and amortization of acquisition costs and front-end loadings on operating profit.
| € mn three months ended 31 March |
2015 | 2014 |
|---|---|---|
| Capitalization of DAC | 457 | 446 |
| Amortization, unlocking and true-up of DAC | (438) | (257) |
| Impact of change in DAC1 | 19 | 189 |
1 Impact of change in DAC includes effects of change in DAC, URR and VOBA and is the net impact of deferral and amortization of acquisition costs and front-end loadings on operating profit, and therefore deviates from the financial statements.
Our impact of change in DAC decreased from € 189 mn to € 19 mn. This change was primarily due to favorable DAC amortization in the first quarter of 2014 resulting from lowering interest rates – prior to the change of amortization methods related to our variable annuity business in the United States in 2014 – and higher capitalization of DAC driven by increased business in Italy.
| € mn three months ended 31 March |
2015 | 2014 |
|---|---|---|
| Guaranteed savings&annuities | 757 | 631 |
| Protection&health | 224 | 176 |
| Unit-linked without guarantee | 123 | 73 |
| Operating profit | 1,104 | 880 |
The operating profit increase in the guaranteed savings&annuities line of business was largely driven by higher net harvesting and favorable fair value effects in Germany.
Operating profit in the protection&health line of business increased mainly driven by France, partly due to an improved risk margin.
Operating profit in the unit-linked without guarantee line of business increased primarily due to higher performance fees in Italy.
Our annualized margin on reserves increased from 73 to 77 basis points, driven by the increased investment margin.
Our net income increased by € 110 mn to € 739 mn in the first quarter of 2015. The higher investment margin was the main driver for the increase. We recorded higher non-operating expenses because of a risk capital hedge in the United States. The effective tax rate was 30.6% (1Q 2014: 28.8%).
| € mn | ||
|---|---|---|
| three months ended 31 March | 2015 | 2014 |
| Statutory premiums2 | 18,822 | 17,163 |
| Ceded premiums written | (154) | (162) |
| Change in unearned premiums | (73) | (183) |
| Statutory premiums (net) | 18,595 | 16,818 |
| Deposits from insurance and investment contracts | (11,842) | (10,542) |
| Premiums earned (net) | 6,753 | 6,276 |
| Loadings and fees | 1,441 | 1,272 |
| Loadings from premiums | 951 | 858 |
| Loadings from reserves | 284 | 266 |
| Unit-linked management fees | 206 | 148 |
| Investment margin (net of policyholder participation) |
1,002 | 670 |
| Expenses | (1,659) | (1,522) |
| Acquisition expenses and commissions | (1,249) | (1,151) |
| Administrative and other expenses | (410) | (370) |
| Technical margin | 301 | 270 |
| Operating profit before change in DAC | 1,084 | 690 |
| Impact of change in DAC3 | 19 | 189 |
| Capitalization of DAC | 457 | 446 |
| Amortization, unlocking and true-up of DAC | (438) | (257) |
| Operating profit | 1,104 | 880 |
| Non-operating items | (39) | 4 |
| Income before income taxes | 1,065 | 884 |
| Income taxes | (326) | (255) |
| Net income | 739 | 629 |
| Margin on reserves4 in basis points | 77 | 73 |
1 Profit sources are based on in-scope operating entities with coverage of 97.8 % of statutory premiums. Operating profit from operating entities that are not in-scope is included in investment margin.
2 Statutory premiums are gross premiums written from sales of life and health insurance policies as well as gross receipts from sales of unit-linked and other investment-oriented products, in accordance with the statutory accounting practices applicable in the insurer's home jurisdiction.
3 Impact of change in DAC includes effects of change in DAC, URR and VOBA and is the net impact of deferral and amortization of acquisition costs and front-end loadings on operating profit, and therefore deviates from the financial statements.
4 Represents annualized operating profit divided by the average of the current quarter-end and previous year-end net reserves, where net reserves equal reserves for loss and loss adjustment expenses, reserves for insurance and investment contracts and financial liabilities for unit-linked contracts less reinsurance assets.
€ mn
| Life/Health | Guaranteed savings&annuities |
Protection &health |
Unit-linked without guarantee |
|||||
|---|---|---|---|---|---|---|---|---|
| three months ended 31 March | 2015 | 2014 | 2015 | 2014 | 2015 | 2014 | 2015 | 2014 |
| Loadings from premiums | 951 | 858 | 490 | 446 | 386 | 353 | 75 | 60 |
| Loadings from reserves | 284 | 266 | 243 | 237 | 25 | 19 | 16 | 10 |
| Unit-linked management fees | 206 | 148 | 78 | 62 | – | – | 128 | 85 |
| Loadings and fees | 1,441 | 1,272 | 811 | 744 | 411 | 372 | 219 | 155 |
| Investment margin (net of policyholder participation) | 1,002 | 670 | 915 | 636 | 70 | 26 | 17 | 9 |
| Acquisition expenses and commissions | (1,249) | (1,151) | (797) | (771) | (316) | (293) | (136) | (88) |
| Administrative and other expenses | (410) | (370) | (263) | (248) | (105) | (90) | (42) | (32) |
| Expenses | (1,659) | (1,522) | (1,060) | (1,019) | (422) | (383) | (177) | (119) |
| Technical margin | 301 | 270 | 117 | 110 | 156 | 138 | 28 | 22 |
| Operating profit before change in DAC | 1,084 | 690 | 782 | 471 | 216 | 153 | 86 | 67 |
| Capitalization of DAC | 457 | 446 | 296 | 340 | 100 | 77 | 61 | 29 |
| Amortization, unlocking and true-up of DAC | (438) | (257) | (321) | (180) | (92) | (54) | (25) | (23) |
| Impact of change in DAC2 | 19 | 189 | (25) | 160 | 8 | 23 | 36 | 6 |
| Operating profit | 1,104 | 880 | 757 | 631 | 224 | 176 | 123 | 73 |
1 Profit sources are based on in-scope operating entities with coverage of 97.8 % of statutory premiums. Operating profit from operating entities that are not in-scope is included in investment margin.
2 Impact of change in DAC includes effects of change in DAC, URR and VOBA and is the net impact of deferral and amortization of acquisition costs and front-end loadings on operating profit, and therefore deviates from the financial statements.
| € mn | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Statutory premiums1 | Premiums earned (net) | Operating profit (loss) | Margin on reserves2 (BPS) | |||||||
| internal3 | ||||||||||
| three months ended 31 March | 2015 | 2014 | 2015 | 2014 | 2015 | 2014 | 2015 | 2014 | 2015 | 2014 |
| Germany Life | 4,788 | 4,980 | 4,788 | 4,980 | 3,137 | 2,931 | 423 | 275 | 79 | 59 |
| Germany Health | 814 | 808 | 814 | 808 | 815 | 809 | 53 | 24 | 73 | 37 |
| Switzerland | 1,107 | 951 | 971 | 951 | 239 | 234 | 17 | 21 | 44 | 63 |
| Austria | 118 | 117 | 118 | 117 | 103 | 89 | 22 | 12 | 175 | 111 |
| German Speaking Countries | 6,827 | 6,856 | 6,691 | 6,856 | 4,294 | 4,063 | 516 | 332 | 78 | 58 |
| Italy | 3,706 | 2,370 | 3,706 | 2,370 | 126 | 131 | 83 | 47 | 55 | 38 |
| France4 | 2,140 | 2,472 | 2,140 | 2,327 | 853 | 840 | 135 | 144 | 62 | 74 |
| Benelux | 787 | 1,084 | 787 | 1,084 | 131 | 130 | 38 | 32 | 91 | 84 |
| Greece | 27 | 24 | 27 | 24 | 14 | 14 | (2) | – | (228) | –6 |
| Turkey | 260 | 161 | 237 | 161 | 46 | 31 | 10 | 4 | 141 | 83 |
| Africa | 15 | 16 | 15 | 16 | 6 | 8 | 1 | 1 | 192 | 213 |
| Western&Southern Europe | 6,935 | 6,127 | 6,912 | 5,982 | 1,176 | 1,153 | 265 | 229 | 63 | 63 |
| Latin America | 88 | 71 | 82 | 71 | 27 | 28 | 5 | 1 | 171 | 31 |
| Spain | 403 | 352 | 403 | 352 | 101 | 101 | 46 | 48 | 225 | 276 |
| Portugal | 86 | 52 | 86 | 52 | 20 | 21 | 4 | 3 | 280 | 217 |
| Iberia&Latin America | 577 | 476 | 572 | 476 | 148 | 149 | 55 | 52 | 223 | 247 |
| United States | 2,699 | 2,556 | 2,217 | 2,556 | 281 | 227 | 163 | 169 | 68 | 94 |
| USA | 2,699 | 2,556 | 2,217 | 2,556 | 281 | 227 | 163 | 169 | 68 | 94 |
| Reinsurance LH | 135 | 126 | 133 | 126 | 116 | 82 | 16 | 11 | 365 | 229 |
| Global Insurance Lines&Anglo Markets | 135 | 126 | 133 | 126 | 116 | 82 | 16 | 11 | 365 | 229 |
| South Korea | 445 | 393 | 376 | 393 | 133 | 120 | 2 | 5 | 7 | 20 |
| Taiwan | 663 | 502 | 567 | 502 | 66 | 40 | 5 | 3 | 30 | 24 |
| Indonesia | 182 | 134 | 162 | 134 | 72 | 53 | 18 | 17 | 455 | 578 |
| Malaysia | 114 | 95 | 103 | 95 | 59 | 50 | 7 | 7 | 206 | 236 |
| Japan | – | – | – | – | 2 | 1 | 1 | (1) | 13 | (12) |
| Other | 299 | 216 | 247 | 216 | 219 | 161 | 25 | 20 | 228 | 242 |
| Asia-Pacific | 1,703 | 1,339 | 1,456 | 1,339 | 552 | 426 | 60 | 51 | 86 | 91 |
| Poland | 50 | 48 | 50 | 48 | 20 | 18 | 5 | 3 | 305 | 252 |
| Slovakia | 62 | 65 | 62 | 65 | 50 | 49 | 11 | 8 | 347 | 270 |
| Hungary | 30 | 38 | 30 | 38 | 11 | 11 | 4 | 4 | 417 | 397 |
| Czech Republic | 35 | 33 | 35 | 33 | 17 | 19 | 4 | 4 | 239 | 272 |
| Russia | 8 | 15 | 12 | 15 | 9 | 14 | 4 | – | 696 | –6 |
| Croatia | 23 | 22 | 23 | 22 | 23 | 22 | 5 | 4 | 609 | 481 |
| Bulgaria | 17 | 9 | 17 | 9 | 10 | 8 | 4 | 4 | 919 | 932 |
| Romania | 6 | 5 | 6 | 5 | 4 | 3 | 2 | 2 | 1,198 | 879 |
| Central and Eastern Europe5 | 232 | 236 | 236 | 236 | 143 | 145 | 38 | 27 | 413 | 310 |
| Middle East and North Africa | 52 | 40 | 45 | 40 | 40 | 30 | 7 | 5 | 330 | 331 |
| Global Life | 2 | 1 | 2 | 1 | 2 | 1 | 1 | – | –6 | –6 |
| Growth Markets | 1,988 | 1,616 | 1,738 | 1,616 | 736 | 602 | 106 | 83 | 130 | 125 |
| Consolidation7 | (339) | (594) | (339) | (594) | – | – | (18) | 3 | –6 | –6 |
| Total | 18,822 | 17,163 | 17,923 | 17,018 | 6,753 | 6,276 | 1,104 | 880 | 77 | 73 |
1 Statutory premiums are gross premiums written from sales of life and health insurance policies as well as gross receipts from sales of unit-linked and other investment-oriented products, in accordance with the statutory accounting practices applicable in the insurer's home jurisdiction. 2 Represents annualized operating profit (loss) divided by the average of the current quarter-end and previous
year-end net reserves, where net reserves equal reserves for loss and loss adjustment expenses, reserves for insurance and investment contracts and financial liabilities for unit-linked contracts less reinsurance assets.
4 In the fourth quarter of 2014, we transferred our French International Health business to the reportable segment Allianz Worldwide Partners in the business segment Property-Casualty effective 1 January 2014.
5 Contains income and expense items from a management holding and consolidations between countries in this region.
6 Presentation not meaningful.
7 Represents elimination of transactions between Allianz Group companies in different geographic regions.
| A | Interim Group Management Report | |||
|---|---|---|---|---|
| --- | -- | -- | --------------------------------- | -- |
30 Balance Sheet Review 37 Reconciliations
First quarter 2015
− Operating profit decreased 14.0% to € 555 mn.
23 Asset Management
Allianz offers Asset Management products and services for third-party investors and the Allianz Group's insurance operations. We serve a wide range of retail and institutional clients worldwide with investment and distribution capacities in all major markets. Based on total assets under management, we are one of the largest asset managers in the world that manage third-party assets with active investment strategies.
| € mn | ||
|---|---|---|
| three months ended 31 March | 2015 | 2014 |
| Operating revenues | 1,573 | 1,517 |
| Operating profit | 555 | 646 |
| Cost-income ratio in % | 64.7 | 57.4 |
| Net income | 329 | 406 |
| Total assets under management as of 31 March in € bn |
1,933 | 1,765 |
| thereof: Third-party assets under management as of 31 March in € bn |
1,408 | 1,342 |
As of 31 March 2015, total assets under management (AuM) amounted to € 1,933 bn. Of this, € 1,408 bn related to our third-party AuM and € 525 bn to Allianz Group assets.
In the first three months of 2015, we recorded net outflows from total AuM of € 60 bn. Net outflows from third-party AuM amounted to € 62 bn strongly driven by PIMCO in the United States, primarily from traditional fixed income products. However, compared to the fourth quarter of 2014, third-party AuM net outflows more than halved. AllianzGI recorded strong third-party net inflows in Europe, resulting in net inflows for the ninth consecutive quarter.
Market and Other effects contributed € 54 bn to total AuM, with € 26 bn at PIMCO and € 28 bn at AllianzGI.
Third-party AuM were adjusted for AuM related to a joint venture. This was the main driver for the decline in total AuM of € 6 bn reported as consolidation, deconsolidation and other adjustments.
We recorded favorable foreign currency translation effects of € 145 bn, mainly as a result of the exchange rate of the U.S. Dollar to Euro, which declined from 1.21 at the beginning of the year to 1.07 at the end of the first quarter.
€ BN
hedge funds, etc.
1 Fixed income and equity definitions based on legal entity view as of 31 December 2014, therefore, 2015 and 2014 figures are not comparable.
2 From the first quarter of 2015, net flows represent the sum of new client assets, additional contributions from existing clients including dividend reinvestment, withdrawals of assets from, and termination of, 4 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. 5 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,
client accounts and distributions to investors. Reinvested dividends amounted to € 2.3 bn. 3 From the first quarter of 2015, Market and Other represents current income earned on, and changes in fair value of, securities held in client accounts as well as dividends from net investment income and from net realized capital gains to investors of open ended mutual funds and of closed end funds.
In the following section we focus on the development of third-party AuM.
As of 31 March 2015, the share of third-party AuM by business unit was 79.1% attributable to PIMCO and 20.9% to AllianzGI.
1 Based on the location of the asset management company.
2 "America" consists of the United States, Canada and Brazil (approximately € 820 BN, € 16 BN and € 2 BN third-party AuM as of 31 March 2015, respectively).
The regional allocation of third-party AuM shifted slightly in favor of Europe, mainly due to foreign currency translation effects at PIMCO in the United Kingdom as well as market effects. Net outflows at PIMCO were overcompensated by an increase in market return and – especially in the United States – by the appreciation of the U.S. Dollar.
At the beginning of 2015 we enhanced our asset class reporting from a legal entity view to a more granular asset class split composed of fixed income, equities, multi-assets, and other. Furthermore, we replaced the retail and institutional asset split by an investment vehicle view, comprised of mutual funds and separate accounts.1
Based on the asset class split on 31 March 2015, the share of fixed income amounted to 73%, reflecting the high share of fixed income assets at PIMCO, 11% in equity assets due to the notable equity share at AllianzGI, while multi-assets and other accounted for 11% and 5%, respectively.
The share of third-party AuM between mutual funds and separate accounts was stable, with mutual funds at 59 % and separate accounts at 41%.
1 Mutual funds are investment vehicles (in the United States, investment companies, subject to the U.S. code; in Germany, vehicles subject to the "Standard-Anlagerichtlinien des Fonds" Investmentgesetz) where the money of several individual investors is pooled into one account to be managed by the asset manager, e.g. open-end funds, closed-end funds. Separate accounts are investment vehicles where the money of a single investor is directly managed by the asset manager in a separate dedicated account (e.g. public or private institutions, high net worth individuals and corporates).
Three-year rolling investment performance ofPIMCO andAllianzGI1
30 Balance Sheet Review 37 Reconciliations
% PIMCO AllianzGI 12/31/2014 3/31/2015 12/31/2014 3/31/2015 100 80 60 40 20 0 (20) (40) 87 (13) 88 (12) 58 (42) 55 (45)
Underperforming third-party assets under management
1 The investment performance is based on Allianz Asset Management account-based, asset-weighted three-year investment performance of third-party assets versus the primary target including all accounts managed by portfolio managers of Allianz Asset Management. For some retail funds, the net of fee performance is compared to the median performance of the corresponding Morningstar peer group (first and second quartile mean outperformance). For all other retail funds and for all institutional accounts, the gross of fee performance (revaluated based on closing prices) is compared to the respective benchmark based on different metrics.
The overall three-year rolling investment performance of our Asset Management business remained on a high level, with 83 % of our third-party assets outperforming their respective benchmarks (31 December 2014: 84 %). 87 % of PIMCO third-party assets outperformed their respective benchmarks, while 58 % of AllianzGI thirdparty assets did so.
Our operating revenues rose by € 56 mn – or 3.7 % – to € 1,573 mn. Excluding the positive foreign currency translation effects, mainly due to the sharp appreciation of the U.S. Dollar against the Euro, operating revenues decreased by 10.7 % on an internal basis1. Average third-party AuM grew by 2.6 % compared to the first quarter of 2014. However, the increase was driven by the strong foreign currency translation effects. Before foreign currency translation effects, average third-party AuM decreased by 12.9% over the same period.
Net fee and commission income went up by € 51 mn – or 3.4% – to € 1,567 mn, which is a decrease of 11.7% adjusted for foreign currency translation effects. The decrease is mainly driven by our AuM-driven revenues which dropped by 13.9% before foreign currency translation effects, mainly due to the lower average third-party AuM and a slight decline in our third-party AuM-driven margin. Our performance fees grew by € 40 mn – € 30 mn adjusted for foreign currency translation effects – driven by both PIMCO and AllianzGI.
Our operating profit decreased by € 91 mn – or 14.0 % – to € 555 mn. Excluding the positive foreign currency translation effects, operating profit dropped by 26.7% on an internal basis1. The main drivers for the decrease were lower AuM-related income and – to a lesser extent – lower margins, which were partly offset by higher performance fees. In the fourth quarter of 2014, PIMCO introduced the Special Performance Award (SPA), to secure performance and retain talent. Therefore the SPA also had an impact on operating profit in the first quarter of 2015.
Administrative expenses rose by € 145 mn – or 16.6% – to € 1,018 mn, a decrease of 0.6% adjusted for foreign currency translation effects, despite the impact of the SPA.
Our cost-income ratio went up by 7.3 percentage points to 64.7%, thereof 2.7 percentage points related to the impact of the SPA at PIMCO. This development also reflects the decrease in operating revenues outpacing the decrease in operating expenses before foreign currency translation effects.
1 Operating revenues/operating profit adjusted for foreign currency translation and (de-)consolidation effects. In the first quarter of 2015 the average exchange rate of the U.S. Dollar to Euro was 1.13 (1Q 2014: 1.37).
Our net income fell by € 77 mn – or 19.0 % – to € 329 mn, which is a decrease of 31.5% adjusted for foreign currency translation effects. This is consistent with our operating profit development, but also includes an effect from pension revaluation.
| € MN | ||
|---|---|---|
| three months ended 31 March | 2015 | 2014 |
| Management and loading fees | 1,871 | 1,825 |
| Performance fees | 59 | 19 |
| Other | 10 | 16 |
| Fee and commission income | 1,940 | 1,861 |
| Commissions | (354) | (307) |
| Other | (18) | (37) |
| Fee and commission expenses | (373) | (345) |
| Net fee and commission income | 1,567 | 1,516 |
| Net interest income1 | (1) | – |
| Income from financial assets and liabilities carried at fair value through income (net) |
5 | (1) |
| Other income | 1 | 2 |
| Operating revenues | 1,573 | 1,517 |
| Administrative expenses (net), excluding acquisition-related expenses |
(1,018) | (873) |
| Restructuring charges | – | 2 |
| Operating expenses | (1,018) | (871) |
| Operating profit | 555 | 646 |
| Non-operating items | (27) | (14) |
| Income before income taxes | 528 | 631 |
| Income taxes | (199) | (225) |
| Net income | 329 | 406 |
| Cost-income ratio2 in % | 64.7 | 57.4 |
1 Represents interest and similar income less interest expenses.
2 Represents operating expenses divided by operating revenues.
5 Executive Summary
23 Asset Management
27 Corporate and Other
30 Balance Sheet Review 37 Reconciliations
First quarter 2015
Operating loss decreased from € 222 mn to € 101 mn, mainly driven by Holding&Treasury.
Corporate and Other encompasses the reportable segments Holding&Treasury, Banking and Alternative Investments. Holding&Treasury includes the management of and support for the Allianz Group's businesses through its strategy, risk, corporate finance, treasury, financial reporting, controlling, communication, legal, human resources, technology and other functions. Our banking products offered in Germany, Italy, France, the Netherlands and Bulgaria complement our insurance product portfolio. We also provide global alternative investment management services in the private equity, real estate, renewable energy and infrastructure sectors, mainly on behalf of the Allianz Group.
| € mn three months ended 31 March |
2015 | 2014 |
|---|---|---|
| Operating revenues | 551 | 377 |
| Operating expenses | (652) | (600) |
| Operating result | (101) | (222) |
| Net income (loss) | (49) | 131 |
| € mn three months ended 31 March |
2015 | 2014 |
|---|---|---|
| Holding & Treasury | ||
| Operating revenues | 215 | 69 |
| Operating expenses | (358) | (316) |
| Operating result | (143) | (248) |
| Banking | ||
| Operating revenues | 284 | 268 |
| Operating expenses | (252) | (251) |
| Operating result | 32 | 18 |
| Alternative Investments | ||
| Operating revenues | 53 | 41 |
| Operating expenses | (43) | (33) |
| Operating result | 10 | 8 |
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.
Our operating result improved by € 121 mn to a loss of € 101 mn. While all reportable segments contributed to this improvement, Holding& Treasury contributed € 104 mn.
Our net result decreased from an income of € 131 mn to a loss of € 49 mn, mainly driven by lower one-off effects from a pensions revaluation with our German subsidiaries1.
Overall, our operating loss improved from € 248 mn to € 143 mn. The increase in administrative expenses and a worsening of our net fee and commission result were more than offset by a positive effect in other income.
Other income increased by € 148 mn. This positive impact on income was due to the adapted cost allocation scheme for the pension provisions between the German subsidiaries and Allianz SE.2
Administrative expenses (net), excluding acquisition-related expenses, increased by € 27 mn to € 182 mn. This was mainly because of higher pension costs as a result of lower discount rates.
Our net fee and commission result decreased by € 21 mn to a loss of € 76 mn. This was the result of higher strategic IT investment costs.
Our net interest result amounted to a loss of € 22 mn, representing an uptick of € 1 mn compared to the previous year's quarter. Interest and similar income dipped by € 5 mn to € 49 mn. This was mainly due to the absence of income from associated companies, which is recognized within the insurance business segments from 2015 onwards. Our interest expenses, excluding interest expenses from external debt, decreased by € 6 mn to € 71 mn as a result of lower internal borrowing.
Operating income from financial assets and liabilities carried at fair value through income (net) increased from € 0 mn to € 6 mn, mainly due to the increased fair value of certain fund investments.
Investment expenses slightly increased from € 14 mn to € 16 mn. This increase was driven by higher expenses related to rating agencies' services.
Our operating result increased by € 15 mn to € 32 mn, with all banking units contributing to this development. This improvement was largely driven by higher management and performance fees.
Our net interest, fee and commission result remained flat at € 134 mn (1Q 2014: € 135 mn). Our net interest result decreased by € 3 mn to € 81 mn as the € 11 mn decline in interest and similar income was substantially compensated for by a decrease in interest expenses. Both effects were primarily driven by lower interest rates. Our net fee and commission result increased from € 51 mn to € 54 mn, including € 23 mn higher fee and commission income. Our fee and commission income went up mainly as a result of higher management and performance fee income in line with the growth in assets under management and positive market developments. However, this increase was largely offset by higher fee and commission expenses, which were impacted by an aperiodic transfer from administrative expenses to fee and commission expenses, with no effect on operating profit.
Administrative expenses decreased from € 110 mn to € 100 mn mainly due to the above-mentioned aperiodic expense transfer.
Our loan loss provisions remained almost unchanged at € 8 mn.
Our operating income from financial assets and liabilities carried
at fair value through income (net) increased from € 2 mn to € 6 mn. This was mainly driven by a better non-proprietary trading result within our German banking business.
Our operating profit increased by € 3 mn to € 10 mn. This was due to the net effect of € 12 mn higher fee and commission income and € 9 mn increased administrative expenses. Both developments were in line with new investments.
1 Respective offsetting effects were recorded within our other business segments, mainly within Property-Casualty. For further information on the one-off effects from pension revaluation, please refer to note 4 to the condensed consolidated interim financial statements.
2 For further information on the adapted cost allocation scheme for the pension provisions, please refer to note 4 to the condensed consolidated interim financial statements.
5 Executive Summary
30 Balance Sheet Review 37 Reconciliations
Our economic outlook remains unchanged. For full details, please refer to page 105 of the Allianz Group Annual Report 2014.
Our insurance industry outlook remains unchanged. For full details, please refer to pages 105 and 106 of the Allianz Group Annual Report 2014.
Our asset management industry outlook remains unchanged. For full details, please refer to page 106 of the Allianz Group Annual Report 2014.
We are confident about staying on course towards profitable growth during the rest of 2015 and currently see no need to adjust our published Allianz Group operating profit outlook for 2015 of € 10.4 BN, plus or minus € 0.4 BN. However, unfavorable developments in the business environment can have adverse impacts on aspects of our performance. It would therefore be inappropriate to simply annualize the current quarter's operating profit and net income to arrive at an expected result for the full year.
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 from natural catastrophes, and the development of loss expenses, (iv) mortality and morbidity levels and trends, (v) persistency levels, (vi) particularly in the banking business, the extent of credit defaults, (vii) interest rate levels, (viii) currency exchange rates including the Euro/U.S. Dollar exchange rate, (ix) changes in laws and regulations, including tax regulations, (x) the impact of acquisitions, including related integration issues, and reorganization measures, and (xi) general competitive factors, in each case on a local, regional, national and/or global basis. Many of these factors may be more likely to occur, or more pronounced, as a result of terrorist activities and their consequences.
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.
Compared to year-end 2014, shareholders' equity increased by € 7,651 mn to € 68,397 mn as of 31 March 2015. This growth was predominantly driven by an increase in unrealized gains, which were up by € 4,280 mn due to higher fair values of both debt securities and – to a lesser extent – equities following market developments. Our net income attributable to shareholders of € 1,822 mn also contributed to this growth. As a result of the significant depreciation of the Euro against various currencies – in particular the U.S. Dollar, but also the Swiss Franc – the € 1,757 mn increase in foreign currency translation adjustments further contributed to the strengthening in shareholders' equity.
The Allianz Group is a financial conglomerate within the scope of the E.U. Financial Conglomerates Directive and the related German law in force since 2005. The law requires that financial conglomerates calculate the capital available to meet their solvency requirements on a consolidated basis, which we refer to as "eligible capital".
Solvency ratio Eligible capital Requirement
1 Off-balance sheet reserves are accepted by the authorities as eligible capital only upon request. Allianz SE has not submitted an application so far. Excluding off-balance sheet reserves and adjusted for an upcoming redemption of hybrid capital, the solvency ratio as of 31 March 2015 would be 182% (31 December 2014: 172%).
2 Conglomerate solvency ratios as of 31 March 2015 and 31 December 2014 were adjusted for an upcoming redemption of hybrid capital (subordinated bonds) of € 0.4 bn in June 2015, for which a call notice was published in April 2015. Excluding these adjustments, the solvency ratios would be 192% and 182% (including off-balance sheet reserves) as of 31 March 2015 and 31 December 2014, respectively.
Compared to year-end 2014, our conglomerate solvency ratio increased 10 percentage points to 190%. The Group's eligible capital for solvency purposes was up by € 4.9 bn to € 54.7 bn. The issuance of a new subordinated bond (€ 1.5 bn) and favorable foreign currency translation adjustments (€ 1.4 bn) contributed most to the increase. In addition, the increase was also supported by € 1.1 bn higher unrealized gains on equities and our net income (net of accrued dividends) of € 0.9 bn. These effects were only partly offset by an € 0.4 bn increase in actuarial losses on the valuation of our pension benefit obligation, following a decrease in discount rates. The required funds were up by € 1.2 bn to € 28.8 bn, mainly due to higher aggregate policy reserves in
1 Conglomerate solvency ratios as of 31 March 2015 and 31 December 2014 were adjusted for an upcoming redemption of hybrid capital (subordinated bonds) of € 0.4 bn in June 2015, for which a call notice was published in April 2015. Excluding these adjustments, the solvency ratios would be 192% and 182% (including off-balance sheet reserves) as of 31 March 2015 and 31 December 2014, respectively. Off-balance sheet reserves are accepted by the authorities as eligible capital only upon request. Allianz SE has not submitted an application so far. Excluding off-balance sheet reserves and adjusted for the upcoming redemption of hybrid capital, the solvency ratios as of 31 March 2015 and 31 December 2014 would be 182% and 172%, respectively.
2 This does not include non-controlling interests of € 3,103 mn and € 2,955 mn as of 31 March 2015 and 31 December 2014, respectively. For further information, please refer to note 20 to the condensed consolidated interim financial statements. Retained earnings include foreign currency translation adjustments of € (219) mn and € (1,977) mn as of 31 March 2015 and 31 December 2014, respectively.
5 Executive Summary
23 Asset Management
29 Outlook
30 Balance Sheet Review 37 Reconciliations
Life/Health. As a result, our eligible capital surpassed the minimum stipulated level under the current law by € 26.0 bn.
As of 31 March 2015, total assets amounted to € 878.3 bn and total liabilities were € 806.8 bn. Compared to year-end 2014, total assets and total liabilities increased by € 72.5 bn and € 64.7 bn, respectively.
The following section mainly focuses on our financial investments in debt instruments, equities, real estate and cash, since these reflect the major developments in our asset base.
The following portfolio overview covers the Allianz Group assets held for investment, which are mainly driven by our insurance businesses.
Compared to year-end 2014, our investment portfolio increased by € 50.1 bn to € 664.7 bn as of 31 March 2015, with no relative change in our overall asset allocation despite some major realizations.
Our direct gross exposure to equities amounted to € 47.4 bn – up by € 6.1 bn – as value increases following the very positive market developments more than offset material realizations made to rebalance our overall investment portfolio. In addition, given the significant upswing in equity markets, we substantially increased the hedged portion of this direct gross exposure against share price declines. As a result, our equity gearing1 decreased four percentage points to 20%.
Our direct exposure to real estate increased by € 0.6 bn to € 11.9 bn mainly due to new investments.
Our cash and other investments decreased by € 0.3 bn to € 11.9 bn.
Our exposure to debt instruments grew by € 43.7 bn – or 8% – to € 593.5 bn, but still represented 89% of our investment portfolio. The increase in absolute terms was driven by higher fair values as a result of further declines in interest rates as well as by new investments. It was also supported by positive foreign currency effects.
Total fixed income portfolio as of 31 March 2015: € 593.5 bn [as of 31 December 2014: € 549.8 bn] in %
The allocation of our well-diversified fixed income portfolio remained rather stable, with modest increases in the share of corporate bonds and government bonds accompanied by a minor reduction in the portion of covered bonds. About 94% of this portfolio of debt instruments was invested in investment-grade bonds and loans.2
Over the first quarter of 2015, our government bond exposure increased by € 23.2 bn to € 232.5 bn. This increase was primarily driven by fair value increases following the drop in interest rates and the resulting market developments. The allocation of our government and government-related direct bond exposure remained rather stable, with a marginal decrease in the share of German government bonds. Furthermore, the share of Italian government bonds marginally decreased, while the share of Spanish government bonds increased, supported by new investments. Our sovereign debt exposure in Italy and Spain equaled 5.5 % and 1.5 % of our fixed income portfolio. The corresponding unrealized gains (gross) both increased and amounted to € 7,407 mn in Italy and € 1,395 mn in Spain. Our government bond exposure in Portugal remained limited, with small unrealized gains. We continued to have virtually no exposure to Greek or Ukrainian government bonds. The respective exposure to Russia was relatively small in the context of our overall portfolio and was mainly denominated in U.S. Dollar.
1 Equity gearing is defined as the ratio of our equity holdings allocated to the shareholders after policyholder participation and hedges to shareholders' equity plus off-balance sheet reserves less goodwill.
2 Excluding self-originated German private retail mortgage loans. For 2%, no ratings were available.
Our covered bond portfolio amounted to € 106.9 bn, € 0.7 bn below the year-end value, representing 18% of our fixed income portfolio. 43 % (31 December 2014: 44 %) of this portfolio was German Pfandbriefe, backed by either public sector loans or mortgage loans. Unchanged, another 16 %, 10 % and 7 % of the covered bonds were attributable to France, Spain and Italy, respectively. Covered bonds provide a cushion against real estate price deterioration and payment defaults through minimum required security buffers and overcollateralization.
Our corporate bonds exposure increased from € 145.1 bn to € 160.4 bn, and in relative terms from 26% to 27% of our fixed income portfolio. This was primarily driven by positive currency effects as well as new investments. The slight regional shift from Eurozone corporate bonds to bonds of the North-American region, as reported for 2014, continued in the first quarter of 2015. This was again driven by value increases in U.S. Dollar-denominated exposures due to the respective exchange rate movement and new investments.
Our exposure to bank securities – including the exposure to subordinated securities in banks – still accounted for 6 % of our fixed income portfolio and amounted to € 34.3 bn. This € 1.9 bn increase was mainly the result of positive currency translation effects and interest rate related market movements. The exposure to subordinated securities in banks remained stable at € 5.4 bn (31 December 2014: € 5.3 bn).
Our exposure to asset-backed securities (ABS) went up by € 2.7 bn to € 25.6 bn and still accounted for 4% of our fixed income portfolio. This increase was largely related to new investments as well as positive currency translation effects. About 71% of our ABS portfolio was related to mortgage-backed securities (MBS). MBS issued by U.S. agencies, which are backed by the U.S. government, increased by one percentage point and accounted for 16% of the ABS portfolio. Overall, 97% of the ABS portfolio received an investment grade rating, with 88 % rated "AA" or better.
| 2015 | 2014 | Delta |
|---|---|---|
| 5,301 | 5,041 | 260 |
| 683 | (250) | 933 |
| 2,519 | 780 | 1,738 |
| (89) | (296) | 207 |
| (238) | (199) | (39) |
| 8,176 | 5,077 | 3,099 |
| (124) | (70) | (55) |
| 318 | 126 | 192 |
| (20) | (66) | 46 |
| 174 | (9) | 184 |
| 8,350 | 5,068 | 3,283 |
1 Net of interest expenses (excluding interest expenses from external debt).
Our total investment income (net) increased by € 3,283 mn to € 8,350 mn. This was largely driven by higher realized gains and an increase in operating income from financial assets and liabilities carried at fair value through income (net).
Our operating investment income (net) increased by € 3,099 mn to € 8,176 mn.
Operating realized gains and losses (net) were up by € 1,738 mn to € 2,519 mn. This increase was almost equally driven by higher realizations on both equities and debt securities – mainly within our German Life/Health business.
Operating income from financial assets and liabilities carried at fair value through income (net) recovered from a loss of € 250 mn to a gain of € 683 mn. This was mainly driven by gains from the net of foreign currency translation effects – in particular related to the U.S. Dollar increase against the Euro – and financial derivatives, which were used to manage duration and other interest-rate-related exposures and to protect against equity and foreign currency fluctuations.
23 Asset Management
29 Outlook
30 Balance Sheet Review 37 Reconciliations
Interest and similar income (net)1 increased by € 260 mn to € 5,301 mn. This was mainly due to higher interest income as a result of positive exchange rate effects and a higher asset base. It was also supported by increased income from equities. These effects compensated for the lower yields on fixed income securities.
Our operating impairments of investments (net) decreased by roughly two-thirds to a comparatively low level of € 89 mn due to the very benign capital market developments. Approximately one half of the recorded impairments were related to one single debt investment in the financial services industry.
Investment expenses increased by € 39 mn to € 238 mn. This was mainly driven by higher management fees from the increased asset values.
Our non-operating investment income (net) improved from a loss of € 9 mn to income of € 174 mn.
Non-operating income from financial assets and liabilities carried at fair value through income (net) decreased by € 55 mn to a loss of € 124 mn, mainly due to unfavorable impacts from hedging-related activities.
Non-operating realized gains and losses (net) increased from € 126 mn to € 318 mn as a result of higher realizations on debt securities and equities.
Non-operating impairments of investments (net) decreased by € 46 mn to € 20 mn, mainly due to lower impairments on debt securities.
Compared to year-end 2014, the Property-Casualty asset base increased by € 7.2 bn to € 116.5 bn. This was driven primarily by higher debt securities, but also by increased equities and cash and cash pool assets.
Composition of asset base – fair values1
| € bn | ||
|---|---|---|
| as of | as of | |
| 31 March | 31 December | |
| 2015 | 2014 | |
| Financial assets and liabilities carried at fair value through income |
||
| Equities | 0.3 | 0.4 |
| Debt securities | 0.1 | 0.1 |
| Other2 | – | – |
| Subtotal | 0.4 | 0.5 |
| Investments3 | ||
| Equities | 7.1 | 6.3 |
| Debt securities | 77.5 | 72.4 |
| Cash and cash pool assets4 | 6.7 | 5.6 |
| Other | 9.9 | 9.5 |
| Subtotal | 101.2 | 93.8 |
| Loans and advances to banks and customers | 14.8 | 15.0 |
| Property-Casualty asset base | 116.5 | 109.2 |
1 Loans and advances to banks and customers, held-to-maturity investments and real estate held for investment are stated at amortized cost. Investments in associates and joint ventures are stated at either amortized cost or equity, depending on – among other factors – our ownership percentage.
2 This comprises assets of € 0.1 bn and € 0.1 bn and liabilities of € (0.1) bn and € (0.1) bn as of 31 March 2015 and 31 December 2014, respectively.
3 These do not include affiliates of € 8.9 bn and € 8.9 bn as of 31 March 2015 and 31 December 2014, respectively.
4 Including cash and cash equivalents, as stated in our business segment balance sheet of € 4.0 bn and € 3.7 bn and receivables from cash pooling amounting to € 3.6 bn and € 4.2 bn, net of liabilities from securities lending and derivatives of € (0.2) bn and € (0.1) bn, as well as liabilities from cash pooling of € (0.7) bn and € (2.1) bn as of 31 March 2015 and 31 December 2014, respectively.
ABS within the Property-Casualty business segment base amounted to € 4.3 bn, an uptick of € 0.2 bn compared to year-end. This exposure represented an unchanged 3.7% of the business segment's asset base.
1 Net of interest expenses (excluding interest expenses from external debt).
| € bn | |||
|---|---|---|---|
| Gross | Ceded | Net | |
| As of 1 January 2015 | 58.9 | (6.6) | 52.3 |
| Balance carry forward of discounted loss reserves2 |
3.6 | (0.3) | 3.3 |
| Subtotal | 62.5 | (6.9) | 55.6 |
| Loss and loss adjustment expenses paid in current year relating to previous years |
(5.5) | 0.3 | (5.2) |
| Loss and loss adjustment expenses incurred in previous years |
(0.5) | 0.1 | (0.4) |
| Foreign currency translation adjustments and other changes |
2.6 | (0.4) | 2.3 |
| Changes in reserves for loss and loss adjustment expenses in current year |
6.5 | (0.6) | 5.9 |
| Subtotal | 65.6 | (7.4) | 58.2 |
| Ending balance of discounted loss reserves2 |
(3.8) | 0.3 | (3.5) |
| As of 31 March 2015 | 61.8 | (7.0) | 54.8 |
1 For further information about changes in the reserves for loss and loss adjustment expenses for the Property-Casualty business segment, please refer to note 15 to the condensed consolidated interim financial statements.
2 Although discounted loss reserves have been reclassified to "Reserves for insurance and investment contracts" in the balance sheet in 2013, the underlying business development of these Property-Casualty reserves is still considered in the loss and loss adjustment expenses and in the loss ratio and is therefore included in the development of the reserves above.
As of 31 March 2015, the business segment's gross reserves for loss and loss adjustment expenses and discounted loss reserves amounted to € 65.6 bn – an increase of € 3.1 bn compared to year-end 2014. On a net basis, our reserves – including discounted loss reserves – increased from € 55.6 bn to € 58.2 bn. Foreign currency translation effects and other changes were up to € 2.3 bn on a net basis.
The Life/Health asset base grew by € 51.2 bn – or 9.1% – to € 616.6 bn. This was largely driven by an increased exposure to debt securities, but also by higher equities, and was in line with the developments in our overall investment portfolio. Higher financial assets for unitlinked contracts also contributed to this growth.
| € bn | ||
|---|---|---|
| as of 31 March |
as of 31 December |
|
| 2015 | 2014 | |
| Financial assets and liabilities carried at fair value through income |
||
| Equities | 2.1 | 1.8 |
| Debt securities | 2.2 | 2.0 |
| Other1 | (7.3) | (6.8) |
| Subtotal | (3.1) | (3.0) |
| Investments2 | ||
| Equities | 37.3 | 32.2 |
| Debt securities | 366.0 | 331.8 |
| Cash and cash pool assets3 | 7.1 | 8.0 |
| Other | 10.5 | 10.4 |
| Subtotal | 421.0 | 382.4 |
| Loans and advances to banks and customers | 92.5 | 91.4 |
| Financial assets for unit-linked contracts4 | 106.2 | 94.6 |
| Life/Health asset base | 616.6 | 565.4 |
1 This comprises assets of € 2.1 bn and € 1.4 bn and liabilities (including the market value liability option) of € (9.5) bn and € (8.2) bn as of 31 March 2015 and 31 December 2014, respectively.
2 These do not include affiliates of € 0.2 bn and € 0.2 bn as of 31 March 2015 and 31 December 2014, respectively.
3 Including cash and cash equivalents, as stated in our business segment balance sheet, of € 7.9 bn and € 7.6 bn and receivables from cash pooling amounting to € 2.8 bn and € 3.1 bn, net of liabilities from securities lending and derivatives of € (3.5) bn and € (2.6) bn, as well as liabilities from cash pooling of € (0.1) bn and € (0.0) bn as of 31 March 2015 and 31 December 2014, respectively.
4 Financial assets for unit-linked contracts represent assets owned by, and managed on behalf of, policyholders of the Allianz Group, with all appreciation and depreciation in these assets accruing to the benefit of policyholders. As a result, the value of financial assets for unit-linked contracts in our balance sheet corresponds to the value of financial liabilities for unit-linked contracts. The International Financial Reporting Standards (IFRS) require the classification of any contract written by an insurance company either as an insurance contract or as an investment contract, depending on whether an insurance component is included. This requirement also applies to unit-linked products. In contrast to unit-linked investment contracts, unit-linked insurance contracts include coverage for significant mortality or morbidity risk.
ABS within the Life/Health asset base increased by € 1.9 bn to € 18.8 bn and still represented 3.0% of the business segment's asset base.
| € Bn | |||
|---|---|---|---|
| Unit-linked insurance contracts |
Unit-linked investment contracts |
Total | |
| As of 1 January 2015 | 62.7 | 31.9 | 94.6 |
| Net premium inflows (outflows) | 0.7 | 1.7 | 2.4 |
| Changes in fund value | 3.5 | 1.8 | 5.3 |
| Foreign currency translation adjustments |
4.4 | 0.3 | 4.6 |
| Other changes | (0.7) | – | (0.7) |
| As of 31 March 2015 | 70.5 | 35.7 | 106.2 |
1 Financial assets for unit-linked contracts represent assets owned by, and managed on behalf of, policyholders of the Allianz Group, with all appreciation and depreciation in these assets accruing to the benefit of policyholders. As a result, the value of financial assets for unit-linked contracts in our balance sheet corresponds to the value of financial liabilities for unit-linked contracts. The International Financial Reporting Standards (IFRS) require the classification of any contract written by an insurance company either as an insurance contract or as an investment contract, depending on whether an insurance component is included. This requirement also applies to unit-linked products. In contrast to unit-linked investment contracts, unit-linked insurance contracts include coverage for significant mortality or morbidity risk.
23 Asset Management
30 Balance Sheet Review 37 Reconciliations
Financial assets for unit-linked contracts went up by € 11.6 bn – or 12.3 % – to € 106.2 bn. Unit-linked insurance contracts increased by € 7.8 bn to € 70.5 bn due to good fund performance (€ 3.5 bn) and currency effects (€ 4.4 bn). Unit-linked investment contracts increased by € 3.8 bn to € 35.7 bn, with premium inflows exceeding outflows (net € 1.7 bn). Currency effects were mainly driven by the stronger U.S. Dollar (€ 3.2 bn) and Asian currencies (€ 1.1 bn).1
Life/Health reserves for insurance and investment contracts increased by € 34.9 bn – or 7.8% – to € 484.2 bn in the first quarter of 2015. The € 6.2 bn increase in aggregate policy reserves was mainly driven by our operations in Germany (€ 3.0 bn), the United States (€ 1.5 bn before currency effects) and Switzerland (€ 0.7 bn). Reserves for premium refund increased by € 15.7 bn due to higher unrealized gains to be shared with policyholders. Currency impacts resulted from the stronger U.S. Dollar (€ 8.7 bn), the Swiss Franc (€ 2.0 bn) and Asian currencies (€ 2.1 bn).1
The Asset Management business segment's results are derived primarily from asset management for third-party investors and the Allianz Group's insurance operations. In this section, we refer only to the business segment's own assets.2
The business segment's asset base decreased from € 2.6 bn to € 2.0 bn, mainly due to lower cash and cash pool assets – the main component of the business segment's asset base.
Liabilities in our Asset Management business segment increased by € 0.2 bn to € 2.6 bn.
The Corporate and Other asset base increased by € 3.8 bn to € 48.5 bn – almost entirely as a result of an increased volume of debt securities.
| € bn | ||
|---|---|---|
| as of | as of | |
| 31 March | 31 December | |
| 2015 | 2014 | |
| Financial assets and liabilities carried at fair value through income |
||
| Equities | 0.1 | 0.1 |
| Debt securities | 0.2 | 0.2 |
| Other1 | (0.4) | (0.5) |
| Subtotal | (0.1) | (0.1) |
| Investments2 | ||
| Equities | 2.9 | 2.7 |
| Debt securities | 31.5 | 28.4 |
| Cash and cash pool assets3 | (4.0) | (4.1) |
| Other | 0.3 | 0.3 |
| Subtotal | 30.8 | 27.3 |
| Loans and advances to banks and customers | 17.8 | 17.5 |
| Corporate and Other asset base | 48.5 | 44.7 |
1 This comprises assets of € 0.3 bn and € 0.2 bn and liabilities of € (0.7) bn and € (0.6) bn as of 31 March 2015 and 31 December 2014, respectively.
2 These do not include affiliates of € 76.3 bn and € 77.2 bn as of 31 March 2015 and 31 December 2014, respectively.
3 Including cash and cash equivalents, as stated in our business segment balance sheet, of € 2.3 bn and € 2.0 bn and receivables from cash pooling amounting to € 0.4 bn and € 1.7 bn, net of liabilities from securities lending and derivatives of € (0.1) bn and € (0.0) bn, as well as liabilities from cash pooling of € (6.5) bn and € (7.9) bn as of 31 March 2015 and 31 December 2014, respectively.
ABS within the Corporate and Other asset base was up by € 0.6 bn to € 2.6 bn, mainly due to new investments. This represented an increase from 4.5% to 5.3% of the Corporate and Other's asset base.
Compared to year-end 2014, subordinated liabilities increased by € 0.7 bn to € 12.7 bn. This was mainly related to the net effect of the issuance and redemption of subordinated bonds. Other liabilities dipped by € 0.3 bn to € 27.8 bn. Certificated liabilities remained unchanged at € 12.2 bn.3
1 Based on the closing rates on the respective balance sheet dates.
2 For further information on the development of these third-party assets, please refer to the Asset Management chapter.
3 For further information on Allianz SE debt as of 31 March 2015, please refer to notes 18 and 19 to the condensed consolidated interim financial statements.
| 4.0% bond issued by Allianz Finance II B.V., Amsterdam | ||
|---|---|---|
| Volume | € 1.5 BN | |
| Year of issue | 2006 | |
| Maturity date | 11/23/2016 | |
| ISIN | XS 027 588 026 7 | |
| Interest expenses | € 15 mn | |
| 1.375% bond issued by Allianz Finance II B.V., Amsterdam | ||
| Volume | € 0.5 bn | |
| Year of issue | 2013 | |
| Maturity date | 3/13/2018 | |
| ISIN | DE 000 A1H G1J 8 | |
| Interest expenses | € 2 mn | |
| 4.75% bond issued by Allianz Finance II B.V., Amsterdam | ||
| Volume | € 1.5 BN | |
| Year of issue | 2009 | |
| Maturity date | 7/22/2019 | |
| ISIN | DE 000 A1A KHB 8 |
|
| Interest expenses | € 18 mn | |
| 3.5% bond issued by Allianz Finance II B.V., Amsterdam | ||
| Volume | € 1.5 BN | |
| Year of issue | 2012 | |
| Maturity date | 2/14/2022 | |
| ISIN | DE 000 A1G 0RU 9 | |
| Interest expenses | € 13 mn | |
| 3.0% bond issued by Allianz Finance II B.V., Amsterdam | ||
| Volume | € 0.75 bn | |
| Year of issue | 2013 | |
| Maturity date | 3/13/2028 | |
| ISIN | DE 000 A1H G1K 6 | |
| Interest expenses | € 6 mn | |
| 4.5% bond issued by Allianz Finance II B.V., Amsterdam | ||
| Volume | GBP 0.75 bn |
|
| Year of issue | 2013 | |
| Maturity date | 3/13/2043 | |
| ISIN | DE 000 A1H G1L 4 | |
| Interest expenses | € 15 mn | |
| Total interest expenses for senior bonds | € 69 mn | |
| 2. Subordinated bonds3 | ||
| 5.75% bond issued by Allianz Finance II B.V., Amsterdam | ||
| Volume | € 2.0 BN | |
| Year of issue | 2011 | |
| Maturity date | 7/8/2041 | |
| ISIN | DE 000 A1G NAH 1 |
|
| Interest expenses | € 29 mn | |
| 5.625% bond issued by Allianz SE | ||
| Volume | € 1.5 bn | |
| Year of issue | 2012 | |
| Maturity date | 10/17/2042 | |
| ISIN | DE 000 A1R E1Q 3 | |
| Interest expenses | € 21 mn |
1 For further information on Allianz SE debt (issued or guaranteed) as of 31 March 2015, please refer to notes 18 and 19 to the condensed consolidated interim financial statements.
2 Senior bonds provide for early termination rights in case of non-payment of amounts due under the bond (interest and principal) as well as in case of insolvency.
| 2.241% bond issued by Allianz SE | ||
|---|---|---|
| Volume | € 1.5 BN | |
| Year of issue | 2015 | |
| Maturity date | 7/7/2045 | |
| ISIN | DE 000 A14 J9N 8 | |
| Interest expenses | € – mn | |
| 4.375% bond issued by Allianz Finance II B.V., Amsterdam | ||
| Volume | € 1.4 BN | |
| Year of issue | 2005 | |
| Maturity date | Perpetual Bond | |
| ISIN | XS 021 163 783 9 | |
| Interest expenses | € 16 mn | |
| 5.375% bond issued by Allianz Finance II B.V., Amsterdam | ||
| Volume | € 0.8 BN | |
| Year of issue | 2006 | |
| Maturity date | Perpetual Bond | |
| ISIN | DE 000 A0G NPZ 3 |
|
| Interest expenses | € 11 mn | |
| 5.5% bond issued by Allianz SE | ||
| Volume | USD 1.0 BN | |
| Year of issue | 2012 | |
| Maturity date | Perpetual Bond | |
| ISIN | XS 085 787 250 0 | |
| Interest expenses | € 14 mn | |
| 4.75% bond issued by Allianz SE | ||
| Volume | € 1.5 BN | |
| Year of issue | 2013 | |
| Maturity date | Perpetual Bond | |
| ISIN | DE 000 A1Y CQ2 9 | |
| Interest expenses | € 18 mn | |
| 3.25% bond issued by Allianz SE | ||
| Volume | CHF 0.5 bn | |
| Year of issue | 2014 | |
| Maturity date | perpetual bond | |
| ISIN | CH 023 483 337 1 | |
| Interest expenses | € 5 mn | |
| 3.375% bond issued by Allianz SE | ||
| Volume | € 1.5 bn | |
| Year of issue | 2014 | |
| Maturity date | Perpetual Bond | |
| ISIN | DE 000 A13 R7Z 7 | |
| Interest expenses | € 13 mn | |
| Total interest expenses for subordinated bonds | € 126 mn | |
| 3. Issues redeemed in 2015 | ||
| 6.5% bond issued by Allianz Finance II B.V., Amsterdam | ||
| Volume | € 1.0 BN | |
| Year of issue | 2002 | |
| Maturity date | 1/13/2025 | |
| ISIN | XS 015 952 750 5 | |
| Interest expenses | € 2 mn | |
| Sum of interest expenses1 | € 197 mn | |
| Interest expenses from external debt | ||
| not presented in the table | € 15 mn | |
| Total interest expenses from external debt | € 212 mn |
3 The terms of the subordinated bonds do not explicitly provide for early termination rights in favor of the bondholder. Interest payments are subject to certain conditions which are linked, inter alia, to our net income, and may have to be deferred. Nevertheless, the terms of the relevant bonds provide for alternative settlement mechanisms which allow us to avoid an interest deferral using cash raised from the issuance of specific newly issued instruments.
30 Balance Sheet Review 37 Reconciliations
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 according to the International Financial Reporting Standards (IFRS), the Allianz Group uses operating profit and internal growth to enhance the understanding of our results. These additional measures should be viewed as complementary to, and not as a 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 three months ended 31 March |
2015 | 2014 |
|---|---|---|
| Property-Casualty | ||
| Gross premiums written | 17,339 | 15,217 |
| Life/Health | ||
| Statutory premiums | 18,822 | 17,163 |
| Asset Management | ||
| Operating revenues | 1,573 | 1,517 |
| consisting of: | ||
| Net fee and commission income | 1,567 | 1,516 |
| Net interest income1 | (1) | – |
| Income from financial assets and liabilities carried at fair value through income (net) |
5 | (1) |
| Other income | 1 | 2 |
| Corporate and Other | ||
| Total revenues (Banking) | 140 | 139 |
| consisting of: | ||
| Interest and similar income | 139 | 150 |
| Income from financial assets and liabilities carried at fair value through income (net) |
6 | 2 |
| Fee and commission income | 139 | 116 |
| Interest expenses, excluding interest expenses from external debt |
(58) | (66) |
| Fee and commission expenses | (85) | (65) |
| Consolidation effects (Banking within Corporate and Other) |
(1) | 2 |
| Consolidation | (103) | (72) |
| Allianz Group total revenues | 37,769 | 33,963 |
1 Represents interest and similar income less interest expenses.
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.
| % | ||||
|---|---|---|---|---|
| three months ended 31 March |
Internal growth |
Changes in scope of consolidation |
Foreign currency translation |
Nominal growth |
| 2015 | ||||
| Property-Casualty | 3.5 | 5.6 | 4.7 | 13.9 |
| Life/Health | 5.3 | (0.8) | 5.2 | 9.7 |
| Asset Management | (10.7) | – | 14.4 | 3.7 |
| Corporate and Other | 0.7 | – | – | 0.7 |
| Allianz Group | 3.7 | 2.1 | 5.4 | 11.2 |
| 2014 | ||||
| Property-Casualty | 1.9 | 0.7 | (2.5) | 0.1 |
| Life/Health | 16.4 | 0.8 | (1.5) | 15.7 |
| Asset Management | (16.4) | (2.2) | (2.4) | (20.6) |
| Corporate and Other | (9.0) | 2.7 | – | (6.3) |
| Allianz Group | 7.4 | 0.6 | (2.0) | 6.0 |
The objective 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.
Loadings&fees include premium and reserve-based fees, unitlinked management fees, and policyholder participation on expenses.
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, 20 entities comprising 97.8 % 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 refers to restructuring charges, which are presented in a separate line item in the group income statement.
| 2015 | 2014 |
|---|---|
| (1,249) | (1,151) |
| 7 | 8 |
| (83) | (71) |
| (1,325) | (1,215) |
| (410) | (370) |
| 28 | 31 |
| (35) | (31) |
| 2 | 3 |
| (415) | (368) |
1 As per Interim Group Management Report.
2 As per notes to the condensed consolidated interim financial statements.
3 Excluding one-off effect from pension revaluation. For further details, please refer to note 4 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 is included in the line item premiums earned (net) in the group income statement.
Policyholder participation is included within change in reserves for insurance and investment contracts (net) in the group income statement.
| € mn | ||
|---|---|---|
| three months ended 31 March | 2015 | 2014 |
| Capitalization of DAC1 | 457 | 446 |
| Definition: URR capitalized |
156 | 120 |
| Definition: policyholder participation2 | 257 | 242 |
| Scope | 35 | 26 |
| Capitalization of DAC3 | 905 | 834 |
| Amortization, unlocking and true-up of DAC1 | (438) | (257) |
| Definition: URR amortized |
(132) | (16) |
| Definition: policyholder participation2 | (310) | (231) |
| Scope | (32) | (26) |
| Amortization, unlocking and true-up of DAC3 | (912) | (530) |
1 As per Interim Group Management Report.
2 For German Speaking Countries, policyholder participation on revaluation of DAC/URR capitalization/ amortization.
3 As per notes to the condensed consolidated interim financial statements.
| € mn | ||
|---|---|---|
| three months ended 31 March | 2015 | 2014 |
| Acquisition expenses and commissions1 | (1,249) | (1,151) |
| Administrative and other expenses1 | (410) | (370) |
| Capitalization of DAC1 | 457 | 446 |
| Amortization, unlocking and true-up of DAC1 | (438) | (257) |
| Acquisition and administrative expenses | (1,640) | (1,332) |
| Definitions | 6 | 153 |
| Scope | (115) | (102) |
| Commissions and profit received on reinsurance business ceded |
26 | 24 |
| Administrative expenses on reinsurance business ceded |
2 | 3 |
| Acquisition and administrative expenses (net)2, 3 |
(1,722) | (1,254) |
1 As per Interim Group Management Report.
2 As per notes to the condensed consolidated interim financial statements.
3 Excluding one-off effect from pension revaluation. For further details, please refer to note 4 to the condensed consolidated interim financial statements.
Pages 40 – 90
| 64 | 5 Financial assets carried at fair value through income |
|---|---|
| 64 | 6 Investments |
| 66 | 7 Loans and advances to banks and customers |
| 66 | 8 Reinsurance assets |
| 66 | 9 Deferred acquisition costs |
| 66 | 10 Other assets |
| 67 | 11 Non-current assets and disposal groups classified as held for sale |
| 67 | 12 Intangible assets |
| 68 | 13 Financial liabilities carried at fair value through income |
| 68 | 14 Liabilities to banks and customers |
| 69 | 15 Reserves for loss and loss adjustment expenses |
| 70 | 16 Reserves for insurance and investment contracts |
| 70 | 17 Other liabilities |
| B | Condensed Consolidated Interim Financial Statements | |||
|---|---|---|---|---|
| 41 Consolidated Balance Sheets | 43 Consolidated Statements of | 44 Consolidated Statements of Changes | 45 Consolidated Statements of Cash Flows | |
| 42 Consolidated Income Statements | Comprehensive Income | in Equity | 47 Notes |
€ mn
| note | as of 31 March 2015 |
as of 31 December 2014 |
|
|---|---|---|---|
| ASSETS | |||
| Cash and cash equivalents | 14,589 | 13,863 | |
| Financial assets carried at fair value through income | 5 | 7,144 | 5,875 |
| Investments | 6 | 535,638 | 486,445 |
| Loans and advances to banks and customers | 7 | 118,367 | 117,075 |
| Financial assets for unit-linked contracts | 106,163 | 94,564 | |
| Reinsurance assets | 8 | 15,127 | 13,587 |
| Deferred acquisition costs | 9 | 22,874 | 22,262 |
| Deferred tax assets | 1,139 | 1,046 | |
| Other assets | 10 | 42,812 | 37,080 |
| Non-current assets and assets of disposal groups classified as held for sale | 11 | 144 | 235 |
| Intangible assets | 12 | 14,316 | 13,755 |
| Total assets | 878,313 | 805,787 |
| Financial liabilities carried at fair value through income | 13 | 9,824 | 8,496 |
|---|---|---|---|
| Liabilities to banks and customers | 14 | 26,043 | 23,015 |
| Unearned premiums | 25,361 | 19,800 | |
| Reserves for loss and loss adjustment expenses | 15 | 72,234 | 68,989 |
| Reserves for insurance and investment contracts | 16 | 498,848 | 463,334 |
| Financial liabilities for unit-linked contracts | 106,163 | 94,564 | |
| Deferred tax liabilities | 6,402 | 4,932 | |
| Other liabilities | 17 | 40,632 | 38,609 |
| Liabilities of disposal groups classified as held for sale | 11 | 102 | 102 |
| Certificated liabilities | 18 | 8,487 | 8,207 |
| Subordinated liabilities | 19 | 12,716 | 12,037 |
| Total liabilities | 806,813 | 742,085 | |
| Shareholders' equity | 68,397 | 60,747 | |
| Non-controlling interests | 3,103 | 2,955 | |
| Total equity | 20 | 71,501 | 63,702 |
| Total liabilities and equity | 878,313 | 805,787 |
| € mn | |||
|---|---|---|---|
| three months ended 31 March | note | 2015 | 2014 |
| Gross premiums written | 24,275 | 21,811 | |
| Ceded premiums written | (1,610) | (1,362) | |
| Change in unearned premiums | (4,393) | (3,763) | |
| Premiums earned (net) | 21 | 18,272 | 16,686 |
| Interest and similar income | 22 | 5,404 | 5,139 |
| Income from financial assets and liabilities carried at fair value through income (net) | 23 | 559 | (319) |
| Realized gains/losses (net) | 24 | 2,837 | 906 |
| Fee and commission income | 25 | 2,644 | 2,408 |
| Other income | 26 | 77 | 78 |
| Income from fully consolidated private equity investments | 27 | 171 | 169 |
| Total income | 29,964 | 25,067 | |
| Claims and insurance benefits incurred (gross) | (13,345) | (12,332) | |
| Claims and insurance benefits incurred (ceded) | 541 | 523 | |
| Claims and insurance benefits incurred (net) | 28 | (12,804) | (11,809) |
| Change in reserves for insurance and investment contracts (net) | 29 | (6,139) | (3,440) |
| Interest expenses | 30 | (315) | (302) |
| Loan loss provisions | 31 | (8) | (9) |
| Impairments of investments (net) | 32 | (109) | (362) |
| Investment expenses | 33 | (238) | (199) |
| Acquisition and administrative expenses (net) | 34 | (6,296) | (5,330) |
| Fee and commission expenses | 35 | (942) | (782) |
| Amortization of intangible assets | (32) | (24) | |
| Restructuring charges | (90) | 1 | |
| Other expenses | 36 | (28) | (30) |
| Expenses from fully consolidated private equity investments | 27 | (169) | (174) |
| Total expenses | (27,170) | (22,461) | |
| Income before income taxes | 2,794 | 2,607 | |
| Income taxes | 37 | (858) | (867) |
| Net income | 1,937 | 1,740 | |
| Net income attributable to: | |||
| Non-controlling interests | 115 | 100 | |
| Shareholders | 1,822 | 1,640 | |
| Basic earnings per share (€) | 39 | 4.01 | 3.62 |
| Diluted earnings per share (€) | 39 | 4.00 | 3.55 |
44 Consolidated Statements of Changes in Equity
| € mn | ||
|---|---|---|
| three months ended 31 March | 2015 | 2014 |
| Net income | 1,937 | 1,740 |
| Other comprehensive income | ||
| Items that may be reclassified to profit or loss in future periods | ||
| Foreign currency translation adjustments | ||
| Reclassifications to net income | – | – |
| Changes arising during the period | 1,853 | 17 |
| Subtotal | 1,853 | 17 |
| Available-for-sale investments | ||
| Reclassifications to net income | (507) | (94) |
| Changes arising during the period | 4,704 | 2,313 |
| Subtotal | 4,197 | 2,219 |
| Cash flow hedges | ||
| Reclassifications to net income | (1) | (2) |
| Changes arising during the period | 91 | 5 |
| Subtotal | 89 | 4 |
| Share of other comprehensive income of associates and joint ventures | ||
| Reclassifications to net income | – | – |
| Changes arising during the period | 128 | 9 |
| Subtotal | 128 | 9 |
| Miscellaneous | ||
| Reclassifications to net income | – | – |
| Changes arising during the period | (1) | (29) |
| Subtotal | (1) | (29) |
| Items that may never be reclassified to profit or loss | ||
| Actuarial gains and losses on defined benefit plans | (384) | (357) |
| Total other comprehensive income | 5,883 | 1,863 |
| Total comprehensive income | 7,820 | 3,603 |
| Non-controlling interests | 177 | 142 |
|---|---|---|
| Shareholders | 7,643 | 3,462 |
For further details concerning income taxes relating to components of the other comprehensive income, please see note 37.
| € mn | |||||||
|---|---|---|---|---|---|---|---|
| Paid-in capital | Retained earnings |
Foreign currency translation adjustments |
Unrealized gains and losses (net) |
Shareholders' equity |
Non controlling interests |
Total equity | |
| Balance as of 1 January 2014 | 28,869 | 17,786 | (3,313) | 6,742 | 50,083 | 2,765 | 52,849 |
| Total comprehensive income1 | – | 1,262 | 15 | 2,185 | 3,462 | 142 | 3,603 |
| Paid-in capital | – | – | – | – | – | – | – |
| Treasury shares | – | 2 | – | – | 2 | – | 2 |
| Transactions between equity holders | – | (23) | 1 | – | (22) | 6 | (16) |
| Dividends paid | – | – | – | – | – | (78) | (78) |
| Balance as of 31 March 2014 | 28,869 | 19,026 | (3,297) | 8,926 | 53,525 | 2,835 | 56,360 |
| Balance as of 1 January 2015 | 28,928 | 19,878 | (1,977) | 13,917 | 60,747 | 2,955 | 63,702 |
| Total comprehensive income1 | – | 1,606 | 1,757 | 4,280 | 7,643 | 177 | 7,820 |
| Paid-in capital | – | – | – | – | – | – | – |
| Treasury shares | – | 3 | – | – | 3 | – | 3 |
| Transactions between equity holders | – | 5 | – | – | 5 | 45 | 50 |
| Dividends paid | – | – | – | – | – | (74) | (74) |
| Balance as of 31 March 2015 | 28,928 | 21,491 | (219) | 18,197 | 68,397 | 3,103 | 71,501 |
1 Total comprehensive income in shareholders' equity for the three months ended 31 March 2015 comprises net income attributable to shareholders of € 1,822 mn (2014: € 1,640 mn).
41 Consolidated Balance Sheets 42 Consolidated Income Statements 43 Consolidated Statements of Comprehensive Income
44 Consolidated Statements of Changes in Equity
| € mn three months ended 31 March |
2015 | 2014 |
|---|---|---|
| Summary | ||
| Net cash flow provided by operating activities | 10,110 | 11,818 |
| Net cash flow used in investing activities | (9,373) | (8,593) |
| Net cash flow used in financing activities | (819) | (2,262) |
| Effect of exchange rate changes on cash and cash equivalents | 808 | (2) |
| Change in cash and cash equivalents | 726 | 960 |
| Cash and cash equivalents at beginning of period | 13,863 | 11,207 |
| Cash and cash equivalents at end of period | 14,589 | 12,167 |
| Cash flow from operating activities | ||
| Net income | 1,937 | 1,740 |
| Adjustments to reconcile net income to net cash flow provided by operating activities | ||
| Share of earnings from investments in associates and joint ventures | (78) | (37) |
| 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 |
(2,728) | (544) |
| Other investments, mainly financial assets held for trading and designated at fair value through income | 1,414 | 115 |
| Depreciation and amortization | 351 | 278 |
| Loan loss provisions | 8 | 9 |
| Interest credited to policyholder accounts | 1,364 | 1,060 |
| Net change in: | ||
| Financial assets and liabilities held for trading | (1,759) | 632 |
| Reverse repurchase agreements and collateral paid for securities borrowing transactions | (222) | 240 |
| Repurchase agreements and collateral received from securities lending transactions | 2,184 | 352 |
| Reinsurance assets | (585) | (351) |
| Deferred acquisition costs | (553) | (767) |
| Unearned premiums | 4,918 | 4,069 |
| Reserves for loss and loss adjustment expenses | 1,147 | (131) |
| Reserves for insurance and investment contracts | 7,481 | 6,038 |
| Deferred tax assets/liabilities | 240 | (49) |
| Other (net) | (5,008) | (836) |
| Subtotal | 8,174 | 10,078 |
| Net cash flow provided by operating activities | 10,110 | 11,818 |
| € mn three months ended 31 March |
2015 | 2014 |
|---|---|---|
| Cash flow from investing activities | ||
| Proceeds from the sale, maturity or repayment of: | ||
| Financial assets designated at fair value through income | 305 | 154 |
| Available-for-sale investments | 41,388 | 32,800 |
| Held-to-maturity investments | 812 | 203 |
| Investments in associates and joint ventures | 212 | 151 |
| Non-current assets and disposal groups classified as held for sale | 120 | 16 |
| Real estate held for investment | 104 | 65 |
| Loans and advances to banks and customers (purchased loans) | 2,934 | 2,940 |
| Property and equipment | 36 | 45 |
| Subtotal | 45,911 | 36,375 |
| Payments for the purchase or origination of: | ||
| Financial assets designated at fair value through income | (393) | (241) |
| Available-for-sale investments | (51,161) | (41,342) |
| Held-to-maturity investments | (791) | (159) |
| Investments in associates and joint ventures | (232) | (298) |
| Non-current assets and disposal groups classified as held for sale | – | (7) |
| Real estate held for investment | (361) | (266) |
| Loans and advances to banks and customers (purchased loans) | (1,187) | (1,393) |
| Property and equipment | (336) | (308) |
| Subtotal | (54,461) | (44,015) |
| Business combinations (note 3)1: | ||
| 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) | (891) | (925) |
| Other (net) | 69 | (28) |
| Net cash flow used in investing activities | (9,373) | (8,593) |
| Cash flow from financing activities | ||
| Net change in liabilities to banks and customers | 126 | (1,063) |
| Proceeds from the issuance of certificated liabilities and subordinated liabilities | 838 | 896 |
| Repayments of certificated liabilities and subordinated liabilities | (1,700) | (1,980) |
| Cash inflow from capital increases Transactions between equity holders |
– 50 |
– (16) |
| Dividends paid to shareholders | (74) | (78) |
| Net cash from sale or purchase of treasury shares | 4 | 2 |
| Other (net) | (63) | (23) |
| Net cash flow used in financing activities | (819) | (2,262) |
| Supplementary information on the consolidated statements of cash flows | ||
| Income taxes paid | (432) | (448) |
| Dividends received | 323 | 298 |
| Interest received | 5,284 | 5,270 |
| Interest paid | (440) | (521) |
1 The consideration for the Property-Casualty business of the Territory Insurance Office (TIO) in Darwin has already been paid in 2014 and was therefore included in the consolidated statement of cash flows for the year ended 31 December 2014. As a consequence, the cash flow for the three months ended 31 March 2015 included in the line "Acquisition of subsidiaries, net of cash acquired" is not reconcilable with note 3.
44 Consolidated Statements of Changes in Equity
45 Consolidated Statements of Cash Flows 47 Notes
The condensed consolidated interim financial statements of the Allianz Group – 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 – are presented in accordance with the requirements of IAS 34, Interim Financial Reporting, and have been prepared in conformity with International Financial Reporting Standards (IFRSs), as adopted under European Union (E.U.) regulations in accordance with §315a of the German Commercial Code (HGB). IFRSs comprise the International Financial Reporting Standards (IFRSs), the International Accounting Standards (IASs) and the interpretations developed by the IFRS Interpretations Committee (formerly called the IFRIC) or the former Standing Interpretations Committee (SIC).
Within these condensed consolidated interim financial statements, the Allianz Group has applied all IFRSs issued by the IASB that are endorsed by the E.U. and are compulsory as of 1 January 2015. For further information please see note 2.
For existing and unchanged IFRSs, the accounting policies for recognition, measurement, consolidation and presentation applied in the preparation of the condensed consolidated interim financial statements are consistent with the accounting policies that have been applied in the preparation of the consolidated financial statements for the year ended 31 December 2014. These condensed consolidated interim financial statements should be read in conjunction with the audited consolidated financial statements included in the Allianz Group Annual Report 2014.
IFRSs do not provide specific guidance concerning all aspects of the recognition and measurement of insurance contracts, reinsurance contracts and investment contracts with discretionary participation features. Therefore, as envisioned in IAS 8, Accounting Policies, Changes in Accounting Estimates and Errors, to those aspects where specific guidance is not provided by IFRS 4, Insurance Contracts, the provisions embodied under accounting principles generally accepted in the United States of America (US GAAP) as at first-time adoption of IFRS 4 on 1 January 2005 have been applied.
The condensed consolidated interim financial statements are presented in millions of Euros (€ mn), unless otherwise stated. Due to rounding, numbers presented may not add up precisely to the totals provided and percentages may not precisely reflect the absolute figures. Previously published figures have been adjusted accordingly.
These condensed consolidated interim financial statements of the Allianz Group were authorized for issue by the Board of Management on 11 May 2015.
effective 1 January 2015
The following interpretation as well as the amendments and revisions to existing standards became effective for the Allianz Group's consolidated financial statements as of 1 January 2015:
No material impact arose on the financial results or the financial position of the Allianz Group.
Effective 1 January 2015, the Allianz Group acquired the Property-Casualty insurance business of the Territory Insurance Office (TIO Business), Darwin, and entered into a 10-year agreement to manage the compulsory motor accidents compensation scheme (MAC Contract). The acquired TIO Business includes, inter alia, all relevant insurance assets and liabilities, operations, employees and the brand related to the TIO Business.
The acquired TIO Business represents insurance activities with premiums equal to approximately € 88 mn (for the year 2014). As a result of the acquisition, the Allianz Group expects to increase its presence in the Australian market. It also expects to reduce costs through economies of scale and through synergies in the reinsurance area.
The final consideration paid in cash amounts to € 150 mn.
The following table summarizes the recognized amounts of assets acquired and liabilities assumed related to the TIO Business and the MAC Contract:
| € mn | |
|---|---|
| Fair value | |
| Cash and cash equivalents | 11 |
| Financial assets carried at fair value through income | 79 |
| Investments | 50 |
| Loans and advances to banks and customers | 2 |
| Reinsurance assets | 32 |
| Deferred tax assets | 2 |
| Other assets | 72 |
| Intangible assets | 37 |
| Total assets | 285 |
| Unearned premiums | (45) |
| Reserves for insurance and investment contracts | (107) |
| Deferred tax liabilities | (18) |
| Other liabilities | (13) |
| Total liabilities | (183) |
| Total net identifiable assets | 102 |
Intangible assets consist mainly of the fair values of the MAC Contract, the TIO brand name, the customer relationships related to the acquired insurance portfolio and the present value of the transferred in-force business.
The fair values of other assets, intangible assets, deferred taxes and goodwill are provisional due to pending receipt of the final valuations for those assets.
The acquired TIO Business comprises a preliminary goodwill which was determined as follows as of 1 January 2015:
| Fair value |
|---|
| 150 |
| 102 |
| 48 |
The goodwill of € 48 mn of the business combination largely reflects the benefits associated with cost and reinsurance synergies and the ability to revert to an existing infrastructure in a new geographical market.
None of this goodwill is expected to be deductible for income tax purposes.
In administrative expenses, acquisition-related costs in the amount of € 1 mn were included in fiscal year 2014 and in the amount of € 3 mn in fiscal year 2015.
The impact of the acquired Property-Casualty insurance business of the Territory Insurance Office on the Allianz Group's total revenues and net income since the acquisition was € 17 mn and € (1) mn, respectively.
Comprehensive Income
44 Consolidated Statements of Changes in Equity
The business activities of the Allianz Group are first organized by product and type of service: insurance activities, asset management activities and corporate and other activities. Due to differences in the nature of products, risks and capital allocation, insurance activities are further divided into the business segments Property-Casualty and Life/Health. In accordance with the responsibilities of the Board of Management, each of the insurance business segments is grouped into the following reportable segments:
Asset management activities represent a separate reportable segment. Due to differences in the nature of products, risks and capital allocation, corporate and other activities are divided into three reportable segments: Holding&Treasury, Banking and Alternative Investments. In total, the Allianz Group has identified 16 reportable segments in accordance with IFRS 8, Operating Segments.
The types of products and services from which the reportable segments derive revenue are described below.
In the business segment Property-Casualty, reportable segments offer a wide variety of insurance products to both private and corporate customers, including motor liability and own damage, accident, general liability, fire and property, legal expense, credit and travel insurance.
In the business segment Life/Health, reportable segments offer a comprehensive range of life and health insurance products on both an individual and a group basis, including annuities, endowment and term insurance, unit-linked and investment-oriented products, as well as full private health, supplemental health and long-term care insurance.
The reportable segment Asset Management operates as a global provider of institutional and retail asset management products and services to third-party investors and provides investment management services to the Allianz Group's insurance operations. The products for retail and institutional customers include equity and fixedincome funds as well as alternative products. The United States and Germany as well as France, Italy and the Asia-Pacific region represent the primary asset management markets.
The reportable segment Holding&Treasury includes the management and support of the Allianz Group's businesses through its strategy, risk, corporate finance, treasury, financial reporting, controlling, communication, legal, human resources, technology and other functions. The reportable segment Banking consists of the banking activities in Germany, France, Italy, the Netherlands and Bulgaria. The banks offer a wide range of products for corporate and retail clients, with a primary focus on the latter. The reportable segment Alternative Investments provides global alternative investment management services in the private equity, real estate, renewable energy and infrastructure sectors, mainly on behalf of the Allianz Group's insurance operations. The reportable segment Alternative Investments also includes a fully consolidated private equity investment. The income and expenses of this investment are included in the non-operating result.
Prices for transactions between reportable segments are set on an arm's length basis in a manner similar to transactions with third parties. Transactions between reportable segments are eliminated in the Consolidation. For the reportable segment Asset Management, interest revenues are reported net of interest expenses. Financial information is recorded based on reportable segments. Cross-segmental country-specific information is not determined.
The Allianz Group uses operating profit to evaluate the performance of its reportable segments and the Allianz Group as a whole. Operating profit highlights the portion of income before income taxes attributable to the ongoing core operations of the Allianz Group. The Allianz Group considers the presentation of operating profit to be useful and meaningful to investors because it enhances the understanding of the Allianz Group's underlying operating performance and the comparability of its operating performance over time.
To better understand the ongoing operations of the business, the Allianz Group generally excludes the following non-operating effects:
income at Allianz SE are shown as non-operating items. In case of policyholder participation within the Life/Health insurance business, the one-off expenses and the corresponding one-off income at Allianz SE are presented within operating profit. On the Allianz Group level, the one-off expenses and income offset each other. The only impact on the Allianz Group level is the related policyholder participation, which had a positive impact on income before income taxes of € 148 mn in 2015 and of € 116 mn in 2014.
The following exceptions apply to this general rule:
Operating profit should be viewed as complementary to, and not as a substitute for, income before income taxes or net income as determined in accordance with IFRS.
Effective 1 January 2015, the Allianz Group reorganized the structure of its insurance activities to reflect the changes in the responsibilities of the Board of Management. The property-casualty insurance operations of the former reportable segment USA have been allocated to the reportable segment Global Insurance Lines&Anglo Markets. Furthermore, Australia has been reallocated from the reportable segment Global Insurance Lines&Anglo Markets to the reportable segment Growth Markets. Previously reported information has been adjusted to reflect this change in the composition of the Allianz Group's reportable segments.
Consolidated Balance Sheets Consolidated Income Statements Consolidated Statements of Comprehensive Income Consolidated Statements of Changes in Equity Consolidated Statements of Cash Flows Notes
| Life/Health | |||
|---|---|---|---|
| as of 31 March 2015 |
as of 31 December 2014 |
as of 31 March 2015 |
as of 31 December 2014 |
| 4,026 | 3,668 | 7,901 | 7,555 |
| 532 | 601 | 6,399 | 5,238 |
| 103,378 | 97,129 | 414,048 | 374,589 |
| 14,843 | 14,963 | 92,514 | 91,411 |
| – | – | 106,163 | 94,564 |
| 9,480 | 8,466 | 5,729 | 5,176 |
| 5,195 | 4,595 | 17,679 | 17,667 |
| 1,108 | 1,013 | 339 | 240 |
| 25,868 | 23,494 | 19,163 | 18,723 |
| 61 | 61 | – | 92 |
| 2,848 | 2,722 | 3,087 | 3,063 |
| 167,338 | 156,710 | 673,021 | 618,318 |
| Property-Casualty |
€ mn Property-Casualty Life/Health Asset Management Corporate and Other Consolidation Group as of 31 March 2015 as of 31 December 2014 as of 31 March 2015 as of 31 December 2014 LIABILITIES AND EQUITY Financial liabilities carried at fair value through income 94 129 9,485 8,240 – – 703 648 (457) (521) 9,824 8,496 Liabilities to banks and customers 1,166 878 5,543 4,273 174 174 22,575 20,749 (3,415) (3,057) 26,043 23,015 Unearned premiums 22,071 16,595 3,328 3,222 – – – – (38) (17) 25,361 19,800 Reserves for loss and loss adjustment expenses 61,805 58,925 10,453 10,081 – – – – (23) (18) 72,234 68,989 Reserves for insurance and investment contracts 14,892 14,276 484,161 449,263 – – – – (204) (205) 498,848 463,334 Financial liabilities for unit-linked contracts – – 106,163 94,564 – – – – – – 106,163 94,564 Deferred tax liabilities 2,864 2,681 5,503 4,226 1 2 282 189 (2,248) (2,167) 6,402 4,932 Other liabilities 17,644 19,445 13,768 13,739 2,396 2,231 27,751 28,028 (20,927) (24,834) 40,632 38,609 Liabilities of disposal groups classified as held for sale – – – – – – 102 102 – – 102 102 Certificated liabilities 14 38 14 13 – – 12,233 12,231 (3,773) (4,075) 8,487 8,207 Subordinated liabilities – – 95 95 – – 12,671 11,992 (50) (50) 12,716 12,037 Total liabilities 120,550 112,969 638,512 587,714 2,571 2,407 76,316 73,938 (31,137) (34,943) 806,813 742,085
| B | Condensed Consolidated Interim Financial Statements | |||
|---|---|---|---|---|
| 41 Consolidated Balance Sheets | 43 Consolidated Statements of | 44 Consolidated Statements of Changes | 45 Consolidated Statements of Cash Flows | |
| 42 Consolidated Income Statements | Comprehensive Income | in Equity | 47 Notes |
| Asset Management | Corporate and Other | Consolidation | Group | |||||
|---|---|---|---|---|---|---|---|---|
| as of 31 March 2015 |
as of 31 December 2014 |
as of 31 March 2015 |
as of 31 December 2014 |
as of 31 March 2015 |
as of 31 December 2014 |
as of 31 March 2015 |
as of 31 December 2014 |
|
| 1,346 | 1,449 | 2,277 | 2,028 | (961) | (838) | 14,589 | 13,863 | |
| 45 | 46 | 629 | 511 | (461) | (521) | 7,144 | 5,875 | |
| 156 | 106 | 111,061 | 108,669 | (93,005) | (94,048) | 535,638 | 486,445 | |
| 83 | 72 | 17,775 | 17,547 | (6,848) | (6,917) | 118,367 | 117,075 | |
| – | – | – | – | – | – | 106,163 | 94,564 | |
| – | – | – | – | (81) | (55) | 15,127 | 13,587 | |
| – | – | – | – | – | – | 22,874 | 22,262 | |
| 371 | 177 | 1,569 | 1,782 | (2,248) | (2,167) | 1,139 | 1,046 | |
| 2,585 | 2,951 | 8,130 | 8,595 | (12,935) | (16,684) | 42,812 | 37,080 | |
| – | – | 83 | 83 | – | – | 144 | ||
| 7,704 | 7,286 | 678 | 685 | – | – | 14,316 | 13,755 | |
| 12,291 | 12,087 | 142,201 | 139,900 | (116,538) | (121,229) | 878,313 | 805,787 | |
| Group | Consolidation | Asset Management Corporate and Other |
||||||
|---|---|---|---|---|---|---|---|---|
| as of 31 March 31 December 2015 |
as of 31 December 2014 |
as of 31 March 2015 |
as of 31 December 2014 |
as of 31 March 2015 |
as of 31 December 2014 |
as of 31 March 2015 |
||
| 9,824 | (521) | (457) | 648 | 703 | – | – | ||
| 26,043 | (3,057) | (3,415) | 20,749 | 22,575 | 174 | 174 | ||
| 25,361 | (17) | (38) | – | – | – | – | ||
| 72,234 | (18) | (23) | – | – | – | – | ||
| 498,848 | (205) | (204) | – | – | – | – | ||
| 106,163 | – | – | – | – | – | – | ||
| 6,402 | (2,167) | (2,248) | 189 | 282 | 2 | 1 | ||
| 40,632 | (24,834) | (20,927) | 28,028 | 27,751 | 2,231 | 2,396 | ||
| 102 | – | – | 102 | 102 | – | – | ||
| 8,487 | (4,075) | (3,773) | 12,231 | 12,233 | – | – | ||
| 12,716 | (50) | (50) | 11,992 | 12,671 | – | – | ||
| 806,813 | (34,943) | (31,137) | 73,938 | 76,316 | 2,407 | 2,571 | ||
| 71,501 | Total equity | |||||||
| 878,313 | Total liabilities and equity |
| € mn | ||||
|---|---|---|---|---|
| Property-Casualty | Life/Health | |||
| three months ended 31 March | 2015 | 2014 | 2015 | 2014 |
| Total revenues1 | 17,339 | 15,217 | 18,822 | 17,163 |
| Premiums earned (net) | 11,519 | 10,410 | 6,753 | 6,276 |
| Operating investment result | ||||
| Interest and similar income | 865 | 853 | 4,426 | 4,159 |
| Operating income from financial assets and liabilities carried at fair value | ||||
| through income (net) | 62 | 14 | 585 | (268) |
| Operating realized gains/losses (net) | 80 | 26 | 2,438 | 827 |
| Interest expenses, excluding interest expenses from external debt | (22) | (13) | (27) | (25) |
| Operating impairments of investments (net) | (2) | (5) | (87) | (291) |
| Investment expenses | (75) | (69) | (227) | (195) |
| Subtotal | 908 | 807 | 7,108 | 4,207 |
| Fee and commission income | 357 | 307 | 347 | 229 |
| Other income | 15 | 29 | 63 | 49 |
| Claims and insurance benefits incurred (net) | (7,651) | (6,727) | (5,154) | (5,081) |
| Change in reserves for insurance and investment contracts (net)2 | (173) | (125) | (5,961) | (3,314) |
| Loan loss provisions | – | – | – | – |
| Acquisition and administrative expenses (net), | ||||
| excluding acquisition-related expenses and one-off effects from pension revaluation | (3,249) | (2,912) | (1,722) | (1,254) |
| Fee and commission expenses | (344) | (291) | (151) | (87) |
| Operating amortization of intangible assets | – | – | (5) | (5) |
| Restructuring charges | (90) | (1) | – | – |
| Other expenses | (6) | (6) | (174) | (140) |
| Reclassification of tax benefits | – | – | – | – |
| Operating profit (loss) | 1,285 | 1,489 | 1,104 | 880 |
| Non-operating investment result | ||||
| Non-operating income from financial assets and liabilities carried at fair value through income (net) |
(18) | (59) | (50) | – |
| Non-operating realized gains/losses (net) | 228 | 83 | 36 | 26 |
| Non-operating impairments of investments (net) | (17) | (57) | (2) | (5) |
| Subtotal | 193 | (33) | (17) | 20 |
| Income from fully consolidated private equity investments (net) | – | – | – | – |
| Interest expenses from external debt | – | – | – | – |
| Acquisition-related expenses | – | – | – | – |
| One-off effects from pension revaluation | (181) | (537) | (13) | (7) |
| Non-operating amortization of intangible assets | (13) | (6) | (10) | (8) |
| Reclassification of tax benefits | – | – | – | – |
| Non-operating items | – | (576) | (39) | 4 |
| Income (loss) before income taxes | 1,284 | 913 | 1,065 | 884 |
| Income taxes | (362) | (268) | (326) | (255) |
| Net income (loss) | 922 | 645 | 739 | 629 |
| Net income (loss) attributable to: | ||||
| Non-controlling interests | 52 | 44 | 40 | 31 |
| Shareholders | 870 | 601 | 699 | 598 |
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 three months ended 31 March 2015, includes expenses for premium refunds (net) in Property-Casualty of € (109) mn (2014: € (59) mn).
| B | Condensed Consolidated Interim Financial Statements | |||
|---|---|---|---|---|
| 41 Consolidated Balance Sheets | 43 Consolidated Statements of | 44 Consolidated Statements of Changes | 45 Consolidated Statements of Cash Flows | |
| 42 Consolidated Income Statements | Comprehensive Income | in Equity | 47 Notes |
| Life/Health Asset Management |
Corporate and Other | Consolidation | Group | ||||
|---|---|---|---|---|---|---|---|
| 2015 2014 2015 |
2014 | 2015 | 2014 | 2015 | 2014 | 2015 | 2014 |
| 18,822 17,163 1,573 |
1,517 | 140 | 139 | (103) | (72) | 37,769 | 33,963 |
| 6,276 – |
– | – | – | – | – | 18,272 | 16,686 |
| 4,159 2 |
2 | 193 | 208 | (82) | (83) | 5,404 | 5,139 |
| (268) 5 827 |
(1) | 10 | 2 | 21 | 3 | 683 | (250) |
| – | – | – | – | 1 | (73) | 2,519 | 780 (98) |
| (3) | (3) | (130) | (144) | 78 | 86 | (103) | |
| (291) – (195) – |
– – |
– (18) |
– (15) |
– 82 |
– 81 |
(89) (238) |
(296) (199) |
| 4,207 4 |
(2) | 55 | 50 | 101 | 15 | 8,176 | 5,077 |
| 229 1,940 |
1,861 | 200 | 167 | (199) | (155) | 2,644 | |
| 1 | 2 | 148 | – | (150) | (2) | 77 | |
| 49 (5,081) – |
– | – | – | 2 | – | (12,804) | (11,809) |
| (3,314) – |
– | – | – | (5) | (1) | (6,139) | |
| – – |
– | (8) | (9) | – | – | (8) | (3,440) |
| (1,254) (1,018) |
(873) | (322) | (296) | 7 | (116) | (6,303) | |
| (87) (373) |
(345) | (174) | (134) | 100 | 75 | (942) | |
| (5) – |
– | – | – | – | – | (5) | |
| – – |
2 | – | – | – | – | (90) | |
| – | – | (1) | – | 153 | 116 | (28) | |
| – | – | – | – | 5 | – | 5 | |
| 555 | 646 | (101) | (222) | 13 | (69) | 2,855 | |
| – – |
– | (40) | (6) | (17) | (4) | (124) | |
| 26 – |
– | 55 | 18 | – | – | 318 | |
| (5) – |
– | – | (3) | – | – | (20) | |
| – | – | 15 | 8 | (17) | (4) | 174 | |
| – | – | 3 | (6) | (1) | 2 | 2 | |
| – – |
– | (212) | (205) | – | – | (212) | |
| – 7 (7) |
3 | 1 | 2 | – | – | 7 | |
| (31) | (14) | 224 | 675 | – | – | – | |
| (8) (3) |
(3) | (2) | (2) | – | – | (28) | |
| – – 4 (27) |
– (14) |
– 27 |
– 472 |
(5) (23) |
– (2) |
(5) (61) |
|
| 528 | 631 | (74) | 249 | (9) | (71) | 2,794 | |
| (199) | (225) | 25 | (118) | 5 | – | (858) | |
| 629 329 |
406 | (49) | 131 | (4) | (71) | 1,937 | |
| 31 17 |
22 | 6 | 4 | – | – | 115 | |
| 598 312 |
385 | (55) | 127 | (5) | (71) | 1,822 |
€ mn
| German Speaking Countries | Western&Southern Europe | |||
|---|---|---|---|---|
| three months ended 31 March | 2015 | 2014 | 2015 | 2014 |
| Gross premiums written | 5,640 | 5,384 | 3,499 | 3,164 |
| Ceded premiums written | (843) | (817) | (297) | (245) |
| Change in unearned premiums | (2,261) | (2,119) | (490) | (467) |
| Premiums earned (net) | 2,535 | 2,448 | 2,711 | 2,453 |
| Interest and similar income | 269 | 282 | 195 | 194 |
| Operating income from financial assets and liabilities carried at fair value through income (net) | 45 | 4 | (2) | 1 |
| Operating realized gains/losses (net) | 80 | 26 | – | – |
| Fee and commission income | 33 | 29 | 21 | 10 |
| Other income | 11 | 9 | 3 | 2 |
| Operating revenues | 2,974 | 2,798 | 2,928 | 2,659 |
| Claims and insurance benefits incurred (net) | (1,804) | (1,599) | (1,717) | (1,562) |
| Change in reserves for insurance and investment contracts (net) | (158) | (106) | (10) | (13) |
| Interest expenses | (6) | (3) | (4) | (4) |
| Operating impairments of investments (net) | (2) | (5) | – | – |
| Investment expenses | (22) | (23) | (23) | (22) |
| Acquisition and administrative expenses (net), excluding one-off effects from pension revaluation | (636) | (625) | (739) | (649) |
| Fee and commission expenses | (31) | (27) | (19) | (10) |
| Restructuring charges | – | – | – | – |
| Other expenses | (5) | (4) | (1) | (1) |
| Operating expenses | (2,665) | (2,391) | (2,513) | (2,260) |
| Operating profit | 309 | 407 | 415 | 399 |
| Non-operating income from financial assets and liabilities carried at fair value through income (net) | (41) | (25) | 23 | (23) |
| Non-operating realized gains/losses (net) | 136 | 35 | 14 | 18 |
| Non-operating impairments of investments (net) | (13) | (8) | (1) | (44) |
| One-off effects from pension revaluation | (166) | (530) | – | – |
| Amortization of intangible assets | (1) | (1) | (8) | (3) |
| Non-operating items | (85) | (529) | 28 | (52) |
| Income (loss) before income taxes | 224 | (122) | 443 | 347 |
| Income taxes | (44) | 45 | (159) | (124) |
| Net income (loss) | 180 | (76) | 284 | 223 |
| Net income (loss) attributable to: | ||||
| Non-controlling interests | (1) | – | 3 | 5 |
| Shareholders | 181 | (76) | 281 | 217 |
| Loss ratio2 in % | 71.2 | 65.3 | 63.3 | 63.7 |
| Expense ratio3 in % | 25.1 | 25.5 | 27.3 | 26.5 |
| Combined ratio4 in % | 96.3 | 90.8 | 90.6 | 90.1 |
1 In the fourth quarter of 2014, the French International Health business was reclassified from the reportable segment Western&Southern Europe (Life/Health) to the reportable segment Allianz Worldwide Partners. Previously reported information for the three months ended 31 March 2014 was not adjusted.
3 Represents acquisition and administrative expenses (net), excluding one-off effects from pension revaluation, divided by premiums earned (net).
2 Represents claims and insurance benefits incurred (net) divided by premiums earned (net).
4 Represents the total of acquisition and administrative expenses (net), excluding one-off effects from pension revaluation, and claims and insurance benefits incurred (net) divided by premiums earned (net). 5 Presentation not meaningful.
| B | Condensed Consolidated Interim Financial Statements | |||
|---|---|---|---|---|
| 41 Consolidated Balance Sheets | 43 Consolidated Statements of | 44 Consolidated Statements of Changes | 45 Consolidated Statements of Cash Flows | |
| 42 Consolidated Income Statements | Comprehensive Income | in Equity | 47 Notes |
| Global Insurance Lines& Iberia&Latin America Anglo Markets Growth Markets Allianz Worldwide Partners1 |
Consolidation Property-Casualty |
|---|---|
| 2014 2015 2014 2015 2014 2015 2014 |
2015 2014 2015 |
| 1,129 6,023 4,942 1,492 1,490 1,601 785 |
(2,215) (1,679) 17,339 15,217 |
| (169) (1,899) (1,331) (332) (314) (128) (30) |
2,215 1,679 (1,500) (1,227) |
| (44) (745) (708) (23) (61) (664) (180) |
– – (4,320) (3,580) |
| 916 3,380 2,902 1,137 1,115 809 575 |
– – 11,519 10,410 |
| 50 238 232 100 90 11 |
(2) – 865 |
| 8 17 1 – 1 – |
– – 62 |
| – – – – – – |
– – 80 |
| – 111 111 46 52 171 116 |
(25) (11) 357 |
| 17 – – 1 1 – |
– – 15 |
| 990 3,746 3,247 1,283 1,258 992 697 |
(28) (11) 12,898 11,638 |
| (638) (2,113) (1,777) (803) (782) (535) (369) |
– – (7,651) (6,727) |
| (2) (5) (3) 1 (1) – |
– – (173) (125) |
| (1) (12) (4) (1) (1) – |
2 – (22) |
| – – – – – – |
– – (2) |
| (3) (12) (9) (14) (12) – |
– – (75) |
| (233) (1,044) (877) (333) (345) (252) (187) |
6 4 (3,249) (2,912) |
| – (104) (100) (40) (42) (170) (119) |
19 6 (344) (291) |
| – (90) (1) – – – |
– – (90) |
| (1) – – – – – |
– – (6) |
| (878) (3,380) (2,772) (1,190) (1,183) (958) (676) |
28 11 (11,613) (10,149) |
| 113 366 474 93 75 34 21 |
– – 1,285 1,489 |
| 1 (3) (9) 1 (2) – (1) |
– – (18) |
| 3 55 25 17 2 – |
– – 228 |
| (1) (2) (4) – – – |
– – (17) |
| – (13) (7) – – (1) |
– – (181) (537) |
| – (1) (2) (3) (2) – |
– 1 (13) |
| 3 36 4 15 (3) (1) (1) |
– 1 – (576) |
| 116 402 478 108 73 33 20 |
– 1 1,284 |
| (34) (100) (129) (28) (20) (9) (6) |
– – (362) (268) |
| 82 302 349 80 53 24 14 |
– 1 922 |
| 1 41 28 8 9 1 |
– – 52 |
| 81 261 322 73 43 23 14 |
– 1 870 |
| 69.7 62.5 61.2 70.6 70.1 66.1 64.2 |
–5 –5 66.4 |
| 25.5 30.9 30.2 29.3 30.9 31.2 32.5 |
–5 –5 28.2 |
| 95.1 93.4 91.5 100.0 101.1 97.3 96.7 |
–5 –5 94.6 |
€ mn
| German Speaking Countries | Western&Southern Europe1 | |||
|---|---|---|---|---|
| three months ended 31 March | 2015 | 2014 | 2015 | 2014 |
| Statutory premiums2 | 6,827 | 6,856 | 6,935 | 6,127 |
| Ceded premiums written | (30) | (39) | (307) | (596) |
| Change in unearned premiums | 2 | (61) | 14 | (14) |
| Statutory premiums (net) | 6,799 | 6,755 | 6,641 | 5,516 |
| Deposits from insurance and investment contracts | (2,505) | (2,692) | (5,465) | (4,363) |
| Premiums earned (net) | 4,294 | 4,063 | 1,176 | 1,153 |
| Interest and similar income | 2,252 | 2,264 | 893 | 891 |
| Operating income from financial assets and liabilities carried at fair value through income (net) | 894 | 31 | (36) | (49) |
| Operating realized gains/losses (net) | 1,885 | 497 | 515 | 306 |
| Fee and commission income | 21 | 19 | 216 | 118 |
| Other income | 56 | 42 | 7 | 5 |
| Operating revenues | 9,403 | 6,917 | 2,772 | 2,423 |
| Claims and insurance benefits incurred (net) | (3,558) | (3,519) | (965) | (998) |
| Changes in reserves for insurance and investment contracts (net) | (4,337) | (2,266) | (888) | (490) |
| Interest expenses | (19) | (25) | (4) | (5) |
| Operating impairments of investments (net) | (87) | (113) | 1 | (177) |
| Investment expenses | (148) | (128) | (56) | (49) |
| Acquisition and administrative expenses (net), excluding one-off effects from pension revaluation | (553) | (385) | (483) | (420) |
| Fee and commission expenses | (10) | (10) | (110) | (53) |
| Operating amortization of intangible assets | (5) | (5) | – | – |
| Other expenses | (170) | (134) | (4) | (2) |
| Operating expenses | (8,887) | (6,585) | (2,507) | (2,194) |
| Operating profit | 516 | 332 | 265 | 229 |
| Non-operating income from financial assets and liabilities carried at fair value through income (net) | – | – | 2 | (5) |
| Non-operating realized gains/losses (net) | 2 | – | 21 | 25 |
| Non-operating impairments of investments (net) | – | – | (2) | (5) |
| One-off effects from pension revaluation | (13) | (7) | – | – |
| Non-operating amortization of intangible assets | – | – | (3) | (2) |
| Non-operating items | (11) | (7) | 18 | 13 |
| Income before income taxes | 505 | 325 | 283 | 242 |
| Income taxes | (172) | (109) | (83) | (58) |
| Net income | 333 | 216 | 200 | 184 |
| Net income attributable to: | ||||
| Non-controlling interests | – | – | 16 | 9 |
| Shareholders | 333 | 216 | 184 | 175 |
1 In the fourth quarter of 2014, the French International Health business was reclassified from the reportable segment Western&Southern Europe (Life/Health) to the reportable segment Allianz Worldwide Partners. Previously reported information for the three months ended 31 March 2014 was not adjusted.
3 Represents annualized operating profit divided by the average of the current quarter-end and previous year-end net reserves, where net reserves equal reserves for loss and loss adjustment expenses, reserves for insurance and investment contracts and financial liabilities for unit-linked contracts less reinsurance assets.
2 Statutory premiums are gross premiums written from sales of life and health insurance policies, as well as gross receipts from sales of unit-linked and other investment-oriented products, in accordance with the statutory accounting practices applicable in the insurer's home jurisdiction.
4 Presentation not meaningful.
| B | Condensed Consolidated Interim Financial Statements | |||
|---|---|---|---|---|
| 41 Consolidated Balance Sheets | 43 Consolidated Statements of | 44 Consolidated Statements of Changes | 45 Consolidated Statements of Cash Flows | |
| 42 Consolidated Income Statements | Comprehensive Income | in Equity | 47 Notes |
| Iberia&Latin America | USA | Global Insurance Lines& Anglo Markets |
Growth Markets | Consolidation | Life/Health | ||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| 2015 | 2014 | 2015 | 2014 | 2015 | 2014 | 2015 | 2014 | 2015 | 2014 | 2015 | 2014 |
| 577 | 476 | 2,699 | 2,556 | 135 | 126 | 1,988 | 1,616 | (339) | (594) | 18,822 | 17,163 |
| (6) | (4) | (35) | (29) | (16) | (13) | (99) | (74) | 339 | 594 | (154) | (162) |
| (33) | (34) | (8) | (3) | (3) | (31) | (45) | (38) | – | – | (73) | (183) |
| 538 | 438 | 2,655 | 2,524 | 116 | 82 | 1,845 | 1,503 | – | – | 18,595 | 16,818 |
| (390) | (289) | (2,374) | (2,297) | – | – | (1,108) | (901) | – | – | (11,842) | (10,542) |
| 148 | 149 | 281 | 227 | 116 | 82 | 736 | 602 | – | – | 6,753 | 6,276 |
| 90 | 94 | 923 | 692 | 14 | 20 | 264 | 215 | (10) | (16) | 4,426 | 4,159 |
| 16 | 1 | (276) | (245) | (1) | (5) | 5 | (4) | (18) | 3 | 585 | (268) |
| 19 | 4 | 6 | 9 | – | – | 13 | 10 | – | – | 2,438 | |
| 38 | 34 | 27 | 24 | – | – | 43 | 35 | – | – | 347 | 229 |
| – | – | – | – | – | – | – | 2 | – | – | 63 | |
| 311 | 282 | 962 | 706 | 129 | 96 | 1,061 | 860 | (28) | (13) | 14,611 | 11,271 |
| (165) | (139) | (29) | (25) | (69) | (75) | (368) | (325) | – | – | (5,154) | (5,081) |
| (17) | (22) | (398) | (338) | (22) | 15 | (300) | (214) | – | – | (5,961) | (3,314) |
| – | (1) | (3) | (2) | – | – | (11) | (7) | 10 | 16 | (27) | |
| – | – | (1) | – | – | – | – | (1) | – | – | (87) | |
| (2) | (1) | (13) | (9) | – | – | (8) | (7) | – | – | (227) | |
| (51) | (50) | (348) | (158) | (22) | (24) | (265) | (217) | – | – | (1,722) | |
| (21) | (17) | (7) | (5) | – | – | (4) | (3) | – | – | (151) | |
| – | – | – | – | – | – | – | – | – | – | (5) | |
| – | – | – | – | – | – | – | (3) | – | – | (174) | |
| (256) | (230) | (799) | (537) | (113) | (85) | (956) | (778) | 10 | 17 | (13,507) | (10,392) |
| 55 | 52 | 163 | 169 | 16 | 11 | 106 | 83 | (18) | 3 | 1,104 | |
| – | – | (52) | 4 | – | – | – | – | – | – | (50) | |
| – | – | 11 | – | – | – | 1 | 1 | – | – | 36 | |
| – | – | – | – | – | – | – | (1) | – | – | (2) | |
| – | – | – | – | – | – | – | – | – | – | (13) | |
| (4) | (4) | – | – | – | – | (2) | (2) | – | – | (10) | |
| (4) | (4) | (41) | 4 | – | – | (1) | (2) | – | – | (39) | |
| 51 | 48 | 123 | 174 | 16 | 11 | 104 | 81 | (18) | 3 | 1,065 | |
| (13) | (14) | (36) | (54) | (4) | (3) | (18) | (17) | – | – | (326) | |
| 38 | 33 | 86 | 119 | 13 | 8 | 87 | 64 | (18) | 3 | 739 | |
| 10 | 9 | – | – | – | – | 15 | 13 | – | – | 40 | |
| 28 | 24 | 86 | 119 | 13 | 8 | 72 | 51 | (18) | 3 | 699 | |
| 223 | 247 | 68 | 94 | 365 | 229 | 130 | 125 | –4 | –4 | 77 | |
| € mn | ||
|---|---|---|
| three months ended 31 March | 2015 | 2014 |
| Net fee and commission income1 | 1,567 | 1,516 |
| Net interest income2 | (1) | – |
| Income from financial assets and liabilities carried at fair value through income (net) | 5 | (1) |
| Other income | 1 | 2 |
| Operating revenues | 1,573 | 1,517 |
| Administrative expenses (net), excluding acquisition-related expenses and one-off effects from pension revaluation | (1,018) | (873) |
| Restructuring charges | – | 2 |
| Operating expenses | (1,018) | (871) |
| Operating profit | 555 | 646 |
| Acquisition-related expenses | 7 | 3 |
| One-off effects from pension revaluation | (31) | (14) |
| Amortization of intangible assets | (3) | (3) |
| Non-operating items | (27) | (14) |
| Income before income taxes | 528 | 631 |
| Income taxes | (199) | (225) |
| Net income | 329 | 406 |
| Net income attributable to: | ||
| Non-controlling interests | 17 | 22 |
| Shareholders | 312 | 385 |
| Cost-income ratio3 in % | 64.7 | 57.4 |
1 Represents fee and commission income less fee and commission expenses.
2 Represents interest and similar income less interest expenses.
3 Represents operating expenses divided by operating revenues.
Consolidated Balance Sheets Consolidated Income Statements Consolidated Statements of Comprehensive Income Consolidated Statements of Changes in Equity Consolidated Statements of Cash Flows Notes
| € mn | ||||
|---|---|---|---|---|
| Holding&Treasury | Banking | Alternative Investments | ||
| three months ended 31 March | 2015 | 2014 | 2015 2014 |
2015 2014 |
| Interest and similar income | 49 | 54 | 139 | 150 5 |
| Operating income from financial assets and liabilities carried at fair value through income (net) | 6 | – | 6 | 2 (1) |
| Fee and commission income | 13 | 15 | 139 | 116 48 |
| Other income | 148 | – | – | – – |
| Operating revenues | 215 | 69 | 284 | 268 53 |
| Interest expenses, excluding interest expenses from external debt | (71) | (77) | (58) (66) |
– (1) |
| Loan loss provisions | – | – | (8) | (9) – |
| Investment expenses | (16) | (14) | – | – (2) (2) |
| Administrative expenses (net), excluding acquisition-related expenses and one-off effects from pension revaluation | (182) | (155) | (100) (110) |
(40) (31) |
| Fee and commission expenses | (89) | (70) | (85) (65) |
– |
| Other expenses | – | – | (1) | – – |
| Operating expenses | (358) | (316) | (252) (251) |
(43) (33) |
| Operating profit (loss) | (143) | (248) | 32 | 18 10 |
| Non-operating income from financial assets and liabilities carried at fair value through income (net) | (41) | (5) | – | – 1 (1) |
| Realized gains/losses (net) | 48 | 18 | 7 | – – |
| Impairments of investments (net) | – | (3) | – | – – |
| Income from fully consolidated private equity investments (net) | – | – | – | – 3 (6) |
| Interest expenses from external debt | (212) | (205) | – | – – |
| Acquisition-related expenses | 1 | 2 | – | – – |
| One-off effects from pension revaluation | 230 | 679 | (1) | (1) (5) (4) |
| Amortization of intangible assets | (2) | (2) | – | – – |
| Non-operating items | 23 | 484 | 6 | (1) (2) (11) |
| Income (loss) before income taxes | (121) | 236 | 38 | 16 9 (3) |
| Income taxes | 39 | (114) | (12) | (5) (1) |
| Net income (loss) | (82) | 122 | 26 | 11 7 (2) |
| Net income (loss) attributable to: | ||||
| Non-controlling interests | – | – | 2 | 2 4 |
| Shareholders | (82) | 122 | 23 | 9 4 (4) |
| Cost-income ratio1 for the reportable segment Banking in % | 71.7 | 80.7 | ||
1 Represents investment expenses, administrative expenses (net), excluding acquisition-related expenses and one-off effects from pension revaluation, restructuring charges and other expenses divided by interest and similar income, operating income from financial assets and liabilities carried at fair value through income (net), fee and commission income, other income, interest expenses, excluding interest expenses from external debt, and fee and commission expenses.
| B | Condensed Consolidated Interim Financial Statements | |||
|---|---|---|---|---|
| 41 Consolidated Balance Sheets | 43 Consolidated Statements of | 44 Consolidated Statements of Changes | 45 Consolidated Statements of Cash Flows | |
| 42 Consolidated Income Statements | Comprehensive Income | in Equity | 47 Notes |
| Alternative Investments | Consolidation | Corporate and Other | |||||
|---|---|---|---|---|---|---|---|
| 2015 | 2014 | 2015 | 2014 | 2015 | 2014 | 2015 | 2014 |
| 139 | 150 | 5 | 4 | – | – | 193 | 208 |
| 6 | 2 | (1) | – | – | – | 10 | |
| 139 | 116 | 48 | 37 | (1) | – | 200 | 167 |
| – | – | – | – | – | – | 148 | |
| 284 | 268 | 53 | 41 | (1) | – | 551 | |
| (58) | (66) | – | (1) | – | – | (130) | (144) (9) |
| (8) | (9) | – | – | – | – | (8) | (15) |
| – | – | (2) | (2) | – | – | (18) | |
| (100) | (110) | (40) | (31) | – | – | (322) | (296) |
| (85) | (65) | – | – | – | – | (174) | (134) |
| (1) | – | – | – | – | – | (1) | |
| (252) | (251) | (43) | (33) | 1 | 1 | (652) | (600) |
| 32 | 18 | 10 | 8 | – | – | (101) | (222) |
| – | – | 1 | (1) | – | – | (40) | |
| 7 | – | – | – | – | – | 55 | |
| – | – | – | – | – | – | – | |
| – | – | 3 | (6) | – | – | 3 | |
| – | – | – | – | – | – | (212) | |
| – | – | – | – | – | – | 1 | |
| (1) | (1) | (5) | (4) | – | – | 224 | |
| – | – | – | – | – | – | (2) | |
| 6 | (1) | (2) | (11) | – | – | 27 | |
| 38 | 16 | 9 | (3) | – | – | (74) | |
| (12) | (5) | (1) | 1 | – | – | 25 | |
| 26 | 11 | 7 | (2) | – | – | (49) | |
| 2 | 2 | 4 | 2 | – | – | 6 | |
| 23 | 9 | 4 | (4) | – | – | (55) | |
| as of 31 March |
as of 31 December |
|---|---|
| 2014 | |
| 459 | 402 |
| 205 | 195 |
| 2,390 | 1,618 |
| 3,055 | 2,214 |
| 2,057 | 1,887 |
| 2,032 | 1,773 |
| 4,090 | 3,660 |
| 7,144 | 5,875 |
| 2015 |
| € mn | as of 31 March 2015 |
as of 31 December 2014 |
|---|---|---|
| Available-for-sale investments | 513,989 | 465,914 |
| Held-to-maturity investments | 4,130 | 3,969 |
| Funds held by others under reinsurance contracts assumed |
1,210 | 1,154 |
| Investments in associates and joint ventures | 4,395 | 4,059 |
| Real estate held for investment | 11,914 | 11,349 |
| Total | 535,638 | 486,445 |
| B | Condensed Consolidated Interim Financial Statements | |||
|---|---|---|---|---|
| 41 Consolidated Balance Sheets | 43 Consolidated Statements of | 44 Consolidated Statements of Changes | 45 Consolidated Statements of Cash Flows | |
| 42 Consolidated Income Statements | Comprehensive Income | in Equity | 47 Notes |
| € mn | ||||||||
|---|---|---|---|---|---|---|---|---|
| as of 31 March 2015 | as of 31 December 2014 | |||||||
| Amortized Cost |
Unrealized Gains |
Unrealized Losses |
Fair Value | Amortized Cost |
Unrealized Gains |
Unrealized Losses |
Fair Value | |
| Debt securities | ||||||||
| Government and agency mortgage-backed securities (residential and commercial) |
4,248 | 246 | (2) | 4,492 | 3,548 | 192 | (2) | 3,738 |
| Corporate mortgage-backed securities (residential and commercial) |
15,011 | 611 | (42) | 15,581 | 13,685 | 546 | (44) | 14,186 |
| Other asset-backed securities | 4,845 | 307 | (52) | 5,100 | 4,313 | 284 | (46) | 4,552 |
| Government and government agency bonds | ||||||||
| France | 31,415 | 13,994 | (21) | 45,388 | 31,113 | 9,509 | (21) | 40,601 |
| Italy | 24,803 | 7,371 | (6) | 32,169 | 25,203 | 5,557 | (5) | 30,755 |
| Germany | 12,447 | 3,244 | (2) | 15,688 | 12,900 | 2,152 | (5) | 15,048 |
| United States | 12,405 | 1,121 | (16) | 13,510 | 10,574 | 875 | (34) | 11,415 |
| South Korea | 7,377 | 1,266 | – | 8,643 | 6,156 | 882 | – | 7,038 |
| Belgium | 6,350 | 2,481 | (1) | 8,831 | 5,866 | 1,818 | – | 7,684 |
| Austria | 5,415 | 2,374 | (2) | 7,788 | 5,476 | 1,698 | (1) | 7,173 |
| Spain | 7,718 | 1,394 | (1) | 9,110 | 5,055 | 944 | (1) | 5,997 |
| Switzerland | 5,348 | 843 | (1) | 6,190 | 4,695 | 610 | – | 5,305 |
| Netherlands | 4,122 | 719 | (1) | 4,839 | 4,102 | 506 | (1) | 4,607 |
| Hungary | 896 | 131 | – | 1,027 | 868 | 105 | – | 972 |
| Ireland | 976 | 92 | – | 1,067 | 620 | 28 | – | 648 |
| Russia | 375 | 1 | (37) | 339 | 472 | – | (71) | 401 |
| Portugal | 214 | 38 | – | 252 | 198 | 29 | – | 227 |
| Greece | 1 | 1 | – | 2 | 1 | 2 | – | 3 |
| Supranationals | 15,655 | 4,716 | (2) | 20,369 | 15,726 | 3,202 | (3) | 18,925 |
| All other countries | 37,996 | 2,689 | (223) | 40,463 | 33,401 | 2,013 | (196) | 35,217 |
| Subtotal | 173,513 | 42,475 | (313) | 215,675 | 162,426 | 29,928 | (338) | 192,016 |
| Corporate bonds1 | 205,499 | 21,970 | (717) | 226,752 | 193,315 | 18,807 | (837) | 211,284 |
| Other | 2,799 | 610 | (1) | 3,407 | 2,471 | 499 | (2) | 2,968 |
| Subtotal | 405,916 | 66,219 | (1,127) | 471,007 | 379,757 | 50,255 | (1,269) | 428,743 |
| Equity securities2 | 27,872 | 15,206 | (97) | 42,982 | 26,113 | 11,313 | (255) | 37,171 |
| Total | 433,788 | 81,425 | (1,224) | 513,989 | 405,870 | 61,568 | (1,524) | 465,914 |
1 Include bonds issued by Spanish banks with a fair value of € 611 MN (2014: € 472 MN), thereof subordinated
2 Include shares invested in Spanish banks with a fair value of € 470 MN (2014: € 408 mn).
bonds with a fair value of € 141 mn (2014: € 134 MN).
| € mn | as of 31 March 2015 | as of 31 December 2014 | ||||
|---|---|---|---|---|---|---|
| Banks | Customers | Total | Banks | Customers | Total | |
| Short-term investments and certificates of deposit | 3,984 | – | 3,984 | 3,622 | – | 3,622 |
| Loans | 54,7731 | 58,148 | 112,921 | 56,4141 | 55,950 | 112,363 |
| Other | 1,752 | 12 | 1,765 | 1,372 | 16 | 1,388 |
| Subtotal | 60,509 | 58,161 | 118,669 | 61,407 | 55,966 | 117,373 |
| Loan loss allowance | – | (302) | (302) | – | (298) | (298) |
| Total | 60,508 | 57,859 | 118,367 | 61,407 | 55,668 | 117,075 |
1 Primarily include covered bonds.
| € mn | as of 31 March 2015 |
as of 31 December 2014 |
|---|---|---|
| Unearned premiums | 2,032 | 1,519 |
| Reserves for loss and loss adjustment expenses | 7,437 | 6,947 |
| Aggregate policy reserves | 5,545 | 4,998 |
| Other insurance reserves | 113 | 123 |
| Total | 15,127 | 13,587 |
| € mn | as of 31 March 2015 |
as of 31 December 2014 |
|---|---|---|
| Deferred acquisition costs | ||
| Property-Casualty | 5,195 | 4,595 |
| Life/Health | 16,112 | 16,089 |
| Subtotal | 21,307 | 20,685 |
| Present value of future profits | 861 | 870 |
| Deferred sales inducements | 706 | 708 |
| Total | 22,874 | 22,262 |
| € mn | ||
|---|---|---|
| as of | as of | |
| 31 March | 31 December | |
| 2015 | 2014 | |
| Receivables | ||
| Policyholders | 6,868 | 5,846 |
| Agents | 5,748 | 4,348 |
| Reinsurers | 2,227 | 1,951 |
| Other | 6,917 | 4,711 |
| Less allowance for doubtful accounts | (727) | (693) |
| Subtotal | 21,033 | 16,163 |
| Tax receivables | ||
| Income taxes | 1,961 | 1,996 |
| Other taxes | 1,529 | 1,426 |
| Subtotal | 3,490 | 3,422 |
| Accrued dividends, interest and rent | 7,540 | 7,836 |
| Prepaid expenses | ||
| Interest and rent | 19 | 25 |
| Other prepaid expenses | 390 | 256 |
| Subtotal | 409 | 281 |
| Derivative financial instruments used for hedging | ||
| that meet the criteria for hedge accounting and | ||
| firm commitments | 895 | 477 |
| Property and equipment | ||
| Real estate held for own use | 2,621 | 2,566 |
| Software | 2,164 | 2,142 |
| Equipment | 1,369 | 1,291 |
| Fixed assets of alternative investments | 1,487 | 1,465 |
| Subtotal | 7,641 | 7,464 |
| Other assets | 1,804 | 1,437 |
| Total | 42,812 | 37,080 |
43 Consolidated Statements of Comprehensive Income
B Condensed Consolidated Interim Financial Statements
41 Consolidated Balance Sheets 42 Consolidated Income Statements
| € mn | ||
|---|---|---|
| as of | as of | |
| 31 March | 31 December | |
| 2015 | 2014 | |
| Assets of disposal groups classified as held for sale | ||
| Münsterländische Bank Thie&Co. KG, Münster | 83 | 83 |
| Subtotal | 83 | 83 |
| Non-current assets classified as held for sale | ||
| Real estate held for investment | – | 92 |
| Real estate held for own use | 61 | 61 |
| Subtotal | 61 | 152 |
| Total | 144 | 235 |
| Liabilities of disposal groups classified as held for sale |
||
| Münsterländische Bank Thie&Co. KG, Münster | 102 | 102 |
| Total | 102 | 102 |
During the fourth quarter of 2014, the Allianz Group decided to dispose of Münsterländische Bank Thie&Co. KG, Münster. Thus, the assets and liabilities of this consolidated entity allocated to the reportable segment Banking were reclassified as held for sale. As of 31 March 2015, no cumulative gains or losses were recognized in other comprehensive income relating to the disposal group classified as held for sale. The sale is expected to occur during the second quarter of 2015. Upon measurement of the disposal group at fair value less costs to sell, no impairment loss was recognized for the three months ended 31 March 2015.
Real estate held for investment classified as held for sale comprised as of 31 December 2014 several office buildings allocated to the reportable segment German Speaking Countries (Life/Health), which were sold as expected during the first quarter of 2015.
As of 31 March 2015, real estate held for own use classified as held for sale comprised several office buildings allocated to the reportable segment Global Insurance Lines&Anglo Markets (Property-Casualty). Upon measurement of these buildings at fair value less costs to sell, no further impairment losses were recognized for the three months ended 31 March 2015. The sale of these buildings will be completed by the end of the third and fourth quarter of 2015, respectively.
in Equity
| € mn | ||
|---|---|---|
| as of | as of | |
| 31 March | 31 December | |
| 2015 | 2014 | |
| Intangible assets with indefinite useful lives | ||
| Goodwill | 12,706 | 12,166 |
| Brand names1 | 295 | 289 |
| Subtotal | 13,002 | 12,455 |
| Intangible assets with finite useful lives | ||
| Distribution agreements2 | 937 | 948 |
| Customer relationships3 | 219 | 231 |
| Other4 | 159 | 121 |
| Subtotal | 1,315 | 1,300 |
| Total | 14,316 | 13,755 |
1 Include primarily the brand name of Selecta AG, Muntelier.
2 Include primarily the long-term distribution agreements with Commerzbank AG of € 326 mn (2014: € 335 mn), Banco Popular S.A. of € 349 mn (2014: € 353 mn), Yapı Kredi Bank of € 147 mn (2014: € 147 mn) and HSBC Asia, HSBC Turkey and BTPN Indonesia of € 94 mn (2014: € 90 mn).
3 Include primarily customer relationships from the acquisition of UnipolSai Assicurazioni S.p.A. of € 94 mn (2014: € 100 mn), Selecta of € 77 mn (2014: € 85 mn), Assurances Médicales S.A. of € 17 mn (2014: € 18 mn) and Yapı Kredi of € 7 mn (2014: € 8 mn).
4 Include primarily acquired business portfolios of € 72 mn (2014: € 64 mn), heritable building rights of € 17 mn (2014: € 17 mn) and lease rights of € 10 mn (2014: € – mn).
| € mn | ||
|---|---|---|
| 2015 | 2014 | |
| Cost as of 1 January | 13,156 | 12,534 |
| Accumulated impairments as of 1 January | (990) | (990) |
| Carrying amount as of 1 January | 12,166 | 11,544 |
| Additions | 51 | 6 |
| Disposals | – | – |
| Foreign currency translation adjustments | 490 | (18) |
| Impairments | – | – |
| Carrying amount as of 31 March | 12,706 | 11,532 |
| Accumulated impairments as of 31 March | 990 | 990 |
| Cost as of 31 March | 13,696 | 12,522 |
For the three months ended 31 March 2015, additions are mainly re lated to goodwill arising from the acquisition of the Property-Casualty insurance business of the Territory Insurance Office, Darwin. For further information please refer to note 3.
| as of 31 March 2015 |
as of 31 December 2014 |
|---|---|
| 9,823 | 8,493 |
| 2 | 3 |
| 9,824 | 8,496 |
| as of 31 March 2015 | as of 31 December 2014 | ||||
|---|---|---|---|---|---|
| Banks | Customers | Total | Banks | Customers | Total |
| 248 | 5,013 | 5,261 | 69 | 4,803 | 4,872 |
| – | 2,700 | 2,700 | – | 2,846 | 2,846 |
| 926 | 1,633 | 2,559 | 971 | 1,946 | 2,916 |
| 2,543 | – | 2,543 | 1,197 | – | 1,197 |
| 2,715 | |||||
| 4,643 | 4,529 | 9,172 | 4,278 | 4,191 | 8,469 |
| 12,168 | 13,874 | 26,043 | 9,230 | 13,786 | 23,015 |
| 3,808 | – | 3,808 | 2,715 | – |
44 Consolidated Statements of Changes in Equity
45 Consolidated Statements of Cash Flows 47 Notes
| € mn | as of 31 March 2015 |
as of 31 December 2014 |
|---|---|---|
| Property-Casualty | 61,805 | 58,925 |
| Life/Health | 10,453 | 10,081 |
| Consolidation | (23) | (18) |
| Total | 72,234 | 68,989 |
The following table reconciles the beginning and ending reserves of the Allianz Group, including the effect of reinsurance ceded, for the Property-Casualty business segment for the quarters ended 31 March 2015 and 2014.
change in the reserves for loss and loss adjustment expenses in the property-casualty business segment
| € mn | ||||||
|---|---|---|---|---|---|---|
| 2015 | 2014 | |||||
| Gross | Ceded | Net | Gross | Ceded | Net | |
| As of 1 January | 58,925 | (6,577) | 52,348 | 56,614 | (6,070) | 50,544 |
| Balance carry forward of discounted loss reserves | 3,597 | (326) | 3,271 | 3,207 | (306) | 2,901 |
| Subtotal | 62,522 | (6,903) | 55,619 | 59,821 | (6,376) | 53,445 |
| Loss and loss adjustment expenses incurred | ||||||
| Current year | 8,628 | (604) | 8,024 | 7,532 | (552) | 6,980 |
| Prior years | (519) | 145 | (373) | (398) | 146 | (252) |
| Subtotal | 8,110 | (458) | 7,651 | 7,134 | (406) | 6,727 |
| Loss and loss adjustment expenses paid | ||||||
| Current year | (2,163) | 48 | (2,115) | (2,028) | 67 | (1,961) |
| Prior years | (5,484) | 297 | (5,187) | (5,283) | 335 | (4,948) |
| Subtotal | (7,647) | 345 | (7,302) | (7,311) | 402 | (6,909) |
| Foreign currency translation adjustments and other changes | 2,633 | (357) | 2,275 | 260 | (15) | 246 |
| Subtotal | 65,617 | (7,373) | 58,244 | 59,904 | (6,395) | 53,509 |
| Ending balance of discounted loss reserves | (3,812) | 344 | (3,469) | (3,426) | 295 | (3,131) |
| As of 31 March | 61,805 | (7,030) | 54,775 | 56,478 | (6,100) | 50,378 |
| € mn | ||
|---|---|---|
| as of | as of | |
| 31 March 2015 |
31 December 2014 |
|
| Aggregate policy reserves | 418,243 | 399,227 |
| Reserves for premium refunds | 79,494 | 63,026 |
| Other insurance reserves | 1,111 | 1,081 |
| Total | 498,848 | 463,334 |
| € mn | ||
|---|---|---|
| as of 31 March 2015 |
as of 31 December 2014 |
|
| Payables | ||
| Policyholders | 4,271 | 4,934 |
| Reinsurance | 1,751 | 1,460 |
| Agents | 1,781 | 1,615 |
| Subtotal | 7,804 | 8,009 |
| Payables for social security | 577 | 420 |
| Tax payables | ||
| Income taxes | 2,072 | 1,801 |
| Other taxes | 1,759 | 1,387 |
| Subtotal | 3,831 | 3,187 |
| Accrued interest and rent | 497 | 613 |
| Unearned income | ||
| Interest and rent | 24 | 24 |
| Other | 347 | 283 |
| Subtotal | 371 | 307 |
| Provisions | ||
| Pensions and similar obligations | 10,345 | 9,765 |
| Employee related | 2,558 | 2,327 |
| Share-based compensation plans | 414 | 606 |
| Restructuring plans | 175 | 109 |
| Loan commitments | 8 | 12 |
| Contingent losses from non-insurance business | 133 | 134 |
| Other provisions | 1,495 | 1,684 |
| Subtotal | 15,128 | 14,637 |
| Deposits retained for reinsurance ceded | 1,897 | 1,843 |
| Derivative financial instruments used for hedging that meet the criteria for hedge accounting and firm commitments |
528 | 281 |
| Financial liabilities for puttable equity instruments | 1,997 | 1,793 |
| Other liabilities | 7,999 | 7,520 |
| Total | 40,632 | 38,609 |
The change in the restructuring provisions is mainly driven by the reorganization of Fireman's Fund Insurance Company in the United States. In this regard, restructuring charges of € 89 MN, thereof restructuring provisions of € 77 MN, were recorded in the reportable segment Global Insurance Lines&Anglo Markets (Property-Casualty) in the three months ended 31 March 2015.
| B | Condensed Consolidated Interim Financial Statements | |||
|---|---|---|---|---|
| 41 Consolidated Balance Sheets | 43 Consolidated Statements of | 44 Consolidated Statements of Changes |
42 Consolidated Income Statements
Comprehensive Income
in Equity
45 Consolidated Statements of Cash Flows 47 Notes
| € mn | ||
|---|---|---|
| as of | as of | |
| 31 March | 31 December | |
| 2015 | 2014 | |
| Allianz SE1 | ||
| Senior bonds | 6,724 | 6,653 |
| Money market securities | 1,285 | 1,041 |
| Subtotal | 8,009 | 7,694 |
| Banking subsidiaries | ||
| Senior bonds | 478 | 513 |
| Subtotal | 478 | 513 |
| Total | 8,487 | 8,207 |
1 Includes senior bonds issued by Allianz Finance II B.V., guaranteed by Allianz SE and money market securities issued by Allianz Finance Corporation, a wholly-owned subsidiary of Allianz SE, which are fully and unconditionally guaranteed by Allianz SE.
| € mn | ||
|---|---|---|
| as of 31 March |
as of 31 December |
|
| 2015 | 2014 | |
| Shareholders' equity | ||
| Issued capital | 1,170 | 1,170 |
| Additional paid-in capital | 27,758 | 27,758 |
| Retained earnings1 | 21,491 | 19,878 |
| Foreign currency translation adjustments | (219) | (1,977) |
| Unrealized gains and losses (net)2 | 18,197 | 13,917 |
| Subtotal | 68,397 | 60,747 |
| Non-controlling interests | 3,103 | 2,955 |
| Total | 71,501 | 63,702 |
1 As of 31 March 2015, include € (219) mn (2014: € (222) mn) related to treasury shares. 2 As of 31 March 2015, include € 377 mn (2014: € 288 mn) related to cash flow hedges.
| € mn | ||
|---|---|---|
| as of | as of | |
| 31 March | 31 December | |
| 2015 | 2014 | |
| Allianz SE1 | ||
| Subordinated bonds2 | 12,035 | 11,371 |
| Subtotal | 12,035 | 11,371 |
| Banking subsidiaries | ||
| Subordinated bonds | 236 | 221 |
| Subtotal | 236 | 221 |
| All other subsidiaries | ||
| Subordinated bonds | 400 | 400 |
| Hybrid equity | 45 | 45 |
| Subtotal | 445 | 445 |
| Total | 12,716 | 12,037 |
1 Includes subordinated bonds issued by Allianz Finance II B.V. and guaranteed by Allianz SE.
2 Change due to the redemption of a € 1.0 bn bond and the issuance of a € 1.5 bn bond in the first quarter of 2015.
| Property Consoli three months ended 31 March Casualty Life/Health dation Group 2015 Premiums written Direct 16,113 6,829 – 22,941 Assumed 1,226 143 (35) 1,334 Subtotal 17,339 6,972 (35) 24,275 Ceded (1,500) (146) 35 (1,610) Net 15,839 6,826 – 22,665 Change in unearned premiums Direct (4,479) (77) – (4,556) Assumed (328) (1) 22 (307) Subtotal (4,807) (79) 22 (4,863) Ceded 487 6 (22) 470 Net (4,320) (73) – (4,393) Premiums earned Direct 11,634 6,751 – 18,385 Assumed 899 142 (13) 1,027 Subtotal 12,532 6,893 (13) 19,412 Ceded (1,013) (140) 13 (1,140) Net 11,519 6,753 – 18,272 2014 Premiums written Direct 14,454 6,453 – 20,908 Assumed 763 162 (21) 903 Subtotal 15,217 6,615 (21) 21,811 Ceded (1,227) (155) 21 (1,362) Net 13,990 6,460 – 20,450 Change in unearned premiums Direct (3,819) (157) – (3,976) Assumed (94) (25) 3 (116) Subtotal (3,913) (183) 3 (4,092) Ceded 333 (1) (3) 328 Net (3,580) (183) – (3,763) Premiums earned Direct 10,635 6,296 – 16,931 Assumed 669 136 (17) 788 Subtotal 11,304 6,432 (17) 17,719 Ceded (894) (156) 17 (1,033) Net 10,410 6,276 – 16,686 |
€ mn | ||
|---|---|---|---|
| € mn | ||
|---|---|---|
| three months ended 31 March | 2015 | 2014 |
| Interest from held-to-maturity investments | 40 | 43 |
| Dividends from available-for-sale investments | 342 | 298 |
| Interest from available-for-sale investments | 3,472 | 3,296 |
| Share of earnings from investments in associates and joint ventures |
78 | 37 |
| Rent from real estate held for investment | 217 | 207 |
| Interest from loans to banks and customers | 1,203 | 1,216 |
| Other interest income | 53 | 42 |
| Total | 5,139 | |
| 5,404 |
| € mn | ||||||
|---|---|---|---|---|---|---|
| three months ended 31 March | Property Casualty |
Life/Health | Asset Management |
Corporate and Other |
Consolidation | Group |
| 2015 | ||||||
| Income (expenses) from financial assets and liabilities held for trading (net) | (176) | (1,757) | – | (208) | 4 | (2,137) |
| Income (expenses) from financial assets and liabilities designated at fair value through income (net) |
1 | 278 | 4 | 15 | – | 298 |
| Income (expenses) from financial liabilities for puttable equity instruments (net) | – | (222) | – | (1) | – | (223) |
| Foreign currency gains and losses (net) | 220 | 2,236 | 1 | 163 | – | 2,621 |
| Total | 45 | 535 | 5 | (30) | 4 | 559 |
| 2014 | ||||||
| Income (expenses) from financial assets and liabilities held for trading (net) | (58) | (372) | (1) | 1 | – | (430) |
| Income (expenses) from financial assets and liabilities designated at fair value through income (net) |
– | 52 | – | – | – | 52 |
| Income (expenses) from financial liabilities for puttable equity instruments (net) | – | (28) | – | – | – | (28) |
| Foreign currency gains and losses (net) | 13 | 78 | (1) | (5) | – | 86 |
| Total | (45) | (269) | (1) | (4) | – | (319) |
Foreign currency gains and losses are reported within income from financial assets and liabilities carried at fair value through income (net) (2015: income of € 2,621 MN; 2014: income of € 86 MN). 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. The Allianz Group uses freestanding derivatives, included in the line item income (expenses) from financial assets and liabilities held for trading (net), to hedge against foreign currency fluctuations (2015: expenses of € 2,468 MN; 2014: expenses of € 67 MN).
Additionally included in the business segment Life/Health are derivative financial instruments from German entities which relate to duration management (2015: income of € 355 MN; 2014: income of € 143 MN) and protection against equity fluctuations (2015: income of € 418 MN; 2014: expenses of € 119 MN), and from U.S. entities which relate to fixed-indexed annuity products and guaranteed benefits under unit-linked contracts (2015: expenses of € 334 MN; 2014: expenses of € 246 MN).
| € mn | ||
|---|---|---|
| three months ended 31 March | 2015 | 2014 |
| Realized gains | ||
| Available-for-sale investments | ||
| Equity securities | 1,404 | 422 |
| Debt securities | 1,359 | 475 |
| Subtotal | 2,763 | 897 |
| Investments in associates and joint ventures1 | – | 10 |
| Real estate held for investment | 49 | 17 |
| Loans and advances to banks and customers | 177 | 70 |
| Non-current assets classified as held for sale | 29 | – |
| Subtotal | 3,017 | 994 |
| Realized losses | ||
| Available-for-sale investments | ||
| Equity securities | (58) | (25) |
| Debt securities | (121) | (55) |
| Subtotal | (179) | (80) |
| Investments in associates and joint ventures2 | – | (4) |
| Real estate held for investment | – | (3) |
| Loans and advances to banks and customers | (1) | – |
| Subtotal | (180) | (87) |
| Total | 2,837 | 906 |
1 During the three months ended 31 March 2015 and 2014, include no realized gains from the disposal of subsidiaries and businesses.
2 During the three months ended 31 March 2015 and 2014, include no realized losses from the disposal of subsidiaries and businesses.
| 2015 | 2014 |
|---|---|
| 236 | 197 |
| 121 | 110 |
| 357 | 307 |
| 22 | 23 |
| 324 | 206 |
| 347 | 229 |
| 1,727 | 1,655 |
| 144 | 170 |
| 59 | 19 |
| 10 | 16 |
| 1,940 | 1,861 |
| 16 | 17 |
| 183 | 150 |
| 200 | 167 |
| (199) | (155) |
| 2,644 | 2,408 |
| € mn three months ended 31 March |
2015 | 2014 |
|---|---|---|
| Income | ||
| Sales and service revenues | 171 | 169 |
| Subtotal | 171 | 169 |
| Expenses | ||
| Cost of goods sold | (53) | (54) |
| General and administrative expenses | (90) | (114) |
| Interest expenses | (25) | (8) |
| Subtotal | (168) | (176) |
| Consolidation1 | (1) | 2 |
| Total | 2 | (5) |
1 This consolidation effect results from the deferred policyholder participation recognized in the result from fully consolidated private equity investments within operating profit in the Life/Health business segment that was reclassified to expenses from fully consolidated private equity investments in nonoperating profit to ensure the consistent presentation of the Allianz Group's operating profit.
| € mn three months ended 31 March |
2015 | 2014 |
|---|---|---|
| Realized gains from disposals of real estate held for own use |
8 | 20 |
| Income from alternative investments | 69 | 57 |
| Total | 77 | 78 |
44 Consolidated Statements of Changes in Equity
| € mn | ||||
|---|---|---|---|---|
| three months ended 31 March | Property Casualty |
Life/Health | Consoli dation |
Group |
| 2015 | ||||
| Gross | ||||
| Claims and insurance benefits paid |
(7,647) | (5,240) | 13 | (12,875) |
| Change in loss and loss adjustment expenses |
(463) | (12) | 5 | (470) |
| Subtotal | (8,110) | (5,253) | 17 | (13,345) |
| Ceded | ||||
| Claims and insurance benefits paid |
345 | 90 | (11) | 424 |
| Change in loss and loss adjustment expenses |
113 | 9 | (5) | 118 |
| Subtotal | 458 | 99 | (16) | 541 |
| Net | ||||
| Claims and insurance benefits paid |
(7,302) | (5,151) | 2 | (12,451) |
| Change in loss and loss adjustment expenses |
(349) | (3) | – | (353) |
| Total | (7,651) | (5,154) | 2 | (12,804) |
| 2014 | ||||
| Gross | ||||
| Claims and insurance benefits paid |
(7,311) | (5,184) | 9 | (12,486) |
| Change in loss and loss adjustment expenses |
177 | (25) | 2 | 154 |
| Subtotal | (7,134) | (5,210) | 11 | (12,332) |
| Ceded | ||||
| Claims and insurance benefits paid |
402 | 114 | (8) | 509 |
| Change in loss and loss adjustment expenses |
4 | 14 | (4) | 14 |
| Subtotal | 406 | 128 | (12) | 523 |
| Net | ||||
| Claims and insurance benefits paid |
(6,909) | (5,070) | 1 | (11,977) |
| Change in loss and loss adjustment expenses |
181 | (11) | (2) | 168 |
| Total | (6,727) | (5,081) | – | (11,809) |
| three months ended 31 March | Property | |||
|---|---|---|---|---|
| Casualty | Life/Health | Consoli dation |
Group | |
| 2015 | ||||
| Gross | ||||
| Aggregate policy reserves | (65) | (2,312) | (1) | (2,379) |
| Other insurance reserves | – | (3) | – | (3) |
| Expenses for premium refunds |
(109) | (3,739) | (4) | (3,852) |
| Subtotal | (175) | (6,054) | (5) | (6,233) |
| Ceded | ||||
| Aggregate policy reserves | 1 | 89 | – | 91 |
| Other insurance reserves | – | 2 | – | 2 |
| Expenses for premium refunds |
– | 1 | – | 1 |
| Subtotal | 1 | 93 | – | 94 |
| Net | ||||
| Aggregate policy reserves | (64) | (2,223) | (1) | (2,287) |
| Other insurance reserves | – | (1) | – | (1) |
| Expenses for premium refunds |
(109) | (3,738) | (4) | (3,851) |
| Total | (173) | (5,961) | (5) | (6,139) |
| 2014 | ||||
| Gross | ||||
| Aggregate policy reserves | (64) | (1,994) | 1 | (2,057) |
| Other insurance reserves Expenses for premium |
(3) | (54) | – | (57) |
| refunds | (59) | (1,323) | (2) | (1,384) |
| Subtotal | (127) | (3,370) | (1) | (3,498) |
| Ceded | ||||
| Aggregate policy reserves Other insurance reserves |
2 | 51 | 1 | 53 |
| Expenses for premium | – | 3 | – | 3 |
| refunds | – | 2 | – | 2 |
| Subtotal | 2 | 56 | 1 | 59 |
| Net | ||||
| Aggregate policy reserves | (63) | (1,942) | 1 | (2,004) |
| Other insurance reserves | (3) | (50) | – | (53) |
| Expenses for premium refunds |
(59) | (1,322) | (2) | (1,382) |
| Total | (125) | (3,314) | (1) | (3,440) |
| € mn | ||
|---|---|---|
| three months ended 31 March | 2015 | 2014 |
| Liabilities to banks and customers | (58) | (61) |
| Deposits retained for reinsurance ceded | (12) | (12) |
| Certificated liabilities | (75) | (67) |
| Subordinated liabilities | (143) | (141) |
| Other interest expenses | (28) | (21) |
| Total | (315) | (302) |
| € mn three months ended 31 March |
2015 | 2014 |
|---|---|---|
| Additions to allowances including direct impairments |
(37) | (28) |
| Amounts released | 28 | 12 |
| Recoveries on loans previously impaired | 1 | 7 |
| Total | (8) | (9) |
| € mn | ||
|---|---|---|
| three months ended 31 March | 2015 | 2014 |
| Impairments | ||
| Available-for-sale investments | ||
| Equity securities | (34) | (135) |
| Debt securities | (61) | (226) |
| Subtotal | (95) | (360) |
| Real estate held for investment | (4) | – |
| Loans and advances to banks and customers | (11) | (1) |
| Non-current assets classified as held for sale | – | (1) |
| Subtotal | (110) | (362) |
| Reversals of impairments | ||
| Loans and advances to banks and customers | 1 | – |
| Subtotal | 1 | – |
| Total | (109) | (362) |
| € mn | ||
|---|---|---|
| three months ended 31 March | 2015 | 2014 |
| Investment management expenses | (145) | (113) |
| Depreciation of real estate held for investment | (61) | (56) |
| Other expenses from real estate held for investment |
(32) | (30) |
| Total | (238) | (199) |
| € mn | ||
|---|---|---|
| three months ended 31 March | 2015 | 2014 |
| Property-Casualty | ||
| Acquisition costs | ||
| Incurred | (3,108) | (2,765) |
| Commissions and profit received on reinsurance business ceded |
109 | 117 |
| Deferrals of acquisition costs | 2,097 | 1,828 |
| Amortization of deferred acquisition costs | (1,615) | (1,421) |
| Subtotal | (2,517) | (2,242) |
| Administrative expenses | (912)1 | (1,207)1 |
| Subtotal | (3,429) | (3,449) |
| Life/Health | ||
| Acquisition costs | ||
| Incurred | (1,325) | (1,215) |
| Commissions and profit received on reinsurance business ceded |
26 | 24 |
| Deferrals of acquisition costs | 905 | 834 |
| Amortization of deferred acquisition costs | (912) | (530) |
| Subtotal | (1,307) | (886) |
| Administrative expenses | (428)1 | (375)1 |
| Subtotal | (1,734) | (1,261) |
| Asset Management | ||
| Personnel expenses | (673)1 | (575)1 |
| Non-personnel expenses | (368) | (309) |
| Subtotal | (1,042) | (884) |
| Corporate and Other | ||
| Administrative expenses | (97)1 | 3801 |
| Subtotal | (97) | 380 |
| Consolidation | 7 | (116)1 |
| Total | (6,296) | (5,330) |
1 Include one-off effects from pension revaluation. Please refer to note 4 for further details.
| B | Condensed Consolidated Interim Financial Statements | ||
|---|---|---|---|
41 Consolidated Balance Sheets 42 Consolidated Income Statements 43 Consolidated Statements of Comprehensive Income
44 Consolidated Statements of Changes in Equity
| € mn | ||
|---|---|---|
| three months ended 31 March | 2015 | 2014 |
| Property-Casualty | ||
| Fees from credit and assistance business | (245) | (203) |
| Service agreements | (99) | (88) |
| Subtotal | (344) | (291) |
| Life/Health | ||
| Service agreements | (13) | (11) |
| Investment advisory | (139) | (76) |
| Subtotal | (151) | (87) |
| Asset Management | ||
| Commissions | (354) | (307) |
| Other | (18) | (37) |
| Subtotal | (373) | (345) |
| Corporate and Other | ||
| Service agreements | (90) | (70) |
| Investment advisory and banking activities | (84) | (64) |
| Subtotal | (174) | (134) |
| Consolidation | 100 | 75 |
| Total | (942) | (782) |
| € mn three months ended 31 March |
2015 | 2014 |
|---|---|---|
| Realized losses from disposals of real estate held for own use |
– | (4) |
| Expenses from alternative investments | (27) | (25) |
| Expenses from non-current assets classified as held for sale |
– | (1) |
| Other | (1) | (1) |
| Total | (28) | (30) |
| € mn three months ended 31 March |
2015 | 2014 |
|---|---|---|
| Current income taxes | (727) | (988) |
| Deferred income taxes | (131) | 121 |
| Total | (858) | (867) |
For the three months ended 31 March 2015 and 2014, the income taxes relating to components of other comprehensive income consist of the following:
income taxes relating to components of other comprehensive income
| € mn three months ended 31 March |
2015 | 2014 |
|---|---|---|
| Items that may be reclassified to profit or loss in future periods |
||
| Foreign currency translation adjustments | 148 | 1 |
| Available-for-sale investments | (1,269) | (920) |
| Cash flow hedges | (41) | (2) |
| Share of other comprehensive income of associates and joint ventures |
(2) | (1) |
| Miscellaneous | (7) | (30) |
| Items that may never be reclassified to profit or loss |
||
| Actuarial gains (losses) on defined benefit plans | 160 | 159 |
| Total | (1,012) | (792) |
The following table compares the carrying amount with the fair value of the Allianz Group's financial assets and financial liabilities:
| € mn | ||||
|---|---|---|---|---|
| as of 31 March 2015 | as of 31 December 2014 | |||
| Carrying amount | Fair value | Carrying amount | Fair value | |
| Financial assets | ||||
| Cash and cash equivalents | 14,589 | 14,589 | 13,863 | 13,863 |
| Financial assets held for trading | 3,055 | 3,055 | 2,214 | 2,214 |
| Financial assets designated at fair value through income | 4,090 | 4,090 | 3,660 | 3,660 |
| Available-for-sale investments | 513,989 | 513,989 | 465,914 | 465,914 |
| Held-to-maturity investments | 4,130 | 5,022 | 3,969 | 4,710 |
| Investments in associates and joint ventures | 4,395 | 5,276 | 4,059 | 4,820 |
| Real estate held for investment | 11,914 | 17,055 | 11,349 | 16,323 |
| Loans and advances to banks and customers | 118,367 | 145,316 | 117,075 | 140,238 |
| Financial assets for unit-linked contracts | 106,163 | 106,163 | 94,564 | 94,564 |
| Derivative financial instruments and firm commitments included in other assets | 895 | 895 | 477 | 477 |
| Real estate held for own use | 2,621 | 3,736 | 2,566 | 3,646 |
| Financial liabilities | ||||
| Financial liabilities held for trading | 9,824 | 9,824 | 8,496 | 8,496 |
| Liabilities to banks and customers | 26,043 | 26,704 | 23,015 | 23,607 |
| Financial liabilities for unit-linked contracts | 106,163 | 106,163 | 94,564 | 94,564 |
| Derivative financial instruments and firm commitments included in other liabilities | 528 | 528 | 281 | 281 |
| Financial liabilities for puttable equity instruments | 1,997 | 1,997 | 1,793 | 1,793 |
| Certificated liabilities | 8,487 | 9,632 | 8,207 | 9,293 |
| Subordinated liabilities | 12,716 | 14,328 | 12,037 | 13,253 |
The Allianz Group carries certain financial instruments at fair value and discloses the fair value of most other assets and liabilities. The fair value of an asset or liability is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The maximum exposure to credit risk of financial assets, without taking collateral into account, is represented by their carrying amount, except for available-for-sale financial assets, for which it is represented by the amortized cost amount.
The degree of judgment used in measuring the fair value of financial instruments closely correlates with the level of non-market observable inputs. The Allianz Group maximizes the use of observable inputs and minimizes the use of non-market observable inputs when measuring fair value. Observability of input parameters is influenced by various factors such as type of the financial instrument, whether a market is established for the particular instrument, specific transaction characteristics, liquidity as well as general market conditions.
42 Consolidated Income Statements
If the fair value cannot be measured reliably, amortized cost is used as a proxy for determining fair values. As of 31 March 2015, fair values could not be reliably measured for equity investments with carrying amounts totaling € 220 mn (31 December 2014: € 189 mn). These investments are primarily investments in privately held corporations and partnerships.
Comprehensive Income
in Equity
Assets and liabilities measured or disclosed at fair value in the consolidated financial statements are measured and classified in accordance with the fair value hierarchy in IFRS 13, which categorizes the inputs to valuation techniques used to measure fair value into three levels.
In general, the subsidiaries assume responsibility for assessing fair values and hierarchies of assets and liabilities. This is consistent with the decentralized organizational structure of the Allianz Group and reflects market insights of local managers. Estimates and assumptions are particularly significant when determining the fair value of financial instruments for which at least one significant input is not based on observable market data (classified within level 3 of the fair value hierarchy). The availability of market information is determined by the relative trading levels of identical or similar instruments in the market, with emphasis placed on information that represents actual market activity or binding quotations from brokers or dealers. If no sufficient market information is available, management's best estimate of a particular input is used to determine the value.
The level 1 inputs of financial instruments that are traded in active markets are based on unadjusted quoted market prices or dealer price quotations for identical assets or liabilities on the last exchange trading day prior to or at the balance sheet date, if the latter is a trading day.
Level 2 applies if the market for a financial instrument is not active or when the fair value is determined by using valuation techniques based on observable input parameters. Such market inputs are observable substantially over the full term of the asset or liability and include references to formerly quoted prices for identical instruments from an active market, quoted prices for identical instruments from an inactive market, quoted prices for similar instruments from active markets and quoted prices for similar instruments from inactive markets. Market observable inputs also include interest rate yield curves, volatilities and foreign currency exchange rates.
Where observable market inputs are not available, the fair value is based on valuation techniques using non-market observable inputs. Valuation techniques include the discounted cash flow method, comparison to similar instruments for which observable market prices exist and other valuation models. Appropriate adjustments are made for credit risks. In particular, when observable market inputs are not available, the use of estimates and assumptions may have a high impact on the valuation outcome.
The following financial assets and liabilities are carried at fair value on a recurring basis:
79
The following tables present the fair value hierarchy for financial instruments carried at fair value in the consolidated balance sheets as of 31 March 2015 and 31 December 2014.
| Financial assets Financial assets carried at fair value through income Financial assets held for trading Debt securities |
Level 1 – Quoted prices in active markets 98 43 |
Level 2 – Market observable inputs |
Level 3 – Non-market observable inputs |
Total |
|---|---|---|---|---|
| 361 | – | 459 | ||
| Equity securities | 146 | 16 | 205 | |
| Derivative financial instruments | 141 | 2,127 | 121 | 2,390 |
| Subtotal | 282 | 2,635 | 137 | 3,055 |
| Financial assets designated at fair value through income | ||||
| Debt securities | 1,078 | 956 | 23 | 2,057 |
| Equity securities | 1,879 | 42 | 110 | 2,032 |
| Subtotal | 2,957 | 998 | 134 | 4,090 |
| Subtotal | 3,239 | 3,633 | 270 | 7,144 |
| Available-for-sale investments | ||||
| Government and agency mortgage-backed securities (residential and commercial) | 47 | 4,445 | – | 4,492 |
| Corporate mortgage-backed securities (residential and commercial) | 25 | 15,511 | 46 | 15,581 |
| Other asset-backed securities | 260 | 4,626 | 214 | 5,100 |
| Government and government agency bonds | 46,155 | 169,476 | 45 | 215,675 |
| Corporate bonds | 26,362 | 192,837 | 7,550 | 226,752 |
| Other debt securities | 557 | 1,905 | 947 | 3,407 |
| Equity securities | 35,234 | 968 | 6,781 | 42,982 |
| Subtotal | 108,639 | 389,767 | 15,582 | 513,989 |
| Financial assets for unit-linked contracts | 102,951 | 3,046 | 165 | 106,163 |
| Derivative financial instruments and firm commitments included in other assets | – | 895 | – | 895 |
| Total | 214,829 | 397,341 | 16,018 | 628,191 |
| Financial liabilities | ||||
| Financial liabilities held for trading | ||||
| Derivative financial instruments | 22 | 1,358 | 8,443 | 9,823 |
| Other trading liabilities | – | 2 | – | 2 |
| Subtotal | 22 | 1,361 | 8,443 | 9,824 |
| Financial liabilities for unit-linked contracts | 102,951 | 3,046 | 165 | 106,163 |
| Derivative financial instruments and firm commitments included in other liabilities | – | 528 | – | 528 |
| Financial liabilities for puttable equity instruments | 1,957 | 23 | 18 | 1,997 |
| Total | 104,929 | 4,959 | 8,625 | 118,513 |
42 Consolidated Income Statements
Comprehensive Income
in Equity
45 Consolidated Statements of Cash Flows 47 Notes
€ mn
| Level 1 – Quoted prices in |
Level 2 – Market |
Level 3 – Non-market |
||
|---|---|---|---|---|
| active markets | observable inputs | observable inputs | Total | |
| Financial assets | ||||
| Financial assets carried at fair value through income | ||||
| Financial assets held for trading | ||||
| Debt securities | 79 | 323 | – | 402 |
| Equity securities | 47 | 133 | 15 | 195 |
| Derivative financial instruments | 260 | 1,336 | 22 | 1,618 |
| Subtotal | 385 | 1,792 | 38 | 2,214 |
| Financial assets designated at fair value through income | ||||
| Debt securities | 887 | 981 | 19 | 1,887 |
| Equity securities | 1,624 | 38 | 110 | 1,773 |
| Subtotal | 2,512 | 1,018 | 129 | 3,660 |
| Subtotal | 2,897 | 2,810 | 167 | 5,875 |
| Available-for-sale investments | ||||
| Government and agency mortgage-backed securities (residential and commercial) | 43 | 3,695 | – | 3,738 |
| Corporate mortgage-backed securities (residential and commercial) | – | 14,146 | 40 | 14,186 |
| Other asset-backed securities | 259 | 4,075 | 218 | 4,552 |
| Government and government agency bonds | 29,810 | 162,166 | 39 | 192,016 |
| Corporate bonds | 15,885 | 188,946 | 6,452 | 211,284 |
| Other debt securities | 273 | 1,966 | 729 | 2,968 |
| Equity securities | 30,077 | 868 | 6,226 | 37,171 |
| Subtotal | 76,347 | 375,862 | 13,704 | 465,914 |
| Financial assets for unit-linked contracts | 91,885 | 2,511 | 166 | 94,564 |
| Derivative financial instruments and firm commitments included in other assets | 2 | 476 | – | 477 |
| Total | 171,131 | 381,659 | 14,037 | 566,830 |
| Financial liabilities | ||||
| Financial liabilities held for trading | ||||
| Derivative financial instruments | 49 | 1,315 | 7,129 | 8,493 |
| Other trading liabilities | – | 3 | – | 3 |
| Subtotal | 49 | 1,319 | 7,129 | 8,496 |
| Financial liabilities for unit-linked contracts | 91,885 | 2,511 | 166 | 94,564 |
| Derivative financial instruments and firm commitments included in other liabilities | – | 281 | – | 281 |
| Financial liabilities for puttable equity instruments | 1,754 | 24 | 15 | 1,793 |
| Total | 93,688 | 4,135 | 7,310 | 105,134 |
For fair value measurements categorized within level 2 and level 3, the Allianz Group uses valuation techniques consistent with the three widely used classes of valuation techniques listed in IFRS 13:
There is no one-to-one connection between valuation technique and hierarchy level. Depending on whether the valuation techniques are based on significant observable or unobservable inputs, financial instruments are classified in the fair value hierarchy.
Financial assets held for trading – Debt and equity securities The fair value is mainly determined using the market approach. In some cases, the fair value is determined based on the income approach using interest rates and yield curves observable at commonly quoted intervals.
For level 2, the fair value is mainly determined based on the income approach using present value techniques and the Black-Scholes-Merton model. Primary inputs to the valuation include volatilities, interest rates, yield curves, and foreign exchange rates observable at commonly quoted intervals.
For level 3, derivatives are mainly priced by third-party vendors. Controls are in place to monitor the valuations of these derivatives. Valuations are mainly derived based on the income approach.
The fair value is mainly determined using net asset value techniques for funds and the market approach.
For level 2, the fair value is determined using the market approach. For level 3, equity securities mainly represent unlisted equity securities measured at cost.
Available-for-sale investments – Debt securities Debt securities include:
The valuation techniques for these debt securities are similar. For level 2 and level 3, the fair value is determined using the market and the income approach. Primary inputs to the market approach are quoted prices for identical or comparable assets in active markets where the comparability between security and benchmark defines the fair value level. The income approach in most cases means a present value technique where either the cash flow or the discount curve is adjusted to reflect credit risk and liquidity risk. Depending on the observability of these risk parameters in the market, the security is classified as level 2 or level 3.
For level 2, the fair value is mainly determined using the market approach or net asset value techniques for funds. For certain private equity investments, the funds are priced based on transaction prices using the cost approach. As there are only few holders of these funds, the market is not liquid and transactions are only known to participants.
For level 3, the fair value is mainly determined using net asset values. The net asset values are based on the fair value measurement of the underlying investments and are mainly provided by fund managers. For certain level 3 equity securities, the capital invested is considered to be a reasonable proxy for the fair value.
Comprehensive Income
44 Consolidated Statements of Changes in Equity
45 Consolidated Statements of Cash Flows 47 Notes
For level 2, the fair value is determined using the market or the income approach. For the income approach, primary observable inputs include yield curves observable at commonly quoted intervals.
For level 3, the fair value is mainly determined based on the net asset value.
Financial liabilities for unit-linked contracts are valued based on their corresponding assets.
The fair value of the derivatives is mainly determined based on the income approach using present value techniques. Primary inputs include yield curves observable at commonly quoted intervals. The derivatives are mainly used for hedging purposes. Certain derivatives are priced by Bloomberg functions, such as Black-Scholes Option Pricing or the swap manager tool.
For level 2, the fair value is mainly determined using the income approach. Valuation techniques applied for the income approach mainly include discounted cash flow models as well as the Black-Scholes-Merton model. Main observable input parameters include volatilities, yield curves observable at commonly quoted intervals and credit spreads observable in the market.
For level 3, the fair value is mainly determined based on the income approach using deterministic discounted cash flow models. A significant proportion of derivative liabilities represent derivatives embedded in certain life insurance and annuity contracts. Significant non-market observable input parameters include mortality rates and surrender rates.
The fair value is mainly determined based on the income approach using present value techniques. Primary inputs comprise swap curves, share prices and dividend estimates.
For level 2, the fair value is mainly determined using the income approach. Primary inputs include interest rates and yield curves observable at commonly quoted intervals.
Financial liabilities for puttable equity instruments are generally required to be recorded at the redemption amount with changes recognized in income. For level 2, the fair value is mainly determined based on the market approach and the income approach.
In general, financial assets and liabilities are transferred from level 1 to level 2 when liquidity, trade frequency and activity are no longer indicative of an active market. Conversely, the same policy applies for transfers from level 2 to level 1.
Equity securities within available-for-sale investments classified as level 3 mainly comprise private equity fund investments as well as alternative investments of the Allianz Group and are in most cases delivered as net asset values by the fund managers (€ 5.6 bn). The net asset values are calculated using material, non-public information about the respective private equity companies. The Allianz Group has only limited insight into the specific inputs used by the fund managers and hence a narrative sensitivity analysis is not applicable. The fund's asset manager generally prices the underlying single portfolio companies in line with the International Private Equity and Venture Capital Valuation (IPEV) guidelines using discounted cash flow (income approach) or multiple methods (market approach). For certain investments, the capital invested is considered to be a reasonable proxy for the fair value. In these cases, sensitivity analyses are also not applicable.
Corporate bonds within available-for-sale investments classified as level 3 are mainly priced based on the income approach (€ 5.6 bn). The primary non-market observable input used in the discounted cash flow method is an option adjusted spread taken from a benchmark security. A significant yield increase of the benchmark securities in isolation could result in a decreased fair value, while a significant yield decrease could result in an increased fair value. However, a 10% stress of the main non-market observable inputs has only an immaterial impact on fair value.
Financial liabilities held for trading mainly include embedded derivative financial instruments relating to annuity products that are priced internally using discounted cash flow models (€ 8.1 bn). A significant decrease (increase) in surrender rates, mortality rates or the utilization of annuitization benefits could result in a higher (lower) fair value. For products with a high death benefit, surrender rates may show an opposite effect. However, a 10% stress of the main nonmarket observable inputs has only an immaterial impact on fair value.
The following table shows the quantitative description of valuation technique(s) and input(s) used for the level 3 portfolios described above.
| € mn | ||||
|---|---|---|---|---|
| Description | Fair value as of | 31 March 2015 Valuation technique(s) | Non-market observable input(s) |
Range |
| Available-for-sale investments | ||||
| Equity securities | 5,628 Net asset value | n/a | n/a | |
| Corporate bonds | 5,600 Discounted cash flow method | Option adjusted spread | 100 bps–432 bps | |
| Financial liabilities held for trading | ||||
| Derivative financial instruments | 8,068 | |||
| Fixed-indexed annuities | 6,073 Discounted cash flow method | Annuitizations | 0%–25% | |
| Surrenders | 0%–25% | |||
| Mortality | n/a1 | |||
| Withdrawal benefit election | 0%–50% | |||
| Volatility | n/a | |||
| Variable annuities | 1,995 Discounted cash flow method | Surrenders | 0.5%–35% | |
| Mortality | n/a1 |
1 Presentation not meaningful. Mortality assumptions are mainly derived from the Annuity 2000 Mortality Table.
Consolidated Balance Sheets Consolidated Income Statements Consolidated Statements of Comprehensive Income Consolidated Statements of Changes in Equity Consolidated Statements of Cash Flows Notes
The following tables show a reconciliation of the financial instruments carried at fair value and classified as level 3.
€ mn
| Carrying value (fair value) as of 1 January 2015 |
Additions through purchases and issues |
Net transfers into (out of) level 3 |
Disposals through sales and settlements |
|
|---|---|---|---|---|
| Financial assets | ||||
| Financial assets carried at fair value through income | ||||
| Financial assets held for trading | ||||
| Debt securities | – | – | – | – |
| Equity securities | 15 | – | – | – |
| Derivative financial instruments | 22 | 14 | – | (109) |
| Subtotal | 38 | 14 | – | (109) |
| Financial assets designated at fair value through income | ||||
| Debt securities | 19 | 4 | – | (2) |
| Equity securities | 110 | – | – | – |
| Subtotal | 129 | 4 | – | (2) |
| Available-for-sale investments | ||||
| Corporate mortgage-backed securities (residential and commercial) | 40 | – | – | (1) |
| Other asset-backed securities | 218 | – | – | (38) |
| Government and government agency bonds | 39 | 2 | – | – |
| Corporate bonds | 6,452 | 401 | (10) | (100) |
| Other debt securities | 729 | 217 | – | (21) |
| Equity securities | 6,226 | 295 | – | (246) |
| Subtotal | 13,704 | 916 | (9) | (406) |
| Financial assets for unit-linked contracts | 166 | 1 | – | (1) |
| Total financial assets at fair value | 14,037 | 935 | (9) | (518) |
€ mn
| Carrying value (fair value) as of 1 January 2015 |
Additions through purchases and issues |
Net transfers into (out of) level 3 |
Disposals through sales and settlements |
|
|---|---|---|---|---|
| Financial liabilities | ||||
| Financial liabilities held for trading | ||||
| Derivative financial instruments | 7,129 | 441 | 22 | (254) |
| Financial liabilities for unit-linked contracts | 166 | 1 | – | (1) |
| Financial liabilities for puttable equity instruments | 15 | 3 | – | (1) |
| Total financial liabilities at fair value | 7,310 | 445 | 22 | (256) |
| B | Condensed Consolidated Interim Financial Statements | |||
|---|---|---|---|---|
| 41 Consolidated Balance Sheets | 43 Consolidated Statements of | 44 Consolidated Statements of Changes | 45 Consolidated Statements of Cash Flows | |
| 42 Consolidated Income Statements | Comprehensive Income | in Equity | 47 Notes |
| Net gains (losses) in profit or loss attributable to a change in unrealized gains or losses for financial assets held at the reporting date |
Carrying value (fair value) as of 31 March 2015 |
Changes in the consolidated subsidiaries of the Allianz Group |
Foreign currency translation adjustments |
Impairments | Net gains (losses) recognized in other comprehensive income |
Net gains (losses) recognized in consolidated income statement |
|---|---|---|---|---|---|---|
| – | – | – | – | – | – | |
| 16 | – | – | – | – | – | |
| 121 | – | 6 | – | – | 187 | |
| 137 | – | 6 | – | – | 187 | |
| 23 | – | – | – | – | 2 | |
| 110 | – | – | – | – | – | |
| 134 | – | – | – | – | 2 | |
| 46 | – | 5 | – | 1 | 1 | |
| 214 | 3 | 17 | – | 6 | 8 | |
| 45 | – | 4 | – | – | – | |
| 7,550 | – | 629 | – | 148 | 29 | |
| 947 | 3 | 3 | (1) | 15 | 1 | |
| 6,781 | – | 41 | (18) | 469 | 14 | |
| 15,582 | 6 | 699 | (19) | 639 | 53 | |
| 165 | – | – | – | – | (1) | |
| 16,018 | 6 | 705 | (19) | 639 | 241 |
| Net losses (gains) in profit or loss attributable to a change in unrealized gains or losses for financial liabilities held at the reporting date |
Carrying value (fair value) as of 31 March 2015 |
Changes in the consolidated subsidiaries of the Allianz Group |
Foreign currency translation adjustments |
Impairments | Net losses (gains) recognized in other comprehensive income |
Net losses (gains) recognized in consolidated income statement |
|---|---|---|---|---|---|---|
| 8,443 | – | 894 | – | (18) | 228 | |
| 165 | – | – | – | – | (1) | |
| 18 | – | – | – | – | – | |
| 8,625 | – | 894 | – | (18) | 227 |
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 32 – Impairments of investments (net) or note 36 – Other expenses.
On 31 January 2009, certain USD-denominated CDOs were reclassified from financial assets held for trading to loans and advances to banks and customers in accordance with IAS 39.
As of 31 December 2014, the carrying amount and fair value of the CDOs was € 167 MN and € 169 MN, respectively. As of 31 March 2015, the carrying amount and fair value of the CDOs was € 176 MN and € 179 MN, respectively. For the three months ended 31 March 2015, the net profit related to the CDOs was not significant.
Basic earnings per share are calculated by dividing net income attributable to shareholders by the weighted average number of common shares outstanding for the period.
| € mn three months ended 31 March |
2015 | 2014 |
|---|---|---|
| Net income attributable to shareholders used to calculate basic earnings per share |
1,822 | 1,640 |
| Weighted average number of common shares outstanding |
454,251,291 | 453,740,069 |
| Basic earnings per share (€) | 4.01 | 3.62 |
Diluted earnings per share are calculated by dividing net income attributable to shareholders by the weighted average number of common shares outstanding for the period, both adjusted for the effects of potentially dilutive common shares. These effects arise from various share-based compensation plans of the Allianz Group.
| 2014 | |
|---|---|
| 1,822 | 1,640 |
| (3) | (20) |
| 1,819 | 1,620 |
| 454,251,291 | 453,740,069 |
| 151,836 | 3,033,129 |
| 454,403,127 | 456,773,198 |
| 4.00 | 3.55 |
| 2015 |
For the three months ended 31 March 2015, the weighted average number of common shares excludes 2,748,709 (2014: 2,759,931) treasury shares.
| as of 31 March 2015 |
as of 31 December 2014 |
|
|---|---|---|
| Germany | 40,639 | 40,692 |
| Other countries | 107,307 | 106,733 |
| Total | 147,946 | 147,425 |
As of 31 March 2015, there were no significant changes in contingent liabilities compared to the consolidated financial statements for the year ended 31 December 2014.
As of 31 March 2015, commitments outstanding to invest in private equity funds and similar financial instruments amounted to € 4,124 mn (31 December 2014: € 4,388 mn) and commitments outstanding to invest in real estate and infrastructure amounted to € 1,395 mn (31 December 2014: € 1,209 mn). Other commitments – mainly referring to a purchase obligation and sponsoring – increased from € 743 mn as of 31 December 2014 to € 807 mn as of 31 March 2015. All other commitments showed no significant changes.
Comprehensive Income
44 Consolidated Statements of Changes in Equity
The Insurance Laws (Amendment) Bill has become legally effective in the first quarter of 2015 and provides for raising the foreign investment cap in India from 26% to 49%. As per the 2001 joint venture agreement between the Allianz Group and Bajaj, the Allianz Group has the right to increase the stakes in Bajaj at pre-determined prices, if allowed under applicable laws, and subject to regulatory approvals. The Allianz Group is currently in the process of evaluating the contractual situation against the prevailing regulatory background.
During the first quarter of 2015, the Allianz Group received regulatory approval from the California Department of Insurance to sell the Fireman's Fund personal lines business to ACE. The sale was closed on 1 April 2015. As of today, the Allianz Group expects the gain on the sale, net of further restructuring expenses, to approximate € 0.3 bn.
On 21 April 2015, Allianz France S.A. called for redemption the € 400 MN 4.625% fixed to floating rate undated subordinated notes of 2005 to be effected 10 June 2015.
Munich, 11 May 2015
Allianz SE The Board of Management
We have reviewed the condensed consolidated interim 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 31 March 2015 that are part of the quarterly financial report according to § 37 x par. 3 WpHG ["Wertpapierhandelsgesetz": "German Securities Trading Act"]. The preparation of the condensed consolidated interim financial statements in accordance with those IFRS applicable to interim financial reporting as adopted by the E.U., 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 consolidated interim financial statements and on the interim group management report based on our review.
We performed our review of the condensed consolidated interim 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 consolidated interim financial statements have not been prepared, in material respects, in accordance with the IFRS applicable to interim financial reporting as adopted by the E.U., 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 consolidated interim financial statements have not been prepared, in material respects, in accordance with the IFRS applicable to interim financial reporting as adopted by the E.U., 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, 11 May 2015
KPMG AG Wirtschaftsprüfungsgesellschaft
Wirtschaftsprüfer Wirtschaftsprüfer
Klaus Becker Dr. Frank Pfaffenzeller (Independent Auditor) (Independent Auditor)
| Important dates for shareholders and analysts1 | |
|---|---|
| ____ Interim Report/Financial Results 2Q |
7 August 2015 |
| ____ Interim Report/Financial Results 3Q |
6 November 2015 |
| __________ Financial Results 2015 |
19 February 2016 |
| _____ Annual Report 2015 |
11 March 2016 |
| _______ Annual General Meeting |
4 May 2016 |
| ____ Interim Report/Financial Results 1Q |
11 May 2016 |
1 The German Securities Trading Act ("Wertpapierhandelsgesetz") obliges issuers to announce immediately any information which may have a substantial price impact. Therefore we cannot exclude that we have to announce key figures related to quarterly and fiscal year results ahead of the dates mentioned above. As we can never rule out changes of dates, we recommend checking them on the internet at www.allianz.com/financialcalendar.
Allianz SE – Königinstrasse 28 – 80802 Munich – Germany – Phone +49.89.3800-0 – [email protected] – www.allianz.com Interim Report on the internet – www.allianz.com/interim-report – Design/Concept: hw.design GmbH – Date of publication: 12 May 2015 This is a translation of the German Interim Report of Allianz Group. In case of any divergences, the German original is legally binding.
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