Annual Report • Aug 20, 2014
Annual Report
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| three months ended 30 June | six months ended 30 June | |||||||
|---|---|---|---|---|---|---|---|---|
| 2014 | 2013 | Change from previous year |
2014 | 2013 | Change from previous year |
More details on page |
||
| Income statement | ||||||||
| Total revenues1 | € mn | 29,456 | 26,776 | 10.0% | 63,420 | 58,824 | 7.8% | 6 |
| Operating profit2 | € mn | 2,771 | 2,367 | 17.1% | 5,494 | 5,164 | 6.4% | 7 |
| Net income2 | € mn | 1,858 | 1,675 | 10.9% | 3,598 | 3,476 | 3.5% | 8 |
| thereof: attributable to shareholders | € mn | 1,755 | 1,588 | 10.5% | 3,395 | 3,295 | 3.0% | 8 |
| Business segments3 | ||||||||
| Property-Casualty | ||||||||
| Gross premiums written | € mn | 10,846 | 10,754 | 0.9% | 26,063 | 25,951 | 0.4% | 11 |
| Operating profit2 | € mn | 1,346 | 1,179 | 14.2% | 2,835 | 2,498 | 13.5% | 12 |
| Net Income2 | € mn | 969 | 1,001 | (3.2)% | 1,614 | 2,018 | (20.0)% | 14 |
| Combined ratio | % | 94.6 | 96.0 | (1.4)%-p | 93.6 | 95.1 | (1.5)%-p | 13 |
| Life/Health4 | ||||||||
| Statutory premiums | € mn | 16,961 | 14,125 | 20.1% | 34,124 | 28,962 | 17.8% | 20 |
| Operating profit2 | € mn | 984 | 669 | 47.1% | 1,864 | 1,524 | 22.3% | 21 |
| Net Income2 | € mn | 731 | 474 | 54.2% | 1,360 | 1,102 | 23.4% | 22 |
| Margin on reserves | bps | 79 | 58 | 21 | 76 | 66 | 10 | 23 |
| Asset Management4 | ||||||||
| Operating revenues | € mn | 1,606 | 1,815 | (11.5)% | 3,123 | 3,726 | (16.2)% | 28 |
| Operating profit2 | € mn | 675 | 804 | (16.0)% | 1,321 | 1,704 | (22.5)% | 28 |
| Net Income2 | € mn | 419 | 488 | (14.1)% | 825 | 1,056 | (21.9)% | 28 |
| Cost-income ratio | % | 58.0 | 55.7 | 2.3%-p | 57.7 | 54.3 | 3.4%-p | 28 |
| Corporate and Other | ||||||||
| Total revenues | € mn | 132 | 132 | – | 271 | 280 | (3.2)% | – |
| Operating result2 | € mn | (219) | (274) | 20.1% | (441) | (513) | 14.0% | 31 |
| Net Income2 | € mn | (248) | (277) | 10.5% | (117) | (674) | 82.6% | 31 |
| Balance sheet as of 30 June5 | ||||||||
| Total assets6 | € mn | 754,330 | 711,079 | 6.1% | 754,330 | 771,079 | 6.1% | 36 |
| Shareholders' equity | € mn | 54,979 | 50,084 | 9.8% | 54,979 | 50,084 | 9.8% | 35 |
| Non-controlling interests | € mn | 2,833 | 2,765 | 2.5% | 2,833 | 2,765 | 2.5% | 35 |
| Share information | ||||||||
| Basic earnings per share | € | 3.87 | 3.50 | 10.6% | 7.48 | 7.27 | 2.9% | 104 |
| Diluted earnings per share | € | 3.84 | 3.47 | 10.7% | 7.41 | 7.18 | 3.2% | 104 |
| Share price as of 30 June5 | € | 121.70 | 130.35 | (6.6)% | 121.70 | 130.35 | (6.6)% | 1 |
| Market capitalization as of 30 June5 | € mn | 55,556 | 59,505 | (6.6)% | 55,556 | 59,505 | (6.6)% | – |
| Other data | ||||||||
| Standard&Poor's rating7 | AA Stable Outlook |
AA Stable Outlook |
– | AA Stable Outlook |
AA Stable Outlook |
– | – | |
| Conglomerate solvency ratio5, 8 |
% | 185 | 182 | 3.0%-p | 185 | 182 | 3.0%-p | 35 |
| Total assets under management as of 30 June4, 5 |
€ Bn | 1,814 | 1,770 | 2.5% | 1,814 | 1,770 | 2.5% | 26 |
thereof: third-party assets under management as of 30 June5 € Bn 1,373 1,361 0.9% 1,373 1,361 0.9% 27
1 Total revenues comprise statutory gross premiums written in Property-Casualty and Life/Health, operating revenues in Asset Management and total revenues in Corporate and Other (Banking).
2 The Allianz Group uses operating profit and net income as key financial indicators to assess the performance of its business segments and the Group as a whole.
3 The Allianz Group operates and manages its activities through four business segments: Property-Casualty, Life/Health, Asset Management and Corporate and Other. For further information, please refer to note 4 to the condensed consolidated interim financial statements.
4 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.
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.
7 Insurer financial strength rating, affirmed on 4 November 2013.
8 Solvency according to the E.U. Financial Conglomerates Directive. Off-balance sheet reserves are accepted by the authorities as eligible capital only upon request; Allianz SE has not submitted an application so far. Excluding off-balance sheet reserves, the solvency ratio as of 30 June 2014 would be 177% (31 December 2013: 173%).
To go directly to any chapter, simply click on the headline or the page number.
All references to chapters, pages, notes, internet pages, etc. within this report are also linked.
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 |
Pages 4 – 44
| A | Interim Group Management Report | |||
|---|---|---|---|---|
| --- | -- | -- | --------------------------------- | -- |
35 Balance Sheet Review 42 Reconciliations
second 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 June |
2014 | 2013 |
|---|---|---|
| Total revenues | 29,456 | 26,776 |
| Operating profit | 2,771 | 2,367 |
| Net income | 1,858 | 1,675 |
| Solvency ratio1, 2 in % |
185 | 182 |
Overall, the global economy provided a mixed picture in the second quarter of 2014 but continued to expand at a moderate pace. Economic data, such as industrial production figures, point to slightly weaker growth momentum than previously expected. This holds true not only for the Eurozone, but also for major emerging markets like Brazil. However, overall still favorable sentiment indicators – such as the purchasing managers' index – conflict somewhat with the weaker hard macro data.
In Europe, the European Central Bank (ECB) announced further monetary easing measures, cut the main refinancing rate from 0.25% to 0.15% and forced the deposit rate into negative territory. Despite an expected return to growth in the second quarter of 2014, the U.S. central bank continued to convey a very dovish message. Despite the ECB's actions, the Euro proved resilient against the U.S. Dollar.
Yields on 10-year German government bonds closed the quarter at 1.3%, 60 basis points lower than at the beginning of the year. Following a pronounced tightening in the preceding quarters, spreads on government bonds in the Eurozone periphery moved more or less sideways in the second quarter of 2014. This was in spite of lower benchmark bond yields and doubts about the robustness of the economic recovery in some major industrialized and emerging market economies, as well as geopolitical risks related to the Ukraine and the Middle East.
Equity markets in both emerging and mature markets edged upwards.
Supportive economic conditions and only minor natural catastrophes helped the insurance industry to register a good first halfyear. In particular, insured natural catastrophe losses were markedly below the long-term average. However, low investment yields are persisting, price competition increasing and regulation is being tightened still further. Thus, overall insurance market conditions continue to remain challenging.
1 Solvency according to the E.U. Financial Conglomerates Directive. Off-balance sheet reserves are accepted by the authorities as eligible capital only upon request. Allianz SE has not submitted an application so far. Excluding off-balance sheet reserves, the solvency ratio as of 30 June 2014 would be 177% (31 December 2013: 173%). 2 2013 figure as of 31 December 2013.
Our total revenues grew 10.0% to € 29.5 bn. On an internal basis1, revenues increased by 11.5%. This favorable development was driven by the continued strong revenue growth in our Life/Health business segment and supported by stable revenues in our Property-Casualty business segment. Lower operating revenues in our Asset Management business segment partly offset this growth.
Our operating profit increased 17.1 % to € 2,771 mn. Our Life/ Health business recorded strong operating profit growth due to an improved operating investment result. Our Property-Casualty business recorded a higher underwriting result largely due to an improvement in the accident year loss ratio. The operating profit decline in our Asset Management business segment resulted primarily from lower average assets under management. The operating result from the Corporate and Other business segment improved in all of its three reportable segments.
Our net income increased 10.9% to € 1,858 mn. This was mainly driven by our higher operating result but partly offset by lower nonoperating realized gains. Net income attributable to shareholders and non-controlling interests amounted to € 1,755 mn (2Q 2013: € 1,588 mn) and € 103 mn (2Q 2013: € 87 mn), respectively.
Our capitalization remained strong and shareholders' equity increased by € 4.9 bn to € 55.0 bn compared to 31 December 2013. Our conglomerate solvency ratio strengthened by three percentage points to 185%.
Property-Casualty gross premiums written were up 0.9% to € 10.8 bn. On an internal basis, gross premiums written increased by 2.6% driven by a positive volume effect. Internal growth was supported mainly by our subsidiaries in Germany, in the United Kingdom, at AGCS and Allianz Worldwide Partners.
Life/Health statutory premiums amounted to € 17.0 bn, a strong increase of 20.9% on an internal basis and driven by single premium savings products, mainly in the United States, Germany and Italy.
Asset Management operating revenues declined by € 209 mn to € 1,606 mn. The main drivers were lower average third-party assets under management and a slight decrease in margins, but also the allocation of certain entities to other business segments.3 We recorded third-party net outflows of € 17 bn in the second quarter of 2014.
Total revenues from our Banking operations (reported in our Corporate and Other business segment) remained flat at € 132 mn.
1 Internal total revenue growth excludes the effects of foreign currency translation as well as acquisitions and disposals. Please refer to page 43 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 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).
3 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.
35 Balance Sheet Review 42 Reconciliations
We generated total revenues of € 63.4 bn, an increase of 7.8 % compared to the first six months of 2013. On an internal basis, revenues grew by 9.3 %. We recorded remarkable growth in savings products premiums in our Life/Health business, which more than offset the lower operating revenues due to decreased performance fees and lower third party-assets under management in the Asset Management business segment. Total revenue growth was supported by higher gross premiums written in our Property-Casualty business segment.
Our Property-Casualty operating profit grew by € 167 mn or 14.2% to € 1,346 mn. The underwriting result increased by € 159 mn to € 516 mn, largely due to an improvement in our accident year loss ratio, which benefited from lower natural catastrophe losses. Our operating investment income (net) rose by € 22 mn to € 806 mn.
Life/Health operating profit increased by € 315 mn or 47.1 % to € 984 mn. This was mainly driven by an improved operating investment result which was burdened by higher losses from the net of foreign currency translation effects and financial derivatives in the second quarter of 2013.
Asset Management operating profit declined by 16.0% to € 675 mn. On an internal basis, operating profit declined by 9.7 % driven by lower average assets under management. Our cost-income ratio increased by 2.3 percentage points.
In Corporate and Other the operating loss decreased by € 55 mn to € 219 mn, with all three reportable segments contributing to the improvement.
Operating profit increased by € 330 mn to € 5,494 mn. This increase was driven by our Life/Health business segment due to an improved operating investment result and our Property-Casualty business segment driven by the strong underwriting result. This was partly offset by the operating profit decline in our Asset Management business segment as a result of decreased performance fees and lower average assets under management.
Our non-operating result decreased by € 171 mn to a loss of € 39 mn, mainly driven by lower non-operating realized gains.
Non-operating income from financial assets and liabilities carried at fair value through income (net) decreased by € 40 mn to a loss of € 33 mn. This was mainly due to unfavorable impacts from hedgingrelated activities.
Non-operating realized gains and losses (net) decreased from € 458 mn to € 243 mn due to major realizations in the previous year's quarter.
Non-operating impairments of investments (net) decreased from € 64 mn to € 23 mn, mainly as a result of higher impairments on investments in financial sector assets in the second quarter of 2013.
Non-operating interest expenses from external debt improved from € 233 mn to € 207 mn. New issuances have had lower funding costs compared to bonds that matured or were redeemed.
Our non-operating result decreased by € 168 mn to a loss of € 155 mn. This was largely driven by the lower non-operating investment result due to lower non-operating realized gains and higher unfavorable hedging-related impacts in the first six months of 2014 partly offset by the one-off effect from pension revaluation1 in the first quarter of 2014.
1 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 increased by € 50 mn to € 874 mn, driven by a € 233 mn higher income before income taxes compared to the second quarter of 2013. The effective tax rate decreased to 32.0 % (2Q 2013: 33.0 %), mainly due to lower trade tax expenses in the second quarter of 2014.
Income taxes were up by € 40 mn to € 1,741 mn, driven by a € 162 mn higher income before income taxes compared to the first six months of 2013. The effective tax rate was relatively stable at 32.6% (6M 2013: 32.9%).
Net income increased by € 183 mn to € 1,858 mn, driven primarily by our higher operating result. Net income attributable to shareholders and non-controlling interests amounted to € 1,755 mn (2Q 2013: € 1,588 mn) and € 103 mn (2Q 2013: € 87 mn), respectively. The largest non-controlling interests in net income related to Euler Hermes and PIMCO.
Basic earnings per share increased from € 3.50 to € 3.87 and diluted earnings per share increased from € 3.47 to € 3.84. For further information on earnings per share, please refer to note 39 to the condensed consolidated interim financial statements.
Net income grew by € 122 mn to € 3,598 mn, driven primarily by our higher operating result. Net income attributable to shareholders and non-controlling interests amounted to € 3,395 mn (6M 2013: € 3,295 mn) and € 203 mn (6M 2013: € 181 mn), respectively.
5 Executive Summary
42 Reconciliations
€ mn
| three months ended 30 June | six months ended 30 June | ||||
|---|---|---|---|---|---|
| 2014 | 2013 | 2014 | 2013 | ||
| Total revenues1 | 29,456 | 26,776 | 63,420 | 58,824 | |
| Premiums earned (net) Operating investment result |
16,700 | 16,291 | 33,386 | 32,963 | |
| Interest and similar income | 5,538 | 5,413 | 10,677 | 10,580 | |
| Operating income from financial assets and liabilities | |||||
| carried at fair value through income (net) | (20) | (708) | (271) | (929) | |
| Operating realized gains/losses (net) | 783 | 733 | 1,563 | 1,612 | |
| Interest expenses, excluding interest expenses from external debt | (101) | (102) | (199) | (212) | |
| Operating impairments of investments (net) | (51) | (118) | (347) | (181) | |
| Investment expenses | (232) | (217) | (431) | (425) | |
| Subtotal | 5,917 | 5,001 | 10,992 | 10,445 | |
| Fee and commission income | 2,538 | 2,679 | 4,946 | 5,433 | |
| Other income | 45 | 42 | 123 | 102 | |
| Claims and insurance benefits incurred (net) | (12,257) | (11,972) | (24,066) | (23,610) | |
| Change in reserves for insurance and investment contracts (net)2 | (3,598) | (3,071) | (7,038) | (7,170) | |
| Loan loss provisions | (15) | (15) | (24) | (29) | |
| Acquisition and administrative expenses (net), excluding acquisition-related expenses and one-off effect from pension revaluation |
(5,706) | (5,786) | (11,156) | (11,250) | |
| Fee and commission expenses | (831) | (788) | (1,613) | (1,566) | |
| Operating amortization of intangible assets | (4) | – | (9) | – | |
| Restructuring charges | 8 | (6) | 9 | (100) | |
| Other expenses | (26) | (8) | (56) | (54) | |
| Operating profit (loss) | 2,771 | 2,367 | 5,494 | 5,164 | |
| Non-operating investment result | |||||
| Non-operating income from financial assets and liabilities | |||||
| carried at fair value through income (net) | (33) | 7 | (101) | 3 | |
| Non-operating realized gains/losses (net) | 243 | 458 | 369 | 725 | |
| Non-operating impairments of investments (net) | (23) | (64) | (89) | (135) | |
| Subtotal | 187 | 401 | 179 | 593 | |
| Income from fully consolidated private equity investments (net) | – | (4) | (5) | (8) | |
| Interest expenses from external debt | (207) | (233) | (411) | (474) | |
| Acquisition-related expenses | 2 | (16) | 6 | (41) | |
| One-off effect from pension revaluation | – | – | 116 | – | |
| Non-operating amortization of intangible assets | (21) | (16) | (40) | (57) | |
| Non-operating items | (39) | 132 | (155) | 13 | |
| Income (loss) before income taxes | 2,732 | 2,499 | 5,339 | 5,177 | |
| Income taxes | (874) | (824) | (1,741) | (1,701) | |
| Net income (loss) | 1,858 | 1,675 | 3,598 | 3,476 | |
| Net income (loss) attributable to: | |||||
| Non-controlling interests | 103 | 87 | 203 | 181 | |
| Shareholders | 1,755 | 1,588 | 3,395 | 3,295 | |
| Basic earnings per share in € | 3.87 | 3.50 | 7.48 | 7.27 | |
| Diluted earnings per share in € | 3.84 | 3.47 | 7.41 | 7.18 |
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 June 2014, expenses for premium refunds (net) in the business segment Property-Casualty of € (72) mn (2Q 2013: € (37) mn) are included. For the six months ended 30 June 2014, expenses for premium refunds (net) in the business segment Property-Casualty of € (131) mn (6M 2013: € (100) 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 remains unchanged. As a reminder, Allianz continues to be exposed to two external forces which affect our risk profile and would not normally be associated with our core operating activities: the European sovereign debt crisis and regulatory developments – especially the European solvency directive, Solvency II. The current crisis in the Ukraine and prolonged instability in the region have only limited impact on Allianz's risk profile. Allianz's exposure to the Ukraine is immaterial, while Allianz's exposure to Russia is within our risk appetite and manageable, given that the Russian exposure is to a large extent currency hedged. Therefore, the Ukrainian crisis may only have a material negative impact on Allianz's risk profile in case of a significant escalation of the crisis with subsequent strong spillover effects onto global markets.
The European sovereign debt crisis remained subdued and the Eurozone continued its moderate growth. In the second quarter, several European sovereign ratings or rating outlooks improved, following the continuing economic and fiscal stabilization of some member states. Against this backdrop, a stabilization of several peripheral government spreads was observable. Despite the recent calming of financial markets, many of the root causes of the sovereign debt crisis remain unresolved and markets could fluctuate widely again in the future, having adverse implications for Allianz's balance sheet.
Our management is continuously monitoring and responding to these external developments. This is supported by operational contingency planning for Allianz SE and its operating entities, with scenario analysis being conducted regularly. In addition, we further seek to optimize our product design and pricing in the Life/Health business segment with respect to guarantees and surrender conditions. Looking forward, our robust actions to deal with the various crisis scenarios have bolstered our financial and operational resilience to strong shock scenarios. Continuous monitoring remains a priority to ensure the sustained effectiveness of our contingency measures.
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 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 details of future regulatory requirements, especially Solvency II and those applying to G-SIIs, are becoming clearer, the final rules are still evolving. This creates some uncertainties in terms of the ultimate capital requirements for Allianz.
In addition, due to the market value balance sheet approach, the Solvency II regime will lead to higher volatility in regulatory capital requirements compared to Solvency I. Finally, the multiplicity of different regulatory regimes, capital standards and reporting requirements will increase operational costs.
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.
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.
| Interim Report Second Quarter and First Half Year of 2014 Allianz Group |
11 |
|---|---|
Our Property-Casualty business offers a wide range of products and services for both private and corporate clients. Our offerdisability, property and general liability. We conduct business worldwide in more than 50 countries. We are also a global leader in travel insurance, assistance services and credit insurance. We distribute our products via a broad network of agents, brokers, banks and other strategic partners, as well as through direct channels.
| € mn three months ended 30 June |
2014 | 2013 |
|---|---|---|
| Gross premiums written | 10,846 | 10,754 |
| Operating profit | 1,346 | 1,179 |
| Net income | 969 | 1,001 |
| Loss ratio in % | 66.2 | 67.3 |
| Expense ratio in % | 28.4 | 28.7 |
| Combined ratio in % | 94.6 | 96.0 |
On a nominal basis, we recorded gross premiums written of € 10,846 MN, up € 92 MN – or 0.9% – compared to the second quarter of 2013. Unfavorable foreign currency translation effects were € 284 MN, largely due to the depreciation of the Australian Dollar, the Argentine Peso, the Brazilian Real and the Turkish Lira against the Euro.2 Consolidation/deconsolidation effects were positive and amounted to € 95 MN. These mainly stemmed from our acquisition of Yapı Kredi Sigorta in Turkey in the third quarter of 2013.
On an internal basis, our gross premiums written increased by 2.6 %. The negative price effect of 0.4 % was more than offset by the positive volume effect of 3.0%. We experienced solid growth in Germany, in the United Kingdom, at AGCS and Allianz Worldwide Partners.
1 We comment on the development of our 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.
2 Based on the quarterly 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 2Q 2014 internal growth over 2Q 2013:
Cluster 1:
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.
Cluster 4 is not shown in this quarter as none of our operating entities represented here recorded both negative price and volume effects.
second quarter 2014
− Gross premiums written at € 10.8 BN.
30 Corporate and Other 33 Outlook
− Operating profit grew 14.2% to € 1,346 MN, benefiting from a strong underwriting result.
35 Balance Sheet Review 42 Reconciliations
− Combined ratio at 94.6%.
A Interim Group Management Report 5 Executive Summary 26 Asset Management
11 Property-Casualty Insurance Operations
20 Life/Health Insurance Operations
In the United Kingdom gross premiums increased to € 694 MN. The strong growth of 15.5% on an internal basis was largely due to higher volumes in our motor business and tariff increases in most of our lines.
At Allianz Worldwide Partners gross premiums totaled € 689 MN. The rise of 7.0% on an internal basis benefited from volume increases in our U.S., French, German and U.K. travel business.
In Germany gross premiums went up to € 1,785 MN. The internal growth of 6.0 % stemmed mainly from our motor and commercial non-motor business with positive volume and price impacts.
In Asia-Pacific gross premiums amounted to € 165 MN. The main contributor to the 5.2 % increase on an internal basis was a strong growth in our motor business in Malaysia.
In Spain gross premiums climbed to € 500 MN, up 2.9 % on an internal basis. This reflected both higher volumes and tariff increases across all lines of business.
At AGCS gross premiums grew to € 1,264 MN – an increase of 3.8% on an internal basis. This was supported by higher volumes in our engineering and marine insurance business. Price decreases, in particular in our aviation and energy lines, had a partly offsetting effect.
In Australia gross premiums stood at € 704 MN. The internal growth of 2.3 % was largely attributable to higher volumes in our motor business, which more than compensated for declining tariffs in most of our lines.
In France we recorded gross premiums of € 903 MN. We expanded by 1.0% on an internal basis benefiting from price increases across all lines of business.
In Central and Eastern Europe gross premiums amounted to € 555 MN. On an internal basis, we grew by 0.9% with our motor business in the Czech Republic being the main driver. The overall price effect was negative.
In the United States we recorded gross premiums of € 496 MN. The increase of 0.4% on an internal basis was driven by tariff increases in our retail lines. Volume declines in our commercial lines, which continued to be impacted by our strict underwriting discipline, had a partially offsetting effect.
In Switzerland gross premiums were flat at € 152 MN. Although we generated higher volumes, particularly in our motor business, these could not overcompensate for the overall negative price effect.
In Italy gross premiums decreased to € 1,011 MN – a drop of 2.2% on an internal basis. This was largely attributable to falling prices, mainly in our motor business. Despite regulatory changes weighing on volumes, increases in our motor business – in particular in our direct channel – led to a positive volume effect.
In Turkey gross premiums amounted to € 257 MN. The decrease of 11.1 % on an internal basis was due to volume decreases in our motor business impacted by tax changes negatively affecting car sales.
In Latin America gross premiums went down to € 524 MN – a decline of 1.3% on an internal basis. We experienced volume reductions mainly in Brazil due to the ongoing stabilization phase of a new IT platform.
In Credit Insurance gross premiums decreased to € 530 MN, down 0.6% on an internal basis. Main drivers were increased competition for new business and flat turnover volumes in a soft market.
On a nominal basis, gross premiums written increased by 0.4 %. Adjusted for foreign currency translation and (de-)consolidation effects, this represents a rise of 2.2%. This was comprised of a positive volume effect of 2.1% and a positive price effect of 0.1%.
| € mn | ||||
|---|---|---|---|---|
| three months ended 30 June |
six months ended 30 June |
|||
| 2014 | 2013 | 2014 | 2013 | |
| Underwriting result | 516 | 357 | 1,221 | 897 |
| Operating investment income (net) | 806 | 784 | 1,553 | 1,547 |
| Other result1 | 24 | 38 | 61 | 54 |
| Operating profit | 1,346 | 1,179 | 2,835 | 2,498 |
1 Consists of fee and commission income/expenses, other income/expenses and restructuring charges.
26 Asset Management
33 Outlook
35 Balance Sheet Review 42 Reconciliations
Operating profit increased by € 167 mn or 14.2% to € 1,346 mn driven by a strong underwriting result.
Our underwriting result grew by € 159 mn to € 516 mn. This was largely due to an improvement in our accident year loss ratio, which was supported by a lower impact from natural catastrophes. This result was partially offset by higher large losses and by a less favorable run-off compared to the second quarter of 2013.
The combined ratio improved by 1.4 percentage points to 94.6%.
| € mn | ||||
|---|---|---|---|---|
| three months ended 30 June |
six months ended 30 June |
|||
| 2014 | 2013 | 2014 | 2013 | |
| Premiums earned (net) | 10,701 | 10,379 | 21,111 | 20,691 |
| Accident year claims | (7,452) | (7,579) | (14,432) | (14,543) |
| Previous year claims (run-off) | 366 | 595 | 619 | 746 |
| Claims and insurance benefits incurred (net) |
(7,086) | (6,984) | (13,813) | (13,797) |
| Acquisition and administrative expenses (net), excluding one-off effect from pension revaluation |
(3,036) | (2,976) | (5,948) | (5,885) |
| Change in reserves for insurance and investment contracts (net) (without expenses for premium refunds)1 |
(63) | (62) | (129) | (112) |
| Underwriting result | 516 | 357 | 1,221 | 897 |
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 69.6% – a 3.4 percentage point improvement compared to the previous year's figure. After the heavily burdened second quarter of the previous year, net losses from natural catastrophes dropped from € 549 mn to € 172 mn, decreasing their impact by 3.7 percentage points to 1.6%.
Excluding losses from natural catastrophes, our accident year loss ratio was at 68.0%, a 0.3 percentage point deterioration from the second quarter of 2013. This was mainly driven by higher large losses in our global lines which offset the favorable development in the attritional losses in our European core markets.
The following operations contributed positively to the development of our accident year loss ratio:
Germany: 2.9 percentage points. This was largely attributable to a reduced burden from natural catastrophes compared to the second quarter of the previous year which was severely impacted by the Frederic flood and the Manni/Norbert storm. The improvement was further supported by lower attritional claims and a favorable price momentum, particularly in our motor and commercial non-motor business.
Reinsurance: 0.5 percentage points. The development resulted from lower losses from natural catastrophes, despite an increased impact from large losses.
Switzerland: 0.4 percentage points. This was due to lower natural catastrophe losses and large claims than in the second quarter of the previous year.
France: 0.2 percentage points. This was supported by an improvement in the attritional losses – including a lower impact from large claims – despite the higher burden from natural catastrophes driven by storm Ela in the second quarter of 2014.
The following operations contributed negatively to the development of our accident year loss ratio:
United States: 0.4 percentage points. The negative impact stemmed mainly from higher weather-related claims and large losses in our property business.
Our run-off result decreased by € 229 mn to € 366 mn – resulting in a run-off ratio of 3.4%. This change primarily reflects the previous year quarter's rather high level of run-off and reserve strengthening in certain operating entities in the second quarter of 2014.
In the second quarter of 2014, total expenses amounted to € 3,036 mn, compared to € 2,976 mn in the same period of 2013. Our expense ratio improved by 0.3 percentage points to 28.4%. This mainly resulted from an increased premium base, the absence of the fire levy in Australia and improvements in productivity.
| € mn | ||||
|---|---|---|---|---|
| three months ended 30 June |
six months ended 30 June |
|||
| 2014 | 2013 | 2014 | 2013 | |
| Interest and similar income (net of interest expenses) |
923 | 925 | 1,763 | 1,797 |
| Operating income from financial assets and liabilities carried at fair value through income (net) |
2 | (35) | 16 | (27) |
| Operating realized gains/losses (net) | 29 | 15 | 55 | 30 |
| Operating impairments of investments (net) |
(1) | (7) | (6) | (8) |
| Investment expenses | (75) | (77) | (144) | (145) |
| Expenses for premium refunds (net)2 | (72) | (37) | (131) | (100) |
| Operating investment income (net) | 806 | 784 | 1,553 | 1,547 |
1 The operating investment income (net) for our Property-Casualty business segment consists of the operating investment result – as shown in note 4 to the condensed consolidated interim financial statements – and expenses for premium refunds (net) (policyholder participation) as shown in note 29 to the condensed consolidated interim financial statements.
2 Refers to policyholder participation, mainly from APR (accident insurance with premium refunds) business, and consists of the investment-related part of "change in reserves for insurance and investment contracts (net)". For further information, please refer to note 29 to the condensed consolidated interim financial statements.
Operating investment income (net) increased by € 22 mn to € 806 mn. This was largely driven by an improved foreign currency result.
Interest and similar income (net of interest expenses) remained flat, as the lower income on debt securities was compensated for by increased income on equities. The average asset base1 decreased by 1.6% from € 105.6 BN in the second quarter of 2013 to € 103.9 BN in the second quarter of 2014.
Operating income from financial assets and liabilities carried at fair value through income (net) rose by € 37 mn to a profit of € 2 mn. The increase was mainly because of a positive development in the foreign currency result.
Operating realized gains and losses (net) grew by € 14 mn to € 29 mn reflecting the higher realization on equities in the second quarter of 2014 compared to previous year's figure.
Expenses for premium refunds (net) increased by € 35 mn to € 72 mn due to a higher policyholder participation, mainly from our APR (accident insurance with premium refunds) business.
| € mn | three months ended 30 June |
six months ended 30 June |
||
|---|---|---|---|---|
| 2014 | 2013 | 2014 | 2013 | |
| Fee and commission income | 302 | 307 | 608 | 597 |
| Other income | 10 | 11 | 39 | 19 |
| Fee and commission expenses | (279) | (273) | (570) | (548) |
| Other expenses | (8) | (6) | (14) | (11) |
| Restructuring charges | (1) | (1) | (2) | (3) |
| Other result | 24 | 38 | 61 | 54 |
Operating profit rose by € 337 mn to € 2,835 mn. This improvement was driven by our strong underwriting result. The operating investment income (net) remained stable at € 1,553 mn.
Our combined ratio improved by 1.5 percentage points to 93.6% benefiting from a 2.0 percentage points lower accident year loss ratio. This favorable development was largely due to a lower impact from natural catastrophes and an improvement in our underlying claims development, which more than offset higher large losses. The improvement in the combined ratio was further supported by a lower expense ratio despite a 0.7 percentage point decrease due to an unfavorable movement in our run-off ratio.
Net income decreased by € 32 mn to € 969 mn driven mainly by some major realizations from the previous year's quarter that did not reoccur and by the increased effective tax rate. This was because of the higher tax-exempt income in the second quarter of the previous year.
Net income fell by € 404 mn to € 1,614 mn largely due to the 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.
26 Asset Management
35 Balance Sheet Review
42 Reconciliations
€ mn
| three months ended 30 June | six months ended 30 June | ||||
|---|---|---|---|---|---|
| 2014 | 2013 | 2014 | 2013 | ||
| Gross premiums written1 | 10,846 | 10,754 | 26,063 | 25,951 | |
| Ceded premiums written | (936) | (1,121) | (2,163) | (2,431) | |
| Change in unearned premiums | 791 | 746 | (2,789) | (2,829) | |
| Premiums earned (net) | 10,701 | 10,379 | 21,111 | 20,691 | |
| Interest and similar income | 939 | 932 | 1,792 | 1,819 | |
| Operating income from financial assets and liabilities carried at fair value through income (net) |
2 | (35) | 16 | (27) | |
| Operating realized gains/losses (net) | 29 | 15 | 55 | 30 | |
| Fee and commission income | 302 | 307 | 608 | 597 | |
| Other income | 10 | 11 | 39 | 19 | |
| Operating revenues | 11,983 | 11,609 | 23,621 | 23,129 | |
| Claims and insurance benefits incurred (net) | (7,086) | (6,984) | (13,813) | (13,797) | |
| Change in reserves for insurance and investment contracts (net) | (135) | (99) | (260) | (212) | |
| Interest expenses | (16) | (7) | (29) | (22) | |
| Operating impairments of investments (net) | (1) | (7) | (6) | (8) | |
| Investment expenses | (75) | (77) | (144) | (145) | |
| Acquisition and administrative expenses (net), excluding one-off effect from pension revaluation |
(3,036) | (2,976) | (5,948) | (5,885) | |
| Fee and commission expenses | (279) | (273) | (570) | (548) | |
| Restructuring charges | (1) | (1) | (2) | (3) | |
| Other expenses | (8) | (6) | (14) | (11) | |
| Operating expenses | (10,637) | (10,430) | (20,786) | (20,631) | |
| Operating profit | 1,346 | 1,179 | 2,835 | 2,498 | |
| Non-operating items | 84 | 212 | (492) | 340 | |
| Income before income taxes | 1,430 | 1,391 | 2,343 | 2,838 | |
| Income taxes | (461) | (390) | (729) | (820) | |
| Net income | 969 | 1,001 | 1,614 | 2,018 | |
| Loss ratio2 in % | 66.2 | 67.3 | 65.4 | 66.7 | |
| Expense ratio3 in % | 28.4 | 28.7 | 28.2 | 28.4 | |
| Combined ratio4 in % | 94.6 | 96.0 | 93.6 | 95.1 | |
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).
| € mn | ||||||||
|---|---|---|---|---|---|---|---|---|
| Gross premiums written | Premiums earned (net) | Operating profit (loss) | ||||||
| internal1 | ||||||||
| three months ended 30 June | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 |
| Germany2 | 1,785 | 1,669 | 1,785 | 1,684 | 1,971 | 1,860 | 324 | (53) |
| Switzerland | 152 | 151 | 151 | 151 | 352 | 348 | 49 | 30 |
| Austria | 222 | 216 | 222 | 216 | 209 | 202 | 25 | 10 |
| German Speaking Countries2 | 2,159 | 2,055 | 2,158 | 2,051 | 2,532 | 2,426 | 398 | (5) |
| Italy | 1,011 | 1,034 | 1,011 | 1,034 | 969 | 993 | 246 | 322 |
| France | 903 | 894 | 903 | 894 | 975 | 951 | 107 | 120 |
| Benelux3 | 261 | 262 | 261 | 259 | 267 | 268 | 20 | 31 |
| Turkey4 | 257 | 225 | 200 | 225 | 227 | 146 | 16 | 13 |
| Greece | 27 | 26 | 27 | 26 | 23 | 21 | 3 | 4 |
| Africa | 15 | 16 | 15 | 16 | 14 | 13 | (1) | 3 |
| Western&Southern Europe5 | 2,474 | 2,457 | 2,417 | 2,454 | 2,475 | 2,392 | 393 | 496 |
| Latin America | 524 | 630 | 622 | 630 | 436 | 444 | 4 | 34 |
| Spain | 500 | 486 | 500 | 486 | 454 | 452 | 64 | 63 |
| Portugal | 68 | 66 | 68 | 66 | 69 | 67 | 7 | 6 |
| Iberia&Latin America | 1,092 | 1,182 | 1,190 | 1,182 | 959 | 963 | 75 | 103 |
| United States | 496 | 520 | 522 | 520 | 420 | 461 | (33) | 56 |
| USA6 | 496 | 520 | 522 | 520 | 420 | 461 | (33) | 56 |
| Allianz Global Corporate&Specialty | 1,264 | 1,237 | 1,284 | 1,237 | 744 | 708 | 102 | 86 |
| Reinsurance PC | 684 | 661 | 684 | 661 | 756 | 724 | 130 | 66 |
| Australia | 704 | 767 | 785 | 767 | 537 | 560 | 105 | 133 |
| United Kingdom | 694 | 576 | 665 | 576 | 586 | 523 | 48 | 46 |
| Credit Insurance | 530 | 539 | 531 | 534 | 366 | 377 | 124 | 116 |
| Ireland | 115 | 112 | 115 | 112 | 94 | 94 | 9 | 14 |
| Global Insurance Lines&Anglo Markets7 | 3,991 | 3,892 | 4,064 | 3,887 | 3,083 | 2,986 | 519 | 461 |
| Russia | 148 | 180 | 172 | 180 | 139 | 142 | (82) | (6) |
| Poland | 102 | 110 | 102 | 110 | 87 | 85 | 5 | 1 |
| Hungary | 62 | 59 | 64 | 59 | 58 | 57 | 6 | 2 |
| Slovakia | 74 | 72 | 74 | 72 | 67 | 65 | 10 | 13 |
| Czech Republic | 74 | 69 | 78 | 69 | 61 | 54 | 5 | 6 |
| Romania | 46 | 44 | 47 | 44 | 37 | 37 | 2 | 1 |
| Bulgaria | 23 | 22 | 23 | 22 | 14 | 14 | 1 | 4 |
| Croatia | 23 | 24 | 23 | 24 | 19 | 19 | 2 | 3 |
| Ukraine | 4 | 3 | 6 | 3 | 2 | 1 | – | – |
| Central and Eastern Europe8 | 555 | 582 | 587 | 582 | 484 | 474 | (52) | 23 |
| Asia-Pacific | 165 | 174 | 183 | 174 | 107 | 95 | 15 | 19 |
| Middle East and North Africa | 19 | 18 | 20 | 18 | 12 | 12 | 2 | 2 |
| Growth Markets | 739 | 774 | 790 | 774 | 603 | 581 | (35) | 44 |
| Allianz Global Assistance | 530 | 483 | 526 | 483 | 494 | 458 | 29 | 22 |
| Allianz Worldwide Care | 139 | 119 | 139 | 119 | 118 | 102 | 9 | 9 |
| Allianz Worldwide Partners9 | 689 | 640 | 685 | 640 | 629 | 570 | 28 | 24 |
| Consolidation10 | (794) | (766) | (798) | (760) | – | – | 1 | – |
| Total | 10,846 | 10,754 | 11,028 | 10,748 | 10,701 | 10,379 | 1,346 | 1,179 |
1 This reflects gross premiums written on an internal basis, adjusted for foreign currency translation and (de-)consolidation effects.
3 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 € 30 mn, premiums earned (net) of € 14 mn and operating profit of € 10 mn. Prior period figures were not adjusted. Contribution to German Speaking Countries before consolidation in 2Q 2013 was gross written premiums of € 19 mn, premiums earned (net) of € 16 mn and operating profit of € 8 mn.
4 On 12 July 2013, Allianz Group acquired Yapı Kredi Bank's shareholding in the Turkish property-casualty insurance company Yapı Kredi Sigorta.
5 Contains € 2 mn and € 3 mn operating profit for 2Q 2014 and 2Q 2013, respectively, from a management holding located in Luxembourg.
6 The reserve strengthening for asbestos risks in 2Q 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.
5 Executive Summary
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
7 Contains € 1 mn and € 0 mn operating profit for 2Q 2014 and 2Q 2013, respectively, from AGF UK. 8 Contains income and expense items from a management holding and consolidations between countries the following quarters. The reinsurance business of Allianz Global Automotive contributed with gross premiums written of € 20 mn, premiums earned (net) of € 17 mn and an operating loss of € 0.4 mn for 2Q 2014 and with gross premiums written of € 38 mn, premiums earned (net) of € 10 mn and an operating loss of € 6 mn for 2Q 2013.
10 Represents elimination of transactions between Allianz Group companies in different geographic regions.
| Combined ratio | Expense ratio | |||||
|---|---|---|---|---|---|---|
| three months ended 30 June | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 |
| Germany2 | 92.0 | 110.6 | 66.7 | 82.9 | 25.3 | 27.7 |
| Switzerland | 91.8 | 97.2 | 68.3 | 74.1 | 23.5 | 23.1 |
| Austria | 91.8 | 99.0 | 66.0 | 71.9 | 25.8 | 27.1 |
| German Speaking Countries2 | 91.9 | 107.3 | 66.8 | 80.5 | 25.1 | 26.8 |
| Italy | 82.8 | 76.4 | 55.8 | 51.6 | 27.0 | 24.8 |
| France | 97.0 | 96.3 | 67.0 | 67.1 | 30.0 | 29.2 |
| Benelux3 | 100.3 | 96.4 | 69.8 | 66.5 | 30.5 | 29.9 |
| Turkey4 | 101.2 | 96.8 | 78.5 | 72.0 | 22.7 | 24.8 |
| Greece | 91.5 | 81.1 | 55.5 | 46.9 | 36.0 | 34.2 |
| Africa | 112.9 | 92.8 | 56.7 | 41.4 | 56.2 | 51.4 |
| Western&Southern Europe5 | 92.2 | 87.9 | 63.8 | 60.6 | 28.4 | 27.3 |
| Latin America | 104.4 | 98.7 | 72.7 | 65.2 | 31.7 | 33.5 |
| Spain | 90.0 | 90.0 | 69.5 | 68.2 | 20.5 | 21.8 |
| Portugal | 94.3 | 94.4 | 70.9 | 70.9 | 23.4 | 23.5 |
| Iberia&Latin America | 96.9 | 94.3 | 71.1 | 67.0 | 25.8 | 27.3 |
| United States | 121.2 | 100.2 | 81.9 | 64.4 | 39.3 | 35.8 |
| USA6 | 121.2 | 100.2 | 81.9 | 64.4 | 39.3 | 35.8 |
| Allianz Global Corporate&Specialty | 97.4 | 98.1 | 70.3 | 69.1 | 27.1 | 29.0 |
| Reinsurance PC | 86.4 | 95.1 | 59.1 | 68.2 | 27.3 | 26.9 |
| Australia | 90.7 | 86.8 | 65.4 | 60.6 | 25.3 | 26.2 |
| United Kingdom | 96.4 | 96.3 | 63.9 | 65.9 | 32.5 | 30.4 |
| Credit Insurance | 75.0 | 77.8 | 44.4 | 47.8 | 30.6 | 30.0 |
| Ireland | 98.3 | 91.5 | 68.4 | 61.5 | 29.9 | 30.0 |
| Global Insurance Lines&Anglo Markets7 | 90.8 | 92.2 | 62.4 | 63.8 | 28.4 | 28.4 |
| Russia | 165.3 | 111.7 | 118.1 | 69.6 | 47.2 | 42.1 |
| Poland | 99.0 | 103.3 | 64.2 | 67.9 | 34.8 | 35.4 |
| Hungary | 100.7 | 106.7 | 63.2 | 67.9 | 37.5 | 38.8 |
| Slovakia | 87.9 | 86.7 | 57.4 | 56.2 | 30.5 | 30.5 |
| Czech Republic | 93.2 | 92.2 | 64.6 | 61.2 | 28.6 | 31.0 |
| Romania | 100.8 | 104.3 | 71.6 | 73.1 | 29.2 | 31.2 |
| Bulgaria | 96.9 | 79.7 | 68.1 | 48.8 | 28.8 | 30.9 |
| Croatia | 95.0 | 91.6 | 53.8 | 52.0 | 41.2 | 39.6 |
| Ukraine | 116.3 | 127.0 | 58.4 | 66.9 | 57.9 | 60.1 |
| Central and Eastern Europe8 | 116.0 | 102.1 | 79.0 | 65.2 | 37.0 | 36.9 |
| Asia-Pacific | 93.4 | 88.4 | 64.3 | 57.6 | 29.1 | 30.8 |
| Middle East and North Africa | 98.4 | 95.8 | 67.1 | 61.5 | 31.3 | 34.3 |
| Growth Markets | 111.8 | 99.7 | 76.1 | 63.9 | 35.7 | 35.8 |
| Allianz Global Assistance | 95.5 | 96.8 | 62.2 | 61.5 | 33.3 | 35.3 |
| Allianz Worldwide Care | 92.4 | 91.8 | 72.1 | 72.5 | 20.3 | 19.3 |
| Allianz Worldwide Partners9 | 96.5 | 97.0 | 64.5 | 63.8 | 32.0 | 33.2 |
| Consolidation10 | – | – | – | – | – | – |
| Total | 94.6 | 96.0 | 66.2 | 67.3 | 28.4 | 28.7 |
35 Balance Sheet Review 42 Reconciliations
%
in this region.
| € mn | ||||||||
|---|---|---|---|---|---|---|---|---|
| Gross premiums written | Premiums earned (net) | Operating profit (loss) | ||||||
| internal1 | ||||||||
| six months ended 30 June | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 |
| Germany2, 3 |
5,875 | 5,669 | 5,875 | 5,690 | 3,842 | 3,711 | 654 | 266 |
| Switzerland | 1,096 | 1,103 | 1,091 | 1,103 | 720 | 717 | 110 | 89 |
| Austria | 572 | 566 | 572 | 566 | 418 | 401 | 41 | 28 |
| German Speaking Countries3 | 7,543 | 7,365 | 7,538 | 7,359 | 4,980 | 4,849 | 805 | 393 |
| Italy | 1,972 | 2,012 | 1,972 | 2,012 | 1,927 | 1,959 | 459 | 528 |
| France | 2,346 | 2,359 | 2,346 | 2,359 | 1,951 | 1,885 | 235 | 223 |
| Benelux4 | 660 | 676 | 660 | 673 | 534 | 542 | 42 | 50 |
| Turkey5 | 547 | 436 | 447 | 436 | 441 | 276 | 39 | 30 |
| Greece | 58 | 56 | 58 | 56 | 45 | 41 | 10 | 8 |
| Africa | 56 | 54 | 56 | 54 | 30 | 27 | 3 | 4 |
| Western&Southern Europe6 | 5,639 | 5,593 | 5,539 | 5,590 | 4,928 | 4,730 | 792 | 850 |
| Latin America | 923 | 1,197 | 1,127 | 1,197 | 846 | 884 | 45 | 73 |
| Spain | 1,114 | 1,100 | 1,114 | 1,100 | 894 | 899 | 131 | 114 |
| Portugal | 184 | 183 | 184 | 183 | 135 | 132 | 12 | 10 |
| Iberia&Latin America | 2,221 | 2,480 | 2,425 | 2,480 | 1,875 | 1,915 | 188 | 197 |
| United States | 912 | 972 | 953 | 972 | 825 | 924 | (9) | 103 |
| USA7 | 912 | 972 | 953 | 972 | 825 | 924 | (9) | 103 |
| Allianz Global Corporate&Specialty | 2,853 | 2,803 | 2,890 | 2,803 | 1,465 | 1,438 | 245 | 178 |
| Reinsurance PC2 | 2,252 | 2,115 | 2,252 | 2,113 | 1,504 | 1,458 | 292 | 110 |
| Australia | 1,278 | 1,452 | 1,475 | 1,452 | 1,057 | 1,159 | 155 | 198 |
| United Kingdom | 1,332 | 1,171 | 1,285 | 1,171 | 1,147 | 1,040 | 78 | 101 |
| Credit Insurance | 1,142 | 1,138 | 1,144 | 1,129 | 744 | 721 | 236 | 204 |
| Ireland | 235 | 224 | 235 | 224 | 184 | 187 | 14 | 21 |
| Global Insurance Lines&Anglo Markets8 | 9,092 | 8,903 | 9,281 | 8,892 | 6,101 | 6,003 | 1,020 | 812 |
| Russia | 379 | 400 | 447 | 400 | 289 | 288 | (133) | (6) |
| Poland | 215 | 219 | 215 | 219 | 173 | 170 | 9 | 4 |
| Hungary | 149 | 145 | 154 | 145 | 111 | 113 | 11 | 8 |
| Slovakia | 181 | 177 | 181 | 177 | 131 | 131 | 30 | 26 |
| Czech Republic | 148 | 143 | 158 | 143 | 118 | 111 | 20 | 12 |
| Romania | 99 | 93 | 101 | 93 | 73 | 73 | 4 | 2 |
| Bulgaria | 39 | 37 | 39 | 37 | 30 | 31 | 6 | 9 |
| Croatia | 51 | 52 | 51 | 52 | 38 | 38 | 5 | 6 |
| Ukraine | 9 | 9 | 12 | 9 | 4 | 3 | (1) | 1 |
| Central and Eastern Europe9 | 1,268 | 1,274 | 1,358 | 1,274 | 967 | 958 | (52) | 59 |
| Asia-Pacific | 348 | 354 | 387 | 354 | 207 | 184 | 39 | 38 |
| Middle East and North Africa | 39 | 38 | 41 | 38 | 24 | 24 | 3 | 4 |
| Growth Markets | 1,655 | 1,666 | 1,786 | 1,666 | 1,198 | 1,166 | (10) | 101 |
| Allianz Global Assistance | 1,096 | 1,009 | 1,091 | 1,009 | 948 | 893 | 51 | 36 |
| Allianz Worldwide Care | 341 | 296 | 341 | 296 | 230 | 199 | 19 | 17 |
| Allianz Worldwide Partners10 | 1,474 | 1,360 | 1,469 | 1,360 | 1,204 | 1,104 | 49 | 42 |
| Consolidation11 | (2,473) | (2,388) | (2,478) | (2,379) | – | – | – | – |
| Total | 26,063 | 25,951 | 26,513 | 25,940 | 21,111 | 20,691 | 2,835 | 2,498 |
1 This reflects gross premiums written on an internal basis, adjusted for foreign currency translation and (de-)consolidation effects.
Prior period figures were not adjusted. Contribution to German Speaking Countries before consolidation in 6M 2013 was gross written premiums of € 27 mn, premiums earned (net) of € 20 mn and operating profit of € 10 mn.
2 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 1.8 percentage point improvement in the combined ratio for Germany and an increase of 4.5 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 € 17 mn and operating profit of € 11 mn.
4 Belgium and the Netherlands are presented as the combined region Benelux. All prior periods are presented accordingly.
5 On 12 July 2013, Allianz Group acquired Yapı Kredi Bank's shareholding in the Turkish property-casualty insurance company Yapı Kredi Sigorta.
5 Executive Summary
%
33 Outlook
35 Balance Sheet Review
42 Reconciliations
six months ended 30 June 2014 2013 2014 2013 2014 2013 Germany2, 3 91.3 101.1 65.7 75.7 25.6 25.4 Switzerland 90.4 93.3 67.6 71.2 22.8 22.1 Austria 93.9 97.7 67.3 70.4 26.6 27.3 German Speaking Countries3 91.4 99.4 66.1 74.4 25.3 25.0 Italy 83.3 80.9 56.7 56.4 26.6 24.5 France 95.3 96.4 67.0 68.5 28.3 27.9 Benelux4 99.2 97.4 69.1 68.2 30.1 29.2 Turkey5 98.7 94.5 75.8 69.3 22.9 25.2 Greece 81.1 82.6 47.4 48.1 33.7 34.5 Africa 93.5 94.3 55.2 54.0 38.3 40.3 Western&Southern Europe6 91.2 89.9 63.8 63.3 27.4 26.6 Latin America 103.0 98.1 71.5 65.2 31.5 32.9 Spain 89.6 91.5 69.1 70.6 20.5 20.9 Portugal 95.3 96.8 72.6 73.3 22.7 23.5 Iberia&Latin America 96.0 94.9 70.4 68.3 25.6 26.6 United States 114.2 100.9 76.4 65.1 37.8 35.8 USA7 114.2 100.9 76.4 65.1 37.8 35.8 Allianz Global Corporate&Specialty 94.7 97.7 67.4 69.3 27.3 28.4 Reinsurance PC2 84.1 95.7 56.1 61.1 28.0 34.6 Australia 95.1 93.4 70.3 67.4 24.8 26.0 United Kingdom 98.0 95.8 66.0 64.7 32.0 31.1 Credit Insurance 76.4 81.1 46.8 52.5 29.6 28.6 Ireland 99.6 95.2 67.8 63.1 31.8 32.1 Global Insurance Lines&Anglo Markets8 90.8 94.1 62.4 64.0 28.4 30.1 Russia 152.0 108.5 104.3 67.1 47.7 41.4 Poland 99.3 102.1 64.8 67.3 34.5 34.8 Hungary 102.9 105.3 62.6 65.7 40.3 39.6 Slovakia 82.0 87.0 51.4 56.8 30.6 30.2 Czech Republic 84.9 91.2 56.8 62.6 28.1 28.6 Romania 101.5 102.9 71.7 72.4 29.8 30.5 Bulgaria 83.7 75.1 57.6 44.4 26.1 30.7 Croatia 93.0 91.3 54.2 53.3 38.8 38.0 Ukraine 122.2 116.8 60.7 61.1 61.5 55.7 Central and Eastern Europe9 111.0 100.2 73.4 64.1 37.6 36.1 Asia-Pacific 89.0 88.1 59.6 57.4 29.4 30.7 Middle East and North Africa 98.5 95.6 64.2 62.2 34.3 33.4 Growth Markets 107.0 98.2 70.9 63.0 36.1 35.2 Allianz Global Assistance 95.7 97.7 61.6 62.5 34.1 35.2 Allianz Worldwide Care 92.2 92.0 73.7 73.9 18.5 18.1 Allianz Worldwide Partners10 96.6 97.6 64.4 64.6 32.2 33.0 Consolidation11 – – – – – – Total 93.6 95.1 65.4 66.7 28.2 28.4
10 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 the following quarters. The reinsurance business of Allianz Global Automotive contributed with gross premiums written of € 37 mn, premiums earned (net) of € 26 mn and an operating loss of € 8 mn for 6M 2014 and with gross premiums written of € 55 mn, premiums earned (net) of € 12 mn and an operating loss of € 9 mn for 6M 2013.
Combined ratio Loss ratio Expense ratio
had no impact on the financial results of the Allianz Group and Fireman's Fund's combined ratio under IFRS. 8 Contains € 0.3 mn and € 0.2 mn operating loss for 6M 2014 and 6M 2013, respectively, from AGF UK. 9 Contains income and expense items from a management holding and consolidations between countries
in this region.
11 Represents elimination of transactions between Allianz Group companies in different geographic regions.
Second quarter 2014
Allianz offers a broad range of life, health, savings and investment-oriented products, including individual and group life insurance contracts. Via our distribution channels – mainly tied agents, brokers and bank partnerships – we offer life and health products to both private and corporate clients. As one of the worldwide market leaders in life business we serve customers in more than 45 countries.
| € mn | ||
|---|---|---|
| three months ended 30 June | 2014 | 2013 |
| Statutory premiums | 16,961 | 14,125 |
| Operating profit1 | 984 | 669 |
| Net income1 | 731 | 474 |
| Margin on reserves (bps)1, 2 |
79 | 58 |
On a nominal basis, statutory premiums amounted to € 16,961 mn, an increase of € 2,836 mn. Excluding unfavorable foreign currency translation effects of € 280 mn and positive consolidation/deconsolidation effects of € 166 mn – largely from our acquisition of Yapı Kredi in Turkey in the third quarter of 2013 – premiums increased by 20.9%, or € 2,950 mn, on an internal basis.
We recorded premium growth across most core markets – largely driven by our single premium business. Premium growth was particularly strong in the United States, Germany and Italy. These favorable developments were mainly due to the successful cooperation with and distribution via our bancassurance channel in many European markets and our broker channel in the United States.
Premiums in the United States increased to € 3,352 mn, representing growth of 96.9%. This was driven by stronger fixed-indexed annuity sales as a result of an innovative index strategy and higher penetration into the broker and dealer channel. This growth was partly offset by a decrease in the variable annuity business.
Premiums in Central and Eastern Europe increased to € 247 mn, representing growth of 34.0%. This largely relates to stronger sales of single premium investment-oriented products in the Czech Republic, Hungary and Poland.
In our German life business, premiums grew 21.0% to € 4,447 mn. This was driven by a strong 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 a meaningful share to premium growth. Statutory premiums in our German health business decreased 2.3% to € 813 mn due to a lower contribution from full health care coverage business.
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
35 Balance Sheet Review 42 Reconciliations
Premiums in Italy increased 17.1% to € 3,069 mn. This growth was mainly driven by our single premium savings business via bancassurance. This was partly offset by a decrease in single premium unitlinked business via the financial advisors channel.
In Switzerland, premiums totaled € 275 mn. The increase of 8.3% was primarily driven by our single premium group life business. This was partly offset by a more selective growth focus in our individual life business that resulted in a decrease of single and regular premiums.
In Asia-Pacific, premiums amounted to € 1,328 mn, a growth of 5.3 %. This was largely driven by South Korea where we recorded higher sales of single premium investment-oriented products via the bancassurance channel. This growth was partly compensated by lower single premium unit-linked business in Taiwan.
Premiums in France decreased to € 2,076 mn, down 2.9 %. This was mainly due to higher business volumes with Luxembourg as well as some large single premium contracts in our group pension business in the second quarter of 2013. However, the positive trend in terms of business mix continued with an increasing share of unitlinked products in our individual life business.
In Benelux1, we recorded premiums of € 570 mn, a decrease of 15.8 %. This was mainly due to lower sales of investment-oriented products in Luxembourg after a strong second quarter in 2013.
Premiums in Spain dropped 26.8 % to € 289 mn, mainly as the second quarter of 2013 witnessed exceptionally strong sales of unitlinked and other investment-oriented products.
Statutory premiums were 17.8% above the first half year of 2013 and amounted to € 34,124 mn. This represents an increase of 18.6% 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 Germany and Italy.
Operating profit increased by € 315 mn to € 984 mn. This was mainly driven by an improved operating investment result, which was burdened by higher losses from the net of foreign currency translation effects and financial derivatives in the second quarter of 2013.
Interest and similar income (net of interest expenses) increased by € 100 mn and amounted to € 4,448 mn, driven by higher dividend income as well as 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 € 651 mn to a loss of € 36 mn. This was largely due to significantly higher losses in the second 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 € 36 mn to € 754 mn. This was mainly the result of higher realizations on equity and real estate investments. Lower realizations on debt securities compared to the second quarter of 2013 partly compensated the increase.
Operating impairments of investments (net) improved by € 82 mn to € 50 mn. This was largely due to lower equity impairments – in line with favorable equity market developments.
Fee and commission income increased by € 93 mn to € 261 mn, mainly due to income generated by entities transferred from the business segment Asset Management.
Claims and insurance benefits incurred (net) increased by € 183 mn to € 5,173 mn, largely because of higher payments for maturities in Germany.
Change in reserves for insurance and investment contracts (net) increased by € 529 mn to € 3,457 mn. Largely related to Germany, this increase was driven by a higher change in reserves for premium refunds due to the improved investment result. We also had a lower increase in aggregate policy reserves because of higher maturities and lower net premiums earned.
Investment expenses increased by € 39 mn to € 232 mn. This was mainly due to investment management performance fees.
Acquisition and administrative expenses (net) amounted to € 1,448 mn, an improvement of € 30 mn. This was primarily a result of lower acquisition costs due to lower amortization of deferred acquisition costs in the United States. These were partly offset by higher administrative costs mainly related to the entities transferred from the business segment Asset Management.
1 Belgium, Luxembourg and the Netherlands are presented as the combined region Benelux. All prior periods are presented accordingly.
Margin on reserves improved from 58 to 79 basis points. This was primarily driven by the increased operating investment result.
Overall, the increase in operating profit was mainly driven by an increased investment margin in Germany. Additionally, increased interest rates in the second quarter of 2013 led to higher deferred acquisition cost amortization in the United States in the previous year's quarter. Our investment margin (i.e. investment income, net of hedged item movements and policyholder participation) improvement was driven by gains from the duration strategy and a recovery in the foreign currency result after the losses in the second quarter of 2013 on partially hedged emerging markets bonds. Strong fixedindexed annuity business in the United States resulted in increased acquisition expenses which were largely offset by higher capitalization of deferred acquisition costs.
Operating profit increased by € 340 mn to € 1,864 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 quarter of 2013. Additionally, the allocation of certain entities previously reflected in the business segment Asset Management to the business segment Life/ Health contributed to this increase.
In the second quarter of 2014, net income increased by € 257 mn to € 731 mn mainly due to strong operating performance. This strong operating performance is also the driver for the increase of € 258 mn to € 1,360 mn in the first six months of 2014. The effective tax rate amounted to 29.6% (2Q 2013: 30.3%) in the second quarter of 2014 and 29.2% (6M 2013: 30.0%) in the first six months of 2014.
35 Balance Sheet Review
30 Corporate and Other 33 Outlook
42 Reconciliations
€ mn
| three months ended 30 June | six months ended 30 June | |||||
|---|---|---|---|---|---|---|
| 2014 | 2013 | 2014 | 2013 | |||
| Statutory premiums1 | 16,961 | 14,125 | 34,124 | 28,962 | ||
| Ceded premiums written | (224) | (151) | (386) | (308) | ||
| Change in unearned premiums | (58) | (50) | (241) | (164) | ||
| Statutory premiums (net) | 16,679 | 13,924 | 33,497 | 28,490 | ||
| Deposits from insurance and investment contracts | (10,680) | (8,012) | (21,222) | (16,218) | ||
| Premiums earned (net) | 5,999 | 5,912 | 12,275 | 12,272 | ||
| Interest and similar income | 4,471 | 4,369 | 8,630 | 8,446 | ||
| Operating income from financial assets and liabilities carried at fair value through income (net) |
(36) | (687) | (305) | (931) | ||
| Operating realized gains/losses (net) | 754 | 718 | 1,581 | 1,617 | ||
| Fee and commission income | 261 | 168 | 490 | 308 | ||
| Other income | 33 | 31 | 82 | 80 | ||
| Operating revenues | 11,482 | 10,511 | 22,753 | 21,792 | ||
| Claims and insurance benefits incurred (net) | (5,173) | (4,990) | (10,254) | (9,816) | ||
| Change in reserves for insurance and investment contracts (net) | (3,457) | (2,928) | (6,771) | (6,929) | ||
| Interest expenses | (23) | (21) | (48) | (40) | ||
| Operating impairments of investments (net) | (50) | (132) | (341) | (194) | ||
| Investment expenses | (232) | (193) | (427) | (383) | ||
| Acquisition and administrative expenses (net), excluding one-off effect from pension revaluation |
(1,448) | (1,478) | (2,701) | (2,726) | ||
| Fee and commission expenses | (93) | (74) | (180) | (130) | ||
| Operating amortization of intangible assets | (4) | – | (9) | – | ||
| Restructuring charges | 8 | (1) | 8 | (2) | ||
| Other expenses | (26) | (25) | (166) | (48) | ||
| Operating expenses | (10,498) | (9,842) | (20,889) | (20,268) | ||
| Operating profit | 984 | 669 | 1,864 | 1,524 | ||
| Non-operating items | 54 | 11 | 58 | 51 | ||
| Income before income taxes | 1,038 | 680 | 1,922 | 1,575 | ||
| Income taxes | (307) | (206) | (562) | (473) | ||
| Net income | 731 | 474 | 1,360 | 1,102 | ||
| Margin on reserves2 in basis points | 79 | 58 | 76 | 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 June | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | 20144 | 2013 | 20144 | 2013 |
| Germany Life | 4,447 | 3,674 | 4,447 | 3,674 | 2,657 | 2,605 | 320 | 162 | 67 | 36 |
| Germany Health | 813 | 832 | 813 | 832 | 812 | 831 | 52 | 53 | 78 | 85 |
| Switzerland | 275 | 252 | 273 | 252 | 120 | 86 | 21 | 21 | 61 | 62 |
| Austria | 89 | 87 | 89 | 87 | 65 | 62 | 11 | 11 | 99 | 103 |
| German Speaking Countries | 5,624 | 4,845 | 5,622 | 4,845 | 3,654 | 3,584 | 404 | 247 | 68 | 45 |
| Italy | 3,069 | 2,620 | 3,069 | 2,620 | 108 | 109 | 78 | 74 | 59 | 63 |
| France | 2,076 | 2,139 | 2,076 | 2,139 | 911 | 849 | 93 | 123 | 46 | 67 |
| Benelux5 | 570 | 677 | 570 | 677 | 130 | 131 | 35 | 33 | 91 | 92 |
| Greece | 22 | 23 | 22 | 23 | 13 | 14 | (1) | – | (107) | –8 |
| Turkey6 | 205 | 43 | 51 | 43 | 35 | 10 | 8 | (1) | 144 | (87) |
| Africa | 14 | 12 | 14 | 12 | 6 | 6 | 2 | 1 | 240 | 179 |
| Western&Southern Europe | 5,956 | 5,514 | 5,802 | 5,514 | 1,203 | 1,119 | 215 | 230 | 57 | 67 |
| Latin America | 91 | 113 | 99 | 113 | 49 | 66 | 2 | 2 | 94 | 102 |
| Spain | 289 | 392 | 287 | 392 | 125 | 160 | 46 | 34 | 253 | 214 |
| Portugal | 72 | 52 | 72 | 52 | 20 | 21 | 6 | 5 | 411 | 400 |
| Iberia&Latin America | 452 | 557 | 458 | 557 | 194 | 247 | 54 | 41 | 247 | 215 |
| United States USA |
3,352 3,352 |
1,788 1,788 |
3,520 3,520 |
1,788 1,788 |
232 232 |
220 220 |
203 203 |
100 100 |
108 108 |
56 56 |
| Reinsurance LH | 141 | 134 | 141 | 134 | 102 | 110 | 18 | (15) | 380 | (320) |
| Global Insurance Lines&Anglo Markets | 141 | 134 | 141 | 134 | 102 | 110 | 18 | (15) | 380 | (320) |
| South Korea | 409 | 318 | 395 | 318 | 134 | 124 | 10 | 2 | 40 | 7 |
| Taiwan | 435 | 520 | 462 | 520 | 42 | 40 | – | (3) | –8 | (17) |
| Indonesia | 170 | 190 | 212 | 190 | 86 | 86 | 16 | 16 | 525 | 467 |
| Malaysia | 107 | 91 | 118 | 91 | 48 | 53 | 2 | 6 | 95 | 194 |
| Japan | – | – | – | – | 2 | 2 | 1 | 1 | 6 | 21 |
| Other | 207 | 227 | 230 | 227 | 134 | 159 | 18 | 17 | 214 | 203 |
| Asia-Pacific | 1,328 | 1,346 | 1,417 | 1,346 | 446 | 464 | 47 | 39 | 82 | 70 |
| Poland | 37 | 21 | 37 | 21 | 17 | 6 | 15 | 4 | 1,060 | 380 |
| Slovakia | 62 | 59 | 62 | 59 | 50 | 48 | 8 | 9 | 247 | 295 |
| Hungary | 43 | 31 | 45 | 31 | 12 | 12 | 3 | 3 | 348 | 281 |
| Czech Republic | 56 | 30 | 60 | 30 | 18 | 20 | 3 | 5 | 243 | 301 |
| Russia | 13 | 20 | 16 | 20 | 14 | 20 | – | – | –8 | –8 |
| Croatia | 19 | 15 | 19 | 15 | 18 | 16 | 4 | 1 | 569 | 189 |
| Bulgaria | 10 | 8 | 10 | 8 | 8 | 7 | 2 | 1 | 732 | 274 |
| Romania | 7 | 7 | 7 | 7 | 4 | 4 | 1 | 1 | 685 | 182 |
| Central and Eastern Europe7 | 247 | 191 | 256 | 191 | 140 | 133 | 37 | 23 | 422 | 272 |
| Middle East and North Africa | 39 | 40 | 41 | 40 | 28 | 34 | 6 | 4 | 357 | 283 |
| Global Life | 1 | 1 | 1 | 1 | – | 1 | – | – | –8 | –8 |
| Growth Markets | 1,615 | 1,578 | 1,715 | 1,578 | 614 | 632 | 90 | 66 | 132 | 99 |
| Consolidation9 | (179) | (291) | (183) | (291) | – | – | – | – | –8 | –8 |
| Total | 16,961 | 14,125 | 17,075 | 14,125 | 5,999 | 5,912 | 984 | 669 | 79 | 58 |
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.
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 Kredi Emeklilik.
7 Contains income and expense items from a management holding and consolidations between countries in this region.
8 Presentation not meaningful.
9 Represents elimination of transactions between Allianz Group companies in different geographic regions.
| € mn | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Statutory premiums1 | Premiums earned (net) | Operating profit (loss) | Margin on reserves2 (BPS) | |||||||
| internal3 | ||||||||||
| six months ended 30 June | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | 20144 | 2013 | 20144 | 2013 |
| Germany Life | 9,427 | 8,140 | 9,427 | 8,140 | 5,588 | 5,658 | 596 | 506 | 63 | 57 |
| Germany Health | 1,621 | 1,663 | 1,621 | 1,663 | 1,621 | 1,663 | 76 | 84 | 58 | 68 |
| Switzerland | 1,226 | 1,169 | 1,220 | 1,169 | 354 | 318 | 42 | 41 | 63 | 62 |
| Austria | 206 | 201 | 206 | 201 | 154 | 149 | 23 | 20 | 105 | 95 |
| German Speaking Countries | 12,480 | 11,173 | 12,474 | 11,173 | 7,717 | 7,788 | 737 | 651 | 63 | 60 |
| Italy | 5,439 | 4,715 | 5,439 | 4,715 | 239 | 240 | 125 | 155 | 48 | 67 |
| France | 4,548 | 4,407 | 4,548 | 4,407 | 1,750 | 1,673 | 238 | 238 | 60 | 64 |
| Benelux5 | 1,654 | 1,366 | 1,654 | 1,366 | 260 | 263 | 67 | 59 | 87 | 83 |
| Greece | 46 | 48 | 46 | 48 | 27 | 28 | (1) | (1) | (70) | (58) |
| Turkey6 | 366 | 76 | 96 | 76 | 66 | 19 | 12 | (1) | 112 | (48) |
| Africa | 30 | 30 | 30 | 30 | 14 | 14 | 3 | 2 | 228 | 192 |
| Western&Southern Europe | 12,083 | 10,642 | 11,813 | 10,642 | 2,356 | 2,237 | 444 | 452 | 60 | 67 |
| Latin America | 162 | 189 | 177 | 189 | 77 | 92 | 3 | 3 | 63 | 95 |
| Spain | 642 | 705 | 636 | 705 | 225 | 245 | 94 | 67 | 265 | 207 |
| Portugal | 124 | 100 | 124 | 100 | 41 | 41 | 9 | 10 | 317 | 410 |
| Iberia&Latin America | 928 | 994 | 937 | 994 | 343 | 378 | 106 | 80 | 247 | 209 |
| United States USA |
5,908 5,908 |
3,350 3,350 |
6,170 6,170 |
3,350 3,350 |
459 459 |
428 428 |
372 372 |
201 201 |
100 100 |
58 58 |
| Reinsurance LH | 267 | 266 | 267 | 266 | 184 | 231 | 29 | (8) | 302 | (81) |
| Global Insurance Lines&Anglo Markets | 267 | 266 | 267 | 266 | 184 | 231 | 29 | (8) | 302 | (81) |
| South Korea | 802 | 679 | 797 | 679 | 254 | 254 | 15 | 7 | 30 | 14 |
| Taiwan | 937 | 1,006 | 997 | 1,006 | 82 | 67 | 3 | – | 11 | –8 |
| Indonesia | 304 | 347 | 382 | 347 | 139 | 120 | 33 | 38 | 568 | 575 |
| Malaysia | 202 | 176 | 224 | 176 | 98 | 108 | 9 | 10 | 161 | 174 |
| Japan | – | – | – | – | 3 | 3 | – | 5 | –8 | 47 |
| Other | 422 | 438 | 466 | 438 | 296 | 324 | 38 | 42 | 229 | 245 |
| Asia-Pacific | 2,667 | 2,646 | 2,866 | 2,646 | 872 | 876 | 98 | 102 | 86 | 90 |
| Poland | 85 | 48 | 85 | 48 | 35 | 18 | 18 | 8 | 658 | 304 |
| Slovakia | 128 | 120 | 128 | 120 | 99 | 98 | 16 | 17 | 258 | 289 |
| Hungary | 81 | 109 | 84 | 109 | 23 | 25 | 7 | 4 | 365 | 219 |
| Czech Republic | 89 | 74 | 95 | 74 | 37 | 39 | 7 | 10 | 256 | 345 |
| Russia | 28 | 36 | 33 | 36 | 28 | 36 | – | (1) | –8 | (85) |
| Croatia | 41 | 32 | 41 | 32 | 40 | 32 | 8 | 2 | 527 | 156 |
| Bulgaria | 19 | 16 | 19 | 16 | 16 | 14 | 6 | 2 | 830 | 263 |
| Romania | 12 | 13 | 12 | 13 | 7 | 7 | 3 | 1 | 776 | 216 |
| Central and Eastern Europe7 | 483 | 448 | 497 | 448 | 285 | 269 | 64 | 42 | 365 | 252 |
| Middle East and North Africa | 79 | 80 | 84 | 80 | 58 | 64 | 11 | 8 | 345 | 282 |
| Global Life | 2 | 2 | 2 | 2 | 1 | 1 | – | – | –8 | –8 |
| Growth Markets | 3,231 | 3,176 | 3,449 | 3,176 | 1,216 | 1,210 | 173 | 152 | 128 | 114 |
| Consolidation9 | (773) | (639) | (773) | (639) | – | – | 3 | (4) | –8 | –8 |
| Total | 34,124 | 28,962 | 34,337 | 28,962 | 12,275 | 12,272 | 1,864 | 1,524 | 76 | 66 |
regions.
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.
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 Kredi Emeklilik.
7 Contains income and expense items from a management holding and consolidations between countries in this region.
8 Presentation not meaningful. 9 Represents elimination of transactions between Allianz Group companies in different geographic
Second 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 June | 2014 | 2013 |
| Operating revenues1 | 1,606 | 1,815 |
| Operating profit1 | 675 | 804 |
| Cost-income ratio1 in % | 58.0 | 55.7 |
| Net income1 | 419 | 488 |
| Total assets under management1 as of 30 June in € bn |
1,814 | 1,863 |
| thereof: Third-party assets under management1 as of 30 June in € bn |
1,373 | 1,456 |
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.
35 Balance Sheet Review 42 Reconciliations
As of 30 June 2014, total assets under management amounted to € 1,814 bn. Of this, € 1,373 bn related to our third-party assets under management and € 441 bn to Allianz group assets.
In the first six months of 2014, we recorded net outflows of total assets under management of € 35 bn, of which € 37 bn related to thirdparty assets under management. PIMCO experienced third-party net outflows strongly driven by the United States, while AllianzGI recorded notable third-party net inflows.
Market effects contributed € 90 bn to total assets under management, with € 72 bn at PIMCO and € 18 bn at AllianzGI.
These positive effects were partly offset by negative effects of € 23 bn. This was due to the allocation of certain entities to other business segments which resulted in a decrease of € 33 bn in assets under management. This was partially offset by a change in reporting to include third-party fund of fund assets under management.
We recorded favorable foreign currency translation effects of € 12 bn, in particular on our fixed income assets, mainly resulting from the appreciation of the U.S. Dollar against the Euro.1
In the following section, we focus on the development of third-party assets under management.
As of 30 June 2014, the share of third-party assets under management by business unit was 82.7% attributable to PIMCO and 17.3% to AllianzGI.
1 Based on the location of the asset management company.
2 "America" consists of the United States, Canada and Brazil (approximately € 838 bn, € 14 bn and € 1 bn third-party assets under management as of 30 June 2014, respectively).
3 "Other" consists of third-party assets managed by other Allianz Group companies which were allocated to other business segments as of 1 January 2014.
The regional allocation of third-party assets under management also shifted slightly due to the allocation of certain entities to other business segments. Europe's share rose by 1.7 percentage points, driven by positive market effects and also because of the change in reporting of fund of fund assets.
Mainly due to the impact of market return and by the change in reporting to include third-party fund of fund assets under management, the share of our third-party assets under management increased by one percentage point in favor of equities. This resulted in 86% 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%).
Outperforming third-party assets under management
Underperforming third-party assets under management
1 The investment performance is based on Allianz Asset Management account-based, asset-weighted three-year investment performance of third-party assets versus the primary target including all accounts managed by portfolio managers of Allianz Asset Management. For some retail funds, the net of fee performance is compared to the median performance of the corresponding Morningstar peer group (first and second quartile mean outperformance). For all other retail funds and for all institutional accounts, the gross of fee 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 84 % of our assets outperforming their respective benchmarks (31 December 2013: 85%). 89% of PIMCO assets outperformed their respective benchmarks while 51% of AllianzGI assets outperformed their respective benchmarks.
Operating revenues declined by € 209 mn, or 11.5% to € 1,606 mn. This was mainly driven by lower average third-party assets under management, but also reflects the allocation of certain entities to other business segments. On an internal basis1, operating revenues went down by 5.8%.
Net fee and commission income fell by € 208 mn, or 11.5 % to € 1,601 mn. This was largely a result of a decrease in management fees, mainly resulting from lower average third-party assets under management and – to a smaller extent – lower margins. Our performance fees went down by € 11 mn to € 67 mn.
Our income from financial assets and liabilities carried at fair value through income (net) was up € 4 mn due to mark-to-market valuation of investments in funds, favorable foreign currency effects and positive effects from seed money.
Our operating revenues declined by € 603 mn, or 16.2% to € 3,123 mn. On an internal basis1, operating revenues fell by 11.2 %. This was because of a € 268 mn decrease in performance fees – which were exceptionally high in the first quarter of 2013 – and lower average assets under management.
Our operating profit declined by € 129 mn to € 675 mn. On an internal basis1, operating profit fell by 9.7% due to lower management fees.
Administrative expenses decreased by € 77 mn to € 932 mn, reflecting the decline in operating revenues and lower assets under management related expenses.
Our cost-income ratio increased by 2.3 percentage points mainly as a result of a reduction in management fees.
Due to lower operating revenues, our operating profit decreased by € 383 mn, or 22.5% to € 1,321 mn (internal growth: (17.2%)).
Our cost-income ratio increased by 3.4 percentage points mainly due to the decrease in performance fees.
In the second quarter of 2014, our net income decreased by € 69 mn, or 14.1% to € 419 mn. This is largely consistent with our operating profit development, and also applies to the first six months of 2014 where our net income went down by € 231 mn to € 825 mn.
1 Operating revenues/operating profit adjusted for foreign currency translation and (de-) consolidation effects.
35 Balance Sheet Review 42 Reconciliations
Asset Management BUSINESS segment information
| € MN | ||
|---|---|---|
| three months ended 30 June | six months ended 30 June | ||||
|---|---|---|---|---|---|
| 2014 | 2013 | 2014 | 2013 | ||
| Management and loading fees | 1,891 | 2,089 | 3,716 | 4,072 | |
| Performance fees | 67 | 78 | 86 | 354 | |
| Other | 14 | 12 | 31 | 39 | |
| Fee and commission income | 1,972 | 2,179 | 3,833 | 4,465 | |
| Commissions | (313) | (349) | (620) | (725) | |
| Other | (58) | (21) | (96) | (34) | |
| Fee and commission expenses | (371) | (370) | (716) | (759) | |
| Net fee and commission income | 1,601 | 1,809 | 3,117 | 3,706 | |
| Net interest income1 | (1) | 4 | (1) | 8 | |
| Income from financial assets and liabilities carried at fair value through income (net) | 4 | – | 3 | 7 | |
| Other income | 2 | 2 | 4 | 5 | |
| Operating revenues | 1,606 | 1,815 | 3,123 | 3,726 | |
| Administrative expenses (net), excluding acquisition-related expenses | (932) | (1,009) | (1,805) | (2,017) | |
| Restructuring charges | 1 | (2) | 3 | (5) | |
| Operating expenses | (931) | (1,011) | (1,802) | (2,022) | |
| Operating profit | 675 | 804 | 1,321 | 1,704 | |
| Non-operating items | (3) | (23) | (17) | (54) | |
| Income before income taxes | 672 | 781 | 1,304 | 1,650 | |
| Income taxes | (253) | (293) | (479) | (594) | |
| Net income | 419 | 488 | 825 | 1,056 | |
| Cost-income ratio2 in % | 58.0 | 55.7 | 57.7 | 54.3 |
1 Represents interest and similar income less interest expenses.
2 Represents operating expenses divided by operating revenues.
second quarter 2014
Operating loss decreased by € 55 mn to € 219 mn, with improvements across all three reportable segments.
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 June |
2014 | 2013 |
|---|---|---|
| Operating revenues | 417 | 391 |
| Operating expenses | (636) | (665) |
| Operating result | (219) | (274) |
| Net income (loss) | (248) | (277) |
| € mn | ||
|---|---|---|
| three months ended 30 June | 2014 | 2013 |
| Holding & Treasury | ||
| Operating revenues | 96 | 70 |
| Operating expenses | (340) | (347) |
| Operating result | (244) | (277) |
| Banking | ||
| Operating revenues | 278 | 280 |
| Operating expenses | (261) | (281) |
| Operating result | 17 | (1) |
| Alternative Investments | ||
| Operating revenues | 45 | 42 |
| Operating expenses | (37) | (38) |
| Operating result | 8 | 4 |
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
26 Asset Management
35 Balance Sheet Review 42 Reconciliations
Our operating result improved by € 55 mn to a loss of € 219 mn. This positive development was driven by all three of its reportable segments. Holding&Treasury contributed € 33 mn, Banking € 18 mn and Alternative Investments € 4 mn to this increase.
Our net result also improved from a loss of € 277 mn to a loss of € 248 mn over the same period. Significantly lower non-operating realized gains were more than offset by the favorable development of our operating result and positive tax effects.
Our operating result increased by € 72 mn to a loss of € 441 mn. A higher loss in Holding&Treasury was more than offset by the recovery of our Banking result, which benefited from the closure of the Allianz Bank's business operations in mid-2013.
Our net result improved by € 557 mn to a loss of € 117 mn. This was primarily driven by a one-off benefit from pension revaluation with our German subsidiaries1 and was partly offset by lower non-operating realized gains.
Our operating loss decreased from € 277 mn to € 244 mn. A higher net interest result and reduced administrative expenses more than offset a decline in the net fee and commission result.
Our net interest result increased by € 23 mn to a loss of € 10 mn as interest and similar income rose while interest expenses, excluding interest expenses from external debt, remained stable. Interest and similar income went up from € 53 mn to € 74 mn. This was mainly due to higher income from an increased volume of debt instruments but also from associates and equities. Interest expenses, excluding interest expenses from external debt, remained almost unchanged at € 84 mn (2Q 2013: € 86 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, decreased from € 184 mn to € 161 mn. This was driven by a number of various minor effects.
Our net fee and commission result worsened by € 16 mn to a loss of € 63 mn as a result of higher IT project startup costs – in particular related to our global data center consolidation project.
Investment expenses remained almost stable at € 17 mn (2Q 2013: € 20 mn).
Our operating loss increased by € 48 mn to € 492 mn due to a worsening of both net interest result and net fee and commission result. This was only partly compensated for by lower administrative expenses (net), excluding acquisition-related expenses and one-off effect from pension revaluation,1 and decreased investment expenses. The decrease in the net interest result was mainly driven by lower interest and similar income, as the previous year's figures had benefited from interest payments on our silent participation in Commerzbank, which was redeemed in 2013. The net fee and commission result was down because of higher IT project startup costs.
Our operating result turned from a loss of € 1 mn into a profit of € 17 mn. This recovery was mainly attributable to the closure of the Allianz Bank's business operations in mid-2013.
In the following sections, we focus on the development of our ongoing Banking business. To make the figures comparable, we have excluded the closed business operations of Allianz Bank.
Excluding these operations, the operating profit in Banking improved by € 2 mn to € 15 mn.
Our net interest, fee and commission result increased by € 9 mn to € 125 mn. The net interest result slightly increased from € 79 mn to € 82 mn due to lower interest expenses triggered by lower interest rates offsetting increased deposit volume. Our net fee and commission result improved by € 6 mn to € 43 mn. This was driven by increased management fee income in line with the growth in assets under management.
Administrative expenses increased by € 6 mn to € 97 mn. This was primarily a result of higher provisions paid to financial agents in Italy and, to a lesser extent, slightly increased costs in Germany. The allocation of a former Asset Management entity to the reportable segment Banking in Italy also contributed to this development.
Our loan loss provisions remained almost stable at € 17 mn (2Q 2013: € 14 mn).
Our operating income from financial assets and liabilities carried at fair value through income (net) stood almost unchanged at € 3 mn.
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 increased by € 119 mn to a profit of € 35 mn. Excluding the closed business operations of Allianz Bank, our operating result improved from € 30 mn to € 33 mn. Similar to the second quarter comparison, the € 11 mn increase in our net interest, fee and commission result was largely offset by higher administrative expenses while the loan loss provisions remained stable at € 26 mn (6M 2013: € 27 mn).
Our operating result doubled from € 4 mn to € 8 mn. This was mainly due to a € 7 mn increase in the net interest result which was only partly offset by a € 2 mn lower net fee and commission income.
Our operating result remained almost flat at € 16 mn (6M 2013: € 15 mn) as an upturn in the net interest result was almost offset by a decrease in the net fee and commission income and by higher investment expenses.
35 Balance Sheet Review 42 Reconciliations
In the first six months of 2014, global economic momentum was somewhat less pronounced than originally expected. The slowdown in the first quarter was partly due to disappointing developments in the United States, where curbs on production and demand because of the severe winter contributed to a decline in overall output. Weaker growth in emerging market heavyweights like Brazil and Russia also contributed to lower-than-expected economic momentum in the first half of the year. However, there is a good chance that the global economy will reaccelerate in the second half of 2014. This view is supported by the favorable readings of the purchasing managers' indices for the manufacturing industry, in particular in industrialized countries. Given higher expected growth in the industrialized world than in 2013, global output is likely to expand by 2.7% in 2014. Fears that economic development in emerging markets would deteriorate substantially look unfounded. Nevertheless, they have lost steam since 2012 and will not return to their pre-crisis growth rates, not least due to structural problems in some major emerging market economies. However, with an expected real GDP increase of 4.4% in 2014, growth in these countries will still be considerably higher than in the industrialized world, where we expect an increase of 1.7%. In the Eurozone, the economy is also starting to get back on its feet in crisis-ridden member states, narrowing the "north-south divide". Current economic indicators suggest the economic recovery is set to continue, albeit at a moderate pace. For 2014 as a whole, we expect real GDP growth of 1.2 %. Supported by brighter economic conditions in the Eurozone, the German economy could expand by about 2% this year. Inflation is likely to remain subdued on a global level, not least due to the dire unemployment situation in many industrialized countries, which keeps the lid on wages. Despite the overall favorable growth picture, risks for the global economy have recently increased. In this respect, a further escalation of the conflict between Russia and Ukraine, combined with a spiral of far-reaching economic sanctions and corresponding counter-sanctions, ranks first on the list.
For the remainder of this year, financial markets will probably remain under the twin spell of monetary policy and geopolitical tensions. Regarding the former, we expect to see a gradual exit from crisis mode, led by the U.S. central bank reining in its asset purchases. Given its concerns about low inflation, banking liquidity and lending growth, the European Central Bank will most likely stick to its very expansionary policy stance before eventually starting to exit from crisis mode in 2015. Even though monetary policy would still remain highly accommodative, cautious steps towards an exit could well be accompanied by sharp swings in the equity, bond and currency markets. Although the effects of the sovereign debt crisis in the Eurozone are still being felt, we expect further normalization.
With short-term rates close to zero, there are limited prospects of markedly higher yields on longer-term bonds. We expect yields on 10-year German and U.S. government bonds to climb only modestly until the end of this year. With growth in the United States set to outpace that in the Eurozone, the U.S. Dollar is likely to appreciate moderately against the Euro.
Global economic expansion is set to continue in 2014. Therefore, the macroeconomic environment will be in general supportive of world premium growth. However, differences in growth levels between markets will become wider, reflecting specific political, regulatory and economic conditions. The outlook for profitability remains challenging, as investment returns are expected to stay low and the regulatory environment continues to become more demanding in terms of capital and reserve requirements.
In the property-casualty sector, we anticipate stable premium growth in 2014 as the increase in economic activity bolsters demand for insurance coverage. In particular, the recovery in Europe should pave the way for a return to positive premium growth in almost all parts of the region. Emerging markets should display robust growth rates, which in part are also the result of increasing insurance penetration. However, in some markets tighter regulation and political instability might lead to a more moderate expansion. The increase in
1 The information presented in the sections Economic outlook, Insurance industry outlook and Asset management industry outlook is based on our own estimates.
premium rates on the other hand may slow down somewhat in 2014. Overall, we expect global premium revenue to rise by around 4% in 2014 (adjusted for foreign currency translation effects).
After gradual improvements over the last years, property-casualty profitability is expected to remain stable in 2014. Low yields are working their way through to earnings as price increases slow down and reserve releases dwindle.
In the life sector, we expect premium growth to recover. In mature markets, better economic prospects 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. All in all, we expect that global premium revenue will rise in the 3.5% – 4.5% range in 2014 (adjusted for foreign currency translation effects).
With interest rates remaining at low levels, companies will 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. But despite progress on these fronts, profitability will remain under pressure, not least because of 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 so far in 2014. Nevertheless, considerable downside risks remain and could materialize if global growth fails to meet expectations or political uncertainties come to the fore. A reduction of the currently highly supportive monetary policy may also put the positive trends in financial markets at risk. The further development of regulatory activities – particularly in the consumer protection and transparency fields – is an additional source of uncertainty for the asset management industry.
Although equities may remain vulnerable to setbacks in the near future due to increased valuations, higher interest rates and global demographic trends on the other hand, will increase the attractiveness of bonds. 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.
Improving economic conditions in certain developed markets as well as trends in client demand represent a positive environment for further asset management industry growth. At the same time, industry profitability is expected to remain challenged as asset flows into passive products and growing expenses from higher distribution or marketing costs put pressure on operating margins, and the effects of increased regulatory oversight and reporting take their toll.
In such an environment a money manager's ability to grow is dependent on providing innovative client-focused investment 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 towards profitable growth during the rest of 2014. Currently, we see no need to adjust our published Allianz Group operating profit outlook for 2014 of € 10.0 BN, plus or minus € 0.5 BN but we expect the upper end of the target range to be 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 half year'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 company assumes no obligation to update any information or forward-looking statement contained herein, save for any information required to be disclosed by law.
The statements contained herein may include prospects, statements of future expectations and other forward-looking statements that are based on management's current views and assumptions and involve known and unknown risks and uncertainties. Actual results, performance or events may differ materially from those expressed or implied in such forward-looking statements.
Such deviations may arise due to, without limitation, (i) changes of the general economic conditions and competitive situation, particularly in the Allianz Group's core business and core markets, (ii) performance of financial markets (particularly market volatility, liquidity and credit events) (iii) frequency and severity of insured loss events, including from natural catastrophes, and the development of loss expenses, (iv) mortality and morbidity levels and trends, (v) persistency levels, (vi) particularly in the banking business, the extent of credit defaults, (vii) interest rate levels, (viii) currency exchange rates including the Euro/U.S. Dollar exchange rate, (ix) changes in laws and regulations, including tax regulations, (x) the impact of acquisitions, including related integration issues, and reorganization measures, and (xi) general competitive factors, in each case on a local, regional, national and/or global basis. Many of these factors may be more likely to occur, or more pronounced, as a result of terrorist activities and their consequences.
5 Executive Summary
35 Balance Sheet Review 42 Reconciliations
− Shareholders' equity increased by € 4.9 bn to € 55.0 bn.
26 Asset Management
− Solvency ratio strong at 185%.1
Compared to year-end 2013, shareholders' equity grew by € 4,895 mn – or 9.8% – and amounted to € 54,979 mn as of 30 June 2014. Net income attributable to shareholders contributed € 3,395 mn to this growth. In addition, unrealized gains increased by € 4,399 mn, mainly due to higher fair values of debt securities triggered by the declines in all major government bond yields – in particular within the Eurozone. A € 235 mn increase in foreign currency translation adjustments, mainly driven by the depreciation of the Euro against several currencies – in particular the U.S. Dollar and British Pound but also the Australian Dollar – further contributed to the growth. These effects were only 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".
1 Off-balance sheet reserves are accepted by the authorities as eligible capital only upon request. Allianz SE has not submitted an application so far. Excluding off-balance sheet reserves, the solvency ratio as of 30 June 2014 would be 177% (31 March 2014: 175%; 31 December 2013: 173%).
Compared to 31 December 2013, our conglomerate solvency ratio increased three percentage points to 185%. The Group's eligible capital for solvency purposes went up by € 2.4 bn to € 48.9 bn, including off-balance sheet reserves of € 2.2 bn (31 December 2013: € 2.3 bn). This increase was mainly driven by our net income (net of accrued dividends) of € 2.0 bn. To a lesser extent, it was due to the issuance of a subordinated bond in the first quarter and higher unrealized gains on equities. These positive effects were only partly offset by higher actuarial losses on the valuation of our pension benefit obligation following a decrease in discount rates. The required funds increased by € 0.8 bn to € 26.4 bn, mainly due to higher aggregate policy reserves in Life/Health. As a result, our eligible capital surpassed the minimum legally stipulated level by € 22.5 bn.
1 Off-balance sheet reserves are accepted by the authorities as eligible capital only upon request. Allianz SE has not submitted an application so far. Excluding off-balance sheet reserves, the solvency ratio as of 30 June 2014 would be 177% (31 March 2014: 175%; 31 December 2013: 173%).
2 This does not include non-controlling interests of € 2,833 mn, € 2,835 mn and € 2,765 mn as of 30 June 2014, 31 March 2014 and 31 December 2013, respectively. For further information, please refer to note 20 to the condensed consolidated interim financial statements. Retained earnings include foreign currency translation adjustments of € (3,077) mn, € (3,297) mn and € (3,312) mn as of 30 June 2014, 31 March 2014 and 31 December 2013, respectively.
As of 30 June 2014, total assets amounted to € 754.3 bn and total liabilities were € 696.5 bn. Compared to year-end 2013, total assets and total liabilities increased by € 43.2 bn and € 38.3 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 business.1
Compared to year-end 2013, our investment portfolio grew by € 36.1 bn to € 572.9 bn as of 30 June 2014. This was mainly due to debt securities.
Our gross exposure to equities increased by € 2.7 bn to € 38.3 bn due to new investments and positive equity market developments. 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 stood almost unchanged at € 10.9 bn (31 December 2013: € 10.8 bn) and still accounted for 2% of our investment portfolio.
Our cash and other investments increased by € 1.4 bn to € 11.2 bn. Our diversified exposure to debt instruments increased by € 31.9 bn to € 512.5 bn, but still represented 89% of our investment portfolio. The increase in absolute terms was driven by higher fair values as a result of lower interest rates and, to a lesser extent, new investments.
The allocation of our well-diversified fixed income portfolio remained stable, with marginal increases in the share of corporate and government bonds and minor reductions in the portion of banks and other. About 95% of this portfolio of debt instruments was invested in investment-grade bonds and loans.3
Compared to year-end, our government bond exposure increased by € 14.3 bn to € 193.9 bn and accounted for 38% (31 December 2013: 37%) of our fixed income portfolio. The allocation of our government and government-related bond exposure remained almost unchanged. The overall increase of the government bond exposure was primarily driven by positive market effects. Our sovereign debt exposure in Italy and Spain equaled 6.1% and 1.0% of our fixed income portfolio, respectively. The corresponding unrealized gains (gross) amounted to € 4,094 mn in Italy and € 554 mn in Spain. Our government bond exposure in Portugal remained limited with small unrealized gains.
Our covered bonds increased by € 3.6 bn to € 106.1 bn and still accounted for 21% of our fixed income portfolio. 45% of this portfolio, down by two percentage points, 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 over-collateralization.
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.
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.
5 Executive Summary
11 Property-Casualty Insurance Operations
26 Asset Management 30 Corporate and Other
35 Balance Sheet Review 42 Reconciliations
Our corporate bond portfolio increased by € 13.8 bn to € 130.1 bn and accounted for 25% of our fixed income portfolio. The increase was driven by both new investments and lower yields leading to fair value increases.
Our exposure to bank securities decreased by € 1.5 bn to € 31.6 bn, mainly due to matured investments. This exposure represented 6% of our fixed income portfolio, down one percentage point. Thereof, the exposure to subordinated securities in banks slightly increased from € 4.8 bn as of 31 December 2013 to € 5.3 bn.
Our exposure to asset-backed securities (ABS) increased by € 1.6 bn to € 20.0 bn and still accounted for 4 % of our fixed income portfolio. The increase was mainly related to new investments. About 73% 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 two percentage points 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 June |
six months ended 30 June |
||
|---|---|---|---|---|
| 2014 | 2013 | 2014 | 2013 | |
| Interest and similar income (net)1 | 5,437 | 5,311 | 10,478 | 10,368 |
| Income from financial assets and liabilities carried at fair value through income (net) |
(53) | (701) | (372) | (926) |
| Realized gains/losses (net) | 1,026 | 1,191 | 1,932 | 2,337 |
| Impairments of investments (net) | (74) | (182) | (436) | (316) |
| Investment expenses | (232) | (217) | (431) | (425) |
| Investment income (net) | 6,104 | 5,402 | 11,171 | 11,038 |
1 Net of interest expenses (excluding interest expenses from external debt).
Our investment income (net) increased by € 702 mn – or 13.0 % – to € 6,104 mn. A recovery of our income from financial assets and liabilities carried at fair value through income (net) was the main driver of this increase.
Income from financial assets and liabilities carried at fair value through income (net) recovered from a loss of € 701 mn to a loss of € 53 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 rate-related exposures. The recovery in this quarter was mainly due to the absence of foreign currency losses, which were primarily related to depreciations of selected emerging markets currencies in the second quarter of 2013.
Our interest and similar income (net)1 increased by € 126 mn to € 5,437 mn. Higher income from equities contributed € 106 mn to this increase. Income from debt instruments remained rather stable as the higher asset base compensated for slightly lower interest yields.
Realized gains and losses (net) contracted by € 165 mn to € 1,026 mn. This was driven by both lower realized gains on equities and debt instruments as some major realizations from the previous year's quarter did not reoccur, which were only partly offset by higher realized gains on real estate.
Impairments (net) more than halved from € 182 mn to a comparatively low level of € 74 mn thanks to favorable market developments.
Investment expenses increased from € 217 mn to € 232 mn mainly due to higher management expenses as well as higher expenses related to real estate investments.
Our investment income (net) improved only slightly from € 11,038 mn to € 11,171 mn due to the positive development of the second quarter of 2014 compared to previous year's quarter. The improvement in income from financial assets and liabilities carried at fair value through income (net) and the slight increase in interest and similar income (net)1 were partly counterbalanced by lower realized gains and moderately increased impairments.
Income from financial assets and liabilities carried at fair value through income (net) improved by € 554 mn to a loss of € 372 mn and our interest and similar income (net)1 increased by € 110 mn to € 10,478 mn. Both increases were primarily driven by the second quarter developments mentioned above.
Realized gains and losses (net) decreased by € 405 mn to € 1,932 mn – primarily as a result of lower realizations on equities but also lower realizations on debt instruments compared to the first six months of 2013.
Driven by higher impairments in the first quarter, mainly related to emerging market debt funds triggered by unfavorable currency movements, impairments (net) increased from € 316 mn to € 436 mn.
Investment expenses remained almost unchanged at € 431 mn (6M 2013: € 425 mn).
1 Net of interest expenses (excluding interest expenses from external debt).
Compared to year-end, the Property-Casualty asset base increased by € 3.1 bn to € 104.2 bn. This was primarily driven by higher debt securities and equities.
| as of | as of |
|---|---|
| 30 June | 31 December |
| 2014 | 2013 |
| 0.4 | 0.5 |
| 0.1 | 0.1 |
| – | – |
| 0.5 | 0.6 |
| 6.0 | 5.0 |
| 69.5 | 67.0 |
| 5.0 | 4.9 |
| 7.9 | 7.5 |
| 88.4 | 84.4 |
| 15.3 | 16.1 |
| 104.2 | 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 € (0.1) bn and € (0.1) bn as of 30 June 2014 and 31 December 2013, respectively.
4 Including cash and cash equivalents, as stated in our business segment balance sheet of € 3.6 bn and € 2.8 bn and receivables from cash pooling amounting to € 3.8 bn and € 3.4 bn, net of liabilities from securities lending and derivatives of € (0.2) bn and € (0.3) bn, as well as liabilities from cash pooling of € (2.2) bn and € (1.0) bn as of 30 June 2014 and 31 December 2013, respectively.
As of 30 June 2014, ABS within the Property-Casualty asset base amounted to € 3.8 bn (31 December 2013: € 3.7 bn), representing 3.6% (31 December 2013: 3.7%) of this 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 |
(8.7) | 0.7 | (8.0) |
| Loss and loss adjustment expenses incurred in previous years |
(0.7) | 0.1 | (0.6) |
| Foreign currency translation adjustments and other changes |
0.7 | (0.1) | 0.6 |
| Changes in reserves for loss and loss adjustment expenses in current year |
9.7 | (0.9) | 8.8 |
| Subtotal | 60.8 | (6.6) | 54.2 |
| Ending balance of discounted loss reserves2 |
(3.5) | 0.3 | (3.2) |
| As of 30 June 2014 | 57.3 | (6.3) | 51.0 |
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 June 2014, the business segment's gross reserves for loss and loss adjustment expenses and discounted loss reserves amounted to € 60.8 bn – an increase of € 1.0 bn compared to year-end. On a net basis, our reserves – including discounted loss reserves – increased from € 53.4 bn to € 54.2 bn. Foreign currency translation effects and other changes amounted to a plus of € 0.6 bn on a net basis.
3 These do not include affiliates of € 8.9 bn and € 8.9 bn as of 30 June 2014 and 31 December 2013, respectively.
5 Executive Summary
30 Corporate and Other
35 Balance Sheet Review 42 Reconciliations
The Life/Health asset base grew by € 38.8 bn – or 8.0% – to € 525.3 bn. This was mainly due to the increased exposure to debt securities but also to higher equities and cash and cash pool assets for the same reasons as those for the developments within our overall investment portfolio.
| € bn | ||
|---|---|---|
| as of | as of | |
| 30 June | 31 December | |
| 2014 | 2013 | |
| Financial assets and liabilities carried at fair value through income |
||
| Equities | 1.9 | 1.4 |
| Debt securities | 2.3 | 2.5 |
| Other1 | (4.9) | (4.2) |
| Subtotal | (0.7) | (0.3) |
| Investments2 | ||
| Equities | 30.4 | 28.9 |
| Debt securities | 300.6 | 269.4 |
| Cash and cash pool assets3 | 8.7 | 7.5 |
| Other | 10.1 | 10.0 |
| Subtotal | 349.8 | 315.8 |
| Loans and advances to banks and customers | 89.3 | 89.9 |
| Financial assets for unit-linked contracts4 | 86.9 | 81.1 |
| Life/Health asset base | 525.3 | 486.5 |
1 This comprises assets of € 1.3 bn and € 1.7 bn and liabilities (including the market value liability option) of € (6.2) bn and € (5.9) bn as of 30 June 2014 and 31 December 2013, respectively.
ABS within the Life/Health business segment increased by € 1.1 bn to € 14.9 bn, mainly due to new investments. This exposure still represented 2.8% of the business segment's asset base.
| ٠ ь |
|
|---|---|
| € 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) | 1.3 | 1.7 | 3.0 |
| Changes in fund value | 2.7 | 1.0 | 3.7 |
| Foreign currency translation adjustments |
0.3 | – | 0.3 |
| Other changes | (1.3) | 0.1 | (1.2) |
| As of 30 June 2014 | 58.4 | 28.5 | 86.9 |
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 increased by € 5.8 bn – or 7.2 % – to € 86.9 Bn. Unit-linked insurance contracts increased by € 3.0 bn to € 58.4 bn due to good fund performance (€ 2.7 bn) and premium inflows exceeding outflows by € 1.3 bn, partly offset by transfers to the general account in France (€ (0.6) bn). Unit-linked investment contracts increased by € 2.8 bn to € 28.5 bn, with premium inflows significantly exceeding outflows (net € 1.7 bn). Currency effects reflected the stronger U.S. Dollar (€ 0.1 bn) and Asian currencies (€ 0.2 bn).1
Life/Health reserves for insurance and investment contracts increased by € 26.6 bn – or 6.8% – to € 417.5 bn in the first six months of 2014. The € 13.2 bn increase in aggregate policy reserves was mainly driven by our operations in Germany (€ 5.4 bn), the United States (€ 4.1 bn before currency effects), Italy (€ 1.0 bn), Luxembourg (€ 0.6 bn) and Switzerland (€ 0.6 bn before currency effects). Reserves for premium refund increased by € 12.4 bn due to higher unrealized gains to be shared with policyholders. Currency effects resulted from the stronger U.S. Dollar (€ 0.4 bn), Asian currencies (€ 0.5 bn) and the Swiss Franc (€ 0.1 bn).1
1 Based on the closing rate on the respective balance sheet dates.
26 Asset Management
2 These do not include affiliates of € 0.1 bn and € 0.8 bn as of 30 June 2014 and 31 December 2013, respectively.
3 Including cash and cash equivalents, as stated in our business segment balance sheet, of € 7.5 bn and € 5.8 bn and receivables from cash pooling amounting to € 3.6 bn and € 3.4 bn, net of liabilities from securities lending and derivatives of € (2.3) bn and € (1.7) bn, as well as liabilities from cash pooling of € (0.1) bn and € (0.0) bn as of 30 June 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 € 4.4 bn to € 2.4 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 almost halved from € 4.0 bn to € 2.1 bn, primarily due to the above-mentioned allocation.
The Corporate and Other asset base increased by € 1.1 bn to € 42.4 bn. A slight decrease in loans and advances to banks and customers was more than compensated for by an increased volume of debt securities and, to a lesser extent, equities.
| € bn | ||
|---|---|---|
| as of | as of | |
| 30 June | 31 December | |
| 2014 | 2013 | |
| Financial assets and liabilities carried at fair value through income |
||
| Equities | 0.1 | – |
| Debt securities | 0.3 | – |
| Other1 | (0.4) | (0.2) |
| Subtotal | – | (0.2) |
| Investments2 | ||
| Equities | 1.9 | 1.7 |
| Debt securities | 27.9 | 26.3 |
| Cash and cash pool assets3 | (4.7) | (5.0) |
| Other | 0.3 | 0.3 |
| Subtotal | 25.4 | 23.3 |
| Loans and advances to banks and customers | 17.0 | 18.2 |
| Corporate and Other asset base | 42.4 | 41.3 |
1 This comprises assets of € 0.1 bn and € 0.3 bn and liabilities of € (0.5) bn and € (0.5) bn as of 30 June 2014 and 31 December 2013, respectively.
2 These do not include affiliates of € 77.0 bn and € 75.4 bn as of 30 June 2014 and 31 December 2013, respectively.
3 Including cash and cash equivalents, as stated in our business segment balance sheet, of € 1.3 bn and € 1.5 bn and receivables from cash pooling amounting to € 1.8 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 € (7.8) bn and € (7.0) bn as of 30 June 2014 and 31 December 2013, respectively.
ABS amounted to € 1.3 bn as of 30 June 2014, up by € 0.4 bn compared to year-end. This represented 3.1% (31 December 2013: 2.2%) of the Corporate and Other's asset base.
Compared to year-end, subordinated liabilities decreased by € 1.1 bn to € 10.4 bn as of 30 June 2014 as the redemption of a € 1.5 bn perpetual bond was only partly offset by the issuance of an undated subordinated bond with a volume of CHF 500 mn in the first quarter of 2014. Other liabilities increased by € 1.5 bn to € 25.1 bn. This was driven by higher liabilities from cash pooling and other provisions mainly related to pension obligations. Certificated liabilities were down by € 0.4 bn to € 12.8 bn.2
2 For further information on Allianz SE debt as of 30 June 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.
35 Balance Sheet Review
42 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 | € 30.8 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 | € 3.5 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 | € 36.5 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 | € 26.8 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 | € 11.8 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 | € 20.7 mn | |
| Total interest expenses for senior bonds | € 130.1 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 | € 32.9 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 |
|
|---|---|---|
| Interest expenses | € 57.7 mn | |
1 For further information on Allianz SE debt (issued or guaranteed) as of 30 June 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 | € 42.7 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 | € 31.5 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 | € 21.3 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 | € 20.7 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 | € 35.7 mn | |
| 3.25% bond issued by Allianz SE | ||
| Volume | CHF 0.5 bn | |
| Year of issue | 2014 | |
| Maturity date | perpetual bond | |
| ISIN | CH 023 483 337 1 | |
| Interest expenses | € 5.7 mn | |
| Total interest expenses for subordinated bonds | € 248.2 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 |
not presented in the table € 29.4 mn Total interest expenses from external debt € 410.9 mn 3 The terms of the subordinated bonds do not explicitly provide for early termination rights in favor of the
Sum of interest expenses1 € 381.5 mn
Interest expenses from external debt
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 June | six months ended 30 June | |||
| 2014 | 2013 | 2014 | 2013 | |
| Property-Casualty | ||||
| Gross premiums written | 10,846 | 10,754 | 26,063 | 25,951 |
| Life/Health | ||||
| Statutory premiums | 16,961 | 14,125 | 34,124 | 28,962 |
| Asset Management | ||||
| Operating revenues | 1,606 | 1,815 | 3,123 | 3,726 |
| consisting of: | ||||
| Net fee and commission income | 1,601 | 1,809 | 3,117 | 3,706 |
| Net interest income | (1) | 4 | (1) | 8 |
| Income from financial assets and liabilities carried at fair value through income (net) |
4 | – | 3 | 7 |
| Other income | 2 | 2 | 4 | 5 |
| Corporate and Other | ||||
| Total revenues (Banking) | 132 | 132 | 271 | 280 |
| consisting of: | ||||
| Interest and similar income | 149 | 154 | 299 | 311 |
| Income from financial assets and liabilities carried at fair value through income (net) |
4 | 3 | 6 | 5 |
| Fee and commission income | 125 | 125 | 241 | 245 |
| Interest expenses, excluding interest expenses from external debt | (65) | (72) | (131) | (145) |
| Fee and commission expenses | (81) | (74) | (146) | (134) |
| Consolidation effects (Banking within Corporate and Other) | – | (4) | 2 | (2) |
| Consolidation | (89) | (50) | (161) | (95) |
| Allianz Group total revenues | 29,456 | 26,776 | 63,420 | 58,824 |
5 Executive Summary
35 Balance Sheet Review 42 Reconciliations
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 June | six months ended 30 June | |||||||
|---|---|---|---|---|---|---|---|---|---|
| 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 | 2.6 | 0.9 | (2.6) | 0.9 | 2.2 | 0.8 | (2.6) | 0.4 | |
| Life/Health | 20.9 | 1.2 | (2.0) | 20.1 | 18.6 | 1.0 | (1.8) | 17.8 | |
| Asset Management | (5.8) | (2.2) | (3.5) | (11.5) | (11.2) | (2.3) | (2.7) | (16.2) | |
| Corporate and Other | (2.3) | 2.3 | – | – | (6.1) | 2.9 | – | (3.2) | |
| Allianz Group | 11.5 | 0.8 | (2.3) | 10.0 | 9.3 | 0.7 | (2.2) | 7.8 |
Pages 46 – 107
| 78 | 5 Financial assets carried at fair value through income |
|---|---|
| 78 | 6 Investments |
| 80 | 7 Loans and advances to banks and customers |
| 80 | 8 Reinsurance assets |
| 80 | 9 Deferred acquisition costs |
| 80 | 10 Other assets |
| 81 | 11 Non-current assets classified as held for sale |
| 81 | 12 Intangible assets |
| 82 | 13 Financial liabilities carried at fair value through income |
| 82 | 14 Liabilities to banks and customers |
| 83 | 15 Reserves for loss and loss adjustment expenses |
| 84 | 16 Reserves for insurance and investment contracts |
| 84 | 17 Other liabilities |
| B | Condensed Consolidated Interim Financial Statements | |||
|---|---|---|---|---|
| 47 Consolidated Balance Sheets | 49 Consolidated Statements of | 50 Consolidated Statements of Changes | 51 Consolidated Statements of Cash Flows | |
| 48 Consolidated Income Statements | Comprehensive Income | in Equity | 53 Notes |
€ mn
| note | as of 30 June 2014 |
as of 31 December 2013 |
|
|---|---|---|---|
| ASSETS | |||
| Cash and cash equivalents | 12,704 | 11,207 | |
| Financial assets carried at fair value through income | 5 | 6,242 | 6,661 |
| Investments | 6 | 448,429 | 411,148 |
| Loans and advances to banks and customers | 7 | 114,370 | 116,800 |
| Financial assets for unit-linked contracts | 86,895 | 81,064 | |
| Reinsurance assets | 8 | 13,311 | 12,609 |
| Deferred acquisition costs | 9 | 21,772 | 22,203 |
| Deferred tax assets | 1,606 | 1,508 | |
| Other assets | 10 | 35,634 | 34,632 |
| Non-current assets classified as held for sale | 11 | 285 | 147 |
| Intangible assets | 12 | 13,082 | 13,100 |
| Total assets | 754,330 | 711,079 |
| Financial liabilities carried at fair value through income | 13 | 6,351 | 6,013 |
|---|---|---|---|
| Liabilities to banks and customers | 14 | 22,650 | 23,109 |
| Unearned premiums | 21,715 | 18,212 | |
| Reserves for loss and loss adjustment expenses | 15 | 67,692 | 66,566 |
| Reserves for insurance and investment contracts | 16 | 431,134 | 404,072 |
| Financial liabilities for unit-linked contracts | 86,895 | 81,064 | |
| Deferred tax liabilities | 4,842 | 3,178 | |
| Other liabilities | 17 | 36,674 | 36,432 |
| Certificated liabilities | 18 | 8,090 | 8,030 |
| Subordinated liabilities | 19 | 10,475 | 11,554 |
| Total liabilities | 696,518 | 658,230 | |
| Shareholders' equity | 54,979 | 50,084 | |
| Non-controlling interests | 2,833 | 2,765 | |
| Total equity | 20 | 57,812 | 52,849 |
| Total liabilities and equity | 754,330 | 711,079 |
| € mn | three months ended 30 June | six months ended 30 June | |||
|---|---|---|---|---|---|
| note | 2014 | 2013 | 2014 | 2013 | |
| Gross premiums written | 17,097 | 16,848 | 38,908 | 38,653 | |
| Ceded premiums written | (1,130) | (1,252) | (2,492) | (2,697) | |
| Change in unearned premiums | 733 | 695 | (3,030) | (2,993) | |
| Premiums earned (net) | 21 | 16,700 | 16,291 | 33,386 | 32,963 |
| Interest and similar income | 22 | 5,538 | 5,413 | 10,677 | 10,580 |
| Income from financial assets and liabilities carried at fair value through income (net) | 23 | (53) | (701) | (372) | (926) |
| Realized gains/losses (net) | 24 | 1,026 | 1,191 | 1,932 | 2,337 |
| Fee and commission income | 25 | 2,538 | 2,679 | 4,946 | 5,433 |
| Other income | 26 | 45 | 42 | 123 | 102 |
| Income from fully consolidated private equity investments | 27 | 174 | 184 | 343 | 362 |
| Total income | 25,968 | 25,099 | 51,035 | 50,851 | |
| Claims and insurance benefits incurred (gross) | (12,962) | (12,877) | (25,294) | (25,059) | |
| Claims and insurance benefits incurred (ceded) | 705 | 905 | 1,228 | 1,449 | |
| Claims and insurance benefits incurred (net) | 28 | (12,257) | (11,972) | (24,066) | (23,610) |
| Change in reserves for insurance and investment contracts (net) | 29 | (3,598) | (3,071) | (7,038) | (7,170) |
| Interest expenses | 30 | (308) | (335) | (610) | (686) |
| Loan loss provisions | 31 | (15) | (15) | (24) | (29) |
| Impairments of investments (net) | 32 | (74) | (182) | (436) | (316) |
| Investment expenses | 33 | (232) | (217) | (431) | (425) |
| Acquisition and administrative expenses (net) | 34 | (5,704) | (5,802) | (11,034) | (11,291) |
| Fee and commission expenses | 35 | (831) | (788) | (1,613) | (1,566) |
| Amortization of intangible assets | (25) | (16) | (49) | (57) | |
| Restructuring charges | 8 | (6) | 9 | (100) | |
| Other expenses | 36 | (26) | (8) | (56) | (54) |
| Expenses from fully consolidated private equity investments | 27 | (174) | (188) | (348) | (370) |
| Total expenses | (23,236) | (22,600) | (45,696) | (45,674) | |
| Income before income taxes | 2,732 | 2,499 | 5,339 | 5,177 | |
| Income taxes | 37 | (874) | (824) | (1,741) | (1,701) |
| Net income Net income attributable to: |
1,858 | 1,675 | 3,598 | 3,476 | |
| Non-controlling interests | 103 | 87 | 203 | 181 | |
| Shareholders | 1,755 | 1,588 | 3,395 | 3,295 | |
| Basic earnings per share (€) | 39 | 3.87 | 3.50 | 7.48 | 7.27 |
| Diluted earnings per share (€) | 39 | 3.84 | 3.47 | 7.41 | 7.18 |
47 Consolidated Balance Sheets 48 Consolidated Income Statements 49 Consolidated Statements of Comprehensive Income
50 Consolidated Statements of Changes in Equity
51 Consolidated Statements of Cash Flows 53 Notes
| € mn | three months ended 30 June | six months ended 30 June | ||
|---|---|---|---|---|
| 2014 | 2013 | 2014 | 2013 | |
| Net income | 1,858 | 1,675 | 3,598 | 3,476 |
| 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 | 232 | (525) | 248 | (236) |
| Subtotal | 232 | (525) | 248 | (236) |
| Available-for-sale investments | ||||
| Reclassifications to net income | (177) | (380) | (271) | (557) |
| Changes arising during the period | 2,374 | (2,701) | 4,688 | (2,977) |
| Subtotal | 2,197 | (3,081) | 4,417 | (3,534) |
| Cash flow hedges | ||||
| Reclassifications to net income | 15 | – | 13 | (1) |
| Changes arising during the period | 30 | (69) | 35 | (62) |
| Subtotal | 45 | (69) | 48 | (63) |
| Share of other comprehensive income of associates | ||||
| Reclassifications to net income | – | – | – | – |
| Changes arising during the period | (8) | (36) | 1 | (15) |
| Subtotal | (8) | (36) | 1 | (15) |
| Miscellaneous | ||||
| Reclassifications to net income | – | – | – | – |
| Changes arising during the period | 12 | 4 | (17) | 88 |
| Subtotal | 12 | 4 | (17) | 88 |
| Items that may never be reclassified to profit or loss | ||||
| Actuarial gains and losses on defined benefit plans | (334) | 17 | (690) | (24) |
| Total other comprehensive income | 2,144 | (3,690) | 4,007 | (3,784) |
| Total comprehensive income | 4,002 | (2,015) | 7,605 | (308) |
| Total comprehensive income attributable to: | ||||
|---|---|---|---|---|
| Non-controlling interests | 136 | 32 | 278 | 168 |
| Shareholders | 3,866 | (2,047) | 7,327 | (476) |
For further details concerning income taxes relating to components of the 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) | 10,122 | 50,388 | 2,575 | 52,963 |
| Total comprehensive income1 | – | 3,319 | (231) | (3,564) | (476) | 168 | (308) |
| Paid-in capital | – | – | – | – | – | – | – |
| Treasury shares | – | 3 | – | – | 3 | – | 3 |
| Transactions between equity holders | – | (11) | – | 1 | (10) | 21 | 11 |
| Dividends paid | – | (2,039) | – | – | (2,039) | (206) | (2,245) |
| Balance as of 30 June 2013 | 28,815 | 14,796 | (2,304) | 6,559 | 47,866 | 2,558 | 50,424 |
| Balance as of 1 January 2014 | 28,870 | 17,785 | (3,312) | 6,741 | 50,084 | 2,765 | 52,849 |
| Total comprehensive income1 | – | 2,694 | 234 | 4,399 | 7,327 | 278 | 7,605 |
| Paid-in capital | – | – | – | – | – | – | |
| Treasury shares | – | 4 | – | – | 4 | – | 4 |
| Transactions between equity holders | – | (32) | 1 | – | (31) | (5) | (36) |
| Dividends paid | – | (2,405) | – | – | (2,405) | (205) | (2,610) |
| Balance as of 30 June 2014 | 28,870 | 18,046 | (3,077) | 11,140 | 54,979 | 2,833 | 57,812 |
1 Total comprehensive income in shareholders' equity for the six months ended 30 June 2014 comprises net income attributable to shareholders of € 3,395 mn (2013: € 3,295 mn).
47 Consolidated Balance Sheets 48 Consolidated Income Statements 49 Consolidated Statements of Comprehensive Income
50 Consolidated Statements of Changes in Equity
51 Consolidated Statements of Cash Flows 53 Notes
| € mn six months ended 30 June |
2014 | 2013 |
|---|---|---|
| Summary | ||
| Net cash flow provided by operating activities | 19,212 | 13,119 |
| Net cash flow used in investing activities | (13,339) | (8,437) |
| Net cash flow used in financing activities | (4,420) | (4,136) |
| Effect of exchange rate changes on cash and cash equivalents | 44 | (14) |
| Change in cash and cash equivalents | 1,497 | 532 |
| Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period |
11,207 12,704 |
12,437 12,969 |
| Cash flow from operating activities Net income |
3,598 | 3,476 |
| Adjustments to reconcile net income to net cash flow provided by operating activities | ||
| Share of earnings from investments in associates and joint ventures | (94) | (46) |
| 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 |
(1,496) | (2,021) |
| Other investments, mainly financial assets held for trading and designated at fair value through income | 185 | 1,262 |
| Depreciation and amortization | 579 | 528 |
| Loan loss provisions | 24 | 29 |
| Interest credited to policyholder accounts | 2,061 | 1,798 |
| Net change in: | ||
| Financial assets and liabilities held for trading | 984 | 9 |
| Reverse repurchase agreements and collateral paid for securities borrowing transactions | 475 | 16 |
| Repurchase agreements and collateral received from securities lending transactions | 284 | 640 |
| Reinsurance assets | (601) | (910) |
| Deferred acquisition costs | (980) | (618) |
| Unearned premiums | 3,351 | 3,441 |
| Reserves for loss and loss adjustment expenses | 721 | (280) |
| Reserves for insurance and investment contracts | 11,986 | 5,841 |
| Deferred tax assets/liabilities | 56 | 257 |
| Other (net) | (1,921) | (303) |
| Subtotal | 15,614 | 9,643 |
| Net cash flow provided by operating activities | 19,212 | 13,119 |
| € mn six months ended 30 June |
2014 | 2013 |
|---|---|---|
| Cash flow from investing activities | ||
| Proceeds from the sale, maturity or repayment of: | ||
| Financial assets designated at fair value through income | 415 | 872 |
| Available-for-sale investments | 65,247 | 59,948 |
| Held-to-maturity investments | 379 | 385 |
| Investments in associates and joint ventures | 257 | 196 |
| Non-current assets classified as held for sale | 16 | 24 |
| Real estate held for investment | 210 | 170 |
| Loans and advances to banks and customers (purchased loans) | 5,602 | 3,768 |
| Property and equipment | 76 | 87 |
| Subtotal | 72,202 | 65,450 |
| Payments for the purchase or origination of: | ||
| Financial assets designated at fair value through income | (587) | (467) |
| Available-for-sale investments | (80,041) | (68,879) |
| Held-to-maturity investments | (218) | (162) |
| Investments in associates and joint ventures | (333) | (388) |
| Non-current assets classified as held for sale | (21) | – |
| Real estate held for investment | (365) | (362) |
| Loans and advances to banks and customers (purchased loans) | (2,297) | (3,358) |
| Property and equipment | (628) | (574) |
| Subtotal | (84,490) | (74,190) |
| Business combinations: | ||
| Proceeds from sale of subsidiaries, net of cash disposed | – | – |
| Acquisitions of subsidiaries, net of cash acquired | – | – |
| Change in other loans and advances to banks and customers (originated loans) | (952) | 269 |
| Other (net) | (99) | 34 |
| Net cash flow used in investing activities | (13,339) | (8,437) |
| Cash flow from financing activities | ||
| Net change in liabilities to banks and customers | (696) | (716) |
| Proceeds from the issuance of certificated liabilities and subordinated liabilities | 1,387 | 3,607 |
| Repayments of certificated liabilities and subordinated liabilities | (2,463) | (4,806) |
| Cash inflow from capital increases | – | – |
| Transactions between equity holders | (36) | 11 |
| Dividends paid to shareholders | (2,610) | (2,245) |
| Net cash from sale or purchase of treasury shares | 5 | 6 |
| Other (net) | (7) | 7 |
| Net cash flow used in financing activities | (4,420) | (4,136) |
| Supplementary information to the consolidated statements of cash flows | ||
| Income taxes paid | (1,312) | (1,895) |
| Dividends received | 891 | 822 |
| Interest received | 10,068 | 10,120 |
| Interest paid | (622) | (728) |
47 Consolidated Balance Sheets 48 Consolidated Income Statements 49 Consolidated Statements of Comprehensive Income
50 Consolidated Statements of Changes in Equity
51 Consolidated Statements of Cash Flows 53 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.
These condensed consolidated interim financial statements of the Allianz Group were authorized for issue by the Board of Management on 7 August 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 | (584) | 6,661 |
| 411,015 | 133 | 411,148 |
| 711,530 | (451) | 711,079 |
| 36,883 | (451) | 36,432 |
| 658,681 | (451) | 658,230 |
| 711,530 | (451) | 711,079 |
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 € 451 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 in a first step the distribution activities of the Property-Casualty insurance branch of UnipolSai Assicurazioni S.p.A., Bologna, which includes, inter alia, a network of 725 agencies and 470 employees dedicated to the management of such activities. In a second step as part of the transaction, the Property-Casualty insurance portfolio managed by the transferred agencies, with premiums equal to approximately € 1.1 bn will be acquired. This second step shall become effective on 31 December 2014, subject to the approval by the Italian insurance regulator Istituto per la Vigilanza sulle Assicurazioni (IVASS).
The acquired distribution activities including the insurance portfolio allow the Allianz Group to take a unique opportunity to further increase market share in a key profitable market.
The aggregate consideration to be paid amounts to a maximum of € 440 mn. It includes a one-off payment of € 200 mn plus a contingent consideration arrangement which requires the Allianz Group to pay the seller a certain multiple of the premiums attributable to policies renewed and transferred during a specified period after the acquisition date up to a maximum of € 240 mn. The potential amount of the future payment that the Allianz Group could be required to make under the contingent consideration arrangement is between € 0 mn and € 240 mn and is expected to be paid in January 2015.
Acquisition-related costs in the amount of € 15 mn (including € 6 mn registration taxes and € 3 mn legal and consulting fees) are included in administrative expenses.
Any resulting goodwill of the acquired business is expected to be deductible for income tax purposes.
At the time the condensed consolidated interim financial statements were authorized for issue, the initial accounting for the business combination was incomplete due to the pending valuations for intangible assets, receivables from agents, other assets, agent liabilities, current and deferred tax liabilities, other liabilities and goodwill.
In addition, the Allianz Group has not yet received access to the figures relating to the purchased business for the six months ended 30 June 2014. Accordingly, at this stage, it is not possible to provide pro forma consolidated figures for gross premiums written, total revenues and net income of the combined entity (Allianz Group including the distribution activities of the Property-Casualty insurance branch of UnipolSai Assicurazioni S.p.A.) for the six months ended 30 June 2014, as though the acquisition date had occurred on 1 January 2014.
49 Consolidated Statements of
Comprehensive Income
50 Consolidated Statements of Changes in Equity
51 Consolidated Statements of Cash Flows 53 Notes
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 and 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.
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.
Consolidated Balance Sheets Consolidated Income Statements Consolidated Statements of Comprehensive Income Consolidated Statements of Changes in Equity Consolidated Statements of Cash Flows 53 Notes
| as of 30 June 2014 |
as of 31 December 2013 |
as of 30 June 2014 |
as of 31 December 2013 |
|---|---|---|---|
| 3,621 | 2,773 | 7,463 | 5,828 |
| 629 | 639 | 5,524 | 5,548 |
| 92,316 | 88,432 | 341,310 | 309,037 |
| 15,251 | 16,131 | 89,248 | 89,922 |
| – | – | 86,895 | 81,064 |
| 8,542 | 7,922 | 4,818 | 4,717 |
| 4,692 | 4,354 | 17,080 | 17,690 |
| 1,195 | 1,083 | 234 | 261 |
| 22,467 | 21,664 | 17,595 | 17,850 |
| 155 | 131 | 126 | – |
| 2,464 | 2,478 | 3,011 | 2,640 |
| 151,332 | 145,607 | 573,304 | 534,557 |
| Property-Casualty | Life/Health |
€ mn Property-Casualty Life/Health Asset Management Corporate and Other Consolidation Group as of 30 June 2014 as of 31 December 2013 as of 30 June 2014 as of 31 December 2013 LIABILITIES AND EQUITY Financial liabilities carried at fair value through income 85 78 6,208 5,869 – 1 505 534 (447) (469) 6,351 6,013 Liabilities to banks and customers 973 1,189 4,072 2,260 187 1,314 20,420 21,337 (3,002) (2,991) 22,650 23,109 Unearned premiums 18,739 15,367 2,994 2,855 – – – – (18) (10) 21,715 18,212 Reserves for loss and loss adjustment expenses 57,339 56,614 10,370 9,961 – – – – (17) (9) 67,692 66,566 Reserves for insurance and investment contracts 13,853 13,389 417,475 390,873 – – – – (194) (190) 431,134 404,072 Financial liabilities for unit-linked contracts – – 86,895 81,064 – – – – – – 86,895 81,064 Deferred tax liabilities 2,420 2,154 3,653 2,420 2 124 193 164 (1,426) (1,684) 4,842 3,178 Other liabilities 16,545 17,128 13,466 14,008 1,928 2,591 25,112 23,605 (20,377) (20,900) 36,674 36,432 Certificated liabilities 37 37 13 12 – – 12,846 13,186 (4,806) (5,205) 8,090 8,030 Subordinated liabilities – – 109 95 – 14 10,430 11,509 (64) (64) 10,475 11,554 Total liabilities 109,991 105,956 545,255 509,417 2,117 4,044 69,506 70,335 (30,351) (31,522) 696,518 658,230
| B | Condensed Consolidated Interim Financial Statements | |||
|---|---|---|---|---|
| 47 Consolidated Balance Sheets | 49 Consolidated Statements of | 50 Consolidated Statements of Changes | 51 Consolidated Statements of Cash Flows | |
| 48 Consolidated Income Statements | Comprehensive Income | in Equity | 53 Notes |
| Group | Consolidation | Corporate and Other | Asset Management | ||||
|---|---|---|---|---|---|---|---|
| as of 31 December 2013 |
as of 30 June 2014 |
as of 31 December 2013 |
as of 30 June 2014 |
as of 31 December 2013 |
as of 30 June 2014 |
as of 31 December 2013 |
as of 30 June 2014 |
| 11,207 | 12,704 | (752) | (1,080) | 1,497 | 1,318 | 1,861 | 1,382 |
| 6,661 | 6,242 | (468) | (447) | 307 | 464 | 635 | 72 |
| 411,148 | 448,429 | (91,189) | (92,360) | 103,727 | 107,048 | 1,141 | 115 |
| 116,800 | 114,370 | (7,868) | (7,276) | 18,166 | 17,014 | 449 | 133 |
| 81,064 | 86,895 | – | – | – | – | – | – |
| 12,609 | 13,311 | (30) | (49) | – | – | – | – |
| 22,203 | 21,772 | – | – | – | – | 159 | – |
| 1,508 | 1,606 | (1,684) | (1,426) | 1,681 | 1,445 | 167 | 158 |
| 34,632 | 35,634 | (14,527) | (13,680) | 7,457 | 6,690 | 2,188 | 2,562 |
| 285 | – | – | – | 4 | 16 | – | |
| 13,100 | 13,082 | – | – | 714 | 702 | 7,268 | 6,905 |
| 711,079 | 754,330 | (116,518) | (116,318) | 133,549 | 134,685 | 13,884 | 11,327 |
| Group | Consolidation | Corporate and Other | Asset Management | ||||
|---|---|---|---|---|---|---|---|
| as of 31 December |
30 June 2014 |
as of 31 December 2013 |
as of 30 June 2014 |
as of 31 December 2013 |
as of 30 June 2014 |
as of 31 December 2013 |
as of 30 June 2014 |
| 6,013 | 6,351 | (469) | (447) | 534 | 505 | 1 | – |
| 23,109 | 22,650 | (2,991) | (3,002) | 21,337 | 20,420 | 1,314 | 187 |
| 18,212 | 21,715 | (10) | (18) | – | – | – | – |
| 66,566 | 67,692 | (9) | (17) | – | – | – | – |
| 404,072 | 431,134 | (190) | (194) | – | – | – | – |
| 81,064 | 86,895 | – | – | – | – | – | – |
| 3,178 | 4,842 | (1,684) | (1,426) | 164 | 193 | 124 | 2 |
| 36,432 | 36,674 | (20,900) | (20,377) | 23,605 | 25,112 | 2,591 | 1,928 |
| 8,030 | 8,090 | (5,205) | (4,806) | 13,186 | 12,846 | – | – |
| 11,554 | 10,475 | (64) | (64) | 11,509 | 10,430 | 14 | – |
| 658,230 | 696,518 | (31,522) | (30,351) | 70,335 | 69,506 | 4,044 | 2,117 |
| 52,849 | 57,812 | Total equity | |||||
| 711,079 | 754,330 | Total liabilities and equity |
| € mn | ||||
|---|---|---|---|---|
| Property-Casualty | Life/Health | |||
| three months ended 30 June | 2014 | 2013 | 2014 | 2013 |
| Total revenues1 | 10,846 | 10,754 | 16,961 | 14,125 |
| Premiums earned (net) | 10,701 | 10,379 | 5,999 | 5,912 |
| Operating investment result | ||||
| Interest and similar income | 939 | 932 | 4,471 | 4,369 |
| Operating income from financial assets and liabilities carried at fair value | ||||
| through income (net) | 2 | (35) | (36) | (687) |
| Operating realized gains/losses (net) | 29 | 15 | 754 | 718 |
| Interest expenses, excluding interest expenses from external debt | (16) | (7) | (23) | (21) |
| Operating impairments of investments (net) | (1) | (7) | (50) | (132) |
| Investment expenses | (75) | (77) | (232) | (193) |
| Subtotal | 878 | 821 | 4,884 | 4,054 |
| Fee and commission income | 302 | 307 | 261 | 168 |
| Other income | 10 | 11 | 33 | 31 |
| Claims and insurance benefits incurred (net) | (7,086) | (6,984) | (5,173) | (4,990) |
| Change in reserves for insurance and investment contracts (net)2 | (135) | (99) | (3,457) | (2,928) |
| Loan loss provisions | – | – | – | – |
| Acquisition and administrative expenses (net), excluding acquisition-related expenses | (3,036) | (2,976) | (1,448) | (1,478) |
| Fee and commission expenses | (279) | (273) | (93) | (74) |
| Operating amortization of intangible assets | – | – | (4) | – |
| Restructuring charges | (1) | (1) | 8 | (1) |
| Other expenses | (8) | (6) | (26) | (25) |
| Operating profit (loss) | 1,346 | 1,179 | 984 | 669 |
| Non-operating investment result | ||||
| Non-operating income from financial assets and liabilities carried at fair value | ||||
| through income (net) | (3) | 23 | (25) | (5) |
| Non-operating realized gains/losses (net) | 114 | 229 | 90 | 24 |
| Non-operating impairments of investments (net) | (20) | (35) | (2) | (6) |
| Subtotal | 91 | 217 | 63 | 13 |
| Income from fully consolidated private equity investments (net) | – | – | – | – |
| Interest expenses from external debt | – | – | – | – |
| Acquisition-related expenses | – | – | – | – |
| Non-operating amortization of intangible assets | (7) | (5) | (9) | (2) |
| Non-operating items | 84 | 212 | 54 | 11 |
| Income (loss) before income taxes | 1,430 | 1,391 | 1,038 | 680 |
| Income taxes | (461) | (390) | (307) | (206) |
| Net income (loss) | 969 | 1,001 | 731 | 474 |
| Net income (loss) attributable to: | ||||
| Non-controlling interests | 41 | 45 | 32 | 20 |
| Shareholders | 928 | 956 | 699 | 454 |
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 June 2014, includes expenses for premium refunds (net) in Property-Casualty of € (72) mn (2013: € (37) mn).
| B | Condensed Consolidated Interim Financial Statements | |||
|---|---|---|---|---|
| 47 Consolidated Balance Sheets | 49 Consolidated Statements of | 50 Consolidated Statements of Changes | 51 Consolidated Statements of Cash Flows | |
| Comprehensive Income | in Equity |
53 Notes
48 Consolidated Income Statements
| Asset Management | Corporate and Other | Consolidation | Group | ||||
|---|---|---|---|---|---|---|---|
| 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 |
| 1,606 | 1,815 | 132 | 132 | (89) | (50) | 29,456 | 26,776 |
| – | – | – | – | – | – | 16,700 | 16,291 |
| 2 | 10 | 230 | 207 | (104) | (105) | 5,538 | 5,413 |
| 4 | – | 9 | 10 | 1 | 4 | (20) | (708) 733 |
| – | – | – | – | – | – | 783 | |
| (3) | (6) | (149) | (158) | 90 | 90 | (101) | (102) |
| – | – | – | – | – | 21 | (51) | (118) |
| – | – | (18) | (20) | 93 | 73 | (232) | (217) |
| 3 | 4 | 72 | 39 | 80 | 83 | 5,917 | |
| 1,972 | 2,179 | 178 | 175 | (175) | (150) | 2,538 | |
| 2 | 2 | – | (1) | – | (1) | 45 | |
| – | – | – | – | 2 | 2 | (12,257) | (11,972) |
| – | – | – | – | (6) | (44) | (3,598) | (3,071) |
| – | – | (15) | (15) | – | – | (15) | |
| (932) | (1,009) | (295) | (338) | 5 | 15 | (5,706) | |
| (371) | (370) | (159) | (131) | 71 | 60 | (831) | |
| – | – | – | – | – | – | (4) | |
| 1 | (2) | – | (2) | – | – | 8 | |
| – | – | – | (1) | 8 | 24 | (26) | |
| 675 | 804 | (219) | (274) | (15) | (11) | 2,771 | |
| – | – | (2) | (9) | (3) | (2) | (33) | |
| (1) | – | 39 | 206 | 1 | (1) | 243 | |
| – | – | (1) | (23) | – | – | (23) | |
| (1) | – | 36 | 174 | (2) | (3) | 187 | |
| – | – | (5) | (7) | 5 | 3 | – | |
| – | – | (207) | (233) | – | – | (207) | |
| – | (16) | 2 | – | – | – | 2 | |
| (2) | (7) | (3) | (3) | – | 1 | (21) | |
| (3) | (23) | (177) | (69) | 3 | 1 | (39) | |
| 672 | 781 | (396) | (343) | (12) | (10) | 2,732 | |
| (253) | (293) | 148 | 66 | (1) | (1) | (874) | |
| 419 | 488 | (248) | (277) | (13) | (11) | 1,858 | |
| 24 | 22 | 6 | – | – | – | 103 | |
| 395 | 466 | (254) | (277) | (13) | (11) | 1,755 |
| € mn | ||||
|---|---|---|---|---|
| Property-Casualty | Life/Health | |||
| six months ended 30 June | 2014 | 2013 | 2014 | 2013 |
| Total revenues1 | 26,063 | 25,951 | 34,124 | 28,962 |
| Premiums earned (net) | 21,111 | 20,691 | 12,275 | 12,272 |
| Operating investment result | ||||
| Interest and similar income | 1,792 | 1,819 | 8,630 | 8,446 |
| Operating income from financial assets and liabilities carried at fair value through income (net) |
16 | (27) | (305) | (931) |
| Operating realized gains/losses (net) | 55 | 30 | 1,581 | 1,617 |
| Interest expenses, excluding interest expenses from external debt | (29) | (22) | (48) | (40) |
| Operating impairments of investments (net) | (6) | (8) | (341) | (194) |
| Investment expenses | (144) | (145) | (427) | (383) |
| Subtotal | 1,684 | 1,647 | 9,090 | 8,515 |
| Fee and commission income | 608 | 597 | 490 | 308 |
| Other income | 39 | 19 | 82 | 80 |
| Claims and insurance benefits incurred (net) | (13,813) | (13,797) | (10,254) | (9,816) |
| Change in reserves for insurance and investment contracts (net)2 | (260) | (212) | (6,771) | (6,929) |
| Loan loss provisions | – | – | – | – |
| Acquisition and administrative expenses (net), excluding acquisition-related expenses and one-off effect from pension revaluation |
(5,948) | (5,885) | (2,701) | (2,726) |
| Fee and commission expenses | (570) | (548) | (180) | (130) |
| Operating amortization of intangible assets | – | – | (9) | – |
| Restructuring charges | (2) | (3) | 8 | (2) |
| Other expenses | (14) | (11) | (166) | (48) |
| Operating profit (loss) | 2,835 | 2,498 | 1,864 | 1,524 |
| Non-operating investment result | ||||
| Non-operating income from financial assets and liabilities carried at fair value through income (net) |
(62) | 14 | (25) | 8 |
| Non-operating realized gains/losses (net) | 197 | 385 | 116 | 58 |
| Non-operating impairments of investments (net) | (77) | (51) | (8) | (10) |
| Subtotal | 58 | 348 | 83 | 56 |
| Income from fully consolidated private equity investments (net) | – | – | – | – |
| Interest expenses from external debt | – | – | – | – |
| Acquisition-related expenses | – | – | – | – |
| One-off effect from pension revaluation | (537) | – | (8) | – |
| Non-operating amortization of intangible assets | (13) | (8) | (17) | (5) |
| Non-operating items | (492) | 340 | 58 | 51 |
| Income (loss) before income taxes | 2,343 | 2,838 | 1,922 | 1,575 |
| Income taxes | (729) | (820) | (562) | (473) |
| Net income (loss) | 1,614 | 2,018 | 1,360 | 1,102 |
| Net income (loss) attributable to: | ||||
| Non-controlling interests | 85 | 88 | 63 | 43 |
| Shareholders | 1,529 | 1,930 | 1,297 | 1,059 |
1 Total revenues comprise statutory gross premiums written in Property-Casualty and Life/Health, operating revenues in Asset Management and total revenues in Corporate and Other (Banking).
2 For the six months ended 30 June 2014, includes expenses for premium refunds (net) in Property-Casualty of € (131) mn (2013: € (100) mn).
| B | Condensed Consolidated Interim Financial Statements | |||
|---|---|---|---|---|
| 47 Consolidated Balance Sheets | 49 Consolidated Statements of | 50 Consolidated Statements of Changes | 51 Consolidated Statements of Cash Flows | |
| 48 Consolidated Income Statements | Comprehensive Income | in Equity | 53 Notes |
| Asset Management | Corporate and Other | Consolidation | Group | ||||
|---|---|---|---|---|---|---|---|
| 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 |
| 3,123 | 3,726 | 271 | 280 | (161) | (95) | 63,420 | 58,824 |
| – | – | – | – | – | – | 33,386 | 32,963 |
| 4 | 21 | 438 | 489 | (187) | (195) | 10,677 | 10,580 |
| 3 | 7 | 11 | 19 | 4 | 3 | (271) | (929) |
| – | – | – | – | (73) | (35) | 1,563 | 1,612 |
| (5) | (13) | (293) | (321) | 176 | 184 | (199) | (212) |
| – | – | – | – | – | 21 | (347) | (181) |
| – | – | (34) | (39) | 174 | 142 | (431) | (425) |
| 2 | 15 | 122 | 148 | 94 | 120 | 10,992 | 10,445 |
| 3,833 | 4,465 | 345 | 343 | (330) | (280) | 4,946 | |
| 4 | 5 | – | 1 | (2) | (3) | 123 | |
| – | – | – | – | 1 | 3 | (24,066) | (23,610) |
| – | – | – | – | (7) | (29) | (7,038) | (7,170) |
| – | – | (24) | (29) | – | – | (24) | |
| (1,805) | (2,017) | (591) | (641) | (111) | 19 | (11,156) | |
| (716) | (759) | (293) | (243) | 146 | 114 | (1,613) | |
| – | – | – | – | – | – | (9) | |
| 3 | (5) | – | (90) | – | – | 9 | |
| – | – | – | (2) | 124 | 7 | (56) | |
| 1,321 | 1,704 | (441) | (513) | (85) | (49) | 5,494 | |
| – | – | (8) | (17) | (6) | (2) | (101) | |
| (1) | – | 56 | 288 | 1 | (6) | 369 | |
| – | – | (4) | (74) | – | – | (89) | |
| (1) | – | 44 | 197 | (5) | (8) | 179 | |
| – | – | (12) | (14) | 7 | 6 | (5) | |
| – | – | (411) | (474) | – | – | (411) | |
| 3 | (41) | 3 | – | – | – | 6 | |
| (14) | – | 675 | – | – | – | 116 | |
| (5) | (13) | (5) | (53) | – | 22 | (40) | |
| (17) | (54) | 294 | (344) | 2 | 20 | (155) | |
| 1,304 | 1,650 | (147) | (857) | (83) | (29) | 5,339 | |
| (479) | (594) | 30 | 183 | (1) | 3 | (1,741) | |
| 825 | 1,056 | (117) | (674) | (84) | (26) | 3,598 | |
| 45 | 48 | 10 | 2 | – | – | 203 | |
| 780 | 1,008 | (127) | (676) | (84) | (26) | 3,395 | |
€ mn
| German Speaking Countries | Western&Southern Europe | Iberia&Latin America | ||||
|---|---|---|---|---|---|---|
| three months ended 30 June | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 |
| Gross premiums written | 2,159 | 2,055 | 2,474 | 2,457 | 1,092 | 1,182 |
| Ceded premiums written | (334) | (350) | (165) | (139) | (157) | (207) |
| Change in unearned premiums | 707 | 721 | 166 | 74 | 24 | (12) |
| Premiums earned (net) | 2,532 | 2,426 | 2,475 | 2,392 | 959 | 963 |
| Interest and similar income | 299 | 289 | 238 | 245 | 49 | 52 |
| Operating income from financial assets and liabilities carried at fair value through income (net) |
4 | (23) | – | 3 | – | 1 |
| Operating realized gains/losses (net) | 29 | 15 | – | – | – | – |
| Fee and commission income | 31 | 26 | 9 | 6 | – | – |
| Other income | 7 | 7 | 2 | 2 | – | – |
| Operating revenues | 2,902 | 2,740 | 2,724 | 2,648 | 1,008 | 1,016 |
| Claims and insurance benefits incurred (net) | (1,692) | (1,953) | (1,580) | (1,449) | (682) | (645) |
| Change in reserves for insurance and investment contracts (net) | (119) | (81) | (9) | (10) | – | (1) |
| Interest expenses | (2) | (4) | (5) | (2) | – | – |
| Operating impairments of investments (net) | (1) | (7) | – | – | – | – |
| Investment expenses | (22) | (22) | (25) | (25) | (4) | (4) |
| Acquisition and administrative expenses (net) | (636) | (651) | (703) | (654) | (247) | (263) |
| Fee and commission expenses | (27) | (22) | (8) | (11) | – | – |
| Restructuring charges | – | (1) | – | – | – | – |
| Other expenses | (5) | (4) | (1) | (1) | – | – |
| Operating expenses | (2,504) | (2,745) | (2,331) | (2,152) | (933) | (913) |
| Operating profit (loss) | 398 | (5) | 393 | 496 | 75 | 103 |
| Non-operating income from financial assets and liabilities carried at fair value through income (net) |
(8) | 18 | 5 | (1) | 1 | 2 |
| Non-operating realized gains/losses (net) | 16 | 22 | 42 | 132 | 2 | 6 |
| Non-operating impairments of investments (net) | (6) | (6) | (10) | (11) | – | (11) |
| Amortization of intangible assets | (1) | – | (3) | (1) | (1) | (1) |
| Non-operating items | 1 | 34 | 34 | 119 | 2 | (4) |
| Income (loss) before income taxes | 399 | 29 | 427 | 615 | 77 | 99 |
| Income taxes | (107) | (9) | (166) | (176) | (21) | (29) |
| Net income (loss) | 292 | 20 | 261 | 439 | 56 | 70 |
| Net income (loss) attributable to: | ||||||
| Non-controlling interests | (1) | – | 2 | 4 | 2 | 2 |
| Shareholders | 293 | 20 | 259 | 435 | 54 | 68 |
| Loss ratio2 in % | 66.8 | 80.5 | 63.8 | 60.6 | 71.1 | 67.0 |
| Expense ratio3 in % | 25.1 | 26.8 | 28.4 | 27.3 | 25.8 | 27.3 |
| Combined ratio4 in % | 91.9 | 107.3 | 92.2 | 87.9 | 96.9 | 94.3 |
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.
4 Represents the total of acquisition and administrative expenses (net) and claims and insurance benefits incurred (net) divided by premiums earned (net).
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).
5 Presentation not meaningful.
| B | Condensed Consolidated Interim Financial Statements | |||
|---|---|---|---|---|
| 47 Consolidated Balance Sheets | 49 Consolidated Statements of | 50 Consolidated Statements of Changes | 51 Consolidated Statements of Cash Flows | |
| 48 Consolidated Income Statements | Comprehensive Income | in Equity | 53 Notes |
| German Speaking Countries Western&Southern Europe Iberia&Latin America |
Global Insurance Lines& USA1 Anglo Markets |
Growth Markets | Allianz Worldwide Partners | Consolidation | Property-Casualty | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2014 2013 2014 2013 |
2014 | 2013 | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 |
| 1,092 1,182 |
496 | 520 | 3,991 | 3,892 | 739 | 774 | 689 | 640 | (794) | (766) | 10,846 | 10,754 |
| (207) | (29) | (34) | (885) | (946) | (141) | (182) | (19) | (26) | 794 | 763 | (936) | (1,121) |
| (12) | (47) | (25) | (23) | 40 | 5 | (11) | (41) | (44) | – | 3 | 791 | 746 |
| 963 | 420 | 461 | 3,083 | 2,986 | 603 | 581 | 629 | 570 | – | – | 10,701 | 10,379 |
| 52 | 58 | 61 | 246 | 240 | 40 | 40 | 9 | 8 | – | (3) | 939 | 932 |
| 1 | 1 | – | (2) | (14) | – | (2) | (1) | – | – | – | 2 | (35) |
| – | – | – | – | – | – | – | – | – | – | 29 | 15 | |
| – – |
– | – | 149 | 149 | 11 | 21 | 127 | 122 | (25) | (17) | 302 | 307 |
| – | – | – | – | 2 | 2 | (1) | – | – | – | 10 | ||
| 479 | 522 | 3,476 | 3,361 | 656 | 642 | 763 | 700 | (25) | (20) | 11,983 | 11,609 | |
| (645) | (344) | (297) | (1,923) | (1,905) | (459) | (371) | (406) | (364) | – | – | (7,086) | (6,984) (99) |
| (1) | (2) | (3) | (3) | (3) | (2) | – | – | (1) | – | – | (135) | |
| – | – | – | (9) | (2) | (1) | – | – | (1) | 1 | 2 | (16) | |
| – | – | – | – | – | – | – | – | – | – | – | (1) | |
| (4) (263) |
(1) | (1) | (21) | (23) | (2) | (2) | – | – | – | – | (75) | |
| (165) | (165) | (876) | (849) | (215) | (208) | (201) | (189) | 7 | 3 | (3,036) | (2,976) | |
| – – |
– | – | (124) | (118) | (10) | (16) | (128) | (121) | 18 | 15 | (279) | |
| – | – | (1) | – | – | – | – | – | – | – | (1) | ||
| – (913) |
– | – | – | – | (2) | (1) | – | – | – | – | (8) | |
| (512) | (466) | (2,957) | (2,900) | (691) | (598) | (735) | (676) | 26 | 20 | (10,637) | (10,430) | |
| 103 | (33) | 56 | 519 | 461 | (35) | 44 | 28 | 24 | 1 | – | 1,346 | |
| 2 | – | – | (2) | 4 | – | – | 1 | – | – | – | (3) | |
| 3 | 2 | 49 | 58 | 2 | 5 | – | 4 | – | – | 114 | ||
| 6 | – | – | (4) | (7) | – | – | – | – | – | – | (20) | |
| 1 | (7) | |||||||||||
| – 3 |
– 2 |
(1) 42 |
(2) 53 |
(2) – |
(2) 3 |
– 1 |
– 4 |
1 | 1 1 |
84 | ||
| (1) (4) |
||||||||||||
| (30) | 58 | 561 | 514 | (35) | 47 | 29 | 28 | 2 | 1 | 1,430 | ||
| 12 | (7) | (171) | (146) | – | (13) | (8) | (10) | – | – | (461) | ||
| (18) | 51 | 390 | 368 | (35) | 34 | 21 | 18 | 2 | 1 | 969 | ||
| (11) 99 (29) 70 |
||||||||||||
| 2 | – | – | 30 | 32 | 6 | 7 | 2 | – | – | – | 41 | |
| (18) | 51 | 360 | 336 | (41) | 27 | 19 | 18 | 2 | 1 | 928 | ||
| 68 67.0 |
1,391 (390) 1,001 |
|||||||||||
| 27.3 | 81.9 39.3 |
64.4 35.8 |
62.4 28.4 |
63.8 28.4 |
76.1 35.7 |
63.9 35.8 |
64.5 32.0 |
63.8 33.2 |
–5 –5 |
–5 –5 |
66.2 28.4 |
€ mn
| German Speaking Countries | Western&Southern Europe | Iberia&Latin America | ||||
|---|---|---|---|---|---|---|
| six months ended 30 June | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 |
| Gross premiums written | 7,543 | 7,365 | 5,639 | 5,593 | 2,221 | 2,480 |
| Ceded premiums written | (1,151) | (1,152) | (410) | (378) | (326) | (385) |
| Change in unearned premiums | (1,412) | (1,364) | (301) | (485) | (20) | (180) |
| Premiums earned (net) | 4,980 | 4,849 | 4,928 | 4,730 | 1,875 | 1,915 |
| Interest and similar income | 581 | 579 | 432 | 441 | 99 | 106 |
| Operating income from financial assets and liabilities carried at fair value | ||||||
| through income (net) | 8 | (19) | 1 | 10 | 8 | 3 |
| Operating realized gains/losses (net) | 55 | 30 | – | – | – | – |
| Fee and commission income | 60 | 59 | 19 | 12 | – | – |
| Other income | 16 | 13 | 4 | 3 | 17 | – |
| Operating revenues | 5,700 | 5,511 | 5,384 | 5,196 | 1,999 | 2,024 |
| Claims and insurance benefits incurred (net) | (3,291) | (3,610) | (3,142) | (2,993) | (1,320) | (1,307) |
| Change in reserves for insurance and investment contracts (net) | (225) | (171) | (22) | (21) | (2) | (2) |
| Interest expenses | (4) | (13) | (9) | (5) | (1) | (1) |
| Operating impairments of investments (net) | (6) | (8) | – | – | – | – |
| Investment expenses | (45) | (41) | (47) | (48) | (7) | (7) |
| Acquisition and administrative expenses (net), excluding one-off effect | ||||||
| from pension revaluation | (1,261) | (1,211) | (1,352) | (1,258) | (480) | (510) |
| Fee and commission expenses | (54) | (55) | (18) | (19) | – | – |
| Restructuring charges | – | (1) | – | – | – | – |
| Other expenses | (9) | (8) | (2) | (2) | (1) | – |
| Operating expenses | (4,895) | (5,118) | (4,592) | (4,346) | (1,811) | (1,827) |
| Operating profit (loss) | 805 | 393 | 792 | 850 | 188 | 197 |
| Non-operating income from financial assets and liabilities carried at fair value | ||||||
| through income (net) | (33) | 9 | (18) | (1) | 2 | 2 |
| Non-operating realized gains/losses (net) | 51 | 52 | 60 | 172 | 5 | 16 |
| Non-operating impairments of investments (net) | (14) | (11) | (54) | (20) | (1) | (12) |
| One-off effect from pension revaluation | (530) | – | – | – | – | – |
| Amortization of intangible assets | (1) | (1) | (6) | (4) | (1) | (1) |
| Non-operating items | (527) | 49 | (18) | 147 | 5 | 5 |
| Income (loss) before income taxes | 278 | 442 | 774 | 997 | 193 | 202 |
| Income taxes | (62) | (128) | (290) | (313) | (55) | (63) |
| Net income (loss) | 216 | 314 | 484 | 684 | 138 | 139 |
| Net income (loss) attributable to: | ||||||
| Non-controlling interests | (1) | 1 | 8 | 8 | 3 | 3 |
| Shareholders | 217 | 313 | 476 | 676 | 135 | 136 |
| Loss ratio2 in % | 66.1 | 74.4 | 63.8 | 63.3 | 70.4 | 68.3 |
| Expense ratio3 in % | 25.3 | 25.0 | 27.4 | 26.6 | 25.6 | 26.6 |
| Combined ratio4 in % | 91.4 | 99.4 | 91.2 | 89.9 | 96.0 | 94.9 |
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 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). 5 Presentation not meaningful.
3 Represents acquisition and administrative expenses (net), excluding one-off effect from pension revaluation, divided by premiums earned (net).
| B | Condensed Consolidated Interim Financial Statements | |||
|---|---|---|---|---|
| 47 Consolidated Balance Sheets | 49 Consolidated Statements of | 50 Consolidated Statements of Changes | 51 Consolidated Statements of Cash Flows | |
| 48 Consolidated Income Statements | Comprehensive Income | in Equity | 53 Notes |
| Western&Southern Europe Iberia&Latin America |
Global Insurance Lines& USA1 Anglo Markets |
Growth Markets | Allianz Worldwide Partners | Consolidation | Property-Casualty | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2014 2013 2014 2013 |
2014 | 2013 | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 |
| 5,593 2,221 2,480 |
912 | 972 | 9,092 | 8,903 | 1,655 | 1,666 | 1,474 | 1,360 | (2,473) | (2,388) | 26,063 | 25,951 |
| (385) | (60) | (63) | (2,287) | (2,406) | (353) | (380) | (49) | (52) | 2,473 | 2,385 | (2,163) | (2,431) |
| (180) | (27) | 15 | (704) | (494) | (104) | (120) | (221) | (204) | – | 3 | (2,789) | (2,829) |
| 1,915 | 825 | 924 | 6,101 | 6,003 | 1,198 | 1,166 | 1,204 | 1,104 | – | – | 21,111 | 20,691 |
| 114 | 119 | 472 | 487 | 79 | 81 | 15 | 15 | – | (9) | 1,792 | 1,819 | |
| – | (1) | – | (19) | – | (1) | (1) | – | – | – | 16 | (27) | |
| – | – | – | – | – | – | – | – | – | – | 55 | 30 | |
| – | – | – | 294 | 295 | 29 | 38 | 242 | 233 | (36) | (40) | 608 | 597 |
| – | – | – | – | 3 | 2 | (1) | 1 | – | – | 39 | ||
| 939 | 1,042 | 6,867 | 6,766 | 1,309 | 1,286 | 1,459 | 1,353 | (36) | (49) | 23,621 | 23,129 | |
| (630) | (601) | (3,806) | (3,837) | (849) | (735) | (775) | (714) | – | – | (13,813) | (13,797) | |
| (1,307) (2) |
(4) | (5) | (4) | (12) | (3) | (1) | – | – | – | – | (260) | (212) |
| – | – | (14) | (9) | (2) | (1) | – | (1) | 1 | 8 | (29) | (22) | |
| (1) – |
– | – | – | – | – | – | – | – | – | – | (6) | |
| (7) | (2) | (2) | (39) | (43) | (4) | (4) | – | – | – | – | (144) | |
| (510) | (312) | (331) | (1,733) | (1,809) | (433) | (410) | (388) | (364) | 11 | 8 | (5,948) | (5,885) |
| – | – | – | (249) | (242) | (26) | (33) | (247) | (232) | 24 | 33 | (570) | (548) |
| – | – | – | (2) | (2) | – | – | – | – | – | – | (2) | |
| – | – | – | – | (2) | (1) | – | – | – | – | (14) | ||
| (948) | (939) | (5,847) | (5,954) | (1,319) | (1,185) | (1,410) | (1,311) | 36 | 49 | (20,786) | (20,631) | |
| (9) | 103 | 1,020 | 812 | (10) | 101 | 49 | 42 | – | – | 2,835 | ||
| 197 | ||||||||||||
| 2 | (1) | – | (11) | 4 | (1) | – | – | – | – | – | (62) | |
| 4 | 6 | 74 | 128 | 3 | 7 | – | 4 | – | – | 197 | ||
| 16 (12) |
– | – | (8) | (7) | – | (1) | – | – | – | – | (77) | |
| – | – | – | (7) | – | – | – | – | – | – | – | (537) | |
| – | – | (3) | – | (4) | (4) | – | – | 2 | 2 | (13) | ||
| 3 | 6 | 45 | 125 | (2) | 2 | – | 4 | 2 | 2 | (492) | ||
| 202 | (6) | 109 | 1,065 | 937 | (12) | 103 | 49 | 46 | 2 | 2 | 2,343 | |
| (63) | 7 | (21) | (310) | (251) | (5) | (30) | (14) | (14) | – | – | (729) | |
| 1 | 88 | 755 | 686 | (17) | 73 | 35 | 32 | 2 | 2 | 1,614 | ||
| – | – | 58 | 61 | 15 | 14 | 2 | 1 | – | – | 85 | ||
| 3 136 |
1 | 88 | 697 | 625 | (32) | 59 | 33 | 31 | 2 | 2 | 1,529 | |
| 68.3 | 76.4 | 65.1 | 62.4 | 64.0 | 70.9 | 63.0 | 64.4 | 64.6 | –5 | –5 | 65.4 | |
| 37.8 | 35.8 | 28.4 | 30.1 | 36.1 | 35.2 | 32.2 | 33.0 | –5 | –5 | 28.2 | ||
€ mn
| German Speaking Countries | Western&Southern Europe | |||
|---|---|---|---|---|
| three months ended 30 June | 2014 | 2013 | 2014 | 2013 |
| Statutory premiums1 | 5,624 | 4,845 | 5,956 | 5,514 |
| Ceded premiums written | (35) | (43) | (183) | (273) |
| Change in unearned premiums | (47) | (41) | 4 | 12 |
| Statutory premiums (net) | 5,542 | 4,761 | 5,777 | 5,253 |
| Deposits from insurance and investment contracts | (1,888) | (1,177) | (4,574) | (4,134) |
| Premiums earned (net) | 3,654 | 3,584 | 1,203 | 1,119 |
| Interest and similar income | 2,397 | 2,323 | 1,047 | 1,053 |
| Operating income from financial assets and liabilities carried at fair value through income (net) | 157 | (508) | (23) | 59 |
| Operating realized gains/losses (net) | 602 | 519 | 144 | 122 |
| Fee and commission income | 21 | 14 | 129 | 111 |
| Other income | 27 | 27 | 5 | 4 |
| Operating revenues | 6,858 | 5,959 | 2,505 | 2,468 |
| Claims and insurance benefits incurred (net) | (3,498) | (2,996) | (1,052) | (1,073) |
| Change in reserves for insurance and investment contracts (net) | (2,329) | (2,020) | (594) | (579) |
| Interest expenses | (20) | (28) | (3) | (8) |
| Operating impairments of investments (net) | (36) | (101) | (12) | (29) |
| Investment expenses | (152) | (127) | (64) | (49) |
| Acquisition and administrative expenses (net) | (384) | (412) | (504) | (439) |
| Fee and commission expenses | (10) | (5) | (58) | (58) |
| Operating amortization of intangible assets | (4) | – | – | – |
| Restructuring charges | – | – | – | (1) |
| Other expenses | (21) | (23) | (3) | (2) |
| Operating expenses | (6,454) | (5,712) | (2,290) | (2,238) |
| Operating profit (loss) | 404 | 247 | 215 | 230 |
| Non-operating income from financial assets and liabilities carried at fair value through income (net) | – | – | – | (5) |
| Non-operating realized gains/losses (net) | – | – | 88 | 18 |
| Non-operating impairments of investments (net) | – | – | (2) | (4) |
| Non-operating amortization of intangible assets | – | (1) | (3) | – |
| Non-operating items | – | (1) | 83 | 9 |
| Income (loss) before income taxes | 404 | 246 | 298 | 239 |
| Income taxes | (140) | (96) | (74) | (58) |
| Net income (loss) | 264 | 150 | 224 | 181 |
| Net income (loss) attributable to: | ||||
| Non-controlling interests | – | – | 12 | 7 |
| Shareholders | 264 | 150 | 212 | 174 |
| Margin on reserves2 in basis points | 68 | 45 | 57 | 67 |
1 Statutory premiums are gross premiums written from sales of life and health insurance policies, as well as gross receipts from sales of unit-linked and other investment-oriented products, in accordance with the statutory accounting practices applicable in the insurer's home jurisdiction.
2 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 | |||
|---|---|---|---|---|
| 47 Consolidated Balance Sheets | 49 Consolidated Statements of | 50 Consolidated Statements of Changes | 51 Consolidated Statements of Cash Flows | |
| 48 Consolidated Income Statements | Comprehensive Income | in Equity | 53 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 | |
| 452 557 |
3,352 | 1,788 | 141 | 134 | 1,615 | 1,578 | (179) | (291) | 16,961 | 14,125 | |
| (4) (3) |
(27) | (29) | (46) | (20) | (108) | (74) | 179 | 291 | (224) | (151) | |
| 3 | (4) | (3) | 7 | (4) | (21) | (19) | – | – | (58) | (50) | |
| 451 559 |
3,321 | 1,756 | 102 | 110 | 1,486 | 1,485 | – | – | 16,679 | 13,924 | |
| (257) (312) |
(3,089) | (1,536) | – | – | (872) | (853) | – | – | (10,680) | (8,012) | |
| 194 247 |
232 | 220 | 102 | 110 | 614 | 632 | – | – | 5,999 | 5,912 | |
| 91 | 709 | 691 | 14 | 22 | 223 | 207 | (10) | (18) | 4,471 | 4,369 | |
| 15 (4) |
(183) | (177) | – | (36) | (1) | (19) | (1) | (2) | (36) | (687) | |
| 1 | 2 | 62 | – | – | 4 | 11 | 1 | – | 754 | ||
| 35 | 29 | 21 | – | – | 48 | 22 | (1) | (1) | 261 | ||
| – | – | – | – | – | 1 | – | – | – | 33 | ||
| 336 339 |
789 | 817 | 116 | 96 | 889 | 853 | (11) | (21) | 11,482 | 10,511 | |
| (157) (198) |
(21) | (22) | (78) | (84) | (367) | (617) | – | – | (5,173) | (4,990) | |
| (51) (45) |
(304) | (346) | (1) | – | (178) | 62 | – | – | (3,457) | (2,928) | |
| – | (2) | (1) | – | (1) | (8) | (2) | 10 | 19 | (23) | ||
| (1) (1) |
– | – | – | – | (1) | (1) | – | – | (50) | ||
| (2) (2) |
(8) | (9) | – | – | (6) | (6) | – | – | (232) | ||
| (54) (52) |
(246) | (329) | (19) | (26) | (242) | (222) | 1 | 2 | (1,448) | ||
| (17) | (5) | (10) | – | – | (3) | (1) | – | – | (93) | ||
| – | – | – | – | – | – | – | – | – | (4) | ||
| – | – | – | – | – | 8 | – | – | – | 8 | ||
| – | – | – | – | – | (2) | – | – | – | (26) | ||
| (282) (298) |
(586) | (717) | (98) | (111) | (799) | (787) | 11 | 21 | (10,498) | ||
| 54 | 203 | 100 | 18 | (15) | 90 | 66 | – | – | 984 | ||
| – – |
(25) – |
– 1 |
– – |
– – |
– 2 |
– 5 |
– – |
– – |
(25) 90 |
||
| – | – | – | – | – | – | (2) | – | – | (2) | ||
| (4) | – | – | – | – | (2) | (1) | – | – | (9) | ||
| (4) | (25) | 1 | – | – | – | 2 | – | – | 54 | ||
| 50 | 178 | 101 | 18 | (15) | 90 | 68 | – | – | 1,038 | ||
| (15) (13) |
(54) | (23) | (4) | 1 | (20) | (17) | – | – | (307) | ||
| 35 | 124 | 78 | 14 | (14) | 70 | 51 | – | – | 731 | ||
| 9 | – | – | – | – | 11 | 8 | – | – | 32 | ||
| 26 | 124 | 78 | 14 | (14) | 59 | 43 | – | – | 699 | ||
| 247 215 |
108 | 56 | 380 | (320) | 132 | 99 | –3 | –3 | 79 | ||
€ mn
| German Speaking Countries | Western&Southern Europe | |||
|---|---|---|---|---|
| six months ended 30 June | 2014 | 2013 | 2014 | 2013 |
| Statutory premiums1 | 12,480 | 11,173 | 12,083 | 10,642 |
| Ceded premiums written | (74) | (88) | (780) | (617) |
| Change in unearned premiums | (109) | (71) | (10) | (1) |
| Statutory premiums (net) | 12,297 | 11,014 | 11,293 | 10,024 |
| Deposits from insurance and investment contracts | (4,580) | (3,226) | (8,937) | (7,787) |
| Premiums earned (net) | 7,717 | 7,788 | 2,356 | 2,237 |
| Interest and similar income | 4,661 | 4,526 | 1,938 | 1,944 |
| Operating income from financial assets and liabilities carried at fair value through income (net) | 188 | (532) | (73) | 101 |
| Operating realized gains/losses (net) | 1,100 | 1,233 | 450 | 264 |
| Fee and commission income | 40 | 26 | 247 | 203 |
| Other income | 69 | 60 | 10 | 20 |
| Operating revenues | 13,775 | 13,101 | 4,928 | 4,769 |
| Claims and insurance benefits incurred (net) | (7,017) | (6,193) | (2,050) | (2,047) |
| Change in reserves for insurance and investment contracts (net) | (4,595) | (4,994) | (1,083) | (1,146) |
| Interest expenses | (45) | (51) | (8) | (14) |
| Operating impairments of investments (net) | (149) | (140) | (189) | (52) |
| Investment expenses | (280) | (250) | (113) | (99) |
| Acquisition and administrative expenses (net), excluding one-off effect from pension revaluation | (769) | (766) | (924) | (848) |
| Fee and commission expenses | (19) | (12) | (111) | (105) |
| Operating amortization of intangible assets | (9) | – | – | – |
| Restructuring charges | – | (1) | – | (1) |
| Other expenses | (155) | (43) | (6) | (5) |
| Operating expenses | (13,038) | (12,450) | (4,484) | (4,317) |
| Operating profit (loss) | 737 | 651 | 444 | 452 |
| Non-operating income from financial assets and liabilities carried at fair value through income (net) | – | – | (4) | (1) |
| Non-operating realized gains/losses (net) | – | – | 113 | 39 |
| Non-operating impairments of investments (net) | – | – | (7) | (7) |
| One-off effect from pension revaluation | (8) | – | – | – |
| Non-operating amortization of intangible assets | – | (1) | (6) | – |
| Non-operating items | (8) | (1) | 96 | 31 |
| Income (loss) before income taxes | 729 | 650 | 540 | 483 |
| Income taxes | (249) | (244) | (132) | (116) |
| Net income (loss) | 480 | 406 | 408 | 367 |
| Net income (loss) attributable to: | ||||
| Non-controlling interests | – | – | 21 | 13 |
| Shareholders | 480 | 406 | 387 | 354 |
| Margin on reserves2 in basis points | 63 | 60 | 60 | 67 |
1 Statutory premiums are gross premiums written from sales of life and health insurance policies, as well as gross receipts from sales of unit-linked and other investment-oriented products, in accordance with the statutory accounting practices applicable in the insurer's home jurisdiction.
2 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 | |||
|---|---|---|---|---|
| 47 Consolidated Balance Sheets | 49 Consolidated Statements of | 50 Consolidated Statements of Changes | 51 Consolidated Statements of Cash Flows | |
| 48 Consolidated Income Statements | Comprehensive Income | in Equity | 53 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 | |
| 928 | 994 | 5,908 | 3,350 | 267 | 266 | 3,231 | 3,176 | (773) | (639) | 34,124 | 28,962 | |
| (8) | (13) | (56) | (59) | (59) | (31) | (182) | (139) | 773 | 639 | (386) | (308) | |
| (31) | (25) | (7) | (4) | (24) | (4) | (60) | (59) | – | – | (241) | (164) | |
| 889 | 956 | 5,845 | 3,287 | 184 | 231 | 2,989 | 2,978 | – | – | 33,497 | 28,490 | |
| (546) | (578) | (5,386) | (2,859) | – | – | (1,773) | (1,768) | – | – | (21,222) | (16,218) | |
| 343 | 378 | 459 | 428 | 184 | 231 | 1,216 | 1,210 | – | – | 12,275 | 12,272 | |
| 185 | 183 | 1,401 | 1,369 | 33 | 41 | 438 | 417 | (26) | (34) | 8,630 | 8,446 | |
| 16 | 2 | (428) | (428) | (5) | (54) | (5) | (14) | 2 | (6) | (305) | (931) | |
| 5 | 6 | 11 | 81 | – | – | 14 | 33 | 1 | – | 1,581 | 1,617 | |
| 69 | 2 | 52 | 37 | – | – | 83 | 42 | (1) | (2) | 490 | ||
| – | – | – | – | – | – | 3 | – | – | – | 82 | ||
| 618 | 571 | 1,495 | 1,487 | 212 | 218 | 1,749 | 1,688 | (24) | (42) | 22,753 | ||
| (296) | (337) | (46) | (44) | (153) | (182) | (692) | (1,013) | – | – | (10,254) | (9,816) | |
| (73) | (49) | (642) | (663) | 14 | 5 | (392) | (82) | – | – | (6,771) | (6,929) | |
| (1) | (1) | (4) | (3) | (1) | (1) | (15) | (4) | 26 | 34 | (48) | ||
| (1) | (1) | – | – | – | – | (2) | (1) | – | – | (341) | ||
| (3) | (3) | (18) | (17) | – | – | (13) | (14) | – | – | (427) | ||
| (104) | (100) | (404) | (546) | (43) | (48) | (458) | (421) | 1 | 3 | (2,701) | ||
| (34) | – | (9) | (13) | – | – | (7) | (1) | – | 1 | (180) | ||
| – | – | – | – | – | – | – | – | – | – | (9) | ||
| – | – | – | – | – | – | 8 | – | – | – | 8 | ||
| – | – | – | – | – | – | (5) | – | – | – | (166) | ||
| (512) | (491) | (1,123) | (1,286) | (183) | (226) | (1,576) | (1,536) | 27 | 38 | (20,889) | ||
| 106 | 80 | 372 | 201 | 29 | (8) | 173 | 152 | 3 | (4) | 1,864 | ||
| – | – | (21) | 9 | – | – | – | – | – | – | (25) | ||
| – | – | – | 1 | – | – | 3 | 18 | – | – | 116 | ||
| – | – | – | – | – | – | (1) | (3) | – | – | (8) | ||
| – | – | – | – | – | – | – | – | – | – | (8) | ||
| (8) | – | – | – | – | – | (3) | (4) | – | – | (17) | ||
| (8) | – | (21) | 10 | – | – | (1) | 11 | – | – | 58 | ||
| 98 | 80 | 351 | 211 | 29 | (8) | 172 | 163 | 3 | (4) | 1,922 | ||
| (29) | (24) | (108) | (53) | (7) | (1) | (37) | (35) | – | – | (562) | ||
| 69 | 56 | 243 | 158 | 22 | (9) | 135 | 128 | 3 | (4) | 1,360 | ||
| 18 | 11 | – | – | – | – | 24 | 19 | – | – | 63 | ||
| 51 | 45 | 243 | 158 | 22 | (9) | 111 | 109 | 3 | (4) | 1,297 | ||
| 247 | 209 | 100 | 58 | 302 | (81) | 128 | 114 | –3 | –3 | 76 | ||
| € mn | ||
|---|---|---|
| three months ended 30 June | 2014 | 2013 |
| Net fee and commission income1 | 1,601 | 1,809 |
| Net interest income2 | (1) | 4 |
| Income from financial assets and liabilities carried at fair value through income (net) | 4 | – |
| Other income | 2 | 2 |
| Operating revenues | 1,606 | 1,815 |
| Administrative expenses (net), excluding aquisition-related expenses | (932) | (1,009) |
| Restructuring charges | 1 | (2) |
| Operating expenses | (931) | (1,011) |
| Operating profit | 675 | 804 |
| Realized gains/losses (net) | (1) | – |
| Acquisition-related expenses | – | (16) |
| Amortization of intangible assets | (2) | (7) |
| Non-operating items | (3) | (23) |
| Income before income taxes | 672 | 781 |
| Income taxes | (253) | (293) |
| Net income | 419 | 488 |
| Net income attributable to: | ||
| Non-controlling interests | 24 | 22 |
| Shareholders | 395 | 466 |
| Cost-income ratio3 in % | 58.0 | 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 | |||
|---|---|---|---|---|
| 47 Consolidated Balance Sheets | 49 Consolidated Statements of | 50 Consolidated Statements of Changes | 51 Consolidated Statements of Cash Flows | |
| 48 Consolidated Income Statements | Comprehensive Income | in Equity | 53 Notes |
| € mn | ||
|---|---|---|
| six months ended 30 June | 2014 | 2013 |
| Net fee and commission income1 | 3,117 | 3,706 |
| Net interest income2 | (1) | 8 |
| Income from financial assets and liabilities carried at fair value through income (net) | 3 | 7 |
| Other income | 4 | 5 |
| Operating revenues | 3,123 | 3,726 |
| Administrative expenses (net), excluding aquisition-related expenses and one-off effect from pension revaluation | (1,805) | (2,017) |
| Restructuring charges | 3 | (5) |
| Operating expenses | (1,802) | (2,022) |
| Operating profit | 1,321 | 1,704 |
| Realized gains/losses (net) | (1) | – |
| Acquisition-related expenses | 3 | (41) |
| One-off effect from pension revaluation | (14) | – |
| Amortization of intangible assets | (5) | (13) |
| Non-operating items | (17) | (54) |
| Income before income taxes | 1,304 | 1,650 |
| Income taxes | (479) | (594) |
| Net income | 825 | 1,056 |
| Net income attributable to: | ||
| Non-controlling interests | 45 | 48 |
| Shareholders | 780 | 1,008 |
| Cost-income ratio3 in % | 57.7 | 54.3 |
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 | Alternative Investments | Consolidation | Corporate and Other | |||
| three months ended 30 June | 2014 | 2013 | 2014 | 2013 | 2014 2013 |
2014 2013 |
2014 |
| Interest and similar income | 74 | 53 | 149 | 154 | 8 – |
(1) – |
230 |
| Operating income from financial assets and liabilities carried at fair value through income (net) | 7 | 7 | 4 | 3 | (2) – |
– – |
9 |
| Fee and commission income | 15 | 10 | 125 | 125 | 39 41 |
(1) (1) |
178 |
| Other income | – | – | – | (2) | – 1 |
– – |
– |
| Operating revenues | 96 | 70 | 278 | 280 | 45 42 |
(2) (1) |
417 |
| Interest expenses, excluding interest expenses from external debt | (84) | (86) | (65) | (72) | (1) – |
1 – |
(149) |
| Loan loss provisions | – | – | (15) | (15) | – – |
– – |
(15) |
| Investment expenses | (17) | (20) | – | – | (2) (1) |
1 1 |
(18) |
| Administrative expenses (net), excluding aquisition-related expenses | (161) | (184) | (100) | (117) | (34) (37) |
– – |
(295) |
| Fee and commission expenses | (78) | (57) | (81) | (74) | – – |
– – |
(159) |
| Restructuring charges | – | – | – | (2) | – – |
– – |
– |
| Other expenses | – | – | – | (1) | – – |
– – |
– |
| Operating expenses | (340) | (347) | (261) | (281) | (37) (38) |
2 1 |
(636) |
| Operating profit (loss) | (244) | (277) | 17 | (1) | 8 4 |
– – |
(219) |
| Non-operating income from financial assets and liabilities carried at fair value through income (net) | (2) | (10) | – | – | – 1 |
– – |
(2) |
| Realized gains/losses (net) | 34 | 201 | 5 | 5 | – – |
– – |
39 |
| Impairments of investments (net) | (1) | (22) | – | (1) | – – |
– – |
(1) |
| Income from fully consolidated private equity investments (net) | – | – | – | – | (5) (7) |
– – |
(5) |
| Interest expenses from external debt | (207) | (233) | – | – | – – |
– – |
(207) |
| Acquisition-related expenses | 2 | – | – | – | – – |
– – |
2 |
| Amortization of intangible assets | (3) | (3) | – | – | – – |
– – |
(3) |
| Non-operating items | (177) | (67) | 5 | 4 | (5) (6) |
– – |
(177) |
| Income (loss) before income taxes | (421) | (344) | 22 | 3 | 3 (2) |
– – |
(396) |
| Income taxes | 163 | 64 | (8) | – | (7) 2 |
– – |
148 |
| Net income (loss) | (258) | (280) | 14 | 3 | (4) – |
– – |
(248) |
| Net income (loss) attributable to: | |||||||
| Non-controlling interests | – | – | 2 | 1 | 4 (1) |
– – |
6 |
| Shareholders | (258) | (280) | 12 | 2 | (8) 1 |
– – |
(254) |
| Cost-income ratio1 for the reportable segment Banking in % | 75.8 | 89.6 | |||||
1 Represents investment expenses, administrative expenses (net), excluding acquisition-related expenses, restructuring charges and other expenses divided by interest and similar income, operating income from financial assets and liabilities carried at fair value through income (net), fee and commission income, other income, interest expenses, excluding interest expenses from external debt, and fee and commission expenses.
| B | Condensed Consolidated Interim Financial Statements | |||
|---|---|---|---|---|
| 47 Consolidated Balance Sheets | 49 Consolidated Statements of | 50 Consolidated Statements of Changes | 51 Consolidated Statements of Cash Flows | |
| 48 Consolidated Income Statements | Comprehensive Income | in Equity | 53 Notes |
| Banking | Alternative Investments | Consolidation | Corporate and Other | ||||
|---|---|---|---|---|---|---|---|
| 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 |
| 149 | 154 | 8 | – | (1) | – | 230 | 207 |
| 4 | 3 | (2) | – | – | – | 9 | 10 |
| 125 | 125 | 39 | 41 | (1) | (1) | 178 | 175 |
| – | (2) | – | 1 | – | – | – | (1) |
| 278 | 280 | 45 | 42 | (2) | (1) | 417 | 391 |
| (65) | (72) | (1) | – | 1 | – | (149) | (158) |
| (15) | (15) | – | – | – | – | (15) | (15) |
| – | – | (2) | (1) | 1 | 1 | (18) | (20) |
| (100) | (117) | (34) | (37) | – | – | (295) | (338) |
| (81) | (74) | – | – | – | – | (159) | (131) |
| – | (2) | – | – | – | – | – | |
| – | (1) | – | – | – | – | – | |
| (261) | (281) | (37) | (38) | 2 | 1 | (636) | (665) |
| 17 | (1) | 8 | 4 | – | – | (219) | (274) |
| – | – | – | 1 | – | – | (2) | |
| 5 | 5 | – | – | – | – | 39 | |
| – | (1) | – | – | – | – | (1) | |
| – | – | (5) | (7) | – | – | (5) | |
| – | – | – | – | – | – | (207) | |
| – | – | – | – | – | – | 2 | |
| – | – | – | – | – | – | (3) | |
| 5 | 4 | (5) | (6) | – | – | (177) | |
| 22 | 3 | 3 | (2) | – | – | (396) | (343) |
| (8) | – | (7) | 2 | – | – | 148 | |
| 14 | 3 | (4) | – | – | – | (248) | |
| 2 | 1 | 4 | (1) | – | – | 6 | |
| 12 | 2 | (8) | 1 | – | – | (254) | |
| 75.8 | 89.6 | ||||||
| € mn | Holding&Treasury | |
|---|---|---|
| six months ended 30 June | 2014 | 2013 |
| Interest and similar income | 128 | 174 |
| Operating income from financial assets and liabilities carried at fair value through income (net) | 7 | 14 |
| Fee and commission income | 29 | 20 |
| Other income | – | – |
| Operating revenues | 164 | 208 |
| Interest expenses, excluding interest expenses from external debt | (162) | (175) |
| Loan loss provisions | – | – |
| Investment expenses | (31) | (38) |
| Administrative expenses (net), excluding aquisition-related expenses and one-off effect from pension revaluation | (316) | (330) |
| Fee and commission expenses | (147) | (109) |
| Restructuring charges | – | – |
| Other expenses | – | – |
| Operating expenses | (656) | (652) |
| Operating profit (loss) | (492) | (444) |
| Non-operating income from financial assets and liabilities carried at fair value through income (net) | (7) | (17) |
| Realized gains/losses (net) | 52 | 253 |
| Impairments of investments (net) | (4) | (73) |
| Income from fully consolidated private equity investments (net) | – | – |
| Interest expenses from external debt | (411) | (474) |
| Acquisition-related expenses | 3 | – |
| One-off effect from pension revaluation | 679 | – |
| Amortization of intangible assets | (5) | (7) |
| Non-operating items | 307 | (318) |
| Income (loss) before income taxes | (185) | (762) |
| Income taxes | 49 | 167 |
| Net income (loss) | (136) | (595) |
| Net income (loss) attributable to: | ||
| Non-controlling interests | – | – |
| Shareholders | (136) | (595) |
| Cost-income ratio1 for the reportable segment Banking in % | ||
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 | |||
|---|---|---|---|---|
| 47 Consolidated Balance Sheets | 49 Consolidated Statements of | 50 Consolidated Statements of Changes | 51 Consolidated Statements of Cash Flows | |
| 48 Consolidated Income Statements | Comprehensive Income | in Equity | 53 Notes |
| Banking | Alternative Investments | Consolidation | Corporate and Other | ||||
|---|---|---|---|---|---|---|---|
| 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 |
| 299 | 311 | 12 | 4 | (1) | – | 438 | 489 |
| 6 | 5 | (2) | – | – | – | 11 | |
| 241 | 245 | 76 | 80 | (1) | (2) | 345 | 343 |
| – | – | – | 2 | – | (1) | – | |
| 546 | 561 | 86 | 86 | (2) | (3) | 794 | |
| (131) | (145) | (1) | (1) | 1 | – | (293) | (321) |
| (24) | (29) | – | – | – | – | (24) | |
| – | – | (4) | (2) | 1 | 1 | (34) | |
| (210) | (245) | (65) | (68) | – | 2 | (591) | |
| (146) | (134) | – | – | – | – | (293) | |
| – | (90) | – | – | – | – | – | |
| – | (2) | – | – | – | – | – | |
| (511) | (645) | (70) | (71) | 2 | 3 | (1,235) | |
| 35 | (84) | 16 | 15 | – | – | (441) | |
| – | – | (1) | – | – | – | (8) | |
| 4 | 8 | – | – | – | 27 | 56 | |
| – | (1) | – | – | – | – | (4) | |
| – | – | (12) | (14) | – | – | (12) | |
| – | – | – | – | – | – | (411) | |
| – | – | – | – | – | – | 3 | |
| (1) | – | (3) | – | – | – | 675 | |
| – | – | – | (46) | – | – | (5) | |
| 3 | 7 | (16) | (60) | – | 27 | 294 | |
| 38 | (77) | – | (45) | – | 27 | (147) | |
| (13) | 24 | (6) | (3) | – | (5) | 30 | |
| 25 | (53) | (6) | (48) | – | 22 | (117) | |
| 4 | 3 | 6 | (1) | – | – | 10 | |
| 21 | (56) | (12) | (47) | – | 22 | (127) | |
| 78.1 | 119.5 |
| € mn | ||
|---|---|---|
| as of 30 June |
as of 31 December |
|
| 2014 | 2013 | |
| Financial assets held for trading | ||
| Debt securities | 395 | 360 |
| Equity securities | 158 | 139 |
| Derivative financial instruments | 1,415 | 2,013 |
| Subtotal | 1,968 | 2,512 |
| Financial assets designated at fair value through income |
||
| Debt securities | 2,353 | 2,279 |
| Equity securities | 1,921 | 1,870 |
| Subtotal | 4,274 | 4,149 |
| Total | 6,242 | 6,661 |
| € mn | as of 30 June 2014 |
as of 31 December 2013 |
|---|---|---|
| Available-for-sale investments | 429,237 | 392,233 |
| Held-to-maturity investments | 4,020 | 4,140 |
| Funds held by others under reinsurance contracts assumed |
1,052 | 894 |
| Investments in associates and joint ventures | 3,177 | 3,098 |
| Real estate held for investment | 10,943 | 10,783 |
| Total | 448,429 | 411,148 |
| B | Condensed Consolidated Interim Financial Statements | |||
|---|---|---|---|---|
| 47 Consolidated Balance Sheets | 49 Consolidated Statements of | 50 Consolidated Statements of Changes | 51 Consolidated Statements of Cash Flows | |
| 48 Consolidated Income Statements | Comprehensive Income | in Equity | 53 Notes |
| € mn | ||||||||
|---|---|---|---|---|---|---|---|---|
| as of 30 June 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) |
3,021 | 152 | (4) | 3,169 | 2,515 | 103 | (16) | 2,602 |
| Corporate mortgage-backed securities (residential and commercial) |
11,893 | 647 | (52) | 12,488 | 11,226 | 693 | (86) | 11,833 |
| Other asset-backed securities | 3,674 | 248 | (36) | 3,886 | 3,460 | 210 | (40) | 3,630 |
| Government and government agency bonds | ||||||||
| France | 30,905 | 5,438 | (20) | 36,323 | 31,410 | 2,471 | (177) | 33,704 |
| Italy | 26,502 | 4,063 | (3) | 30,562 | 26,304 | 2,001 | (91) | 28,214 |
| Germany | 12,607 | 1,423 | (4) | 14,026 | 14,852 | 918 | (46) | 15,724 |
| United States | 9,017 | 599 | (41) | 9,575 | 8,411 | 239 | (171) | 8,479 |
| Belgium | 5,880 | 1,158 | (1) | 7,037 | 5,968 | 613 | (3) | 6,578 |
| Korea | 6,014 | 602 | (6) | 6,610 | 5,798 | 427 | (26) | 6,199 |
| Austria | 5,493 | 929 | (1) | 6,421 | 4,941 | 468 | (23) | 5,386 |
| Spain | 4,752 | 553 | (1) | 5,304 | 2,813 | 178 | (35) | 2,956 |
| Switzerland | 4,642 | 447 | (22) | 5,067 | 4,376 | 330 | (80) | 4,626 |
| Netherlands | 3,743 | 287 | (1) | 4,029 | 3,627 | 159 | (26) | 3,760 |
| Hungary | 819 | 94 | – | 913 | 773 | 60 | – | 833 |
| Portugal | 197 | 23 | – | 220 | 196 | 2 | (2) | 196 |
| Ireland | 50 | – | – | 50 | 38 | 1 | – | 39 |
| Greece | 1 | 2 | – | 3 | 1 | 2 | – | 3 |
| Supranationals | 14,566 | 1,780 | (3) | 16,343 | 14,571 | 663 | (56) | 15,178 |
| All other countries | 32,970 | 1,684 | (221) | 34,433 | 30,854 | 944 | (723) | 31,075 |
| Subtotal | 158,158 | 19,082 | (324) | 176,916 | 154,933 | 9,476 | (1,459) | 162,950 |
| Corporate bonds1 | 180,446 | 15,020 | (306) | 195,160 | 168,353 | 9,212 | (1,397) | 176,168 |
| Other | 2,088 | 399 | (4) | 2,483 | 2,230 | 324 | (4) | 2,550 |
| Subtotal | 359,280 | 35,548 | (726) | 394,102 | 342,717 | 20,018 | (3,002) | 359,733 |
| Equity securities2 | 24,684 | 10,605 | (154) | 35,135 | 23,022 | 9,624 | (146) | 32,500 |
| Total | 383,964 | 46,153 | (880) | 429,237 | 365,739 | 29,642 | (3,148) | 392,233 |
1 Includes bonds issued by Spanish banks with a fair value of € 504 mn (2013: € 418 mn), thereof subordinated bonds with a fair value of € 137 mn (2013: € 115 mn).
2 Includes shares invested in Spanish banks with a fair value of € 470 mn (2013: € 402 mn).
| € mn | ||||||
|---|---|---|---|---|---|---|
| as of 30 June 2014 | as of 31 December 2013 | |||||
| Banks | Customers | Total | Banks | Customers | Total | |
| Short-term investments and certificates of deposit | 3,202 | – | 3,202 | 3,275 | – | 3,275 |
| Reverse repurchase agreements | 89 | – | 89 | 613 | – | 613 |
| Collateral paid for securities borrowing transactions and derivatives | 364 | – | 364 | 315 | – | 315 |
| Loans | 57,4211 | 52,860 | 110,281 | 60,5111 | 51,595 | 112,106 |
| Other | 571 | 13 | 584 | 670 | 15 | 685 |
| Subtotal | 61,647 | 52,873 | 114,520 | 65,384 | 51,610 | 116,994 |
| Loan loss allowance | – | (150) | (150) | – | (194) | (194) |
| Total | 61,647 | 52,723 | 114,370 | 65,384 | 51,416 | 116,800 |
1 Primarily include covered bonds.
| € mn | ||
|---|---|---|
| as of | as of | |
| 30 June 2014 |
31 December 2013 |
|
| Unearned premiums | 1,932 | 1,537 |
| Reserves for loss and loss adjustment expenses | 6,755 | 6,494 |
| Aggregate policy reserves | 4,507 | 4,463 |
| Other insurance reserves | 117 | 115 |
| Total | 13,311 | 12,609 |
| as of | |
|---|---|
| 31 December | |
| 2014 | 2013 |
| 4,692 | 4,354 |
| 15,486 | 15,837 |
| – | 159 |
| 20,178 | 20,350 |
| 948 | 1,046 |
| 646 | 807 |
| 21,772 | 22,203 |
| as of 30 June |
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 | as of | |
| 30 June | 31 December | |
| 2014 | 2013 | |
| Receivables | ||
| Policyholders | 5,627 | 5,489 |
| Agents | 4,987 | 4,424 |
| Reinsurers | 2,102 | 1,844 |
| Other | 5,094 | 4,160 |
| Less allowance for doubtful accounts | (653) | (720) |
| Subtotal | 17,157 | 15,197 |
| Tax receivables | ||
| Income taxes | 1,316 | 2,159 |
| Other taxes | 1,240 | 1,215 |
| Subtotal | 2,556 | 3,374 |
| Accrued dividends, interest and rent | 6,968 | 7,706 |
| Prepaid expenses | ||
| Interest and rent | 18 | 13 |
| Other prepaid expenses | 304 | 255 |
| Subtotal | 322 | 268 |
| Derivative financial instruments used for hedging | ||
| that meet the criteria for hedge accounting and | ||
| firm commitments | 239 | 75 |
| Property and equipment | ||
| Real estate held for own use | 2,374 | 2,423 |
| Software | 1,963 | 1,832 |
| Equipment | 1,218 | 1,173 |
| Fixed assets of alternative investments | 1,325 | 1,304 |
| Subtotal | 6,880 | 6,732 |
| Other assets | 1,512 | 1,280 |
| Total | 35,634 | 34,632 |
48 Consolidated Income Statements
49 Consolidated Statements of Comprehensive Income
in Equity
| as of | as of 31 December |
|---|---|
| 2014 | 2013 |
| 281 | 131 |
| 4 | – |
| – | 16 |
| 285 | 147 |
| 30 June |
Investments in associates and joint ventures comprised an investment of € 151 mn in an associated Italian real estate company allocated to the reportable segment Western and Southern Europe (Property-Casualty). Furthermore, two investments of € 112 mn in total in U.S. real estate companies allocated to the reportable segment German Speaking Countries (Life/Health) were classified as held for sale. Additionally, the investments in associates and joint ventures comprised an investment of € 18 mn in an associated French media group allocated to the reportable segment German Speaking Countries (Property-Casualty and Life/Health). Upon measurement of the investments in associates and joint ventures classified as held for sale at fair value less costs to sell, an impairment of € 1 mn in total was recognized for the three and six months ended 30 June 2014. The sales of the investments in these associates and joint ventures will be completed during the year ended 31 December 2014.
As of 30 June 2014, real estate held for investment classified as held for sale comprised of an office building allocated to the reportable segment Holding&Treasury. The sale of this building is expected to be completed during the third quarter of 2014. Upon measurement of the non-current asset at fair value less costs to sell, no impairment loss was recognized for the three and the six months ended 30 June 2014.
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 | as of | |
| 30 June | 31 December | |
| 2014 | 2013 | |
| Intangible assets with indefinite useful lives | ||
| Goodwill | 11,574 | 11,544 |
| Brand names1 | 293 | 296 |
| Subtotal | 11,867 | 11,840 |
| Intangible assets with finite useful lives | ||
| Distribution agreements2 | 964 | 995 |
| Customer relationships3 | 129 | 149 |
| Other4 | 122 | 116 |
| Subtotal | 1,215 | 1,260 |
| Total | 13,082 | 13,100 |
1 Includes primarily the brand name of Selecta AG, Muntelier.
2 Includes primarily the long-term distribution agreements with Commerzbank AG of € 354 mn (2013: € 373 mn), Banco Popular S.A. of € 361 mn (2013: € 369 mn), Yapı Kredi Bank of € 149 mn (2013: € 151 mn) and HSBC in Asia and Turkey of € 76 mn (2013: € 78 mn).
3 Includes primarily customer relationships from the acquisition of Selecta of € 101 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 € 64 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 | 6 | 2 |
| Disposals | – | – |
| Foreign currency translation adjustments | 24 | 4 |
| Impairments | – | (46) |
| Carrying amount as of 30 June | 11,574 | 11,639 |
| Accumulated impairments as of 30 June | 990 | 940 |
| Cost as of 30 June | 12,564 | 12,579 |
| € mn | as of 30 June 2014 |
as of 31 December 2013 |
|---|---|---|
| Financial liabilities held for trading | ||
| Derivative financial instruments | 6,348 | 6,010 |
| Other trading liabilities | 3 | 3 |
| Subtotal | 6,351 | 6,013 |
| Financial liabilities designated at fair value through income |
– | – |
| Total | 6,351 | 6,013 |
| € mn | as of 30 June 2014 | as of 31 December 2013 | ||||
|---|---|---|---|---|---|---|
| Banks | Customers | Total | Banks | Customers | Total | |
| Payable on demand | 241 | 4,630 | 4,871 | 696 | 4,473 | 5,169 |
| Savings deposits | – | 2,842 | 2,842 | – | 2,873 | 2,873 |
| Term deposits and certificates of deposit | 958 | 1,957 | 2,915 | 979 | 2,157 | 3,136 |
| Repurchase agreements | 1,041 | 1 | 1,042 | 1,028 | 3 | 1,031 |
| Collateral received from securities lending transactions and derivatives | 2,499 | – | 2,499 | 2,216 | – | 2,216 |
| Other | 4,617 | 3,864 | 8,481 | 5,050 | 3,634 | 8,684 |
| Total | 9,356 | 13,294 | 22,650 | 9,969 | 13,140 | 23,109 |
50 Consolidated Statements of Changes in Equity
51 Consolidated Statements of Cash Flows 53 Notes
| € mn | ||
|---|---|---|
| as of | as of | |
| 30 June | 31 December | |
| 2014 | 2013 | |
| Property-Casualty | 57,339 | 56,614 |
| Life/Health | 10,370 | 9,961 |
| Consolidation | (17) | (9) |
| Total | 67,692 | 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 six months ended 30 June 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.
change in the reserves for loss and loss adjustment expenses in the property-casualty business segment
| € mn | ||||||
|---|---|---|---|---|---|---|
| 2014 | 2013 | |||||
| Gross | Ceded | Net | Gross | Ceded | Net | |
| As of 1 January | 56,614 | (6,071) | 50,543 | 62,711 | (6,905) | 55,806 |
| Balance carry forward of discounted loss reserves | 3,207 | (306) | 2,901 | – | – | – |
| Subtotal | 59,821 | (6,377) | 53,444 | 62,711 | (6,905) | 55,806 |
| Loss and loss adjustment expenses incurred | ||||||
| Current year | 15,515 | (1,083) | 14,432 | 15,939 | (1,396) | 14,543 |
| Prior years | (703) | 84 | (619) | (918) | 172 | (746) |
| Subtotal | 14,812 | (999) | 13,813 | 15,021 | (1,224) | 13,797 |
| Loss and loss adjustment expenses paid | ||||||
| Current year | (5,853) | 222 | (5,631) | (5,831) | 197 | (5,634) |
| Prior years | (8,709) | 672 | (8,037) | (9,793) | 938 | (8,855) |
| Subtotal | (14,562) | 894 | (13,668) | (15,624) | 1,135 | (14,489) |
| Foreign currency translation adjustments and other changes | 717 | (127) | 590 | (491) | 67 | (424) |
| Changes in the consolidated subsidiaries of the Allianz Group | – | – | – | (20) | – | (20) |
| Subtotal | 60,788 | (6,609) | 54,179 | 61,597 | (6,927) | 54,670 |
| Ending balance of discounted loss reserves | (3,449) | 300 | (3,149) | (3,207) | 280 | (2,927) |
| As of 30 June | 57,339 | (6,309) | 51,030 | 58,390 | (6,647) | 51,743 |
| € mn | as of 30 June 2014 |
as of 31 December 2013 |
|---|---|---|
| Aggregate policy reserves1 | 379,902 | 365,519 |
| Reserves for premium refunds | 50,431 | 37,772 |
| Other insurance reserves | 801 | 781 |
| Total | 431,134 | 404,072 |
1 Includes discounted loss reserves of € 3,449 mn (2013: € 3,207 mn) in the Property-Casualty business segment.
| € mn | ||
|---|---|---|
| as of 30 June |
as of 31 December |
|
| 2014 | 2013 | |
| Payables | ||
| Policyholders | 4,072 | 4,911 |
| Reinsurance | 1,412 | 1,170 |
| Agents | 1,540 | 1,604 |
| Subtotal | 7,024 | 7,685 |
| Payables for social security | 406 | 395 |
| Tax payables | ||
| Income taxes | 2,239 | 2,580 |
| Other taxes | 1,354 | 1,269 |
| Subtotal | 3,593 | 3,849 |
| Accrued interest and rent | 663 | 681 |
| Unearned income | ||
| Interest and rent | 24 | 16 |
| Other | 289 | 261 |
| Subtotal | 313 | 277 |
| Provisions | ||
| Pensions and similar obligations | 8,470 | 7,594 |
| Employee related | 2,097 | 2,104 |
| Share-based compensation plans | 481 | 685 |
| Restructuring plans | 123 | 214 |
| Loan commitments | 26 | 42 |
| Contingent losses from non-insurance business | 121 | 130 |
| Other provisions | 1,414 | 1,617 |
| Subtotal | 12,732 | 12,386 |
| Deposits retained for reinsurance ceded | 1,995 | 1,874 |
| Derivative financial instruments used for hedging that meet the criteria for hedge accounting and firm commitments |
197 | 158 |
| Financial liabilities for puttable equity instruments | 2,578 | 2,613 |
| Other liabilities | 7,173 | 6,514 |
| Total | 36,674 | 36,432 |
| B | Condensed Consolidated Interim Financial Statements | |||
|---|---|---|---|---|
| 47 Consolidated Balance Sheets | 49 Consolidated Statements of | 50 Consolidated Statements of Changes | 51 Consolidated Statements of Cash Flows | |
| 48 Consolidated Income Statements | Comprehensive Income | in Equity | 53 Notes |
| € mn | ||
|---|---|---|
| as of | as of | |
| 30 June | 31 December | |
| 2014 | 2013 | |
| Allianz SE1 | ||
| Senior bonds | 6,620 | 6,581 |
| Money market securities | 939 | 869 |
| Subtotal | 7,559 | 7,450 |
| Banking subsidiaries | ||
| Senior bonds | 531 | 580 |
| Subtotal | 531 | 580 |
| Total | 8,090 | 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 | as of | |
| 30 June | 31 December | |
| 2014 | 2013 | |
| Shareholders' equity | ||
| Issued capital | 1,169 | 1,169 |
| Capital reserves | 27,701 | 27,701 |
| Retained earnings1 | 18,046 | 17,785 |
| Foreign currency translation adjustments | (3,077) | (3,312) |
| Unrealized gains and losses (net)2 | 11,140 | 6,741 |
| Subtotal | 54,979 | 50,084 |
| Non-controlling interests | 2,833 | 2,765 |
| Total | 57,812 | 52,849 |
1 As of 30 June 2014, includes € (216) mn (2013: € (220) mn) related to treasury shares. 2 As of 30 June 2014, includes € 251 mn (2013: € 203 mn) related to cash flow hedges.
| € mn | ||
|---|---|---|
| as of | as of | |
| 30 June | 31 December | |
| 2014 | 2013 | |
| Allianz SE1 | ||
| Subordinated bonds2 | 9,776 | 10,856 |
| Subtotal | 9,776 | 10,856 |
| Banking subsidiaries | ||
| Subordinated bonds | 254 | 254 |
| Subtotal | 254 | 254 |
| All other subsidiaries | ||
| Subordinated bonds | 400 | 399 |
| Hybrid equity | 45 | 45 |
| Subtotal | 445 | 444 |
| Total | 10,475 | 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.
dividends
In the second quarter of 2014, a total dividend of € 2,405 MN (2013: € 2,039 MN) or € 5.30 (2013: € 4.50) per qualifiying share was paid to the shareholders.
| € mn | ||||
|---|---|---|---|---|
| three months ended 30 June | Property Casualty |
Life/Health | Consoli dation |
Group |
| 2014 | ||||
| Premiums written | ||||
| Direct | 10,102 | 6,054 | – | 16,156 |
| Assumed | 744 | 220 | (23) | 941 |
| Subtotal | 10,846 | 6,274 | (23) | 17,097 |
| Ceded | (936) | (217) | 23 | (1,130) |
| Net | 9,910 | 6,057 | – | 15,967 |
| Change in unearned premiums |
||||
| Direct | 953 | (71) | – | 882 |
| Assumed | (222) | 6 | 4 | (212) |
| Subtotal | 731 | (65) | 4 | 670 |
| Ceded | 60 | 7 | (4) | 63 |
| Net | 791 | (58) | – | 733 |
| Premiums earned | ||||
| Direct | 11,055 | 5,983 | – | 17,038 |
| Assumed | 522 | 226 | (19) | 729 |
| Subtotal | 11,577 | 6,209 | (19) | 17,767 |
| Ceded | (876) | (210) | 19 | (1,067) |
| Net | 10,701 | 5,999 | – | 16,700 |
| 2013 | ||||
| Premiums written | ||||
| Direct | 10,049 | 5,961 | – | 16,010 |
| Assumed | 705 | 144 | (11) | 838 |
| Subtotal | 10,754 | 6,105 | (11) | 16,848 |
| Ceded | (1,121) | (142) | 11 | (1,252) |
| Net | 9,633 | 5,963 | – | 15,596 |
| Change in unearned premiums |
||||
| Direct | 837 | (46) | – | 791 |
| Assumed | (132) | (4) | – | (136) |
| Subtotal | 705 | (50) | – | 655 |
| Ceded | 41 | (1) | – | 40 |
| Net | 746 | (51) | – | 695 |
| Premiums earned | ||||
| Direct | 10,886 | 5,915 | – | 16,801 |
| Assumed | 573 | 140 | (11) | 702 |
| Subtotal | 11,459 | 6,055 | (11) | 17,503 |
| Ceded | (1,080) | (143) | 11 | (1,212) |
| Net | 10,379 | 5,912 | – | 16,291 |
| six months ended 30 June 2014 Premiums written Direct |
Property Casualty 24,556 1,507 26,063 |
Life/Health 12,507 |
Consoli dation |
Group |
|---|---|---|---|---|
| – | 37,063 | |||
| Assumed | 382 | (44) | 1,845 | |
| Subtotal | 12,889 | (44) | 38,908 | |
| Ceded | (2,163) | (373) | 44 | (2,492) |
| Net | 23,900 | 12,516 | – | 36,416 |
| Change in unearned premiums |
||||
| Direct | (2,866) | (228) | – | (3,094) |
| Assumed | (316) | (19) | 7 | (328) |
| Subtotal | (3,182) | (247) | 7 | (3,422) |
| Ceded | 393 | 6 | (7) | 392 |
| Net | (2,789) | (241) | – | (3,030) |
| Premiums earned | ||||
| Direct | 21,690 | 12,279 | – | 33,969 |
| Assumed | 1,191 | 363 | (37) | 1,517 |
| Subtotal | 22,881 | 12,642 | (37) | 35,486 |
| Ceded | (1,770) | (367) | 37 | (2,100) |
| Net | 21,111 | 12,275 | – | 33,386 |
| 2013 | ||||
| Premiums written | ||||
| Direct | 24,565 | 12,421 | – | 36,986 |
| Assumed | 1,386 | 306 | (25) | 1,667 |
| Subtotal | 25,951 | 12,727 | (25) | 38,653 |
| Ceded | (2,431) | (291) | 25 | (2,697) |
| Net | 23,520 | 12,436 | – | 35,956 |
| Change in unearned premiums |
||||
| Direct | (3,006) | (165) | – | (3,171) |
| Assumed | (243) | 1 | (1) | (243) |
| Subtotal | (3,249) | (164) | (1) | (3,414) |
| Ceded | 420 | – | 1 | 421 |
| Net | (2,829) | (164) | – | (2,993) |
| Premiums earned | ||||
| Direct | 21,559 | 12,256 | – | 33,815 |
| Assumed | 1,143 | 307 | (26) | 1,424 |
| Subtotal | 22,702 | 12,563 | (26) | 35,239 |
| Ceded | (2,011) | (291) | 26 | (2,276) |
| Net | 20,691 | 12,272 | – | 32,963 |
| B | Condensed Consolidated Interim Financial Statements | |||
|---|---|---|---|---|
| 47 Consolidated Balance Sheets | 49 Consolidated Statements of | 50 Consolidated Statements of Changes | 51 Consolidated Statements of Cash Flows | |
| 48 Consolidated Income Statements | Comprehensive Income | in Equity | 53 Notes |
| € mn | three months ended 30 June | six months ended 30 June | |||
|---|---|---|---|---|---|
| 2014 | 2013 | 2014 | 2013 | ||
| Interest from held-to-maturity investments | 40 | 46 | 83 | 93 | |
| Dividends from available-for-sale investments | 594 | 524 | 892 | 823 | |
| Interest from available-for-sale investments | 3,363 | 3,334 | 6,659 | 6,615 | |
| Share of earnings from investments in associates and joint ventures | 57 | 19 | 94 | 46 | |
| Rent from real estate held for investment | 214 | 202 | 421 | 393 | |
| Interest from loans to banks and customers | 1,219 | 1,261 | 2,435 | 2,544 | |
| Other interest | 51 | 27 | 93 | 66 | |
| Total | 5,538 | 5,413 | 10,677 | 10,580 |
| Property Casualty |
Life/Health | Asset Management |
Corporate and Other |
Consolidation | Group |
|---|---|---|---|---|---|
| (19) | (292) | – | 8 | (1) | (304) |
| – | 91 | 3 | 2 | (1) | 95 |
| 1 | (51) | – | – | – | (50) |
| 17 | 191 | 1 | (3) | – | 206 |
| (1) | (61) | 4 | 7 | (2) | (53) |
| 31 | (156) | – | (95) | 3 | (217) |
| 26 | (3) | (1) | (1) | (1) | 20 |
| (25) | (3) | 1 | – | – | (27) |
| (44) | (530) | – | 97 | – | (477) |
| (12) | (692) | – | 1 | 2 | (701) |
| € mn | ||||||
|---|---|---|---|---|---|---|
| six months ended 30 June | Property Casualty |
Life/Health | Asset Management |
Corporate and Other |
Consolidation | Group |
| 2014 | ||||||
| Income (expenses) from financial assets and liabilities held for trading (net) | (77) | (664) | (1) | 9 | (1) | (734) |
| Income (expenses) from financial assets and liabilities designated at fair value through income (net) |
– | 143 | 3 | 2 | (1) | 147 |
| Income (expenses) from financial liabilities for puttable equity instruments (net) | 1 | (78) | – | – | – | (77) |
| Foreign currency gains and losses (net) | 30 | 269 | 1 | (8) | – | 292 |
| Total | (46) | (330) | 3 | 3 | (2) | (372) |
| 2013 | ||||||
| Income (expenses) from financial assets and liabilities held for trading (net) | (14) | (812) | – | (55) | 2 | (879) |
| Income (expenses) from financial assets and liabilities designated at fair value through income (net) |
24 | 84 | 18 | – | (1) | 125 |
| Income (expenses) from financial liabilities for puttable equity instruments (net) | (19) | (41) | (12) | – | – | (72) |
| Foreign currency gains and losses (net) | (4) | (154) | 1 | 57 | – | (100) |
| Total | (13) | (923) | 7 | 2 | 1 | (926) |
For the three months ended 30 June 2014, income and expenses from financial assets and liabilities held for trading (net) in the business segment Life/Health includes expenses of € 302 mn (2013: € 153 mn) from derivative financial instruments. Included in this are expenses of € 59 mn (2013: income of € 36 mn) from financial derivative positions of German entities, of which income of € 148 mn (2013: expenses of € 199 mn) relates to duration management, expenses of € 27 mn (2013: € 22 mn) relate to protection against equity fluctuations and expenses of € 188 mn (2013: income of € 247 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 € 218 mn (2013: € 179 mn) from U.S. entities.
For the three months ended 30 June 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 € 57 mn (2013: expenses of € 6 mn) and income of € 34 mn (2013: € 3 mn) from debt investments.
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 € 204 mn (2013: income of € 167 mn) were recognized for the three months ended 30 June 2014.
Comprehensive Income
50 Consolidated Statements of Changes in Equity
| € mn | |||||
|---|---|---|---|---|---|
| three months ended 30 June |
six months ended 30 June |
||||
| 2014 | 2013 | 2014 | 2013 | ||
| Realized gains | |||||
| Available-for-sale investments | |||||
| Equity securities | 415 | 547 | 837 | 1,144 | |
| Debt securities | 499 | 596 | 974 | 1,133 | |
| Subtotal | 914 | 1,143 | 1,811 | 2,277 | |
| Investments in associates and joint ventures1 |
10 | 2 | 20 | 39 | |
| Real estate held for investment | 66 | 29 | 83 | 78 | |
| Loans and advances to banks and customers |
114 | 140 | 183 | 186 | |
| Non-current assets classified as held for sale |
1 | – | 1 | 12 | |
| Subtotal | 1,105 | 1,314 | 2,098 | 2,592 | |
| Realized losses | |||||
| Available-for-sale investments | |||||
| Equity securities | (26) | (34) | (51) | (90) | |
| Debt securities | (49) | (86) | (104) | (154) | |
| Subtotal | (75) | (120) | (155) | (244) | |
| Investments in associates and joint ventures2 |
(1) | – | (5) | (3) | |
| Real estate held for investment | (2) | (1) | (5) | (3) | |
| Loans and advances to banks and customers |
(1) | (2) | (1) | (2) | |
| Non-current assets classified as held for sale |
– | – | – | (3) | |
| Subtotal | (79) | (123) | (166) | (255) | |
| Total | 1,026 | 1,191 | 1,932 | 2,337 | |
1 For the three and the six months ended 30 June 2014, includes realized gains from the disposal of subsidiaries and businesses of € – mn (2013: € 2 mn) and € – mn (2013: € 39 mn), respectively.
2 For the three and the six months ended 30 June 2014, includes realized losses from the disposal of subsidiaries of € – mn (2013: € – mn) and € – mn (2013: € 3 mn), respectively.
| € mn | ||||||
|---|---|---|---|---|---|---|
| three months ended 30 June |
six months ended 30 June |
|||||
| 2014 | 2013 | 2014 | 2013 | |||
| Property-Casualty | ||||||
| Fees from credit and assistance business |
193 | 196 | 389 | 379 | ||
| Service agreements | 109 | 111 | 219 | 218 | ||
| Subtotal | 302 | 307 | 608 | 597 | ||
| Life/Health | ||||||
| Service agreements | 28 | 21 | 51 | 39 | ||
| Investment advisory | 232 | 147 | 438 | 269 | ||
| Other | 1 | – | 1 | – | ||
| Subtotal | 261 | 168 | 490 | 308 | ||
| Asset Management | ||||||
| Management fees | 1,701 | 1,895 | 3,356 | 3,698 | ||
| Loading and exit fees | 190 | 194 | 360 | 374 | ||
| Performance fees | 67 | 78 | 86 | 354 | ||
| Other | 14 | 12 | 31 | 39 | ||
| Subtotal | 1,972 | 2,179 | 3,833 | 4,465 | ||
| Corporate and Other | ||||||
| Service agreements | 16 | 12 | 33 | 25 | ||
| Investment advisory and banking activities |
162 | 163 | 312 | 318 | ||
| Subtotal | 178 | 175 | 345 | 343 | ||
| Consolidation | (175) | (150) | (330) | (280) | ||
| Total | 2,538 | 2,679 | 4,946 | 5,433 |
| € mn | three months ended 30 June |
six months ended 30 June |
|||
|---|---|---|---|---|---|
| 2014 | 2013 | 2014 | 2013 | ||
| Realized gains from disposals of real estate held for own use |
3 | 2 | 23 | 17 | |
| Income from alternative investments |
41 | 39 | 98 | 81 | |
| Other | 1 | 1 | 2 | 4 | |
| Total | 45 | 42 | 123 | 102 |
| € mn | ||||
|---|---|---|---|---|
| three months ended 30 June |
six months ended 30 June |
|||
| 2014 | 2013 | 2014 | 2013 | |
| Income | ||||
| Sales and service revenues | 174 | 184 | 343 | 362 |
| Subtotal | 174 | 184 | 343 | 362 |
| Expenses | ||||
| Cost of goods sold | (53) | (54) | (107) | (109) |
| General and administrative expenses |
(119) | (128) | (233) | (250) |
| Interest expenses | (7) | (9) | (15) | (17) |
| Subtotal | (179) | (191) | (355) | (376) |
| Consolidation1 | 5 | 3 | 7 | 6 |
| Total | – | (4) | (5) | (8) |
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.
| € mn | ||||
|---|---|---|---|---|
| three months ended 30 June | Property Casualty |
Life/Health | Consoli dation |
Group |
| 2014 | ||||
| Gross | ||||
| Claims and insurance benefits paid |
(7,251) | (5,071) | 12 | (12,310) |
| Change in reserves for loss and loss adjustment expenses |
(428) | (223) | (1) | (652) |
| Subtotal | (7,679) | (5,294) | 11 | (12,962) |
| Ceded | ||||
| Claims and insurance benefits paid |
492 | 114 | (10) | 596 |
| Change in reserves for loss and loss adjustment |
||||
| expenses | 101 | 7 | 1 | 109 |
| Subtotal | 593 | 121 | (9) | 705 |
| Net | ||||
| Claims and insurance benefits paid |
(6,759) | (4,957) | 2 | (11,714) |
| Change in reserves for loss and loss adjustment |
||||
| expenses | (327) | (216) | – | (543) |
| Total | (7,086) | (5,173) | 2 | (12,257) |
| 2013 | ||||
| Gross | ||||
| Claims and insurance benefits paid |
(7,474) | (4,948) | 5 | (12,417) |
| Change in reserves for loss and loss adjustment expenses |
(329) | (132) | 1 | (460) |
| Subtotal | (7,803) | (5,080) | 6 | (12,877) |
| Ceded | ||||
| Claims and insurance benefits paid |
474 | 93 | (3) | 564 |
| Change in reserves for loss and loss adjustment |
||||
| expenses | 345 | (3) | (1) | 341 |
| Subtotal | 819 | 90 | (4) | 905 |
| Net | ||||
| Claims and insurance benefits paid |
(7,000) | (4,855) | 2 | (11,853) |
| Change in reserves for loss and loss adjustment expenses |
16 | (135) | – | (119) |
| Total | (6,984) | (4,990) | 2 | (11,972) |
Comprehensive Income
50 Consolidated Statements of Changes in Equity
| € mn | ||||
|---|---|---|---|---|
| six months ended 30 June | Property Casualty |
Life/Health | Consoli dation |
Group |
| 2014 | ||||
| Gross | ||||
| Claims and insurance benefits paid |
(14,562) | (10,255) | 21 | (24,796) |
| Change in reserves for loss and loss adjustment expenses |
(250) | (249) | 1 | (498) |
| Subtotal | (14,812) | (10,504) | 22 | (25,294) |
| Ceded | ||||
| Claims and insurance benefits paid |
894 | 228 | (18) | 1,104 |
| Change in reserves for loss and loss adjustment expenses |
105 | 22 | (3) | 124 |
| Subtotal | 999 | 250 | (21) | 1,228 |
| Net | ||||
| Claims and insurance benefits paid |
(13,668) | (10,027) | 3 | (23,692) |
| Change in reserves for loss and loss adjustment expenses |
(145) | (227) | (2) | (374) |
| Total | (13,813) | (10,254) | 1 | (24,066) |
| 2013 | ||||
| Gross | ||||
| Claims and insurance benefits paid |
(15,624) | (9,998) | 14 | (25,608) |
| Change in reserves for loss and loss adjustment expenses |
603 | (54) | – | 549 |
| Subtotal | (15,021) | (10,052) | 14 | (25,059) |
| Ceded | ||||
| Claims and insurance benefits paid |
1,135 | 252 | (11) | 1,376 |
| Change in reserves for loss and loss adjustment expenses |
89 | (16) | – | 73 |
| Subtotal | 1,224 | 236 | (11) | 1,449 |
| Net | ||||
| Claims and insurance benefits paid |
(14,489) | (9,746) | 3 | (24,232) |
| Change in reserves for loss and loss adjustment |
||||
| expenses | 692 | (70) | – | 622 |
| Total | (13,797) | (9,816) | 3 | (23,610) |
| € mn | ||||
|---|---|---|---|---|
| three months ended 30 June | Property Casualty |
Life/Health | Consoli dation |
Group |
| 2014 | ||||
| Gross | ||||
| Aggregate policy reserves | (64) | (1,709) | (2) | (1,775) |
| Other insurance reserves | – | (36) | – | (36) |
| Expenses for premium refunds |
(72) | (1,801) | (5) | (1,878) |
| Subtotal | (136) | (3,546) | (7) | (3,689) |
| Ceded | ||||
| Aggregate policy reserves | 1 | 82 | 1 | 84 |
| Other insurance reserves | – | 3 | – | 3 |
| Expenses for premium refunds |
– | 4 | – | 4 |
| Subtotal | 1 | 89 | 1 | 91 |
| Net | ||||
| Aggregate policy reserves | (63) | (1,627) | (1) | (1,691) |
| Other insurance reserves | – | (33) | – | (33) |
| Expenses for premium refunds |
(72) | (1,797) | (5) | (1,874) |
| Total | (135) | (3,457) | (6) | (3,598) |
| 2013 | ||||
| Gross | ||||
| Aggregate policy reserves | (62) | (1,805) | (1) | (1,868) |
| Other insurance reserves | (1) | (7) | – | (8) |
| Expenses for premium refunds |
(37) | (1,178) | (42) | (1,257) |
| Subtotal | (100) | (2,990) | (43) | (3,133) |
| Ceded | ||||
| Aggregate policy reserves | 1 | 59 | (1) | 59 |
| Other insurance reserves | – | 1 | – | 1 |
| Expenses for premium refunds |
– | 2 | – | 2 |
| Subtotal | 1 | 62 | (1) | 62 |
| Net | ||||
| Aggregate policy reserves | (61) | (1,746) | (2) | (1,809) |
| Other insurance reserves | (1) | (6) | – | (7) |
| Expenses for premium refunds |
(37) | (1,176) | (42) | (1,255) |
| Total | (99) | (2,928) | (44) | (3,071) |
| € mn | ||||
|---|---|---|---|---|
| six months ended 30 June | Property Casualty |
Life/Health | Consoli dation |
Group |
| 2014 | ||||
| Gross | ||||
| Aggregate policy reserves | (129) | (3,702) | (1) | (3,832) |
| Other insurance reserves | (3) | (90) | – | (93) |
| Expenses for premium refunds |
(131) | (3,124) | (7) | (3,262) |
| Subtotal | (263) | (6,916) | (8) | (7,187) |
| Ceded | ||||
| Aggregate policy reserves | 3 | 133 | 1 | 137 |
| Other insurance reserves | – | 6 | – | 6 |
| Expenses for premium refunds |
– | 6 | – | 6 |
| Subtotal | 3 | 145 | 1 | 149 |
| Net | ||||
| Aggregate policy reserves | (126) | (3,569) | – | (3,695) |
| Other insurance reserves | (3) | (84) | – | (87) |
| Expenses for premium refunds |
(131) | (3,118) | (7) | (3,256) |
| Total | (260) | (6,771) | (7) | (7,038) |
| 2013 | ||||
| Gross | ||||
| Aggregate policy reserves | (111) | (3,831) | (1) | (3,943) |
| Other insurance reserves Expenses for |
(2) | (51) | – | (53) |
| premium refunds | (100) | (3,096) | (27) | (3,223) |
| Subtotal Ceded |
(213) | (6,978) | (28) | (7,219) |
| Aggregate policy reserves | 2 | 41 | (1) | 42 |
| Other insurance reserves | (1) | 4 | – | 3 |
| Expenses for | ||||
| premium refunds | – | 4 | – | 4 |
| Subtotal | 1 | 49 | (1) | 49 |
| Net | ||||
| Aggregate policy reserves | (109) | (3,790) | (2) | (3,901) |
| Other insurance reserves | (3) | (47) | – | (50) |
| Expenses for premium refunds |
(100) | (3,092) | (27) | (3,219) |
| Total | (212) | (6,929) | (29) | (7,170) |
| € mn | three months ended 30 June |
six months ended 30 June |
||
|---|---|---|---|---|
| 2014 | 2013 | 2014 | 2013 | |
| Liabilities to banks and customers |
(62) | (66) | (123) | (134) |
| Deposits retained on reinsurance ceded |
(10) | (11) | (22) | (23) |
| Certificated liabilities | (71) | (68) | (138) | (136) |
| Subordinated liabilities | (141) | (169) | (282) | (344) |
| Other | (24) | (21) | (45) | (49) |
| Total | (308) | (335) | (610) | (686) |
| € mn | three months ended 30 June |
six months ended 30 June |
||
|---|---|---|---|---|
| 2014 | 2013 | 2014 | 2013 | |
| Additions to allowances including direct impairments |
(45) | (32) | (73) | (80) |
| Amounts released | 23 | 11 | 35 | 39 |
| Recoveries on loans previously impaired |
7 | 6 | 14 | 12 |
| Total | (15) | (15) | (24) | (29) |
49 Consolidated Statements of Comprehensive Income
B Condensed Consolidated Interim Financial Statements
47 Consolidated Balance Sheets 48 Consolidated Income Statements
| € mn | ||||
|---|---|---|---|---|
| three months ended 30 June |
six months ended 30 June |
|||
| 2014 | 2013 | 2014 | 2013 | |
| Impairments | ||||
| Available-for-sale investments | ||||
| Equity securities | (54) | (145) | (188) | (259) |
| Debt securities | (18) | (21) | (244) | (25) |
| Subtotal | (72) | (166) | (432) | (284) |
| Real estate held for investment | (1) | (10) | (1) | (22) |
| Loans and advances to banks and customers |
– | (8) | (1) | (12) |
| Non-current assets classified as held for sale |
(1) | – | (2) | – |
| Subtotal | (74) | (184) | (436) | (318) |
| Reversals of impairments | ||||
| Available-for-sale investments | ||||
| Debt securities | – | 2 | – | 2 |
| Subtotal | – | 2 | – | 2 |
| Total | (74) | (182) | (436) | (316) |
| € mn | three months ended 30 June |
six months ended 30 June |
||
|---|---|---|---|---|
| 2014 | 2013 | 2014 | 2013 | |
| Investment management expenses |
(138) | (129) | (251) | (257) |
| Depreciation of real estate held for investment |
(56) | (51) | (112) | (101) |
| Other expenses from real estate held for investment |
(38) | (37) | (68) | (67) |
| Total | (232) | (217) | (431) | (425) |
53 Notes
51 Consolidated Statements of Cash Flows
50 Consolidated Statements of Changes
in Equity
| € mn | |||||
|---|---|---|---|---|---|
| three months ended 30 June |
six months ended 30 June |
||||
| 2014 | 2013 | 2014 | 2013 | ||
| Property-Casualty | |||||
| Acquisition costs | |||||
| Incurred | (2,330) | (2,361) | (5,095) | (5,073) | |
| Commissions and profit received on reinsurance business ceded |
76 | 112 | 193 | 220 | |
| Deferrals of acquisition costs | 1,433 | 1,392 | 3,261 | 3,143 | |
| Gross amortization of deferred acquisition costs |
(1,512) | (1,434) | (2,934) | (2,770) | |
| Subtotal | (2,333) | (2,291) | (4,575) | (4,480) | |
| Administrative expenses | (703) | (685) | (1,910)1 | (1,405) | |
| Subtotal | (3,036) | (2,976) | (6,485) | (5,885) | |
| Life/Health | |||||
| Acquisition costs | |||||
| Incurred | (1,332) | (1,135) | (2,547) | (2,256) | |
| Commissions and profit received on reinsurance |
|||||
| business ceded | 22 | 4 | 46 | 29 | |
| Deferrals of acquisition costs | 914 | 732 | 1,748 | 1,468 | |
| Gross amortization of deferred acquisition costs |
(628) | (719) | (1,157) | (1,276) | |
| Subtotal | (1,024) | (1,118) | (1,910) | (2,035) | |
| Administrative expenses | (424) | (360) | (799) | (691) | |
| Subtotal | (1,448) | (1,478) | (2,709) | (2,726) | |
| Asset Management | |||||
| Personnel expenses | (592) | (651) | (1,167)1 | (1,360) | |
| Non-personnel expenses | (340) | (374) | (649) | (698) | |
| Subtotal | (932) | (1,025) | (1,816) | (2,058) | |
| Corporate and Other | |||||
| Administrative expenses | (293) | (338) | 871 | (641) | |
| Subtotal | (293) | (338) | 87 | (641) | |
| Consolidation | 5 | 15 | (111)1 | 19 | |
| Total | (5,704) | (5,802) | (11,034) | (11,291) | |
1 Including one-off effect from pension revaluation. Please refer to note 4 for further details.
| € mn | ||||
|---|---|---|---|---|
| three months ended 30 June |
six months ended 30 June |
|||
| 2014 | 2013 | 2014 | 2013 | |
| Property-Casualty | ||||
| Fees from credit and assistance business |
(198) | (193) | (401) | (372) |
| Service agreements | (81) | (79) | (169) | (175) |
| Investment advisory | – | (1) | – | (1) |
| Subtotal | (279) | (273) | (570) | (548) |
| Life/Health | ||||
| Service agreements | (11) | (15) | (22) | (27) |
| Investment advisory | (82) | (59) | (158) | (103) |
| Subtotal | (93) | (74) | (180) | (130) |
| Asset Management | ||||
| Commissions | (313) | (349) | (620) | (725) |
| Other | (58) | (21) | (96) | (34) |
| Subtotal | (371) | (370) | (716) | (759) |
| Corporate and Other | ||||
| Service agreements | (79) | (57) | (149) | (109) |
| Investment advisory and banking activities |
(80) | (74) | (144) | (134) |
| Subtotal | (159) | (131) | (293) | (243) |
| Consolidation | 71 | 60 | 146 | 114 |
| Total | (831) | (788) | (1,613) | (1,566) |
| € mn | three months ended 30 June |
six months ended 30 June |
||
|---|---|---|---|---|
| 2014 | 2013 | 2014 | 2013 | |
| Realized losses from disposals of real estate held for own use |
(3) | (1) | (7) | (1) |
| Expenses from alternative investments |
(23) | (23) | (48) | (44) |
| Other | – | 16 | (1) | (9) |
| Total | (26) | (8) | (56) | (54) |
Income taxes
| € mn | three months ended 30 June |
six months ended 30 June |
|||
|---|---|---|---|---|---|
| 2014 | 2013 | 2014 | 2013 | ||
| Current income taxes | (803) | (678) | (1,791) | (1,468) | |
| Deferred income taxes | (71) | (146) | 50 | (233) | |
| Total | (874) | (824) | (1,741) | (1,701) |
For the three and the six months ended 30 June 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 June |
six months ended 30 June |
||||
| 2014 | 2013 | 2014 | 2013 | ||
| Items that may be reclassified to profit or loss in future periods |
|||||
| Foreign currency translation adjustments |
12 | 12 | 13 | 23 | |
| Available-for-sale investments | (896) | 1,187 | (1,816) | 1,432 | |
| Cash flow hedges | (17) | 8 | (19) | 7 | |
| Share of other comprehensive income of associates |
(1) | 4 | (2) | 4 | |
| Miscellaneous | 3 | 29 | (27) | 132 | |
| Items that may never be reclassified to profit or loss |
|||||
| Actuarial gains (losses) on defined benefit plans |
137 | (13) | 296 | 1 | |
| Total | (762) | 1,227 | (1,555) | 1,599 | |
51 Consolidated Statements of Cash Flows 53 Notes
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 June 2014 | as of 31 December 2013 | |||
|---|---|---|---|---|
| Carrying amount | Fair value | Carrying amount | Fair value | |
| Financial assets | ||||
| Cash and cash equivalents | 12,704 | 12,704 | 11,207 | 11,207 |
| Financial assets held for trading | 1,968 | 1,968 | 2,512 | 2,512 |
| Financial assets designated at fair value through income | 4,274 | 4,274 | 4,149 | 4,149 |
| Available-for-sale investments | 429,237 | 429,237 | 392,233 | 392,233 |
| Held-to-maturity investments | 4,020 | 4,619 | 4,140 | 4,647 |
| Investments in associates and joint ventures | 3,177 | 3,746 | 3,098 | 3,597 |
| Real estate held for investment | 10,943 | 15,792 | 10,783 | 15,625 |
| Loans and advances to banks and customers | 114,370 | 132,038 | 116,800 | 129,528 |
| Financial assets for unit-linked contracts | 86,895 | 86,895 | 81,064 | 81,064 |
| Derivative financial instruments and firm commitments included in other assets | 239 | 239 | 75 | 75 |
| Real estate held for own use | 2,374 | 3,563 | 2,423 | 3,626 |
| Financial liabilities | ||||
| Financial liabilities held for trading | 6,351 | 6,351 | 6,013 | 6,013 |
| Liabilities to banks and customers | 22,650 | 22,973 | 23,109 | 23,282 |
| Financial liabilities for unit-linked contracts | 86,895 | 86,895 | 81,064 | 81,064 |
| Derivative financial instruments and firm commitments included in other liabilities | 197 | 197 | 158 | 158 |
| Financial liabilities for puttable equity instruments | 2,578 | 2,578 | 2,613 | 2,613 |
| Certificated liabilities | 8,090 | 8,869 | 8,030 | 8,576 |
| Subordinated liabilities | 10,475 | 11,552 | 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.
If the fair value cannot be measured reliably, amortized cost is used as a proxy for determining fair values. As of 30 June 2014, fair values could not be reliably measured for equity investments with carrying amounts totaling € 213 mn (31 December 2013: € 214 mn). These investments are primarily investments in privately held corporations and partnerships.
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 on the last exchange trading day prior to or at the balance sheet date, if the latter is a trading day.
At the end of 2013, the Institute of Public Auditors in Germany (IDW) published an interpretation of IFRS 13 (IDW RS HFA 47). For prices provided by third parties, HFA 47 states that composite prices generally have to be classified in level 2 of the fair value hierarchy and only single (unadjusted) quotes could qualify for level 1. As the Allianz Group uses prices provided by service agencies on a consensus level, beginning 4Q 2013 the Allianz Group shifted most fixed-income securities from level 1 to level 2 due to this new interpretation. However, the interpretation is still subject to discussion and, depending on the final outcome, re-transfers are possible in subsequent reporting periods.
Furthermore, 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:
47 Consolidated Balance Sheets
48 Consolidated Income Statements
Comprehensive Income
49 Consolidated Statements of
51 Consolidated Statements of Cash Flows 53 Notes
The following tables present the fair value hierarchy for financial instruments carried at fair value in the consolidated balance sheets as of 30 June 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 | 102 | 293 | – | 395 |
| Equity securities | 34 | 109 | 15 | 158 |
| Derivative financial instruments | 214 | 1,172 | 29 | 1,415 |
| Subtotal | 350 | 1,574 | 44 | 1,968 |
| Financial assets designated at fair value through income | ||||
| Debt securities | 1,004 | 1,348 | 1 | 2,353 |
| Equity securities | 1,811 | – | 110 | 1,921 |
| Subtotal | 2,815 | 1,348 | 111 | 4,274 |
| Subtotal | 3,165 | 2,922 | 155 | 6,242 |
| Available-for-sale investments | ||||
| Government and agency mortgage-backed securities (residential and commercial) | 39 | 3,130 | – | 3,169 |
| Corporate mortgage-backed securities (residential and commercial) | – | 12,456 | 32 | 12,488 |
| Other asset-backed securities | 197 | 3,483 | 206 | 3,886 |
| Government and government agency bonds | 27,446 | 149,403 | 67 | 176,916 |
| Corporate bonds | 15,765 | 175,657 | 3,738 | 195,160 |
| Other debt securities | 243 | 1,592 | 648 | 2,483 |
| Equity securities | 28,260 | 772 | 6,103 | 35,135 |
| Subtotal | 71,950 | 346,493 | 10,794 | 429,237 |
| Financial assets for unit-linked contracts | 84,268 | 2,450 | 177 | 86,895 |
| Derivative financial instruments and firm commitments included in other assets | 63 | 176 | – | 239 |
| Total | 159,446 | 352,041 | 11,126 | 522,613 |
| Financial liabilities | ||||
| Financial liabilities held for trading | ||||
| Derivative financial instruments | 48 | 1,198 | 5,102 | 6,348 |
| Other trading liabilities | – | 3 | – | 3 |
| Subtotal | 48 | 1,201 | 5,102 | 6,351 |
| Financial liabilities for unit-linked contracts | 84,268 | 2,450 | 177 | 86,895 |
| Derivative financial instruments and firm commitments included in other liabilities | – | 197 | – | 197 |
| Financial liabilities for puttable equity instruments | 2,386 | 192 | – | 2,578 |
| Total | 86,702 | 4,040 | 5,279 | 96,021 |
€ 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 | 2,279 |
| Equity securities | 1,867 | – | 3 | 1,870 |
| Subtotal | 1,867 | 2,278 | 4 | 4,149 |
| Subtotal | 2,173 | 4,432 | 56 | 6,661 |
| 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 | 32,500 |
| 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 | – | 2,613 |
| Total | 80,961 | 4,281 | 4,606 | 89,848 |
Comprehensive Income
The Allianz Group follows the interpretation of IFRS 13 (IDW RS HFA 47) by the Institute of Public Auditors in Germany (IDW) and classifies composite prices in level 2 of the fair value hierarchy. As the Allianz Group uses prices provided by pricing agencies on a consensus level, beginning 4Q 2013 the Allianz Group shifted most fixed-income securities from level 1 to level 2 due to this new interpretation.
Furthermore, the Allianz Group uses valuation techniques 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.
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 newly acquired 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.
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. For level 3, equity securities mainly represent private equity funds. The fair value is in most cases derived from the net asset value based on the valuation of the underlying private equity companies as provided by thirdparty vendors.
In general, financial assets and liabilities are transferred from level 1 to level 2 when liquidity, trade frequency and activity are no longer indicative of an active market. Conversely, the same policy applies for transfers from level 2 to level 1.
At the end of 2013, the Allianz Group followed an interpretation of IFRS 13 (IDW RS HFA 47) by the Institute of Public Auditors in Germany (IDW) and transferred most fixed-income securities from level 1 to level 2. Re-transfers in subsequent reporting periods are possible given that the interpretation is still under discussion.
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 (€ 5.2 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.
Comprehensive Income
50 Consolidated Statements of Changes in Equity
51 Consolidated Statements of Cash Flows 53 Notes
Corporate bonds within available-for-sale investments classified as level 3 are mainly priced based on the income approach (€ 3.3 bn). The primary non-market observable input used in the discounted cash flow method is an option adju sted 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 only has 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 (€ 5.0 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 only has an immaterial impact on fair value.
The following table shows the quantitative description of valuation technique(s) and input(s) used for the level 3 portfolios described above.
| € mn | ||
|---|---|---|
| Non-market observable input(s) |
Fair value as of | Description |
| Available-for-sale investments | ||
| n/a | Equity securities | |
| Option adjusted spread | Corporate bonds | |
| Financial liabilities held for trading | ||
| 4,998 | Derivative financial instruments | |
| Annuitizations | Fixed-indexed annuities | |
| Surrenders | ||
| Mortality | ||
| Withdrawal benefit election | ||
| Volatility | ||
| Surrenders | Variable annuities | |
| Mortality | ||
| 30 June 2014 Valuation technique(s) 5,002 Net asset value 3,267 Discounted cash flow method 4,447 Present value of insurance cash flow 551 Deterministic discounted cash flow |
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 | 5 | – | (55) |
| Subtotal | 52 | 5 | – | (55) |
| 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 | – | – | (2) |
| Other asset-backed securities | 212 | – | – | (25) |
| Government and government agency bonds | 56 | 22 | – | (13) |
| Corporate bonds | 3,149 | 436 | 31 | (65) |
| Other debt securities | 773 | 59 | – | (62) |
| Equity securities | 5,722 | 469 | – | (399) |
| Subtotal | 9,945 | 986 | 31 | (566) |
| Financial assets for unit-linked contracts | 179 | 27 | – | (29) |
| Total financial assets at fair value | 10,180 | 1,128 | 31 | (650) |
€ 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 | 617 | – | (254) |
| Financial liabilities for unit-linked contracts | 179 | 27 | – | (29) |
| Financial liabilities for puttable equity instruments | – | – | – | – |
| Total financial liabilities at fair value | 4,606 | 644 | – | (283) |
| B | Condensed Consolidated Interim Financial Statements | |||
|---|---|---|---|---|
| 47 Consolidated Balance Sheets | 49 Consolidated Statements of | 50 Consolidated Statements of Changes | 51 Consolidated Statements of Cash Flows | |
| 48 Consolidated Income Statements | Comprehensive Income | in Equity | 53 Notes |
| Net gains (losses) recognized in consolidated income statement comprehensive income |
Net gains (losses) recognized in other |
Impairments | Foreign currency translation adjustments |
Changes in the consolidated subsidiaries of the Allianz Group |
Carrying value (fair value) as of 30 June 2014 |
Net gains (losses) in profit or loss attributable to a change in unrealized gains or losses for financial assets held at the reporting date |
|---|---|---|---|---|---|---|
| – | – | – | – | – | – | – |
| 1 | – | – | – | – | 15 | – |
| 41 | – | – | – | – | 29 | – |
| 42 | – | – | – | – | 44 | – |
| – | – | – | – | – | 1 | – |
| – | – | – | – | (3) | 110 | – |
| – | – | – | – | (3) | 111 | – |
| 1 | – | – | – | – | 32 | – |
| 3 | 15 | – | 1 | – | 206 | – |
| – | 2 | – | – | – | 67 | – |
| 2 | 166 | – | 19 | – | 3,738 | – |
| – | (44) | (7) | 1 | (72) | 648 | – |
| – | 282 | (56) | 2 | 83 | 6,103 | – |
| 6 | 421 | (63) | 23 | 11 | 10,794 | – |
| – | – | – | – | – | 177 | – |
| 48 | 421 | (63) | 23 | 8 | 11,126 | – |
| 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 June 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 |
|---|---|---|---|---|---|---|
| 5,102 | – | 29 | – | – | 283 | |
| 177 | – | – | – | – | – | |
| – | – | – | – | – | – | |
| 5,279 | – | 29 | – | – | 283 |
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 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 June 2014, the carrying amount and fair value of the CDOs was € 165 MN and € 158 MN, respectively. For the three months ended 30 June 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 June |
six months ended 30 June |
||
|---|---|---|---|---|
| 2014 | 2013 | 2014 | 2013 | |
| Net income attributable to shareholders used to calculate basic earnings per share | 1,755 | 1,588 | 3,395 | 3,295 |
| Weighted average number of common shares outstanding | 453,761,276 | 453,196,657 | 453,750,731 | 453,186,268 |
| Basic earnings per share (€) | 3.87 | 3.50 | 7.48 | 7.27 |
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.
| B | Condensed Consolidated Interim Financial Statements | |||
|---|---|---|---|---|
| 47 Consolidated Balance Sheets | 49 Consolidated Statements of | 50 Consolidated Statements of Changes | 51 Consolidated Statements of Cash Flows | |
| 48 Consolidated Income Statements | Comprehensive Income | in Equity | 53 Notes |
€ mn
| three months ended 30 June |
30 June | ||
|---|---|---|---|
| 2014 | 2013 | 2014 | 2013 |
| 1,755 | 1,588 | 3,395 | 3,295 |
| (10) | (17) | (11) | (36) |
| 1,745 | 1,571 | 3,384 | 3,259 |
| 453,761,276 | 453,196,657 | 453,750,731 | 453,186,268 |
| 715,550 | 57,240 | 3,006,849 | 479,639 |
| 454,476,826 | 453,253,897 | 456,757,580 | 453,665,907 |
| 3.84 | 7.18 | ||
| six months ended 3.47 7.41 |
For the six months ended 30 June 2014, the weighted average number of common shares excludes 2,749,269 (2013: 2,763,732) treasury shares.
number of employees
| as of 30 June 2014 |
as of 31 December 2013 |
|---|---|
| 40,066 | 40,537 |
| 107,371 | 107,090 |
| 147,437 | 147,627 |
As of 30 June 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 June 2014, commitments outstanding to invest in private equity funds and similar financial instruments amounted to € 3,223 mn (31 December 2013: € 2,978 mn) and commitments outstanding to invest in real estate and infrastructure amounted to € 1,093 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 € 706 mn as of 30 June 2014. All other commitments showed no significant changes.
For further information please refer to note 3 – Consolidation.
Munich, 7 August 2014
Allianz SE The Board of Management
To the best of our knowledge, and in accordance with the applicable reporting principles for interim financial reporting, the condensed consolidated interim financial statements, which are prepared in accordance with generally accepted accounting principles, give a true and fair view of the assets, liabilities, financial position and profit or loss of the group, and the interim group management report includes a fair review of the development and performance of the business and the position of the Group, together with a description of the principal opportunities and risks associated with the expected development of the Group.
Munich, 7 August 2014
Allianz SE The Board of Management
49 Consolidated Statements of Comprehensive Income
50 Consolidated Statements of Changes in Equity
51 Consolidated Statements of Cash Flows 53 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 June 2014 that are part of the semi annual financial report according to §37w WpHG ["Wertpapierhandelsgesetz": "German Securities Trading Act"]. The preparation of the condensed consolidated interim financial statements in accordance with those International Financial Reporting Standards (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, 7 August 2014
KPMG AG Wirtschaftsprüfungsgesellschaft
Wirtschaftsprüfer Wirtschaftsprüfer
Klaus Becker Dr. Frank Pfaffenzeller (Independent Auditor) (Independent Auditor)
| Important dates for shareholders and analysts1 | |
|---|---|
| ____ | 7 |
| Interim Report/Financial Results 3Q | November 2014 |
| __________ | 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 |
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 – Koeniginstrasse 28 – 80802 Munich – Germany – Telephone +49.89.3800-0 – [email protected] –
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