Annual Report • Nov 21, 2014
Annual Report
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| three months ended 30 September | nine months ended 30 September | |||||||
|---|---|---|---|---|---|---|---|---|
| 2014 | 2013 | Change from previous year |
2014 | 2013 | Change from previous year |
More details on page |
||
| Income statement | ||||||||
| Total revenues1 | € mn | 28,781 | 25,144 | 14.5% | 92,201 | 83,968 | 9.8% | 6 |
| Operating profit2 | € mn | 2,650 | 2,518 | 5.2% | 8,144 | 7,682 | 6.0% | 7 |
| Net income2 | € mn | 1,687 | 1,530 | 10.2% | 5,285 | 5,007 | 5.6% | 8 |
| thereof: attributable to shareholders | € mn | 1,606 | 1,445 | 11.2% | 5,002 | 4,740 | 5.5% | 8 |
| Business segments3 | ||||||||
| Property-Casualty | ||||||||
| Gross premiums written | € mn | 11,254 | 10,650 | 5.7% | 37,317 | 36,602 | 2.0% | 12 |
| Operating profit2 | € mn | 1,422 | 1,235 | 15.2% | 4,257 | 3,733 | 14.0% | 13 |
| Net income2 | € mn | 1,083 | 796 | 36.0% | 2,697 | 2,814 | (4.1)% | 15 |
| Combined ratio | % | 93.5 | 94.8 | (1.3)%-p | 93.6 | 95.0 | (1.4)%-p | 13 |
| Life/Health4 | ||||||||
| Statutory premiums | € mn | 15,853 | 12,698 | 24.9% | 49,977 | 41,659 | 20.0% | 22 |
| Operating profit2 | € mn | 790 | 769 | 2.8% | 2,655 | 2,293 | 15.8% | 23 |
| Net income2 | € mn | 530 | 562 | (5.6)% | 1,891 | 1,664 | 13.6% | 24 |
| Margin on reserves | bps | 61 | 66 | (5) | 70 | 66 | 4 | 24 |
| Asset Management4 | ||||||||
| Operating revenues | € mn | 1,618 | 1,703 | (5.0)% | 4,742 | 5,429 | (12.7)% | 30 |
| Operating profit2 | € mn | 694 | 755 | (8.1)% | 2,015 | 2,458 | (18.0)% | 30 |
| Net income2 | € mn | 438 | 482 | (9.2)% | 1,263 | 1,538 | (17.9)% | 30 |
| Cost-income ratio | % | 57.1 | 55.7 | 1.4%-p | 57.5 | 54.7 | 2.8%-p | 30 |
| Corporate and Other | ||||||||
| Total revenues | € mn | 135 | 131 | 2.6% | 405 | 412 | (1.7)% | – |
| Operating result2 | € mn | (248) | (229) | (8.1)% | (689) | (742) | 7.1% | 32 |
| Net income2 | € mn | (311) | (307) | (1.5)% | (429) | (981) | 56.3% | 32 |
| Balance sheet as of 30 September5 | ||||||||
| Total assets6 | € mn | 784,516 | 711,079 | 10.3% | 784,516 | 711,079 | 10.3% | 38 |
| Shareholders' equity | € mn | 58,199 | 50,083 | 16.2% | 58,199 | 50,083 | 16.2% | 37 |
| Non-controlling interests | € mn | 2,890 | 2,765 | 4.5% | 2,890 | 2,765 | 4.5% | 37 |
| Share information | ||||||||
| Basic earnings per share | € | 3.54 | 3.19 | 11.0% | 11.02 | 10.46 | 5.4% | 108 |
| Diluted earnings per share | € | 3.52 | 3.14 | 11.9% | 10.95 | 10.33 | 6.0% | 108 |
| Share price as of 30 September5 | € | 128.35 | 130.35 | (1.5)% | 128.35 | 130.35 | (1.5)% | 1 |
| Market capitalization as of 30 September5 | € mn | 58,592 | 59,505 | (1.5)% | 58,592 | 59,505 | (1.5)% | – |
| Other data | ||||||||
| Standard&Poor's rating7 | AA Stable | AA Stable | AA Stable | AA Stable | ||||
| Outlook | Outlook | – | Outlook | Outlook | – | – | ||
| Conglomerate solvency ratio5, 8, 9 |
% | 184 | 182 | 3%-p | 184 | 182 | 3%-p | 37 |
| Total assets under management as of 30 September4, 5 |
€ Bn | 1,872 | 1,770 | 5.8% | 1,872 | 1,770 | 5.8% | 28 |
| thereof: third-party assets under management as of |
30 September5 € Bn 1,411 1,361 3.7% 1,411 1,361 3.7% 28 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).
5 2013 figures as of 31 December 2013.
6 Prior year figure has been restated to reflect the implementation of IFRS 10. For further information, please refer to note 2 to the condensed consolidated interim financial statements.
2 The Allianz Group uses operating profit and net income as key financial indicators to assess the perfor-7 Insurer financial strength rating, affirmed on 4 November 2013.
mance 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 Effective 1 January 2014, the Allianz Group allocated certain entities from the reportable segment Asset Management to the reportable segments German Speaking Countries, Western&Southern Europe and Growth Markets within the business segment Life/Health and to the reportable segment Banking.
8 Solvency according to the E.U. Financial Conglomerates Directive. Conglomerate solvency ratio as of 30 September 2014 was adjusted for the potential calls of hybrid capital (subordinated bonds) of € 1.4 bn in the coming year. Excluding this adjustment, the solvency ratio would be 190% as of 30 September 2014.
9 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 potential calls of hybrid capital (subordinated bonds) of € 1.4 bn in the coming year, the solvency ratio as of 30 September 2014 would be 176% (31 December 2013: 173%).
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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 – 46
| A | Interim Group Management Report |
|---|---|
| --- | --------------------------------- |
28 Asset Management
5 Executive Summary
37 Balance Sheet Review 44 Reconciliations
Third quarter 2014
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 30 September |
2014 | 2013 |
|---|---|---|
| Total revenues | 28,781 | 25,144 |
| Operating profit | 2,650 | 2,518 |
| Net income | 1,687 | 1,530 |
| Solvency ratio1, 2, 3 in % |
184 | 182 |
Overall, global economic activity continued to trend moderately upwards in the third quarter of 2014. However, both inter-regional and intra-regional growth differentials remained substantial. This holds true, in particular, for Latin America and emerging Asia, but also for North America and Europe.
In Europe, the European Central Bank (ECB) cut the main refinancing rate from 0.15% to 0.05%, raised the penalty deposit rate for banks to minus 0.2%, and announced in September that it is considering purchasing asset-backed securities and covered bonds. In the United States, the Federal Reserve (Fed) continued to gradually lower the monthly volume of its asset-purchasing program. The increasingly divergent monetary policy stance of the ECB and the Fed, together with stronger economic growth in the United States than in the Eurozone, contributed to a pronounced weakening of the Euro against the U.S. Dollar. The U.S. Dollar to Euro exchange rate was 1.26 at the end of the third quarter (1.37 at the end of the second quarter).
Yields on 10-year German government bonds continued to decline and closed the quarter at 0.9% – one percentage point lower than at the beginning of the year. After slowing in the second quarter, spreads on government bonds in the Eurozone periphery continued to tighten in the third quarter of 2014. This was in spite of lower benchmark bond yields and rising doubts about the robustness of the economic recovery in several European economies, as well as geopolitical risks related to Ukraine and the Middle East. Equity markets in most emerging and mature economies ended the third quarter below the levels at the beginning of this three-month-period.
The insurance industry has developed fairly well in 2014, not least due to the relatively benign natural catastrophe environment: insured natural catastrophe losses were markedly below the longterm average. However, headwinds remained, namely ultra-low investment yields and tighter regulation.
1 Solvency according to the E.U. Financial Conglomerates Directive. Conglomerate solvency ratio as of 30 September 2014 was adjusted for the potential calls of hybrid capital (subordinated bonds) of € 1.4 bn in the coming year. Excluding this adjustment, the solvency ratio would be 190% as of 30 September 2014.
2 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 potential calls of hybrid capital (subordinated bonds) of € 1.4 bn in the coming year, the solvency ratio as of 30 September 2014 would be 176% (31 December 2013: 173%).
3 2013 figure as of 31 December 2013.
Our total revenues grew 14.5% to € 28.8 bn. On an internal basis1, revenues increased by 14.3%. This was largely driven by our Life/Health business segment, which recorded strong growth in fixed-indexed annuity and unit-linked sales in the United States and Italy, respectively. Revenues from our Property-Casualty business segment also increased while operating revenues in our Asset Management business declined modestly.
Our operating profit increased by 5.2% to € 2,650 mn, driven by a higher underwriting result from our Property-Casualty business. Our Life/Health business recorded solid operating performance. Operating profit from our Asset Management business segment declined mainly due to lower management and loading fees. The decrease in the operating result from the Corporate and Other business segment was attributable to Holding&Treasury.
Our net income increased by 10.2% to € 1,687 mn due to the higher operating profit and lower non-operating impairments. Net income attributable to shareholders and non-controlling interests amounted to € 1,606 mn (3Q 2013: € 1,445 mn) and € 81 mn (3Q 2013: € 85 mn) respectively.
Shareholders' equity reached a new high of € 58.2 bn, an increase of € 8.1 bn compared to 31 December 2013. Our conglomerate solvency ratio strengthened by three percentage points to 184%.2
� mn
Property-Casualty gross premiums written were up 5.7% to € 11.3 bn. On an internal basis, our gross premiums written increased by 4.7%. This was mainly due to a favorable volume effect of 4.0% and a positive price effect of 0.8 %. We recorded strong growth at AGCS, in the United Kingdom and Germany.
Life/Health statutory premiums amounted to € 15.9 bn, a strong increase of 25.0% on an internal basis, driven by single premium unitlinked products in Italy and Taiwan as well as fixed-indexed annuity sales in the United States.
Asset Management operating revenues went down by € 85 mn to € 1,618 mn. This was largely due to lower management and loading fees, mainly resulting from lower margins, but also reflects the allocation of certain entities to other business segments.4 Third-party net outflows amounted to € 47 bn in the third quarter of 2014.
Total revenues from our Banking operations (reported in our Corporate and Other business segment) increased slightly to € 135 mn.
1 Internal total revenue growth excludes the effects of foreign currency translation as well as acquisitions and disposals. Please refer to page 45 for a reconciliation of nominal total revenue growth to internal total revenue growth for each of our business segments and the Allianz Group as a whole.
2 Conglomerate solvency ratio as of 30 September 2014 was adjusted for the potential calls of hybrid capital (subordinated bonds) of € 1.4 bn in the coming year. Excluding this adjustment, the solvency ratio would be 190% as of 30 September 2014.
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).
4 Effective 1 January 2014, the Allianz Group allocated certain entities from the reportable segment Asset Management to the reportable segments German Speaking Countries, Western&Southern Europe and Growth Markets within the business segment Life/Health and to the reportable segment Banking.
37 Balance Sheet Review
2014 to 2013 first nine months comparison
We generated total revenues of € 92.2 bn, an increase of 9.8 % compared to the first nine months of 2013. On an internal basis, revenues grew by 10.8%. We recorded remarkable growth in savings products premiums in our Life/Health business and higher volume-driven gross premiums written in our Property-Casualty business segment. Lower operating revenues mainly due to decreased performance fees and lower average third party-assets under management in the Asset Management business segment slightly offset this growth.
Our Property-Casualty operating profit increased by € 187 mn – or 15.2% – to € 1,422 mn. This was mainly driven by the absence of natural catastrophe impacts in the third quarter of 2014. Operating investment income (net) also contributed positively.
Life/Health operating profit increased slightly by € 22 mn or 2.8% to € 790 mn. The allocation of certain entities previously reflected in the business segment Asset Management to the business segment Life/Health drove this improvement.
Our Asset Management operating profit decreased 8.1 % to € 694 mn, a decrease of 5.0 % on an internal basis. This was mainly because of the lower management and loading fees. Our cost-income ratio increased by 1.4 percentage points.
In Corporate and Other the operating loss increased by € 19 mn to € 248 mn, driven by our reportable segment Holding&Treasury.
Operating profit increased by € 461 mn to € 8,144 mn. This was attributable to our Property-Casualty business segment, which benefited from a strong underwriting result driven by the benign natural catastrophe environment and our Life/Health business segment due to an improved operating investment result. This was partly offset by the operating profit decline in our Asset Management business segment mainly as a result of decreased performance fees and lower average assets under management.
Our non-operating result decreased by € 89 mn to a loss of € 331 mn, mainly driven by a reclassification of tax benefits to operating profit. This was partly offset by an improved non-operating investment result.
Non-operating income from financial assets and liabilities carried at fair value through income (net) decreased by € 54 mn to a loss of € 54 mn. This was mainly due to unfavorable impacts of hedgingrelated activities.
Non-operating realized gains and losses (net) increased from € 133 mn to € 184 mn due to higher realizations on debt securities.
Non-operating impairments of investments (net) decreased from € 135 mn to € 50 mn, mainly as a result of higher equity impairments in the third quarter of 2013.
Non-operating interest expenses from external debt increased slightly from € 207 mn to € 212 mn as the third quarter of 2013 was exceptionally low because one bond was redeemed in the second quarter of 2013 and a new bond was issued in the fourth quarter of 2013.
Reclassification of tax benefits had a negative impact on our nonoperating result of € 158 mn in favor of the operating result. Tax benefits that are attributable to policyholders reduce tax expenses. In the segment reporting, the tax benefits are reclassified and shown within operating profit in order to adequately reflect policyholder participation.1
Our non-operating result declined by € 256 mn to a loss of € 485 mn. This was largely driven by a lower non-operating investment result due to lower non-operating realized gains and higher unfavorable hedging-related impacts in the first nine months of 2014, the reclassification of tax benefits in the third quarter of 2014 and the partly offsetting impact of the one-off effect from pension revaluation2 in the first quarter of 2014.
1 For further information, please refer to the paragraph on 'Reportable segments measure of profit and loss' within note 4 to the condensed consolidated interim financial statements.
2 For further information on the one-off effect from pension revaluation, please refer to note 4 to the condensed consolidated interim financial statements.
Income taxes decreased by € 114 mn to € 632 mn, despite higher income before income taxes. The effective tax rate decreased to 27.2% (3Q 2013: 32.8 %). The lower tax rate is especially due to one-off tax benefits for current and previous years amounting in total to € 158 mn as previously described, that are fully allocated to policyholders. Overall, there is no impact on operating profit or on shareholders' net income. These one-off tax benefits result from a favorable court decision received in the third quarter of 2014 for a trial initiated by Allianz Leben in Germany. Absent this effect, the effective tax rate would have been approximately 32 %. In the first nine months of 2014, income taxes decreased by € 74 mn to € 2,373 mn and the effective tax rate decreased to 31.0 % (9M 2013: 32.8%), mainly due to one-off tax benefits.
Net income increased by € 157 mn to € 1,687 mn, driven primarily by our higher operating result and lower non-operating impairments. Net income attributable to shareholders and non-controlling interests amounted to € 1,606 mn (3Q 2013: € 1,445 mn) and € 81 mn (3Q 2013: € 85 mn), respectively. The largest non-controlling interests in net income related to Euler Hermes and PIMCO.
Basic earnings per share increased from € 3.19 to € 3.54 and diluted earnings per share increased from € 3.14 to € 3.52. For further information on earnings per share, please refer to note 39 to the condensed consolidated interim financial statements.
Net income increased by € 279 mn to € 5,285 mn, driven primarily by our higher operating result. Net income attributable to shareholders and non-controlling interests amounted to € 5,002 mn (9M 2013: € 4,740 mn) and € 283 mn (9M 2013: € 267 mn), respectively.
22 Life/Health Insurance Operations 35 Outlook
37 Balance Sheet Review
€ mn
| three months ended 30 September | nine months ended 30 September | |||
|---|---|---|---|---|
| 2014 | 2013 | 2014 | 2013 | |
| Total revenues1 | 28,781 | 25,144 | 92,201 | 83,968 |
| Premiums earned (net) Operating investment result |
17,035 | 16,637 | 50,421 | 49,600 |
| Interest and similar income | 5,299 | 5,129 | 15,976 | 15,709 |
| Operating income from financial assets and liabilities carried at fair value through income (net) |
(177) | (562) | (449) | (1,491) |
| Operating realized gains/losses (net) | 709 | 557 | 2,272 | 2,169 |
| Interest expenses, excluding interest expenses from external debt | (103) | (93) | (303) | (306) |
| Operating impairments of investments (net) | (106) | (27) | (453) | (208) |
| Investment expenses | (261) | (227) | (693) | (653) |
| Subtotal | 5,360 | 4,777 | 16,352 | 15,221 |
| Fee and commission income | 2,590 | 2,583 | 7,536 | 8,016 |
| Other income | 37 | 42 | 160 | 144 |
| Claims and insurance benefits incurred (net) | (12,368) | (11,874) | (36,434) | (35,484) |
| Change in reserves for insurance and investment contracts (net)2 | (3,419) | (3,248) | (10,457) | (10,417) |
| Loan loss provisions | (7) | (18) | (31) | (47) |
| Acquisition and administrative expenses (net), excluding acquisition-related | ||||
| expenses and one-off effect from pension revaluation | (5,839) | (5,581) | (16,995) | (16,831) |
| Fee and commission expenses | (847) | (788) | (2,459) | (2,354) |
| Operating amortization of intangible assets | (5) | – | (14) | – |
| Restructuring charges | (1) | 15 | 8 | (84) |
| Other expenses | (46) | (28) | (101) | (82) |
| Reclassification of tax benefits Operating profit (loss) |
158 2,650 |
– 2,518 |
158 8,144 |
– 7,682 |
| Non-operating investment result | ||||
| Non-operating income from financial assets and liabilities carried at fair value through income (net) |
(54) | (1) | (155) | 2 |
| Non-operating realized gains/losses (net) | 184 | 133 | 552 | 859 |
| Non-operating impairments of investments (net) | (50) | (135) | (139) | (270) |
| Subtotal | 79 | (3) | 258 | 590 |
| Income from fully consolidated private equity investments (net) | (11) | (3) | (16) | (11) |
| Interest expenses from external debt | (212) | (207) | (623) | (680) |
| Acquisition-related expenses | – | – | 6 | (41) |
| One-off effect from pension revaluation | – | – | 117 | – |
| Non-operating amortization of intangible assets | (29) | (30) | (69) | (87) |
| Reclassification of tax benefits | (158) | – | (158) | – |
| Non-operating items | (331) | (242) | (485) | (229) |
| Income (loss) before income taxes | 2,319 | 2,277 | 7,658 | 7,453 |
| Income taxes | (632) | (746) | (2,373) | (2,447) |
| Net income (loss) | 1,687 | 1,530 | 5,285 | 5,007 |
| Net income (loss) attributable to: | ||||
| Non-controlling interests | 81 | 85 | 283 | 267 |
| Shareholders | 1,606 | 1,445 | 5,002 | 4,740 |
| Basic earnings per share in € | 3.54 | 3.19 | 11.02 | 10.46 |
| Diluted earnings per share in € | 3.52 | 3.14 | 10.95 | 10.33 |
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 For the three months ended 30 September 2014, expenses for premium refunds (net) in the business segment Property-Casualty of € (93) mn (3Q 2013: € (48) mn) are included. For the nine months ended 30 September 2014, expenses for premium refunds (net) in the business segment Property-Casualty of € (224) mn (9M 2013: € (148) mn) are included.
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 2013. The Allianz Group's management feels comfortable with the Group's overall risk profile and has confidence in the effectiveness of its risk management framework to meet the challenges of a rapidly changing environment as well as day-to-day business needs. The risk profile described in the latest Risk and Opportunity Report in general remained unchanged.
While the European sovereign debt crisis has receded, we consider the current state of the economy, combined with the persisting low interest rate environment in the Eurozone, as a rising risk for achieving our investment targets. The significant increase in geopolitical uncertainties during the current year as well as the potential spread of Ebola 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. This may affect our business environment and would not normally be associated with our core operating activities.
Many countries within the Eurozone are currently faced with a sputtering economy and lower inflation rates addressed by the European Central Bank with its accommodative monetary policy. As a result, financial markets are facing an environment with historically low interest rates and lower risk premia – with investors looking for riskier alternatives to highly rated fixed income investments. The recent weakening in the Eurozone's growth momentum, the implementation risk of long-term structural reforms in key Eurozone countries and the uncertainty about the future path of U.S. monetary policy may lead to higher market volatility accompanied by a flight to quality.
The recent increase in geopolitical risks, as well as those resulting from U.S./E.U. sanctions against Russia during the third quarter, are manageable for the Allianz Group since our direct investment exposure to this region remains relatively small in the context of our overall investment portfolio. Nevertheless, we are monitoring these developments closely since a significant deterioration may lead to spillover effects on global markets, which could have a negative impact on our business and risk profile.
The further spread of Ebola also represents an indirect risk, with its impact on the global economy and trade in an extreme scenario.
Over the past years Allianz SE and its operating entities have developed operational contingency plans for various crisis scenarios and have continued to conduct scenario analyses on a regular basis to bolster our financial and operational resilience to strong shock scenarios. In addition, we aim to further improve 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 remain priorities for our management.
In July 2013, the Financial Stability Board designated Allianz as one of nine G-SII firms (Global Systemically Important Insurers). In November 2013, the European Trialogue process involving the Council of the European Union, the European Commission and the European Parliament came to an agreement on 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. This was approved by the European Parliament in March 2014. Although the Commission's draft for the delegated regulation of Solvency II was published in October 2014, the final approval is outstanding and technical standards as well as guidelines for further clarifications are still expected.
Since the deadline for the formal application of our internal model for Solvency II is approaching, this situation creates uncertainties for our approval process, especially if the final rules deviate from the current ones. The remaining uncertainty of future regulatory requirements (Solvency II as well as those applying for G-SIIs) also create uncertainty in terms of ultimate capital requirements for Allianz.
In addition, due to the market value balance sheet approach, the Solvency II regime will lead to higher volatility in regulatory capital requirements compared to Solvency I. Finally, the potential for a multiplicity of different regulatory regimes, capital standards and reporting requirements will increase operational costs.
5 Executive Summary
28 Asset Management
37 Balance Sheet Review 44 Reconciliations
For information on events after the balance sheet date, please refer to note 41 to the condensed consolidated interim financial statements.
The Allianz Group's business operations and structure are described in the Business Operations and Markets chapter in our Annual Report 2013. Effective 1 January 2014, the Allianz Group allocated certain entities from the reportable segment Asset Management to the reportable segments German Speaking Countries, Western &Southern Europe and Growth Markets within the business segment Life/Health and to the reportable segment Banking.
We also tackled difficult issues, such as the restructuring of Fireman's Fund. AGCS will be taking over the commercial Property&Casualty business of our subsidiary in the United States. The new structure will allow us to better explore growth opportunities and utilize the potential of our strong Allianz brand. As far as the business with retail customers is concerned, we are currently looking into various options.
The Supervisory Board of Allianz SE has agreed to the request of Michael Diekmann to not further extend his board appointment beyond the Annual General Meeting (AGM) on 6 May 2015. He will remain Chairman of the Board of Management up to that day. Oliver Bäte has been appointed as new CEO of Allianz SE with effect from 7 May 2015. His contract has been extended until 30 September 2019. Oliver Bäte will continue to be responsible for Global Property and Casualty up to the AGM 2015. The Supervisory Board has also agreed to the request of Clement Booth to not further extend his board appointment. His mandate will end by 31 December 2014. Upon mutual agreement and in keeping with his request, the board mandate of Gary Bhojwani will end by 31 December of this year. The Supervisory Board appointed Dott. Sergio Balbinot as a member of the Board of Management of Allianz SE for a duration of four years starting 1 January 2015. Sergio Balbinot will take over responsibility for the insurance business in the countries of western and southern Europe (France, Benelux, Italy, Greece, Turkey). Also effective beginning of next year Dr.Axel Theis has been appointed as a member of the Board of Management of Allianz SE with a duration of four years. He will be in charge of the global industrial insurance business, credit insurance, reinsurance and the insurance business in Ireland and Great Britain. Starting 7 May 2015 he will also take over responsibility for Global Property and Casualty from Oliver Bäte. Manuel Bauer's appointment has been extended for another year until the end of 2015. The appointments of Dr.Dieter Wemmer and Dr.Werner Zedelius have been extended by three years and the appointment of Dr.Helga Jung by five years. Starting 2015 Manuel Bauer will also take
over responsibility for the insurance business in Australia and as of the same date Jay Ralph will take over responsibility for the life insurance business in the United States in addition to his current responsibilities.
The Allianz Group's strategy is described in the Strategy and Steering chapter in our Annual Report 2013. 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 2013. Information on our brand can also be found in the Progress in Sustainable Development chapter in our Annual Report 2013.
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.
Third quarter 2014
| € mn three months ended 30 September |
2014 | 2013 |
|---|---|---|
| Gross premiums written | 11,254 | 10,650 |
| Operating profit | 1,422 | 1,235 |
| Net income | 1,083 | 796 |
| Loss ratio in % | 65.9 | 67.2 |
| Expense ratio in % | 27.6 | 27.6 |
| Combined ratio in % | 93.5 | 94.8 |
On a nominal basis, we recorded gross premiums written of € 11,254 MN, up € 603 MN – or 5.7% – compared to the third quarter of 2013. Negative foreign currency translation effects amounted to only € 24 MN, largely due to the depreciation of the Argentine Peso and the Turkish Lira against the Euro, which more than offset the positive effects from the British Pound.2 Consolidation/deconsolidation effects were positive at € 123 MN, mainly because of the acquisition of specific distribution activities of Unipol effective at the beginning of the third quarter of 2014. Additional positive effects are expected from the purchase of an in-force portfolio as of the fourth quarter 2014.
On an internal basis, our gross premiums written increased by 4.7% due to a favorable volume effect of 4.0% and a positive price effect of 0.8%. We recorded strong growth at AGCS, in the United Kingdom and Germany.
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.
2 Based on the average exchange rates in 2014 compared to 2013.
To analyze internal premium growth in terms of price and volume, we use four clusters based on 3Q 2014 internal growth over 3Q 2013:
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.
5 Executive Summary
37 Balance Sheet Review 44 Reconciliations
In Asia-Pacific gross premiums increased to € 201 MN. The strong growth of 25.1 % on an internal basis was mainly due to a volume increase in our motor business in Malaysia.
In the United Kingdom gross premiums grew by € 147 MN to € 690 MN. The internal growth of 18.1% was driven by our motor and pet insurance business as well as tariff hikes in our commercial lines.
Allianz Worldwide Partners recorded gross premiums of € 656 MN – up 9.2% on an internal basis. This reflected a rise in volume in our U.S., French, New Zealand and U.K. travel business.
In Australia gross premiums stood at € 799 MN. The increase of 5.5% was largely a result of higher volumes in our home and worker's compensation business.
In Germany gross premiums were at € 1,979 MN. The internal growth of 4.1% was largely driven by our motor retail and commercial non-motor business with positive price and volume effects.
In Latin America gross premiums went up to € 581 MN. The 14.7 % growth on an internal basis was mostly due to greater volume in our motor business in Argentina.
In Credit Insurance gross premiums stood at € 530 MN, a rise of 7.9% with positive volume effects in the U.S., Asia-Pacific and Middle East.
At AGCS gross premiums amounted to € 1,365 MN – up 10.3% on an internal basis. The rise was mainly driven by higher volumes through new business and upsells in our liability and engineering lines. The negative price effects in our aviation and energy lines were partly offset by positive trends in our marine business.
In Spain gross premiums totaled € 437 MN. The growth of 5.0% was the result of a volume increase across all our lines of business.
In the United States we recorded gross premiums of € 612 MN. The decrease of 6.0% on an internal basis was the result of a decline in volumes in our commercial lines and lower commodity prices for crop.
In Switzerland gross premiums totaled € 259 MN. A positive volume effect, particularly in our motor business, could not compensate the negative price impact and led to a decrease of 2.6% on an internal basis.
In France gross premiums were € 962 MN – a slight decrease of 0.1% on an internal basis. The negative volume effects outweighed positive price effects.
In Central and Eastern Europe gross premiums contracted to € 522 MN – a decline of 12.3% on an internal basis. The negative development was largely driven by a drop in volume in our motor business in Russia, as we reduced our business activity in this region. Positive developments in Romania, Slovakia and the Czech Republic could not offset the overall negative impact.
In Italy gross premiums fell by 0.6% to € 933 MN. This was attributable to falling prices as well as regulatory changes weighing on volumes, particularly in motor business.
On a nominal basis, gross premiums increased by 2.0%. Adjusted for foreign currency translation and (de-)consolidation effects, this represents a growth of 3.0%. This was comprised of a positive volume effect of 2.6% and a positive price effect of 0.3%.
| € mn | threemonths ended 30 September |
ninemonths ended 30 September |
||
|---|---|---|---|---|
| 2014 | 2013 | 2014 | 2013 | |
| Underwritingresult | 650 | 501 | 1,871 | 1,397 |
| Operatinginvestmentincome (net) | 770 | 718 | 2,323 | 2,266 |
| Otherresult1 | 2 | 16 | 64 | 70 |
| Operatingprofit | 1,422 | 1,235 | 4,257 | 3,733 |
1 Consists offee andcommissionincome/expenses, otherincome/expenses andrestructuringcharges.
Operating profit increased by € 187 MN, or 15.2 % to € 1,422 MN. This was mainly driven by the absence of major natural catastrophe impacts in the third quarter of 2014.
Our underwriting result grew by € 150 MN to € 650 MN due to an improvement in our accident year loss ratio, which stemmed from significantly lower losses from natural catastrophe events. This result was partially offset by a higher impact from single large claims and by a lower run-off contribution compared to the third quarter of 2013.
The combined ratio improved by 1.3 percentage points to 93.5%.
| € mn | |||||
|---|---|---|---|---|---|
| threemonths ended 30 September |
ninemonths ended 30 September |
||||
| 2014 | 2013 | 2014 | 2013 | ||
| Premiums earned(net) | 11,180 | 10,768 | 32,291 | 31,459 | |
| Accident year claims | (7,656) | (7,703) | (22,088) | (22,246) | |
| Previous year claims(run-off) | 290 | 470 | 909 | 1,216 | |
| Claims andinsurancebenefits incurred(net) |
(7,366) | (7,234) | (21,179) | (21,030) | |
| Acquisitionandadministrative expenses(net), excludingone-off effectfrompensionrevaluation |
(3,089) | (2,976) | (9,037) | (8,861) | |
| Change inreservesforinsurance and investment contracts(net)(without expensesforpremiumrefunds)1 |
(74) | (58) | (204) | (170) | |
| Underwritingresult | 650 | 501 | 1,871 | 1,397 |
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.
Our accident year loss ratio stood at 68.5% – a 3.1 percentage point improvement compared to the previous year's figure. This is predominantly the result of a drop in losses from natural catastrophes from € 464 MN to € 7 MN, a decrease of 4.2 percentage points to 0.1%.
Excluding losses from natural catastrophes, our accident year loss ratio was at 68.4 %, up 1.2 percentage points compared to the third quarter of 2013. This was mainly driven by higher losses from single large claims and the worsening in Brazil and Italy, which offset the favorable development in attritional losses in Germany and France.
The following operations contributed positively to our accident year loss ratio:
Germany: 3.0 percentage points. This was largely because of a reduced burden from natural catastrophe events compared to the third quarter of the previous year - which was severely impacted by the storms Andreas and Ernst/Franz. The improvement was further supported by a lower attritional claims ratio and favorable price momentum, particularly in our retail motor and commercial nonmotor business.
Reinsurance: 1.3 percentage points. The improvement resulted from lower losses from natural catastrophes.
France: 0.5 percentage points. This was driven by an improvement in the attritional loss ratio mainly supported by lower claim frequencies in motor and property.
The following operations contributed negatively to the development of our accident year loss ratio:
Latin America: 0.5 percentage points. The negative impact stemmed mainly from our health and motor business in Brazil.
Italy: 0.4 percentage points. The increase in the accident year loss ratio is due to declining average premiums in motor against the background of a softening market that could not be compensated for by a low total claims frequency and an improved attritional motor claims severity. However, the loss ratio remains at a very favorable level.
Australia: 0.3 percentage points. The deterioration is driven by a negative trend in attritional claims severity in motor and property.
Our run-off result decreased by € 179 MN to € 290 MN– resulting in a run-off ratio of 2.6%. Reserve releases across most OEs were reduced by a 1.6 percentage point negative impact from reserve strengthening in the United States in the current quarter.
In the third quarter of 2014, total expenses amounted to € 3,089 MN, compared to € 2,976 MN in the same period of 2013. Our expense ratio was stable at 27.6% as the improvement in our run-rate was offset by integration costs in Italy for the acquisition of specific distribution activities of Unipol.
| € mn | ||||
|---|---|---|---|---|
| threemonths ended 30 September |
ninemonths ended 30 September |
|||
| 2014 | 2013 | 2014 | 2013 | |
| Interest andsimilarincome (netofinterest expenses) |
878 | 876 | 2,640 | 2,674 |
| Operatingincome fromfinancial assets andliabilities carriedatfair value throughincome (net) |
4 | (35) | 20 | (61) |
| Operatingrealizedgains/losses(net) | 74 | 14 | 129 | 44 |
| Operatingimpairmentsofinvest ments(net) |
(4) | (2) | (10) | (9) |
| Investment expenses | (88) | (88) | (232) | (233) |
| Expensesforpremiumrefunds(net)2 | (93) | (48) | (224) | (148) |
| Operatinginvestmentincome(net) | 770 | 718 | 2,323 | 2,266 |
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.
28 Asset Management
37 Balance Sheet Review 44 Reconciliations
Despite the current economic environment the operating investment income (net) increased to € 770 MN, a rise of € 52 mn. This was mainly driven by a better foreign currency result net of hedges.
Interest and similar income (net of interest expenses) remained stable, as the lower income on debt securities was compensated for by increased income on equities. The average asset base1 grew by 2.3% - from € 102.5 BN in the third quarter of 2013 to € 104.9 BN in the same period of 2014.
Operating income from financial assets and liabilities carried at fair value through income (net) increased by € 39 mn to a profit of € 4 mn. This was largely because of a positive development in the foreign currency result net of hedges.
Operating realized gains and losses (net) grew by € 60 mn to € 74 mn mainly driven by higher realizations on equities in the third quarter of 2014 compared to the previous year's figure.
Expenses for premium refunds (net) increased by € 45 mn to € 93 mn due to a higher policyholder participation, mainly from the higher realized gains attributable to our APR (accident insurance with premium refunds) business.
| € mn | threemonths ended 30 September |
ninemonths ended 30 September |
||||
|---|---|---|---|---|---|---|
| 2014 | 2013 | 2014 | 2013 | |||
| Fee andcommissionincome | 347 | 317 | 955 | 915 | ||
| Otherincome | 7 | 11 | 46 | 29 | ||
| Fee andcommissionexpenses | (323) | (295) | (894) | (843) | ||
| Other expenses | (24) | (6) | (38) | (18) | ||
| Restructuringcharges | (5) | (11) | (6) | (13) | ||
| Otherresult | 2 | 16 | 64 | 70 |
Operating profit rose by € 524 MN to € 4,257 MN. This improvement was driven by the favorable development of our underwriting result. The operating investment income (net) increased by € 57 MN to € 2,323 MN.
Our combined ratio improved by 1.4 percentage points to 93.6% benefiting from a 2.3 percentage points lower accident year loss ratio. This favorable development was largely due to 2.7 percentage points lower losses from natural catastrophes and a better underlying claims development, which more than offset a higher impact from single large claims. We recorded a 1.0 percentage point lower contribution from run-off. The improvement in the combined ratio was further supported by a lower expense ratio.
Net income increased by € 287 Mn to € 1,083 MN and was driven by a higher underwriting result reflecting the absence of natural catastrophe events and an improved investment result. A rise in the nonoperating profit by € 161 MN to € 86 MN, contributed to this favorable result.
Net income decreased by € 117 MN to € 2,697 MN compared to the previous year. The higher operating profit was offset by a one-off effect from the inter-segment pension revaluation2 recorded in the first quarter of 2014.
2 For further information on the one-off effect from pension revaluation, please refer to note 4 to the condensed consolidated interim financial statements.
1 IncludingFrenchhealthbusiness, excludingfair value optionandtrading.
€ mn
| threemonths ended30 September | ninemonths ended30 September | |||
|---|---|---|---|---|
| 2014 | 2013 | 2014 | 2013 | |
| Grosspremiumswritten1 | 11,254 | 10,650 | 37,317 | 36,602 |
| Cededpremiumswritten | (959) | (859) | (3,122) | (3,290) |
| Change inunearnedpremiums | 885 | 977 | (1,904) | (1,853) |
| Premiumsearned(net) | 11,180 | 10,768 | 32,291 | 31,459 |
| Interest andsimilarincome | 897 | 885 | 2,689 | 2,704 |
| Operatingincome fromfinancial assets andliabilities carriedatfair value throughincome (net) |
4 | (35) | 20 | (61) |
| Operatingrealizedgains/losses(net) | 74 | 14 | 129 | 44 |
| Fee andcommissionincome | 347 | 317 | 955 | 915 |
| Otherincome | 7 | 11 | 46 | 29 |
| Operatingrevenues | 12,509 | 11,960 | 36,130 | 35,089 |
| Claims andinsurancebenefitsincurred(net) | (7,366) | (7,234) | (21,179) | (21,030) |
| Change inreservesforinsurance andinvestment contracts(net) | (168) | (107) | (428) | (318) |
| Interest expenses | (20) | (9) | (49) | (31) |
| Operatingimpairmentsofinvestments(net) | (4) | (2) | (10) | (9) |
| Investment expenses | (88) | (88) | (232) | (233) |
| Acquisitionandadministrative expenses(net), excludingone-off effectfrompensionrevaluation |
(3,089) | (2,976) | (9,037) | (8,861) |
| Fee andcommissionexpenses | (323) | (295) | (894) | (843) |
| Restructuringcharges | (5) | (11) | (6) | (13) |
| Other expenses | (24) | (6) | (38) | (18) |
| Operatingexpenses | (11,086) | (10,725) | (31,873) | (31,356) |
| Operatingprofit | 1,422 | 1,235 | 4,257 | 3,733 |
| Non-operatingitems | 86 | (74) | (405) | 265 |
| Incomebeforeincometaxes | 1,509 | 1,161 | 3,852 | 3,999 |
| Income taxes | (426) | (365) | (1,155) | (1,185) |
| Netincome | 1,083 | 796 | 2,697 | 2,814 |
| Lossratio2in% | 65.9 | 67.2 | 65.6 | 66.8 |
| Expense ratio3in % | 27.6 | 27.6 | 28.0 | 28.2 |
| Combinedratio4in % | 93.5 | 94.8 | 93.6 | 95.0 |
1 For the Property-Casualty business segment, total revenues are measured based upon gross premiums written.
3 Represents acquisition and administrative expenses (net), excluding one-off effect 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 effect from pension revaluation, and claims and insurance benefits incurred (net) divided by premiums earned (net).
Asset Management
Balance Sheet Review
| € mn | ||||||||
|---|---|---|---|---|---|---|---|---|
| Gross premiums written | Premiums earned (net) | Operating profit (loss) | ||||||
| internal1 | ||||||||
| three months ended 30 September | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 |
| Germany2 | 1,979 | 1,885 | 1,963 | 1,886 | 2,016 | 1,912 | 350 | 23 |
| Switzerland | 259 | 261 | 254 | 261 | 354 | 349 | 39 | 51 |
| Austria | 209 | 210 | 209 | 210 | 207 | 210 | 15 | 17 |
| German Speaking Countries2 | 2,447 | 2,361 | 2,426 | 2,357 | 2,576 | 2,470 | 404 | 86 |
| Italy3 | 933 | 853 | 848 | 853 | 971 | 997 | 274 | 353 |
| France | 962 | 963 | 962 | 963 | 988 | 968 | 141 | 83 |
| Benelux4 | 245 | 254 | 245 | 253 | 262 | 271 | 25 | 21 |
| Turkey5 | 218 | 244 | 240 | 244 | 229 | 241 | 30 | 37 |
| Greece | 25 | 28 | 25 | 28 | 23 | 23 | 3 | 6 |
| Africa | 21 | 18 | 21 | 18 | 16 | 14 | 4 | 1 |
| Western&Southern Europe6 | 2,406 | 2,360 | 2,342 | 2,360 | 2,490 | 2,514 | 480 | 503 |
| Latin America | 581 | 543 | 622 | 543 | 427 | 419 | (38) | 30 |
| Spain | 437 | 416 | 437 | 416 | 459 | 459 | 69 | 57 |
| Portugal | 67 | 64 | 67 | 64 | 69 | 67 | 5 | 6 |
| Iberia&Latin America | 1,086 | 1,023 | 1,127 | 1,023 | 955 | 946 | 37 | 93 |
| United States | 612 | 652 | 613 | 652 | 569 | 608 | (151) | 36 |
| USA | 612 | 652 | 613 | 652 | 569 | 608 | (151) | 36 |
| Allianz Global Corporate&Specialty | 1,365 | 1,239 | 1,367 | 1,239 | 817 | 767 | 172 | 164 |
| Reinsurance PC | 833 | 703 | 833 | 701 | 774 | 718 | 103 | 2 |
| Australia | 799 | 750 | 791 | 750 | 575 | 540 | 84 | 102 |
| United Kingdom | 690 | 542 | 641 | 542 | 639 | 533 | 67 | 50 |
| Credit Insurance | 530 | 471 | 504 | 467 | 366 | 352 | 71 | 81 |
| Ireland | 106 | 97 | 106 | 97 | 100 | 91 | 13 | 14 |
| Global Insurance Lines&Anglo Markets7 | 4,321 | 3,802 | 4,241 | 3,796 | 3,271 | 2,999 | 513 | 406 |
| Russia | 115 | 221 | 128 | 221 | 143 | 155 | (21) | (1) |
| Poland | 101 | 103 | 100 | 103 | 89 | 86 | 4 | 4 |
| Hungary | 61 | 65 | 64 | 65 | 56 | 58 | 5 | 10 |
| Slovakia | 80 | 76 | 80 | 76 | 68 | 68 | 11 | 16 |
| Czech Republic | 71 | 67 | 76 | 67 | 63 | 60 | 11 | 25 |
| Romania Bulgaria |
48 22 |
43 17 |
48 22 |
43 17 |
41 17 |
39 15 |
3 (6) |
1 4 |
| Croatia | 21 | 23 | 21 | 23 | 19 | 20 | 1 | 3 |
| Ukraine | 3 | 3 | 4 | 3 | 2 | 2 | 1 | – |
| Central and Eastern Europe8 | 522 | 618 | 542 | 618 | 498 | 502 | 6 | 62 |
| Asia-Pacific | 201 | 161 | 202 | 161 | 116 | 95 | 17 | 17 |
| Middle East and North Africa | 16 | 15 | 16 | 15 | 12 | 12 | 2 | 2 |
| Growth Markets | 739 | 795 | 760 | 795 | 627 | 609 | 25 | 80 |
| Allianz Global Assistance | 534 | 497 | 533 | 497 | 545 | 505 | 27 | 32 |
| Allianz Worldwide Care | 107 | 88 | 107 | 88 | 131 | 108 | 13 | 8 |
| Allianz Worldwide Partners9 | 656 | 599 | 655 | 599 | 691 | 621 | 28 | 29 |
| Consolidation and Other10, 11 Total |
(1,013) 11,254 |
(942) 10,650 |
(1,015) 11,149 |
(938) 10,645 |
– 11,180 |
– 10,768 |
86 1,422 |
2 1,235 |
1 This reflects gross premiums written on an internal basis, adjusted for foreign currency translation and (de-)consolidation effects.
4 Belgium and the Netherlands are presented as the combined region Benelux. All prior periods are presented accordingly.
2 Starting from 2014 "Münchener und Magdeburger Agrarversicherung AG" is included in Germany with gross premiums written of € 2 mn, premiums earned (net) of € (1) mn and operating loss of € 2 mn. Prior period figures were not adjusted. Contribution to German Speaking Countries before consolidation in 2013
5 On 12 July 2013, Allianz Group acquired Yapı Kredi Bank's shareholding in the Turkish property-casualty insurance company Yapı Kredi Sigorta. 6 Contains € 2 mn and € 2 mn operating profit for 2014 and 2013, respectively, from a management holding
was gross written premiums of € 4 mn, premiums earned (net) of € (1) mn and operating loss of € 5 mn. 3 Effective 1 July 2014, the Allianz Group acquired specific distribution activities of the Property-Casualty insurance business of UnipolSai Assicurazioni S.p.A., Bologna ("Distribution Activities").
located in Luxembourg. 7 Contains € 4 MN operating profit and € 7 mn operating loss for 2014 and 2013, respectively, from AGF UK.
28 Asset Management
5 Executive Summary
%
37 Balance Sheet Review
44 Reconciliations
| three months ended 30 September | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 |
|---|---|---|---|---|---|---|
| Germany2 | 90.3 | 105.2 | 64.6 | 78.4 | 25.7 | 26.8 |
| Switzerland | 90.2 | 88.1 | 67.1 | 63.8 | 23.1 | 24.3 |
| Austria | 95.8 | 95.6 | 72.9 | 71.8 | 22.9 | 23.8 |
| German Speaking Countries2 | 90.7 | 102.2 | 65.6 | 75.9 | 25.1 | 26.2 |
| Italy3 | 78.4 | 71.5 | 52.2 | 48.3 | 26.2 | 23.2 |
| France | 92.1 | 99.5 | 64.6 | 69.8 | 27.5 | 29.8 |
| Benelux4 | 96.0 | 97.4 | 65.2 | 67.5 | 30.8 | 29.8 |
| Turkey5 | 95.8 | 90.5 | 73.3 | 67.6 | 22.5 | 22.9 |
| Greece | 89.9 | 77.4 | 53.1 | 47.6 | 36.8 | 29.8 |
| Africa | 93.3 | 105.3 | 52.2 | 62.0 | 41.1 | 43.3 |
| Western&Southern Europe6 | 87.5 | 87.1 | 60.5 | 60.6 | 27.1 | 26.6 |
| Latin America | 113.2 | 97.9 | 81.4 | 66.7 | 31.8 | 31.2 |
| Spain | 88.8 | 91.5 | 67.4 | 70.7 | 21.4 | 20.8 |
| Portugal | 96.7 | 95.6 | 74.0 | 71.8 | 22.7 | 23.8 |
| Iberia&Latin America | 100.3 | 94.6 | 74.1 | 69.0 | 26.1 | 25.6 |
| United States | 136.5 | 103.5 | 107.5 | 73.7 | 29.1 | 29.8 |
| USA | 136.5 | 103.5 | 107.5 | 73.7 | 29.1 | 29.8 |
| Allianz Global Corporate&Specialty | 89.7 | 88.1 | 62.7 | 63.0 | 27.0 | 25.2 |
| Reinsurance PC | 90.1 | 104.1 | 61.1 | 75.5 | 29.0 | 28.6 |
| Australia | 96.8 | 91.0 | 72.3 | 66.6 | 24.5 | 24.4 |
| United Kingdom | 94.7 | 95.5 | 63.8 | 64.5 | 30.8 | 31.0 |
| Credit Insurance | 80.1 | 81.8 | 51.0 | 52.8 | 29.1 | 29.0 |
| Ireland | 94.6 | 92.5 | 66.4 | 61.9 | 28.1 | 30.6 |
| Global Insurance Lines&Anglo Markets7 | 91.0 | 93.5 | 62.9 | 65.9 | 28.1 | 27.6 |
| Russia | 121.0 | 106.0 | 80.6 | 66.7 | 40.4 | 39.4 |
| Poland | 99.6 | 99.4 | 65.2 | 65.4 | 34.4 | 34.0 |
| Hungary | 102.4 | 94.4 | 63.9 | 57.7 | 38.5 | 36.7 |
| Slovakia | 88.0 | 82.4 | 53.7 | 50.7 | 34.3 | 31.8 |
| Czech Republic | 86.2 | 62.5 | 60.8 | 37.8 | 25.5 | 24.7 |
| Romania | 99.5 | 103.1 | 69.4 | 74.6 | 30.1 | 28.5 |
| Bulgaria | 140.0 | 75.1 | 116.5 | 51.4 | 23.5 | 23.7 |
| Croatia | 104.5 | 89.7 | 66.9 | 52.7 | 37.5 | 37.0 |
| Ukraine | 87.4 | 100.0 | 56.2 | 44.2 | 31.2 | 55.8 |
| Central and Eastern Europe8 | 104.6 | 93.6 | 69.5 | 59.4 | 35.1 | 34.3 |
| Asia-Pacific | 93.6 | 92.2 | 63.3 | 61.3 | 30.3 | 30.8 |
| Middle East and North Africa | 95.1 | 95.3 | 60.3 | 59.7 | 34.8 | 35.6 |
| Growth Markets | 102.4 | 93.4 | 68.2 | 59.7 | 34.2 | 33.7 |
| Allianz Global Assistance | 96.5 | 95.6 | 63.5 | 60.5 | 33.0 | 35.1 |
| Allianz Worldwide Care | 90.3 | 93.1 | 70.9 | 73.9 | 19.4 | 19.2 |
| Allianz Worldwide Partners9 | 97.1 | 97.0 | 65.3 | 63.5 | 31.8 | 33.5 |
| Consolidation and Other10, 11 |
– | – | – | – | – | – |
Total 93.5 94.8 65.9 67.2 27.6 27.6
8 Contains income and expense items from a management holding and consolidations between countries in this region.
Automotive contributed with gross premiums written of € 15 mn, premiums earned (net) of € 15 mn and an operating loss of € 3 mn for 2014 and with gross premiums written of € 14 mn, premiums earned (net) of € 8 mn and an operating loss of € 10 mn for 2013.
9 The reportable segment Allianz Worldwide Partners includes the business of Allianz Global Assistance and Allianz Worldwide Care as well as the reinsurance business of Allianz Global Automotive and income and expenses of a management holding. The set-up of this division will be further enhanced during 2014 with the reclassification of our International Health business in France from Life/Health to the Property-Casualty business segment retrospectively as of January 2014. The reinsurance business of Allianz Global
10 Represents elimination of transactions between Allianz Group companies in different geographic regions.
Combined ratio Loss ratio Expense ratio
11 The 2014 analysis of the Allianz Group's asbestos risks resulted in a reduction of reserves and a positive run-off result of € 86 mn reflected in the operating profit for 2014.
| € mn | ||||||||
|---|---|---|---|---|---|---|---|---|
| Gross premiums written | Premiums earned (net) | Operating profit (loss) | ||||||
| internal1 | ||||||||
| nine months ended 30 September | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 |
| Germany2, 3 |
7,853 | 7,554 | 7,837 | 7,576 | 5,858 | 5,624 | 1,004 | 290 |
| Switzerland | 1,356 | 1,364 | 1,346 | 1,364 | 1,073 | 1,066 | 148 | 140 |
| Austria | 781 | 776 | 781 | 776 | 625 | 610 | 56 | 44 |
| German Speaking Countries3 | 9,990 | 9,726 | 9,964 | 9,716 | 7,556 | 7,319 | 1,208 | 478 |
| Italy4 | 2,906 | 2,865 | 2,821 | 2,865 | 2,898 | 2,955 | 732 | 879 |
| France | 3,309 | 3,322 | 3,309 | 3,322 | 2,940 | 2,853 | 377 | 306 |
| Benelux5 | 905 | 930 | 905 | 927 | 796 | 813 | 68 | 72 |
| Turkey6 | 765 | 681 | 688 | 681 | 670 | 517 | 69 | 67 |
| Greece | 83 | 83 | 83 | 83 | 67 | 64 | 13 | 15 |
| Africa | 77 | 72 | 77 | 73 | 46 | 41 | 7 | 6 |
| Western&Southern Europe7 | 8,045 | 7,953 | 7,882 | 7,950 | 7,418 | 7,244 | 1,272 | 1,353 |
| Latin America | 1,504 | 1,740 | 1,757 | 1,740 | 1,273 | 1,303 | 7 | 102 |
| Spain | 1,552 | 1,516 | 1,552 | 1,516 | 1,354 | 1,358 | 200 | 171 |
| Portugal | 251 | 247 | 251 | 247 | 204 | 200 | 17 | 17 |
| Iberia&Latin America | 3,307 | 3,502 | 3,561 | 3,502 | 2,831 | 2,860 | 225 | 290 |
| United States | 1,525 | 1,625 | 1,565 | 1,625 | 1,394 | 1,532 | (159) | 140 |
| USA8 | 1,525 | 1,625 | 1,565 | 1,625 | 1,394 | 1,532 | (159) | 140 |
| Allianz Global Corporate&Specialty | 4,217 | 4,042 | 4,256 | 4,042 | 2,283 | 2,205 | 417 | 342 |
| Reinsurance PC2 | 3,085 | 2,818 | 3,085 | 2,814 | 2,278 | 2,176 | 395 | 111 |
| Australia | 2,077 | 2,202 | 2,268 | 2,202 | 1,631 | 1,700 | 240 | 301 |
| United Kingdom | 2,021 | 1,713 | 1,926 | 1,713 | 1,787 | 1,573 | 145 | 151 |
| Credit Insurance | 1,672 | 1,609 | 1,648 | 1,596 | 1,110 | 1,072 | 307 | 285 |
| Ireland | 341 | 321 | 341 | 321 | 284 | 277 | 26 | 35 |
| Global Insurance Lines&Anglo Markets9 | 13,413 | 12,706 | 13,524 | 12,688 | 9,372 | 9,003 | 1,534 | 1,219 |
| Russia | 494 | 621 | 570 | 621 | 433 | 443 | (155) | (7) |
| Poland | 316 | 322 | 315 | 322 | 262 | 257 | 13 | 9 |
| Hungary | 210 | 210 | 218 | 210 | 167 | 171 | 17 | 18 |
| Slovakia Czech Republic |
260 219 |
253 210 |
260 234 |
253 210 |
199 181 |
199 171 |
42 31 |
42 36 |
| Romania | 147 | 136 | 148 | 136 | 114 | 112 | 6 | 4 |
| Bulgaria | 61 | 54 | 61 | 54 | 48 | 45 | – | 13 |
| Croatia | 72 | 76 | 72 | 76 | 57 | 58 | 6 | 10 |
| Ukraine | 12 | 13 | 16 | 13 | 6 | 5 | – | 1 |
| Central and Eastern Europe10 | 1,790 | 1,892 | 1,895 | 1,892 | 1,466 | 1,460 | (46) | 120 |
| Asia-Pacific | 549 | 515 | 589 | 515 | 323 | 279 | 56 | 54 |
| Middle East and North Africa | 55 | 53 | 58 | 53 | 37 | 35 | 6 | 6 |
| Growth Markets | 2,394 | 2,461 | 2,541 | 2,461 | 1,825 | 1,774 | 15 | 180 |
| Allianz Global Assistance | 1,629 | 1,507 | 1,623 | 1,507 | 1,492 | 1,398 | 78 | 67 |
| Allianz Worldwide Care | 448 | 384 | 448 | 384 | 361 | 309 | 32 | 25 |
| Allianz Worldwide Partners11 | 2,129 | 1,960 | 2,124 | 1,960 | 1,895 | 1,726 | 77 | 71 |
| Consolidation and Other12, 13 |
(3,486) | (3,330) | (3,492) | (3,317) | – | – | 86 | 2 |
| Total | 37,317 | 36,602 | 37,669 | 36,584 | 32,291 | 31,459 | 4,257 | 3,733 |
1 This reflects gross premiums written on an internal basis, adjusted for foreign currency translation and (de-)consolidation effects.
4 Effective 1 July 2014, the Allianz Group acquired specific distribution activities of the Property-Casualty insurance business of UnipolSai Assicurazioni S.p.A., Bologna ("Distribution Activities"). 5 Belgium and the Netherlands are presented as the combined region Benelux. All prior periods are presented
2 In 2013, the combined ratio at Germany and Reinsurance PC was impacted by a one-off effect related to the commutation of internal reinsurance resulting in a 1.2 percentage point improvement in the combined ratio for Germany and an increase of 3.0 percentage points in Reinsurance PC. This had no impact at Group level. 3 Starting from 2014 "Münchener und Magdeburger Agrarversicherung AG" is included in Germany with
gross premiums written of € 32 mn, premiums earned (net) of € 16 mn and operating profit of € 9 mn. Prior period figures were not adjusted. Contribution to German Speaking Countries before consolidation in 2013 was gross written premiums of € 32 mn, premiums earned (net) of € 20 mn and operating profit of € 5 mn.
accordingly. 6 On 12 July 2013, Allianz Group acquired Yapı Kredi Bank's shareholding in the Turkish property-casualty insurance company Yapı Kredi Sigorta.
7 Contains € 6 mn and € 9 mn operating profit for 2014 and 2013, respectively, from a management holding located in Luxembourg.
5 Executive Summary
%
37 Balance Sheet Review
44 Reconciliations
nine months ended 30 September 2014 2013 2014 2013 2014 2013 Germany2, 3 91.0 102.5 65.3 76.6 25.7 25.9 Switzerland 90.4 91.6 67.5 68.8 22.9 22.8 Austria 94.6 97.0 69.2 70.9 25.4 26.1 German Speaking Countries3 91.2 100.4 65.9 75.0 25.3 25.4 Italy4 81.7 77.7 55.2 53.7 26.4 24.0 France 94.3 97.5 66.2 68.9 28.0 28.5 Benelux5 98.1 97.4 67.8 68.0 30.3 29.4 Turkey6 97.7 92.7 74.9 68.5 22.8 24.1 Greece 84.1 80.7 49.3 47.9 34.8 32.8 Africa 93.5 98.0 54.2 56.7 39.2 41.3 Western&Southern Europe7 90.0 88.9 62.6 62.3 27.3 26.6 Latin America 106.4 98.1 74.8 65.7 31.6 32.3 Spain 89.3 91.5 68.5 70.6 20.8 20.9 Portugal 95.8 96.4 73.0 72.8 22.7 23.6 Iberia&Latin America 97.5 94.8 71.7 68.5 25.8 26.3 United States 123.4 101.9 89.1 68.5 34.3 33.4 USA8 123.4 101.9 89.1 68.5 34.3 33.4 Allianz Global Corporate&Specialty 92.9 94.4 65.7 67.1 27.2 27.3 Reinsurance PC2 86.2 98.5 57.9 65.9 28.3 32.6 Australia 95.7 92.6 71.0 67.1 24.7 25.5 United Kingdom 96.8 95.7 65.2 64.6 31.6 31.1 Credit Insurance 77.7 81.4 48.2 52.6 29.5 28.8 Ireland 97.8 94.3 67.3 62.7 30.5 31.6 Global Insurance Lines&Anglo Markets9 90.9 93.8 62.6 64.6 28.3 29.3 Russia 141.8 107.6 96.5 66.9 45.3 40.7 Poland 99.4 101.2 65.0 66.7 34.4 34.5 Hungary 102.8 101.6 63.1 63.0 39.7 38.6 Slovakia 84.1 85.4 52.2 54.7 31.9 30.8 Czech Republic 85.4 81.2 58.2 53.9 27.2 27.2 Romania 100.8 103.0 70.8 73.2 29.9 29.8 Bulgaria 104.4 75.1 79.2 46.6 25.2 28.5 Croatia 96.8 90.7 58.4 53.1 38.4 37.6 Ukraine 109.8 111.0 59.1 55.3 50.7 55.8 Central and Eastern Europe10 108.9 98.0 72.1 62.5 36.7 35.4 Asia-Pacific 90.6 89.5 60.9 58.8 29.7 30.8 Middle East and North Africa 97.4 95.5 62.9 61.4 34.5 34.2 Growth Markets 105.4 96.6 69.9 61.9 35.5 34.7 Allianz Global Assistance 96.0 96.9 62.2 61.7 33.7 35.2 Allianz Worldwide Care 91.5 92.4 72.7 73.9 18.8 18.5 Allianz Worldwide Partners11 96.8 97.4 64.7 64.3 32.0 33.1 Consolidation and Other12, 13 – – – – – – Total 93.6 95.0 65.6 66.8 28.0 28.2
8 The reserve strengthening for asbestos risks in 2014 at Fireman's Fund Insurance company of € 79 mn had no impact on the financial results of the Allianz Group and Fireman's Fund's combined ratio under IFRS.
9 Contains € 4 mn operating profit and € 7 mn operating loss for 2014 and 2013, respectively, from AGF UK. 10 Contains income and expense items from a management holding and consolidations between countries in this region.
Property-Casualty business segment retrospectively as of January 2014. The reinsurance business of Allianz Global Automotive contributed with gross premiums written of € 52 mn, premiums earned (net) of € 42 mn and an operating loss of € 11 mn for 2014 and with gross premiums written of € 70 mn, premiums earned (net) of € 19 mn and an operating loss of € 19 mn for 2013.
12 Represents elimination of transactions between Allianz Group companies in different geographic regions.
Combined ratio Loss ratio Expense ratio
11 The reportable segment Allianz Worldwide Partners includes the business of Allianz Global Assistance and Allianz Worldwide Care as well as the reinsurance business of Allianz Global Automotive and income and expenses of a management holding. The set-up of this division will be further enhanced during 2014 with the reclassification of our International Health business in France from Life/Health to the
13 The 2014 analysis of the Allianz Group's asbestos risks resulted in a reduction of reserves and a positive run-off result of € 86 mn reflected in the operating profit for 2014.
Third quarter 2014
| three months ended 30 September | 2014 | 2013 |
|---|---|---|
| Statutory premiums | 15,853 | 12,698 |
| Operating profit1 | 790 | 769 |
| Net income1 | 530 | 562 |
| Margin on reserves (bps)1, 2 |
61 | 66 |
On a nominal basis, statutory premiums amounted to € 15,853 mn, an increase of € 3,156 mn. Premiums increased by 25.0%, or € 3,177 mn, on an internal basis.
We recorded premium growth in most core markets – largely driven by our single premium business. These favorable developments were mainly due to the successful cooperation with our bancassurance channel in many European markets and our broker channel in the United States. Strong premium growth of unit-linked products in Italy and Taiwan and strong sales of fixed-indexed annuity products in the United States were the main drivers of this development.
Premiums in Italy increased 76.7% to € 2,789 mn. This growth was mainly due to the strong contribution of unit-linked and savings products distributed via our bancassurance channel. To further improve our product design and pricing, the sale of traditional guarantee savings products was largely replaced by savings products with 0%-guarantees in the third quarter of 2014.
Premiums in the United States increased to € 2,901 mn, representing growth of 73.7%. This was driven by continued strong fixedindexed annuity sales as a result of an innovative index strategy and higher penetration into the broker and dealer channel. However, as anticipated, it is below the level in the second quarter of 2014 due to the impact of the pricing changes in response to the decreasing interest rate environment. This growth was partly offset by a decrease in the variable annuity business.
In Asia-Pacific, premiums amounted to € 1,575 mn, growth of 34.5 %. This was largely driven by Taiwan – due to increased single premium unit-linked business – and by South Korea, where we recorded higher sales of single premium investment-oriented products via the bancassurance channel.
1 Effective 1 January 2014, the Allianz Group allocated certain entities from the reportable segment Asset Management to the reportable segments German Speaking Countries, Western&Southern Europe and Growth Markets within the business segment Life/Health and to the reportable segment Banking.
2 Represents annualized operating profit divided by the average of (a) the current quarter-end and previous quarter-end net reserves and (b) 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.
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.
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.
5 Executive Summary 28 Asset Management
37 Balance Sheet Review 44 Reconciliations
Premiums in Central and Eastern Europe grew 9.2% to € 204 mn. This increase was largely because of business developments in Poland, driven by unit-linked sales via bancassurance, and to a lesser extent in Hungary, mainly due to the timing of a single premium unit-linked sales campaign. This growth more than compensated for the decline in premiums in Russia as a result of the termination of one bancassurance partnership.
In Switzerland, premiums totaled € 201 mn. The increase of 7.3% was primarily driven by our single premium business in group life, and to a lesser extent in individual life.
In our German life business, premiums grew 4.0% to € 4,292 mn. This growth was driven by an increase in our single premium business with savings products while regular premiums were relatively flat. In particular the product Perspektive – which was launched in the second quarter of 2013 and balances reduced guarantees and higher expected returns for the policyholder with lower capital requirements for the shareholder – contributed most of the premium growth. Statutory premiums in our German health business decreased 1.9% to € 816 mn due to a lower contribution from full health care coverage business.
Premiums in France increased 1.4 % to € 1,975 mn. All lines of business contributed to this growth, with the exception of individual life business, which we pursued more selectively.
Premiums in Spain decreased 3.9% to € 188 mn. This was mainly a result of a more selective growth focus. Overall, we achieved a premium mix shift in favor of more profitable protection products. The decrease was partly offset by improved business via our bancassurance channel.
In Benelux1, premiums decreased to € 368 mn, representing a decline of 13.0%. This was mainly due to lower sales of investmentoriented products in Luxembourg distributed via the bancassurance channel.
Statutory premiums were 20.0% above the first nine months of 2013 and amounted to € 49,977 mn. This represents an increase of 20.5% on an internal basis and was largely driven by our strong single premium fixed-indexed annuity business in the United States, and, to a lesser extent, by an increase in the savings product business in Italy and Germany.
Operating profit increased slightly by € 22 mn to € 790 mn. The allocation of certain entities previously reflected in the business segment Asset Management to the business segment Life/Health drove this improvement. Our operating performance was almost flat as the improved operating investment result was largely offset by associated policyholder participation and higher acquisition expenses.
Interest and similar income (net of interest expenses) increased by € 121 mn and amounted to € 4,233 mn. This was driven by higher interest income from debt investments as a result of an increased asset base.
Operating income from financial assets and liabilities carried at fair value through income (net) improved by € 330 mn to a loss of € 207 mn. This was largely due to higher losses in the third quarter of 2013 from the net of foreign currency translation effects and financial derivatives used to manage duration and other interest rate-related exposures as well as to protect against equity and foreign currency fluctuations.
Operating realized gains and losses (net) increased by € 205 mn to € 746 mn. This was largely due to higher realizations on equity investments as well as on debt securities compared to the third quarter of 2013.
Operating impairments of investments (net) increased by € 77 mn to € 102 mn. This was due to higher impairments of equity investments.
Fee and commission income increased by € 96 mn to € 263 mn, mainly due to income generated by entities transferred from the business segment Asset Management.
Claims and insurance benefits incurred (net) increased by € 361 mn to € 5,004 mn, largely because of higher payments for maturities in Germany.
Change in reserves for insurance and investment contracts (net) remained almost flat at € 3,175 mn. An increase in Germany driven by a higher change in reserves for premium refunds due to the improved investment result was largely offset by a lower increase in aggregate policy reserves because of higher maturities and lower net premiums earned.
Investment expenses increased by € 20 mn to € 219 mn, mainly due to higher asset management fees. This was the result of a higher asset base and one-offs in the third quarter of 2014.
1 Belgium, Luxembourg and the Netherlands are presented as the combined region Benelux. All prior periods are presented accordingly.
Acquisition and administrative expenses (net) amounted to € 1,488 mn, an increase of € 166 mn. This was primarily a result of higher expenses and higher deferred acquisition cost amortization in the United States compared to last year. Higher administrative costs, mainly related to the entities transferred from the business segment Asset Management, further contributed to this increase. Margin on reserves dropped from 66 to 61 basis points.
Excluding the effects of the allocation of the former Asset Management entities, operating profit was broadly flat. While we saw an increased investment margin as well as higher loadings and fees, higher expenses and a lower technical margin offset this positive effect. The improvement in our investment margin (i.e. investment income, net of hedged item movements and policyholder participation) was driven by gains from the duration strategy as well as a recovery in the foreign currency result in Germany. The higher asset base in the United States also contributed to this development. Loadings and fees increased mainly as a result of sales increases in Germany and Asia-Pacific. We recorded higher expenses, mainly due to increased acquisition expenses in line with volume growth.
Operating profit increased by € 362 mn to € 2,655 mn. This was mainly driven by the improved operating investment result, which was burdened by higher losses from the net of foreign currency translation effects and financial derivatives in the second and third quarter of 2013. In addition, the allocation of certain entities previously reflected in the business segment Asset Management to the business segment Life/Health contributed € 85 mn to this increase.
In the third quarter of 2014, net income decreased by € 32 mn to € 530 mn. This was mainly due to higher non-operating expenses because of a risk capital hedge in the United States and to a lesser extent higher taxes more than offsetting the operating profit growth. The effective tax rate amounted to 31.6% (3Q 2013: 29.3%).
The strong operating performance in the first half year was the main driver for the increase of € 227 mn to € 1,891 mn in the first nine months of 2014. The effective tax rate was 29.9% (9M 2013: 29.8%).
28 Asset Management
32 Corporate and Other
37 Balance Sheet Review
44 Reconciliations
€ mn
| three months ended 30 September | nine months ended 30 September | ||||
|---|---|---|---|---|---|
| 2014 | 2013 | 2014 | 2013 | ||
| Statutory premiums1 | 15,853 | 12,698 | 49,977 | 41,659 | |
| Ceded premiums written | (182) | (144) | (569) | (451) | |
| Change in unearned premiums | (125) | (54) | (366) | (218) | |
| Statutory premiums (net) | 15,546 | 12,500 | 49,043 | 40,990 | |
| Deposits from insurance and investment contracts | (9,690) | (6,631) | (30,912) | (22,849) | |
| Premiums earned (net) | 5,856 | 5,869 | 18,131 | 18,141 | |
| Interest and similar income | 4,260 | 4,127 | 12,891 | 12,573 | |
| Operating income from financial assets and liabilities carried at fair value through income (net) |
(207) | (537) | (512) | (1,468) | |
| Operating realized gains/losses (net) | 746 | 541 | 2,328 | 2,159 | |
| Fee and commission income | 263 | 166 | 752 | 474 | |
| Other income | 32 | 31 | 114 | 111 | |
| Operating revenues | 10,949 | 10,198 | 33,703 | 31,990 | |
| Claims and insurance benefits incurred (net) | (5,004) | (4,642) | (15,258) | (14,459) | |
| Change in reserves for insurance and investment contracts (net) |
(3,175) | (3,138) | (9,946) | (10,068) | |
| Interest expenses | (27) | (16) | (75) | (56) | |
| Operating impairments of investments (net) | (102) | (25) | (443) | (219) | |
| Investment expenses | (219) | (198) | (645) | (581) | |
| Acquisition and administrative expenses (net), excluding one-off effect from pension revaluation |
(1,488) | (1,322) | (4,189) | (4,048) | |
| Fee and commission expenses | (110) | (61) | (290) | (191) | |
| Operating amortization of intangible assets | (5) | – | (14) | – | |
| Restructuring charges | (1) | (1) | 8 | (2) | |
| Other expenses | (30) | (26) | (195) | (73) | |
| Operating expenses | (10,159) | (9,429) | (31,048) | (29,698) | |
| Operating profit | 790 | 769 | 2,655 | 2,293 | |
| Non-operating items | (15) | 27 | 44 | 77 | |
| Income before income taxes | 776 | 795 | 2,698 | 2,370 | |
| Income taxes | (245) | (233) | (808) | (706) | |
| Net income | 530 | 562 | 1,891 | 1,664 | |
| Margin on reserves2 in basis points | 61 | 66 | 70 | 66 |
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 divided by the average of (a) the current quarter-end and previous quarter-end net reserves and (b) 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 | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Statutory premiums1 | Premiums earned (net) | Operating profit (loss) | Margin on reserves2 (BPS) | |||||||
| internal3 | ||||||||||
| three months ended 30 September | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | 20144 | 2013 | 20144 | 2013 |
| Germany Life | 4,292 | 4,125 | 4,292 | 4,125 | 2,572 | 2,640 | 218 | 175 | 44 | 39 |
| Germany Health | 816 | 832 | 816 | 832 | 813 | 829 | 62 | 60 | 90 | 94 |
| Switzerland | 201 | 184 | 197 | 184 | 73 | 77 | 20 | 19 | 56 | 58 |
| Austria | 87 | 84 | 87 | 84 | 63 | 59 | 8 | 6 | 66 | 60 |
| German Speaking Countries | 5,396 | 5,225 | 5,392 | 5,225 | 3,522 | 3,605 | 307 | 260 | 50 | 47 |
| Italy | 2,789 | 1,579 | 2,789 | 1,579 | 71 | 82 | 46 | 35 | 33 | 30 |
| France | 1,975 | 1,947 | 1,975 | 1,947 | 899 | 915 | 140 | 118 | 68 | 63 |
| Benelux5 | 368 | 423 | 368 | 423 | 120 | 122 | 25 | 23 | 62 | 63 |
| Greece | 19 | 21 | 19 | 21 | 11 | 12 | 1 | 1 | 90 | 196 |
| Turkey6 | 243 | 168 | 267 | 168 | 40 | 29 | 7 | 11 | 108 | 320 |
| Africa | 12 | 12 | 12 | 12 | 6 | 5 | – | – | –8 | –8 |
| Western&Southern Europe | 5,407 | 4,149 | 5,431 | 4,149 | 1,148 | 1,165 | 219 | 188 | 56 | 54 |
| Latin America | 72 | 67 | 73 | 67 | 28 | 25 | 3 | 2 | 127 | 84 |
| Spain | 188 | 194 | 186 | 194 | 84 | 95 | 47 | 33 | 251 | 199 |
| Portugal | 59 | 71 | 59 | 71 | 21 | 21 | 6 | 6 | 424 | 468 |
| Iberia&Latin America | 320 | 331 | 319 | 331 | 132 | 141 | 57 | 41 | 249 | 206 |
| United States | 2,901 | 1,672 | 2,904 | 1,672 | 246 | 218 | 158 | 183 | 78 | 104 |
| USA | 2,901 | 1,672 | 2,904 | 1,672 | 246 | 218 | 158 | 183 | 78 | 104 |
| Reinsurance LH | 156 | 132 | 156 | 132 | 130 | 110 | 5 | 22 | 112 | 452 |
| Global Insurance Lines&Anglo Markets | 156 | 132 | 156 | 132 | 130 | 110 | 5 | 22 | 112 | 452 |
| South Korea | 421 | 312 | 390 | 312 | 127 | 114 | (2) | 11 | (9) | 44 |
| Taiwan | 611 | 347 | 614 | 347 | 69 | 47 | (2) | – | (13) | –8 |
| Indonesia | 198 | 181 | 219 | 181 | 82 | 71 | 18 | 12 | 544 | 395 |
| Malaysia Japan |
104 – |
95 – |
102 – |
95 – |
33 2 |
45 2 |
6 1 |
3 1 |
175 21 |
120 20 |
| Other | 241 | 232 | 245 | 232 | 196 | 181 | 8 | 17 | 84 | 202 |
| Asia-Pacific | 1,575 | 1,167 | 1,571 | 1,167 | 508 | 459 | 28 | 44 | 45 | 79 |
| Poland | 48 | 30 | 47 | 30 | 19 | 10 | (3) | 4 | (210) | 297 |
| Slovakia | 61 | 59 | 61 | 59 | 56 | 53 | 13 | 8 | 410 | 266 |
| Hungary | 29 | 25 | 30 | 25 | 10 | 12 | 3 | 3 | 269 | 370 |
| Czech Republic | 29 | 30 | 31 | 30 | 17 | 19 | 5 | 3 | 308 | 217 |
| Russia | 10 | 20 | 11 | 20 | 9 | 20 | – | – | –8 | –8 |
| Croatia | 14 | 13 | 14 | 13 | 14 | 13 | 5 | 1 | 610 | 71 |
| Bulgaria | 8 | 8 | 8 | 8 | 7 | 8 | 4 | 1 | 1,038 | 399 |
| Romania | 6 | 5 | 5 | 5 | 4 | 3 | 2 | 1 | 1,161 | 313 |
| Central and Eastern Europe7 | 204 | 190 | 208 | 190 | 136 | 138 | 28 | 20 | 311 | 241 |
| Middle East and North Africa | 45 | 40 | 46 | 40 | 34 | 33 | 4 | 4 | 257 | 302 |
| Global Life | 2 | 3 | 2 | 3 | – | – | – | – | –8 | –8 |
| Growth Markets | 1,826 | 1,401 | 1,826 | 1,401 | 678 | 630 | 60 | 68 | 84 | 104 |
| Consolidation9 | (152) | (213) | (152) | (213) | – | – | (15) | 5 | –8 | –8 |
| Total | 15,853 | 12,698 | 15,875 | 12,698 | 5,856 | 5,869 | 790 | 769 | 61 | 66 |
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.
5 Belgium, Luxembourg and the Netherlands are presented as the combined region Benelux. All prior periods are presented accordingly.
2 Represents annualized operating profit (loss) divided by the average of (a) the current quarter-end and previous quarter-end net reserves and (b) the current quarter-end and previous year-end net reserves, 6 On 12 July 2013, the Allianz Group acquired Yapı Kredi Bank's 93.94% shareholding in the Turkish propertycasualty insurance company Yapı Kredi Sigorta, including its life and pension insurance subsidiary Yapı Kredi Emeklilik.
where net reserves equal reserves for loss and loss adjustment expenses, reserves for insurance and invest-7 Contains income and expense items from a management holding and consolidations between countries in this region. 8 Presentation not meaningful.
3 Statutory premiums adjusted for foreign currency translation and (de-)consolidation effects. 4 Effective 1 January 2014, the Allianz Group allocated certain entities from the reportable segment Asset Management to the reportable segments German Speaking Countries, Western&Southern Europe and Growth Markets within the business segment Life/Health and to the reportable segment Banking.
ment contracts and financial liabilities for unit-linked contracts less reinsurance assets.
9 Represents elimination of transactions between Allianz Group companies in different geographic regions.
22 Life/Health Insurance Operations 35 Outlook
37 Balance Sheet Review 44 Reconciliations
| € mn | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Statutory premiums1 | Premiums earned (net) | Operating profit (loss) | Margin on reserves2 (BPS) | |||||||
| internal3 | ||||||||||
| nine months ended 30 September | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | 20144 | 2013 | 20144 | 2013 |
| Germany Life | 13,719 | 12,265 | 13,719 | 12,265 | 8,160 | 8,298 | 814 | 682 | 57 | 51 |
| Germany Health | 2,437 | 2,495 | 2,437 | 2,495 | 2,434 | 2,492 | 138 | 144 | 69 | 77 |
| Switzerland | 1,427 | 1,353 | 1,417 | 1,353 | 427 | 395 | 62 | 60 | 61 | 60 |
| Austria | 293 | 285 | 293 | 285 | 217 | 209 | 31 | 27 | 92 | 83 |
| German Speaking Countries | 17,876 | 16,398 | 17,866 | 16,398 | 11,239 | 11,394 | 1,045 | 911 | 59 | 55 |
| Italy | 8,227 | 6,294 | 8,227 | 6,294 | 310 | 322 | 170 | 190 | 43 | 54 |
| France | 6,522 | 6,354 | 6,522 | 6,354 | 2,649 | 2,589 | 378 | 356 | 63 | 63 |
| Benelux5 | 2,022 | 1,790 | 2,022 | 1,790 | 380 | 385 | 92 | 82 | 79 | 76 |
| Greece | 65 | 68 | 65 | 68 | 38 | 40 | – | 1 | –8 | 27 |
| Turkey6 | 609 | 244 | 369 | 244 | 106 | 48 | 19 | 10 | 111 | 94 |
| Africa | 43 | 42 | 43 | 42 | 20 | 18 | 3 | 3 | 175 | 148 |
| Western&Southern Europe | 17,489 | 14,791 | 17,249 | 14,791 | 3,504 | 3,402 | 662 | 641 | 58 | 62 |
| Latin America | 234 | 256 | 251 | 256 | 105 | 117 | 6 | 5 | 85 | 93 |
| Spain | 830 | 899 | 822 | 899 | 308 | 341 | 142 | 99 | 261 | 204 |
| Portugal | 183 | 171 | 183 | 171 | 62 | 62 | 15 | 17 | 355 | 426 |
| Iberia&Latin America | 1,247 | 1,326 | 1,257 | 1,326 | 475 | 520 | 163 | 121 | 248 | 208 |
| United States | 8,810 | 5,022 | 9,073 | 5,022 | 706 | 647 | 529 | 384 | 91 | 74 |
| USA | 8,810 | 5,022 | 9,073 | 5,022 | 706 | 647 | 529 | 384 | 91 | 74 |
| Reinsurance LH | 423 | 398 | 423 | 398 | 314 | 340 | 35 | 14 | 238 | 86 |
| Global Insurance Lines&Anglo Markets | 423 | 398 | 423 | 398 | 314 | 340 | 35 | 14 | 238 | 86 |
| South Korea | 1,223 | 991 | 1,187 | 991 | 380 | 368 | 13 | 17 | 16 | 24 |
| Taiwan | 1,549 | 1,352 | 1,614 | 1,352 | 151 | 114 | 1 | – | 3 | –8 |
| Indonesia | 502 | 528 | 602 | 528 | 221 | 191 | 51 | 50 | 551 | 554 |
| Malaysia | 305 | 271 | 325 | 271 | 132 | 153 | 15 | 13 | 164 | 160 |
| Japan | – | – | – | – | 5 | 5 | 1 | 6 | 5 | 38 |
| Other | 663 | 671 | 711 | 671 | 492 | 504 | 45 | 60 | 171 | 232 |
| Asia-Pacific | 4,243 | 3,813 | 4,440 | 3,813 | 1,380 | 1,334 | 126 | 147 | 71 | 86 |
| Poland | 134 | 78 | 133 | 78 | 54 | 28 | 15 | 12 | 361 | 281 |
| Slovakia | 189 | 179 | 189 | 179 | 154 | 151 | 29 | 25 | 310 | 281 |
| Hungary | 110 | 134 | 114 | 134 | 33 | 37 | 9 | 7 | 339 | 269 |
| Czech Republic | 118 | 104 | 126 | 104 | 54 | 57 | 12 | 13 | 275 | 299 |
| Russia | 38 | 57 | 44 | 57 | 37 | 57 | – | (1) | –8 | (54) |
| Croatia | 55 | 45 | 55 | 45 | 54 | 45 | 13 | 3 | 559 | 127 |
| Bulgaria | 27 | 25 | 27 | 25 | 24 | 22 | 10 | 3 | 898 | 310 |
| Romania | 17 | 17 | 17 | 17 | 10 | 11 | 5 | 1 | 908 | 248 |
| Central and Eastern Europe7 | 687 | 639 | 705 | 639 | 421 | 407 | 92 | 62 | 348 | 245 |
| Middle East and North Africa | 123 | 120 | 130 | 120 | 92 | 97 | 15 | 12 | 304 | 288 |
| Global Life | 4 | 5 | 4 | 5 | 1 | 1 | 1 | – | –8 | –8 |
| Growth Markets | 5,057 | 4,577 | 5,278 | 4,577 | 1,894 | 1,839 | 233 | 220 | 111 | 110 |
| Consolidation9 | (925) | (852) | (925) | (852) | – | – | (13) | 1 | –8 | –8 |
| Total | 49,977 | 41,659 | 50,220 | 41,659 | 18,131 | 18,141 | 2,655 | 2,293 | 70 | 66 |
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.
5 Belgium, Luxembourg and the Netherlands are presented as the combined region Benelux. All prior periods are presented accordingly.
2 Represents annualized operating profit (loss) divided by the average of (a) the current quarter-end and previous quarter-end net reserves and (b) 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. Kredi Emeklilik. in this region.
3 Statutory premiums adjusted for foreign currency translation and (de-)consolidation effects.
4 Effective 1 January 2014, the Allianz Group allocated certain entities from the reportable segment Asset Management to the reportable segments German Speaking Countries, Western&Southern Europe and Growth Markets within the business segment Life/Health and to the reportable segment Banking.
6 On 12 July 2013, the Allianz Group acquired Yapı Kredi Bank's 93.94% shareholding in the Turkish propertycasualty insurance company Yapı Kredi Sigorta, including its life and pension insurance subsidiary Yapı
7 Contains income and expense items from a management holding and consolidations between countries
8 Presentation not meaningful.
9 Represents elimination of transactions between Allianz Group companies in different geographic regions.
Third quarter 2014
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 manages third-party assets with active investment strategies.
| € mn | ||
|---|---|---|
| three months ended 30 September | 2014 | 2013 |
| Operating revenues | 1,618 | 1,703 |
| Operating profit | 694 | 755 |
| Cost-income ratio in % | 57.1 | 55.7 |
| Net income | 438 | 482 |
| Total assets under management as of 30 September in € bn |
1,872 | 1,811 |
| thereof: Third-party assets under management as of 30 September in € bn |
1,411 | 1,404 |
Development of total assets under management1
1 Effective 1 January 2014, the Allianz Group allocated certain entities from the reportable segment Asset Management to the reportable segments German Speaking Countries, Western&Southern Europe and Growth Markets within the business segment Life/Health and to the reportable segment Banking.
12 Property-Casualty Insurance Operations
37 Balance Sheet Review
28 Asset Management
On 26 September 2014 the Chief Investment Officer of PIMCO resigned. Immediately after his resignation an orderly succession process was executed and led to the appointment of new investment management leadership at PIMCO.
As of 30 September 2014, total assets under management amounted to € 1,872 BN. Of this, € 1,411 BN related to our third-party assets under management and € 461 BN to Allianz group assets.
In the first nine months of 2014, we recorded net outflows of total assets under management of € 79 BN. Net outflows from third-party assets under management of € 84 BN were strongly driven by PIMCO in the United States. In the third quarter, PIMCO experienced thirdparty net outflows particularly at the end of September in conjunction with the market's reaction to the departure of PIMCO's Chief Investment Officer. AllianzGI recorded net inflows for the seventh consecutive quarter.
Market effects contributed € 100 BN to total assets under management, with € 77 BN at PIMCO and € 22 BN at AllianzGI.
As of 1 January 2014, the Allianz group allocated certain entities to other business segments which resulted in a decrease of € 34 BN in assets under management. This was partially compensated by a change in reporting to include third-party fund of fund assets under management in our total assets under management. These effects were the main drivers for a decline in total assets under management of € 23 BN, reported as consolidation, deconsolidation and other effects.
We recorded favorable foreign currency translation effects of € 105 BN, in particular on the fixed income assets, mainly as a result of the appreciation of the U.S. Dollar.1
In the following section, we focus on the development of third-party assets under management.
As of 30 September 2014, the share of third-party assets under management by business unit was 82.4% attributable to PIMCO and 17.6% to AllianzGI.
2 "Other" consists of third-party assets managed by other Allianz Group companies which were allocated to other business segments as of 1 January 2014.
3 "America" consists of the United States, Canada and Brazil (approximately € 862 BN, € 15 BN and € 1 BN third-party assets under management as of 30 September 2014, respectively).
The regional allocation of third-party assets under management shifted slightly due to the allocation of certain entities to other business segments, due to the change in reporting of fund of fund assets, positive market effects and foreign currency translation effects.
The relative share of our third-party assets under management increased by one percentage point in equities. This was mainly driven by the impact of market return, positive foreign currency translation effects and the change in reporting to include third-party fund of fund assets under management in our total assets under management. As of 30 September 2014, 86% of third-party assets under management were attributable to fixed income and 14% to equities.
The share of third-party assets under management between our retail and institutional clients2 changed slightly – down one percentage point for retail clients (36 %) and up one percentage point for institutional clients (64%).
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 88 % of our assets outperforming their respective benchmarks (31 December 2013: 85%). 93% of PIMCO assets outperformed their respective benchmarks while 58% of AllianzGI assets outperformed their respective benchmarks.
Operating revenues fell by € 85 MN, or 5.0 %, to € 1,618 MN. This was mainly driven by lower management and loading fees, but also reflects the allocation of certain entities to other business segments. On an internal basis1, operating revenues went down by 2.5%.
Net fee and commission income declined by € 81 MN, or 4.7%, to € 1,617 MN. This largely reflects a decrease in management and loading fees, mainly driven by lower margins. Our performance fees decreased by € 2 MN to € 40 MN.
Our operating revenues fell by € 687 MN, or 12.7%, to € 4,742 MN. On an internal basis1, operating revenues went down 8.5%. This was mainly the result of a € 270 MN decrease in performance fees – which were exceptionally high in the first quarter of 2013 – and lower average third-party assets under management.
Our operating profit declined to € 694 MN, a contraction of € 61 MN, or 8.1%, primarily due to lower management and loading fees. On an internal basis1, operating profit fell by 5.0%.
Administrative expenses went down by € 25 MN to € 925 MN, driven by lower personal expenses as well as lower assets under management related expenses.
Our cost-income ratio went up by 1.4 percentage points mainly as a result of the reduction in management and loading fees.
Our operating profit decreased by € 443 MN, or 18.0 %, to € 2,015 MN (internal growth1: (13.4)%) while the cost-income ratio rose by 2.8 percentage points. The main drivers are as described in the first nine months comparison of the operating revenues.
In the third quarter of 2014, our net income decreased by € 44 MN, or 9.2 %, to € 438 MN. In the first nine months of 2014 our net income decreased by € 275 MN to € 1,263 MN. This is largely consistent with our operating profit development.
1 Operating revenues/operating profit adjusted for foreign currency translation and (de-) consolidation effects.
5 Executive Summary
28 Asset Management
22 Life/Health Insurance Operations 35 Outlook 37 Balance Sheet Review
44 Reconciliations
€ MN
| three months ended 30 September | nine months ended 30 September | |||
|---|---|---|---|---|
| 2014 | 2013 | 2014 | 2013 | |
| Management and loading fees | 1,938 | 2,004 | 5,653 | 6,076 |
| Performance fees | 40 | 42 | 126 | 396 |
| Other | 6 | 12 | 37 | 51 |
| Fee and commission income | 1,984 | 2,059 | 5,817 | 6,524 |
| Commissions | (336) | (337) | (956) | (1,062) |
| Other | (31) | (24) | (127) | (58) |
| Fee and commission expenses | (367) | (361) | (1,083) | (1,121) |
| Net fee and commission income | 1,617 | 1,697 | 4,734 | 5,403 |
| Net interest income1 | (2) | 3 | (3) | 10 |
| Income from financial assets and liabilities carried at fair value through income (net) | 2 | 1 | 5 | 8 |
| Other income | 1 | 2 | 6 | 8 |
| Operating revenues | 1,618 | 1,703 | 4,742 | 5,429 |
| Administrative expenses (net), excluding acquisition-related expenses | (925) | (949) | (2,730) | (2,966) |
| Restructuring charges | – | 1 | 3 | (5) |
| Operating expenses | (925) | (949) | (2,727) | (2,971) |
| Operating profit | 694 | 755 | 2,015 | 2,458 |
| Non-operating items | 2 | (5) | (15) | (59) |
| Income before income taxes | 696 | 749 | 2,000 | 2,399 |
| Income taxes | (258) | (267) | (738) | (861) |
| Net income | 438 | 482 | 1,263 | 1,538 |
| Cost-income ratio2 in % | 57.1 | 55.7 | 57.5 | 54.7 |
1 Represents interest and similar income less interest expenses.
2 Represents operating expenses divided by operating revenues.
Third quarter 2014
Operating loss increased by € 19 mn to € 248 mn, 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 Allianz Group businesses through its strategy, risk, corporate finance, treasury, financial reporting, controlling, communication, legal, human resources and technology 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 30 September |
2014 | 2013 |
|---|---|---|
| Operating revenues | 418 | 387 |
| Operating expenses | (666) | (616) |
| Operating result | (248) | (229) |
| Net income (loss) | (311) | (307) |
| € mn | ||
|---|---|---|
| three months ended 30 September | 2014 | 2013 |
| Holding & Treasury | ||
| Operating revenues | 100 | 82 |
| Operating expenses | (367) | (320) |
| Operating result | (267) | (238) |
| Banking | ||
| Operating revenues | 273 | 258 |
| Operating expenses | (261) | (254) |
| Operating result | 11 | 4 |
| Alternative Investments | ||
| Operating revenues | 47 | 47 |
| Operating expenses | (39) | (42) |
| Operating result | 8 | 5 |
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.
5 Executive Summary
Earnings summaries
Our operating result decreased by € 19 mn to a loss of € 248 mn. A € 29 mn decline in our operating result in Holding&Treasury was only partly compensated for by improvements in Banking and Alternative Investments.
Our net result was stable at a loss of € 311 mn (3Q 2013: € 307 mn). The increase in our operating loss was almost offset by the increase in non-operating realized gains and positive tax effects.
Our operating result improved by € 53 mn to a loss of € 689 mn. An increase in our loss in Holding&Treasury was more than compensated for by the recovery of our operating Banking result, which benefited from the closure of the Allianz Bank's business operations in mid-2013.
Our net result strengthened by € 553 mn to a loss of € 429 mn. This was primarily driven by a one-off benefit from pension revaluation with our German subsidiaries.1 It was only partly offset by lower nonoperating realized gains as a result of the non-recurrence of gains related to our investment in The Hartford, which was sold in 2013.
Our operating loss increased by € 29 mn to € 267 mn. Higher pension costs and strategic IT investment costs were offset by the improvement in our net interest result. However, in the third quarter of 2013, the operating profit benefited from a € 26 mn reduction of a restructuring provision.
Our net interest result improved by € 25 mn to a loss of € 11 mn. This was entirely driven by higher interest and similar income, which increased from € 47 mn to € 71 mn due to greater income from an increased volume of debt instruments but also from higher dividends on equities. Interest expenses, excluding interest expenses from external debt, remained unchanged at € 82 mn as the effects of lower interest expenses on internal debt and higher expenses related to a higher cash pool balanced each other out.
Administrative expenses (net), excluding acquisition-related expenses were up by € 22 mn to € 199 mn. This was mainly due to higher pension costs and numerous smaller effects.
Our net fee and commission result worsened by € 8 mn to a loss of € 55 mn. This was primarily because of higher strategic IT investment costs – in particular related to our global data center consolidation project.
During the third quarter of 2014 we reduced a restructuring provision related to our global data center consolidation project by € 4 mn (3Q 2013: € 26 mn).
Investment expenses remained unchanged at € 18 mn.
Our operating loss increased by € 77 mn to € 760 mn. This was mainly a result of a € 38 mn deterioration in our net fee and commission result because of higher IT project startup costs and a decline linked to the above-mentioned restructuring charge reduction. In addition, an € 8 mn dip in our net interest result – which amounted to a loss of € 45 mn – also contributed to this development. This was largely due to lower interest and similar income, as the previous year's figures benefited from interest payments on our silent participation in Commerzbank, which was redeemed in 2013. However, it was partly offset by higher interest income from an increased volume of debt instruments and higher income from equities and associates.
Our operating profit increased by € 7 mn to € 11 mn, mainly due to lower loan loss provisions.
Our net interest, fee and commission result was stable at € 132 mn (3Q 2013: € 129 mn). The net interest result remained unchanged at € 83 mn as both interest and similar income and interest expenses decreased by € 5 mn due to the low interest yield environment. Our net fee and commission result was up by € 3 mn to € 49 mn. This slight increase was mainly driven by the allocation of a former Asset Management entity to the reportable segment Banking in Italy.
Administrative expenses increased from € 109 mn to € 117 mn. This was largely due to higher commissions paid to financial agents in Italy. The above-mentioned allocation also contributed to this development.
Our loan loss provisions decreased by € 11 mn to € 7 mn. This was mainly because of lower loan loss provisions related to our ship financing business in Germany.
1 For further information on the one-off effect from pension revaluation, please refer to note 4 to the condensed consolidated interim financial statements.
2 Effective 1 January 2014, the Allianz Group allocated certain entities from the reportable segment Asset Management to the reportable segments German Speaking Countries, Western&Southern Europe and Growth Markets within the business segment Life/Health and to the reportable segment Banking.
Our operating result turned from a loss of € 80 mn into a profit of € 46 mn. This recovery was mainly the result of the closure of the Allianz Bank's business operations in mid-2013, and in particular the non-recurrence of restructuring charges related to this closure.
Our operating result increased by € 3 mn to € 8 mn. This was mainly due to a decrease in administrative expenses.
In line with the third quarter development, our operating result improved from € 20 mn to € 24 mn.
22 Life/Health Insurance Operations 35 Outlook
32 Corporate and Other
37 Balance Sheet Review 44 Reconciliations
− Upward forces in the global economy to retain the upper hand.
− Operating profit outlook unchanged – the upper end of target range is in reach.
As 2014 draws to a close, the global economic environment is somewhat mixed. The global purchasing managers' index for the manufacturing industry, for instance, remained stable in the third quarter of 2014, hovering resolutely above the threshold that is indicative of expansion. This suggests some upside potential for industrial production around the world. However, the level reached by the overall indicator owed a lot to the positive view of business activity in the U.S. industrial sector. We expect the U.S. economy to experience solid growth in 2015, based primarily on improving domestic demand. In the Eurozone, current economic indicators suggest that economic development is likely to remain relatively subdued in the final quarter of this year. Until the end of 2015 we expect to see a moderate revival of the Eurozone economy. This is likely to be based on a steady – albeit gradual – strengthening of domestic demand and on more dynamic world trade. For 2015 as a whole, we expect real GDP growth of 1.2% in the Eurozone, following an increase of 0.8% this year. The overall Eurozone figure conceals some major differences, however. We will increasingly have to differentiate between "reformed" countries and those "with reforms outstanding". For instance, some countries are likely to finally reap the rewards of their reform efforts and expand significantly more strongly than the Eurozone average, whereas economic recovery will continue to remain relatively weak and vulnerable in countries which have a considerable reform backlog. Growth in emerging market economies has decelerated in recent years, mainly for structural reasons. We expect these markets to grow by 4.1% this year, the weakest since the global recession in 2009. Real economic growth is then expected to pick up slightly to 4.6% in 2015 – bolstered by more dynamic economic activity in eastern European and Latin American countries. All in all, global output is likely to grow by 3.0% in 2015, following an expected increase of 2.5% this year. Inflation is likely to remain subdued on a worldwide level, not least due to the dire unemployment situation in many industrialized countries, which keeps the lid on wages. However, risks for the global economy have increased over the course of the current year, in particular in the geopolitical sphere. One example is the risk of a renewed escalation of the conflict between Russia and Ukraine.
Like this year, 2015 will probably stand under the twin spell of monetary policy and geopolitical tensions. Regarding the former, the U.S. central bank (Fed) is likely to make further corrections to its extraordinarily expansive monetary policy by raising the key interest rate towards the 1% mark by the end of next year. It is very likely, however, that the European Central Bank (ECB) will embark on rate hikes later than the Fed, i.e. not before autumn 2015. The exit from the ECB's ultra-loose monetary policy is likely to focus on interest rate policy to start with, because the ECB has already promised to provide unlimited liquidity until the end of 2016 and the new, targeted, more longterm refinancing operations will take place until mid-2016.
With short-term rates close to zero, there are limited prospects of markedly higher yields on longer-term bonds. We expect yields on 10-year German and U.S. government bonds to climb only moderately until the end of next year. With the ECB starting to normalize its key interest rates later than the Fed, the U.S. Dollar is likely to appreciate from its current level against the Euro well into next year.
Economic tailwinds for the insurance industry are set to blow for the remainder of 2014 and into 2015 – if only gently. At the same time, differences in growth levels between markets will become wider, reflecting specific political, regulatory and economic conditions. In that respect, we will see not only the usual growth gap between emerging and industrialized countries but also a widening gulf within these groups, namely between America and Europe on the one hand and Asia and other emerging markets on the other. The same can be said about the outlook for profitability: Many challenges remain, for example low investment returns and a more demanding regulatory environment. However, more and more companies are now well positioned to cope with these challenges, thanks to strong capital buffers, innovative products and a shifting business mix.
In the property-casualty sector, we anticipate stable premium growth both in the remainder of 2014 and in 2015, driven mainly by the increase in economic activity. Pricing in motor insurance remains under pressure in most markets, reflecting a benign claims environment and intense competition, but other personal and commercial lines are in a better position – although we do not expect further rate hardening across the board. Overall, we expect global premium
1 The information presented in the sections Economic outlook, Insurance industry outlook and Asset management industry outlook is based on our own estimates.
revenue to rise between 4% and 5% in 2014 and 2015 (adjusted for foreign currency translation effects).
In the life sector, we expect premium growth to continue to recover. In mature markets, rising employment in some markets and a new product mix will help to support top-line growth. In emerging markets, strong growth will be mainly driven by rising incomes and social security reforms, boosting demand for pension products. Financial market developments should support demand, too, as consumers increasingly ask for more sophisticated savings products beyond bank deposits. All in all, we expect that global premium revenue will rise in the 3.5% – 4.5% range per annum in 2014 and 2015 (adjusted for foreign currency translation effects).
With interest rates remaining at low levels, companies will continue to adapt their business models to the challenging environment. Besides a stronger focus on the protection business – including health – new and more flexible guarantee concepts are set to come to the forefront in the savings business. At the same time, insurers will continue to look for new, long-term investment opportunities, paying special attention to infrastructure investments. These adjustments, along with strong capital buffers, leave the insurance industry well placed to cope with more stringent capital and reserve requirements.
Increasing asset valuations for equities and decreasing bond-yields in developed markets have provided a tailwind for the asset management industry in the first half of 2014. The third quarter of 2014, however, was a period of consolidation, with a lowering of global growth expectations and political uncertainties coming to the fore. Discussions around central bank policies, in particular in the United States and Europe, were an additional source of uncertainty. The development of regulatory activities – particularly in the consumer protection and transparency fields – is an additional source of uncertainty for the asset management industry.
Equities have shown some volatility in recent months and with investors anticipating an increase in U.S. interest rates we expect this instability to continue. The dollar rapidly strengthened and reached its strongest level in more than four years. Interest rates, however, have continued their downward trend. Nevertheless, if the longerterm trend is towards higher interest rates – especially in the United States – coupled with global demographic developments, then bonds should become more attractive. This holds true in particular for liability-driven investors and for the growing number of retirees in the developed world looking for a stable stream of income.
A continuation of improving economic conditions, in particular in the United States, as well as trends in client demand, still represent a positive environment for further asset management industry growth. At the same time, industry profitability is expected to remain challenged as asset flows into passive products and growing expenses from higher distribution or marketing costs put pressure on operating margins, and the effects of increased regulatory oversight and reporting take their toll.
In such an environment a money manager's ability to grow is dependent on providing innovative client-focused investment solutions, delivering above-benchmark investment results, offering comprehensive investment products and services, its ability to prudently and holistically respond to client needs and upping the scale and efficiency of operations.
We are confident about staying on course in the last quarter of this year. The upper end of our operating profit target range of € 10.0 BN, plus or minus € 0.5 BN, is in reach. However, as we witnessed in 2013, 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 nine month'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.
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.
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.
37 Balance Sheet Review 44 Reconciliations
Unrealized gains/losses (net)
Compared to year-end 2013, shareholders' equity grew by € 8,115 mn – or 16.2 % – and amounted to € 58,199 mn as of 30 September 2014. Unrealized gains increased by € 5,638 mn, mainly due to higher fair values triggered by the declines in all major government bond yields – in particular within the Eurozone. In addition, our net income attributable to shareholders of € 5,002 mn contributed to this increase. A € 1,079 mn increase in foreign currency translation adjustments, mainly driven by the significant appreciation of the U.S. Dollar against the Euro further contributed to the growth. These effects were partly offset by the € 2,405 mn dividend payout in May 2014.
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 the potential calls of hybrid capital (subordinated bonds) of € 1.4 bn in the coming year, the solvency ratio as of 30 September 2014 would be 176% (30 June 2014: 177%; 31 December 2013: 173%).
2 Conglomerate solvency ratio as of 30 September 2014 was adjusted for the potential calls of hybrid capital (subordinated bonds) of € 1.4 bn in the coming year. Excluding this adjustment, the solvency ratio would be 190% as of 30 September 2014.
Compared to 31 December 2013, our conglomerate solvency ratio slightly increased three percentage points to 184%.1, 2 The Group's eligible capital for solvency purposes went up by € 3.2 bn to € 49.8 bn, which includes off-balance sheet reserves of € 2.2 bn (31 December 2013: € 2.3 bn) and was adjusted for the potential calls of hybrid capital (subordinated bonds) in the coming year. This increase was mainly driven by our net income (net of accrued dividends) of € 3.0 bn. The issuance of two subordinated bonds in the first and third quarter of € 1.9 bn was partly offset by the € 1.4 bn adjustment made to already reflect the potential calls in 2015. An increase in actuarial losses on
the valuation of our pension benefit obligation following a decrease in discount rates was offset by higher unrealized gains on equities and favorable foreign currency translation adjustments. The required funds increased by € 1.4 bn to € 27.0 bn, mainly due to higher aggregate policy reserves in Life/Health. As a result, our eligible capital surpassed the minimum legally stipulated level by € 22.8 bn.
As of 30 September 2014, total assets amounted to € 784.5 bn and total liabilities were € 723.4 bn. Compared to year-end 2013, total assets and total liabilities increased by € 73.4 bn and € 65.2 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.1
Compared to year-end 2013, our investment portfolio increased by € 60.4 bn to € 597.3 bn as of 30 September 2014 with no relative change in asset allocation.
Our gross exposure to equities increased by € 4.1 bn to € 39.7 bn due to new investments. This was also supported by positive developments in some major equity markets over the first nine months of 2014. Although this exposure still accounted for 7% of our investment
portfolio, given the upswing in shareholders' equity our equity gearing2 decreased one percentage point to 24%.
Our exposure to real estate increased by € 0.5 bn to € 11.2 bn due to new investments.
Our cash and other investments was up by € 0.6 bn to € 10.4 bn.
Our diversified exposure to debt instruments grew by € 55.3 bn to € 536.0 bn, but still represented 90% of our investment portfolio. The increase in absolute terms was driven by new investments and higher fair values as a result of lower interest rates.
Total fixed income portfolio as of 30 September 2014: € 536.0 bn [as of 31 December 2013: € 480.7 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 minor reductions in the portion of covered bonds and banks. About 95% of this portfolio of debt instruments was invested in investment-grade bonds and loans.3
As of 30 September 2014, our government bond exposure totaled to € 202.3 bn, an increase of € 22.7 bn compared to year-end. The allocation of our government and government-related bond exposure remained rather stable, with a marginal decrease in the share of German government bonds reflecting the decision not to reinvest in those bonds at the low yield levels. The overall increase of the government bond exposure was primarily driven by positive market effects. Our sovereign debt exposure in Italy and Spain equaled 5.8% and 1.0% of our fixed income portfolio, reflecting new investments in Spain during the first nine months of 2014. The corresponding unrealized gains (gross) amounted to € 4,801 mn in Italy and € 735 mn in Spain. Our government bond exposure in Portugal remained limited with unrealized gains of a minor amount.
3 Excluding self-originated German private retail mortgage loans. For 2%, no ratings were available.
1 Effective from the Annual Report 2013, we changed the presentation of our investment portfolio in our Group Management Report. This also applies to our Interim Group Management Reports. Now, we also include investments of banking and asset management, which were excluded in the former presentation. We believe this will simplify a comparison with the figures presented in the notes to the condensed consolidated interim financial statements.
2 Equity gearing is defined as the ratio of our equity holdings allocated to the shareholder after policyholder participation and hedges to shareholders' equity plus off-balance sheet reserves less goodwill.
5 Executive Summary
37 Balance Sheet Review 44 Reconciliations
Our covered bond portfolio increased by € 5.8 bn to € 108.3 bn and accounted for 20 % of our fixed income portfolio – one percentage point lower than year-end 2013. 44% (31 December 2013: 47%) of this portfolio was German Pfandbriefe, backed by either public sector loans or mortgage loans. Another 16% and 10% of the covered bonds were attributable to France and Spain, respectively. Covered bonds provide a cushion against real estate price deterioration and payment defaults through minimum required security buffers and overcollateralization.
Our corporate bonds grew by € 22.4 bn to € 138.7 bn – representing an increase from 24 % as of 31 December 2013 to 26 % of our fixed income portfolio at the end of the third quarter. This increase was driven by new investments and to a lesser extent lower interest rates leading to fair value increases.
Our exposure to bank securities remained almost unchanged at € 33.3 bn (31 December 2013: € 33.1 bn). Given the growth in our total fixed income portfolio, the portfolio share of this exposure decreased by one percentage point to 6%. Thereof, the exposure to subordinated securities in banks slightly increased from € 4.8 bn as of year-end to € 5.3 bn.
Our exposure to asset-backed securities (ABS) went up by € 3.6 bn to € 22.0 bn and still accounted for 4% of our fixed income portfolio. The increase was largely related to new investments. About 72% 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 15% of the ABS portfolio. Overall, 98 % of the ABS portfolio received an investment grade rating, with 87% rated "AA" or better.
| € mn | three months ended 30 September |
nine months ended 30 September |
|||
|---|---|---|---|---|---|
| 2014 | 2013 | 2014 | 2013 | ||
| Interest and similar income (net)1 | 5,196 | 5,036 | 15,673 | 15,403 | |
| Income from financial assets and liabilities carried at fair value through income (net) |
(231) | (563) | (604) | (1,489) | |
| Realized gains/losses (net) | 893 | 690 | 2,825 | 3,028 | |
| Impairments of investments (net) | (156) | (162) | (592) | (478) | |
| Investment expenses | (261) | (227) | (693) | (653) | |
| Investment income (net) | 5,440 | 4,774 | 16,610 | 15,812 |
1 Net of interest expenses (excluding interest expenses from external debt).
Our investment income (net) increased by € 665 mn – or 13.9 % – to € 5,440 mn. This advance resulted primarily from an improvement of our income from financial assets and liabilities carried at fair value through income (net) but also from an increase in realized gains and losses (net).
Income from financial assets and liabilities carried at fair value through income (net) improved by € 331 mn to a loss of € 231 mn. In the previous year's quarter, the result was considerably impacted by losses from the net of foreign currency translation effects and financial derivatives, mainly within our German Life/Health business. Derivatives are used to protect against equity and foreign currency fluctuations as well as to manage duration and other interest raterelated exposures. The recovery compared to the previous year's quarter was mainly due to an improved foreign currency result mainly driven by a burdened third quarter of 2013 due to the depreciation of selected emerging markets currencies.
Realized gains and losses (net) were up by € 203 mn to € 893 mn. This was primarily because of higher realizations on debt instruments, and to a lesser extent equities.
Our interest and similar income (net)1 increased by € 160 mn to € 5,196 mn. This was mainly due to higher interest income as a result of a higher asset base.
Impairments (net) were largely unchanged at € 156 mn (3Q 2013: € 162 mn).
Investment expenses increased by € 34 mn to € 261 mn. This was mainly due to asset management fees.
Our investment income (net) increased by € 798 mn to € 16,610 mn largely as a result of the recovery of our income from financial assets and liabilities carried at fair value through income (net).
Compared to year-end, the Property-Casualty asset base increased by € 5.5 bn to € 106.6 bn. This was primarily driven by higher debt securities, but also by increased equities. It was partly offset by lower loans and advances to banks and customers.
| € bn | ||
|---|---|---|
| as of 30 September |
as of 31 December |
|
| 2014 | 2013 | |
| Financial assets and liabilities carried at fair value through income |
||
| Equities | 0.5 | 0.4 |
| Debt securities | 0.1 | 0.1 |
| Other2 | (0.1) | – |
| Subtotal | 0.5 | 0.6 |
| Investments3 | ||
| Equities | 6.1 | 5.0 |
| Debt securities | 71.6 | 67.0 |
| Cash and cash pool assets4 | 5.3 | 4.9 |
| Other | 7.9 | 7.5 |
| Subtotal | 91.0 | 84.4 |
| Loans and advances to banks and customers | 15.1 | 16.1 |
| Property-Casualty asset base | 106.6 | 101.1 |
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 € (0.2) bn and € (0.1) bn as of 30 September 2014 and 31 December 2013, respectively.
3 These do not include affiliates of € 8.9 bn and € 8.9 bn as of 30 September 2014 and 31 December 2013, respectively.
4 Including cash and cash equivalents, as stated in our business segment balance sheet of € 3.1 bn and € 2.8 bn and receivables from cash pooling amounting to € 4.6 bn and € 3.4 bn, net of liabilities from securities lending and derivatives of € (0.1) bn and € (0.3) bn, as well as liabilities from cash pooling of € (2.3) bn and € (1.0) bn as of 30 September 2014 and 31 December 2013, respectively.
ABS within the Property-Casualty business segment amounted to € 4.1 bn, an uptick of € 0.4 bn compared to year-end. This exposure represented 3.8% (31 December 2013: 3.6%) of the business segment's asset base.
| € bn | |||
|---|---|---|---|
| Gross | Ceded | Net | |
| As of 1 January 2014 | 56.6 | (6.1) | 50.5 |
| Balance carry forward of discounted loss reserves2 |
3.2 | (0.3) | 2.9 |
| Subtotal | 59.8 | (6.4) | 53.4 |
| Loss and loss adjustment expenses paid in current year relating to previous years |
(11.7) | 1.1 | (10.6) |
| Loss and loss adjustment expenses incurred in previous years |
(1.1) | 0.2 | (0.9) |
| Foreign currency translation adjustments and other changes |
1.7 | (0.3) | 1.4 |
| Changes in reserves for loss and loss adjustment expenses in current year |
13.5 | (1.4) | 12.1 |
| Subtotal | 62.2 | (6.8) | 55.4 |
| Ending balance of discounted loss reserves2 |
(3.5) | 0.3 | (3.2) |
| As of 30 September 2014 | 58.6 | (6.5) | 52.2 |
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 30 September 2014, the business segment's gross reserves for loss and loss adjustment expenses and discounted loss reserves amounted to € 62.2 bn – an increase of € 2.3 bn compared to year-end. On a net basis, our reserves – including discounted loss reserves – increased from € 53.4 bn to € 55.4 bn. Foreign currency translation effects and other changes amounted to a plus of € 1.4 bn on a net basis.
5 Executive Summary
28 Asset Management
37 Balance Sheet Review 44 Reconciliations
Assets and liabilities of the Life/Health BUSINESS segment
The Life/Health asset base grew by € 60.7 bn – or 12.5% – to € 547.2 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 | as of | |
| 30 September | 31 December | |
| 2014 | 2013 | |
| Financial assets and liabilities carried at fair value through income |
||
| Equities | 1.8 | 1.4 |
| Debt securities | 2.4 | 2.5 |
| Other1 | (6.0) | (4.2) |
| Subtotal | (1.7) | (0.3) |
| Investments2 | ||
| Equities | 31.1 | 28.9 |
| Debt securities | 317.9 | 269.3 |
| Cash and cash pool assets3 | 7.4 | 7.5 |
| Other | 10.5 | 10.0 |
| Subtotal | 367.0 | 315.8 |
| Loans and advances to banks and customers | 91.1 | 89.9 |
| Financial assets for unit-linked contracts4 | 90.8 | 81.1 |
| Life/Health asset base | 547.2 | 486.5 |
1 This comprises assets of € 1.3 bn and € 1.7 bn and liabilities (including the market value liability option) of € (7.3) bn and € (5.9) bn as of 30 September 2014 and 31 December 2013, respectively.
ABS within the Life/Health asset base increased by € 2.3 bn, mainly due to new investments, and amounted to € 16.2 bn. This exposure represented 3.0% (31 December 2013: 2.8%) of the business segment's asset base.
| € Bn | |||
|---|---|---|---|
| Unit-linked insurance contracts |
Unit-linked investment contracts |
Total | |
| As of 1 January 2014 | 55.4 | 25.7 | 81.1 |
| Net premium inflows (outflows) | 2.0 | 3.2 | 5.1 |
| Changes in fund value | 2.8 | 1.3 | 4.0 |
| Foreign currency translation adjustments |
2.6 | 0.2 | 2.7 |
| Other changes | (2.1) | – | (2.1) |
| As of 30 September 2014 | 60.5 | 30.3 | 90.8 |
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.
Financial assets for unit-linked contracts were up by € 9.7 bn – or 12.0 % – to € 90.8 bn. Unit-linked insurance contracts increased by € 5.1 bn to € 60.5 bn due to good fund performance (€ 2.8 bn) and premium inflows exceeding outflows by € 2.0 bn. This was partly offset by transfers to the general account in France (€ (0.9) bn). Unit-linked investment contracts increased by € 4.6 bn to € 30.3 bn, with premium inflows significantly exceeding outflows (net € 3.2 bn). Currency effects were driven by the stronger U.S. Dollar (€ 2.1 bn) and Asian currencies (€ 0.6 bn).1
Life/Health reserves for insurance and investment contracts increased by € 43.8 bn – or 11.2% – to € 434.7 bn in the first nine months of 2014. The € 18.7 bn increase in aggregate policy reserves was mainly driven by our operations in Germany (€ 7.6 bn), the United States (€ 6.2 bn before currency effects), Italy (€ 1.5 bn), Luxembourg (€ 0.6 bn) and Switzerland (€ 0.5 bn before currency effects). Reserves for premium refund increased by € 18.2 bn due to higher unrealized gains to be shared with policyholders. Currency impacts resulted from the stronger U.S. Dollar (€ 5.3 bn), Asian currencies (€ 1.4 bn) and the Swiss Franc (€ 0.1 bn).1
1 Based on the closing rate on the respective balance sheet dates.
2 These do not include affiliates of € 0.1 bn and € 0.8 bn as of 30 September 2014 and 31 December 2013, respectively.
3 Including cash and cash equivalents, as stated in our business segment balance sheet, of € 6.9 bn and € 5.8 bn and receivables from cash pooling amounting to € 2.7 bn and € 3.5 bn, net of liabilities from securities lending and derivatives of € (2.2) bn and € (1.7) bn, as well as liabilities from cash pooling of € (0.1) bn and € (0.0) bn as of 30 September 2014 and 31 December 2013, 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.
The Asset Management business segment's results are derived primarily from third-party asset management. In this section, we refer only to the business segment's own assets.1
The business segment's asset base decreased from € 4.5 bn to € 2.9 bn – mainly from debt securities as a result of the allocation of certain entities to other reportable segments. Cash and cash pool assets are now the remaining main component of the business segment's asset base.
Liabilities in our Asset Management business segment decreased from € 4.0 bn as of year-end to € 2.6 bn, primarily due to the abovementioned allocation.
The Corporate and Other asset base increased by € 4.1 bn to € 45.4 bn. This was due to an increased volume of debt securities and, to a lesser extent, equities.
| € bn | ||
|---|---|---|
| as of 30 September 2014 |
as of 31 December 2013 |
|
| Financial assets and liabilities carried at fair value through income |
||
| Equities | 0.1 | – |
| Debt securities | 0.1 | – |
| Other1 | (0.5) | (0.2) |
| Subtotal | (0.2) | (0.2) |
| Investments2 | ||
| Equities | 2.5 | 1.7 |
| Debt securities | 29.6 | 26.4 |
| Cash and cash pool assets3 | (4.6) | (5.0) |
| Other | 0.3 | 0.3 |
| Subtotal | 27.7 | 23.4 |
| Loans and advances to banks and customers | 17.9 | 18.2 |
| Corporate and Other asset base | 45.4 | 41.3 |
1 This comprises assets of € 0.1 bn and € 0.3 bn and liabilities of € (0.6) bn and € (0.5) bn as of 30 September 2014 and 31 December 2013, respectively.
2 These do not include affiliates of € 77.1 bn and € 75.4 bn as of 30 September 2014 and 31 December 2013, respectively.
3 Including cash and cash equivalents, as stated in our business segment balance sheet, of € 1.5 bn and € 1.5 bn and receivables from cash pooling amounting to € 1.9 bn and € 0.7 bn, net of liabilities from securities lending and derivatives of € (0.0) bn and € (0.2) bn, as well as liabilities from cash pooling of € (8.0) bn and € (7.1) bn as of 30 September 2014 and 31 December 2013, respectively.
Our exposure to ABS investments increased by € 0.8 bn to € 1.7 bn. This was due to new investments, representing an increase from 2.2% to 3.8% of the Corporate and Other's asset base.
Compared to year-end, other liabilities increased by € 2.3 bn to € 25.9 bn. This was largely related to pension obligations. Subordinated liabilities increased by € 0.5 bn to € 12.0 bn as of 30 September 2014 as the redemption of a € 1.5 bn perpetual bond was more than offset by the issuance of two undated subordinated bonds with a volume of CHF 500 mn and € 1.5 bn in the first and third quarter of 2014, respectively. Certificated liabilities were down by € 0.4 bn to € 12.8 bn.2
2 For further information on Allianz SE debt as of 30 September 2014, please refer to notes 18 and 19 to the condensed consolidated interim financial statements.
1 For further information on the development of these third-party assets, please refer to the Asset Management chapter. Effective 1 January 2014, the Allianz Group allocated certain entities from the reportable segment Asset Management to the reportable segments German Speaking Countries, Western&Southern Europe and Growth Markets within the business segment Life/Health and to the reportable segment Banking.
37 Balance Sheet Review
44 Reconciliations
| 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 | € 46.4 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 | € 5.3 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 | € 55.1 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 | € 40.4 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 | € 17.7 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 | € 32.1 mn | |
| Total interest expenses for senior bonds | € 197.0 mn | |
| 2. Subordinated bonds3 | ||
| 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 | € 49.6 mn | |
| 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 |
|
1 For further information on Allianz SE debt (issued or guaranteed) as of 30 September 2014, 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.
| 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 | € 64.5 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 | € 47.5 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 | € 32.2 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 | € 32.7 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 | € 53.8 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 | € 9.1 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 | € 1.8 mn | |
| Total interest expenses for subordinated bonds | € 378.3 mn | |
| 3. Issues redeemed in 2014 | ||
| 5.5% bond issued by Allianz SE | ||
| Volume | € 1.5 BN | |
| Year of issue | 2004 | |
| Maturity date | Perpetual Bond | |
| ISIN | XS 018 716 232 5 | |
| Interest expenses | € 3.2 mn | |
| Sum of interest expenses1 | € 578.5 mn | |
| Interest expenses from external debt | ||
| not presented in the table | € 44.5 mn |
Total interest expenses from external debt € 623.0 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.
The previous analysis is based on our condensed consolidated interim financial statements and should be read in conjunction with them. In addition to our stated figures according to the International Financial Reporting Standards (IFRS), the Allianz Group uses operating profit and internal growth to enhance the understanding of our results. These additional measures should be viewed as complementary to, and not as a 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 30 September | nine months ended 30 September | ||||
| 2014 | 2013 | 2014 | 2013 | ||
| Property-Casualty | |||||
| Gross premiums written | 11,254 | 10,650 | 37,317 | 36,602 | |
| Life/Health | |||||
| Statutory premiums | 15,853 | 12,698 | 49,977 | 41,659 | |
| Asset Management | |||||
| Operating revenues | 1,618 | 1,703 | 4,742 | 5,429 | |
| consisting of: | |||||
| Net fee and commission income | 1,617 | 1,697 | 4,734 | 5,403 | |
| Net interest income | (2) | 3 | (3) | 10 | |
| Income from financial assets and liabilities carried at fair value through income (net) |
2 | 1 | 5 | 8 | |
| Other income | 1 | 2 | 6 | 8 | |
| Corporate and Other | |||||
| Total revenues (Banking) | 135 | 131 | 405 | 412 | |
| consisting of: | |||||
| Interest and similar income | 146 | 152 | 445 | 463 | |
| Income from financial assets and liabilities carried at fair value through income (net) |
3 | 2 | 9 | 7 | |
| Fee and commission income | 123 | 104 | 364 | 348 | |
| Interest expenses, excluding interest expenses from external debt | (64) | (68) | (194) | (213) | |
| Fee and commission expenses | (73) | (58) | (219) | (192) | |
| Consolidation effects (Banking within Corporate and Other) | (1) | – | 1 | (1) | |
| Consolidation | (80) | (39) | (241) | (134) | |
| Allianz Group total revenues | 28,781 | 25,144 | 92,201 | 83,968 |
28 Asset Management
37 Balance Sheet Review 44 Reconciliations
Composition of total revenue growth
We believe that an understanding of our total revenue performance is enhanced when the effects of foreign currency translation as well as acquisitions, 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 30 September | nine months ended 30 September | ||||||
|---|---|---|---|---|---|---|---|---|
| Internal growth | Changes in scope of consolidation |
Foreign currency translation |
Nominal growth |
Internal growth | Changes in scope of consolidation |
Foreign currency translation |
Nominal growth |
|
| Property-Casualty | 4.7 | 1.2 | (0.2) | 5.7 | 3.0 | 0.9 | (1.9) | 2.0 |
| Life/Health | 25.0 | – | (0.2) | 24.9 | 20.5 | 0.7 | (1.3) | 20.0 |
| Asset Management | (2.5) | (2.5) | – | (5.0) | (8.5) | (2.3) | (2.0) | (12.7) |
| Corporate and Other | 0.8 | 1.7 | – | 2.6 | (4.0) | 2.3 | – | (1.7) |
| Allianz Group | 14.3 | 0.3 | (0.2) | 14.5 | 10.8 | 0.6 | (1.6) | 9.8 |
Pages 48 – 111
| 80 | 5 Financial assets carried at fair value through income |
|---|---|
| 80 | 6 Investments |
| 82 | 7 Loans and advances to banks and customers |
| 82 | 8 Reinsurance assets |
| 82 | 9 Deferred acquisition costs |
| 82 | 10 Other assets |
| 83 | 11 Non-current assets and assets and liabilities of disposal groups classified as held for sale |
| 84 | 12 Intangible assets |
| 85 | 13 Financial liabilities carried at fair value through income |
| 85 | 14 Liabilities to banks and customers |
| 86 | 15 Reserves for loss and loss adjustment expenses |
| 87 | 16 Reserves for insurance and investment contracts |
| 87 | 17 Other liabilities |
| B | Condensed Consolidated Interim Financial Statements | |||
|---|---|---|---|---|
| 49 Consolidated Balance Sheets | 51 Consolidated Statements of | 52 Consolidated Statements of Changes | 53 Consolidated Statements of Cash Flows | |
| 50 Consolidated Income Statements | Comprehensive Income | in Equity | 55 Notes |
€ mn
| note | as of 30 September 2014 |
as of 31 December 2013 |
|
|---|---|---|---|
| ASSETS | |||
| Cash and cash equivalents | 11,658 | 11,207 | |
| Financial assets carried at fair value through income | 5 | 6,162 | 6,660 |
| Investments | 6 | 471,167 | 411,148 |
| Loans and advances to banks and customers | 7 | 116,797 | 116,800 |
| Financial assets for unit-linked contracts | 90,790 | 81,064 | |
| Reinsurance assets | 8 | 13,739 | 12,609 |
| Deferred acquisition costs | 9 | 22,499 | 22,203 |
| Deferred tax assets | 1,798 | 1,508 | |
| Other assets | 10 | 36,004 | 34,632 |
| Non-current assets and assets of disposal groups classified as held for sale | 11 | 180 | 147 |
| Intangible assets | 12 | 13,721 | 13,100 |
| Total assets | 784,516 | 711,079 |
| Financial liabilities carried at fair value through income | 13 | 7,580 | 6,013 |
|---|---|---|---|
| Liabilities to banks and customers | 14 | 22,749 | 23,109 |
| Unearned premiums | 21,141 | 18,212 | |
| Reserves for loss and loss adjustment expenses | 15 | 69,116 | 66,566 |
| Reserves for insurance and investment contracts | 16 | 448,537 | 404,072 |
| Financial liabilities for unit-linked contracts | 90,790 | 81,064 | |
| Deferred tax liabilities | 5,496 | 3,178 | |
| Other liabilities | 17 | 37,803 | 36,431 |
| Liabilities of disposal groups classified as held for sale | 11 | 3 | – |
| Certificated liabilities | 18 | 8,186 | 8,030 |
| Subordinated liabilities | 19 | 12,028 | 11,554 |
| Total liabilities | 723,428 | 658,230 | |
| Shareholders' equity | 58,199 | 50,083 | |
| Non-controlling interests | 2,890 | 2,765 | |
| Total equity | 20 | 61,089 | 52,849 |
| Total liabilities and equity | 784,516 | 711,079 |
€ mn
| note 2014 2013 2014 2013 Gross premiums written 17,393 16,693 56,301 55,346 Ceded premiums written (1,118) (978) (3,609) (3,675) Change in unearned premiums 760 922 (2,270) (2,071) Premiums earned (net) 21 17,035 16,637 50,421 49,600 Interest and similar income 22 5,299 5,129 15,976 15,709 Income from financial assets and liabilities carried at fair value through income (net) 23 (231) (563) (604) (1,489) Realized gains/losses (net) 24 893 690 2,825 3,028 Fee and commission income 25 2,590 2,583 7,536 8,016 Other income 26 37 42 160 144 Income from fully consolidated private equity investments 27 170 181 513 543 Total income 25,793 24,701 76,828 75,552 Claims and insurance benefits incurred (gross) (12,910) (12,268) (38,204) (37,327) Claims and insurance benefits incurred (ceded) 542 393 1,770 1,843 Claims and insurance benefits incurred (net) 28 (12,368) (11,874) (36,434) (35,484) Change in reserves for insurance and investment contracts (net) 29 (3,419) (3,248) (10,457) (10,417) Interest expenses 30 (315) (300) (925) (986) Loan loss provisions 31 (7) (18) (31) (47) Impairments of investments (net) 32 (156) (162) (592) (478) Investment expenses 33 (261) (227) (693) (653) Acquisition and administrative expenses (net) 34 (5,839) (5,581) (16,873) (16,872) Fee and commission expenses 35 (847) (788) (2,459) (2,354) Amortization of intangible assets (34) (30) (83) (87) Restructuring charges (1) 15 8 (84) Other expenses 36 (46) (28) (101) (82) Expenses from fully consolidated private equity investments 27 (181) (184) (529) (555) Total expenses (23,474) (22,424) (69,170) (68,098) Income before income taxes 2,319 2,277 7,658 7,453 Income taxes 37 (632) (746) (2,373) (2,447) Net income 1,687 1,530 5,285 5,007 Net income attributable to: Non-controlling interests 81 85 283 267 Shareholders 1,606 1,445 5,002 4,740 Basic earnings per share (€) 39 3.54 3.19 11.02 10.46 Diluted earnings per share (€) 39 3.52 3.14 10.95 10.33 |
three months ended 30 September |
nine months ended 30 September |
||||
|---|---|---|---|---|---|---|
49 Consolidated Balance Sheets 50 Consolidated Income Statements 51 Consolidated Statements of Comprehensive Income
52 Consolidated Statements of Changes in Equity
53 Consolidated Statements of Cash Flows 55 Notes
| € mn | ||||
|---|---|---|---|---|
| three months ended 30 September |
nine months ended 30 September |
|||
| 2014 | 2013 | 2014 | 2013 | |
| Net income | 1,687 | 1,530 | 5,285 | 5,007 |
| 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 | 906 | (644) | 1,154 | (880) |
| Subtotal | 906 | (644) | 1,154 | (880) |
| Available-for-sale investments | ||||
| Reclassifications to net income | (127) | (137) | (399) | (695) |
| Changes arising during the period | 1,362 | 346 | 6,050 | (2,631) |
| Subtotal | 1,235 | 208 | 5,651 | (3,326) |
| Cash flow hedges | ||||
| Reclassifications to net income | 3 | 12 | 16 | 10 |
| Changes arising during the period | (3) | 2 | 32 | (60) |
| Subtotal | – | 14 | 49 | (49) |
| Share of other comprehensive income of associates | ||||
| Reclassifications to net income | – | – | – | – |
| Changes arising during the period | 35 | (27) | 36 | (42) |
| Subtotal | 35 | (27) | 36 | (42) |
| Miscellaneous | ||||
| Reclassifications to net income | – | – | – | – |
| Changes arising during the period | (35) | (11) | (51) | 76 |
| Subtotal | (35) | (11) | (51) | 76 |
| Items that may never be reclassified to profit or loss | ||||
| Actuarial gains and losses on defined benefit plans | (464) | (110) | (1,155) | (134) |
| Total other comprehensive income | 1,677 | (570) | 5,684 | (4,355) |
| Total comprehensive income | 3,364 | 960 | 10,969 | 652 |
| Total comprehensive income attributable to: | ||||
| Non-controlling interests | 131 | 57 | 409 | 225 |
| Shareholders | 3,233 | 903 | 10,560 | 427 |
For further details concerning income taxes relating to components of other comprehensive income, please see note 37 – Income taxes.
| € 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 2013 | 28,815 | 13,524 | (2,073) | 10,123 | 50,388 | 2,576 | 52,963 |
| Total comprehensive income1 | – | 4,605 | (830) | (3,349) | 427 | 225 | 652 |
| Paid-in capital | – | – | – | – | – | – | – |
| Treasury shares | – | 4 | – | – | 4 | – | 4 |
| Transactions between equity holders | – | (11) | – | 1 | (9) | 120 | 111 |
| Dividends paid | – | (2,039) | – | – | (2,039) | (241) | (2,280) |
| Balance as of 30 September 2013 | 28,815 | 16,084 | (2,903) | 6,775 | 48,770 | 2,680 | 51,450 |
| Balance as of 1 January 2014 | 28,869 | 17,786 | (3,313) | 6,742 | 50,083 | 2,765 | 52,849 |
| Total comprehensive income1 | – | 3,838 | 1,083 | 5,639 | 10,560 | 409 | 10,969 |
| Paid-in capital | – | – | – | – | – | – | – |
| Treasury shares | – | 6 | – | – | 6 | – | 6 |
| Transactions between equity holders | – | (41) | (4) | – | (46) | (40) | (85) |
| Dividends paid | – | (2,405) | – | – | (2,405) | (244) | (2,649) |
| Balance as of 30 September 2014 | 28,869 | 19,184 | (2,234) | 12,380 | 58,199 | 2,890 | 61,089 |
1 Total comprehensive income in shareholders' equity for the nine months ended 30 September 2014 comprises net income attributable to shareholders of € 5,002 mn (2013: € 4,740 mn).
Comprehensive Income
in Equity
53 Consolidated Statements of Cash Flows 55 Notes
| € mn nine months ended 30 September |
2014 | 2013 |
|---|---|---|
| Summary | ||
| Net cash flow provided by operating activities | 26,455 | 20,051 |
| Net cash flow used in investing activities | (23,136) | (15,287) |
| Net cash flow used in financing activities | (3,241) | (3,977) |
| Effect of exchange rate changes on cash and cash equivalents | 374 | (153) |
| Change in cash and cash equivalents | 451 | 632 |
| Cash and cash equivalents at beginning of period | 11,207 | 12,437 |
| Cash and cash equivalents at end of period | 11,658 | 13,069 |
| Cash flow from operating activities | ||
| Net income | 5,285 | 5,007 |
| Adjustments to reconcile net income to net cash flow provided by operating activities | ||
| Share of earnings from investments in associates and joint ventures | (115) | (111) |
| 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 assets and liabilities of disposal groups classified as held for sale |
(2,215) | (2,550) |
| Other investments, mainly financial assets held for trading and designated at fair value through income | 1,691 | 1,044 |
| Depreciation and amortization | 886 | 807 |
| Loan loss provisions | 31 | 47 |
| Interest credited to policyholder accounts | 2,935 | 2,660 |
| Net change in: | ||
| Financial assets and liabilities held for trading | 572 | (199) |
| Reverse repurchase agreements and collateral paid for securities borrowing transactions | 205 | 491 |
| Repurchase agreements and collateral received from securities lending transactions | 211 | 303 |
| Reinsurance assets | (548) | (700) |
| Deferred acquisition costs | (1,067) | (553) |
| Unearned premiums | 2,565 | 2,402 |
| Reserves for loss and loss adjustment expenses | 1,387 | (243) |
| Reserves for insurance and investment contracts | 17,441 | 8,548 |
| Deferred tax assets/liabilities | 188 | 296 |
| Other (net) | (2,997) | 2,804 |
| Subtotal | 21,169 | 15,045 |
| Net cash flow provided by operating activities | 26,455 | 20,051 |
| € mn nine months ended 30 September |
2014 | 2013 |
|---|---|---|
| Cash flow from investing activities Proceeds from the sale, maturity or repayment of: |
||
| Financial assets designated at fair value through income | 1,144 | 1,052 |
| Available-for-sale investments | 93,525 | 87,007 |
| Held-to-maturity investments | 449 | 425 |
| Investments in associates and joint ventures | 557 | 257 |
| Non-current assets and assets and liabilities of disposal groups classified as held for sale | 170 | 26 |
| Real estate held for investment | 267 | 259 |
| Loans and advances to banks and customers (purchased loans) | 6,739 | 7,324 |
| Property and equipment | 93 | 126 |
| Subtotal | 102,945 | 96,474 |
| Payments for the purchase or origination of: | ||
| Financial assets designated at fair value through income | (1,323) | (535) |
| Available-for-sale investments | (115,743) | (101,753) |
| Held-to-maturity investments | (251) | (176) |
| Investments in associates and joint ventures | (438) | (660) |
| Non-current assets and assets and liabilities of disposal groups classified as held for sale | (24) | – |
| Real estate held for investment | (749) | (813) |
| Loans and advances to banks and customers (purchased loans) | (3,654) | (5,682) |
| Property and equipment | (1,159) | (1,065) |
| Subtotal | (123,342) | (110,684) |
| Business combinations (note 3): | ||
| Proceeds from sale of subsidiaries, net of cash disposed | – | 75 |
| Acquisitions of subsidiaries, net of cash acquired | (200) | (380) |
| Change in other loans and advances to banks and customers (originated loans) | (2,214) | (1,136) |
| Other (net) | (326) | 363 |
| Net cash flow used in investing activities | (23,136) | (15,287) |
| Cash flow from financing activities | ||
| Net change in liabilities to banks and customers | (896) | (411) |
| Proceeds from the issuance of certificated liabilities and subordinated liabilities | 3,379 | 4,316 |
| Repayments of certificated liabilities and subordinated liabilities | (2,947) | (5,568) |
| Cash inflow from capital increases | – | – |
| Transactions between equity holders | (73) | 3 |
| Dividends paid to shareholders | (2,649) | (2,280) |
| Net cash from sale or purchase of treasury shares | 8 | 8 |
| Other (net) | (63) | (45) |
| Net cash flow used in financing activities | (3,241) | (3,977) |
| Supplementary information to the consolidated statements of cash flows | ||
| Income taxes paid | (1,992) | (2,346) |
| Dividends received | 1,212 | 1,083 |
| Interest received | 14,579 | 14,533 |
| Interest paid | (957) | (1,045) |
49 Consolidated Balance Sheets 50 Consolidated Income Statements 51 Consolidated Statements of Comprehensive Income
52 Consolidated Statements of Changes in Equity
53 Consolidated Statements of Cash Flows 55 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 (IFRS), as adopted under European Union (E.U.) regulations in accordance with § 315a of the German Commercial Code (HGB). IFRS comprise the International Financial Reporting Standards (IFRS), the International Accounting Standards (IAS) 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 IFRS issued by the IASB that are endorsed by the E.U. and are compulsory as of 1 January 2014. For further information please see note 2.
For existing and unchanged IFRS, 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 2013. These condensed consolidated interim financial statements should be read in conjunction with the audited consolidated financial statements included in the Allianz Group Annual Report 2013.
IFRS 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 6 November 2014.
effective 1 January 2014
As of 1 January 2014, the Allianz Group implemented IFRSs 10 and 11 as well as amendments to IAS 27 and IAS 28.
IFRS 10, Consolidated Financial Statements, superseded the requirements of IAS 27, Consolidated and Separate Financial Statements and SIC-12, Consolidation – Special Purpose Entities. IFRS 10 establishes a single control concept as the basis for determining which entities are to be included in the consolidated financial statements because they are controlled by the reporting entity. The existence of control is based on the following three elements:
The following table presents the impacts of the implementation of IFRS 10 on the consolidated balance sheet as of 31 December 2013.
CHANGE OF CONSOLIDATED BALANCE SHEET as of 31 December 2013 RELATING TO the implementation of IFRS 10
| As previously reported |
Adoption of IFRS 10 |
As reported |
|---|---|---|
| 7,245 | (585) | 6,660 |
| 411,148 | ||
| 711,530 | (452) | 711,079 |
| 36,883 | (452) | 36,431 |
| 658,682 | (452) | 658,230 |
| 711,530 | (452) | 711,079 |
| 411,015 | 133 |
The adoption of IFRS 10 required the additional consolidation of certain investment funds where the Allianz Group has the ability to direct the relevant asset management activities without having a majority investment. In contrast, numerous third-party managed investment funds in which the Allianz Group has invested were deconsolidated to the extent that the Allianz Group cannot exercise power. Furthermore, IFRS 10 led to the deconsolidation of certain investment funds which mainly hold assets related to unit-linked contracts because investment decisions over these assets are not in the discretion of the Allianz Group. In total, these changes in the scope of consolidation led to a reduction of the balance sheet total of € 452 mn as of the date IFRS 10 was adopted.
The impact of the adoption of IFRS 10 on the consolidated income statements, the consolidated statements of comprehensive income, the consolidated statements of changes in equity and the consolidated statements of cash flows is immaterial.
IFRS 11, Joint Arrangements, superseded IAS 31, Interests in Joint Ventures, and SIC-13, Jointly Controlled Entities – Non-Monetary Contributions by Ventures. The IFRS requires a party to a joint arrangement to determine the type of joint arrangement in which it is involved by assessing its rights and obligations arising from the arrangement. The IFRS classifies joint arrangements into two types: joint operations and joint ventures. For joint operations the reporting entity has to recognize and measure the assets and liabilities (and recognize the related revenues and expenses) in relation to its interest in the arrangement in accordance with relevant IFRSs applicable to the particular assets, liabilities, revenues and expenses. In contrast, for joint
ventures the reporting entity has to recognize an investment and to account for that investment using the equity method in accordance with IAS 28. The application of IFRS 11 had no material impact on the financial position and the financial results of the Allianz Group.
The revised version of IAS 28, Investments in Associates and Joint Ventures, superseded the former IAS 28, Investments in Associates. It defines 'significant influence', provides guidance on the application of the equity method of accounting and describes how impairment is assessed in associates and joint ventures. The adoption of the revised version of IAS 28 had no material impact on the financial position and financial results of the Allianz Group.
IFRS 12, Disclosure of Interests in Other Entities, contains disclosure requirements previously set out in IASs 27, 28 and 31. Furthermore, the new standard includes disclosure requirements regarding interests in unconsolidated structured entities. The disclosure requirements defined by IFRS 12 are initially to be presented in the Annual Report 2014.
Certain prior-period amounts have been reclassified to conform to the current period presentation.
Effective 1 July 2014, the Allianz Group acquired specific distribution activities of the Property-Casualty insurance business of UnipolSai Assicurazioni S.p.A., Bologna ("Distribution Activities"). The acquired Distribution Activities include, inter alia, a network of 725 agencies and 470 employees. At year-end 2014, the Allianz Group expects to purchase the Property-Casualty insurance in-force portfolio managed by the transferred agencies ("Portfolio"). The transfer of the Portfolio is subject to the approval by the Italian insurance regulator Istituto per la Vigilanza sulle Assicurazioni (IVASS). The acquired business represents insurance activities with premiums equal to approximately € 1.1 bn (for the year 2013).
The acquired Distribution Activities together with the Portfolio give the Allianz Group the unique opportunity to further increase its share in a key profitable market.
| B | Condensed Consolidated Interim Financial Statements | |||
|---|---|---|---|---|
| 49 Consolidated Balance Sheets | 51 Consolidated Statements of | 52 Consolidated Statements of Changes | 53 Consolidated Statements of Cash Flows | |
| 50 Consolidated Income Statements | Comprehensive Income | in Equity | 55 Notes |
The following table summarizes the recognized amounts of assets acquired and liabilities assumed related to the Distribution Activities:
| 4 |
|---|
| 28 |
| 113 |
| (27) |
| 118 |
Intangible assets consist of the customer relationships related to the acquired agency network.
Other assets acquired of € 28 mn include mainly receivables from agents.
The fair value of the assumed other liabilities of € 27 mn is provisional due to the pending receipt of the final valuations of those liabilities. Other liabilities comprise mainly payables to agents and employees.
The aggregate consideration for the acquired Property-Casualty insurance business of UnipolSai Assicurazioni S.p.A. amounts to a maximum of € 440 mn. It includes:
An overall amount of € 375 mn (consisting of € 200 mn initial payment plus € 175 mn best estimate of additional contingent consideration as of 1 July 2014) has been allocated to the Distribution Activities leading to the determination of goodwill as follows:
| € mn | |
|---|---|
| Fair value | |
| Consideration in cash | 200 |
| Contingent consideration | 175 |
| Total consideration | 375 |
| Total net identifiable assets | 118 |
| Goodwill | 257 |
The fair value of the contingent consideration of € 175 mn attributed to the acquired Distribution Activities is primarily based on information regarding expected churn rates of customers of the acquired business and expected renewal rates of existing policies available at the acquisition date.
Acquisition-related costs in the amount of € 8 mn (including € 6 mn registration taxes and € 2 mn legal and consulting fees) are included in administrative expenses.
Goodwill of € 257 mn arising from the acquisition consists largely of synergies, new business and cross-selling opportunities expected to be generated from the acquired network of agencies and is expected to be deductible for income tax purposes.
The impact of the acquired Property-Casualty insurance business of UnipolSai Assicurazioni S.p.A. on the Allianz Group's total revenues and net income since the acquisition was € 85 mn and € (21) mn, respectively. It is impracticable to provide consistent information about the gross premiums written, total revenues and net income of the combined entity (Allianz Group including the acquired Property-Casualty insurance business of UnipolSai Assicurazioni S.p.A.) for the nine months ended 30 September 2014 because the Allianz Group did not have access to the UnipolSai database and systems for periods before 1 July 2014.
At the time the Allianz Group expects to acquire the Portfolio, the Allianz Group will recognize additional assets (mainly cash and cash equivalents and receivables from policyholders) and liabilities (mainly unearned premiums and payables to agents). The acquisition of the Portfolio is expected to lead to the recognition of a small separate intangible asset equal to the present value of future profits inherent in the liabilities of the Portfolio to be assumed.
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 17 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 and technology functions. The reportable segment Banking consists of the banking activities in Germany, France, Italy, the Netherlands and Bulgaria. The banks offer a wide range of products for corporate and retail clients, with a primary focus on the latter. The reportable segment Alternative Investments provides global alternative investment management services in the private equity, real estate, renewable energy and infrastructure sectors, mainly on behalf of the Allianz Group's insurance operations. The reportable segment Alternative Investments also includes a fully consolidated private equity investment. The income and expenses of this investment are included in the non-operating result.
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.
51 Consolidated Statements of Comprehensive Income
in Equity
B Condensed Consolidated Interim Financial Statements
49 Consolidated Balance Sheets 50 Consolidated Income Statements
To better understand the ongoing operations of the business, the Allianz Group generally excludes the following non-operating effects:
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 2014, the Allianz Group prospectively allocated certain entities from the reportable segment Asset Management to the reportable segments German Speaking Countries, Western& Southern Europe and Growth Markets within the business segment Life/Health and to the reportable segment Banking.
| € mn | ||||
|---|---|---|---|---|
| Property-Casualty | Life/Health | |||
| as of 30 September 2014 |
as of 31 December 2013 |
as of 30 September 2014 |
as of 31 December 2013 |
|
| ASSETS | ||||
| Cash and cash equivalents | 3,133 | 2,773 | 6,912 | 5,828 |
| Financial assets carried at fair value through income | 654 | 638 | 5,579 | 5,548 |
| Investments | 94,581 | 88,432 | 359,677 | 309,037 |
| Loans and advances to banks and customers | 15,100 | 16,131 | 91,106 | 89,922 |
| Financial assets for unit-linked contracts | – | – | 90,790 | 81,064 |
| Reinsurance assets | 8,640 | 7,922 | 5,143 | 4,717 |
| Deferred acquisition costs | 4,620 | 4,354 | 17,879 | 17,690 |
| Deferred tax assets | 1,328 | 1,083 | 236 | 261 |
| Other assets | 23,106 | 21,664 | 17,509 | 17,850 |
| Non-current assets and assets of disposal groups classified as held for sale | 60 | 131 | 117 | – |
| Intangible assets | 2,814 | 2,478 | 3,065 | 2,640 |
| Total assets | 154,036 | 145,607 | 598,014 | 534,557 |
€ mn Property-Casualty Life/Health Asset Management Corporate and Other Consolidation Group as of 30 September 2014 as of 31 December 2013 as of 30 September 2014 as of 31 December 2013 LIABILITIES AND EQUITY Financial liabilities carried at fair value through income 165 78 7,308 5,869 – 1 616 534 (510) (469) 7,580 6,013 Liabilities to banks and customers 840 1,189 3,938 2,260 174 1,315 21,664 21,337 (3,867) (2,991) 22,749 23,109 Unearned premiums 18,000 15,367 3,157 2,855 – – – – (17) (10) 21,141 18,212 Reserves for loss and loss adjustment expenses 58,646 56,614 10,482 9,960 – – – – (12) (9) 69,116 66,566 Reserves for insurance and investment contracts 14,049 13,389 434,683 390,873 – – – – (195) (190) 448,537 404,072 Financial liabilities for unit-linked contracts – – 90,790 81,064 – – – – – – 90,790 81,064 Deferred tax liabilities 2,595 2,154 4,062 2,420 3 123 235 164 (1,399) (1,684) 5,496 3,178 Other liabilities 17,099 17,127 13,657 14,009 2,376 2,591 25,946 23,605 (21,275) (20,900) 37,803 36,431 Liabilities of disposal groups classified as held for sale – – 3 – – – – – – – 3 – Certificated liabilities 38 37 13 12 – – 12,772 13,186 (4,637) (5,205) 8,186 8,030 Subordinated liabilities – – 109 95 – 14 11,983 11,509 (64) (64) 12,028 11,554 Total liabilities 111,432 105,956 568,203 509,417 2,552 4,043 73,216 70,335 (31,976) (31,521) 723,428 658,230
| B | Condensed Consolidated Interim Financial Statements | |||
|---|---|---|---|---|
| 49 Consolidated Balance Sheets | 51 Consolidated Statements of | 52 Consolidated Statements of Changes | 53 Consolidated Statements of Cash Flows | |
| 50 Consolidated Income Statements | Comprehensive Income | in Equity | 55 Notes |
| Corporate and Other | Consolidation | Group | |||
|---|---|---|---|---|---|
| as of 30 September 2014 |
as of 31 December 2013 |
as of 30 September 2014 |
as of 31 December 2013 |
as of 30 September 2014 |
as of 31 December 2013 |
| 1,538 | 1,497 | (1,625) | (752) | 11,658 | 11,207 |
| 394 | 307 | (510) | (468) | 6,162 | 6,660 |
| 109,409 | 103,727 | (92,609) | (91,189) | 471,167 | 411,148 |
| 17,941 | 18,166 | (7,468) | (7,868) | 116,797 | 116,800 |
| – | – | – | – | 90,790 | 81,064 |
| – | – | (43) | (30) | 13,739 | 12,609 |
| – | – | – | – | 22,499 | 22,203 |
| 1,467 | 1,680 | (1,399) | (1,684) | 1,798 | 1,508 |
| 6,892 | 7,457 | (14,425) | (14,526) | 36,004 | 34,632 |
| 4 | – | – | – | 180 | 147 |
| 693 | 714 | – | – | 13,721 | 13,100 |
| 138,337 | 133,549 | (118,080) | (116,517) | 784,516 | 711,079 |
| Group | Consolidation | Corporate and Other | Asset Management | ||||
|---|---|---|---|---|---|---|---|
| 31 December | as of 30 September 2014 |
as of 31 December 2013 |
as of 30 September 2014 |
as of 31 December 2013 |
as of 30 September 2014 |
as of 31 December 2013 |
as of 30 September 2014 |
| 7,580 | (469) | (510) | 534 | 616 | 1 | – | |
| 23,109 | 22,749 | (2,991) | (3,867) | 21,337 | 21,664 | 1,315 | 174 |
| 18,212 | 21,141 | (10) | (17) | – | – | – | – |
| 66,566 | 69,116 | (9) | (12) | – | – | – | – |
| 404,072 | 448,537 | (190) | (195) | – | – | – | – |
| 81,064 | 90,790 | – | – | – | – | – | – |
| 5,496 | (1,684) | (1,399) | 164 | 235 | 123 | 3 | |
| 36,431 | 37,803 | (20,900) | (21,275) | 23,605 | 25,946 | 2,591 | 2,376 |
| 3 | – | – | – | – | – | – | |
| 8,186 | (5,205) | (4,637) | 13,186 | 12,772 | – | – | |
| 11,554 | 12,028 | (64) | (64) | 11,509 | 11,983 | 14 | – |
| 658,230 | 723,428 | (31,521) | (31,976) | 70,335 | 73,216 | 4,043 | 2,552 |
| 52,849 | 61,089 | Total equity | |||||
| 711,079 | 784,516 | Total liabilities and equity |
| € mn | ||||
|---|---|---|---|---|
| Property-Casualty | Life/Health | |||
| three months ended 30 September | 2014 | 2013 | 2014 | 2013 |
| Total revenues1 | 11,254 | 10,650 | 15,853 | 12,698 |
| Premiums earned (net) | 11,180 | 10,768 | 5,856 | 5,869 |
| Operating investment result | ||||
| Interest and similar income | 897 | 885 | 4,260 | 4,127 |
| Operating income from financial assets and liabilities carried at fair value through income (net) |
4 | (35) | (207) | (537) |
| Operating realized gains/losses (net) | 74 | 14 | 746 | 541 |
| Interest expenses, excluding interest expenses from external debt | (20) | (9) | (27) | (16) |
| Operating impairments of investments (net) | (4) | (2) | (102) | (25) |
| Investment expenses | (88) | (88) | (219) | (198) |
| Subtotal | 864 | 767 | 4,451 | 3,892 |
| Fee and commission income | 347 | 317 | 263 | 166 |
| Other income | 7 | 11 | 32 | 31 |
| Claims and insurance benefits incurred (net) | (7,366) | (7,234) | (5,004) | (4,642) |
| Change in reserves for insurance and investment contracts (net)2 | (168) | (107) | (3,175) | (3,138) |
| Loan loss provisions | – | – | – | – |
| Acquisition and administrative expenses (net) | (3,089) | (2,976) | (1,488) | (1,322) |
| Fee and commission expenses | (323) | (295) | (110) | (61) |
| Operating amortization of intangible assets | – | – | (5) | – |
| Restructuring charges | (5) | (11) | (1) | (1) |
| Other expenses | (24) | (6) | (30) | (26) |
| Reclassification of tax benefits | – | – | – | – |
| Operating profit (loss) | 1,422 | 1,235 | 790 | 769 |
| Non-operating investment result | ||||
| Non-operating income from financial assets and liabilities carried at fair value through income (net) |
(15) | (6) | (17) | 6 |
| Non-operating realized gains/losses (net) | 158 | 78 | 19 | 29 |
| Non-operating impairments of investments (net) | (42) | (129) | (7) | (3) |
| Subtotal | 101 | (58) | (5) | 32 |
| Income from fully consolidated private equity investments (net) | – | – | – | – |
| Interest expenses from external debt | – | – | – | – |
| Non-operating amortization of intangible assets | (15) | (16) | (10) | (5) |
| Reclassification of tax benefits | – | – | – | – |
| Non-operating items | 86 | (74) | (15) | 27 |
| Income (loss) before income taxes | 1,509 | 1,161 | 776 | 795 |
| Income taxes | (426) | (365) | (245) | (233) |
| Net income (loss) | 1,083 | 796 | 530 | 562 |
| Net income (loss) attributable to: Non-controlling interests |
31 | 36 | 24 | 23 |
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 30 September 2014, includes expenses for premium refunds (net) in Property-Casualty of € (93) mn (2013: € (48) mn).
| B | Condensed Consolidated Interim Financial Statements | |||
|---|---|---|---|---|
| 49 Consolidated Balance Sheets | 51 Consolidated Statements of | 52 Consolidated Statements of Changes | 53 Consolidated Statements of Cash Flows | |
| 50 Consolidated Income Statements | Comprehensive Income | in Equity | 55 Notes |
| Asset Management | Corporate and Other | Consolidation | Group | |||
|---|---|---|---|---|---|---|
| 2014 2013 |
2014 | 2013 | 2014 | 2013 | 2014 | 2013 |
| 1,618 1,703 |
135 | 131 | (80) | (39) | 28,781 | 25,144 |
| – – |
– | – | – | – | 17,035 | 16,637 |
| 1 10 |
222 | 202 | (81) | (95) | 5,299 | 5,129 |
| (562) | ||||||
| 2 1 – – |
14 – |
15 – |
10 (111) |
(6) 2 |
(177) 709 |
|
| (3) (7) |
(146) | (151) | 92 | 89 | (103) | |
| – – |
– | – | – | – | (106) | |
| – – |
(19) | (20) | 64 | 78 | (261) | (227) |
| – 4 |
72 | 46 | (26) | 69 | 5,360 | |
| 1,984 2,059 |
181 | 170 | (185) | (128) | 2,590 | |
| 1 2 |
– | (1) | (3) | (1) | 37 | |
| – – |
– | – | 2 | 2 | (12,368) | (11,874) |
| – – |
– | – | (76) | (3) | (3,419) | |
| – – |
(7) | (18) | – | – | (7) | |
| (925) (949) |
(353) | (327) | 15 | (7) | (5,839) | |
| (367) (361) |
(145) | (126) | 97 | 55 | (847) | |
| – – |
– | – | – | – | (5) | |
| – 1 |
4 | 26 | – | – | (1) | |
| – – |
(1) | (1) | 9 | 4 | (46) | |
| – – |
– | – | 158 | – | 158 | |
| 694 755 |
(248) | (229) | (9) | (11) | 2,650 | |
| – – |
(11) | (7) | (11) | 6 | (54) | |
| 5 1 |
36 | 26 | (34) | – | 184 | |
| – – |
(1) | (2) | – | – | (50) | |
| 5 1 |
23 | 17 | (45) | 6 | 79 | |
| – – |
(20) | (4) | 9 | 2 | (11) | |
| – – |
(212) | (207) | – | – | (212) | |
| (3) (6) |
(2) | (2) | – | – | (29) | |
| – – |
– | – | (158) | – | (158) | |
| 2 (5) |
(211) | (196) | (194) | 8 | (331) | |
| 696 749 |
(458) | (426) | (203) | (3) | 2,319 | |
| (258) (267) |
147 | 119 | 151 | – | (632) | |
| 438 482 |
(311) | (307) | (52) | (3) | 1,687 | |
| 22 23 |
3 | 4 | – | – | 81 | |
| 415 459 |
(315) | (311) | (52) | (3) | 1,606 |
| € mn | ||||
|---|---|---|---|---|
| Property-Casualty | Life/Health | |||
| nine months ended 30 September | 2014 | 2013 | 2014 | 2013 |
| Total revenues1 | 37,317 | 36,602 | 49,977 | 41,659 |
| Premiums earned (net) | 32,291 | 31,459 | 18,131 | 18,141 |
| Operating investment result | ||||
| Interest and similar income | 2,689 | 2,704 | 12,891 | 12,573 |
| Operating income from financial assets and liabilities carried at fair value | ||||
| through income (net) | 20 | (61) | (512) | (1,468) |
| Operating realized gains/losses (net) | 129 | 44 | 2,328 | 2,159 |
| Interest expenses, excluding interest expenses from external debt | (49) | (31) | (75) | (56) |
| Operating impairments of investments (net) | (10) | (9) | (443) | (219) |
| Investment expenses | (232) | (233) | (645) | (581) |
| Subtotal | 2,547 | 2,414 | 13,542 | 12,408 |
| Fee and commission income | 955 | 915 | 752 | 474 |
| Other income | 46 | 29 | 114 | 111 |
| Claims and insurance benefits incurred (net) | (21,179) | (21,030) | (15,258) | (14,459) |
| Change in reserves for insurance and investment contracts (net)2 | (428) | (318) | (9,946) | (10,068) |
| Loan loss provisions | – | – | – | – |
| Acquisition and administrative expenses (net), excluding acquisition-related expenses | ||||
| and one-off effect from pension revaluation | (9,037) | (8,861) | (4,189) | (4,048) |
| Fee and commission expenses | (894) | (843) | (290) | (191) |
| Operating amortization of intangible assets | – | – | (14) | – |
| Restructuring charges | (6) | (13) | 8 | (2) |
| Other expenses | (38) | (18) | (195) | (73) |
| Reclassification of tax benefits | – | – | – | – |
| Operating profit (loss) | 4,257 | 3,733 | 2,655 | 2,293 |
| Non-operating investment result | ||||
| Non-operating income from financial assets and liabilities carried at fair value | ||||
| through income (net) | (77) | 7 | (42) | 14 |
| Non-operating realized gains/losses (net) | 355 | 463 | 135 | 86 |
| Non-operating impairments of investments (net) | (119) | (181) | (15) | (14) |
| Subtotal | 159 | 290 | 78 | 87 |
| Income from fully consolidated private equity investments (net) | – | – | – | – |
| Interest expenses from external debt | – | – | – | – |
| Acquisition-related expenses | – | – | – | – |
| One-off effect from pension revaluation | (537) | – | (7) | – |
| Non-operating amortization of intangible assets | (27) | (24) | (27) | (10) |
| Reclassification of tax benefits | – | – | – | – |
| Non-operating items | (405) | 265 | 44 | 77 |
| Income (loss) before income taxes | 3,852 | 3,999 | 2,698 | 2,370 |
| Income taxes | (1,155) | (1,185) | (808) | (706) |
| Net income (loss) | 2,697 | 2,814 | 1,891 | 1,664 |
| Net income (loss) attributable to: | ||||
| Non-controlling interests | 117 | 123 | 87 | 67 |
| Shareholders | 2,581 | 2,691 | 1,804 | 1,597 |
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 nine months ended 30 September 2014, includes expenses for premium refunds (net) in Property-Casualty of € (224) mn (2013: € (148) mn).
| B | Condensed Consolidated Interim Financial Statements | |||
|---|---|---|---|---|
| 49 Consolidated Balance Sheets | 51 Consolidated Statements of | 52 Consolidated Statements of Changes | 53 Consolidated Statements of Cash Flows | |
| 50 Consolidated Income Statements | Comprehensive Income | in Equity | 55 Notes |
| Asset Management | Corporate and Other | Consolidation | Group | ||||
|---|---|---|---|---|---|---|---|
| 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 |
| 4,742 | 5,429 | 405 | 412 | (241) | (134) | 92,201 | 83,968 |
| – | – | – | – | – | – | 50,421 | 49,600 |
| 5 | 31 | 660 | 691 | (269) | (290) | 15,976 | 15,709 |
| 5 | 8 | 25 | 34 | 14 | (3) | (449) | (1,491) |
| – | – | – | – | (184) | (34) | 2,272 | |
| (8) | (20) | (439) | (472) | 269 | 274 | (303) | (306) (208) |
| – | – | – | – | – | 21 | (453) | |
| – | – | (53) | (59) | 238 | 220 | (693) | |
| 2 | 18 | 193 | 194 | 67 | 188 | 16,352 | |
| 5,817 | 6,524 | 526 | 513 | (514) | (409) | 7,536 | |
| 6 | 8 | 1 | – | (6) | (4) | 160 | |
| – | – | – | – | 3 | 5 | (36,434) | |
| – | – | – | – | (83) | (31) | (10,457) | |
| – | – | (31) | (47) | – | – | (31) | |
| (2,730) | (2,966) | (943) | (967) | (96) | 12 | (16,995) | |
| (1,083) | (1,121) | (437) | (369) | 244 | 169 | (2,459) | |
| – | – | – | – | – | – | (14) | |
| 3 | (5) | 4 | (64) | – | – | 8 | |
| – | – | (1) | (2) | 133 | 11 | (101) | |
| – | – | – | – | 158 | – | 158 | |
| 2,015 | 2,458 | (689) | (742) | (94) | (59) | 8,144 | |
| – | – | (19) | (24) | (17) | 4 | (155) | |
| 4 | 1 | 92 | 314 | (33) | (5) | 552 | |
| – | – | (6) | (76) | – | – | (139) | |
| 4 | 1 | 67 | 213 | (50) | (1) | 258 | |
| – | – | (31) | (19) | 15 | 7 | (16) | |
| – | – | (623) | (680) | – | – | (623) | |
| 3 | (41) | 2 | (1) | – | – | 6 | |
| (14) | – | 675 | – | – | – | 117 | |
| (8) | (19) | (6) | (54) | – | 21 | (69) | |
| – | – | – | – | (158) | – | (158) | |
| (15) | (59) | 84 | (541) | (193) | 28 | (485) | |
| 2,000 | 2,399 | (606) | (1,283) | (287) | (31) | 7,658 | |
| (738) | (861) | 177 | 302 | 150 | 3 | (2,373) | |
| 1,263 | 1,538 | (429) | (981) | (137) | (28) | 5,285 | |
| 67 | 71 | 13 | 6 | – | – | 283 | |
| 1,196 | 1,467 | (442) | (987) | (137) | (28) | 5,002 |
€ mn
| German Speaking Countries | Western&Southern Europe | Iberia&Latin America | ||||
|---|---|---|---|---|---|---|
| three months ended 30 September | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 |
| Gross premiums written | 2,447 | 2,361 | 2,406 | 2,360 | 1,086 | 1,023 |
| Ceded premiums written | (409) | (410) | (167) | (160) | (153) | (165) |
| Change in unearned premiums | 538 | 520 | 251 | 314 | 22 | 88 |
| Premiums earned (net) | 2,576 | 2,470 | 2,490 | 2,514 | 955 | 946 |
| Interest and similar income | 270 | 276 | 215 | 220 | 46 | 46 |
| Operating income from financial assets and liabilities carried at fair value through income (net) |
10 | (23) | (6) | – | 1 | 1 |
| Operating realized gains/losses (net) | 74 | 14 | – | – | – | – |
| Fee and commission income | 36 | 50 | 9 | 6 | – | – |
| Other income | 5 | 6 | 1 | 2 | – | – |
| Operating revenues | 2,972 | 2,794 | 2,709 | 2,742 | 1,003 | 993 |
| Claims and insurance benefits incurred (net) | (1,690) | (1,876) | (1,505) | (1,522) | (708) | (653) |
| Change in reserves for insurance and investment contracts (net) | (152) | (95) | (8) | (11) | (2) | (1) |
| Interest expenses | (2) | (3) | (6) | (2) | (1) | (1) |
| Operating impairments of investments (net) | (4) | (2) | – | – | – | – |
| Investment expenses | (31) | (30) | (26) | (24) | (5) | (3) |
| Acquisition and administrative expenses (net) | (648) | (648) | (674) | (668) | (250) | (242) |
| Fee and commission expenses | (33) | (47) | (8) | (9) | – | – |
| Restructuring charges | (2) | (3) | – | – | – | – |
| Other expenses | (6) | (5) | (1) | (1) | – | – |
| Operating expenses | (2,569) | (2,708) | (2,229) | (2,239) | (966) | (900) |
| Operating profit (loss) | 404 | 86 | 480 | 503 | 37 | 93 |
| Non-operating income from financial assets and liabilities carried at fair value through income (net) |
(13) | (4) | 1 | 2 | 2 | 1 |
| Non-operating realized gains/losses (net) | 67 | 34 | 37 | 34 | 8 | (2) |
| Non-operating impairments of investments (net) | (7) | (6) | (21) | (117) | (2) | – |
| Amortization of intangible assets | (1) | (1) | (11) | (12) | – | – |
| Non-operating items | 47 | 23 | 6 | (93) | 8 | (1) |
| Income (loss) before income taxes | 450 | 109 | 486 | 410 | 45 | 92 |
| Income taxes Net income (loss) |
(109) 341 |
(30) 79 |
(176) 310 |
(149) 261 |
(8) 37 |
(32) 60 |
| Net income (loss) attributable to: | ||||||
| Non-controlling interests | – | (2) | 4 | 6 | 1 | 2 |
| Shareholders | 341 | 81 | 306 | 255 | 36 | 59 |
| Loss ratio2 in % | 65.6 | 75.9 | 60.5 | 60.6 | 74.1 | 69.0 |
| Expense ratio3 in % Combined ratio4 in % |
25.1 | 26.2 | 27.1 | 26.6 | 26.1 | 25.6 |
| 90.7 | 102.2 | 87.5 | 87.1 | 100.3 | 94.6 |
1 The 2014 analysis of the Allianz Group's asbestos risks resulted in a reduction of reserves and a positive run-off result of € 86 MN reflected in the operating profit for 2014.
4 Represents the total of acquisition and administrative expenses (net) and claims and insurance benefits incurred (net) divided by premiums earned (net).
5 Presentation not meaningful.
2 Represents claims and insurance benefits incurred (net) divided by premiums earned (net). 3 Represents acquisition and administrative expenses (net) divided by premiums earned (net).
| B | Condensed Consolidated Interim Financial Statements | |||
|---|---|---|---|---|
| 49 Consolidated Balance Sheets | 51 Consolidated Statements of | 52 Consolidated Statements of Changes | 53 Consolidated Statements of Cash Flows | |
| 50 Consolidated Income Statements | Comprehensive Income | in Equity | 55 Notes |
| Iberia&Latin America | USA | Global Insurance Lines& Anglo Markets |
Growth Markets | Allianz Worldwide Partners | Consolidation and Other1 | Property-Casualty | ||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2014 2013 |
2014 | 2013 | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 |
| 1,023 | 612 | 652 | 4,321 | 3,802 | 739 | 795 | 656 | 599 | (1,013) | (942) | 11,254 | 10,650 |
| (165) | (26) | (31) | (1,030) | (866) | (167) | (155) | (20) | (13) | 1,013 | 942 | (959) | (859) |
| 88 | (17) | (13) | (20) | 63 | 55 | (31) | 55 | 35 | – | – | 885 | 977 |
| 946 | 569 | 608 | 3,271 | 2,999 | 627 | 609 | 691 | 621 | – | – | 11,180 | 10,768 |
| 46 | 62 | 59 | 254 | 238 | 40 | 40 | 9 | 8 | – | (3) | 897 | 885 |
| (1) | 1 | (3) | (15) | 2 | 1 | 1 | – | – | – | 4 | (35) | |
| – | – | – | – | – | – | – | – | – | – | 74 | 14 | |
| – | – | 156 | 144 | 14 | 18 | 148 | 123 | (16) | (24) | 347 | 317 | |
| – | – | – | – | – | 1 | – | – | – | 1 | 7 | 11 | |
| – 993 |
630 | 668 | 3,677 | 3,367 | 684 | 670 | 850 | 753 | (16) | (25) | 12,509 | 11,960 |
| (653) | (612) | (448) | (2,057) | (1,976) | (427) | (363) | (451) | (395) | 86 | – | (7,366) | (7,234) |
| (1) | (2) | (1) | (2) | 2 | (1) | – | – | – | – | – | (168) | (107) |
| (1) – |
– | – | (10) | (4) | (1) | (1) | – | – | – | 2 | (20) | |
| – | – | – | – | – | – | – | – | – | – | (4) | ||
| (1) | (1) | (23) | (27) | (2) | (2) | – | – | – | – | (88) | ||
| (242) – |
(166) | (181) | (920) | (827) | (215) | (206) | (220) | (208) | 2 | 5 | (3,089) | (2,976) (295) |
| – | – | – | (133) | (121) | (12) | (17) | (150) | (120) | 14 | 19 | (323) | |
| – | – | (3) | (7) | – | – | – | – | – | – | (5) | ||
| – (781) |
– (632) |
(17) (3,164) |
– (2,960) |
– (658) |
– (590) |
– (822) |
– (723) |
– 102 |
– 27 |
(24) (11,086) |
(10,725) | |
| 93 | (151) | 36 | 513 | 406 | 25 | 80 | 28 | 29 | 86 | 2 | 1,422 | |
| 1 | (1) | 1 | – | (6) | (5) | – | – | – | – | – | (15) | |
| (2) | 5 | (1) | 31 | 11 | 11 | 1 | – | – | – | – | 158 | |
| – – |
(6) – |
– – |
(6) (2) |
(5) (2) |
– (2) |
(1) (2) |
– – |
– – |
– 1 |
– 1 |
(42) (15) |
|
| (1) | – | 22 | (3) | 3 | (2) | – | – | 1 | 1 | 86 | ||
| 92 | (151) | 36 | 535 | 403 | 28 | 78 | 28 | 29 | 87 | 3 | 1,509 | |
| (32) | 57 | (7) | (141) | (121) | (13) | (15) | (5) | (9) | (30) | – | (426) | (365) |
| (94) | 30 | 394 | 282 | 15 | 63 | 23 | 19 | 57 | 3 | 1,083 | ||
| 2 | – | – | 22 | 22 | 4 | 7 | – | – | – | – | 31 | |
| (94) | 30 | 371 | 260 | 11 | 56 | 23 | 19 | 57 | 3 | 1,051 | ||
| 107.5 | 73.7 | 62.9 | 65.9 | 68.2 | 59.7 | 65.3 | 63.5 | –5 | –5 | 65.9 | ||
| 69.0 25.6 |
29.1 | 29.8 | 28.1 | 27.6 | 34.2 | 33.7 | 31.8 | 33.5 | –5 | –5 | 27.6 | |
| 102.4 | 97.1 | 97.0 | –5 | –5 | 93.5 | |||||||
| 94.6 | 136.5 | 103.5 | 91.0 | 93.5 | 93.4 |
€ mn
| German Speaking Countries | Western&Southern Europe | Iberia&Latin America | ||||
|---|---|---|---|---|---|---|
| nine months ended 30 September | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 |
| Gross premiums written | 9,990 | 9,726 | 8,045 | 7,953 | 3,307 | 3,502 |
| Ceded premiums written | (1,560) | (1,563) | (577) | (538) | (479) | (550) |
| Change in unearned premiums | (874) | (844) | (50) | (170) | 3 | (92) |
| Premiums earned (net) | 7,556 | 7,319 | 7,418 | 7,244 | 2,831 | 2,860 |
| Interest and similar income | 852 | 855 | 646 | 661 | 146 | 152 |
| Operating income from financial assets and liabilities carried at fair value through income (net) |
18 | (42) | (4) | 10 | 9 | 5 |
| Operating realized gains/losses (net) | 129 | 44 | – | – | – | – |
| Fee and commission income | 96 | 110 | 28 | 18 | – | – |
| Other income | 21 | 19 | 5 | 5 | 17 | – |
| Operating revenues | 8,672 | 8,305 | 8,093 | 7,938 | 3,002 | 3,017 |
| Claims and insurance benefits incurred (net) | (4,981) | (5,486) | (4,647) | (4,515) | (2,028) | (1,960) |
| Change in reserves for insurance and investment contracts (net) | (378) | (266) | (30) | (32) | (4) | (3) |
| Interest expenses | (6) | (16) | (14) | (8) | (2) | (2) |
| Operating impairments of investments (net) | (10) | (9) | – | – | – | – |
| Investment expenses | (76) | (70) | (73) | (72) | (11) | (10) |
| Acquisition and administrative expenses (net), excluding one-off effect | ||||||
| from pension revaluation | (1,908) | (1,860) | (2,026) | (1,926) | (731) | (752) |
| Fee and commission expenses | (87) | (102) | (27) | (28) | – | – |
| Restructuring charges | (2) | (4) | – | (1) | – | – |
| Other expenses | (15) | (13) | (4) | (3) | (1) | – |
| Operating expenses | (7,464) | (7,827) | (6,821) | (6,585) | (2,777) | (2,727) |
| Operating profit (loss) | 1,208 | 478 | 1,272 | 1,353 | 225 | 290 |
| Non-operating income from financial assets and liabilities carried at fair value | ||||||
| through income (net) | (46) | 5 | (17) | 1 | 5 | 3 |
| Non-operating realized gains/losses (net) | 118 | 86 | 96 | 206 | 13 | 15 |
| Non-operating impairments of investments (net) | (20) | (16) | (75) | (137) | (2) | (12) |
| One-off effect from pension revaluation | (530) | – | – | – | – | – |
| Amortization of intangible assets | (2) | (2) | (17) | (16) | (1) | (1) |
| Non-operating items | (480) | 73 | (12) | 54 | 14 | 4 |
| Income (loss) before income taxes | 729 | 551 | 1,260 | 1,408 | 239 | 294 |
| Income taxes | (172) | (158) | (466) | (463) | (63) | (95) |
| Net income (loss) | 557 | 393 | 794 | 945 | 176 | 199 |
| Net income (loss) attributable to: | ||||||
| Non-controlling interests | (1) | (1) | 12 | 14 | 4 | 4 |
| Shareholders | 558 | 394 | 782 | 931 | 172 | 195 |
| Loss ratio3 in % | 65.9 | 75.0 | 62.6 | 62.3 | 71.7 | 68.5 |
| Expense ratio4 in % | 25.3 | 25.4 | 27.3 | 26.6 | 25.8 | 26.3 |
| Combined ratio5 in % | 91.2 | 100.4 | 90.0 | 88.9 | 97.5 | 94.8 |
1 The reserve strengthening for asbestos risks in 2014 at Fireman's Fund Insurance Company of € 79 MN had no impact on the financial results of the Allianz Group and Fireman's Fund's combined ratio under IFRS. 2 The 2014 analysis of the Allianz Group's asbestos risks resulted in a reduction of reserves and a positive 4 Represents acquisition and administrative expenses (net), excluding one-off effect from pension revaluation, divided by premiums earned (net).
run-off result of € 86 MN reflected in the operating profit for 2014. 3 Represents claims and insurance benefits incurred (net) divided by premiums earned (net). 5 Represents the total of acquisition and administrative expenses (net), excluding one-off effect from pension revaluation, and claims and insurance benefits incurred (net) divided by premiums earned (net). 6 Presentation not meaningful.
| B | Condensed Consolidated Interim Financial Statements | |||
|---|---|---|---|---|
| 49 Consolidated Balance Sheets | 51 Consolidated Statements of | 52 Consolidated Statements of Changes | 53 Consolidated Statements of Cash Flows | |
| 50 Consolidated Income Statements | Comprehensive Income | in Equity | 55 Notes |
| Western&Southern Europe Iberia&Latin America |
USA1 | Global Insurance Lines& Anglo Markets |
Growth Markets | Allianz Worldwide Partners | Consolidation and Other2 | Property-Casualty | ||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2014 2013 2014 2013 |
2014 | 2013 | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 |
| 7,953 3,307 3,502 |
1,525 | 1,625 | 13,413 | 12,706 | 2,394 | 2,461 | 2,129 | 1,960 | (3,486) | (3,330) | 37,317 | 36,602 |
| (479) (550) |
(87) | (95) | (3,318) | (3,272) | (520) | (535) | (69) | (65) | 3,486 | 3,328 | (3,122) | (3,290) |
| (92) | (44) | 2 | (724) | (431) | (49) | (151) | (166) | (169) | – | 2 | (1,904) | (1,853) |
| 2,860 | 1,394 | 1,532 | 9,372 | 9,003 | 1,825 | 1,774 | 1,895 | 1,726 | – | – | 32,291 | 31,459 |
| 152 | 177 | 178 | 725 | 725 | 119 | 121 | 24 | 23 | (1) | (11) | 2,689 | 2,704 |
| 5 | (2) | – | (3) | (34) | 2 | – | – | – | – | – | 20 | (61) |
| – | – | – | – | – | – | – | – | – | – | – | 129 | |
| – | – | – | 449 | 438 | 44 | 57 | 390 | 356 | (52) | (64) | 955 | 915 |
| – | – | – | 1 | 3 | 2 | – | 1 | – | 1 | 46 | 29 | |
| 1,569 | 1,710 | 10,544 | 10,133 | 1,993 | 1,955 | 2,309 | 2,105 | (53) | (74) | 36,130 | 35,089 | |
| (1,242) | (1,049) | (5,863) | (5,813) | (1,277) | (1,098) | (1,226) | (1,109) | 86 | – | (21,179) | (21,030) | |
| (6) | (6) | (5) | (9) | (3) | (2) | – | – | – | – | (428) | (318) | |
| – | – | (23) | (13) | (3) | (2) | (1) | (1) | 1 | 11 | (49) | (31) | |
| – | – | – | – | – | – | – | – | – | – | – | (10) | |
| (2) | (2) | (62) | (70) | (7) | (7) | (1) | (1) | – | – | (232) | (233) | |
| (752) | (478) | (512) | (2,653) | (2,636) | (647) | (615) | (607) | (572) | 13 | 13 | (9,037) | (8,861) |
| – | – | – | (382) | (363) | (39) | (49) | (397) | (352) | 39 | 52 | (894) | (843) |
| – | – | – | (4) | (9) | – | – | – | 1 | – | – | (6) | |
| – | – | (17) | (1) | (2) | (1) | – | – | – | 1 | (38) | ||
| (1,729) | (1,570) | (9,010) | (8,914) | (1,978) | (1,775) | (2,232) | (2,035) | 139 | 76 | (31,873) | (31,356) | |
| (159) | 140 | 1,534 | 1,219 | 15 | 180 | 77 | 71 | 86 | 2 | 4,257 | 3,733 | |
| (2) | 1 | (11) | (2) | (6) | – | – | – | – | – | (77) | ||
| 15 | 10 | 5 | 104 | 139 | 14 | 8 | – | 3 | – | – | 355 | |
| (12) | (6) | – | (14) | (12) | (1) | (2) | – | – | – | – | (119) | |
| (537) | ||||||||||||
| – | – | (7) | – | – | – | – | – | – | – | |||
| – | – | (6) | (2) | (5) | (6) | – | – | 3 | 3 | (27) | ||
| 1 | 6 | 66 | 122 | 1 | – | – | 3 | 3 | 3 | (405) | ||
| – 4 |
(158) | 146 | 1,600 | 1,341 | 17 | 180 | 77 | 74 | 89 | 5 | 3,852 | |
| 65 | (28) | (452) | (372) | (18) | (45) | (19) | (23) | (30) | – | (1,155) | ||
| (93) | 118 | 1,148 | 968 | (2) | 135 | 58 | 51 | 59 | 5 | 2,697 | 3,999 (1,185) 2,814 |
|
| (1) 294 (95) 199 |
||||||||||||
| – | – | 81 | 83 | 18 | 21 | 2 | 2 | – | – | 117 | ||
| 4 195 |
(93) | 118 | 1,068 | 885 | (20) | 113 | 55 | 50 | 59 | 5 | 2,581 | |
| 89.1 34.3 |
68.5 33.4 |
62.6 28.3 |
64.6 29.3 |
69.9 35.5 |
61.9 34.7 |
64.7 32.0 |
64.3 33.1 |
–6 –6 |
–6 –6 |
65.6 28.0 |
€ mn
| German Speaking Countries | Western&Southern Europe | |||
|---|---|---|---|---|
| three months ended 30 September | 2014 | 2013 | 2014 | 2013 |
| Statutory premiums1 | 5,396 | 5,225 | 5,407 | 4,149 |
| Ceded premiums written | (54) | (39) | (144) | (193) |
| Change in unearned premiums | (54) | (47) | (18) | (2) |
| Statutory premiums (net) | 5,289 | 5,139 | 5,245 | 3,955 |
| Deposits from insurance and investment contracts | (1,767) | (1,534) | (4,098) | (2,790) |
| Premiums earned (net) | 3,522 | 3,605 | 1,148 | 1,165 |
| Interest and similar income | 2,188 | 2,203 | 960 | 939 |
| Operating income from financial assets and liabilities carried at fair value through income (net) | 43 | (371) | 9 | 31 |
| Operating realized gains/losses (net) | 627 | 366 | 114 | 151 |
| Fee and commission income | 23 | 11 | 139 | 115 |
| Other income | 29 | 26 | 3 | 5 |
| Operating revenues | 6,432 | 5,841 | 2,373 | 2,406 |
| Claims and insurance benefits incurred (net) | (3,394) | (3,050) | (978) | (949) |
| Change in reserves for insurance and investment contracts (net) | (2,014) | (1,916) | (578) | (719) |
| Interest expenses | (23) | (24) | (6) | (1) |
| Operating impairments of investments (net) | (59) | (25) | (39) | (10) |
| Investment expenses | (145) | (131) | (53) | (50) |
| Acquisition and administrative expenses (net) | (449) | (408) | (423) | (432) |
| Fee and commission expenses | (9) | (5) | (71) | (51) |
| Operating amortization of intangible assets | (5) | – | – | – |
| Restructuring charges | – | – | – | – |
| Other expenses | (26) | (22) | (4) | (4) |
| Operating expenses | (6,125) | (5,581) | (2,154) | (2,217) |
| Operating profit | 307 | 260 | 219 | 188 |
| Non-operating income from financial assets and liabilities carried at fair value through income (net) | – | – | – | (3) |
| Non-operating realized gains/losses (net) | – | – | 15 | – |
| Non-operating impairments of investments (net) | – | – | (4) | (3) |
| Non-operating amortization of intangible assets | (1) | – | (3) | (3) |
| Non-operating items | (1) | – | 7 | (8) |
| Income before income taxes | 307 | 260 | 226 | 180 |
| Income taxes | (95) | (90) | (80) | (46) |
| Net income | 212 | 170 | 146 | 134 |
| Net income attributable to: | ||||
| Non-controlling interests | – | – | 6 | 9 |
| Shareholders | 212 | 170 | 140 | 125 |
| Margin on reserves2 in basis points | 50 | 47 | 56 | 54 |
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 divided by the average of the current quarter-end and previous quarter-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.
3 Presentation not meaningful.
| B | Condensed Consolidated Interim Financial Statements | |||
|---|---|---|---|---|
| 49 Consolidated Balance Sheets | 51 Consolidated Statements of | 52 Consolidated Statements of Changes | 53 Consolidated Statements of Cash Flows | |
| 50 Consolidated Income Statements | Comprehensive Income | in Equity | 55 Notes |
| Iberia&Latin America | USA | Global Insurance Lines& Anglo Markets |
Growth Markets | Consolidation | Life/Health | ||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 |
| 320 | 331 | 2,901 | 1,672 | 156 | 132 | 1,826 | 1,401 | (152) | (213) | 15,853 | 12,698 |
| (4) | (4) | (29) | (27) | (24) | (27) | (80) | (66) | 152 | 213 | (182) | (144) |
| 15 | 12 | (2) | (1) | (2) | 4 | (64) | (21) | – | – | (125) | (54) |
| 331 | 339 | 2,870 | 1,643 | 130 | 110 | 1,682 | 1,314 | – | – | 15,546 | 12,500 |
| (199) | (197) | (2,624) | (1,425) | – | – | (1,003) | (684) | – | – | (9,690) | (6,631) |
| 132 | 141 | 246 | 218 | 130 | 110 | 678 | 630 | – | – | 5,856 | 5,869 |
| 93 | 92 | 778 | 682 | 17 | 18 | 236 | 207 | (13) | (15) | 4,260 | 4,127 |
| 11 | 8 | (248) | (217) | (16) | 5 | 6 | 2 | (12) | 6 | (207) | (537) |
| 4 | 3 | 1 | 18 | – | – | 4 | 3 | (4) | – | 746 | 541 |
| 36 | 1 | 31 | 21 | – | – | 34 | 19 | (1) | (1) | 263 | 166 |
| – | – | – | – | – | – | – | – | – | – | 32 | |
| 276 | 245 | 809 | 722 | 130 | 133 | 958 | 861 | (30) | (10) | 10,949 | 10,198 |
| (121) | (124) | (25) | (19) | (92) | (77) | (393) | (423) | – | – | (5,004) | (4,642) |
| (29) | (32) | (287) | (320) | (6) | (14) | (260) | (137) | – | – | (3,175) | (3,138) |
| – | (1) | (2) | (2) | – | – | (9) | (2) | 13 | 15 | (27) | (16) |
| – | – | (3) | 10 | – | – | (1) | – | – | – | (102) | (25) |
| (2) | (1) | (10) | (8) | – | – | (8) | (7) | – | – | (219) | (198) |
| (49) | (46) | (316) | (194) | (26) | (19) | (224) | (222) | – | (1) | (1,488) | (1,322) |
| (18) | – | (9) | (5) | – | – | (3) | – | 1 | 1 | (110) | (61) |
| – | – | – | – | – | – | – | – | – | – | (5) | |
| – | – | – | – | – | – | – | – | – | – | (1) | |
| – | – | – | – | – | – | – | – | – | – | (30) | (26) |
| (220) | (205) | (652) | (539) | (125) | (110) | (898) | (792) | 14 | 15 | (10,159) | (9,429) |
| 57 | 41 | 158 | 183 | 5 | 22 | 60 | 68 | (15) | 5 | 790 | 769 |
| – | – | (16) | 9 | – | – | – | – | – | – | (17) | |
| – | – | – | 27 | – | – | 4 | 2 | – | – | 19 | |
| – | – | – | – | – | – | (3) | – | – | – | (7) | |
| (4) (4) |
– – |
– (17) |
– 36 |
– – |
– – |
(2) – |
(2) – |
– – |
– – |
(10) (15) |
|
| 53 | 41 | 141 | 219 | 5 | 22 | 60 | 68 | (15) | 5 | 776 | 795 |
| (15) | (12) | (40) | (65) | (3) | (4) | (12) | (16) | – | – | (245) | (233) |
| 38 | 29 | 101 | 154 | 2 | 18 | 47 | 52 | (15) | 5 | 530 | |
| 10 | 6 | – | – | – | – | 8 | 8 | – | – | 24 | 23 |
| 28 | 22 | 101 | 154 | 2 | 18 | 39 | 43 | (15) | 5 | 507 | 539 |
| 249 | 206 | 78 | 104 | 112 | 452 | 84 | 104 | –3 | –3 | 61 | 66 |
€ mn
| German Speaking Countries | Western&Southern Europe | |||
|---|---|---|---|---|
| nine months ended 30 September | 2014 | 2013 | 2014 | 2013 |
| Statutory premiums1 | 17,876 | 16,398 | 17,489 | 14,791 |
| Ceded premiums written | (127) | (127) | (924) | (810) |
| Change in unearned premiums | (163) | (118) | (28) | (3) |
| Statutory premiums (net) | 17,586 | 16,154 | 16,538 | 13,979 |
| Deposits from insurance and investment contracts | (6,347) | (4,760) | (13,034) | (10,577) |
| Premiums earned (net) | 11,239 | 11,394 | 3,504 | 3,402 |
| Interest and similar income | 6,849 | 6,730 | 2,898 | 2,883 |
| Operating income from financial assets and liabilities carried at fair value through income (net) | 231 | (904) | (65) | 133 |
| Operating realized gains/losses (net) | 1,727 | 1,599 | 565 | 415 |
| Fee and commission income | 63 | 37 | 385 | 317 |
| Other income | 97 | 86 | 13 | 25 |
| Operating revenues | 20,207 | 18,942 | 7,300 | 7,175 |
| Claims and insurance benefits incurred (net) | (10,411) | (9,243) | (3,028) | (2,996) |
| Change in reserves for insurance and investment contracts (net) | (6,609) | (6,910) | (1,662) | (1,866) |
| Interest expenses | (68) | (75) | (15) | (16) |
| Operating impairments of investments (net) | (208) | (165) | (227) | (63) |
| Investment expenses | (425) | (382) | (166) | (149) |
| Acquisition and administrative expenses (net), excluding one-off effect from pension revaluation | (1,219) | (1,174) | (1,347) | (1,280) |
| Fee and commission expenses | (29) | (18) | (182) | (156) |
| Operating amortization of intangible assets | (14) | – | – | – |
| Restructuring charges | – | (2) | – | (1) |
| Other expenses | (180) | (65) | (10) | (9) |
| Operating expenses | (19,163) | (18,031) | (6,638) | (6,534) |
| Operating profit | 1,045 | 911 | 662 | 641 |
| Non-operating income from financial assets and liabilities carried at fair value through income (net) | – | – | (5) | (4) |
| Non-operating realized gains/losses (net) | – | – | 128 | 38 |
| Non-operating impairments of investments (net) | – | – | (11) | (10) |
| One-off effect from pension revaluation | (7) | – | – | – |
| Non-operating amortization of intangible assets | (1) | (1) | (8) | (3) |
| Non-operating items | (8) | (1) | 104 | 22 |
| Income before income taxes | 1,036 | 911 | 766 | 662 |
| Income taxes | (344) | (335) | (212) | (162) |
| Net income | 692 | 576 | 554 | 501 |
| Net income attributable to: | ||||
| Non-controlling interests | – | – | 28 | 21 |
| Shareholders | 692 | 576 | 526 | 479 |
| Margin on reserves2 in basis points | 59 | 55 | 58 | 62 |
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 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.
3 Presentation not meaningful.
| B | Condensed Consolidated Interim Financial Statements | |||
|---|---|---|---|---|
| 49 Consolidated Balance Sheets | 51 Consolidated Statements of | 52 Consolidated Statements of Changes | 53 Consolidated Statements of Cash Flows | |
| 50 Consolidated Income Statements | Comprehensive Income | in Equity | 55 Notes |
| Iberia&Latin America | USA | Global Insurance Lines& Anglo Markets |
Growth Markets | Consolidation | Life/Health | ||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 |
| 1,247 | 1,326 | 8,810 | 5,022 | 423 | 398 | 5,057 | 4,577 | (925) | (852) | 49,977 | 41,659 |
| (12) | (17) | (85) | (86) | (83) | (58) | (263) | (205) | 925 | 852 | (569) | (451) |
| (16) | (14) | (9) | (5) | (26) | – | (124) | (80) | – | – | (366) | (218) |
| 1,220 | 1,295 | 8,715 | 4,931 | 314 | 340 | 4,670 | 4,292 | – | – | 49,043 | 40,990 |
| (745) | (775) | (8,010) | (4,285) | – | – | (2,776) | (2,453) | – | – | (30,912) | (22,849) |
| 475 | 520 | 706 | 647 | 314 | 340 | 1,894 | 1,839 | – | – | 18,131 | 18,141 |
| 278 | 275 | 2,179 | 2,052 | 51 | 59 | 675 | 624 | (39) | (49) | 12,891 | 12,573 |
| 28 | 10 | (676) | (645) | (21) | (49) | 1 | (12) | (10) | – | (512) | (1,468) |
| 9 | 10 | 12 | 98 | – | – | 18 | 36 | (3) | – | 2,328 | 2,159 |
| 105 | 2 83 |
58 | – | (1) | 117 | 61 | (2) | (2) | 752 | 474 | |
| – | – – |
– | – | – | 3 | – | – | – | 114 | 111 | |
| 894 | 817 | 2,304 | 2,209 | 343 | 349 | 2,708 | 2,548 | (54) | (51) | 33,703 | 31,990 |
| (417) | (461) | (71) | (63) | (246) | (259) | (1,085) | (1,437) | – | – | (15,258) | (14,459) |
| (102) | (81) | (930) | (983) | 8 | (9) | (651) | (219) | – | – | (9,946) | (10,068) |
| (1) | (2) | (6) | (5) | (1) | (1) | (24) | (7) | 39 | 49 | (75) | (56) |
| (1) | (1) | (3) | 10 | – | – | (3) | (1) | – | – | (443) | (219) |
| (5) | (5) | (27) | (25) | – | – | (22) | (21) | – | – | (645) | (581) |
| (153) | (146) | (720) | (741) | (69) | (67) | (682) | (643) | 1 | 2 | (4,189) | (4,048) |
| (51) | (1) | (18) | (17) | – | – | (10) | (1) | 1 | 2 | (290) | |
| – | – – |
– | – | – | – | – | – | – | (14) | ||
| – | – – |
– | – | – | 8 | – | – | – | 8 | ||
| – | – | – | – | – | – | (5) | – | – | – | (195) | |
| (731) | (696) | (1,775) | (1,825) | (308) | (335) | (2,474) | (2,328) | 41 | 53 | (31,048) | (29,698) |
| 163 | 121 | 529 | 384 | 35 | 14 | 233 | 220 | (13) | 1 | 2,655 | 2,293 |
| – | – (37) |
18 | – | – | – | – | – | – | (42) | 14 | |
| – | – – |
28 | – | – | 7 | 20 | – | – | 135 | ||
| – | – – |
– | – | – | (4) | (3) | – | – | (15) | ||
| – | – – |
– | – | – | – | – | – | – | (7) | ||
| (12) | – – |
– | – | – | (5) | (6) | – | – | (27) | ||
| (12) | – (37) |
46 | – | – | (2) | 10 | – | – | 44 | ||
| 151 | 121 | 492 | 430 | 35 | 14 | 231 | 231 | (13) | 1 | 2,698 | 2,370 |
| (44) | (36) | (148) | (118) | (10) | (5) | (49) | (51) | – | – | (808) | (706) |
| 107 | 85 | 344 | 312 | 25 | 9 | 182 | 180 | (13) | 1 | 1,891 | 1,664 |
| 28 | 18 | – | – | – | – | 32 | 28 | – | – | 87 | |
| 79 | 67 | 344 | 312 | 25 | 9 | 150 | 152 | (13) | 1 | 1,804 | 1,597 |
| 248 | 208 | 91 | 74 | 238 | 86 | 111 | 110 | –3 | –3 | 70 | |
| € mn | ||
|---|---|---|
| three months ended 30 September | 2014 | 2013 |
| Net fee and commission income1 | 1,617 | 1,697 |
| Net interest income2 | (2) | 3 |
| Income from financial assets and liabilities carried at fair value through income (net) | 2 | 1 |
| Other income | 1 | 2 |
| Operating revenues | 1,618 | 1,703 |
| Administrative expenses (net) | (925) | (949) |
| Restructuring charges | – | 1 |
| Operating expenses | (925) | (949) |
| Operating profit | 694 | 755 |
| Realized gains/losses (net) | 5 | 1 |
| Amortization of intangible assets | (3) | (6) |
| Non-operating items | 2 | (5) |
| Income before income taxes | 696 | 749 |
| Income taxes | (258) | (267) |
| Net income | 438 | 482 |
| Net income attributable to: | ||
| Non-controlling interests | 22 | 23 |
| Shareholders | 415 | 459 |
| Cost-income ratio3 in % | 57.1 | 55.7 |
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.
| B | Condensed Consolidated Interim Financial Statements | |||
|---|---|---|---|---|
| 49 Consolidated Balance Sheets | 51 Consolidated Statements of | 52 Consolidated Statements of Changes | 53 Consolidated Statements of Cash Flows | |
| 50 Consolidated Income Statements | Comprehensive Income | in Equity | 55 Notes |
| € mn | |
|---|---|
| nine months ended 30 September 2014 |
2013 |
| Net fee and commission income1 4,734 |
5,403 |
| Net interest income2 (3) |
10 |
| Income from financial assets and liabilities carried at fair value through income (net) 5 |
8 |
| Other income 6 |
8 |
| Operating revenues 4,742 |
5,429 |
| Administrative expenses (net), excluding aquisition-related expenses and one-off effect from pension revaluation (2,730) |
(2,966) |
| Restructuring charges 3 |
(5) |
| Operating expenses (2,727) |
(2,971) |
| Operating profit 2,015 |
2,458 |
| Realized gains/losses (net) 4 |
1 |
| Acquisition-related expenses 3 |
(41) |
| One-off effect from pension revaluation (14) |
– |
| Amortization of intangible assets (8) |
(19) |
| Non-operating items (15) |
(59) |
| Income before income taxes 2,000 |
2,399 |
| Income taxes (738) |
(861) |
| Net income 1,263 |
1,538 |
| Net income attributable to: | |
| Non-controlling interests 67 |
71 |
| Shareholders 1,196 |
1,467 |
| Cost-income ratio3 in % 57.5 |
54.7 |
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.
| € mn | ||||
|---|---|---|---|---|
| Holding&Treasury | Banking | |||
| three months ended 30 September | 2014 | 2013 | 2014 | |
| Interest and similar income | 71 | 47 | 146 | |
| Operating income from financial assets and liabilities carried at fair value through income (net) | 13 | 13 | 3 | |
| Fee and commission income | 16 | 22 | 123 | 104 |
| Other income | – | – | – | |
| Operating revenues | 100 | 82 | 273 | 258 |
| Interest expenses, excluding interest expenses from external debt | (82) | (82) | (64) | (68) |
| Loan loss provisions | – | – | (7) | (18) |
| Investment expenses | (18) | (18) | – | – |
| Administrative expenses (net) | (199) | (177) | (117) | (109) |
| Fee and commission expenses | (71) | (68) | (73) | (58) |
| Restructuring charges | 4 | 26 | – | – |
| Other expenses | – | – | (1) | (1) |
| Operating expenses | (367) | (320) | (261) | (254) |
| Operating profit (loss) | (267) | (238) | 11 | 4 |
| Non-operating income from financial assets and liabilities carried at fair value through income (net) | (11) | (7) | – | – |
| Realized gains/losses (net) | 33 | 15 | 3 | 11 |
| Impairments of investments (net) | (1) | (2) | – | – |
| Income from fully consolidated private equity investments (net) | – | – | – | – |
| Interest expenses from external debt | (212) | (207) | – | – |
| Amortization of intangible assets | (2) | (2) | – | – |
| Non-operating items | (194) | (203) | 3 | 11 |
| Income (loss) before income taxes | (461) | (441) | 14 | 15 |
| Income taxes | 154 | 124 | (4) | (4) |
| Net income (loss) | (307) | (317) | 10 | 11 |
| Net income (loss) attributable to: | ||||
| Non-controlling interests | 1 | – | 2 | |
| Shareholders | (307) | (317) | 8 | |
| Cost-income ratio1 for the reportable segment Banking in % | 86.6 | 83.3 |
1 Represents investment expenses, administrative expenses (net), 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 | |||
|---|---|---|---|---|
| 49 Consolidated Balance Sheets | 51 Consolidated Statements of | 52 Consolidated Statements of Changes | 53 Consolidated Statements of Cash Flows | |
| 50 Consolidated Income Statements | Comprehensive Income | in Equity | 55 Notes |
| Holding&Treasury Banking |
Alternative Investments | Consolidation | Corporate and Other | ||||
|---|---|---|---|---|---|---|---|
| 2013 2014 |
2013 | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 |
| 47 146 |
152 | 5 | 4 | – | – | 222 | 202 |
| 13 3 |
2 | (2) | (1) | – | – | 14 | 15 |
| 22 123 |
104 | 44 | 45 | (2) | (1) | 181 | 170 |
| – – |
– | – | (1) | – | 1 | – | (1) |
| 273 | 258 | 47 | 47 | (2) | – | 418 | 387 |
| (64) | (68) | (1) | – | – | – | (146) | (151) |
| (7) | (18) | – | – | – | – | (7) | (18) |
| (18) – |
– | (2) | (1) | 2 | (1) | (19) | (20) |
| (177) (117) |
(109) | (36) | (41) | – | 1 | (353) | (327) |
| (73) | (58) | – | – | – | – | (145) | |
| 26 – |
– | – | – | – | – | 4 | |
| – (1) |
(1) | – | – | – | – | (1) | |
| (320) (261) |
(254) | (39) | (42) | 2 | – | (666) | |
| (238) 11 |
4 | 8 | 5 | – | – | (248) | |
| (7) – |
– | – | – | – | – | (11) | |
| 3 | 11 | – | – | – | – | 36 | |
| – | – | – | – | – | – | (1) | |
| – | – | (20) | (4) | – | – | (20) | |
| – | – | – | – | – | – | (212) | |
| – | – | – | – | – | – | (2) | |
| 3 | 11 | (19) | (4) | – | – | (211) | |
| 14 | 15 | (11) | 1 | – | – | (458) | |
| 124 (4) |
(4) | (4) | (1) | – | – | 147 | |
| (317) 10 |
11 | (15) | (1) | – | – | (311) | |
| 2 | 2 | – | 2 | – | – | 3 | |
| (317) 8 |
9 | (15) | (3) | – | – | (315) | |
| 86.6 | 83.3 |
| € mn | |||||
|---|---|---|---|---|---|
| Holding&Treasury | Banking | Alternative Investments | Consolidation | ||
| nine months ended 30 September | 2014 | 2013 | 2014 2013 |
2014 2013 |
2014 |
| Interest and similar income | 199 | 221 | 445 463 |
18 8 |
(1) |
| Operating income from financial assets and liabilities carried at fair value through income (net) | 20 | 27 | 9 | 7 (4) – |
– |
| Fee and commission income | 45 | 42 | 364 348 |
119 125 |
(2) |
| Other income | – | – | – | – – 1 |
– |
| Operating revenues | 264 | 290 | 818 818 |
133 133 |
(3) |
| Interest expenses, excluding interest expenses from external debt | (244) | (258) | (194) (213) |
(2) (2) |
1 |
| Loan loss provisions | – | – | (31) (47) |
– – |
– |
| Investment expenses | (50) | (55) | – | – (5) (3) |
3 |
| Administrative expenses (net), excluding aquisition-related expenses and one-off effect from pension revaluation | (515) | (508) | (326) (354) |
(101) (108) |
– |
| Fee and commission expenses | (218) | (178) | (219) (192) |
– – |
– |
| Restructuring charges | 4 | 26 | – (90) |
– – |
– |
| Other expenses | – | – | (1) (2) |
– – |
– |
| Operating expenses | (1,023) | (973) | (772) (898) |
(108) (113) |
3 |
| Operating profit (loss) | (760) | (682) | 46 (80) |
24 20 |
– |
| Non-operating income from financial assets and liabilities carried at fair value through income (net) | (18) | (24) | – | – – – |
– |
| Realized gains/losses (net) | 85 | 268 | 7 19 |
– – |
– |
| Impairments of investments (net) | (6) | (75) | – (1) |
– – |
– |
| Income from fully consolidated private equity investments (net) | – | – | – | – (31) (19) |
– |
| Interest expenses from external debt | (623) | (680) | – | – – – |
|
| Acquisition-related expenses | 2 | (1) | – | – – – |
|
| One-off effect from pension revaluation | 679 | – | (1) | – (4) – |
|
| Amortization of intangible assets | (6) | (8) | – | – – (46) |
|
| Non-operating items | 113 | (521) | 6 18 |
(35) (65) |
– – |
| Income (loss) before income taxes | (646) | (1,204) | 51 (62) |
(11) (45) |
– |
| Income taxes | 203 | 291 | (16) 20 |
(10) (4) |
– |
| Net income (loss) | (443) | (912) | 35 (42) |
(21) (49) |
– |
| Net income (loss) attributable to: | |||||
| Non-controlling interests | – | – | 6 | 5 7 1 |
– |
| Shareholders | (443) | (912) | 29 (47) |
(27) (50) |
– |
| Cost-income ratio1 for the reportable segment Banking in % | 81.1 108.0 |
1 Represents investment expenses, administrative expenses (net), excluding acquisition-related expenses and one-off effect 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 | |||
|---|---|---|---|---|
| 49 Consolidated Balance Sheets | 51 Consolidated Statements of | 52 Consolidated Statements of Changes | 53 Consolidated Statements of Cash Flows | |
| 50 Consolidated Income Statements | Comprehensive Income | in Equity | 55 Notes |
| Banking | Alternative Investments | Consolidation | Corporate and Other | ||||
|---|---|---|---|---|---|---|---|
| 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 |
| 445 | 463 | 18 | 8 | (1) | – | 660 | 691 |
| 9 | 7 | (4) | – | – | – | 25 | 34 |
| 364 | 348 | 119 | 125 | (2) | (3) | 526 | 513 |
| – | – | – | 1 | – | – | 1 | |
| 818 | 818 | 133 | 133 | (3) | (3) | 1,211 | 1,238 |
| (194) | (213) | (2) | (2) | 1 | – | (439) | (472) |
| (31) | (47) | – | – | – | – | (31) | |
| – | – | (5) | (3) | 3 | – | (53) | |
| (326) | (354) | (101) | (108) | – | 3 | (943) | |
| (219) | (192) | – | – | – | – | (437) | |
| – | (90) | – | – | – | – | 4 | |
| (1) | (2) | – | – | – | – | (1) | |
| (772) | (898) | (108) | (113) | 3 | 3 | (1,901) | |
| 46 | (80) | 24 | 20 | – | – | (689) | |
| – | – | – | – | – | – | (19) | |
| 7 | 19 | – | – | – | 27 | 92 | |
| – | (1) | – | – | – | – | (6) | |
| – | – | (31) | (19) | – | – | (31) | |
| – | – | – | – | – | – | (623) | |
| – | – | – | – | – | – | 2 | |
| (1) | – | (4) | – | – | – | 675 | |
| – | – | – | (46) | – | – | (6) | |
| 6 | 18 | (35) | (65) | – | 27 | 84 | |
| 51 | (62) | (11) | (45) | – | 27 | (606) | |
| (16) | 20 | (10) | (4) | – | (5) | 177 | |
| 35 | (42) | (21) | (49) | – | 22 | (429) | |
| 6 | 5 | 7 | 1 | – | – | 13 | |
| 29 | (47) | (27) | (50) | – | 22 | (442) | |
| 81.1 | 108.0 | ||||||
| € mn | ||
|---|---|---|
| as of 30 September 2014 |
as of 31 December 2013 |
|
| Financial assets held for trading | ||
| Debt securities | 422 | 360 |
| Equity securities | 178 | 139 |
| Derivative financial instruments | 1,499 | 2,013 |
| Subtotal | 2,099 | 2,512 |
| Financial assets designated at fair value through income |
||
| Debt securities | 2,224 | 2,278 |
| Equity securities | 1,840 | 1,870 |
| Subtotal | 4,063 | 4,148 |
| Total | 6,162 | 6,660 |
| € mn | as of 30 September 2014 |
as of 31 December 2013 |
|---|---|---|
| Available-for-sale investments | 451,643 | 392,233 |
| Held-to-maturity investments | 4,008 | 4,140 |
| Funds held by others under reinsurance contracts assumed |
1,071 | 893 |
| Investments in associates and joint ventures | 3,213 | 3,098 |
| Real estate held for investment | 11,234 | 10,783 |
| Total | 471,167 | 411,148 |
| B | Condensed Consolidated Interim Financial Statements | |||
|---|---|---|---|---|
| 49 Consolidated Balance Sheets | 51 Consolidated Statements of | 52 Consolidated Statements of Changes | 53 Consolidated Statements of Cash Flows | |
| 50 Consolidated Income Statements | Comprehensive Income | in Equity | 55 Notes |
| € mn | ||||||||
|---|---|---|---|---|---|---|---|---|
| as of 30 September 2014 | as of 31 December 2013 | |||||||
| 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) |
3,391 | 144 | (5) | 3,530 | 2,515 | 103 | (16) | 2,602 |
| Corporate mortgage-backed securities (residential and commercial) |
13,174 | 581 | (43) | 13,712 | 11,226 | 693 | (86) | 11,833 |
| Other asset-backed securities | 4,079 | 261 | (38) | 4,302 | 3,460 | 210 | (40) | 3,630 |
| Government and government agency bonds | ||||||||
| France | 31,093 | 7,175 | (1) | 38,267 | 31,410 | 2,471 | (177) | 33,704 |
| Italy | 25,637 | 4,766 | – | 30,403 | 26,304 | 2,001 | (91) | 28,214 |
| Germany | 12,800 | 1,782 | (30) | 14,552 | 14,852 | 918 | (46) | 15,724 |
| United States | 10,129 | 652 | (47) | 10,734 | 8,411 | 239 | (171) | 8,479 |
| Belgium | 5,795 | 1,482 | – | 7,277 | 5,968 | 613 | (3) | 6,578 |
| Korea | 6,173 | 813 | – | 6,986 | 5,798 | 427 | (26) | 6,199 |
| Austria | 5,475 | 1,259 | – | 6,734 | 4,941 | 468 | (23) | 5,386 |
| Spain | 4,833 | 734 | – | 5,566 | 2,813 | 178 | (35) | 2,956 |
| Switzerland | 4,731 | 482 | (5) | 5,208 | 4,376 | 330 | (80) | 4,626 |
| Netherlands | 3,807 | 388 | – | 4,195 | 3,627 | 159 | (26) | 3,760 |
| Hungary | 866 | 83 | (1) | 949 | 773 | 60 | – | 833 |
| Portugal | 197 | 28 | – | 225 | 196 | 2 | (2) | 196 |
| Ireland | 174 | 2 | – | 176 | 38 | 1 | – | 39 |
| Greece | 1 | 2 | – | 3 | 1 | 2 | – | 3 |
| Supranationals | 15,353 | 2,425 | (2) | 17,776 | 14,571 | 663 | (56) | 15,178 |
| All other countries | 34,326 | 1,779 | (265) | 35,839 | 30,854 | 944 | (723) | 31,075 |
| Subtotal | 161,390 | 23,853 | (352) | 184,890 | 154,933 | 9,476 | (1,459) | 162,950 |
| Corporate bonds1 | 189,729 | 16,775 | (462) | 206,042 | 168,353 | 9,212 | (1,397) | 176,168 |
| Other | 2,234 | 445 | (5) | 2,674 | 2,230 | 324 | (4) | 2,550 |
| Subtotal | 373,997 | 42,059 | (905) | 415,150 | 342,717 | 20,018 | (3,002) | 359,733 |
| Equity securities2 | 25,647 | 11,044 | (199) | 36,492 | 23,022 | 9,623 | (146) | 32,499 |
| Total | 399,644 | 53,103 | (1,104) | 451,643 | 365,739 | 29,641 | (3,148) | 392,233 |
1 Includes bonds issued by Spanish banks with a fair value of € 438 mn (2013: € 418 mn), thereof subordinated bonds with a fair value of € 132 mn (2013: € 115 mn).
2 Includes shares invested in Spanish banks with a fair value of € 468 mn (2013: € 402 mn).
| € mn | ||||||
|---|---|---|---|---|---|---|
| as of 30 September 2014 | as of 31 December 2013 | |||||
| Banks | Customers | Total | Banks | Customers | Total | |
| Short-term investments and certificates of deposit | 3,440 | – | 3,440 | 3,275 | – | 3,275 |
| Reverse repurchase agreements | 90 | – | 90 | 613 | – | 613 |
| Collateral paid for securities borrowing transactions and derivatives | 633 | – | 633 | 315 | – | 315 |
| Loans | 57,4411 | 54,513 | 111,954 | 60,5111 | 51,595 | 112,106 |
| Other | 806 | 13 | 819 | 670 | 15 | 686 |
| Subtotal | 62,410 | 54,526 | 116,936 | 65,383 | 51,611 | 116,994 |
| Loan loss allowance | – | (139) | (139) | – | (194) | (194) |
| Total | 62,410 | 54,387 | 116,797 | 65,383 | 51,416 | 116,800 |
1 Primarily include covered bonds.
| € mn | as of 30 September 2014 |
as of 31 December 2013 |
|---|---|---|
| Unearned premiums | 1,867 | 1,538 |
| Reserves for loss and loss adjustment expenses | 6,943 | 6,494 |
| Aggregate policy reserves | 4,809 | 4,463 |
| Other insurance reserves | 119 | 115 |
| Total | 13,739 | 12,609 |
| € mn | ||
|---|---|---|
| as of | as of | |
| 30 September | 31 December | |
| 2014 | 2013 | |
| Deferred acquisition costs | ||
| Property-Casualty | 4,620 | 4,354 |
| Life/Health | 16,200 | 15,837 |
| Asset Management1 | – | 159 |
| Subtotal | 20,820 | 20,350 |
| Present value of future profits | 922 | 1,046 |
| Deferred sales inducements | 757 | 807 |
| Total | 22,499 | 22,203 |
1 The respective entities have been prospectively reclassified, effective 1 January 2014, from the business segment Asset Management to the business segment Life/Health. For further information, please see note 4.
| € mn | ||
|---|---|---|
| as of 30 September 2014 |
as of 31 December 2013 |
|
| Receivables | ||
| Policyholders | 5,677 | 5,489 |
| Agents | 4,629 | 4,424 |
| Reinsurers | 2,279 | 1,844 |
| Other | 5,028 | 4,160 |
| Less allowance for doubtful accounts | (700) | (720) |
| Subtotal | 16,912 | 15,197 |
| Tax receivables | ||
| Income taxes | 1,354 | 2,159 |
| Other taxes | 1,271 | 1,215 |
| Subtotal | 2,625 | 3,374 |
| Accrued dividends, interest and rent | 7,268 | 7,706 |
| Prepaid expenses | ||
| Interest and rent | 18 | 13 |
| Other prepaid expenses | 300 | 255 |
| Subtotal | 318 | 268 |
| Derivative financial instruments used for hedging that meet the criteria for hedge accounting and firm commitments |
290 | 75 |
| Property and equipment | ||
| Real estate held for own use | 2,507 | 2,423 |
| Software | 2,023 | 1,832 |
| Equipment | 1,251 | 1,173 |
| Fixed assets of alternative investments | 1,341 | 1,304 |
| Subtotal | 7,122 | 6,732 |
| Other assets | 1,470 | 1,280 |
| Total | 36,004 | 34,632 |
51 Consolidated Statements of Comprehensive Income
52 Consolidated Statements of Changes in Equity
| € mn | ||
|---|---|---|
| as of 30 September 2014 |
as of 31 December 2013 |
|
| Assets of disposal groups classified as held for sale | ||
| OJSC "Allianz Investments", Moscow | 5 | – |
| Subtotal | 5 | – |
| Non-current assets classified as held for sale | ||
| Investments in associates and joint ventures | 48 | 131 |
| Real estate held for investment | 69 | – |
| Real estate held for own use | 59 | 16 |
| Subtotal | 176 | 147 |
| Total | 180 | 147 |
| Liabilities of disposal groups classified as held for sale |
||
| OJSC "Allianz Investments", Moscow | 3 | – |
| Total | 3 | – |
During the third quarter of 2014, the Allianz Group decided to dispose of OJSC "Allianz Investments", Moscow. Thus, the assets and liabilities of this consolidated entity allocated to the reportable segment Growth Markets (Life/Health) were reclassified as held for sale. As of 30 September 2014, 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 fourth quarter of 2014. Upon measurement of the disposal group at fair value less costs to sell, an impairment loss of € 3 mn was recognized for the three and the nine months ended 30 September 2014.
As of 30 September 2014, investments in associates and joint ventures comprised an investment of € 43 mn in a U.S. real estate company allocated to the reportable segment German Speaking Countries (Life/Health). Additionally, an investment of € 5 mn in an associated French media group allocated to the reportable segments German Speaking Countries (Property-Casualty and Life/Health) was classified as held for sale. Upon measurement of both investments at fair value less costs to sell, no impairment loss was recognized for the three and the nine months ended 30 September 2014. The sale of both investments will be completed before 31 December 2014.
The investment in an associated Italian real estate company allocated to the reportable segment Western and Southern Europe (Property-Casualty) was sold as expected during the third quarter of 2014.
As of 30 September 2014, real estate held for investment classified as held for sale comprised several office buildings allocated to the reportable segments German Speaking Countries (Life/Health) and Holding&Treasury. The sale of these buildings is expected to be completed by the end of the first quarter of 2015. Upon measurement of these buildings at fair value less costs to sell, no impairment loss was recognized for the three and the nine months ended 30 September 2014.
As of 30 September 2014, real estate held for own use comprised two office buildings allocated to the reportable segment Global Insurance Lines&Anglo Markets (Property-Casualty) which were classified as held for sale. Upon measurement of the real estate held for own use classified as held for sale at fair value less costs to sell, an impairment loss of € 17 mn was recognized for the three and the nine months ended 30 September 2014. The sale of these buildings will be completed by the end of the third quarter of 2015.
Real estate held for own use comprised as of 31 December 2013 an office building allocated to the reportable segment Asset Management, which was sold as expected during the first quarter of 2014.
| € mn | ||
|---|---|---|
| as of 30 September |
as of 31 December |
|
| 2014 | 2013 | |
| Intangible assets with indefinite useful lives | ||
| Goodwill | 12,100 | 11,544 |
| Brand names1 | 292 | 296 |
| Subtotal | 12,391 | 11,840 |
| Intangible assets with finite useful lives | ||
| Distribution agreements2 | 964 | 996 |
| Customer relationships3 | 247 | 149 |
| Other4 | 119 | 115 |
| Subtotal | 1,330 | 1,260 |
| Total | 13,721 | 13,100 |
1 Includes primarily the brand name of Selecta AG, Muntelier.
2 Includes primarily the long-term distribution agreements with Commerzbank AG of € 344 mn (2013: € 372 mn), Banco Popular S.A. of € 357 mn (2013: € 370 mn), Yapı Kredi Bank of € 147 mn (2013: € 151 mn) and HSBC Asia, HSBC Turkey and BTPN Indonesia of € 91 mn (2013: € 78 mn).
3 Includes primarily customer relationships from the acquisition of UnipolSai Assicurazioni S.p.A. of € 107 mn (2013: € – mn), Selecta of € 93 mn (2013: € 118 mn) and Yapı Kredi of € 10 mn (2013: € 10 mn) and renewal rights acquired in the context of a business combination of € 15 mn (2013: € 19 mn).
4 Includes primarily acquired business portfolios of € 62 mn (2013: € 76 mn) and heritable building rights of € 17 mn (2013: € 17 mn).
| € mn | ||
|---|---|---|
| 2014 | 2013 | |
| Cost as of 1 January | 12,534 | 12,573 |
| Accumulated impairments as of 1 January | (990) | (894) |
| Carrying amount as of 1 January | 11,544 | 11,679 |
| Additions | 286 | 228 |
| Disposals | – | – |
| Foreign currency translation adjustments | 269 | (170) |
| Impairments | – | (46) |
| Carrying amount as of 30 September | 12,100 | 11,691 |
| Accumulated impairments as of 30 September | 990 | 940 |
| Cost as of 30 September | 13,090 | 12,631 |
Additions for the nine months ended 2014 are mainly related to goodwill arising from the acquisition of specific distribution activities of the Property-Casualty insurance business of UnipolSai Assicurazioni S.p.A.
53 Consolidated Statements of Cash Flows 55 Notes
| € mn | as of 30 September 2014 |
as of 31 December 2013 |
|---|---|---|
| Financial liabilities held for trading | ||
| Derivative financial instruments | 7,576 | 6,010 |
| Other trading liabilities | 3 | 3 |
| Subtotal | 7,580 | 6,013 |
| Financial liabilities designated at fair value through income |
– | – |
| Total | 7,580 | 6,013 |
| € mn | as of 30 September 2014 | as of 31 December 2013 | ||||
|---|---|---|---|---|---|---|
| Banks | Customers | Total | Banks | Customers | Total | |
| Payable on demand | 174 | 4,734 | 4,908 | 696 | 4,473 | 5,169 |
| Savings deposits | – | 2,836 | 2,836 | – | 2,873 | 2,873 |
| Term deposits and certificates of deposit | 905 | 1,914 | 2,818 | 980 | 2,157 | 3,136 |
| Repurchase agreements | 1,198 | 106 | 1,304 | 1,028 | 3 | 1,031 |
| Collateral received from securities lending transactions and derivatives | 2,285 | – | 2,285 | 2,216 | – | 2,216 |
| Other | 4,582 | 4,016 | 8,598 | 5,050 | 3,634 | 8,684 |
| Total | 9,143 | 13,606 | 22,749 | 9,970 | 13,140 | 23,109 |
| € mn | as of 30 September 2014 |
as of 31 December 2013 |
|---|---|---|
| Property-Casualty | 58,646 | 56,614 |
| Life/Health | 10,482 | 9,960 |
| Consolidation | (12) | (9) |
| Total | 69,116 | 66,566 |
The following table reconciles the beginning and ending reserves of the Allianz Group, including the effect of reinsurance ceded, in the Property-Casualty business segment for the nine months ended 30 September 2014 and 2013. 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 as well as in the loss ratio and is, therefore, included in the development of the reserves below.
| 2014 | 2013 | ||||
|---|---|---|---|---|---|
| Gross | Ceded | Net | Gross | Ceded | Net |
| 56,614 | (6,070) | 50,544 | 62,711 | (6,904) | 55,807 |
| 3,207 | (306) | 2,901 | – | – | – |
| 59,821 | (6,376) | 53,445 | 62,711 | (6,904) | 55,807 |
| 23,730 | (1,642) | 22,088 | 24,043 | (1,797) | 22,246 |
| (1,143) | 234 | (909) | (1,485) | 269 | (1,216) |
| 22,587 | (1,408) | 21,179 | 22,558 | (1,528) | 21,030 |
| (10,262) | 229 | (10,033) | (10,648) | 321 | (10,328) |
| (11,704) | 1,078 | (10,625) | (12,570) | 1,252 | (11,318) |
| (21,966) | 1,307 | (20,658) | (23,218) | 1,573 | (21,646) |
| 1,708 | (297) | 1,411 | (936) | 171 | (765) |
| – | – | – | 145 | (70) | 75 |
| 62,151 | (6,774) | 55,377 | 61,259 | (6,758) | 54,502 |
| (3,505) | 312 | (3,193) | (3,215) | 292 | (2,924) |
| 58,646 | (6,462) | 52,184 | 58,044 | (6,466) | 51,578 |
| B | Condensed Consolidated Interim Financial Statements | |
|---|---|---|
| 49 Consolidated Balance Sheets | 51 Consolidated Statements of |
50 Consolidated Income Statements
Comprehensive Income
in Equity
| € mn | as of 30 September 2014 |
as of 31 December 2013 |
|---|---|---|
| Aggregate policy reserves1 | 391,125 | 365,519 |
| Reserves for premium refunds | 56,414 | 37,772 |
| Other insurance reserves | 998 | 781 |
| Total | 448,537 | 404,072 |
1 Includes discounted loss reserves of € 3,505 mn (2013: € 3,207 mn) in the Property-Casualty business segment.
| € mn | ||
|---|---|---|
| as of 30 September 2014 |
as of 31 December 2013 |
|
| Payables | ||
| Policyholders | 4,003 | 4,911 |
| Reinsurance | 1,299 | 1,170 |
| Agents | 1,551 | 1,604 |
| Subtotal | 6,853 | 7,685 |
| Payables for social security | 424 | 395 |
| Tax payables | ||
| Income taxes | 2,046 | 2,580 |
| Other taxes | 1,422 | 1,269 |
| Subtotal | 3,469 | 3,849 |
| Accrued interest and rent | 646 | 681 |
| Unearned income | ||
| Interest and rent | 24 | 16 |
| Other | 293 | 261 |
| Subtotal | 317 | 277 |
| Provisions | ||
| Pensions and similar obligations | 9,148 | 7,594 |
| Employee related | 2,527 | 2,104 |
| Share-based compensation plans | 530 | 685 |
| Restructuring plans | 107 | 214 |
| Loan commitments | 21 | 42 |
| Contingent losses from non-insurance business | 141 | 131 |
| Other provisions | 1,579 | 1,617 |
| Subtotal | 14,054 | 12,386 |
| Deposits retained for reinsurance ceded | 1,875 | 1,874 |
| Derivative financial instruments used for hedging that meet the criteria for hedge accounting and firm commitments |
285 | 158 |
| Financial liabilities for puttable equity instruments | 2,375 | 2,612 |
| Other liabilities | 7,506 | 6,514 |
| Total | 37,803 | 36,431 |
| € mn | ||
|---|---|---|
| as of 30 September |
as of 31 December |
|
| 2014 | 2013 | |
| Allianz SE1 | ||
| Senior bonds | 6,647 | 6,581 |
| Money market securities | 1,029 | 869 |
| Subtotal | 7,676 | 7,450 |
| Banking subsidiaries | ||
| Senior bonds | 510 | 580 |
| Subtotal | 510 | 580 |
| Total | 8,186 | 8,030 |
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 30 September 2014 |
as of 31 December 2013 |
|
| Shareholders' equity | ||
| Issued capital | 1,169 | 1,169 |
| Capital reserves | 27,701 | 27,701 |
| Retained earnings1 | 19,184 | 17,786 |
| Foreign currency translation adjustments | (2,234) | (3,313) |
| Unrealized gains and losses (net)2 | 12,380 | 6,742 |
| Subtotal | 58,199 | 50,083 |
| Non-controlling interests | 2,890 | 2,765 |
| Total | 61,089 | 52,849 |
1 As of 30 September 2014, includes € (215) mn (2013: € (220) mn) related to treasury shares. 2 As of 30 September 2014, includes € 252 mn (2013: € 203 mn) related to cash flow hedges.
| € mn | ||
|---|---|---|
| as of 30 September |
as of 31 December |
|
| 2014 | 2013 | |
| Allianz SE1 | ||
| Subordinated bonds2 | 11,332 | 10,856 |
| Subtotal | 11,332 | 10,856 |
| Banking subsidiaries | ||
| Subordinated bonds | 251 | 254 |
| Subtotal | 251 | 254 |
| All other subsidiaries | ||
| Subordinated bonds | 400 | 399 |
| Hybrid equity | 45 | 45 |
| Subtotal | 445 | 444 |
| Total | 12,028 | 11,554 |
1 Includes subordinated bonds issued by Allianz Finance II B.V. and guaranteed by Allianz SE.
2 Change due to redemption of a € 1.5 bn bond and the issuance of a CHF 0.5 bn bond in the first quarter of 2014, and due to the issuance of a € 1,5 bn bond in the third quarter of 2014.
49 Consolidated Balance Sheets
50 Consolidated Income Statements
51 Consolidated Statements of Comprehensive Income
52 Consolidated Statements of Changes in Equity
53 Consolidated Statements of Cash Flows 55 Notes
| € mn three months ended 30 September |
Property Casualty |
Life/Health | Consoli dation |
Group |
|---|---|---|---|---|
| 2014 | ||||
| Premiums written | ||||
| Direct | 10,326 | 5,948 | – | 16,274 |
| Assumed | 928 | 208 | (17) | 1,119 |
| Subtotal | 11,254 | 6,156 | (17) | 17,393 |
| Ceded | (959) | (175) | 17 | (1,118) |
| Net | 10,294 | 5,981 | – | 16,275 |
| Change in unearned premiums |
||||
| Direct | 1,087 | (125) | – | 962 |
| Assumed | (126) | (1) | – | (127) |
| Subtotal | 961 | (126) | – | 835 |
| Ceded | (76) | 1 | – | (75) |
| Net | 885 | (125) | – | 760 |
| Premiums earned | ||||
| Direct | 11,413 | 5,824 | – | 17,236 |
| Assumed | 802 | 206 | (17) | 992 |
| Subtotal | 12,215 | 6,030 | (17) | 18,228 |
| Ceded | (1,035) | (174) | 17 | (1,193) |
| Net | 11,180 | 5,856 | – | 17,035 |
| 2013 | ||||
| Premiums written | ||||
| Direct | 9,829 | 5,793 | – | 15,622 |
| Assumed | 821 | 266 | (16) | 1,071 |
| Subtotal | 10,650 | 6,059 | (16) | 16,693 |
| Ceded | (859) | (136) | 16 | (978) |
| Net | 9,792 | 5,923 | – | 15,715 |
| Change in unearned premiums |
||||
| Direct | 1,175 | (54) | – | 1,121 |
| Assumed | (61) | (1) | (1) | (63) |
| Subtotal | 1,114 | (55) | (1) | 1,058 |
| Ceded | (137) | 1 | 1 | (136) |
| Net | 977 | (54) | – | 922 |
| Premiums earned | ||||
| Direct | 11,004 | 5,739 | – | 16,743 |
| Assumed | 760 | 264 | (17) | 1,008 |
| Subtotal | 11,764 | 6,004 | (17) | 17,751 |
| Ceded | (996) | (135) | 17 | (1,114) |
| Net | 10,768 | 5,869 | – | 16,637 |
| € mn | |||||
|---|---|---|---|---|---|
| three months ended 30 September | nine months ended 30 September | ||||
| 2014 | 2013 | 2014 | 2013 | ||
| Interest from held-to-maturity investments | 41 | 45 | 124 | 137 | |
| Dividends from available-for-sale investments | 325 | 259 | 1,216 | 1,082 | |
| Interest from available-for-sale investments | 3,436 | 3,262 | 10,095 | 9,878 | |
| Share of earnings from investments in associates and joint ventures | 22 | 64 | 115 | 111 | |
| Rent from real estate held for investment | 207 | 197 | 629 | 590 | |
| Interest from loans to banks and customers | 1,211 | 1,263 | 3,646 | 3,807 | |
| Other interest | 57 | 39 | 150 | 104 | |
| Total | 5,299 | 5,129 | 15,976 | 15,709 | |
| Property Casualty |
Life/Health | Asset Management |
Corporate and Other |
Consolidation | Group |
|---|---|---|---|---|---|
| (154) | (1,514) | – | (71) | – | (1,739) |
| 1 | 18 | – | 3 | – | 22 |
| (1) | (16) | – | – | – | (17) |
| 142 | 1,288 | 2 | 70 | – | 1,502 |
| (11) | (224) | 2 | 3 | (1) | (231) |
| 11 | 126 | 1 | 52 | – | 190 |
| 2 | 119 | 27 | – | – | 148 |
| – | (56) | (25) | – | – | (81) |
| (53) | (720) | (2) | (44) | – | (820) |
| (41) | (531) | 1 | 8 | – | (563) |
For the three months ended 30 September 2014, income and expenses from financial assets and liabilities held for trading (net) in the business segment Life/Health includes expenses of € 1,519 mn (2013: income of € 117 mn) from derivative financial instruments. Included in this are expenses of € 1,160 mn (2013: income of € 320 mn) from
financial derivative positions of German entities, of which income of € 176 mn (2013: expenses of € 11 mn) relates to duration management, income of € 13 mn (2013: expenses of € 8 mn) relates to protection against equity fluctuations, and expenses of € 1,323 mn (2013: income of € 343 mn) relate to protection against foreign exchange rate fluctuations. Also included are expenses related to fixed-indexed annuity products and guaranteed benefits under unit-linked contracts of € 260 mn (2013: € 222 mn) from U.S. entities.
49 Consolidated Balance Sheets 50 Consolidated Income Statements 51 Consolidated Statements of Comprehensive Income
in Equity
52 Consolidated Statements of Changes
53 Consolidated Statements of Cash Flows 55 Notes
For the three months ended 30 September 2014, income and expenses from financial assets and liabilities designated at fair value through income (net) in the business segment Life/Health includes income from equity investments of € 6 mn (2013: € 80 mn) and income from debt investments of € 12 mn (2013: € 38 mn).
Foreign currency gains and losses are reported within income from financial assets and liabilities carried at fair value through income (net). These foreign currency gains and losses arise subsequent to initial recognition on all assets and liabilities denominated in a foreign currency that are monetary items and not measured at fair value through profit or loss. The Allianz Group uses freestanding derivatives, included in the line item income (expenses) from financial assets and liabilities held for trading (net), to hedge against foreign currency fluctuations. For these derivatives, expenses in the amount of € 1,567 mn (2013: income in the amount of € 442 mn) were recognized for the three months ended 30 September 2014.
| € mn | ||||||
|---|---|---|---|---|---|---|
| nine months ended 30 September | Property Casualty |
Life/Health | Asset Management |
Corporate and Other |
Consolidation | Group |
| 2014 | ||||||
| Income (expenses) from financial assets and liabilities held for trading (net) | (231) | (2,178) | (1) | (62) | (2) | (2,474) |
| Income (expenses) from financial assets and liabilities designated at fair value through income (net) |
2 | 161 | 3 | 5 | (1) | 169 |
| Income (expenses) from financial liabilities for puttable equity instruments (net) | – | (94) | – | – | – | (94) |
| Foreign currency gains and losses (net) | 172 | 1,557 | 3 | 63 | – | 1,795 |
| Total | (58) | (555) | 5 | 6 | (3) | (604) |
| 2013 | ||||||
| Income (expenses) from financial assets and liabilities held for trading (net) | (3) | (685) | 1 | (4) | 2 | (689) |
| Income (expenses) from financial assets and liabilities designated at fair value through income (net) |
26 | 203 | 45 | 1 | (1) | 274 |
| Income (expenses) from financial liabilities for puttable equity instruments (net) | (19) | (97) | (37) | – | – | (153) |
| Foreign currency gains and losses (net) | (58) | (874) | (1) | 13 | – | (920) |
| Total | (54) | (1,453) | 8 | 10 | 1 | (1,489) |
| € mn | ||||
|---|---|---|---|---|
| three months ended 30 September |
nine months ended 30 September |
|||
| 2014 | 2013 | 2014 | 2013 | |
| Realized gains | ||||
| Available-for-sale investments | ||||
| Equity securities | 339 | 358 | 1,176 | 1,503 |
| Debt securities | 571 | 456 | 1,545 | 1,590 |
| Subtotal | 910 | 814 | 2,721 | 3,093 |
| Investments in associates and joint ventures1 |
7 | – | 27 | 38 |
| Real estate held for investment | 42 | 21 | 125 | 100 |
| Loans and advances to banks and customers |
41 | 108 | 223 | 294 |
| Non-current assets and assets and liabilities of disposal groups classified as held for sale |
33 | – | 34 | 12 |
| Subtotal | 1,033 | 944 | 3,130 | 3,537 |
| Realized losses | ||||
| Available-for-sale investments | ||||
| Equity securities | (45) | (69) | (96) | (160) |
| Debt securities | (94) | (182) | (198) | (337) |
| Subtotal | (139) | (252) | (294) | (497) |
| Investments in associates and joint ventures2 |
(1) | (2) | (6) | (5) |
| Real estate held for investment | 1 | 1 | (4) | (2) |
| Loans and advances to banks and customers |
– | – | (1) | (2) |
| Non-current assets and assets and liabilities of disposal groups classified as held for sale |
– | – | – | (3) |
| Subtotal | (140) | (254) | (305) | (509) |
| Total | 893 | 690 | 2,825 | 3,028 |
1 For the three and the nine months ended 30 September 2014, includes realized gains from the disposal of subsidiaries and businesses of € 1 mn (2013: € – mn) and € 1 mn (2013: € 38 mn), respectively.
2 For the three and the nine months ended 30 September 2014, includes realized losses from the disposal of subsidiaries of € 1 mn (2013: € – mn) and € 1 mn (2013: € – mn), respectively.
| € mn | ||||
|---|---|---|---|---|
| three months ended 30 September |
nine months ended 30 September |
|||
| 2014 | 2013 | 2014 | 2013 | |
| Property-Casualty | ||||
| Credit and assistance business | 206 | 190 | 595 | 570 |
| Service agreements | 141 | 127 | 360 | 345 |
| Subtotal | 347 | 317 | 955 | 915 |
| Life/Health | ||||
| Service agreements | 26 | 17 | 77 | 56 |
| Investment advisory | 237 | 149 | 675 | 418 |
| Other | – | – | 1 | – |
| Subtotal | 263 | 166 | 752 | 474 |
| Asset Management | ||||
| Management fees | 1,772 | 1,827 | 5,128 | 5,525 |
| Loading and exit fees | 165 | 177 | 525 | 551 |
| Performance fees | 40 | 42 | 126 | 396 |
| Other | 6 | 12 | 37 | 51 |
| Subtotal | 1,984 | 2,059 | 5,817 | 6,524 |
| Corporate and Other | ||||
| Service agreements | 19 | 24 | 52 | 49 |
| Investment advisory and banking activities |
163 | 146 | 474 | 464 |
| Subtotal | 181 | 170 | 526 | 513 |
| Consolidation | (185) | (128) | (514) | (409) |
| Total | 2,590 | 2,583 | 7,536 | 8,016 |
| € mn | three months ended 30 September |
nine months ended 30 September |
||
|---|---|---|---|---|
| 2014 | 2013 | 2014 | 2013 | |
| Realized gains from disposals of real estate held for own use |
– | 3 | 23 | 20 |
| Income from alternative investments |
38 | 39 | 136 | 120 |
| Other | (1) | 1 | 2 | 4 |
| Total | 37 | 42 | 160 | 144 |
51 Consolidated Statements of Comprehensive Income
B Condensed Consolidated Interim Financial Statements
49 Consolidated Balance Sheets 50 Consolidated Income Statements
| € mn | ||||
|---|---|---|---|---|
| three months ended 30 September |
nine months ended 30 September |
|||
| 2014 | 2013 | 2014 | 2013 | |
| Income | ||||
| Sales and service revenues | 170 | 181 | 513 | 543 |
| Subtotal | 170 | 181 | 513 | 543 |
| Expenses | ||||
| Cost of goods sold | (51) | (54) | (158) | (163) |
| General and administrative expenses |
(121) | (125) | (353) | (375) |
| Interest expenses | (18) | (7) | (33) | (24) |
| Subtotal | (189) | (186) | (544) | (562) |
| Consolidation1 | 9 | 2 | 15 | 7 |
| Total | (11) | (3) | (16) | (11) |
1 This consolidation effect results from the deferred policyholder participation, recognized on the result from fully consolidated private equity investments within operating profit in the Life/Health business segment, that was reclassified into expenses from fully consolidated private equity investments in nonoperating profit to ensure a consistent presentation of the Allianz Group's operating profit.
55 Notes
53 Consolidated Statements of Cash Flows
52 Consolidated Statements of Changes
in Equity
| € mn three months ended 30 September |
Property Casualty |
Life/Health | Consoli dation |
Group |
|---|---|---|---|---|
| 2014 | ||||
| Gross | ||||
| Claims and insurance benefits paid |
(7,403) | (5,151) | 12 | (12,542) |
| Change in reserves for loss and loss adjustment expenses |
(372) | 2 | 2 | (368) |
| Subtotal | (7,775) | (5,149) | 14 | (12,910) |
| Ceded | ||||
| Claims and insurance benefits paid |
413 | 131 | (11) | 534 |
| Change in reserves for loss and loss adjustment |
||||
| expenses | (4) | 14 | (2) | 8 |
| Subtotal | 409 | 145 | (12) | 542 |
| Net | ||||
| Claims and insurance benefits paid |
(6,990) | (5,020) | 1 | (12,008) |
| Change in reserves for loss and loss adjustment expenses |
(376) | 16 | 1 | (359) |
| Total | (7,366) | (5,004) | 2 | (12,368) |
| 2013 | ||||
| Gross Claims and insurance benefits paid |
(7,594) | (4,636) | 9 | (12,221) |
| Change in reserves for loss and loss adjustment |
||||
| expenses | 57 | (98) | (6) | (46) |
| Subtotal Ceded |
(7,537) | (4,734) | 3 | (12,268) |
| Claims and insurance benefits paid |
437 | 93 | (8) | 523 |
| Change in reserves for loss and loss adjustment |
||||
| expenses | (134) | (2) | 6 | (130) |
| Subtotal | 303 | 92 | (1) | 393 |
| Net | ||||
| Claims and insurance benefits paid |
(7,157) | (4,543) | 1 | (11,698) |
| Change in reserves for loss and loss adjustment |
||||
| expenses | (77) | (100) | 1 | (176) |
| Total | (7,234) | (4,642) | 2 | (11,874) |
| nine months ended Property Consoli 30 September Casualty Life/Health dation Group 2014 Gross Claims and insurance benefits paid (21,966) (15,406) 33 (37,339) Change in reserves for loss and loss adjustment expenses (622) (247) 4 (865) Subtotal (22,587) (15,653) 37 (38,204) Ceded Claims and insurance benefits paid 1,307 359 (29) 1,638 Change in reserves for loss and loss adjustment expenses 101 36 (4) 132 Subtotal 1,408 395 (33) 1,770 Net Claims and insurance benefits paid (20,658) (15,047) 4 (35,701) Change in reserves for loss and loss adjustment expenses (521) (211) (1) (733) Total (21,179) (15,258) 3 (36,434) 2013 Gross Claims and insurance benefits paid (23,218) (14,634) 23 (37,829) Change in reserves for loss and loss adjustment expenses 660 (152) (5) 503 Subtotal (22,558) (14,786) 17 (37,327) Ceded Claims and insurance benefits paid 1,573 345 (19) 1,899 Change in reserves for loss and loss adjustment expenses (45) (17) 6 (56) Subtotal 1,528 327 (12) 1,843 Net Claims and insurance benefits paid (21,646) (14,289) 4 (35,931) Change in reserves for loss and loss adjustment expenses 615 (170) 1 447 Total (21,030) (14,459) 5 (35,484) |
|||
|---|---|---|---|
| € mn | |||
| € mn three months ended 30 September |
Property Casualty |
Life/Health | Consoli dation |
Group |
|---|---|---|---|---|
| 2014 | ||||
| Gross | ||||
| Aggregate policy reserves | (76) | (1,631) | (1) | (1,709) |
| Other insurance reserves | 1 | (54) | – | (53) |
| Expenses for premium refunds |
(94) | (1,547) | (75) | (1,716) |
| Subtotal | (170) | (3,232) | (76) | (3,478) |
| Ceded | ||||
| Aggregate policy reserves | 1 | 50 | – | 51 |
| Other insurance reserves | – | 2 | – | 2 |
| Expenses for premium refunds |
1 | 4 | – | 5 |
| Subtotal | 2 | 57 | – | 59 |
| Net | ||||
| Aggregate policy reserves | (75) | (1,581) | (1) | (1,657) |
| Other insurance reserves | 1 | (52) | – | (51) |
| Expenses for premium refunds |
(93) | (1,542) | (75) | (1,711) |
| Total | (168) | (3,175) | (76) | (3,419) |
| 2013 | ||||
| Gross | ||||
| Aggregate policy reserves | (59) | (2,065) | (1) | (2,125) |
| Other insurance reserves | – | (36) | – | (36) |
| Expenses for premium refunds |
(48) | (1,092) | (2) | (1,142) |
| Subtotal | (107) | (3,193) | (3) | (3,303) |
| Ceded | ||||
| Aggregate policy reserves | 1 | 54 | – | 54 |
| Other insurance reserves | – | 3 | – | 3 |
| Expenses for premium refunds |
(1) | (1) | – | (2) |
| Subtotal | – | 55 | – | 55 |
| Net | ||||
| Aggregate policy reserves | (59) | (2,011) | (1) | (2,071) |
| Other insurance reserves | – | (33) | – | (33) |
| Expenses for premium refunds |
(48) | (1,094) | (2) | (1,144) |
| Total | (107) | (3,138) | (3) | (3,248) |
| B | Condensed Consolidated Interim Financial Statements | |||
|---|---|---|---|---|
| 49 Consolidated Balance Sheets | 51 Consolidated Statements of | 52 Consolidated Statements of Changes | 53 Consolidated Statements of Cash Flows | |
| 50 Consolidated Income Statements | Comprehensive Income | in Equity | 55 Notes |
| € mn nine months ended 30 September |
Property Casualty |
Life/Health | Consoli dation |
Group |
|---|---|---|---|---|
| 2014 | ||||
| Gross | ||||
| Aggregate policy reserves | (205) | (5,333) | (2) | (5,540) |
| Other insurance reserves | (3) | (144) | – | (147) |
| Expenses for premium refunds |
(225) | (4,671) | (81) | (4,977) |
| Subtotal | (433) | (10,148) | (83) | (10,664) |
| Ceded | ||||
| Aggregate policy reserves | 4 | 184 | 1 | 188 |
| Other insurance reserves | – | 9 | – | 9 |
| Expenses for premium refunds |
1 | 10 | – | 11 |
| Subtotal | 5 | 202 | – | 208 |
| Net | ||||
| Aggregate policy reserves | (201) | (5,150) | (1) | (5,352) |
| Other insurance reserves | (3) | (135) | – | (138) |
| Expenses for premium refunds |
(224) | (4,661) | (81) | (4,967) |
| Total | (428) | (9,946) | (83) | (10,457) |
| 2013 | ||||
| Gross Aggregate policy reserves |
||||
| Other insurance reserves | (170) (2) |
(5,895) (87) |
(3) – |
(6,068) (89) |
| Expenses for premium refunds |
(147) | (4,189) | (29) | (4,364) |
| Subtotal | (319) | (10,171) | (31) | (10,521) |
| Ceded | ||||
| Aggregate policy reserves | 2 | 95 | – | 97 |
| Other insurance reserves | (1) | 6 | – | 5 |
| Expenses for premium refunds |
(1) | 3 | – | 2 |
| Subtotal | 1 | 103 | – | 104 |
| Net | ||||
| Aggregate policy reserves | (168) | (5,801) | (3) | (5,971) |
| Other insurance reserves | (3) | (81) | – | (83) |
| Expenses for premium refunds |
(148) | (4,186) | (29) | (4,363) |
| Total | (318) | (10,068) | (31) | (10,417) |
| € mn | |||||
|---|---|---|---|---|---|
| three months ended 30 September |
nine months ended 30 September |
||||
| 2014 | 2013 | 2014 | 2013 | ||
| Liabilities to banks and customers |
(60) | (62) | (183) | (196) | |
| Deposits retained on reinsurance ceded |
(12) | (8) | (34) | (30) | |
| Certificated liabilities | (72) | (68) | (210) | (204) | |
| Subordinated liabilities | (146) | (142) | (428) | (486) | |
| Other | (25) | (20) | (70) | (69) | |
| Total | (315) | (300) | (925) | (986) | |
| € mn | three months ended 30 September |
nine months ended 30 September |
|||
|---|---|---|---|---|---|
| 2014 | 2013 | 2014 | 2013 | ||
| Additions to allowances including direct impairments |
(30) | (36) | (103) | (116) | |
| Amounts released | 18 | 15 | 54 | 54 | |
| Recoveries on loans previously impaired |
5 | 4 | 19 | 15 | |
| Total | (7) | (18) | (31) | (47) | |
| 2014 | 2013 | 2014 | 2013 | |
|---|---|---|---|---|
| (113) | (46) | (301) | (305) | |
| (31) | (11) | (275) | (36) | |
| (144) | (57) | (576) | (341) | |
| – | (81) | – | (81) | |
| (21) | (16) | (22) | (38) | |
| (1) | (5) | (3) | (17) | |
| (3) | (31) | (5) | (31) | |
| (168) | (189) | (605) | (507) | |
| – | 10 | – | 11 | |
| 12 | 17 | 12 | 17 | |
| – | 1 | 1 | 1 | |
| 12 | 27 | 13 | 29 | |
| (156) | (162) | (592) | (478) | |
| three months ended 30 September |
nine months ended 30 September |
| € mn | three months ended 30 September |
nine months ended 30 September |
||
|---|---|---|---|---|
| 2014 | 2013 | 2014 | 2013 | |
| Investment management expenses |
(158) | (129) | (409) | (387) |
| Depreciation of real estate held for investment |
(59) | (56) | (170) | (157) |
| Other expenses from real estate held for investment |
(45) | (42) | (113) | (109) |
| Total | (261) | (227) | (693) | (653) |
| € mn | ||||
|---|---|---|---|---|
| three months ended 30 September |
nine months ended 30 September |
|||
| 2014 | 2013 | 2014 | 2013 | |
| Property-Casualty | ||||
| Acquisition costs | ||||
| Incurred | (2,384) | (2,307) | (7,479) | (7,380) |
| Commissions and profit received on reinsurance business ceded |
105 | 132 | 298 | 352 |
| Deferrals of acquisition costs | 1,259 | 1,334 | 4,520 | 4,477 |
| Gross amortization of deferred acquisition costs |
(1,382) | (1,470) | (4,316) | (4,240) |
| Subtotal | (2,402) | (2,311) | (6,977) | (6,791) |
| Administrative expenses | (687) | (665) | (2,597)1 | (2,070) |
| Subtotal | (3,089) | (2,976) | (9,574) | (8,861) |
| Life/Health | ||||
| Acquisition costs | ||||
| Incurred | (1,264) | (1,041) | (3,810) | (3,297) |
| Commissions and profit received on reinsurance business ceded |
26 | 17 | 72 | 46 |
| Deferrals of acquisition costs | 808 | 633 | 2,556 | 2,100 |
| Gross amortization of deferred acquisition costs |
(661) | (556) | (1,818) | (1,832) |
| Subtotal | (1,091) | (947) | (3,001) | (2,982) |
| Administrative expenses | (397) | (375) | (1,196) | (1,066) |
| Subtotal | (1,488) | (1,322) | (4,197) | (4,048) |
| Asset Management | ||||
| Personnel expenses | (582) | (601) | (1,749)1 | (1,961) |
| Non-personnel expenses | (342) | (348) | (991) | (1,046) |
| Subtotal | (924) | (949) | (2,740) | (3,007) |
| Corporate and Other | ||||
| Administrative expenses | (353) | (327) | (266)1 | (968) |
| Subtotal | (353) | (327) | (266) | (968) |
| Consolidation | 15 | (7) | (96)1 | 12 |
| Total | (5,839) | (5,581) | (16,873) | (16,872) |
1 Including one-off effect from pension revaluation. Please refer to note 4 for further details.
| 49 Consolidated Balance Sheets 51 Consolidated Statements of 52 Consolidated Statements of Changes Comprehensive Income in Equity |
B | Condensed Consolidated Interim Financial Statements | ||
|---|---|---|---|---|
| 50 Consolidated Income Statements | 53 Consolidated Statements of Cash Flows 55 Notes |
| € mn | ||||
|---|---|---|---|---|
| three months ended 30 September |
nine months ended 30 September |
|||
| 2014 | 2013 | 2014 | 2013 | |
| Property-Casualty | ||||
| Credit and assistance business | (219) | (188) | (621) | (560) |
| Service agreements | (103) | (105) | (273) | (280) |
| Investment advisory | – | (1) | – | (2) |
| Subtotal | (323) | (295) | (894) | (843) |
| Life/Health | ||||
| Service agreements | (10) | (6) | (31) | (34) |
| Investment advisory | (100) | (54) | (258) | (157) |
| Subtotal | (110) | (61) | (290) | (191) |
| Asset Management | ||||
| Commissions | (336) | (337) | (956) | (1,062) |
| Other | (31) | (24) | (127) | (58) |
| Subtotal | (367) | (361) | (1,083) | (1,121) |
| Corporate and Other | ||||
| Service agreements | (73) | (68) | (222) | (178) |
| Investment advisory and banking activities |
(72) | (58) | (216) | (192) |
| Subtotal | (145) | (126) | (437) | (369) |
| Consolidation | 97 | 55 | 244 | 169 |
| Total | (847) | (788) | (2,459) | (2,354) |
| € mn | three months ended 30 September |
nine months ended 30 September |
||
|---|---|---|---|---|
| 2014 | 2013 | 2014 | 2013 | |
| Realized losses from disposals of real estate held for own use |
– | – | (7) | (1) |
| Expenses from alternative investments |
(28) | (23) | (75) | (66) |
| Expenses from non-current assets and assets and liabilities of disposal groups classfied as held for sale |
(17) | – | (18) | – |
| Other | (1) | (5) | (1) | (14) |
| Total | (46) | (28) | (101) | (82) |
| € mn | three months ended 30 September |
nine months ended 30 September |
||||
|---|---|---|---|---|---|---|
| 2014 | 2013 | 2014 | 2013 | |||
| Current income taxes | (487) | (650) | (2,278) | (2,118) | ||
| Deferred income taxes | (145) | (96) | (96) | (329) | ||
| Total | (632) | (746) | (2,373) | (2,447) |
For the three and the nine months ended 30 September 2014 and 2013, 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 30 September |
nine months ended 30 September |
|||
| 2014 | 2013 | 2014 | 2013 | |
| Items that may be reclassified to profit or loss in future periods |
||||
| Foreign currency translation adjustments |
70 | (32) | 83 | (9) |
| Available-for-sale investments | (491) | 4 | (2,307) | 1,437 |
| Cash flow hedges | (5) | 14 | (24) | 21 |
| Share of other comprehensive income of associates |
(1) | 1 | (2) | 6 |
| Miscellaneous | (29) | (48) | (56) | 84 |
| Items that may never be reclassified to profit or loss |
||||
| Actuarial gains (losses) on defined benefit plans |
188 | 33 | 484 | 34 |
| Total | (268) | (27) | (1,823) | 1,572 |
The following table compares the carrying amount with the fair value of the Allianz Group's financial assets and financial liabilities:
€ mn
| as of 30 September 2014 | as of 31 December 2013 | |||
|---|---|---|---|---|
| Carrying amount | Fair value | Carrying amount | Fair value | |
| Financial assets | ||||
| Cash and cash equivalents | 11,658 | 11,658 | 11,207 | 11,207 |
| Financial assets held for trading | 2,099 | 2,099 | 2,512 | 2,512 |
| Financial assets designated at fair value through income | 4,063 | 4,063 | 4,148 | 4,148 |
| Available-for-sale investments | 451,643 | 451,643 | 392,233 | 392,233 |
| Held-to-maturity investments | 4,008 | 4,763 | 4,140 | 4,647 |
| Investments in associates and joint ventures | 3,213 | 3,888 | 3,098 | 3,597 |
| Real estate held for investment | 11,234 | 16,065 | 10,783 | 15,625 |
| Loans and advances to banks and customers | 116,797 | 136,916 | 116,800 | 129,528 |
| Financial assets for unit-linked contracts | 90,790 | 90,790 | 81,064 | 81,064 |
| Derivative financial instruments and firm commitments included in other assets | 290 | 290 | 75 | 75 |
| Real estate held for own use | 2,507 | 3,618 | 2,423 | 3,626 |
| Financial liabilities | ||||
| Financial liabilities held for trading | 7,580 | 7,580 | 6,013 | 6,013 |
| Liabilities to banks and customers | 22,749 | 23,127 | 23,109 | 23,282 |
| Financial liabilities for unit-linked contracts | 90,790 | 90,790 | 81,064 | 81,064 |
| Derivative financial instruments and firm commitments included in other liabilities | 285 | 285 | 158 | 158 |
| Financial liabilities for puttable equity instruments | 2,375 | 2,375 | 2,612 | 2,612 |
| Certificated liabilities | 8,186 | 9,100 | 8,030 | 8,576 |
| Subordinated liabilities | 12,028 | 13,015 | 11,554 | 12,323 |
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.
Interim Report Third Quarter and First Nine Months of 2014 Allianz Group 99
If the fair value cannot be measured reliably, amortized cost is used as a proxy for determining fair values. As of 30 September 2014, fair values could not be reliably measured for equity investments with carrying amounts totaling € 220 mn(31 December 2013: € 214 mn). These investments are primarily investments in privately held corporations and partnerships.
51 Consolidated Statements of 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:
49 Consolidated Balance Sheets
50 Consolidated Income Statements
B Condensed Consolidated Interim Financial Statements
The following tables present the fair value hierarchy for financial instruments carried at fair value in the consolidated balance sheets as of 30 September 2014 and 31 December 2013.
| € mn | ||||
|---|---|---|---|---|
| Level 1 – Quoted prices in active markets |
Level 2 – Market observable inputs |
Level 3 – Non-market observable inputs |
Total fair value | |
| Financial assets | ||||
| Financial assets carried at fair value through income | ||||
| Financial assets held for trading | ||||
| Debt securities | 113 | 308 | – | 422 |
| Equity securities | 42 | 121 | 15 | 178 |
| Derivative financial instruments | 227 | 1,226 | 46 | 1,499 |
| Subtotal | 381 | 1,655 | 61 | 2,099 |
| Financial assets designated at fair value through income | ||||
| Debt securities | 1,076 | 1,146 | 1 | 2,224 |
| Equity securities | 1,725 | 4 | 110 | 1,840 |
| Subtotal | 2,802 | 1,150 | 111 | 4,063 |
| Subtotal | 3,183 | 2,806 | 172 | 6,162 |
| Available-for-sale investments | ||||
| Government and agency mortgage-backed securities (residential and commercial) | 43 | 3,487 | – | 3,530 |
| Corporate mortgage-backed securities (residential and commercial) | – | 13,677 | 35 | 13,712 |
| Other asset-backed securities | 277 | 3,827 | 199 | 4,302 |
| Government and government agency bonds | 28,603 | 156,229 | 58 | 184,890 |
| Corporate bonds | 16,097 | 185,194 | 4,750 | 206,042 |
| Other debt securities | 259 | 1,759 | 657 | 2,674 |
| Equity securities | 29,341 | 815 | 6,336 | 36,492 |
| Subtotal | 74,619 | 364,988 | 12,035 | 451,643 |
| Financial assets for unit-linked contracts | 88,069 | 2,551 | 170 | 90,790 |
| Derivative financial instruments and firm commitments included in other assets | – | 289 | – | 290 |
| Total | 165,871 | 370,634 | 12,377 | 548,885 |
| Financial liabilities | ||||
| Financial liabilities held for trading | ||||
| Derivative financial instruments | 40 | 1,947 | 5,589 | 7,576 |
| Other trading liabilities | – | 3 | – | 3 |
| Subtotal | 40 | 1,950 | 5,589 | 7,580 |
| Financial liabilities for unit-linked contracts | 88,069 | 2,551 | 170 | 90,790 |
| Derivative financial instruments and firm commitments included in other liabilities | 1 | 284 | – | 285 |
| Financial liabilities for puttable equity instruments | 2,355 | 20 | – | 2,375 |
| Total | 90,464 | 4,804 | 5,759 | 101,029 |
| B | Condensed Consolidated Interim Financial Statements | |||
|---|---|---|---|---|
| 49 Consolidated Balance Sheets | 51 Consolidated Statements of | 52 Consolidated Statements of Changes | 53 Consolidated Statements of Cash Flows | |
| 50 Consolidated Income Statements | Comprehensive Income | in Equity | 55 Notes |
€ mn
| Level 1 – Quoted prices in active markets |
Level 2 – Market observable inputs |
Level 3 – Non-market observable inputs |
Total fair value | |
|---|---|---|---|---|
| Financial assets | ||||
| Financial assets carried at fair value through income | ||||
| Financial assets held for trading | ||||
| Debt securities | – | 360 | – | 360 |
| Equity securities | 22 | 103 | 14 | 139 |
| Derivative financial instruments | 284 | 1,691 | 38 | 2,013 |
| Subtotal | 306 | 2,154 | 52 | 2,512 |
| Financial assets designated at fair value through income | ||||
| Debt securities | – | 2,278 | 1 | 2,278 |
| Equity securities | 1,867 | – | 3 | 1,870 |
| Subtotal | 1,867 | 2,278 | 4 | 4,148 |
| Subtotal | 2,173 | 4,432 | 56 | 6,660 |
| Available-for-sale investments | ||||
| Government and agency mortgage-backed securities (residential and commercial) | – | 2,602 | – | 2,602 |
| Corporate mortgage-backed securities (residential and commercial) | – | 11,800 | 33 | 11,833 |
| Other asset-backed securities | – | 3,418 | 212 | 3,630 |
| Government and government agency bonds | 35,570 | 127,324 | 56 | 162,950 |
| Corporate bonds | 18,939 | 154,080 | 3,149 | 176,168 |
| Other debt securities | – | 1,777 | 773 | 2,550 |
| Equity securities | 26,013 | 765 | 5,722 | 32,499 |
| Subtotal | 80,522 | 301,766 | 9,945 | 392,233 |
| Financial assets for unit-linked contracts | 78,230 | 2,655 | 179 | 81,064 |
| Derivative financial instruments and firm commitments included in other assets | – | 75 | – | 75 |
| Total | 160,925 | 308,928 | 10,180 | 480,033 |
| Financial liabilities | ||||
| Financial liabilities held for trading | ||||
| Derivative financial instruments | 136 | 1,447 | 4,427 | 6,010 |
| Other trading liabilities | – | 3 | – | 3 |
| Subtotal | 136 | 1,450 | 4,427 | 6,013 |
| Financial liabilities for unit-linked contracts | 78,230 | 2,655 | 179 | 81,064 |
| Derivative financial instruments and firm commitments included in other liabilities | – | 158 | – | 158 |
| Financial liabilities for puttable equity instruments | 2,595 | 18 | – | 2,612 |
| Total | 80,961 | 4,281 | 4,606 | 89,848 |
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 determined using 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 in 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 invested capital is considered to be a reasonable proxy for the fair value.
Comprehensive Income
52 Consolidated Statements of Changes in Equity
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 (€ 5.1 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 invested capital 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 (€ 4.1 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 (€ 5.5 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.
Quantification of significant non-market observable inputs The following table shows the quantitative description of valuation technique(s) and input(s) used for the level 3 portfolios described above.
| € mn | ||||
|---|---|---|---|---|
| Description | Fair value as of | 30 September 2014 Valuation technique(s) | Non-market observable input(s) |
Range |
| Available-for-sale investments | ||||
| Equity securities | 5,062 Net asset value | n/a | n/a | |
| Corporate bonds | 4,075 Discounted cash flow method | Option adjusted spread | 14 bps –574 bps | |
| Financial liabilities held for trading | ||||
| Derivative financial instruments | 5,465 | |||
| Fixed-indexed annuities | 4,645 Present value of insurance cash flow | Annuitizations | 0%–25% | |
| Surrenders | 0%–25% | |||
| Mortality | 0%–100% | |||
| Withdrawal benefit election | 0%–50% | |||
| Volatility | n/a | |||
| Variable annuities | 820 Deterministic discounted cash flow | Surrenders | 0.5%–35% | |
| Mortality | 0%–100% | |||
49 Consolidated Balance Sheets
50 Consolidated Income Statements
51 Consolidated Statements of Comprehensive Income
52 Consolidated Statements of Changes in Equity
53 Consolidated Statements of Cash Flows 55 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 |
Additions through | Net transfers | Disposals through | |
|---|---|---|---|---|
| 1 January 2014 | purchases and issues | into (out of) level 3 | sales and settlements | |
| Financial assets | ||||
| Financial assets carried at fair value through income | ||||
| Financial assets held for trading | ||||
| Debt securities | – | – | – | – |
| Equity securities | 14 | – | – | – |
| Derivative financial instruments | 38 | 6 | – | (100) |
| Subtotal | 52 | 6 | – | (100) |
| Financial assets designated at fair value through income | ||||
| Debt securities | 1 | – | – | – |
| Equity securities | 3 | 110 | – | – |
| Subtotal | 4 | 110 | – | – |
| Available-for-sale investments | ||||
| Corporate mortgage-backed securities (residential and commercial) | 33 | – | – | (3) |
| Other asset-backed securities | 212 | – | – | (40) |
| Government and government agency bonds | 56 | 35 | – | (37) |
| Corporate bonds | 3,149 | 1,060 | 159 | (98) |
| Other debt securities | 773 | 68 | 1 | (70) |
| Equity securities | 5,722 | 694 | – | (672) |
| Subtotal | 9,945 | 1,857 | 160 | (920) |
| Financial assets for unit-linked contracts | 179 | 28 | – | (31) |
| Total financial assets at fair value | 10,180 | 2,001 | 160 | (1,051) |
€ mn
| Carrying value (fair value) as of 1 January 2014 |
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 | 4,427 | 955 | – | (357) |
| Financial liabilities for unit-linked contracts | 179 | 28 | – | (31) |
| Financial liabilities for puttable equity instruments | – | – | – | – |
| Total financial liabilities at fair value | 4,606 | 983 | – | (388) |
| B | Condensed Consolidated Interim Financial Statements | |||
|---|---|---|---|---|
| 49 Consolidated Balance Sheets | 51 Consolidated Statements of | 52 Consolidated Statements of Changes | 53 Consolidated Statements of Cash Flows | |
| 50 Consolidated Income Statements | Comprehensive Income | in Equity | 55 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 30 September 2014 |
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 |
|---|---|---|---|---|---|---|
| – | – | – | – | – | – | |
| 15 | – | – | – | – | 1 | |
| 46 | – | 3 | – | – | 98 | |
| 61 | – | 3 | – | – | 99 | |
| 1 | – | – | – | – | – | |
| 110 | (3) | – | – | – | – | |
| 111 | (3) | – | – | – | – | |
| 35 | – | 1 | – | 25 | (22) | |
| 199 | – | 11 | – | 10 | 6 | |
| 58 | – | 2 | – | 1 | – | |
| 4,750 | – | 314 | – | 160 | 6 | |
| 657 | (72) | 2 | (14) | (32) | 1 | |
| 6,336 | 83 | 28 | (81) | 546 | 17 | |
| 12,035 | 11 | 358 | (95) | 710 | 8 | |
| 170 | – | – | – | – | (5) | |
| 12,377 | 8 | 361 | (95) | 710 | 102 |
| 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 30 September 2014 |
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 |
|---|---|---|---|---|---|---|
| 5,589 | – | 446 | – | – | 119 | |
| 170 | – | – | – | – | (5) | |
| – | – | – | – | – | – | |
| 5,759 | – | 446 | – | – | 114 |
Certain financial assets are measured at fair value on a non-recurring basis when events or changes in circumstances indicate that the carrying amount may not be recoverable.
If financial assets are measured at fair value on a non-recurring basis at the time of impairment, corresponding disclosures can be found in note 32 – Impairments of investments (net). If fair value less cost to sell is used as the measurement basis under IFRS 5, corresponding disclosures can be found in note 11 – Non-current assets and assets and liabilities of disposal groups classified as held for sale.
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 2013, the carrying amount and fair value of the CDOs was € 166 MN and € 156 MN, respectively. As of 30 September 2014, the carrying amount and fair value of the CDOs was € 162 MN and € 158 MN, respectively. For the nine months ended 30 September 2014, 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 30 September |
nine months ended 30 September |
||
|---|---|---|---|---|
| 2014 | 2013 | 2014 | 2013 | |
| Net income attributable to shareholders used to calculate basic earnings per share | 1,606 | 1,445 | 5,002 | 4,740 |
| Weighted average number of common shares outstanding | 453,784,317 | 453,216,918 | 453,762,049 | 453,196,597 |
| Basic earnings per share (€) | 3.54 | 3.19 | 11.02 | 10.46 |
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. Potentially dilutive common shares arise from various share-based compensation plans of the Allianz Group. The dilution effect for the three and the nine months ended 30 September 2014 amounted to € 0.02 (2013: € 0.05) and € 0.07 (2013: € 0.13) per share.
| B | Condensed Consolidated Interim Financial Statements | |||
|---|---|---|---|---|
| 49 Consolidated Balance Sheets | 51 Consolidated Statements of | 52 Consolidated Statements of Changes | 53 Consolidated Statements of Cash Flows | |
| 50 Consolidated Income Statements | Comprehensive Income | in Equity | 55 Notes |
€ mn
| three months ended 30 September |
nine months ended 30 September |
||
|---|---|---|---|
| 2014 | 2013 | 2014 | 2013 |
| 1,606 | 1,445 | 5,002 | 4,740 |
| (10) | (20) | 3 | (54) |
| 1,597 | 1,425 | 5,004 | 4,686 |
| 453,784,317 | 453,216,918 | 453,762,049 | 453,196,597 |
| 450,966 | |||
| 454,113,244 | 453,602,502 | 456,852,783 | 453,647,563 |
| 3.52 | 3.14 | 10.95 | 10.33 |
| 328,927 | 385,584 | 3,090,734 |
For the nine months ended 30 September 2014, the weighted average number of common shares excludes 2,737,951 (2013: 2,753,403) treasury shares.
| as of 30 September 2014 |
as of 31 December 2013 |
|
|---|---|---|
| Germany | 40,661 | 40,537 |
| Other countries | 106,862 | 107,090 |
| Total | 147,523 | 147,627 |
As of 30 September 2014, there were no significant changes in contingent liabilities compared to the consolidated financial statements for the year ended 31 December 2013.
As of 30 September 2014, commitments outstanding to invest in private equity funds and similar financial instruments amounted to € 3,216 mn (31 December 2013: € 2,978 mn) and commitments outstanding to invest in real estate and infrastructure amounted to € 830 mn (31 December 2013: € 860 mn). Other commitments – mainly referring to a purchase obligation and sponsoring – increased from € 477 mn as of 31 December 2013 to € 512 mn as of 30 September 2014. All other commitments showed no significant changes.
PIMCO introduced a Special Performance Award (SPA) as an enhancement to the regular year-end compensation process. The SPA consists of deferred cash awards granted in the course of fourth quarter 2014, earned and payable over 12 to 30 months. The purpose of the program is to secure performance and to retain talents. The average quarterly impact on income before taxes over the five quarters through the end of 2015 amounts to € 33 mn, and over the remaining six quarters to € 10 mn.
The board of management and the supervisory board of Allianz SE have decided to alter their dividend policy to target an increase in pay-out ratio from 40 to 50 percent of the Allianz Group net income (attributable to shareholders). In the interest of dividend continuity, the objective is to keep the dividend per share at least at the level paid in the previous year. It is further intended to evaluate and return to the shareholders the unused budget earmarked for external growth every three years. The first evaluation would take place at the end of 2016. The dividend policy is subject to a sustainable Solvency II ratio above 160 percent.
This dividend policy represents the current intention of the board of management and the supervisory board and may be revised in the future. Also, the dividend payment in any given year is subject to specific dividend proposals by the board of management and the supervisory board, each of which may elect to deviate from this dividend policy if appropriate under the then prevailing circumstances, as well as to the decision of the annual general meeting.
Munich, 6 November 2014
Allianz SE The Board of Management
51 Consolidated Statements of Comprehensive Income
52 Consolidated Statements of Changes in Equity
53 Consolidated Statements of Cash Flows 55 Notes
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 30 September 2014 that are part of the quarterly financial report according to § 37x 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, 6 November 2014
KPMG AG Wirtschaftsprüfungsgesellschaft
Wirtschaftsprüfer Wirtschaftsprüfer
Klaus Becker Dr. Frank Pfaffenzeller (Independent Auditor) (Independent Auditor)
| Important dates for shareholders and analysts1 | |
|---|---|
| __________ | 26 |
| Financial Results 2014 | February 2015 |
| _____ | 13 |
| Annual Report 2014 | March 2015 |
| _______ | 6 |
| Annual General Meeting | May 2015 |
| ____ | 12 |
| Interim Report/Financial Results 1Q | May 2015 |
| ____ | 7 |
| Interim Report/Financial Results 2Q | August 2015 |
| ____ | 6 |
| Interim Report/Financial Results 3Q | November 2015 |
1 The German Securities Trading Act ("Wertpapierhandelsgesetz") obliges issuers to announce immediately any information which may have a substantial price impact. Therefore we cannot exclude that we have to announce key figures related to quarterly and fiscal year results ahead of the dates mentioned above. As we can never rule out changes of dates, we recommend checking them on the internet at www.allianz.com/financialcalendar.
Allianz SE – Königinstrasse 28 – 80802 Munich – Germany – Telephone +49. 89. 3800-0 – [email protected] – www.allianz.com Interim Report on the internet – www.allianz.com/interim-report – Design/Concept: hw.design GmbH – Date of publication: 7 November 2014 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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