Annual Report • Nov 21, 2013
Annual Report
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| three months ended 30 September | nine months ended 30 September | ||||||||
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| 2013 | 2012 | Change from previous year |
2013 | 2012 | Change from previous year |
More details on page |
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| Income statement | |||||||||
| Total revenues1 | €mn | 25,144 | 25,207 | (0.2)% | 83,968 | 80,456 | 4.4% | 7 | |
| Operating profit2, 3, 4 |
€mn | 2,519 | 2,538 | (0.7)% | 7,683 | 7,121 | 7.9% | 7 | |
| Net income2 | €mn | 1,531 | 1,453 | 5.4% | 5,007 | 4,242 | 18.0% | 9 | |
| thereof: attributable to shareholders2 | €mn | 1,445 | 1,359 | 6.3% | 4,740 | 3,988 | 18.9% | 9 | |
| Business segments5 | |||||||||
| Property-Casualty | |||||||||
| Gross premiums written | €mn | 10,651 | 11,392 | (6.5)% | 36,602 | 36,915 | (0.8)% | 14 | |
| Operating profit4 | €mn | 1,236 | 1,162 | 6.4% | 3,734 | 3,395 | 10.0% | 16 | |
| Combined ratio | % | 94.8 | 96.2 | (1.4)%-p | 95.0 | 96.5 | (1.5)%-p | 16 | |
| Life/Health | |||||||||
| Statutory premiums | €mn | 12,697 | 11,912 | 6.6% | 41,659 | 38,472 | 8.3% | 25 | |
| Operating profit4 | €mn | 769 | 815 | (5.6)% | 2,293 | 2,458 | (6.7)% | 26 | |
| Margin on reserves | bps | 66 | 73 | (7) | 66 | 75 | (9) | 24 | |
| Asset Management | |||||||||
| Operating revenues | €mn | 1,703 | 1,845 | (7.7)% | 5,429 | 4,781 | 13.6% | 32 | |
| Operating profit4 | €mn | 754 | 848 | (11.1)% | 2,458 | 2,036 | 20.7% | 33 | |
| Cost-income ratio | % | 55.7 | 54.0 | 1.7%-p | 54.7 | 57.4 | (2.7)%-p | 33 | |
| Corporate and Other | |||||||||
| Total revenues | €mn | 132 | 142 | (7.0)% | 412 | 438 | (5.9)% | – | |
| Operating result4 | €mn | (230) | (261) | 11.9% | (743) | (715) | (3.9)% | 35 | |
| 6 Balance sheet2, |
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| Total assets | €mn | 704,619 | 694,447 | 1.5% | 704,619 | 694,447 | 1.5% | 40 | |
| Shareholders' equity | €mn | 48,770 | 50,388 | (3.2)% | 48,770 | 50,388 | (3.2)% | 39 | |
| Non-controlling interests | €mn | 2,680 | 2,575 | 4.1% | 2,680 | 2,575 | 4.1% | 39 | |
| Share information | |||||||||
| Basic earnings per share2 | € | 3.19 | 3.00 | 6.3% | 10.46 | 8.81 | 18.7% | 120 | |
| Diluted earnings per share2 | € | 3.14 | 2.98 | 5.4% | 10.33 | 8.77 | 17.8% | 120 | |
| Share price as of 30 September6 | € | 116.20 | 104.80 | 10.9% | 116.20 | 104.80 | 10.9% | 1 | |
| Market capitalization6 | €mn | 52,981 | 47,784 | 10.9% | 52,981 | 47,784 | 10.9% | – | |
| Other data | |||||||||
| Standard&Poor's rating7 | AA Stable Outlook |
AA Negative Outlook |
– | AA Stable Outlook |
AA Negative Outlook |
– | – | ||
| Conglomerate solvency ratio6, 8 |
% | 177 | 197 | (20.0)%-p | 177 | 197 | (20.0)%-p | 39 | |
| Total assets under management6 | € Bn | 1,811 | 1,852 | (2.2)% | 1,811 | 1,852 | (2.2)% | 31 | |
| thereof: Third-party assets under management6 |
€ Bn | 1,404 | 1,438 | (2.4)% | 1,404 | 1,438 | (2.4)% | 31 | |
1 Total revenues comprise statutory gross premiums written in Property-Casualty and Life/ Health, operating revenues in Asset Management and total revenues in Corporate and Other (Banking).
5 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. 6 2012 figures as of 31 December 2012.
2 All prior period figures herein and throughout the entire Interim Report Third Quarter and First Nine Months of 2013 have been restated to reflect the retrospective application of the amended standard IAS 19 – Employee Benefits, effective as of 1 January 2013. For further information, please refer to note 2 to the condensed consolidated interim financial statements.
3 As of the first quarter of 2013, all restructuring charges are presented within operating profit. All prior period figures herein and throughout the entire Interim Report Third Quarter and First
Nine Months of 2013 have been adjusted to conform to the current accounting presentation. 4 The Allianz Group uses operating profit as a key financial indicator to assess the performance of its business segments and the Group as a whole.
7 Insurer financial strength rating; outlook changed on 20 March 2013 and was affirmed on 12 July 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 September 2013 would be 168% (31 December 2012: 188%). The conglomerate solvency ratio decreased by approximately 16 percentage points as of 1 January 2013 due to amendments to IAS 19.
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| Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 |
Allianz Share price:
9M 2013 High: €121.80 31 December 2012: €104.80 9M 2013 Low: €101.75 30 September 2013: €116.20
| Basic Share Information | 03 | |
|---|---|---|
| Security codes | WKN 840 400 | |
| ISIN DE 000 840 400 5 |
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| Bloomberg | ALV GR | |
| Reuters | 0#ALVG.DEU |
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Pages 3–50
39 Balance Sheet Review
48 Reconciliations
Third quarter 2013
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, Life/Health insurance, Asset Management and Corporate and Other activities.
Total revenues were stable at €25.1 bn. Life/Health recorded revenue growth, while revenues in our Property-Casualty and Asset Management business segments decreased. On an internal basis2 revenues grew by 1.0%.
Operating profit remained strong at €2,519 mn. Lower operating profit in Life/Health and Asset Management was essentially offset by a higher operating result in Property-Casualty.
Net income increased 5.4% to €1,531 mn reflecting an improved non-operating result and a slightly decreased effective tax rate.
Our solvency ratio decreased by 20 percentage points to 177%1 compared to year-end 2012. Excluding the negative impact of a change in the accounting for pensions, our solvency ratio would have decreased by 4 percentage points over the year-end figure.
| A 02 | ||
|---|---|---|
| 2013 | 2012 | 2011 |
| 25,144 | 25,207 | 24,070 |
| 2,519 | 2,538 | 1,912 |
| 1,531 | 1,453 | 275 |
| 177% | 197% | 179% |
3 Previous period figures have been restated to reflect the retrospective application of the amended standard IAS 19 – Employee Benefits, effective as of 1 January 2013. For further information, please refer to note 2 to the condensed consolidated interim financial statements.
4 As of the first quarter of 2013, all restructuring charges are presented within operating profit and all previous periods have been adjusted to conform to the current accounting presentation.
5 2012 and 2011 solvency figures as of 31 December 2012 and 2011, respectively.
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 September 2013 would be 168% (31 December 2012: 188%, 31 December 2011: 170%). The conglomerate solvency ratio decreased by approximately 16 percentage points as of 1 January 2013 due to amendments to IAS 19.
2 Internal total revenue growth excludes the effects of foreign currency translation as well as acquisitions and disposals. Please refer to page 49 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.
During the third quarter of 2013, fixed income and currency markets remained volatile. This was mainly fueled by discussions in the United States about a reduction of quantitative easing, uncertainty with regards to the succession of the Federal Reserve chairman and – towards the end of the quarter – the debt ceiling debate, including a government shutdown. In mid-September, the Federal Reserve took the decision not to taper asset purchases immediately as long as financial conditions in the United States are not strong enough to wind down the measures. Although closing at a higher level than in the second quarter of 2013, yields on U.S. and German government bonds retreated somewhat from their peaks reached during the quarter. The fiscal gridlock in the United States was temporarily defused in mid-October with a last-minute solution that averted a potential disaster for the financial markets.
Supported by more benign economic conditions, the Eurozone emerged from recession. Spreads on government bonds from the Eurozone periphery continued to narrow. Emerging markets, which were adversely impacted during the liquidity squeeze as a result of the potential Federal Reserve tapering, rebounded slightly in the third quarter. Equity markets saw a sharp rally globally, with U.S. and German equity markets hitting new all-time highs in September.
The levels of key yields at the end of the third quarter were still remarkably low in historical terms and the low interest rate environment continued to present its challenges. Currencies in selective emerging markets recovered somewhat in September following sharp declines in the early phase of the quarter, while the depreciation of the U.S. Dollar and Australian Dollar against the Euro continued throughout the third quarter.
Contrasting with the relatively benign third quarter of 2012, and after a tumultuous second quarter of 2013, the third quarter saw continued impact from natural catastrophes, where Europe in particular was struck by severe thunderstorms.
We recorded stable total revenues of €25,144 mn. A continued strong unit-linked premium growth in our Life/Health business substantially compensated for the drop in gross premiums written related to the U.S. crop business in Property-Casualty and the decrease in performance fees in Asset Management. On an internal basis, revenues increased by 1.0%.
Our operating profit remained strong at €2,519 mn. Property-Casualty contributed positively, benefiting from a resilient underwriting result. Asset Management was impacted by decreased performance fees, which reached an exceptionally high level in the third quarter of 2012. Our Life/Health operating profit was adversely impacted by market volatility on our investment result. The loss in our Corporate and Other business segment was reduced, mainly driven by Holding&Treasury.
Net income increased 5.4% to €1,531 mn, driven by an improved non-operating result and a slightly lower effective tax rate.
Shareholders' equity amounted to €48,770 mn as of 30 September 2013, a decrease of €1,618 mn compared to 31 December 2012 (as restated). This was mainly driven by lower unrealized gains on debt securities. The conglomerate solvency ratio was down 20 percentage points to 177%, mainly due to the retrospective application of the amendments to IAS 19.1 Excluding this impact, our solvency ratio would have decreased by 4 percentage points over the year-end figure.
1 In contrast to the reported IFRS figures, the conglomerate solvency figures have not been restated for the previous reporting year(s). For further details on the amendments to IAS 19, please refer to note 2 to the condensed consolidated interim financial statements.
A Interim Group Management Report
1 Total revenues include €(39) mn, €(84) mn and €(23) mn from consolidation for 3Q 2013, 2012 and 2011, respectively.
Property-Casualty gross premiums written were down by 6.5% to €10.7 bn. On an internal basis, gross premiums written decreased by 5.2%, reflecting the expected reduction in our U.S. crop business. Excluding this, our internal growth was 3.0%. We experienced positive development mainly at AGCS, in Central and Eastern Europe, Latin America and Turkey.
Life/Health statutory premiums increased to €12.7 bn, up by 7.3% on an internal basis. The growth in premiums in Germany and Italy more than offset the drop in premiums in South Korea and Belgium/Luxembourg.
Asset Management operating revenues decreased 7.7% to €1,703 mn. This was mainly because of the exceptionally high level of performance fees in the third quarter of 2012 and unfavorable foreign currency effects. Our net fee and commission income excluding performance fees rose by €118 mn. This was due to higher margins, despite the unfavorable currency effects. Volatile capital markets contributed to third-party net outflows of €27 bn in the third quarter of 2013.
We generated total revenues of €83,968 mn, an increase of 4.4% compared to the first nine months of 2012. On an internal basis, revenues grew by 4.7%. We recorded remarkable growth of unit-linked premiums in our Life/Health business and higher operating revenues due to improved margins and higher average assets under management in Asset Management. This positive development was partly offset as gross premiums written in our Property-Casualty business segment declined due to the reduction in our U.S. crop business.
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).
Our Property-Casualty business recorded an operating profit of €1,236 mn, a growth of 6.4%. The underwriting result increased by €150 mn to €501 mn largely driven by the improvement in our underlying claims development and a more favorable run-off. The combined ratio improved from 96.2% to 94.8% due to a better accident year loss ratio excluding natural catastrophes, primarily in the United States and Italy. Reflective of the low interest rate environment, our investment income decreased by €76 mn to €719 mn.
Our Life/Health operating profit was solid at €769 mn. Compared to the third quarter of 2012, however, it decreased by €46 mn. This was primarily due to a less favorable investment result, largely driven by the net of hedging and foreign currency related losses, mainly in Germany.
Asset Management recorded an operating profit of €754 mn, a drop of €94 mn, or 11.1% (internal growth: (6.5)%). This was mainly due to exceptionally high performance fees in the third quarter of 2012. As a result, our cost-income ratio increased by 1.7 percentage points to 55.7%.
Our Corporate and Other operating result improved by €31 mn to a loss of €230 mn. Although all three reportable segments within Corporate&Other contributed to this improvement, Holding&Treasury was the main driver.
Operating profit increased by €562 mn to €7,683 mn supported by strong growth in our Asset Management and Property-Casualty business. Our Life/Health business remained strong, but was impacted by the continued market volatility and low interest rate levels.
Our non-operating result improved by €94 mn to €(242) mn, mainly due to lower amortization of intangible assets and lower acquisition-related expenses. Our non-operating investment result declined by €41 mn to a loss of €2 mn, largely as a result of higher impairments, which were partly offset by higher realizations.
Non-operating income from financial assets and liabilities carried at fair value through income (net) improved by €12 mn due to various offsetting effects from derivatives and hedging related activities.
Non-operating realized gains and losses (net) went up by €27 mn to €134 mn mainly due to higher realizations on debt securities, which were partly offset by lower realizations on equities.
Non-operating impairments of investments (net) increased by €80 mn to €(136) mn. This development was largely driven by higher impairments on real estate investments, mainly coming from our Property-Casualty business segment and partly compensated by lower impairments on debt securities.
Non-operating interest expenses from external debt declined by €27 mn to €206 mn. Due to the lower interest rate environment, bonds issued since the third quarter of 2012 have a lower yield than those subsequently matured or redeemed.
Non-operating acquisition-related expenses improved by €41 mn to €(1) mn, primarily due to lower PIMCO B-unit expenses.
Non-operating amortization of intangible assets were down by €62 mn to €29 mn mainly due to goodwill impairments in the third quarter of 2012.
Our non-operating result improved from a loss of €575 mn to a loss of €229 mn. This was mainly driven by our nonoperating investment result – which benefited from higher realizations on debt securities and lower impairments on equity investments in the first nine months of 2013 compared to the first nine months of 2012 – as well as by lower non-operating interest expenses from external debt due to lower yields.
Income tax expenses decreased by €3 mn to €746 mn despite higher income before income taxes in 2013. The effective tax rate improved by 1.2 percentage points to 32.8% (3Q 2012: 34.0%) which was primarily driven by a lower tax charge from prior year taxes in 2013 compared to 2012.
Income taxes went up by €143 mn to €2,447 mn in the first nine months of 2013 primarily from higher income before income taxes. The effective tax rate improved by 2.4 percentage points to 32.8% (9M 2012: 35.2%) due to a lower tax charge from prior year taxes as well as lower non-deductible impairments in 2013 compared to 2012.
Our net income rose by €78 mn to €1,531 mn resulting from an improved non-operating result and a lower effective tax rate. Net income attributable to shareholders and non-controlling interests amounted to €1,445 mn(3Q 2012: €1,359 mn) and €86 mn (3Q 2012: €94 mn), respectively. Our largest noncontrolling interests in net income are Euler Hermes and PIMCO.
Driven by our strong operational performance, an improved non-operating investment result, as well as a lower effective tax rate, our net income increased by €765 mn to €5,007 mn. Net income attributable to shareholders and noncontrolling interests amounted to €4,740 mn (9M 2012: €3,988 mn) and €267 mn (9M 2012: €254 mn), respectively.
| € mn | ||||
|---|---|---|---|---|
| three months ended 30 September | nine months ended 30 September | |||
| 2013 | 2012 | 2013 | 2012 | |
| Total revenues1 | 25,144 | 25,207 | 83,968 | 80,456 |
| Premiums earned (net) | 16,637 | 16,394 | 49,600 | 48,636 |
| Operating investment result | ||||
| Interest and similar income | 5,129 | 5,214 | 15,708 | 15,834 |
| Operating income from financial assets and liabilities carried at fair value through income (net) |
(562) | (127) | (1,490) | (473) |
| Operating realized gains/losses (net) | 556 | 628 | 2,168 | 2,445 |
| Interest expenses, excluding interest expenses from external debt | (94) | (122) | (306) | (362) |
| Operating impairments of investments (net) | (26) | (45) | (207) | (325) |
| Investment expenses | (228) | (230) | (653) | (643) |
| Subtotal | 4,775 | 5,318 | 15,220 | 16,476 |
| Fee and commission income | 2,584 | 2,629 | 8,017 | 7,059 |
| Other income | 42 | 49 | 144 | 158 |
| Claims and insurance benefits incurred (net) | (11,874) | (12,031) | (35,484) | (35,711) |
| Change in reserves for insurance and investment contracts (net)2 | (3,247) | (3,514) | (10,417) | (10,872) |
| Loan loss provisions | (18) | (13) | (47) | (101) |
| Acquisition and administrative expenses (net), excluding | ||||
| acquisition-related expenses | (5,580) | (5,532) | (16,830) | (16,211) |
| Fee and commission expenses | (788) | (729) | (2,354) | (2,099) |
| Restructuring charges | 16 | (13) | (84) | (160) |
| Other expenses | (28) | (25) | (82) | (69) |
| Reclassification of tax benefits | – | 5 | – | 15 |
| Operating profit | 2,519 | 2,538 | 7,683 | 7,121 |
| Non-operating investment result | ||||
| Non-operating income from financial assets and liabilities carried at fair value through income (net) |
– | (12) | 3 | 244 |
| Non-operating realized gains/losses (net) | 134 | 107 | 859 | 593 |
| Non-operating impairments of investments (net) | (136) | (56) | (271) | (386) |
| Subtotal | (2) | 39 | 591 | 451 |
| Income from fully consolidated private equity investments (net) | (4) | (4) | (12) | (57) |
| Interest expenses from external debt | (206) | (233) | (680) | (743) |
| Acquisition-related expenses | (1) | (42) | (42) | (64) |
| Amortization of intangible assets | (29) | (91) | (86) | (147) |
| Reclassification of tax benefits | – | (5) | – | (15) |
| Non-operating items | (242) | (336) | (229) | (575) |
| Income before income taxes | 2,277 | 2,202 | 7,454 | 6,546 |
| Income taxes | (746) | (749) | (2,447) | (2,304) |
| Net income | 1,531 | 1,453 | 5,007 | 4,242 |
| Net income attributable to: | ||||
| Non-controlling interests | 86 | 94 | 267 | 254 |
| Shareholders | 1,445 | 1,359 | 4,740 | 3,988 |
| Basic earnings per share in € | 3.19 | 3.00 | 10.46 | 8.81 |
| Diluted earnings per share in € | 3.14 | 2.98 | 10.33 | 8.77 |
1 Total revenues comprise statutory gross premiums written in Property-Casualty and in Life/ Health, operating revenues in Asset Management and total revenues in Corporate and Other (Banking).
2 For the three months ended 30 September 2013 expenses for premium refunds (net) in Property-Casualty of €(48) MN (3Q 2012: €(52) MN) are included. For the nine months ended 30 September 2013, expenses for premium refunds (net) in Property-Casualty of €(148) MN (9M 2012: €(103) 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 Report in our Annual Report 2012. 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 exposure profile described in the latest Risk Report remains largely unchanged. However, the Allianz Group continues to be exposed to two external forces that adversely affect our risk profile and would not normally be associated with our core operating activities: the market impact of the European sovereign debt crisis and the fiscal gridlock in the United States as well as regulatory developments – especially the European solvency directive, Solvency II.
The Eurozone has emerged from recession and financial conditions continued to improve further during the third quarter of 2013 – developments which are reflected in the declining risk premiums for certain Eurozone sovereigns. Policymakers have made progress towards the creation of a European banking union, which should improve the sector's resilience over the medium-term and reduce the existing negative feedback loop with sovereigns. Despite these positive signs, the fragile Eurozone recovery remains exposed to a number of risks, including ongoing fragmentation of financial markets, weak economic fundamentals and political uncertainty in some countries. This could lead to sustained low interest rates as a matter of policy and episodes of market volatility.
An additional complication with global implications emerged in October, driven by developments in the United States. Bipartisan conflict created the possibility that the U.S. debt ceiling would not be raised in time to meet payment obligations, prompting a temporary closure of nonessential U.S. government services and the specter of a U.S. default in a worst case scenario. Although a last-minute agreement was ultimately reached, a longer term solution to the underlying issues remains open. This could also lead to a scenario that is characterized by sustained low interest rates and periodic episodes of increased market volatility. The global low interest rate environment and market volatility will continue to negatively impact Allianz's risk profile through our business development, asset values and the value of our liabilities.
Our robust action plan to deal with these developments has bolstered our financial and operational resilience to strong shock scenarios and continuous scenario analysis and monitoring remain a priority to ensure the effectiveness of our contingency measures.
In July, the Financial Stability Board designated Allianz as one of nine G-SII firms (Global Systemically Important Insurers). Although details of future regulatory requirements – especially Solvency II and those applying to G-SIIs – are becoming clearer, the final rules are still evolving. As well as leading to delays in the introduction of the Solvency II framework, the lack of final rules for both regulations creates uncertainties for our business and for Allianz Group's ultimate capital requirements.
In addition, due to the market value balance sheet approach, the Solvency II regime is expected to lead to higher volatility in regulatory capital requirements compared to Solvency I, specifically with regard to long-term asset accumulation and savings products in the life insurance segment. Therefore, it is likely that product design, investment strategies and hedging programs will need to be adapted throughout the industry to mitigate this volatility.
For information on the 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 2012.
The Allianz Group's strategy is described in the Our Strategy chapter in our Annual Report 2012.There have been no material changes to our Group strategy since.
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 2012. Information on our brand can also be found in the Our Progress in Sustainable Development chapter in our Annual Report 2012.
Third quarter 2013
Operating profit +6.4 %
Our Property-Casualty business offers a wide range of products and services for both private and corporate clients. Our offerings cover many insurance classes such as accident/disability, property, general liability and motor. 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.
Gross premiums written amounted to €10.7 BN, down 6.5%. On an internal basis1, gross premiums written decreased by 5.2%, reflecting the expected reduction in our U.S. crop business. Excluding this reduction, our internal growth was 3.0%. We experienced positive development mainly at AGCS, in Central and Eastern Europe, Latin America and Turkey.
Our operating profit went up by €74 MN, or 6.4%, to €1,236 MN. The underwriting result increased by €150 MN to €501 MN, largely driven by the improvement in our loss ratio. Our investment income decreased by €76 MN to €719 MN.
The combined ratio improved by 1.4 percentage points to 94.8% due to a better underlying accident year loss ratio, primarily in the United States and Italy.
| A 08 | ||
|---|---|---|
| 2013 | 2012 | 2011 |
| 10,651 | 11,392 | 10,832 |
| 1,236 | 1,162 | 1,111 |
| 67.2 | 69.2 | 70.5 |
| 27.6 | 27.0 | 26.9 |
| 94.8 | 96.2 | 97.4 |
1 Gross premiums written adjusted for foreign currency translation and (de-)consolidation effects.
2 Prior period figures have been restated to reflect the retrospective application of the amended standard IAS 19 – Employee Benefits, effective as of 1 January 2013. For further information, please refer to note 2 to the condensed consolidated interim financial statements.
3 As of the first quarter of 2013, all restructuring charges are presented within operating profit and all prior periods have been adjusted to conform to the current accounting presentation.
On a nominal basis, we recorded gross premiums written of €10,651 MN, down 6.5%. Unfavorable foreign currency translation effects accounted for €436 MN, largely due to the depreciation of the Australian Dollar, the Brazilian Real, the U.S. Dollar, and the British Pound against the Euro.2 Consolidation/deconsolidation effects amounted to €289 MN. This mainly stemmed from our acquisitions of Yapı Kredi Sigorta in Turkey and the activities of Gan Eurocourtage in France. Including these acquisitions, we experienced outstanding growth in Turkey and France.
Adjusted for foreign currency translation and (de)consolidation effects, our gross premiums written decreased by 5.2%. The positive price effect of 0.7% was more than offset by the negative volume effect of 5.9%, mainly driven by the changed structure in our crop business in the United States. Excluding the reduction in our U.S. crop business, our internal growth amounted to 3.0%. We experienced solid growth at AGCS, in Central and Eastern Europe, Latin America and Turkey.
Analyzing internal premium growth in terms of price and volume, we use four clusters based on 3Q 2013 internal growth over 3Q 2012:
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 positive.
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.
% (60) (40) 0(20) 20 40 60 Turkey Latin America Allianz Global Assistance Australia CEE AGCS Asia-Pacific Italy France Germany Switzerland U.K. Spain Credit Insurance USA 13.9 (5.0) 1.0 1 2 3 15.7 12.9 42.0 20.5 7.1 8.6 27.4 10.6 7.3 3.5 21.9 2.0 1.3 1.9 4.4 1.0 3.2 (0.4) (0.4) (3.9) (3.6) (4.0) 6.1 (57.2) (12.5) (1.3) 1.9
3Q 2013 over 3Q 2012 3Q 2012 over 3Q 2011 Cluster
1 Before elimination of transactions between Allianz Group companies in different geographic regions and different reportable segments.
In Turkey gross premiums amounted to €244 MN. Our internal growth of 42.0% primarily stemmed from our motor business through tied agents.
In Latin America we recorded gross premiums of €542 MN, up 12.9% on an internal basis. This rise was due to a strong contribution from our motor business in Brazil, with positive impacts from both price and volume.
1 We comment on the development of our gross premiums written on an internal basis, meaning adjusted for foreign currency translation and (de-)consolidation effects in order to provide more comparable information.
2 Based on the quarterly average exchange rates in 2013 compared to 2012.
48 Reconciliations
In Allianz Global Assistance gross premiums increased to €497 MN. Our internal growth of 7.1% was because of higher volumes mainly in our U.S., French, German, UK, and Brazilian business, as well as price increases primarily in our Australian and U.S. subsidiaries.
In Australia gross premiums grew to €750 MN. The increase of 1.0% on an internal basis benefited from new customers in our motor lines and slightly higher tariffs in our retail property and motor business.
In Central and Eastern Europe gross premiums stood at €618 MN, up 13.9% on an internal basis. The growth was largely attributable to higher volumes in our personal accident and health business in Russia, which outweighed negative price effects.
At AGCS gross premiums grew to €1,239 MN. Our internal growth of 10.6% was supported by volume growth in our Allianz Risk Transfer (ART) business. Price decreases in our aviation and liability business could only partly compensate for price rises in our marine lines.
In Asia-Pacific we recorded gross premiums of €161 MN. On an internal basis, we grew by 3.5% with our Malaysian motor business being the main driver. The overall price effect was slightly negative.
In Italy gross premiums rose to €853 MN. The increase of 2.0% on an internal basis benefited from volume increases in our motor business, particularly in our direct channels, which more than offset price declines.
In France gross premiums totaled €963 MN. The internal growth of 1.9% was due to tariff increases across all lines of business and more than compensated for volume losses.
In Germany gross premiums amounted to €1,885 MN – a growth of 1.0% on an internal basis. This was driven by price increases in almost all lines of business, and was partly offset by negative volume effects.
In Switzerland gross premiums stood at €261 MN, down 0.4% on an internal basis. We experienced a slight volume increase mainly in our motor business. However, this was more than offset by a negative price effect.
In the United Kingdom we generated gross premiums of €542 MN. The decline of 1.3% on an internal basis was attributable to volume losses in our legal protection business and motor lines, which could not be compensated for by tariff increases in our motor business.
In Spain gross premiums went down to €416 MN. The difficult market conditions led to a negative internal growth of 3.9%. Despite the challenging market environment, we were able to generate volume increases in our motor lines. Tariffs declined, in particular in our motor and commercial lines.
In our Credit Insurance business, gross premiums decreased to €472 MN, down 4.0% on an internal basis. The positive price effect in European markets could not offset the overall declining volumes.
In the United States gross premiums decreased to €653 MN. On an internal basis, gross premiums dropped by 57.2%, largely due to the expected reduction in our crop business and, to a lesser extent, declines in our commercial lines which were impacted by our strict underwriting discipline. The overall price effect was positive.
On an internal basis, gross premiums written decreased by 1.1%. This was comprised of a positive price effect of 0.9% and a negative volume effect of 2.0%. Excluding the decline due to the reduction in our U.S. crop business, our internal growth amounted to 2.5%. On a nominal basis, gross premiums fell by 0.8% to €36,602 MN.
| Operating Profit | A 10 | |||||
|---|---|---|---|---|---|---|
| € mn | three months ended 30 September |
nine months ended 30 September |
||||
| 2013 | 2012 | 2013 | 2012 | |||
| Underwriting result | 501 | 351 | 1,398 | 918 | ||
| Operating investment income |
719 | 795 | 2,266 | 2,495 | ||
| Other result1 | 16 | 16 | 70 | (18) | ||
| Operating profit | 1,236 | 1,162 | 3,734 | 3,395 | ||
1 Consists of fee and commission income/expenses, other income/expenses and restructuring charges.
We analyze the operating profit in the Property-Casualty business segment in terms of underwriting result, operating investment income and other result1.
Operating profit increased by €74 MN to €1,236 MN driven by a resilient underwriting result.
Our underwriting result grew by €150 MN to €501 MN benefiting from an improvement in our underlying claims development (accident year loss ratio excluding natural catastrophes) and a more favorable run-off. This more than offset the higher burden from natural catastrophes and the increase in our expenses.
The combined ratio improved by 1.4 percentage points to 94.8%.
| Underwriting result | A 11 |
|---|---|
| € mn |
| three months ended 30 September |
nine months ended 30 September |
|||||
|---|---|---|---|---|---|---|
| 2013 | 2012 | 2013 | 2012 | |||
| Premiums earned (net) | 10,768 | 10,804 | 31,459 | 31,151 | ||
| Accident year claims | (7,703) | (7,642) | (22,246) | (22,128) | ||
| Previous year claims (run-off) |
470 | 160 | 1,216 | 645 | ||
| Claims and insurance benefits incurred (net) |
(7,233) | (7,482) | (21,030) | (21,483) | ||
| Acquisition and administrative expenses (net) |
(2,976) | (2,915) | (8,861) | (8,589) | ||
| Change in reserves for insurance and investment contracts (net) (without expenses for premium |
||||||
| refunds)1 | (58) | (56) | (170) | (161) | ||
| Underwriting result | 501 | 351 | 1,398 | 918 |
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 was 71.5%, up 0.8 percentage points compared to the third quarter of 2012. This was driven by higher natural catastrophe losses, which more than offset the benefits of lower underlying losses. Due to a rather active third quarter in 2013 compared to the relatively benign third quarter of 2012, our net losses from natural catastrophes increased by €381 MN to €464 MN. The impact from natural catastrophes grew by 3.5 percentage points to 4.3%, and was mostly driven by the Andreas and Ernst/Franz storms in Germany, as well as torrential rain in Ireland.
Excluding natural catastrophes, our accident year loss ratio was 67.2%, a 2.7 percentage point improvement compared to the third quarter of 2012. Favorable developments were recorded across the portfolio, supported by continued positive price momentum and reductions in claims frequency/severity.
1 Consists of fee and commission income/expenses, other income/expenses and restructuring charges.
A Interim Group Management Report
development of our accident year loss ratio:
USA: 1.2 percentage points. This was driven by price and loss-related initiatives in our commercial lines. We also benefited from the absence of natural catastrophes and weather-related losses that had an adverse effect in the third quarter of 2012.
Italy: 0.5 percentage points. This was mainly due to our motor business, supported by stable average premiums and a lower impact from claims in motor third party liability. As a result of profitability measures we previously introduced, our general liability business also contributed positively.
Switzerland: 0.4 percentage points. This was because of lower losses from natural catastrophes in our motor and property business, as well as by the improvement in the underlying loss ratio.
AGCS: 0.3 percentage points. This primarily resulted from fewer large losses, mainly in our property and energy business.
The following operations contributed negatively to the development of our accident year loss ratio:
Germany: 2.0 percentage points. The negative impact was entirely due to a higher burden from natural catastrophes. In the third quarter of 2013, we were affected by the Andreas and Ernst/Franz storms, while in the third quarter of 2012 we recorded a lower level of claims from the thunderstorm Mina/Nadine.
Reinsurance: 1.1 percentage points. This increase resulted from higher losses in our natural catastrophe lines in Europe, mainly driven by the storms in Germany.
Central and Eastern Europe: 0.2 percentage points. This was due to an increase in the loss ratio in our motor business and a number of large and weather-related claims in Russia.
France: 0.1 percentage points. This was mainly because of a higher burden from large losses in the third quarter of 2013 compared to the third quarter of 2012.
Our run-off result grew by €310 MN to €470 MN, which led to an increase of 2.8 percentage points in the run-off ratio. This was partly because of a more favorable previous year claims development, but primarily due to the absence of the additional reserve strengthening in the United States in the third quarter of 2012.
In the third quarter of 2013, total expenses stood at €2,976 MN, compared to €2,915 MN in the third quarter of 2012. Our expense ratio increased by 0.6 percentage points to 27.6%. Similar to previous quarters, this increase reflects the effects of structural changes in our portfolio in the United States (reduced crop business), the negative impact from regulatory changes at our business in Brazil (policy collection fee), and the acquisition of the Gan Eurocourtage business in France.
| € mn | |||||
|---|---|---|---|---|---|
| three months ended 30 September |
nine months ended 30 September |
||||
| 2013 | 2012 | 2013 | 2012 | ||
| Interest and similar income (net of interest expenses) |
876 | 911 | 2,673 | 2,804 | |
| Operating income from financial assets and liabilities carried at fair value through income (net) |
(34) | (20) | (61) | (25) | |
| Operating realized gains/ losses (net) |
14 | 32 | 44 | 46 | |
| Operating impairments of investments (net) |
(1) | (1) | (9) | (15) | |
| Investment expenses | (88) | (75) | (233) | (212) | |
| Expenses for premium refunds (net)2 |
(48) | (52) | (148) | (103) | |
| Operating investment income |
719 | 795 | 2,266 | 2,495 |
1 The operating investment income 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 UBR (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 amounted to €719 MN, down by €76 MN, mainly due to lower interest and similar income (net of interest expenses).
Interest and similar income (net of interest expenses) dropped by €35 MN, driven by lower income on debt securities, mainly due to lower yields. The total average asset base1 fell by 0.3% from €102.8 BN in the third quarter of 2012 to €102.5 BN in the third quarter of 2013.
Operating realized gains/losses (net) decreased by €18 MN to €14 MN as the third quarter of 2012 benefited from gains related to portfolio adjustments.
Operating income from financial assets and liabilities carried at fair value through income (net) amounted to a loss of €34 MN. The fall of €14 MN was mainly attributable to an unfavorable foreign currency result, including related hedging transactions.
| Other result | A 13 | ||||
|---|---|---|---|---|---|
| € mn | |||||
| three months ended 30 September |
nine months ended 30 September |
||||
| 2013 | 2012 | 2013 | 2012 | ||
| Fee and commission income | 318 | 277 | 915 | 858 | |
| Other income | 10 | 10 | 29 | 27 | |
| Fee and commission expenses |
(295) | (259) | (843) | (799) | |
| Other expenses | (7) | (6) | (18) | (16) | |
| Restructuring charges | (10) | (6) | (13) | (88) | |
| Other result | 16 | 16 | 70 | (18) |
Operating profit increased by €339 MN – or 10.0% – to €3,734 MN. The main driver was our strong underwriting result, as well as lower restructuring charges. Our investment result decreased by €229 MN to €2,266 MN, primarily affected by the low yield environment and an unfavorable foreign currency result, including related hedging transactions.
Our combined ratio improved by 1.5 percentage points to 95.0%. This was supported by a favorable development in our accident year loss ratio of 0.3 percentage points and a 1.8 percentage point positive movement in our run-off ratio – despite an increase in net losses from natural catastrophes of €785 MN to €1,083 MN and higher expenses compared to the first nine months of 2012.
1 Including the French health business, excluding fair value option and trading.
| € mn | |||||
|---|---|---|---|---|---|
| three months ended 30 September | nine months ended 30 September | ||||
| 2013 | 2012 | 2013 | 2012 | ||
| Gross premiums written1 | 10,651 | 11,392 | 36,602 | 36,915 | |
| Ceded premiums written | (859) | (1,372) | (3,290) | (3,996) | |
| Change in unearned premiums | 976 | 784 | (1,853) | (1,768) | |
| Premiums earned (net) | 10,768 | 10,804 | 31,459 | 31,151 | |
| Interest and similar income | 885 | 922 | 2,704 | 2,837 | |
| Operating income from financial assets and liabilities carried at fair value through income (net) |
(34) | (20) | (61) | (25) | |
| Operating realized gains/losses (net) | 14 | 32 | 44 | 46 | |
| Fee and commission income | 318 | 277 | 915 | 858 | |
| Other income | 10 | 10 | 29 | 27 | |
| Operating revenues | 11,961 | 12,025 | 35,090 | 34,894 | |
| Claims and insurance benefits incurred (net) | (7,233) | (7,482) | (21,030) | (21,483) | |
| Change in reserves for insurance and investment contracts (net) | (106) | (108) | (318) | (264) | |
| Interest expenses | (9) | (11) | (31) | (33) | |
| Operating impairments of investments (net) | (1) | (1) | (9) | (15) | |
| Investment expenses | (88) | (75) | (233) | (212) | |
| Acquisition and administrative expenses (net) | (2,976) | (2,915) | (8,861) | (8,589) | |
| Fee and commission expenses | (295) | (259) | (843) | (799) | |
| Restructuring charges | (10) | (6) | (13) | (88) | |
| Other expenses | (7) | (6) | (18) | (16) | |
| Operating expenses | (10,725) | (10,863) | (31,356) | (31,499) | |
| Operating profit | 1,236 | 1,162 | 3,734 | 3,395 | |
| Loss ratio2 in % | 67.2 | 69.2 | 66.8 | 68.9 | |
| Expense ratio3 in % | 27.6 | 27.0 | 28.2 | 27.6 | |
| Combined ratio4 in % | 94.8 | 96.2 | 95.0 | 96.5 | |
1 For the Property-Casualty business segment, total revenues are measured based upon gross premiums written. 2 Represents claims and insurance benefits incurred (net) divided by premiums earned (net).
3 Represents acquisition and administrative expenses (net) divided by premiums earned (net). 4 Represents the total of acquisition and administrative expenses (net) and claims and insurance benefits incurred (net) divided by premiums earned (net).
| Gross premiums written Premiums earned (net) Operating profit (loss) internal 1 three months ended 30 September 2013 2012 2013 2012 2013 2012 2013 2012 Germany 1,885 1,891 1,885 1,867 1,913 1,864 24 214 Switzerland 261 269 268 269 348 359 50 24 Austria 210 199 210 199 209 201 16 10 German Speaking Countries2 2,361 2,361 2,368 2,337 2,470 2,422 85 251 Italy 853 836 853 836 997 976 350 260 France3 963 787 802 787 968 793 83 104 Netherlands 144 147 144 146 162 158 14 9 Turkey4 244 131 186 131 241 107 37 15 Belgium5 110 100 77 77 109 98 8 9 Greece 27 24 27 24 23 22 7 8 Africa 18 17 18 17 14 13 2 2 Western&Southern Europe6 2,359 2,042 2,107 2,018 2,514 2,167 503 411 Latin America 542 566 639 566 419 414 30 23 Spain 416 433 416 433 458 454 57 70 Portugal 64 68 64 68 68 69 7 9 Iberia&Latin America 1,022 1,067 1,119 1,067 945 937 94 102 United States 653 1,615 691 1,615 608 924 37 (247) USA7 653 1,615 691 1,615 608 924 37 (247) Allianz Global Corporate&Specialty 1,239 1,145 1,266 1,145 767 843 164 132 Reinsurance PC 703 716 703 716 718 764 1 138 Australia 750 892 901 892 541 583 104 91 United Kingdom 542 593 585 593 533 559 50 57 Credit Insurance 472 485 462 481 351 344 81 118 Ireland 97 109 97 109 90 100 14 15 Global Insurance Lines&Anglo Markets8 3,803 3,940 4,014 3,936 3,000 3,193 407 546 Russia 221 159 240 159 154 141 (1) 1 Poland 103 105 106 105 87 91 5 (4) Hungary 65 72 68 72 58 59 10 14 Slovakia 76 82 76 82 68 70 16 15 Czech Republic 67 66 70 66 60 57 24 9 Romania 43 42 42 42 39 37 2 – Bulgaria 17 19 17 19 14 17 4 7 Croatia 24 20 24 20 20 19 4 2 Ukraine 4 3 4 3 2 2 – – Central and Eastern Europe9 618 567 646 567 502 493 61 45 Asia-Pacific 161 170 176 170 96 81 16 16 Middle East and North Africa 16 15 17 15 11 13 2 2 Growth Markets 795 752 839 752 609 587 79 63 Allianz Global Assistance 497 468 501 468 505 482 32 29 Allianz Worldwide Care 88 77 88 77 110 92 8 7 Allianz Worldwide Partners10 600 545 604 568 622 574 29 36 Consolidation and Other11 (942) (930) (946) (904) – – 2 – Total 10,651 11,392 10,796 11,389 10,768 10,804 1,236 1,162 |
€ mn | |||||
|---|---|---|---|---|---|---|
1 This reflects gross premiums written on an internal basis (adjusted for foreign currency translation and (de-)consolidation effects).
4 On 12 July 2013, Allianz Group acquired Yapı Kredi Bank's 93.94% shareholding in the Turkish property-casualty insurance company Yapı Kredi Sigorta.
2 Includes "Münchener und Magdeburger Agrarversicherung AG" with gross premiums written of €5 mn, premiums earned (net) of €(0.3) mn and operating loss of €5 mn for 3Q 2013 and gross premiums written of €2 mn, premiums earned (net) of €(2) mn and operating profit of €3 mn for 3Q 2012.
5 Effective as of 1 August 2012, Allianz Belgium acquired the assets and assumed the liabilities related to the insurance activities of Mensura.
6 Contains €2 mn and €4 mn operating profit for 3Q 2013 and 3Q 2012, respectively, from a management holding located in Luxembourg.
3 Effective as of 1 October 2012, Allianz France acquired the property-casualty brokerage portfolio-related activities (excluding transport) of Gan Eurocourtage.
Operations
| % | Combined ratio | Loss ratio | Expense ratio | |||
|---|---|---|---|---|---|---|
| three months ended 30 September | 2013 | 2012 | 2013 | 2012 | 2013 | 2012 |
| Germany | 105.2 | 97.0 | 78.4 | 69.4 | 26.8 | 27.6 |
| Switzerland | 88.1 | 97.2 | 63.8 | 73.2 | 24.3 | 24.0 |
| Austria | 95.6 | 100.9 | 71.8 | 75.8 | 23.8 | 25.1 |
| German Speaking Countries2 | 102.2 | 97.2 | 75.9 | 70.3 | 26.3 | 26.9 |
| Italy | 71.5 | 81.2 | 48.3 | 57.6 | 23.2 | 23.6 |
| France3 | 99.5 | 95.4 | 69.7 | 68.0 | 29.8 | 27.4 |
| Netherlands | 97.2 | 101.0 | 66.2 | 76.2 | 31.0 | 24.8 |
| Turkey4 | 90.5 | 93.0 | 67.6 | 66.5 | 22.9 | 26.5 |
| Belgium5 | 97.5 | 99.5 | 69.3 | 67.5 | 28.2 | 32.0 |
| Greece | 77.4 | 69.5 | 47.6 | 36.9 | 29.8 | 32.6 |
| Africa | 105.3 | 105.9 | 62.0 | 57.0 | 43.3 | 48.9 |
| Western&Southern Europe6 | 87.1 | 89.3 | 60.5 | 63.5 | 26.6 | 25.8 |
| Latin America Spain |
97.9 91.5 |
100.3 88.3 |
66.7 70.7 |
67.8 67.4 |
31.2 20.8 |
32.5 20.9 |
| Portugal | 95.6 | 92.9 | 71.8 | 68.9 | 23.8 | 24.0 |
| Iberia&Latin America | 94.7 | 93.9 | 69.1 | 67.8 | 25.6 | 26.1 |
| United States | 103.5 | 132.4 | 73.7 | 110.6 | 29.8 | 21.8 |
| USA7 | 103.5 | 132.4 | 73.7 | 110.6 | 29.8 | 21.8 |
| Allianz Global Corporate&Specialty | 88.1 | 93.6 | 62.9 | 66.8 | 25.2 | 26.8 |
| Reinsurance PC | 104.1 | 85.8 | 75.5 | 60.0 | 28.6 | 25.8 |
| Australia | 91.0 | 95.5 | 66.6 | 69.4 | 24.4 | 26.1 |
| United Kingdom | 95.5 | 95.6 | 64.5 | 66.6 | 31.0 | 29.0 |
| Credit Insurance | 81.8 | 77.0 | 52.8 | 46.7 | 29.0 | 30.3 |
| Ireland | 92.5 | 95.2 | 61.9 | 66.0 | 30.6 | 29.2 |
| Global Insurance Lines&Anglo Markets8 | 93.4 | 90.9 | 65.8 | 63.5 | 27.6 | 27.4 |
| Russia | 106.0 | 101.2 | 66.6 | 57.0 | 39.4 | 44.2 |
| Poland | 99.4 | 108.6 | 65.4 | 74.7 | 34.0 | 33.9 |
| Hungary | 94.4 | 89.4 | 57.7 | 62.2 | 36.7 | 27.2 |
| Slovakia | 82.4 | 84.3 | 50.6 | 51.4 | 31.8 | 32.9 |
| Czech Republic | 62.5 | 88.9 | 37.8 | 64.0 | 24.7 | 24.9 |
| Romania | 103.1 | 106.1 | 74.6 | 78.3 | 28.5 | 27.8 |
| Bulgaria | 75.1 | 61.6 | 51.4 | 37.6 | 23.7 | 24.0 |
| Croatia | 89.7 | 95.2 | 52.7 | 60.6 | 37.0 | 34.6 |
| Ukraine | 100.0 | 109.8 | 44.2 | 46.1 | 55.8 | 63.7 |
| Central and Eastern Europe9 | 93.6 | 96.2 | 59.3 | 61.9 | 34.3 | 34.3 |
| Asia-Pacific | 92.2 | 89.4 | 61.4 | 58.4 | 30.8 | 31.0 |
| Middle East and North Africa | 95.3 | 98.5 | 59.7 | 62.8 | 35.6 | 35.7 |
| Growth Markets | 93.4 | 95.2 | 59.6 | 61.5 | 33.8 | 33.7 |
| Allianz Global Assistance | 95.6 | 95.0 | 60.5 | 60.2 | 35.1 | 34.8 |
| Allianz Worldwide Care | 93.1 | 93.8 | 73.9 | 74.2 | 19.2 | 19.6 |
| Allianz Worldwide Partners10 | 96.9 | 94.8 | 63.5 | 62.4 | 33.4 | 32.4 |
| Consolidation and Other11 | – | – | – | – | – | – |
| Total | 94.8 | 96.2 | 67.2 | 69.2 | 27.6 | 27.0 |
7 The reserve strengthening for asbestos risks in 2012 at Fireman's Fund Insurance Company of €71 mn had no impact on the financial results of the Allianz Group and Fireman's Fund's combined ratio under IFRS.
8 Contains €7 mn and €5 mn operating loss for 3Q 2013 and 2012, respectively, from AGF UK.
will be further enhanced during the following quarters. The reinsurance business of Allianz Global Automotive contributes with gross premiums written of €15 mn, premiums earned (net) of €7 mn and an operating loss of €10 mn for 3Q 2013.
Automotive and income and expenses of a management holding. The set-up of this division
9 Contains income and expense items from a management holding and consolidations between countries in this region.
10 The business division Allianz Worldwide Partners includes the legal entities of Allianz Global Assistance and Allianz Worldwide Care as well as the reinsurance business of Allianz Global 11 Represents elimination of transactions between Allianz Group companies in different geographic regions.
A 15
| € mn | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Gross premiums written | internal 1 | Premiums earned (net) | Operating profit (loss) | ||||||
| nine months ended 30 September | 2013 | 2012 | 2013 | 2012 | 2013 | 2012 | 2013 | 2012 | |
| Germany2 | 7,554 | 7,474 | 7,554 | 7,437 | 5,624 | 5,518 | 290 | 531 | |
| Switzerland | 1,364 | 1,389 | 1,391 | 1,389 | 1,065 | 1,091 | 139 | 134 | |
| Austria | 776 | 751 | 776 | 751 | 610 | 590 | 44 | 45 | |
| German Speaking Countries3 | 9,726 | 9,645 | 9,753 | 9,608 | 7,319 | 7,218 | 478 | 720 | |
| Italy | 2,865 | 2,821 | 2,865 | 2,821 | 2,956 | 2,905 | 878 | 625 | |
| France4 | 3,322 | 2,661 | 2,705 | 2,661 | 2,853 | 2,375 | 306 | 291 | |
| Netherlands | 568 | 566 | 568 | 562 | 494 | 501 | 39 | 24 | |
| Turkey5 | 680 | 427 | 636 | 427 | 517 | 296 | 67 | 22 | |
| Belgium6 | 362 | 288 | 271 | 262 | 319 | 246 | 33 | 30 | |
| Greece | 83 | 83 | 83 | 83 | 64 | 68 | 15 | 20 | |
| Africa | 72 | 70 | 72 | 70 | 41 | 37 | 6 | 5 | |
| Western&Southern Europe7 | 7,952 | 6,916 | 7,200 | 6,886 | 7,244 | 6,428 | 1,353 | 1,029 | |
| Latin America | 1,739 | 1,730 | 1,940 | 1,729 | 1,303 | 1,182 | 103 | 88 | |
| Spain Portugal |
1,516 247 |
1,517 254 |
1,516 247 |
1,517 254 |
1,357 200 |
1,365 198 |
171 17 |
198 28 |
|
| Iberia&Latin America | 3,502 | 3,501 | 3,703 | 3,500 | 2,860 | 2,745 | 291 | 314 | |
| United States | 1,625 | 3,076 | 1,683 | 3,076 | 1,532 | 2,055 | 140 | (289) | |
| USA8 | 1,625 | 3,076 | 1,683 | 3,076 | 1,532 | 2,055 | 140 | (289) | |
| Allianz Global Corporate&Specialty | 4,042 | 4,249 | 4,088 | 4,249 | 2,205 | 2,441 | 342 | 324 | |
| Reinsurance PC2 | 2,818 | 2,898 | 2,778 | 2,898 | 2,176 | 2,346 | 111 | 252 | |
| Australia | 2,202 | 2,304 | 2,400 | 2,304 | 1,700 | 1,648 | 302 | 262 | |
| United Kingdom | 1,713 | 1,767 | 1,798 | 1,767 | 1,573 | 1,616 | 151 | 154 | |
| Credit Insurance | 1,610 | 1,576 | 1,576 | 1,549 | 1,072 | 1,004 | 285 | 336 | |
| Ireland | 321 | 341 | 321 | 341 | 277 | 297 | 35 | 38 | |
| Global Insurance Lines&Anglo Markets9 | 12,706 | 13,135 | 12,961 | 13,108 | 9,003 | 9,352 | 1,219 | 1,360 | |
| Russia | 621 | 519 | 651 | 519 | 442 | 458 | (7) | (2) | |
| Poland | 322 | 319 | 321 | 319 | 257 | 269 | 9 | 7 | |
| Hungary | 210 | 246 | 214 | 246 | 171 | 175 | 18 | 19 | |
| Slovakia | 253 | 267 | 253 | 267 | 199 | 204 | 42 | 49 | |
| Czech Republic | 210 | 213 | 215 | 213 | 171 | 169 | 36 | 24 | |
| Romania | 136 | 135 | 135 | 135 | 112 | 109 | 4 | 2 | |
| Bulgaria | 54 | 61 | 54 | 61 | 45 | 48 | 13 | 11 | |
| Croatia | 76 | 71 | 76 | 71 | 58 | 57 | 10 | 8 | |
| Ukraine | 13 | 10 | 13 | 10 | 5 | 5 | 1 | 2 | |
| Central and Eastern Europe10 | 1,892 | 1,839 | 1,932 | 1,839 | 1,460 | 1,494 | 120 | 116 | |
| Asia-Pacific | 515 | 470 | 534 | 470 | 280 | 238 | 54 | 45 | |
| Middle East and North Africa | 54 | 53 | 58 | 53 | 35 | 37 | 6 | 4 | |
| Growth Markets | 2,461 | 2,362 | 2,524 | 2,362 | 1,775 | 1,769 | 180 | 165 | |
| Allianz Global Assistance | 1,506 | 1,373 | 1,511 | 1,373 | 1,398 | 1,319 | 68 | 78 | |
| Allianz Worldwide Care | 384 | 308 | 384 | 308 | 309 | 265 | 25 | 18 | |
| Allianz Worldwide Partners11 | 1,960 | 1,681 | 1,965 | 1,718 | 1,726 | 1,584 | 71 | 96 | |
| Consolidation and Other12 | (3,330) | (3,401) | (3,291) | (3,370) | – | – | 2 | – | |
| Total | 36,602 | 36,915 | 36,498 | 36,888 | 31,459 | 31,151 | 3,734 | 3,395 |
1 This reflects gross premiums written on an internal basis (adjusted for foreign currency translation and (de-)consolidation effects).
gross premiums written of €31 mn, premiums earned (net) of €19 mn and operating profit of €10 mn for 9M 2012.
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 1.2 percentage point improvement in the combined ratio for Germany and an increase of 3.0 percentage points in Reinsurance PC. This had no impact at Group level.
4 Effective as of 1 October 2012, Allianz France acquired the property-casualty brokerage portfolio-related activities (excluding transport) of Gan Eurocourtage.
5 On 12 July 2013, Allianz Group acquired Yapı Kredi Bank's 93.94% shareholding in the Turkish property-casualty insurance company Yapı Kredi Sigorta.
3 Includes "Münchener und Magdeburger Agrarversicherung AG" with gross premiums written of €32 mn, premiums earned (net) of €20 mn and operating profit of €5 mn for 9M 2013 and
6 Effective as of 1 August 2012, Allianz Belgium acquired the assets and assumed the liabilities related to the insurance activities of Mensura.
%
| Turkey5 | 92.7 | 99.4 | 68.6 | 71.9 | 24.1 | 27.5 |
|---|---|---|---|---|---|---|
| Belgium6 | 96.5 | 98.2 | 68.3 | 65.1 | 28.2 | 33.1 |
| Greece | 80.7 | 75.1 | 47.9 | 41.6 | 32.8 | 33.5 |
| Africa | 98.0 | 98.9 | 56.7 | 55.2 | 41.3 | 43.7 |
| Western&Southern Europe7 | 88.9 | 93.0 | 62.3 | 67.1 | 26.6 | 25.9 |
| Latin America | 98.1 | 99.4 | 65.8 | 68.0 | 32.3 | 31.4 |
| Spain | 91.5 | 89.7 | 70.6 | 69.0 | 20.9 | 20.7 |
| Portugal | 96.4 | 92.1 | 72.8 | 69.0 | 23.6 | 23.1 |
| Iberia&Latin America | 94.8 | 94.0 | 68.5 | 68.5 | 26.3 | 25.5 |
| United States | 101.9 | 122.6 | 68.5 | 94.5 | 33.4 | 28.1 |
| USA8 | 101.9 | 122.6 | 68.5 | 94.5 | 33.4 | 28.1 |
| Allianz Global Corporate&Specialty | 94.4 | 96.2 | 67.1 | 69.1 | 27.3 | 27.1 |
| Reinsurance PC2 | 98.5 | 93.2 | 65.9 | 66.2 | 32.6 | 27.0 |
| Australia | 92.6 | 96.5 | 67.1 | 70.3 | 25.5 | 26.2 |
| United Kingdom | 95.7 | 96.1 | 64.6 | 65.4 | 31.1 | 30.7 |
| Credit Insurance | 81.4 | 77.7 | 52.6 | 50.2 | 28.8 | 27.5 |
| Ireland | 94.3 | 96.4 | 62.7 | 67.1 | 31.6 | 29.3 |
| Global Insurance Lines&Anglo Markets9 | 93.8 | 93.6 | 64.5 | 65.9 | 29.3 | 27.7 |
nine months ended 30 September 2013 2012 2013 2012 2013 2012 Germany2 102.5 98.2 76.6 70.6 25.9 27.6 Switzerland 91.6 93.6 68.8 70.9 22.8 22.7 Austria 97.0 98.4 70.9 72.2 26.1 26.2 German Speaking Countries3 100.4 97.4 75.0 70.7 25.4 26.7 Italy 77.7 87.2 53.7 63.1 24.0 24.1 France4 97.5 97.4 69.0 70.9 28.5 26.5 Netherlands 97.9 100.8 67.8 73.7 30.1 27.1
| Russia | 107.6 | 102.7 | 66.9 | 60.4 | 40.7 | 42.3 |
|---|---|---|---|---|---|---|
| Poland | 101.2 | 101.8 | 66.7 | 68.7 | 34.5 | 33.1 |
| Hungary | 101.6 | 101.5 | 63.0 | 60.0 | 38.6 | 41.5 |
| Slovakia | 85.4 | 83.0 | 54.6 | 52.0 | 30.8 | 31.0 |
| Czech Republic | 81.2 | 90.6 | 54.0 | 64.1 | 27.2 | 26.5 |
| Romania | 103.0 | 105.0 | 73.2 | 78.4 | 29.8 | 26.6 |
| Bulgaria | 75.1 | 80.0 | 46.6 | 51.1 | 28.5 | 28.9 |
| Croatia | 90.7 | 92.9 | 53.1 | 56.4 | 37.6 | 36.5 |
| Ukraine | 111.0 | 77.5 | 55.2 | 27.0 | 55.8 | 50.5 |
| Central and Eastern Europe10 | 98.0 | 97.5 | 62.6 | 61.8 | 35.4 | 35.7 |
| Asia-Pacific | 89.5 | 89.8 | 58.7 | 59.2 | 30.8 | 30.6 |
| Middle East and North Africa | 95.5 | 104.1 | 61.3 | 69.9 | 34.2 | 34.2 |
| Growth Markets | 96.6 | 96.6 | 61.9 | 61.7 | 34.7 | 34.9 |
| Allianz Global Assistance | 96.9 | 95.8 | 61.7 | 60.2 | 35.2 | 35.6 |
Allianz Worldwide Care 92.4 94.0 73.9 75.2 18.5 18.8 Allianz Worldwide Partners11 97.4 95.5 64.3 62.7 33.1 32.8
7 Contains €9 mn and €12 mn operating profit for 9M 2013 and 2012, respectively, from a management holding located in Luxembourg.
8 The reserve strengthening for asbestos risks in 2012 at Fireman's Fund Insurance Company of €71 mn had no impact on the financial results of the Allianz Group and Fireman's Fund's combined ratio under IFRS.
11 The business division Allianz Worldwide Partners includes the legal entities 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 contributes with gross premiums written of €70 mn, premiums earned (net) of €19 mn and an operating loss of €19 mn for 9M 2013.
9 Contains €7 mn and €6 mn operating loss for 9M 2013 and 2012, respectively, from AGF UK. 10 Contains income and expense items from a management holding and consolidations between countries in this region.
12 Represents elimination of transactions between Allianz Group companies in different geographic regions.
Combined ratio Loss ratio Expense ratio
Third quarter 2013
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.
We recorded statutory premiums of €12.7 bn – an increase of 7.3% on an internal basis1. The growth in premiums in Germany and Italy more than offset the drop in premiums in South Korea and Belgium/Luxembourg.
Our operating profit was solid at €769 mn. Compared to the third quarter of 2012, however, it decreased by €46 mn mainly due to a less favorable investment result, largely driven by the net of hedging and foreign currency related losses, mainly in Germany.
Our margin on reserves2 decreased from 73 to 66 basis points, driven by direct and indirect effects of continued market volatility.
| Key figures life/health | A 18 | ||
|---|---|---|---|
| € mn three months ended 30 September |
2013 | 2012 | 2011 |
| Statutory premiums | 12,697 | 11,912 | 11,806 |
| Operating profit3, 4 |
769 | 815 | 520 |
| Margin on reserves (bps) | 66 | 73 | 50 |
1 Statutory premiums adjusted for foreign currency translation and (de-)consolidation effects.
2 Represents 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 unitlinked contracts less reinsurance assets.
4 As of the first quarter of 2013, all restructuring charges are presented within operating profit and all prior periods have been adjusted to conform to the current accounting presentation.
3 Prior period figures have been restated to reflect the retrospective application of the amended standard IAS 19 – Employee Benefits, effective as of 1 January 2013. For further information, please refer to note 2 to the condensed consolidated interim financial statements.
A Interim Group Management Report
30 Asset Management
48 Reconciliations
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.
1 Before elimination of transactions between Allianz Group companies in different geographic regions, countries and different reportable segments.
In Latin America, statutory premiums increased 29.1% to €67 mn. This growth was driven by Mexico, where we recorded increased premiums from a large annuity contract and higher sales of investment-oriented products with single premiums. A premium decrease in Colombia as a result of product changes marginally offset this positive development.
In our German life business, premiums increased 24.6% to €4,125 mn. This growth was largely driven by a strong increase in single premium business with savings products as well as traditional endowment and annuity products. Our business with regular premiums remained broadly stable. Premiums in our German health business increased 1.6% to €832 mn driven by price increases in full health care coverage and strong new business in supplementary coverage.
In Italy, premiums increased 18.0% to €1,579 mn. Sustained by a favorable market environment, the remarkable growth was driven by our financial advisors and bancassurance channel, with a continued focus on unit-linked products in order to reduce our risk capital consumption.
In France, we recorded a premium increase of 3.7% to €1,947 mn. This was mainly driven by individual health, employee benefit products and the strong performance of the partnerships business in individual life. France experienced a shift of its individual life business towards unitlinked products.
In the United States, statutory premiums were up by 1.7% to €1,672 mn. This was primarily due to recovery of our variable annuity business where product changes in 2012 resulted in a considerable sales drop in the third quarter of 2012. Although fixed-indexed annuity sales were flat, we gained positive momentum in September partially as a result of strengthened commission levels and product promotions.
In Central and Eastern Europe, the decrease in statutory premiums of 10.6% to €191 mn was primarily driven by Poland as a result of the termination of a partnership in the bancassurance channel. In the Czech Republic a more restrictive single premium product approach further contributed to a decrease in premiums.
In Asia-Pacific, we recorded statutory premiums of €1,166 mn, a decrease of 10.7%. This was predominantly driven by the reduction in our single premium investmentoriented business in South Korea, where we stopped selling one of our major products in September 2012. In Taiwan, unit-linked business growth slowed down following a strong first half of 2013. This overall decrease was partly compensated for by the favorable unit-linked sales in Indonesia as a result of a special bancassurance sales campaign.
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.
In Spain, statutory premiums decreased 17.1% to €194 mn. This mainly resulted from our bancassurance channel, which recorded a large one-off pension contract in the third quarter of 2012. Increased sales of investment-oriented products, particularly in the agent channel, partly offset the decrease.
In Belgium/Luxembourg, statutory premiums decreased 26.1% to €359 mn. This was mainly due to lower sales of investment-oriented products distributed via the bancassurance channel.
In Switzerland, premiums totaled €184 mn. The decline of 33.2% was largely a result of lower single premiums in our group life business, where we have maintained a more selective growth focus. Moreover, the third quarter of 2012 was favorably impacted by a large one-off contract. While regular premiums in group life remained relatively stable, single premiums of traditional savings and unit-linked products slightly decreased in our individual life business.
Statutory premiums were up 8.3% on the first nine months of 2012 and amounted to €41,659 mn. On an internal basis, premiums increased by 8.7%. This growth was largely driven by our unit-linked business and, to a lower extent, supported by an increase in traditional business.
Significantly higher premiums from our investment-oriented business in Italy, Germany and Taiwan more than offset the drop in sales due to product changes in the United States, curtailed sales in South Korea and regulatory restrictions in Poland.
Operating profit performance was solid at €769 mn. The decrease of €46 mn largely related to a lower investment result.
Interest and similar income (net of interest expenses) decreased by €33 mn to €4,112 mn. Slightly lower income from debt securities, mainly as a result of foreign currency translation effects in the United States, was only partly compensated for by higher income from dividends.
Operating income from financial assets and liabilities carried at fair value through income (net) decreased by €417 mn to a loss of €537 mn. This was mainly due to losses from the net of foreign currency translation effects and financial derivatives in Germany. These derivatives are 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) decreased by €55 mn to €541 mn. This was due to slightly lower realizations on debt securities as well as on equities compared to the third quarter of 2012.
Operating impairments of investments (net) improved by €43 mn to €25 mn as the previous year's quarter was burdened by higher impairments on equities.
Claims and insurance benefits incurred (net) increased by €93 mn to €4,643 mn. This was mainly because of higher maturities in France, although partly offset by lower claims for maturities in Italy.
Changes in reserves for insurance and investment contracts (net) decreased by €283 mn to €3,139 mn. This was largely driven by a lower allocation of premiums to policy reserves due to the negative revaluation impact of decreased investment income in Germany.
Acquisition and administrative expenses (net) remained broadly stable at €1,322 mn.
A Interim Group Management Report
39 Balance Sheet Review 48 Reconciliations
Overall, the decrease in our operating profit was largely driven by the lower investment margin (i.e. investment income net of hedged item movements and policyholder participation) in Germany as a result of hedging and foreign currency related losses. In the United States, lower fair
value results related to annuity and guaranteed benefit features and lower realized gains increased this negative impact. However, due to these investment margin effects, the latter recorded lower amortization of deferred acquisition costs, which compensated for the adverse investment
Operating profit decreased by €165 mn to €2,293 mn, mainly as a result of a lower investment result. This decrease largely relates to the negative effects of the operating income from financial assets and liabilities carried at fair value through income in the second and third quarter of 2013. The overall decrease was also impacted by lower net realized gains, although it was partly offset by lower operating impairments.
margin impact.
| € mn | ||||
|---|---|---|---|---|
| three months ended 30 September | nine months ended 30 September | |||
| 2013 | 2012 | 2013 | 2012 | |
| Statutory premiums1 | 12,697 | 11,912 | 41,659 | 38,472 |
| Ceded premiums written | (143) | (195) | (451) | (528) |
| Change in unearned premiums | (54) | (69) | (218) | (187) |
| Statutory premiums (net) | 12,500 | 11,648 | 40,990 | 37,757 |
| Deposits from insurance and investment contracts | (6,631) | (6,005) | (22,849) | (20,219) |
| Premiums earned (net) | 5,869 | 5,643 | 18,141 | 17,538 |
| Interest and similar income | 4,128 | 4,166 | 12,573 | 12,651 |
| Operating income from financial assets and liabilities carried at fair value through income (net) |
(537) | (120) | (1,467) | (487) |
| Operating realized gains/losses (net) | 541 | 596 | 2,158 | 2,396 |
| Fee and commission income | 166 | 135 | 474 | 393 |
| Other income | 31 | 31 | 111 | 110 |
| Operating revenues | 10,198 | 10,451 | 31,990 | 32,601 |
| Claims and insurance benefits incurred (net) | (4,643) | (4,550) | (14,459) | (14,229) |
| Changes in reserves for insurance and investment contracts (net) | (3,139) | (3,422) | (10,068) | (10,653) |
| Interest expenses | (16) | (21) | (56) | (62) |
| Operating impairments of investments (net) | (25) | (68) | (219) | (334) |
| Investment expenses | (198) | (189) | (581) | (542) |
| Acquisition and administrative expenses (net) | (1,322) | (1,301) | (4,048) | (4,075) |
| Fee and commission expenses | (61) | (57) | (191) | (175) |
| Restructuring charges | – | (6) | (2) | (10) |
| Other expenses | (25) | (22) | (73) | (63) |
| Operating expenses | (9,429) | (9,636) | (29,697) | (30,143) |
| Operating profit | 769 | 815 | 2,293 | 2,458 |
| Margin on reserves2 in basis points | 66 | 73 | 66 | 75 |
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 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) |
|||||||
| internal 3 | ||||||||||
| three months ended 30 September | 2013 | 2012 | 2013 | 2012 | 2013 | 2012 | 2013 | 2012 | 2013 | 2012 |
| Germany Life | 4,125 | 3,311 | 4,125 | 3,311 | 2,640 | 2,425 | 175 | 217 | 39 | 52 |
| Germany Health | 832 | 819 | 832 | 819 | 829 | 816 | 59 | 76 | 94 | 128 |
| Switzerland | 184 | 283 | 189 | 283 | 77 | 118 | 19 | 20 | 58 | 59 |
| Austria | 84 | 82 | 84 | 82 | 60 | 53 | 7 | 3 | 60 | 23 |
| German Speaking Countries | 5,225 | 4,495 | 5,230 | 4,495 | 3,606 | 3,412 | 260 | 316 | 47 | 61 |
| Italy | 1,579 | 1,338 | 1,579 | 1,338 | 82 | 109 | 35 | 82 | 30 | 75 |
| France | 1,947 | 1,877 | 1,947 | 1,877 | 916 | 778 | 117 | 95 | 63 | 53 |
| Belgium/Luxembourg | 359 | 486 | 359 | 486 | 89 | 89 | 14 | 17 | 54 | 73 |
| Netherlands | 64 | 66 | 64 | 66 | 33 | 35 | 9 | 16 | 86 | 159 |
| Turkey4 | 168 | 29 | 45 | 29 | 29 | 9 | 11 | 1 | 320 | 49 |
| Greece | 20 | 20 | 20 | 20 | 12 | 13 | 2 | 1 | 196 | 137 |
| Africa | 12 | 12 | 12 | 12 | 4 | 5 | 1 | 1 | 63 | 125 |
| Western&Southern Europe | 4,149 | 3,828 | 4,026 | 3,828 | 1,165 | 1,038 | 189 | 213 | 54 | 66 |
| Latin America | 67 | 55 | 71 | 55 | 26 | 29 | 2 | 3 | 84 | 186 |
| Spain | 194 | 234 | 194 | 234 | 95 | 133 | 32 | 16 | 199 | 107 |
| Portugal | 71 | 40 | 71 | 40 | 21 | 20 | 7 | 6 | 468 | 463 |
| Iberia&Latin America | 332 | 329 | 336 | 329 | 142 | 182 | 41 | 25 | 206 | 138 |
| United States | 1,672 | 1,740 | 1,770 | 1,740 | 218 | 218 | 183 | 143 | 104 | 83 |
| USA | 1,672 | 1,740 | 1,770 | 1,740 | 218 | 218 | 183 | 143 | 104 | 83 |
| Reinsurance LH | 132 | 138 | 132 | 138 | 109 | 114 | 22 | 41 | 452 | 720 |
| Global Insurance Lines&Anglo Markets | 132 | 138 | 132 | 138 | 109 | 114 | 22 | 41 | 452 | 720 |
| South Korea | 312 | 554 | 324 | 554 | 114 | 158 | 10 | 10 | 44 | 41 |
| Taiwan | 346 | 399 | 367 | 399 | 47 | 17 | – | 2 | – | 16 |
| Indonesia | 181 | 162 | 214 | 162 | 71 | 102 | 12 | 13 | 395 | 391 |
| Malaysia | 95 | 81 | 105 | 81 | 45 | 55 | 3 | 5 | 120 | 197 |
| Japan | – | – | – | – | 2 | 1 | 1 | 2 | 20 | 28 |
| Other | 232 | 209 | 244 | 209 | 180 | 149 | 19 | 16 | 202 | 177 |
| Asia-Pacific | 1,166 | 1,405 | 1,254 | 1,405 | 459 | 482 | 45 | 48 | 79 | 83 |
| Poland | 30 | 48 | 31 | 48 | 10 | 31 | 4 | 5 | 297 | 295 |
| Slovakia | 59 | 59 | 59 | 59 | 53 | 52 | 8 | 10 | 266 | 327 |
| Hungary | 25 | 24 | 26 | 24 | 12 | 12 | 3 | 3 | 370 | 309 |
| Czech Republic | 30 | 39 | 31 | 39 | 18 | 16 | 3 | 5 | 217 | 391 |
| Russia | 21 | 23 | 22 | 23 | 21 | 23 | – | – | – | – |
| Croatia | 13 | 13 | 13 | 13 | 13 | 13 | 1 | 1 | 71 | 125 |
| Bulgaria | 9 | 7 | 9 | 7 | 8 | 6 | 1 | 2 | 399 | 512 |
| Romania | 4 | 5 | 4 | 5 | 4 | 3 | – | – | – | – |
| Central and Eastern Europe5 | 191 | 218 | 195 | 218 | 138 | 159 | 20 | 25 | 241 | 301 |
| Middle East and North Africa | 40 | 48 | 47 | 48 | 32 | 38 | 3 | 3 | 302 | 341 |
| Global Life | 3 | 1 | 3 | 1 | – | – | – | – | –6 | –6 |
| Growth Markets | 1,400 | 1,672 | 1,499 | 1,672 | 629 | 679 | 68 | 76 | 104 | 115 |
| Consolidation7 | (213) | (290) | (213) | (290) | – | – | 6 | 1 | –6 | –6 |
| Total | 12,697 | 11,912 | 12,780 | 11,912 | 5,869 | 5,643 | 769 | 815 | 66 | 73 |
1 Statutory premiums are gross premiums written from sales of life and health insurance policies as well as gross receipts from sales of unit-linked and other investment-oriented products, in accordance with the statutory accounting practices applicable in the insurer's home jurisdiction.
4 On 12 July 2013, Allianz 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.
5 Contains income and expense items from a management holding and consolidations between countries in this region.
6 Presentation not meaningful.
2 Represents operating profit (loss) 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 Statutory premiums adjusted for foreign currency translation and (de-)consolidation effects.
7 Represents elimination of transactions between Allianz Group companies in different geographic regions.
34 Corporate and Other 36 Outlook
39 Balance Sheet Review 48 Reconciliations
30 Asset Management
| € mn | Statutory premiums1 | Premiums earned (net) |
Operating profit (loss) |
Margin on reserves2 (bps) |
||||||
|---|---|---|---|---|---|---|---|---|---|---|
| internal 3 | ||||||||||
| nine months ended 30 September | 2013 | 2012 | 2013 | 2012 | 2013 | 2012 | 2013 | 2012 | 2013 | 2012 |
| Germany Life | 12,265 | 10,593 | 12,265 | 10,593 | 8,298 | 7,763 | 681 | 775 | 51 | 62 |
| Germany Health | 2,495 | 2,454 | 2,495 | 2,454 | 2,492 | 2,452 | 143 | 159 | 77 | 91 |
| Switzerland | 1,353 | 1,648 | 1,380 | 1,648 | 395 | 550 | 60 | 60 | 60 | 62 |
| Austria | 285 | 307 | 285 | 307 | 209 | 215 | 27 | 22 | 83 | 73 |
| German Speaking Countries | 16,398 | 15,002 | 16,425 | 15,002 | 11,394 | 10,980 | 911 | 1,016 | 55 | 66 |
| Italy | 6,294 | 4,521 | 6,294 | 4,521 | 322 | 380 | 190 | 218 | 54 | 67 |
| France | 6,354 | 5,833 | 6,354 | 5,833 | 2,589 | 2,276 | 355 | 304 | 63 | 59 |
| Belgium/Luxembourg | 1,586 | 1,406 | 1,586 | 1,406 | 283 | 300 | 51 | 62 | 67 | 90 |
| Netherlands | 203 | 209 | 203 | 209 | 102 | 102 | 31 | 40 | 99 | 133 |
| Turkey4 | 244 | 79 | 126 | 79 | 48 | 27 | 10 | 4 | 94 | 117 |
| Greece | 68 | 71 | 68 | 71 | 40 | 43 | 1 | 2 | 27 | 98 |
| Africa | 42 | 41 | 42 | 41 | 18 | 17 | 3 | 3 | 148 | 157 |
| Western&Southern Europe | 14,791 | 12,160 | 14,673 | 12,160 | 3,402 | 3,145 | 641 | 633 | 62 | 67 |
| Latin America | 256 | 179 | 255 | 179 | 118 | 89 | 5 | 8 | 93 | 175 |
| Spain | 899 | 754 | 899 | 754 | 340 | 398 | 99 | 76 | 204 | 171 |
| Portugal | 171 | 124 | 171 | 124 | 62 | 63 | 17 | – | 426 | – |
| Iberia&Latin America | 1,326 | 1,057 | 1,325 | 1,057 | 520 | 550 | 121 | 84 | 208 | 159 |
| United States | 5,022 | 5,739 | 5,154 | 5,739 | 646 | 616 | 384 | 436 | 74 | 87 |
| USA | 5,022 | 5,739 | 5,154 | 5,739 | 646 | 616 | 384 | 436 | 74 | 87 |
| Reinsurance LH | 398 | 378 | 398 | 378 | 340 | 329 | 14 | 49 | 86 | 286 |
| Global Insurance Lines&Anglo Markets | 398 | 378 | 398 | 378 | 340 | 329 | 14 | 49 | 86 | 286 |
| South Korea | 991 | 1,519 | 989 | 1,519 | 368 | 443 | 17 | 64 | 24 | 92 |
| Taiwan | 1,352 | 902 | 1,392 | 902 | 114 | 92 | – | 6 | – | 16 |
| Indonesia | 528 | 586 | 587 | 586 | 191 | 227 | 50 | 39 | 554 | 435 |
| Malaysia | 271 | 236 | 282 | 236 | 153 | 155 | 13 | 13 | 160 | 178 |
| Japan | – | 1 | – | 1 | 5 | 4 | 6 | (2) | 38 | (11) |
| Other | 670 | 553 | 672 | 553 | 504 | 437 | 61 | 48 | 232 | 181 |
| Asia-Pacific | 3,812 | 3,797 | 3,922 | 3,797 | 1,335 | 1,358 | 147 | 168 | 86 | 101 |
| Poland | 78 | 357 | 77 | 357 | 28 | 89 | 12 | 13 | 281 | 302 |
| Slovakia | 179 | 182 | 179 | 182 | 151 | 147 | 25 | 26 | 281 | 295 |
| Hungary | 134 | 122 | 136 | 122 | 37 | 37 | 7 | 3 | 269 | 120 |
| Czech Republic | 104 | 142 | 106 | 142 | 57 | 49 | 13 | 16 | 299 | 403 |
| Russia | 57 | 67 | 59 | 67 | 57 | 65 | (1) | (2) | (54) | (219) |
| Croatia | 45 | 40 | 46 | 40 | 45 | 39 | 3 | 2 | 127 | 113 |
| Bulgaria | 25 | 21 | 25 | 21 | 22 | 18 | 3 | 5 | 310 | 490 |
| Romania | 17 | 17 | 17 | 17 | 11 | 10 | 1 | 1 | 248 | 324 |
| Central and Eastern Europe5 | 639 | 948 | 645 | 948 | 407 | 455 | 62 | 63 | 245 | 263 |
| Middle East and North Africa | 120 | 128 | 136 | 128 | 96 | 105 | 11 | 10 | 288 | 312 |
| Global Life | 5 | 3 | 5 | 3 | 1 | – | – | – | –6 | –6 |
| Growth Markets | 4,576 | 4,876 | 4,708 | 4,876 | 1,839 | 1,918 | 220 | 241 | 110 | 125 |
| Consolidation7 | (852) | (740) | (852) | (740) | – | – | 2 | (1) | –6 | –6 |
| Total | 41,659 | 38,472 | 41,831 | 38,472 | 18,141 | 17,538 | 2,293 | 2,458 | 66 | 75 |
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.
4 On 12 July 2013, Allianz 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. 5 Contains income and expense items from a management holding and consolidations
7 Represents elimination of transactions between Allianz Group companies in different geo-
between countries in this region. 6 Presentation not meaningful.
graphic regions.
2 Represents operating profit (loss) divided by the average of the current quarter-end and previous year-end net reserves, where net reserves equal reserves for loss and loss adjustment expenses, reserves for insurance and investment contracts and financial liabilities for unitlinked contracts less reinsurance assets.
3 Statutory premiums adjusted for foreign currency translation and (de-)consolidation effects.
Interim Report Third Quarter and First Nine Months of 2013 Allianz Group
Third quarter 2013
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. We are particularly strong in the United States and growing in Europe and the Asia-Pacific region.
Our operating revenues decreased by €142 mn, or 7.7% to €1,703 mn. This was mainly due to the exceptionally high performance fees in the third quarter of 2012 and unfavorable foreign currency effects. Driven by higher margins, our net fee and commission income excluding performance fees rose by €118 mn despite the unfavorable currency effects. Volatile capital markets contributed to third-party net outflows of €27 bn in the third quarter of 2013.
We recorded an operating profit of €754 mn, a decline of €94 mn, or 11.1%, (internal growth1: (6.5)%) mainly due to lower performance fees.
Our cost-income ratio increased by 1.7 percentage points to 55.7%, largely due to the exceptionally high performance fees in the third quarter of 2012 compared to 2013.
| key figures asset management | A 24 | ||
|---|---|---|---|
| € MN three months ended 30 September |
2013 | 2012 | 2011 |
| Operating revenues | 1,703 | 1,845 | 1,326 |
| Operating profit2, 3 |
754 | 848 | 533 |
| Cost-income ratio2, 3 in % |
55.7 | 54.0 | 59.8 |
| Total assets under manage ment as of 30 September in € bn |
1,811 | 1,827 | 1,592 |
| thereof: Third-party assets under manage ment as of 30 September in € bn |
1,404 | 1,419 | 1,222 |
3 As of the first quarter of 2013, all restructuring charges are presented within operating profit and all prior periods have been reclassified to conform to the current accounting presentation.
As of 30 September 2013, total assets under management amounted to €1,811 bn. Of this, €1,404 bn related to our
third-party assets under management and €407 bn to Allianz group assets. We show the development of total assets under management based on asset classes as they are relevant for the business segment's development.
In the first nine months of 2013, we achieved net inflows of total assets under management of €21 bn. While our Allianz group assets were reduced by €2 bn, we recorded thirdparty net inflows of €23 bn. Prevailing market volatility in the third quarter of 2013, driven by ongoing expectations of rising interest rates, led to an industry-wide continuation of fixed income outflows not only in the United States, but also globally. This development particularly affected PIMCO, with net outflows of €29 bn in traditional fixed income products, whereas AllianzGI saw net inflows of €1 bn.
The development of total assets under management was mainly driven by unfavorable foreign currency translation effects of €42 bn due to the strong depreciation of the U.S. Dollar against the Euro.1
Negative effects on fixed income markets, mostly due to the rising interest rate environment, accounted for a decline of €18 bn in our total assets under management. Of this decline, €35 bn were related to fixed income assets, which were only partly offset by the strong positive market return of €17 bn on equities.
In the following section, we focus on the development of third-party assets under management.
3 "Other" consists of third-party assets managed by other Allianz Group companies (approximately €30 bn as of 30 September 2013 and €28 bn as of 31 December 2012, respectively).
Based on the regional split of third-party assets under management, Europe increased its share by 3.3 percentage points. This was driven by strong organic growth and a reallocation of some third-party assets under management from the United States to Europe. The United States' share of third-party assets under management decreased by 3.1 percentage points due to the reallocation of assets, the depreciation of the U.S. Dollar against the Euro1 as well as slight net outflows.
As of 30 September 2013, the allocation of our third-party assets under management increased by one percentage point in favor of equities, driven by the impact of market return. This resulted in 88% attributable to fixed income and 12% to equities.
The split of third-party assets under management between our retail and institutional clients2 shifted slightly – up one percentage point for retail clients (37%) and one percentage point down for institutional clients (63%).
Outperforming third-party assets under management
Underperforming third-party assets under management
1 The investment performance is based on Allianz Asset Management account-based, assetweighted 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 investment performance of our Asset Management business was excellent, with 88% of our assets outperforming their respective benchmarks (31 December 2012: 92%). Pimco assets recorded an outstanding performance of 93% versus their respective benchmarks, while 53% of our AllianzGI assets outperformed their respective benchmarks.
Operating revenues decreased by €142 mn, or 7.7%. This was driven by a decline in performance fees and negative foreign currency translation effects, which were partly offset by higher margins. On an internal basis3 our operating revenues decreased by 3.3%.
Net fee and commission income went down by €124 mn, or 6.8% to €1,697 mn. The lower level of performance fees more than offset the €144 mn increase in our management fees,
1 Based on the closing rate on the respective balance sheet date. 2 Client group classification is driven by investment vehicle types.
3 Operating revenues adjusted for foreign currency translation and (de-)consolidation effects.
Our income from financial assets and liabilities carried at fair value through income (net) was down by €9 mn due to reduced levels of seed money in the third quarter of 2013.
Our operating revenues rose by €648 mn, or 13.6%, (internal growth1: 16.5%), benefiting from an increase in management fees driven by higher margins, as well as higher average assets under management.
Due to lower personnel expenses in line with our revenue decline, our administrative expenses decreased by €47 mn to €949 mn.
Our cost-income ratio increased by 1.7 percentage points to 55.7%. In the third quarter of 2012 our cost-income ratio largely benefited from the exceptionally high performance fees. Excluding performance fees, the cost-income ratio improved by 2.1 percentage points due to our continued focus on leveraging revenue growth and cost control.
Mainly driven by higher operating revenues, our operating profit increased by €422 mn, or 20.7%, to €2,458 mn (internal growth1: 23.6%).
Our cost-income ratio improved by 2.7 percentage points to 54.7%. In 2012, the cost-income ratio was burdened by €62 mn restructuring charges, compared to €5 mn in 2013.
2013 to 2012 Third quarter comparison Our increased management fees did not fully offset the lower level of performance fees, resulting in an operating profit of €754 mn – a decline of €94 mn, or 11.1% (internal growth1: (6.5)%). Excluding the effect of lower performance
Operating profit
| € MN | ||||
|---|---|---|---|---|
| three months ended 30 September | nine months ended 30 September | |||
| 2013 | 2012 | 2013 | 2012 | |
| Management and loading fees | 2,005 | 1,871 | 6,077 | 5,221 |
| Performance fees | 42 | 284 | 396 | 383 |
| Other | 12 | 27 | 51 | 95 |
| Fee and commission income | 2,059 | 2,182 | 6,524 | 5,699 |
| Commissions | (337) | (327) | (1,062) | (919) |
| Other | (25) | (34) | (59) | (50) |
| Fee and commission expenses | (362) | (361) | (1,121) | (969) |
| Net fee and commission income | 1,697 | 1,821 | 5,403 | 4,730 |
| Net interest income1 | 2 | 10 | 10 | 22 |
| Income from financial assets and liabilities carried at fair value through income (net) |
1 | 10 | 8 | 17 |
| Other income | 3 | 4 | 8 | 12 |
| Operating revenues | 1,703 | 1,845 | 5,429 | 4,781 |
| Administrative expenses (net), excluding acquisition-related expenses |
(949) | (996) | (2,966) | (2,683) |
| Restructuring charges | – | (1) | (5) | (62) |
| Operating expenses | (949) | (997) | (2,971) | (2,745) |
| Operating profit | 754 | 848 | 2,458 | 2,036 |
| Cost-income ratio2 in % | 55.7 | 54.0 | 54.7 | 57.4 |
| 1 Represents interest and similar income less interest expenses. |
2 Represents operating expenses divided by operating revenue.
1 Operating revenues/operating profit adjusted for foreign currency translation and (de-) consolidation effects.
Third quarter 2013
Operating loss decreased by €31 mn to €230 mn, mainly driven by Holding&Treasury.
Corporate and Other encompasses the reportable segments Holding&Treasury, Banking and Alternative Investments. Holding&Treasury includes the management of and support for Allianz Group's 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.
Our operating result improved by €31 mn to a loss of €230 mn. Although all three reportable segments within Corporate &Other contributed to this improvement, Holding&Treasury was the main driver.
| Key figures Corporate and Other1 | A 30 | ||
|---|---|---|---|
| € MN three months ended 30 September |
2013 | 2012 | 2011 |
| Operating revenues | 386 | 396 | 412 |
| Operating expenses2, 3 |
(616) | (657) | (635) |
| Operating result2, 3 |
(230) | (261) | (223) |
| € MN | |||
|---|---|---|---|
| three months ended 30 September | 2013 | 2012 | 2011 |
| Holding & Treasury | |||
| Operating revenues | 82 | 71 | 98 |
| Operating expenses2, 3 |
(321) | (335) | (323) |
| Operating result2, 3 |
(239) | (264) | (225) |
| Banking | |||
| Operating revenues | 257 | 293 | 278 |
| Operating expenses2, 3, 4 |
(253) | (293) | (287) |
| Operating result2, 3 |
4 | 0 | (9) |
| Alternative Investments | |||
| Operating revenues | 47 | 34 | 39 |
| Operating expenses2, 3 |
(42) | (31) | (29) |
| Operating result2, 3 |
5 | 3 | 10 |
1 Consolidation included. For further information about our Corporate and Other business segment, please refer to note 4 to the condensed consolidated interim financial statements.
2 Prior period figures have been restated to reflect the retrospective application of the amended standard IAS 19 – Employee Benefits, effective as of 1 January 2013. For further information, please refer to note 2 to the condensed consolidated interim financial statements.
3 As of the first quarter of 2013, all restructuring charges are presented within operating profit and all prior periods have been adjusted to conform to the current accounting presentation. 4 Include loan loss provisions.
Our operating loss decreased by €25 mn to €239 mn due to various substantially offsetting effects.
Our operating income from financial assets and liabilities carried at fair value through income recovered from a loss of €7 mn to a gain of €13 mn, mainly due to foreign currency effects.
Holding&Treasury's net interest result increased by €10 mn to a loss of €37 mn. Our interest and similar income decreased by €12 mn to €46 mn, driven by lower interest yields and less income from associates. This decrease was more than offset by €22 mn lower interest expenses, excluding interest expenses from external debt, which amounted to €83 mn, as yields and internal borrowing diminished.
Our net fee and commission result worsened from €(35) mn to €(45) mn due to new IT projects.
Administrative expenses (net), excluding acquisition-related expenses, grew by €24 mn to €178 mn, mainly due to higher pension costs as a result of lower discount rates.
Investment expenses were down by €8 mn to €18 mn.
During the third quarter of 2013 we reduced a restructuring provision related to our global delivery centers project by €26 mn.
Our operating loss improved by €11 mn to €683 mn. An increased net interest result and higher operational income from financial assets and liabilities carried at fair value through income almost offset higher administrative expenses due to higher personnel expenses and a decrease in our net fee and commission result. The operating result benefited from income from the above-mentioned reduction of a restructuring provision. A resumption of interest payments on our silent participation in Commerzbank in the first quarter as well as lower interest expenses for internal debt due to lower yields and volume also contributed to this positive development.
The operating result improved to €4 mn. Lower administrative expenses more than offset a slight decrease in the net interest, fee and commission result and higher loan loss provisions.
Administration expenses decreased by €20 mn to €109 mn as a result of the closure of the Allianz Bank's business operations.
Our net interest, fee and commission result decreased from €138 mn to €129 mn. Our net interest result was down by €5 mn to €84 mn, mainly because of the low interest yield environment. Our net fee and commission income contracted by €4 mn to €45 mn. The effects of the closure of the Allianz Bank's business operations could only be partly compensated for by higher fee and commission income in Italy due to new business.
Our loan loss provisions increased from €13 mn to €18 mn. This increase was mainly related to our ship financing business.
Our operating loss worsened by €44 mn to €80 mn. The ninemonth development of our Banking segment was mainly driven by €90 mn higher restructuring charges related to the closure of the Allianz Bank's business operations, which were only partly offset by lower loan loss provisions. In this context, it is worth mentioning again that our restructuring charges have been presented within operating profit since the beginning of 2013. Excluding these charges, the operating profit in Banking would have recovered from a loss of €36 mn in the first nine months of 2012 to a profit of €10 mn.
Our operating result increased by €2 mn to €5 mn.
Our operating result improved by €5 mn to €20 mn, driven by higher net fee and commission income.
As 2013 draws to a close, the global economic picture is getting somewhat clearer. The improvement in the global purchasing managers' index for the manufacturing sector in the course of the third quarter raises hopes that the pickup in economic activity will continue or even intensify well into next year. Particularly encouraging is the fact that the more upbeat mood is now broadly spread across all regions. Overall global output is expected to grow moderately by 2.3% this year. Given the expected acceleration in the industrialized world, we see global output increasing by slightly more than 3.0% in 2014. Fears that the economic development in the emerging markets would deteriorate substantially now look unfounded. Although they have lost steam since last year and will not return to their pre-crisis growth rates. However, with an expected increase in real GDP of between 4.5% and 5.0% both this year and next, growth in these countries will still be considerably higher than in the industrialized world. After one and a half years, the Eurozone economy finally emerged from recession in the second quarter of 2013. Real GDP grew by 0.3% in a quarter-on-quarter comparison. The economy is also starting to get back on its feet in crisis-ridden member states, narrowing the "northsouth divide". Both sentiment indices and hard economic indicators such as industrial production data suggest the economic recovery in the Eurozone is set to continue well into 2014, albeit at a moderate pace. For 2014 as a whole, we envisage real GDP growth of 1.5%, following a contraction of 0.3% this year. Supported by brighter economic conditions in the single currency zone, the German economy could expand by about 0.6% in 2013 and by 2.0% next year. Against the background of modest growth perspectives worldwide and taking into account the dire unemployment situation in many industrialized countries – which dampens wage pressure – inflation is likely to remain subdued on a global level both this year and next.
Like 2013, next year will be a challenging one – for financial markets in particular. We expect to see a gradual exit from the crisis mode in monetary policy, led by the U.S. central bank reining in its asset purchases. Nevertheless, given its concerns about money market rates, banking liquidity and loan growth, the European Central Bank might even slightly ease its monetary stance – despite the slow recovery in the Eurozone – before it eventually starts its exit from the very expansionary policy stance in late 2014. Although monetary policy would still remain highly accommodative, first steps towards an exit could well be accompanied by pronounced swings in equity, bonds or currency markets – as we witnessed this summer following the rumblings about an imminent Federal Reserve exit from quantitative easing. In mid-September, the Federal Reserve decided that economic conditions did not yet allow for the reining in of asset purchases to begin. Since then, yields on German and U.S. government bonds have retreated somewhat from their peaks of 2.0% and 3.0%, respectively, prior to the Federal Reserve decision. Spreads on government bonds from the Eurozone periphery have continued to narrow. Although recurring political turmoil in several debt-ridden countries has shown that the debt crisis in the Eurozone is not yet over, we expect it to continue to gradually abate. 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 merely to 2.5% and slightly above 3.0%, respectively by the end of 2014. With growth in the United States set to outpace that in the Eurozone and the expectation that the Federal Reserve will exit from its expansionary monetary policy earlier than the European Central Bank, the U.S. Dollar is likely to appreciate against the Euro.
1 The information presented in the sections Economic outlook, Insurance industry outlook and Asset management industry outlook is based on our own estimates.
A Interim Group Management Report
Despite a difficult backdrop – the recent slowdown in emerging markets, U.S. budgetary woes and the far-fromresolved Eurozone sovereign debt crisis – we expect economic growth to accelerate in the remainder of 2013 and particularly in 2014. This is good news for insurance markets. However, the rebound in industrialized countries will remain modest. In Western Europe, after two consecutive years of falling premiums, we expect to see a stabilization in 2013 followed by a moderate upturn in 2014. The U.S. market should also continue its slow upswing. On the other hand, although the economic signals from emerging markets remain mixed, overall they point to a somewhat more spritely growth momentum. As a consequence, top-line growth in emerging markets will continue to be significantly above the levels seen in advanced markets – however, the expansion might be moderate by their standards. Against this background, we forecast that insurance profits will stay under pressure as the effects of a lower investment yield environment as well as volatile financial markets take their toll. However, in the longer term there is the potential for growth and improved earnings should interest rates and yields increase.
In the property-casualty sector, relatively stable premium growth should continue both in the remainder of 2013 and in 2014. However, while growth in the prior year was mainly driven by rising premium rates, for the rest of 2013 and 2014 the main motor will be the expected uptick in economic activity, which bolsters demand for insurance coverage. In the emerging markets, rising household incomes and heightened risk awareness will continue to drive stronger premium growth for the foreseeable future, with emerging Asia and Latin America being the most vibrant markets. Globally, we expect nominal premium revenue to climb in the 3.0–5.0% range per annum in 2013 and 2014.
Life sector premium levels, particularly in Europe, have suffered from unfavorable market conditions in recent years. In 2013, we expect premium growth to recover across the board. However, not until 2014 will all markets start to advance. Western Europe will remain the weakest region in terms of growth, with some markets still shrinking. Resumed growth will go hand in hand with a changing business mix, which is set to evolve towards more attractive unit-linked and protection business if interest rates stay at their low levels – as anticipated. On the other hand, growth in emerging markets – which is driven by higher incomes and the rising demand for social protection – is likely to stay at an elevated level. Again emerging Asia and Latin America are the growth champions. All in all, we expect that global nominal premium revenue will rise in the 4.0–6.0% range per annum in 2013 and 2014.
The outlook for the asset management industry for 2013 and beyond remains uncertain. Although there are signs of a slow recovery in the global economy and of a gradually receding European sovereign debt crisis – helped by massive liquidity support from major central banks – financial markets in developed countries are still plagued by uncertainty and capital markets are expected to stay vulnerable to potential setbacks in the near future.
The sharp rise in yields on U.S. Treasuries this summer was a timely reminder of the high uncertainty surrounding the unwinding of quantitative easing. Therefore, net inflows are expected to stay volatile as investors are likely to remain cautious, shifting their funds between high- and low-risk assets as sentiment ebbs and flows.
The upside potential for market-driven growth in the asset management industry will be limited in both the fixed income and equity areas for as long as GDP growth rates in major developed countries continue to lag behind longterm trends.
Besides the uncertainty in the investment climate, the wave of regulatory change – particularly in the consumer protection and transparency fields – will put further pressure on the industry and may even trigger changes in business models and the way funds are sold. Furthermore, complying with increased regulatory oversight and reporting requirements risks pushing up operational costs, amplifying the need for strict cost control. Fierce competition between money managers is only going to increase. Given this batch of challenges, we expect the industry's profitability to remain under pressure.
In such an environment, money managers' ability to grow is dependent on achieving above benchmark investment results, offering diverse and comprehensive investment products and upping the scale and efficiency of their operations.
We are confident about staying on course towards profitable growth during the remainder of 2013. Following our strong operating performance, we expect the 2013 full year operating profit to be slightly above €9.7 BN, the upper end of our previously stated target range.
As we witnessed in the first nine months, unfavorable developments in the business environment can have adverse impacts on aspects of our performance. In addition, we have already experienced a windstorm in October hitting parts of Europe, and implementing certain of our business and operational strategies – e.g. review of the product strategy in Korea and IT investments, like our data center consolidation project – may negatively impact operating profit in the near term. It would therefore be inappropriate to simply annualize the current nine months' operating profit and net income to arrive at an expected result for the full year.
In addition, natural catastrophes and factors stated in our cautionary note regarding forward-looking statements may severely affect the results of our operations.
The statements contained herein may include prospects, statements of future expectations and other forward-looking statements that are based on management's current views and assumptions and involve known and unknown risks and uncertainties. Actual results, performance or events may differ materially from those expressed or implied in such forward-looking statements.
Such deviations may arise due to, without limitation, (i) changes of the general economic conditions and competitive situation, particularly in the Allianz Group's core business and core markets, (ii) performance of financial markets (particularly market volatility, liquidity and credit events) (iii) frequency and severity of insured loss events, including from natural catastrophes, and the development of loss expenses, (iv) mortality and morbidity levels and trends, (v) persistency levels, (vi) particularly in the banking business, the extent of credit defaults, (vii) interest rate levels, (viii) currency exchange rates including the Euro/U.S. Dollar exchange rate, (ix) changes in laws and regulations, including tax regulations, (x) the impact of acquisitions, including related integration issues, and reorganization measures, and (xi) general competitive factors, in each case on a local, regional, national and/or global basis. Many of these factors may be more likely to occur, or more pronounced, as a result of terrorist activities and their consequences.
The company assumes no obligation to update any information or forward-looking statement contained herein, save for any information required to be disclosed by law.
Paid-in-capital Retained earnings (include foreign currency effects) Unrealized gains/losses (net)
As of 30 September 2013, shareholders' equity amounted to €48,770 mn, a decrease of €1,618 mn compared to 31 December 2012 (as restated).1 The €4,740 mn net income attributable to shareholders in the first nine months of 2013 was more than offset by a €3,348 mn decrease in unrealized gains – predominantly on debt securities – due to a rise in interest rates and, to a much lesser extent, realizations as well as the payout of dividends in May 2013 of €2,039 mn. An
additional €830 mn drop in equity from negative foreign currency translation adjustments was mainly attributable to the appreciation of the Euro against the U.S. Dollar, Australian Dollar and Turkish Lira.
The Allianz Group is a financial conglomerate within the scope of the E.U. Financial Conglomerates Directive and the related German law in force since 2005. The law requires that financial conglomerates calculate the capital available to meet their solvency requirements on a consolidated basis, which we refer to as "eligible capital".
Solvency ratio Eligible capital Requirement
1 Off-balance sheet reserves are accepted by the authorities as eligible capital only upon request. Allianz SE has not submitted an application so far. Excluding off-balance sheet reserves, the solvency ratio as of 30 September 2013 would be 168% (30 June 2013: 168%; 31 December 2012 (pro forma restated): 171%, 31 December 2012 (as published): 188%).
Compared to 30 June 2013 our conglomerate solvency ratio remained strong at 177%. However, compared to 31 December 2012 (as published), the ratio dropped from 197% to 177%. The Group's eligible capital for solvency purposes decreased by €3.6 bn to €44.8 bn, including off-balance sheet reserves of €2.3 bn (31 December 2012: €2.2 bn). Of this, €4.0 bn was related to amendments to IAS 19, effective from 1 January 2013. The redemption of a subordinated bond led to a further decline of €1.5 bn. These effects could only be partially compensated for by our net income of €2.8 bn net of €1.9 bn assumed dividends (reflecting our target payout ratio of 40%) in the first nine months of 2013. The required funds went up by €0.7 bn to €25.3 bn, due to higher aggregate policy reserves in Life/Health and growth in our Asset Management business. As of 30 September 2013, our eligible capital exceeded the minimum legally stipulated level by €19.5 bn.
In the following sections, we show the asset allocation for our insurance portfolio and analyze important developments in the balance sheets of our segments.
As of 30 September 2013, total assets amounted to €704.6 bn and total liabilities were €653.2 bn. Compared to year-end 2012, total assets and total liabilities increased by €10.2 bn and €11.7 bn, respectively.
This section mainly focuses on our financial investments in debt instruments, equities, real estate and cash and other as well as our insurance reserves and external financing, since these reflect the major developments in our balance sheet.
The government bond yield convergence observed in the preceding quarter continued but slowed somewhat in the third quarter of 2013. 10-year German and U.S. government bond yields increased by 5 bps and 14 bps in the third quarter, respectively, whereas Spanish and Italian government bond yields declined over the same period by 42 bps and 11 bps, respectively.
Major equity markets showed an upward trend in the third quarter and the first nine months of 2013. Representative German and U.S. stock indices recorded all-times highs during the third quarter.
Compared to year-end 2012, credit spreads for A-rated debtors in the Eurozone and the United Stated widened slightly but narrowed again since the end of the second quarter.
1 Prior period figures have been restated to reflect the retrospective application of the amended standard IAS 19 – Employee Benefits, effective as of 1 January 2013. For further information, please refer to note 2 to the condensed consolidated interim financial statements.
The Allianz Group's investment portfolio is mainly determined by our core business of insurance. The following portfolio overview covers the insurance segments and the non-banking assets of the Corporate and Other segment.
Compared to 31 December 2012, our investment portfolio decreased by €0.8 bn to €506.7 bn. Declines in the fair values of bonds as a result of interest rate rises were almost offset by reinvestments and market-driven increases in equity values.
Our gross exposure to equities increased from €29.6 bn to €32.1 bn, but still accounted for 6% of our investment portfolio. Realizations were more than offset by positive market developments in the first nine months of 2013. Our equity gearing – a ratio of our equity holdings allocated to the shareholder after policyholder participation and hedges to shareholders' equity plus off-balance sheet reserves less goodwill – increased one percentage point to 24%.
Compared to 31 December 2012, our exposure to real estate held for investment increased by €0.5 bn to €10.2 bn due to new investments.
Debt instruments represent the vast majority (90%) of our investment portfolio, amounting to €456.1 bn as of 30 September 2013. Compared to year-end, our debt instruments decreased by €4.7 bn, primarily driven by declines in the fair values of bonds as a result of rising interest rates. About 95% of our portfolio of debt instruments1 was invested in investment-grade bonds and loans.
1 Excluding self-originated private retail mortgage loans. For 2%, no ratings were available.
Total fixed income portfolio as of 30 September 2013: €456.1 bn [as of 31 December 2012: €460.8 bn] in %
The allocation of our fixed income portfolio remained stable, with a slight increase in corporate bonds driven by additional investments in 2013.
Our government bond exposure was largely unchanged at €173.3 bn (31 December 2012: €174.2 bn) – representing 38% of our fixed income portfolio. Declines in fair values, driven by market effects, were roughly offset by reinvested interest payments. Our sovereign exposure in Italy and Spain equaled 6.2% and 0.5% of our fixed income portfolio, respectively. The corresponding unrealized gains (gross) amounted to €1,250 mn in Italy and €109 mn in Spain. Our government bond exposure in Portugal remained limited and we reduced substantially all our remaining exposure in Greece and Ireland until the end of the first quarter.
Our covered bonds decreased by €4.3 bn to €102.2 bn and accounted for 22% of our fixed income portfolio. Of this, 49% was allocated to German Pfandbriefe, backed by either public sector loans or mortgage loans. Another 16% and 9% of the covered bonds portfolio were allocated 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.
We reduced our exposure to subordinated securities in banks from €6.7 bn to €4.8 bn in both Tier 1 and Tier 2 shares. Asset-backed securities (ABS) were €17.8 bn (31 December 2012: €19.5 bn), which represents 4% of our fixed income portfolio. The €1.7 bn decrease was mainly due to sales of mortgage-backed securities (MBS) issued by U.S. agencies held within our U.S. Life/Health segment. These MBS are backed by the U.S. government, and represent 15% of our ABS securities. In total, 75% of our ABS was related to MBS and 98% of the total ABS portfolio received investment grade ratings, with 87% rated "AA" or better (31 December 2012: 88%).
| € mn | |||||
|---|---|---|---|---|---|
| three months ended 30 September |
nine months ended 30 September |
||||
| 2013 | 2012 | 2013 | 2012 | ||
| Interest and similar income (net)1 |
5,035 | 5,092 | 15,402 | 15,472 | |
| Income from financial assets and liabilities carried at fair value through income (net) |
(562) | (139) | (1,487) | (229) | |
| Realized gains/losses (net) | 690 | 735 | 3,027 | 3,038 | |
| Impairments of investments (net) |
(162) | (101) | (478) | (711) | |
| Investment expenses | (228) | (230) | (653) | (643) | |
| Net investment income | 4,773 | 5,357 | 15,811 | 16,927 | |
1 Net of interest expenses (excluding interest expenses from external debt).
Our net investment income decreased from €5,357 mn to €4,773 mn. This was mainly due to a €423 mn deterioration in our income from financial assets and liabilities carried at fair value through income (net) and to a lesser extent due to higher impairments and lower interest and similar income.
Income from financial assets and liabilities carried at fair value through income (net) worsened by €423 mn to a loss of €562 mn. This was mainly due to losses from the net of foreign currency translation effects and financial derivatives that are used to protect against equity and foreign currency fluctuations as well as to manage duration and other interest rate-related exposures, mainly within our German Life/Health business. In the third quarter of 2013, the appreciation of the Euro against selective emerging markets currencies was the main driver.
Realized gains and losses (net) were down by €45 mn to €690 mn. Lower realized gains on equities were only partly offset by increased realized gains on debt securities.
Our interest and similar income (net)1 decreased by only 1.1% to €5,035 mn as higher income from equities and real estate partially offset lower income from debt instruments, which overall held up well in a low-yield environment. The net interest result also benefited from reduced interest expenses.
Investment expenses (net) remained stable at €228 mn.
Our net investment income was down by €1,116 mn to €15,811 mn. This was substantially driven by the decline in our net income from financial assets and liabilities carried at fair value through income.
Our income from financial assets and liabilities carried at fair value through income (net) dropped from €(229) mn to €(1,487) mn. This was mainly due to foreign currency impacts, in particular within our German Life/Health business. In addition, €180 mn of the decrease relates to income from The Hartford warrants recorded in the first quarter of 2012, which were sold in April 2012.
Impairments (net) fell from €711 mn to €478 mn as the previous year had a high burden of impairments of financial sector assets.
Interest and similar income (net)1, realized gains and losses (net) and investment expenses (net) were roughly stable.
The business segment's asset base decreased by €2.5 bn to €102.8 bn. A slight increase in equities was more than offset by a reduction in loans and advances to banks and customers and debt securities.
| Composition of asset base – fair values1 | ||
|---|---|---|
| as of 30 September 2013 |
as of 31 December 2012 |
|
| 0.4 | 0.3 | |
| 0.1 | 0.2 | |
| – | – | |
| 0.5 | 0.5 | |
| 4.6 | 3.9 | |
| 68.3 | 69.8 | |
| 5.3 | 5.1 | |
| 7.6 | 7.7 | |
| 85.8 | 86.5 | |
| 16.5 | 18.3 | |
| 102.8 | 105.3 | |
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 September 2013 and 31 December 2012, respectively.
As of 30 September 2013, ABS of €3.5 bn represented 3.4% of the business segment's asset base.
1 Net of interest expenses (excluding interest expenses from external debt).
a Loss and loss adjustment expenses paid in current year relating to previous years
b Loss and loss adjustment expenses incurred in previous years
d Reserves for loss and loss adjustment expenses in current year
c Foreign currency translation adjustments and other changes, changes in the consolidated subsidiaries of the Allianz Group and reclassifications
Reserves net Reserves ceded Changes
1 After group consolidation. 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.
Compared to 31 December 2012, the business segment's gross reserves for loss and loss adjustment expenses decreased by €4.7 bn to €58.0 bn as of 30 September 2013. On a net basis, our reserves totaled €51.6 bn, down by €4.2 bn compared to year-end. A reclassification effect due to changes in our presentation contributed €2.9 bn to the decrease. Effective from 1 January 2013, the Allianz Group changed its presentation of discounted loss reserves in the consolidated balance sheet from the line item "Reserves for loss and loss adjustment expenses" to the line item "Reserves for insurance and investment contracts".1 Foreign currency translation effects amounted to €(0.8) bn. Excluding both effects, the net reserves declined by €0.5 bn.
The asset base of our Life/Health business segment increased 1.7% to €480.1 bn. A decrease in loans and advances to banks and customers was more than offset by increased financial assets for unit-linked contracts and equities as well as higher cash and cash pool assets.
| € bn | ||
|---|---|---|
| as of 30 September 2013 |
as of 31 December 2012 |
|
| Financial assets and liabilities carried at fair value through income |
||
| Equities | 2.2 | 2.1 |
| Debt securities | 2.3 | 2.3 |
| Other1 | (3.9) | (3.5) |
| Subtotal | 0.6 | 0.9 |
| Investments2 | ||
| Equities | 26.2 | 24.1 |
| Debt securities | 266.1 | 266.4 |
| Cash and cash pool assets3 | 7.6 | 5.7 |
| Other | 9.4 | 9.9 |
| Subtotal | 309.3 | 306.1 |
| Loans and advances to banks and customers |
91.5 | 94.1 |
| Financial assets for unit-linked contracts4 |
78.7 | 71.2 |
| Life/Health asset base | 480.1 | 472.3 |
liability option) of €(5.4) bn and €(5.2) bn as of 30 September 2013 and 31 December 2012, respectively.
2 These do not include affiliates of €0.8 bn and €0.7 bn as of 30 September 2013 and 31 December 2012, respectively.
3 Including cash and cash equivalents, as stated in our business segment balance sheet, of €7.1 bn and €5.6 bn and receivables from cash pooling amounting to €2.3 bn and €2.6 bn, net of liabilities from securities lending and derivatives of €(1.7) bn and €(1.5) bn, as well as liabilities from cash pooling of €(0.1) bn and €(1.0) bn as of 30 September 2013 and 31 December 2012, 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 unitlinked contracts in our balance sheet corresponds to the value of financial liabilities for unitlinked 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.
As of 30 September 2013, ABS investments within our Life/ Health asset base amounted to €13.8 bn, representing 2.9% of its asset base.
1 For further information on the changes in presentation, please refer to note 2 to the condensed consolidated interim financial statements.
a Change in unit-linked insurance contracts
Financial assets for unit-linked contracts increased by €7.5 bn – or 10.5% – to €78.7 bn. Unit-linked insurance contracts increased by €4.9 bn to €53.8 bn due to good fund performance (€3.5 bn) and premium inflows exceeding outflows by €2.7 bn. Unit-linked investment contracts increased by €4.0 bn to €24.9 bn, with premium inflows significantly exceeding outflows (net €2.3 bn). The main drivers of currency effects were the weaker U.S. Dollar (€(0.6) bn) and Asian currencies (€(0.7) bn).1
Life/Health reserves for insurance and investment contracts increased by €5.0 bn – or 1.3% – in the first nine months of 2013. The €10.4 bn growth in aggregate policy reserves was mainly driven by our operations in Germany (€7.0 bn), the United States (€0.8 bn before currency effects), Luxembourg (€0.6 bn), Switzerland (€0.5 bn before currency effects) and Belgium (€0.4 bn). Reserves for premium refund decreased by €3.1 bn due to lower unrealized gains to be shared with policyholders. The currency impact was driven by the weaker U.S. Dollar (€(1,4) bn), Asian currencies (€(0.6) bn) and the Swiss Franc (€(0.2) bn).1
1 Based on the closing rate of the respective balance sheet dates.
Our Asset Management business segment's results are derived primarily from third-party asset management. In this section, we refer only to the segment's own assets.1
The main components of the Asset Management business segment's asset base were cash and cash pool assets and debt securities. The segment's asset base increased by €0.6 bn to €4.4 bn compared to year-end. This increase was driven by higher cash and cash pool assets.
Liabilities in our Asset Management business segment remained unchanged at € 4.4 bn.
As of 30 September 2013, our Corporate and Other business segment's asset base amounted to €40.6 bn, a decrease of €1.4 bn compared to 31 December 2012. This decline was driven by a decrease in cash and cash pool assets and to a lesser extent by lower equities, partly offset by higher loans and advances to banks and customers.
| € bn | ||
|---|---|---|
| as of 30 September 2013 |
as of 31 December 2012 |
|
| Financial assets and liabilities carried at fair value through income |
||
| Equities | – | – |
| Debt securities | – | – |
| Other1 | (0.3) | (0.2) |
| Subtotal | (0.3) | (0.2) |
| Investments2 | ||
| Equities | 1.4 | 1.7 |
| Debt securities | 23.8 | 23.8 |
| Cash and cash pool assets3 | (2.5) | (0.4) |
| Other | 0.3 | 0.2 |
| Subtotal | 23.0 | 25.3 |
| Loans and advances to banks and customers |
17.9 | 16.9 |
| Corporate and Other asset base | 40.6 | 42.0 |
1 This comprises assets of €0.2 bn and €0.2 bn and liabilities of €(0.5) bn and €(0.4) bn as of 30 September 2013 and 31 December 2012, respectively.
1.2% of the Corporate and Other business segment's asset base was comprised of ABS, which amounted to €0.5 bn.
Participation certificates and subordinated liabilities decreased by €1.5 bn to €10.0 bn as Allianz SE called for redemption and repaid a subordinated bond with a nominal amount of U.S. Dollar 2.0 bn and a coupon of 8.375% in the second quarter. Certificated liabilities were down by €0.9 bn to €13.8 bn. Other liabilities increased from €21.8 bn to €22.8 bn.2
2 For further information on Allianz SE debt as of 30 September 2013, please refer to notes 18 and 19 to the condensed consolidated interim financial statements.
2 These do not include affiliates of €75.3 bn and €74.3 bn as of 30 September 2013 and 31 December 2012, respectively.
3 Including cash and cash equivalents, as stated in our business segment balance sheet, of €2.7 bn and €4.2 bn and receivables from cash pooling amounting to €0.5 bn and €0.2 bn, net of liabilities from securities lending and derivatives of €(0.1) bn and €(0.1) bn, as well as liabilities from cash pooling of €(5.6) bn and €(4.7) bn as of 30 September 2013 and 31 December 2012, respectively.
1 For further information on the development of these third-party assets, please refer to the Asset Management chapter.
| 1. Senior bonds2 | ||
|---|---|---|
| 4.0% bond issued by | ||
| Allianz Finance II B.V., Amsterdam | ||
| Volume | €1.5 BN | |
| Year of issue | 2006 | |
| Maturity date | 11/23/2016 | |
| ISIN | XS 027 588 026 7 | |
| Interest expenses | €46.4 mn | |
| 1.375% bond issued by | ||
| Allianz Finance II B.V., Amsterdam | ||
| Volume | €0.5 bn | |
| Year of issue | 2013 | |
| Maturity date | 3/13/2018 | |
| ISIN | DE000A1HG1J8 | |
| Interest expenses | €4.0 mn | |
| 4.75% bond issued by | ||
| Allianz Finance II B.V., Amsterdam | ||
| Volume | €1.5 BN | |
| Year of issue | 2009 | |
| Maturity date | 7/22/2019 | |
| ISIN | DE 000 A1A KHB 8 |
|
| Interest expenses | €55.1 mn | |
| 3.5% bond issued by | ||
| Allianz Finance II B.V., Amsterdam | ||
| Volume | €1.5 BN | |
| Year of issue | 2012 | |
| Maturity date | 2/14/2022 | |
| ISIN | DE 000 A1G 0RU 9 | |
| Interest expenses | €40.4 mn | |
| 3.0% bond issued by Allianz Finance II B.V., Amsterdam |
||
| Volume | €0.75 bn | |
| Year of issue | 2013 | |
| Maturity date | 3/13/2028 | |
| ISIN | DE000A1HG1K6 | |
| Interest expenses | €13.1 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 | DE000A1HG1L4 | |
| Interest expenses | €22.6 mn | |
| Total interest expenses for senior bonds |
€181.6 mn | |
| 2. Subordinated bonds3 | ||
| 6.5% bond issued by | ||
| Allianz Finance II B.V., Amsterdam | ||
| Volume | €1.0 BN | |
| Year of issue | 2002 | |
| Maturity date | 1/13/2025 | |
| ISIN | XS 015 952 750 5 | |
| Interest expenses | €49.6 mn | |
| 5.75% bond issued by Allianz Finance II B.V., Amsterdam |
||
| Volume | €2.0 BN | |
| Year of issue | 2011 | |
| Maturity date | 7/8/2041 | |
| ISIN | DE 000 A1GNAH 1 |
|
| Interest expenses | €87.1 mn | |
| 5.625% bond issued by Allianz SE | ||
|---|---|---|
| Volume | €1.5 bn | |
| Year of issue | 2012 | |
| Maturity date | 10/17/2042 | |
| ISIN | DE 000 A1RE1Q3 | |
| Interest expenses | €64.4 mn | |
| 5.5% bond issued by Allianz SE | ||
| Volume | €1.5 BN | |
| Year of issue | 2004 | |
| Maturity date | Perpetual Bond | |
| ISIN Interest expenses |
XS 018 716 232 5 | €63.2 mn |
| 4.375% bond issued by | ||
| Allianz Finance II B.V., Amsterdam | ||
| Volume | €1.4 BN | |
| Year of issue | 2005 | |
| Maturity date | Perpetual Bond | |
| ISIN | XS 021 163 783 9 | |
| Interest expenses | €47.4 mn | |
| 5.375% bond issued by | ||
| Allianz Finance II B.V., Amsterdam | ||
| Volume | €0.8 BN | |
| Year of issue | 2006 | |
| Maturity date | Perpetual Bond | |
| ISIN | DE 000 A0G NPZ 3 |
|
| Interest expenses | €32.2 mn | |
| 5.5% bond issued by Allianz SE | ||
| Volume | USD 1.0 BN | |
| Year of issue | 2012 | |
| Maturity date | Perpetual Bond | |
| ISIN | XS 085 787 2500 | |
| Interest expenses | €32.2 mn | |
| Total interest expenses for | ||
| subordinated bonds | €376.1 mn | |
| 3. Issues redeemed in 2013 | ||
| 8.375% bond issued by Allianz SE | ||
| Volume | USD 2.0 BN | |
| Year of issue Maturity date |
2008 Perpetual Bond |
|
| ISIN | US 018 805 200 7 | |
| Interest expenses | €62.6 mn | |
| 4. Issues matured in 2013 | ||
| 5.0% bond issued by | ||
| Allianz Finance II B.V., Amsterdam | ||
| Volume | €1.5 BN | |
| Year of issue | 2008 | |
| Maturity date | 3/6/2013 | |
| ISIN | DE 000 A0T R7K 7 | |
| Interest expenses | €13.5 mn | |
| Sum of interest expenses1 | €633.8 mn | |
| Interest expenses from external debt | ||
| not presented in the table | €46.5 mn |
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. 3 The terms of the subordinated bonds do not explicitly provide for early termination rights in favor of the bondholder. Interest payments are subject to certain conditions which are linked, inter alia, to our net income, and may have to be deferred. Nevertheless, the terms of the relevant bonds provide for alternative settlement mechanisms which allow us to avoid an interest deferral using cash raised from the issuance of specific newly issued instruments.
The previous analysis is based on our condensed consolidated interim financial statements and should be read in conjunction with them. In addition to our stated figures according to the International Financial Reporting Standards (IFRS), the Allianz Group uses operating profit and internal growth to enhance the understanding of our results. These additional measures should be viewed as complementary to, and not as a substitute for, our figures determined according to IFRS.
For further information, please refer to note 4 to the condensed consolidated interim financial statements.
Total revenues comprise statutory gross premiums written in Property-Casualty and Life/Health, operating revenues in Asset Management, and total revenues in Corporate and Other (Banking).
| € mn | ||||||
|---|---|---|---|---|---|---|
| three months ended 30 September | nine months ended 30 September | |||||
| 2013 | 2012 | 2013 | 2012 | |||
| Property-Casualty | ||||||
| Gross premiums written | 10,651 | 11,392 | 36,602 | 36,915 | ||
| Life/Health | ||||||
| Statutory premiums | 12,697 | 11,912 | 41,659 | 38,472 | ||
| Asset Management | ||||||
| Operating revenues | 1,703 | 1,845 | 5,429 | 4,781 | ||
| consisting of: | ||||||
| Net fee and commission income | 1,697 | 1,821 | 5,403 | 4,730 | ||
| Net interest income | 2 | 10 | 10 | 22 | ||
| Income from financial assets and liabilities carried at fair value through income (net) |
1 | 10 | 8 | 17 | ||
| Other income | 3 | 4 | 8 | 12 | ||
| Corporate and Other | ||||||
| Total revenues (Banking) | 132 | 142 | 412 | 438 | ||
| consisting of: | ||||||
| Interest and similar income | 152 | 180 | 463 | 553 | ||
| Income from financial assets and liabilities carried at fair value through income (net) |
2 | 6 | 7 | 13 | ||
| Fee and commission income | 103 | 107 | 348 | 326 | ||
| Interest expenses, excluding interest expenses from external debt | (68) | (91) | (213) | (269) | ||
| Fee and commission expenses | (58) | (58) | (192) | (183) | ||
| Consolidation effects (Banking within Corporate and Other) | 1 | (2) | (1) | (2) | ||
| Consolidation | (39) | (84) | (134) | (150) | ||
| Allianz Group total revenues | 25,144 | 25,207 | 83,968 | 80,456 |
30 Asset Management
36 Outlook 39 Balance Sheet Review 48 Reconciliations
We believe that an understanding of our total revenue performance is enhanced when the effects of foreign currency translation as well as acquisitions and disposals (or "changes in scope of consolidation") are analyzed separately. Accordingly, in addition to presenting nominal total revenue growth, we also present internal total revenue growth, which excludes these effects.
| % | three months ended 30 September 2013 | nine months ended 30 September 2013 | ||||||
|---|---|---|---|---|---|---|---|---|
| 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 | (5.2) | 2.5 | (3.8) | (6.5) | (1.1) | 2.2 | (1.9) | (0.8) |
| Life/Health | 7.3 | 1.1 | (1.8) | 6.6 | 8.7 | 0.3 | (0.7) | 8.3 |
| Asset Management | (3.3) | – | (4.4) | (7.7) | 16.5 | (0.1) | (2.8) | 13.6 |
| Corporate and Other | (7.0) | – | – | (7.0) | (5.9) | – | – | (5.9) |
| Allianz Group | 1.0 | 1.7 | (2.9) | (0.2) | 4.7 | 1.2 | (1.5) | 4.4 |
Pages 51–122
| Consolidated Balance Sheets 53 |
|---|
| ----------------------------------- |
| 94 | 21 Premiums earned (net) |
|---|---|
| 96 | 22 Interest and similar income |
| 96 | 23 Income from financial assets and liabilities carried at fair value through income (net) |
| 98 | 24 Realized gains/losses (net) |
| 99 | 25 Fee and commission income |
| 99 | 26 Other income |
| 100 | 27 Income and expenses from fully consolidated private equity investments |
| 101 | 28 Claims and insurance benefits incurred (net) |
| 103 | 29 Change in reserves for insurance and investment contracts (net) |
| 105 | 30 Interest expenses |
| 105 | 31 Loan loss provisions |
| 106 | 32 Impairments of investments (net) |
| 106 | 33 Investment expenses |
| 107 | 34 Acquisition and administrative expenses (net) |
| 108 | 35 Fee and commission expenses |
| 108 | 36 Other expenses |
| 109 | 37 Income taxes |
| 110 38 |
Fair value measurement | |
|---|---|---|
| ----------- | -- | ------------------------ |
53 Consolidated Balance Sheets
| consolidated balance sheets | B 01 | ||
|---|---|---|---|
| € mn | |||
| Note | as of 30 September 2013 |
as of 31 December 2012 |
|
| ASSETS | |||
| Cash and cash equivalents | 13,069 | 12,437 | |
| Financial assets carried at fair value through income | 5 | 6,921 | 7,283 |
| Investments | 6 | 402,633 | 401,628 |
| Loans and advances to banks and customers | 7 | 118,053 | 119,369 |
| Financial assets for unit-linked contracts | 78,674 | 71,197 | |
| Reinsurance assets | 8 | 13,324 | 13,254 |
| Deferred acquisition costs | 9 | 22,000 | 19,452 |
| Deferred tax assets | 2,194 | 1,526 | |
| Other assets | 10 | 34,105 | 35,196 |
| Non-current assets classified as held for sale | 11 | 354 | 15 |
| Intangible assets | 12 | 13,292 | 13,090 |
| Total assets | 704,619 | 694,447 | |
| LIABILITIES AND EQUITY Financial liabilities carried at fair value through income |
13 | 5,592 | 5,397 |
| Liabilities to banks and customers | 14 | 22,157 | 22,425 |
| Unearned premiums | 20,024 | 17,939 | |
| Reserves for loss and loss adjustment expenses | 15 | 67,850 | 72,540 |
| Reserves for insurance and investment contracts | 16 | 399,265 | 390,985 |
| Financial liabilities for unit-linked contracts | 78,674 | 71,197 | |
| Deferred tax liabilities | 3,616 | 4,035 | |
| Other liabilities | 17 | 37,678 | 37,392 |
| Certificated liabilities | 18 | 8,232 | 7,960 |
| Participation certificates and subordinated liabilities | 19 | 10,081 | 11,614 |
| Total liabilities | 653,169 | 641,484 | |
| Shareholders' equity | 48,770 | 50,388 | |
| Non-controlling interests | 2,680 | 2,575 | |
| Total equity | 20 | 51,450 | 52,963 |
| Total liabilities and equity | 704,619 | 694,447 | |
| € mn | three months ended | nine months ended | ||||
|---|---|---|---|---|---|---|
| 30 September | 30 September | |||||
| Note | 2013 | 2012 | 2013 | 2012 | ||
| Gross premiums written | 16,693 | 17,231 | 55,346 | 55,057 | ||
| Ceded premiums written | (978) | (1,552) | (3,675) | (4,466) | ||
| Change in unearned premiums | 922 | 715 | (2,071) | (1,955) | ||
| Premiums earned (net) | 21 | 16,637 | 16,394 | 49,600 | 48,636 | |
| Interest and similar income | 22 | 5,129 | 5,214 | 15,708 | 15,834 | |
| Income from financial assets and liabilities carried at fair value through income (net) |
23 | (562) | (139) | (1,487) | (229) | |
| Realized gains/losses (net) | 24 | 690 | 735 | 3,027 | 3,038 | |
| Fee and commission income | 25 | 2,584 | 2,629 | 8,017 | 7,059 | |
| Other income | 26 | 42 | 49 | 144 | 158 | |
| Income from fully consolidated private equity investments | 27 | 181 | 197 | 543 | 590 | |
| Total income | 24,701 | 25,079 | 75,552 | 75,086 | ||
| Claims and insurance benefits incurred (gross) | (12,268) | (12,751) | (37,327) | (37,642) | ||
| Claims and insurance benefits incurred (ceded) | 394 | 720 | 1,843 | 1,931 | ||
| Claims and insurance benefits incurred (net) | 28 | (11,874) | (12,031) | (35,484) | (35,711) | |
| Change in reserves for insurance and investment contracts (net) | 29 | (3,247) | (3,514) | (10,417) | (10,872) | |
| Interest expenses | 30 | (300) | (355) | (986) | (1,105) | |
| Loan loss provisions | 31 | (18) | (13) | (47) | (101) | |
| Impairments of investments (net) | 32 | (162) | (101) | (478) | (711) | |
| Investment expenses | 33 | (228) | (230) | (653) | (643) | |
| Acquisition and administrative expenses (net) | 34 | (5,581) | (5,574) | (16,872) | (16,275) | |
| Fee and commission expenses | 35 | (788) | (729) | (2,354) | (2,099) | |
| Amortization of intangible assets | (29) | (91) | (86) | (147) | ||
| Restructuring charges | 16 | (13) | (84) | (160) | ||
| Other expenses | 36 | (28) | (25) | (82) | (69) | |
| Expenses from fully consolidated private equity investments | 27 | (185) | (201) | (555) | (647) | |
| Total expenses | (22,424) | (22,877) | (68,098) | (68,540) | ||
| Income before income taxes | 2,277 | 2,202 | 7,454 | 6,546 | ||
| Income taxes | 37 | (746) | (749) | (2,447) | (2,304) | |
| Net income | 1,531 | 1,453 | 5,007 | 4,242 | ||
| Net income attributable to: | ||||||
| Non-controlling interests | 86 | 94 | 267 | 254 | ||
| Shareholders | 1,445 | 1,359 | 4,740 | 3,988 | ||
| Basic earnings per share (€) | 39 | 3.19 | 3.00 | 10.46 | 8.81 | |
| Diluted earnings per share (€) | 39 | 3.14 | 2.98 | 10.33 | 8.77 | |
€ mn three months ended 30 September nine months ended 30 September 2013 2012 2013 2012 Net income 1,531 1,453 5,007 4,242 Other comprehensive income Items that may be reclassified to profit and loss in future periods Foreign currency translation adjustments Reclassifications to net income – – – – Changes arising during the period (644) (127) (880) 313 Subtotal (644) (127) (880) 313 Available-for-sale investments Reclassifications to net income (138) (129) (695) (271) Changes arising during the period 346 2,808 (2,631) 5,077 Subtotal 208 2,679 (3,326) 4,806 Cash flow hedges Reclassifications to net income 11 – 10 (1) Changes arising during the period 2 39 (60) 67 Subtotal 13 39 (50) 66 Share of other comprehensive income of associates Reclassifications to net income – – – – Changes arising during the period (27) 7 (42) 12 Subtotal (27) 7 (42) 12 Miscellaneous Reclassifications to net income – – – – Changes arising during the period (9) 33 79 124 Subtotal (9) 33 79 124 Items that may never be reclassified to profit and loss Actuarial gains and losses on defined benefit plans (see note 2) (111) (981) (135) (1,216) Total other comprehensive income (570) 1,650 (4,354) 4,105 Total comprehensive income 961 3,103 653 8,347 Total comprehensive income attributable to: Non-controlling interests 58 144 226 422 Shareholders 903 2,959 427 7,925
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 2012, as previously reported |
28,763 | 13,522 | (1,996) | 4,626 | 44,915 | 2,338 | 47,253 |
| Adjustments (see note 2) | – | (1,457) | (1) | – | (1,458) | (48) | (1,506) |
| Balance as of 1 January 2012, as reported |
28,763 | 12,065 | (1,997) | 4,626 | 43,457 | 2,290 | 45,747 |
| Total comprehensive income1 | – | 2,873 | 300 | 4,752 | 7,925 | 422 | 8,347 |
| Paid-in capital | – | – | – | – | – | – | – |
| Treasury shares | – | 13 | – | – | 13 | – | 13 |
| Transactions between equity holders |
– | (62) | 9 | 3 | (50) | (120) | (170) |
| Dividends paid | – | (2,037) | – | – | (2,037) | (155) | (2,192) |
| Balance as of 30 September 2012 |
28,763 | 12,852 | (1,688) | 9,381 | 49,308 | 2,437 | 51,745 |
| Balance as of 1 January 2013, as previously reported |
28,815 | 16,689 | (2,073) | 10,122 | 53,553 | 2,665 | 56,218 |
| Adjustments (see note 2) | – | (3,165) | – | – | (3,165) | (90) | (3,255) |
| Balance as of 1 January 2013, as reported |
28,815 | 13,524 | (2,073) | 10,122 | 50,388 | 2,575 | 52,963 |
| Total comprehensive income1 | – | 4,606 | (830) | (3,349) | 427 | 226 | 653 |
| Paid-in capital | – | – | – | – | – | – | – |
| Treasury shares | – | 4 | – | – | 4 | – | 4 |
| Transactions between equity holders |
– | (11) | – | 1 | (10) | 120 | 110 |
| Dividends paid | – | (2,039) | – | – | (2,039) | (241) | (2,280) |
| Balance as of 30 September 2013 |
28,815 | 16,084 | (2,903) | 6,774 | 48,770 | 2,680 | 51,450 |
1 Total comprehensive income in shareholders' equity for the nine months ended 30 September 2013 comprises net income attributable to shareholders of €4,740 mn (2012: €3,988 mn).
56 Interim Report Third Quarter and First Nine Months of 2013 Allianz Group
56 Consolidated Statements of Changes in Equity
| condensed consolidated statements of cash flows | B 05 | |
|---|---|---|
| € mn nine months ended 30 September |
2013 | 2012 |
| Summary | ||
| Net cash flow provided by operating activities | 20,051 | 17,004 |
| Net cash flow used in investing activities | (15,288) | (13,035) |
| Net cash flow used in financing activities | (3,978) | (2,471) |
| Effect of exchange rate changes on cash and cash equivalents | (153) | 70 |
| Change in cash and cash equivalents | 632 | 1,568 |
| Cash and cash equivalents at beginning of period | 12,437 | 10,492 |
| Cash and cash equivalents at end of period | 13,069 | 12,060 |
| Cash flow from operating activities | ||
| Net income | 5,007 | 4,242 |
| Adjustments to reconcile net income to net cash flow provided by operating activities | ||
| Share of earnings from investments in associates and joint ventures | (110) | (95) |
| 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 |
(2,549) | (2,327) |
| Other investments, mainly financial assets held for trading and designated at fair value through income | 1,016 | 396 |
| Depreciation and amortization | 807 | 802 |
| Loan loss provisions | 47 | 101 |
| Interest credited to policyholder accounts | 3,471 | 3,042 |
| Net change in: | ||
| Financial assets and liabilities held for trading | (199) | (1,646) |
| Reverse repurchase agreements and collateral paid for securities borrowing transactions | 491 | 84 |
| Repurchase agreements and collateral received from securities lending transactions | 303 | 686 |
| Reinsurance assets | (700) | (652) |
| Deferred acquisition costs | (553) | (311) |
| Unearned premiums | 2,402 | 2,383 |
| Reserves for loss and loss adjustment expenses | (243) | 2,008 |
| Reserves for insurance and investment contracts | 7,737 | 8,490 |
| Deferred tax assets/liabilities | 296 | (65) |
| Other (net) | 2,828 | (134) |
| Subtotal | 15,044 | 12,762 |
| Net cash flow provided by operating activities | 20,051 | 17,004 |
| condensed consolidated statements of cash flows | B 05 | |
|---|---|---|
| € mn | ||
| nine months ended 30 September | 2013 | 2012 |
| Cash flow from investing activities | ||
| Proceeds from the sale, maturity or repayment of: | ||
| Financial assets designated at fair value through income | 1,159 | 1,723 |
| Available-for-sale investments | 86,896 | 94,675 |
| Held-to-maturity investments | 424 | 510 |
| Investments in associates and joint ventures | 231 | 214 |
| Non-current assets classified as held for sale | 26 | 196 |
| Real estate held for investment | 259 | 135 |
| Loans and advances to banks and customers (purchased loans) | 7,324 | 8,348 |
| Property and equipment | 126 | 157 |
| Subtotal | 96,445 | 105,958 |
| Payments for the purchase or origination of: | ||
| Financial assets designated at fair value through income | (658) | (805) |
| Available-for-sale investments | (101,630) | (109,200) |
| Held-to-maturity investments | (176) | (842) |
| Investments in associates and joint ventures | (630) | (268) |
| Non-current assets classified as held for sale | – | (225) |
| Real estate held for investment | (813) | (400) |
| Loans and advances to banks and customers (purchased loans) | (5,682) | (4,683) |
| Property and equipment | (1,065) | (1,038) |
| Subtotal | (110,654) | (117,461) |
| Business combinations: | ||
| Proceeds from sale of subsidiaries, net of cash disposed | 75 | – |
| Acquisitions of subsidiaries, net of cash acquired | (380) | 22 |
| Change in other loans and advances to banks and customers (originated loans) | (1,136) | (1,597) |
| Other (net) | 362 | 43 |
| Net cash flow used in investing activities | (15,288) | (13,035) |
| Cash flow from financing activities | ||
| Net change in liabilities to banks and customers | (411) | 70 |
| Proceeds from the issuance of certificated liabilities, participation certificates and subordinated liabilities | 4,316 | 6,200 |
| Repayments of certificated liabilities, participation certificates and subordinated liabilities | (5,568) | (6,262) |
| Cash inflow from capital increases | – | – |
| Transactions between equity holders | 3 | (170) |
| Dividends paid to shareholders | (2,280) | (2,192) |
| Net cash from sale or purchase of treasury shares | 8 | 13 |
| Other (net) | (46) | (130) |
| Net cash flow used in financing activities | (3,978) | (2,471) |
| Supplementary information to the condensed consolidated statements of cash flows Income taxes paid |
(2,346) | (1,357) |
| Dividends received | 1,083 | 923 |
| Interest received | 14,533 | 14,821 |
| Interest paid | (1,045) | (1,182) |
56 Consolidated Statements of Changes in Equity
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, condensed 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 2013. See note 2 for further details.
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 generally consistent with the accounting policies that have been applied in the preparation of the consolidated financial statements for the year ended 31 December 2012. See note 2 for further details. These condensed consolidated interim financial statements should be read in conjunction with the audited consolidated financial statements included in the Allianz Group Annual Report 2012.
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 (€), unless otherwise stated.
These condensed consolidated interim financial statements of the Allianz Group were authorized for issue by the Board of Management on 7 November 2013.
2 – Recently adopted accounting pronouncements and changes in the presentation of the condensed consolidated interim financial statements
recently adopted accounting pronouncements effective 1 January 2013
The amendments eliminate the corridor approach and require all actuarial gains and losses to be recognized immediately in other comprehensive income (OCI). While all remeasurements need to be recognized in OCI, service and interest costs have to be recognized in the profit and loss account. The long-term return on plan assets has to be calculated using the same interest rate used to discount the defined benefit obligation (DBO).
The amendments to IAS 19 are applied retrospectively.
The following table presents the impacts of the adoption of the amendments to IAS 19 on the consolidated balance sheet.
| € mn | As | Amend | |
|---|---|---|---|
| previously | ments to | As | |
| as of 31 December 2012 | reported | IAS 19 | reported |
| Deferred tax assets | 1,270 | 256 | 1,526 |
| Other assets | 35,626 | (430) | 35,196 |
| Total assets | 694,621 | (174) | 694,447 |
| Reserves for insurance and | |||
| investment contracts | 390,987 | (2) | 390,985 |
| Deferred tax liabilities | 5,169 | (1,134) | 4,035 |
| Other liabilities | 33,175 | 4,217 | 37,392 |
| Total liabilities | 638,403 | 3,081 | 641,484 |
| Shareholders' equity | 53,553 | (3,165) | 50,388 |
| Non-controlling interests | 2,665 | (90) | 2,575 |
| Total equity | 56,218 | (3,255) | 52,963 |
| Total liabilities and equity | 694,621 | (174) | 694,447 |
The impact of the adoption of the amendments to IAS 19 on the consolidated income statement for the three and the nine months ended 30 September 2012 led to a €20 mn and €55 mn decrease in acquisition and administrative expenses (net) and a €5 mn and €16 mn increase in income taxes. This resulted in a 3 cent and an 8 cent increase in earnings per share for the three and the nine months ended 30 September 2012. For the year ended 31 December 2012, the adoption led to an increase in income before income taxes of €88 mn and an increase in income taxes of €21 mn. This resulted in an increase in the earnings per share of 14 cents.
The impact on the total other comprehensive income was €(984) mn and €(1,217) mn for the three and the nine months ended 30 September 2012 and €(1,816) mn for the year ended 31 December 2012.
The impact on the condensed consolidated statements of cash flows is immaterial.
In addition to the amendments to IAS 19 Employee Benefits, the following new standard, amendments and revisions to existing standards became effective for the Allianz Group's consolidated financial statements as of 1 January 2013:
The Allianz Group adopted the new standard, the revisions and amendments as of 1 January 2013, with no material impact on its financial results or financial position.
Effective 1 January 2013, the Allianz Group prospectively changed its presentation of discounted loss reserves in the consolidated balance sheet from the line item "Reserves for loss and loss adjustment expenses" to the line item "Reserves for insurance and investment contracts". In the consolidated income statement, the unwinding of the discounted loss reserves is now presented in "Change in reserves for insurance and investment contracts (net)".
The Allianz Group believes this change in presentation results in information that is more relevant to the economic decision-making needs of users of financial statements as it better reflects the nature of the reserves in the financial statements. In addition, the key performance indicator "combined ratio" reflects the net underwriting result.
| CHANGE OF CONSOLIDATED BALANCE SHEET RELATING |
|
|---|---|
| TO CHANGE IN PRESENTATION OF DISCOUNTED LOSS RESER VES |
B 07 |
| € mn as of 30 September 2013 |
Before change in presen tation |
Change in presen tation |
As reported |
|---|---|---|---|
| Reserves for loss and loss adjustment expenses |
71,065 | (3,215) | 67,850 |
| Reserves for insurance and investment contracts |
396,050 | 3,215 | 399,265 |
| Total liabilities | 653,169 | – | 653,169 |
€ mn three months ended 30 September 2013 nine months ended 30 September 2013 Before change in presentation Change in presentation As reported Before change in presentation Change in presentation As reported Claims and insurance benefits incurred (net) (11,897) 23 (11,874) (35,554) 70 (35,484) Change in reserves for insurance and investment contracts (net) (3,224) (23) (3,247) (10,347) (70) (10,417) Net income 1,531 – 1,531 5,007 – 5,007 Loss ratio in % 67.4 (0.2) 67.2 67.0 (0.2) 66.8 Combined ratio in % 95.0 (0.2) 94.8 95.2 (0.2) 95.0
The Allianz Group has changed the presentation of policyholders' account deposits and withdrawals in its condensed consolidated statements of cash flows from cash flow from financing activities to cash flow from operating activities. The change in presentation has been applied retrospectively.
The Allianz Group believes this change in presentation results in information that is more relevant to the economic decision-making needs of users of financial statements as those cash flows relate to the insurance activities of Allianz Group. The change in presentation results in a consistent presentation of all cash flows from insurance activities as cash flows from operating activities.
The following table presents the impact of the change in presentation of policyholders' account deposits and withdrawals on the condensed consolidated statements of cash flows.
| CHANGE OF condensed CONSOLIDATED RELATING TO CHANGE IN PRESENTATION ACCOUNT DEPOSITS AND WITHDRA WALS |
STATEMENT OF POLICY |
OF CAS H FLOWS HOLDERS ' |
B 09 |
|---|---|---|---|
| € mn | |||
| As | Change in | ||
| nine months ended | previously | presen | As |
| 30 September 2012 | reported | tation | reported |
| Net cash flow provided by operating activities |
15,907 | 1,097 | 17,004 |
| Net cash flow used in financing activities |
(1,374) | (1,097) | (2,471) |
| Cash and cash equivalents at end of period |
12,060 | – | 12,060 |
Certain prior-period amounts have been reclassified to conform to the current period presentation.
On 12 July 2013, Allianz acquired Yapı Kredi Bank's 93.94% shareholding in the Turkish property-casualty insurance company Yapı Kredi Sigorta, including its life and pension insurance subsidiary Yapı Kredi Emeklilik. Yapı Kredi Bank ultimately retains a 20% stake in Yapı Kredi Emeklilik to support the long-term strategic partnership with Allianz. This transaction is consistent with Allianz's strategy to access growth through strategic relationships in high-growth insurance markets. The consideration paid, net of proceeds received from the sale of the Yapı Kredi Emeklilik stake to Yapı Kredi Bank, amounted to €639 MN (TrY 1,603 MN), while the total gross consideration paid in cash to Yapı Kredi Bank amounted to €714 MN (TrY1,791 MN). Through the year 2013, acquisition-related expenses in the amount of approximately €5 MN were included in administrative expenses until the authorization of the condensed consolidated interim financial statements.
The following two tables summarize the consideration transferred, the recognized amounts of assets acquired and liabilities assumed as well as the determination of goodwill:
| € mn | Fair value |
|---|---|
| Consideration transferred | |
| Cash paid for 93.94% Yapı Kredi Sigorta shares | 714 |
| Cash received for sale of 19.93% Yapı Kredi Emeklilik stake | (75) |
| Total consideration transferred | 639 |
| Identifiable assets acquired and liabilities assumed | |
| Cash and cash equivalents (excluding 19.93% Yapı Kredi Emeklilik sale) |
334 |
| Investments | 247 |
| Loans and advances to banks and customers | 7 |
| Financial assets for unit-linked contracts | 1,612 |
| Reinsurance assets | 133 |
| Deferred acquisition costs (pvfp) | 214 |
| Other assets | 197 |
| Intangible assets | 232 |
| Unearned premiums | (264) |
| Reserves for loss and loss adjustment expenses | (174) |
| Reserves for insurance and investment contracts | (193) |
| Financial liabilities for unit-linked contracts | (1,612) |
| Deferred tax liabilities | (82) |
| Other liabilities | (127) |
| Total net identifiable assets | 524 |
| Yapı Kredi Sigorta A.Ş. and Yapı Kredi Emeklilik A.Ş. – Determination of goodwill |
B 11 |
|---|---|
| € mn | Fair value |
| Goodwill recognition | |
| Total consideration transferred | 639 |
| Total net identifiable assets | 524 |
| Non-controlling interests1 | (107) |
| Goodwill | 222 |
1 Based on their proportionate interest in the recognized amounts of the assets and liabilities of the acquiree.
Comprehensive Income 56 Consolidated Statements of Changes in Equity
Goodwill from the transaction amounted to €222 MN and primarily reflects anticipated growth opportunities in the Turkish insurance market. The impact of Yapı Kredi Sigorta and Yapı Kredi Emeklilik on the Allianz Group's total revenues and net income for the three months ended 30 September 2013 was €213 MN and €13 MN, respectively. The gross premiums written, total revenues and net income of the combined entity (Allianz Group including Yapı Kredi Sigorta and Yapı Kredi Emeklilik) for the nine months ended 30 September 2013 would have been €55,728 MN, €84,770 MN and €5,032 MN, respectively, if the acquisition date was 1 January 2013.
As a result of the purchase of shares representing 93.94% of the share capital of Yapı Kredi Sigorta on 12 July 2013, after confirmation by the Turkish Capital Market Board, Allianz SE made a mandatory tender offer of TrY 18.8114 per share for the remaining shares of Yapı Kredi Sigorta. On 14 October 2013, Allianz SE started the purchases. As of today, Allianz SE has purchased shares in the amount of €35 MN. The value of the remaining shares that could be acquired during the mandatory tender offer is approx. €8 MN.
On 21 June 2013, the Allianz Group acquired the assets and assumed the liabilities of the Taiwan branch of HSBC Life (International) Limited as part of the regional cooperation with HSBC and integrated it into Allianz Taiwan. The total consideration paid in cash amounted to €14 mn.
The following table summarizes the consideration transferred and amounts recognized for major classes of identifiable assets acquired and liabilities assumed:
| € mn | |
|---|---|
| Fair value | |
| Consideration transferred | |
| Cash consideration transferred | 14 |
| Purchase price adjustment | (14) |
| Total consideration transferred | – |
| Identifiable assets acquired and liabilities assumed | |
| Cash and cash equivalents | 6 |
| Investments | 69 |
| Loans and advances to banks and customers | 3 |
| Financial assets for unit-linked contracts | 35 |
| Deferred acquisition costs | 15 |
| Reserves for insurance and investment contracts | (90) |
| Financial liabilities for unit-linked contracts | (35) |
| Deferred tax liabilities | (2) |
| Other liabilities | (1) |
| Total net identifiable assets | – |
The impact of the acquisition of the HSBC Taiwan Life branch on the total revenues and net income of the Allianz Group since the acquisition date as well as if the acquisition date had been 1 January 2013, was not material.
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 Property-Casualty and Life/Health categories. In accordance with the responsibilities of the Board of Management, each of the insurance categories 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 reportable segments derive revenue are described below.
In the Property-Casualty category, 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 Life/Health category, 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 fixed income 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 nonoperating 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 Consolidation. For the reportable segment Asset Management, interest revenues are reported net of interest expenses.
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:
Against this general rule, the following exceptions apply:
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 2013, all restructuring charges are presented within operating profit. This change does not impact recognition and measurement of the restructuring charges, shareholders' equity and net income.
| Life/Health | |||
|---|---|---|---|
| as of 30 September 2013 |
as of 31 December 2012 |
as of 30 September 2013 |
as of 31 December 2012 |
| 3,593 | 2,707 | 7,107 | 5,574 |
| 563 | 624 | 6,021 | 6,150 |
| 89,657 | 90,168 | 302,554 | 301,111 |
| 16,455 | 18,331 | 91,450 | 94,080 |
| – | – | 78,674 | 71,197 |
| 8,621 | 8,432 | 4,727 | 4,858 |
| 4,422 | 4,323 | 17,420 | 14,990 |
| 1,123 | 1,096 | 260 | 245 |
| 20,859 | 21,633 | 16,235 | 16,753 |
| 90 | – | 263 | 12 |
| 2,541 | 2,336 | 2,671 | 2,207 |
| 147,924 | 149,650 | 527,382 | 517,177 |
| Property-Casualty |
| € mn |
|---|
| Property-Casualty Life/Health |
| as of as of as of as of 30 September 31 December 30 September 31 December |
| 2013 2012 2013 2012 |
| LIABILITIES AND EQUITY |
| Financial liabilities carried at fair value through income 79 100 5,448 5,255 |
| Liabilities to banks and customers 1,419 1,146 2,217 1,972 |
| Unearned premiums 17,222 15,328 2,810 2,618 |
| Reserves for loss and loss adjustment expenses 58,044 62,711 9,813 9,854 |
| Reserves for insurance and investment contracts 13,401 10,174 386,050 380,993 |
| Financial liabilities for unit-linked contracts – – 78,674 71,197 |
| Deferred tax liabilities 2,177 2,562 2,561 3,276 |
| Other liabilities 15,200 16,887 13,988 14,107 |
| Certificated liabilities 12 25 12 – |
| Participation certificates and subordinated liabilities – – 95 95 |
| Total liabilities 107,554 108,933 501,668 489,367 |
| Group | Consolidation | Corporate and Other | Asset Management | ||||
|---|---|---|---|---|---|---|---|
| 31 December | as of 30 September 2013 |
as of 31 December 2012 |
as of 30 September 2013 |
as of 31 December 2012 |
as of 30 September 2013 |
as of 31 December 2012 |
as of 30 September 2013 |
| 12,437 | 13,069 | (1,567) | (2,425) | 4,209 | 2,751 | 1,514 | 2,043 |
| 7,283 | 6,921 | (360) | (417) | 170 | 183 | 699 | 571 |
| 401,628 | 402,633 | (90,849) | (91,447) | 100,082 | 100,705 | 1,116 | 1,164 |
| 119,369 | 118,053 | (10,333) | (8,264) | 16,896 | 17,947 | 395 | 465 |
| 78,674 | – | – | – | – | – | – | |
| 13,324 | (36) | (24) | – | – | – | – | |
| 22,000 | – | – | – | – | 139 | 158 | |
| 2,194 | (2,289) | (1,396) | 2,217 | 2,024 | 257 | 183 | |
| 34,105 | (11,076) | (10,814) | 5,570 | 5,394 | 2,316 | 2,431 | |
| 354 | – | – | 3 | 1 | – | – | |
| 13,292 | – | – | 1,140 | 772 | 7,407 | 7,308 | |
| 704,619 | (116,510) | (114,787) | 130,287 | 129,777 | 13,843 | 14,323 |
| Group | Consolidation | Corporate and Other | Asset Management | ||||
|---|---|---|---|---|---|---|---|
| as of 31 December 2012 |
as of 30 September 2013 |
as of 31 December 2012 |
as of 30 September 2013 |
as of 31 December 2012 |
as of 30 September 2013 |
as of 31 December 2012 |
as of 30 September 2013 |
| 5,397 | 5,592 | (361) | (416) | 403 | 481 | – | – |
| 22,425 | 22,157 | (4,882) | (4,764) | 22,791 | 21,894 | 1,398 | 1,391 |
| 17,939 | 20,024 | (7) | (8) | – | – | – | – |
| 72,540 | 67,850 | (25) | (7) | – | – | – | – |
| 390,985 | 399,265 | (182) | (186) | – | – | – | – |
| 71,197 | 78,674 | – | – | – | – | – | – |
| 4,035 | 3,616 | (2,289) | (1,395) | 312 | 152 | 174 | 121 |
| 37,392 | 37,678 | (18,135) | (17,190) | 21,753 | 22,757 | 2,780 | 2,923 |
| 7,960 | 8,232 | (6,740) | (5,602) | 14,675 | 13,810 | – | – |
| 11,614 | 10,081 | (64) | (64) | 11,569 | 10,036 | 14 | 14 |
| 641,484 | 653,169 | (32,685) | (29,632) | 71,503 | 69,130 | 4,366 | 4,449 |
| 52,963 | 51,450 | Total equity | |||||
| 694,447 | 704,619 | Total liabilities and equity |
| € mn | Property-Casualty | Life/Health | ||
|---|---|---|---|---|
| three months ended 30 September | 2013 | 2012 | 2013 | 2012 |
| Total revenues1 | 10,651 | 11,392 | 12,697 | 11,912 |
| Premiums earned (net) | 10,768 | 10,804 | 5,869 | 5,643 |
| Operating investment result | ||||
| Interest and similar income | 885 | 922 | 4,128 | 4,166 |
| Operating income from financial assets and liabilities carried at fair value through income (net) |
(34) | (20) | (537) | (120) |
| Operating realized gains/losses (net) | 14 | 32 | 541 | 596 |
| Interest expenses, excluding interest expenses from external debt | (9) | (11) | (16) | (21) |
| Operating impairments of investments (net) | (1) | (1) | (25) | (68) |
| Investment expenses | (88) | (75) | (198) | (189) |
| Subtotal | 767 | 847 | 3,893 | 4,364 |
| Fee and commission income | 318 | 277 | 166 | 135 |
| Other income | 10 | 10 | 31 | 31 |
| Claims and insurance benefits incurred (net) | (7,233) | (7,482) | (4,643) | (4,550) |
| Change in reserves for insurance and investment contracts (net)2 | (106) | (108) | (3,139) | (3,422) |
| Loan loss provisions | – | – | – | – |
| Acquisition and administrative expenses (net), | ||||
| excluding acquisition-related expenses | (2,976) | (2,915) | (1,322) | (1,301) |
| Fee and commission expenses | (295) | (259) | (61) | (57) |
| Restructuring charges | (10) | (6) | – | (6) |
| Other expenses | (7) | (6) | (25) | (22) |
| Reclassification of tax benefits | – | – | – | – |
| Operating profit (loss) | 1,236 | 1,162 | 769 | 815 |
| Non-operating investment result | ||||
| Non-operating income from financial assets and liabilities carried at fair value through income (net) |
(7) | 7 | 7 | 2 |
| Non-operating realized gains/losses (net) | 78 | 45 | 28 | (26) |
| Non-operating impairments of investments (net) | (130) | (14) | (4) | (4) |
| Subtotal | (59) | 38 | 31 | (28) |
| Income from fully consolidated private equity investments (net) | – | – | – | – |
| Interest expenses from external debt | – | – | – | – |
| Acquisition-related expenses | – | – | – | – |
| Amortization of intangible assets | (16) | (7) | (5) | – |
| Reclassification of tax benefits | – | – | – | – |
| Non-operating items | (75) | 31 | 26 | (28) |
| Income (loss) before income taxes | 1,161 | 1,193 | 795 | 787 |
| Income taxes | (365) | (371) | (233) | (248) |
| Net income (loss) | 796 | 822 | 562 | 539 |
| Net income (loss) attributable to: | ||||
| Non-controlling interests | 35 | 50 | 24 | 26 |
| Shareholders | 761 | 772 | 538 | 513 |
1 Total revenues comprise statutory gross premiums written in Property-Casualty and Life/ Health, operating revenues in Asset Management and total revenues in Corporate and Other (Banking).
2 For the three months ended 30 September 2013, includes expenses for premium refunds (net) in Property-Casualty of €(48) mn (2012: €(52) mn).
| Asset Management | Corporate and Other | Consolidation | Group | ||||
|---|---|---|---|---|---|---|---|
| 2013 | 2012 | 2013 | 2012 | 2013 | 2012 | 2013 | 2012 |
| 1,703 | 1,845 | 132 | 142 | (39) | (84) | 25,144 | 25,207 |
| – | – | – | – | – | (53) | 16,637 | 16,394 |
| 9 | 13 | 202 | 241 | (95) | (128) | 5,129 | 5,214 |
| 1 | 10 | 15 | (3) | (7) | 6 | (562) | (127) 628 |
| – | – | – | – | 1 | – | 556 | (122) |
| (7) | (3) | (152) | (196) | 90 | 109 | (94) | |
| – | – | – | – | – | 24 | (26) | (230) |
| – 3 |
– 20 |
(20) 45 |
(26) 16 |
78 67 |
60 71 |
(228) 4,775 |
|
| 2,059 | 2,182 | 170 | 153 | (129) | (118) | 2,584 | |
| 3 | 4 | (1) | 5 | (1) | (1) | 42 | |
| – | – | – | – | 2 | 1 | (11,874) | (12,031) |
| – | – | – | – | (2) | 16 | (3,247) | (3,514) |
| – | – | (18) | (13) | – | – | (18) | |
| (949) | (996) | (326) | (313) | (7) | (7) | (5,580) | (5,532) |
| (362) | (361) | (126) | (108) | 56 | 56 | (788) | |
| – | (1) | 26 | – | – | – | 16 | |
| – | – | – | (1) | 4 | 4 | (28) | |
| – | – | – | – | – | 5 | – | |
| 754 | 848 | (230) | (261) | (10) | (26) | 2,519 | |
| – | – | (7) | (24) | 7 | 3 | – | |
| 1 | – | 26 | 88 | 1 | – | 134 | |
| – | – | (2) | (38) | – | – | (136) | |
| 1 | – | 17 | 26 | 8 | 3 | (2) | |
| – | – | (5) | (10) | 1 | 6 | (4) | |
| – | – | (206) | (233) | – | – | (206) | |
| – | (40) | (1) | (2) | – | – | (1) | |
| (6) | (11) | (1) | (97) | (1) | 24 | (29) | |
| – | – | – | – | – | (5) | – | |
| (5) | (51) | (196) | (316) | 8 | 28 | (242) | |
| 749 | 797 | (426) | (577) | (2) | 2 | 2,277 | |
| (267) | (275) | 119 | 140 | – | 5 | (746) | |
| 482 | 522 | (307) | (437) | (2) | 7 | 1,531 | |
| 23 | 15 | 4 | 3 | – | – | 86 | |
| € mn | ||||
|---|---|---|---|---|
| Property-Casualty | Life/Health | |||
| nine months ended 30 September | 2013 | 2012 | 2013 | 2012 |
| Total revenues1 | 36,602 | 36,915 | 41,659 | 38,472 |
| Premiums earned (net) | 31,459 | 31,151 | 18,141 | 17,538 |
| Operating investment result | ||||
| Interest and similar income | 2,704 | 2,837 | 12,573 | 12,651 |
| Operating income from financial assets and liabilities carried at fair value through income (net) |
(61) | (25) | (1,467) | (487) |
| Operating realized gains/losses (net) | 44 | 46 | 2,158 | 2,396 |
| Interest expenses, excluding interest expenses from external debt | (31) | (33) | (56) | (62) |
| Operating impairments of investments (net) | (9) | (15) | (219) | (334) |
| Investment expenses | (233) | (212) | (581) | (542) |
| Subtotal | 2,414 | 2,598 | 12,408 | 13,622 |
| Fee and commission income | 915 | 858 | 474 | 393 |
| Other income | 29 | 27 | 111 | 110 |
| Claims and insurance benefits incurred (net) | (21,030) | (21,483) | (14,459) | (14,229) |
| Change in reserves for insurance and investment contracts (net)2 | (318) | (264) | (10,068) | (10,653) |
| Loan loss provisions | – | – | – | – |
| Acquisition and administrative expenses (net), excluding acquisition-related expenses |
(8,861) | (8,589) | (4,048) | (4,075) |
| Fee and commission expenses | (843) | (799) | (191) | (175) |
| Restructuring charges | (13) | (88) | (2) | (10) |
| Other expenses | (18) | (16) | (73) | (63) |
| Reclassification of tax benefits | – | – | – | – |
| Operating profit (loss) | 3,734 | 3,395 | 2,293 | 2,458 |
| Non-operating investment result | ||||
| Non-operating income from financial assets and liabilities carried at fair value through income (net) |
7 | (55) | 15 | 19 |
| Non-operating realized gains/losses (net) | 463 | 411 | 86 | (13) |
| Non-operating impairments of investments (net) | (181) | (180) | (14) | (31) |
| Subtotal | 289 | 176 | 87 | (25) |
| Income from fully consolidated private equity investments (net) | – | – | – | – |
| Interest expenses from external debt | – | – | – | – |
| Acquisition-related expenses | – | – | – | – |
| Amortization of intangible assets | (24) | (23) | (10) | (2) |
| Reclassification of tax benefits | – | – | – | – |
| Non-operating items | 265 | 153 | 77 | (27) |
| Income (loss) before income taxes | 3,999 | 3,548 | 2,370 | 2,431 |
| Income taxes | (1,185) | (1,073) | (706) | (760) |
| Net income (loss) | 2,814 | 2,475 | 1,664 | 1,671 |
| Net income (loss) attributable to: | ||||
| Non-controlling interests | 123 | 139 | 67 | 69 |
| Shareholders | 2,691 | 2,336 | 1,597 | 1,602 |
1 Total revenues comprise statutory gross premiums written in Property-Casualty and Life/ Health, operating revenues in Asset Management and total revenues in Corporate and Other (Banking).
2 For the nine months ended 30 September 2013, includes expenses for premium refunds (net) in Property-Casualty of €(148) mn (2012: €(103) mn).
| Group | Consolidation | Corporate and Other | Asset Management | ||||
|---|---|---|---|---|---|---|---|
| 2013 | 2012 | 2013 | 2012 | 2013 | 2012 | 2013 | |
| (150) 83,968 |
(134) | 438 | 412 | 4,781 | 5,429 | ||
| (53) 49,600 |
– | – | – | – | – | ||
| (441) 15,708 |
(290) | 750 | 691 | 37 | 30 | ||
| 5 (1,490) |
(4) | 17 | 34 | 17 | 8 | ||
| 2,168 | 3 | (34) | – | – | – | – | |
| (306) | 335 | 274 | (587) | (473) | (15) | (20) | |
| (207) | 24 | 21 | – | – | – | – | |
| (653) | 185 | 220 | (74) | (59) | – | – | |
| 111 15,220 |
187 | 106 | 193 | 39 | 18 | ||
| 8,017 | (367) | (409) | 476 | 513 | 5,699 | 6,524 | |
| 144 | 3 | (4) | 6 | – | 12 | 8 | |
| 1 (35,484) |
5 | – | – | – | – | ||
| 45 (10,417) |
(31) | – | – | – | – | ||
| (47) | – | – | (101) | (47) | – | – | |
| 21 (16,830) |
12 | (885) | (967) | (2,683) | (2,966) | ||
| 159 (2,354) |
170 | (315) | (369) | (969) | (1,121) | ||
| (84) | – | – | – | (64) | (62) | (5) | |
| (82) | 12 | 11 | (2) | (2) | – | – | |
| – | 15 | – | – | – | – | – | |
| 7,683 | (53) | (59) | (715) | (743) | 2,036 | 2,458 | |
| 3 | (5) | 5 | 285 | (24) | – | – | |
| 859 | – | (5) | 195 | 314 | – | 1 | |
| (271) | – | – | (174) | (76) | (1) | – | |
| (5) 591 |
– | 306 | 214 | (1) | 1 | ||
| (34) | 7 | (23) | (19) | – | – | ||
| – | – | (743) | (680) | – | – | ||
| (12) | – | – | (5) | (1) | (59) | (41) | |
| (680) | 21 | (112) | (54) | (34) | (19) | ||
| (42) | |||||||
| (86) | 24 | ||||||
| – | (15) | – | – | – | – | – | |
| (229) | (30) | 28 | (577) | (540) | (94) | (59) | |
| 7,454 | (83) | (31) | (1,292) | (1,283) | 1,942 | 2,399 | |
| 12 (2,447) |
3 | 213 | 302 | (696) | (861) | ||
| 5,007 | (71) | (28) | (1,079) | (981) | 1,246 | 1,538 | |
| 267 | – | – | 10 | 6 | 36 | 71 |
B 15
€ mn
| German Speaking Countries | Western&Southern Europe | Iberia&Latin America | ||||
|---|---|---|---|---|---|---|
| three months ended 30 September | 2013 | 2012 | 2013 | 2012 | 2013 | 2012 |
| Gross premiums written | 2,361 | 2,361 | 2,359 | 2,042 | 1,022 | 1,067 |
| Ceded premiums written | (411) | (427) | (160) | (152) | (165) | (153) |
| Change in unearned premiums | 520 | 488 | 315 | 277 | 88 | 23 |
| Premiums earned (net) | 2,470 | 2,422 | 2,514 | 2,167 | 945 | 937 |
| Interest and similar income | 276 | 295 | 220 | 199 | 47 | 51 |
| Operating income from financial assets and liabilities carried at fair value through income (net) |
(23) | 2 | – | 2 | 2 | 1 |
| Operating realized gains/losses (net) | 14 | 32 | – | – | – | – |
| Fee and commission income | 51 | 34 | 6 | 5 | – | – |
| Other income | 6 | 8 | 2 | 2 | – | – |
| Operating revenues | 2,794 | 2,793 | 2,742 | 2,375 | 994 | 989 |
| Claims and insurance benefits incurred (net) | (1,876) | (1,702) | (1,522) | (1,375) | (653) | (635) |
| Change in reserves for insurance and investment contracts (net) | (95) | (97) | (11) | – | (1) | – |
| Interest expenses | (3) | (17) | (3) | (3) | (1) | (4) |
| Operating impairments of investments (net) | (1) | (1) | – | – | – | – |
| Investment expenses | (29) | (24) | (24) | (19) | (3) | (4) |
| Acquisition and administrative expenses (net) | (649) | (653) | (668) | (560) | (242) | (245) |
| Fee and commission expenses | (48) | (36) | (9) | (4) | – | – |
| Restructuring charges | (3) | (7) | (1) | (3) | – | 1 |
| Other expenses | (5) | (5) | (1) | – | – | – |
| Operating expenses | (2,709) | (2,542) | (2,239) | (1,964) | (900) | (887) |
| Operating profit (loss) | 85 | 251 | 503 | 411 | 94 | 102 |
| Non-operating income from financial assets and liabilities | ||||||
| carried at fair value through income (net) | (4) | (5) | 2 | 15 | – | – |
| Non-operating realized gains/losses (net) | 34 | 21 | 35 | (6) | (1) | (46) |
| Non-operating impairments of investments (net) | (5) | (6) | (117) | (7) | (1) | – |
| Amortization of intangible assets | (1) | (1) | (12) | (1) | – | (1) |
| Non-operating items | 24 | 9 | (92) | 1 | (2) | (47) |
| Income (loss) before income taxes | 109 | 260 | 411 | 412 | 92 | 55 |
| Income taxes | (30) | (114) | (150) | (148) | (32) | (18) |
| Net income (loss) | 79 | 146 | 261 | 264 | 60 | 37 |
| Net income (loss) attributable to: | ||||||
| Non-controlling interests | (2) | 1 | 6 | 5 | 1 | 2 |
| Shareholders | 81 | 145 | 255 | 259 | 59 | 35 |
| Loss ratio1 in % | 75.9 | 70.3 | 60.5 | 63.5 | 69.1 | 67.8 |
| Expense ratio2 in % | 26.3 | 26.9 | 26.6 | 25.8 | 25.6 | 26.1 |
| Combined ratio3 in % | 102.2 | 97.2 | 87.1 | 89.3 | 94.7 | 93.9 |
1 Represents claims and insurance benefits incurred (net) divided by premiums earned (net) 2 Represents acquisition and administrative expenses (net) divided by premiums earned (net). 3 Represents the total of acquisition and administrative expenses (net) and claims and insurance benefits incurred (net) divided by premiums earned (net).
4 Presentation not meaningful.
| B 16 |
|---|
| USA | Global Insurance Lines& Anglo Markets |
Growth Markets | Allianz Worldwide Partners |
Property-Casualty | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| 2013 | 2012 | 2013 | 2012 | 2013 | 2012 | 2013 | 2012 | 2013 | 2012 | 2013 | 2012 |
| 653 | 1,615 | 3,803 | 3,940 | 795 | 752 | 600 | 545 | (942) | (930) | 10,651 | 11,392 |
| (32) | (636) | (866) | (744) | (155) | (182) | (13) | (8) | 943 | 930 | (859) | (1,372) |
| (13) | (55) | 63 | (3) | (31) | 17 | 35 | 37 | (1) | – | 976 | 784 |
| 608 | 924 | 3,000 | 3,193 | 609 | 587 | 622 | 574 | – | – | 10,768 | 10,804 |
| 59 | 53 | 238 | 290 | 40 | 43 | 7 | 9 | (2) | (18) | 885 | 922 |
| 1 | (1) | (15) | (20) | 1 | (4) | – | (34) | (20) | |||
| – | – | – | – | – | – | – | 14 | 32 | |||
| – | – | 143 | 139 | 19 | 15 | 123 | 318 | 277 | |||
| – | – | 1 | 1 | – | (1) | – | – | 1 | – | 10 | |
| 668 | 976 | 3,367 | 3,603 | 669 | 640 | 752 | 691 | (25) | (42) | 11,961 | 12,025 |
| (448) | (1,022) | (1,976) | (2,029) | (363) | (361) | (395) | (358) | – | – | (7,233) | (7,482) |
| (1) | (1) | 3 | (10) | (1) | – | – | – | – | – | (106) | (108) |
| – | – | (4) | (5) | (1) | (1) | – | 1 | 3 | Consolidation and Other – – – – (24) (24) 18 – – – – 5 2 19 22 – – – – 27 42 2 – – – – – – – 1 1 1 1 3 1 – – 3 1 – – 3 1 –4 –4 –4 –4 –4 –4 |
(9) | |
| – | – | – | – | – | – | – | – | – – 108 (1) (186) (109) (2) – (655) 36 1 (1) – – – 36 (11) 25 1 24 62.4 32.4 94.8 |
(1) | ||
| (1) | (1) | (27) | (24) | (3) | (2) | (1) | (88) | ||||
| (181) | (201) | (827) | (874) | (206) | (198) | (208) | (2,976) | (2,915) (259) |
|||
| – | – | (121) | (118) | (16) | (14) | (120) | (295) | ||||
| – | 2 | (7) | 4 | – | (1) | 1 | (10) | ||||
| – | – | (1) | (1) | – | – | – | (7) | ||||
| (631) | (1,223) | (2,960) | (3,057) | (590) | (577) | (723) | (10,725) | (10,863) | |||
| 37 | (247) | 407 | 546 | 79 | 63 | 29 | 1,236 | 1,162 | |||
| 1 | – | (6) | (4) | – | – | – | (7) | ||||
| (1) | 8 | 11 | 69 | 1 | – | (1) | 78 | ||||
| – | – | (6) | (1) | (1) | – | – | (130) | ||||
| – | – | (2) | (3) | (2) | (2) | – | (16) | ||||
| (75) | |||||||||||
| – | 8 | (3) | 61 | (2) | (2) | (1) | |||||
| 37 | (239) | 404 | 607 | 77 | 61 | 28 | 1,161 | ||||
| (7) | 88 | (122) | (159) | (15) | (9) | (9) | (365) | ||||
| 30 | (151) | 282 | 448 | 62 | 52 | 19 | 796 | ||||
| – 30 |
– (151) |
22 260 |
33 415 |
7 55 |
8 44 |
1 18 |
35 761 |
||||
| 1,193 (371) |
|||||||||||
| 73.7 | 110.6 | 65.8 | 63.5 | 59.6 | 61.5 | 63.5 | 67.2 | ||||
| 29.8 103.5 |
21.8 132.4 |
27.6 93.4 |
27.4 90.9 |
33.8 93.4 |
33.7 95.2 |
33.4 96.9 |
27.6 94.8 |
€ mn German Speaking Countries Western&Southern Europe Iberia&Latin America nine months ended 30 September 2013 2012 2013 2012 2013 2012 Gross premiums written 9,726 9,645 7,952 6,916 3,502 3,501 Ceded premiums written (1,563) (1,582) (538) (495) (550) (590) Change in unearned premiums (844) (845) (170) 7 (92) (166) Premiums earned (net) 7,319 7,218 7,244 6,428 2,860 2,745 Interest and similar income 855 896 661 650 153 160 Operating income from financial assets and liabilities carried at fair value through income (net) (42) 5 10 1 5 15 Operating realized gains/losses (net) 44 46 – – – – Fee and commission income 110 109 18 15 – 1 Other income 19 22 5 4 – – Operating revenues 8,305 8,296 7,938 7,098 3,018 2,921 Claims and insurance benefits incurred (net) (5,486) (5,104) (4,515) (4,311) (1,960) (1,882) Change in reserves for insurance and investment contracts (net) (266) (226) (32) – (3) – Interest expenses (16) (57) (8) (7) (2) (6) Operating impairments of investments (net) (9) (15) – – – – Investment expenses (70) (67) (72) (56) (10) (11) Acquisition and administrative expenses (net) (1,860) (1,925) (1,926) (1,665) (752) (699) Fee and commission expenses (103) (109) (28) (20) – – Restructuring charges (4) (60) (1) (8) – (9) Other expenses (13) (13) (3) (2) – – Operating expenses (7,827) (7,576) (6,585) (6,069) (2,727) (2,607) Operating profit (loss) 478 720 1,353 1,029 291 314 Non-operating income from financial assets and liabilities carried at fair value through income (net) 5 (27) 1 (20) 2 – Non-operating realized gains/losses (net) 86 170 207 76 15 (54) Non-operating impairments of investments (net) (16) (85) (137) (74) (13) (15) Amortization of intangible assets (2) (2) (16) (4) (1) (2) Non-operating items 73 56 55 (22) 3 (71) Income (loss) before income taxes 551 776 1,408 1,007 294 243 Income taxes (158) (251) (463) (406) (95) (77) Net income (loss) 393 525 945 601 199 166 Net income (loss) attributable to: Non-controlling interests (1) 3 14 12 4 6 Shareholders 394 522 931 589 195 160 Loss ratio1 in % 75.0 70.7 62.3 67.1 68.5 68.5 Expense ratio2 in % 25.4 26.7 26.6 25.9 26.3 25.5 Combined ratio3 in % 100.4 97.4 88.9 93.0 94.8 94.0
1 Represents claims and insurance benefits incurred (net) divided by premiums earned (net) 2 Represents acquisition and administrative expenses (net) divided by premiums earned (net). 3 Represents the total of acquisition and administrative expenses (net) and claims and insurance benefits incurred (net) divided by premiums earned (net).
4 Presentation not meaningful.
| USA | Global Insurance Lines& Anglo Markets |
Property-Casualty | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| 2013 | 2012 | 2013 | 2012 | 2013 | 2012 | 2013 | 2012 | 2013 | 2012 | 2013 | 2012 |
| 1,625 | 3,076 | 12,706 | 13,135 | 2,461 | 2,362 | 1,960 | 1,681 | (3,330) | (3,401) | 36,602 | 36,915 |
| (95) | (924) | (3,272) | (3,208) | (535) | (564) | (65) | (34) | 3,328 | 3,401 | (3,290) | (3,996) |
| 2 | (97) | (431) | (575) | (151) | (29) | (169) | (63) | 2 | – | (1,853) | (1,768) |
| 1,532 | 2,055 | 9,003 | 9,352 | 1,775 | 1,769 | 1,726 | 1,584 | – | – | 31,459 | 31,151 |
| 178 | 177 | 725 | 858 | 121 | 124 | 22 | 26 | (11) | (54) | 2,704 | 2,837 |
| – | – | (34) | (41) | (61) | (25) | ||||||
| – | – | – | – | 44 | 46 | ||||||
| – | – | 438 | 424 | 915 | 858 | ||||||
| – | – | 1 | 1 | 29 | 27 | ||||||
| 1,710 | 2,232 | 10,133 | 10,594 | 35,090 | 34,894 | ||||||
| (1,049) | (1,941) | (5,813) | (6,161) | (1,098) | (1,091) | (1,109) | (993) | – | – | (21,030) | (21,483) |
| (6) | (1) | (9) | (39) | (2) | 2 | – | – | – | – | (318) | (264) |
| – | – | (13) | (15) | (2) | (2) | (1) | – | 11 | Other – – – – (59) 1 – (113) 54 – – – – 10 49 – – – – 113 2 – – – – – – – 3 5 3 5 5 5 – – 5 5 – – 5 5 –4 –4 –4 –4 –4 –4 |
(31) | (33) |
| – | – | – | – | – | – | – | – | 13 52 76 |
(9) | (15) | |
| (3) (2) |
(70) | (68) | Allianz Worldwide Growth Markets Partners – (5) – – – – – – 57 45 356 323 2 – 1 – 1,955 1,933 2,105 1,933 (7) (7) (1) (1) (616) (618) (572) (520) (49) (46) (352) (321) – (6) 1 (2) (1) – – – (1,775) (1,768) (2,034) (1,837) 180 165 71 96 – 1 – 1 8 4 3 – (2) (1) – – (6) (10) – – – (6) 3 1 180 159 74 97 (45) (34) (23) (29) 135 125 51 68 21 21 2 1 114 104 49 67 61.9 61.7 64.3 62.7 34.7 34.9 33.1 32.8 96.6 96.6 97.4 95.5 |
(233) | (212) | ||||||
| (512) | (578) | (2,636) | (2,594) | (8,861) | (8,589) | ||||||
| – | – | (363) | (352) | (843) | (799) | ||||||
| – | 1 | (9) | (4) | (13) | |||||||
| – | – | (1) | (1) | (18) | |||||||
| (1,570) | (2,521) | (8,914) | (9,234) | (31,356) | (31,499) | ||||||
| 140 | (289) | 1,219 | 1,360 | 3,734 | 3,395 | ||||||
| 1 | (13) | (2) | 3 | 7 | (55) | ||||||
| 5 | 48 | 139 | 167 | 463 | 411 | ||||||
| – | 2 | (13) | (7) | (181) | (180) | ||||||
| – | – | (2) | (10) | (24) | (23) | ||||||
| 6 | 37 | 122 | 153 | 265 | |||||||
| 146 | (252) | 1,341 | 1,513 | Consolidation and (64) (74) |
3,999 | ||||||
| (28) | 98 | (373) | (374) | (1,185) | 3,548 (1,073) |
||||||
| 118 | (154) | 968 | 1,139 | 2,814 | 2,475 | ||||||
| 139 | |||||||||||
| – | – | 83 | 96 | 123 | 2,336 | ||||||
| 118 | (154) | 885 | 1,043 | 2,691 | |||||||
| 68.5 | 94.5 | 64.5 | 65.9 | 66.8 | 68.9 | ||||||
| 33.4 | 28.1 | 29.3 | 27.7 | 28.2 | |||||||
| 101.9 | 122.6 | 93.8 | 93.6 | 95.0 |
| € mn | ||||
|---|---|---|---|---|
| German Speaking Countries |
Western&Southern Europe |
|||
| three months ended 30 September | 2013 | 2012 | 2013 | 2012 |
| Statutory premiums1 | 5,225 | 4,495 | 4,149 | 3,828 |
| Ceded premiums written | (39) | (36) | (193) | (301) |
| Change in unearned premiums | (46) | (57) | (1) | 18 |
| Statutory premiums (net) | 5,140 | 4,402 | 3,955 | 3,545 |
| Deposits from insurance and investment contracts | (1,534) | (990) | (2,790) | (2,507) |
| Premiums earned (net) | 3,606 | 3,412 | 1,165 | 1,038 |
| Interest and similar income | 2,204 | 2,185 | 939 | 943 |
| Operating income from financial assets and liabilities carried at fair value through income (net) | (372) | 36 | 32 | 27 |
| Operating realized gains/losses (net) | 366 | 423 | 151 | 97 |
| Fee and commission income | 12 | 12 | 114 | 87 |
| Other income | 26 | 27 | 5 | 4 |
| Operating revenues | 5,842 | 6,095 | 2,406 | 2,196 |
| Claims and insurance benefits incurred (net) | (3,050) | (3,043) | (949) | (888) |
| Changes in reserves for insurance and investment contracts (net) | (1,916) | (2,191) | (720) | (588) |
| Interest expenses | (24) | (25) | (1) | (8) |
| Operating impairments of investments (net) | (25) | (44) | (10) | (19) |
| Investment expenses | (132) | (131) | (50) | (40) |
| Acquisition and administrative expenses (net) | (408) | (316) | (432) | (393) |
| Fee and commission expenses | (6) | (5) | (51) | (43) |
| Restructuring charges | – | (5) | – | (1) |
| Other expenses | (21) | (19) | (4) | (3) |
| Operating expenses | (5,582) | (5,779) | (2,217) | (1,983) |
| Operating profit | 260 | 316 | 189 | 213 |
| Non-operating income from financial assets and liabilities carried at fair value through income (net) | – | – | (2) | (5) |
| Non-operating realized gains/losses (net) | – | – | (1) | (27) |
| Non-operating impairments of investments (net) | – | – | (4) | (3) |
| Amortization of intangible assets | – | – | (3) | – |
| Non-operating items | – | – | (10) | (35) |
| Income before income taxes | 260 | 316 | 179 | 178 |
| Income taxes | (90) | (111) | (46) | (54) |
| Net income | 170 | 205 | 133 | 124 |
| Net income attributable to: | ||||
| Non-controlling interests | – | – | 8 | 12 |
| Shareholders | 170 | 205 | 125 | 112 |
| Margin on reserves2 in basis points | 47 | 61 | 54 | 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 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 unitlinked contracts less reinsurance assets.
3 Presentation not meaningful.
| Iberia&Latin America | USA | Global Insurance Lines& Anglo Markets |
Growth Markets | Consolidation | Life/Health | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2013 | 2012 | 2013 | 2012 | 2013 | 2012 | 2013 | 2012 | 2013 | 2012 | 2013 | 2012 | |
| 332 | 329 | 1,672 | 1,740 | 132 | 138 | 1,400 | 1,672 | (213) | (290) | 12,697 | 11,912 | |
| (4) | (2) | (27) | (32) | (27) | (24) | (66) | (90) | 213 | 290 | (143) | (195) | |
| 11 | (1) | 4 | 4 | – | (21) | (33) | – | – | (54) | (69) | ||
| 339 | 1,712 | 109 | 114 | 1,313 | 1,549 | – | – | 12,500 | 11,648 | |||
| (197) | (1,494) | – | – | (684) | (870) | – | – | (6,631) | (6,005) | |||
| 142 | 218 | 218 | 109 | 114 | 629 | 679 | – | – | 5,869 | 5,643 | ||
| 92 | 683 | 718 | 18 | 24 | 207 | 218 | (15) | (15) | 4,128 | 4,166 | ||
| 7 | 8 | (206) | 5 | 16 | 2 | (1) | 6 | – | (537) | (120) | ||
| 4 | 17 | 84 | – | – | 3 | 8 | – | – | 541 | 596 | ||
| 1 | 2 | 21 | 17 | (1) | – | 19 | 18 | – | (1) | 166 | 135 | |
| – | – | – | – | – | – | – | – | – | – | 31 | 31 | |
| 246 | 722 | 831 | 131 | 154 | 860 | 922 | (9) | (16) | 10,198 | 10,451 | ||
| (124) | (23) | (77) | (71) | (424) | (401) | – | – | (4,643) | (4,550) | |||
| (201) | – | – | (3,139) | (3,422) | ||||||||
| (2) | 15 | 16 | (16) | (21) | ||||||||
| (4) | – | – | (25) | (68) | ||||||||
| (7) | – | – | (198) | (189) | ||||||||
| (231) | (1) | – | (1,322) | (1,301) | ||||||||
| – | 1 | 1 | (61) | (57) | ||||||||
| – | – | – | – | (6) | ||||||||
| – | – | – | (25) | (22) | ||||||||
| (205) | (688) | (109) | (113) | (792) | (846) | 15 | 17 | (9,429) | (9,636) | |||
| 41 | 183 | 143 | 22 | 41 | 68 | 76 | 6 | 1 | 769 | 815 | ||
| – | – | – | 7 | 2 | ||||||||
| – | – | – | 28 | (26) | ||||||||
| – | – | – | (4) | (4) | ||||||||
| – | – | – | (5) | – | ||||||||
| – | – | – | 26 | (28) | ||||||||
| 41 | 219 | 150 | 22 | 41 | 68 | 76 | 6 | 1 | 795 | 787 | ||
| (12) | (48) | (4) | (7) | (16) | (21) | – | – | (233) | (248) | |||
| 29 | 154 | 102 | 18 | 34 | 52 | 55 | 6 | 1 | 562 | 539 | ||
| (1) 326 1,644 (144) (1,426) 182 93 (217) (16) 269 (124) (19) (32) (66) (320) (353) (14) (23) (137) (1) – (3) (2) – – (2) – – 10 (1) – – – (1) (2) (8) (9) – – (7) (46) (51) (195) (291) (18) (19) (222) (1) (1) (4) (9) – – – – – – – – – – – – – – – – – (244) (539) 25 – – 9 7 – – – – – 27 1 – – 2 – – – (1) – – – – – – – – – (2) – – 36 7 – – – 25 (7) (65) 18 7 6 – – – – 9 22 12 154 102 18 34 43 |
||||||||||||
| 8 | – | – | 24 | 26 | ||||||||
| 47 | 6 | 1 | 538 | 513 | ||||||||
| 206 | 138 | 104 | 83 | 452 | 720 | 104 | 115 | –3 | –3 | 66 | 73 | |
| Reportable segments – Life/Health (continued) | ||
|---|---|---|
| ----------------------------------------------- | -- | -- |
| € mn | German Speaking | Western&Southern | ||
|---|---|---|---|---|
| nine months ended 30 September | Countries 2013 |
2012 | Europe 2013 |
2012 |
| Statutory premiums1 | 16,398 | 15,002 | 14,791 | 12,160 |
| Ceded premiums written | (127) | (121) | (810) | (774) |
| Change in unearned premiums | (117) | (133) | (2) | 36 |
| Statutory premiums (net) | 16,154 | 14,748 | 13,979 | 11,422 |
| Deposits from insurance and investment contracts | (4,760) | (3,768) | (10,577) | (8,277) |
| Premiums earned (net) | 11,394 | 10,980 | 3,402 | 3,145 |
| Interest and similar income | 6,729 | 6,581 | 2,883 | 3,031 |
| Operating income from financial assets and liabilities carried at fair value through income (net) | (903) | 117 | 133 | 22 |
| Operating realized gains/losses (net) | 1,599 | 1,861 | 415 | 352 |
| Fee and commission income | 38 | 34 | 317 | 252 |
| Other income | 86 | 100 | 25 | 10 |
| Operating revenues | 18,943 | 19,673 | 7,175 | 6,812 |
| Claims and insurance benefits incurred (net) | (9,243) | (9,609) | (2,996) | (2,767) |
| Changes in reserves for insurance and investment contracts (net) | (6,910) | (7,133) | (1,866) | (1,753) |
| Interest expenses | (75) | (76) | (15) | (20) |
| Operating impairments of investments (net) | (165) | (175) | (62) | (157) |
| Investment expenses | (382) | (365) | (149) | (126) |
| Acquisition and administrative expenses (net) | (1,174) | (1,220) | (1,280) | (1,219) |
| Fee and commission expenses | (18) | (17) | (156) | (127) |
| Restructuring charges | (1) | (6) | (1) | (3) |
| Other expenses | (64) | (56) | (9) | (7) |
| Operating expenses | (18,032) | (18,657) | (6,534) | (6,179) |
| Operating profit | 911 | 1,016 | 641 | 633 |
| Non-operating income from financial assets and liabilities carried at fair value through income (net) | – | – | (3) | 3 |
| Non-operating realized gains/losses (net) | – | – | 38 | (19) |
| Non-operating impairments of investments (net) | – | – | (11) | (30) |
| Amortization of intangible assets | (1) | (2) | (3) | – |
| Non-operating items | (1) | (2) | 21 | (46) |
| Income before income taxes | 910 | 1,014 | 662 | 587 |
| Income taxes | (334) | (351) | (162) | (176) |
| Net income | 576 | 663 | 500 | 411 |
| Net income attributable to: | ||||
| Non-controlling interests | – | – | 21 | 29 |
| Shareholders | 576 | 663 | 479 | 382 |
| Margin on reserves2 in basis points | 55 | 66 | 62 | 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 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 unitlinked contracts less reinsurance assets.
3 Presentation not meaningful.
| 2012 2013 2012 2013 2012 2013 2012 2013 5,739 398 378 4,576 4,876 (852) (740) 41,659 (93) (58) (49) (205) (203) 852 740 (451) 4 – – (80) (92) – – (218) 5,650 340 329 4,291 4,581 – – 40,990 (5,034) – – (2,452) (2,663) – – (22,849) 616 340 329 1,839 1,918 – – 18,141 2,123 59 60 624 626 (49) (47) 12,573 (629) (49) (5) (12) (4) – (1) (1,467) 156 – – 36 62 – – 2,158 48 (1) – 61 55 (2) (1) 474 – – – – – – – 111 2,314 349 384 2,548 2,657 (51) (49) 31,990 (70) (259) (238) (1,437) (1,120) – – (14,459) (1,033) (9) (32) (219) (559) – – (10,068) (5) (1) (1) (6) (6) 49 48 (56) 7 – – (1) (9) – – (219) (26) – – (21) (20) – – (581) (720) (66) (64) (643) (702) 2 (1) (4,048) (31) – – (1) – 2 1 (191) – – – – – – – (2) – – – – – – – (73) (1,878) (335) (335) (2,328) (2,416) 53 48 (29,697) 436 14 49 220 241 2 (1) 2,293 16 – – – – – – 15 6 – – 20 – – – 86 (1) – – (3) – – – (14) – – – (6) – – – (10) 21 – – 11 – – – 77 457 14 49 231 241 2 (1) 2,370 (147) (5) (10) (51) (53) – – (706) 310 9 39 180 188 2 (1) 1,664 – – – 28 27 – – 67 310 9 39 152 161 2 (1) 1,597 |
Life/Health | Iberia&Latin America USA Anglo Markets Growth Markets Consolidation |
||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| 2012 | 2013 | 2012 | 2013 | |||||||
| 38,472 | 5,022 | 1,057 | 1,326 | |||||||
| (528) | (86) | (28) | (17) | |||||||
| (187) | (5) | (2) | (14) | |||||||
| 37,757 | 4,931 | 1,027 | 1,295 | |||||||
| (20,219) | (4,285) | (477) | (775) | |||||||
| 17,538 | 646 | 550 | 520 | |||||||
| 12,651 | 2,052 | 277 | 275 | |||||||
| (487) | (645) | 13 | 9 | |||||||
| 2,396 | 98 | (35) | 10 | |||||||
| 393 | 58 | 5 | 3 | |||||||
| 110 | – | – | – | |||||||
| 32,601 | 2,209 | 810 | 817 | |||||||
| (14,229) | (63) | (425) | (461) | |||||||
| (10,653) | (983) | (143) | (81) | |||||||
| (62) | (6) | (2) | (2) | |||||||
| (334) | 10 | – | (1) | |||||||
| (542) | (25) | (5) | (4) | |||||||
| (4,075) | (741) | (149) | (146) | |||||||
| (175) | (17) | (1) | (1) | |||||||
| (10) | – | (1) | – | |||||||
| (63) | – | – | – | |||||||
| (30,143) | (1,825) | (726) | (696) | |||||||
| 2,458 | 384 | 84 | 121 | |||||||
| 19 | 18 | – | – | |||||||
| (13) | 28 | – | – | |||||||
| (31) | – | – | – | |||||||
| (2) | – | – | – | |||||||
| (27) | 46 | – | – | |||||||
| 2,431 | 430 | 84 | 121 | |||||||
| (760) | (118) | (23) | (36) | |||||||
| 1,671 | 312 | 61 | 85 | |||||||
| Global Insurance Lines& 18 13 – 67 48 312 208 159 74 87 86 286 110 |
||||||||||
| 69 | ||||||||||
| 1,602 | ||||||||||
| 75 | 66 | –3 | –3 | 125 |
| Reportable segments – Asset Management | B 20 | |
|---|---|---|
| € mn | ||
| three months ended 30 September | 2013 | 2012 |
| Net fee and commission income1 | 1,697 | 1,821 |
| Net interest income2 | 2 | 10 |
| Income from financial assets and liabilities carried at fair value through income (net) | 1 | 10 |
| Other income | 3 | 4 |
| Operating revenues | 1,703 | 1,845 |
| Administrative expenses (net), excluding acquisition-related expenses | (949) | (996) |
| Restructuring charges | – | (1) |
| Operating expenses | (949) | (997) |
| Operating profit | 754 | 848 |
| Realized gains/losses (net) | 1 | – |
| Impairments of investments (net) | – | – |
| Acquisition-related expenses | – | (40) |
| Amortization of intangible assets | (6) | (11) |
| Non-operating items | (5) | (51) |
| Income before income taxes | 749 | 797 |
| Income taxes | (267) | (275) |
| Net income | 482 | 522 |
| Net income attributable to: | ||
| Non-controlling interests | 23 | 15 |
| Shareholders | 459 | 507 |
| Cost-income ratio3 in % | 55.7 | 54.0 |
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.
| Reportable segments – Asset Management (continued) | B 21 | |
|---|---|---|
| € mn | ||
| nine months ended 30 September | 2013 | 2012 |
| Net fee and commission income1 | 5,403 | 4,730 |
| Net interest income2 | 10 | 22 |
| Income from financial assets and liabilities carried at fair value through income (net) | 8 | 17 |
| Other income | 8 | 12 |
| Operating revenues | 5,429 | 4,781 |
| Administrative expenses (net), excluding acquisition-related expenses | (2,966) | (2,683) |
| Restructuring charges | (5) | (62) |
| Operating expenses | (2,971) | (2,745) |
| Operating profit | 2,458 | 2,036 |
| Realized gains/losses (net) | 1 | – |
| Impairments of investments (net) | – | (1) |
| Acquisition-related expenses | (41) | (59) |
| Amortization of intangible assets | (19) | (34) |
| Non-operating items | (59) | (94) |
| Income before income taxes | 2,399 | 1,942 |
| Income taxes | (861) | (696) |
| Net income | 1,538 | 1,246 |
| Net income attributable to: | ||
| Non-controlling interests | 71 | 36 |
| Shareholders | 1,467 | 1,210 |
| Cost-income ratio3 in % | 54.7 | 57.4 |
1 Represents fee and commission income less fee and commission expenses.
2 Represents interest and similar income less interest expenses.
3 Represents operating expenses divided by operating revenues.
| € mn | ||
|---|---|---|
| Holding&Treasury | ||
| three months ended 30 September | 2013 | 2012 |
| Interest and similar income | 46 | 58 |
| Operating income from financial assets and liabilities carried at fair value through income (net) | 13 | (7) |
| Fee and commission income | 23 | 15 |
| Other income | – | 5 |
| Operating revenues | 82 | 71 |
| Interest expenses, excluding interest expenses from external debt | (83) | (105) |
| Loan loss provisions | – | – |
| Investment expenses | (18) | (26) |
| Administrative expenses (net), excluding acquisition-related expenses | (178) | (154) |
| Fee and commission expenses | (68) | (50) |
| Restructuring charges | 26 | – |
| Other expenses | – | – |
| Operating expenses | (321) | (335) |
| Operating profit (loss) | (239) | (264) |
| Non-operating income from financial assets and liabilities carried at fair value through income (net) | (7) | (24) |
| Realized gains/losses (net) | 15 | 90 |
| Impairments of investments (net) | (2) | (37) |
| Income from fully consolidated private equity investments (net) | – | – |
| Interest expenses from external debt | (206) | (233) |
| Acquisition-related expenses | (1) | (2) |
| Amortization of intangible assets | (1) | (8) |
| Non-operating items | (202) | (214) |
| Income (loss) before income taxes | (441) | (478) |
| Income taxes | 124 | 137 |
| Net income (loss) | (317) | (341) |
| Net (income) loss attributable to: | ||
| Non-controlling interests | – | 1 |
| Shareholders | (317) | (342) |
| Cost-income ratio1 for the reportable segment Banking in % |
1 Represents investment expenses, administrative expenses (net), excluding acquisitionrelated 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.
| Banking | Alternative Investments | Consolidation | Corporate and Other | ||||
|---|---|---|---|---|---|---|---|
| 2013 | 2012 | 2013 | 2012 | 2013 | 2012 | 2013 | 2012 |
| 152 | 180 | 4 | 3 | – | – | 202 | 241 |
| 2 | 6 | – | (1) | – | (1) | 15 | (3) |
| 103 | 107 | 45 | 32 | (1) | (1) | 170 | 153 |
| – | – | (2) | – | 1 | – | (1) | |
| 257 | 293 | 47 | 34 | – | (2) | 386 | 396 |
| (68) | (91) | (1) | – | – | – | (152) | (196) (13) |
| (18) | (13) | – | – | – | – | (18) | (26) |
| – | (1) | (1) | – | (1) | 1 | (20) | (313) |
| (109) | (129) | (40) | (31) | 1 | 1 | (326) | (108) |
| (58) | (58) | – | – | – | – | (126) | |
| – | – | – | – | – | – | 26 | |
| – | (1) | – | – | – | – | – | |
| (253) | (293) | (42) | (31) | – | 2 | (616) | |
| 4 | – | 5 | 3 | – | – | (230) | |
| – | – | – | – | – | – | (7) | |
| 11 | (2) | – | – | – | – | 26 | |
| – | (2) | – | 1 | – | – | (2) | |
| – | – | (5) | (10) | – | – | (5) | |
| – | – | – | – | – | – | (206) | |
| – | – | – | – | – | – | (1) | |
| – | – | – | (89) | – | – | (1) | |
| 11 | (4) | (5) | (98) | – | – | (196) | |
| 15 | (4) | – | (95) | – | – | (426) | |
| (4) | 3 | (1) | – | – | – | 119 | |
| 11 | (1) | (1) | (95) | – | – | (307) | |
| 2 | 2 | 2 | – | – | – | 4 | |
| 9 | (3) | (3) | (95) | – | – | (311) | |
| € mn | ||||
|---|---|---|---|---|
| Holding&Treasury | ||||
| nine months ended 30 September | 2013 | 2012 | ||
| Interest and similar income | 220 | 185 | ||
| Operating income from financial assets and liabilities carried at fair value through income (net) | 27 | 7 | ||
| Fee and commission income | 43 | 46 | ||
| Other income | – | 5 | ||
| Operating revenues | 290 | 243 | ||
| Interest expenses, excluding interest expenses from external debt | (258) | (317) | ||
| Loan loss provisions | – | – | ||
| Investment expenses | (56) | (73) | ||
| Administrative expenses (net), excluding acquisition-related expenses | (508) | (414) | ||
| Fee and commission expenses | (177) | (133) | ||
| Restructuring charges | 26 | – | ||
| Other expenses | – | – | ||
| Operating expenses | (973) | (937) | ||
| Operating profit (loss) | (683) | (694) | ||
| Non-operating income from financial assets and liabilities carried at fair value through income (net) | (24) | 284 | ||
| Realized gains/losses (net) | 268 | 183 | ||
| Impairments of investments (net) | (75) | (173) | ||
| Income from fully consolidated private equity investments (net) | – | – | ||
| Interest expenses from external debt | (680) | (743) | ||
| Acquisition-related expenses | (1) | (5) | ||
| Amortization of intangible assets | (8) | (23) | ||
| Non-operating items | (520) | (477) | ||
| Income (loss) before income taxes | (1,203) | (1,171) | ||
| Income taxes | 291 | 211 | ||
| Net loss | (912) | (960) | ||
| Net loss attributable to: | ||||
| Non-controlling interests | – | 1 | ||
| Shareholders | (912) | (961) | ||
| Cost-income ratio1 for the reportable segment Banking in % | ||||
1 Represents investment expenses, administrative expenses (net), excluding acquisitionrelated 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.
| Banking | Alternative Investments | Consolidation | Corporate and Other | ||||
|---|---|---|---|---|---|---|---|
| 2013 | 2012 | 2013 | 2012 | 2013 | 2012 | 2013 | 2012 |
| 463 | 553 | 8 | 13 | – | (1) | 691 | 750 |
| 7 | 13 | – | (2) | – | (1) | 34 | 17 |
| 348 | 326 | 125 | 110 | (3) | (6) | 513 | 476 |
| – | – | – | 2 | – | (1) | – | |
| 818 | 892 | 133 | 123 | (3) | (9) | 1,238 | 1,249 |
| (213) | (269) | (2) | (2) | – | 1 | (473) | (587) |
| (47) | (101) | – | – | – | – | (47) | (101) |
| – | (1) | (3) | (2) | – | 2 | (59) | (74) |
| (354) | (372) | (108) | (104) | 3 | 5 | (967) | (885) |
| (192) | (183) | – | – | – | 1 | (369) | (315) |
| (90) | – | – | – | – | – | (64) | |
| (2) | (2) | – | – | – | – | (2) | |
| (898) | (928) | (113) | (108) | 3 | 9 | (1,981) | (1,964) |
| (80) | (36) | 20 | 15 | – | – | (743) | (715) |
| 285 | |||||||
| – | – | – | 1 | – | – | (24) | 195 |
| 19 | 12 | – | – | 27 | – | 314 | |
| (1) | (2) | – | 1 | – | – | (76) | (174) |
| – | – | (19) | (23) | – | – | (19) | (743) |
| – | – | – | – | – | – | (680) | |
| – | – | – | – | – | – | (1) | |
| – 18 |
– 10 |
(46) (65) |
(89) (110) |
– 27 |
– – |
(54) (540) |
(112) (577) |
| (62) | (26) | (45) | (95) | 27 | – | (1,283) | (1,292) |
| 20 | 6 | (4) | (4) | (5) | – | 302 | |
| (42) | (20) | (49) | (99) | 22 | – | (981) | (1,079) |
| 5 | 5 | 1 | 4 | – | – | 6 | |
| (47) | (25) | (50) | (103) | 22 | – | (987) | (1,089) |
| 108.0 | 85.2 |
| Financial assets carried at fair value through income | B 24 | |
|---|---|---|
| € mn | ||
| as of | as of | |
| 30 September | 31 December | |
| 2013 | 2012 | |
| Financial assets held for trading | ||
| Debt securities | 335 | 328 |
| Equity securities | 127 | 153 |
| Derivative financial instruments | 1,732 | 1,865 |
| Subtotal | 2,194 | 2,346 |
| Financial assets designated at fair value through income |
||
| Debt securities | 2,061 | 2,349 |
| Equity securities | 2,666 | 2,588 |
| Subtotal | 4,727 | 4,937 |
| Total | 6,921 | 7,283 |
| Investments | B 25 | |
|---|---|---|
| € mn | ||
| as of | as of | |
| 30 September | 31 December | |
| 2013 | 2012 | |
| Available-for-sale investments | 384,007 | 383,254 |
| Held-to-maturity investments | 4,080 | 4,321 |
| Funds held by others under reinsurance contracts assumed |
891 | 1,188 |
| Investments in associates and joint ventures |
3,476 | 3,219 |
| Real estate held for investment | 10,179 | 9,646 |
| Total | 402,633 | 401,628 |
56 Consolidated Statements of Changes in Equity
| € mn | ||||||||
|---|---|---|---|---|---|---|---|---|
| as of 30 September 2013 | as of 31 December 2012 | |||||||
| 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) |
2,748 | 138 | (8) | 2,878 | 4,026 | 291 | (2) | 4,315 |
| Corporate mortgage-backed securities (residential and commercial) |
10,888 | 760 | (89) | 11,559 | 10,778 | 1,202 | (107) | 11,873 |
| Other asset-backed securities | 2,786 | 209 | (27) | 2,968 | 2,532 | 276 | (27) | 2,781 |
| Government and government agency bonds | ||||||||
| Germany | 14,382 | 1,065 | (27) | 15,420 | 13,066 | 1,521 | (5) | 14,582 |
| Italy | 26,885 | 1,420 | (173) | 28,132 | 29,762 | 1,483 | (206) | 31,039 |
| France | 31,300 | 2,594 | (223) | 33,671 | 31,384 | 4,431 | (34) | 35,781 |
| United States | 8,937 | 348 | (149) | 9,136 | 8,489 | 851 | (10) | 9,330 |
| Spain | 2,321 | 155 | (46) | 2,430 | 2,582 | 32 | (136) | 2,478 |
| Belgium | 8,440 | 809 | (4) | 9,245 | 8,537 | 1,372 | (1) | 9,908 |
| Greece | 1 | 1 | – | 2 | 7 | 4 | – | 11 |
| Portugal | 224 | – | (8) | 216 | 251 | 1 | (11) | 241 |
| Ireland | 27 | 1 | – | 28 | 76 | 3 | – | 79 |
| Hungary | 749 | 50 | – | 799 | 662 | 42 | – | 704 |
| All other countries | 59,211 | 3,253 | (758) | 61,706 | 51,213 | 5,329 | (52) | 56,490 |
| Subtotal | 152,477 | 9,696 | (1,388) | 160,785 | 146,029 | 15,069 | (455) | 160,643 |
| Corporate bonds1 | 166,435 | 9,576 | (1,537) | 174,474 | 161,150 | 14,142 | (954) | 174,338 |
| Other | 2,339 | 270 | (9) | 2,600 | 2,574 | 266 | (23) | 2,817 |
| Subtotal | 337,673 | 20,649 | (3,058) | 355,264 | 327,089 | 31,246 | (1,568) | 356,767 |
| Equity securities2 | 20,013 | 8,889 | (159) | 28,743 | 17,950 | 8,632 | (95) | 26,487 |
| Total | 357,686 | 29,538 | (3,217) | 384,007 | 345,039 | 39,878 | (1,663) | 383,254 |
1 Includes bonds issued by Spanish banks with a fair value of €405 mn (2012: €508 mn), thereof
subordinated bonds with a fair value of €104 mn (2012: €107 mn).
2 Includes shares invested in Spanish banks with a fair value of €364 mn (2012: €279 mn).
| € mn | ||||||
|---|---|---|---|---|---|---|
| as of 30 September 2013 | as of 31 December 2012 | |||||
| Banks | Customers | Total | Banks | Customers | Total | |
| Short-term investments and certificates of deposit | 3,309 | – | 3,309 | 4,207 | – | 4,207 |
| Reverse repurchase agreements | 331 | – | 331 | 789 | – | 789 |
| Collateral paid for securities borrowing transactions and derivatives | 333 | – | 333 | 365 | – | 365 |
| Loans | 62,019 | 51,384 | 113,403 | 64,049 | 49,633 | 113,682 |
| Other | 827 | 16 | 843 | 436 | 42 | 478 |
| Subtotal | 66,819 | 51,400 | 118,219 | 69,846 | 49,675 | 119,521 |
| Loan loss allowance | – | (166) | (166) | – | (152) | (152) |
| Total | 66,819 | 51,234 | 118,053 | 69,846 | 49,523 | 119,369 |
| Loans and advances to customers by type of customer | B 28 | |
|---|---|---|
| € mn | as of | as of |
| 30 September 2013 |
31 December 2012 |
|
| Corporate customers | 19,211 | 18,126 |
| Private customers | 24,444 | 24,024 |
| Public customers | 7,745 | 7,525 |
| Total | 51,400 | 49,675 |
| Reinsurance assets | B 29 | |
|---|---|---|
| € mn | ||
| as of | as of | |
| 30 September | 31 December | |
| 2013 | 2012 | |
| Unearned premiums | 1,866 | 1,546 |
| Reserves for loss and loss adjustment | ||
| expenses | 6,865 | 7,318 |
| Aggregate policy reserves | 4,484 | 4,295 |
| Other insurance reserves | 109 | 95 |
| Total | 13,324 | 13,254 |
| € mn | ||
|---|---|---|
| as of | as of | |
| 30 September 2013 |
31 December 2012 |
|
| Receivables | ||
| Policyholders | 5,341 | 6,005 |
| Agents | 4,582 | 4,497 |
| Reinsurers | 1,797 | 2,421 |
| Other | 4,686 | 4,054 |
| Less allowance for doubtful accounts | (712) | (730) |
| Subtotal | 15,694 | 16,247 |
| Tax receivables | ||
| Income taxes | 1,357 | 1,363 |
| Other taxes | 1,250 | 1,278 |
| Subtotal | 2,607 | 2,641 |
| Accrued dividends, interest and rent | 7,167 | 7,780 |
| Prepaid expenses | ||
| Interest and rent | 12 | 17 |
| Other prepaid expenses | 304 | 300 |
| Subtotal | 316 | 317 |
| Derivative financial instruments used for hedging that meet the criteria for hedge accounting and firm commitments |
90 | 129 |
| Property and equipment | ||
| Real estate held for own use | 2,651 | 2,885 |
| Software | 1,710 | 1,590 |
| Equipment | 1,106 | 967 |
| Fixed assets of Alternative Investments | 1,317 | 1,225 |
| Subtotal | 6,784 | 6,667 |
| Other assets | 1,447 | 1,415 |
| Total | 34,105 | 35,196 |
Other assets B 31
| Deferred acquisition costs | B 30 | |
|---|---|---|
| € mn | ||
| as of | as of | |
| 30 September | 31 December | |
| 2013 | 2012 | |
| Deferred acquisition costs | ||
| Property-Casualty | 4,422 | 4,323 |
| Life/Health | 15,542 | 13,521 |
| Asset Management | 158 | 139 |
| Subtotal | 20,122 | 17,983 |
| Present value of future profits | 1,079 | 945 |
| Deferred sales inducements | 799 | 524 |
| Total | 22,000 | 19,452 |
| Non-current assets classified as held for sale | B 32 | |
|---|---|---|
| € mn | ||
| as of 30 September 2013 |
as of 31 December 2012 |
|
| Non-current assets classified as held for sale |
||
| Real estate held for investment | 117 | 15 |
| Investments in associates and joint ventures |
237 | – |
| Total | 354 | 15 |
As of 31 December 2012, the non-current assets classified as held for sale comprised only real estate held for investment which was sold as expected during the first quarter of 2013.
As of 30 September 2013, the non-current assets classified as held for sale of €354 mn consist of real estate held for investment and investments in associates and joint ventures.
Real estate held for investment comprises of an office building allocated to the reportable segment German Speaking Countries (Life/Health). The sale of the investment is expected to be completed during the year ending 31 December 2013. No impairment was recognized for the three and the nine months ended 30 September 2013.
During the third quarter of 2013, the Allianz Group decided to dispose of the investments in the associates Scandferries Holding GmbH and Scandferries Chartering A/S as well as in another associate. On 4 November 2013, an agreement was signed with the existing co-shareholder to acquire Allianz Capital Partner's stakes in Scandferries Holding GmbH and Scandferries Chartering A/S. This sale is contingent on the approval of regulatory authorities. The disposals of the associates had an impact on the reportable segments German Speaking Countries (Life/Health and Property-Casualty), Holding&Treasury and Western&Southern Europe (Property-Casualty). Upon remeasurement at fair value less cost to sell of the other associate, an impairment loss of €31 mn was recognized for the three and the nine months ended 30 September 2013. The fair value is based on the agreed transaction price. As of 30 September 2013, cumulative losses recognized in other comprehensive income relating to the disposal of the associates were not material.
| Intangible Assets | B 33 |
|---|---|
| € mn | ||
|---|---|---|
| as of | as of | |
| 30 September | 31 December | |
| 2013 | 2012 | |
| Intangible assets with indefinite useful lives |
||
| Goodwill | 11,691 | 11,679 |
| Brand names1 | 297 | 302 |
| Subtotal | 11,988 | 11,981 |
| Intangible assets with finite useful lives | ||
| Distribution agreements2 | 1,032 | 826 |
| Customer relationships3 | 164 | 183 |
| Other4 | 108 | 100 |
| Subtotal | 1,304 | 1,109 |
| Total | 13,292 | 13,090 |
1 Includes primarily the brand name of Selecta AG, Muntelier.
2 Includes primarily the long-term distribution agreements with Commerzbank AG of €381 mn (2012: €410 mn), Banco Popular S.A. of €374 mn (2012: €386 mn), Yapı Kredi Bank of €166 mn (2012: €– mn) and HSBC Asia and Turkey of €85 mn (2012: €– mn).
3 Includes primarily customer relationships from the acquisition of Selecta of €127 mn (2012: €152 mn) and Yapı Kredi of €12 mn (2012: €– mn). The renewal rights of €23 mn (2012: €31 mn), which were acquired in the context of a business combination, were reclassified from the line item "Other" to the line item "Customer relationships".
4 Includes primarily acquired business portfolios of €62 mn (2012: €42 mn) and heritable building rights of €17 mn (2012: €15 mn). The other distribution rights of €18 mn (2012: €20 mn) and the bancassurance agreements of €8 mn (2012: €10 mn) were reclassified from the line item "Other" into the line item "Distribution agreements".
| Goodwill | B 34 |
|---|---|
| € mn | |
| 2013 | |
| Cost as of 1 January | 12,573 |
| Accumulated impairments as of 1 January | (894) |
| Carrying amount as of 1 January | 11,679 |
| Additions | 228 |
| Disposals | – |
| Foreign currency translation adjustments | (170) |
| Impairments | (46) |
| Carrying amount as of 30 September | 11,691 |
| Accumulated impairments as of 30 September | 940 |
| Cost as of 30 September | 12,631 |
In the first quarter of 2013, the goodwill of a fully consolidated private equity investment was impaired by €46 mn in the reportable segment Alternative Investments.
Additions are mainly related to goodwill arising from the acquisition of 93.94% of Yapı Kredi Sigorta A.Ş., Istanbul.
| Financial liabilities carried at fair value through income B 35 |
||||
|---|---|---|---|---|
| € mn | as of 30 September 2013 |
as of 31 December 2012 |
||
| Financial liabilities held for trading | ||||
| Derivative financial instruments | 5,589 | 5,395 | ||
| Other trading liabilities | 3 | 2 | ||
| Subtotal | 5,592 | 5,397 | ||
| Financial liabilities designated at fair value through income |
– | – | ||
| Total | 5,592 | 5,397 | ||
| as of 31 December 2012 | |
|---|---|
| Customers | Total |
| 4,724 | 4,859 |
| 2,897 | 2,897 |
| 1,651 | 2,637 |
| 656 | 1,399 |
| – | 1,793 |
| 3,420 | 8,840 |
| 13,348 | 22,425 |
| Reserves for loss and loss adjustment expenses | B 37 | |
|---|---|---|
| € mn | as of 30 September 2013 |
as of 31 December 2012 |
| Property-Casualty | 58,044 | 62,711 |
| Life/Health | 9,813 | 9,854 |
| Consolidation | (7) | (25) |
| Total | 67,850 | 72,540 |
| € mn | ||||||
|---|---|---|---|---|---|---|
| 2013 | 2012 | |||||
| Gross | Ceded | Net | Gross | Ceded | Net | |
| As of 1 January | 62,711 | (6,905) | 55,806 | 59,493 | (6,658) | 52,835 |
| Loss and loss adjustment expenses incurred | ||||||
| Current year | 24,043 | (1,797) | 22,246 | 23,693 | (1,565) | 22,128 |
| Prior years | (1,485) | 269 | (1,216) | (654) | 9 | (645) |
| Subtotal | 22,558 | (1,528) | 21,030 | 23,039 | (1,556) | 21,483 |
| Loss and loss adjustment expenses paid | ||||||
| Current year | (10,648) | 321 | (10,327) | (9,898) | 389 | (9,509) |
| Prior years | (12,570) | 1,252 | (11,318) | (11,464) | 1,042 | (10,422) |
| Subtotal | (23,218) | 1,573 | (21,645) | (21,362) | 1,431 | (19,931) |
| Foreign currency translation adjustments and other changes | (937) | 172 | (765) | 454 | (89) | 365 |
| Changes in the consolidated subsidiaries of the Allianz Group1 | 145 | (70) | 75 | 992 | (30) | 962 |
| Reclassifications2 | (3,215) | 292 | (2,923) | – | – | – |
| As of 30 September | 58,044 | (6,466) | 51,578 | 62,616 | (6,902) | 55,714 |
1 On 12 July 2013, the Allianz Group acquired Yapı Kredi Bank's shareholding in the Turkish property-casualty insurance company Yapı Kredi Sigorta with net reserves for loss and loss adjustment expenses of €95 mn. The remaining change in the net reserves for loss and loss adjustment expenses of €(20) mn resulted from a minor deconsolidation in the first quarter of 2013.
2 Effective 1 January 2013, the Allianz Group changed its presentation of discounted loss reserves in the consolidated balance sheet from the line item "Reserves for loss and loss adjustment expenses" to the line item "Reserves for insurance and investment contracts". For further information please see note 2.
| Reserves for insurance and investment contracts | B 39 | |
|---|---|---|
| € mn | as of 30 September 2013 |
as of 31 December 2012 |
| Aggregate policy reserves | 361,580 | 350,244 |
| Reserves for premium refunds | 36,962 | 40,031 |
| Other insurance reserves | 723 | 710 |
| Total | 399,265 | 390,985 |
| other liabilities | B 40 | |
|---|---|---|
| € mn | as of 30 September 2013 |
as of 31 December 2012 |
| Payables | ||
| Policyholders | 3,800 | 4,710 |
| Reinsurance | 1,136 | 1,845 |
| Agents | 1,660 | 1,529 |
| Subtotal | 6,596 | 8,084 |
| Payables for social security | 396 | 458 |
| Tax payables | ||
| Income taxes | 2,544 | 2,680 |
| Other taxes | 1,285 | 1,143 |
| Subtotal | 3,829 | 3,823 |
| Accrued interest and rent | 609 | 671 |
| Unearned income | ||
| Interest and rent | 15 | 5 |
| Other | 279 | 288 |
| Subtotal | 294 | 293 |
| Provisions | ||
| Pensions and similar obligations | 8,294 | 8,069 |
| Employee related | 2,409 | 2,100 |
| Share-based compensation plans | 613 | 558 |
| Restructuring plans | 240 | 304 |
| Loan commitments | 43 | 67 |
| Contingent losses from non-insurance business |
141 | 166 |
| Other provisions | 1,507 | 1,632 |
| Subtotal | 13,247 | 12,896 |
| Deposits retained for reinsurance ceded | 1,869 | 1,834 |
| Derivative financial instruments used for hedging that meet the criteria for hedge accounting and firm commitments |
193 | 462 |
| Financial liabilities for puttable equity instruments |
2,836 | 2,601 |
| Other liabilities | 7,809 | 6,270 |
| Total | 37,678 | 37,392 |
With regard to the closure of Allianz Bank on 30 June 2013, restructuring charges of €90 mn were recorded in the first nine months of 2013. This includes restructuring provisions of €81 mn, which were partly utilized as of 30 September 2013.
In the fourth quarter of 2012, Allianz Managed Operations & Services (AMOS) launched a restructuring program, mainly in Germany, regarding the global Allianz data center consolidation. In July 2013, AMOS announced that a higher number of the affected employees in Germany than originally expected will be assumed by a service provider, which led to a reduction of the original restructuring provision of €26 mn.
The use of the provisions as well as the transfers to other provisions of other restructuring programs resulted in an overall reduction of restructuring provisions. There were no other significant changes in the estimates for restructuring provisions as described in the Allianz Group Annual Report 2012.
| Certificated liabilities | B 41 | |
|---|---|---|
| € mn | ||
| as of | as of | |
| 30 September | 31 December | |
| 2013 | 2012 | |
| Allianz SE1 | ||
| Senior bonds2 | 6,575 | 5,942 |
| Money market securities | 1,066 | 1,180 |
| Subtotal | 7,641 | 7,122 |
| Banking subsidiaries | ||
| Senior bonds | 591 | 813 |
| Subtotal | 591 | 813 |
| All other subsidiaries | ||
| Certificated liabilities | – | 25 |
| Subtotal | – | 25 |
| Total | 8,232 | 7,960 |
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.
2 Change due to the issuance of senior bonds in the amount of €2.1 bn in the first quarter of 2013 and the repayment of a €1.5 bn bond in the first quarter of 2013.
| Participation certificates and subordinated liabilities | B 42 | |
|---|---|---|
| € mn | ||
| as of 30 September 2013 |
as of 31 December 2012 |
|
| Allianz SE1 | ||
| Subordinated bonds2 | 9,373 | 10,896 |
| Subtotal | 9,373 | 10,896 |
| Banking subsidiaries | ||
| Subordinated bonds | 264 | 274 |
| Subtotal | 264 | 274 |
| All other subsidiaries | ||
| Subordinated bonds | 399 | 399 |
| Hybrid equity | 45 | 45 |
| Subtotal | 444 | 444 |
| Total | 10,081 | 11,614 |
1 Includes subordinated bonds issued by Allianz Finance II B.V. and guaranteed by Allianz SE. 2 Change due to redemption of a USD2.0 bn bond in the second quarter of 2013.
| equity | B 43 | |
|---|---|---|
| € mn | ||
| as of | as of | |
| 30 September 2013 |
31 December 2012 |
|
| Shareholders' equity | ||
| Issued capital | 1,167 | 1,167 |
| Capital reserves | 27,648 | 27,648 |
| Retained earnings1 | 16,084 | 13,524 |
| Foreign currency translation adjustments |
(2,903) | (2,073) |
| Unrealized gains and losses (net)2 | 6,774 | 10,122 |
| Subtotal | 48,770 | 50,388 |
| Non-controlling interests | 2,680 | 2,575 |
| Total | 51,450 | 52,963 |
1 As of 30 September 2013, includes €(214) mn (2012: €(218) mn) related to treasury shares. 2 As of 30 September 2013, includes €207 mn (2012: €256 mn) related to cash flow hedges.
| Premiums earned (net) | B 44 | |||
|---|---|---|---|---|
| € mn | ||||
| three months ended 30 September | Property-Casualty | Life/Health | Consolidation | Group |
| 2013 | ||||
| Premiums written | ||||
| Direct | 9,829 | 5,794 | – | 15,623 |
| Assumed | 822 | 265 | (17) | 1,070 |
| Subtotal | 10,651 | 6,059 | (17) | 16,693 |
| Ceded | (859) | (136) | 17 | (978) |
| Net | 9,792 | 5,923 | – | 15,715 |
| Change in unearned premiums | ||||
| Direct | 1,175 | (54) | – | 1,121 |
| Assumed | (62) | (1) | (1) | (64) |
| Subtotal | 1,113 | (55) | (1) | 1,057 |
| Ceded | (137) | 1 | 1 | (135) |
| Net | 976 | (54) | – | 922 |
| Premiums earned | ||||
| Direct | 11,004 | 5,740 | – | 16,744 |
| Assumed | 760 | 264 | (18) | 1,006 |
| Subtotal | 11,764 | 6,004 | (18) | 17,750 |
| Ceded | (996) | (135) | 18 | (1,113) |
| Net | 10,768 | 5,869 | – | 16,637 |
| 2012 | ||||
| Premiums written | ||||
| Direct | 10,326 | 5,734 | (53) | 16,007 |
| Assumed | 1,066 | 170 | (12) | 1,224 |
| Subtotal | 11,392 | 5,904 | (65) | 17,231 |
| Ceded | (1,372) | (192) | 12 | (1,552) |
| Net | 10,020 | 5,712 | (53) | 15,679 |
| Change in unearned premiums | ||||
| Direct | 996 | (69) | – | 927 |
| Assumed | (23) | (2) | – | (25) |
| Subtotal | 973 | (71) | – | 902 |
| Ceded | (189) | 2 | – | (187) |
| Net | 784 | (69) | – | 715 |
| Premiums earned | ||||
| Direct | 11,322 | 5,665 | (53) | 16,934 |
| Assumed | 1,043 | 168 | (12) | 1,199 |
| Subtotal | 12,365 | 5,833 | (65) | 18,133 |
| Ceded | (1,561) | (190) | 12 | (1,739) |
| Net | 10,804 | 5,643 | (53) | 16,394 |
€ mn nine months ended 30 September Property-Casualty Life/Health Consolidation Group 2013 Premiums written Direct 34,394 18,215 – 52,609 Assumed 2,208 571 (42) 2,737 Subtotal 36,602 18,786 (42) 55,346 Ceded (3,290) (427) 42 (3,675) Net 33,312 18,359 – 51,671 Change in unearned premiums Direct (1,831) (219) – (2,050) Assumed (305) – (2) (307) Subtotal (2,136) (219) (2) (2,357) Ceded 283 1 2 286 Net (1,853) (218) – (2,071) Premiums earned Direct 32,563 17,996 – 50,559 Assumed 1,903 571 (44) 2,430 Subtotal 34,466 18,567 (44) 52,989 Ceded (3,007) (426) 44 (3,389) Net 31,459 18,141 – 49,600 2012 Premiums written Direct 34,177 17,775 (53) 51,899 Assumed 2,738 453 (33) 3,158 Subtotal 36,915 18,228 (86) 55,057 Ceded (3,996) (503) 33 (4,466) Net 32,919 17,725 (53) 50,591 Change in unearned premiums Direct (1,852) (187) – (2,039) Assumed (373) (1) 2 (372) Subtotal (2,225) (188) 2 (2,411) Ceded 457 1 (2) 456 Net (1,768) (187) – (1,955) Premiums earned Direct 32,325 17,588 (53) 49,860 Assumed 2,365 452 (31) 2,786 Subtotal 34,690 18,040 (84) 52,646 Ceded (3,539) (502) 31 (4,010)
Net 31,151 17,538 (53) 48,636
| € mn | |||||
|---|---|---|---|---|---|
| three months ended 30 September |
nine months ended 30 September |
||||
| 2013 | 2012 | 2013 | 2012 | ||
| Interest from held-to-maturity investments | 44 | 51 | 137 | 153 | |
| Dividends from available-for-sale investments | 259 | 250 | 1,082 | 923 | |
| Interest from available-for-sale investments | 3,263 | 3,289 | 9,878 | 9,944 | |
| Share of earnings from investments in associates and joint ventures | 65 | 50 | 110 | 95 | |
| Rent from real estate held for investment | 197 | 180 | 590 | 548 | |
| Interest from loans to banks and customers | 1,263 | 1,349 | 3,807 | 4,060 | |
| Other interest | 38 | 45 | 104 | 111 | |
| Total | 5,129 | 5,214 | 15,708 | 15,834 | |
| € mn | ||||||
|---|---|---|---|---|---|---|
| three months ended 30 September | Property Casualty |
Life/Health | Asset Manage ment |
Corporate and Other |
Consoli dation |
Group |
| 2013 | ||||||
| Income (expenses) from financial assets and liabilities held for trading (net) | 11 | 125 | 1 | 51 | – | 188 |
| Income (expenses) from financial assets and liabilities designated at fair value through income (net) |
3 | 144 | 27 | 1 | – | 175 |
| Income (expenses) from financial liabilities for puttable equity instruments (net) |
(1) | (79) | (25) | – | – | (105) |
| Foreign currency gains and losses (net) | (54) | (720) | (2) | (44) | – | (820) |
| Total | (41) | (530) | 1 | 8 | – | (562) |
| 2012 | ||||||
| Income (expenses) from financial assets and liabilities held for trading (net) | 4 | (176) | 2 | (34) | 9 | (195) |
| Income (expenses) from financial assets and liabilities designated at fair value through income (net) |
5 | 215 | 34 | 1 | – | 255 |
| Income (expenses) from financial liabilities for puttable equity instruments (net) |
(1) | (127) | (25) | – | – | (153) |
| Foreign currency gains and losses (net) | (21) | (30) | (1) | 6 | – | (46) |
| Total | (13) | (118) | 10 | (27) | 9 | (139) |
Income from financial assets and liabilities carried at fair value through income (net) (continued) B 48
€ mn nine months ended 30 September Property-Casualty Life/Health Asset Management Corporate and Other Consolidation Group 2013 Income (expenses) from financial assets and liabilities held for trading (net) (3) (686) 1 (4) 2 (690) Income (expenses) from financial assets and liabilities designated at fair value through income (net) 10 248 45 1 (1) 303 Income (expenses) from financial liabilities for puttable equity instruments (net) (3) (140) (37) – – (180) Foreign currency gains and losses (net) (58) (874) (1) 13 – (920) Total (54) (1,452) 8 10 1 (1,487) 2012 Income (expenses) from financial assets and liabilities held for trading (net) (92) (862) (2) 322 1 (633) Income (expenses) from financial assets and liabilities designated at fair value through income (net) 33 371 65 (1) (1) 467 Income (expenses) from financial liabilities for puttable equity instruments (net) (14) (209) (45) – – (268) Foreign currency gains and losses (net) (7) 232 (1) (19) – 205 Total (80) (468) 17 302 – (229)
The following additional information for income from financial assets and liabilities carried at fair value through income (net) relates to the nine months ended September 2013:
For the nine months ended 30 September 2013, income and expenses from financial assets and liabilities held for trading (net) in the business segment Life/Health includes expenses of €705 mn (2012: €899 mn) from derivative financial instruments. Included in this are expenses of €10 mn (2012: €138 mn) from financial derivative positions of German entities, of which expenses of €208 mn (2012: income of €359 mn) relate to duration management, income of €9 mn (2012: expenses of €321 mn) relates to protection against equity fluctuations and income of €196 mn (2012: expenses of €170 mn) relates 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 €652 mn (2012: €645 mn) from U.S. entities.
For the nine months ended 30 September 2013, income and expenses from financial assets and liabilities held for trading (net) in the business segment Corporate and Other includes income of €57 mn (2012: €391 mn) from derivative financial instruments. This includes income of €16 mn (2012: €16 mn) from financial derivative instruments to protect investments and liabilities against foreign exchange rate fluctuations. In 2013, hedging of strategic equity investments not designated for hedge accounting produced no income (2012: income of €5 mn). Financial derivatives related to The Hartford investment produced no income (2012: income of €180 mn) as The Hartford Warrants were sold by the Allianz Group in April 2012. Expenses of €64 mn (2012: €78 mn) from the hedges of share-based compensation plans (restricted stock units) are also included.
For the nine months ended 30 September 2013, 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 €159 mn (2012: €229 mn) and income of €89 mn (2012: €142 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. This excludes exchange differences arising on financial assets and liabilities measured at fair value through profit or loss, which do not have to be disclosed separately. 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, income in the amount of €230 mn (2012: expenses of €146 mn) was recognized for the nine months ended 30 September 2013.
| Realized gains/losses (net) | B 49 | |||||
|---|---|---|---|---|---|---|
| € mn | three months ended 30 September |
nine months ended 30 September |
||||
| 2013 | 2012 | 2013 | 2012 | |||
| Realized gains | ||||||
| Available-for-sale investments | ||||||
| Equity securities | 358 | 462 | 1,502 | 1,850 | ||
| Debt securities | 457 | 677 | 1,590 | 1,632 | ||
| Subtotal | 815 | 1,139 | 3,092 | 3,482 | ||
| Investments in associates and joint ventures1 | – | 12 | 39 | 14 | ||
| Real estate held for investment | 22 | 8 | 100 | 69 | ||
| Loans and advances to banks and customers | 107 | 76 | 293 | 682 | ||
| Non-current assets classified as held for sale | – | – | 12 | 8 | ||
| Subtotal | 944 | 1,235 | 3,536 | 4,255 | ||
| Realized losses | ||||||
| Available-for-sale investments | ||||||
| Equity securities | (70) | (41) | (160) | (169) | ||
| Debt securities | (183) | (451) | (337) | (1,038) | ||
| Subtotal | (253) | (492) | (497) | (1,207) | ||
| Investments in associates and joint ventures2 | (2) | (5) | (5) | (5) | ||
| Real estate held for investment | 1 | – | (2) | (1) | ||
| Loans and advances to banks and customers | – | (3) | (2) | (4) | ||
| Non-current assets classified as held for sale | – | – | (3) | – | ||
| Subtotal | (254) | (500) | (509) | (1,217) | ||
| Total | 690 | 735 | 3,027 | 3,038 | ||
1 For the three and the nine months ended 30 September 2013, includes realized gains from the disposal of subsidiaries of €– mn (2012: €12 mn) and €38 mn (2012: €12 mn), respectively.
2 For the three and the nine months ended 30 September 2013, includes realized losses from the disposal of subsidiaries of €– mn (2012: €5 mn) and €– mn (2012: €5 mn), respectively.
| € mn | ||||
|---|---|---|---|---|
| three months ended 30 September |
nine months ended 30 September |
|||
| 2013 | 2012 | 2013 | 2012 | |
| Property-Casualty | ||||
| Fees from credit and assistance business | 191 | 178 | 570 | 541 |
| Service agreements | 127 | 99 | 345 | 317 |
| Subtotal | 318 | 277 | 915 | 858 |
| Life/Health | ||||
| Service agreements | 17 | 18 | 56 | 55 |
| Investment advisory | 149 | 117 | 418 | 338 |
| Subtotal | 166 | 135 | 474 | 393 |
| Asset Management | ||||
| Management fees | 1,827 | 1,683 | 5,525 | 4,768 |
| Loading and exit fees | 178 | 188 | 552 | 453 |
| Performance fees | 42 | 284 | 396 | 383 |
| Other | 12 | 27 | 51 | 95 |
| Subtotal | 2,059 | 2,182 | 6,524 | 5,699 |
| Corporate and Other | ||||
| Service agreements | 24 | 16 | 49 | 48 |
| Investment advisory and banking activities | 146 | 137 | 464 | 428 |
| Subtotal | 170 | 153 | 513 | 476 |
| Consolidation | (129) | (118) | (409) | (367) |
| Total | 2,584 | 2,629 | 8,017 | 7,059 |
| oTHER INCOME |
B 51 | |||
|---|---|---|---|---|
| € mn | three months ended 30 September |
nine months ended 30 September |
||
| 2013 | 2012 | 2013 | 2012 | |
| Income from real estate held for own use | ||||
| Realized gains from disposals of real estate held for own use | 3 | – | 20 | 14 |
| Other income from real estate held for own use | – | 8 | – | 8 |
| Subtotal | 3 | 8 | 20 | 22 |
| Income from alternative investments | 39 | 37 | 120 | 125 |
| Other | – | 4 | 4 | 11 |
| Total | 42 | 49 | 144 | 158 |
| € mn | ||||
|---|---|---|---|---|
| three months ended 30 September |
nine months ended 30 September |
|||
| 2013 | 2012 | 2013 | 2012 | |
| Income | ||||
| Sales and service revenues | 181 | 197 | 543 | 590 |
| Other operating revenues | – | – | – | – |
| Interest income | – | – | – | – |
| Subtotal | 181 | 197 | 543 | 590 |
| Expenses | ||||
| Cost of goods sold | (54) | (62) | (163) | (188) |
| Commissions | – | – | – | – |
| General and administrative expenses | (125) | (135) | (375) | (393) |
| Other operating expenses | – | – | – | – |
| Interest expenses | (7) | (10) | (24) | (32) |
| Subtotal1 | (186) | (207) | (562) | (613) |
| Total1 | (5) | (10) | (19) | (23) |
1 The presented subtotal for expenses and total income and expenses from fully consolidated private equity investments for the three and the nine months ended 30 September 2013 differs from the amounts presented in the "Consolidated Income Statements" and in "Total revenues and reconciliation of Operating profit (loss) to Net income (loss)". This difference is due to a consolidation effect of €1 mn (2012: €6 mn) and €7 mn (2012: €(34) mn) for the three and the nine months ended 30 September 2013, respectively. This consolidation effect results from the deferred policyholder participation, recognized on the result from fully consolidated private equity investments within operating profit in the business segment Life/ Health, that was reclassified into expenses from fully consolidated private equity investments in non-operating profit to ensure a consistent presentation of the Allianz Group's operating profit.
| € mn three months ended 30 September |
Property-Casualty | Life/Health | Consolidation | Group |
|---|---|---|---|---|
| 2013 | ||||
| Gross | ||||
| Claims and insurance benefits paid | (7,594) | (4,636) | 9 | (12,221) |
| Change in reserves for loss and loss adjustment expenses | 57 | (98) | (6) | (47) |
| Subtotal | (7,537) | (4,734) | 3 | (12,268) |
| Ceded | ||||
| Claims and insurance benefits paid | 438 | 93 | (8) | 523 |
| Change in reserves for loss and loss adjustment expenses | (134) | (2) | 7 | (129) |
| Subtotal | 304 | 91 | (1) | 394 |
| Net | ||||
| Claims and insurance benefits paid | (7,156) | (4,543) | 1 | (11,698) |
| Change in reserves for loss and loss adjustment expenses | (77) | (100) | 1 | (176) |
| Total | (7,233) | (4,643) | 2 | (11,874) |
| 2012 | ||||
| Gross | ||||
| Claims and insurance benefits paid | (6,978) | (4,608) | – | (11,586) |
| Change in reserves for loss and loss adjustment expenses | (1,120) | (47) | 2 | (1,165) |
| Subtotal | (8,098) | (4,655) | 2 | (12,751) |
| Ceded | ||||
| Claims and insurance benefits paid | 391 | 104 | 1 | 496 |
| Change in reserves for loss and loss adjustment expenses | 225 | 1 | (2) | 224 |
| Subtotal | 616 | 105 | (1) | 720 |
| Net | ||||
| Claims and insurance benefits paid | (6,587) | (4,504) | 1 | (11,090) |
| Change in reserves for loss and loss adjustment expenses | (895) | (46) | – | (941) |
| Total | (7,482) | (4,550) | 1 | (12,031) |
| € mn nine months ended 30 September |
Property-Casualty | Life/Health | Consolidation | Group |
|---|---|---|---|---|
| 2013 | ||||
| Gross | ||||
| Claims and insurance benefits paid | (23,218) | (14,634) | 23 | (37,829) |
| Change in reserves for loss and loss adjustment expenses | 660 | (152) | (6) | 502 |
| Subtotal | (22,558) | (14,786) | 17 | (37,327) |
| Ceded | ||||
| Claims and insurance benefits paid | 1,573 | 345 | (19) | 1,899 |
| Change in reserves for loss and loss adjustment expenses | (45) | (18) | 7 | (56) |
| Subtotal | 1,528 | 327 | (12) | 1,843 |
| Net | ||||
| Claims and insurance benefits paid | (21,645) | (14,289) | 4 | (35,930) |
| Change in reserves for loss and loss adjustment expenses | 615 | (170) | 1 | 446 |
| Total | (21,030) | (14,459) | 5 | (35,484) |
| 2012 | ||||
| Gross | ||||
| Claims and insurance benefits paid | (21,362) | (14,297) | 16 | (35,643) |
| Change in reserves for loss and loss adjustment expenses | (1,677) | (326) | 4 | (1,999) |
| Subtotal | (23,039) | (14,623) | 20 | (37,642) |
| Ceded | ||||
| Claims and insurance benefits paid | 1,431 | 341 | (15) | 1,757 |
| Change in reserves for loss and loss adjustment expenses | 125 | 53 | (4) | 174 |
| Subtotal | 1,556 | 394 | (19) | 1,931 |
| Net | ||||
| Claims and insurance benefits paid | (19,931) | (13,956) | 1 | (33,886) |
| Change in reserves for loss and loss adjustment expenses | (1,552) | (273) | – | (1,825) |
| Total | (21,483) | (14,229) | 1 | (35,711) |
| Change in reserves for insurance and investment contracts (net) | B 55 | |||
|---|---|---|---|---|
| € mn three months ended 30 September |
Property-Casualty | Life/Health | Consolidation | Group |
| 2013 | ||||
| Gross | ||||
| Aggregate policy reserves | (59) | (2,064) | (2) | (2,125) |
| Other insurance reserves | – | (36) | – | (36) |
| Expenses for premium refunds | (47) | (1,093) | (1) | (1,141) |
| Subtotal | (106) | (3,193) | (3) | (3,302) |
| Ceded | ||||
| Aggregate policy reserves | 1 | 53 | 1 | 55 |
| Other insurance reserves | – | 2 | – | 2 |
| Expenses for premium refunds | (1) | (1) | – | (2) |
| Subtotal | – | 54 | 1 | 55 |
| Net | ||||
| Aggregate policy reserves | (58) | (2,011) | (1) | (2,070) |
| Other insurance reserves | – | (34) | – | (34) |
| Expenses for premium refunds | (48) | (1,094) | (1) | (1,143) |
| Total | (106) | (3,139) | (2) | (3,247) |
| 2012 | ||||
| Gross | ||||
| Aggregate policy reserves | (56) | (2,084) | 51 | (2,089) |
| Other insurance reserves | – | (59) | – | (59) |
| Expenses for premium refunds | (52) | (1,359) | (35) | (1,446) |
| Subtotal | (108) | (3,502) | 16 | (3,594) |
| Ceded | ||||
| Aggregate policy reserves | – | 68 | – | 68 |
| Other insurance reserves | – | 3 | – | 3 |
| Expenses for premium refunds | – | 9 | – | 9 |
| Subtotal | – | 80 | – | 80 |
| Net | ||||
| Aggregate policy reserves | (56) | (2,016) | 51 | (2,021) |
| Other insurance reserves | – | (56) | – | (56) |
| Expenses for premium refunds | (52) | (1,350) | (35) | (1,437) |
| Total | (108) | (3,422) | 16 | (3,514) |
| Change in reserves for insurance and investment contracts (net) (continued) | B 56 | |||
|---|---|---|---|---|
| € mn nine months ended 30 September |
Property-Casualty | Life/Health | Consolidation | Group |
| 2013 | ||||
| Gross | ||||
| Aggregate policy reserves | (170) | (5,895) | (3) | (6,068) |
| Other insurance reserves | (2) | (87) | – | (89) |
| Expenses for premium refunds | (147) | (4,189) | (28) | (4,364) |
| Subtotal | (319) | (10,171) | (31) | (10,521) |
| Ceded | ||||
| Aggregate policy reserves | 3 | 94 | – | 97 |
| Other insurance reserves | (1) | 6 | – | 5 |
| Expenses for premium refunds | (1) | 3 | – | 2 |
| Subtotal | 1 | 103 | – | 104 |
| Net | ||||
| Aggregate policy reserves | (167) | (5,801) | (3) | (5,971) |
| Other insurance reserves | (3) | (81) | – | (84) |
| Expenses for premium refunds | (148) | (4,186) | (28) | (4,362) |
| Total | (318) | (10,068) | (31) | (10,417) |
| 2012 | ||||
| Gross | ||||
| Aggregate policy reserves | (161) | (5,961) | 51 | (6,071) |
| Other insurance reserves | – | (120) | – | (120) |
| Expenses for premium refunds | (103) | (4,702) | (6) | (4,811) |
| Subtotal | (264) | (10,783) | 45 | (11,002) |
| Ceded | ||||
| Aggregate policy reserves | – | 118 | – | 118 |
| Other insurance reserves | – | 6 | – | 6 |
| Expenses for premium refunds | – | 6 | – | 6 |
| Subtotal | – | 130 | – | 130 |
| Net | ||||
| Aggregate policy reserves | (161) | (5,843) | 51 | (5,953) |
| Other insurance reserves | – | (114) | – | (114) |
| Expenses for premium refunds | (103) | (4,696) | (6) | (4,805) |
| Total | (264) | (10,653) | 45 | (10,872) |
| € mn | three months ended 30 September |
nine months ended 30 September |
|||
|---|---|---|---|---|---|
| 2013 | 2012 | 2013 | 2012 | ||
| Liabilities to banks and customers | (62) | (82) | (196) | (260) | |
| Deposits retained on reinsurance ceded | (8) | (13) | (31) | (37) | |
| Certificated liabilities | (68) | (89) | (204) | (259) | |
| Participation certificates and subordinated liabilities | (142) | (144) | (486) | (481) | |
| Other | (20) | (27) | (69) | (68) | |
| Total | (300) | (355) | (986) | (1,105) |
| three months ended | nine months ended | ||
|---|---|---|---|
| 2013 | 2012 | 2013 | 2012 |
| (36) | (38) | (116) | (159) |
| 15 | 22 | 54 | 43 |
| 3 | 3 | 15 | 15 |
| (18) | (13) | (47) | (101) |
| 30 September | 30 September |
| € mn | ||||
|---|---|---|---|---|
| three months ended 30 September |
nine months ended 30 September |
|||
| 2013 | 2012 | 2013 | 2012 | |
| Impairments | ||||
| Available-for-sale investments | ||||
| Equity securities | (45) | (65) | (304) | (684) |
| Debt securities | (11) | (34) | (36) | (47) |
| Subtotal | (56) | (99) | (340) | (731) |
| Investments in associates and joint ventures1 | (81) | (22) | (81) | (23) |
| Real estate held for investment | (16) | (6) | (38) | (8) |
| Loans and advances to banks and customers | (5) | (4) | (17) | (7) |
| Non-current assets classified as held for sale | (31) | – | (31) | – |
| Subtotal | (189) | (131) | (507) | (769) |
| Reversals of impairments | ||||
| Available-for-sale investments | ||||
| Debt securities | 9 | 1 | 11 | 16 |
| Real estate held for investment | 17 | 29 | 17 | 29 |
| Loans and advances to banks and customers | 1 | – | 1 | 13 |
| Subtotal | 27 | 30 | 29 | 58 |
| Total | (162) | (101) | (478) | (711) |
1 For the three and the nine months ended 30 September 2013, includes an impairment of an associated Italian real estate company in the amount of €(81) mn. The fair value is classified as level 3 in the fair value hierarchy and based on a third-party valuation using a discounted cash flow approach.
| € mn | three months ended 30 September |
nine months ended 30 September |
||
|---|---|---|---|---|
| 2013 | 2012 | 2013 | 2012 | |
| Investment management expenses | (130) | (150) | (387) | (401) |
| Depreciation of real estate held for investment | (56) | (50) | (157) | (141) |
| Other expenses from real estate held for investment | (42) | (30) | (109) | (101) |
| Total | (228) | (230) | (653) | (643) |
€ mn three months ended 30 September nine months ended 30 September 2013 2012 2013 2012 Property-Casualty Acquisition costs Incurred (2,307) (2,283) (7,380) (7,085) Commissions and profit received on reinsurance business ceded 132 151 352 368 Deferrals of acquisition costs 1,334 1,290 4,477 4,345 Amortization of deferred acquisition costs (1,470) (1,445) (4,240) (4,172) Subtotal (2,311) (2,287) (6,791) (6,544) Administrative expenses (665) (628) (2,070) (2,045) Subtotal (2,976) (2,915) (8,861) (8,589) Life/Health Acquisition costs Incurred (1,041) (1,056) (3,297) (3,289) Commissions and profit received on reinsurance business ceded 17 27 46 81 Deferrals of acquisition costs 633 638 2,101 2,078 Amortization of deferred acquisition costs (556) (579) (1,832) (1,928) Subtotal (947) (970) (2,982) (3,058) Administrative expenses (375) (331) (1,066) (1,017) Subtotal (1,322) (1,301) (4,048) (4,075) Asset Management Personnel expenses (601) (705) (1,961) (1,795) Non-personnel expenses (348) (331) (1,046) (947) Subtotal (949) (1,036) (3,007) (2,742) Corporate and Other Administrative expenses (327) (315) (968) (890) Subtotal (327) (315) (968) (890) Consolidation (7) (7) 12 21 Total (5,581) (5,574) (16,872) (16,275)
| € mn | ||||
|---|---|---|---|---|
| three months ended 30 September |
nine months ended 30 September |
|||
| 2013 | 2012 | 2013 | 2012 | |
| Property-Casualty | ||||
| Fees from credit and assistance business | (188) | (177) | (560) | (527) |
| Service agreements | (105) | (82) | (280) | (272) |
| Investment advisory | (2) | – | (3) | – |
| Subtotal | (295) | (259) | (843) | (799) |
| Life/Health | ||||
| Service agreements | (7) | (12) | (34) | (37) |
| Investment advisory | (54) | (45) | (157) | (138) |
| Subtotal | (61) | (57) | (191) | (175) |
| Asset Management | ||||
| Commissions | (337) | (327) | (1,062) | (919) |
| Other | (25) | (34) | (59) | (50) |
| Subtotal | (362) | (361) | (1,121) | (969) |
| Corporate and Other | ||||
| Service agreements | (68) | (50) | (177) | (132) |
| Investment advisory and banking activities | (58) | (58) | (192) | (183) |
| Subtotal | (126) | (108) | (369) | (315) |
| Consolidation | 56 | 56 | 170 | 159 |
| Total | (788) | (729) | (2,354) | (2,099) |
| Other expenses | B 63 | |||
|---|---|---|---|---|
| € mn | three months ended 30 September |
nine months ended 30 September |
||
| 2013 | 2012 | 2013 | 2012 | |
| Realized losses from disposals of real estate held for own use | – | (1) | (1) | (2) |
| Expenses from alternative investments | (22) | (23) | (66) | (65) |
| Other | (6) | (1) | (15) | (2) |
| Total | (28) | (25) | (82) | (69) |
56 Consolidated Statements of Changes in Equity
| € mn | three months ended 30 September |
nine months ended 30 September |
|||
|---|---|---|---|---|---|
| 2013 | 2012 | 2013 | 2012 | ||
| Current income taxes | (650) | (893) | (2,118) | (2,465) | |
| Deferred income taxes | (96) | 144 | (329) | 161 | |
| Total | (746) | (749) | (2,447) | (2,304) |
For the three and the nine months ended 30 September 2013 and 2012, the income taxes relating to components of other comprehensive income consist of the following:
| € mn | |||||
|---|---|---|---|---|---|
| three months ended 30 September |
nine months ended 30 September |
||||
| 2013 | 2012 | 2013 | 2012 | ||
| Items that may be reclassified to profit and loss in future periods | |||||
| Foreign currency translation adjustments | (32) | (1) | (9) | (3) | |
| Available-for-sale investments | 5 | (1,115) | 1,437 | (2,012) | |
| Cash flow hedges | 14 | (14) | 21 | (25) | |
| Share of other comprehensive income of associates | 2 | – | 6 | (1) | |
| Miscellaneous | (48) | 17 | 84 | 34 | |
| Items that may never be reclassified to profit and loss | |||||
| Actuarial gains (losses) on defined benefit plans | 32 | 417 | 33 | 518 | |
| Total | (27) | (696) | 1,572 | (1,489) | |
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 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 the 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 September 2013, fair values could not be reliably measured for equity investments with carrying amounts totaling €200 mn (31 December 2012: €223 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 consists of three levels based on the observability of inputs within the corresponding valuation techniques used.
In general, the subsidiaries assume responsibility for assessing fair values of assets and liabilities. This is consistent with the decentralized organizational structure 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 fair values of financial instruments that are traded in active markets are based on 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.
If the market for a financial instrument is not active, the fair value is determined by using valuation techniques. The valuation techniques used are mainly based on market observable inputs. Such market inputs 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:
− Available-for-sale investments,
− Financial assets and liabilities for unit-linked contracts,
The following tables present the fair value hierarchy for financial instruments carried at fair value in the consolidated balance sheets as of 30 September 2013 and 31 December 2012.
| Fair value hierarchy As Of 30 september 2013 (items carried at fair value) | B 66 |
|---|---|
| ---------------------------------------------------------------------------- | ------ |
| € 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 | 96 | 239 | – | 335 |
| Equity securities | 32 | 95 | – | 127 |
| Derivative financial instruments | 179 | 1,413 | 140 | 1,732 |
| Subtotal | 307 | 1,747 | 140 | 2,194 |
| Financial assets designated at fair value through income | ||||
| Debt securities | 1,620 | 416 | 25 | 2,061 |
| Equity securities | 2,398 | – | 268 | 2,666 |
| Subtotal | 4,018 | 416 | 293 | 4,727 |
| Subtotal | 4,325 | 2,163 | 433 | 6,921 |
| Available-for-sale investments | ||||
| Equity securities | 22,309 | 1,383 | 5,051 | 28,743 |
| Government and agency mortgage-backed securities (residential and commercial) |
35 | 2,843 | – | 2,878 |
| Corporate mortgage-backed securities (residential and commercial) |
65 | 11,462 | 32 | 11,559 |
| Other asset-backed securities | 237 | 2,518 | 213 | 2,968 |
| Government and government agency bonds | 139,468 | 21,240 | 77 | 160,785 |
| Corporate bonds | 41,243 | 130,220 | 3,011 | 174,474 |
| Other debt securities | 1,221 | 885 | 494 | 2,600 |
| Subtotal | 204,578 | 170,551 | 8,878 | 384,007 |
| Financial assets for unit-linked contracts | 75,806 | 2,686 | 182 | 78,674 |
| Derivative financial instruments and firm commitments included in other assets |
– | 90 | – | 90 |
| Total | 284,709 | 175,490 | 9,493 | 469,692 |
| Financial liabilities | ||||
| Financial liabilities held for trading | ||||
| Derivative financial instruments | 32 | 1,223 | 4,334 | 5,589 |
| Other trading liabilities | – | 3 | – | 3 |
| Subtotal | 32 | 1,226 | 4,334 | 5,592 |
| Financial liabilities for unit-linked contracts | 75,806 | 2,686 | 182 | 78,674 |
| Derivative financial instruments and firm commitments included in other liabilities |
– | 193 | – | 193 |
| Financial liabilities for puttable equity instruments | 2,722 | 16 | 98 | 2,836 |
| Total | 78,560 | 4,121 | 4,614 | 87,295 |
| € 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 | 226 | – | 328 |
| Equity securities | 69 | 84 | – | 153 |
| Derivative financial instruments | 36 | 1,670 | 159 | 1,865 |
| Subtotal | 207 | 1,980 | 159 | 2,346 |
| Financial assets designated at fair value through income | ||||
| Debt securities | 1,945 | 404 | – | 2,349 |
| Equity securities | 2,355 | – | 233 | 2,588 |
| Subtotal | 4,300 | 404 | 233 | 4,937 |
| Subtotal | 4,507 | 2,384 | 392 | 7,283 |
| Available-for-sale investments | ||||
| Equity securities | 19,933 | 1,291 | 5,263 | 26,487 |
| Government and agency mortgage-backed securities (residential and commercial) |
37 | 4,278 | – | 4,315 |
| Corporate mortgage-backed securities (residential and commercial) |
26 | 11,817 | 30 | 11,873 |
| Other asset-backed securities | 80 | 2,465 | 236 | 2,781 |
| Government and government agency bonds | 138,690 | 21,915 | 38 | 160,643 |
| Corporate bonds | 33,512 | 137,705 | 3,121 | 174,338 |
| Other debt securities | 1,390 | 960 | 467 | 2,817 |
| Subtotal | 193,668 | 180,431 | 9,155 | 383,254 |
| Financial assets for unit-linked contracts | 68,508 | 2,504 | 185 | 71,197 |
| Derivative financial instruments and firm commitments included in other assets |
– | 129 | – | 129 |
| Total | 266,683 | 185,448 | 9,732 | 461,863 |
| Financial liabilities | ||||
| Financial liabilities held for trading | ||||
| Derivative financial instruments | 58 | 756 | 4,581 | 5,395 |
| Other trading liabilities | – | 2 | – | 2 |
| Subtotal | 58 | 758 | 4,581 | 5,397 |
| Financial liabilities for unit-linked contracts | 68,508 | 2,504 | 185 | 71,197 |
| Derivative financial instruments and firm commitments included in other liabilities |
– | 462 | – | 462 |
| Financial liabilities for puttable equity instruments | 2,495 | 26 | 80 | 2,601 |
| Total | 71,061 | 3,750 | 4,846 | 79,657 |
The Allianz Group uses valuation techniques consistent with one or more of the three widely used classes of valuation techniques listed in IFRS 13 to measure fair value:
There is no one-to-one connection between valuation technique and hierarchy level. The hierarchy level is defined via the existence of significant observable inputs for these valuation techniques.
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 deterministic or stochastic discounted cash flow models. Primary inputs to the valuation include volatilities, interest rates, yield curves, credit spreads, dividend estimates 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.
For level 2, the fair value is determined using the market 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. The fair value of the underlying companies is mainly determined using multiple approaches.
Available-for-sale investments – Equity securities For level 2, the fair value is mainly determined using the market approach and 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.
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 discounted cash flow method 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 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 provided by thirdparty vendors.
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 market approach or the income approach. Valuation techniques applied for the income approach mainly include discounted cash flow models as well as the Black-Scholes 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 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 market and the income approach. Primary inputs include market prices of identical or comparable instruments as well as interest rates and credit spreads 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 income approach using present value techniques.
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.
Certain available-for-sale government and government agency bonds in the amount of €0.1 BN as well as corporate bonds in the amount of €2 BN were transferred from level 1 to level 2 during the nine months ended 30 September 2013.
Additionally, available-for-sale government and government agency bonds in the amount of €0.5 BN as well as certain corporate bonds in the amount of €3.2 bn were transferred from level 2 to level 1 during the nine months ended 30 September 2013.
There were no significant transfers into or out of level 3 during the nine months ended 30 September 2013.
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 (€4.0 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 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 approaches (market approach). For certain investments, the invested capital is considered to be a reasonable proxy for the fair value. In these cases, sensitivity analyses are also not applicable.
Corporate bonds within available-for-sale investments classified as level 3 are mainly priced based on the market approach using matrix pricing (€2.7 bn). The primary nonmarket observable input used in the matrix pricing model is a yield 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. 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 (€4.2 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 non-market 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.
| Quantitative description of valuation technique(s) and non -market obs ervable input(s) used |
||||
|---|---|---|---|---|
| € mn | ||||
|---|---|---|---|---|
| Description | Fair value as of | 30 September 2013 Valuation technique(s) | Non-market observable input(s) |
Range |
| Available-for-sale investments | ||||
| Equity securities | 4,022 Net asset value | n/a | n/a | |
| Corporate bonds | 2,711 Matrix pricing | Credit spread | 36 bps – 604 bps | |
| Financial liabilities held for trading | ||||
| Derivative financial instruments | 4,210 | |||
| Fixed indexed annuities | 3,856 Present value of insurance cash flow |
Annuitizations | 0% – 25% | |
| Surrenders | 0% – 25% | |||
| Mortality | 0% – 100% | |||
| Withdrawal benefit election | 0% – 50% | |||
| Variable annuities | 354 Deterministic discounted cash flow |
Surrenders | 0.5% – 35% | |
| Mortality | 0% – 100% | |||
€ mn
| Carrying value (fair value) as of 1 January 2013 |
Additions through purchases and issues |
Net transfers into (out of) level 3 |
Disposals through sales and settlements |
|
|---|---|---|---|---|
| Financial assets | ||||
| Financial assets carried at fair value through income | ||||
| Financial assets held for trading | ||||
| Derivative financial instruments | 159 | 15 | – | (463) |
| Subtotal | 159 | 15 | – | (463) |
| Financial assets designated at fair value through income | ||||
| Debt securities | – | 1 | – | – |
| Equity securities | 233 | 17 | 80 | (84) |
| Subtotal | 233 | 18 | 80 | (84) |
| Available-for-sale investments | ||||
| Equity securities | 5,263 | 723 | (81) | (564) |
| Corporate mortgage-backed securities (residential and commercial) | 30 | 2 | 1 | (3) |
| Other asset-backed securities | 236 | 11 | (3) | (35) |
| Government and government agency bonds | 38 | 52 | – | (8) |
| Corporate bonds | 3,121 | 251 | – | (106) |
| Other debt securities | 467 | 34 | – | (8) |
| Subtotal | 9,155 | 1,073 | (83) | (724) |
| Financial assets for unit-linked contracts | 185 | 2 | 14 | (17) |
| Total financial assets at fair value | 9,732 | 1,108 | 11 | (1,288) |
€ mn
| Carrying value (fair value) as of 1 January 2013 |
Additions through purchases and issues |
Net transfers into (out of) level 3 |
Disposals through sales and settlements |
|---|---|---|---|
| 4,581 | 691 | – | (544) |
| 185 | 2 | 14 | (17) |
| 80 | – | – | – |
| 4,846 | 693 | 14 | (561) |
56 Consolidated Statements of Changes in Equity
B 69
| Net gains (losses) in profit and loss attributable to a change in unrealized gains or losses for financial assets held at the reporting date |
Carrying value (fair value) as of 30 September 2013 |
Changes in the consolidated subsidiaries of the Allianz Group |
Foreign currency translation adjustments |
Impairments | Net gains (losses) recognized in other comprehensive income |
Net gains (losses) recognized in consolidated income statement |
|---|---|---|---|---|---|---|
| 140 | – | (1) | – | – | 430 | |
| 140 | – | (1) | – | – | 430 | |
| 25 | 24 | – | – | – | – | |
| 268 | 1 | – | – | – | 21 | |
| 293 | 25 | – | – | – | 21 | |
| 5,051 | 5 | (61) | (74) | (104) | (56) | |
| 32 | – | (1) | – | 1 | 2 | |
| 213 | – | (4) | (1) | 5 | 4 | |
| 77 | – | (1) | – | (3) | (1) | |
| 3,011 | – | (78) | – | (175) | (2) | |
| 494 | (1) | – | (8) | 10 | – | |
| 8,878 | 4 | (145) | (83) | (266) | (53) | |
| 182 | – | – | (1) | – | (1) | |
| 9,493 | 29 | (146) | (84) | (266) | 397 |
B 70
| Net losses (gains) in profit and loss attributable to a change in unrealized gains or losses for financial liabilities held at the reporting date |
Carrying value (fair value) as of 30 September 2013 |
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 |
|---|---|---|---|---|---|---|
| 270 | 4,334 | – | (114) | – | (2) | (278) |
| – | 182 | – | – | (1) | – | (1) |
| – | 98 | 6 | – | – | 12 | – |
| 270 | 4,614 | 6 | (114) | (1) | 10 | (279) |
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 nonrecurring 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.
| fair value hierarchy as of 30 September 2013 (items not carried at fair value) |
B 71 |
|---|---|
| ----------------------------------------------------------------------------------- | ------ |
| € mn | ||||
|---|---|---|---|---|
| Level 1 – Quoted prices in active markets |
Level 2 – Market observable inputs |
Level 3 – Non-market observable inputs |
Total fair value | |
| Financial assets | ||||
| Held-to-maturity investments | 2,188 | 2,407 | 2 | 4,597 |
| Investments in associates and joint ventures | 591 | 501 | 2,816 | 3,908 |
| Real estate held for investment | – | – | 14,796 | 14,796 |
| Loans and advances to banks and customers | 5,688 | 88,697 | 37,546 | 131,931 |
| Real estate held for own use | – | – | 3,930 | 3,930 |
| Total assets | 8,467 | 91,605 | 59,090 | 159,162 |
| Financial liabilities | ||||
| Liabilities to banks and customers | 5,732 | 2,181 | 14,742 | 22,655 |
| Certificated liabilities | 7,207 | 918 | 718 | 8,843 |
| Participation certificates and subordinated liabilities | 6,546 | 3,916 | 287 | 10,749 |
| Total liabilities | 19,485 | 7,015 | 15,747 | 42,247 |
For level 2, the fair value is mainly determined based on the income approach using deterministic discounted cash flow models. For level 3, the carrying amount (amortized cost) is considered to be a reasonable estimate for the fair value.
For level 2, fair values are mainly derived based on the market approach using multiple approaches. For level 3, fair values are mainly based on an income approach using a discounted cash flow method or net asset values as provided by third-party vendors.
Fair values are mainly determined based on the income approach. In some cases, a market approach is applied using market prices of identical or comparable assets in markets which are not active. The fair values are either calculated internally and validated by external experts or derived from expert appraisals with internal controls in place to monitor these valuations.
For loans and advances to banks and customers, quoted market prices are rarely available. Level 1 consists mainly of highly liquid advances, e. g. short-term investments. The fair value for these assets in level 2 and level 3 is mainly derived based on the income approach using deterministic discounted cash flow models.
in Equity
Level 1 consists mainly of highly liquid liabilities, e. g. payables on demand. The fair value for liabilities in level 2 and level 3 is mainly derived based on the income approach using future cash flows discounted with risk-specific interest rates. Main non-market observable inputs include credit spreads. In some cases, the carrying amount (amortized cost) is considered to be a reasonable estimate of the fair value.
The fair value is determined using quoted market prices, if available. For level 2, the fair value is mainly determined based on the income approach using deterministic discounted cash flow models. For level 3, fair values are mainly derived based on the income approach using deterministic cash flows with credit spreads as primary non-market observable inputs. In some cases, the carrying amount (amortized cost) is considered to be a reasonable estimate for the fair value.
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 2012, the carrying amount and fair value of the CDOs was €370 MN and €366 MN, respectively. As of 30 September 2013, the carrying amount and fair value of the CDOs was €180 MN and €169 MN, respectively. For the nine months ended 30 September 2013, the net profit related to the CDOs was €45 MN, which was primarily due to realized gains recognized in the third quarter as a result of the liquidation of two CDO tranches.
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.
| basic earnings per share |
B 72 |
|---|---|
| ----------------------------- | ------ |
| € mn | three months ended 30 September |
nine months ended 30 September |
||
|---|---|---|---|---|
| 2013 | 2012 | 2013 | 2012 | |
| Net income attributable to shareholders used to calculate basic earnings per share | 1,445 | 1,359 | 4,740 | 3,988 |
| Weighted average number of common shares outstanding | 453,216,918 | 452,603,462 | 453,196,597 | 452,559,292 |
| Basic earnings per share (€) | 3.19 | 3.00 | 10.46 | 8.81 |
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.
| € mn | ||||
|---|---|---|---|---|
| three months ended 30 September |
nine months ended 30 September |
|||
| 2013 | 2012 | 2013 | 2012 | |
| Net income attributable to shareholders | 1,445 | 1,359 | 4,740 | 3,988 |
| Effect of potentially dilutive common shares | (20) | (11) | (54) | (18) |
| Net income attributable to shareholders used to calculate diluted earnings per share | 1,425 | 1,348 | 4,686 | 3,970 |
| Weighted average number of common shares outstanding | 453,216,918 | 452,603,462 | 453,196,597 | 452,559,292 |
| Potentially dilutive common shares resulting from assumed conversion of: | ||||
| Share-based compensation plans | 385,584 | 136,764 | 450,966 | 371,962 |
| Weighted average number of common shares outstanding after assumed conversion |
453,602,502 | 452,740,226 | 453,647,563 | 452,931,254 |
| Diluted earnings per share (€) | 3.14 | 2.98 | 10.33 | 8.77 |
For the nine months ended 30 September 2013, the weighted average number of common shares excludes 2,753,403 (2012: 2,740,708) treasury shares.
Comprehensive Income
56 Consolidated Statements of Changes in Equity
| number of employees | B 74 | |
|---|---|---|
| as of 30 September 2013 |
as of 31 December 2012 |
|
| Germany | 40,630 | 40,882 |
| Other countries1 | 106,784 | 103,212 |
| Total | 147,414 | 144,094 |
As of 30 September 2013, there were no significant changes in contingent liabilities compared to the consolidated financial statements for the year ended 31 December 2012.
As of 30 September 2013, commitments outstanding to invest in private equity funds and similar financial instruments amounted to €2,845 mn (31 December 2012: €2,507 mn) and commitments outstanding to invest in real estate and infrastructure amounted to €1,334 mn (31 December 2012: €962 mn). Other commitments – mainly referring to sponsoring – increased from €241 mn as of 31 December 2012 to €451 mn as of 30 September 2013. All other commitments showed no significant changes.
In October 2013, Allianz SE issued a subordinated bond in the amount of €1.5 BN with no scheduled maturity, but with ordinary call rights of Allianz after 10 years. The coupon of 4.75% p.a. is fixed until 2023.
Munich, 7 November 2013
Allianz SE The Board of Management
We have reviewed the condensed consolidated interim financial statements of Allianz SE, Munich - comprising the consolidated balance sheets, consolidated income statements, consolidated statements of comprehensive income, consolidated statements of changes in equity, condensed consolidated statements of cash flows and selected explanatory notes - together with the interim group management report of Allianz SE, Munich, for the period from 1 January to 30 September 2013 that are part of the quarterly financial report according to §37x Abs.3 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 November 2013
KPMG AG Wirtschaftsprüfungsgesellschaft
Dr. Frank Ellenbürger Dr. Frank Pfaffenzeller Wirtschaftsprüfer Wirtschaftsprüfer
(Independent Auditor) (Independent Auditor)
The accounting terms explained here are intended to help the reader understand this Interim Report. Most of these terms concern the balance sheet or the income statement. Terminology relating to particular segments has not been included.
A
The amount of cash or cash equivalents paid or the fair value of other consideration given to acquire an asset at the time of its acquisition.
The parent company of the Group and all consolidated subsidiaries. Subsidiaries are enterprises where the parent company can exercise a significant influence over their corporate strategy in accordance with the control concept. This is possible, for example, where the parent company holds, directly or indirectly, a majority of the voting rights, has the power to appoint or remove a majority of the members of the Board of Management or equivalent governing body, or where there are contractual rights of control.
Policies in force – especially in life, health, and personal accident insurance – give rise to potential liabilities for which funds have to be set aside. The amount required is calculated actuarially.
The total of all investments, valued at current market value, which the Group has under management with responsibility for maintaining and improving their performance. In addition to the Group's own investments, they include investments held under management for third parties.
All enterprises, other than affiliated enterprises or joint ventures, in which the Group has an interest of between 20% and 50%, regardless of whether a significant influence is actually exercised or not.
Under this accounting principle the difference between the acquisition cost and redemption value (of an investment) is added to or subtracted from the original cost figure over the period from acquisition to maturity and credited or charged to income over the same period.
Available-for-sale investments are securities which are neither held to maturity nor have been acquired for sale in the near term; available-forsale investments are carried at fair value in the balance sheet.
A business combination is a transaction or event in which an acquirer obtains control of one or more businesses. Business combinations are accounted for using the acquisition method.
C
Statement showing movements of cash and cash equivalents during an accounting period, classified by three types of activity, operating activities, investing activities, financing activities.
Certificated liabilities comprise debentures and other liabilities for which transferable certificates have been issued.
A way of packaging credit risk. Several classes of securities (known as tranches) are created from a portfolio of bonds and there are rules for determining how the cost of defaults are allocated to classes.
Represents the total of acquisition and administrative expenses (net) and claims and insurance benefits incurred (net) divided by premiums earned (net).
Financial obligations not shown as liabilities on the balance sheet because the probability of a liability actually being incurred is low. Example: guarantee obligations.
With defined benefit plans, differences come about between the actuarial gains and losses which, when the corridor approach is applied, are not immediately recognized as income or expenses as they occur. Only when the cumulative actuarial gains or losses fall outside the corridor is recognition made from the following year onwards. The corridor is 10% of the present value of the pension rights accrued or of the market value of the pension fund assets, if this is higher.
Represents operating expenses divided by operating revenues.
The risk that one party to a contract will fail to discharge its obligations and thereby cause the other party to incur financial loss.
D
Expenses of an insurance company which are incurred in connection with the acquisition of new insurance policies or the renewal of existing policies. They include commissions paid, underwriting expenses and policy issuance costs.
The calculation of deferred tax is based on tax loss carry forwards, tax credit carry forwards and temporary differences between the carrying amounts of assets or liabilities in the published balance sheet and their tax base, and on differences arising from applying uniform valuation policies for consolidation purposes. The tax rates used for the calculation are the local rates applicable in the countries of the enterprises included in the consolidation; changes to tax rates already adopted on the balance sheet date are taken into account.
For defined benefit plans, the participant is granted a defined benefit by the employer or via an external entity. In contrast to defined contribution arrangements, the future cost to the employer of a defined benefit plan is not known with certainty in advance. To determine the expense over the period, accounting regulations require that actuarial calculations are carried out according to a fixed set of rules.
Financial contracts, the values of which move in relationship to the price of an underlying asset. Derivative financial instruments can be classified in relation to their underlying assets (e.g. interest rates, share prices, foreign currency exchange rates or prices of goods). Important examples of derivative financial instruments are options, futures, forwards and swaps.
E
Ratio calculated by dividing the net income for the year attributable to shareholders by the weighted average number of shares outstanding. For calculating diluted earnings per share the number of shares and the net income for the year attributable to shareholders are adjusted by the dilutive effects of any rights to subscribe for shares which have been or can still be exercised. Subscription rights arise in connection with participation certificates and share-based compensation plans.
Represents acquisition and administrative expenses (net) divided by premiums earned (net).
F
The amount for which an asset could be exchanged between knowledgeable, willing parties in an arm's length transaction.
Options valued at market value.
Financial assets carried at fair value through income include financial assets held for trading and financial assets designated at fair value through income.
income
Financial liabilities carried at fair value through income include financial liabilities held for trading and financial liabilities designated at fair value through income.
Funds held by others are funds to which the reinsurer is entitled but which the ceding insurer retains as collateral for future obligations of the reinsurer. The ceding insurer shows these amounts as "funds held under reinsurance business ceded."
G
Difference between the cost of acquisition and the fair value of the net assets acquired.
In insurance terminology the terms gross and net mean before and after deduction of reinsurance, respectively. In the investment terminology the term "net" is used where the relevant expenses (e.g. depreciations and losses on the disposal of assets) have already been deducted.
H
The use of special financial contracts, especially derivative financial instruments, to reduce losses which may arise as a result of unfavorable movements in rates or prices.
A non-current asset is classified as held for sale if its carrying amount will be recovered principally through sale rather than though continuing use. On the date a non-current asset meets the criteria as held for sale, it is measured at the lower of its carrying amount and fair value less costs to sell.
Held-to-maturity investments comprise debt securities held with the intent and ability that they will be held to maturity. They are valued at amortized cost.
I
International Accounting Standards.
International Financial Reporting Standards. Since 2002, the designation IFRS applies to the overall framework of all standards approved by the International Accounting Standards Board. Already approved standards will continue to be cited as International Accounting Standards (IAS).
The framework for International Financial Reporting Standards (IFRS) which sets out the concepts that underlie the preparation and presentation of financial statements for external users.
Income from financial assets and liabilities carried at fair value through income (net) includes all realized and unrealized gains and losses including interest and dividend income from financial assets and financial liabilities carried at fair value through income, the income (net) from financial liabilities for puttable equity instruments and the foreign currency gains and losses (net).
This heading comprises the capital stock, the premium received on the issue of shares and amounts allocated when option rights are exercised.
An enterprise which is managed jointly by an enterprise in the Group and one or more enterprises not included in the consolidation. The extent of joint management control is more than the significant influence exercised over associated enterprises and less than the control exercised over affiliated enterprises.
J
Represents claims and insurance benefits incurred (net) divided by premiums earned (net).
M
The amount obtainable from the sale of an investment in an active market.
N
Those parts of the equity of affiliated enterprises which are not owned by companies in the Group.
That part of net income for the year which is not attributable to the shareholders of the Allianz Group but to other third parties who hold shares in affiliated enterprises.
P
Amount payable on redemption of participating certificates issued. The participating certificates of Allianz SE carry distribution rights based on the dividends paid, and subscription rights when the capital stock is increased; but they carry no voting rights, no rights to participate in any proceeds of liquidation, and no rights to be converted into shares.
Reserves for current and future post-employment benefits formed for the defined benefit plans of active and former employees. These also include reserves for health care benefits and processing payments.
Premiums written represent all premium revenues in the year under review. Premiums earned represent that part of the premiums written used to provide insurance coverage in that year. In the case of life insurance products where the policyholder carries the investment risk (e.g. variable annuities), only that part of the premiums used to cover the risk insured and costs involved is treated as premium income.
R
Where an insurer transfers part of the risk which he has assumed to another insurer.
A repurchase (repo) transaction involves the sale of securities by the Group to a counterparty, subject to the simultaneous agreement to repurchase these securities at a certain later date, at an agreed price. The securities concerned are retained in the Group's balance sheet for the entire lifetime of the transaction, and are valued in accordance with the accounting principles for financial assets carried at fair value through income or investment securities, respectively. The proceeds of the sale are reported in liabilities to banks or to customers, as appropriate. A reverse repo transaction involves the purchase of securities with the simultaneous obligation to sell these securities at a future date, at an agreed price. Such transactions are reported in loans and advances to banks, or loans and advances to customers, respectively. Interest income from reverse repos and interest expenses from repos are accrued evenly over the lifetime of the transactions and reported under interest and similar income or interest expenses.
Reserves for the cost of insurance claims incurred by the end of the year under review but not yet settled.
That part of the operating surplus which will be distributed to policyholders in the future. This refund of premiums is made on the basis of statutory, contractual, or company by-law obligations, or voluntary undertaking.
In addition to the reserve required by law in the financial statements of the Group parent company, this item consists mainly of the undistributed profits of Group enterprises and amounts transferred from consolidated net income.
S
U
Financial information based on the consolidated financial statements, reported by business segments (Property-Casualty, Life/Health, Asset Management and Corporate and Other) as well as by reportable segments.
Liabilities which, in the event of liquidation or bankruptcy, are not settled until after all other liabilities.
Premiums written attributable to income of future years. The amount is calculated separately for each policy and for every day that the premium still has to cover.
Amount of actuarial gains or losses, in connection with defined benefit pension plans, which are not yet recognized as income or expenses (see also "corridor approach").
Generally Accepted Accounting Principles in the United States of America.
V
The benefits payable under this type of life insurance depend primarily on the performance of the investments in a mutual fund. The policyholder shares equally in the profits or losses of the underlying investments.
Interim Report Third Quarter and First Nine Months of 2013 Allianz Group 127
expenses 90
contracts 91 B40 Other liabilities 92 B41 Certificated liabilities 92
B43 Equity 93
nated liabilities 93
B38 Change in the reserves for loss and loss adjustment expenses in the business segment Property-Casualty 91 B39 Reserves for insurance and investment
B42 Participation certificates and subordi-
B36 Liabilities to banks and customers 90 B37 Reserves for loss and loss adjustment
Other Information
Important dates for shareholders and analysts1
| __________ Financial Results 2013 |
27 February 2014 |
|---|---|
| _____ Annual Report 2013 |
14 March 2014 |
| _______ Annual General Meeting |
7 May 2014 |
| ______ Interim Report 1Q |
14 May 2014 |
| ______ Interim Report 2Q |
8 August 2014 |
| ______ Interim Report 3Q |
7 November 2014 |
1 The German Securities Trading Act ("Wertpapierhandelsgesetz") obliges issuers to announce immediately any information which may have a substantial price impact, irrespective of the communicated schedules. 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.
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